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S E Power Ltd.

BSE: 534598 Sector: Others
NSE: SEPOWER ISIN Code: INE735M01018
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VOLUME 777
52-Week high 4.25
52-Week low 1.26
P/E
Mkt Cap.(Rs cr) 10
Buy Price 2.44
Buy Qty 193.00
Sell Price 2.64
Sell Qty 290.00

S E Power Ltd. (SEPOWER) - Director Report

Company director report

Dear Members

The Directors are pleased to present 9 th Board's Report of the Company along with the Audited Financial Statements of the Company for the financial year ended 31st March 2019.

Financial Results

The financial results of the Company for the year 2018-19 is summarized in the following table as compared to that of previous year:

(Figures In Lacs)
Particulars

Year Ended on 31st March 2019

Year Ended on 31st March 2018

Revenue from Operations1828.951565.63
Other Income36.1710.69
Total Revenue1865.121576.33
Less: Expenditure2049.031592.82
Profit/Loss before Financial Cost Depreciation and Tax(183.90)(16.49)
Less: Financial Cost250.00255.78
Less: Depreciation and amortization443.17438.29
Profit/Loss before Tax (PBT)(877.07)(710.56)
Less: Tax Expenses(193.90)(193.07)
Profit/Loss after Tax(PAT)(683.17)(517.50)
Balance carried to Balance Sheet(2344.25)(1661.09)

Summary of Performance

During the year 2018-19 the Company has reported growth of 16.82 % in revenue from operations as compared to the previous financial year 2017-18. During the financial year the total revenue of the Company stood at Rs. 1828.95 Lacs. However due to challenging business environment for reclaim rubber industry and increase in cost of operations the Company has suffered Loss of Rs.683.17 Lacs during financial year 2018-19.

The Company could not benefit from the raw material price reduction during the year under review due to market pressure and selling prices of the major products were reduced twice during the year. The Company is taking steps to consolidate its operations with a view to reduce operating costs and to bring in higher efficiencies to improve the bottom line.

The current year continues to be sluggish in terms of sales value and volume. Management of the Company believes that business environment will change and the Company will come with better and positive results in upcoming years.

Dividend

In the financial year under review Company has not earned Profit therefore the Board of Directors regret their inability to recommend any dividend for the current year.

Fixed Deposits

Company has not accepted any public deposits within the meaning of Section 73 of Companies Act 2013 read with the Companies (Acceptance of Deposit) Rules 2014 and as such no amount of principal or interest on public deposits was outstanding as on the date of balance sheet.

Board of Directors and Key Managerial Personnel

In terms of Section 152 of Companies Act 2013 Dr. Arun Gopal Agarwal is liable to retire by rotation at the ensuing Annual General Meeting and being eligible for re-appointment offers himself for re-appointment.

The Board of the Company recommends re-appointment of Dr. Arun Gopal Agarwal as a Director of the Company liable to retire by rotation.

Mr. Sachin Agarwal and Mr. Sanjeet Kumar Gourishankar Rath have been appointed as Managing Director and Executive Director of the Company respectively for a term of 5 years by the members of the Company in the Annual General Meeting held on 28th June 2018.

On 12th October 2018 Mr. Rutvij Ramchandra Khangiwale ceased to be the Chief Financial Officer (CFO) of the Company due to his resignation from the post. Further CA Shivang Kaushik kumar Dave who was appointed as Chief Financial Officer (CFO) has also resigned from the post of CFO w. e. f. 15 th April 2019.

Pursuant to SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations 2018 which says a person could not continue with the directorship in any of the listed company as a non-executive director who has attained the age of seventy five years. Mr. Dharam Vir Gupta Independent Director of the Company has tendered his resignation letter and ceased to be the Director of the Company w.e.f 11 th April 2019.

In terms of Section 149 (10) an Independent Director shall hold Office for a term upto five consecutive years on the Board of the Company but shall be eligible for re-appointment for second term of five consecutive years on passing of a Special Resolution by the Shareholders of Company accordingly as recommended by the Nomination and Remuneration Committee of the Company it is recommended by the Board to the Shareholders of the Company for re-appointment of Mrs. Anshu Gupta as an Independent Director whose first term is completing on August 13 2019 for second consecutive term of 5 years.

Pursuant to the provisions of Section 149 of the Companies Act the independent directors have submitted declarations that each of them meet the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015. There has been no change in the circumstances affecting their status as independent directors of the Company.

During the year under review the non-executive directors of the Company had no pecuniary relationship or transactions with the Company other than sitting fees commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/Committee of the Company.

None of the Directors of the Company is disqualified under Section 164 of the Companies Act 2013.

Details of Directors seeking appointment/re-appointment at the forthcoming Annual General Meeting as required under clause 36 of SEBI (LODR) Regulations 2015 is enclosed with the notice of Annual General Meeting.

Compliance with the Code of Conduct of Board of Directors and Senior Management

The Board of Directors and Senior Management of the Company have complied with the Company's Code of Conduct applicable to Board of Directors and Senior Management. In this regard Declaration signed by the Managing Director is annexed and forms part of this Report.

Criteria for Board Membership of the Company

For the appointment of Directors the Company take into account following points:

Director must have relevant experience in Finance/ Law/ Management/ Sales/ Marketing/Administration/ Research/ Corporate Governance/ Technical Operations or the other disciplines related to Company's business.

 Director should possess the highest personal and professional ethics integrity and values.

 Director must be willing to devote sufficient time and energy in carrying out their duties and responsibilities.

 Director must be fit and proper person.

Audit Committee

Audit committee is in existence in accordance with the provisions of Section 177 of the Companies Act 2013. Kindly refer to the Section on Corporate Governance under the head 'Audit committee' for matters relating to the composition meetings and functions of the committee. The Board has accepted the Audit committee recommendations during the year whenever required and hence no disclosure is required under Section 177(8) of the Companies Act 2013 with respect to rejection of any recommendations of Audit committee by board.

Directors' Responsibility Statement

Pursuant to the requirement of Section 134(3)(c) read with Section 134(5) of the Companies Act2013 (the Act) your Directors confirm that:

a) in the preparation of the Financial Statements for the financial year 2018-19 the applicable (IND AS) accounting standards had been followed and there are no material departure from the same;

b) the Directors has selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors had prepared the Financial Statements on a going concern basis;

e) the Directors had laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and were operating effectively; and

f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Familiarization Programme for Independent Directors

Every new Independent Director of the Board attends an orientation program which is to familiarize the new Non-Executive Director with the strategy operations and functions of the Company. The Executive Directors / Senior Managerial Personnel conduct meetings with the Non-Executive Directors to make them understand the Company's strategy operations product and organization structure human resources facilities and risk management. Through meetings and interaction among Managements and Non- Executive Directors and Independent Directors Company has made its best effort to ensure that the Non- Executive Directors understand their roles rights responsibilities in the Company.

Further at the time of appointment of an Independent Director the Company issues a formal letter of appointment outlining his/her role function duties and responsibilities as an Independent Director. The format of the letter of appointment is available on Company's website.

Company's Policy on Directors' Appointment and Remuneration

Company has constituted Nomination and Remuneration Committee as required under Section 178 of the Companies Act 2013 and Regulation 19 of SEBI (LODR) Regulations 2015 which inter-alia has recommended and formulated a Remuneration Policy (the policy).

The Policy is framed in accordance with the provisions of Companies Act 2013 and listing Regulations. In case of any subsequent changes in the provisions of Companies Act 2013 and Listing Regulations which makes any of the provisions of the policy inconsistent with the Act or regulations the provisions of the Act or regulation shall prevail over the policy.

The objective of the policy is to provide criteria for appointment of Directors viz. experience qualification positive attributes understanding of the Company's business and social perspective personal achievements and Board diversity. The Policy also contained the provisions to ensure that Executive Directors KMP and other employees are sufficiently compensated for their performance. Under the Policy Nomination and Remuneration Committee is entrusted with the responsibility to evaluate the various aspects relating to recommend the appointment and remuneration of the Directors of the Company.

In dependent Non-Executive Directors are appointed for their professional expertise in their individual capacity as Independent professionals. Independent Non-Executive Directors shall be entitled for sitting fees reimbursement of expenses paid for attending the meeting of the Board and Board Committees and commission as approved by the Board or/and shareholders.

The remuneration of employees largely consists of basic salary perquisites allowances and performance incentives. Perquisites and other benefits are paid according to the Company policy subject to prescribed statutory ceiling. The components of the total remuneration vary for different grades and are governed by the industry pattern qualification & experience /merits performance of each employee.

The Policy is framed in accordance with the provisions of Companies Act 2013 and listing Regulations. In case of any subsequent changes in the provisions of Companies Act 2013 and Listing Regulations which makes any of the provisions of the policy inconsistent with the Act or regulations the provisions of the Act or regulation shall prevail over the policy.

The objective of the policy is to provide criteria for appointment of Directors viz. experience qualification positive attributes understanding of the Company's business and social perspective personal achievements and Board diversity. The Policy also contained the provisions to ensure that Executive Directors KMP and other employees are sufficiently compensated for their performance. Under the Policy Nomination and Remuneration Committee is entrusted with the responsibility to evaluate the various aspects relating to recommend the appointment and remuneration of the Directors of the Company.

In dependent Non-Executive Directors are appointed for their professional expertise in their individual capacity as in dependent professionals. Independent Non-Executive Directors shall be entitled for sitting fees reimbursement of expenses paid for attending the meeting of the Board and Board Committees and commission as approved by the Board or/and shareholders.

The remuneration of employees largely consists of basic salary perquisites allowances and performance incentives. Perquisites and other benefits are paid according to the Company policy subject to prescribed statutory ceiling. The components of the total remuneration vary for different grades and are governed by the industry pattern qualification & experience /merits performance of each employee.

Board Evaluation

The Board of Directors has carried out an annual evaluation of its own performance board committees and individual directors pursuant to the provisions of the Act and SEBI Listing Regulations. The performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of criteria such as the board composition and structure effectiveness of board processes information and functioning etc.

The performance of the committees was evaluated by the Board after seeking inputs from the committee members on the basis of criteria such as the composition of committees effectiveness of committee meetings etc. The above criteria are based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5 2017. In a separate meeting of independent directors performance of Non-Independent Directors the Board as a whole and the Chairman of the Company was evaluated taking into account the views of Executive Directors and Non-Executive Directors. The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the is sues to be discussed meaningful and constructive contribution and inputs in meetings etc.

In the Board meeting that followed the meeting of the independent directors and meeting of Nomination and Remuneration Committee the performance of the Board its committees and individual directors was also discussed. Performance evaluation of independent directors was done by the entire board excluding the independent director being evaluated.

Meetings of the Board of Directors

During the financial year under review Five (5) meetings of the Board of Directors were duly convened details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act 2013.

Statutory Auditor and Audit Report

At the 6th AGM of the Company the Members approved appointment of M/s R. Lal & And Company Chartered Accountants (Firm Registration No. 000926C) as Statutory Auditors of the Company to hold Office for a period of five years from the conclusion of that AGM till the conclusion of the 11 th AGM subject to ratification of their appointment by Members at every AGM if so required under the Act. The requirement to place the matter relating to appointment of auditors for ratification by Members at every AGM has been done away by the Companies (Amendment) Act 2017 with effect from May 7 2018. Further n i the 8th AGM the appointment of of M/s R. Lal & And Company Chartered Accountants (Firm Registration No. 000926C) as Statutory Auditors of the Company have been con firmed for rest of the tenure. Accordingly no resolution is being proposed for ratification of appointment of statutory auditors at the ensuing AGM and a note in respect of same has been included in the Notice for this AGM.

The observations of Statutory Auditor and Secretarial Auditor in their reports read with notes thereto are self-explanatory and do not call for any further explanation. The Auditors of the Company have not given any adverse remark or disclaimer in their reports.

Secretarial Auditor and Secretarial Audit Report

In accordance with the provisions of Section 204 of the Companies Act 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and as a measure of good Corporate Governance practice Board of Directors in their Meeting held on 8 th February 2019 has appointed M/s. Satish Jadon& Associates Practicing Company Secretary as its Secretarial Auditor to conduct secretarial audit of the Company for financial year ended 31st March 2019 and to submit Secretarial Audit Report in Form No. MR-3.

A copy of the Secretarial Audit Report received from M/s. Satish Jadon & Associates in the prescribed Form No. MR-3 is annexed to this Board's Report and marked as Annexure A.

The Report of Secretarial Auditor is self-explanatory and no explanation is required thereon from the Board of Directors of the Company.

The report of the Statutory Auditors and Secretarial Auditors are enclosed to this report.

Fraud reported by auditors under Section 143(12) other than those which are reported to the Central Government

Pursuant to provisions of Section 143(12) of the Companies Act 2013 the Auditors of the Company have not reported about any fraud which is being or has been committed in the Company by its Officers or employees.

Internal Financial Controls

Internal Financial Control System is an integral component of the Risk Management System of the Company. The internal financial control policies and internal audit program adopted by the Company plays an important role in safeguarding the Company's assets prevention and detection of frauds and errors the accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures.

The Board has adopted procedures for ensuring the orderly and efficient conduct of its business including risk management feedback loop in which the information generated in the internal control process is reported back to Board and Management.

A firm of Competent Chartered Accountants has been engaged by the Company for conducting internal audit to examine and evaluate the adequacy and effectiveness of internal financial control system of the Company. The Audit Committee of Board of Directors Statutory Auditors and the Business Heads are periodically apprised of the internal audit findings and corrective actions taken.

The Audit Committee of Board of Directors actively reviews the adequacy and effectiveness of internal financial control system and suggests improvements for strengthening them. Internal Financial Control System of the Company are adequate with the respect to the operations of the Company.

Subsidiary Company

The Company owned hundred percent shares of M/s Shubham Electrochem Limited (Wholly Owned Subsidiary Company). At the year ended 31st March 2019 the turnover of M/s Shubham Electrochem Limited stood at Rs. 10.45 Lacs. During the reporting period Subsidiary Company reported Profit after tax of Rs. 1.05 Lacs.

Particulars of Contracts or Arrangements with Related Parties

During the year under review there were no materially significant related party transactions which could have had a potential conflict with the interests of the Company Transactions with related parties are in the ordinary course of business on arm's length basis and do not attract the provisions of Section 188(1) of the Companies Act 2013. The related party transactions were periodically placed before the Audit Committee and/or Board for its approvals or review as and when required. The policy on Material Related Party Transactions is available on the Company's website.

Credit Rating

CARE BB and CARE A4 rating has been assigned by Credit Analysis & Research Ltd. (CARE Ratings) to the Company for Long Term Bank Facilities and Short Term Bank Facilities respectively.

Particulars of Employees

In accordance with the provisions of Section 197(12) of the Companies Act 2013 read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 information regarding employees is annexed as Annexure-A to this report.

Extracts of Annual Return

Pursuant to Section 92(3) of the Companies Act 2013 and Rule 12(1) of the Companies (Management and Administration) Rules 2014 Extracts of Annual Return in the prescribed form MGT-9 is annexed as an integral part of this report as Annexure-B.

Particulars of Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo

The particulars pursuant to Section 134(3)(m) of Companies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 to the extent applicable are as under:

(A) Conservation of energy-

i. Company has been continually working on energy conservation and has taken and implemented various measures towards this in production domestic lightning and cooling facilities. Company has installed significant numbers of powerless turbo ventilators in the entire working shed for ventilation using 'zero' power. Building have been designed for ingress of adequate natural light thus requiring no artificial lightning during the day time. Many provisions have been made in various machines for consuming energy during processing line losses has been maintained close to 'zero' by adequate design of cables and other systems.

ii. No step has been taken by the Company for utilization of alternate source of energy. However Company at its non-conventional energy division generate electricity by wind energy and transfer the same to power grids.

iii. Company has on proposals for power generation for captive consumption at its reclaim rubber plant through solar route.

(B) Technology absorption-

I. The efforts made towards technology absorptionI t 's a continual process and the drive for reaching and adapting new technology is always under progress.
I. The benefits derived like production improvement cost reduction product development or import substitution: Performance improvement is a continual process with respect to productivity delivery quantity cost and safety. Company is regularly following this and each department has set its own objective for performance improvement which is closely monitored and regulated. With continued improvement in technology our production rate has been improved.
III. In case imported technology (imported during last 3 years reckoned from the beginning of the : financial year)-
(a) The details of technology imported: Company is using imported machines in its reclaimed rubber division.
(b) The year of import-
(c) Whether technology been fully absorbed: Yes
(d) Research and developments: The company seeks regular technical support from experts in this field and undertake appropriate R&D activities depending upon future requirements.

(C) Foreign exchange earnings and Outgo-

The details of the foreign exchange exposure during the period under review are as under:

(A mount in Lacs)
Particulars

Current Year

Previous Year

Total Foreign Exchange Earnings--
Total Foreign Exchange Outgo (Import of material)89.00152.24
Total Foreign Exchange Outgo (Foreign Travel expense)2.612.17

Statement on Risk Management

The Board identifies and reviews the various elements of risk which the Company has to face and laid out the procedures and measures for mitigating those risks. The elements of risk threatening the Company's existence are minimal. The company does not face any risks other than those that are prevalent in the industry and is taking all possible steps to overcome such risks. The main concerns are volatility in raw material prices maintenance of machineries market pressure etc. Effective planning in raw material purchasing and the ability to pass on raw material price increases have minimised the risk relating to the volatility in raw material prices.

As a part of the overall risk management strategy all assets are appropriately insured .

Vigil Mechanism/ Whistle Blower Policy

Pursuant to the requirement of the Companies Act 2013 the Company has established vigil mechanism/ whistle blower policy. Section 177 of the Companies Act 2013 which inter-alia provides for a requirement to establish a mechanism for all the Directors and employees to report to the management instances of unethical behaviour actual or suspected fraud or violation of the Company's code of conduct or ethics policy.

Accordingly the Mechanism is established to provide adequate safeguards against victimization of persons who use such mechanisms. Whistle blower Policy is available on Company's website.

Prevention of Sexual Harassment at Workplace

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention prohibition and redressal of sexual harassment at workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 and rules made thereunder. The Directors of the Company state that during the year under review there was no case file d pursuant to Sexual Harassment of Woman at Workplace (Prevention Prohibition and Redressal) Act 2013.

Material Changes and Commitments

No material changes and commitments affecting the financial position of the Company has been occurred between the end of the financial year 2018-19 and till the date of this report.

Statutory Orders

No significant and material orders were passed by Courts Tribunals and other Regulatory Authorities affecting the going concern status of the Company's operations.

Management Discussion and Analysis Report

In terms of Regulation 34 of SEBI (LODR) Regulations 2015 Management Discussions and Analysis Report is appended to this Board's Report as Annexure-C.

Corporate Governance

The Company is committed to maintain the good standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The Company continues to benchmark its corporate governance policies in its true sense. The report on Corporate Governance as stipulated under the Listing Regulations forms an integral part of this report as Annexure-D. The requisite certificate from Secretarial Auditor Satish Jadon & Associates Company Secretaries confirming compliance with the conditions of corporate governance is annexed to the report on Corporate Governance.

Cautionary Statement

Statements in this report especially those relating to MD&A giving details of company's objectives projections estimates and expectations may be construed as forward looking statements within the realm of applicable laws and regulations. Actual results are liable to differ materially from those either expressed or implied.

Acknowledgements

We place on record our appreciation to employees at all level for their contribution dedication and commitment. The Board take this opportunity to thank all Investors Clients Vendors Banks Government and Regulatory Authorities for their support and look forward for their continued support in the future.

Place : New DelhiFor and on behalf of the Board of
Date :24 .05.2019S. E. Power Ltd.
Sd/-
(DR. ARUN GOPAL AGARWAL)
Chairman
DIN : 00374421