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Jakharia Fabric Ltd.

BSE: 535093 Sector: Industrials
NSE: JAKHARIA ISIN Code: INE00N401018
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Jakharia Fabric Ltd. (JAKHARIA) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting the 15th Annual Report togetherwith the Audited Financial Statements of accounts of the Company for the Financial Yearended 31st March 2022.

COMPANIES SPECIFIC INFORMATION:

1. FINANCIAL RESULTS:

The Company's financial performance for the year ended 31st March 2022& 31st March 2021 are summarized below:

(Rs. In lakhs)

Particulars 2021-2022 2020-2021
Revenue from Operation 7510.57 4132.95
Other Income 30.62 11.78
Total Income 7541.19 4144.73
Expenses:
Cost of Material consumed 4077.91 2031.45
Change in Inventory 0.07 (15.84)
Employee Benefit 1275.34 783.58
Finance Cost 92.44 105.05
Depreciation & Amortization Exp. 171.15 171.42
Other Expenses (including prior period expenses) 3253.98 2313.31
Total Expenses 8870.89 5388.96
Profit/ (Loss) Before Prior items and Tax (1329.71) (1244.23)
Prior Period Income / (expenses) (37.86) (1.67)
Net Profit Before Tax (1376.57) (1245.90)
Less :Tax Expenses
- Current Tax - -
- Excess/(short) Provision in earlier year (65.12) -
- Deferred Tax (16.71) 56.38
Net Profit/ (Loss) After Tax (1449.40) (1189.52)
Opening Balance of Profit & Loss A/ c 982.11 2171.62
Add: Profit/ (Loss) for the year (1449.40) (1189.51)
Closing Balance of Profit & Loss A/c (467.28) 982.11
- Earnings per share
Basic (35.67) (29.27)
Diluted (35.67) (29.27)

2. OPERATIONAL PERFORMANCE:

Your Directors inform the members that the financial year 2021-2022 impacted theprofitability of the company adversely.

The Total income during the year has increased by 81.95% i.e. from Rs.4144.74 Lakhs to Rs. 7541.19 Lakhs over the last year and the total expenditureof the company is Rs. 8870.88 Lakhs. The unexpected loss by fire and the burden ofpenalty of the NGT Tribunal were the primary reasons for the same.

Note: During the F.Y. 2021-22 a major fire broke out in the factory of our AssociateM/s. Jakharia Industries which is located at Plot No. J1/1 MIDC Tarapur Boisar districtPalghar — 401506 on 4th September 2021. The same is informed to the NSEon 4th September 2021 and also press release for the same was given on 7thSeptember 2021 in the Newspapers. The same is also informed in the notes of Notice of the14th AGM of the company.

The Company is operating only in one segment i.e. processing of textile and there is nochange in the nature of the Business of the Company.

In accordance with section 136 of the Companies Act 2013 the audited financialstatements are available on www.jakhariafabric.com. These documents will also be availablefor inspection during working hours at the registered office of your Company. Any memberinterested in obtaining such document may write to the Company Secretary and the sameshall be furnished on request.

3. TRANSFER TO RESERVES IN TERMS OF SECTION 134 (3) (J) OF THE COMPANIES ACT 2013:

During the year under review the company has not transferred any amount to the generalreserves. The Loss of Rs. 1449.39 Lakhs is reduced from the Reserve and Surplus Accountfor the year under review.

4. DIVIDEND:

The company has incurred loss during the year and with the intention to strengthen thefinancial position of the company no dividend out of accumulated reserves is recommendedby the

Board for the financial year ended March 31 2022. (previous year NIL)

5. CAPITAL STRUCTURE:

The Capital Structure of the Company as on 31.03.2022 is as follows:

The Authorized Share Capital of the Company is Rs. 50000000 (Rupees Five Crore)divided into 5000000 (Fifty Lakh) Equity Shares of Rs. 10/- (Rupees Ten) each.

The Issued Subscribed & Paid-up Capital of the Company is Rs. 40638300 (RupeesFour Crore Six Lakh Thirty-Eight Thousand Three Hundred only) divided into 4063830(Forty Lakh Sixty- Three Thousand Eight Hundred and Thirty) Equity Shares of Rs. 10/-(Rupees Ten) each fully paid up.

BUY BACK OF SECURITIES:

The Company has not bought back any of its securities during the year under review.

SWEAT EQUITY:

The Company has not issued any Sweat Equity Shares during the year under review.

BONUS SHARES:

No Bonus Shares were issued during the year under review.

EMPLOYEES STOCK OPTION PLAN:

The Company has not provided any Stock Option Scheme to the employees.

6. MATERIAL CHANGES BETWEEN THE DATE OF THE BOARD REPORT AND END OF FINANCIAL YEAR:

There have been no material changes and commitments except provided below affectingthe financial position of the Company which have occurred between the end of the financialyear of the Company to which the financial statements relate and the date of the report.

7. CHANGE IN NATURE OF BUSINESS:

There have been no material changes in the nature of any business of the company duringthe financial year under review.

8. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:

During the year under review there has been no such significant and material orderspassed by the regulators or courts or Tribunals impacting the going concern statusand company's operations in future except the National Green Tribunal (NGT)

Penalty amounting to Rs. 251.54 lakhs has been levied by NGT for alleged violation ofenvironmental norms by the Company at its factory located at Tarapur MIDC. As per thedirections of the Hon'ble Supreme Court dated December 14 2020 the Company has deposited30% of the penalty amounting to Rs. 75.46 lakhs which was disclosed as recoverable advancein financial year 2020-21. The order of penalty was stayed by the Honourable Supreme Courtand has directed to hear the case afresh by giving opportunity to the concerned parties.

Pursuant to the directions of the Honorable Supreme Court dated December 14 2020 NGThad reheard the matter and vide its direction dated 24th January 2022 hadreduced the portion of compensation attributable to the company for alleged violations ofenvironmental norms of manufacturers at Tarapur MIDC to an amount of of Rs. 98.88 lakhsfrom Rs.251.51 lakhs. In view of the same the company has debited penalty amouting to Rs.98.88 lakhs in the during the financial year 2021-22.

Apart from above there are no significant and material orders passed by any regulatoror court or tribunal impacting the going concern status and Company's Operation in future.

9. SUBSIDIARIES ASSOCIATE COMPANIES& JOINT VENTURES:

The details of Subsidiaries Associate companies & Joint Ventures are provided in FormMGT-9 annexure to the Director's Report as "Annexure- I". Form AOC - 1w.r.t. Associate is attached as "Annexure - VII"

10. EXTRACT OF ANNUAL RETURN

The extract of the Annual Return in FormMGT-9 as required under section 92(3) of theCompanies Act 2013 read with the Companies (Management and Administration Rules) 2014 isenclosed as "Annexure-I" Kindly Take Note that the Annual Return isavailable on the Website of the Company on www.jakhariafabric.com.

11. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as "AnnexureII".

12. BOARD OF DIRECTORS THEIR MEETINGS & KMP(S):

I. Constitution of the Board:

The Board of directors comprise of total 9 (Nine) Directors which includes 3 (Three)Independent directors. The Chairman of the Board is Promoter and Executive Director. TheBoard members are having varied experience in the relevant field of the businessactivities of the Company which plays significant roles for the business policy anddecision-making process and provide guidance to the executive management to dischargetheir functions effectively.

II. Board Independence

Our definition of 'Independence' of Directors is derived from Regulation 16 of SEBI(LODR) Regulations 2015 and Section 149(6) of the Companies Act 2013. The Company ishaving following independent directors:

(i) Mr. Mukul Vora

(ii) Mr. Ajitsingh Arjun Ghorpade*

(iii) Mr. Jawahar Desai*

*Appointed as additional director (non- executive independent director) on 14thNovember 2021.

Mr. Anant Sawant and Mrs. Rajashri Kovil Independent Directors resigned on 1stFebruary 2022.

As per provisions of the Companies Act 2013 Independent Directors were appointed fora term of 5 (five) consecutive years and shall not be liable to retire by rotation.

III. Declaration by the Independent Directors:

All the Independent Directors have given their declaration of Independence stating thatthey meet the criteria of independence as prescribed under section 149(6) of the CompaniesAct 2013. Further that the Board is of the opinion that all the independent directorsfulfill the criteria as laid down under the Companies Act 2013 and the SEBI (LODR)Regulations 2015 during the year 2021-22.

IV. Directors liable to retire by rotation

In accordance with the provisions of the Companies Act 2013 and in terms of theArticles of Association of the Company Mr. Dixit Manikchand Shah (DIN: 01911262)Director of the Company is liable to retire by rotation at ensuing Annual General Meetingand being eligible offers himself for re-appointment.

V. Changes in Directors & Key Managerial Personnel

During the year there are following changes in Directors:

Sr No. Particulars Date of Event
1. Appointment of Mr. Jawahar Desai as Additional Director (Non- executive independent director) 14th November 2021
2. Appointment of Mr. Ajitsingh Ghorpade as Additional Director (Non- executive independent director) 14th November 2021
3. Appointment of Mrs. Shejal Shah as Additional Director (Executive Director) 14th November 2021
4. Cessation of Mrs. Rajashri Kovil from post of Independent Director Cessation of 1st February 2022
5. Mr. Anant Sawant from post of Independent Director 1st February 2022

Mr. Nitin K. Shah Managing Director of the Company resigned on 6th April2022.

CHANGES IN KEY MANAGERIA PERSONNEL

There are no changes in Key Managerial Personnel during the year under review exceptmention above.

VI. Meetings and Attendance of the Board

The Board meets at regular intervals to discuss and decide on company/business policyand strategy apart from other Board business. The notice of Board meeting is given well inadvance to all the Directors. Meetings of the Board are held in Bhiwandi at theRegistered Office. The Agenda of the Board meetings is circulated at least a week prior tothe date of the meeting. The Agenda for the Board and Committee meetings includes detailednotes on the items to be discussed at the meeting to enable the Directors to take aninformed decision.

The Board met 5 (Five) times in the Financial Year 2021-22. The maximum intervalbetween any two meetings did not exceed 120 days. Attendance of each director in boardmeeting as follows:

Sr. no. Date of Meeting Board Strength No. of Directors Present
1 30.06.2021 8 8
2 06.09.2021 8 8
3 14.11.2021 8 8
4 01.02.2022 9 9
5 31.03.2022 9 9

VII. Separate Meeting of Independent Directors:

As stipulated by the Code of Independent Directors under the Companies Act 2013 aseparate meeting of the Independent Directors of the Company was held on 31stMarch 2022 to review the performance of Non-Independent Directors (including theChairman) and the entire Board. The Independent Directors also reviewed the qualitycontent and timeliness of the flow of information between the Management and the Board andits Committees which is necessary to effectively and reasonably perform and dischargetheir duties

VIII. Company's Policy on Directors' Appointment and Remuneration:

The Policy of the Company on Directors' appointment and remuneration including criteriafor determining qualifications positive attributes independence of a Director and othermatters provided under section 178(3) are uploaded on company's websitewww.jakhariafabric.com

IX. Annual Evaluation by the Board:

Pursuant to the provisions of the Companies Act 2013 and Regulation 17 (10) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Nomination andRemuneration Committee has laid down the criteria for evaluation of the performance ofindividual Directors and the Board as a whole. Based on the criteria the exercise ofevaluation was carried out through a structured process covering various aspects of theBoard functioning such as composition of the Board and committees experience &expertise performance of specific duties & obligations attendance contribution atmeetings & Strategic perspectives or inputs regarding future growth of company etc.The performance evaluation of the Chairman and the Non-Independent Directors was carriedout by the Independent Director. The performance of the Independent Directors was carriedout by the entire Board (excluding the Director being evaluated). The Directors expressedtheir satisfaction with the evaluation process.

13. COMMITTEES OF THE BOARD:

The Company has following committees:

I. Audit Committee

The Company has reconstituted their Audit Committee on 1st February 2022 inaccordance with Section 177(1) of the Companies Act 2013 and Regulation 18 of the SEBI(LODR) Regulations 2015. The details of which have been provided onwww.jakhariafabric.com. There has been no instance where the Board of Directors had notaccepted any recommendation of the Audit Committee.

During the financial year ended 31st March 2022 5 (Five) Audit Committee Meetingswere held on the following dates:

(1) 30.06.2021

(2) 06.09.2021

(3) 14.11.2021

(4) 01.02.2022

(5) 31.03.2022

The Reconstituted Audit Committee comprises of the following Directors of the Company:

Sr. No. Name No. of meeting entitled to attend No. of meetings attended during the year
1 Mr. Mukul Vora -Independent Director (Chairperson of committee) 5 5
2 Mr. Anant Sawant -Independent Director (Member of committee)* 3 3
3 Mr. Jignesh Shah - Chairman & Executive Director (Member of committee) 5 5
4 Mr. Jawahar Desai- Additional Independent Director (Member of committee)* 2 2

*Mr. Anant Sawant ceased to be a member of the Committee and Mr. Jawahar Desai wasappointed as a member of the Committee w.e.f. 1st February 2022.

II. Nomination and Remuneration Committee:

The Company has reconstituted their Nomination and Remuneration Committee on 1stFebruary 2022 in accordance with section 178 of the Companies Act 2013 and the SEBI(LODR) Regulations 2015 the details of which have been provided onwww.jakhariafabric.com

During the financial year ended 31st March 2022 5 (Five) Nomination and RemunerationCommittee Meetings were held on the following dates:

(1) 30.06.2021 (2) 06.09.2021 (3) 14.11.2021 (4) 01.02.2022 (5) 31.03.2022

The Reconstituted Nomination and Remuneration Committee comprises of the followingDirectors of the Company:

Sr. No. Name No. of meeting entitled to attend No. of meetings attended during the year
1 Mrs. Rajashri Kovil - Independent Director (Chairperson of Committee)* 3 3
2 Mr. Jawahar Desai- Additional Independent Director (Chairperson of committee)* 2 2
3 Mr. Anant Sawant -Independent Director (Member of Committee)** 3 3
4 Mr. Ajitsingh Ghorpade- Additional Independent Director (Member of committee)** 2 2
5 Mr. Mukul Vora -Independent Director (Member of Committee) 5 5

*Mrs. Rajashri Kovil ceased to be the Chairperson of the Committee and Mr. JawaharDesai was appointed as chairperson of the Committee w.e.f. 1st February 2022.

**Mr. Anant Sawant ceased to be a member of the Committee and Mr. Ajitsingh Ghorpadewas appointed as a member of the Committee w.e.f. 1st February 2022.

III. Stakeholders' Relationship Committee:

The Company has reconstituted their Stakeholders' Relationship Committee on 1stFebruary 2022 in accordance with section 178 of the Companies Act 2013 and the SEBI(LODR) Regulations 2015 the details of which have been provided onwww.jakhariafabric.com. The Committee considers and approves various requests regardingannual report and to redress complaints of the shareholders.

During the financial year ended 31st March 2022 5 (Five) Stakeholders' RelationshipCommittee Meetings were held on the following dates:

(1) 30.06.2021

(2) 06.09.2021

(3) 14.11.2021

(4) 01.02.2022

(5) 31.03.2022

The Reconstituted Stakeholders' Relationship Committee comprises the followingDirectors:

Sr. No. Name No. of meeting entitled to attend No. of meetings attended during the year
1 Mr. Anant Sawant -Independent Director (Chairperson of Committee)* 3 3
2 Mr. Ajitsingh Ghorpade-Additional Independent Director (Chairperson of Committee)* 2 2
3 Mrs. Rajashri Kovil -Independent Director (Member of Committee)** 3 3
4 Mr. Jawahar Desai- Additional Independent Director (Member of committee)** 2 2
5 Mr. Nitin Shah -Managing Director (Member of Committee) 5 5

*Mr. Anant Sawant ceased to be the Chairperson of the Committee and Mr. AjitsinghGhorpade was appointed as chairperson of the Committee w.e.f. 1st February2022.

**Mrs. Rajashri Kovil ceased to be a member of the Committee and Mr. Jawahar Desai wasappointed as a member of the Committee w.e.f. 1st February 2022.

IV. Corporate Social Responsibility (CSR) Committee:

The Company has reconstituted their CSR Committee on 1st February 2022 inaccordance with the provisions of section 135 of the Companies Act 2013.

During the financial year ended 31st March 2022 2 (Two) Corporate SocialResponsibility Committee Meetings were held on the following dates:

(1) 30.06.2021 & (2) 31.03.2022

The Reconstituted CSR Committee comprises the following Directors:

Sr. No. Name No. of meeting entitled to attend No. of meetings attended during the year
1 Mr. Anant Sawant -Independent Director (Chairperson of Committee)* 1 1
2 Mr. Jawahar Desai- Additional Independent Director (Chairperson of committee)* 1 1
3 Mr. Nitin Shah -Managing Director (Member of Committee) 2 2
4 Mr. Jignesh Shah -Chairman & Executive Director (Member of Committee) 2 2

*Mr. Anant Sawant ceased to be the Chairperson of the Committee and Mr. Jawahar Desaiwas appointed as chairperson of the Committee w.e.f. 1st February 2022.

14. CORPORATE SOCIAL

RESPONSIBILITY:

As a part of its initiative under the Corporate Social Responsibility ("CSR")drive the company has undertaken projects in accordance with Schedule — VII of theact and the Company's CSR Policy. The Report of CSR activities are required under theCompanies (Corporate Social Responsibility Policy) Rules 2014 is annexed and marked as "AnnexureIII" which forms an part of this Report.

15. STATUTORY AUDITOR & AUDIT REPORT:

In terms of provisions of the Companies Act 2013 at the 13th Annual General Meeting(31.12.2020) of the Company M/s. SHAH SHROFF & ASSOCIATES Chartered Accountants(Firm Registration No. 0128920W) Mumbai were appointed as Statutory Auditors of theCompany to hold the office from the conclusion of the 13th annual general meeting till theconclusion of 18th annual general meeting to be held in the year 2025. They have confirmedthat they are not disqualified from continuing as auditors of the company.

As required under Regulation 33(d) of the SEBI (LODR) Regulation 2015 the auditor hasconfirmed that they holding a valid certificate issued by the Peer Review Board of theInstitute of Chartered Accountants of India. Board is pleased to inform that there is nosuch observation made by the Auditors in their report which needs any explanation by theBoard. The Notes on financial statement referred to in the Standalone & ConsolidatedAuditors' Reports are selfexplanatory and do not call for any further comments. TheStandalone & Consolidated Auditors' Report does not contain any qualificationreservation adverse remark or disclaimer.

16. SECRETARIAL AUDITOR:

The Board of Directors on the recommendations of the Audit Committee of the Companyhas appointed M/s. KMC & ASSOCIATES Company Secretaries Mumbai [ICSIMembership No. FCS - F11427 & Certificate of Practice No. 17042] as the SecretarialAuditors of the Company for the financial year 2021-2022.

The Secretarial Audit Report in Form No. MR-3 submitted by the said SecretarialAuditors do not contain any major adverse remarks and qualifications hence do not callfor any further explanation/s by the Company. The Secretarial Audit Report in Form No.MR-3 submitted by the said Secretarial Auditors for the financial year 2021-2022 formspart of the Annual Report as "Annexure IV" to the Board's report.

CERTIFICATION FROM COMPANY SECRETARY IN PRACTICE M/s. KMC & ASSOCIATES

Practicing Company Secretaries has issued a certificate required under the ListingRegulations Board of the Company has been debarred or disqualified from being appointedor continuing as director of the Company by the SEBI/Ministry of Corporate Affairs or anysuch statutory authority. The Certificate is enclosed with this report as "Annexure-IV"

17. INTERNAL AUDITORS:

Pursuant to Section 138 of the Companies Act 2013 read with the Companies (Accounts)Rules 2014 (as amended) the Board of Directors on the recommendations of the AuditCommittee of the Company is appointed M/s R M F & Co. Chartered AccountantsMumbai [ICAI Firm Registration No.-153788W] as the Internal Auditors of the Company forthe financial year 2021-2022 ended on 31.03.2022. The Internal Audit Finding/s andReport/s submitted by M/s R M F & Co. during the financial year to the AuditCommittee and Board of Directors of the Company do not contain any adverse remarks andqualifications hence do not call for any further explanation/s by the Company.

18. COST AUDITORS:

As per the requirement of the Central Government and pursuant to section 148 of theCompanies Act 2013 read with Companies (Cost Records and Audit) Rules 2014 as amendedfrom time to time your company hereby confirms that the provisions of this section arenot applicable hence your company is not required to appoint cost auditor for thefinancial year 2021-22.

19. DISCLOSURE FOR FRAUD AGAINST THE COMPANY:

In terms of provision of section 134(3)(ca) of the Companies Act 2013 There were noinstances of fraud which are reported by Auditors of the Company under section 143(12) ofthe Companies Act 2013 to the Audit Committee.

20. CODE OF CONDUCT:

Regulation 17(5) of the SEBI (LODR) Regulations 2015 requires listed companies to laydown a Code of Conduct for its directors and senior management incorporating duties ofdirectors as laid down in the Companies Act 2013.

The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and specified employees in the course of day to day businessoperations of the Company. The Company believes in "Zero Tolerance" againstbribery corruption and unethical dealings / behavior in any form and the Board has laiddown certain directives to counter such acts. The Company has adopted a Code of Conductfor all Directors and Senior Management of the Company and same is hosted on the websiteof the company i.e. www.jakhariafabric.com

The Code lays down the standard procedure of business conduct which is expected to befollowed by the Directors and the designated employees in their business dealings and inparticular on matters relating to integrity in the work place in business practices andin dealing with stakeholders. The Code gives guidance through examples on the expectedbehavior from an employee in a given situation and the reporting structure. All the BoardMembers and the Senior Management personnel have confirmed compliance with the Code.

21. CORPORATE GOVERANANCE:

The Company being listed on the EMERGE Platform of National Stock Exchange of IndiaLimited and therefore pursuant to Regulation 15(2)(b) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 Regulation 27 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and Part C of Schedule V relating to complianceof Corporate Governance is not applicable to the Company. Further The Company is notrequired to comply with requirements as specified in Part E of Schedule II pursuant toRegulation 27(1) SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015and submitting Compliance Report on Corporate Governance on quarterly basis pursuant toRegulation 27(2) SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.Hence no Corporate Governance Report is required and therefor it is not forming part ofthis Annual Report. It is pertinent to mention that the Company follows majority of theprovisions of the corporate governance voluntarily as a part of Good Corporate Governance.

22. INDUSTRIAL RELATIONS:

During the year under review your Company enjoyed cordial relationship with workers andemployees at all levels.

23. CHANGE IN THE NATURE OF BUSINESS:

During the year under review there is no change in the nature of the business andcommercial activities of the company.

24. DEPOSITS:

During the financial year ended 31 March 2022 under review the Company has neitherinvited nor accepted any public deposits within the meaning of Section 73 and 74 of theCompanies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014 (asamended). As such no specific details prescribed in Rule 8(1) of the Companies (Accounts)Rules 2014 (as amended) are required to be given or provided.

25. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

Your Company is committed to highest standards of ethical moral and legal businessconduct. Accordingly the Board of Directors have formulated a Whistle Blower Policy whichis in compliance with the provisions of Section 177 (9) of the Companies Act 2013 and theregulation 22 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations2015 The Company has adopted a Whistle-Blower Policy for Directors and employees toreport genuine concerns and to provide for adequate safeguards against victimization ofpersons who may use such mechanism. The details of the Vigil Mechanism Policy has postedon the website of the Company at www.jakhariafabric.com

26. PREVENTION OF INSIDER TRADING:

In view of the SEBI (Prohibition of Insider Trading) Regulation 2015 the Company hasadopted a Code of Conduct for Prevention of Insider Trading with a view to regulatetrading in securities by the Directors and designated employees of the Company. Thedetails of the Insider Trading Policy has posted on the website of the Company atwww.jakhariafabric.com

The Code requires Trading Plan pre-clearance for dealing in the Company's shares andprohibits the purchase or sale of Company shares by the Directors and the designatedemployees while in possession of unpublished price sensitive information in relation tothe Company and during the period when the Trading Window is closed. However there wereno such instances in the Company during the year 2021- 22.

27. RISK MANAGEMENT:

A well-defined risk management mechanism covering the risk mapping and trend analysisrisk exposure potential impact and risk mitigation process is in place. The objective ofthe mechanism is to minimize the impact of risks identified and taking advance actions tomitigate it. The mechanism works on the principles of probability of occurrence andimpact if triggered. A detailed exercise is being carried out to identify evaluatemonitor and manage both business and nonbusiness risks.

The Board of Directors of the Company and the Audit Committee shall periodically reviewand evaluate the risk management system of the Company so that the management controls therisks through properly defined network. Head of Departments shall be responsible forimplementation of the risk management system as may be applicable to their respectiveareas of functioning and report to the Board and Audit Committee.

The Company has not made Risk Management Committee but the Board of Directors andAudit Committee is looking after the Risk Management of the Company.

28. MEETINGS OF THE MEMBERS:

During the year under review 14th Annual General Meeting of the Company washeld on 30.09.2021.

29. DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the requirement under section 134(3)(C) of the Companies Act 2013 withrespect to Directors' Responsibility Statement it is hereby confirmed that:

(i) in the preparation of the annual accounts the applicable Accounting Standards hadbeen followed along with proper explanation relating to material departures;

(ii) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for the year ended for that period;

(iii) the directors had 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 directors had prepared the annual accounts on a going concern basis;

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

(vi) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

30. MANAGEMENT DISCUSSION AND ANALYSIS REPORTS:

As per Regulation 34 (e) read with schedule V of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") the management Discussion and Analysis Report of the Company for theyear ended is set out in this Annual Report as "Annexure-V".

31. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT 2013:

Details of Loans (Secured or unsecured) Guarantee provided in connection with anyloan/s availed and Investments pursuant to the section 186 of the Companies Act 2013 readwith the Companies (Meetings of Board and its Powers) Rules 2014 (as amended) are givenin the notes to the Financial Statements.

32. INTERNAL CONTROL SYSTEMS:

The Company's internal control systems are adequate and commensurate with the natureand size of the Company and it ensures:

• Timely and accurate financial reporting in accordance with applicable accountingstandards.

• Optimum utilization efficient monitoring timely maintenance and safety of itsassets.

• Compliance with applicable laws regulations and management policies.

33. INTERNAL FINANCIAL CONTROL FOR FINANCIAL STATEMENTS:

Your Company has an effective internal financial control and risk-mitigation systemwhich are constantly assessed and strengthened with new/revised standard operatingprocedure. The Company's internal financial control system is commensurate with its sizescale and complexities of its operations.

34. HUMAN RESOURCES:

The Company treats its "Human Resources" as one of its most important assets.Your Company continuously invests in attraction retention and development of talent on anongoing basis. The Company thrust is on the promotion of talent internally through jobrotation and job enlargement.

35. RATIO OF THE REMUNERATION OF EACH DIRECTOR TO THE MEDIAN EMPLOYEE'S REMUNERATIONAND PARTICULARS OF EMPLOYEES:

Pursuant to provision of section 197 of Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the detailsof employees given in the "Annexure-VI"

During the year none of the Directors KMP and Employees received remuneration inexcess in accordance with the provisions of Section 197 of the Companies Act 2013 readwith Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.Therefore there is no information to disclose in terms of the provisions of the CompaniesAct 2013.

36. RELATED PARTY TRANSACTIONS:

All related party transactions that were entered during the financial year were on thearm's length basis and were in the ordinary course of business and do not attract theprovisions of section 188 of the Companies Act 2013. Thus disclosure in form AOC-2 isnot required. All Related Party Transactions were placed before the Audit Committee forapproval. A policy on the related party Transitions was framed & approved by the Boardand posted on the Company's website at www.jakhariafabric.com

However you may refer to Related Party transactions as per the Accounting Standardsin the Notes forming part of financial statements.

37. INVESTORS EDUCATION AND PROTECTION FUND

During the financial year 2021-2022 under review there were no amount/s which isrequired to be transferred to the Investor Education and Protection Fund by the Company.As such no specific details are required to be given or provided.

38. DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION& REDRESSAL) ACT 2013:

To prevent sexual harassment of women at work place The Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 has been notified on 9thDecember 2013. The Company has zero tolerance for sexual harassment at workplace in linewith provisions of the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 and rules there under for prevention and redressal of complaintsof sexual harassment at workplace. During the year under review no complaints werereceived by the Company relating to sexual harassment at workplace. The Management of theCompany endeavors to provide safe environment for the female employees of the Company.

39. REGISTRAR AND SHARE TRANSFER AGENT:

The Company has appointed Bigshare Services Private Limited as its Registrar and ShareTransfer Agent. The Corporate Office of Bigshare Services Pvt. Ltd. situated at "1stFloor Bharat Tin Works Building Opp. Vasant Oasis Makwana Road Marol Andheri EastMumbai-400059 Maharashtra.

40. DEMATERIALISATION OF SECURITIES:

The Company's Equity Shares are admitted in the system of Dematerialization by both theDepositories namely NSDL and CDSL. As on 31st March 2022 3830500 equityshares dematerialised through depositories viz. National Securities Depository Limited andCentral Depository Services (India) Limited which represents whole 94.26 % of thetotal issued subscribed and paid-up capital of the Company as on that date. 233330equity shares are in physical form. The ISIN allotted to your Company is INE00N401018.

41. COMPLIANCES OF SECRETARIAL STANDARDS:

The Board of Directors confirms that the Company has duly complied and is incompliance with the applicable Secretarial Standard/s namely

Secretarial Standard-1 ('SS-1') on Meetings of the Board of Directors and SecretarialStandard -2 ('SS- 2') on General Meetings during the financial year 2021-2022.

42. GREEN INITIATIVE

Companies Act permits paperless compliance and as a measure of green initiative weappeal to all those members who have not registered their email addresses so far arerequested to register their email address in respect of electronic holding with theirconcerned Depository Participants and/or with the Company.

43. ACKNOWLEDGEMENT:

The Board of Directors wish to express their grateful appreciation for assistance andcooperation received from various Departments of Central & State Governments and Banksduring the year under review. Your directors also wish to place on record theirappreciation for the committed services of all the associates and vendors of the Company.

By order of the Board of Directors

for JAKHARIA FABRIC LIMITED

Sd/-

JIGNESH SHAH

CHAIRMAN & EXECUTIVE DIRECTOR

DIN: 00256315

Place: BHIWANDI

Date: 07.09.2022

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