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SBEC Systems (India) Ltd.

BSE: 517360 Sector: Others
NSE: N.A. ISIN Code: INE689V01018
BSE 05:30 | 01 Jan SBEC Systems (India) Ltd
NSE 05:30 | 01 Jan SBEC Systems (India) Ltd

SBEC Systems (India) Ltd. (SBECSYSTEMS) - Director Report

Company director report

To

The Shareholders

SBEC Systems (India) Limited

Dear Members

Your Directors take pleasure in presenting the 31st Annual Report of the Companytogether with the Audited Accounts for the year ended 31st March 2020..

FINANCIAL RESULT

THE SUMMARISED FINANCIAL RESULTS OF THE COMPANY FOR THE FINANCIAL YEAR 2019-20VIS-A-VIS 2018-19 ARE AS UNDER:

(Rs. In Lacs)

PARTICULARS Period Ended 31.03.2020 Period ended 31.03.2019
SALES & OTHER INCOME 1.56 84.18
TOTAL EXPENDITURE 99.18 82.71
OPERATING PROFIT/(LOSS) BEFORE TAX (111.71) (10.33)
PROFIT/(LOSS) AFTER TAX (113.56) (10.33)

During the year under review the revenue from other income stood at Rs. 1.56 Lacs. Thenet loss of the Company stood at Rs. 113.56 Lacs as compared to net loss of Rs. 10.33 Lacsfor the previous year.

DIVIDEND & RESERVES

In view of the losses incurred your Board is unable to recommend any dividend for thefinancial year ended March 312020.

The Company has not transferred any amount to the reserves for the year ended March312020.

SHARE CAPITAL

The paid up equity capital as on March 312020 was Rs.1000 Lacs. During the year underreview the Company has not issued shares with differential voting rights nor grantedstock options nor sweat equity.

ASSOCIATE/SUBSIDIARY/JOINT VENTURE COMPANY

As on March 31st 2020 the Company has one Associate Company i.e. SBEC Sugar Limited.Investment in the Associate is dealt with in accordance with Indian Accounting Standard(Ind-AS) 28 the consolidation of accounts of the Company with its associate are combinedby using "Equity Method".

Further a statement containing the salient features of the financial statements of theAssociate company are prescribed in AOC-1 and appended as Annexure-A to the Board'sReport.

There is no subsidiary company within the meaning of Section 2(87) of the CompaniesAct 2013 ("Act").

MATERIAL CHANGES AND COMMITMENTS

There are no material changes occurred in between the financial year ended on 31stMarch 2020 and date of the report of the Company which affects the financial position ofthe Company.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company for the financial period 2019-20are prepared in compliance with applicable provisions of the Companies Act 2013 IndianAccounting Standards and SEBI (LODR) Regulations 2015.

DIRECTORS

There were no changes in the Composition of the Board of Directors of the Companyduring the financial year 2019-20.

In In terms of Section 152 and other applicable provisions if any of the CompaniesAct 2013 Ms. Ritu Sikka Director of the Company retires by rotation at the ensuingAnnual General Meeting and being eligible have offered herself for re-appointment. TheBoard recommends her re-appointment for the consideration of the members of the Company atthe Annual General Meeting. Brief profile of Ms. Ritu Sikka has been given in the Noticeconvening the Annual General Meeting.

Mr. Rajeev Kumar Agarwal (DIN: 00298252) Mr. Jagdish Chander Chawla (DIN: 05316202)and Mr. Shyam Babu Vyas (DIN: 02025415) were appointed as an Independent Director of thecompany at the 26th Annual General Meeting of the company held on 23rd September 2015 fora consecutive period of five years (first term) and they hold office as IndependentDirector of the Company upto 22nd September 2020.

Based on the performance evaluation & recommendation by the Nomination &Remuneration Committee the Board of directors recommends the re-appointment of Mr. RajeevKumar Agarwal Mr. Jagdish Chander Chawla and Mr. Shyam Babu Vyas as Independent Directorsfor a second term of five consecutive years i.e. from 23rd September 2020 to 22ndSeptember 2025.

Particulars of Directors seeking re-appointment have been given in the explanatorystatement annexed to this notice for the Annual General Meeting.

All the Directors have made necessary disclosures as required under various provisionsof the Companies Act 2013 and SEBI (LODR) Regulations 2015.

DIRECTOR'S RESPONSIBILITY STATEMENT:

Pursuant to the provisions contained in Section 134 (5) of the Companies Act 2013your Directors to the best of their knowledge and belief and according to information andexplanations obtained from the management confirm that:

• in the preparation of the annual accounts for the financial year ended March312020 the applicable accounting standards have been followed and there are no materialdepartures from the same;

• the Directors have selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at March 312020 andof the loss of the Company for the year ended on that date;

• the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

• The Directors have prepared the Annual Accounts on a going concern basis;

• The Directors have laid down proper internal financial controls to be followedby the Company and such controls are adequate and operating effectively and

• The Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.

KEY MANAGERIAL PERSONNEL (KMP)

During the financial period ended 31.03.2020 following persons are Whole Time KeyManagerial Personnel (KMP) of the Company in terms of provisions of Section 203 of theCompanies Act 2013.

Name Designation
1. Mr. Shiv Shanker Agarwal Chief Executive Officer
2. Mr. Luv Gupta Chief Financial Officer
3. Ms. Priyanka Negi Company Secretary & Compliance Officer

BOARD MEETING

The Board met Five times during the financial year 2019-20 the details of which aregiven in the Corporate Governance Report. The intervening gap between the Meetings waswithin the period prescribed under the Companies Act 2013.

COMMITTEES OF THE BOARD

Presently the Company has the following mandatory Committees::

^ Audit Committee

^ Nomination and Remuneration Committee ^ Stakeholders Relationship Committee

The details of all the Committees along with their composition terms of reference andmeetings held during the year are provided in the "Report on CorporateGovernance" forming part of this Annual Report.

POLICY ON DIRECTOR'S APPOINTMENT & REMUNERATION AND OTHER DETAILS

The Board on recommendation of the Nomination & Remuneration Committee has frameda policy on Directors' appointment and remuneration including cri- teria for determiningqualifications positive attributes independence of a Director and other mattersspecified under said section. The policy is available on the website of the Companywww.sbecsvstems.com .

BOARD EVALUATION:

As required under Section 134(3)(p) of the Companies Act 2013 read with Regulation 17of SEBI (Listing Obligations and Disclosures Requirements) Reg- ulations 2015 the Boardof Directors had already approved the evaluation criteria for evaluating the performanceof the Board of Directors its Committees namely Audit Committee StakeholdersRelationship Committee and Nomination and Remuneration Committee the Directorsindividually and the performance of Independent Directors.

The manner in which the evaluation was carried out and the process adopted has beenmentioned in the Corporate Governance Report.

STATEMENT ON DECLARATION GIVEN BY THE INDEPENDENT DIRECTORS

As required under Section 149 (7) of the Companies Act 2013 all the IndependentDirectors have given declarations that they meet the criteria of independence as specifiedin Section 149 (6) of the Companies Act 2013 and SEBI (LODR) Regulations 2015.

STATUTORY AUDITORS

Pursuant to the provisions of Section 139 of the Act read with the Companies (Audit andAuditors) Rules 2014 M/s. Doogar & Associates Chartered Accounts (Firm Regn No.000561N) were appointed as the Statutory Auditors for a term of 5 years in their 28th AGMheld on September 28 2017. They hold office till the 33rd AGM to be held in 2022.

The report from the Auditors on the financial statements of the Company forms part ofthis Annual Report.

STATUTORY AUDITORS REPORT

The Statutory Audit Report contains qualifications and the Company has given itscomments on Audit Qualified Opinion for the Financial Year 2019-20 the details arementioned below:

Response to Qualified Opinion in Standalone Financial Statement

Non reversal of diminution of current quoted investment it is hereby clarified thatthe company is holding 14230884 Equity Shares of SBEC Sugar Limited and the Company isnot intending to sale/ transfer/ otherwise dispose off these shares the management hasdecided not to make any provision of diminution or reversal thereof.

The Statutory Auditors have not reported any incident of fraud to the Audit Committeeof the Company during the year under review.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed M/s R.K. Singhal & Associates Company Secretaries in practice as theSecretarial Auditor to undertake the Secretarial Audit of the Company. The Report of theSecretarial Audit is given in Annexure-B to this Report.

The observations in secretarial audit report are self-explanatory and therefore notcall for any further explanation.

RISK MANAGEMENT POLICY

As required under Section 134(n) of the Companies Act 2013 the Company has laid downthe policy on risk management stating therein the objectives and purpose of the saidpolicy.

The Risk Management Policy of the Company can be viewed on the Company's websitewww.sbecsvstems.com .

INTERNAL FINANACIAL CONTROLS

The Company has adequate Internal Financial Controls with proper checks to ensure thattransactions are properly authorised recorded and reported apart from safe- guarding itsassets. These systems are reviewed and improved on a regular basis. It has a comprehensivebudgetary control system to monitor revenue and expenditure against approved budget on anongoing basis. The internal auditors of the Company reviews the controls across the keyprocesses and submits reports periodically to the Management and significant observationsare also presented to the Audit Committee for review. Follow up mechanism is in place tomonitor the implementation of the various recommendations.

CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES.

Section 135 of the Companies Act 2013 provides the threshold limit for applicabilityof the CSR to a Company i.e. (a) net worth of the Company to be Rs. 500 crore or more; or(b) turnover of the company to be Rs. 1000 crore or more; or (c) net profit of thecompany to be Rs.5 crore or more. As the Company does not fall under any of the thresholdlimits given above the provisions of Section 135 are not applicable to the Company.

RELATED PARTY TRANSACTIONS

The transactions entered with related parties during the year under review were onArm's Length basis and in the ordinary course of business. The provisions of Section 188of the Companies Act 2013 are therefore not attracted. All related party transactionswere approved by the Audit Committee and the Board. The relevant information regardingrelated party transactions has been set out in Note No. 27 of the Financial Statements forthe financial year ended 31.03.2020.

Thus disclosure in Form AOC-2 is not required.

As required under Regulation 23 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company has formulated a policy on related partytransactions and the same was approved by the Audit Committee and the Board of Directors.The said policy has been uploaded at the investors section of the Company's website atwww.sbecsvstems.com

FIXED DEPOSITS

During the financial year Company has not accepted any deposit from public within themeaning of section 73 of the Companies Act 2013 read with Companies (Acceptance ofDeposit) Rules 2014.

CORPORATE GOVERNANCE

In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 aCorporate Governance Report along with a certificate from M/s R.K. Singhal &Associates Company Secretaries in practice and Management Discussion and Analysis Reportforms part of this Annual Report.

The declaration by the Chief Executive Offer and Chief Financial Officer addressed tothe Members of the Company pursuant to Clause D of Schedule V Read with Regulation 34(3)and Chapter IV of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 regarding adherence to the Code of Conduct by the Members of the Board and by theMembers of the Senior Management Personnel of the Company is also attached to theCorporate Governance report.

VIGIL MECHANISM & WHISTLE BLOWER POLICY

The Company has a vigil mechanism and a whistle blower policy. The same has been postedon the Company's website and the details of the same are given in the Corporate GovernanceReport.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information relating to conservation of energy technology absorption and foreignexchange earnings and outgo pursuant to Section 134(3) (m) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 is given in Annexure-C to this Report.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

During the financial year 2019-20 the Company has not made any investment nor givenany loans or guarantees covered under the provisions of section 186 of the Companies Act2013.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 relating to the ratioof the Remuneration of each Director to the median employees remuneration shall not applybecause none of the Directors has drawn any remuneration from the Company for thefinancial year 2019-20. In terms of the Provisions of Section 197(12) of the Companiesact 2013 read with Rule 5(2) & (3) of the Companies (Appointment & Remunerationof Managerial Personnel) Rules 2014. None of the employees of the Company were in receiptof remuneration of more than limit specified as set out in the above said Rules.

COST AUDITOR

During the period under review Cost Audit is not applicable to the Company.

EXTRACT OF ANNUAL RETURN

As provided under Section 92(3) of the Companies Act 2013 extract of the AnnualReturn prepared in form MGT 9 pursuant to Rule 12 of the Companies (Management andAdministration Rules) 2014 is furnished in Annexure-D which form a part of this report.

SECRETARIAL STANDARD

The Company has complied with the Secretarial Standards issued by The Institute ofCompany Secretaries of India and approved by the Central Government as required underSection 118(10) of the Companies Act 2013.

DEPOSITS

During the year under review your Company did not accept any deposits within themeaning of provisions of Chapter V - Acceptance of Deposits by Companies of the CompaniesAct 2013 read with the Companies (Acceptance of Deposits) Rules 2014.

LISTING WITH STOCK EXCHANGES

The Equity Shares of the Company are listed with BSE Limited. The annual fees for theBombay Stock Exchange have been paid promptly for the year 2019-2020. REVOCATION OFSUSPENSION OF SHARES

The Equity shares of the Company were lying suspended on the BSE Limited due to penalreasons. They were last quoted on the BSE Limited on 6th September 2001 at Rs. 2.30 pershare.

The Company applied for revocation of suspension in trading of securities before"BSE Limited" subsequently after complying with all the formalities with theBombay Stock Exchange the Company had received approval for revocation of suspension intrading of equity shares from the BSE on 23rd December 2019.

SEXUAL HARASSMENT

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 and Redressal)Act 2013. All employees (permanent contractual temporary trainees) are covered underthis policy.

The following is a summary of sexual harassment complaints received and disposed offduring the year 2019-20:

No. of complaints received : NIL

No. of complaints disposed off : NIL

No. of complaints pending on end of the financial year : NIL

PERSONNEL RELATIONS

Your directors hereby place on record their appreciation for the services rendered bythe executives staff and workers of the Company for their hard work dedication andcommitment. During the year under review relations between the employees and themanagement continued to remain cordial.

APPRECIATION

Your directors thank the various Central and State Government Authorities and Agenciesfor the continued help and cooperation extended by them. The Directors gratefullyacknowledge all stakeholders of the Company viz. customers members dealers vendors andbanks for their excellent support during the year. The Directors also place on recordtheir sincere appreciation to all employees of the Company for their unstinted commitmentand continued cooperation to the Company.