IVRCL Ltd Directors Report.
1. INITIATION OF CORPORATE INSOLVENCY RESOLUTION PROCESS (CIRP)
Pursuant to the orders of Honble National Company Law Tribunal (NCLT), Hyderabad, Corporate Insolvency Resolution Process (CIRP) has been initiated in respect of IVRCL Limited ("the Company") under the provisions of the Insolvency and Bankruptcy Code, 2016 ("the Code") with effect from 23rd February, 2018.
In this connection, Mr. Sutanu Sinha 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 officers and managers of the company shall report to the resolution professional and provide access to such documents and records of the company as may be required by the Resolution Professional.
(d) the financial institutions 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.
NCLT by its order dated 26th July 2019 read with corrigendum order dated 31st July 2019 ordered for liquidation of the Company as a going concern and appointed the existing Resolution Professional, Mr Sutanu Sinha as Liquidator of the Company.
2. FINANCIAL HIGHLIGHTS
The Liquidator presents the 32nd Annual Report of IVRCL Limited ("Company") with Audited Financial Statements of the Company for the Financial Year 201819.
|Gross Profit before Interest, Depreciation, Exceptional Item & Tax||(1031.14)||(4,414.13)|
|Provision for Tax / Reversal of Tax in Current Year||(14.88)||40.89|
|(Loss)/Profit after Tax||(15,452.70)||(19,912.13)|
|Balance Brought Forward from the previous year||(41,642.07)||(21,729.94)|
|Balance carried to Balance Sheet||(57,094.77)||(41,642.07)|
|Reserves & Surplus||(33,059.57)||(17,606.46)|
Since your company is under Corporate Insolvency Resolution Process (CIRP) and incurring losses the liquidator expresses his inability to recommend any dividend for the Financial year 2018-19.
4. PERFORMANCE REVIEW
Your company achieved a gross turnover of 7292.34 million for the financial year 2018-19 as against 14,134.67 million in the previous financial year. Profit/ (Loss) after Tax (PAT) stood at Rs (15452.70) million as compared to Rs (19,912.13) million for the previous financial year.
During the year under review, there is no change in nature of business of the company and no material changes and commitments have occurred after the close of the year till the date of this Report, which affect the financial position of the Company.
5. BUSINESS REVIEW
The Management Discussion and Analysis Section of the Annual Report present a detailed business review of the company.
6. CHANGE IN SHARE CAPITAL
There is no change in the share capital of the Company during the year under review. The trading in the shares has been suspended by NSE & BSE.
7. SUBSIDIARY COMPANIES
The Company has 26 direct subsidiaries and 3 associate companies within the meaning of Section 2(87) and 2(6) of the Companies Act, 2013 respectively (hereinafter referred as "Act). There has been no material change in nature of business of the subsidiaries. Pursuant to Proviso to Section 129(3) of the Act, a statement containing the salient features, brief details of performance and financials of the Subsidiaries, Associates and Joint Venture Companies, for the financial year ended March 31, 2019 is attached to Financial Statements of the Company.
Pursuant to Section 136 of the Act, the financial statements including consolidated financial statements, other relevant documents and audited accounts of subsidiaries of the company are available at website of the Company www.ivrcl.com under Financials Section and will be available for inspection by any member at the Registered office of the Company on all working days during business hours.
The Board has adopted a policy for determining material subsidiaries of the Company, as per SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015. The said policy is hosted at the Companys website at the link http://ivrcl.com/downloads/ PolicyonMaterialSubsidiairies_New.pdf.
8. CONSOLIDATED FINANCIAL STATEMENTS
In terms of Section 129(3) of the Companies Act, 2013 and Regulation 34 of the SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015, Consolidated Financial Statements of the Company prepared in accordance with Accounting Standards issued by Institute of Chartered Accountants of India, are attached and forms part of the Annual Report.
9. EMPLOYEE STOCK OPTION SCHEME
The shareholders of the Company at the meeting held on September 26, 2013 approved to grant 1,00,00,000 options to employees of the Company, on such terms and conditions as specified by the Board of Directors of the Company. The Company is yet to grant the said options.
10. FIXED DEPOSITS
During year under review, your company has neither invited nor accepted any Fixed Deposits from the public.
11. CORPORATE GOVERNANCE
Detailed Report on Corporate Governance as stipulated under Schedule V of SEBI LODR Regulations is provided under separate section and forms part of this Report.
The requisite certificate from Practicing Company Secretaries, confirming the compliance of the conditions stipulated under SEBI LODR Regulations is attached to the Report on Corporate Governance.
12. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As stipulated under SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015 the Report
on Management Discussion and Analysis is annexed to this report and forms part of the Annual Report.
13. POLICY ON CODE OF CONDUCT
The Company laid down a "Code of Conduct" for all Board members and Senior Management Personnel.
Pursuant to SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015, the Declaration by the Liquidator affirming the compliance with the Code of Conduct is attached to the Report on Corporate Governance.
14. DIRECTORS AND KEY MANAGERIAL PERSONNEL.
All the Independent Directors of the Company have given declarations to the Company that they meet the criteria of independence as specified under Section 149(6) of the Act and Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015. During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transaction with the Company.
The Policy on appointment and remuneration for Directors, Key Managerial Personnel and other employees, as specified under Section 178(3) of the Act and SEBI LODR Regulations, has been disclosed in the Corporate Governance Report.
Mr Rajeev Mehra has resigned as nominee director wef 17th April 2019. Mr Murahari Reddy V, Independent Director also has resigned wef 16th April 2019.
Mr R Balarami Reddy superannuated on 30th June 2019 as CFO and Mr Raghurami Reddy Lella has been appointed as CFO in his place.
Mr P R Tripathi and Mr. TRC Bose have completed their term of 5 years as independent directors and are not been re-appointed in the ensuing General Meeting of the Company.
The term of Mr. E Sudhir Reddy as Chairman & Managing Director ended as on 30th September 2019 and the same is not renewed.
It is proposed to place on record the valuable services of the above directors and CFO during their respective terms of office.
Except as stated above, there has been no changes in Directors and Key Managerial Personnel of the Company.
15. MEETINGS OF THE BOARD
No meetings were conducted by the Board of Directors since the powers of the Board of Directors have been suspended w.e.f. 23.02.2018 pursuant to the orders dated 23.02.2018 of Honble National Company Law Tribunal (NCLT).
16. BOARD COMMITTEES
The Board had constituted various committees viz. Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Share Allotment committee, Executive Committee and Corporate Social Responsibility Committee etc., to enable better management of the affairs of the Company, with terms of reference in line with provisions of Companies Act, 2013 and SEBI LODR Regulations.
Since the powers of the Board of Directors have been suspended w.e.f. 23.02.2018 pursuant to the orders dated 23.02.2018 of Honble National Company Law Tribunal (NCLT), the powers of the various committees have also been suspended w.e.f. the same date and no meetings have since been conducted.
17. BOARD EVALUATION
Since the powers of the Board of Directors have been suspended w.e.f. 23.02.2018 pursuant to the orders of Honble National Company Law Tribunal (NCLT) dated 23.02.2018, evaluation of Board has not taken place.
18. AUDITORS AND THEIR REPORTS Statutory Auditors
M/s. Chaturvedi & Co., Chartered Accountants (Firm Registration No. 302137E) were appointed as Statutory Auditors of the company at the Annual General Meeting held on 29th day of September, 2017, for a period of 5 years [i.e. from the F.Y 2017-18 to F.Y 2021-22].
During the year under review, no fraud has been reported by auditors under sub-section(12) of Section 143 of the Act.
The Comments for the qualifications in the Auditors Report on the financial statements of the Company for financial year 2018-19 are as provided in the notes to accounts which forms part of this report.
As per the provisions of Section 204 of the Act, the Company appointed M/s. D. Hanumanta Raju & Co, Practicing Company Secretaries as Secretarial Auditor for the purpose of auditing the Secretarial activities of the Company for the financial year 2018-19.
The Secretarial audit report issued by the said auditor has been annexed to this report as Annexure A.
As per the provisions of Section 148 of the Act read with Rules made thereunder, the company appointed M/s. Sagar & Associates, Practicing Cost Accountants as Cost Auditor for the purpose of auditing the Cost accounting records maintained by the company for the financial year 2018-19.
19. PARTICULARS OF LOANS, INVESTMENTS AND GUARANTEES
The particulars of loans, investments made and guarantees issued under Section 186 of the Act, during year under review, are provided in notes to financial statements, which forms part of this report.
20. RELATED PARTY TRANSACTIONS
As per the requirement of provisions of the Act and SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015, the Company has formulated a policy on Related Party Transactions (RPT) to ensure the transparency in transactions between the company and related parties. The said RPT Policy is also available at Companys website at the link http://ivrcl.com/ downloads/Related PartyTransactionPolicy.pdf. All Related Party Transactions entered by the Company during the year under review were in ordinary course of business and on Arms length basis. There were no materially significant related party transactions entered by the company during year under review.
Since all the related party transactions entered into by the Company, were in ordinary course of business and were on Arms length basis, disclosure in form AOC- 2 as required under Section 134(3)(h) of the Act is not applicable.
The details of related party transactions pursuant to Accounting Standards are provided in notes to financial statements.
21. INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls commensurate with the size, scale and complexity of operations. The details relating to internal financial controls and their adequacy are included in the Management Discussion and Analysis Report, which forms part of this Report.
22. RISK MANAGEMENT
The company has established Risk Management process to manage risks with the objective of maximizing shareholders value. The details of various risks that are being faced by the Company are provided in Management Discussion and analysis Report, which forms part of this Report.
23. WHISTLE BLOWER POLICY
The Board has adopted a Whistle Blower Policy as stipulated under Section 177(9) of the Act and SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015 to report the genuine concerns of the employees and Directors.
The Whistle Blower Policy adopted by the Company is hosted on Companys website at the link http://ivrcl. com/downloads/WhistleBlowerPolicy.pdf
24. SIGNIFICANT AND MATERIAL ORDERS
There are no significant and material orders passed by the regulators or tribunals impacting the going concern status and Companys operations in future.
25. CASES FILED UNDER SEXUAL HARASSMENT ACT
No cases were filed pursuant to the Sexual Harassment of Women at work Place (Prevention, Prohibition and Redressal) Act, 2013, during the year under review.
26. PARTICULARS OF EMPLOYEES
The statement containing the information pertaining to employees as required under Section 197(12) of the Act read with Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, is annexed to this report. Having regard to provisions of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to the members of the company. The said information is available for inspection at the registered office of the Company during working hours and any member interested in obtaining the said information may write to Company Secretary and the same will be furnished on request.
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this Report.
27. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo:
Conservation of Energy is an ongoing process in the Companys activities. The core activity of the company is civil construction which is not an energy intensive activity.
There is no information to be furnished regarding Technology Absorption as your Company has not undertaken any research and development activity in any manufacturing activity nor any specific technology is obtained from any external sources which needs to be absorbed or adapted.
Innovation is a culture in the Company to achieve cost efficiency in the construction activity to be more and more competitive in the prevailing environment and the effect of the same cannot be quantified.
The particulars of expenditure and earnings in Foreign currency are provided in notes to financial statements.
28. CORPORATE SOCIAL RESPONSIBILITY
As per the provisions of Section 135 of the Act, the Company has constituted the CSR committee to formulate, implement and monitor the CSR Policy of the Company. However as the Company does not have average net profits for the three immediately preceding financial years, the Company was not required to make any expenditure on CSR activities during financial year 2018-19 as specified under Section 135(5) of the Act.
Hence the information on CSR activities as required under Section 135(5) of the Act and Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014, has not been provided by the Company, for the financial year 2018-19.
29. INDUSTRIAL RELATIONS
The Company enjoyed cordial relations with the employees during the year under review and the
Management appreciates the employees of all cadres for their dedicated services to the Company.
30. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, the Liquidator hereby state that:
(a) in preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.
(b) the Liquidator 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 Liquidator had 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;
(d) the Liquidator had prepared the annual accounts on a going concern basis; and
e) the Liquidator , in the case of a listed company, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
(f) the Liquidator had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
31. CORPORATE INSOLVENCY RESOLUTION PROCESS (CIRP)
The Company is under CIRP and information pertaining to the process is available at the Company website www.ivrclinfra.com.
32. ACKNOWLEDGEMENTS AND APPRECIATIONS
The Liquidator wish to express appreciation of the support and co-operation of the Committee of Creditors, various departments of Central and the State Governments, Bankers, Financial Institutions, Suppliers, Employees, Associates and Subcontractors.
Liquidator for IVRCL Limited
IP Registration No. IBBI/IPA-003/IP-N00020/2017-18/10167
Date: 4th September 2019
Statement of particulars as per Rule 5 of Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014.
(i) The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year 2018-19:
|S. No.||Name of the Director||Ratio of remuneration of Directors to median remuneration of the employees|
|1||Mr. E Sudhir Reddy||Not Applicable|
|2||Mr. P. R. Tripathi||Not Applicable|
|3||Mr. T. Ramesh Chandra Bose||Not Applicable|
|4||Mr. V. Murahari Reddy||Not Applicable|
|5||Ms. M. Hima Bindhu||Not Applicable|
|6||Mr. Rajeev N Mehra||Not Applicable|
(ii) The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager in the financial year.
|S. No.||Name of the Directors, CEO, CFO, CS||% increase in remuneration in the financial year|
|1||Mr.E Sudhir Reddy, Chairman & Managing Director||0|
|2||Mr.R.Balarami Reddy, Chief Financial Officer||0|
|3||Mr.P.R.Tripathi, Independent Director||0|
|4||Mr.T.Ramesh Chandra Bose,Independent Director||0|
|5||Mr.V,Murahari Reddy, Independent Director||0|
|6||Ms.M.Hima Bindhu, Independent Director||0|
|7||Mr.Rajeev N Mehra, Nominee Director||0|
|8||Mr.B.Subrahmanyam, Company Secretary||0|
(iii) The percentage increase in the median remuneration of the employees in the financial year : NIL
(iv) The number of permanent employees on the rolls of Company as on 31st March 2019 : 913 employees
(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: NIL
(vi) The Remuneration paid to Key Managerial Personnel is as per the Remuneration Policy of the Company.