Jyoti Overseas Ltd Directors Report.
Your Directors have pleasure in presenting their 42nd Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2016.
1. Financial summary or highlights/Performance of the Company
(Rs. In Lacs)
|Financial Results||Year Ended 31/03/16||Year Ended 31/03/15|
|Profit before Depreciation||(1.43)||0.58|
|Less : Depreciation||(14.45)||(15.87)|
|Profit before Tax||(15.88)||(15.29)|
|Less : Provision for Income Tax||-||-|
|Net Profit (Loss) for the year||(15.88)||(15.29)|
|Balance of Profit Brought Forward||(3879.78)||(3862.96)|
|Total Profits available for Appropriation||(3895.66)||(3878.25)|
|Less : Adjustment in carrying value of Assets whose remaining life as on 01.04.15 is expired.||0.00||(1.53)|
|Balance Carried to Balance Sheet||(3895.66)||(3879.78)|
In view of huge losses incurred by the Company, the directors regret their inability to recommend any dividend (Previous year Nil).
The Board does not propose to carry any amount to any reserves.
4. Brief description of the Companys working during the year/State of Companys affair
The Company made reference to the Honorable BIFR in August 2003 and had been declared sick under the provisions of SICA, 1985 vide order dated 17th May 2006. The company made efforts and settled the dues of all the Working Capital Banks and IDBI Financial Institution in the year 2007 through One-time-settlement of their dues.
The remaining two secured creditors, Asset Reconstruction Company ARCIL and Edelweiss Asset Reconstruction Company Limited (bought portfolio from the Financial Institution, Exim Bank of India) had initiated recovery action under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act) 2002.
As the Secured Lenders ARCIL And Edelweiss have taken action under section 13(4) of SARFAESI Act 2002, the Honble BIFR, pursuant to an application by the referred Secured Creditors, has ordered on 26.11.2007 to abate the reference filed under SICA Act.
The Company had been issued notice under section 13(4) of the SARFAESI Act for possession of Secured Assets, that include a part of land, building and complete machineries (except the machines charged to IDBI earlier) ,charged to the said Institutions. The Company had been appointed as Custodian of said Secured Assets with effect from July 11, 2007. The Company was allowed to continue the routine business operations on payment of Rs 25000 per month towards royalty charges. In April 2011 the Financial Institutions withdrew the custodianship from the company and took the physical possession of the factory.
ARCIL also filed a company petition under Section 433(1)(e) of the Company s Act 1956 for winding up of the company, before the Honble High Court of Madhya Pradesh at Indore Bench. The Company has filed proper reply opposing the winding-up petition filed by ARCIL. The petition is rejected by the Honble High Court of Madhya Pradesh, Indore Bench.
As the Secured Creditors terminated the custodianship of the company and took the physical possession of factory in
April 2011, there were no manufacturing operations carried out in the factory. The Secured Creditors have sealed the production facilities and have deployed their own security personal. Consequently there was no production and sales in the company.
The company also could not perform any trading activity as the Commercial Tax Department has cancelled the registration of the company due to the tax liability being unpaid. The Commercial Tax Department has also raised its claim on the fixed assets of the company to recover their dues. There is a dispute between Secured Creditors and the Commercial Tax Department regarding priority of charge on the fixed assets of the company and the matter is still unresolved.
However the company started some operations in the form of arranging sales to different buyers on commission basis. This commission income helped the company to take care of all the expenses in the year. The management is continuously trying to have a settlement with the said two Secured Creditors so that the company can revive its operations in the future. Once the settlement is done, the company is also hopeful of reinstating of its commercial tax registration and start business operations.
Further as the company does not have any manufacturing activities, and also does not have any sales income, it faced severe hardship in complying with several statutory requirements like appointment of a Whole-time Company Secretary. The Company tried its best but considering the companys financial position, none of the candidates agreed to join the company. The company is still trying to comply with this requirement.
5. Change in the nature of business, if any:
There was no business activity previous year and in the current year the company earned commission income.
6. Material changes and commitments, if any, affecting the financial position of the company which has occurred between the end of the financial year of the company to which the financial statements relate and the date of the report:
There is no material change or commitment occurred between the end of the financial year and the date of report that would affect the financial position of the company.
7. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future :
There is no order passed by any court during the year.. However there are certain important matters under litigation that are described below:
8. Winding-up Petition by ARCIL
The Secured Creditor ARCIL has filed a company petition under Section 433(1) (e) of the Companys Act 1956 for winding up of the company, before the Honorable High Court of Madhya Pradesh at Indore Bench. The Company has filed reply opposing the winding-up petition filed by ARCIL. The petition is rejected by the Honble High Court of Madhya Pradesh, Indore in favor of the company.
9. Details of Subsidiary/Joint Ventures/Associate Companies:
The Company does not have any subsidiary/joint venture /associate company.
10. Performance and financial position of each of the subsidiaries, associates and joint venture companies included in the consolidated financial statement.
As the company does not have any, joint ventures or associate companies, this section is not applicable.
11. Corporate Governance
Corporate Governance is an ethically driven business process that is committed to values aimed at enhancing an organizations brand and reputation. The new Companies Act, 2013 and amended Listing Regulations have strengthened the governance regime in the country. The Company is in compliance with the governance requirements provided under the new law and had proactively adopted many provisions of the new law, ahead of time. The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. Report on Corporate Governance is forming part of the Annual Report as Annexure - "B".
A separate report on Corporate Governance is provided together with a Certificate from the Statutory Auditors of the Company confirming compliance with conditions of Corporate Governance as stipulated under Regulation 34 read with Schedule V of the Listing Regulations, is annexed to the Annual Report.
A Certificate of the MD of the Company in terms of Regulation 17(8) read with Part B of Schedule II of the Listing Regulations, inter alia, confirming the correctness of the financial statements and cash flow statements, stating that members of Board of Directors and Senior Management have affirmed compliance with the Companys Code of Conduct and adequacy of the internal control measures and reporting of matters to the Audit Committee.
During the year under review, Company did not accept any fixed deposits in terms of Section 73 and 74 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014.The Company did not have outstanding deposits at the beginning/ at the end of the year.
13. Statutory Auditors
At the Annual General Meeting held on September 30, 2015 M/s S.P. Moondra & Co., Chartered Accountants, were appointed as statutory auditors of the Company, to hold office till the conclusion of the Annual General Meeting to be held in the year 2017. In terms of Section 139 to the Companies Act, 2013, the appointment of the auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s S.P. Moondra & Co., Chartered Accountants, as statutory auditors of the Company, is placed for ratification by shareholders.
14. Auditors Report
The Auditors have made certain qualifications in their report. The Directors Comments To The Qualification Made By Auditor Are Given Below:
i. The Auditors, in the point no.1 clause (b), of Annexure to their report, have made comments for not able to do physical verification of the assets of the company. Further to this qualification the Director want to comment that as the possession of the secured assets of the company has been taken by the secured lenders, physical verification of the assets of the company could not be carried out.
ii. The Auditors in the Point No. 7 clause (a) of Annexure to their report has mentioned about the arrears of undisputed amounts for MPCT/CST, Entry Tax, Professional Tax and Cess duty, further to this qualification the Director want to comment that this dues has been pending from preceding financial years, the reasons of which are mentioned under POINT NO. 4 of Directors Report.
iii. The Auditors in the Point No. 7 clause (b) of Annexure to their report has mentioned about the dues in respect of Sales Tax that has not been deposited with the appropriate authorities, further to this qualification the Director want to comment that this dues has been pending from preceding financial years, the reasons of which are mentioned under POINT NO. 4 of Directors Report.
iv. The Auditors, in the Point No. 8 of Annexure to their report have also made qualifications regarding irregularity in payment of dues to Bank. The Company is passing through severe financial hardships as explained in point No 4 of the Director Report above, and as a result there were instances of irregularity in the payment of dues to banks. The company is also perusing with the banks for One time settlement of their dues.
15. Share Capital
The paid up Equity Share Capital as at March 31, 2016 stood at Rs. 6.46 Crore. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. As on March 31, 2016, none of the Directors of the Company hold instruments convertible into equity shares of the Company.
16. Extract of the annual return
An extract of the Annual return for the financial year ended 31st March, 2016 as required under Section 92(3) of the Companies Act, 2013 is enclosed herewith in the specified format as Annexure (A).
17. Conservation of energy, technology absorption and foreign exchange earnings and outgo
The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:
A) conservation of energy
The company did not carry out any manufacturing activity during the year and hence there was no scope for any conservation of energy.
B) foreign exchange earnings and outgo
Total foreign exchange earned Rs. NIL Total foreign exchange outgo Rs. NIL
18. Corporate Social Responsibility Initiatives (CSR)
In view of the paid up capital, profits and turnover of the company during the previous three years, the company does not fall under the provisions of the section 135 of the Companies Act, 2013 and the rules made their under.
In accordance with the provision of the Companies Act, 2013 and in the terms of the Memorandum and Articles of Association of the Company, Mr. Pramod Somani (DIN 00042745) retires by rotation and is eligible for reappointment.
20. Key Managerial Personnel
1. Mr. Rajendra Kumar Ved is the CFO of the Company.
2. Mr. Pramod Somani is the Managing Director of the Company.
21. Particulars of loans, guarantees or investments under section 186
Pursuant to Section 134(3)(g) of the Companies Act, 2013 particulars of loans, guarantees or investments provided by the Company under Section 186 of the Act as at end of the Financial Year 2015-16 , the Company has neither given any loan or guarantee nor made any investments during the year. There is no outstanding in relation to Loans, guarantee or investments at the end of the year.
22. Particulars of Employees
The information required pursuant to Section 197 read with Rule, 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is as follows:
1. No sitting fees have been paid to any director during the year.
2. Considering the companys week financial position, none of the Directors is drawing any remuneration from the company. Only Mr. Rajendra Kumar Ved, CFO, has been paid salary of Rs 90,000/- in Financial Year 2015-16.
Hence the other information as required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is NIL
23. Particulars of contracts or arrangements with related parties:
During the financial year 2015-16, the Company has not entered into transactions with related parties as defined under Section 2(76) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, 2014, During the financial year 2015-16, there were no transactions with related parties which qualify as material transactions under the Listing Agreement/ SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS 2015 and the Companies Act.
In line with the requirements of the Companies Act, 2013 and Equity Listing Agreement/ SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS 2015, the Company has formulated a Policy on Related Party
Transactions which is also available on Companys website at www.jolindia.com. The Policy intends to ensure that proper reporting; approval and disclosure processes are in place for all transactions between the Company and Related Parties. Therefore the Company is not required to furnish any particulars in the Form AOC-2.
24. Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Manish Maheshwari, Practicing Company Secretary to conduct the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith to this Report and marked as Annexure - "B".
The Secretarial Audit Report contains some qualification, whose explanation is given as under:
1. The company has been declared sick under provisions of SICA, 1985 vide order dated 17th May 2006 by BIFR.
2. There were no manufacturing operations carried out in the factory. The Secured Creditors have sealed the production facilities and have deployed their own security personal. Consequently there was no production and sales in the company due to which it does not have any sales income, and is facing severe hardship in complying with several statutory requirements like appointment of a Whole-time Company Secretary and Internal Auditor. The Company tried its best but considering the companys financial position, none of the candidates agreed to join the company. Further due to the reasons as mentioned in the point No 4 of the Director report, the company could not make the payment of BSE for the FY 2016-17 and is trying hard to make the payment at the earliest.
3. The company is still trying to comply with this requirement and coping up to revive its financial position.
25. Management Discussion and Analysis Report
The Management Discussion and Analysis forms an integral part of this Report, as stipulated under Regulation 34(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 entered with the Stock Exchange, is set out in the Annexure forming part of Annual Report marked as Annexure - "A".
26. Board Meetings
The details of the number of Board and Committee meetings of the Company are set out in the Corporate Governance Report which forms part of this Report.
27. Risk management policy
The Company has framed a Risk Management Policy to identify and access the key business risk areas and to resolve the same risk for smooth operations which is the regulatory requirements of Section 134(3) of Companies Act, 2013. A detailed exercise is being carried out at regular intervals to identify, evaluate, manage and monitor all risks. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework.
28. Internal Financial Control
According to Section 134(5) (e) of the Companies Act, 2013 the term Internal Financial Control (IFC) means the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.
The company is not doing any manufacturing activity and sales activity. Further there are no staffs or workers, except a CFO, left in the company. Hence the size of operations is minimal and the company has adequate internal financial controls required to present the true picture of financial statements.
29. Directors Responsibility Statement
Your Directors state that:
a) in the preparation of the annual accounts for the year ended March 31, 2016, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;
b) the Directors have 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 as at March 31, 2016 and of the loss of the Company for the year ended on that date;
c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors have prepared the annual accounts on a going concern basis;
e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.; and
f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
30. Anti Sexual Harassment Policy
The company does not have any female staff and hence there is no requirement of having Anti Sexual Harassment policy. However the Company would definitely place an Anti Sexual Harassment Policy in line with the requirements of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013 if there is any female employee at workplace.
The Directors wish to convey their appreciation for the cooperation extended by bankers and various Government agencies. The Directors also wish to thank the Shareholders, CFO, and for their support and co-operation.
|For Jyoti Overseas Limited|
|Date: 13th August, 2016||Pramod Somani|
|Place: Ghatabillod||(Managing Director)|