Your Directors are pleased to present to you the Twenty First Annual Report on thebusiness operations of the Company together with the Audited Financial Statements ofAccounts for the Financial Year ended 31st March 2019.
1. Financial Results :
The Financial Performance of your company for the year ended March 31 2019 issummarized below:-
(Rs. in Lakhs)
|Particulars ||FY 2018-19 ||FY 2017-18 |
|Revenue from Operations ||854.00 ||986.00 |
|Other Income ||53.00 ||279.00 |
|Total Revenue ||907.00 ||1265.00 |
|Expenses before Finance cost and Depreciation/Amortizations ||1523.00 ||1260.00 |
|Profit / (Loss) before Finance cost and Depreciation/Amortizations ||(616) ||5 |
|Less: Finance Cost ||219.41 ||212.00 |
|Less: Depreciation / Amortization ||259.82 ||273.00 |
|Net profit/(Loss) before Exceptional items and Tax ||(1095.00) ||(480.00) |
|Provision for Contingency Doubtful Receivables Loans and advances and other current & non-current assets and other liabilities ||(371.00) ||(268.00) |
|Net profit/(Loss) before tax ||(1466.00) ||(748.00) |
|Profit/(Loss) for the year ||(1466.00) ||(748.00) |
2 Operational Review:
The total revenue from operations for the year under review was Rs. 907.00 Lakhs. TheNet Loss for the year under review was Rs. 1466 lakhs mainly due to the lower capacityUtilization of the manufacturing capacity on account of the continued inadequate WorkingCapital to run the operations of the Company due to its weak financial position.
M/ s Edelweiss Asset Reconstruction Company Limited (EARCL) had filed a referencebearing no. 1799 Of 2018 for initiation of Corporate Insolvency Resolution Process (CIRP)under of the Insolvency and Bankruptcy Code 2016 (IBC) against your Company fornon-servicing of their Outstanding amounts. The Hon'ble National Company Law Tribunal(NCLT) Mumbai bench vide order dated February 13 2019 has admitted the said reference.According to the said order Mr. R K Girdhar had taken charge as Interim ResolutionProfessional (IRP) on February 13 2019. Thereafter on the application of the Committeeof Creditors the Hon'ble NCLT vide its order dated April 23 2018 appointed Mr. PrashantJain as the Resolution Professional (RP) to carry on day to day operation of the Company.
As per section 17 of the IBC the powers of the Board of Directors stands suspended andsuch powers have vested with the RP appointed as said. The Company is currently under thecontrol of Resolution Professional deputed by the Hon'ble NCLT for a period of 6 (Six)Months from February 13 2019 which period expired on August 12 2019. The Committee ofCreditors (COC) in its Meeting held on August 07 2019 approved the extension of the CIRPperiod for additional 90 days beyond 12th August 2019 i.e. the end of 180 days from theCIRP date in accordance with the provisions as laid down in Section 12(2) of the IBC 2016and Mr. Prashant Jain the Resolution Professional has filed an application before theNCLT Mumbai Bench on August 08 2019 under Section 12(2) of IBC 2016 read withRegulation 40 of Insolvency And Bankruptcy Board of India (Insolvency Resolution ProcessFor Corporate Persons) Regulations 2016 for approval of the extension of the period ofCIRP.
3 Management Discussion & Analysis
A. INDUSTRY AND COMPANY OVERVIEW
The world glass industry generates yearly revenue of $75 billion. Leading exportingcountries of glass and ceramics (two important materials in the sector) are the USFrance Japan China India and Germany.
The most common products manufactured in the global glass industry are fiberglass flatglass glass containers and specialty products such as lenses optic fibers mirrorsglassware and TV tubes. The specialty products segment represents around 60% of revenuegenerated in the global glass industry.
End-use sectors such as the container bottling automotive and construction industriesaccount for the greatest demand. Low-cost operations are key as price dictates productsales. Larger outfits benefit from efficiencies of scale accounting for the industry'shigh concentration. Smaller outfits compete through the production of specialty productsand by concentrating their efforts on local markets.
Key Glass Market Segments
The world glass packaging market growth in established markets will slow in the maturephase while emerging markets will offer greater growth potential over the coming years.Developing markets will benefit from rising levels of disposable income and increasedconsumer spending on food beverage and cosmetics.
The world flat glass market growth will be fuelled by demand for use in energyconservation and other sectors economic growth automotive industry growth and increasedinfrastructural construction activity. The building construction industry represents thelargest single end user for flat glass followed by automotive applications. The EU theUS and China dominate the global flat glass market.
In North America and the EU there has been a decline in glass fiber reinforcementdemand for end-user applications worsened by the Euro zone crisis. However strong demandfrom Eastern Europe and Asia-Pacific has lessened the overall blow to the market. Chinadominates the Asia- Pacific region with a thriving glass fiber industry. Demand fromother developing economies including Brazil India Russia and Eastern Europe isexpected to rise in coming years due to investment in construction and infrastructureactivity. Wind energy will witness the fastest rate of growth as end use application forglass fibers exceeding 14% a year due to activity in the wind energy sector.
Smart glass is used to vary window transmittance and thermal properties in accordancewith ambient conditions and specific occupant needs. Demand from end-user sectors like theautomotive and construction industries is having a positive impact on the smart glassmarket. By 2020 smart glass for use in transportation and architectural facades privacyscreens and windows is expected to reach a value of $700 million.
Glass Industry Trends
The world glass manufacturing market will record strong growth in coming years fuelledby technological innovation that should lead to a higher number of flat glassapplications. Rising levels of activity in the global automobile industry will also fueldemand for flat glass.
In addition Koncept Analytics predicts that changing government legislation makingflat glass mandatory in certain situations for energy conservation purposes will alsoboost market growth. Developments in the area of PV technology continue to lead to everywidening PV use also driving use of flat glass. Sources: Reportlinker.com
India's GDP is estimated to have increased 7.00 to 7.50 per cent in 2018-19. As perCentral Statistics Organization (CSO) and International Monetary Fund (IMF) India hasemerged as the fastest growing major economy in the world and is expected to be one of thetop three economic powers of the world over the next 10-15 years backed by its strongdemocracy and partnerships.
India has retained its position as the third largest startup base in the world withover 4750 technology start-ups.
According the report from ASSOCHAM & Thought Arbitrage Research Institute. India'slabour force is expected to reach a figure of about 160-170 million by 2020 based on rateof population growth increased labour force participation and higher educationenrolment among various other factors.
India's foreign exchange reserves were US$ 405.64 billion in the week up to March 152019 according to data from the RBI. Sources : ibef.org
B. HUMAN CAPITAL
In the ever changing business environment where people are key differentiator theCompany believes it is essential to have credible transparent and uniform peoplemanagement process. Driven by this belief and to keep ourselves abreast of the changingexternal scenario our People Management process gets continually updated.
Relations with employees across factory and corporate office continued to be cordial.HR policies of the Company are focused on developing the potential of each employee. Withthis premise a comprehensive set of HR policies are in place aimed at attractingretaining and motivating employees at all levels. Your Company had 85 employees as of 31stMarch 2019.
The statement containing particulars of employees as required under Section 197(12) ofthe Companies Act 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed herewith as Annexure"D" and forms part of this Report.
C. ADEQUACY OF INTERNAL CONTROL SYSTEMS
The Company has adequate internal control procedures commensurate with its size andnature of business. The objective of these procedures is to ensure efficient use andprotection of the Company's resources accuracy in financial reporting and due complianceof statues and corporate policies and procedures. The Company's accounting and reportingguidelines ensure that transactions are recorded and reported in conformity with thegenerally accepted accounting principles.
D. INTERNAL FINANCIAL CONTROLS:
The Company has adequate internal controls commensurate with its size and nature of itsbusiness. The Board has reviewed internal financial controls of the Company and the AuditCommittee monitors the same in consultation with Internal Auditors of the Company.
E. RISK MANAGEMENT
The Company has in place a Risk Management framework to identify measure and mitigatebusiness risks and threats. This framework seeks to create transparency minimize adverseimpact on the business objective and enhance the Company's competitive advantage. Thisrisk framework thus helps in managing market credit and operations risks and quantifiesexposure and potential impact at a Company level.
4. Share Capital
As on 31st March 2019 the Company's issued and paid up capital stands Rs.335500000/- divided into 33550000 fully paid up equity shares of Rs. 10/- each.During the year under review your Company's Authorized Issued Subscribed and Paid upShare Capital remained unchanged.
In view of the loss for the year and the accumulated losses of the previous year yourDirectors are unable to recommend any dividend for the year ended March 31 2019.
6. Extract of Annual Return
Pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Rule 12(1) of theCompanies (Management and Administration) Rules 2014 the extracts of the Annual Returnin Form MGT-9 as at 31st March 2019 forms part of this report as "AnnexureA".
7. Board of Directors and Key Managerial Personnel
The Hon'ble NCLT vide order dated February 13 2019 had initiated the CIRP Proceedingsagainst the Company and pursuant to Section 17 of the IBC the powers of the Board ofDirectors of the Company stood suspended and such powers are vested with the ResolutionProfessional Mr. Prashant Jain.
The outcome of the CIRP may result in change in the Board of Directors of the Companyfollowed by reconstitution of the statutory committees of the Board of Directors of theCompany. In accordance with the provisions of the Companies Act 2013 ('Act') Mr. AmrutS. Gada retires by rotation at the ensuing Annual General Meeting ('AGM') and is eligiblefor reappointment.
Ms. Dipti Shah has resigned from the post of Independent Director w.e.f. February 012019. The Board places on record its sincere appreciation for the contribution made by Ms.Dipti Shah during her tenure as an Independent Director.
Mr. Rengrajan Ramaswamy Independent Director of the Company since past 8 years left forheavenly abode on March 28 2019. This was truly a great loss for the Company. Mr.Rengrajan will be profoundly missed by everyone whose lives he touched. May his soul restin peace.
Mr. Ashwin S. Shetty Vice President - Operations & Company Secretary is theKey Managerial Person.
8. Corporate Governance
Corporate Governance in your Company is about Commitment to values ethical businessconduct nurturing good business ethics and creating value for its stakeholders in linewith the principles of fairness equity transparency accountability and dissemination ofinformation. Your Company's efforts are driven by the fundamental objectives of maximizingvalue by employing resources in opportunities that generate consistent returns andposition it for sustained growth. In terms of Regulation 27 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 a separate report on CorporateGovernance Management Discussion and Analysis along with your Company's StatutoryAuditors' Certificate dated 14th August 2019 confirming the above complianceis annexed to and forms part of the Directors' Report.
9. Public Deposits
During the year under review your Company has not accepted any deposits frompublic/members in pursuance of section 73 of the Companies Act 2013 read with Companies[Acceptance of Deposits] Rules 2014. As at 31st March 2019 the Company hasoutstanding fixed deposit of Rs. 165983951/- (Including Accrued Interest). During theyear under review your company has paid fixed Deposits of an amount of Rs. 2711878/- tofixed deposit holders including interest.
10. Sexual Harassment Policy
The Company has in place a Prevention of Sexual Harassment Policy in line with therequirements of the Sexual Harassment of Women at the Workplace (Prevention Prohibitionand Redressal) Act 2013. An Internal Complaints Committee has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy. During the financial year 2018-19 nocomplaints were received by the Company related to sexual harassment.
11. Directors Responsibility Statement
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
(i) That in preparation of the annual financial statements for the year ended March 312019 the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;
(ii) That appropriate accounting policies have been selected & applied consistently& judgments and estimates made are reasonable & prudent so as to give a true &fair view of the state of affairs of the Company at the end of the financial year endedMarch 31 2019 & of the profit or Loss of the Company for the said year;
(iii) That proper & sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company & for preventing & detecting fraud &other irregularities;
(iv) That the annual accounts have been prepared on a going concern basis.
(v) The Company has an established internal financial control framework includinginternal controls over financial reporting operating controls and for the prevention& detection of frauds & errors. The framework is reviewed periodically byManagement and tested by the internal audit team appointed by the Management to conductthe internal audit. Based on the periodical testing the framework is strengthened fromtime to time to ensure the adequacy and effectiveness of internal financial controls.
(vi) That systems to ensure compliance with the provisions of all applicable laws werein place and that such systems were adequate and operating effectively.
In accordance with Section 139 of the Companies Act 2013 the Members of the Companyin its Twentieth Annual General Meeting held on September 29 2018 had appointed M/s.KSPM & Associates Chartered Accountants Firm registration no. 104723W as theStatutory Auditors of the Company. Earlier proviso to Section 139(1) of the CompaniesAct 2013 provided that the appointment of the Statutory Auditors is required to beratified by the Members at every Annual General Meeting held during their tenure. Howeverthe said proviso was omitted w.e.f. 7th May 2018 by the Companies Amendment Act 2017 andthereby the notice of the Twenty First Annual General Meeting does not include theproposal seeking ratification of the appointment of the Statutory Auditors.
13. Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act 2013 M/s. TariqBudgujar & Co. Practicing Company Secretaries to conduct Secretarial Audit for thefinancial year ended March 31 2018. The Qualifications stated in the Secretarial AuditReport are self-explanatory. The Secretarial Audit Report is attached as 'Annexure B'.
14. Related Party Transactions:
All related party transactions that were entered into during the financial year were inthe ordinary course of the business and on an arm's length basis. The Company has notentered into material contracts or arrangements or transactions with related parties inaccordance with Section 188 of the Act read with the Companies (Meetings of Board and itsPowers) Rules 2014. The details of the related party transactions are set out in Notes tothe Standalone Financial Statements of the Company.
Form AOC - 2 pursuant to Section 134 (3) (h) of the Companies Act 2013 read with Rule8(2) of the Companies (Accounts) Rules 2014 is set out in the Annexure-E to this report.
15. Conservation of Energy Technology Absorption and Foreign Exchange Earnings andOutgo.
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014 is annexed as "Annexure C" forms part ofthis Report.
16. Particulars of Loans Guarantees and Investments:
No loans guarantees or Investments covered under sections 186 of the Companies Act2013 have been given or provided during the year. Particulars of loans given andinvestments made & outstanding as on March 31 2019 are given in the notes formingpart of the financial statement.
17. Vigil Mechanism/whistle Blower Policy:
The Board of Directors of the Company has pursuant to the provisions of Section 177(9)of the Companies Act 2013 read with Rule 7 of the Companies (Meetings of Board and itsPowers) Rules 2014 framed "Vigil Mechanism Policy" for Directors and employeesof the Company to provide a mechanism which ensures adequate safeguards to employees andDirectors from any victimization on raising of concerns of any violations of legal orregulatory requirements incorrect or misrepresentation of any financial statements andreports etc. The employees of the Company have the right/ option to report theirconcern/grievance to the Chairman of the Audit Committee. The said Policy is available onthe website of the Company .The Company is committed to adhere to the highest standards ofethical moral and legal conduct of business operations.
18. Evaluation of Board Committees and Directors
Pursuant to the provisions of the Companies Act 2013 and regulation 17(10) of theListing Regulations the Board has carried out the annual performance evaluation of itsown performance the Directors individually as well as the evaluation of the working ofits Statutory Committees. A structured questionnaire was prepared after taking intoconsideration inputs received from the Directors covering various aspects of the Board'sfunctioning such as adequacy of the composition of the Board and its Committees Boardculture execution and performance of specific duties obligations and governance. Aseparate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board who were evaluated on parameters such as level ofengagement and contribution independence of judgement safeguarding the interest of theminority shareholders etc. The performance evaluation of the Independent Directors wascarried out by the entire Board. The performance evaluation of the Chairman and the NonIndependent Directors was carried out by the Independent Directors. Based on thesecriteria the performance of the Board various Board Committees Chairman and IndividualDirectors (including Independent Directors) was found to be satisfactory.
20. Familiarization Programme of Independent Directors:
In compliance with the requirements of SEBI (LODR) Regulations 2015 the Company hasput in place a familiarization program for Independent Directors to familiarize them withtheir role rights and responsibilities as Directors the operations of the Companybusiness overview etc. The details of the familiarization program is explained in theCorporate Governance Report and the same is also available on the website of the Company.
21. Disclosure Under Section 197(12) of The Companies Act 2013 And Other Disclosuresas Per Rule 5 of Companies (Appointment & Remuneration) Rules 2014:
The statement containing particulars of employees as required under 197(12) of theCompanies Act 2013 read along with Rule 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is not applicable to (he Company as noemployees were in
receipt of remuneration above the limits specified in Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014. The ratio of theremuneration of each Director to the median employee's remuneration and other details interms of Section 197(12) of the Companies Act 2013 read along with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexedherewith as Annexure 'D' and forms part of this Report
22. Corporate Social Responsibility Policy
As per section 135 of the Companies Act 2013 the Company is not required to undertakeany CSR activities for the financial year 2018-19 and accordingly information required tobe provided under Section 134 (3) (o) of the Companies Act 2013 read with the Rule 9 ofthe Companies (Accounts) Rules 2014 in relation to disclosure about Corporate SocialResponsibility are currently not applicable to the Company.
23. Cautionary Statements
Statements in this Report and the Management Discussion and Analysis may be forwardlooking within the meaning of the applicable securities laws and regulations. Actualresults may differ materially from those expressed in the statement. Certain factors thatcould affect the Company's operations include increase in price of inputs availability ofraw materials changes in Government regulations tax laws economic conditions and otherfactors.
Your Directors would like to express their appreciation for the assistance andco-operation received from the Government authorities banks customers businessassociates and members during the year under review. Your Directors also wish to place onrecord their deep sense of appreciation for the committed services by the executivesstaff and workers of the Company. For and on behalf of the Board of Directors
|Amrut S. Gada |
|Chairman and Managing Director |
|Place: Mumbai |
|Date: August 14 2019 |