j. k. cotton limited...1 notice is hereby given that the 91st annual general meeting of j.k.cotton...

J. K. COTTON LIMITED



JUGGILAL KAMLAPATCOTTON SPINNING & WEAVING

MILLS CO. LTD

ANNUAL REPORT2013-2014

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J. K. COTTON LIMITED(FORMERLY JUGGILAL KAMLAPAT COTTON SPINNING & WEAVING MILLS CO. LTD.)

BOARD OF DIRECTORS :

Dr. GAUR HARI SINGHANIA (Chairman & Managing Director)

Shri YADUPATI SINGHANIA (Vice-Chairman)

Shri GOVIND HARI SINGHANIA

Shri NIDHIPATI SINGHANIA

Dr. K. B. AGARWAL

Shri JAGENDRA SWARUP

Dr. ANIL GUPTA (Nominee of BIFR)

Shri K. C. AGGARWAL (Nominee of AFL)

Dr. J. N. GUPTA

Shri ASHOK GUPTA

CEO :

Shri ABHISHEK SINGHANIA

CFO & COMPANY SECRETARY :

Shri S. K. KEDIA

BANKERS :

PUNJAB NATIONAL BANK

BANK OF INDIA

YES BANK LTD.

ORIENTAL BANK OF COMMERCE

ALLAHABAD BANK

ICICI BANK LTD.

IDBI BANK LTD.

STATE BANK OF INDIA

AXIS BANK LTD.

AUDITORS :

MESSRS. P. L. TANDON & CO.

Chartered Accountants

REGISTERED OFFICE :

KAMLA TOWER, KANPUR

CONTENTS

Notice ... ... 1-6

Management Discussionand Analysis Report ... 7-8

Directors’ Report ... ... 9-11

Report on Corporate Governance 12-16

Auditors’ Report ... ... 17-19

Balance Sheet ... ... 20

Profit & Loss Statement ... 21

Cash Flow Statement ... 22

Notes on financial Statements .. 23-34


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Notice is hereby given that the 91st Annual General Meeting ofJ.K.Cotton Limited (Formerly Juggilal Kamlapat Cotton Spinning& Weaving Mills Co. Ltd.) will be held on Tuesday, the 12thAugust, 2014 at 12.00 Noon at the Registered Office of theCompany at Kamla Tower, Kanpur to transact the followingbusiness :-1. To receive, consider and adopt the Audited Balance Sheet

as at 31st March, 2014, Profit and Loss Statement for theyear ended on that date and the Reports of the Board ofDirectors and Auditors thereon.

2. To appoint a Director in place of Shri Govind Hari Singhania(DIN 00159580), who retires by rotation and being eligibleoffers himself for re-appointment.

3. To appoint a Director in place of Shri Yadupati Singhania(DIN 00050364), who retires by rotation and being eligibleoffers himself for re-appointment.

4. To appoint Auditors (pursuant to Section 139 of theCompanies Act, 2013) to hold office from the conclusion ofthis meeting until the conclusion of the next Annual GeneralMeeting and to fix their remuneration. The retiring auditorsM/s P.L. Tandon & Company, Chartered Accountants,Kanpur (ICAI Registration No.000186C), are, howevereligible for re-appointment.

SPECIAL BUSINESS:5. To consider and, if thought fit, to pass with or without

modification(s) the following resolution as an OrdinaryResolution:“RESOLVED THAT pursuant to Section 148 of theCompanies Act, 2013 read with Companies (Audit andAuditors) Rules, 2014, the remuneration of` `25000/- plusservice tax as applicable and reimbursement of actual traveland out of pocket expenses for the Financial Year ending31st March, 2015 as recommended by the Audit Committeeand as approved by the Board of Directors of the Companyin its meeting held on 29th May, 2014, to be paid to M/s R.M. Bansal & Co., Cost Accountants, for the conduct of thecost audit of the Company’s Textile manufacturing unit atKanpur, be and is hereby ratified and confirmed.”

6. To consider and, if thought fit, to pass with or withoutmodification(s) the following resolution as a SpecialResolution:“RESOLVED THAT pursuant to the provisions of Sections149,150, 152 and any other applicable provisions of theCompanies Act, 2013 and the Rules framed thereunder(including any statutory modification(s) or re-enactmentthereof for the time being in force) read with Schedule IV tothe Companies Act, 2013, Dr. J.N.Gupta (holding DIN

00397952), Director of the Company in respect of whom theCompany has received a notice in writing from a memberproposing his candidature for the office of Director be and ishereby appointed as an Independent Director of theCompany to hold office for five consecutive years tillrespective Annual General Meeting.”

7. To consider and, if thought fit, to pass with or withoutmodification(s) the following resolution as a SpecialResolution:“RESOLVED THAT pursuant to the provisions of Sections149,150, 152 and any other applicable provisions of theCompanies Act, 2013 and the Rules framed thereunder(including any statutory modification(s) or re-enactmentthereof for the time being in force) read with Schedule IV tothe Companies Act, 2013, Dr. K.B.Agarwal (holding DIN00339934), Director of the Company in respect of whom theCompany has received a notice in writing from a memberproposing his candidature for the office of Director be and ishereby appointed as an Independent Director of theCompany to hold office for five consecutive years tillrespective Annual General Meeting.”

8. To consider and, if thought fit, to pass with or withoutmodification(s) the following resolution as a SpecialResolution:“RESOLVED THAT pursuant to the provisions of Sections149,150, 152 and any other applicable provisions of theCompanies Act, 2013 and the Rules framed thereunder(including any statutory modification(s) or re-enactmentthereof for the time being in force) read with Schedule IV tothe Companies Act, 2013, Shri Jagendra Swarup (holdingDIN 00164708), Director of the Company in respect of whomthe Company has received a notice in writing from a memberproposing his candidature for the office of Director be and ishereby appointed as an Independent Director of theCompany to hold office for five consecutive years tillrespective Annual General Meeting.”

9. To consider and, if thought fit, to pass with or withoutmodification(s) the following resolution as a SpecialResolution: “RESOLVED THAT in supersession of the OrdinaryResolution passed at the 90th Annual General Meetingheld on 13th August, 2013 and pursuant to the provisionsof Section 180(1)(c) of the Companies Act, 2013(corresponding Section 293(1)(d) of the Companies Act,1956) and all other applicable provisions, if any, of theCompanies Act, 2013 and Rules made thereunder (includingany statutory modification(s) or re-enactment thereof for thetime being in force) and pursuant to the provisions of the

J. K. COTTON LIMITED(Formerly Juggilal Kamlapat Cotton Spinning & Weaving Mills Co. Ltd.)

CIN : L17111UP1924PLC000275

Registered Office : Kamla Tower, Kanpur - 208 001, U. P., IndiaTele. No. : (0512) 2371478-481 • Fax : (0512) 2332665

E-mail : [email protected] • Website : www.jkcotton.com

NOTICE

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Articles of Association of the Company, the consent of theCompany be and is hereby accorded to the Board of Directorsof the Company to borrow in any manner from time to timeany sum or sums of moneys at its discretion on such termsand conditions as the Board of Directors may deem fit,notwithstanding that the moneys to be borrowed by theCompany together with the moneys already borrowed (apartfrom temporary loans obtained from the Company’s Bankersin the ordinary course of business) from the financialinstitutions, Company’s bankers and or from any person orpersons, firms, bodies corporate whether by way of loans,advances, deposits, bill discounting, issue of debentures,bonds or any financial instruments or otherwise and whethersecured or unsecured which may exceed the aggregate ofthe paid up capital of the Company and its free reserves,that is to say, reserves not set apart for any specific purpose,provided that the maximum amount of money so borrowedby the Board and outstanding at any one time shall notexceed the sum of `500 Crore (Rupees Five Hundred Croreonly).”“RESOLVED FURTHER THAT for the purpose of giving effectto this resolution, the Board of Directors be and is herebyauthorised to do and perform all such acts, deeds, mattersand things as it may in its absolute discretion deemnecessary, proper or desirable and to settle any question,difficulty, doubt that may arise in respect of the borrowing(s)aforesaid and also to delegate all or any of the abovepowers to such Committee of Directors or the ManagingDirector or the Director or the Key Managerial Personnel ofthe Company and further to do all such acts, deeds andthings and to execute all documents and writings as may benecessary, proper, desirable or expedient to give effect tothis resolution.”

10. To consider and, if thought fit, to pass with or withoutmodification(s) the following resolution as a SpecialResolution:“RESOLVED THAT pursuant to the provisions of Section180(1)(a) of the Companies Act, 2013 (correspondingSection 293(1)(a) of the Companies Act, 1956) and all otherapplicable provisions, if any, of the Companies Act, 2013and in supersession of all the Resolutions passed earlier inthis regard by shareholders of the Company, consent of theCompany be and is hereby accorded to the Board of Directorsof the Company to create mortgages/charges/hypothecationin any manner whatsoever on all or any of the immovableand movable properties of the Company present and future,of the whole or substantially the whole of the undertaking ofthe Company, ranking pari-passu or otherwise and/or secondand/or subservient and/or subordinate to the mortgages/charges/hypothecation already created or to be created infuture by the Company for securing any loans and/oradvances and/or guarantees and/or any financial assistanceobtained or may be obtained from financial institutions, banksor machinery suppliers and/or any other persons orinstitutions providing finance for purchase of assets and/ orfor the business of the Company or for working capital or forpurchase of specific items of machinery and equipmentsunder any deferred payment scheme or bills discounting

scheme or in favour of trustees for Debentureholders /Bondholders that may be appointed hereafter, as securityfor the debentures / bonds that may be issued by theCompany, with power to take over the management,business and concern thereof in certain events of default,on such terms and conditions and at such times and in suchform and manner as the Board of Directors may deem fit, sothat the total outstanding amount at any time so securedshall not exceed the aggregate of the amounts consentedby the Company by the Resolution passed at this meetingpursuant to Section 180(1)(a) of the Companies Act, 2013i.e. `500 Crore (Rupees five hundred Crore only) togetherwith interest thereon and further interest, if any, cost, charges,expenses, remuneration payable to the trustees and allother monies payable by the Company.”“RESOLVED FURTHER THAT the Board of Directors of theCompany be and is hereby authorized to and cause toprepare, finalise, approve and execute on behalf of theCompany with the lenders, banks, machinery suppliers,persons, institutions and trustees for the Debenture holders/Bond holders, the documents, deeds, agreements,declarations, undertakings and writings as may be necessaryand expedient for giving effect to the foregoing resolutionand also to delegate all or any of the above powers to theCommittee of Directors or the Managing Director or theDirector or the Key Managerial Personnel of the Company.”

11. To consider and, if thought fit, to pass with or withoutmodification(s) the following resolution as a SpecialResolution:“RESOLVED THAT pursuant to the provisions of Section 14and all other applicable provisions of the Companies Act,2013 read with Companies (Incorporation) Rules, 2014(including any statutory modification(s) or re-enactmentthereof, for the time being in force) the draft regulationscontained in the Articles of Association submitted to thismeeting be and are hereby approved and adopted insubstitution, and to the entire exclusion, of the regulationscontained in the existing Articles of Association of theCompany.”“RESOLVED FURTHER THAT the Board of Directors of theCompany be and is hereby authorized to do all acts andtake all such steps as may be necessary, proper or expedientto give effect to this resolution.”

By order of the BoardPlace : Kanpur S. K. KEDIADated : 10th July, 2014 CFO & Company SecretaryNOTES :1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE

MEETING IS ENTITLED TO APPOINT A PROXY/PROXIESTO ATTEND AND VOTE INSTEAD OF HIMSELF/HERSELF.SUCH PROXY/PROXIES NEED NOT BE A MEMBER OFTHE COMPANY.A person can act as proxy on behalf of members notexceeding fifty (50) and holding in the aggregate notmore than ten percent of the total share capital of theCompany. The instrument of proxy in order to be effective,should be deposited at the Registered Office of the

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Company, duly completed and signed not less than 48hours before the commencement of the meeting. A Proxyform is annexed herewith. Proxies submitted on behalfof the Companies, Societies etc. must be supported byan appropriate resolution/authority as applicable.

2. The Explanatory Statement pursuant to Section 102 of theCompanies Act, 2013, setting out the material facts isannexed hereto.

3. The Register of Members and Share Transfer Books of theCompany will remain closed from Monday, 4th August, 2014to Tuesday, 12th August, 2014 (both days inclusive).

4. Members are requested to notify immediately change ofaddress, if any, to the Company’s Registrar & Share TransferAgent in respect of their shareholding by mentioning folionos., etc.

5. Members are requested to bring their copies of the AnnualReport, as Copies of the Report will not be re-distributed atthe Meeting.

6. Members seeking any information with regard to the accountsof the Company are requested to write to the Company atits Registered Office, so as to reach at least 10 days beforethe date of the Meeting to enable the Management to keepthe information ready.

7. Pursuant to clause 49 of the Listing Agreement relating toCorporate Governance, the particulars of Directors proposedto be appointed or re-appointed are given in the Report onCorporate Governance attached to the Directors’ Report.

8. The Ministry of Corporate Affairs has taken ‘GreenInitiative in the Corporate Governance’ by allowingpaperless compliances by the Companies and hasissued circulars stating that service of notice/documents including Annual Report can be sent by e-mail to its members. In this regard we solicit yourcooperation to update our databank. Members arerequested to intimate their e-mail address, contacttelephone number, PAN and Bank Account details at anyof our e-mail address viz. (a) [email protected] (b)[email protected] (c) [email protected]

9. The Securities and Exchange Board of India (SEBI) hasmandated the submission of Permanent Account Number(PAN) by every participant in securities market. Memberscan submit their PAN details to the Company / RTA Agent ofthe Company.

10. All the documents referred to in the accompanying Noticeand the Statement pursuant to Section 102 of the CompaniesAct, 2013, will be available for inspection by the members atthe Registered Office of the Company during business hourson any working day excluding Saturday up to the date ofthe Annual General Meeting of the Company.

11. In terms of Sections 107 and 108 of the Companies Act,2013 read with Companies (Management andAdministration) Rules, 2014, the Company is providing itsmembers the facility to exercise their right to vote at themeeting by electronic means on any or all of the businessesspecified in the accompanying Notice. Necessaryarrangements have been made by the Company with CentralDepository Services Ltd. (CDSL) to facilitate e-voting. E-

voting is optional and members shall have the option tovote either through e-voting or in person at the GeneralMeeting.The procedure and instructions for voting through electronicmeans are as follows:-i. Open your web browser during the voting period and

log on to the e-voting website www.evotingindia.com.ii. Now click on “Shareholders” to cast your votes.iii. Now select the Electronic Voting Sequence Number

(“EVSN”) along with “J. K. COTTON LIMITED” from thedrop down menu and click on “SUBMIT”.

iv. All the shares of the Company are in Physical Form.Members should enter Folio Number registered with theCompany and then enter the Captcha Code asdisplayed and Click on “Login”

v. Fill up the following details in the appropriate boxes:PAN Enter your 10 digit alpha-numeric PAN issued by

Income Tax Department. Shareholders who havenot updated their PAN with the Company arerequested to use the first two letters of their namein Capital Letter followed by 8 digits folio no. inthe PAN field. In case the folio number is lessthan 8 digits enter the applicable number of 0’safter the folio number. Eg. If your name is RameshKumar with folio number 1234 then enterRA12340000 in the PAN field

DOB# Enter the Date of Birth as recorded in theCompany records for the said folio in dd/mm/yyyy format.

Dividend Enter the Dividend Bank Details as recordedBank in the Company records for the said folio.Details #

• Please enter the DOB or Dividend BankDetails in order to login. If the details are notrecorded with the Company please enter thenumber of shares held by you as on 3rd July,2014 in the Dividend Bank details field

# Please enter any one of the details in order to login.vi. After entering these details appropriately, click on

“SUBMIT” tab.vii. Members will then reach directly the EVSN selection

screen.viii. The details can be used only for e-voting on the

resolutions contained in this Notice.ix. Click on the relevant EVSN on which you choose to

vote.x. On the voting page, you will see Resolution

Description and against the same the option “YES/NO” for voting. Select the option YES or NO as desired.The option YES implies that you assent to theResolution and option NO implies that you dissent tothe Resolution.

xi. Click on the “Resolutions File Link” if you wish toview the entire Resolutions.

xii. After selecting the resolution you have decided to

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vote on, click on “SUBMIT”. A confirmation box willbe displayed. If you wish to confirm your vote, clickon “OK”, else to change your vote, click on“CANCEL” and accordingly modify your vote.

xiii. Once you “CONFIRM” your vote on the resolution,you will not be allowed to modify your vote.

xiv. You can also take out print of the voting done byyou by clicking on “Click here to print” option onthe Voting page.

xv. Institutional shareholders (i.e. other than Individuals,HUF, NRI etc.) are required to log on to https://www.evotingindia.co.in and register themselves asCorporates. After receiving the login details theyhave to link the account(s) which they wish to voteon and then cast their vote. They should upload ascanned copy of the Board Resolution and Powerof Attorney (POA) which they have issued in favourof the Custodian, if any, in PDF format in the systemfor the scrutinizer to verify the same.

xvi. The voting period begins on 6th August, 2014 (9.00a.m.) and ends on 8th August, 2014 (5.00 p.m.).During this period shareholders of the Company,holding shares as on the cut-off date of 3rd July,2014, may cast their vote electronically. The e-votingmodule shall be disabled by CDSL for votingthereafter.

xvii. In case you have any queries or issues regardinge-voting, you may refer the Frequently Asked

Questions (“FAQs”) and e-voting manual available atwww.evotingindia.co.in under help section or write anemail to [email protected]. You mayalso contact [email protected]; Tel. No.022-66069031.

xviii. The Company has appointed M/s. Adesh Tandon &Associates (Prop. Mr. Adesh Tandon) of Kanpur,Practicing Company Secretaries (C.P.No. 1121) asthe Scrutinizer for conducting the e-voting process infair and transparent manner.

xix. A copy of this notice has been placed on the websiteof the Company and the website of CDSL.

xx. In case of Members who are entitled to vote but havenot exercised their right to vote by electronic means,the Chairman of the Company will order a poll on hisown motion or on demand at the Meeting in terms ofSection 109 of the Companies Act, 2013 for allbusinesses specified in the accompanying Notice.For abundant clarity, please note that the Memberswho have exercised their right to vote by electronicmeans shall not be entitled to vote by way of pollat the Meeting. The voting rights of the Membersshall be in proportion to their shares of the paid-upequity share capital of the Company. The poll processshall be conducted and scrutinized and report thereonwill be prepared in accordance with Section 109 ofthe Companies Act, 2013 read with the Companies(Management and Administration) Rules, 2014.

EXPLANATORY STATEMENT PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013(CORRESPONDING SECTION 173(2) OF THE COMPANIES ACT, 1956)

ITEM NO. 5 :-

Pursuant to Section 148 of the Companies Act, 2013 and Rule14 of the Companies (Audit and Auditors) Rules, 2014, theBoard shall appoint a Cost Accountant in practice on therecommendation of the Audit Committee, which shall alsorecommend remuneration for such cost auditor. The remunerationrecommended by Audit Committee shall be considered andapproved by the Board of Directors and ratified by theshareholders.

On recommendation of Audit Committee at its meeting held on29th May, 2014, the Board has considered and approvedappointment of M/s R.M.Bansal & Co., Cost Accountants forconduct of Cost Audit of the Company’s Textile manufacturingunit at Kanpur at a remuneration of `25,000/- plus applicableservice tax and reimbursement of actual travel and out of pocketexpenses for the Financial year ending 31st March, 2015.

The Resolution at item No. 5 of the Notice is set out as anOrdinary Resolution for approval and ratification by shareholdersin terms of section 148 of the Companies Act, 2013.

None of the Directors and/or Key Managerial Personnel of the

Company and their relatives is concerned or interested, financialor otherwise, in the Resolution set out at Item No. 5 of theNotice.

ITEM NO. 6 :-

Dr. J.N.Gupta (DIN 00397952) is a Non-Executive IndependentDirector of the Company. He joined the Board of Directors of theCompany in July, 2003. Dr. J.N.Gupta is the Chairman of theAudit Committee and Shareholders’/ Investors’ GrievanceCommittee of the Company.

Dr. J.N.Gupta is M.Com., Ph.D, C.A.I.I.B, D.I.F. He has vastexperience in Finance, Banking and Capital Market. He is ChiefExecutive Officer of Jagran Education Foundation and a memberof the Board of Directors of M/s Jaiprakash Power Ventures Ltd.and M/s RSPL. As on 31.3.2014, he does not hold any EquityShare of the Company.

In terms of Section 149 and any other applicable provisions ofthe Companies Act, 2013, Dr. J.N.Gupta being eligible, offershimself for appointment, is proposed to be appointed as anIndependent Director for five consecutive years till respectiveAnnual General Meeting.

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Director in terms of Section 164 of the Companies Act, 2013 andhas given his consent to act as a Director.

In the opinion of the Board, Dr. Agarwal fulfills the conditionsspecified in the Companies Act, 2013 and Rules madethereunder for his appointment as an Independent Director ofthe Company and is independent of the management. Copy ofthe draft letter for appointment of Dr. Agarwal as an IndependentDirector setting out the terms and conditions would be availablefor inspection without any fee by the members at the RegisteredOffice of the Company during normal business hours on anyworking day excluding Saturday.

The Board considers that his continued association would be ofimmense benefit to the Company and it is desirable to continueto avail services of Dr. Agarwal as an Independent Director.Accordingly, the Board recommends the resolution in relation toappointment of Dr. Agarwal as an Independent Director, for theapproval by the shareholders of the Company.

Except Dr. K.B.Agarwal, being an appointee, none of the Directorsand/or Key Managerial Personnel of the Company and theirrelatives is concerned or interested, financial or otherwise, in theresolution set out at Item No. 7 of the Notice. This ExplanatoryStatement may also be regarded as a disclosure under Clause49 of the Listing agreement with the Stock Exchange(s).

ITEM NO. 8 :-

Shri Jagendra Swarup (DIN 00164708) is a Non-ExecutiveIndependent Director of the Company. He joined the Board ofDirectors of the Company in August, 2012. Shri Jagendra Swarupis the member of the Audit Committee and Shareholders’/Investors’ Grievance Committee of the Company.

Shri Jagendra Swarup is an Advocate. He has been in practicefor over 37 years and has vast experience in the legal field andparticularly on matters relating to Corporate Laws, Banking andTaxation. He is the legal advisor to leading Indian Companiesand Banks. He is holding membership of various Associationsand is also holding important positions in various fields viz.professional, political, commercial, educational and social. Hehas been a member of Legislative Council of U.P. for about fourdecades consecutively. He has been a Director of JaykayEnterprises Ltd. since 2001. He is also a Director in the Board ofJ.K. Cement Ltd. and Frost International Ltd. As on 31.3.2014,he does not hold any Equity share of the Company.

In terms of Section 149 and any other applicable provisions ofthe Companies Act, 2013, Shri Swarup being eligible, offershimself for appointment, is proposed to be appointed as anIndependent Director for five consecutive years till respectiveAnnual General Meeting.

The Company has received a notice in writing from a memberalongwith the deposit of `1,00,000/- (Rupees One Lac only)under Section 160 of the Companies Act, 2013 proposing thecandidature of Shri Jagendra Swarup for the office of Director ofthe Company.

Shri Jagendra Swarup is not disqualified from being appointedas a Director in terms of Section 164 of the Companies Act, 2013and has given his consent to act as a Director.

The Company has received a notice in writing from a memberalongwith the deposit of `1,00,000/- (Rupees One Lac only)under Section 160 of the Companies Act, 2013 proposing thecandidature of Dr. J.N.Gupta for the office of Director of theCompany.

Dr. J.N.Gupta is not disqualified from being appointed as aDirector in terms of Section 164 of the Companies Act, 2013and has given his consent to act as a Director.

In the opinion of the Board, Dr. Gupta fulfills the conditionsspecified in the Companies Act, 2013 and Rules madethereunder for his appointment as an Independent Director ofthe Company and is independent of the management. Copy ofthe draft letter for appointment of Dr. Gupta as an IndependentDirector setting out the terms and conditions would be availablefor inspection without any fee by the members at the RegisteredOffice of the Company during normal business hours on anyworking day excluding Saturday.

The Board considers that his continued association would beof immense benefit to the Company and it is desirable to continueto avail services of Dr. Gupta as an Independent Director.Accordingly, the Board recommends the resolution in relation toappointment of Dr. Gupta as an Independent Director, for theapproval by the shareholders of the Company.

Except Dr. J.N.Gupta, being an appointee, none of the Directorsand/or Key Managerial Personnel of the Company and theirrelatives is concerned or interested, financial or otherwise, inthe resolution set out at Item No. 6 of the Notice. ThisExplanatory Statement may also be regarded as a disclosureunder Clause 49 of the Listing agreement with the StockExchange(s).

ITEM NO. 7 :-

Dr. K.B.Agarwal (DIN 00339934) is a Non-ExecutiveIndependent Director of the Company. He joined the Board ofDirectors of the Company in November, 2010. Dr. K.B.Agarwalis the member of the Audit Committee and Committee of Directorsof the Company.

Dr. K.B.Agarwal is M. Com., LL.B., Ph.D., AICWA, FCS. He hasvast experience in the fields of Finance, Accounts and CapitalMarket. He was President of U.P. Stock Exchange Ltd. andMerchants’ Chamber of U.P. He is Vice Chairman & Director ofM/s. Key Corp Ltd. He is also on the Board of Directors of J.K.Cement Ltd. and Jaykay Enterprises Ltd. As on 31.3.2014, heheld 5 Nos of Equity Share of the Company.

In terms of Section 149 and any other applicable provisions ofthe Companies Act, 2013, Dr. K.B.Agarwal being eligible, offershimself for appointment, is proposed to be appointed as anIndependent Director for five consecutive years till respectiveAnnual General Meeting.

The Company has received a notice in writing from a memberalongwith the deposit of `1,00,000/- (Rupees One Lac only)under Section 160 of the Companies Act, 2013 proposing thecandidature of Dr. K.B.Agarwal for the office of Director of theCompany.

Dr. K.B.Agarwal is not disqualified from being appointed as a

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In the opinion of the Board, Shri Swarup fulfills the conditionsspecified in the Companies Act, 2013 and Rules madethereunder for his appointment as an Independent Director ofthe Company and is independent of the management. Copy ofthe draft letter for appointment of Shri Swarup as an IndependentDirector setting out the terms and conditions would be availablefor inspection without any fee by the members at the RegisteredOffice of the Company during normal business hours on anyworking day excluding Saturday.

The Board considers that his continued association would be ofimmense benefit to the Company and it is desirable to continueto avail services of Shri Swarup as an Independent Director.Accordingly, the Board recommends the resolution in relation toappointment of Shri Swarup as an Independent Director, for theapproval by the shareholders of the Company.

Except Shri Jagendra Swarup, being an appointee, none of theDirectors and/or Key Managerial Personnel of the Company andtheir relatives is concerned or interested, financial or otherwise,in the resolution set out at Item No. 8 of the Notice. This ExplanatoryStatement may also be regarded as a disclosure under Clause49 of the Listing agreement with the Stock Exchange(s).

ITEM NOS. 9 & 10 :-

At the 90th Annual General Meeting of the Company held on13th August, 2013 the Members had, by way of an OrdinaryResolution and in pursuance of the provisions of Section 293(1)(d)of the Companies Act, 1956, authorized the Board to borrowmonies on behalf of the Company (apart from temporary loansobtained or to be obtained from the Company’s bankers in theordinary course of business) in excess of the aggregate of thepaid-up capital of the Company and its free reserves, subject tothe total outstanding amount so borrowed not exceeding a sumof `500 crore (Rupees Five hundred crore only) at any point oftime.

The said borrowings/issue of securities may be required to besecured by way of mortgage/hypothecation/charge of whole orany part of property including movable/immovable property ofthe Company. Further documents for the said purpose couldcontain the power to take over the management of the Companyin certain events. Therefore, pursuant to Section 180(1)(a) theapproval of the Shareholders of the Company is required by wayof Special Resolution. It is pertinent to mention here that thisresolution is not intended to be passed for the purpose of sale ofany of the undertaking but for the purpose of mortgage andhypothecation of the property of the Company.

Section 180 of the Companies Act, 2013 (‘the Act’) was notifiedon September 12, 2013. Under the said section, the abovepowers of the Board are required to be exercised only with theconsent of the Company by way of a Special Resolution. TheMinistry of Corporate Affairs (“MCA”) had vide its General CircularNo. 4/2014 dated March 25, 2014, clarified that the OrdinaryResolutions passed under Section 293(1)(a) and (d) of theCompanies Act, 1956 would be sufficient compliance of Section180 of the Act until September 11, 2014.

The approval of the Shareholders for the said borrowings andcreation of a mortgage or charge for the said borrowings is,

therefore, being sought, by way of Special Resolutions, pursuantto Section 180(1)(c) and (a) of the Act, respectively.

The Directors recommend the Resolutions at Item Nos. 9 and 10of the accompanying Notice for the approval of the shareholdersof the Company.

None of the Directors and/or Key Managerial Personnel of theCompany and their relatives, are concerned or interested, financialor otherwise, in the resolutions set out at Item Nos. 9 & 10 of theNotice.

ITEM NO. 11 :-

The Articles of Association (“AoA”) of the Company as presentlyin force since its incorporation. The existing AoA are based onthe Companies Act, 1913/1956 and several regulations in theexisting AoA contain references to specific section of theCompanies Act, 1913/1956 and some regulations in the existingAoA are no longer in conformity with the Companies Act, 2013.

The Act is now largely in force. On September 12, 2013, theMinistry of Corporate Affairs (“MCA”) had notified 98 Sections forimplementation. Subsequently, on March 26, 2014, MCA notifiedmost of the remaining Sections {barring those provisionswhich require sanction/confirmation of the National CompanyLaw Tribunal (“Tribunal”) such as variation of rights of holders ofdifferent classes of shares (Section 48), reduction of share capital(Section 66), compromises, arrangements and amalgamations(Chapter XV), prevention of oppression and mismanagement(Chapter XVI), revival and rehabilitation of sick companies(Chapter XIX), winding up (Chapter XX)} and certain otherprovisions including, inter alia, relating to Investor Educationand Protection Fund (Section 125) and valuation by registeredvaluers (Section 247). However, substantive sections of the Actwhich deal with the general working of companies stand notified.

With the coming into force of the Act several regulations of theexisting AoA of the Company require alteration or deletions inseveral articles.

Given this position, it is considered expedient to wholly replacethe existing AoA by a new set of Articles.

A new AoA to be substituted in place of the existing AoA arebased on Table ‘F’ of the Act sets out the model articles ofassociation for a company limited by shares.

The proposed new draft AoA is being uploaded on theCompany’s website for perusal by the shareholders.

The Board recommend the Special Resolution set out at itemNo.11 of the Notice for approval by the shareholders of theCompany.

None of the Directors and/or Key Managerial Personnel of theCompany and their relatives are, concerned or interested,financially or otherwise, in the Resolution set out at item No. 11of the Notice.

By order of the BoardPlace : Kanpur S. K. KEDIADated : 10th July, 2014 CFO & Company Secretary

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MANAGEMENT DISCUSSION AND ANALYSIS REPORT

We are making all efforts to cope up with the challengesthrough continuous cost reduction, processimprovements, rationalization of cost, improvingefficiencies and creating a strong customer orientedapproach. Therefore, the company operates within theletter and spirit of all applicable laws, general complianceswith legal requirements.

5. Opportunities and Challenges

Textile industry is one of the largest employers in Indiaand has strongest linkages with the rural economy. Thegrowing India young middle-class population is a sourceof great potential and provides immense opportunities tospur growth in the industry going forward. The majorchallenge that the textile and apparel industry facing isincreasing cost of production out of rising wages, highpower and interest costs. Despite tough businessconditions, your Company has been able to secure salesof `51.06 crs during the financial year 2013-14 against`39.86 crs in previous fiscal.

RMG manufacturing segment has come up in a big wayin recent past. Similarly, cotton fabrics are in high demandin premium segment. The Company has opened retailshowrooms at various places in and around Kanpur topromote Company’s products and is in process of openingmore showrooms in and outside Kanpur in phased manner.The Company has, installed new machines for productionof cotton fabrics. Power situation in the State is too badcoupled with high cost of power.

6. Human Resources

The Company places its utmost value on the humanresource and contribution from the employees is alwaysfine-tuned towards to achieve the overall organizationperformance by constant education, training and variousincentive schemes, which are in vogue.

7. Health, Safety and Environment

The Company continuously focus on the health & safetyfor all its workers and staff. Adequate safety measureshave been taken at the Company’s Mill for the preventionof accidents or other untoward incident. The necessarymedical facilities are available for the workers, staff andtheir family members to enable them to maintain goodhealth.

8. Internal Control System

The Company has proper Internal Controls in place forsafeguarding all its assets from unauthorized use ordisposal. Adherence to Internal Control Systems isensured by detailed Internal Audit, conducted byindependent team of External Auditors so that the assets

1. Company

The operations in the Weaving, Processing and YarnDyeing departments of Textile Unit of the Companycontinued during the year. The Company is continuouslytrying to achieve the desired results. Steps have beentaken for cost reduction and manufacturing quality productby new installed machines.

2. Overview of the Economy

According to the latest estimate, Indian economy grewby 4.7% in F.Y. 2013-14. Despite a good monsoon, themanufacturing indices had declined, commodity pricesstayed at high levels and food inflation reached an all-time high, which resulted in sustained CPI inflation of over10% in the last financial year. The Rupee depreciatedsignificantly before retracting in the latter half of the year.Consumer sentiments remained subdued for most partof F.Y. 2013-14.

However, the slow GDP growth appears to have bottomedout and post elections, economic activity is expected topick up from the second quarter of F.Y. 2014-15.

3. General Review

Indian textile industry is one of the leading sectors ofIndian economy and contributes significantly to thecountry’s industrial output (14%), employment generation(35 million in direct and another 20 million in indirectemployment) and export earnings (17%). It contributes4% to Indian GDP. Consumer demand remained sluggishacross the textile and apparel value chain in F.Y. 2013-14due to high inflation and interest rates resulting in longperiods of extended end-of-season sales, pressure onmargins, thus effecting profitability.

4. Risk Management

The textile business, like other business, is susceptibleto various risk. A combination of global and domesticfactors impacts the Indian economy. The primary mainfactor is raw material prices, mainly cotton, which is thelargest component of cost. Since the cotton is anagriculture produce, it suffers from climatic volatility andin return creates uncertainties for textile manufacturers.

Another important thing is the availability, quality and priceof power. The availability of good quality power atreasonable prices is critical sustainability of the industry.However, the cost of power has been continuouslyincreasing, adding to input cost pressure in the industry.

Another factors like high inflation, major current accountdeficit, depreciating rupee and lack of policy initiativesfurther worsen the conditions.

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are correctly accounted for and business operations areconducted as per laid down policies and procedures.

The Company has an Audit Committee of Board ofDirectors, which meets regularly to review, inter alia, riskmanagement policies, adequacies of internal controls andthe Audit findings on various functions of differentsegments of the business.

9. Cautionary Statement

Statements in this Management Discussions and AnalysisReport which seeks to describe the Company’sexpectations or predictions, may be considered to be

‘forward looking statements’ within the meaning ofapplicable security laws or regulations. However, actualresults could or may differ materially from thoseexpressed or implied. Important factors that could makea difference to the Company’s operations also includeglobal and Indian demand supply conditions, obsolescenceof machinery, availability of spare parts for machinery,delivery schedules and commissioning of new machineson order, levels of productivity achieved, changes ingovernment regulations, tax regimes, economicdevelopments besides other factors such as litigationand labour matters.

9

DIRECTORS’ REPORTTO THE MEMBERS,

The Directors are pleased to present their 91st Annual Reporttogether with the Audited Statement of Accounts of theCompany for the financial year ended 31st March, 2014.

Financial Results : 2013-14 2012-13`̀̀̀̀/Lacs `/Lacs

2.1 Sales 5105.55 3985.96

Profit/(Loss) before FinanceCost and Depreciation (515.68) (2398.69)

Finance Cost (1184.50) (512.01)

Profit/(Loss) before Depreciation (1700.18) (2910.70)

Depreciation (276.38) (144.14)

Net Profit/(Loss) BeforeExceptional Items (1976.56) (3054.84)

Exceptional Items 9485.36 –

Net Profit/(Loss) Before Tax 7508.80 (3054.84)

Less: Provision for Taxation -

Current Year – –

Tax Adjustment for Previous Year 0.67 –

Profit/(Loss) after Tax 7508.13 (3054.84)

2.2 The Directors are pleased to inform you that revenuefrom sales during the current year in textile unit increasedto ` 51.06 crores as compared to ` 39.86 crores in theprevious year. During the year under report the Companyhas opened retail showrooms at various places in andaround Kanpur to promote Company’s products and is inprocess of opening more showrooms in and outsideKanpur in phased manner. In view of continued losses,the Directors are unable to recommend any dividend.

3. REHABILITATION

The rehabilitation scheme sanctioned by Hon’ble BIFR isunder implementation. After lifting of lockout in the Millw.e.f. 19th January, 2009, large scale maintenance &overhauling work of the Mill Buildings, Plant & Machineryand Utilities has been undertaken and new machineshave been procured to replace old and obsolete ones.Steps are being taken for modernization and ` 11.69crores have been invested in Plant & Machinery duringthe financial year 2013-14.

4. CHANGE OF NAME OF THE COMPANY

The Shareholders of the Company at the last AnnualGeneral Meeting held on 13th August, 2013 approved thechange of name of the Company from ‘Juggilal KamlapatCotton Spinning & Weaving Mills Company Limited’ to‘J.K.Cotton Limited’. Accordingly a fresh certificate of

incorporation was issued by the Registrar of Companies,U.P. on 19th August, 2013.

5. CORPORATE GOVERNANCE

As per Clause 49 of the Listing Agreement with StockExchange(s), a report on Corporate Governance isenclosed as part of the Annual Report together with theAuditors’ Certificate on its compliance.

6. DIRECTORS

6.1 In accordance with the provisions of the Section 152 ofthe Companies Act, 2013 and the Company’s Articles ofAssociation, Shri Govind Hari Singhania and Shri YadupatiSinghania, Directors will retire by rotation at theforthcoming Annual General Meeting and being eligibleoffer themselves for re-appointment.

6.2 In accordance with the provisions of the Companies Act,2013, Independent Directors, viz. Dr. J.N. Gupta, Dr. K.B.Agarwal and Shri Jagendra Swarup are liable to retire byrotation at the ensuing Annual General Meeting and beingeligible offer themselves for re-appointment. Threeseparate notices in writing have been received frommembers of the Company signifying their intention topropose the candidature of Dr. J.N. Gupta, Dr. K.B. Agarwaland Shri Jagendra Swarup for the office of Directors ofthe Company for the period of five consecutive years.

7. CONSERVATION OF ENERGY, TECHNOLOGYABSORPTION, FOREIGN EXCHANGE EARNINGAND OUTGO

Particulars with regard to Conservation of Energy,Technology Absorption, Foreign Exchange Earning andoutgo in accordance with the provisions of Section217(1)(e) of the Companies Act, 1956 read with theCompanies (Disclosure of particulars in the Report ofBoard of Directors) Rules, 1988 in respect of Textile unitare annexed and form part of the Report.

8. PUBLIC DEPOSITS

Your Company has not accepted any deposits from public/shareholders in accordance with Section 58A of theCompanies Act, 1956 read with the Companies(Acceptance of Deposits) Rules, 1975.

9. PARTICULARS OF EMPLOYEES

There are no employees getting salary in excess of thelimit as specified under the amended provisions of sub-section (2A) of Section 217 of the Companies Act, 1956throughout or part of the financial year under review.

10. AUDITORS

10.1 Observations of the Auditors are explained wherevernecessary in the appropriate Notes on Accounts and callfor no further comments.

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10.2. The present Auditors, M/s. P.L.Tandon & Co., CharteredAccountants, will retire from their office at the ensuingAnnual General Meeting. They are, however, eligible forre-appointment and have furnished a certificate to theeffect that their re-appointment will be in accordance withthe provisions of sub-section (1B) of Section 224 of theCompanies Act, 1956. You are requested to consider theirappointment.

11. COST AUDITORS

Cost Audit records have been maintained in respect ofTextile unit of the Company for F.Y. 2013-14. Pursuant todirectives of the Central Government and provisions ofSection 233B of the Companies Act, 1956, the presentCost Auditors M/s R.M. Bansal & Co., Cost Accountantshave been re-appointed to conduct the cost audit of Textileunit for F.Y. 2014-15. You are requested to approve andratify their remuneration.

12. DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors confirm that:

i) in the preparation of the Annual Accounts, theapplicable accounting standards have been followedexcept those mentioned in the notes to the Accounts;

ii) the Directors have adopted such accounting policiesand applied them consistently and made judgements

and estimates that are reasonable and prudent so asto give true and fair view of the state of affairs of theCompany as at 31st March, 2014 and of the profit ofthe Company for the year ended on that date;

iii) the Directors have taken proper and sufficient carefor maintenance of adequate accounting records inaccordance with the provisions of the CompaniesAct, 1956 for safeguarding the assets of the Companyand for preventing and detecting fraud and otherirregularities; and

iv) the Directors have prepared the Annual Accounts ona going concern basis.

13. ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciationfor the valuable support received from bankers,government authorities, customers, agents, vendors andmembers during the year under review. Your Directorsalso wish to place on record their deep sense ofappreciation for committed services rendered by theexecutives, staff and workers of the Company.

For and on behalf of the BoardPlace : Kanpur GAUR HARI SINGHANIADated : 29th May, 2014 Chairman & Managing Director

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ANNEXURE -1 TO THE DIRECTORS’ REPORTINFORMATION REQUIRED UNDER SECTION 217(1)(e)OF THE COMPANIES ACT, 1956A. CONSERVATION OF ENERGYFollowing conservation measures were taken up during theyear

1. Installation of Variable Frequency Drive (VFD).

2. Installation of High Efficiency Thermopack.

3. Replacement of lighting lamps and tube lights by CFL.

4. Installation of Pressure Reducing Valves.

5. Installation of R.O. Plant.

6. Replacement of Old High Power consuming motorswith Power saving motors.

B. TECHNOLOGY ABSORPTION

Particulars with respect to adoption of the latestTechnology Absorption, Research and Development.

The Company continues to adopt the latest technology inthe textile industry and provides latest platforms to theemployees to execute their duties.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

(a) Foreign Exchange Earning :- Mentioned in Notes onAccounts

(b) Foreign Exchange Used :- Mentioned in Notes onAccounts

DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY

Particulars 2013-2014 2012-2013

A. POWER AND FUEL CONSUMPTION

1. Electricity(A) Purchased:

Textile SegmentUnits/KWH (000) 7191.40 7079.06Total Amount (` in Lacs) 512.83 444.22Rate/Unit (`) 7.13 6.28

(B) Own GenerationTextile Segment(Through Diesel Generator)Units/KWH (000) 196.39 273.82Unit per litre of Diesel 3.08 3.13Rate/Unit (`) 17.94 15.53

2. CoalTextile SegmentQuantity (MT) 1938 3746Total Cost (` in Lacs) 149.91 311.62Average Rate (` per MT) 7735.55 8318.66

3. HuskTextile SegmentQuantity (MT) 9705 7213Total Cost (` in Lacs) 396.68 264.99Average Rate (` per MT) 4087.34 3673.71

4. DieselTextile SegmentQuantity (Ltrs) 63753 87301Total Cost (` in Lacs) 35.23 42.54Average Rate (` per Ltr) 55.26 48.73

B. CONSUMPTION PER UNIT OF PRODUCTIONElectricityCloth (KWH/Metre) 1.72 1.89

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REPORT ON CORPORATE GOVERNANCEIn compliance with the requirements of clause 49 of the ListingAgreement with the Stock Exchanges, your Company submitsthe Annual Report on Corporate Governance.

1. Company philosophy on Code of Governance

We view Corporate Governance in its widest sense,almost like trusteeship. Corporate Governance is notmerely compliance and not simply creating checks andbalances, it is an ongoing measure of superior delivery ofCompany’s object with a view to translate opportunity intoreality.

Your Company continues to follow procedures andpractice in conformity with the Code of CorporateGovernance as outlined in clause 49 of the ListingAgreement.

2. Board of Directors(a) Composition/Category

The strength of the Board of Directors as on 31stMarch, 2014 is 10 (Ten). The composition is givenbelow :-• One Promoter, Executive, Non-independent

Director• Three Promoters, Non-Executive, Non-

independent Directors• One Non-Executive, Non-independent Director• Five Independent, Non-Executive Directors

The composition of the Board of Directors, the number ofDirectorship on the Board and Board Committees of othercompanies, of which the Directors are Members/Chairmanunder Report is given as under :-

Sl. Name of Director Category Inter-se Relationships No. of other No. of BoardNo. between Directors Director- Committees (Other

ships@ than J.K. Cotton) in which$

Director with Relation Chairman Member whom related

1. Dr. Gaur Hari Singhania Promoter, Executive, Shri Govind Hari Brother 5 – –Chairman & Managing Non Independent Shri Yadupati SonDirector

2. Shri Yadupati Singhania Promoter, Non-Executive, Dr. Gaur Hari Father 9 – –Vice Chairman Non Independent

3. Shri Govind Hari Singhania Promoter, Non-Executive, Dr. Gaur Hari Brother 1 – –Non Independent

4. Shri Nidhipati Singhania Promoter, Non-Executive, – – – – –Non Independent

5. Dr. K. B. Agarwal Non-Executive, – – 3 2 2Independent

6. Dr. J. N. Gupta Non-Executive, – – 2 – –Independent

7. Shri K. C. Aggarwal Non-Executive, – – 1 – –Nominee of AFL Independent

8. Dr. Anil Gupta Non-Executive, – – 3 – 2Nominee of BIFR Independent

9. Shri Jagendra Swarup Non-Executive, – – 3 – 3Independent

10. Shri Ashok Gupta Non-Executive, – – 2 – –Non-Independent

@ Excluding Private Limited Companies and Companies registered under section 25 of the Companies Act, 1956.$ Chairman/Membership of Audit Committee and the Shareholders’ Grievance Committee alone has been considered.

(b) Attendance of each director at the Board Meetings and at the last Annual General MeetingDuring the financial year ended 31st March, 2014, seven Board Meetings were held on the following dates :-a) 21st May, 2013b) 4th July, 2013c) 13th August, 2013d) 10th September, 2013e) 6th November, 2013f) 3rd December, 2013g) 12th February, 2014

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Attendance of each director at the Board Meetings and at thelast Annual General Meeting was as under :

Sl. Name of Director No. of Board Attendance atNo. Meetings the Last AGM

attended held on 13.08.13

1. Dr. Gaur Hari Singhania 6 Yes2. Shri Yadupati Singhania 7 Yes3. Shri Govind Hari Singhania 3 No4. Shri Nidhipati Singhania 1 Yes5. Dr. K.B.Agarwal 6 Yes6. Dr. J.N.Gupta 7 Yes7. Shri K.C.Aggarwal 1 No8. Dr. Anil Gupta 7 Yes9. Shri Jagendra Swarup 5 Yes10. Shri Ashok Gupta 7 Yes

c) The details of number of Equity Shares of theCompany held by Non-Executive Directors are asunder :

Sl.No. Name of Director No. of Equity Shares held1. Shri Yadupati Singhania 40750002. Shri Govind Hari Singhania 123263. Shri Nidhipati Singhania –4. Dr. K.B.Agarwal 55. Dr. J.N.Gupta –6. Shri K.C.Aggarwal –7. Dr. Anil Gupta –8. Shri Jagendra Swarup –9. Shri Ashok Gupta –

3. Audit Committee(a) Composition of the Committee and Broad Terms

of Reference

The Audit Committee of the Company comprises of thefollowing Directors:

Dr. J. N. Gupta : Independent,(Chairman) Non-Executive DirectorDr. K. B. Agarwal : Independent,

Non-Executive DirectorShri K. C. Aggarwal : Independent,

Non-Executive DirectorShri Jagendra Swarup : Independent,

Non-Executive Director

All these Directors possess knowledge of CorporateFinance / Accounts/ Company law / Industry. TheSecretary of the Company is Secretary for AuditCommittee.

The terms of reference of Audit Committee cover thematters specified for Audit Committee under clause49 of the Listing Agreement as well as in Section 292A of the Companies Act, 1956.

(b) Meetings/Attendance

During the financial year ended 31st March, 2014,four meetings were held on 21st May, 2013, 13thAugust, 2013, 6th November, 2013 and 12thFebruary, 2014.

The attendance at the Committee Meetings was asunder :

Name of Director No. of Meetings attendedDr. J.N.Gupta 4Dr. K.B.Agarwal 4Shri K.C.Aggarwal 0Shri Jagendra Swarup 3

4. Remuneration CommitteeThe Company is not paying any remuneration toExecutive and Non-Executive Directors except sittingfees to Non-Executive Directors. Hence, the Companyhas not constituted any Remuneration Committee, whichis also optional as per Clause 49 of the Listing Agreementwith Stock Exchanges.

Details of Remuneration to the Directors for the yearended 31st March, 2014

Sl. Name of Director Salary Benefits Sitting TotalNo. Fee

1. Dr. Gaur Hari Singhania @ – – – –2. Shri Yadupati Singhania – – 35500 355003. Shri Govind Hari Singhania – – 15000 150004. Shri Nidhipati Singhania – – 5000 50005. Dr. K. B. Agarwal – – 34300 343006. Dr. J. N. Gupta – – 43000 430007. Shri K. C. Aggarwal – – 5000 50008. Dr. Anil Gupta – – 35000 350009. Shri Jagendra Swarup – – 31000 3100010. Shri Ashok Gupta – – 39500 39500

@ No Sitting Fees was payable w.e.f 30.10.2007 on appointment asManaging Director

5. Shareholders’ Grievance Committee

(a) Composition

The Committee comprises of following Directors :

Dr. J.N. Gupta : Independent, (Chairman) Non-Executive DirectorShri Jagendra Swarup : Independent,

Non-Executive DirectorShri Ashok Gupta : Non-Independent,

Non-Executive Director

The Secretary of the Company is compliance officerof the Committee.

(b) Functions

To review the status of shareholders’/ Investors’

14


grievances, redressal mechanism and recommendmeasures to improve the level of investors’ services.The Company had received only one complaintduring the Financial Year 2013-14 and no complaintwas pending as at the beginning and at the end of theFinancial Year 2013-14.

(c) Meetings/AttendanceDuring the financial year ended 31st March, 2014,four meetings were held on 21st May, 2013, 13thAugust, 2013, 6th November, 2013 and 12thFebruary, 2014.

The attendance at the Committee Meetings was asunder:

Name of Director No. of Meetings attended Dr. J. N. Gupta 4 Shri Jagendra Swarup 3 Shri Ashok Gupta 4

6. General Body MeetingsDates and time of last three Annual General Meetingsheld are given below :

Financial Date Time PlaceYear2010-11 25th August, 2011 1.00 pm Registered Office,

Kamla Tower, Kanpur2011-12 13th August, 2012 12.30 pm Registered Office,

Kamla Tower, Kanpur2012-13 13th August, 2013 12.00 pm Registered Office,

Kamla Tower, Kanpur

Special Resolution passed at the last three AGM

Date Short particulars of Special Resolution passed at the AGM

25th August, 2011 No Special Resolution was passed13th August, 2012 No Special Resolution was passed13th August, 2013 Special Resolution was passed

a) Change of name of the Company

POSTAL BALLOTPursuant to Section 192A of the Companies Act, 1956 readwith the Companies (Passing of the Resolution by Postal Ballot)Rules, 2011, consent of the shareholders was sought byPostal Ballot for Alteration in Objects Clause of theMemorandum of Association of the Company andCommencement of New Business.

The Notice dated 3rd December, 2013 containing the SpecialResolutions together with Explanatory Statement and PostalBallot Forms was dispatched to all the Shareholders of theCompany whose name(s) appeared on the Register ofMembers as on 27th December, 2013. The last date of dispatchof notice was 4th January, 2014. The last date for receipt ofduly completed Postal Ballot forms from the Shareholderswas 6th February, 2014.The Company had appointed Mr.Adesh Tandon, FCS, practicing Company Secretary, as theScrutinizer for conducting the Postal Ballot in a fair andtransparent manner. After completion of the scrutiny of theBallot papers, the Scrutinizer has made out a report and

submitted the same on 11th February, 2014 with the Chairmanof the Company. On the basis of said report of the Scrutinizer,the Chairman of the Company had declared the result of thePostal Ballot on 14th February, 2014 at 12:30 p.m. at theRegistered Office of the Company.

Special Resolutions passed by Postal Ballot :-

a) Special Resolution to alter by way of addition of new subclauses in the Objects Clause of the Memorandum ofAssociation of the Company in terms of section 17 andother applicable provisions of the Companies Act, 1956;

b) Special Resolution to commence and carry on all or anyof the businesses and activities in terms of Section 149(2A)of the Companies Act, 1956, as mention in item no (a)above of the proposed alterations by way of addition ofnew sub clauses in the Objects clauses of theMemorandum of Association of the Company.

7. Disclosures

(i) There was no significant transaction of material naturewith the related parties viz. Promoters, Directors orthe Management or their subsidiaries or relativesduring the year that has potential conflict with theinterest of the Company. Suitable disclosures asrequired by the Accounting Standard (AS18) havebeen made in the Annual Report.

(ii) There are no pecuniary relationship or transactionsof non-executive directors vis-à-vis the Companythat have potential conflict with the interest of theCompany at large.

(iii) No penalties or strictures have been imposed on theCompany by SEBI or any Stock Exchange or anystatutory authority on any matter related to capitalmarket during the last three years.

(iv) The Company has complied with the non-mandatoryrequirements of Clause 49 of the Listing Agreementas far as possible.

(v) Disclosures regarding appointment or reappointmentof Directors:

According to the Articles of Association of the Company, twodirectors viz. Shri Govind Hari Singhania and Shri YadupatiSinghania will retire by rotation at the ensuing Annual GeneralMeeting and being eligible, offers themselves for re-appointment. Independent Director viz. Dr. J. N. Gupta, Dr. K.B. Agarwal and Shri Jagendra Swarup are liable to retire byrotation in ensuing Annual General Meeting of the Companyand being eligible, offers themselves for re-appointment. Threenotices in writing have been received from members of theCompany signifying their intention to propose Dr. J. N. Gupta,Dr. K. B. Agarwal and Shri Jagendra Swarup as their candidatesfor the Independent Director of the Company for fiveconsecutive years.

Pursuant to clause 49 of the Listing Agreement relating to theCode of Corporate Governance, the particulars of theaforesaid Directors are given below :

(a) Shri Govind Hari Singhania is Bachelor of Arts. He isassociated with the company as Promoter Director since1958. He has wide experience in man-made fibre andtextile Industry. He is Vice Chairman in Jaykay Enterprises

15

Ltd. He is Chairman, Governing Body of J.K. EducationFoundation and Chairman, Governing Body of SirPadampat Singhania M.E. Foundation. As on 31.3.2014,he held 12326 nos of Equity Share of the Company.

(b) Shri Yadupati Singhania is B.Tech from IIT, Kanpur. Heis associated with the Company as Promoter Directorsince 1987. At present he is Vice- Chairman of theCompany. He has vast experience in Textile and CementIndustry. He is Managing Director and CEO of J.K.CementLtd. and Jaykay Enterprises Ltd. He is the Director ofEmployers Association of Northern India & President ofKanpur Productivity Council. As on 31.3.2014, he held4075000 nos of Equity Share of the Company.

(c) Dr. J. N. Gupta is M.Com., Ph.D, C.A.I.I.B, D.I.F. He hasvast experience in Finance, Banking and Capital Market.He is Chief Executive Officer of Jagran EducationFoundation and a member of the Board of Directors of M/s Jaiprakash Power Ventures Ltd. and M/s RSPL. As on31.3.2014, he does not hold any Equity Share of theCompany.

(d) Dr. K. B. Agarwal is M. Com., LL.B., Ph.D., AICWA, FCS.He has vast experience in the fields of Finance, Accountsand Capital Market. He was President of U.P. StockExchange Ltd. and Merchants’ Chamber of U.P. He is ViceChairman & Director of M/s. Key Corp Ltd. He is also onthe Board of Directors of J.K. Cement Ltd. and JaykayEnterprises Ltd. As on 31.3.2014, he held 5 nos of EquityShare of the Company.

(e) Shri Jagendra Swarup is an Advocate. He has been inpractice for over 37 years and has vast experience in thelegal field and particularly on matters relating to CorporateLaws, Banking and Taxation. He is the legal advisor toleading Indian Companies and Banks. He is holdingmembership of various Associations and also holdingimportant positions in various fields viz. professional,political, commercial, educational and social. He has beena member of Legislative Council of U.P. for about fourdecades consecutively. He has been a Director of JaykayEnterprises Ltd. since 2001. He is also a Director in theBoard of J.K. Cement Ltd. and Frost International Ltd. Ason 31.3.2014, he does not hold any Equity share of theCompany.

8. Code of Conduct

The Board of Directors has already adopted the Code ofEthics & Business Conduct for the Directors and SeniorManagement Personnel. This Code is a comprehensivecode applicable to all Directors and members of the SeniorManagement.

A copy of the Code of Conduct has been put on theCompany’s website www.jkcotton.com.

The Code of Conduct has been circulated to all themembers of the Board and Senior Management personneland compliance of the same has been affirmed by them.A declaration signed by the Chairman & Managing Directorin this regard is given below:

“I, Dr. Gaur Hari Singhania, Chairman, Managing Directorof J.K. Cotton Ltd. (Formerly Juggilal Kamlapat Cotton

Spg. & Wvg. Mills Co. Ltd.) hereby confirm that theCompany has obtained from all the members of the Boardand Senior Management Personnel of the Company,affirmation that they have complied with Code of Ethicsand Business Conduct framed for Directors and SeniorManagement Personnel in respect of the Financial Year2013-14.”

Dr Gaur Hari Singhania(Chairman & Managing Director)

9. Means of CommunicationsThe Annual, Half Yearly and Quarterly results aresubmitted to the Stock Exchanges in accordance withListing Agreement and the same are published regularlyin the newspapers. All vital information relating to theCompany and its performance, including quarterly resultsetc. are also posted on the Company’s websitewww.jkcotton.com.

10. CEO/CFO CertificationA Certificate in accordance with provision of Clause 49(V)of the Listing Agreement in respect of the Financial Year2013-14 duly signed by the CEO and CFO has beenplaced before the Board in the meeting held on 29th May,2014.

11. General Shareholders Information

a) Annual General Meeting

Date /Time : Tuesday, 12th August, 2014 / 12.00 NoonVenue : At the Registered Office of the Company,

Kamla Tower, Kanpurb) Financial Calendar

(1) First Quarter Results – On or before14th August, 2014

(2) Second Quarter Results – On or before14th November, 2014

(3) Third Quarter Results – On or before14th February, 2015

(4) Results of the year ending – On or before31st March, 2014 30th May, 2015

c) Date of Book Closure :4th August, 2014 to 12th August, 2014(Both Days Inclusive)

d) Dividend payment date :Not applicable (No dividend is proposed)

e) Listing InformationThe details regarding payment of listing fee to the StockExchanges is given below:Sl.No. Name of Stock Exchange Listing Fee Stock Code No.

paid upto1. U.P. Stock Exchange Ltd. 2013-14 J000112. Delhi Stock Exchange Ltd. 2013-14 3114

f) Share Market Data

SEBI has categorized the Company’s securities under

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compulsory demat trading on rolling basis. However,NSDL/CDSL have declined the Company’s request fordematerialisation of its shares on the ground that its networth was negative. Hence, there has not been anytrading in Stock Exchange in the shares of the Companyduring the year.

g) Registrar/Transfer Agent

M/s Jaykay Enterprises Ltd. having Registered Office atKamla Tower, Kanpur is Registrar/Transfer Agent of theCompany, who provides all services for Share registry inphysical segment.

h) Share Transfer System

Share Transfer work of physical segment is attended toby the Company’s Registrar & Transfer Agents within theprescribed period under law and the Listing Agreementswith Stock Exchanges. All share transfer etc. are approvedby a committee of Directors, which meets periodically.

i) Distribution of Shareholding as on 31st March, 2014

No. of Equity No. of % of No. of Shares % of Shares held Share Share held Share

holders holders holdingUpto 500 7755 96.32 749976 3.18501 to 1000 177 2.20 136389 0.581001 to 2000 50 0.62 70662 0.302001 to 3000. 19 0.24 46851 0.203001 to 4000 10 0.12 35153 0.154001 to 5000 3 0.04 13550 0.065001 to 10000 11 0.14 74919 0.3210001 and above 26 0.32 22450250 95.21Total 8051 100.00 23577750 100.00

j) Category wise Shareholding-Equity as on 31stMarch, 2014

Category No.of % of No.of % ofShare- Share- Shares Share-holders holders held holding

Promoters and Promoter Group 16 0.20 21723410 92.14Mutual Funds/UTI – – – –Financial Institutions/Banks 18 0.22 6239 0.03Insurance Companies 4 0.05 99142 0.42FIIs – – – –Bodies Corporate 93 1.16 440145 1.86Individuals 7914 98.30 1107814 4.70Others 6 0.07 201000 0.85Total 8051 100.00 23577750 100.00

k) Dematerialisation of Shares :The Company is a sick industrial Company within themeaning of the Sick Industrial Companies (SpecialProvisions) Act, 1985. The Company had approachedthe National Securities Depository Ltd. (NSDL) andCentral Depository Services (India) Ltd. (CDSL) fordematerialisation of its equity shares. However, NSDLand CDSL have declined the Company’s request on theground that its net worth was negative.

l) Plant LocationCompany’s Textile Unit is situated at 84/50, Kalpi Road,Kanpur and some of the machines are installed at J.K.Manufacturers premises at 84/29, Kalpi Road, Kanpur.

m) Address for CorrespondenceJ. K. Cotton LimitedFormerly Juggilal Kamlapat Cotton Spg. & Wvg. Mills Co.Ltd.Kamla Tower, Kanpur-208001Tele. No. (0512) 2371478-481 • Fax. (0512) 2332665

To, The Members ofJ. K. COTTON LIMITED(Formerly Juggilal Kamlapat Cotton Spinning & Weaving Mills Co. Ltd.)

We have examined the compliance of conditions of CorporateGovernance by J. K. COTTON LIMITED for the year ended31st March, 2014, as stipulated in Clause 49 of the ListingAgreement of the said Company with Stock Exchange(s).

The compliance of conditions of Corporate Governance isthe responsibility of the management. Our examination hasbeen limited to a review of the procedures andimplementations thereof, adopted by the Company forensuring the compliance with the conditions of the CorporateGovernance as stipulated in the said clause. It is neither anaudit nor an expression of opinion on the financial statementsof the Company.

AUDITOR’S CERTIFICATE ON CORPORATE GOVERNANCE

In our opinion and to the best of our information and accordingto the explanations given to us and based on therepresentations made by the Directors and theManagement, we certify that the Company has compliedwith the conditions of Corporate Governance as stipulatedin the clause 49 of the above mentioned Listing Agreement.

We state that such compliance is neither an assurance asto the future viability of the company nor of the efficiency oreffectiveness with which the management has conductedthe affairs of the Company.

For P.L. TANDON & CO.,Chartered AccountantsFirm Reg. No. 000186C

RAJENDRA GUPTAPlace : Kanpur PartnerDate : 29.05.2014 Membership No. 073250

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INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF J. K. COTTON LIMITED(Formerly Juggilal Kamlapat Cotton Spinning & Weaving Mills Co. Ltd.)

Report on the Financial Statements

We have audited the accompanying financial statements ofJ.K.COTTON LIMITED (“the Company”), which comprisethe Balance Sheet as at March 31, 2014, the Statement ofProfit and Loss and Cash Flow Statement for the year thenended, and a summary of significant accounting policies andother explanatory information.

Management’s Responsibility for the FinancialStatements

Management is responsible for the preparation of thesefinancial statements that give a true and fair view of the financialposition, financial performance and cash flows of the Companyin accordance with the Accounting Standards notified underthe Companies Act, 1956 (“the Act”) read with the GeneralCircular 15/2013 dated 13th September, 2013 of the Ministryof Corporate Affairs in respect of section 133 of the CompaniesAct, 2013. This responsibility includes the design,implementation and maintenance of internal control relevantto the preparation and presentation of the financial statementsthat give a true and fair view and are free from materialmisstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financialstatements based on our audit. We conducted our audit inaccordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India. Those Standardsrequire that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain auditevidence about the amounts and disclosures in the financialstatements. The procedures selected depend on the auditor’sjudgment, including the assessment of the risks of materialmisstatement of the financial statements, whether due to fraudor error. In making those risk assessments, the auditorconsiders internal control relevant to the Company’spreparation and fair presentation of the financial statementsin order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing anopinion on the effectiveness of the company’s internal control.An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of theaccounting estimates made by management, as well asevaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and accordingto the explanations given to us, the aforesaid financialstatements give the information required by the Act in themanner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs ofthe Company as at March 31, 2014;

(b) In the case of the statement of Profit and Loss, of theprofit for the year ended on that date; and

(c) In the case of the Cash Flow Statement, of the cash flowsfor the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order,2003 (“the Order”) issued by the Central Government ofIndia in terms of sub-section (4A) of section 227 of theAct, we give in the Annexure a statement on the mattersspecified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a. we have obtained all the information and explanationswhich to the best of our knowledge and belief werenecessary for the purpose of our audit;

b. in our opinion proper books of account as required by lawhave been kept by the Company so far as appears fromour examination of those books;

c. the Balance Sheet, the Statement of Profit and Loss andthe Cash Flow Statement dealt with by this Report are inagreement with the books of account;

d. in our opinion, the Balance Sheet, the Statement of Profitand Loss, and the Cash Flow Statement comply with theAccounting Standards notified under the Companies Act,1956 read with the General Circular 15/2013 dated 13thSeptember 2013 of Ministry of Corporate Affairs inrespect of section 133 of the Companies Act, 2013;

e. On the basis of written representations received from thedirectors as on March 31, 2014, and taken on record bythe Board of Directors, none of the directors is disqualifiedas on March 31, 2014, from being appointed as a directorin termsof clause (g) of sub-section (1) of section 274 ofthe Companies Act, 1956.

For P. L. TANDON & CO.Chartered AccountantsFirm Reg. No. 000186C

RAJENDRA GUPTAPlace : Kanpur PartnerDated : 29.05.2014 Membership No. 073250

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ANNEXURE TO THE AUDITOR’S REPORT

Re: J.K.COTTON LIMITED

Referred to in Paragraph 1 under the heading of “Reporton Other Legal and Regulatory Requirements’’ of ourreport of even date

(i) In respect of its Fixed Assets:

(a) The Company has maintained proper recordsshowing full particulars, including quantitative detailsand situation of fixed assets acquired during theyear 1961 and onwards other than Furniture andFittings, Office Equipments and a part of Plant andMachinery comprising Electric Fittings andEquipments.

(b) `A part of Fixed assets have been physically verifiedby the management during the year. No materialdiscrepancies were noticed on such verification.

(c) In our opinion and according to the information andexplanations given to us, the Company has notmade substantial disposal of Fixed assets duringthe year and therefore, don’t effect going concernassumption.

(ii) In respect of its Inventories:

(a) As explained to us, inventories have been physicallyverified during the year by the management atreasonable intervals.

(b) In our opinion and according to the information andexplanations given to us, the procedures of physicalverification of inventories followed by themanagement are reasonable and adequate inrelation to the size of the Company and the natureof its business.

(c) In our opinion and according to the information andexplanations given to us, the Company hasmaintained proper records of its inventories anddiscrepancies noticed on verification betweenphysical stocks and the book records were notmaterial.

(iii) In respect of Loans Secured or Unsecured, granted ortaken by the Company to or from Companies, Firms orother Parties covered in the register maintained undersection 301 of the Companies Act, 1956, according tothe information and explanations given to us :-

(a) The Company has not granted any Loan toCompanies, firms or other parties covered in theregister maintained under section 301 of theCompanies Act, 1956. As the company has notgranted any loans secured or unsecured to partieslisted in the register maintained under section 301of the Companies Act, 1956, the provisions of

paragraphs 4 (iii) (b), (c) and (d) of the Companies(Auditor’s Report) Order, 2003 are therefore, notapplicable.

(e) The company has/had taken Unsecured Loan fromtwo parties covered in the register maintained undersection 301 of the Companies Act, 1956. Themaximum amount involved during the year was` 5400 Lac and the year end balance of loan takenfrom such party was ` 5400 Lac.

(f) the terms and conditions of such Unsecured Loansare, in our opinion, prima facie not prejudicial to theinterest of the Company.

(g) The company is not regular in the payment ofprincipal and interest on Unsecured Loan.

(iv) In our opinion and according to the information andexplanations given to us, there are adequate internalcontrol procedures commensurate with the size of theCompany and the nature of its business with regard topurchases of inventory, fixed assets and with regard tothe sale of goods and services. During the course of ouraudit, we have not observed any continuing failure tocorrect major weaknesses in internal control system ofthe Company.

(v) In respect of transactions entered in the registermaintained in pursuance of section 301 of the CompaniesAct, 1956 :

(a) According to the information and explanations givento us, we are of the opinion that the particulars of allcontracts or arrangements that need to be enteredinto the register maintained under section 301 ofthe Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information andexplanations given to us, the transactions made inpursuance of contracts or arrangements enteredin the register maintained under section 301 of theCompanies Act, 1956 and exceeding the value ofrupees five lacs in respect of any party during theyear have been made at prices which arereasonable having regard to prevailing market priceat the relevant time.

(vi) In our opinion and according to the information andexplanations given to us, the Company has not acceptedany deposits within the provisions of sections 58A and58AA and other relevant provisions of the CompaniesAct, 1956. Accordingly paragraph 4(vi) of the Companies(Auditor’s Report) Order, 2003 is not applicable.

(vii) In our opinion, the Company has an adequate internalaudit system commensurate with the size and the natureof its business.

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(viii) We have broadly reviewed the books of accountmaintained by the Company, pursuant to the rules madeby the Central Government, for maintenance of costrecords under section 209 (1)(d) of the CompaniesAct,1956 and we are of the opinion that prima-facie theprescribed accounts and records have been maintained.

(ix) According to the information and explanations given tous, in respect of statutory and other dues :

(a) The Company is regular in depositing withappropriate authorities undisputed statutory duesincluding provident fund, investor educationprotection fund, employees state insurance, incometax, sales tax, wealth tax, service tax, custom duty,excise duty, cess and other material statutory duesapplicable to it.

(b) According to the information and explanations givento us, no undisputed amounts payable in respect ofincome tax, sales tax, service tax, customs dutyand excise duty were in arrears as at 31st March,2014 for a period of more than six months from thedate they become payable.

(c) According to the records of the Company, incometax, trade tax, wealth tax, service tax, custom duty,excise duty and cess which have not beendeposited on account of any dispute, are asfollows :-

Name Nature Amount Forum where

of of (`) Dispute

Statute Dues is Pending

Trade Tax Act Trade Tax 42,469.00 Trade Tax

Tribunal

(x) The company’s accumulated losses at the end of thefinancial year are more than its net worth. The companyhas incurred Cash Losses during the financial yearcovered by our audit and the immediately precedingfinancial year.

(xi) In our opinion and according to information andexplanations given to us, the company has not defaultedin repayment of dues to a Bank.

(xii) As explained to us, the Company has not granted any

loans or advances on the basis of security by way ofpledge of shares, debentures or any other securities.

(xiii) In our opinion, the Company is not a Chit Fund or a Nidhi/Mutual benefit Fund/Society. Therefore, the provisionsof clause 4 (xiii) of the Companies (Auditor’s Report)Order, 2003 are not applicable to the Company.

(xiv) In our opinion and according to the information andexplanations given to us, the company has maintainedproper records of transactions and contracts ofinvestment in Shares and timely entries have been madetherein. All the investments have been held by theCompany in its own name.

(xv) According to the information and explanations given tous, the company has not given any Guarantee for Loanstaken by others from Banks or Financial Institutions.

(xvi) In our opinion the unsecured Term Loan has been appliedfor the purposes for which it was raised.

(xvii)According to the information and explanations given tous and on an overall examination of the Balance Sheet ofthe company, we report that no funds raised on shortterm basis have been used for long term investments.

(xviii) According to the information and explanations given tous, the Company has not made any preferential allotmentof shares to parties and companies covered in theregister maintained under section 301 of the CompaniesAct, 1956 during the year.

(xix) As the company has no debenture outstanding at anytime during the year, the provisions of clause 4(xix) ofCompanies (Auditor’s Report ) Order, 2003 are,therefore, not applicable to the Company.

(xx) The Company has not raised any money by Public issueduring the year.

(xxi) According to the information and explanations given tous, no fraud on or by the Company has been noticed orreported during the course of our audit.

For P. L. TANDON & CO.

Chartered AccountantsFirm Reg. No. 000186C

RAJENDRA GUPTAPlace : Kanpur PartnerDated : 29.05.2014 Membership No. 073250

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BALANCE SHEETAS AT 31ST MARCH, 2014

As at As at

Note No. 31.3.2014 31.3.2013(`)(`)(`)(`)(`) (`)

I. EQUITY AND LIABILITIES(1) Shareholders’ Funds

(a) Share Capital 1 23,73,49,500 23,73,49,500(b) Reserves & Surplus 2 83,14,08,224 8,05,95,006

1,06,87,57,724 31,79,44,506(2) Non Current Liabilities

(a) Long Term Borrowings 3 35,14,28,571 44,00,00,000(b) Other Long Term Liabilities 4 2,40,939 2,40,939(c) Long Term Provisions 5 2,89,31,767 2,74,95,000

38,06,01,277 46,77,35,939(3) Current Liabilities

(a) Short Term Borrowings 6 45,00,00,000 1,25,00,64,979(b) Trade Payables 7 6,56,72,174 8,12,75,140(c) Other Current Liabilities 8 46,92,80,493 17,80,04,833(d) Short Term Provisions 9 55,05,000 53,43,000

99,04,57,667 1,51,46,87,952

2,43,98,16,668 2,30,03,68,397II. ASSETS

(1) Non Current Assets(a) Fixed Assets 10

(i) Tangible Assets 61,46,29,019 45,34,01,441(ii) Intangible Assets 35,72,482 –(iii) Capital Work-In-Progress – 7,97,69,531

(b) Non Current Investments 11 9,12,255 9,12,255(c) Long Term Loans and Advances 12 95,73,778 3,99,75,552

62,86,87,534 57,40,58,779(2) Current Assets

(a) Inventories 13 1,54,72,53,098 1,53,06,92,808(b) Trade Receivables 14 9,26,04,131 9,67,31,235(c) Cash and Cash Equivalent 15 13,67,67,525 5,82,22,234(d) Short Term Loans and Advances 16 3,10,66,361 3,51,13,611(e) Other Current Assets 17 34,38,019 55,49,730

1,81,11,29,134 1,72,63,09,618

2,43,98,16,668 2,30,03,68,397Significant Accounting Policies & Notes on 1-40Financial Statements

As per our Report attached

For P. L. TANDON & CO.,Chartered Accountants GAUR HARI SINGHANIA YADUPATI SINGHANIARAJENDRA GUPTA Managing Director K. B. AGARWAL DirectorsPartner J. N. GUPTAPlace : Kanpur S. K. KEDIADated : 29th May, 2014 CFO & Company Secretary

21

PROFIT & LOSS STATEMENTFOR THE YEAR ENDED 31ST MARCH, 2014

Year Ended Year Ended

Note No. 31.3.2014 31.3.2013 (`) (`) (`) (`) (`) (`)

Revenue from operations 18 51,20,09,703 39,98,85,598

Other Income 19 13,10,02,664 4,95,64,019

Total Revenue 64,30,12,367 44,94,49,617

Expenses

Cost of Materials Consumed 20 32,60,94,189 32,44,98,446

Purchases of Stock-In-Trade 1,90,34,488 1,36,15,952

Changes in Inventories of Finished Goods,

Work-In-Progress and Stock In Trade 21 (4,50,33,122) (2,05,33,444)

Employee Benefits Expense 22 12,88,45,172 12,17,49,841

Finance Costs 23 11,84,50,016 5,12,00,619

Depreciation and Amortization Expense 2,76,37,788 1,44,13,888

Other Expenses 24 26,56,39,827 24,99,87,878

Total Expenses 84,06,68,358 75,49,33,180

Profit/(Loss) Before Exceptional and

Extraordinary Items and Tax (19,76,55,991) (30,54,83,563)

Exceptional Items 25 (94,85,35,643) –

Profit/(Loss) Before Tax 75,08,79,652 (30,54,83,563)

Tax Expenses

Tax Adjustment for Earlier Year 66,434 –

Profit/(Loss) for the Year 75,08,13,218 (30,54,83,563)

Earning per Equity Share of face value of

Rs. 10/- each

Basic & Diluted. 31.84 (12.96)

Significant Accounting Policies &

Notes on Financial Statements 1-40

As per our Report attached

For P. L. TANDON & CO.,Chartered Accountants GAUR HARI SINGHANIA YADUPATI SINGHANIARAJENDRA GUPTA Managing Director K. B. AGARWAL DirectorsPartner J. N. GUPTAPlace : Kanpur S. K. KEDIADated : 29th May, 2014 CFO & Company Secretary

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CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2014

2013-2014 2012-2013(`) (`)

A. Cash Flow from Operating ActivitiesProfit/(Loss) before Tax 75,08,79,652 (30,54,83,563)Adjustments for:Depreciation 2,76,37,788 1,44,13,888Profit on Sale of Assets (8,00,76,435) (3,10,20,973)Loss on sale of Vehicle 2,19,124 –Interest income (37,31,219) (48,35,631)Interest expenses 11,56,41,016 4,72,46,295Investment Written Off – 74416Provision for doubtful debts excess of last year (8,67,426) –Liability Written Back (94,85,35,643) –Provision for Doubtful Debts 23,50,352 16,84,066

Operating Loss beforeWorking Capital Changes (13,64,82,791) (27,79,21,502)(Increase)/Decrease in Inventories (1,65,60

j. k. cotton limited...1 notice is hereby given that the 91st annual general meeting of j.k.cotton...

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