REPORT OF THE DIRECTORS The Directors present herewith the Twenty Eighth Annual Report together with the Audited Standalone Accounts of the Company for the year ended March 31, 2015 OPERATIONS: The Company is in the process of setting up Thermal Power Projects at various locations more particularly in Tamilnadu. The project at Tamilnadu is consisting of 3X660 MW i.e. 1980 MW capacity is being set up ¦' by the Wholly Owned Subsidiary SRM Energy Tamilnadu Pvt. Ltd. As such there are no other operations at present and the related expenses incurred during the current period are considered as pre operative expenses pending allocation to the power project. The Company proposes to induct financial / strategic investor into the subsidiary to take care of the equity requirements. Subsequently, significant portion of the debt requirements is proposed to be met through loans from the Chinese Banks Consortium. For meeting the domestic debt requirements, the.Company proposes to mandate one of the leading banks / financial institutions. Though the Group's networth has been significantly reduced and it has been incurring cash losses, the promoters have infused funds by way of unsecured loan and are committed to provide necessary funding to meet the liabilities and future running expenses of the Group. Further, the Board of Directors of the Company, in its meeting held on March 09, 2015 have decided to sell/dispose off the Power plant transferred in its wholly owned subsidiary, subject to necessary approvals from the shareholders and other statutory authorities, if any. In view of above developments, the accounts have been prepared under going concern basis. The power plant in the wholly owned subsidiary, which is intended to be sold /disposed off as explained above, is in Pre-operative stage and no expenses have been charged to Statement of Profit and Loss. Accordingly, the loss for the year does not include any loss relating to ordinary activities attributable to discontinuing operations. DIVIDEND As the Power project is under implementation and there is no operating income, your directors are not in a position to recommend any dividend. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report. CONSOLIDATED FINANCIAL STATEMENT In accordance with the Companies Act, 2013 ("the Act") and Accounting Standard (AS) - 21 on Consolidated Financial Statements read with AS - 23 on Accounting for Investments in Associates and AS - 27 on Financial Reporting of Interests in Joint Ventures, the audited consolidated financial statement is provided in the Annual Report. SUBSIDIARY COMPANY & RELATED COMPLIANCES Your Company has one wholly owned subsidiary company viz. SRM Energy Tamilnadu Private Limited, which does not have any operations at present. A report on the performance and financial position is provided as Note 25 to the consolidated financial statement and hence not repeated here for the sake of brevity. • No Companies which have become subsidiaries during the financial year 2014-15: • No Companies which ceased to be subsidiaries during the financial year 2014-15: • No company has become/ceased to be a joint venture or associate during the financial year 2014-15. The Policy for determining material subsidiaries as approved may be accessed on the Company's website at the link: <http://www.srmenerqy.in/Data/Documents> SRM% 20Enerav %20-%20OD%20-%20Policv%20 for%20 Determinina%20 Material% 20 Subsidiarv.pdf However, the annual accounts of the subsidiary company and the related detailed information are available to the shareholders of the holding and subsidiary companies seeking such information at any point of time. The annual accounts of the subsidiary company are kept for inspection by any shareholder at the Registered office of the holding company and of the subsidiary company concerned and a note to the above effect will be included in the annual report of the holding company. DIRECTORS' RESPONSIBILITY STATEMENT Your Directors state that: a) in the preparation of the annual accounts for the year ended March 31,2015, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same; b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,2015 and of the profit of the Company for the year ended on that date; c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) the Directors have prepared the annual accounts on a 'going concern' basis; e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. CORPORATE GOVERNANCE Your Company has implemented the conditions of Corporate Governance as contained in Clause 49 of listing agreement. Separate reports on Corporate Governance along with necessary certificates are given elsewhere in this Annual Report. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis, During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at the link: <http://www.srmenergy>. in/Data/Documents/SRM%20Energv%20-%20OD%20-%20Policv%20on%2QDealina%20with%20 Related%20Partv%20Transactions.pdf Your Directors draw attention of the members to Note 22 to the financial statement which sets out related party disclosures. RISK MANAGEMENT During the year, your Directors have constituted a Risk Management Committee which has been entrusted with the responsibility to assist the Board in (a) Overseeing and approving the Company's enterprise wide risk management framework; and (b) Overseeing that all the risks that the organization faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks. The Company manages, monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. INTERNAL FINANCIAL CONTROLS The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed. DIRECTORS AND KEY MANAGERIAL PERSONNEL In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Vishal Rastogi, Managing Director of the Company will retire by rotation at the forthcoming Annual General Meeting and being eligible have offered themselves for re-appointment as Director of the Company, liable to retire by rotation, in the said meeting. Mr. Gagan Rastogi, Director of the Company resigned from the Board on November 14, 2014. The Board places on record its deep appreciation for the valuable contribution made by him during his tenure as Director of the Company. During the year under review, the members approved the appointments of Ms. Tanu Agarwal as an Additional Director of the Company pursuant to the provisions of Sections 161 of the Companies Act, 2013, and Article 170 of the Company's Articles of Association under Non Executive Women Director Category w.e.f. April 01, 2015. In terms of Section 161(1) of the Act, Ms. Tanu Agarwal holds office only upto the date of the forthcoming AGM but is eligible for appointment as a Director. A notice under Section 160(1) of the Companies Act, 2013, has been received from a Member signifying its intention to propose the appointment of Ms. Tanu Agarwal as a Director of the Company, subject to approval of the Members in.the ensuing annual general meeting, whose office shall be liable to retire by rotation. The Resolutions seeking approval of the members for their appointment as Directors have been incorporated in the Notice Convening the Annual General Meeting. Presently, Mr. Pranav Kumar, Mr. Sameer Rajpal and Mr. Vijay Sharma are the Independent Directors of the Company. Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and Clause 49 of the Listing Agreement with the Stock Exchanges. The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which include criteria for performance evaluation of the nonexecutive directors and executive directors. On the basis of the Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors, a process of evaluation was followed by the Board for its own performance and that of its Committees and individual Directors. The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company at the link: <http://www>. srmenerov.in/Data/Documents/SRM%20Energv%20-%2QOD%20-%20 Famiiiarisation%20Process%20 Policv.pdf The following policies of the Company are attached herewith marked as Annexure 1 and Annexure 2: 1) Policy for selection of Directors and determining Directors independence; and 2) Remuneration Policy for Directors, Key Managerial Personnel and other employees. Brief profile of the Director proposed to be reappointed as required under Clause 49 of the Listing Agreement are annexed to the Notice of Annual General Meeting forming part of this Annual Report. AUDITORS AND STATUTORS'S REPORT Statutory Auditors The present Statutory Auditors of the Company M/s Haribhakti & Co., Chartered Accountants (CAs), (Firm registration No. 103523W) Mumbai, have resigned on August 13, 2015. In view of the above, the Board received a proposal to appoint M/s Vatss & Associates, Chartered Accountants, Gurgaon, (Firm registration No. 017573N, as Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting (AGM) until the conclusion of the Thirty Third AGM of the Company to be held in the year 2020 (subject to ratification of their appointment at every AGM), to examine and audit the accounts of the Company at Mumbai. They have confirmed their eligibility to the effect that their appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re-appointment. Statutors's Report Though the Group's networth has been significantly reduced and it. has been incurring cash Ipsses, the promoters have infused funds by way of unsecured loan and are committed to provide necessary funding to meet the liabilities and future running expenses of the Group. Further, the Board of Directors of the Company, in its meeting held on March 09,2015 have decided to sell / dispose off the Power plant transferred in its wholly owned subsidiary, subject to necessary approvals from the shareholders and other statutory authorities, if any. In view of above developments, the accounts have been prepared undergoing concern basis. The power plant in the wholly owned subsidiary, which is intended to be sold / disposed off as explained above, is in Pre-operative stage and no expenses have been charged to Statement of Profit and Loss. Accordingly, the loss for the year does not include any loss relating to ordinary activities attributable to discontinuing operations. The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark. Secretarial Auditor The Board has appointed Mrs. Ritika Agarwal, Practising Company Secretary, to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith marked as Annexure 3 to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. DISCLOSURES; Audit Committee The Audit Committee comprises Independent Directors namely Mr. Sameer Rajpal -Chairman, Mr. Vijay Sharma and Mr. Vishal Rastogi as other members. All the recommendations made by the Audit Committee were accepted by the Board. Vigil Mechanism The Vigil Mechanism of the Company, which also incorporates a whistle blower policy in terms of the Listing Agreement, includes an Ethics & Compliance Task Force comprising senior executives of the Company. Protected disclosures can be made by a whistle blower through an e-mail, or dedicated telephone line or a letter to the Task Force or to the Chairman of the Audit Committee. The Policy on vigil mechanism and whistle blower policy may be accessed on the Company's website at the link: <http://www.srmenerov.in> /Data/ Documents/ SRM%20 Energy%20-%20OD%20-%20Whistle%20 Blower.pdf Meetings of the Board Seven meetings of the Board of Directors were held during the year, For further details, please refer report on Corporate Governance of this Annual Report. Particulars of Loans given, Investments made, Guarantees given and Securities provided Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statement, Extract of Annual Return Extract of Annual Return of the Company is annexed herewith as Annexure 4 to this Report. Particulars of Employees and related disclosures Since no employee is receiving remuneration in excess of limit specified under the provisions of provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Statement of particulars of employees do not form part of the report. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo Statement of particulars under Section 134(3)(m) the Companies Act, 2013 read with relevant Rules regarding Conservation of Energy and Technology Absorption are presently not applicable to the Company. GENERAL Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review: 1. Details relating to the Corporate Social Responsibility and Governance indicating the activities to be undertaken by the Company, as the Section 135 of the Act are not applicable to the Company 2. Details relating to deposits covered under Chapter V of the Act. 4. Issue of equity shares with differential rights as to dividend, voting or otherwise. 5. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this Report. 6. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries. 7. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. 8. Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal )Act, 2013. APPRECIATION Your Directors wish to express their sincere appreciation to the Central Government, the State Governments, bankers and the business associates for their excellent support and look forward to continued support in future. Your Directors wish to place on record their appreciation to the employees at all levels for their hard work, dedication and commitment. For and on behalf of the Board of Directors Chairman Place: Gurgaon, Dated: August 13, 2015. |