The Board has pleasure in presenting the (13th) Thirteen Annual Report on business andoperations of the Company for the year ended 31st March 2018.
1. FINANCIAL HIGHLIGHTS
|PARTICULARS ||YEAR ENDED 31-03-2018 ||YEAR ENDED 31-03-2017 |
|Revenue from operations (A) ||31412.37 ||44231.09 |
|Other Income (B) ||431.15 ||297.44 |
|Operating expenditure (C) ||33551.24 ||36779.91 |
|Earnings before interest tax depreciation and amortisation (EBITDA) [D=A+B-C] ||(1707.72) ||7748.62 |
|Finance Cost (E) ||5351.94 ||10614.91 |
|Depreciation and amortization expense (F) ||2810.58 ||2912.50 |
|Profit / (Loss) before exceptional items and tax [G=D-E-F] ||(9870.24) ||(5778.79) |
|Exceptional Items [Profit/(Loss)] (H) ||(6410.96) || |
|Profit / ( Loss) before tax [l=G-H] ||(16281.20) ||(5778.79) |
|Provision for Taxation (J) ||2.32 ||14.23 |
|Profit / (Loss) after tax [K=l-J] ||(16283.52) ||(5793.02) |
2. PERFORMANCE REVIEW
During the year under review the Company achieved turnover of Rs. 31412.37 lakhs ascompared to Rs. 44231.09 lakhs in the previous year. The Earnings before interest taxdepreciation and amortisation ("EBITDA") of Rs. (1707.72) lakhs in thefinancial year 2017-18 as compared to Rs. 7748.62 lakhs in the previous year.
Your Directors feel that the Company will be seeing a turnaround in the financial year2018-19 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 2018.
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 Company had also taken various initiatives during the year for ISO awareness likeISO Audits ISO Awareness sessions specially week observations(POI) point of improvementNCRs (NON Conformities) safety week which enhances the three values viz. IntegrityQuality and Safety.
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 PRESENT CAPACFTY UTILIZATION
In view of the market viability over Solar Industry the Company is expected that thefull utilization of capacity will be used by end of the financial year 2018-19.
8. NUMBER OF MEETINGS OF THE BOARD
Six (6) meetings of the board were held during the year. For details of the meetings ofthe board please refer to the point no. 2 of the Corporate Governance Report which formspart of this Report. The intervening gap between any two consecutive Board Meetings didnot 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 Meeting and being eligible has offered himself for there-appointment. The Board of Directors recommended his reappointment for the considerationof the shareholders in ensuring Annual General Meeting. A brief profile and other detailsas required under Regulation 36 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 are provided in the Notice of 13th 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 and Mr. Anand Kumar Agarwal Chief Financial Officer.However Mr. Manish Gupta Company Secretary of the Company has resigned with effect from14th May 2018 after close of financial year.
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 (ListingObligations 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 % 20 AND % 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 the company with related parties during thefinancial year 2017-18 falls under the scope of section 188(1) of the Companies Act 2013.Information on transactions with related parties pursuant to section 134(3)(h) of theCompanies Act 2013 read with rule 8(2) of the Companies (Accounts) Rules 2014 are givenin Annexure II in Form AOC-2 and the same forms part of this Report.
However omnibus approval is obtained from the Audit Committee for the related partytransactions which are unforeseen and repetitive in nature.
14. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
During the financial year 2017-18 the Company has not given loans guarantees/suretyor investment 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 2017-18.
16. AUDIT COMMrTTEE
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
During the year ended 31st March 2018 the Company has increased its authorised sharecapital from Rs. 5000000000 (Rupees Five Hundred Crores) divided into 400000000(Forty Crores) Equity Shares of Rs. 10/- (Rupees Ten) each and 100000000 (Ten Crores)Preference Shares of Rs. 10/- (Rupees Ten) each to Rs. 10000000000 (Rupees One ThousandCrores) divided into 500000000 (Fifty Crores) Equity Shares of Rs. 10/- (Rupees Ten)each and 500000000 (Fifty Crores) Preference Shares of Rs. 10/- (Rupees Ten) each.
During the year ended 31st March 2018 the Company has allotted 8731617 (Eighty SevenLakhs Thirty One Thousand Six Hundred Seventeen) equity shares of face value of Rs. 10/-each (the "Equity Shares") at a price of Rs. 10.88 per share upon conversion of9500000 compulsorily convertible preference shares 'CCPS1.
During the year ended 31st March 2018 the Company has allotted 5205499 (Fifty TwoLakhs Five Thousand Four Hundred Ninety Nine) equity shares of face value of Rs. 10/- each(the "Equity Shares") at a price of Rs. 10/- (Rupees Ten only) to M/s GreenliteLighting Corporation (the "Investor") Promoter Group on a preferential basisagainst conversion of unsecured loan of Rs. 52054995 (Rupees Five Crore Twenty LakhsFifty Four Thousand Nine Hundred Ninety Five Only) taken by the Company from M/s GreenliteLighting Corporation in lieu of equity shares invoked by lender.
During the year ended 31st March 2018 the Company has allotted 1% OptionallyConvertible Cumulative Redeemable Preference Shares of the Company of face value of Rs.10/- each ("OCCRPS") as per the OTS Scheme to its Lenders (Union Bank of India)on preferential basis of Rs. 2070000000 (Two Hundred Seven Crores Only) pursuant toconversion of the relevant portion of the outstanding debt ("Converted Debt")owned to the lenders.
19. UN-CLAIMED SHARES
In terms of Para F of Schedule V to the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (the Listing Regulations) the details of Un-claimedShares are as under:
|Particulars ||No. of holders whose shares are marked as un-claimed ||No. of shares marked as un-claimed |
|A Status of un-claimed shares at the beginning of the year i.e. 1 st April 2017 ||05 ||3385 |
|B. No. of claims received by the Company during the year under review for release of shares ||02 ||637 |
|C. No. of claims settled and shares released to the rightful claimants during the year under review ||02 ||637 |
|D. Transferred to I EPF pursuant to Section 124(6) of the Companies Act 2013 ||NIL ||NIL |
|Balance un-claimed shares as at the end of the year i.e. 31st March 2018 [A-(C+D)] ||03 ||2748 |
20. PROMOTERS/PROMOTERS GROUP
The Company is controlled by Mr. Hulas Rahul Gupta in the capacity as Director andshareholder and by Mr. Bhushan Kumar Gupta Ms. Priya Desh Gupta Ms. Abha Gupta and M/SGreenlite Lighting Corporation in the capacity as shareholder.
21. RISK MANAGEMENT
The Board of Directors is overall responsible for identifying evaluating and managingall the significant risks faced by the Company. The Board has approved the Risk ManagementPolicy which acts as the guideline by which the key risks are managed across theorganization.
The Risk Management Policy is available on the Company's Website www.indosolar.co.in.
22. INTERNAL FINANCIAL CONTROLS AND ITS ADEQUACY
The details in respect of internal financial control and their adequacy are included inthe point no. 6 of the Management Discussion & Analysis Report which forms part ofthis report.
23. VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company promotes ethical behaviour in all its business activities and has put inplace a vigil mechanism for Directors Employees and other person dealing with the Companyfor reporting illegal or unethical behaviour actual or suspected fraud or violation ofthe company's Code of Conduct. The mechanism provides for adequate safeguards againstvictimization of Directors employees or other persons who avail the mechanism. Inexceptional cases Directors and employees have direct access to the Chairman of the AuditCommittee.
The Vigil Mechanism (Whistle Blower Policy) is available on the Company's websitewww.indosolar.co.in.
24. AUDITORS STATUTORY AUDITORS
M/s. Arun K. Gupta and Associates Chartered Accountants (Firm RegistrationNo.0006051N)
New Delhi (Firm Registration Number: 000605N) was appointed as Statutory Auditors ofthe Company (subject to ratification of the appointment by the members at everyintervening Annual General Meeting) for a period of 5 years in the 12th Annual GeneralMeeting to hold office from the conclusion of that meeting till the conclusion of the 17thAnnual General Meeting of the Company.
The annual ratification of appointment of statutory auditors at every Annual GeneralMeeting for their remaining terms as aforesaid shall be done if so required under theCompanies Act 2013.
The Board has duly examined the auditor's report for the Financial year ended 31stMarch 2018 which contain Observation for which Management need to giveClarification/explanation on the observation.
Clarification/explanation on remarks in Independent Auditors' Report
Management is unable to estimate the impact: Considering the delay in release ofdomestic content requirement and impassion of safeguard duty on imports delay inprocessing of claim in respect to the company's eligibility for certain capital incentiveeven after receipt of favorable decision of Supreme court management believes that a sumof Rs.30700.00 Lakhs to be provided as impairment in respect of the carrying value ofits property plant and equipment's including capital work in progress as at 31st March2018.
In view of forthcoming safe guard duty and possible release of CPSU Policy for domesticcontent possible sanction of Capital Subsidy and ongoing process of Loan Settlement withOther Banks and ARCIL it is appropriate to prepare the accounts on a going concern basis.
Being EOU Company is required to meet positive NFE as per foreign Trade policy on thebasis of which company's imported certain Raw material and machineries without payment ofcustom Duty. As on 31 st march 2018 the Company's NFE is positive by Rs. 23913.25 Lakhswithout considering the amortization of import value of Line-C (Commercial Production yetto start). Incase company amortize the value of Line-C NFE as on 31st March 2018 would benegative by Rs.5494.01 Lakhs. The Company believe that it will achieve Positive NFE withinthe stipulated time.
Management's estimation on the impact of audit qualification: (i) In view of theongoing negotiations with ARCIL for restructuring of debts the company has decided not toprovide interest of Rs.1242.72 lakhs and Rs.4934.74 lakhs for the quarter and Year ended31st March 2018 respectively (ii) Company decided not to provide claim of Rs.2323.88Lakhs of Corporation bank as additional interest/penal interest as on 31st March 2018pending 'OTS' (One Time Settlement) proposal with the bank.
Pursuant to the provisions of the Section 204 of the Companies Act 2013 and theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhad appointed M/s Chandrasekaran Associates a firm of Company Secretaries in Practice toundertake the secretarial audit of the company for the Financial Year 2017-18. The reportof Secretarial Audit is annexed to this report as Annexure III.
The Secretarial Auditor's Report contain some observations which are self explanatoryand same has been well explained by management in statutory Auditors' observations.
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 27thMay 2017 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 2017-18.
During the year under review Mr. Lakhan Singh General Manager of IntegratedManagement System of the Company the internal auditors of the Company conducted periodicaudits of the Company. The Audit Committee reviews the detailed Internal Audit reportssubmitted by the Internal Auditors and takes stock of the actions taken on theobservations of and recommendations made by them.
Your Directors are confident that there are adequate internal control systems andprocedures which are being followed and complied with.
25. CONSERVATION OF ENERGY TECHNOLOGY ABSORFITON 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 read with Rule 8(3) of the Companies (Accounts) Rules2014 given as Annexure IV to this Report.
26. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(5) of the Companies Act 2013 theDirectors confirmed that:
a. in the preparation of the annual accounts for the year ended 31st March 2018 theapplicable accounting standards had been followed along with proper explanation relatingto material departures if any;
b. they had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitand loss of the Company for the year ended 31st March 2018;
c. they had taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d. they had prepared the annual accounts on a going concern basis;
e. they had laid down Internal financial controls to be followed by the Company andsuch internal financial controls are adequate and were operating effectively; and
f. they had devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
27. PARTICULARS OF EMPLOYEES & DISCLOSURES UNDER SECTION 197(12) OF ACT READ WITHRULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014
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.
28. 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) Regulations2015 given as Annexure VI forming integral part of the Annual Report.
29. CORPORATE GOVERNANCE REPORT
Your Company strives to ensure that best Corporate Governance Practices are identifiedadopted and consistently 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 Company SecretaryM/s Chandrasekaran Associates Company Secretaries certifying compliance with theconditions of the Corporate Governance as stipulated under Regulation 15(2) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 is annexed with theReport on Corporate Governance.
30. 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 2018 and the date of this Report i.e. 10th August 2018.
31. DETAILS OF SIGNIFICANT AND MATERIAL ORDER
No significant and material order have been passed by any regulator or court ortribunal impacting the going concern status or future operations of the Company.
32. 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 ofThe 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 2017-18. 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 |
33. COMPLIANCE WITH SECRETARIAL STANDARDS
The Company is in compliance with the applicable Secretarial Standards issued byInstitute of Company Secretaries of India.
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 theCompany.
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: 10.08.2018 || |