To
The Members,
IVRCL Limited
Pursuant to the orders of Hon'ble National Company Law Tribunal
(NCLT), Hyderabad, Corporate Insolvency Resolution Process (CIRP) had been initiated in
respect of IVRCL Limited ("the Company") under the provisions of the Insolvency
and Bankruptcy Code, 2016 ("the Code") with effect from 23rd February, 2018.
In this connection, Mr. Sutanu Sinha had been appointed as Resolution
Professional (RP) to carry out the activities relating to CIRP as per the rules,
regulations and guidelines prescribed by the Code.
Since the company was under Corporate Insolvency Resolution Process
(CIRP), as per Section 17 of the Insolvency & Bankruptcy Code, from the date of
appointment of the Resolution Professional -
(a) the management of the affairs of the company was vest in the
Resolution Professional.
(b) the powers of the Board of Directors company stood suspended and
exercised by the Resolution Professional.
(c) the officers and managers of the company to report to the
resolution professional and provide access to such documents and records of the company as
may be required by the Resolution Professional.
1. LIQUIDATION
The Hon'ble National Company Law Tribunal, Hyderabad Bench
("NCLT") has passed its order dated July 26, 2019 read with corrigendum order
issued on July 31, 2019 for "Liquidation of M/s IVRCL Limited as going concern"
and appointed Mr. Sutanu Sinha as the Liquidator of the Company.
Claims and Distribution of assets in Liquidation under Insolvency and
Bankruptcy Code (IBC).
The proceeds from the sale of the Company for "Liquidation as
going concern" shall be distributed as per section 53 of the Insolvency and
bankruptcy Code 2016 (IBC). Updated list of Stakeholders is hosted at the Company's
website.
During liquidation Period, all of the powers of Board of Directors and
Key managerial persons and the partners of the Corporate debtors, as the case may be, at
cease to have effect and vested in the During liquidation Period, all of the powers of
Board of Directors and Key managerial persons and the partners of the Corporate debtors,
as the case may be, at cease to have effect and vested in the Company Liquidator.
E-auction Process and Distribution of Sale Proceeds of IVRCL Limited
under Liquidation as Going Concern
1. First E-auction Process: As per order dated 26th August
2021 of the Hon'ble National Company Law Tribunal (NCLT), Hyderabad Bench after
exclusion of time period from which Successful bidder in First E-Auction who eventually
failed to pay the sale price and as a result entire bid process stood cancelled.
2. Second E-auction Process: The Second E-auction Process for
the sale of the IVRCL Limited/Company as a going concern was to be conducted on 04th
October 2021. However, in view of non-deposit of Earnest Money Deposit by prospective
bidders within the timeline, i.e., by 30th September 2021, the entire bid process under
the Second E-Auction Process for sale of IVRCL Limited as a going concern stood cancelled.
3. Third E-auction Process: Pursuant to the Invitation for EOI
issued on 20th November 2021, Mr. Ponguleti Prasad Reddy, along with other Members through
SPV ("Qualified Bidder") submitted EOI along with documents and EMD amount of
INR 50 Crores to participate in the Third E-Auction Process for sale of IVRCL Limited
under Liquidation as going concern. The third E-Auction for sale of IVRCL Limited as going
concern was conducted on 15th December 2021 where no bid was received on E-Auction portal.
In terms of Third E-Auction Process Information Document issued by Liquidator, Qualified
Bidder offer at minimum Reserve Price of INR 1200 Crores was considered as successful Bid
and Qualified Bidder was declared as ("Successful Bidder").
The Hon'ble NCLT vide its order dated 15th June 2022 directed the
payment schedule within which the successful bidder is required to make the payment of the
balance sale consideration of Rs. 1150 crores in 6 tranches of INR 200 Crore each and
directed to make strict adherence to the timelines as provided in the table detailing the
payment schedule and failure or any delay on part of Successful Bidder to make payment in
time shall attract the interest @12% p.a. for such delayed period.
The Successful bidder had already paid INR 50 Crore as part of EMD
amount and INR 100 Crore as part of 1st Tranche payment, and the same has been distributed
among the secured financial creditors upon receipt of executed undertaking after keeping
aside the CIRP and Liquidation Cost as per Section 53 of the IBC, 2016.
Due to non-adherence to the timelines as provided by NCLT for payment
of the balance sale consideration, the Stakeholders' Consultation Committee of the
company vide its meeting held on July 28, 2023 has decided to cancel the bid. Accordingly
the Liquidator issued letter to the Erstwhile Successful Bidder under Third E-auction
process for cancellation of Demand Notice dated December 29, 2021 for proposed sale of the
Company pursuant to the E-auction of the Company conducted on December 15, 2021. This has
been challenged by M/s. Raghava Square Private Limited (Successful Bidder).
All these matters are pending before Hon'ble NCLT for hearing.
2. FINANCIAL HIGHLIGHTS
The Liquidator presents the 36th Annual Report of IVRCL Limited
("Company") with Audited Financial Statements of the Company for the Financial
Year 2022-2023.
|
Standalone |
Particulars |
FY 2021-22 |
FY 2022-23 |
Total Revenue |
2,865.18 |
740.43 |
Less: Interest |
19,038.47 |
22302.51 |
Depreciation |
180.38 |
131.92 |
Exceptional item |
NIL |
NIL |
Provision for Tax / Reversal of Tax in Current Year |
(15.03) |
(15.03) |
(Loss)/Profit after Tax |
(19,526.01) |
(23035.16) |
Paid-up Capital |
1,565.80 |
1565.80 |
Reserves & Surplus |
(1,00,596.76) |
(123631.67) |
3. DIVIDEND
Since your company is under Liquidation as a going Concern and
incurring losses the Liquidator expresses his inability to recommend any dividend for the
financial year 2022-2023.
4. PERFORMANCE REVIEW
Your company achieved a gross turnover of Rs. 740.43 million for the
financial year 2022 -23 as against Rs. 2865.18 million in the previous financial year.
Profit/ (Loss) after Tax (PAT) stood at Rs. 23035.16 million as compared to Rs. (19526.01)
million for the previous financial year.
During the year under review, there is no change in nature of business
of the company and no material changes and commitments have occurred after the close of
the year till the date of this Report, which affect the financial position of the Company.
Shortage of working capital and initiation of liquidation process have
negative impact on the performance of the company.
5. TRANSFER TO RESERVES
Since your company is under Liquidation as a going Concern and
incurring losses no reserves to be transferred for the financial year 2022 2023.
6. BUSINESS REVIEW
The Management Discussion and Analysis Section of the Annual Report
present a detailed business review of the company.
7. CHANGE IN SHARE CAPITAL
There is no change in the share capital of the Company during the year
under review. The trading in the shares has been suspended by NSE & BSE from 3rd
September 2019 due to Liquidation of the Company as a going concern.
8. SUBSIDIARY COMPANIES
The Company has 26 direct subsidiaries and 3 associate companies within
the meaning of Section 2(87) and 2(6) of the Companies Act, 2013 respectively (hereinafter
referred as "Act). There has been no material change in nature of business of the
subsidiaries. Pursuant to Proviso to Section 129(3) of the Act, a statement containing the
salient features, brief details of performance and financials of the Subsidiaries,
Associates and Joint Venture Companies, for the financial year ended March 31, 2022 is
attached to Financial Statements of the Company.
M/s. IVRCL Chengapalli Tollways Limited, one of the subsidiaries of
IVRCL Limited was admitted into Corporate Insolvency Resolution Process on April 20, 2022
and Resolution Professional was appointed. The Resolution process of the company was
successfully completed and the Resolution plan was approved by the National Company Law
Tribunal (NCLT) on 1st May 2023.
In view of approval of the resolution plan by the NCLT, M/s. IVRCL
Chengapalli Tollways Limited ceased to be a subsidiary of IVRCL Limited from the date of
approval.
Pursuant to Section 136 of the Act, the financial statements including
consolidated financial statements, other relevant documents and audited accounts of
subsidiaries of the company are available at website of the Company www.ivrcl.com under
Financials Section and will be available for inspection by any member at the Registered
office of the Company on all working days during business hours.
The Board has adopted a policy for determining material subsidiaries of
the Company, as per SEBI (Listing Obligations and Disclosures Requirements) Regulations
2015. The said policy is hosted at the Company's website at the link
http://www.ivrcl.com/downloads/PolicyonMaterialSubsidiaries_New.pdf
9. CONSOLIDATED FINANCIAL STATEMENTS
In terms of Section 129(3) of the Companies Act, 2013 and Regulation 34
of the SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015,
Consolidated Financial Statements of the Company prepared in accordance with Accounting
Standards issued by Institute of Chartered Accountants of India, are attached and forms
part of the Annual Report.
10. FIXED DEPOSITS
During year under review, your company has neither invited nor accepted
any Fixed Deposits from the public.
11. CORPORATE GOVERNANCE
Detailed Report on Corporate Governance as stipulated under Schedule V
of SEBI LODR Regulations is provided under separate section and forms part of this Report.
The requisite certificate from Practicing Company Secretaries,
confirming the compliance of the conditions stipulated under SEBI LODR Regulations is
attached to the Report on Corporate Governance.
12. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As stipulated under SEBI (Listing Obligations and Disclosures
Requirements) Regulations 2015 the Report on Management Discussion and Analysis is annexed
to this report and forms part of the Annual Report.
13. POLICY ON CODE OF CONDUCT
The Company laid down a "Code of Conduct" for all Board
members and Senior Management Personnel. The said code of conduct is hosted at the
Company's website.
14. DIRECTORS AND KEY MANAGERIAL PERSONNEL.
The Company is under Liquidation as a going concern since 26th July
2019 vide NCLT order read with corrigendum order dated 31st July 2019. By virtue of NCLT
order all the powers of the Board of Directors and Key managerial personnel shall cease to
have effect and shall be vested with the Liquidator. In addition to the above powers the
Liquidator shall exercise the powers and duties as enumerated in section 35 to 50, 52 to
54 of the Insolvency and Bankruptcy Code 2016 read with Insolvency and Bankruptcy Board of
India (Liquidation Process) Regulations 2016.
There are no changes in Directors and Key Managerial Personnel of the
Company during the year.
15. MEETINGS OF THE BOARD
No meetings were conducted by the Board of Directors since the powers
of the Board of Directors have been suspended w.e.f. 23.02.2018 pursuant to the orders
dated 23.02.2018 of Hon'ble National Company Law Tribunal (NCLT) on commencement of
CIRP and subsequently on Liquidation of the Company as a going concern dated 26th July
2019 read with corrigendum order dated 31st July 2019.
16. BOARD COMMITTEES
Since the powers of the Board of Directors have been suspended w.e.f.
23.02.2018 pursuant to the orders dated 23.02.2018 of Hon'ble National Company Law
Tribunal (NCLT), the powers of the various committees have also been suspended w.e.f. the
same date on commencement of CIRP and subsequently on Liquidation of the Company as a
going concern. Hence no meetings have been conducted.
17. BOARD EVALUATION
Since the powers of the Board of Directors have been suspended w.e.f.
23.02.2018 pursuant to the orders of Hon'ble National Company Law Tribunal (NCLT)
dated 23.02.2018 on commencement of CIRP and subsequently on Liquidation of the Company as
a going concern, evaluation of Board has not taken place.
18. AUDITORS AND THEIR REPORTS
Statutory Auditors
M/s. Chaturvedi & Co., Chartered Accountants (Firm Registration No.
302137E) were appointed as Statutory Auditors of the company at the Annual General Meeting
held on 31st day of December, 2022, for a period of 5 years [i.e. from the F.Y 2022-23 to
F.Y 2026-27].
During the year under review, no fraud has been reported by auditors
under sub-section(12) of Section 143 of the Act.
The Comments for the qualifications in the Auditor's Report on the
financial statements of the Company for financial year 2022-23 are as provided in the
"Statement on Impact of Audit Qualifications" which is annexed hereafter and
forms part of this report.
Secretarial Auditor
As per the provisions of Section 204 of the Act, the Company appointed
M/s. D. Hanumanta Raju & Co, Practicing Company Secretaries as Secretarial Auditor for
the purpose of auditing the Secretarial activities of the Company for the financial year
2022-23.
The Secretarial audit report issued by the said auditor has been
annexed to this report as Annexure A. The Secretarial Audit Report contains
qualifications. Since the Board is suspended and the Company is in Liquidation as a going
concern comments on the qualifications are not provided.
Cost Auditor
As per the provisions of Section 148 of the Act read with Rules made
thereunder, the company appointed M/s. Sagar & Associates, Practicing Cost Accountants
as Cost Auditor for the purpose of auditing the Cost accounting records maintained by the
company for the financial year 2022-23.
19. PARTICULARS OF LOANS, INVESTMENTS AND GUARANTEES
The particulars of loans, investments made and guarantees issued under
Section 186 of the Act, during year under review, are provided in notes to financial
statements, which forms part of this report.
20. RELATED PARTY TRANSACTION
As per the requirement of provisions of the Act and SEBI (Listing
Obligations and Disclosures Requirements) Regulations 2015, the Company has formulated a
policy on Related Party Transactions (RPT) to ensure the transparency in transactions
between the company and related parties. The said RPT Policy is also available at
Company's website at the link
http://www.ivrcl.com/downloads/RelatedPartyTransactionPolicy.pdf
All Related Party Transactions entered by the Company during the year
under review were in ordinary course of business and on Arm's length basis. There
were no materially significant related party transactions entered by the company during
year under review.
Since all the related party transactions entered into by the Company,
were in ordinary course of business and were on Arm's length basis, disclosure in
form AOC- 2 as required under Section 134(3)(h) of the Act is not applicable.
The details of related party transactions pursuant to Accounting
Standards are provided in notes to financial statements.
21. INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls
commensurate with the size, scale and complexity of operations. The details relating to
internal financial controls and their adequacy are included in the Management Discussion
and Analysis Report, which forms part of this Report.
22. RISK MANAGEMENT
The company has established Risk Management process to manage risks
with the objective of maximizing shareholders value. The details of various risks that are
being faced by the Company are provided in Management Discussion and analysis Report,
which forms part of this Report.
23. WHISTLE BLOWER POLICY
The Board has adopted a Whistle Blower Policy as stipulated under
Section 177(9) of the Act and SEBI (Listing Obligations and Disclosures Requirements)
Regulations 2015 to report the genuine concerns of the employees and Directors.
The Whistle Blower Policy adopted by the Company is hosted on
Company's website at the link http://ivrcl.com/downloads/WhistleBlowerPolicy.pdf
24. SIGNIFICANT AND MATERIAL ORDERS
There are no significant and material orders passed by the regulators
or tribunals impacting the going concern status and Company's operations in future.
25. CASES FILED UNDER SEXUAL HARASSMENT ACT
No cases were filed pursuant to the Sexual Harassment of Women at work
Place (Prevention, Prohibition and Redressal) Act, 2013, during the year under review.
26. PARTICULARS OF EMPLOYEES
The statement containing the information pertaining to employees as
required under Section 197(12) of the Act read with Rule 5(2) of Companies (Appointment
and Remuneration of Managerial Personnel) Rules 2014, is annexed to this report. Having
regard to provisions of Section 136 of the Act, the Annual Report excluding the aforesaid
information is being sent to the members of the company. The said information is available
for inspection at the registered office of the Company during working hours and any member
interested in obtaining the said information may write to Company Secretary and the same
will be furnished on request.
Disclosures pertaining to remuneration and other details as required
under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 are annexed as Annexure B to this
Report.
27. Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings & Outgo:
Conservation of Energy is an ongoing process in the Company's
activities. The core activity of the company is civil construction which is not an energy
intensive activity.
There is no information to be furnished regarding Technology Absorption
as your Company has not undertaken any research and development activity in any
manufacturing activity nor any specific technology is obtained from any external sources
which needs to be absorbed or adapted.
Innovation is a culture in the Company to achieve cost efficiency in
the construction activity to be more and more competitive in the prevailing environment
and the effect of the same cannot be quantified.
The particulars of expenditure and earnings in Foreign currency are
provided in notes to financial statements.
28. CORPORATE SOCIAL RESPONSIBILITY
As per the provisions of Section 135 of the Act, the Company has
constituted the CSR committee to formulate, implement and monitor the CSR Policy of the
Company. However as the Company does not have average net profits for the three
immediately preceding financial years, the Company was not required to make any
expenditure on CSR activities during financial year 2022 -23 as specified under Section
135(5) of the Act.
Hence the information on CSR activities as required under Section
135(5) of the Act and Rule 8 of Companies (Corporate Social Responsibility Policy) Rules,
2014, has not been provided by the Company, for the financial year 2022-23.
29. EXTRACT OF ANNUAL RETURN
The Annual Return in form MGT- 9 as required under Section 92 of the
Companies Act, 2013 is provided at the company website. For details please click
www.ivrcl.com.
30. COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND ANNUAL GENERAL
MEETINGS.
The Company has complied with Secretarial Standards issued by the
Institute of Company Secretaries of India on Board meetings and Annual General Meetings.
31. INDUSTRIAL RELATIONS
The Company enjoyed cordial relations with the employees during the
year under review and the Management appreciates the employees of all cadres for their
dedicated services to the Company.
32. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(5) of the Companies Act,
2013, the Liquidator hereby state that:
(a) in preparation of annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to material
departures.
(b) the Liquidator had selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable and prudent so as
to give a true and fair view of the state of affairs of the company at the end of the
financial year and of the profit and loss of the company for that period;
(c) the Liquidator had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the provisions of this Act
for safeguarding the assets of the company and for preventing and detecting fraud and
other irregularities;
(d) the Liquidator had prepared the annual accounts on a going concern
basis; and
e) the Liquidator , in the case of a listed company, had laid down
internal financial controls to be followed by the Company and that such internal financial
controls are adequate and were operating effectively.
(e) the Liquidator had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were adequate and operating
effectively.
(f) The Company being liquidated as going concern, all Disclosers are
done in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of
the Companies Act, 2013 (the Act') read with Rule 3 of the Companies (Indian
Accounting Standards) Rules, 2015, and presentation requirements of Division II to
Schedule III subject to various overriding provisions of IBC 2016 as and where applicable.
33. CORPORATE INSOLVENCY RESOLUTION PROCESS (CIRP) AND LIQUIDATION AS A
GOING CONCERN
The Company was under CIRP and subsequently under liquidation as going
concern and information pertaining to the process is available at the Company website
www.ivrcl.com.
34. ACKNOWLEDGEMENTS AND APPRECIATIONS
The Liquidator wishes to express appreciation of the support and
co-operation of the Stakeholders, various departments of Central and the State
Governments, Bankers, Financial Institutions, Suppliers, Employees, Associates ,
Subcontractors and others.
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