DIRECTORS' REPORT To The Members, The Directors present herewith the Thirty Third Annual Report together with the Statement of Accounts for the year ended 31st March, 2015 Dividend In view of continuous incurring of losses, no dividend is proposed for the year under report. Pursuant to the provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company had transferred the unpaid and unclaimed amounts of dividend (Rs. 3.89 Lacs) lying with the Company to the Investors Education Fund Account established by Central Government. Transfer to General Reserves: The Company's production is held up this financial year also. There was no turnover hence company is incurring losses. Therefore, it is not proposed to transfer any amount to General Reserves. Material Changes during the period of Financial Statements and Board's Report Date: There is no any material change in the financial position of the Company during the period from the date of financial Statement and date of this Directors' Report. Directors During the year under review, Smt. Vinda Warhadpande was appointed with effect from 1st October 2014 as a woman Director and whole time Director on the Board with the designation as Director - HR and Systems Shri Rajesh Joshi, Director, retires by rotation at the General Body Meeting and being eligible offers himself for reappointment. The Directors recommends re-appointment of Shri Rajesh Joshi. Brief resume of the appointee Director is given in the section on Corporate Governance in the Annual Report. Declaration By Independent Directors: The Independent Directors have submitted their disclosure to the Board that they fulfil all requirements as to qualify for their appointment as an Independent Director under the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Board Meetings: During the year under review the Board meets four times, the details of which are given in the Corporate Governance Report, which forms part of this report. Policy On Appointment And Remuneration To Directors The current policy of the Company on appointment and remuneration of Directors is to have an appropriate mix of Executives, non-executives and Independent Directors on the Board of the Company. As on 31st March 2015, the Company has 7 members on the Board of Directors of which, 3 are executive Directors, two non-executive non independent Directors and two Independent Directors. More details are given in the Corporate Governance Report which is part of this Report. Directors' Responsibility Statement Pursuant to the provisions of Section 134 (5) of the Companies, Act, 2013, the Board confirm and submit- (i) That in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (ii)That the Directors had 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)That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv)That the Directors had prepared the annual accounts on a going concern basis. (v)That being the listed Company, the directors, had laid down the internal financial controls to be followed by the Company and that such Internal Financial Controls are adequate and were operating efficiently. (vi)That the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating efficiently. Listing: The Equity Shares of the Company are listed on the Bombay Stock Exchange Limited (BSE). Corporate Governance Pursuant to clause 49 of the Listing Agreement with the Stock Exchange, Reports on Management Discussion & Analysis and on Corporate Governance along with a certificate from the Auditors and CEO / CFO are attached hereto and form part of this report. Statutory Auditors: M/s Amar Bafna & Associates, Mumbai, were appointed as Statutory Auditors of the Company in the last Annual General Meeting of the Company for the period of two years i. e. for the financial year 2014-15 and 2015-16. The appointment of Statutory Auditors is to be ratified by the members in Annual General Meeting. The Company has received the consent letter from the Auditors in this behalf. You are requested to appoint Auditors and to fix their remuneration. Auditor's Report The Auditor's Report is self explanatory except the following qualifications mentioned in the report: 1.As explained in Note No. 21 of Notes to Accounts the expenses / liabilities aggregating Rs. 154.74 lacs for the year 2014-2015 have not been provided due to which current year loss and accumulated losses are under stated by Rs. 131.32 Lacs. 2.As explained in Note No. 24 of Notes to Accounts, calls in arrears is unreconciled to the extent of Rs. 2.25 Lacs. 3.As explained in Note No. 26 of Notes to Accounts, no provision has been made for loans and advances amounting to Rs. 109.94 lacs, which are prima facie doubtful of recovery and in our opinion current year's loss and accumulated losses of the company are under stated by provision of such doubtful advances 4.Depreciation on tangible and intangible assets (as per Schedule II of Companies Act, 2013) has not been provided. (Refer Note NO. 22) 5.As explained in Note No 25, the liability on account of non-fulfillment of export obligation, has not been considered since not ascertainable. 6.Attention is also invited in respect of share application money received by the Company which is pending for allotment, in terms of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Amendment Rules, 2015 On these points the Board submit the following explanation: 1.The Company's operations have been suspended due to shortage of Raw Material, Labour Unrest, shortage of working Capital finance etc. But the administrative operations of the Company are continued up to date. Due to stoppage of production, the required financial resource could not generate and Company is incurring losses mainly due to administrative Expenses. The Company has been declared a Sick Industrial Unit by the Board for Industrial and Financial Reconstruction (BIFR) and the draft rehabilitation scheme has been submitted to BIFR through IDBI Bank - the Operating Agency and on sanction of the same, it will be possible to restart the activities. 2.The Call in arrears for Rs. 2.25 Lacs remains to be un-reconciled for want of non- availability of requisite data from Registrar and Share Transfer Agents. 3.No provision has been made for loans and advances amounting to Rs. 109.94 Lacs representing advances given to suppliers, deposit with statutory authorities. TDS payments as the same are considered to be good and either receivable or adjustable in near future 4.No provision for Depreciation on fixed assets has been made after discontinuing operation of the company since December 2006 as the relevant assets are not in use. 5.In respect of non-fulfilment of export obligation, the Management 0f the Company had made an application to the Export Department, for the extension of time of 5 years from the date of sanction of Rehabilitation Scheme by the BIFR for fulfilment of export Obligation promised. 6.The Company was declared as Sick Industrial Unit by the BIFR in the year 2011 and as per the Draft rehabilitation Scheme submitted to the Hon'ble BIFR, the company is receiving the Share Application money from one or two parties as a part of Rehabilitation Scheme. The Company will allot the shares to these parties on the finalisation of Rehabilitation Scheme and as per the direction of the BIFR. Secretarial Audit: The Company has appointed M/s P. S. Channe & Associated, Company Secretaries, Nagpur, to hold the office of the Secretarial Auditors and to conduct the Secretarial Audit Report and the said Report is being attached with this Directors' Report which is self explanatory except the following qualifications mentioned in the report: 1.That the Company had not given facility of Ballot Paper to the Shareholders of the Company. 2.That the Company used old format of proxy 3.That the Composition of Board is proper as per Companies Act, 1956. 4.That the Company has transferred the amount of Unpaid Dividend to Investor Education and Protection Fund on 14/08/2014 after getting notice by RoC. Company did not replied to Roc's Notice and filed e-form INV 1 and INV-5. We observed that there is difference between the amount lying with the unpaid amount and the amount transferred to IEPF. 5.That, the Company in few cases has not mentioned Din no. of the Director who signed the documents on behalf of the Company. 6.That the Company has not appointed Internal Auditor for the year under review. 7.That the Company did not established the Vigil Mechanism 8.That the Company had taken loan from Directors 9.That the Company has not appointed Company Secretary in full time employment and no one is appointed as CFO. 10.That the amount of Rs. 1 Lac (Rupees One Lac Only) towards deposit has not received while filing representation for appointment as Director. 11.There was opening Balance of Share Application money as on 01st April 2014 and Company also received some more share application money against which shares are not allotted till the end of Financial year i.e. up to 31st March 2015. 12.That the pollution related licenses are not renewed. 13.That the Factory License under Factories Act has not been issued by the concerned authority. The management review/explanation to above observations are given below: 1.The Company had opted and provided the facility of E-voting to all the members of the Company. In view of cost control and green governance (less paper work) the ballot paper was not provided to the members. 2.While printing the Annual Report, mistakenly old format was printed. But the contents of the proxy form were as nearly as same with the new format of the proxy form. 3.As per the old Companies Act, 1956, there were four independent Directors as recognised by the Board and same was intimated to Stock Exchange also. But as per the new Companies Act, 2013, Company recognised two Directors as Independent Directors and file form MGT 14 in respect of these two Directors. The other two Directors are still Independent Directors and they are not have any pecuniary interest in the management of the Company. The Company has taken steps to recognise remaining two Directors as Independent Directors and will receive the declaration of their independence and accordingly necessary form will be filed with RoC. The Company's management/ Board have not taken any such major decision during this tenure that will affect the Company's state of affairs. 4.The RoC issued one notice in respect of transfer of Unpaid/unclaimed dividend to Investor Protection and Education Fund. Accordingly the company has transferred the balance of unpaid dividend to IEPF. The Unpaid/unclaimed dividend amount was deposited in separate Bank Account and list of members was given to said Bank. The amount of unpaid/unclaimed Dividend was transferred as per the list provided by the Bank and the remaining amount was withdrawn. The amount deposited in the said account was more than the dividend payable. 5.DIN of the Directors was not printed inadvertently on some of the documents. These documents were also not so much important. 6.In respect of appointment of Internal Auditor and not having Vigil Mechanism, the Company's production activity has been fully stopped from the year 2006-07. There is no sale or purchase activity since then. Only administrative activity is continued at Registered Office of the Company. The present size of the working is limited only up to administrative work and necessary staff is maintained by the Company. Hence no Internal Auditor nor Vigil Mechanism was enforced. But the Company is having sufficient capacity and work force to handle the work properly. 7.In respect of point Nos. 6, 7, 8, 9, Management explained that the Company has not appointed Company Secretary in full time employment nor appointed Chief Financial Officer, because the Company is sick Company as declared by the Hon'ble BIFR and the production activity is also stopped since the financial year 2006-07. The scope of financial transactions is very limited and small in size. The Company has appointed one person as Manager to look after the financial transactions of the Company. Also the Company has made necessary arrangement to look after the secretarial compliance work on regular basis. 8.The Company has taken unsecured loans from Directors for the purpose of meeting the day to day and administrative expenses. 9.The Company's production has been stopped since financial year 2006-07 and manufacturing activity or related work is also discontinued. Hence there is no as such compliance relating to pollution control. 10.The Company has completed the procedure of renewal of Factory and other related licenses. But the concerned department has not renewed the license stating there is no production activity and will be renewed as soon as the production activity will commence. 11.The Company was declared as Sick Industrial Unit by the BIFR in the year 2011 and as per the Draft rehabilitation Scheme submitted to the Hon'ble BIFR, the company is receiving the Share Application money from one or two parties as a part of Rehabilitation Scheme. The Company will allot the shares to these parties on the finalisation of Rehabilitation Scheme and as per the direction of the BIFR. Corporate Social Responsibility The provisions of Corporate Social Responsibility is not applicable to the Company. Particulars Of Employees: The Company does not have any employee whose particulars are required to be given pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975. Conservation Of Energy, Technology Absorption And Foreign Exchange Earnings & Outgo: As required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, conservation of energy, technology absorption and foreign exchange earnings and outgo are nil as there were no operation during the year under review. Acknowledgements: The Board expresses its sincere gratitude to the shareholders, bankers Statutory and Secretarial Auditors and their staff, Statutory Authorities, and clients for their continued support. The Board also wholeheartedly acknowledges the dedicated efforts of all the staff and employees of the Company. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS Sd/- T C KOTHARI CHAIRMAN AND EXECUTIVE DIRECTOR Place: Nagpur Date: 10th August, 2015 |