Shri Ram Switchgears Ltd Directors Report.

To,

The Members,

Your directors have pleasure in presenting their 34th Annual Report on the business and operations of the company and the accounts for the financial year ended March 31, 2020.

1. Financial Results :

The details regarding financial performance of the company for financial year ended 31st March, 2020 are as follows:

Standalone (Rs. In Lacs)
Particulars Current Financial Previous Financial
Year Year
(2020) (2019)
Revenue from Operations 2242.96 2820.45
Other Income 57.56 75.54
Total Income 2300.52 2896.00
Profit/loss before Depreciation, Finance Costs, Exceptional items and Tax Expense 336.49 838.91
Less: Depreciation/ Amortization/ Impairment 48.63 57.46
Add/(less): Exceptional items Nil Nil
Profit /loss before Tax Expense 287.86 781.45
Less: Tax Expense (Current & Deferred) - Excess provision of previous year written back -0.66 -0.66
Less: Finance Costs 585.85 704.86
Profit /loss before Exceptional items and Tax Expense -297.33 77.26
Profit /loss for the year (1) -297.33 77.26
Total Comprehensive Income/loss (2) Nil Nil
Total (1+2) -297.33 77.26
Balance of profit /loss for earlier years 667.93 590.67
Less: Transfer to Debenture Redemption Reserve Nil Nil
Less: Transfer to Reserves Nil Nil
Less: Dividend paid on Equity Shares Nil Nil
Less: Dividend paid on Preference Shares Nil Nil
Less: Dividend Distribution Tax Nil Nil
Balance carried forward 370.60 667.93

2. Overview of the company, analysis of financial results and Performance Review

Your company is involved in engineering and manufacturing of transformers and full range of HT & LT switchgears, Distribution boards, Distribution Boxes, Control and Relay Panel, Feeder Pillars, ACB Boxes, Single Phase Boxes, MCB & MCCB panels, Junction Boxes, A.C./D.C. Boards and other related products.

During the year under review, the turnover of the company got reduced from 2820.46 Lakhs to Rs. 2242.96 Lakhs. The reason for reduction in turnover can be stated to overall slowdown in the economy and poor performance of businesses associated with increased compliance burden due to imposition of various legal and procedural formalities. There was slack in the market and also due to change in political scenario in the state of Madhya Pradesh, topline has been adversely affected.

Our vision is that we believe "Customer is the core of all the endeavors". Thus the primary objective of the company is up-holding the value of the "customer". Our Company strives to provide "solutions" rather than "selling of products." Our objectives are to establish the organization leadership in the area of electrical engineering both in the field of manufacturing and marketing and to develop high level of satisfied customer profile with dedicated service and high grade of products and quality as well as to maintain the growth patterns consistently both in terms of sales volume and return from sales.

3. Change in nature of business:

There was no change in nature of business of the company during the year under review.

4. Extract of Annual Return:

Pursuant to the provisions of Section 92 (3) and Section 134 (3) (a) of the Companies Act, 2013 read with rule 12 (1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in Form MGT 9 is also uploaded on the website of the company i.e. www.shriramswitchgears.com.

5. Reserves

The amount of deficit of Rs. 2,97,33,522 (Rupees Two Crore Ninety Seven Lakh Thirty Three Thousand Five Hundred and Twenty Two Only) of Profit and Loss account has been transferred to Reserve and Surplus account in the Balance Sheet. Final amount of reserve and surplus account as on 31.03.2020 is Rs. 6,27,24,082/- including capital reserve of Rs. 16,34,217/- and securities premium account of Rs. 2,40,30,000/-.

6. Dividend

No dividend is proposed for the current financial year due to non availability of distributable profits.

7. Transfer of amount to Investor Education and Protection Fund

There was no amount which was required to be transferred to Investor Education and Protection Fund.

8. Details pertaining to shares in suspense account

There are no shares in demat suspense account/unclaimed suspense account as provided in Para F of Schedule V of the Listing Regulations, 2015.

9. Details relating to material variations

There was no material deviation/variation in use of proceeds of the issue. The issue proceeds were utilized for working capital requirements of the company as defined in objects of the issue.

10. Directors and Key Managerial Personnel

In compliance with the provisions of Section 149 & 152 read with Schedule IV all the other applicable provisions of Companies Act, 2013 and Companies (Appointment and Qualification of Directors) Rules, 2014 and SEBI (LODR) regulations, 2015, the composition of board of directors of the company is as follows:

S. No. Name DIN/PAN Designation
1. Nilesh Kumar Jhalani 01462299 Managing Director
2. Rohit Kumar Jhalani 00666443 Whole Time Director
3. Devraj Jhalani 01462323 Whole Time Director
4. Sapna Jhalani 07685341 Non Executive Director
5. Atul Krishna Khandelwal 00094242 Independent Director
6. Amita Premswaroop Patel 07687442 Independent Director
7. Naresh Kumar Jhalani ABBPJ8084B Chief Finance Officer
8. Garima Mahalaha BWWPM8525K Company Secretary and Compliance Officer

During the year there was no change in directors and KMPs.

In accordance with the provisions of Section 152 of the Companies Act, 2013 and in terms of the Articles of Association of the Company Mr. Rohit Kumar Jhalani (Whole time Director) (DIN: 00666443) is liable to retire by rotation and being eligible, seeks re-appointment at the ensuing Annual General Meeting. The Board of Directors recommends his re-appointment. Mr. Rohit Kumar Jhalani is not disqualified under Section 164(2) of the Companies Act, 2013.

Brief resume of the Director proposed to be reappointed, nature of his experience in specific functions and area and number of public companies in which he holds membership/chairmanship of Board and Committees, Shareholdings and inter-se relationships with other directors as stipulated under Regulation 36(3) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 are provided in the ‘Annexure to the Notice of AGM forming part of the Annual Report.

Further, the term of Shri Nilesh Kumar Jhalani as Managing Director and that of Mr. Devraj Jhalani and Rohit Kumar Jhalani as Whole Time Director will come an end at the ensuing Annual General Meeting. All of the above KMPs seek reappointment at the Annual General Meeting.

Brief resume of the KMPs proposed to be reappointed, nature of their experience in specific functions and area and number of public companies in which they hold membership/chairmanship of Board and Committees, Shareholdings and inter-se relationships with other directors as stipulated under Regulation 36(3) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 are provided in the ‘Annexure to the Notice of AGM forming part of the Annual Report.

The Company has received declaration from the Independent Directors that they meet the criteria of independence as prescribed u/s 149(6) of the Companies Act, 2013. In the opinion of the Board, they fulfill the condition for appointment/ re-appointment as Independent Directors on the Board. Further, in the opinion of the Board, the Independent Directors also possess the attributes of integrity, expertise and experience as required to be disclosed under Rule 8(5) (iiia) of the Companies (Accounts) Rules, 2014.

11. Meetings of the Board of directors:

The directors of the company met at regular intervals with the gap between two meetings not exceeding 120 days to take a view on companys policies and strategies apart from the board matters. The notices of the meetings are given well in advance to all the directors of the company. Additional meetings were held depending upon the requirements of the company. During the year under review the board met 10 times and dates of board meetings are as follows:

S No. Date of board meeting
1. 29.04.2019
2. 18.05.2019
3. 12.06.2019
4. 29.06.2019
5. 19.08.2019
6. 26.08.2019
7. 13.11.2019
8. 30.11.2019
9. 15.01.2020
10. 20.03.2020

Attendance of directors:

S. No. Name of director Number of board meetings
Held Attended
1. Nilesh Kumar Jhalani 10 10
2. Rohit Kumar Jhalni 10 10
3. Devraj Jhalani 10 10
4. Sapna Jhalani 10 9
5. Atul Krishna Khandelwal 10 4
6. Amita Premswaroop Patel 10 3

12. Directors Responsibility Statement

Pursuant to the provisions of clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, your directors state 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 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 this 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 devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. (f) The directors had laid down internal financial controls to be followed by the company

13. Boards Evaluation

In compliances with the provisions of Section 134(3)(p) of the Act read with Rule 8(4) of the Companies (Accounts) Rules, 2014, the board carried out annual evaluation of its own performance, that of its Committees and individual directors.

The performance of board and its committees was evaluated by the board after seeking input from all the directors on the basis of the criteria, such as composition and structure of the Board, quality of deliberations, effectiveness of the procedures adopted by the Board, participation at the Board and committee meetings, governance reviews etc. Performance of individual directors was evaluated on the basis of criteria like transparency, analytical abilities, qualifications, leadership qualities, experience, participation in the long-term strategic planning and responsibilities shouldered.

The Committees of the Board were assessed on the basis of degree of fulfillment of key responsibilities, adequacy of committee, composition and effectiveness of meetings. The Company does not have a regular Chairman, however the Chairman appointed for the Board meetings was also evaluated by all the Directors on the basis of managing relations, leadership, competence and diligence.

The performance evaluation of Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The performance evaluation of the Chairman appointed for the Board meeting and the Non- Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Board as a whole. The Board of Directors expressed their satisfaction with the evaluation process.

14. Declaration by Independent Director(s) and re-appointment, if any

All the Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.

15. Statement regarding opinion of the Board with regard to integrity, expertise and experience (including the proficiency) of the Independent Directors appointed during the year

This is the new disclosure introduced by the Ministry of Corporate Affairs effective from December 1, 2019. The Company has not appointed any Independent Director between December 1, 2019 to March 31, 2020. However, the Board of Directors reviewed the declarations as mentioned in the point no 14 and have positive outlook towards the integrity and expertise of the Independent Directors. The Independent Directors are yet to appear for the online proficiency self-assessment test and hence, the opinion on the aforesaid would be provided in the next years annual report.

16. List of core skills/expertise/competencies

As the company is involved in the manufacturing of transformers and related electrical items, the basic skill required in directors is that of technical expertise to monitor the manufacturing operations properly. Further the directors must possess excellent in financial and communication skills. As the major customers of the company are State Electricity Boards, the directors must have very good liasioning abilities. All the executive directors of the company posses all of the above expertise. Our Managing Director Mr. Nilesh Kumar Jhalani and Whole time director are technical experts having vast experience of 25 years in the field. Other whole time director Mr. Devraj Jhalani is a young dynamic talent possessing excellent business management capabilities. Our CFO Mr. Naresh Jhalani is an expert in financial matters as well as being an ardent communicator.

17. Particulars of loans, guarantees or investments under section 186

The details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 and rules made thereunder are shown under Note No. 11 & 15 in the notes to the Financial Statements.

18. Related Party Transaction:

All related party transactions entered into by the company during the year were on an arms length basis and in the ordinary course of business. During the year no transaction was entered into by the company with key managerial personnel. The company did not enter into any related party transactions which were in conflict with its interest. Statement of transaction with related parties in summary form are periodically placed before the audit committee and are approved by committee, in compliance with Section 134 (3) (h) of the Act and rule 8 (2) of companies (Accounts ) Rules, 2014. Particulars of Related Party transactions are given form of AOC-2 as Annexure I to this report.

19. Commission from holding or subsidiary company:

As the company is not having any holding or subsidiary company, details as required regarding receipt of commission by Managing or whole time director of the company from holding or subsidiary of the company in accordance with the provisions of Section 197 (14) are not applicable.

20. Particulars Of Employee and Related Disclosures

The ratio of remuneration of each Director to the median of employees remuneration as per Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of the Boards Report under "Annexure – II " as Median Remuneration.

The company was not having any employee, who was in receipt of remuneration as specified under Rule 5 (2) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, hence the details as required under that rule are not applicable on the company.

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, the list of the top 10 employees in terms of remuneration forms part of the Boards Report under "Annexure-III

21. Audit Committee

The company constituted an Audit Committee pursuant to the provisions of Section 177 of the Companies Act, 2013.

The terms of reference of Audit Committee covers the matters specified for Audit Committee in Section 177 of the Companies Act, 2013 read with Rule No. 6 of the Companies (Meetings of Board and its Power) Rules, 2014. The Role of the Audit Committee is as prescribed under Section 177 of the Companies Act, 2013.

The chairman of the Audit Committee is Mr. Atul Krishna Khandelwal. During the year 2019 -20, three Audit Committee meeting were held on 18th May, 2019, 13th November, 2019 and 20th March, 2020.

The composition of the Audit Committee and number of meetings attended by the members are given below:

Name of director Position held No. of meetings attended
Mr. Atul Krishna Khandelwal (DIN : 00094242) – Independent Chairman 3
Director
Ms. Amita Premswaroop Patel Member 2
(DIN : 07687442) – Independent
Director
Mr. Nilesh Kumar Jhalani Member 3
(DIN : 01462299) – Managing Director

22. Nomination and Remuneration Committee

The company constituted Nomination & Remuneration Committee pursuant to the provisions of Section 178 of the Companies Act, 2013. The details of members of the Nomination and Remuneration committee are as follows:

Name of director Position held Attendance at meeting
Mr. Atul Krishna Khandelwal (DIN Chairperson 1
: 00094242) – Independent Director
Ms. Amita Premswaroop Patel Member 1
(DIN : 07687442) –
Independent Director
Ms. Sapna Jhalani Member 1
(DIN : 07685341) - Non Executive
Director

During the year 2019 - 20, one meeting of Nomination and Remuneration Committee was held on 18th May, 2019 to discuss general working conditions and remuneration of KMPs and employees. Considering unfavorable market conditions, no change in remuneration of any KMP was proposed by the committee.

The function performed by the Nomination and Remuneration are as prescribed under Companies Act, 2013 and rules made thereunder.

23. Stakeholders Relationship Committee

The company constituted a Stakeholders Relationship Committee pursuant to the provisions of Section 178 (6) of the Companies Act, 2013. The details of members and meetings of the Stakeholders Relationship Committee are as follows:

Name of director Position held No. of meetings attended
Ms. Sapna Jhalani Chairperson 1
(DIN : 07685341)
Non Executive Director
Mr. Atul Krishna Khandelwal Member 1
(DIN : 00094242) –
Independent Director
Ms. Amita Premswaroop Patel Member 1
(DIN : 07687442) –
Independent Director

24. Vigil Mechanism/whistleblower Policy

In Compliance with the provision of section 177(9) of the Act read with Rule 7 of Companies (Meeting of Board and its Power) Rules, 2014, the company formulated a Vigil Mechanism for directors and employees to report concerns.

25. Corporate Social Responsibility (CSR)

As the company does not fall into any of the category mentioned thereunder, the provisions of Section 134 (3) (o) read with Section 135 and Rule 9 of Companies (Accounts) Rules, 2014 related with Corporate Social Responsibility are not applicable on the company.

26. Material changes and commitments affecting the financial position of the company

In the last month of FY 2019-20, the COVID-19 pandemic developed rapidly into a global crisis, forcing government to enforce lock-downs for various periods from March to July in different parts of the country. Due to lockdown, the business activities of your company were also halted. The board is trying to bring back normalcy in business operations while following various SOPs suggested by the government at diffract levels of operations. The impact of lockdown on financial position of the company is not determinable but the board is trying to keep it to minimum.

Apart from above there were no material changes and commitment affecting the financial position of the Company which occurred between the end of the financial year of the Company and date of the Report.

27. Compliance of Secretarial Standard

The Company has complied with all the applicable Secretarial Standards during the year.

28. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The details of conservation of energy, technology absorption, foreign exchange earnings and outgo in terms of Section 134 (3) (m) read with Rule 8 (3) of the Companies (Accounts) Rules, 2014 are given in Annexure IV which is part of this Report.

29. Details of Subsidiary/Joint Ventures/Associate Companies

As the company is not having any subsidiary/joint venture/Associate Companies, the details in terms of Section 134 (3) (q) read with Rule 8 (5) (iv) of the Companies (Accounts) Rules, 2014 are nil.

30. SEBI Complaints Redress System (SCORES)

The investor complaints are processed in a centralized web based complaints redress system. The salient features of this system are centralized database of all complaints, online upload of Action Taken Reports (ATRs) by the concerned companies and online viewing by investors of actions taken on the complaint and its current status. Your Company has been registered on SCORES and makes every effort to resolve all investor complaints received through SCORES or otherwise within the statutory time limit from the receipt of the complaint. The Company has not received any complaint on the SCORES during financial year 2019-20.

31. Deposits

As the company has not accepted any deposits covered under Chapter V of the Act, the details in terms of Section 134 (3) (q) of the Companies Act, 2013 read with Rule 8 (5) (v) and (vi) of the Companies (Account) Rules, 2014 are nil. The unsecured loan as are appearing in the balance sheet are the amount which are brought in by the promoters and their relatives in pursuant to the stipulation imposed by the financing banks and the same shall not be treated as deposits in terms of provisions of Rule 2 (c) (XIII) of Companies (Deposit) Rules, 2014.

32. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future

No significant or material orders are passed during the financial year by the regulators or courts or tribunals which might impact the going concern status and companys operation in future.

33. Details in respect of adequacy of internal financial controls with reference to the

Financial Statements.

Your Company has put in place adequate internal financial controls with reference to the financial statements, some of which are outlined below:

Your Company has adopted accounting policies which are in line with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 that continue to apply under Section 133 and other applicable provisions, if any, of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and relevant provisions of the Companies Act, 1956, to the extent applicable.

A system of strict internal control, including suitable monitoring procedures has always believed that transparency, systems and controls are important factors in the success and growth of any organization.

The Company has an adequate system of internal control supported by an extensive programme of internal control; and systems are established to ensure that financial and other records are reliable for preparing financial statements.

Internal Audit Reports and significant Audit observations are brought to the attention of the Audit Committee of the company. The internal controls existing in the Company are considered to be adequate vis-a-vis the business requirements.

Your Company ensures adequacy with its current size and business, to ensure operational efficiency, protection and conservation of resources, accuracy and promptness in financial reporting and compliance of laws and regulations. It is supported by the internal audit process and will be enlarged to be adequate with the growth in the business activity.

34. Internal Auditors

In accordance with the provisions of Section 138 of the Companies Act, 2013 read with Rule 13 of Companies (Accounts) Rules, 2014, the company had appointed CA Mahak Kakani, Chartered Accountant, Ratlam as internal auditor of the company. The purpose of internal audit is to examine that the company is carrying out its operations effectively and performing the processes, procedures and functions as per the prescribed norms. The internal auditors review the adequacy and efficiency of the key internal controls guided by the Audit Committee.

35. Explanation or comments on Auditors Report:

Auditors report being self explanatory, no comments are required to be given in terms of Section 134 (3) (f) (i).

36. Secretarial Audit

Pursuant the provision of the Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial personal) Rules, 2014, the board appointed CS Shweta Garg, Practicing Company Secretary, Indore to conduct Secretarial Audit of the Company for the financial year 2019 - 2020. The Secretarial Audit report in Form MR 3 is attached as Annexure V and forms part of this report. The Secretarial Audit Report is self explanatory and no comments are required to be given on the same.

37. Maintenance of Cost Records and Cost Audit

The Company is not falling under the category prescribed under sub-section (1) of Section 148 of the Act and Rules 3, 4 of the Companies (Cost Records and Audit) Rules, 2014 (as amended from time to time) to whom the requirements of maintenance of Cost Records and the requirement of Cost Audit is applicable.

38. Management Discussion and Analysis

Management Discussion and Analysis Report for the year 2019 - 20, as stipulated under Regulation 34(2)(e) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached as Annexure VI forming part of this Annual Report, and gives detail of overall industry structure, developments performance and state of affairs of the Companys operations during the year.

39. Risk Management Policy

The risk management framework of the company defines roles and responsibilities for arriving at risk rating criteria for assessing risk impact, likelihood of risks and effectiveness of mitigations plans. The process includes identifications of risks involved in various areas, zeroing on ‘risk that matter, assessing mitigation plan and preparedness to face ‘risk that matter. The Company has developed and implemented a risk management policy which identifies major risks which may threaten the existence of the Company. The same has also been adopted by your Board and is also subject to its review from time to time. Risk mitigation process and measures have been also FORMULATED and clearly spelled out in the said policy.

40. Disclosure in respect of loan to employees for purchase of own shares

The company has not given any loan to any of the employees for purchasing its shares, hence the information pursuant of Section 67 of the Act read with Rule 16 of Companies (Share Capital & Debentures) Regulations, 2014 are nil.

41. Disclosure under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal), Act, 2013

As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition &Redressal) Act, 2013 (‘Act) and rules made there under, your Company has adopted a Sexual Harassment Policy for women to ensure healthy working environment without fear of prejudice, gender bias and sexual harassment.

The Board states that there were no cases or complaints filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

42. Reporting of fraud by statutory auditors

There was no fraud in the Company, which was required to be reported by statutory auditors of the Company under sub- section (12) of section 143 of Companies Act, 2013 during the financial year.

43. Issue of Equity shares with differential voting rights, Sweat Equity, ESOP etc.

The company has not issued any equity shares with differential voting rights, Sweat Equity Shares or Shares to its employees under "Employee Stock Option Scheme" during the financial year.

44. Changes in Share Capital

There was no change in the share capital of the company during the financial year 2019 - 2020.

45. Auditors:

The members at the Annual General Meeting held on 30.09.2017, appointed M/s KVNG & ASSOCIATES, Chartered Accountants, Indore, as statutory auditor to hold office for a period of 5 years till 2022. The auditors have given a declaration to the company to the effect that the firm is not disqualified to continue as auditor in terms of the provisions of Section 141 of the Companies Act, 2013 read with Rule 4 and Rule 10 of the Companies (Audit & Auditors) Rules, 2013.

46. Acknowledgements

Your Directors convey a sense of high appreciations to all the employees of the company for their hard work, dedication continued commitment and significant contributions. Your Directors are grateful to acknowledge the support and cooperations received from various departments of the Central and State Governments, shareholders, business associates, analysts, banks, Financial Institutions, customers, distributors and suppliers.

For & on behalf of the Board of Directors

Sd/- Sd/-
Place : Ratlam Devraj Jhalani Nilesh Kumar Jhalani
Date : 05.09.2020 Whole Time Director (DIN : 33333333) Managing Director (DIN: 01462299)
Shri Ram Bhawan, Goshala Road, 242/243, Gaushala Road
Ratlam, 457001, Madhya Pradesh, Shri Ram Bhawan, Ratlam
India 457001 MP IN