To, The Members,
Your directors have pleasure in presenting their twenty-first Annual Report on the
business and operations of the company together with the Audited Statement of Accounts for
the year ended 31st March 2019.
Financial Highlights
Performance of your company is as under:
|
|
(Rupees in Lakhs) |
PARTICULARS |
For the year ended 31.03.2019 |
For the year ended 31.03.2018 |
|
(Audited) |
(Audited) |
Total Income |
198.25 |
0.11 |
Profit /(Loss) before Depreciation & |
|
|
Tax (PBDT) |
(40.04) |
(35.41) |
Less : Depreciation |
1.28 |
1.28 |
Profit / Loss before Tax |
(41.32) |
(36.69) |
Less: Provision for Taxation / Current Taxation |
- |
|
Deferred Tax (Asset) / Liability |
|
- |
Profit / Loss After Tax |
(41.32) |
(36.69) |
Prior Period Adjustment |
- |
- |
Income Tax for earlier year's |
- |
- |
Dividend and TDS Written Back |
- |
- |
Profit / Loss brought forward: |
|
|
From previous year |
(23591.32) |
(23,554.63) |
Profit / Loss carried to |
|
|
Balance Sheet |
(23632.64) |
(23591.32) |
The Members may note that we are unable to present the Consolidated Financial Results
of our material Subsidiary Shree Maheshwar Hydel Power Corporation Limited
("SMHPCL") in view of the "Management Dispute" as marked by the
Registrar of Companies, Madhya Pradesh (Gwalior).
Dividend
Directors do not recommend any Dividend.
SUBSIDIARY COMPANIES
The Company has 3 Subsidiaries namely a. Shree Maheshwar Hydel Power Corporation
Limited (SMHPCL)- Management Dipsuted. b. Ennertech Biofuels Limited (EBL) c. Rajasthan
Solar Power Company Private Limited (RSPCPL).
As stated in the director's report that abetment of the board of SMHPCL with illegal
acts of PFC caused your Company loss of ownership of Shares in SMHPCL from 58% to 12% with
a corresponding ownership in favour of PFC/Lendersfrom Zero to 51%.
While the release of ROC Report was awaited and SMHPCL continued as a "Management
Disputed" Company, PFC continued with their illegal acts like: causing false accounts
to be prepared by its appointed KMPs of SMHPCL for years March 2016 and 2017; held Annual
general meetings in December 2016 without circulation of Notice for the meeting and
Financial Statements to all the Members; did not allow entry to the venue of the meeting
to your Company's Authorised Representative etc. Your Company, as Holding Company was not
able to consolidate the audited results of the Subsidiary.
CHANGES IN THE NATURE OF BUSINESS
There is no change in the nature of business of the Company during the year. CHANGE OF
THE REGISTERED OFFICE OF THE COMPANY
The Registered Office of the Company was earlier situated at "606, 6th Floor,
Raheja Chambers Free Press Journal Marg, Nariman Point Mumbai Mumbai City MH 400021".
The Board of Directors approved the change of Registered Office within the local limits to
99 Nirajan Ground Floor, Marine Drive, Near R.O.C. Building, Mumbai 400 002, India
with effect from 9th May, 2018. The shifting of the Registered Office as aforesaid is in
the best interests of the company, its shareholders and all concerned.
SHARE CAPITAL
There was no change in share capital of the Company during the year under review.
TRANSFER TO RESERVE During the year, the Company has not transferred any amount to
reserves PUBLIC DEPOSITS
The Company has not accepted any deposits from the public within the meaning of Section
73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules,
2014.
BOARD MEETINGS
The Company as for the reason stated in "Management Discussion and Analysis
Report" did not have proper board composition Board in major part in last year under
consideration. Hence the details of the Board meetings cannot be given in the Corporate
Governance Report which forms part of this Annual Report. The intervening gap between any
two Meetings were also not within the period prescribed under the Companies Act, 2013.
COMMITTEES OF THE BOARD OF DIRECTORS
As stated above that the Composition of Board as well as committees were not in place
details of Committees of Board of Directors along with their terms of reference,
composition and meetings held during the year, cannot be included in the Corporate
Governance Report, which forms part of this Annual Report. EXTRACT OF ANNUAL RETURN An
extract of the annual return pursuant to Section 92(3) of the Companies Act, 2013 read
with the Companies (Management and Administration) Rules, 2014 in Form MGT-9 is annexed
herewith as forming part of this report.
CORPORATE GOVERNANCE REPORT
Corporate Governance report as required under Regulation 34 of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 cannot be set out in the Annual
Report as due to non formation of committee and board was not in place for the Year for
reasons stated in "Management Discussion and Analysis Report".
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received individual declaration from all the Independent Director(s) of
the Company stating that they meet the criteria of independence as provided under Section
149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015.
AUDITOR
Pursuant to the provisions of Section 139 of the Act and the rules framed thereunder,
the Auditors M/s. SKHD & Associates, Chartered Accountants (Firm Reg. No.
105929W) who were appointed as statutory auditors of the Company at 21st Annual General
Meeting (AGM) of the Company at a remuneration (including term of payment) to be fixed by
Board of Directors of the Company, plus service tax and such other tax(es), as may be
applicable & reimbursement of all out-of-pocket expenses in connection with the audit
of the accounts of the Company. The Company has received confirmation from M/s. SKHD &
Associates, Chartered Accountants that they are not disqualified from continuing as
Auditors of the Company.
No Fraud has been reported by Auditors under section 143(12) of the Companies Act, 2013
for the Financial Year 2018-19.
SECRETARIAL AUDITOR:
The Company has not appointed any Practicing Company Secretary to conduct Secretarial
Audit of the Company for the financial year 2018-19, in terms of provisions of Section 204
of the Companies Act, 2013. As the Company had no committee's or board in place for the
reasons stated in "Management Discussion and Analysis Report".
BOARD REPLY ON OBSERVATION IN AUDITORS REPORT
1) Investment in Subsidiary Companies
The Auditors are unable to get Comment on the investment of the Company in its
subsidiary company named Shree MaheshwarHydel Power Corporation Limited(SMHPCL). The
shares of SMHPCL were pledged with its Lenders with Power Finance Corporation (PFC) as its
lead lender. These pledged shares were invoked by PFC on 2nd December, 2016, but due to
dispute the Company has continued to show shares of SMHPCL under the head Investment.
MANAGEMENT RESPONSE
In response to the complaint made in January 2016 on mismanagement of affairs of SMHPCL
by PFC, the ROC, after getting directions from the Ministry of Corporate Affairs (MCA),
inspected SMHPCL under Sec 201(1) / (4) of the Companies Act, 2016 after marking it as
"Management Disputed." Fearing actions against PFC and its nominated officials
by MCA, PFC filed a false petition u/s 241, 242 and 244 of the Companies Act, 2013 before
the Hon'ble NCLT,Ahmedabad ("NCLT"). The NCLT dismissed the petition of PFC as
non-bona fide and held many of PFC's actions illegal. .Instead of going for a negotiated
settlement with us as directed by the NCLT, PFC preferred to file an appeal in August 2017
before the Hon'ble NCLAT, who dismissed PFC's appeal without granting any relief and
directed the Government of India and the Government of Madhya Pradesh to intervene to save
the asset of national importance. Against the NCLAT Order PFC preferred an Appeal in the
Supreme Court which also was dismissed. It may be noted that we have filed a petition u/s
241, 242, 244 and 59 of the Companies Act, 2013 before the NCLT, Ahmedabad along with a
claim for damages of INR 16000 Crs against PFC. In view of the said dispute the Company
continues to show the said assets in its books at Cost Rs 6,152,990,000 as the same are
Long term Strategic Investment. In respect of Investment in other Subsidiary's amounting
to Rs 1,01,00,000 the Company's is of the Opinion that there is no Diminution in value of
investment and hence continues to carry at cost.
2) Loan fromBank
The Company has not made any provision of interest liabilities amounting to Rs.
13,702.59 Lakhs, for the Financial Years 2018-2019 further there is non receipt of
Confirmation of M/s. Edelweiss Asset Reconstruction Company Ltd. (EARCL) , who have been
absolutely assigned all rights and interests in the financial assistance of the Company,
vide Assignment Agreement dated 28.03.2014 in respect of the Loan which was taken in the
earlier years by the Company from Central Bank of India, based on management estimates the
liability that exists in the books of accounts would be sufficient to meet the proposed
One Time Settlement (OTS) which will be negotiated with EARCL. The Company has also not
booked total interest on the said loan till 31st March 2019 amounting to Rs53,677.66Lakhs.
MANAGEMENT RESPONSE
The Company in its earlier year had taken loan from Central Bank of India (CBI), due to
non repayment of said loan CBI has assigned the said loan to M/s. Edelweiss Asset
Reconstruction Company Ltd. (EARCL). The Company has non booked interest on the said loan
amounting to Rs. 13,702.59 Lakhs for the Financial Years 2018-2019 and total interest not
booked is Rs 53677.66 Lakhs till 31st March 2019 based on management estimates the
liability that exists in the books of accounts would be sufficient to meet the proposed
One Time Settlement (OTS) which will be negotiated with EARCL. Further as the said loan is
a Non Performing Asset Confirmation in the said regards is also not available.
3) Deposit Given
The Company has not made any provision in respect of Deposit given to one of the party
which is shown under the head Long term loans and advances amounting to Rs 20,00,00,000.
The said deposit is given for occupying rent free area in the proposed newly constructed
building. However the said project is still on hold by the developer but the management is
hopeful of its performance in near future.
MANAGEMENT RESPONSE
The Company has given deposit given to one of the party which is shown under the head
Other Financial Assets amounting to Rs20,00,00,000. The said deposit is given for
occupying rent free area in the proposed newly constructed building. However the said
project is still on hold by the developer but the management is hopeful of its performance
in near future
4) Confirmations
Balances under the heads borrowings, Other Financial Liabilities, Trade Payable, Loans,
Other Financial Asset, Trade receivable, Other Financial Assets and Fixed Deposit and
three Bank Account being dormant are subject to confirmation and reconciliation, if any,
from the respective parties and consequential reconciliation.
MANAGEMENT RESPONSE
Balances under the heads borrowings, Other Financial Liabilities, Trade Payable, Loans,
Other Financial Asset, Trade receivable, Other Financial Assets and Fixed Deposit and
three Bank Account being dormant are subject to confirmation and reconciliation, if any,
from the respective parties and consequential reconciliation - Amount presently
unascertainable. However the Company does not expect any material impact of the same.
5) Provisionfor Doubtful Recoveries
The Company has not provided for Loans, Non-current Other Financial Asset comprising of
receivable from holding company and Trade Receivables amounting to Rs 80.98 Lakhs, Rs
6,779.55 Lakhs and Rs 423.78 Lakhs respectively against which no recovery has been done.
MANAGEMENT RESPONSE The Company has not made provision for group Company balances in
respect of Loans, Non- current Other Financial Asset comprising of receivable from holding
company and Trade Receivables amounting to Rs 80.98 Lakhs Rs 6779.55 Lakhs and Rs 423.78
Lakhs respectively against which no recovery/ performance has been done as the management
is of the view that the said balances are good and would recovered once the group power
project is revived.
6) Going Concern
The Company has been incurring constant losses further the Company is a Holding Company
of Shree Maheshwar Hydel Power Corporation Limited, the said has limited development due
to various reasons further there are legal cases going on by and against the Company,
further the Company has also been discontinued its business operation it has also been
facing cash-flow mismatches, if the said project is not revived than the going concern
assumption might get impacted.
MANAGEMENT RESPONSE
The Company has been incurring constant losses further the Company is a Holding Company
of Shree Maheshwar Hydel Power Corporation Limited, the said has limited development due
to various reasons further there are legal cases going on by and against the Company. The
group is confident that the legal cases outcome would be in the favour of the Company and
the project would revive there by Company would still continue as a going concern.
7) The Company was not in the position to pay listing fees hence the exchange has
suspended its share trading. Further the Company has also received notices from both the
exchanges for non- compliance with the listing terms and for non-payment of listing fees.
The Company approached SAT against the delisting order of NSE and presented all the
factual positions pertaining to the matter. SAT upheld the Appeal and directed NSE to
reconsider their delisting order.
MANAGEMENT RESPONSE
The Company was not in the position to pay listing fees hence the exchange has
suspended its share trading. Further the Company has also received notices from both the
exchanges for non- compliance with the listing terms and for non-payment of listing fees.
The Company is arranging for funds to comply with it. The Company has filed appeal in
Securities Appellate Tribunal against Delisting Order by National Stock Exchange.
8) The Company does not have Company Secretary as well as CFO, which is not in line
with Section 203 of the Act.
MANAGEMENT RESPONSE
The Company which states that the company does not have Company Secretary as well as
CFO, which is not in line with Section 203 of the Act. The Company is in Process of
complying with it the Company is regularly in posting advertisements in search of Company
Secretary.
9) The Company has not carried out Internal Audit as well as Secretarial Audit as
required under the
AuditfurthertheCompanyhasalsonotstrictlynotcompliedwithProvisionsofCompaniesAct.
MANAGEMENT RESPONSE The Company has not carried out Internal Audit as well as Secretarial
Audit as required under the Audit further the Company has also not strictly not complied
with Provisions of Companies Act. Hence forth the same would be complied with.
10) The Company has adopted Ind-AS for the first time, however, as required under
Ind-AS 101 - First time adoption of IND-AS, to value and book all its financial assets and
financial liabilities at fair market values, the Company has carried all its financial
assets and financial liabilities at deemed cost which is not in line with the aforesaid
IND-AS, consequential impact of which is unascertainable.
MANAGEMENT RESPONSE
The Company which states that the Company has adopted Ind-AS for the first time,
however, as required under Ind-AS 101 - First time adoption of IND-AS, to value and book
all its financial assets and financial liabilities at fair market values, the Company has
carried all its financial assets and financial liabilities at deemed cost as the Company
does not contemplate a major impact of It on the Financial Statement.
11) The Company during the year under review has identified and written back Trade
Payable and other Payables which are pending for more than 3 years amounting to Rs 198.09
Lakhs as the Company is of the opinion that the said balance are no longer payable.
However there are no documentation or confirmation from the said party for waiver of their
amount thereby overstating loss of the Company and understating Trade payable and Other
Financial Liability to the above extent.
MANAGEMENT RESPONSE
The Company during the year under review has identified and written back Trade Payable
and other Payables which are pending for more than 3 years amounting to Rs 198.09 Lakhs as
the Company is of the opinion that the said balance are no longer payable.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The Company has not given any loans or guarantees or made investment beyond the limits
mentioned under the provisions of Section 186 of the Companies Act, 2013. Details of loans
granted, guarantees provided and investments made by the Company are provided in the
financial Statement.
PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, EXPENDITURE ON RESEARCH AND
DEVELOPMENT & FOREIGN EXCHANGE EARNINGS AND OUTGO
a) Consumption of Energy : Not Applicable
b) TechnologyAbsorption, Research & Development (R&D)
(i) Technology imported and absorbed : NIL(Previous year Nil)
(ii) Expenditure on R&D : NIL(Previous year Nil)
c) Foreign exchange earnings and outgo
(i) Foreign exchange earnings : NIL (Previous year NIL)
(ii) Foreign exchange outgo : NIL (Previous year NI)
RELATED PARTY TRANSACTIONS
During the year under review, there were no contracts or arrangements made with related
parties as defined under Section 188 of the Companies Act, 2013. There were no materially
significant related party transactions made by the Company with Promoters, Directors, Key
Managerial Personnel or other designated persons, which may have a potential conflict with
interest of the Company at large.
RISK MANAGEMENT POLICYAND INTERNALADEQUACY
Your Company has in place a mechanism to identify, assess, monitor and mitigate various
risks to key business objectives. Major risks identified by the businesses and functions
are systematically addressed through mitigating actions on a continuing basis. Your
Company's internal control systems are commensurate with the nature of its business, size
and complexity of its operations. These are routinely tested by Statutory Auditors.
Significant audit observations are brought in notice of the management.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has established a vigil mechanism to provide a framework to promote
responsible and secure whistle blowing and to provide a channel to the employee(s),
Directors and other stakeholders to report to the management, concerns about unethical
behaviour, actual or suspected fraud or violation of the code of conduct or policy/ies of
the Company, as adopted/framed from time to time. The details of said vigil mechanism are
given in Corporate Governance Report, which forms part of this Annual Report. The Whistle
Blower Policy has been uploaded on the Company's website i.e. www.entegra.co.in
CORPORATE SOCIAL RESPONSIBILITY
The Company understands and values Corporate Social Responsibility (CSR) initiatives of
the Government and has also noted the requirements of CSR activities in terms of Companies
Act, 2013. The requirement of mandatory implementation of CSR activity is not applicable
to your company due to inadequacy of profits in past three financial years.
INTERNALFINANCIAL CONTROLS
Your Company has in place adequate internal financial controls with reference to
financial statements. During the year under review, such controls were tested and no
reportable material weaknesses were observed.
WTD CERTIFICATE:
As no proper composition wasin place of board or committee till 25th March 2019 no such
certification on financial reporting and Internal Controls was obtained as required in
terms of SEBI (Listing Obligations and Disclosure requirements) Regulations, 2015. The
Whole Time Director also gives quarterly certification on financial results before the
Board in terms of Regulation 33(2) of the SEBI(Listing Obligations and Disclosure
requirements) Regulations,2015 in view of the above was also not obtained.
DIRECTOR'S RESPONSIBILITY STATEMENT
Pursuant to the requirements of Section 134(5) of the Companies Act, 2013, with respect
to Directors' Responsibility Statement it is here by confirmed that:
(a) in the preparation of the annual accounts for the financial years ended 31st March,
2019 the applicable accounting standards have been followed along with proper explanation
relating to material departures, if any;
(b) the Directors 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 affairs of the Company as at 31st March, 2019, and of the
profit/ loss of the Company for that period;
(c) the Directors have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Companies Act, 2013 for
safeguarding the assets of the Company and for preventing and detecting fraud and other
irregularities;
(d) the Directors have prepared the annual accounts for the financial year ended 31st
March, 2019 on a going concern basis;
(e) the Directors have laid down internal financial controls to be followed by the
Company and that such internal financial controls are adequate and were operating
effectively; and
(f) the Directors have devised proper systems to ensure compliance with the provisions
of all applicable laws and that such systems were adequate and operating effectively
except irregularities as happened due to non-composition of proper board and committee.
ACKNOWLEDGEMENTS
Your Directors would like to convey their appreciation to all associated with the
Company for their efforts and contribution during the year. Your Directors would like to
thank and place on record their appreciation for the continued support and co-operation
provided to your Company by its Shareholders, customers, suppliers, regulatory
authorities, Auditors and its bankers.
|
By Order of the Board of Directors |
|
For Entegra Limited |
|
Sd/- |
|
Mukul Kasliwal |
|
Chairman |
Place Mumbai |
|
October 1, 2019 |
|
|