The Directors are pleased to present the 14th Annual Report of the Company together with Audited Accounts for the financial year ended 31st March, 2016.
(Rs. in Lacs)
|Particulars||Current Year 31-03-2016||Previous year 31-03-2015|
|Revenue from Operation (net)||96,140.85||1,14,769.22|
|Profit before Finance Cost, Depreciation and Tax||(16,122.29)||(652.35)|
|Less: Depreciation & Amortisation||(6,111.81)||(7,366.14)|
|Less: Finance Cost||(13,486.25)||(11,309.92)|
|Less: Tax Expenses||-||-|
|Net Profit after Tax||(35,720.35)||(19,328.41)|
|Add: Balance brought forward from previous year||(9,919.33)||9,438.50|
|Adjusted for Depreciation relating to Fixed Assets||-||(29.42)|
|Balance carried over to Balance Sheet||(45,639.68)||(9,919.33)|
FINANCIAL AND OPERATIONAL REVIEW
During the year under review, the Company has achieved Net Sales/Income from Operation of Rs. 96,140.85 Lacs as against Rs. 1,14,769.22 Lacs in previous year registering a decline of 16.23%. The Company incurred a net loss of Rs. 35,720.35 Lacs as against Rs. 19,328.41 Lacs in the previous year. The decline in Sales and increase in losses are mainly attributed to depressed market for steel impacting the net realisation and margin. Slower growth in several sectors of the economy resulted into weaker domestic demand. On the other hand, rising inflation in the country resulted in increase in the cost of raw materials and other overheads which could not be passed on to the consumers.
The plant has been put under suspension of work since February, 2016 mainly on account of (i)Depressed domestic and global market conditions in Steel Industry causing huge and unbearable losses to the Company; (ii)Exhaustion of water supply sources. Water is a critical element in Steel Industry and (iii) Excess manpower causing high operating costs.
State Bank of India, the leader of Consortium of Lenders Banks in the meeting of Joint Lenders Forum (JLF) decided to invoke the Strategic Debt Restructruing (SDR) against the Company w.e.f. 16th December, 2015. The scheme, however, has not been implemented so far.
TRANSFER TO RESERVE
Since the Company has incurred losses during the year, no amount has been transferred to Reserves.
In view of the losses incurred by the Company, the Directors of the Company do not recommend any dividend for the financial year 2015-16.
The Board met fourteen (14) times during the year, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
CHANGES IN SHARE CAPITAL
To accommodate the allotment of equity shares consequent to Preferential Issue, the Board has increased the Authorised Share Capital from Rs. 1,22,25,00,000 to Rs. 1,41,20,00,000. The Capital clause of the Memorandum of Association of the Company was amended accordingly.
The Board of Directors in their meeting held on 30th September, 2015, has converted the unsecured loan of Rs. 38.07 crores into equity by issuing 1,90,35,000 equity shares of Rs. 10 each at a premium of Rs. 10 per share on preferential basis to the
Promoters & the entity belonging to Promoter group, in terms of the approval received from the shareholders through Postal Ballot and the results announced on 22nd July, 2015.
In accordance with the provisions of the Companies Act, 2013, Mr. Suresh Kumar Patni (DIN: 00032674) retires by rotation and being eligible, offers himself for re-appointment.
During the year Mr. Ankit Patni (DIN: 00034907), Managing Director of the Company has resigned from the directorship of the Company w.e.f. 22nd August, 2015.
During the year Mr. Ramesh Seemakurti (DIN: 00096163), Non-Executive Director of the Company has resigned from the directorship of the Company w.e.f. 14th November, 2015.
Pursuant to the provisions of section 161 of the Companies Act, 2013, read with the relevant provisions in the Articles of Association, Mr. Ankit Patni (DIN: 00034907) was appointed as an Additional Director (Non-Executive Promoter) by the Board of Directors of the Company w.e.f. 15th December, 2015 to hold office up to the date of ensuing Annual General Meeting. The Company has received a notice in writing from a member proposing his candidature for the office of NonExecutive Promoter Director.
Pursuant to the provisions of section 196, 197, 198, 203 of the Companies Act, 2013, read with Schedule V, Mr. Sanjay Singh (DIN: 00531906), Executive Director, whose tenure expired on 23rd August, 2015, was re-appointed for a further period of three (3) years from 24th August, 2015 to 23rd August, 2018.
KEY MANAGERIAL PERSONNEL
Company Secretary & Compliance Officer
Mr. Nikhil Deora (PAN: BDZPD9721N), Company Secretary and Compliance Officer of the Company had resigned from the post w.e.f. 30th September, 2015.
Consequent to Mr. Nikhil Deoras resignation, the Board had appointed Mr. Ayan Chakraborty (PAN: AOPPC8237G) as the Company Secretary and Compliance Officer of the Company w.e.f. 8th October, 2015. However Mr. Ayan Chakraborty had resigned from the post w.e.f. 26th November, 2015.
The post of Company Secretary and Compliance Officer is yet to be filed.
Chief Financial Officer
Mr. Anand Jain (PAN: AFVPJ5630D), Chief Financial Officer of the Company had resigned from the post w.e.f. 12th September, 2015.
Consequent to Mr. Anand Jains resignation, Mr. Raj Kumar Agarwal (PAN: ACRPA8105D), was appointed as Chief Financial Officer of the Company w.e.f. 12th September, 2015. However, he resigned from the services of the Company w.e.f. 24th March, 2016.
Mr. Saurabh Jhunjhunwala has been appointed as Chief Financial Officer to fill the vacancy created by resignation of Mr. Raj Kumar Agarwal w.e.f. 23rd May, 2016.
DIRECTORS RESPONSIBILITY STATEMENT
Based on the framework of Internal Financial Controls maintained by the Company, work performed by the Internal, Statutory, Cost and Secretarial Auditors and external agencies, the reviews performed by Management and the relevant Board Committees, the Board, with the concurrence of the Audit Committee, is of the opinion that the Companys internal financial controls were adequate and effective as on 31st March, 2016.
Accordingly, pursuant to section 134(5) of the Companies Act, 2013, the Board of Directors to the best of their knowledge and ability confirm:
a) that in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;
b) that we have selected such accounting policies and applied them consistently and made judgements 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 and loss of the Company for that period;
c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) that the annual accounts have been prepared on a "going concern" basis;
e) that proper internal financial controls were laid down and that such internal financial controls are adequate and were operating effectively and
f) that proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.
The Companys credit rating for Long-Term and Short-Term debts/facilities is D as rated by ICRA Limited.
SALE OF INVESTMENT
The Company has entered into a Joint Venture with Impex Ferro Tech Ltd. and formed SKP Mining Pvt. Ltd. on 16th January, 2015. Since, the purpose for which the Company was formed could not be materialsed, the Company decided to exist from the same and thus has disposed off its holding in the Company on 30th June, 2015.
DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES
Consequent upon the sale of investment in SKP Mining Pvt. Ltd., the Joint Venture with with SKP Mining Pvt. Ltd. no more exists.
EXTRACT OF ANNUAL RETURN
The details of the extract of the Annual Return in Form MGT-9 is annexed herewith and forms part of this Report as Annexure-I.
The Company has not accepted any deposits within the meaning of section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
The properties and insurable assets and interests of the Company, like building, plant and machinery and stocks, among others, are adequately insured.
At the 12th Annual General Meeting (AGM) of the Company held on 26th September, 2014, M/s. R. Kothari & Company (FRN: 307069E), Chartered Accountants, were appointed as Statutory Auditor of the Company to hold office for a term of five (5) years from the conclusion of 12th AGM (subject to ratification of such appointment by the members at every AGM) till the conclusion of the 17th AGM of the Company. Accordingly, the appointment of M/s. R. Kothari & Company (FRN: 307069E), Chartered Accountants, as Statutory Auditor of the Company is placed for ratification by the members. The Company has received a confirmation from M/s. R. Kothari & Company, Chartered Accountants, to this effect that their appointment, if ratified, would be within the limits prescribed under section 139 of the Companies Act, 2013 and the rules framed thereunder and in accordance with section 141 of the Companies Act, 2013. They have also confirmed that they hold a valid peer review certificate as prescribed under Regulation 33(d) of the SEBI (Listing Obligations & disclosure Requirements) Regulations, 2015. The Audit Committee and the Board of Directors of the Company recommend ratification of their appointment from the conclusion of this AGM upto the conclusion of the 17th AGM of the Company.
STATUTORY AUDITORS OBSERVATION
There are no qualifications or adverse remarks in the Auditors Report which require any clarification/explanation. The notes to accounts referred to in the Auditors Report are self-explanatory, and therefore, do not call for any further comments/explanations.
In terms of section 148 of the Companies Act, 2013 read with rule 14 of the Companies (Audit and Auditors) Rules, 2014, on the recommendation of Audit Committee, the Board of Directors has re-appointed Mr. Sambhu Banerjee, Cost Accountant (Membership No. 9780), as Cost Auditor of the Company, at a remuneration of Rs. 35,000 plus applicable taxes and re-imbursement of out of pocket expenses incurred by them to conduct an audit of the cost accounting records maintained by the Company for the current financial year beginning from 1st April, 2016 and ending on 31st March, 2017.
As required under section 148 of the Companies Act, 2013 read with rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to Cost Auditor is being placed at the ensuing Annual General Meeting for ratification by the members.
SECRETARIAL AUDIT REPORT
In terms of section 204 of the Companies Act, 2013 and rules made there under, M/s. A J & Associates, Practicing Company Secretary have been appointed as Secretarial Auditor of the Company. The report of the Secretarial Auditor in Form MR-3 is enclosed as Annexure-II to this report.
SECRETARIAL AUDITORS OBSERVATION
The Secretarial Auditor has the following observations in Form MR-3 enclosed as Annexure II.
i. Form MGT-14 for Appointment of Internal Auditor under section 138 for the year 2015-16 is yet to be filed.
ii. Amount remaining in Unclaimed Dividend Account due for transfer during 2015-16 is not made.
iii. The position of a Company Secretary being KMP under section 203 of the Companies Act, 2013 vacant since 26th November, 2015 is yet to be appointed.
iv. It was noted that the Company has complied the Secretarial Standards issued by the ICSI to a large extent; however the stricter implementation of the Secretarial Standards is yet to be observed by the Company.
v. It has been observed that the Company has defaulted in the payment of statutory dues within the prescribed time.
vi. There have been some instances where the Forms were filed with some delay, thereby paying the additional fees. Our Comments are as under:
i. Owing to technical glitches at MCA Portal throughout the last year, the filing was failing at many times. This led to confusion at our end and the Form was not filed, steps will be taken to file the same.
ii. We could not deposit the amounts as the Form-1INV is not available at the MCA Portal. The amount of unpaid dividend is lying with IDBI Bank and would be transferred to the IEPF account immediately on availability of Form.
iii. Due to the deteriorating financial conditions of the Company, we are not gettng proper response from the incumbents. However, continued efforts are made for such appointment at the earliest.
iv. The Secretarial Standards were issued in the last year only, we are trying our level best to implement these in entirety in the near future.
v. Statutory payments were delayed mainly because of poor liquidity position.
In terms of section 138 of the Companies Act, 2013 read with rule 13 of the Companies (Accounts) Rules, 2014, on the recommendation of Audit Committee, the Board of Directors has appointed M/s. N R & Associates, Cost Accountants, (FRN: 102903) as Internal Auditor of the Company for the financial year 2016-17 at a remuneration fixed by the Board of Directors of the Company in consultation with the Auditors.
INTERNAL FINANCIAL CONTROL SYSTEM
The Companies Act, 2013 has mandated the Company to have a formal framework of Internal Financial Controls (IFC) and has also laid down specific responsibilities on the Board, Audit Committee, Independent Directors and Statutory Auditor with regard to IFC.
The financial control system and framework is required to ensure:
The orderly and efficient conduct of its business,
Safeguarding of its assets,
The prevention and detection of frauds and errors,
The accuracy and completeness of the accounting records and
The timely preparation of reliable financial information.
The Board reviews the effectiveness of controls documented as part of Internal Financial Control (IFC) framework and take necessary corrective actions, where weaknesses are identified as a result of such reviews. This review covers entity level controls, fraud risk controls and information technology environment.
The Policies and procedure adopted by the Company ensures the orderly and efficient conduct of its business and adherence to the Companys policies, prevention and detection of frauds and errors, accuracy and completeness of the records and the timely preparation of reliable financial information.
Based on this evaluation, no significant events had come to notice during the year that have materially affected or are reasonably likely to materially affect our IFC. The management has also come to the conclusion that the IFC and other financial reporting was effective during the year and is adequate considering the business operations of the Company.
The Statutory Auditor of the Company has audited the Internal Financial Control over Financial Reporting and their Audit Report is annexed as Annexure-B to the Independent Auditors Report under Financial Statements.
DETAILS RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND EMPLOYEES
Disclosure pertaining to remuneration and other details as required under section 134(3)(q), 197(12) of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of the Directors Report as Annexure III.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO
A statement giving details of Conservation of Energy, Technology Absorption and Foreign Exchange Earning and Outgo as required under section 134(3)(m) of the Companies Act, 2013 read with rule 8 of the Companies (Accounts) Rules 2014, is annexed to this report as Annexure IV.
DECLARATION ON COMPLIANCE WITH CODE OF CONDUCT
The Board has formulated a Code of Conduct for the Board Members and Senior Management of the Company, which has been posted on the website of the Company.
It is hereby affirmed that all the Directors and Senior Management Personnel have complied with the Code and a confirmation to that effect has been obtained from the directors and the senior management.
PREVENTION OF INSIDER TRADING
The Company already had a structured Code of Conduct for Prevention of Insider Trading, with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code has been further streamlined to keep parity with the new Companies Act, 2013 and SEBI (Prohibition of Insider Trading) Regulations, 2015 and be named as Code of Conduct for Regulating, Monitoring and Reporting of Trading by Insiders which is also displayed on the website of the Company www.ankitmetal.com.
The Code requires pre-clearance for dealing in the Companys shares and prohibits the purchase or sale of Companys shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code.
All the Directors and designated employees, who hold any shares in the Company, have confirmed compliance with the Code.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/COURTS/TRIBUNALS
There are no significant material orders passed by the Regulators/Courts/Tribunals which would impact the going concern status of the Company and its future operations.
MATERIAL CHANGES AND COMMITMENTS IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT
The Company has become a Sick Industrial Company as per section 3(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 as the accumulated losses of the Company at the end of financial year 31st March, 2016 exceeded its entire net worth as per the Audited Financial Statement as on 31st March, 2016. The Company will make necessary reference to the Board for Industrial and Financial Reconstruction (BIFR) under section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985.
As per Companies (Indian Accounting Standard) (Ind AS), every listed Company and their holding and subsidiary companies (other than banking companies, insurance companies and non-banking financial companies) are required to comply with Ind AS in the preparation of their financial statements for accounting periods beginning on or after April 2016, with the comparatives for the periods ending 31st March, 2016. Accordingly, the Company has adopted Ind AS w.e.f. 1st April, 2016. The Company has devised a suitable implementation plan for adoption of Ind AS.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The Company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013. The details of the investments made by Company are given in the notes to the financial statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts/arrangements/transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on arms length basis. During the year, the Company had not entered into any contract/ arrangement/transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions between the Company and the Directors, the management, or the relatives except for those disclosed in the financial statements.
Accordingly, particulars of contracts or arrangements entered into by the Company with related parties referred to in section 188(1) of the Companies Act, 2013 in Form AOC-2 (Annexure V) is NIL.
POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Key Managerial Personnel and their remuneration. A note on Nomination and Remuneration Policy has been made a part of the Corporate Governance Report.
RISK MANAGEMENT POLICY
The Company has a defined Risk Management framework to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.
The Risk Management Policy provides for identification of risk, its assessment and procedures to minimise risk. The policy is periodically reviewed to ensure that the executive management controls the risk as per decided policy.
DISCLOSURE UNDER SEXUAL HARASSMENT OF EMPLOYEE AT WORKPLACE
The Company has an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of any employee at workplace. The Audit Committee will redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
No complaints pertaining to sexual harassment were received during the financial year 2015-16.
STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SECTION 149(6)
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 and SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 with the Stock Exchanges.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Company proactively keeps its Directors informed of the activities of the Company, its management and operations and provides an overall industry perspective as well as issues being faced by the industry. The Familiarisation Programme Policy and details of familiarisation programmes for Independent Directors is available on the Companys website www. ankitmetal.com.
The composition and terms of reference of the Audit Committee has been furnished in the Corporate Governance Report forms part of this Annual Report. There has been no instance where the Board has not accepted the recommendations of the Audit Committee.
NOMINATION AND REMUNERATION COMMITTEE
The composition and terms of reference of the Nomination and Remuneration Committee has been furnished in the Corporate Governance Report forms part of this Annual Report.
STAKEHOLDERS RELATIONSHIP COMMITTEE
The composition and terms of reference of Stakeholders Relationship Committee has been furnished in the Corporate Governance Report forms part of this Annual Report.
In terms of section 177 of the Companies Act, 2013, rules framed thereunder and Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has a vigil mechanism in place for the directors and employees of the Company through which genuine concerns regarding various issues relating to inappropriate functioning of the organisation can be communicated. For this purpose, the Board has a Vigil Mechanism and the same has been uploaded on the website of the Company i.e. www.ankitmetal.com. The policy provides access to the Chairman of the Audit Committee in certain circumstances. During the year under review, there has been no incidence reported which requires action by the Audit Committee.
CORPORATE SOCIAL RESPONSIBILITY
In line with the provisions of the Companies Act, 2013, the Company has framed its Corporate Social Responsibility (CSR) policy for the development of programmes and projects for the benefit of weaker sections of the society and the same has been approved by the CSR Committee and the Board of Directors of the Company. The Company has not spent any amount in CSR activities since the Company has incurred losses during the previous 3 years eroding the entire net worth.
The Board has carried out an annual evaluation of its own performance, the directors individually as well as the evaluation of the functioning of various Committees. The Independent Directors also carried out the evaluation of the Chairman and the Non Independent Directors, the details of which are covered in the Corporate Governance Report.
The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out in Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Report on Corporate Governance as stipulated under the above regulation forms an integral part of this Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS
Managements Discussion and Analysis for the year under review, as stipulated under Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is presented in a separate section forming part of this Annual Report.
As required by Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the CEO/CFO certification has been submitted to the Board and forms an integral part of this Annual Report.
GREEN INITIATIVES IN CORPORATE GOVERNANCE
Ministry of Corporate Affairs has permitted companies to send electronic copies of Annual Report, notices etc., to the e-mail ids of shareholders. The Company has accordingly arranged to send the soft copies of these documents to the e-mail ids of shareholders wherever applicable. In case any shareholder would like to receive physical copies of these documents, the same shall be forwarded upon receipt of written request.
The Directors wish to extend their thanks and appreciation for the valuable and continued support received from the shareholders, Companys bankers, Central and State Government authorities, Stock Exchange(s), Depository Participant(s) and all other business associates for the growth of the organisation.
The Directors also wish to place on record their deep appreciation to all the employees for their commitment and continued contribution to the Company.
ANNEXURES FORMING PART OF THE DIRECTORS REPORT
The annexures referred to in this report and other information which are required to be disclosed are annexed herewith and forms part of this Directors Report:
|I||Extract of the Annual Return (Form MGT-9)|
|II||Secretarial Audit Report (Form MR-3)|
|III||Particulars of Employees|
|IV||Prescribed particulars of Conservation of Energy, Technology, Absorption and Foreign Exchange Earnings and Outgo|
|V||Particulars of Contract or Arrangements with Related Parties (Form AOC-2)|
|For and on behalf of the Board|
|Suresh Kumar Patni|
|Kolkata, 19th August, 2016||Chairman|