| Dear Shareholders,
The Directors are pleased to present the 40th Annual Report and the
audited accounts of the company for the year ended 31st March 2014.
FINANCIAL RESULTS : (Rs. in Lacs)
2013-14 2012-13
Income from operations 0 0
Other Income 0.19 1.71
Total Income 0.19 1.71
Profit before Depreciation, Interest & tax (2.11) (6.03)
Less : Interest NIL NIL
Depreciation 21.28 22.49
Loss before Tax (23.39) (28.52)
Loss after Tax (23.39) (28.52)
Balance brought forward (3839.57) (3811.05)
Balance transferred to the Balance Sheet (3862.96) (3839.57)
REVIEW OF OPERATIONS:
As the Secured Creditors terminated the custodianship of the company
and took the physical possession of factory in April 2011, there were
no operations carried out in the factory. The Secured Creditors have
sealed the production facilities and have deployed their own security
personal. Consequently there was no production and sales in the
company.
The management is continuously trying to have a settlement with the
Secured Creditors so that the company can revive its operations.
ACTION UNDER SARFAESI ACT, 2002
The Asset Reconstruction Company ARCIL and the Financial Institution,
Exim Bank of India had initiated recovery action under Securitization
and Reconstruction of Financial Assets and Enforcement of Security
Interest Act (SARFAESI Act) 2002. The Company had been issued notice
under section 13(4) of the SARFAESI Act for possession of Secured
Assets, that include a part of land, building and complete machineries
(except the machines charged to IDBI earlier) ,charged to the said
Institutions. The Company had been appointed as Custodian of said
Secured Assets with effect from July 11, 2007. The Company was allowed
to continue the routine business operations on payment of Rs 25000 per
month towards royalty charges. In April 2011 the Financial
Institutions withdrew the custodianship from the company and took the
physical possession of the factory.
STATUS OF REGISTRATION WITH THE BIFR:
The Company made reference to the Hon'ble BIFR in August 2003 and had
been declared sick under the provisions of SICA , 1985 vide order
dated 17th May 2006. As the Secured Lenders ARCIL And Exim Bank have
taken action under section 13(4) of SARFAESI Act 2002, the Hon'ble
BIFR, pursuant to an application by the referred Secured Creditors,
has ordered on 26.11.2007 to abate the reference filed under SICA Act.
Winding-up Petition by ARCIL
ARCIL has filed a company petition under Section 433(1)(e) of the
Company 's Act 1956 for winding up of the company, before the Hon'ble
High Court of Madhya Pradesh at Indore Bench. The Company is filing
proper reply opposing the winding-up petition filed by ARCIL. The
petition is pending before the Hon'ble High Court for admission.
DIVIDEND
In view of huge losses incurred by the Company, the directors regret
their inability to recommend any dividend (Previous year
Nil).
DISCLOSURE OF PARTICULARS
Information as per 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 is annexed and marked Annexure "I" and
forms part of this report.
DIRECTORS' RESPONSIBILITY STATEMENT
The statement as required under section 217(2AA) of the Companies Act,
1956 the Board of Directors confirm that;
(i) In the preparation of the annual accounts, the applicable
accounting standards have been followed and proper explanations
provided relating to material departures, if any;
(ii) The Directors have selected appropriate 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
profit or loss for that Year;
(iii) The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provision of the 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 the going
concern basis. The Directors are hopeful of achieving One-time
settlement of dues of secured creditors and revival of operations.
Therefore the company's accounts are prepared on going concern basis.
PARTICULARS OF THE EMPLOYEES
The information required under section 217(2A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975 as
amended are not given as the Company did not have any employee during
the year.
PUBLIC DEPOSIT
Your Company has not accepted any Public deposit within the meaning of
provisions of Section 58A & 58AA of the Companies Act, 1956 and there
is no out standing deposit as at 31st March, 2014.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management discussion and Analysis Report as required under the
Listing Agreement with the stock exchange is annexed as Annexure "II"
forming part of this report.
CORPORATE GOVERNANCE
Pursuant to clause 49 of the Listing Agreement with the Stock
Exchange(s), a separate section titled 'Corporate Governance' has been
included in this annual report along with management discussion and
analysis report as Annexure III. A certificate from the Auditors of
the Company regarding compliance of conditions of Corporate Governance
is annexed to this report.
DIRECTORS
Mr. Pramod Somani, (DIN 00042745) Director of your Company, retires by
rotation at the ensuing annual general meeting of the company, and
being eligible offers himself for re-appointment.
Further that Shri Vikas Chikne (DIN 02776142) the existing independent
director is further proposed to be appointed as Independent Director
for a term of 5 years and Mr. Luv Kumar Saboo (DIN 02921767) is
proposed to be appointed as Independent Directors for a term of 5
years as per requirement of section 149 of the Companies Act, 2013 as
well as Clause 49 of the Listing Agreement to hold the office till
31st March, 2019 and 13th August, 2019 respectively.
The Company has received a notice for members as per section 160 of
the Companies Act, 2013 for proposal for appointment of the aforesaid
directors at the AGM. They have given a declaration to the Board that
they meet the criteria of independence as provided under section
149(6) of the Act and clause 49 of the listing agreement and are not
disqualified from being appointed as a director in terms of section
164 of the Act and has given their consent to act as director.
In the opinion of the Board, each of these directors fulfill the
conditions specified in the Act and the Rules framed there under and
clause 49 of the listing agreement for appointment as Independent
Director and they are independent of the management.
AUDITORS
As per the provisions of section 139 of the Act, no listed Company can
appoint or re-appoint an audit firm as auditor for more than two terms
of five consecutive years. Section 139 of the Act has also provided a
period of three years from the date of commencement of the Companies
Act, 2013 to comply with this requirement. In view of the above, M/s
S.P.Moondra & Co., (F.R.No 004879C) Chartered Accountants, being
eligible for re-appointment and based on the recommendation of the
Audit Committee proposed for the re-appointment as the statutory
auditors for a period of three years (subject to the peer reviewed by
the ICAI) up to the conclusion of the 43rd annual general meeting to
be held in the calendar year 2017.
DIRECTORS' COMMENTS TO THE QUALIFICATION MADE BY AUDITOR
(I) The Auditors, in the point no.3(f), in their report, have made
comments on non-provisioning of interest on term loan outstanding. The
company has already achieved Onetime settlement (OTS) with majority of
secured creditors and is further trying to reach one-time settlement
with the remaining secured creditors. Further to this, the secured
creditors have taken the physical possession of factory and have
sealed the production facilities. Hence the Company considers it
appropriate to make no provisioning of interest on these borrowings.
The Auditors have also made comments regarding company's going concern
status. Considering the dispute of ownership on company's assets
between Commercial tax Department and Financial Institutions and also
considering the management efforts to have One-time settlement of dues
of Secured creditors, the management is hopeful that the company will
revive its operations. Therefore the Company's accounts are prepared
on going concern basis. The Auditors have also made comment on not
following the accounting standard with respect to the provision of
gratuity on actuarial basis. The Company does not have any staff on
its payrolls and as the physical possession of factory has been taken
over by Secured Lenders, all the workers and staff have left the
company. The gratuity provisions made for the left staff is sufficient
to take care of their dues. Hence the provision of gratuity is not
done on the actuarial basis.
(ii) The Auditors, in the Point No. 9(a), of Annexure to their report
have also made some qualifications as regards irregularity in payment
of statutory dues. The Company is passing through severe financial
hardships and as a result there were instances of irregularity in the
payment of certain statutory dues. The Company is mobilizing necessary
resources to meet the overdue payments.
(iii) The Auditors, in their report also made qualifications as
regards non availability of balance confirmations from debtors,
creditors and Loans & Advances; and non ascertainment of impairment of
assets. The Directors are of the view that the receivables/ payables
balances shown in the balance sheet do not require any provision. And
as the assets are in the custody of Secured lenders and their ultimate
fate is not ascertainable, any change with respect to impairment, if
arises, would be adjusted in the year of settlement.
For and on behalf of the Board
Indore, PRAMOD SOMANI PRATISHTHA SOMANI
14th August 2014 DIRECTOR DIRECTOR
DIN 00042745 DIN 02921806 | 