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Indo Gulf Industries Ltd.

BSE: 506945 Sector: Industrials
NSE: N.A. ISIN Code: INE684U01011
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Indo Gulf Industries Ltd. (INDOGULFINDS) - Director Report

Company director report

Dear Members

Your Directors are presenting the Thirty-third (33rd) Annual Report andAudited Financial Statements of the Company for the year ended 31st March2016.

Financial Highlights

(Amount in Rs.)

Financial Results 2015-16 2014-15
Net Sales - -
Other Income 330000 5651168
Profit before finance costs depreciation and tax (269336) 5181161
Finance costs - -
Depreciation and amortisation expense 919448 3167245
Tax expense - -
Profit/(Loss) before exceptional and extra-ordinary items (1188784) 2013916
Exceptional item - 36225000
Net Profit/(Loss) (1188784) 38238916
Add: Balance brought forward from the previous year (32163639) (70368945)
Less: Deduction on account of depreciation adjustment due to transitional provisions - 33610
Balance to be carried forward to next year’s account (33352423) (32163639)

Performance Future Outlook & Prospects

None of the Units of the Company was in operation during the year under review. TheCompany is continuing to make all feasible efforts to restart the explosive units.

The Hon ble Board for Industrial and Financial Reconstruction (BIFR) had permittedtransfer of 20% equity shares of the Company held by the Balrampur Chini Mills Ltd. aswell as induction of co-promoter/strategic investor in the Company under a Modified DraftRehabilitation Scheme (MDRS) to be approved by the Hon ble BIFR. However the Hon ble BIFRfor the first time after permitting the induction of co-promoter vide its order dated 23rdJanuary 2015 concluded that the said induction is not transparent and is inconsistentwith law. Aggrieved by the said order the Company preferred an appeal before the Hon bleAAIFR.

The Hon ble AAIFR inter alia passed following observation/direction vide its orderdated 14th September 2015:

"We are of the considered view that after having allowed induction of Mr. RajeshJain as a strategic investor for revival of the appellant sick Company the BIFRordinarily could not have reviewed its own order and rejected the said induction on thegrounds of non-transparency and inconsistency with law."

"The impugned order BIFR stands modified accordingly. The matter is remanded backto BIFR for direction to consider the MDRS filed by the appellant company in accordancewith law after hearing all the parties concerned and take a final decision on circulationof the MDRS within a period of 6 weeks."

During the year under review the Company has offered issued and allotted 250000fully paid up 0.001% Non-Convertible Non-Cumulative Redeemable Preference Shares of facevalue Rs. 100 each aggregating to Rs. 25000000 on private placement basis for cash atpar as a result of which the networth of the Company has become positive.

Your directors are confident that the Company would be able to revive its operations infuture.

Website

Pursuant to Regulation 46 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company has launched its own functional website i.e. www.indogulfind.comcontaining the requisite information about the Company.

Dividend

In view of loss suffered by the Company the Directors regret for their inability torecommend dividend for the year under review. No amount is being transferred to thereserves.

Deposits

The Company has not accepted any deposit from the public and as such there are nooutstanding deposits in terms of the Companies (Acceptance of Deposits) Rules 2014.

Directors

Pursuant to Section 149 and other applicable provisions of Companies Act 2013 yourdirectors are seeking regularisation of appointment of Ms. Preety Gupta as an IndependentDirector who was appointed as an Additional Director of the Company in the category ofIndependent Director (Women Director) w.e.f. February 05 2016. She shall hold office fora term of 1 year stating from the date of her initial appointment subject to shareholdersapproval at ensuing Annual General Meeting of the Company. Notice in writing under Section160 of the Companies Act 2013 has been received by the Company proposing her appointmentas a director of the Company.

Dr. Arvind Krishna Saxena resigned due to his other pre-occupations and ceased to be aDirector of the Company w.e.f. February 04 2016.

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed under Section 149(6)of the Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.

Resume and other information regarding the director seeking appointment/ reappointmentas required by Listing Regulations and Secretarial Standard-2 has been given in the Noticeconvening the ensuing Annual General Meeting and Statement pursuant to Section 102 of theAct.

The Board of Directors recommends the above appointment(s)/ reappointment(s).

Directors’ Responsibility Statement

Pursuant to Section 134(5) of the Companies Act 2013 the Directors state that:

i. In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures if any;

ii. The Directors have 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 loss of the Company for that period;

iii. The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

iv. The Directors have prepared the annual accounts on a going concern basis;

v. The Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and

vi. There is a proper system to ensure compliance with the provisions of all applicablelaws and that such systems are adequate and operating effectively.

Corporate Governance

As per Regulation 15(2) of Listing Regulations as the paid up equity share capital ofthe Company is Rs. 95.67 lacs and networth is not exceeding Rupees Twenty Five Crores ason the last day of the previous financial year the compliance with the corporategovernance provisions as specified in Regulations 17 18 19 20 21 22 23 24 25 2627 46(2)(b) 46(2)(i) and para C D and E of Schedule V of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 are not mandatory. Therefore the Company hasnot enclosed the Compliance Report on Corporate Governance Certificate on the complianceof the Corporate Governance and Management Discussion and Analysis.

Share Capital

The Company has issued and allotted 250000 Non-Convertible Non-CumulativeRedeemable Preference Shares of Rs. 100 each during the year. The Company did not issueany equity shares during the year and the paid up equity share capital is Rs. 9567270.Consequently the total paid up share capital of the Company increased to Rs. 34567270.

The Company has also reclassified the Authorised Share Capital from the existingAuthorised Share Capital of the Company of Rs. 200000000 divided into 197500000Equity Shares of Re. 1 each and 25000 Preference Shares of Rs. 100 each to 150000000Equity Shares of Re. 1 each and 500000 Preference Shares of Rs. 100 each aggregating toRs. 200000000 and consequently altered the Memorandum & Articles of Association ofthe Company.

Particulars of Employees

There are no employees in the Company whose particulars are to be given as requiredunder Section 197(12) of the Companies Act 2013 read with Rule 5(1) and 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014. Directorswere not paid any remuneration during the year 2015-16.

Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo

All the manufacturing units of the Company are closed since December 2000. The Companyis making efforts to restart its explosive units. Therefore no steps were taken forconservation of energy capital investment in energy conservation equipment and technologyabsorption. Expenditure on research and development was nil. There were no foreignexchange earnings and outgo during the year.

Key Managerial Personnel

In compliance of the provision of Section 203 of the Companies Act 2013 the Companyhas appointed Mr. Manish Rakesh a member of ICSI as the Company Secretary (KeyManagerial Personnel) who is also the Compliance Officer in the terms of Regulation 6 ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The Company istaking necessary steps to appoint others KMP in terms of Section 203 of the Companies Act2013.

Number of meetings of the Board

The Board met seven times on 21.05.2015 10.08.2015 27.10.2015 04.02.201619.02.2016 21.03.2016 and 28.03.2016 during the financial year 2015-16. The gap betweenany two consecutive meetings was not exceeding 120 days.

Number of Board meetings attended by the directors are as under:

Name of the Directors Category No. of meetings attended
Mr. Vimal Kumar Jain Independent Non-Executive Director 7 out of 7
Mr. Shyam Lal Gouniyal Independent Non-Executive Director 7 out of 7
Mr. Rajesh Jain Independent Non-Executive Director 2 out of 7
Mr. Gorachand Dutta Independent Non-Executive Director 1 out of 7
Ms. Preety Gupta (appointed w.e.f. 05.02.2016) Independent Non-Executive (Additional) Director Nil out of 3
Dr. Arvind Krishna Saxena (ceased w.e.f 04.02.2016) Non-Executive Director 1 out of 7

Audit Committee

The Audit Committee constituted by the Company has the terms of reference as providedin the Companies Act 2013 and Listing Regulations. Mr. Gorachand Dutta and Ms. PreetyGupta have been inducted as members of the Audit Committee w.e.f. 21.03.2016 and Dr.Arvind Krishna Saxena has ceased to be a member of the Audit Committee on 04.02.2016.During the financial year ended 31.03.2016 there were no instances of the Board notaccepting the recommendations of the Audit Committee. The Audit Committee met four timeson 21.05.2015 10.08.2015 27.10.2015 and 04.02.2016 during the financial year 2015-16.The Statutory Auditors of the Company are invited to the Audit Committee meetings fordiscussing the financial results and financial statements.

Number of Audit Committee meetings attended by the directors:

Name of the Directors Position No. of meetings attended
Mr. Vimal Kumar Jain Chairman 4 out of 4
Mr. Shyam Lal Gouniyal Member 4 out of 4
Mr. Gorachand Dutta Member (inducted w.e.f. 21.03.2016) NIL
Ms. Preety Gupta Member (inducted w.e.f. 21.03.2016) NIL
Dr. Arvind Krishna Saxena Member (ceased w.e.f. 04.02.2016) 1 out of 4

The Company has in place a whistleblower policy to deal with unethical behaviorvictimization fraud and other grievances or concerns if any.

Nomination & Remuneration Committee

Nomination & Remuneration Committee constituted by the Company meets therequirements of Companies Act 2013 and Listing Regulations. A policy for selection ofdirectors and the remuneration policy already exists. The policy on selection of directorsis to have an appropriate mix of directors to maintain independence of the Board. Thecomposition of the Board shall meet the conditions prescribed under the Companies Act2013 and other provisions as may be prescribed from time to time. The proposed appointeeshall possess the director identification number and meet the criteria as laid down in theCompanies Act 2013. The Nomination and Remuneration Committee will review annually theappropriate skills and characteristics of Board members in the context of the currentstructure of the Board. A variety and balance of skills background and experience isdesirable to commensurate with the business and size of the Company.

Number of Nomination and Remuneration Committee meeting(s) attended by the directors:

Name of the Directors Position No. of meeting(s) attended
Mr. Shyam Lal Gouniyal Chairman One
Mr. Vimal Kumar Jain Member One
Mr. Gorachand Dutta Member None
Dr. Arvind Krishna Saxena Member (ceased w.e.f. 04.02.2016) None

Policy on Directors’ Appointment and Remuneration

The Company s policy on directors appointment and remuneration including criteria fordetermining qualifications positive attributes independence of a Director and othermatters provided under sub section (3) of Section 178 of the Companies Act 2013 isannexed in Nomination and Remuneration Policy.

Board Evaluation

Pursuant to the provisions of the Companies Act 2013 the Board has carried out anannual evaluation of its own performance of the individual directors as well as theworking of its Audit Committee

Nomination & Remuneration Committee and Stakeholders Relationship Committee. TheNomination & Remuneration Committee also reviewed the performance of all directors.Evaluation was done on the basis of questionnaire prepared covering various aspects ofthe Board s functioning such as adequacy of the composition of the Board and itsCommittees etc.

Independent Directors in its separate meeting also reviewed the performance of theChairperson and the Board of directors as a whole and also assessed the quality quantityand timeliness of flow of information between the Company Management and the Board. Thereare no non-independent directors so review of the performance of Non-IndependentDirectors in its separate meeting was not required.

Extract of Annual Return

The extract of annual return as per Form MGT- 9 is annexed herewith as Annexure‘I’.

Significant and Material Order

There are no significant/material orders passed by any regulator/court/tribunal whichcould impact on the going concern status of the Company and its future operations.

Complaints received by the Sexual Harassment Committee

The Company has in place a policy in line with the requirements of the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.Internal Complaints Committee (ICC) has been set up to redress any complaints receivedregarding sexual harassment. All employees (permanent contractual temporary trainees)are covered under this Policy. No complaint was received during the year and no complaintwas pending to be resolved as on 31.03.2016.

Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act 2013 M/s. Anjali Yadav& Associates Company Secretaries were appointed to undertake the secretarial auditfor the financial year 2015-16. The Secretarial Audit Report for the financial year2015-16 is attached as Annexure "II" and forms a part of the report of theBoard. In relation to observations made in the Secretarial Audit Report we inform thatthe Company is a sick industrial company registered with the Hon ble BIFR. During theyear the Company has no operations and all the units of the Company are closed.Consequently the Company has incurred cash losses during the year under review.Therefore in view of the non-availability of funds the Company could not comply with theprovisions of the Companies Act 2013 and the Listing Regulations. However during theyear under review the Company has made all possible efforts to comply with the applicableprovisions of the Companies Act 2013 and the Listing Regulations. During the year underreview the Company has appointed a Company Secretary and a Woman Director. The Companyhas also provided e-voting facility in relation to the business carried-out at the EGMheld on 21st March 2016. E-voting facility is also being extended for theensuing AGM.

Auditors & Auditors’ Report

M/s MANV & Associates Chartered Accountants were appointed as the StatutoryAuditors of the Company from the conclusion of the 32nd AGM till the conclusion of the37th AGM to be held in the year 2020 subject to ratification of their appointment at thesubsequent AGMs.

Pursuant to the provisions of Section 139 of the Companies Act 2013 and the Rulesframed thereunder it is proposed to ratify the appointment of M/s MANV & Associatesas the Statutory Auditors of the Company for the financial year 2016-17. The said Auditorshave furnished the Certificate of their eligibility in this regard.

The observations of Auditors in their Report dated 9th April 2016 read withthe relevant notes to accounts are self-explanatory and do not require any furtherexplanation.

General

a) The Company is not required to constitute CSR Committee under the provisions of theCompanies Act 2013.

b) The Company has not lent out any money or made any investments or provided anyguarantees during the year under review.

c) The Company does not have any related party transactions which may have potentialconflict with the interests of the Company at large. Thus disclosure in Form AOC-2 is notrequired.

d) The Company being a sick company having no commercial activity during the year underreview has not laid down policy on risk assessment and minimization procedures.

e) There were no material changes and commitments between the end of financial year anddate of report.

f) The Company has in place adequate internal financial control with reference to thefinancial statements.

Acknowledgements

Your directors wish to place on record their appreciation for co-operation and supportextended by all concerned stakeholders.

By order of the Board
For INDO GULF INDUSTRIES LIMITED
Sd/- Sd/-
Place : New Delhi Shyam Lal Gouniyal Vimal Kumar Jain
Date : 09.04.2016 Director Director