Your Directors' hereby present the Twenty Eighth
Annual Report on the business and operations of the Company together with the AuditedStatements of Accounts and the Auditors' Report for the period ended 31st March 2016.
|Financial Highlights: || ||(Rs. Million) |
|Particulars ||Current year ||Previous year |
| ||2015 - 2016* ||2014 - 2015 |
|Revenue from Operations ||-- ||-- |
|Other Income ||22.25 ||130.43 |
|Total Revenue ||22.25 ||130.43 |
|Profit/ (loss) before financial ||(8.19) ||102.82 |
|Expenses Depreciation || || |
|Financial Expenses ||0.11 ||0.13 |
|Depreciation ||5.54 ||8.55 |
|Profit/ (Loss) before Tax ||(13.83) ||111.50 |
|Profit/ (Loss) after Tax and prior period ||(13.83) ||111.50 |
|Adjustment || || |
*Current year comprises of 9 months.
In view of the accumulated losses no dividend is being recommended for the currentyear.
Results of Operations:
As already communicated to the shareholders during the previous annual generalmeetings the operations of the Company are closed since July 2013 due to financialcrisis. The Company ceased to be Sick Industrial Company vide BIFR order no. MA.NO.135/BC/2015 dated 8th June
2015 as the net worth turned positive as on 31st December 2014. The Company hadobtained the shareholders' approval for sale of substantially the whole of assets bypassing a special resolution through postal ballot on 17th March 2016 as per theprovisions of Section 180(1)(a) read with Section 110 and other applicable provisions ifany of the Companies Act 2013. Thereafter the Company entered into an Asset PurchaseAgreement (APA) with Sagar Asia
Private Limited for the sale of Land & Building and other substantially whole ofassets lying in the factory at Survey No. 379 to 382 Kallakal Village ToopranMandalMedak District Telangana 502336. Due to this event which has occurred after thebalance sheet date the Company ceases to have going concern assumption and thereforeall assets and liabilities of the Company have been revalued at Net Realisable Value on31st March 2016. Further during the year the Company has settled all the pending issueswith the workmen by entering into mutual agreements and has paid all the amounts payableto workmen by 29th June 2016.
Extension of Annual General Meeting:
For the reasons already mentioned under the heading Results ofOperations' theBoard felt that some more time will be required to conclude the above said matters andhold the Annual General Meeting smoothly. Hence the Board requested the Registrar ofCompanies Andhra Pradesh and Telangana for 3 months extension for conducting the AGM. TheRegistrar of Companies Andhra Pradesh and Telangana has extended the time for holdingmeeting up to 31 December 2016 vide letter dated 11.08.2016.
Mr. Hans Schweers who has beenlongest in the office will retire at the ensuing AnnualGeneral Meeting and being eligible offer himself for reappointment.
The Board of Directors of the Company has decided to adopt the provisions with respectto appointment and tenure ofIndependent Directors which is consistent with the CompaniesAct 2013 and the amended Listing Agreement. Accordingly the Independent Directors willserve for not more than two terms of five years each on the Board of the Company.
The Board of Directors of the Company based on the recommendations of the Nominationand Remuneration Committee at its meeting held on 14th November 2016subject to theapproval of Members has appointed Mr. AnandBharti as Whole Time Director for a period ofone year ending on 31st December 2017.
Directors' Responsibility Statement:
As required under Section 134(5) of the Companies Act 2013 the Directors herebyconfirm that: (i) in the preparation of the annual accounts the applicable accountingstandards have been followed and there are no material departures from the same; (ii) suchaccounting policies have been selected and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company as at 31st March 2016 and of the profit or loss of theCompany for that period: (iii) proper and sufficient care has been taken for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act for safeguarding the assets of the Company and for preventing a n d d e t ec t i n g f ra u d s a n d o t h e r irregularities; and (iv) The annual accounts have notbeen prepared on a going concern basis because the Company has sold Land & Buildingand other substantially whole of Assets.
(v) the Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and (vi) The Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
M/s Laxminiwas& Jain Chartered Accountants Auditors of the Company retire at theensuing Annual General Meeting and being eligible offer themselves for reappointment.
Auditors' Qualifications and Management's Reply:
1. Matter of Emphasis
1. Note No. 2.24 the Company has entered into an Asset Purchase Agreement (APA)with Sagar Asia Private Limited for the sale of substantially the whole assets of theCompany on lump sum consideration of Rs. 84 millions on 26th May 2016. Due to this eventwhich has occurred after the balance sheet date the Company ceases to have going concernassumption and therefore all assets and liabilities of the Company have been revalued atNet Realisable Value as on 31st March 2016. Following adjustments to assets andliabilities are made: a. increase in Fixed Assets amounting to Rs. 42379807 has beentransferred to
Revaluation Reserve ; b. decrease in other assets amounting to Rs. 238365 has beencharged to profit and loss account ; c. following liabilities have been written back andcredited to profit and loss account: i. an amount of Rs.1668604 payable to creditors forwhich confirmations are awaited. ii. an amount of Rs.3914945 payable to customers forwhich confirmations are awaited. iii. an amount of Rs.105903 payable to employees as perfull and final settlements. iv. an amount of Rs. 3015288 towards provision of MAT.
The Company has entered into an Asset Purchase Agreement (APA) with Sagar Asia PrivateLimited for the sale of substantially the whole assets of the Company on lump sumconsideration of Rs. 84 millions on 26th May 2016 after obtaining necessary approvalsfrom the shareholders'. Consequent to such sale the Company ceases to have going concernassumption and therefore all assets and liabilities of the Company have been revalued atNet Realisable Value as on 31st March 2016 in line with applicable accounting standards.
2. Note No. 2.25(h) the Company has settled all the pending issues with theworkmen by entering into mutual agreements is in the process of filing an applicationbefore Hon'ble High Court of Telangana and Andhra Pradesh for withdrawal of case filed byit in connection with closure of unit.
During the year the Company has settled all the pending issues with the workmen byentering into mutual agreements with them. The Company has also paid all the amountspayable to workmen and therefore there are no pending issues with any workmen nor areany dues payable to any workmen.
As the production of the company is closed since July 2013 the Company has notappointed the Cost Auditor for year 2015-2016.
As prescribed by Securities and Exchange Board of India (SEBI) a Practicing CompanySecretary carries out Secretarial Audit at the end of every quarter and the report isregularly submitted to the Bombay Stock Exchange.
However as required under the Companies Act 2013 the Company has appointed Mr.P.Venkata Narayana Practicing Company Secretary as Secretarial Auditor for the year2015-2016 and his report is annexed to Directors Report as Annexure III.
Declaration by independent directors :
The Company has received declaration from independent directors of the Companyconfirming that they meet the criteria of independence as prescribed both under theCompanies Act 2013 and SEBI (LODR) Regulations 2015.
Pursuant to the provisions of the Companies Act 2013 and SEBI (LODR) Regulations2015 Independent Directors at their meeting held on 30th May 2016 without theparticipation of the Non-independent Directors and Management considered/evaluated theBoards' performance Performance of the Chairman and other Non-independent Directors. SEBI(LODR) Regulations 2015 mandates that the Board shall monitor and review the Boardevaluation framework. The Companies Act 2013 states that a formal annual evaluation needsto be made by the Board of its own performance and that of its committees and individualdirectors. Schedule IV of the Companies Act 2013 states that the performance evaluationof independent directors shall be done by the entire Board of Directors excluding thedirector being evaluated. The evaluation of all the directors and the Board as a whole wasconducted based on the criteria and framework adopted by the Board.
Policy on directors' appointment and remuneration :
The current policy is to have an appropriate combination of executive and independentdirectors to maintain the independence of the Board. As on 31stMarch 2016 the Boardconsists of 4 members one of whom is Whole Time Director one is promoter non-executivedirector and two are independent directors. The Board will annually evaluates the need forchange in its composition and size. The policy of the Company on directors' appointmentand remuneration including criteria for determining qualifications positive attributesindependence of a director and other matters provided under Section 178(3) of theCompanies Act 2013 adopted by the Board. The remuneration paid to the directors is asper the terms laid out in the Nomination and Remuneration policy of the Company.
Risk Management and Whistle blower Policy
Pursuant to section 134(3)(n) of the Companies
Act 2013 and Section 177(9) of the Companies Act 2013 read with SEBI (LODR)Regulations 2015 the Company has to form a Risk Management and Whistle blower Policyrespectively. However as operations of the Company are closed since July 2013 it is notrequired to form any Risk Management and Whistle blower Policy.
Number of meetings of the Board :
The Board met four times during the financial year the details of which are given inthe Corporate Governance Report that forms part of this Annual Report. The intervening gapbetween any two meetings was within the period prescribed by the Companies Act 2013.
The company has not accepted deposits from public as envisaged under Sections 73 to 76of Companies Act 2013 read with Companies (Acceptance of Deposits) Rules 2014 during theyear under review.
Report on Corporate Governance Pursuant to Regulation 34 read with Schedule-V of SEBI(LODR) Regulations 2015 and Certificate on Compliance of Corporate Governance form partof this Report.
Business Responsibility Report (BRR)
Securities Exchange Board of India (SEBI) vide circular CIR/CFD/DIL/8/2012 dated August13 2012 has mandated the inclusion of BRR as part of the Annual Report for the top 100listed entities. In view of the requirements specified the company is not mandated forthe providing the BRR and hence do not form part of this Report.
Management Discussion and Analysis Report:
Management Discussion and Analysis Report as stipulated under Regulation 34(3) readwith Schedule-V of the SEBI (LODR) Regulations 2015 is presented in a separate section inthis Annual Report.