As on: Apr 20, 2024 05:20 PM
To, The Members,
Your directors have pleasure in presenting their twenty-first Annual Report on the business and operations of the company together with the Audited Statement of Accounts for the year ended 31st March 2019.
Financial Highlights
Performance of your company is as under:
The Members may note that we are unable to present the Consolidated Financial Results of our material Subsidiary Shree Maheshwar Hydel Power Corporation Limited ("SMHPCL") in view of the "Management Dispute" as marked by the Registrar of Companies, Madhya Pradesh (Gwalior).
Dividend
Directors do not recommend any Dividend.
SUBSIDIARY COMPANIES
The Company has 3 Subsidiaries namely a. Shree Maheshwar Hydel Power Corporation Limited (SMHPCL)- Management Dipsuted. b. Ennertech Biofuels Limited (EBL) c. Rajasthan Solar Power Company Private Limited (RSPCPL).
As stated in the director's report that abetment of the board of SMHPCL with illegal acts of PFC caused your Company loss of ownership of Shares in SMHPCL from 58% to 12% with a corresponding ownership in favour of PFC/Lendersfrom Zero to 51%.
While the release of ROC Report was awaited and SMHPCL continued as a "Management Disputed" Company, PFC continued with their illegal acts like: causing false accounts to be prepared by its appointed KMPs of SMHPCL for years March 2016 and 2017; held Annual general meetings in December 2016 without circulation of Notice for the meeting and Financial Statements to all the Members; did not allow entry to the venue of the meeting to your Company's Authorised Representative etc. Your Company, as Holding Company was not able to consolidate the audited results of the Subsidiary.
CHANGES IN THE NATURE OF BUSINESS
There is no change in the nature of business of the Company during the year. CHANGE OF THE REGISTERED OFFICE OF THE COMPANY
The Registered Office of the Company was earlier situated at "606, 6th Floor, Raheja Chambers Free Press Journal Marg, Nariman Point Mumbai Mumbai City MH 400021". The Board of Directors approved the change of Registered Office within the local limits to 99 Nirajan Ground Floor, Marine Drive, Near R.O.C. Building, Mumbai – 400 002, India with effect from 9th May, 2018. The shifting of the Registered Office as aforesaid is in the best interests of the company, its shareholders and all concerned.
SHARE CAPITAL
There was no change in share capital of the Company during the year under review. TRANSFER TO RESERVE During the year, the Company has not transferred any amount to reserves PUBLIC DEPOSITS
The Company has not accepted any deposits from the public within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.
BOARD MEETINGS
The Company as for the reason stated in "Management Discussion and Analysis Report" did not have proper board composition Board in major part in last year under consideration. Hence the details of the Board meetings cannot be given in the Corporate Governance Report which forms part of this Annual Report. The intervening gap between any two Meetings were also not within the period prescribed under the Companies Act, 2013.
COMMITTEES OF THE BOARD OF DIRECTORS
As stated above that the Composition of Board as well as committees were not in place details of Committees of Board of Directors along with their terms of reference, composition and meetings held during the year, cannot be included in the Corporate Governance Report, which forms part of this Annual Report. EXTRACT OF ANNUAL RETURN An extract of the annual return pursuant to Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014 in Form MGT-9 is annexed herewith as forming part of this report.
CORPORATE GOVERNANCE REPORT
Corporate Governance report as required under Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 cannot be set out in the Annual Report as due to non formation of committee and board was not in place for the Year for reasons stated in "Management Discussion and Analysis Report".
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received individual declaration from all the Independent Director(s) of the Company stating that they meet the criteria of independence as provided under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
AUDITOR
Pursuant to the provisions of Section 139 of the Act and the rules framed thereunder, the Auditors M/s. SKHD & Associates, Chartered Accountants (Firm Reg. No. – 105929W) who were appointed as statutory auditors of the Company at 21st Annual General Meeting (AGM) of the Company at a remuneration (including term of payment) to be fixed by Board of Directors of the Company, plus service tax and such other tax(es), as may be applicable & reimbursement of all out-of-pocket expenses in connection with the audit of the accounts of the Company. The Company has received confirmation from M/s. SKHD & Associates, Chartered Accountants that they are not disqualified from continuing as Auditors of the Company.
No Fraud has been reported by Auditors under section 143(12) of the Companies Act, 2013 for the Financial Year 2018-19.
SECRETARIAL AUDITOR:
The Company has not appointed any Practicing Company Secretary to conduct Secretarial Audit of the Company for the financial year 2018-19, in terms of provisions of Section 204 of the Companies Act, 2013. As the Company had no committee's or board in place for the reasons stated in "Management Discussion and Analysis Report".
BOARD REPLY ON OBSERVATION IN AUDITORS REPORT
1) Investment in Subsidiary Companies
The Auditors are unable to get Comment on the investment of the Company in its subsidiary company named Shree MaheshwarHydel Power Corporation Limited(SMHPCL). The shares of SMHPCL were pledged with its Lenders with Power Finance Corporation (PFC) as its lead lender. These pledged shares were invoked by PFC on 2nd December, 2016, but due to dispute the Company has continued to show shares of SMHPCL under the head Investment.
MANAGEMENT RESPONSE
In response to the complaint made in January 2016 on mismanagement of affairs of SMHPCL by PFC, the ROC, after getting directions from the Ministry of Corporate Affairs (MCA), inspected SMHPCL under Sec 201(1) / (4) of the Companies Act, 2016 after marking it as "Management Disputed." Fearing actions against PFC and its nominated officials by MCA, PFC filed a false petition u/s 241, 242 and 244 of the Companies Act, 2013 before the Hon'ble NCLT,Ahmedabad ("NCLT"). The NCLT dismissed the petition of PFC as non-bona fide and held many of PFC's actions illegal. .Instead of going for a negotiated settlement with us as directed by the NCLT, PFC preferred to file an appeal in August 2017 before the Hon'ble NCLAT, who dismissed PFC's appeal without granting any relief and directed the Government of India and the Government of Madhya Pradesh to intervene to save the asset of national importance. Against the NCLAT Order PFC preferred an Appeal in the Supreme Court which also was dismissed. It may be noted that we have filed a petition u/s 241, 242, 244 and 59 of the Companies Act, 2013 before the NCLT, Ahmedabad along with a claim for damages of INR 16000 Crs against PFC. In view of the said dispute the Company continues to show the said assets in its books at Cost Rs 6,152,990,000 as the same are Long term Strategic Investment. In respect of Investment in other Subsidiary's amounting to Rs 1,01,00,000 the Company's is of the Opinion that there is no Diminution in value of investment and hence continues to carry at cost.
2) Loan fromBank
The Company has not made any provision of interest liabilities amounting to Rs. 13,702.59 Lakhs, for the Financial Years 2018-2019 further there is non receipt of Confirmation of M/s. Edelweiss Asset Reconstruction Company Ltd. (EARCL) , who have been absolutely assigned all rights and interests in the financial assistance of the Company, vide Assignment Agreement dated 28.03.2014 in respect of the Loan which was taken in the earlier years by the Company from Central Bank of India, based on management estimates the liability that exists in the books of accounts would be sufficient to meet the proposed One Time Settlement (OTS) which will be negotiated with EARCL. The Company has also not booked total interest on the said loan till 31st March 2019 amounting to Rs53,677.66Lakhs.
The Company in its earlier year had taken loan from Central Bank of India (CBI), due to non repayment of said loan CBI has assigned the said loan to M/s. Edelweiss Asset Reconstruction Company Ltd. (EARCL). The Company has non booked interest on the said loan amounting to Rs. 13,702.59 Lakhs for the Financial Years 2018-2019 and total interest not booked is Rs 53677.66 Lakhs till 31st March 2019 based on management estimates the liability that exists in the books of accounts would be sufficient to meet the proposed One Time Settlement (OTS) which will be negotiated with EARCL. Further as the said loan is a Non Performing Asset Confirmation in the said regards is also not available.
3) Deposit Given
The Company has not made any provision in respect of Deposit given to one of the party which is shown under the head Long term loans and advances amounting to Rs 20,00,00,000. The said deposit is given for occupying rent free area in the proposed newly constructed building. However the said project is still on hold by the developer but the management is hopeful of its performance in near future.
The Company has given deposit given to one of the party which is shown under the head Other Financial Assets amounting to Rs20,00,00,000. The said deposit is given for occupying rent free area in the proposed newly constructed building. However the said project is still on hold by the developer but the management is hopeful of its performance in near future
4) Confirmations
Balances under the heads borrowings, Other Financial Liabilities, Trade Payable, Loans, Other Financial Asset, Trade receivable, Other Financial Assets and Fixed Deposit and three Bank Account being dormant are subject to confirmation and reconciliation, if any, from the respective parties and consequential reconciliation.
Balances under the heads borrowings, Other Financial Liabilities, Trade Payable, Loans, Other Financial Asset, Trade receivable, Other Financial Assets and Fixed Deposit and three Bank Account being dormant are subject to confirmation and reconciliation, if any, from the respective parties and consequential reconciliation - Amount presently unascertainable. However the Company does not expect any material impact of the same.
5) Provisionfor Doubtful Recoveries
The Company has not provided for Loans, Non-current Other Financial Asset comprising of receivable from holding company and Trade Receivables amounting to Rs 80.98 Lakhs, Rs 6,779.55 Lakhs and Rs 423.78 Lakhs respectively against which no recovery has been done. MANAGEMENT RESPONSE The Company has not made provision for group Company balances in respect of Loans, Non- current Other Financial Asset comprising of receivable from holding company and Trade Receivables amounting to Rs 80.98 Lakhs Rs 6779.55 Lakhs and Rs 423.78 Lakhs respectively against which no recovery/ performance has been done as the management is of the view that the said balances are good and would recovered once the group power project is revived.
6) Going Concern
The Company has been incurring constant losses further the Company is a Holding Company of Shree Maheshwar Hydel Power Corporation Limited, the said has limited development due to various reasons further there are legal cases going on by and against the Company, further the Company has also been discontinued its business operation it has also been facing cash-flow mismatches, if the said project is not revived than the going concern assumption might get impacted.
The Company has been incurring constant losses further the Company is a Holding Company of Shree Maheshwar Hydel Power Corporation Limited, the said has limited development due to various reasons further there are legal cases going on by and against the Company. The group is confident that the legal cases outcome would be in the favour of the Company and the project would revive there by Company would still continue as a going concern.
7) The Company was not in the position to pay listing fees hence the exchange has suspended its share trading. Further the Company has also received notices from both the exchanges for non- compliance with the listing terms and for non-payment of listing fees. The Company approached SAT against the delisting order of NSE and presented all the factual positions pertaining to the matter. SAT upheld the Appeal and directed NSE to reconsider their delisting order.
The Company was not in the position to pay listing fees hence the exchange has suspended its share trading. Further the Company has also received notices from both the exchanges for non- compliance with the listing terms and for non-payment of listing fees. The Company is arranging for funds to comply with it. The Company has filed appeal in Securities Appellate Tribunal against Delisting Order by National Stock Exchange.
8) The Company does not have Company Secretary as well as CFO, which is not in line with Section 203 of the Act.
The Company which states that the company does not have Company Secretary as well as CFO, which is not in line with Section 203 of the Act. The Company is in Process of complying with it the Company is regularly in posting advertisements in search of Company Secretary.
9) The Company has not carried out Internal Audit as well as Secretarial Audit as required under the AuditfurthertheCompanyhasalsonotstrictlynotcompliedwithProvisionsofCompaniesAct. MANAGEMENT RESPONSE The Company has not carried out Internal Audit as well as Secretarial Audit as required under the Audit further the Company has also not strictly not complied with Provisions of Companies Act. Hence forth the same would be complied with.
10) The Company has adopted Ind-AS for the first time, however, as required under Ind-AS 101 - First time adoption of IND-AS, to value and book all its financial assets and financial liabilities at fair market values, the Company has carried all its financial assets and financial liabilities at deemed cost which is not in line with the aforesaid IND-AS, consequential impact of which is unascertainable.
The Company which states that the Company has adopted Ind-AS for the first time, however, as required under Ind-AS 101 - First time adoption of IND-AS, to value and book all its financial assets and financial liabilities at fair market values, the Company has carried all its financial assets and financial liabilities at deemed cost as the Company does not contemplate a major impact of It on the Financial Statement.
11) The Company during the year under review has identified and written back Trade Payable and other Payables which are pending for more than 3 years amounting to Rs 198.09 Lakhs as the Company is of the opinion that the said balance are no longer payable. However there are no documentation or confirmation from the said party for waiver of their amount thereby overstating loss of the Company and understating Trade payable and Other Financial Liability to the above extent.
The Company during the year under review has identified and written back Trade Payable and other Payables which are pending for more than 3 years amounting to Rs 198.09 Lakhs as the Company is of the opinion that the said balance are no longer payable.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The Company has not given any loans or guarantees or made investment beyond the limits mentioned under the provisions of Section 186 of the Companies Act, 2013. Details of loans granted, guarantees provided and investments made by the Company are provided in the financial Statement.
PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, EXPENDITURE ON RESEARCH AND DEVELOPMENT & FOREIGN EXCHANGE EARNINGS AND OUTGO
a) Consumption of Energy : Not Applicable
b) TechnologyAbsorption, Research & Development (R&D)
(i) Technology imported and absorbed : NIL(Previous year Nil)
(ii) Expenditure on R&D : NIL(Previous year Nil)
c) Foreign exchange earnings and outgo
(i) Foreign exchange earnings : NIL (Previous year NIL)
(ii) Foreign exchange outgo : NIL (Previous year NI)
RELATED PARTY TRANSACTIONS
During the year under review, there were no contracts or arrangements made with related parties as defined under Section 188 of the Companies Act, 2013. There were no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons, which may have a potential conflict with interest of the Company at large.
RISK MANAGEMENT POLICYAND INTERNALADEQUACY
Your Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. Your Company's internal control systems are commensurate with the nature of its business, size and complexity of its operations. These are routinely tested by Statutory Auditors. Significant audit observations are brought in notice of the management.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has established a vigil mechanism to provide a framework to promote responsible and secure whistle blowing and to provide a channel to the employee(s), Directors and other stakeholders to report to the management, concerns about unethical behaviour, actual or suspected fraud or violation of the code of conduct or policy/ies of the Company, as adopted/framed from time to time. The details of said vigil mechanism are given in Corporate Governance Report, which forms part of this Annual Report. The Whistle Blower Policy has been uploaded on the Company's website i.e. www.entegra.co.in
CORPORATE SOCIAL RESPONSIBILITY
The Company understands and values Corporate Social Responsibility (CSR) initiatives of the Government and has also noted the requirements of CSR activities in terms of Companies Act, 2013. The requirement of mandatory implementation of CSR activity is not applicable to your company due to inadequacy of profits in past three financial years.
INTERNALFINANCIAL CONTROLS
Your Company has in place adequate internal financial controls with reference to financial statements. During the year under review, such controls were tested and no reportable material weaknesses were observed.
WTD CERTIFICATE:
As no proper composition wasin place of board or committee till 25th March 2019 no such certification on financial reporting and Internal Controls was obtained as required in terms of SEBI (Listing Obligations and Disclosure requirements) Regulations, 2015. The Whole Time Director also gives quarterly certification on financial results before the Board in terms of Regulation 33(2) of the SEBI(Listing Obligations and Disclosure requirements) Regulations,2015 in view of the above was also not obtained.
DIRECTOR'S RESPONSIBILITY STATEMENT
Pursuant to the requirements of Section 134(5) of the Companies Act, 2013, with respect to Directors' Responsibility Statement it is here by confirmed that:
(a) in the preparation of the annual accounts for the financial years ended 31st March, 2019 the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
(b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2019, and of the profit/ loss of the Company for that period;
(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the Directors have prepared the annual accounts for the financial year ended 31st March, 2019 on a going concern basis;
(e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively except irregularities as happened due to non-composition of proper board and committee.
ACKNOWLEDGEMENTS
Your Directors would like to convey their appreciation to all associated with the Company for their efforts and contribution during the year. Your Directors would like to thank and place on record their appreciation for the continued support and co-operation provided to your Company by its Shareholders, customers, suppliers, regulatory authorities, Auditors and its bankers.