Your Directors have pleasure in presenting the Twenty Third Annual Report together withthe Audited Statements of Accounts of the Company for the Financial Year ended March 312019. The Management Discussion and Analysis is also included in this Report.
The performance of your Company for the year under review is summarized below:
| || || |
(र in Lakhs)
|Particulars || |
| ||2018-2019 ||2017-2018 ||2018-2019 ||2017-2018 |
|Revenue from Operations ||46.70 ||15.48 ||4099.90 ||2982.18 |
|Other Income (Net of Excise Duty) ||156.26 ||258.18 ||153.59 ||226.16 |
|Total Income / Revenue ||202.96 ||273.66 ||4253.49 ||3208.34 |
|Profit/(Loss) before Interest Depreciation & Tax ||(65.82) ||(8.33) ||319.44 ||260.51 |
|Less: Interest ||1 .29 ||1.79 ||108.26 ||99.65 |
|Profit before Depreciation & Tax ||(67.11) ||(10.12) ||211.18 ||160.86 |
|Less: Depreciation ||17.90 ||20.03 ||207.09 ||184.35 |
|Profit/ (Loss) before Taxation ||(85.01) ||(30.15) ||4.09 ||(23.49) |
|Less: Provision for Current Tax / (MAT) ||- ||8.00 ||- ||8.00 |
|Deferred Tax and adjustments prior year ||- ||- ||- ||- |
|Less MAT Credit ||- ||- ||- ||- |
|Profit/ (Loss) after tax for the year ||(85.01) ||(38.15) ||4.09 ||(31.49) |
|Total other comprehensive income (net of tax) ||50.98 ||105.94 ||39.14 ||107.06 |
|Total comprehensive income for the year ||(34.03) ||67.78 ||43.23 ||75.57 |
Dividend and Reserves
In view of losses suffered by the Company your Directors do not recommend any dividendfor the financial year ended March 31 2019. During the year under review no amount wasrequired to be transferred to General Reserve.
During the year the Company has not issued shares with differential voting rights norhas granted any stock options or sweat equity. There was no provision made of the money bythe Company for purchase of its own shares by employee or by trustee. As on March 312019 none of the Directors of the Company hold instruments convertible into equity sharesof the Company.
During the year there was no change in the Share Capital of the Company.
As on March 312019 the issued subscribed and paid up share capital of your Companystood at र 130955070/- comprising 13095507 Equity shares of र10/- each.
Directors and Key Managerial Personnel
The Company is well supported by the knowledge and experience of its Directors and KeyManagerial Personnel. Pursuant to provisions of the Companies Act 2013 Mr. GautamKhandelwal Director of the Company is liable to retire by rotation and being eligiblehas offered himself for re-appointment.
Mr. Girish Bakre ceased to be a director with effect from August 15 2018 due to hissad demise. The Company conveys its deep sorrow and condolences to his family. The Companyalso expresses its deepest gratitude for the enormous contribution to the Company by Mr.Girish Bakre during his tenure as an Independent Director of the Company. Mr. AjitParundekar has resigned as a non-executive Director of the Company due to hispre-occupation with effect from closure of business hours on October 18 2018. The Companyappreciates the valuable Service & Support rendered by him to the Company during histenure as a Director of the Company.
The Nomination and Remuneration Committee on the basis of performance evaluation ofIndependent Director and taking into account the external business environment thebusiness knowledge experience and the contribution made by Mr. Nimis Sheth during histenure has recommended to the Board to re-appoint Mr. Nimis Sheth as an IndependentDirector of the Company for the second term. The board recommends his re-appointment as aNon-Executive Independent Director of the Company.
All the Directors of the Company have confirmed that they are not disqualified frombeing appointed as Directors in terms of Section 164 of the Companies Act 2013 and notdebarred or disqualified by the SEBI / Ministry of Corporate Affairs or any such statutoryauthority from being appointed or continuing as Director of the Company or any otherCompany where such Director holds such position in terms of Regulation (10)(i) of Part Cof Schedule V of Listing Regulations.
The Company has following persons as Key Managerial personnel (KMP):
|Sr. No. ||Name of the person ||Designation ||Date of Appointment as KMP |
|1. ||Mr. Gautam Khandelwal ||Executive Chairman ||15.09.2014 |
|2. ||Mr. Santosh Khandelwal ||Chief Financial Officer ||30.09.2014 |
|3. ||Ms. Nidhi Salampuria ||Company Secretary ||30.09.2014 |
Details of Board meetings
During the year the Board of Directors met 6 times details of which are provided inthe Corporate Governance report. Committees of the Board
The details of the various committees of the board and their composition as on March31 2019 are as under:
|Name of Director(s) ||Audit Committee ||Stakeholder Relationship Committee ||Nomination & Remuneration Committee |
|Mr. Nimis Savailal Seth ||Chairman ||Chairman ||Chairman |
|Mr. Gautam P Khandelwal ||Member ||Member ||Member |
|Mr. Virat Mehta ||Member ||Member ||Member |
Declaration by Independent Directors (IDs)
Mr. Nimis Sheth and Mr. Virat Mehta are Independent Directors of the Company. TheCompany has received declaration from them confirming that they meet the criteria ofindependence as prescribed under Section 149 (6) of the Companies Act 2013.
During the year the Independent Director meeting was held on November 14 2019 asrequired by regulation 25 of SEBI (LODR) Regulations 2015
Nomination and Remuneration Policy
The policy of the Company on directors' appointment and remuneration includingcriteria for determining qualifications positive attributes and independence of adirector and other matters provided under sub-section (3) of Section 178 of the CompaniesAct 2013 is adopted by the Board and may be accessed on the Company's website at thelink: http:// www.nagpurpowerind.com/investors/corporate-governance/. We affirm that theremuneration paid to the directors is as per the terms laid out in the nomination andremuneration policy of the Company.
Pursuant to the provisions of the Companies Act 2013 and the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 a structured questionnaire was prepared asper the requirement of the act which included various aspects of Boards and Committeesfunctioning Composition of the Board and its Committees functioning of the Individualdirectors. The aspects covered in the evaluation included the contribution to andmonitoring of corporate governance practices and the fulfillment of Directors' obligationsand fiduciary responsibilities including but not limited to active participation at theBoard and Committee meetings.
Further the Independent Directors at their meeting reviewed the performance of BoardChairman of the Board and of Non - Executive Directors.
The Board expressed their satisfaction with the evaluation process.
Significant and Material Orders Passed by the Regulators or Courts or Tribunals
There are no significant and material orders passed by the Regulators or Courts orTribunals which may impact the going concern status and Company's operations.
Internal Financial Controls
The details in respect of internal financial control and their advocacy are included inthe management discussion and analysis which forms part of this Annual Report
During the year your Company has not accepted any deposits under the provisions ofChapter V of the Companies Act 2013 and the rules made there under.
Subsidiary/Joint Ventures/Associate Companies:
The Company does not have Joint Ventures/Associate Companies. The Company has OneSubsidiary Company "The Motwane Manufacturing Company Private Limited".
Loans Guarantees or Investments
Details of Loans Guarantees and Investments covered under Section 186 of the CompaniesAct 2013 form part of the notes to the financial statements provided in this AnnualReport.
Management Discussion and Analysis Report
Management Discussion and Analysis
a) Economy review:
The long-term growth perspective of the Indian economy is changing due to continuedinvestments in infra in Transmission and Distribution railways and metro's lighting anddigital initiatives. Stable policies and good initiatives like smart cities. Your Company(through its Subsidiary) is in the business of manufacturing electrical equipment asignificant portion of which is supplied to the power sector which has continued to beaffected by the political & economic situation. We hope to see a gradual recovery.
b) Business and Industrial review and future outlook:
The Company mainly operated on Metal Recovery Plant and produces Low Ferro Manganese(Slag) through its slag recovery process. However the re-useable waste of fine particlesremaining in the manganese slag which was dumped at various places at the factory site isdepleting and it is uncertain how much slag is left. The technical consultants are also ofthe same view.
The management of the Company has foreseen this & thus entered another segment ofbusiness couple of years earlier via a majority stake in "The Motwane ManufacturingCompany Private Limited" now a subsidiary company and is looking to develop itsbusiness in electrical sector. The company is also looking at other business opportunitiesincluding monetizing its assets and redeployment of the same in better businessopportunities.
c) Risks Concerns & Threats:
Depletion of slag dumps posed a major problem for the Company. In order to counterthis the Company entered into another business through its subsidiary company "TheMotwane Manufacturing Company Private Limited" and is looking to develop it. TheManagement of the Company meets frequently to take the stock of all the impending andimmediate threats to the business and takes necessary steps for positioning of the Companyto meet the same in time. Any major threats affecting the Company in general and businessenvironment indirectly affecting the functioning of the Company are discussed with theBoard from time to time.
d) Internal Control Systems:
The Company has adequate internal control systems in place with reference to thefinancial statements. The Audit Committee of the Board periodically reviews the internalcontrol systems with the management Internal Auditors and Statutory Auditors and theadequacy of internal audit function significant internal audit findings and follow-upsthereon.
e) Financial Performance / Overview of Operations:
During the year under review the revenue from operation of the Company increased toर 46.69 Lakhs from र 15.48 Lakhs in the previous year.
Subsidiary Company and Consolidated Statements
Your Company has one subsidiary i.e 'The Motwane Manufacturing Company Private Limited'(MMCPL). During the financial year 2018-19 total revenue of the MMCPL has increased toर 40.69 crores from र 29.81 crores in the previous financial year and the net profitof the Company has increased to र 89.10 Lakhs from र 6.66 Lakhs in the previousfinancial year.
The Consolidated Financial Statement of your Company for the financial year 2018-19are prepared in compliance with applicable provisions of the Companies Act 2013Accounting Standard and SEBI(Listing Obligations and Disclosure Requirements) Regulations2015. The Consolidated Financial Statements have been prepared on the basis of auditedfinancial statements of the Company its subsidiary as approved by their respective Boardof Directors.
Pursuant to sub-section (3) of section 129 of the Act the statement containing thesalient features of the financial statement of Company's subsidiary is given as AOC -1.Brief particulars about the business of the Subsidiary are given hereunder.
MMCPL is an R & D based company and has developed various high technology test andMeasurement products which have applicability in the domestic and international markets.The company's products are sold primarily to the power sector and energy intensiveindustries. The company expects gradual pick up in its order book due to growth and reformin the distribution sector in which the company operates. Alternatively it is exploringits potential in the IOT space in adjacent areas like smart lighting and other IOT relatedindustrial solutions.
f) Material developments in human resources / industrial relations including number ofpeople employed
The human resource plays a vital role in the growth and success of an organization. TheCompany has maintained cordial and harmonious relations with employees.
During the year under review various training and development workshops were conductedto improve the competency level of employee with an objective to improve the operationalperformance of individuals. The Company has built a competent team to handle challengingassignments and projects.
The Company has 19 permanent employees as on March 31 2019.
g) Details of Significant Changes
|Ratios ||2019 ||2018 |
|Debtors turnover ratio ||- ||- |
|Interest coverage ratio ||(65.10) ||(15.86) |
|Current ratio ||53.35 ||57.80 |
|Debt equity ratio ||0.004 ||0.003 |
|Operating margin ratio ||(1.79) ||(183) |
|Net profit margin % ||(182)% ||(246)% |
|Return on Networth % ||(1.18)% ||(0.53)% |
|PE ratio ||(0.65) ||(0.29) |
|Return on Net worth % ||(57.31) ||(124.14) |
Reason for significant change:
The interest coverage ratio has come down to (65.10) due to loss incurred by thecompany during the year. However the management is of the view that the losses are due toInd AS effect wherein the notional losses of current investments have been factored in andthe Company has adequate cash flow to service the interest.
The debt has increased marginally and the company has a comfortable debt equityratio of 0.004.
The net loss margin has decreased due to increase in sales as compared to lastyear. However the management's contention is that it is due Ind AS effect wherein thenotional losses of current investments have been factored in.
The negative earnings per share have increased from (0.29) to (0.65) per sharei.e. there is an increase of 124% due to the increased losses by the Company in thecurrent year. The negative EPS is mainly on account of notional losses of currentinvestments as per Ind AS and as such is of transitional nature.
h) Details of any change in Return on Net Worth as compared to the immediately previousfinancial year
Due to increase in loss for the current year the return on net worth i.e. the return onshareholders' equity has gone down by 124%. The management has reiterated that since thenet losses are mainly due to the Ind AS affect the negative EPS is of transitional nature.
The Company is aware of the risks associated with the business. The Senior Managementsregularly analyses and takes corrective actions for managing / mitigating the same. Interms of the requirement of the Act the Company has authorized Senior Management tomanage monitor and report on the principal risks and uncertainties that can impact theability to achieve the Company's strategic objectives. The Senior Management periodicallyinforms the board on various issues along with its recommendations and comments forBoard's review and necessary action.
Statutory Auditors their Report and Notes to Financial Statements
M/s. Parekh Sharma and Associates Chartered Accountants (Firm Registration No.129301W) were appointed as the Statutory Auditors of the Company as per the provisions ofSection 139 of the Companies Act 2013 to hold office from the conclusion of the 21stAnnual General Meeting (AGM) held on September 28 2017 until the conclusion of the Fifthconsecutive AGM of the Company to be held in the year 2022 (subject to ratification oftheir appointment by the Members at every AGM held after the AGM held on September 282017).
In accordance with the Companies Amendment Act 2017 enforced on May 07 2018 by theMinistry of Corporate Affair the appointment of Statutory Auditors is not required to beratified at every Annual General Meeting. Therefore it is not proposed to ratify theappointment of auditors at the ensuing Annual General Meeting.
The Notes on financial statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation or adverse remark.
Details In Respect of Frauds Reported By Auditors:
During the year under review the Statutory Auditors has not reported any instances offrauds committed against the Company by its Officer(s) or Employee(s) to the Board undersection 143(12) of the Companies Act 2013.
In terms of Section 204 of the Act and Rules made there under M/s. DSM &Associates Practicing Company Secretary (COP No. : 9394) have been appointed SecretarialAuditors of the Company. The secretarial audit report does not contain any adverse remarksor disclaimers it is enclosed as Annexure I to this report. The report is self-explanatoryand do not call for any further comments.
The Company is in compliance with the applicable secretarial standards.
In terms of Section 138 of the Companies Act 2013 and the rules made there under M/sM. V. Ghelani & Co. Chartered Accountants (ICAI Registration No. 119077W) areInternal Auditors of the Company. The audit Committee of the Board of Directors inconsultation with the Internal Auditors formulate the scope functioning periodicity andmethodology for conducting the internal audit.
Related Party Transactions
There have been no materially significant related party transactions between theCompany and the Directors the management the key managerial personnel the subsidiariesor the relatives except for those disclosed in the financial statements.
Accordingly particulars of contracts or arrangements with related parties referred toin Section 188(1) along with the justification for entering into such contract orarrangement in Form AOC-2 does not form part of the report.
The policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website and can be accessed at the Web link:http://www.nagpurpowerind.com/investors/corporate-governance/
Extract of the Annual Return
Pursuant to the provisions of section 92(3) of Companies Act 2013 the extract of theannual return in Form No. MGT- 9 is enclosed with the report as Annexure II.
Disclosures pursuant to The Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014
A) Details of the ratio of the remuneration of each director to the median employee'sremuneration and other details as required pursuant to Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014:
|Sr. No. ||Name of Director/ KMP and Designation ||Remuneration of Director/KMP for Financial Year 2018-19 (र in Lacs) ||% increase in Remuneration in the Financial Year 2018-19 ||Ratio of remuneration of each Director/ to median remuneration of employees ||Comparison of the Remuneration of the KMP against the performance of the Company |
|1. ||Mr. Nimis Sheth Independent Director ||NIL ||N.A. ||N.A. ||N.A. |
|2. ||Mr. Virat Mehta Independent Director ||6.10 (Sitting Fees) ||N.A. ||N.A. ||N.A. |
|3. ||Mr. Ajit Parundekar Non-Executive Director ||2.05 (Sitting Fees) ||N.A. ||N.A. ||N.A. |
|4. ||Mr. Girish Bakre Independent Director ||NIL ||N.A. ||N.A. || |
|5. ||Ms. Nidhi Salampuria Non-Executive Director ||NIL ||N.A. ||N.A. |
|6. ||Mr. Gautam Khandelwal Executive Chairman ||12.00 ||NIL ||8.92:1 || |
Company has made a Loss of र 85.01 Lakhs for F.Y. 18-19 VS Loss of 38.15 Lakhs (Previous Year)
|7. ||Mr. Santosh Khandelwal Chief Financial Officer ||12.77 ||19.88% ||N.A. |
|8. ||Ms. Nidhi Salampuria Company Secretary & Compliance Officer ||25.00 ||26.26% ||N.A. |
* Mr. Ajit Parundekar and Mr. Girish Bakre were only for part of the year thus saidinformation is not comparable.
i) The Ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year 2018-19: As per table given above
ii) The percentage increase in remuneration of each Director Chief Financial Officerand Company Secretary during the financial year 2018-19 and: As per table given above.
iii) The percentage increase in the median remuneration of employees in the financialyear 2018-19: 35.87%
iv) There were 19 confirmed employees on the rolls of the Company as on March 31 2019.
v) Average percentage increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentageincrease in the managerial remuneration and justification thereof and point out of thereare any exceptional circumstances for increase in the managerial remuneration: As pertable given above
vi) Affirmation that the remuneration is as per remuneration policy of the Company- Yes
B) Particulars of employee's remuneration as required under section 197(12) of theCompanies Act 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Amendment Rules 2016:
During the year under consideration none of the employees of the Company were inreceipt of remuneration in excess of limits prescribed section 197(12) of the CompaniesAct 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Amendment Rules 2016 hence particulars as required under section197(12) of the Companies Act 2013 read with Rule 5(2) and 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Amendment Rules 2016 are notgiven.
Conservation of Energy Technology Absorption Foreign Exchange Earning and Outgo
The information pertaining to conservation of energy technology absorption foreignexchange earnings and outgo as required under section 134(3)(m) of the Companies Act 2013read with Rule 8(3) of the Companies (Accounts) Rules 2014 are given below:
(A) Conservation of Energy:
Your Company continues to take appropriate measures to reduce its energy consumption ona regular basis.
(B) Technology Absorption:
a. Research and Development (R & D):
The Company has not undertaken any R&D activity in the current year.
b. Technology Absorption Adaptation and Innovation:
The Company has not imported any technology during the year.
(C) Foreign Exchange earnings and outgo:
During the year the foreign Exchange outgo was र 2.57 lakhs (Previous year - र0.85 lakhs). The foreign exchange Earning was Nil (Previous year - Nil).
Corporate Social Responsibility (CSR)
Since the CSR norms are not applicable to the Company hence the disclosures as perRule 9 of Companies (Corporate Social Responsibility Policy) Rules 2014 is not requiredto be made.
Maintenance of cost records as specified under Section 148(1) of the Act is notapplicable to your Company.
Vigil Mechanism and Whistle Blower Policy
The Company has adopted a Vigil Mechanism and Whistle Blower Policy to report genuineconcerns about any unethical behavior actual or suspected fraud or violations of theCompany's code of conduct. The provisions of this policy are in line with the provisionsof Section 177 (9) of the Act. The policy can be accessed on the Company's website atfollowing link http://www.nagpurpowerind.com/investors/corporate-governance/
Disclosure under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy.
The following is a summary of Sexual Harassment Complaints received and disposed offduring the year 2018-2019.
|No. of Complaint received ||No. of Complaints disposed off ||No. of Complaints pending |
|Nil ||N.A. ||N.A. |
There were no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year of the Company to whichthis report relates and the date of the report except as otherwise mentioned in thisdirector report if any.
There had been no changes in the nature of Company's business. To the best ofinformation and assessment there has been no material changes occurred during thefinancial year generally in the classes of business in which the Company has an interestexcept as otherwise mentioned in this director report if any.
Directors' Responsibility Statement
Pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act 2013 (the Act) theBoard of Directors to the best of their knowledge and ability confirm that:
i) in the preparation of the Annual Accounts the applicable accounting standards havebeen followed and that there are no material departures;
ii) they have 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 loss ofthe Company for that year;
iii) they have taken proper and sufficient care to the best of their knowledge andability for the maintenance of adequate accounting records in accordance with theprovisions of the Act for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;
iv) the annual accounts have been prepared on a going concern basis;
v) they have laid down internal financial controls to be followed by the Company andsuch internal financial controls are adequate and operating effectively; and
vi) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
The Company adheres to the requirements set out by the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 Corporate Governance practices and haveimplemented all the stipulations prescribed. The Company has implemented several bestcorporate governance practices.
The Corporate Governance which form an integral part of this Report are set out asAnnexure III together with the Certificate from the Auditors of the Company regardingcompliance with the requirements of Corporate Governance as stipulated in SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
Your Board of Directors wishes to place on record their appreciation for thewhole-hearted co-operation received by the Company from the Shareholders variousGovernment departments Business Associates Company's Bankers and all the employeesduring the year.
| ||For and on behalf of the Board |
|Place: Mumbai ||Gautam Khandelwal |
|Date: July 30 2019 ||Chairman |
| ||DIN (00270717) |