Nicco Uco All. Director Discussions

For the year ended 31st March, 2019

The directors hereby present their 35th Annual Report together with the audited statement of accounts for the year ended 31st March, 2019.

1. Financial Results & State of Affairs :

(Rs. In Lakhs)
2018-19 2017-18 2018-19 2017-18
Loss : For the year -503.05 -493.83 -503.24 -494.00
Add : Balance of loss brought from the last year -63324.31 -62830.48 -63326.43 -62832.42
Transfer to Balance Sheet -63827.36 -63324.31 -63829.67 -63326.42

2. Dividend :

In view of loss, your Directors regret their inability to recommend any dividend for the year under review.

3. Share Capital :

Paid-up Share Capital of the Company, as on 31st March, 2019 was Rs.16,56,36,006/- and there has been no change in the Capital Structure of the company.

4. Financial Statement :

The Company has prepared financial statements under the historical cost convention in accordance with Generally Accepted Accounting Principle (GAAP) comprising mandatory Accounting Standards issued by The Companies (Accounting Standard Rules) 2006. Provision of Companies Act, 2013 and the Guideline issued by Reserve Bank of India.

5. Material changes and commitments :

The amount offered to Consortium of Banks towards settlement is tentative and is yet to reach a finality. No material changes and/ or commitments affecting the financial position of the Company occurred between and the end of financial year to which financial statement relate to and upto the date of this report. There has been no change in the nature of the business of the Company during the Financial Year 2018-19.

6. Operations :

There was an income of Rs. 55.27 lacs under standalone and Rs. 55.27 lacs under consolidated, arising out of dividends, electricity generation from wind mill and bank interest for the year under review. There was no recovery from defaulting parties in the current year and if there is no recovery in the subsequent year, it would be difficult to maintain office running expenses. However, the Management is quite hopeful of some recovery in the current year from a defaulting client.

The case filed by the Consortium of Banks in DRT, Kolkata is being contested by the Company on ground of maintainability and it is pending. Another case in DRT, Kolkata had been filed by Uco Bank for funding of the Mehta Transport deal through us, Indusind Bank for their securitized loan had filed a suit in DRT, Chennai. Axis Bank for their claim initiated Arbitration proceedings in Chennai; IFCI not being part of Consortium of Banks had filed a separate suit in DRT, Kolkata for their share of loan. IFC(W) had filed a suit in High Court in Kolkata for recovery of its loan. All these cases are being contested by the Company. The Company had many rounds of discussion with the Consortium of Banks and the Course of Settlement is in progress.

The Serious Fraud Investigation Office (SFIO) filed a few cases which are being contested by the Company in the Court of Law. After supplementary investigation in respect of securitization deal, SFIO had filed a case against the Directors and the Company which is being contested.

Criminal case filed against two ex-employees in the Chief Metropolitan Magistrate Court at Bankshall Street by DCDD, Kolkata Police, Lalbazar Street on a complaint filed by the Company is progressing in the Court.

7. Subsidiary Company :

The Company has one subsidiary, Nicco Insurance Agents and Consultant Ltd., the performance of which during the year under review forms part of the Annexed Consolidated Financial Statement. The Subsidiary does not come under the purview of SEBI (Listing Obligations and Disclosures Requirement) Regulation, 2015 as it is not a Material Subsidiary as defined under Regulation 16(1)(c) of the said Regulations.

8. Statutory Information :

There was no employee during the year ended 31st March, 2019 in respect of whom the particulars are required to be disclosed under rules 5(2) and 5(3) of the Companies (Appointment and Remuneration) Rules, 2014.

Since your company has no manufacturing activities, the disclosures as required under rule 8(3)(A) & (B) of the Companies (Accounts) Rules, 2014 relating to conservation of energy and technology absorption are not applicable to it.

The Company had no Foreign Exchange earning and outgo during the year under review.

9. Extract of Annual Return :

Pursuant to Section 134(3)(a) read with Section 92(3) of the Companies Act, 2013 an extract of the Annual Return made out in the prescribed format MGT-9 forming part of this report is presented under Annexure ‘C.

10. Particular of Loans, Guarantees and Investments :

The Company has not made any investments nor given any loan, guarantee to any person or bodies corporate during the year under review as stipulated in Section 186 of the Companies Act, 2013.

11. Internal Financial Control and its adequacy and Risk Management :

The Company has laid down a Risk Management procedure which is reviewed as and when necessary.

The Company has formulated and adopted policy adequate for evaluating the relevant aspects of Internal Financial Control relating to safeguarding of its assets, prevention and detection of fraud and errors, the adequacy of the accounting records and timely preparation of reliable financial disclosures. Apart from this, professional Internal Auditors continuously monitor the efficacy of the internal control framework and their reports are reviewed by the Audit Committee of Directors periodically.

12. Composition, number and dates of meetings of Board and Committees :

The details of the composition, number and dates of meetings of the Board and Committees held during the financial year 2018-19 forms part of the Report on Corporate Governance. The number of meetings attended by these Directors during the financial year 2018-19 also form part of the report on Corporate Governance.

13. Company ‘s policy on Directors appointment and Remuneration :

The remuneration policy is based on rewarding the performance based on review of achievements on a regular basis and in consonance with the requirement of Section 178 of the Companies Act, 2013 and existing industrial practice.

14. Details relating to remuneration of Directors, Key Managerial Personnel and Employees :

The details as required u/s.197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is marked as Annexure D which is annexed hereto and form part of Directors Report.

15. Directors Responsibility Statement :

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013 your Directors state that :

i. in the preparation of the Annual Accounts for the year ended March 31, 2019, applicable Accounting Standards have been followed along with proper explanation relating to material departures ;

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 as on March 31, 2019 and of the loss of the Company for the year ended 31st March, 2019.

iii. the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding assets of the Company and for preventing and deterring frauds and other irregularities ;

iv. the directors had prepared the accounts for the year ended March 31, 2019 on a going concern concept as per legal opinion obtained.

v. the directors had relied on the contention of the Management and also on the report of the Internal Auditors (outside firm) relating to internal financial controls, both of which are adequate and are operating effectively, Directors have also relied on Secretarial Audit Report.

vi. The Directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such systems will be adequate and operating effectively.

16. Declaration of Independent Directors :

The Company has two Independent Directors - Mr. Biswajit Roy (DIN 00198746) and Mrs. Aparna Dey (DIN 06941580) on the Board of the Company who hold office for a fixed tenure of five years and are not liable to retire by rotation. Declarations have been received from them confirming that they met the criteria of independence as laid down in Section 149 and Schedule IV of the Companies Act, 2013 read with Regulation 25 of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.

17. Corporate Social Responsibility :

The Company does not come under the purview of the Corporation Social Responsibility as envisaged in Section 135 of the Companies Act, 2013 read with Rule 9 of the Companies (Accounts) Rules, 2014.

18. Vigil Mechanism :

Pursuant to Regulation 22 of the SEBI (Listing Obligation & Disclosure Requirements) Regulation, 2015, the Company has formulated and adopted a Vigil Mechanism policy for directors and employees to report genuine concerns and to deal with unethical behavior, actual or suspected fraud or violation of the Companys code of conduct or ethics policy aiming, inter alia, at providing adequate safeguards against victimization of Directors and employees or any other person who avail the mechanism and also for providing for direct access to the chairperson of the Audit Committee in appropriate and exceptional cases.

19. Prevention of Sexual Harassment of women at the workplace :

No women is employed in the Company and there does not appear to exist any opportunity for harassment of women in workplace and, therefore, the provision as stipulated in Sexual Harassments of women at Workplace (Prevention, Prohibition and Redressal) Act 2006 and Rules framed thereunder is not applicable,.

20. Related Party Transaction :

Section 188 of the Companies Act, 2013 is not attracted as there were no materially significant related party transactions - within the meaning of Regulation 23 of the SEBI (Listing & Disclosure Requirements) Regulations, 2015, by the Company with the Promoters, Directors, Key Managerial Personnel or other designated persons during the year under review warranting disclosure.

21. Evaluation of the performance of Board Committee and Non Independent and Independent Directors :

A formal evaluation of all the directors individually and of the Board itself as a whole including functioning of various committees was carried out by the Board as provided in the Companies Act, 2013 and SEBI (Listing Obligation & disclosure Requirements) Regulations, 2015.

The Independent Directors also at their separate meeting conducted, inter alia, the evaluation of the performance of the Chairman and Non-Independent directors as required in the Companies Act, 2013 and in SEBI Regulations.

22. Deposit :

The Company has no unpaid/unclaimed matured deposits or interest thereon in the year under review.

23. Significant and Material orders passed by the Regulators, Courts & Tribunals :

As reported last year in accordance with the direction of SEBI the BSE Ltd., had appointed a firm to conduct forensic audit on your company. The said firm had completed their audit in last year itself and reportedly immediately thereafter it had submitted its Report to BSE Ltd. Your company is not aware of the outcome of the said forensic audit but till the date of submission of this report to the Board of your Company no communication from SEBI/BSE Ltd. – adverse or otherwise - was received from the Regulators.

Except for the above, no significant and material order has been passed against the Company by the Regulators, Courts & Tribunals impacting the going concern status and companys operations in future.

24. Directors and Key Managerial Personnel :

Mr. D Saila (DIN 00198764), Director, is retiring by rotation at the ensuing AGM and being eligible offers himself for reappointment.

Mr. Biswajit Roy (DIN : 00198746) and Ms. Aparna Dey (DIN : 06941580) – who were appointed as Independent Directors for a period of five years at the 30th Annual General Meeting of the Company held on 26th September, 2014 would be holding their respective offices upto 25th September, 2019.

Key Managerial Personnel :

Mr. L. N. Kaul who was appointed as MD is a professional; hence in terms of Notification dated 12th September, 2016 by the Ministry of Corporate Affairs, the approval of Central Government is not required and No Objection Certificate (NoC) of secured lenders i.e. Bank is needed. Correspondence for obtaining NoC had been initiated with Bank.

25. Management discussion and analysis of Corporate Governance and Auditors Report :

In accordance with the requirement of the Listing Agreements with the Stock Exchange, a report on the Management Discussion and Analysis is attached hereto (Annexure ‘A). A report on the status of Compliance of Corporate Governance norms alongwith the certificate of Auditors are also attached (Annexure ‘B).

26. Auditor & Audit Report :

M/s. G. Basu & Co., Chartered Accountants (Firms Registration No. 301174E) - the Auditors of the Company – were reappointed for a second term of five years from the financial years from 2018-19 to 2022-23 at the last Annual General Meeting of the Company held on 26th September, 2018.

Pursuant to the recent amendment to section 139 of the Act with effect from 7th May, 2018, ratification by shareholders every year for the appointment of the Statutory Auditors is no longer required and accordingly the notice of the forthcoming Annual General Meeting does not include the proposal for seeking Shareholders approval for ratification of Statutory Auditors appointment.

M/s. G. Basu & Co., have confirmed by furnishing a certificate that they are not disqualified from continuing as Auditors of the Company in terms of Section 139 and 141 of the Companies Act, 2013. The Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

The comments of the Board of Directors to the qualification made by the Independent Auditors in the (a) Auditors Report, (b) Annexure to the Auditors Report and (c) Certificate issued on compliance of conditions of Corporate Governance, all dated 27th May, 2019, are given below :

Clause (a) - Please refer to Note No. 2.21 of Notes to Financial Statement in this regard. Necessary action, if any, will be taken on disposal of the appeal.

Clause (c) - With regard to cases initiated by SFIO for non-compliance of the Order of CLB on repayment of Fixed Deposit and few other accounting violations, please refer to Note No. 2.3(vi) explaining that the entire fixed deposit liability of the Company has been completely extinguished pursuant to an Order of the Honble High Court at Calcutta approving a Scheme and this plea has been taken before the Chief Metropolitan Magistrate in whose court the cases are pending and being contested by the Company.

Clause (b) & (d) - With regard to non-confirmation of the balances by certain Banks and non-charging of interests on their dues, please refer to Note No. 2(3)(ii)(a) & (b) and 2(23) (a) & (b) of Notes to Financial Statement fully explaining the position.

(i) With regard to notes No. 2.3 (iv)(a) to (d) of Notes to Financial Statement, in this regard, necessary action, if any will be taken on disposal of the case.

Report on other Legal and Regulatory Requirement -Clause 2 - With regard to the report on other Legal and Regulatory requirements, the matters is self explanatory.


Clause 2 (a) (b) : Since there is no live agreement for Lease and Hire Purchase deals and the outstanding against the earlier deals have been provided for, the scope for physical verification of inventory does not exist and accordingly the same has not been verified.

Clause 7 : (a) (b) As the disputes have not yet been settled, the Company is not in a position to comment further. Clause 8 : Please refer to Note No. 2.3 (vii) and 2.5 (vi) of Notes to Financial Statement fully explaining the position. In regard to qualifications made under certificate issued on Corporate Governance, we state :

To cut cost, company is not having its own Website but sending financial data regularly to Stock Exchange in their required format for publishing on their website.

27. Secretarial Audit :

The Board of Directors of the Company has appointed Ms. Rasna Goyal, Company Secretary in Practice (Certificate of Practice No. 9209), as Secretarial Auditor to conduct an audit of secretarial compliances and records for the financial year 2018-19.

Pursuant to section 204(1) of the Companies Act, 2013 read with rule 9(2) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 she carried out audit of the secretarial compliances by the Company of the provisions of the Companies Act, 2013 and other laws as are applicable to the Company, during the year ended 31st March, 2019 and her Secretarial Audit Report in Form No. MR-3 is annexed to the Report of the Board of Directors for the year under review.

Further, pursuant to Regulation 24A of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, an audit was also carried out by her on secretarial compliances of all SEBI Regulations and guidelines/circulars issued there under, as are applicable to the Company, and an Audit Certificate issued in this connection by her is annexed to this Report.

Apart from these, as required under regulation 55A of the SEBI (Depositories & Participants) Regulations, 1996, read with SEBI Circular No. D & CC/FITTC/Cir-16/2002 dated 31.12.2002, a further audit was carried out on quarterly basis by the said Practicing Company Secretary to reconcile the total issued and listed capital of the Company with the admitted capital and the said quarterly reports, were submitted to BSE Ltd (Bombay Stock Exchange) within the prescribed timeline.

28. Human Resource Development :

The Human Resources strength has reduced substantially to seven and while its importance is well known, all efforts are being made to keep the moral and motivation of employees high, within the limited resources of the Company.

29. Business Responsibility Report :

The Company does not come under the purview of Regulation 34(2) of SEBI (Listing Obligation and Disclosure Requirements) Rules 2015.

For and on behalf of the Board of Directors
Place : Kolkata DEBDATTA SAILA
(DIN : 00198764)
Date : 13th August, 2019 (Chairman)