The Members of
JASH ENGINEERING LIMITED
Your Directors have pleasure in presenting the 46thDirectors' Report of your Company together with the Audited Statement of Accounts and theAuditors' Report of your company for the financial year ended 31stMarch 2020.
1. FINANCIAL HIGHLIGHTS
The financial statements of the Company are in accordance with theIndian Accounting Standard - IND AS and as per the provision of Section 133 of theCompanies Act 2013 (the 'Act') read with Companies (Accounts) Rules 2014 and amendmentsthereof. The standalone and consolidated financial highlights of the Company for thefinancial year ended March 31st 2020 are summarized below:
| || |
|Particulars ||2019-20 ||2018-19 ||2019-20 ||2018-19 |
|Sales and other Income ||21433.48 ||20495.53 ||28564.13 ||25468.51 |
|Expenditure other than financial charges and depreciation ||17121.74 ||17152.73 ||23974.06 ||22512.62 |
|Gross Profit before Interest Depreciation & Taxes ||4311.74 ||3342.8 ||4590.07 ||2955.89 |
|Less: Interest & Financial Charges ||963.76 ||751.82 ||1033.50 ||850.04 |
|Depreciation ||517.60 ||519.91 ||782.22 ||724.87 |
|Less: Earlier years adjustments ||- ||- ||- ||- |
|Net profit before tax for the year ||2830.41 ||2071.07 ||2774.35 ||1380.98 |
|Provisions for tax ||648.67 ||353.29 ||764.67 ||6 1 1 . 69 |
|Net Profit after Tax ||2181.74 ||1717.78 ||2009.68 ||769.59 |
|Less: Other Comprehensive Income ||44.72 ||8.17 ||52.89 ||51.75 |
|Total Co mprehensive Income ||2137.02 ||1709.61 ||1956.79 ||717.84 |
|No. of Equity Shares ||11836598 ||11836598 ||11836598 ||11836598 |
|Earnings Per Share ||18.43 ||14.51 ||16.98 ||6.50 |
2. STATE OF AFFAIRS OF THE COMPANY:
A. BUSINESS ACTIVITIES OF THE COMPANY
Your company is involved in the business of design and manufacture of awide range of equipment for Water Intake Systems Water and Waste Water Pumping Stationsand Treatment Plants Storm Water Pumping Stations Water Transmission Lines PowerSteel Cement Paper & Pulp Petrochemicals Chemical Fertilizers and other processplants. These equipment are Water control gates Mechanized screening systems Screeningconveying and washing systems Knife gate valves Water hammer control valves Energydissipating valves Archimedes screw pumps Micro hydro turbines ClarifiersClariflocculators Flash Mixers Degriters Aerators Thickeners Gravity DecantersTrickling Filters Digester Mixers DAF Units and solid handling valves.
Your company offers a single stop solution under one roof includingDesign Casting Fabrication Assembly & Testing and provides the most varied range ofthese products in largest possible sizes. To ensure this the company is continuouslyinvesting in its manufacturing capability as well as in development of new products &technologies either on its own or through collaboration with suitable technology partnersand leaders in the trade.
The company is a market leader in India for most of the products thatit manufactures and is also among the first 5 in the world in the Water control gatesbusiness. Various brands belonging to the company and its subsidiaries are approved andregistered in most of the countries and this ensures availability of wide export marketfor the company. Over 50% of company business comes from sales outside India and thecompany aims to increase this to nearly 65% in the foreseeable future.
B. YEAR IN RETROSPECT (I) PERFORMANCE
In the financial year 2019-20 the company achieved significant growthin its consolidated turnover as well as profit. The Consolidated total revenue of theCompany for the year at Rs. 28564.13 lacs (Rs. 2856.41 million) shows a growth ofapproximately 12% over the previous year turnover of Rs. 25468.51 lacs (Rs. 2546.85million). The Consolidated net profit of the Company for the year was Rs. 2009.67 lacs(Rs. 200.96 million) as compared to previous year net profit of Rs. 769.59 lacs (Rs.76.95million) showing a growth of approximately 161 % over the previous year. The Netprofit at the consolidated level could have been higher but for the losses sustained inour US subsidiary. Reduction in losses and consequent return to profitability will boostthe net profits at the consolidated level in the coming years.
In the financial year 2019-20 the company achieved moderate growth inits standalone turnover accompanied with significant improvement in profit. The standalonetotal revenue of the Company for the year at Rs. 21433.48 lacs (Rs. 2143.34 million) showsa growth of approximately 4.5% over the previous year turnover of Rs. 20495.53 lacs (Rs.2049.55 million). The net profit of the Company for the year was Rs. 2181.74 lacs (Rs.218.17million) as compared to previous year net profit of Rs. 1717.78 lacs (Rs. 171.78million) showing a growth of approximately 27 % over the previous year.
The standalone domestic sales of the Company during the year was Rs.13420.13 lacs (Rs. 1342.01 million) as compared to previous year sales of Rs. 11783.59lacs (Rs. 1178.36 million) exhibiting an increase of 14% over the previous year. Thestandalone export sales of the Company during the year was Rs. 7142.77 lacs (Rs. 714.28million) as compared to previous year sales of Rs. 8308.19 lacs (Rs. 830.82 million)exhibiting decrease of 14 % over the previous year.
The entire operations of the company were shut down at Indore andPithampur plants from 22nd March 2020 due to Covid-19 lockdown. Operations inChennai and in USA were also closed down during this period. Historically sales of between5-10% of turnover is registered in the last 10 days of the financial year. However due tolockdown this could not happen in this year and as a result of this the standaloneturnover of individual companies the consolidated turnover as well as the overallprofitability of the company declined. The performance of the Company has been creditabledespite these headwinds.
(ii) NEW ACTIVITIES & DEVELOPMENTS
The company had invested in a new manufacturing facility at SEZPithampur in Financial year 2018-19. The Commercial Production at this plant has commencedfrom 12th July 2019 and this facility is now operative for a year and is fullygeared to cater to future export business.
The company developed and manufactured perforated fine travelling bandscreens for the first time in India and has successfully installed and commissioned thesame at 100 MLD Nemmeli Desalination plant at Chennai and at Sea water intake system ofRSPL at Dwarka. This will tremendously boost the company's capability and acceptance tocater to the desalination business in middle east as well as in India.
The Aluminum stoplogs for prevention of flooding at LaGuardia AirportNew York was executed to the expectation of the client with good feedback on quality andworkmanship.
a) SHIVPAD ENGINEERS PVT. LTD. INDIA
Shivpad Engineers Pvt. Ltd. is a wholly owned subsidiary of theCompany operating in Ambattur Industrial Estate Chennai - 600058. Tamilnadu India. Itis engaged in Design Manufacture and Supply of treatment process equipment for WaterTreatment Waste Water Treatment and Sewage Treatment Plants and also Chemical processIndustry equipment related to solid - liquid separation viz. Milk of Lime preparationplant equipment Multi-deck Clarifiers Rake & Screw Classifiers and other ancillarybusiness.
In the financial year 2019-20 the company achieved excellent growth inits turnover accompanied with significant improvement in profit. The total revenue of theCompany for the year at Rs. 1802.68 lacs (Rs. 180.26 million) shows a growth ofapproximately 36% over the previous year turnover of Rs. 1328.50 lacs (Rs. 132.85million). The net profit of the Company for the year was Rs. 337.19 lacs (Rs.33.71million) as compared to previous year net profit of Rs. 249.84 lacs (Rs. 24.98million) showing a growth of approximately 35 % over the previous year.
The company continues to outperform its peers and is on track to becomea major player in Indian market with sales in excess of Rs. 3500 lacs (Rs. 350 million )in 4 year's time.
b) JASH USA INC. / RODNEY HUNT INC. USA
Rodney Hunt Inc is a wholly owned subsidiary of the Company operatingin Houston Texas 77036 USA with its manufacturing facility in Orange Massachusetts. Itis engaged in manufacturing wide range of water control gates and
equipment for Water Intake Systems Water and Waste Water PumpingStations and Treatment Plants Storm Water Pumping Stations Water Transmission Lines andfor various industries.
In the financial year 2019-20 the company achieved moderate growth inits turnover accompanied with significant reduction in losses. The total revenue of theCompany for the year at USD 11.57 million (equivalent to Rs. 8715.89 lacs / Rs. 871.58million) showed a growth of approximately 8% over the previous year turnover of USD 10.74million (equivalent to Rs. 8094.02 lacs / Rs. 809.40 million). The net loss of the Companyfor the year was USD -0.47 million (equivalent to Rs. -357.85 lacs / Rs. -35.78 million)as compared to previous year net loss of USD -1.52 million (equivalent to Rs. -1148.74lacs / Rs. -114.87 million) showing a reduction of approximately 69 % over the previousyear loss.
This is the 3rd full year of the company post itsacquisition and 1st full year of the operation of its acquired manufacturingfacility. The reduction in the loss augers well for the company which is on its path tobecome a profit-making company in the 4th year of its establishment.
c) ENGINEERING & MANUFACTURING JASH LIMITED HONGKONG
Engineering & Manufacturing JASH Limited is a wholly ownedmarketing subsidiary of the Company operating in Tsimshatsui Kowloon Hong Kong. It isengaged in marketing of Screening and Screening conveying equipment manufactured underE&M Jash Brand a well-established and approved brand with DSD Hongkong. The companyhas no employees and its products are made using Mahr Maschinenbau technology whilemanufacturing is done in Jash Engineering facility at SEZ Pithampur.
In the financial year 2019-20 the company did not do any business andhas reported minor losses. The total revenue of the Company for the year was NIL asagainst the previous year turnover of HKD 1.24 million (equivalent to Rs. 121.3 lacs / Rs.12.13 million). The net loss of the Company for the year was HKD -0.12 million (equivalentto Rs. - 12.04 lacs / Rs. -1.20 million) as compared to previous year net loss of HKD -0.04 million (equivalent to Rs. - 4.80 lacs / Rs. - 0.48 million).
Hongkong was in turmoil for most part of financial year 2019-20 firstbecause of political unrest and thereafter because of Covid pandemic and this affectedregular business activities.
d) MAHR MASCHINENBAU Ges.m.b.H AUSTRIA
Mahr Maschinenbau Ges.m.b.H is a wholly owned subsidiary of theCompany operating in Hagenbrunn Austria. It is now engaged in development of newtechnology for Screening and Screenings handling equipment and all its manufacturingactivities have been closed down.
In the financial year 2019-20 the company achieved moderate reductionin its turnover accompanied with slight reduction in losses. The total revenue of theCompany for the year at EURO 0.15 million (equivalent to Rs. 128.91 lacs / Rs. 12.89million) shows a reduction of approximately 4% over the previous year turnover of EURO0.172 million (equivalent to Rs. 134.19 lacs / Rs. 13.49 million). The net loss of theCompany for the year was of Euro -0.11 million (equivalent to Rs. -94.06 lacs / Rs. -9.40million) as compared to previous year net loss of EURO -0.195 million (equivalent to Rs.-152.27 lacs / Rs. -15.22 million) showing a reduction of approximately 38 % over theprevious year loss.
3. PROSPECTS FOR YEAR 2020-21
A. DOMESTIC MARKET SITUATION
The potential of Indian water and waste water industry is enormous onaccount of the burgeoning urban and semi-rural population and the fact that even after 70years of independence the total waste water treatment does not meet even 50% of totalcountry requirement. However on account of Covid19 pandemic the government will bestrapped for funds and this may affect funding on new projects. The Indian infrastructureindustry was already limping due to cash flow crisis partially inflicted by banks andpartially by delayed payment by executing agencies and this shall further get aggravateddue to Covid leading to projects getting stuck and deliveries getting delayed. Nearly 49 %of our consolidated revenue is still coming from Indian business and as a result some partof our growth could be affected if higher percentage of Indian projects are affected bythis crisis.
B. INTERNATIONAL MARKET SITUATION
Countries worldwide are investing heavily in water waste water stormwater desalination and in water reuse infrastructure and so international market forequipment made by the company is quite strong. Countries like Singapore MalaysiaThailand Philippines Hongkong Qatar Saudi Arabia Abu Dhabi France UK and USA wherethe company has strong presence are investing heavily in water sector. The company isbidding for supply of equipment worth over Rs 400 crores from projects already announcedand tendered out in these countries and which are sure to be
finalized in this financial year. The company is quite hopeful ofbagging over 30% of these orders and this should help in shoring up our order bookposition for the financial year 2020-21 as well as 2021-22.
On account of Covid19 pandemic project execution in many countrieshave slowed down. As a result it may not be possible to attain high growth from exportmarket despite a good current order book position. Nearly 51 % of our consolidated revenueis coming from export business due to which some part of our growth could be affected ifmost of the countries where we have good business presence are affected by this crisis.
C. SALES GROWTH STANDALONE
(I) JASH ENGINEERING LIMITED INDIA
The total order book position of the Company as on 1stAugust 2020 (Orders in hand as on 1st April 2020 plus orders received till 31stJuly 2020 less sales effected till 31st July end 2020) is. Rs. 24195 lacs (Rs.2419.5 million). Adding orders received from Rodney Hunt USA and E&M Jash Hongkongfor manufacturing of their products in India the total order book position becomes Rs.28316 lacs (Rs.2831.6 million ). Further orders worth Rs. 5316 lacs (Rs.532 million) arealready negotiated and expected to be received within next two months.
On the basis of the sales achieved till 31st July 2020 ofapprox Rs.3200 lacs (Rs. 320 million) the current order book position and expected orderinflow we are looking at overall year on year growth between 10 % to 12 % in the year2020-21.
(ii) SHIVPAD ENGINEERS PVT. LTD. INDIA
The total order book position of the Company as on 1stAugust 2020 (Orders in hand as on 1st April 2020 plus orders received till 31stJuly 2020 less sales effected till 31st July end 2020) is.Rs. 2427 lacs (Rs.242.7 million). Further orders worth Rs. 350 lacs (Rs.35 million) are already negotiatedand expected to be received within next two months.
On the basis of the sales achieved till 31st July 2020 ofRs. 250 lacs (Rs. 25 million) the current order book position and expected order inflowwe are looking at overall year on year growth between 10 % to 15 % in the year 2020-21.Even though the company is very comfortably placed order wise it may still not be able topost significant growth this year due to long Covid imposed shutdowns in Chennai city.
(iii) JASH USA INC. / RODNEY HUNT INC. USA
The total order book position of the Company as on 1stAugust 2020 (Orders in hand as on 1st April 2020 plus orders received till 31stJuly 2020 less sales effected till 31st July end 2020) is Us$ 16.13 million(Rs. 12083 lacs / Rs. 1208 million). Further orders worth approx. US$ 1.42 million (Rs.1070 lacs / Rs. 107 million) are already negotiated and expected to be received withinnext two months.
On the basis of the sales achieved till 31st July 2020 ofapprox. US$ 1.9 million ( Rs. 1425 lacs / Rs. 142.50 million) the current order bookposition and expected order inflow we are conservatively looking at overall year on yeargrowth between 25 % to 30 % in the year 2020-21.
(iv) ENGINEERING & MANUFACTURING JASH LIMITED HONGKONG
The total order book position of the Company as on 1stAugust 2020 (Orders in hand as on 1st April 2020 plus orders received till 31stJuly 2020 less sales effected till 31st July end 2020) is HK 0.96 million(equivalent to Rs. 94 lacs / Rs. 9.4 million). Further order worth HK 4.04 million(equivalent to Rs.394 lacs / Rs.39.4 million) is already negotiated and is expected to bereceived within next one month.
Due to COVID-19 pandemic No sales have been registered until 31stJuly. However on the basis of current order book position and expected order inflow weare looking at sales of HK 1.5 million (equivalent to Rs. 125 lacs / Rs. 12.5 million) inthe year 2020-21.
(v) MAHR MASCHINENBAU Ges.m.b.H AUSTRIA - STANDALONE
It was mutually decided with Mr. Gernot Mahr while acquiring thiscompany that he will assist the company for 5 more years in marketing and developmentactivities. This period was further extended by 1 year and this extension will now expirein 2020-21. It has hence been decided to merge this company with Jash Engineering Ltd.and close down the same after merger. To retain the name a new partnership company undersame name will be opened up.
D. SALES GROWTH CONSOLIDATED
The consolidated order book position of the Company as on 1stAugust 2020 (Orders in hand as on 1st April 2020 plus orders received till 31stJuly 2020 less sales effected till 31st July end 2020) is.Rs.38824 lacs(Rs.3882 million). Further orders worth Rs. 7129 lacs (Rs.713 million) are alreadynegotiated and expected to be received within next two months.
On the basis of the sales achieved till 31st July 2020 ofapprox. Rs. 4500 lacs (Rs. 450 million) the current order book position and expectedorder inflow we are looking at overall year on year growth between 15 % to 20 % in theyear 2020-21 on consolidated basis.
While arriving at these growth figures we have assumed that the worstis over for us in relation to Covid19 pandemic and that our operations across variousplants shall not be further affected by this from August 2020 onwards.
4. FUTURE OUTLOOK & PLANS
A. RODNEY HUNT
Financial year 2020-21 shall be the 4th full year afteracquisition of Rodney Hunt and 2nd full year after commencement of themanufacturing at Orange plant. The USA market for water control equipment is of over USD100 million annually and of we expect to have nearly 15% market share in the current yearand become profitable. This will enable us to become one of the 4 major players in the USAmarket and establishes Rodney Hunt as a serious contender in the market. Onc establishourselves as a viable competitor then we are quite hopeful of change in market perceptionleading to increased business traction throughout USA which should enable us to double oursales in US in 4 year's time and reach the top position once again. We have commenced theprocess of our strengthening of our US team in line with this and will have a younger anddynamic organization in place by end of this year to meet this challenge.
B. CAPITAL INVESTMENT
Growth in USA will put additional pressure on Indian facility as nearly70% of production for USA will be catered to from India. Hence Indian facility also has tobe gradually expanded in phases so as to meet this expected surge in demand from USA innext 2 years. The aim is to equip SEZ Unit 3 in such a way that complete cast iron gatesand cast valves can be machined assembled tested and dispatched from Unit 3 in 1.5year's time from now with only castings coming from outside.
In the current financial year the company is making major investmentin expanding the SEZ Unit 3. The built-up area of the plant is being increased by about10000 sq feet in Phase 1 so as to install large machines coming from Rodney Hunt plant inUSA. The Phase 1 plant extension should have been completed by June end ie well before thearrival of the machines from USA but because of Covid imposed lockdown the civil workscould not be completed in scheduled time. The plant is now expected to be ready bySept/Oct 2020 for installation of machines which have already arrived in last week ofJuly. As per the revised schedule all these machines will be upgraded installed andcommissioned by Jan/Feb 2021. With the completion of Phase 1 the SEZ Unit 3 will be ableto share the machining load for CI gates and valves for export market thereby freeing upcapacity in Unit 1 for domestic market.
In addition to this major investment in SEZ Unit 3 various other minorinvestments in plant machinery and facilities are being done in Unit 1 Unit 2 and Unit4. These investments are being done for enhancing capacity productivity and employeefacilities.
This entire investment will be in the range of Rs. 750-800 lacs (Rs.75-80 million) and will be funded by loans. Upon completion of Phase 1 expansion in SEZUnit 3 the Phase 2 expansion of SEZ Unit 3 is planned to be taken up. However thedecision regarding timeline of this expansion will be taken in the last quarter of currentfinancial year based on the business condition pravailing at that point in time.
C. SAP IMPLEMENTATION
The company has achieved good progress in SAP implementation andbarring Covid this should have been operational in May 2020. However work on this hasonce again commenced from end of June and this will finally be operative in the month ofAugust 2020. Before the end of second quarter of financial year 2020-21 the company willbe shifting all operations on SAP.
D. NEW PRODUCT ADDITION / DEVELOPMENT
The company has a policy of adding new products every year with a viewto improve its product portfolio and maintain its leadership position in India. Productaddition can be done either by in house development or by tie up with a technology leaderabroad. In the current year the company is planning addition / development of followingproducts:
(I) DISC FILTERS:
The company has already tied up with Invent Germany for manufacture ofDisc Filters in India. The first protype machine for demonstration purpose will bedispatched from Germany in October 2020 and installed in the company's own Sewagetreatment plant by Nov 2020. This will help our engineers in understanding the technologyas well as understand operational and maintenance issues. Thereafter subject to therebeing no travelling restriction related to Covid19 the company aims to send a team ofengineers to Germany early next year for training in manufacture and assembly of thisproduct. We expect to have the first machine produced in India by the middle of new year.
(ii) BACK RAKING SCREEN:
The company has already developed a prototype screen based on MahrMaschinenbau design and installed it in the IMC Kabitkhedi STP plant few years back fortrials. The upgraded version is now under development in Austria and we will manufacturethe same and have the prototype ready by end of the year. We plan to deploy this design instorm water application.
(iii) CABLE OPERATED RAKING SCREEN:
This is an economical screen in comparison to the existing screensavailable with the company. Few competitors are successfully promoting this screen eventhough it performance is not as good as good as Chain driven raking screens. The companyhas hence decided to develop this screen alternative so that no space is given to itscompetitors to grow and become a threat to company dominance in time to come. Thisdevelopment is being done in Austria and the first prototype will be ready before the endof this year.
5. OCCUPATION HEALTH & SAFETY (OH&S):
Your company involved in an initiative which results to positiveengagement of personnel on the plant at every level. With regard to safety two key areasof focus were identified namely facility Management for the employees and EquipmentTools & Material Management. The Facility management initiative was implemented toensure adequate welfare facilities for labor such as washrooms with bathing facilitiesrest rooms availability of drinking water etc. The Equipment Tools & MaterialManagement Program ensured that the tools used by them were safe. The process of screeningwas aligned with the Company's objectives to ensure 'Zero Harm'. The Company has compliedwith all applicable environmental and labor laws.
6. SUBSIDIARY ASSOCIATE AND JOINT VENTURE OF THE COMPANY
The details of wholly owned subsidiaries continuing having status ofthe same is given as required under section 129(3) of the Act read with the Companies(Accounts) Rules 2014 in the FORM AOC-1 as containing part of the Annual Report annexedas Annexure- A.
Further the Company does not have any associate or joint venturecompany at the beginning or closing or any time during the year 2019-20.
The Board of Directors declared an interim dividend of 15% on facevalue of fully paid up shares i.e. Rs. 1.5/- per share of Rs. 10/- for the year 2019-20 ondated 07/03/2020. The aggregate amount of interim dividend was Rs.177.54 Lacs /- whichwas duly paid. Further the board on its meeting held on 25/06/2020 recommended subject toapproval of shareholders a final dividend of 9% on Face Value of fully paid up Sharesi.e. Rs. 0.90/- per share of Rs. 10/- each for the Financial Year 2019-20. The aggregateamount of final dividend is Rs. 106.52 Lacs /-.
8. TRANSFER TO RESERVES
For the Financial year ended 31st March 2020 Your Companyhas not transferred any amount to General Reserve out of profit available forappropriation.
9. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT:
Management Discussion and Analysis forms an integral part of thisreport and is annexed as "Annexure- B" which gives details of the overallindustry structure economic developments performance and state of affairs of theCompany's various businesses.
10. CORPORATE GOVERNANCE REPORT:
Your company continues to place greater emphasis on managing itsaffairs with diligence transparency responsibility and accountability and is committedto adopting and adhering to best corporate governance practices.
The Company has a strong legacy of fair transparent and ethicalgovernance practices and it is believed that good Corporate Governance is essential forachieving long term corporate goals and to enhance stakeholders' value. Your Companyimplements Corporate Governance through robust board governance processes internalcontrol systems and processes and strong audit mechanisms. However the provisions ofRegulation 15 of SEBI (Listing obligations and Disclosure Requirements) Regulations 2015providing a separate report on corporate governance under Regulation 34(3) read with paraC of Schedule V are set out in the "Annexure C" to this report.
11. DIRECTOR'S RESPONSIBILITY STATEMENT:
Pursuant to Section 134(5) of the Companies Act 2013 the board ofdirectors to the best of their knowledge and ability confirm that:
a. In the preparation of the annual accounts for the year ended March31st 2020 the applicable accounting standards read with requirements set out underSchedule III to the Act have been followed and there are no material departures from thesame;
b. The Directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company as at March 31st 2020and of the profit of the Company for the year ended on that date;
c. The Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
d. The Directors have prepared the annual accounts on a 'going concern'basis;
e. The Directors have laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and areoperating effectively; and
f. The Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems are adequate and operatingeffectively.
12. INTERNAL CONTROL
Given the nature of business and size of operations Your Company'sInternal Control System has been designed to provide for:
- Accurate recording of transactions with internal checks and promptreporting.
- Adherence to applicable Accounting Standards and Policies.
- Compliance with applicable statutes policies and management policiesand procedures.
- Effective use of resources and safeguarding of assets.
The Internal Control System provides for well documentedpolicies/guidelines authorizations and approval procedures. Your Company through itsInternal Auditors M/s. Mahesh C Solanki & Co Chartered Accountants engaged asInternal auditors for the financial year 2019-20 carried out periodic audits at alllocations and functions based on the plan approved by the Audit Committee and brought outany deviation to Internal Control procedures. The observations arising out of the auditare periodically reviewed and compliance ensured.
The summary of the Internal Audit observations and status ofimplementation are submitted to the Audit Committee. The status of implementation of therecommendations is reviewed by the Audit Committee on a regular basis and concerns ifany are reported to the Board.
Your Company as per the requirement of the Section 143 (3) (i) hascarried out extensive testing of the internal financial controls in the Company which hasalso been duly audited by the Statutory Auditors of the Company and which have been foundto be adequate and satisfactory.
13. BOARD OF DIRECTORS
COMPOSITION OF BOARD OF DIRECTOR AND KEY MANAGERIAL PERSONNEL:
During the year under review the following changes occurred in theposition of Directors/KMPs of the Company. In compliance with the provisions of Sections149 152 read with Schedule IV and all other applicable provisions of the Companies Act2013 and the Companies (Appointment and Qualification of Directors) Rules 2014 (includingany statutory modification(s) or reenactment thereof for the time being in force) and SEBI(LODR) Regulation 2015 the composition of Board of Directors and Key Managerial Personnelare as follows:-
|Sr. Name of the Director No. ||DIN ||Designation |
|1. Mr. Laxminandan Amin * ||00007735 ||Executive Director |
|2. Mr. Pratik Patel ** ||00780920 ||Chairman & Managing Director |
|3. Mr. Suresh Patel*** ||00012072 ||Executive Director |
|4. Mr. Axel Schutte ||02591276 ||Non-Executive Director |
|5. Mr. Brij Mohan Maheshwari ||00022080 ||Independent Director |
|6. Mr. Sunil Kumar Choksi ||00155078 ||Independent Director |
|7. Ms. Sunita Kishnani ||06924681 ||Independent Director |
|8. Mr. Durgalal Tuljaram Manwani ||07114081 ||Independent Director |
|9. Mr. Vishwapati Trivedi ||00158435 ||Independent Director |
* Mr. Laxminandan Amin has resigned from the Directorship w.e.f.31/03/2020.
** Mr. Pratik Patel has been appointed as the Chairman of the Companyw.e.f. 25/06/2020
*** Mr. Suresh Kumar Patel has been appointed as an Executive Directorof company w.e.f. 14/02/2020.
Our definition of 'Independence' of Directors or Regulation is derivedfrom Regulation 16 of SEBI (LODR) Regulations 2015 and Section 149(6) of the CompaniesAct 2013. The Company comprised total 9 directors as on 31st March 2020 in theBoard out of them the following directors are independent directors;
1. Mr. Durgalal Tuljaram Manwani
2. Mr. Sunil Choksi
3. Mr. Brij Mohan Maheshwari
4. Ms. Sunita Kishnani
5. Mr. Vishwapati Trivedi
Declaration and Re-appointment of Independent Director:
All the Independent Directors have given their declaration ofIndependence stating that they meet the criteria of independence as prescribed undersection 149(6) of the Companies Act 2013. Further that the Board is of the opinion thatall the independent directors fulfill the criteria as laid down under the Companies Act2013 and the SEBI (LODR) Regulations 2015 during the year 2019-20. Further as perprovisions of the Companies Act 2013 Independent Directors were appointed for a term of5 (five) consecutive years but shall be eligible for re-appointment by passing of aspecial resolution by the Company and shall not be liable to retire by rotation.
The Company also consists of the following Key Managerial Personnel.
|1. Mr. Dharmendra Jain ||CFO |
|2. Mr. Tushar Kharpade ||Company Secretary |
Changes in Directors and Key Managerial Personnel
1. Mr. Suresh Kumar Patel (DIN: 00012072) appointed subject toapproval of shareholder in ensuing Annual General Meeting as Executive Director of theCompany w.e.f. 14th February 2020.
2. Upon recommendation of the Nomination and Remuneration Committeeboard has considered and approved the renewal of terms and conditions of appointment ofMr. Pratik Patel (DIN: 00780290) as Managing Director of the Company for two years w.e.f.01.03.2020 subject to approval of shareholders at the ensuing general meeting and other asmay be required.
3. Mr. Pratik Patel (DIN: 00780920) has been appointed as a Chairman ofthe company in the meeting dated 25th June 2020.
4. Mr. Laxminandan Amin (DIN No.: 00007735) has resigned fromDirectorship of the Company w.e.f. 31st March 2020 due to advancing age andhealth issue. A note about the resignation w.e.f. 31.3.2020 has been taken by the Board ofDirector in the meeting dated 25th June 2020.
MEETINGS OF THE BOARD
The Board meets at regular intervals to discuss and decide onCompany/business policy and strategy apart from other
Board business. Four meetings of the Board were held during the yearunder review. For details of meetings of the
Board please refer to the Corporate Governance Report which is a partof this report.
COMMITTEES OF THE BOARD
Your Company has constituted the Committee(s) as mandated under theprovisions of the Act and Listing Regulations. Currently there are five committees of theBoard namely:
Nomination and Remuneration Committee
Stakeholders' Relationship Committee:
Corporate Social Responsibility Committee
Executive & Borrowing Committee
The details of Board Committees are prescribed in Annexure-C of BoardReport.
COMPANY'S POLICY ON DIRECTOR'S APPOINTMENT REMUNERATION AND BOARDEVALUATION
The Policy of the Company on Directors' appointment and remunerationincluding criteria for determining qualifications positive attributes independence of aDirector and other matters provided under section 178(3) is annexed with the Report as"Annexure-D" and is uploaded on company's website www.iashindia.com
BOARD EVALUATION :
Our Company has conducted an Annual Performance Evaluation for allBoard Members as well as the working of the Board and its Committees. This evaluation wasled with specific focus on performance and effective functioning of the Board. The Boardevaluation framework has been designed in compliance with the requirements under theCompanies Act 2013 and the Listing Regulations. In a separate meeting of IndependentDirectors performance of NonIndependent Directors performance of the Board as a wholewas evaluated taking into account the views of the Executive Directors and Non ExecutiveDirectors. The same was discussed in the Board Meeting that followed the meeting of theIndependent Directors at which the performance of the Board its committees andindividual Directors was also discussed.
The following are some of the broad issues that are considered inperformance evaluation:
Evaluation of the Board was based on criteria such ascomposition and role of the Board Board communication and relationships functioning ofBoard Committees review of performance of Executive Directors succession planningstrategic planning etc.
Evaluation of Committees was based on criteria such as adequateindependence of each Committee frequency of meetings and time allocated for discussionsat meetings functioning of Board Committees and effectiveness of itsadvice/recommendation to the Board etc.
Evaluation of Directors was based on criteria such asparticipation and contribution in Board and Committee meetings representation ofshareholders interest and enhancing shareholding value experience and expertise toprovide feedback and guidance to top management on business strategy governance risk andunderstanding of the organization's strategy etc.
The outcome of the Board Evaluation for the financial year 2019-20 wasdiscussed by the Board and on the basis of such discussion Board analysis the result ofactions taken by Board for improving Board effectiveness based on feedback received in theprevious year. Further the Board also noted areas on which Board requires more focus forthe future Board efficiency.
CODE OF CONDUCT;
Regulation 17(5) of the SEBI (LODR) Regulations 2015 requires listedcompanies to lay down a Code of Conduct for its directors and senior managementincorporating duties of directors as laid down in the Companies Act 2013. The Company hasadopted a Code of Conduct for all Directors and Senior Management of the Company and samehas been hosted on the website of the company www.iashindia.com
14. AUDITOR AND AUDITOR'S REPORT:
M/s Walker Chandiok & Co LLP Chartered Accountants (FirmRegistration No. 001076N/N500013) the Statutory Auditors were reappointed for a term of 5years 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 2019-20. 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.
There are no qualifications reservations or adverse remarks made byM/s Walker Chandiok & Co LLP Statutory Auditors in their report prescribed in thisAnnual Report for the financial year ended March 312020.
Pursuant to the provisions of Section 204 of the Companies Act 2013and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theCompany has appointed Mr. Ankit Joshi Practicing Company Secretaries to conductSecretarial Audit of the Company. The Report of the Secretarial Audit in Form MR-3 for thefinancial year ended March 312020 is enclosed as "Annexure-E" to Board Report.
The Secretarial Audit Report for the year 2019-20 is self-explanatoryexcept the following comments made and the management submits their comments:
1. Some Forms under Companies Act 2013 were filed by the Company afterprescribed timeline along with the adequate additional filing fees.
Management Response to Point No. (1) : Your Company is law abidingentity and filed the necessary forms & returns with the authorities. The management ishopeful and committed to their level best to streamline the same in future. There was somedelay in filing of the particulars forms and has already complied with the same and haspaid additional fees as prescribed.
2. Pursuant to Section 135 of the Companies Act 2013 read withapplicable rules Company was required to spend CSR Contribution of Rs.30.08 Lacs duringthe financial year 2019-20 however the Company has spent Rs.14.99 Lacs only during theyear 2019-2020.
Management Response to Point No ( 2) : The company has contributedRs.14.99 lakhs during the year towards CSR initiatives. The areas targeted by the Companywere new therefore the planning and management of activities was not so smooth and took areasonable amount of time.
Pursuant to the provision of Section 148 of the Companies Act 2013pertaining to audit of cost records is applicable to the Company. The Board has appointedM/s M.P. Turakhia & Associates Cost Accountant to audit the cost records of youcompany for the financial year 2019-20.
Pursuant to the provisions of Section 138 of the Companies Act 2013and rule thereunder and regulation 18(3) of SEBI LODR and based on the recommendations ofAudit Committee your Board have reappointed M/s. Mahesh C. Solanki & Co. (FRN006228C) Chartered Accountants Indore as Internal Auditor of the Company to conduct theInternal Audit of the Company for the FY 2019-20. The Internal Auditors reports directlyto the Audit Committee and make comprehensive presentations at the Audit Committeemeeting(s) on the Internal Audit Report.
Your Board has reappointed M/s. Mahesh C. Solanki & Co. (FRN006228C) Chartered Accountants Indore as Internal Auditor of the Company for the FY2020-21.
15. DISCLOSURE REQUIREMENTS:
As per the Provisions of the SEBI (LODR) Regulations 2015 entered intowith the stock exchanges corporate governance report with auditor's certificate thereonand management discussion and analysis are attached which form part of this report.
Details of the familiarization programme of the independent directorsare available on the website of the Company. www.jashindia.com
16. EMPLOYEE STOCK OPTION SCHEME:
In the present competitive economic environment in the country and inthe long-term interests of the Company and its shareholders it is necessary that theCompany adopts suitable measures for attracting and retaining qualified talented andcompetent personnel. An employee stock option scheme designed to foster a sense ofownership and belonging amongst personnel is a well-accepted approach to this end. It istherefore appropriate to consider an Employee Stock Option Scheme for the employees ofthe Company and/or subsidiary company(ies) whether working in India or abroad. TheNomination and Remuneration Committee inter alia administers and monitors the Company'semployees' stock option scheme (ESOP Scheme) in accordance with the applicable SEBI (ShareBased Employee Benefits) Regulations 2014 (SEBI SBEB).
During the year under review the Company has approved "JashEngineering Employee Stock Option Scheme 2019" (JASH Scheme 2019) of the Company. TheESOP Scheme is in compliance with the SEBI (Share Based Employee Benefits) Regulations2014 ('the SBEB Regulations'). Pursuant to the approval by the shareholders andin-principle approval given by the Stock Exchanges the Company can grant upto 575000options to the eligible employees of the Company under the JASH Scheme 2019.
17. MIGRATION FROM SME PLATFORM TO MAINBOARD OF NSE
During the year Migration of equity shares from SME Emerge platform toMain Board of NSE was also approved by the National Stock Exchange w.e.f. 30thOctober 2019 on the basis of the details given below:
|Sr. No. ||Description of Securities ||Symbol ||Series ||No. of Securities ||Mkt . Lot ||Distinctive Numbers |
|1. ||Equity shares of Rs.10/- each fully paid up ||JASH ||EQ ||11836598 ||1 ||1 to 11836598 |
18. THE INDIAN ACCOUNTING STANDARDS (IND-AS):
Your Company has migrated from SME Emerge platform to Main Board of NSEw.e.f. 30th October 2019. Therefore FY 19-20 was the first FY to prepare theFinancial Statements as per the IND -AS accordingly both Standalone and Consolidatedfinancial statements has been prepared according to Indian Accounting Standard (IND-AS).
19. HUMAN RESOURCE DEVELOPMENT:
Attracting enabling and retaining talent have been the cornerstone ofthe Human Resource function and the results underscore the important role that humancapital plays in critical strategic activities such as growth. A robust Talent Acquisitionsystem enables the Company to balance unpredictable business demands with a predictableresource supply through organic and inorganic growth.
The re-imagined focus on competency building of fresh recruits prior tojoining through unique digital Initial Learning Program approach has enabled fasterrelease of freshers to projects. Post-offer engagement activities have also witnessedincreased focus. Continual pursuit to connect with associates on a regular basiscommunicate in an open and transparent manner progressive HR policies. This is evidentfrom the high retention rates and improved engagement levels of the associates.
Your Company has not accepted deposit from the public falling withinthe ambit of Section 73 of the Companies Act 2013 and the Companies (Acceptance ofDeposits) Rules 2014 and there were no remaining unclaimed deposits as on 31st March2020. Further the Company has not accepted any deposit or loans in contravention of theprovisions of the Chapter V of the Companies Act 2013 and the Rules made there under.
21. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Company has complied in respect of loan and guarantees andinvestment pursuant to Section 186 of the Companies Act 2013.
22. RELATED PARTY TRANSACTIONS
All Related Party Transactions that were entered into during theFinancial Year 2019-20 were on Arm's Length Basis and were in the Ordinary Course ofbusiness. There are no materially significant Related Party transactions made by theCompany with Promoters Directors Key Managerial Personnel or other designated personswhich may have a potential conflict with the interest of the Company at large. All RelatedParty Transactions were approved by the Audit Committee on omnibus basis or otherwise andthe Board. The transactions entered into by the company are audited. The Company hasdeveloped Related Party Transactions Policy Standard Operating Procedures for purpose ofidentification and monitoring of such transactions. The information for the Related PartyTransactions has been given in AOC-2 as "Annexure-F". The RPT Policy as approvedby the Board is available on the Company's website www.iashindia.com.
23. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO
The information on conservation of energy technology absorption andforeign exchange earnings and outgo stipulated under Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 is annexed herewithas "Annexure-G".
24. CORPORATE SOCIAL RESPOSIBILITY:
The Company has developed and implemented Corporate SocialResponsibility initiatives as the said provisions are applicable in view of the profitsand turnover of the company your Company was required to undertake CSR projects duringthe year 2019-20 under the provisions of section 135 of the Companies Act 2013 and therules made their under. As part of its initiatives under "Corporate SocialResponsibility (CSR)" the Company has undertaken activities which are in accordancewith CSR Policy of the Company and Schedule VII of the Companies Act 2013.The AnnualReport on CSR activities is annexed herewith as "Annexure-H".
25. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in formMGT-9 is annexed herewith as "Annexure-I".
26. LIQUIDATION OF MAHR MASCHINENBAU GES. MBH (WOS) AUSTRIA
During the year in view of revised business strategy of MAHRMASCHINENBAU AUSTRIA (WOS of JASH Engineering Limited) the Board discussed theliquidation process of WOS i.e. MAHR MASCHINENBAU AUSTRIA and approved for takingrequired steps to commence the liquidation process with the consultation of Advisor andAustrian Authority.
27. CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the provisions of Section 129(3) of the CompaniesAct 2013 and Regulation 34 of the SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 the Consolidated Financial Statements forms part of thisAnnual Report and shall also be laid before the ensuing Annual General Meeting of theCompany. The Consolidated Financial Statements have been prepared in accordance with therelevant Accounting Standards.
28. RISK MANAGEMENT :
Risks are events situations or circumstances which may lead tonegative consequences on the Company's businesses. Risk management is a structuredapproach to manage uncertainty. A formal enterprise wide approach to Risk Management isbeing adopted by the Company and key risks will now be managed within a unitary framework.As a formal roll-out all business divisions and corporate functions will embrace RiskManagement Policy and Guidelines and make use of these in their decision making. Keybusiness risks and their mitigation are considered in the annual/strategic business plansand in periodic management reviews. The risk management process in our multibusinessmulti-site operations over the period of time will become embedded into the Company'sbusiness systems and processes such that our responses to risks remain current anddynamic.
The Audit Committee has been designated by the Board for reviewing theadequacy of the risk management framework of the Company the key risks associated withthe businesses of the Company and the measures are taken in place to minimize the same andthereafter the details are presented to and discussed at the Board meeting.
29. VIGIL MECHANISM POLICY FOR THE DIRECTORS AND EMPLOYEES:
The Company's Board of Directors pursuant to the provisions of Section177(9) of the Companies Act 2013 read with Rule 7 of the Companies (Meetings of Board andits Powers) Rules 2014 has framed 'Vigil Mechanism Policy' for Directors and employeesof the Company. 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
30. PARTICULARS OF INTERNAL COMMITTEE AND COMPLAINTS RECEIVED UNDERSEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION & REDRESSAL) ACT2013:
The Company has constituted the Internal Committee under the provisionsof the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013 headed by the women employee of the Company. There is no complaint receivedduring the year and pending at the ended financial year under provisions of the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
|Category ||No. of complaints pending at the beginning of F.Y. 2019-20 ||No. of complaints filed during the F.Y. 2019 -20 ||No. of complaints pending as at the end of F.Y. 2019 - 20 |
|Sexual Harassment ||Nil ||Nil ||Nil |
31. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by theRegulators/Courts which would impact the going concern status of the Company and itsfuture operations.
32. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITIONOF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OFTHIS REPORT;
Except that as stated in the relevant places the material changesdevelopment regarding project which is ongoing from the 31st March 2020 till the dateof the Board Reports there are no material changes which may affect the financialposition of the Company.
33. RATIO OF THE REMUNERATION OF EACH DIRECTOR TO THE MEDIAN EMPLOYEE'SREMUNERATION AND PARTICULARS OF EMPLOYEES:
Pursuant to provision of section 197(12) of Companies Act 2013 readwith Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 details of employees given in "Annexure-J". During the year none ofthe employees received remuneration in excess of Rs. One Crore and two lacs or more perannum 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.
34. INDUSTRIAL RELATIONS:
During the year under review your Company enjoyed cordial relationshipwith workers and employees at all levels.
35. PREVENTION OF INSIDER TRADING
In view of SEBI (Prohibition of Insider Trading) Regulation 2015 theCompany has adopted a Code of Conduct for Prevention of Insider Trading with a view toregulate trading in securities by the Directors and designated employees of the Company.
The Code requires Trading Plan pre-clearance for dealing in theCompany's shares and prohibition the purcharse or sale of Company shares by the Directorsand the designated employee
36. DISCLOSURE FOR FRAUDS AGAINST THE COMPANY:
In terms of the provisions of Section 134(3)(C)(a) of the CompaniesAct 2013 there were no frauds committed against the Company and persons who arereportable under section 141 (12) by the Auditors to the Central Government. Also therewere no non-reportable frauds during the Financial Year 2019-20.
37. CAUTIONARY STATEMENT
The statements made in this Report and Management Discussion andAnalysis Report relating to the Company's objectives projections outlook expectationsand others may be "forward looking statements" within the meaning of applicablelaws and regulations. Actual results may differ from expectations those expressed orimplied. Some factors could make difference to the Company's operations that may be dueto change in government policies global market conditions foreign exchange fluctuationsnatural disasters etc.
Your Directors acknowledge the dedication and commitment of yourcompany's employees to the growth of your company and their unstinted support has beenintegral to your company's ongoing success. Your Directors appreciate support of StateBank of India HDFC Bank Limited SIDBI TATA Capital Financial Services Limited BajajFinance Ltd. and various government agencies customers suppliers throughout the year fortheir support and confidence shown in the management of the company. The Directors alsogratefully acknowledge support of the NSE Share Transfer Agent and other intermediariesof the Public Issue of the Company and also to all stakeholders of the Company viz.customers members dealers vendors and other business partners for the excellent supportreceived from them during the year.
| ||For and on behalf of Board of Directors of Jash Engineering Limited || |
|Date : 28.8.2020 ||Sd/- ||Sd/- |
|Place : Indore ||Pratik Patel ||Suresh Patel |
| ||Chairman & Managing Director ||Executive director |
| ||DIN - 00780920 ||DIN:00012072 |