Your Directors hereby submits the twenty ninth annual report of the business andoperations of your Company along with the audited financial statements for the financialyear ended 31st March 2019
Rs in Lakh
|Particulars ||Year 2018-19 ||Year 2017-18 |
|Revenue from operations ||6855.84 ||18327.25 |
|Other Income ||1728.65 ||1099.23 |
|Total Revenue ||8484.49 ||19426.48 |
|Profit / (Loss) before interest depreciation taxes and exceptional items ||(728.69) ||2678.61 |
|Less: Interest ||611.43 ||855.89 |
|Less: Depreciation ||1549.35 ||1424.39 |
|Profit / (Loss) before exceptional Items ||(2889.47) ||479.27 |
|Less: Exceptional Items & Income tax & other Provisions ||5.08 ||- |
|Profit / (Loss) after Tax ||(2894.55) ||478.31 |
During the year under review your Company could not utilize its full capacity becauseof overall industry scenario and lack of demand. Also there was huge pressure from Chinaon pricing end. After implementation of Safeguard Duty and other positive measures takenby the GOI we expect that your company will perform in FY 2019-20. We are hopeful thatsupport from GOI will be continuing to green energy.
Your Company reported total revenue of Rs. 6855.84 Lakh against Rs. 18327.25 Lakhduring the last financial year. The Company incurred a loss of Rs. 2894.55 Lakh afterproviding Rs. 1549.35 Lakh towards depreciation and Rs 611.43 Lakh towards interestduring the current financial year as compared to a profit of Rs 478.31 Lakh in the lastfinancial year.
Your directors have not recommended any dividend for the year ended 31stMarch 2019 in view of the restrictions under Section 123 of the Companies Act 2013 (theAct) as amended by the Companies (Amendment) Act 2015 becoming effective from 13thAugust 2015 by virtue of which no Company can declare dividend unless carried overprevious losses and depreciation not provided in previous year or years are set offagainst profit of the Company for the current year.
a) Changes in Directors and Key Managerial Personnel:
In according with the provisions of Section 152 of the Act read with Article 91 of theArticle of Association of the Company S L Agarwal Managing Director will retire byrotation at the ensuing AGM and being eligible offer himself for re-election. The Boardhas recommended their re-election.
Mr. Ritesh Ojha was appointed by Board on 14.11.2018 as Independent director in theCompany his appointment will be ratified by shareholders in the ensuing AGM.
Mr. Dharmendra Sethia who has been appointed on 14.08.2014 as Independent Director inthe Company for five years has offered himself for reappointment.
b) No. of Meetings of the Board:
Five meetings of the Board were held during the year ended 31st March 2019.
c) Declaration by Independent Directors:
All Independent directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and as perrespective regulation of SEBI Listing Regulation (LODR) 2015. The declaration is receivedin the first meeting of Board of Directors for the year.
d) Separate Meeting of Independent Director:
Details of the separate meeting of Independent Directors held in terms of Schedule IVof the Act and Regulation 25(3) of the Listing Regulations are given in the CorporateGovernance Report.
M/s G. P. Agrawal & Co. Chartered Accountants (FRN 302082E) were appointed asStatutory Auditors of your company in the last Annual General Meeting held on 29thSeptember 2018 for a term of five consecutive years. The requirement to place the matterrelating to appointment of Auditors for ratification by members at every Annual GeneralMeeting is done away by Companies Amendment Act 2017 vide notification dated May 7 2018issued by the Ministry of Corporate Affairs New Delhi.
There is no qualification reservation adverse remark or disclaimer given by theAuditors in their report. Clarification/explanation on remarks in Independent Auditors'Report
a. In the comments of Auditors under para "EMPHASIS OF MATTER "regardingconfirmation of accounts the directors' states that all the balance confirmation lettershave been sent to respective vendors and customers confirmations from all have not beenreceived.
b. In Annexure B Point No. 1(b) of the Auditors' Report regarding physical verificationof fixed asset your Directors have to state that the physical verification of fixedassets is in progress and will be completed very soon. However management would reviewthe same.
c. As regards delay in payment of undisputed statutory dues mentioned in annexure Bpoint no. 7(a) to the Auditors' Report it is submitted that it was due to the continuousadverse financial condition and no banking facility currently available to the Company.However we hereby submit that all the statutory dues relating to the financial year201819 have since been paid. Since the cash inflows of the Company are becoming betterthe Company is endeavoring to deposit all its statutory dues within the due dates.
Cost Audit is not applicable to the Company.
Your Board appointed M/s. AL & Associates Practicing Company Secretaries toconduct secretial audit of the Company for the financial year ended 31st March2019. The report of the M/s. AL & Associates is provided in the "Annexure A"forming part of this report pursuant to Section 204 of the Act.
The Company has neither accepted nor renewed any deposits as envisaged in Section 73 ofthe Companies Act 2013 during the year under review.
KEY MANAGERIAL PERSONNEL:
Pursuant to the provisions of Section 203 of the Act the Key Managerial Personnel ofthe Company are Mr. S L Agarwal Managing Director Mrs. Sima Jhunjhunwala ChiefFinancial Officer and Mrs. Sweta Biyani Company Secretary (Resigned on 29thMarch 2019). Details pertaining to their remuneration have been provided in the Extractof Annual Return annexed hereto and forming part of this Report.
COMMITTEES OF THE BOARD:
Pursuant to various requirements under the Act and the Listing Regulations the Boardof Directors has constituted various committees such as Audit Committee Nomination &Remuneration Committee Stakeholders Relationship Committee Corporate SocialResponsibility Committee and Share Transfer Committee. The details of composition termsof reference etc. pertaining to these committees are mentioned in the CorporateGovernance Report.
All recommendations made by the Audit Committee during the year were accepted by theBoard.
The Company has in place a Whistleblower Policy to deal with unethical behaviorvictimization fraud and other grievances or concerns if any. The aforementionedwhistleblower policy is available on the Company's website at the following web- link:https://www.webelsolar.com/investor-corner/corporate-governance.
POLICY ON SELECTION AND REMUNERATION OF DIRECTORS:
Based on the recommendation of the Nomination & Remuneration Committee the Policyon Selection & Remuneration of Directors Key Managerial Personnel and other employeeswas revised and adopted by the Board of Directors at their meeting held on 21.08.2017. Thesaid policy was made applicable w.e.f 01.10.2017.
Pursuant to the provisions of the Act and Regulation 17 of the Listing Regulations theBoard has carried out the evaluation of its own performance and that of its Committees aswell as evaluation of performance of the individual directors. The manner in which theevaluation has been carried out has been explained in the Corporate Governance Reportattached to this Report.
LISTING OF SECURITIES IN STOCK EXCHANGES
The shares of the Company are listed on Bombay Stock Exchange Limited and NationalStock Exchange of India Limited. Outstanding FCCBs of the Company are listed on SingaporeStock Exchange in whole sale market.
CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING
In terms of the Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992 your Company has adopted the Code of Conduct for Prevention of InsiderTrading approved by Board of Directors inter alia prohibits trading in securities ofthe Company by Directors and employees on the basis of unpublished price sensitiveinformation in relation to the Company.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNING AND OUTGO
Information in accordance with the provisions of Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 regardingconservation of energy technology absorption foreign exchange earnings and outgo aregiven in the "Annexure B" which forms part of this report.
RISK MANAGEMENT POLICY:
The policy on risk assessment and minimization procedures as laid down by the Board areperiodically reviewed by the Audit Committee and the Board. The policy facilitates inidentification of risks at appropriate time and ensures necessary steps to be taken tomitigate the risks. Brief details of risks and concerns are given in the ManagementDiscussion and Analysis Report.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return in form MGT - 9 is given in "Annexure C" to theReport..
MATERIAL CHANGES AND COMMITMENTS:
There are no material changes and commitments affecting the financial position of theCompany between the end of the financial year i.e. 31st March 2019 and thedate of this Report.
SIGNIFICANT AND MATERIAL ORDERS:
There are no significant/ material orders passed by the Regulators / Courts / Tribunalswhich would impact the going concern status of the Company and its future operations.
INTERNAL FINANCIAL CONTROLS:
The Company has in place adequate internal financial controls with reference to thefinancial statements. During the year such controls were reviewed and no reportablematerial weakness was observed
ANNUAL CSR REPORT
The Company has formed CSR Committee at the end of the financial year 2016-17. Sincethere was loss in the profit and loss account company could not spend any amount for CSRactivities.
MANAGERIAL REMUNERATION AND PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofmanagerial personnel and employees of the Company is attached herewith in "AnnexureD".
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
In line with the requirements of Companies Act2013 and Listing Regulations yourcompany has formulated a Policy on Related Party Transactions which is also available onthe Company's website at https://www.webelsolar.com/investorscorner/corpoarte-governance.The policy intends to ensure that proper reporting approval and disclosure processes arein place for all the transaction between the Company and Related Parties.
All related party Transactions are in place before the Audit Committee for review andapproval. All related party transactions that were entered into during the financial yearwere on arm's length basis and were in the ordinary course of the business. There are nomaterially significant related party transactions made by the Company with promoters keymanagerial personnel or other designated persons which may have potential conflict withinterest of the Company at large. Necessary disclosure regarding transactions with relatedparties has been made in the Notes to the Audited Accounts.
All related party transactions entered during the year were in ordinary course of thebusiness and at arm's length basis. No material related party transactions i.e.transactions exceeding 10% of the annual consolidated turnover as per the latest auditedfinancial statement were entered during the year by our company. Accordingly thedisclosure of related party transactions as required under section 134(3)(h) of theCompanies Act2013 in Form AOC-2 is not applicable.
PARTICULARS OF LOANS GURANTEES OR INVESTMENTS UNDER SECTION 186
The Company has not given any Loan Guarantee or made any investments or provided anysecurity in violation of section 186 of Companies Act 2013.
STATE OF AFFAIRS OF THE COMPANY
Green energy in India is a growing industry and GOI is giving full support to theIndustry. Your company expects to utilize its full capacity in the financial Year2019-2020. There is no loan from banks on the balance sheet of the company except one loanfrom ARC.
CORPORATE GOVERNANCE REPORT
Maintaining high standards of Corporate Governance has been fundamental to the businessof the company since its inception. A separate report on Corporate Governance along with acertificate from the Auditors of the Company regarding Compliance of Conditions ofCorporate Governance as stipulated under Listing Regulations is annexed in Annexure Ewhich forms part of this report. A certificate of CFO of the company in terms of ListingRegulations inter alia confirming the correctness of financial statements and cash flowstatements adequacy of internal control measures is also annexed.
The extract of annual return in Form MGT-9 as required under section 92(3) of theCompanies Act and Rule 12 of the companies (Management and Administration) Rules2014 isappended as an Annexure to this Annual Report.
SEXUAL HARASSMENT AT WORKPLACE
As Your Company has in place a formal policy for prevention of sexual harassment of itsemployees at workplace. During the year there were no cases filed pursuant to the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
DIRECTORS' RESPONSIBILITY STATEMENT
We the Directors of the Company hereby confirm that pursuant to provisions ofsection 134(5) of the Companies Act 2013 in respect of financial year under review:
i) In the preparation of the Annual Accounts for the financial year ended 31st March2019 the applicable accounting standards have been followed and there are no materialdepartures from the same;
ii) We have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year as at 31st March2019 and of the Profits of the Company for that period;
iii) We have taken proper and sufficient care 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; and
iv) We have prepared the annual accounts on a "going concern" basis.
v) We have laid down internal financial controls for the Company and that such internalfinancial controls are adequate and operating effectively.
vi) We have devised proper systems to ensure compliance with the provisions of allapplicable laws and such systems were adequate and operating effectively
The directors place on record their deep appreciation to employees at all levels fortheir hard work dedication and commitment towards their duty leading to cordialindustrial relations.
The board places on record its appreciation for the support and co-operation thecompany has been receiving from its suppliers distributors retailers business partnersand others associated with it as its trading partners. The company looks upon them aspartners in its progress and has shared with them the rewards of the growth.
The Board of Directors take this opportunity to place on record its deep sense ofgratitude for the continued support assistance and co-operation received from the all theshareholder Customers Vendors Government Authorities and Banks.
| ||On behalf of the Board of Directors || |
| ||For WEBSOL ENERGY SYSTEM LIMITED || |
| ||Sd/- ||Sd/- |
|Date: 29th August 2019 ||S. L. Agarwal ||D. Sethia |
|Place : Kolkata ||(Managing Director) ||Independent Director |
ANNEXURE - "D" TO THE DIRECTORS' REPORT
The information required under Section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow:
a. The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year:
|Executive Director ||Ratio to Median Remuneration |
|Mr. S L AGARWAL ||54.63 |
|Mrs. Sima Jhunjhunwala ||11.42 |
|Independent Director || |
|Mr. Dharmendra Sethia ||0.98 |
|Mr. Prateek Kaushik ||0.98 |
|Mr. Ritesh Ojha (Joined from 14.11.2018) ||0.24 |
b. The percentage increase in remuneration of each Director Chief Executive OfficerChief Financial Officer Company Secretary in the Financial Year:
|Directors Chief Executive Officer Chief Financial Officer and Company Secretary ||% increase in remuneration in the Financial year |
|Mr. S L Agarwal ||NIL |
|Mrs. Sima Jhunjhunwala ||NIL |
|Mrs. Sweta Biyani ||NIL |
c. The percentage increase in the median remuneration of employees in the Financialyear: NIL
d. The number of permanent employees on the rolls of Company: 265
e. The explanation on the relationship between average increase in remuneration andCompany performance:
On an average employees received an annual increase of NIL because of the weakfinancial performance during the financial year 2018-19. Individual increase varied from 5to 15%. Increase is always trend with industry norms and individual employee's appraisalis based on organizational performance apart from individual performance.
f. Comparison of the remuneration of the key managerial personnel against theperformance of the Company:
|Aggregate remuneration of Key Managerial Personnel (KMP) in F Y 2018-19 (Rs in lakh) ||111.31 |
|Revenue (Rs. in lakh) ||6855.84 |
|Remuneration of KMPs (as % of revenue) ||1.62 |
|Profit before Tax (PBT) (Rs. in lakh) ||(2894.55) |
|Remuneration of KMP (as % of PBT) ||NA |
g. Variations in the market capitalization of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year: Please referseparate sheet. - No Sheet attached
|Particulars ||March 31 2019 ||March 31 2018 ||% change |
|Market Capitalization (Rs. Crores) ||125.24 ||235.41 ||-5.26% |
|Price Earnings Ratio ||(4.49) ||83.25 ||81.16% |
h. Public offer:
No Public offer during the Financial Year 2018-19
i. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:
j. Comparison of each remuneration of the key managerial personnel against theperformance of the Company:
|Particulars ||Mrs. Sima Jhunjhunwala ||Mrs. Sweta Biyani |
|Remuneration in F.Y. 2018-19 (Rs. in lakh) ||18.86 ||2.19 |
|Revenue (Rs. in lakh) ||6855.84 ||6855.84 |
|Remuneration as % of revenue ||0.28 ||0.03 |
|Profit before Tax (PBT) (Rs. in lakh) ||(2894.55) ||(2894.55) |
|Remuneration (as % of PBT) ||NA ||NA |
k. The key parameters for any variable component of remuneration availed by thedirectors: NA
l. The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year: NA
m. Affirmation that the remuneration is as per the remuneration policy of the Company:
The Company affirms remuneration is as per the remuneration policy of the Company.
Statement of Particulars of Employees as required under Section 197(12) of theCompanies Act 2013 read with Rule 5(2) and (3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 (as amended) 1 2 3 4
|Name ||Designation Nature of Duties ||Remuneration (Rs.) ||Qualification and experience (years) ||Age (years) ||Date of commencement of employment ||Last employer designation |
|Employed throughout the financial year 2018-19 || || || || || || |
|Mr. S L Agarwal ||Managing Director ||9025906 ||B.COM(HONS) ||73 ||12-02-1982 ||- |
|Employed for part of the financial year 2018-19 (If any employee was not employed for full year then details of that employees should be disclosed here if his / her remuneration was more than Rs. 5 lakhs per month) || || || || || || |
| || || ||N.A || || || |
1. Remuneration includes salary company's contributions to provident and other fundsbonus allowances and monetary value of perquisites.
2. Except the appointment of directors all appointments are non-contractual andterminable by notice on either side.
3. No employee is a relative of any director of the Company.
4. None of the employees are covered under Rule 5(2)(ii) and (iii) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 (as amended).k.Comparison of each remuneration of the key managerial personnel against the performance ofthe Company.