To The Members
Your directors present herewith the 73rd Annual Report and the audited accounts for thefinancial year ended 31st March 2019.
1. Financial Results
The Company continues to face adverse financial situation due to lack of workingcapital. During the year under report the Company has reported loss of Rs.195.60 cr asagainst previous year loss of Rs.124.46 cr after accounting for Interest of Rs. 64.90 crDepreciation of Rs. 29.94 cr and providing for inventory obsolesce bad debts andimpairment of fixed assets. The turnover during the year was at very low level at Rs.16.50cr as against Rs.20.06 cr in the previous year. The Company has been facing challengingsituation. However the Management is putting its full efforts to come out of thissituation and to revive the operations. There was no change in nature of business of theCompany during the year.
2. Debt of the Company
As reported earlier 90% of the Secured Bank Loans have been assigned to EdelweissAssets Reconstruction Co. Ltd. and the balance loans are with Corporation Bank. InDecember 2018 the Corporation Bank moved a petition before the Hon'ble National CompanyLaw Tribunal (NCLT) at Mumbai for recovery of its dues. Thereafter the Company arrived ata One Time Settlement (OTS) with Corporation Bank with an OTS amount of Rs. 31.17 cr. Outof this the Company paid first installment of Rs.6.25 cr in December 2018.The balance ofRs. 2492 cr is payable in two installment of Rs. 16.76 cr (payable on 31.03.2019) and Rs.8.17 cr. (payable on 30.09.2019). The Company could not pay the installment of Rs. 16.75cr payable on 31.03.2019 due to liquidity problem. As a consequence the Corporation Bankpressed for its petition pending before NCLT. The Management is in the process ofresolving this matter.
In the meantime the Company is in the process of monetizing the land at Chinchwad toreduce its debts and is hopeful of concluding the transaction in due course. The necessarydisclosures would be filed with the Stock Exchanges as and when there is development inthis matter.
3. Shifting of Plant of the Company
It is important for the Company to reduce its debts by monetizing land at Chinchwad. Inthis direction the Company has shifted its manufacturing operations from Chinchwad tonearby Chakan Industrial Area by taking a new plant on 10 years lease with an option toextend by a further 10 years. The full scale operations at the new plant are expected tobe commenced very shortly.
The Board has not recommended any dividend on equity shares due to losses incurred bythe Company.
5. Operations & Management Discussion and Analysis
The current year's operations are covered in the Management Discussion and AnalysisReport. This Report as stipulated under Schedule V to the SEBI (Listing Obligations &Disclosure Requirements) Regulations 2015 is presented in a separate section formingpart of this annual report.
6. Corporate Governance
The Report on Corporate Governance as stipulated in Schedule V to the SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 forms part of this Report.Further it is stated that:
(i) Four Board Meetings were held during the year ended 31.3.2019. The details aregiven in Item No 3 of the Corporate Governance Report.
(ii) The composition of Audit Committee and other particulars are given in item No 4 ofthe Corporate Governance Report
(iii) The Company has established a vigil mechanism for directors and employees toreport their genuine concern and grievances. No personnel has been denied access to theAudit Committee.
(iv) The Company has adopted Risk Assessment Procedure which provides an approach bythe Management to identify potential events that may affect the Company to manage therisk within its risk appetite and to provide reasonable assurance regarding theachievement of the objectives of the Company. The Management prioritizes the risk andfinalizes the action plan for mitigation of the key risks. The Board is of the opinionthat there are no elements of risk which may threaten the existence of the Company.
(v) The number of shares held by non-executive directors as on 31.03.2019 have beendisclosed in item No 7 of the Corporate Governance Report.
(vi) The meeting of Independent Directors was held during the year pursuant torequirements under Schedule IV of the Companies Act 2013.
7. Directors and Key Managerial Personnel
Mrs. Rohita M. Doshi is retiring by rotation in accordance with the provisions of theCompanies Act 2013 and Articles of Association of the Company and being eligible offersherself for re-appointment. In terms of SEBI Listing Regulation 17(1A) Mr. S.PadmanabhanMr. Dilip J.Thakkar and Dr. Udo Weigel (whose term as independent directors is upto11.09.2019 as approved by shareholders at the 68th Annual General Meeting) ceased to beindependent directors with effect from 01.04.2019 upon attaining / crossing age of 75years. The Board on the recommendation of Nomination and Remuneration Committee at theirrespective meetings held on 22nd June 2019 has re-appointed these three directors for asecond term of consecutive five years with effect from 9th September 2019.
The present term of Mr Asit Javeri and Mr. Ramesh Adige as independent directors expireon 11th September 2019. The Board on the recommendation of Nomination and RemunerationCommittee at their respective meetings held on 22nd June 2019 has re-appointed these twodirectors for a second term of consecutive five years with effect from 12th September2019.
Each of the Independent Directors of the Company has given a declaration under Section149(7) of the Companies Act 2013 to the effect that each of them meet the criteria ofindependence as provided in sub-section 6 of Section 149 of the Companies Act 2013. TheBoard confirms that each of these Independent Directors is independent of the managementof the Company and has requisite qualification and experience to act as IndependentDirectors for the Company and further that in the Board's opinion each of them is a personof integrity and possess relevant expertise and experience in various fields.
Mr. Ramesh M. Tavhare aged 63 years resigned as Head (Legal) & Company Secretaryon health ground with effect from 14th March 2019. However he would render his serviceson a part time basis for some time for continuity and completing certain assignments. Mr.Umesh J. Mistry a member of The Institute of Company Secretaries of India has beenappointed as the Company Secretary and Compliance Officer with effect from 22nd May 2019.
8. Directors' Responsibility Statement as required under Section 134(5) of theCompanies Act 2013
The Directors state that
(i) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(ii) the directors had selected such accounting policies and applied them consistentlyand made judgements 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 lossof the Company for the year;
(iii) the directors had taken proper and sufficient care for the 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 directors had prepared the annual accounts on a going concern basis.
(v) the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
(vi) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
9. Conservation of energy technology absorption and foreign exchange earningsand outgo
The details as required under Clause-3 of Rule 8 of the Companies (Accounts) Rules2014 are provided in Annexure - I to the Directors' Report.
10. Particulars of Employees
The particulars of employees who were in receipt of remuneration not less than Rs.60lacs for the financial year ended on 31st March 2019 are given below:
|Name of the employee ||Mr. Maitreya Doshi |
|Designation of employee ||Chairman & Managing Director |
|Remuneration received ||? 107.16 Lakh |
|Nature of employment ||Contractual |
|Date of commencement of employment ||16.12.1985 |
|Qualification of the employee ||MBA BA(Eco) |
|Experience of the employee ||34 years |
|Age of the employee ||56 years |
|Last employment ||- |
Mr. Maitreya Doshi is related to Mrs. Rohita Doshi Director of the Company.
The other disclosures under Section 197(12) of the Companies Act 2013 read with Rule5(1) of the Companies (Appointment and remuneration of managerial personnel) Rules 2014are given in Annexure - II to the Directors' Report
M/s Jayesh Dadia & Associates LLP Chartered Accountants ( ICAI Firm RegistrationNumber 121142W / W100122 ) were appointed as Statutory Auditors of the Company for aperiod of five years at the 71st Annual General Meeting held on 14th September 2017.
12. Cost Audit
The Board has appointed ABK & Associates Cost Accountants (Regn.No.000036) toconduct audit of cost records for the Company's engineering machinery activities for thefinancial year 2019-20 on a remuneration Rs.1.65 lakh apart from reimbursement ofout-of-pocket expenses as recommended by the Audit Committee. As required under Section148(3) read with Rule 14 of the Companies (Audit and Auditors) Rules 2014 theremuneration approved by the Board is being placed for ratification by the shareholders atthe ensuing Annual General Meeting.
13. Other disclosures
The particulars as required under Section 134(3) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 are given below: (i) The Company has inplace adequate internal financial controls with reference to financial statements and suchcontrols are adequate and are operating effectively.
(ii) The extract of the Annual Return made as on 31.3.2019 under Section 92(3) of theCompanies Act 2013 in Form MGT9 is given in Annexure - III to the Directors' Report.
(iii) The Nomination and Remuneration Policy under Section 178(3) of the Companies Act2013 is given in Annexure - IV to the Directors' Report.
(iv) The report on the Corporate Social Responsibility under Companies (CorporateSocial Responsibility Policy) Rules 2014 is given in Annexure - V to the Directors'Report.
(v) The Secretarial Audit Report in Form MR3 prescribed under Rule 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 read with Section204(1) of the Companies Act 2013 is given in Annexure - VI to the Directors' Report.
(vi) There are no adverse remarks made by the Auditors or the Company Secretary inpractice in their respective reports.
(vii) The Nomination & Remuneration Committee of the Board has laid down the policyon Director's appointment remuneration and criteria for determining qualificationsindependence of directors etc. Para-7 of the Corporate Governance Report discloses thecriteria for payment of remuneration to non-executive directors and details ofremuneration paid to the Directors and that the Company does not have Stock Option Scheme.
(viii) The formal annual evaluation of the Board and individual directors has beencarried out at the meeting of the Independent Directors held on 11th February 2019 ascontemplated under the code for Independent Directors in Schedule VI to the Companies Act2013 as per the criteria laid down by the Nomination & Remuneration Committee of theBoard.
(ix) The Company has not entered into contract with related parties within the meaningof Section 188(1) of the Companies Act 2013 read with Rule 15 of the Companies (Meetingsof Board and its Powers) Rules 2014.
(x) The Company is not a subsidiary of any other company nor it has a subsidiarycompany. The Company has existing associate company namely PAL Credit & CapitalLtd.(PCCL). The consolidated financial statements presented herewith include thefinancials of PCCL. PCCL has discontinued its operations due to lack of funds.
(xi) No regulator or court or tribunal has passed any adverse significant and materialorder impacting the going concern status and the Company's operations in future.
(xii) The Company has adopted policy under Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and has constituted a Committee asrequired under the Act and the Rules thereunder. No complaints were received during theyear.
The Directors wish to express their appreciation of the continued support of theCompany's customers suppliers and shareholders. The Directors also wish to thankemployees at all levels for their contribution and co-operation during the difficultsituation of the Company.
On behalf of the Board of Directors
Chairman & Managing Director
Date: 22nd June 2019