J J Exporters Ltd.
|BSE: 530049||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE408B01015|
|BSE 00:00 | 02 Mar||J J Exporters Ltd|
|NSE 05:30 | 01 Jan||J J Exporters Ltd|
J J Exporters Ltd. (JJEXPORTERS) - Director Report
Company director report
Your Directors have pleasure in presenting the Forty Fifth Annual Report together withthe Audited Accounts of the Company for the yearended 31st March2018.
BUSINESS AND PERFORMANCE
The performance of the Company during the year under review is no better than previousyear.The sales revenue was down at ^114.70 lacs as compared to Rs693.83 lacs during theprevious year.The loss before extra ordinary item was at Rs 528.29 lacs as compared toRs1339.22 lacs in the previous year.The main reason for the poor performance was closureof Company's manufacturing units at Kolkata and Bangalore due to economic reasons.
CURRENT YEAR'S OUT LOOK
In view of the closure of manufacturing units there is no future for the Company.
WINDING UP OF THE COMPANY U/S 271(a) OF THE COMPANIES ACT 2013
The financial performance of the Company has continued to suffer set back since lastfive years mainly due to drastic drop in demand of silk fabrics and made ups across theglobe resulting in the complete erosion of net worth of the Company. In view of the abovethe Company with your approval has decided to go for winding ofthe Company under section271(a) ofthe Companies Act 2013 and will apply to NCLT Kolkata Bench.
SETTLEMENT OF DUES OF THE BANKS
The loan from Industrial Development Bank of India (IDBI) (including interest thereon)amounting to Rs36.03 crores has already been called back by the bank for repayment andloan from Indian Overseas Bank (IOB) to the extent of Rs28.44 crores (including interestthereon) subject to confirmation was also called back by the bank for repayment. Theabove two banks had also served notice under section 13(2) of the Securitisation andReconstruction of the Financial Assets and Enforcement of Security Interest Act 2002 .TheCompany has defaulted in the repayment ofabove loans.
The IDBI Bank Ltd. (IDBI) IDBI House 44 Shakespeare Sarani Kolkata-700017 vide itspossession notice dated 14th July 2017 and 27th July 2017 had taken the possession oftheMovable & Immovable assets situated at Mouza-Gangarampur South 24 Paraganas WestBengal & Dodaballapur Bangalore Karnataka which were secured against Loan so theCompany has not provided depreciation on the said Fixed Assets and also interest on theloans taken from IDBI & IOB from the said possession date. Subsequently The IDBIvide its letter Reference No.IDBI/NMG/JJEL/2017-18/9785 dated 24th January 2018 sold thesecured assets of the Company at Gangarampur on 18th January 2018 under the SARFAESI Act2002 for a consideration of Rs 18.01 crores which has been apportioned between the IDBIand IOB at Rs 12.35 crores and Rs 4.62 crores respectively net of expenses.
Further the IDBI has charged Rs 1.03 crores vide mail dated 29.05.2018 as expenditureincurred by the IDBI & IOB in the account and at the same time IOB also charged Rs0.07 crores for the payment to ECGC Ltd. The above two charges are included in thefinancial statements as "Bank charges" in the quarter ended 31st March 2018.
The above sale proceeds on account of Immovable & Movable properties which has beenapportioned by the bank for Immovable property at Rs 14.01 crores and for the Movableproperty at Rs 4.00 crores. The apportionment of sale proceeds between Land & Buildingand Movable assets has been made on the carrying amount ofthe assets in the Financialstatements as there is no item wise details of sale proceeds provided by the Banks. TheStatutory Compliances if any complied by the bank on account of the said transactionshave not been confirmed.
The Company has not issued any shares with differential voting rights sweat equityshares or employee stock option during the year under review. The Company has also notmade any provision for purchase of its own shares by employees or trustees for the benefitof employees.
Mr. A B Chaturvedi Director resigned from the services ofthe Company on 31.08.2017.
Necessary declaration from Independent Directors as required under section 149(7) oftheCompanies Act 2013 confirming that they meet the criteria of Independence and areeligible to continue as an Independent Director have been received from Mr. Rahul SinghiMrs. Dipali Sharma and Mr. H. S. Senapati the Independent Directors on the Board.
Mr. Rajiv Jhunjhunwala Director who retires by rotation and being eligible haveoffered himselffor re-appointment at the ensuing Annual General Meeting.
A meeting of Independent Directors was held during the year where performance ofNon-Independent Director was evaluated. The performance of Independent Directors wasevaluated by the Board. The performance of an individual director is evaluated based onthe performance ofthe department/unit of which he is the functional head.The performanceofthe Board as a whole or its committee is evaluated based on the performance of theCompany.
Mr. S.N.Jhunjhunwala and Mr. Rajiv Jhunjhunwala Executive Directors designation hasbeen changed from Executive Directors to Non-Executive Directors from closing hours of31.03.2018.
The Company has framed a familiarization programme for Independent Directors andaccordingly programmes are organized on continuous basis by the Company. Details of theprogramme are available on Company's website www.jjexporters.com.
The Company has formulated a policy for determining material subsidiaries. Details ofthe policy are available on Company's website www.jjexporters.com
In compliance with Regulation 30(4) ofthe SEBI (Listing obligations & DisclosureRequirements) Regulation 2015 the Company has framed a policy for determination ofmateriality of events/information. The policy and contact details of the personresponsible for determining the materiality is available on Company's websitewww.jjexporters.com .
In compliance with Regulation 30(1) ofthe SEBI (Listing obligations & DisclosureRequirements) Regulation 2015 the Company has framed a Archival Policy for disclosures ofany events or information which in the opinion of the Board of Directors of listed Companyis to be disclosed to Stock Exchange(s) under this regulation and such disclosures shallbe hosted on the website of the Company for a minimum period of five years as per theArchival Policy. Details of the policy are available on Company's websitewww.jjexporters.com
BOARD OF DIRECTORS
The Board of Directors of the Company has an optimum combination of ExecutiveNon-Executive and Independent Directors as on 31st March 2018 and complies with therequirements of the Companies Act 2013. The Board of Directors of the Company as at 31stMarch 2018 consisted of two Promoter Executive Directors and three Non-PromoterNon-Executive Directors.
During the year under review 4(four) Board Meetings were held on 29.05.201711.08.2017 14.11.2017 & 06.02.2018. Composition of the Board of Directors details ofBoard meeting held during the year and other details are as under :
* Ceased to be Executive Director w.e.f. closing hours of 31.03.2018 but continuing asNon-Executive Director ** Ceased to be Executive Directorw.e.f. closing hours of31.03.2018butcontinuing as Non-Executive Director *** Ceased to be a Directorw.e.f. closing hoursof31.08.2017 AUDIT COMMITTEE
TheAudit Committee of the Board comprised of three Independent Non-Executive Directorsi.e. Mr. Rahul Singhi Mr. H. S. Senapati and Mrs.Dipali Sharma. Mr. Rahul Singhi is theChairman ofthe Committee. The Committee metfourtimes during the year under review on29.05.2017 11.08.2017 14.11.2017 & 06.02.2018. The attendance ofthe members at thesemeetings was as follows :
VIGIL MECHANISM AND WHISTLE BLOWER POLICY FOR DIRECTORS AND EMPLOYEES
The Company has framed vigil mechanism and whistle blower policy for Directors andemployees to report genuine concern. The details are available on Company's websitewww.jjexporters.com .
PREVENTION OF SEXUAL HARASSMENT ATWORKPLACE
The Company has in place a Policy in line with the requirements of The SexualHarassment of women at the work place (Prevention Prohibition & Redressal) Act2013.Internal Complaints Committee is in place to redress complaints received regardingsexual harassment. All employees (permanent contractual temporary trainees etc.) arecovered under this Policy.
The Company has not received any complaint on sexual harassment during the year2017-18.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All the contracts and arrangements entered into with related parties during the yearwere at arm's length basis. Details ofthe same are given in Form AOC-2 and is annexed tothe report. (Annexure - 1)
SECRETARIAL AUDIT REPORT
Secretarial Audit Report given by M/s. MR & Associates Company Secretaries inPractice is annexed to the report. (Annexure - 2)
RISK MANAGEMENT POLICY
In compliance of the requirements of Companies Act 2013 and Securities Exchange Boardof India (Listing Obligations and Disclosures Requirements) Regulations 2015 the Companyhad constituted a Risk Management Committee. The Committee
comprises of two Promoter Executive Directors Mr. S. N. Jhunjhunwala and Mr. RajivJhunjhunwala. Consequent upon resignation of Mr. A. B Chaturvedi Non-promoter ExecutiveDirector w.e.f.31.08.2017 he also ceased to be a member of the Committee. Mr. S. N.Jhunjhunwala is the Chairman of the Committee. The Company has laid down procedures toinform the Board Members about the risk assessment and minimization procedures. In view ofthe pending winding up process there is hardly any need to state risks associated withCompany's product.
EXTRACT OF THE ANNUAL RETURN
The extract of the annual return in Form No.MGT-9 is annexed to the report and forms apart of the Board's report (Annexure - 3)
NOMINATION AND REMUNERATION COMMITTEE
The Company had formed a Nomination and Remuneration Committee during 2015-16. TheCommittee identifies and recommends suitable candidates as Members of Board Keymanagerial personnel and other Senior Management. The remuneration policy of the Companyaims to ensure fair remuneration for the employees based on their performance. It alsoensures to eliminate discrimination while fixing the remuneration of various employees. Nomeeting was held during the year under review. The Nomination and Remuneration Committeeof the Board comprised of two Independent Non-Executive Directors i.e. Mr. Rahul SinghiChairman Mr. H. S. Senapati Member and one Promoter Non-Executive Director i.e. SriRajiv Jhunjhunwala who has been appointed on 30.05.2018.
OVERSEAS SUBSIDIARIES AND JOINT VENTURE
The Company has only one subsidiary viz. Spin International Inc at New York. Theperformance of the said subsidiary viz. Spin International Inc. was by and largesatisfactory during the year.
The retail showroom has been closed.
Owing to loss your Directors do not recommend any dividend for the year.
DIRECTORS RESPONSIBILITY STATEMENT
As required under section 134(3)(c) of the Companies Act 2013 your Directors confirmthat:
(a) in the preparation of the annual financial statements the applicable accountingstandards had been followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofloss of the company for that period;
(c) the directors had taken proper and 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 and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis;
(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
In view of decline in the net worth and sales revenue of the Company below thethreshold limit the Company is no more required to prepare and annex a report onCorporate Governance to the Directors Report required vide Circular No.CIR/CFD/POLICYCELL/7/2014 dated 15.09.2014ofSEBI.
At the 44th Annual General Meeting held on 26th September 2017 M/s. Lihala & Co.Chartered Accountants (Firm Registration No. 315052E) were appointed as Statutory Auditorsof the Company to hold the office for a term of five years commencing from the conclusionof 44th Annual General Meeting (AGM) till the conclusion of 49th AGM of the Companysubject to ratification of appointment by the Members of the Company in each AGM.
The Ministry of Corporate Affairs vide its notification dated 07.05.2018 omitted theprovision for ratification of appointment of Auditors by shareholders at every AGM.Accordingly the ratification of the appointment of Statutory Auditors by shareholders isnot required to be adopted in every AGM.
In view of the above the Board of Directors of the Company have proposed partialmodification in the previous resolution of the members passed at44th AGM ofthe Company onappointment ofStatutory Auditors and recommended to continue appointment of M/s. Lihala& Co. Chartered Accountants (Firm Registration No. 315052E ) as Statutory Auditorsofthe Company for a period of five years commencing from the conclusion of 44th AnnualGeneral Meeting (AGM) till the conclusion of 49th AGM of the Company without seeking anyfurther ratification of their appointment from members at this AGM and ensuing AGMs tillthe tenure of the Statutory Auditors.
The remark in Auditors Report read with notes to Accounts are self-explanatory and needno further clarification. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNING AND OUTGO
A) Conservation of energy and technology absorption :
The Company had closed its unit at Bangalore w.e.f. 01.04.2013. The unit at Gangarampurhas also been closed permanently from 3rd January 2017. The Company had also closed itsunit at Bhagalpurw.e.f. 31.03.2018
The particulars in respect of conservation of energy and technology absorption inrespect of Bhagalpur Unit upto 31.03.2018 are given in Annexure A' forming part ofthis report pursuant to Section 134(3)(m) of Companies Act 2013 and rules made thereunder
B) Foreign Exchange earnings and outgo:
Foreign Exchange Used : f 2469350
Foreign Exchange Earned : f 7077096
The details of investments are given in Note No. 3(a)' annexed to the annualaccounts of the Company.
The particulars as required underSection 134 ofthe Companies Act 2013 and Rules madethere under in respectofCompany's subsidiary viz. Spin International INC.are as follows :
The Company has not accepted any Fixed Deposits during the year. No deposits wereoutstanding at the beginning of the year. MANAGEMENT DISCUSSION & ANALYSIS REPORT
In view of the pending winding up process there is no need of management discussion andanalysis report.
i) The ratio of remuneration paid to each Director during the year to the medianremuneration of the employees of the Company
B. The Non-Executive Directors receive remuneration by way of sitting fees forattending Board and Committee Meetings. Such remuneration to each of the Non-ExecutiveDirectors for the financial year was lower than the median remuneration of employees forthe year.
ii) Percentage increased in the remuneration of each Directors & Key ManagerialPersonnel
i) Percentage increased in the median remuneration of employees during the year: 57.46%
It is hereby affirmed that the remuneration is as per the remuneration policy of theCompany.
Other particulars as required under clause (v) to (ix) of Rule 5(1) of Companies (Appt& Return of Managerial Personnel) Rules 2014 are not applicable to the Company.
Your Directors place on record their deep appreciation for the continued assistance andco-operation extended to the Company by its customers investors bankers governmentagencies and its dedicated band of employees.
ANNEXURE A' TO THE DIRECTORS' REPORT
Additional information as required under section 134(3)(m) of the Companies Act 2013read with Companies (Accounts) Rules 2014
BENEFITS DERIVED AS A RESULT OF RESEARCH & DEVELOPMENT