Mar 31, 2014
The Directors have pleasure in presenting their Sixteenth Annual Report, together with the Audited Accounts of the Company, for the year ended March 31, 2014 as follows:
(Amount in Rs.)
Year 2013-13 Year 2012-13
I. Continuing Operations
Sales and Operating Income 126,36,87,880 62,67,74,810
Other Income 10,63,48,140 1,16,00,8092
Total Income 137,00,36,020 74,27,82,902
Operating Expenditure 132,93,40,282 63,17,92,414
Profit Before Interest & 4,06,95,738 11,09,90,488 Depreciation
Less : Interest 8,82,20,178 8,10,49,903
Less : Depreciation/amortization 2,45,85,443 2,44,44,004
Net Profit/(Loss) Before Tax and (7,21,09,883) 54,96,581 Exceptional Items
Loss on sale of Property & (11,36,87,809) (10,22,67,961) Provision for contigency
Prior period items (17,96,069) 70,16,625
Net Profit/(Loss) Before Tax (18,75,93,761) (8,97,54,755)
Less : Current Tax - (9,08,531)
Less : Deferred Tax - (6,93,34,646)
Net Profit/(Loss) After Tax (18,75,93,760) (15,99,97,932) from continuing operations
Whilst the Turnover for the year has increased by 100% i.e. Rs.126.37 Crs against Rs.62.68 Crs in the previous year, the EBITDA was lower at Rs.4.07 Crs against Rs.11.10 Crs of FY 2012-13. Slow down in the company''s major customer segment i.e. Infrastructure and realty sector, on account of overall recessionary business conditions coupled with liquidity constrains have impacted sales as well as the margins of the company during the year. The loss at the net level of Rs.18.76 Cr was mainly due to Loss of sale of securities of Rs.3.07 Crs and provision for contingencies Rs.8.50 Crs.
Consolidated Accounts :
Your Company has three Subsidiary Companies namely 1) Sejal Bluecity Realtors Private Limited 2) Sejal Bluecity Developers Private Limited 3) Sejal Bluecity Buildcon Private Limited.
In accordance with the requirement of Accounting Standards AS 21 (read with AS 23), issued by the Institute of Chartered Accountants of India, the consolidated Accounts of the company and its subsidiaries are annexed to this report.
In terms of the General Circular No.2/2011 dated 8th February 2011, issued by the Government of India, Ministry of Corporate Affairs, the Annual Report of the Subsidiary Companies are not annexed to this Report. Members desiring to have a copy of Audited Annual Accounts and the related detailed information of the said subsidiaries may write to the Company Secretary at the registered office of the company and they will be provided with the same upon such a request. Annual Accounts of these subsidiary Companies will also be kept for inspection of the Members at the Registered office of the Company as well as at the Registered office of the Subsidiary Companies.
During the year under review your Company''s Authorized Share Capital remained unchanged at Rs. 60,00,00,000/- (Rupees Sixty Crores Only) comprising of 6,00,00,000 Equity Shares of Re. 10/- each.
During the year under review Issued, Subscribed and Paid up Share Capital of your Company also remained unchanged at Rs. 33,55,00,000/-(Rupees Thirty Three Crores Fifty Five Lacs Only) comprising of 3,35,50,000 Equity Shares of Re. 10/- each Equity Shares each.
The trading in the equity shares of your Company is under compulsory dematerialization mode. As of date, equity shares representing 99.07% of the equity share capital are in dematerialized form. As the depository system offers numerous advantages, members are requested to take advantage of the same and avail of the facility of dematerialization of your Company''s shares.
In view of the loss for the year and the accumulated losses of the previous year, your Directors are unable to recommend any dividend for the year ended March 31, 2014.
During the year under review the name of your Company was changed from "Sezal Glass Limited" to "Sejal Glass Limited".
CHANGE OF NAME OF COMPANY
During the year under review the name of your Company was changed from "Sezal Glass Limited" to "Sejal Glass Limited".
The Board consists of Executive and Non- Executive independent directors including who have wide and varied experience in different disciplines of corporate functioning.
Mr. Praful Nisar, Director of the Company is liable to retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for reappointment.
In terms of Section 149 of the Companies Act, 2013, which has come into force with effect from April 01, 2014, an Independent Director shall hold office for a term up to five consecutive years on the Board of a company and their office shall not be liable to retire by rotation.
In compliance with the provisions of Section 149 read with Schedule IV of the Act, the appointment of Mr. Rengrajan Ramaswamy and Mr. Praful Nisar as Independent Directors is being placed before the Members in General Meeting for their approval.
During the year under review the following Directors resigned from the post of Directorship of the Company;
(i) Ms. Parul Mehta with effect from November 14, 2013
(ii) Ms. Sonali Tipre with effect from February 14, 2014
The Board takes this opportunity to place on record its appreciation for the support and invaluable contribution made by both the directors during their tenure as Independent Directors of the Company.
Pursuant to Clause 49 of the Listing Agreement, a report on the Corporate Governance for the year under review along with Auditors'' Certificate regarding Compliance of Corporate Governance form part of this Report.
Your Company has accepted deposits from public in pursuance of section 58A of the Companies Act, 1956 and rules framed under the Companies [Acceptance of Deposits] Rules, 1975. During the period under review, as on 31st March, 2014, the Company has outstanding fixed deposit of Rs.6,12,07,000/-. There has been delays in payment of interest and repayment of matured deposits. Your Company could not service non-cumulative interest on the deposits from July 2013 and monthly interest from June 2013 and also could not make payment of matured deposits from April 2013 on account of severe liquidity constraints.
Your Company has made payments to the Fixed Deposit holders pursuant to the order passed by the Company Law Board to whom Fixed Deposit holders have approached for making payment of their Fixed Deposits.
Your Company intends to service pending interest as well as matured deposit payments on improvement in financials.
DIRECTORS RESPONSIBILITY STATEMENT
Your company''s Directors confirm:
(i) that in the preparation of the annual accounts for the year under review, the applicable accounting standards have been followed;
(ii) that they have selected appropriate 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 financial year 2013-14 and of profit of the company for that year;
(iii) that they have taken proper and sufficient care for the maintenance of adequate accounting records in Annual Report 2013-14 accordance with the provisions of the Companies Act, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and
(iv) that they have prepared the annual accounts for the year ended on March 31, 2014 on a going concern basis.
EMPLOYEE STOCK OPTION PLAN (ESOP)
Your Company had approved ESOP 2012 at the Annual General Meeting of your Company held on September 29, 2012. As on date, your Company has not granted any options under ESOP 2012.
The industrial relations continue to be cordial and harmonious at the manufacturing unit of the Company at Silvassa.
Related party Disclosures:
The Company has made disclosures in compliance with the Accounting Standards on related party disclosures as required by Clause 32 of the Listing Agreement with the Stock Exchanges.
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo.
Information on Conservation of energy, Technology Absorption and Foreign Exchange is given as Annexure to this report.
M/s. S. S. Puranik & Associates, Chartered Accountants retire at the ensuing Annual General Meeting and are eligible for reappointment as statutory auditors of the Company.
* Confirmation of balances from Debtors, Creditors and Loans and Advances: As a process your company has already sent Letters to all major Debtors, borrowers of ICDs and Loans asking them to confirm balances as at 31.3.2014 directly to the Statutory Auditors. The confirmation of balances was obtained from most of the borrowers of ICDs and few Debtors. Follow up is on with the rest to obtain confirmations. As regards Creditors, all major raw materials suppliers i.e. Glass, PVB, Silicon, etc. accounts were reconciled and balances were confirmed by them as at the year end.
* Procedure to assess and provision for Non moving and obsolete Inventory: Your Company is engaged in processing of Clear/Float Glass in to Toughened, Laminated, Insulated and Ceramic frit Glass. Orders vary from customer to customer and as the orders will have to be executed within tight time schedule, Glass and other inventory of various sizes are maintained. Ageing reports of inventory is prepared on periodical basis and reviewed. Management would strengthen the procedure to assess the usefulness of the non-moving inventory and also consider appropriate provision for Inventory no longer useable.
* To strengthen internal control procedure: Management would initiate steps to streamline the systems and procedure with appropriate SOPs.
* Arrears of interest on Public FD, Principle and statutory Liabilities: Due to severe liquidity constraints your company could not repay matured Public FDs and interest in time. Also there were delays in paying various statutory liabilities. Management has initiated various measures to mobilize funds through sale of assets of the company, Liquidation of old and obsolete inventory, recovering Loans and ICDs etc. to meet these liabilities. Your company is working towards paying off the balance Public FDs and all statutory liabilities at the earliest. * Irregularity of Bank accounts: Bankers have classified the credit facilities granted to the company as non-performing and have issued 13(2) & 13(4) notices under SARFAESI Act, 2002. Your company has already approached Debt Recovery Tribunal and obtained stay against 13(4) SARFAESI Act 2002 notice issued by State Bank of Patiala. Management is in discussions with the Bankers to carry out restructuring of the credit facilities, which if carried out would give sufficient time to the company to mobilize/generate funds to regularise the accounts with the banks.
Deferred Tax Asset:
Your company has already drawn up Business plan to Expand Value added Glass processing capacity by setting up units across all major cities in India to cater to the increased demand. This would significantly increase the Revenues and profitability of the company. Towards this your company has initiated steps to identify Land in the NCR and South Indian region. In addition your company has planned
* Procurement of certain machinery and balancing equipment (Double edger cutting machine, Drilling, Grinding and washing machine, etc.,).These machineries will aid in improving productivity and profitability
* Express/Feeder line power connectivity, which will help to obtain continuous power supply and thereby increase the production
However, due to all round economic slowdown as well as tight liquidity conditions your company could not pursue the said plan aggressively. In order to augment resources, the management has initiated certain measures like disposal of un productive assets, recalling of amounts lent as un secured Loans & ICDs, etc. This will improve liquidity and help in expeditious execution of the aforesaid business plan and thereby increase taxable income to absorb current accumulated Losses and to adjust DTA 3 to 5 year''s time horizon.
In conformity with the directives of the Central Government, your Board of Directors has appointed Mr. Vaibahv Joshi, Cost Accountant, having office at A-5, Parvati Rokadiya Cross Lane,Pai Nagar, SVP Road, Borivali (West), Mumbai - 400092 as Cost Auditor under section 233B of the Companies Act 1956, to audit the cost accounts for processing of Glass for the year ending on March 31, 2014. The cost audit report for the year ended March 31, 2014 will be filed in accordance with the provisions of the Companies Act.
PARTICULARS OF EMPLOYEES
Provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended from time to time are not applicable to the Company, since no employee of the Company was in receipt of the remuneration in excess of the limits as specified in the said rules.
This Directors Report and the Management Discussion and Analysis Report may contain certain statements, which are futuristic in nature. Such statements represent the intentions of the Management and the efforts being put in by them to realize certain goals. The success in realizing these goals depends on various factors both internal and external. Therefore, the investors are requested to make their own independent judgments by taking into account all relevant factors before taking any investment decision.
Your Directors acknowledge with gratitude the commitment and dedication of the employees for their untiring personal efforts as well as their collective contributions at all levels that have led to the growth and success of the Company. The Directors would like to thank other stakeholders including lenders and business associates who have continued to provide support and encouragement.
For and on behalf of the Board of Directors Sd/-
Amrut S. Gada Chairman and Managing Director
Place: Mumbai Date: August 14, 2014
Mar 31, 2011
The Directors are delighted to present their Thirteenth Annual Report of the Company and Audited Accounts for the year ended March 31, 2011.
1. FINANCIAL RESULTS
The financial performance of the Company for the financial year ended March 31, 2011 is summarized below:
Year 2010-11 Year 2009-10
Sales and Operating Income 2796.26 448.98
Other Income 30.47 60.04
Total Income 2826.73 509.02
Increase/(Decrease) in stock 115.19 2.71
Gross Income 2941.92 511.73
Operating Expenditure 2835.80 423.87
Profit Before Interest & Depreciation 106.12 87.86
Less : Interest 667.38 38.05
Less : Depreciation/amortization 400.91 26.53
Net Profit Before Tax and Exceptional Items (962.17) 23.28
Less: Exceptional Items
Loss on Imported Machinery returned to supplier - 10.13
Net Profit/(Loss) Before Tax (962.17) 13.15
Less : Current Tax - 1.70
Less : Deferred Tax (323.16) (13.82)
Net Profit/(Loss) After Tax (639.01) 25.27
Less: Prior year expenses 4.98 3.34
Add : Balance b/f from previous year 94.17 72.24
Amount Available for appropriations (549.82) 94.17
Balance Carried to Balance Sheet (549.82) 94.17
2. OPERATIONAL REVIEW.
During the year under review, with the production of float glass coming on stream your Company recorded a growth in top line. Income from operations went up from '448.98 Million in F.Y 2009 -10 to "2796.26 Million in 2010 -11 recording a growth of more than 6 times the previous years figures.
Profit before Depreciation, Interest and Tax stood at" 106.12 Million in the F.Y. 2010 -11 as against the preceding year's figure of "87.86 Million.
However the Company posted a net loss of "639.01 Million during the year under review as compared to a net profit of "25.27 Million in the F.Y. 2009 - 10.The said loss is mainly due to the highly capital intensive nature of the float glass business as well as change in the industry dynamics during the year under review.
3. SALE OF FLOAT GLASS BUSINESS UNDERTAKING
Your Company has entered into a Binding Business Transfer Agreement dated May 31, 2011 with Saint- Gobain Glass India Limited for sale and transfer of its Float Glass business undertaking including the manufacturing assets at Jhagadia, Dist. Bharuch, State of Gujarat as a going concern on a slump sale basis, on the terms and conditions as stipulated therein.
The Company's float glass manufacturing plant came on stream in March 2009 after a delay of about six months from the envisaged date of commencement of production. This delay had lead to a cost over run of about" 1.8 billion, thereby leading to additional bank loan for the project. During the last two financial years there was a steep increase in competition due to unprecedented additional capacities being added, thereby limiting the growth opportunities in the float glass business. Rising raw material & utilities costs, with no upward movement in the sale price of the finished goods, had made it difficult for the Company to operate at ideal economies of scale required for operating the float glass business which was further resulting in negative growth and dilution of shareholders value. The financial position of the Company deteriorated, during the financial year under review. The Board of Directors of the Company had therefore proposed that before the state of business affairs of the Company is further eroded, it was advisable to sell the business undertaking of the Company and concentrate and expand its existing Processing of value addition glass business as well as introduce diversified business activities which will increase shareholders value. Therefore, in the best interest of the shareholders of the Company as well as other stakeholders, the Company decided to sell its float glass business undertaking as a going concern on slump sale basis. The Company has executed a Binding Business Transfer Agreement with Saint - Gobain Glass India Limited for a lump sum consideration of '6860 Million subject to the terms, conditions and provisions set forth in the Business Transfer Agreement.
The approval of the shareholders of the Company for the sale of the Business Undertaking was obtained by passing a resolution by way of Postal Ballot. The result of the Postal Ballot was announced on May 30, 2011.
4. SHARE CAPITAL
Authorised Share Capital of the Company was increased from '450 million to "600 million divided into 60,00,00,000 Equity Shares of Re. 1/- each.
The Paid up Share Capital of the Company has increased from "288 million to "335.50 million divided into 33,55,00,000 Equity Shares of Re.1/- each.
During the year the Company has sub- divided the face value of its equity shares from the existing " 10/- each to Re. 1/- each.
The Company during the year issued and allotted to Brand Equity Treaties Limited (BETL) 2,00,00,000 (Two crores) Equity Shares of Re. 1/- each at an issue price of "9/- per share on preferential basis in accordance with the provisions of the Securities & Exchange Board of India (SEBI) ICDR Regulations 2009.
The Company during the year converted 2,75,00,000 Convertible Warrants of Re.1/- each at an issue price of "4/- each into equivalent equity shares of Re. 1/- each at an issue price of "4/- each to one of its promoter group entity M/s. Sezal Realty and Infrastructure Limited.
Your Directors have not recommended any dividend on the equity shares for the financial year 2010 - 2011 in view of the setting up of the high capital intensive Float glass project and the consequent loss on account of high depreciation and interest during the year under review.
During the year Mr. Mitil R. Chokshi, Ms. Vimla M. Shah and Mr. Praful N. Satra, Independent Directors resigned from the Board of Directors of the Company. The Board hereby accords its sincere appreciation and gratitude for the valuable contribution and services rendered by the Directors who resigned during the year.
Mr. Hasmukh N. Shah and Mr. R. Rengarajan have been appointed as the Directors of the Company with effect from November 13, 2011 in order to fill in the casual vacancy created by the resignation of Mr. Mitil R. Chokshi and Ms. Vimla M. Shah.
Mr. Dilip K. Patel has been appointed as the Director of the Company with effect from August 12, 2011 in order to fill in the casual vacancy created by the resignation of Mr. Praful N. Satra.
The Board has subject to the approval of the members of the company, approved the re- appointment of Mr. Amrrut S. Gada as the Managing Director of the Company, for a further period of 5 years from April 01, 2011.
The Board has subject to the approval of the members of the company, approved the reappointment of Mr. Dhirraj S. Gada as Joint Managing Director of the company, for a further period of 5 years from October 01, 2011.
At the ensuing Annual General Meeting Mr. Hasmukh N. Shah and Mr. Dilip K. Patel retire by rotation and being eligible, offer themselves for re-appointment.
Your Directors place on record their deep appreciation for the contribution made by the employees of the Company at all levels. Our industrial relations continue to be cordial.
None of the employees of the Company has received remuneration exceeding the limits prescribed under the amended Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.
8. PUBLIC DEPOSITS
Public Deposits outstanding at the year end were " 168.60 million and the number of depositors were 4019. At the end of the financial year under review, there were 41 deposits aggregating " 1.16 million which matured but remained unclaimed as on that date.
9. AUDITORS REPORT
Explanation for Point no. 9(a), 9(b) and 11 Auditors' report.
Cost escalation due to start up delay of Company's Float Glass Project, steep increase in input cost and higher interest cost on account of credit crunch etc., have resulted in cash loss situation. This has impacted cash cycles, which in turn lead to delays in servicing of debts and payment of PF, Income Tax TDS and CST liabilities. However, as on date of Directors' report the Company has paid interest and quarterly installments of term loans and also Income Tax TDS outstanding as at the Balance Sheet date.
10. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions contained in Sub-Section (2AA) of Section 217 of The Companies Act, 1956, your Directors, hereby confirm that:
a) In the preparation of the annual accounts for the year ended on 31st March 2011, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any;
b) They have selected the accounting policies in consultation with the Statutory Auditors and have applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2011 and of the profits or loss of the Company for that period;
c) Proper and sufficient care has been taken 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
d) The annual accounts for the year ended 31st March, 2011 have been prepared on a going concern basis.
11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO
Information on Conservation of Energy, Technology Absorption and foreign Exchange is given as Annexure I to this report.
12. CORPORATE GOVERNANCE REPORT
Corporate Governance and General Shareholder Information forms part of this Annual Report as Annexure II and III.
Your Company's Statutory Auditors M/s. S. S. Puranik and Associates, Chartered Accountants, Mumbai retire at the conclusion of the forth coming Annual General Meeting.
Your Company has received a letter from them to the effect that their re-appointment, if made will be in accordance with the provisions of Section 224 (1B) of the Companies Act, 1956.
Your Directors would like to convey their appreciation to Banks, Financial Institutions, Government Authorities, Customers, Vendors, Fixed Deposit Holders and Members for their enormous personal efforts as well as their collective contribution received during the year under review and their confidence in its management.
For and on behalf of the Board of Directors
Amrrut S. Gada
Chairman and Managing Directors
Date: August 12, 2011