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Jindal Cotex Ltd.

BSE: 533103 Sector: Industrials
NSE: JINDCOT ISIN Code: INE904J01016
BSE LIVE 15:54 | 19 Sep 12.30 0.31
(2.59%)
OPEN

11.50

HIGH

12.30

LOW

11.50

NSE 15:31 | 19 Sep 12.20 0.45
(3.83%)
OPEN

12.00

HIGH

12.30

LOW

11.65

OPEN 11.50
PREVIOUS CLOSE 11.99
VOLUME 8632
52-Week high 22.20
52-Week low 11.10
P/E
Mkt Cap.(Rs cr) 55
Buy Price 0.00
Buy Qty 0.00
Sell Price 12.30
Sell Qty 4363.00
OPEN 11.50
CLOSE 11.99
VOLUME 8632
52-Week high 22.20
52-Week low 11.10
P/E
Mkt Cap.(Rs cr) 55
Buy Price 0.00
Buy Qty 0.00
Sell Price 12.30
Sell Qty 4363.00

Jindal Cotex Ltd. (JINDCOT) - Director Report

Company director report

Dear Members

The Directors of your Company have pleasure in presenting their 19th Annual Report onthe affairs of the company together with Audited Annual Accounts for the financial yearended 31st March 2016.

Financial Results

(Rs. in lacs)

Particulars 2015-16 2014-15
Turnover & Other Income 370.35 11181.61
Profit Before Depreciation Interest & Tax (PBDIT) (1917.92) (13317.91)
Interest and Financial Expenses 2552.14 2458.51
Profit Before Depreciation & Tax (PBDT) (4470.06) (15776.42)
Depreciation 723.02 783.14
Profit Before Tax (PBT) (5193.08) (16559.56)
Less- Provision for Tax (Including Deferred Tax) 0.45
Profit for the year (PAT) (5193.53) (16559.56)
Add - Surplus brought forward From previous Year
Profit available for Appropriations (5193.53) (16559.56)
Appropriations
Proposed Dividend -- --
Bonus Shares Issued -- --
Surplus Carried to Balance Sheet (5193.53) (16559.56)

Since the company is in financial crisis your company could achieve total revenue ofRs. 3.70 Crores during the year under review as against Rs. 111.82 Crores in the previousyear. The company has suffered a loss of Rs. 51.93 Crores as against loss of Rs. 165.59Crores in the previous year which is primarily due to provision for Bad Debtsdepreciation finance cost and loss on diminution in value of investments. One of themanufacturing facilities of the company situated at VPO Jugiana G.T. Road Ludhianaremained closed due to financial crisis and other manufacturing facility at VillageMandiala Kalan Bija was leased out. Since all the bank accounts of the company havebecome sub-standard over a period of time the banks have started recovery action againstthe Company. The company is however working on restructuring with bankers for theoperation of these units.

Dividend

Your directors do not recommend any dividend for the year under review.

Management Discussion & Analysis Report

The Management Discussion and Analysis of financial conditions and results of operationof the company for the year under review is attached to this Report.

Subsidiaries

The consolidated financial statements presented by the Company include financialinformation of its subsidiaries prepared in compliance with applicable AccountingStandards are attached to and form part of the Annual Report. Annual accounts of thesubsidiary companies and the related detailed information will be made available to theshareholders of the holding and subsidiary companies' seeking such information at anypoint of time.

Further the annual accounts of the subsidiary companies will also be kept forinspection by any shareholders at the Registered Office of the holding company and that ofthe subsidiary companies concerned. The company has the following subsidiaries:-

Jindal Specialty Textiles Ltd.

The company has set up facilities for the manufacture of technical textile productslike banner fabrics general tarpaulin truck siders etc. at its project at VillageThathal Tehsil Amb District Una Himachal Pradesh. The company has achieved salesturnover and other income of Rs. 68.89 Crores for the year under review as against of Rs.55.20 Crores in the previous year.

Jindal Medicot Ltd.

The company has set up facilities for the manufacture of the technical textile productslike cotton crepe bandage absorbent cotton cotton balls pads dental rolls etc. at itsproject at Village Thathal Tehsil Amb District Una Himachal Pradesh. The company hasachieved sales turnover and other income of Rs. 30.65 Crores as against of Rs. 30.21Crores in the previous year.

Jindal International FZE

This is 100% subsidiary of our company set up in free zone in UAE. The company isengaged in the general trading activities.

Directors and Key Managerial Personnel

Mr. Balwinder Singh Chief Financial Officer has resigned from the services of thecompany with effect from 20th May 2016. Mr. Shiv Pal has been appointed as ChiefFinancial Officer with effect from 22nd June 2016. Pursuant to the provisions of Section152(6) of the Companies Act 2013 and Articles of Association of the company Sh. YashPaul Jindal (DIN 01923862) and Sh. Sandeep Jindal (DIN 01639743) will be retiring byrotation at the ensuing Annual General Meeting and being eligible offer themselves forre-appointment. The Board has recommended their appointment to the members of the companyat the ensuing Annual General Meeting.

During the year under review Mrs. Preeti Khanna and Ms. Nisha Rani Independentdirectors of the company resigned from the Board. The Board wishes to place on record itsdeep sense of appreciation for the valuable contributions made by them to the Board andthe company during their tenure as Director of the company. During the year under reviewMs. Alisha was appointed as additional director with effect from 22nd June 2016 in thecapacity of Independent Director in accordance with the provisions of the Companies Act2013 and listing guidelines. The Independent director has declared that she meets thecriteria of independence in terms of section 149(6) of the Companies Act 2013. Yourdirectors recommend the appointment of the Independent Director on non-rotational basis asper the provisions of the Companies Act 2013. Sh. Yash Paul Jindal Sh. Rajinder Jindaland Sh. Ramesh Jindal ceased to be Whole-time directors of the company w.e.f. 30th June2016. They however continue to be on the Board of the company as Non ExecutiveDirectors.

Corporate Governance

A separate report on Corporate Governance is enclosed as a part of this Annual Report.A certificate from the Auditors of the Company regarding compliance with the CorporateGovernance norms stipulated is annexed to the Report on Corporate Governance.

Board Evaluation

The Board carried out a formal annual performance evaluation of its own performance andthat of its Committees and Individual Directors as required under the provisions of theCompanies Act 2013 and Regulation 17 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.

Separate Meeting of Independent Directors The company's Independent Directors meton 14th March 2016 without the attendance of Non-Independent Directors. All theIndependent Directors were present at the meeting. The Independent Directors in itsmeeting reviewed the performance of Non-Independent Directors and the Board as a whole.

Directors' Responsibility Statement

Pursuant to the provisions of section 134(5) of the Companies Act 2013 with respectto Directors responsibility statement the Directors hereby confirm that:-a) In thepreparation of Annual Accounts the applicable Accounting Standards have been followed andthat there are no material departures;

b) They have selected such Accounting Policies and applied them consistently and madeprudent judgments & estimates that are reasonable so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the loss ofthe company as on date;

c) They have taken proper & sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing & detecting the fraud and otherirregularities; d) The Annual Accounts have been prepared on 'going concern basis'.

e) They had laid down internal financial controls to be followed by the company andthat such internal financial controls are adequate and were operating effectively. f) Theyhad devised proper systems to ensure compliance with the provisions of all applicable lawsand that such systems were adequate and operating effectively.

Auditors

M/s. Raj Gupta & Co. Chartered Accountants (Registration No. 000203N) have beenappointed as Statutory Auditors of the company at the last Annual General Meeting held on30th September 2014 till the conclusion of the 21st Annual General Meeting subject toratification by the members at every consequent Annual General Meeting. Thereforeratification for the appointment of M/s. Raj Gupta & Co. Chartered AccountantsStatutory Auditors of the company is being sought from the members at the ensuing AnnualGeneral Meeting. The report of the auditors of the company is self explanatory and hasbeen explained in notes to accounts and hence does not call for any further comments.

Cost Audit

Pursuant to the provisions of section 148(3) of the Companies Act 2013 the companyhas appointed M/s. Gurvinder Chopra & Co. Cost Accountants as Cost Auditor of thecompany for conducting audit of cost records in respect of manufacturing activities ofthe company for the financial year 2015-16. The Cost Audit Report for the year ended 31stMarch 2016 will be submitted with Ministry of Corporate Affairs Government of India.

Secretarial Audit

According to the provisions of Section 204 of the Companies Act 2013 your company hasengaged the services of M/s. Reecha Goel & Associates Company Secretaries to conductSecretarial Audit of the company for the financial year 2015-16 and Secretarial AuditReport for the financial year 2015-16 is attached and forms part of the annual report.

Reference with Board for Industrial and Financial Reconstruction (BIFR)

The company has accumulated losses of Rs. 227.64 Crores as at 31.03.2016 and has erodedits peak level net worth by more than 50% and has become a potentially sick company.Reference under the provisions of Section 23 of Sick Industrial Company (SpecialProvisions) Act 1985 (SICA) has been generated on 22nd January 2016.

Energy Conservation Technology Absorption & Foreign Exchange Informationrequired under section 134(3)(m) of the Companies Act 2013 read with Rule 8 of theCompanies (Accounts) Rules 2014 as regard disclosure of particulars of conservation ofenergy technology absorption and foreign exchange earnings and outgo is annexed heretoand forms part of this report.

Fixed Deposits

During the year under review your company has not accepted any fresh fixed depositsfrom the public. Due to severe financial constraints the company could fulfill itsobligation in part for the repayment of fixed deposits which has become due for repaymentafter the time extended by the Hon'ble Company Law Board New Delhi.

Particulars of Employees

No employee is covered under the provisions of section 197 (12) of the Companies Act2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial personnel) Rules 2014.

Corporate Social Responsibility (CSR):

During the year under review the company was not required to spend any amount onCorporate Social Responsibility activities as required under section 135 and Schedule VIIof the Companies Act 2013 as the company had incurred losses during the threeimmediately preceding financial years.

Vigil Mechanism

In pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013a Vigil Mechanism for directors and employees to report genuine concerns has beenestablished. The Vigil Mechanism Policy has been uploaded on the website of the company atwww.jindalcotex.com.

Related Party Transactions

The Related Party Transactions made during the financial year 2015-16 were on arm'slength basis and in the ordinary course of business. There were no materially significantrelated party transactions with the company's Promoters Directors Kay ManagerialPersonnel or their relatives which could have a potential conflict with the interest ofthe company. The Related Party Transactions has been reported and annexed hereto in thisannual report.

Extract of Annual Return

As required pursuant to section 92(3) of the Companies Act 2013 and Rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in MGT9 is forming a part of this Annual Report.

Particulars of Loans Guarantees or Investments

Details of Loans Guarantees and Investments covered under the provisions of section186 of the Companies Act 2013 are given in the notes to financial statements annexedhereto in this annual report.

Remuneration of the Directors/ Key Managerial Personnel (KMP)/ Employees:

The information required pursuant to section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 Companies (Particularsof Employees) Rules 1975 in respect of employees of the company and Directors isfurnished as under:

Name Designation Remuneration paid FY 2015-16 Remuneration paid FY 2014-15 Increase in remuneration from previous year
Sandeep Jindal MD 450000 300000 150000
Yash Paul Jindal WTD 600000 600000
Anil Kumar CS 555660 538680 16980
Balwinder Singh CFO 120000 120000

Risk Management Policy

Risk Management is a very important part of business. The main aim of risk managementis to identify monitor and take precautionary measures in respect of the events that maypose risks for the business. The policy of the company on risk management is providedelsewhere in this Annual Report in Management Discussion and Analysis.

Associates Companies

Pursuant to section 129(3) of the Companies Act 2013 a statement containing silentfeatures of financial statement of Associates companies in Form AOC-1 is annexed withfinancial statements.

Industrial Relations

Industrial relations remained cordial throughout the year and the Directors expresstheir appreciation towards the workmen for their co-operation and hope for continuedcordial relations in the years to come.

Acknowledgement

Your Directors would like to express their grateful appreciation for the assistance andco-operation received from Bankers Government Departments Shareholders and otherBusiness Associates for their continued and valuable co-operation & support extendedto the company. We take this opportunity to place on record our warm appreciation for theemployees at all levels for their dedicated services and valuable contributions towardsthe growth of the Company.

FOR AND ON BEHALF OF THE BOARD JINDAL COTEX LIMITED
(Yash Paul Jindal) (Sandeep Jindal)
Director Managing Director
DIN: 01923862 DIN: 01639743
PLACE: Ludhiana
DATED: 13th August 2016