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Entegra Ltd.

BSE: 532287 Sector: Infrastructure
NSE: ENTEGRA ISIN Code: INE826A01028
BSE 00:00 | 04 Mar Entegra Ltd
NSE 05:30 | 01 Jan Entegra Ltd
OPEN 5.44
PREVIOUS CLOSE 5.44
VOLUME 4393
52-Week high 5.44
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 173
Buy Price 5.44
Buy Qty 48009.00
Sell Price 0.00
Sell Qty 0.00
OPEN 5.44
CLOSE 5.44
VOLUME 4393
52-Week high 5.44
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 173
Buy Price 5.44
Buy Qty 48009.00
Sell Price 0.00
Sell Qty 0.00

Entegra Ltd. (ENTEGRA) - Director Report

Company director report

To The Members

Your directors have pleasure in presenting their twenty-first Annual Report on thebusiness and operations of the company together with the Audited Statement of Accounts forthe year ended 31st March 2019.

Financial Highlights

Performance of your company is as under:

(Rupees in Lakhs)
PARTICULARS For the year ended 31.03.2019 For the year ended 31.03.2018
(Audited) (Audited)
Total Income 198.25 0.11
Profit /(Loss) before Depreciation &
Tax (PBDT) (40.04) (35.41)
Less : Depreciation 1.28 1.28
Profit / Loss before Tax (41.32) (36.69)
Less: Provision for Taxation / Current Taxation -
Deferred Tax (Asset) / Liability -
Profit / Loss After Tax (41.32) (36.69)
Prior Period Adjustment - -
Income Tax for earlier year's - -
Dividend and TDS Written Back - -
Profit / Loss brought forward:
From previous year (23591.32) (23554.63)
Profit / Loss carried to
Balance Sheet (23632.64) (23591.32)

The Members may note that we are unable to present the Consolidated Financial Resultsof our material Subsidiary Shree Maheshwar Hydel Power Corporation Limited("SMHPCL") in view of the "Management Dispute" as marked by theRegistrar of Companies Madhya Pradesh (Gwalior).

Dividend

Directors do not recommend any Dividend.

SUBSIDIARY COMPANIES

The Company has 3 Subsidiaries namely a. Shree Maheshwar Hydel Power CorporationLimited (SMHPCL)- Management Dipsuted. b. Ennertech Biofuels Limited (EBL) c. RajasthanSolar Power Company Private Limited (RSPCPL).

As stated in the director's report that abetment of the board of SMHPCL with illegalacts of PFC caused your Company loss of ownership of Shares in SMHPCL from 58% to 12% witha corresponding ownership in favour of PFC/Lendersfrom Zero to 51%.

While the release of ROC Report was awaited and SMHPCL continued as a "ManagementDisputed" Company PFC continued with their illegal acts like: causing false accountsto be prepared by its appointed KMPs of SMHPCL for years March 2016 and 2017; held Annualgeneral meetings in December 2016 without circulation of Notice for the meeting andFinancial Statements to all the Members; did not allow entry to the venue of the meetingto your Company's Authorised Representative etc. Your Company as Holding Company was notable to consolidate the audited results of the Subsidiary.

CHANGES IN THE NATURE OF BUSINESS

There is no change in the nature of business of the Company during the year. CHANGE OFTHE REGISTERED OFFICE OF THE COMPANY

The Registered Office of the Company was earlier situated at "606 6th FloorRaheja Chambers Free Press Journal Marg Nariman Point Mumbai Mumbai City MH 400021".The Board of Directors approved the change of Registered Office within the local limits to99 Nirajan Ground Floor Marine Drive Near R.O.C. Building Mumbai – 400 002 Indiawith effect from 9th May 2018. The shifting of the Registered Office as aforesaid is inthe best interests of the company its shareholders and all concerned.

SHARE CAPITAL

There was no change in share capital of the Company during the year under review.TRANSFER TO RESERVE During the year the Company has not transferred any amount toreserves PUBLIC DEPOSITS

The Company has not accepted any deposits from the public within the meaning of Section73 of the Companies Act 2013 read with the Companies (Acceptance of Deposits) Rules2014.

BOARD MEETINGS

The Company as for the reason stated in "Management Discussion and AnalysisReport" did not have proper board composition Board in major part in last year underconsideration. Hence the details of the Board meetings cannot be given in the CorporateGovernance Report which forms part of this Annual Report. The intervening gap between anytwo Meetings were also not within the period prescribed under the Companies Act 2013.

COMMITTEES OF THE BOARD OF DIRECTORS

As stated above that the Composition of Board as well as committees were not in placedetails of Committees of Board of Directors along with their terms of referencecomposition and meetings held during the year cannot be included in the CorporateGovernance Report which forms part of this Annual Report. EXTRACT OF ANNUAL RETURN Anextract of the annual return pursuant to Section 92(3) of the Companies Act 2013 readwith the Companies (Management and Administration) Rules 2014 in Form MGT-9 is annexedherewith as forming part of this report.

CORPORATE GOVERNANCE REPORT

Corporate Governance report as required under Regulation 34 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 cannot be set out in the AnnualReport as due to non formation of committee and board was not in place for the Year forreasons stated in "Management Discussion and Analysis Report".

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received individual declaration from all the Independent Director(s) ofthe Company stating that they meet the criteria of independence as provided under Section149(6) of the Companies Act 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015.

AUDITOR

Pursuant to the provisions of Section 139 of the Act and the rules framed thereunderthe Auditors M/s. SKHD & Associates Chartered Accountants (Firm Reg. No. –105929W) who were appointed as statutory auditors of the Company at 21st Annual GeneralMeeting (AGM) of the Company at a remuneration (including term of payment) to be fixed byBoard of Directors of the Company plus service tax and such other tax(es) as may beapplicable & reimbursement of all out-of-pocket expenses in connection with the auditof the accounts of the Company. The Company has received confirmation from M/s. SKHD &Associates Chartered Accountants that they are not disqualified from continuing asAuditors of the Company.

No Fraud has been reported by Auditors under section 143(12) of the Companies Act 2013for the Financial Year 2018-19.

SECRETARIAL AUDITOR:

The Company has not appointed any Practicing Company Secretary to conduct SecretarialAudit of the Company for the financial year 2018-19 in terms of provisions of Section 204of the Companies Act 2013. As the Company had no committee's or board in place for thereasons stated in "Management Discussion and Analysis Report".

BOARD REPLY ON OBSERVATION IN AUDITORS REPORT

1) Investment in Subsidiary Companies

The Auditors are unable to get Comment on the investment of the Company in itssubsidiary company named Shree MaheshwarHydel Power Corporation Limited(SMHPCL). Theshares of SMHPCL were pledged with its Lenders with Power Finance Corporation (PFC) as itslead lender. These pledged shares were invoked by PFC on 2nd December 2016 but due todispute the Company has continued to show shares of SMHPCL under the head Investment.

MANAGEMENT RESPONSE

In response to the complaint made in January 2016 on mismanagement of affairs of SMHPCLby PFC the ROC after getting directions from the Ministry of Corporate Affairs (MCA)inspected SMHPCL under Sec 201(1) / (4) of the Companies Act 2016 after marking it as"Management Disputed." Fearing actions against PFC and its nominated officialsby MCA PFC filed a false petition u/s 241 242 and 244 of the Companies Act 2013 beforethe Hon'ble NCLTAhmedabad ("NCLT"). The NCLT dismissed the petition of PFC asnon-bona fide and held many of PFC's actions illegal. .Instead of going for a negotiatedsettlement with us as directed by the NCLT PFC preferred to file an appeal in August 2017before the Hon'ble NCLAT who dismissed PFC's appeal without granting any relief anddirected the Government of India and the Government of Madhya Pradesh to intervene to savethe asset of national importance. Against the NCLAT Order PFC preferred an Appeal in theSupreme Court which also was dismissed. It may be noted that we have filed a petition u/s241 242 244 and 59 of the Companies Act 2013 before the NCLT Ahmedabad along with aclaim for damages of INR 16000 Crs against PFC. In view of the said dispute the Companycontinues to show the said assets in its books at Cost Rs 6152990000 as the same areLong term Strategic Investment. In respect of Investment in other Subsidiary's amountingto Rs 10100000 the Company's is of the Opinion that there is no Diminution in value ofinvestment and hence continues to carry at cost.

2) Loan fromBank

The Company has not made any provision of interest liabilities amounting to Rs.13702.59 Lakhs for the Financial Years 2018-2019 further there is non receipt ofConfirmation of M/s. Edelweiss Asset Reconstruction Company Ltd. (EARCL) who have beenabsolutely assigned all rights and interests in the financial assistance of the Companyvide Assignment Agreement dated 28.03.2014 in respect of the Loan which was taken in theearlier years by the Company from Central Bank of India based on management estimates theliability that exists in the books of accounts would be sufficient to meet the proposedOne Time Settlement (OTS) which will be negotiated with EARCL. The Company has also notbooked total interest on the said loan till 31st March 2019 amounting to Rs53677.66Lakhs.

MANAGEMENT RESPONSE

The Company in its earlier year had taken loan from Central Bank of India (CBI) due tonon repayment of said loan CBI has assigned the said loan to M/s. Edelweiss AssetReconstruction Company Ltd. (EARCL). The Company has non booked interest on the said loanamounting to Rs. 13702.59 Lakhs for the Financial Years 2018-2019 and total interest notbooked is Rs 53677.66 Lakhs till 31st March 2019 based on management estimates theliability that exists in the books of accounts would be sufficient to meet the proposedOne Time Settlement (OTS) which will be negotiated with EARCL. Further as the said loan isa Non Performing Asset Confirmation in the said regards is also not available.

3) Deposit Given

The Company has not made any provision in respect of Deposit given to one of the partywhich is shown under the head Long term loans and advances amounting to Rs 200000000.The said deposit is given for occupying rent free area in the proposed newly constructedbuilding. However the said project is still on hold by the developer but the management ishopeful of its performance in near future.

MANAGEMENT RESPONSE

The Company has given deposit given to one of the party which is shown under the headOther Financial Assets amounting to Rs200000000. The said deposit is given foroccupying rent free area in the proposed newly constructed building. However the saidproject is still on hold by the developer but the management is hopeful of its performancein near future

4) Confirmations

Balances under the heads borrowings Other Financial Liabilities Trade Payable LoansOther Financial Asset Trade receivable Other Financial Assets and Fixed Deposit andthree Bank Account being dormant are subject to confirmation and reconciliation if anyfrom the respective parties and consequential reconciliation.

MANAGEMENT RESPONSE

Balances under the heads borrowings Other Financial Liabilities Trade Payable LoansOther Financial Asset Trade receivable Other Financial Assets and Fixed Deposit andthree Bank Account being dormant are subject to confirmation and reconciliation if anyfrom the respective parties and consequential reconciliation - Amount presentlyunascertainable. However the Company does not expect any material impact of the same.

5) Provisionfor Doubtful Recoveries

The Company has not provided for Loans Non-current Other Financial Asset comprising ofreceivable from holding company and Trade Receivables amounting to Rs 80.98 Lakhs Rs6779.55 Lakhs and Rs 423.78 Lakhs respectively against which no recovery has been done.MANAGEMENT RESPONSE The Company has not made provision for group Company balances inrespect of Loans Non- current Other Financial Asset comprising of receivable from holdingcompany and Trade Receivables amounting to Rs 80.98 Lakhs Rs 6779.55 Lakhs and Rs 423.78Lakhs respectively against which no recovery/ performance has been done as the managementis of the view that the said balances are good and would recovered once the group powerproject is revived.

6) Going Concern

The Company has been incurring constant losses further the Company is a Holding Companyof Shree Maheshwar Hydel Power Corporation Limited the said has limited development dueto various reasons further there are legal cases going on by and against the Companyfurther the Company has also been discontinued its business operation it has also beenfacing cash-flow mismatches if the said project is not revived than the going concernassumption might get impacted.

MANAGEMENT RESPONSE

The Company has been incurring constant losses further the Company is a Holding Companyof Shree Maheshwar Hydel Power Corporation Limited the said has limited development dueto various reasons further there are legal cases going on by and against the Company. Thegroup is confident that the legal cases outcome would be in the favour of the Company andthe project would revive there by Company would still continue as a going concern.

7) The Company was not in the position to pay listing fees hence the exchange hassuspended its share trading. Further the Company has also received notices from both theexchanges for non- compliance with the listing terms and for non-payment of listing fees.The Company approached SAT against the delisting order of NSE and presented all thefactual positions pertaining to the matter. SAT upheld the Appeal and directed NSE toreconsider their delisting order.

MANAGEMENT RESPONSE

The Company was not in the position to pay listing fees hence the exchange hassuspended its share trading. Further the Company has also received notices from both theexchanges for non- compliance with the listing terms and for non-payment of listing fees.The Company is arranging for funds to comply with it. The Company has filed appeal inSecurities Appellate Tribunal against Delisting Order by National Stock Exchange.

8) The Company does not have Company Secretary as well as CFO which is not in linewith Section 203 of the Act.

MANAGEMENT RESPONSE

The Company which states that the company does not have Company Secretary as well asCFO which is not in line with Section 203 of the Act. The Company is in Process ofcomplying with it the Company is regularly in posting advertisements in search of CompanySecretary.

9) The Company has not carried out Internal Audit as well as Secretarial Audit asrequired under theAuditfurthertheCompanyhasalsonotstrictlynotcompliedwithProvisionsofCompaniesAct.MANAGEMENT RESPONSE The Company has not carried out Internal Audit as well as SecretarialAudit as required under the Audit further the Company has also not strictly not compliedwith Provisions of Companies Act. Hence forth the same would be complied with.

10) The Company has adopted Ind-AS for the first time however as required underInd-AS 101 - First time adoption of IND-AS to value and book all its financial assets andfinancial liabilities at fair market values the Company has carried all its financialassets and financial liabilities at deemed cost which is not in line with the aforesaidIND-AS consequential impact of which is unascertainable.

MANAGEMENT RESPONSE

The Company which states that the Company has adopted Ind-AS for the first timehowever as required under Ind-AS 101 - First time adoption of IND-AS to value and bookall its financial assets and financial liabilities at fair market values the Company hascarried all its financial assets and financial liabilities at deemed cost as the Companydoes not contemplate a major impact of It on the Financial Statement.

11) The Company during the year under review has identified and written back TradePayable and other Payables which are pending for more than 3 years amounting to Rs 198.09Lakhs as the Company is of the opinion that the said balance are no longer payable.However there are no documentation or confirmation from the said party for waiver of theiramount thereby overstating loss of the Company and understating Trade payable and OtherFinancial Liability to the above extent.

MANAGEMENT RESPONSE

The Company during the year under review has identified and written back Trade Payableand other Payables which are pending for more than 3 years amounting to Rs 198.09 Lakhs asthe Company is of the opinion that the said balance are no longer payable.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

The Company has not given any loans or guarantees or made investment beyond the limitsmentioned under the provisions of Section 186 of the Companies Act 2013. Details of loansgranted guarantees provided and investments made by the Company are provided in thefinancial Statement.

PARTICULARS OF ENERGY CONSERVATION TECHNOLOGY ABSORPTION EXPENDITURE ON RESEARCH ANDDEVELOPMENT & FOREIGN EXCHANGE EARNINGS AND OUTGO

a) Consumption of Energy : Not Applicable

b) TechnologyAbsorption Research & Development (R&D)

(i) Technology imported and absorbed : NIL(Previous year Nil)

(ii) Expenditure on R&D : NIL(Previous year Nil)

c) Foreign exchange earnings and outgo

(i) Foreign exchange earnings : NIL (Previous year NIL)

(ii) Foreign exchange outgo : NIL (Previous year NI)

RELATED PARTY TRANSACTIONS

During the year under review there were no contracts or arrangements made with relatedparties as defined under Section 188 of the Companies Act 2013. There were no materiallysignificant related party transactions made by the Company with Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict withinterest of the Company at large.

RISK MANAGEMENT POLICYAND INTERNALADEQUACY

Your Company has in place a mechanism to identify assess monitor and mitigate variousrisks to key business objectives. Major risks identified by the businesses and functionsare systematically addressed through mitigating actions on a continuing basis. YourCompany's internal control systems are commensurate with the nature of its business sizeand complexity of its operations. These are routinely tested by Statutory Auditors.Significant audit observations are brought in notice of the management.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has established a vigil mechanism to provide a framework to promoteresponsible and secure whistle blowing and to provide a channel to the employee(s)Directors and other stakeholders to report to the management concerns about unethicalbehaviour actual or suspected fraud or violation of the code of conduct or policy/ies ofthe Company as adopted/framed from time to time. The details of said vigil mechanism aregiven in Corporate Governance Report which forms part of this Annual Report. The WhistleBlower Policy has been uploaded on the Company's website i.e. www.entegra.co.in

CORPORATE SOCIAL RESPONSIBILITY

The Company understands and values Corporate Social Responsibility (CSR) initiatives ofthe Government and has also noted the requirements of CSR activities in terms of CompaniesAct 2013. The requirement of mandatory implementation of CSR activity is not applicableto your company due to inadequacy of profits in past three financial years.

INTERNALFINANCIAL CONTROLS

Your Company has in place adequate internal financial controls with reference tofinancial statements. During the year under review such controls were tested and noreportable material weaknesses were observed.

WTD CERTIFICATE:

As no proper composition wasin place of board or committee till 25th March 2019 no suchcertification on financial reporting and Internal Controls was obtained as required interms of SEBI (Listing Obligations and Disclosure requirements) Regulations 2015. TheWhole Time Director also gives quarterly certification on financial results before theBoard in terms of Regulation 33(2) of the SEBI(Listing Obligations and Disclosurerequirements) Regulations2015 in view of the above was also not obtained.

DIRECTOR'S RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 134(5) of the Companies Act 2013 with respectto Directors' Responsibility Statement it is here by confirmed that:

(a) in the preparation of the annual accounts for the financial years ended 31st March2019 the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;

(b) 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 as at 31st March 2019 and of theprofit/ loss of the Company for that period;

(c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

(d) the Directors have prepared the annual accounts for the financial year ended 31stMarch 2019 on a going concern basis;

(e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and

(f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectivelyexcept irregularities as happened due to non-composition of proper board and committee.

ACKNOWLEDGEMENTS

Your Directors would like to convey their appreciation to all associated with theCompany for their efforts and contribution during the year. Your Directors would like tothank and place on record their appreciation for the continued support and co-operationprovided to your Company by its Shareholders customers suppliers regulatoryauthorities Auditors and its bankers.

By Order of the Board of Directors
For Entegra Limited
Sd/-
Mukul Kasliwal
Chairman
Place Mumbai
October 1 2019