The Members of
Garg Furnace Limited
The Directors of your company have pleasure in presenting the 46th Annual Report on theaffair of the company together with the Audited Accounts for the year ending 31st March2019.
|FINANCIAL RESULTS || || |
| ||(Rupees in Lacs) |
| ||2018-19 ||2017-18 |
|Operating Income ||11183.05 ||6721.21 |
|Pro t before depreciation Interest & tax ||(4.31) ||60.73 |
|Interest & Financial Expenses ||67.74 ||67.96 |
|Pro t before depreciation & tax ||(498.74) ||(7.23) |
|Depreciation ||126.73 ||131.09 |
|Pro t before tax & Exceptional items ||(625.47) ||(138.32) |
|Exceptional Items ||1137.67 ||0 |
|Pro t before tax ||512.20 ||-138.32 |
|Provision for tax -Current Tax ||0 ||0.00 |
|- tax related to earlier years ||1.65 ||0 |
|- Deferred Tax Asset ||0 ||126.75 |
|Less : Mat Credit Entitlement ||0 ||0.00 |
|Pro t after Tax ||510.55 ||(11.57) |
|Prior year Tax adjustments / Depreciation to Reverse as per Schedule - II ||0 ||0 |
|Re-measurement of de ne benefit liability ||(1.06) || |
|Balance brought forward ||(2462.50) ||(2460.93) |
|APPROPRIATIONS || || |
|Transfer to General Reserve ||0 ||0 |
|Balance carried over to Balance Sheet ||509.49 ||(11.57) |
The Board of Directors do not recommend payment of dividend for the year under review.
There was no public issue rights issue bonus issue or preferential issue etc. duringthe year. The Company has not issued shares with differential voting rights sweat equityshares nor has it granted any stock options.
Detailed information on the operations of the different business lines of the Companyand details on the state of affairs of the Company are covered in the ManagementDiscussion and Analysis Report
EXTRACT OF ANNUAL RETURN
The extract of annual return as provided under sub-section (3) of section 92 of theCompanies Act 2013 in the prescribed Form MGT-9 is provided in the web link of company.
NUMBER OF MEETINGS OF THE BOARD
There were 5 meetings of the Board held during the year 30/05/2018 14/08/201801/09/2018 15/11/2018 and 15/02/2019; detailed information is given in the CorporateGovernance Report annexed hereto as part of Board Report.
DIRECTORS' RESPONSIBILITY STATEMENT
As required under clause (c) of sub-section (3) of section 134 of Companies Act 2013directors to the best of their knowledge and belief state that -
(a) in the preparation of the annual accounts the applicable Accounting Standards hadbeen followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) the directors had prepared the annual accounts on a going concern basis; and
(e) the directors had 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 had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
DECLARATION BY INDEPENDENT DIRECTORS
The independent directors have submitted the Declaration of Independence as requiredpursuant to section 149(7) of the Companies Act 2013 stating that they meet the criteriaof independence as provided in sub-section (6).
DIRECTORS' REMUNERATION POLICY AND CRITERIA FOR MATTERS UNDER SECTION 178
Information regarding Directors' Remuneration Policy and criteria for determining qualications positive attributes independence of a director and other matters provided undersub-section (3) of section 178 are provided in the Corporate Governance Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Information regarding loans guarantees and investments covered under the provisions ofsection 186 of the Companies Act 2013 are detailed in the Financial Statements.
RELATED PARTY TRANSACTIONS
There are related party transactions (RPTs) entered into by the Company during thefinancial year which attracted the provisions of section 188 of Companies Act 2013.There being 'material' related party transactions as defined under regulation asapplicable of SEBI (LO&DR) Regulations 2016 there are details to be disclosed in FormAOC-2 in that regard.
During the year 2018-19 pursuant to section 177 of the Companies Act 2013 regulationas applicable of SEBI (LO&DR) Regulations 2016 all RPTs were placed before AuditCommittee for its prior/omnibus approval as well as shareholders' approval has been takenin this regard.
MATERIAL CHANGES AND COMMITMENTS
There have been no material changes and commitments affecting the financial positionof the Company which have occurred between the end of the financial year of the Companyand the date of this Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND
The information relating to Conservation of Energy Technology Absorption and ForeignExchange Earning and Outgo as required under Section 134 (3)(m) of The Companies Act 2013read with Rule 5 of Companies (Accounts) Rules 2014 is annexed and forms part of thisreport.
RISK MANAGEMENT POLICY
Information on the development and implementation of a Risk Management Policy for theCompany including identi cation therein of elements of risk which in the opinion of theBoard may threaten the existence of the Company is given in the Corporate GovernanceReport.
CORPORATE SOCIAL RESPONSIBILITY
Provisions of section 135 of the Companies Act 2013 are not applicable to Company
FORMAL ANNUAL EVALUATION OF THE RFORMANCE OF BOARD ITS COMMITTEES AND DIRECTORS
Information on the manner in which formal annual evaluation has been made by the Boardof its own performance and that of its Committees and individual directors is given in theCorporate Governance Report.
SUBSIDIARIES AND JOINT VENTURE
Company has no subsidiary associate and Company in Joint Venture
DIRECTORS AND KEY MANAGERIAL PERSONNEL
a. In light of the provisions of the Companies Act 2013 Mrs. VANEERA GARG (DIN:01283990 ) Woman Director of the Company retires from the Board by rotation this year andbeing eligible offers herself for re-appointment. The information as required to bedisclosed a per regulation as applicable of SEBI (LO&DR) Regulations 2016 in case ofre-appointment of the director is provided in the Notice of the ensuing annual generalmeeting.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
During the year under review there were no significant and material orders passed bythe regulators or courts or tribunals which may impact the going concern status of theCompany and its operations in future however the accounts of the company were declared bythe banks as Non-Performing Assets (NPA) and thereafter the bank has taken symbolicpossession of assets of the company u/s 13(4) of THE SECURITISATION AND RECONSTRUCTION OFFINANCIAL ASSESTS AND ENFORCEMENT OF SECURITY INTEREST ACT 2002 in 2017 the action ofthe bank has been challenged by the company before the Concerned Debt Recovery Tribunal(DRT). Further the management was under negotiation with the bank for one time settlement(OTS) of account. The bank has approved the One Time Settlement (OTS) proposal of thecompany vide its letter dated 13/08/2018 which has taken on record by board ofdirections in its meeting held on 14/08/2018 and authorised Managing Director tonegotiate further and give acceptance of said OTS proposal on behalf of company. Thecompany has accepted the said OTS proposal and Instalments in this regard are beingdeposited with Bank regularly.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Internal financial controls with reference to the financial statements were adequateand Operating effectively.
PRESENTATION OF FINANCIAL RESULTS
The financial results of the Company for the year ended 31 March 2019 have beendisclosed as per Schedule III to the Companies Act 2013. The same are placed on theCompany's website.
As Company has no subsidiaries and joint ventures Company the summary of the keyfinancials of the Company's (Form AOC-1) is not applicable to comply.
Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theprescribed particulars are set out in an annexure to the Directors' Report. As perprovisions of section 136(1) of the said Act these particulars will be made available toshareholder on request.
A Cash Flow Statement for the year 2018-19 is attached to the Balance Sheet.
Pursuant to the legislation 'Prevention Prohibition and Redressal of Sexual Harassmentof Women at Workplace Act 2013' introduced by the Government of India which came intoeffect from 9 December 2013 the Company has framed a Policy on Prevention of SexualHarassment at Workplace. There was no case reported during the year under review under thesaid Policy.
However the company is exempted under regulation 15 (2) (a) of Securities and ExchangeBoard of India (listing obligations and Disclosure Requirements) Regulations 2015 tocomply with Regulation 17 18 19 20 2122 23 24 25 26 27 and clauses (b) to (i) ofsub-regulation (2) of regulation 46 and para C D and E of Schedule V as the listedentity having paid up equity share capital not exceeding rupees ten crore and net worthnot exceeding rupees twenty five crore as on the last day of the previous financial yearThe company has put in place a system of Corporate Governance. A Separate report onCorporate Governance forming part of the Annual Report is annexed hereto.
Particulars of Employees
Information as per Section 197 of the Companies Act 2013 (the 'Act') read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 forms part ofthis Report is NIL .However salary being paid to whole time directors is mentioned inCorporate Governance Report.
Annual Performance Evaluation by Board
Pursuant to the provisions of the Companies Act 2013 and regulation as applicable ofSEBI (LO&DR) Regulations 2016 the Board has carried out an Annual PerformanceEvaluation of its own performance the Directors individually as well as the evaluation ofthe working of the Committees.
The Board of Directors of your Company has adopted a policy on Risk Management of theCompany. The broad terms of same provided at website of the Company.
Your Company has an effective Vigil Mechanism system which is embedded in its Code ofConduct. The Code of Conduct of your Company serves as a guide for daily businessinteractions reflecting your Company's standard for appropriate behavior and livingCorporate Values. The Code of Conduct applies to all GFL People including DirectorsOfficers and all employees of the Company. Even your Company vendors and suppliers arealso subject to these requirements as adherence to the Code is a prerequisite forconducting business with your Company.
Nomination & Remuneration Policy
The Board of Directors of your Company has on recommendation of the Nomination &Remuneration Committee framed and adopted a policy for selection and appointment ofDirectors Senior Management and their remuneration. The contents of the policy isprovided at website of the Company.
Pursuant to the provisions of section 139 of the Companies Act 2013 and the Rules madethereunder the current auditors of the Company M/s R.K. Chadha & Company. CharteredAccountants Ludhiana (ICAI Registration No. 003513N) was appointed by the shareholders atthe 44th Annual General Meeting until the conclusion of the 49th Annual General Meetingsubject to rati cation by shareholders at each annual general meeting.
The members are requested to ratify the appointment of M/s R.K. Chadha & Company.Chartered Accountants Ludhiana (ICAI Registration No. 003513N) as statutory auditors ofthe Company and to x their remuneration for the year 2019-20.
Reply to remarks in Statutory Audit Report
Emphasis of Matter
As mentioned in Emphasis of Matter in para a to c which are Self-explanatory howeverin context with related parties transaction company was constrained to do suchtransactions because due to weak financial position in previous years the suppliers andbuyers not shown interest to deal with the company directly but company has taken allapprovals in this regards as per applicable laws.
Basis for Qualified Opinion
(I) Because of huge losses suffered during last two financial years the organizationstructure is also forced to become unshaped but Management is looking for a competentperson to appoint him as Internal auditor and Company Secretary even the candidatesinterviewed for such offices have not shown their interest to join the company due to weakfinancial position of the company even after offering good remunerations.
(ii) Provision in respect of impairment /loss on assets is not require as managementhas view that due to slump & cut throat competition in iron industries / market istemporally and hope will recover soon.
(iii) Management is in process to confirm/reconcile balances with the concernedparties.
Pursuant to the provisions of section 204 of the Companies Act 2013 and Rules madethereunder the Company has appointed Baldev Arora & Associates (membership number:4283) Company Secretaries in Practice to undertake the secretarial audit of the Company.Secretarial Audit Report for the year 2018-19 given by Baldev Arora & Associates inthe prescribed form MR-3 is annexed to this Report. The Secretarial Audit Report for theyear under review given some observations.
Para wise replay of said observations are given hereunder
(A) Because of huge losses suffered during last two financial years the organizationstructure is also forced to become unshaped but Management is looking for a competentperson to appoint him as Internal auditor and Company Secretary even the candidatesinterviewed for such offices have not shown their interest to join the company due to weakfinancial position of the company even after offering good remunerations.
(B) Company has taken all approvals of members of the company/Audit Committee/board ofDirectors in respect of related parties transaction made during the year.
(D) The company is exempted under regulation 15 (2) (a) of Securities and ExchangeBoard of India (listing obligations and Disclosure Requirements) Regulations 2015 tocomply with Regulation 17 18 19 20 2122 23 24 25 26 27 and clauses (b) to (i) ofsub-regulation (2) of regulation 46 and para C D and E of Schedule V as the listedentity having paid up equity share capital not exceeding rupees ten crore and net worthnot exceeding rupees twenty five crore as on the last day of the previous financial year.
Pursuant to section 148 of the Companies Act 2013 and Rules made thereunder Board ofDirectors had on the recommendation of the Audit Committee appointed M/s Meenu &Associates (firm registration number: FRN: 100729) Cost Accountants to audit the costaccounts of the Company for the financial year 2019-20 at a remuneration of 20000.00 plusservice tax out-of pocket and travel and living expenses subject to rati cation by theshareholders at annual general meeting. Accordingly a resolution seeking members' ratication for the remuneration payable to cost auditor is included in the Notice conveningthe annual general meeting.
The Industrial relations remained cordial through out the year and have resulted insustained growth of the company.
The Directors wish to extend their sincere thanks to the Punjab & Sind Bank PunjabState Power Corporation Limited Container Corporation of India other State & CentralGovern-ment Agencies Suppliers and Customers for their continued support andco-operation.
The Directors also wish to place on record their deep appreciation for the servicesrendered by the workers & staff at all levels.
For and on behalf of the Board
DIN : 01665456