Tarini International Ltd Directors Report.
TO THE MEMBERS OF TARINI INTERNATIONAL LIMITED
Your Directors are pleased to present the Nineteenth Annual Report on the working of the Company for the period from 1st April, 2017 to 31st March, 2018 with audited statements of accounts
The Companys Financial Performances during the year 2017-18 as compared to the previous year 2016-17 is summarized below:-
STANDALONE for the year ended
CONSOLIDATED for the year ended
|March 31, 2018||March 31, 2017||March 31, 2018||March 31, 2017|
|Total Profit before tax||61,96,964||54,68,917||(1,94,775)||54,04,159|
|Total Profit after tax||48,51,290||39,46,983||(15,40,448)||38,82,225|
RESERVES & SURPLUS
The Companys reserve & surplus in the year 2018 has increased to Rs. 17,11,36,378/- as compared to the previous year figure of Rs. 16,62,85,087/-.
Further, the Companys reserve & surplus in the year 2018 as per the Consolidated Balance sheet has decreased to Rs. 15,96,59,046/- as compared to the previous year figure of Rs. 17,65,99,693/-.
Your Company is contemplating takeover of 15 MW (3X5 MW) small hydro power project in Chikmanglore District, Karnataka on "as is where is" basis. The electricity from the Project is being supplied to Mangalore Electricity Supply Company (MESCOM).
Your Company retains the operation and maintenance contract for Damanganga hydro power project in Gujarat. The Gross revenue of your Company was Rs. 2,85,63,679/- and the Profit after taxes recorded was Rs 48,51,290/- The earnings per equity share (of face value Re. 10) for the year is Rs 0.37.
Your company is negotiating with prospective financial institutions (FIs) / lending banks for funding of 80 MW as well as 15 MW hydro projects in Lesotho which are ready for take-off once the statutory clearances from the concerned authorities are obtained.
Your Directors look forward to a fruitful and promising year ahead.
With a view to provide a cushion for any financial contingencies in the near future and to strengthen the financial position of the Company, your Directors have decided not to recommend any dividend for the period under review.
The Company has (02) two subsidiaries Tarini Sugars and Distillaries Limited and Venture Infrastructure Limited There are (02) two associate companies within the meaning of Section 2(6) of the Companies Act, 2013 (Act) i.e. Tarini Infrastructure Limited, and Tarini Lifesciences Limited. There has been no material change in the nature of the business of the subsidiaries and there is no company which have become or ceased to become subsidiary, joint-venture or Associate Company during the year.
Pursuant to Section 129(3) of the Companies Act, 2013 and Accounting Standard - 21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company include the Financial Statements of its Subsidiaries.
Further, a separate statement containing the salient features of the financial statements of subsidiaries of the Company in the prescribed form AOC-1 has been given in the Consolidated Financial Statements. In terms of provisions of Section 136 of the Companies Act, 2013, the Company will place separate audited accounts of the Subsidiary Companies on its website.
The Company will make available physical copies of these documents upon request by any shareholder of the Company / subsidiary interested in obtaining the same.
These documents shall also be available for inspection at the Registered Office of the Company during business hours up to the date of ensuing AGM.
The Company has not accepted any Public Deposit pursuant to provisions of section 73 of the Companies Act, 2013, during the period under review.
M/s VCG & Co Chartered Accountants will retire at the forthcoming Annual General Meeting and are eligible for re-appointment.
As per the provisions of Section 139 (1), the Board of Directors of your Company proposes to re- appointment of M/s VCG & Co., Chartered Accountants, Statutory Auditors of your Company. As per the provisions of Section 139 (1), the Board of Directors of your Company proposes to re- appointment of M/s VCG & Co., Chartered Accountants, Statutory Auditors of your Company from the Financial Year 2018-19, subject to the approval of shareholders.
The Auditors have given certain observations in their Audit report as under:
(a) The holding company and its subsidiaries has made certain advances amounting to Rs. 575 Lakhs during the financial year 2014-15 for which documents related to such advances given by the group companies were not available as the documents were impounded by the income tax authorities as mentioned in note no 29 of the financial statements. Further, confirmation from the parties as at end of the year was not found on records. In view of non-availability of related documents and other alternate audit evidence to corroborate the managements assessment of recoverability of these advances, we are unable to comment on the extent to which these balances are recoverable.
For the above observation, your Directors would like to state that the said parties could not give balance confirmation certificates in view of the fact that the enquiries of the Income Tax Authorities are still continuing. However, your Directors are following up with the respective Companies for the Balance Confirmation Certificates and are hopeful to get the same as soon as possible. It is pertinent to mention the advances stand good as and when the project takes off the ground which is stalled due to ongoing investigations.
(b) We draw attention to note 39 to Financial Statement regarding the investment made by amounting Rs. 68 Lakhs in a subsidiary, who has suffered recurring losses and has a net capital deficiency. The financial statements of that subsidiary have been prepared assuming that the Company will continue as a going concern. These conditions raise substantial doubt about its ability to continue as a going concern. The financial statements of holding company do not include any adjustments relating to the recoverability and classification of asset carrying amounts that might result that the subsidiary be unable to continue as a going concern.
Though there is an accumulated loss in the subsidiary company, the said company viz. Venture Infrastructure Limited, has not bagged new projects or work orders due to recession scenario around in infrastructure areas.. However, lot of bids are still open for participation and the said company will bag some orders in the near future and hence your directors are of the opinion that no adjustment is required at this stage and the same will be done at the appropriate time.
(c) In respect ofprovision for impairment of goodwill, aggregating to Rs. 71,72,388/- arising on consolidation of a subsidiary, whose net worth is substantially eroded as at March 31, 2018, not considered necessary by the management. In absence of valuation of investments in the subsidiaiy, we are unable to comment whether any impairment of goodwill is required.
The position with regard to the subsidiary in question has been explained to the reply for the observation at Point No. (b) above.
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 had appointed Mr. Manoj Sharma, Partner, RSMV & Co. Practising Company Secretaries, to conduct Secretarial Audit for the financial year 2017-18. The Secretarial Audit Report for the financial year ended March 31, 2018 is appended as Annexure I to this Report!
The Report contains the following observations:-
1. The Company has given the collateral guarantee for the loan taken by its associate company & loans / advances granted amounting to Rs. 1873.13 Lakhs to group companies / associated companies in which directors are interested; To this extent, there is a non-compliance of provisions of sections 185 and 186 of the Companies Act, 2013.
2. The Summons dated Vfh November 2014, issued by the SEBI is yet to be settled as correspondences are still being exchanged between SEBI and the Company.
3. The Nomination and Remuneration Committee consists of one Executive Director (Promoter) in the place of Non Executive Director. To this extent, there is non-compliance of provision of section 178 (1) of the Companies Act 2013.
4. During the year under review, there was delay in depositing TDS deducted from various parties, Employers and Employees contribution towards PF.
Your Directors would like to clarify as under to the said observations:
1. It should be noted that these loans were given for execution of various work items by these companies for the projects proposed to be undertaken by the Companies under the same management. It should also be noted that these Companies have no source of funding such as bank loans etc., due to infra start ups in nature.
2. The observation is a factual statement and your Directors are of the opinion that this observation does not need any reply.
3. Your Directors are looking for a suitable person for appointment which will be done as earliest as possible.
4. Your Directors clarify that the delay is due to the reasons beyond their control. However since the position has slightly improved, your Directors hope to meet these liabilities in future within the stipulated time.
Your Company has been Complying with the principles of good corporate governance over the years and is committed to the highest standards of Compliance.
Pursuant to the Listing Agreement executed by your Company with the BSE read with Regulation 15(2) of SEBI (LODR) Regulations, 2015, the provisions with regard to compliance of Corporate Governance as specified in regulations 17 to 27 and clauses (b) to (i) of Regulation 46 (2) and Para C, D and E of schedule V are not applicable to your company, keeping in view the fact your company is listed in the SME Platform of the BSE Limited.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
As required under SEBI (LODR) Regulations 2015 the Management Discussion and Analysis Report is attached herewith and forms part of this report.
CORPORATE SOCIAL RESPONSIBILTY (CSR)
The Company has not developed and implemented any Corporate Social Responsibility initiatives as the provisions of CSR as specified in Section 135 of the Companies Act, 2013 are not applicable to your Company.
EXTRACT OF THE ANNUAL RETURN
In accordance with Section 134(3)(a) of the Companies Act, 2013, extract of the annual return in the prescribed format is appended as Annexure II to the Boards Report.
NUMBER OF MEETINGS OF THE BOARD
The Board met (9) nine times during the financial year viz; on 03.04.2017, 30.05.2017,
02.09.2017, 14.11.2017, 29.11.2017, 19.12.2017, 01.01.2018, 20.01.2018 and
06.02.2018. The necessary quorum was present in all the meetings. The intervening gap between any two meetings was not more than one hundred and twenty days as prescribed by the Companies Act, 2013.
POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
The policy of the Company on Directors appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under Sub section (3) of Section 178 of the Companies Act,
2013, adopted by the Board, has been disclosed separately at Annexure III to the Boards Report.
COMMITTEES OF THE BOARD
The Board has three committees viz., the audit committee, nomination and remuneration committee and Shareholders / Investors Grievance Committee
The details pertaining to composition of above committees are given separately at Annexure III to the Boards Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
As per the provisions of the Companies Act 2013, Mr. Vakamulla Chandrashekhar (DIN: 00073657), retires at the ensuing Annual General Meeting and being eligible, seeks reappointment. The Board recommends her re appointment.
Mr. Jacob Kattuparambi! Varghese (DIN: 07701417) who was appointed as Additional Director is being appointed as an Independent Director of the Company, not liable to retire by rotation.
The brief profile of the Director who is to be re-appointed /appointed, are furnished in the notice of the annual general meeting. The Board recommends re-appointment/ appointment of above said Director.
DIRECTORS RESPONSIBILITY STATEMENT
The Audited Accounts for the financial year ended March 31,2018 are in conformity with .
the requirements of the Companies Act, 2013. Pursuant to Section 134(5) of the Companies Act, 2013, your directors hereby confirm that:
i) In the preparation of the annual accounts, the applicable accounting standards have been followed.
ii) 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 account of the company for that period.
iii) The Directors 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.
iv) The Directors had prepared the annual accounts on a going concern basis.
v) 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.
vi) 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.
PARTICULARS OF LOANS AND GUARANTEES
Pursuant to the requirement under Section 134(3) (g) of the Companies Act, 2013 the particulars of loans, guarantees or investments under Section 186 of the Act as at end of the Financial Year 2017-18 are attached as Annexure - IV which forms part of this report. & K
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arms length basis. The Company has not entered in any material related party transaction during the year.
Information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Form AOC-2 at Annexure V and the same forms part of this report.
Please refer Note No. 32 to the financial statement which sets out related party disclosures as prescribed under Accounting Standard 18.
INTERNAL FINANCIAL CONTROL
The Company has in place adequate internal financial controls with reference to financial statement, including adherence to the Companys policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures.
The detailed information about internal controls is set out in the Management Discussion & Analysis report which is attached and forms part of this Report.
The Company has implemented a Whistle Blower Policy and has established a vigil mechanism for employees and Directors to report their genuine concerns. The Whistle Blower Policy complies with the requirements of Vigil mechanism as stipulated under Section 177 of the Companies Act, 2013. The details of establishment of the Whistle Blower Policy/ Vigil mechanism have been disclosed on the website of the Company.
SIGNIFICANT AND MATERIAL ORDERS
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.
PARTICULARS OF EMPLOYEES
The information required under section 197 (12) of the Act Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees of the Company is appended as Annexure VI to the Boards report.
As far as the disclosure with regard to Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the information may be treated as NIL.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
Provisions of Section 134(3)(m) of the Companies Act, 2013 regarding Conservation of Energy and Technology Absorption does not apply to your Company.
FOREIGN EXCHANGE EARNINGS & OUTGO
During the year under review the foreign exchange earnings and the expenditure was nil. .
BUY BACK OF SECURITIES
The Company has not made any offer for buy back of its securities during the year under review.
SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Your Company has in place a formal policy for prevention of sexual harassment of its women employees in line with "The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
Your Directors wish to place on record their appreciation for the whole hearted and sincere co-operation the Company has received from its banker, Bank of India and various Government agencies. Your Directors also wish to thank all the employees for their co-operation.
By Order of the Board of Directors
For Tarini International Limited
V. Anu Naidu
Whole Time Director