The Board of Directors (Board) are pleased to present the Twenty First Annual Report ofyour Company together with the Standalone and Consolidated Audited Financial Statementsfor the year ended 31st March 2020.
FINANCIAL RESULTS ( in lacs)
| ||Standalone ||Consolidated |
|Particulars ||Financial Year ended 31st March 2020 ||Financial Year ended 31st March 2019 ||Financial Year ended 31st March 2020 ||Financial Year ended 31st March 2019 |
|Revenue from Operations ||291230.22 ||307746.76 ||291230.22 ||307746.76 |
|Other Income ||5534.93 ||3996.22 ||5534.93 ||3996.22 |
|Total Revenue ||296765.15 ||311742.98 ||296765.15 ||311742.98 |
|Profit/Loss before Finance Cost Depreciation and Amortization expenses and tax ||9100.28 ||5951.68 ||9099.93 ||5951.36 |
|Less: Finance Costs ||10278.45 ||11158.59 ||10278.45 ||11158.59 |
|Less: Depreciation and Amortization Expenses ||9678.63 ||10160.80 ||9678.63 ||10160.80 |
|Profit/(Loss) before exceptional items and Tax ||(10856.80) ||(15367.71) ||(10857.15) ||(15368.03) |
|Exceptional items ||(576.79) || ||(576.79) || |
|Profit/(Loss) before Tax ||(11433.59) ||(15367.71) ||(11433.94) ||(15368.03) |
|Less : Tax expense || || || || |
|Current Tax || || || || |
|Deferred Tax || || || || |
|Profit/Loss after tax ||(11433.59) ||(15367.71) ||(11433.94) ||(15368.03) |
|Other Comprehensive Income ||32.30 ||32.28 ||32.30 ||32.28 |
|Total Comprehensive Income ||(11401.29) ||(15335.43) ||(11401.64) ||(15335.75) |
|Earnings per share (Nominal value || || || || |
|per share Rs. 10/-) Basic and Diluted ||(11.07) ||(15.94) ||(11.07) ||(15.94) |
FINANCIAL PERFORMACE AND STATE OF COMPANY'S AFFAIRS
Your company has been under financial stress since 2009 due to various externalfactors beyond the control of the Company and its management. The Standalone Total Revenueof the Company (comprising of sales and other income) for the financial year under reviewwas Rs. 296765.15 lacs as compared to Rs. 311742.98 lacs during the previousfinancial year. The Consolidated Total Revenue of the Company (comprising of sales andother income) for the financial year under review was Rs. 296765.15 lacs ascompared to Rs. 311742.98 lacs during the previous financial year. FY 2019-20 was a yearof two halves for the steel industry. The first half witnessed a weakened demand andsubdued pricing environment. The second half saw improving business and consumer sentimentwith higher demand and pricing which was deflated by the impact of Corona virus(COVID-19) pandemic towards the end of March 2020. The outbreak of Corona virus(COVID-19) pandemic globally and in India is causing a significant disruption and slowdownof economic activity. Measures taken to contain the spread of the virus including travelbans quarantines social distancing and closures of non-essential services and theuncertainty associated with the lifting or re-imposition of these restrictions havefurther aggravated the business environment. Following the COVID-19 outbreak in India thegovernment announced the first phase of the nationwide lockdown for 21 days from March 252020 to contain the spread of the infection. As a result the company had to temporarilysuspend operations at its manufacturing facilities towards the end of Directors' Report(Contd.) March 2020. However pursuant to the guidelines and directives issued byvarious statutory authorities and necessary permission received the Company resumedoperations at its manufacturing facilities with very limited manpower in May 2020. TheCOVID-19 impact along with the mass migration of people has resulted in non-availabilityof skilled and unskilled workforce. This unprecedented situation has also its adverseeffect on the operating cash flow with negligible revenue and committed costs beingincurred like payment to service providers payment to staff/employees owing to the socialresponsibility of a Company. The current low demand for steel and supply chain disruptionsituation does not permit the Company for the full ramp-up. Though the demand is expectedto remain subdued in the near term. Your company is committed to its vision to emerge asan efficient producer of iron and steel products. Your company is focused on increasingcapacity utilisation of all units reducing cost and improving operational efficiency.
Your Company has an integrated steel plant and manufactures different products inSteel sector. Your Company's cumulative product wise actual production details are givenhereunder: The actual production of Sponge Iron was 242489 MT during the year 2019-20 ascompared to 233784 MT during the year 2018-19. For Pig Iron the actual production was447329 MT and 390925 during the year 2019-20 and 2018-19 respectively. The actualproduction of Steel Bars/Rods was 147593 MT during the year 2019-20 as compared to149595 MT during the year 2018-19. For Billet/MS Ingot the actual production was 149815MT and 156845 MT during the year 2019-20 and 2018-19 respectively. The actual productionof Ferro Alloys was 90756 MT during the year 2019-20 as compared to 71131 MT during theyear 2018-19 (Ferro Alloy Included third party Conversion production of 31400 MT (13475MT) HC Ferro Chrome). In case of Ductile Iron Pipe the actual production was 141242 MTand 121176 MT during the year 2019-20 and 2018-19 respectively. For Sinter the actualproduction was 525721 MT and 513471 MT during the year 2019-20 and 2018-19 respectively.The actual production of Coke was 327969 MT during the year 2019-20 as compared to318248 MT during the year 2018-19. SUBSIDIARIES AND JOINT VENTURE COMPANIESSubsidiaries
As on the date of reporting your Company has two wholly owned subsidiaries namelyJai Balaji Steels (Purulia) Limited & Jai Balaji Energy (Purulia) Limited. n
Jai Balaji Energy (Purulia) Limited
A Wholly Owned Subsidiary of your Company since 1st November 2010. It did notcommence commercial production as on the date of reporting but has incurred miscellaneousexpenditure of Rs.16700/- during the year under review. The net loss for the year 2019-20is Rs. 16700/-. n Jai Balaji Steels (Purulia) Limited
A Wholly Owned Subsidiary of your Company since 1st November 2010. It did notcommence commercial production as on the date of reporting but has incurred miscellaneousexpenditure of Rs.17149/- during the year under review. The net loss for the year 2019-20is Rs. 17149/-.
Your Company continues to have two joint venture (JV) companies namely Andal EastCoal Company Private Limited and Rohne Coal Company Private Limited as on 31st March2020. n Andal East Coal Company Private Limited
Andal East Coal Company Private Limited' which is under liquidation was formed in2009-10 in which your Company along with Bhushan Steel Limited and Rashmi Cement Limitedare venture partners. The said Joint Venture Company was formed in terms of allocation ofAndal Non-Coking Coal Block in the State of West Bengal by Ministry of Coal Government ofIndia. n
Rohne Coal Company Private Limited
Rohne Coal Company Private Limited' was formed in 2008-09 in which your Companyalong with JSW Steel Limited & Bhushan Power & Steel Limited are venture partners.The said Joint Venture Company was formed in terms of allocation of Rohne Coking CoalBlock in the State of Jharkhand by Ministry of Coal Government of India. None of theCompanies have become or ceased to be the Joint Ventures and Associate Company during theyear under review.
In view of losses incurred by your company your directors have not recommended anydividend for the financial year ended 31st March 2020.
TRANSFER TO RESERVES
In view of losses incurred by your Company during the year no amount has been proposedto be carried to any reserves for the year ended 31st March 2020.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
No material changes and commitments have occurred after the close of the year tillthe date of this report which may affect the financial position of the Company.
SHARE CAPITAL AND PREFERENTIAL ISSUE
The Company's paid up share capital as at 31st March 2020 stands at Rs.1104502860. The Authorized Share Capital stands Rs. 1250000000 as at 31st March2020. During the year the Company has issued and allotted fully paid up 14071500equity shares of face value of Rs. 10/- on Preferential Allotment basis againstrestructuring of financial assistance to Edelweiss Asset Reconstruction Company Limited(EARC) on behalf of various trusts in accordance with the SEBI (ICDR) Regulations 2018pursuant to the approval of shareholders in the last Annual General Meeting held on 19thSeptember 2019.
CHANGE IN NATURE OF BUSINESS IF ANY
During the year there was no change in the nature of business of the Company or itssubsidiaries.
During the year under review your Company has not accepted any deposits from thepublic. Further no amount of deposit remained unpaid or unclaimed at the end of the yeari.e. as on 31st March 2020. Subsequently no default has been made in repayment ofdeposits or payment of interest thereon during the year.
CONSOLIDATED FINANCIAL STATEMENTS While consolidating the accounts of the Companythe financials of its joint venture companies namely Andal East Coal Company Pvt.Ltd.(AECCPL) and Rohne Coal Company Pvt. Ltd.(RCCPL) are not consolidated. The Hon'bleSupreme Court vide its Order dated 24th September 2014 has cancelled number of coalblocks allotted to various companies. These include two coal blocks under development viz.AECCPL in West Bengal and RCCPL in Jharkhand allocated to the company jointly with otherparties. The Company has prudently brought down the value of investment in joint venturecompanies to nominal value of Re. 1 per share. However the Company had submitted claimsw.r.t the cancellation of coal blocks which are still pending. Pursuant to Section 129(3)of the Companies Act 2013 and rules made therein a statement containing salient featuresof the financial statement of the subsidiaries and joint ventures of the Company isprovided in Form AOC-1 attached as "Annexure-A" to the Board's Report andother details of the subsidiaries and joint ventures are also provided in the saidAnnexure. As per the provisions of Section 136 of the Act the standalone financialstatements of the Company consolidated financial statements along with relevant documentsand separate audited accounts in respect of subsidiaries are available on the website ofthe Company viz. "www.jaibalajigroup.com". These documents are also availablefor inspection at the Registered Office of the Company during business hours.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
a. Changes in Directors and KMP
In accordance with the provisions of Section 152 of the Companies Act 2013 and theCompany's Articles of Association Shri Rajiv Jajodia (DIN: 0045192) and Shri GauravJajodia (DIN:00028560) are liable to retire by rotation at the 21st Annual GeneralMeeting and being eligible offer themselves for re-appointment. Based on therecommendations of the Nomination and Remuneration Committee the Board recommends there-appointment of Shri Rajiv Jajodia and Gaurav Jajodia as director liable to retire byrotation. Pursuant to the provisions of the Act based on the recommendation of theNomination and Remuneration Committee the Board of Directors at its meeting held on 15thSeptember 2020 has appointed Shri Bimal Kumar Choudhary (DIN : 08879262) as an AdditionalDirector of the Company who holds office upto the date of the ensuing Annual GeneralMeeting. Pursuant to the provisions of the Act based on the recommendation of theNomination and Remuneration Committee the Board of Directors at its meeting held on 15thSeptember 2020 has appointed Shri Bimal Kumar Choudhary (DIN : 08879262) as on ExecutiveDirector of the Company for a period of 3 (three) years with effect from 15th September2020 subject to the approval of the members at the ensuing Annual Report Meeting. At the20th Annual General Meeting of the Company held on 19th September 2019 the shareholdershave re-appointed Smt. Seema Chowdhury (DIN: 07158338) Smt. Swati Agarwal (DIN: 07158355)and Smt. Rakhi Bajoria (DIN:07161473) as Independent Director of the Company for a periodof 5(five) years with effect from 17th April 2020. During the year Smt. Swati Agarwal(DIN: 07158355) Independent Director of the Company has resigned with effect from 14thNovember 2019 due to pre-occupation of work and ceased to be the Director of the Company.The Board expresses its gratitude towards Smt. Swati Agarwal for her contributions to theCompany. The Board deeply appreciates her valuable dedication and support throughout hertenure in the Company. Shri Amit Kumar Majumdar was appointed as an Executive Director ofthe Company with effect from 14th August 2018 for a period of 2 years and his tenure asan Executive Director ended on 13th August 2020. Subsequently he resigned from theDirectorship of the Company w.e.f 26th August 2020 due to medical reasons. The Boardexpresses its gratitude towards Shri Amit Kumar Majumdar for his contributions to theCompany. The Board deeply appreciates his valuable dedication and support throughout hertenure in the Company. Shri Ashim Kumar Mukherjee was appointed as Independent Director onthe Board of the Company with effect from 2nd December 2015 for a period of 5(five) yearspursuant to the provisions of Section 149 of the Companies Act 2013 read with Companies(Appointment and Qualification of Directors) Rules 2014 and the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015. The Nomination and Remuneration Committeeand the Board of Directors on the basis of the report of performance evaluation ofIndependent Director has recommended re-appointment of Shri Ashim Kumar Mukherjee asIndependent Director who is more than 75 years of age for a second term of 5(five)consecutive years on the Board of the Company from 2nd December 2020. The Boardrecommends the afore-mentioned appointment(s) for approval of the members at the ensuingAGM. The brief resume and other details as required under the Regulation 36 (3) of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 of theDirector(s) seeking approval of the members for the appointment/re-appointment of the atthe ensuing Annual General Meeting have been incorporated in the notice of the TwentyFirst Annual General Meeting of the Company along with brief details about them. None ofthe directors are disqualified for being appointed as Directors as specified in Section164(2) of the Companies Act 2013 and Rule 14(1) of the Companies (Appointment andQualification of Directors) Rules 2014. In terms of the Rule 6 of the Companies(Appointment and Qualification of Directors) Rules 2014 all independent directors of theCompany have enrolled themselves on the independent directors databank and will undergothe online proficiency self-assessment test within the specified timeline unless exemptedunder the aforesaid rules. During the year there has been no change in the Key ManagerialPersonnel of the Company. Details pertaining to their remuneration have been provided inthe Extract of Annual Return annexed hereto and forming part of this Report None of thedirectors including the Whole Time Director and the CFO received any remuneration orcommission from any of the Company's subsidiaries during the previous year.
b. Statement of declaration given by independent directors
Pursuant to the provisions of Section 149 of the Act all the independent directorshave furnished the requisite declarations under Section 149(7) that each of them meet thecriteria of independence as provided in Section 149(6) of the Act along with Rules framedthere under and Regulation 16(1)(b) of the SEBI Listing Regulations. There has been nochange in the circumstances affecting their status as independent directors of theCompany.
c. Separate Meeting of Independent Directors of the Company Details of Separatemeeting of Independent Directors held in terms of Schedule IV of the Companies Act 2013and Regulation 25(3) of the Listing Regulations are given in Corporate Governance Report.
d. Performance Evaluation of the Board its Committees and Directors
In terms of Regulation 25 of the Listing Regulations the Company is required toconduct various programmes for the Independent Directors of the Company to familiarizethem with their roles rights responsibilities in the Company nature of Industry inwhich the Company operates business model of the Company etc. The details of suchfamiliarisation programmes are available at the website of the Company at http://www.jaibalajigroup.com/familiarization-programmes-19-2020.pdf.
COMMITTES OF THE BOARD
The Company has constituted /reconstituted various Board level committees in accordancewith the requirement of Companies Act 2013. The Board has the following committees asunder: l Audit Committee l Nomination and Remuneration Committee l Stakeholders'Relationship Committee l Management (Finance) Committee l Corporate Social ResponsibilityCommittee l Internal Complaints Committee All the recommendations made by the Committeesof the Board including the Audit Committee were accepted by the Board. The Board meets atregular intervals to discuss and decide on business policy and strategy apart from otherBoard Business. During the year under review 5(Five) meetings were convened and held on30th May 2019 14th August 2019; 4th October 2019; 14th November 2019 and 14thFebruary 2020 the details of which are given in the Corporate Governance Report. TheIntervening gap between the meetings was within the period prescribed under the CompaniesAct 2013 as well as Listing Regulations. A detailed report on the Board its Committeesits composition detailed charter including terms of reference number of Board andCommittee meetings held and attendance of the directors at each meeting is provided in thereport on the Corporate Governance which forms part of this report.
The Board carried out an annual performance evaluation of its own performance theperformance of the Independent Directors individually as well as the evaluation of theworking of the committees of the Board. The performance evaluation of all the directorswas carried out by the Nomination and Remuneration Committee. The performance evaluationof the Chairman and the Non-Independent Directors was carried out by the IndependentDirectors. Details of the same are given in the Report on Corporate Governance annexedhereto.
The Company has complied with the applicable Secretarial Standards i.e. SS-1 andSS-2 issued by the Institute of Company Secretaries of India.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134 (3) (c) and (5) of the Act the Board of Directors to thebest of their knowledge and ability state and confirm that:
1. In the preparation of annual accounts for the financial year ended 31st March 2020the applicable accounting standards have been followed along with proper explanationrelating to material departures;
2. We have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as on 31st March 2020 and of the loss of theCompany for the year ended on that date;
3. We have taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
4. The annual accounts for the financial year ended 31st March 2020 have beenprepared on a going concern basis;
5. Internal financial controls to be followed by the Company were laid down and thatsuch internal financial controls were adequate and were operating effectively;
6. Proper systems were devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
NOMINATION AND REMUNERATION POLICY
The Board of Directors have adopted and approved a Nomination and Remuneration policywhich includes the terms and conditions for appointment and payment of remuneration to theDirectors and Key Managerial Personnel (KMP) and other senior management personnelincluding criteria for determining qualifications positive attributes independence of adirector as per Schedule IV of the Companies Act 2013. The said policy has been madeavailable on the website of the Company" www.jaibalajigroup.com" under theweblink "http://www.jaibalajigroup.com/ nomination-remuneration-policy. pdf".The same is attached as "Annexure B" and forms integral part ofthis Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR) In accordance with the requirements ofSection 135 of Companies Act 2013 and rules made there under your Company has aCorporate Social Responsibility Committee. The terms of reference of the Corporate SocialResponsibility Committee is provided in the Corporate Governance Report. The CorporateSocial Responsibility Policy (CSR Policy) formulated under recommendation of CorporateSocial Responsibility Committee is available under the web link"http://www.jaibalajigroup.com/corporate-social-responsibility-policy.pdf".Further as per the requirement of Section 135 of the Companies Act 2013 the companiesspecified therein are required to spend at least two percent of the average net profitsmade during the three immediately preceding financial years towards CSR activities. YourCompany has incurred losses during the immediately preceding three financial years; hencethe said requirement of spending at least two percent of the average net profits madeduring the three immediately preceding financial years towards CSR activities was notapplicable to your Company for the financial year 2019-2020.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy to provide a formal mechanism tothe Directors and employees to report their concern about unethical behaviour actual orsuspected fraud or violation of the Company's code of conduct or ethics policy and alsoreport instances of leak of unpublished price sensitive information. The policy providesfor adequate safeguards against victimization of employees who avail of the mechanism andalso provides for direct access to the Chairman of the Audit Committee. Your companyhereby affirms that no Director/employee has been denied access to the Chairman of theAudit Committee. The details of the Whistle Blower Policy is available on your Company'swebsite viz. www.jaibalajigroup.com'' under the weblinkhttp://www.jaibalajigroup.com./whistle-blower-policy.pdf.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts arrangements and transaction entered into by the Company withrelated parties during the financial year 2019-2020 were in the ordinary course ofbusiness and on an arm's length basis. During the year the company did not enter into anytransaction contract or arrangement with related parties that could be consideredmaterial in accordance with the Company's policy on dealing with related partytransactions. Accordingly the disclosure in Form AOC-2 in terms of Section 134 of theCompanies Act 2013 is not applicable. There have been no materially significant RelatedParty Transactions entered into by the Company during the year under review. All relatedparty transactions are mentioned in Note No. 44 of the Notes to Financial Statements.There are no other transactions of the Company with any person or entity belonging to thepromoter/promoter group which hold(s) 10% or more shareholding in the Company. Prioromnibus approval is obtained for RPTs which are of a repetitive nature and entered in theordinary course of business and are at arm's length. All RPTs are placed before the AuditCommittee and the Board for review and approval on a quarterly basis. The Company hasformulated a policy on related party transactions for purpose of identification andmonitoring of such transactions. The policy intends to ensure that proper reportingapproval and disclosure processes are in place for all transactions between the Companyand related parties. The said policy is available on the Company's website at the link"http://www.jaibalajigroup.com/related-party-policy_ jbg.pdf".
The Company has formulated a Risk Management Policy. The said policy is reviewed by theAudit Committee and the Board of Directors on regular basis. The policy contains adetailed framework of risk assessment by evaluating the probable threats taking intoconsideration the business line of the Company monitoring the risks so assessed andmanaging them well within time so as to avoid hindrance in its growth objectives thatmight in any way threaten the existence of your Company. The details of the same arecovered in the Corporate Governance Report forming part of this report.
INTERNAL AUDIT AND INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY
As per Section 134(5)(e) of the Companies Act 2013 the Directors have an overallresponsibility for ensuring that the Company has implemented a robust system and frameworkof internal financial controls. JBIL has laid down an adequate system of internalcontrols policies and procedures for ensuring orderly and efficient conduct of thebusiness including adherence to the company's policies safeguarding of its assetsprevention and detection of frauds and errors accuracy and completeness of the accountingrecords and timely preparation of reliable financial disclosures. The internal financialcontrols are adequate and operating effectively. Effectiveness of internal financialcontrols is ensured through management reviews controlled self-assessment and independenttesting by the internal Audit Team. The members of the Audit Committee of your Company arewell versed with the financial management. Pursuant to the provisions of Section 138 ofthe Act read with Rule 13 of The Companies (Accounts) Rules 2014' your Company hasappointed M/s Agrawal Tondon & Co. Chartered Accountants of Room No - 7 1st Floor59 Bentinck Street Kolkata - 700 069 as the Internal Auditor of the Company who alsoevaluates the functioning and quality of internal controls and reports its adequacy andeffectiveness through periodic reporting. The Internal Auditor submits detailed reportsperiodically to the management and the Audit Committee. The Audit Committee activelyreviews the adequacy and effectiveness of the internal audit functions of your Company andmonitors the implementation of the same. The Committee also calls for comments of theinternal auditors about the Company's internal controls scope of audit as and whenrequired which gives them an additional insight on the assessment of such controls. Suchadequate internal control system helps in identification of potential operation processes.
AUDITORS AND AUDITORS' REPORT STATUTORY AUDITORS
M/s. S. K. Agrawal & Co. Chartered Accountants were appointed as the StatutoryAuditors of the Company at the 16th AGM held on 21st September 2015 to hold office fromthe conclusion of that AGM till the conclusion of the 21st AGM. M/s S. K. Agrawal &Co. would be completing 7 years as Statutory Auditors of the Company on the conclusion ofthis AGM. Pursuant to the applicable provisions of the Act on the recommendation of theAudit Committee of the Board it is proposed to appoint M/s S. K. Agrawal & Co. as theStatutory Auditors of the Company to hold office from the conclusion of the 21st AGM untilthe conclusion of the 24th AGM. The Company has received a letter from M/s S. K. Agrawal& Co. confirming that they are eligible for appointment as Statutory Auditors of theCompany under Section 139 of the Act and meet the criteria for appointment specified inSection 141 of the Act. Necessary resolution for the appointment of M/s S. K. Agrawal& Co. Chartered Accountants as the Statutory Auditors is included in the Notice ofthe ensuing AGM. The reports given by the Auditors M/s. S. K. Agrawal & Co CharteredAccountants on the standalone and consolidated financial statements of the Company for theyear ended 31st March 2020 form part of this Annual Report and contains a qualificationthat the Company has not provided for interest amounting to Rs. 103019.80 Lacs of whichRs. 27383.99 Lacs pertains to the current financial year on various loans and creditfacilities availed from banks and financial institution on the ground that same is beingtreated as Non-Performing Assets by the lenders. Due to this reason loss for the currentfinancial year has been understated by Rs. 27383.99 Lacs and accordingly loss for theyear ended 31st March 2020 would've been Rs. 38817.58 Lacs instead of Rs.11433.59 Lacs.The Board is of the view that some of the lenders of the Company have stopped charginginterest on debts since the dues from the Company have been categorized as Non PerformingAssets. The Company is in active Directors' Report (Contd.) discussion/negotiationwith the lenders to restructure its debts. In view of the above pending finalization ofthe restructuring plan the Company has stopped providing interest accrued and unpaideffective from 1st April 2016 in their books. The statement on impact of AuditQualification is annexed to this report as Annexure-C(1)". TheAuditors in their report have stated five points in the para relating to "Emphasis ofmatter" of the Independent Auditors Report. The response of your director on them isas follows: With respect to point 1 of the para Emphasis of Matter the clarification ofthe same is provided in Note 35 of the financial statement. With respect to point2 the clarification of the same is provided in Note 20 of the financial statementunder the head Additional disclosure. With respect to point 3 the clarification of thesame is provided in Note 58 of the financial statement. With respect to point 4the clarification of the same is provided in Note- 60 of the financial statement and withrespect to point 5 the detail of the same is provided in Note- 48 of the financialstatement. The Auditors in their Report in point vii & viii of Annexure B ofIndependent Auditors Report states about the delay in payment of statutory dues and otherswhich according to the management was due to financial constraints being faced by theCompany on account of continued cash losses incurred. Other observations made by theStatutory Auditors in their report for the Financial year ended 31st March 2020 read withthe explanatory notes to accounts are self-explanatory and therefore do not call for anyfurther elucidation. The Auditors of the Company have not reported any fraud in terms ofthe second proviso to Section 143(12) of the Act.
Pursuant to Section 148(2) of the Companies Act 2013 read with the Companies (CostRecords and Audit) Rules 2014 as amended the cost audit record maintained by theCompany is required to be audited. M/s. Mondal & Associates Cost Accountants hasbeen the Cost Auditor of the Company for the F.Y. 2019-20. The Board of Directors on therecommendation of the Audit Committee re-appointed M/s. Mondal & Associates CostAccountants Kolkata for conducting the cost audit of the Company for Financial Year2020-2021. As required under the Companies Act 2013 the remuneration payable to the CostAuditors for the financial year 2020-21 is required to be ratified by the members of theCompany. Accordingly resolution seeking members ratification for remuneration to be paidto Cost Auditors is included in the Notice convening Annual General Meeting. Your Companyhas filed the Cost Audit Report for the financial year 2018-19 with the Registrar ofCompanies Ministry of Corporate Affairs in the XBRL mode during the year under review.
Pursuant to the provisions of Section 204 of the Companies Act 2013 read with Rule9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 thecompany appointed M/s MKB & Associates Company Secretaries Shantiniketan 5th FloorRoom No. 511 8 Camac Street Kolkata - 700 017 to undertake the Secretarial Audit ofthe Company for the financial year 2019-2020. The Secretarial Audit Report for thefinancial year ending 31st March 2020 forms part of the Board's Report as Annexure-"C(2)".The Secretarial Auditors' Report to the shareholders for the year under review doesnot contain any qualification reservation adverse remark or disclaimer. Theobservations if any made in the Secretarial Auditors' Report are self-explanatory andtherefore do not call for any further elucidation. The Company has also undertaken anaudit for the FY 2019-20 pursuant to SEBI Circular No. CIR/CFD/CMO/I/27/2019 datedFebruary 08 2019 for all applicable compliances as per the Securities and Exchange Boardof India Regulations and Circular/ Guidelines issued there under. The Report (AnnualSecretarial Compliance Report) has been duly submitted to the Stock Exchanges for thefinancial year ended March 31 2020.
EXTRACT OF ANNUAL RETURN
An Extract of the Annual Return of the Company in form MGT-9 pursuant to Section 92(3)and 134(3)(a) of the Companies Act 2013 read with Rule 12 of Companies (Management andAdministration) Rules 2014 is annexed hereto and forms part of this report as Annexure"D" and has been placed on the website of the Company.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
Particulars of Loans Guarantees and Investments as on the financial year ended 31stMarch 2020 as covered under the provisions of Section 186 of the Companies Act 2013 readwith the Companies (Meetings of Board and its Powers) Rules 2014 are given in Note No.5614 38 and 44 of the notes to Financial Statements provided in the Annual Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS OF THE COMPANY.
No significant or material orders have been passed by any regulators or Courts orTribunals impacting the going concern of the Company and its future operations.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to provisions of the Companies Act 2013 the declared dividends which areunpaid or unclaimed for a period of seven years shall be transferred by the Company tothe Investor Education and Protection Fund (IEPF) established by the Central Government.Accordingly the unpaid or unclaimed dividend remaining unpaid or unclaimed for a periodof seven years from the date they became due for payment have been transferred to theIEPF established by the Central Government and no balance of such amount is lying with theCompany as on date. Pursuant to section 124(6) of the Companies Act 2013 read with theInvestor Education and Protection Fund Authority (Accounting Audit Transfer and Refund)Rules 2016 as amended all shares in respect of which dividend has not been paid orclaimed for seven consecutive years or more shall be transferred by the Company to IEPF.Accordingly all such shares have been transferred by the Company to IEPF and no suchshares are underlying with the Company as on date. Any person whose unclaimed or unpaidamount along with shares if any has been transferred by the Company to IEPF Authoritymay claim their refunds from the IEPF Authority by accessing the following link:http://www.iepf.gov.in/IEPF/refund.html.
The Company constantly endeavors to follow the corporate governance guidelines and bestpractices sincerely and disclose the same transparently. The Board is conscious of itsinherent responsibility to disclose timely and accurate information on the Company'soperations performance material corporate events as well as on the leadership andgovernance matters relating to the Company. The Company has complied with the requirementsof the Securities and Exchange Board of India (Listing Obligation and DisclosureRequirements) Regulations 2015 regarding corporate governance. A report on the CorporateGovernance practices and the Auditors' Certificate on compliance of mandatory requirementsthereof are given as an annexure to this report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A detailed report on the Management Discussion & Analysis is provided as aseparate section in the Annual Report.
PARTICULARS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGSAND OUTGO
The relevant information on conservation of energy technology absorption andforeign exchange earnings and outgo as stipulated under Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8 of Companies (Accounts) Rules 2014 are given in Annexure"E" forming part of this Annual Report.
PARTICULARS OF EMPLOYEES AND OTHER RELATED DISCLOSURES Disclosures pertaining toremuneration and other details as required under section 197(12) read with Rule 5(1) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 areannexed to this report as Annexure "F". The statement containing names oftop ten employees in terms of remuneration drawn and their other details as required to befurnished under Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is provided in a separate annexure forming part of thisreport. Further the report and the accounts are being sent to the Members excluding theaforesaid annexure. In terms of Section 136 of the Act the said annexure is open forinspection at the Registered Office of the Company. Any Member interested in obtaining acopy of the same may write to the Company Secretary. Your Company does not have any otheremployee whose particulars are required to be furnished under Rule 5(2) and 5(3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
BUSINESS RESPONSIBILITY/ SUSTAINABILITY REPORT
Regulation 34(2) of the Listing Regulations inter alia provides that the annualreports of the top 1000 listed entities based on market capitalisation (calculated as onMarch 31st of every financial year) shall include a Business Responsibility Report (BRR).As on 31st March 2020 the Company is amongst the top 1000 listed entities based onmarket capitalization at NSE. Accordingly the company has presented its first BusinessResonsibility Report for the financial year 2019-20 as Annexure G. The Company iscommitted to pursuing its business objectives ethically transparently and withaccountability to all its stakeholders. The Company believes in demonstrating responsiblebehaviour while adding value to the society and the community as well as ensuringenvironmental well-being with a long-term perspective.
CONSTITUTION OF INTERNAL COMPLAINTS COMMITTEE IN ACCORDANCE WITH THE PROVISIONS OF THEPREVENTION OF SEXUAL HARASSMENT ACT AND POLICY ON PREVENTION OF SEXUAL HARASSMENT ATWORKPLACE
An Internal Complaints Committee (ICC) has been constituted in accordance with theprovisions of the Prevention of Sexual Harassment Act to redress complaints receivedregarding sexual harassment and all the provisions regarding the constitution are compliedwith. The Company has a zero tolerance towards sexual harassment at the workplace and hasadopted a Policy on "Prevention of Sexual Harassment of Women at Workplace" andmatters connected therewith or incidental thereto covering all the aspects as containedunder "The Sexual Harassment of Women at Workplace (Prohibition Prevention andRedressal) Act 2013". During the year under review the Company has not received anyComplaints pertaining to Sexual Harassment. POLICY ON PREVENTION OF INSIDER TRADING
Your Company has adopted a Code for Prevention of Insider Trading with a view toregulate trading in equity shares of the Company by the Directors and designated employeesof the Company. The said Code of Conduct is available on the website of the Company at"www.jaibalajigroup.com". The Code requires preclearance for dealing inCompany's shares and prohibit the purchase or sale of shares in your company by theDirectors and designated employees while they are in possession of unpublished pricesensitive information and also during the period when the Trading Window remains closed.
LISTING The equity shares of your Company are listed on the National Stock Exchangeof India Limited (NSE) and the BSE Limited (BSE). Both NSE and BSE have nationwide tradingterminals which enable the shareholders / investors to trade in the shares of your Companyfrom any part of the country without any difficulty. ACKNOWLEDGEMENT
Your Directors take this opportunity to appreciate their suppliers vendors investorsfinancial institutions/ banks Central Government State Government all regulatory andgovernment authorities and all other business associates for their continued support andco-operation extended by them to the Company Your Directors wish hereby to place on recordtheir appreciation of the efficient and loyal services rendered by each and everyemployee worker staff and executive of the Company. On behalf of the Board of Directors
Chairman & Managing Director
(DIN : 00045114)
Date: 15th September 2020
Form No. MR - 3 SECRETARIAL AUDIT REPORT [Pursuant to section 204(1) of theCompanies Act 2013 and Rule No.9 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014] To The Members Jai Balaji Industries Limited We haveconducted the Secretarial Audit of the compliance of applicable statutory provisions andthe adherence to good corporate practices by JAI BALAJI INDUSTRIES LIMITED (hereinaftercalled "the Company"). The Secretarial Audit was conducted in a manner thatprovided us a reasonable basis for evaluating the corporate conduct/statutory compliancesand expressing our opinion thereon. The Company's Management is responsible forpreparation and maintenance of secretarial and other records and for devising propersystems to ensure compliance with the provisions of applicable laws and regulations. Basedon our verification of the books papers minute books forms and returns filed and otherrecords maintained by the Company and also the information provided by the Company itsofficers agents and authorised representatives during the conduct of the secretarialaudit we hereby report that in our opinion the Company has during the audit periodcovering the financial year ended on 31st March 2020generally complied with thestatutory provisions listed hereunder and also that the Company has proper Board processesand compliance mechanism in place to the extent in the manner and subject to thereporting made hereinafter: We have examined the books papers minute books forms andreturns filed and other records maintained by the Company for the financial year ended on31st March 2020 to the extent applicable according to the provisions of:
i) The Companies Act 2013 (as amended) (the Act) and the Rules made there under;
ii) The Securities Contracts (Regulation) Act 1956 and Rules made there under;
iii) The Depositories Act 1996 and Regulations and Bye-laws framed there under;
iv) The Foreign Exchange Management Act 1999 and the Rules and Regulations made thereunder to the extent of Foreign Direct Investment Overseas Direct investment and ExternalCommercial Borrowings;
v) The Regulations and Guidelines prescribed under the Securities and Exchange Board ofIndia Act 1992 ("SEBI Act") or by SEBI to the extent applicable:
a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;
b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 2015; c) The Securities and Exchange Board of India (Issue of Capital andDisclosure Requirements) Regulations 2009 and the Securities and Exchange Board of India(Issue of Capital and Disclosure Requirements) Regulations 2018;
d) The Securities and Exchange Board of India (Share Based Employee Benefits)Regulations 2014; e) The Securities and Exchange Board of India (Issue and Listing ofDebt Securities) Regulations 2008;
f) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993;
g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations2009;
h) The Securities and Exchange Board of India (Buyback of Securities) Regulations 2018i) The Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 vi) Other than fiscal labour and environmental laws whichare generally applicable to all manufacturing companies the following laws/acts are alsointer alia applicable to the Company:
a) The Mines Act 1952 and the rules regulations made there-under. b) Mines andMinerals (Development & Regulation) Act 1957 and the rules made there-under. We havealso examined compliance with the applicable clauses of the Secretarial Standards issuedby The Institute of Company Secretaries of India. During the period under review theCompany has generally complied with the provisions of the Act Rules RegulationsGuidelines Standards etc. mentioned above.
We further report that:
a) The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the period under review werecarried out in compliance with the provisions of the Act.
b) Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.
c) None of the directors in any meeting dissented on any resolution and hence there wasno instance of recording any dissenting member's view in the minutes. We further reportthat there are adequate systems and processes in the Company commensurate with the sizeand operations of the Company to monitor and ensure compliance with applicable lawsrules regulations and guidelines. We further report that during the audit period thecompany has passed the following special resolutions:
i. Re-appointment of Mrs. Seema Chowdhury (DIN: 07158338) as Independent Director ofthe Company;
ii. Re-appointment of Mrs. Swati Agarwal (DIN: 07158355) as Independent Director of theCompany;
iii. Re-appointment of Mrs. Rakhi Bajoria (DIN: 07161473) as Independent Director ofthe Company;
iv. Increase in authorised capital of the Company;
v. To create offer issue and allot on preferential basis in one or more tranchesup to 14071500 Equity Shares of the Company of face value of Rs.10/- each as part ofunsustainable portion of debt to be converted into equity at such price being not lessthan the price determined in accordance with SEBI (ICDR) Regulations 2018 to EdelweissAsset Reconstruction Company Limited ("EARC") who will hold such shares onbehalf of various EARC trusts. We further report that during the audit period the companyhas issued and allotted 14071500 equity shares to Edelweiss Asset ReconstructionCompany Limited (EARC) on behalf of various EARC trusts on preferential basis. This reportis to be read with our letter of even date which is annexed as Annexure Iwhich forms an integral part of this report.
For MKB & Associates Company Secretaries
Manoj Kumar Banthia
ACS no. 11470
COP no. 7596
Date: 15th September 2020