To the members
Your Directors hereby present their 42nd Annual Report of the Company along with the
Statements of Accounts for the year ended 31st March, 2018.
FINANCIAL RESULTS
| Particulars |
2017-2018 |
2016-2017 |
|
(Rs in Lacs) |
(Rs in Lacs) |
| Revenue from Operations |
3899.94 |
7964.05 |
| Gross Profit/(Loss) for the year |
(4410.81) |
(29672.97) |
| Less : Depreciation |
169.13 |
198.43 |
| Profit/(Loss) before Tax & Exceptional item |
(4579.94) |
(29871.40) |
| Less: Exceptional item |
- |
- |
| Profit after Exceptional item |
(4579.94) |
(29871.40) |
| Add: Provision for Income-tax |
|
|
| For current year- Current Tax |
- |
- |
| Deferred Tax |
- |
- |
| MAT Credit Entitlement |
- |
- |
| For earlier years- Income Tax |
- |
6.51 |
| Profit/(Loss) after Tax |
(4579.94) |
(29877.91) |
| Earnings per share (in Rs.) |
(39.83) |
(259.81) |
CORPORATE OVERVIEW
The Company had an track record of
Profitability and was paying dividend consistently. But since 2014–15 onwards the
Company has incurred loss and in the financial year 2017-18 the turnover further declined
from 79.64 Crores to 39.00 Crores. Due to lower turnover by value and volume, the company
incurred loss of Rs. 45.80 Crores (Before considering other comprehensive income) during
the year. The reasons for non performance of the company and incurrence of such high loss
was mainly due to high cost of overhead per unit due to lower volume, inadequate internal
Accruals, tough competition in Domestic and International Market and sluggish economic
conditions so recovery from Debtors remains poor. The Promoter(s) have been extending
their financial and technical support to the Company. Despite the relentless efforts, and
continued support from all stakeholders, especially the Promoter(s), the changes in
external environment, and continued sub - optimal performance, has resulted in continuous
losses.
FINANCIAL REVIEW
The year 2017-18 was a tough year and the Company witnessed a sharp drop in Turnover
and Margins. Due to de-growth in business volumes, overheads and finance cost could not be
absorbed which affected the bottom line. The Net Sales for the year was Rs. 38.99 Crores
against Rs. 79.64 Crores in the previous year. The Company incurred a Loss before Tax of
Rs. 45.79 Crores as against a Loss of Rs. 297.71 Crores during the Previous Year.
OTHER INCOME
Other income consists of interest received, Profit export incentives, rent receipt,
claims received etc.
FINANCIAL EXPENSES
Financial expenses as per Financials for the year were to Rs. 13.38 Crores as against
Rs. 54.16 Crores in the Previous Year. The company has not provided for Bank Interest from
the month of July 2017, since the bank accounts have been declared NPA by the banks. Had
this interest been provided then there would have been an increase in the loss amounting
to Rs. 4,041.50 lakhs
DEPRECIATION
Depreciation was at Rs. 1.69 Crores compared to Rs. 1.98 Crores in the previous year.
EARNING PER SHARE
Earnings Per Share (EPS) stood at Rs.(39.83) compared to EPS of Rs. (259.81) in the
previous year.
SHARE CAPITAL AND NET WORTH
The paid up Equity Share Capital of the company as on March 31, 2018 was Rs. 11.50
Crores and paid up Non-Convertible Redeemable Preference share Capital stood of Rs.5.00
Crores. During the year under review, there were no changes in the share capital of the
company. The net worth of the Company has reduced to Rs. (392.56) Crores as compared to
Rs. (347.80) Crores in the previous year.
EROSION OF NET WORTH
The company’s net worth has been fully eroded. However the Management believes
that the company, if funded with sufficient working capital, will be able to generate
sufficient resources to be able to continue as a going concern. The financial statements
have been prepared under the going concern assumption and hence no adjustments are made to
the carrying value of assets and liabilities.
HUMAN RESOURCES
The Company employed good human resources practices. The Company is enjoying good and
congenial industrial relations at all of its plants. As on 31st March, 2018, the total
permanent employees were 91.
SAFETY ENVIRONMENT AND POLLUTION CONTROL
The Company continuously works on high safety standards and a clean environment free
from pollution. The manufacturing process does not generate effluents.
CURRENT OUTLOOK
The present market scenario does not appear to be very encouraging. Though the Company
is making all out efforts to regain its growth trend with major thrust on consolidation of
product mix, reduction in cost and containing of overheads and interest, the Company is
quite concerned about the outlook for the Current Year.
RISKS AND CONCERNS
The Indian economy achieved GDP growth of 7.7% in FY’17-18 compared to 7.1 % in
FY’16-17. It is expected that the Indian economy will continue to grow at 7% to 8%.
Manufacturing sectors continued to languish.
Wild currency fluctuations affect metal prices and may cause pressure on margins. No
threat is witnessed from imports. Though the Company is realigning its products to
mitigate the impact of rising cost, the steep rise in input cost is a major cause of
concern. to Due to grave shortage in working capital the company is in no position to
utilize more than 15% of the installed capacity of its manufacturing facility, though
there is an active demand in the market. With no sign of improvement in overall economic
scenario and company’s internal situations and stability in input cost, the company
looks forward to year 2018-19 with caution.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company remains committed to maintain its internal control system and procedures to
provide reasonable assurances for efficient conduct of business and security of its
assets. The Company has an elaborate budgetary control system and actual performance is
consistently monitored by the Management. The Company has a well authority levels and
internal guidelines and rules. Your company has adequate internal control systems in
place, commensurate with the size, scale and complexity of the operations. The Company has
already carried out an audit on internal financial control by third party. The Statutory
Auditors have also commented on the internal financial control on financial Reporting in
their report.
DEPOSITS
The Company had not accepted / renewed any Deposit during the year under review and
there was no outstanding Deposit.
TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of section 125 of the Companies Act, 2013, dividends which
remained unpaid or unclaimed for a period of 7 years have been transferred by the company
to the Investor Education and Protection Fund.
DIRECTORS
All Independent directors have given declaration that they meet the criteria of
independence as laid down under section 149(6) of the Companies Act, 2013 and Regulation
16 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Mr. Sunil K. Khaitan, Chairman-cum-Managing Director of the Company, retire by rotation
and being eligible offers himself for reappointment. The Directors recommend his
appointment at the forthcoming Annual general Meeting. Mrs. Sujata Chatterjee (DIN:
00245656) was appointed as an additional director by the board of directors of the Company
w-e-f 25.04.2018. She is B.A. (Hons.) and M.A. She has nearly a decade of experience in
Financial Management and Administration. The Directors recommend her appointment as
Independent Director at the forthcoming Annual general Meeting for a period upto up to
24th April, 2023. Mr. Gairik Banerjee was appointed as independent additional director
with effect from 09.06.2017. His appointment was confirmed in the Annual dated 28.09.2017.
Mr. Gairik Banerjee is M.com, Llb., MBA and ABD. He has good experience in Management and
is also Director in several other companies. The details of the Director being recommended
for appointment are contained in the accompanied Notice of the forthcoming Annual General
Meeting. Mr. Sajjan Dabriwal, Non - Executive Independent Director resigned from the Board
w.e.f 23.10.2017.
Mr. V. K. Rungta, Non-Executive Independent Director resigned from the Board w.e.f
12.05.2017.
Mr. Shiv Kumar Bajaj, Non-Executive Independent Director resigned from the Board w.e.f
20.03.2018. As a consequence, the number of Board of Directors has been reduced to two (2)
directors. Mrs. Sujata Chatterjee was appointed, as Non-Executive Independent Additional
Woman Director w.e.f 25.04.2018 to fill the vacancy caused.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186
Particulars of loans given, investments made, guarantees given and securities provided
are provided in the Financial Statement.
LOAN TO DIRECTORS
During the year, the Company has not advanced any loan nor given any guarantee nor
provided any security in connection with any loan made to any of its Director/s or to any
other person in whom the Director is interested as mentioned in Section 185 of the
Companies Act, 2013 read with Rule 10 of the Companies (Meetings of Board and its Powers)
Rules, 2014.
CHANGE IN KEY MANAGERIAL Meeting PERSONNAL
There has been no change in Key Managerial Personnel during the year.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS material orders
There are no significant passed by the Regulators / Courts which would impact the going
concern status of the Company and its future operations.
CORPORATE GOVERNANCE
Pursuant to Regulation 27 of SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, Corporate Governance Report, Chairman and Managing Director’s
declaration regarding compliance to code of conduct and Auditors’ Certificate
regarding compliance to conditions of Corporate Governance are made a part of the Annual
Report.
AUDITORS REPORT: REPLY TO QUALIFICATION IN AUDITORS REPORT
The Board has duly examined the Statutory Auditor’s report to accounts. The reply
of the management in regard to the qualifications in the auditor’s report is as
follows.
a) Regarding auditor preparation of accounts ongoing concern basis the Management
believes that the Company will be able to generate sufficient resources to be able to
continue as a going concern. Accordingly, these financial statements have been prepared
under the going concern assumption and that no adjustments are required to the carrying
value of assets and liabilities.
b) Regarding auditor qualification on balance due to / from creditors, parties to whom
advances have been given and certain debtors which are subject to confirmations, the
management is, however, of the view that no materials adjustment will be required to be
made on receipt of confirmations of the parties.
c) Regarding auditor qualification provision for Bank Interest from the month of July
2017, since all the bank accounts has been declared NPA by the banks. As such, the
management has decided that it is prudent and conservative to not provide for such
interest payable till such time they are settled.
d) Regarding auditor qualification non for provision of interest to a party, defaulting
in repayment of dues and interest, the management has decided that it is prudent and
conservative to not provide for such interest receivable till such time they are settled.
The necessary clarifications wherever necessary, have been included in the Notes to
Accounts section of the Annual Report.
STATUTORY AUDITORS
The appointment of Statutory Auditors of the company M/s Bidasaria & Associates,
Chartered Accountants (FRN 315101E) shall continue till the conclusion of the 46th Annual
General Meeting of the Company.
COST AUDITORS
M/s. Prasad & Company was appointed as Cost Auditors to do the audit for the
financial year ended 31st March, 2018.
Due to sad demise of one of the partners, the said firm was dissolved before completion
of audit. on Thereafter, SPK Associates, Cost Accountants, Kolkata, were appointed by the
Board of Directors as Cost Auditors to do the Cost Audit for the financial year ending
31st March, 2018 and 31st March, 2019.
NUMBER OF BOARD MEETINGS HELD
The Board of Directors met 4 times during the financial year 2017-18. The dates on
which the meetings were held are as follows: June 9th, 2017 (The original Board meeting
scheduled to be held on 29th May, 2017 first adjourned to 5th June, 2017 was adjourned due
to want of quorum), August 17th, 2017 (The original Board meeting scheduled to be held on
10th August, 2017 was adjourned due to want of quorum), November 8th, 2017 and February
12th, 2018.
PERFORMANCE EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, a separate exercise was carried out to
evaluate the performance of individual Directors including the Chairman of the Board who
were evaluated on parameters such as level of engagement and contribution and independence
of judgment thereby safeguarding the interest of the Company. The performance evaluation
of the Independent Directors was carried out by the entire Board. The performance
evaluation of the Chairman and the Non Independent Directors was carried out by the
Independent Directors. The board also carried out annual performance evaluation of the
working of its Audit, Nomination and Remuneration as well as stakeholder relationship
committee. The Directors expressed their satisfaction with the evaluation process.
DETAILS IN RESPECT OF FRAUD
During the Financial Year 2017-18, the Auditors have not reported any Fraud, as
prescribed under Section 143(12) of the Act.
DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act, 2013, Directors of your Company hereby
state and confirm that:
a) in the preparation of the annual Financial Statements for the year ended 31st March,
2018, the applicable accounting standards have been followed along with proper explanation
relating to material departures;
b) they 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 financialyear and of the loss of
the company for the same period;
c) the directors have taken proper and sufficient care for the maintenance ofon non
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) they have prepared the annual accounts on a going concern basis;
e) they for have laid down proper internal financial that are adequate and were
operating effectively.
f) they have devised proper systems to ensure compliance with the provisions of all
applicable laws and these are adequate and are operating effectively.
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