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CIAN Agro Industries & Infrastructure Ltd.

BSE: 519477 Sector: Industrials
NSE: N.A. ISIN Code: INE052V01019
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CIAN Agro Industries & Infrastructure Ltd. (CIANAGRO) - Director Report

Company director report

To

The Members

Your Directors hereby present their Twenty Eighth Annual Report on the business andoperations of the Company and financial statements for the year ended March 312015.

FINANCIAL PERFORMANCE/ OPERATIONS: (Rs. In Lacs
Financial Results Year ended on 31-Mar-2015 Year ended on 31-Mar-2014
Sales Turnover 257.66 1152.86
Job Work/Other Income 122.44 510.64
Total Income 380.10 1663.50
Profit Before Interest Depreciation and Tax (PBIDT) (423.23) 93.35
Interest & Financial Expenses 74.85 177.26
Depreciation 64.18 69.93
Profit /(Loss) Before Tax (562.26) (153.84)
Profit /(Loss) After Tax (562.26) (153.84)
Profit / (Loss) brought forward (2145.91) (1992.07)
Profit / (Loss) carried forward (2708.17) (2145.91)

DIVIDEND

For the year ended on 31st March 2015 in the view of the losses the Directors regrettheir inability to recommend any dividend.

OPERATIONS OF THE COMPANY

There were no own processing operations during the year 2014-15. Only the residualactivities under job work were carried out. The Company recorded a Total Income of Rs.380.10 lacs. During the year the Company incurred Net Loss of Rs. 562.26 lacs. The priorperiod items/ major loss have been due to crystallisation of Sales Tax liabilitypertaining to the period prior to year 2005.

CHANGE IN NATURE OF BUSINESS

During the year under review there was no change in the nature of the business of theCompany. However the Board of Directors proposes to undertake various businessinitiatives in near future in addition to the existing business activities.

REVISION OF FINANCIAL STATEMENT

During year under review there has been no revision of financial statement in therelevant financial year.

MATERIAL EVENTS OCCURRING AFTER BALANCE SHEET DATE

a. The Company has applied for change of Name and ROC has no objection for availabilityof changed name from Umred Agro Complex Limited to Cian Agro Industries and InfrastructureLimited.

b. Mr. Uday Kamat Managing Director of the Company had tendered his resigned w.e.f.31/07/2015.

SUBSIDIARIES JOINT VENTURES OR ASSOCIATE COMPANIES

The Company do not have subsidiaries joint ventures or associate Companies.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has in place adequate internal control systems and procedures commensuratewith the size and nature of business. These procedures are designed to ensure:

a) that all assets and resources are used efficiently and are adequately protected;

b) that all the internal policies and statutory guidelines are complied with; and

c) the accuracy and timing of financial reports and management information ismaintained.

REHABILITATION STATUS

Pursuant to review hearing held in May 2014 and the directives of Hon’ble BIFR tocome up with Net Worth positive position the Company took the following steps:

1. The Company opted for Government of Maharashtra’s Special Amnesty Scheme 2013and sought relief and concessions against the Outstanding Dues (Contingent/ Crystallized)of Sales Tax Department.

2. The Company tied up with the Strategic Alliance Partner under MRS-2004 for thefinancial assistance for settlement of entire Sales Tax dues under the Special AmnestyScheme 2013 and for negotiated settlement of outstanding dues of Secured Creditors.

3. In view of future business plans and need felt to further increase the AuthorisedShare Capital to Rs.30 Crores the Company has taken necessary steps.

4. Subject to the necessary approvals from Hon’ble BIFR SEBI Stock Exchangesand other appropriate authorities the conversion of the unsecured loans into equityshares on preferential basis shall be made to achieve Net Worth positive position.Accordingly the Company plans to submit a proposal to Hon’ble BIFR towardscompliance of their directives.

SETTLEMENTS

During the year under review with financial assistance from the Strategic AlliancePartners the Company took steps for settlement of the outstanding dues of securedcreditors namely M/s Cargill India Pvt. Ltd. (Cargill) and Tirupati Urban Co-operativeBank Ltd. Nagpur (Tirupati Bank). It entered into negotiated settlement for outstandingdues of Cargill. The payment under the said settlement is under progress. The Company hasalso submitted a settlement proposal to Tirupati Bank which is under their consideration.

TRANSFER TO RESERVES

The Company has not transferred any amount to the general reserve account during thereporting period.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Loans guarantees and investments covered under Section 186 of the Companies Act 2013form part of the notes to the financial statements provided in this Annual Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

Particulars of contracts or arrangements with related parties referred to in Section188(1) of the Companies Act 2013 in the prescribed Form AOC-2 is appended as Annexure Ato the Board’s report. The Company has proposed requisite resolutions for approval ofmembers at the AGM.

NAME CHANGE

The management of the Company in order to reflect the proposed business activitiesintends to change the name of the Company from M/s Umred Agro Complex Limited to M/s CianAgro Industries & Infrastructure Limited.

INSURANCE:

Fixed and Current Assets of the Company are adequately insured.

OUTLOOK FOR NEW SEASON

With financial assistance from the Strategic Alliance Partners the Company plans toadd balancing equipment in the Solvent Extraction Plant augment Refinery capacity to 100TPD and is hopeful of commencing the processing operations during the oil season 2015-16.

DIRECTOR’S RETIRING BY ROTATION

In terms of Articles of Association of the Company and as per Section 152(6) of theCompanies Act 2013 provides that 2/3rd of the Board of Directors is considered to beDirectors liable to retire by rotation of which 1 /3rd shall retire at every AnnualGeneral Meeting of the Company as per Section 152(6) (e) of the Companies Act 2013 andthe Company shall have an option to re-appoint the retiring Director or appoint someoneelse in his place.

This year Shri Ravindra Boratkar (DIN 00299351) shall retire by rotation and beingeligible offers himself for re-appointment at this Annual General Meeting. The Board ofDirectors recommends his re-appointment for consideration of the Shareholders.

The brief resume and other details relating to Shri Ravindra Boratkar (DIN 00299351)who is proposed to be re-appointed as required to be disclosed under Clause 49 of theListing Agreement is incorporated in the annexure to the notice calling 28th AnnualGeneral Meeting of the Company.

DIRECTOR’S APPOINTMENT

Shri Anandrao Raut (DIN 01936684) AND Smt Gouri Chandrayan (DIN 07143914) wereappointed as Additional Directors by the Board of Directors w.e.f. March 30 2015 inaccordance with the provisions of Section 161 of the Companies Act 2013 and of Article ofAssociation of the Company. Pursuant to Section 161 of the Companies Act 2013 the aboveDirectors hold office up to the date of this 28th Annual General Meeting. The Company hasreceived request in writing from said Directors pursuant to Section 160 of the CompaniesAct 2013 proposing the their candidature for appointment as Non-Executive IndependentDirectors of the Company.

DIRECTOR’S CESSATION

Shri Uday Kamat (DIN No.: 00223578) Managing Director and Shri Surendra Mishra (DIN.02336019) Independent Director of the Company resigned with effect from July 312015 andMarch 24 2015 respectively. The Board of Directors wishes to place on record its sincereappreciation and gratitude for the valuable contribution and leadership received from thesaid Directors during their long association with the Company.

MANAGEMENT’S DISCUSSION AND ANALYSIS

In terms of the provisions of Clause 52 of the Listing Agreement the Management’sdiscussion and analysis is set out in this Annual Report as Annexure B to the Board’sreport.

EVALUATION OF BOARD’S PERFORMANCE

In compliance with the provisions of the Companies Act 2013 and Clause 49 of theListing Agreement entered with the Stock Exchange/s the performance evaluation of theBoard was carried out during the year under review.

BOARD MEETINGS

Details about Board Meetings held during the Financial Year 2014 - 15 are given in theCorporate Governance Report which forms an integral part of this report.

DECLARATION BY INDEPENDENT DIRECTORS

The Independent Directors have confirmed that they meet the criteria of‘Independence’ as stipulated under Section 149(6) of the Companies Act 2013 andClause 49 of the Listing Agreement/s with the Stock Exchanges.

KEY MANAGERIAL PERSONNEL:

Pursuant to the Section 203 of the Companies Act 2013 read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 and other applicableprovisions and rules of the Companies Act 2013 the following existing executives of theCompany were designated as the Key Managerial Personnel of the Company by the Board interm of 2(51) of the Companies Act 2013.

a) Shri Arvind Bakde Whole Time Director (WTD)

b) Shri Suneet Pande Chief Executive Officer(CEO) with effect from May 25 2015

c) Shri Nitin Bedekar Chief Financial Officer(CFO) with effect from March 30 2015.

d) Ms Purva Joshi Company Secretary (CS) with effect from May 25 2015

DIRECTORS’ RESPONSIBILITY STATEMENT:

The Directors’ Responsibility Statement referred to in clause (c) of sub-section(3) of Section 134 of the Companies Act 2013 shall state that

(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(b) The directors had selected such accounting policies and applied them consistentlyand made judgments 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) The directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

(d) The directors had prepared the annual accounts on a going concern basis and

(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 provisionsof all applicable laws and that such systems were adequate and operating effectively.

BOARD MEETINGS

During the year under review 6 Board Meetings were held and the intervening gapbetween the meetings did not exceed the period prescribed under the Act the details ofwhich are given in the Corporate Governance Report.

SHARE CAPITAL

As at March 312015 the Authorised Share Capital of the Company was Rs. 20.00 Croresand the paid-up Equity Share Capital stood at Rs. 8.08 Crores. During the year underreview the Company has not issued shares with differential voting rights nor has grantedany stock options or sweat equity shares. The Board of Directors in their meeting held onSeptember 5 2015 have considered and recommends to increase the Authorised Share Capitalof the Company from Rs 20 Crores to Rs 30 Crores.

LISTING OF SHARES

During the year the Shares of the Company continued to be listed on The Bombay StockExchange Limited Mumbai under Scrip Code No. 519477. The Company’s trading ofsecurity on Stock Exchange was suspended due to certain non-compliance. However theCompany has from time to time complied with requirements under Listing Agreement.

COMMITTEES

The Company has total four Committees namely Audit Committee Stakeholders RelationshipCommittee and Nomination and Remuneration Committee. The details of which are given in theCorporate Governance Report which forms an integral part of this report.

CORPORATE GOVERNANCE CERTIFICATE

Your Company is committed to achieve the highest standards of Corporate Governance. Aseparate statement on corporate governance is enclosed as a part of the Annual Reportalong with the Auditor’s Certificate on its compliance as Annexure C to theBoard’s report..

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO.

With respect to Particulars of Energy Conservation Technology Absorption and ForeignExchange Earnings and Outgo required under the Companies (Accounts) Rules 2014 due to noOwn Processing operations and only the residual Job Work activities in the solventextraction plant the Conservation of energy and Technology absorption are not applicable.A separate statement of Particulars of Energy Conservation Technology Absorption andForeign Exchange Earnings and Outgo as Annexure D to the Board’s report..

(a) Conservation of Energy: Not Applicable

(b) Technology Absorption: Not Applicable

(c) Foreign Exchange Earnings and Outgo: NIL

PARTICULARS OF EMPLOYEES

In respect of particulars of employees pursuant to Section 196 & 197 of theCompanies Act 2013 read with Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 there were no employees employed throughout the yearand were in receipt of remuneration over the maximum limit prescribed under thesesections.

HUMAN RESOURCES

The company has adapted good practices to retain encourage and develop skills of allthe employees of the company. During the year in view of the financial hardship anddifficult business situation to ensure safety of its personnel & assets the Companyafter the necessary legal compliances has declared a Lockout w.e.f. September 5 2014..

OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013

In order to prevent sexual harassment of women at work place a new act The SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 hasbeen n otified on 9th December 2013.

During the year under review the Company had no woman employee.

EXTRACT OFANNUAL RETURN

As required pursuant to Section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in FormMGT-9 as a part of this Annual Report as "Annexure E"

CASH FLOW STATEMENT

The Cash flow statement for the year ended March 312015 is attached to the BalanceSheet.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

In pursuant to the provisions of Section 177(9) & (10) of the Companies Act 2013a Vigil Mechanism/ Whistle Blower Policy has been established by the Company to provideappropriate avenues to the employees to bring to the attention of the Management any issuewhich is perceived to be in violation of or in conflict with the fundamental businessprinciples of the Company.

RISK MANAGEMENT POLICY AND REPORT

Your company has taken adequate measures to mitigate various risks impacting theCompany which includes the identification of various risk elements and steps formitigation of the same.

AUDITORS

M/s Anil Mardikar & Company Chartered Accountants Auditors of the Company retireat ensuing Annual General Meeting. The Company has received a letter from the Auditorsexpressing their desire to discontinue as Statutory Auditors of the Company.

Pursuant to the provisions of Section 139 and other applicable provisions of theCompanies Act 2013 Board of Directors has recommended to appoint M/s. R. P. Kendurkar& Co. Chartered Accountants Nagpur (Firm Registration No.181071W) as the StatutoryAuditors of the Company in place of M/s. Anil Mardikar & Co. Chartered AccountantsNagpur who wish to discontinue.

COMMENTS ON THE AUDITORS’ REPORT

About the observations made in the Auditors’ Report and Annexure thereto in theopinion of the management the Company is consistent in its policy regarding treatment ofretirement benefits.

Emphasis of Matter:

With regard to the above Company’s comments are as under:

A. 1. The Company has taken a view of writing off/ writing back the amounts whereinthere were no transactions / communications for over three ( 3 ) years.

2. The Company has written back the amounts in respect of Cargill & MSEDCL on thebasis of formal negotiated settlements with the said parties.

3. The Company has availed benefits under the Special Amnesty Scheme 2013 of the StateGovernment wherein the pending/ contingent Sales Tax dues were crystallized settled andpaid during the year and the principal amount was debited to extraordinary items.

B. Pursuant to the directives of Hon’ble BIFR the Company with financialassistance from the Strategic Alliance Partners has taken steps including infusion offunds to achieve the Net Worth Positive Position. The Company is consistent in its policyregarding going concern concept.

C. The Depreciation is calculated as per the Companies Act 1956 as permitted videNotification dtd. August 29 2014.

D. The Statutory Dues viz TDS ESIC Provident Fund Professional Tax have since beenpaid.

COST AUDIT

As per notification issued by Minister of Corporate Affair (MCA) dated December312014 Cost Audit is not applicable to the Company for the FY 2014-15.

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s V.R. Khemuka & Associates Practicing Company Secretaries Nagpur toundertake the Secretarial Audit of the Company. The report of the Secretarial Auditors isenclosed as "Annexure F" to this report.

COMMENTS ON THE SECRETARIAL AUDIT REPORT

About the observations made in the Secretarial Auditor’s Report and Annexurethereto the management's comments are as under:

The Company is registered with Hon'ble BIFR as a sick industrial company and has beenunder severe financial stress. The Company had appointed a Company Secretary on aretainership basis during the year 2014-15. We have also engaged the services of aPracticing Company Secretary.

In view of various provisions as amended in the Company's Act 2013 and other relatedregulations the Company has tried to comply with various provisions. However as informedin the Secretarial Audit Report certain non-compliances have been reported. The Companyhas now appointed a full time Company Secretary and is in a process of regularizing thenon compliances.

The Composition of the Board of Directors of the Company not being in compliance withClause 49 (II) of the listing agreement it may be noted that the Company is in process ofrestructuring its Board and has appointed a Woman Director. It shall take steps to broadbase the Board of Directors as per the statutory requirement.

ENCLOSURES

a) Annex-A: Disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub-section.

b) Annex-B : Management Discussion and Analysis Report.

c) Annex-C : Energy Conservation Technology Absorption and Foreign Exchanges Earningsand Outgo.

d) Annex-D : Report on Corporate Governance.

e) Annex - E: Extract of Annual Return as of 31st March 2015 in the prescribed FormMGT-9.

f) Annex - F: Secretarial Auditors Report.

APPRECIATION & ACKNOWLEDGEMENT

The Directors acknowledge with thanks co-operation and unstinted support andco-operation received from the Hon’ble BIFR ICICI Bank Ltd. Tirupati UrbanCo-operative Bank Ltd. Strategic Alliance Partners (MNP Group & PURTI Group)Cargill suppliers customers shareholders and employees of the Company during the yearunder review. The Directors also record their appreciation of the dedication of all theemployees of the Company

Place: Nagpur Date: September 5 2015 For and on behalf of the Board
Dr. S. G. Parate
CHAIRMAN

Annexure A: forming part of Director’s report Form No. AOC-2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014) Form for disclosure of particulars ofcontracts/arrangements entered into by the company with related parties referred to insub-section (1) of Section 188 of the Companies Act 2013 including certain arm’slength transactions under third proviso thereto.

1. Details of contracts or arrangements or transactions not at arm’s length basisUmred Agro Complex Limited has not entered into any contracts or arrangements ortransactions with its related parties which are not at arm’s length during FinancialYear 2014 - 15.

2. Details of material contracts or arrangement or transactions at arm’s lengthbasis

(a) Name(s) of the related party and nature of relationship:

• Indian Subsidiaries : NIL

• Overseas Subsidiaries : NIL

• Associates : NIL

• Sole Proprietary Firm : NIL

(b) Nature of contracts/arrangements/transactions

1. Sale or supply of any goods materials

2. Purchase or otherwise buying materials /property of any kind

3. Loan (with Interest)

4. Technical Consultancy Fees

(c) Duration of the contracts / arrangements/transactions.

(d) Salient terms of the contracts or arrangements or transactions including the valueif any: Based on transfer pricing guidelines.

(e) Date(s) of approval by the Board if any: Not applicable since the contract wasentered in the ordinary course of business and on arm’s length basis.

(f) Amount paid as advances if any: NIL

Annexure B: forming part of Director’s report

MANAGEMENT DISCUSSION AND ANALYSIS

Company Background

The Company is engaged in the processing of Soybean/ other oilseeds marketing ofedible oils in domestic market and de-oiled cakes in domestic and international markets.The Company has a Solvent Extraction Plant & Refinery located at Village KolariTahsil Chimur Dist. Chandrapur (Maharashtra). The Company is registered with the Boardfor Industrial and Financial Reconstruction (BIFR Case No. 85/1997). Hon’ble BIFR hasadvised the Company to take urgent steps to achieve Net Worth positive position and seekdischarge from the preview of SICA.

Industry Structure and Developments

While India has become the largest importer of edible oils in the world the domesticedible oil industry plays a pivotal role by way of value addition and saving of preciousforeign exchange. While with export of Soy meal it contributes to the foreign exchequerhowever off late these exports have been steadily declining. With huge consumer market tocater to big / multinationals corporations have entered and the industry structure is influx.

Opportunities and Threats

A fast growing economy and demand for Non-GMO grade Lecithin has opened a hugeopportunity for Indian Soybean processors including your Company. However the industryoutlook largely depends on adequate & timely monsoon conducive Govt. policy andfavourable export market for Soy meal.

Risks and Concerns

Faced with the vagaries of monsoon this agro-based industry has to tackle theuncertainties of raw material availability low capacity utilization and volatileinternational prices of edible oils & Soy meal.

Internal Audit Adequacy

The Company’s Internal Audit Section operates under the guidance of a qualifiedChartered Accountant on retainership basis to ensure internal checks and balances infinance and accounting aspects.

Financial Review

This aspect is dealt with in the beginning of this report. However the Companycontinues to be a sick industrial unit registered with BIFR with accumulated losses ofRs. 2704 Lacs as at March 312015.

Human Resources Relations

During the year in view of the financial hardship and difficult business situation toensure safety of its personnel & assets the Company after the necessary legalcompliances has declared a Lockout w.e.f. September 5 2014. The employee strength as onMarch 312015 was 49.

Forward Looking Statement-Cautionary Statement

Forward-looking statements in the ‘Management Discussion and Analysis’section are based on certain assumptions/ expectations of future events and are stated asrequired by applicable laws and regulations. Actual results could differ materially fromthose expressed or implied. Major factors that could make the difference to theCompany’s operations could be agro-climatic conditions government policy domestic& international market conditions and such other factors which are beyond control ofthe management.

Annexure C : Forming Part of the Director’s Report

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information as required under Section 134(3) (m) of the Companies Act 2013 read withRule 8(3) of the Companies (Accounts) Rules 2014.

With respect to Particulars of Energy Conservation Technology Absorption and ForeignExchange Earnings and Outgo required under the Companies (Accounts) Rules 2014 due to noOwn Processing operations and only the residual Job Work activities in the solventextraction plant the Conservation of energy and Technology absorption are not applicable.On the other hand there was no for Foreign Exchange Earnings and Outgo.

(a) Conservation of Energy: Not Applicable

(b) Technology Absorption: Not Applicable

(c) Foreign Exchange Earnings and Outgo: NIL

For and on behalf of the Board
Place: Nagpur Dr. S. G. Parate
Date: 5th September 2015 CHAIRMAN

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