The Directors submit their Report and Accounts for the 9-month financial year ended 31stMarch 2015.
Financial Results and Accounts
The results for the period 1.7.2014 to 31.3.2015 are given below:
| || |
| ||2015 ||2014 |
| ||(9 months) ||(12 months) |
|Sales & Other Income ||0.20 ||1.04 |
|Profit /(Loss) (before interest and depreciation) ||(3.96) ||(4.73) |
|Depreciation ||0.20 ||0.23 |
|Profit/(Loss) (after interest and depreciation) ||(4.16) ||(4.96) |
|Profit/(Loss) before tax ||(4.16) ||(4.96) |
The Company has not transferred any amount to its reserves.
There are no changes in the nature of business during the 9-month financial year and nomaterial changes and commitments affecting the financial position of the Company whichhave occurred between the end of the financial year to which the financial statementsrelate and the date of this Report.
State of the Companys affairs
The Sanctioned Rehabilitation Scheme of the Company had been updated by the AppellateAuthority for Industrial and Financial Reconstruction (AAIFR) vide its order dated4.12.2007. The Scheme was then extended by the Board for Industrial & FinancialReconstruction (BIFR) at its hearing on 15.1.2014 for a period of four years till30.6.2018 and the said Scheme is under implementation. Whilst most banks/financialinstitutions (Fls)-debenture holders (DHs) have taken their one-time settlement (OTS) fewbanks/FIs- DHs are taking time. This is because there is an issue on the receipt of theirinstalments amounts prior to updation of the Rehabilitation Scheme by the AAIFR vide itsorder dated 4.12.2007 - till then the settlement amounts were being paid in instalments tothe lead consortium bank for disbursement to banks and to the lead institution fordisbursement to consortium FIs-DHs. This aspect of sharing/ disbursement of the instalmentamounts and reconciliation of the same with the lead Institution is delaying thesettlement of the DHs mainly insurance companies.
It is pertinent to note that about 6700 employees from 7200 employees have availed oftheir dues settlements in terms of the provisions of the Sanctioned Scheme. Balanceworkmen some of whom are difficult to locate and death cases where nomination disputesexist are also coming forward from time-to-time to avail of their dues settlements. Thisalong with the settlements pending internal approvals of creditors in no small measureled to the extension of the Sanctioned Scheme.
The observations made in the Auditors Report read together with the relevantnotes thereon are self-explanatory and hence do not require any further comments underSection 134 of the Companies Act 2013.
There are no qualifications made by the Auditors in their Report.
In view of the cumulative losses aggregating to Rs. 31.82 Crores the Directors regrettheir inability to recommend any dividend.
The extracts of Annual Return in Form MGT-9 pursuant to the provisions of Section 92read with Rule 12 of the Companies (Management and Administration) Rules 2014 for theFinancial Year 2014-15 is furnished in "Annexure A" and is attached tothis report.
Number of Meetings of the Board
During the year 2014-15 the Board of Directors met four times viz. on 27thSeptember 2014 22nd November 2014 27th December 2014 and 28thMarch 2015.
Committees of the Board
The Company has an Audit Committee; additionally in terms of the provisions of theSanctioned Rehabilitation Scheme the Company has an Asset Sale Committee and a ManagementCommittee.
Particulars of Loans Guarantees or Investments Under Section 186
During the year under review the Company has not advanced any loans/ given guaranteeswhilst investments made are given in the notes forming part of the financial statements.
Particulars of Contracts or arrangements with related Parties
During the year under review the Company has not entered into any contracts orarrangements with related parties hence details in prescribed format AOC-2 are notapplicable.
Directors Responsibility Statement
Pursuant to section 134(5) of the Companies Act 2013 the Board of Directors statethat:
in the preparation of annual accounts the applicable accounting standards havebeen followed along with proper explanations relating to material departures.
the selected accounting policies have been applied consistently and judgmentsand estimates that are reasonable and prudent have been made so as to give a true andfair view of the state of affairs of the Company as at 31st March 2015 and theprofit / loss of the Company for the year ended on that date.
proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities.
the annual accounts have been prepared on a going concern basis.
the Company being unlisted clause(e) of sub-section(5) of section 134 is notapplicable.
the Company has devised proper systems to ensure compliance with the provisionsof the applicable laws and that such systems are adequate and operating effectively.
the Company has in place adequate internal financial controls with reference tofinancial statements.
the Company is having a Sanctioned Rehabilitation Scheme sanctioned by the AAIFRunder remand orders of the Delhi High Court which then came to be made operative by theDelhi High Court. Subsequently the said Sanctioned Scheme was updated by the AAIFR videits order dated 4.12.2007 and the Updated Sanctioned Scheme was thereafter extended byfour years by the BIFR in terms of its order dated 15.1.2014.
The banks/FIs-DHs who had major amounts in the OTS amount of Rs 48.70 Crores providedin the Sanctioned/Updated-Extended Rehabilitation Scheme have taken their settlement - theinstitutional debenture holders are expected to also do so once they get their internalapprovals in place and the issue of sharing of the instalment amounts paid to the leadinstitution for disbursement in the ratio of their shares is resolved.
With respect to approximately 500 employees whose dues settlements are pending a largenumber of cases relate to death cases where there are nominee disputes and thewhereabouts-addresses of workmen are not known. There are also some holdouts who are notavailing of their dues settlements in the hope that they would get more with passage oftime. This is despite the fact that no preferential treatment is to be given to suchworkmen in relation to the vast majority of workmen who have come forward and availed oftheir dues settlements in terms of the Scheme provisions and the agreements negotiatedwith workmen unions in consonance with the Scheme.
With respect to the financial-lending organizations who have yet to avail of theirsettlements following the January 2014 BIFR hearing a joint meeting was convened by theOperating Agency (OA) to urge the organizations to process their internal clearances toavail of their settlements as provided in the Updated Sanctioned/Extended SanctionedScheme. It is encouraging to note that almost all remaining organizations expressedinterest to do so and keenness to expedite their internal clearances.
With the progress being made on settlement of employee dues and with only few of thebanks/FIs-DHs mainly institutional debenture holders remaining to avail of theirsettlements pending resolution of some issues centering around the disbursements/sharingthereof of the instalment amounts paid to the lead institution the Scheme implementationis well on course and the prospects for the Companys net worth turning positiveremain bright.
Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo
Energy conservation in the Companys locations/set-ups continues to be pursued.
Due to sluggish demand at the Mangalore Unit the capital investment for upgradation offacilities has been put on hold. These aspects will be pursued once most banks/FIs-DHshave taken their full and final settlement of their crystallized dues and the number ofworkmen taking their settlements touches 7000 nos.
There is no foreign exchange earning and outgo during the year.
Subsidiary Joint Venture or Associates Company
As on March 31 2015 the Company does not have any subsidiary joint venture orassociate company.
Risk Management Policy
The Company does not have any risk management policy as the element of risksthreatening the Companys existence are very minimal.
The Company has not invited/accepted any deposits from the public during the year endedMarch 31 2015. The payment of fixed deposit holders is being done in terms of the schemeand more fixed deposit holders would be coming forward to take their settlements and theRehabilitation Scheme is under implementation.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
during the year under review there were no cases filed pursuant to the SexualHarrasment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
no significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Companys operations in future.
The Board of Directors of the Company has six members.
Mr A K Jain was appointed as on additional Director wef 27th December 2014 in thevacancy created by resignation of Mr H Bhushan.
Mr V K Parashar retires by rotation and being eligible offers himself forre-appointment.
Mr M K Aich retires by rotation and being eligible offers himself for re-appointment.
M/s. S Jaykishan Chartered Accountants statutory auditors of the Company having Firmregistration number FRN 309005E hold office until the conclusion of the 77thAnnual General Meeting and being eligible offer themselves for re-appointment. TheCompany have received confirmation from the statutory auditors to the effect that theirre-appointment if made would be within the prescribed limits under Section 141 (3)(g) ofthe Companies Act 2013 and that they are not disqualified from being statutory auditors ofthe Company. The statutory auditors have also confirmed that they hold a valid certificateissued by the "Peer Review Board" of The Institute of Chartered Accountants ofIndia.
| ||for and on behalf of the Board |
|4 Scindia House || |
|New Delhi 110 001 || |
|DIN : 001335547 ||V. Krishna |
|22nd August 2015 ||Chairman |