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Directors Report of Kanel Industries Ltd.
Mar 31, 2024
Your directors have pleasure in presenting the 31st Annual Report of the Company together with the
Audited Statements of Accounts for the year ended March 31, 2024.
1. FINANCIAL RESULTS:
The Company''s financial performance for the year under review along with previous year''s figures is
given hereunder:
(Amount In Lakhs)
|
PARTICULARS |
FOR THE YEAR ENDED ON |
FOR THE YEAR ENDED |
|
Net Income from Business Operations |
Nil |
Nil |
|
Other Income |
0.20 |
0.28 |
|
Total Income |
0.20 |
0.28 |
|
Profit / (loss) before depreciation & tax |
(29.04) |
(20.27) |
|
Less Depreciation |
2.17 |
2.44 |
|
Profit before Tax |
(27.23) |
(17.83) |
|
Less Tax Expenses: |
0 |
0 |
|
Net Profit after Tax |
(27.23) |
(17.83) |
2. STATE OF AFFAIRS:
The Company is engaged in the business of trading of various edible oils. There has been no change
in the business of the Company during the financial year ended 31st March, 2024.
The highlights of the Company''s performance are as under:
i. Revenue from operations - Nil.
ii. Loss for the year ended 31.03.2024 is Rs. 27.23 Lakhs against the Loss of Rs.17.83 Lakhs in the
previous year.
3. SHARE CAPITAL:
As on 31.03.2024 the paid-up Equity Share capital of the Company is Rs. 18,41,24,400/-.
During the year under review, the company has neither issued any shares with or without
differential voting rights nor granted any stock Option nor any sweat Equity Shares.
4. DIVIDEND:
In absence of adequate profits, Dividend is not recommended for the financial year ended on
31.03.2024.
5. RESERVES:
The Board of Directors transferred the entire amount of losses to the Reserves & Surplus.
6. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND:
The provisions of Section 125(2) of the Companies Act, 2013 do not apply as there was no dividend
declared and paid last year.
7. DETAILS OF SUBSIDIARY, JOINT VENTURE OR ASSOCIATE COMPANIES:
The Company does not have any Holding, Subsidiary, Joint Venture or Associate Company.
8. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF
THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS
FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:
No material changes and commitments affecting the financial position of the Company occurred
between the ends of the financial year to which these financial statements relate on the date of this
report.
9. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS
AND OUTGO:
The information pertaining to conservation of energy, technology absorption, Foreign exchange
Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule
8(3) of the Companies (Accounts) Rules, 2014 are annexed as Annexure âAâ.
10. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT
POLICY OF THE COMPANY:
The Company has developed and implemented a risk management policy which identifies major
risks which may threaten the existence of the Company. The same has also been adopted by your
Board and is also subject to its review from time to time. Risk mitigation process and measures have
been also formulated and clearly spelled out in the said policy. The Risk Management policy has
been uploaded on the website of the company at www.kanel.in .
11. CORPORATE SOCIAL RESPONSIBILITY (CSR):
The provisions of section 135 of the companies act, 2013 are not applicable to the company
considering the net worth, turnover and net profit of the company.
12. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE
COMPANIES ACT, 2013:
There were no loans, guarantees or investments made by the Company under Section 186 of the
Companies Act, 2013 during the year under review and the same has been disclosed under Note No.
7 of the Notes to the Balance Sheet.
13. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:
The Company has adequate system of internal control to safeguard and protect from loss,
unauthorized use or disposition of its assets. All the transactions are properly authorized, recorded
and reported to the Management. The Company is following all the applicable Accounting Standards
for properly maintaining the books of accounts and reporting financial statements. The internal
auditor of the company checks and verifies the internal control and monitors them in accordance
with policy adopted by the company. The Company continues to ensure proper and adequate
systems and procedures commensurate with its size and nature of its business.
14. STATUTORY AUDITORS:
M/s. N.S. Nanavati & Co., Chartered Accountants, (Firm Registration No. 134235W) was appointed as
Statutory Auditor of the Company to hold office from the 31st AGM to the 36th AGM of the company
for a term of five years in terms of the first proviso to Section 139 of the Companies Act, 2013.
15. STATUTORY AUDITOR''S REPORT & OBSERVATIONS:
The report of the Statutory Auditors of the Company is annexed herewith.
The auditors have not reported any frauds under sub section 12 of section 143 which are reportable
to the Central Government.
Except the Following, there are no qualifications, reservations or adverse remarks made by the
Statutory Auditor:
1. I have not been provided with classification of creditors and as per management representation
all creditors are other than registered under MSMED Act. Thus in absence of clear audit evidence
in this regard I am unable to determine the delay in making payment to MSME entities, liability of
interest and compliance on such delayed payments in terms of provisions 6f MSMED Act, if any.
- Explanation: We have asked for the status of creditors under MSME Act,2006. However, till date
we have not received any reply on the exact status. In absence of any official portal to verify the
same and non-receipt of information, we are of the opinion that all creditors are not MEME
registered
2. Out of total Inter Corporate Loans as above, the Company has taken total Mortgage Loan of
Rs.343 lakhs from M/s Ardent Ventures LLP in earlier years and in current year closing balance at
year end is Rs. 363.1/-. I have not provided any formal Loan Agreement copy except Mortgage
Deed which does not contain any repayment terms and interest rate. No interest is provided on
such Further M/s Ardent Ventures LLP has filed application of Corporate Insolvency Resolution
Process (CIRP) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC). In absence of
account confirmation, formal documents for loan take over from Adani Enterprise limited and
formal explanations from management, I am unable to comment upon non provision of interest,
huge differences between balance outstanding, which is pointed out by previous auditor.:
- Explanation: The said facility was Inter-Corporate Loan as it was originally taken from M/s.
Adani Enterprises Limited and the same was assigned by them to M/s. Ardent Ventures LLP.
Further, the company has been admitted for Corporate Insolvency Resolution Process under
Hon''ble NCLT, Ahmedabad Bench vide order dated 3rd December, 2021 for the same matter and
active steps are being taken for resolution of insolvency of the company.
3. Company has not made provision for doubtful Debtors of Rs 291.04 Lacs [Rs 290.31 Lacs ] Which
are long outstanding and chances for recovery are very less, as per our opinion, these are bad debts,
to that extent, Current Assets have been overstated and current years Losses and accumulated
losses have been understated.:
- Explanation: The management is taking active steps for recovery of its debtors. The management
is hopeful of its recovery hence no provision is made for doubtful debtors.
4. National Company Law Tribunal; Ahmedabad Bench has admitted the application of Corporate
Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency and Bankruptcy Code, 2016
(IBC) in the matter of M/s Ardent Ventures LLP a financial creditor of the company versus M/s
Kanel Industries Limited Corporate Debtor for the alleged default amounting to Rs. 29,11,77,568/-
till 31.07.2021. National Company Law Tribunal; Ahmedabad Bench has admitted the said
application and commenced the Corporate Insolvency Resolution Process (CIRP) w.e.f. 03rd
December, 2021. Further the Resolution Plan provided by Ardent Ventures LLP (resolution
Applicant) has been approved by the Committee of Creditors (CoC) in their meeting is filed with the
NCLT, Ahmedabad Bench for its approval.
Explanation: Observation is self-explanatory.
5. The Naroda Unit has been inoperative since last many years. Plant and Machinery at Naroda Unit
became scrape and sold out during the year under Audit as a scrape. Company has no Trading
activities/ Manufacturing activities during the year under audit, majority Financial indicators and
operating indicators remained negative and to the date of Audit report and in absence of formal
developments for financial support, on repeal of SICA, all matters pending with BIFR court
cancelled and matters came to original status for the resolution, one of the financial creditor has
filled application of Corporate Insolvency Resolution Process (CIRP) under Section 7 of the
Insolvency and Bankruptcy Code, 2016 (IBC) and admitted by the NCLT and the alleged default
claimed ia amounting to Rs. 29,11,77,568/- till 31.07.2021., in these all situations, there is
substantial doubt that it will be able to continue as a going concern even though the books of
accounts of the Company has been prepared on the assumption of a Going Concern basis. In this
situation, adjustments may be required to the recorded assets amounts at current value and
classification of liabilities is required. The financial statements do not disclose this fact.
- Explanation: The Company is engaged into trading activities as operating a plant or to start
manufacturing requires huge funds, and the company is going through fund crunch right now.
Hence company is accounting his business of trading on a going Concern Basis. Further, the
company has been admitted for Corporate Insolvency Resolution Process under Hon''ble NCLT,
Ahmedabad Bench vide order dated 3rd December, 2021 and active steps are being taken for
resolution of insolvency of the company.
6. The company has not paid Listing Fees for Ahmedabad, Jaipur and Calcutta stock exchange.
- Explanation: These exchanges are non-operative now and no trading activities are going on there
now-a-days.
7. The undisputed dues which are outstanding for more than six months as at the Balance Sheet date
from the date they became payable were Income Tax, TDS Payable, Sales Tax, FBT Tax, Professional
Tax, Municipal Tax for an amount of Rs. 71.67 lakhs, Rs.1.56 Lakhs, Rs. 16.80 lakhs, Rs. 0.06 lakhs,
Rs. 0.34 lakhs and Rs. 6.36 Lakhs respectively.
Explanation: The company has been admitted for Corporate Insolvency Resolution Process
under Hon''ble NCLT, Ahmedabad Bench vide order dated 3rd December, 2021 and active steps
are being taken for resolution of insolvency of the company.
8. TDS is not deducted during the year under audit and not paid to central government, such details
are not included in above figure since the company has not complied with the provisions of TDS and
not provided in books of accounts. Provisions of Professional Tax is also not complied with by the
company and no provision for such liability provided in books of account. In absence of required
statutory records to ascertain the total amount relating to Interest thereon, the above amount does
not include the interest and penalty portion. In absence of Sales Tax Assessment order/Return copy
and non-filing of Sales tax Returns for the F Y 2007-08 to 2012-13 and in absence of required
details and documents, we are unable to quantify the statutory liabilities relating to tax as well as
of Interest and penalty there on and total statutory liability outstanding at the end of financial year
under auditAmount due as per demand notice served by the Income Tax department is Rs.136.37
Lacs for the various assessment years previously as disclosed by the management. In continuation
to its follow-up, it was explained by the management that no final order received from the concern
department. No fresh order passed by the department during the year under audit for previous
assessment years hence liability could not quantified while preparing books of accounts, as
explained by the management.
Explanation: The company has been admitted for Corporate Insolvency Resolution Process
under Hon''ble NCLT, Ahmedabad Bench vide order dated 3rd December, 2021 and active steps
are being taken for resolution of insolvency of the company.
9. There are no dues of Sales Tax and Income Tax which have not been deposited on account of any
dispute except certain Sales Tax dues and Municipal Tax dues.
Explanation: Due to the account of the dispute, the said demands were not paid. The company
will take required steps after the adjudication of the dispute. The company has been admitted for
Corporate Insolvency Resolution Process under Hon''ble NCLT, Ahmedabad Bench vide order
dated 3rd December, 2021 and active steps are being taken for resolution of insolvency of the
company.
10. Demand Notices received from Sales Tax department for assessment years which have not been
accepted by the management in absence of Original Assessment Orders.
Explanation: The company will take required steps when it will receive the Original Assessment
Orders from the authorities. The company has been admitted for Corporate Insolvency
Resolution Process under Hon''ble NCLT, Ahmedabad Bench vide order dated 3rd December,
2021 and active steps are being taken for resolution of insolvency of the company.
16. ANNUAL RETURN:
The Annual Return in Form No.MGT-7 pursuant to the provisions of Section 92 has been placed at
website of the Company at www.kanel.in
17. SECRETARIAL AUDITOR:
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed
M/S. Malay Desai & Associates, Practicing Company Secretaries, Ahmedabad to undertake the
Secretarial Audit of the Company.
18. SECRETARIAL AUDIT REPORT & OBSERVATIONS:
The Secretarial Audit Report of Secretarial Auditor is appended as ''Annexure-B'' to this report.
There are no qualifications, reservations or adverse remarks made by the Secretarial Auditor except
the following:
1) The Company has Paid Annual Listing Fees after the due date to Bombay Stock Exchange.
Explanation: The Company has paid the Annual Listing Fees to Bombay Stock Exchange after the
due date due to some liquidity crunch.
2) Non-compliance in the appointment of internal auditor has been occurred as specified under
the provisions of Section 138 of the Companies Act, 2013.
Explanation: Currently Company is under Corporate Insolvency Resolution Process. However,
Company is in the process of appointing an internal auditor and likely to be completed soon.
3) Non-compliance in the Vacation of office of Director has been occurred as specified under the
provisions of Section 167 of the Companies Act, 2013 by Mr. Dhiren Thakkar.
Explanation: Currently Company is under Corporate Insolvency Resolution Process; Hence the
Board of Directors are suspended of their powers. However as informed by the Director, He has
resigned from the company by which disqualification has occurred before the disqualification and
further he has communicated to the company to file the pending returns to remove their
disqualification and the filing is already completed by that Company.
4) Non-compliance in the registration of independent director in the data bank has been
occurred as specified under Rule 6 of Companies (Appointment and Qualification of
Directors) Rules, 2014 by Mrs. Asha Desai.
Explanation: Currently Company is under Corporate Insolvency Resolution Process; Hence the
Board of Directors are suspended of their powers. Further as informed by Mrs. Asha Desai, she
failed to register herself within the time specified due to covid-19, however inspite of her attempt
to get registered post the due date, she was unable to receive the login credentials from the
ministry.
5) The company has not appointed a qualified company secretary as compliance officer of the
company.
Explanation: Ms. Ishani Dhupar, who was the company secretary and the compliance officer of the
company has resigned with effect from 03.03.2023 and till the date of this report, the company
has not appointed any qualified company secretary as compliance officer of the company.
6) During the year under review The Company has been admitted under CIRP proceedings vide
NCLT order dated 03.12.2021 for non-payment of dues of Financial Creditor. The Committee
of Creditors has approved the resolution plan and the same has been filed with Hon''ble NCLT
for its approval.
Explanation: The Resolution Plan approved by CoC has been filed with hon''ble NCLT for its
approval.
19. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW:
0 (Zero) Board Meetings were held during the financial year ended 31st March, 2024 on the following
dates:
The NCLT, Ahmedabad Bench has admitted the application for CIRP filed by M/s Ardent Ventures
LLP, a financial creditor, vide order dated 3rd December, 2021 and since then the Board of Directors
are suspended. Therefore, no Board Meetings has been conducted after 08th October, 2021. Further
to inform you, the resolution plan provided by M/s Ardent Ventures LLP has been approved by the
Committee of Creditors (âCoCâ) and the same has been filed before the Hon''ble NCLT for its
approval.
20. DIRECTOR RESPOSNSIBILITY STATEMENT:
Your directors wish to inform that the Audited Accounts containing financial statements for the
financial year 2023-24 are in full conformity with the requirements of the Companies Act, 2013.
They believe that the financial statement reflect fairly, the form and substance of transactions
carried out during the year and reasonably present the Company''s financial condition and results of
operations.
In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby
submits its responsibility statement:
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 this Act 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.
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.
21. DEPOSITS:
The company has not invited, accepted or renewed any deposit within the meaning of Chapter V
other than exempted deposit as prescribed under the provisions of the Company Act, 2013 and the
rules framed thereunder, as amended from time to time. Hence there are no particulars to report
about the deposit falling under Rule 8(5)(v) and (vi) of the Companies (Accounts) Rules, 2014.
22. DIRECTORS / KEY MANAGERIAL PERSONNEL:
T W ^
a. CHANGES IN BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL:
During the year there is no change in board of directors and Key Managerial Personnel:
b. BOARD EVALUATION:
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure
Requirements) Regulations 2015, had adopted a formal mechanism for evaluating its own
performance and as well as that of its committee and individual Directors, including the chairperson
of the Board. The Exercise was carried out through a structured evaluation process covering the
various aspects of the Board''s functioning such as composition of board & committees, experience &
competencies, performance of specific duties & obligations, governance issues etc.
The evaluation of the independent Directors was carried out by Board, except the independent
Director being evaluated and the chairperson and the non-independent Directors were carried out
by the independent Directors.
c. ANNUAL PERFORMANCE EVALUATION:
During the year under review, pursuant to the provisions of the Companies Act, 2013 and SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015 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 its various Committees. A separate meeting was carried out to evaluate
the performance of individual Directors including the Chairman of the Board, who were evaluated on
parameters such as level of engagement and contribution, independence of judgement, safeguarding
the interest of the Company and its minority shareholders etc. The performance evaluation of the
Independent Directors was carried out by the entire Board at its meeting following the meeting of
Independent Directors.
d. REMUNERATION POLICY:
The Board has on the recommendation of the Nomination & Remuneration Committee, formulated
criteria for determining, qualifications, positive attributes and independence of a director and also a
policy for remuneration of directors, key managerial personnel and senior management. The policy
is available at the website of company at www.kanel.in
e. DECLARATION BY INDEPENDENT DIRECTORS:
The Independent Directors have submitted their disclosures to the Board that they fulfill all the
requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves
to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the
relevant rules.
23. PARTICULARS OF CONTRACTS WITH RELATED PARTIES:
There were no related party transactions undertaken during the year under the review. The
provisions of Section 188 of the Companies Act, 2013 were not attracted. Further, there were no
materially significant related party transactions during the year under review made by the Company
with Promoters, Directors, or other designated persons which may have a potential conflict with the
interest of the Company at large.
24. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY
AND BANKRUPTCY CODE:
The NCLT, Ahmedabad Bench has admitted the application for CIRP filed by M/s Ardent Ventures
LLP who is a financial creditor. The Resolution Plan has been approved by Committee of Creditors
and the same has been filed before Hon''ble NCLT, Ahmedabad Bench for its approval.
25. CORPORATE GOVERNANCE:
Your Company practices a culture that is built on core values and ethical governance practices and is
committed to transparency in all its dealings. A Report on Corporate Governance as per the
Regulations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms
part of this Annual Report as an "Annexure-Dâ.
26. MANAGEMENT DISCUSSION AND ANALYSIS:
The Management Discussion and Analysis Report is appended as Annexure "Câ to this Report.
27. PARTICULARS OF EMPLOYEES:
Disclosure under the provisions of Section 197 of the Companies Act, 2013 read with Rule 5 of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:
a) The ratio of the remuneration of each director to the median remuneration of the employees of
the Company for the financial year.
- As the company has not paid any remuneration to the directors for the financial year 2023-24, the
ratio of the remuneration of each director to the median remuneration of the employees is 0.
b) The percentage increase in the remuneration of each director, Chief Executive Officer, Chief
Financial Officer and Company Secretary, if any in the financial year.
- During the FY 2023-24 there was nil (0%) increase in the remuneration of MD, CFO, CS and other
Non-Executive Directors.
c) The percentage increase in the median remuneration of employees in the financial year.
- Average increase is 0% for the F.Y. 2023-24.
d) The number of permanent employees on the rolls of the Company as on 31.03.2024.
- Nil
e) 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.
- Average 0% increase in salaries of Employees and 0% increase in Managerial Remuneration
during F.Y. 2023-24. As there is no increment in remuneration of managerial person during the year,
explanation is not required to be given.
f) Affirmation that the remuneration is as per the remuneration policy of the company.
- The Company''s remuneration policy is driven by the success of the Company during the year under
review. The Company affirms that the remuneration is as per remuneration policy of the Company.
28. COST AUDITORS:
The section 148 read with Companies (Audit & Auditors) Rules, 2014 and other applicable
provisions, if any, of the Companies Act, 2013 are not applicable to the Company Hence, the Board of
Directors of your company had not appointed Cost Auditor for obtaining Cost Compliance Report of
the company for the financial year 2023-24.
29. COMPLIANCE OF APPLICABLE SECRETARIAL STANDARDS:
The Company has complied with the provisions of Secretarial Standards (I & II) issued by the
Institute of Company Secretaries of India and approved by the Central Government under section
118(10) of the Companies Act, 2013.
30. PREVENTION OF INSIDER TRADING:
Your company has adopted the âCode of Conduct on Prohibition of insider trading âand âCode of
Conduct for Directors and Senior Management Personnelâ for regulating the dissemination of
Unpublished Price Sensitive Information and trading in security by insiders.
31. INDUSTRIAL RELATIONS (HUMAN RESOURCES):
During the period under review, the personal and industrial relations with the employees remained
cordial in all respects. The management has always carried out systematic appraisal of performance
and imparted training at periodic intervals. The Company recognizes talent and has judiciously
followed the principle of rewarding performance.
32. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE:
The Company is committed to provide a safe and conducive work environment to its employees
during the year under review. The company has in place an Anti-Sexual Harassment Policy in line
with the requirements of the Sexual Harassment of women at the workplace (Prevention,
Prohibition &Redressal) Act, 2013.
Your directors further state that 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.
33. ACKNOWLEDGEMENTS
Your Resolution Professional and directors place on record their sincere thanks to bankers, business
associates, consultants, and various Government Authorities for their continued support extended to
your Companies activities during the year under review. Your directors also acknowledges gratefully
the shareholders for their support and confidence reposed on your Company.
Date: September 02, 2024
Place: Ahmedabad FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
Sd/- Sd/- Sd/-
PRASHANT BHARATKUMAR PATEL DHIREN THAKKAR HITESH THAKKAR
RESOLUTION PROFESSIONAL MANAGING DIRECTOR & CFO DIRECTOR
IBBI Registration No.: DIN: 00610001 DIN: 00610006
IBBI /IPA-002/IP- No. 0827 /2019-2020/12627
IlKT
Mar 31, 2015
The Directors are pleased to submit herewith their report together
with the audited statement of accounts for the 23rd financial year
ended 31st March, 2015.
[Amount in Rs.]
PARTICULARS 2014-15 2013-14
Income from Operation 226872301.00 86215954.00
Other Income 39304.00 290252.00
Increase/(Decrease) in stock NIL NIL
Total Income 226911605.00 86506206.00
Total Expenditure 229329382.00 88687758.00
Profit/ (Loss) before Tax (2417777.00) (2181552.00)
Provision for Tax NIL NIL
Tax for Earlier periods NIL NIL
Prior Period Extra
Ordinary Items (Net) NIL NIL
Net Profit / (Loss) after Tax (2417777.00) (2181552.00)
Previous Year Debit Balance (419133866.00) (416952314.00)
Balance Carried to B/S (421551008.00) (419133866.00)
SHARE CAPITAL STRUCTURE :
During the year under review there were no changes in the Authorized,
Issued, Subscribed and Paid up Share Capital Structure of the Company.
DIVIDEND :
As our company incurred heavy losses during the year under review and
due to the accumulated losses our directors regret for their inability
to declare dividend to the members.
TRANSFER OF UNPAID / UNCLAIMED DIVIDEND :
Your company's all the 4 previous years i.e. dividends declared in year
1995, 1996, 1997 and 1998 are due for transfer thereof to investors'
education and protection fund as per the provision of the section 205c
of the companies act 1956. However due to huge accumulated losses since
the company could not meet its liabilities towards its bankers in time,
the bankers are not co operating and so company will make
representation of this fact to Registrar of the companies, Securities
and exchange board of India. At the highest authorities of bankers,
Reserve bank of India. In this situation the audit of the unclaimed
unpaid dividend accounts could not be conducted and completed.
The company had received more than 2000 investor complaints for
nonpayment of dividend or not revalidation of the dividend warrants of
the investors. However due to non co operation of the bankers, the
company could not resolve such complaints. Even the company's efforts
to surrender of the original dividend warrants and in lieu of such
dividend warrants requests for issue of demand draft in favor of
investor concerned are not accepted by the bankers. In view of the
above stated reasons the company could not make compliance with the
provision of section 205c of the companies act 1956.Company however has
almost solved most of the complaints related to non receipt of dividend
warrants.
BUY BACK OF EQUITY SHARES :
The Company had not made any Buy Back of its paid up equity shares
during the year 2014-15. Hence no specific disclosure is required to be
made in this report.
YEAR UNDER REVIEW :
During the year under review the Company has made net loss of Rs.
24,17,777/- (Previous Year's loss of Rs. 21,81,552/ -) from business.
The Company has earned total income Rs 22,69,11,605.00 (Previous year's
income was 8,65,06,206.00) and the Total expense is Rs. 22,93,29,382.00
(Previous year's expense is Rs. 8,86,87,758.00)
DETAILS OF LOANS, GUARANTEES AND INVESTMENTS U/S 186 OF THE COMPANIES
ACT, 2013 :
During the year under review the Company has not made any inter
corporate loans, investments, given any corporate guarantee to any
other body corporate, subsidiary, associate or any other company.
However, the Company had in earlier years provided Long term Loans and
Advances of Rs. 2817428. The Company has taken Secured Loan from Adani
Enterprise Limited. The same is not yet registered with the ROC.
DEPOSITS :
During the year under review your company has neither invited nor
accepted any public deposit as defined under Section 73 to 76 of the
Companies Act, 2013.
DEMATERIALISATION OF SECURITIES :
Your Company's Equity shares are admitted in the System of
Dematerialization by both the Depositories namely NSDL and CDSL. The
Company has signed tripartite Agreement through Registrar and Share
Transfer Agent System Support Service. The Investors are advised to
take advantage of timely dematerialization of their securities. The
ISIN allotted to your Company is INE 248C01013.Total Share
dematerialized up to 31st March, 2015 were 12218176 which constitute
66.36% of total capital. Your Directors request all the shareholders to
dematerialize their shareholding in the company as early as possible.
COMPLIANCE WITH THE STOCK EXCHANGE LISTING AGREEMENT :
The company is regular in making timely compliance of all the
applicable clauses of the Listing Agreement from time to time whether
it is event based compliance or time bound compliance of monthly,
quarterly, half yearly or yearly compliances. Your Company has already
paid Annual Listing fees of the Bombay stock exchange Limited for and
up to the financial year 2015-16. The same is pending for Ahmadabad
Stock Exchange. The Trading in equity shares of the Company is active
on the Bombay Stock Exchange Limited and the same is not suspended for
penal reasons by BSE during the year. The Trading platform of the
Ahmadabad Stock Exchange Limited, Jaipur Stock Exchange Limited and
Culcutta Stock Exchange Limited has been suspended/ cancelled by SEBI
hence, no trading is recorded. The highest, lowest, average prices
recorded on the Bombay Stock Exchange on every month of the financial
year 2014-15 including the volume in shares traded is separately given
in other information para of Corporate Governance report attached here
to. During the year your company has neither issued any shares or stock
options or ESOPs or other employee benefits.
MANAGEMENT'S DISCUSSION AND ANALYSIS :
Management's discussion and perceptions on existing business, future
outlook of the industry, future expansion and diversification plans of
the Company and future course of action for the development of the
Company are fully explained in a separate para in Corporate Governance
Report.
DIRECTORS :
Mr. Vinodchandra K. Pandya shall retire by rotation at the ensuing
Annual General Meeting as per provisions of Law. He eligible for
reappointment and have offered themselves for directorship of the
company. Your directors recommend for their reappointment.
The Company has received declarations from all the Independent
Directors of the Company confirming that they meet with the criteria of
independence as prescribed both under sub-section (6) of Section 149 of
the Companies Act, 2013 and under Clause 49 of the Listing Agreement
with the Stock Exchanges. Members are requested to refer to the Notice
of the Annual General Meeting and the Explanatory Statement for details
of the qualifications and experience of the Directors and the period of
their appointment. The Board recommends the passing of the Resolutions
at Item Nos. 5 to 9 of the Annual General Meeting Notice.
MANAGING DIRECTOR :
Mr. Dhiren K Thakkar is the Managing Director of the Company. Because
of the Company's bad financial position as well as it is a loss making
one he is not taking any managerial Remuneration.
FORMATION OF AUDIT COMMITTEE IN COMPLIANCE TO SECTION 177 OF THE
COMPANIES ACT, 2013 AND CLAUSE 49 OF THE LISTING AGREEMENT ON CORPORATE
GOVERNANCE :
In Compliance with the provisions of Section 177 of the Companies Act
2013 your company has formed an Audit Committee within the Organization
consisting of 3 independent directors. An Internal Auditors have been
appointed as Advisors in their professional capacity on this committee.
The area of operations and functional responsibilities assigned to the
committee are as per the guidelines provided in Clause 49 of the
Listing Agreement for implementation of code of corporate governance.
The Committee meets at least once in a quarter and gives its report of
each meeting to the Board for its approval, record and information
purposes. The detail of powers, responsibilities and system of
functioning of this committee is given in report on Corporate
Governance forming part of this report.
STATUTORY INFORMATION :
The Information required to be disclosed in the report of the Board of
Directors as per the provisions of Section 134 of the Companies Act,
2013 and the Companies Rules regarding the conservation of energy,
technology absorption, foreign exchange earnings and outgo is not
applicable to the Company. As Company is not manufacturing any product
or providing any services.
MATERIAL CHANGES :
Except the information given in this report, no material changes have
taken place after completion of the financial year up to the date of
this report which may have substantial effect on business and finances
of the company.
EMPLOYEES :
There are no employees of the company who were in receipt of the
remuneration of Rs.60,00,000/- annually in the Aggregate if employed
for the year and in receipt of the Monthly remuneration of Rs.
5,00,000/- in the aggregate if employed for a part of the year under
review. Hence the information required under being not applicable and
hence not given in this report.
DISCLOUSER AS PER COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL
PERSONNEL) RULE, 2014 :
i) The ratio of the remuneration of each director to the median
remuneration of the employees of the company for the financial year :
Total Remuneration expenses Rs. 235,000/-
Managerial Remuneration Expenses Rs. Nil/- Other employees Remuneration
Rs. 235,000/- ii) The percentage increase in remuneration of each
director, Chief Financial Officer, Chief Executive Officer, Company
Secretary or Manager, if any in the financial year :
No remuneration is increased during the year for any of the Key
Managerial Personnel, CFO, CEO, CS or Manager.
iii) The percentage increase in the median remuneration of employees in
the financial year :
During the year there was increase of Rs. 8500/- (03.75%) in
remuneration of any employees during the financial year.
iv) The number of permanent employees on the rolls of company; 1 (One)*
*-However there are several other employees who are contractual and not
permanent.
v) The explanation on the relationship between average increase in
remuneration and company performance :
There is increase of 3.75% in the average Remuneration of the
employees, whereas Company is still a loss making one. So there is no
any direct relationship between the average increase in remuneration
and company's performance.
vi) Comparison of the remuneration of the Key managerial personnel
against the performance of the company;
The KMP i.e. Managing Director is not paid any managerial Remuneration.
Hence, his remuneration is not comparable inter company, intra company
or inter industry as a whole.
vii) Variations in the market capitalization of the company, price
earnings ratio as at the closing date of the current financial year and
previous financial year and percentage increase over decrease in the
market quotations of the shares of the company in comparison to the
rate at which the company came out with the last public offer in case
of listed companies, and in case of unlisted companies, the variations
in the net worth of the company as at the close of the current
financial year and previous financial year;
Closing Market Price of shares of Company as on 31/03/2014 : Rs.14.25/-
Closing Market Price of shares of Company as on 31/03/2015 : Rs.16.34/-
viii) Average percentile increase 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;
NOT APPLICABLE as there is increase of 03.75% in Remuneration of any
employees of the company. But the Managerial Personnel of the Company
are not paid any Managerial Remuneration.
ix) Comparison of the each remuneration of the key managerial personnel
against the performance of the company; Not Comparable.
x) The key parameters for any variable component of remuneration
availed by the directors; NOT APPLICABLE.
xi) The ratio of the remuneration of the highest paid director to the
of the employees who are not directors but receive remuneration in
excess of the highest paid director during the year; and No employee is
receiving remuneration in excess or higher than the remuneration of
Director or Key Managerial Personnel.
xii) Affirmation that the remuneration is as per the remuneration
policy of the company.
All remuneration of the Employees and directors are decided by
Nomination & Remuneration Committee and by the Board of Directors
within the organization.
DIRECTORS' RESPONSIBILITY STATEMENT :
Pursuant to the provision contained in Section 134(5) of the Companies
Act 2013 (Corresponding Section 217(2AA) of the Companies Act, 1956),
the Directors of your Company confirm:
A. That in the preparation of the annual accounts, as far as possible
and except the Accounting Standards which are mentioned by the Auditors
in their Report and the Notes to the Accounts separately, the
applicable accounting standards has been followed and no material
departure has been made from the same;
B. That they 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 affair of
the Company at the end of the financial year and of the profit or loss
of the Company for that period;
C. That they 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 for preventing and
detecting fraud and other irregularities;
D. That they have prepared the annual accounts on a going concern
basis.
E. The Directors, in the case of Listed Company, had laid down
internal financial controls to be followed by the company and that such
internal financial controls are adequate and were operative
effectively.
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 AS TO INDEPENDENT DIRECTORS : (Pursuant to Provisions of
section 149(6) OF the Companies Act 2013).
All the Independent Directors of the Company do hereby declare that:
(1) All the Independent Directors of the Company are neither Managing
Director, nor a Whole Time Director nor a Manager or a Nominee
Director.
(2) All the Independent Directors in the opinion of the Board, are
persons of integrity and possesses relevant expertise and experience.
(3) Who are or were not a Promoter of the Company or its Holding or
subsidiary or associate company.
(4) Who are or were not related to promoters or directors in the
company, its holding, subsidiary or associate company.
(5) Who has or had no pecuniary relationship with the company, its
holding, subsidiary or associate company or their promoters or
directors, during the two immediately preceding financial years or
during the current financial year.
(6) None of whose relatives has or had pecuniary relationship or
transaction with the company, its holding, subsidiary, or associate
company, or their promoters, or directors, amounting to two per cent or
more of its gross turnover or total income or fifty lacs rupees or such
higher amount as may be prescribed, whichever is lower, during the two
immediately preceding financial years or during the current financial
year,
(7) Who neither himself, nor any of his relatives,
(a) Holds or has held the position of a key managerial personnel or is
or has been employee of the company or its holding, subsidiary or
associate company in any of three financial years immediately preceding
the financial year in which ihe is proposed to be appointed.
(b) Is or has been an employee or proprietor or a partner, in any of
the three financial years immediately preceding the financial years in
which he is proposed to be appointed of
(i) A firm of auditors or company secretaries in practice or cost
auditors of the company or its holding, subsidiary or associate
company; OR
(ii) Any legal or a consulting firm that has or had any transaction
with the company, its holding, subsidiary or associate company
amounting to ten per cent, or more of the gross turnover of such firm;
(iii) Holds together with his relatives two per cent, or more of the
total voting power of the company; OR
(iv) Is a Chief Executive or director, by whatever name called, or any
non-profit organization that receives twenty five per cent or more of
its receipts from the Company, any of its promoters, directors or its
holding, subsidiary or associate company or that holds two per cent or
more of the total voting power of the company; OR
(v) Who possesses such other qualifications as may be prescribed.
DECLARATION BY BOARD AS PER REQUIREMENT OF SECTION 178 :
In compliance with Section 178 (1) as also in compliance with Clause 49
of the Listing Agreement, the Board of Directors does hereby declare
that:
a. The Company has proper constitution of the Board of Directors
including independent directors in proportion as per requirement of
clause 49 of the Listing Agreement. However, the Company is still in
process for appointing a suitable person as woman director as required
under Section 149 of the Companies Act, 2013 as well as the CEO and
Company Secretary in Job.
b. The Company has constituted Nomination and Remuneration Committee,
Stakeholders Relationship Committee, Audit Committee as per
requirements of the Clause 49 of the Listing Agreement and provisions
of the Companies Act 2013.
c. The Company has the policy for selection and appointment of
independent directors who are persons of reputation in the society,
have adequate educational qualification, sufficient business experience
and have integrity & loyalty towards their duties.
d. The Company does not pay any managerial remuneration to its
Managing Directors and Directors because of Company's weak financial
position.
e. The Independent Directors are not paid any sitting fee for
attending Board and other committee meetings as decided by the Board
from time to time.
f. The Company is not paying any commission on net profits to any
directors.
AUDITORS :
STATUTORY AUDITORS :
Shah Dinesh Dahyalal & Associates, Present Statutory Auditors of the
company have given their letter of consent and confirmation under
section 139 the Companies Act 2013 for reappointment as Statutory
Auditors of the Company. The Board has now proposed to appoint the
Statutory Auditors for a period of 1 year as per requirements of
section 139 (1) of the Companies Act 2013 read with Companies (Audit
and Auditors) Rules 2014. Necessary Resolution for their appointment as
the Statutory Auditors and fixing their remuneration is proposed to be
passed at the Annual General Meeting.
Internal Auditors :
The company is in process of appointing an independent Chartered
Accountant to act as an Internal Auditor as per suggestion of auditors
in order to strengthen the internal control system for the Company.
SECREATARIAL AUDITOR :
The Company has appointed M/s. KAMLESH SHAH & SHAH CO. as the
secretarial auditor for the financial year 2014-15. They have given
their report in the prescribed form MR-3 which is annexed to this
report as an ANNEXURE.
OBSERVATION OF THE SECRETARIAL AUDITOR :
The Board of Directors of the Company is duly constituted with proper
balance of Executive Directors, Non- Executives Directors and
Independent Directors except the woman director. The Company has still
not appointed CFO and a Whole-time Company Secretary. The company is in
process of finding of suitable woman director, CFO and Whole- time
Company Secretary in Job looking at the financial status of the
Company.
AUDITORS OBSERVATION :
The notes to the accounts of the company are self explanatory. However
and clarification from the board of directors on the specific
observation made by the Auditors in their report are as under"
1) NON CLARIFICATION ON LOAN FROM ADANI ENTERPRISES LIMITED :
The Company has taken secured/mortgage loan from Adani Enterprises
Limited of Rs. 5 Crore in earlier year. However the Charge has not
registered with the ROC.
2) NON FILLING OF INCOME TAX RETURN FROM F.Y. 2008-09 ONWARDS :
The Companies accounts are not yet Tax Audited. Thus, the Company has
not filled the Income Tax Return of the Company. The Company will as
soon as possible get its Accounts Tax Audited and fill Income Tax
Return.
3) NON DEDUCTION OF TDS :
The Company has huge accumulated losses and expenses. Due to bad
financial position as well as being sick unit the Company does not have
sufficient funds for the TDS deduction. Now the Company started earning
from the Naroda unit. So now Company is in the process of growing up.
Now all the provisions will be followed by the Company.
4) BANK STATEMENT OF NO LIEN ACCOUNT :
Company had deposited Rs. 89.30 lacs as per BIFR directive in the No
Lien A/C with the 4 consortium Banks. This amount was meant for
rehabilitation of the Company. However in spite of the numerous
communications by auditors of the Company with the Banks for providing
stake of money deposited along with statements, the Banks have not
responded. In absence of the response from bank, the Company has been
helpless and unable to reconcile these no lien accounts.
5) OPERATIONS OF NARODA PLANT :
The Company has just restarted its Naroda Unit. The majority of
Financial and Operating indicators are negative because the Company has
just restarted the Naroda unit. The Company is working hard for making
it profitable. Because of huge accumulated losses, with the passing of
some years Company will start making profits.
6) NON COMPLIANCE OF THE ACCOUNTING STANDARD 28 :
The physical verification was not done by the Auditor at the Naroda
unit. The Machinery at Naroda Unit is still operative for the
Manufacturing process. The Company used the same for the Manufacturing
so that Company doesn't have to bear the high cost of Machinery.
7) NON COMPLIANCE WITH THE ACCOUNTING STANDARD FOR TAXATION AS 22 :
As per Accounting Standard 22 the company is required to create
Deferred Tax Liability / Assets each year. However the management is
of the opinion that due to huge accumulated losses and until the formal
plan for revival / rehabilitation is sanctioned, it is not considered
prudent polity to create Deferred Tax liabilities / Assets.
8) TRANSFER OF UNPAID / UNCLAIMED DIVIDEND TO INVESTORS' EDUCATION AND
PROTECTION FUNDS:
This has been fully explained separately in this report elsewhere under
relevant Para.
9) NON PROVISION OF SALES TAX LIABILITIES :
The company has made a review application for assessment order under
the Sales Tax act. The company is hopeful of remedial favorable
assessment orders. Once the liabilities are crystallized, it will make
necessary arrangement for its payment and make necessary provision in
the books of account.
APPRECIATION :
Your Directors take this opportunity to acknowledge the trust reposed
in your company by its Shareholders, Bankers and clients. Your
Directors also keenly appreciate the dedication & commitment of all our
employees, without which the continuing progress of the company would
not have been possible.
For & On Behalf of the Board of Director of
Place : Ahmedabad (Vinodchandra Pandya) (Dhiren K Thakkar)
Date : 30th May, 2015 Director & Chairman
of Audit Committee Chairman &
Managing Director
(DIN: 02600107) (DIN: 00610001)
Mar 31, 2014
Dear Members,
The Directors are pleased to submit herewith their report together
with the audited statement of accounts for the 22nd financial year
ended 31st March, 2014.
[Amount in Rs.]
PARTICULARS 2013-14 2012-13
Income from Operation 86215954.00 NIL
Other Income 290252.00 1698293.00
Increase/ (Decrease) in stock NIL NIL
Total Income 86506206.00 1698293.00
Total Expenditure 88687758.00 5173589.00
Profit/ (Loss) before Tax (2181552.00) (3475296.00)
Provision for Tax NIL NIL
Taxws for Earlier periods NIL NIL
Prior Period Extra Ordinary Items NIL NIL
(Net)
Net Profit / (Loss) after Tax (2181552.00) (3475296.00)
Previous Year Debit Balance (416952314.00) (413477018.00)
Balance Carried to B/S (419133866.00) (416952314.00)
DIVIDEND:
As your company has incur loss during the year under review and due to
the accumulated losses your directors regret for their inability to
declare any amount as dividend to be paid.
TRANSFER OF UNPAID / UNCLAIMED DIVIDEND:
Your company''s all the 4 previous years i.e. dividends declared in year
1995, 1996, 1997 and 1998 are due for transfer thereof to investors''
education and protection fund as per the provision of the section 205c
of the companies act 1956. However due to huge accumulated losses since
the company could not meet its liabilities towards its bankers in time,
the bankers are not co operating and so company will make
representation of this fact to Registrar of the companies, Securities
and exchange board of India. At the highest authorities of bankers,
Reserve bank of India. In this situation the audit of the unclaimed
unpaid dividend accounts could not be conducted and completed.
The company had received more than 2000 investor complaints for non
payment of dividend or not revalidation of the dividend warrants of the
investors. However due to non co operation of the bankers, the company
could not resolve such complaints. Even the company''s efforts to
surrender of the original dividend warrants and in lieu of such
dividend warrants requests for issue of demand draft in favor of
investor concerned are not accepted by the bankers. In view of the
above stated reasons the company could not make compliance with the
provision of section 205c of the companies act 1956.Company however has
almost solved most of the complaints related to non receipt of dividend
warrants.
SHARE CAPITAL STRUCTURE:
During the year under review there were no changes in the Authorized,
Issued, Subscribed and Paid up Share Capital Structure of the Company.
BUY BACK OF EQUITY SHARES:
The Company had not made any Buy Back of its paid up equity shares
during the year in terms of section 77A, 77 AA and 77B of the Companies
Act 1956. Hence no specific disclosure is required to be made in this
report
YEAR UNDER REVIEW:
During the year under review the Company has made total loss of
Rs.21,80,916/- (Previous Year of Rs. 34,75,296/-) from business.
DEMATERIALISATION OF SECURITIES:
Your Company''s Equity shares are admitted in the System of
Dematerialization by both the Depositories namely NSDL and CDSL. The
Company has signed tripartite Agreement through Registrar and Share
Transfer Agent System Support Service. The Investors are advised to
take advantage of timely dematerialization of their securities. The
ISIN allotted to your Company is INE 248C01013.Total Share
dematerialized up to 31st March 2014 were 11380604 which constitute
61.81% of total capital. Your Directors request all the shareholders to
dematerialize their shareholding in the company as early as possible.
COMPLIANCE TO CODE OF CORPORATE GOVERNANCE:
The Complete Report on Corporate Governance is given as ANNEXURE-A to
this report.
MANAGEMENT''S DISCUSSION AND ANALYSIS
Management''s discussion and perceptions on existing business, future
out look of the industry, future expansion and diversification plans of
the Company and future course of action for the development of the
Company are fully explained in a separate para in Corporate Governance
Report.
DEPOSITS
During the year under review your company has neither invited nor
accepted any public deposit as defined under Section 58A of the
Companies Act-1956.
DIRECTORS
Mr. Kiritbhai C Patel and Mr. Yogeshkumar R. Patel shall retire by
rotation at the ensuing Annual General Meeting as per provisions of
Law. He eligible for reappointment and have offered themselves for
directorship of the company. Your directors recommend for their
reappointment.
MANAGING DIRECTOR
Mr. Dhiren K Thakkar, the Managing Director is due for reappointment as
Managing Director for a further period of 3 years. The Remuneration
Committee and the Board of Directors of the Company has approved his
appointment as Managing Director for a further period of 3 years w.e.f.
8th October 2013 without any managerial Remuneration. An Ordinary
Resolution is required to be passed for approval of his reappointment
for the next 3 years. Your directors recommend to pass necessary
resolution as mentioned in the notice for the Annual General Meeting.
DISCLOUSER AS PER COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL
PERSONNEL) RULE, 2014
i) The ratio of the remuneration of each director to the median
remuneration of the employees of the company for the financial year:
Total Remuneration expenses: Rs. 216,000/-
Managerial Remuneration Expenses: Rs. Nil/-
Other employees Remuneration: Rs. 216,000/-
ii) The percentage increase in remuneration of each director, Chief
Financial Officer, Chief Executive Officer, Company Secretary or
Manager, if any in the financial year:
No remuneration is increased during the year for any of the Key
Managerial Personnel, CFO, CEO, CS or Manager.
iii) The percentage increase in the median remuneration of employees in
the financial year
During the year there was no increase in remuneration of any employees
during the financial year.
iv) The number of permanent employees on the rolls of company; 1 (One)*
* However there are several other employees who are contractual and not
permanent.
v) The explanation on the relationship between average increase in
remuneration and company performance; NOT APPLICABLE as there was no
increase in remuneration of any employee during the year.
vi) Comparison of the remuneration of the Key managerial personnel
against the performance of the company;
The KMP i.e. Managing Director is not paid any managerial Remuneration.
Hence, his remuneration is not comparable inter company, intra company
or inter industry as a whole.
vii) Variations in the market capitalization of the company, price
earnings ratio as at the closing date of the current financial year and
previous financial year and percentage increase over decrease in the
market quotations of the shares of the company in comparison to the
rate at which the company came out with the last public offer in case
of listed companies, and in case of unlisted companies, the variations
in the net worth of the company as at the close of the current
financial year and previous financial year;
Closing Market Price of shares of Company as on 31/03/2013 : Rs.4.08/-
Closing Market Price of shares of Company as on 31/03/2014 : Rs.14.25/-
viii) Average percentile increase 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;
NOT APPLICABLE as there was no increase in Remuneration of any
employees of the company or the Managerial Personnel of the Company.
ix) Comparison of the each remuneration of the key managerial personnel
against the performance of the company; Not Comparable.
x) The key parameters for any variable component of remuneration
availed by the directors;
NOT APPLICABLE.
xi) The ratio of the remuneration of the highest paid director to the
of the employees who are not directors but receive remuneration in
excess of the highest paid director during the year; and No employee is
receiving remuneration in excess or higher than the remuneration of
Director or Key Managerial Personnel.
xii) Affirmation that the remuneration is as per the remuneration
policy of the company.
All remuneration of the Employees and directors are decided by
Nomination & Remuneration Committee and by the Board of Directors
within the organization.
Directors'' Responsibility STATEMENT
Pursuant to the provision contained in Section 134(5) of the Companies
Act 2013 (Corresponding Section 217(2AA)
of the Companies Act, 1956), the Directors of your Company confirm:
A. That in the preparation of the annual accounts, as far as possible
and except the Accounting Standards which are mentioned by the Auditors
in their Report and the Notes to the Accounts separately, the
applicable accounting standards has been followed and no material
departure has been made from the same;
B. That they 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 affair of
the Company at the end of the financial year and of the profit or loss
of the Company for that period;
C. That they 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 for preventing and
detecting fraud and other irregularities;
D. That they have prepared the annual accounts on a going concern
basis.
E. The Directors, in the case of Listed Company, had laid down internal
financial controls to be followed by the company and that such internal
financial controls are adequate and were operative effectively.
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 AS TO INDEPENDENT DIRECTORS: (Pursuant to Provisions of
section 149(6) OF the Companies
Act 2013).
All the Independent Directors of the Company do hereby declare that:
(1) All the Independent Directors of the Company are neither Managing
Director, nor a Whole Time Director nor a Manager or a Nominee
Director.
(2) All the Independent Directors in the opinion of the Board, are
persons of integrity and possesses relevant expertise and experience.
(3) Who are or were not a Promoter of the Company or its Holding or
subsidiary or associate company.
(4) Who are or were not related to promoters or directors in the
company, its holding, subsidiary or associate company.
(5) Who has or had no pecuniary relationship with the company, its
holding, subsidiary or associate company or their promoters or
directors, during the two immediately preceding financial years or
during the current financial year.
(6) None of whose relatives has or had pecuniary relationship or
transaction with the company, its holding, subsidiary, or associate
company, or their promoters, or directors, amounting to two per cent or
more of its gross turnover or total income or fifty lacs rupees or such
higher amount as may be prescribed, whichever is lower, during the two
immediately preceding financial years or during the current financial
year,
(7) Who neither himself, nor any of his relatives,
(a) Holds or has held the position of a key managerial personnel or is
or has been employee of the company or its holding, subsidiary or
associate company in any of three financial years immediately preceding
the financial year in which ihe is proposed to be appointed.
(b) Is or has been an employee or proprietor or a partner, in any of
the three financial years immediately preceding the financial years in
which he is proposed to be appointed of
(i) A firm of auditors or company secretaries in practice or cost
auditors of the company or its holding, subsidiary or associate
company; OR
(ii) Any legal or a consulting firm that has or had any transaction
with the company, its holding, subsidiary or associate company
amounting to ten per cent, or more of the gross turnover of such firm;
(iii) Holds together with his relatives two per cent, or more of the
total voting power of the company;
OR
(iv) Is a Chief Executive or director, by whatever name called, or any
non-profit organization that receives twenty five per cent or more of
its receipts from the Company, any of its promoters, directors or its
holding, subsidiary or associate company or that holds two per cent or
more of the total voting power of the company; OR
(v) Who possesses such other qualifications as may be prescribed.
STATUTORY AUDITORS
Shah Dinesh Dahyalal & Associates, Present Statutory Auditors of the
company have given their letter of consent and confirmation under
section 141(1) the Companies Act 1956 for reappointment as Statutory
Auditors of the Company. The Board has now proposed to appoint the
Statutory Auditors for a period of 1 year as per requirements of
section 139 (1) of the Companies Act 2013 read with Companies (Audit
and Auditors) Rules 2014. Necessary Resolution for their appointment as
the Statutory Auditors and fixing their remuneration is proposed to be
passed at the Annual General Meeting.
INTERNAL AUDITORS
The company is in process of appointing an independent Chartered
Accountant to act as an Internal Auditor as per suggestion of auditors
in order to strengthen the internal control system for the Company.
AUDITORS OBSERVATION
The notes to the accounts of the company are self explanatory. However
and clarification from the board of directors on the specific
observation made by the Auditors in their report are as under"
1) PREPARTION OF ACCOUNTS ON GOING CONCERN BASIS:
The auditors of the company are of the opinion that due to huge
accumulated losses and complete erosion of the net worth the company,
the accounts of the company is not advised to be written on a going
concern basis. But as the company has now settled all its working
capital dues of banks in the year 2009-10 and is in process to submit a
proper draft rehabilitation scheme in order to restart the production
at its Naroda unit after required capital expenditure and the
management is hopeful for the revival of the company in near future,
hence the company have been written books of account ongoing concern
basis.
2) CONFIRMATION OF ACCOUNTS PENDING:
The company has established the system of obtaining conformation of
accounts from various parties. The financial transactions are numerous.
Certain confirmations are pending including statement of secured Loan
received from Adani Enterprise Limited. However the auditors have
obtained all the information and explanations up to their best
knowledge and behalf as were necessary for their purpose of their
audit, except certain non receipt of conformation of balances in
respect of loans and advances, deposits and creditors and form banks
and financial institutions. This in fact does not affect financial
statements.
3) NON OPERATIONAL NARODA PLANT:
The Naroda plant has been non operational since last many years due to
lack of working capital and some minor changes in technology and other
reasons. However the company has received proposals from one big
industrial house to take the plant on lease/ rental basis for
manufacture of Castor oil as well as the company is in process to
prepare the draft rehabilitation scheme by which the company will
restart the production at its Naroda unit henceforth after required
capital expenditure. The proposals are under active consideration and
if upon finalization it will not only add the revenue to the company
but also recondition the plant., its life, its value, upgrade certain
technology, replace certain parts etc. Hence the market value of old
plant & machineries could be on lower side, the market value of land
and building will offset the losses, so it is the view of the
management to show the plant and machinery at a part of fixed assets in
the balance sheet and not to written off the assets.
4) NON PROVISION OF SALES TAX LIABILITIES:
The company has made a review application for assessment order under
the Sales Tax act. The company is hopeful of remedial favorable
assessment orders. Once the liabilities are crystallized, it will make
necessary arrangement for its payment and make necessary provision in
the books of account.
5) INTEREST FREE LOANS AND ADVANCES:
The Company had given certain loans and advances to number of parties
as interest free looking to the then prevailing business interests of
the Company. The Company has been receiving good business orders from
some of such parties still to date. So it is provided to such parties''
interest free and upon such terms and conditions as decided by both the
parties. The Management is trying to recover the same either in cash or
in kind and is doing the business with these parties. Other amount has
been received by the company against cash or in kind. Hence no
provisions as Bad loans and advances have been made. The company is
hopeful for its recovery of its outstanding amount and it is trying
commercially to recover the loan.
6) NON COMPLIANCE WITH THE ACCOUNTING STANDARD FOR TAXATION AS 22:
As per Accounting Standard 22 the company is required to create
Deferred Tax Liability / Assets each year. However the management is
of the opinion that due to huge accumulated losses and until the formal
plan for revival / rehabilitation is sanctioned, it is not considered
prudent polity to create Deferred Tax liabilities / Assets.
7) TRANSFER OF UNPAID / UNCLAIMED DIVIDEND TO INVESTORS'' EDUCATION AND
PROTECTION FUNDS:
This has been fully explained separately in this report elsewhere under
relevant Para.
8) NON PAYMENT OF CERTAIN DUES:
As the company is a sick unit and it has not enough funds with it so it
has defaulted in depositing statutory dues towards Income Tax deducted
at source, Professional Tax, Sales Tax, Income Tax and municipal Tax,
However dues of provident fund have been cleared, certain municipal tax
paid off and the company is gradually settling the old dues. At the
same time the company as soon as it recovers any amount or any surplus
has decided to give top priority to these dues.
9) BANK STATEMENT OF NO LIEN ACCOUNT:
Company had deposited Rs. 89.30 lacs as per BIFR directive in the No
Lien A/C with the 4 consortium Banks. This amount was meant for
rehabilitation of the Company. However in spite of the numerous
communication by auditors of the Company with the Banks for providing
stake of money deposited along with statements, the Banks have not
responded. In absence of the response from bank, the Company has been
helpless and unable to reconcile these no lien accounts.
Formation of Audit Committee in Compliance to Section 292 A of the
Companies Act, 1956 AND CLAUSE 49 OF THE LISTING AGREEMENT ON CORPORATE
GOVERNANCE:
In Compliance with the provisions of Section 292A of the Companies Act
1956 your company has formed an Audit Committee within the Organization
consisting of 3 independent directors. An Internal Auditors have been
appointed as Advisors in their professional capacity on this committee.
The area of operations and functional responsibilities assigned to the
committee are as per the guidelines provided in Clause 49 of the
Listing Agreement for implementation of code of corporate governance.
The Committee meets at least once in a quarter and gives its report of
each meeting to the Board for its approval, record and information
purposes. The detail of powers, responsibilities and system of
functioning of this committee is given in report on Corporate
Governance forming part of this report.
EMPLOYEES
There are no employees of the company who were in receipt of the
remuneration of Rs.24,00,000/- annually in the Aggregate if employed
for the year and in receipt of the Monthly remuneration of Rs.
2,00,000/- in the aggregate if employed for a part of the year under
review. Hence the information required under Section 217 (2A) of the
Companies Act, 1956 being not applicable and hence not given in this
report.
STATUTORY INFORMATION
The Information required to be disclosed in the report of the Board of
Directors as per the provisions of Section 217 (1) (e) of the Companies
Act-1956 and the Companies (Disclosure of Particulars in the Report of
Board of Directors) Rules 1988 regarding the conservation of energy,
technology absorption, foreign exchange earnings and outgo are not
applicable to the company hence are not given herewith. There were no
foreign Exchange earnings or outgo during the year.
MATERIAL CHANGES
Except the information given in this report, no material changes have
taken place after completion of the financial year up to the date of
this report which may have substantial effect on business and finances
of the company.
APPRECIATION
Your Directors take this opportunity to acknowledge the trust reposed
in your company by its Shareholders, Bankers and clients. Your
Directors also keenly appreciate the dedication & commitment of all our
employees, without which the continuing progress of the company would
not have been possible.
PLACE: AHMEDABAD BY ORDER OF THE BOARD OF DIRECTORS
DATE: 31st MAY, 2014 OF KANEL INDUSTRIES LIMITED.
(DHIREN K THAKKAR)
CHAIRMAN & MANAGING DIRECTOR
(DIN : 00610001)
Mar 31, 2013
To, The Member of Kanel Industries Limited.
Dear Shareholders,
The Directors have pleasure herewith the 21th Audited Report together
the audited statement of accounts of the year ended on 31st March,
2013.
FINANCIAL HIGHLIGHTS :
During the financial year period from 1st April, 2012 to 31st March,
2013 of financial year 2012-13 the financial operational result of the
company is as follows:
PARTICULARS FOR THE YEAR FOR THE YEAR
ENDED ON ENDED ON
31/03/2013 31/03/2012
Sales Income Nil 19,88,454.00
Other Income 16,98,293.00 16,55,917.00
Increase / ( Decrease ) in stock Nil Nil
Total Income 16,98,293.00 36,44,371.00
Total Expenditure 51,73,589.00 60,38,276.00
Profit / (Loss) before Tax (34,75,296.00) (23,93,905.00)
Provision for Tax Nil Nil
Taxes for Earlier periods Nil Nil
Prior Period Extra Ordinary Items (Net) Nil Nil
Net Profit / (Loss) after tax (34,75,296.00) (23,93,905.00)
Previous Year Debit Balance (41,34,77,018.00)(41,10,83,113.00)
Balance Carried to B/S (41,69,52,314.00)(41,34,77,018.00)
DIVIDEND :
As your company has incur loss during the year under review and due to
the accumulated losses your directors regret for their inability to
declare any amount as dividend to be paid.
TRANSFER OF UNPAID/UNCLAIMED DIVIDEND :
Your company''s all the 4 previous years i.e. dividends declared in year
1995, 1996, 1997 and 1998 are due for transfer thereof to investors''
education and protection fund as per the provision of the section 205c
of the companies act 1956. However due to huge accumulated losses since
the company could not meet its liabilities towards its bankers in time,
the bankers are not co operating and so company will make
representation of this fact to Registrar of the companies, Securities
and exchange board of India. At the highest authorities of bankers,
Reserve bank of India. In this situation the audit of the unclaimed
unpaid dividend accounts could not be conducted and completed.
The company had received more than 2000 investor complaints for non
payment of dividend or not revalidation of the dividend warrants of the
investors. However due to non co operation of the bankers, the company
could not resolve such complaints. Even the company''s efforts to
surrender of the original dividend warrants and in lieu of such
dividend warrants requests for issue of demand draft in favor of
investor concerned are not accepted by the bankers. In view of the
above stated reasons the company could not make compliance with the
provision of section 205c of the companies act 1956.Company however has
almost solved most of the complaints related to non receipt of dividend
warrants.
SHARE CAPITAL DURING THE YEAR :
During the year under review your directors have not issued any equity
or preference share to any persons. There has been no change in the
issued, subscribed and paid up capital of the company during the year
under review.
BUY BACK OF SHARES :
Your Director had not declared or announced or completed any procedure
for buy back of its own shares during the year under review as per the
provision of the section 77A, 77AA, and 77B of the companies'' act 1956.
Further no buy back of the share if any announced in earlier years are
still pending for implementation.
YEAR UNDER REVIEW :
During the year under review your company was engaged in the business
of hedging future options of commodity market. The company has made
efforts to put his plants.
NON OPERATION OF NARODA PLANT :
The company''s Naroda plant is not in use since 1998-99 due to
inadequate financial resources, Even though the plant has become old,
the company has proposed plans of capital expenditure for repairs and
renovation and subsequently to restart the production activity at the
unit and thereby the company has continued to show the same as fixed
assets of the company in the books of accounts.
However, now the company is in advance stages of negotiating a proposal
with few industrial groups to make operational the Naroda Plant of the
company for the manufacturing, refining and packaging of the Castor oil
on lease/rent basis /job basis as well as company''s own operation may
also kick start simultaneously at Naroda Unit. Upon finalization the
plant is expected to add the revenue to the company in cash from which
the company will be able to meet not only administrative and
operational expenses but generate surplus. In addition due to plant
being made operational and its maintenance will be done by tenant, the
plant will become renovated, upgraded and will be operational which
will increase its life.
SEGMENTWISE REPORTING AS-17 :
The company is operating only in one segment of manufacturing of oil
and sale of oil and it''s by product de-oiled cakes. Hence no separate
segment wise accounting is required and given herewith.
PROVISION FOR DEFERRED TAX LIABILITIES / ASSETS AS-22 AND NON PROVISION
OF INCOME TAX LIABILITIES.
The Company had huge accumulated and unabsorbed financial losses. The
company''s total net worth had been eroded. In view of this the
management has thought it fit and prudent not to make provision for
deferred tax assets which if created would appear as intangible assets
which could never be realized in future. The company is applying to
sought various reliefs for allowing carry forward losses by making an
application again with BIFR in the proposed DRS (Draft rehabilitation
scheme). Company is taking various legal opinion with respect to
assessment of exact income tax liabilities after the writing off the
bank liabilities and has taken a view of providing the same after
complete due diligence of past income tax returns filed by the legal
experts with past case laws. The management is trying hard for revival
and rehabilitation of the company, in fact it has already succeeded in
settling the huge bank debts and is further negotiating with big
industrial house to implement rehabilitation process by restarting
operations at the Naroda unit of the company, but until the matter is
finalized positively, the company has not accounted for deferred tax
liability.
RELATED PARTY TRANSACTION AS-18 :
The company has been buying raw materials and selling some of the
finished products, bye products through its group/associate concern in
which director are either director or any of their relatives or the
directors themselves are either partners/proprietors. All these
business transaction are being done at the prevailing market prices on
commercial terms and condition not favorable to any of the parties.
There have been no contractual obligations between any of the related
parties with the company to execute or enter in to any specific
business transactions. However proper disclosure has been made in the
notes to the accounts schedule R.
FOREIGN EXCHANGE EARNING AND OUTGO :
During the year under review the company had not done any import/export
business and the total foreign exchange earning and outgo was NIL
during the year.
INFORMATION PURSUANT TO THE LISTING AGREEMENT AND SEBI CIRCULAR NO.
SMDRP/CIR-14/98 DATED APRIL 29TH, 1998.
The company''s shares are listed presently in Ahmedabad, Calcutta,
Jaipur, and Mumbai Stock Exchange. The company has duly paid the annual
listing fees up to and including the year 2012-2013 i.e. up to
31.03.2013 for the stock exchange of Mumbai. The company is not paying
the annual listing fees of Calcutta and Jaipur stock exchanges since
1999-2000 onwards and for the ck industrial company and is not in a
position to pay such heavy financial expenses. As the company has
become a sick industrial company as per listing Ahmedabad stock
exchange since 2003-04 onwards due to no trading volume recorded on the
said stock exchanges. However the same is suspended on the Ahmedabad,
Calcutta and Jaipur stock exchange for non payment of listing fees. Due
to heavy financial losses, the company has not made provision for the
annual listing fees payable to the Calcutta stock exchange, Jaipur
stock exchange and Ahmedabad Stock Exchange. The Company has however
already complied with all the clauses of the list agreement with the
Bombay stock exchange, However the shares of the Company are currently
being traded on BSE.
DEMATERIALIZATION OF SECURITIES :
SEBI has identified the securities of the company for compulsory
trading in the dematerialized form w.e.f. 26th February 2001 by all
investors on all the stock exchanges. In compliance with the same and
to facilitate the shareholders, the company has already made
arrangement to enter into the Tripartite Agreement with NSDL and CDSL.
The investors are requested to take a note on the same and
dematerialize their holding as early as possible. The ISIN Number
allotted to your company is INE252 C 01015. Company has also appointed
System Support Services- Mumbai Mumbai as RTA agent of the company.
COMPLIANCE TO CODE OF CORPORATE GOVERNANCE :
Your company is a sick industries company. It had approached BIFR and
further a DRS (Draft rehabilitation scheme) is being prepared for
submission with the BIFR for fresh consideration and will be submitted
in due course The chairman of the company is executive managing
director; the constitution of the present board is in compliance with
the provisions of section 292a and also as per clause 49 of the listing
agreement.
ENVIRONMENT PROTECTION :
The company is consistently maintaining high standards in the control,
protection and discharge of effluents as per the strict standards fixed
and prescribed in the environment and pollution control regulation for
the industry in which it operates.
DEPOSITS :
During the year review your company has neither invited nor accepted
any public deposit or deposits from the public as defined under section
58a of the Companies Act, 1956.
DIRECTORS :
Mr. Vinodbhai K. Pandya retires by rotation at the ensuing Annual
General Meeting and being eligible offers him self for re-appointment.
Your Directors recommends his re-appointment.
DIRECTORS'' RESPONSIBILITY STATEMENT :
Pursuant to the provision contained in section 217(2aa) of the
Companies Act, 1956, the directors of your company confirm:
(A) That in the preparation of the annual accounts for financial year
ended on 31/03/2013 the applicable accounting standards has been
followed except as explained in point no. 8 hereafter.
(B) that they 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 affair of
the company at the end of the financial year and of the profit or loss
of the company for the year under review.
(C) That they 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 for preventing and
detecting fraud and other irregularities.
(D) That they have prepared the annual accounts on a going concern
basis.
STATUTORY AUDITORS :
M/s. Shah Dinesh Dahyalal & Associates, Chartered Accountants,
Ahmedabad the retiring statutory auditors on this annual general
meeting as per the act. The company has received a letter from the said
auditors to the effect that their appointment shall be within the
limits laid down under section 224(1 B) of the companies act. 1956. A
resolution proposing their reappointment as the regular auditor of the
company for the period from the conclusion of this annual general
meeting up to the conclusion of the next annual general meeting is
required to be passed. Your directors recommend passing the said
resolution.
APPOINTMENT OF THE INTERNAL AUDITOR :
Due to volume of transaction substantially less and the company being a
sick company the internal auditors have not been appointed for this
year. However once the company resumes normal transaction volumes the
internal auditors will be appointed again. At present the transaction
entered in are under the direct control of management.
AUDITORS OBSERVATION :
The notes to the accounts of the company are self explanatory. However
and clarification from the board of directors on the specific
observation made by the Auditors in their report are as under"
(1) PREPARTION OF ACCOUNTS ON GOING CONCERN BASIS :
The auditors of the company are of the opinion that due to huge
accumulated losses and complete erosion of the net worth the company,
the accounts of the company is not advised to be written on a going
concern basis. But as the company has now settled all its working
capital dues of banks in the year 2009-10 and is in process to submit a
proper draft rehabilitation scheme in order to restart the production
at its Naroda unit after required capital expenditure and the
management is hopeful for the revival of the company in near future,
hence the company have been written books of account on going concern
basis.
(2) CONFIRMATION OF ACCOUNTS PENDING :
The company has established the system of obtaining conformation of
accounts from various parties. The financial transactions are numerous.
Certain confirmations are pending however the auditors have obtained
all the information and explanations up to their best knowledge and
behalf as were necessary for their purpose of their audit, except
certain non receipt of conformation of balances in respect of loans and
advances, deposits and creditors and form banks and financial
institutions. This in fact does not affect financial statements.
(3) NON OPERATIONAL NARODA PLANT :
The Naroda plant has been non operational since last many years due to
lack of working capital and some minor changes in technology and other
reasons. However the company has received proposals from one big
industrial house to take the plant on lease/ rental basis for
manufacture of Castor oil as well as the company is in process to
prepare the draft rehabilitation scheme by which the company will
restart the production at its Naroda unit henceforth after required
capital expenditure. The proposals are under active consideration and
if upon finalization it will not only add the revenue to the company
but also recondition the plant., its life, its value, upgrade certain
technology, replace certain parts etc. Hence the market value of old
plant & machineries could be on lower side, the market value of land
and building will offset the losses, so it is the view of the
management to show the plant and machinery at a part of fixed assets in
the balance sheet and not to written off the assets.
(4) NON PROVISION OF SALES TAX LIABILITIES :
The company has made a review application for assessment order under
the Sales Tax act. The company is hopeful of remedial favorable
assessment orders. Once the liabilities are crystallized, it will make
necessary arrangement for its payment and make necessary provision in
the books of account.
(5) INTEREST FREE LOANS AND ADVANCES :
The Company had given certain loans and advances to number of parties
as interest free looking to the then prevailing business interests of
the Company. The Company has been receiving good business orders from
some of such parties still to date. So it is provided to such parties''
interest free and upon such terms and conditions as decided by both the
parties. The Management is trying to recover the same either in cash or
in kind and is doing the business with these parties. Other amount has
been received by the company against cash or in kind. Hence no
provisions as Bad loans and advances have been made. The company is
hopeful for its recovery of its outstanding amount and it is trying
commercially to recover the loan.
(6) NON COMPLIANCE WITH THE ACCOUNTING STANDARD FOR TAXATION AS 22 :
As per Accounting Standard 22 the company is required to create
Deferred Tax Liability / Assets each year. However the management is
of the opinion that due to huge accumulated losses and until the formal
plan for revival / rehabilitation is sanctioned, it is not considered
prudent polity to create Deferred Tax liabilities / Assets.
(7) NON PUBLISHING OF QUARTERLY RESULTS :
The company could not declare un-audited / audited results due to
certain administrative problems but your management has taken care to
publish result on the website of the Company.
(8) TRANSFER OF UNPAID / UNCLAIMED DIVIDEND TO INVESTORS'' EDUCATION
AND PROTECTION FUNDS:
This has been fully explained separately in this report elsewhere under
relevant Para.
(9) NON PAYMENT OF CERTAIN DUES :
As the company is a sick unit and it has not enough funds with it so it
has defaulted in depositing statutory dues towards Income Tax deducted
at source, Professional Tax, Sales Tax, Income Tax and municipal Tax,
However dues of provident fund have been cleared, certain municipal tax
paid and the company is gradually settling the old dues. At the same
time the company as soon as it recovers any amount or any surplus has
decided to give top priority to this dues.
OTHER OBSERVATIONS :
Other observations made by the auditors are self explanatory in nature
and does not require further clarifications.
FORMULATION OF AUDIT COMMITTEE IN COMPLIANCE WITH THE PROVISIONS OF
SECTION 292A OF THE COMPANIES ACT 1956.
The company has formed an audit committee within the organization under
the Chairmanship of Mr. Vinodchandra Pandya an independent director.
The committee consists of 2 independent directors who are not in any
way related or interested with the promoters or the management. The
company has also appointed professionals as advisors in this committee.
The terms and reference of scope of work for the committee is as per
clause 49 of listing agreement on code for corporate governance.
Further details are given in complete report of corporate governance in
Annexure- A to this report.
EMPLOYEES :
There are no employees of the company who were in receipt of the
remuneration of Rs.24,00,000/- in the aggregate if employed for the
year and in receipt of the Monthly remuneration of Rs.2,00,000/- in the
aggregate if employed for a part of the year under review. Hence the
information required under Section 217 (2A) of the Companies Act, 1956
being not applicable are not given in this report.
STATUTORY INFORMATION :
The statutory information relating to the Conservation of Energy,
technology absorption, Adoption, Research and Development, Foreign
Exchange Earnings and outgo required to be given as per the provisions
of Section 217 (1) (e) of the Companies Act, 1956 and the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules,
1988 are given herewith in an Annexure A.
APPRECIATION :
Your Directors take this opportunity to acknowledge the trust reposed
in your company by its Shareholders, Bankers and clients. Your
Directors also keenly appreciate the dedication & commitment of all our
employees, without which the continuing progress of the company would
not have been possible.
BY ORDER OF THE BOARD OF DIRECTOR OF
KANEL INDUSTRIES LTD.
PLACE : Ahmedabad (Dhiren K. Thakkar)
DATE : 2nd September, 2013 Chairman & Managing Director
Mar 31, 2012
To, The Member of Kanel Industries Limited.
Dear Shareholders,
The Directors have pleasure herewith the 20th Audited Report together
the audited statement of accounts of the year ended on 31st March,
2012.
FINANCIAL HIGHLIGHTS:
During the financial year period from 1st April, 2011 to 31st March,
2012 of financial year 2011-12 the financial operational result of the
company is as follows :
PARTICULARS FOR THE YEAR FOR THE YEAR
ENDED ON ENDED ON
31/03/2012 31/03/2011
Sales Income 19,88,454.00 NIL
Other Income 16,55,917.00 4,85,64,787.00
Increase / (Decrease) in stock Nil NIL
Total Income 36,44,371.00 4,85,64,787.00
Total Expenditure 60,38,276.00 42,82,945.00
Profit / (Loss) before Tax (23,93,905.00) 4,42,81,842.00
Net Profit from Sale of Fixed
Assets NIL NIL
Provision for Tax NIL NIL
Taxes for Earlier periods NIL NIL
Prior Period Extra Ordinary
Items (Net) NIL 10,043.00
Net Profit / (Loss) after tax (23,93,905.00) 4,42,71,799.00
Previous Year Debit Balance (41,10,83,113.00) (45,53,54,912.00)
Balance Carried to B/S (41,34,77,018.00) (41,10,83,113.00)
STATUS ON BIFR APPLICATION :
The company's net worth is completely eroded. The company is in the
process of preparing a revival and rehabilitation scheme as per BIFR
order.
DIVIDEND:
As your company has incurred loss during the year under review and due
to the accumulated losses your directors regret for their inability to
declare any amount as dividend to be paid.
TRANSFER OF UNPAID/UNCLAIMED DIVIDEND :
Your company's all the 4 previous years i.e. dividends declared in year
1995, 1996, 1997 and 1998 are due for transfer thereof to investors'
education and protection fund as per the provision of the section 205c
of the Companies Act 1956. It has been informed by the management that
details for unclaimed dividend are not provided by the nominated bank,
SBI [Previously SBS], Industrial Finance Branch, Ellis bridge, Ahmadabad
and SBI [Previously SBS Isanpur, Ahmadabad]. However due to huge
accumulated losses since the company could not meet its liabilities
towards its bankers in time, the bankers are not cooperating and so
company will make representation of this fact to Registrar of the
companies, Securities and exchange board of India. At the highest
authorities of bankers, Reserve bank of India. In this situation the
audit of the unclaimed unpaid dividend accounts could not be conducted
and completed.
The company had received more than 2000 investor complaints for non
payment of dividend or not revalidation of the dividend warrants of the
investors. However due to non-cooperation of the bankers, the company
could not resolve such complaints. Even the company's efforts to
surrender of the original dividend warrants and in lieu of such
dividend warrants requests for issue of demand draft in favor of
investor concerned are not accepted by the bankers. In view of the
above stated reasons the company could not make compliance with the
provision of section 205c of the companies act 1956.Company however has
almost solved most of the complaints related to non-receipt of dividend
warrants.
SHARE CAPITAL DURING THE YEAR :
During the year under review your directors have not issued any equity
or preference share to any persons. There has been no change in the
issued, subscribed and paid up capital 'bf the company during the year
under review.
BUY BACK OF SHARES :
Your Director had not declared or announced or completed any procedure
for buy back of its own shares during the year under review as per the
provision of the section 77A, 77AA, and 77B of the companies' act 1956.
Further no buy back of the share if any announced in earlier years are
still pending for implementation.
YEAR UNDER REVIEW :
During the year under review your company was engaged in the business
of hedging future options of commodity market. The company has made
efforts to put his plants.
NON OPERATION OF NARODA PLANT :
The company's Naroda plant is not in use since 1998-99 due to
inadequate financial resources, Even though the plant has become old,
the company has proposed plans of capital expenditure for repairs and
renovation and subsequently to restart the production activity at the
unit and thereby the company has continued to show the same as fixed
assets of the company in the books of accounts.
However, now the company is in advance stages of negotiating a proposal
with few industrial groups to make operational the Naroda Plant of the
company for the manufacturing, refining and packaging of the Castor oil
on lease/rent basis /job basis as well as company's own operation may
also kick start simultaneously at Naroda Unit. Upon finalization the
plant is expected- to add the revenue to the company in cash from which
the company will be able to meet not only administrative; and
operational expenses but generate surplus. In addition due to plant
being made operational and its maintenance will be done by tenant, the
plant will become renovated, upgraded and will be operational which
will increase its life.
SEGMENTWISE REPORTING AS-17 :
The company is operating only in one segment of manufacturing of oil
and sale of oil and it's by product de-oiled cakes. Hence no separate
segment wise accounting is required and given herewith.
PROVISION FOR DEFERRED TAX LIABILITIES / ASSETS AS-22 AND NON PROVISION
OF INCOME TAX LIABILITIES.
The Company had huge accumulated and unabsorbed financial losses. The
company's total net worth had been eroded. In view of this the
management has thought it fit and prudent not to make provision for
deferred tax assets which if created would appear as intangible assets
which could never be realized in future. The company is applying to
sought various reliefs for allowing carry forward losses by making an
application again with BIFR in the proposed DRS (Draft rehabilitation
scheme). Company is taking various legal opinion with respect to
assessment of exact income tax liabilities after the writing off the
bank liabilities and has taken a view of providing the same after
complete due diligence of past income tax returns filed by the legal
experts with past case laws. The management is trying hard for revival
and rehabilitation of the company, in fact it has already succeeded in
settling the huge bank debts and is further negotiating with big
industrial house to implement rehabilitation process by restarting
operations at the Naroda unit of the company, but until the matter is
finalized positively, the company has not accounted for deferred tax
liability.
RELATED PARTY TRANSACTION AS-18
The company has been buying raw materials and selling some of the
finished products, bye products through its group/associate concern in
which director are either director or any of their relatives or the
directors themselves are either partners/proprietors. All these
business transaction are being done at the prevailing market prices on
commercial terms and condition not favorable to any of the parties.
There have been no contractual obligations between any of the related
parties with the company to execute or enter in to any specific
business transactions. However proper disclosure has been made in the
notes to the accounts Point No. 20.
FOREIGN EXCHANGE EARNING AND OUTGO :
During the year under review the company had not done any import/export
business and the total foreign exchange earning and outgo was NIL
during the year.
INFORMATION PURSUANT TO THE LISTING AGREEMENT AND SEBI CIRCULAR NO.
SMDRP/CIR-14/98 DATED APRIL 29th, 1998.
The company's shares are listed presently in Ahmadabad, Calcutta,
Jaipur, and Mumbai Stock Exchange. The company has duly paid the annual
listing fees up to and including the year 2011-2012 i.e. up to
31.03.2012 for the stock exchange of Mumbai. The company is not paying
the annual listing fees of Calcutta and Jaipur stock exchanges since
1999-2000 onwards and for the ck industrial company and is not in a
position to pay such heavy financial expenses. As the company has
become a sick industrial company as listing Ahmadabad stock
exchange since 2003-04 onwards due to no trading volume recorded on the
said stock exchanges. Further the company is also agreement norms the
shares of the company suspended for trading on all the stock exchange.
However the same is suspended on the Ahmadabad, Calcutta and Jaipur
stock exchange for nonpayment of listing fees. Due to heavy financial
losses, the company has not made provision for the annual listing fees
payable to the Calcutta stock exchange, Jaipur stock exchange and
Ahmadabad Stock Exchange. The Company has however already complied with
all the clauses of the list agreement with the Bombay stock exchange,
paid the penalty as demanded by the Bombay stock Exchange. The company
has made an application with the Bombay stock Exchange for revocation
of trading in the shares of the company , which is under active
consideration
DEMATERIALIZATION OF SECURITIES :
SEBI has identified the securities of the company for compulsory
trading in the dematerialized form w.e.f. 26th February 2001 by all
investors on all the stock exchanges. In compliance with the same and
to facilitate the shareholders, the company has already made
arrangement to enter into the Tripartite Agreement with NSDL and CDSL
The investors are requested to take a note on the same and
dematerialize their holding as early as possible. The ISIN Number
allotted to your company is INE252 C 01015. Company has also appointed
System Support Services- Mumbai Mumbai as RTA agent of the company.
COMPLIANCE TO CODE OF CORPORATE GOVERNANCE :
Your company is a sick industries company. It had approached BIFR and
further a DRS
(Draft rehabilitation scheme) is being prepared for submission with the
BIFR for fresh consideration and will be submitted in due course The
chairman of the company is executive managing director; the
constitution of the present board is in compliance with the provisions
of section 292A and also as per clause 49 of the listing agreement.
ENVIRONMENT PROTECTION :
The company is consistently maintaining high standards in the control,
protection and discharge of effluents as per the strict standards fixed
and prescribed in the environment and pollution control regulation for
the industry in which it operates.
DEPOSITS :
During the year review your company has neither invited nor accepted
any public deposit or deposits from the public as defined under section
58a of the Companies Act, 1956.
DIRECTORS :
Mr. Dhiren K Thakkar retires by rotation at the ensuing Annual General
Meeting and being eligible offers himself for re-appointment. Your
Directors recommends his re-appointment. Mr. BACHUBHAI KACHARDAS PATEL
filed his resignation on 01/08/2012. Mr. KIRITBHAI CHHAGANBHAI PATEL,
Mr. ADITYA YOGESHBHAI PATEL and Mr. YOGESHKUMAR RAJNIKANT PATEL were
appointed as Additional Directors of the Company w.e.f 16/04/2012. They
all hold office as such director only up to the date of the ensuing
AGM. However being eligible, it is proposed to appoint all of them as
Independent Non Executive Directors on the Board. Complete details of
each of the directors are given elsewhere in this report. Your
directors recommend to appoint all of them by passing requisite
resolutions as proposed in the Notice so that the company could make
compliance with the Listing Agreement. Mr. Bachubhai Patel resigned on
01/08/2012 and form-32 was filed in ROC on 13/08/2012 vide SRN No.
B45303096. Except the above, there is no change in the constitution of
the Board of Directors of the Company.
DIRECTORS' RESPONSIBILITY STATEMENT :
Pursuant to the provision contained in section 217(2AA) of the
Companies Act, 1956, the directors of your company confirm:
(A) That in the preparation of the annual accounts, as far as possible
and except the to extent if any accounting standards mentioned by the
auditors in their report as not complied with, all other applicable
accounting standards had been followed along with proper explanation
relating to material departures; except as explained in point no. 8
hereafter.
(B) that they 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 affair of
the company at the end of the financial year and of the profit or loss
of the company for the year under review.
(C) That they 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 for preventing and
detecting fraud and other irregularities.
(D) That they have prepared the annual accounts on a going concern
basis.
STATUTORY AUDITORS :
M/s. Shah Dinesh Dahyalal & Associates, Chartered Accountants,
Ahmadabad the retiring statutory auditors on this annual general
meeting as per the act. The company has received a letter from the said
auditors to the effect that their appointment shall be within the
limits laid down under section 224(1 B) of the companies act. 1956. A
resolution proposing their reappointment as the regular auditor of the
company for the period from the conclusion of this annual general
meeting up to the conclusion of the next annual general meeting is
required to be passed. Your directors recommend passing the said
resolution.
APPOINTMENT OF THE INTERNAL AUDITOR :
Due to volume of transaction substantially less and the company being a
sick company the internal auditors have not been appointed for this
year. However once the company resumes normal transaction volumes the
internal auditors will be appointed again. At present the transaction
entered in are under the direct control of management.
AUDITORS OBSERVATION :
The notes to the accounts of the company are self explanatory. However
and clarification from the board of directors on the specific
observation made by the Auditors in their report are as under"
(1) PREPARTION OF ACCOUNTS ON GOING CONCERN BASIS :
The auditors of the company are of the opinion that due to huge
accumulated losses and complete erosion of the net worth the company,
the accounts of the company is not advised to be written on a going
concern basis. But as the company has now settled all its working
capital dues of banks in the year 2009-10 and is in process to submit a
proper draft rehabilitation scheme in order to restart the production
at its Naroda unit after required capital expenditure and the
management is hopeful for the revival of the company in near future,
hence the company have been written books of account ongoing concern
basis.
(2) CONFIRMATION OF ACCOUNTS PENDING :
The company has established the system of obtaining conformation of
accounts from various parties. The financial transactions are numerous.
Certain confirmations are pending however the auditors have obtained
all the information and explanations up to their best knowledge and
behalf as were necessary for their purpose of their audit, except
certain non receipt of conformation of balances in respect of loans and
advances, deposits and creditors and form banks and financial
institutions. This in fact does not affect financial statements.
(3) NON OPERATIONAL NARODA PLANT :
The Naroda plant has been non operational since last many years due to
lack of working capital and some minor changes in technology and other
reasons. However the company has received proposals from one big
industrial house to take the plant on lease/ rental basis for
manufacture of Castor oil as well as the company is in process to
prepare the draft rehabilitation scheme by which the company will
restart the production at its Naroda unit henceforth after required
capital expenditure. The proposals are under active consideration and
if upon finalization it will not only add the revenue to the company
but also recondition the plant., its life, its value, upgrade certain
technology, replace certain parts etc. Hence the market value of old
plant & machineries could be on lower side, the market value of land
and building will offset the losses, so it is the view of the
management to show the plant and machinery at a part of fixed assets in
the balance sheet and not to written off the assets.
(4) NON PROVISION OF SALES TAX LIABILITIES :
The company has made a review application for assessment order under
the Sales Tax act. The company is hopeful of remedial favorable
assessment orders. Once the liabilities are crystallized, it will make
necessary arrangement for its payment and make necessary provision in
the books of account.
(5) INTEREST FREE LOANS AND ADVANCES :
The Company had given certain loans and advances to number of parties
as interest free looking to the then prevailing business interests of
the Company. The Company has been receiving good business orders from
some of such parties still to date. So it is provided to such parties'
interest free and upon such terms and conditions as decided by both the
parties. The Management is trying to recover the same either in cash or
in kind and is doing the business with these parties. Other amount has
been received by the company against cash or in kind. Hence no
provisions as Bad loans and advances have been made. The company is
hopeful for its recovery of its outstanding amount and it is trying
commercially to recover the loan. For further details refer to the
Point no. 3(e) of the Annexure to the Auditors Report.
(6) NON COMPLIANCE WITH THE ACCOUNTING STANDARD FOR RETIRE-MENT
BENEFITS WHILE PREPARING FINANCIAL STATEMENTS (15).
As the company's plants are not operational round the year and most of
the employees are temporary or on contractual basis. Due to these
reasons no provisions for retirement benefits are made.
(7) NON COMPLIANCE WITH THE ACCOUNTING STANDARD FOR TAXATION AS 22 :
As per Accounting Standard 22 the company is required to create
Deferred Tax Liability / Assets each year. However the management is
of the opinion that due to huge accumulated losses and until the formal
plan for revival / rehabilitation is sanctioned, it is not considered
prudent polity to create Deferred Tax liabilities / Assets.
(8) NON PUBLISHING OF QUARTERLY RESULTS :
The company could not declare un-audited / audited results due to
certain administrative problems but your management has taken care to
publish result and the same are under process.
(9) TRANSFER OF UNPAID / UNCLAIMED DIVIDEND TO INVESTORS' EDUCATION AND
PROTECTION FUNDS:
This has been fully explained separately in this report elsewhere under
relevant Para.
(10) NON PAYMENT OF CERTAIN DUES :
As the company is a sick unit and it has not enough funds with it so it
has defaulted in depositing statutory dues towards Income Tax deducted
at source, Professional Tax, Sales Tax, Income Tax and municipal Tax,
However dues of provident fund have been cleared, certain municipal tax
paid and the company is gradually settling the old dues. At the same
time the company as soon as it recovers any amount or any surplus has
decided to give top priority to these dues.
(11) INSTANCE OF NON-COMPLIANCE :
Listing was under suspension from 03-02-2003 due to penal reason, since
the Company has now complied with all compliances BSE has revoked
suspension wide it letter ref no DCS/COMP/OT/TB/211/2010-2011 date
09-08-2011. The company's shares are currently being traded on BSE.
OTHER OBSERVATIONS :
The Company has not Complied with Accounting Standard-28, introduced
w.e.f. 1st April, 2004 while preparing the financial statements. The
Management has not assessed technically the Plant and Machineries at
Naroda unit to decide about its impairment or carrying value. The
carrying amount of the assets was not reviewed for indication of
impairment of assets on basis of internal/external factors. Plant at
Naroda Division has been inoperative for fourteen years. Plant and
Machinery of book value of 25.14 Lacs has not been written off to the
extent to come down to its carry value. Loss for the year has been
understated to the extent of the book value of plant and machinery
balance not written off.
Other observations made by the auditors are self explanatory in nature
and does not require further clarifications.
FORMULATION OF AUDIT COMMITTEE IN COMPLIANCE WITH THE PROVISIONS OF
SECTION 292A OF THE COMPANIES ACT 1956.
The company has formed an audit committee within the organization under
the Chairmanship of Mr. Vinodchandra Pandya an independent director.
The committee consists of 2 independent directors who are not in any
way related or interested with the promoters or the management. The
company has also appointed professionals as advisors in this committee.
The terms and reference of scope of work for the committee is as per
clause 49 of listing agreement on code for corporate governance.
Further details are given in complete report of corporate governance in
Annexure- A to this report.
Audit committee has been constituted on 8th October 2008 as under
Mr. Vinodchandra Pandya Chairman, Mr. Kiritbhai Patel & Mr. Dhiren K.
Thakkar Member of the committee
EMPLOYEES:
There are no employees of the company who were in receipt of the
remuneration of Rs.24,00,000/- in the aggregate if employed for the
year and in receipt of the Monthly remuneration of Rs.2,00,000/- in the
aggregate if employed for a part of the year under review. Hence the
information required under Section 217 (2A) of the Companies Act, 1956
being not applicable are not given in this report.
STATUTORY INFORMATION :
The statutory information relating to the Conservation of Energy,
technology absorption, Adoption, Research and Development, Foreign
Exchange Earnings and outgo required to be given as per the provisions
of Section 217 (1) (e) of the Companies Act, 1956 and the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules,
1988 are given herewith in an Annexure A.
APPRECIATION :
Your Directors take this opportunity to acknowledge the trust reposed
in your company by its Shareholders, Bankers and clients. Your
Directors also keenly appreciate the dedication & commitment of all our
employees, without which the continuing progress of the company would
not have been possible.
BY ORDER OF THE BOARD OF DIRECTOR OF
KANEL INDUSTRIES LTD.
PLACE : Ahmadabad (Dhiren K. Thakkar)
DATE : 1st September, 2012 Chairman & Managing Director
Mar 31, 2010
The Directors have pleasure herewith the 18th audited report together
the audited statement of accounts of the year ended on 31st March,
2010.
FINANCIAL HIGHLIGHTS
During the financial year period from 1st April, 2009 to 31st March,
2010 of financial year 2009-10 the financial operational result of the
company is as follows:
PARTICULARS FOR THE YEAR FOR THE YEAR
ENDED ON ENDED ON
31/03/2010 31/03/2009
Sales Income NIL NIL
Other lncome 4,63,559 74,91,57,611
Increase/(Decrease) in stock NIL NIL
Total Income 4,63,559 74,91,57,611
Total Expenditure 47,85,887 2,11,62,359
Profit/(Loss) before Tax (43,22,328) 72,79,95,252
Net Profit from Sale of Fixed Assets 24,164 4,86,99,443
Provision for Tax NIL NIL
Taxes for Earlier periods NIL NIL
Prior Period Extra Ordinary Items (Net) 90,465 76,426
Net Profit/(Loss) aftertax (44,36,957) 77,67,71,121
Previous Year Debit
Balance (45,09,17,954) (122,77,15,298)
Balance Carried to B/S (45,53,54,911) (45,09,17,954)
STATUS ON BIFRAPLICATION:
The companys net worth is completely eroded. The companys application
to BIFR for revival and rehabilitation has been rejected and BIFR has
confirmed its prime facie opinion of winding up of the company. The
companys appeal in AAIFR against this order was rejected on
18/05/2005. The company had filed a reference vide case no. 159/2003,
which had became in fructuous by order dated -26/04/2005 on the ground
of prima facie opinion of BIFR. Against this order the company has
filed an appeal with AAIFR on 28/07/2005 vide case no.67/2003 for the
second reference. Final hearing is awaited and the decision of the
AAIFR is still pending.
STATUS OF CASES WITH DRT AND GUJARAT HIGH COURT
The secured lenders have withdrawn all recovery suits filed against the
company since their debts have been settled by way of OTS
. the
financial year 2008-09. BI FRs Application with the Gujarat High Court
with regards to winding up is pending but now due to the recent
development of debt being paid off and Delhi High Court having remanded
companys case back to BIFR the company has appealed the honorable
court to dismiss the same.
The companys networth is completely eroded. The company is preparing a
DRS (Draft rehabilition scheme) to be submitted with BIFR in its case
no. 78/2001 which is under consideration by BIFR as per the order of
the honourable Delhi High Court. The company has with drawn its appeal
no. 67/05 from AAIFR as it has became infractuous, after the order
passed by the honourable Delhi High Court in January - 2010.
DEBTRESTRUCTING & REHABILITION DEVLOPMENT
Kotak Mahindra Bank Ltd had taken over the debt of State Bank of
Saurashtra. The debt of Dena Bank, SBBJ and SBP were taken over by
ARCIL. Your directors are pleased to inform you that the company has
settled all its debt with the KMBL ( Debt of SBS was taken over by KMBL
) & ARCIL ( Debt of Dena, SBBJ & SBP was taken over by ARCIL) by the
way of OTS and obtained No Due Certificates from them in the financial
year 2008-09. Further the company has plans of restarting its
operations at Naroda Unit as a part of rehabilitation. The company is
preparing DRS (Draft rehabilition scheme) to be submitted with BIFR,
for various concessions.
DIVIDEND
As your company has not to earn much profit during the year under
review and due to the accumulated losses your directors regret for
their inability to declare any amount as dividend to be paid.
TRANSFER OF UNPAID/UNCLAIMED DIVIDEND:
Your companys all the 4 previous years i.e. dividends declared in year
1995, 1996, 1997 and 1998 are due for transfer thereof to investors
education and protection fund as per the provision of the section 205c
of the companies act 1956. However due to huge accumulated losses and
the company could not meet its liabilities towards its bankers in time,
the bankers are not co operating and so company has made representation
of this fact to Registrar of the companies, Securities and exchange
board of India. At the highest authorities of bankers, Reserve bank of
India. In this situation the audit of the unclaimed unpaid dividend
accounts could not be conducted and completed.
The company has received more than 2000 investor complaints for non
payment of dividend or not revalidation of the dividend warrants of the
investors. However due to non co operation of the bankers, the company
could not resolve such complaints. Even the companys efforts to
surrender of the original dividend warrants and in lieu of such
dividend warrants requests for issue of demand draft in favor of
investor concerned are not accepted by the bankers. In view of the
above stated reasons the company could not make compliance with the
provision of section 205c of the companies act 1956.
SHARE CAPITAL DURING THE YEAR:
During the year under review your directors have not issued any equity
or preference share to any persons. There has been no change in the
issued, subscribed and paid up capital of the company during the year
under review.
BUY BACK OF SHARES:
Your Director had not declared or announced or completed any procedure
for buy back of its own shares during the year under review as per the
provision of the section 77A, 77AA, and 77B of the companies act 1956.
Further no buy back of the share if any announced in earlier years are
still pending for implementation.
YEAR UNDER REVIEW
During the year under review your company was engaged in the business
of hedging future options of commodity market. The company has made
efforts to put his plants.
NON OPERATION OF NARODA PLANT:
The companys Naroda plant is not in use since 1998-99 due to
inadequate financial resources, Even though the plant has become old ,
the company has proposed plans of capital expenditure for repairs and
renovation and subsequently to restart the production activity at the
unit and thereby the company has continued to show the same as fixed
assets cf the company in the books of accounts.
However, now the company is negotiating proposal with a big industrial
group to make operational the Naroda Plant of the company for the
manufacture, refining and packaging of the castor oil on lease/rent
basis /job basis as well as companys own operation may also kick start
simultaneously at Naroda Unit. If the deal is finalized the plant is
expected to add the revenue to the company in cash from which will be
able to meet with the cash administrative and operational exp. In
addition due to plant being made operational and its maintenance will
be done by tenant, the plant will become renovated, upgraded and will
be operational which will increase its life.
SEGMENTWISE REPORTING AS-17
The company is operating only in one segment of manufacturing of oil
and sale of oil and its by product de-oiled cakes. Hence no separate
segment wise accounting is required and given herewith.
PROVISION FOR DEFERRED TAX LIABILITIES / ASSETS AS-22 AND NON PROVISION
OF INCOME TAX LIABILITIES.
The Company had huge accumulated and unabsorbed financial losses. The
companys total net worth had been eroded. In view of this the
management has thought it fit and prudent not to make provision for
deferred tax assets which if created would appear as intangible assets
which could never be realized in future. The company has sought various
relief for allowing carry forward losses by making an application again
with BIFR in the proposed DRS (Draft rehabilitation scheme). Company
is taking various legal opinion with respect to assessment of exact
income tax liabilities after the writing off the bank liabilities and
has taken a view of providing the same after complete due diligence of
past income tax returns filed by the legal experts with past case laws.
The management is trying hard for revival and rehabilitation of the
company, in fact it has already succeeded in settling the huge bank
debts and is further negotiating with big industrial house to implement
rehabilitation process by restarting operations at the Naroda unit of
the company, but until the matter is finalized positively, the company
has not accounted for deferred tax liability.
RELATED PARTY TRANSACTION AS-18
The company has been buying raw materials and selling some of the
finished products, bye products through its group/associate concern in
which director are either director or any of their relatives or the
directors themselves are either partners/proprietors. All these
business transaction are being done at the prevailing market prices on
commercial terms and condition not favorable to any of the parties.
There have been no contractual obligations between any of the related
parties with the company to execute or enter in to any specific
business transactions. However proper disclosure has been made in the
notes to the accounts schedule R.
FOREIGN EXCHANGE EARNING AND OUTGO:
During the year under review the company had not done any import/export
business and the total foreign exchange earning and outgo was NIL
during the year.
INFORMATION PURSUANT TO THE LISTING AGREEMENT AND SEBI CIRCULAR NO.
SMDRP/CIR-14/98DATEDAPRIL 29th, 1998.
The companys shares are listed presently in Ahmedabad, Calcutta,
Jaipur, and Mumbai Stock Exchange. The company has duly paid the annual
listing fees up to and including the year 2010- 2010 i.e. up to
31.03.2011 for the stock exchange of Mumbai. The company is not paying
the annual listing fees of Calcutta and Jaipur stock exchanges since
1999-2000 onwards and for the Ahmedabad stock exchange since 2003-04
onwards due to no trading volume recorded on the said stock exchanges.
Further the company is also sick industrial company and is not in a
position to pay such heavy financial expenses. As the company has
become a sick industrial company as per listing agreement norms the
shares of the company are suspended for trading on all the stock
exchange. However the same is suspended on the Ahmedabad, Calcutta and
Jaipur stock exchange for non payment of listing fees. Due to heavy
financial losses, the company has not made provision for the annual
listing fees payable to the Calcutta stock exchange, Jaipur stock
exchange and Ahmedabad Stock Exchange.
DEMATERIALIZATION OF SECURITIES:
SEBI has identified the securities of the company for compulsory
trading in the dematerialized form w.e.f. 26th February 2001 by all
investors on all the stock exchanges. In compliance with the same and
to facilitate the shareholders, the company has already made
arrangement to enter into the Tripartite Agreement with NSDL and CDSL.
The investors are requested to take a note on the same and
dematerialize their holding as early as possible. The ISIN Number
allotted to your company is INE252 C 01015. Company has also appointed
System Support - Mumbai in place of Sharepro services-Mumbai as RTA
agent of the company.
COMPLIANCE TO CODE OF CORPORATE GOVERNANCE:
Your company is a sick industries company. It had approached BIFR and
further a DRS
(Draft rehabilitation scheme) is ready for submission with the BIFR for
fresh consideration,
expected to be filed shortly
The chairman of the company is executive managing director; the
constitution of the present board is in compliance with the provisions
of section 292a and also as per clause 49 of the listing agreement.
Hence no committees could be formed as per requirements of the law due
to non availability of non executive independent directors.
ENVIRONMENT PROTECTION:
The company is consistently maintaining high standards in the control,
protection and discharge of effluents as per the strict standards fixed
and prescribed in the environment and pollution control regulation for
the industry in which it operates.
DEPOSITS:
During the year review your company has neither invited nor accepted
any public deposit or deposits from the public as defined under section
58a of the Companies Act, 1956.
DIRECTORS:
Mr. Vinodchandra Pandya retires by i station at the ensuing Annual
General Meeting and being eligible offers him self for re-appointment.
Your Directors recommends his re- appointment.
DIRECTORSRESPONSIBILITY STATEMENT:
Pursuant to the provision contained in section 217(2aa) of the
Companies Act, 1956, the directors of your company confirm:
(A) That in the preparation of the annual accounts for financial year
ended on 31 /03/2010 the applicable accounting standards has been
followed except as explained in point no. 8 hereafter.
(B) that they 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 affair o
the company at the end of the financial year and of the profit or loss
of the company for the year under review.
(C) That they 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 for preventing and
detecting fraud and other irregularities.
(D) That they have prepared the annual accounts on a going concern
basis.
STATUTORYAUDITORS
M/s. Shah Dinesh Dahyalal & Associates, Chartered Accountants,
Ahmedabad the retiring statutory auditors on this annual general
meeting as per the act. The company has received a letter from the said
auditors to the effect that their appointment shall be within the
limits laid down under section 224(1 B) of the companies act. 1956. A
resolution proposing their reappointment as the regular auditor of the
company for the period from the conclusion of this annual general
meeting up to the conclusion of the next annual general meeting is
required to be passed. Your directors recommend passing the said
resolution.
APPOINTMENTOF THE INTERNALAUDITOR:
Due to volume of transaction substantially less and the company being a
sick company the internal auditors have not been appointed for this
year. However once the company resumes normal transaction volumes the
internal auditors will be appointed again. At present the transaction
entered in are under the direct control of management.
AUDITORS OBSERVATION:
The notes to the accounts of the company are self explanatory. However
and clarification from the board of directors on the specific
observation made by the Auditors in their report are as under"
(1) PREPARTION OF ACCOUNTS ON GOING CONCERN BASIS:
The auditors of the company are of the opinion that due to huge
accumulated losses and complete erosion of the net worth the company,
the accounts of the company is not advised to be written on a going
concern basis. But as the company has now settled all its working
capital dues of banks in the year 2009-10 and is in process to submit a
proper draft rehabilitation scheme in order to restart the production
at its Naroda unit after required capital expenditure and the
management is hopeful for the revival of the company in near future,
hence the company have been written books of account on going concern
basis.
(2) CONFIRMATION OF ACCOUNTS PENDING:
The company has established the system of obtaining conformation of
accounts from various parties. The financial transactions are numerous.
Certain confirmations are pending however the auditors have obtained
all the information and explanations up to their best knowledge and
behalf as were necessary for their purpose of their audit, except
certain non receipt of conformation of balances in respect of loans and
advances,
deposits and creditors and form banks and financial institutions. This
in fact does not affect financial statements.
(3) NON OPERATIONAL NARODA PLANT:
The Naroda plant has been non operational since last many years due to
lack of working capital and some changes in technology and other
reasons. However the company has : received proposals from one big
industrial house to take the plant on lease/ rental basis ; for
manufacture of Castor oil as well as the company is in process to
prepare the draft rehabilitation scheme by which the company will
restart the production at its Naroda unit ; henceforth after required
capital expenditure. The proposals are under active j consideration
and if materialized it will not only add the revenue to the company but
also i revitalize the plant. Its life, its value, upgrades certain
technology, replace certain parts i etc. Hence the market value of old
plant & machineries could be on lower side, the market i value of land
and building will offset the losses, so it is the view of the
management to i show the plant and machinery at a part of fixed assets
in the balance sheet and not to i written off the assets. :
(4) NON PROVISION OF SALES TAX LIABILITIES:
The company has made a review application for assessment order under
the Sales Tax act. The company is hopeful of remedial favorable
assessment orders. Once the liabilities are crystallized, it will make
necessary arrangement for its payment and make necessary provision in
the books of account.
(5) INTEREST FREE LOANS AND ADVANCES:
The Company had given certain loans and advances to number of parties
as interest free i looking to the then prevailing business interests of
the Company. The Company has been : receiving good business orders from
some of such parties still to date. So it is provided to such parties
interest free and upon such terms and conditions as decided by both the
i parties. The Management is trying to recover the same either in cash
or in kind and is : doing the business with these parties. Other amount
has been received by the company against cash or in kind. Hence no
provisions as Bad loans and advances have been i made. The company is
hopeful for its recovery of its outstanding amount and it is trying i
commercially to recover the loan. æ
(6) NON COMPLIANCE WITH THE ACCOUNTING STANDARD FOR RETIRE-MENT
BENEFITS WHILE PREPARING FINANCIAL STATEMENTS (15).
As the companys plants are not operational round the year and most of
the employees : are temporary or on contractual basis. Due to these
reasons no provisions for retirement benefits are made. ;
(7) NON COMPLIANCE WITH THE ACCOUNTING STANDARD FOR TAXATION AS 22:
As per Accounting Standard 22 the company is required to create
Deferred Tax Liability / Assets each year. However the management is of
the opinion that due to huge accumulated losses and until the formal
plan for revival / rehabilitation is sanctioned, it is not considered
prudent polity to create Deferred Tax liabilities /Assets.
(8) NON PUBLISHING OF QUARTERLY RESULTS:
The company could not declare un-audited / audited results due to
certain administrative problems but your management has taken care to
publish result and the same are under process.
(9)TRANSFER OF UNPAID / UNCLAIMED DIVIDEND TO INVESTORS EDUCATION AND
PROTECTION FUNDS:
This has been fully explained separately in this report elsewhere under
relevant Para.
(10) NON PAYMENT OF CERTAIN DUES:
As the company is a sick unit and it has not enough funds with it so it
has defaulted in depositing statutory dues towards Professional Tax,
Sales Tax, Income Tax and municipal Tax, However certain municipal tax
is paid and the company is gradually settling the old dues. At the same
time the company as soon as it recovers any amount or any surplus
amount it deposits with the separate account maintained for this
purpose.
OTHER OBSERVATIONS:
Other observations made by the auditors are self explanatory in nature
and does not require further clarifications.
FORMULATION OF AUDIT COMMITTEE IN COMPLIANCE WITH THE PROVISIONS OF
SECTION 292A OF THE COMPANIES ACT 1956.
The company has formed an audit committee within the organization under
the Chairmanship of Mr. Vinodchandra Pandya an independent director.
The committee consists of 2 independent directors who are not in any
way related or interested with the promoters or the management. The
company has also appointed professionals as advisors in this committee.
The terms and reference of scope of work for the committee is as per
clause 49 of listing agreement on code for corporate governance.
Further details are given in complete report of corporate governance in
Annexure-Ato this report.
Audit committee has been constituted on 8th October 2008 as under
Mr. Vinodchandra Pandya Chairman, Mr. Bachubhai Patel & Mr. Dhiren K.
Thakkar Member of the committee
EMPLOYEES:
There are no employees of the company who were in receipt of the
remuneration of Rs.24,00,000/- in the aggregate if employed for the
year and in receipt of the Monthly remuneration of Rs.2,00,000/- in the
aggregate if employed for a part of the year under review. Hence the
information required under Section 217 (2A) of the Companies Act, 1956
being not applicable are not given in this report.
STATUTORY INFORMATION:
The statutory information relating to the Conservation of Energy,
technology absorption, Adoption, Research and Development, Foreign
Exchange Earnings and outgo required to be given as per the provisions
of Section 217(1) (e) of the Companies Act, 1956 and the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules,
1988 are given herewith in anAnnexureA.
APPRECIATION:
Your Directors take this opportunity to acknowledge the trust reposed
in your company by its Shareholders, Bankers and clients. Your
Directors also keenly appreciate the dedication & commitment of all our
employees, without which the continuing progress of the company would
not have been possible.
BYORDER OF THE BOARD OF DIRECTOR
OF KANEL OIL AND EXPORTINDUSTIERS LTD.
PLACE: Ahmedabad SD/-
DATE: 1st September, 2010 (Dhiren K. Thakkar)
Chairman & Managing Director
Mar 31, 2009
The Directors have pleasure herewith the 17th audited report together
the audited statement of accounts of the year ended on 31st march,
2009.
FINANCIAL HIGHLIGHTS
During the financial year period from 1st April, 2008 to 31st March,
2009 of financial year 2007-08 the financial operational result of the
company is as follows:
PARTICULARS FOR THE YEAR FOR THE YEAR
ENDED ON ENDED ON
31/03/2009 31/03/2008
Sales Income NIL 3,24,96,188
Other Income 74,91,57,611 1,87,52,106
lncrease/( Decrease) in stock NIL (91,14,460)
Total Income 74,91,57,611 4,21,33,834
Total Expenditure 2,11,62,359 3,99,98,203
Profit/(Loss) before Tax 72,79,95,252 21,35,631
Net Profitfrom Sale of
Fixed Assets 4,86,99,443 1,13,72,642
Provision for Tax NIL NIL
Taxes for Earlier periods NIL NIL
Prior Period Extra Ordinary
Items (Net) 76426 43047
Net Profit/(Loss) aftertax 77,67,71,121 1,34,65,226
Previous Year Debit Balance (122,77,15,298) (124,11,80,524)
Balance Carried to B/S (45,09,44,177) (122,77,15,298)
STATUS ON BIFR APPLICATION :
The companys net worth is completely eroded. The companys application
to BIFR for revival and rehabilitation has been rejected and BIFR has
confirmed its prime facie opinion of winding up of the company. The
companys appeal in AAIFR against this order was rejected on
18/05/2005. The company had filed a reference vide case no. 159/2003,
which had became in fructuous by order dated -26/04/2005 on the ground
of prima facie opinion of BIFR. Against this order the company has
filed an appeal with AAIFR on 28/07/2005 vide case no.67/2003 for the
second reference. Final hearing is awaited and the decision of the
AAIFR is still pending.
STATUS OF CASES WITH DRTAND GUJARAT HIGH COURT
The secured lenders have withdrawn all recovery suits filed against the
company since their debts have been settled byway of OTS in the
financial year 2008-09. BI FRs Application with the Gujarat High Court
with regards to winding up is pending but now due to the recent
development of debt being paid off the company is in the process of
urging the honorable court to dismiss the same.
DEBT RESTRUCTING & REHABILITION DEVLOPMENT
Kotak Mahindra Bank Ltd had taken over the debt of State Bank of
Saurashtra. The debt of Dena Bank, SBBJ and SBP were taken over by
ARCIL Your directors are pleased to inform you that the company has
settled all its debt with the KMBL ( Debt of SBS was taken over by
KMBL) & ARCIL ( Debt of Dena, SBBJ & SBP was taken over by ARCIL) by
the way of OTS and obtained No Due Certificates from them in the
financial year 2008-09. Further the company has plans of restarting its
operations at Naroda Unit as a part of rehabilitation.
DIVIDEND
As your company has not to earn much profit during the year under
review and due to the accumulated losses your directors regret for
their inability to declare any amount as dividend to be paid.
TRANSFER OF UNPAID/UNCLAIMED DIVIDEND:
Your companys all the 4 previous years i.e. dividends declared in year
1995, 1996, 1997 and 1998 are due for transfer thereof to investors
education and protection fund as per the provision of the section 205c
of the companies act 1956. However due to huge accumulated losses and
the company could not meet its liabilities towards its bankers in time,
the bankers are not co operating and so company has made representation
of this fact to Registrar of the companies, Securities and exchange
board of India. At the highest authorities of bankers, Reserve bank of
India. In this situation the audit of the unclaimed unpaid dividend
accounts could not be conducted and completed.
The company has received more than 2000 investor complaints for non
payment of dividend or not revalidation of the dividend warrants of the
investors. However due to non co operation of the bankers, the company
could not resolve such complaints. Even the companys efforts to
surrender of the original dividend warrants and in lieu of such
dividend warrants requests for issue of demand draft in favor of
investor concerned are not accepted by the bankers. In view of the
above stated reasons the company could not make compliance with the
provision of section 205c of the companies act 1956.
SHARE CAPITAL DURING THE YEAR:
During the year under review your directors have not issued any equity
or preference share to any persons. There has been no change in the
issued, subscribed and paid up capital of the company during the year
under review.
BUY BACK OF SHARES:
Your Director had not declared or announced or completed any procedure
for buy back of its own shares during the year under review as per the
provision of the section 77A, 77AA, and 77B of the companies act 1956.
Further no buy back of the share if any announced in earlier years are
still pending for implementation.
YEAR UNDER REVIEW
During the year under review your company was engaged in the job work
business of manufacturing of Castor oil & edible oils and also in the
business of hedging future options of commodity market. Companys own
operations were at standstill and were continuing with job work only as
the focus was to clear the huge outstanding bank debts , which with
hard efforts couid be settled , so total sales income during the year
was NIL (previous year Rs.3,24,96,188/-) other income of
Rs.74,91,57,611/- (P. Y. Rs. 1,87,52,106/-) due to lower level
operation of the plants (i.e. below the break even point) the company
had made a cash operational loss of Rs. 1,91,16,183/-. After making
provision for depreciation of Rs. 23,42,009/- your company has suffered
a availability of adequate funds and the company could not utilize its
full production capacity.
NON OPERATION OF NARODA PLANT:
The companys Naroda plant is not in use since 1998-99 due to
inadequate financial resources, further it could not function due to
its old age. The company could not complete the required maintenance,
renovation, up gradation of the said plant. Even though the plant has
become old , the company has proposed plans of capital expenditure for
repairs and renovation and subsequently to restart the production
activity at the unit and thereby the company has continued to show the
same as fixed assets of the company in the books of accounts.
However, now the company is negotiating proposal with a big industrial
group to make operational the Naroda Plant of the company for the
manufacture, refining and packaging of the castor oil on lease/rent
basis /job basis as well as companys own operation may also kick start
simultaneously at Naroda Unit. If the deal is finalized the plant is
expected to add the revenue to the company in cash from which will be
able to meet with the cash administrative and operational exp. In
addition due to plant being made operational and its maintenance will
be done by tenant, the plant will become renovated, upgraded and will
be operational which will increase its life.
SEGMENTWISE REPORTING AS-17
The company is operating only in one segment of manufacturing of oil
and sale of oil and its by product de-oiled cakes. Hence no separate
segmentwise accounting is required and given herewith.
PROVISION FOR DEFERRED TAX LIABILITIES / ASSETS AS-22 mND NON PROVISION
OF INCOME TAX LIABILITIES.
The Company had huge accumulated and unabsorbed financial losses. The
companys total net worth had been eroded. In view of this the
management has thought it fit and prudent not to make provision for
deferred tax assets which if created would appear as intangible assets
which could never be realized in future. The company has sought various
relief for allowing carry forward losses by making an application again
with BIFR in the proposed DRS (Draft rehabilation scheme). Company is
taking various legal opinion with respect to assessment of exact income
tax liabilities after the writing off the bank liabilities and has
taken a view of providing the same after complete due diligence of past
income tax returns filed by the legal experts with past case laws. The
management is trying hard for revival and rehabilitation of the
company, infact it has already succeeded in settling the huge bank
debts and is further negotiating with big industrial house to implement
rehabilitation process by restarting operations at the Naroda unit of
the company, but until the matter is finalized positively, the company
has not accounted for deferred tax liability.
RELATED PARTY TRANSACTION AS-18
The company has been buying raw materials and selling some of the
finished products, bye products through its group/associate concern in
which director are either director or any of their relatives or the
directors themselves are either partners/proprietors. All these
business transaction are being done at the prevailing market prices on
commercial terms and condition not favorable to any of the parties.
There have been no contractual obligation between any of the related
parties with the company to execute or enter in to any specific
business transactions. However proper disclosure has been made in the
notes to the accounts schedule R.
FOREIGN EXCHANGE EARNING AND OUTGO:
During the year under review the company had not done any import/export
business and the total foreign exchange earning and outgo was NIL
during the year.
INFORMATION PURSUANT TO THE LISTING AGREEMENT AND SEBI CIRCULAR NO.
SMDRP/CIR-14/98 DATED APRIL 29Ã, 1998.
The companys shares are listed presently in Ahmedabad, Calcutta,
Jaipur, and Mumbai Stock Exchange. The company has duly paid the annual
listing fees up to and including the year 2008- 2009 i.e. up to
31.03.2009 for the stock exchange of Mumbai. The company is not paying
the annual listing fees of Calcutta and Jaipur stock exchanges since
1999-2000 onwards and for the Ahmedabad stock exchange since 2003-04
onwards due to no trading volume recorded on the said stock exchanges.
Further the company is also sick industrial company and is not in a
position to pay such heavy financial expenses. As the company has
become a sick industrial company as per listing agreement norms the
shares of the company suspended for trading on all the stock exchange.
However the same is suspended on the Ahmedabad, Calcutta and Jaipur
stock exchange for non payment of listing fees. Due to heavy financial
losses, the company has not made provision for the annual listing fees
payable to the Calcutta stock exchange, Jaipur stock exchange and
Ahmedabad Stock Exchange.
DEMATERIALIZATION OF SECURITIES:
SEBI has identified the securities of the company for compulsory
trading in the dematerialized form w.e.f. 26th February 2001 by all
investors on all the stock exchanges. In compliance with the same and
to facilitate the shareholders, the company has already made
arrangement to enter into the Tripartite Agreement with NSDL and CDSL.
The investors are requested to take a note on the same and
dematerialize their holding as early as possible. The ISIN Number
allotted to your company is INE252 C 01015. Due fund crunch the company
could not pay the charges of NSDL and CDSL as also the fees of the
Registrar and Transfer Agents M/s. Sharepro Services (India) Private
Limited as per the agreements executed with them.
But Now the company has paid of the entire outstanding dues till year
2008/09 of NSDL, CDSL & Sharepro Services (India) P. Ltd in year
2008-09.. Company has also appointed System Support - Mumbai in place
of Sharepro services -Mumbai as RTA agent of the company. The company
has pending investors complaints for non conformation of the demat
shares of investors. The management is trying to resolve all the issues
and get the ISIN activated and convince them at least favor the company
to resolve the investors complaints.
COMPLIANCE TO CODE OF CORPORATE GOVERNANCE :
Your company is a sick industries company. It had approached BIFR and
further a DRS ( Draft rehabilitation scheme) is ready for submission
with the BIFR for fresh consideration, expected to be filed shortly
The chairman of the company is executive managing director, the other
director Dhiren K Thakkar who is a non executive director but he is
also not an independent director. Due to these reason the constitution
of the present board is not in compliance with the provisions of
section 292a and also as per clause 49 of the listing agreement.
Hence no committees could be formed as per requirements of the law due
to non availability of non executive independent directors.
ENVIRONMENT PROTECTION:
The company is consistently maintaining high standards in the control,
protection and discharge of effluents as per the strict standards fixed
and prescribed in the environment and pollution control regulation for
the industry in which it operates.
DEPOSITS:
During the year review your company has neither invited nor accepted
any public deposit or deposits from the public as defined under section
58a of the Com panies Act, 1956.
DIRECTORS:
Mr. Dhiren K. Thakkar retires by rotation at the ensuing Annual General
Meeting and being eligible offers him self for re-appointment. Your
Directors recommends his re-appointment.
Mr. Vinodchandra Pandya and Mr. Bachubhai Patel were appointed as
additional directors of the Company in the board meeting held on 8th
October, 2008. The Company has received notice in pursuance of Section
257 of the Companies Act, 1956 together with necessary deposit from
member of the Company signifying his intention to propose them as
Directors of the Company.
The Board recommends the re-appointment of Mr. Dhiren Thakkar as the
Chairman and Managing Director of the company w.e.f. 8th October, 2008
for a period of five years.
The board recommends their re-appointment as directors and Managing
Director respectively of the Company and put the resolution for Members
approval.
The Board of Directors appreciates the service rendered by Mr Hitesh
Thakkar and Mr Umesh Khese who have resigned for the personal reasons
DIRECTORS RESPONSIBILITYSTATEMENT:
Pursuant to the provision contained in section 217(2aa) of the
Companies Act, 1956, the directors of your company confirm :
(A) That in the preparation of the annual accounts for financial year
ended on 31 /03/2009 the applicable accounting standards has been
followed except as explained in point no. 8 hereafter.
(B) that they 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 affair of
the company at the end of the financial year and of the profit or loss
of the company for the year under review.
(C) That they 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 for preventing and
detecting fraud and other irregularities.
(D) That they have prepared the annual accounts on a going concern
basis.
STATUTORY AUDITORS
M/s. Shah Dinesh Dahyalal & Associates, Chartered Accountants,
Ahmedabad.the retiring statutory auditors on this annual general
meeting as per the act. The company has received a letter from the said
auditors to the effect that their appointment shall be within the
limits laid down under section 224(1 B) of the companies act., 1956. A
resolution proposing their reappointment as the regular auditor of the
company for the period from the conclusion of this annual general
meeting up to the conclusion of the next annual general meeting is
required to be passed. Your directors recommend passing the said
resolution.
APPOINTMENT OF THE INTERNAL AUDITOR:
Due to voiume of transaction substantially less and the company being a
sick company the internal auditors have not been appointed for this
year. However once the company resumes normal transaction volumes the
internal auditors will be appointed again. At present the transaction
entered in are under the direct control of management.
AUDITORS OBSERVATION :
The notes to the accounts of the company are self explanatory. However
and clarification from the board of directors on the specific
observation made by the Auditors in their r^Dort are as under"
(1) PREPARTION OF ACCOUNTS ON GOING CONCERN BASIS :
The auditors of the company are of the opinion that due to huge
accumulated losses and complete erosion of the net worth the company,
the accounts of the company is not advised to be written on a going
concern basis. But as the company has now settled all its working
capital dues of banks in the year 2008-09 and is in process to submit a
proper draft rehabilitation scheme in order to restart the production
at its Naroda unit after required capital expenditure and the
management is hopeful for the revival of the company in near future,
hence the company have been written books of account on going concern
basis.
(2) CONFIRMATION OF ACCOUNTS PENDING :
The company has established the system of obtaining conformation of
accounts from various parties. The financial transaction are numerous.
Certain confirmations are pending however the auditors have obtained
all the information and explanations up to their best knowledge and
behalf as were necessary for their purpose of their audit, except
certain non receipt of conformation of balances in respect of loans and
advances, deposits and creditors and form banks and financial
institutions. This in fact does not affect financial statements.
(3) NON OPERATIONAL NARODAPLANT:
The Naroda plant has been non operational since last many years due to
lack of working capital and some changes in technology and other
reasons. However the company has received proposals from one big
industrial house to take the plant on lease/ rental basis for
manufacture of Castor oil as well as the company is in process to
prepare the raft rehabilitation scheme by which the company will
restart the production at its Naroda unit henceforth after required
capital expenditure. The proposals are under active consideration and
if materialized it will not only add the revenue to the company but
also revitalize the plant. Its life, its value, upgrade certain
technology, replace certain parts etc. Hence the market value of old
plant & machineries could be on lower side, the market value of land
and building will offset the losses, so it is the view of the
management to show the plant and machinery at a part of fixed assets in
the balance sheet and not to written off the assets.
(4) NON PROVISION OF SALES TAX LIABILITIES :
The company has made a review application for assessment order under
the Sales Tax act. The company is hopeful of remedial favorable
assessment orders. Once the liabilities is crystallized, it will make
necessary arrangement for its payment and make necessary provision in
the books of account.
(5) INTEREST FREE LOANS AND ADVANCES:
The Company had given certain loans and advances to number of parties
as interest free looking to the then prevailing business interests of
the Company. The Company has been receiving good business orders from
some of such parties still to date. So it is provided to such parties
interest free and upon such terms and conditions as decided by both the
parties. The Management is trying to recover the same either in cash or
in kind and is doing the business with these parties. Other amount has
been received by the company against cash or in kind. Hence no
provisions as Bad loans and advances have been made. The company is
hopeful for its recovery of its outstanding amount and it is trying
commercially to recoverthe loan.
(6) NON COMPLIANCE WITH THE ACCOUNTING STANDARD FOR RETIRE-MENT
BENEFITS WHILE PREPARING FINANCIAL STATEMENTS (15).
As the companys plants are not operational round the year and most of
the employees are temporary or on contractual basis. Due to these
reasons no provisions for retirement benefits are made.
(7) NON COMPLIANCE WITH THE ACCOUNTING STANDARD FOR TAXATION AS 22:
As per Accounting Standard 22 the company is required to create
Deferred Tax Liability / Assets each year. However the management is of
the opinion that due to huge accumulated losses and until the formal
plan for revival / rehabilitation is sanctioned, it is not considered
prudent polity to create Deferred Tax liabilities /Assets.
(8) NON PUBLISHING OF QUARTERLY RESULTS:
The company could not declare un-audited /audited results due to
certain administrative problems but your management has taken care to
publish result and the same are under process.
(9) TRANSFER OF UNPAID/UNCLAIMED DIVIDEND TO INVESTORS EDUCATION AND
PROTECTION FUNDS:
This has been fully explained separately in this report elsewhere under
relevant Para.
(10) NON PAYMENT OF CERTAIN DUES :
As the company is a sick unit and it has not enough funds with it so it
has defaulted in depositing statutory dues towards Provident Fund,
Employees State Insurance, Income Tax deducted at source, Professional
Tax, Sales Tax, Income Tax and municipal Tax, However dues of provident
fund have been cleared , certain municipal tax paid and the company is
gradually settling the old dues. At the same time the company as soon
as it recovers any amount or any surplus amount it deposits with the
separate account maintained forthis purpose.
OTHER OBSERVATIONS:
Other observations made by the auditors are self explanatory in nature
and does not require further clarifications.
FORMULATION OF AUDIT COMMITTEE IN COMPLIANCE WITH THE PROVISIONS OF
SECTION 292AOF THE COMPANIES ACT 1956.
The company has formed an audit committee within the organization under
the Chairmanship of Mr. Vinodchandra Pandya an independent director.
The committee consists of 2 independent directors who are not in any
way related or interested with the promoters or the management. The
company has also appointed professionals as advisors in this committee.
The terms and reference of scope of work for the committee is as per
clause 49 of listing agreement on code for corporate governance.
Further details are given in complete report of corporate governance in
Annexure-Ato this report.
Audit committee has been constituted on 8th October 2008 as under
Mr. Vinodchandra Pandya Chairman, Mr. Bachubhai Patel & Mr. Dhiren K.
Thakkar Member of the committee
EMPLOYEES:
There are no employees of the company who were in receipt of the
remuneration of Rs.24,00,000/- in the aggregate if employed for the
year and in receipt of the Monthly remuneration of Rs.2,00,000/- in the
aggregate if employed for a part of the year under review. Hence the
information required under Section 217 (2A) of the Companies Act, 1956
being not applicable are not given in this report.
STATUTORY IN FORMATION :
The statutory information relating to the Conservation of Energy,
technology absorption, Adoption, Research and Development, Foreign
Exchange Earnings and outgo required to be given as per the provisions
of Section 217 (1) (e) of the Companies Act, 1956 and the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules,
1988 are given herewith in anAnnexureA.
MATERIAL CHANGES:
The company has sold its Meda Adraj unit along with plant and machinery
during the year under audit in the year 2008-09 in order to settle the
dues of secured creditors as a part of revival and rehabilitation
process.
APPRECIATION:
Your Directors take this opportunity to acknowledge the trust reposed
in your company by its Shareholders, Bankers and clients. Your
Directors also keenly appreciate the dedication & commitment of all our
employees, without which the continuing progress of the compahy would
not have been possible.
BY ORDER OF THE BOARD OF DIRECTOR
OF KANEL OIL AND EXPORT INDUSTIERS LTD.
PLACE: Ahmedabad SD/-
DATE: 01/09/2009 (Dhiren K. Thakkar)
Chairman & Managing Director
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Closing Bell: Sensex Ends 158 pts Higher, Nifty Climbs Above 26,000; Hero MotoCorp, HAL Up 2% Each -
Stocks To Buy Today, Dec 4: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Thursday
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