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Your Directors are pleased to present the Twenty Seventh (27th) Directors Report of the Company together with the Audited Financial Statements for the Financial Year ended March 31, 2019.
|Particular||For the Year ended 31st March, 2019||For the Year ended 31st March, 2018|
|1 Total Revenue (Net)||2570.49||1318.09|
|2 Profit before Depreciation & Amortization Expenses, Finance Cost and Tax||(92.94)||(190.63)|
|3 Less: Depreciation and Amortization Expenses||7.96||8.75|
|4 Profit before Tax||(126.59)||(221.59)|
|5 Exceptional Items||1.65||18.49|
|Profit before Extraordinary item and tax||(128.23)||(240.44)|
|6 Extraordinary Items||0||103.09|
|Less: Tax Expense||(37.98)||(132.03)|
|6 Profit after Tax||(90.25)||(5.03)|
|7 Other Comprehensive Income||-||-|
|8 Balance of Profit as per last Balance Sheet||(90.25)||(5.03)|
|9 Balance Available for Appropriation||(12,84,28,438)||(11,94,02,712)|
|10 Bonus Shares issued||-||-|
|11 Dividend paid||-||-|
|12 Transfer to General Reserve||-||-|
|13 Balance of Profit carried to Balance Sheet||(12,84,28,438)||(11,94,02,712)|
2. COMPANYS PERFORMANCE AND REVIEW
The total revenue (net) of the Company for the year ended 31st March 2019, increased by 95.01% and stood at Rs 2570.49 Lakhs as against Rs 1318.09 in the previous year. During the year the Company has incurred losses of Rs 90.26 lakhs as against loss of Rs 5.03 lakhs in the previous year.
3. STATE OF THE COMPANYS AFFAIR AND BUSINESS REVIEW
The details of the Companys affairs including its operations are more specifically given in the Management Discussion and Analysis Report, which is given in this Annual Report.
4. SHARE CAPITAL:
There was no change in the Share Capital of the Company during the year 2018-19. The paid- up share capital of the Company as on March 31, 2019 is Rs 4,17,20,000 (Rupees Four Crore Seventeen Lakh Twenty Thousand Only) divided into 1,04,30,000 Equity Shares of face value of Rs. 4/- (Rupee Four) each. The Company neither issued any shares nor granted any Stock Options during the year.
5. LISTING OF SHARES:
The Equity shares of the Company are listed on National Stock Exchange of India Limited (NSE) and BSE Limited (BSE). The Company has paid the requisite listing fees to the respective Stock Exchanges for the financial year 2018-19.
6. DIVIDEND AND RESERVE:
In view of accumulated losses, your Directors do not recommend any dividend for the Financial Year 2018-2019. The details of the reserves and surplus are provided in Note No. 12 of the notes to the Audited Financial Statements.
7. CHANGE IN THE NATURE OF BUSINESS:
During the year under review there has been no change in the nature of business.
8. PUBLIC DEPOSITS:
During the year under review, the Company has not accepted any deposits within the meaning of Sections 73 and 76 of the Companies Act, 2013 (the Act) read with Companies (Acceptance of Deposits) Rules, 2014.
However, the Company has deemed deposit as per the provisions of Section 73 of the Companies Act, 2013
9. HOLDING, SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:
As on March 31, 2019 the Company does not have any Subsidiary, Associate or Joint Venture Company. Hence, preparation of Consolidated financial statements and statement containing salient features of the Subsidiary/ Associate or Joint Ventures companies in Form AOC-2 as per the provisions of Section 129 of the Companies Act, 2013 is not applicable to the Company.
10. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Pursuant to the provisions of Section 152 of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014 and the Articles of Association of the Company, Mr. Dhirajlal Jangla, Chairman & Whole time Director of the Company, is entitled to retire by rotation at the ensuing Annual General Meeting (AGM) and being eligible has offered himself for re-appointment.
Mr. Bidhan Gujarati and Mr. Bhanwarlal Sanghvi Independent Directors of the Company has resigned as Directors from the Board of Directors w.e.f., May 29, 2019 and on the recommendation of Nomination and Remuneration Committee, the Board has appointed Mr. Ketan Shah and Mr. taroon Vaswani as the Independent Directors subject to the approval of members for a period of 5 years w.e.f., May 29, 2019 to May 23, 2024.
Pursuant to Regulation 36(3) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (hereinafter referred to as Listing Regulations) and Secretarial Standards on General Meeting (SS-2) issued by the Institute of Company Secretaries of India (ICSI), brief resume of the Director proposed to be re-appointed in the ensuing Annual General Meeting is annexed in Notice of 27th Annual General Meeting of the Company.
Your Board recommends the appointment of the Mr. Dhirajlal Jangla as Director of the company.
Ms. Piyali Das, Company Secretary and Compliance officer of the Company has resigned from the said position w.e.f. August 31, 2018. The Company on record places its appreciation for the guidance and assistance in smooth functioning and compliances of the Company during her tenure.
Consequent to resignation of Ms. Das and based on the recommendation of the Nomination & Remuneration Committee, Ms. Parul Gupta was appointed as the Company Secretary and Compliance officer of the Company w.e.f. November 13, 2018, by the Board of Directors.
All the Independent Directors of your company have given declarations that they meet the criteria of Independence laid down under Section 149(6) of the Act and the Listing Regulations.
Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company as on March 31, 2019 are: Mr. Dhirajlal Jangla- Chairman & Whole time Director, Mr. Kiran Jangla-Managing Director, Mrs. Minal Jangla - Director and Chief Executive Officer, Ms. Priti Panchal- Chief Executive Officer and Ms. Parul Gupta-. The Company has complied with the requirements of having Key Managerial Personnel as per the provisions of Section 203 of the Act.
11. ANNUAL EVALUATION OF PERFORMANCE BY THE BOARD:
As per the provisions of Section 134 and Schedule IV of the Companies Act, 2013 the Board of Directors need to evaluate its own performance, the performance of all the individual Directors of the Company and the performance of committees of the Board.
The Board has carried out evaluation of its own performance, the directors individually as well as the working of its Audit Committee, Nomination & Remuneration Committee and Stakeholders Relationship Committee of the Company. The Board has devised questionnaire to evaluate the performances of each of Executive, Non-Executive and Independent Directors. Such questions are prepared considering the business of the Company and the expectations that the Board have from each of the Directors. The evaluation framework for assessing the performance of Directors comprises of the following key areas:
i. Attendance of Board Meetings and Board Committee Meetings;
ii. Quality of contribution to Board deliberations;
iii. Strategic perspectives or inputs regarding future growth of Company and its performance;
iv. Providing perspectives and feedback going beyond information provided by the management.
v. Ability to contribute to and monitor our corporate governance practices
The Independent Directors at their meeting held on 7th March 2019, evaluated performance of the Chairperson, non-independent directors of the Company and the performance of the Board as a whole.
The Directors expressed their satisfaction to the outcome of the aforesaid evaluations and consented for continuation of present term of appointment of each of the Independent Directors.
12. DIRECTORS RESPONSIBILITY STATEMENT:
Your Directors, to the best of their knowledge and belief and according to the information and explanations obtained by them and as required under Section 134(3)(c) of the Companies Act, 2013 hereby state that:
1. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
2. your Directors 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 financial year March 31st, 2019 and of the loss of the company for that period;
3. your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
4. your Directors have prepared the annual accounts on a going concern basis;
5. your Directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and
6. your Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
13. MEETINGS OF THE BOARD OF DIRECTORS:
The Board meets at regular intervals to discuss and decide on Companys business policy and strategies apart from the other business of the Board.
During the year under review, the Board met 8 (Eight) times. The details of the meetings of Board of Directors and the attendance of the Directors at the meetings are provided in the Report on Corporate Governance, which forms part of this report. The intervening gap between the two consecutive meetings was within the period prescribed under the Companies Act, 2013 and Secretarial Standard on Board Meetings (SS-1) issued by ICSI.
14. COMMITTEES OF THE BOARD:
The Board has -constituted its Committees in accordance with the provisions of the Companies Act, 2013 and as per the Listing Regulations. There are currently four Committees of the Board, which are stated as follows:
a. Audit Committee;
b. Stakeholders Relationship Committee;
c. Nomination and Remuneration Committee;
d. Risk Management Committee.
Details of all the Committees along with their charters, composition and meetings held during the year 2018-19, are provided in the Report on Corporate Governance which forms part of this Annual Report.
15. EXTRACT OF THE ANNUAL RETURN:
An extract of the Annual Return pursuant to the provisions of Section 92 of the Companies Act, 2013 in Form MGT 9 is appended to this Report as Annexure I.
16. STATUTORY AUDITORS:
In terms of Section 139 of the Act, Members of the Company at the 26th AGM held on September 27, 2018 had appointed M/s. Vijay V. Dedhia & Co, Chartered Accountants (Firm Registration No. 111439W) as the Statutory Auditors for a term of 5 years commencing from the conclusion of 26th AGM till the conclusion of the 31st AGM to be held in year 2023.
However, pursuant to the amendments made to Section 139 of the Act, by the Companies (Amendment) Act, 2017, effective from May 7, 2018, the requirement of seeking ratification of the members for appointment of Statutory Auditors has been withdrawn. In view of the same, the ratification of members for continuance of M/s Vijay V. Dedhia & Co, Chartered Accountants, as the Statutory Auditors of the Company, is not being sought. The Statutory Auditors have given a confirmation to the effect that they are eligible to continue with their appointment and that they have not been disqualified in any manner from continuing as the Statutory Auditors. The Auditors Report does not contain any qualification, reservation or adverse remark or disclaimer by M/s. Vijay V. Dedhia & Co, Chartered Accountants.
17. SECRETARIAL AUDITORS:
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration Managerial Personnel) Rules, 2014, the company has appointed M/s. Shivlal Maurya & Co., Company Secretaries, Mumbai as Secretarial Auditor of the Company for the Financial Year ended March 31, 2019.
The Report of the Secretarial Auditor for F.Y. 2018-19 is appended to this Report as (Annexure II) which forms part of this Annual Report.
With regard to observations made by the Secretarial Auditors in their Report, your Directors would like to state as under:
1. The Company has not complied with the provisions of Section 133 of the Companies Act, 2013 pertaining to Indian Accounting Standard (IAS)36
The Company was not aware about the applicability of Section 133 of the Companies Act, 2013 to the Company. When it came to the knowledge of the Company that the Financial Statements of Listed Companies has to be prepared in accordance with the provisions of Section 133 of the Companies Act, 2013 pertaining to Indian Accounting Standard (IAS)36 the Company has prepared the accounts of Financial Year ended March 31, 2019 in Indian Accounting Standard format.
2. Mr. Bidhan Gujarati, Independent Director of the Company does not Comply with the requirement of Independent Director in terms of provisions of Section 149(6)(b)(ii)
The non-compliance in regard to the para above is inadvertent and when it came to the knowledge of the Company about the non-compliance with the requirement of Independent Director in terms of provisions of Section 149(6)(b)(ii), Mr. Bidhan Gujarati, resigned with the immediate effect on May 29, 2019 and in his place Company appointed a new Independent Director.
3. outstanding deposits as on March 31, 2018 as per Section 73 of the Act, the company was required to file Form DPT-3 latest by June 30, 2018, the Company till date has not filed the same;
The Compliance with respect to filing of form DPT-3 is unintentional and missed out inadvertently.
4. Delay in filing of the few Compliances to BSE and NSE as per listing agreement and SEBI(LODR) 2015 and Non -Compliance with the provision of the Regulation 40 (9) for the half year ended March 31, 2018
The non-compliance in regard to para above for delay in filing of few Compliances is unintentional and the compliance with the provision of the Regulation 40 (9) for the half year ended March 31, 2018 was missed out inadvertently.
5. 100% of the promoters holding is not in dematerialized form
The Company was under suspension since 2002 and 2005 on BSE and NSE respectively and due to suspension ISIN of the Company was not active on NSDL and CDSL. Hence, the promoters were unable to demat their Shares. Now the suspension has been revoked on July 22, 2019, the promoters are in process to dematerialize their Shares.
18. INTERNAL AUDIT:
Pursuant to the provisions of Section 138 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, M/s. Thacker Butala Desai, Chartered Accountants, Mumbai, were appointed as Internal Auditors of the company for the Financial Year 2018-19.
Based on the report of internal audit, the management takes corrective action in respective areas observed and thereby strengthen the controls.
19. INTERNAL FINANCIAL CONTROL:
Your Company has an adequate Internal Control System commensurate with the size, scale and complexity of its operations and well-documented procedures for various processes which are periodically reviewed for changes warranted due to business needs.
The Audit Committee evaluates the efficiency and adequacy of financial control system prevailing in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and strives to maintain the Standards in Internal Financial Controls. This system of internal control facilitates effective compliance of Section 138 of the Act and the Listing Regulations.
During the year under review, no reportable material weakness in the operation was observed. Regular audit and review processes ensure that such systems are reinforced on an ongoing basis.
20. VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The Vigil Mechanism/Whistle Blower Policy has been put in place in accordance with Section 177 of the Companies Act, 2013 for the Directors and Employees to report their genuine concerns about unethical behavior, actual or suspected fraud or violation of the Companys Code of Conduct. The mechanism provides for adequate safeguards against the victimization of Director(s) and Employee(s) who avail of the mechanism. Directors and Employees may make protected disclosure under the policy to the Compliance Committee constituted by the Company to administer the internal code of business conduct. In exceptional cases, Directors and Employees have direct access to the Chairman of the Audit Committee. Further no personnel have been denied access to the Compliance Committee/ Chairman of the Audit Committee, as the case may be.
No complaints were received under whistle blower mechanism during the year under review.
21. REMUNERATION POLICY:
Pursuant to the provisions of Section 178 of the Companies Act, 2013 and on recommendation of the Nomination and Remuneration Committee, the Board framed a Policy relating to the selection and appointment of Directors, Key Managerial Personnel, Senior Management and their remuneration. The Policy includes criteria for determining qualifications, positive attributes and independence of a director and other matters. The functions of the Nomination and Remuneration Committee are disclosed in the Corporate Governance Report, which forms part of the Annual Report.
22. PARTICULARS OF EMPLOYEES:
Disclosure with respect to the ratio of remuneration of each Directors to the median employees remuneration as required under Section 197 of the Companies Act, 2013 read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been appended as Annexure III to this Report.
During the year under review, no employee was in receipt of remuneration exceeding the limits as prescribed under provisions of Section 197 of the Companies Act, 2013 read with Rule 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
The information required pursuant to Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided on request. In terms of Section 136 of the Act, the reports and accounts are being sent to the shareholders and others entitled thereto, excluding the said information which will be made available for inspection by the shareholders at the Registered Office of the company during business hours on any working days of the Company up to the date of the ensuing Annual General Meeting. If any shareholder is interested in inspecting the same, such shareholders may write to the Company Secretary in advance.
23. BUSINESS RISK MANAGEMENT:
The Company has formulated and implemented a Risk Management policy in accordance with the provisions of the Act in order to address the business risks associated with the Company. The Company periodically reviews the risk management practices and actions deployed by the management with respect to the identification, impact assessment, monitoring, mitigation and reporting of key risks while trying to achieve its business objectives.
24. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1) OF THE COMPANIES ACT, 2013:
All Related Party Transactions entered during the year under review were on arms length basis and in ordinary course of the business and none of them were material. The same are reported in the Notes no. 29 to the Financial Statements.
No material related party transactions were entered during the year under review by your Company. Hence, accordingly disclosure as required under Section 134(3) of the Companies Act, 2013 in Form AOC-2 is not applicable to the company.
All the RPTs were placed before the Audit Committee for its approval and the Committee had granted its prior approval/omnibus approvals, as the case may be, for all related party transactions considering their nature.
25. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013:
During the year under review, the Company has not made any investments, advanced any loans or provided any guarantee falling under Section 186 of the Companies Act, 2013 (the Act).
26. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE
There were two significant and material orders passed by the BSE Limited and National Stock Exchange Limited that impact the going concern and Companys operation in future:
1. Your Company was declared a Sick Industrial Company in terms of section 3(1)(o) of Sick Industrial Companies (Special Provisions) Act, 1985 vide order dated September 11, 1998. On September 07, 2015 BIFR passed an order for revival of the Company and pursuant to that order, your Company was required to de-rate its existing Face Value of the Shares by 60% to improve the networth and wipe out the accumulated loss. Accordingly, your Company made an application to BSE Limited and National Stock Exchange Limited for reduction of Face value of the Shares of the Company from Rs. 10/- per share to Rs.4/- per share.
On May 20, 2019 BSE Limited published a notice granting approval for listing of Shares of the Company at the Face Value of Rs.4/- per share with effect from May 22, 2019. National Stock Exchange Limited provided the listing approval along with the trading approval on July 12, 2019.
2. Your Company was suspended from Trading on BSE Limited and National Stock Exchange Limited since 2002 and 2005 respectively due to non-compliance in respect of the erstwhile Listing Agreement and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. To revoke the suspension, the Company applied to both the Stock Exchanges and submitted all the documents required in this respect and paid the outstanding listing fees.
With the continuous and tireless efforts of the management of the Company, on July 12, 2019 both the Exchange issued a circular simultaneously for revocation of suspension of trading of Equity Shares of your Company w.e.f., July 22, 2019 and National Stock Exchange Limited granted the approval for Revocation of suspension of trading in equity shares including recommencement of trading post capital reduction.
Other than the above no significant or material order has been passed by any regulator or court or tribunal, which impacts the going concern status of the Company or will have bearing on companys operations in future.
27. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There has been no material change/commitment affecting the financial position of the Company during the period from the end of the financial year on 31st March, 2019 to the date of this Report. There has been no change in the nature of business of the Company.
28. FUTURE PROSPECTS
In order to rebuild the net worth and to strengthen the Financial Position of the Company, BIFR vide its order dated September 07, 2015 proposed to capitalize the funds brought in by the promoters of the Company in the form of unsecured loan to the extent of Rs. 800 Lakh for the revival of the Company.
In pursuance to said order the Board of Directors at their meeting held on August 12, 2019 issued and allotted 2,00,00,000(Two Crore) fresh Equity Shares at the de-rated value i.e., Rs. 4/- per share at par aggregating to Rs. 8,00,00,000 to the promoters, which will further go a long way to strengthen the net worth of the Company.
29. PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information pertaining to conservation of energy and technology absorption as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure - IV to this report.
The total foreign Exchange inflow was Rs 2,19,62,703 and Foreign Exchange Outflows was NIL during the year under review.
30. REPORT ON CORPORATE GOVERNANCE
Pursuant to the provisions of Regulation 34 read with Schedule V of the Listing Regulation, the following have been made a part of the Annual Report and are appended to this report:
a. Management Discussion and Analysis;
b. Report on Corporate Governance;
c. Declaration on Compliance with Code of Conduct;
d. Auditors Certificate regarding compliance with conditions of Corporate Governance.
31. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE UNDER (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has zero tolerance towards sexual harassment at workplace and has adopted a policy to abide by letter and spirit requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder. During the year, Company has not received any complaint of sexual harassment.
32. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The provisions relating to Corporate Social Responsibility under Section 135 of the Companies Act, 2013 and rules made thereunder are not applicable to the Company. Therefore, the Company has not developed and implemented any policy on Corporate Social Responsibility initiatives.
33. COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has complied with the applicable Secretarial Standards during the year.
Your Directors gratefully acknowledge the support and cooperation received from various departments of the Central and State governments, members, business associates, analysts, banks, financial institutions, customers, distributors and suppliers, Business Partners and other stakeholders of the Company and also convey a sense of high appreciation to all the employees of the Company for their hard work, dedication, continued commitment and contributions.
|For and on behalf of the Board of Directors|
|For Grand Foundry Limited|
|Place: Mumbai||Chairman and Whole-Time Director|
|Date: August 12, 2019||DIN:02096717|