To,
The Shareholders,
SBEC Systems (India) Limited
Dear Members,
Your Directors take pleasure in presenting the 35th Annual Report of the Company together with the Audited Accounts for the year ended 31st March 2024. FINANCIAL RESULT
The Company's financial performance (Standalone & Consolidated) for the financial year ended March 31,2024 along-with that of the previous financial year ended March 31,2023 are summarized below: (Rs. in 000)
PARTICULARS
Standalone
Consolidated
Revenue & Other Income
TOTAL EXPENDITURE
Operating Profit/(Loss) Before Tax
Profit/(Loss) After Tax
FINANCIAL PERFORMANCE AND THE STATE OF THE COMPANY'S AFFAIR
During the year under review, the total income stood at Rs. 31,906 Thousand. The net profit of the Company stood at Rs. 13,291 Thousand as compared to net profit of Rs. 11,061 Thousand during the previous year.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements have been prepared by the Company in accordance with applicable provisions of the Companies Act, 2013, Accounting Standards and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The audited consolidated financial statements together with Auditors' Report form part of the Annual Report. The Auditor's Report does not contain any qualification, reservation or adverse remarks.
DIVIDEND & RESERVES
In order to conserve the resources for future growth of the Company, the Board of Directors has not declared any dividend for the year under review.
The Company has not transferred any amount to the reserves for the year ended March 31,2024.
SHARE CAPITAL
The paid up equity capital as on March 31,2024 was Rs.1,00,000 Thousand. During the year under review, the Company has not issued any class of shares nor granted stock options.
REDUCTION OF SHARE CAPITAL
The Board of Directors of the Company in their meeting dated 26 June, 2023 has approved the selective reduction of Capital of the Company from Rs. 10,00,00,000/-(Rupees Ten Crores only) consisting of 1,00,00,000 (One Crore) equity share of Rs. 10/- (Rupees Ten only) to Rs. 7,96,00,000/-(Rupees Seven Crores Ninety Six Lacs) consisting of 79,60,000 (Seventy Nine Lacs Sixty Thousand equity shares of Rs. 10/- (Rupees Ten) each by cancelling and extinguishing in aggregate 20.40% of the total issued, subscribed and paid-up equity share capital of the Company, comprising 20,40,000 (Twenty Lacs Forty Thousand) equity shares of Rs. 10/- (Rupees Ten) each held by the SBEC Systems Limited, UK without any consideration.
The Company had applied to BSE Ltd for their No-Objection for selective reduction of Capital of the Company and on 24th July, 2024, BSE Ltd has issued observation letter with ‘no adverse observations'.
ASSOCIATE/SUBSIDIARY/JOINT VENTURE COMPANY
As on March 31,2024, the Company has one Associate Company i.e. SBEC Sugar Limited. Investment in the Associate is dealt with in accordance with Indian Accounting Standard (Ind-AS) 28, the consolidation of accounts of the Company with its associate are combined by using "Equity Method".
Further, a statement containing the salient features of the financial statements of the Associate company are incorporated in AOC-1 and appended as Annexure-A to the Board's Report.
There is no subsidiary company within the meaning of Section 2(87) of the Companies Act, 2013 ("Act").
MATERIAL CHANGES AND COMMITMENTS
During the Financial Year, Company has altered the object clause of the Articles of Association as per the provision of Companies Act, 2013 at the 34th Annual General Meeting of the Company.
Also the Board of Directors in their meeting held on 26 June, 2023, has approved the Scheme of Reduction of Equity share Capital and had made an application to BSE (Stock Exchange) for obtaining No Observation Letter, and BSE on 24th July, 2024, has issued the "No Observation letter" and in the ensuing Annual General Meeting of the Company the same will be placed for members' approval.
No other material changes occurred in between the end of Financial Year 2023-24 and the date of this report.
DIRECTORS
In terms of Section 152 and other applicable provisions, if any, of the Companies Act, 2013 Mr. Shiv Shankar Agarwal, Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, has offered herself for the re-appointment. The Board recommends the re-appointment of Mr. Shiv Shankar Agarwal for the consideration of the Members of the Company at the forthcoming AGM.
The Board of Directors, on the basis of the recommendations made by the Nomination and Remuneration Committee, approved the appointment of Mr. Ajay Kumar Aggarwal (DIN: 00632288) and Mr. Shyam Lal Agarwal (DIN: 00003517) as an Additional Director (Non- Executive Independent) of the Company, effective from August 14, 2024. Appropriate resolution for his appointment as Non-Executive Independent Director is being placed for the approval of the Members of the Company at the ensuing AGM. The Board recommends their appointment as Non-Executive Independent Director of the Company. The brief resume of the Director and other related information has been detailed in the Notice convening the 35th AGM of the Company.
In keeping with Regulation 17(1)(A) and 17(1D) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors, basis the recommendation made by the Nomination and Remuneration Committee, approved continuation of directorship of Mr. Vijay Kumar Modi (DIN 00004606). Mr. Vijay Kumar Modi was appointed as an Non- Executive Director effective March 23, 2018 and the said appointment was approved by the Members of the Company at the Annual General Meeting held on August 31,2018. Appropriate resolution for continuation of her term as a Non-Executive Director, as required to be passed pursuant to aforesaid Regulation, is being placed for the approval of the Members of the Company at the ensuing AGM. The brief resume of the Director and other related information has been detailed in the Notice convening the 35th AGM of the Company.
All the Directors have made necessary disclosures as required under various provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. DIRECTOR'S RESPONSIBILITY STATEMENT:
Pursuant to the provisions contained in Section 134 (5) of the Companies Act, 2013, your Directors to the best of their knowledge and belief and according to information and explanations obtained from the management, confirm that:-
• so as to give a true and fair view of the state of affairs of the Company as at in the preparation of the annual accounts for the financial year ended March 31,2024, the applicable accounting standards have been followed and there are no material departures from the same;
• 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 the financial year ended March 31,2024;
• the Directors 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;
• The Directors have prepared the Annual Accounts on a going concern basis;
• The Directors have laid down proper internal financial controls to be followed by the Company and such controls are adequate and operating effectively and
• 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.
KEY MANAGERIAL PERSONNEL (KMP)
During the financial year ended 31.03.2024, following persons are Whole Time Key Managerial Personnel (KMP) of the Company in terms of provisions of Section 203 of the Companies Act, 2013.
S.No. Name
1. Mr. Shiv Shanker Agarwal
2. Mr. Luv Gupta*
3. Ms. Priyanka Negi
4. Mr. Lakhmi Chand Sharma**
* Mr. Luv Gupta resigned from the post of Chief Financial Officer of the Company w.e.f.30th April, 2023.
** Mr. Lakhmi Chand Sharma appointed as Chief Financial Officer of the Company w.e.f. 01st May, 2023.
BOARD MEETING
The Board met six times during the financial year 2023-24, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.
COMMITTEES OF THE BOARD
Presently the Company has the following mandatory Committees:
> Audit Committee
> Nomination and Remuneration Committee
> Stakeholders Relationship Committee
The details of all the Committees along with their composition, terms of reference and meetings held during the year are provided in the "Report on Corporate Governance" forming part of this Annual Report.
POLICY ON DIRECTORS' APPOINTMENT & REMUNERATION AND OTHER DETAILS
The Board on the recommendation of the Nomination & Remuneration Committee has already framed a policy on Directors' appointment and remuneration including criteria for determining qualifications, positive attributes, Independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013. The policy is available on the website of the Company www.sbecsvstems.in.
BOARD EVALUATION:
As required under Section 134(3)(p) of the Companies Act, 2013 read with Regulation 17 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, the Board of Directors had already approved the evaluation criteria for evaluating the performance of the Board of Directors, its Committees, namely, Audit Committee, Stakeholders Relationship Committee and Nomination and Remuneration Committee, the Directors individually and the performance of Independent Directors.
The manner in which the evaluation was carried out and the process adopted has been mentioned in the Corporate Governance Report.
BOARD DIVERSITY
The Company recognizes and embraces the importance of a diverse board in its success. We believe that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will help us to retain our competitive advantage. The Board has adopted the Board Diversity Policy which sets out the approach to diversity of the Board of Directors. The Board Diversity Policy is available on our website www.sbecsystems.in. More detail on diversity is available in the corporate governance report that forms part of this Annual Report.
STATEMENT ON DECLARATION GIVEN BY THE INDEPENDENT DIRECTORS
As required under Section 149 (7) of the Companies Act, 2013, all the Independent Directors have given declarations that they meet the criteria of independence as specified in Section 149 (6) of the Companies Act, 2013 and SEBI (LODR), Regulations, 2015.
STATUTORY AUDITORS
M/s. K.K. Jain & Co., Chartered Accountants, (Registration number: 002465N), have resigned from the office of Statutory Auditors of the Company w.e.f November 03, 2023, due to some health issues resulting into a casual vacancy in the office of Statutory Auditors of the Company as per section 139(8) of the Companies Act, 2013.
To fill up the casual vacancy M/s Thakur Vaidyanath Aiyar & Co, Chartered Accountants, (Firm Registration No. 000038N), was appointed in the Board Meeting held on 06th November, 2023 and the members approved the same through postal ballot with requisite majority on 28th December, 2023.
As the term of M/s Thakur Vaidyanath Aiyar & Co. the Statutory Auditors of the Company expires at the conclusion of this ensuing AGM, the Board of Directors of the Company at their meeting held on 14th April, 2024, based on the recommendation of the Audit Committee, has recommended to the Members the appointment of M/s Thakur Vaidyanath Aiyar & Co. , (Firm Registration No. 000038N) as Statutory Auditors of the Company, for a term of 5 (five) consecutive years from the conclusion of 35th AGM till the conclusion of the 40th AGM. Accordingly, an Ordinary Resolution, proposing appointment of M/s Thakur Vaidyanath Aiyar & Co., as the Statutory Auditors of the Company for a term of five consecutive years pursuant to Section 139 of the Act, forms part of the Notice of the 35th AGM of the Company. The Company has received the written consent and a certificate that M/s Thakur Vaidyanath Aiyar & Co. satisfy the criteria provided under Section 141 of the Act and that the appointment, if made, shall be in accordance with the applicable provisions of the Act and rules framed thereunder.
STATUTORY AUDITORS REPORT
The Auditors' Report for 2023-24 does not contain any qualifications, reservations, adverse remarks or disclaimers by Statutory Auditors of the Company in the Audit Report.
SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Soniya Gupta & Associates, Company Secretaries as the Secretarial Auditor to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is given in Annexure-B to this Report.
The observations in secretarial audit report are self-explanatory and therefore do not call for any further explanation.
APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR
No application has been made under the Insolvency and Bankruptcy Code against the Company; hence the requirement to disclose the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year is not applicable.
RISK MANAGEMENT POLICY
As required under Section 134(n) of the Companies Act, 2013, the Company has laid down the policy on risk management stating therein the objectives and purpose of the said policy.
The Risk Management Policy of the Company can be viewed on the Company's website www.sbecsystems.in .
INTERNAL FINANACIAL CONTROLS
The Company has adequate Internal Financial Controls with proper checks to ensure that transactions are properly authorised, recorded and reported apart from safeguarding its assets. These systems are reviewed and improved on a regular basis. It has a comprehensive budgetary control system to monitor revenue and expenditure against approved budget on an ongoing basis. The internal auditors of the Company reviews the controls across the key processes and submits reports periodically to the Management and significant observations are also presented to the Audit Committee for review. Follow up mechanism is in place to monitor the implementation of the various recommendations.
CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES.
Section 135 of the Companies Act, 2013 provides the threshold limit for applicability of the CSR to a Company i.e. (a) net worth of the Company to be Rs. 500 crore or more; or (b) turnover of the company to be Rs. 1,000 crore or more; or (c) net profit of the company to be Rs.5 crore or more. As the Company does not fall under any of the threshold limits given above, the provisions of Section 135 are not applicable to the Company.
DEPOSITS
During the financial year, Company has not accepted any deposit from public within the meaning of section 73 and 76 of the Companies Act, 2013 and Rules made thereunder.
CORPORATE GOVERNANCE
In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 a detailed Corporate Governance Report along with a certificate from M/s Soniya Gupta & Associates, Company Secretaries in practice and Management Discussion and Analysis Report forms part of this Annual Report.
The declaration by the Chief Executive Officer and Chief Financial Officer addressed to the Members of the Company pursuant to Clause D of Schedule V Read with Regulation 34(3) and Chapter IV of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 regarding adherence to the Code of Conduct by the Members of the Board and by the Members of the Senior Management Personnel of the Company is also attached to the Corporate Governance report.
VIGIL MECHANISM & WHISTLE BLOWER POLICY
The Company has a vigil mechanism and a whistle blower policy. The same has been posted on the Company's website and the details of the same are given in the Corporate Governance Report.
RELATED PARTY TRANSACTIONS
In compliance with the Act and the SEBI Listing Regulations, the Company has formulated a Policy on Related Party Transactions (RPTs) and manner of
dealing with RPTs. During the year under review, the Policy has been amended to incorporate the regulatory amendments in the SEBI Listing Regulations. The updated Policy can be accessed on the Company's website www.sbecsystems.in.
All transactions with related parties during FY 2023-24 were reviewed and approved by the Audit Committee and were at Arm's Length Price (ALP) and in the Ordinary Course of Business (OCB). Prior omnibus approval was obtained for all RPTs which were of repetitive nature and entered in the OCB and on an ALP basis. The transactions entered into pursuant to the omnibus approval so granted were reviewed by Audit Committee on quarterly basis.
Pursuant to the third proviso of Section 188(1) of the Act, the compliance with the provisions of Section 188(1) is not applicable, where all RPTs are carried out in the OCB and under ALP basis. Accordingly, the disclosure of RPTs as required under Section 134(3) (h) of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014 in form AOC-2 is not applicable to the Company for FY 2023- 24. However, the Company had material RPTs during FY 2023-24 under SEBI Listing Regulations. Hence, the same have been disclosed in form AOC-2 enclosed as Annexure C.
Details of RPTs entered into by the Company, in terms of Ind AS-24 are disclosed in notes to the financial statements forming part of this Integrated Report. There was no other material RPTs entered into by the Company with its Promoters, Directors, KMPs or other designated persons during FY 2023-24, except those reported in the financial statements.
None of your Directors or KMPs had any pecuniary relationships or transactions with the Company during FY 2023-24.
Approval of Members is being sought for the material RPTs for FY 2024-25 at the ensuing AGM.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo pursuant to Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is given in Annexure-D to this Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
During the financial year 2023-24, the Company has not made any investment nor given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013.
PARTICULARS OF EMPLOYEES
The information required under Section 197(12) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and forming part of the Board's Report for the year ended March 31,2024 are given in Annexure -E to this Report.
COST RECORDS AND AUDIT
During the period under review the provisions relating to maintaining of cost record and conduct of Cost Audit are not applicable to the Company.
EXTRACT OF ANNUAL RETURN
Pursuant to Section 92(3) read with 134(3) of the Act, Annual Return (in e-form MGT-7) for the financial year ended March 31, 2024 is available on the Company's website at: www.sbecsystems.in SECRETARIAL STANDARD
The Company has complied with the Secretarial Standards issued by The Institute of Company Secretaries of India and approved by the Central Government as required under Section 118(10) of the Companies Act, 2013.
LISTING WITH STOCK EXCHANGES
The Equity Shares of the Company are listed with BSE Limited, and Company is transferred from group "P" to group "XT" and shares are to be traded under Trade to Trade w.e.f July 06, 2022 as per the Notice of BSE.
The annual fees for the Bombay Stock Exchange have been paid promptly for the year 2024-25.
SEXUAL HARASSMENT
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 and the provision related to constitution of internal complaint committee is not applicable on the Company.
DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS
During the year there were no differences in the valuation of the Company, as there was no one time settlement in the FY 2023-24.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
During the year under review, there were no significant and material orders passed by the Regulators or Courts or Tribunals that could impact the going concern status of the Company and its future operations.
PERSONNEL RELATIONS
Your directors hereby place on record their appreciation for the services rendered by the executives, staff and workers of the Company for their hard work, dedication and commitment. During the year under review, relations between the employees and the management continued to remain cordial.
APPRECIATION
Your directors thank the various Central and State Government Authorities and Agencies for the continued help and cooperation extended by them. The Directors gratefully acknowledge all stakeholders of the Company viz., customers, members, dealers, vendors and banks for their excellent support during the year. The Directors also place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued cooperation to the Company.
ANNEXURE-B TO THE BOARD'S REPORT Form No. MR-3
SECRETARIAL AUDIT REPORT For The Financial Year Ended On 31st March, 2023
[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]
The Members of
SBEC SYSTEMS (INDIA) LIMITED
1400, Hemkunt Tower 98, Nehru Place
We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by SBEC SYSTEMS (INDIA) LIMITED having CIN: L74210DL1987PLC029979 (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts / statutory compliances and expressing our opinion thereon.
Based on our verification of the Company's books, papers, minute books, forms and returns filed and other records maintained by the Company and also information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby re-port that in our opinion, the company has, during the audit period covering the financial year ended on 31st March, 2024, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:
We have examined the books, papers, minute books, forms and returns filed and other records maintained by Company for the financial year ended on 31st March, 2024 according to the provisions of:
i. The Companies Act, 2013 (the Act) and the Rules made thereunder;
ii. The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 thereunder;
iii. The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;
iv. Foreign Exchange Management Act, 1999 and the Rules and Regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;
v. The Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act') viz.:
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;
(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009;
(d) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies
Act and dealing with client;
(e) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015;
The Management has identified and confirmed the following laws as specifically applicable to the Company:
a) The Payment of Gratuity Act, 1972
b) The Employees Provident Fund & Miscellaneous Provisions Act, 1952.
c) The Payment of Bonus Act, 1965, and rules made there-under,
d) The Insolvency and Bankruptcy Code, 2016
e) The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 We have also examined compliance with the applicable clauses of the following:
(i) Secretarial Standards issued by The Institute of Company Secretaries of India.
(ii) The Listing Agreement entered into by the Company with BSE Ltd. (Stock Exchange),
During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc mentioned above except to the extent as mentioned below:
1. The Securities and Exchange Board of India on September 17, 2018 had issued directions to the Promoter group of the Company (namely Shri Umesh Kumar Modi, Kumkum Modi, Jayesh Modi, Longwell Investments Private Limited, A to Z Holdings Pvt. Ltd., Moderate Leasing and Capital Services Limited and SBEC Systems (India) Limited), severally or jointly to make a public announcement to acquire the shares of Target Company (i.e. SBEC SUGAR LIMITED) in accordance with the provisions of the Takeover Regulations, 2011, within a period of 45 days from the date of the above mentioned order. The shareholding/ voting rights of the promoter group had increased from 54.46% (2,59,51,083 Shares) as on June 30, 2014 to 63.86% (3,04,32,117 shares) as on September 30, 2014. In addition to the aforesaid acquisition, one of the lending promoters i.e. Moderate Leasing and Capital Services limited had also acquired 1.31% of SBEC Sugar Limited during March 18, 2015 to March 23, 2015, which increased the shareholding of promoter group to 65.17%. As per the said impugned order, the promoter group have violated the provisions of Regulation 3(2) of the Takeover Regulations, 2011 by acquiring shares in excess of the prescribed limit without making an announcement for open offer.
Against the said impugned SEBI order, M/S SBEC Systems (India) Limited had filed appeal no. 1 (No. 443/2018) before the Securities Appellant Tribunal, Mumbai.
Whereas the promoter group namely (Shri Umesh Kumar Modi, Kumkum Modi, Jayesh Modi, Longwell Investments Private Limited, A to Z Holdings Pvt. Ltd., Moderate Leasing and Capital Services Limited) had filed appeal no. 2 (No. 444/2018) before the Securities Appellant Tribunal, Mumbai.
The Hon'ble Securities Appellate Tribunal upon hearing the said Appeal vide its order dated January 29, 2020 has allowed the Appeal No. 1 (Appeal No.443 of 2018) and partly allowed Appeal No. 2 (Appeal No.444 of 2018), whereby, the directions issued by SEBI for open offer vide order dated September 17, 2018 qua promoters namely SBEC System (India) Limited, Shri. Umesh Kumar Modi, Smt. Kumkum Modi, Shri. Jayesh Modi and Longwell Investment Private Limited has been set aside, however, the directions issued by SEBI for Open Offer vide order dated September 17, 2018 issued qua the promoters namely A to Z Holdings Pvt. Ltd. and Moderate Leasing & Capital Services Ltd. (the acquirer of the shares) has been modified in terms of Regulation 32(1)(b) and they had been directed to sell the shares acquired in violation of the SAST Regulation and to transfer the proceeds of the same to the Investor Protection Fund established under the SEBI (Investor Protection and Education Fund), 2009 within a period of 6 (Six) months from the date of the order i.e. from January 29, 2020.
The promoters namely A to Z Holdings Pvt. Ltd. and Moderate Leasing & Capital Services Ltd. (the acquirer of the shares) could not comply with the order dated January 29, 2020, therefore, the said promoters approached the Hon'ble Securities Appellate Tribunal vide Misc. Application no. 209 / 2020 seeking an extension of 6 (six) months for compliance of the order dated January 29, 2020 inter-alia on the grounds of operations of the said promoters being shut due to the pandemic COVID - 19. The said Misc. Application was listed before Hon'ble Securities Appellate Tribunal on July 29, 2020 and dismissed vide order dated July 29, 2020.
In the meantime, the Securities Exchange Board of India filed a Civil Appeal bearing nos. 2995 - 2996 / 2020 before the Hon'ble Supreme Court of India on July 29, 2020 against the order dated January 29, 2020 passed by Hon'ble Securities Appellate Tribunal.
Furthermore, the promoters namely A to Z Holdings Pvt. Ltd. and Moderate Leasing & Capital Services Ltd. have also filed a Civil Appeal bearing no. 3002 / 2020 before the Hon'ble Supreme Court of India on August 11, 2020 against the order dated July 29, 2020 passed by Hon'ble Securities Appellate Tribunal.
It is important to point out that both the Civil Appeals before the Hon'ble Supreme Court of India have been connected and the pleadings therein are complete. The said Civil Appeals were last listed before the Hon'ble Supreme Court of India on October 13, 2022 and the matter is still pending for final hearing.
2. The Shareholding of promoters and the promoter's group are dematerialized only to the extent of 60% shares as on 31.03.2024.
We further report that,
The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Di-rectors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.
Adequate notices are given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance and a system exist for seeking and obtaining further information and clarifications on agenda items before the meeting and for meaningful participation at the meeting.
Majority decision is carried through while the dissenting members' views are captured and recorded as part of the minutes.
We further report that there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
1. The Company has one Associate Company i.e. SBEC Sugar Limited.
2. M/s. K.K. Jain & Co., Chartered Accountants, (ICAI FRN: 002465N) vide their letter dated 3rd November, 2023 have resigned as Statutory Auditors of the Company, thereby resulting into a casual vacancy in the office of Statutory Auditors of the Company. The company has appointed M/s Thakur, Vaidyanath Aiyar & Co. s, Chartered Accountants as Statutory Auditors of the Company to fill the casual vacancy caused by resignation of M/s K. K. Jain & Co., Chartered Accountants by passing shareholder's Ordinary resolution through postal ballot with requisite majority on 28th December, 2023.
3. The Board of Directors of the Company in their meeting dated 26th June, 2023 has approved the selective reduction of Capital of the Company from Rs. 10,00,00,000/-(Rupees Ten Crores only) consisting of 1,00,00,000 (One Crore) equity share of Rs. 10/- (Rupees Ten only) to Rs. 7,96,00,000/-(Rupees Seven Crores Ninety-Six Lacs) consisting of 79,60,000 (Seventy-Nine Lacs Sixty Thousand equity shares of Rs. 10/- (Rupees Ten) each by cancelling and extinguishing in aggregate 20.40% of the total issued, subscribed and paid-up equity share capital of the Company, comprising 20,40,000 (Twenty Lacs Forty Thousand) equity shares of Rs. 10/- (Rupees Ten) each held by the SBEC Systems Limited, UK without any consideration subject to the approval of the shareholders and prescribed authorities.
ANNEXURE- D TO THE BOARD'S REPORT
Information to be given under Section 134 read with Rule 8(3) of the Companies (Accounts) Rules, 2014
(A) CONSERVATION OF ENERGY
i) The steps taken or impact on conservation of energy
ii) The steps taken by the Company for utilizing alternate sources of energy
iii) The Capital investment on energy conservation equipment
(B) TECHNOLOGY ABSORPTION
i) The efforts made towards technology absorption
ii) The benefits derived like product improvement, cost reduction, product development or import substitution
iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year) -
(a) The details of technology imported
(b) The year of import
(c) Whether the technology been fully absorbed
(d) If not fully absorbed, areas where absorption has not taken place, and the reasons thereof; and
(e) The expenditure incurred on Research and Development
(C) FOREIGN EXCHANGE EARNINGS AND OUTGO
The foreign exchange earned in terms of actual inflows during the year and the Foreign exchange outgo during the year in terms of actual outflows.
Foreign Exchange earned
Foreign Exchange outgo
ANNEXURE- E TO THE BOARD'S REPORT
STATEMENT OF PARTICULARS OF EMPLOYEES AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIES ACT. 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT & REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014.
(1) Information as per Section 197(12) read with Rule 5(1) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014:
(a) The median remuneration of employees of the Company during the financial year was Rs. 6,76,034 (12 months). The Ratio of the Remuneration of each Director to the Median Remuneration of the Employees of the Company for the financial year 2023-24 are as under:
Directors
Mr. Vijay Kumar Modi*
Mr. Shiv Shankar Agarwal#
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Ms. Ritu Sikka*
Mr. Jagdish Chander Chawla*
Mr. Salil Seth*
Ms. Asha Agarwal*
*All the Non-Executive Directors of the Company were not paid any remuneration and no sitting fee was paid to the Board/Committee of Directors. Therefore, the said ratio of remuneration of each director to median remuneration of the employees of the company is not applicable.
# Mr. Shiv Shankar Agarwal was appointed as Executive Director but he is not drawing any remuneration from the Company.
(b) The percentage increase in Remuneration of each Director, Whole Time Director, Chief Financial Officer and Company Secretary in the financial year:
*All the non-executive Directors of the Company were not paid any remuneration and no sitting fee was paid to the Board/Committee of Directors. Therefore, the said ratio of remuneration of each director to median remuneration of the employees of the company is not applicable.
# Mr. Shiv Shankar Agarwal was an Executive Director but he is not drawing any remuneration from the Company.
Key Managerial Personnel's (KMPs)
Key Managerial Personnel's
Mr. Shiv Shankar Agarwal
Mr. Luv Gupta*
Mr. Lakhmi Chand Sharma*
Ms. Priyanka Negi
* Mr. Luv Gupta resigned from the post of Chief Financial Officer of the Company w.e.f.30th April, 2023 and Mr. Lakhmi Chand Sharma appointed as Chief Financial Officer of the Company w.e.f. 01st May, 2023.
(c) The percentage increase in the Median Remuneration of Employees in the financial period was 6%.
(d) The number of Permanent Employees on the Rolls of the Company:
The number of Permanent Employees on the Rolls of Company as on 31st March, 2024 was 2.
(e) Average percentage increase already made in the salaries of employees other than managerial personnel in the last financial period and its comparison with percentile increase in the Managerial Remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the Managerial Remuneration:
The average increase in salaries of employees in 2023-24 was 6%.
(f) Affirmation that the Remuneration is as per the Remuneration Policy of the Company:
The Company affirms that the Remuneration paid during the period were as per the Remuneration Policy of the Company.
(2) Information as per Section 197 (12) of the Companies Act, 2013 read with Rule 5 (2) and 5 (3) the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
(a) Name of employee employed throughout the financial year and was in receipt of remuneration Rs.1,02,00,000/- or more: NIL
(b) Name of employee employed for a part of the financial year and was in receipt of remuneration not less than Rs.8,50,000/- per month: NIL
(c) Details of Top Ten Employees in terms of remuneration drawn: Details of Two Employees is mention below the Company have only two employees.
Name/Age
Employment
*Mr. Luv Gupta/36
*Mr. Lakhmi Chand Sharma/66
Ms. Priyanka Negi/33
Notes:
1. The nature of employment of all employees above is whole time in nature and terminable with 1 months' notice on either side.
2. The above mentioned employees are not relatives (in terms of the Companies Act, 2013) of any Director of the Company.