Your Directors have pleasure in presenting the 25th Annual Report together with theAudited Statement of Accounts of the Company for the financial year ended 31st March2019.
|Financial Highlights ||Year ended 31.3.2018 (Rs. in lacs) ||Year ended 31.3.2019 (Rs. in lacs) |
|Sales & other income ||182.92 ||00.00 |
|Profit before Interest & Depreciation ||-0.22 ||-6.07 |
|Less : Interest ||0.03 ||0.00 |
|Profit/(Loss) before Depreciation ||-0.19 ||0.00 |
|Less : Depreciation ||0.00 ||0.00 |
|Profit before exceptional items and before Tax ||-0.19 ||-6.07 |
|Add: Exceptional Items ||0.00 ||0.00 |
|Profit/ (Loss) before Tax ||-0.19 ||-6.07 |
|Less : Provision for Taxation - Current Tax ||0.00 ||0.00 |
|- MAT Credit ||- ||- |
|-Deferred Tax Liability/(Assets) ||- ||- |
|-MAT Credit earlier year ||- ||0.00 |
|-Tax for earlier years ||0.08 || |
|Net Profit/ (Loss) after Tax ||-0.27 ||-6.07 |
|Add : Surplus brought from previous year ||- ||- |
|Total Surplus ||-0.27 ||-6.07 |
|Appropriations : || || |
|Proposed Dividen d ||N il ||N il |
|Corporate Dividend Tax ||Nil ||Nil |
|Surplus Carried to Balance Sheet ||-0.27 ||-6.07 |
| || || |
Your Directors regret to inform you that there was no commercial activity during theyear under review as the entire Plant & Machinery and major part of the Building hadgot damaged in July 2002 due to major fire in the factory premises. The insurance claim oRs.52951550/- is still pending for decision with the Honorable National ConsumerDispute redressal Commission New Delhi. How ever it has received an amount of Rs.439.13Lacs in the protest a/c against the bank guarantee.
OPERATIONAL & PERFORMANCE REVIEW
How-ever your company has other operating revenues of Rs.nil as against Rs.182.92 Lacsduring the previous year. Barring some un-foreseen circumstances your directors arehopeful to give better results in terms of sales/ profits in the years to come.
During the year ended 31st March 2019 the Company did n ot have anysubsidiary company.
The Company has not accepted or renewed any deposit from the public during the yearunder review pursuant to the provisions of Companies Act 2013 and rules made there under.
With a view to conserve resources of the company your Directors do not recommend anydividend for the year under review.
APPOINTMENT OF KEY MANAGERIAL PERSONS (KMPs) AND INDEPENDENT DIRECTORS
Pursuant to provisions of Sections 2(51) and 203 of Companies Act 2013 read with Rule8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014following persons are acting as Key Managerial Personnel of the Company:
Mr. Rajev Gupta Managing Director
Miss Neha Miglani Company secretary
Mr. Narender Chutani CFO
None of the Key Managerial Personnel has resigned during the year ended March 31 2019.
During the year under review there has been no change in the composition of the Boardof Directors. In accordance with the provisions of Section 152 of the Companies act 2013read with the Rules made there under and articles of association of the company Mrs.Radhika Gupta Director will retire by rotation at the ensuing Annual General Meeting andbeing eligible offers himself for re-appointment. A brief resume of and particularsrelating to them are given separately under the report on Corporate Governance STATUTORYAUDITORS
At the 23rd Annual General Meeting of Company held on 29thSeptember 2017 M/s Harjinder Singh & Co. Chartered Accountants were appointed asStatutory Auditors of the Company for a period of five years in accordance with theprovisions of section 139 of Companies Act 2013 read with Companies (Audit & Auditors)Rules 2014. How-ever there appointment for the year 2019-20 is to be ratified at theensuing Annual general Meeting by the members.
Observations if any made in the Auditor's Report are self explanatory and do not callany explanation.
Pursuant to provisions of section 148 of Companies Act 2013 & Rules made thereunder your Company is not now covered under these provisions.
Shri Ramesh Bhatia Practicing Company Secretary has been appointed by the Board toconduct Secretarial Audit under provisions of section 204 of the Companies Act 2013. TheSecretarial Audit report is annexed with the Director's Report as Annexure - 1 . There isno qualification in secretarial audit report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNING AND OUTGO
Energy conservation continues to be an area of major emphasis in your Company. Effortsare made to optimize the energy cost while carrying out manufacturing operations. Asrequired by the provisions of section 134 of the Companies Act 2013 the relevantinformation regarding Conservation of Energy; Technology Absorption and Foreign ExchangeEarnings and Outgo is given in the Annexure- 2 forming part of this report.
None of the Directors of the Company are disqualified under the provisions of section164 of the Companies Act 2013. The Directors have made the requisite disclosures asrequired under the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 ("hereinafter referred to as ListingRegulations").
The Company is committed to maintain the good standards of Corporate Governance. TheCompany has complied with the Corporate Governance requirements as stipulated underListing Regulations. Pursuant to said Regulations Report on Corporate Governance togetherwith the Certificate issued by Practicing Company Secretary regarding compliance ofCorporate Governance is annexed to this report.
DIRECTOR'S RESPONSIBILITY STATEMENT
Pursuant to the provisions of section 134(3)(c) of the Companies Act 2013 it ishereby confirmed that:
(a) In the preparation of annual accounts for the financial year ended 31st March2019 the applicable accounting standards have been followed and that there are nomaterial departures;
(b) estimates that were reasonable and prudent so as to give a true and fair view ofthe state of affairs of the Company As at 31st March 2019 and of the profit of theCompany for the year ended on that date; the Directors have taken proper and sufficientcare for the maintenance of adequate accounting records in
(c) The Directors have selected such accounting policies and applied them consistentlyand made judgments and accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) The annual accounts have been prepared on a going concern basis;
(e) The Directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and are operatingeffectively.
(f) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequately and o perating effectively.
FRAUDS REPORTED BY AUDITORS u/s 143(12)
Your company has complied with all the provisions of Section 143 of the Companies Act2013. Hence there are no frauds reported by the Auditors other than those which arereportable to the Central Government. Further no fraud has been reported to the CentralGovernment.
EXTRACT OF ANNUAL RETURN
The details forming part of extract of the Annual Return is given in Form MGT9 inAnnexure - 3.
NUMBER OF BOARD MEETINGS
During the financial year 2018-19 four Board meetings were held. The meetings wereheld on 30th May 2018 09th August 2018 02nd November2018 and 01st February 2019. The other relevant details of Board meetings andthe attendance of the Directors etc. is given under Corporate Governance Report annexedwith Director's Report.
DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors of the Company have submitted the Declaration ofIndependence as required pursuant to section 149(7) of the Companies Act 2013 and underListing Regulations stating that they meet the criteria of independence as provided insub-section (6).
PARTICULARS OF LOAN GURANTEES OR INVESTMENTS UNDER SECTION 186
During the year under review no loans guarantees or investments under Section 186 ofthe Companies Act 2013 have been given by the Company.
RELATED PARTY TRANSCATIONS
All related party transactions that were entered into during the financial year were inthe ordinary course of business and were at arm's length basis. No Materially significantrelated party transactions have been entered by the Company with Promoters Directors orKey Managerial Personnel etc. that had potential conflict with the interest of the Companyat large. All Related Party Transactions are placed before the Audit Committee as also theBoard for approval The detail of transactions entered into pursuant to the omnibusapproval so granted is placed before the Audit Committee and the Board of Directors on aquarterly basis. None of the Directors has any pecuniary relationships or transactionsvis-a-vis the company. The details of the same are given in Form AOC-2 and is annexedherewith.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013. Internal Complaints Committee (ICC) has been set up to redress complaints receivedregarding sexual harassment. All employees (permanent contractual temporary trainees)are covered under this policy.
The following is a summary of sexual harassment complaints received and disposed offduring the year Calendar Year 2018:
|a) No. of Complaints received in the year: ||NIL |
|b) No. of complaints disposed off during the year: ||NIL |
|c) No. of cases pending for more than 90 days: ||NIL |
d) No. of workshops or awareness program against sexual harassment carried out: NIL
e) Nature of action taken by the emp loyer: NA
MATERIAL CHANGES FROM END OF FINANCIAL YEAR TILL DATE OF REPORT
There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year of the Company to whichthe financial statements relate and the date of the report other than those disclosed inthe financial statements.
RISK MANAGEMENT POLICY
Risk management is a continuous process across the organization designed to identifyassess and frame a response to threats that affect the achievement of its objectives. Itenables management to prepare for risks before they devolve to improve the operationaleffectiveness. Determination of the risk appetite allows management to deploy resourcesaccording to the need. The Company firmly believes that to ensure effective riskmanagement there ought to be risk management plans to handle the risks based on thepriorities and challenges of the business. The factors involved in identified risks mustbe considered and the accuracy of assessment is very important. This implies if properrisk management is implemented as a best practice then massive capital losses can beprevented. The success of the Risk Management Framework depends on the efforts taken tomitigate/ reduce either the probability or consequence of the risk/ threat. Thereforeconsidering the same Company's Risk Management Policy includes three key elements:
I Risk Assessment
I. Risk Management and Risk Mitigation
I I. Risk Monitoring
Risks are analyzed considering likelihood and impact as a basis for determining howthey should be managed effectively. Adhering the same Company has constituted RiskManagement Committee and adopted an effective Risk Management Policy in its place toassess mitigate and to monitor the different risks exposed to the industry in which itoperates. Risk management policy of the company is available at company's websitewww.padamcotton.com.
POLICY ON DIRECTOR'S APPOINTMENT & REMUNERATION AND OTHER PRESCRIBED MATTERS Thecurrent policy is to have an appropriate mix of executive and non-executive andindependent directors to maintain the independence of the Board and separate itsfunctions of governance and management. As of March 312019 the Board had six membersthree of whom are executive directors and three independent directors. One of theexecutive directors of the Board is a woman director.
The policy of the Company on directors' appointment and remuneration including thecriteria for determining qualifications positive attributes independence of a directorand other matters as required under sub-section (3) of Section 178 of the Companies Act2013 is available on our website at www.padamcotton.com
We affirm that the remuneration paid to the directors is as per the terms laid out inthe Nomination and Remuneration Policy of the Company.
INTERNAL FINANCIAL CONTROL SYSTEM AND ITS ADEQUACY
Your Company maintains an adequate and effective Internal Control system commensuratewith its size and complexity. Internal control systems provide among other things areasonable assurance that transactions are executed with Management authorization and thatthey are recorded in all material respects to permit preparation of financial statementsin conformity with established accounting principles and that the assets of your Companyare adequately safeguarded against significant misuse or loss.
During the year under review the Company continued to implement their suggestions andrecommend ations to improve the internal financial control environment. Their scope ofwork inter-alia includes review of operational efficiency effectiveness of systems andprocesses and assessing the internal control strengths in all areas. In addition tostatutory audit the financial controls of the Company at various locations are reviewedby the Internal Auditors who report their findings to the Audit Committee of the Board.The Audit Committee actively reviews the adequacy and effectiveness of internal controlsystem a nd suggests further strengthening the same wherever required.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
During the year under review there is no material order(s) passed by the regulators orcourts or tribunal impacting the going concern status and company's operation in future.
DISCLOSURE REGARDING COMPANIES (SHARE CAPITAL AND DEBENTURE) RULES 2014
The paid up equity share capital of the Company as at 31st March 2019 comprises of 3873000 equity shares of Rs. 10/- each i.e. Rs. 38700000/-. As required under Companies(Share Capital and Debenture) Rules 2014 during the year under review the Company hasnot issued equity shares with differential voting rights sweat equity shares preferenceshares and employee stock options and also not made any provision for purchase of its ownshares by employees or by trustees. DISCLOSURE REGARDING VOTING RIGHT NOT EXERCISEDDIRECTLY BY THE EMPLOYEES During the year under review there is NIL disclosure asrequired under provisions of section 67(3) of Companies Act 2013. AUDIT COMMITTEE
Audit Committee constituted by the Company functions in accordance with the terms ofreference as set out under the provisions of Clause 49 of Listing Agreement read withprovisions of Section 177 of Companies Act 2013 & rules made there under andadditional responsibilities assigned to it by Board of Directors of the Company. TheCommittee reviews the internal audit reports and findings of internal auditors along withthe comments of management. The functions of the Audit Committee among others includeapproving and implementing the audit procedures effective supervision of financialreporting system Whistle Blower Mechanism internal control and procedures recommendingappointment of Statutory Auditors Cost Auditors to Board and also ensuring complianceswith regulatory guidelines. The Board has constituted the Audit Committee comprises offollowing:
|S.NO. ||NAME ||DESIGNATION |
|1 ||Sh. Harbhaian Singh Independent Director ||Chairman |
|2 ||Sh. Jai Kumar Independent Director ||Member |
|3 ||Sh. Satwant Singh Independent Director ||Member |
The other relevant details of Audit Committee are given under Corporate GovernanceReport annexed with Director's Report.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company has a vigil mechanism named Whistle Blower Policy/VigilMechanism to deal with instance of fraud and mismanagement if any. The detail ofthe Policy is explained in the Corporate Governance Report and also available at company'swebsite www.padamcotton.com.
PERFORMANCE EVALUATION OF BOARD OF DIRECTORS
During the year under review the Board adopted a formal mechanism for evaluating itsperformance and as well as that of its committees individual Directors including theChairman of the Board in compliance with the Companies Act 2013 and Listing Regulations. The exercise was carried out through a structured evaluation process covering variousaspects of the Boards functioning such as composition of the Board its committee &members their experience & competencies performance of specific duties &obligations governance and also in accordance with Performance Evaluation Policy ofCompany. Broadly the performance of Non-Independent/Executive/Whole Time Director(s) wasevaluated on the basis of their own performance expertise intelligence theirqualitative & quantitative contribution towards operational achievementsorganizational performance etc. The performance of Non-Executive Independent Directorswere evaluated on the basis of their constructive participations inBoard/Committee/General meetings their informed & balanced decision-making abilityto monitor financial controls & systems & certain allied parameters. Theperformance evaluation of various Board Committees constituted under Companies Act &Listing Agreement was made on the basis of their respective terms of reference dischargeof functions governance etc.
Disclosure of information's as required under rule 5(1) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014
The Provisions of Rule 5(2) & (3) of the Companies (Appointment & Remunerationof Managerial Personnel) Rules 2014 requiring particulars of the employees in receipt ofremuneration in excess of Rs. 102 lacs per year to be disclosed in the Report of Board ofDirectors are not applicable to the Company as none of the employees was in receipt ofremuneration in excess of Rs. 102 lacs during the financial year 2018-19.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided in the Annexure formingpart of the Annual Report. Having regard to the provisions of Secton 136(1) read with itsrelevant proviso of the Companies Act 2013 the Annual Report excluding the aforesaidinformation is being sent to the members of the Company. The said information is availablefor inspection at the Registered Office of the Company during working hours and any memberinterested in obtaining such information may write to the Company Secretary and the samewill be furnished free of cost.
The Nomination and Remuneration Committee of the Company has affirmed that theremuneration is as per the remuneration policy of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management discussion and analysis report as required by Listing Regulations formspart of the Annual Report.
Your Directors wish to convey their appreciation to all of the Company's employees fortheir enormous efforts as well as their collective contribution to the Company'sperformance. The Directors would also like to thank shareholders customers dealerssuppliers Financial Institutions bankers Government and all the other businessassociates for the continuous support given by them to the Company and their confidence inits management.
By order of the Board of Directors
| ||Sd/- ||Sd/- |
| ||(Rajev Gupta) ||(Vivek Gupta) |
|Place: Karnal ||Director ||Director |
|Dated: August 03 2019 ||DIN-00172828 ||DIN-00172835 |