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Spectrum Electrical Industries Ltd.

BSE: 535112 Sector: Engineering
NSE: SPECTRUM ISIN Code: INE01EO01010
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Spectrum Electrical Industries Ltd. (SPECTRUM) - Director Report

Company director report

To

The Members

SPECTRUM ELECTRICAL INDUSTRIES LIMITED

(CIN: U28100MH2008PLC185764)

Plot No. V-195 MIDC Area Ajanta Road Jalgaon 425003

MH (India).

The Directors of your Company are pleased to present their 11th Annual Report on thebusiness and operations of the Company along with the Audited Annual Financial Statementsand the Auditors’ Report thereon for the financial year ended 31st March 2019.

1. FINANCIAL HIGHLIGHTS:

PARTICULARS 31.03.2019 31.03.2018
Revenue from Operation (Net) 1468294873.92 1195482302.16
Other Income 9474258.00 2842238.42
Total Revenue Income 1477769131.92 1198324540.58
Expenditure 1376053062.83 1117296428.94
Profit Before Tax 101716069.09 81028111.64
Profit After Tax 73418658.67 59032562.64

2. DIVINDEND:

In view of the planned business growth your Directors deem it proper to preserve theresources of the Company for its activities and therefore do not propose any dividend forthe Financial Year ended 31st March 2019.

3. SHARE CAPITAL:

Authorized Capital: During the period under review the authorized capital of theCompany has been increased from Rs. 112000000/- consisting of 1120000 equity sharesof Rs. 100/- each* to Rs. 175000000/- consisting of 17500000 equity shares of Rs.10/- each.

Issued Subscribed and Paid-up Capital: During the year under review the IssuedSubscribed and Paid up Share Capital of the Company has been enhanced fromRs.111398400/- consisting of 1113984 equity shares of Rs. 100/- each* to Rs.151198400/- consisting of 15119840 equity shares of Rs. 10/- each.

*Note: During the period under review Company has subdivided its authorized issuedsubscribed and paid-up share capital from the face value of Rs. 100/- each to face valueof Rs. 10/- each.

DEPOSITORY SYSTEM:

All the 15119840 Equity Shares of the Company are in dematerialized form as on 31stMarch 2019.

LISTING:

During the year 2018-19 our Company came up with public issue of 3980000 equityshares of face value of Rs.10/- each fully paid up for cash at an issue price of Rs. 65/-per equity share (including a share premium of Rs. 55/- per equity share) aggregating toRs. 25.87 Crores. The Company has received an in-principle approval letter dated August31st 2018 from National Stock Exchange of India Limited (NSE) and finally our Company gotlisted on Emerge Platform of National Stock Exchange of India Limited (NSE Emerge) on 1stOctober 2018.

4. TRANSFER TO RESERVES:

The Company proposes to transfer a sum of Rs.73418658.67/- to General Reserve duringthe financial year ended 31st March 2019.

5. MEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES:

During the financial year ended 31st March 2019 14 (Fourteen) Meetings of the Boardof Directors of the Company was held. The intervening gap between two meetings was withinthe period prescribed by the Companies Act 2013.

Name of Director Total Meetings entitled to attend during the Financial Year 2018-19 Number of meetings attended by the Directors during the Financial Year 2018-19 % of attendance to the meetings held in Financial Year 2018-19
Mr. Deepak Suresh Chaudhari 14 14 100
Mrs. Bharti Deepak Chaudhari 14 14 100
Mr. Chandrakant Bhaskar Rane 14 14 100
Mr. Devendra Sudhakar Rane 14 14 100
Mr. Narendra Daulatrao Wagh 12 12 100
Mr. Subhash Narayan Patil 9 5 55.55
Mr. Sanjay Padmakar Pawde 9 8 88.88
Mr. Saurabh Shrikant Malpani 6 2 33.33

COMMITTEE:

i. Audit Committee:

Pursuant to provisions of the Section 177 of the Companies Act 2013 and regulation 18of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Board hasconstituted an Audit Committee (“Audit Committee”). The Chairman of theCommittee shall attend the Annual General Meeting of our Company to furnish clarificationsto the shareholders in any matter relating to accounts.

ii. Nomination and Remuneration Committee:

Pursuant to the provisions of the Section 178 of the Companies Act 2013 and also tocomply with Regulations of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Board has constituted Nomination and Remuneration Committee(“Nomination and Remuneration Committee”)

iii. Corporate Social Responsibility Committee:

Pursuant to the provisions of the Section 135 of the Companies Act 2013 and also tocomply with Regulations of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Board has constituted Corporate Social Responsibility Committee(“CSR Committee”).

iv. Stakeholders Relationship Committee:

Pursuant to the provisions of the Section 178 of the Companies Act 2013 andRegulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015the Board has constituted a Stakeholders Relationship Committee (“StakeholdersRelationship Committee”)

6. THE SUMMARY OF OPERATION IS AS UNDER: -

During the year under review your company has achieved total revenue from operationsof Rs. 1477769131.92/- as compared to Rs. 1198324540.58/- in the previous year.After providing for taxes and other adjustments Profit after tax is Rs.73418658.67/-as compared to Rs. 59032562.64/- during the previous year.

7. MATERIAL CHANGES:

During the period under review following material changes has been occurred:

• The Company has subdivided its Authorized Issued Subscribed and Paid-upCapital from the face value of Rs. 100/- each to face value Rs. 10/- each videmembers’ resolution passed dated 10th April 2018.

• The Company has changed its name from Spectrum Electrical Component PrivateLimited to Spectrum Electrical Industries Private Limited and converted into PublicLimited Company due to this the name of the Company has been changed from SpectrumElectrical Industries Private Limited to Spectrum Electrical Industries Limited videmembers’ resolution passed dated 30th May 2018.

• The Company has altered its Memorandum of Association by increasing AuthorizedShare Capital from Rs. 112000000/- consisting of 11200000 equity shares of Rs. 10/-each to Rs. 175000000/- consisting of 17500000 equity shares of Rs. 10/- each videmembers’ resolution passed dated 30th June 2018.

• Further Memorandum of Association of the Company has been altered by adding newbusiness of manufacturing of printed corrugated boxes by passing members’ resolutionon 29th March 2019.

• The Company has issued and allotted 3980000 equity shares to the public by wayof Initial Public Offerings (IPO) at the issue price of Rs. 65/- each (including premiumof Rs. 55/- per share) by passing Board of Directors’ and members’ resolutiondated 2nd July 2018 & 10th July 2018 respectively.

• The Company has listed its Securities on Emerge platform of National StockExchange of India Limited (NSE SME Emerge) on 01st October 2018.

The Company has set up new plant for carrying Silver plating activities at Gat No. 130Umale Jalgaon Maharashtra (India) and manufacturing of printed corrugated box started atV-195 MIDC Area Ajanta Road Jalgaon Maharashtra (India).

8. LOANS GUARANTEES AND INVESTMENTS:

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.

9. EXTRACT OF ANNUAL RETURN:

The extract of Annual Return in form MGT-9 as required under Section 92 of theCompanies Act 2013 for the financial year ended 31st March 2019 shall be published oncompany’s website i.e. “www.spectrum-india.com”.

10. CHANGE IN NATURE OF BUSINESS IF ANY:

There is no change in the nature of business of the Company during the year.

11. VIGIL MECHANISM:

Pursuant to Section 177 of the Companies Act 2013 read with Rule 7 of the Companies(Meetings of Board and its Powers) Rules 2014 and Regulations of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Vigil Mechanism andWhistle-Blower Policy is prepared and adopted by Board of Directors of the Company.

12. RELATED PARTY TRANSACTIONS:

All related party transactions that were entered into during the Financial Year ended31st March 2019 were on an arm’s length basis and were in the ordinary course ofbusiness. Therefore the provisions of Section 188 of the Companies Act 2013 were notattracted. Further there are no materially significant related party transactions duringthe year under review made by the Company with promoters Directors Key ManagerialPersonnel or other designated persons which may have a potential conflict with theinterest of the Company at large. Disclosure in Form AOC-2 is attached herewith asAnnexure I which forms part of this report.

13. DEPOSITS FROM PUBLIC:

The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet.

14. DETAILS OF SUBSIDIARY JOINT VENTURE OR ASSOCIATE COMPANIES:

During the year under review our Company does not have any subsidiaries or jointventures or associate Companies as defined under Companies Act 2013 therefore no suchinformation is required to be furnished.

15. AUDITOR:

Pursuant to the provisions of Section 139 of the Companies Act 2013 and the rulesframed there under and Listing Regulations of Securities and Exchange Board of India Act1992 as amended from time to time or any other law for the time being in force (includingany statutory modification or amendment or re-enactment thereof for the time being inforce) M/s. JPL & Associates Chartered Accountants J algaon (FRN-132748W) who wereappointed as Statutory Auditors of the Company in the Extra Ordinary General Meeting ofthe Company to fill the casual vacancy caused due to resignation of M/s. S. D. Chopde& Co. Chartered Accountants Jalgaon (FRN-101577W) for the Financial year 2018-19 tohold the office till the conclusion of ensuing Annual General Meeting of the Company.

Your directors recommend appointment of M/s. J PL & Associates CharteredAccountants Jalgaon (FRN-132748W) as Statutory Auditor of the company from the conclusionof ensuing AGM till the conclusion of AGM to be held in the year 2024 i.e. for a period offive years from 2019-20 to 2023-24

16. AUDITORS REPORT:

The Auditors Report on the Audited Financial Statement of the Company for the yearended 31st March 2019 does not contain any qualification reservation or adverse remarkso need not require any explanation or comment.

SECRETARIAL AUDITOR:

Pursuant to the provisions of Section 204 of the Companies Act 2013 Yuti NagarkarCompany Secretary (Membership No. F9317 and C.P. No. 10802) having Office Address: 154Pratap Apartment Vivekanand Nagar Behind Sai Mandir Wardha Road Nagpur 440015 has beenappointed as the Secretarial Auditor of the Company to conduct the Secretarial Audit forthe financial year 2018-19. The Secretarial Audit Report forms part of Annual Report andit is annexed as Annexure-II.

The Secretarial Audit Report for the Financial Year ended on 31st March 2019 issued bySecretarial Auditor do not contain any qualification reservation or adverse remark soneed not require any explanation or comment.

INTERNAL AUDITOR:

Pursuant to the provision of Section 138 of the Companies Act 2013 the Company hasappointed M/s. S. D. Chopde & Co. Chartered Accountants (FRN: 101577W) as an InternalAuditor of the Company and they will perform the duties of internal auditors of theCompany and their report will be reviewed by the audit committee from time to time.

COST AUDITOR:

Pursuant to the provision of Section 148 of the Companies Act 2013 the Company hasappointed M/s. SNM & Associates Cost Accountants (FRN: 000210) as Cost Auditor of theCompany and they will perform the duties of Cost Auditors of the Company and their reportwill be reviewed by the audit committee from time to time.

17. DIRECTOR’S RESPONSIBILITY STATEMENT:

Pursuant to clause (c) of sub-section (3) of Section 134 of the Companies Act 2013the Directors confirm that: -

i. in the preparation of the annual accounts for the financial year 2018-19 theapplicable accounting standards have been followed and there are no material departures;

ii. the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the Company for the financial year;

iii. the Directors had taken proper and sufficient care to the best of their knowledgeand ability for the maintenance of adequate accounting records in accordance with theprovisions of the Act. They confirm that there are adequate systems and controls forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

iv. the Directors had prepared the annual accounts on a going concern basis;

v. they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and operating properly; and

vi. the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

18. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING &FOREIGN EXCHANGE EARNING & OUTGO:

The information pertaining to conservation of energy technology absorption Foreignexchange Earnings and outgo as required under Section 134 (3) (m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished in Annexure-III and is annexed to this report.

19. RISK MANAGEMENT:

Risks are events situations or circumstances which may lead to negative consequenceson the Company's businesses. Risk management is a structured approach to manageuncertainty and risk Management is the process of identification assessment andprioritization of risks followed by c oordinated efforts to minimize monitor andmitigate/control the probability and/or impact of unfortunate events or to maximize therealization of opportunities. The Company has laid down a comprehensive Risk Assessmentand Minimization Procedure which is reviewed by the Board from time to time. Theseprocedures are reviewed to ensure that executive management controls risk through means ofa properly defined framework. The major risks have been identified by the Company and itsmitigation process/measures have been formulated in the areas such as business projectexecution event financial human environment and statutory compliance.

20. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS:

The Company maintains a system of Internal Control including suitable monitoringprocedures. The Internal Control System is supplemented by an exhaustive programme ofinternal audits and said audits are then reviewed by Audit Committee from time to time.

The Board of Directors of the Company have adopted various policies such as RelatedParty Transactions Policy Whistle Blower Policy Policy to determine the materiality ofevent and such other procedures for ensuring the orderly and efficient conduct of itsbusiness for safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information.

21. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP):

During the period under review in accordance with the provisions of Companies Act2013 and Article of Association of the Company Mr. Deepak Chaudhari (DIN: 00538753)retired by rotation at the Annual General Meeting held in the year 2018 and being eligibleoffer himself for re-appointment and he was re-appointed by the shareholders as a Directorof the Company and his term is liable to retire by rotation.

Mrs. Sarita Zamwar resigned from the post of Company Secretary and Compliance Officerthe company with effect from 12th February 2019. The Board wishes to place on records herappreciation for the valuable contribution made by her to the Board and the Company.

Details of the Directors and Key Managerial Personnel who were appointed during thereporting period:

Sr. No. Name of Director’s and KMPs Nature of Change Date of appointment
1 Mr. Narendra Wagh Appointed as a Non -Executive Independent Director 02/05/2018
2 Mr. Subhash Patil Appointed as a Non-Executive Independent Director 01/07/2018
3 Mr. Sanjay Pawde Appointed as a Non-Executive Independent Director 01/07/2018
4 Mr. Saurabh Malpani Appointed as a Non-Executive Independent Director 06/08/2018
5 Mr. Pankaj Rote Appointed as a Chief Financial Officer 01/07/2018
6 Mr. Rahul Lavane Appointed as Company Secretary and Compliance Officer 28/02/2019

22. DECLARATION FROM INDEPENDENT DIRECTORS:

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed under the CompaniesAct 2013 and rules made thereunder and relevant regulation of SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015.

23. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS COURTS ANDTRIBUNALS:

No significant and material order has been passed by the regulators courts tribunalsimpacting the going concern status and Company’s operations in future.

24. PARTICULARS OF EMPLOYEE:

The information in accordance with the provisions of Section 197 of the Companies Act2013 read with rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is annexed Annexure-IV

25. CORPORATE SOCIAL RESPONSIBILITY:

The Report on CSR activities for the financial year 2018-19 is enclosed as Annexure-V.

26. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND:

Our Company does not have any funds lying unpaid or unclaimed for a period of sevenyears. Therefore there were no funds required to be transferred to Investor Education andProtection Fund (IEPF).

27. HUMAN RESOURCE DEVELOPMENT:

Human resources are the most valued assets of the Company. They work individually andcollectively contributing to the achievement of the objectives of the business. Therelation between the employees and the Company remained cordial throughout the year. OurCompany's corporate culture and the vision and values helps to unite the workforce andprovide standards for how our Company conducts the business. The Company has 373 (ThreeHundred and Seventy Three) permanent employees on the rolls of Company as on 31st March2019.

28. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE:

During the year under review there were no cases filed pursuant to the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013. TheCompany has constituted committee called "Internal Complaints Committee" toensure safe workplace environment which covers all employees whether permanentcontractual trainees temporary etc.

29. CODE OF CONDUCT:

According to Regulation 17 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Code of Conduct of the Company has been approved andadopted by the Board of Directors of the Company. All Board members and senior managementpersonnel have affirmed the compliance with the code.

30. PREVENTION OF INSIDER TRADING:

As required under the provisions of SEBI (PIT) Regulations 2015 the Board ofDirectors has adopted a code of conduct for prevention of Insider Trading during the year2018-19. The Code of Conduct is applicable to all the directors and such identifiedemployees of the Company as well as who are expected to have access to unpublished pricesensitive information related to the Company. The Code lays down guidelines which advisesthem on procedures to be followed and disclosures to be made while dealing with s haresof Spectrum Electrical Industries Limited and c autions them on consequences ofviolations.

31. POLICY FOR PRESERVATION OF DOCUMENTS:

In accordance with the above Regulation 9 of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 the Policy forpreservation of documents (The Policy) has been framed and adopted by the Board ofDirectors of the Company in their Board Meeting to aid the employees in handling theDocuments efficiently. This Policy not only covers the various aspects on preservation ofthe Documents but also the safe disposal/destruction of the Documents.

32. MANAGEMENT DISCUSSION AND ANALYSIS:

The Management Discussion and Analysis forms part of this Annual report is annexed withAnnexure - VI.

33. IPO PROCEED UTILIZATION:

The details of IPO proceeds utilization are annexed as Annexure VII

34. CORPORATE GOVERNANCE:

The Company being listed on the SME Platform of National Stock Exchange Limited isexempted from provisions of Corporate Governance as per Regulation 15 of the SEBI (LODR)Regulations 2015. Hence no Corporate Governance Report is required to be disclosed withAnnual Report. It is pertinent to mention that the Company follows majority of theprovisions of the corporate governance voluntarily.

35. DISCLOSURE FOR FRAUDS AGAINST THE COMPANY:

In terms of the provisions of section 134 (3) (ca) of the Companies Act 2013 therewere no frauds committed against the Company and persons who are reportable under section141(12) by the Auditors to the Central Government. Also there were no non-reportablefrauds during the year 2018-19.

36. UNSECURED LOAN:

Pursuant to Rule 2(c) (viii) of Companies (Acceptance of Deposits) Rule 2014 thecompany has accepted unsecured loan form Directors the details of which are given below:

Name of Director Unsecure Loan accepted during the year
Mr. Deepak Chaudhari Rs. 34424500/-
Mr. Devendra Rane Rs. 4504585/-

37. PERFORMANCE EVALUATION OF THE BOARD:

Pursuant to the provisions of the Companies Act 2013 and Rules made thereunder theBoard has carried the evaluation of its own performance performance of IndividualDirectors Board Committees including the Chairman of the Board on the basis ofattendance contribution and various criteria as recommended by the Nomination andRemuneration Committee of the Company. The evaluation of the working of the Board itscommittee experience and expertise performance of specific duties and obligations etc.The Directors expressed their satisfaction with the evaluation process and outcome.

The performance of each of the non-independent directors was also evaluated by theindependent directors at the separate meeting held of the Independent Directors of theCompany.

38. ACKNOWLEDGEMENT:

The Directors wish to place on record appreciation and gratitude for all theco-operation extended by v arious Government Agencies/Departments Bankers ConsultantsBusiness Associates and Shareholders Vendors Customers etc. The Directors also recordappreciation for the dedicated services rendered by all the Executives Staff &Workers of the Company at all levels for their valuable contribution in the working ofthe Company.

For and on behalf of Board of Directors of
FOR SPECTRUM ELECTRICAL INDUSTRIES LIMITED
Sd/- Sd/-
DEEPAK CHAUDHARI BHARTI CHAUDHARI
MANAGING DIRECTOR WHOLE TIME DIRECTOR
DIN: 00538753 DIN: 02759526
ADDRESS: 39/A NEAR LIONS ADDRESS: 39/A NEAR LIONS
CLUB HALL ADARSH NAGAR CLUB HALL ADARSH NAGAR
JALGAON 425001. JALGAON 425001.
Date: 4th September 2019
Place: Jalgaon

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