Bheema Cements Ltd.
|BSE: 518017||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE333H01012|
|BSE 00:00 | 02 Mar||Bheema Cements Ltd|
|NSE 05:30 | 01 Jan||Bheema Cements Ltd|
|BSE: 518017||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE333H01012|
|BSE 00:00 | 02 Mar||Bheema Cements Ltd|
|NSE 05:30 | 01 Jan||Bheema Cements Ltd|
Your Directors are presenting the 40th Annual Report together with the Audited Statement of Accounts of your Company for the year ended 31st March 2019
1. FINANCIAL RESULTS:
The Financial highlights for the year under review are given below:
2. OPERATIONS :
There were no plant operations and hence no production and sales were recorded. There were only expenditure incurred during this period for the up keeping of the plant & company as a whole.
3. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:
As per the requirements Section 134(3) (I) of the Companies Act 2013 we declare that there are below significant material changes and commitments affecting financial position of the Company between 31st March 2019 and the date of Board's Report.
There are ongoing legal cases between JMFARC and Bheema Cements Limited at DRT and NCLT.
On 9th July 2018 Hon'ble NCLT Hyderabad passed orders admitting the company into CIRP process wherein Interim Resolution Professional was appointed and Resolution Plan has been filed in NCLT and waiting for the approval.
4. CHANGE IN THE NATURE OF BUSINESS:
As per the requirements Rule 8(5)(ii) of the Companies (Accounts) Rules 2014 we want to declare that there is no significant change in the nature of business of the Company during the last financial year.
5. SHARE CAPITAL AND CLASSIFICATION OF COMPANY:
The authorized capital of the Company as on 31st March 2019 was Rs. 780000000/- divided into 42000000 equity shares of Rs. 10/- each and 3600000 preferential shares of Rs. 100 each.
The Subscribed Issued and Paid-up capital of the Company as on 31st March 2019 was Rs. 557035600/-divided into 28307970 equity shares of Rs. 10/- each and 2739559 Preference Shares of Rs. 100/- each.
Our directors express their inability to recommend any dividend for the financial year 2018-19 due to no operation in the business.
7. FIXED DEPOSITS:
Your Company has not accepted/invited any deposits from the public for the year under review as per Section 73 of the Companies Act 2013 and the rules made there under.
8. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
A. RETIREMENT BY ROTATION:
Pursuant to provisions of the Companies Act 2013 Sri S Karthik Sarath Chandra (DIN: 07337078) Director will retire at the ensuing Annual General Meeting and being eligible offers himself for reappointment. The Board recommends his re-appointment.
B. During the period under review there is no change in the constitution of the Board.
Sri Josyula Ramu has resigned as Whole Time Director of the Company w.e.f. 28th May 2018 citing personal reasons.
Sri Majeti Prasad has resigned as Independent Director of the Company w.e.f. 9th Nov 2019 citing personal reasons.
D. FAMILIARIZATION PROGRAM:
No new Independent Director inducted into the Board
E. EVALUATION OF THE BOARD'S PERFORMANCE:
As per provisions of the Companies Act 2013 and Regulation 17(10) of the SEBI (LODR) Regulations 2015 The Company has devised a policy for performance evaluation of Independent Directors Board Committees and other individual directors which includes criteria for performance evaluation of executive and non-executive director.
The Directors were overall satisfied with the evaluation results which reflected the overall engagement of the Board and its Committees with the Company.
F. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Management's Discussion and Analysis Report for the year under review in terms of the provisions of Regulation 34 of the SEBI (LODR) Regulations 2015 presented in a separate section forming part of the Annual Report. Annexure I
G. REMUNERATION POLICY:
The Board has on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors Senior Management and their remuneration. The Remuneration Policy is attached to this report as Annexure II.
H. DECLARATION BY INDEPENDENT DIRECTORS:
In accordance with Section 149(7) of the Companies Act 2013 each Independent Director has confirmed to the Company that he or she meets the criteria of independence as laid down in Section 149(6) of the Companies Act 2013 and Regulation 16(1)(b)of the SEBI (LODR) Regulations 2015.
I. DIRECTORS' RESPONSIBILITY STATEMENT:
To the best of their knowledge and belief and according to the information and explanations obtained by them your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act 2013:
(a) THAT in the preparation of the annual accounts the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) THAT the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the loss of the company for that period;
(c) THAT the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
(d) THAT the directors had prepared the annual accounts on a going concern basis;
(e) THAT the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and
(f) THAT the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
J. VIGIL MECHANISM/WHISTLE BLOWER POLICY:
The Board of Directors of the Company have adopted Whistle Blower Policy. This policy is formulated to provide an opportunity to employees to raise concerns and to access the Audit Committee in good faith in case they observe unethical and improper practices or any other wrongful conduct in the Company to provide necessary safeguards for protection of employees from reprisals or victimization and to prohibit managerial personnel from taking any adverse personnel action against those employees.
There were no complaints received during the year 2018-19.
9. AUDITORS & AUDITORS' REPORT:
A. STATUTORY AUDITORS:
SASTRI&SHAH Chartered Accountants (Firm Registration No. 003642S) were appointed as Statutory Auditors of the Company at the 38th Annual General Meeting of the Company held on 21st August 2018 to hold the Office of the Auditors for a period of five years till the conclusion of 43rd Annual General Meeting. The said appointment is subject to ratification in every Annual General Meeting.
A proposal for ratification of the appointment of the Statutory Auditors for the Financial Year 2019-20 will be placed before the Members at the ensuing Annual General Meeting. The said Auditors have given their willingness and eligibility certificate in terms of Section 139 of the Companies Act 2013.
The Statutory Auditors' Report contains the below DisclaimeRs. Hence Management reply to the Disclaimers of the Auditor are mentioned below.
1) Attention is drawn to Note Nos. 25 (1) of the financial statements which brings out in detail the fact that the Company's net worth has been eroded by its accumulated losses as at the end of the current year. The Company suspended / shut down its operations and not in to active production since 2014 onwards.Corporate Insolvency Resolution Process CIRP had been Initiated in case of the Company vide an order of the Hon'ble National Company Law Tribunal Hyderabad (NCLT) dated 09/07/ 2018 under the Provisions of the Insolvency and Bankruptcy Code 2016 (Code).This along with matters listed below indicate the existence of multiple uncertainties that are significant to the financial statements as a whole and cast significant doubt on the Company's ability to continue as a going concern.In view of the ongoing Corporate Insolvency Resolution Process the outcome of which cannot be presently ascertained and for matters listed below we are unable to comment whether the Company will be able to continue as a going concern. Consequently we are unable to comment as to whether the going concern basis for preparation of these financial statements taken by the Company is appropriate.
Management Reply: In accordance with The Insolvency and Bankruptcy Board Of India (Liquidation Process) (Amendment) Regulations 2018 (Amendment) Dated 27 March 2018 Section 4(II) of the Amendment inter alia amending Regulation 32 empowers the liquidator has to adopt a new methodology for the realization of assets namely to sell the debtor as a going concern.In accordance with The Insolvency and Bankruptcy Code (Amendment) Act No. 26 of 2019 Dated 5th August'2019 the time period for completion of CIRP stands extended with the introduction/insertion of new Proviso No.2 (from existing 270 days to 330 days) and new Proviso No.3 (in case of all pending CIRPs by further 90 days from date of notification of Amendment to the Act - 6th Aug'2019) to Sub Section 3 of Section 12 of the Principle Act.The Management (Rep by Resolution Professional) has received / collected and evaluated admission (to the extent of their current eligibility) of all such claims submitted by the Creditors (Operational and Financial) employees and workmen of the company. Extension of time period was permitted by Hon'ble NCLT Hyderabad vide their Order Dated 26.08.2019 to the Company for conclusion of CIRP by further 90 days from date of notification of the amended provisions (being 16.08.2019) viz. until 13.11.2019. Resolution Professional finalized valid resolution plans submitted by prospective Resolution Applicant and the same was approved by CoC with requisite majority. Thereafter the Resolution plan was submitted to NCLT for approval and waiting for NCLT approval.In view of the current pendency of outcome of the impact of asset valuations done by approved valuers on carrying value of assets Management is nevertheless hopeful that all the assets of the company would continue to have realizable fair values at least to the extent reflected in the books of account and that the company will be able to meet its payment obligations. In these circumstances the Accounts / Financial Statements of the Company have been continued to be prepared on Going Concern Basis.
2) Attention is drawn to Note No. 25(1) (x) of the financial statements which explains the role of Resolution Professional in commencing the process of admitting the claims as per the insolvency code the consequential impact of which on their carrying amounts is yet to be ascertained / determined and hence has not been considered in the preparation of the Financial Statements. As part of the Corporate Insolvency Resolution Process the Company has received
(a) Claims aggregating to INR 49211.41 lacs from secured financial creditors viz. JMFARC representing assigned overdues/debts payable to consortium banks and Corporation Bank while as per the books of account of the Company the balance payable to them is INR 21198.07 lacs as at 31 March 2019.
(b) Claims aggregating to INR 1274.87 lacs from un-secured financial creditors (including promoters and others) while as per the books of account of the Company the balance payable to them is INR 904.23 lacs as at 31 March 2019.
(c) Further claims from operational creditors (including dues to workmen statutory authorities promoters and others) aggregating to INR 23358.86 lacs while as per the books of account of the Company the balance payable to them is INR 16606.07 lacs as at 31 March 2019.The aggregate of entire claims received under (a) (b) and (c) as above stand at INR 73845.14 lacs while as per the books of account of the Company the balance payable to them is INR 38708.37 lacs as at 31 March 2019.The Management (represented by Resolution Professional) is still in the process of verifying confirming and admitting the claims made by the financial and operational creditors including those which have already been disclosed in the books and therefore has not considered making any book adjustments to the above claims. However in the absence of the necessary final details required for the purposes of our audit we are unable to comment on the appropriateness of such amounts continuing to be disclosed at their recorded values in accounts without requiring accounting adjustments and their consequential impact on the financial statements.
Management Reply: The Management (Rep by Resolution Professional) has received / collected and evaluated admission (to the extent of their current eligibility) of all such claims submitted by the Creditors (Operational and Financial) employees and workmen of the company. In view of the extension of time period permitted by Hon'ble NCLT Hyderabad vide their Order Dated 26.08.2019 to the Company for conclusion of CIRP by further 90 days from date of notification of the amended provisions (being 16.08.2019) viz. until 13.11.2019 the probability of submission of further claims (including those currently defective) by legitimate claimants to the Resolution Professional continues to remain open until conclusion of the Corporate Insolvency Resolution Process as on date of audit report. In view of the given circumstances The Management believes that the eventual certainty of aggregate claims payable shall be ascertained nearer to the conclusion of CIRP. Accordingly the existing carrying values have been continued with.
3) Attention is invited to Note No. Note No.25 (6) (c) of the financial statements which explains the circumstances in which determination of Deferred Tax Liability (DTL) / Deferred Tax Asset (DTA) has not been undertaken during the current financial year and the previous financial years after 31st March 2017. However in the absence of the necessary final details required for the purposes of our audit we are unable to comment on the appropriateness of the amount of Deferred Tax Liability (DTL) continuing to be disclosed at the recorded value of INR 3257.92 lacs without requiring accounting adjustment and the consequential impact on the financial statements.
Management Reply: As there have been no operations of the company during the past 5 years the management is of the opinion that the deferred tax liability should not be provided for the years FY14-15 FY15-16 FY16-17 and FY17-18 & FY18-19.
4) Attention is invited to Note No.25 (14) of the financial statements regarding non-provision of gratuity and non-provision for leave encashment on actuarial valuation basis the consequential impact of which on their carrying amounts is yet to be ascertained / determined and hence has not been considered in the preparation of the Financial Statements.
Management Reply: The actuarial valuation for Gratuity and leave encashment could not be obtained for the current financial year 2018-19 and previous financial years 2014-15 to 2017-18 and liability for the same could not be estimated and provided for in accounts for want of details.
5) Attention is invited to Note No. 25(1)(xi) of the financial statements which explains the role of Resolution Professional in determining the realizable value of the Company Assets the consequential impact of which on their carrying amounts is yet to be ascertained / determined and hence has not been considered in the preparation of the Financial Statements. As part of the Corporate Insolvency Resolution Process The Management (represented by Resolution Professional) has received from 2 approved valuers Reports on valuation of assets of the Company (as at the date of commencement of CIRP viz. 09.07.2018) in different scenarios viz. Fair valuation as a Going Concern Liquidation Valuation (Going Concern) and Liquidation Valuation (Piecemeal). The Management (represented by Resolution Professional) is still in the process of verifying the values and necessitating changes that may eventually be found required for the carrying values of these assets in the books of account as on 31st March 2019. However in the absence of the necessary final details required for the purpose of our audit we are unable to comment on the appropriateness of such amounts continuing to be disclosed at their recorded values in accounts without requiring accounting adjustments and their consequential impact on the financial statements.
Management Reply: Management Reply: The Management (Rep by Resolution Professional) has considered determining the realizable and fair values of the assets of the Company in accordance with regulations 27 and 35 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations 2016. Accordingly 2 approved valuers were appointed by the Resolution Professional and they had undertaken extensive evaluation review process in determining valuation of assets of the Company (as at the date of commencement of CIRP viz. 09.07.2018) in different scenarios viz. Fair valuation as a Going Concern Liquidation Valuation (Going Concern) and Liquidation Valuation (Piecemeal). The Reports submitted by the valuers being exhaustive vary in their valuation figures under probable scenarios presumably owing to different valuation processes and assumptions. Management has commenced critical review of these reports and believes that the eventual certainty of asset valuations to be considered and adjustments required to be recorded there to in books of accounts shall be determined nearer to the conclusion of CIRP. Accordingly the existing carrying values have been continued with.
6) We had made various observations in our audit report dated 5th September 2018 on the financial statements for the year- ended 31 March 2018. In view of the limitations and uncertainties involved we had expressed our qualified opinion on the financial statements for the aforesaid year. Our disclaimer of opinion on the current year financial statements is also because of the possible effects of the above matters on the figures for the current year and on the corresponding figures for the year ended 31 March 2018 which also affects their comparability with current year figures.
Management Reply: The auditor qualified their opinion on the accounts for the financial year ending on 31 March 2018 the Directors confirmed that based on their assumptions and analysis the financial statement ending 31 March 2018 was materially correct. Given this the Directors are of the view that the qualification of opinion for the prior year shall have no material impact on the accounts for the financial year ended 31 March 2019
7) In view of irregularities and suspected fraudulent transactions pertaining to the earlier years the Resolution Professional initiated conduct of Forensic Audit by independent auditor. Significant observations involving probable misapplication of finances and mismatch in carrying values of some financial assets and financial liabilities were reported which are still under process of evaluation by Resolution Professional and yet to be recorded in the Company's books of accounts. In view of the above we are unable to comment on the consequential impact if any on the financial statements of the outcome of the aforesaid forensic audit findings and outcome of related litigation and claims.
Management Reply: In the view of management and as per the information available with the Company the ongoing investigation is not likely to have any adverse material impact on the functioning of the Company or the financial statements.
8) We are unable to comment on the necessary adjustments / disclosures in these financial statements in relation to the carrying values of following items in view of non-availability of certain necessary information / documentation / satisfactory explanations relevant to the current year audit
a. Lack of confirmation/reconciliation of current/term deposit account balances maintained with various Banks
b. Lack of confirmation/reconciliation of account balances of Sundry Debtors / Trade Receivables
c. Lack of confirmation/reconciliation of account balances of Sundry Creditors / Trade Payables
d. Lack of confirmation/reconciliation of account balances of Loans including Deposits and Advances Lack of confirmation/reconciliation of account balances of secured lenders viz. JM Financial Asset Reconstruction Company [JMFARC] and Corporation Bank.
Management Reply: The balances by Banks Sundry Debtors Sundry Creditors Loans including dealers deposits and advances are subject to confirmation from and reconciliation with the relevant parties as on the date of balance sheet date. In view of the fact that the operations of the Company have been shut down since March 2014 the Company has not been able to pursue to obtain confirmation of balances as on the date of balance sheet. The Company will initiate the process of obtaining confirmations from and reconcile with the parties upon resumption of operations. Any difference arising on reconciliation would be accounted in the year in which such reconciliation is completed.
9) Attention is invited to Note No. 25(3) of the financial statements which explains the circumstances in which Dividend on 6% CRPS Capital of Company has not been provided for the current financial year and the previous financial years. Under a previous Corporate Restructuring Arrangement a portion of over-dues payable by Company to secured lenders were converted into 6% CRPS. Company is obligated under Ind AS 32 to treat any fixed dividend payable on mandatorily redeemable preference shares as a liability. However the Company has not carried out this treatment ever since their issuance. We are unsure if the claims submitted by secured financial creditors under CIRP to the Resolution Professional include their Dividend dues as above. Pending reconciliation and agreement on these balances we are unable to comment on the impact if any on their carrying values.
Management Reply: Dividend on 6% CRPS Capital of Company : Consequent to the applicability of Ind AS in preparation and presentation of financial statements Company is obligated under Ind AS 32 to treat any fixed dividend payable on mandatorily redeemable preference shares as a liability. However the Company has not carried out this treatment. Company intends to recognize the obligation prior to conclusion of CIR Process.
10) During the year under audit the Company has provided depreciation on Property Plant and Equipment including Other Intangible Assets on a tentative basis without determining the depreciation expense on the basis of their exact useful lives. Moreover in view of ongoing review by the RP on determination of valuation of assets under different scenarios viz. Fair Valuation (Going Concern) v/s Liquidation Valuation (Going Concern) v/s Liquidation Valuation (Piecemeal) and the current pendency of outcome of CIRP we are unable to express an opinion on the appropriateness of current depreciation computation by Management and its consequential impact on the financial statements.
Management Reply: The Directors confirmed that based on their assumptions and analysis treatment of depreciation on Property Plant and Equipment including Other Intangible Assets in the financial statement ending 31 March 2019 is materially correct. Given this the Directors are of the view that the disclaimer of opinion for the financial year ended 31 March 2019 shall have no material impact.
11) Attention is invited to Notes to the financial statements wherein it is stated that the Company has used significant assumptions / estimates in accounting in certain critical areas such as valuation of inventories intangible mining deposits and rights assets provision for doubtful receivables in respect of outstanding trade receivables / supplier advances and provision for certain employee benefits. These assumptions / estimates primarily include -
Realizable values of inventories - Note No. 25 (21)
Realisability of outstanding receivables from customers and supplier advances
Realizable values of intangible mining deposits and rights Note No. 25 (22)
Realizable values of Assets - Note No. 25 (13)
Provision for employee benefits (Actuarial valuation of Gratuity and Leave Encashment) - Note No. 25 (14)
In view of the significance of these assumptions / estimates and in the absence of substantive audit evidence including past trends reconciliation with customers / vendors / physical inventory / assets / reliable estimate of future developments etc. we are unable to validate the reasonableness of these assumptions / estimates. Accordingly we are unable to comment on the consequential impact of the actual outcome as compared to the aforementioned assumptions / estimates if any on these financial statements.
Management Reply: Realizable values of inventories - Note No. 25 (21) Reg:
The physical verification of inventories could not be carried out during year as on the date of balance sheet date in view of the fact that the factory has been shut down since March 2014. The Company will initiate the process of physical verification of inventories afresh once the operations of the company commence and effect for any variations in addition to and apart from what is already written down noticed at such physical verification will be given at that time. Management further confirms that inventories have been assessed in books at Lower of Cost or their net realizable value.
Realisability of outstanding receivables from customers and supplier advances Reg:
The Management of the company is of the opinion that outstanding receivables from customers and supplier advances have a value on realization in the ordinary course of business at least to the amount at which they are stated.
Realizable values of intangible mining deposits and rights Note No. 25 (22)Reg:
The management had revalued and accounted the value in respect of mineral deposits and mining rights during the earlier financial year 2008 based on an estimate of the mineral quantities by M/s. C.C.Geo Engineering Consultants (P) Ltd. and of the realizable value by M/s. G.S.Sekhar Chartered Accountants. According to the accounting policy adopted in this regard the amount so revalued and included in the Fixed Assets is Rs. 10725.59 Lacs on account of Mineral Deposits and Rs. 2933.41 Lacs on account of Mining Rights totaling to Rs. 13659.00 Lacs. During the year depreciation has been provided on assets in accordance with recognized accounting policy as explained herein and the amount equal to depreciation has been withdrawn from the Mineral Capitalization Reserve. The management has however not directly considered 2 available reports of BOE Consulting LLP (dated Aug'2018) and Empress (during commencement of CIRP) in view of sizable variations in mining reserves noticed (though the same have been considered by approved valuers appointed by RP under CIRP). Management shall consider to effect valuation changes in records as may be found necessary upon finalization of valuations currently under review process. Consequent to the above the carrying value/balance in the account as on reporting date stands at Rs. 4919.12 Lacs.
Realizable values of Assets - Note No. 25 (13) Reg The Management of the company is of the opinion that all the Property Plant & Equipment have a value on realization in the ordinary course of business at least to the amount at which they are stated however subject to securitization of the same to secured lendeRs. Provision for employee benefits (Actuarial valuation of Gratuity and Leave Encashment) - Note No. 25 (14)Reg: The actuarial valuation for Gratuity and leave encashment could not be obtained for the current financial year 2018-19 and previous financial years 2014-15 to 2017-18. Accordingly liability for the same could not be estimated and provided for in accounts. But the same shall be duly assessed and considered prior to conclusion of CIR Process.
12) The Company has not filed its financial results for the periods ended 30 June 2018 and subsequent periods till date as prescribed under regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. Consequently we are unable to comment on the impact if any of this non-compliance on the financial statements.
Management Reply: The Company is in the process of regularizing the non-compliance with regard to filing of quarterly and annual financial results in accordance with the SEBI regulations.
13) We are unable to ascertain/determine the consequential impact of outcome of CIRP on the following aspects/elements of Financial Statements viz.
1. Recognition of and Provision for Impairment in the value of assets (fixed assets intangibles other non-current assets and financial assets) since consideration of fair values/liquidation values (as determined by approved/register valuers) by Resolution Professional is still under process.
2. De-recognition of existing Deferred Tax Liability (DTL) of INR 3257.92 lacs and Recognition of Deferred Tax Assets (DTA) if any in view of the current non-availability of estimates regarding future realizability of benefits from unabsorbed losses and depreciation.
3. Recognition of claims of operational and financial
Management Reply: The management is of the opinion that the above elements are dependent on the outcome of CIRP process which is still underway pending outcome. Management continues to be hopeful of a positive outcome as there shall be a resolution plan to revive the unit in this fiscal year. Management accordingly proposes to ascertain determine and recognize impact of above in accounts after outcome of CIR process.
B. SECRETARIAL AUDITOR:
The Company has appointed P. Surya Prakash Whole Time Practicing Secretary R&A Associates (ACS: 18803 C.P.No.11142) as Secretarial Auditor. The Secretarial Audit Report (SAR) for the financial year 2018-19 is annexed herewith as Annexure IV to this Report.
The board took note of the qualifications in the SAR. The board is reforming the existing internal control systems and compliance team of the company in order to ensure foremost compliance of the applicable rules law and regulations applicable to the company. Management is taking necessary steps to regularize the violations including filing of application with BSE Ltd for revocation of suspension of trading.
10. TRANSFER TO RESERVES:
The Company is not required to transfer any amount to the General Reserve.
11. HUMAN RESOURCES :
The Company has suspended the operations with effect from March 2014 and in view of the long period of suspension of operations there has been higher attrition of human resources and there are still some key employees in each department at factory and head office working towards revival of the unit.
12. CORPORATE GOVERNANCE:
A separate report on Corporate Governance is enclosed as a part of this Annual Report as Annexure IV. A certificate issued by the Secretarial Auditor Mr.P.Surya Prakash Company Secretary regarding compliance with Corporate Governance is annexed to the Report on Corporate Governance as Annexure VI.
The Company has complied with the requirements about code of conduct for Board members and Senior Management Personnel.
Pursuant to Schedule V of SEBI (LODR) Regulations 2015 the declaration signed by the Managing Director affirming compliance of the Code of Conduct by the Directors and Senior Management personnel of the Company for the financial year 2018-19 is annexed and forms part of the Corporate Governance Report.
13. CORPORATE SOCIAL RESPONSIBILITY :
The Company was not required to constitute a CSR Committee as the Company has not met any of the thresholds mentioned in Section 135 of the Companies Act 2013 during the financial year under review. Hence reporting about policy on Corporate Social Responsibility and the initiatives taken are not applicable to the Company. Company is running a School at the factory premises for 250 students.
14. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
The information required pursuant to Section 197(12) of Companies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of the employees of the Company is enclosed herewith in separate section Annexure - V.
No employee was in receipt of remuneration exceeding Rs. 10200000/- or more per annum or Rs. 850000/- or more per month as the limits prescribed under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 and hence the disclosure as required under Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is not required.
15. RELATED PARTY TRANSACTIONS:
There are no related party transaction during the year under review.
16. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
The Company has not made any loan given guarantee provided security or made investments pursuant to the provisions of Section 186 of Companies Act 2013 other than the normal course of business.
A. EXTRACT OF ANNUAL RETURN:
Extract of Annual Return of the Company is annexed herewith as Annexure VII to this Report.
B. COMPOSITION OF AUDIT COMMITTEE:
The Audit Committee comprises of Sri M H S P Prasad (Chairman) Smt Ameeta Trehan and Sri S. Chandra Mohan as members.
All the recommendations made by the Audit Committee were accepted by the Board.
C. NUMBER OF BOARD MEETINGS:
The Board of Directors of the Company met 4 (Four) times during the year. For further details please refer report on Corporate Governance.
D. LISTING OF SHARES:
The equity share of the Company is listed with Bombay Stock Exchange (BSE). Listing fees was paid for the financial year 2018-19. Share Trading is suspended. The company with the financial support of JMFARC is in the process of completion of revocation of suspension of the shares in BSE.
On September 2 2015 Securities & Exchange Board of India issued SEBI (LODR) Regulations 2015 streamlining the provisions of the Listing Agreement for different segments of Capital markets to ensure better enforcement hence enforcing the Companies to enter into fresh Listing Agreement with the stock exchanges where the shares are listed.
18. RISK MANAGEMENT:
The Board of your company has formulated a risk management policy in connection with the risk that the organization faces in its day to day business such as strategic financial credit market liquidity security property IT legal regulatory etc.
The board reviews the policy in regular interval.
19. FRAUD REPORTING:
Pursuant to Companies Amendment Bill 2014 there was no case of fraud that has been reported to the Audit Committee or Board during the year.
20. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
The particulars relating to conservation of energy technology absorption foreign exchange earnings and outgo is not applicable since there is no such activity at present being pursued by the Company.
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
a. The Company has no subsidiaries joint ventures or associate companies.
b. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. Even though Hon'ble NCLT admitted the case and appointed Insolvency Professional the Insolvency Process would approve the resolution plan submitted by the bidders for revival of the unit.
c. The Company has in place adequate internal financial controls with reference to financial statements.
These controls ensure the accuracy and completeness of the accounting records and preparation of reliable financial statements.
22. POLICY ON SEXUAL HARASSMENT:
There were no complaints/cases pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
23. MD / CFO/ Resolution Professional Certificate (Regulation 17(8) of SEBI (LODR) Regulations 2015 read with PART B of Schedule II) annexed to this report as Annexure - IX
24. Certificate issued by Mr. P.Surya Prakash Company Secretary Pursuant to Regulation 34(3) and Schedule V Para C Clause (10) (i) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is annexed to this report as Annexure - X
25. ACKNOWLEDGEMENTS :
Your Directors wish to take this opportunity to express their grateful appreciation and deep sense of gratitude to secured lenders & various Departments of Central and State Governments and Statutory Auditors & Consultants for their valuable guidance and co-operation extended during the year and look forward to their continued support in future. Your Directors would like to thank all the Share Holders Vendors Dealers and Consumers for the confidence reposed in the Company and its management.
Your Directors wish to place on record the deep sense of appreciation of the devoted services rendered by the Executives Staff and Workers of the Company at all levels.