excel glasses ltd share price Directors report

TO THE SHAREHOLDERS

To, -

The Members of

Excel Glasses Limited

Presentation on the Forty Seventh Annual Report, together with the Audited Financial Statements of the Company for the year ended 31^s* March 2019.

1. FINANCIAL RESULTS

The performance of the Company for the financial year: 2018-19 is as under

(Rs. In Lacs)

	2018-19 (12 Months)	2017-18 (12 Months)
Net Sales & Other Income	(2.27)	116.83
Profit /(Loss) before Interest,	(78.20)	83.75
Depreciation and Extra
Ordinary Items .
Less:
Interest	33.15	60
Depreciation	645.76	3164.23
Provision for Taxation	-	-
Profit/ (Loss) After Taxation	366.13	(3140.48)

The Management of the Company was compelled to suspend the operations of the Plant at various shifts due to labour unrest & cessation of work by the workers unions from time to time even after signing of LTA and finally the Management declared lock out of the Company w.e.f. 27th December, 2012.

2. INITIATION OF CORPORATE INSOLVENCY RESOLUTION PROCESS (CIRP):

The Financial creditors of the Company has filed an application on 11^th February 2019 for initiation of Corporate Insolvency Resolution Process (‘CIRP) against our Company u/s 7 of Insolvency & Bankruptcy Code, 2016 (‘IBC) with National Company Law Tribunal (NCLT), Chennai.

Pursuant to the order dated 26^th March 2019 (received on 27.03.2019) of the Honble National Company Law Tribunal (NCLT), Chennai, Corporate Insolvency Resolution Process (CIRP) has been initiated under the provisions of the Insolvency and Bankruptcy Code, 2016 (“the Code”) with effect from 27th March 2019.

Pursuant to the same, the powers of the existing Board of Directors of the Company are suspended

as per Section 17 of the IBC and vested with Mr Ravindra Chaturvedi, Resolution Professional.

Since the Powers of the Board of Directors are vested with the Resolution Professional the management of the affairs of the Company will be under the overall control, supervision and guidance of the Resolution professional from the date of the order till the completion of Corporate Insolvency Resolution Process. The Powers vested with the Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee will also be exercised by the Resolution Professional. The Status of the Board of Directors and Committees are as on the date of the NCLT order.

In this connection, Mr. Ravindra Chaturvedi has been appointed as Resolution Professional (RP) to carry out the activities relating to CIRP as per the rules, regulations and guidelines prescribed by the Code. Since the company is under Corporate Insolvency Resolution Process (CIRP), as per Section 17 of the Insolvency & Bankruptcy. Code, from the date of appointment of the Resolution Professional - (a) the management of the affairs of the Company shall vest in the Resolution Professional, (b) the powers of the Board of Directors Company shall stand suspended and be exercised by the Resolution Professional, (c) The Resolution Professional shall be provided access to such documents and records of the Company as may be required by the Resolution Professional, (d) the financial institutions / banks maintaining accounts of the Company shall act on the instructions of the Resolution Professional in relating to such accounts furnish all information relating to the Company available with them to the Resolution Professional.

As per the books of accounts of the company, the majority of the financial transactions recorded therein pertain to a period before March 27, 2019 (i.e. insolvency commencement date) wherein the suspended board of directors of the company was responsible for the affairs and day to day functioning of the Company. The transactions recorded after March 27, 2019, includes only the annual provisioning pertaining to Depreciation, Audit Fees, Share Transfer Agent Fees & Newspaper publication of CIRP commencement, Bank Charges.

The financial statements have been approved by the RP solely on the basis of and on relying on the information and representation given by the management (i.e. suspended board of directors) of the Company for the financial transactions incurred

before the date of Cl RP commencement. The RP has approved the said financials only to the limited extend of discharging the powers of the boards of Directors of the Company which have been conferred upon him inter alia in terms of provision of section 17 of the IBC, 2016 and do not make any representations, verification or issue any statements in relations to the financial statements are true, complete and accurate in all respects.

3. STATE OF AFFAIRS:

The company is currently undergoing CIRP under the provisions of the Insolvency and Bankruptcy Code, 2016. Considering the above, the Company has no immediate plans for action.

4. REFERENCE TO B.I.F.R.

Company had filed a reference u/s 15 (I) of the Sick Industries Companies (Special Provisions) Act 1965 (SICA) before Board for Industrial & Financial Reconstruction (B.I.F.R) informing the said Board that net worth of the Company had been eroded fully as on 30-09-2012 and the Company had become a Sick Company. However w.e.f. 1^st December, 2016 the BIFR has been abolished pursuant to notification S.O. 3568(E) and S. O. 3569(E). The management is in advanced discussion with the Government for seeking full support for the revival of the Company.

5. DIVIDEND

Your Directors regret their inability to recommend any dividend in view of losses incurred.

6. RESERVES

The Board reports that the Company has not transferred any amount to the reserves during the current financial year.

7. MATERIAL CHANGES AND COMMITMENTS:

Save as mentioned elsewhere in this Report, no material changes and commitments affecting the financial position of the Company have occurred between end of the financial year of the Company March 31,2019 till the date of this report, except the following:

Suspension of Powers of Board due to Initiation of Insolvency proceedings against the Company by Honble National Company Law Tribunal (NCLT), Chennai Bench vide its order dated 26th March 2019.

As per section 17 of the IBC, 2016, the powers of the Board of Directors stands suspended and such powers shall be vested with Ravindra Chaturvedi

(IBBI registration number IBBI/I PA-001 /I P-

P00792/2017-18/11359 appointed as the IRP with respect to the Company and continued as Resolution Professional by the Committee of Creditors in its first meeting held on 25th April 2019 under provisions of the code.

There have been no material changes that have occurred subsequent to the date of the report and the closure of the financial year to which the balance sheet relates.

8. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE:

Initiation of Insolvency proceedings against the Company by Honble National Company Law Tribunal (NCLT), Chennai Bench vide its order dated 26th March 2019.

As per section 17 of the IBC, 2016, the powers of the Board of Directors stands suspended and such powers shall be vested with Ravindra Chaturvedi (IBBI registration number IBBI/IPA-001/IP- P00792/2017-18/11359 appointed as the IRP with respect to the Company and continued as Resolution Professional by the Committee of Creditors in its first meeting held on 25th April 2019 under provisions of the code.

9. DETAILS OF SUBSIDIARY/JOINT VENTURES/ ASSOCIATE COMPANIES:

The Company does not have any subsidiaries/ joint ventures and/or associate companies as on the date of this report.

10. PUBLIC DEPOSITS:

The Company has not invited or accepted deposits from the public covered under Section 73 of the Companies. Act, 2013 and The Companies (Acceptance of Deposits) Rules,2014.

12. AUDITORS:

Pursuant to section 139 of the Companies Act, 2013 and rules framed thereunder, the Company had appointed M/s. Balakrishnan & Co., (FRN No. 011890S), were appointed as Statutory Auditors of the Company to hold office till the conclusion of the Annual General Meeting to be held in the calendar year 2020, subject to the ratification of the appointment by the members at every Annual General Meeting held thereafter.

The requirement to place the matter relating to appointment of Auditors for ratification by members at every Annual general Meeting is done away vide notification dated May 7,2018 issued by the Ministry of Corporate Affairs, New Delhi. Accordingly, no resolution has been placed before the shareholders for ratification of appointment of Auditors.

13. AUDITORS REPORT:

AUDIT QUALIFICATIONS

The qualifications in the attached Auditors Report read with the notes on accounts are self explanatory except those points which are being explained as below:

The Company has prepared accounts for the year 2018-19 based on the concept of Going Concern. Certain provisions were made on the estimated basis and for known expenses were accounted in full.

Your Directors have also noted the observation of the auditors along with the notes on accounts and wish to comment / clarify on the important observations as follows:

(i) The Company was steadily maintaining its books of accounts on the concept “going concern basis” in-spite of losses incurred by the Company. The Company has been referred to BIFR and expect various reliefs and concession. Accordingly the Company continues to follow its decision taken in the previous years to maintain the accounts on the concept of going concern basis.

(ii) The Company, is under lock out since 27.12.2012. Your Board of Directors are also facing the practical difficulty in getting confirmation in respect of Account Receivables from various debtors in a locked out Company. Thus we are not in a position to provide the required information on the realizable value of debtors.

(iii) The said Creditor though they were appointed as the internal auditor of the Company they have not given proper service as an internal auditor for the period. They have not done any Internal Audit work satisfactorily during the period and did not give any reports which they supposed to give to the Company as an internal Auditor. Your Board of Directors has noted this lack of responsibility from the part of a professional service provider very seriously and Board raised dispute on the amount due to

the said creditor. Hence it is not payable by the company and accordingly it is not disclosed “.

(iv) Due to continued labour unrest, the management was compelled to declare lock out of the unit on 27.12.2012. Since the Company is under lock out there are no skilled workers and management staff available to conduct the stock verifications and thus your Board of directors are not in a position get the stock valuation done.

(v) The Company has write back of sundry balance under the Amensty Scheme by the Sales Tax Department, Kerala as per the Order No. KGST 13015036 and as per the Certificate no. A3/706/2018 dt 28/12/2018 issued by Sales Tax Office, O/o. AIT & STO, State Goods & Service Tax Department, Kerala.

(vi) Remedial steps are being taken on other adverse remarks raised in the Auditors Report. However consequent to the lock out of the Company and continuous shortage of qualified staff, the implementation is delayed.

14. SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed M/s KPUB & Co., Practicing Company Secretaries as Secretarial Audit of the Company.

The Secretarial Audit Report for the financial year ended 31^st March, 2019 is annexed herewith as “Annexure 1”.

Your Directors have also noted the observation of the Secretarial Auditors and wish to comment/ clarify on the important observations as follows:

1. The Company is under lock out since 27.12.2012 and has already applied for Registered with BIFR. The Company is taking remedial steps on remark raised in the Secretarial Audit Report. However consequent to the lock out the Company and continuous shortage of qualified staff, the implementation is delayed.

2. The Company is closed since December 2012 and has already applied for registered for BIFR.

3. Company has not appointed Internal Audit, and Cost Auditor as company is under lock out and there is no operation since 27.12.2012.

15. SHARE CAPITAL

The authorised share capital of the Company is Rs. 25 crores comprising equity share capital of Rs. 15 crores and preference share capital of Rs. 10 crores.

16. EXTRACT OF ANNUAL RETURN

The Board hereby attaches as Annexure 2 an extract of annual return in Form MGT-9 as envisaged under the provisions of the Companies Act, 2013. Copy of the Annual Return of the Company is available on the website of the Company at www.excelglasses. com under the head Investors Information

17. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE *EARNINGS AND OUTGO

Particulars of conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014 are given in the “Annexure 3” hereto and forms part of this Report.

18. CORPORATE GOVERNANCE

The Company falls under the exemptions of Chapter IV of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, however a separate report on the practices followed by the Company on Corporate Governance along with Auditors certificate on its compliance is annexed and forms part of this report.

19. DEPOSITORY SYSTEM

Equity shares of the Company are tradable compulsorily in demateralised form and your Company has established connectivity with both the depositories, i.e. National Securities Depository Limited and Central Depository Services (India) Limited through share transfer registrar. In view of the numerous advantages offered by the Depository system, members are requested to avail demat facility of the Companys shares.

20. DIRECTORS:

The following are the Suspended Board of Directors of the Company as on the date of this report:

DIN	Directors	Date of  Appointment
06509470	Surendran Nair	06/03/2013
06978066	Ramdas K Kamat	04/09/2014
02808196	Jayakumar K Chettiyar	14/05/2013
06597342	Tribhuvan K Pandey	30/03/2013
08151398	Beena K Abdul Jabar	07/06/2018
08165101	Venugopal Bhaskara Karta	25/06/2018

a. Change in Directorship during the year:

During the year under review Mrs. Beena K. Abdul Jabar (DIN: 08151398) has been appointed as an Independent Director of the Company for a term of 5 consecutive years w.e.f. 7^th June 2018.

Further in terms of Section 196, 197, 203 and Schedule V of the Companies Act, 2013 and the rules made there under Mr. Venugopal B. Karta (08165101) was appointed as a Whole time Director of the Company w.e.f. 25th June 2018 for a period of 3 years.

b. Change in Key Managerial Personnel during the year.

During the year under review. Mr. Rajendra Prasad Tiwari has been appointed as the Chief Financial Officer (CFO) of the Company w.e.f. 25^thJune 2018.

Further pursuant to Section 203 read with rule 8 of Companies (Appointment and Remuneration) Rules, 2014, Ms. Arpita Jain an Associate member of Institute of Company Secretaries of India was appointed as Whole Time Company Secretary of the Company w.e.f. 25^th June 2018.

c. Statement on declaration given by Independent Directors under sub-section (6) of Section 149:

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.

d. Familiarization programme undertaken for Independent Directors:

The Independent Directors are familiarised with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company etc. On appointment, the Independent Director is issued a Letter of Appointment setting out in detail, the terms of appointment, duties, responsibilities and expected time commitments. Each newly appointed. Independent Director is taken through a formal induction program on the Companys operations, marketing, finance and other important aspects. The Company Secretary briefs the Director about their legal and regulatory responsibilities as a Director.