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Swan Energy Ltd.

BSE: 503310 Sector: Industrials
NSE: SWANENERGY ISIN Code: INE665A01038
BSE 00:00 | 23 Mar 216.25 -7.40
(-3.31%)
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NSE 00:00 | 23 Mar 216.10 -7.50
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OPEN 222.00
PREVIOUS CLOSE 223.65
VOLUME 62736
52-Week high 379.00
52-Week low 174.10
P/E 527.44
Mkt Cap.(Rs cr) 5,707
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 222.00
CLOSE 223.65
VOLUME 62736
52-Week high 379.00
52-Week low 174.10
P/E 527.44
Mkt Cap.(Rs cr) 5,707
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Swan Energy Ltd. (SWANENERGY) - Director Report

Company director report

1) Your directors are pleased to present the One Hundred and Fourteenth (114th)Annual Report together with the Audited Financial Statements (Standalone &Consolidated) for the year ended 31st March 2022.

2) Financial Results

' (Rs. in lakhs)

Particulars

Standalone

Consolidated

For the year ended on 31.3.2022 For the year ended on 31.3.2021 For the year ended on 31.3.2022 For the year ended on 31.3.2021
Profit before interest & depreciation 2845.32 2170.49 7518.72 7165.15
Less:Interest 1764.09 1376.90 18914.94 10803.55
: Depreciation 600.39 553.04 7026.65 4166.38
Profit before Tax 480.84 240.55 (18422.87) (7804.78)
Less: Provision for Taxation 163.04 166.79 (2633.58) (943.35)
Net Profit for the year 317.80 73.76 (15789.29) (6861.43)
Other Comprehensive Income for the year 11.32 14.11 11.32 14.11
Total Comprehensive Income for the year 329.12 87.87 (15777.97) (6847.32)
Attributable to shareholders of the company - - (8742.61) (3809.39)
Non-Controlling Interest - - (7035.36) (3037.93)
Add: Amount of Profit & Loss Account brought forward 19597.90 19754.29 10944.75 14998.40
Opening balance of new subsidiaries - - (4.96) -
Opening Balance of Strike-off subsidiaries - - 16.25 -
Amount available for Appropriation 19927.02 19842.16 2213.43 11189.01
Less: Appropriations: Transfer to General Reserve
Dividend on Equity shares paid * 244.26 244.26 244.26 244.26
Tax on dividend - - - -
Balance of Profit & Loss Account transferred to Balance sheet 19682.76 19597.90 1969.17 10944.75

* Pursuant to applicable provisions of Indian Accounting Standards the dividend amountmentioned in the columns for 2021 and2022 represents the dividend amount paid forthefinancial years 2020 and2021 respectively.

While the outbreak of the COVID-19 pandemic adversely impacted sectorial performanceduring FY 202021 and partly in FY 2021-22 as well high vaccination coverage has helpedthe market to recover and gain pace. The pandemic followed by the ongoing war have bothbeen economic dampeners that have divided the world and contributed to inflationarypressures and rising commodity prices.

In spite of the headwinds India is well-poised for steady progress and is increasinglymaking rapid strides with numerous global names considering our nation as a worthymanufacturing contender as opposed to China. India's recent entry in Indo-Pacific EconomicFramework (IPEF) along with 14 member nations has been a pivotal move pegged to boost ourbilateral trade relationships and propel the region as an engine for global economicgrowth.

The Government is expected to announce its new textile policy with an ambitious targetof achieving 20 per cent share of the global textile trade and helping the domesticindustry attain a size of $650 billion by 2024-25 by focusing on investments skilldevelopment and labour law reforms. The policy blueprint termed the 'Vision Strategy andAction Plan' for the textiles and apparel industry lays thrust upon diversification ofexports through new products and markets along with increasing value addition andpromoting innovation and R&D activities.

The textile industry is expected to attract investment of about $120 billion by 2024-25and create about 35 million additional jobs in the process. Exports are also expected torise from the current $39 billion to $300 billion by 2024-25. The action plan notes thatattracting the required investment entails ready availability of developed land withadequate infrastructure skilled manpower and easy connectivity to ports along withcreation of new mega textile parks lowering the cost of production and logistics andencouraging new entrants through start-ups as well as FDI.

Increased desire to pursue home ownership is resulting in revival of demand. We seemarked improvement in the prospects of real estate as volume and pricing is witnessing anuptick across geographies. While commodity price inflation is a short-term risk webelieve the improving dynamics of real estate will offset the headwind from rise incommodity prices.

A consolidation in the residential real estate sector is expected to continue leadingto an increase in the market share of branded organized players such as your Company.Given the pace of urbanization low interest rates and rising per capita disposableincomes your Company remains optimistic about the longterm prospects in real estate.Operational momentum for your company is likely to be sustained by its healthy BalanceSheet and robust project pipeline. Your Company is poised for a high growth trajectorywith a strong brand pan-India presence demonstrated track record and robust marketingcapabilities.

On standalone basis revenue from operations for the financial year 2021-22 was Rs.40871.55 lakhs as compared to Rs. 25259.26 lakhs in the previous year. Earnings beforeinterest tax depreciation and amortization (EBITDA) for the year was Rs. 2845.32 lakhsas compared to Rs. 2170.49 lakhs in the previous year. Profit after Tax (PAT) for theyear was Rs. 317.80 lakhs as compared to Rs. 73.76 lakhs in the previous year.

On consolidation basis revenue from operations for the financial year 2021-22 was Rs.48719.96 lakhs as compared to Rs. 32046.88 lakhs in the previous year. Earnings beforeinterest tax depreciation and amortization (EBITDA) for the year was Rs. 7518.72 lakhsas compared to Rs. 7165.15 lakhs in the previous year. Loss after Tax for the year wasRs. 15789.29 lakhs as compared to Rs. 6861.43 lakhs in the previous year.

3) Review of Operations

A LNG Port Project:

India's first Greenfield LNG Port Terminal with the total capacity of 10 MMTPA atJafrabad Port in Amreli district of Gujarat is being set up by your Company through itstwo subsidiaries namely SWAN LNG PRIVATE LIMITED (SLPL) and TRIUMPH OFFSHORE PRIVATELIMITED (TOPL). The progress of the project is summarized under:

I - SLPL:

The first phase of 5 MMTPA capacity with Floating Storage and Regasification Unit("FSRU") is under implementation. The Project comprises of development of LNGPort facilities utilizing a FSRU for LNG receipt storage regasification and send-outhaving capacity of 5 MMTPA of LNG. The Project was awarded under 'Swiss Challenge' routeand is being developed on PPP basis under the Concession Agreement executed with GujaratMaritime Board ("GMB") and Government of Gujarat ("GoG"). Your company(SEL) is the Lead Promoter of SLPL and holds 63% equity stake in SLPL. As per theShareholders Agreement (SHA) executed on 17th October 2017 Government ofGujarat nominated entities hold 26% stake i.e. 15% by GMB and 11% by Gujarat StatePetronet Limited (GSPL) while balance 11% equity is being held by FSRU Venture India OnePrivate Limited (FVIOPL) the Indian subsidiary company of Mitsui OSK Lines (MOL) Japan.Moreover MOL is also the technical partner of the project.

The Project shall be operated on tolling business model and out of 5 MMTPA capacitythe Company has already executed regasification agreements for reservation of capacityaggregating to 4.5 MMTPA on firm basis for a period of 20 years with State-owned GujaratState Petroleum Corporation Ltd. (GSPC) [1.5 MMTPA] and Central Public Sector Undertakings(PSUs) namely Bharat Petroleum Corporation Ltd.(BPCL) Indian Oil Corporation Ltd. (IOCL)and Oil and Natural Gas Corporation Ltd. (ONGC) [1 MMTPA each].

The execution of firm regasificati'on agreement for reservation of 90% capacity withState Government PSU including Concession Agreement with GMB & GoG for 30 years(extendable to further 20 years) makes the future of the project very robust. Moreoverall the necessary approvals and EPC Contracts required for project implementation are inplace and the construction is progressing well.

All the shareholders i.e. SEL GMB GSPL and FVIOPL have contributed their share ofequity as per the SHA agreement. Additionally Swan Energy Limited has infused fundsthrough allotment of Preference Shares as per the requirement of the project.

The Project site of the company was significantly damaged due to extremely severecyclone "Tauktae" which crossed Jafrabad on 17th May 2021. Thoughcyclone "Tauktae" was extremely severe and had an impact on the facilities whichwere still under construction it was ascertained post assessment by EPC contractors thatthe damage is very much repairable and has been restored.

On Project implementation work the Company has achieved an overall 67.58% progress onthe construction of Port Project upto 31st March 2022.

Below is the progress on various EPC packages awarded by the Company:

Description Progress with 2200m breakwater
Overall Project Progress Status 67.58%
Breakwater Groyne & Shore Protection Work 49.32%
Jettes & Tug berth 71.19%
Topside & Utilities related to Jetty-1 Work 99.70%
Dredging & R1 Area Reclamation 77.00%
Balance Infra Works 21.55%

The Company has successfully achieved the Financial Closure ("FC") with StateBank of India (SBI) as lead Bank and the Company has already received the term loandisbursement aggregating to Rs. 1810.88 Crores from various banks till 31stMarch 2022.

II - TOPL:

Floating Storage and Regasification Unit (FSRU):

On the FSRU front which is integral part of Swan's LNG Port Project it is noteworthythat Triumph Offshore Private Limited (TOPL) wherein Swan Energy Limited and IndianFarmers Fertiliser Cooperative (IFFCO) is holding 51% and 49% stake respectively hassuccessfully taken delivery of FSRU "Vasant 1" on 29th September2020. Post-delivery of FSRU it was put on charter hire with charterer for interimutilization of FSRU as LNG Carrier till Jafrabad LNG port is ready. The deployment of FSRUhas been beneficial for project as it led to revenue generation and saving of parkingcharges which reduced the project cost.

The Company has entered into a Bareboat Charter (BBC) Agreement with TOPL to charterthe FSRU to SLPL on a long-term lease for a period of 20 years.

TOPL also has successfully achieved the Financial Closure ("FC") with StateBank of India (SBI) as lead Bank and the Company has already received the term loandisbursement aggregating to Rs. 1513.79 Crores from various banks till 31stMarch 2022.

B REAL ESTATE

The status of the properties owned through wholly owned subsidiaries (WOS) issummarized as under:

I. Cardinal Energy & Infrastructure Pvt Ltd (CEIPL):

i. Sai Tech Park Bangalore - comprising 2.96 lakhs sq. ft located at the IT park ofWhitefield Bangalore. Leased out to Harman Connected Services (Samsung Group) at anannual rent of Rs. 13.57 Crores.

ii. Technova Park Hyderabad - comprising 2.92 lakhs sq. ft located at Gachibowli areaof Hyderabad. Leased out to an Indian subsidiary of Google at an annual rent of Rs. 16.10Crores.

iii. BTM Bengaluru - A land admeasuring 0.75 acre to be developed as a residentialproperty.

iv. Yeswantpur area Bengaluru - A residential project of 22 story tower having 3wings (A B C) is under construction under Joint Development Agreement (JDA) with theChigateri Family (land owners). Construction is completed for Tower A (up to 22ndfloor) Tower B (up to 10th floor) and Tower C (up to 11th floor).Total saleable area will be 3.22 lakh sq. ft. and our share will be 1.9 lakhs sq. ft.i.e. 60% of total saleable area. Decent return is expected once Project gets completed inJune 2023.

II. Pegasus Ventures Private Limited (PVPL):

There is no major development during the year on the land parcels at BengaluruMangalore Mysore and Chennai. The company is trying its best to explore all feasibleoptions for the development / monetization of the same in due course of time.

C Textile

During the current financial year the Process House of the Company at Ahmedabad hasposted a profit before tax of Rs. 490.29 Lakhs as against loss of Rs. 126.13 Lakhs for theprevious year.

4) Material Changes and Commitments:

The status of Corporate Guarantees issued and outstanding till date is as under.

i. To Punjab National Bank for Performance Bank Guarantee of Rs. 72.57 Crore providedby SLPL to Gujarat Maritime Board (GMB);

ii. To SBI Capital Trustee for Term loan of Rs. 3152.00 Crore sanctioned to SLPL bya consortium led by SBI;

iii. To SBI Capital Trustee for Term loan of Rs. 1802.87 Crore sanctioned to TOPLby a consortium led by SBI;

iv. To HDFC Limited for Term Loan of Rs. 98.00 Crore sanctioned to CEIPL;

v. To Union Bank of India for Performance Bank Guarantee of Rs. 75.00 Crore forshipyard business provided by Hazel Infra Limited to IDBI Bank acting on behalf ofCommittee of Creditors of Reliance Naval and Engineering Limited.

5) Dividend & Reserve

Your directors have recommended payment of dividend @ Re. 0.10 per Equity Share (10%)on 263917000 Equity Shares of Re. 1/- each for the year ended 31st March 2022 subjectto approval of the shareholders at the ensuing 114th AGM.

The company has not transferred any amount to the General Reserve during the year.

6) Deposits:

The Company has not accepted any deposits from public during the year under review.

7) Finance:

Your Company has been regular in meeting its obligation towards payment ofPrincipal/Interest to the Banks and other institutions.

During the year under review the Company has issued 19660000 equity shares of Re.1/- each at Rs. 162/- each on preferential basis. The paid-up Equity share capital as on31st March 2022 was Rs. 2639.17 lakhs. Company has neither issued shares withdifferential voting rights nor has granted stock opti'ons/sweat equity.

8) Statutory Disclosures:

8.1 Management Discussion and Analysis:

As required under Regulation 34(2)(e) of the SEBI (LODR) Regulations 2015 aManagement Discussion and Analysis is annexed to this Report - Annexure - A.

8.2 Corporate Governance

As required under Regulation 17(7) of the SEBI (LODR) Regulations 2015 a report onthe 'Corporate Governance' together with a certificate of statutory auditors confirmingcompliance of the conditions of the Corporate Governance is annexed to this report -Annexure B.

Further in compliance of Regulation 17(5) of the SEBI (LODR) Regulations 2015 yourCompany has adopted a 'Code of Conduct and Ethics' for its Directors and SeniorExecutives.

8.3 Annual Return:

Pursuant to provisions of Section 134 and 92 of the Companies Act 2013 draft AnnualReturn is placed on the website of the Company www.swan.co.in

8.4 Conservation of energy technology absorption and foreign exchange earnings andoutgo:

Information under Section 134 (3) (m) of the Companies Act 2013 ('the Act') read withRule 8 of the Companies (Accounts) Rules 2014 is annexed to this Report - Annexure C.

8.5 Corporate Social Responsibility (CSR) Policy:

The Report on CSR is annexed to this Report - Annexure - D.

8.6 Particulars of Employees:

Pursuant to provisions of Section 136 (1) of the Act and as advised the statementcontaining particulars of employees under Section 197 (12) of Act read with Rule 5 ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 will beavailable for inspection at the registered office of the Company and will be madeavailable to the shareholders on request.

8.7 Number of Board Meetings:

During the year under review 10 (Ten) Board Meetings were convened and held. Therequired details are given in the Corporate Governance Report forming part of this report.

8.8 Directors Responsibility Statement:

Pursuant to Section 134 (3) (c) of the Act the Directors confirm that:

(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed;

(b) appropriate accounting policies have been selected and applied consistently.Judgments and estimates that are reasonable and prudent have been made so as to give atrue and fair view of the state of affairs of the company as on 31st March2022 and of the profit of the Company for that period;

(c) proper and sufficient care has been taken for the maintenance of adequateaccounting

records in accordance with the provisions of the Act for safeguarding the assets of thecompany and for preventing and detecting fraud and other irregularities;

(d) the Annual accounts have been prepared on a going concern basis;

(e) internal financial controls have been laid down and followed by the company andthat such controls are adequate and are operating effectively;

(f) proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

8.9 Statement on declaration given by independent Directors:

The Independent Directors of the Company have submitted their Declaration ofIndependence as required under the provisions of Section 149(7) of the Act stating thatthey meet the criteria of independence as provided in section 149(6) of the Act.

8.10 Disclosure regarding Company's policies under the Companies Act 2013:

i Remuneration and Nomination Policy

The Board of Directors has framed a policy which lays down criteria forselection/appointment and framework in relation to remuneration of Directors KeyManagerial Personnel (KMPs) and Senior Management of the Company.

ii Whistle Blower Policy

The Company has a Whistle Blower policy to deal with instances of fraud andmismanagement which is posted on the website of the Company.

iii Risk Management Policy

The Company has a structured Risk Management policy. The Risk Management process isdesigned to safeguard the organization from various risks through adequate and timelyactions. It is designed to anticipate evaluate and mitigate risks in order to minimizeits impact on the business. The potential risks are integrated with the management processsuch that they receive the necessary consideration during decision making.

iv Dividend Distribution Policy (DDP)

The Report on DDP is annexed to this Report - Annexure - E and is available on websiteof the company. www.swan.co.in

v Business Responsibility Report (BRR)

The Report on BRR is annexed to this Report - Annexure - F and is available on websiteof the company. www.swan.co.in

8.11 Particulars of loans Guarantees or investments by Company:

Details required to be disclosed pursuant to the provisions of Section 186 of the Actare disclosed in the notes to Financial Statements.

8.12 Related Party Transactions:

All transactions entered with Related Parties for the year under review were in theordinary course of business and do not have any potential conflict with the interest ofthe company at large. The details of the transactions with the related parties aredisclosed in the notes to Financial Statements.

8.13 Subsidiary Company:

A statement in Form AOC - 1 pursuant to Section 129(3) of the Act relating tosubsidiary companies is attached to the Accounts. The financial statements and relateddocuments of the Subsidiary companies shall be kept open for inspection at the registeredoffice of the Company.

8.14 Significant and material orders passed by the Regulators or courts:

There were no significant and material orders passed by the Regulators or Courts orTribunals during the year under review which would impact the going concern status of theCompany and its future operations.

8.15 Directors and KMP:

During the year under review the Company has appointed Mr. Rohinton E. Shroff (DIN:00234712) as an Additional Independent Director of the Company w.e.f 14thMarch 2022.

At the ensuing Annual General Meeting Mr. Navinbhai Dave (DIN: 01787259) retires byrotation and being eligible offers himself for re-appointment.

8.16 Performance evaluation of the Board:

Pursuant to the Section 134 of the Act and SEBI (LODR) Regulations 2015 the Board hascarried out an annual performance evaluation of its own performance the Directorsindividually as well as the evaluation of the working of all the Committees of the Board.

8.17 Prevention of Sexual Harassment of Women at Workplace:

The Company has constituted a committee in compliance of the provisions of "SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013".

However no case was reported to the Committee during the year under review.

8.18 Internal Financial Controls:

Your Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weaknesses in the design or operation were observed.

9 Auditors:

9.1 Statutory Audit

M/s N. N. Jambusaria & Co. Chartered Accountants Mumbai (Registration No.104030W) was appointed as statutory auditors of the Company at the 109th AGMheld on September 21 2017 for a term of five consecutive years and their tenure asStatutory auditors of the Company is ending with conclusion of the 114th AGM ofthe Company.

Pursuant to the recommendation of the Audit Committee the Board recommends toreappoint M/s N. N. Jambusaria & Co. Chartered Accountants Mumbai (Firm RegistrationNo. 104030W) as statutory auditor of the Company for a second term of five years from theconclusion of this till the conclusion of the 119th AGM of the Company. Companyhave received consent and eligibility certificate from M/s N. N. Jambusaria & Co. fortheir reappointment as a Statutory Auditors of your Company.

9.2 Cost Audit

Pursuant to the recommendation of the Audit Committee the Board has appointed M/s V.H. Shah & Co. Cost Accountants (Firm Registration No. 100257) as the Cost Auditor forthe financial year ending on 31st March 2023 at a remuneration of Rs.75000/- (Rupees Seventy-Five thousand only) plus applicable taxes Company have receivedconsent and eligibility certificate from M/s V. H. Shah & Co. to act as a CostAuditors of your Company. The remuneration payable is required to be ratified at theensuing 114th AGM.

9.3 Secretarial Audit

Pursuant to the recommendation of the Audit Committee The Board has appointed M/sJignesh M. Pandya & Co. (CP No. 7318) a practising Company Secretary to undertakethe Secretarial Audit of the Company for the year ended 31st March 2022.

Secretarial Audit Report of the Company and its material subsidiaries for the yearended 31st march 2022 are annexed to this Report as Annexure - G.

10 Auditors' Report:

Report of the auditors read with the notes to the financial statements isself-explanatory and need no elaboration.

11 Fraud Reporting:

During the year under review the Statutory Auditors Cost Auditors and SecretarialAuditors have not reported any instances of frauds committed in the Company by itsofficers or employees to the Audit Committee under Section 143(12) of the Companies Actdetails of which needs to be mentioned in this Report.

12 Risk Management:

The Board of Directors of the Company has formed a Risk Management Committee to frameimplement and monitor the risk management plan for the Company. The Committee isresponsible for monitoring and reviewing the risk management plan and ensuring itseffectiveness. The Audit Committee has additional oversight in the area of financial risksand controls. The major risks identified by the businesses and functions aresystematically addressed through mitigating actions on a continuing basis. The developmentand implementation of risk management policy has been covered in the Management Discussionand Analysis which forms a part of the Annual Report.

13 Proceedings Under Insolvency and Bankruptcy Code 2016:

During the year under review there were no proceedings that were filed by the Companyor against the Company which are pending under the Insolvency and Bankruptcy Code 2016as amended before National Company Law Tribunal or other Courts.

14 Details of one time settlement:

During the year under review there were no instances of onetime settlement with anyBanks or Financial Institutions.

15 Industrial Relations:

The relationship with all the concerned continued to remain harmonious and cordialthroughout the year under review.

16 Appreciation:

The Directors place on record their appreciation for support and timely assistance fromFinancial Institutions Banks Government Authorities and above all its Shareholders whohave extended their valuable support to the Company.

The Directors also wish to appreciate sincere and dedicated efforts and services by allthe employees/staff.

For and on behalf of the Board of Directors

Navinbhai C. Dave
Chairman
Mumbai 30th May 2022 (DIN: 01787259)

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