DIRECTORS' REPORT TO THE MEMBERS Dear Members, Your Directors have the pleasure in presenting the 25thAnnual Report of the Company together with the Audited Accounts for the financial year ended 31stMarch, 2015. FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE During the year under review your company's income was of Rs.1.65 Lacs (Previous Year Rs.189.61 Lacs). The company has incurred a loss of Rs.53.07Lacs (Previous Year profit of Rs.372.77 Lacs) during the period under review. INFORMATION ON STATE OF COMPANY'S AFFAIR The company has not carried any activity during the year under review. And as already reported during previous reports, the company managed to settle its dues with the State Bank of India and has arrived at One Time Settlement dated 26.09.2012 and to pay off the settled dues, the company has disposed off the substantial part of its assets and very few assets have been left out on which the depreciation has been charged as per Schedule II to the Companies Act, 2013. The company was to deposit aggregate amount of Rs.28.00 cr up to 25.03.2015 as per OTS on different dates with amount specified there against. The company is regular in paying the installments of OTS and it has paid entire Principal Amount of Rs.33.20 cr under OTS up to 27th June, 2015 well before due date of 25th September, 2015. However, Interest amount of Rs.2,85,24,915/- is still outstanding as payable which is to be paid on or before 25.03.2016. DIVIDEND Your Directors express their inability to recommend any dividend in view of present turmoil. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND Since there was no Dividend declared and paid last year, the provisions of Section 125 of the Companies Act, 2013 does not apply. TRANSFER TO RESERVES IN TERMS OF SECTION 134 (3) (J) OF THE COMPANIES ACT, 2013 The company has not carried on any activity since the last more than five years rather the assets of the company had been disposed off to pay off State Bank of India's liability; therefore, the Board expresses its inability to propose to carry any amount to any of reserves. CHANGES IN SHARE CAPITAL There is no change in the Share capital of the company during the Financial Year 2014-15. PARTICULARS OF LOAN, GUARANTEES AND INVESTMENTS UNDER SECTION 186 Under review during Financial Year 2014-15, the Company has not given any loan or Guarantee or provides security in connection with a loan to any other body corporate and person and also the company has not made any investment in any other body corporate. AUDITOR'S Statutory Auditors The existing statutory auditor M/s P C Goyal & Co. Chartered Accountants, Ludhiana, retire at the conclusion of this Annual General Meeting of the company and being eligible offer themselves for re-appointment. Your directors also recommend their re-appointment for approval of members. There is no change in the auditor of company during the year under review. They had furnished a certificate that their re-appointment, if made, would be within the prescribed limits under section 141(3)(g) of the Companies Act, 2013. Statutory Auditor's Report The Auditors Report on the Accounts of the Company is self-explanatory and the Auditors' in his audit report has commented upon the fact that the company's losses are more than its net worth and the company has liquidated its assets to pay off dues, hence, the company is presently not maintaining its going concern status. As informed in earlier reports, the company with the intervention of Debt Recovery Tribunal-II, Chandigarh, has made an One Time Settlement Compromise with its banker namely State Bank of India vide its letter SAMB/SK/1142 dated 26.09.2012 has liquidated substantial part of its assets to make scheduled payments, hence presently, the company is not maintaining its going status. However, after complying with provisions of relevant laws and pursuant to obtaining of the requisite approvals the Company intends to carry on business of Group Housing Projects, trading of movable and immovable assets/properties and hire purchase etc. Cost Audit The company is not required to have the cost audit of its cost record due to non-operation of unit. Secretarial Auditors B.K Gupta & Associates, Company Secretaries, Ludhiana has been appointed as Secretarial Auditors of the company by the Board of Directors to conduct the secretarial audit for the financial year 2014-15. Internal Auditors The Company is not in Operation since the last more than five years so no internal Auditor is appointed in Company. However the Company has adequate internal financial controls in place and the same is operating effectively having regard to company's size and operations as certified by Statutory Auditor. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES Pursuant to Section 197(12) of the Act, read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, every listed company required to disclose information related to remuneration paid during the year. The detailed information in this regard is annexed to this report as "Annexure I". RELATED PARTY TRANSACTIONS The company has not entered into any contract, arrangement and transaction with any of related parties during the year under review. Therefore, there is nothing to disclose in the report. DETAILS AND INFORMATION AS REQUIRED UNDER SECTION 134(3) (l) OF THE COMPANIES, ACT 2013 No material changes and commitments have taken place between the end of the financial year of the Company to which balance sheet relates and date of report, which affects the financial position of the Company. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The company is not engaged in the manufacturing activities or any other commercial activity as such your Directors express their inability to comment upon the conservation of energy, technology absorption measures and there is no the foreign exchange earnings and outgo during the year under review. EXTRACT OF ANNUAL RETURN The extract of Annual Return, in format MGT-9, for the financial year 2014-15 has been enclosed with this report as "Annexure II". DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES The Company has no Subsidiary/Joint Venture or Associate companies. DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL There is change in composition of Board of Directors during the year under review. A) Mr R C Singal has resigned from the Board of Directors of the company whereas Mrs. Meenu Uppal has been appointed as an additional Director by the Board with effect from 31st March, 2015. She is first women director of the company. As the term of Mrs. Meenu Uppal as an additional director is expiring on the date of forthcoming Annual General Meeting of the company, therefore, the Board recommends for kind consideration and approval of worthy Shareholders the appointment of Mrs. Meenu Uppal as an independent director of the company pursuant to section 149 and 152 of the Companies Act, 2013 and the Rules made there-under. A declaration by Mrs. Meenu Uppal that she meets the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013 has been received by the company . B) Mr. Rupinder Singh has been appointed as a Chief Financial Officer of the company w.e.f 31.03.2015 by the Board. DECLARATION BY INDEPENDENT DIRECTORS The Company has received the necessary declaration from each independent director in accordance with section 149 (7) of the Companies Act 2013, that he/she meets the criteria of independence as laid out in sub section (6) of section 149 of the Companies Act, 2013 and clause 49 of the listing agreement. DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL No material order has been passed by any regulator/court/tribunal. However as informed in earlier reports, the company with the intervention of Debt Recovery Tribunal-II, Chandigarh, has arrived One Time Settlement Compromise with its banker namely State Bank of India vide its letter SAMB/SK/1142 dated 26.09.2012 and has liquidated its assets to make scheduled payments, hence presently, the company is not maintaining its going status. However, after complying with provisions of relevant laws and pursuant to obtaining of the requisite approvals the Company intends to carry on business of Group Housing Projects, trading of movable and immovable assets/properties and hire purchase etc. in the future. STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THE FINANCIAL STATEMENTS The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed. NUMBER OF MEETINGS During the Financial year 2014-2015 under review, 5 meetings of Board of Directors and 4 Meetings of Audit Committee of the Company were held. Detailed information about the meetings is given in corporate governance report which forms the part of Annual Report. RISK MANAGEMENT POLICY The Board of Directors of your Company in its meeting held on 06.05.2014 adopted the Risks Management Policy. The policy establishes the process for the management of risk faced by Raj Agro Mills Limited. The aim of risk management is to maximize opportunities in all activities and to minimize adversity. This policy applies to all activities and processes associated with the normal operations of Raj Agro Mills Limited. The purpose of the Committee is to assist the Board of Directors in fulfilling its responsibilities with regard to enterprise risk management. Further, the Committee strives to assist the Board in framing, implementing and monitoring the risk management plan for the Company and reviewing and guiding the risk policy. EVALUATION BY BOARD OF ITS OWN PERFORMANCE, ITS COMMITTEE AND INDIVIDUAL DIRECTORS WITH REFERENCE TO SECTION 134 (3) (p) OF THE COMPANIES ACT, 2013 AND RULE 8(4) OF THE COMPANIES (ACCOUNTS) RULES 2014 AND CLAUSE 49 OF IV(B) OF THE LISTING AGREEMENT Pursuant to the above said provisions of the Companies Act, 2013, rules thereof and Clause 49 of the Listing Agreement, the Board has carried out an evaluation of its own performance, directors individually as well as the evaluation of the committees as per the criteria laid down in the Nomination Remuneration Evaluation policy. Further the Independent directors have also reviewed the performance of the Non-Independent Directors and Board as a whole including reviewing the performance of the Chairperson of the company taken into account the views of an Executive Directors and Non Executive Directors vide their separate meeting held on 31.03.2015 COMPANY POLICY RELATING TO DIRECTOR APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES The Nomination & Remuneration Committee of the Company has formulated the Nomination & Remuneration Policy on Director appointment and remuneration including the criteria for determining qualification positive attributes independence of a director and other matters as provided under section 178(3) of the Companies Act,2013. The Nomination and Remuneration Policy is annexed hereto and form part of this report as "Annexure III". AUDIT COMMITTEE The objectives of Audit Committee is to monitor, supervise and effective management of company's finance, to ensure effective internal financial controls and risk management systems with high level of transparency and accuracy. Consequent to change in the composition of Board of Directors, the composition of Audit Committee has been changed and redrafted. The present Audit Committee consists of the following members; Mr. Jatinder Singh, Chairman Mrs. Meenu Uppal, Member Mr. Varinder Kumar, Member The composition of the Audit Committee consists of independent Directors viz., Mrs. Meenu Uppal and Mr. Jatinder Singh who form the majority. The Committee met four times during the year, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The Audit Committee had its meeting from time to time to review and monitor the effectiveness of the audit process and to examine the financial statements and to evaluate the internal financial controls and risk management assessment. The members of committee have no pecuniary interests in the company and draw nothing except meeting fee from company. VIGIL MECHANISM The company has established a vigil mechanism and oversees through the committee, the genuine concerns expressed by the employees and other directors. The Company has also provided adequate safeguards against victimization of employees and directors who express their concerns. The Company has also provided direct access to the chairman of the Audit Committee on reporting issues concerning the interests of company employees and the Company. Whistle Blower policy has been adopted by the Board of Directors for effective implication of vigil mechanism process. This policy requires every director or employee to report directly to management in case of actual or possible violation of the code. CORPORATE GOVERNANCE REPORT Pursuant to Clause 49 of the Listing Agreement, the report on Corporate Governance together with Auditor's Certificate on compliance with this regard and Managing Director's declaration in this regarding, compliance of code of conduct by Board Members and Senior Management Personnel is attached and forms part of this Annual Report. DEPOSITS During the year, the company has not accepted any deposits under Companies Act, 2013. SECRETARIAL AUDIT REPORT Secretarial Audit Report in format MR-3 by M/s B.K Gupta & Associates, Company Secretaries is annexed with the Board Report. Secretarial Audit Report is annexed herewith as "Annexure IV". Pursuant to Section 134(5) of the Companies Act, 2013 the Board of Directors of the Company confirms that- (a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) They had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period; (c) They had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; (d) They had prepared the annual accounts as per the applicable law, accounting standards and accounting principles however the company is not maintaining going concern due to non-operation of unit and as it has disposed off substantial part of assets to pay off bank dues; and (e) They had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. (f) They had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. MANAGEMENT DISCUSSION AND ANLYSIS REPORT Management Discussion And Analysis Report as per Clause 49 of the Listing Agreement are given in the Annexure-V forming part of this report. GENERAL DISCLOSURE Your Director state that no Disclosure or Reporting is required in respect of the following items as there were no transactions on these items during the year under review. 1. Details relating to Deposits covered under Chapter V of the Act. 2. Issue of Equity Shares with Differential right, as to dividend, voting or otherwise. 3. Issue of shares with including sweat equity shares to employees of the Company under any scheme. 4. No significant or Material order were passed by the regulators or courts or tribunal which impact the going concern status and company's operation in future, your director further state that during the year under review, there were no case filed pursuant to sexual harassment of women at workplace (prevention, prohibition and Redressal) Act, 2013. ACKNOWLEDGEMENTS Directors acknowledge with gratitude, the continuing co-operation and assistance rendered by Financial Institutions, Banks, Government Agencies, Suppliers and other organizations in the working of the Company. FOR AND ON BEHALF OF THE BOARD Sd/- (Sanjeev Bansal) Managing Director DIN:00057485 662/2, Premjit Road, Gurdev Nagar, Ludhiana-141001,Punjab Sd/- (Varinder Kumar) Director DIN:00057532 S - V, Moti Nagar , G.T Road, Ludhiana-141007, Punjab Place: Ludhiana Date : 28.08.2015 |