DIRECTORS' REPORT TO THE MEMBERS 1.Your Directors present the Annual Report and Audited Statements of Account for the year ended 31st March, 2016. 2. OVERALL PERFORMANCE During the year under report your Company's main income has been from Registrar and Share Transfer Agent's activities. Besides, the Company also earned income from interest and rent. After depreciation and Income Tax (MAT) profit for the year was Rs. 110.68 lacs. There is no Income Tax Liability for the year due to brought forward unabsorbed depreciation. 3. REHABILITATION PACKAGE As reported earlier proceeding under the provisions of The Sick Industrial Companies Act, (Special Provisions) 1985 (the 'SICA') is undergoing before Board for Industrial & Financial Reconstruction ('BIFR'). The Audited Balance Sheet of the Company as at 31.03.2013 shows that the Company's Net worth turned positive. As per legal advice your Company moved an application before BIFR seeking de-registration from BIFR in order to come out from the purview of SICA and the said application is pending for disposal. 4. SUBSIDIARY COMPANY/ASSOCIATE COMPANY - CONSOLIDATED FINANCIAL STATEMENTS The Company has no Subsidiary but only one Associate Company, J.K. Cotton Ltd. (JKCL) in terms of 3rd proviso to Rule 6 of the Companies (Accounts) Rules, 2014.The Company is required to prepare Consolidated Financial Statement of the Company and its Associate Company, JKCL, under Section 129(3) of the Companies Act, 2013. Consolidation of the accounts of Associate Company is made in accordance with AS-23 issued by The Institute of Chartered Accountants of India under Equity Method. In the Equity Method investment is initially recorded at cost, identifying any goodwill/capital reserve arising at the time of acquisition. The shares of JKCL were allotted to the Company in terms of Rehabilitation Scheme approved by Board for Industrial & Financial Reconstruction ('BIFR'). JKCL was a sick company and had huge carried forward losses when the shares were allotted resulting in capital reserve at the time of allotment. The Company has made provision for diminution in value of investment and investments are carried at notional value of Rs. 1.00. JKCL has made some profits in subsequent years and your company's share in profits had been adjusted against capital reserve created at the time of acquisition. The Value of investment under Equity method will continue to be negative therefore standalone and consolidated financials will be same. Necessary details have been given in Note No.25 of Notes on Accounts. 5. DIVIDEND Your Directors have not recommended any dividend for the year under report. 6. SHARE CAPITAL The paid up Equity Share Capital as at March 31, 2016 stood at Rs. 3,71,34,752/-. During the year under review, the Company has not issued any further shares. 7. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY Details of Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statements. 8. PERSONNEL No employee drawn remuneration in excess of the limits as specified under the amended provisions of Section 134 of the Companies Act, 2013 read with Companies (Appointment & Remuneration) Rules, 2014 throughout or part of the financial year under review. None of the employee is a relative of any Director of the Company. None of the employee hold (by himself or along with his spouse and dependent children) more than two percent of the equity shares of the Company. 9. SIGNIFICANT AND MATERIAL ORDER PASSED BY THE REGULATOR(S) OR COURT(S)/ MATTER OF EMPHASIS No significant or material order has been passed by the Regulator or Courts or Tribunals during the financial year. 10. CORPORATE GOVERNANCE A report on Corporate Governance along with the Auditors' Certificate on its compliance, forms an integral part of this Report. 11. PUBLIC DEPOSITS Your Company has not invited any deposits from public/shareholders under Section 73 and 74 of the Companies Act, 2013. 12. WHISTLE BLOWER POLICY/VIGIL MECHANISM The Company has a Whistle Blower Policy to report genuine concerns or grievances, if any. The Whistle Blower Policy has been posted on the website of the Company. 13. CORPORATE SOCIAL RESPONSIBILITY Your Company's profits, net worth and turnover are far below from the criteria as mentioned in Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility) Rules, 2014. Hence the CSR provisions are not applicable to the Company during the F.Y. 2015-16. 14. DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY The Company has been addressing various risks impacting the Company and the policy of the Company on risk management is provided in annexed Corporate Governance Report. The Risk Management Policy has been posted on the website of the Company. 15. REMUNERATION POLICY The Board of Directors has, on the recommendation of the Nomination & Remuneration Committee, framed a policy which lays down a framework concerning remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. The Policy also covers criteria for selection and appointment of Board Members and Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report. 16. RELATED PARTY TRANSACTIONS All the related party transactions are entered on arm's length basis, in the ordinary course of business and are in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Regulations. There are no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict with the interest of the Company at large or which warrants the approval of the shareholders. Accordingly, no transactions are being reported in Form AOC-2 in terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014. However, the details of the transactions with Related Party are provided in the Company's financial statements in accordance with the Accounting Standards. All Related Party Transactions are presented to the Audit Committee and the Board. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. A statement of all related party transactions is presented before the Audit Committee on a quarterly basis, specifying the nature, value and terms and conditions of the transactions. The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website. None of the Directors has any pecuniary relationship on transactions vis-a-vis the Company. 17. AUDITORS' REPORT Your Company prepares its financial statements in compliance with the requirements of the Companies Act, 2013 and the Generally Accepted Accounting Principles (GAAP) in India. The financial statements have been prepared on historical cost basis. The estimates and judgments relating to the financial statements are made on a prudent basis, so as to reflect a true and fair manner, the form and substance of transactions and reasonably present the Company's state of affairs, profits and cash flows for the year ended March 31, 2016. Auditors' Report to the shareholders does not contain any qualification in the financial statements for the year under report. 18. INTERNAL CONTROL SYSTEM INTERNAL CONTROL The Company's internal control system is commensurate with its size, scale and complexities of its operations. An Independent firm of Chartered Accountants carries out Internal Audit on the random basis to detect flaws in the system. Internal Audit reports are prepared on the respective areas to create awareness and corrective actions are taken to rectify them. These reports are reviewed by the Audit Committee of the Board for follow up action. The Audit Committee of the Board of Directors also reviews the adequacy and effectiveness of internal control systems and suggests improvement for strengthening them, from time to time. INTERNAL FINANCIAL CONTROLS In accordance with Section 134(5)(e) of the Companies Act, 2013, the Company has Internal Financial Controls Policy by means of Policies and Procedures commensurate with the size & nature of its operations and pertaining to financial reporting. In accordance with Rule 8(5)(viii) of Companies (Accounts) Rues, 2014, it is hereby confirmed that the Internal Financial Controls are adequate with reference to the financial statements. 19. DIRECTORS AND KEY MANAGERIAL PERSONNEL 19.1 In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Company's Articles of Association, Smt. Vidhi Nidhipati Singhania (DIN 00293520) will retire by rotation at the ensuing Annual General Meeting and being eligible, offers herself for reappointment. Smt. Vidhi Nidhipati Singhania is an enthusiast of art, penchant of classical music and is a designer epitomizing the perfect blend of traditional and contemporary fashion. A student of Cathedral and John Connon School, Mumbai, Smt. Vidhi Singhania moved to Kota, Rajasthan in 1994 and thus began her foray into the world of textiles and fashion. A veteran in the fashion industry, she has been a member of the Fashion Design Council of India (FDCI) for the last ten years.She is also a Director in other Indian Companies. 19.2 The Board of Directors have reappointed Shri Ashok Gupta (DIN:00135288) as Managing Director in its Meeting held on 23rd May, 2016, upto period of two years w.e.f. 1st September, 2016 on the terms and conditions enumerated in the resolution being put for your approval. Shri Gupta is a qualified Chartered Accountant having more than 3 decades of experience in the field of Accounts and Finance and working with Company since 1978. 19.3 With the coming into force of the Companies Act 2013, the Board appointed the existing Independent Directors viz Dr. K.B Agarwal, Shri Ravindra Kumar Tandon, Shri Anil Kumar Dalmia and Shri Kedar Nath Mehrotra as Independent Directors each for a term upto five years under the Act. All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement and/or Listing Regulations. 20. KEY MANAGERIAL PERSONNEL During the year under report, the Company has allowed to continue appointment of the following Officials as Key Managerial Personnel:- S.No Name of the Official Designation 1. Shri Ashok Gupta Managing Director 2. Shri Chandra Prakash Agarwal Sr. General Manager (Taxation) & CFO 3. Shri Prabhat Kumar Mishra Manager(Legal) & Company Secretary 21. MEETINGS OF THE BOARD OF DIRECTORS During the year 2015-16, four Board Meetings were convened and held, the detai ls of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and Listing Regulations. 22. BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, and Listing Regulations the Board has carried out an annual performance evaluation of its Independent Directors and the Independent Directors also evaluated the performance of Chairman and other Non-Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process. The Board of Directors also evaluated the functioning/performance of Audit Committee, Stakeholders Relationship Committee, Nomination & Remuneration Committee, Committee of Directors and expressed satisfaction with their functioning/performance. 23. DIRECTORS' RESPONSIBILITY STATEMENT The Directors pursuant to the provisions of Section 134(3)(c) of the Companies Act , 2013 do hereby confirm that: (i) In the preparation of the annual accounts, the applicable Accounting Standards have been followed and that no material departures have been made from the same; (ii) They 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 at the end of the financial year and of the profit of the Company for that year; (iii) They have taken proper and sufficient care for 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; (iv) They have prepared the annual accounts on a going concern basis; (v) The proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; (vi) That systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively: 24. STATUTORY AUDITOR M/s. P.L. Tandon & Co., Chartered Accountants, Kanpur, Auditors of the Company, will retire from their office at the ensuing Annual General Meeting. They are, however, eligible for reappointment. They have furnished a Certificate to the effect that their appointment will be in accordance with limits specified in Section 139 read with Section 141 of the Companies Act, 2013. You are requested to consider their appointment. 25. SECRETARIAL AUDIT Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Messrs Banthia & Company, Kanpur, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the Financial Year 2016-17. The Secretarial Audit Report for the Financial Year 2015-16 is annexed herewith as "Annexure - A". There is no secretarial audit qualification for the year under report. 26. STATUTORY INFORMATION 26.1. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO. As there has been no manufacturing operation during the year, there is nothing to be reported with regard to conservation of energy and technology absorption. However, the details of foreign exchange earnings and out go are given in the additional information in the Annual Report 26.2. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT 9 as required under Section 92 of the Companies Act, 2013 is annexed hereto as "Annexure -B" and forms an integral part of this Report. 27. ACKNOWLEDGEMENTS Your Directors wish to thank the employees for their dedication and hard work.Your Directors also wish to thank the Shareholders/ Stakeholders. FOR AND ON BEHALF OF THE BOARD ASHOK GUPTA Managing Director DIN 00135288 Dr. K. B. AGARWAL DirectorDIN - 00339934 Place : Kanpur Dated: 24th June, 2016 |