Mar 31, 2016
The Directors present their Thirty Second Annual Report and Audited Financial Statements for the financial year 2015-16.
1. Financial Summary/highlights on Performance of the Company (Standalone)
(Rs. in million)
Description |
Year Ended March 31, 2016 |
Year Ended March 31, 2015 |
Revenue from Operations |
- |
- |
Other Income |
3.02 |
0.16 |
Total Revenue |
3.02 |
0.16 |
Operational Expenses |
- |
- |
Employee Benefit Expenses |
3.63 |
6.47 |
Interest and Finance Charges |
0.00 |
0.00 |
Depreciation and Amortizations |
0.21 |
0.38 |
Other Expenses |
11.82 |
8.29 |
Total Expenses |
15.66 |
15.14 |
Profit/(Loss) before exceptional items |
(12.64) |
(14.98) |
Exceptional Items |
- |
5587.67 |
Profit/(Loss) for the year |
(12.64) |
(5602.65) |
2. Dividend
As there is no operating income and consequently, no profit is available for distribution as dividend.
3. Reserves
The Company is not having any income and therefore there is no surplus available to be carried forward to Reserves.
4. Brief description of the Company''s working during the year/ State of Company''s affair
- Company''s operation during the year
It has been evident since long that the business operations of the Company have come to a standstill and Directors have been regularly reporting the reasons for the same.
It is reiterated that the SEBI vide its final order dated 23rd October, 2013, issued against the Company, after the prolonged investigation of approx. two years, restricted the Company from entering into the securities market and altering its capital structure, in any manner effectively for period of eight years from the date of the order. The Company has already gone through approx. half of the prohibition period as imposed by the SEBI. Your Company, however has challenged the aforesaid order of SEBI at Securities Appellate Tribunal in December, 2013. Approx. three years have elapsed since then, and the matter is still ongoing before the Tribunal. The prohibition period of approx. five years has almost abolished any chances of survival of the Company and its project.
The shareholders would appreciate that despite adverse circumstances your Company has always complied with various statutory requirements under different laws, rules and regulations, dealings with the litigations and other day to day administrative activities. Your Company has paid all the statutory dues to various statutory authorities, without fail, despite no revenue generation at all in past years. Your Company being listed entity having a wide shareholder base of approx. 1.80 lakh, incurs huge costs of compliances and apart from it also meets a considerable amount of litigation and legal expenses. Since in the previous 7 to 8 years the Company has not booked any income or generated any revenue at all, arranging such huge amount of funds has been a cause of concern.
Presently the single source of the funding to the Company is through one of the related party and promoter Company M/s Nyra Holdings Private Limited. The Inter Corporate Loan being taken by your Company from Nyra Holdings to manage its day to day operation, compliances and litigation expenses cannot be Interest free as per the prevailing provisions of the Companies Act, 2013. Company has raised this issue before the regulators viz., Securities and Exchange Board with a copy to the Registrar of Companies and explained them about the constrained situation of the Company, with prayers, that an exemption be granted to the Company from making its compliances till the SEBI prohibition is lifted and to allow M/s Nyra Holdings Private Limited to give interest free loans to the company without considering the same to be a default of the provisions of the Companies Act, 2013 and also to modify the SEBI order dated 23rd October, 2013 and permit the current promoters (M/s Nyra Holdings Private Limited, in specific) to induct capital / funds against issue of equity. The Company has received no reply till date even after sending several reminders.
Further, to reiterate, the Company''s operation has come to a standstill and no development could be made towards implementation of the project of the Company. The contracts and the agreements which were entered by the Company w.r.t the implementation of the refinery project have also lapsed or expired long back. Capital advances, which were made at the implementation stage of the project are either not recoverable or specific performance against the said advances cannot be enforced. The Board of Directors after analyzing the aforesaid situation and also based on the opinion received from legal firms, had decided to write off various advances, land and pre-operative expenses etc. from the balance sheet of the Company in the year 2014-15, to give true and fair picture of the financial statement. The Board further considered that carrying such advances which have no material value or relevance to the books of accounts would be inappropriate and would not give a true and fair view to the investors/shareholders of the Company.
However, such writing off of aforesaid advances, land and pre-operative expense had resulted in substantial change in the profit/loss of the Company and had a huge impact on the Net worth of the Company, which is now completely eroded. The Auditors have pointed this out in their Report of the previous year and in this year too and have qualified their opinion regarding the Going Concern issue, and the Board has given their comment on the said qualification of Auditor''s in the later part of this Report.
Investigation of Serious Fraud Investigation Office (SFIO)
As reported in the previous year that the Serious Fraud Investigation Office (SFIO) had initiated an investigation into the affairs of the Company under section 212 of the Companies Act, 2013, the investigation is relating to the issuance of GDRs by the Company in the year 2007 and the proposed GDR issue in the year 2011.
Your Company has provided all the requisite information and necessary support to the investigation team and have also provided all the documents as enquired by them from time to time. The Investigation is still ongoing and have not yet reached to the conclusion.
Notices u/s 148 of the Income Tax for the A.Y. 2008-09 and 2009-10 for the Income Escaping Assessment U/s 147 of the Income Tax Act, 1961
Your Company had received Notices u/s 148 of the Income Tax for the A.Y. 2008-09 and 2009-10 for the Income Escaping Assessment U/s 147 of the Income Tax Act, 1961.
The Notice was in respect of assessment/re-assessment, recomputing of the Loss/Depreciation of the Company for the said Assessment Years. As per the requirement of the Section 147 and Section 148 of the Income Tax, 1961, the authority has also provided the reasons for re-opening the case for both of the Assessment years.
The Company had challenged the aforesaid reasons for re-opening of the case and fought this matter on all the possible ground available to the Company, including filing of writ petition in the Hon''ble High Court of Delhi, which was later on, upon instructions, withdrawn with liberty to urge all points of the petition at appropriate forum in accordance with law.
Later, in due course of assessment, for the A.Y. 2009-10 the A.O had passed an order dated 28/03/2016 stating that the advances in subject matter given by the Company is not made for the business purpose of the Company and therefore the Capital Work In Progress must be reduced by Rs. 464.97 crores. A.O. has also observed that the expense has not been booked in P&L A/c, therefore no addition is being made to income of the assesse on this ground. This Order has been challenged by the Company at the appropriate forum, under Section 246A(1)(b) of the Income Tax Act, 1961.
However, the assessment proceedings of A.Y. 2008-09, has been referred by the A.O. to the Transfer Pricing officer and it is yet to attain the finality.
- Status of project
As your Directors have been reporting since long, that the Company''s Crude Oil Refinery, which was proposed in 2007 at Haldia (West Bengal) with a capacity of 5 MMTPA, has become unviable due to non-availability of funds, restrictive order of SEBI, pending litigations, and unrecoverable advances paid to suppliers on account of non-fulfillment of financial obligations by company in time. As considerable time has lapsed the prospect of the project revival has also been bleaked. A detailed discussion in this respect was also presented in the previous year''s report, including a discussion on the allotment of land admeasuring about 400 acres at Haldia by Haldia Development Agency (HDA), West Bengal, Environmental clearances, Civil construction etc. Considering that the situation has not been changed much, no such discussion is again included in this report.
- Future outlook
As reported above that the Company has filed an appeal against the final order of the SEBI dated 23rd October, 2013 in Securities Appellate Tribunal, which has not yet attained the finality. The Company''s future is entirely dependent on the outcome of the SAT proceedings. In the current adverse circumstances any discussion on the project implementation is a futile and meaningless exercise as with passage of time your Company has survived almost half of the restrictive order of SEBI, and the chances of the revival of the project are bleak.
The previous contracts, agreements which were entered into w.r.t the implementation of refineries, have expired long back and now not in force. At this moment the Company has no operational project and no operational revenues accrue to the Company. Hence the future of the Company is completely dependent on positive or favourable orders of the SAT.
5. Change in the nature of business, if any
There was no change in the nature of business of the Company during the financial year 2015-16.
6. Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report
There are no changes and commitments, which are affecting the financial position of the Company from the end of the financial year, i.e., 31st March, 2016 till the date of this Report. i.e., 29th July, 2016.
7. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company''s operations in future
- Order dated 23rd October, 2013 passed by Securities and Exchange Board of India:
As reported earlier, SEBI Vide Interim Order dated 21st September, 2011 had issued directions to the Company not to issue equity or any other instruments convertible into equity or alter capital structure in any manner till further directions, which was confirmed on 30th December, 2011. The SEBI further issued a final order dated 23rd October, 2013 against the Company, which operative portions are as under:
a. That the Company will not issue equity shares or any other instruments convertible into equity shares or any other security, for a period of ten years.
b. Vide Interim Order dated September 21, 2011 (later confirmed through the Confirmatory Order on December 30, 2011), the Company was directed not to issue equity shares or any other instrument convertible into equity shares or alter their capital structure in any manner till further directions. In this context, the Company has already undergone the prohibition imposed vide the Interim Order for a period of approximately two years. In view of this factual situation, it is clarified that the prohibition already undergone by the Company pursuant to the aforementioned SEBI Order shall be reduced while computing the period in respect of the prohibition imposed vide this order.
From the above Order it is clear that the Company is restrained from issuing any further equity shares or any other instruments, convertible into equity shares or any other security, effectively for a period of eight years (approx) from the date of the order.
Hence, the Company has already undergone the prohibition imposed vide the Interim Order for a period of approximately two years before the final order and around three years from the date of final order, i.e., almost half of the prohibitory order of SEBI has been survived by the Company.
The Company''s various efforts to restart the project also failed due to the embargo on issue of new equity by SEBI. The aforesaid order has also compelled the Company to stand still its project. The company finds it difficult to arrange funds for its day to day operations.
The aforesaid restrictive order has built such adverse circumstances, wherein the Company is not able to move ahead with its project and various contracts and agreements which were entered into and for which advances were paid have expired long back. The Management, in the previous financials has written off such advances, pre-operative expenses, consultancy fee and capital work in progress to give true and fair picture of the financials, though such writing off completely eroded the net worth of the Company.
The Auditors of the Company has taken note of the same and qualified their Report raising their apprehension on the going concern status of the Company. The management has given their detailed comments on such qualification of the Auditor''s at the later part of this Report. Though it is pertinent to note that the ability of the Company to continue as a going concern is significantly dependent on getting a favourable order from SAT and the management is expecting for such favourable order.
8. Details in respect of adequacy of internal financial controls with reference to the Financial Statements
The Company has adequately adopted the procedures to ensure the proper internal control, suitable policies and guidelines as required under various provisions of the Companies Act, 2013 and the Listing Agreement/Regulations are in place. These policies, e.g. Vigil Mechanism Policy/Whistle Blower Policy, Risk Management Policy are meant to adhere the proper guideline, rules and regulations to comply with the requirement of the law, to reduce the possible threats of fraud and to ensure the orderly and efficient conduct of the business of the Company. These policies and guidelines are adequately monitored by the designated Committees of the Board. The Members be further apprised that earlier the affairs of Risk Management were being looked after by the Risk Management Committee of the Company, however, the Board resolved to dissolve the said committee and terms of reference of the same shall be looked after by the Audit Committee of the Company.
The Company apart from the above has in place a system of Internal Control adequate in respect to the size and operations of the Company. M/s Amar Jeet Singh & Associates, had been the Internal Auditor of the Company for the financial year 2015-16. He has been conducting internal audit at regular intervals at every quarter ending. No material discrepancies have been reported by him during the period of his Audit. The Company prepared the financial information/Reporting as per the requisite requirements of the Companies Act, 2013 and the Listing Agreement, and placed it to the Audit Committee and Board for the approval, once approved the said financial results are submitted to the stock exchange and also placed on the website of the Company.
9. Details of Subsidiary/ Joint Ventures/ Associate Companies
The Company neither has any Subsidiary nor any Joint Venture or Associate Company. Since, the Company is not having any Subsidiary accordingly no policy has been formulated for determining Material Subsidiaries.
10. Performance and financial position of each of the subsidiaries, associates and joint venture companies included in the consolidated financial statement
The Company is not having any Subsidiary, Joint Venture or Associate Company.
11. Deposits
The Company has not accepted any deposits during financial year 2015-16 under the provisions of Chapter V of Companies Act, 2013.
12. Statutory Auditors
M/s VATSS & Associates, Chartered Accountants, (ICAI Firm Registration No.- 017573N) were appointed as Statutory Auditors of the Company for a period of 5 years in the previous Annual General meeting (AGM) of the Company held on 25th September, 2015 subject to ratification of their appointment by the members in every subsequent AGM. They have completed the audit of the Company for the financial year 2015-16. The Board hereby recommends appointment of M/s VATSS & Associates, Chartered Accountants as the statutory auditors of the Company for the financial year 2016-17 for ratification of the members. Members are requested to consider and ratify the same.
13. Auditor''s Report
The Auditors have qualified their Audit Report issued to the Company, by stating the following qualification:
"Attention of the matters is invited to note no. 27(d) of the notes to accounts regarding the financial statements of the Company having been prepared on a Going concern basis, notwithstanding that due to continuous losses incurred by the Company during the past years and current year, the accumulated losses of the Company have far exceeded its net worth resulting in negative net worth on balance sheet date. The Company has written-off a substantial part of its Fixed Asset during the previous year. This situation indicates the existence of a material uncertainty that may cast a significant doubt on the Company''s ability to continue as a Going concern."
The Board considered the aforesaid qualification and recorded its comment as below:
The board noted qualified opinion of the Auditors raising the concern on the ability of the Company to continue as going concern.
It is a matter of record that the Losses suffered during the previous years were on account of expenses incurred as pre-operational expenses of the project since 2011 during its project implementation phase. In 2011 SEBI has issued its interim order prohibiting the Company from entering into the capital market, or issuing any kind of securities and altering its capital structure. This order hugely impacted the capacity of the Company to raise funds and thus the project implementation process got slowed. The aforesaid order of the SEBI was further confirmed by the final order dated 23rd October, 2013. The said order has been challenged at Securities and Appellate Tribunal, for which the proceeding is going on. This restrictive order has brought this Company to be in a position where no project could be implemented and no source of income could be generated till date, which has in turn resulted into the accumulated losses for the Company over the years.
Before taking decision of such writing off of substantial part of the Fixed Assets during the previous financial year, the Board also took note of the Auditor''s Observation, which was made by them in the meeting of the Board held on 10th February, 2015. The Board recorded the fact that the writing off of the Fixed Assets were required and mandated to give a true and fair picture of the financial statement.
The Board further took legal opinion on this matter from one of the leading law houses in Delhi, and after considering the various aspects of the legal opinion and also after considering the possibilities of recovery of the Capital advances or the enforceability of such Contracts (including novation), consented to write off these advances.
However, the Supreme Court Judgment of Salim Akbarali Nanji Vs Union of India (UOI) and Ors was taken note of.; In this case it was held that the concept of writing off debts is an internal management/ accounting procedure to clean up the balance sheet of a company. Such procedure/ decision to write off an advance/ debt can be resorted to even in cases where a party has not exhausted all the avenues for recovery of dues. It has no impact on the right of a party to proceed against the opposite party. Nor does it bar or render non-maintainable recovery proceedings.
The board recorded that the decision of writing off is necessary to give true and fair view of the financial statement of the Company, the Board decided to write off other Fixed Assets and advances, which is having similar nature as aforesaid and accordingly various advances, fixed assets and Pre-operative expenses were written off by the Board. Details of write offs are appropriately explained in the notes to the accounts.
The management is hoping to receive a favourable order from the SAT proceedings, which Company has initiated against the restrictive orders of the SEBI, which will positively impact the future of the Company. In view of the willingness to start the project once the favourable business conditions are in, the
Management has taken stand to continue the accounting of the business as Going Concern.
14. Share Capital
The Company''s Capital Structure remains unchanged during Financial Year 2015-16.
15. Extract of the annual return
The extract of the annual return in Form No. MGT - 9 is annexed as Annexure -01.
16. 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 and Technology absorption The Company has not initiated its operations till date, no particulars in respect of conservation of energy and technology absorption have been furnished as per Section 134(3)(m) of the Companies Act, 2013. However in use of office appliances, precautions are taken to ensure saving of energy.
(B) Foreign exchange earnings and Outgo
There were no foreign exchange earnings and outgo during the year under review.
17. Corporate Social Responsibility (CSR)
The disclosures as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is enclosed as Annexure-02.
18. Directors
A) Changes in Directors and Key Managerial Personnel (KMP):
Cessation of Directors/KMP:
- During the year under review, Mrs. Rekha Sarda had resigned from her office of the Chief Financial Officer (CFO) of the Company w.e.f. 29th July, 2015.
- Later, Ms. Monika Moorjani resigned from her office as Director of the Company w.e.f. 23rd March, 2016. Appointment of New Directors/KMP:
- Pursuant to the requirements of Section 203 read with Rule 8 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the office of CFO was vacant in the Company. Considering the said requirements, the Board resolved to appoint Mr. Raman Mallick as the new CFO of the Company w.e.f. 06th November, 2015 based on his qualifications, experience and background and also considering the present scenario of the Company. The members be further apprised that Mr. Raman Mallick had been previously employed in group Company and was handling all the account/finance and banking activities. He has been employed in group companies since previous 8 years and is acquainted with the positions of the Company.
- To meet the requirements of woman Director on Board as per Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, management approached and requested Ms. Monika Moorjani to consider joining the Board once again, Ms. Moorjani, consented to be appointed again as a Director of the Company under Independent - Non Executive & Woman Category w.e.f. 27th May, 2016.
Reappointment of Directors:
Ms. Monika Moorjani is being taken on the Board as an Additional Director, whose office of Directorship in the Company shall continue till the date of ensuing Annual General Meeting of the Company. The Company has received notices under Section 160 (1) of the Companies Act, 2013 from member(s) proposing her candidature for appointment as director. The Board of Directors has recommended her appointment and a suitable resolution is being moved through AGM Notice for the necessary approval of the shareholders.
Further, subject to the provisions of Section 152(6) of Companies Act, 2013, Mr. Deep Kumar Rastogi, Director of the Company is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment. Brief resume of directors seeking appointment and re-appointment along with other details as stipulated under Regulation 36 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, are provided in the AGM Notice for convening the Annual General Meeting.
B) Declaration by an Independent Director(s) & Re- appointment, if any
All Independent Directors have submitted declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16 (1) (b) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.
C) Details of training imparted to Independent Directors
Every new Independent Director inducted on the Board attends an orientation program in which he/she is familiarized with the strategy, operations and Status of the Company. They are further briefed with history of the Company and also handed over a Copy of the bunch of Company''s Annual Reports, its Memorandum and Articles of Association, various policies and the Code of Conduct of the Company. One familiarization program was conducted on 06th November, 2016, details of the same are placed on the website of the Company, a web link thereto is given below:
http://www.cals.in/Familiarisation_Program.pdf Further, at the time of appointment of an Independent Director, the Company issues a formal letter of appointment outlining his/her role, functions and duties/responsibilities as a Director. The Format of the letter of appointment is provided on our website, a web link thereto is given below:
http://www.cals.in/Data/Documents/Cals%20Refineries%20-%20OD%20-%20Model%20LOI%20-%20Independent%20Directors.pdf
D) Formal Annual Evaluation
The Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 states that a formal annual evaluation needs to be made by the Board of its own performance its committees, Chairman 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 Independent Directors of the Company in their meeting held on February 09, 2016 reviewed the performance of the Non Independent Directors, in case of our Company, Mr. Deep Kumar Rastogi, the Executive Chairman of the Company and the Board as a whole. Further, the Board of Directors in their meeting held on May 27, 2016 evaluated the performance of all the Independent Directors based on set questioners circulated to the Board. Also, the Nomination and Remuneration Committee in meeting held on May 27, 2016, evaluated every director''s performance. On the Basis of the above evaluations, the performance of the entire Board, Executive Directors and Independent Directors were found satisfactory, specially taking into consideration the existing circumstances, in which the Company is operating.
19. Number of meetings of the Board of Directors
The Board met 6 times during the year, the details of which are given in Corporate Governance Report forming part of this annual report. The intervening gap between any two meetings was within the prescribed time limit under Companies Act, 2013.
20. Audit Committee
During the year, the Audit Committee was constituted with Mr. Sameer Rajpal, Chairman of the Committee, Mr. Pranav Kumar and Mr. Deep Kumar Rastogi.
A detailed description about the audit Committee is given in the Corporate Governance Report, forming part of the Director''s Report.
Further all recommendations made by Audit Committee during the year were accepted by the Board.
21. Details of establishment of vigil mechanism for directors and employees
The Company has in place a Vigil Mechanism/Whistle Blower Policy framed as per the requirements of Section 177 of Companies Act, 2013 and Clause 49(II)(F) of the Erstwhile Listing Agreement [Now Regulation 22 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015]. A weblink to the policy is mentioned below:
http://www.cals.in/Data/Documents/Cals%20Refineries%20-%20OD%20-%20Vigil%20Mechanism.pdf
22. Nomination and Remuneration Committee
The policy formulated by the Board relating to the remuneration for the Directors, Key Managerial Personnel and other employees and also the Criteria for determining the Qualifications, positive attributes and Independence of a Director pursuant to Section 178(3) of Companies Act, 2013 is annexed as Annexure-03 to this Report.
23. Particulars of loans, guarantees or investments under section 186
The Company has not granted any Loans, extended any Guarantees or made Investments during the Financial year 2015-16, pursuant the provisions of Section 186 of Companies Act, 2013.
24. Particulars of contracts or arrangements with related parties
The Company has not made any contracts with related parties pursuant to Section 188 of Companies Act, 2013.
However, your Company has been obtaining loan from Nyra Holdings Pvt. Ltd. a related party as per Section 2 (76) of the Companies Act, 2013, to meet its day to day financial needs and also to meet the statutory dues, necessary compliances and the legal expenses. Such arrangements of obtaining loan from related party falls into the category of material related party transaction as per Regulation 22 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.
Further, Explanation to Regulation 23(1) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 differentiates between a related party transaction and a material related party transaction, it prescribes the limit of the transaction which will be treated as the material related party transaction i.e., "transaction/s with related party being entered individually or taken together with previous transaction during a financial year, exceeds 10% of the annual consolidated turnover of the Company as per the last audited financial statement, will be material related party transaction. Sub Regulation 8 of this Regulation mandates that all existing material related party transactions entered into prior to the date of notification of these regulations, i.e., 02nd September, 2015 and which may continue beyond such date shall require approval of the shareholders in the first General Meeting, subsequent to notification of these regulations. This is to note that, pursuant to clause 49 (VII)(B) of the erstwhile Listing Agreement, which correspond to the aforesaid Regulation 23 of the Listing Regulations, the Company has already taken the requisite approval of the shareholders in this respect in the Annual General Meeting held in the previous year on 25th September, 2015, that is the 1st General Meeting held after the notification of the Listing Regulations. Hence the approval of the shareholders to enter into such material related part transaction is in place and Company has complied with the requirements.
As on the date of the Balance sheet of 31st March, 2016, your company has borrowed a sum of Rs. 8,08,90,000/from Nyra Holdings Private Limited, however in the financial year 2015-16, the total borrowing from the said related party was Rs. 1,26,30,000/-.
Moreover, the Company has formulated a policy on materiality of related party transactions and also on dealing with Related Party Transactions which can be downloaded from the link mentioned below:
http://www.cals.in/Data/Documents/Cals%20Refineries%20- %20OD%20-%20RPT%20Policy.pdf
25. Managerial Remuneration
Disclosure pursuant to Section 197(12) of Companies Act, 2013 and Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided below:
i) The Ratio of the remuneration of each Director to the Median remuneration of the employees of the Company for the year 2015-16:
Directors |
Nature of Directorship |
Ratio |
Mr. Deep Kumar Rastogi |
Whole time Director & Executive Chairman |
N.A.* |
Mr. Pranav Kumar |
Non-Executive Independent Director |
1:9.948 |
Mr. Sameer Rajpal |
Non-Executive Independent Director |
1:9.948 |
Mrs. Monika Moorjani |
Non-Executive Independent Director |
1:19.896 |
*Mr. Deep Kumar Rastogi had opted not to withdraw any remuneration while he was appointed as Whole Time Director.
ii) The percentage increase in remuneration of each Director, CFO, CEO, CS or Manager in the financial year:
There was no increase in the remuneration of any of the Director during the financial year 2015-16.
The remuneration (as per the provision of section 17 (1) of Income Tax Act, 1961) of Company Secretary of the Company has been increased by 3.07% respectively from financial year 2014-15, Mr. Raman Mallick was appointed as the CFO of the Company during the financial year, hence no percentage increase in his remuneration is recorded.
iii) The percentage increase in the median remuneration of employees in the financial year:
The median remuneration of employees has been reduced from the previous year due to the difference in the salary being paid to the Mrs. Rekha Sarda, the Ex-CFO of the Company and Mr. Raman Mallick, the current CFO of the Company.
iv) The number of permanent employees on the rolls of Company:
During the year 2015-16, there were 3 employees on the rolls of the Company. New CFO Mr. Raman Mallick was appointed at the place of outgoing CFO of the Company in the middle of the year, hence as on 31st March, 2016, only 3 employees were continuing on the rolls of the Company.
v) Average percentile increase already made in the salaries of employees other than 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:
As reported above total 3 employees are on the rolls of the Company, out of which two being the KMPs (CS & CFO) and one other employee in the operations department. There has been no increase in the remuneration of any employee other than Company Secretary of the Company during the reporting period. The CFO of the Company was appointed during the year, hence, no such increment in his salary was made during the year, however the third employee works for the operations department, and considering the fact that the project could not take off, the work relating to operational activity is very limited and confined. The management, for the aforesaid reasons, did not consider the increase in his remuneration, during the year.
vi) The Remuneration is as per the remuneration policy of the Company.
vii) The names of Top 10 employees in terms of remuneration are:
S. No. |
Name of employee |
Designation |
1 |
Mr. Suvindra Kumar |
Company Secretary |
2 |
Mr. Raman Kumar |
Chief Financial |
|
Mallick |
Officer |
3 |
Mr. Debashish Bera |
Officer Commercial |
viii) There were no employees in the Company during the year who were in receipt of remuneration in excess of Rs. 1,02,00,000/- per annum or Rs. 8,50,000/- per month.
26. Secretarial Audit Report
A Secretarial Audit Report in Form No. MR-3 for the Financial year 2015-16 given by M/s. KBK & Co., Company Secretaries is annexed as Annexure-04 with this report.
The following disclosures have been made by the Secretarial Auditor in his report, requiring explanation:
âShare application money for an amount of Rs 1,57,57,463/remains pending for allotment.â
Explanations given:
Since the situation w.r.t the circumstances in this matter has not changed, hence the explanation to the Secretarial Auditor was the same as given earlier, which state as below:
It has been explained to the Secretarial Auditor that the above mentioned amount of Rs. 1,57,57,463/- is part of FDI, which was received from M/s Abboro Limited, a foreign Body Corporate. This amount is pending for allotment due to the restrictive order of SEBI dated 23rd October, 2013 which has restricted the Company from accessing the Capital markets and/or issuing shares and/or any other instruments convertible into equity or altering its capital structure. Though the Company through its letter dated 12th May, 2015 and reminder letter dated 29th May and 7th December, 2015 had asked for a special permission from SEBI, under intimation of Registrar of Companies, NCT of Delhi and Haryana, for the relaxation in its order, so that the equity shares could be allotted to M/s Abboro Limited.
The same fact has been suitably recorded by the Secretarial Auditor in his Report.
27. Risk management policy
Pursuant to the requirements of Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Earlier Clause 49(VI) of the Listing agreement), the Board had constituted the Risk Management Committee and had also laid down the Risk Management Plan of the Company. The Committee was responsible for the monitoring and reviewing of the Risk Management Plan. The Major element of Risk which may threaten the existence of the Company is to be identified and laid down in the Risk Management Plan of the Company.
However, as per Regulation 21(5) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the provisions of Clause 49(VI)(C) [Now, Regulation 21(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015] states that the risk management committee are applicable only to top 100 listed Companies based on the market Capitalization as at the end of the immediate previous financial year.
In light to the aforesaid situation, the Company was not required to maintain the said Committee as it do not stand in the top 100 listed Companies, based on the said market capitalization. Hence the Board in their meeting held on 09.02.2016 dissolved the said Committee with immediate effect.
It was ensured that the Risk Management System/policy of the Company is now to be looked after by the Audit Committee. The system to analyze the Risk Management is implemented in such way that it is commensurate with the Nature, Size and Operations of the Company. The Committee shall look after the areas of Financial Risk and Controls etc.
28. Management Discussion and Analysis Report
The Management Discussion and Analysis Report as required under Regulation 21(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the stock Exchange forms part of this Report.
29. Corporate Governance Report
A separate Section on Corporate Governance forming part of the Director''s Report and a certificate from the Practicing Company Secretary confirming compliance of the Corporate Governance Norms as stipulated in Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is included with this Annual Report.
30. Listing of Securities
The Securities of your Company are currently listed with Bombay Stock Exchange (BSE) with ISIN- INE40C01022 and scrip code 526652. The Company has paid listing fee to the Bombay Stock Exchange for the financial year 2015-16. All compliances with respect to the listing agreement/regulations is being made in regular course.
31. Director''s Responsibility Statement
In terms of the provisions of Section 134(5) of the Companies Act, 2013, your Directors confirm that -
(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, in the case of a listed company, 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.
32. Acknowledgements
Your Directors wish to place on record their appreciation for the Co-operation and Assistance received from Regulatory Bodies, Government, Bankers, Shareholders, business associates and various other Stakeholders who have extended their valuable, sustained support and encouragement during the year under review. The Directors would also like to place on record a hearty thanks to the management and the employees of the Company, who have been standing with the Company and giving their tireless support in the adverse circumstances.
For and on behalf of the Board of Directors
(Deep Kumar Rastogi) (Sameer Rajpal)
Executive Chairman Director
DIN : 01229644 DIN : 05184612
Place : New Delhi
Date : 29.07.2016
Mar 31, 2015
Dear Members,
The Directors present their Thirty First Annual Report and Audited
Financial Statements for the financial year 2014-15.
1. Financial Summary/highlights on Performance of the Company
(Standalone)
(Rs.in million)
Description Year Ended Year Ended
March 31,2014 March 31, 2015
Revenue from Operations - -
Other Income 0.16 3.76
Total Revenue 0.16 3.76
Operational Expenses - -
Employee Benefit Expenses 6.47 6.32
Interest and Finance Charges 0.00 81.90
Depreciation and Amortizations 0.38 0.45
Other Expenses 8.29 17.57
Total Expenses 15.14 106.24
Profit/(Loss) before
exceptional items (14.98) (102.48)
Exceptional Items 5587.67 (47.19)
Profit/(Loss) for the year (5602.65) (55.29)
2. Dividend
As there is no operating income and consequently, no profit is
available for distribution as dividend.
3. Reserves
The Company is not having any income and therefore there is no surplus
available to be carried forward to Reserves.
4. Brief description of the Company's working during the year/ State
of Company's affair
A. Company's operation during the year
This business operation of the Company has been stand still since long.
We have to the extent possible, tried to explain the reason behind such
situation. The prime reasons for such stagnancy in the business
operation was the investigation conducted by the Securities and
Exchange Board of India (SEBI) and the restrictive order passed by SEBI
in this respect in the year 2011.
The prolonged investigation took approx. 2 years and ended with a
negative order against the Company, issued on 23rd October, 2013,
restricting the Company from entering into the securities market and
altering its capital structure, in any manner effectively for period of
8 years from the date of the order. The Company has challenged that
order of SEBI at Securities Appellate Tribunal in December, 2013.
Approx. 2 years have elapsed since then, and the matter is still
pending before the Tribunal.
The aforesaid incident has grossly affected the status of the Company
at large and as a result the business operations of the company have
come to a complete stand still.
Since there is no business operation in the Company, the prime
responsibility of the Company is limited to the compliances of the
various statutory requirements under different laws, rules and
regulations, dealing with the litigations and other day to day
administrative activities.
In addition to the above, and as apparent from the financial statement,
the Company has not had any operational income since a long time and
therefore serious thought is required to be taken on how the requisite
funds should be arranged to maintain the necessary statuary compliances
of the Companies.Being a listed Company with a wide shareholder base of
approx. 1.85 lakh shareholders, the costs of compliances remains on the
higher side. It is pertinent to note here that the Management of the
Company remains vigilant to the necessary compliances, as applicable to
the Company.They have ensured that all the requisite compliances are
complied with in the given time period of the prescribed law, rules and
regulations. Despite of having no operational income and facing the
prohibitory orders of SEBI from entering into the market, the Company
had managed to efficiently comply with all the applicable compliances
and has also not defaulted on the payment of the statutory dues.
Till date the Company has been managing its day to day activity
expenses to make the necessary compliances and payment of statutory
dues through an arrangement of loan from one of its related parties
namely Nyra Holdings Pvt. Ltd., which may not be a viable long term
solution. Considering the constraint situation of the Company your
Company has also written to the Securities and Exchange Board with a
copy to the Registrar of Companies, making prayers, that an exemption
be granted to the Company from making its Compliances till the SEBI
prohibition is lifted and to allow M/s Nyra Holdings Private Limited to
give interest free loans to the company without considering the same to
be a default of the provisions of the Companies Act, 2013 and also to
modify the SEBI order dated 23rd October 2013, and permit the current
promoters (M/s Nyra Holdings Private Limited, in specific) to induct
capital / funds against issue of equity. The Company has received no
reply till date.
Further, to reiterate, the Company's operation has come to a standstill
and no improvements is being made towards implementation of the project
of the Company.The contracts and the agreements which were entered by
the Company w.r.t the implementation of the refinery project have also
lapsed or expired long back. Capital advances, which were made at the
implementation stage of the project are either not recoverable or
specific performance against the said advances cannot be enforced. The
Board of Directors after analyzing the status and also based on the
opinion received from legal firms, have decided to write off these
advances, land and pre-operative expenses etc. from the balance sheet
of the Company, to give true and fair picture of the financial
statement. The Board further considered that carrying such advances
which have no material value or relevance to the books of accounts
would be inappropriate and would not give a true and fair view to the
investors/shareholders of the Company.
It should also be noted that such writing off of aforesaid advances,
land and pre-operative expense have resulted in substantial change in
the profit/loss of the Company as compared to the previous year. The
loss for this year is Rs. 5602.65 Million. as compared to the Loss for
the previous year of Rs. 55.29 Million.This has further affected the
Net worth of the Company, which is now completely eroded.
The Auditor's have also pointed this out in their Report and qualified
their opinion, the Board has given their comment on the qualification
of Auditor's in the later part of this Report.
Investigation of Serious Fraud Investigation Office (SFIO)
The Members be apprised that the Serious fraud investgation office
(SFIO) had initiated an investigation into the affairs of the Company
on 4th Day of February, 2015. They were appointed as investigating
authority under section 212 of the Companies Act, 2013, the
investigation was relating to the issuance of GDRs by the Company in
the year 2007 and the proposed GDR issue in the year 2011.
Your Company has provided all the requisite information and lent the
necessary support to the officers of SFIO, we have also provided all
the documents as enquired by them from time to time.
B. Status of project
Company's Crude Oil refinery proposed in 2007 at Haldia (West Bengal)
with a capacity of 5 M MTPA, has now become unviable and is an
opportunity lost on account of nonavailability of funds, restrictive
order of SEBI having a long lasting impact, pending litigations,
unrecoverable advances paid to suppliers on account of non-fulfilment
of financial obligations by company in time. As considerable time has
lapsed and the company could not raise the required funding in time,
all efforts and investments in the project has been reduced to
negligible financial value.A discussion containing important
milestones, past and present status of the project is given below,
which would give a fair idea of how nonachievement of financial closure
and other related issues have damaged the prospect of the project
revival:
* Allotment of land admeasuring about 400 acres at Haldia by
Haldia Development Agency (HDA), West Bengal
Haldia Development Authority (HDA), vide its memo dated March 25, 2008,
offered land admeasuring about 400 acres at Haldia, West Bengal to the
Company for setting up the refinery project ('the project'). As per the
terms of the said memo, lease premium of Rs. 600 million was stipulated,
which could not be paid by the company pending financial closure for the
refinery project. Subsequently, the Company entered into a tripartite
agreement dated March 19, 2010 along with HDA and West Bengal Industrial
Development Corporation Limited (WBIDC). The Company was given
permissive possession of the land for a period of six months from the
date of the agreement with a condition that the land shall be sub-leased
in favour of the Company at the end of six months, subject to compliance
with certain conditions. Since the Company could not comply with these
conditions, it had requested additional time from WBIDC for the same.
WBIDC, while granting such extension, stipulated additional conditions
relating to tie up of equity and achievement of financial closure for
the project. The Company was not in a position to comply with these
conditions as the SEBI order was subsisting and informed WBIDC
accordingly requesting further extension. However, WBIDC had not acceded
to the Company's request and had withdrawn the permissive possession of
land.
In the absence of any development in the project and withdrawal of the
permissive possession of land, Cost of leasehold land Rs. 990.71
million, including cost of land development Rs. 196.91 million and
civil work of factory building (included in capital work in progress)
Rs. 49.64 million are written off.
* Environment clearance
The Ministry of Forest and Environment (MOEF), upon our application,
had accorded Environmental Clearance for 5 MMTPA refinery project
Company in the past, the Company had revised the capacity of refinery,
envisaged in Haldia to 10 MMTPA from 5 MMTPA and had filed an
application to Ministry of Environment to enhance the approval for
putting up 200,000 bpd equivalent to 10 MMTPA capacity refineries. The
Ministry vide its letter dated September 20, 2011 declined the request
as Haldia has been notified as a critically polluted area and no new
capacity or expansion can be permitted till it is de-notified.
* Civil construction
Initial civil construction was done at the project site and included
the boundary wall at the project site. The other necessary construction
w.r.t establishment of the refinery was being undertaken in the past.
Presently no construction is going on at the site.
* Arrangements to the import of Plant and Machinery (the Refineries) to
India:
Initially the Company entered into contracts for relocation of one
refinery from Ingolstadt, Germany and had also paid advances for such
equipments. However, the Company could not achieve financial closure
and fulfill the terms of the said contract, resulting in cancellation
of the contract and forfeiture of the advances paid.
Similarly, other advances were also paid to various other suppliers for
import of refinery and refinery equipments. These have also now been
written off as the company could not achieve financial closure and
fulfil the terms of the contracts. Further the Company on March 15,
2011, entered into an Asset Purchase Agreement with Tagore Investments
SA (Tagore) (an affiliate of Hardt group) for the CENCO Petroleum
Refinery at a cost of US$ 275 million. The Company had also contracted
for another set of Refinery equipments from another affiliate of Hardt
group namely Amber Energy SA (Amber) at a cost of US$ 142 million.
Simultaneously, the Company had entered in to a 'Deed of Novation' with
an affiliate of Hardt Group for assuming the contractual obligations
envisaged on the supplier under an erstwhile agreement of plant &
machinery for which an advance of Rs. 4,583.44 million had been paid.
The Hardt Group had agreed to become a strategic investor in the
Company and assist it in implementing the refinery project. Abboro
Limited (affiliate of Hardt Group) had brought in Rs. 136.52 million as
equity during March, 2011 to March, 2012 (out of which 120.76 million
already allotted & the balance 15.76 million to be allotted as equity
shares). However these agreements have also now lapsed and after the
restrictive order of SEBI, their commitment to the project may have
diminished.
C. Future outlook
As reported above that the Company has been sailing through rough times
for the past few years and the reasons for same were also explained to
the extent possible. Presently the management is only concentrating on
trying to get rid of the adverse conditions. It would be pertinent to
note that the Company's future will be depending on the outcome of the
proceeding at SAT, where Company has filed an appeal against the
restrictive order of the SEBI issued against the Company on 23rd
October, 2013.
In the current circumstances any discussion on the project
implementation will be a futile exercise as with passage of time the
chances of the survival of the project are getting bleak. The previous
contracts, agreements which were entered into w.r.t the implementation
of refineries, have expired long back and now not in force, moreover at
this moment the Company has no operational project and hence no
operational revenues accrues to the Company. Moreover, as reported
above, various capital advances, pre-operative expenses, consultancy
fee and capital work in progress, were written off from the balance
sheet of the Company, just to give true and fair picture of the
financials. As submitted above that the Company's future is highly
dependent on the outcome of the SAT in the proceedings against the
restrictive order of the SEBI.
5. Change in the nature of business, if any
There was no change in the nature of business of the Company during the
financial year 2014-15.
6. Material changes and commitments, if any, affecting the financial
position of the company which have occurred between the end of the
financial year of the company to which the financial statements relate
and the date of the report.
There are no changes and commitments, which are affecting the financial
position of the Company from the end of the financial year, i.e., 31st
March, 2015 till the date of this Report. i.e, 07th August, 2015.
Though, Ms. Rekha Sarda, the Chief Financial Officer (CFO) of the
Company has resigned from the office w.e.f 29th July, 2015. The Company
is in the process to identify a suitable person to be appointed as CFO
of the Company.
7. Details of significant and material orders passed by the regulators
or courts or tribunals impacting the going concern status and company's
operations in future.
SEBI Vide Interim Order in 21st September, 2011 had issued directions
to the Company not to issue equity or any other instruments convertible
into equity or alter capital structure in any manner till further
directions, which was confirmed on 30th December, 2011. The SEBI
further issued a final order dated 23rd October, 2013 against the
Company, which operative portions are as under:
a. That the Company will not issue equity shares or any other
instruments convertible into equity shares or any other security, for a
period of ten years.
b. Vide interim Order dated September 21, 2011 (la ter confirmed through
the Confirmatory Order on December 30, 2011), the Company was directed
not to issue equity shares or any other instrument convertible into
equity shares or alter their capital structure in any manner till
further directions . in this context, the Company has already undergone
the prohibition imposed vide the Interim Order for a period of
approximately two years, in view of this factual situation, it is
clarified that the prohibition already undergone by the Company pursuant
to the aforementioned SEBI Order shall be reduced while computing the
period in respect of the prohibition imposed vide this order. From the
above Order it is clear that the Company is restrained from issuing any
further equity shares or any other instruments, convertible into equity
shares or any other security, effectively for a period of eight years
(approx) from the date of the order.
The Company's various efforts to restart the project also failed due to
the embargo on issue of new equity by SEBI. The aforesaid order has
also compelled the Company to stand still its project and also to
struggle to manage funds for its day to day operations.
The aforesaid restrictive order has helped building such circumstances,
wherein the Company was not able to move ahead with its project and
various contracts and agreements which were entered into and for which
advances were paid have expired long back. The Management has taken
suitable decision to write off such advances, pre-operative expenses,
consultancy fee and capital work in progress to give true and fair
picture of the financials, though such writing off has completely eroded
net worth of the Company.
The Auditor's of the Company has taken note of the same and qualified
their Report raising their apprehension on the going concern of the
Company. The management has given their detailed comments on such
qualification of the Auditor's at the later part of this Report. Though
it is pertinent to note that the ability of the Company to continue as
a going concern is significantly dependent on getting a favourable
order from SAT and the management is confident for such favourable
order.
8. Details in respect of adequacy of internal financial controls with
reference to the Financial Statements.
The Company has adequately adopted the procedures to ensure the proper
internal control, suitable policies and guidelines as required under
various provisions of the Companies Act, 2013 and the Listing Agreement
are in place. These policies, e.g. Vigil Mechanism policies/Whistle
Blower Policies, Risk Management Policy are meant to adhere the proper
guideline, rules and regulations to comply with the requirement of the
law, to reduce the possible threats of fraud and to ensure the orderly
and efficient conduct of the business of the Company. These policies
and guidelines are adequately monitored by the designated Committees of
the Board.
The Company apart from the above, has also in place a system of
Internal Control adequate in respect to the size and operations of the
Company. M/s Hemant K. Agrawal & Associates, had been the Internal
Auditor of the Company for the financial year 2014-15. He has been
conducting internal audit at regular intervals at every quarter ending.
No material discrepancies have reported by him during the period of his
Audit. The Company prepares the financial information/Reporting as per
the requisite requirements of the Companies Act, 2013 and the Listing
Agreement, and place it to the Audit Committee and Board for the
approval, once approved the said financial results are submitted to the
stock exchange and also placed on the website of the Company.
9. Details of Subsidiary/ Joint Ventures/ Associate Companies The
Company neither has any Subsidiary nor any Joint Venture or Associate
Company. Since, the Company is not having any Subsidiary accordingly no
policy has been formulated for determining Material Subsidiaries.
10. Performance and financial position of each of the subsidiaries,
associates and joint venture companies included in the consolidated
financial statement.
The Company is not having any Subsidiary, Joint Venture or Associate
Company.
11. Deposits
The Company has not accepted any deposits during financial year 2014-15
under the provisions of Chapter V of Companies Act, 2013.
12. Statutory Auditors
M/s Kanu Doshi Associates, Chartered Accountants, (ICAI Firm
Registration No.- 104746W) have conducted the audit of the Company for
the financial year 2014-15. They have shown their unwillingness to
continue as auditor of the Company.
In view of the above, the Audit Committee considered appointment of a
new auditor. It was noted that all the operations of the Company
including day to day activities are based at Delhi. Majority of the
Board members reside in Delhi-NCR and meetings of the Board of
Directors are ordinarily held in Delhi. The registered office of the
Company is also at Delhi. Hence, the committee agreed to hire services
of a CA Firm based at Delhi-NCR. The Committee after review of few
profiles of the Auditors, found M/s VATSS & Associates, Chartered
Accountants, New Delhi (Firm Registration No.- 017573N), suitable to
replace the retiring auditors M/s Kanu Doshi Associates, Mumbai.
Consent of the proposed auditors was obtained. The new auditors have
agreed to complete the audit for the financial year 2015-16 at the same
fees which was being charged by the retiring auditors.
The Board recommends the appointment of M/s VATSS & Associates,
Chartered Accountants as the new auditors of the Company for a period of
5 consecutive years commencing from the financial year 2015-16 till the
financial year 2019-2020, subject to the ratification of the appointment
by the members at every Annual General Meeting. Members are requested to
consider and approve the same.
13. Auditors' Report
The Auditors have qualified their Audit Report issued to the Company,
by stating the following qualification:
"Attention of the matters is invited to note no. 30(d) of the notes to
accounts regarding the financial statements of the Company having been
prepared on a Going concern basis, notwithstanding that due to
continuous losses incurred by the Company during the past years and
current year, the accumulated losses of the Company have far exceeded
its net worth resulting in negative net worth on balance sheet date.
The Company has written-off a substantial part of its Fixed Asset
during the year. This situation indicates the existence of a material
uncertainty that may cast a significant doubt on the Company's ability
to continue as a Going concern."
The Board considered the aforesaid qualification and recorded its
comment as below:
The board noted that the audit qualification has raised the question on
the ability of the Company to continue as going concern, as the Company
has suffered continous losses in past years and in current year the
accumulated losses of the Company have far exceeded its Net Worth
resulting in negative Net Worth on the balance sheet date as the
Company has written-off a substantial part of its Fixed Asset during
the year.
The board had further taken on record that the Losses which the Company
has suffered during the previous years were obvious, as the Company was
going through the implementation process of the project and the
expenses were incurred as pre-operational expenses of the project since
2011, i.e., till the time when SEBI has issued its interim order
prohibiting the Company from entering into the capital market, or
issuing any kind of securities and altering its capital structure. This
order had slowed the project implementation process and related
expenses. A final order by SEBI against the company on 23rd October,
2013, which has prohibited the Company from entering into the capital
market, or issuing any kind of securities and altering its capital
structure for an effective period of approx 8 years from the date of
the order. The said order has been challenged at Securities and
Appelated Tribunal, for which the proceeding is going on. However this
restrictive order has brought this Company to be in a position where no
project could be implemented and no source of income could be generated
till date, which has in turn resulted into the accumulated losses for
the Company over the year.
The Board took note of the auditor's Observation on writing off of
substantial part of the Fixed Asssets during the year. The Board
recorded that the writing off of the Fixed Assets were required and
mandated to give a true and fair picture of the financial statement.
The Board noted that the auditors in the meeting of the Board of
Directors held on 10th february, 2015 had raised query regarding the
sanctity of carrying capital advances in the books, as the enforcing
contracts and agreements, mandating these advances earlier given,
expired long back. They had wanted board to review the possibility of
the recovery of the advances.
The Board thereafter took the legal opinion on this matter from M/s
Chauhan and Chauhan, Law Office, Greater Kailash Part-1, New
Delhi-110048, The lawyer have considered all the aspect relating to
this matter Including evaluation of two core concerns on the issue,
i.e,
A. Status of Asiatexx contracts and
B. Options/ Remedies Available Qua Advances Made Relevant extract of
the lawyer's opinion is reproduced herein below for ready reference.
A. Status of Asiatexx contracts
* "We, accordingly, are of the opinion conclude that any endevour to
claim enforcement or pursue the Asiatexx contract shall prove to be a
futile exercise with nil chances of success. We are further of the
opinion that the SEBI Order dated 23rd October, 2013 inter alia
prohibiting/ banning Querist from not issuing any equity shares or any
other instruments convertible into equity shares or any other security,
is operative, binding and continues to subsists. Though, an appeal has
been filed, however no stay has been granted. As such and presently for
this very reason the Querist is not in a position to comply with its
obliga tions to issue GDRs.
The company also cannot violate the SEBI . Otherwise also, we are
Informed that the Querist has no running business or revenue return or
available funds to make balance or equivalent payments under these
contracts . At one time, It may have been a viable project but presently
It has no takers. Infact, the company is at its worst and facing a
severe financial crunch. The project site/ lands given under concessions
agreement at Haldia, West Bengal have been cancelled. In absence of such
site/land, the Refinery Project it seems cannot be implemented. All
these supervening factors are required to be considered in a correct
perspective. Necessarily, they further render it futile and imprudent
for the Querist to pursue or try to enforce the Asiatexx agreement with
Asiatexx or Hardt Group or seek its performance."
* On another note, It Is imperative to point out that Asiatexx, we are
informed, is a company devoid of assets. Any proceedings initiated
against Asiatexx, even if successful including by a arbitration award
in favour Querist, would not result in payments being realized by the
Querist. Asiatexx is also likely to resist any proceedings / award on
the ground of (a) fraud having been perpetrated against it, (b) no
moneys having been received by it consequent to the fraud.
B. Options/ Remedies Available Qua Advances Made
* We further more and am of the opinion that by way of the SEBI Order
dated 31st December, 2014 has exercised jurisdiction over the advances
paid to Asiatexx contract Also all issues as to Asiatexx contract are
open and pending before the SEBI/ SAT Querits itself Is a party to these
proceedings. Presently, therefore, to file claims for recovery of
advance may not serve any purpose. We believe the Querist should anyways
await the final outcome of the SEBI/ SAT proceedings. One of the
possible outcome of these proceedings can be that the order of
disgorgement is confirmed either to be paid by Gagan Rastogi/ Asiatexx
or Sanjay Malhotra. In any event at such stage, the purpose of recovery
would be achieved in investor interest. We also note that the SEBI in
its capacity as a regulator is bound to deal with the proceeds of
disgorgement in terms of Securities and Exchange Board of India
(Investor Protection and Education Fund) Regulations, 2009. These
Regulations provide for establishment of the Investor Protection fund.
Rule 5 of theses Regulations further provide the purposes for which the
fund can be utilized. Significantly by way of sub-section 3 of Rule 5
the Board, has to ultlize the amounts disgorged and credited to the fund
and the interest accrued thereon to restitute eligible and identifiable
investors who have suffered losses resulting from violation of
securities laws. Necessarily this adjudication currently underway cannot
be pre-empted. Querist must await its outcome as per law.
* We furthermore note that from the circumstances explained above, the
advances to Asiatexx should be written off in the books of the Querist
so that the financial statements of the Querist reflect true and fair
view of the financial position. It be also noted and for this we find
support in a Supreme Court Judgment of Salim Akbarali Nanji Vs Union of
India (UOi) and Ors.; holding that the concept of writing off debts is
a internal management/ accounting procedure to clean up the balance
sheet of a company. Such procedure/ decision to write off an advance/
debt can be resorted to even in cases where a party has not exhausted
all the avenues for recovery of dues. It has no impact on the right of
a party to proceed against the opposite party. Nor does it bar or
render nonmaintainable recovery proceedings.
The Board after considering the aforesaid legal opinion and considering
that possibility of recovery of the Capital advances or enforceability
of such Contract (including novation) against them, is bleak, consented
to write off these advances.
The board recorded that the decision of writing off is necessary to
give true and fair view of the financial statement of the Company, the
Board while taking it on record also decided to write off other Fixed
Assets and advances, which is having similar nature as aforesaid and
accordingly various advances, fixed assets and Preoperative expenses
were written off by the Board. Details of write offs are appropriately
explained in the notes to the accounts.
Even if the auditors have qualified their report by raising apprehension
on the going concern status of the Company as the Company's networth has
been completely eroded due to the decision taken by the management to
write off various capital advances and fixed assets. Your management
justify its decision, as such writing off is to give true and fair
pictures of the financial statement of the Company. Apart from this your
management is also hoping to have the positive outcome from the SAT
proceedings, which Company has initiated against the restrictive orders
of the SEBI, which will considerably determine the future of the
Company.
14. Share Capital
The Company's Capital Structure remains unchanged during Financial Year
2014-15.
15. Extract of the annual return
The extract of the annual return in Form No. MGT - 9 is annexed as
Annexure -01.
16. 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 and Technology absorption The Company has
not initiated its operations till date, no particulars in respect of
conservation of energy and technology absorption have been furnished as
per Section 134(3)(m) of the Companies Act, 2013.
(B) Foreign exchange earnings and Outgo
There were no foreign exchange earnings and outgo during the year under
review.
17. Corporate Social Responsibility (CSR)
The disclosures as per Rule 9 of Companies (Corporate Social
Responsibility Policy) Rules, 2014 is enclosed as Annexure-02.
18. Directors
A) Changes in Directors and Key Managerial Personnel: Cessation of
Directors:
During the Year under review, Mr. Alexander Walter Schweickhardt ceased
to be associated with the Company as a Director on the Board with
effect from the end of the business hours on 31st March, 2015 due to
vacation of office under Section 167 of the Companies Act, 2013, for
not attending any meetings of the Board during the Financial year
2014-15. In spite of giving due notice of the meeting of the Board of
Directors and also making him aware about the relevant provisions of
the Companies Act, 2013 w. r.t vacation of office of Director, he did
not turn up for the meeting.
The Directors would like to place on record their appreciation of the
contributions made by Mr. Alexander Walter Schweickhardt during his
tenure as the Non- Executive Independent Director.
Appointment of New Directors:
The Board of Directors on the recommendations of the Nomination &
Remuneration Committee appointed Mrs. Monika Moorjani, as Additional
Directors (in capacity of Independent Director) on 10th February 2015
in compliance to Section 149 and 161 of the Companies Act, 2013 read
with Clause 49 of the listing agreement and she will be holding the
office of Director till the date of ensuing Annual General Meeting of
the Company. Appointment of Mrs. Monika Moorjani as an Independent
Director in the Company also fulfills the requirement of appointment of
a Women Director as per Rule 3 of Companies (Appointment and
Qualification of Directors) Rules, 2014 and Clause 49(II)(A)(1) of the
Equity Listing Agreement entered into with Stock Exchange.
Reappointment of Directors:
As mentioned above, the office of Mrs. Monika Moorjani as an additional
Director in the Company is till the date of ensuing Annual General
Meeting of the Company. The Company has received notices under Section
160 (1) of the Companies Act, 2013 from member(s) proposing her
candidature for appointment as directors. The Board of Directors has
recommended her appointment.
Further, Subject to the provisions of Section 152(6) of Companies act,
2013, Mr. Deep Kumar Rastogi, Director of the Company is liable to
retire by rotation at the ensuing Annual General Meeting and being
eligible, has offered himself for re-appointment. Brief resume of
directors seeking appointment and reappointment along with other details
as stipulated under clause 49 of the listing agreement, are provided in
the Notice for convening the Annual General Meeting.
B) Declaration by an independent Director(s) & reappointment, if any
All Independent Directors have submitted declarations that they meet
the criteria of independence as laid down under Section 149(6) of the
Companies Act, 2013 and Clause 49 of the listing agreement.
C) Details of training imparted to independent Directors
Every new Independent Director inducted on the Board attends an
orientation program in which he/she is familiarized with the strategy,
operations and Status of the Company. They are further briefed with
history of the Company and also handed over a Copy of the bunch of
Company's Annual reports, its Memorandum and Articles of Association,
various policies and the Code of Conduct of the Company.
Further, at the time of appointment of an Independent Director, the
Company issues a formal letter of appointment outlining his/her role,
functions and duties/responsibilities as a Director. The Format of the
letter of appointment is provided on our website, a web link thereto is
given below: http://www.cals.in/Data/Documents/Cals%20Refineries%
20-%20OD%20-%20Model%20LOI%20-%20Independent % 20Directors.pdf
D) Formal Annual Evaluation
Clause 49 of the Listing Agreement mandates that the Board shall
monitor and review the framework of its evaluation. 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
Independent Directors of the Company in their meeting held on February
10, 2015 reviewed the performance of the Non Independent Directors, in
case of our Company, Mr. Deep Kumar Rastogi the Executive chairman of
the Company and the Board as a whole. Further, the Board of Directors
in their meeting held on May 29, 2015 evaluated the performance of all
the Independent Directors based on set questioners circulated to the
Board. On the Basis of the above evaluations, the performance of the
entire Board, Executive Directors and Independent Directors were found
satisfactory, specially taking into consideration of the existing
circumstances, in which the Company is operating.
19. Number of meetings of the Board of Directors
The Board met 5 Times during the year, the details of which are given
in Corporate Governance report forming part of this annual report. The
intervening gap between any two meetings was within the time prescribed
under Companies Act, 2013.
20. Audit Committee
During the year, the Audit Committee was constituted with Mr. Sameer
Rajpal, Chairman of the Committee, Mr. Pranav Kumar and Mr. Alexander
Walter Schweickhardt. However, the office Mr. Alexander Walter
Schweickhardtwas vacated, with effect from the end of the business
hours of 31st March, 2015 under Section 167 of the Companies Act, 2013,
for not attending any meetings of the Board during the Financial year
2014-15. The Committee was reconstituted with the appointment of Mr.
Deep Kumar Rastogi as a member of the Committee.
A detail description about the audit Committee is given in the
Corporate Governance Report, forming part of the Director's Report.
Further all recommendations made by Audit Committee during the year
were accepted by the Board.
21. Details of establishment of vigil mechanism for directors and
employees
The Members of the Audit Committee recommended to the Board a draft
Vigil Mechanism/Whistle Blower Policy as per the requirements of
Section 177 of Companies Act, 2013 and Clause 49(II)(F) of the Listing
Agreement in their meeting held on 14th November, 2014 and finally
accepted and adopted by the Board in the meeting held on February 10,
2015.
A weblink to the policy is mentioned below:
http://www.cals.in/Data/Documents/Cals%20Refineries%20-
%20OD%20-%20Vigil%20Mechanism.pdf
22. Nomination and Remuneration Committee
The policy formulated by the Board relating to the remuneration for the
Directors, Key Managerial Personnel and other employees and also the
Criteria for determining the Qualifications, positive attributes and
Independence of a Director pursuant to Section 178(3) of Companies Act,
2013 is annexed as Annexure-03 to this Report.
23. Particulars of loans, guarantees or investments under section 186
The Company has not granted any Loans, extended any Guarantees or made
Investments during the Financial year 201415, pursuant the provisions
of Section 186 of Companies Act, 2013.
24. Particulars of contracts or arrangements with related parties
The Company has not made any contracts with related parties pursuant to
Section 188 of Companies Act, 2013.
However your Company has been obtaining loan from Nyra Holdings Pvt.
Ltd. a related party as per Section 2 (76) of the Companies Act, 2013,
to meet its day to day financial needs and also to meet the statutory
dues and necessary compliances. Such arrangements of obtaining loan
from related party falls into the category of material related party
transaction as per Clause 49 (VII) of the Listing Agreement.
Further, clause 49 (VII)(C) differentiate the related party transaction
and the material related party transaction, it prescribes the limit of
the transaction which will be treated as the material related party
transaction i.e., "transaction/s with related party being entered
individually or taken together with previous transaction during a
financial year, exceeds 10% of the annual consolidated turnover of the
Company as per the last audited financial statement, will be material
related party transaction. Sub Clause (E) of this clause mandates that
all material related party transaction shall require approval of the
shareholders through special resolution.
As on the date of the Balance sheet of 31st March, 2015, your company
has borrowed a sum of Rs. 6.83 Crores from Nyra Holdings Private
Limited, however in the financial year 2014-15, the total borrowing
from the said related party was Rs. 1.14 Crores. As Company's Turnover
as per previous audited Balance Sheet (2013-14) is Nil the aforesaid
transaction with Nyra holdings pvt. Ltd. shall be treated as material
related party transaction, which requires approval of the shareholders.
The Company has circulated the matter in the Notice convening this AGM
for the requisite approval of the shareholders.
Moreover, the Company has formulated a policy on materiality of related
party transactions and also on dealing with Related Party Transactions
which can be downloaded from the link mentioned below:
http://www.cals.in/Data/Documents/Cals%20Refineries%20-
%20OD%20-%20RPT%20Policy.pdf
25. Managerial Remuneration:
Disclosure pursuant to Section 197(12) of Companies Act, 2013 and Rule
5 of Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 is provided below:
i) The Ratio of the remuneration of each Director to the Median
remuneration of the employees of the Company for the year 2014-15:
Directors Nature of Directorship Ratio
Mr. Deep Kumar Rastogi Whole time Director &
Executive Chairman N.A.*
Mr. Alexander Walter Non-Executive N.A.*
Schweickhardt Independent Director
Mr. Pranav Kumar Non-Executive 1:15.33
Independent Director
Mr. Sameer Rajpal Non-Executive 1:13.63
Independent Director
Mrs. Monika Moorjani Non-Executive
Independent Director 1:110.39
*Mr. Deep Kumar Rastogi and Mr. Alexander Walter Schweickhardt, had
opted not to withdraw any remuneration during the year.
ii) The percentage increase in remuneration of each Director, CFO, CEO,
CS or Manager in the financial year:
There was no increase in the remuneration of any of the Director during
the financial year.
The remuneration of CS & CFO of the Company has been increased by
21.83% and 8.72%, respectively from financial year 2013-14.
iii) the percentage increase in the median remuneration of employees in
the financial year:
An increase of 16.37% from financial year 2013-14.
iv) the number of permanent employees on the rolls of Company: During
the year 2014-15, there were 4 employees on the rolls of the Company,
one of the employee left the Company in the middle of the year.
Accordingly, as on 31st March, 2015, only 3 employees were there on the
rolls of the Company.
v) the explanation on the relationship between average increase in
remuneration and Company Performance:
The Company is not into operations since a long, it has recorded huge
losses and also maintaining the bare minimum staff required to keep the
Company going. The management decided to make a nominal increase in the
remuneration of the employees to retain them according to their caliber
and expertise and to match up with the growing inflation.
vi) Comparison of the remuneration of the Key Managerial Personnel
against the performance of the Company:
Out of the three KMP's in the Company, Mr. Deep Kumar Rastogi, the
Whole time Director is not withdrawing any remuneration from the
Company.
Apart from him, remuneration of CS & CFO of the Company has been
increased by 21.83% and 8.71%, respectively from financial year
2013-14, which was necessary to retain them and to match up the growing
inflation. The Company is facing a lot of legal complexities and
therefore, qualified and experienced personnel is required to sail the
Company out of this adverse situation and hence it was imperative to
give them their due raise.
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:
The Company had allotted shares at Rs. 10/- each under its last public
offer which were later subdivided into face value of Rs. 1/- per Equity
Share. The Market Quotations/price of shares as at 31st March, 2015 at
BSE compared to the IPO decreased by 91%.
Particulars As at 31st As at 31st Variation
March, 2015 March, 2014 (%)
Closing Share Price Rs. 0.09/- Rs. 0.09/- Nil
Market Capitalization (INR) Rs.746456679/- Rs.746456679/- Nil
(Market Value per share
*No. of Outstanding Shares)
P/E ratio
(Market Value per share/EPS) Rs.-0.13/- Rs.-9.00/- -98.56%
viii) average percentile increase already made in the salaries of
employees other than 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:
There has been no increase in the remuneration of managerial personnel
apart from that of KMP's, justification for which has been given in
point (vi) above.
ix) Comparison of the each remuneration of the Key Managerial personnel
against the performance of the Company
As mentioned in point (vi) above the remuneration of CS & CFO of the
Company has been increased by 21.83% and 8.71%, respectively from
financial year 2013-14, which was necessary to retain them and also to
match up the inflation growth. Since the Company has not recorded any
performance as no business operations was recorded, during the year,
therefore such comparison of the each remuneration of the Key Managerial
personnel against the performance of the Company is not possible.
x) the key parameters for any variable component of remuneration
availed by the Directors:
Only the Independent Directors of the Company are withdrawing sitting
fee from the Company, nothing else is being paid to the Directors in
form of remuneration and hence, there is no variable component.
xi) The ratio of the remuneration of the highest paid director to that
of the employees who are not Directors but receive remuneration in
excess of the highest paid director during the year:
The ratio of the remuneration of the highest paid director to that of
the employees who are not Directors but receive remuneration in excess
of the highest paid director during the year is 1:82.64.
xii) The Remuneration is as per the remuneration policy of the Company.
26. Secretarial Audit Report
A Secretarial Audit Report in Form No. MR-3 for the Financial year
2014-15 given by M/s Vineet Gupta & Associates, Company Secretaries is
annexed as Annexure-04 with this report.
The following disclosures has been made by the Secretarial Auditor in
his report, requiring explanation:
"Share application money for an amount of Rs 1,57,57,463/-remains
pending for allotment."
Explanations given:
It has been explained to the Secretarial Auditor that the above
mentioned amount of Rs. 1,57,57,463/- is part of FDI, which was
received from M/s Abboro Limited, a foreign Body Corporate. This amount
is pending for allotment due to the restrictive order of SEBI dated
23rd October, 2013 which has restricted the Company from accessing the
Capital markets and/or issuing shares and/or any other instruments
convertible into equity or altering its capital structure. Though the
Company through its letter dated 12th May, 2015, has asked for a
special permission from SEBI, under intimation of Registrar of
Companies, NCT of Delhi and Haryana, for the relaxation in its order,
so that the equity shares could be allotted to M/s Abboro Limited.
The same fact has been suitably recorded by the Secretarial Auditor in
his Report.
27. Risk management policy
Pursuant to the requirements of Clause 49(VI) of the Listing agreement,
the Board has constituted the Risk Management Committee and has also
laid down the Risk Management Plan of the Company. The Committee is
responsible for the monitoring and reviewing of the Risk Management
Plan. The Major elements of Risk which may threaten the existence of
the Company have been identified and laid down in the Risk Management
Plan of the Company. Simultaneously, the Audit Committee of the Company
is also looking after the areas of Financial Risk and Controls. The
Risk Management System of the Company is working systematically and is
commensurate with the Nature, Size and Operations of the Company.
28. Management Discussion and Analysis Report
The Management Discussion and Analysis Report as required under Clause
49 of the Listing Agreement with the stock Exchange forms part of this
Report.
29. Corporate Governance Report
A separate Section on Corporate Governance forming part of the
Director's Report and a certificate from the Practicing Company
Secretary confirming compliance of the Corporate Governance Norms as
stipulated in Clause 49 of the Listing Agreement is included in this
Annual Report.
30. Listing of Securities
The Securities of your Company are currently listed with Bombay Stock
Exchange (BSE) with ISIN- INE 040C01022 and scrip code 526652. The
Company has paid listing fee to the Bombay Stock Exchange for the
financial year 2015-16. All compliances with respect to the listing
agreement is being made in regular course.
31. Directors' Responsibility Statement
In terms of the provisions of Section 134(5) of the Companies Act,
2013, your Directors confirm that -
(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, in the case of a listed company, 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.
32. Acknowledgements
Your Directors wish to place on record their appreciation for the
Cooperation and assistance received from Regulatory Bodies, Government,
Bankers, Shareholders, business associates and various other
Stakeholders who have extended their valuable, sustained support and
encouragement during the year under review.
The Directors would also like to place on record a hearty thanks to the
management and the employees of the Company, who have been standing
with the Company and giving their tireless support in the adverse
circumstances.
For and on behalf of the Board of Directors
(Deep Kumar Rastogi) (Sameer Rajpal)
Executive Chairman Director
DIN :01229644 DIN :05184612
Place : New Delhi
Date : 07.08.2015
Mar 31, 2014
Dear Members,
The Directors present their Thirtieth Annual Report and the Audited
Financial Statement for Financial Year 2013-14. Pursuant to the
Ministry of Corporate Affairs General Circular 08/2014 No. 1/19/
2013-CL-V dated April 4, 2014, the Financial Statements and other
reports required to be attached to the Annual Report for FY 2013-14 are
governed by the relevant provisions, schedules, rules of the Companies
Act, 1956. Hence the Director''s Report is prepared in line with the
requirements of the Companies Act, 1956.
FINANCIAL RESULTS:
(Rs. in millions)
Description Year Ended Year Ended
March 31, March 31,
2014 2013
Sales - 0.72
Other Income 3.76 10.32
Total Revenue 3.76 11.04
Purchases - 0.71
Employee Benefits Expense 1.29 7.44
Interest and Finance Charges 20.46 84.28
Depreciation and Amortizations 0.12 0.86
Other Expenses 1.30 15.33
Total Expenses 23.17 108.62
Profit / (Loss) before exceptional
and extraordinary items (19.41) (97.58)
Extra-ordinary Items - (19.72)
Loss for the year (19.41) (77.86)
DIVIDEND:
As there is no operating income and consequently no profit is available
for distribution as dividend.
PROGESS OF THE PROJECT AND STATUS OF FINAL ORDER FROM SEBI:
The Company has a plan to set up crude oil refinery in Haldia, West
Bengal, however the progress of the project was hampered and it is
standstill due to factors beyond the control of the Company, The SEBI,
by its ex-parte order No.WTM/PS/ISD/02/2011 dated September 21, 2011,
which was later confirmed vide their order dated December 30, 2011,
directed your Company not to issue equity shares or any other
instruments convertible into equity shares or alter capital structure
in any manner till further directions in this regard. The Company in
the above matter decided to file an appeal with the Securities
Appellate Tribunal (SAT) to seek a solution in the month of August,
2013. SAT vide its order dated August 28, 2013, had directed SEBI to
complete the proceedings and issue the final orders after issuing show
cause notice to the Company within a period of eight weeks from the
date of order, failing which the ex-parte interim order of September
2011 and confirmatory order of December 2011 will stand vacated.
Further during the course of the hearings, SAT had also recorded the
statement of the Counsel of SEBI, confirming that their investigations
in respect of our Company have been completed. As directed by SAT, SEBI
had issued a Show Cause Notice dated September 19, 2013 along with
supplementary show cause notices, received on later dates, the Company
had filed a detailed reply of the said show cause notices to the SEBI,
after which the SEBI issued a final order against the Company, of which
operative portions are as under:
a. That the Company will not issue equity shares or any other
instruments convertible into equity shares or any other security, for a
period of ten years.
b. Vide Interim Order dated September 21,2011 (later confirmed through
the Confirmatory Order on December 30, 2011), the Company was directed
not to issue equity shares or any other instrument convertible into
equity shares or alter their capital structure in any manner till
further directions. In this context, the Company has already gone the
prohibition imposed vide the Interim Order for a period of
approximately two years. In view of this factual situation, it is
clarified that the prohibition already undergone by the Company
pursuant to the aforementioned SEBI Order shall be reduced while
computing the period in respect of the prohibition imposed vide this
order.
From the above Order it is clear that the Company is restrained from
issuing any further equity shares or any other instruments, convertible
into equity shares or any other security, effectively for a period of
eight years (approx).
Your Company in the above matter has applied for consent order to SEBI
and also has challenged the final order of SEBI at the Securities
Appellate Tribunal (SAT), for which proceedings are going on.
The members be apprised that there is no change since the last
reporting in the status relating to the agreements which was entered
with the Hardt Group for purchase of refinery equipment and with the
set of refining equipment for which the Company had already contracted
and paid advances, however the Company had lost the Bayernoil equipment
as it couldn''t fulfill its contractual commitments, the rigorous effort
of your Company to restart the project is also failed due to the
restraint on issue of new equity by SEBI. Meanwhile the strategic
investor in Hardt Group has also stopped infusing further funds due to
the said embargo of SEBI order.
However, the members may note that the Company in the past had revised
the capacity of refinery envisaged in Haldia to 10 MMTPA from 5 MMTPA
and had also filed an application to Ministry of Environment to enhance
the approval for putting up 200,000 bpd equivalent to 10 MMTPA capacity
refineries. The Ministry vide its letter dated September 20, 2011
declined the request as Haldia has been notified as a critically
polluted area and no new capacity or expansion can be permitted till it
is de-notified. Further Ministry of Environment and Forest vide its
Memorandum Dated 17th September, 2013, has de-notified Haldia from
critically polluted areas and will be able to consider the new /
expansion projects. The Company plans to approach MOEF for getting the
requisite clearances for its expansion once the plans for the same are
crystallized.
Presently the core consideration of your Company is to first get rid of
the present adverse situation and try to create favorable circumstances
wherein it can be decided, how to proceed with the project of the
Company, and also to decide the future course of action. It is
pertinent to note that the embargo imposed by SEBI since September,
2011 has brought the Company on its back foot. Every plan and
proposal, which your Company had decided to execute towards the
implementation of the project, has been adversely affected and cannot
be executed. Considering the present circumstances, it has become very
important to re-think and plan afresh for the future development of the
Company and its project implementation subject to some positive outcome
from the Hon''ble SAT, to which your management is very hopeful.
The Hardt Group which had agreed to become a strategic investor in the
Company and initially assisted the Company in implementing its refinery
project and also brought in Rs. 136.52 million during March''11 to
March''12, through Abboro Limited (another affiliate of Hardt Group),
which allowed your Company to meet its funding for working capital and
project activities. Presently the Hardt group is supportive to the
Company and awaiting the final decision to be made by Hon''ble SAT, in
the appeal of the Company made against the said order of SEBI.
However it is important to note that the contracts which was entered
with affiliates of Hardt group have expired as of now, but, your
Company is fully committed to come out of the present adverse
situation.
STATUS OF FIPB, CCEA APPROVAL:
As already informed earlier the Company''s proposal to issue GDR''s to
Tagore and Amber, aggregating to US$ 317 million was initially approved
by the Foreign Investment Promotion Board (FIPB) in their meeting held
on May 20, 2011. Since the amount of issue had exceeded Rs. 12,000
million, the proposal was recommended to the Cabinet Committee on
Economic Affairs (CCEA). However, prior to receipt of the CCEA
approval, SEBI in September 2011, issued directions to the Company to
not to issue equity or any other instruments convertible into equity or
alter capital structure in any manner.
Further pursuant to the SEBI order, FIPB had also withdrawn its
approval. The Company had represented to FIPB repeatedly, requesting
them to reconsider their decision. However, FIPB had at that time
rejected our request vide its letter dated July 23, 2012 in view of
change in the FDI Policy with effect from April 1, 2012. The Company
again represented to FIPB, stating that the proposal was earlier
approved under the then prevailing FDI policy and the delay was on
account of factors beyond the Company''s control, which was also
rejected by FIPB vide their letter dated November 2, 2012 for want of
final orders from SEBI.
Since the SEBI has issued a final order and has restrained the Company
from issuing any further equity shares or any other instruments
convertible into equity shares or any other security effectively for a
period of eight years (approx), it is immaterial to approach the FIPB
in the matter.
STATUS OF LAND AT HALDIA:
As the members are aware, the Haldia Development Authority (HDA), had
offered land admeasuring about 400 acres at Haldia, West Bengal to the
Company for setting up the project, stipulating a lease premium of Rs.
600 million. Since your Company, due to the embargo imposed by SEBI,
could not become operational and could not pay the said lease premium
pending financial closure, it entered into a tripartite agreement along
with HDA and West Bengal Industrial Development Corporation Limited
(WBIDC), whereby, WBIDC paid the lease premium and other development
charges to HDA and gave permissive possession of the land to the
Company for six months from the date of the agreement, subject to
compliance with certain conditions. Your Company could not comply with
the conditions and requested an extension of time from WBIDC for the
same, WBIDC had granted such extension, with certain additional
conditions relating to tie up of equity and achievement of financial
closure for the project, which could not be complied with due to the
subsisting of SEBI''s prohibitory order. The Company had accordingly
informed WBIDC, requesting further extension, which was not acceded to
and WBlDC had withdrawn the permissive possession.
Your Company has been awarded with the adverse order from SEBI, and it
will not be possible for your Company to achieve the financial closure,
in any way, till the time SEBI restriction is lifted and Company could
enter into securities market, which will lead your Company to be in the
position to consider and decide its future course of action and the
future strategies, which will ultimately lead to achieving the
financial closure. It cannot be denied that the only positive sign as
of now with your Company is that the Hardt Group is with us and will be
ready to fund the Company in the appropriate manner, once the SAT gives
us the positive order in the ongoing matter.
Your management is confident of sourcing the required funds for
clearance of the WBIDC dues and getting extensions on annulment of the
SEBI order.
DIRECTORS:
Mr. Deep Kumar Rastogi retires by rotation as required under the
Companies Act, 1956 and being eligible, offers himself for
reappointment.
Mr. R. Rajagopalan, Independent Director resigned from the Board vide
his letter dated 23rd October, 2013 and Mr. D. Sundararajan. Managing
Director of the Company, resigned from the Board vide his letter dated
24th October, 2013. Their resignations were accepted by the Board of
Directors, in their meeting held in November, 2013. The Directors
would like to place on record their appreciation of the contributions
made by Mr. R. Rajagopalan and Mr. D. Sundararajan during their tenure
as the Directors of the Company.
Mr. Pranav Kumar was co-opted as the Independent Director in the
capacity of Additional Director on the Board of the Company with effect
from 11th March, 2014 and holds office as such up to the ensuing Annual
General Meeting. Notice from the shareholders together with necessary
deposit proposing his name as Director has been received.
The Company has, pursuant to the provisions of Clause 49 of the Listing
Agreements entered into with Stock Exchange, appointed Mr. Alexander
Walter Schweickhardt, Mr. Sameer Rajpal and Mr. Pranav Kumar as
Independent Directors of the Company. The Company has received
declarations from the said Independent Directors of the Company, except
Mr. Alexander Walter Schweickhardt, confirming that they meet the
criteria of independence as prescribed both under sub-section (6) of
Section 149 of the Companies Act, 2013 and under the said Clause 49. In
accordance with the provisions of Section 149(4) and proviso to Section
152(5) of the Companies Act, 2013, these Directors are being appointed
as Independent Directors to hold office as per their tenure of
appointment mentioned in the Notice of the forthcoming AGM of the
Company in accordance with the requirements of the Act and the Articles
of Association of the Company.
PUBLIC DEPOSITS:
The Company has not accepted any deposit under section 58A of the
Companies Act, 1956, during the financial year under review.
CORPORATE GOVERNANCE:
A separate section on Corporate Governance forming part of the
Directors'' Report and the certificate from the Practicing Company
Secretary confirming compliance of Corporate Governance norms as
stipulated in Clause 49 of the Listing Agreement with the Indian Stock
Exchanges is included in the Annual Report.
CORPORATE SOCIAL RESPONSIBILITY:
Pursuant to the provisions of Section 135 of Companies Act, 2013 and
Companies (Corporate Social Responsibility policy) Rules, 2014 company
having net worth of rupees five hundred crore or more, or turnover of
rupees one thousand crore or more or a net profit of rupees five crore
or more during any financial year shall constitute a Corporate Social
Responsibility Committee of the Board consisting of three or more
directors out of which at least one director shall be an independent
director.
Aligning with the above requirement of the Companies Act, 2013, your
Company has constituted a Committee comprising of Mr. Deep Kumar
Rastogi, Executive Chairman, Mr. Sameer Rajpal, Non- Executive &
Independent Director and Mr. Pranav Kumar, Non-Executive & Independent
Director. The Committee is responsible for formulating and monitoring
the CSR policy of the Company, its broad terms of reference is
1. To formulate and recommend to the Board, a Corporate Responsibility
Policy which shall indicate the activities to be undertaken by the
company as specified in Schedule VII of the Companies Act, 2013,
2. To recommend the amount and area of expenditure to be incurred on
the various activities, and
3. To monitor the Corporate Social Responsibility Policy of the
Company from time to time.
4. Any other item as may be referred to by the Board.
Since the company has no profit during the previous years, there shall
not be requirement to fund any CSR activities.
DIRECTOR''S RESPONSIBILITY STATEMENT:
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956 with respect to the Director''s Responsibility Statement, the
Directors confirm on the basis of information placed before them by the
Management and Auditors: -
1. That in the preparation of the annual accounts for the Financial
Year ended March 31, 2014, the applicable Accounting Standards read
with requirements set out under schedule VI to the Companies Act, 1956,
have been followed;
2. That the Company has selected appropriate accounting policies and
applied them consistently and made judgment and estimates that were
reasonable and prudent so as to give a true and fair state of the
affairs of the Company at the end of the financial year and of the
Profit and Loss of the Company for the year under review;
3. That the Company has taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
4. That the accounts of the Company for the financial year ended March
31, 2014 has been prepared on a going concern basis.
CODE OF CONDUCT:
The Code of Conduct which is formulated by the Company is applicable to
all the Directors, Senior Management and Employees of the Company. This
Code endorses the idea of good corporate governance and good corporate
citizenship. The Code emphasises on Company''s commitment to sustainable
development, and a gender friendly workplace, transparency and
auditability and legal compliances. While preparing the Code, the
Company kept in mind the standards of business conduct, ethics and
governance and centers around the following theme:
"All Directors, Officers and Employees of the Company are committed to
conducting its business in accordance with the applicable laws, rules
and regulations and with highest standards of business ethics. This
code is intended to provide guidance and help in recognizing and
dealing with ethical issues, provide mechanisms to report unethical
conduct, and to help foster a culture of honesty and accountability.
Each Director, officer and employee is expected to comply with the
letter and spirit of this Code."
AUDITOR''S REPORT:
Auditor''s Report read together with Annexures referred to in Paragraph
3 of the Auditor''s Report do not contain any qualification and do not
call for any explanation/clarification.
AUDITORS:
M/s Kanu Doshi Associates, Chartered Accountants, (ICAI Firm
Registration No.- 104746W) who are the Statutory Auditors of the
Company, hold office until the conclusion of the ensuing Annual General
Meeting. It is proposed to re-appoint them to examine and audit the
accounts of the Company for next financial year, 2014-15 and to hold
office from the conclusion of this AGM till the conclusion of next AGM
of the Company. The said Auditors have, under Section 139(1) of the
Companies Act, 2013 and the Rules framed thereunder furnished a
certificate of their eligibility and consent for re-appointment.
Members are requested to reappoint them and authorize the Board to fix
their remuneration and pay out of pocket expenses.
LISTING OF SECURITIES:
Your Company''s securities are currently listed with Bombay Stock
Exchange. The Company has paid the listing fees to Bombay Stock
Exchange for the financial year 2014-15.
DELISTIING OF GDRs OF THE COMPANY FROM LUXEMBOURG STOCK EXCHANGE (LSE):
BNY Mellon, the Depository of GDRs of the Company, had resigned as the
Depository of the GDR''s of the Company w.e.f 28th October, 2013, and
given the appropriate time, as per the agreement entered with them by
Company, to appoint a successor depository. Your Company tried its
level best to find out the suitable depository for the GDR''s of the
Company, within the time as stipulated in the notice of resignation of
BNY Mellon. While looking for the successor depositories, Company also
requested to BNY for the extension in time to find the successor
depository. After putting in all its effort, your Company was not able
to find any depository for the GDRs to replace the BNY Mellon.
BNY Mellon had issued a notice dated April 08, 2014 for the termination
of Deposit Agreement with the Company and instructed the holders of the
DRs to convert their holdings into Equity shares on or before July 08,
2014.
Upon expiry of the aforesaid period the Company has received a letter
from Luxembourg Stock Exchange on 24th July, 2014 intimating us about
the delisting of GDRs from the official list of the Luxembourg Stock
Exchange and also to withdraw their trading on the Euro MTF Market of
the LSE w.e.f 14th July, 2014. Your Company has paid the Listing Fee to
the Luxembourg Stock Exchange for the calendar year 2014.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUTGO:
As the company is not covered in Companies (Disclosure of particulars
in report of Board of Directors) Rules, 1988, provisions of Section
217(1) (e) of the Companies Act, 1956 are not applicable.
The details of the foreign exchange earnings and out go during the year
have been given in the schedules to the accounts.
PARTICULARS OF THE EMPLOYEES:
There is no employee drawing the salary as prescribed under Section
217(2A) of the Companies Act, 1956 read with Companies (Particulars of
Employees) Rules, 1975.
ACKNOWLEDGEMENT:
Your Directors wish to place on record their appreciation for the
co-operation and assistance received from Regulatory Bodies,
Government, Bankers, stakeholders and other business associates who
have extended their valuable, sustained support and encouragement
during the year under review.
The Directors would also like to thank the management, employee of the
Company for showing their strong commitment to sail with the Company in
adverse flow.
For and on behalf of the Board of Directors
(Sameer Rajpal) (Deep Kumar Rastogi)
Director Executive Chairman
DIN :05184612 DIN :01229644
Place : Gurgaon
Date : 14.08.2014
Mar 31, 2013
The Directors present herewith the Twenty Ninth Annual Report together
with the Audited Accounts of the Company for the year ended March 31,
2013.
FINANCIAL RESULTS:
(Rs. in millions)
Description Year Ended Year Ended
March 31, March 31,
2013 2012
Sale 0.72 0.00
Other Income 10.32 7.74
Total Revenue 11.04 7.74
Purchases 0.71 0.00
Employee Benefits Expense 7.44 9.76
Interest and Finance Charges 84.28 8.13
Depreciation and Amortizations 0.86 1.44
Other Expenses 15.33 29.53
Total Expenses 108.62 48.86
Profit / (Loss) before
exceptional and extraordinary (97.58) (41.12)
Extra-ordinary Items (19.72) 2,643.05
Loss for the year (77.86) (2,684.17)
DIVIDEND:
As the Company is in the process of implementing the refinery project
and there is no operating income, your directors have not recommended
any dividend for the year.
PROGESS OF THE PROJECT:
The Company has a plan to set up crude oil refinery in Haldia, West
Bengal. During the year, the progress of the project was severely
hampered and project implementation has come to standstill due to
factors beyond the control of the Company. As stated in the last Annual
Report, SEBI, while investigating certain entities in regard to "Market
Manipulation using GDR issues" had by its ex-parte order
No.WTM/PS/ISD/02/2011 dated September 21, 2011, which was later
confirmed vide order dated December 30, 2011, directed our Company not
to issue equity shares or any other instruments convertible into equity
shares or alter capital structure in any manner till further directions
in this regard. The said order of SEBI is still subsisting.
Subsequently SEBI had from time to time sought further information for
early completion of the investigations in the matter and also summoned
the Managing Director for a Personal Appearance, which was complied
with and queries of SEBI were replied to. The Company is regularly
following up with SEBI and expects to receive the final orders from
SEBI anytime soon, after which the Company will take necessary steps
for tie up of funds and start project implementation.
After signing the agreements with Hardt Group for purchase of refinery
equipment and with the set of refining equipment for which the Company
had already contracted and paid advances, the Company revised the
capacity of refinery envisaged in Haldia to 10 MMTPA from 5 MMTPA. It
filed an application to Ministry of Environment to enhance the approval
for putting up 200,000 bpd equivalent to 10 MMTPA capacity refineries.
However, the Ministry vide its letter dated September 20, 2011 declined
the request as Haldia has been notified as a critically polluted area
and no new capacity or expansion can be permitted till it is
de-notified. Meanwhile, the Company lost the Bayernoil equipment as it
couldn''t fulfill its contractual commitments. The Company''s various
efforts to restart the project also failed due to the embargo on issue
of new equity by SEBI. Hardt Group has also stopped infusing further
funds pending revocation of SEBI order.
In the light of the above the Company intends to proceed with only a 5
MMTPA refinery on receiving favourable orders from SEBI. The Project
cost for setting up of 5 MMTPA refinery with equipments contracted from
Hardt Group along with balancing equipments is estimated at around US $
1 billion, which would be funded by a Debt:Equity ratio of 70:30. The
equity requirement will be met by issue of GDRs to the Hardt group and
the existing equity.
Hardt Group had agreed become a strategic investor in the Company and
assist it in implementing the refinery project and had brought in Rs.
136.52 million during March''11 to March''12, through Abboro Limited
(another affiliate of Hardt Group), which enabled the Company to meet
its funding for working capital and project activities.
Though the contracts entered with affiliates of Hardt group have
expired as of now, Hardt Group has indicated their willingness to
extend the same once a favourable order from SEBI is received. The
Company is confident of the support of Hardt Group in implementing the
project after receiving a favourable order from SEBI.
STATUS OF FINAL ORDER FROM SEBI:
The Company is regularly following up with SEBI and is expecting the
final orders anytime soon. However at the same time, as considerable
time has elapsed since the ex-parte interim order passed by SEBI in
September 2011, the Board has also severally authorized the Executive
Chairman and Managing Director of the Company to approach the
Securities Appellate Tribunal (SAT) at the appropriate time and to take
necessary steps in this regard.
STATUS OF FIPB, CCEA APPROVAL:
The Company''s proposal for issue of such GDRs to Tagore and Amber,
aggregating US $ 317 million was approved by the Foreign Investment
Promotion Board (FIPB) in their meeting held on May 20, 2011. Since the
amount of issue had exceeded Rs. 12,000 million, the proposal was
recommended to Cabinet Committee on Economic Affairs (CCEA). However,
prior to receipt of the CCEA approval, SEBI in September''11, had issued
directions to the Company not to issue equity or any other instruments
convertible into equity or alter capital structure in any manner.
Pursuant to the SEBI order, FIPB, had also withdrawn its approval. The
Company had represented to FIPB requesting them to reconsider their
decision. However, FIPB had rejected our request vide its letter dated
July 23, 2012 in view of change in the FDI Policy with effect from
April 1, 2012. The Company has again represented to FIPB, stating that
the proposal was earlier approved under the then prevailing FDI policy
and the delay was on account of factors beyond the Company''s control,
which has also been rejected by FIPB vide their letter dated November
2, 2012 for want of final orders from SEBI.
The Company now proposes to take up the matter with FIPB, once the
favourable order from SEBI is received.
STATUS OF LAND AT HALDIA:
Haldia Development Authority (HDA), had offered land admeasuring about
400 acres at Haldia, West Bengal to the Company for setting up the
project, stipulating a lease premium of Rs. 600 million. As the Company
could not pay the said lease premium pending financial closure, it
entered into a tripartite agreement along with HDA and West Bengal
Industrial Development Corporation Limited (WBIDC), whereby, WBIDC paid
the lease premium and other development charges to HDA and gave
permissive possession of the land to the Company for six months from
the date of the agreement, subject to compliance with certain
conditions. Since the Company could not comply with these conditions,
it had requested additional time from WBIDC for the same. Though WBIDC
granted such extension, it stipulated additional conditions relating to
tie up of equity and achievement of financial closure for the project,
which could not be complied with as the SEBI order was subsisting. The
Company had accordingly informed WBIDC, requesting further extension,
which was not acceded to and WBIDC had withdrawn the permissive
possession.
The Company has again represented to WBIDC requesting time till March
2014 for complying with the conditions. The strategic investor Hardt
group has agreed to provide the required funding to clear the dues of
WBIDC, subject to the condition that the Company obtains a favourable
order from SEBI and gets the required extension from WBIDC. The
management is confident of sourcing the required funds for clearance of
the WBIDC dues and getting extensions on annulment of the SEBI order.
DIRECTORS:
Mr. D. Sundararajan retires by rotation as required under the Companies
Act, 1956 and being eligible, offers himself for reappointment.
Mr. Sarvesh Goorha, Non- Executive Independent Director of the Company,
resigned from the Board vide his letter dated May 25, 2013 and the same
was accepted by the Board of Directors, in their meeting held on May
30, 2013. The Directors would like to place on record their
appreciation of the contributions made by Mr. Sarvesh Goorha during his
tenure as the Non- Executive Independent Director.
Mr. R. Rajagopalan was co-opted as the Additional Director on the Board
of the Company with effect from May 30, 2013 and holds office as such
upto the ensuing Annual General Meeting. Notice from the shareholders
together with necessary deposit proposing their names as Directors have
been received.
FIXED DEPOSITS:
The Company has not accepted any deposit under section 58A of the
Companies Act, 1956, during the financial year under review.
CORPORATE GOVERNANCE:
Pursuant to Clause 49 of the Listing Agreement with the Stock Exchange,
a compliance report on Corporate Governance is annexed as part of the
Annual Report.
DIRECTOR''S RESPONSIBILITY STATEMENT:
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956 with respect to the Director''s Responsibility Statement, the
Directors confirm on the basis of information placed before them by the
Management and Auditors: -
1. That in the preparation of the annual accounts for the Financial
Year ended March 31, 2013, the applicable Accounting Standards have
been followed;
2. That the Company has selected appropriate accounting policies and
applied them consistently and made judgment and estimates that were
reasonable and prudent so as to give a true and fair state of the
affairs of the Company at the end of the financial year and of the
Profit and Loss of the Company for the year under review;
3. That the Company has taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
4. That the accounts of the Company for the financial year ended March
31, 2013 have been prepared on a going concern basis.
CODE OF CONDUCT:
The Company has established the Code of Conduct which is applicable to
Directors, Senior Management and Employees of the Company. This Code is
based on fundamental principles, viz. good corporate governance and
good corporate citizenship. The Code covers Company''s commitment to
sustainable development, concern for occupational health, safety and
environment, a gender friendly workplace, transparency and auditability
and legal compliance. The Code while laying down, in detail, the
standards of business conduct, ethics and governance, centers around
the following theme:
"All Directors, Officers and employees of the Company are committed to
conducting its business in accordance with the applicable laws, rules
and regulations and with highest standards of business ethics. This
code is intended to provide guidance and help in recognizing and
dealing with ethical issues, provide mechanisms to report unethical
conduct, and to help foster a culture of honesty and accountability.
Each Director, officer and employee is expected to comply with the
letter and spirit of this Code."
AUDITOR''S REPORT:
Auditor''s Report read together with Annexures referred to in Paragraph
3 of the Auditor''s Report do not contain any qualification and do not
call for any explanation/clarification.
AUDITORS:
M/s Kanu Doshi Associates, Chartered Accountants, the Auditors of the
Company retire at the ensuing Annual General Meeting and have expressed
their willingness and eligibility to continue in the office, if
reappointed.
Members are requested to reappoint them and authorize the Board to fix
their remuneration and pay out of pocket expenses.
LISTING OF SECURITIES:
Your Company''s securities are currently listed with Bombay Stock
Exchange. The Company''s Global Depository Receipts (GDRs) are listed at
Luxembourg Stock Exchange. The Company has paid the listing fees to
Bombay Stock Exchange and Luxembourg Stock Exchange for the financial
year 2013-14 and Calendar Year 2013 respectively.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, AND FOREIGN EXCHANGE
EARNING AND OUTGO:
As the company is not covered in Companies (Disclosure of particulars
in report of Board of Directors) Rules, 1988, provisions of Section
217(1) (e) of the Companies Act, 1956 are not applicable.
The details of the foreign exchange earnings and outgo during the year
have been given in the schedules to the accounts.
PARTICULARS OF THE EMPLOYEES:
There is no employee drawing the salary as prescribed under Section
217(2A) of the Companies Act, 1956 read with Companies (Particulars of
Employees) Rules, 1975.
ACKNOWLEDGEMENT:
Your Directors would like to express their sincere appreciation for the
co-operation and assistance received from Regulatory Bodies,
Government, Bankers, stakeholders and other business associates who
have extended their valuable, sustained support and encouragement
during the year under review.
Your Directors also wish to place on record their deep sense of
appreciation for the commitment displayed by all executives, officers
and staff at all levels of the Company. We look forward for your
continued support in the future.
For and on behalf of the Board
Place : New Delhi (Deep Kumar Rastogi)
Date : July 9, 2013 Executive Chairman
Mar 31, 2012
The Directors present herewith the Twenty Eighth Annual Report together
with the Audited Accounts of the Company for the year ended March 31,
2012.
FINANCIAL RESULTS
(Rs. in Millions)
Description 2011-12 2010-11
Other Income 7.74 -
Total Revenue 7.74 -
Emplyee Benefits Expense 9.76 -
Finance Cost 8.13 -
Depreciation & Amortiazation Expenses 1.44 -
Other Expenses 29.53 -
Total Expenses 48.86 -
Profit/(Loss) before exceptional
and extraordinary items and tax (41.12) -
Extra-ordinary Items 2643.05 -
Profit/(Loss) before Tax (2,684.17) -
Tax Expense - -
Loss for the year (2,684.17) -
DIVIDEND
As the Company is in the process of implementing the refinery project
and there is no operating income, your directors have not recommended
any dividend.
PROGRESS OF THE PROJECT
During the second half of financial year 2011-12, the progress on
implementation of the project had been considerably slowed down because
of events beyond the control of the management. The Company had during
the previous financial year tied up with Hardt group, for import of
certain refining equipments managed by it at a total cost of US$ 417
million, out of which a major portion amounting to US$ 317 million was
to be settled by issuing equity in the form of Global Depository
Receipts (GDRs). The said arrangement, apart from reducing the cash
outflow burden would have enabled the Company to tie up substantial
portion of the equity requirement for funding the project. Apart from
the proposed gDr issue as above, Hardt group, through Abboro Limited,
Cyprus, has infused funds to the extent of Rs.136.53 million in the
Company which enabled the Company to restart the project activities.
The Company had submitted its application to the Foreign Investment
Promotion Board (FIPB), Ministry of Finance, seeking their approval for
issuance of such GDR to Hardt group. Though FIPB had approved the
allotment in their meeting held on May 20, 2011, the matter was
recommended by them to the Cabinet Committee on Economic Affairs (CCEA)
as the size of the issue exceeded Rs. 12,000 million.
However in the interim, Securities and Exchange Board of India(SEBI),
while dealing with certain entities in case of market manipulation by
issue of GDRs, had vide its ex-parte order No.WTM/PS/ISD/02/2011 dated
September 21, 2011, which was later confirmed vide order dated December
30, 2011, directed our Company not to issue equity shares or any other
instruments convertible into equity shares or alter capital structure
in any manner till further directions in this regard. The SEBI order
has resulted in the Company not being able to proceed with the proposed
GDR issue and tie up its Equity. Consequent to SEBI's order, FIPB has
also withdrawn its recommendation to CCEA and kept the proposal pending
at its end.
The Company had requested Foreign Investment Promotion Board (FIPB) to
hold the proposal till receipt of favourable orders from SEBI. However,
FIPB, vide its letter dated July 23, 2012 informed the company that it
is not acceding to its request as the FDI Policy effective from April
1, 2012 does not allow issue of equity against import of second hand
equipments. The Company has, on July 31, 2012 requested FIPB to
reconsider its decision as the earlier approval was based on FDI Policy
dated April 1, 2011, which allowed the issue of such equity. A
favourable response is expected.
Subsequent to the confirmatory order of December 30, 2011, SEBI had
called for additional information in January 2012 and also summoned the
Managing Director for a personal appearance, which was complied with
and all queries of SEBI were replied to. The final order from SEBI in
this regard is expected shortly and the project activities are expected
to re-commence no sooner the orders from SEBI are received. During
March 2011, the Contract for Purchase and sale of Assets related to a
decommissioned 90000 bpd Oil Refinery with Lohrmann International GmbH
(Lohrmann) was renegotiated whereby the scope of the contract was
amended to exclude auxiliary technical services and consultancy
services besides reduction in the purchase price for the contract with
the stipulation to make the balance payment by May 23, 2011. Since the
Company did not have any credit limits it approached one of the
potential EPC Contractors, who had agreed to utilize their Bank limits
to open the necessary LCs in favour of Lohrmann. However when the
application for the LC was submitted, the bankers had insisted on
credit worthiness of Lohrmann, which when submitted was not found
satisfactory by the banks and the Company lost precious time in setting
things right. The supplier could not accede to the Company's request
for further extension of time as they had to fulfil their back- to-back
commitments and as a result the said contract was terminated with the
amounts paid as advance being forfeited. Though the Management had
tried to salvage certain important equipment from other sources, it was
not successful due to the resources constraints.
The other vendors, with whom contracts had been entered into, for
purchase of auxiliary and balancing equipments, have confirmed the
availability of these equipments and once a favourable SEBI order is
received and financial tie up for the project is completed, these
contracts will be revalidated and renegotiated.
The Company had requested West Bengal Industrial Development
Corporation Limited (WBIDC) to allow time upto March 31, 2012 for
complying with the conditions stipulated by it for handing over the
permissive possession of land. Though WBIDC allowed extension of
permissive possession it was subject to certain preconditions including
payments of interest and achievement of financial closure within a
stipulated time. Considering that the time allowed was too short for
compliance of these conditions, more particularly since the capacity of
the project had also doubled entailing additional costs, the Company
had again requested WBIDC to extend the time limit upto March 31, 2012,
which was not acceded to by WBIDC resulting in withdrawal of the the
permissive possession. However it is understood that the land at
Haldia is still available and once the outstanding issues are
addressed, WBIDC would have no objections to handing over the
permissive possession of land to the Company.
In the interim Hardt group has extended its contracts with the Company
and has also expressed keenness to arrange for necessary funds to clear
the dues of WBIDC. However as the SEBI order is still subsisting, the
funds can be infused only after order from SEBI is received.
The detailed project report for the refinery project has been updated
by M/s Chemtex Global Engineers Pvt. Ltd. Based on the desired
configuration. Hardt group is in the process of discussions with
leading European contractors for implementation of the project on
turnkey EPC basis. DIRECTORS
Mr. Deep Kumar Rastogi retires by rotation as required under the
Companies Act, 1956 and being eligible, offers himself for
reappointment.
Mr. Sameer Rajpal was co-opted as Additional Director on the Board of
the Company with effect from January 11, 2012 and as such holds office
upto the ensuing Annual General Meeting. Notice from a shareholder
together with necessary deposit proposing his name as Director has been
received.
Mr. B. Srinivasa Rao, Director of the Company retired from the Board on
September 27, 2011. Your directors record their appreciation for the
services and support rendered by him during his tenure on the Board of
the Company.
FIXED DEPOSITS
Company has not accepted any deposit under section 58A of the Companies
Act, 1956, during the financial year under review.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement with the Stock Exchange,
a compliance report on Corporate Governance is annexed as part of the
Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956 with respect to the Directors' Responsibility Statement,
the Directors confirm on the basis of information placed before them by
the Management and Auditors:-
1. That in the preparation of the annual accounts for the Financial
Year ended March 31, 2012, the applicable Accounting Standards have
been followed;
2. That the Company has selected appropriate accounting policies and
applied them consistently and made judgement and estimates that were
reasonable and prudent so as to give a true and fair state of the
affairs of the Company at the end of the financial year and of the
Profit and Loss of the Company for the year under review;
3. That the Company has taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
4. That the accounts of the Company for the financial year ended March
31, 2012 have been prepared on a going concern basis.
CODE OF CONDUCT
The Code of Conduct, as adopted by the Board of Directors, is
applicable to all Directors, Senior Management and Employees of the
Company. This Code is based on fundamental principles, viz. good
corporate governance and good corporate citizenship. The Code covers
Company's commitment to sustainable development, concern for
occupational health, safety and environment, a gender friendly
workplace, transparency and auditability and legal compliance.
AUDITORS' REPORT
Auditors' Report read together with Annexures referred to in
Paragraph 3 of the Auditors' Report do not contain any qualification
and do not call for any explanation/clarification.
AUDITORS
The Members of the Company in the Annual General Meeting held on
September 27, 2011 had appointed M/s. Walker Chandiok & Co., Chartered
Accountants, New Delhi and M/s. Arun K. Gupta & Associates, Chartered
Accountants, New Delhi as Statutory Auditors of the Company for the
financial year ending March 31, 2012.
When the Company informed M/s Walker Chandiok & Co., Chartered
Accountants about their appointment, they have expressed their
inability to be the auditors for the Financial Year ending March 31,
2012 vide their letter October 25, 2011. In view of this, M/s. Arun K.
Gupta & Associates, Chartered Accountants who had accepted the
appointment, continued to be the sole Statutory Auditors of the Company
for the financial year ending March 2012.
M/s. Arun K. Gupta & Associates, Chartered Accountants, New Delhi
retire at the forthcoming Annual General Meeting and have been auditors
for the last four Financial Years. In line with the guidelines on the
Corporate Governance the Audit Committee and Board has recomended to
appoint new Auditor for the financial year 2012-13. Accordingly, it is
proposed to appoint M/s. Kanu Doshi Associates, Chartered Accountants,
Mumbai as Company's Statutory Auditors for the Financial Year
2012-13.
LISTING OF SECURITIES
Your Company's securities are currently listed with Bombay Stock
Exchange. The Company's Global Depository Receipts (GDRs) are listed
at Luxembourg Stock Exchange. The Company has paid the listing fees to
Bombay Stock Exchange and Luxembourg Stock Exchange for the financial
year 2012- 2013 and Calendar Year 2012 respectively.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUTGO
The prescribed details as required under Section 217(1)(e) of the
Companies Act, 1956 read with the Companies (Disclosure of Particulars
in the Report of Board of Directors) Rules, 1988 are not applicable to
our type of Company.
PARTICULARS OF THE EMPLOYEES
There is no employee drawing the salary as prescribed under Section
217(2A) of the Companies Act, 1956 read with Companies (Particulars of
Employees) Rules, 1975.
FOREIGN EXCHANGE
The details of the foreign exchange earnings and out go during the year
have been given in the significant accounting policies and notes to
accounts.
ACKNOWLEDGEMENT
The Directors have pleasure in recording their appreciation of the
assistance extended to the Company by various officials of the Central
Government, the State Government and participating Financial
Institutions. The Directors would like to express their appreciation of
the co-operation extended by the Company's bankers and employees.
For and on behalf of the Board
New Delhi Deep Kumar Rastogi
August 13, 2012 Executive Chairman
Mar 31, 2011
Dear Members,
The Twenty Seventh Annual Report together with the Audited Statement of
Accounts of the Company for the year ended March 31, 2011 is being
submitted.
FINANCIAL RESULTS
(Rs. in lakhs)
Particulars 2010-2011 2009-2010
Sales and other Income - -
Profit/(Loss) before Depreciation, - -
Interest, Prior Period Expenses
Less: Interest - -
Less: Depreciation - -
Less: Prior Period Expenses - -
Profit/(Loss) before Tax - -
Income Tax - -
Liabilities Written Back net - -
Profit/(Loss) after Income Tax - -
Balance carried forwarded (674.67) (674.67)
from previous year
Net Profit/(Loss) transferred (674.67) (674.67)
to Balance Sheet
EPS (In Rs.) - -
DIVIDEND
As the Company is in the process of implementing the refinery project,
your Directors have not recommended any dividend.
PROGESS OF THE PROJECT
During the financial year 2010-2011, the Company has made the
significant progress in the direction of implementing refinery project.
The Company has successfully tied up with Hardt Group, Austria, which
is primarily focused in Energy sector, by signing the Assets Purchase
Agreements with entities managed by it. The group had invested in used
refinery equipments which incidentally when combined with the German
refinery bought by the Company can enable it to attain a refining
capacity of 10 MMTPA.
The total cost of the equipments from Tagore Investments SA is US $
275,000,000 (US Dollars Two Hundred Seventy Five Million only). The
total cost of the equipments from Amber Energy SA is US $ 142,000,000
(US Dollars One Hundred Forty Two Million only). The aggregate cost of
both the refineries amounting to US $ 417,000,000 (US $ Four Hundred
Seventeen Million only), will be paid as under:
1. US $ 317,000,000 (US Dollars Three Hundred Seventeen Million only)
by way of issue of Global Depository Receipts of equivalent amount to
the suppliers of the equipments viz. Amber Energy SA, Panama (US $ 142
mn) and Tagore Investments SA, British Virgin Islands (US $ 175mn).
2. US $ 100,000,000 (US Dollars One Hundred Million only) in Cash after
achieving financial closure for the project.
The application to the Central Government has been made for issue of
equity in the form of Global Depository Receipts (GDR) against purchase
of refinery equipments under the said Assets Purchase Agreements.
Hardt group has subscribed to the Equity of the Company to the tune of
US $ 2.7 million by means of preferential allotment and is expected to
invest further to take care of some of the working capital
requirements. The Company also made the preferential allotment to Nyra
Holdings Private Limited, a promoter group Company.
Simultaneously, the Contract for Purchase and sale of Assets related to
a decommissioned 90000 bpd Oil Refinery with Lohrmann International
GmbH was renegotiated modifying the scope of work, purchase
consideration and payment schedule. However as the Company was not able
to meet the payment deadlines, the contract was cancelled. But, the
Company is still trying its best to get alternate payment options so
that the Company doesn't lose the equipment.
The Ministry of Environment and Forests (MOEF) has been approached for
obtaining approval for the upward revision in capacity from 5 MMTPA to
10 MMTPA. The Company has also requested West Bengal Government for
extension of time for payment of consideration for sub leased land and
extension of fiscal incentives for enhanced capacity of the project.
WBIDC has extended the time till September 30, 2011 but the Company has
requested it to extend till March 31, 2012 which is receiving their
attention.
Hardt group is trying to get offers for EPC contract from some of the
renowned European contractors and it is likely to be concluded soon.
Chemtex Global Engineers Private Limited which prepared the Detailed
Feasibility Report for the lenders earlier is presently updating the
report for the enhanced capacity of 10 MMTPA.
DIRECTORS
Mr. B. Srinivasa Rao retires by rotation as required under the
Companies Act, 1956 and being eligible, offers himself for
reappointment.
FIXED DEPOSITS
Company has not accepted any deposit under section 58A of the Companies
Act, 1956, during the financial year under review.
CORPORATE GOVERNANCE
The Company has complied with the mandatory provisions of Corporate
Governance as prescribed in the Listing Agreement with the Stock
Exchanges. A separate report on Corporate Governance is included as a
part of the Annual Report along with the Certificate on its compliance.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956 with respect to the Directors' Responsibility Statement, the
Directors confirm on the basis of information placed before them by the
Management and Auditors: -
1. That in the preparation of the annual accounts for the financial
year ended March 31, 2011 the applicable Accounting Standards have been
followed;
2. That the Company has selected appropriate accounting policies and
applied them consistently and made judgement and estimates that were
reasonable and prudent so as to give a true and fair state of the
affairs of the Company at the end of the financial year under review;
3. That the Company has taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
4. That the accounts of the Company for the financial year ended March
31, 2011 has been prepared on a going concern basis.
CODE OF CONDUCT
The Code of Conduct, as adopted by the Board of Directors, is
applicable to all Directors, Senior Management and Employees of the
Company. This Code is based on fundamental principles, viz. good
corporate governance and good corporate citizenship. The Code covers
Company's commitment to sustainable development, concern for
occupational health, safety and environment, a gender friendly
workplace, transparency and auditability and legal compliance.
AUDITORS' REPORT
With regard to the qualification in the Auditors' Report read together
with Annexure referred to in Paragraph 3 of the Auditors' Report, the
explanation is as under:
Since the Company is setting up a refinery project, the exchange
differences, interest on outstanding statutory dues and certain
indirect expenses not directly attributable to construction have been
taken in the statement of Pre- operative Expenses, which forms part of
Capital Work in Progress. The above accounting treatment is in
accordance with the clarification given by the Department of Company
Affairs (Letter No. 2/17/64-PR, dated 29-1- 1964). However, at the time
of allocation of Pre-operative Expenses to the respective assets on
commissioning of the project, these foreign exchange gain/loss and
other indirect expenses not directly attributable to construction shall
not be capitalized.
Based on the opinion from an independent eminent lawyer and in the
light of certain court judgements, certain services, rendered by
foreign suppliers mainly in connection with the purchase of plant and
machinery, have been considered to be part of supply of plant and
machinery and the Company has been advised that there would be no
liability on account of tax deducted at source and service tax.
Accordingly, service tax and tax deducted at source amounting to Rs.
5,437,653 and Rs. 6,001,848 respectively has been derecognised in the
financial statements and interest cost for non payment of the tax
deducted at source for the period from January 1, 2011 to March 31,
2011 amounting to Rs. 218,407 has not been provided for in the
financial statements.
Further, in the light of certain court judgements and in line with the
Company's position in its income tax returns for the previous years,
the interest income earned in those years has been considered to be
capital in nature and accordingly the provision for income tax
(including of interest thereon) created in respect thereof amounting to
Rs. 56,165,790 in those years has been derecognized in the financial
statements for the year ended March 31, 2011 and also the interest
thereon for the period from January 1, 2011 to March 31, 2011 amounting
to Rs. 2,389,182 has not been provided for in the financial
statements.
AUDITORS
The Company's Auditors M/s. Walker, Chandiok & Co., Chartered
Accountants, New Delhi and M/s. Arun K. Gupta & Associates, Chartered
Accountants, New Delhi, retire at the forthcoming Annual General
Meeting and are eligible for re-appointment. M/s. Walker, Chandiok &
Co., Chartered Accountants, New Delhi and M/s. Arun K. Gupta &
Associates, Chartered Accountants, New Delhi have submitted the
certificate under Section 224(1B) of the Companies Act, 1956 confirming
that their appointment as joint Statutory Auditors, if made, shall be
in accordance with the said section.
MANAGEMENT DISCUSSION & ANALYSIS
The Management Discussion & Analysis Report for the year under review,
as stipulated under Clause 49 of the Listing Agreement is presented in
a separate section forming part of the Annual Report.
LISTING OF SECURITIES
Your Company's securities are currently listed with Bombay Stock
Exchange. The Company's Global Depository Receipts (GDRs) are listed at
Luxembourg Stock Exchange. The Company has paid the listing fees to
Bombay Stock Exchange and Luxembourg Stock Exchange for the financial
year 2011-2012 and Calendar Year 2011 respectively.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION
The prescribed details as required under Section 217(1)(e) of the
Companies Act, 1956 read with the Companies (Disclosure of Particulars
in the Report of Board of Directors) Rules, 1988 are not applicable to
our type of Company.
PARTICULARS OF THE EMPLOYEES
There is no employee drawing the salary as prescribed under Section
217(2A) of the Companies Act, 1956 read with Companies (Particulars of
Employees) Rules, 1975.
FOREIGN EXCHANGE
The details of the foreign exchange earnings and out go during the year
have been given in the schedules to the accounts.
ACKNOWLEDGEMENT
The Directors have pleasure in recording their appreciation of the
assistance extended to the Company by various officials of Central
Government, State Government and participating financial Institutions.
The Directors would like to express their appreciation of the
co-operation extended by the Company's bankers and employees.
For and on behalf of the Board
(Deep Kumar Rastogi)
Executive Chairman
New Delhi
August 10, 2011
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