DIRECTORS' REPORT TO THE SHAREHOLDERS To, The Members Your Directors present the Forty Third Annual Report, together with the audited Accounts of your Company for the accounting period ended 31 st March 2015 The Management of the Company was compelled to suspend the operations of the Plant at various shifts due to labor unrest & cessation of work by the workers unions from time to time even after signing of LTA and finally the Management declared lock out of the Company w.e.f. 27th December, 2012. 2. STATE OF AFFAIRS: The company could not achieve any production for the current period after the first quarter due to lock out and conciliation is in progress. We expect to settle the issue at the earliest. 3. GENERAL OUTLOOK: The Company has undertaken modification of the plant to increase Production. 4. HIGHLIGHTS OFTHEYEAR The Company has not taken up production during the year due to lockout. 5. REFERENCETO B.I.F.R. Company has filed a reference u/s 15 (I) of the Sick Industries Companies (Special Provisions) Act 1965 (SICA) before Board for Industrial & Financial Reconstruction (B.I.F.R) informing the said Board that net worth of the Company had been fully eroded fully on 30-09-2012 and the Company has become a Sick Company. 6. DIVIDEND Your Directors regret their inability to recommend any dividend in view of losses incurred. 7. RESERVES The board reports that The Company has not transferred any amount to the reserves during the current financial year. 8. MATERIAL CHANGES AND COMMITMENTS: There have been no material changes that have occurred subsequent to the close of the financial year of the company to which the balance sheet relates and the date of the report. 9. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE: . There has been no material or significant orders that have been passed by the regulators or courts or tribunals impacting the going concern status. 10. DETAILS OF SUBSIDIARY/JOINT VENTURES / ASSOCIATE COMPANIES: The Company doesn't have the subsidiaries and associate companies as on the date of this report. 11. PUBLIC DEPOSITS: The Company has not invited or accepted deposits from the public covered under Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules,2014. 12. AUDITORS The statutory Auditors of the Company M/s Balakrishnan & Co., Chartered Accountants, retire at the ensuing Annual General Meeting and have confrmed their eligibility and willingness to accept office, if reappointed. The Audit committee and the Board of Directors recommend their appointment as statutory auditors of the Company for the next financial year. With regards, to observations/ qualifications mentioned in the auditors report read with the notes on accounts are self explanatory and do not require further elucidation. 13. AUDITOR'S REPORT: AUDIT QUALIFICATIONS The qualifications in paragraph 4 and paragraph 5 of the attached Auditor's Report read with the notes on accounts are self explanatory except those points which are being explained as below: The Company has prepared accounts for the year 2014-15 based on the concept of Going Concern. Certain provisions were made on the estimated basis and for known expenses were accounted in full. Your Directors have also noted the observation of the auditors along with the notes on accounts and wish to comment / clarify on the important observations as follows: (i) The Company was steadily maintaining its books of accounts ' on the concept "going concern basis" in-spite of losses incurred by the Company. The Company has been referred to BIFR and expect various reliefs and concession. Accordingly the Company continues to follow its decision taken in the • previous years to maintain the accounts on the concept of going concern basis. (ii) The Company is under lock out since 27.12.2012. Your Board of Directors are also facing the practical difficulty in getting confirmation in respect of Account Receivables from various debtors in a locked out Company. Thus we are not in a position to provide the required information on the realizable value of debtors. (iii) The said Creditor though they were appointed as the internal auditor of the Company they have not given proper service as an internal auditor for the period. They have not done any Internal Audit work satisfactorily during the period and did not give any reports which they supposed to give to the Company as an internal Auditor. Your Board of Directors has noted this lack of responsibility from the part of a professional service provider very seriously and Board raised dispute on the amount due to the said creditor. Hence it is not payable by the company and accordingly it is not disclosed". (iv) Due to continued labour unrest, the management was compelled to declare lock out of the unit on 27.12.2012. Since the Company is under lock out there are no skilled workers and management staff a available to conduct the stock verifications and thus your Board of directors are not in a position get the stock valuation done. (v) Remedial steps are being taken on other adverse remarks raised in the Auditor's Report. However consequent to the lock out of the Company and continuous shortage of qualified staff, the implementation is delayed. 14. SECRETARIAL AUDIT 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 has appointed M/s Makarand Patwardhan & Co., Practicing Company Secretaries as Secretarial Audit of the Company. The Secretarial Audit Report for the financial year ended 31 st March, 2015 is annexed herewith as "Annexure 1". Your Directors have also noted the observation of the Secretarial Auditors and wish to comment/ clarify on the important observations as follows: 1. The Company is under lock out since 27.12.2012 and has already applied for Registered with BIFR. The Company is taking remedial steps on remark raised in the Secretarial Audit Report. However consequent to the lock out the Company and continuous shortage of qualified staff, the implementation is delayed. 2. The Company is closed since December 2012 and has already applied for registered for BIFR. The Company is in process of getting appointment of full time Director. 3. Company has not appointed Internal Audit, Cost Auditor and Company Secretary as company is under lock out and there is no operation since 27.12.2012. 15. SHARE CAPITAL: The Authorised share capital of the company is Rs. 25 crore comprising equity share capital of Rs. 15 crore and preference share capital of Rs. 10 crore 16. EXTRACT OF ANNUAL RETURN: The Board hereby attaches as Annexure 2 an extract of annual return in Form MGT-9 as envisaged under the provisions of the Companies Act, 2013. 17. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO: Particulars of conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014 are given in the "Annexure 3" hereto and forms part of this Report. 18. CORPORATE GOVERNANCE: A separate report on the practices followed by the Company on Corporate Governance along with Auditor's certificate on its compliance is annexed and forms part of this report. 19. MANAGEMENT DISCUSSION & ANALAYSIS REPORT: The Management Discussion & Analysis Report pursuant to clause 49 of the Listing Agreement is attached as Annexure -2 and forms part of this Report. 20. DEPOSITORY SYSTEM Equity shares of the Company are tradable compulsorily in demat form and your Company has established connectivity with both the depositories, i.e. National Securities Depository Limited and Central Depository Services (India) Limited through share transfer registrar. In view of the numerous advantages offered by the Depository system, members are requested to avail demat facility of the Company's shares a. Change in Directorship during the year: Mr.Basant K Soni, has resigned from the Board of Directors of the Company w.e.f. 4th September, 2015. As per the provisions of Section 149(1) of the Companies Act, 2013, the Company is required to have at least one Woman Director on its Board. Keeping in view of this requirement, Ms. Reshma Kanade has been appointed as a Director of the Company with effect from 9th March, 2015. b. Statement on declaration given by Independent Directors under sub-section (6) of Section 149: The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act,2013. c. Familiarization programmed undertaken for Independent Directors: The Independent Directors are familiarised with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc. On appointment, the Independent Director is issued a Letter of Appointment setting out in detail, the terms of appointment, duties, responsibilities and expected time commitments. Each newly appointed. Independent Director is taken through a formal induction program on the Company's operations, marketing, finance and other important aspects. The Company Secretary briefs the Director about their legal and regulatory responsibilities as a director. e. Non-independent directors: In accordance with the provisions of section 152 of the Companies Act, 2013, Mr. Ramdas Kamat retire by rotation, being eligible have offered themselves for re-appointment as Directors. Your Directors recommend their appointment as Directors of the Company. 22. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS During the financial year ended 31st March, 2015, Four Board Meetings were held, details of which are given in the Corporate Governance Report.The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013. 23. MEETINGS OF INDEPENDENT DIRECTORS During the year under review, a meeting of Independent Directors was held on 9th March 2015 wherein the performance of the Non-independent Directors and the Board as a whole was reviewed. The Independent Directors at their meeting also assessed the quality, quantity and timeliness of flow of information between the Company's management and the Board of Directors of the Company. 24. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186: Your Company did not extend any loans, guarantees or make any investments covered under the ambit of Section 186 of the Companies Act, 2013. 25. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES: The particulars of every contract or arrangements entered into by the Company with related parties referred to in subsection (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto are disclosed in Form No. AOC -2 (As Enclosed Annexure-4). 26. PARTICULARS OF EMPLOYEES: None of the employees of the Company is in receipt of remuneration exceeding the limits prescribed under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. 27. DIRECTORS' RESPONSIBILITY STATEMENT: Pursuant to the requirement of Sections 134(3)(c) and 134(5) of the Companies Act, 2013, with respect to Directors' Responsibility Statement, the Directors hereby confirm that:- (i) in the preparation of the annual accounts for the year ended 31st March, 2015, the applicable accounting standards, have been followed and there are no material departures from the same. (ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the loss of the Company for that period; (iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting recording accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and (iv) the Directors have prepared the annual accounts of the Company on a'going concern'basis. (v) the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively. (vi) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively 28. PERFORMANCE EVALUATION: Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an annual performance evaluation of its own performance, that of its Committees and individual directors. The Nomination and Remuneration Committee at its meeting established the criteria based on which the board will evaluate the performance of the directors. A separate exercise was carried out to evaluate the performance of individual Directors, on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company etc. The performance evaluation of the Non Independent Directors and Board as a whole was also carried out by the Independent Directors. The Directors expressed their satisfaction over the evaluation process and results thereof. 29. WHISTLE BLOWER POLICY: The Company has formed a Whistle Blower Policy/ Vigil Mechanism as required under Section 177 of the Companies Act, 2013 and. A Vigil (Whistle Blower) mechanism provides a channel to the employees and Directors to report to the management concerns about unethical behavior, actual or suspected fraud or violation of the Codes of conduct or policy. None of the officials/personnel of the Company has been denied access to the Audit Committee. The Vigilance Officer/Chairman of Audit Committee has not received any complaint during the financial year ended 31 st March, 2015. 30. ACKNOWLEDGEMENTS: An acknowledgement to all, who help us in its present crises. By Order of the Board of Director Surendran Nair Director Place : Mumbai: date : 26* August, 2015 |