| Dear Members,
The Directors' hereby present the Twenty Seventh Annual Report on the
business and operations of the Company, together with the Audited
Statements of Accounts and the Auditors' Report for the year ended 30th
June, 2015.
Financial Highlights: (Rs. Million)
Current year Previous year
Particulars 2014 - 2015 2013 - 2014
Revenue from Operations -- 19.47
Other Income 130.43 2.50
Total Revenue 130.43 21.97
Profit/(loss) before financial 102.82 (10.53)
Expenses, Depreciation
Financial Expenses 0.13 0.16
Depreciation 8.55 8.22
Profit/(Loss) before Tax 111.50 (18.91)
Profit/(Loss) after Tax and prior period 111.50 (18.91)
adjustment
Dividend:
In view of the accumulated losses, no dividend is being recommended for
the current year.
Results of Operations:
As already communicated to the shareholders under the previous annual
report that the Company has received communication from the parent
company that they will not be able to supply the raw material on credit
terms as before and the Company does not have its own financial
strength, so the Board of Directors' in its meeting held on July 08,
2013 decided to close the operation of the unit in order to stop the
accumulation of cost and liabilities until an appropriate decision is
taken. Presently, the Company ceases to be Sick Industrial Company vide
BIFR order no. MA. NO.135/BC/2015 dated 8th June, 2015 as the net worth
turned positive as on 31st December 2014. The management is in the
process of evaluating available options to rehabilitate the Company.
However, the other income of Rs. 130.43 million is mainly because of
Reversal of Liability payable to Creditors.
Extension of Annual General Meeting:
Due to various factors, the Company had stopped production in July
2013. The management & promoters are presently evaluating various
options in connection with reviving / rehabilitating the Company. The
Company had retrenched all of its 97 workers in 2013-14. Out of the
said 97 workers, final settlement has been reached (with mutual
agreement) with 39 workers. Under the above Circumstances, the Board
feels that some more time will be required to conclude the above said
matter and hold the Annual General Meeting meaningfully and smoothly.
Hence, the Board requested the Registrar of Companies, Andhra Pradesh
and Telangana for 3 months extension for conducting the AGM. The
Registrar of Companies, Andhra Pradesh has extended the time up to 31
March 2016.
Directors:
The Board has appointed Ms. Shruti Agarwal and Mr. Suresh Chandra
Agarwal as Additional Independent Directors with effect from 14th May,
2015 and 22nd July, 2015 respectively, to comply with the requirements
of Companies Act, 2013.
Mr. Anand Bharti, who has been longest in the office, will retire at
the ensuing Annual General Meeting and being eligible, offer himself
for reappointment.
The Board of Directors of the Company has decided to adopt the
provisions with respect to appointment and tenure of Independent
Directors which is consistent with the Companies Act, 2013 and the
amended Listing Agreement. Accordingly, the Independent Directors will
serve for not more than two terms of five years each on the Board of
the Company.
Ms. Shruti Agarwal and Mr. Suresh Chandra Agarwal, being eligible and
offering herself/ himself for appointment, is proposed to be appointed
as Independent Director for five (5) consecutive years commencing from
30.03.2016.
The Board of Directors of the Company at its meeting held on
14thNovember 2015, has subject to the approval of Members, appointed
Mr. Anand Bharti as Whole Time Director for a period of one year ending
on 31st December 2016.
Directors' Responsibility Statement:
As required under Section 134 (5) of the Companies Act, 2013, the
Directors hereby confirm that:
(i) in the preparation of the annual accounts, the applicable
accounting standards have been followed and there are no material
departures from the same;
(ii) such accounting policies have been selected 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 30th June, 2015 and of the profit or loss of the
Company for that period:
(iii) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act for safeguarding the assets of the Company and for
preventing and detecting frauds and other irregularities; and
(iv) The annual accounts have been prepared 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; and
(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.
Auditors:
M/s. Laxminiwas & Jain, Chartered Accountants, Auditors of the Company,
retire at the ensuing Annual General Meeting and being eligible, offer
themselves for re- appointment.
Auditors' Qualifications and Management's Reply:
1. 'Basis for Qualified Opinion' of the Audit Report:
The Company has accumulated losses of Rs. 161,161,535 as at 30 June
2015 which have exceeded the paid up capital and reserves of Rs.
160,522,805 of the Company at that date. The Company had been declared
sick on 9 February 2010 and had made a reference to the Board for
Industrial & Financial Reconstruction (BIFR) in terms of Section 15(1)
of the Sick Industrial Companies (Special Provisions) Act, 1985.
During the year, company ceases to be a sick industrial Company vide
order dated 08 June 2015 within the meaning of Section 3(1)(o) of Sick
Industrial Companies Act (SICA) as its net worth has turned positive as
on 31st December 2014. However as on 30 June 2015, the net worth has
turned negative amounting to Rs. 639,730.
Considering the financial position of the Company as at 30 June 2015 and
the subsequent financial stress caused by the Alumeco Group withdrawing
extended credit terms for supply of raw material, there exists
significant uncertainty as to whether the Company will be able to
continue as a going concern. The Management is in the process of
evaluating available options to rehabilitate the Company. The financial
results for the year ended 30 June 2015 have been prepared on a going
concern basis and do not include any adjustments relating to the
recoverability and classification of recorded asset amounts, or, to
amounts or classification of liabilities that may be necessary if the
Company is unable to continue as a going concern.
Management's Reply:
The accumulated loss at the year end is Rs. 161.16 million which is
more than 100% of the net worth of the Company. However, during the
year, company ceases to be a sick industrial Company vide order dated
08 June 2015 within the meaning of Section 3(1)(o) of Sick Industrial
Companies Act (SICA) as its net worth has turned positive as on 31st
December 2014.
The Alumeco Group, Denmark took a commercial decision to stop extending
the facility of supplying raw material on credit to the Company, as was
being done in the past. This decision coupled with the accumulated
losses in the Company and the prevailing adverse business conditions
(on account of liquidity crunch, labour problems, power cuts, poor
order book position due to bad economic scenario, credit crunch in the
market, etc.), has further strained the financial position of the
Company. However, the Board of Directors and the Management of the
Company are actively pursuing various available options to rehabilitate
the Company and currently believe that the Company would be in a
position to continue as a going concern. Hence, these financial
statements have been prepared under the going concern assumption.
2. Matter of Emphasis
1. Note 2.25(h) which describes the uncertainty related to the outcome
of the lawsuit filed against the Company by the workers regarding
settlement of compensation amounting to Rs.10,816,903.
Management Reply
Till the end of the relevant financial year the Company has settled 39
workers out of 97 workers with mutual agreement on individual basis and
the approximate liability regarding settlement compensation for
remaining 58 workers is estimated to be Rs. 10.82 million on the basis
of earlier settlements. As the amount is not certain at this stage,
provision is not made and shown as contingent liability.
2. Note 2.27 (C) with regards to extraordinary item on account of write
back of Rs. 96,456,372 (excluding exchange effect) payable to creditors
with mutual consent for which direct confirmation is not received.
Management Reply
During the year, Alumeco Handler services GmbH has waived off the
payable amount of Rs. 96.46millions with mutual consent, for which the
auditors had received the direct confirmation on later date.
3. Note 2.29 regarding provision of gratuity amounting Rs. 4,945,334
and compensated absences amounting to Rs. 988,708 is provided on actual
basis and no actuarial valuation has been made as per the requirement
of Accounting Standard -15 - Employee Benefits.
Management Reply
Since Company has already made application for closure, provision for
gratuity and compensated absences has been made on actual basis. As at
the end of the year, there is no employee on whom further gratuity
liability is to be accrued. Hence no actuarial valuation is being done.
4. As per Sec. 138 of Companies Act, 2013 internal audit has not been
carried out by the Company as there were no operations in the company
during the year.
Management Reply
Since the production is closed and there is no other operations in the
company. Therefore, the internal audit has not been carried out during
the year.
Cost Audit:
As the production of the company is closed since July, 2013, the
Company has not appointed the Cost Auditor for year 2014- 2015.
Secretarial Audit:
As prescribed by Securities and Exchange Board of India (SEBI), a
Practicing Company Secretary carries out Secretarial Audit at the end
of every quarter, and the report is regularly submitted to the Bombay
Stock Exchange. However, as required under the Companies Act, 2013,
the Company has appointed Mr. Raghava Reddy Sadhu, Practicing Company
Secretary, as Secretarial Auditor for the year 2014-2015 and his report
is annexed to Directors Report as Annexure III.
Declaration by independent directors :
The Company has received necessary declaration from each independent
director under Section 149(7) of the Companies Act, 2013, that he/she
meets the criteria of independence laid down in Section 149(6) of the
Companies Act, 2013 and Clause 49 of the Listing Agreement.
Board evaluation
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, Independent Directors at their meeting held on
15th May, 2015 without the participation of the Non-independent
Directors and Management, considered/evaluated the Boards' performance,
Performance of the Chairman and other Non- independent Directors.
Clause 49 of the Listing Agreement mandates that the Board shall
monitor and review the Board evaluation framework. The Companies Act,
2013 states that a formal annual evaluation needs to be made by the
Board of its own performance and that of its committees and individual
directors. Schedule IV of the Companies Act, 2013 states that the
performance evaluation of independent directors shall be done by the
entire Board of Directors, excluding the director being evaluated. The
evaluation of all the directors and the Board as a whole was conducted
based on the criteria and framework adopted by the Board.
Policy on directors' appointment and remuneration:
The current policy is to have an appropriate combination of executive
and independent directors to maintain the independence of the Board. As
on 30th June 2015, the Board consists of 4 members, one of whom is
Whole Time Director, one is promoter non-executive director and two are
independent directors. The Board will annually evaluates the need for
change in its composition and size. The policy of the Company 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, adopted by the Board. The remuneration
paid to the directors is as per the terms laid out in the Nomination
and Remuneration policy of the Company.
Risk Management and Whistle blower Policy
Pursuant to section 134 (3) (n) of the Companies Act, 2013 and Section
177(9) of the Companies Act, 2013 read with Clause 49 of the Listing
Agreement the Company has to form a Risk Management and Whistle blower
Policy respectively. However, as operations of the Company are closed
since July 2013, it is not required to form any Risk Management and
Whistle blower Policy.
Number of meetings of the Board :
The Board met six times during the financial year, the details of which
are given in the Corporate Governance Report that forms part of this
Annual Report. The intervening gap between any two meetings was within
the period prescribed by the Companies Act, 2013.
Public Deposits:
The company has not accepted deposits from public as envisaged under
Sections 73 to 76 of Companies Act, 2013 read with Companies
(Acceptance of Deposits) Rules, 2014 during the year under review.
Corporate Governance:
Report on Corporate Governance Pursuant to Clause 49 of the Listing
Agreement, and Certificate on Compliance of Corporate Governance form
part of this Report.
Business Responsibility Report (BRR)
Securities Exchange Board of India (SEBI) vide circular
CIR/CFD/DIL/8/2012 dated August 13, 2012 has mandated the inclusion of
BRR as part of the Annual Report for the top 100 listed entities based
on their market capitalization on Bombay Stock Exchange Limited as at
March 31, 2014. In view of the requirements specified, the company is
not mandated for the providing the BRR and hence do not form part of
this Report.
Management Discussion and Analysis Report:
Management Discussion and Analysis Report as stipulated under Clause 49
of the Listing Agreement is presented in a separate section in this
Annual Report.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo:
The details of conservation of energy, technology absorption, foreign
exchange earnings and outgo are as follows:
(A) Conservation of Energy: N.A.
(i) the steps taken or impact on conservation of energy; (ii) the steps
taken by the company for utilising alternate sources of energy; (iii)
the capital investment on energy conservation equipments;
(B) Technology absorption: N.A.
(i) the efforts made towards technology absorption; (ii) the benefits
derived like product improvement, cost reduction, product development
or import substitution; (iii) in case of imported technology (imported
during the last three years reckoned from the beginning of the
financial year:-
(a) the details of technology imported; (b) the year of import; (c)
whether the technology been fully absorbed; (d) if not fully absorbed,
areas where absorption has not taken place, and the reasons thereof;
and (iv) the expenditure incurred on Research and Development.
(C) Foreign exchange earnings and Outgo:
The Company had no foreign exchange earnings and outgo during the
financial year.
Whole Time Director and Finance Manager Certification:
As required, the Whole Time Director and Finance Manager's
Certification is at Annexure-I
Material Changes and Commitments affecting the Financial Position of
the Company
During the year under review the Company has come out of the BIFR
purview as the net worth of the Company become positive as on 31st
December, 2014mainly because of Reversal of Liability payable to
Creditors.
In order to improve liquidity and reduce debts, the board of directors
has proposed to sell the assets and properties together with its
rights, title and interest in the movable, immovable properties (both
tangible and intangible) and current assets, to ensure smooth
functioning of operations. For the above said purpose, a special
resolution for the approval of shareholders by means of postal ballot
is under process and the voting period for resolution is from
17/02/2016 (09:00 A.M.) to 17/03/2016 (05:00 P.M.).
On 24/12/2015, the Company have settled all the pending issues with the
workmen by entering into mutual agreements with the workmen. The
Company has paid 30% of the agreed compensation to workmen and balance
shall be paid within 3 months.
Particulars of Loans, Guarantees or Investments under section 186
As on 30th June, 2015 there were no outstanding loans or guarantees,
investments made and securities provided as covered under the
provisions of section 186 of the Companies Act, 2013.
Contracts and Arrangements with Related Parties
All related party transactions that were entered into during the
financial year were at arm's length basis and were in the ordinary
course of the business. Your Directors draw attention of the Members to
Note 2.27 of Notes on Accounts to the financial statement which sets
out related party disclosures.
Extract of Annual Return
Extract of Annual Return of the Company is annexed herewith as Annexure
II to this Report.
Particulars of Employees
Information as per Rule 5(2) and (3) of Chapter XIII, the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014-
details furnished below:
Name of the Director / Employee Anand Bharti
Designation Whole Time Director
Remuneration received 4,20,000/- p.a.
Nature of employment, whether contractual or Director
otherwise
Qualifications and experience of the employee Under Graduate
Date of commencement of employment 14/11/2013
The age of such employee 57 years
The last employment held by such employee
before joining the company NIL
The percentage of equity shares held by the
employee in the company NIL
Whether any such employee is a relative of
any director No
Notes:
1. There were no confirmed employees on the rolls of the Company as on
30thJune 2015
2. Median remuneration of employees of the Company during the financial
year 2014-2015 was NIL.
The Sexual Harassment of Women at the Workplace (Prevention, Prohibition
& Redressal) Act, 2013
During the year under review, there was no employee, as the production
of the Company is discontinued with effect from July, 2013. Therefore,
the reporting requirements under the Sexual Harassment of Women at The
Workplace (Prevention, Prohibition & Redressal) Act, 2013 is not
applicable.
Internal Audit:
Since the production of the Company is closed since July 2013, Internal
Audit is not carried out during the year.
Listing of Securities:
The Company is listed on the Bombay Stock Exchange and is regular in
paying the annual listing fee to the Stock Exchange.
Personnel:
During the year under review, there was no employee, as the production
of the Company is discontinued with effect from July, 2013.
Corporate Social Responsibility [CSR] - Not Applicable
Statement on Other Compliances
Your Directors state that no disclosure or reporting is required in
respect of the following items as there were no transactions on these
items during the year under review:
a. Details relating to deposits covered under Chapter V of the Act.
b. Issue of equity shares with differential voting rights as to
dividend, voting or otherwise;
c. Issue of shares (including sweat equity shares) to employees of the
Company.
d. Neither the Managing Director nor any of the Whole-time Directors
of the Company receive any remuneration or commission from any of its
subsidiaries;
e. No significant or material orders were passed by the Regulators or
Courts or Tribunals, which impact the going concern status and
Company's operations in future;
During the year, Alumeco Handlerservices GmbH has waived off the
payable amount of Rs. 96.46 millions with mutual consent, which has
significant impact on the Financial Statements.
Acknowledgments:
The Directors acknowledge the contribution made by the employees
towards the success of the Company. They thank the Company's valued
customers for their continued patronage. They also acknowledge the
support of the shareholders.
For and on behalf of the Board of Directors
Place: New Delhi Ashish Kumar Gupta
Dated: 5th March 2016 Chairman, DIN: 00061551
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