The Directors present the 31st annual report together with the audited financial statements (standalone and consolidated) for the financial year ended March 31,2023 of Genus Power Infrastructures Limited (hereinafter may be referred to as “Genus" or “the Company").
FINANCIAL RESULTS OF OPERATIONS
The financial results of operations of the Company for the financial year ended March 31,2023 (“FY 2022-23") have been as under:
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(Rs. in Lakhs, except per share data)
|
| |
Standalone
|
Consolidated
|
|
Particulars
|
Year ended March 31, 2023
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Year ended March 31,2022
|
Year ended March 31, 2023
|
Year ended March 31, 2022
|
|
Income
|
|
Revenue from contracts with customers
|
80,838.55
|
68,506.74
|
80,838.55
|
68,506.74
|
|
Other income
|
1,836.51
|
2,679.38
|
1,372.29
|
5,936.13
|
|
Total income
|
82,675.06
|
71,186.12
|
82,210.84
|
74,442.87
|
|
Expenses
|
|
Cost of raw material and components consumed
|
56,059.72
|
44,222.11
|
56,059.72
|
44,222.11
|
|
Change in inventory of finished goods and work-in-progress
|
(4,142.33)
|
(714.71)
|
(4,142.33)
|
(714.71)
|
|
Employee benefit expenses
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12,364.33
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10,660.82
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12,365.41
|
10,660.82
|
|
Other expenses
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8,674.48
|
8,375.48
|
8,690.79
|
8,375.58
|
|
Depreciation and amortization expenses
|
1,873.03
|
2,045.31
|
1,873.03
|
2,045.31
|
|
Finance costs
|
2,818.46
|
2,565.01
|
2,883.30
|
2,565.02
|
|
Total expenses
|
77,647.69
|
67,154.02
|
77,729.92
|
67,154.13
|
|
Profit before tax
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5,027.37
|
4,032.10
|
4,480.92
|
7,288.74
|
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Tax expense
|
1,528.95
|
1,450.02
|
1,516.56
|
1,450.05
|
|
Profit after tax before share of net (loss)/profit from associates for the year
|
3,498.42
|
2,582.08
|
2,964.36
|
5,838.69
|
|
Share of net (loss)/profit from associates
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-
|
-
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(66.93)
|
(92.94)
|
|
Net profit for the year after share of net (loss)/profit from associate entities
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3,498.42
|
2,582.08
|
2,897.43
|
5,745.75
|
|
Other comprehensive income (net of tax)
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(63.37)
|
472.68
|
(63.37)
|
472.68
|
|
Total comprehensive income (net of tax)
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3,435.05
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3,054.76
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2,834.06
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6,218.43
|
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Earnings per share (before and after extraordinary item) (of Re.1 each)
|
|
- Basic earnings per share (amount in Rs.)
|
1.36
|
1.00
|
1.26
|
2.50
|
|
- Diluted earnings per share (amount in Rs.)
|
1.35
|
0.99
|
1.25
|
2.48
|
|
Nominal value per share (amount in Rs.)
|
1.00
|
1.00
|
1.00
|
1.00
|
The above audited financial results of the Company have been reviewed by the Audit Committee and approved by the ‘Board of Directors' (“the Board") of the Company at their meetings held on May 23, 2023. The joint statutory auditors have issued an unqualified report thereon. The financial statements for FY 2022-23 have been prepared in accordance with Indian accounting standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules 2015 (as amended from time to time) and presentation requirements of Division II of Schedule III to the Companies Act, 2013, (Ind AS compliant Schedule III), as applicable to the financial statements read with Section 133 of “the Companies Act, 2013" (“the Act") and other relevant provisions of the Act. There are no material departures from the prescribed norms stipulated by the accounting standards in preparation of the annual accounts. Accounting policies have been consistently applied. Management evaluates all recently issued or revised accounting standards on an ongoing basis.
REVIEW OF STANDALONE ANNUAL FINANCIAL PERFORMANCE AND THE STATE OF COMPANY'S AFFAIRS
The revenue for FY 2022-23 was Rs. 80,838.55 lakhs, higher by 18% over the previous financial year's revenue of Rs. 68,506.74 lakhs. The revenue was mainly from sales of metering solutions to the power utilities. However the persistent shortage of semiconductors and other electronic components has hindered revenue growth and reduced capacity utilization in FY 2022-23.
The other income reduced to Rs. 1,836.51 lakhs from Rs. 2,679.38 lakhs in the previous year because of MTM (Mark-to-Market) losses due to fair valuation of investments.
The earnings before interest, tax, depreciation and amortization (EBITDA) (excluding other income) was Rs. 7,882.35 lakhs as compared to Rs. 5,963.04 lakhs in the previous year. The EBITDA margin increased to 9.75% from 8.70% in the previous year due to improved product-mix. However, it was still below the target level owing to increased costs for raw materials and lower capacity utilisation.
The finance cost was increased to Rs. 2,818.46 lakhs from Rs. 2,565.01 lakhs in the previous year. The borrowings increased to Rs. 34,691.53 lakhs from Rs. 26,994.56 lakhs in the previous year. The main cause of the increased borrowings was the booking of more orders, which had caused the providing of more margins money for bank guarantees. In FY 2022-23, Rs. 2,455.40 lakhs was incurred towards capital expenditure primarily on account of modernization, re-planting and other programs undertaken in various units of the Company.
The profit before tax (PBT) was Rs. 5,027.37 lakhs, as against Rs. 4,032.10 lakhs in the previous year. The profit after tax (PAT) was Rs. 3,498.42 lakhs, as against Rs. 2,582.08 lakhs in the previous year. The cash PAT (which comprises PAT, depreciation and deferred tax) was Rs. 5,223.93 lakhs, as against Rs. 4,692.71 lakhs in the previous year.
The earning per share (EPS) was Re. 1.36 as against Re. 1.00 in the previous year.
The net worth increased to Rs. 96,931.02 lakhs from Rs. 93,918.25 lakhs in the previous year mainly on account of the retained earnings. Return on net worth increased to 3.61% as against 2.75% in the previous year due to higher earnings, as explained above.
The liquidity of the Company is supported by 275.44 lakhs equity shares of the Company (treasury shares) and 475.44 lakhs equity shares of Genus Paper & Boards Limited, arisen as a result of the scheme of arrangement between the Company and Genus Paper Products Limited as approved by the Hon'ble Allahabad High Court in the FY 2013-14. As on March 31, 2023, the market value of these shares was Rs. 29,534.11 lakhs and the book value was Rs. 5,995.08 lakhs.
KEY FINANCIAL RATIOS
The details of the key sector-specific financial ratios are given in the respective notes to the standalone financial statements of the Company. OPERATIONS AND BUSINESS OVERVIEW AND PERFORMANCE
The Company is involved in the business of manufacturing and providing metering solutions, and also undertaking ‘engineering construction and contracts' on turnkey basis for the power sector (core business division). The Company has also been involved in making strategic investment activity, wherein investments are made in shares and securities, on the basis of a thorough and systematic evaluation by the Company, professional experts and the management on an on-going concern basis with dedicated personnel and technical staff.
The operational and business overviews including performances of the Company have been appropriately described in the report on management discussion and analysis, which forms part of this report.
CHANGE IN THE NATURE OF BUSINESS
There was no change in the nature of business of the Company in FY 2022-23.
ORDER BOOK POSITION
As on March 31, 2023, the order book of the Company stood at Rs. 1,696 crore (net of taxes) and including orders received by wholly owned subsidiaries, the total order-book stood at Rs. 4,11 5 crore (net of taxes). In the light of demonstrable impact of the ‘Reforms-Based, Result-Linked Power Distribution Sector Scheme', many State Electricity Boards (SEBs) have requested and invited bids for installation of the smart meters. We anticipate a large rise in order-book in the upcoming years.
DIVIDEND
The Board has recommended a dividend of Re. 0.75 (Seventy Five paisa) per equity share on equity shares of the face value of Re.1 each (i.e. 75%) for FY 2022-23. The dividend is subject to approval of the members at the ensuing annual general meeting (AGM) and shall be subject to deduction of income tax at source, as applicable. The dividend, if approved by the members at the ensuing AGM, will result in cash outflow of approx. Rs. 1,726 lakhs.
Considering a lower dividend announced for FY 2019-20 due to the Covid-19 pandemic and the sense of shareholders' expectations looking at future perspective of the Company, the Board recommended the said dividend based on the parameters and criteria as set out in the dividend distribution policy. The dividend distribution policy of the Company as approved by the Board is placed on the website of the Company at “https://genuspower.com/wp-content/uploads/2021/07/ Policy_Dividend-Distribution.pdf", in terms of Regulation 43A of the “SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015" (the “SEBI Listing Regulations').
SHARE CAPITAL
There was no change in the authorised share capital of the Company during FY 2022-23. It stood at Rs. 83,20,00,000/- (Rupees Eighty Three Crore and Twenty Lakhs only) as on March 31 2023.
The paid up equity share capital of the Company has increased to Rs. 25,75,95,460/- consisting of 25,75,95,460 equity shares of Re.1/- (Rupee One) during FY 2022-23, on account of issuance and allotment of 82,698 equity shares of face value of Re.1/- each on exercise of employee stock options/employee stock appreciation rights.
The Company has neither issued shares with differential voting rights nor issued sweat equity shares.
SHARE WARRANTS
The Board at its meeting held on July 04, 2023 and the Members of the Company at their extraordinary general meeting held on July 31, 2023 have approved raising funds through issue of 4,59,78,965 (Four Crores, Fifty Nine Lakhs, Seventy Eight Thousand, Nine Hundred and Sixty Five) share warrants for an aggregate consideration of up to Rs. 5,19,01,05,569.20 (Rupees Five Hundred and Nineteen Crores, One Lakhs, Five Thousand, Five Hundred and Sixty Nine and paise twenty only), in accordance with Chapter V of “the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018" (“SEBI ICDR Regulations") by way of a preferential issue on a private placement basis. Accordingly, the Share Allotment Committee of the Board in its meeting held on August 11, 2023 has approved the allotment of 4,59,78,965 (Four Crores, Fifty Nine Lakhs, Seventy Eight Thousand, Nine Hundred and Sixty Five) share warrants convertible into equal number of equity shares to ‘Chiswick Investment Pte. Ltd.' (“Allottee") at an issue price of Rs. 112.88/- per warrant on preferential basis in accordance with the SEBI ICDR Regulations. The Company has received from the Allottee 25% of the consideration amount aggregating to Rs. 129,75,26,392.30 (Rupees One Hundred and Twenty Nine Crores, Seventy Five Lakhs, Twenty Six Thousand, Three Hundred and Ninety Two and paise thirty) as required under the SEBI ICDR Regulations. Since, the Company has allotted the share warrants, presently there is no change in the paid-up share capital of the Company. Each warrant, so allotted, is convertible into one fully paid-up equity share of the Company having face value of Re. 1/- (Rupee One only) each in accordance with the provisions of SEBI ICDR Regulations, on payment of the balance consideration of Rs. 3,89,25,79,176.90 (Rupees Three Hundred and Eighty Nine Crores, Twenty Five Lakhs, Seventy Nine Thousand, One Hundred and Seventy Six and paise ninety) being 75% of the aggregate consideration from the Allottee pursuant to exercise of conversion option against each such warrant, within 18 months from the date of allotment of share warrants.
TRANSFER TO RESERVES
The Board has not proposed to transfer any amount to reserve during the year under review.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Details of loan, guarantees and investments covered under Section 186 of the Act along with the purpose for which such loan or guarantee was proposed to be utilized by the recipient are given in the respective notes to the standalone financial statements of the Company forming part of the annual report. The Company is holding certain strategic investments generally long-term in nature and the Board may evaluate further opportunities in this regard with a view to enhance value for the stakeholders of the Company.
DEPOSITS
During FY 2022-23, the Company has not accepted deposits within the meaning of Section 73 of the Act and the Companies (Acceptance of Deposits) Rules 2014. As such no amount of deposit or interest thereon is outstanding as on March 31,2023.
SCHEME OF ARRANGEMENT
The Board had approved a ‘scheme of arrangement' (the “scheme"), subject to approvals of the applicable/relevant authorities including approval of the members, creditors, stock exchanges, SEBI, and National Company Law Tribunal. The scheme has already been approved by the members and creditors of the Company in the duly court-convened meetings. Currently, it is pursuing other regulatory approvals.
The scheme inter-alia provides for demerger of the investment business division of the Company into Genus Prime Infra Limited. Post demerger, the members of the Company will get 1 (One) equity share of face value Rs. 2 (Two) each of Genus Prime Infra Limited as fully paid up for every 6 (Six) equity share of face value of Re. 1 (One) each of the Company. The above restructuring/arrangement once achieved will enable the Company to participate in its core activities and provide focused areas for growth. A copy of the scheme has also been made available on the Company's website at www.genuspower.com.
JOINT VENTURE / INVESTMENT AGREEMENTS / WARRANTS SUBSCRIPTION / EPC AGREEMENT
Pursuant to approval of the Board at its meeting held on July 04, 2023, the Company has executed (i) a joint venture agreement, by and between Gem View Investment Pte Ltd, a company incorporated under the laws of Singapore, with registration number 202315328R, having its principal place of business at 168 Robinson Road #37-01 Capital Tower, Singapore 068912 (“Gem View”), Gemstar Infra Pte Ltd, Genus Power Infrastructures Limited (the “Company”), 'Ishwar Chand Agarwal', ‘Kailash Chandra Agarwal', ‘Rajendra Kumar Agarwal' and ‘Jitendra Kumar Agarwal', for setting up a platform to bid for various AMISP concessions; (ii) an investment agreement by and between the Company, Gem View and Gemstar Infra Pte Ltd; and (iii) a warrants subscription agreement by and between the Company and Chiswick Investment Pte Ltd, a company incorporated under the laws of Singapore, with registration number 201917156M, having its principal place of business at 168 Robinson Road, #37-01, Capital Tower, Singapore 068912 (“Chiswick”), to issue and allot, subject to approval of the shareholders of the Company and in compliance with applicable laws, 4,59,78,965 (Four Crores, Fifty Nine Lakhs, Seventy Eight Thousand, Nine Hundred and Sixty Five) share warrants for an aggregate consideration of up to Rs. 5,19,01,05,569.20 (Rupees Five Hundred and Nineteen Crores, One Lakhs, Five Thousand, Five Hundred and Sixty Nine and paise twenty only) (“Share Warrants”), in accordance with Chapter V of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 by way of a preferential issue on a private placement basis (“Preferential Issue”). Gem View and Chiswick are affiliates of GIC, Singapore (“GIC Entities”).
The Company has also executed on August 01,2023 a master engineering and procurement contract by and between Hi-Print Infra Private Limited, Gemstar Infra Pte Ltd and Genus Power Infrastructures Limited, for recording the terms and conditions in relation to the AMISP (Advanced Metering Infrastructure Solutions Provider) Solutions services to be procured by Gemstar Infra Pte Ltd and Hi-Print Infra Private Limited from the Company.
Pursuant to Clause 5A to para A of part A of schedule III of the SEBI Listing Regulations, the disclosure with regard to agreements is available on the Company's website and can be accessed at “https://genuspower.com/ investor/agreements/.
EMPLOYEES' STOCK OPTION SCHEME
The employees' stock option scheme 2012 (“ESOS-2012” or “ESOP scheme”) of the Company are in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (“SEBI ESOP Regulations”). Further, there has been no material variation in the terms of the options granted under ESOP schemes of the Company. The ESOP scheme is administered by the Nomination and Remuneration Committee (“NRC”) and it is implemented in accordance with the applicable SEBI's rules and regulations.
The Company has received a certificate from the secretarial auditors of the Company that the ESOP scheme has been implemented in accordance with the SEBI ESOP Regulations and the resolution passed by the members. The certificate would be available at the annual general meeting for inspection by members.
In FY 2022-23, the Company has not granted any stock options. Disclosures as required under Regulation 14 of the SEBI ESOP Regulations have been placed on the website of the Company at www.genuspower.com.
EMPLOYEES STOCK APPRECIATION RIGHTS PLAN
The ‘Employees Stock Appreciation Rights Plan 2019' (the “ESARP-2019” or “ESAR plan”) of the Company are in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (“SEBI ESOP Regulations”). Further, there has been no material variation in the terms of the ESAR granted under ESAR plans of the Company. The ESAR plan is administered by the NRC and it is implemented in accordance with the applicable SEBI's rules and regulations.
The Company has received a certificate from the secretarial auditors of the Company that the ESAR plan has been implemented in accordance with the SEBI ESOP Regulations and the resolution passed by the members. The certificate would be available at the annual general meeting for inspection by members.
In FY 2022-23, the NRC in its meeting held on January 30, 2023 has approved the grant of 6,50,000 stock appreciation rights (SARs) at the base price of Rs. 85.80 per SAR to the eligible employees of the Company, in terms of the ESARP-2019. The aforesaid SARs will vest over a period of (six) 6 years from the date of grant. The vested SARs shall be exercisable within a period of (three) 3 years from the date of vesting of such SARs. Disclosures as required under Regulation 14 of the SEBI ESOP Regulations with regard to the ESAR Plan of the Company have been placed on the website of the Company at www.genuspower.com.
However, the NRC in its meeting held on June 30, 2023 has approved the cancellation of 6,50,000 surrendered SAR, which were granted on January 30, 2023.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THIS REPORT
In terms of Section 134(3)(l) of the Act, except as disclosed elsewhere in this report/annual report, no material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year and the date of this report.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
During FY 2022-23, the following companies have been incorporated as subsidiary or associate company:
• Hi-Print Metering Solutions Private Limited (incorporated on August 22, 2022, as wholly owned subsidiary Company)
• Hi-Print Energy Solutions Private Limited (incorporated on August 31, 2022, as wholly owned subsidiary Company)
• Hi-Print Infra Private Limited (incorporated on September 02, 2022, as wholly owned subsidiary Company)
• Hi-Print Technologies Private Limited (incorporated on October 12,
2022, as wholly owned subsidiary Company)
• Genus Assam Package-3 SPV Limited (incorporated on February 19,
2023, as Step-down subsidiary Company)
• Genus Assam Package-5 SPV Limited (incorporated on February 24, 2023, as Step-down subsidiary Company)
• Genus Assam Package-4 SPV Limited (incorporated on February 28, 2023, as wholly owned subsidiary Company)
• Genus Assam Package-2 SPV Limited (incorporated on March 09, 2023, as wholly owned subsidiary Company)
• Genus Tripura SPV Private Limited (incorporated on March 12, 2023, as wholly owned subsidiary Company)
• Hi-Print Assam Package-3 SPV Limited (incorporated on March 12, 2023, as Step-down subsidiary Company)
• Hi-Print Investments Private Limited (become Step-down subsidiary with effect from January 30, 2023)
In FY 2022-23, no company ceased to be a subsidiary, joint venture or associate company.
As on March 31 2023, the Company had the following subsidiaries and associate companies:
• Genus Power Solutions Private Limited (Wholly-Owned Subsidiary)
• Hi-Print Metering Solutions Private Limited (Wholly-Owned Subsidiary)
• Hi-Print Energy Solutions Private Limited (Wholly-Owned Subsidiary)
• Hi-Print Infra Private Limited (Wholly-Owned Subsidiary)
• Hi-Print Technologies Private Limited (Wholly-Owned Subsidiary)
• Genus Assam Package-3 SPV Limited (Step-down Subsidiary)
• Genus Assam Package-5 SPV Limited (Step-down Subsidiary)
• Genus Assam Package-4 SPV Limited (Wholly-Owned Subsidiary)
• Genus Assam Package-2 SPV Limited (Wholly-Owned Subsidiary)
• Genus Tripura SPV Private Limited (Wholly-Owned Subsidiary)
• Hi-Print Assam Package-3 SPV Limited (Step-down Subsidiary)
• Hi-Print Investments Private Limited (Step-down Subsidiary)
• M.K.J. Manufacturing Pvt. Ltd. (Associate)
• Greentech Mega Food Park Limited (Associate)
• Hop Electric Manufacturing Private Limited (Associate)
The Company has also incorporated the following subsidiary/ as step-down subsidiary/associate (after FY 2022-23):
• Gemstar Infra Pte. Ltd.
• Genus Chhattisgarh PKG-1 SPV Private Limited
• Genus Mizoram SPV Private Limited
In terms of the provisions of Section 129(3) of the Act, a statement containing performance and salient features of the financial statements of the subsidiaries/associates/joint ventures of the Company in the prescribed form AOC-1 is attached as ‘Annexure-A' to this report.
The audited financial statement including the consolidated financial statement of the Company and all other documents required to be
attached thereto are available on the website of the Company at “https:// genuspower.com/investor/events/". The financial statements of the associate and subsidiaries are available on the website of the Company at “https://genuspower.com/investor/events/".
The policy for determining material subsidiaries as approved by the Board may be accessed on the website of the Company at “https://genuspower. com/wp-content/uploads/2021/06/Policy_Material-Subsidiaries.pdf".
CONSOLIDATED FINANCIAL STATEMENT
Pursuant to the applicable provisions of the Act, the accounting standard on consolidated financial statements and the SEBI Listing Regulations, the audited consolidated financial statement is provided in the annual report. The consolidated revenue stood at Rs. 80,838.55 lakhs and the consolidated net profit stood at Rs. 2,897.43 lakhs in FY 2022-23.
A statement containing the salient feature of the financial statements of each of the subsidiaries/associates/joint ventures of the Company in the prescribed form AOC-1 is annexed as ‘Annexure-A' to this report.
In compliance with the provisions of Section 136 of the Act, the financial statements of the subsidiaries/associates/joint ventures of the Company are kept for inspection by the members at the registered office of the Company. The Company shall provide free of cost the copy of the financial statements of its subsidiaries/associates/joint ventures to the members upon their request. The statements are also available on the website of the Company.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All related party transactions in FY 2022-23 were in the ordinary course of business and at arm's length basis. All these transactions were approved by the audit committee. There were no materially significant related party transactions that may have potential conflict with the interests of the Company at large. There are no transactions that are required to be reported in Form AOC-2. The details of the related party transactions are given in the respective notes to the standalone financial statements of the Company, which sets out related party disclosures.
The policy on materiality of related party transactions and dealing with related party transactions as approved by the Board can be accessed on the website of the Company at “https://genuspower.com/wp-content/ uploads/2021/06/Policy_Related-Party-Transaction.pdf".
CORPORATE SOCIAL RESPONSIBILITY
The Company has a policy on ‘corporate social responsibility' (“CSR"), in line with Schedule VII of the Act and the same has been posted on the website of the Company at “https://genuspower.com/wp-content/ uploads/2023/05/Policy_CSR.pdf".
In FY 2022-23, the Company has undertaken a number of projects and programs as part of its CSR initiatives in line with its CSR policy. The focus areas of the Company's CSR programs/initiatives were (1) promotion of health care including preventive health care, (2) promotion of education including special education and employment enhancing vocational skills, (3) set up old age homes, day care centres and such other facilities for senior citizens, and (4) animal welfare promotion. The Company's dedicated staff members monitor the implementation of projects and programs regularly by site visits, meeting beneficiaries and checking records.
In FY 2022-23, the Company spent Rs. 177.79 lakhs (inclusive of administrative overheads) (around 2.08% of the average net profits of the last three financial years) on CSR activities. The statutory disclosures with respect to the CSR committee and an annual report on CSR activities are annexed as ‘Annexure-B', which forms part of this report.
Pursuant to the Companies (Corporate Social Responsibility Policy)
CODE OF CONDUCT
Pursuant to Regulation 26(3) of the SEBI Listing Regulations, all Board members and senior management personnel have affirmed compliance with the Company's code of conduct for directors and senior management on an annual basis. The code of conduct is also placed on the website of the Company at https://genuspower. com/wp-content/uploads/2021/06/Policy_Code-of-Conduct-for-Directors-SMP.pdf.
CREDIT RATING
In FY 2022-23, India Ratings and Research (Ind-Ra) has affirmed to the Company ‘Long-Term Issuer Rating' at ‘IND A ', vide its letter dated December 07, 2022. The outlook is stable. The instrument-wise rating actions are as follows: -
Instrument Maturity Size of Issue Rating/ Rating Type Date (billion) Outlook Action
Long-term March 2023 INR 0.01 IND A / Affirmed
loan (reduced from Stable
INR 0.17)
Fund-based - INR 2.91 IND A / Affirmed
limits (increased from Stable/IND
INR 2.51) A1
Non-fund- - INR 11.0 IND A / Affirmed
based limits (increased from Stable/IND
INR 7.85) A1
Term Loan March 2030 INR 0.2 IND A / Assigned
Stable
Commercial Up to 365 INR 1.0 IND A1 Affirmed
paper (CP)* days
Amendment Rules, 2021, the Company has also adopted an annual action plan on CSR for FY 2023-24, which is in line with its CSR policy.
RISK MANAGEMENT AND INTERNAL FINANCIAL CONTROL SYSTEMS
The Risk Management Committee (RMC), duly constituted by the Board, has framed a risk management policy, which is in accordance with the provisions of the Act and Regulation 21 of the SEBI Listing Regulations. It has identified major risks and classified these in six broad categories of strategic, financial, operational, ESG, compliance and other risks. For this risk spectrum, a risk management strategy has also been developed. The Company employs a proactive risk management method that strives to foresee potential hazards, promptly disclose them, and hasten the adoption of controls to lessen their potential negative effects.
The Company's risk management and control mechanism mandates the participation of every department/division in formulation & execution of appropriate control measures/techniques. It also mandates the sharing of relevant information across the divisions of the Company. The Company has also integrated its risk management and control mechanism with internal controls and audit supported by SAP ERP, which ensures smooth running of day-to-day operations, regulatory standards and mitigates risk. The internal audit department continuously examines all the major operational areas so that any weak areas may be found and remedial action can be performed quickly to increase overall efficiency through informed decision-making. The management also evaluates the effectiveness of all current company's policies and strategies on a regular basis. To record, monitor, regulate, and mitigate internal risks using knowledgeable and unbiased techniques and plans, regular training sessions and workshops are held.
The details of the risk management committee, risk management policy and internal financial control systems are also provided in the report on ‘management discussion and analysis' and the ‘corporate governance report', forming part of this report.
INSURANCE
The Company has continued to insure its assets and projects adequately to cover most risks. Major insurance policies taken by the Company in FY 2022-23 are as follows:
• Consequential Loss (Fire) Policy to insure the profit affected during the interruption/cessation of the business operations due to fire and allied perils.
• Group Mediclaim Policy for its permanent employees covering their spouse and dependent children.
• Personal Accident Policy (Group) for insuring its employees and giving coverage like disability cover, permanent disability cover and death cover due to accident.
• Director and Officer Liability Insurance Policy to provide protection to its directors, and key officers who are in a decision making position against their personal liability for financial losses arising out of wrongful acts or omissions in their capacity as directors or officers. It provides insurance cover to directors or officers to indemnify them for legal & defense costs, damages and expenses incurred arising from claims brought against them personally, due to wrongful acts in their capacity as Director or Officer of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Pursuant to Regulation 34(2) of the SEBI Listing Regulations, the management discussion and analysis report for the year under review is annexed as ‘Annexure-C' to this report.
*carved out of fund-based limits
CORPORATE GOVERNANCE
The Company has complied with all the applicable provisions of corporate governance as stipulated under Chapter IV of the SEBI Listing Regulations. A detailed corporate governance report along with a certificate from the practicing Company Secretary confirming compliance of the conditions of corporate governance as stipulated under the SEBI Listing Regulations is attached as ‘Annexure-D' to this report.
WHISTLE BLOWER POLICY AND VIGILANCE MECHANISM
As required by Section 177(9) of the Act, the Company's whistleblower policy and vigil mechanism set up a formal vigil procedure for directors and employees to report genuine concern of unethical behaviour, actual or suspected fraud or violation of the Company's code of conduct. The audit committee periodically evaluates the vigil mechanism's existence and performance. The aforementioned policy and mechanism have been effectively communicated across all sections within the Company. The whistleblower policy and vigil mechanism have also been posted on the Company's internal HR management system as well as on the website of the Company at “https://genuspower.com/wp-content/uploads/2023/05/Policy_ Whistle-Blower-Policy-and-Vigil-Mechanism.pdf".
The audit committee affirmed that no personnel have been denied access to the audit committee in FY 2022-23.
PREVENTION OF INSIDER TRADING PRACTICES
In accordance with the SEBI (Prohibition of Insider Trading) Regulations 2015 as amended (“SEBI PIT Regulations"), the Company has adopted ‘code of conduct for regulating monitoring and reporting of trading by designated persons and their immediate relatives', ‘code of practices and procedures for fair disclosure of unpublished price sensitive information' and ‘policy for procedure of inquiry in case of leak of unpublished price sensitive information'. The aforementioned codes prohibit procuring, communicating, providing or allowing access to unpublished price sensitive information except where such communication is in furtherance of legitimate purposes performance of duties or discharge of legal obligations. The aforementioned codes/guidelines also forbid insiders from trading in securities when they have access to sensitive price information that has not yet been published and when the trading window is closed. However, an insider is entitled to formulate a trading plan for dealing in securities of the Company and submit the same to the compliance officer for approval and public disclosure. In light of the aforementioned, the Company has established an adequate and effective system of internal controls to ensure compliance with the requirements of SEBI PIT Regulations.
ANNUAL RETURN
Pursuant to Sections 92(3) and 134(3)(a) of the Act, a copy of the annual return of the Company as on March 31, 2023 is available on the Company's website and can be accessed at “https://genuspower.com/ investor-category/corporate-governance/".
DIRECTORS
During FY 2022-23, Ms. Mansi Kothari (DIN: 08450396) ceased to be a director of the Company on account of resignation from close of business hours on February 03, 2023. As per the resignation letter, she is occupied in other areas and would not be able to devote her time to perform the duties in the capacity of Independent Director of the Company. She also confirmed that there is no other material reason other than those provided.
Ms. Sharmila Chavaly (DIN: 06411077), who was appointed by the Board as an additional director and independent director of the Company with effect from May 01, 2023 considering her integrity, expertise and experience, has been appointed as an independent director and nonexecutive director of the Company by the Members of the Company through the postal ballot (by way of e-voting process only) on July 31, 2023 to hold office up to a period of two (2) years with effect from May 01,2023 to April 30, 2025. Pursuant to the circular dated June 20, 2018, issued by the stock exchanges and the declaration received from the independent director, she being appointed as independent director are not debarred from holding the office of Director by virtue of any SEBI order or any other such authority and therefore, she is not disqualified to be appointed/reappointed as an independent director. Further, she is not related to any director of the Company.
In accordance with the provisions of Section 1 52 of the Act and the articles of association of the Company, Mr. Rajendra Kumar Agarwal and Dr. Keith Mario Torpy, Directors of the Company retire by rotation at the ensuing annual general meeting and they being eligible have offered themselves for re-appointment. The Board recommends their re-appointment. A resolution seeking members' approval for their re-appointment along with other required details forms part of the notice of the ensuing annual general meeting.
Pursuant to the provisions of Section 134(3)(d) of the Act with respect to
statement on declaration given by independent directors under Section 149(6) of the Act, the Board hereby confirms that all the independent directors of the Company have given declaration that -
• they meet the criteria of independence as provided in Section 149(6) of the Act and in the SEBI Listing Regulations;
• they have registered their names in the independent directors' data bank as prescribed under the Act in terms of Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules, 2014; and
• they have complied with the code for independent directors prescribed in Schedule IV to the Act.
All the Directors have confirmed that they are not disqualified for being appointed as Directors pursuant to Section 164 of the Act and other applicable laws. Based on the confirmation/affirmation received from an independent director that he/she was not aware of any circumstances that are contrary to the declarations submitted by him/her, the Board acknowledged the veracity of such confirmation and recorded the same.
Familiarization programs
The independent directors are given a formal letter of appointment from the Company stating their position, function, responsibilities, and obligations, and the format of which is available on the Company's website. The Company organizes familiarization programs for independent directors in accordance with Regulation 25(7) of the SEBI Listing Regulations to give them the chance to have a comprehensive grasp of their roles, rights, and obligations. Additionally, it enables independent directors to fully comprehend the business model of the company, operational processes, the nature of the sector, and other pertinent facts. The details of familiarization programs have been disclosed on the website of the Company and the web link thereto is “https://genuspower.com/wp-content/uploads/2023/05/Details-of-Familiarisation-Programmes-24. pdf".
Policy on directors' appointment and remuneration and other details
The Company has a ‘Policy on Selection of Directors and Determining Directors' independence (Criteria for Board Membership)' and a ‘Policy on Remuneration of Director, Key Managerial Personnel and Senior Management Personnel', as recommended by the NRC and approved by the Board.
The aforesaid remuneration policy is in compliance with the provisions of Section 178 the Act and regulations of the SEBI Listing Regulations. The policy ensures that -
• the level and composition of remuneration are reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully;
• relationship of remuneration to performance is clear and meets appropriate performance benchmarks;
• remuneration to Directors and SMP involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals; and
• remuneration matches the level in comparable companies, whilst also taking into consideration the required competencies, effort and scope of the Directors and SMP's work.
The policy on selection of directors sets out the guiding principles for the NRC for identifying persons, who are qualified to become directors
and also to determine the independence of directors, in case of their appointment as independent directors of the Company. This policy is in line with the provisions of the Act and the SEBI Listing Regulations. Pursuant to the provisions of Section 134(3) of the Act, the aforesaid policies are available on the website of the Company at “https:// genuspower.com/investor-category/corporate-governance/". For further details relating to directors and their remuneration, please refer to the corporate governance report, which forms part of this report.
BOARD EVALUATION
The Board has conducted an annual evaluation of its own performance, performance of directors including chairperson, managing directors and its committees in accordance with the applicable provisions of the Act and the SEBI Listing Regulations. The Board's performance was assessed after receiving feedback from all the directors on the basis of criteria such as composition, structure, effectiveness of processes information, functioning, etc. The committees' performance was assessed after receiving feedback from the committee members on the basis of criteria such as composition, terms of reference, effectiveness of committee meetings, etc. The performance evaluation of non-independent directors, board as a whole and the chairperson were evaluated at a separate meeting of the independent directors. The same was also discussed in the meeting of NRC and the Board. The performance evaluation of independent directors was done by the entire Board, excluding the independent director being evaluated.
The evaluation was conducted through a structured questionnaire prepared by the NRC separately for the board, board committees and directors including chairperson and managing directors. The aforesaid questionnaire is broadly based on the guidance note on board evaluation issued by the SEBI on January 5 2017. The questionnaire and evaluation process were also reviewed in the light of applicable provisions of the SEBI Listing Regulations and the Act.
The independent directors at their separate meeting (without the presence of non-independent directors and the members of management) reviewed & assessed inter-alia the performance of non-independent directors and board as a whole and the performance of the chairperson of the Company after taking into consideration the views of executive and non-executive board members. The independent directors at their separate meeting also assessed the quality, quantity and timeliness of flow of information between the Company's management and the board that was necessary for the board to effectively and reasonably perform their duties.
The NRC has also carried out evaluation of performance of every director. The Board was satisfied with the evaluation process carried out.
KEY MANAGERIAL PERSONNEL
In terms of the provisions of Sections 2(51) and 203 of the Act, the following are the key managerial personnel (KMP) of the Company:
• Mr. Rajendra Kumar Agarwal, Managing Director & Chief Executive Officer
• Mr. Jitendra Kumar Agarwal, Joint Managing Director
• Mr. Nathulal Nama, Chief Financial Officer
• Mr. Ankit Jhanjhari, Company Secretary NUMBER OF MEETINGS OF THE BOARD
During FY 2022-23, four meetings of the Board were convened and held in accordance with the provisions of the Act and the details of which are given in the corporate governance report, which forms part of this report. The maximum interval between any two meetings did not exceed 120 days, as prescribed by the Act.
COMMITTEES OF THE BOARD
During the year under review, the Board had the following eight committees:
(a) Audit Committee
(b) Nomination and Remuneration Committee
(c) Stakeholders' Relationship Committee
(d) Risk Management Committee
(e) Corporate Social Responsibility Committee
(f) Finance Committee
(g) Sales Committee
(h) Committee of Independent Directors
The Board in its meeting held on July 04, 2023 has also formed a Board-level Committee namely ‘Share Allotment Committee', inter alia to deal with the matters related to issuance and allotment securities including share warrants of the Company.
The details of the compositions, powers, roles, terms of reference, etc. of the said committees are given in the corporate governance report, which forms part of this report. During the year, all recommendations made by the committees were approved and adopted by the Board.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(5) of the Act, the directors confirm that -
(a) in the preparation of the annual accounts for the financial year ended March 31 2023, the applicable accounting standards read with requirements set out under schedule III to the Act have been followed and there are no material departures from the same;
(b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;
(c) they have 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) they have prepared the annual accounts on a going concern basis;
(e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
(f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
AUDITORS AND AUDITORS' REPORT Statutory Auditors and Auditors' Report
M/s. S.R. Batliboi & Associates LLP chartered accountants (firm registration no. 101049W/E300004) were appointed as joint statutory auditors of the Company at the annual general meeting held on September 06 2019 for the second term of five consecutive years i.e. to hold office till the conclusion of the 32nd AGM of the Company to be held in 2024. M/s. Kapoor Patni & Associates, chartered accountants (firm registration no. 019927C) were appointed as joint statutory auditors of the Company at the annual general meeting held on September 06 2019 for the first term of five consecutive years i.e. to hold office till the conclusion of the 32nd AGM of the Company to be held in 2024. The auditors have confirmed that
they are not disqualified for continuing as auditors of the Company The notes on financial statements referred to in the auditors' report are self-explanatory and do not call for any further comments. The auditors' report does not contain any qualification, reservation, adverse remark or disclaimer.
Cost Auditors and Cost Audit Report
Pursuant to the provisions of Section 148(1) of the Act read with rules framed thereunder, the Company is required to maintain the cost records as specified and accordingly such accounts and records are made and maintained by the Company.
In terms of the provisions of Section 148 of the Act read with the Companies (Cost Records and Audit) Rules 2014 as amended from time to time, the Board based on the recommendation of the audit committee has appointed M/s. K. G. Goyal & Associates, cost accountants as cost auditor of the Company for conducting the cost audit for the financial year ended on March 31 2024 on a remuneration as mentioned in the notice of 31th annual general meeting. A certificate from M/s. K. G. Goyal & Associates, cost accountants has been received to the effect that their appointment as cost auditor of the Company, if made would be in accordance with the limits specified under Section 141 of the Act and rules framed thereunder. A resolution seeking member's ratification for the remuneration payable to the cost auditor forms part of the notice of 31 th annual general meeting and the same is recommended for your consideration and ratification.
The cost audit report for FY 2021-22 issued by M/s. K. G. Goyal & Associates, cost auditors, was filed with the ministry of corporate affairs (MCA) on August 09, 2022 within the stipulated/extended due date. Secretarial Auditors and Secretarial Audit Report Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the secretarial audit for FY 2022-23 has been carried out by M/s. ARMS & Associates LLP, Company Secretaries. The secretarial audit report submitted by them in the prescribed form (i.e. MR-3) is attached as ‘Annexure-E' and forms part of this report. There are no qualifications or observations or adverse remarks or disclaimer of the secretarial auditors in the report issued by them for FY 2022-23, which call for any explanation from the Board.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings & outgo, stipulated under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules 2014 is provided in ‘Annexure-F', which forms part of this report.
PARTICULARS OF EMPLOYEES AND OTHER RELATED DISCLOSURES The disclosure as required under the provisions of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employees of the Company will be provided upon request. In terms of second proviso to Section 136(1) of the Act, the annual report and accounts excluding the aforesaid information are being sent to the members and others entitled thereto. The said information is available for inspection by the members at the registered office of the Company during business hours on working days of the Company up to the date of ensuing annual general meeting. Any member interested in obtaining a copy thereof may also write to
the company secretary of the Company. It is hereby affirmed that the remuneration is as per the remuneration policy of the Company. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
Since environmental, social, and governance (ESG) have become increasingly important on a worldwide scale, the Company has started incorporating it into its mission, operations and business plans. The Business Responsibility and Sustainability Report (“BRSR"), describing the initiatives taken by the Company from an environmental, social and governance perspective, is attached as ‘Annexure-G' in a specified format which forms a part of this annual report. It is also available on the Company's website www.genuspower.com.
CEO AND CFO CERTIFICATION
The managing director & CEO and the chief financial officer of the Company have given annual certification on financial reporting and internal controls to the Board in terms of Regulation 17(8) of the SEBI Listing Regulations, copy of which is annexed as ‘Annexure-H' to this report. The said annual certificate was placed before the Board at its meeting held on May 23, 2023. The managing director & CEO and the chief financial officer of the Company have also given quarterly certification on financial results while placing the financial results before the Board in terms of Regulation 33(2) of the SEBI Listing Regulations.
OTHER DISCLOSURES
The Directors state that during FY 2022-23 -
(a) the Company has not received significant or material orders, passed by any regulatory authority, court or tribunal, which shall impact the going concern status and Company's operations in future.
(b) the Company has adopted a ‘policy on prevention of sexual harassment at workplace' in line with the requirements of the ‘Sexual Harassment of Women at the Workplace (Prevention Prohibition and Redressal) Act 2013'. The said policy covers all employees with no discrimination amongst individuals at any point on the basis of race, colour, gender, religion, political opinion, social, origin or age. The Company has also complied with provisions relating to the constitution of internal complaints committee under the ‘Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013'. The Company has an internal committee (which includes a woman member) to monitor the behavior of all employees and to redress complaints, if any. Further, the Company has not received any complaint regarding sexual harassment in terms of the provisions of the ‘Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013'.
(c) neither the managing directors nor the whole-time directors of the Company receive any remuneration or commission from any of its subsidiary/associate/joint venture.
(d) the statutory auditors or cost auditors or secretarial auditors of the Company have not reported fraud to the audit committee or to the Board under the provisions of Section 143(12) of the Act including rules made thereunder.
(e) the Company maintained healthy, cordial and harmonious industrial relations at all levels.
(f) the Company has complied with the applicable provisions of the secretarial standards, issued by the Institute of Company Secretaries of India and notified by the Ministry of Corporate Affairs.
(g) there is no corporate insolvency resolution process initiated under the Insolvency and Bankruptcy Code 2016.
(h) there was no instance of one-time settlement with any bank or financial institution.
(i) in line with our commitment towards the green initiatives and going beyond it, electronic copy of the notice of 31st annual general meeting of the Company including the annual report for FY 2022-23 are being sent to all members, whose e-mail addresses are registered with the Company or depository participant(s) or depositories or registrar and share transfer agent of the Company.
ACKNOWLEDGEMENTS
The Directors would like to express their gratitude to the Company's members, customers, vendors, dealers, and business partners for their kind support and invaluable nourishment provided throughout the financial year under review. Additionally, the Directors would like to express their gratitude to the Government of India, the State Governments, SEBI, BSE, NSE, Bankers, Depositories, Tax Authorities, RBI, MCA, Ministry of Power, Ministry of Finance, State Electricity Boards, and Power Utilities for their unwavering cooperation. The Board looks forward to receiving their continued support. The Directors would like to widely express their gratitude for the effort, camaraderie, dedication, and support shown by the Genus family.
For and on behalf of the Board of Directors Ishwar Chand Agarwal
Chairman DIN: 00011152 Jaipur, August 26, 2023
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