Jash Engineering Ltd.
|BSE: 535019||Sector: Engineering|
|NSE: JASH||ISIN Code: INE039O01011|
|BSE 05:30 | 01 Jan||Jash Engineering Ltd|
|NSE 00:00 | 18 Sep||180.45||
Jash Engineering Ltd. (JASH) - Director Report
Company director report
The Members of
JASH ENGINEERING LIMITED
Your Directors have pleasure in presenting the 44th Directors' Report of your Companytogether with the Audited Statement of Accounts and the Auditors' Report of your companyfor the financial year ended 31st March 2018.
1. FINANCIAL HIGHLIGHTS
The financial statements of the Company have been prepared in accordance with theGenerally Accepted Accounting Principles in India (Indian GAAP) . The standalone andconsolidated financial highlights of your Company for the Financial Year ended March 31st2018 are summarized below:
A. STANDALONE FINANCIAL HIGHLIGHTS
B. CONSOLIDATED FINANCIAL HIGHLIGHTS
2. STATE OF AFFAIRS OF THE COMPANY:
Your Company is engaged in manufacturing of water control gates flap valves knifegates valves energy dissipating valves water hammer control valves fine and coarsescreens screening conveying washing and compaction equipment industrial valves for bulksolids handling hydro power screw generator screw pump and process equipment likedetritors clarifiers clariflocculators thickeners decanters aerators tricklingfilters dissolved air flotation (DAF) units rotary drum slackers rake classifierspressure sand filters etc..The products of your Company find application in water intakesystems water and waste water pumping stations and treatment plants storm water pumpingstations water transmission lines power steel cement paper & pulppetrochemicals chemical fertilizers and other process plants.
Your Company offers a single stop solution under one roof including Design CastingFabrication Assembly &Testing and provides the most varied range of these products inlargest possible sizes in diversifies material options. In fact not many companies in ourline of business can claim this. Our manufacturing facilities are equipped with mostupdated and modern manufacturing techniques enabling us to produce best quality and inmost competitive prices for the type of product technology that we offer. In the domesticmarket the company is a distinct leader in most of the product groups and in theinternational markets the company is edging towards leadership position for water controlgates screens and knife gate valves in many individual countries.
Your Company's aims to be within the best companies in the world in its line ofbusiness and within first 5 worldwide in water control gates business. To achieve this thecompany is continuously investing in state of art facility and modern technology in allits facilities as well as in design department. Your Company with its team of over 500employees is committed to offer the most varied range and latest technology in each of itsproducts. To ensure this your Company is continuously investing in development of newproducts & technologies either on its own or through collaboration with suitabletechnology partner or through acquisitions. This has enabled your Company to become anindustry leader within India and in many countries worldwide in most of the productsmanufactured by the company and also ensured acceptance of our products worldwide. As aresult the company today supplies products to over 40 countries worldwide and aims toachieve 60-65% of its turnover from exports by 2021-22.
(A) YEAR IN RETROSPECT
The financial year 2017-18 was below average for the company as no significant growthwas achieved in the company's turnover. The small growth that was achieved was on thebasis of high growth achieved in export business.
The standalone total revenue of the Company for the year at Rs. 15461.79 lacs (Rs.1546.17 million) shows a growth of approximately 4.6 % over the previous yearturnover of Rs. 14782.90 lacs. (Rs. 1478.28 million) . The standalone domestic sales ofthe Company during the year was Rs. 9781.46 lacs (Rs. 978.14 million) as compared toprevious year sales of Rs. 10216.46 lacs (Rs.1021.64 million) exhibiting a decrease of4.4% over the previous year. The standalone export sales of the Company during the yearwas Rs. 5175.95 lacs (Rs. 517.59 million) as compared to previous year sales of Rs.4319.29 lacs (Rs. 431.92 million) exhibiting an increase of 19.83 % over the previousyear.
The net profit of the Company for the year was Rs. 733.51 lacs (Rs. 73.31 million) ascompared to previous year net profit of Rs. 1034.02 lacs (Rs. 103.40 million) exhibitinga decrease of 29.6 % over the previous year. The Net profit decreased as a resultof not achieving the desired growth in sales turnover because of which the fixed overheadsate away the profits. Most of infrastructure companies in India are under financial stressand not being able to pay advances in time or open LC or make payment and take delivery ofordered materials. Once a client is not able to take delivery of a lot of finished goodsin time and delays in making payment the Company prefers to slow down on production ofsubsequent lots of the ordered material of this client. As a result of this situationthere is a general delay in ensuring that pre-decided sales targets are met even whenenough orders are available.
Other reasons for reduction in net profit was addition of new products in portfolio ofCompany products during the year as these products were competitively priced to get breakthroughs in market and sale of products to Rodney Hunt at a competitive price to growpresence in US market.
(ii) PRODUCT DEVELOPMENT
The highlight of the year was the effort put in by the company in bringing toproduction those new products which were taken up for development in the year 2016-17 suchas Rodney Hunt Integral guide cast iron sluice gate Knife gate valves of ZFI Series inDuctile / Cast iron Screw Conveyors for Bulk Handling Tilting weir gates etc.
(B) PROSPECTS FOR YEAR 2018-19
(i) DOMESTIC MARKET SITUATION:
The domestic order book position of the Company as on 1st August 2018 (Orders in handas on 1st April 2018 plus orders received till31stJuly 2018 less sales effected till31stJuly end 2018) is Rs. 11762.60 Lacs
Further orders worth Rs. 686.8 lacs (Rs. 68.68 million) are already negotiated andexpected to be received within next two month from domestic market.
Overall the company performance in the domestic market is expected to improve based onpossible revival in the Indian water and waste water projects business strong order bookposition new product launches and general improvement in projects execution. The onlycause of worry in achieving this is the strict financial norms put in place by banks inIndia for funding of infrastructure companies which may not allow them to achieve projectsexecution in time resulting into our not being able to meet our sales target.
(ii) INTERNATIONAL MARKET SITUATION:
The export order book position of the Company as on 1st August 2018 (Orders in hand ason 1st April 2018 plus orders received till 31stJuly 2018 less sales effected till31stJuly 2018) is Rs.8089.90 Lacs.
Further orders worth Rs. 684.4lacs (Rs. 68.44million) are already negotiated andexpected to be received within next two month from export market.
Overall the company performance in the international market is expected to improvebased on healthy response to its product in the North American market after acquisition ofRodney Hunt entry into new markets and value engineering initiatives to improve productperformance and reduce the cost of products. As a result of all these initiatives and thestrong order book position the company expects to significantly improve on export salesin the year 2018-19 and achieve a growth of over 50%.The company does not expect any majorturbulence in execution of export orders due to possible trade restrictions in USA or dueto Brexit or the prevailing situation in middle east.
(iii) SALES GROWTH:
The total order book position of the company as on 31st July 2018 (Orders in hand as on1st April 2018 plus orders received in from 1st April 2018 till 31stJuly less saleseffected till 31st 2018) is Rs. 19852 lacs ( Rs. 1985 Million) .
The company has already achieved sales of over Rs. 5900lacs (Rs. 590 million) till31st July 2018 and in the remaining 8 months the Company expects to achieve further salesof Rs 14000 lacs (Rs. 1400 million) thereby achieving standalone sales in excess of Rs20000 lacs (Rs. 2000 million) .
As a result of strong order book position improving projects execution in the Indianmarket due to impending elections and higher proportion of exports the company in quitehopeful that any shortfall in targeted sales from Indian domestic market in the currentyear may be covered by the gains that company expect from the export markets and in theprocess still achieve the projected growth for the year 2018-19.
(iv) COMPETITIVE ANALYSIS :
The water & wastewater equipment business in the country is consolidated due to thehigh up front capital investment as well as complex technology and brand approval processrequired to enter the segment. This high entry barrier has prevented the entry of smallerplayers to the sector which is dominated by a select few mid size domestic companies aswell as large international companies.
Even the large international companies after over 10 years in the domestic market donot find it easy to establish themselves strongly and achieve scale of operations becauseof these entry barriers and are hence regularly approaching strong domestic players forsome strategic tie up or acquisition. The products being majorly custom built in natureand requiring a tough process of design submittal and review ensures that Chinesecompanies and products does not find easy approval in most English speaking countriesincluding India.
(c) NEW DEVELOPMENTS:
(i) SAP IMPLEMENTATION
The initiative was taken to implement SAP Business One platform in the company in mid2017 and the go live stage is expected to be reached in August 2018.
(ii) DESIGN & PRODUCT DEVELOPMENT ACTIVITIES
3D Drawing Environment and Auto Generation of Drawings : The company has achievedstupendous progress in Auto generation of drawings and the products for which software isready we are now able to complete the work of General Arrangement Drawings andManufacturing drawings within less than 10% of the time taken earlier. Investment in AutoGeneration of drawings will result into our being able to cut down the total deliveryperiod by up to 25 days from that existing earlier reduce error significantly improveprofitability of the company in the long term due to peripheral benefits accrued.
(iii) RODNEY HUNT IN USA:
The Company acquired the brand and entire manufacturing plant and assets of Rodney Huntat Orange Massachusetts for $ 4.27 Million by August 2017. Out of this the Company has :
- Sold equipment and machinery worth $ 0.37 Million in USA
- Sold equipment and machinery worth $ 0.15 Million to Indian operations
- Will sell equipment & inventory worth $ 0.13 Million to Indian operations inAugust / Sept 2018
- Retain Brand IP rights patents plant equipment and machinery worth $ 2.35Million for itself at Orange
- Sell rest of the plant and shed for $ 1.275 Million to an interested buyer
The Company has retained about 60000 Sq. feet of plant shed with cranes & shiftedthe equipment required to start fabrication and assembly plant to this area so as to startUS manufacturing facility. The work on this US manufacturing facility is progressing asplanned and production from this facility at Orange Massachusetts will start by August2018. This plant will employ 6-8 people and will bring in revenue of USD 2-3 milliondollars a year from 2019 onwards by making screens gates and valves. The primary reasonfor this limited facility is to meet the requirements of Build in America projects for USmanufacturing of those orders needing delivery period lesser than 10-12 weeks & forstocking of spare parts and products covered under quick ship program. All other largeorders and orders needing longer lead times will be executed from Indian operations. Anin-principle agreement for the sale of balance land and plant at an approximate value ofUSD 1.275 million is already reached with a buyer and the final agreement is expected tobe executed within August 2018 & proceeds realized in September 2018. Even after aboveis done some equipment is still required to be disposed off before the plant is handedover to buyer.
(iv) INITIAL PUBLIC OFFERING
The Directors are pleased to inform you that the Company's Initial Public Offering(IPO) of 4000800 Equity Shares of face value of Rs. 10/- (Rupees Ten only) by way of BookBuilt Process received an overwhelming response from the investors. The Issue was openedon 28.9.2017 and closed on 3.10.2017. The issue was oversubscribed by approx four times.The allotment cum offer for sale of 4000800 Equity Shares of Rs.10/- each for cash at apremium of Rs. 110/- per share aggregating to Rs. 4800.96 Lakhs under the said IPO wasmade on 11th October 2017. Subsequent to the completion of IPO the paid up equity sharecapital of the Company got increased from Rs. 95.75 Lakhs to Rs.118.36 Lakhs. The tradingof Equity Shares of the Company commenced on National Stock Exchange of India Limited(SME) on 11th October 2017.
The success of IPO reflects the trust faith and confidence that customers businesspartners and markets have reposed in your Company. Your Director place their sincerethanks to all the investors and NSE (SME) Merchant Bankers and all the agencies fortheir guidance and support. The Company's equity shares are regularly being traded at thefloor of the NSE SME platform.
(v) UTILIZATION OF IPO PROCEEDS
The proceeds realized by the Company from the Issue is being utilized as per theObjects of the Issue. The proceeds of the issue is being utilized for to meet workingcapital requirement of our Company Expansion of Manufacturing facilities at Unit I IIand III To acquire leased land and to set- up new manufacturing plant at SEZ Pithampur(i.e. Proposed Unit IV) and General Corporate Purposes. There has been no deviation in theutilization of the IPO proceeds of the Company and the Company has submitted statementtowards the utilization of the issue proceeds under Note no. 44 of the notes to theaccounts of the financials for the FY 2017-18.
(vi) NEW MANUFACTURING PLANT AT SEZ PITHAMPUR (UNIT IV FOR RODNEY HUNT BUSINESS )
The land was transferred in February 2018 and construction of civil works commenced inmid March. The work at the new Unit IV at Pithampur is now going very fast and all thecivil works below floor level is complete and so now onset of monsoon will not affect thepace of work. PEB is delivered in June-July and installed during July -August period sothat all the balance work like flooring and side civil walls can be done during monsoonperiod of July-Sept. Order for machinery will be placed in June - August so that these aredelivered by Oct-Nov by when the civil construction of Unit IV is expected to becompleted. The Company aim to commence trial production by Jan 2019 and commercialproduction at this facility from April 2019.
The Board has recommend a dividend of 10% on f.v. of fully paid up shares i.e. Rs. 1/-per share of Rs.10/- each for the year 2017-18.
4. DIRECTORS' RESPONSIBILITY STATEMENT:
To the best of the knowledge and belief and according to the information andexplanations obtained by them your Directors confirms the following statements in termsof Section 134(3) (c) of the Companies Act 2013:
a. that in the preparation of the annual accounts for the year ended 31st March 2018the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;
b. that such accounting policies as mentioned in Notes to the Financial Statements havebeen selected and applied consistently. Judgments and estimates have been made that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at 31st March 2018.
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 on a going concern basis;
e. that they have laid down internal financial controls for the company and suchinternal financial controls were adequate and were operating effectively.
f. that they have devised proper systems to ensure compliance with the provisions ofall applicable laws and such system are adequate and operating effectively.
5. SHARE CAPITAL :
The paid up equity share capital of the Company was as on 31st March 2018 was 1183.65lacs divided into 11836598 equity shares of Rs. 10/- each. During the year allotmentcum offer for sale of4000800 Equity Shares of Rs 10/- each has issued for cash at apremium of Rs 110/- per share aggregating to Rs 4800.96 Lakhs under the Initial publicoffer as per the Prospectus date 4th October 2017. The Company has not issued shares withdifferential voting rights or granted stock option or sweat equity.
6. TRANSFER TO RESERVES IN TERMS OF SECTION 134 (3) (J) OF THE COMPANIES ACT2013:
For the financial year ended 31st March 2018Your Company has not transferred anyamount to General Reserve out of profits available for appropriation. During the year theCompany has received security premium amount 2487.31 lacs in the public issue of 22.61lacs equity shares of Rs. 10/- each at a premium of Rs. 110/- per share allotted on 7thOctober 2017 and the same transferred to Securities Premium Account.
Your Company has not accepted deposit from the public falling within the ambit ofSection 73 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules2014 and there were no remaining unclaimed deposits as on 31st March 2018. Further theCompany has not accepted any deposit or loans in contravention of the provisions of theChapter V of the Companies Act 2013 and the Rules made there under.
8. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Company has complied in respect of loan & guarantees and investment pursuant toSection 186 of the Companies Act 2013.
9. CORPORATE SOCIAL RESPONSIBILITY:
The Company has developed and implemented Corporate Social Responsibility initiativesas the said provisions are applicable in view of the profits and turnover of the companyyour Company was required to undertake CSR projects during the year 2017-18 under theprovisions of section 135 of the Companies Act 2013 and the rules made their under. Aspart of its initiatives under "Corporate Social Responsibility (CSR) " theCompany has undertaken activities which are in accordance with CSR Policy of the Companyand Schedule VII of the Companies Act 2013.The Annual Report on CSR activities is annexedherewith as "Annexure A".
10. PARTICULARS OF INTERNAL COMMITTEE AND COMPLAINTS RECEIVED UNDER SEXUAL HARASSMENTOF WOMEN AT WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT 2013:
The Company has constituted the Internal Committee under the provisions of the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 headedby the senior women employee of the Company. There is no complaint received during theyear and pending at the ended financial year under provisions of the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013.
OCCUPATIONAL HEALTH & SAFETY (OH&S)
This initiative involved positive engagement of personnel on the plant at every levelwith regard to safety two key areas of focus were identified namely Facility Managementfor the employees and Equipment Tools & Material Management. The Facility Managementinitiative was implemented to ensure adequate welfare facilities for labor such aswashrooms with bathing facilities rest rooms availability of drinking water etc. TheEquipment Tools & Material Management Program ensured that the tools used by themwere safe. The process of screening were aligned with the Company's objectives to ensure'Zero Harm'.
11. RISK MANAGEMENT:
Risks are events situations or circumstances which may lead to negative consequenceson the Company's businesses. Risk management is a structured approach to manageuncertainty. A formal enterprise wide approach to Risk Management is being adopted by theCompany and key risks will now be managed within a unitary framework. As a formalroll-out all business divisions and corporate functions will embrace Risk ManagementPolicy and Guidelines and make use of these in their decision making. Key business risksand their mitigation are considered in the annual/strategic business plans and in periodicmanagement reviews. The risk management process in our multi-business multi-siteoperations over the period of time will become embedded into the Company's businesssystems and processes such that our responses to risks remain current and dynamic.
The Audit Committee has been designated by the Board for reviewing the adequacy of therisk management framework of the Company the key risks associated with the businesses ofthe Company and the measures are taken in place to minimize the same and thereafter thedetails are presented to and discussed at the Board meeting.
12. INTERNAL CONTROL:
Given the nature of business and size of operations Your Company's Internal ControlSystem has been designed to provide for:
Accurate recording of transactions with internal checks and prompt reporting.
Adherence to applicable Accounting Standards and Policies.
Compliance with applicable statutes policies and management policies andprocedures.
Effective use of resources and safeguarding of assets.
The Internal Control System provides for well documented policies/guidelinesauthorizations and approval procedures. Your Company through its Internal Auditors M/s.Mahesh C Solanki & Co Chartered Accountants engaged as Internal auditors for thefinancial year 2017-18 carried out periodic audits at all locations and functions based onthe plan approved by the Audit Committee and brought out any deviation to Internal Controlprocedures. The observations arising out of the audit are periodically reviewed andcompliance ensured.
The summary of the Internal Audit observations and status of implementation aresubmitted to the Audit Committee. The status of implementation of the recommendations isreviewed by the Audit Committee on a regular basis and concerns if any are reported tothe Board.
Your Company as per the requirement of the Section 143 (3) (i) has carried outextensive testing of the internal financial controls in the Company which has also beenduly audited by the Statutory Auditors of the Company and which have been found to beadequate and satisfactory.
13. VIGIL MECHANISM POLICY FOR THE DIRECTORS AND EMPLOYEES :
The Company's Board of Directors pursuant to the provisions of Section 177(9) of theCompanies Act 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers)Rules 2014 has framed 'Vigil Mechanism Policy' for Directors and employees of theCompany. The policy is to provide a mechanism which ensures adequate safeguards toemployees and Directors from any victimisation on raising of concerns of any violations oflegal or regulatory requirements incorrect or misrepresentation of any financialstatements and reports and so on. The Vigil Mechanism Policy is hosted on the Company'swebsite.www.jashindia.com .
14. SUBSIDIARY ASSOCIATE AND JOINT VENTURE OF THE COMPANY
The details of wholly owned subsidiaries continuing having status of the same is givenas required under section 129(3) of the Act read with the Companies (Accounts) Rules2014 in the FORM AOC-1 as containing part of the Annual Report annexed as "Annexure-B."
Further the Company does not have any associate or joint venture company at thebeginning or closing or any time during the year 2017-18.
There are no companies which become/ceased to be subsidiaries JVs or Associate duringthe year of your company.
In accordance with third provision of section 136(1) of the Companies Act 2013 theAnnual report of the company containing therein its subsidiaries basis and theconsolidated financial statements has been placed on the website of the Company. Furtheras per fourth proviso of the said section audited annual accounts of the subsidiarycompany have also been posted on the website of the Company. The consolidated financialstatement of the company is also annexed as containing part of the annual report.
15. BOARD OF DIRECTORS THEIR MEETINGS & KMPs
The Board of directors are comprising of total (7 Seven) Directors which includes 4(Four) Independent. The Board members are highly qualified with the varied experience inthe relevant field of the business activities of the Company which plays significantroles for the business policy and decision making process and provide guidance to theexecutive management to discharge their functions effectively.
Our definition of 'Independence' of Directors or Regulation is derived from Regulation16 of SEBI (LODR) Regulations 2015 and Section 149(6) of the Companies Act 2013. TheCompany is having total 7 directors in the Board out of them the following directors areindependent directors;
1. Mr. DurgalalTuljaram Manwani (w.e.f. 25.8.2017)
2. Mr. Sunil Choksi (w.e.f. 25.8.2017)
3. Mr. Brij Mohan Maheshwari (w.e.f. 25.8.2017)
4. Ms. Sunita Kishnani (w.e.f. 25.8.2017)
As per provisions of the Companies Act 2013 Independent Directors were appointed fora term of 5 (five) consecutive years but shall be eligible for re-appointment on passingof a special resolution by the Company and shall not be liable to retire by rotation.
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 2017-18.
Changes in Directors and Key Managerial Personnel
1. Mr. Tushar Kharpade having Membership of ICSI who have been appointed as a CompanySecretary of the Company w.e.f. 3rd April 2017.
2. Mr. Dharmendra Jain who was working as General Manager-Finance in the Company sincelast 10 years; was designated as Chief Financial Officer and Key Managerial Personnel ofthe Company w.e.f. 26th July 2017.
3. Mr. Rohit A. Patel (DIN: 00174467) Independent Director has resigned from theBoard w.e.f. 25th August 2017 vide his resignation letter dated 25th August 2017. TheBoard of Directors at their meeting held on 25th August 2017 accepted his resignation.Your Board place on record their sincere thanks for the valuable services rendered by themin the capacity of Independent Director of the Company.
4. Mr. Neeraj Desai (DIN: 003356873) Independent Director has resigned from the Boardw.e.f. 25th August 2017 vide his resignation letter dated 25th August 2017. The Board ofDirectors at their meeting held on 25th August 2017 accepted his resignation. Your Boardplace on record their sincere thanks for the valuable services rendered by them in thecapacity of Independent Director of the Company.
5. Mr. DurgalalTuljaram Manwani (DIN: 07114081) has been appointed as AdditionalDirector under Independent Category of the Company w.e.f. 25th August 2017 for a period of5 years. His appointment was also approved by the Members at their Extra Ordinary GeneralMeeting held on 28th August 2017.
6. Mr. Sunil Choksi (DIN: 00155078) has been appointed as Additional Director underIndependent Category of the Company w.e.f. 25th August 2017 for a period of 5 years. Hisappointment was also approved by the Members at their Extra Ordinary General Meeting heldon 28th August 2017.
7. Mr. Brij Mohan Maheshwari (DIN: 00022080) has been appointed as Additional Directorunder Independent Category of the Company w.e.f. 25th August 2017 for a period of 5 years.His appointment was also approved by the Members at their Extra Ordinary General Meetingheld on 28th August 2017.
8. Ms. Sunita Kishnani (DIN : 06924681) has been appointed as Additional Director underIndependent Category of the Company w.e.f. 25th August 2017 for a period of 5 years. Herappointment was also approved by the Members at their Extra Ordinary General Meeting heldon 28th August 2017.
9. Mr. K Mukundan ( DIN: 02756249) has been resigned from the Board of Director w.e.f.12th April 2018 due to their pre occupation. The Board of Directors at their meeting heldon 29th May 2018 noted his resignation. Your Board place on record their sincere thanksfor the valuable services rendered by them in the capacity of Nominee Director of theCompany.
MEETINGS 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 in advance to all the Directors. Meetings ofthe Board are held in Indore at the Registered Office. The Agenda of the Board/Committeemeetings is circulated at least a week prior to the date of the meeting. The Agenda forthe Board and Committee meetings includes detailed notes on the items to be discussed atthe meeting to enable the Directors to take an informed decision.
The following Meetings of the Board of Directors were held during the Financial Year2017-18:
S.No. Date of Meeting
1. 26th April 2017
2. 13th July 2017
3. 25th July 2017
4. 25th August 2017
5. 18th September 2017
6. 13th November 2017
7. 2nd February 2018
16. 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) is annexed with the Report as "AnnexureC" and is uploaded on company's website www.Jashindia.com.
Annual evaluation by the Board
The evaluation framework for assessing the performance of directors comprises of thefollowing key areas:
i. Attendance of Board Meetings and Board Committee Meetings
ii. Quality of contribution to Board deliberations
iii. Strategic perspectives or inputs regarding future growth of company and itsperformance
iv. Providing perspectives and feedback going beyond the information provided by themanagement
v. Commitment to shareholder and other stakeholder interests
The evaluation involves self-evaluation by the Board Member and subsequently assessmentby the Board of directors. A member of the Board will not participate in the discussion ofhis/her evaluation.
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 Company has adopted a Code ofConduct for all Directors and Senior Management of the Company which is applicable witheffect from the date of listing of the Company i.e. 11th October 2017 and same has beenhosted on the website of the company www.Jashindia.com.
17. COMMITTEES OF THE BOARD
The Company has following Committees:
The Company has constituted Audit Committee as per requirement of section 177 of theCompanies Act 2013 and Regulation 18 of the SEBI (LODR) Regulations 2015. The terms ofreference of Audit Committee are broadly in accordance with the provisions of SEBI (LODR)Regulations 2015 and Companies Act 2013. The constitution of the Audit Committee wasapproved by the Board of Directors and was re-constituted as per requirements. The AuditCommittee comprises of the following Directors of the Company:
The Composition of Audit Committee is as follow:
NOMINATION AND REMUNERATION COMMITTEE:
The Company has constituted a Nomination and Remuneration Committee in accordance withsection 178 of the Companies Act 2013 and the SEBI (LODR) Regulations 2015. Theconstitution of the Nomination and Remuneration Committee was approved by a Meeting of theBoard of Directors and was re-constituted on requirements. The Nomination and RemunerationCommittee comprises of the following Directors of the Company:
The Composition of Nomination & Remuneration Committee are as follow:
STAKEHOLDERS' RELATIONSHIP COMMITTEE :
The Company has constituted a shareholder/investors grievance committee("Stakeholders Relationship Committee") to redress complaints of theshareholders.
CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE:
Company has constituted a CSR Committee in accordance with the provisions of section135 of Companies Act 2013. The constitution of the CSR Committee was approved by ameeting of the Board and reconstituted as per requirements. The CSR Committee comprisesthe following Directors:
18. RELATED PARTY TRANSACTIONS
All Related Party Transactions that were entered into during the Financial Year 2017-18were on Arm's Length Basis and were in the Ordinary Course of business. There are nomaterially significant Related Party transactions made by the Company with PromotersDirectors Key Managerial Personnel or other designated persons which may have a potentialconflict with the interest of the Company at large.
All Related Party Transactions were approved by the Audit Committee on omnibus basis orotherwise and the Board. The transactions entered into by the company are audited. TheCompany has developed Related Party Transactions Policy Standard Operating Procedures forpurpose of identification and monitoring of such transactions. The information for theRelated Party Transactions has been given in AOC-2 as "Annexure No D." The RPTPolicy as approved by the Board is available on the Company's website. www.jashindia.com.
19. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/Courts which wouldimpact the going concern status of the Company and its future operations.
20. AUDITORS THEIR REPORT & COMMENTS BY THE MANAGEMENT
M/s Walker Chandiok& Co LLP (Grant Thornton) Chartered Accountants (FirmRegistration No. 001076N/N500013) the Statutory Auditors were reappointed for a term of5 years at Annual General Meeting of the Company held on 30th Sept. 2017 and they haveconfirmed their eligibility under Section 141(3) (g) of the Companies Act 2013 and therules framed hereunder for ratification by the Members for appointment as StatutoryAuditors of the Company for Financial Year 2017-18. As required under Regulation 33(d) ofthe SEBI (LODR) Regulation 2015 the auditor has also confirmed that they hold a validcertificate issued by the Peer Review Board of the Institute of Chartered Accountants ofIndia.
Your Board is pleased to inform that there is no such observation made by the Auditorsin their report which needs any explanation by the Board.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s D. K. Jain & Co. Practicing Company Secretaries to undertook theSecretarial Audit of the Company for the year 2017-18. The Report of the SecretarialAuditors in Form MR-3 is annexed herewith as "Annexure E" of this report.
The Secretarial Audit Report for the year 2017-18 is self explanatory except thefollowing comments made and the management submits their comments;
(a) The company has not filed the form CHG- 1 and MGT -14 with ROC for the borrowingmade by the company for the purchase of motor vehicle and other unsecured loan taken froma group company Patamin Investments Pvt. Ltd. till the date of our report; (b) Some formswere filed by the company after prescribed time along with the adequate additional filingfee and this has reported as compliance by reference of payment of additional fees;
Management Response to Point No. (a) & (b) : Your Company is law abiding entity andfiled the necessary forms & returns with the authorities. The management is hopefuland committed to their level best to streamline the same in future. There was some delayin filing of the particulars forms and has already complied with the same and has paidadditional fees as prescribed.
(c ) Company was required to spend CSR of Rs. 25.52 lakhs during the FY 2017- 18.However the company has not spend any amount till date : Management Response to Point No( c ) : The company has contributed Rs. 0.52 lakhs during the year towards CSRinitiatives.The areas targeted by the Company were new therefore the planning andmanagement of activities was not so smooth and took a reasonable amount of time.
Section 148 of the Companies Act 2013 pertaining to audit of cost records isapplicable to the Company. The Board has appointed M/s M. P. Turakhia& AssociatesCost Accountant to audit the cost records of your company for the financial year 2017-18.
Pursuant to the provisions of Section 138 of the Companies Act 2013 and rulethereunder and regulation 18(3) of SEBI LODR and based on the recommendations of AuditCommittee your Board have reappointed M/s. Mahesh C. Solanki & Co. (FRN 006228C) Chartered Accountants Indore as Internal Auditor of the Company to conduct the InternalAudit of the Company for the FY 2017-18. The Internal Auditors reports directly to theAudit Committee and make comprehensive presentations at the Audit Committee meeting(s) onthe Internal Audit Report.
Your Board has reappointed M/s. Mahesh C. Solanki & Co. (FRN 006228C) CharteredAccountants Indore as Internal Auditor of the Company for the FY 2018-19.
21. DISCLOSURE FOR FRAUDS AGAINST THE COMPANY
In terms of the provisions of section 134 (3) (ca) of the Companies Act 2013 therewere no frauds committed against the Company and persons who are reportable under section141(12) by the Auditors to the Central Government. Also there were no non-reportablefrauds during the year 2017-18.
22. CORPORATE GOVERNANCE:
The Company being listed on the SME Platform of National Stock Exchange Limited isexempted from provisions of Corporate Governance as per Regulation 15 of the SEBI (LODR)Regulations 2015. Hence no Corporate Governance Report is required to be disclosed withAnnual Report. It is pertinent to mention that the Company follows majority of theprovisions of the corporate governance voluntarily.
23. CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the provisions of Section 129(3) of the Companies Act 2013 andRegulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations2015 the Consolidated Financial Statements forms part of this Annual Report and shallalso be laid before the ensuing Annual General Meeting of the Company. The ConsolidatedFinancial Statements have been prepared in accordance with the relevant AccountingStandards.
24. 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 readwith Rule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as"Annexure F".
25. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANYWHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THIS REPORT
Except that as stated in the relevant places the material changes developmentregarding project which is ongoing from the 31st March 2018 till the date of the BoardReports there are no material changes which may affect the financial position of theCompany.
26. NON APPLICABILITY OF THE INDIAN ACCOUNTING STANDARDS (IND-AS)
As per proviso to regulation Rule 4(1) of the Companies (Indian Accounting Standards)Rules 2015 notified vide Notification No.G.S.R.111(E) on 16th Feb. 2015 Companies whoseshares are listed on SME exchange as referred to in Chapter XB of SEBI (Issue of Capitaland Disclosure Requirements) Regulations 2009 are exempted from the compulsoryrequirement of adoption of IND-AS w.e.f. 1st April 2017. As your Company is also listedon SME Platform of NSE is covered under the exempted category and is not required tocomply with IND-AS for preparation of financial statements beginning with period on orafter 1st April 2017.
27. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as "Annexure G."
28. RATIO OF THE REMUNERATION OF EACH DIRECTOR TO THE MEDIAN EMPLOYEE'S REMUNERATIONAND PARTICULARS OF EMPLOYEES
Pursuant to provision of section 197(12) of Companies Act 2013 read with Rule 5(1) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and thedetails of Top 10 employees given in "Annexure H." During the year none of theemployees received remuneration in excess of Rs. One Crore and two lacs or more per annumin accordance with the provisions of Section 197 of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014. Thereforethere is no information to disclose in terms of the provisions of the Companies Act 2013.
29. MANAGEMENT DISCUSSION AND ANALYSIS
In terms of the provisions of Regulation 34 of the SEBI Listing Obligations andDisclosures Requirements Regulations (SEBI LODR) 2015 the management discussion andanalysis is set out in this Annual Report as an "Annexure I."
30. INDUSTRIAL RELATIONS
During the year under review your Company enjoyed cordial relationship with workers andemployees at all levels.
31. 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.
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.
32. CAUTIONARY STATEMENT
The statements made in this Report and Management Discussion and Analysis Reportrelating to the Company's objectives projections outlook expectations and others may be"forward looking statements" within the meaning of applicable laws andregulations. Actual results may differ from expectations those expressed or implied. Somefactors could make difference to the Company's operations that may be due to change ingovernment policies global market conditions foreign exchange fluctuations naturaldisasters etc.
Your Directors acknowledge the dedication and commitment of your company's employees tothe growth of your company and their unstinted support has been integral to your company'songoing success. Your Directors appreciate support of State Bank of India & HDFC BankLtd. the bankers to the company and various government agencies customers suppliersthroughout the year for their support and confidence shown in the management of thecompany. The Directors also gratefully acknowledge support of the NSE Lead Manager ShareTransfer Agent and other intermediaries of the Public Issue of the Company and also to allstakeholders of the Company viz. customers members dealers vendors and other businesspartners for the excellent support received from them during the year.