TO THE MEMBERS
The Directors present the first Board's Report (post Corporate Insolvency Resolution
Process (CIRP)) of your Company along with the Audited FinancialStatements for the year
ended March 31, 2024.
INITIATION OF CORPORATE INSOLVENCYRESOLUTION PROCESS (CIRP):
M/s Asrec (India) Limited (who became the financial creditor in place of Bank of India)
filed a petition for initiation of Corporate Insolvency Resolution Process
("CIRP") against the Company, under Section 7 of the IBC Code and the Company
was admitted under CIRP in terms of the order passes by the Hon'ble NCLT, Allahabad Bench
vide its order dated March 31, 2023. In due course, Mr. Saurabh Chawla was appointed as
the Interim Resolution Professional of the Company and was confirmed as Resolution
Professional in the first meeting of the Committee of Creditors of the Company
("CoC"), held on April 27, 2023.
Under Section 17 of the Insolvency and Bankruptcy Code the management of the affairs of
the company shall vest in the erstwhile Resolution Professional. The powers of the Board
of Directors shall stand suspended and be exercised by the erstwhile Resolution
Professional.
Pursuant to the appointment, the Resolution Professional took various steps in
conformity with the provisions of the IBC Code towards the conduct of the CIRP and
management of the Company, including the invitation of a resolution plan in consultation
with the CoC and resolution plan submitted by the Palika Towns LLP ("Resolution
Applicant"), , was approved by the CoC in its meeting held on October 20, 2023 and
has been approved by a Hon'ble NCLT, Allahabad Bench, vide Order dated April 17,2024.
The implementation of resolution plan is under the supervision of Implementation and
Monitoring Committee constituted in accordance with approved Resolution Plan comprising
the nominee representing Financial Creditor/s and one nominee from Resolution Applicant
along with Resolution Professional. Aforesaid Committee is supervising the compliances as
per the terms of the Resolution Plan till such time the Resolution Plan is fully
implemented.
The Resolution Plan is currently in the process of implementation.
Members may kindly note that, the Directors of the Reconstituted Board
("Directors") were not in office for the period to which this report primarily
pertains. During the CIRP Process, the RP was entrusted with the management of the affairs
of the Company. Prior to the Insolvency Commencement Date, the erstwhile Board of
Directors had the oversight on the management of the affairs of the Company. The
Reconstituted Board is submitting this report in compliance with the provisions of the
Companies Act, 2013, the rules and regulations framed thereunder ("Act") and the
Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements),
Regulations 2015 ("Listing Regulations"). The Reconstituted Board is not to be
considered responsible to discharge fiduciary duties with respect to the oversight on
financial and operational health of the Company and performance of the management for the
period prior to the Acquisition. IBC is a new legislation in India and the Approved
Resolution Plan of the Company is amongst the first such resolution plan approved under
the IBC. Members are requested to read this report in light of the fact that the
Reconstituted Board and the new management is currently implementing the resolution plan.
FINANCIAL & OPERATIONAL PERFORMANCE HIGHLIGHTS
In compliance with the provisions of the Companies Act, 2013 ('Act'), and SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations') the
Company has prepared its financial statements as per Indian Accounting Standards (Ind AS)
for the FY 2023-24. The highlights of the financial results of the Company, extracted from
the financial statements for the FY 2023-24 and previous FY 2022-23, are as under:
(Rs. in Hundreds)
| Particulars |
Year ended March 31,2024 |
Year ended March 31,2023 |
| Net Revenue from Operations |
0.00 |
0 |
| Other Income |
70,629.79 |
0 |
| Total Revenue |
70,629.79 |
0 |
| Profit before Depreciation, Finance Charges and Tax |
69130.25 |
-753.54 |
| Finance Costs |
0 |
0 |
| Depreciation & Amortization Expense |
38,994.56 |
40,832.06 |
| Exceptional Items |
0 |
0 |
| Profit Before Tax |
30,135.69 |
-41585.60 |
| Tax Provision |
0 |
0 |
| - Current |
0 |
0 |
| - Deferred |
0 |
0 |
| Profit After Tax |
30,135.69 |
-41585.60 |
| Other Comprehensive Income |
0 |
0 |
| Total Comprehensive Income |
0 |
0 |
DIVIDEND
In view of the operating loss incurred, the Directors does not recommend any dividend
for the year under review.
RESERVES AND SURPLUS
Due to loss incurred during the year under review, there was no transfer of any amount
to Reserves for the financial year ended on March 31, 2024.
SHARE CAPITAL
The issued and paid-up Share Capital of the Company remained unchanged during the year
and stood at Rupees 39,43,89,790/-/- the end of the financial year 2023-24.
There were no instances of issue of shares with differential voting right, buy back of
shares or bonus issues of shares during the year.
However, in terms of the above referred approved resolution plan, post closure of
financial year, the existing equity shareholders other than promoters issued new shares
proportionality to extent of new paid up equity as tabulated below. The promoter
shareholding having 4,66,26,352 representing about 11.82% of total shareholding was
written off and remaining shareholders holding 34,77,63,438 shares were written down to
new shareholding 5% of post-paid equity. The existing non-promoter or public shareholders
issued fresh equity 5,25,000 of face value 10/- proportionately to their holding at par.
The Resolution Applicant infused fresh share money of INR 9.975 Crores for face value
of INR 10/-. The share issued paid capital post new restructuring is INR 10.50 Crores and
shareholding patter is as follows:
| Shareholders Category |
Fresh No of shares face value of INR 10.00/ |
Amount (INR) |
% of total equity |
Comments |
| Existing shareholders(Public) |
5,25,000 |
52,50,000 |
5% |
Write-down of existing and issuance of fresh equity to all shareholders proportionally
other than promoters. |
| Palika Town LLP |
99,75,000 |
9,97,50,000 |
95% |
Fresh Equity |
| Total |
1,05,00,000 |
10,50,00,000 |
|
|
As stated above, the Board of Directors of the Company at their meeting held on July
15, 2024, issued and allotted 1,05,00,000 equity shares of Rs 10 each and in order to give
effect to the allotment, the existing authorized share capital stands changed from Rs
50,00,00,000 divided 50,00,00,000 equity shares of Rs. 1 each to Rs. 50,00,00,000 divided
into 5,00,00,000 of Rs. 10 each.
DEPOSITS
During the year under review, based on the information available on records, we can
state that the Company has not accepted any deposits from public within the meaning of
Section 73 to 76 of the Companies Act, 2013 read with the Companies (Acceptance of
Deposits) Rules, 2014 or any other applicable provision(s), if any.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY,
OCCURING AFTER THE BALANCE SHEET DATE
The Company was admitted under Corporate Insolvency Resolution Process (CIRP) under the
Insolvency and Bankruptcy Code 2016 (IBC) in terms of Order passed by the Hon'ble National
Company Law Tribunal (NCLT), Allahabad Bench vide order dated March 31, 2023. In due
course, Mr. Saurabh Chawla was appointed as the Interim Resolution Professional of the
Company and was confirmed as Resolution Professional in the first meeting of the committee
of creditors of the Company ("CoC"), held on April 27, 2023.
Pursuant to the appointment, the Resolution Professional took various steps in
conformity with the provisions of the IBC Code towards the conduct of the CIRP and
management of the Company, including the invitation of a resolution plan in consultation
with the CoC and resolution plan submitted by the Palika Towns LLP ("Resolution
Applicant"), with the intent to diversify into the Auto Ancillary Sector, was
approved by the CoC in its meeting held on October 20, 2023 and has been approved by a
Hon'ble NCLT, Allahabad Bench, vide Order dated April 17,2024. The Resolution Plan is
currently under process of implementation.
The said Resolution plan provided that in case the Resolution Applicant, after carrying
out Techno Economic Viability (TEV), finds that old plant and machinery could not be put
to economic use or overall acquisition/business strategy is not translating as envisaged
,the old existing plant and machinery could be sold. It is also been provided where post
TEV Resolution applicant did not find investment viable, as an alternate strategy, it may
dilute the equity in favour of some existing organised player in Auto Ancillary sector or
may sell part of Assets (old plant and Machinery) or entire assets on "As as whereas
as it is basis".
In furtherance of the Resolution Plan as discussed above and after the TEV study report
dated May 13, 2024 undertaken by Mr. Vishal Kanwar, Registered Valuer (Regn No.
CAT-VII/127/341/2017-18) , the Board of Director in its meeting held on dated June 21,
2024 inter alia, has considered and approved to sell the undertaking of the Company
comprising of land and building situated at C-49,Noida Phase-II, Noida, Gautam Budh Nagar,
Uttar Pradesh-201305 over a total area of 22,343.10 sq. meter along with Plant &
machinery situated thereat, either as a whole or in part for the consideration not
exceeding Rs. 79 crores, subject to the requisite approval of the members.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
DIRECTORS INDUCTIONS, RE-APPOINTMENT/RE-DESIGNATIONS, RETIREMENT & RESIGNATIONS
During the Financial Year ended on March 31 2024, there board was suspended due to
insolvency process.
However, after the closure of Financial Year 2023-24 and in terms of the Resolution
Plan, the Monitoring Committee in its meeting held on 17.05.2024: has appointing following
directors:
| S.No. Particulars |
Effective date of Appointment |
| 1. Manoj Agarwal -Managing Director, Chairperson |
May 17,2024 |
| 2. Lalit Kumar- Non-Executive - Independent Director |
May 17,2024 |
| 3. Pragya Agarwal- Non-Executive - Non-Independent Director |
May 17,2024 |
| 4. Rajveer Singh- Non-Executive - Independent Director |
May 17,2024 |
Upon approval of Resolution Plan, erstwhile directors of the Company vacated from the
office w.e.f. April 17, 2024
| NAME OF THE DIRECTOR |
DESIGNATION |
Effective date of Appointment |
| 1 Himmat Singh |
Non-Executive |
April 17,2024 |
| 2 Gopalrao Gangadharrao Patwardhan |
Independent Non-Executive |
April 17,2024 |
| 3 Sushil Nanda |
Independent Non-Executive |
April 17,2024 |
KEY MANAGERIAL PERSONNEL (KMP)
During the Financial Year ended on March 31 2024, there were no changes in the Key
Managerial Personnel of the Company.
However, after the closure of Financial Year 2023-24, except provided above, the
Company have appointed below mentioned KMP:
| S. No. Particulars |
Effective date of Appointment |
| 1. Payas Agarwal- Chief Financial Officer |
August 28,2024 |
| 2. Komal Agarwal - Company Secretary |
July 15, 2024 |
ANNUAL PERFORMANCE EVALUATION
During the year, the performance of the Board and individual Directors was not
evaluated considering the commencement of the CIRP against the company. The directors will
carry out an evaluation of its own performance, performance of the Directors individually
as well as the evaluation of the working of its committees. The system of evaluation is
being developed and should be implemented shortly.
BOARD MEETINGS
M/s Asrec (India) Limited (who became the financial creditor in place of Bank of India)
filed a petition for initiation of Corporate Insolvency Resolution Process
("CIRP") against the Company, under Section 7 of the IBC Code and the Company
was admitted under CIRP in terms of the order passes by the Hon'ble NCLT, Allahabad Bench
vide its order dated March 31, 2023. In due course, Mr. Saurabh Chawla was appointed as
the Interim Resolution Professional of the Company and was confirmed as Resolution
Professional in the first meeting of the Committee of Creditors of the Company
("CoC"), held on April 27, 2023.The powers of the Board of Directors shall stand
suspended and be exercised by the erstwhile Resolution Professional.. The Board had not
met in the financial year 2023-24.
AUDIT COMMITTEE
As on 31.03.2023, the powers of the Board of Directors shall stand suspended and be
exercised by the erstwhile Resolution Professional During and as at the end of the
financial year under review, the Audit Committee had not met in the financial year 2023-24
However, after the closure of Financial Year 2023-24 and pursuant to the above referred
approved Resolution Plan, the Board of Directors reconstituted the Audit committee of the
Company w.e.f.
21.06.2024 by appointing following directors:
| Name |
Designation |
| 1. Rajveer Singh- Non-Executive - Independent Director |
Chairperson |
| 2. Lalit Kumar- Non-Executive - Independent Director |
Member |
| 3. Manoj Agarwal - Executive Director |
Member |
NOMINATION AND REMUNERATION COMMITTEE
As on 31.03.2023, The powers of the Board of Directors shall stand suspended and be
exercised by the erstwhile Resolution Professional During and as at the end of the
financial year under review, the Nomination and Remuneration Committee had not met in the
financial year 2023-24
However, after the closure of Financial Year 2023-24 and in terms of above referred
approved Resolution Plan, the Board of Directors reconstituted the Nomination and
Remuneration Committee of the Company w.e.f. 21.06.2024 by appointing following directors:
| Name |
Designation |
| 1. Rajveer Singh- Non-Executive - Independent Director |
Chairperson |
| 2. Lalit Kumar- Non-Executive - Independent Director |
Member |
| 3. Pragya Agarwal - Non-Executive Director |
Member |
STAKEHOLDER RELATIONSHIP COMMITTEE
As on 31.03.2023, The powers of the Board of Directors shall stand suspended and be
exercised by the erstwhile Resolution Professional During and as at the end of the
financial year under review, the Stakeholder Relationship Committee had not met in the
financial year 2023-24
However, after the closure of Financial Year 2023-24 and in terms of the approved
Resolution Plan, the Board of Directors reconstituted , the Stakeholder Relationship
Committee of the Company w.e.f. 21.06.2024 by appointing following directors:
| Name |
Designation |
| 1. Rajveer Singh- Non-Executive - Independent Director |
Chairperson |
| 2. Manoj Agarwal - Executive Director, Chairperson |
Member |
| 3. Pragya Agarwal - Non-Executive Director, Chairperson |
Member |
The Company Secretary of the Company is the Secretary of the Committee.
For further details about all the Committees of the Board of Directors of the Company,
please refer the Corporate Governance Report which forms an integral part of this Annual
Report.
SUBSIDIARY / ASSOCIATE & JOINT VENTURE COMPANIES AND CONSOLIDATED
FINANCIALSTATEMENTS
During the financial year under review, based on the information available on records,
we can state that the Company was not having any subsidiary or joint venture or associate
company in terms of the provisions of the Act. Hence, the Company is not required to
prepare form AOC-1 with respect to performance of subsidiary or joint venture or associate
company.
STATUTORY AUDITORS
Pursuant to the provisions of section 139 of the Companies Act, 2013 and Rules made
there under and as per the approvals of the Committee of Creditors, M/s. S.N. Nanda
&Co., Chartered Accountants, (ICAI Firm Registration No.[000685N]) Statutory Auditors
of the Company, appointed by resolution professional Mr. Saurabh Chawla, during the period
when the Company was undergoing through Insolvency Process, Post approval of Resolution
Plan, They have tendered their resignation vide email dated 31st July, 2024
Pursuant to the provisions of section 139 of the Companies Act, 2013 and Rules made
there under, , based on the Recommendation of Audit Committee and subject to the approval
of Shareholders The Board Of Director have passed the resolution vide its Meeting dated 10th
October, 2024
a) the appointment of Rajat Associates, Chartered Accountants (FRN: 001885C) for two
(2) terms of 5 consecutive years for the purpose of audit of the financial statements of
the Company from FY 2011-12 to 2020-21.
b) the appointment of M.B. Gupta & Co, Chartered Accountants (FRN: 006928N) for one
(1) term of 5 consecutive years for the purpose of audit of the financial statements of
the Company from FY 202122.
However, the approval of shareholder is requested in the ensuing Annual General Meeting
of the company.
AUDITORS' REPORT
The Auditors' Report read along with notes to accounts is self-explanatory and
therefore does not call for further comments. The Auditors' Report does not contain any
qualification, reservation, or adverse remark.
SECRETARIAL AUDITORS AND THEIR REPORT
The Board appointed Loveneet Handa & Associates, Practicing Company Secretaries, as
secretarial auditor to conduct a secretarial audit of the Company for the financial year
2023-24. The secretarial auditor has made certain observations in the report. Pursuant to
the Acquisition and the above referred IBC Order passed by the NCLT, there has been a
change in the Board and the management of the Company. Given that the observations pertain
to the prior period, we are not in a position to comment on the said observations. The
Secretarial Audit report for financial year 2023-24 is annexed to this report (Annexure -
A).
COST RECORDS
During the financial year under review, based on the information available on records,
we can state that the requirement of maintaining Cost Records under Section 148 of the
Companies Act,2013 are not applicable on the Company.
NOMINATION & REMUNERATION POLICY
Post the Acquisition, based on the recommendations of the NRC, the Board has approved
and adopted a revised Remuneration Policy for Directors, Key Managerial Personnel and all
other employees of the Company ("Remuneration Policy") effective July 11, 2018.
As part of this policy, the Company will strive to achieve alignment between pay and
long-term sustainable performance. The Remuneration Policy is available on the website of
the Company and can be accessed via. https://www.harigcrankshafts.com/investors.html.
CORPORATE SOCIAL RESPONSIBILITY
During the financial year under review, based on the information available on records,
we can state that the Company was not covered under the provisions of Section 135 of the
Companies Act, 2013 related to Corporate Social Responsibility.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report for the financial year under review, as
stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015, is presented in a separate section,forms part of this Annual Report.
CORPORATE GOVERNANCE REPORT
A report on Corporate Governance forms part of the Annual Report along with the
Certificate on CorporateGovernance as required under Listing Regulations.
INTERNAL CONTROLS AND ITS ADEQUACY
The Board of Directors of the Reconstituted Board were not in office for the period to
which this report primarily pertains. During the CIRP Process, the erstwhile Resolution
Professional was entrusted with and
responsibly for the management of the affairs of the Company. Further, during the
implementation period i.e. w.e.f. April 17, 2024 till May 17, 2024, the affairs and
control of the company was under the management of Implementation and Monitoring
Committee, constituted as per NCLT order.
RISK MANAGEMENT
The Company is under process of developing a robust risk management framework, which
identifies and evaluates business risks and opportunities and protect the interest of the
shareholders and stakeholders.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company believes in commitment to values and ethical business conduct in a fair and
transparent manner, which is reflected in its culture, policies and other manner in which
it deals with various stakeholders.
With the endeavor to develop a culture, which is safe for all the employee/directors to
raise concerns about any unacceptable practices and any event of misconduct, your Company
has established a Whistle Blower Policy for the employees/Directors of the Company
pursuant to Section177(9) of the Companies Act, 2013.
The Vigil Mechanism provides a mechanism for employees/Directors of the Company to
approach the First info members (i.e. Compliance Officer and Head-HR) in case of any
unethical behavior, moral turpitude, financial misappropriation, actual/ suspected/
anticipated fraud or violation of Company s code of conduct.
DETAILS OF LOANS, INVESTMENTS AND GUARANTEES UNDER SECTION 186
During the financial year under review, based on the information available on records,
we can state that the Company has not advanced any Loan, Guarantee or made any Investment
covered under the provisions of Section 186 of the Act during the financial year.
ANNUALRETURN
The Annual Return in form MGT-7 of the Company, as required under Section 92 of the
Companies Act, 2013, is available on the website of the Company at
www.harigcrankshafts.com.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the financial year under review, based on the information available on records,
we can state that the Company has no transaction with related parties which is required to
be reported under Section 134 (3) (h) of the Companies Act, 2013 read with Rule 8(2) of
the Companies (Accounts) Rules, 2014.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGSAND OUTGO.
The information with regard to Conservation of Energy, Technology Absorption, Foreign
Exchange Earnings and outgo in accordance with the provisions of Section 134(3)(m) of the
Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is given as
Annexure B forming part of this Report.
PARTICULARS OF EMPLOYEES
During the financial year under review, based on the information available on records,
we can state that there was no employee employed in the Company, therefore the disclosure
related to remuneration of directors u/s 197(12) of the Companies Act, 2013 read with Rule
5(1) & 5(2)/(3) of Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 are not being provided in this report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
Save as otherwise provided in this report there were no significant material orders
other than Orders mentioned in this Report which would impact the going concern status of
the Company and its future operations were passed by the Regulators/ Courts/ Tribunals.
DIRECTOR'S RESPONSIBILITY STATEMENT
- pursuant to Section 134(5) of the Act, the Reconstituted Board of Directors, based on
the knowledge/ information gained by them, about the affairs of the Company, in a limited
period of time and based on understanding of the then existing processes of the Company
and to the best of their knowledge state that: in the preparation of the annual accounts
for the year ended March 31, 2024, the applicable accounting standards have been followed
and there are no material departures from the same.
- the Directors have selected such accounting policies and applied them consistently
and made judgements 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 March 31, 2024 and of the profit of the Company for
the year ended on that date.
- 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.
- the Directors have prepared the annual accounts of the Company on a going concern
basis.
- the Directors have laid down internal financial controls to be followed by the
Company and that suchinternal financial controls are adequate and were operating
effectively.
- the Directors have devised proper systems to ensure compliance with the provisions of
all applicablelaws and that such systems were adequate and operating effectively.
STATEMENT UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,PROHIBITION AND
REDRESSAL) ACT, 2013
Post CIRP, the Company has complied with the provisions of the Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and has in place a
Policy on Prevention of Sexual Harassment at the Workplace in line with the provisions of
the said Act. An Internal Complaints Committee has been set up to address the complaints
received regarding Sexual Harassment. The policy and the Internal Complaints Committee is
announced to all staff and is available with HR Department.
SECRETARIAL STANDARDS
Post CIRP, The Company has complied with the applicable Secretarial Standards as issued
by the Institute of CompanySecretaries of India (ICSI).
LISTING FEES
The Equity Shares of your Company are listed on the BSE Limited (BSE).
The trading/dealing in securities of the Company is already suspended by the Stock
Exchange for violation of SEBI & Stock Exchange Regulations. The Company is in the
process of relisting its shares at the BSE.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS OTHER THAN THOSE WHICH ARE REPORTABLE
TO THE CENTRAL GOVERNMENT
During the year under review, the Statutory Auditors and Secretarial Auditors of the
Company have not reported any frauds to the Audit Committee or to the Board of Directors
as prescribed under Section 143(12) of the Companies Act, 2013 and rules made thereunder.
OTHER DISCLOSURES
Your Directors state that no disclosure or reporting is required in respect of the
following items as there were no transactions/events happened on these items during the
year under review:
a) Issue of equity shares with differential voting rights or sweat equity or stock
options.
b) Changes in the nature of business activities.
c) Fraud reporting by the auditors.
d) Difference between amount of the valuation done at the time of one-time settlement
and the valuation done while taking loan from the Banks or Financial Institutions along
with the reasons thereof.
ACKNOWLEDGMENT
Your Directors express their gratitude for the help, guidance and support received from
the Lenders, Committee of Creditors and Monitoring professional as well as the statutory
authorities.
Your Directors and employees look forward to the future with confidence and stand
committed towards creating a mutually ‘rewarding future for all stakeholders,
|
FOR AND ON BEHALF OF THE BOARD OF DIRECTOR |
|
Sd/- |
| Place : Noida |
Manoj Agarwal |
| Date: 06-12-2024 |
Chairman & Managing Director DIN:00093633 |
