The Directors are pleased to present the Company's 15th Annual Report together AuditedAccounts for the financial year ended 31st March 2017.
|FINANCIAL HIGHLIGHTS || ||(Rs. in Lacs) |
|Particulars ||Current Year ||Previous year |
| ||31-03-2017 ||31-03-2016 |
|Revenue from Operation (net) ||2596.50 ||100649.31 |
|Other Income ||51.39 ||137.36 |
|Total Revenue ||2647.89 ||100786.67 |
|Profit before Finance Cost Depreciation and Tax ||(24366.74) ||(16102.14) |
|Less: Depreciation & Amortisation ||4053.30 ||6111.81 |
|Less: Finance Cost ||1509.62 ||13486.25 |
|Less: Tax Expenses ||- ||- |
|Net Profit after Tax ||(29929.66) ||(35700.20) |
|Add: Other Comprehensive Income ||8.07 ||(20.15) |
|Total Comprehensive Income ||(29921.59) ||(35720.35) |
Figures of the previous year have been regrouped/revised wherever necessary dueto applicability of Ind AS from the current financial year.
FINANCIAL AND OPERATIONAL REVIEW
During the year under review the Company has achieved Net Sales/Income from Operationof ` 2596.50 Lacs only as against ` 100649.31 Lacs in the previous year. The Companyincurred a Net Loss of ` 29921.59 Lacs as against ` 35720.35 Lacs in the previous year.The losses and decline in sales are mainly attributed to depressed market for steelimpacting the net realisation and margin.
The plant which was under suspension of work has resumed operations. The Company hadmade a reference to Board of Industrial and Financial Reconstruction (BIFR) under Section15 of Sick Industrial Companies Act 1985. However with the repeal of the Sick IndustrialCompanies Act 1985 w.e.f. 1st December 2016 the submission is no more valid.
INDIAN ACCOUNTING STANDARDS (IND AS)
The Company has adopted Ind AS from the current financial year with the transition dateof 1st April 2015. As required under Ind AS the comparative period financial statementshave been restated for the effects of Ind AS. The effect of the transition has beenexplained in detail in the notes to the financial statements.
The Company has not transferred any amount to the General Reserve due to the lossesincurred during the financial year ended 31st March 2017.
In view of the losses incurred by the Company the Directors of the Company do notrecommend any dividend for the financial year ended 31st March 2017.
During the year under review the Board of Directors met seven (7) times the detailsof which are given in the Corporate Governance Report that forms part of this AnnualReport. The intervening gap between the meetings was within the period prescribed underthe Companies Act 2013 and the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
CHANGES IN SHARE CAPITAL
There was no change in the Share Capital of the Company during the year.
In accordance with the provisions of the Companies Act 2013 Mr. Sanjay Singh (DIN:00531906) retires by rotation and being eligible offers himself for re-appointment.
During the year Mr. Rohit Jain (DIN: 07129693) Non-Executive Independent Director ofthe Company has resigned from the directorship of the Company with effect from 14thDecember 2016.
Mr. Prem Narayan Khandelwal (DIN: 00438367) Non-Executive Independent Director of theCompany has resigned from the Directorship of the Company with effect from 11th August2017.
Pursuant to the provisions of Section 149 152 161 of the Companies Act 2013 alongwith the rules made thereunder read with Regulation 25 of SEBI (Listing Obligations &Disclosure Requirements) Regulation 2015 Mr. Ankit Jain (DIN: 07672255) was appointed asan Additional Independent Director (Non-Executive) by the Board of Directors of theCompany with effect from 14th December 2016 up to the date of ensuing Annual GeneralMeeting. The Company has received a notice in writing from a member proposing hiscandidature for the office of Independent Director (Non-Executive).
Mr. Ravindra Kumar Mehra (DIN: 07898952) has been appointed as an AdditionalIndependent Director (Non-Executive) with effect from 11th August 2017 up to the date ofensuing Annual General Meeting. The Company has received a notice in writing from a memberproposing his candidature for the office of Independent Director (Non-Executive).
Mr. Ankit Patni (DIN: 00034907) who was appointed by the Board of Directors as anAdditional Director of the Company with effect from 15th December 2015 was regularised inthe 14th Annual General Meeting held on 28th September 2016.
KEY MANAGERIAL PERSONNEL
Chief Financial Officer
The Board had appointed Mr. Saurabh Jhunjhunwala (PAN: AFKPJ9394K) as Chief FinancialOfficer of the Company with effect from 23rd May 2016.
Company Secretary & Compliance Officer
The Board had appointed Ms. Jaya Pathak (PAN: CDCPP7699M) as Company Secretary &Compliance Officer of the Company with effect from 7th October 2016.
DIRECTORS' RESPONSIBILITY STATEMENT
Based on the framework of Internal Financial Controls maintained by the Company workperformed by the Internal Statutory Cost and Secretarial Auditors and external agenciesthe reviews performed by management and the relevant Board Committees the Board with theconcurrence of the Audit Committee is of the opinion that the Company's InternalFinancial Controls were adequate and effective as on 31st March 2017.
Accordingly pursuant to provisions of Section 134(5) of the Companies Act 2013 theBoard of Directors to the best of their knowledge and ability confirm:
i. that in the preparation of the annual accounts the applicable Accounting Standardshave been followed along with proper explanation relating to material departures;
ii. that we have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year March 312017 and of the profit and loss of the Company for that period;
iii. that proper and sufficient care has been taken 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;
iv. that the annual accounts have been prepared on a "going concern" basis;
v. that proper internal financial controls were laid down and that such internalfinancial controls are adequate and were operating effectively and
vi. that proper systems to ensure compliance with the provisions of all applicable lawswere in place and that such systems were adequate and operating effectively.
During the year under review Credit Rating has not been done. The Company's creditrating for previous year for Long-Term and Short-Term debts/facilities was D given by ICRALimited.
DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES
The Company does not hold any subsidiary/joint venture/associate companies during theyear under review.
EXTRACT OF ANNUAL RETURN
The details of the extract of the Annual Return in the Form MGT-9 as on 31st March2017 is annexed herewith and forms part of this Report as Annexure-I.
The Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.
The properties and insurable assets and interests of the Company like building plantand machinery and stocks among others are adequately insured.
In terms of the provisions of Section 139 of the Companies Act 2013 read withCompanies (Audit and Auditors) Rules 2014 M/s. R. Kothari & Company CharteredAccountants (FRN: 307069E) the Auditors of the Company shall hold office till theconclusion of the ensuing Annual General Meeting and they shall not be eligible forre-appointment due to expiry of the maximum permissible tenure as the Auditors of theCompany. The Board appreciates the valuable contribution of the Auditors during their longassociation and guidance to the Company.
The Audit Committee recommended the Board at its meeting held on 11th August 2017 toappoint M/s. J. B. S. & Associates Chartered Accountants (FRN: 323734E ) as the newAuditors of the Company in place of the retiring Auditors M/s. R. Kothari & CompanyChartered Accountants (FRN: 307069E) to hold office from the conclusion of the ensuing15th Annual General Meeting until the conclusion of the 20th Annual General Meeting of theCompany subject to approval of the members at the ensuing Annual General Meeting andratification by the members of the Company every year thereafter.
The Company has received a confirmation from M/s. J.B.S. & Associates CharteredAccountants (FRN: 323734E ) to this effect that their appointment if made would bewithin the limits prescribed under Section 139 of the Companies Act 2013 and the rulesframed thereunder and in accordance with Section 141 of the Companies Act 2013. They havealso confirmed that they hold a valid peer review certificate as prescribed underRegulation 33(d) of the SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015.
STATUTORY AUDITOR'S OBSERVATION
Auditors have drawn attention on Note no.29 of the Ind AS Financial Statements withregard to non-recognition of interest expense amounting to ` 15443.31 Lacs (including `2344.39 Lacs relating to Previous Year) on the borrowings of the Company for the yearended 31st March 2017 which is not in accordance with the requirements of Ind AS 23:Borrowing Costs read with Ind AS 109: Financial Instruments.
The Company has not provided accrued interest in its books of accounts during the yearand reversed interest provided in earlier period pertaining to the period the account wasdeclared NPA by the respective lenders. During the year the Company has reversed interestamounting to ` 5375.27 Lacs (including ` 2344.39 Lacs relating to Previous Year). Theun-provided liability in respect of interest on borrowings amounted to ` 15443.31 Lacs.The same have consequential impact on the reported figures of this year as well as earlierperiods. Had the aforesaid interest expense been recognised the Finance Cost would havebeen ` 16952.93 Lacs (including ` 2344.39 Lacs reversed for the Previous Year) insteadof ` 1509.62 Lacs and total comprehensive loss would have been ` 45364.89 Lacs insteadof ` 29921.66 Lacs for the year ended 31st March 2017. Other Equity and other CurrentFinancial Liabilities as at 31st March 2017 would have been (` 46373.45) Lacs and `34917.14 Lacs.
Our comments are as under:
The lenders have stopped charging interest on debts since the dues from the Companyhave been categorised as Non-Performing Asset (NPA). The Company is in activediscussion/negotiation with its lenders to restructure its debts at a sustainable levelincluding waiver of unpaid interest. In view of the above pending finalisation of therestructuring plan the Company has stopped providing interest accrued and unpaideffective 1st April 2016 in its books. The amount of such accrued and unpaid interest notprovided for stands at ` 10068.04 Lacs for the year ended 31st March 2017 andaccordingly the same has not been considered for compilation of books for the year ended31st March 2017. Further based on the above premises the Company has also reversed theinterest provided in the earlier periods from the date the accounts been categorised asNon-Performing Assets (NPA) by the respective lenders amounting to ` 2895.94 Lacs in theyear ended 31st March 2017.
In terms of Section 148 of the Companies Act 2013 read with Rule 14 of the Companies(Audit and Auditors) Rules 2014 on the recommendation of Audit Committee the Board ofDirectors has re-appointed Mr. Sambhu Banerjee Cost Accountant (Membership No. 9780) asCost Auditor of the Company at a remuneration of ` 35000 plus applicable taxesand re-imbursement of out of pocket expenses incurred by them to conduct an audit of thecost accounting records maintained by the Company for the current financial year beginningfrom 1st April 2017 and ending on 31st March 2018.
As required under Section 148 of the Companies Act 2013 read with Rule 14 of theCompanies (Audit and Auditors) Rules 2014 the remuneration payable to Cost Auditor isbeing placed at the ensuing Annual General Meeting for ratification by the members.
In terms of Section 204 of the Companies Act 2013 and rules made there under M/s. K.C. Dhanuka & Co. (Prop. Mr. K.C. Dhanuka FCS- 2204) Practicing Company Secretary hasbeen appointed as Secretarial Auditor of the Company for the financial year 2016-17. Thereport of the Secretarial Auditor in Form MR-3 is enclosed as Annexure-II to thisreport.
SECRETARIAL AUDITOR'S OBSERVATION
The Secretarial Auditor has the following observations in Form MR-3 enclosed asAnnexure II:
i. The position of a Company Secretary being KMP under Section 203 of the CompaniesAct 2013 was vacant from 26th November 2015 and filled up from 7th October 2016.
ii. The amount remaining in Unclaimed Dividend Account due to transfer for the year2015-2016 was not transferred within the stipulated time to Investor Education andProtection Fund' (IEPF). However the same has been transferred to IEPF Account on 21stJune 2017.
iii. The Shareholding Pattern as required by Regulation 31 of SEBI (Listing Regulationsand Disclosure Requirements) has been filed with BSE Limited (BSE) and National StockExchange of India Limited (NSE) for the quarter ended 31st December 2016 on 3rd February2017.
iv. The Annual Listing Fees of National Stock Exchange of India Limited (NSE) for thefinancial year 2016-2017 is yet to be paid.
v. It has been observed that the Company has defaulted in the payment of statutory dueswithin the prescribed time.
Our Comments are as under:
i. The Company faced difficulties in getting a suitable incumbent in view of its poorfinancial position and also the plant operations remaining under suspension for a largepart of the year 2016.
ii. Delays were mainly on account of getting proper form at RoC and also gettingupdated unpaid dividend account information.
iii. Delivery of benpos required for reporting the shareholding pattern was delayed byNSDL due to our making late payments.
iv. The fee is delayed due to serious cash flow constraints.
v. Payment of statutory dues has been delayed due to poor cash flow position.
In terms of Section 138 of the Companies Act 2013 read with Rule 13 of the Companies(Accounts) Rules 2014 on the recommendation of Audit Committee the Board of Directorshas appointed M/s. NR & Associates Cost Accountants (FRN: 102903) as Internal Auditorof the Company for the financial year 2017-18 at a remuneration fixed by the Board ofDirectors of the Company in consultation with the Auditors.
INTERNAL FINANCIAL CONTROL SYSTEM
The Companies Act 2013 has mandated the Company to have a formal framework of InternalFinancial Controls (IFC) and has also laid down specific responsibilities on the BoardAudit Committee Independent Directors and Statutory Auditor with regard to IFC.
The financial control system and framework is required to ensure:
The orderly and efficient conduct of its business
Safeguarding of its assets
The prevention and detection of frauds and errors
The accuracy and completeness of the accounting records and
The timely preparation of reliable financial information.
The Board reviews the effectiveness of controls documented as part of InternalFinancial Control (IFC) framework and take necessary corrective actions where weaknessesare identified as a result of such reviews. This review covers entity level controlsfraud risk controls and information technology environment.
The Policies and procedures adopted by the Company ensures the orderly and efficientconduct of its business and adherence to the Company's policies prevention and detectionof frauds and errors accuracy and completeness of the records and the timely preparationof reliable financial information.
Based on this evaluation no significant events had come to notice during the year thathave materially affected or are reasonably likely to materially affect our IFC. Themanagement has also come to the conclusion that the IFC and other financial reporting waseffective during the year and is adequate considering the business operations of theCompany.
The Statutory Auditor of the Company has audited the Internal Financial Control overFinancial Reporting and their Audit Report is annexed as Annexure-B to the IndependentAuditor's Report under Financial Statements.
DISCLOURES ON REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL AND EMPLOYEES OF THECOMPANY
Disclosure pertaining to remuneration and other details as required under Section134(3)(q) 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 and subsequentamendments thereto is annexed to this Directors' Report as Annexure III.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO
A statement giving details of Conservation of Energy Technology Absorption and ForeignExchange Earning and Outgo as required under Section 134(3)(m) of the Companies Act 2013read with Rule 8 of the Companies (Accounts) Rules 2014 is annexed to this report as AnnexureIV.
DECLARATION ON COMPLIANCE WITH CODE OF CONDUCT
The Board has formulated a Code of Conduct for the Board Members and Senior Managementof the Company which has been posted on the website of the Company.
It is hereby affirmed that all the Directors and Senior Management Personnel havecomplied with the Code and a confirmation to that effect has been obtained from thedirectors and the senior management.
PREVENTION OF INSIDER TRADING
The Company already had a structured Code of Conduct for Prevention of Insider Tradingwith a view to regulate trading in securities by the Directors and designated employees ofthe Company. The Code has been further streamlined to keep parity with the new CompaniesAct 2013 and SEBI (Prohibition of Insider Trading) Regulations 2015 and be named asCode of Conduct for Regulating Monitoring and Reporting of Trading by Insiders'which is also displayed on the website of the Company www. ankitmetal.com.
The Code requires pre-clearance for dealing in the Company's shares and prohibits thepurchase or sale of Company's shares by the Directors and the designated employees whilein possession of unpublished price sensitive information in relation to the Company andduring the period when the Trading Window is closed. The Board is responsible forimplementation of the Code.
All the Directors and designated employees who hold any shares in the Company haveconfirmed compliance with the Code.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/COURTS/TRIBUNALS
There are no significant material orders passed by the Regulators/Courts/Tribunalswhich would impact the going concern status of the Company and its future operations.
MATERIAL CHANGES AFFECTING THE COMPANY
During the year under review there were no such material changes which affects theCompany.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Company has not given any loans or guarantees covered under the provisions ofSection 186 of the Companies Act 2013. The details of the investments made by Company aregiven in the notes to the financial statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts/arrangements/transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on arm's lengthbasis. During the year the Company had not entered into any contract/arrangement/transaction with related parties which could be considered material inaccordance with the policy of the Company on materiality of related party transactionsbetween the Company and the Directors the management or the relatives except for thosedisclosed in the financial statements.
Accordingly particulars of contracts or arrangements entered into by the Company withrelated parties referred to in Section 188(1) of the Companies Act 2013 in Form AOC-2 (AnnexureV) is NIL.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for selection and appointment of Directors Key Managerial Personnel andtheir remuneration. A note on Nomination and Remuneration Policy has been made part of theCorporate Governance Report.
RISK MANAGEMENT POLICY
The Company has a defined Risk Management framework to identify assess monitor andmitigate various risks to key business objectives. Major risks identified by thebusinesses and functions are systematically addressed through mitigating actions on acontinuing basis.
The Risk Management Policy provides for identification of risk its assessment andprocedures to minimise risk. The policy is periodically reviewed to ensure that theexecutive management controls the risk as per decided policy.
DISCLOSURE UNDER SEXUAL HARASSMENT OF EMPLOYEE AT WORKPLACE
The Company has an Anti-Sexual Harassment Policy in line with the requirements of theSexual Harassment of any employee at workplace. The Audit Committee will redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy.
No complaints pertaining to sexual harassment were received during the financial year2016-17.
STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SECTION 149(6)
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as laid down under Section 149(6)of the Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirement)Regulations 2015 with the Stock Exchanges.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Company proactively keeps its Directors informed of the activities of the Companyits management and operations and provides an overall industry perspective as well asissues being faced by the industry. The Familiarisation Programme Policy and details offamiliarisation programmes for Independent Directors is available on the Company's websitewww. ankitmetal.com.
The composition and terms of reference of the Audit Committee has been furnished in theCorporate Governance Report forms part of this Annual Report. There has been no instancewhere the Board has not accepted the recommendations of the Audit Committee.
NOMINATION AND REMUNERATION COMMITTEE
The composition and terms of reference of the Nomination and Remuneration Committee hasbeen furnished in the Corporate Governance Report forms part of this Annual Report.
STAKEHOLDERS' RELATIONSHIP COMMITTEE
The composition and terms of reference of Stakeholders' Relationship Committee has beenfurnished in the Corporate Governance Report forms part of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In line with the provisions of the Companies Act 2013 the Company has framed itsCorporate Social Responsibility (CSR) policy for the development of programmes andprojects for the benefit of weaker sections of the society and the same has been approvedby the CSR Committee and the Board of Directors of the Company. The Company has not spentany amount in CSR activities since the Company has incurred losses during the previous 3years eroding the entire net worth.
In terms of Section 177 of the Companies Act 2013 rules framed thereunder andRegulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the Company has a vigil mechanism in place for the Directors and Employees of theCompany through which genuine concerns regarding various issues relating to inappropriatefunctioning of the organisation can be communicated. For this purpose the Board has aVigil Mechanism and the same has been uploaded on the website of the Company i.e.www.ankitmetal.com and available at the link www.ankitmetal.com/vigilmechanism.pdf. Thepolicy has been constituted under the guidance of the Chairman of the Audit Committee.During the year under review there has been no incidence reported which requires actionby the Audit Committee.
The Board has carried out an annual evaluation of its own performance the directorsindividually as well as the evaluation of the functioning of various Committees. TheIndependent Directors also carried out the evaluation of the Chairman and the NonIndependent Directors the details of which are covered in the Corporate GovernanceReport.
The Company is committed to maintain the highest standards of Corporate Governance andadhere to the Corporate Governance requirements set out in Regulation 34(3) read withSchedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. The Report on Corporate Governance as stipulated under the above regulation forms anintegral part of this Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS
Management's Discussion and Analysis for the year under review as stipulated underRegulation 34(3) read with Schedule V of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is presented in a separate section forming part of thisAnnual Report.
As required by Regulation 34(3) read with Schedule V of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the CEO/CFOfficertification has beensubmitted to the Board and forms an integral part of this Annual Report.
AWARDS & ACHIEVEMENTS
During the year under review the Company has not received any awards.
GREEN INITIATIVES IN CORPORATE GOVERNANCE
Ministry of Corporate Affairs has permitted companies to send electronic copies ofAnnual Report notices etc. to the e-mail ids of shareholders. The Company hasaccordingly arranged to send the soft copies of these documents to the e-mail ids ofshareholders wherever applicable. In case any shareholder would like to receive physicalcopies of these documents the same shall be forwarded upon receipt of written request.
The Directors wish to extend their thanks and appreciation for the valuable andcontinued support received from the shareholders Company's bankers Central and StateGovernment authorities Stock Exchange(s) Depository Participant(s) and all otherbusiness associates for the growth of the organization.
The Directors also wish to place on record their deep appreciation to all the employeesfor their commitment and continued contribution to the Company.
ANNEXURES FORMING PART OF THE DIRECTORS' REPORT
The annexures referred to in this report and other information which are required to bedisclosed are annexed herewith and forms part of this Directors' Report:
|Annexure ||Particulars |
|I ||Extract of the Annual Return (Form MGT-9) |
|II ||Secretarial Audit Report (Form MR-3) |
|III ||Par culars of Employees |
|IV ||Par culars of Conserva on of Energy Technology Absorp on and Foreign Exchange Earnings and Outgo |
|V ||Par culars of Contract or Arrangements with Related Par es (Form AOC-2) |
For and on behalf of the Board
| ||Ankit Metal & Power Limited |
|Place: Kolkata ||Suresh Kumar Patni |
|Dated: 11th August 2017 ||Chairman |