BOARD'S REPORT Dear Members, Your Directors are presenting the Thirty-third (33rd) Annual Report and Audited Financial Statements of the Company for the year ended 31st March, 2016. Performance, Future Outlook & Prospects None of the Units of the Company was in operation during the year under review. The Company is continuing to make all feasible efforts to restart the explosive units. The Hon'ble Board for Industrial and Financial Reconstruction (BIFR) had permitted transfer of 20% equity shares of the Company held by the Balrampur Chini Mills Ltd. as well as induction of co-promoter/strategic investor in the Company, under a Modified Draft Rehabilitation Scheme (MDRS) to be approved by the Hon'ble BIFR. However, the Hon'ble BIFR for the first time after permitting the induction of co-promoter, vide its order dated 23rd January, 2015, concluded that the said induction is not transparent and is inconsistent with law. Aggrieved by the said order, the Company preferred an appeal before the Hon'ble AAIFR. The Hon'ble AAIFR, inter alia, passed following observation/direction vide its order dated 14th September, 2015: "We are of the considered view that after having allowed induction of Mr. Rajesh Jain, as a strategic investor for revival of the appellant sick Company, the BIFR ordinarily could not have reviewed its own order and rejected the said induction on the grounds of non-transparency and inconsistency with law." "The impugned order BIFR stands modified accordingly. The matter is remanded back to BIFR for direction to consider the MDRS filed by the appellant company in accordance with law after hearing all the parties concerned and take a final decision on circulation of the MDRS within a period of 6 weeks." During the year under review, the Company has offered, issued and allotted 2,50,000 fully paid up 0.001% Non-Convertible, Non-Cumulative, Redeemable Preference Shares of face value Rs. 100 each aggregating to Rs. 2,50,00,000 on private placement basis for cash, at par, as a result of which the networth of the Company has become positive. Your directors are confident that the Company would be able to revive its operations in future. Website Pursuant to Regulation 46 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has launched its own functional website i.e. www.indogulfind.com containing the requisite information about the Company. Dividend In view of loss suffered by the Company, the Directors regret for their inability to recommend dividend for the year under review. No amount is being transferred to the reserves. Deposits The Company has not accepted any deposit from the public and as such, there are no outstanding deposits in terms of the Companies (Acceptance of Deposits) Rules, 2014. Directors Pursuant to Section 149 and other applicable provisions of Companies Act, 2013, your directors are seeking regularisation of appointment of Ms. Preety Gupta as an Independent Director who was appointed as an Additional Director of the Company in the category of Independent Director (Women Director) w.e.f. February 05, 2016. She shall hold office for a term of 1 year stating from the date of her initial appointment, subject to shareholders' approval at ensuing Annual General Meeting of the Company. Notice in writing under Section 160 of the Companies Act, 2013, has been received by the Company proposing her appointment as a director of the Company. Dr. Arvind Krishna Saxena resigned due to his other pre-occupations and ceased to be a Director of the Company w.e.f. February 04, 2016. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements), Regulations,2015. Resume and other information regarding the director seeking appointment/ reappointment as required by Listing Regulations and Secretarial Standard-2 has been given in the Notice convening the ensuing Annual General Meeting and Statement pursuant to Section 102 of the Act. The Board of Directors recommends the above appointment(s)/ reappointment(s). Directors' Responsibility Statement Pursuant to Section 134(5) of the Companies Act, 2013, the Directors state that: i. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; 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 at the end of the financial year and of the loss of the Company for that period; iii. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv. The Directors have prepared the annual accounts on a going concern basis; v. The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and vi. There is a proper system to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. Corporate Governance As per Regulation 15(2) of Listing Regulations, as the paid up equity share capital of the Company is Rs. 95.67 lacs and networth is not exceeding Rupees Twenty Five Crores as on the last day of the previous financial year, the compliance with the corporate governance provisions as specified in Regulations 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 46(2)(b) - 46(2)(i) and para C, D and E of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are not mandatory. Therefore, the Company has not enclosed the Compliance Report on Corporate Governance, Certificate on the compliance of the Corporate Governance and Management Discussion and Analysis. Share Capital The Company has issued and allotted 2,50,000 Non-Convertible, Non-Cumulative, Redeemable Preference Shares of Rs. 100 each during the year. The Company did not issue any equity shares during the year and the paid up equity share capital is Rs. 95,67,270. Consequently, the total paid up share capital of the Company increased to Rs. 3,45,67,270. The Company has also reclassified the Authorised Share Capital from the existing Authorised Share Capital of the Company of Rs. 20,00,00,000 divided into 19,75,00,000 Equity Shares of Re. 1 each and 25,000 Preference Shares of Rs. 100 each to 15,00,00,000 Equity Shares of Re. 1 each and 5,00,000 Preference Shares of Rs. 100 each aggregating to Rs. 20,00,00,000 and consequently altered the Memorandum & Articles of Association of the Company. Particulars of Employees There are no employees in the Company whose particulars are to be given as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) and 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Directors were not paid any remuneration during the year 2015-16. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo All the manufacturing units of the Company are closed since December, 2000. The Company is making efforts to restart its explosive units. Therefore, no steps were taken for conservation of energy, capital investment in energy conservation equipment and technology absorption. Expenditure on research and development was nil. There were no foreign exchange earnings and outgo during the year. Key Managerial Personnel In compliance of the provision of Section 203 of the Companies Act, 2013, the Company has appointed Mr. Manish Rakesh, a member of ICSI, as the Company Secretary (Key Managerial Personnel) who is also the Compliance Officer in the terms of Regulation 6 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Company is taking necessary steps to appoint others KMP in terms of Section 203 of the Companies Act, 2013. Number of meetings of the Board The Board met seven times on 21.05.2015, 10.08.2015, 27.10.2015, 04.02.2016, 19.02.2016, 21.03.2016 and 28.03.2016 during the financial year 2015-16. The gap between any two consecutive meetings was not exceeding 120 days. Audit Committee The Audit Committee constituted by the Company has the terms of reference as provided in the Companies Act, 2013 and Listing Regulations. Mr. Gorachand Dutta and Ms. Preety Gupta have been inducted as members of the Audit Committee w.e.f. 21.03.2016 and Dr. Arvind Krishna Saxena has ceased to be a member of the Audit Committee on 04.02.2016. During the financial year ended 31.03.2016, there were no instances of the Board not accepting the recommendations of the Audit Committee. The Audit Committee met four times on 21.05.2015, 10.08.2015, 27.10.2015 and 04.02.2016 during the financial year 2015-16. The Statutory Auditors of the Company are invited to the Audit Committee meetings for discussing the financial results and financial statements. The Company has in place a whistleblower policy to deal with unethical behavior, victimization, fraud and other grievances or concerns, if any. Nomination & Remuneration Committee Nomination & Remuneration Committee constituted by the Company meets the requirements of Companies Act, 2013 and Listing Regulations. A policy for selection of directors and the remuneration policy already exists. The policy on selection of directors is to have an appropriate mix of directors to maintain independence of the Board. The composition of the Board shall meet the conditions prescribed under the Companies Act, 2013 and other provisions as may be prescribed from time to time. The proposed appointee shall possess the director identification number and meet the criteria as laid down in the Companies Act, 2013. The Nomination and Remuneration Committee will review, annually, the appropriate skills and characteristics of Board members in the context of the current structure of the Board. A variety and balance of skills, background and experience is desirable to commensurate with the business and size of the Company. Policy on Directors' Appointment and Remuneration The Company's policy on directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under sub section (3) of Section 178 of the Companies Act, 2013 is annexed in Nomination and Remuneration Policy. Board Evaluation Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an annual evaluation of its own performance, of the individual directors as well as the working of its Audit Committee, Nomination & Remuneration Committee and Stakeholders' Relationship Committee. The Nomination & Remuneration Committee also reviewed the performance of all directors. Evaluation was done on the basis of questionnaire prepared, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees etc. Independent Directors in its separate meeting also reviewed the performance of the Chairperson and the Board of directors as a whole and also assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board. There are no non-independent directors, so review of the performance of Non-Independent Directors in its separate meeting was not required. Extract of Annual Return The extract of annual return as per Form MGT- 9 is annexed herewith as Annexure - 'I'. Significant and Material Order There are no significant/material orders passed by any regulator/court/tribunal which could impact on the going concern status of the Company and its future operations. Complaints received by the Sexual Harassment Committee The Company has in place a policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress any complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. No complaint was received during the year and no complaint was pending to be resolved as on 31.03.2016. Secretarial Audit Report Pursuant to the provisions of Section 204 of the Companies Act, 2013, M/s. Anjali Yadav & Associates, Company Secretaries, were appointed to undertake the secretarial audit for the financial year 2015-16. The Secretarial Audit Report for the financial year 2015-16 is attached as Annexure "II" and forms a part of the report of the Board. In relation to observations made in the Secretarial Audit Report, we inform that the Company is a sick industrial company registered with the Hon'ble BIFR. During the year, the Company has no operations and all the units of the Company are closed. Consequently, the Company has incurred cash losses during the year under review. Therefore, in view of the non-availability of funds, the Company could not comply with the provisions of the Companies Act, 2013 and the Listing Regulations. However, during the year under review, the Company has made all possible efforts to comply with the applicable provisions of the Companies Act, 2013 and the Listing Regulations. During the year under review, the Company has appointed a Company Secretary and a Woman Director. The Company has also provided e-voting facility in relation to the business carried-out at the EGM held on 21st March, 2016. E-voting facility is also being extended for the ensuing AGM. Auditors & Auditors' Report M/s MANV & Associates, Chartered Accountants, were appointed as the Statutory Auditors of the Company from the conclusion of the 32nd AGM till the conclusion of the 37th AGM to be held in the year 2020, subject to ratification of their appointment at the subsequent AGMs. Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules framed thereunder, it is proposed to ratify the appointment of M/s MANV & Associates, as the Statutory Auditors of the Company for the financial year 2016-17. The said Auditors have furnished the Certificate of their eligibility in this regard. The observations of Auditors in their Report dated 9th April, 2016 read with the relevant notes to accounts are self-explanatory and do not require any further explanation. General a) The Company is not required to constitute CSR Committee under the provisions of the Companies Act, 2013. b) The Company has not lent out any money or made any investments or provided any guarantees during the year under review. c) The Company does not have any related party transactions which may have potential conflict with the interests of the Company at large. Thus, disclosure in Form AOC-2 is not required. d) The Company being a sick company having no commercial activity during the year under review, has not laid down policy on risk assessment and minimization procedures. e) There were no material changes and commitments between the end of financial year and date of report. f) The Company has in place adequate internal financial control with reference to the financial statements. Acknowledgements Your directors wish to place on record their appreciation for co-operation and support extended by all concerned stakeholders. By order of the Board For INDO GULF INDUSTRIES LIMITED Sd/-Shyam Lal Gouniyal Director Sd/- Vimal Kumar Jain Director Place : New Delhi Date : 09.04.2016 |