The Members of
Garg Furnace Limited
The Directors of your company have pleasure in presenting the 48th Annual
Report on the affair of the company together with the Audited Accounts for the year ending
31st March, 2021.
FINANCIAL RESULTS
(Rupees in Lacs)
|
2020-21 |
2019-20 |
| Operating Income |
11935.08 |
9852.22 |
| Profit before tax & Exceptional items |
(149.13) |
(733.35) |
| Exceptional Items |
(315.13) |
1091.62 |
| Profit before tax |
(464.26) |
358.27 |
| Provision for tax -Current Tax |
0.00 |
0.00 |
| -tax related to earlier years |
|
|
| -Deferred Tax Asset |
5.75 |
0.00 |
| Less : Mat Credit Entitlement |
0.49 |
0.00 |
| Profit after Tax |
(470.50) |
358.27 |
| Prior year Tax adjustments / Depreciation to Reverse as per Schedule - II |
0.00 |
0.00 |
| Re-measurement of define benefit liability |
(3.49) |
27.59 |
| APPROPRIATIONS |
|
|
| Transfer to General Reserve |
0.00 |
0.00 |
| Balance carried over to Balance Sheet |
(473.99) |
385.86 |
DIVIDEND
The Board of Directors does not recommend payment of dividend for the year under
review.
SHARE CAPITAL
There was no public issue, rights issue, bonus issue or preferential issue etc. during
the year. The Company has not issued shares with differential voting rights, sweat equity
shares nor has it granted any stock options.
OPERATIONS
Detailed information on the operations of the different business lines of the Company
and details on the state of affairs of the Company are covered in the Management
Discussion and Analysis Report
NUMBER OF MEETINGS OF THE BOARD
There were 5 meetings of the Board held during the year 30/06/2020, 02/09/2020,
14/09/2020, 11/11/2020 and 13/02/2021 detailed information is given in the Corporate
Governance Report, annexed hereto as part of Board Report.
DIRECTORS RESPONSIBILITY STATEMENT
As required under clause (c) of sub-section (3) of section 134 of Companies Act, 2013
directors, to the best of their knowledge and belief, state that -
a) in the preparation of the annual accounts, the applicable Accounting Standards had
been followed along with proper explanation relating to material departures;
b) the directors had 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 financial year and of
the profit and loss of the Company for that period;
c) the directors had taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of Companies Act, 2013 for
safeguarding the assets of the Company and for preventing and detecting fraud and other
irregularities;
d) the directors had prepared the annual accounts on a going concern basis; and
e) 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
f) 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.
DECLARATION BY INDEPENDENT DIRECTORS
The independent directors have submitted the Declaration of Independence, as required
pursuant to section 149(7) of the Companies Act, 2013 stating that they meet the criteria
of independence as provided in sub-section (6).
DIRECTORS REMUNERATION POLICY AND CRITERIA FOR MATTERS UNDER SECTION 178
Information regarding Directors Remuneration Policy and criteria for determining
qualifications, positive attributes, independence of a director and other matters provided
under sub-section (3) of section 178 are provided in the Corporate Governance Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Information regarding loans, guarantees and investments covered under the provisions of
section 186 of the Companies Act, 2013 are detailed in the Financial Statements.
RELATED PARTY TRANSACTIONS
There are related party transactions (RPTs) entered into by the Company during the
financial year, which attracted the provisions of section 188 of Companies Act, 2013.
There being material related party transactions as defined under regulation as
applicable of SEBI (LO&DR) Regulations 2016, there are details to be disclosed in Form
AOC-2 in that regard.
During the year 2020-21, pursuant to section 177 of the Companies Act, 2013 regulation
as applicable of SEBI (LO&DR) Regulations 2016, all RPTs were placed before Audit
Committee for its prior/omnibus approval as well as shareholders approval has been taken
in this regard.
MATERIAL CHANGES AND COMMITMENTS
There have been no material changes and commitments, affecting the financial position
of the Company, which have occurred between the end of the financial year of the Company
and the date of this Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information relating to 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 5 of Companies (Accounts) Rules, 2014 is annexed and forms part of this
report.
RISK MANAGEMENT POLICY
Information on the development and implementation of a Risk Management Policy for the
Company including identification therein of elements of risk which in the opinion of the
Board may threaten the existence of the Company is given in the Corporate Governance
Report.
CORPORATE SOCIAL RESPONSIBILITY
Provisions of section 135 of the Companies Act, 2013 are not applicable to Company.
FORMAL ANNUAL EVALUATION OF THE RFORMANCE OF BOARD, ITS COMMITTEES AND DIRECTORS
Information on the manner in which formal annual evaluation has been made by the Board
of its own performance and that of its Committees and individual directors is given in the
Corporate Governance Report.
SUBSIDIARIES AND JOINT VENTURE
Company has no subsidiary, associate and Company in Joint Venture
DIRECTORS AND KEY MANAGERIAL PERSONNEL
a. In light of the provisions of the Companies Act, 2013, Mrs. VANEERA GARG
(DIN:01283990) Director of the Company, retires from the Board by rotation this year and
being eligible, offers himself for re-appointment.
b. The Information as required to be disclosed a per regulation as applicable of SEBI
(LO&DR) Regulations 2016 in case of re- appointment of the director is provided in the
Notice of the ensuing annual general meeting.
c. Mr. Manjeet Singh (DIN: 08592748) was appointed as an Additional Independent
Director of the Company by the Board on the recommendation of Nomination &
Remuneration Committee in their meeting held on 15th November 2019, with effect
from 15th November, 2019. In accordance with provisions of section 161 of the
Companies Act, 2013 and applicable SEBI (LODR) Regulation, 2015.
Mr. Manjeet Singh is not disqualified from being appointed as Directors in terms of
Section 164 of the Act. As per the recommendation of Nomination and Remuneration Committee
and based on the performance evaluation, the Board had regularized the appointment of Mr.
Manjeet Singh (DIN: 08592748) from Additional Independent Director to Independent Director
of the Company for a period of five years w.e.f 30th September, 2020.
The Company had also received a declaration from Mr. Manjeet Singh declaring that he
meets the criteria of independence as provided under Section 146(9) of the Companies Act,
2013.
In the opinion of the Board, Mr. Manjeet Singh fulfills the conditions required to be
fulfilled for being appointed as an Independent Director of the Company as per the
provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosures
Requirements) Regulation, 2015.
d. Mr. Dharam Chand (DIN: 08592773) was appointed as an Additional Independent Director
of the Company by the Board on the recommendation of Nomination & Remuneration
Committee in their meeting held on 15th November 2019, with effect from 15th
November, 2019. In accordance with provisions of section 161 of the Companies Act, 2013
and applicable SEBI (LODR) Regulation.
Mr. Dharam Chand is not disqualified from being appointed as Directors in terms of
Section 164 of the Act. As per the recommendation of Nomination and Remuneration Committee
and based on the performance evaluation, the Board had considered the regularization of
appointment of Mr. Dharam Chand (DIN: 08592773) from Additional Independent Director to
Independent Director of the Company for a period of five years w.e.f 30th
September, 2021.
The Company has also received a declaration from Mr. Dharam Chand declaring that he
meets the criteria of independence as provided under Section 146(9) of the Companies Act,
2013
In the opinion of the Board, Mr. Dharam Chand fulfills the conditions required to be
fulfilled for being appointed as an Independent Director of the Company as per the
provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosures
Requirements) Regulation, 2015.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
During the year under review, there were no significant and material orders passed by
the regulators or courts or tribunals, which may impact the going concern status of the
Company and its operations in future, however the accounts of the company were declared by
the banks as Non-Performing Assets (NPA) and thereafter the bank has taken symbolic
possession of assets of the company u/s 13(4) of THE SECURITISATION AND RECONSTRUCTION OF
FINANCIAL ASSESTS AND ENFORCEMENT OF SECURITY INTEREST ACT, 2002 in 2018, the action of
the bank has been challenged by the company before the Concerned Debt Recovery Tribunal
(DRT). Further the management was under negotiation with the bank for one time settlement
(OTS) of account. The bank has approved the One Time Settlement (OTS) proposal of the
company vide its letter dated 13/08/2019 , which has taken on record by board of
directions in its meeting held on 14/08/2019, and authorised Managing Director to
negotiate further and give acceptance of said OTS proposal on behalf of company. The
company has accepted the said OTS proposal and Instalments in this regard are being
deposited with Bank regularly.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Internal financial controls with reference to the financial statements were adequate
and Operating effectively.
PRESENTATION OF FINANCIAL RESULTS
The financial results of the Company for the year ended 31 March, 2021 have been
disclosed as per Schedule III to the Companies Act, 2013. The same are placed on the
Companys website.
STATUTORY DISCLOSURES
As Company has no subsidiaries and joint ventures Company, the summary of the key
financials of the Companys (Form AOC-1) is not applicable to comply.
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the
prescribed particulars are set out in an annexure to the Directors Report. As per
provisions of section 136(1) of the said Act, these particulars will be made available to
shareholder on request.
A Cash Flow Statement for the year 2020-21 is attached to the Balance Sheet.
Pursuant to the legislation Prevention, Prohibition and Redressal of Sexual Harassment
of Women at Workplace Act, 2013 introduced by the Government of India, which came into
effect from 9 December 2013, the Company has framed a Policy on Prevention of Sexual
Harassment at Workplace. There was no case reported during the year under review under the
said Policy.
CORPORATE GOVERNANCE
However the company is exempted under regulation 15 (2) (a) of Securities and Exchange
Board of India (listing obligations and Disclosure Requirements) Regulations, 2015, to
comply with Regulation 17, 18, 19, 20, 21,22, 23, 24, 25, 26, 27 and clauses (b) to (i) of
sub-regulation (2) of regulation 46 and para C , D and E of Schedule V, as the listed
entity having paid up equity share capital not exceeding rupees ten crore and net worth
not exceeding rupees twenty five crore, as on the last day of the previous financial year,
The company has put in place a system of Corporate Governance. A Separate report on
Corporate Governance forming part of the Annual Report is annexed hereto.
Particulars of Employees
Information as per Section 197 of the Companies Act, 2013 (the Act) read with the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of
this Report is NIL .However salary being paid to whole time directors is mentioned in
Corporate Governance Report.
Annual Performance Evaluation by Board
Pursuant to the provisions of the Companies Act, 2013 and regulation as applicable of
SEBI (LO&DR) Regulations 2016, the Board has carried out an Annual Performance
Evaluation of its own performance, the Directors individually as well as the evaluation of
the working of the Committees.
Risk Management
The Board of Directors of your Company has adopted a policy on Risk Management of the
Company. The broad terms of same provided at website of the Company.
Vigil Mechanism
Your Company has an effective Vigil Mechanism system which is embedded in its Code of
Conduct. The Code of Conduct of your Company serves as a guide for daily business
interactions, reflecting your Companys standard for appropriate behavior and living
Corporate Values. The Code of Conduct applies to all GFL People, including Directors,
Officers, and all employees of the Company. Even your Company vendors and suppliers are
also subject to these requirements as adherence to the Code is a prerequisite for
conducting business with your Company.
Nomination & Remuneration Policy
The Board of Directors of your Company has, on recommendation of the Nomination &
Remuneration Committee, framed and adopted a policy for selection and appointment of
Directors, Senior Management and their remuneration. The contents of the policy are stated
in the Corporate Governance Report.
AUDITORS
STATUTORY AUDITOR
M/s R.K. Chadha & Co., Chartered Accountants, (Firm Registration No: 003513N), who
were appointed as the Auditors of the company for a term of five years subject to
ratification at Annual General Meeting every year has given a resignation dated 17th July,
2020. And in order to fill the casual vacancy the based on recommendation of Audit
Committee Board has appointed M/s Ashwani & Associates, Chartered Accountants,
Ludhiana (Registration No. 000497N).
Based on the eligibility under Section 141 of the Companies Act, 2013, as recommended
by Audit Committee member Appointed M/s Ashwani & Associates, Chartered Accountants,
Ludhiana (Registration No. 000497N) as the Statutory Auditors of the company for five to
hold the office from the conclusion of 47th Annual General Meeting till the
conclusion of 52nd Annual General Meeting at such remuneration as may be fixed
by the Board of Directors of the company in consultation with M/s Ashwani &
Associates, Chartered Accountants, Ludhiana (Registration No. 000497N)
Reply to remarks in Statutory Audit Report
Emphasis of Matter
As mentioned in Emphasis of Matter in para a which are Self-explanatory, however in
context with related parties transaction, company was constrained to do such transactions,
because due to weak financial position in previous years the suppliers and buyers not
shown interest to deal with the company directly, but company has taken all approvals in
this regards as per applicable laws.
Basis for Qualified Opinion
i. Because of huge losses suffered during last two financial years the organization
structure is also forced to become unshaped, but Management is looking for a competent
person to appoint him as Internal auditor, even the candidates interviewed for such
offices have not shown their interest to join the company due to weak financial position
of the company, after offering good remunerations.
ii. Provision in respect of impairment /loss on assets is not require as management has
view that due to slump & cut throat competition in iron industries / market is
temporally and hope will recover soon.
iii. Management is in process to confirm/reconcile balances with the concerned parties.
SECRETARIAL AUDITOR
Pursuant to the provisions of section 204 of the Companies Act, 2013 and Rules made
thereunder the Company has appointed, Divyam Parbhakar & Associates, (membership
number: 52667) Company Secretaries in Practice, to undertake the secretarial audit of the
Company. Secretarial Audit Report for the year 2020-21 given by Divyam Parbhakar &
Associates in the prescribed form MR-3 is annexed to this Report. The Secretarial Audit
Report for the year under review given some observations.
Para wise replay of said observations are given hereunder
1. Because of huge losses suffered during last two financial years the organization
structure is also forced to become unshaped, but Management is looking for a competent
person to appoint him as Internal auditor and Company Secretary, even the candidates
interviewed for such offices have not shown their interest to join the company due to weak
financial position of the company, even after offering good remunerations.
2. The Company is in process of updating the same.
3. The Company has not received information from vendors/service providers regarding
their status under Micro, small and Medium Enterprises Development Act,2006 and hence
disclosure relating to amounts unpaid as at the year end together with interest paid/
payable under this act has not been given.
4. Company has taken all approvals of members of the company/Audit Committee/board of
Directors in respect of related parties transaction made during the year.
5. The company is in process of updating the same.
6. Self - Explanatory
COST AUDITOR
Pursuant to section 148 of the Companies Act, 2013 and Rules made thereunder, Board of
Directors had, on the recommendation of the Audit Committee, appointed M/s Meenu &
Associates, (firm registration number: FRN: 100729) Cost Accountants, to audit the cost
accounts of the Company for the financial year 2020-21 at a remuneration of 20000.00 plus
service tax, out-of pocket and travel and living expenses, subject to ratification by the
shareholders at annual general meeting. Accordingly, a resolution seeking members
ratification for the remuneration payable to cost auditor is included in the Notice
convening the annual general meeting.
INDUSTRIAL RELATIONS
The Industrial relations remained cordial through out the year and have resulted in
sustained growth of the company.
ACKNOWLEDGEMENT
The Directors wish to extend their sincere thanks to the Punjab & Sind Bank, Punjab
State Power Corporation Limited, Container Corporation of India, other State & Central
Government Agencies, Suppliers and Customers for their continued support and cooperation.
The Directors also wish to place on record their deep appreciation for the services
rendered by the workers & staff at all levels.
|
For and on behalf of the Board |
|
-SD- |
|
(DEVINDER GARG) |
| Place: LUDHIANA. |
CHAIRMAN |
| Date: 08/09/2021 |
DIN :01665466 |
+91-9892691696
