Mr Nitin V Panchal Resolution Professional presents the 49th Annual Reportand the audited financial statements for the financial year ended March 31 2021.
This is to appraise the members that pursuant to an application filed by StressedAssets Stabilization Fund (SASF) before the Hon'ble National Company Law TribunalHyderabad Bench ("NCLT") in terms of Section 7 of the Insolvency and BankruptcyCode 2016 read with the rules and regulations framed there under ("Code") NCLThad admitted the application and ordered the commencement of corporate insolvencyresolution process ("CIR Process") of Galada Power and Telecommunication Limited("GPTL/Corporate Debtor/Company") vide its order dated 14th August 2019("Admission Order"). NCLT had pursuant to the Admission Order appointed Mr.Nitin V Panchal as an interim resolution professional (IRP) for the Corporate Debtor. Interms of the Admission Order inter alia the management of the affairs of the CorporateDebtor was vested with IRP. Thereafter the Committee of Creditors (CoC) of the CorporateDebtor appointed Mr. Nitin V Panchal as the resolution professional for the CorporateDebtor ("RP").
In terms of Section 17 of the Code on commencement of CIRP the powers of the Board ofDirectors of GPTL stand suspended and the same are exercised by RP. The management of theaffairs of GPTL has also been vested with RP till the time resolution plan is approved byCoC and further approved by NCLT under the Code. The suspended Directors have handed overphysical records of the Company to the Resolution Professional.
The financial statements for the financial year ended March 31 2021 forming part ofthis Annual Report have been prepared in accordance with the Indian Accounting Standards(Ind AS) as notified by the Ministry of Corporate Affairs.
The Company's financial performance for the year ended 31st March 2021 andperiod ended 31st March 2020 is summarized below:-
| || ||Rs. in Lacs |
|Particulars ||Year ended 31st March 2021 ||Year ended 31st March 2020 |
|Sales ||2 ||21 |
|Gross Profit ||(128) ||(195) |
|Interest ||15 ||119 |
|Cash Profit ||(143) ||(313) |
|Depreciation ||62 ||69 |
|Exceptional Item ||24 ||- |
|Profit Before Tax ||(229) ||(383) |
|Profit After Tax ||(229) ||(383) |
|Dividend ||- ||- |
OPERATIONS AND STATE OF AFFAIRS OF THE COMPANY:
The Company is in CIRP under the Code and during the period under review the Companydid not have any business activity and the period ended with a loss of Rs. 229 lakhs ascompared to the previous year loss of Rs. 383 lakhs.
During the month of July 2020 an incident of theft was identified by the employees ofthe Company at Khadoli Silvassa Unit of the company. Certain internal parts of certainmachines were stolen. The Resolution Professional has lodged police complaints (online)with jurisdictional police authorities and the investigations for the same are going on.The matter was reported to the CoC immediately and post approval of the CoC in August2020 the RP replaced the security service provider following due procedure and as per thedirections of the CoC. Insurance policy in force at the time of theft did not cover theburglary the company could not file an Insurance Claim for the same. The written downvalue of the parts stolen is charged to Profit and Loss Account as exceptional Item.
The present pandemic situation on account of COVID-19 has been a challenge for thepeople communities business countries and the world as a whole. It has disruptiveimpact beyond any parallel. However during the entire lockdown the RP and his team withthe support and co-operation of the employees of the Company has handled all the functionsin compliance with the Code.
DIVIDEND & TRANSFER TO RESERVE:
During the year under review since the Company is in CIRP and due to current yearlosses no dividend on the equity shares of the Company has been recommended and no amountis proposed to be transferred to the reserves.
STATUS OF CORPORATE INSOLVENCY RESOLUTION PROCESS (CIRP)
The Hon'ble National Company Law Tribunal Hyderabad Bench vide their order IA No 40of 2020 CP (IB) No.384 /7/HDB/2018 dated 7th February 2020 approved theextension of CIRP period by 60 days w.e.f. 10th February 2020.(i.e. from 180days to 240 days).
In response to the application dated 03.12.2020 filed by the RP seeking the exclusionof COVID lockdown period NCLT Hyderabad bench vide its order dated 10.06.2021 hasgranted exclusion period of 106 days on account of COVID 19 with a direction to completeCIRP within the excluded period of 106 days with effect from 10.06.2021 i.e. upto23.09.2021
Consequent to receipt of above order RP with the concurrence of CoC on 15th June 2021invited second round of Expression of Interest (EOI) for resolution plan. Four ResolutionApplicants (RA) submitted their resolution plans out of which only three Resolution Planswere compliant with the Code and the same were presented to CoC in their meeting held on18th August 2021. Further negotiation with these three Resolution applicantsare presently going on. Based on the outcome of the negotiations all the Resolution Planswill be put up for voting and the relevant application will be filed with Hon'ble NCLT asper the provisions of IBC-2016
RP has also filed Miscellaneous Application IA 89/2020 before Hon'ble NCLT Hyderabadbench against the Ex-Management contesting the payments of remuneration and repayment ofunsecured loans to Managing Director and Executive Director respectively as 'PreferentialPayments" invoking the applicable provisions of the Code and the proceedings are inprogress for the same.
During the period under review there was no change in the Authorized and Paid Up ShareCapital of the Company. The Authorized Share Capital of the Company is Rs.11 Crores. ThePaid Up Equity Share Capital of the Company is Rs. 7.49 Crores as on 31st March 2021.
EXTRACT OF ANNUAL RETURN
As required under Section 134(3)(a) of the Act the Annual Return for the financialyear 2020-21 is put up on the Company's website and can be accessed at https://www.galadapower.com
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis. Your attention is drawn to Note 41 to the financial statement which sets outrelated party disclosures
MATERIAL DEVELOPMENT IN HUMAN RESOURCES/INDUSTRIAL RELATIONS.
The Company values human resources as one of the most important asset. The Company hasalways had an excellent track record of cordial and harmonious industrial relations. Thereare 17 employees as on date. There were changes in the remuneration drawn by certainemployees w.e.f. 1st November 2019 as per the discussion held during the 3rdCOC Meeting held on 14th November 2019 and the same was approved by requisitemajority as required by Section 28 of the Insolvency and Bankruptcy Code 2016. During theyear 2020-21 the employee remuneration is accrued at the revised rates as explained above.
In view of the General Circular No.20/2020 dated 5th May 2020 issued byMinistry of Company Affairs and prevailing situation owing to the difficulties involved indispatching physical copies the financial statements ( including RP's Report Auditor'sReport and other documents) are sent only by email to the members and to all the otherpersons entitled
AUDITORS & AUDITORS REPORT
M/s. K. S. Rao & Co. Chartered Accountants (Firm Registration No. 003109S) holdthe office from the conclusion of AGM until conclusion of the next AGM and they confirmedtheir eligibility to the effect that their appointment if made would be within theprescribed limits under the Act and they are not disqualified for the appointment. Theywere appointed till 2023 and ADT-1 was filled accordingly. They will be paid remunerationas mutually discussed and approved by the Committee of Creditors.
EXPLANATION TO AUDITOR'S REMARKS
The Report of the Auditor is given as an annexure which forms part of the AnnualReport. There were no qualification or adverse remarks made in the Auditors' Report.Hence no comments under Section 134 (1) of the Companies Act 2013 are called for.
MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF THE COMPANY
Except as disclosed in this report there were no material changes and commitmentsaffecting the financial position of the Company which have occurred between the end of thefinancial year and the date of this report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
As the Company does not carry on any manufacturing activity most of the information ofthe Company as required under Section 134(3) of the Act read with Rule 8 of the Companies(Accounts) Rules 2014 are not applicable. However the information as applicable has beengiven in the documents forming part of this Report.
DETAILS OF SUBSIDIARY JOINT VENTURE OR ASSOCIATES
The company has no subsidiaries joint ventures or associate companies during thefinancial year 2020-21.
CONSOLIDATED FINANCIAL STATEMENTS
The Company doesn't have any subsidiaries. Hence there is no need to prepareconsolidated financial statement for the financial year 2020-21
BOARD OF DIRECTORS
During the year under review there is no change in the composition of the board duringthe period under review.
DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Company is in CIRP and the Board is suspended. The powers of the management arevested in RP. Provisions of Section 152 (6) of the Companies Act 2013 regardingretirement of directors by rotation is not applicable to the company.
DECLARATION OF INDEPENDENT DIRECTORS:
As the Board is suspended due to commencement of CIRP the provisions relating todeclaration of Independent Directors are not applicable.
NUMBER OF BOARD MEETINGS CONDUCTED DURING THE PERIOD UNDER REVIEW:
The CIRP has commenced w.e.f. 14.08.2019. No further meeting of Board of Directors orCommittee was held after the commencement of Corporate Insolvency Resolution Process(CIRP).
Due to suspension of the powers of the Board these provisions are not applicable.
DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNAL.
Except as disclosed in this report no orders have been passed by the Regulators orCourts or Tribunals impacting the going concern status and the Company's operation.
CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY
The Company is not required to constitute a Corporate Social Responsibility Committeeas it does not fall within purview of Section 135(1) of the Companies Act 2013 and henceit is not required to formulate policy on corporate social responsibility.
STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THECOMPANY
The Company manages monitors and reports on the principal risk and uncertainties thatcan impact its ability to achieve its strategic objectives. The company's managementsystems organization structure processes standards code of conduct and behavior governthe business of the company and manage associated risks.
DIRECTORS RESPONSIBILITY STATEMENT
During the whole year under review the company was under CIRP where the powers of theBoard of Directors and the committees thereof were suspended and the same vest with theResolution Professional.
Since the company is under CIRP management of the affairs of the company vested withResolution Professional.
Pursuant to the requirements under Section 134 (5) of the Act with respect toDirector's Responsibility Statement it is hereby confirmed that
I. In the preparation of Annual Accounts the applicable Accounting Standards have beenfollowed and maximum care has been taken to ensure that there has been no materialdeparture to the extent possible
II. To the extent possible the accounting policies have been selected and these havebeen applied consistently and judgments and estimates made thereon are reasonable andprudent so as to give a true and fair view of the state of affairs of the Company as at 31stMarch2021 and of the profit/loss for the year ended on that date.
III. To the extent possible proper and sufficient care has been taken for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities.
IV. Annual accounts of the Company have been prepared on a going concern basis.
V. To the extent possible internal financial controls have been laid down to befollowed by the Company and to the best of our knowledge such internal financial controlswere adequate and operating effectively.
VI. To the extent possible proper systems have been devised to ensure compliance withthe provisions of all applicable laws and to the best of our knowledge such systems wereadequate and operating effectively
The Company is not operational and there are 17 workers & employees working atpresent in the Company all responsibilities related to Accounts Finance Compliances andall other work related to the Company were carried out by employees / consultant undersupervision and directions of RP who is vested with the powers of the board.
During CIRP the Resolution Professional has relied upon the representationsclarification and explanations provided by the CFO & Company Secretary in relation tothe Audit of Financial Statements and approved the same only to the limited extent ofdischarging the powers of the Board of the Company which has been conferred upon himinteralia in terms of the provisions of Section 17 of IBC-2016
It is pertinent to note that the Resolution Professional made all practical andreasonable efforts from time to time to facilitate information / data from the officials /public domain / suspended directors of the company in relation to preparation of thefinancial statements of the company and also to provide the information required by theauditors for the purpose of carrying out the audit. The RP has tried his best to preparethe financial accounts based on the available records in various forms and theexplanations given to him .The RP also confirms that no assets belonging to third partywere in the possession of the company since the date of admission for CIRP as well ashanding over of the charge to him.
RP has not personally verified the information found through various sources and placedreliance/ confidence on the available data/ information produced before him and theexplanations given to him.
Because of the inherent limitations of the financial control with reference to thefinancial statements including the possibility of the collusion or improper management& override controls material misstatements due to error or fraud may occur and maynot be detected.
The Financial statements have been signed by the Resolution Professional in hisfiduciary capacity and only for the statutory requirement without accepting any personalresponsibility. The resolution professional is not liable for any error or misstatement ofthe facts and figures if any in the accounts of M/s Galada Power and TelecommunicationLimited for the year ended 31st March 2021 and the same are only for the purpose ofstatutory compliance. Resolution professional should be absolved from the accuracyveracity and sufficiency or completeness of such information. Readers and users of thesestatements are advised to do their independent due diligence before arriving at anyconclusion. The Resolution Professional has signed the Financial Statements to facilitatethe CIR Process and to facilitate the Statutory requirements without any personalliability of the same.
The Provisions of Section 148(1) of the Act are not applicable to the Company andaccordingly the Company has not maintained cost accounts and records for the year endedMarch 31 2021.
SECRETARIAL AUDIT & SECRETARIAL COMPLIANCE REPORT
Pursuant to the provisions of Section 204 of the Act read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the ResolutionProfessional had appointed M/s S.V.Achary & Co Company Secretaries in Practice toundertake the Secretarial Audit of the Company. There is no qualification reservation oradverse remark made in their Secretarial Audit Report submitted to the Company. TheSecretarial Audit Report is attached herewith as Annexure I.
The Company is exempted from "Corporate Governance Report" as the paid-upequity share capital is less than Rs 10 crores and net-worth is less than Rs 25 crores interms of clause 15(2) of SEBI ( Listing Obligations and Disclosure Requirements)Regulations 2015 as amended from time to time.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Provisions of Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 (the Rules) asamended regarding particulars of the employees drawing remuneration in excess of thelimits set out in the said Rules is not applicable to the Company.
COMPLIANCE WITH PROVISIONS OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The Company is committed to uphold and maintain the dignity of women employees and ithas in place a policy which provides for protection against sexual harassment of women atwork place and for prevention and redressal of such complaints. During the year no suchcomplaints was received.
The Company has also constituted an Internal Compliance Committee under the SexualHarassment of Women at workplace (Prevention Prohibition and Redressal) Act 2013.
The Resolution Professional States that no disclosure or reporting is required inrespect of the following items as there were no transactions on these items during theyear under review.
1. Details relating to deposits covered under Chapter V of the Act
2. Issue of equity shares with differential rights as to dividend voting or otherwise.
3. Issue of shares (Including Sweat Equity Shares) to employees of the company underany scheme
4. Neither the Managing Director nor the Whole Time Director of the company hasreceived any commission from the company.
The RP of the Company would like to express sincere appreciation for the cooperationand assistance received from shareholders bankers regulatory bodies employees and otherbusiness constituents & stakeholders during the year under review. The RP looksforward their support in future.