GB Global Ltd.
|BSE: 533204||Sector: Industrials|
|NSE: GBGLOBAL||ISIN Code: INE087J01028|
|BSE 00:00 | 31 May||GB Global Ltd|
|NSE 05:30 | 01 Jan||GB Global Ltd|
|BSE: 533204||Sector: Industrials|
|NSE: GBGLOBAL||ISIN Code: INE087J01028|
|BSE 00:00 | 31 May||GB Global Ltd|
|NSE 05:30 | 01 Jan||GB Global Ltd|
The Company is pleased to present the 36th Annual Report and the AuditedFinancial Statements of the Company for the year ended 31st March 2020.
Notes: Previous years' figures have been reclassified/regrouped wherever necessary tocorrespond with those of the current year.
COMPANY PERFORMANCE AND BUSINESS OVERVIEW
The revenue from operations for the year 2019-20 was Rs. 25978.34 Lakh against theprevious year of Rs. 29297.39. The total loss before tax was Rs. 6217.55 Lakh against theprevious year of Rs.4096.89.
The following is an analysis of the company's revenue from its products and services
Further discussion of operations for the year ended 31st March 2020 isprovided in the Management Discussion and Analysis Report which is presented in aseparate section forming part of this Annual Report.
In view of the losses your Company does not recommend any dividend for the year underreview.
TRANSFER TO RESERVE
The Company does not propose to transfer amounts to the general reserve for thefinancial year 2019-2020.
SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR 2019-20
On September 29 2017 the Hon'ble National Company Law Tribunal ("NCLT") hadadmitted the petition under Section 7 of the Insolvency Bankruptcy Code 2016("IBC"/"Code") for initiating the corporate insolvency resolutionprocess ("CIRP") of the Company and Mrs. Charu Desai was appointed as theinterim resolution professional of the Company. Subsequently Mrs. Charu Desai wasconfirmed as the as the Resolution Professional of the Company by the Committee ofCreditors ("CoC").
By an order dated November 30 2018 the Hon'ble NCLT had approved a Resolution Plansubmitted for the Company by Formation Textiles LLC ("FTL"). Pursuant to suchapproval order FTL took over the management/control of the affairs of the Company onJanuary 31 2019.
However after taking over the management/ control of the Company FTL did notimplement the Resolution Plan as per its terms and instead filed an application before theHon'ble NCLT inter alia seeking leave for making certain revisions/ modifications in theapproved Resolution Plan ("FTL Application"). Further an application was filedby Bank of Baroda on behalf of the CoC before the Hon'ble NCLT inter aliaseeking directions to FTL to comply with the Resolution Plan or as an interim relief handover possession of the Company with the aim of reviving the Company as a going concernand to prevent further deterioration to the business of the Company. Subsequently FTLfiled an amendment application in the FTL Application seeking directions for settingaside the NCLT order approving the Resolution Plan. FTL also informed the Hon'ble NCLTthat it had no objection to handover of the possession of the Company back to the CoCwithout prejudice to its rights and contentions.
On December 5 2019 as an interim measure the Hon'ble NCLT directed the CIRP of theCompany to be restored and thereafter the possession of the Company to be handed over tothe CoC and the erstwhile Resolution Professional.
Accordingly at a meeting of the CoC held on January 8 2020 FTL handed over thepossession of the Company to the CoC which in turn handed it over to Mrs. Charu Desai asthe Resolution Professional of the Company. As per the relevant provisions of the IBC thepowers of the Board of Directors of the Company stand suspended and such powers and themanagement of the affairs of the Company vest with the Resolution Professional.
Further vide order dated February 5 2020 the Hon'ble NCLT allowed the ResolutionProfessional to invite fresh resolution plans from prospective resolution applicants.Pursuant to the NCLT order and based on approval by the CoC the Resolution Professionalinvited interested parties to submit resolution plans for the Company in accordance withthe relevant provisions of the Code and the CIRP Regulations on 13th February2020. Pursuant to such invitation the Resolution Professional has received one resolutionplan for the Company from a resolution applicant which is under consideration of the CoC.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
The outbreak of Covid-19 pandemic globally as well as in India has resulted ineconomic slowdown all over the globe. The lockdowns and restrictions imposed on variousactivities due to the pandemic while being a necessary measure to contain novelcoronavirus spread has posed unprecedented challenges and impacted the business of theCompany.
Considering the fact that the situation is exceptional and is changing dynamically theCompany is not in a position to gauge with certainty the future impact on its operations.However the Company is making continuous efforts to adapt to the changing businessenvironment and respond suitably to fulfil the needs of its customers and there byconsiderably reduce the impact due to COVID-19.
Accordingly the above situation has occurred at the end of the financial year till thedate of this report which affects the financial position of the Company badly.
Reports on Corporate Governance and Management Discussion and Analysis in accordancewith SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015("Listing Regulations") along with a certificate from Auditors regardingcompliance of the Corporate Governance are given separately in this Annual Report.
Your Company has not accepted any Public deposits under Chapter V of Companies Act2013.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
As the CIRP of the Company has been ordered to be restored vide NCLT order dated 5thDecember 2019 the powers of the board stand suspended and such powers vest in theResolution Professional of GB Global Limited in accordance with the IBC.
The designation of Mr. Piyush Doshi has been changed from Managing Director toNon-Executive Professional Director with effect from 24th February 2020.
Mr. Vinay Sampat has resigned as Company Secretary and the Compliance Officer of theCompany effective from 6th November 2019 and Mr. Ashitosh Sheth was appointedas the Company Secretary and the Compliance Officer of the Company with effect from 13 thNovember 2019.
Consequently Mr. Ashitosh Sheth has resigned as Company Secretary and the ComplianceOfficer of the Company with effect from 30th December 2019.
Mrs. Dipti Atul Mehta was appointed as an additional director in the category ofIndependent Director with effect from 7th November 2019 and w.e .f. 13thDecember 2019 has resigned from the said position.
Mr. Ashok Kumar Das (DIN: 08419056) has resigned as an Executive Director of theCompany with effect from 12th December 2019. However he has remained as anemployee of the Company.
Mrs. Alka Patel has resigned as Non-Executive & Independent Director of the Companywith effect from 13th December 2019.
Mr. Chirayu Harsh Chhibber has resigned as Non-Executive & Independent Director ofthe Company with effect from 13 th December 2019.
Mr. Nimesh Patel has resigned as Non-Executive Director of the Company with effect from13th December 2019.
Mr. Hemant Gupta has resigned as the Chief Financial Officer (CFO') of theCompany and Chief Operating Officer (COO') of the Company with effect from 18thFebruary 2020.
Evaluation of performance of Directors was not undertaken during this financial year onaccount of restoration of CIRP in the Company w.e.f. 5th December 2019pursuant to which the powers of the Board of Directors stood suspended. Therefore theevaluation of the performance of the Board of Directors and of its Committees andindividual Directors were not undertaken during the financial year 2019-20.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
Three (3) Board Meetings were convened and held during the financial year 2019-20.
The powers of the Board of Directors stood suspended on account of restoration of CIRPvide NCLT order dated 5 th December 2019 and management of the Company hasbeen handed over to the Resolution Professional on 8th January 2020. Detailsof meetings of the Board and its Committees alongwith the attendance of the Directorstherein have been disclosed in the Corporate Governance Report. (Annexed herewith)
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Company's policy is to have an appropriate mix of executive and independentdirectors to maintain the independence of the Board and separate its functions ofgovernance and management. The policy of the Company on directors' appointment andremuneration including criteria for determining qualifications positive attributesindependence of a director and other matters as required under sub-section (3) of Section178 of the Companies Act 2013 is available on our website and also in the CorporateGovernance Report. There has been no change in the policy since the last fiscal year.
VIGIL MECHANISM/WHISTLE BLOWER POLICY FOR DIRECTORS AND EMPLOYEES
The Company had established an effective whistle blower policy (vigil mechanism) andprocedures for its Directors and employees; details of which are provided in the Report onCorporate Governance which forms part of this report. The policy on vigil mechanism may beaccessed on the Company's website at: www.gbglobal.in.
No Director/employee has been denied access to the Audit Committee of the Board ofDirectors/ Resolution Professional
COMMITTEE OF THE BOARD
The Company had constituted/reconstituted various Board level committees in accordancewith the requirements of Companies Act 2013. However as the CIRP of the Company has beenordered to be restored vide NCLT order dated 5th December 2019 the powers ofthe board stand suspended and such powers vest in the Resolution Professional of GB GlobalLimited in accordance with the IBC.
However the details on the various committees are provided in the Corporate GovernanceReport. (Annexed herewith) till management of the Company was taken over by theResolution Professional.
NOMINATION AND REMUNERATION POLICIY
The Board of Directors has formulated a Policy which lays down a framework forselection and appointment of Directors and Senior Management and for determiningqualifications positive attributes and independence of Directors.
The Policy also provides for remuneration of Directors Members of Senior Managementand Key Managerial Personnel.
The salient features of Nomination and Remuneration Policy are given under Annexure -A' to this Report and the detailed policy is available on the website of the Companyat www.gbglobal.in
RISK MANAGEMENT POLICY
The Company has in place a Risk Management framework to identify measure and mitigatebusiness risks and threats. This framework seeks to create transparency minimize adverseimpact on the business objective and enhance the Company's competitive advantage.
This risk framework thus helps in managing market credit and operations risks andquantifies exposure and potential impact at a Company level.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
No loans guarantees or Investments covered under section 186 of the Companies Act2013 have been given or provided during the year.
RELATED PARTY TRANSACTIONS
All contracts/arrangements/transactions entered by the Company during the financialyear with related parties were in ordinary course of business and on arm's length basis.During the year the Company had not entered into any contract/arrangement/ transactionwith related parties which could be considered material under Regulation 23 of ListingRegulation. Accordingly the disclosure of Related Party Transactions as required underSection 134(3)(h) of the Companies Act 2013 in Form AOC - 2 is not applicable. The Policyon materiality of related party transactions and dealing with related party transactionsas approved by the Board may be accessed on company's website at www.gbglobal.in.
Remuneration to Directors and Key Managerial Personnel
i. The percentage increase in remuneration of each Director and Company Secretaryduring financial year 2019-20 and ratio of the remuneration of each Director to the medianremuneration of the employees of the Company for financial year 2019-20 are as under:
@ The designation of Mr. Piyush Doshi has been changed from Whole-Time Director toNonExecutive Director with effect from 24th February 2020.
# Mr. Ashok Kumar Das has resigned as an Executive Director of the Company with effectfrom 12th December 2019. However continues as an employee of the Company.
# @ Ms. Cynthia Dibartolo and Mr. Lawrence Steckman have resigned and ceased to beDirectors of the Company with effect from 25 th July 2019.
# Mr. Nimesh Patel Non-Executive Director Mrs. Alka Patel Non-Executive &Independent Director Mr. Chirayu Harsh Chhibber Non-Executive & Independent Directorhave resigned with effect from 13 th December 2019.
$ Mr. Vinay Sampat was appointed as Company Secretary and the Compliance Officer of theCompany effective from 1st June 2019 and he resigned as Company Secretary andthe Compliance Officer with effect from 6th November 2019.
% Mr. Ashitosh Sheth was appointed as the Company Secretary and the Compliance Officerof the Company with effect from 13th November 2019.
However consequently Mr. Ashitosh Sheth has resigned as Company Secretary and theCompliance Officer of the Company with effect from 30th December 2019.
## Mrs. Dipti Atul Mehta was appointed as an additional director in the category ofIndependent Director with effect from 7th November 2019. Later on 13 thDecember 2019 she has resigned from the said position.
** Mr. Hemant Gupta was appointed as the Chief Financial Officer (CFO') of theCompany and Chief Operating Officer (COO') of the Company with effect from 1stJune 2019 and he resigned from said post with effect from 18th February 2020.
i. Remuneration paid to KMP includes Salary allowances company's contribution toprovident fund and monetary value of perquisites if any. The remuneration paid toNon-Executive and/or Independent Directors comprises of sitting fees only.
ii. The median remuneration of employees of the Company during FY 2019-20 wasRs.12895./-;
iii. In the financial year under review there was an increase of 12.08 % in the medianremuneration of employees;
iv. There were 2667permanent employees on the rolls of the Company as on 31stMarch 2020;
v. Average percentage increase in the salaries of employees other than the managerialpersonnel in the FY 2019-20 was 12.08 % as compared to FY 2018-19.
vi. It is hereby affirmed that the remuneration paid is as per the Remuneration Policyfor Directors Key Managerial Personnel and other Employees.
Details of employee remuneration as required under provisions of Section 197 of theCompanies Act 2013 and Rule 5(2) & 5(3) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is provided in a separate statement and forms part ofthe Annual Report. Further this report is being sent to the Members excluding the saidstatement. The said statement is available for inspection of members at theRegistered/Corporate Office of the Company during working hours upto the date of theAnnual General Meeting and shall be made available to any shareholder on request. The saidstatement is also available on the website of the Company which is www.gbglobal.in.
STATUTORY AUDITOR AND AUDITORS' REPORT
a) STATUTORY AUDIT
In accordance with Section 139 of the Companies Act 2013 the Members of the Companyin its 35th Annual General Meeting held on 26th September 2019have appointed M/s. CNK & Associates LLP. Chartered Accountants (Registration Number:101961W/W-100036) as the Statutory Auditors of the Company to hold office till theconclusion of the 40th Annual General Meeting of the Company.
The Ministry of Corporate Affairs vide its Notification dated May 7 2018 hasdispensed with the requirement of ratification of Auditor's appointment by theshareholders every year. Hence the resolution relating to ratification of Auditor'sappointment is not included in the Notice of the ensuing Annual General Meeting
b) STATUTORY AUDITORS' REPORT
The Auditors' Report and notes to the financial statements referred in the AuditorsReport are selfexplanatory and therefore do not call for any further comments underSection 134 of the Companies Act 2013. The Auditors' Report is enclosed with thefinancial statements in this Annual Report.
The Statutory Auditor has drawn attention to the going concern status of the Company onaccount of restoration of its CIRP and the management of the Company being handed over tothe Resolution Professional on 8th January 2020. Further as per the NCLTOrder dated 5th February 2020 the resolution process has to be completedwithin prescribed time limit and there is a possibility of liquidation [if no resolutionplan is approved for the Company].
The Resolution Professional has stated that vide order dated February 5 2020 theHon'ble NCLT allowed the Resolution Professional to invite fresh resolution plans fromprospective resolution applicants. Pursuant to the NCLT order and based on approval by theCoC the Resolution Professional invited interested parties to submit resolution plans forthe Company in accordance with the relevant provisions of the Code and the CIRPRegulations on 13 th February 2020. Pursuant to such invitation theResolution Professional has received one resolution plan for the Company from a resolutionapplicant which is under consideration of the CoC.
There is no incident of fraud requiring reporting by the auditors under Section 143(12)of the Companies Act 2013.
c) COST AUDITOR AND COST AUDIT REPORT
The Resolution Professional/Board has appointed M/s. C.B. Modh & Co. CostAccountants as Cost Auditors for conducting Cost Audit in respect of products manufacturedby the Company which are covered under the Cost Audit Rules for current financial yearending 31st March 2020. As required by Section 148 of the Companies Act 2013necessary resolution has been included in the Notice convening the 36th AnnualGeneral Meeting seeking ratification by Members to the remuneration proposed to be paidto the Cost Auditors for the financial year ending 31st March 2021.
The Company is in process of filing the Cost Audit Report for the financial year ended31st March 2019 and 31st March 2020 with the Central Government.
d) SECRETARIAL AUDIT REPORT
The Resolution Professional/Board have appointed Mr. Nitin R. Joshi Practicing CompanySecretary (Certificate of Practice No. 1884 and Membership No.FCS-3137) as the SecretarialAuditor of the Company pursuant to the provisions of Section 204 of the Companies Act2013 and the Rules made thereunder.
The Secretarial Audit Report is annexed as Annexure- B' and forms an integralpart of this Report. The Company has complied with all the applicable secretarialstandards.
CORPORATE SOCIAL RESPONSIBILITY
The Company is not falling under any of the applicability criteria of CSR as mentionedunder the provisions of Section 135 of the Companies Act 2013 as amended by the CompaniesAmendment Act 2017. Reporting as required under the aforesaid section for the financialyear 2019-20 is enclosed as Annexure - C'.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company has no subsidiary Joint Venture and Associate Company as on 31stMarch 2020.
SECRETARIAL STANDARDS OF ICSI
The Ministry of Corporate Affairs has mandated SS-1 SS-2 and SS-3 with respect toboard meetings general meetings and payment of dividend respectively. The Company is incompliance with the respective Standard as and when applicable.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS
The Company has adequate internal financial controls in place with reference tofinancial statements. These are continually reviewed by the Company to strengthen the samewherever required. The internal control systems are supplemented by internal audit carriedout by an independent firm of Chartered Accountants and periodical review by management.The Audit Committee of the Board addresses issues raised by both the Internal Auditorsand the Statutory Auditors.
Company's shares are compulsorily tradable in electronic form. As on March 31 20202364522 - Equity Shares stand with the NSDL Account and 949537 Equity Shares stand withthe CDSL and 236 Equity Shares stands in physical form. The Company had entered intoagreements with both National Securities Depository Limited (NSDL) and Central Depositoryservices (India) Limited (CDSL) whereby shareholders holding Shares in physical mode arerequested to avail of the dematerialization facility with either of the depositories. YourCompany had appointed Link Intime India Private Limited as its Registrar and ShareTransfer Agent.
RESOLUTION PROFESSIONAL/ DIRECTORS' RESPONSIBILITY STATEMENT
Members may kindly note that on 5th December 2019 the Hon'ble NationalCompany Law Tribunal had ordered the restoration of the corporate insolvency resolutionprocess of the Company. Pursuant to such order the management of the Company was handedover by the erstwhile resolution applicant (Formation Textiles LLC) to the Committee ofCreditors (CoC) of the Company and in turn the CoC handed over the management of theCompany to the Resolution Professional on 8th January 2020. Accordingly thepowers of the Board of Directors stood suspended and such powers vested with theResolution Professional under the provisions of the Insolvency and Bankruptcy Code 2016.
For the period commencing from 1st April 2019 to 7th January 2020 theCompany was under the management/ control of the erstwhile Board of Directors. This beingso the Resolution Professional has relied on the certifications representations andstatements made for such period by the previous management/ officials of the Company andis not in a position to independently verify the authenticity or veracity thereof. In viewof suspension of the powers of the Board of Directors the Resolution Professional isapproving these statements for the purposes of compliance with the provisions of theCompanies Act 2013 and on the basis of the certifications representations and statementsmade for such period by the previous management/ officials of the Company. Approval/confirmation of the Resolution Professional and affixing of her signature on thesestatements should not be construed as any endorsement or certification by the ResolutionProfessional of any facts/ figures/ certifications/ representations/ statements made bythe previous management/ officials of the Company.
In light of the aforesaid and pursuant to the requirements under sub section (3)(c) and(5) of Section 134 of the Companies Act 2013 with respect to Directors' ResponsibilityStatement it is hereby confirmed by the Resolution Professional that:
i) In the preparation of the annual accounts for the financial year ended 31stMarch 2020 the applicable Accounting Standards have been followed along with properexplanation relating to material departures;
ii) Accounting policies have been selected and applied consistently and judgments andestimates made that were reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company at the end of the financial year and of the profit of theCompany for the year under review;
iii) Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provision of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
iv) The annual financial statements have been prepared on a going concern basis;
v) Internal financial controls to be followed by the Company have been laid down andensured that such internal financial controls are adequate and operating effectively; and
vi) Proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
PARTICULARS OF ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGSAND OUTGO
Particulars of Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo as per section 134(3)(2) of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014 for the year ended 31st March 2020 areprovided under Annexure - D' to this report.
EXTRACT OF THE ANNUAL RETURN
Pursuant to the provisions of Section 92(1) of the Companies Act 2013 as amended bythe Companies Amendment Act 2017 a copy of the Annual Return in Form No. MGT-9 isuploaded on the website of the Company and the web link of which is: www.gbglobal.in
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
Your Company is committed to provide a work environment which ensures that every womanemployee is treated with dignity respect and equality. There is zero-tolerance towardssexual harassment and any act of sexual harassment invites serious disciplinary action.The Company has established a policy against sexual harassment for its employees. Thepolicy allows every employee to freely report any such act and prompt action will be takenthereon. The policy lays down severe punishment for any such act. Further your Directorsstate that during the year under review there were no cases of sexual harassment reportedto the Company pursuant to the sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.
The Company wishes to place on record their appreciation for the sincere servicesrendered by employees of the Company at all levels. The Company also wish to place onrecord their appreciation for the valuable co-operation and support received from theGovernment of India various state governments the Banks/ financial institutions andother stakeholders such as shareholders customers and suppliers among others. TheCompany also commends the continuing commitment and dedication of the employees at alllevels which has been critical for the Company and looks forward to their continuedsupport in future.
For GB GLOBAL LIMITED
(Formerly known as Mandhana Industries Limited)
Resolution Professional of GB Global Limited (Formerly known as Mandhana IndustriesLimited) vide NCLT Orders dated 29th September 2017 and 5th December 2019
Mrs. Charu Desai has been granted a certificate of registration to act as an InsolvencyProfessional by the Insolvency and Bankruptcy Board of India her Registration No. isIBBI/IPA-001/IP- P00434/2017-2018/10757. The affairs business and property of GB GlobalLimited (Formerly Known as Mandhana Industries Limited) are being managed by theResolution Professional who acts as an agent of GB Global only and without personalliability.
Mrs.Charu Desai in her capacity as the Resolution Professional took control and custodyof the management and operations of the Company from 8th January 2020. For theperiod commencing from 1st April 2019 to 7th January 2020 theCompany was under the management/ control of the erstwhile Board of Directors. This beingso the Resolution Professional has relied on the certifications representations andstatements made for such period by the previous management/ officials of the Company andis not in a position to independently verify the authenticity or veracity thereof. [Inview of suspension of the powers of the Board of Directors the Resolution Professional isapproving this Report for the purposes of compliance with the provisions of the CompaniesAct 2013 and on the basis of the certifications representations and statements made forsuch period by the previous management/ officials of the Company. Approval/confirmation ofthe Resolution Professional and affixing of her signature on this Report should not beconstrued as any endorsement or certification by the Resolution Professional of any facts/figures/certifications/representations/statements made by the previous management/officials of the Company.]
Place : Mumbai
Date : 26th November 2020.