Directors' Report Dear Shareholders, Your Directors are pleased to present the Twenty Fifth Annual Report and the Audited Accounts for the financial year ended 31st March, 2015. OPERATIONS During the year under review your company was able to utilize the manufacturing capacity at its optimum. Sales have increased, there by company was able to make cash profit amounting to Rs. 376.51 lacs. The concerned Government department is in the process of initiating the imposition of anti-dumping duty on imports of solar cells and modules and has at the same time outlined the requirement of domestic content under various solar schemes to revive the industry. These positive steps will help your Company to augment its sales and profitability. During the financial year under review your company reported total revenue of Rs. 35,655.37 Lacs against Rs. 30,590.68 Lacs during the last financial year. The company suffered a loss of Rs. 5,236.56 Lacs after providing Rs. 1,626.33 Lacs towards depreciation and Rs. 207.06 Lacs towards interest during the current financial year as compared to a loss of Rs. 7,434.57 Lacs in the last financial year. DIVIDEND Due to the losses as reported, the Board of Directors of your company could not recommend any dividend for the financial year ended 31st March, 2015. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND In terms of Section 125 of the Companies Act, 2013, the unclaimed or unpaid Dividend for the Financial Year 2007-08 and 200809 is due for remittance to the Investor Education and Protection Fund established by the Central Government in 2015 and 2016 respectively. DIRECTORS A) Changes in Directors and Key Managerial Personnel During the year Mr. B.R. Sengupta, Independent Director and Mr. Sudaata Mandall, Nominee Director, has resigned from the Board w.e.f 1st October, 2014 and 28th November, 2014 respectively, your Directors place on record their deep appreciation for the valuable contribution made by them. Mr. S. L. Agarwal, Managing Director would retire by rotation and, being eligible, offer himself for re-appointment Mr. Prateek Kaushik and Mrs. Sima Jhunjhunwala has been appointed as Directors of the Company w.e.f. 11th February, 2015 and 14th August, 2015 pursuant to the provisions of Section 161(4) and 149(1) of the Companies Act, 2013, respectively who holds office upto the date of this Annual General Meeting. Resolutions are proposed for your approval for their appointment as Directors. Mr. S. Beriwal, Chief Financial Officer, resigned from the office w.e.f 16th June, 2014 and Mr. Anup Kr. Agarwal has been appointed in his place. B) Declaration by an Independent director(s) All Independent directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and clause 49 of the Listing Agreement. STATUTORY AUDITORS As per Section 139 and other applicable provisions of the Companies Act, 2013 the Company has appointed M/s. Agarwal Sanganeria & Co., Chartered Accountants (Registration No. 317224E) as the Auditors as per the approval of the shareholders in Annual General Meeting (AGM) held on 25th August, 2014, for a further period of three years till the conclusion of 27th Annual General Meeting of the Company subject to ratification by the shareholders in every AGM of the Company, on the remuneration and other terms and conditions as may be fixed by the Board of Directors. The Board recommends the ratification by the shareholders regarding their reappointment. STATUTORY AUDITORS' REPORT a. As regards delay in payment of undisputed statutory dues mentioned in para 11(f)(i) of the Annexure to the Auditors' Report, it is submitted that it was due to the adverse financial condition as well as non-realization of receivables in time and that the same will be paid in due course of time together with applicable interest, if any. b. As regards the delay in the repayment of the principal sums and interest thereon to the banks / financial institutions mentioned in para (ix) of the Annexure to the Auditors' Report, it is submitted that it was due to continued losses incurred by the Company, however the co is under the process of OTS with the Consortium banks. c. With reference to point no 11(f)(iii) of the audit report it is hereby clarified that the delay by a month in transferring the amount to IPF was purely unintentional. As the transfer involve other outsiders and intermediaries in the same and so the whole process of transferring the said amount was delayed due to some procedural requirements which took an exceptional amount of additional time in getting due clearance. d. As regard FCCB, mentioned in para 11(e) of the Auditors' Report, the bond holder is still holding the bonds which were expired and his status is now unsecured creditor. Company is approaching RBI for negotiation for settlement with the Bond Holder. COST AUDIT The Company has filed the cost audit report for the financial year ending 31st March 2014, on 15th October, 2014. SECRETARIAL AUDIT Pursuant to the provisions of Section 204(1) of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company has appointed Ms. Sneha Agarwal, Company Secretary in practice for the financial year 2014-15 to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as Annexure C. APPLICABILITY OF SECTION 15 OF SICK INDUSTRIAL COMPANIES ACT, 1985 (SICA) The accumulated losses of the company continued to be more than its net worth and as per the provisions of Section 15 of the Sick Industrial Companies Act, 1985, the Company has made reference to Board for Industrial and Financial Reconstruction (BIFR) which was duly registered and its outcome is awaited. DEPOSITS The Company has neither accepted nor renewed any deposits under Section 73 of the Companies Act, 2013 during the year under review. LISTING OF SECURITIES IN STOCK EXCHANGES The shares of the Company are listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited. 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 Insider Trading. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNING AND OUTGO Information in accordance with the provisions of Section 134(3)(m)of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 regarding conservation of energy, technology absorption, foreign exchange earnings and outgo are given in the Annexure -A, which forms part of this report. EXTRACT OF ANNUAL RETURN The extract of Annual Return in form MGT - 9 is given in Annexure B to the Report. ANNUALCSRREPORT Not applicable. 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 of managerial personnel and employees of the Company is attached herewith in Annexure D. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES All related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the Company with promoters, key managerial personnel or other designated persons which may have potential conflict with interest of the Company at large. Necessary disclosure regarding transactions with related parties has been made in the Notes to the Audited Accounts. Further, the particulars of every contract or arrangements entered into by the Company during the year with related parties as per Section 188(1) of the Companies Act, 2013 is disclosed in form AOC 2 in Annexure E. CORPORATE GOVERNANCE REPORT As required under Clause 49 of the Listing Agreement with the Stock Exchanges, a report on Corporate Governance along with a certificate from the Auditors of the Company regarding Compliance of Conditions of Corporate Governance, certification by CEO & CFO and the Management Discussion & Analysis Report are given in the enclosed Annexure - F, which forms part of this Report. DIRECTORS' RESPONSIBILITY STATEMENT We, the Directors of the Company, hereby confirm, pursuant to provisions of section 134 (5) of the Companies Act, 2013, in respect of financial year under review: i) That in the preparation of the Annual Accounts for the financial year ended 31st March, 2015, the applicable accounting standards have been followed and there are no material departures from the same; ii) That we 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 at the end of the financial year as at 31st March, 2015 and of the loss of the Company for that period; iii) That we have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing, and detecting fraud and other irregularities; and iv) That we have prepared the annual accounts on a "going concern" basis. ACKNOWLEDGEMENTS The Board of Directors take this opportunity to place on record its deep sense of gratitude for the continued support, assistance and co-operation received from the Customers, Vendors, Government Authorities and Banks during the year under review. The Board is also grateful to the shareholder for their support. The Board is also thankful to the employees of the Company for their contribution, support and commitment towards their duty leading to cordial industrial relations during the year under review. On behalf of the Board of Directors, For WEBSOL ENERGY SYSTEM LIMITED Sd/- S. L. Agarwal (Managing Director) (00189898) Sd/- D. Sethia (Director) (06775533) Date: 14th August 2015 Place : Kolkata |