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Golkonda Aluminium Extrusions Ltd.

BSE: 513309 | NSE: | Series: NA | ISIN: INE327C01023 | SECTOR: Aluminium

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Annual Report

For Year :
2015 2014 2013 2012 2011 2010 2009 2008 2006

Director’s Report

Dear Members, The Directors'' hereby present the Twenty Seventh Annual Report on the business and operations of the Company, together with the Audited Statements of Accounts and the Auditors'' Report for the year ended 30th June, 2015. Financial Highlights: (Rs. Million) Current year Previous year Particulars 2014 - 2015 2013 - 2014 Revenue from Operations -- 19.47 Other Income 130.43 2.50 Total Revenue 130.43 21.97 Profit/(loss) before financial 102.82 (10.53) Expenses, Depreciation Financial Expenses 0.13 0.16 Depreciation 8.55 8.22 Profit/(Loss) before Tax 111.50 (18.91) Profit/(Loss) after Tax and prior period 111.50 (18.91) adjustment Dividend: In view of the accumulated losses, no dividend is being recommended for the current year. Results of Operations: As already communicated to the shareholders under the previous annual report that the Company has received communication from the parent company that they will not be able to supply the raw material on credit terms as before and the Company does not have its own financial strength, so the Board of Directors'' in its meeting held on July 08, 2013 decided to close the operation of the unit in order to stop the accumulation of cost and liabilities until an appropriate decision is taken. Presently, the Company ceases to be Sick Industrial Company vide BIFR order no. MA. NO.135/BC/2015 dated 8th June, 2015 as the net worth turned positive as on 31st December 2014. The management is in the process of evaluating available options to rehabilitate the Company. However, the other income of Rs. 130.43 million is mainly because of Reversal of Liability payable to Creditors. Extension of Annual General Meeting: Due to various factors, the Company had stopped production in July 2013. The management & promoters are presently evaluating various options in connection with reviving / rehabilitating the Company. The Company had retrenched all of its 97 workers in 2013-14. Out of the said 97 workers, final settlement has been reached (with mutual agreement) with 39 workers. Under the above Circumstances, the Board feels that some more time will be required to conclude the above said matter and hold the Annual General Meeting meaningfully and smoothly. Hence, the Board requested the Registrar of Companies, Andhra Pradesh and Telangana for 3 months extension for conducting the AGM. The Registrar of Companies, Andhra Pradesh has extended the time up to 31 March 2016. Directors: The Board has appointed Ms. Shruti Agarwal and Mr. Suresh Chandra Agarwal as Additional Independent Directors with effect from 14th May, 2015 and 22nd July, 2015 respectively, to comply with the requirements of Companies Act, 2013. Mr. Anand Bharti, who has been longest in the office, will retire at the ensuing Annual General Meeting and being eligible, offer himself for reappointment. The Board of Directors of the Company has decided to adopt the provisions with respect to appointment and tenure of Independent Directors which is consistent with the Companies Act, 2013 and the amended Listing Agreement. Accordingly, the Independent Directors will serve for not more than two terms of five years each on the Board of the Company. Ms. Shruti Agarwal and Mr. Suresh Chandra Agarwal, being eligible and offering herself/ himself for appointment, is proposed to be appointed as Independent Director for five (5) consecutive years commencing from 30.03.2016. The Board of Directors of the Company at its meeting held on 14thNovember 2015, has subject to the approval of Members, appointed Mr. Anand Bharti as Whole Time Director for a period of one year ending on 31st December 2016. Directors'' Responsibility Statement: As required under Section 134 (5) of the Companies Act, 2013, the Directors hereby confirm that: (i) in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures from the same; (ii) such accounting policies have been selected and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 30th June, 2015 and of the profit or loss of the Company for that period: (iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; and (iv) The annual accounts have been prepared on a going concern basis. (v) the Directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and (vi) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. Auditors: M/s. Laxminiwas & Jain, Chartered Accountants, Auditors of the Company, retire at the ensuing Annual General Meeting and being eligible, offer themselves for re- appointment. Auditors'' Qualifications and Management''s Reply: 1. ''Basis for Qualified Opinion'' of the Audit Report: The Company has accumulated losses of Rs. 161,161,535 as at 30 June 2015 which have exceeded the paid up capital and reserves of Rs. 160,522,805 of the Company at that date. The Company had been declared sick on 9 February 2010 and had made a reference to the Board for Industrial & Financial Reconstruction (BIFR) in terms of Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985. During the year, company ceases to be a sick industrial Company vide order dated 08 June 2015 within the meaning of Section 3(1)(o) of Sick Industrial Companies Act (SICA) as its net worth has turned positive as on 31st December 2014. However as on 30 June 2015, the net worth has turned negative amounting to Rs. 639,730. Considering the financial position of the Company as at 30 June 2015 and the subsequent financial stress caused by the Alumeco Group withdrawing extended credit terms for supply of raw material, there exists significant uncertainty as to whether the Company will be able to continue as a going concern. The Management is in the process of evaluating available options to rehabilitate the Company. The financial results for the year ended 30 June 2015 have been prepared on a going concern basis and do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or, to amounts or classification of liabilities that may be necessary if the Company is unable to continue as a going concern. Management''s Reply: The accumulated loss at the year end is Rs. 161.16 million which is more than 100% of the net worth of the Company. However, during the year, company ceases to be a sick industrial Company vide order dated 08 June 2015 within the meaning of Section 3(1)(o) of Sick Industrial Companies Act (SICA) as its net worth has turned positive as on 31st December 2014. The Alumeco Group, Denmark took a commercial decision to stop extending the facility of supplying raw material on credit to the Company, as was being done in the past. This decision coupled with the accumulated losses in the Company and the prevailing adverse business conditions (on account of liquidity crunch, labour problems, power cuts, poor order book position due to bad economic scenario, credit crunch in the market, etc.), has further strained the financial position of the Company. However, the Board of Directors and the Management of the Company are actively pursuing various available options to rehabilitate the Company and currently believe that the Company would be in a position to continue as a going concern. Hence, these financial statements have been prepared under the going concern assumption. 2. Matter of Emphasis 1. Note 2.25(h) which describes the uncertainty related to the outcome of the lawsuit filed against the Company by the workers regarding settlement of compensation amounting to Rs.10,816,903. Management Reply Till the end of the relevant financial year the Company has settled 39 workers out of 97 workers with mutual agreement on individual basis and the approximate liability regarding settlement compensation for remaining 58 workers is estimated to be Rs. 10.82 million on the basis of earlier settlements. As the amount is not certain at this stage, provision is not made and shown as contingent liability. 2. Note 2.27 (C) with regards to extraordinary item on account of write back of Rs. 96,456,372 (excluding exchange effect) payable to creditors with mutual consent for which direct confirmation is not received. Management Reply During the year, Alumeco Handler services GmbH has waived off the payable amount of Rs. 96.46millions with mutual consent, for which the auditors had received the direct confirmation on later date. 3. Note 2.29 regarding provision of gratuity amounting Rs. 4,945,334 and compensated absences amounting to Rs. 988,708 is provided on actual basis and no actuarial valuation has been made as per the requirement of Accounting Standard -15 - Employee Benefits. Management Reply Since Company has already made application for closure, provision for gratuity and compensated absences has been made on actual basis. As at the end of the year, there is no employee on whom further gratuity liability is to be accrued. Hence no actuarial valuation is being done. 4. As per Sec. 138 of Companies Act, 2013 internal audit has not been carried out by the Company as there were no operations in the company during the year. Management Reply Since the production is closed and there is no other operations in the company. Therefore, the internal audit has not been carried out during the year. Cost Audit: As the production of the company is closed since July, 2013, the Company has not appointed the Cost Auditor for year 2014- 2015. Secretarial Audit: As prescribed by Securities and Exchange Board of India (SEBI), a Practicing Company Secretary carries out Secretarial Audit at the end of every quarter, and the report is regularly submitted to the Bombay Stock Exchange. However, as required under the Companies Act, 2013, the Company has appointed Mr. Raghava Reddy Sadhu, Practicing Company Secretary, as Secretarial Auditor for the year 2014-2015 and his report is annexed to Directors Report as Annexure III. Declaration by independent directors : The Company has received necessary declaration from each independent director under Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Board evaluation Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, Independent Directors at their meeting held on 15th May, 2015 without the participation of the Non-independent Directors and Management, considered/evaluated the Boards'' performance, Performance of the Chairman and other Non- independent Directors. Clause 49 of the Listing Agreement mandates that the Board shall monitor and review the Board evaluation framework. The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual directors. Schedule IV of the Companies Act, 2013 states that the performance evaluation of independent directors shall be done by the entire Board of Directors, excluding the director being evaluated. The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. Policy on directors'' appointment and remuneration: The current policy is to have an appropriate combination of executive and independent directors to maintain the independence of the Board. As on 30th June 2015, the Board consists of 4 members, one of whom is Whole Time Director, one is promoter non-executive director and two are independent directors. The Board will annually evaluates the need for change in its composition and size. The policy of the Company on directors'' appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Sub-section (3) of Section 178 of the Companies Act, 2013, adopted by the Board. The remuneration paid to the directors is as per the terms laid out in the Nomination and Remuneration policy of the Company. Risk Management and Whistle blower Policy Pursuant to section 134 (3) (n) of the Companies Act, 2013 and Section 177(9) of the Companies Act, 2013 read with Clause 49 of the Listing Agreement the Company has to form a Risk Management and Whistle blower Policy respectively. However, as operations of the Company are closed since July 2013, it is not required to form any Risk Management and Whistle blower Policy. Number of meetings of the Board : The Board met six times during the financial year, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013. Public Deposits: The company has not accepted deposits from public as envisaged under Sections 73 to 76 of Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 during the year under review. Corporate Governance: Report on Corporate Governance Pursuant to Clause 49 of the Listing Agreement, and Certificate on Compliance of Corporate Governance form part of this Report. Business Responsibility Report (BRR) Securities Exchange Board of India (SEBI) vide circular CIR/CFD/DIL/8/2012 dated August 13, 2012 has mandated the inclusion of BRR as part of the Annual Report for the top 100 listed entities based on their market capitalization on Bombay Stock Exchange Limited as at March 31, 2014. In view of the requirements specified, the company is not mandated for the providing the BRR and hence do not form part of this Report. Management Discussion and Analysis Report: Management Discussion and Analysis Report as stipulated under Clause 49 of the Listing Agreement is presented in a separate section in this Annual Report. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo: The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows: (A) Conservation of Energy: N.A. (i) the steps taken or impact on conservation of energy; (ii) the steps taken by the company for utilising alternate sources of energy; (iii) the capital investment on energy conservation equipments; (B) Technology absorption: N.A. (i) the efforts made towards technology absorption; (ii) the benefits derived like product improvement, cost reduction, product development or import substitution; (iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year:- (a) the details of technology imported; (b) the year of import; (c) whether the technology been fully absorbed; (d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof; and (iv) the expenditure incurred on Research and Development. (C) Foreign exchange earnings and Outgo: The Company had no foreign exchange earnings and outgo during the financial year. Whole Time Director and Finance Manager Certification: As required, the Whole Time Director and Finance Manager''s Certification is at Annexure-I Material Changes and Commitments affecting the Financial Position of the Company During the year under review the Company has come out of the BIFR purview as the net worth of the Company become positive as on 31st December, 2014mainly because of Reversal of Liability payable to Creditors. In order to improve liquidity and reduce debts, the board of directors has proposed to sell the assets and properties together with its rights, title and interest in the movable, immovable properties (both tangible and intangible) and current assets, to ensure smooth functioning of operations. For the above said purpose, a special resolution for the approval of shareholders by means of postal ballot is under process and the voting period for resolution is from 17/02/2016 (09:00 A.M.) to 17/03/2016 (05:00 P.M.). On 24/12/2015, the Company have settled all the pending issues with the workmen by entering into mutual agreements with the workmen. The Company has paid 30% of the agreed compensation to workmen and balance shall be paid within 3 months. Particulars of Loans, Guarantees or Investments under section 186 As on 30th June, 2015 there were no outstanding loans or guarantees, investments made and securities provided as covered under the provisions of section 186 of the Companies Act, 2013. Contracts and Arrangements with Related Parties All related party transactions that were entered into during the financial year were at arm''s length basis and were in the ordinary course of the business. Your Directors draw attention of the Members to Note 2.27 of Notes on Accounts to the financial statement which sets out related party disclosures. Extract of Annual Return Extract of Annual Return of the Company is annexed herewith as Annexure II to this Report. Particulars of Employees Information as per Rule 5(2) and (3) of Chapter XIII, the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014- details furnished below: Name of the Director / Employee Anand Bharti Designation Whole Time Director Remuneration received 4,20,000/- p.a. Nature of employment, whether contractual or Director otherwise Qualifications and experience of the employee Under Graduate Date of commencement of employment 14/11/2013 The age of such employee 57 years The last employment held by such employee before joining the company NIL The percentage of equity shares held by the employee in the company NIL Whether any such employee is a relative of any director No Notes: 1. There were no confirmed employees on the rolls of the Company as on 30thJune 2015 2. Median remuneration of employees of the Company during the financial year 2014-2015 was NIL. The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013 During the year under review, there was no employee, as the production of the Company is discontinued with effect from July, 2013. Therefore, the reporting requirements under the Sexual Harassment of Women at The Workplace (Prevention, Prohibition & Redressal) Act, 2013 is not applicable. Internal Audit: Since the production of the Company is closed since July 2013, Internal Audit is not carried out during the year. Listing of Securities: The Company is listed on the Bombay Stock Exchange and is regular in paying the annual listing fee to the Stock Exchange. Personnel: During the year under review, there was no employee, as the production of the Company is discontinued with effect from July, 2013. Corporate Social Responsibility [CSR] - Not Applicable Statement on Other Compliances Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review: a. Details relating to deposits covered under Chapter V of the Act. b. Issue of equity shares with differential voting rights as to dividend, voting or otherwise; c. Issue of shares (including sweat equity shares) to employees of the Company. d. Neither the Managing Director nor any of the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries; e. No significant or material orders were passed by the Regulators or Courts or Tribunals, which impact the going concern status and Company''s operations in future; During the year, Alumeco Handlerservices GmbH has waived off the payable amount of Rs. 96.46 millions with mutual consent, which has significant impact on the Financial Statements. Acknowledgments: The Directors acknowledge the contribution made by the employees towards the success of the Company. They thank the Company''s valued customers for their continued patronage. They also acknowledge the support of the shareholders. For and on behalf of the Board of Directors Place: New Delhi Ashish Kumar Gupta Dated: 5th March 2016 Chairman, DIN: 00061551

Director’s Report