Ankit Metal & Power Ltd.
|BSE: 532870||Sector: Metals & Mining|
|NSE: ANKITMETAL||ISIN Code: INE106I01010|
|BSE LIVE 13:58 | 25 Apr||1.82||
|NSE 15:06 | 25 Apr||1.80||
|Mkt Cap.(Rs cr)||25.68|
|Mkt Cap.(Rs cr)||25.68|
Ankit Metal & Power Ltd. (ANKITMETAL) - Director Report
Company director report
The Directors are pleased to present the 14th Annual Report of the Company togetherwith Audited Accounts for the financial year ended 31st March 2016.
(Rs. in Lacs)
FINANCIAL AND OPERATIONAL REVIEW
During the year under review the Company has achieved Net Sales/Income from Operationof Rs. 96140.85 Lacs as against Rs. 114769.22 Lacs in previous year registering adecline of 16.23%. The Company incurred a net loss of Rs. 35720.35 Lacs as against Rs.19328.41 Lacs in the previous year. The decline in Sales and increase in losses aremainly attributed to depressed market for steel impacting the net realisation and margin.Slower growth in several sectors of the economy resulted into weaker domestic demand. Onthe other hand rising inflation in the country resulted in increase in the cost of rawmaterials and other overheads which could not be passed on to the consumers.
The plant has been put under suspension of work since February 2016 mainly on accountof (i)Depressed domestic and global market conditions in Steel Industry causing huge andunbearable losses to the Company; (ii)Exhaustion of water supply sources. Water is acritical element in Steel Industry and (iii) Excess manpower causing high operating costs.
State Bank of India the leader of Consortium of Lenders Banks in the meeting of JointLenders Forum (JLF) decided to invoke the Strategic Debt Restructruing (SDR) against theCompany w.e.f. 16th December 2015. The scheme however has not been implemented so far.
TRANSFER TO RESERVE
Since the Company has incurred losses during the year no amount has been transferredto Reserves.
In view of the losses incurred by the Company the Directors of the Company do notrecommend any dividend for the financial year 2015-16.
The Board met fourteen (14) times during the year the details of which are given inthe Corporate Governance Report that forms part of this Annual Report. The intervening gapbetween the meetings was within the period prescribed under the Companies Act 2013 andthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
CHANGES IN SHARE CAPITAL
To accommodate the allotment of equity shares consequent to Preferential Issue theBoard has increased the Authorised Share Capital from Rs. 1222500000 to Rs.1412000000. The Capital clause of the Memorandum of Association of the Company wasamended accordingly.
The Board of Directors in their meeting held on 30th September 2015 has converted theunsecured loan of Rs. 38.07 crores into equity by issuing 19035000 equity shares of Rs.10 each at a premium of Rs. 10 per share on preferential basis to the
Promoters & the entity belonging to Promoter group in terms of the approvalreceived from the shareholders through Postal Ballot and the results announced on 22ndJuly 2015.
In accordance with the provisions of the Companies Act 2013 Mr. Suresh Kumar Patni(DIN: 00032674) retires by rotation and being eligible offers himself for re-appointment.
During the year Mr. Ankit Patni (DIN: 00034907) Managing Director of the Company hasresigned from the directorship of the Company w.e.f. 22nd August 2015.
During the year Mr. Ramesh Seemakurti (DIN: 00096163) Non-Executive Director of theCompany has resigned from the directorship of the Company w.e.f. 14th November 2015.
Pursuant to the provisions of section 161 of the Companies Act 2013 read with therelevant provisions in the Articles of Association Mr. Ankit Patni (DIN: 00034907) wasappointed as an Additional Director (Non-Executive Promoter) by the Board of Directors ofthe Company w.e.f. 15th December 2015 to hold office up to the date of ensuing AnnualGeneral Meeting. The Company has received a notice in writing from a member proposing hiscandidature for the office of NonExecutive Promoter Director.
Pursuant to the provisions of section 196 197 198 203 of the Companies Act 2013read with Schedule V Mr. Sanjay Singh (DIN: 00531906) Executive Director whose tenureexpired on 23rd August 2015 was re-appointed for a further period of three (3) yearsfrom 24th August 2015 to 23rd August 2018.
KEY MANAGERIAL PERSONNEL
Company Secretary & Compliance Officer
Mr. Nikhil Deora (PAN: BDZPD9721N) Company Secretary and Compliance Officer of theCompany had resigned from the post w.e.f. 30th September 2015.
Consequent to Mr. Nikhil Deora's resignation the Board had appointed Mr. AyanChakraborty (PAN: AOPPC8237G) as the Company Secretary and Compliance Officer of theCompany w.e.f. 8th October 2015. However Mr. Ayan Chakraborty had resigned from the postw.e.f. 26th November 2015.
The post of Company Secretary and Compliance Officer is yet to be filed.
Chief Financial Officer
Mr. Anand Jain (PAN: AFVPJ5630D) Chief Financial Officer of the Company had resignedfrom the post w.e.f. 12th September 2015.
Consequent to Mr. Anand Jain's resignation Mr. Raj Kumar Agarwal (PAN: ACRPA8105D)was appointed as Chief Financial Officer of the Company w.e.f. 12th September 2015.However he resigned from the services of the Company w.e.f. 24th March 2016.
Mr. Saurabh Jhunjhunwala has been appointed as Chief Financial Officer to fill thevacancy created by resignation of Mr. Raj Kumar Agarwal w.e.f. 23rd May 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 2016.
Accordingly pursuant to section 134(5) of the Companies Act 2013 the Board ofDirectors to the best of their knowledge and ability confirm:
a) that in the preparation of the annual accounts the applicable Accounting Standardshave been followed along with proper explanation relating to material departures;
b) that we have selected such accounting policies and applied them consistently andmade judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;
c) 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;
d) that the annual accounts have been prepared on a "going concern" basis;
e) that proper internal financial controls were laid down and that such internalfinancial controls are adequate and were operating effectively and
f) that proper systems to ensure compliance with the provisions of all applicable lawswere in place and that such systems were adequate and operating effectively.
The Company's credit rating for Long-Term and Short-Term debts/facilities is D as ratedby ICRA Limited.
SALE OF INVESTMENT
The Company has entered into a Joint Venture with Impex Ferro Tech Ltd. and formed SKPMining Pvt. Ltd. on 16th January 2015. Since the purpose for which the Company wasformed could not be materialsed the Company decided to exist from the same and thus hasdisposed off its holding in the Company on 30th June 2015.
DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES
Consequent upon the sale of investment in SKP Mining Pvt. Ltd. the Joint Venture withwith SKP Mining Pvt. Ltd. no more exists.
EXTRACT OF ANNUAL RETURN
The details of the extract of the Annual Return in Form MGT-9 is annexed herewith andforms 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.
At the 12th Annual General Meeting (AGM) of the Company held on 26th September 2014M/s. R. Kothari & Company (FRN: 307069E) Chartered Accountants were appointed asStatutory Auditor of the Company to hold office for a term of five (5) years from theconclusion of 12th AGM (subject to ratification of such appointment by the members atevery AGM) till the conclusion of the 17th AGM of the Company. Accordingly theappointment of M/s. R. Kothari & Company (FRN: 307069E) Chartered Accountants asStatutory Auditor of the Company is placed for ratification by the members. The Companyhas received a confirmation from M/s. R. Kothari & Company Chartered Accountants tothis effect that their appointment if ratified would be within the limits prescribedunder section 139 of the Companies Act 2013 and the rules framed thereunder and inaccordance with section 141 of the Companies Act 2013. They have also confirmed that theyhold a valid peer review certificate as prescribed under Regulation 33(d) of the SEBI(Listing Obligations & disclosure Requirements) Regulations 2015. The Audit Committeeand the Board of Directors of the Company recommend ratification of their appointment fromthe conclusion of this AGM upto the conclusion of the 17th AGM of the Company.
STATUTORY AUDITOR'S OBSERVATION
There are no qualifications or adverse remarks in the Auditor's Report which requireany clarification/explanation. The notes to accounts referred to in the Auditor's Reportare self-explanatory and therefore do not call for any further comments/explanations.
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 Rs. 35000 plus applicable taxes andre-imbursement of out of pocket expenses incurred by them to conduct an audit of the costaccounting records maintained by the Company for the current financial year beginning from1st April 2016 and ending on 31st March 2017.
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.
SECRETARIAL AUDIT REPORT
In terms of section 204 of the Companies Act 2013 and rules made there under M/s. A J& Associates Practicing Company Secretary have been appointed as Secretarial Auditorof the Company. The report of the Secretarial Auditor in Form MR-3 is enclosed asAnnexure-II to this report.
SECRETARIAL AUDITOR'S OBSERVATION
The Secretarial Auditor has the following observations in Form MR-3 enclosed asAnnexure II.
i. Form MGT-14 for Appointment of Internal Auditor under section 138 for the year2015-16 is yet to be filed.
ii. Amount remaining in Unclaimed Dividend Account due for transfer during 2015-16 isnot made.
iii. The position of a Company Secretary being KMP under section 203 of the CompaniesAct 2013 vacant since 26th November 2015 is yet to be appointed.
iv. It was noted that the Company has complied the Secretarial Standards issued by theICSI to a large extent; however the stricter implementation of the Secretarial Standardsis yet to be observed by the Company.
v. It has been observed that the Company has defaulted in the payment of statutory dueswithin the prescribed time.
vi. There have been some instances where the Forms were filed with some delay therebypaying the additional fees. Our Comments are as under:
i. Owing to technical glitches at MCA Portal throughout the last year the filing wasfailing at many times. This led to confusion at our end and the Form was not filed stepswill be taken to file the same.
ii. We could not deposit the amounts as the Form-1INV is not available at the MCAPortal. The amount of unpaid dividend is lying with IDBI Bank and would be transferred tothe IEPF account immediately on availability of Form.
iii. Due to the deteriorating financial conditions of the Company we are not gettngproper response from the incumbents. However continued efforts are made for suchappointment at the earliest.
iv. The Secretarial Standards were issued in the last year only we are trying ourlevel best to implement these in entirety in the near future.
v. Statutory payments were delayed mainly because of poor liquidity 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. N R & Associates Cost Accountants (FRN: 102903) as InternalAuditor of the Company for the financial year 2016-17 at a remuneration fixed by the Boardof Directors 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 procedure 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.
DETAILS RELATING TO REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL AND EMPLOYEES
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 forms part of theDirectors' 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 asAnnexure IV.
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 as'Code of Conduct for Regulating Monitoring and Reporting of Trading by Insiders' which isalso 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 AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THEREPORT
The Company has become a Sick Industrial Company as per section 3(o) of the SickIndustrial Companies (Special Provisions) Act 1985 as the accumulated losses of theCompany at the end of financial year 31st March 2016 exceeded its entire net worth as perthe Audited Financial Statement as on 31st March 2016. The Company will make necessaryreference to the Board for Industrial and Financial Reconstruction (BIFR) under section 15of the Sick Industrial Companies (Special Provisions) Act 1985.
As per Companies (Indian Accounting Standard) (Ind AS) every listed Company andtheir holding and subsidiary companies (other than banking companies insurance companiesand non-banking financial companies) are required to comply with Ind AS in the preparationof their financial statements for accounting periods beginning on or after April 2016with the comparatives for the periods ending 31st March 2016. Accordingly the Companyhas adopted Ind AS w.e.f. 1st April 2016. The Company has devised a suitableimplementation plan for adoption of Ind AS.
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/transacti'ons 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(Annexure V) 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 a part ofthe Corporate 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 year2015-16.
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.
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.
CORPORATE SOCIAL RESPONSIBILITY
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.
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/CFO certification has beensubmitted to the Board and forms an integral part of this Annual Report.
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 organisation.
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: