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Josts Engineering Company Ltd.

BSE: 505750 Sector: Engineering
NSE: N.A. ISIN Code: INE636D01017
BSE LIVE 12:01 | 14 Dec 1012.05 11.35
(1.13%)
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NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 949.00
PREVIOUS CLOSE 1000.70
VOLUME 422
52-Week high 1233.56
52-Week low 527.75
P/E
Mkt Cap.(Rs cr) 94
Buy Price 1012.00
Buy Qty 50.00
Sell Price 1035.00
Sell Qty 4.00
OPEN 949.00
CLOSE 1000.70
VOLUME 422
52-Week high 1233.56
52-Week low 527.75
P/E
Mkt Cap.(Rs cr) 94
Buy Price 1012.00
Buy Qty 50.00
Sell Price 1035.00
Sell Qty 4.00

Josts Engineering Company Ltd. (JOSTSENGGCO) - Director Report

Company director report

The Directors present herewith Annual Report together with the Audited FinancialStatements for the year ended 31st March 2017.

Year ended 31-3-2017 Previous Year ended 31-3-2016
1. Financial Results Rs. Lakhs Rs. Lakhs
Profit/(Loss) before tax (199.41) (194.60)
Less: Provision for Income-tax - -
Profit/(Loss) after tax (199.41) (194.60)
Balance brought forward from previous year 892.50 1096.30
Amount available for appropriation 693.09 901.70
Less: Appropriations
Proposed dividend - 7.65
Tax on proposed dividend - 1.55
General Reserve - -
Balance carried forward 693.09 892.50

According to Companies (Accounting Standards) Amendment Rules 2016 theCompany has not appropriated proposed dividend of Rs. 7.65 lakhs and tax thereon of Rs.1.60 lakhs from the statement of profit and loss for the year ended 31st March 2017.Accordingly the proposed dividend and tax thereon are not recognized as liability at theyear end.

2. Dividend

The Directors are pleased to recommend a dividend of Re.1/- (10%) per share for thefinancial year ended 31st March 2017.

3. Operations

Income for the year under review was Rs. 8335.75 Lakhs as against Rs. 8207.18 Lakhs inthe previous year. The loss before tax was Rs. 199.41 Lakhs as against loss Rs. 194.60Lakhs in the previous year. Generally business should continue to progress. Barringunforeseen circumstances there should be improved results in the current year.

4. The Company has incorporated in the previous year an entity in Ajman Free TradeZone UAE. This entity has not commenced any business activities to date. The Directorsare evaluating the possibility of winding up the said entity.

5. Subsidiary Company

Subsequent to the end of Financial Year 2016-17 the Company has acquired 60% (6000equity shares of Rs. 10/- each) of MHE Rentals Private Limited (MHE Rentals). As a resultMHE Rentals has become a subsidiary Company. MHE Rentals is engaged in material handlingrental business.

6. Particulars of Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo

Information pursuant to Section 134(3)(m) of the Companies Act 2013 read with Rule8(3) of the Companies (Accounts) Rules 2014 is annexed as Annexure "A" to theDirectors' Report.

7. Directors' Responsibility Statement

Pursuant to Section 134 (5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge state and confirm :

(i) that in the preparation of the Annual Accounts for the year ended 31st March 2017the applicable accounting standards have been followed along with proper explanationrelating to material departures if any ;

(ii) and applied them consistently and made judgements and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at 31st March 2017 and of the loss of the Company for the year ended on thatdate ;

(iii) that the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities ;

(iv) the annual accounts have been prepared on a going concern basis ;

(v) that the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively ; and

(vi) that the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

8. Particulars of employees

The information pursuant to Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is not given as no employee employed throughout thefinancial year 2016-17 was in receipt of the remuneration of Rs.60 lakhs or more and noemployee employed for the part of the financial year 2016-17 was in receipt ofremuneration of Rs.5 lakhs or more per month.

9. Extract of Annual Return

The extract of the Annual Return in Form MGT-9 as provided under sub-section (3) ofSection 92 of the Companies Act 2013 is annexed as Annexure "B" to theDirectors' Report.

10. Deposits

During the year under review the Company has not accepted any deposits within themeaning of Section 73 of the Companies Act 2013 read with the Companies (Acceptance ofDeposits) Rules 2014.

11. Particulars of Loans Guarantees or Investments

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.

12. Code of Conduct (Code) for Board Members and Senior Management

The Company has adopted voluntarily the Code for enhancing further ethical andtransparent process in managing the assets and affairs of the Company. This Code has beenposted on the website of the Company (www.josts.com).

13. Vigil Mechanism/Whistle Blower Policy

In compliance with the provisions of Section 177 of the Companies Act 2013 and Rule 7of the Companies (Meetings of Board and its powers) Rules 2014 the Company hasestablished Vigil Mechanism/Whistle Blower Policy to encourage Directors and Employees ofthe Company to bring to the attention of any of the following persons i.e. the Chairmanof the Audit Committee Company Secretary and HR Head the instances of unethicalbehaviour actual or suspected incidence of fraud or violation of the Code of Conduct forDirectors and Senior Management (Code) that could adversely impact the Company'soperations business performance or reputation. The Policy and the Code has been posted onthe website of the Company (www.josts.com).

14. Risk Management Policy

The Company has developed and implemented a Risk Management Policy in compliance withthe provisions of Section 134 (3) (n) of the Companies Act 2013.

Risk Management is an organisation-wide approach towards identification assessmentcommunication and management of risk in a cost-effective manner - a holistic approach tomanaging risk. Generally this involves reviewing operations of the organisationidentifying potential threats to the organisation and the likelihood of their occurrenceand then making appropriate actions to address the most likely threats.

The Policy provides for constitution of Risk Management Core Group (RMCG) consisting ofFunctional/Departmental/Productline heads and headed by Chief Executive Officer (CEO) ofthe Company.

The RMCG shall be collectively responsible for developing the Company's Risk Managementprinciples and Risk Management expectations in addition to those specificresponsibilities as outlined in the Policy. The RMCG will provide updates to the AuditCommittee and Board of Directors of the Company on key risks faced by the Company if anyand the relevant mitigant actions.

The major risks such as Operational Risk Financial Risk External Environment andStrategic Risk have been identified and the Risk Management process has been formulated.

The Risk Management Policy has been posted on the website of the Company(www.josts.com)

15. Nomination and Remuneration Policy

Pursuant to the provisions of Section 178 of the Companies Act 2013 the Nominationand Remuneration Committee has framed Nomination and Remuneration Policy (the Policy). ThePolicy applies to the Board of Directors Key Managerial Personnel and the SeniorManagement Personnel. The Policy lays down criteria for selection and appointment of BoardMembers Key Managerial Personnel and Senior Management Personnel and also lays down aframework in relation to remuneration of the aforesaid persons.

The Nomination and Remuneration Policy has been posted on the website of the Company(www.josts.com)

16. Prevention of Sexual Harassment

The Company has constituted an "Internal Complaints Committee" in compliancewith the Sexual Harassment of Women at work place (Prevention Prohibition and Redressal)Act 2013.

During the year under review no complaints of Sexual Harassment were reported to theBoard.

17. In compliance with SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Board has approved the following policies namely Policy onPreservation of Documents (Regulation 9) Policy on Determination of Materiality of Events(Regulation 30 (4) (ii)) and Archival Policy on Disclosure hosted on website of theCompany (Regulation 30 (8)) duly reviewed by the Audit Committee.

All the aforesaid policies have been posted on the website of the Company(www.josts.com).

18. Committees of the Board

The Board of Directors have constituted the following Committees in compliance with theCompanies Act 2013. These Committees deal with specific areas and activities whichconcern the Company.

(i) Audit Committee Mr. F. K. Banatwalla - Chairman
Mr. Marco Wadia - Member
Mr. Shailesh Sheth - Member
Mr. Jai Prakash Agarwal - Member
(ii) Nomination and Remuneration Mr. Shailesh Sheth - Chairman
Committee Mr. Marco Wadia - Member
Mr. F. K. Banatwalla - Member
(iii) Share Transfer and Stakeholders Mr. Shailesh Sheth - Chairman
Relationship Committee Mr. F. K. Banatwalla - Member
Mr. Jai Prakash Agarwal - Member

19. Key Managerial Personnel

In compliance with the provisions of Section 203 of the Companies Act 2013 the Boardof Directors of the Company have appointed the following Key Managerial Personnel :

Mr. R. P. Pargaonkar - Chief Executive Officer
Mr. C. B. Sagvekar - Vice President and Company Secretary
Mr. M. G. Naik - Chief Financial Officer

20. Independent Directors' Meeting

During the year under review the Independent Directors in their separate Meeting heldon 13th February 2017 have inter-alia reviewed the performance of non-independentdirectors and the Board as a whole the performance of the Chairperson of the Company andassessed the quality quantity and timeliness of flow of information between themanagement and the Board so as to enable the Board to effectively and reasonably performtheir duties.

21. Meetings of the Board

During the year 6 Board Meetings and 7 Committee Meetings were convened and held.

22. Performance Evaluation

As per the Performance Evaluation Policy of the Company read with the provisions ofthe Companies Act 2013 the Board of Directors shall evaluate the performance of thefollowing :

i) its own performance as a body;

ii) each Independent Director and Non-Independent Director ; and

iii) Committees of the Board.

As per the performance evaluation process the Board evaluated its own performance aswell as that of individual directors and the following Committees of the Board :

i) Audit Committee

ii) Nomination and Remuneration Committee ; and

iii) Share Transfer and Stakeholders Relationship Committee and found the same to besatisfactory.

23. Related Party Transactions

All related party transactions that were entered into during the financial year2016-17 were on arm's length basis and in the ordinary course of business. Furtherduring the Financial Year 2016-17 no material related party transactions were enteredinto by the Company. Accordingly the disclosure in Form AOC-2 is not applicable. Therelated party transactions have been disclosed under Note 38 to the Financial Statements.

All related party transactions were placed periodically before the Audit Committee asalso the Board for their Approval.

24. Auditors

(i) Statutory Auditors

M/s. Sorab S. Engineer & Co. Chartered Accountants (Firm Registration No.110417W)the statutory Auditors of the Company are retiring at the conclusion of this 110th AnnualGeneral Meeting. They have completed consecutive tenure of ten years (including transitionperiod) as provided under sub-section (2) of Section 139 of the Companies Act 2013 (the"Act").

In view of the above and on the recommendation of the Audit Committee the Board ofDirectors have proposed the appointment of M/s. Singhi& Co. Chartered Accountants(Firm Registration No.302049E) as statutory Auditors of the Company for a period of 5years commencing from the conclusion of 110th Annual General Meeting till the conclusionof 115th Annual General Meeting subject to ratification by members every year as may beapplicable.

M/s. Singhi & Co. Chartered Accountants have confirmed that their appointment ifmade would be in accordance with Section 139 of the Act read with the Companies (Auditand Auditors) Rules 2014. They have further confirmed that they satisfy criteriaprescribed under Section 141 of the Act.

(ii) Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. Sandeep Dar & Co. Company Secretaries to undertake the SecretarialAudit of the Company. The Secretarial Audit Report is annexed as Annexure "C" tothe Directors' Report. The observations made by the Secretarial Auditor in his report areself-explanatory and therefore do not call for any further comments.

25. Disclosure pursuant to Section 197 (12) of the Companies Act 2013 and Rule 5(1) ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014

Disclosure with respect to the remuneration of Directors Key Managerial Personnel andEmployees as required under Section 197 (12) of the Companies Act 2013 and Rule 5(1) ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexedas Annexure "D" to the Directors' Report.

26. Internal Control System and Adequacy

The Company has an adequate internal control system commensurate with its size andnature of its business. The Internal Audit is entrusted to Internal Auditors namely M/s.Uday & Uday Chartered Accountants who submit their report periodically to the AuditCommittee. Significant audit observations and corrective actions taken by the Managementare presented to the Audit Committee

27. Significant and Material Orders passed by the Regulators/Courts/Tribunals

There are no significant and material orders passed by the Regulators/Courts/Tribunalsthat would impact the going concern status of the Company and its future operations.However members' attention is drawn to the statement on ‘contingent liabilities' inthe notes forming part of the Financial Statements.

28. Proposed Right Issue

The Board of Directors of the Company at their meeting held on 13th February 2017have approved raising funds upto Rs. 10 crores by way of issue of Equity Shares on rightbasis. The Committee of Directors has been appointed to determine the terms and conditionsof Right Issue including the Rights entitlement ratio the issue price issue size timingof the issue and other matters in consultation with Lead Managers to the Right Issue. Theletter of offer will be issued after obtaining necessary approvals of the concernedauthorities.

29. Directors

(i) Mrs. Shikha Jain (DIN 06778623) was appointed as an Additional Director of theCompany with effect from 12th August 2016 who holds office upto the date of ensuingAnnual General Meeting in terms of Section 161 of the Companies Act 2013 and Article 109of the Articles of Association of the Company. The Company has received a notice inwriting under Section 160 of the Companies Act 2013 alongwith requisite deposit from amember signifying his intention to propose the appointment of Mrs. Shikha Jain as Directorof the Company.

(ii) In accordance with Article 122 of the Articles of Association of the Company Mr.Jai Prakash Agarwal (DIN 00242232) retire by rotation at the ensuing Annual GeneralMeeting and being eligible offers himself for reappointment.

(iii) All the Independent Directors have given declaration that they meet the criteriaof Independence as laid down under Section 149 (6) of the Companies Act 2013.

(iv) Mr. B. H. Reporter ex-Chairman of the Company passed away on 28th February2017. The Board has placed on the record its appreciation of the services rendered by Mr.B. H. Reporter as Director/Chairman of the Company during the period 1953-2017.

30. Indian Accounting Standards (IND-AS)

The Ministry of Corporate affairs (MCA) vide its notification published in the officialgazette dated 16th February 2015 has notified the Company's (Indian AccountingStandards) Rules 2015 (IND-AS). In pursuance of this notification the Company isrequired to adopt IND-AS for the accounting period beginning from 1st April 2017.

On behalf of the Board of Directors
Jai Prakash Agarwal
Mumbai 15th May 2017. Chairman

Annexure "A" to the Directors' Report

Conservation of Energy Technology Absorption and Foreign Exchange Earnings and OutgoPursuant to Provisions of Section 134 of the Companies Act 2013 read with Rule 8 (3) ofCompanies (Accounts) Rules 2014

(A) Conservation of Energy

(i) The steps taken or impact on conservation of energy - Regular monitoring of allequipments and devices which consume electricity continues to be in place in the factory.Water consumption is also monitored as regular function of maintenance Dept. though ourtype of business does not consume much water.

(ii) The steps taken by the company for utilizing alternate sources of energy - Alllighting fixtures have been changed to LED on shop floor as well as offices.

(iii) The capital investment on energy conservation equipments - As reported earliergenerator air conditioners lighting devices have all been replaced by more energyefficient ones.

(B) Technology Absorption

(i) The efforts made towards technology absorption - This is on going process for allour manufactured products.

(ii) The benefits derived like product improvement cost reduction product developmentor import substitution - Product quality improvements is at the heart of Technologyupgrades.

(iii) In the case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year) - Not Applicable.

(a) The details of technology imported - Not Applicable
(b) The year of import - Not Applicable
(c) Whether the technology been fully absorbed - Not Applicable
(d) If not fully absorbed areas where absorption has not taken place and the reasons thereof - Not Applicable

(iv) The expenditure incurred on Research and Development - We spend around one percentof revenues on R&D.

(C) Foreign Exchange Earnings and Outgo

The Foreign Exchange earned in terms of actual inflows during the year and the ForeignExchange outgo during the year in terms of actual outflows.

This information is provided in Notes to the Financial statements under Note No. 35 and36.

On behalf of the Board of Directors
Jai Prakash Agarwal
Mumbai 15th May 2017. Chairman

Annexure "D" to the Directors' Report

Disclosure pursuant to Section 197 (12) of the Companies Act 2013 and Rule 5 ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is providedbelow :

(i) The ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the year 2016-17 :

Name of the Directors Nature of Directorship Ratio
Mr. Jai Prakash Agarwal Non-Executive Director 0.54:1
Mr. Marco Wadia Non-Executive Independent Director 0.57:1
Mr. Shailesh Sheth Non-Executive Independent Director 0.57:1
Mr. F. K. Banatwalla Non-Executive Independent Director 0.50:1
Mr. Vishal Jain Non-Executive Director 0.29:1
Mrs. Shikha Jain *

(Appointment w.e.f. 12/08/2016)

Non-Executive Director -

Notes :

1. Directors' Remuneration includes sitting fees for attending board/committeemeetings.

2. * Since this information is for part of the year the same is not comparable.

3. Employees for the purpose above includes all employees excluding employees governedunder collective bargaining.

4. For computing median remuneration the employees who have worked for the completefinancial year 2016-17 have been considered.

(ii) The percentage increase in remuneration of each Director Chief Financial OfficerChief Executive Officer Company Secretary in the financial year :

Name Designation Percentage Increase in remuneration
Mr. Jai Prakash Agarwal Non-Executive Director 131.58
Mr. Marco Wadia Non-Executive Independent Director 130.00
Mr. Shailesh Sheth Non-Executive Independent Director 206.67
Mr. F. K. Banatwalla Non-Executive Independent Director 78.26
Mr. Vishal Jain Non-Executive Director 100.00
Mrs. Shikha Jain * Non-Executive Director -
Mr. R. P Pargaonkar Chief Executive Officer 7.96
Mr. C. B. Sagvekar Company Secretary 18.04
Mr. M. G. Naik Chief Financial Officer -

Notes :

1. The increase in remuneration of the directors is mainly due to increase in sittingfees paid during the financial year 2016-17.

2. * Since Mrs. Shikha Jain was appointed as a Director w.e.f. 12/08/2016 andthe remuneration paid to her was for part of the year the percentage increase in herremuneration is not applicable.

(iii) The percentage increase in the median remuneration of employees in the financialyear :

7.72 %

(iv) The number of permanent employees on the rolls of Company :

184 as on 31st March 2017.

(v) The explanation on the relationship between average increase in remuneration andCompany performance :

The average increase in remuneration of the employees including managerial personnelwas 11.06%. There is no direct relationship between average increase in the remunerationof the employees with year to year financial performance of the Company. However theincrease in remuneration is considered taking into account the individual performance visa vis Company's annual plans retention and motivation of the best talent that suits therequirement of the Company criticality of the roles and responsibility of the individualconcerned and the current compensation trends in the market.

(vi) Comparison of the remuneration of the key managerial personnel against theperformance of the Company :

There is no direct relationship of remuneration of the Key Managerial Personnel withyear to year financial performance of the Company.

(vii) (a) Variation in the market capitalisation of the Company price earnings ratioas at the closing

date of the current financial year and previous financial year :

Particulars 31st March 2017 31st March 2016 % Change
Closing Market price per share (BSE) (Rs.) (Rs.)
620.00 514.00 20.62
Market Capitalisation (Rs. Crores) (Rs. Crores)
47.41 39.30 20.64
Price Earnings Ratio -26.08 -25.45 -2.47

(b) Percentage increase over decrease in the market quotations of the shares of theCompany in comparison to the rate at which the Company came out with the last public offer:

Particulars 31st March 2017 Rights Issue on 1st March 1993 % Change
Market Price per share (BSE) Rs. 620.00 Rs. 40.00 * 1450.00

* The Company made a Right Issue on 1-3-1993 at a price of Rs. 40/- (includingpremium of Rs. 30/- per share).

(viii) Average percentage increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentageincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration :

The average percentage increase in the financial year 2016-17 in the salaries ofemployees other than Managerial Personnel was 11.33%. The percentage increase in themanagerial remuneration in the last year was 10.69% which was due to annual increments.For computing average percentage increase in the salaries of the employees the employeeswho have worked for the complete financial year 2015-16 and 2016-17 have been consideredto make the figures comparable.

(ix) Comparison of the each remuneration of the Key Managerial Personnel against theperformance of the Company :

There is no direct relationship between the remuneration of the Key ManagerialPersonnel and year to year financial performance of the Company.

(x) The key parameters for any variable component of remuneration availed by theDirectors :

All the Directors of the Company are Non-Executive Directors and the variable componentof their remuneration includes profit related commission if any.

(xi) The ratio of the remuneration of the highest paid Director to that of theEmployees who are not Directors but receive remuneration in excess of the highest paidDirector during the year :

All the Directors are non-executive Directors who are paid remuneration by way ofsitting fees. During the financial year 2016-17 the remuneration of most of the employeesis in excess of the remuneration of the highest paid Director.

(xii) Affirmation that the remuneration is as per the Remuneration Policy of theCompany :

The remuneration is as per the Remuneration Policy of the Company.

On behalf of the Board of Directors
Jai Prakash Agarwal
Mumbai 15th May 2017. Chairman

General Information to Shareholders

Attendance of Directors at Board Meetings Committee Meetings and last Annual GeneralMeeting

Name of the Director

Attendance at Meetings during 2016-17

Board Meetings Committee Meetings Last AGM
Mr. Jai Prakash Agarwal 6 6 Yes
Mr. Marco Wadia 6 7 Yes
Mr. Shailesh Sheth 6 7 Yes
Mr. F. K. Banatwalla 5 6 Yes
Mr. Vishal Jain 6 - Yes
Mrs. Shikha Jain 3 - No

Sitting Fees to Directors :

The following directors have been paid sitting fee during the year 2016-17.

Name of the Director Sitting fees paid
(Rs.)
Mr. Jai Prakash Agarwal 220000
Mr. Marco Wadia 230000
Mr. Shailesh Sheth 230000
Mr. F. K. Banatwalla 205000
Mr. Vishal Jain 120000
Mrs. Shikha Jain 65000

Listing :

The Company's Equity shares have been listed on Bombay Stock Exchange.

Shareholding Pattern as on 31st March 2017.

A. Shareholding of Promoter and Promoter group No. of Shares %
(i) Indian 370890 48.50
(ii) Foreign (NRI) - -
Sub-Total 370890 48.50
B. Public Shareholding
(i) Financial Institutions/Banks 595 0.08
(ii) Bodies Corporate 6913 0.90
(iii) Individuals 380193 49.73
(iv) Individuals (NRI) 6059 0.79
Sub-Total 393760 51.50
GRAND TOTAL 764650 100.00

Shares held in physical/demat mode as on 31st March 2017.

Demat Physical Total
No. of Shares 725331 39319 764650
% 94.86 5.14 100.00
No. of Folios 1375 291 1666