DIRECTORS' REPORT TO, THE MEMBERS, Your Directors have pleasure in presenting the Nineteenth Annual Report together with the Audited Statements of Accounts of the Company for the Financial Year ended March 31, 2015. The Management Discussion and Analysis is also included in this Report. Dividend and Reserves In view of losses suffered by the Company, your Directors do not recommend any dividend for the financial year 2014-15. During the year under review, no amount was required to be transferred to General Reserve. Share capital During the year, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. There was no provision made of the money by the company for purchase of its own shares by employee or by trustee. As on March 31, 2015, none of the Directors of the Company hold instruments convertible into equity shares of the Company. During the year, there was no change in the Share Capital of the Company. As on March 31, 2015, the issued, subscribed and paid up share capital of your Company stood at Rs.130,955,070/-, comprising 13,095,507 Equity shares of Rs.10/- each. Directors and Key Managerial Personnel During the year, Mr. Arnold John Allen and Mr. Mohandas Shenoy Adige resigned as directors of the Company with effect from January 29, 2015 and September 30, 2014 respectively. During their tenure they have greatly contributed to the performance of the Company by their vast knowledge and experience. The Board places on record its appreciation of the invaluable contribution and guidance provided by them. During the year, the Company appointed Mr. Nimis Sheth and Mr. Girish Bakre as independent Director of the Company with effect from September 15, 2014. Mr. Gautam Khandelwal retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Pursuant to the provisions of Sections 149 and 161 of the Companies Act, 2013, the Board of Directors had appointed Ms. Nidhi Salamlpuria as an Additional Director of the Company, with effect from April 01, 2015. In accordance with the provisions of the aforesaid section, Ms. Nidhi Salampuria holds office up-to the date of the ensuing Annual General Meeting of the Company. Appropriate resolutions seeking the consent of the Members of the Company for appointment of Ms. Nidhi Salampuria as Director of the Company forms part of the Notice convening the 19th Annual General Meeting. Ms. Nidhi Salampuria is also the company secretary and compliance officer of the company. Details of Board meetings During the year, the Board of Directors met 6 times, details of which are provided in the Corporate Governance report Declaration by Independent Directors (IDs) The Company has received declaration from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149 (6) of the Companies Act, 2013. Nomination & Remuneration Policy The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Key Management Personnel and Senior Management and their remuneration. The details of the policy have been provided in the Corporate Governance Report. The details of the same is available on the Company's website at <http://www.nagpurpowerind.com/investors/corporate-governance/> Board Evaluation The Board evaluated the effectiveness of its functioning and that of the Committees and of individual directors by seeking their inputs on various aspects of Board/Committee Governance. The aspects covered in the evaluation included the contribution to and monitoring of corporate governance practices, participation in the long-term strategic planning and the fulfillment of Directors' obligations and fiduciary responsibilities, including but not limited to, active participation at the Board and Committee meetings. The Chairman of the Board had one-on-one meetings with the Independent Directors and the Chairman of the Nomination and Remuneration Committee had one-on-one meetings with the Executive and Non-Executive DirectoRs. These meetings were intended to obtain Directors' inputs on effectiveness of Board/Committee processes. The Board considered and discussed the inputs received from the Directors. Further, the Independent Directors at their meeting, reviewed the performance of Board, Chairman of the Board and of NonExecutive Directors. Significant and material orders passed by the regulators or courts or tribunals There were no significant material orders passed by the regulators or courts or tribunals which may impact the going concern status and company's operations. Internal financial controls The details in respect of internal financial control and their advocacy are included in the management discussion and analysis which forms part of this Annual Report. Deposits During the year, your Company has not accepted any deposits under the provisions of Chapter V of the Companies Act, 2013 and the rules made there under. Joint Ventures/Associate Companies: The company does not have Joint Ventures/Associate Companies. Loans, guarantees or investments Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report. Management Discussion and Analysis In terms of Clause 49 of the Listing Agreement with the Stock Exchange, Mumbai, the Management Discussion and Analysis report of the Company is as follows: a) Economy review: The long-term growth prospective of the Indian economy is moderately positive due to its young population, corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy. Your company is mainly in the business of manufacturing electrical equipment, a significant portion of which is supplied to the power sector which has been adversely affected by the political & economic situation. We hope to see a gradual recovery this year. b) Business and Industrial review and future outlook: The Company mainly operates on Metal Recovery Plant and produces Low Ferro Manganese (Slag) through its profitable slag recovery process. There has been decline in volume due to depletion of slag dumps. The Company had entered into a new business via a majority stake in "The Motwane Manufacturing Company Private Limited" its subsidiary company and is looking to develop its business in electrical sector. c) Risks, Concerns & Threats: Depletion of slag dumps poses a major problem for the Company in the years to come. In order to counter this, the Company entered into new business through its subsidiary company "The Motwane Manufacturing Company Private Limited" and is looking to develop it. The Company has formed a Risk Management Committee, which meets frequently to take the stock of all the impending and immediate threats to the business and takes necessary steps for positioning of the Company to meet same in time. Any major threats affecting the Company in general and business environment indirectly affecting the functioning of the Company are discussed with the Board from time to time. d) Internal Control Systems: The Company has adequate internal control systems in place with reference to the financial statements. The Audit Committee of the Board periodically reviews the internal control systems with the management, Internal Auditors and Statutory Auditors and the adequacy of internal audit function, significant internal audit findings and follow-ups thereon. e) Financial Performance / Overview of Operations: During the year under review, the total income of the Company decreased to Rs. 270.21 Lakhs from Rs. 300.86 Lakhs in the previous year. This decrease is mainly attributable to decline in volume of slag dumps as Company mainly operates on Metal Recovery plant and the profit margins have decreased due to lower realizations of Ferro Mangenese slags in 2014 - 2015. Subsidiary Company and Consolidated Statements Your Company has one subsidiary i.e 'The Motwane Manufacturing Company Private Limited' (MMCPL). During the year, revenue of the MMCPL has increased to Rs. 1743.12 Lakhs from Rs. 1148.01 in previous year and the company has incurred a loss of Rs. 143.43 Lakhs (Previous year - Net loss of Rs. 472.31 Lakhs). The Consolidated Financial Statement of your Company for the financial year 2014-15, are prepared in compliance with applicable provisions of the Companies Act, 2013, Accounting Standard and Listing Agreement as prescribed by the Securities and Exchange Board of India (SEBI). The Consolidated Financial Statements have been prepared on the basis of audited financial statements of the Company, its subsidiary, as approved by their respective Board of Directors. Pursuant to sub-section (3) of section 129 of the Act, the statement containing the salient features of the financial statement of company's subsidiary is given as AOC -1. Brief particulars about the business of each of the Subsidiary is given hereunder:- The MMCPL is an R & D based company and has developed various high technology test and Measurement products which would have applicability in the domestic and international markets. The company's products are sold primarily to the power sector and energy intensive industries. The company's sales were affected due to the cyclical downturn in the power sector, in particular the project sales & sales to the DISCOM's. The company's decision of strategically re-orienting its operations into two divisions namely Retail business group & High Voltage Business Group has started to show some signs of improvement. The company expects a better performance in the current year. Statutory Auditors, their Report and Notes to Financial Statements M/s. M.V. Ghelani & Co., Chartered Accountants (ICAI Registration No. 119077W) were re-appointed as the Statutory Auditors of the Company to hold office from the conclusion of the 18th Annual General Meeting (AGM) held on September 15, 2014 until the conclusion of the third consecutive AGM of the Company to be held in the year 2017 (subject to ratification of their appointment by the Members at every AGM held after the AGM held on September 15, 2014). As required under the provisions of section 139(1) of the Companies Act, 2013, the Company has received a written consent from M/s. M.V. Ghelani & Co., Chartered Accountants in respect to their appointment and a Certificate, to the effect that their appointment, if made, would be in accordance with the Companies Act, 2013 and the Rules framed thereunder and that they satisfy the criteria provided in section 141 of the Companies Act, 2013. The Board has recommended to ratify the appointment of M/s. M.V. Ghelani & Co., Chartered Accountants, Mumbai, as the Auditors to hold office from the conclusion of the ensuing 19th Annual General Meeting (AGM) till the conclusion of the next AGM. The observations made in the Auditor's Report are self explanatory and do not call for any further comments. The company has appointed consultant metallurgist to identify, test and advice ascertaining the balance of slag that can be used for recovery. Secretarial Auditor In terms of Section 204 of the Act and Rules made there under, M/s. DSM & Associates, Practicing Company Secretary (Certificate of Practice Number : 9394) have been appointed Secretarial Auditors of the Company. The report of the Secretarial Auditor is enclosed as Annexure I to this report. The report is self-explanatory and do not call for any further comments. Related Party Transactions There have been no materially significant related party transactions between the Company and the Directors, the management, the key managerial personnel, the subsidiaries or the relatives except for those disclosed in the financial statements. Accordingly, particulars of contracts or arrangements with related parties referred to in Section 188(1) along with the justification for entering into such contract or arrangement in Form AOC-2 does not form part of the report. The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website and can be accessed at the Web link: <http://www.nagpurpowerind.com/investors/corporate-governance/> Extract of the Annual Return Pursuant to the provisions of section 92(3) of Companies Act, 2013, the extract of the annual return in Form No. MGT- 9 is enclosed with the report as Annexure II. (C) Foreign Exchange earnings and outgo: During the year, the foreign Exchange outgo was Rs 4.91 lakhs (Previous year - Rs 6.71 lakhs). The foreign exchange earning was Nil (Previous year - Nil). Corporate Social Responsibility (CSR) Since the CSR norms are not applicable to the Company hence, the disclosures as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is not required to be made. Vigil Mechanism and Whistle Blower Policy The company has adopted a Vigil Mechanism and Whistle Blower Policy to provide a mechanism for the directors and employees to report genuine concerns about any unethical behavior, actual or suspected fraud or violations of the company's code of conduct. The provisions of this policy are in line with the provisions of Section 177 (9) of the Act. The policy can be accessed on the company's website at following link <http://www.nagpurpowerind.com/investors/corporate-governance/> Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 The Company has in place an Anti Sexual Harassment Policy 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 Risk Management In terms of the requirement of the Act, the Company has developed and implemented the Risk Management system whereby a Risk Management Committee has been constituted to manage, monitor and report on the principal risks and uncertainties that can impact the ability to achieve the Company's strategic objectives. The Committee periodically submits its Report to the Board on various issues along with its recommendations and comments for Board's review and necessary action. Material Changes There were no material changes and commitments affecting the financial position of the company, which have occurred between the end of the financial year of the company to which this report relates and the date of the report except as otherwise mentioned in this director report, if any. There had been no changes in the nature of company's business. To the best of information and assessment there has been no material changes occurred during the financial year generally in the classes of business in which the company has an interest except as otherwise mentioned in this director report, if any. Directors' Responsibility Statement Pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that: i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures; ii) they 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 and of the loss of the Company for that year; iii) they have taken proper and sufficient care to the best of their knowledge and ability, 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; iv) the annual accounts have been prepared on a going concern basis. v) they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively. vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems Corporate Governance The Company adheres to the requirements set out by the Securities and Exchange Board of India's Corporate Governance practices and have implemented all the stipulations prescribed. The Company has implemented several best corporate governance practices. The Corporate Governance which form an integral part of this Report, are set out as Annexure III, together with the Certificate from the Auditors of the Company regarding compliance with the requirements of Corporate Governance as stipulated in Clause 49 of the Listing Agreement. Acknowledgements Your Board of Directors wishes to place on record their appreciation for the whole-hearted co-operation received by the Company from the Shareholders, various Government departments, Business Associates, Company's Bankers and all the employees during the year. For and on behalf of the Board Gautam Khandelwal Chairman DIN 00270717 Place: Mumbai Date: May 28, 2015 |