DIRECTORS' REPORT THE MEMBERS OF MK EXIM INDIA LIMITED Your Directors have pleasure in presenting their 23rd Annual Report and the audited financial statements for the financial year ended 31 st March 2015 1 Financial Results 2Share Capital The paid up equity share capital of the Company as at 31st March 2015 stood at Rs 718.05 lacs. During the year under review, the Company has not issued shares with differential voting rights nor has it granted any stock options or sweat equity. None of the directors of the Company hold instruments convertible into equity shares during the financial year ended 3151 March 2015. 3.Finance & Accounts The Company prepares its financial statements in accordance with the requirements of the Companies Act 2013 and the Generally Accepted Accounting Principles (GAPP)as applicable in India. The financial statements have been prepared on historical cost basis. The estimates and judgments relating to the financial statements are made on a prudent basis so as to reflect in a true and fair manner, the form and substance of transactions and reasonably present the Company's state of affairs, profits and cash flows for the financial year ended 31st March 2015. 4.Business Risks Like any other company in the textiles sector, the Company is exposed to business risks which can be internal and external. Increase in oil prices, volatility in the exchange rate of rupee vis-a-vis other principal currencies, increase in inflation leading to reduced spending power, are some of the risks faced by the Company. The expected slowdown in the growth in economies in Euro Zone, USA, South American countries, Russia, Middle East and other Asian countries may impact export sales of the Company. The Board of Directors is well aware of these risks and through the operational management, continues to monitorthem and guides in taking prompt action to mitigate the risks. 6 Corporate Social Responsibility Section 135 of the Companies At 2013 and the rules made there under relating to corporate social responsibility are not applicable to the Company during the financial year ended 31st March 2015. 7 Subsidiaries The Company has no subsidiary company. 8 Corporate Governance As per SEBI circular CIR/CFD/POLICY CELL/7/2014 dated 15th September 2014, clause 49 of the listing agreement relating to corporate governance is not applicable to the Company. 9 Listing of shares in BSE During the financial year under report, the equity shares issued by the Company are listed at BSE. 10 Extract of An n u a I Retu rn The extract of annual return in form MGT 9, as required under section 92 of the Companies Act 2013, as at 31st March 2015, is annexed to this report as Annexure A which forms part of this report. 12 Board of Directors Appointment During the year, the Board had appointed, on the recommendation of the Remuneration and Nomination Committee, Shri Manish M Dialani as the additional director from 29"' September 2014 and as the Managing Director from 30'" October 2014 for a period of 5 years subject to approval of the members at the ensuing annual general meeting. During the year, the Company has appointed Smt. Lajwanti Murli Dialani {DIN 05201148) as additional director with effect from 30.03.2015 . As additional director, she holds office till the ensuring annual general meeting. The Company has received notice of her appointment with requisite deposits from a member. Resignation Smt. Pushpa Khanchandani (DIN 00174337 ) resigned as Director from 30.10.2014. The Board places on record its appreciation of the services rendered by Smt. Pushpa Khanchandani. Independent Directors All Independent directors have given declaration that they meet the criteria of independence as stipulated under section 149(6) of the Companies Act 2013. As per provisions of Section 152 of the Companies Act 2013 and in accordance with the provisions of the Articles of Association of the Company, Shri Dayaram Khanchandani retires by rotation and being eligible offers himself for re appointment. 13 Number of meetings of the Board During the year under report, the board met 12- times on 15.05.2014, 26.05.2014, 21.06.2014, 30.06.2014, 31.07.2014, 01.09.2014, 01.10.2014, 30.10.2014, 22.12.2014, 07.02.2015, 18.03.2015 & 30.03.2015 14 Board Evaluation The performance evaluation of the independent directors was completed. The performance evaluation of the Chairman and non-independent directors was carried out by the independent directors and was accepted by the Board. -- 15 Particulars of loans, guarantees or investments by the Company During the year, the Company has not given any loan or issued any guarantee in connection with the loan. The Company has entered into an agreement with the directors and members of Kolba Farm Fab Private Limited (Kolba), a company based in Surat, Gujarat, to acquire the said company's shares subject to certain terms and conditions. Kolba's business activities are in sync with the Company's business. If the agreement materialises, Kolba would become the subsidiary of the Company during the current financial year. The acquisition would greatly supplement the ever increasing business activities of the Company. 16 Whistle Blower policy The Company has in place a mechanism to report genuine concerns or grievances. 17 Remuneration and Nomination policy The Board of directors has adopted a policy framework for selection, appointment and remuneration of directors, key managerial personnel and senior management of the Company. 18 Related party transactions All transactions entered with related parties for the financial year ended 31s1 March 2015 were on arm's length basis and in the ordinary course of business. Hence provisions of Section 188 of the Companies Act 2013 are not attracted and disclosure in form AOC 2 is not required. All related party transactions are placed before the Audit Committee and the Board of Directors for approval. 19Significant and material orders passed bythe regulators or courts There are no significant and material orders passed by the regulators or courts against the Company during the year. 20Directors responsibility statement To the best of knowledge and belief and according to the information and explanation obtained by them, your directors make the following statement in terms of section 134(3)(c) of the Companies Act 2013: (i)That in preparation of the annual accounts for the year ended 31st March 2015 the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; (ii)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 31al March 2015 and of the profit of the Company for the year ended on that date; (iii)That the directors have taken proper and sufficient care 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; (iv) That the annual accounts have been prepared on a going concern basis <v) That 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. 21 Statutory auditors M/s. Vimal Agrawal & Associates, Chartered Accountants, who are statutory auditors of the Company hold office upto the forthcoming annual general meeting. If appointed, Under section 139 of the Companies Act 2013, they shall hold office from the conclusion of the ensuing annual general meeting till the conclusion of the annual general meeting relating to the financial year ending 31s' March 2018. The Company has obtained written confirmation from the auditors that theirappointment, if made, would be in conformity with the limits specified in the said section. Qualification in the auditor's report With reference to the auditor's remarks in regard to AS 15 for Employees Benefits (Revised 2005) for provision of gratuity, the Directors clarify that the liability for gratuity payable by the Company is being worked out in consultation with LIC and appropriate policy as advised by LIC will be taken in due course, during the current financial year. 22 Cost Audit The provisions of the Companies (Cost Records and Audit) Rules 2014 are not applicable to the Company's operations. 23 Secretarial Audit Report As required under section 204 of the Companies Act 2013, the Secretarial Audit Report from Mr. Suresh Chandra Sharma, S. C. Sharma & Associates, Practising Company Secretary (CP No 3374) is annexed to this report as Annexure B which forms part of this report. With reference to the observations in the secretarial audit report in the matter of appointment of independent directors, the Directors state that the Company has complied with the provisions of section 149 of the Companies Act 2013 and no action need to be taken further. 24 Internal control system and their adequacy The Company has an effective internal control system commensurate with its size and scale of its operations. The internal audit is entrusted to M/s M/s Madhur & Associates, Chartered Accountants. The Audit Committee reviews the adequacy and effectiveness of the internal control systems and suggests improvements, wherever required. 25 Environment and Safety The Company's operations do not pose any environment hazards and are conducted in such a mannerthat safety of all concerned and compliances with environmental regulations is ensured. (A) Conservation of energy: I. PowerConsumption: 1.Electricity Purchased units Total Amount (in Rs.) Rate per unit (in Rs.) 2.Diesel Purchased (in liters) Total Amount(in Rs.) Rate per liter (in Rs.) 3.Coal 4.FurnanceOil 5.Other Internal Generation 27 Acknowledgment The Directors wish to place on record their appreciation of the contribution made by the employees at all levels but for whose efforts, the Company could not have achieved the remarkable financial results for the financial year ended 31st March 2015. The Directors also to wish to thank the Company's customers and banks for their continued support and faith reposed in the Company. By order of the board for M. K. Exim (India) Limited Sd /-Day a Ram Khanchandani Whole Time Director (DIN:00161546) Manish MurlidharDialani Managing Director Prakriti Sethi Company Secretary (DIN:05201121) Place: Jaipur Date:30.05.2015 |