Your Directors have pleasure in presenting Company's 37 Annual Report and AuditedFinancial Statements for the financial year ended March 31 2019.
1. FINANCIAL RESULTS
| ||(Rs. in Lakhs) |
|Sales and other Income ||561.37 |
|Loss before Interest and Depreciation ||(21.74) |
|Less: Interest ||23.30 |
|Depreciation ||5.14 |
|Tax Expenses (including Deferred Tax) ||(14.81) |
|Loss after tax ||(35.37) |
2. HIGHLIGHTS OF PERFORMANCE
During the year the Company's working resulted in loss before interest anddepreciation of Rs 21.74 lakhs on a turnover of Rs. 561.37 lakhs. As reported last yearthe Company's solvent extraction operations were found unviable hence the managementdecided to close the operations. It subsequently disposed off all inventories and all theworkers have been paid to their full satisfaction. The Company is now left with necessaryunavoidable staff. To minimize the expenses it has also surrendered the power and factorylicense to the respective authorities. All bank dues have been paid. Except unsecuredloans and current liabilities it has paid off all major liabilities. The Company'sassessment under Income Tax Act 1961 is completed upto A.Y. 2017-18 and there was nooutstanding demand.
These developments left the Company's management to explore possibilities of sale/leaseof the plant/undertaking for which shareholders' approval was obtained in the last AnnualGeneral Meeting. Since then management has been exploring the possibilities for the samebut so far no concrete proposal has been received/finalized.
Indian Accounting Standards (Ind-AS) IFRS Converged Standards.
The Company has adopted Indian Accounting Standards (Ind-AS) with effect from 1stApril 2017 pursuant to Ministry of Corporate Affairs' notification of the Companies(Indian Accounting Standard) Rules 2015 and the Annual Accounts of 2018-19 has beendrawn in terms of provisions of the Ind-AS.
3. TRANSFER TO RESERVES
In view of losses incurred by the Company for the F.Y. 2018-19 no amount has beentransferred to General Reserve.
In view of losses during F.Y. 2018-19 the Board of Directors have not recommendeddividend on Equity shares. However during the year an interim dividend of Rs. 141892/-(including Rs. 24192/- as dividend distribution tax) was paid on 5000 12% CumulativeRedeemable preference shares of (Series II) and 5000 12% Cumulative Redeemable preferenceshares of (Series III) of Rs. 100/- each for the period 01.04.2018-24.03.2019 along withpremature redemption.
5. SHARE CAPITAL
The Company's Authorized Capital remains unchanged at Rs. 200 Lakhs. The Paid up EquityShare Capital of the Company as on the date of Balance Sheet stands unchanged at Rs.8501000/- (comprising of 850100 Equity shares of Rs. 10/- each). With a view to reduceburden the Company during the year has redeemed Preference Share Capital amounting to Rs.1000000 (comprising of 5000 Cumulative Redeemable Preference Shares of Series II and5000 Cumulative Redeemable Preference Shares of Series III @ 12% of Rs. 100/- each) hencethe Paid up Preference Share Capital of the Company stand reduced to Nil.
6. FIXED DEPOSITS
Your Company has not invited any deposits during the financial year under review.
Your Company does not have any subsidiary within the meaning of the Companies Act2013. During the financial year ended 31 March 2019 no entity became or ceased to be thesubsidiary joint venture or associate of the Company.
8. DIRECTORS AND KEY MANAGERIAL PERSONNEL
a. In accordance with the provisions of Section 152 of the Companies Act 2013 andRules made thereunder Mr. Dinesh Khandelwal (DIN: 00161831) Whole-time Director(Finance) & CFO retires by rotation at the ensuing Annual General Meeting and beingeligible offers himself for re-appointment to the Board.
The tenure of Mr. Dinesh Khandelwal designated as Whole-time Director (Finance) &CFO who was appointed for three (3) years w.e.f 1 April 2017 will expire on 31 March2020. The Board on the recommendation of Nomination and Remuneration Committee hasreappointed him as Whole-time Director (Finance) & CFO for three (3) years period from01.04.2020 on the remuneration detailed in the notice of AGM subject to approval bymembers in the general meeting. Your Directors recommend the resolutions forre-appointment of Mr. Dinesh Khandelwal for your approval.
Pursuant to the provisions of the Companies Act 2013 ("the Act") CA AshokGupta (DIN 00135288) CA Atul Bagla (DIN: 00159563) CS Anil Kamthan (DIN: 00159819) andCS Rekha Kejriwal (DIN: 06889864) were appointed as Independent Non-Executive Directorsto hold office for five consecutive years for a term up to conclusion of AGM in thecalendar year 2019 by the Members of the Company in the 32nd Annual General Meeting heldon 27th September 2014. They being eligible for reappointment as Independent Directorsfor another term of five consecutive years and based on the recommendation of theNomination and Remuneration Committee the Board recommends for the approval of theMembers through Special Resolution at the ensuing Annual General Meeting reappointment ofMr. Ashok Gupta Mr. Atul Bagla Mr. Anil Kamthan and Mrs. Rekha Kejriwal as IndependentDirectors for another term of five consecutive years up to the conclusion of AGM in thecalendar year 2024.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149 (6) of the Companies Act 2013. Profile andother information of the aforesaid Directors forms part of the notice convening theensuing Annual General Meeting.
b. Mr. Dinesh Khandelwal Whole-time Director (Finance) & CFO; Mr. Vishwa NathKhandelwal (DIN: 00161893) Whole-time Director (Works) and Ms. Surabhi Pasari CompanySecretary and Compliance Officer are the Key Managerial Personnel of your Company.
9. BOARD EVALUATION
Pursuant to the provisions of the Companies Act 2013; the Nomination and RemunerationCommittee formulated the criteria for evaluation of the performance of the Board ofDirectors its various Committees constituted as per the provisions of the Companies Act2013 and individual directors. Based on that the Board of Directors carried out an annualevaluation of its own performance and of its various Committees viz. Audit CommitteeNomination and Remuneration Committee Stakeholder Relationship Committee and Committee ofDirectors and expressed their satisfaction with its performance and performance of itsCommittees. The Board of Directors also evaluated the performance of individual Directoron the basis of self-appraisal and expressed their satisfactory performance. The Board ofDirectors also carried out an annual performance evaluation of its Independent Directorsand expressed their satisfaction with their functioning / performance.
In terms of Schedule IV to the Companies Act 2013 the Independent Directors alsoconvened a separate meeting for this purpose and evaluated the performance of Chairman andNon Independent Directors.
10. REMUNERATION POLICY
The Board of Directors on the recommendation of the Nomination and RemunerationCommittee has framed a policy which lays down a framework in relation to remuneration ofDirectors Key Managerial Personnel and Senior Management of the Company. The Policycovers the criteria for selection and appointment of Board Members and senior managementand their remuneration. The Company's Remuneration Policy is based on the principles of(i) Pay for Responsibility and Duties (ii) Pay for Potential and (iii) Pay for growth ofthe Company.
The Nomination and Remuneration Committee is vested with powers to determine yearlyincrements/salary increase of Executive Directors/ KMPs and one level below based on theirperformance and contribution towards profitability and sustainability of Company. NonExecutive Directors are paid only sitting fee which is decided by Nomination &Remuneration Committee.
11. RISK MANAGEMENT POLICY
The production and operations of Company's Solvent Extraction Plant has been closed.Now the management is exploring possibilities of sale/lease of Company's undertakingwhich will be the only source of income of the Company in future. The new businessinvolves risks of different nature. The new policy shall be framed as and when desired.
12. INTERNAL CONTROL SYSTEM
The Company has an adequate system of internal control relating to purchase/sales ofstores raw materials including components plant & machinery equipment and othersimilar assets and for the sale of goods commensurate with the size of the Company andnature of its business. The Company has also Internal Control System for speedycompilation of Accounts and Management Information Reports and to comply with applicablelaws and regulations. The Company has a well defined organizational structure authoritylevels and internal rules and regulations for conducting business transactions suitable tothe size of the business.
The Company has already formed an Audit Committee which met four times in a year. AuditCommittee also ensures proper compliance with the provisions of The Companies Act 2013and also reviews the adequacy and effectiveness of the internal control environment andmonitors implementation of internal audit recommendations. Besides the above AuditCommittee is actively engaged in overseeing financial disclosures and in reviewing yourCompany's risk management policies.
13. INTERNAL FINANCE CONTROLS
In accordance with Section 134(5)(e) of the Companies Act 2013 the Company hasInternal Financial Controls Policy by means of policies and procedures commensurate withthe size & nature of its operations and pertaining to financial reporting. Inaccordance with Rule 8(5) (viii) of Companies (Accounts) Rules 2014 it is herebyconfirmed that the Internal Financial Controls are adequate with reference to thefinancial statements.
14. WHISTLE BLOWER POLICY/ VIGIL MECHANISM
The Company has a Whistle Blower Policy to report genuine concerns or grievancesdetrimental to the interest of the Company. The Whistle Blower Policy has been posted onthe website of the Company.
15. RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onan arm's length basis and in the ordinary course of business and the provisions of Section188 of the Companies Act 2013 are not attracted. There are no materially significantrelated party transactions made by the Company with Promoters Directors Key ManagerialPersonnel or other designated persons which may have a potential conflict with theinterest of the Company at large. Thus disclosure in Form AOC-2 was not required. Detailsof transactions made are disclosed in financial statements. All related party transactionsare presented to the Audit Committee and the Board. Omnibus approval was obtained for thetransactions which are foreseen and repetitive in nature.
16. STATUTORY AUDITORS AND THEIR REPORT
Pursuant to the provisions of Section 139 of the Companies Act 2013 and the Rules madethere under M/s. Gupta Vaish & Co. Kanpur Chartered Accountants (ICAI RegistrationNo 005087C) were appointed as Statutory Auditors of the Company at the Thirty Fifth(35th) Annual General Meeting to hold office for a term of 5 years from the conclusion of35 Annual General Meeting till the conclusion of Fortieth (40th) Annual General Meetingsubject to ratification of appointment by shareholders at each intervening Annual GeneralMeeting.
M/s. Gupta Vaish & Co have confirmed their eligibility and qualification requiredunder Sections 139 141 and other applicable provisions of the Companies Act 2013 andRules issued thereunder (including any statutory modification(s) or reenactment(s) thereoffor the time being in force.
In accordance with Notification dated 7th May 2018 of Ministry of Corporate Affairsthe ratification of appointment of Statutory Auditors at every AGM is not required.Accordingly the ratification of appointment of statutory auditors does not form part ofthe Notice convening ensuing Annual General Meeting of the Company.
There are no qualifications reservations or adverse remarks or disclaimer made in theAuditor's Report for the financial year ended 31 March 2019 which requires anyclarification or explanation. However Auditors have drawn attention of shareholders onCompany's ability as a going concern. The matter is adequately covered in para 2 aboveread along with notes on accounts.
17. SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of The Companies Act 2013 and the Rules madethere under M/s. Banthia & Co Practicing Company Secretary (CP No. 1405) Kanpurwere appointed to conduct the Secretarial Audit of the Company for the year ended 31March 2019. The Practicing Company Secretary has submitted his Report on the secretarialaudit which is annexed as Annexure I to this Directors' Report. The SecretarialAudit Report does not contain any adverse observation or qualification requiringexplanation or comments from the Board under Section 134 (3) (f) of the Companies Act2013.
18. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS
Pursuant to the provisions of Section 143 (12) of the Companies Act 2013 no instanceof fraud has been reported by the auditors against the Company.
19. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 your Directors confirm that:
a) in the preparation of the annual accounts the applicable accounting standards havebeen followed with no material departures;
b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the loss ofthe Company for the same period;
c) they 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) they have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls in the Company that are adequate andare operating effectively; and
f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that these are adequate and are operating effectively.
20. MATERIAL CHANGES AND COMMITMENTS
There are no material changes or commitments made by the Company affecting thefinancial position of the Company between the end of financial year and date of the Report.
21. DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNAL
No significant and material orders have been passed by any Regulator or Court orTribunal impacting the going concern status and Company's operations in future.
22. CHANGE IN THE NATURE OF BUSINESS
The Company has closed its present operations of manufacturing of rice branoil/de-oiled rice bran. It is exploring possibilities to new business which is yet to takeplace.
23. STATUTORY DISCLOSURES:
i. CORPORATE GOVERNANCE
The Company is exempted from compliance of Corporate Governance provisions as per SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
ii. ANNUAL RETURN
An extract of Annual Return in Form MGT-9 as required under Section 92(3) of theCompanies Act 2013 is appended as Annexure II. The copy of the same is placed onthe website of the Company and can be accessed athttp://www.khandelwalextractions.com/announcements.html
iii. MEETINGS OF THE BOARD AND COMMITTEE HELD DURING THE YEAR
a. The Board of Directors met four times during the year on 26.05.2018 11.08.201810.11.2018 and 09.02.2019. All the Directors except Mr. K.N. Khandelwal (absent on11.08.2018) were present in all the meetings.
b. The Audit Committee formed under Section 177 of Companies Act 2013 consisting ofMr. Ashok Gupta Chairman; Mr. Atul Bagla and Mr. K.N. Khandelwal met four times duringthe year on 26.05.2018 11.08.2018 10.11.2018 and 09.02.2019. All the members except Mr.K.N. Khandelwal (absent on 11.08.2018) were present in all the meetings.
c. During the year Nomination and Remuneration Committee consisting of Mr. AshokGupta Chairman; Mr. Atul Bagla Mr. Anil Kamthan and Mr. K.N. Khandelwal met one timeduring the year on 26.05.2018. All the members were present in the meeting.
d. The Stake Holders Relationship Committee consisting of Mr. Anil Kamthan Chairman;Mr. K.N. Khandelwal and Mr. Dinesh Khandelwal met once on 25.03.2019 to take note ofinvestor complaints/grievances. All the members were present in the meeting.
e. Independent Directors held a meeting on 25.03.2019 to assess /evaluate theperformance of Chairman and Non Independent Directors and concluded their satisfaction ontheir performances.
iv. CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility is not applicable to the Company.
v. DISC LOSURE UNDER SECTION 186: LOANS AND INVESTMENTS
Loans and investments were made for deployment of surplus funds which are within thelimits as prescribed u/s 186 of the Companies Act 2013. Details are given in financialstatements annexed in the Annual Report for F.Y. 2018-19.
vi. CONSERVATION OF ENERGY
Information required in "Form A" is not being given as our unit does not fallunder specified industry mentioned in the relevant schedule.
vii. TECHNOLOGY ABSORPTION
The Company's plant has been designed on the continuous process technology of M/s.Extractions Technik Gmbh Germany. No expenditure has been incurred in in-house researchand development.
viii. IMPORTS / EXPORTS AND FOREIGN EXCHANGE EARNINGS AND OUTGO
There was no import/export and no foreign exchange earnings and outgo incurred duringthe year under review.
ix. REMUNERATION PAID TO EXECUTIVE DIRECTORS AND KEY MANAGERIAL PERSONNAL
Details of remuneration paid to Directors KMPs are given in Form No. MGT-9. Furtherdetails as required under Rule 5(1) of The Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 read with section 197(12) of the Act is given in AnnexureIII. Executive directors have been paid minimum remuneration as approved by theShareholders. Non-executive Directors have been paid only sitting fees.
There was no employee getting salary in excess of the limit as specified under Rule5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014read with section 197(12) of the Act throughout or part of the year under review.
x. SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT2013
No complaint has been received under the aforesaid Act during the year under reference.
24. ENVIORNMENT AND SAFETY
The Company being conscious of the importance of making the environment clean and safehas taken all necessary steps for making the environment clean and all approvals underPollution Control Act/Factories Act/Explosive Licenses/Fire and Safety Rules/otherlicenses when and where necessary are in place till the period the plant operationscontinue during the year.
25. LISTING OF EQUITY SHARES
The Equity shares continue to be listed with BSE Ltd. The Company has paid the AnnualListing fee for the year 2018-19 to the said stock exchange.
26. DEMATERIALISATION OF SHARES/APPOINTMENT OF RTA
The Company has entered into necessary arrangement with National Securities DepositoryLimited (NSDL) and Central Depository Services (India) Limited (CDSL) to enable theshareholders to dematerialize their shareholding in the Company for which they may contactthe Depository Participant of the above Depository.
The Company's ISIN No. is INE687W01010. The Company has appointed M/s AlankitAssignments Limited New Delhi as its Registrar and Share Transfer Agent (RTA) forproviding services in respect of transfer and dematerialization of securities of theCompany with NSDL/CDSL.
27. COMPLIANCE WITH APPLICABLE SECRETARIAL STANDARD
The Company has complied with the applicable Secretarial Standards SS-1 on Meetings ofthe Board of Directors and SS-2 on General Meetings issued by the Institute of CompanySecretaries of India.
Your Directors thank Customers Vendors Employees and all the Stakeholders for theircontinued support to your Company.
| ||FOR AND ON BEHALF OF THE BOARD |
| ||K N KHANDELWAL |
| ||(CHAIRMAN) |
|Place: Kanpur || |
|Date: 10.08.2019 || |