The Directors hereby present their 53rdAnnual Report on the businessoperations and state of affairs of the Company together with the audited financialstatement for the year ended March 31st 2016:
The Financial Results of the Company for the year 2015-16 are summarized as under:
|Particulars ||Current Year (Rs.) ||Previous Year (Rs.) |
|Gross Total Revenue ||548.00 ||131053.00 |
|Total Expenses ||1502666.79 ||967910.22 |
|Profit / (Loss) before Tax ||(1502118.79) ||(836857.22) |
|Less: Tax Expenses || || |
|1. Current Tax ||0.00 ||0.00 |
|2. Short Provision for Tax of earlier years ||0.00 ||25278.00 |
|3. Deferred Tax ||0.00 ||0.00 |
|Net Profit/ (Loss) after Tax ||(1502118.79) ||(862135.22) |
|Add: Amount brought forward from Last Year ||(26787505.18) ||(25823398.96) |
|Appropriations: || || |
|Adjustment for Depreciation Balance carried ||NIL ||(144368.00) |
|forward || || |
|Proposed Dividend ||NIL ||NIL |
|Tax on Proposed Dividend ||NIL ||NIL |
|Transfer to General Reserve ||NIL ||NIL |
|Balance carried forward to Balance Sheet ||(28289623.97) ||(26787505.18) |
Due to accumulated losses occurred for past years the Directors do not recommend anydividend for the Financial Year ended March 312016.
TRANSFER TO RESERVE
During the financial year 2015-16 the Company has not transferred any amounts to anyreserves.
STATE OF COMPANY'S AFFAIRS
The Company ceased to be as a manufacturing Company since July 1986. During the yearthe Company earned income from interest on fixed deposits only.
Trading in the equity shares by Bombay Stock Exchange remained suspended throughout theyear.
CHANGE IN NATURE OF BUSINESS:
There has been no change in the nature of the business of the company during thefinancial year.
MATERIAL CHANGES AND COMMITMENTS
There has been no material changes occurred subsequent to the close of the financialyear of the company to which the financial statements relate and the date of the report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
There has been no significant and material order passed by any Regulators CourtsTribunal which has impacted the going concern status and future operations of the companyexcept a final order dated 10.12.2015 from Securities Exchange Board of India (SEBI) interms of the section 11(1) and 11(2) (j) 11 (4) and 11B of the Securities and ExchangeBoard of India Act 1992 read with section 12A Securities Contract (Regulation) Act 1956with respect to noncompliance of not having minimum public shareholding in the Company.However this order does not have an adverse effect on the going concern status of theCompany and on its future operations.
INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENT
The Company has in place adequate internal financial control with reference tofinancial statement.
DETAILS OF SUBSIDIARY. JOINT VENTURES AND ASSOCIATE COMPANIES
As on March 31 2016 the Company does not have any subsidiary Joint Venture andAssociate company.
PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARY / JOINT VENTURE / ASSOCIATE COMPANY
As the company does not have any subsidiary or Joint Venture or Associate companydisclosure requirements of information about its performance and financial position is notapplicable.
The Company has not accepted any deposits from the public during the financial yearended 31s'March2016.
The Company has not issued any equity share with differential rights; Sweat EquityShares Employees Stock Options Stock Purchase and therefore disclosure requirements arenot
applicable. However during the current year the Company has filed an application alongwith a draft scheme of arrangement with the Bombay Stock Exchange (BSE) with respect tothe following:
(a) Reduction of paid-up share capital;
(b) Delisting of equity shares from the BSE consequent to the exit option offered tothe public shareholders as provided under Regulation 3(2)(b) of the SEBI (Delisting ofEquity Shares) Regulations 2009
EXTRACT OF THE ANNUAL RETURN
The Extract of the Annual Return in Form MGT-9 as required under Section 92 (3) andRule 12 of the Companies (Management and Administration) Rules 2014 is appended as"ANNEXURE-A" to this Report. .
PARTICULARS OF LOANS. GUARANTEES OR INVESTMENTS UNDER SECTION 186
The Company has not given any loan or guarantee or made any investment or provided anysecurities during the financial year.
PARTICULARS OF ENERGY CONSERVATION. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGSAND OUTGO
(A) CONSERVATION OF ENERGY-
(i) Steps taken or impact on conservation of energy
The company has made necessary efforts to conserve the energy and have taken remedialmeasures wherever necessary at regular intervals.
(ii) Steps taken by the company for utilising alternate sources of energy: None.
(iii) Capital investment on energy conservation equipment's: NIL
(B) TECHNOLOGY ABSORPTION -
(i) the efforts made towards technology absorption: None
(ii) the benefits derived as a result of the above: Not applicable
(iii) in case of imported technology (imported during the last three years reckoned
from the beginning of the financial year): t
(a) the details of technology imported: Not applicable
(b) the year of import: Not applicable
(c) whether the technology been fully absorbed: Not applicable
(d) if not fully absorbed areas where absorption has not taken place and the reasonsthereof: Not applicable
(iv) the expenditure incurred on Research and Development (R&D): NIL
(C) FOREIGN EXCHANGE EARNING AND OUTGO: Nil DETAILS OF EMPLOYEES REMUNERATION
There were no employees during the financial year ended 31st March 2016 who were inreceipt of remuneration exceeding the prescribed limit pursuant to section 197 of theCompanies Act 2013 read with Rule 5( 1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
There were no contracts or arrangements entered into by the Company in accordance withthe Section 188 of the Companies Act 2013 and therefore disclosure in the Form AOC-2 doesnot arise and thus not provided.
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
> The shareholders in the annual general meeting held on 30thSeptember 2015 approved the appointment of Mr. Rajkumar Gupta (DIN: 02616025) asIndependent Director for a period of 5 consecutive years with effect from 25th April 2015and Mrs.Kamladevi Jain as a Director (Holding DIN: 07139242).
KEY MANAGERIAL PERSONNEL:
> Mr. Mitesh Singh Chauhan resigned as Chief Financial Officer on ^August 2015 andsubsequently was appointed as Chief Financial Officer on 23d October 2015.
> The shareholders in the annual general meeting held on 30th September 2015approved the appointment of Mr. Sukhraj A. Singhvi (holding DIN: 00246136) as the WholeTime Director of the Company for a period of 5(five) years w.e.f. 28th March 2015.
Meetings of the Board
The Board of Directors met 7 times during the financial year as given below:
|Date of the Board Meeting ||Number of the Directors Present |
|25th April 2015 ||5 (five) |
|27th April 2015 ||6 (six) |
|25th July 2015 ||6 (six) |
|25th August 2015 ||6 (six) |
|23rd October 2015 ||6 (six) |
|30mJanuary 2016 ||6 (six) |
|28th March 2016 ||6 (six) |
The board of directors has carried out an annual evaluation of its own performanceBoard committees and individual directors pursuant to the provisions of the Act. Theperformance of the Board was evaluated by the Board after seeking inputs from all thedirectors on the basis of the criteria such as the Board composition and structureeffectiveness of board processes information and functioning etc. The performance of thecommittees was evaluated by the board after seeking inputs from the committee members onthe basis of the criteria such as the composition of committees effectiveness ofcommittee meetings etc. The Board and the Nomination and Remuneration Committee("NRC") reviewed the performance of the individual directors on the basis of thecriteria such as the contribution of the individual director to the Board and committeemeetings like preparedness on the issues to be discussed meaningful and constructivecontribution and inputs in meetings etc. In addition the Chairman was also evaluated onthe key aspects of his role. In a separate meeting of independent Directors performanceof non-independent directors performance of the board as a whole and performance of theChairman was evaluated taking into account the views of executive directors andnon-executive directors. The same was discussed in the board meeting that followed themeeting of the independent Directors at which the performance of the Board itscommittees and individual directors was also discussed.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Act the Directors state that:
(a) In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures if any;
(b) Appropriate accounting policies have been selected and applied consistently andhave made judgements and estimates that are reasonable and prudent so as to give a trueand fair view of the state of affairs of the Company as at March 312016 and of
the loss of the Company forthe year ended March 312016; .
(c) Proper and sufficient care has been taken 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 annual accounts have been prepared on a going concern basis;
(e) Proper internal financial controls were followed by the Company and such internalfinancial controls are adequate and were operating effectively;
(f) Proper systems are devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
CORPORATE SOCIAL RESPONSIBILITY
The Company is not required to constitute a Corporate Social Responsibility Committeeas it does notfall within the purview of Section 135(1) of the Companies Act 2013.
The Company has identified all the relevant risks affecting its business. These risksare closely monitored and corrective measures are taken to rectify any deficiency as perthe policy framed in this regard.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION. PROHIBITION &REDRESSAU ACT. 2013
There were no complaints reported during the financial year ended on 31.03.2016.
NOMINATION AND REMUNERATION POLICY
The Company's policy on Director's appointment and remuneration including criteria fordetermining qualifications positive attributes independence of Director and alsoremuneration for Key Managerial Personnel and other employees is annexed to this report.
The Audit Committee of the Board pursuant to Section 177(2) of the Companies Act 2013and Rule 6 of the Companies (Meetings of Board and its Powers) Rules 2014 comprisesfollowing members as on 31st March 2016:
1. Haresh K. Notani. Independent Director Chairman.
2. Parasmal M. Jain Director.
3. Rajkumar Gupta Independent Director.
Your Company has in place a vigil mechanism for directors and employees to reportconcerns about unethical behavior actual or suspected fraud or violation of yourCompany's Code of Conduct. Adequate safeguards are provided against victimization to thosewho avail of the mechanism and direct access to the Chairman of the Audit Committee inexceptional cases is provided to them. The vigil mechanism is overseen by the AuditCommittee. .
AUDITORS AND AUDITORS REPORT
M/s Khimji Kunverji & Co. Chartered Accountants [Firm Registration Number105147W] hold office till the conclusion of the ensuing Annual General Meeting and areeligible for reappointment. They have confirmed that their appointment if made would bein conformity with the provisions of the Act and they are not disqualified forre-appointment. The Audit Committee and Board recommend the re-appointment of M/s KhimjiKunverji & Co Chartered Accountants as Auditors to hold office from the date of theensuring Annual General^eeting until the conclusion of the next Annual General Meeting.
There are no qualifications reservation or adverse remark or disclaimer made by theauditor in their report except as given in Note 19(a) and 19(b) mentioned under the head"OPINION" in the Auditors' Report which are self-explanatory.
The Board has appointed M/s. JSP Associates Company Secretaries firm to conduct *
Secretarial Audit for the financial year 2015-16. The Secretarial Audit report for thefinancial year ended March 312016 is annexed herewith as "ANNEXURE-C"
The Directors provide the following explanations and comments on the qualificationsmentioned in the Secretarial Audit Report:-
The Company is required to maintain minimum public shareholding as per the SecuritiesContracts (Regulation) Act 1956 (SCRA) and the Rules made thereunder and Clause 40 ofListing Agreement read with Rule 19(2) and Rule 19A of the Securities Contracts(Regulation) Rules. 1957
The manner/method in which the minimum public shareholding requirement can be met isthrough:-
I) Issuance of shares to public through Prospectus
II) Offer for sale of shares held by Promoters to public through prospectus
III) Sale of shares held by promoters through secondary market i.e OFS through stockexchange.
IV) Institutional Placement Programme (IIP)
V) Right Issues to Public shareholders with promoters/promoters group shareholderswith promoters/promoters group shareholders forgoing their rights entitlement.
VI) Bonus issues to public shareholders with promoters/ promoter group shareholdersforgoing their bonus entitlement
VII) Any other method as may be approved by SEBI on a case to case basis.
With substantial erosion of Net Worth of the Company negligible operationsdiscontinuance of manufacturing activities poor financial health and considering a verysmall number of public shareholders in the Company the directors feel that none of theabove methods would generate any interest and therefore the Company would not be able tomeet the criteria of minimum 25% public holding.
The Company has not provided the demat facility as required under the Depositories Act1996 and the Regulations and Bve-laws frame thereunder and The Company has not appointedRegistrars and Share Transfer Agents as required under the Securities and Exchange Boardof India (Registrars to an Issue and Share Transfer Agents) Regulations. 1993regarding theCompanies Act and dealing with client)
Due to various reasons stated above your Directors did not find it feasible todematerialize the equity shares of the Company and appoint Registrars and Share TransferAgents.
Since the trading in equity shares is suspended appointment of Depositories -as wellas Registrars and Share Transfer Agents and dematerialisation of shares would not have anybenefit to the shareholders.
Further the number of shareholders is small and there is no request from anyshareholders to dematerialise or transfer any shares.
Members of the Company were not provided e-voting facility to vote on all theresolutions passed at the said AG M
There are only 163 public shareholders holding 39640 equity shares constituting 1.18%of the total shareholding of the Company. All these shares are held in physical form andthe
concerned shareholders have not provided their e-mail id to the Company. Under thecircumstances the Company could not provide the E-voting facility to the members of theCompany at the Annual General Meeting.
The Company has not appointed Company Secretary as required under the provisions ofsection 203 of Companies Act 2013
The Company has discontinued manufacturing operation since July 1986. Considering thesize of the operations and earnings of the Company it is not possible to attract qualifiedCompany Secretary. Accordingly Company could not appoint a Company Secretary.
The Company has not redeemed 200.000 9.5% Redeemable Cumulative Preference Shares asrequired under the Companies Act 2013.
The redeemable preference shares can be redeemed only out of .
I) Profits of the Company
II) Proceeds of the fresh issue of shares
The Company has not generated adequate profits due to the closure of the manufacturingactivities since July 1986. Further as stated earlier the Company is not in a position toissue fresh capital. In view of the same the preference shares could not be redeemed.However all the preference shares are held by the promoters and their associates only.
Non-Compliance of various clauses of the Listing Agreement such as non-intimation ofcertain events to the stock exchange publication of certain information payment oflisting fees and maintenance of website.
In the absence ofaqualified Company Secretary and Compliance Officer certain provisionsof the listing agreement could not be complied. However such non-compliance weretechnical and the same were not material and had no adverse impact concerning the interestof the shareholders.
The Company has not filed listing application for 30.00.000 equity shares issued topromoters as per rehabilitation scheme in the year2003.
The Company had issued and allotted 30 Lakhs equity shares of Rs.10/- each amounting toRs.3 crores to its Holding company viz. Sindhu Resettlement Corporation Limited in termsof a rehabilitation scheme and pursuant to the Order of the Appellate Authority forIndustrial & Financial Reconstruction (AAIFR). Subsequently the company had appliedto the Bombay Stock Exchange to complete the formalities of listing of the said shares.However during the interim the trading of equity shares of the company was suspended bythe Bombdy Stock Exchange (BSE). Despite the frequent follow-up and liaison with the BSEno response was received from them and hence the additional equity shares still remainsunlisted.
Non Compliance relating to the signing of a new Listing Agreement with Stock Exchangein terms of SEBI (Listing Obligations and Disclosure Requirements) Regulation. 2015fListing Regulations]
The Company has filed an application along with a draft scheme of arrangement withrespect to reduction of paid-up share capital and delisting of equity shares from theBombay Stock Exchange as provided under Regulation 3(2)(b) of the SEBI (Delisting ofEquity Shares)
Regulations 2009. In view of the above the Company has not signed a new ListingAgreement as required under the Listing Regulations.
The Board wishes to place on record their appreciations of the whole hearted andsincere cooperation received by the Company during the year from the employees bankersand various Government authorities at all levels.
On behalf of Board of Directors
| ||Whole Time Director ||Whole Time Director |
|Place: Adipur-Kutch ||DIN : 00246136 ||DIN : 00486508 |
|Dated : 26th August 2016 || || |
|Registered Office: || || |
|Spinning Mill Building || || |
|P.O.: Adipur (Kutch) - 370 205. || || |
|Gujarat State || || |
ANNEXURES TO BOARD'S REPORT
Extract of Annual Return
Company's Policy on Director's Appointment by Nomination and Remuneration Committee
Secretarial audit Report in Form MR-3