Your Board of Directors (`Board') have immense pleasure in presenting their Forty First (41st) Annual Report on the business and operations of S&S Power Switchgear Limited (`S&S POWER') or `the Company' together with the Audited Financial Statements for the year ended March 31 2019 (`the year under review').
In line with the requirements of the Companies Act 2013 (the Act) and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 (the SEBI Regulations) this report covers the Audited Financial results and other developments during the financial year from April 1 2018 to March 31 2019 in respect of S&S POWER and S&S POWER Consolidated Performance comprising of S&S Power its subsidiaries in India and overseas. The Consolidated entity has been referred to as `S&S Group' or `the Group' in this report.
1. FINANCIAL RESULTS - AN OVERVIEW
Your Company's financial performance for the year ended March 31 2019 is summarized hereunder:
(Rs. in Lakhs)
|PARTICULARS ||Year ended March 31 2019||Year ended March 31 2018||Year ended March 31 2019||Year ended March 31 2018|
|Net Revenue from Operations||10345||10341||51||70|
|Earnings before Depreciation Finance Costs and Taxation||(33)||801||210||9|
|Depreciation and Amortization Expenses||89||64||16||15|
|Profit/(Loss) Before Tax and OCI||(374)||463||81||(93)|
|Other Comprehensive Income||(268)||(5)||(5)||7|
|Profit /(Loss) Before Tax||(642)||459||76||(85)|
|Amount transferred to General Reserve||-||-||-||-|
|Profit/(Loss) After Tax||(634)||406||75||(97)|
The consolidated results have been significantly worsened compared to the previous year due to the significant factors which have influenced the outcome of the results:
|(Rs. In Lakhs)|
|Revenue from Operations||4967||2520|
|Revenue from Operations||5378||7821|
|Revenue from Operations||10345||10341|
*The sales for the FY 2017-18 does not include the sales of S&S PSE for 9 months for the period it remained an associate company and not a subsidiary.
Consequent to legislation change in the United Kingdom requiring pension schemes to be equalized between male and female members with guaranteed minimum pension (GMP) earned between 1990 to 1997 a reassessment of the pension liability resulted in an additional liability of Rs.234 lakhs reported under Other Comprehensive Income
Volume drop in the UK segment of around 30% impacting a profit drop of Rs.753 lakhs.
Additional provision of around Rs.93 lakhs in the current year for the normalization of pension deficits.
Negative mix in the project portfolio in the disconnector business segment in India
Excess installed capacity in one of the Indian subsidiaries engaged in manufacture of Control & Relay Panel (CRP)
2. BUSINESS OVERVIEW - RESULTS OF OPERATIONS
Your Company has registered consolidated revenue for the financial year ended March 31 2019 at Rs 10345 Lakhs as against Rs 10341 Lakhs for the year ended March 31 2018.
Figures relating to March 2019 are not comparable with March 2018 as line by line consolidation has not been done for one of its subsidiaries viz S&S Power Switchgear Equipment Limited for the previous period of nine months ended December 2017.However subsequent to acquisition of the business by the parent Company line by line consolidation has been carried out for the last quarter of the previous year ended 31st March 2018.
Year ended 31st March 2018 does not take into Account revenue from operations amounting to Rs. 2513 lakhs of the subsidiary for the period it remained an associate and not a subsidiary.
The Total consolidated Earnings / (Loss) before depreciation finance costs and taxation for the financial year ended March 31 2019 is Rs (33) Lakhs as against Rs 801 Lakhs for the year ended March 31 2018.
A Consolidated Loss for the year ended March 31 2019 is Rs 634 Lakhs as against profit of Rs 406 Lakhs for the year ended March 31 2018.
3. CHANGE IN THE NATURE OF BUSINESS IF ANY
There was no change in nature of business of the Company during the year.
4. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
There were no material changes and/or commitments between the end of the year under review and the date of this report which could have had an impact on the Company's operation in the future or its status as a going concern. There are no significant or material orders passed by the Regulators /Courts/ Tribunals during the year under review.
5. MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and analysis report which inter-alia covers the Company and its Group's financial and operational performance Industry trends Update on Macro Economic Indicators Risks and Concerns Internal control systems and their adequacy Outlook and other material changes prepared in compliance of Regulation 34 of the SEBI Regulations forms part of the annual report is annexed to this report.
6. SHARE CAPITAL
During the year under review there was no change in the Share capital structure and the paid-up capital of the Company as on March 31 2019 stood at Rs. 620 Lakhs. Further the Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
(a) Issue of equity shares with differential rights as to dividend voting or otherwise;
(b) Issue of Shares (including Sweat Equity Shares and ESOS) to employees of the Company under any scheme;
(c) Provision of money for purchase of its own shares by employees or by trustees for the benefit of employees.
7. SUBSIDIARIES / JOINT VENTURES/ASSOCIATES
(a) A list of companies which are subsidiaries/associate to your Company is provided Form AOC-1 as Annexure A;
(b) Your Company continues to have 3 Subsidiaries in India and 2 overseas Subsidiaries and during the previous year S&S Power Switchgear Equipment Ltd had become a wholly owned subsidiary after the Company acquired the 49% shareholding of M/s Coelme Costruzioni Elettromeccanihe S.p.A. There were no changes in the status of the subsidiaries during the year under review.
(c) A Statement containing salient features of financial statements of subsidiaries pursuant to Section 129 of the Act read with Rule 5 of the Companies (Accounts) Rules 2014 is annexed to this report in the prescribed Form AOC-1 as Annexure A.
Your Directors have not proposed to transfer any amount to reserves for the year under review.
Your Directors have not proposed any payment of dividend to the Shareholders for the year under review.
9. FINANCIAL STATEMENTS
The Standalone and Consolidated Financial Statements for the year ended 31st March 2019 have been prepared under IND AS (Indian Accounting Standards) by the Company. Comparative figures for the previous financial statements for the year ended 31st March 2018 are also stated in accordance with IND AS.
Further the Board the meeting held on 29th May 2019 approved the Audited Financial Statements for the year ended 31st March 2019. For details refer Notes to Accounts forming part of this Annual report.
In accordance with Section 136 of the Act the audited financial statements including the consolidated financial statements and related information of the Company and audited accounts of each subsidiary are also available on the Company's website: www.sspower.com.
During the year under review your Company has not accepted or renewed any deposits from public and there were no outstanding deposits within the purview of the provisions of Section 73 and 74 of the Act read with Companies (Acceptance of Deposits) Rules 2014.
11. BOARD OF DIRECTORS / KEY MANAGERIAL PERSONNEL:
There was no change in the constitution of Board of directors of the Company during the year under review.
All Independent Directors have submitted declarations that they meet the criteria of Independence as laid down under Section 149(6) of the Act and the SEBI Regulations.
Based on the written disclosures provided by the Board of Directors none of them are disqualified from being appointed as Directors under Section 164 of the Act.
During the year the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company other than the sitting fees commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Company.
The Board of Directors at their meeting held on 14th February 2019 appointed Ms. Nithya Kamaraj as Company Secretary & Compliance Officer of the Company in place of Mr. C. Abhilash who resigned from his Office on November 14 2018.
The Board of Directors at their meeting held on 29th May 2019 appointed Mrs. Selvi Narasimman as Chief Financial Officer of the Company in place of Mr. A. Mahesh who resigned from his Office on 31st May 2018.
RETIREMENT BY ROTATION
Pursuant to Article 26 of the Articles of Association of the Company and in accordance with the Act Mr. Ashish Sushil Jalan (DIN: 00031311) Non-Executive Director of the Company retires by rotation at the ensuing Annual General Meeting and is eligible for re-appointment. Board recommends his re-appointment as a Director for approval of members.
The details of Director being recommended for re-appointment as required under the Act and the SEBI Regulations are contained in the accompanying Notice convening the Annual General Meeting of the Company.
During the year 5 (Five) meetings of the Board of Directors were convened and held. The details of the meetings are furnished in the Corporate Governance Report. Furthermore the intervening gap between the Meetings was within the period prescribed under Section 173(1) of the Act.
EVALUATION OF BOARD COMMITTEES OF DIRECTORS
Pursuant to provisions of the Act and the SEBI Regulations the Board has carried out an annual evaluation of its own performance the Directors individually as well as the performance of Board committees and of the Independent Directors (without participation of the relevant Director).
Further Independent Directors at their meeting without the participation of the Non-Independent Directors and Management considered/ evaluated the Board's performance (as a whole) Performance of the Chairman and other Non-Independent Directors.
Independent Directors at a separate meeting evaluated performance of the Non-Independent Directors Board as a whole and of the Chairman of the Board.
The criteria for performance evaluation have been detailed in the Corporate Governance Report.
KEY MANAGERIAL PERSONNEL
The following persons have been designated as Key Managerial Personnel of the Company pursuant to Section 2(51) and Section 203 of the Act read with the Rules framed thereunder:
Mr.Ashok Kumar Vishwakarma Managing Director ;
Ms.Nithya Kamaraj Company Secretary & Compliance Officer;
Mrs.Selvi Narasimman Chief Financial Officer (CFO)
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has set up Vigil Mechanism viz. Whistle Blower Policy to enable the employees and Directors to report genuine concerns unethical behaviour and irregularities if any in the Company noticed by them which could adversely affect company's operations to the Chairman of the Audit Committee. The policy is available at the Company's website (www.sspower.com)
No concerns or irregularities have been reported during the period. The Company hereby affirms that no Director/employee has been denied an access to the Chairman of the Audit Committee and that no complaints were received during the year.
RISK MANAGEMENT POLICY
The Company has already in place an integrated risk management approach through which it reviews and assesses significant risks on a regular basis to ensure that a robust system of risk controls and mitigation is in place. Through risk management approach the Company ensures that risk to the continued existence as a going concern and to its development are identified and addressed on a timely basis.
At present the company has not identified any element of risk which may threaten the existence of the company.
POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS
The Board has on the recommendation of the Nomination & Remuneration Committee formulated criteria for determining Qualifications Positive Attributes and Independence of Directors Key Managerial Personnel and senior management. The details of criteria laid down and the Remuneration Policy are given in the Corporate Governance Report.
POLICY ON SEXUAL HARASSMENT
The Company has in place policy of prevention prohibition and Redressal of Sexual Harassment for women at the Workplace in accordance with the requirements of the Sexual Harassment of Women at workplace (Prevention Prohibition and Redressal) Act 2013. It ensures prevention and deterrence of acts of sexual harassment and communicates procedures for their resolution and settlement. All women employees are covered under this policy. There were no cases/ complaints reported in this regard during the year under review.
13. DIRECTORS' RESPONSIBILITY STATEMENT:
In compliance with Section 134(5) of the Act your directors on the basis of information made available to them confirm the following:
(a) that in the preparation of the annual accounts the applicable accounting standards have been followed along with proper explanation relating to material departures;
(b) that the directors have 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 as at March 31 2019 and of the PROFIT of the Company for that period;
(c) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) that the directors have prepared the annual accounts on a going concern basis;
(e) that the directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively;
(f) that the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
14. EXTRACT OF ANNUAL RETURN:
Pursuant to provisions of Section 92(3) of the Act and Rule 12(1) of the Companies (Management and Administration) Rules 2014 an extract of annual return in Form MGT-9 is enclosed herewith and forms part of the report. (REFER ANNEXURE-C - EXTRACT OF ANNUAL RETURN)
(a) Statutory Auditors
The Company's auditors M/s CNK & Associates LLP Chartered Accountants Mumbai (ICAI Firm Registration No: 101961W/ W-100036) have been appointed for a period of 5 years from the 39th AGM under Section 139(1) of the Companies Act 2013 read with the Companies (Audit and Auditors) Rules 2014. There are no qualifications in this Report.
(b) Secretarial Auditors
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial personnel) Rules 2014 the Company has appointed Mr. S.Bhaskar Partner of M/s. BP & Associates a firm of Company Secretaries in practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Auditor for the year 2018-19 is annexed to the Board's report as Annexure E.
The Secretarial Auditors' have qualified their report for the following observations which are provided below with the Management response.
|Secretarial Audit||Management Response|
|The Company has not filed e-form MGT 14 for the borrowing done during the year 2017-18.||The company has initiated action to complete the filling before the AGM.|
|The Company has not filed e-form MGT 14 for an increase in remuneration for Managing Director borrowings and security provided to wholly owned subsidiary.||The company has initiated action to complete the filling before the AGM.|
|The Company has not appointed Chief Financial Officer within Six months from the resignation of previous Chief Financial Officer.||The company has appointed a CFO as on 29th May 2019.|
16. CORPORATE GOVERNANCE
As per Regulation 34(3) read with Schedule V of the SEBI Regulations a separate section on Corporate Governance practices followed by the Company together with a certificate from the Practicing Company Secretary confirming compliance with the conditions of corporate governance forms an Integral part of this report as Annexure C. Compliance reports in respect of all laws applicable to the Company have been reviewed by the Board of Directors periodically.
Your Company is committed to observe good corporate governance practices in letter and spirit. Your Board of Directors have taken all necessary steps to ensure compliance with the Corporate Governance guidelines as laid out in the SEBI Regulations 2015. All the Directors and Key Management Personnel of the Company have affirmed in writing their compliance with and adherence to the `Code of Ethics for Board of Directors and Senior Executives' adopted by the Company.
The Annual report of the Company contains a certificate by the Managing Director in terms of the SEBI Regulations on the compliance declarations received from the Directors and the Senior Management Personnel.
The Statutory Auditors of the Company have examined the requirements of Corporate Governance with reference to SEBI Listing Regulations and have certified the compliance as required under SEBI Listing Regulations. The Certificate in this regard is attached as Annexure in this report.
Your Company had duly complied with the requirements regarding Corporate Governance as stipulated under Regulation 24 of the SEBI Regulations.
Further as required under Regulation 17(8) of the SEBI Regulations a certificate from the Managing Director and Chief Financial Officer of the Company with regard to the financial statements and other matters is being annexed with this Report as Annexure G.
17. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:
(A) Conservation of Energy
The Company ensures that the manufacturing operations are conducted in the manner whereby optimum utilization and maximum possible savings of energy is achieved.
The Company is also making continuous efforts for utilizing alternate sources of energy.
The Company has launched formal management system implementation on environment health & safety. It will bring significant focus on sustainable development and energy conservation.
(B) Technology Absorption& Product Innovation
Company's products are manufactured by using in-house knowhow technology and no outside technology is being used for manufacturing activities.
Company operates in a very competitive environment regular value engineering and adoption of new efficient material and manufacturing technology is a key to stay at the forefront of the cost competitiveness.
(C) Foreign Exchange Earnings and Outgo:
|(Amount in Rs)|
|Particulars||For the year ended March 31 2019||For the year ended March 31 2018|
|Foreign Exchange Earnings||Nil||Nil|
|Foreign Exchange Outgo||Nil||Nil|
18. INTERNAL FINANCIAL CONTROLS:
The Company has well defined and adequate internal financial control system over financial reporting commensurate with its size scale and complexity of its operations to ensure that all the assets of the Company are safeguarded and protected against any loss and that all the transactions are properly authorised and recorded. The internal financial controls are adequate and are operating effectively so as to ensure orderly and efficient conduct of business operations.
Internal Financial controls helps the Board to monitor the state of controls in key business processes. The organisation is appropriately staffed with qualified and experienced personnel for implementing and monitoring the internal control environment.
The Internal Auditors evaluates the effectiveness and adequacy of internal controls compliance with operating systems policies and procedures of the Company and recommends improvements if any. Significant audit observations and the corrective/ preventive action taken or proposed to be taken by the process owners are presented to the Audit Committee. The Scope of Internal Audit is annually determined by the Audit Committee considering the inputs from the management and statutory auditors.
Capital expenditure of the Company as well as its Group are monitored and controlled with reference to approved budgets. The Audit Committee reviews the overall functioning of Internal Audit on a periodical basis.
The details in respect of internal financial control and their adequacy are included in the auditors' report which forms an integral part of this report.
19. CORPORATE SOCIAL RESPONSIBILITY (CSR)
In line with the provisions of the Companies Act 2013 and the rules framed there under with respect to the Corporate Social Responsibility (CSR) your Company is not governed by the provisions of Section 135 of the Companies Act 2013 and Companies (Corporate Social Responsibility Policy) Rules 2014. So the Company is not required to formulate a policy on CSR and also has not constituted a CSR Committee.
20. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
There are loans given during the year but no guarantees have been issued that are covered under Section 186 of the Act read with the Rules made thereunder. Details of loans made under the said section are covered in Notes to the financial statements.
21. RELATED PARTY TRANSACTIONS:
Your Company has entered into various transactions with related parties as defined under Section 2(76) of the Act in the ordinary course of business. All the related party transactions entered during the year were on arm's length basis and in the ordinary course of business. All the related party transactions effected during the year are disclosed in the notes to the Financial Statements. Further all related party transactions are placed before the Audit Committee and to the Board for approval. Omnibus approval was obtained on a yearly basis for transactions which are of repetitive nature a statement giving details of all Related Party Transactions are placed before the Audit Committee and the Board for review and approval on a quarterly basis.
There were no materially significant related party transactions i.e. transactions exceeding 10% of the annual turnover of the Company as per the last audited financial statements entered into by the Company with Promoters Directors Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large and thus disclosure of related party transactions as required under Section 134(3)(h) of the Act in Form AOC-2 is not required.
Also none of the Directors or the Key Managerial Personnel of the Company has any pecuniary relationships or transactions vis-a-vis the company.
22. INDUSTRIAL RELATIONS & HUMAN RESOURCE MANAGEMENT
It is firmly believed that employees of the Company and its group are the most valuable assets and key players of business success and sustained growth. The Company constantly striving to enhance the level of employee engagement and to ensure healthy career growth for employees at all levels. A diverse pool of lateral talent has been hired to enhance the bench strength. This includes professional experts with excellent academic credentials and professional track record.
The Company continued to conduct various employee benefit recreational and team building programs to enhance employee skills motivation as also to foster team spirit. The Company has also conducted in-house training programs to develop leadership as well as technical/functional capabilities of its employees in order to meet future talent requirements. Industrial relations were cordial throughout the year. The Company has also identified a pool of best human resources who are being groomed for future leadership roles. Structured safety programmes were organised emphasizing safety of people during the year under review.
(a) The ratio of the remuneration of each director to the median employee's remuneration for the financial year and such other details: Except Mr. Ashok Kumar Vishwakarma Managing Director no director is in receipt of remuneration except sitting fees.
|1.||Mr. Ashok Kumar Vishwakarma||Managing Director||12.45: 1|
(For this purpose sitting fees paid to the Directors have not been considered as Remuneration)
(b) The percentage increase in remuneration of each Director Chief Financial Officer Chief Executive Officer Company Secretary or Manager if any in the financial year:
|SI. No.||Name||Designation||Percentage Increase|
|1||Mr. Ashok Kumar Vishwakarma||Managing Director||No Increase|
|2||Mr. A. Mahesh [upto 31.05.2018]||Chief Financial Officer||No Increase|
|3||Ms.Nithya Kamaraj [from 14.02.2019]||Company Secretary||No Increase|
|4||Mr. C Abhilash [upto 14.11.2018]||Company Secretary||No Increase|
(c) 18% increase was reported in the median remuneration of employees in the financial year.
(d) The number of permanent employees on the rolls of standalone company as on 31st March 2019 is 21.
(e) Average percentile increase already made in the salaries of employee's other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and any exceptional circumstances for increase in the managerial remuneration:
There was no increase in remuneration to Key Managerial Personnel (KMP) & for employees other than KMP the increase was based on their performance.
(f) We affirm that the remuneration paid during the period under review is as per the Remuneration Policy of the company.
As required under provisions of the Act and Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 there are no employee falling under the above category thus no disclosures are required to be given in the report.
23. LISTING OF SHARES & DEMATERIALIZATION
The Equity shares of your Company continue to be listed in BSE Limited (BSE) and National Stock Exchange of India Limited (NSE). Your company has received in principal approval from BSE for revocation of suspension of trading in the month of May 2018 and is in the process of completing the formalities laid out in the approval.
The shareholders can avail the facility provided by NSDL and CDSL to dematerialize their shares. Shareholders are requested to convert their physical holdings into dematerialized form to derive the benefits of holding the shares in electronic form.
24. INVESTOR SERVICES
Your company shall constantly endeavour to give the best possible services to the investors and to keep the time of response to shareholder's request / grievance to the minimum. Priority is accorded to address all the issues raised by the shareholders and provide them a satisfactory reply at the earliest possible time.
The company has a separate Investor page and company activities are regularly updated.
Investor Grievances Redressal / Stakeholders Relationship committee of the Board meets periodically and reviews the status of the shareholder grievances.
25. GRATITUDE & ACKNOWLEDGEMENTS:
Your Directors place on record their sincere & high appreciation for the unflinching commitment dedication hard work and valuable contribution made by the employees of the company and its subsidiaries for sustained growth of group as a whole. Your Directors also sincerely thank all the Promoters stakeholders Government authorities Customers vendors Banks business associates shareholders and other statutory bodies for their continued assistance support and co-operation.
26. CAUTIONARY STATEMENT
Certain Statements in the Board's report and the Management Discussion and Analysis describing the Company's & its subsidiaries objectives expectations or forecasts may be forward looking within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed in the statement.
|For and on behalf of the Board of Directors|
|Ashish Sushil Jalan|
|Date: 28th June 2019|
|Place: MARAIMALAI NAGAR|