Dear Members,
Your Directors have pleasure in presenting the Thirty Third Annual Report of the
Company together with the Audited Financial Statement for the year ended 31st
March, 2023.
1. FINANCIAL AND OPERATIONAL PERFORMANCE
a. Standalone Financial Results
(In Rupees)
Particulars |
Standalone |
|
For the Financial Year ended 31st March, 2023 |
For the Financial Year ended 31st March, 2022 |
Revenue from Operations |
— |
9,80,414 |
Profit/(Loss) before Interest,Depreciation and Tax |
(15,70,953) |
(3,03,13,483) |
Less:Interest |
|
|
Profit/(Loss) before Depreciation andTax |
(15,70,953) |
(3,03,13,483) |
Less: Depreciation and Amortization |
|
|
Profit / (Loss) before Tax |
(15,70,953) |
(3,03,13,483) |
Exceptional Items |
— |
— |
Extra-ordinary items |
— |
— |
Tax expenses |
-— |
-— |
Remeasurements of Net DefinedBenefits Plans |
|
|
Profit / (Loss) after tax |
(15,70,953) |
(3,03,13,483) |
b. Operations:
The Company's total revenue is NIL in F.Y. 2022-23 as compared to Rs. 71,83,674/- in
F.Y. 2021-22. The Company made a loss of Rs. 15,70,953/- in financial year 2022-23 as
compared to loss of Rs. 3,03,13,483/- posted in financial year 2021-22.
The Company had huge loans and interest payments but due to financial constraints the
Company couldn't repay the loans taken from Saraswat Bank. Hence Saraswat Bank vide their
letter dated February 18, 2020 sent to the Company a notice declaring the company as
Non-Performing Asset (NPA) and thereafter the Company handed over the assets of the
Company to Saraswat Bank.
c. Report on Performance of Subsidiaries:
The Company does not have any subsidiary company.
d. Dividend:
Your directors have not recommended any dividend for the financial year ended 31st
March, 2023 and no amount has been transferred to reserves.
e. Transfer to reserves:
During the year under review, the Board of Directors has not recommended transfer of
any amount to reserves.
f. There was no change in the nature of business of company during F.Y. 2022-23.
g. Disclosures under section 134(3)(l) of the Companies act, 2013:
Except as disclosed elsewhere in this report, no material changes and commitments which
could affect the Company's financial position have occurred between the end of the
financial year of the Company and date of this report.
h. Share Capital:
There was no change in the Company's Capital during the year under review.
I. DISCLOSURE OF INTERNAL FINANCIAL CONTROL:
The Internal Financial Control with reference to financial statements as designed and
implemented by the Company are adequate. During the year under review, no material or
serious observation for inefficiency or inadequacy of such controls are reported.
II. PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES:
Full Particulars of Loans & Guarantees Given, Investments made and Securities
provided along with the purpose for which the loan or guarantee or security is proposed to
be utilized by the recipient are provided in the financial statement. (Please refer to
Notes [13 of the Financial Statement.)
III. PARTICULARS OF CONTRACTS/ ARRANGEMENTS/ TRANSACTIONS WITH RELATED PARTIES:
All contracts / arrangements / transactions, falling within the purview of Section 188
of the Companies Act, 2013, entered into by the Company during the financial year with
related parties were in the ordinary course of business and on an arm's length basis. None
of the transactions entered into by the Company with related parties were material in
nature i.e. exceeding the limit 10% of annual turnover of the Company.
The particulars of contracts or arrangements with related parties are forming part of
notes to Accounts in this Annual Report.
All Related party transactions have been placed before the Audit Committee and
subsequently before the Board for its approval. As per the policy on Materiality of and
Dealing with Related Party Transactions, omnibus approval was obtained on annual basis for
transactions which are of repetitive nature. The policy on related party transactions as
approved by the Board of Directors has been uploaded on the website of the Company.
IV. MATTERS RELATED TO CHANGE IN DIRECTORS AND KEY MANAGERIAL PERSONNEL AND DECLARATION
BY INDEPENDENT DIRECTORS:
During the financial year under review:
Directors Retiring by Rotation
Pursuant to the provisions of Section 152 of the Companies Act, 2013, no director is
liable to retire by rotation.
Declaration by Independent Directors:
The Company has received and taken on record the declarations received from all the
Independent Directors of the Company in accordance to Section 149(6) of the Companies Act,
2013 confirming their independence vis-a-vis the Company.
V. DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES:
A. BOARD MEETINGS:
Six (6) meetings of Board of Directors were held during the financial year under review
details of which are furnished in the Corporate Governance report forming part of Annual
report.
B. DIRECTOR'S RESPONSIBILITY STATEMENT:
In terms of Section 134(5) of the Companies Act, 2013, in relation to the audited
Annual Financial Statements of the Company for the financial year ended March 31, 2023,
the Board of Directors hereby confirms that:
a. in the preparation of the annual accounts for the financial year ended 31st March,
2023, the applicable accounting standards have been followed along with proper explanation
relating to material departures.
b. such accounting policies have been selected and applied consistently and the
Directors 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 31st March,
2023, and of the Loss of the Company for that year.
c. proper and sufficient care was taken 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 annual accounts of the Company have been prepared on a going concern basis.
e. internal financial controls have been laid down to be followed by the Company and
that such internal financial controls are adequate and were operating effectively.
f. proper systems have been devised to ensure compliance with the provisions of all
applicable laws and that such systems were adequate and operating effectively.
C. COMMITTEES OF BOARD:
The Company has the following three (3) board level Committees which have been
established in compliance with the requirements of the business and relevant provisions of
applicable laws and statutes:
1. Audit Committee;
2. Nomination and Remuneration Committee;
3. Stakeholders Relationship Committee.
Details with respect to the composition, terms of reference, number of meetings held,
etc. of these Committees are provided in Corporate Governance Report which forms part of
the Annual Report.
D. POLICIES:
(I) Vigil Mechanism Policy:
In compliance of the requirements of section 177 of the Companies Act, 2013, Regulation
22 of Listing Regulations and as measure of good Corporate Governance practice, the Board
has formulated a Vigil Mechanism Policy. The policy comprehensively provides an
opportunity for employees / directors of the Company to raise issue concerning breaches,
accounting policies or any act resulting in financial or reputation loss and misuse of
office or suspected or actual fraud. The policy is adequate safeguard against
victimization.
The Board of Directors of the Company has, pursuant to the provisions of Section 178(9)
of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its
Powers) Rules, 2014, framed "Vigil Mechanism Policy" for Directors and Employees
of the Company to provide a mechanism which ensures adequate safeguards to employees and
Directors from any victimization on raising of concerns of any violations of legal or
regulatory requirements, incorrect or misrepresentation of any, financial statements and
reports, etc. and the same is also hosted on the website of the Company.
The employees of the Company have the right/option to report their concern/grievance to
the Chairman of the Audit Committee.
The Company is committed to adhere to the highest standards of ethical, moral and legal
conduct of business operations.
(II) Risk Management Policy:
The Board of Directors of the Company has designed Risk Management Policy and
Guidelines to avoid events, situations or circumstances which may lead to negative
consequences on the Company's businesses and define a structured approach to manage
uncertainty and to make use of these in their decisionmaking pertaining to all business
divisions and corporate functions. Key business risks and their mitigation are considered
in the annual/strategic business plans and in periodic management reviews.
E. Internal Control Systems:
Adequate internal control systems commensurate with the nature of the Company's
business and size and complexity of its operations are in place and have been operating
satisfactorily. Internal control systems comprising of policies and procedures are
designed to ensure reliability of financial reporting, timely feedback on achievement of
operational and strategic goals, compliance with policies, procedure, applicable laws and
regulations and that all assets and resources are acquired economically, used efficiently
and adequately protected.
VI. AUDITORS AND AUDITOR'S REPORTS:
a. Statutory Auditor and their report:
Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Companies
(Audit and Auditors) Rules, 2014, M/s Raman S. Shah & Associates, Chartered
Accountants, registered with the Institute of Chartered Accountants of India (ICAI)
bearing registration number 119891W, have been appointed as the Statutory Auditors of the
Company, from the conclusion of the Thirty Second Annual General Meeting (AGM) held on 29th
September, 2022 till the conclusion of the Thirty Seventh AGM of the Company, subject to
the ratification of their appointment at every AGM.
M/s Raman S. Shah & Associates has provided their respective consent, certificates
and declaration as required under Section 139 and 141 of the Act and the Companies (Audit
and Auditors) Rules, 2014. The Report of the Auditors on the financial statement for the
year ended 31st March 2023 contains one qualification as under:
Qualification:-
I. Notice is issued by Saraswat Bank dated 18th February, 2020 under section 13(2) of
the Securitization and Reconstruction of Financial Assets and Enforcement of Security
Interest (SARFAESI) Act 2002 for non-payment of principal and interest of Rs. 76.24 Crores
up to 18th February, 2020, after the due date by the company and therefore all loan
accounts became NonPerforming Assets effective from respective dates mentioned in such
notice.
II. As per section 17(5) (h) of CGST Act, 2017, the liability to forego the Input Tax
Credit (ITC) arises when the value of inventory is fully written off from the books of
accounts on impairment of inventory. Taking into consideration the above point, the
Company has failed to reverse the ITC to the extent of inventory written off on account of
impairment. In view of uncertainty, we were unable to determine the impact on the Audited
financial result, of potential adjustment for reversal of ITC. The losses, in our opinion,
would have substantially increased if the Company had provided for the liability of
reversal of Input Tax Credit.
III. According to Ind AS-19, related to employees' benefits, the company has not given
any effect of gratuity liabilities as per actuarial valuation; hence the effect of
gratuity expenses as per Ind AS- 19 is not reported in other comprehensive income. As per
information provided by the company, its operational activities are standstill since
February' 2020 and due to non -availability of key personnel there is no detail available
for actuarial valuation.
IV. The company has shareholding of 33.58% in Paid Up Capital of Techno Point
Mercantile Private Limited. Therefore, Techno Point Mercantile Private Limited is an
associate company within the meaning of Section 2(6) of the Companies Act, 2013; the
company has a significant influence as the Company controls at least 20% voting power of
the other Company. The company has not prepared consolidated financial statement of the
company and Techno Point Mercantile Private Limited which is an associate Company in the
same form and manner as it prepares its own financial statements. The consolidated
financial statement of the Company needs to be laid before the shareholders of the Company
with its own financial statements. However, the company is of the view that there is no
significant influence in determining an associate company with control over voting power,
rather than control over share capital.
V. With reference to Trade Receivables of Rs. 43.78 Lakh as at 31st March, 2023 in the
absence of third party confirmation, reconciliation, if any and other supportive audit
evidence, we are unable to comment upon its balance recoverability, if any.
VI. With reference to Other Current Assets (Security Deposit, Loans and advances to
employees and balances with government authorities) of Rs.4.61 Crores as at 31st March,
2023 in the absence of third party confirmation, reconciliation, if any and other
supportive audit evidence, we are unable to comment upon its balance recoverability, if
any.
VII. With reference to Trade Payable of Rs.8.57 Crores as at 31st March, 2023 in the
absence of third party confirmation, reconciliation, if any and other supportive audit
evidence, we are unable to comment upon its balance outstanding, if any.
Emphasis of Matter
1. We draw attention to the Note No. 10 in the financial Statements. The company has
incurred net loss after exceptional items of Rs. 15.70 Lacs during the year ended 31st
March, 2023 and as of that date, the Company's accumulated losses aggregate to Rs. 62.47
Crores resulting into eradication of entire net worth, negative working capital, loss of
key personnel and negative cash flow. Hence the Company's future performance is doubtful
and has not been able to pay liabilities of banks, creditors. These factors along with
other matters as set forth in said note raise substantial doubt about the company's
ability to continue as a going concern in the foreseeable future.
2. We draw attention to Note 10 of the accompanying financial statements, during the
year under review; the Company incurred huge losses, which resulted into eradication of
entire net worth, negative working capital, loss of key personnel and negative cash flow.
Hence the Company's future performance is doubtful and has not been able to pay
liabilities of banks, creditors.
3. We draw attention to Note No. 3 of accompanying financial result regarding notice
issued by the Saraswat Co-Operative Bank Limited under section 13(2) of the Securitization
and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act
2002 for non-payment of principal and interest thereon after the due date by the company
and therefore all loans accounts became NonPerforming Assets effective from respective
dates mentioned in such notice. These factors along-with other matters as set forth in
said notice raise substantial doubt about the company's ability to continue as a going
concern in the foreseeable future.
In view of the same and events stated in points I, II, III, IV, V, VI and VII in the
para above "Basis for Qualified Opinion", indicate that a material uncertainty
exists that may cast a significant doubt on the Company's ability to continue as a going
concern. (Note No. 30 of accompanying financial statements)
Reply to the qualification: -
Notice is issued by Saraswat Bank dated 18th February, 2020 under section 13(2) of the
Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest
(SARFAESI) Act 2002 for non-payment of principal and interest of Rs. 76.24 Crores up to
18th February, 2020, after the due date by the company and therefore all loan accounts
became NonPerforming Assets effective from respective dates mentioned in such notice.
The Company is in negotiation with Banks to grant loan and overdraft facilities.
Further Company is exploring possibilities of receiving investments in order to get
sufficient funds to run the business.
The Company is hopeful to revive its business and start full fledge operations in near
future.
Management's Responsibilities for the Standalone Financial Results
The Statement has been prepared on the basis of the standalone annual financial
statements. The Board of Directors of the Company are responsible for the preparation and
presentation of the Statement that gives a true and fair view of the net loss and other
comprehensive income of the Company and other financial information in accordance with the
applicable accounting standards prescribed under Section 133 of the Act read with relevant
rules issued thereunder and other accounting principles generally accepted in India and in
compliance with Regulation 33 of the Listing Regulations. This responsibility also
includes maintenance of adequate accounting records in accordance with the provisions of
the Act for
safeguarding of the assets of the Company and for preventing and detecting frauds and
other irregularities; selection and application of appropriate accounting policies; making
judgments and estimates that are reasonable and prudent; and the design, implementation
and maintenance of adequate internal financial controls, that were operating effectively
for ensuring the accuracy and completeness of the accounting records, relevant to the
preparation and presentation of the Statement that give a true and fair view and are free
from material misstatement, whether due to fraud or error.
In preparing the Statement, the Board of Directors are responsible for assessing the
Company's ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless the Board
of Directors either intends to liquidate the Company or to cease operations, or has no
realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the Company's financial
reporting process.
b. Secretarial Auditor and their Report
The Board had appointed Ms. Divya Mohta, Practicing Company Secretary as Secretarial
auditors for the financial year 2022-23. Secretarial Audit Report issued by Ms. Divya
Mohta in form MR-3 for the FY 2022-23 forms part of this report and marked as Annexure I.
There were certain qualifications, observations, reservation or comments or other remarks
in the Secretarial Audit Reports which are self-explanatory.
Reply to the qualification: -
Notice is issued by Saraswat Bank dated 18th February, 2020 under section 13(2) of the
Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest
(SARFAESI) Act 2002 for non-payment of principal and interest of Rs. 76.24 Crores up to
18th February, 2020, after the due date by the company and therefore all loan accounts
became NonPerforming Assets effective from respective dates mentioned in such notice.
As per requirements of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, the Company needs to appoint Independent Directors, Women
Director, KMPs and Company Secretary.
Further Listing Fees for BSE Limited and Depositories needs to be paid.
The Company is in negotiation with Banks to grant loan and overdraft facilities.
Further Company is exploring possibilities of receiving investments in order to get
sufficient funds to run the business.
The Company is committed to fulfil the requirement of law as soon as sufficient funds
are available to the Company.
VII. ANNUAL EVALUATION:
The Board evaluated the effectiveness of its functioning and that of the Committees and
of individual directors by seeking their inputs on various aspects of Board/Committee
Governance.
The aspects covered in the evaluation included Board Composition, Strategic
orientation, Board Functioning and Team Dynamics, leadership style, contribution to and
monitoring of corporate governance practices, fulfilment of Directors' obligations and
fiduciary responsibilities, including but not limited to, active participation at the
Board and Committee meetings.
The Nomination and Remuneration Committee considered and discussed the inputs received
from the Directors and outcome of such evaluation process was satisfactory, which
reflected the overall engagement of the Board and its Committees with the Company.
Further, the Independent Directors at their meeting, reviewed the performance of Board,
Chairman of the Board and of Non- Executive Directors.
VIII. DISCLOSURE OF REMUNERATION PAID TO DIRECTOR AND KEY MANAGERIAL PERSONNEL AND
EMPLOYEES:
Information required pursuant to Section 197 (12) of the Companies Act, 2013 read with
Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 is not applicable as not remuneration is paid.
IX. FRAUD REPORTING:
During the year under review, there was no material or serious instances of fraud
falling within the purview of Section 143 (12) of the Companies Act, 2013 and rules made
thereunder, by officers or employees, reported by the Statutory Auditors of the Company
during the course of the audit conducted.
X. OTHER DISCLOSURES:
Other disclosures as per provisions of Section 134 of the Act read with Companies
(Accounts) Rules, 2014 are furnished as under:
a. Extract of Annual Return:
As required pursuant to Section 92(3) of the Companies Act, 2013 and rule 12(1) of the
Companies (Management and Administration) Rules, 2014, an annual return is uploaded on
website of the Company.
b. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and
Outgo:
The particulars as required under the provisions of Section 134(3)(m) of the Companies
Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of
conservation of energy, technology absorption, foreign exchange earnings and outgo etc.
are furnished in Annexure V which forms part of this Report.
c. Corporate Governance and Management Discussion & Analysis Reports:
The Company is committed to maintain high standards of Corporate Governance and adheres
to its requisites set out by the respective authorities. The report on Corporate
Governance as stipulated under the Listing Regulations is annexed vide Annexure III and
forms an integral part of this Annual Report.
Certificate issued by Managing Director and Chief Executive Officer of Company with
regard to certification on Audited Financial Statement of the Company for financial year
2021-22 is also annexed herewith vide Annexure IV and forms an integral part of this
Annual Report.
The Company has laid down the Code of Conduct for all Board Members and Senior
Management personnel of the Company.
Management Discussion and Analysis Report for the year under review, as required
pursuant to the provisions of Regulation 34 read with Schedule V (B) of Listing
Regulations is annexed herewith vide Annexure II and forms part of this Annual Report.
d. General Disclosures:
Your Directors state that no disclosure or reporting is required in respect of the
following items as there were no transactions pertaining to these matters during F.Y.
2022-23:
Details relating to acceptance of deposits covered under Chapter V of the Companies
Act,2013.
a. Issue of equity shares with differential rights as to dividend, voting or otherwise.
b. Issue of shares (including sweat equity shares and ESOS) to employees of the Company
under any scheme.
c. Instances with respect to voting rights not exercised directly by employees of the
Company.
d. The Managing Director nor the Whole-time Directors of the Company have received any
remuneration or commission from its wholly owned subsidiary Company/ subsidiary.
e. Your Directors further state that:
f. 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.
g. There was no change in the nature of business of company during F.Y. 2021-22.
h. Pursuant to the provisions of Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013, no case pertaining to sexual harassment at workplace
has been reported to company during F.Y. 2022-23.
i. Reinstatement of the financial statements of the previous financial years.
XI. CAUTIONARY STATEMENT:
Statements in the directors' and management discussion and analysis describing the
company's objectives, projections, estimates, expectations or predication may be
"forwardlooking statements' within the meaning of applicable securities laws and
regulations, actual results could differ materially for those expressed or implied,
important factors that could make difference to the company's operations include raw
material availability and its prices, cyclical demand and pricing in the company's
principle markets, changes in government regulations, tax regimes, economic developments
within India and the countries in which the company conducts business and other ancillary
factors.
XII. ACKNOWLEDGEMENTS AND APPRECIATION:
Your Directors take this opportunity to thank its customers, shareholders, suppliers,
bankers, business partners/associates, financial institutions and Central and State
Governments for their consistent support and encouragement to the Company.
Your Directors record with sincere appreciation the valuable contribution made by the
employees at all levels and looks forward to their continued commitment to achieve further
growth and take up more challenges that the Company has set for the future.
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