Your Directors have pleasure in presenting the Fourteenth Annual Report together withaudited financial statement of SORIL Infra Resources Limited ("the Company") forthe financial year ended March 31 2019.
The highlights of the financial results of the Company for the financial year endedMarch 31 2019 are as under:
(Amount in ')
|Particulars ||For the Financial Year ended March 31 2019 ||For the Financial Year ended March 31 2018 |
| || || |
|Profit/ (Loss) before Tax and Depreciation ||347053297 ||325589317 |
|Less: Depreciation of Fixed Assets ||196485247 ||147122197 |
|Profit/ (Loss) before Tax ||150568050 ||178467120 |
|Less: Prior Period Tax Adjustments ||- ||- |
|Less: Current Period Tax Adjustments ||465732 ||18523 |
|Profit/ (Loss) after Tax ||150102318 ||178448597 |
|Add: Other Comprehensive Income / (Loss) ||6544805 ||(281621) |
|Add: Profit/ (Loss) brought forward ||(1497645103) ||(1672591195) |
|Amount available for appropriation ||(1340997980) ||(1494424219) |
|Less: Appropriations: || || |
|Proposed dividend on preference shares ||2676105 ||2676105 |
|Corporate dividend tax thereon ||550081 ||544792 |
|Balance carried forward to Balance Sheet ||(1344224166) ||(1497645116) |
The Board has not proposed to transfer any amount to any reserve(s).
The Company endeavours to create sustainable business for the benefit of itsstakeholders. With a view to tap into lending opportunities in un-served rural India theCompany during the year forayed into financial services business with the primary focuson financing in rural markets by acquiring 100% stake in an existing Non-Banking FinanceCompany registered with RBI. Through this 100% owned NBFC the Company has undertaken suchrural and macro financing / lending business.
The Company is operating in the following businesses:
1. Equipment renting services
2. LED lighting
3. Financing & related activities
4. Management and maintenance services and
5. Construction advisory and other related activities
The Directors believe that these businesses have huge potential as explained in thefollowing paragraphs:
Equipment renting services branded as "Indiabulls Store One" (www.indiabullsstoreone.com )
The Company is one of the largest equipment rental solutions providers in India withpan-India projects of its customers and operates from offices in Mumbai GurugramKolkata Hyderabad Bangalore Ahmedabad Pune and Chennai. The rental fleet of 660equipment is operated across more than 85 projects sites. Primary equipment in the rentalfleet are Tower Cranes Passenger Hoists Piling Rigs Excavators Dozers Motor GradersWheel Loaders Mobile Boom Placers Transit Mixers Dumpers Steel Stir-up machinesConcrete Batching Plants etc of reputed International & Indian manufactures.
The Company has also forayed into new equipment sales & service business in aerialwork platform segment for which it has tied up with international manufacturers fordistribution of their scissor lifts & boom-lifts in India. Aerial Work Platform is oneof the fastest growing equipment segments across the world and has great potential indeveloping countries like India. By adding new machine sales the Company has become afull equipment service provider providing tailor made solution for rental sales andservice to its esteemed customers.
The business is being managed by a professional & experienced team who have vastknowledge and hands on experience in managing the rental & leasing fleet acrossseveral industry segments.
Company's customer base is spread across industry segments such as Real EstatePrecast Infrastructure Metro Petroleum Refinery Piling Industrial and Road. In FY2018-19 renting services has achieved a revenue growth of 52.23% on YoY basis. Ourcustomers are primarily major players in infrastructure and construction segments withlarge order books. Our customers look for a professional rental companies which can takecare of their equipment needs for multiple projects. This in turn allows our customers tofocus on their core strength of managing & executing the projects.
The benefits of Company's offering to the customers are:
Short term and long term rental agreements
Ability to take on critical projects
Vast equipment fleet
Experienced operations team to respond to challenges during project execution
Giving high importance to safety of manpower and deployed equipment
Reduction in overhead expenses followed by lowering of technical and othermaintenance charges
The Company believes that the Government Policy initiatives like 'Housing for all' and'Smart cities mission' and 100 percent FDI permission under the automatic route acrossvarious infrastructure sectors makes the future prospects very promising. India isexpected to become the third largest construction market globally by 2022 and therequired investment of '56.11lakh crores (USD 777.73 billion) will have substantialimpact.
As part of its long term growth strategy the Company will grow its presence acrossmajor cities in India and increase its product offerings. We shall strive to be preferredrental partner of our customers.
LED lighting branded as "Ib LED" ( www.indiabullsled.com )
LED business started with Projects in the Institutional LED Lighting market in FY2017-18 and expanded to Consumer LED Lighting market in 2018-19. Within this short span oftime the Company has reached a turnover of about '46.5 crores (net of taxes). TheDirectors believe that the operations of Led Lighting is progressing by virtue ofcontinuous efforts in establishing excellence in product value offered technology anddesign innovation and supply chain and distribution network. The Company shall maximiseautomation and digitisation to improve productivity and increase shareholder value.
The vision of the Company is to establish itself in the consumer product segmentsthrough LED Lights and scale up the operations to other products at the appropriate time.According to a report from the Electric Lamp and Component Manufacturers Association(ELCOMA) the Indian LED market is expected to grow to ' 26100 crores by 2020 which isapproximately 80 percent of the total lighting industry. TechSci (a global research-basedconsulting firm) has advised that the LED lighting market in India is projected toregister a CAGR of over 24 percent during 2016-2021.
In a short span of time the Company has established a professional design anddevelopment team comprising of experienced Illumination Engineers and Industrial Designerswho have developed product offerings of 715 SKU's in our LED lighting portfolio. TheCompany has set up a technologically advanced Lighting Innovation Centre in Mumbai whichis best in class in the industry.
The Company is ISO 9001:2015 certified for Design Development Engineering Marketingand supply of LED Luminaires Lighting Controls and Accessories including Electronicsdrivers as well as for Lighting Design and Marketing Services.
The products are marketed through 23 offices across the Country and distributed acrossa network of 131 town/cities of India through 250 channel partners & more than 5000retail points as of 31st July 2019.
Indiabulls LED is working with major IT/ITES Banking and Financial Institutions RealEstate Developers Manufacturing Industries Pharmaceutical Industries and InfrastructureProjects. It has been able to win several prestigious project supply orders in varioustrade sectors.
The IB LED team is proud to present to its shareholders one of the most popular productranges of the Company. Indiabulls LED: A Light Wellness Company
Light Wellness by Indiabulls LED is a lighting system that replicates the naturaldaylight through artificial lighting to boost emotional wellbeing health comfort andproductivity of individual.
Urban lifestyle compels us to work and carry out most of our routine activities underartificial light in homes offices factories and other workplaces. This lifestyle hasbeen affecting individuals with stress anxiety insomnia and eye- related diseases toname a few. Circadian Rhythm are physical mental and behavioural changes that follow adaily cycle.
The Light Wellness concept is brought about through our daily effective lighting systemthat creates dynamic lighting for agile workspaces with dynamic color temperature changinglighting solutions ranging between 2000K - 8000K.
Light wellness is an Innovation from Indiabulls LED. It significantly improves thelighting ambience and conditions thereby helps individual to handle occupational andlifestyle factors more effectively and increases employee productivity at the workplace.
The Directors are proud of the efforts of the IB LED team in establishing the businessfrom scratch. The Company expects demand growth to accelerate for the following factors:rising disposable income easy access to credit electrification of rural areas and aboveall exciting innovation and cost saving opportunity in LED lighting products
Financing & related activities branded as "Indiabulls Rural Finance" (www.indiabullsruralfinance.com )
To tap into lending opportunities in un-served rural India the Company during FY2018-19 forayed into financial services business with the primary focus on financing inrural markets and acquired 100% stake in "Littleman Fiscal Services PrivateLimited" an existing Non-Banking Finance Company registered with RBI on 25thJanuary 2019. Through this 100% owned NBFC the Company has undertaken such rural andmacro financing / lending business. Subsequently the name of the Company was changed toIndiabulls Rural Finance Private Limited. This NBFC company is a non-deposit takingnon-systemically important Non-Banking Finance Company.
The Company through its this NBFC arm deals majorly in secured lending business andwill tap into financing opportunities in underserved Semi-urban and rural India includingTier II & III cities for Micro Small and Medium Enterprises("MSME"). Theteam strives to bridge the existing credit gaps in this sector.
MSMEs are currently drivers of economic growth in the country.
Brief overview of MSME sector:
|MSME Units (#) ||Jobs created ||Contribution to exports ||% of GDP |
|5.6 crores ||12.4 crores ||45% of total exports ||31% of the GDP |
Debt Demand and Debt Gap in India
|Particulars ||Micro ||Small ||Medium ||Total |
|Debt demand ||1180000 ||2170000 ||320000 ||3670000 |
|Debt Supply ||380000 ||490000 ||220000 ||1090000 |
|Debt gap ||800000 ||1680000 ||100000 ||2580000 |
|Debt Demand Growth ||Debt Demand- sector wise |
|21% CAGR ||47% Manufacturing |
| ||53% service sector |
Data Source: Financing India's MSME- IFC World bank Report Nov 2018
MSMEs make significant contribution to GDP and employment and there lies greatopportunity to fulfil the credit gap of about '25.80 lacs crores.
The Company shall reform perform and transform the credit delivery by virtue ofpeople technology and understanding of customer profile. The Company is confident ofcapitalising on the present NBFC environment by virtue of its approach to business andcontinuous focus of Government on Rural Economy. Government has further initiatedrecapitalisation of public sector banks relaxation in securitisation norms expansion ofinfrastructure and easing the FDI and ECB route to investments.
Assets under management as on 31st March 2019 was '140.44 crores with Capital adequacyratio of 78.46%. The Company has made an equity investment of '117.04 crores as on 31stMarch 2019 to capitalize this NBFC for its business needs.
Management and maintenance services:
The Company has developed expertise in all avenues of management and maintenance ofproperties. The Company's current projects span more than two million square feet of highend Commercial and Residential developments wherein the revenue in the current year was'20 crores from maintenance of residential properties in Mumbai and NCR.
Construction advisory and other related activities
The Company provides advisory services pertaining to identification and acquisition ofland project planning design management construction execution maintenance andmanagement of completed projects as well as consultancy and advisory services onengineering and other related technical matters. Income from construction and relatedactivity was '3.63 crores in the current year.
To streamline the operations and ownership structure of the Company in a mannerleading to maximization of stakeholders' value and diversification of shareholders'portfolio by providing them direct ownership in each business segments the Board ofDirectors of the Company has approved the composite Scheme of Arrangement amongst theCompany its holding company Indiabulls Integrated Services Limited ("IBULISL")and their subsidiaries (viz Albasta Wholesale Services Limited Sentia PropertiesLimited Lucina Infrastructure Limited Ashva Stud and Agricultural Farms LimitedMahabala Infracon Private Limited Store One Infra Resources Limited IndiabullsEnterprises Limited and Indiabulls Pharmacare Limited) and Indiabulls PharmaceuticalsLimited and their respective shareholders and creditors ("Scheme"). The publicshareholders of the Company will also get the benefit of having the direct ownership inthe life and non-life insurance businesses being carried out under IBULISL.
Pursuant to the Scheme the public shareholders of the Company will get extra shares ofIBULISL and Indiabulls Enterprises Limited free of any cost in lieu of their shareholdingin the Company. With this post effectiveness of the Scheme they will have shares of twolisted entities -
(1) IBULISL shares of which are listed on NSE and BSE focusing on insurance andrelated businesses and
(2) Indiabulls Enterprises Limited shares of which will be listed on NSE and BSEfocusing on non-insurance businesses of the Company and of IBULISL and their subsidiaries(including proposed pharma business and rural finance business).
The Scheme is subject to all applicable statutory and regulatory approvals includingapproval from the stock exchanges SEBI shareholders and creditors of the company(ies)involved in the Scheme and the jurisdictional bench of the NCLT. The Company has alreadyfiled the Scheme with National Stock Exchange of India Limited and BSE Limited for seekingtheir & SEBI's NOC to the Scheme which is awaited.
CHANGE IN THE REGISTERED OFFICE OF THE COMPANY
During the FY 2018-19 post seeking all applicable regulatory approvals the registeredoffice of the Company was shifted from "National Capital Territory of Delhi" tothe "State of Haryana" and w.e.f. January 17 2019 the registered office of theCompany is situated at its corporate office at Plot No. 448-451 Udyog Vihar Phase-VGurgaon-122016 Haryana which is providing effective and smooth conduct of the Company'soperations economically viably and efficiently at reduced cost with better administrativecontrol supervision and convenience.
In view of the accumulated losses and in order to utilize the profits for businessrequirements of the Company your Directors do not recommend any dividend for the FY2018-19.
DIRECTORS & KEY MANAGERIAL PERSONNEL
During the FY 2018-19 Mr. Anil Malhan (DIN: 01542646) Mr. Divyesh Bharatkumar Shah(DIN: 00010933) Mrs. Sargam Kataria (DIN: 07133394) Mr. Gurinder Singh (DIN: 08183046)and Brig. Labh Singh Sitara (DIN: 01724648) were appointed on the Board of the Companyand Ms. Pia Johnson (DIN: 00722403) Col. (Retd.) Surinder Singh Kadyan (DIN: 03495880)Mr. Shamsher Singh Ahlawat (DIN: 00017480) and Mr. Joginder Singh Kataria (DIN: 05202673)resigned from the office of director(s) of the Company with effect from July 20 2018.
The present term of Mr. Prem Prakash Mirdha (DIN: 01352748) an Independent Director ofthe Company shall come to an end on September 25 2019. The Board constituted Nominationand Remuneration Committee evaluated his performance and considering the experience andcontribution made by him during his tenure recommended to the Board his re-appointment.Therefore to ensure continuity of guidance from Mr. Mirdha the Board has reappointed andrecommended his re-appointment for the approval of shareholders as an Independent Directorof the Company not liable to retire by rotation for a term of 3 years from theconclusion of his present term. Keeping in view the vast experience and knowledge of Mr.Mirdha the Board is of the view that his appointment as an Independent Director on theBoard will be in the interest of the Company. Upon getting approval of the shareholdersfor his appointment as an Independent Director his appointment shall be formalized byissuing a letter of appointment to him which shall be open for inspection by the membersat the registered office of the Company in terms of applicable provisions of theCompanies Act 2013.
In accordance with Section 152 of the Companies Act 2013 and rules framed thereunderand in terms of the Articles of Association of the Company Mr. Divyesh Bharatkumar Shah(DIN: 00010933) Non-Executive Director is liable to retire by rotation and beingeligible has offered himself for re-appointment at the ensuing Annual General Meeting.The Board of Directors recommended his re-appointment.
All the present Independent Directors of the Company have given declaration that theymeet the Criteria of Independence laid down under Section 149(6) of the Companies Act2013.
The matter relating to appointment/ re-appointment of aforementioned directors havebeen included in the Notice convening the 14th Annual General Meeting of the Company. Thebrief resume of the Directors proposed to be appointed/ reappointed nature of theirexpertise in specific functional areas and name of the Companies in which they holddirectorships and memberships/chairmanships of Board Committees and other requisiteinformation are provided in the Notice convening the 14th Annual General Meeting of theCompany.
During the FY 2018-19 the Company pursuant to and in terms of Chapter VII of the thenapplicable SEBI (Issue of Capital and Disclosure Requirements) Regulations 2009 onOctober 10 2018 issued and allotted an aggregate of 3900000 fully paid up equityshares of face value of ' 10/- each of the Company at an issue price of ' 539 (includinga premium of ' 529) per equity share to certain foreign portfolio investor(s) pursuant toand in terms of shareholders' approval dated September 29 2018.
An aggregate amount of ' 210.21 crores raised by the Company through aforesaidpreferential issue has been utilized towards capitalization / funding company's whollyowned subsidiary as per stated objects of the issue.
Consequent to the said allotment the paid up share capital of the Company standsincreased to ' 315000000 comprising of 31500000 equity shares of ' 10/- each.
EMPLOYEE STOCK OPTIONS
As on March 31 2019 an aggregate of 4500000 Employees Stock options were in force.These options upon exercise are convertible into equal number of Equity Shares of theCompany. As and when these options are exercised the paid-up share capital of the Companyshall stand increased accordingly.
The disclosures required to be made in compliance with the applicable regulations havebeen placed on the website of the Company www.sorilinfraresources.com
During the year under review the Company has not accepted any deposits from thepublic falling within the ambit of Chapter V of the Companies Act 2013 and the Companies(Acceptance of Deposits) Rules 2014 therefore the disclosures required in terms of Rule8 of the Companies (Accounts) Rules 2014 are not required to be given.
LISTING WITH STOCK EXCHANGES
The Equity Shares (ISIN:INE034H01016) of the Company continue to remain listed at BSELimited and National Stock Exchange of India Limited. The listing fees payable to both theexchanges for the financial year 2019-20 have been paid.
(a) Statutory Auditors
The present term of M/s Agarwal Prakash & Co. Chartered Accountants (FirmRegistration No. 005975N) the Statutory Auditors of the Company who were appointed by themembers at their Ninth Annual General Meeting held on September 26 2014 for a period offive years shall come to an end on the conclusion of the ensuing Fourteenth AnnualGeneral Meeting of the Company. It is proposed to re-appoint existing auditors M/s AgarwalPrakash & Co. (Firm Registration No. 005975N) as the Statutory Auditors of theCompany for a further period of five years i.e. from the conclusion of ensuing FourteenthAnnual General Meeting until the conclusion of the Nineteenth Annual General Meeting ofthe Company. The Company has received a certificate from the Auditors to the effect thattheir continuation as such from the conclusion of this Annual General Meeting until theconclusion of Nineteenth Annual General Meeting will be in accordance with the provisionsof the Section 141(3)(g) of the Companies Act 2013.
The Auditors' Report forming part of this Annual Report is self-explanatory andtherefore do not call for any further explanation. No fraud has been reported by theAuditors of the Company in terms of the provisions of Section 143(12) of the CompaniesAct 2013 and Rules framed thereunder.
(b) Secretarial Auditors & Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theRules made thereunder the Company has appointed M/s NP Gupta & Associates PracticingCompany Secretaries as its Secretarial Auditors to conduct the secretarial audit of theCompany for the Financial Year 2018-19. The Company has provided all assistancefacilities documents records and clarifications etc. to the Secretarial Auditors forconducting their
audit. The Report of Secretarial Auditors for the Financial Year 2018-19 is annexed asAnnexure 1 forming part of this Report. The Secretarial Compliance Report as prescribedby SEBI is annexed as Annexure 2 forming part of this Report. The Reports areself-explanatory and therefore do not call for any further explanation.
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under "Corporate Social Responsibility (CSR)" theCompany has undertaken projects as per its CSR Policy (available on Company's website onweb-link: http://www.sorilinfraresources.com/dir/investor/28.CSR Policy Store One.pdf )and the details are contained in the Annual Report on CSR Activities given in Annexure 3forming part of this Report. These projects are in accordance with Schedule VII of theCompanies Act 2013 read with the relevant rules.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Pursuant to Regulation 34 of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 (hereinafter referred as"SEBI LODR") Management Discussion and Analysis Report for the year underreview is presented in a separate section forming part of this Annual Report.
CORPORATE GOVERNANCE REPORT
Pursuant to Regulation 34 of the SEBI LODR a separate section on Corporate Governancepractices followed by the Company together with a certificate from a Practicing CompanySecretary confirming compliance is presented in a separate section forming part of thisAnnual Report.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statement in terms ofSection 134 of the Companies Act 2013:
a) that in the preparation of the annual financial statements for the year ended March31 2019 the applicable accounting standards had been followed along with properexplanation relating to material departures if any;
b) that such accounting policies as mentioned in the Notes to the Financial Statementshave been selected and applied consistently and judgments and estimates have been madethat are reasonable and prudent so as to give a true and fair view of the state of affairsof the Company as at March 31 2019 and the profit and loss of the Company for the yearended on that date;
c) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d) that the annual financial statements have been prepared on a going concern basis;
e) that proper internal financial controls are in place and that such financialcontrols are adequate and are operating effectively; and
f) that systems to ensure compliance with the provisions of all applicable laws are inplace and are adequate and operating effectively.
EXTRACT OF ANNUAL RETURN
In terms of Sections 92(3) and 134(3) of the Companies Act 2013 and rules framedthereunder extract of the Annual Return for the Financial Year ended 31st March 2019 isannexed as Annexure 4 forming part of this Report and is also available at website of theCompany at web-link:
https://www.sorilinfraresources.com/dir/investor/Extract of Annual Return 2019.pdfBOARD MEETINGS
During the FY 2018-19 9 (Nine) Board Meetings were convened and held. The details ofsuch meetings are given in Corporate Governance Report forming part of this Annual Report.The intervening gap between these meetings was within the period prescribed under theCompanies Act 2013. The notice and agenda including all material information and minimuminformation required to be made available to the Board under Regulation 17 read withSchedule II Part A
of the SEBI LODR were circulated to all directors well within the prescribed timebefore the meeting or were placed at the meeting with the consent of majority of Directors(including one Independent Director). During the year separate meeting of the IndependentDirectors was held on January 29 2019 without the presence of Non-Independent Directorsand the members of the Company Management.
PERFORMANCE EVALUATION OF THE BOARD ITS COMMITTEES AND DIRECTORS
The Nomination & Remuneration Committee (NRC) of the Board reassessed theframework methodology and criteria for evaluating the performance of the Board as awhole including Board committee(s) as well as performance of each director(s) andconfirms that the existing evaluation parameters are in compliance with the requirementsas per SEBI guidance note dated January 5 2017 on Board evaluation. The existingparameters includes effectiveness of the Board and its committees decision makingprocess Directors'/members' participation governance independence quality and contentof agenda papers team work frequency of meetings discussions at meetings corporateculture contribution and management of conflict of interest. Basis these parameters theNRC had reviewed at length the performance of each director individually and expressedsatisfaction on the process of evaluation and the performance of each Director. Theperformance evaluation of the Board as a whole and its committees as well as theperformance of each director individually was carried out by the entire Board ofDirectors. The performance evaluation of the Non-Independent Directors and the Board ofDirectors as a whole was carried out by the Independent Directors in their meeting heldon January 29 2019. The Directors expressed their satisfaction with the evaluationprocess.
Also the Executive Director of the Company on a periodic basis has had one-to-onediscussion with the directors for their views on the functioning of the Board and theCompany including discussions on level of engagement and contribution independence ofjudgment safeguarding the interest of the Company and its minority shareholders andimplementation of the suggestions offered by Directors either individually or collectivelyduring different board/ committee meetings.
The Board has framed a policy for selection and appointment of Directors SeniorManagement and their remuneration on recommendation of Nomination and RemunerationCommittee. The Remuneration Policy is briefly stated in the Corporate Governance Reportforming part of this Annual Report and is also available at the website of the Company atweb-link: http://www.sorilinfraresources.com/dir/investor/Remuneration%20PolicySORIL%20Infra.pdf
LOANS GUARANTEES OR INVESTMENTS
During the FY 2018-19 in terms of the provisions of Section 186(1) of the CompaniesAct 2013 the Company did not make any investments through more than two layers ofinvestment companies.
The Company's investment/loans/guarantees during FY 2018-19 were in compliance withthe provisions of section 186 of the Companies Act 2013 particulars of which arecaptured in financial statements of the Company forming part of this Annual Report.
RELATED PARTY TRANSACTIONS
During the year no materially significant related party transaction was entered by theCompany with its Promoters Key Managerial Personnel or other designated persons which mayhave potential conflict with the interest of the Company at large. Details of all relatedparty transactions are disclosed in the financial statement of the Company forming part ofthis Annual Report. None of the transactions with related parties is material transactionand/or transaction which is not at Arm's length requiring disclosure pursuant to Section134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules 2014. ThePolicy on materiality of Related Party Transactions and also on dealing with suchtransactions is available on the website of the Company at web-link:
http://www.sorilinfraresources.com/dir/investor/18.SORIL Policy for Dealing withRelated Party Transactions.pdf INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an elaborate system of internal controls commensurate with the sizescale and complexity of its
operations; it also covers areas like financial reporting fraud control compliancewith applicable laws and regulations etc. Regular internal audits are conducted to checkand to ensure that responsibilities are discharged effectively. The Internal AuditDepartment monitors and evaluates the efficacy and adequacy of internal control systems inthe Company its compliance with regulatory directives efficacy of its operating systemsadherence to the accounting procedures and policies. Wherever required the internal auditefforts are supplemented by audits conducted by specialized consultants/audit firms. Basedon the reports of the Internal Auditors process owners undertake corrective actions intheir respective areas and thereby strengthen the controls.
MATERIAL CHANGES AND COMMITMENTS
Except as disclosed in this report there are no material changes and commitmentsaffecting the financial position of the Company which has occurred between the end of theFinancial Year of the Company i.e. March 31 2019 and the date of this Report.
Further no significant and material orders were passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo is as under:
A. Conservation of Energy
The Company operations do not account for substantial energy consumption. However theCompany is taking all possible measures to conserve energy. As an ongoing process thefollowing measures are undertaken:
a) Replacing all of its lighting system with LEDs which is expected to slash relatedelectricity consumption by over 50%.
b) Installation of five star energy conservation air conditioning systems.
c) Installation of automatic power controllers to save maximum demand charges andenergy.
d) Installation of TFT monitors that saves power.
e) Periodic Training sessions for employees on ways to conserve energy in theirindividual roles.
B. Technology Absorption
The nature of business being carried out by the Company entails an extensive use ofeffective information technology so as to ensure that its services reach the end usersi.e. its clients without any loss of time. The Company has implemented best of the classapplications to manage and automate its business processes to achieve higher efficiencydata integrity and data security. It has helped it in implementing best business practicesand shorter time to market new schemes products and customer services.
The Company's investment in technology has improved customer services reducedoperational costs and development of new business opportunities.
C. Foreign Exchange Earnings and Outgo
The details of foreign exchange earnings and outgo is given in the table below: (Amountin '
|Particulars ||For the year ended March 31 2019 ||For the year ended March 31 2018 |
|Foreign Exchange Outgo || || |
|Purchase of fixed assets and spares and services ||224875730 ||54026842 |
|Purchase of inventory of LED ||16046953 ||3386407 |
|Travelling and conveyance ||654452 ||311402 |
|Foreign Exchange Earnings || || |
|Export sale of LED Lighting ||501840 ||Nil |
BUSINESS RISK MANAGEMENT
Pursuant to the applicable provisions of the Companies Act 2013 the Company hasformulated Business Risk Management policy to identify and evaluate business risks andopportunities. This policy seeks to create transparency minimize adverse impact on itsbusiness objectives and enhance its competitive advantage. It defines the risk managementapproach across the Company at various levels including the documentation and reporting.At present the Company has not identified any element of risk which may threaten itsexistence. The requirement of constituting Risk Management Committee in terms of SEBI LODRis not applicable to the Company.
PARTICULARS OF EMPLOYEES
Pursuant to the applicable provisions of the Companies Act 2013 read with Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 disclosures onManagerial Remuneration are provided in Annexure 5 forming part of this Report. In termsof the provisions of Section 136(1) of the Companies Act 2013 read with the said rulesthe Directors' Report is being sent to all the shareholders of the Company excluding theannexure on the names and other particulars of employees required in accordance with Rule5(2) of said rules which is available for inspection by the members subject to theirspecific written request in advance to the Company Secretary. The inspection is to becarried out at the Company's Registered Office during business hours on working days ofthe Company up to date of ensuing Annual General Meeting.
FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS
Independent Directors are familiarized with their roles rights and responsibilities inthe Company as well as with the nature of industry and business model of the Companythrough presentations about the Company's strategy business model product and serviceofferings customers' & shareholders' profile financial details human resourcestechnology facilities internal controls and risk management their roles rights andresponsibilities in the Company.
The Board is also periodically briefed on the various changes if any in theregulations governing the conduct of Independent Directors. The details of thefamiliarization programs have been hosted on the website of the Company at web-link:
http://www.sorilinfraresources.com/dir/investor/Details of familiarization programmesimparted to independent directors.pdf SUBSIDIARY COMPANIES
Pursuant to Section 129 of the Companies Act 2013 the Company has prepared itsConsolidated Financial Statement along with its subsidiaries in the same form and manneras that of the Company which shall be laid before its Fourteenth Annual General Meetingalong with its Standalone Financial Statement. The Consolidated Financial Statements ofthe Company along with its subsidiaries for the year ended March 31 2019 forms part ofthis Annual Report.
For the performance and financial position of the subsidiaries of the Company alongwith other related information required pursuant to Rule 8(5)(iv) of the Companies(Accounts) Rules 2014 the Members are requested to refer to the Financial Statements ofthe Company.
Further pursuant to the provisions of Section 136 of the Act the financial statementsof the Company consolidated financial statements along with relevant documents andseparate audited accounts in respect of subsidiaries are also available on the website ofthe Company. Shareholders may write to the Company for the annual financial statements anddetailed information on subsidiary companies. Further the documents shall also beavailable for inspection by the shareholders at the registered office of the Company.
NAMES OF THE COMPANIES WHICH HAVE BECOME OR CEASED TO BE SUBSIDIARIES OR ASSOCIATECOMPANIES
During the FY 2018-19 Indiabulls Rural Finance Private Limited became wholly ownedsubsidiary of the Company.
COMMITTEES OF THE BOARD
The Company has following Board constituted committees which have been established as apart of the best corporate governance practices and are in compliance with therequirements of the relevant provisions of applicable laws and statutes:
a) Audit Committee
b) Nomination and Remuneration Committee
c) Stakeholders Relationship Committee
d) Corporate Social Responsibility Committee
The details with respect to composition power role terms of reference etc. of eachof these committees are given in the Corporate Governance Report forming part of thisAnnual Report.
Apart from the above the Board has also constituted Compensation Committee foradministration of stock option scheme(s) Management Committee for operational mattersIssuance Committee for considering issuance of securities and Reorganization Committee forconsidering evaluating and implementing reorganization options.
The Board of Directors state that the Company has complied with the applicableSecretarial Standards (SS-1 and SS-2) respectively relating to Meetings of the Board itsCommittees and the General Meetings as issued by the Institute of Company Secretaries ofIndia.
NUMBER OF CASES FILED IF ANY AND THEIR DISPOSAL UNDER SECTION 22 OF THE SEXUALHARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
The Company has zero tolerance towards harassment at the workplace and has compliedwith the provisions and constituted an Internal Complaints Committee and also adopted apolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules thereunder.
During the financial year 2018-19 no cases of sexual harassment were reported.
APPLICABILITY OF MAINTENANCE OF COST RECORDS
The Company is not required to maintain cost records as specified by the CentralGovernment under sub-section (1) of section 148 of the Companies Act 2013.
The Company is committed to adhere to the highest standards of ethical moral and legalconduct of its business operations. To maintain these standards the Company hasimplemented the Whistle Blower Policy ("the Policy") to provide an avenue foremployees to report matters without the risk of subsequent victimization discriminationor disadvantage. The Policy applies to all employees of the Company. Pursuant to thePolicy the whistle blowers can raise concerns relating to matters such as breach ofCompany's Code of Conduct fraud bribery corruption employee misconduct illegalitymisappropriation of Company's funds / assets etc. A whistle-blowing or reportingmechanism as set out in the Policy invites all employees to act responsibly to upholdthe reputation of the Company. The Policy aims to ensure that serious concerns areproperly raised and addressed and are recognized as an enabling factor in administeringgood governance practices. The details of the Whistle Blower Policy are available on thewebsite: www.sorilinfraresources.com of the Company. The Audit committee set by the Boardconstitutes a vital component of the whistle blower mechanism and instances of financialmisconduct if any are reported to the Audit committee. No employee is denied access tothe Audit Committee.
Electronic copies of the Annual Report 2018-19 and Notice of the Fourteenth AGM arebeing sent to all the members whose email addresses are registered with the Company /Depository Participant(s). For members who have not registered their email addressesphysical copies of the Annual Report 2018-19 and Notice of the Fourteenth AGM will be sentin the permitted mode.
The Company is providing e-voting facility to all members to enable them to cast theirvotes electronically on all resolutions set forth in the Notice of the Fourteenth AGM.This is pursuant to section 108 of the Companies Act 2013 and Rule 20 of the Companies(Management and Administration) Rules 2014 as substituted by Companies (Management andAdministration) Amendment Rules 2015 and the SEBI LODR. The instructions for e-votingare provided in the AGM Notice.
Your Company has been able to operate efficiently because of the culture ofprofessionalism creativity integrity and continuous improvement in all functional areasand the efficient utilization of all its resources for sustainable and profitable growth.Your Directors wish to place on record their appreciation of the contributions made andcommitted services rendered by the employees of the Company at various levels. YourDirectors also wish to express their gratitude for the continuous assistance and supportreceived from the investors clients bankers regulatory and government authoritiesduring the year.
| || |
For and on behalf of the Board of Directors
| ||Anil Malhan ||Sargam Kataria |
|Date: August 14 2019 ||Executive Director ||Director |
|Place: Gurugram ||DIN:01542646 ||DIN:07133394 |