DIRECTORS REPORT
Dear Shareholders,
Your Directors have pleasure in presenting the Thirty First Annual Report of the
Company together with the Audited financial Statements for the financial year ended 31st
March, 2018:
1. Financial Results
Particulars |
|
( Rs. Lakhs) |
|
31st March, 2018 |
31st March, 2017 |
Income from Operations |
42.84 |
106.31 |
Less: Duties and Taxes |
|
0.00 |
Net Income from Operations |
42.84 |
106.31 |
Other Income |
41.89 |
7.97 |
Profit(+)/Loss(-) Before depreciation, Interest and Tax |
(146.95) |
(170.11) |
Interest & Financial Charges |
3.51 |
1.80 |
Depreciation |
6.51 |
30.80 |
Exceptional items |
2.31 |
72.95 |
Profit(+)/Loss(-) Before Tax |
(158.92) |
(275.66) |
Provision for Income Tax |
0.00 |
0.00 |
Deferred Tax |
0.00 |
0.00 |
Prior period adjustments |
0.00 |
0.00 |
Profit(+)/Loss(-) After Tax |
(158.92) |
(275.66) |
Dividend (%) |
0.00 |
0.00 |
Equity Capital (Rs.) |
227743970 |
227743970 |
Earnings per Share (Rs.) |
-0.70 |
-1.21 |
2. Results of Operations and State of the Companys Affairs
During the year, your Company has achieved Rs. 42.84 lakhs revenues as compared to
previous year revenues of Rs. 106.31 lakhs. The company has incurred a loss of Rs. 158.92
lakhs as against a loss of Rs. 275.66 lakhs for the previous year.
3. Dividend
Your Directors express their inability to recommend dividend during the year due to
non-availability of surplus.
Certifications
Your company has automated state-of-the-art manufacturing facilities and sophisticated
equipments to manufacture high quality telecom and energy products. Your company is an ISO
9001:2000 certified Company. It has a system driven process for manufacturing of various
products and has a set of well defined quality process at every stage of production to
ensure delivery of high quality products and services.
SPV modules are made as per ISO 9001:2000 international quality standards and are
certified for UL, German TV certification and IEC certification.
4. Particulars of Loans, Guarantees or Investments
The Company has given loan in the form of advances to its Joint Venture Company i.e.
Saptashva Solar Limited. The details of the loan given by the company are given in the
notes to the financial statements. The advances were provided over the year for day to day
funding of expenses of the Joint Venture company for payments towards its statutory
liabilities and expenses for performing the Annual Maintenance Contracts of the JV
company.
5. Transfer to Reserves
There is no profit earned or positive generation of cash during the year, hence the
directors have not proposed to transfer any amount to reserves during the financial year
under review.
6. Internal Financial Control Systems and their adequacy
The Company has does not have adequate system of internal control due to low and
negligible quantum of operations. However, the transactions are properly authorized,
recorded and reported to the Management. The Company is following all the applicable
Accounting Standards for properly maintaining the books of accounts and reporting
financial statements.
7. Related Party Transactions
None of the transactions with related parties falls under the scope of Section 188(1)
of the Act.
8. Fixed Deposits
Your Company has not accepted any deposits and as such, no amount of principal or
interest was outstanding on the date of the Balance Sheet.
9. Change in the nature of business, if any
There is no material change in the nature of business affecting the financial position
of the Company for the year ended March 31, 2018.
10. Joint Venture
M/s Saptashva Solar Limited engaged in Erection, Procurement and Commissioning of Solar
Panels is the Joint Venture of your Company where your Company holds 48.97% equity stake.
Information on Joint Venture pursuant to Section 129(3) of the Act read with rule 5 of the
Companies (Accounts) Rules, 2014 is given in Annexure - 2 in Form AOC-2 and the same forms
part of this report.
11. Subsidiary Company
M/s Saptashva Solar SA, Spain is the wholly owned subsidiary of your Company.
Information on Subsidiary pursuant to Section 129(3) of the Act read with rule 5 of the
Companies (Accounts) Rules, 2014 is given in Annexure - 1 in Form AOC-1 and the same forms
part of this report.
12. Directors and Key Managerial Personnel
Mr Aneesh Mittal, Director retires by rotation at the ensuing Annual General Meeting
and, being eligible, offers himself for re-appointment.
Mr. Aneesh Mittal, Whole time Director shall be re-appointed for a period of one year
with effect from 26th October, 2018. Mr Dinesh Kumar, Managing Director of the
Company whose tenure is due for expiry on 31st May, 2018 has been reappointed
for a further period of five years w.e.f. 01st June, 2018 at the Board Meeting
held on 30th May, 2018 by passing an ordinary resolution which shall be
ratified by the shareholders in the Annual General Meeting.
For the perusal of the shareholders, a brief resume of the Directors being appointed/
re-appointed along with necessary particulars is given in the explanatory statement to the
notice. The Board of Directors recommend the re-appointment.
13. Statement on declaration given by Independent Directors under Section 149(6) of the
CompaniesAct, 2013
The Independent Directors have submitted a declaration that each of them meets the
criteria of Independence as provided in Section 149(6) of the Act and there has been no
change in the circumstances which may affect their status as Independent Director during
the year.
14. Policy on Directors Appointment and Remuneration and other details
The Company's policy on Directors' appointment and remuneration and other matters
provided in Section 178(3) of the Act has been disclosed in the Corporate Governance
Report, which forms part of the Directors' Report.
15. Number of Meetings of the Board
Five meetings of the Board were held during the year viz. 05th June, 2017,
16th August, 2017, 14th September, 2017, 14th December,
2017 and 14th February, 2018.
16. Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, the Board carried out an annual performance
evaluation of its own as well as the evaluation of the working of its Audit, Nomination
& Remuneration and Stakeholders Relationship Committees.
17. Audit Committee
The details pertaining to the composition of Audit Committee are included in the
Corporate Governance Report, which forms part of this report.
18. Statement on Compliance of applicable Secretarial Standards
The Company has complied with the applicable Secretarial Standards issued time to time
by the Institute of Company Secretaries of India.
19. Risk Management Policy
Although the company has long been following the principle of risk minimization as is
the norm in every industry, it has now become a compulsion.
Therefore, in accordance with section 134(3) (n) of the Companies Act, 2013 and SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015,the Board members were
informed about risk assessment and minimization procedures after which the Board formally
adopted steps for framing, implementing and monitoring the risk management plan for the
company.
The main objective of this policy is to ensure sustainable business growth with
stability and to promote a pro-active approach in reporting, evaluating and resolving
risks associated with the business.
20. Details of significant material orders passed by the regulators or courts or
tribunals impacting the going concern status and Companys operations in future.
As explained in Note no. 5 of Notes on Accounts, some of the lender banks have assigned
their secured debt in favour of Asset Reconstruction Companies (ARCs). There are no
orders passed by the DRT or any other regulators/courts which impact the going concern
status of the Company.
21. Vigil Mechanism
In order to ensure that the activities of the Company and its employees are conducted
in a fair and transparent manner by adoption of highest standards of professionalism,
honesty, integrity and ethical behaviour the company has adopted a vigil mechanism policy.
This policy is explained in corporate governance report and also posted on the website of
company.
22. Statutory Auditors
In accordance with the provisions of Section 139 and other applicable provisions of the
companies Act, 2013 read with the companies (Audit and Auditors) Rules, 2014 and such
other applicable rules if any, the company proposes to appoint M/s. VNR Associates,
Chartered Accountants (Firm Registration No. 004478S), Hyderabad as Statutory Auditors for
a period of five years from the conclusion of the forthcoming Annual General Meeting till
the conclusion of the 36th Annual General Meeting. M/s. VNR Associates,
Chartered Accountants (Firm Registration No. 004478S), Hyderabad as Statutory Auditors of
the company requires approval of the members and in this regard, necessary Resolutions are
being placed before the members at the forthcoming Annual General Meeting for their
approval.
23. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has
appointed R & A Associates, a firm of Practicing Company Secretaries, Hyderabad to
undertake the Secretarial Audit of the Company.
24. Directors Responsibility Statement
In terms of Section 134 (5) of the Companies Act, 2013, your Directors confirm that
(i) in the preparation of the annual accounts for the Financial Year 31st
March, 2018, the applicable accounting standards have been followed and there are no
material departures.
(ii) 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 financial year ended on 31st
March, 2018 and of the loss of the Company for that period;
(iii) 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; (iv) the directors had prepared the accounts for the financial year ended
31st March, 2018 on a going concern basis.
(v) the directors had laid down internal financial controls to be followed by the
company and that such internal financial controls are adequate and operating effectively
in view of the level of operations.
(vi) 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.
25. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and
Outgo
Conservation of Energy:
Due to low quantum of operations currently, the Company requires a low level of energy
consumption.
Research and Development (R&D):
The Company continues to look at opportunities in the areas of research and development
in its present range of activities.
Technology Absorption:
The Company continues to use the latest energy devices for improving the quality of its
products. The Company has not imported any technology during the year.
Foreign Exchange Earnings and Outgo:
During the year under review, there are no foreign exchange earnings and outgo.
26. 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 employees
of the Company is as follows: The Company has one Managing Director and a Whole time
Director and due to financial constraints being faced by the company they have forgone
remuneration. The Particulars of the Employees who are covered by the provisions contained
in Rule 5(2) and rule 5(3) of Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 are:
a) Employed throughout the year - Nil
b) Employed for part of the year - Nil
The remuneration paid to all Key management Personnel was in accordance with
remuneration policy adopted by the company.
(a) The information required under section 197 of the Act read with rule 5(1) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given
below:
(I) The ratio of the remuneration of each director to the median remuneration of the
employees of the company for the financial year Not Applicable.
(II) The percentage increase in remuneration of each director, Chief Financial Officer,
Chief Executive Officer, Company Secretary or Manager, if any, in the financial year NIL.
(III) The percentage increase in the median remuneration of employees in the financial
year- Not Applicable.
(IV) The number of permanent employees on the rolls of company 02.
(V) Average percentile increase made in the salaries of employees other than the
managerial personnel in the last financial year and its comparisons with the percentile
increase in the managerial remuneration and justification thereof and point out if there
are any exceptional circumstances for increase in the managerial remuneration. - Not
Applicable.
(VI) The Company affirms that the remuneration is as per the remuneration policy of the
Company.
27. Current Status of the Company
The Lender Bankers namely the SBI, SBH, SBM & IDBI, who are part of the secured
creditors of the Company have assigned their secured debt in the Company in favour of
Invent Assets Securitisation and Reconstruction Private Limited, an Asset Reconstruction
Company (ARC), Federal Bank being one of the lender banks has assigned its debt in favour
of JM Financial Asset Reconstruction Company (ARC) during the financial year 2017-18. The
banks led by Invent ARC has since, initiated steps for the realization of the debt
assigned to it by way of auction/sale of identified Secured Assets. In such process, the
Companys Cherlapally Unit and Shed No. 30 at Mallapur Unit have been sold away by
way of auction by Invent ARC in May 2017.
As informed in the previous financial year that the company is working with an MNC for
takeover of the Fabcity Project, which is a Photovoltaic Cell and Module Manufacturing
Plant based at Fabcity, Hyderabad, the negotiations with the MNC have come to a final
stage. This asset is a critical one required for the continuance of Solar power business
and revival of the company. There is a lot of genuine interest shown by the investors to
possess and develop solar power manufacturing facility within the country in view of the
drive for Green energy and the fallout of the Global need for controlling global warming.
28. Corporate Governance
Corporate Governance philosophy of the Company is based on the principles of equity,
fairness, transparency, spirit of law and honest communication. The Company believes that
sound Corporate
Governance is necessary to retain stakeholders trust and ensures efficient
working and proper conduct of the business of the Company with integrity. Development of
Corporate Governance guidelines is a continuous process which evolves over a period of
time to suit the changing needs of the business, society and the nation.
Your Company has implemented the conditions of Corporate Governance as contained in
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate
report on Corporate Governance and Management Discussion and Analysis along with necessary
certificates is given elsewhere in this report. Also certificate by M/s R & A
Associates, Company Secretaries, Hyderabad confirming compliance of the conditions of
Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, is annexed to this report.
29. Explanations to qualifications in Auditors Report
a) Auditors Qualification:
The accompanying financial statements have been prepared assuming that the Company will
continue as a going concern. As discussed in Note 5 to the Ind AS financial statements,
the Company has suffered recurring losses from operations and has a net capital deficiency
that raise substantial doubt about its ability to continue as a going concern and,
therefore, it may be unable to realise its assets and discharge its liabilities in the
normal course of business. The Ind AS financial statements (and notes thereto) do not
disclose this fact. Managements plans in regard to continuing operations are
mentioned in para 5 of Notes to Accounts.
Managements Response:
With the adoption of Ind AS, the Net Worth of the Company has turned negative. As
explained in the previous financial year that some of the Lender Bankers namely the SBI,
SBH, SBM & IDBI, who are part of the secured creditors of the Company have assigned
their secured debt in the Company in favour of Invent Assets Securitisation and
Reconstruction Private Limited, an Asset Reconstruction Company (ARC), Federal Bank being
one of the lender banks has assigned its debt in favour of JM Financial Asset
Reconstruction Company (ARC) during the financial year 2017-18. The banks led by Invent
ARC has since, initiated steps for the realization of the debt assigned to it by way of
auction/sale of identified Secured Assets. In such process, the Companys Cherlapally
Unit and Shed No. 30 at Mallapur Unit have been sold away by way of auction by Invent ARC
in May 2017.
As informed in the previous financial year that the company is working with an MNC for
takeover of the Fabcity Project, which is a Photovoltaic Cell and Module Manufacturing
Plant based at Fabcity, Hyderabad, the negotiations with the MNC have come to a final
stage. This asset is a critical one required for the continuance of Solar power business
and revival of the company. There is a lot of genuine interest shown by the investors to
possess and develop solar power manufacturing facility within the country in view of the
drive for Green energy and the fallout of the Global need for controlling global warming.
In this regard, the Company is of the view that it retains its going concern status.
b) Auditors Qualification: As reported in note 4 relating to
Financial assets and liabilities,
Management has informed us that settlement with Banks/ARCs is in an advanced stage of
completion. On completion of the same, the assets and liabilities including fixed assets
as appearing in the books of account shall be reviewed and consequential effect on write
off/ write back shall be done.
Managements Response: As already explained earlier in this Directors
Repott, the fixed assets of the Company are under the charge of ARC and the ARC has
initiated the process of sale of certain assets and settlement of loans. During the year,
the assets of Cherlapally Unit and Shed No. 30 of Mallapur Unit were sold by the ARC and
the management has effected the effect of such sale in the books of accounts. Further as
and when such events take place with respect to the balance of assets, the consequential
effect of such transactions shall be effected in the books of accounts.
c) Auditors Qualification: Notes to Accounts at Para 7 of the Ind AS
financial statements which describes the balances appearing under other long-term
liabilities, short term borrowings, trade payables, other current liabilities, long term
loans and advances, CWIP advances, trade receivables short term loans and advances and
other current assets are subject to confirmation and / or reconciliation if any. At this
point of time, the quantification of its effect on the balance sheet is not ascertained
and quantified.
Managements Response: Some of the payables shown pertaining to outstandings
to banks which are not reconciled since the accounts have become Non-performing Assets
(NPA) and the banks have not provided account statements. Interest and charges on this
accounts were not accounted since the banks have already filed Original Application (OA)
with the Debt Recovery Tribunal (DRT) and some of the banks have assigned their debt in
favour of ARCs, the management is of the view that there is no need of upward or
downward adjustment of these figures without having the actual figures in hand. With
regard to receivables and other long term payables, since the accounts were stagnant and
long overdue, the Company was unable to procure confirmations from parties.
30. Replies to observations made in the Secretarial Audit report
a) Auditors Observation: The Company has not yet paid listing fee to the
Stock Exchanges of where the securities of the Company are listed as required under
regulation 14 of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015
for the financial year 2017-18.
Managements Response: The Company could not pay the listing fees to the
exchanges during the financial year owing to deficit cash flow. However, the Company is in
the process to remit the fees by the end of September, 2018.
b) Auditors Observation: There was a delay in submitting the financial
results to BSE limited (BSE) and National Stock Exchange of India Ltd (NSE) for the
quarter and financial year ended 31st March, 2017. The Company has submitted
the financial results on 05th June, 2017 as against the due date of 30th
May, 2017 prescribed under regulation 33 of SEBI (Listing Obligation and Disclosure
Requirements) Regulations, 2015. The Company has been imposed a penalty of Rs. 30,000/- by
NSE and the same is yet to be paid.
Managements Response: The Company has called for a Board meeting on 30th
May, 2017 for consideration and approval of Audited financial results for the financial
year ended 31st March, 2017. However, the meeting could not be convened due to
lack of quorum and has been adjourned for want of quorum due to unavoidable situations for
the presence of directors at the meeting. Accordingly, the meeting has been called at
shorter notice on 05th June, 2017 and the same was held and convened to
consider and approve the financial results and the same was disseminated to the exchanges.
Since Standard Operating Procedures were issued by SEBI, the Company was levied penalty
for delay in submission beyond the due date and the penalty is yet to be paid.
31. Management Discussion & Analysis
The Management Discussion and Analysis on Company's performance, industry trends,
future outlook and other material changes with respect to the Company and its
subsidiaries, wherever applicable, are presented in this annual report as stipulated under
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
32. Extract of Annual Return
The Extract of Annual return prepared in Form MGT-9 as per the provisions of Section 92
of the Companies Act, 2013 read with Rule 12 of the Companies (Management and
Administration) Rules,2014 is enclosed as Annexure-1 to this report. The Annual
Return of the Company is available on the following weblink
http://www.xlenergy.co/pdf/Annual%20Return%20-%202017-18.pdf
33. Disclosure pertaining to sexual harassment of women at workplace
The Company has in place a Policy on Prevention of Sexual Harassment in line with the
requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition
& Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress
complaints received regarding sexual harassment. All employees (permanent, contractual,
temporary, trainees) are covered under this policy.
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.
34. Corporate Social Responsibility
The provisions relating to Corporate Social Responsibility under the Companies Act,
2013 do not apply to the company.
35. Shifting of Registered Office
During the year, the Company has shifted its Registered Office from C2, Pooja Plaza,
Vikrampuri, Secunderabad 500009 to H.No. 19-66/11/D-4, Laxmipuram Colony, Opp: Dr A S Rao
Nagar, ECIL, Kapra, Medchal Malkajgiri, Hyderabad 500062.
36. Consolidation of Accounts of subsidiary and Joint Venture
The financial statements of foreign subsidiary and the Indian Joint Venture Company
have not been consolidated with the financial statements of the Company for the year ended
31st March, 2018 since the Net worth of both the subsidiary and joint venture
have become negative and there are no operations carried out.
37. Acknowledgements
Your Directors would like to place on record their gratitude for all the guidance and
co-operation received from the Securities and Exchange Board of India, the Bombay Stock
Exchange Limited, National Stock Exchange of India Limited, National Securities Depository
Limited, Central Depository Services (India) Limited and other government and regulatory
agencies.
Your Directors are grateful to the Companys clients, investors, bankers and other
business associates for their continued support. Your Directors would also like to take
this opportunity to express their appreciation to the dedicated and committed team of
employees for their contribution to the Company and rendering high quality services to the
clients.
Your Directors wish to place on their record sincere thanks to the stakeholders for
their endeavours and confidence they have reposed on the management of the Company.
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For and on behalf of the Board of Directors of |
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XL ENERGY LIMITED |
|
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Sd/- |
Sd/- |
Place: Hyderabad |
Dinesh Kumar |
Aneesh Mittal |
Date: 14.08.2018 |
Managing Director |
Wholetime Director |
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(DIN: 00054833) |
(DIN: 00061635) |
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