Our Valued Shareholders
Your Directors have pleasure in presenting the Twenty Sixth AnnualReport on the business and operations of the Company together with the Audited FinancialStatements (Standalone and Consolidated) for the year ended 31st March 2021.
(Rs. in Lakhs)
| ||Standalone ||Consolidated |
|S.No. Particulars ||For the year ended 31/03/2021 ||For the year ended 31/03/2020 ||For the year ended 31/03/2021 ||For the year ended 31/03/2020 |
|1 Revenue from operations ||18453.22 ||14204.04 ||25253.61 ||25221.82 |
|2 Finance and Other income ||3279.04 ||3170.98 ||2985.18 ||2759.30 |
|3 Total Income ||21732.26 ||17375.02 ||28238.79 ||27981.12 |
|4 Total Expenditure (Excluding Finance cost Depreciation and Amortisation) ||15813.20 ||13679.08 ||20207.37 ||22449.57 |
|5 Profit Before Finance cost Depreciation and Amortisation and Tax ||5919.06 ||3695.94 ||8031.42 ||5531.55 |
|6 Finance Costs ||1249.12 ||981.15 ||1775.87 ||1725.90 |
|7 Depreciation and Amortisation expense ||1547.79 ||1659.43 ||2813.57 ||2985.26 |
|8 Profit Before Exceptional Item and Tax ||3122.15 ||1055.36 ||3441.98 ||820.39 |
|9 Add: Exceptional items # ||(691.00) ||(2471.99) ||(691.00) ||(1522.61) |
|10 Profit (+) / Loss (-) Before Tax ||2431.15 ||(1416.63) ||2750.98 ||(702.22) |
|11 Income Tax Expense ||- ||256.53 ||147.39 ||314.66 |
|12 Net Profit (+) / Loss(-) after Tax ||2431.15 ||(1673.16) ||2603.59 ||(1016.88) |
|13 Other Comprehensive income for the year net of tax ||(0.40) ||45.29 ||(175.37) ||911.63 |
|14 Total comprehensive income / Loss(-) for the year net of tax ||2430.75 ||(1627.87) ||2428.22 ||(105.25) |
|15 Interim Dividend paid on Equity Shares ||- ||189.48 ||- ||189.48 |
|16 Dividend Distribution Tax (Interim) ||- ||38.95 ||- ||38.95 |
|17 Final Dividend Proposed / Paid on Equity Shares ||454.76 ||113.69 ||454.76 ||113.69 |
|18 Equity Share Capital ||1515.88 ||1515.88 ||1515.88 ||1515.88 |
|19 Reserves (Other Equity) (excluding revaluation reserve) ||66580.11 ||64263.04 ||72372.42 ||70053.39 |
|20 EPS (Rs.) ||16.04 ||(11.04) ||17.18 ||(6.71) |
# The Company had revisited the projections made in the financial year2019-20 on the recoverability of its investments on an annual basis taking into accountthe probable beneficial results arising from various initiatives being undertaken withregard to restructure of the customer contracts submission and pursuing with appropriateauthorities (by legal right with TANGEDCO for release of NOC) on relevant claims andrecoverability of REC sales. This was resulted in the Company considering an additionaldiminution in the value of its investments in subsidiary (SWELECT Green Energy SolutionsPrivate Limited) during the previous financial year ended March 312021. The same wasconsidered as an exceptional loss in the financial results of the Company.
STATE OF THE COMPANY'S AFFAIRS MAJOR LINE OF BUSINESS
I - Manufacturing: Solar PV Modules Solar Inverters and Mountingstructures
II - Solar Power Systems Integration & Turnkey EPC contracts
III - Solar Power Generation (IPP and under RESCO)
IV - Solar Energy Storage Solutions (new vertical)
V - Solar water pumping (new vertical)
VI - Servo stabilizers (new vertical)
SWELECT has continued to stay as one of the most reputed companies inIndian Solar PV Industry with its high quality products best installations standardsguaranteed uptime and energy generation as well as technical superiority. SWELECT hadundertaken many activities to extend its support during the pandemic including donation ofRs.25 lakhs and Rs.1.00 Crore to Chief Minister Covid Relief fund Tamil Nadu Governmentfor the financial year 2020-21 and 2021-22 respectively and distribution of groceries tomunicipality workers of Idappadi Salem District etc.
GENERAL REVIEW OF THE BUSINESS OF THE COMPANY:
During the year the Company registered a turnover (Standalone) ofRs.18453.22 Lakhs against the previous year turnover of Rs.14204.04 Lakhs registered agrowth of 29.92% compared to previous year revenue. The company recorded an EBIDTA ofRs.5919.06 Lakhs compared to the corresponding figure last year of Rs. 3695.93 Lakhs andrecorded a Profit of Rs.2431.15 Lakhs against the previous year Loss of Rs.1673.16 Lakhs(the Company had to account for "Exceptional items" amounting to Rs.2471.99Lakhs resulting in a Loss in the previous year and the reason for loss was explained inprevious year report).
The Board of Directors have recommended a final Dividend of Rs.3/-(Rupees Three Only) per equity share [@ 30% on the equity share capital ofRs.151587600/-(Rupees Fifteen Crore Fifteen Lakhs Eighty Seven Thousand Six HundredOnly) for the year ended 31st March 2021 subject to the approval of the shareholders atthe ensuing Annual General Meeting of the Company. The outflow for the Company would beRs. 454.76 Lakhs towards final dividend.
As per the Finance Act 2020 the dividend declared on or after 1stApril 2020 is taxable in the hands of shareholders if the dividend value exceedsRs.5000/- in a financial year and accordingly the payment of dividend is subject to thededuction of income tax as applicable.
During the year under review there was no change in the Company'sissued subscribed and paid-up equity share capital. On March 31 2021 it stood atRs.151587600/- divided into 15158760 equity shares of Rs.10/- each.
TRANSFER TO GENERAL RESERVE.
During the year your Company does not propose to transfer amounts tothe general reserve out of the amount available for appropriation.
SUBSIDIARIES JOINT VENTURES OR ASSOCIATE COMPANIES
The Company has Seven Wholly Owned subsidiaries One Subsidiary and Twostep down subsidiaries as on the date of this report. The Board of Directors at theirmeeting held on 14th June 2021 approved the consolidated accounts of subsidiaries.Pursuant to the provisions of section 129(3) of the Act read with Rule 5 of the Companies(Accounts) Rules 2014 (as amended) a statement containing salient features of thefinancial statements of the Company's subsidiaries in Form AOC-1 is attached to thefinancial statements of the Company. The Company does not have Associates or JointVentures as on the date of this report.
SWELECT SUN ENERGY PRIVATE LIMITED:
The Board of Directors at their meeting held on 23.12.2020 had proposedto incorporate a Wholly Owned Subsidiary namely SWELECT Sun Energy Private Limited (SSEPL)to execute the solar power project under Captive use scheme and the said Company wasincorporated on 29th December 2020 as per the Certificate of Incorporation issued by theMinistry of Corporate Affairs Government of India. After incorporation the PowerPurchasing Companies namely HATSUN Agro Product Limited and SICGILSOL Gases PrivateLimited had executed the Power Purchase Agreement (PPA) with SSEPL and made an investmentof 19.50% and 6.51% respectively of the total Equity Share capital of the SSEPL to fulfilthe Electricity Rules of the Government of India. The shares were allotted to theseparties on 23.03.2021 for 26.01% as stated earlier which changed the Status of the SWELECTSun Energy Private Limited from Wholly Owned Subsidiary to Subsidiary Company and SWELECTEnergy Systems Limited is holding 73.99% of Equity Shares in SSEPL.
SWELECT HHV SOLAR PHOTOVOLTAICS PRIVATE LIMITED:
The Board of Directors at their meeting held on 26.4.2021 had proposedto incorporate a Wholly Owned Subsidiary namely SWELECT HHV Solar Photovoltaics PrivateLimited to engage in Manufacture and Maintain Solar Photovoltaic Cells and Modulessuitable for Renewable Energy power generation using Indigenous and Imported Technologyunder the Make in India and Production Linked Incentive scheme. Subsequently the saidCompany was incorporated on 3rd May 2021 as per the Certificate of Incorporation issued bythe Ministry of Corporate Affairs Government of India.
SWELECT ENERGY SYSTEMS LLC:
The step down subsidiary namely SWELECT Energy Systems LLC incorporatedat United States of America was struck off with effect from 31.12.2019.
The Company did not receive deposits from the public during the yearand no amount of principal or interest was outstanding as of the Balance Sheet date.
CHANGE IN DIRECTORS OR KEY MANAGERIAL PERSONNEL
Mr. K. V. Nachiappan (DIN:00017182) and Mrs. V. C. Mirunalini(DIN:07860175) Whole Time Directors are liable to retire by rotation at the ensuingAnnual General Meeting and being eligible offers themselves for re-appointment.
At the Annual General Meeting (AGM) held on 28th July 2016 theshareholders of the Company had appointed Mr. G. S. Samuel (DIN: 05284689) as anIndependent Director of the Company for a period of 5 years with effect from the date ofAGM. The term of office of Mr. G. S. Samuel will expire on 27th July 2021. After takinginto consideration and recommendation of Nomination and Remuneration Committee the Boardat its meeting held on 14th June 2021 recommended for re-appointment of Mr. G. S. Samuelas an Independent Director of the Company for a further period of 4 years with effect from28th July 2021 as per the terms and conditions as set out in the Notice of AGM.
At the Annual General Meeting (AGM) held on 11th August 2017the shareholders of the Company had appointed Mr. S. Annadurai (DIN: 00137561) as anIndependent Director of the Company for a period of 5 years with effect from 28th June2017. The term of office of Mr. S. Annadurai will expire on 27th June 2022. After takinginto consideration and recommendation of Nomination and Remuneration Committee the Boardat its meeting held on 14th June 2021 recommended for re-appointment of Mr. S. Annaduraias an Independent Director of the Company for a further period of 5 years with effect from28th June 2022 as per the terms and conditions as set out in the Notice of AGM.
The Profiles of Mr. k. V. Nachiappan Mrs. V. C. Mirunalini Mr. G. S.Samuel and Mr. S. Annadurai are given separately in the notice of AGM.
The Board recommends necessary resolutions for the approval ofShareholders at the ensuing Annual General Meeting for the above appointments.
Key Managerial Personnel
Ms. Nikhila Ramesh was appointed as Head- Finance & Accounts ofthe Company by the Board of Directors at their Meeting held on 20.08.2020 based on therecommendation of Nomination and Remuneration Committee (NRC) and Audit Committee.
After evaluating the performance and based on the recommendation of NRCand approval of Audit Committee the Board at its meeting held on 12th November 2020re-designated Ms. Nikhila Ramesh as Chief Financial Officer of the Company with effectfrom 12.11.2020.
STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD TO INTEGRITYEXPERTISE AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORSAPPOINTED DURING THE YEAR
There was no appointment of Independent Director during the financialyear 2020-2021.
NUMBER OF BOARD MEETINGS
During the Financial Year 2020-21 seven meetings of the Board ofDirectors of the Company were held. The details are provided in the Corporate GovernanceReport that forms part of this Annual Report.
DISCLOSURE ON COMPOSITION OF AUDIT COMMITTEE AND ITS RECOMMENDATION
The details of Composition of Audit Committee along with its terms ofreference are given in the Corporate Governance Report. All recommendations of the AuditCommittee were accepted by the Board.
DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES
The Company has adopted the Vigil mechanism and the details are givenin the Corporate Governance Report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013.
The Company has in place an Anti-Sexual Harassment Policy in line withthe requirement of the Sexual Harassment of Women at Workplace (Prevention Prohibition& Redressal) Act 2013 and complied with the provisions relating to the constitutionof an Internal Complaints Committee (ICC) as required under the said Act to redress thecomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy.
The members of the Committee are:
Corporate Office (Chennai):
1. Mrs. C. Shenbagapushpam
2. Mrs. Rebecca Teresa Briggs
3. Mr. M. Madhava and
4. Mr. R. Kalidasan
1. Ms. Malathi
2. Ms. A. Kokilavani
3. Mr. S. Namasivayam and
4. Mr. K. Karthikeyan
Solar Photovoltaic Plant (Bangalore)
2. Ms. Manjula T
3. Ms.Roopa Shree
4. Ms. Rathnamma and
5. Ms. S.Preema
The following is a summary of sexual harassment complaints received anddisposed off during the year 2020-2021
|No. of complaints filed during the financial year : ||Nil |
|No. of complaints disposed off during the year : ||Nil |
|No. of complaints pending as on end of the financial year : ||Nil |
CODE OF CONDUCT AND PREVENTION OF INSIDER TRADING
The Company has adopted the Code of Conduct as per the Guidelinesissued by the Securities and Exchange Board of India for Prevention of Insider Tradingwith a view to regulate trading in securities by the Directors and designated persons ofthe Company. The Code prohibits trading in securities of the Company by the Directors andthe designated persons while in possession of unpublished price sensitive information inrelation to the Company and during the period when the Trading Window is closed.
All Directors Key Management Personnel and Senior Management Personnelof the Company have confirmed compliance with the code of conduct applicable to them and adeclaration to this effect made by the Managing Director is attached to this report. Codeof conduct of Board of Directors and Senior Management Personnel are available inCompany's website www.swelectes.com under investors' page.
Mr. karthik Subramaniam who is falling under the category of immediaterelative of "Promoters Group" has acquired 100 equity shares of the Companyduring the Trading Window Closure period and it was informed by him that the acquisitionof shares was made inadvertently. Therefore the Board directed him to remit the gain ofRs.1490/- made towards such acquisition to SEBI Investor Protection and EducationFund(IPEF) and such amount was remitted to IPEF by the above shareholder.
Pursuant to the provisions of Section 139 (1) of the Companies Act2013 M/s. Deloitte Haskins & Sells LLP Chartered Accountants Chennai (FirmRegistration No.117366W/W - 100018) were appointed as the Statutory Auditors of theCompany by the Shareholders at the 22nd Annual General Meeting (AGM) held on 11.8.2017 fora term of five consecutive years from the conclusion of the 22nd AGM up to 27th AGM of theCompany.
STATUTORY AUDITORS REPORT
There were no qualifications or observations or remarks made by theStatutory Auditors in their report for the financial year 20202021. The same is beingattached to the financial statements of the Company.
SECRETARIAL AUDIT REPORT
Secretarial Audit was conducted during the year by the SecretarialAuditor Mr. R. Kannan Partner of KRA & Associates Practicing Company Secretaries inaccordance with the provisions of Section 204 of the Companies Act 2013. The SecretarialAuditor's Report is also attached as part of this Report as Annexure -1. There were noqualifications made by the Secretarial Auditor in his Report.
Pursuant to the provisions of the Companies (Cost Records and Audit)Rules 2014 the Company has completed the filing of Cost Audit Report with the Ministryof Corporate Affairs for the financial year 2019-2020 in Xtensible Business ReportingLanguage (XBRL) format. M/s. Ravichandran Bhagyalakshmi & Associates Cost Auditors ofthe Company will submit their report for the financial year 2020-2021 within the timelimit applicable under the Companies (Cost Records and Audit) Rules 2014.
The Board on the recommendation of the Audit Committee has appointedM/s. Ravichandran Bhagyalakshmi & Associates Cost Accountants as the Cost Auditorsof the Company for the financial year 2021 - 2022. The Board also considered and approvedthe remuneration of Rs.132000/- as recommended by the Audit Committee. In terms of theprovisions of section 148 (3) of the Companies Act 2013 read with Rule 14 (a) (ii) of theCompanies (Audit and Auditors) Rules 2014 the remuneration of the Cost Auditor has to beratified by the members of the Company. Accordingly the Board recommends necessaryresolution at the ensuing AGM for ratification.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis for the year as required under SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 is presented in aseparate section forming part of the Annual Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO
The Conservation of energy technology absorption and foreign exchangeearnings and outgo forms part of the Board's report and is given in Annexure - 2
The Annual Return of the Company is available on the Company's websitewww.swelectes.com under web link https://swelectes.com/annual-return/
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
The details of Loans Guarantees and Investments covered under theprovisions of Section 186 of the Companies Act 2013 are given in the notes to theFinancial Statements.
STATEMENT INDICATING DEVELOPMENT AND IMPLEMENTATION OF A RISKMANAGEMENT POLICY
The details of development and implementation of risk management systemare provided in the Corporate Governance Report which forms a part of this report.
CORPORATE SOCIAL RESPONSIBILITY
The Company undertakes "Corporate Social Responsibility"(CSR) initiatives directly / through agency to the public in improving the quality oflife. During the year 2020-21 the Company has undertaken many initiatives through apolicy framework for expanding some of the present initiatives and undertaking newer CSRinitiatives in the year to come.
The Annual Report on CSR Activities in the prescribed format is givenin the Annexure - 3.
Details of composition of the CSR Committee number of meetings heldduring the year and other particulars are set out in the Corporate Governance Report whichforms a part of this Report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered into by the Companyduring the financial year with Related Parties were in the ordinary course of business andon an arm's length basis. During the year the Company has not entered into any contracts/arrangements / transactions with related parties which could be considered material inaccordance with the policy of the Company on materiality of related party transactions.
Accordingly the disclosure required u/s 134 (3) (h) of the CompaniesAct 2013 in form AOC-2 is not applicable to the Company. The Policy on materiality ofRelated Party Transactions and dealing with related party transaction as approved by theBoard may be accessed on the Company's website www.swelectes.com under investors page.Members may refer to the notes to the financial statements which set out related partydisclosures for the current and previous financial year.
SIGNIFICANT AND MATERIAL ORDERS
During the year there were no significant and material orders passed bythe Regulators or Courts or Tribunals impacting the going concern status and company'soperations in future.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The details in respect of internal financial control and their adequacyare included in the Management Discussion and Analysis which forms a part of this report.
ANNUAL BOARD EVALUATION AND FAMILIARIZING PROGRAMME
The Board carried out an annual evaluation of its own performance thedirectors and committees of the Board based on the guideline formulated by the Nomination& Remuneration Committee. Board composition quality and timely flow of informationfrequency of meetings and level of participation in discussions were some of theparameters considered during the evaluation process.
Further during the year the Independent Directors of the Company meton February 12 2021 to review the performance of nonindependent directors Chairman ofthe Board and the Board of Directors as a whole. The Independent Directors had conveyedtheir satisfactory opinion with regard to review and access of certain details as statedabove.
The Independent Directors of the Company are being familiarized by themanagement and outside professional experts at frequent intervals with regard to nature ofthe business business model their roles rights and responsibilities and other relevantinformation to the Company. The details of the programs attended by the IndependentDirectors are available on the website of the Company.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OFTHE COMPANY
There were no material changes and commitments affecting the financialposition of the Company between the end of the financial year 31st March 2021 and the dateof the report 14th June 2021 except the impact of COVID-19 which hit the overall economyof the world as the same is explained in the Report of Management and Discussion analysisand Corporate Governance.
DISCLOSURE OF ACCOUNTING TREATMENT
The Company has followed the Accounting Standards specified under Rule3 and 4 of the Companies (Indian Accounting Standards) Rules 2015 (as amended) to theextent applicable in the preparation of the financial statements.
CORPORATE GOVERNANCE CERTIFICATE
A report on Corporate Governance as stipulated under SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 is attached to this Report.
A Compliance Certificate from Mr. R. Kannan Partner of KRA &Associates Practicing Company Secretaries regarding compliance of conditions ofCorporate Governance as stipulated under the aforesaid regulation is also annexed to thisreport.
DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the provisions of section 134(5) of the CompaniesAct 2013 your directors confirm that:
(a) in the preparation of the annual accounts the applicableaccounting standards had been followed;
(b) the Directors had selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit of the company for that year;
(c) the Directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
(d) the Directors had prepared the annual accounts on a going concernbasis;
(e) the Directors had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively; and
(f) the Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB-SECTION(12) OF SECTION 143 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT
The Statutory Auditors have stated that no fraud by the Company or nomaterial fraud on the Company by its officers and employees had been noticed or reportedduring the year.
DECLARATION BY INDEPENDENT DIRECTORS
Pursuant to Section149 (7) of the Companies Act 2013 the IndependentDirectors of the Company have given a declaration to the Company that they qualify thecriteria of independence as required under Section 149(6) of the Companies Act 2013 andSEBI (Listing Obligations and Disclosure Requirements) Regulations2015.
POLICY ON NOMINATION AND REMUNERATION AND PERFORMANCE EVALUATION OFDIRECTORS KMP AND SENIOR MANAGEMENT PERSONNEL
The Board based on the recommendation of the Nomination andRemuneration Committee has formulated a policy on remuneration of Directors KeyManagerial Personnel and Senior Management Personnel of the Company. The policy covers theappointment including criteria for determining qualification positive attributesindependence and remuneration of its Directors Key Managerial Personnel and SeniorManagement Personnel. The Nomination and Remuneration Policy is given in Annexure -4.
PARTICULARS OF EMPLOYEES
Pursuant to Section 197 read with rule 5 of the Companies (Appointmentand Remuneration of Managerial Personnel) Amendment Rules 2016 the required details aregiven in Annexure - 5.
The Company has complied with all applicable Secretarial Standards inpursuant to the directions of Ministry of Corporate Affairs issued by the Institute ofCompany Secretaries of India during the year.
Your Board places on record its appreciation of the support andco-operation received from the Government of India State Governments Banks SuppliersEmployees Customers and Vendors whom your company looks upon as its valued partners inthe path of progress. Your Directors also wish to place on record their appreciation forthe valuable services rendered by Depositories Stock Exchanges and the Registrar andTransfer Agent. Your Directors thank all valuable Investors who have been with the Companyall these years and are also very much pleased to welcome all the new Investors and thankthem for their continued patronage and confidence reposed in the Management.
|For and on behalf of the Board of Directors || |
|Sd/- ||Sd/- |
|R. CHELLAPPAN ||A.BALAN |
|Managing Director ||Joint Managing Director |
|Place: Coimbatore ||Place: Salem |
|Date: 14th June 2021 ||Date: 14th June 2021 |