DIRECTORS' REPORT Dear Members, Your Directors have pleasure in presenting the 30th Annual Report and the Audited Statements of Accounts of your Company for the financial year ended 31st March, 2015. DIVIDEND: In view of inadequacy of profits, your Directors are unable to recommend any dividend on the equity shares for the year under review. REVIEW OF OPERATIONS: The Company has achieved Revenue from operations of Rs 66024.00 Lakhs in Financial Year 2014-15 as against Rs. 52108.29 Lakhs in previous Financial Year 2013-14. During the year 2014-15 Interest outgo of the Company has registered at Rs 3056.73 Lakhs as against Rs. 2625.55 Lakhs in the previous year 2013-14. The Depreciation has registered during the Current Year at Rs. 1550.17 Lakhs as against Rs. 3341.87 Lakhs for the previous year 2013-14. In the financial year 2014-15 the Company has incurred Net Loss of Rs 22251.65 Lakhs as against Net Loss of Rs. 838.41 Lakhs in Financial Year 2013-14. The company experienced that the efficiency of plant and machineries, especially Spinning Machines have gone down and set up an in house Expert Group to suggest measures for Technology up gradation and Modernization. As per their recommendations, old machines including Ring Frames, requiring expenditure towards repairs and maintenance consuming high power with low out put have been identified and shifted to workshop/godowns for appropriate action. Further, the Company after incurring huge losses and eroding its net worth completely had made an application to be registered as a Sick Company with Board for Industrial and Financial Reconstruction vide a Resolution passed by the Board of Directors on 12th February, 2015. The Company has been registered with BIFR. SUBSIDIARY COMPANY:- Jaybharat Textiles And Real Estate Limited ("the Company") has only one subsidiary Company namely M/s. Pulgaon Cotton Mills Limited. Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 read with Rule 5 of The Companies (Accounts) Rules, 2014, the statement containing salient feature of the financial statement of a company's subsidiary or subsidiaries, associate company or companies and joint venture or ventures under the first proviso to subsection (3) of section 129 (in Form AOC-1) is annexed as Annexure A. Members who wish to receive the full Report and Accounts including the Report and Accounts of the Subsidiary Companies will be provided with it upon receipt of a written request. This will help save considerable cost in connection with printing and mailing of the Report and Accounts. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure D". MEETINGS OF THE BOARD Six meetings of the Board of Directors and Four Meeting of audit committee were held during the year. For further details, please refer report on corporate governance section in this Annual Report. COMMITTEES OF THE BOARD Currently, the Board has Six committees: the Audit Committee, Nomination and Remuneration Committee, Management and Finance Committee, Stakeholder's Relationship Committee, Sexual Harassment Committee, Risk Management Committee. All committees, except the risk and Management committee, consist entirely of independent directors. A detailed note on the Board and its committees is provided under the corporate governance report section in this Annual Report. DIRECTORS AND KEY MANAGERIAL PERSONNEL In accordance with the provisions of the Companies Act, 2013. and the Articles of the Company Shri Deepak Mathur, Director of the Company, retire by rotation and, being eligible, offered himself for re-appointment. In accordance with the provisions of the Companies Act, 2013 . Company proposes the appointment of Shri Rajiv Kumar Gupta (DIN: 06894587) as Managing Director of the Company, for a period of 5 (five) years with effect from August 14, 2014, In accordance with the Section 203 of the Companies Act, 2013, Mr. Swaroop Singh Bhati appointed as the post of whole-time Company secretary and Compliance officer of the Company w.e.f. 01 July,2014 In accordance with the provisions of the Companies Act, 2013, Ms. Neha Nilesh Patil has been appointed as additional Directors of the Company w.e.f. 12-02-2015. In accordance with the provisions of the Companies Act, 2013, Company proposes Shri Pravin Kumar Parekh, Shri Jaiprakash Mishra Directors of the Company, to appoint them for five (5) consecutive years commencing from the 25th March 2015 and ending on 24th March 2020, 23rd March 2015 and ending up to 22nd March 2020 respectively. Shri. Kailash Nath Bhandari resigned on 21st May, 2014, as Director of the Company and Shri Rajiv Chauhan resigned on 26th July, 2015, as Managing Director of the Company. Mr. Hanuman P. Kharwal resigned on June 09, 2014 as the post of whole-time Company secretary and Compliance officer of the Company. Shri Farindra Bihari Rai resigned on 28th March, 2015, as Director of the Company and Shri Kulwinder Kumar Nayyar resigned on 25th March, 2015, as Directors of the Company. The Board of Directors place on record the valuable services rendered by them during their tenure as Director of the Company. BOARD EVALUATION Pursuant to the provisions if the Companies Act, 2013 and Clause 49 of the Listing Agreement, The Nomination and Remuneration Committee have defined the evaluation criteria, procedure and time schedule for the Performance Evaluation process for the Board, its Committees and Director. In accordance with the criteria and procedure the Independent Directors considered/evaluated the Board's performance, Performance of the Chairman and other Non-Independent Directors. The Board has undergone a formal review which comprised Board effectiveness survey and review of materials. The Board subsequently evaluated its own performance, the working of its committees (Audit Committee, Nomination and Remuneration Committee, Stakeholder Relationship Committee, Risk Management Committee and Management and Finance Committee) and Independent Directors (without the participation of the relevant director) The Directors were evaluated on aspects such as attendance and contribution at Board / Committee Meetings and guidance/support to the management outside Board/Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including the strategic agenda of the Board, encouraging active engagement by all Board members and motivating and providing guidance to the Managing Director and CEO Areas on which the Committees were assessed included degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings The performance evaluation of Independent Directors was carried out by the entire Board, excluding the director being evaluated. The performance evaluation of the chairman and the Non-Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Board as a whole. The Nomination and Remuneration Committee also reviewed the performance of the Board, its Committee and of the Directors. The Chairman of the Board provided feedback to the Directors on an individual basis, as appropriate. Significant highlights, learning and action points with respect to the evaluation were presented to the Board. REMUNERATION POLICY The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report . DIRECTORS' RESPONSIBILITY STATEMENT: To the best of their knowledge and belief and according to the information and explanations Obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013: a. that in the preparation of the annual financial statements for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b. that such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit of the Company for the year ended on that date; c. that proper and sufficient care has been taken for the 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; d. that the annual financial statements have been prepared on a going concern basis; e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively. f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. DECLARATION OF INDEPENDENT DIRECTORS The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules. FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS The Company familiarizes its Independent Directors with the Company, their roles, rights, responsibilities in the company, nature of the industry in which the company operates, business model of the company etc. through various programmers. The details of such familiarization programmed shall be disclosed on the Company's website at the following web link: <http://Jaybharat.org/wp/> DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has duly set up an Internal Complaints Committee (ICC) in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013, to redress complaints received regarding sexual harassment. The following is a summary of sexual harassment complaints received and disposed off during the year 2014-15. No of complaints received: Nil No of complaints disposed off: Nil DETAILS OF SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS / TRIBUNAL IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATION IN FUTURE There are no significant material orders passed by the Regulators / Courts / Tribunal which would impact the going concern status of the Company and its future operations. Hence, disclosure pursuant to Rule 8 (5) (vii) of Companies (Accounts) Rules, 2014 is not required. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY: The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined in the Internal Audit Manual. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board & to the Chairman & Managing Director. The Internal Audit Department monitors and evaluates the efficiency and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board. CODE OF CONDUCT: The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the company. The Company believes in "Zero Tolerance" against bribery, corruption and unethical dealings / behaviours of any form and the Board has laid down the directives to counter such acts. The code laid down by the Board is known as "code of business conduct" which forms an Appendix to the Code. The Code has been posted on the Company's website, under the web link: <http://Jaybharat.org/wp/>. The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. The Code gives guidance through examples on the expected behaviour from an employee in a given situation and the reporting structure. All the Board Members and the Senior Management personnel have confirmed compliance with the Code. All Management Staff were given appropriate training in this regard. VIGIL MECHANISM / WHISTLE BLOWER POLICY:- Pursuant to the Section 177(9) and 177(10) of the Companies Act, 2013 and Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and clause 49 of the listing agreement, the Board of Directors have approved the Policy on Vigil Mechanism / Whistle Blower and the same has been hosted on the Website of the Company. This Policy inter-alia provides a direct access to the Chairman of the Audit Committee. Your Company hereby affirms that no Director / employee has been denied access to the Chairman of the Audit Committee and that no complaints were received during the year. RELATED PARTY TRANSACTIONS: All transactions entered by the Company with Related Parties were in the Ordinary Course of Business and at Arm's Length pricing basis. There were no materially significant transactions with Related Parties during the financial year 2014-15 which were in conflict with the interest of the Company. Suitable disclosures as required under AS-18 have been made in Notes to the financial statements. The Company has also adopted Related Party Transaction Policy as required under Clause 49 of the Listing Agreement. The Board has approved the policy on Related Party Transactions and Material Subsidiary. The policies have been uploaded on the Company's website, under the web link: <http://Jaybharat.org/wp/related-party-transactions/> Material changes and commitments affecting the financial position of the Company which have occurred between March 31, 2015 and 5th August, 2015: There were no material changes and commitments affecting the financial position of the Company between the end of financial year (March 31, 2015) and the date of the Report 5th August, 2015). PREVENTION OF INSIDER TRADING: The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Board Directors and the designated employees have confirmed compliance with the Code. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES: Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2, is appended as Annexure B to the Board's report. PARTICULARS OF EMPLOYEES: In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, none of the employees drew remuneration of Rs. 60,00,000/- or more per annum/ Rs. 5,00,000/- or more per month during the year or drew remuneration in excess of the remuneration drawn by Managing Director or Whole-time Directors or Manager and does not hold either by himself or through his spouse or dependent children 2 per cent or more equity shares of the company. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annexure -C forming a part of Annual Report. In terms of the provisions of Section 136(1) read with its relevant proviso of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished without any fee and free of cost. RISK MANAGEMENT Your Company has a robust Risk Management policy. The Company through its Steering Committee overseas the Risk Management process including Risk Identification, impact assessment, effective implementation of the plans and risk reporting. Sustainability is embedded in the Corporate Enterprise Risk Management programme, which gives an opportunity to increase effectiveness of risk management practices and for improving business efficiency. The Company's social and environmental policies correlate strongly with the risk management strategy and ultimately the financial performance. The details of the Risk Management as practiced by the Company is provided as part of Corporate Governance Report as Annexure to this Report FIXED DEPOSITS: Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED Detail of loans, investments, guarantees and securities covered under the provision of section 186 of Companies' Act 2013 are given in the notes to the financial statement. INSURANCE: The properties, stock, assets of your Company are adequately insured.. REPORT ON CORPORATE GOVERNANCE The Company has complied with Corporate Governance Code as stipulated under Clause 49 of the Listing Agreement. A separate section on Corporate Governance along with a certificate from M/s. A. F. Khasgiwala & Co., Statutory Auditors and Shri Rajiv Kumar Gupta, Managing Director, confirming the compliance with the said Clause, forms part of this report. HUMAN RESOURCES MANAGEMENT The Company recognizes that in a people-intensive business, major gains can be scored in the area of productivity management. In view of this, the Company has strengthened its people management through performance-linked incentives, amenities, training, Multi-skilling and career path identification. The Company is of firm belief that good Human Resource (HR) Management would ensure success through high performance. HR strategy and plans of the Company are deeply embedded with the organizational goals. In order to enhance the manpower productivity, the goal is set to increase the production capacity of the plant and rationalize the manpower through scientific study. All the operational goals of the top management emanate from the business plan. The goals of MD are shared with his subordinates who in turn share their goal with their respective subordinates and so on. Regular visits by HR team is being made to the plant to meet the employees and also interaction meetings are conducted to get their feedback, based on which HR policies are improved continuously. The process has resulted in better employer-employee relationship. The Company lays due emphasis on all-round development of its human resource. Hence, training of the employees is aimed at systemic development of knowledge, skills, aptitude and team work. Training is designed for the development of personal skills necessary for the performance of the present job and to prepare them for future growth. Individual development is given top priority to groom high caliber manpower. INDUSTRIAL RELATIONS: During the year under review, your Company enjoyed cordial relationship with workers and employees at all levels. MANAGEMENT DISCUSSION & ANALYSIS REPORTS The Management Discussion & Analysis Report, which form an integral part of this Report, are set out as separate Annexure, together with the Certificate from the auditors of the Company regarding compliance with the requirements of Corporate Governance as stipulated in Clause 49 of the Listing Agreement. CONSERVATION OF ENERGY: a) Company ensures that the manufacturing operations are conducted in the manner whereby optimum utilisation and maximum possible savings of energy is achieved. b) No specific investment has been made in reduction in energy consumption. c) As the impact of measures taken for conservation and optimum utilisation of energy are not quantitative, its impact on cost cannot be stated accurately. TECHNOLOGY ABSORPTION: Company's products are manufactured by using in-house know how and no outside technology is being used for manufacturing activities. Therefore no technology absorption is required. The Company constantly strives for maintenance and improvement in quality of its products and entire Research & Development activities are directed to achieve the aforesaid goal. FOREIGN EXCHANGE EARNINGS AND OUT-GO: During the period under review there was no foreign exchange earnings or out flow. AUDITOR'S REPORT/ SECRETARIAL AUDIT REPORT: The observation made in the Auditors' Report read together with relevant notes thereon are self explanatory and hence, do not call for any further comments under Section 134 of the Companies Act, 2013. As required under section 204 (1) of the Companies Act, 2013 the Company has obtained a secretarial audit report. Certain observations made in the report with regard to non filing of some forms were mainly due to ambiguity and uncertainty of the applicability of the same for the relevant period. However, the company would ensure in future that all the provisions are complied to the fullest extent. SECRETARIAL AUDIT: Pursuant to provisions of section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the company has appointed M/S Kothari Singhai & Associates a firm of company Secretaries in practice to undertake the Secretarial Audit of the Company. The Secretarial Audit report is annexed herewith as"Annexure E" COST AUDIT As per the requirements of Central Government and pursuant to the provisions of Section 148 of the Companies Act, 2013, your Company carries out an audit of cost records every year. STATUTORY AUDITOR M/s. A. F. Khasgiwala & Co., Chartered Accountants, (Membership No. 006491, Firm Registration No. 105114W) had been appointed for a period of 3 (Three) consecutive years at the 29th Annual General Meeting of the Company held on 26th July, 2014, subject to ratification of such appointment by the Members at every subsequent Annual General Meeting. Further, the Company has received the consent and eligibility of the Statutory Auditor under Sections 139 and 141 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 for continuing as the Auditors of the Company. As required under Clause 41 of the Listing Agreement, the Auditor have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. The Audit Committee and the Board of Directors have recommended the ratification of the appointment of the Statutory Auditor for the Financial Year 2015-16. The necessary resolution is being placed before the shareholders for approval. ACKNOWLEDGEMENT Your Directors place on record their appreciation of the assistance and support extended by Banks, Consultants, Solicitors, Shareholders and Employees of the Company. For and on Behalf of the Board of Directors Sd/- Deepak Mathur Chairman Place: Mumbai Date: 05th August, 2015 |