Abhishek Corporation Limited
Your Directors have pleasure in presenting the 24th Annual Report of Companyalong with the Audited Financial statements and Auditor's Report for the year ended on 31stMarch 2017.
The performance of the company for the financial year ended March 312017 is summarizedbelow:
| || ||(Rs In Lacs) |
|PARTICULARS ||CURRENT YEAR ENDED ON 31st MARCH 2017 ||PREVIOUS YEAR ENDED ON 31st MARCH 2016 |
|1 Total Revenue (Net) ||1462.48 ||656.60 |
|2 Profit before Depreciation & Amortization || || |
|Expenses Finance Cost and Tax ||182.61 ||(726.24) |
|3 Less: Depreciation & Amortization Expenses ||1164.95 ||1227.46 |
|Finance Cost ||9791.55 ||7535.13 |
|4 Profit before Tax ||(10773.89) ||(9488.83) |
|5 Less: Provision for Tax ||- ||- |
|6 Profit after Tax ||(10773.89) ||(9488.83) |
|7 Balance of Profit carried to Balance Sheet ||(10773.89) ||(9488.83) |
The performance of the Company has been comprehensively covered in the ManagementDiscussion and Analysis Report.
REVIEW OF OPERATIONS
During the year under review the turnover has increased to '1448.83 Lakhs from ' 647.84Lakhs in previous year. Under Utilization of capacity accompanied with higher debt costlower margins have resulted into the loss of '10773.89 Lakhs as against the net loss of '9488.83 Lakhs in previous year. However the efforts taken by the management to optimumlyutilize the available capacity is started generating fruits and the spinning unit of thecompany has grown multifold as compared to previous year. The Management is furtheractively involved in trying to utilize the idle capacities available with the company.
CHANGE IN NATURE OF BUSINESS IF ANY
During the year there was no change in the nature of business of the Company.
During the year under review the company has not earned profit hence Board ofDirectors' do not recommend any dividend for the year.
TRANSFER TO RESERVES
During the year under review the Company has not transferred any amount to reserves.
TRANSFER OF UNPAID AND UNCLAIMED AMOUNTS/ SHARES TO IEPF
During the year the Company was not required to transfer any unclaimed dividends /Shares to IEPF.
DIRECTORS & KMP
In accordance with the provisions of Section 152 of the Companies Act 2013 read withCompanies (Management & Administration) Rules 2014 and Articles of Association of theCompany Mrs. Rama J. Swetta Non-Executive Director of the Company retire by rotationat the ensuing Annual General Meeting and being eligible has offered herself forre-appointment and your Board recommends for her re-appointment.
Brief resume of Director proposed to be appointed/re-appointed is given in the Noticeconvening 24th Annual General Meeting in pursuant to Regulation 36(3) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
During the year under review the company has not raised any amount by way of FixedDeposits within the meaning of Section 73 & Section 76 of Companies Act 2013 read withCompanies (Acceptance of Deposits) Rules 2014.
During the year industrial relations have been cordial.
EXTRACT OF ANNUAL RETURN
The Extract of Annual Return as provided under Section 92(3) of the Companies Act 2013and as prescribed in Form MGT-9 of the Companies (Management and Administration) Rules2014 is annexed herewith as Annexure-I to this Directors' Report.
In compliance with SEBI Circular No. CIR/CFD/CM D/6/2015 dated October 13 2015 theCompany has executed a Uniform Listing Agreement with BSE Limited and National StockExchange of India Limited where Equity Shares of the Company are listed.
LISTING OF EQUITY SHARES
The Equity Shares of your Company are presently listed on BSE Limited & NationalStock Exchange of India Limited (NSE).The Company has duly paid the listing fees to BSELimited as well as to National Stock Exchange of India Limited for the financial year2017-2018.
MEETINGS OF THE BOARD
During the year under the review Eight meetings of the board were held on 27.04.2016;10.05.2016; 25.06.2016; 12.08.2016; 01.09.2016; 14.11.2016; 07.01.2017; & 13.02.2017the details of which are given in the Report on Corporate Governance forming part of thisreport . The maximum time gap between any two Board Meetings was not more than 120 days asrequired under Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 Section 173 of the Companies Act 2013 and Secretarial Standard onMeetings of the Board of Directors.
The notice of Board meeting is given well in advance to all the Directors of theCompany. The agenda of the Board / Committee meetings is circulated clear 7 days prior tothe date of the meeting. The agenda for the Board and Committee meetings includes detailednotes on the items to be discussed at the meeting to enable the Directors to take aninformed decision.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(3)(c) & (5) of the Companies Act 2013the Board hereby submit its responsibility statement:
a) in the preparation of the annual accounts for the Financial Year ended 31March2017 the applicable accounting standards had been followed along with properexplanation relating to material departures; if any
b) the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as give a true andfair view of the state of affairs of the Company as at March 312017 and of the profit andLoss of the Company for the year ended on that date.
c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities; and
d) the Directors had prepared the annual accounts of the Company on a 'Going Concern'basis.
e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
f) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
The Board has on the recommendation of the Nomination & Remuneration Committeeframed policy for selection and appointment of Directors Senior Management and theirremuneration in pursuant to Section 178 of Companies act 2013 and Regulation 19 SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.The remuneration givenis as per the remuneration policy framed.
Criteria for Determining the followings:-
Qualifications for appointment of Directors (including Independent Directors)
1. Persons of eminence standing and knowledge with significant achievements inbusiness professions and/or public service;
2. Their financial or business literacy/skills;
3. Their textile industry experience;
4. Other appropriate qualification/experience to meet the objectives of the Company;
5. As per the applicable provisions of Companies Act 2013 Rules made thereunder andas per provisions of SEBI( LODR) Regulations 2015 .
The Nomination and Remuneration Committee shall have discretion to consider and fix anyother criteria or norms for selection of the most suitable candidate/s.
Positive attributes of Directors (including Independent Directors):
1. Directors are to demonstrate integrity credibility trustworthiness ability tohandle conflict constructively and the willingness to address issues proactively;
2. Actively update their knowledge and skills with the latest developments in therailway/heavy engineering/infrastructure industry market conditions and applicable legalprovisions;
3. Willingness to devote sufficient time and attention to the Company's business anddischarge their responsibilities.
4. To assist in bringing independent judgment to bear on the Board's deliberationsespecially on issues of strategy performance risk management resources keyappointments and standards of conduct;
5. Ability to develop a good working relationship with other Board members andcontribute to the Board's working relationship with the senior management of the Company;
6. To act within their authority assist in protecting the legitimate interests of theCompany its shareholders and employees;
7. Independent Directors to meet the requirements of the Companies Act 201 3 read withthe Rules made there under and as per provisions of SEBI( LODR) Regulations 2015 asamended from time to time.
Independence Review Procedures
- Annual Review
The director's independence for the independent director will be determined by theBoard on an annual basis upon the declaration made by such Director as per the provisionsof the Companies Act 2013 read with Rules thereon and as per provisions of SEBI( LODR)Regulations 2015
-Individual Director's Independence Determinations
If a director nominee is considered for appointment to the Board between Annual GeneralMeetings a determination of independence upon the recommendation of the Committee shallbe made by the Board prior to such appointment.
All determinations of independence shall be made on a case-by-case basis for eachdirector after consideration of all the relevant facts and circumstances and the standardsset forth herein. The Board reserves the right to determine that any director is notindependent even if he or she satisfies the criteria set forth by the provisions of theCompanies Act 2013 read with Rules thereon and as per provisions of SEBI( LODR)Regulations 2015
-Notice of Change of Independent Status
Each director has an affirmative obligation to inform the Board of any change incircumstances that may put his or her independence at issue.
Criteria for appointment of KMP/Senior Management -
1. To possess the required qualifications experience skills & expertise toeffectively discharge their duties and responsibilities;
2. To practice and encourage professionalism and transparent working environment;
3. To build teams and carry the team members along for achieving the goals/objectivesand corporate mission;
4. To adhere strictly to code of conduct
- Term -
The Term of the Directors including Managing / Whole time Director / IndependentDirector shall be governed as per the provisions of the Act and Rules made thereunder andthe Listing Regulations as amended from time to time. Whereas the term of the KMP (otherthan the Managing / Wholetime Director) and Senior Management shall be governed by theprevailing HR policies of the Company.
- Evaluation -
The Committee shall carry out evaluation of performance of every Director. TheCommittee shall identify evaluation criteria which will evaluate Directors based onknowledge to perform the role time and level of participation performance of dutieslevel of oversight professional conduct and independence. The appointment /re-appointment /continuation of Directors on the Board shall be subject to the outcome ofthe yearly evaluation process.
- Removal -
Due to reasons for any disqualification mentioned in the Act or under any otherapplicable Act Rules and Regulations thereunder and /or for any disciplinary reasons andsubject to such applicable Acts Rules and Regulations and the Company's prevailing HRpolicies the Committee may recommend to the Board with reasons recorded in writingremoval of a Director KMP or Senior Management.
Remuneration of Managing / Whole-time Director KMP and Senior Management
The remuneration / compensation / commission etc. as the case may be to the Managing/ Wholetime Director will be governed by the relevant provisions of the Companies Act2013 and applicable Rules and Regulations and will be determined by the Committee andrecommended to the Board for approval. The remuneration / compensation / commission etc.as the case may be shall be subject to the prior / post approval of the shareholders ofthe Company and Central Government wherever required. Further the Chairman &Managing Director of the Company is authorised to decide the remuneration of KMP (otherthan Managing / Wholetime Director) and Senior Management based on the standard marketpractice and prevailing HR policies of the Company.
Remuneration to Non-executive Directors (Including independent Director)
It is explained in Corporate Governance Report forming part of this report.
RISKS AND AREA OF CONCERN
A Risk Management Committee has been constituted to oversee the risk management processin the Company required under Section 134 (3) (n) of the Companies Act 2013.The Companyhas laid down a Risk Management Policy which defines the process for identification ofrisks its assessment mitigation measures monitoring and reporting. While the Companythrough its employees and Executive Management continuously assess the identified Risks.The Audit Committee reviews the identified Risks and its mitigation measures annually.The details of the Risk Management Policy are available on the Company's websitewww.abhishekcorporation.com/disclosure/Risk%20Management%20Policy.pdf
REPORTING OF FRAUDS
There was no instance of fraud during the year under review which required theStatutory Auditors to report to the Audit Committee and /or Board under Section 143(12) ofthe Companies Act 2013 and Rules made there under.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
Pursuant to the provisions of Section 135 read with Companies (Corporate SocialResponsibility) Rules 2014 it is not mandatory for the company to form Corporate SocialResponsibility (CSR) Committee and a Policy on Corporate Social Responsibility.
PARTICULARS OF CONTRACT AND ARRANGEMENT WITH RELATED PARTIES REFERRED TO IN SECTION188(1) OF THE COMPANIES ACT 2013
All Related Party Transactions that were entered into during the financial year were onan arm's length basis in the ordinary course of business and were in compliance with theapplicable provisions of the Companies Act 2013 and the SEBI (Listing Obligations andDisclosure Requirement) Regulations 2015. There are no materially significant relatedparty transactions made by the Company with Promoters Directors or Key ManagerialPersonnel etc. which may have potential conflict with the interest of the Company at largeor which warrants the approval of the shareholders. Accordingly details of thetransactions are being reported in Form AOC-2 being enclosed as Annexure VI Complied withSection 134 of the Act read with Rule 8 of the Companies (Accounts) Rules 2014.
In terms of Section 188 Companies Act and Companies (Meeting of board and its powers)Rules 2014 and further in terms of Regulation 23 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 related to the corporate governance Company hasformulated related party policy of the company. The Policy on Related Party Transactionsas approved by the Board is available on Company's website www.abhishekcorporation.com
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANYOCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATEDAND THE DATE OF THE REPORT
There are no any material changes and commitments affecting the financial position ofthe Company occurred between the end of the financial year to which this financialstatement relate and the date of this report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
During the year under review the Company has not made any investments or givenguarantee's or provided security falling under the provisions of Section 186 of theCompanies Act 2013.
EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMER MADE BY THE AUDITORS
Explanation or Comments on Qualification reservations or adverse remarks or disclaimermade by Auditors in Statutory Audit Report are enclosed as Annexure II.
Explanation or Comments on Qualification reservations or adverse remarks or disclaimermade by Secretarial Auditors in Secretarial Audit Report are enclosed as Annexure II.
DECLARATION OF INDEPENDENT DIRECTORS
The Independent Directors of the Company have submitted the declaration of Independenceas required under Section 149(7) of the Companies Act 2013 confirming that they meet thecriteria of independence under Section 149(6) of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
SUSPENSION OF SECURITY TRADING
Trading of Shares is suspended in National Stock Exchange of India Limited due to nonsubmission of some quarterly compliance in time. However Company is in process to revokethe same.
ANNUAL PERFORMANCE EVALUATION BY THE BOARD
Pursuant to the applicable provisions of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Board has carried out anannual evaluation of its own performance performance of the Directors as well as theevaluation of the working of its Committees. The Nomination and Remuneration has definedthe evaluation criteria for the Board its Committees and Directors.
The Board's functioning was evaluated on various aspects including inter alia degreeof fulfillment of key responsibilities Board Composition establishment and delineationof responsibilities to various Committees effectiveness of Board processes andfunctioning of Board as well as Committees. Directors were evaluated on aspects such asattendance contribution at Board/Committee Meetings and guidance/support to themanagement outside Board/ Committee Meetings.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
There are no significant material orders passed by the Regulators / Tribunals whichwould impact the going concern status and company's operations in future.
Companies paid up share capital as on 31 March 2017 was ' 1600 lakhs. The Company hasnot issued any shares with differential voting rights stock options and sweat equity.Hence there is no change in the Company's Share Capital during the year under review.
AUDIT COMMITTEE AND ITS COMPOSITION
The Audit Committee is duly constituted as per the provisions of Section 177 ofCompanies Act 2013 and Regulations 18 the of Listing Regulations.
The details pertaining to composition of Audit Committee are included in the CorporateGovernance Report which forms part of this report.
WHISTLE BLOWER POLICY
In terms of Section 177 of companies Act 2013 and Regulation 22 of SEBI(ListingObligations & Disclosure Requirements) Regulations 2015 the company has established avigil mechanism policy for the directors and employees to report genuine concern in suchmanner as may be prescribed and such vigil mechanism has provided for adequate safeguardsagainst victimization of persons who use such a mechanism and make provision for directaccess to the chairman of the Audit Committee in appropriate and exceptional casesinstance of unethical behaviors actual or suspected fraud or violation of the companiescode of conduct etc.
No complaints issues or concerns were received by the Company under Code of Conductand Whistle Blower Policy during FY 2016-17.
SECRETARIAL AUDIT REPORT
M/S PPS & Associates Practicing Company Secretaries Kolhapur was appointed toconduct the secretarial Audit of the Company for the Financial Year 2016- 17 as requiredunder Section 204 of the Act and the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014. The Secretarial Audit Report in Form MR-3 for Financial Year2016-17 is appended which forms part of this Directors Report as Annexure III.
Pursuant to the provisions of Section 138 of the Companies act 2013 read with Companies(Accounts) Rules 2014 the board on recommendation of the Audit committee appointed Mr.Nilesh Rajendra Kothari Chartered Accountant Kolhapur as the Internal Auditor of theCompany. The Management regularly reviews the findings of the Internal Auditor andeffective steps to implement any suggestions/observations of the Internal Auditors aretaken and monitored regularly. In addition the Audit Committee of the Board regularlyaddresses significant issues raised by the Internal Auditor.
INTERNAL FINANCIAL CONTROL
The Board of Directors have laid down Internal Financial Controls within the meaning ofthe explanation to Section 134(5) (e) of the Companies Act 2013. The Company has aninternal financial control system commensurate with the size and scale of its operationsand the same has been operating effectively.
CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION & ANALYSIS
The Corporate Governance Report and Management Discussion & Analysis which formpart of this Report are set out as separately together with the Certificate from theauditors of the Company regarding compliance of conditions of Corporate Governance asstipulated in Schedule V of Regulation 34(3) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
COMMITTEES OF THE BOARD
During the year in accordance with the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Board constituted itsCommittees. There are currently four Committees of the Board as follows:
- Audit Committee
- Stakeholders' Relationship Committee
- Nomination and Remuneration Committee
- Risk Management Committee
Pursuant to SEBI Circular Company is not required to constitute Risk ManagementCommittee however since company have the said committee since last several years andconsidering the scope and necessity Board has decided to continue with the same.
Details of all the Committees along with their charters composition and meetings heldduring the year are provided in the Report on Corporate Governance a part of this AnnualReport.
PARTICULARS OF REMUNERATION
Pursuant to provisions of Section 197 (1) of Companies Act 2013 read with the rule5(1) of the Companies (Appointment & Remuneration of Managerial personnel) rules 2014details of ratio of remuneration of director to the median employee's remunerations areappended to this report as Annexure IV. The Directors do not receive any remuneration fromthe Company.
In terms of provisions of Section 139 (8) of the Companies Act 2013 of the CompaniesAct 2013 Mr. Moreshwar G. Deshpande Chartered Accountant Sangli (M.No:124163) wasappointed as Statutory Auditor of the Company to fill the casual vacancy caused by theresignation of M/S. Shrikant & Company Chartered Accountants Kolhapur atExtra-Ordinary General Meeting which was held at February 10 2017.
Board of Directors of the company on recommendation of Audit Committee recommendappointment of Mr. Moreshwar G. Deshpande as Statutory Auditor of the company to holdoffice for the term of Four years from the conclusion of this 24th AnnualGeneral Meeting until the conclusion of the 28th Annual General Meeting of thecompany Subject to ratification at every Annual General Meeting & to fix theirremuneration.
Members are requested to consider their re-appointment and fix their remuneration.
INFORMATION UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place a Policy on Prevention Prohibition and Redressal of SexualHarassment and Non discrimination at Work Place in line with the requirements of theSexual Harassment of Women at the Workplace (Prevention Prohibition & Redressal) Act2013.
All employees are covered under this policy. An Internal Complaints Committee (ICC) wasset up to redress complaints received regarding sexual harassment and discrimination atwork place.During the year ended March 312017 the ICC has received no complaintspertaining to sexual harassment / discrimination at work place.
STATEMENT ON IMPACT OF AUDIT QUALIFICATION
Under SEBI vide circular no. CIR/CFD/CMD/56/2016 Company has submitted Statement onimpact of audit qualification with modified opinion for the year 2016-17 to respectivestock exchanges. The Statement on Impact of Audit Qualification for Financial Year 2016-17is appended which forms part of this Directors Report as Annexure VII.
PERTICULARS OF EMPLOYEES
In terms of the provisions of Companies Act 2013 read with Rule 5(2) and 5(3) ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 a statementshowing the names and other particulars of the employees drawing remuneration in excess ofthe limits set out in the said rules has been appended as Annexure VIII .
CONSERVATION OF ENERGY / TECHNOLOGY ABSORPTION / RESEARCH & DEVELOPMENT
The disclosure of particulars with respect to Conservation of Energy TechnologyAbsorption and Foreign Exchange Earnings and Outgo as required under Section 134(3) (m) ofthe Companies Act 2013 read with rule 8(3) of the Companies (Accounts) Rules 2014 isannexed herewith as Annexure V to this Directors' Report.
No disclosure or reporting is required in respect of the following items as there wereno transactions on these items during the year under review:
1. I ssue of equity shares with differential right as to dividend voting or otherwise.
2. Issue of shares (including sweat equity shares) to employees of the company underany scheme.
3. Neither Managing Director nor Whole Time Directors of the company receive anyremuneration or commission from any of its subsidiary.
Your Directors wish to place on record their appreciation of the contribution made bythe employees of the Company. The Directors wish to convey their appreciation to theBanks dealers and other business associates and the shareholders for their continuoustrust and support.
|Date : 16th August 2017 ||For and on Behalf of the Board of Directors |
|Place: Kolhapur || |
| ||Anasaheb R. Mohite |
| ||Chairman & Managing Director |