DIRECTORS' REPORT TO The Members of RISHAB SPECIAL YARNS LIMITED Your Directors have pleasure in presenting their Twenty Seventh Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31,2015. 2. Dividend In view of the current year operational loss and carried forward losses, your directors are unable to declare dividend. 3. Reserves In view of the current year loss the Board does not propose to appropriate any amount to carry to any kind of reserves, 4. Brief description of the Company's working during the year/State of Company's affair: PERFORMANCE: Due to financial constraints, manufacturing activities stand discontinued. During the year under review company has incurred a loss of Rs. 5.52 lakhs from non operating expenses. The loss during the year has increased due to increase in the fees of Stock Exchange, the increase in Legal and Professional fees is due to additional work related to excise case hearing and general inflation during the year. The company has now been able to pay off all its secured lenders and can now look forward to a new beginning. The management is examining various options to gainfully utilize factory assets at Abu Road. There is no division so division wise working details are not applicable. FUTURE PROSPECTS: The company is continuously examining the possibility of starting some business to utilize the existing assets gainfully. The proposed activities shall be finalized and implemented based on final view of board and availability of funds. As soon as the management is able to finalize any business plans, it shall keep the valued shareholders informed through available mode of communications 5. Change in the nature of business, if any: There is no change in the nature of business in the company during the year. 6. Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year ofthe company to which the financial statements relate and the date of the report There is no Material changes and commitments which can affect the financial position of the company which have occurred between the end of the financial year of the company to Which the financial statements relates and the date of the report. 7. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future: The Commissioner - (Appeals), Customs, Excise and Service Tax have given its judgment and has rejected the Appeal filed by the company. So there is no change in the contingent liability as provided in the Annual Report of this year and earlier years. Now company can Appeal to Customs, Excise & Service TSx Appellate Tribunal (CESTAT) within 4 months of the above order which was passed on 06.06.2015. So, this judgement does not impact the going concern status and company's operations in future. Though the company has already stopped its production and sold its entire plant and machinery, major part of furniture & fixture, other fixed assets and seme part of land & Building and is not operating in any segm entasondateandis looking for new opportunity. 8. Details in respect of adequacy of internal financial controls with reference to the Financial Statements. The company has adequate internal financial controls with reference to financial statement. As there is no employee involved in the company due to all operations stopped there is no requirement of any control. Though company has appointed internal auditor during the year to audit and highlight the adequacy of internal control. 9. Details of Subsidiary/Joint Ventures/Associate Companies There is no company which either have become or ceased to be its Subsidiaries, joint ventures or associate companies during the year. So no statement about subsidiary company (ies) is required to be given. 10. Performance and financial position of each of the subsidiaries, associates and joint venture companies included in the consolidated financial statement. There is no subsidiaries, associates and joint venture companies of the company so report on the performance and financial position of these are not applicable to the company. 11. Deposits The details relating to deposits, covered under Chapter V of the Act,- The company has taken interest-free unsecured loans, repayable on demand, from four parties covered in the register maintained under section 189 of the Companies Act, 2013, The maximum amount involved during the year was Rs. 2,00,27,951/-and tlie year-end balance of loans taken from such parties was Rs. 1,87,26,985/-. Apart from above the company has not accepted any deposits. (a) accepted during the year Rs. 35,42,068/- (b) remained unpaid or unclaimed as at the end of the year; Rs. 1,87,26,985/- (c) whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved- There is no default in repayment of interest or deposit during the year. (i) at the beginning of the year;: NIL (ii) maximum during thce year;: NIL (iii) at the end of the year;: NIL There is no such deposits which are not in compliance with the requirements of Chapter V of the Act; 12. Statutory Auditors M/s Jain Shrimal & Co., Chartered Accountants, Jaipur, retire at the ensuing Annual General Meeting and being eligible for re-appointment have given their consent for re-appointment Your Directors recommend their reappointment. 13. Explanation or Comments by the Board on every qualification, reservation or adverse remark or disclaimer made in: i) Auditors' Report There is no qualification, reservation or adverse remark or disclaimer made by the auditor in his report so the explanations or comments by the Board is not required. ii) Secretarial Audit Report: There is no qualification, reservation or adverse remark or disclaimer made by the auditor in his report so the explanations or comments by the Board is not required. 14. Share Capital A) Issue of equity shares with differential rights No equity shares issued during the year. All equity shares issued in earliear years have equal rights. No equity shares issued with differential rights till date. B) Issue of sweat s quity shares The Company has not issued any sweat equity shares from inception to till date. C) Issue of employee stock options The Company has not issued any employee stock options to any of its employee from its inception to till date. D) Provision of money by company for purchase of its own shares by employees or by trustees for the benefit of employees No provision has been made for purchase of company's own shares by employees or by trustees for the benefit of employees from its inception to till date. 15. Extract of the annual return: Pursuant to Section 134(3)(a) of the Companies Act, 2013 read with rule l f l ) of the Companies (Management and Administration) Rules 2014, the extract of annual return is annexed herewith and forming part of the report. (Annexure-VII) 16. Conservation of energy, technology absorption and foreign exchange earnings and outgo: Particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under section 134(3)(m)of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are setoutina separate statement attached hereto as Annexure - IV and forming part of the report. 17. Corporate Social Responsibility (CSR) : Neither the Company fall under the criteria for which the Corporate Social Responsibility applicable nor it has operations. So it is not applicable to the company. 18. Directors: A) Changes in Directors and Key Managerial Personnel Shri Chandra Mohan Khandlwal has resigned under section 168 of the companies Act, 2013 from the directorship from 30.03.2015 and Smt. Arti Hirawat has joined as woman director during the year and Mr. Vishal Sharma joined as company secretary as on 30.3.2015. There is no change in key managerial person during the year except Mr. Vishal Sharma, joined as company secretary ason30.3.2015. B} Declaration of Independence by Independent Director(s) and re- appointment, if any Pursuant to section 149(6) of the Companies Act, 2013, Independent Directors of the Company have made a declaration confirming the compliance of the conditions of the independence stipulated in the aforesaid section. Both the independent Director has not completed their first term of 5 years. So, re-appointment is not required. C) Formal Annual Evaluation The Board of Directors of the company has initiated and put in place evaluation of it's own performance, its committees and individual Directors. The result of the evaluation is satisfactory and adequate and meets the requirement of the company. 19. Number of meetings of the Board of Directors: The Board have met 6 times and independent directors once during the year ended31st March, 2015, 20. Detail of Committee of Directors: Composition of Audit Committee of Directors, Nomination and Remuneration Committee of Directors and Stakeholders Relationship/Grievance Committee of Directors, number of meetings held of each committee during the financial year 2014-15 and meeting attended by each members of the Committee as required under the Companies Act, 2013 are provided in Corporate Governane Report and forming part of the Report, The recommendation by the Audit Committee as and when made to Board has been accepted by it. 21. Details of establishment of vigil mechanism for directors and employees: Your company has put in place the vigil mechanism. The detailed mechanism is given in Corporate Governance Report forming part of this report. 22. Policy on Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of director and other matters provided under sub-section (3) of section 178: The detail is given in Corporate Governance Report forming part of this report. 23. Particulars of loans, guarantees or investments under section 186: There is no loan given, investment made. guarantee given or security provided by the Company to any entity under Section 186 of the Companies Act, 2013, 24. Particulars of contracts or arrangements with related parties: There is no transaction with related party which requires disclosure under section 134(3)(h) of the Companies Act, 2013 and Rule8(2) of the Companies (Accounts) Rules,2014. 25. Managerial Remuneration: Your Company neither provide any remuneration to any Director nor has any employee on its Roll so the analysis of Remuneration pursuant to Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2 014 is not required. 26. Secretarial Audit Report A Secretarial Audit Report for the year ended on 31st March 2015 in prescribed formduly audited by the Practising Company Secretary M/s Shailja Sharma & Associates is annexed herewith as Annexure - VIII and forming part of the report. 2 7. Corporate Governance: Your Company re-affirm its commitment to Corporate Governance and is fully compliant with the conditions of Corporate Governance stipulated in Claus e 49 ofthe Listing Agreement with Stock Exchanges. A separate section on compliance with the conditions of Corporate Governance as Annexure-I, and a Certificate from the firm Practising Chartered Accountant in this regard is annexed as Annexure - II, hereto and forms a part of the report. 28. Risk management policy: During the year, Management of the Company, evaluated the existing Risk Management Policy of the Company to make it more focused in identifying and prioritizing the risks, role of various directors in monitoring and mitigation of risk and reporting process. The Risk Management Policy has been reviewed and found adequate to the requirements of the company. 29. MANAGEMENT DISCUSSION & ANALYSIS: This has been included as a separate Annexure - III to this Report. 30. Directors' Responsibility Statement: Pursuant to the requirements of section 134(1)( c) of the Companies Act, 2013 and on the basis of explanation and compliance certificate given by the Directors of the Company, and subject to disclosures in the Annual Accounts and also on the basis of discussions with the Statutory Auditors of the company from time to time, we state as under: (a) that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) that the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period; (c) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; (d) that the directors had prepared the annual accounts o n a going concern basis; and (e) that the directors, in the case of a listed company, had laid down internal financial controls to be folio wed by the company and that such internal financial controls are adequate and were operating effectively. (f) that the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 31. Depository System: The company's shares can now be traded in electronic form. The company has entered into an agreement with CDSL to act as depository and for dematerialization of shares. CDSL has issued IS IN IN E3 51 DOl 013 and activated the same as on 25th August, 2014. Some of shareholders has already dematerialized its shares in electronic form but most of shares till date are in physical form. The shareholders are requested to convert their physical holding to dematerialization. 32. Business Responsibility Report: Business Responsibility Repo rt is attached as Annexure-VI. 33. Employees : None of the employees of the company is in receipt of remuneration of Rs. 60,00,000/- or more per annum, if employed for whole of the year or Rs. 5,00,000/- or more per month, if employed for part of the year, 34. Acknowledgements: The Board gratefully acknowledges the co-operation and support given by the Shareholder, Creditors, Bank and financial institutions and others. . / For and on behalf of the directors Amitabh harawak Managing directors Din 00349697 Place : jaipur |