Tecpro Systems Ltd.
|BSE: 533266||Sector: Engineering|
|NSE: TECPRO||ISIN Code: INE904H01010|
|BSE 00:00 | 04 Mar||Tecpro Systems Ltd|
|NSE 05:30 | 01 Jan||Tecpro Systems Ltd|
|BSE: 533266||Sector: Engineering|
|NSE: TECPRO||ISIN Code: INE904H01010|
|BSE 00:00 | 04 Mar||Tecpro Systems Ltd|
|NSE 05:30 | 01 Jan||Tecpro Systems Ltd|
Your Directors have immense pleasure in presenting the Twenty Fifth Annual Report togetherwith the Audited Accounts for the financial year ended on 31 March 2015.
1. FINANCIAL HIGHLIGHTS
The Financial Results for the year under report are summarized as under:
2. Business operations AND FINANCIAL performance
Due to prolonged recession and shortage of funds the Company approached for corporatedebt restructuring ("CDR"). However the CDR package could not be implemented dueto the fact that the promoters could not arrange their contribution in liquid form withinthe stipulated time. However they were willing to bring their contribution in the form ofassets which was not accepted by the bankers. After some time some bankers sold theirdebt to M/s Edelweiss Assets Reconstruction Limited and thereafter in a Joint lendersmeeting it was agreed
that some lenders will bring fresh money by way of fund based and non fund based limitsto support the Company. In the meantime the Company due to erosion of entire networth theCompany made a reference to the Board for Industrial and Financial Reconstruction("the Board") in terms of the provisions of Sick Industrial Companies (SpecialProvisions) Act 1985. The reference was duly accepted by the Board. In view of theaforementioned developments it is expected that the Company would be on the path ofrevival in coming years.
2.1 standalone financial statement
In the financial year 2014-15 the Income from operations of the Company has come downfrom Rs. 862.98 crore in the financial year 2013-14 to Rs. 273.98 crore and the Companyhas incurred a loss of Rs. 1080 crore as against a loss of Rs. 568 crore in the financialyear 2013-14. The financial position of your Company has weakened due to slowpace/stoppage of work at various sites due to paucity of funds. The Company is indiscussion with its debtors so that funds can be collected and ploughed back in thebusiness operations.
2.2 CONSOLIDATED FINANCIAL STATEMENT
In accordance with the Companies Act 2013 and Accounting Standard (AS)-21 onConsolidated financial statement read with other applicable accounting standards theaudited Consolidated Financial statement is provided in the Annual Report.
As the Company has incurred losses your Board of Directors do not recommend anydividend for the financial year under review.
4. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
At present your Company has six subsidiaries out of which four are incorporated inIndia namely Tecpro Energy Limited Ajmer Waste Processing Company Private LimitedBikaner Waste Processing Company Private Limited and Eversun Energy Private Limited andtwo subsidiaries are incorporated outside India namely Tecpro Systems (Singapore) Pte.Limited in Singapore and PT. Tecpro Systems Indonesia in Indonesia. However out of themnone is material subsidiary Company.
Apart from above the Company does not have any joint venture and associate inaccordance with the provisions of Companies Act 2013.
Report on the performance and financial position of each of the subsidiaries is givenin Annexure-I in the prescribed Form AOC-1 which forms a part of this report.
5. RISK MANAGEMENT POLICY
The Company has devised and implemented a mechanism for risk management and hasdeveloped a Risk Management Policy. The mechanism involves
creating a Risk Register identifying internal and external risks and implementing riskmitigation steps. The updates regarding the same are placed before the meeting of theBoard of Directors of the Company on quarterly basis.
6. DIRECTOR AND KEY MANAGERIAL PERSONNEL
In terms of the provisions of Section 149 of the Act the members at their meeting heldon 21st November 2014 appointed the following Independent Directors of the Company whogave declarations and confirmations that they meet the criteria of independence asprescribed under the Act and Clause 49 of the Listing Agreement with the Stock Exchanges.:
Mr. Anunay Kumar
Mr. Brij Bhushan Kathuria
Mr. Sakti Kumar Banerjee
Mr. Satvinder Jeet Singh Sodhi
Mr. Suresh Kumar Goenka
However during the period under review Mr. Amar Banarjee Managing Director and Mr.Brij Bhushan Kathuria Mr. Satvinder Jeet Singh Sodhi Mr. Anunay Kumar Mr. Suresh KumarGoenka Director resigned from their offices w.e.f 10 July 2015 13 January 2015 17December 2014 29 June 2015 30 October 2014 respectively. Apart from that State Bankof India has withdrawn nomination of Mr. Narayanan Krishnan w.e.f. 21 July 2015. Howeverduring the period Mr. Sanjeet Kumar was appointed as director w.e.f. 4 March 2015 tofill the casual vacancy caused by the resignation of Mr. BrijBhushan Kathuria. Since theterm of Mr. Brij Bhushan Kathuria was expiring on March 31 2015 the appointment of Mr.Sanjeet Kumar as an Independent Director in accordance with Section 149 of the Act isproposed to be passed in the forthcoming Annual General Meeting.
In accordance with provisions of the Act and the Articles of Association of theCompany Mr. Ajay Kumar Bishnoi Chairman and Managing Director of the company retire byrotation at the ensuing Annual General Meeting and being eligible offers himself forre-appointment. The Board recommends his re-appointment.
The resolution for appointment and re-appointment of the aforesaid director has beenincorporated in the notice of the forthcoming Annual General Meeting of the company.
7. ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITS COMMITTEES ANDINDIVIDUAL DIRECTORS
Pursuant to the provisions of the Act and Clause 49 of the Listing Agreement the Boardhas carried out an annual evaluation of its own performance performance of the Directorsindividually as well as the evaluation of the working of its Committees.
The following process was adopted for Board Evaluation: Feedback was sought from eachDirector about their views on the performance of the Board covering various criteria suchas degree of fulfilment of key responsibilities Board structure and compositionestablishment and delineation of responsibilities to various Committees effectiveness ofBoard processes information and functioning Board culture and dynamics quality ofrelationship between the Board and the Management and efficacy of communication withexternal stakeholders. Feedback was also taken from every director on his assessment ofthe performance of each of the other Directors.
The Nomination and Remuneration Committee (NRC) then discussed the above feedbackreceived from all the Directors.
Based on the inputs received the Chairman of the NRC also made a presentation to theIndependent Directors at their meeting summarizing the inputs received from the Directorsas regards Board performance as a whole and of the Chairman.
Post the meeting of the Independent Directors their collective feedback on theperformance of the Board was discussed by the Chairman of the NRC with the Chairman of theBoard. It was also presented to the Board and a plan for improvements was agreed upon.
Every statutorily mandated committee of the Board conducted a self-assessment of itsperformance and these assessments were presented to the Board for consideration. Areas onwhich the Committees of the Board were assessed included degree of fulfillment of keyresponsibilities adequacy of Committee composition and effectiveness of meetings.
Feedback was provided to the Directors as appropriate. Significant highlightslearning and action points arising out of the evaluation were presented to the Board.
8. REMUNERATION POLICY FOR THE DIRECTORS KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES
In terms of the provisions of Section 178(3) of the Act and Clause 49(IV)(B)(1) of theListing Agreement the NRC is responsible for formulating the criteria for determiningqualification positive attributes and independence of a Director. The NRC is alsoresponsible for recommending to the Board a policy relating to the remuneration of theDirectors Key Managerial Personnel and other employees.
In line with this requirement the Board has adopted the Policy on Board Diversity andDirector Attributes which is reproduced in Annexure-II and Remuneration Policy forDirectors Key Managerial Personnel and other employees of the Company which isreproduced in Annexure-III.
9. COMMITTEES OF THE BOARD
The Committees of the Board focus on certain specific areas and make informed decisionsin line with the delegated authority. The following substantive Committees constituted bythe Board function according to their respective roles and defined scope:
(a) Audit Committee
(b) Nomination and remuneration committee
(c) Stakeholders Relationship committee
(d) Executive Committee (Recognized as Committee of Directors by the Board)
The details pertaining to composition of committees terms of reference and number ofmeetings held are included in the Corporate Governance Report which forms a part of thisreport.
10. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
Pursuant to Sub Section (3)(m) of Section 134 of Companies Act 2013 read with rule8(3) of Company (Accounts) Rules 2014 particulars of energy conservation technologyabsorption foreign exchange earnings and outgo are annexed as Annexure-IV and form partof the Directors' Report.
11. particulars of employees
In terms of the provisions of Section 197(12) of the Companies Act 2013 read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 none of the employee of the Company is drawing remuneration inexcess of the limits set out in the said Rules.
12. RELATED PARTY TRANSACTIONS
All Related Party Transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of business. All Related PartyTransactions were placed before the Audit Committee of the Board of Directors for theirapproval. The Audit Committee has granted omnibus approval for Related Party Transactionsas per the provisions and restrictions contained in the Listing Agreement. The details ofrelated party transactions are given in note no. 45 of the financial statements.
The Company has formulated a policy on materiality of Related Party Transactions andalso on dealing with Related Party Transactions. The policy is available on the Company'swebsite www.tecprosystems.com.
13. FIXED DEPOSITS
The Company has not invited/accepted any Fixed Deposits during the year as such noamount of principal or interest on fixed deposits was outstanding on the date of theBalance Sheet.
14. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIESACT 2013
Details of loans guarantees and investments covered under the provisions of Section186 of the Companies Act 2013 are given in the schedules to the financial statements.
15. EXTRACT OF ANNUAL RETURN
As provided under section 92(3) of the Act the extract of Annual Return is given inAnnexure-V in the prescribed form MGT-9 which forms a part of this report.
(i) STATUTORY AUDITOR
The members are aware that M/s Krishnaswami & Rajan Chartered Accountants hadresigned from the office of the Statutory Auditors w.e.f. 10th May 2015 and the Company inaccordance with the provisions of Section 139(8) of the Act read with the applicableprovisions of Companies (Audit and Auditors ) Rules 2014 filled the casual vacancy thuscaused by appointment of M/s. C.S. Hariharan & Co. Chartered Accountants in theExtra-ordinary General Meeting held on 5th August 2015 to hold office till the conclusionof the ensuing Annual General Meeting.
A requisite consent and certificate as prescribed under second and third proviso ofSection 139(1) of the Companies Act 2013 ("the Act") read with Section 141 ofthe Act together with the rules prescribed thereunder and furnished by the auditors havealready been received by the Company.
The Auditors' report and notes to the financial statements are self explanatory and donot call for any further comments except on the qualifications highlighted by the auditorsunder the basis for qualified opinion in their auditors report. The explanations to theauditor's qualifications are given below:
1. The net worth of the Company was eroded and hence reference was made to the Boardfor Industrial and Financial Reconstruction. The net worth was eroded on account of hugeinterest cost which the company could not service. However the Company is working on manyof its sites and it is expected that the work would also start on many other sites and theCompany is continuing its operations as a going concern.
2. Since the CDR package of the Company could not be implemented the banks havedeclared the Company as a non performing asset and hence they are not supporting thecompany for release of bank statements.
3. Due to heavy losses most of the employees of the Company left the Company at a shortnotice or without notice and hence the Company did not have the right kind of resources toextract the information for the auditors.
4. Due to acute slowdown in the business activities the factories are not working thelabour have not been paid many key individuals left the company and therefore theinformation for fixed assets could not be provided.
5. Due to the reasons given in the above point the information on inventory could alsonot be provided.
6. The encashment of bank guarantees have been shown in trade receivables due to factthat the Company is under discussion with these clients and there is likelihood of revivalof the contracts.
(ii) SECRETARIAL AUDITOR
Pursuant to provisions of Section 204 of the Companies Act 2013 read with Rule 9 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 yourCompany engaged the services of M/s Anjani Kumar & Associates Company SecretariesNew Delhi to conduct the Secretarial Audit of the Company for the financial year endedMarch 312015.
The Secretarial Audit Report (in Form MR-3) is attached as Annexure-VI to this Report.The non compliances as reported are due to shortage of funds as well as staff.
17. CORPORATE GOVERNANCE REPORT
Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges and relevantsections of the Act a Management Discussion and Analysis Statement Report on CorporateGovernance and Auditors' Certificate are included in the Annual Report.
18. VIGIL MECHAMSM/ WHISTLE BLOWER POLICY
Pursuant to Section 177(9) of the Companies Act 2013 read with Rule 7 of the Companies(Meetings of Board and its Powers) Rules 2014 and Clause 49 of the Listing Agreement theBoard of Directors had approved the Policy on Vigil Mechanism/Whistle Blower and the samewas hosted on the website of the Company.
This Policy inter-alia provides a direct access to the Chairman of the Audit Committee.
Your Company hereby affirms that no Director/ employee has been denied access to theChairman of the Audit Committee and that no complaints were received during the year.
Brief details about the policy are provided in the Corporate Governance Report attachedwith this Report.
19. management analysis and discussion
Management analysis and discussion for the year under review as stipulated under Clause49 of Listing agreement is presented in a separate section forming a part of annualreport.
20. DIRECTORS' RESpONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(3)(c) of Companies Act 2013 withrespect to the Directors' Responsibility Statement it is hereby confirmed:-
(i) that in the preparation of the annual accounts for the financial year ended 31March 2015 the applicable accounting standards had been followed along with properexplanation relating to material departures;
(ii) that the directors had selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company for the financial yearended 31 March 2015 and of the profit or loss of the Company for that period;
(iii) that the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities;
(iv) that the directors had prepared the annual accounts for the financial year ended31 March 2013 on a going concern basis.
(v) that the directors have laid down internal financial control to be followed by thecompany and that such internal financial control are adequate and are operatingeffectively.
(vi) that the directors have devised proper system to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and are operatingeffectively.
21. HUMAN RESOURCES
During the period under review the dedicated employees of the Company supported thecompany despite of the tough circumstances. The regular interaction with the employees atall levels helps the Company in maintaining cordial and harmonious industrial relations.
We thank our bankers for their continued support during the year. We also thankGovernment of India State Governments and concerned Government Authorities/Departmentsfor their co-operation. We appreciate and value the support of our customers vendorsemployees and investors and place on record our appreciation for the contribution made bythem.