TO THE MEMBERS
The Directors are pleased to present their 95th Annual Report together with the AuditedFinancial Statements of the Company for the Financial Year ended 31st March 2018.
1. FINANCIAL RESULTS
| ||2017-18 ||2016-17 |
| ||Rs /Lacs ||Rs /Lacs |
|Sales ||5708.40 ||8106.34 |
|Profit/(Loss) before Finance || || |
|Cost and Depreciation ||2732.30 ||1228.24 |
|Finance Cost ||(180.00) ||(1875.09) |
|Profit/(Loss) before Depreciation ||2552.30 ||(646.85) |
|Depreciation ||(14.81) ||(455.33) |
|Net Profit/(Loss) Before Tax ||2537.49 ||(1102.18) |
|Transfer from Capital Reserve ||522.00 ||906.19 |
|Net Profit/(Loss) Before Tax ||3059.49 ||(195.99) |
|Add : Tax Expence (Incl. Def. Tax & || || |
|Tax adjustment of earlier years) ||(680.41) ||221.24 |
|Profit/(Loss) from continuing operations ||2379.08 ||25.25 |
|Profit/(Loss) from discontinued operations ||(2405.53) || |
|Profit/(Loss) for the period ||(26.45) ||25.25 |
|Other Comprehensive Income ||17.89 ||72.30 |
|Total Comprehensive Profit/(Loss) ||(8.56) ||97.55 |
The Company incurred a Net Loss of ` 0.08 crores (compared to a profit of ` 0.98 croresin the previous year). In view of carried forward losses the Directors are unable torecommend dividend.
2. STATE OF AFFAIRS OF THE COMPANY A. Textile Unit
The operations of Textile unit have incurred continued losses and with no improvementin the operations which were further affected due to direction of Central PollutionControl Board (CPCB). Hence Northern India Textile Research Association (NITRA) arecognized body in Textiles was engaged by the Company to undertake a techno-economicviability study of the mill. In its report NITRA stated that the unit is not be viablewith the existing set of circumstances and it was advised not to make investments in theexisting unit. The production activity in the plant remained suspended and the Companysurrendered its industrial power. Necessary intimation of closure of Textile Mill wasgiven to the Authorities and all other necessary formalities were completed on 3rd Feb2018. As the machinery could not be put to any productive use accordingly it was decidedto dispose off the plant and machinery of the Textile Division. Required approval u/s180(1)(a) for sale of plant and machinery of Textile Division of the Company situated at84/50 Kalpi Road Kanpur was obtained vide Postal Ballot result whereof was declared on3rd January 2018.
B. Real Estate Division
As you are already aware the Company had under taken real estate project by the nameof Emerald Gulistan at Jajmau Kanpur. Subsequent to the development of residential plotsas per approved plan Phase-I of Emerald Gulistan Project had been completed in March2017 and completion certificate for the plotted development phase in "EmeraldGulistan" township has been obtained vide Letter No. 17/39/Bhawan/ 14-15 dated14.07.2016 issued by Kanpur Development Authority. Company has also completed constructionof 45 LIG and 45 EWS houses and has obtained completion certificate from KanpurDevelopment Authority.
During the year the Company continued focusing on booking and sales of unsold plots inPhase-I of the project. The Company has also started construction of Independent Floors onfew plots of Phase-I and is planning to launch Affordable Group Housing Schemes in thenext phases of the project.
Meanwhile the Company decided to undertake two Affordable Housing (EWS) Project(s)under Pradhan Mantri Awas Yojana to be developed by the Company on its property situatedat 84/29 and 84/50 Kalpi Road Kanpur respectively. The Company had submitted itsproposal with the State Government for which proposals were approved by the Government.The Detailed Project Reports; Comprehensive Project Reports and Drawings for both theprojects have been submitted to the Government through Kanpur Development Authority.Application for change in land use from industrial to residential for both the projectshave also been submitted to the Principal Secretary Housing & Urban Planning UPGovt. for their approval.
3. RISK MANAGEMENT
The company has implemented a Risk Management Policy which aims to identify and assesselements of risks which in the opinion of the Board may threaten the existence of thecompany and to take appropriate steps to manage the risks.
Audit Committee has been entrusted with the responsibility to assist the Board in (a)Overseeing implementation of Company's risk management policy (b) Overseeing all therisks that the organization faces identification and assessment of risks and maintainingadequate risk management infrastructure in place capable of addressing those risks and (c)Overseeing all the risks that the organization faces identification and assessment ofrisks and maintaining adequate risk management infrastructure in place capable ofaddressing those risks.
4. EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company in MGT 9 is annexed hereto marked as Annexure Aand forms an integral part of this Report.
5.1 In accordance with the provisions of the Section 152 of the Companies Act 2013 andthe Company's Articles of Association Smt. Varsha Singhania Director will retire byrotation at the forthcoming Annual General Meeting and being eligible offer herself forre-appointment.
5.2 The Company has received declarations from all the Independent Directors of theCompany in terms of sub-section (7) of section 149 confirming that they meet the criteriaof independence as prescribed under the Companies Act 2013.
6. KEY MANAGERIAL PERSONNEL
The following persons have been designated as Key Managerial Personnel of the Companypursuant to Section 2(51) and Section 203 of the Companies Act 2013 read with Rulesframed thereunder
1. Shri Yadupati Singhania Chairman & Managing Director
2. Ms. Sonali Agarwal Chief Financial Officer
3. Shri Harshit Gunani Company Secretary
7. MEETINGS OF THE BOARD OF DIRECTORS
During the financial year ended 31st March 2018 Six Board Meetings were held on thefollowing dates:-
|a) 18th May 2017 ||b) 10th August 2017 |
|c) 03rd October 2017 ||d) 13th November 2017 |
|e) 12th January 2018 ||f) 12th February 2018 |
8. WHISTLE BLOWER POLICY/ VIGIL MECHANISM SYSTEM
The company as per the section 177 of the Companies Act 2013 has in place the Vigil(Whistle Blower) Mechanism which aims to provide a channel to the Directors and employeesto report to the management instances of unethical behavior actual or unsuspected fraudor violation of the Company's code of conduct. The policy provides adequate safeguardsagainst victimization of employees and Directors who avail of Whistle Blower/VigilMechanism and also provide for direct access to the Chairman of the Audit Committee etc.
9. REMUNERATION POLICY
The Company has in place a policy which lays down a framework in relation toremuneration of Directors Key Managerial Personnel and Senior Management of the Company.The Remuneration Policy is available on the website of the Company at www.jkcotton.com.This policy also lays down criteria for determining qualifications positive attributesand independence of a director.
The salient features of Company's Remuneration policy are:
1. Remuneration is based on the principles of: (i) pay for responsibility (ii) pay forpotential and (iii) pay for growth.
2. The Nomination and Remuneration Committee is vested with all the necessary powersand authorities to ensure appropriate disclosure on remuneration to the Managing Directorand other KMPs including details of fixed components and performance linked incentives.
3. Appointment of the Non-executive Directors on the Board is for the benefit of theCompany due to their vast professional expertise in their professional capacity. TheCompany suitably remunerates them by paying sitting fee for attending the meetings of theBoard and various committees of the Board.
10. FORMAL ANNUAL EVALUATION OF BOARD ITS COMMITTEES
AND ITS DIRECTORS
Pursuant to the provisions of the Companies Act 2013 the Board has carried out annualevaluation of its own performance as well as the performance of Audit CommitteeStakeholders' Relationship Committee Nomination & Remuneration Committee CSRCommittee and Committee of Directors on various parameters including effectiveness ofdecision making process risk management providing necessary advice to managementeffectiveness of communication and participation etc.
The Board of Directors also evaluated performance of its individual directors onvarious parameters including attendance effective participation in meeting maintainingconfidentiality and rendering independent unbiased opinion and resolution of issues atmeetings.
11. RELATED PARTY TRANSACTIONS
All transactions with Related Parties are placed before the Audit Committee as also theBoard for approval. Prior omnibus approval of the Audit Committee and the Board isobtained for the transactions which are of a foreseen and repetitive nature. Thetransactions entered into pursuant to the omnibus approval so granted are audited and astatement giving details of all related party transactions is placed before the AuditCommittee and the Board of Directors for their approval on a quarterly basis.
All transactions entered into with related parties during the year were on an arm'slength pricing basis and were in the ordinary course of business. There were no materialrelated party transactions i.e. transactions exceeding ten percent of annual turnover asper the last audited financial statements entered into during the year. Thus disclosure inform AOC-2 is not required. Suitable disclosure has been made in the Annual Report.
12. DIRECTORS' RESPONSIBILITY STATEMENT
The Directors confirm that: i) in the preparation of the Annual Accounts theapplicable accounting standards had been followed along with proper explanations relatingto material departures; ii) the Directors had selected such accounting policies andapplied them consistently and made judgements and estimates that are reasonable andprudent so as to give true and fair view of the state of affairs of the Company at the endof the financial year and of the profit and loss of the Company for that period; iii) theDirectors had taken proper and sufficient care for maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities; iv) the Directorshad prepared the Annual Accounts on a going concern basis; v) the Directors had laid downinternal financial controls to be followed by the company and that such internal financialcontrols are adequate and were operating effectively and vi) the Directors had devisedproper systems to ensure compliance with the provisions of all applicable laws and thatsuch systems were adequate and operating effectively.
13.1 Observations of the Auditors are explained wherever necessary in the appropriateNotes to Accounts and call for no further comments.
13.2 The present Auditors M/s. Gupta Vaish & Co. Chartered Accountants wereappointed as Statutory Auditors of the Company at the 94th Annual General Meeting inpursuance of section 139(2) of the Companies Act until the conclusion of 99th AnnualGeneral Meeting. The said appointment was subject to ratification by shareholders at eachannual general meeting to be held thereafter. However due to recent amendments in theCompanies Act 2013 the aforesaid requirement of ratification by shareholders at eachannual general meeting is no longer required.
13.3 No frauds were found and hence none were reported by auditors under sub-section(12) of section 143.
14. SECRETARIAL AUDITOR
The Board has appointed M/s. Banthia & Co Practising Company Secretaries (Prop.Mr. G.K.Banthia) of Kanpur to conduct Secretarial Audit for the Financial Year 2018-19.The Secretarial Audit Report for the financial year ended March 31 2018 is annexed tothis Report. The Secretarial Audit Report does not contain any qualification reservationor adverse remark. (See Annexure B)
15. SECRETARIAL STANDARDS
The Directors have devised proper systems to ensure compliance with the provisions ofall applicable Secretarial Standards and that such systems are adequate and operatingeffectively.
16. INTERNAL FINANCIAL CONTROLS
The company's internal control system is designed to ensure orderly and efficientconduct of business adherence to company's policies protection and conservation ofresources accuracy and promptness in financial reporting and compliance with laws andregulations. Efforts are made by the management to maintain a sound financial andcommercial practice capable of improving the efficiency of the operations andsustainability of the business. The system ensures that all the assets are safeguarded andprotected against loss from unauthorized use or disposition and those are recorded andreported correctly. All operating parameters are monitored and controlled.
The Audit Committee also reviews the adequacy and effectiveness of internal financialcontrols and suggests improvement for strengthening them from time to time.
17. AUDIT COMMITTEE
The Audit Committee of the Company comprises of the Independent Directors namely Dr.Jagannath Gupta (Chairman) Dr. Krishna Behari Agarwal Shri Padam Kumar Jain and ShriRavindra Kumar Tandon. All the recommendations made by the Audit Committee were acceptedby the Board.
18. LOANS GUARANTEE AND INVESTMENT
Your Company has neither given any loan guarantee nor made any investments which arecovered under Section 186 of the Companies Act 2013.
19. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNING AND OUTGO
As there has been no manufacturing operation during the year there is nothing to bereported with regard to conservation of energy and technology absorption. Moreover therewere no foreign exchange earnings and outgo during the year under review and hence noinformation is reported in this regard in the Annual Report.
20. PUBLIC DEPOSITS
Your Company has not accepted any deposits from public/ shareholders in accordance withSection 73 of the Companies Act 2013 read with Companies (Acceptance of Deposits) Rules2014.
21. THE DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED
BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS ANDCOMPANY'S OPERATIONS IN FUTURE
During the period under review no significant and material orders were passed by anyregulators or courts or tribunals impacting the going concern status and company'soperations in future.
22. REMOVAL OF NAME OF EXCLUSIVELY LISTED COMPANIES FROM
DISSEMINATION BOARD OF BSE AND NSE
Your Company was earlier listed on Delhi Stock Exchange (DSE) and Uttar Pradesh StockExchange (UPSE). Delhi Stock Exchange (DSE) was de-recognised as Stock Exchange by SEBIvide its order dated 19.11.2014. The Uttar Pradesh Stock Exchange (UPSE) also ceased to bea Stock Exchange. Therefore the listing agreements with the said Stock Exchanges came toan end and the securities ceased to be listed and were transferred to dissemination boardof BSE and NSE vide aforesaid order dated 19.11.14.
In pursuance of SEBI Circular dated 17.04.2015 an exit opportunity has been providedvide Exit offer dated 11.01.2016 to public shareholders from Shri Yadupati SinghaniaPromoter of J. K. Cotton Limited from 20.01.2016 to 19.01.2017. In terms of SEBI Circulardated October 10 2016 those shareholders who could not offer their shares under exitoffer were given an opportunity do so on or before 18.01.2018 at 5.30 PM at the same pricei.e. Rs. 12.09/- per share.
Upon completion of Exit Offer application was made to BSE and NSE for removal of nameof Company from their respective Dissemination Board. Consequently BSE vide its noticeno. 20180301-27 dated 01 Mar 2018 and NSE vide its circular no. 0479/2018 dated April 272018 removed the name of Company from Dissemination Board. As on date the shares of theCompany are not listed on any stock exchange.
23. SEXUAL HARRASMENT OF WOMEN AT WORKPLACE
The Company is an equal opportunity employer and consciously strives to build a workculture that promotes dignity of all employees. As required under the provisions of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013and Rules framed thereunder the Company has implemented a policy on preventionprohibition and redressal of sexual harassment at the workplace which has been uploadedon the website of the Company i.e. www.jkcotton.com. All women employees are covered underthe policy. An Internal Complaints Committee had been set up to redress complaintsrelating to sexual harassment which was reconstituted by the Board in its meeting held on13.11.2017.
During the year the Company received no complaint on sexual harassment. There were nocomplaints pending for more than 90 days.
24. GENERAL SHAREHOLDERS INFORMATION
Annual General Meeting: Date /Time: Friday the 10th August 2018 at 12.00 Noon.
Venue: Auditorium of Dr. Gaur Hari Singhania Institute of Management &Research Kamla Nagar Kanpur-208 005.
Date of Book Closure: Friday3rd August 2018 to Friday the 10th August 2018.(Both Days Inclusive) Depository Details: The equity shares of the Company are admitted inNSDL and ISIN No. "INE088U01015" has been allotted to the Company. Hence theequity shares of the Company can be dematerialized by the shareholders. 22458247 EquityShares of face value of Rs. 10/- each representing 95.25% of the paid up Equity Capital ofthe Company have been dematerialized till 31.03.2018.
Registrar/Transfer Agent: M/s Jaykay Enterprises Ltd. having its Registered Office atKamla Tower Kanpur is Registrar/Transfer Agent of the Company who provides all servicesfor Share registry in physical as well as demat segment.
Share Transfer System: Share Transfer work & other activities of physical as wellas demat segment is attended to by the Company's Registrar & Transfer Agents withinthe prescribed period in accordance with law. All share transfers etc. are approved byCommittee of Directors which meets periodically.
Address for Correspondence: J.K. Cotton Limited Kamla Tower Kanpur-208001
Tele. No. (0512) 2371478-481 Fax. (0512) 2332665 Email: email@example.com
25. CORPORATE SOCIAL RESPONSIBILITY (CSR)
Corporate Social Responsibility Committee of the Company has been functioning inpursuance of the provisions of Section 135 of the Companies Act 2013.
Composition of Committee: i. Dr. Krishna Behari Agarwal Chairman ii. Shri Ashok GuptaMember iii. Smt. Varsha Singhania Member
The Annual Report on CSR activities is annexed herewith as "Annexure C". Thereasons for not spending the sum of two percent of the average net profit of the lastthree years or any part thereof towards CSR expenditure is that the said sum is innegative as the Company has incurred average net loss of ` 360.26 Lacs during thepreceding three financial years.
Your Directors wish to place on record their appreciation for the valuable supportreceived from bankers government authorities customers agents vendors and membersduring the year under review. Your Directors also wish to place on record their deep senseof appreciation for committed services rendered by the executives staff and workers ofthe Company.
| || ||For and on behalf of the Board |
|Place ||: Kanpur ||SHRIYADUPATI SINGHANIA |
|Dated ||: 23rd May 2018 || |
Chairman & Managing Director