refex renewables infrastructure ltd share price Directors report


Dear Members,

Your Board of Directors has pleasure in presenting the 28th (twenty-eighth) Annual Report of your Company together with the Audited Financial Statements (standalone & consolidated) for the financial year ended March 31, 2022.

FINANCIAL HIGHLIGHTS

The key financial highlights for the financial year 2021-22 ("FY22") are as follows:

(W in 000s)

Particulars

Standalone

Consolidated

2021-22 2020-21 2021-22 2020-21
Revenue from Operations (Net) 8,39,704 6,51,062 5,34,973 7,19,014
Other Income 55,166 98,115 91,329 1,24,621
Total Income 8,94,870 7,49,177 6,26,302 8,43,635
Expenditure (other than Tax) 957,055 846,763 10,66,811 12,59,573
Exceptional Items - - 1,16,114 -
Profit / (Loss) before Tax (62,185) (97,586) (3,24,395) (4,15,938)
Provision for Income Tax - - (1,874) 32,410
Provision for Deferred Tax - - 46,806 (1,80,886)
Profit / (Loss) after Tax (62,185) (97,586) (3,69,327) (2,67,462)
Earnings Per Share (^) (Basic & Diluted) (13.85) (21.35) (82.31) (59.17)
Net Fixed Assets 13,480 16,109 3,618 1,591
EBITDA Margins (%) -5.06% -11.13% -14.02% -17.70%
PAT Margins (%) -7.41% -14.99% -69.04% -37.20%
ROE (%) -138.50% -217.35% -822.57% -595.70%
ROCE (%) 716.31% -54.47% -3.29% -8.42%
D/E Ratio (In times) -2.47 -2.30 5.46 0.81

COMPANY PERFORMANCE

The financial statements have been prepared as per the Indian Accounting Standards (IND-AS) prescribed by the Institute of Chartered Accountants of India (ICAI).

During the year under review, the Company achieved a standalone turnover of ^8,397.04/- lakh as against ^6,510.62/- lakh during previous year registering an increase of ~29%.

The Company has achieved a consolidated turnover of ^5,349.73/- lakh as against T7,190.14/- lakh during previous year registering a decline of ~26%.

The Company has reported a loss of ^621.86/- lakh as against a loss of ^975.87/- lakh during previous year with a reduction in loss of ^354.01 lakh over the previous year on standalone basis.

The Company has reported a loss of ^3,693.27/- lakh as against a loss of ^2,674.62/- lakh during previous year with an increase in loss of Ti,018.65 lakh over the previous year, on consolidated basis.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the provisions of Section 129 read with Schedule III to the Companies Act, 2013 (hereinafter referred to as the "Act") and the Companies (Accounts) Rules, 2014, Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as the "SEBI Listing Regulations") and applicable Indian Accounting Standards, the Audited Consolidated Financial Statements of the Company for the FY22, together with the Auditors Report form part of this Annual Report.

INDIAN ACCOUNTING STANDARDS (IND-AS)

Financial Statements of your Company and its subsidiaries, for the financial year ended March 31, 2022, are prepared in accordance with IND-AS, as notified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time.

COMPLIANCE CERTIFICATE

In terms of Regulation 17(8) of the SEBI Listing Regulations, the Managing Director and the Chief Financial Officer of the Company have given Compliance Certificate to the Board on financial reporting and internal controls, as mentioned under Part B of Schedule II to the SEBI Listing Regulations.

OPERATIONS

Highlights of your Companys operations and state of affairs for FY22 are included in the Management Discussion and Analysis Report, capturing your Companys performance, industry trends and other material changes with respect to your Company, wherever applicable and forms part of this Annual Report.

DIVIDEND

In view of accumulated losses, the Board of Directors has not recommended any dividend on equity shares during the year under review.

TRANSFER TO GENERAL RESERVES

The Board of Directors has decided not to transfer any amount to the General Reserves, as the Company had not made any profit, during the year under review.

IMPACT OF COVID-19

The COVID-19 pandemic has pushed the global economy and humanity into a disaster. In an attempt to control this pandemic, the governments of various countries imposed a nationwide lockdown.

Although the lockdown may have assisted in limiting the spread of the disease, it has brutally affected the Country, unsettling the complete value chains of the most important industries.

The Company has taken into account all the possible impacts of COVID-19 pandemic in preparation of the financial statements, including but not limited to its assessment of liquidity and going concern assumption and recoverable values of its financial and non-financial assets.

The Company has carried out an assessment based on available internal sources of information up to the date of approval of these financial statements and believes that the impact of the COVID-19 pandemic is not material to these financial statements.

However, the impact assessment of this pandemic is a continuing process given the uncertainties associated with its nature and duration.

Accordingly, the Company will continue to monitor any material changes to future economic conditions.

Given the criticalities and uncertainties associated with the nature, condition, and duration of COVID- 19, the impact assessment on the Companys financial health will be continuously made and provided for as required.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

The Company has not distributed any amount as dividend during the previous financial years, and hence no instance arises for unclaimed/unpaid dividend.

Therefore, no amounts and shares were required to be transferred to the Investor Education and Protection Fund ("IEPF") set up by the Government of India.

FIXED DEPOSITS

The Company has neither invited nor accepted any deposits from the public falling within the preview of Section 73 of the Act read with the Companies (Acceptance of Deposits) Rule 2014 during the year.

There is no unclaimed or unpaid deposit lying with the Company.

SHARE CAPITAL AND CHANGES IN CAPITAL STRUCTURE

Authorized Share Capital

As on March 31, 2022, the Authorized Share Capital of your Company stood at ^7,00,00,000/- (Rupees Seven Crore only) divided into 70,00,000 (Seventy Lakh only) equity shares of face value of TI0/- (Rupees Ten only) each, aggregating to ^7,00,00,000/- (Rupees Seven Crore only).

Paid-up Share Capital

As on March 31, 2022, the Paid-up Equity Share Capital of your Company stood at ^4,48,99,000/- (Rupees Four Crore Forty-Eight Lakh and Ninety- Nine Thousand only) comprising of 44,89,900 (Forty- Four Lakh Eighty-Nine and Nine Hundred only) equity shares of face value of T10/- (Rupees Ten only) each.

The Authorized and Paid-Up Share Capital of the Company remains unchanged during FY22.

There are no convertible securities issued in the Company, as on the date of this Report.

Your Company has not issued equity shares with differential rights as to dividend, voting or otherwise.

Considering the funding requirements in future for growth and expansion of your Company and opex and capex purposes, your Company may issue further shares for which Authorized Share Capital of your Company is proposed to be increased from ^7,00,00,000/- (Rupees Seven Crore only) divided into 70,00,000 (Seventy Lakh only) equity shares having face value of TI0/- (Rupees Ten only) each to ^20,00,00,000/- (Rupees Twenty Crore only) divided into 2,00,00,000 (Two Crore only) equity shares having face value of T10/- (Rupees Ten only) each, by addition of 1,30,00,000 (One Crore and Thirty Lakh only) equity shares having face value of T10/- (Rupees Ten only) each.

Necessary resolution is being proposed for approval of the members of the Company at the ensuing annual general meeting.

CHANGE OF NAME OF THE COMPANY FROM "SUNEDISON INFRASTRUCTURE LIMITED" TO "REFEX RENEWABLES & INFRASTRUCTURE LIMITED"

Your Company was originally incorporated with the name YKM Industries Limited on August 04, 1994.

In 2018, there had been a change in the Management Control and Objects of the Company, therefore, the Board of Directors, considered it fit and prudent to change the name of the Company as part of corporate rebranding which would reflect the magnitude of operations of the Company, as the Company was spearheading its activities into new line of activity that is solar power generation and its allied activities, construction of commercial infrastructure etc.

The New Management had requested confirmation from SunEdison LLC, Two City Place Drive, 2nd Floor, St. Louis, Missouri, USA 63141, that the Company, and its designated affiliates may be entitled to make use of the "SunEdison" trademark owned and maintained by SunEdison LLC as a result of acquiring various business assets from SunEdison through the Sale and Purchase Agreement dated 4th June, 2017 and as amended on 16th May, 2018 ("SPA Agreement") between SunEdison Energy India Private Limited, SunEdison Research Private Limited, SunEdison Products Singapore Pte. Ltd., Mr. Pashupathy Shankar Gopalan, SunEdison International, Inc. and Refex Solar (S) Pte. Ltd. (collectively referred to as the "New Management").

Accordingly, your Board of Directors in its meeting held on August 24, 2018 resolved to change the name of the Company from "YKM Industries Limited" to "SunEdison Infrastructure Limited".

The request was approved by SunEdison LLC, vide its letter dated October 08, 2018, granting

permission that Refex Group and its designated affiliates are authorized pursuant to the SPA Agreement to make use of the "SunEdison" trademark in continuation of the business assets so acquired therein so long as such use is not inconsistent the description of authorized purpose of the acquired business assets and is not used outside of the physical territory of the Republic of India.

Any purported use of the "SunEdison" trademark not consistent with the acquired business assets or any use outside of the territory of the Republic of India is not authorized and SunEdison reserves all rights to object in those circumstances.

In this connection, the Company, in its 24th Annual General Meeting held on September 28, 2018, had also obtained the approval of shareholders to change its Objects into the new line of business activity, as per the SPA Agreement.

Further, in line with its revised Objects, the Company had received approval for name availability for the proposed name "SunEdison Infrastructure Limited" from the Central Registration Centre, Ministry of Corporate Affairs, vide its letter dated October 11, 2018.

Subsequently, the new name ‘SunEdison Infrastructure Limited was approved by the shareholders by way of a special resolution passed in their extra-ordinary general meeting on November 16, 2018.

The new name was also approved by the Central Government and accordingly, the Registrar of Companies, Chennai had issued afresh Certificate of Incorporation in the new name of the Company, w.e.f. January 28, 2019.

For the purpose of consolidation and to bring all the business verticals and entities under one brand name, i.e., ‘REFEX, and in order to identify them as a commonly controlled entities, your Board of

Directors, at its meeting held on May 30, 2022, had decided to change name of the Company from SunEdison Infrastructure Limited to Refex

Renewables & Infrastructure Limited, subject to the shareholders, approval of Central Government and other relevant statutory and regulatory authorities.

The proposed name has also been made available by the Central Registration Centre located at Indian Institute of Corporate Affairs (IICA), vide its approval letter dated August 05, 2022.

Your Board believes that the new name will represent Refex Groups activities and will be in the best interest of the Companys operations and all stakeholders.

This decision upon your approval, will see all your Companys business segments to be referred by the new brand name "Refex". This business decision to change the name of the Company is part of the branding strategy for the Refex Group. This does not, in any way, mean change in constitution/ management/ objects of the Company.

The proposed change of name of the Company would not result in change of the legal status or constitution or operations or activities of the Company, nor would it affect any rights or obligations of the Company or the members / stakeholders and would be subject to approval of the Ministry of Corporate Affairs.

Necessary resolution is being proposed for approval of the members of the Company at the ensuing annual general meeting.

EMPLOYEES LONG TERM INCENTIVE PLAN

With the objective to promote entrepreneurial behaviour among employees of the Company, motivate them with incentives and reward their performance with ownership in proportion to the contribution made by them as well as align the interest of the employees with that of the Company, SunEdison Infrastructure Limited - Employees Stock Option Scheme 2019 ("SunEdison ESOS 2019") was approved by the Board of Directors of your Company on December 20, 2019, which was subsequently approved by the members of the Company, in an extra-ordinary general meeting ("EGM") held on January 13, 2020.

Applicable disclosures as stipulated under Regulation 14 read with Part F of Schedule I to the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, with regard to the SunEdison ESOS 2019, are provided as Annexure-A to this Report. The Company, however, not granted any options to any of the employees of the Company, its holding company or subsidiary company till date.

Further, the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SEBI SBEB Regulations") have also been notified w.e.f. August 13, 2021, which chalked out various governing provisions which were not present under the old regulations, namely, the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.

This made the SunEdison ESOS 2019 un-aligned with the latest regulatory provisions. Also, the SunEdison ESOS 2019 could not be initiated at all due to the Scheme being less lucrative to the employees as well as the Company.

Therefore, the management of the Company is of the view to terminate the SunEdison ESOS 2019 and accordingly, the Nomination and Remuneration Committee and the Board of Directors of the

Company, in their respective meetings held on August 10, 2022, has formulated and approved a new employee stock option scheme, namely, RRIL - Employees Stock Option Scheme 2022 ("RRIL ESOS 2022"), which is comparatively more lucrative to reward the employees and also is in compliance of the latest provisions of the law and regulations.

As stated, the name of the Company is proposed to be changed from SunEdison Infrastructure Limited to Refex Renewables & Infrastructure Limited, accordingly, the new scheme is being formulated and proposed to be adopted in the abbreviated nomenclature, viz. RRIL and named as RRIL - Employees Stock Option Scheme 2022.

Necessary resolutions are being proposed for approval of the members of the Company at the ensuing annual general meeting.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

As on March 31, 2022, your Company has 06 (six) subsidiaries and 25 (twenty-five) step-down subsidiaries as follows:

Subsidiaries:

1. Refex Green Power Private Limited

2. Megamic Electronics Private Limited

3. Enrecover Energy Recovery Solutions Private Limited

4. SEI Solartech Private Limited

5. Ishaan Solar Power Private Limited

6. SIL Power Storage Solutions Private Limited

 

(Incorporated w.e.f. October 01, 2021)

Step-down Subsidiaries:

7. SEI Tejas Private Limited

8. Broil Solar Energy Private Limited

9. Athenese Energy Private Limited

10. Flaunt Solar Energy Private Limited

11. Sherisha Bikaner Solar Power Private Limited

12. Sherisha Solar SPV Two Private Limited

13. Spangle Energy Private Limited

14. Taper Solar Energy Private Limited

15. Wither Solar Energy Private Limited

16. Engender Developers Private Limited

17. Scorch Solar Private Limited

18. Singe Solar Energy Private Limited

19. Sourashakthi Energy Private Limited

20. Swelter Energy Private Limited

21. Torrid Solar Power Private Limited

22. Kiln Solar Energy Private Limited

23. Sherisha Rooftop Solar SPV Five Private Limited

24. Sherisha Rooftop Solar SPV Four Private Limited

25. Sherisha Rooftop Solar SPV Three Private Limited

26. STPL Horticulture Private Limited

27. SunEdison Rooftop Solar SPV 6 Private Limited

28. SIL Jupiter Solar Private Limited

29. SIL Mercury Solar Private Limited

30. SIL Neptune Solar Private Limited

31. Sherisha Solar LLP

During FY22, the Company has incorporated SIL Power Storage Solutions Private Limited as a wholly- owned subsidiary, w.e.f. October 01, 2021.

SILRES Energy Solutions Private Limited ceased to be a subsidiary w.e.f. August 16, 2021.

Further, two step-down subsidiaries, namely, SIL Govindam Energy Private Limited and SIL Govindam Power Private Limited, are under the process of striking-off.

A statement containing the salient features of the financial statements of the subsidiary companies of the Company in the prescribed form AOC-1, forms part of the Consolidated Financial Statements (CFS) in compliance with Section 129(3) and other applicable provisions, if any, of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014.

The said form also highlights the financial performance of each of the subsidiaries, included in the CFS of the Company, pursuant to Rule 8(1) of the Companies (Accounts) Rules, 2014.

Pursuant to the provisions of Section 136 of the Act, standalone and consolidated financial statements along with the relevant documents and separate audited accounts in respect of the subsidiaries of the Company are available in the website of the Company at the weblink: https://sunedisoninfra.com/investor-relations.php.

INFORMATION ABOUT THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THE SUBSIDIARIES

The Company regularly monitors the performance of the subsidiary companies.

There has been no material change in the nature of the business of the subsidiary companies except in Sherisha Bikaner Solar Private Limited (formerly Sherisha Agro Private Limited).

Previously, Sherisha Bikaner Solar Private Limited was engaged in the agriculture business, subsequently, during the year under review, the object was changed to renewables and green energy business, and accordingly, the name was also change to align with its new objects, by way of approval of its shareholders in its EGM held on January 13, 2022.

CORPORATE GOVERNANCE

In terms of Regulation 15(2)(a) of the SEBI Listing Regulations, the compliance with the corporate governance provisions as specified in regulations 17, 49, 17A, 18, 19, 20, 21, 22, 23, 24, 50, 24A, 25, 26, 27 and clauses (b) to (i) 51 and (t) of sub-regulation (2) of regulation 46 and para-C, D and E of Schedule V shall not apply in respect of a listed entity having paid up equity share capital not exceeding rupees ten crore and net worth not exceeding rupees twenty five crore, as on the last day of the previous financial year.

Since, the paid-up equity share capital and net worth were not exceeding the aforesaid stipulated thresholds, as on the last day of the previous financial year, accordingly, the compliance with corporate governance provisions is not be applicable to the Company and therefore, your Company is not required to submit corporate governance report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report ("MD&A") for FY22, giving a detailed analysis of the Companys operations and other information, as stipulated under Regulation 34(2)(e) of the SEBI Listing Regulations, is presented in a separate section forming part of this Annual Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMPs)

As on March 31, 2022, your Board comprises of 05 (five) Directors, out of which, two are independent including one woman director, two are nonexecutive directors and one is managing director, as follows:

S. No. Name DIN Designation
1. Mr. Kalpesh Kumar 07966090 Managing Director
2. Mr. Anil Jain 00181960 Non-Executive Director
3. Mr. Shailesh Rajagopalan 01855598 Non-Executive Director
4. Ms. Jamuna Ravikumar 08009308 Independent Director
5. Mr. Pillappan Amalanathan 08730795 Independent Director

Re-Appointments / Appointments

In accordance with the provisions of Section 152 of the Act and the Articles of Association of the Company, Mr. Shailesh Rajagopalan (DIN: 01855598), Director (Non-Executive) of the Company retires by rotation in the ensuing AGM and being eligible offers himself for re-appointment.

His brief resume and other related information are being given in the Notice convening the 28th AGM of your Company. Your Board has recommended his re-appointment and accordingly, suitable resolution proposing his re-appointment forms part of the Notice of the AGM.

The Board of Directors, at its meeting held on September 07, 2021 and on the recommendation of the Nomination and Remuneration Committee had re-appointed Mr. Kalpesh Kumar as Managing Director and a Key Managerial Personnel of the Company for a further period of 3 (three) years with effect from September 26, 2021 to September 30, 2024, which was subsequently approved by the shareholders of the Company in their 27th AGM held on September 30, 2021, by way of a special resolution.

Further, the shareholders in their 27th AGM held on September 30, 2021, had also re-appointed Ms. Jamuna as an Independent Director of the Company for second tenure of 02 (two) consecutive years, till the conclusion of 29th AGM to be held in the year 2023, not liable to retire by rotation, on the Board of the Company.

Further, the Company confirms that it has not made any default under Section 164(2) of the Act, as on March 31, 2022.

Cessation

There was no cessation of any Director during FY22.

Key Managerial Personnel (KMPs)

In terms of provisions of Section 203(1) of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company had the following Key Managerial Personnel of the Company as on March 31, 2022:

1. Mr. Kalpesh Kumar, Managing Director

2. Mr. Dinesh Kumar Agarwal, Chief Financial Officer

Mr. R V Suresh Babu (ACS-44579), Company Secretary & Compliance Officer and a Key Managerial Personnel, had resigned w.e.f. December 10, 2021.

After the end of the financial year under review, Mr. Vinay Aggarwal (ACS-39099) has been appointed as Company Secretary & Compliance Officer and a Key Managerial Personnel of the Company w.e.f. May 30, 2022, in accordance with the provisions of Section 2(51) and 203(1) of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Declaration by Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and the SEBI Listing Regulations.

The Independent Directors of the Company have also registered their names in the data bank for Independent Directors maintained by the Indian Institute of Corporate Affairs (IICA), Manesar (notified under Section 150(1) of the Act, as the institute for the creation and maintenance of data bank of Independent Directors).

The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise and are independent of management.

Familiarisation Programme for Independent Directors

The details of programme for familiarization of Independent Directors with the Company, their roles, rights, responsibilities in the Company, and related matters are put up on the website of the Company at the web-link:

https://sunedisoninfra.com/reports/policies/Indepe ndent-Directors-Familiarization-Programme.pdf

REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND PARTICULARS OF EMPLOYEES

The remuneration paid to the Directors is in accordance with the Remuneration Policy formulated in accordance with Section 178 and other applicable provisions of the Act (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).

During the year, the Non-Executive Directors of the Company had no pecuniary relationship or transaction with the Company, other than sitting fees and reimbursement of expenses, if any, incurred by them for the purpose of attending meetings of the Company.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided as Annexure-B to this Report.

A statement containing particulars of employees as required under Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided as a separate annexure forming part of this Report.

However, the Annual Report is being sent to the members excluding the aforesaid annexure.

The said information is available for electronic inspection during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.

Disclosure under Section 197(14) of the Act

The Managing Director of your Company does not receive remuneration or commission from any of the subsidiaries of the Company.

BOARD MEETINGS

During FY22, the Board met 7 (seven) times on June 30, 2021, August 10, 2021 (adjourned meeting of August 07, 2021), September 07, 2021, October 18, 2021, November 18, 2021, February 14, 2022 and March 21, 2022.

The intervening gap between any two consecutive meetings of the Board was within the stipulated time frame prescribed under the Act.

All the Directors attended all the Board meetings held during FY22.

SEPARATE MEETING OF INDEPENDENT DIRECTORS

In terms of requirements of Schedule IV to the Act, a separate meeting of the Independent Directors was held on March 31, 2022 for FY22, without the presence of executives and non-independent directors.

The meeting was conducted in a flexible manner to enable the Independent Directors inter alia to discuss matters pertaining to the performance of Non-Independent Directors and the Board as a whole, review the performance of the Chairperson of the Company after taking inputs from the executive and non-executive directors.

The meeting of the Independent Directors was attended by both independent directors, namely, Mr. Pillappan Amalanathan and Ms. Jamuna Ravikumar.

BOARD COMMITTEES

Your Company has constituted several committees of the Board which have been established as part of good corporate governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

As on March 31, 2022, your Board has 03 (three) mandatory committees, namely:

1. Audit Committee;

2. Nomination & Remuneration Committee;

3. Stakeholders Relationship Committee.

All the recommendations made by the Committees of the Board including the Audit Committee were accepted by the Board.

Audit Committee

As on March 31, 2022, the Audit Committee comprises of 03 (three) members and the constitution is as per the provisions of Section 177 of the Act, as follows: -

S. No. Name Category Position
1. Mr. Pillappan Amalanathan Independent Director Chairman
2. Ms. Jamuna Ravikumar Independent Director Member
3. Mr. Shailesh Rajagopalan Non-Executive Director Member

All members of the Audit Committee are financially literate and have experience in financial management.

The Company Secretary acts as Secretary to the Audit Committee.

During FY22, 05 (five) meetings of the Audit Committee were held on June 30, 2021, August 10, 2021(adjourned meeting of August 07, 2021), October 18, 2021, November 18, 2021 and February 14, 2022. All the members of the Audit Committee attended the Audit Committee meetings held during FY22.

Upon invitation, the CFO and the Statutory Auditors of the Company attend the meetings of the Audit Committee

All the recommendations of the Audit Committee have been accepted by the Board of Directors.

Reporting of Internal Auditor

The Internal Auditor of the Company attends meetings of the Audit Committee and findings of Internal Audits, if any, are reported directly to the Audit Committee.

Nomination and Remuneration Committee (NRC)

As on March 31, 2022, the Nomination and Remuneration Committee comprises of 03 (three) members and the constitution is as per the provisions of Section 178 of the Act, as follows: -

S. No. Name Category Position
1. Mr. Pillappan Amalanathan Independent Director Chairman
2. Ms. Jamuna Ravikumar Independent Director Member
3. Mr. Shailesh Rajagopalan Non-Executive Director Member

The Company Secretary acts as Secretary to the NRC.

During FY22, 01 (one) meeting of the NRC was held on September 07, 2021.

All the members of the NRC attended NRC meeting held during FY22.

Nomination and Remuneration Committee, amongst others, is responsible for determining the Companys policy on recruitment and remuneration of Directors/ KMPs, Senior Management Personnel and other employees of the Company.

Remuneration Policy

Pursuant to provisions of Section 178 of the Act, the Nomination and Remuneration Committee (‘NRC) of your Board has formulated a Remuneration Policy for the appointment and determination of remuneration of the Directors including criteria for determining qualifications, positive attributes, independence of a director, key managerial personnel, senior management personnel and other employees of your Company.

The NRC has also developed the criteria for determining the qualifications, positive attributes, and independence of Directors and for making payments to executive and non-executive directors and senior management personnel of the Company.

The detailed Policy is available on the Companys website at: https://sunedisoninfra.com/investor- relations.php.

Remuneration of Executive Director

The Company pays remuneration by way of salary, benefits, perquisites and allowances (fixed component) and also remuneration based on net profit (variable component) to its Managing Director.

Annual increments, if any, are recommended by the NRC within the salary scale approved by the Board and the Shareholders of the Company.

The Board of Directors, on the recommendation of the NRC, decides the variable component payable to the Managing Director out of the net profits for the financial years and within the ceilings prescribed under the Act, considering the criteria such as the market standards, financial performance, liquidity etc. of the Company.

Details of fixed components and performance linked incentives

The remuneration of managing director comprises fixed components and performance linked incentive (Variable Pay) which is paid as per the Remuneration Policy, and subject to the approval of NRC.

No profit-based commission has been paid to the Managing Director for FY22.

Criteria of making payments to Non-Executive Directors

The Non-Executive Directors are entitled to sitting fees for attending meetings of the Board and/or its committees.

Disclosure of Loans and advances in the nature of loans to firms/companies in which directors are interested (as stipulated under Section 185 of the Act) by name and amount

During FY22, there are no loans or advances provided by the Company and its subsidiaries to firms/ companies in which directors were interested.

PERFORMANCE EVALUATION

The Companies Act, 2013 mandates formal annual evaluation by the Board of its own performance and that of its committees and individual Directors Schedule IV to the Act provides that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the Directors being evaluated.

Pursuant to the provisions of the Act read with relevant rules issued thereunder and the Circular issued by the Securities and Exchange Board of India (SEBI) on January 05, 2017 with respect to Guidance Note on Board Evaluation, the evaluation of the annual performance of the Directors/ Board/ Committees was carried out for FY22.

The parameters for the performance evaluation of the Board, inter-alia, include performance of the Board on deciding long term strategy, rating the composition and mix of Board members, discharging of governance and fiduciary duties, handling critical and dissenting suggestions, etc.

The performance of the Board was evaluated after seeking inputs from all the Directors on the basis of above parameters. The performance of the Committees was evaluated after seeking inputs from the Committee members on the basis of criteria such as the composition of Committees, effectiveness of Committee meetings, etc.

NRC reviewed the performance of the Individual Directors, the Committees of the Board and the Board as a whole.

A questionnaire for the evolution of the Board, its committees and the individual members of the Board, covering various aspects of the performance of the Board and its Committees, including composition and quality, roles and responsibilities, processes and functioning, adherence to good practices of corporate governance was sent to the Directors.

In a separate meeting of the Independent Directors, performance of Non-Independent Directors and the Board as a whole was evaluated, taking into account the views of Executive Directors and Non-Executive Directors.

The Directors expressed their satisfaction with the evaluation process.

Stakeholders Relationship Committee (SRC)

As on March 31, 2022, the Stakeholders Relationship Committee comprises of 03 (three) members and the constitution is as per the provisions of Section 178 of the Act, as follows: -

S. No. Name Category Position
1. Mr. Pillappan Amalanathan Independent Director Chairman
2. Ms. Jamuna Ravikumar Independent Director Member
3. Mr. Anil Jain Non-Executive Director Member

The Company Secretary acts as Secretary to the SRC.

During FY22, 02 (two) meeting of the SRC was held on April 26, 2021 and November 26, 2021.

All the members of the SRC attended both the SRC meetings held during FY22.

This Committee particularly looks into the investors grievances and oversees the performance of the Share Department/ Share Transfer Agent and to ensure prompt and efficient investors services.

Nature of Complaints and Redressal Status

During FY22, the complaints and queries received by the Company were general in nature, which include issues relating to non-receipt of dividend warrants, annual reports, shares, transfer/ transmission of shares, loss of shares etc. and were resolved to the satisfaction of the shareholders.

There were no investor grievances remaining unattended/pending as at March 31, 2022.

The Board, in its meeting held on May 30, 2022, has designated Mr. Vinay Agga rwa l, Company Secreta ry, as the Compliance Officer of the Company, w.e.f. May 30, 2022.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134 of the Act, the Directors confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year March 31, 2022 and of the profit and loss of the Company for that period;

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors had prepared the annual accounts on a going concern basis; and

(e) the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

(f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

COMPLIANCE WITH SECRETARIAL STANDARDS

Your Directors confirm that pursuant to the provisions of Section 118(10) of the Act, the Company has complied with the applicable provisions of the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All transactions entered into by the Company with its related parties during the year were in ordinary course of business and on arms length basis and in compliance of the provisions of Section 177 read with Section 188 of the Act.

During FY22, the Company had not entered into any arrangement/transaction with related parties which could be considered material as stipulated under the provisions Section 188(1) of the Act read with relevant rules made thereunder and accordingly, no information is required to be given in the prescribed form AOC-2.

Further, the details of the related party transactions as per IND-AS 24 are set out in Note No. 32 to the Standalone Financial Statements of the Company.

AUDITORS AND AUDITORS REPORT

Statutory Auditors & their Report

M/s VKAN & Co., Chartered Accountants (FRN: 014226S) were appointed as Statutory Auditors for one term of 05 (five) consecutive years, at the 25th AGM of the Company, held on 26th September, 2019, for auditing the accounts of the Company from the financial year 2019-20 to 2023-24.

M/s VKAN & Co., Chartered Accountants (FRN: 014226S) have confirmed that they are eligible and not disqualified to continue as the Statutory Auditors of the Company.

The Auditors Report on Standalone Financial Statements does not contain any qualification, reservation or adverse remark.

The Board Comments on the Auditors Qualification on the Consolidated Financial Statements are detailed below:

S. No. Auditors Qualification Board Comments
1. "Liabilities aggregating to W758.24 lakhs outstanding under borrowings, trade payables and other current liabilities do not have sufficient appropriate audit evidence to corroborate the managements assessment of such obligations. The management is currently carrying out necessary reconciliations of such liabilities with the corresponding underlying document/ contracts and other relevant information.
Hence, we are unable to determine whether any adjustment might be necessary to such amounts and the corresponding impact on results and net worth as disclosed in the consolidated financial results." Suitable adjustments arising out of such reconciliation, if any, will be incorporated once such exercise is complete.

Further, there were no frauds reported by the Statutory Auditors to the Audit Committee or the Board under Section 143(12) of the Act.

Cost Records & Cost Audit

Your Company is not required to maintain cost accounts and records as specified by the Central Government under sub-section (1) of Section 148 of the Act and the relevant rules made thereunder.

Further, the requirement of Cost Audit as stipulated under the provisions of Section 148 of the Act, is also not applicable for the business activities carried out by the Company.

Secretarial Auditors & their Report

Pursuant to provisions of Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended or re-enacted from time to time), your Company had appointed Mr. Mohan Kumar, Company Secretary in whole-time practice, having ICSI Membership No. FCS-4347 and COP No. 19145, for conducting the Secretarial Audit of your Company for FY22.

The Secretarial Audit Report in prescribed form MR- 3, issued by the Secretarial Auditor is annexed as Annexure-C to this Report.

The Report does not contain any qualification, reservation or adverse remarks except the following observations:

S. No. Compliance Requirement (Regulations/ Circulars/ Guidelines including specific clause) Details of Violation Details of action taken Observations/ Remarks of the Secretarial Auditor Board Comments
1. Regulation 33(3)(d) of SEBI LODR Regulations - The listed entity shall submit audited standalone & consolidated financial results for the last quarter and financial year, within sixty days from the end of the financial year along with the audit report. Delayed submission of audited standalone & consolidated financial results for the quarter and financial year ended March 31, 2021, on August 10, 2021, i.e., with a delay of 41 days. BSE Limited (BSE) had levied a penalty of ^2,05,000/- excl. applicable GST. The Company has submitted the audited financial results on August 10, 2021 and paid the penalty levied by BSE on August 19, 2021. Delay in filing of Financial Results were due to the restrictions during second wave of Covid-19 pandemic in the Country.
2. Regulation 33(3)(a) & (b) of SEBI LODR Regulations - The listed entity shall submit quarterly and year- to-date unaudited standalone & consolidated financial results to the stock exchange within forty-five days of end of each quarter, other than the last quarter. Delayed submission of unaudited standalone & consolidated financial results for the 1st quarter ended June 30, 2021, on October 18, 2021, i.e., with a delay of 64 days. BSE had levied a penalty of Tl,45,000/- excl. applicable GST (till September 13, 2021). The Company has submitted the unaudited financial results on October 18, 2021. The Company requested for waiver of the fine, which was approved by the Internal Committee of BSE and waived-off. Delay in filing was due to the SEBI Interim Order, Forensic Audit, Confirmatory Order and Covid-19 Second Wave, creating a lot of administrative and other challenges.
3. Regulation 33(3)(a) & (b) of SEBI LODR Regulations - The listed entity shall submit quarterly and year-to-date unaudited standalone & consolidated financial results to the stock exchange within forty- five days of end of each quarter, other than the last quarter. Delayed submission of unaudited standalone & consolidated financial results for the 2nd quarter ended September 30, 2021, on November 18, 2021, i.e., with a delay of 03 days. BSE had levied a penalty of T15,000/- excl. applicable GST (till November 17, 2021). The Company has submitted the unaudited financial results on November 18, 2021. The Company requested for waiver of the fine, which was approved by the Internal Committee of BSE and waived-off. Delay in filing by three days was due to heavy rains, thunderstorm and flood like situation in Chennai.

Further, the Secretarial Auditor has made comments on the matter of SEBI, which has been closed vide Revocation Order dated July 28, 2022 passed by SEBI, details of which are provided herein after.

RESTRUCTURING OF SUNEDISON

INFRASTRUCTURE LIMITED (SIL) & SEBI ORDERS

SunEdison Infrastructure Limited ("Company") is a public listed company, incorporated under the laws of India.

SIL is in the business of providing engineering, procurement and construction ("EPC") services in solar energy generation and promotes several companies ("Project SPVs") that are in the business of generating and distributing renewable energy.

Project SPVs:

Completed Projects: Ongoing Projects:
- Athenese Energy Private Limited - Flaunt Solar Energ Private Limited - Sherisha Solar SPV Two Private Limited - Spangle Energy Private Limited - Taper Solar Energy Private Limited - Wither Solar Energy Private Limited - Engender Developer Private Limited - Scorch Solar Energy Private Limited - Singe Solar Energy Private Limited - Sourashakthi Energy Private Limited - Swelter Energy Private Limited - Torrid Solar Power Private Limited - SIL Govindam Energy Private Limited* - SIL Govindam Power Private Limited* *Under the process of Striking-Off. Broil Solar Energy Private Limited KILN Solar Energy Private Limited STPL Horticulture Private Limited Sherisha Rooftop Solar SPV Three Private Limited Sherisha Rooftop Solar SPV Four Private Limited Sherisha Rooftop Solar SPV Five Private Limited

The promoters of the Company namely, Mr. Pashupathy Shankar Gopalan and Mr. Anil Jain ("Promoters"), entered into discussions with foreign external investors, Fenice Investment Group LLC ("Fenice") and South Lake One LLC ("South Lake", together with Fenice, the "Investors"), to invest in the EPC business of SIL and the Project SPVs of SIL with under-construction solar power projects (together the "Identified Businesses").

Identified Businesses for transfer as per Framework Agreement:

Broil Solar Energy Private Limited

KILN Solar Energy Private Limited

STPL Horticulture Private Limited

Sherisha Rooftop Solar SPV Three Private Limited

Sherisha Rooftop Solar SPV Four Private Limited

Sherisha Rooftop Solar SPV Five Private Limited

Ishaan Solar Power Private Limited

SEI Tejas Private Limited

SILRES Energy Solutions Private Limited

Megamic Electronics Private Limited

Enrecover Energy Recovery Solutions Private Limited

Sherisha Solar Private Limited (now Sherisha Solar LLP)

On June 23, 2020, the Company and certain other individuals and SIL group entities (including the SIL Promoters) entered into a framework agreement ("Framework Agreement") to govern the investment transaction with the Investors.

The Company has disclosed the execution of the Framework Agreement to the BSE Limited ("BSE") (stock exchange on which the equity shares of the Company are listed) on June 24, 2020.

Under the Framework Agreement, the Company, inter alia, proposed to transfer certain identified businesses to a privately incorporated company, SunEdison Energy Solutions Private Limited, which was then a related party of the Company falling within the meaning of Section 2(76) of the Act, for which an extraordinary general meeting of the Company ("EGM") was conducted on December 11, 2020, and the shareholders approved the transfer as mentioned above, to SunEdison Energy Solutions Private Limited.

On and from September 22, 2020, one of the public shareholders of the Company, raised queries over multiple emails to the Company until the date of the EGM, pertaining to the transactions proposed to be undertaken under the Framework Agreement which was disclosed to the BSE on June 24, 2020 and the transactions contemplated in the EGM notice circulated by the Company on November 18, 2020.

The shareholder also raised a SCORES complaint with the Company, prior to the EGM, alleging, inter alia, that the transactions contemplated in the Framework Agreement are against the interests of the minority shareholders of the Company.

The Company responded to each of his queries. His queries were predominantly around the following issues:

 

(a) Clarifications were sought on whether the consideration being paid for the business transfer from the Company to India HoldCo (SunEdison Energy Solutions Pvt. Ltd) was adequate. In this context, the shareholder sighted the consolidated audited and unaudited financial statements of the Company and other records published by SIL, and alleged that the valuations of the businesses being transferred are more than the consideration being paid;

(b) Why are the businesses of SIL being sold to an entity in which the promoters of SIL are shareholders and the public shareholders are not being made party in some manner to the transaction or being directly compensated; and

(c) Whether the Framework Agreement, valuation reports prepared for the business transfer and Business Transfer Agreement can be shared electronically for the shareholder to peruse.

SEBIs Interim Order/ Appointment of Forensic Auditor:

Subsequently upon receipt of the complaint of the shareholder, SEBI passed an interim order dated 15th February 2021 under Section 19 read with Sections 11(1), 11(4) of the SEBI Act, 1992, inter alia, restrained the parties to the Framework Agreement from proceeding with the proposed transactions contemplated thereunder and directed BSE to conduct a forensic audit on the Company, for the period from April 1, 2019 to December 31, 2020 ("Audit Period"), inter-alia, to verify the following:

 

(i) Manipulation of books of accounts including the authenticity of item-wise details of grouping/ re-grouping of assets (segment-wise and division wise) ascertaining the details of the values and corresponding liabilities etc.;

(ii) Misrepresentation of facts including financials and/or business operations;

(iii) Wrongful diversion/siphoning of Companys funds;

(iv) All related party transactions carried out during the Audit Period;

(v) Whether the valuation of the assets proposed to be transferred via slump sale and also under the Framework Agreement as per recognized valuation methodology and such valuation represent the true fair market values of those assets and are in agreement with the transaction value agreed to by the Company; and

(vi) Any other related matter.

The forensic auditor/ audit firm so appointed as per the Order was directed to submit a Report to BSE within 03 months form the date of the Order. Further, SEBI had directed BSE to file the forensic audit report along with its recommendation to SEBI within 15 days, from the date of receipt of forensic audit report from the forensic auditor.

In this regard, BSE had appointed "BDO India LLP" as the forensic auditor of the Company in term of the Order.

The Auditors commenced the forensic audit and in the meanwhile the Company and Fenice (parties to the Framework Agreement) submitted their responses and applications in response to information sought by SEBI in its interim order, consequent to this, an opportunity for personal hearing was granted to both Company and Fenice on April 27, 2021 and April 30, 2021 wherein, both the Company and Fenice appeared through their authorised representatives ("ARs").

The ARs reiterated the submissions made by the Company and Fenice, respectively, in their written submissions, and also reiterated their prayers for withdrawal of the interim directions.

SEBIs Confirmatory Order:

After an enquiry/examination of the responses filed by the Company, SEBI has passed a Confirmatory

Order dated 15th July, 2021 and confirmed the directions issued vide ex-parte ad-interim Order dated February 15, 2021, subject to the following modifications:

i Permitting Fenice Investment Group LLC and South Lake One LLC to convert their Compulsorily Convertible Preference Shares ("CCPS") held in SILRES Energy Solutions Private Limited into equity shares and exercise certain rights associated with it under the Framework Agreement.

ii Permitting SunEdison Infrastructure Limited to license the brand "SunEdison" to another entity as a revenue generating resource for a time period of not more than 01 year which would be renewable upon expiry at the option of the Company.

Based on the Confirmatory Order dated July 15, 2021, the Company and the Investors proposed to terminate the Framework Agreement in order to enter into a settlement with SEBI (except to the extent of reliefs granted in the confirmatory order as stated above) and filed a Settlement Application vide application no. 6534/2021 dated August 02, 2021, stating that:

1. The Slump Sale of the Identified Business to SunEdison Energy Solutions Private Limited ("SESPL") at a consideration of ^26.42 Crores (which was approved by the public shareholders), would be cancelled and conversion of loan of ^8.98 Crores granted by Sherisha Technologies Private Limited ("STPL") to SIL Rooftop Solar Power Private Limited ("SIL Rooftop") (which was approved by the public shareholders) will not be converted;

2. The Company will enter into appropriate agreements to repay and secure the loans provided by SILRES to the Company and its Subsidiaries; and

3. The Company is willing to enter into a settlement with SEBI in line with the SEBI settlement regulations, which may be arrived at after discussion with the SEBI Internal Committee and the High-Powered Advisory Committee.

Settlement Application:

Pursuant to the Settlement Application filed by the Company, SEBI had, vide its email dated November 15, 2021, invited the Company officials to attend its Internal Committee (IC) meeting scheduled on November 22, 2021 onwards via video conference for formulating the settlement terms.

The authorised representatives of the Company attended the SEBI IC meeting held on November 22, 2021 relating to Settlement Application filed by the Company with SEBI.

The Internal Committee has deferred the meeting and requested the Company to approach the Corporation Finance Investigation Department for confirmation whether the Internal Committee can proceed with the settlement proceedings.

The Internal Committee observed that the factfinding process is in progress and the matter is being investigated by SEBI.

However, in terms of Regulation 5(1)(b) of the SEBI (Settlement Proceedings) Regulations, 2018, no application for settlement of any specified proceedings shall be considered, if the audit or investigation or inspection or inquiry, if any, in respect of any cause of action, is not complete, except in case of applications involving confidentiality.

Since, the investigation by SEBI in the matter was still under progress, the Settlement Application couldnt be considered and returned by SEBI vide its letter dated December 29, 2021, on account of pending investigation, in terms of Regulation 3(5) of the SEBI (Settlement Proceedings) Regulations, 2018, advising to file the application once the examination in respect of the matter is completed.

Cancellation of Framework Agreement:

Thereafter, due to the concerns raised by the shareholder and subsequent audit and investigation by the regulatory bodies, the parties to the Framework Agreement decided to cancel the transactions under the Framework Agreement relating to the purchase of Identified Businesses from the Company and conversion of outstanding loan from Sherisha Technologies Private Limited to SIL Rooftop Solar Power Private Limited into equity shares of SIL Rooftop Solar Power Private Limited (except to the extent of South Lake one LLC and Fenice Investment Group LLC shareholding in SILRES Energy Solutions Private Limited).

All the parties to the Framework Agreement accorded their consent / approval to cancel the transactions under the Framework Agreement and upon confirmation received from all the parties, the Board of Directors of the Company had, accordingly, accorded its approval to cancel the transactions under the Framework Agreement, in its meeting held on March 21, 2022.

SEBIs Administrative Warning cum Advice:

Consequent to the forensic audit and subsequent investigation on the proposed transaction pertaining to the Framework Agreement including all its amendments (which was cancelled by the Board of Directors, in its meeting held on March 21, 2022) and the Interim Order dated February 15, 2021 and the Confirmation Order dated July 15, 2021 issued by SEBI, in the matter, SEBI, vide its letter dated July 15, 2022, had issued Administrative Warning cum Advice to the Company on the basis of its findings during the investigation process.

Based on the audit & investigations conducted by SEBI and other bodies, SEBI had come up with the following observations (verbatim provided below):

a. SIL has taken a loan from DN Energy Private Limited ("DEPL") of Rs.25 crores and revolving credit facility of Rs.35 crores. The outstanding loan as on 31st March, 2020 was Rs.15.97 Crores. 50% of the share capital of DEPL was held by Mr. Kalpesh Kumar, Managing Director of SIL till March 09, 2020.

From the MCA records, it is noted that email id for correspondence is

"cscompliance@sunedisoninfra.com" which is same as that of mentioned for SIL and the Contact no."+4443405950" is that of Refex Industries Limited in which Mr. Anil Jain, NonExecutive Director (Promoter) of SIL, is Managing Director. Also, SIL, in its Audit Committee Meetings held on May 30, 2019 and September 01, 2020 has taken omnibus audit committee approval for loan from DEPL during FY 2019-20 and FY2020-21, respectively, under Related Party Transaction approval stating nature of relationship as "Entities in which shareholders exercise significant influence".

In view of the above, it appears that DN Energy Private Limited is a related party of SIL and SIL has even after taking Audit Committee Approval of the said transaction failed to disclose the same in the Annual Report in terms of lnd-AS 24 during the FY 2019-20 and FY 2020-21. This has led to non-compliance of Regulation 4(1) (a), (b), 34(3) read with Para A of Schedule V and 48 of SEBI LODR Regulations, 2015 by SIL.

b. SIL paid advance of Rs.33.20 crores to SIL Rooftop Solar Power Pvt. Ltd. during the period April 2019 to December 2020 for acquisition of 64% stake of Sherisha Solar Pvt. Ltd. (SSPL). Approval of the Framework Agreement dated June 23, 2020 was taken from the Audit Committee in meeting held on June 23,2020.

From the minutes of the Audit Committee meeting of SIL dated June 23, 2020, it appears that the complete fact of giving advance to SIL Rooftop for acquisition of 64% stake of SSPL for was not disclosed to the Audit Committee. The same was disclosed as "Relevant Loans & Advances" and not separately highlighted to the Audit Committee. The complete fact has also not been disclosed to the shareholders in the EGM held on December 11, 2020 at the time of taking their approval for Framework Agreement dated June 23, 2020 and the same was only disclosed as "Relevant Loans & Advances".

An Investment of Rs.18.67crores for acquisition of 36% stake in SSPL was made by SIL in FY 202021. This was also not disclosed to the Shareholders in the EGM held on December 11, 2020. This violation has already been mentioned in the SEBI Confirmatory Order in the matter of SIL dated July 15, 2021.

The above has led to non-compliance of Regulation 4(1) (d), (e), (g), 4(2) (b) (i) 23(2), and 23(4) of SEBI (LODR) Regulations, 2015 by SIL.

c. The Company by making erroneous segment wise disclosures for the Quarter ended March 2020 and September 2020 has failed to comply with the provisions of "lnd-AS 108 - Operating Segments" and in turn violated regulation 4(1) (a), (b), 34(3) read with Para A of Schedule V and 48 of SEBI LODR Regulations, 2015.

This observation of clause (c) above was already rectified by the Company in February, 2021 by filing revised and corrected segment wise consolidated financial results for the quarter and half year ended September 30, 2020 vide its filing made to the BSE on February 27, 2021.

Further, the Audit Committee and the Board of Directors of the Company in their meeting held on July 22, 2022, inter-alia, have taken cognizance of the SEBIs Administrative Warning cum Advice Letter and further, ensured the necessary action including ratification of the following transactions as observed and advised by SEBI:

 

i. Availing of financing facility amounting to Rs.60 Crore (Rs.25 Cr. loan & Rs.35 Cr. revolving credit facility) from DN Energy Private Limited (DEPL), (a related party during the period October 08, 2018 to March 09, 2020);

ii. Payment of advance of Rs.33.20 Crore given to SIL Rooftop Solar Power Private Limited (a wholly-owned subsidiary company) to acquire 64% stake in Sherisha Solar LLP (another wholly-owned subsidiary entity).

Since, the Company had already suitably cancelled / terminated the Framework Agreement dated June 23, 2020, in respect of which the Company was earlier directed to maintain status quo by the Interim and Confirmatory Orders passed by SEBI, restraining the Company from disposing, selling or alienating its assets, including effecting the transactions agreed upon under the Framework Agreement and complied with the directions of SEBI, accordingly, SEBI, vide its Final/Revocation Order bearing reference no. WTM/AB/CFID/CFID- SEC2/18110/2022-23 dated July 28, 2022, has revoked the restraint imposed on the Company vide the Interim Order dated February 15, 2021 and the Confirmatory Order dated July 15, 2021.

INSOLVENCY AND BANKRUPTCY CODE, 2016

There is no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during FY22.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The details of energy conservation, technology absorption, and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, are as under:

(A) Conservation of Energy & Technology Absorption:

The Company is not engaged in any manufacturing activity which involves energy intensive processes. Further, the Company is in the business of establishing/constructing projects of the solar power generation and related activities, which itself is a domain of renewables and green energy and environment friendly. The Company has taken sufficient steps towards general energy saving techniques and conservation.

There is no technology imported by the Company, hence, no information regarding absorption is involved.

(B) Foreign Exchange Earnings and Outgo:

Particulars FY22 FY21
(^ in 000) (^ in 000)
Foreign exchange earned in terms of actual inflows

-

-

Foreign exchange outgo in terms of actual outflows 39,447.57 1,25,480.03

ANNUAL RETURN

The draft Annual Return of the Company as on March 31, 2022, in prescribed e-form MGT-7 in accordance with Section 92(3) read with Section 134(3)(a) of the Act, is available on the Companys website at https://sunedisoninfra.com/pdf/SIL- Annual-Return-2021-22.pdf.

Further, the Annual Return (e-form MGT-7) for FY22 shall be filed by the Company with the Registrar of Companies, Chennai, within the stipulated period and the same can also be accessed thereafter on the Companys website at: www.sunedisoninfra.com.

SIGNIFICANT / MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS, TRIBUNALS AFFECTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE

There is no significant/material order passed by the Regulators, Courts, or Tribunals affecting the going concern status and the Companys operations in the future.

VIGIL MECHANISM/WHISTLE-BLOWER POLICY

The Company has established a vigil mechanism and formulated a Whistle-Blower Policy, which is in compliance with the provisions of Section 177(9) & (10) of the Act to deal with instances of fraud and mismanagement if any.

The Company, through this Policy, envisages to encourage the Directors and employees of the Company to report to the appropriate authorities any unethical behaviour, improper, illegal, or questionable acts, deeds, actual or suspected fraud or violation of the Companys Codes of Conduct for the Directors and the Senior Management Personnel.

During FY22, no complaint was received and no individual was denied access to the Audit Committee for reporting concerns if any.

The Policy on Vigil Mechanism / Whistle-Blower Policy may be accessed on the Companys website at the link: https://sunedisoninfra.com/investor-relations.php

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls commensurate with the size, scale, and complexity of its operations. During the year, such controls were tested and the Company has, in all material respects, maintained adequate internal financial controls over financial reporting as of March 31, 2022, and are operating effectively.

Internal Auditors

The Company has appointed a M/s. ASDS & Associates, Chartered Accountants (FRN. 016706S), as Internal Auditor of the Company, to ensure the effective functioning of internal financial controls and check whether the financial transaction flow in the organization is being done based on the approved policies of the Company. The management based, on the internal audit observations gives its comments to the Audit Committee.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company doesnt fulfil the criteria as stipulated under Section 135(1) of the Act read with rules thereunder and therefore, the provisions of Corporate Social Responsibility (‘CSR) are not applicable on the Company.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the Standalone Financial Statement (please refer to Note Nos. 06 & 13 to the Standalone Financial Statement).

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company is committed to maintaining a productive environment for all its employees at various levels in the organization, free of sexual harassment and discrimination on the basis of gender. The Company has framed a Policy on Prevention of Sexual Harassment in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and the rules made thereunder ("POSH Act").

The Company has also set up Internal Complaints Committee(s) (‘ICCs) for each workplace, which is in compliance with the requirement of the POSH Act, to redress the complaints received regarding sexual harassment, which has formalized a free and fair enquiry process with clear timeline.

All employees in the organization are being made to attend the POSH awareness sessions which also covers gender sensitization.

There was no complaint received from any employee during FY22.

LISTING

The Equity Shares of the Company are listed on BSE Limited (‘BSE), 25th Floor, P.J. Towers, Dalal Street, Fort, Mumbai - 400 001 Maharashtra.

The Scrip Code allotted by BSE is 531260.

The Company has paid annual listing fee for FY 202223 to the BSE Limited.

DEPOSITORY SYSTEM

As members are aware, the Companys shares are compulsorily tradable in the electronic form.

As on March 31, 2022, 92.26% of the Companys total paid-up capital were in dematerialized form.

In view of the numerous advantages offered by the Depository System, members holding shares in physical mode are advised to avail of the facility of dematerialization on either of the Depositories (NSDL or CDSL).

The ISIN allotted to the equity shares of the Company is INE332F01018.

IMPLEMENTATION OF CORPORATE ACTION

During the year under review, the Company has not failed to implement any Corporate Action within the specified time limit.

CREDIT RATINGS

The Company had not obtained any credit rating from any agencies during the year under review.

MATERIAL CHANGES AFFECTING THE COMPANY

A. Change in nature of business

The Company has not undergone any change in the nature of the business during FY22.

B. Material changes and commitments, if any, affecting the financial position of the Company

There were no adverse material changes or commitments that occurred between the end of the financial year and the date of this report, which may affect the financial position of the Company or may require disclosure.

The impact on the financial results for the year ended March 31, 2022 because of any events and developments beyond the date of this report may differ from that estimated as at the date of approval of this Report and will be recognized prospectively.

RISK MANAGEMENT

The Board of Directors regularly review risks and threats and takes suitable steps to safeguard its interest and that there is no element of risk identified that may threaten the existence of the Company. The focus shifts from one area to another area depending upon the prevailing situation. A detailed report on significant risks and mitigation is forming part of Management Discussion and Analysis.

SIGNIFICANT DEVELOPMENTS

The Company has achieved various milestones which have already been set out in the Management Discussion and Analysis Report, forming part of the Annual Report. There were no significant developments during the year under review.

REPORTING PRINCIPLE

The Financial and Statutory Data presented in this Report is in line with the requirements of the Companies Act, 2013 (including the rules made thereunder), Indian Accounting Standards (Ind AS) and the Secretarial Standards (SS).

REPORTING PERIOD

The Financial Information is reported for the period April 01, 2021 to March 31, 2022. Some parts of the Non-Financial Information included in this Boards Report are provided as on the date of this Report.

GREEN INITIATIVE

Pursuant to Section 101 and 136 of the Act read with the Companies (Management and Administration) Rules, 2014 and the Companies (Accounts) Rules, 2014, the Company can send Notice of Annual General Meeting, Financial Statements and other communication in electronic forms.

Your Company is sending the Annual Report including the Notice of Annual General Meeting, Audited Financial Statements, Directors Report along with their annexures etc. in the electronic mode to the shareholders who have registered their E-mail IDs with the Company and/or their respective Depository Participants (DPs).

Shareholders who have not registered their e-mail addresses so far are requested to register their email addresses, so that all communication with them can be made in electronic mode and we can make some contribution to protect the environment.

Those holding shares in demat form can register their e-mail addresses with their concerned DPs. Shareholders who hold shares in physical form are requested to register their e-mail addresses with the Company/RTA, by sending a letter, duly signed by the first/sole holder quoting details of Folio Number.

GENERAL SHAREHOLDERS INFORMATION

No of shares No. of Shareholders Percentage No. of Equity Shares Percentage
Up to 1,000 744 86.31 1,73,890 3.87
1,001 - 2,000 45 5.22 71,869 1.60
2,001 - 3,000 20 2.32 49,741 1.11
3,001 - 4,000 7 0.81 24,989 0.56
4,001 - 5,000 2 0.23 8,895 0.20
5,001 - 10,000 19 2.20 1,46,772 3.27
Above 10,000 25 2.90 40,13,744 89.39
Grand Total 862 100.00 44,89,900 100.00
Shareholding in Physical and Demat form as on 31st March, 2022 No. of Shares Percentage
In Physical Form 3,47,410 7.74
In Dematerialized Form 41,42,490 92.26
Total 44,89,900 100.00
No. of shareholders whose shares as on 31st March, 2022 are in Physical & Demat form: No. of Shareholders Percentage
In Physical Form 322 37.35
In Dematerialized Form 540 62.65
Total 862 100.00

PERSONNEL

Your Directors wish to place on record their sincere appreciation for the devoted services of all the employees and workers at all levels and for their dedication and loyalty, which has been critical for the Companys success.

ACKNOWLEDGEMENTS

Your Companys organizational culture upholds professionalism, integrity and continuous improvement across all functions as well as efficient utilization of the Companys resources for sustainable and growth.

Your Directors wish to place on record their appreciation for the valuable co-operation and support received from Ministry of Railways, Ministry of Defence, Government of India, Governments of various States / Union Territories and other stakeholders such as, shareholders, customers and suppliers, among others.

The Directors thank HDFC Bank Limited, State Bank of India, Axis Finance Limited, Indian Renewable Energy Development Agency Limited and other Banks for all co-operations, facilities and support they have extended to the Company as a whole.

Your Directors acknowledge the continued trust and confidence you have reposed in the Company. The Directors look forward to their continued support in future.

For and on behalf of the Board
Kalpesh Kumar Shailesh Rajagopalan
Place: Chennai Managing Director Director
Date: August 10, 2022 DIN:07966090 DIN: 01855598