BOARD'S REPORT Dear Members The Directors are pleased to present 5th Board's Report of the Company along with the Audited Financial Statements of the Company for the financial year ended 31st March, 2015. We would like to share with you the highlights during the year 2014 - 2015: Summary of Performance As the Members are aware that our Company was previously engaged only in generation of power from renewable energy resources and in the mid of March, 2014 it started operation in its reclaimed rubber division. Consequently, the financials of current year and the previous year are not comparable. During the year, net revenue from operations of the Company stood at Rs. 552.79 Lacs. For the Financial Year ended 31st March 2015, due to adverse economic scenario to the reclaimed rubber industry and higher fixed operating cost, Company was not able to report profits. However, Company's reclaimed division is gradually contributing to gross income of the Company and Management of the Company is positive about the better results in upcoming years. Further, the Company is focusing more on reducing its cost of operations and optimum utilization of its resources. Dividend In the financial year under review, Company has not earned profit, therefore, the Board of Directors regret their inability to recommend any dividend for the year. Directors and Key Managerial Personnel In accordance with the provisions of Companies Act, 2013 and as per Articles of Association of the Company Dr. Arun Gopal Agarwal, Director retire by rotation at the forthcoming Annual General Meeting and being eligible, offer himself for reappointment. As per the provisions of Companies Act, 2013, amended Listing Agreement and Notification issued by SEBI regarding Composition of Board of Directors including eligibility criteria and qualification of Independent Directors and appointment of at least one Woman Director in the Board of the specified Companies. Accordingly, in August, 2014 your Company has made suitable changes in the composition of the Board and appointed Mr. Naresh Kumar Jain and Mrs. Anshu Gupta as Additional Independent Directors on the Board of the Company and later on 30th September, 2014 at 4th Annual General Meeting their appointments have been regularized and they along with Mr. Rupinder Singh have been appointed as Independent Directors, not liable to retire by rotation. Further on 28th March 2015 Mr. Dharam Vir Gupta has been appointed as Additional Independent Director of the Company and Mr. Naresh Kumar Jain resigned from the Board of Directors. Appointment of Mr. Dharam Vir Gupta as Independent Director is proposed in forthcoming AGM. Details of Directors seeking appointment/re-appointment at the forthcoming Annual General Meeting, as required under clause 49 of Listing Agreement, is enclosed with the notice of Annual General Meeting. Criteria for Board Membership of the Company For the appointment of Directors, the Company shall take into account following points: Director must have relevant experience in Finance/ Law/ Management/ Sales/ Marketing/ Administration/ Research/ Corporate Governance/ Technical Operations or the other disciplines related to Company's business. Director should possess the highest personal and professional ethics, integrity and values. Director must be willing to devote sufficient time and energy in carrying out their duties and responsibilities. Director must be fit and proper person. Independent Director Independent Director is a Non-Executive Director, who does not have any direct or indirect material pecuniary relationship with the Company or any of its officers, other than as a Director or Shareholder of Company. Independent Director shall abide by the Code of Conduct as prescribed under Schedule IV of the Companies Act, 2013. Independent Director shall meet all criteria specified in Section 149(7) of the Companies Act, 2013 and rules made thereunder and Clause 49 of the Listing Agreement entered into with Stock Exchanges. Mr. Rupinder Singh, Mrs. Anshu Gupta and Mr. Dharam Vir Gupta are Independent Directors on the Board of the Company. In the opinion of the Board and as declared by these Directors, they comply with all the criteria of Independent Director as envisaged in Clause 49 of the Listing Agreement and Section 149(6) the Companies Act, 2013. Familiarization Programme for Independent Directors Every new Independent Director of the Board attends an orientation program, which is to familiarize the new Non-Executive Director with the strategy, operations and functions of the Company. The Executive Directors / Senior Managerial Personnel conduct meetings with the NonExecutive Directors to make them understand the Company's strategy, operations, product and organization structure, human resources, facilities and risk management. Through meetings and interaction among Senior Managements and Non-Executive Directors and Independent Directors, Company made its best effort to ensure that the Non-Executive Directors understand their roles, rights, responsibilities in the Company. Further, at the time of appointment of an Independent Director, the Company issues a formal letter of appointment outlining his/her role, function, duties and responsibilities as an Independent Director. The format of the letter of appointment is available on Company's website, Company's Policy on Directors' Remuneration Company has constituted Nomination and Remuneration Committee as required under Section 178 of the Companies Act, 2013 and the Clause 49 of the Listing Agreement which inter-alia has formulated Remuneration Policy ("the policy"). The Policy is framed in accordance with the provisions of Companies Act, 2013 and the Listing Agreement. In case of any subsequent changes in the provisions of Companies Act, 2013 and the Listing Agreement or any other regulation which makes any of the provisions of the policy inconsistent with the Act or regulations, the provisions of the Act or regulation shall prevail over the policy. The objective of the policy is to ensure and set the benchmark for the compensation being paid to Executive Directors and other employees and at the same time linking compensation with the performance. The Policy seeks to provide criteria for determining qualifications, positive attributes and expertise of a Director. Nomination and Remuneration Committee shall recommend the remuneration, including the commission based on the net profits of the Company, within the prescribed ceiling for the NonExecutive Directors and Whole-time Director and other Directors. This will be then approved by the Board and approval of shareholders will be obtained wherever applicable. Annual increments effective 1st April each year, as recommended by the Nomination and Remuneration Committee, and as approved by the Board. Remuneration to Non-Executive Directors may be paid in accordance with the applicable provisions of Companies Act, 2013 and the Rules made there under and other applicable Laws, if any. Independent Non-Executive Directors are appointed for their professional expertise in their individual capacity as independent professionals / Business Executives. Independent Non-Executive Directors shall be entitled for sitting fees, reimbursement of expenses, paid for attending the meeting of the Board and Board Committees and commission as approved by the Board or/and shareholders. The remuneration of employees largely consists of basic salary, perquisites, allowances and performance incentives. Perquisites and other benefits are paid according to the Company policy, subject to prescribed statutory ceiling. The components of the total remuneration vary for different grades and are governed by the industry pattern, qualification & experience / merits, performance of each employee. The Company while deciding the remuneration package takes into consideration current employment scenario and remuneration package of the industry. Board Evaluation The Companies Act, 2013 states that formal annual evaluation required to be made by Board of its own performance and that of its Committees and individual Directors and Schedule IV of the Companies Act, 2013 states that the performance of Independent Directors shall be evaluated by the entire Board of Directors, excluding the Director being evaluated. Further, Clause 49 of the Listing Agreement also mandates that the Board shall monitor and review the Board evaluation framework. Accordingly, the Board in consultation with the Nomination and Remuneration Committee, has laid down a policy for evaluation of performance of Executive / Non-Executive / Independent Directors. The Policy provides that the evaluation of performance of Board as whole, its Committees and Directors shall be carried out on annual basis and the Board may avail services of independent consultant to facilitate it for evaluating the performance of directors individually or collectively. During the year, evaluation of performance of all the Directors and the Board as a whole and its Committees was conducted based on the policy laid down by the Board. The Evaluation process focused on various aspect of the Board and Committees functioning such as composition of the Board and Committees, competencies and experiences, performance of duties and obligation assigned etc. A separate process was also carried out to evaluate the performance of individual Director on the criteria such as contribution in decision making, governance issue, independent judgment, experience and presence in the meetings of Board and Committees. The results of evaluations were satisfactory. On the basis of outcome of evaluation Board and Committees agreed to take effective steps to improve the performance of Directors individually and collectively. Directors' Responsibility Statement Pursuant to the requirement of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013 (the Act), your Directors confirm that: (a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) the Directors had 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 and of the profit and loss of the Company for that period; (c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (d) the Directors had prepared the annual accounts on a going concern basis; and (e) the Directors had laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and were operating effectively. (f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. Fixed Deposits Company has not accepted any public deposits within the meaning of Section 73 of Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014 and as such no amount of principal or interest on public deposits was outstanding as on the date of balance sheet. Subsidiary On 1st April, 2015, Company has acquired 100% shares of M/s Shubham Electrochem Limited and accordingly said Company becomes the 100% subsidiary of the Company in the financial year 2015-16. Statutory and Secretarial Audit M/s P M S & Co., Chartered Accountants, has been appointed as Statutory Auditor of the Company in 4th Annual General Meeting of the Company up to the conclusion of 6th Annual General Meeting of the Company subject to annual ratification. Accordingly, Board of Directors recommends the ratification for appointment of Statutory Auditor being eligible to continue as Statutory Auditor for financial year 2015-16. In pursuant to provisions of Section 204 of the Companies Act, 2013 and as a measure of good corporate governance practice, Board of Directors of the Company has appointed CS Dimple Sachdeva, Practicing Company Secretary, to conduct Secretarial Audit of the Company for the financial year 2014-15. The observations of Statutory Auditor and Secretarial Auditor in their reports read with notes thereto are self-explanatory and do not call for any further explanation. The Auditors of the Company have not given any adverse remark or disclaimer in their reports. The report of the Statutory Auditors and Secretarial Auditors are enclosed to this report. Risk Management In terms of the provisions of the Companies Act, 2013 and Listing Agreement, Risk Management Committee has been constituted by the Company to facilitate the Board of Directors to address the risk associate with the business of the Company and to develop and implement Risk Management Policy. The Risk Management Policy assists the Board in its oversight of the Company's management of key risks, including strategic and operational risks, as well as the guidelines, policies and processes for monitoring and mitigating such risks under the aegis of the overall business risk management framework. Internal Financial Controls Internal Financial Control System is an integral component of the Risk Management System of the Company. The internal financial control policies and internal audit program adopted by the Company plays an important role in safeguarding of Company's assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures. The Board has adopted procedures for ensuring the orderly and efficient conduct of its business, including risk management feedback loop, in which the information generated in the internal control process is reported back to Board and Management. A firm of Competent Chartered Accountants has been engaged by the Company for conducting internal audit, to examine and evaluate the adequacy and effectiveness of internal financial control system of the Company. The Audit Committee of Board of Directors, Statutory Auditors and the Business Heads are periodically apprised of the internal audit findings and corrective actions taken. The Audit Committee of Board of Directors actively review the adequacy and effectiveness of internal financial control system and suggests improvements for strengthening them. Internal Financial Control System of the Company modify continuously in accordance with the dynamic changes in the business condition and to comply with the applicable laws, regulations, statutory and accounting requirement Particulars of Contracts or Arrangements with Related Parties Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2, is annexed as Annexure 1 to the Board's report and policy on Related Party transaction is available on Company's website. Particulars of Employees In accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 information regarding employees is annexed as Annexure 2 to the Board's report. There was no employee in reporting financial year, whose details required to be given by the Company under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Extracts of Annual Return Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, Extracts of Annual Return in the prescribed form MGT-9 is annexed as an integral part of this Report as Annexure 3. Meetings of the Board The meetings of the Board were duly convened Nine (9) times during the financial year, details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013 Particulars of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo The particulars pursuant to Section 134(3)(m) of Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014 to the extent applicable are as under: (A) Conservation of energy- i. Company has made its efforts and adopted relevant measures for conservation of the energy. There is a marginal reduction in energy costs. We look forward for significant reduction in energy consumption and cost of production in coming years. ii. No step has been taken by the Company for utilization of alternate source of energy. However, Company at its non-conventional energy division generate electricity by using alternate sources of energy and transfer the same to power grids. iii. There are no significant proposal for additional capital investment on energy conservation equipment. Vigil Mechanism/ Whistleblower Policy Pursuant to the requirement of the Act, the Company has established vigil mechanism/whistleblower policy. Section 177 of the Companies Act, 2013 which inter-alia provides for a requirement to establish a mechanism for all the Directors and employees to report to the management instances of unethical behavior, actual or suspected fraud or violation of the Company's code of conduct or ethics policy. Accordingly, the Mechanism is established to provide adequate safeguards against victimization of persons who use such mechanisms. Whistleblower Policy is available on Company's website <http://www.sepower.in/docs/corp-govern-manual.pdf>. Prevention of Sexual Harassment at Workplace The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace and constituted a Committee in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under for prevention and redressal of complaints of sexual harassment at workplace. The Company has not received any complaint on sexual harassment during the financial year 2014-15. Corporate Governance The Company is committed to maintain the good standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The Company continues to benchmark its corporate governance policies in its true sense. The report on Corporate Governance as stipulated under the Listing Agreement forms an integral part of this Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance is annexed to the report on Corporate Governance. Management Discussion and Analysis Report In terms of Clause 49 of Listing Agreement, Management Discussions and Analysis Report is appended to this Board's Report. Acknowledgements We place on record our appreciation to employees at all level for their contribution, dedication and commitment. The Board take this opportunity to thank all Investors, Clients, Vendors, Banks, Government and Regulatory Authorities for their support, and look forward for their continued support in the future. For and on behalf of the Board Sd/- (Dr. Arun Gopal Agarwal) Chairman (DIN 00374421 Place : Delhi Date : 25-08-2015 |