Dear Members,
Your Directors are pleased to present to you the 19th Annual Report on the
business and operations of the Company along with the Audited Financial Statements
(Standalone and Consolidated) for the Financial Year ended 31st March, 2023
("FY").
1. FINANCIAL PERFORMANCE
Highlights of the Company's financial performance for the year ended 31 st
March, 2023 are as under:
a) Standalone Financial Results
(Amount in Lakhs)
Particulars |
Financial Year ended 31st March, 2023 |
Financial Year ended 31st March, 2022 |
Revenue from Operations |
24915.20 |
13,369.97 |
Other Income |
40.81 |
56.45 |
Total Income |
24,956.00 |
13,426.42 |
Less: Depreciation |
(208.56) |
(156.88) |
Other Financial Expenses |
(23,371.6) |
(12,758.20) |
Profit before exceptional items and tax |
1,375.84 |
511.35 |
Exceptional Items |
- |
5.06 |
Profit before tax |
1,375.84 |
506.30 |
Tax Expenses |
318.67 |
139.93 |
Profit after tax for the year |
1057.17 |
366.37 |
Other Comprehensive Income |
2.35 |
0.75 |
Net Profit for the year |
1059.53 |
367.12 |
Transfer to General Reserve |
- |
- |
Interim Dividend |
0.20 |
0.20 |
EPS (Basic) |
1.00 |
1.97 |
EPS (Diluted) |
1.07 |
2.00 |
Note: The face value of the Company calculated considering the sub-division held on 3rd
February, 2023.
b) Consolidated Financial Results
Particulars |
Financial Year ended 31st March, 2023 |
Financial Year ended 31st March, 2022 |
Revenue from Operations |
27848.09 |
14,367.41 |
Profit after tax |
1,106.51 |
405.77 |
c) Overview of Company Performance
In the midst of trade flow disruptions and economic instability, there was ongoing
volatility in the global markets. Despite challenges, your company has continued to grow
steadily and produce positive financial results.
Inflationary pressures caused consumer demand to decline, especially in rural markets,
and increased consumer preference for goods at lower price points.
By focusing on the strategic pillars of cost-efficiency initiatives, innovation, brand
development, and distribution in order to maintain growth and profitability, your company
navigating these unprecedented challenges. To counteract the effects of rising commodity
prices, prudent price increases were also put into practice.
2. SHARE CAPITAL
a) Authorised Share Capital:
At the beginning of the financial year, the Authorized Share Capital of the Company was
Rs. 220000000 (Rupees Twenty Two Crores) divided into 2,20,00,000 (Two Crores Twenty Lakh)
equity shares of face value of Rs. 10/- (Rupees Ten Only) each.
Thereafter in order to ensure smooth flexibility for Shareholders, the Company did
sub-divide the equity shares of the Company such that equity shares of face value of Rs.
10/- were sub-divided into 5 (five) equity shares having face value Rs. 2/- each fully
paid-up ranking pari-passu with each other in all respects with effect from 3rd
February, 2023.
As on 31st March, 2023, the Authorized share capital of the Company post
stock split stood at Rs. 22,00,00,000/-(Rupees Twenty Two Crores only) divided into
11,0000000 (Eleven Crores) equity shares of face value of Rs. 2/- (Rupees Two Only) each.
b) Paid-up Share Capital:
At the beginning of the financial year, the paid-up equity share capital of the Company
was Rs. 18,66,54,290 (Rupees Eighteen Crore Sixty Six Lakhs Fifty Four Thousand Two
Hundred Ninety only) divided into 1,86,65,429 (One Crore Eighty Six Lakhs Sixty Five
Thousand Four Hundred and Twenty Nine) equity shares of Rs. 10/- (Rupees Ten only) each.
The Company vide Extra-ordinary General Meeting held on 1st October, 2023
had issue, and allotted 2600000 equity shares of Rs. 10/- each on preferential basis to
other than promoter and promoter group. Accordingly, the paid up capital was changed from
Rs. 18,66,54,290 (Rupees Eighteen Crore Sixty Six Lakhs Fifty Four Thousand Two Hundred
Ninety) divided into 1,86,65,429 (One Crore Eighty Six Lakhs Sixty Five Thousand Four
Hundred and Twenty Nine) equity shares of Rs. 10/- (Rupees Ten only) each to Rs.
21,26,54,290 (Rupees Twenty One Crore Twenty Six Lakh Fifty Four Thousand Two Hundred
Ninety) divided into 21265429 (Two Crore Twelve Lakhs Sixty Five Thousand Four Hundred
Twenty Nine) equity shares of Rs. 10/- (Rupees Ten only) each.
Thereafter, with effect from 3rd February, 2023, the shares of the Company
were sub-divided such that equity shares of face value of Rs. 10/- were sub-divided into 5
(five) equity shares having face value Rs. 2/- each fully paid-up ranking pari-passu with
each other in all respects with effects, resulting in change in the paid-up equity share
capital from Rs. 21,26,54,290 (Rupees Twenty One Crore Twenty Six Lakh Fifty Four Thousand
Two Hundred Ninety) to 106327145 (Ten Crore Sixty Three Lakh Twenty Seven Thousand One
Hundred Forty Five) equity shares, each of Rs. 2/- (Rupees Two only) each.
3. DETAILS OF PREFERENTIAL ISSUE
During the financial ended 31 st March, 2023, the Company vide its
Extra-Ordinary General Meeting dated 1st October, 2022 had issued and allotted
2600000 equity shares on preferential basis to other than Promoters and Promoter Group in
accordance with Sections 23(1)(b), 42 and 62(1)(c) of the Companies Act, 2013 and the
Companies (Prospectus and Allotment of Securities) Rules, 2014, the Companies (Share
Capital and Debentures) Rules, 2014 and read with the SEBI (ICDR) Regulations and the SEBI
(LODR) Regulations, 2015.
The aforesaid equity shares are duly listed and traded on National Stock Exchange India
Limited vide Listing and trading Approval dated 28th November, 2022.
4. DETAILS OF EMPLOYEES STOCK OPTION PLAN
The Company had initially obtained the shareholders' approval for implementation of
Employee Stock Option Plan ("ESOP 2022") vide Extra-ordinary General Meeting
held on 4th March, 2022. Thereafter, with a view of engagement and formation of
Subsidiaries of the Company, the management has recommended the ESOP Plan for the
employees of subsidiary Company as well.
Therefore, the Company decided to amend its ESOP scheme and obtained fresh/amended
approval from the shareholders' in compliance with SEBI (Share Based Employees Benefits)
Regulations, 2021 vide Postal Ballot dated 13th January, 2023.
Consequently, the Company had filed the application for in-principle approval from
National Stock Exchange ("NSE") for listing up to a maximum 5,00,000 equity
shares of Rs. 2/- each. The NSE had granted the in-principle approval vide its letter
dated 18th May, 2023.
Currently, the Company had granted the ESOP options to its eligible employees and is in
the process of implementing the said ESOP scheme by following the applicable provisions of
the Companies Act, 2013 and the SEBI (Share Based Employee Benefits and Sweat Equity)
Regulations, 2021.
5. DIVIDEND
During the year under review, the Board of Directors of the Company had, declared an
interim dividend of Re. 0.20 per equity share of the face value of Re. 10/- each vide its
Board Meeting dated The interim dividend was paid to the shareholders on 20th
February, 2023.
Further, the Board of Directors have proposed to recommend Final dividend of 0.2 paise
per Equity Share of Face Value of 1 /- (Rupees One Only)] for the Financial Year ended 31st
March, 2023 subject to the approval of members at the ensuing Annual General Meeting
upon deduction of TDS.
In view of the changes made under the Income-Tax Act, 1961, by the Finance Act, 2020,
dividends paid or distributed by the Company shall be taxable in the hands of the
shareholders. The Company had, accordingly, made the payment of the interim dividend after
deduction of tax at source, at the rates as prescribed and the final dividend shall also
be dealt accordingly.
Further, pursuant to the applicable provisions of the Companies Act, 2013, read with
the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the IEPF
Rules"), all unpaid or unclaimed dividends are required to be transferred by the
Company to the IEPF established by the Government of India, after completion of seven
years.
Further, according to the IEPF Rules, the shares on which dividend has not been paid or
claimed by the shareholders for seven consecutive years or more shall also be transferred
to the demat account of the IEPF Authority.
However, the Company had declared Dividend for the first time in the Financial Year
2021-2022 and seven years have not elapsed from the date of declaration and payment of
dividend the requirement of transfer of unpaid dividend and the shares on which dividend
has not been paid or claimed, to Investor Education and Protection Fund (IEPF) is not
applicable to the Company.
Note:- The change in face value of equity shares of the Company is due to the
stock split conducted by the Company i.e. face value of Rs. 10/- each sub-divided into
face value of Rs. 2/- each with effect from 3rd February, 2023 and the stock
split No. 2 held with effect from 28th July, 2023 which resulted in change of
face value from Rs. 2/- each subdivided into Rs. 1/- each.
6. DETAILS OF SUB-DIVISION OR STOCK SPLIT OF SHARES OF THE COMPANY
During the financial year under review, the board of Directors of the Company vide its
Meeting dated 7th December, 2022 upon approval of the shareholders of the
Company vide Postal Ballot results of which was declared on 13th January, 2023
had approved the sub-division/stock split of shares of the Company such that equity shares
of face value of Rs. 10/- were sub-divided into 5 (five) equity shares having face value
Rs. 2/- each fully paid-up ranking pari-passu with each other in all respects with effect
from 3rd February, 2023.
Thereafter, the Authorized share Capital of the Company had been sub-divided into Rs.
220000000 (Rupees Twenty Two Crores), which is divided into 11,00,00,000 (Eleven Crores)
equity shares with a face value of Rs. 2/- (Rupees Two Only) from Rs. 22,00,00,000 (Rupees
Twenty Two Crores) divided into 2,20,00,000 (Two Crores Twenty Lakh) equity shares with a
Face Value of Rs. 10/- (Rupees Ten Only) each with effect from 3rd February,
2023.
Further, the issued, subscribed, and paid-up equity share capital had also changed to
Rs. 21,26,54,290 divided into 106327145 equity shares, each of Rs. 2/- each from Rs.
21,26,54,290 divided into 21265429 equity shares of Rs. 10/- (Rupees Ten only) each.
7. CHANGE IN THE NATURE OF BUSINESS
For sustained growth in the future, Company wants to rely on the main business (es) of
Company. There is no change in the nature of the business of the Company during the year.
8. TRANSFER TO RESERVE
The Company does not propose to transfer amounts to the general reserve.
9. DEPOSITS
The Company has not accepted any deposits covered under Chapter V of the Companies Act,
2013 during the financial year 2022-23.
10. DETAILS OF SUBSIDIARY/JOINT VENTURE/ASSOCIATE COMPANIES
As on 31st March, 2023, the Company has 3 (three) subsidiaries, the details
of which are as mentioned below.
There are no associates or joint venture companies within the meaning of Section 2(6)
of the Companies Act, 2013 ("Act"). There has been no material change in the
nature of the business of the subsidiaries.
I. Rebreathe Medical Devices India Private Limited ("RMDIPL"):
A Private Limited Company vide CIN: U33119DL2021PTC383180 incorporated on 5th
July, 2021. The Holding Company has 95% shareholding in the Subsidiary.
II. Techbec Industries Limited ("TIL")
A Public Limited Company vide CIN: U31900DL2022PLC404516 incorporated on 13th
September, 2022. The holding Company has 63.5% shareholding in the Subsidiary Company.
III. Techbec Global Solutions Private Limited ("TGSPL")
A Private Limited Company vide CIN: U31900DL2022PTC407268 incorporated on 23rd
November, 2022. The holding Company has 63.5% shareholding in the Subsidiary Company.
Note:- The Company had entered into share purchase agreement on 28th
July, 2023 for transfer of shares held by Company in the Techbec Global Solutions Private
Limited. With effect from completion of the Agreement TGSPL ceased to be the subsidiary
Company.
IV. Techbec Green Energy Private Limited ("TGEPL")
After the close of financial year and with effect from 27 th July, 2023 a wholly-owned
subsidiary Company vide CIN: U27201DL2023PTC417728 was incorporated.
The annual accounts of the subsidiaries shall also be kept for inspection by any
shareholder in the Registered Office of the Company and the respective offices of its
Subsidiary Companies.
Further, pursuant to the provisions of Section 136 of the Act, the financial statements
of the Company, consolidated financial statements along with relevant documents and
separate audited financial statements in respect subsidiaries, are available on the
Company's website at www.servotech.in at Investors Tab.
11. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
During the year under review, 10 (Ten) meetings of the Board of Directors were held.
For details of the meetings of the Board, please refer to the Corporate Governance Report,
which forms part of this Report.
12. DIRECTORS AND KEY MANAGERIAL PERSONNEL
As on 31st March, 2023 the Board comprised of 6 (six) Directors, 3 (three)
Executive Directors and 3 (three) Independent Directors. Out of the total 6 (six)
directors, 1 (one) is woman director.
1. The Board of the Company upon the recommendation of the Nomination and Remuneration
Committee, in its meeting held on 9th August, 2022 had appointed the following:
I. Mr. Sampat Rai (DIN: 07710412), as Additional Director designated as Non-Executive
Independent Director of the Company for period of three (3) Consecutive years w.e.f. 9th
August, 2022 and his appointment was regularized by Shareholders in the Annual General
Meeting held on 30th September, 2022. II. Mr. Jorg Gaebler (DIN: 09699666) as
Additional Director designated as Non-Executive and Non-Independent Director of the
Company for period of one (1) year w.e.f. 9th August, 2022 and his appointment
was regularized by Shareholders in the Annual General Meeting held on 30th
September, 2022. However Mr. Gaebler resigned from the Directorship on 11th
October, 2022 due to personal reasons.
2. Mr. Nimesh Malhotra (DIN: 07104660) Whole-time Director of the Company has resigned
w.e.f. 26th September, 2022.
3. Mr. Rajesh Mohan Rai (DIN: 09050751), initially appointed as Non-executive
Independent Director was re-designated to Whole-time Director w.e.f. 15th
December, 2022.
4. However, after the close of Financial Year, Mr. Sahiel Khurana (DIN: 02340950)
Non-executive Independent Director of the Company resigned w.e.f. 19th May,
2023 and
5. Mr. Meenakshisundaram Kolandaivel (DIN: 09854605) was appointed as Non-executive
Independent Director of the Company w.e.f 25th June, 2023.
During the year under review, other than were no above, there were no changes in the
Board of Directors and Key Managerial Personnel of the Company.
13. DECLARATION BY INDEPENDENT DIRECTORS
All the Independent Directors have submitted their disclosures to the Board that they
fulfil all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 and
Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015, so as to qualify themselves continue to be appointed as Independent Directors under
the provisions of the Companies Act, 2013 and the relevant rules thereof. In the opinion
of the Board, they fulfil 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 relevant attributes of integrity, expertise and experience as required to
be disclosed under Rule 8(5) (iii) (iiia) of the Companies (Accounts) Rules, 2014.
14. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134 (5) of the Act, the Board of Directors, to the best of their
knowledge and ability, confirm that:
a) In the preparation of annual accounts for the financial year ended 31st
March, 2023, the applicable accounting standards have been followed and there are no
material departures;
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 as at 31st March, 2023 and of the profit
of the Company for that period;
c) They have taken proper and sufficient care for their 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
such internal financial controls are adequate and 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.
15. AUDITORS AND AUDITOR'S REPORT
i. STATUTORY AUDITORS
In accordance with the provisions of section 139 of the Companies Act, 2013, M/s. Rohit
KC Jain and Co., Chartered Accountants (Firm Registration No. 020422N), were appointed as
the Statutory Auditors for a period of 5 (five) years commencing from conclusion of the 18th
AGM till the conclusion of the 23rd AGM. M/s. Rohit KC Jain and Co., Chartered
Accountants is a leading professional services firm engaged in the field of audit,
taxation, risk transaction advisory services.
M/s. Rohit KC Jain and Co., Chartered Accountants have consented to the said
appointment, and confirmed that their appointment, would be within the limits mentioned
under Section 141(3)(g) of the Companies Act, 2013 and the Companies (Audit and Auditors)
Rules, 2014. Further, they have confirmed that hold a valid certificate issued by the
Peer Review Board of the Institute of Chartered Accountants of India (ICAI).
The Audit Committee and the Board of Directors recommended the appointment of M/s.
Rohit KC Jain and Co., Chartered Accountants, as Statutory Auditors of the company from
the conclusion of the 18th AGM till the conclusion of the 23rd AGM.
In accordance with the provisions of the Companies (Amendment) Act, 2017, the
requirement related to annual ratification of appointment of statutory auditors by the
members has been omitted. Hence, the resolution for ratification of appointment of M/s.
Rohit KC Jain and Co., Chartered Accountants as the statutory auditor, whose appointment
was approved by the members in the 18th AGM for a term of five consecutive
years i.e. till the conclusion of the 23rd AGM, has not been put for motion as
an ordinary business in the 19th AGM.
The Auditors' Report for financial year 2022-2023 on the financial statements forms
part of this Annual Report. The Auditors have also furnished a declaration confirming
their independence as well as their arm's length relationship with the Company as well as
declaring that they have not taken up any prohibited non-audit assignments for the
Company. The Audit Committee reviews the independence of the Auditors and the
effectiveness of the Audit process.
Auditors' Report and 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 or adverse remark.
ii. SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors
in its meeting held on 9th August, 2022 have appointed R & D Company
Secretaries as Secretarial Auditor of the Company to conduct the Secretarial Audit of the
Company for the financial year 2022-223.
The Secretarial Audit Report in prescribed Form MR-3 for the financial year ended 31 st
March, 2023 is appended as Annexure-1 to this Report. Further in response to the
observation received in the secretarial audit report we confirm that the Forms MGT-14 have
been duly filed with the requisite late fees.
We further confirm that the delay whatsoever has been due to the technical challenges
in the MCA portal faced by the Company while filling the said forms.
The Board of Directors further in its meeting dated 21st July, 2023
re-appointed R & D Company Secretaries to conduct the Secretarial Audit of the Company
for the financial year 2023-24. The Secretarial Auditor have provided their consent inter
alia contains their eligibility to give effect to their appointment.
iii. COST AUDITOR
As per Section 148 of the Act read with Companies (Cost Records and Audit) Rules 2014,
M/s NN Sharma & Associates, Cost Accountants (Firm Registration No. 101702) as the
Cost Auditors, have been re-appointed as Cost Auditors for the financial year 2023-24 to
conduct cost audit of the accounts maintained by the Company in respect of the various
products prescribed under the applicable Cost Audit Rules. The remuneration of Cost
Auditors has been approved by the Board of Directors on the recommendation of Audit
Committee.
The requisite resolution for ratification of remuneration of Cost Auditors by members
of the Company has been set out in the Notice of ensuing AGM. The Cost Auditors have
certified that their appointment is within the limits of Section 141(3)(g) of the Act and
that they are not disqualified from appointment within the meaning of the said Act.
The Cost Audit Report for the financial year 2022-23, issued by M/s NN Sharma &
Associates, Cost Accountants, in respect of the various products prescribed under Cost
Audit Rules.
There were no observations (including any qualification, reservation, adverse remark or
disclaimer) of the Cost Auditors in the Report issued by them for the financial year
2022-23 which call for any explanation from the Board of Directors.
16. DISCLOSURE ON COST RECORDS
Pursuant to provisions of Section 134 of the Act read with Rule 8(5) of the Companies
(Accounts) Rules, 2014 it is confirmed that maintenance of cost records as specified by
the Central Government under sub-section (1) of section 148 of the Act, is required by the
Company and accordingly such accounts and records are made and maintained.
17. REPORTING OF FRAUDS BY AUDITORS
During the year under review, the Statutory Auditors, Cost Auditors and Secretarial
Auditors have not reported any instances of frauds committed in the Company by its
Officers or Employees, to the Audit Committee under Section 143(12) of the Act, details of
which needs to be mentioned in Director's Report.
18. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report, highlighting the performance and prospects
of the Company's business, forms integral part of the Annual Report.
19. CORPORATE GOVERNANCE
A good corporate governance system is something your company is devoted to. The needed
Certificate from Secretarial Auditors regarding compliance with the requirements of
corporate governance, as prescribed, and the Corporate Governance Report, as stipulated by
the SEBI Listing Regulations, are an integral element of this Annual Report.
Your Company has developed and implemented a Code of Business Conduct for all Board
members and senior management staff at the Company (Code of Conduct), who have all
attested to compliance with the Code in accordance with the corporate governance standards
as per the SEBI Listing Regulations. The aforementioned Code of Conduct can be seen on the
Company's website at https://www. servotech.in/img/investor/Code-of-Conduct.pdf.
20. FORMAL ANNUAL EVALUATION
Pursuant to applicable provisions of the Act and the Listing Regulations, the Board, in
consultation with the Nomination and Remuneration Committee, has formulated a framework
containing, inter-alia, the criteria for performance evaluation of the entire Board of the
Company, its Committees and individual directors, including Independent Directors and the
chairmen of the Board. The framework is monitored, reviewed and updated by the Board, in
consultation with the Nomination and Remuneration Committee, based on need and new
Compliance requirements.
The Board evaluation exercise for financial year 2022-23 was carried out by way of
internal assessments done based on a combination of detailed questionnaires and verbal
discussions.
I. Performance evaluation of the Board and Committees
The performance of the Board was evaluated by the Board Members after considering
inputs from all the Directors primarily on:
i) Board composition and quality with emphasis on its size, skill, experience and
knowledge of members;
ii) Periodic review of Company's management and internal control system for
appropriateness and relevance;
iii) Board process and procedure with emphasis on the frequency of meetings, attendance
thereof, flow of information;
iv) Oversight of Financial Reporting process including Internal Controls and Audit
Functions;
v) Engagement in Corporate Governance, ethics and compliance with the Company's code of
conduct.
The Board evaluated the performance of the Committees on the following parameters:
i) Appropriateness of size and composition;
ii) Clarity of mandate and well-defined agenda;
iii) Reporting to the Board on the Committee's activities;
iv) Availability of appropriate internal and external support or resources to the
Committees.
II. Performance Evaluation of Individual Directors
The performance evaluation of the Individual Directors were carried out by the Board
and other Individual Directors, considering aspects such as:
i) Sufficient knowledge of Company strategy and objective;
ii) Understand their role as Director, as distinct from management;
iii) Adequate and productive use of knowledge and experience of the Independent
Directors for the functioning of Board;
iv) Efforts for professional development to enable better fulfilment of their
responsibilities;
v) Ask questions/critique proposals with confidence;
vi) Open and effective participation in Board discussions;
vii) Keep stakeholder interest as the touchstone in endorsing decisions.
III. Performance Evaluation of Chairman
i) Display of effective leadership qualities and skill;
ii) Implementationofobservations/recommendations of Board Members;
iii) Effective and timely resolution of grievances of Board Members;
iv) Ability to bring convergence in case of divergent views and conflict of interest
situation tabled
Board Meetings;
IV. Evaluation Outcome
The evaluation revealed that the timely sharing of information with the Board, the
drafting of agenda notes and their content, as well as the drafting of the minutes, were
all deemed to be satisfactory. The way the business issues of the company were handled
satisfied every Board Member.
21. COMMITTEES OF THE BOARD OF DIRECTORS
Your Company has following Committees of Board of Directors:
1. Audit Committee;
2. Nomination and Remuneration Committee;
3. Stakeholders' Relationship Committee;
4. Corporate Social Responsibility Committee; and
5. Committee of Board of Directors
The role and composition of these Committees, including the number of meetings held
during the period under review and the related attendance, are provided under Corporate
Governance Report which forms part of the Annual Report.
22. MATERIAL CHANGES
The material changes made as on the date of this report are as mentioned hereinbelow:
i. A wholly-owned subsidiary of the Company under name and style as Techbec Green
Energy Private Limited ("TGEPL") vide CIN: U27201DL2023PTC417728 was
incorporated on 27th July, 2023.
ii. The Company had entered into a share purchase Agreement on Friday, 28th
July 2023 with M/s Tamrag Green Solutions (India) Private Limited to sell and transfer the
entire equity shares held by the Company in Techbec Global Solutions Private Limited (a
subsidiary). Pursuant to the completion and transfer of shares, Techbec Global Solutions
Private Limited ceased to be the subsidiary of the Company.
iii. The share price of the Company has appreciated significantly since the stock split
held on 3 rd February, 2023 and with a view to encourage wider participation
and to make it more affordable, the Company did second Stock Split with effect from 28th
July, 2023. The Company has sub-divided the Authorized Capital into Rs. 220000000 (Rupees
Twenty Two Crores), divided into 22,00,00,000 (Twenty Crores) equity shares with a face
value of Rs. 1/- (Rupees One Only) from Rs 220000000 (Rupees Twenty Two Crores), divided
into 11,00,00,000 (Eleven Crores) equity shares with a face value of Rs. 2/- (Rupees Two
Only).
Further the issued, subscribed, and paid-up equity share capital has changed to Rs.
21,26,54,290 divided into 212654290 equity shares, each of Rs. 1/- (Rupees One each) each
from Rs. 21,26,54,290 divided into 106327145 equity shares of Rs. 2/- (Rupees Two only)
each subsequent to the stock split.
23. RELATED PARTY TRANSACTIONS
All transactions entered into with Related Parties as defined under Section 2(76) of
the Companies Act, 2013 and Regulation 23 of the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015, ("Listing
Regulations"), during the Financial Year under review were in the ordinary course of
business and at an arm's length pricing basis and do not attract the provisions of Section
188 of the Companies Act, 2013. There were no transactions with related parties in the
Financial Year which were in conflict with the interest of the Company and requiring
compliance of the provisions of Regulation 23 of the Listing Regulations.
Suitable disclosure as required by the Indian Accounting Standards (Ind AS 24) are
mentioned in the Notes which forms integral part of the Financial Statements.
The Company has formulated a policy on the materiality of Related Party Transactions
and dealing with Related Party Transactions which has been uploaded on the website of the
Company and can be accessed at https://www.servotech.
in/img/investor/Related-Party-Transaction-policy.pdf.
The particulars of related party transactions in prescribed Form AOC-2 are attached as
"Annexure-2".
Pursuant to Regulation 23(9) of the Listing Regulations, your Company has filed half
yearly report on Related Party Transactions with the stock exchanges.
24. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has adequate internal financial control procedures commensurate with its
size and nature of business.
The Company has appointed Internal Auditors who periodically audit the adequacy and
effectiveness of the internal controls laid down by the management and suggest
improvements.
The Audit Committee of the Board of Directors approves the annual internal audit plan
and periodically reviews the progress of audits as per approved audit plans along with
critical internal audit findings presented by internal auditors, status of implementation
of audit recommendations, if any, and adequacy of internal controls.
The detailed statement about adequacy of Internal Financial Controls is given in Point
No. 11 of the Management Discussion and Analysis Report, which forms an integral part of
this Annual Report.
25. SIGNIFICANT OR MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators or Courts or
Tribunals impacting the going concern status of the Company and its future operations.
26. CORPORATE SOCIAL RESPONSIBILITY
The Company does not fall in any of the criteria of Section 135 of the Companies Act,
2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 and
hence, the Company is not required to comply with the same.
However, a Committee has been constituted to guide the Company in undertaking CSR
activities in a focused and structured manner and review CSR Policy from time to time. The
Company's CSR policy is placed on the Company's website at weblink:
https://www.servotech.in/investors/ corporate-governance/policies
27. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO
AND RESEARCH & DEVELOPMENT
In accordance with the requirements of Section 134 (3) (m) of the Companies Act, 2013
read with Rule 8(3) of the Companies (Accounts) Rules, 2014, a statement showing
particulars with respect to Conservation of Energy, Technology Absorption, Foreign
Exchange Earnings and Outgo is annexed hereto as Annexure-3 and forms part of this
report.
28. VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy and has established the necessary vigil
mechanism for its employees and Directors to report concerns about any unethical and
improper activity. No person has been denied access to the Chairman of the Audit
Committee. The Whistle Blower policy is uploaded on the website of the Company at
https://www. servotech.in/img/investor/Whistle-Blower-Policy.pdf.
The Audit Committee monitors and reviews the investigations of the whistle blower
complaints. During the year under review, no complaints were received under Whistle Blower
Policy
29. EXTRACT OF ANNUAL RETURN
The Annual Return of the Company as on 31st March, 2023 is available on the website of
the Company and can be accessed at https://www.servotech.in/blog/wp-content/
uploads/2023/09/Annual-Return-MGT-7.pdf
30. SECRETARIAL STANDARDS
The Company complies with all applicable Secretarial Standards issued by the Institute
of Company Secretaries of India.
31. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS MADE BY THE COMPANY
Details of Loans, Guarantees and Investments covered under the provisions of Section
186 of the Act, are given in the notes to the Financial Statements.
32. PARTICULARS OF EMPLOYEES
The details required under Section 197(12) of the Act read with Rule 5(1) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect
of Directors, KMPs and other employees of the Company, are given in Annexure-4 of
this Board's Report.
During the year ended 31st March, 2023, the Company did not have any
employee, who is in receipt of remuneration of Rs. 8,50,000/- per month or Rs. 1,02,00,000
per annum and hence the Company is not required to provide information under Sub rule 2
and 3 of Rule 5 of the companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014.
However, in terms of first provision of section 136(1) of the Act, the Annual Report
and Accounts are being sent to the members and others entitled thereto, excluding the
aforesaid information. The said information is available for inspection by the members at
the Registered Office of the Company during business hours on working days up to the date
of the ensuing Annual General Meeting. If any member is interested in obtaining a copy
thereof, such member may write to the Company Secretary at email id investor.relations@servotechindia.com.
33. NOMINATION AND REMUENRATION POLICY
The Nomination and Remuneration Policy of the Company, inter alia, provides that the
Nomination and Remuneration Committee shall:
i) formulate the criteria for Board membership, including the appropriate mix of
Executive & Non-Executive Directors and Board Diversity;
ii) approve and recommend compensation packages and policies for Directors, Key
Managerial Personnel and Senior Management Personnel;
iii) lay down the effective manner of performance evaluation of the Board, its
Committees and the Directors; and
iv) such other matters as provided under section 178 of the Act and under the
provisions of Listing Regulations. The salient features of the Nomination and Remuneration
Policy of the Company are outlined in the Corporate Governance Report which forms part of
this Annual Report. The Policy is available on the website of the Company at:
https://www.servotech.in/img/investor/Nomination-and-Remuneration-policy.pdf.
34. RISK MANAGEMENT POLICY
Your Company has in place comprehensive risk assessment and mitigation framework, which
is reviewed by the Board periodically. The Committee of Board of Directors has formulated
a well-defined Policy for Risk Management to identify, assess and frame a response to
threats and mitigate the various risks to our business that affects the achievement of our
objectives. More details on the Policy are given on Company's website which can be
accessed through following link: https://www.
servotech.in/img/investor/Risk-Management-Policy.pdf
35. DISCLOSURE UNDER SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION
AND REDRESSAL) ACT, 2013
As per the requirements of The Sexual Harassment of Women at Workplace (Prevention,
Prohibition & Redressal) Act, 2013 and rules made thereunder, your Company has
constituted Internal Complaints Committees (ICs) at all relevant locations across India to
consider and resolve the complaints related to sexual harassment. The ICs includes
external members with relevant experience. The ICs, presided by senior women conduct the
investigations and make decisions at the respective locations. The ICs also work
extensively on creating awareness on relevance of sexual harassment issues, including
while working remotely. During the year under review, there were no complaints pertaining
to sexual harassment.
All new employees go through a detailed personal orientation on anti-sexual harassment
policy adopted by the Company.
36. FRAUD REPORTING
There was no fraud reported during the Financial Year ended 31st March,
2023.
37. LISTING OF EQUITY SHARES
The equity shares of your Company are listed on National Stock Exchange of India
Limited ("NSE") Main Board. The Annual Listing Fees for the year 2022-23 has
been duly paid to the NSE.
38. DEPOSITORY SYSTEM
The Members are requested to note that as on 31st March, 2023, 99% of the
Company's total paid-up share capital representing 10,62,45,095 shares are in
dematerialized form. In view of the numerous advantages offered by the Depository System
as well as to avoid frauds, members holding shares in physical mode are advised to avail
of the facility of dematerialization from National Securities Depository Limited
("NSDL") and Central Depository Services (India) Limited ("CDSL").
39. HEALTH, SAFETY AND ENVIRONMENT
Your Company has complied with all the applicable Health & Safety Standards,
Environment Laws and Labor laws and has been taking all necessary measures to protect the
environment and provide workers a safe work environment. Your Company is committed towards
improvement in Health & Safety as well as Environmental performance by providing a
Safe & healthy work environment to all its employees and co-workers.
40. HUMAN RESOURCE AND INDUSTRIAL RELATIONS
At Servotech, employees are its prime assets and a vital key to its success. The
company is committed to creating a professional culture to nurture and enable people to
grow in their careers alongside Company's success. The company constantly strives to
strengthen its manpower in alignment with the business needs and continue to engage them
through various initiatives in the realm of learning & development opportunities,
reward & recognition, employee engagement activities and career growth.
41. ACKNOWLEDGMENTS
Your Directors would like to thank all the stakeholders' viz. consumers, shareholders,
dealers, suppliers, business partners, bankers, employees and all other business
associates for the continuous support given by them to the Company and its Management.
FOR AND ON BEHALF OF BOARD OF DIRECTORS
|
RAMAN BHATIA |
SARIKA BHATIA |
DATE: 28.08.2023 |
MANAGING DIRECTOR |
WHOLE-TIME DIRECTOR |
PLACE: New Delhi |
DIN- 00153827 |
DIN- 00155602 |