Neogem India Limited
The Directors presents the Twenty-Eighth Annual Report of the Company and the AuditedStatements of Accounts for the financial year ended 31st March 2019.
1. Financial Summary or highlights/performance of the Company:
The financial highlights of the Company for the year ended March 31 2019 issummarized below:
| || || ||(Rs.) |
|Sr. No. ||Particulars ||For the year ended 31st March 2019 ||For the year ended 31st March 2018 |
|1.1 ||Revenue from Operations ||1961040 ||57672965 |
|1.2 ||Other Income ||12433 ||7251923 |
|1.3 ||Total Expenditure ||3711705 ||82271268 |
|1.4 ||Profit for the year before tax ||-1738232 ||-17346380 |
|1.5 ||Less: Current Tax ||0 ||0 |
| ||Deferred Tax ||23253 ||187149 |
|1.6 ||Profit After Tax & before Other comprehensive income (OCI) ||-1714979 ||-17159232 |
|1.7 ||Other comprehensive income ||0 ||0 |
|1.8 ||Other comprehensive income for the year net of tax ||0 ||0 |
|1.9 ||Profit after Tax (PAT) & after OCI ||-1714979 ||-17159232 |
During the year under review the Company has stopped its production activities. TheSales of Rs.1961040/-in current year pertains to previous year's stock. Due to stoppageof production the expenditure has reduced leading to reduction in loss. The Company hassuffered a loss of Rs. 1714979/-compared to loss suffered in the previous year ofRs.17346380/-.
Further due to financial crunch the Company could not repay the working capital loan(secured) to Punjab National Bank and Bank of India accordingly the accounts of theCompany has been classified as non-performing assets by the respective banks with effectfrom 31-03-2016. Pending confirmation received of the amount payable to Banks the Companyhas not provided for interest payable in the financial statement till 31-03-2019 sincethe same is not quantifiable and accordingly the loss for the year is understated to thatextent.
The management is putting in its best efforts to revive the Company's business and ishopeful of restoring the same in upcoming financial year.
In view of loss incurred by the Company your Directors do not recommend any dividendfor the financial year ended 2018-19.
The Board does not propose to carry any amounts to reserves.
4. Brief description of the Company's working during the year/ state of Company'saffair:
The Company has currently stopped its production of Jewellery. Gems and Jewellerysector is witnessing changes in consumer preferences due to adoption of western lifestyle.Consumers are demanding new designs and varieties in Jewellery. The Company is putting inefforts to revive the business.
5. Change in the nature of business if any:
During the year there was no change in nature of business.
6. 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:
No material changes have occurred subsequent to the close of the financial year of theCompany to which the balance sheet relates and the date of the report.
7. Details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future:
There were no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.
8. Details of Holding/Subsidiary/Joint Ventures/Associate Companies:
The Company did not have any Holding/Subsidiary Company/Joint Venture/Associate Companyduring the year under review. Accordingly the following disclosures of the same are notapplicable:
* Form AOC-1 pursuant to first proviso to sub-section (3) of section 129 of theCompanies Act 2013 read with rule 5 of the Companies (Accounts) Rules 2014) undersection 134of the Companies Act 2013 in Form AOC 1.
* Highlights of performance of subsidiaries associates and joint venture companies andtheir contribution to the overall performance of the Company pursuant to Rule 8(1) of theCompanies (Accounts) Rules 2014) under section 134of the Companies Act 2013.
* Receipt of commission from any holding company or subsidiary company by a Director ofthe Company.
9. Auditors Report:
There are no observations/ qualifications contained in the Auditors' Report andtherefore there are no explanations to be provided for in this report. However yourDirectors wish to state that with reference to the Opinion of the Auditor though theCompany has stopped its manufacturing activity the management is putting in best effortsto bring a turn around and is hopeful of successful revival and thus the annual accountsare prepared on a going concern basis.
10. Statutory Auditors:
At the 26thAnnual General Meeting held on 29th September 2017 M/s. D S Solanki &Co Chartered Accountants (Firm Registration No.124118W) were appointed as the StatutoryAuditors of the Company to hold office till the conclusion of the 31stAnnual GeneralMeeting to be held in the calendar year 2022.
11. Reporting of fraud by statutory auditors:
Further there was no fraud in the Company which was required to report by statutoryauditors of the Company under sub- section (12) of section 143 of Companies Act 2013.
12. Management Discussion And Analysis:
The Management Discussion and Analysis Report for the financial year under review asstipulated under Regulation 34 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations ("Listing Regulations") is annexed as a part of thisAnnual Report as Annexure 1.
13. Extract of the Annual Return:
Pursuant to Section 92(2) and 134(3)(a) of the Companies Act 2013 read with Rule 12(1)of the Companies (Management and Administration) Rules 2014 the extract of Annual Returnis placed on website of the Company at the following http://www.neogemindia.com/pdf/Extract-of-Annual-Report-MGT-9-Neogem-2018-19.pdf and which shallbe treated as part of this Report.
14. Conservation of energy technology absorption and foreign exchange earnings andoutgo:
The information required under Section 134(3)(m) of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014 with respect to conservation of energy technologyabsorption & foreign exchange earnings / outgo is given below:
A. Conservation of energy:
i. The steps taken or impact on conservation of energy:
Though our operations are not energy- intensive efforts have been made to conserveenergy by utilizing energy- efficient equipments.
ii. The steps taken by the Company for utilising alternate sources of energy:
The Company is using electricity as the main source of energy and is currently notexploring any alternate source of energy.
iii. The capital investment on energy conservation equipments:
B. Technology absorption:
i. The efforts made towards technology absorption:
The Directors are in constant touch with ongoing research to upgrade and absorbimproved technology for better line of products and to yield better quality costreduction.
ii. The benefits derived like product improvement cost reduction product developmentor import substitution:
Utilisation of indigenous raw material has led to cost reduction.
iii. In case of imported technology (imported during the last three years reckoned fromthe beginning of the financial year):
No technology has been imported by the Company.
iv. The expenditure incurred on Research and Development: Nil
C. Foreign exchange Earnings and Outgo:
1. The Company is engaged in activates relating to exports and taking measures forincreasing exports developing new export markets for production and formulating exportplans.
2. Total foreign exchange used and earned:
| || ||(Rs. in Lacs) |
|Particulars ||2018-19 ||2017-18 |
|Foreign exchange earned on F.O.B. basis ||- ||48482695 |
|Foreign exchange outgo ||- ||37065303 |
15. Directors and Key Managerial Personnel:
A. Changes in Directors and Key Managerial Personnel:
In accordance with the provisions of the Companies Act 2013 read with the applicablerules thereto including any statutory modification(s) or re-enactment thereof for thetime being in force (the Act') Mr. Gaurav Doshi (DIN: 00166703) who is liable toretire by rotation at the ensuing Annual General Meeting and being eligible offershimself for appointment.
Brief resume of the director proposed to be re-appointed and relevant informationincluding nature of his expertise in specific functional areas qualifications terms ofappointment details of remuneration names of the Companies in which he holdsdirectorship and the memberships/chairmanships of Committees of the Board hisshareholding in the Company etc. as stipulated under the Listing Regulations andSecretarial Standards have been furnished separately in the Notice convening this AGM.
Further to fill up the vacancy of Whole-time Company Secretary as required pursuantto Section 203 of the Companies Act 2013 along with Regulation 6 of SEBI (LODR)Regulations Mr. Pratik Rajendra Koralwala(ACS No. A45594) was appointed as the CompanySecretary & Compliance Officer of the Company w.e.f. 18th December 2018.
The Registrar of Companies (ROC) Mumbai published on 11thSeptember 2017 the list ofDisqualified Directors of Defaulting Companies consisting name of Directors who standDisqualified u/s 164(2) of Companies Act 2013 for a period of five years from 1stNovember 2016 to 31st October 2021 for not filing of Financial Statements or AnnualReturns for a continuous period of three financial years.
Mr. Jayant Bhikaji Nagarkar (DIN No. 00131405) Independent Director of the Company wasalso named in the said list for non-filing in another Company. Thus he standsdisqualified and his office of Independent Director was vacated.
B. Statement on Independent Directors' declaration and disclosure of disqualificationby the Directors:
The Company has received the declarations u/s 149(7) of the Act from the IndependentDirector Mrs. Renu Kathuria (DIN: 01669882) of the Company confirming that she meets thecriteria of Independence as prescribed both under the Act and the Securities and ExchangeBoard of India (Listing Obligations and Disclosures Requirements) Regulations 2015[Listing Regulations']. The Company has also received Disclosure of Interest byDirector as per the provisions of Section 184 of Companies Act 2013 and that she is notdisqualified to act as a Director under the Act; and in the opinion of the Board ofDirectors the Independent Director fulfill the criteria of independence as provided underthe Act rules made thereunder read with the Listing Regulations and that she isindependent of the management.
C. Board Evaluation:
Pursuant to the provisions of the Companies Act 2013 and Listing Regulations theBoard has carried out an annual performance evaluation of its own performance ofindividual Directors as well as the evaluation of the working of its Audit Nomination& Remuneration and Stakeholders' Relationship Committees. The Directors were evaluatedon aspects such as attendance and contribution at Board and Committee meetingscommunicating inter se board members and guidance and support to the management outsideBoard and Committee meetings. The Board approved the evaluation results as collated by theNomination and Remuneration Committee.
i. Independent Director:
In accordance with the criteria suggested by the Nomination and Remuneration Committeethe performance of independent director was evaluated by the entire Board of Directors (inthe absence of the director getting evaluated) on various parameters like engagementleadership analysis decision making communication governance interest ofstakeholders etc. The Board was of the unanimous view that every Independent Director wasa reputed professional and brought their rich experience to the deliberations of theBoard. The Board also appreciated the contribution made by all Independent Directors inguiding the management to achieving higher growth and continuance of each independentdirector on the Board will be in the interest of the Company.
ii. Non-Independent Directors:
The performance of all the non-independent directors was evaluated by the IndependentDirector at their separate meeting. Further their performance was also evaluated by theBoard of Directors. The various criteria considered for the purpose of evaluation includedleadership engagement transparency analysis decision making functional knowledgegovernance stakeholders etc. The Board was of the unanimous view that all thenon-independent directors were providing good business and people leadership.
iii. Familiarization Programme to Independent Director:
Pursuant to Regulation 25 (7) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company carries out Familiarization Programme for the IndependentDirectors on their role rights responsibilities in the Company the nature of theindustry in which the Company operates and business model of the company in addition toregular presentation on technical operations marketing and exports and financialstatements. In addition to the above Directors are periodically advised about the changeseffected in the Corporate Law Listing Regulations with regard to their roles rights andresponsibilities as Directors of the Company
16. Details of Committees of the Board:
Currently the Board has 3 Committees: the Audit Committee Nomination and RemunerationCommittee and Stakeholders' Relationship Committee. The Composition of various committeesand compliances as per the applicable provisions of the Companies Act 2013 and the Rulesthereunder and Listing Regulations are as follows:
A. i. Audit Committee:
The Board has constituted an Audit Committee comprising of Mrs. Renu Kathuria (DIN:01669882) Independent Director as the Chairperson of the Committee and Mr. Ronak Doshi(DIN: 00102959) Whole-Time Director and CFO and Mr. Gaurav Doshi (DIN-00166703) ManagingDirector as the members of the Committee.
The recommendations of the Audit Committee are always welcomed and accepted by theBoard hence there is no further explanation to be provided for in this Report and all themajor steps impacting the financials of the Company are undertaken only after theconsultation of the Audit Committee.
A. ii. Details of establishment of vigil mechanism for directors and employees:
The Company has established vigil mechanism pursuant to Section 177(9) of the CompaniesAct 2013 for Directors and Employees to report their genuine concerns / instances of anyunethical / improper activity directly to Ms. Renu Kathuria (DIN: 01669882) Chairpersonof the Audit Committee as a Protected Disclosure and has also taken steps to safeguardany person using this mechanism from victimization and in appropriate and exceptionalcases.
B. Nomination and Remuneration Committee:
The Nomination and Remuneration Committee comprises of Mrs. Renu Kathuria (DIN:01669882) Independent Director as the Chairperson of the Committee and Mr. Ronak Doshi(DIN: 00102959) Whole-Time Director and CFO as the member of the Committee. The Committeehas framed a policy to determine the criteria and qualification for appointment ofDirectors positive attributes independence of Director attributes for appointment andbasis of determination of remuneration and performance evaluation of all the DirectorsKey Managerial Personnel and other employees and methods for their sustainability. Thedetailed policy is also posted onto the website of the Company at thehttp://www.neogemindia.com/pdf/Nomination-and-Remuneration-Policy.pdf.
C. Stakeholder's Relationship Committee:
The Stakeholder's Relationship Committee comprises of Mrs. Renu Kathuria (DIN01669882) Independent Director as the Chairperson of the said Committee and Mr. RonakDoshi (DIN:00102959) Whole-time Director and Mr. Gaurav Doshi (DIN-00166703) ManagingDirector are the members of the Committee. The role of the Committee is to consider andresolve securities holders' complaint. The meetings of the Committee are held once in aquarter and the complaints are responded within the time frame provided.
17. Secretarial Auditor and its Report:
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorshave appointed M/s. Hemanshu Kapadia & Associates Company Secretaries in Practice toundertake the Secretarial Audit of the Company for FY 2018 - 19. The Report of theSecretarial Auditor is annexed herewith as Annexure 2. The management's replies to theobservations of the Secretarial Auditors are as under:
|Sr. no. ||Auditor's Observations ||Reply of Management |
|1. ||The Company has not appointed Internal Auditor ||Though the Company has not formally appointed Internal Auditor in accordance with the size of the Company the Company has proper internal control systems & procedures in place. |
|2. ||The composition of Audit and Nomination and . Remuneration Committee is not as per the Companies Act 2013 ||Due to disqualification of one Independent Director the composition of the committees is not complied. However the Company is in process of appointing two Non-Executive/ Independent Directors. |
18. Number of meetings of the Board of Directors:
The Board of Directors met six (6) times during the Financial Year. The intervening gapbetween any two meetings was not more than 120 days as prescribed by the Companies Act2013. Details of dates of Board meeting are as under:
|Sr. No. ||Type of Meeting ||Date |
|1. ||Board Meeting ||May 30 2018 |
|2. ||Board Meeting ||August 13 2018 |
|3. ||Board Meeting ||September 1 2018 |
|4. ||Board Meeting ||November 14 2018 |
|5. ||Board Meeting ||December 18 2018 |
|6. ||Board Meeting ||February12 2019 |
19. Particulars of loans guarantees or investments under section 186:
During the year under review the Company has not provided any loans made investmentsgave guarantees or subscribed/purchased securities under Section 186 of the Companies Act2013.
20. Particulars of contracts or arrangements with related parties:
The Company during the year has not entered into any transaction as specified underSection 188(1) of the Companies Act 2014 with any related parties. Accordingly thedisclosure of Related Party Transactions to be provided under section 134(3)(h) of theCompanies Act 2013 in Form AOC 2 is not applicable.
The Company has neither accepted nor invited any deposit from the public within themeaning of Section 73 of the Companies Act 2013 read with the Companies (Acceptance ofDeposit Rules) 2014.
However as disclosed in Note No. 21(b) forming part of Balance Sheet the company ishaving outstanding balance of unsecured loan of Rs. 2231320/- as on 31.03.2019 fromDirectors of the Company for which proper declaration has been furnished by them asrequired under Rule 2(viii) of the Companies (Acceptance of Deposits) Rules 2014 duringthe period under review.
22. Voting Rights of Employees:
During the year under review the company has not given loan to any employee forpurchase of its own shares as per Section 67 (3) (c) of Companies Act 2013. Thereforethe Company not required to made disclosure as per Rule 16 (4) of Companies (Share Capitaland Debentures) Rules 2014.
23. Disclosure regarding Issue of Employee Stock Options:
The Company has not issued shares under employee's stock options scheme pursuant toprovisions of Section Rule 12(9) of Companies (Share Capital and Debenture Rules 2014).So the question does not arise about voting rights not exercised by employee.
24. Disclosure regarding issue of sweat equity shares:
The Company has not issued sweat equity shares pursuant to provisions of Section 54read with Rule 8 of Companies (Share Capital and Debenture Rules 2014) during thefinancial year.
25. Directors' Responsibility Statement:
Pursuant to Sections 134(3)(c) & 134(5) of the Companies Act 2013 the Board ofDirectors of the Company hereby confirm that:
a) in the preparation of the Annual Accounts the applicable Accounting Standards havebeen followed along with proper explanation relating to material departures if any;
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 the 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;
e) the Directors had laid down internal financial controls to be followed by theCompany & that such internal financial controls are adequate and were operatingeffectively; and
f) the Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
26. Managerial Remuneration:
A. Details of the remuneration of each director to the median remuneration of theemployees of the Company and other details as required pursuant to Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are notapplicable as the Company does not have any employees on its payroll as at 31st March 2019and none of the Directors or Key Managerial Personnel has drawn any remuneration duringthe financial year 2018-19 except remuneration of Company Secretary whose details Formspart of MGT-9.
B. Details of the top ten employees in terms of remuneration drawn falling within thepreview of Section 197 of the Companies Act 2013 read with Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is not applicable asthe Company did not have any employee on its payroll.
27. Report on Corporate Governance:
As per the provisions of Securities and Exchange Board of India (Listing Obligationsand Disclosures Requirements) Regulations 2015 the provisions of Corporate Governanceare not applicable to your Company. Thus the Company is not required to annexed Report onCorporate Governance.
28. Corporate Social Responsibility (CSR):
In line with the provisions of the Companies Act 2013 and the rules framed there underwith respect to the Corporate Social Responsibility (CSR) your Company is not governed bythe provisions of Section 135 of the Companies Act 2013 and Companies (Corporate SocialResponsibility Policy) Rules 2014. So the Company is not required to formulate a policyon CSR and was not required to constitute a CSR Committee.
29. Risk Assessment and Management:
Your Company has a well-defined Risk Management System in place as a part of its goodCorporate Governance practices. Your Company has assigned the ownership of key risks tovarious Risk Owners and has made the concerned departments and officials responsible formitigation plans and review of these risks from time to time. All the risks are identifiedat various departmental levels and suitable mitigation measures are thereafter adopted.These are subjected to a quarterly review by the Board.
30. Internal Financial Control System and their Adequacy:
Internal Financial Controls are an integrated part of the risk management processaddressing financial and financial reporting risks. The management exercises financialcontrol on the operations through a well-defined budget monitoring process and otherstandard operating procedures. In addition to the above the Audit Committee and the Boardspecifically review the Internal Control and Financial Reporting process prevalent in theCompany. Assurance on the effectiveness of internal financial controls is obtained throughmanagement reviews control self-assessment and continuous monitoring by functionalexperts. At the end of the period the CFO gives a declaration in the appropriate formatto certify that the financial statements prepared are accurate and complete in all aspectsand that there are no significant issues that can impair the financial performance of theCompany.
31. Secretarial Standards:
The Company complies with the Secretarial Standards 1 and 2 issued by Institute ofCompany Secretaries of India.
32. Disclosure under the Sexual Harassment of Women at work place (PreventionProhibition and Redressal) Act 2013:
As at 31st March 2019 there is only one employee on the payroll of the Company andthus the Company was not required to constitute Internal Complaints Committee under theSexual Harassment of Women at work place (Prevention Prohibition and Redressal) Act2013.
33. Cost Audit:
The Company does not fall within the provisions of Section 148 of the Companies Act2013 read with the Companies (Cost Records and Audit) Rules therefore no such recordsrequired to be maintained.
34. Other Disclosures/Reporting:
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:
a) Issue of equity shares with differential rights as to dividend voting or otherwise.
b) Names of the Companies who have become or ceased to be its Subsidiaries jointventures or associate companies during the year.
The Board of Directors expresses their deep gratitude for the co-operation and supportextended to the Company by its customers suppliers Bankers and various Governmentagencies. Your Directors also place on record the commitment and involvements of theemployees at all levels and look forward to their continuous co-operation.
| ||For and on behalf of the Board of Directors |
| ||Gaurav Doshi |
| ||Chairman & Managing Director |
| ||DIN-00166703 |
| ||G-32 Gems & Jewellery Complex III |
| ||Seepz (SEZ) Andheri (E) Mumbai-400 096 |
|Date: 14th August 2019. || |
|Place: Mumbai || |
|Registered Office: || |
|G-32 Gems&JewelleryComplex III || |
|Seepz (SEZ) Andheri (E) Mumbai-400 096 || |
|CIN: L36911MH1991PLC063357 || |