J J Exporters Ltd Directors Report.
Your Directors have pleasure in presenting the Forty Fifth Annual Report, together with the Audited Accounts of the Company for the yearended 31st March,2018.
|FINANCIAL RESULTS||(Rs in Lacs)|
|Profit before Tax, Depreciation and Extra Ordinary Items
Less : Depreciation and amortization expenses
|Profit/(Loss) before Tax and extra ordinary items||(528.29)||(1339.22)|
|Less : I.T. for earlier year||0.00||0.00|
|Profit/(Loss) before Extra Ordinary Items||(528.29)||(1339.22)|
|Extra Ordinary Items||0.00||0.00|
|Profit/(Loss) after Tax||(528.29)||(1339.22)|
|Other Comprehensive Income for the year||3.13||(10.17)|
|Total Comprehensive Income for the year||(525.16)||(1349.39)|
|Add : Balance brought forward from Previous year||(4596.39)||(3247.00)|
|Making a total of||(5121.55)||(4596.39)|
BUSINESS AND PERFORMANCE
The performance of the Company during the year under review is no better than previous year.The sales revenue was down at ^114.70 lacs as compared to Rs693.83 lacs during the previous year.The loss before extra ordinary item was at Rs 528.29 lacs as compared to Rs1339.22 lacs in the previous year.The main reason for the poor performance was closure of Companys manufacturing units at Kolkata and Bangalore due to economic reasons.
CURRENT YEARS 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 last five years mainly due to drastic drop in demand of silk fabrics and made ups across the globe resulting in the complete erosion of net worth of the Company. In view of the above, the Company with your approval has decided to go for winding ofthe Company under section 271(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 and loan from Indian Overseas Bank (IOB) to the extent of Rs28.44 crores (including interest thereon), subject to confirmation, was also called back by the bank for repayment. The above two banks had also served notice under section 13(2) of the Securitisation and Reconstruction of the Financial Assets and Enforcement of Security Interest Act, 2002 .The Company has defaulted in the repayment ofabove loans.
The IDBI Bank Ltd. (IDBI), IDBI House, 44 Shakespeare Sarani, Kolkata-700017 vide its possession notice dated 14th July, 2017 and 27th July, 2017 had taken the possession ofthe Movable & Immovable assets situated at Mouza-Gangarampur, South 24 Paraganas, West Bengal & Dodaballapur, Bangalore, Karnataka, which were secured against Loan, so the Company has not provided depreciation on the said Fixed Assets and also interest on the loans taken from IDBI & IOB from the said possession date. Subsequently, The IDBI, vide its letter Reference No.IDBI/NMG/JJEL/2017-18/9785 dated 24th January, 2018 sold the secured assets of the Company at Gangarampur on 18th January, 2018 under the SARFAESI Act, 2002 for a consideration of Rs 18.01 crores which has been apportioned between the IDBI and 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 expenditure incurred by the IDBI & IOB in the account and at the same time IOB also charged Rs 0.07 crores for the payment to ECGC Ltd. The above two charges are included in the financial statements as "Bank charges" in the quarter ended 31st March, 2018.
The above sale proceeds on account of Immovable & Movable properties which has been apportioned by the bank for Immovable property at Rs 14.01 crores and for the Movable property at Rs 4.00 crores. The apportionment of sale proceeds between Land & Building and Movable assets has been made on the carrying amount ofthe assets in the Financial statements, as there is no item wise details of sale proceeds provided by the Banks. The Statutory Compliances if any, complied by the bank on account of the said transactions have not been confirmed.
The Company has not issued any shares with differential voting rights, sweat equity shares or employee stock option during the year under review. The Company has also not made any provision for purchase of its own shares by employees or trustees for the benefit of 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) ofthe Companies Act, 2013 confirming that they meet the criteria of Independence and are eligible to continue as an Independent Director have been received from Mr. Rahul Singhi, Mrs. Dipali Sharma and Mr. H. S. Senapati, the Independent Directors on the Board.
Mr. Rajiv Jhunjhunwala, Director, who retires by rotation and being eligible have offered himselffor re-appointment at the ensuing Annual General Meeting.
A meeting of Independent Directors was held during the year where performance of Non-Independent Director was evaluated. The performance of Independent Directors was evaluated by the Board. The performance of an individual director is evaluated based on the performance ofthe department/unit of which he is the functional head.The performance ofthe Board as a whole or its committee is evaluated based on the performance of the Company.
Mr. S.N.Jhunjhunwala and Mr. Rajiv Jhunjhunwala, Executive Directors designation has been changed from Executive Directors to Non-Executive Directors from closing hours of 31.03.2018.
The Company has framed a familiarization programme for Independent Directors and accordingly programmes are organized on continuous basis by the Company. Details of the programme are available on Companys website, www.jjexporters.com .
The Company has formulated a policy for determining material subsidiaries. Details of the policy are available on Companys website, www.jjexporters.com
In compliance with Regulation 30(4) ofthe SEBI (Listing obligations & Disclosure Requirements) Regulation, 2015, the Company has framed a policy for determination of materiality of events/information. The policy and contact details of the person responsible for determining the materiality is available on Companys website, www.jjexporters.com .
In compliance with Regulation 30(1) ofthe SEBI (Listing obligations & Disclosure Requirements) Regulation 2015, the Company has framed a Archival Policy for disclosures of any events or information which in the opinion of the Board of Directors of listed Company is to be disclosed to Stock Exchange(s) under this regulation, and such disclosures shall be hosted on the website of the Company for a minimum period of five years as per the Archival Policy. Details of the policy are available on Companys website, www.jjexporters.com
BOARD OF DIRECTORS
The Board of Directors of the Company has an optimum combination of Executive, Non-Executive and Independent Directors as on 31st March, 2018 and complies with the requirements of the Companies Act, 2013. The Board of Directors of the Company as at 31st March, 2018 consisted of two Promoter Executive Directors and three Non-Promoter Non-Executive Directors.
During the year under review, 4(four) Board Meetings were held on 29.05.2017, 11.08.2017, 14.11.2017 & 06.02.2018. Composition of the Board of Directors, details of Board meeting held during the year and other details are as under :
|Name||Category||No. of other Directorships held (other than Private Companies||
Committee positions held (other than JJEL) As As a ) Chairman Member
|No. of Board Meetings ttended during the year||Whether attended last AGM on 26.09.2017|
|Mr. S. N. Jhunjhunwala*||Promoter, Executive||1||None||None||3||Yes|
|Mr. Rajiv Jhunjhunwala**||Promoter, Executive||None||None||None||4||Yes|
|Mr. A. B. Chaturvedi ***||Non Promoter- Executive Director||None||None||None||2||No|
|Mr. H. S. Senapati||Non-Executive
|Mr. Rahul Singhi||Non-Executive
|Ms. Dipali Sharma||Non-Executive
* Ceased to be Executive Director w.e.f. closing hours of 31.03.2018 but continuing as Non-Executive Director ** Ceased to be Executive Directorw.e.f. closing hours of31.03.2018 butcontinuing as Non-Executive Director *** Ceased to be a Directorw.e.f. closing hours of31.08.2017 AUDIT COMMITTEE
TheAudit Committee of the Board comprised of three Independent Non-Executive Directors i.e. Mr. Rahul Singhi, Mr. H. S. Senapati, and Mrs.Dipali Sharma. Mr. Rahul Singhi is the Chairman ofthe Committee. The Committee metfourtimes during the year under review on 29.05.2017, 11.08.2017, 14.11.2017 & 06.02.2018. The attendance ofthe members at these meetings was as follows :
|Sl. No.||Name of the Members||Status||No. of Meetings attended|
|1.||Mr. Rahul Singhi||Chairman, Independent Non-Executive||3|
|2.||Mr. H. S. Senapati||Member, Independent Non-Executive||4|
|3.||Mrs. Dipali Sharma||Member, Independent Non-Executive||3|
VIGIL MECHANISM AND WHISTLE BLOWER POLICY FOR DIRECTORS AND EMPLOYEES
The Company has framed vigil mechanism and whistle blower policy for Directors and employees to report genuine concern. The details are available on Companys website, www.jjexporters.com .
PREVENTION OF SEXUAL HARASSMENT ATWORKPLACE
The Company has in place a Policy in line with the requirements of The Sexual Harassment of women at the work place (Prevention, Prohibition & Redressal) Act, 2013.Internal Complaints Committee is in place to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees etc.) are covered under this Policy.
The Company has not received any complaint on sexual harassment during the year 2017-18.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All the contracts and arrangements entered into with related parties during the year were at arms length basis. Details ofthe same are given in Form AOC-2 and is annexed to the report. (Annexure - 1)
SECRETARIAL AUDIT REPORT
Secretarial Audit Report given by M/s. MR & Associates, Company Secretaries in Practice, is annexed to the report. (Annexure - 2)
RISK MANAGEMENT POLICY
In compliance of the requirements of Companies Act, 2013 and Securities Exchange Board of India (Listing Obligations and Disclosures Requirements) Regulations, 2015, the Company had constituted a Risk Management Committee. The Committee
comprises of two Promoter Executive Directors, Mr. S. N. Jhunjhunwala and Mr. Rajiv Jhunjhunwala. Consequent upon resignation of Mr. A. B Chaturvedi, Non-promoter Executive Director, 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 to inform the Board Members about the risk assessment and minimization procedures. In view of the pending winding up process there is hardly any need to state risks associated with Companys product.
EXTRACT OF THE ANNUAL RETURN
The extract of the annual return in Form No.MGT-9 is annexed to the report and forms a part of the Boards report (Annexure - 3)
NOMINATION AND REMUNERATION COMMITTEE
The Company had formed a Nomination and Remuneration Committee during 2015-16. The Committee identifies and recommends suitable candidates as Members of Board, Key managerial personnel and other Senior Management. The remuneration policy of the Company aims to ensure fair remuneration for the employees based on their performance. It also ensures to eliminate discrimination while fixing the remuneration of various employees. No meeting was held during the year under review. The Nomination and Remuneration Committee of the Board comprised of two Independent Non-Executive Directors i.e. Mr. Rahul Singhi, Chairman, Mr. H. S. Senapati, Member and one Promoter Non-Executive Director i.e. Sri Rajiv 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. The performance of the said subsidiary viz. Spin International Inc. was, by and large, satisfactory 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 confirm that:
(a) in the preparation of the annual financial statements, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) the directors 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 loss of the company for that period;
(c) the directors 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) 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 the company and that such internal financial controls are adequate and were operating effectively.
(f) the directors had devised proper systems to ensure compliance with the provisions of 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 the threshold limit, the Company is no more required to prepare and annex a report on Corporate Governance, to the Directors Report required vide Circular No.CIR/CFD/POLICY CELL/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 Auditors of the Company to hold the office for a term of five years commencing from the conclusion of 44th Annual General Meeting (AGM) till the conclusion of 49th AGM of the Company, subject 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 the provision for ratification of appointment of Auditors by shareholders at every AGM. Accordingly, the ratification of the appointment of Statutory Auditors by shareholders is not required to be adopted in every AGM.
In view of the above, the Board of Directors of the Company have proposed partial modification in the previous resolution of the members passed at44th AGM ofthe Company on appointment ofStatutory Auditors and recommended to continue appointment of M/s. Lihala & Co., Chartered Accountants (Firm Registration No. 315052E ) as Statutory Auditors ofthe Company for a period of five years commencing from the conclusion of 44th Annual General Meeting (AGM) till the conclusion of 49th AGM of the Company without seeking any further ratification of their appointment from members at this AGM and ensuing AGMs till the tenure of the Statutory Auditors.
The remark in Auditors Report read with notes to Accounts are self-explanatory and need no further clarification. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE 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 Gangarampur has also been closed permanently from 3rd January, 2017. The Company had also closed its unit at Bhagalpurw.e.f. 31.03.2018
The particulars in respect of conservation of energy and technology absorption in respect of Bhagalpur Unit upto 31.03.2018 are given in Annexure A forming part of this report pursuant to Section 134(3)(m) of Companies Act, 2013 and rules made there under,
B) Foreign Exchange earnings and outgo:
Foreign Exchange Used : f 24,69,350
Foreign Exchange Earned : f 70,77,096
The details of investments are given in Note No. 3(a) annexed to the annual accounts of the Company.
The particulars, as required underSection 134 ofthe Companies Act, 2013 and Rules made there under, in respectofCompanys subsidiary viz. Spin International INC.are as follows :
|I. Financial Performance||Spin International Inc. (Amount in USD)|
|Cost of goods||592,673|
|Income from operation||(111,081)|
|Income before tax||(103,729)|
|II. Financial position as on 31.03.2018
|Reserve & Surplus||464,827|
The Company has not accepted any Fixed Deposits during the year. No deposits were outstanding 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 and analysis report.
i) The ratio of remuneration paid to each Director during the year to the median remuneration of the employees of the Company
|A. Executive Directors|
|Name of the Director||Remuneration||Ratio|
|Mr. S. N. Jhunjhunwala||f 739,200||1.45|
|Mr. Rajiv Jhunjhunwala||f 672,000||1.32|
|Mr. A. B. Chaturvedi*||f 504,676||0.99|
B. The Non-Executive Directors receive remuneration by way of sitting fees for attending Board and Committee Meetings. Such remuneration to each of the Non-Executive Directors for the financial year was lower than the median remuneration of employees for the year.
ii) Percentage increased in the remuneration of each Directors & Key Managerial Personnel
|Mr. S. N. Jhunjhunwala, Executive Chairman & CEO||NIL|
|Mr. Rajiv Jhunjhunwala, Vice Chairman||NIL|
|Mr. A. B. Chaturvedi, Whole Time Director & CFO*||NIL|
|Ms. Shruti Murarka, Company Secretary||NIL|
i) Percentage increased in the median remuneration of employees during the year: 57.46%
|ii) No. of permanent employees on the Roll ason 31.03.2018||: 5 (five)|
|iii) Marketcapitalizationason 31.03.2017||f 417.73 lacs|
|31.03.2018||f 439.96 lacs|
|Variation||f 22.23 lacs|
|iv) Price at which the last Public offer was made||f 70/- per share|
|v) Percentage increase/decrease in market quotation of the shares of the Company in comparison to the price at which the last public offerwas made||(93.21)%|
|vi) Variation in the net worth of the Company as at close of current financial year and previous financial year.||f (525.16lacs)|
|vii) Ratio of the remuneration of the highest paid Director to that of the employees who are not Directors but received remuneration in excess of its highest paid Director|
|Remuneration ofhighest paid Director (Mr.S.N.Jhunjhunwala) Remuneration to employees who are not Directors but received||f 7.39 lacs|
|remuneration In excess of its highest paid Director:||Nil|
It is hereby affirmed that the remuneration is as per the remuneration policy of the Company.
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 and co-operation extended to the Company by its customers, investors, bankers, government agencies and its dedicated band of employees.
|By Order of the Board|
|64, Bright Street||S. N. Jhunjhunwala|
|Kolkata - 700 019||Chairman|
|Dated: 10thAugust,2018||(DIN : 00063450)|
ANNEXURE A TO THE DIRECTORS REPORT
Additional information as required under section 134(3)(m) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014
|CONSERVATION OF ENERGY||For the Year Ended||For the Year Ended|
|a) Unit Purchased (KWH)||92281||92281|
|Total Amount (Rs.)||288509||716128.90|
b) Own Generation through Diesel Generator
|Unit per litre of Diesel Oil||2.00||2.00|
|Total Amount (Rs.)||333116.79||217490.60|
|Cost/Unit (Rs.) 2. Furnace Oil||30.70||28.69|
|Total Amount (Rs.)||182574.31||1079274.75|
|Average Rate (Rs.)||57.82||57.59|
|3. Steam Coal|
|Total Amount (Rs.)||-||-|
|Average Rate (Rs.)||
|B. Consumption per Mtr of production|
|Product: Natural Fabrics|
|Furnace Oil (Ltr.)||0.58||0.50|
|Steam Coal (Kg.)||-||-|
|C.1. EnergyConservationMeasurestaken : -|
|2. Additional Investments for reduction of : - power consumption|
|3. Impactofthemeasurestakenfor : - reduction of energy consumption and consequent impact on production cost|
BENEFITS DERIVED AS A RESULT OF RESEARCH & DEVELOPMENT
|A) Specific Areas in which R&D carried by the Company||: NIL|
|B) Benefits derived as a result of the above R&D||: NIL|
|C)Future plan of action||: NIL|
|D)Expenditure onR&D||: NIL|
|A) Efforts in brief made towards Technology||: -|
|Absorption, Adoption and Innovations|
|B) Benefits derived as a result of the above efforts||: |
|C)In case of Imported Technology||: Technology Imported -||N.A.|
|Status of Absorption -||N.A.|