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Directors Report of N K Industries Ltd.

Mar 31, 2014

Dear Members,

The Directors present their 26th Report together with Audited Statements of Accounts of the Company for the year ended on 31st March, 2014.

FINANCIAL RESULTS:

(Rs in lacs) Particulars 2013-14 2012-13

Export Sales Nil Nil

Domestic Sales of Product & Other Income 33976.66 44318.60

Total Income 35708.30 45324.03

Profit/(Loss) before Tax & Depreciation (275.65) (17707.41)

Deduct: Depreciation 1981.48 2424.66

Less: Transfer from Revaluation Reserves (1509.18) ( 2052.30)

Profit/(Loss) before Exceptional Items (747.94) (18079.76)

(Add)/ Less: Exceptional Items 4257.52 226.59

Profit/(Loss) before prior period items and tax (5005.46) (17853.18)

Deduct : Prior Period Adjustment - (10454.39)

Profit before tax for the year (5005.46) (28307.57)

(Add)/ Less: Deferred Tax - -

Profit/(Loss) after Tax (5005.46) (28307.57)

OPERATIONS

During the year, the company continued to sell manufactured goods on its own as against also the job work previously, as the main activity. The Company''s sales turnover decreased to Rs 33,976.66 Lacs. After providing for depreciation of Rs 1981.48 lacs, there was loss in the current year amounting to Rs 5,005.46 Lacs as against Loss of Rs 28,307.56 Lacs in the previous year.

As per the compromise settlements arrived at, the Company has paid off all the outstanding balances with all the banks. On having paid off all the dues of secured creditors, the BIFR has disposed off our first reference case no. 35/1999. It has however agreed to register our subsequent references and declared our unit as a sick one. The BIFR has, therefore, appointed Canara Bank as an Operating Agent vide its Order dated 1st March, 2012 to prepare a draft rehabilitation scheme which is in progress. The draft rehabilitation scheme is under preparation.

DIVIDEND

Your Directors express their inability to recommend any dividend for the year 2013-14 owing to accumulated losses incurred by the Company.

DIRECTORS:

Mr. Nilesh K. Patel(DIN: 00244115)shall retire by rotation in terms of the Articles of Association of the Company at the ensuing Annual General Meeting of the Company. He, however, being eligible, has offered himself for reappointment.

Mr. Jayesh D. Thakkar (DIN: 01247039) and Mr. Jaimin V. Modi (DIN: 00113689) were appointed as additional directors of the Company w.e.f. 1st April, 2014.

Ms. Kinjal B. Patel (DIN: 06896114) and Dr. Bharat J. Patel (DIN: 00944269) were appointed as additional directors of the Company w.e.f. 16th July, 2014.

Mr. Ashokbhai Patel (DIN: 05323213) and Mr. Ashvinbhai Patel (DIN: 01622437) ceased to be directors of the Company on account of resignation w.e.f. 1st April, 2014.

All the existing Independent Directors of the Company viz. Mr. Jayesh D. Thakkar (DIN: 01247039), Mr. Jaimin V. Modi (DIN: 00113689), Ms. Kinjal B. Patel (DIN: 06896114) and Dr. Bharat J. Patel (DIN: 00944269) are proposed to be appointed for the period of 5 years under section 149 of the Companies Act, 2013 read with revised clause 49 of the listing agreement.

DIRECTORS’ RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, the Directors state that

i in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii 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 or loss of the Company for that period;

iii 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;

iv the Directors had prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

As per Clause 49 of the Listing Agreement with Stock Exchanges, the Report on Corporate Governance is attached as Annexure to the Directors'' Report.

AUDITORS AND AUDITORS'' REPORT

M/s Parikh and Majmudar, Chartered Accountants, Ahmedabad retire at the ensuing Annual General Meeting and are eligible for reappointment.

The Company has obtained from them the written consent to such appointment and a certificate to the effect that their appointment as Auditors of the Company from conclusion of the 26th AGM to the conclusion of 31st AGM, subject to ratification by members at every Annual General Meeting if made, will be in accordance with of provisions of Section 139 of the Companies Act, 2013 and such conditions as may be prescribed.

The members are requested to consider the matter of appointment of Auditors and also to fix their remuneration.

There are certain qualifications made by the Auditors in their report for which the Board of Directors hereby give its comments/explanation as under:

1. As Company has incurred huge losses in past years and the net worth of the Company is negative, the Board of Directors has already made reference to BIFR and BIFR has appointed the Canara Bank as an Operating agency vide its order dated 1st March, 2012 to prepare a draft rehabilitation scheme which is in progress. Once the Draft Rehabilitation Scheme being finalized by the operating agency i.e. Canara Bank and approved by the BIFR, the Company''s management is hopeful to revive the Sick Industrial Unit.

As regards winding up petition same has been pending before Hon''ble Gujarat High Court, no decision/order has been given in this regard.

2. National Spot Exchange Limited (NSEL) has served a notice to N K Proteins Limited who was a trading and clearing member at NSEL and N K Industries Limited was only a client Company of Trading Member i.e. N K Proteins Limited. Further to state that the overall dues towards the National Spot Exchange is not yet crystallized and the matter is still pending before the Bombay High Court.

3. The Investigation which was carried out by the Income Tax Authorities and Economic Offence Wing of Mumbai Police (EOW) are still carried out by the said authorities and we are still in the process of providing further details and clarifications in the said matter and therefore the said investigation as reported by the Auditor are pending before the Income Tax Authorities and EOW.

4. The company has not obtained confirmation from all the trade creditors, trade debtors and parties having advances and loans. Hence, the notes to accounts mention that the balance is subject to confirmation. However, due to this, no significant changes are expected.

5. As regards, the non provision of sales tax liabilities of Rs 130.88 Lacs for the year under review it is to be explained that the said liabilities is disputed by the Company and the Company is hopeful of getting the said demand dismissed in appeal and hence decided not to make any provision for the same.

As regards, the non provision of sales tax liabilities of Rs 5423.55 Lacs, for the previous years and Rs 130.88 Lacs for the year under review it is to be explained that the said liabilities is disputed by the Company and the Company is hopeful of getting the said demand dismissed in appeal and hence decided not to make any provision for the same.

6. The company has not provided for interest on advances of Rs 2920.25 Lacs due to the fact that the said amount of advance is considered as doubtful.

7. Once the Draft Rehabilitation Scheme being finalized by the Operating Agent Canara Bank and approved by the BIFR, the Company''s management is hopeful to revive a Sick Industrial Unit.

PARTICULARS OF EMPLOYEES

No employee was employed during the year drawing remuneration exceeding the limits as prescribed under Section 217(2A) of the Companies Act, 1956. Hence the information under Section 217(2A) of the Companies Act, 1956 is not applicable.

PERSONNEL

The relations between the employees and the management remained cordial during the year under review.

OTHER INFORMATION

Information required under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 with respect to conservation of energy, technology absorption and foreign exchange earning/outgo is appended in Annexure hereto, which forms part of this report.

AKNOWLEDGEMENT

Your Directors express their sincere thanks and appreciation to the promoters, shareholders and customers for their constant support and co operation.

Your Directors also place on record their gratitude to the Banks, Institutions and Government Departments for their confidence reposed in the Company.

For or on behalf of the Board

sd/- Place : Ahmedabad Nimish K. Patel Date : 16th July, 2014 Chairman & Managing Director


Mar 31, 2013

DEAR MEMBERS

The Directors present their 25th Report together with Audited Statements of Accounts of the Company for the year ended on 31st March, 2013.

FINANCIAL RESULTS (Rs. in Lacs)

Particulars 2012-13 2011-12

Export Sales Nil Nil

Domestic Sales of Product & Other Income 44098.25 106830.60

Total Income 44098.25 106830.60

Profit/(Loss) before Tax & Depreciation (17748.45) (7758.42)

Deduct: Depreciation 2424.66 203.39

Less: Transfer from Revaluation Reserves (2052.30) -

Profit/(Loss) before Tax (18121.20) (7961.81)

(Add)/ Less: Exceptional Items 268.03 -

Profit/(Loss) before prior period (17853.17) (7961.81) items and tax

Deduct: Prior Period Adjustment (10454.39) -

Profit before tax for the year (28307.56) (7961.81)

(Add)/Less: Deferred Tax - (125.01)

Profit/(Loss) after Tax (28307.56) (7836.80)

Balance brought forward from previous year (14528.47) (6691.66)

Amount carried to Balance Sheet (42836.03) (14528.47)

OPERATIONS

During the year, the company continued to sell manufactured goods on its own as against also the job work previously, as the main activity. The Company''s sales turnover was decreased to Rs. 43188.76 Lacs. After providing for depreciation of Rs. 2424.66 lacs, there was loss In the current year amounting to Rs. 28307.56 Lacs as against Loss of Rs. 7836.80 Lacs in the last year.

As per the compromise settlements arrived at, the Company has paid off all the outstanding balances with all the banks. On having paid off all the dues of secured creditors the BIFR has disposed off our first reference case no. 35/1999. It has however agreed to register our subsequent references and declared our unit as a sick one. The BIFR has therefore, appointed the Canara Bank as an Operating agent vide its order dated 1st March, 2012 to prepare a draft rehabilitation scheme which is in progress.

DIVIDEND

Your Directors express their inability to recommend any dividend for the year 2012-13 owing to accumulated losses incurred by the Company.

DIRECTORS:

Mr. Ashwin P. Patel shall retire by rotation in terms of the Articles of Association of the Company at the ensuing Annual General Meeting of the Company. He, however, being eligible, has offered himself for reappointment.

Mr. Ashok B. Patel and Mr. Hasmukhbhai K. Patel were appointed as additional director of the Company w.e.f. 13th March, 2013 and 1st June, 2013 respectively.

Mr. Maitray D. Patel and Dr. Bharat J. Patel, Directors of the Company ceased to be director of the Company on account of resignation w.e.f. 5thOctober, 2012 and 14th March, 2013 respectively.

DIRECTORS'' RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, the Directors state that

i in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii 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 or loss of the Company for that period;

iii 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;

iv the Directors had prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

As per Clause 49 of the Listing Agreement with Stock Exchanges, the Report on Corporate Governance is attached as Annexure to the Directors'' Report.

AUDITORS AND AUDITORS'' REPORT

M/s Rajiv shah & Associates., Chartered Accountants retire at the ensuing Annual General Meeting and are eligible for reappointment as Auditors upto the next Annual General Meeting. You are requested to appoint the Auditors and fix their remuneration.

There are certain qualifications made by the Auditors in their report for which the Board of Directors hereby given its comments/explanation as under:

1. As Company has incurred huge losses in past years and the net worth of the Company is negative, the Board of Directors has already made reference to BIFR and BIFR has appointed the Canara Bank as an Operating agency vide its order dated 1st March, 2012 to prepare a draft rehabilitation scheme which is in progress. Once the Draft Rehabilitation Scheme being finalized by the operating agency i.e. Canara Bank, is approved by the BIFR the

Company''s management is hopeful to revive the Sick Industrial Unit.

2. The Company has incurred trading loss of Rs. 176.34 crores on account of purchase and sales of commodities through National Spot Exchange Limited. As this trading is without any physical delivery of goods, the said amount of trading loss has been debited to profit & loss statement as trading loss to properly reflect the nature of transaction.

3. The company has not obtained confirmation from all the trade creditors, trade debtors and parties having advances and loans. Hence, the notes to accounts mention that the balance is subject to confirmation However due to this, no significant changes are expected.

4. As regards, the non provision of sales tax liabilities of Rs. 5423.55 Lacs, it is to be explained that the said liabilities is disputed, by the Company and the Company is hopeful of getting the said demand dismissed in appeal and hence decided not to make any provision for the same.

5. The company has provided for interest on advances of Rs. 1171.60 Lacs due to the fact that the said amount of advance is considered as doubtful.

6. Once the Draft Rehabilitation Scheme being finalized by the operating agent Canara Bank is approved by the BIFR, the Company''s management is hopeful to revive a Sick Industrial Unit.

7. There has been prior period adjustment to the extent of Rs. 104.54 Crores. These adjustments had become necessary due to wrong accounting during the last year and are in the nature of rectification during the year and the net difference has been debited to the profit & loss account.

PARTICULARS OF EMPLOYEES:

No employee was employed during the year drawing remuneration exceeding the limits as prescribed under Section 217(2A) of the Companies Act, 1956. Hence the information under Section 217(2A) of the Companies Act, 1956 is not applicable.

PERSONNEL

The relations between the employees and the management remained cordial during the year under review.

OTHER INFORMATION

Information required under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 with respect to conservation of energy, technology absorption and foreign exchange earning/outgo is appended in Annexure hereto, which forms part of this report.

AKNOWLEDGEMENT

Your Directors express their sincere thanks and appreciation to the promoters, shareholders and customers for their constant support and co-operation.

Your Directors also place on record their gratitude to the Banks, Institutions and Government Departments for their confidence reposed in the Company.

For and on behalf of the Board

sd/- Nimish K. Patel Chairman & Managing Director

Date: 30th September, 2013

Place: Ahmedabad


Mar 31, 2012

Dear members,

The Directors present their 24th Report together with Audited Statements of Accounts of the Company for the year ended on 31st March, 2012.

FINANCIAL RESULTS (Rs. in Lacs)

Particulars 2011-12 2010-11

Export Sales Nil Nil

Domestic Sales of Product 547073.08 213260.69

Total Sales 547073.08 213260.69

Job work Income --- ---

Profit/(Loss) before Tax & Depreciation (7758.42) (1055.20)

Deduct: Depreciation 203.39 183.80

Profit/(Loss) before Tax (7961.81) (1239.00)

Profit/(Loss) before prior period (7961.81) (1239.00) items and tax

Deduct: Current Income Tax - (4.00)

Deduct: Tax (Fringe Benefit Tax) -

Deduct: Prior Period Adjustment - 5.53

(Add)/ Less: Deferred Tax Income - (125.01) (29.05) Current year

Profit/(Loss) after Tax (7836.80) (1211.56)

Balance brought forward from previous year (6691.66) (5480.06)

Amount carried to Balance Sheet (14528.47) (6691.66)

OPERATIONS

During the year, the company continued to sell manufactured goods on its own as against also the job work previously, as the main activity. The Company''s sales turnover was increased to Rs. 545277.81 Lacs. After providing for depreciation of Rs. 203.39 lacs, there was loss in the current year amounting to Rs. 7961.81 Lacs as against Loss of Rs. 1239 Lacs in the last year.

As per the compromise settlements arrived at, the Company has paid off all the outstanding balances with all the banks.

DIVIDEND

Your Directors express their inability to recommend any dividend for the year 2011-12 owing to accumulated losses incurred by the Company.

DIRECTORS:

There were no changes in the Board of Directors of the Company during the year under review. Maitray D Patel shall retire by rotation in terms of the Articles of Association of the Company at the ensuing Annual General Meeting of the Company. He, however, being eligible, has offered himself for reappointment.

DIRECTORS'' RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, the Directors state that

i in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii 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 or loss of the Company for that period;

iii 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 die Company and for preventing and detecting fraud and other irregularities;

iv the Directors had prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

As per Clause 49 of the Listing Agreement with Stock Exchanges, the Report on Corporate Governance is attached as Annexure to the Directors'' Report

AUDITORS'' REPORT

The observations made by the Auditors contain the explanations which are self-explanatory and therefore do not call for any further explanation under Section 217(3) of the Companies Act, 1956.

PARTICULARS OF EMPLOYEES

No employee was employed during the year drawing remuneration exceeding the limits as prescribed under Section 217(2A) of the Companies Act, 1956. Hence the information under Section 217(2A) of the Companies Act, 1956 is not applicable.

AUDITORS

M/s Rajiv shah & Associates., Chartered Accountants retire at the ensuing Annual General Meeting and are eligible for reappointment as Auditors upto the next Annual General Meeting. You are requested to appoint the Auditors and fix their remuneration.

PERSONNEL

The relations between the employees and the management remained cordial during the year under review.

OTHER INFORMATION

Information required under Section 217(I)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 with respect to conservation of energy, technology absorption and foreign exchange eaming/outgo is appended in Annexure hereto, which forms part of this report.

For or on behalf of the Board

Nimish K. Patel Chairman & Managing Director

Date: 30th May, 2012

Place: Ahmedabad


Mar 31, 2010

The Directors present their 22nd Report together with Audited Statements ot Accounts of the Company for the year ended on 31 st

March, 2010.

FINANCIAL RESULTS (Rs. in Lacs

2009-10 2008-09 Particulars Nil Nil

Export Sales

DomesicSales 70551.49 1447.24

Total Sales 70551.49 1789 54

Job work Income 115.55 1789.54

Profit/(Loss) before Tax a Depreciation (513.00) 2.88

Deduct: Depreciation 186.92 211.10

ProWfLoss) before Tax (699.92) (208.22)

Profit before prior period items and tax (699.92) (208.22)

Deduct: Current Income Tax - 21 00

Deduct: Tax (Fringe Benefit Tax) 0.47 1.27

Deduct: Previous year expenses (12.74) 13.91

Deduct: Deferred Tax - Previous year - 254.18

(Add)/ Less: Deferred Tax Income - Current year 11-11 (111 -23)

Profit/(Loss) after Tax (698.76) (387.35)

Balance brought forward from previous year (4781.30) (4393.95)

Amount carried to Balance Sheet (5480.06) (4781.30)

OPERATIONS

During the year, the company continued to sell manufactured goods on its own in addition to the job work as the main activity. The Companys sales turnover was increased to Rs. 70551,49Lacs and it earned job work charges of Rs. 115.55 Lacs as against Rs. 1789.54 Lacs in the previous year. After providing for depreciation of Rs. 186.91 lacs, there was loss in the current yeaf amounting to Rs. 698.76 Lacs as against Loss of Rs. 387.35 Lacs in the year 2008-09. The above loss of Rs.698.76Lacs is inclusive of write off of principal ICD of Rs.536.37 Lacs (P.Y. Nil) as against net loss ot Rs. 387.35 Lacs in the previous year. As per the compromise settlements arrived at, the Company has paid off all the outstanding balances with all the banks and IDB! save and except the Kolak Mahindra Bank Ltd. No Due Certificates are received/ in the process of receiving from the said Banks/ IDBI. Thereafter the Recovery Certificates issued by DRT, Ahmedabad will be treated as withdrawn. The consent terms executed with the Kotak Mahindra Bank Ltd. are filed in DRT, Mumbai and the Company is making repayments of their dues accordingly. Having generally paid off with almost all banks, there is no doubt of distinct possibility of the Company achieving its net worth positive in a short period and thereby the unit will be out of sickness in terms of the Sick Industrial Companies (Special Provisions) Act, 1985.

DIVIDEND

Your Directors express their inability to recommend any dividend for the year 2009-10 owing to accumulated losses incurred by the Company.

DIRECTORS:

Mr. Jayesh D. Thakkar shall retire by rotation in terms of the Articles of Association of the Company at the ensuing Annual General Meeting of the Company. He, however, being eligible, has offered himself for reappointment.

DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, the Directors state that:

i in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii 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 or loss of the Company for that period;

iii 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;

iv the Directors had prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

As per Clause 49 of the Listing Agreement with Stock Exchanges, the Report on Corporate Governance is attached as Annexure to the Directors Report

AUDITORS REPORT

"me observations made by the Auditors contain the explanations which are self-explanatory and therefore do not call tor any further explanation under Section 217(3) of the Companies Act, 1956.

PARTICULARS OF EMPLOYEES

No employee was employed during the year drawing Rs.24 lacs per annum or Rs. 2,00,000 per month Hence information under Section 217(2A) of the Companies Act, 1956 is not applicable.

AUDITORS

M/s Chandulal M. Shah & Co., Chartered Accountants retire at the ensuing Annual General Meeting and are eligible for reappointment as Auditors upto the next Annua! General Meeting. You are requested to appoint the Auditors and fix their remuneration.

PERSONNEL

The relations between the employees and the management remained cordial during the year under review.

OTHER INFORMATION

Information required under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 with respect to conservation of energy, technology absorption and foreign exchange earning/outgo is appended in Annexure hereto, which forms part of this report.

For or on behalf of the Board Date: May 29, 2010

Place: Ahmedabad Nimish K. Patel

Chairman & Managing Director

 
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