Nagpur Power & Industries Ltd Directors Report.

To,

The Members,

Your Directors have pleasure in presenting the Twenty Third Annual Report together with the Audited Statements of Accounts of the Company for the Financial Year ended March 31, 2019. The Management Discussion and Analysis is also included in this Report.

Financial Highlights

The performance of your Company for the year under review is summarized below:

(र in Lakhs)

Particulars

Standalone

Consolidated

2018-2019 2017-2018 2018-2019 2017-2018
Revenue from Operations 46.70 15.48 4099.90 2982.18
Other Income (Net of Excise Duty) 156.26 258.18 153.59 226.16
Total Income / Revenue 202.96 273.66 4253.49 3208.34
Profit/(Loss) before Interest, Depreciation & Tax (65.82) (8.33) 319.44 260.51
Less: Interest 1 .29 1.79 108.26 99.65
Profit before Depreciation & Tax (67.11) (10.12) 211.18 160.86
Less: Depreciation 17.90 20.03 207.09 184.35
Profit/ (Loss) before Taxation (85.01) (30.15) 4.09 (23.49)
Less: Provision for Current Tax / (MAT) - 8.00 - 8.00
Deferred Tax and adjustments prior year - - - -
Less MAT Credit - - - -
Profit/ (Loss) after tax for the year (85.01) (38.15) 4.09 (31.49)
Total other comprehensive income (net of tax) 50.98 105.94 39.14 107.06
Total comprehensive income for the year (34.03) 67.78 43.23 75.57

Dividend and Reserves

In view of losses suffered by the Company, your Directors do not recommend any dividend for the financial year ended March 31, 2019. 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, 2019, 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 31,2019, the issued, subscribed and paid up share capital of your Company stood at र 130,955,070/-, comprising 13,095,507 Equity shares of र10/- each.

Directors and Key Managerial Personnel

The Company is well supported by the knowledge and experience of its Directors and Key Managerial Personnel. Pursuant to provisions of the Companies Act, 2013, Mr. Gautam Khandelwal, Director of the Company is liable to retire by rotation and being eligible, has offered himself for re-appointment.

Mr. Girish Bakre ceased to be a director with effect from August 15, 2018 due to his sad demise. The Company conveys its deep sorrow and condolences to his family. The Company also expresses its deepest gratitude for the enormous contribution to the Company by Mr. Girish Bakre during his tenure as an Independent Director of the Company. Mr. Ajit Parundekar has resigned as a non-executive Director of the Company due to his pre-occupation with effect from closure of business hours on October 18, 2018. The Company appreciates the valuable Service & Support rendered by him to the Company during his tenure as a Director of the Company.

The Nomination and Remuneration Committee, on the basis of performance evaluation of Independent Director and taking into account the external business environment, the business knowledge, experience and the contribution made by Mr. Nimis Sheth during his tenure, has recommended to the Board to re-appoint Mr. Nimis Sheth as an Independent Director of the Company for the second term. The board recommends his re-appointment as a Non-Executive, Independent Director of the Company.

All the Directors of the Company have confirmed that they are not disqualified from being appointed as Directors in terms of Section 164 of the Companies Act, 2013 and not debarred or disqualified by the SEBI / Ministry of Corporate Affairs or any such statutory authority from being appointed or continuing as Director of the Company or any other Company where such Director holds such position in terms of Regulation (10)(i) of Part C of Schedule V of Listing Regulations.

The Company has following persons as Key Managerial personnel (KMP):

Sr. No. Name of the person Designation Date of Appointment as KMP
1. Mr. Gautam Khandelwal Executive Chairman 15.09.2014
2. Mr. Santosh Khandelwal Chief Financial Officer 30.09.2014
3. Ms. Nidhi Salampuria Company Secretary 30.09.2014

Details of Board meetings

During the year, the Board of Directors met 6 times, details of which are provided in the Corporate Governance report. Committees of the Board

The details of the various committees of the board and their composition as on March 31, 2019 are as under:

Name of Director(s) Audit Committee Stakeholder Relationship Committee Nomination & Remuneration Committee
Mr. Nimis Savailal Seth Chairman Chairman Chairman
Mr. Gautam P Khandelwal Member Member Member
Mr. Virat Mehta Member Member Member

Declaration by Independent Directors (IDs)

Mr. Nimis Sheth and Mr. Virat Mehta are Independent Directors of the Company. The Company has received declaration from them confirming that they meet the criteria of independence as prescribed under Section 149 (6) of the Companies Act, 2013.

During the year, the Independent Director meeting was held on November 14, 2019 as required by regulation 25 of SEBI (LODR) Regulations, 2015

Nomination and Remuneration Policy

The policy of the Company on directors appointment and remuneration, including criteria for determining qualifications, positive attributes and independence of a director and other matters provided under sub-section (3) of Section 178 of the Companies Act, 2013 is adopted by the Board and may be accessed on the Companys website at the link: http:// www.nagpurpowerind.com/investors/corporate-governance/. We affirm that the remuneration paid to the directors is as per the terms laid out in the nomination and remuneration policy of the Company.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a structured questionnaire was prepared as per the requirement of the act which included various aspects of Boards and Committees functioning, Composition of the Board and its Committees, functioning of the Individual directors. The aspects covered in the evaluation included the contribution to and monitoring of corporate governance practices and the fulfillment of Directors obligations and fiduciary responsibilities, including but not limited to, active participation at the Board and Committee meetings.

Further, the Independent Directors at their meeting, reviewed the performance of Board, Chairman of the Board and of Non - Executive Directors.

The Board expressed their satisfaction with the evaluation process.

Significant and Material Orders Passed by the Regulators or Courts or Tribunals

There are no significant and material orders passed by the Regulators or Courts or Tribunals which may impact the going concern status and Companys 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.

Subsidiary/Joint Ventures/Associate Companies:

The Company does not have Joint Ventures/Associate Companies. The Company has One Subsidiary Company "The Motwane Manufacturing Company Private Limited".

Loans, Guarantees or Investments

Details of 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 Report

Management Discussion and Analysis

a) Economy review:

The long-term growth perspective of the Indian economy is changing due to continued investments in infra in Transmission and Distribution, railways and metros, lighting and digital initiatives. Stable policies and good initiatives like smart cities. Your Company (through its Subsidiary) is in the business of manufacturing electrical equipment, a significant portion of which is supplied to the power sector which has continued to be affected by the political & economic situation. We hope to see a gradual recovery.

b) Business and Industrial review and future outlook:

The Company mainly operated on Metal Recovery Plant and produces Low Ferro Manganese (Slag) through its slag recovery process. However, the re-useable waste of fine particles remaining in the manganese slag which was dumped at various places at the factory site is depleting and it is uncertain how much slag is left. The technical consultants are also of the same view.

The management of the Company has foreseen this & thus entered another segment of business couple of years earlier via a majority stake in "The Motwane Manufacturing Company Private Limited", now a subsidiary company and is looking to develop its business in electrical sector. The company is also looking at other business opportunities including monetizing its assets and redeployment of the same in better business opportunities.

c) Risks, Concerns & Threats:

Depletion of slag dumps posed a major problem for the Company. In order to counter this, the Company entered into another business through its subsidiary company "The Motwane Manufacturing Company Private Limited" and is looking to develop it. The Management of the Company 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 the 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 revenue from operation of the Company increased to र 46.69 Lakhs from र 15.48 Lakhs in the previous year.

Subsidiary Company and Consolidated Statements

Your Company has one subsidiary i.e The Motwane Manufacturing Company Private Limited (MMCPL). During the financial year 2018-19, total revenue of the MMCPL has increased to र 40.69 crores from र 29.81 crores in the previous financial year and the net profit of the Company has increased to र 89.10 Lakhs from र 6.66 Lakhs in the previous financial year.

The Consolidated Financial Statement of your Company for the financial year 2018-19, are prepared in compliance with applicable provisions of the Companies Act, 2013, Accounting Standard and SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015. 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 Companys subsidiary is given as AOC -1. Brief particulars about the business of the Subsidiary are given hereunder.

MMCPL is an R & D based company and has developed various high technology test and Measurement products which have applicability in the domestic and international markets. The companys products are sold primarily to the power sector and energy intensive industries. The company expects gradual pick up in its order book due to growth and reform in the distribution sector in which the company operates. Alternatively, it is exploring its potential in the IOT space in adjacent areas like smart lighting and other IOT related industrial solutions.

f) Material developments in human resources / industrial relations, including number of people employed

The human resource plays a vital role in the growth and success of an organization. The Company has maintained cordial and harmonious relations with employees.

During the year under review, various training and development workshops were conducted to improve the competency level of employee with an objective to improve the operational performance of individuals. The Company has built a competent team to handle challenging assignments and projects.

The Company has 19 permanent employees as on March 31, 2019.

g) Details of Significant Changes

Ratios 2019 2018
Debtors turnover ratio - -
Interest coverage ratio (65.10) (15.86)
Current ratio 53.35 57.80
Debt equity ratio 0.004 0.003
Operating margin ratio (1.79) (183)
Net profit margin % (182)% (246)%
Return on Networth % (1.18)% (0.53)%
PE ratio (0.65) (0.29)
Return on Net worth % (57.31) (124.14)

Reason for significant change:

• The interest coverage ratio has come down to (65.10) due to loss incurred by the company during the year. However the management is of the view that the losses are due to Ind AS effect wherein the notional losses of current investments have been factored in and the Company has adequate cash flow to service the interest.

• The debt has increased marginally and the company has a comfortable debt equity ratio of 0.004.

• The net loss margin has decreased due to increase in sales as compared to last year. However the managements contention is that it is due Ind AS effect wherein the notional losses of current investments have been factored in.

• The negative earnings per share have increased from (0.29) to (0.65) per share i.e. there is an increase of 124% due to the increased losses by the Company in the current year. The negative EPS is mainly on account of notional losses of current investments as per Ind AS and as such is of transitional nature.

h) Details of any change in Return on Net Worth as compared to the immediately previous financial year

Due to increase in loss for the current year the return on net worth i.e. the return on shareholders equity has gone down by 124%. The management has reiterated that since the net losses are mainly due to the Ind AS affect the negative EPS is of transitional nature.

Risk Management

The Company is aware of the risks associated with the business. The Senior Managements regularly analyses and takes corrective actions for managing / mitigating the same. In terms of the requirement of the Act, the Company has authorized Senior Management to manage, monitor and report on the principal risks and uncertainties that can impact the ability to achieve the Companys strategic objectives. The Senior Management periodically informs the board on various issues along with its recommendations and comments for Boards review and necessary action.

Statutory Auditors, their Report and Notes to Financial Statements

M/s. Parekh Sharma and Associates, Chartered Accountants (Firm Registration No. 129301W) were appointed as the Statutory Auditors of the Company as per the provisions of Section 139 of the Companies Act, 2013 to hold office from the conclusion of the 21st Annual General Meeting (AGM) held on September 28, 2017 until the conclusion of the Fifth consecutive AGM of the Company to be held in the year 2022 (subject to ratification of their appointment by the Members at every AGM held after the AGM held on September 28, 2017).

In accordance with the Companies Amendment Act, 2017, enforced on May 07, 2018 by the Ministry of Corporate Affair, the appointment of Statutory Auditors is not required to be ratified at every Annual General Meeting. Therefore, it is not proposed to ratify the appointment of auditors at the ensuing Annual General Meeting.

The Notes on financial statement referred to in the Auditors Report are self-explanatory and do not call for any further comments. The Auditors Report does not contain any qualification, reservation or adverse remark.

Details In Respect of Frauds Reported By Auditors:

During the year under review, the Statutory Auditors has not reported any instances of frauds committed against the Company by its Officer(s) or Employee(s) to the Board under section 143(12) of the Companies Act, 2013.

Secretarial Auditor

In terms of Section 204 of the Act and Rules made there under, M/s. DSM & Associates, Practicing Company Secretary (COP No. : 9394) have been appointed Secretarial Auditors of the Company. The secretarial audit report does not contain any adverse remarks or disclaimers it is enclosed as Annexure I to this report. The report is self-explanatory and do not call for any further comments.

Secretarial Standards

The Company is in compliance with the applicable secretarial standards.

Internal Auditor

In terms of Section 138 of the Companies Act, 2013 and the rules made there under, M/s M. V. Ghelani & Co., Chartered Accountants (ICAI Registration No. 119077W) are Internal Auditors of the Company. The audit Committee of the Board of Directors in consultation with the Internal Auditors, formulate the scope, functioning, periodicity and methodology for conducting the internal audit.

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 Companys 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.

Disclosures pursuant to The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

A) Details of the ratio of the remuneration of each director to the median employees remuneration and other details as required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

Sr. No. Name of Director/ KMP and Designation Remuneration of Director/KMP for Financial Year 2018-19 (र in Lacs) % increase in Remuneration in the Financial Year 2018-19 Ratio of remuneration of each Director/ to median remuneration of employees Comparison of the Remuneration of the KMP against the performance of the Company
1. Mr. Nimis Sheth Independent Director NIL N.A. N.A. N.A.
2. Mr. Virat Mehta Independent Director 6.10 (Sitting Fees) N.A. N.A. N.A.
3. Mr. Ajit Parundekar Non-Executive Director 2.05 (Sitting Fees) N.A. N.A. N.A.
4. Mr. Girish Bakre Independent Director NIL N.A. N.A.

N.A. N.A.

5. Ms. Nidhi Salampuria Non-Executive Director NIL N.A. N.A.
6. Mr. Gautam Khandelwal Executive Chairman 12.00 NIL 8.92:1

Company has made a Loss of र 85.01 Lakhs for F.Y. 18-19 VS Loss of 38.15 Lakhs (Previous Year)

7. Mr. Santosh Khandelwal Chief Financial Officer 12.77 19.88% N.A.
8. Ms. Nidhi Salampuria Company Secretary & Compliance Officer 25.00 26.26% N.A.

* Mr. Ajit Parundekar and Mr. Girish Bakre were only for part of the year thus, said information is not comparable.

Notes:-

i) The Ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2018-19: As per table given above

ii) The percentage increase in remuneration of each Director, Chief Financial Officer and Company Secretary during the financial year 2018-19 and: As per table given above.

iii) The percentage increase in the median remuneration of employees in the financial year 2018-19: 35.87%

iv) There were 19 confirmed employees on the rolls of the Company as on March 31, 2019.

v) Average percentage increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentage increase in the managerial remuneration and justification thereof and point out of there are any exceptional circumstances for increase in the managerial remuneration: As per table given above

vi) Affirmation that the remuneration is as per remuneration policy of the Company- Yes

B) Particulars of employees remuneration, as required under section 197(12) of the Companies Act, 2013, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016:

During the year under consideration, none of the employees of the Company were in receipt of remuneration in excess of limits prescribed section 197(12) of the Companies Act, 2013, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016 hence particulars as required under section 197(12) of the Companies Act, 2013, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016 are not given.

Conservation of Energy, Technology Absorption, Foreign Exchange Earning and Outgo

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, are given below:

(A) Conservation of Energy:

Your Company continues to take appropriate measures to reduce its energy consumption on a regular basis.

(B) Technology Absorption:

a. Research and Development (R & D):

The Company has not undertaken any R&D activity in the current year.

b. Technology Absorption, Adaptation and Innovation:

The Company has not imported any technology during the year.

(C) Foreign Exchange earnings and outgo:

During the year, the foreign Exchange outgo was र 2.57 lakhs (Previous year - र 0.85 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.

Cost Record

Maintenance of cost records as specified under Section 148(1) of the Act is not applicable to your Company.

Vigil Mechanism and Whistle Blower Policy

The Company has adopted a Vigil Mechanism and Whistle Blower Policy to report genuine concerns about any unethical behavior, actual or suspected fraud or violations of the Companys 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 Companys 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.

The following is a summary of Sexual Harassment Complaints received and disposed off during the year 2018-2019.

No. of Complaint received No. of Complaints disposed off No. of Complaints pending
Nil N.A. N.A.

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 Companys 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 Act), 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; and

vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Corporate Governance

The Company adheres to the requirements set out by the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, 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 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

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, Companys Bankers and all the employees during the year.

For and on behalf of the Board
Place: Mumbai Gautam Khandelwal
Date: July 30, 2019 Chairman
DIN (00270717)