To the Members,
Your Directors have pleasure in presenting the Fifty Fourth Annual Report and the Companys audited financial statements for the financial year ended March 31, 2016.
1. FINANCIAL RESULTS
|Year ended 31-03-2016||Year ended 31-03-2015||Year ended 31-03-2016||Year ended 31-03-2015|
|Revenue from operation||9148.65||8402.00||7504.49||6641.88|
|Interest & Finance Exp.||1043.48||939.03||991.63||919.62|
|Less: Current tax||4.87||9.05||-||-|
|Deferred Tax Liability||-||-||-||-|
|Profit After tax (PAT)||(3122.06)||(6448.06)||(3117.26)||(6608.16)|
|Prior period expenses||143.97||-||143.97||-|
|Profit transferred to reserve||(3266.03)||(7107.31)||(3261.23)||(7267.41)|
2. Operating and Financial Performance:
The revenue from operations for the year has been Rs. 7,504.49 Lakh as against 6,641.88 Lakh in the previous year. Revenue from operations affected due to continued stiff competition in the market and recessionary trend. The Company also operated at lower capacity utilisation due to shortage of working capital which has also impacted the profitability of the Company for the year. Production cost also pushed up due to exorbitant increase in power and other input cost. Your Company has taken several remedial steps to meet the challenges viz. measures in saving cost at all front of operations, optimize use of available resources etc. In absence of profits,your directors are unable to declare any dividend for the year under review.
In view of huge losses and financial crunches, your Directors have not recommended dividend for the year ended
March 31, 2016.
4. EXPORT PERFORMANCE
Exports turnover increased to 2532.09 lacs for the year ended 31st March, 2016 as compared to 1836.46 lacs of previous year.
5. LOCK - OUT AT KHOPOLI UNIT
Lock-out, declared by the management at its Khopoli unit in November, 2013 is still continuing.
6. POSSESION OF IMMOVABLE ASSETS AT KHOPOLI UNIT UNDER SECURITISATION & RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT, 2002. (SARFAESI).
Pursuant to Companys account becoming NPA, consortium of banks led by State Bank of India had moved its application to District Collector Alibaug for Physical possession of Companys immovable property at Khpoli unit. As the Same was contested by the company and Hence, matter of physical possession of the above property is subjudice.
7. SHARE CAPITAL
There has been no change in the Share Capital of the Company.
8. Employee Stock Options Plan
No shares have been allotted under the ESOP till date. The Company has not granted any stock options during the financial year ended 31 st March, 2016.
9. VOLUNTARY DELISTING OF EQUITY SHARES FROM ONE EXCHANGE OUT OF TWO EXCHANGES
The Company is making substantial operating losses since 30th June, 2013. The Company is putting all its efforts to reduce the expenses and accordingly Board of Directors have decided to save payment of listing fees of one Stock Exchange by delisting its equity shares from National Stock Exchange of India Limited (NSE) and continue its listing only with BSE Limited ("BSE"), having nationwide trading terminals.
In terms of the SEBI Delisting Regulations, the Company has proposed the delisting of Companys shares from NSE in an application made to the Exchange on, without giving any exit opportunity to its shareholders, since the Equity Shares of the Company will continue to remain listed in BSE and the shareholders of the Company shall continue to avail the benefits of listing and trading on BSE.
10. SUBSIDIARY COMPANY
The Company has two wholly owned subsidiarys at UAE and USA which has been setup to develop the overseas market for the Company.
The Accounts of the wholly owned Subsidiaries , namely Zenith (USA) Inc. and Zenith Middle East FZ LLC for the year ended 31st March, 2016 have been received by the Company and a statement pursuant to section 129 of the Companies Act, 2013, forms part of this Annual Report. Your Directors have pleasure in enclosing the consolidated financial statements of the Company in accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Accounting standards issued by the Institute of Chartered Accountants of India.
In compliance with the general circular issued by Ministry of Corporate Affairs (MCA), Government of India, the Balance Sheet, Statement of Profit & Loss and other documents of the subsidiary are not attached hereto. As per the general exemption, a statement containing brief financial details of the Companys subsidiary for the year ended 31st March, 2016, is included in this Annual Report. The Annual Accounts of the subsidiary and the related detailed information will be made available to any Member of the Company/its subsidiary seeking such information at any point of time and are also available for inspection by any Member of the Company/its subsidiary at the
Registered Office of the Company/its subsidiary.
11. FIXED DEPOSITS:
(i) Details of deposits Accepted u/s. 58A of the Companies Act, 1956.
The Company has outstanding deposits accepted u/s 58A of the Companies Act,1956 and Rules made thereunder under Companies (Acceptance of Deposits) Rules, 1975 . Accordingly, the details relating to deposits covered under the Companies Act,1956 are given below:
|(Rs. in Lacs)|
|1. Deposits Accepted during the year||NIL|
|2. Deposits remained unpaid or unclaimed as at end of the year||2820.26|
|3. Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved:||Principal Interest|
|i. At the beginning of the year||2805.206 701.60|
|ii. Maximum during the year||2831.13 1198.79|
|iii. At the end of the year||2820.26 1181.79|
|4. The details of deposits which are not in compliance with the requirements of Chapter V of the Act||Not Applicable|
The Company made petition under section 74(2) of he Companies Act,2013, to Honble Company Law Board for extension of time for re-payment of above deposits along with interest. The Honble Company Law Board Had passed an order on 22.02.2016 granting extension for repayment of deposits upto 31.03.2017.
(ii) Details of deposits which are not in compliance with the requirements of Chapter V of the Companies Act, 2013
The Company has not accepted any deposits under Companies (Acceptance of Deposits) Rules, 2013.
Accordingly, the details relating to deposits, covered under Chapter V of the Companies act, 2013 are not given. Therefore, there are no deposits which are not in compliance with the requirements of Chapter V of the companies Act,2013
12. Reference to Board for Industrial and Financial Reconstruction (BIFR)
During the year under review, due to erosion of entire net worth of the Company as per audited accounts for the year ended 31st March, 2015, the Board of Directors had made a reference to Board for Industrial and Financial Reconstruction (BIFR) and such reference was registered with Honble BIFR vide case No. 64/2016, Dated: 19/04/2016.
13. MANAGEMENTS DISCUSSION AND ANALYSIS REPORT
In compliance with Regulation 34 (2) (e) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on Management Discussion and Analysis Report which also includes further details on the state of affairs of the Company and Corporate Governance Report, as approved by the Board of Directors.
14. CORPORATE GOVERnAnCE
A report on Corporate Governance along with the Compliance Certificate from the Practicing Company Secretary is annexed hereto and forms part of this report.
15. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act, 2013, the Directors of the Company state as under that:
1. In the preparation of the annual accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;
2. The selected accounting policies were applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company for the financial year ended 31st March, 2016 and the Loss of the Company for the financial year ended 31st March, 2016.
3. Proper and sufficientcare has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safe guarding the assets of the Company and for preventing and detecting fraud and other irregularities;
4. The annual accounts have been prepared on a going concern basis;
5. Internal financial controls had been laid down to be followed by the company and that such internal financial controls are adequate and were operating effectively; and
6. Proper systems had been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
a) Statutory Auditors:
M/s. Thakur Vaidyanathan Aiyar Chartered Accountants, (firm Registration No. 000038N) Mumbai, Statutory
Auditors of the Company, will retire as Auditors of the Company at the conclusion of the ensuing Annual General Meeting and being eligible have expressed their willingness for re-appointment. A written consent from the
Auditors has been received along with a certificate that their appointment if made, shall be in accordance with the prescribed conditions and the said Auditors satisfy the criteria provided in Section 141 of the Companies Act, 2013.
b) Internal and management Auditors:
The Company has appointed M/s. Chokshi & Chokshi LLP, Chartered Accountants as its Internal and Management Auditors to carry out the Internal Audit of various operational Areas of the company.
c) Cost Auditors:
The Board had appointed M/s. Y.R. Doshi & Co. Cost Accountants as the cost Auditor for the F.Y. 2016-17 at a remuneration of Rs. 60,000/-subject to ratification by the members in the ensuing Annual General Meeting.
17. Secretarial Auditors report
Secretarial Audit Report dated 30th May, 2016 by Anil Somani Company & Associates, Practicing Company Secretary (CP no. 13379) is attached herewith as an Annexure C to this Report.
18. AUDITORS REMARK
The Board of Directors explanation to auditors remark is as follows:
(i) Explanation for Statutory Auditors Remark
|Sr. No.||Statutory Auditors Remark||Directors explanation|
|1||With reference to Note No. 44 regarding the non provision by the Company of the interest amounting to Rs. 36.75 crores for the year and Rs. 94.97 crores upto 31-03-2016 on its working capital facilities from banks. Had this amount been provided for, the loss would have been higher by Rs. 36.75 crores and the secured loans would have been cumulatively higher by Rs. 94.97 lacs.||The Company trying for One Time Settlement (OTS) with the banks. Hence, it is felt prudent for not providing for interest after the accounts became NPA.|
|2||The Company has not complied with the provisions of the section 74 or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 2014 with regard to non repayment of deposits and interest on due date, maintenance of liquid assets to the extent required as well as not fully complying with the orders passed by the Company Law Board.||On account of huge losses and negative net worth, there was financial crunch. Hence|
|(i) as required u/s 74 of the Companies act, 2013, the company could not pay its outstanding deposits as on 31.03.2014, within a period of one year .|
|(ii) could not maintain liquid assets|
|(iii) could not comply fully with the orders passed by the Company Law Board u/s 58A(9) of the Companies Act,1956.|
|However, u/s 74(2) of the Companies Act, 2013 the Honble Company Law Board has granted an extension for repayment of deposits by its order dated 22.02.2016 . Consequently, no amounts were repayable as on 31.03.2016. The Company has provided for interest payable up to 31.03.2016.|
|3||With reference to Note No. 42 regarding the balance of Sundry Creditors, Debtors, Loans and Advances, deposits, inter units etc being not confirmed by the parties/units and hence our inability to state whether these balance are recoverable/payable to the extent stated.||Reconciliation of balances of sundry creditors are an ongoing basis and the figures would be ascertained only when the reconciliation is finalised.|
|The Company is taking steps to obtain balance confirmation from its parties. However, it will not have any material impact on the state of affairs of the Company.|
|4||With reference to Note No. 49 which indicates that the On account of strategic understanding Company has accumulated losses exceeding the Share with suppliers/ customers, which is Capital and Reserves and its net worth has been fully continuing, the Company is on revival eroded. These conditions along with other matters indicate mode and is operating its some of the existence of a material uncertainty that may cast the units. In view of the same going significant doubt about the Companys ability to continue concern concept holds good. as a going concern. However the financial statements of the Company have been prepared on a going concern basis for the reasons stated in the said note.|
|5||According to information and explanations given to us and The Company has complied with the the records of the Company examined by us, in our opinion deposit of taxes now except the once except for dues in respect of Dividend Distribution Tax, mentioned by the Auditors. Some of Tax Deducted at Source, Professional Tax, Tax Collected them are outstanding due to Financial at Source, Service Tax, Provident Fund, Employees State crunch and some of them all really Insurance, Sales Tax, Labour Welfare Fund, Value Added not outstanding but are of excess Tax, Excise Duty and Corporation Tax the Company is provisions as well as proper unit wise generally regular in depositing the undisputed statutory dues adjustments were not done. The same including Custom Duty, Cess and other material statutory is being carried out and will be reflected dues, as applicable. The following balances remain in in the next reporting year. arrears as at the last day of the financial year for a period exceeding six months from the date they become payable|
|Income Tax Deducted at Source||Rs. 39,64,045|
|Income Tax Collected at Source||Rs. 1,31,222|
|Sales Tax / Central Sales Tax||Rs. 66,90,682|
|Provident Fund||Rs. 20,78,166|
|Employee State Insurance||Rs. 1,462|
|Labour Welfare Fund||Rs. 17,713|
|Professional Tax||Rs. 38,626|
|Service Tax||Rs. 36,67,620|
|Value Added Tax||Rs. 1,00,80,583|
|Excise Duty||Rs. 49,092|
|Dividend Distribution Tax||Rs. 3,59,08,091|
|Interest on Dividend Distribution Tax||Rs. 1,83,13,126|
|Corporation Tax||Rs. 3,863|
(ii) Explanation for Secretarial Auditors Remark
|Sr.No.||Secretarial Auditors Remark||Directors explanation|
|1||The company has not filed Annual accounts for the year 2014-15.||Due to lock-out at one of our unit at Khopoli, the relevant data required for XBRL filing of Accounts could not be gathered, hence it could not be compiled.|
|The Management is in the process of getting the required information. The accounts would be filed very soon.|
|2||The company has not filed cost Audit Report for three years, viz 2012-13, 2013-14, 2014-15.||Due to lockout at Khopoli Unit since November 2013 declared by the company is at not lifted by the company and still continue and we are unable to obtain or having access for collecting information and records of all units of the company maintained at khopoli plant by costing department.|
|Moreover, our all costing staff has left the company since then. But the Company is in the process of getting the required detail for Cost Audit Purpose thus we can file cost Audit Report.|
|3||The company has not paid Listing fees to Bombay Stock Exchange and annual custody fee to NSDL & CDSL.||On account of huge losses and negative net worth, there was financial crunch. Hence, listing fee could not be paid.|
|4||The company has failed to transfer unclaimed shares in a separate demat account||On account of financial crunchs, the decision for sending reminder to shareholders was deferred. Hence unclaimed shares could not be transferred.|
19. Directors and key managerial personnel
During the year under review, the following Directors resigned from the office of Directorship:
1. Mr. Ashish mahendrakar (DIN : 03584695) resigned w.e.f 12.08.2015
2. Mr. Satish Vasant Jadhav (DIN : 06941520) resigned w.e.f 12.08.2015
3. Mr. Harish Kori (DIN : 07139454) resigned w.e.f 14.03.2016
The following persons have been appointed as Additional Director after the last Annual general Meeting:
(i) Mr Milind Prabhudesai (DIN: 07280962) w.e.f. 28.01.2016. He holds office of the Additional Director up to the ensuing Annual General Meeting of the Company. He qualifies the criteria of Independent directorship
The Company has received notice u/s 160 of the Companies Act, 2013 from a shareholder of the company proposing his Candidature for the office of the Director as Independent Director.
(ii) Mr. Ashish Mahindrakar (DIN: 03584695)w. office of the Additional Director up to..13.03.2016.Heholds the ensuing Annual General Meeting of the Company. He qualifies the criteria of directorship The Company has received notice u/s 160 of the Companies Act, 2013 from a shareholder of the company proposing his Candidature for the office of the Director as Director.
(iii) Mr Pritam Dhanawede (DIN: 07496528) w.e.f. 26.05.2016. He holds office of the Additional Director up to the ensuing Annual General Meeting of the Company. The Company has received notice u/s 160 of the Companies Act, 2013 from a shareholder of the company proposing his Candidature for the office of the Director.
20. Number of meetings of the board
Six meetings of the board were held during the year. For details of the meetings of the board, please refer to the corporate governance report, which forms part of this report.
21. Board evaluation
Companys Policy on Directors Appointment and Remuneration etc.
The Company has prepared a policy on Directors appointment and remuneration pursuant to Section 178 of the Act. The Company has also laid down criteria for determining qualifications, positive attributes and independence of Director.
Formal Annual Evaluation
The Formal Annual Evaluation has been made as follows:
a. The Company has laid down evaluation criteria separately for Board, Independent Directors, Directors other than Independent Directors and various committees of the Board. The criteria for evaluation of Directors included parameters such as willingness and commitment to fulfill duties, high level of professional ethics, contribution during meetings and timely disclosure of all the notice/details required under various provisions of laws. Based on such criteria, the evaluation was done in a structured manner through peer consultation & discussion.
b. Evaluation of the Board was made by a Separate Meeting of Independent Directors held under Chairmanship of Shri. Milind Prabhudesai, Independent director (without attendance of non Independent Director and members of management).
c. The performance evaluation of all committees were done by the Board of Directors namely:
i. Audit Committee ii. Nomination and Remuneration Committee
iii. Stakeholders Relationship Committe
d. Performance evaluation of non Independent Directors was done by Separate meeting of Independent Directors.
e. Evaluation of Independent Directors was done (excluding the Director who was evaluated) by the Board of Directors of the Company.
f. In addition, the Nomination and Remuneration Committee has carried out evaluation of every Directors performance as required under Section 178 (2) of Companies Act, 2013.
g. The Directors expressed their satisfaction with the evaluation process.
22. Declaration of Independence
The Company has received declarations from all the Independent Directors confirming that they meetthecriteria of independence as prescribed under the provisions of Companies Act, 2013 read with the Schedules and Rules issued there under.
23. Policy on directors appointment and remuneration and other details
The Companys policy on directors appointment and remuneration and other matters provided in Section 178(3) of the Act, has been disclosed in the corporate governance report, which forms part of the directors report.
24. Internal financial control systems and their adequacy
The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis, which forms part of this report.
25. Audit committee
The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report.
26. Risk management
The Board of the Company has framed the risk management policy to implement and monitor the risk management plan for the Company. The Board is responsible for reviewing the risk management plan and ensuring its effectiveness. The audit committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.
The development and implementation of risk management policy has been covered in the management discussion and analysis, which forms part of this report.
27. Particulars of loans, guarantees and investments
During the year under review, the Company has not given loans, guarantees or investments under Section 186 of the Companies Act, 2013. The details of the investments made by the Company are provided in the accompanying financial statements
28. Transactions with related parties
In accordance with the provisions of Section 188 of the Companies Act, 2013 and rules made thereunder, all related party transactions that were entered into during the financial year were on arms length basis and were in the ordinary course of business, the details of which are included in the notes forming part of the statements. There were no materially significant related party transactions which may have a potential conflict with the interests of the Company at large. Accordingly, information in Form AOC-2 is not required.
29. Material Changes and Commitments occurred between the end of financial year under review and the date on this report.
No material changes and commitments have occurred between the end of the financial year under review and the date of this report.
30. Statement pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 on conservation of energy, technology absorption, foreign exchange earnings & outgoings
Statements pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 on conservation of energy, technology absorption, foreign exchange earnings & outgoings are annexed as annexure "E " and forms part of this report.
31. Vigil mechanism/Whistle Blower Policy
The company has a vigil mechanism named Whistle Blower Policy to deal with instances of fraud and mismanagement.
32. Employees Safety
The Company is continuously endeavoring to ensure safe working conditions for all its employees.
33. Corporate social responsibility
Since the Company does not qualify any of the criteria as laid down in section 135(1) of the Companies Act, 2013 with regard to Corporate Social Responsibility, provisions of section 135 are not applicable to the Company.
34. Extract of annual return
As provided under Section 92(3) of the Act, the extract of annual return is given in Annexure F in the prescribed Form MGT-9, which forms part of this report.
35. Material Orders Passed by the Regulators / Courts / Tribunals :
There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future.
36. PARTICULARS OF EmPLOYEES
The information required under Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:
(i) The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year;
As Directors are not paid any remuneration, except the sitting fees, hence, this clause is not applicable.
(ii) The percentage increase in remuneration of each director, Chief Executive Officer,Chief Financial Officer Company Secretary in the financial year;
|Directors*, Chief Executive Officer, Chief|
|Financial Officer and||CompanySecretary||% increase in the remuneration in the financial year|
|Shri Pushkar Natu,||C.E.O.||Nil|
|Shri B. Girvanesh,||C.F.O.||12.5%|
|Shri Vimal Prakash Dubey,||Company Secretary||Nil|
* Since Directors are not paid any remuneration except sitting fees, hence, details for them are not given.
(iii) The percentage increase in the median remuneration of employees in the financial year: 322.86%
(iv) The number of permanent employees on the rolls of company: 286
(v) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration;
The average annual increase was around 8%.
(vi) the key parameters for any variable component of remuneration availed by the directors;
Since no remuneration has been paid to Directors except fee for attending Meetings, hence not applicable.
(vii) Affirmation that the remuneration is as per the remuneration policy of the company
The Company affirms that the remuneration is as per the remuneration policy of the Company.
(viii) As none of the employees is drawing remuneration not less than Rs. 102 lacs p.a. or Rs. 8.5 lacs p.m., if employed for the part of the year. Hence, the statement containing particulars of the name of top ten employees as required under Section 197(12) of the Act read with rule 5(2) of the Companies (Appointment and Remuneration of managerial Personnel) Rules, 2014 is not applicable.
37. Disclosure pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
The Company has in place a Policy for Prevention Prohibition and Redressal of Sexual Harassment at work place which is in line with the requirements of the Sexual Harassment of women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules made thereunder. All employees (permanent, contractual, temporary and trainees) are covered under this policy. The Company has constituted an Internal Complaint Committee for its Head Office and branch/sales offices under Section 4 of the captioned Act. No complaint has been filed before the said committee till date.
38. CEO/CFO Compliance Certificate
Certificate by the Chief Executive Officer (CEO) and Chief Financial Officer (CFO) pursuant to Regulation 17(8) of SEBI (Listing Obligations and Disclosure Requirements)Regulations,2015forthefinancialyear ended 31 st March, 2016 is provided under Corporate Governance Report.
Your Directors also wish to place on record their deep sense of appreciation to the contribution made by the employees at all levels who, through their competence, diligence, solidarity, co-operation and support, have enabled the Company to achieve the desired results during the year.
Your Directors would like to express their sincere appreciation for the assistance and co-operation received from the financialinstitution, banks, Government authorities, customers, vendors and members during the year under review.
|For and on behalf of the Board|
|Ashish mahendrakar||Milind Prabhudesai|
|Date : 12th August, 2016||(DIN: 03584695)||(DIN: 07280962)|