Your Directors have pleasure in submitting 25th Annual Report of theCompany together with Audited Statements of Accounts for the Financial Year/Period ended31st March 2018.
1. FINANCIAL RESULTS.
The Company's financial performance for the financial year/period underreview along with previous year/period figures is given hereunder:
(Amount in lacs)
|Particulars || |
For the year ended 31.03.2018
For the year ended 31.03.2017
|Net Sales || |
|Add: Other Income || |
|(Increase) / Decrease in stock || || |
|Total || |
|Less: Total Expenditure || |
|Operating Profit/Loss || |
|Less: Interest || |
|Less Depreciation || |
|Profit before exceptional item & tax || |
|Less: Exceptional Item || |
|Profit/Loss before tax || |
|Less: Provision for taxes || |
|Current Tax || |
|Deferred Tax || || |
|Earlier Year: Deferred Tax || |
|Earlier Year: Income Tax || |
|Profit / (Loss) after tax || |
In view of accumulated losses of the Company your Directors have notrecommended any dividend this year also.
3. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTIONFUND.
No Unclaimed / unpaid Dividend is due for transfer to the InvestorEducation and Protection Fund established by the Central Government.
4. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS.
During the year under review the company did not operate the Breweryand the sale of Beer was nil. Restaurant Business
The Company's two Restaurants at Amber Fort Jaipur and another atHanwant Mahal Jodhpur are on leased premises.
During the year under review the Company has appointed Mount ShivalikHotels & Resorts Pvt Limited as an 'Operation and Management' (O&M) contractorfor operating and managing the Restaurant business according to the O & M agreement.The O & M agreement was approved by the members of the Company in its meeting held on30.06.2017.
The salient features of this O&M Agreement are:
1) All working capital required will be inducted by the O & MContractor
2) The Annual Operating Loss if any shall be compensated by O & MContractor to MSIL
3) The Annual Operating profit if any shall be shared with MSIL - 25%to MSIL.
This agreement is beneficial as in 2017-18 Rs. 23.36 lakhs have beentaken in income from the Restaurants O & M operator has compensated for loss of Rs.23.36 lakhs.
The Company is constantly making efforts to improve sales andoperational efficiency at the restaurants. Note No. 33 of the financial Statements for theperiod ended March 31st' 2018 shows the segment reporting of Brewery and HospitalityBusiness of the Company.
5. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIALPOSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THISFINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT.
The Hon'ble National Company Law Tribunal New Delhi Bench-III NewDelhi ('NCLT') vide an order dated 12th June 2018 has admitted the reference forinitiation of Corporate Insolvency Resolution Process ('CIRP') in respect of MountShivalik Industries Limited (the 'Company') under Section 7 of the Insolvency andBankruptcy Code 2016 ('IBC').
By the said Order dated 12th June 2018 Ms. Pratibha Khandelwal (IPRegistration No.IBBI/IPA-002/IP- N00031/2016-17/10068) had been appointed as an InterimResolution Professional ('IRP') and in the First COC meeting dated 12.07.2018 she has beenappointed as Resolution Professional under the provisions of IBC.
It is also noted that according to the order passed by the Hon'bleNational Company Law Tribunal New Delhi Bench - III New Delhi ('NCLT') dated 12th June2018 a Moratorium has been declared under section 14 of the IBC.
6. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO.
The information pertaining to conservation of energy technologyabsorption Foreign exchange Earnings and outgo as required under Section 134 (3)(m) ofthe Companies Act 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 isfurnished in "Annexure-I" and is attached to this report.
7. RESEARCH AND DEVELOPMENT.
Particulars regarding Research & Development as required underSection 134 (3)(m) of the Companies Act 2013 read with Rule 8(3) of the Companies(Accounts) Rules 2014 is furnished in "Annexure-I" and is attached to thisreport.
8. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISKMANAGEMENT POLICY OF THE COMPANY.
The development and implementation of a Risk Management Policy afteridentifying the following elements of risks which in the opinion of the Board may threatenthe very existence of the Company itself.
Operational business and market risks.
Decrease in product prices
Interest rates risk and inventory carrying risk.
9. DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITSCORPORATE SOCIAL RESPONSIBILITY INITIATIVES
Since the Company doesn't fall under the companies required toconstitute the Corporate Social Responsibility Committee as per Section 135 of theCompanies Act 2013. Therefore the Company has not developed and implemented any Policyon Corporate Social Responsibility as the said provisions are not applicable.
10. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION186 OF THE COMPANIES ACT 2013.
There were no loans guarantees or investments made by the Company asspecified under Section 186 of the Companies Act 2013 during the year under review andParticulars of loans given investments made guarantees given and securities providedalong with the purpose for which the loan or guarantee or security is proposed to beutilized by the recipient are provided in the standalone financial.
11. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES.
All related party transactions are in the ordinary course of businessand at arm's length basis. The details of Related Party transactions of the Company aredisclosed in the note no. 32 of financial statement of the Company and in Form AOC 2 asannexed herewith marked as "Annexure II' to this report.
12. EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSEREMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIRREPORTS.
i. Statutory Auditors
M/s R. K. RELAN & CO. Chartered Accountants FRN N.002267N theStatutory Auditors of the Company were appointed as Statutory Auditors for a period of 5years in the Extra Ordinary General Meeting held on 07th April 2014 and are eligible forreappointment at ensuing Annual General Meeting of the Company. They have confirmed theireligibility to the effect that their re-appointment if made would be within theprescribed limits under the Act and that they are not disqualified for re-appointment.
The Notes on financial statement referred to in the Auditors' Reportare self-explanatory and do not call for any further comments. Please refer the notes onschedule 12 regarding fixed assets however the management could not undertake physicalverification of various assets due to insufficient technical manpower and closure of thefactory. However the management will try to take physical verification of all assets assoon as possible.
Certain obsolete unusable and broken items of furniture's &fitting computers & office equipments have been discarded from time to time inroutine exercise of renovation/ replenishment. The identification process with theobjective of writing off from books has been initiated. However due to lack of propermanpower this exercise is taking time.
ii. Secretarial Auditor
The Board has appointed M/s. B. Chakraborty & Co. CompanySecretaries Firm to conduct Secretarial Audit for the financial year 2017-18. TheSecretarial Audit Report for the financial year ended March 31st 2018 is annexed herewithmarked as "Annexure-III" to this Report.
The observations referred to in the Secretarial Auditors' Report areself-explanatory except the followings:-
1. Observation - Insufficient number of Independent directors in theBoard Composition of the Company.
Managements' Remark - the Management is unable to find suitable personfor the designation of Independent Directors of the Company due to uncertain financialconditions of the Company. We need to appoint at least two Independent Directors and awoman director as per the requirements of Companies Act 2013 and other applicable rulesmade there under.
2. Statutory dues - The Company has generally not been regular indepositing undisputed statutory dues including Provident Fund Employees' State InsuranceSales Tax Service Tax Value Added Tax GST TDS and some other material statutory duesapplicable to it with the appropriate authorities as at 31st March 2018.
Managements' Remark - The Company is facing financial problem due to norevenue from beer factory so the Company is unable to depositing undisputed statutory duesand BSE Listing Fee Bill. The Management is trying to solve these problems and willdeposit all pending statutory dues as per books of the Company.
13. COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OFREMUNERATION AND DISCHARGE OF THEIR DUTIES.
The Company has its Policy relating to appointment of Directorspayment of Managerial remuneration Directors' qualifications positive attributesindependence of Directors and other related matters as provided under Section 178(3) ofthe Companies Act 2013.
14. EXTRACT OF ANNUAL RETURN
The extracts of Annual Return in MGT- 9 pursuant to the provisions ofSection 92 read with Rule 12 of the Companies (Management and Administration) Rules 2014is furnished in "Annexure-IV" and is attached to this Report.
15. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR/PERIOD UNDERREVIEW
The Company had Five (5) Board Meetings during the financial year underreview.
| || |
Date of Meeting
Number of Directors Presents
|1. || |
|2. || |
|3. || |
|4. || |
|5. || |
16. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(5) of the Companies Act 2013with respect to the Directors'
Responsibility Statement it is hereby confirmed that:
i. in preparation of the annual accounts for the financial year2017-18 the applicable accounting standards have been followed along with properexplanation relating to material departures;
ii. the accounting policies selected and applied are consistent andjudgments and estimates made are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company as at 31st March 2018 and of the profit / (loss)of the company for year ended on that date;
iii. proper and sufficient care has been taken for maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the company and for preventing and detecting fraud andother irregularities;
iv. the annual accounts have been prepared on a going concern basis;
v. the directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
17. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company has no Subsidiary Joint Venture or Associate Company.
The Company has neither accepted nor renewed any deposits during theyear under review.
Shri Sanjiv Bali and Shree K. C. Garg Director who are liable toretire by rotation retires at the ensuing Annual General Meeting and being eligible offerhimself for re-appointment.
20. DECLARATION OF INDEPENDENT DIRECTORS.
The Independent Directors have submitted their disclosures to the Boardthat they fulfill all the requirements as stipulated in Section 149(6) of the CompaniesAct 2013 so as to qualify themselves to be appointed as Independent Directors under theprovisions of the Companies Act 2013 and the relevant rules.
21. RISK MANAGEMENT POLICY
The risk management includes identifying types of risks and itsassessment risk handling and monitoring and reporting. The implementation of riskmanagement policy has also been covered in the Management Discussion and Analysis whichforms part of this report.
Risk evaluation and management is an ongoing process within theOrganization. Your Company has comprehensive risk management policy which is periodicallyreviewed by the Committee and Board of the Company.
22. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGILMECHANISM
The Audit Committee consists of the following members:
Shree J. M. Malhotra Chairman Shree Rajiv Bali Member Shree KamalDutt
The above composition of the Audit Committee consists of all nonexecutive directors with one independent director.
The Company has established a vigil mechanism and oversees through thecommittee the genuine concerns expressed by the employees and other Directors.
The Company has also provided adequate safeguards against victimizationof employees and Directors who express their concerns.
The Company has also provided direct access to the Chairman of theAudit Committee on reporting issues concerning the interests of Company employees and theCompany.
23. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013 AND PROVIDING VIGIL MECHANISM.
The Company has no women employees so the requirements of The SexualHarassment of Women at the Workplace (Prevention Prohibition & Redressal) Act 2013are not attracted on the Company.
i. LISTING OF SECURITIES OF COMPANY
The Equity Shares of the Company continue to be listed at Bombay StockExchange Ltd. (BSE).
Trading of Equity Shares of the Company in dematerialized form iscompulsory for all shareholders in terms of the Notification issued by the Securities andExchange Board of India (SEBI).
Your Company has achieved higher level of dematerialization with 87.20%of the total number of Equity Shares being held in the electronic mode with the twodepositories.
25. PARTICULARS OF EMPLOYEES
The Company does not have any Key Managerial Personnel or employeereceiving remuneration of Rs. 500000/- per month or Rs. 6000000/- per annum andtherefore no particulars are required to be furnished under section 197(12) of the Actread with Rules 5(2) and 5(3) of the Companies (Appointment an Remuneration of ManagerialPersonnel) Rules 2014.
No remuneration being paid to Directors of the Company during the yearunder review except remuneration of Mr K. C. Garg and sitting fees paid for attendingmeetings of Board and Committees to the Non Executive Directors of the Company.
26. CORPORATE GOVERNANCE REPORT.
As listing agreement was replaced with SEBI (Listing Obligations andDisclosures Requirements) Regulations 2015 SEBI LODR.
Pursuant to provisions of Regulation 15(2) of SEBI (LODR) 2015provisions of corporate governance are not applicable to listed Companies having paid upcapital not exceeding Rs.10 Crore and net worth not exceeding Rs. 25 Crore as on the lastdate of the previous year. As paid up capital and net worth of the Company are notexceeded prescribed limit provisions of Corporate Governance are not applicable to theCompany.
A Certificate of the Board of Directors on Non submission of CorporateGovernance Report is included in the Annual Report as "Annexure-V".
27. MANAGEMENT DISCUSSION ANALYSIS
Management Discussion and Analysis Report as required in Regulation 34(2) (e) of SEBI Listing Regulations and Schedule V of the SEBI (Listing Obligations &disclosure Requirements) Regulations 2015 with Stock Exchanges is given in"Annexure-VI" forming part of this report.
28. INTERNAL FINANCIAL CONTROL
Company has a proper and adequate system of internal control to overseethe Company's financial reporting process disclosure of financial information reviewingthe performance of statutory and internal auditors with management adequacy of internalaudit function and internal control system related party transactions etc. and for thispurpose the Company has an Audit Committee.
Further the Company's Internal Auditors verify the informationconcerning the reliability of the financial statements as well as the compliance with yourCompany policies so as to maintain accountability of all its assets and correctness ofrecorded transactions.
29. EVALUATION OF BOARD AND INDIVIDUAL DIRECTORS
Pursuant to the Section 134(3)(p) of the Companies Act 2013 a formalevaluation has to be made by the Board of its own performance and that of its committeesand individual Directors.
During the year under review The Board could not carried out a formalannual evaluation of its own performance Board Committees and individual Directorspursuant to the provisions of the Companies Act 2013 and SEBI Listing Regulations due toinsufficient number of Independent directors.
Your Directors place on record their sincere thanks to bankersbusiness associates consultants various Government Authorities and Stakeholders of theCompany for their continued support extended to your Company's activities during the yearunder review. Your Directors also acknowledges gratefully the shareholders for theirsupport and confidence reposed on your Company.
For and on behalf of the Directors Mount Shivalik Industries Ltd.
| || |
(Baldev Dutt Bali)
|Dated : 1st September 2018 || |
|Place : New Delhi || |