Your Directors have pleasure in presenting the 71st Annual Report on theaffairs of the Company together with the Audited Statement of Accounts of Jainex AamcolLimited (the "Company") for the financial year ended 31st March2019. A summary of the financial results is given below:-
1. FINANCIAL PERFORMANCE
The financial performance of the company for the Financial Year 2018-19 in comparisonto the previous financial year 2017-18 are summarized below:
| || ||(Amount in Rs) |
|PARTICULARS ||2018-19 ||2017-18 |
|Turnover ||175359285 ||157620911 |
|Other Income ||262265 ||380598 |
|Total Revenue ||175621550 ||158001509 |
|Earnings before interest tax depreciation exceptional items and amortization (EBITDA) ||28099060 ||22411771 |
|Interest ||7396191 ||9083979 |
|Depreciation ||12023211 ||11458409 |
|Profit/(Loss) before Extra- ordinary items & Taxes ||8679658 ||1869383 |
|Exceptional items ||0 ||0 |
|Extraordinary items ||0 ||0 |
|Profit/(Loss) before Taxes ||8679658 ||1869383 |
|Current Tax ||911065 ||20433 |
|Earlier Year ||0 ||0 |
|Deferred Tax ||1665480 ||2149459 |
|Profit/(Loss) after tax ||6103113 ||(300509) |
2. STATE OF COMPANY'S AFFAIRS
During the year under review there was increase in the turnover of the company ascompared with the previous year i.e. from Rs. 157620911/- to Rs. 175359285/-. TheCompany has reported Net Profit of Rs. 6103113/- against Net Loss of Rs. 300509/-in the previous year.
3. TRANSFER TO RESERVES
The Company has earned profit during the financial year 2018-19 but the Board ofDirectors of your Company has decided not to transfer any amount to the Reserves for theyear under review.
To conserve the funds for future business growth your Directors have not recommendedany dividend on equity shares in respect of the financial year 2018-19.
5. SHARE CAPITAL
The Paid up Share capital as on 31st March 2019 was Rs. 14993940/-During the year under review the Company has not issued any shares with differentialrights as to dividend voting or otherwise or convertible debentures.
6. SUBSIDIARY COMPANIES JOINT VENTURES AND ASSOCIATE COMPANIES
During the year under review your Company has no Subsidiary/ Associate/ Joint VentureCompanies.
7. PUBLIC DEPOSITS
Your Company has not been accepting any deposits from the public and hence there areneither unpaid/unclaimed deposits nor any default in repayment thereof.
8. BOARD MEETINGS
During the year under review 4 (Four) Board Meetings were held on 18th May2018 14th August 2018 14th November 2018 and 14thFebruary 2019.
9. COMMITTEES OF THE BOARD OF DIRECTORS
During the year under review all recommendations made by the AuditCommittee/Nomination & Remuneration Committee were accepted by the Board. There wereno instances where the Board has not accepted any recommendation of the Audit Committee.
10. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY
No material changes and commitments affecting the Financial Position of the Companyhave occurred between the end of the Financial year of the Company to which the FinancialStatement relate and the date of this report.
11. EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of Section 134 (3) (a) of the Companies Act 2013 Extractof the Annual Return for the financial year ended 31st March 2019 made underthe provisions of Section 92 (3) of the Act in Form MGT-9 is annexed herewith as "AnnexureA".
12. PARTICULARS OF LOANS GRANTED GUARANTEE PROVIDED AND INVESTMENTS MADE PURSUANT TOTHE PROVISIONS OF SECTION 186 OF THE COMPANIES ACT 2013
During the year under review the company did not provide any loans guarantees orinvestments as per the provisions of Section 186 of the Companies Act 2013.
13. LOAN FROM DIRECTORS
Particulars of loan from Directors of the Company are provided in Note No. 31- Sub NoteNo. 10(c) to the financial statements. Refer.
14. PARTICULARS OF ENERGY CONSERVATION TECHNOLOGY ABSORPTION EXPENDITURE ON RESEARCHAND DEVELOPMENT & FOREIGN EXCHANGE EARNINGS AND OUTGO
Considering the nature of activities in which the Company operates energy consumptionis in accordance to the normal business practices and does not require any specificinstallations. In its regular course of business the Company is always vigilant toconserve the resources and continuously implements measures required to save energy. TheCompany has adopted new technologies and corrective measures to cope up with the currentmarket situations. In the course of its operations processes are formed and implementedto achieve operational efficiencies which provide maintaining product quality and costcontrol. The Company had Foreign Exchange earnings/outgo during the year under review.
The Foreign Exchange earned in terms of actual inflows during the financial year2018-19 is Rs 315.90 Lakhs
The Foreign Exchange outgo in terms of actual inflows during the financial year 2018-19is Rs 64.20 Lakhs
The details of Conservation of Energy Technology Absorption Foreign Exchange Earningsand Outgo pursuant to provisions of Section 134 of the Companies Act 2013 read with Rule8(3) of the Companies (Accounts) Rules 2014 are attached as Rs.Annexure B' whichforms part of this report.
15. DIRECTORS AND KEY MANAGERIAL PERSONNEL
1. In terms of the provisions of the Companies Act 2013 Mr. Rahul Dugar retires fromthe Board of Directors of the Company by rotation at the ensuing Annual General Meetingand being eligible has offered himself for re-appointment. The Board recommends hisre-appointment.
2. Mr. Mohanlal Zumbarlal Kothari was re-appointed as the Managing Director of theCompany for a period of three years i.e. from 01st April 2019 to 31stMarch 2022 on the terms & conditions and at a remuneration plus benefits andperquisites as approved by the Board of Directors in its meeting held on 01stApril 2019 subject to approval of the members of the company in the ensuing AnnualGeneral Meeting.
3. The Company has received individual declaration from all the Independent Director(s)of the Company under section 149(7) of the Companies Act 2013 in respect of meeting thecriteria of independence provided under section 149(6) of the Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
None of the Directors are disqualified for re-appointment under Section 164 of theCompanies Act 2013.
16. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirements of Section 134(5) of the Companies Act 2013 Directors ofyour Company hereby state and confirm that:-
a) in the preparation of the annual accounts for the financial year ended 31stMarch 2019 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
b) that they have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of your Company as at 31st March 2019 and of theprofit and loss of the Company or that period;
c) that they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d) that they have prepared the annual accounts for the financial year ended 31stMarch 2019 on a going concern basis;
e) that they have laid down internal financial controls to be followed by the Companyand that such internal financial controls are adequate and were operating effectively; and
f) that they have devised proper systems to ensure compliance with the provisions ofall applicable laws and these are adequate and are operating effectively.
17. EXPANSION OF BUSINESS
The Company through its Board of Directors and management is taking extra efforts toreach at higher level by setting a benchmark. The Company also wishes to explore itsbusiness in future by keeping in view the dynamism of global market.
M/s. P.M. Bhargava & Co. Chartered Accountants Mumbai were appointed asStatutory Auditors for a term of 5 years from FY 2017-18 to FY 2021-22 by the members atthe 69th AGM of the Company held on 28th September 2017. They haveconfirmed that they are not disqualified from continuing as Statutory Auditors of theCompany.
19. AUDITOR'S REPORT
The notes on financial statements referred to in the Auditors Report areself-explanatory. The Auditors' Report does not contain any qualification. However theAuditors in their Report have mentioned their observation and the same have been laid downbelow along with Directors' comments:
|SR. No. ||Auditors' Observation in the auditors' report ||Directors' comments on the observations of the auditors mentioned in the auditors' report |
|1. ||"Details of dues set out herein below in respect of customs duty which has not been deposited as at 31st March 2019 by the company with the appropriate authorities on account of disputes. ||Show Cause Notice was issued wrongly by the assessing authority for Special Additional Duty which was already paid; demand for basic custom duty can't be raised now being time barred as advised by company's counsel does not find any merit. |
| ||Name of Statute ||Nature of Dues ||Amount in Lacs ||Amount in Rs. Lacs paid under protest ||Period to which the amount relates ||Forum were disputes is pending || |
| ||Customs ||Customs Duty ||7.14 ||2.00 ||2008- 2009 ||Customs and Excise Tribunal Mumbai- Case is heard and matter is reverted back to the concerned assessing authority to re-look afresh. || |
|2. ||"In our opinion and according to the information and explanations given to us the Company has defaulted in repayment of term loans installments of Bank of India as mentioned below: ||The company has applied to the Bank for reschedulement/ deferment of instalments fallen due on TLs and interest thereon which is under consideration by the bank. |
| ||Period/ Type ||Amount of Default ||Delay- till date of this report || |
| ||Financial Year ||Due Date ||Loan Type || || || |
| ||1. 2018 (part) and 2019 ||Mont ||Term ||17.00 ||Monthly installment due from December || |
| || ||hly ||Loan 15 ||51.75 || || |
| || || || || ||18 to March 19 resulting in delay from 1 to 16 months; as the case may be respectivel y as per bank's original sanction but not reflecting as over due in the bank's systems viz. (the download ed current computer and systems/p rints of bank) is neither demanded nor recovered by the bank. ||However interest servicing on Term Loans other than Term Loan 15 has been serviced together with instalments within the permissible grace period for payment. |
| || || ||Total (1) ||68.75 || || |
20. COST AUDITORS
The appointment of Cost Auditor is not applicable to the Company as per Companies Act2013.
21. SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT
The Company has appointed Ms. Kavita Raju Joshi Practicing Company Secretary bearingMembership No. 22387 and Certificate of Practice No. 8893 to conduct Secretarial Audit ofthe Company for the financial year 2018-19 in terms of provisions of Section 204 of theCompanies Act 2013. The Secretarial Audit Report is annexed to this Report as "AnnexureC" (Form MR-3).
Your Company has tied up with National Securities Depository Ltd. (NSDL) and CentralDepository Services (India) Ltd. (CDSL) to enable the members to trade and hold shares inan electronic/dematerialized form. The shareholders are advised to take benefits ofdematerialization.
23. LISTING OF SHARES
The Company's equity shares continue to be listed on The Bombay Stock Exchange Ltd(BSE).
24. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES UNDER SECTION 188 OF THE COMPANIESACT 2013
During the financial year under review the Company had not entered into materialrelated party transactions. However the Company intends to enter into Related PartyTransaction with M/s. Metagame Ventures Private Limited during the financial year 2019-20as set out in the Item No.4 of the Notice to the Annual General Meeting.
25. MANAGEMENT DISCUSSION AND ANALYSIS
Management's Discussion and Analysis Report for the year under review as stipulatedunder the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ("Listing Regulations") is presented in aseparate section forming part of the Annual Report.
26. COMMITTEES OF BOARD
Following are the committees which are constituted or re-constituted by the Company:
A. AUDIT COMMITTEE
The company is having an audit committee comprising of the following directors:
|NAME ||DESIGNATION ||CATEGORY |
|Mr. Hitesh Mulraj Popat ||Chairman ||Independent/Non-Executive Director |
|Mr. Sunil Sampatraj Parakh ||Member ||Independent/Non-Executive Director |
|Mr. Kunal Bafna ||Member ||Executive Director & CFO |
B. NOMINATION AND REMUNERATION COMMITTEE
The company is having a Nomination and Remuneration Committee comprising of thefollowing Members:
|NAME ||DESIGNATION ||CATEGORY |
|Mr. Sunil Sampatraj Parakh ||Chairman ||Independent/Non- Executive Director |
|Mr. Hitesh Mulraj Popat ||Member ||Independent/Non- Executive Director |
|Mr. Vinit Ramgopal Kejriwal ||Member ||Independent/Non- Executive Director |
In terms of requirements prescribed under Section 178(3) of the Companies Act 2013the Company has formulated the Nomination and Remuneration Policy inter-alia providing theterms for appointment and payment of remuneration to Directors and Key ManagerialPersonnel and the same has been uploaded on company's website. Nomination &Remuneration Policy is annexed to this report in "ANNEXURE D".
C. ANTI-SEXUAL HARASSMENT COMMITTEE AND RELATED DISCLOSURE.
The Board of Directors having an Anti-Sexual Harassment Committee comprising offollowing members.
|NAME ||DESIGNATION ||CATEGORY |
|Ms. Manju Jain ||Chairperson ||Independent/Non- Executive Director |
|Ms. S L Chavan ||Member ||Employee |
|Ms. S R Kamble ||Member ||Employee |
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Woman at Workplace and has complied with provisions relatingto the constitution of Internal Complaints Committee under the Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013. All women employees(permanent contractual temporary and trainee) of the Company are covered under thisPolicy. The following is a summary of Sexual Harassment complaints received and disposedoff during the year:
|Sr. No. ||No. of Complaints received ||No. of Complaints disposed off |
|Nil ||Nil ||Nil |
NOTE: The Company has dissolved its CSR Committee as the Company is not required toconstitute the same.
27. RISK MANAGEMENT POLICY AND INTERNAL ADEQUACY
Your Company has in place a mechanism to identify assess monitor and mitigate variousrisks to key business objectives. Major risks identified by the businesses and functionsare systematically addressed through mitigating actions on a continuing basis. YourCompany's internal control systems are commensurate with the nature of its business andthe size and complexity of its operations. These are routinely tested by Statutory as wellas Internal Auditors. Significant audit observations and follow up actions thereon arereported to the Audit Committee.
28. VIGIL MECHANISM/WHISTLE BLOWER POLICY
The provisions of this policy are in line with the provisions of the Section 177(9) ofthe Act. The Company has put in place a system through which the Directors and Employeesmay report concerns about unethical behavior actual or suspected fraud or violation ofthe Company's Code of Conduct & Ethics without fear of reprisal. The Employees andDirectors may report to the Compliance Officer and have direct access to the Chairman ofthe Audit Committee. The Company has formulated and published a Whistle Blower Policy toprovide Vigil Mechanism for employees including directors of the Company to report genuineconcerns.
29. INTERNAL FINANCIAL CONTROLS
Your Company has in place adequate internal financial controls with reference tofinancial statements. During the year under review such controls were tested and noreportable material weaknesses were observed.
30. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
During financial year under review the Company has not transferred any amount toInvestor Education and Protection Fund (IEPF).
31. MAINTAINENCE OF COST RECORDS AS SPECIFIED UNDER SECTION 148(1) OF THE COMPANIESACT 2013
Central Government has not prescribed the maintenance of cost records under section148(1) of the Companies Act 2013 for any of the products/services dealt by the Company.Accordingly maintenance of such accounts and records is not applicable to the Company.
32. PARTICULARS OF EMPLOYEES
Disclosures with respect to the remuneration of Directors and employees as requiredunder Section 197 of the Companies Act 2013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are provided under "AnnexureE" which is annexed to this Report. None of the employees of the Company were inreceipt of monthly or yearly remuneration in excess of the limits specified under theCompanies Act 2013 and Rule 5(2) & Rule 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014.
33. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
There are no significant/ material orders passed by the regulators or courts ortribunals impacting the going concern status of the Company and its operations in future.
34. CORPORATE GOVERNANCE
The Company is not required to comply with the provisions of Regulation 17 toRegulation 27 and clause (b) to clause (i) of sub regulation (2) of Regulation 46 and ParaC D and E of Schedule V as mentioned in Regulations 15 of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 which came into force with effect from 01stDecember 2015 as the Paid-up Share Capital of the Company is less thanRs.100000000 (Rupees Ten Crores Only) and the Net Worth of the Company is also lessthan Rs.250000000 (Rupees Twenty Five Crores Only) based on the Annual AuditedFinancial Results of the Company for the quarter and year ended March 31 2019.
35. PERFORMANCE EVALUATION
The Company has devised a policy for evaluation of Performance of the Board ofDirectors its Committees and individual Directors ("Policy"). The evaluationinvolves assessment of performance individually of each of the Board Members and of theentire Board of Directors and its Committees. The performance evaluation criteria of theentire Board of Directors inter alia comprised of the following key areas:
i. the role of a Board Members is clearly defined and understood;
ii. the Board has ensured that the organization's accomplishments and challenges arecommunicated to Members and Stakeholders;
iii. the spread of talent within the Board reflect the Company's needs;
iv. all Board Members bring valuable skill and experience to the Company;
v. the composition of the Board is sufficient to carry out the work required of it;
vi. the matters relating to the Company are discussed in a structured manner;
vii. the Board knows and understand the Company's mission vision and strategy; theBoard's Meeting agenda clearly reflects strategic plan or priorities;
viii. the Board papers contain the correct amount and type of information;
ix. all Board Members participate in important Board discussions;
x. the Board knows and keep abreast of trends and issues affecting the market in whichthe Company competes
xi. the Board understands the business it is governing;
xii. the Board Members actively engage in networking for the benefit of the Company;
xiii. the Board Members have sufficient financial skills to ensure that the Board candischarge its governance responsibilities;
xiv. the Company have relevant internal reporting and compliance systems;
xv. the Board Members are aware of their risk assessment duties as Directors; xvi.there is a clear understanding of the Company's business risk;
xvii. the Board encourages Directors to pursue opportunities for personal development;
xviii. the Board have a succession plan in place for the Directors KMP and SeniorManagement Personnel;
xix. responsibilities have been effectively delegated amongst the Executive DirectorsKMP and Senior Management Personnel;
xx. There is good communication between the Board and KMP.
The evaluation framework for assessing the performance of Committee(s) of Board ofDirectors inter-alia comprised of the following key areas:
i. the Committees have been constituted in compliance with the requirement of ListingRegulations and the Companies Act 2013 read with the Rules there under;
ii. the role/terms of reference of the Committee Members is clearly defined andunderstood;
iii. the composition of the Committee is sufficient to carry out the work required ofit;
iv. the Committee knows and understands the Company's mission vision and strategy;
v. the Committee's Meetings are properly conducted and agenda papers contain thecorrect amount and type of information;
vi. all Committee Members participate in discussion making;
vii. the Committee Members have sufficient skills to ensure efficient discharge ofresponsibilities;
viii. There is good communication between the Committees and the Board.
ix. the Committee has relevant internal reporting and compliance systems; Theperformance evaluation process of individual Directors inter alia comprised of thefollowing key areas:
i. uphold ethical standards of integrity and probity;
ii. act objectively and constructively while exercising their duties;
iii. exercise their responsibilities in a bona fide manner in the interest of theCompany;
iv. devote sufficient time and attention to their professional obligations for informedand balanced decision making;
v. assist the Company in implementing the best corporate governance practices;
vi. strive to attend all Meetings of the Board of Directors and of the Board committeesof which they are members;
vii. moderate and arbitrate in the interest of the Company as a whole in situations ofconflict between Management and Shareholder's interest;
viii. satisfy themselves on the integrity of financial information and that financialcontrols and the systems of risk Management are robust and defensible;
ix. strive to safeguard the interests of all stakeholders particularly the minorityshareholders;
x. balance the conflicting interest of the stakeholders;
xi. seek appropriate clarification or amplification of information and wherenecessary take and follow appropriate professional advice and opinion of outside experts;
xii. keep themselves well informed about the Company and the external environment inwhich it operates;
xiii. participate constructively and actively in the committees of the Board in whichthey are chairpersons or members;
xiv. strive to attend the general Meetings of the Company;
xv. acting within their authority assist in protecting the legitimate interests of theCompany shareholders and its employees;
xvi. pay sufficient attention and ensure that adequate deliberations are held beforeapproving related party transactions and assure themselves that the same are in theinterest of the Company;
xvii. ascertain and ensure that the Company has an adequate and functional vigilmechanism and ensure that the interests of a person who uses such mechanism are notprejudicially affected on account of such use;
xviii. report concerns about unethical behaviour actual or suspected fraud orviolation of the Company's code of conduct or ethics policy if any;
xix. maintain confidentiality of information such as commercial secrets technologiesadvertising and sales promotion plans unpublished price sensitive information unlesssuch disclosure is expressly approved by the Board or required by law;
xx. abide by Company's Memorandum and Articles of Association Company's policies andprocedures including code of conduct insider trading guidelines etc;
xxi. they express concerns about the running of the Company or a proposed action andensure that these are addressed by the Board and to the extent that they are notresolved insist that the concerns are recorded in the Minutes of the Board Meeting;
xxii. develop a good working relationship with other Board members and contribute tothe Board's working relationship with the senior Management of the Company;
xxiii. fairly contribute towards proper functioning of Board or Committees of theBoard.
The evaluation framework for assessing the performance of Independent Directorsinter-alia comprised of the following key areas:
i. satisfy the criteria for independence as prescribed under Section 149 of theCompanies Act 2013 and the Listing Regulations;
ii. help in bringing an independent judgment to bear on the Board's deliberationsespecially on issues of strategy performance risk Management resources keyappointments and standards of conduct;
iii. bring an objective view in the evaluation of the performance of Board andManagement;
iv. actively scrutinize the performance of Management in Meeting agreed goals andobjectives and monitor the reporting of performance;
v. undertake appropriate induction and regularly update and refresh their skillsknowledge and familiarity with the Company;
vi. contribute to determine appointment and remuneration of executive Directors KeyManagerial Personnel (KMP) and senior Management;
vii. exercise objective independent judgment in the paramount interest of the Companyas a whole while concurring in or dissenting from the collective judgment of the Board inits decision making. In terms of the Policy a process of evaluation was undertaken by theBoard for its own performance and that of its Committees and individual Directors. Theevaluation process focused on various aspects of the functioning of the Board andCommittees. Separate exercise was carried out to evaluate the performance of individualDirectors on specified parameters. The outcome of evaluation process was shared with theBoard Chairman of respective Committees and individual Directors. Based on the outcome ofthe evaluation the Board and Committees have agreed on an action plan for the identifiedareas. The details of program for familiarization of Independent Directors with theCompany industry in which it operates their roles rights responsibilities is madeavailable on the website of the Company www.jainexaamcol.com.
36. INDEPENDENT DIRECTORS MEETING
During the year under review the Independent Directors of the Company met on Thursday14th February 2019 inter-alia to discuss: i. Evaluation of performance ofNon-Independent Directors and the Board of Directors of the Company as a whole. ii.Evaluation of performance of the Chairman of the Company taking into view of Executiveand Non- Executive Directors. iii. Evaluation of the quality content and timelines offlow of information between the Management and the Board that is necessary for the Boardto effectively and reasonably perform its duties.
The Board of Directors state that no disclosure or reporting is required in respect ofthe following items as there were no transactions on these items during the year underreview:
1. Issue of equity shares with differential rights as to dividend voting or otherwise.
2. Issue of shares (including sweat equity shares) to employees of the Company underany scheme.
3. The Company does not have any scheme of provision of money for the purchase of itsown shares by employees or by trustees for the benefit of employees.
4. No fraud has been reported by the Auditors to the Audit Committee or the Board.
5. The Company has complied with the applicable Secretarial Standards issued by theInstitute of Company Secretaries of India.
Your Directors would like to thank and place on record their appreciation for thesupport and co-operation provided to your Company by its Shareholders their employeesregulatory authorities and its bankers. Your Directors would also like to place on recordtheir appreciation for the efforts put in by employees of the Company during the year.
| ||FOR AND ON BEHALF OF THE BOARD OF DIRECTORS |
| ||for Jainex Aamcol Limited |
| ||Mohanlal Zumbarlal Kothari ||Rahul Dugar |
| ||Managing Director ||Director |
|Place: Mumbai ||DIN: 01486305 ||DIN : 00013704 |
|Date:14th August 2019 || || |