| Dear Members,
The Directors have immense pleasure in presenting the Twenty Fourth
Annual Report together with the Audited Accounts for the financial year
ended on 31 March, 2014.
1. FINANCIAL HIGHLIGHTS
The Financial Results for the year under report are summarized as
under:
FINANCIAL RESULTS (Rs. in Lac)
2013-14 2012-13
Net Sales and other Income 86,298.57 2,61,874.99
Gross Operating Profit (5,657.51) 36,383.65
Less: Interest & Bank Charges 48,917.07 30,127,12
Profit before Depreciation and (54,574.58) 6,256.53
amortization expenses and tax
Less: Depreciation and 2,024.70 1,981.96
amortization expenses
PROFIT BEFORE TAX (56,599.28) 4,274,57
Less: Tax expense
* Current year tax 1,480.62
* Income tax for earlier years 122.95
* Deferred Tax charge/(credit) 193,11 (214.65)
PROFIT AFTER TAX (56,792.39) 2,885.65
2. BUSINESS OPERATIONS AND FINANCIAL PERFORMANCE
During the year under review your company experienced downfall for the
first time in its history which was primarily attributable to the
slowdown in the project execution because the company did not receive
the banking support as expected. Further, due to prolonged recession
and shortage of funds, the Company approached for the corporate debt
restructuring. The CDR process is in its final stages and it is
expected that after the completion of CDR process the situation of the
Company would improve and the Company would be back on the growth
track.
In the financial year 2013-14, the Income from operations of the
Company has come down to Rs. 863 crore from Rs. 2619 crore in the
financial year 2012-13 and the Company has incurred as loss of Rs.
567.92 crore in the financial year 2013-14 as against a profit of Rs.
28.86 crore in the financial year 2012 13. The profitability of your
Company has been impacted due to steep fall in turnover and also due to
exceptionally high finance cost.
3. DIVIDEND
In absence of profit during the current financial year 2013-14, your
Board of Directors do not recommend any dividend for the financial year
under review.
4. DETAILS OF SUBSIDIARIES
At present, your Company has six subsidiaries, out of which four are
incorporated in India namely, Tecpro Energy Limited, Ajmer Waste
Processing Company Private Limited, Bikaner Waste Processing Company
Private Limited and Eversun Energy Private Limited and two subsidiaries
are incorporated outside India namely,Tecpro Systems (Singapore) Pte.
Limited in Singapore and PT.Tecpro Systems Indonesia, in Indonesia.
5. CONSOLIDATED FINANCIAL STATEMENTS
As per Section 212 of the Companies Act, 1956, the Company is required
to attach the Balance Sheet, the Statement of Profit and Loss, the
Reports of the Board of Directors and Auditors of the subsidiary
companies with the Balance Sheet of the Company. However, the Ministry
of Corporate Affairs, Government of India vide its circular no. 2/2011
dated February 8, 2011 has provided an exemption to companies from
complying with Section 212, provided such companies publish the audited
consolidated financial statements in the annual report. Accordingly,
the annual report of your Company for the financial year 2013-14
contains the audited consolidated financial statements of the Company
instead of the separate financial statements of all its subsidiaries
and the same are based on the financial statements received from
subsidiaries, as approved by their respective Board of Directors. The
consolidated financial statements have been prepared in accordance with
the Accounting Standard - 21 on'Consolidated Financial
Statements'notified under Section 211 (3C) of the Companies Act, 1956
read with the Companies (Accounting Standards) Rules, 2006, as
applicable.
Further, the Company hereby undertakes that the audited financial
statements and related information of subsidiaries of your Company will
be made available to the shareholders of the Company and the
shareholders of subsidiary companies, upon request at any point of
time. The financial statements of the subsidiary companies shall be
available for inspection during business hours at our head office, the
registered office of the Company and also at the registered offices of
the respective subsidiaries.
6. MANAGEMENT DISCUSSION AND ANALYSIS STATEMENT
Management Discussion and Analysis Statement is annexed to this Report.
7. CORPORATE GOVERNANCE REPORT
The Corporate Governance Report pursuant to clause 49 of the Listing
Agreement is annexed to this Report.
8. DIRECTORS
During the period under report, Mr. Aditya Gabrani, Whole- time
Director and Mr. Arvind Kumar Bishnoi, Whole-time Director and Mr.
Jatinder Pal Singh, Director resigned from their offices w.e.f. 30th
September 2013, 12th November 2013 and 12th March 2014 respectively.
Mr. Amar Banerjee, Whole-time Director of the Company was appointed as
Managing Director in the Meeting of the Board of Director of the
Company held on 9th June 2014. The resolution for his appointment forms
part of the notice for convening the Annual General Meeting.
Also, Mr. Suresh Kumar Goenka and Mr. Sakti Kumar Banerjee, Directors
of the Company retire by rotation at the forthcoming Annual General
Meeting of the Company being considered for reappointment.
9. AUDITORS
The tenure of M/s M. S. Krishnaswami & Rajan, Statutory Auditors of the
Company will expire at the forthcoming Annual General Meeting of the
Company. It is proposed to re-appoint the retiring auditors for a
period of 4 years in view of the Companies Act, 2013 read with Rule 6
(3) of the Companies (Audit and Auditors) Rules, 2014. A requisite
consent and certificate as prescribed under second and third proviso of
Section 139(1) of the Companies Act, 2013 ("the Act") read with Section
141 of the Act together with the rules prescribed thereunder and
furnished by the retiring auditors have already been received by the
Company. The approval of the re-appointment of M/s M.S. Krishnaswami &
Rajan, Chartered Accountants, as Statutory Auditors of the Company for
the period of 4 years starting from the end of the forthcoming 24th
Annual General Meeting till the conclusion of the 28th Annual General
Meeting by the members is due to be accorded in the ensuing Annual
General Meeting and the draft resolution for their re-appointment forms
part of the notice for convening the Annual General Meeting.
The Auditors' report and notes to the financial statements are self
explanatory and do not call for any further comments except on the
qualifications highlighted by the auditors in their Auditor Report. The
explanations to the auditors' qualification are given below:
1. Explanations to para 4(i) to the Auditors Report :The Results of
the year in respect of entities listed In Note 32 have been affected by
liquidity crunch. However, these entities have a healthy order book
position and considering the current business plans of these entities,
the management is of the view that there is no permanent diminution in
value of its investments in these companies. Further, there is a
continuous process of assessment of the carrying value and the business
plans of all entities in which the company has significant investments
and in the event the management decides to shelve, alter or reorganize
its plans in these entities, the diminution in value if any, will be
reckoned in the Revenue.
2. Explanations to paral(ii) of the annexure to the Auditors Report:
The Company has a practice of verifying all its fixed assets but due to
resource constraints was not able to complete the said verification at
all locations during the year. This has been taken up and completed
subsequent to the year-end and no material discrepancy has been noted
as compared to the books. The earlier practice of completion of
verification of fixed assets and reconciliation with books before the
end of the year will be ensured in future.
3. Explanations to para 8 of the annexure to the Auditors Report: With
regard to undisputed statutory dues remaining unpaid and the defaults
in repayment of dues to banks/financial institution highlighted in the
Auditors' Report, this arose mainly due to the liquidity crunch faced
by the Company. Once the CDR is approved, there would be sufficient
liquidity to ensure complete payment of such dues outstanding as well
as prompt payment of the same in future.
4. Explanations to para 12 of the annexure to the Auditors Report :
The term loan availed of Rs.30 Crores is also towards reimbursement of
expenditure already incurred and therefore, the utilization of the term
loan was in accordance with terms governing the same.
5. Explanations to para 13 of the annexure to the Auditors Report: The
mismatch is due to significant fall in the collection pertaining to
long term projects-retention and running receivables during 2013-14.
Further there is an increase in the short term bank borrowing position
as on 31.03.2014 contributed for this mismatch of current and
non-current utilisation. The company has not made any new investment
during the year under review.
As regards other matters which Auditors have drawn attention to in
their report:
a. For reasons explained in this Report, the Company had decided to
approach the banks through the corporate debt restructuring (CDR)
process for restructuring of its debt. Once, the CDR is approved, there
would be sufficient liquidity to enable the Company meet its
obligations as and when it falls due and undertake to complete the
stalled projects. The spin-off effect will be that all debts
highlighted in Note 30(ii) and 30(iii) will be progressively realized
since the customers would then become confident of the deliverables.
The encashment of Bank guarantees (including performance guarantees) by
certain customers has not been followed by cancellation of the orders
In the circumstances, the Company remains confident that the continuous
steps / engagement with the customers will result in realization of
dues highlighted.
b. Circularization of balances of Debtors/Vendors is an annual
exercise which the Company undertakes. In the exceptional circumstances
prevailing, this exercise was started subsequent to the year-end. The
company remains confident that the completion of this exercise would
not have a material effect on the results of the year.
Pursuant to the provisions under Companies (Audit and Auditors) Rules,
2014 the Company is required to get the cost accounting records of the
Company audited by a Cost Auditor for the financial year 2014-15
onwards audited by a Cost Auditor. In view of the above, M/s N. K. Jain
And Associates, Cost Accountants, who were also the Cost Auditors of
the Company for the financial year 2013-14, were appointed as the Cost
Auditor of the Company for the financial year 2014-15 by the Board of
Directors of the Company.
10. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217 (2AA) of the Companies
Act, 1956, with respect to the Directors' Responsibility Statement, it
is hereby confirmed:-
(i) that in the preparation of the annual accounts for the financial
year ended 31 March, 2014, the applicable accounting standards had been
followed along with proper explanation relating to material departures;
(ii) that the directors had selected such accounting policies and
applied them consistently and made judgments and estimates that were
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company for the financial year ended 31 March, 2014
and of the profit or loss of the Company for that period;
(iii) that the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting frauds and other
irregularities;
(iv) that the directors had prepared the annual accounts for the
financial year ended 31 March, 2014 on a going concern basis.
11. FIXED DEPOSITS
The Company has not invited/accepted any Fixed Deposits during the
year, as such, no amount of principal or interest on fixed deposits was
outstanding on the date of the Balance Sheet.
12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Pursuant to Section 217(1 )(e) of the Companies Act, 1956 read with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988, particulars of energy conservation, technology
absorption, foreign exchange earnings and outgo are annexed as
Annexure-A and form part of the Directors'Report.
13. HUMAN RESOURCES
During the period under review the dedicated employees of the Company
supported the company in providing quality services to its clients. The
Company believes that it has one of the best teams in the industry. The
regular interaction with the employees at all levels helps the Company
in maintaining cordial and harmonious industrial relations.
14. PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 217(2 A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975 as
amended from time to time, the names and other particulars of employees
are set out in the Annexure-B to the Directors'Report. In terms of
Section 219(1 )(b)(iv) of the Act, the report and accounts are being
sent to the shareholders excluding the aforesaid annexure. Any
shareholder interested in obtaining copy of the same may write to the
Company Secretary at the registered office of the Company.
ACKNOWLEDGEMENT
We thank our bankers for their continued support during the year. We
also thank Government of India, State Governments and concerned
Government Authorities/Departments for their co-operation. We
appreciate and value the support of our customers, vendors, employees
and investors and place on record our appreciation for the contribution
made by them.
For and on behalf of the Board of
Tecpro Systems Limited
Sd/- Sd/-
Amul Gabranl Ajay Kumar Bishnoi
Vice Chairman & Managing Director Chairman & Managing Director
DIN-00016556 DIN-00013917
Place : New Delhi
Date ; 23 August, 2014
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