Your Directors have pleasure to present the Thirty-Ninth Annual Reportand the Company's Audited Financial Statement for the year ended 31st March 2021.
The Company's financial performance for the year ended on 31st March2021 is summarized below:
(Rs in Crore)
|particulars ||Year ended on 31st March 2021 ||Year ended on 31st March 2020 |
|Revenue from Operations ||2205.45 ||2812.90 |
|Other Income ||10.73 ||26.61 |
|Profit from the year befor Finance cost Depreciation and exceptional items ||143.63 ||76.74 |
|Less : Finance Cost ||243.02 ||247.10 |
|Less : Depreciation and Amortisation Expenses ||87.78 ||94.48 |
|Less : Exceptional Item ||2.67 ||67.41 |
|Loss Before Tax ||(189.84) ||(332.25) |
|Current Tax ||-- ||-- |
|MAT Credit Entitlement ||-- ||-- |
|Short/(Excess) Provision of Tax of Earlier Years (Net) ||3.63 ||-- |
|Deferred Tax ||0.06 ||(0.16) |
|Loss for the year ||(193.53) ||(332.09) |
|Other Comprehensive Income ||(0.12) ||(1.18) |
|Total Comprehensive Income for the year ||(193.65) ||(333.27) |
IMPACT OF COVID 19
The outbreak of corona virus (COVID-19) pandemic globally and in Indiais causing significant disturbance and slowdown of economic activity. The Company'soperations and revenue during the period were impacted due to COVID-19. The Company hastaken into account the possible impact of COVID-19 in preparation of the financialstatements including its assessment of recoverable value of its assets based on internaland external information upto the date of approval of these financial statements andcurrent indicators of future economic conditions.
The Company is currently facing liquidity crunch and incurring losses.Hence your Directors have not recommended dividend on equity shares of the Company forthe year 2020-21.
However the dividend on the preference shares will be carried forwardfor payment in the next financial year.
The paid up Equity Share Capital as on 31st March 2021 was Rs81.87Crore. Crore and Preference Share Capital as on 31st March 2021 was Rs 14.91Crore.
PERFORMANCE OF THE COMPANY
The Company's revenue for Financial Year 2020-21 was Rs 2205.45Crore as against Rs 2812.90 Crore for the previous year due to adverse marketconditions Covid 19 and reduction in margins.
During the year the Production of Polyster Chips was to 293877 MTand Production of POY & yarn was 193587 MT.
Mr. S N Shetty who retires by rotation and being eligible offershimself for re-appointment.
Mr. Yash Gupta has been appointed as Additional Director - Productionon 12th February 2021 to hold office till the date of this Annual GeneralMeeting.
Mr. Satish Mathur has been appointed Additional Independent Director on12th February. 2021 to hold office till the date of this Annual GeneralMeeting.
Mr. Yash Gupta and Mr. Satish Mathur showed their willingness tocontinue as Directors and hence Board of Directors proposed to obtain the approval fromshareholders in coming Annual General Meeting.
All Independent Directors have given declarations that they meet thecriteria of Independence as laid down under Section 149(6) of the Companies Act 2013 andRegulation 16(b) of SEBI (Listing Obligation sand Disclosure Requirements) Regulations2015.
BRIEF PROFILE OF DIRECTOR
Mr. S N Shetty (Din :07962778)
Qualified with a Bachelor of Commerce as well as Law andAdministrative Management.
Equipped with varied experience in Human Resources GeneralAdministration and Legal departments.
Presently appointed as the Group - Senior Vice President -Legal Administrative & HR. He had joined the Company as the General Manager - Legal& Administration in 1992.
Ml Yash Gupta (Din : 06843474)
Qualified with a Bachelor of Commerce and also CharteredAccountant registered with Institute of Chartered Accountant of India New Delhi.
Having experience of Twenty Eight (28) years experience infinancial and accounts.
Has been inducted on the Board of the Company as AdditionalDirector w.e.f 12th February 2021.
Mr. Satish Mathur (Din : 03641285)
Retired IPS has completed over 37 years of service in the INDIANPOLICE SERVICE. He spent over a decade directly handling anti corruption and vigilancerelated work at all levels in Central and State police organisations as well as Govt ofindia PSU.
Has been inducted on the Board of the Company as AdditionalDirector w.e.f 12th February 2021.
Pursuant to the provision of the Companies Act 2013 and Regulation4(2)(f) of SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015 astructured questionnaire was prepared after taking into consideration of various aspectsof the Board's functioning composition of Board and its Committees culture executionand performance of specific duties obligations and governance.
The performance evaluation of the Independent Directors was completed.The performance evaluation of the Chairman and the Non-Independent Directors was carriedout by the Independent Directors. The Board of Directors expressed their satisfaction withthe evaluation process.
As per the requirement of the Companies Act 2013 and of SEBI (ListingObligations and Disclosure Requirements) Regulation 2015 the Board of Directors of theCompany has Seven Committees namely Audit Committee Stakeholders Relationship CommitteeRisk Management Committee Nomination and Remuneration Committee Corporate SocialResponsibility Committee Prevention of Sexual Harassment Committee and Finance Committee.
The details of the constitution of the Committees and the meetings heldduring the financial year 2020-21 are included in the Corporate Governance Report formingpart of Annual Report.
KEY MANAGERIAL PERSONNEL
Following are the Key Managerial Personnel of the Company:
|Name of the Person ||Designation |
|1 Mr. Bhagirath C. Arya ||Chairman (upto 30.12.2020) Non- Executive Director (w.e.f.31.12.2020) |
|2 Mr. S. N. Shetty ||Executive Director |
|3 Mrs. Ujjwala Apte ||Executive Director & Company Secretary |
|4. Mr. Yash Gupta ||Additional Director (w.e.f. 12.02.2021) |
NUMBER OF MEETINGS OF THE BOARD & AUDIT COMMITTEE
During the year Four Board Meetings and Four Audit Committee Meetingswere convened and held. The details of which are given in the Corporate Governance Report.The intervening gap between the Meetings was within the period prescribed under theCompanies Act 2013 and relevant provisions of LODR 2015 of SEBI except one of BoardMeeting held on 10.09.2020 delayed by 78 days due to Covid -19 pandemic.
Company has overseas subsidiary under the name and style JBF Global PteLtd at Singapore which has subsidiaries namely JBF Petrochemicals Ltd at MangaloreIndia JBF Trade Invest Pte Ltd at Singapore and JBF RAK LLC at U.A.E with its ownsubsidiaries JBF Bahrain W.L.L. at Bahrain and JBF Global Europe BVBA at Belgium.
Financial restructuring/negotiation with lenders/ investors are underprocess hence the audited financial statements of its subsidiaries are not available. TheCompany is unable to prepare the consolidated financial statements 31st March 2021. Thesame has been referred by the auditors in their report.
explanation/comments on audit qualifications
1. The company's Business as a going concern :
The Company is working closely with its lenders to find a resolution tosettle their outstanding dues.
Currently all the plants of Company are operational and generatingpositive cash-flows. In the light of above the management is of the view that theoperations of the Company have not been adversely effected despite the on-going pandemicand hence will continue to prepare the financial statement on a "going concern"basis.
2. Interest @ 9% on Borrowings
Company has provided interest @ 9% p.a. on borrowings aggregating to2364.98 crore for the period from 1st April 2020 to 31st March 2021 as against thedocumented rate resulting into lower provision of finance cost for the year 31st March2021 by 178.01 crores.
Management is of the view that ultimate liability will not be more than9%.Therefore the Company is continues to recognise the same on 9%.
3. Subsidaries Exposure
Company has exposure in subsidiaries by way of investments loans andother receivables aggregating to 1469.63 crores. No exercise is undertaken to determineimpairment if any.
JBF RAK LLC's plant located at Ras al-Khaimah in U.A.E a subsidiary ofJGPL partially resumed commercial operations in month of April 2021. JBF RAK is workingclosely to resolve and address outstanding financial issues with its lenders. Uncertaintyis also faced in respect of PTA project at Mangalore being executed by JPL due tosuspension of operation as planned and default in servicing of its borrowings towardsprinciple and interest. The lenders of JPL have also invoked the pledged equity shares ofJPL held by JGPL and corporate guarantee of the Company. One of the lenders of JPL hasmade an application with National Company Law Tribunal (NCLT) under Insolvency andBankruptcy Code 2016.
In view of the above the impairment testing in respect of theCompany's exposures to its subsidiaries could not be carried out and hence no provisionfor impairment if any has been provided for.
4. Claim filed by an Operational creditor of JBF RAK LLc (step-downsubsidiary of the company)
An application filed with National Company Law Tribunal (NCLT) by theone of the operational creditors of JBF RAK LLC (JBF RAK) situated at UAE a subsidiaryof the Company against the Company for supply of raw materials to JBF RAK and claim of128.48 Crore (US$ 19899091.53) as per notice dated 17.02.2020. No provision has beenconsidered for the above claim.
Management is of the view that in view of negotiation with the abovecreditor by JBF RAK and based on past settlement by the Company with above creditors inrespect of raw material purchased by the Company there will be no liability on account ofit to the Company and hence no provision is required towards above claim
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report on the operations of theCompany as required under SEBI (Listing obligations and Disclosure Requirements)Regulations 2015 is provided in a separate section and forms an integral part of thisReport.
As per Regulations 34 (3) read with Schedule V of SEBI (ListingObligations and Disclosure Requirements) Regulation 2015 a separate section on corporategovernance practices followed by the Company (including disclosures prescribed underSection II of Part II of Schedule V of the Companies Act 2013) together with acertificate from the Company's Auditors on compliance forms an integral part of thisreport.
BUSINESS RESPONSIBILITY REPORT
The Business Responsibility Report as per Regulation 34(2) of SEBI(Listing Obligations and Disclosure requirement) Regulations 2015 is annexed and formsan integral part of the Report.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in FormMGT-9 as required under Section 92 of the Companies Act 2013 is annexed and forms anintegral part of this Report.
CORPORATE SOCIAL RESPONSIBILITY
As a part of its initiative under the "Corporate SocialResponsibility"(CSR) drive the Company has undertaken projects in the area of ruraldevelopment. The disclosures required under section 135 of the Companies Act 2013 readwith the rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules 2014are annexed to Directors' Report.
DISCLOSURE UNDER RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION)RULES 2014
The information required pursuant to Section 197 read with rule 5(1) ofthe Companies (Appointment and Remuneration) Rules 2014 in respect of employees of theCompany and Directors is enclosed in the Annual Report. The statement containingparticulars of remuneration of employees as required under Section 197(12) of the Actread with Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is given in an annexure to the Annual Report. In termsof Section 136(1) of the Act the Annual Report is being sent to the Member shaving theaforesaid annexure. The information is also available for inspection by the Members at theRegistered Office of the Company during business hours on all working days exceptSaturdays and Sundays. Any Member desirous of obtaining a copy of the said annexure maywrite to the Company Secretary and the same will be furnished on request.
The company has formulated various policies which are available on ourwebsite : www.jbfindia.com
NOMINATION AND REMUNERATION POLICY
The Company has formed Nomination and Remuneration Committee and framedthe Remuneration Policy. The Committee has been given responsibility of appointment andre-appointment of Whole-time Director Directors Key Managerial Persons and the specifiedemployees / executives of the Company and approving their remuneration based on theirqualification experience and responsibility in the Company.
The salient features of Remuneration policy are included in CorporateGovernance Report forming part of this annual report.
Risk Management Policy
As a good governance practice the Company has constituted RiskManagement Committee. The Company has a Risk Management Policy and team evaluate businessrisks.
The Board of Directors regularly reviews risk and threats in thebusiness and takes suitable steps to safeguard Company's interest.
Related Party Transactions Policy
As per statutory requirement the Company has framed related partytranscation policy. As a policy all Related Party Transactions including saleand purchaseentered into with Subsidiary Companies if any are placed before the Audit Committee andalso before the Board for approval. Omnibus approval was obtained on a quarterly / annualbasis for such transactions which are of repetitive nature.
There are no material related party transactions during the year underreview with the Promoters Directors or Key Managerial Personnel. The Company has alsoformulated policy on materiality of Related Party Transactions.
Whistle Blower Policy
A whistle blower policy in terms of the Listing Regulations includesEthics & Compliance for senior executives of the Company. It also includes vigilmechanism. Confidential disclosures can be made by whistle blower through an e-mail or aletter to the Committee member or to the Chairman of the Audit Committee.
The efforts is taken to accept the observations of the whistle blowerand the action are taken accordingly.
Prevention of Sexual Harassment at Workplace Policy and Preservation ofDocuments Policy
The company has also constituted prevention of sexual harassment atworkplace policy and preservation of documents policy. Separate Management Teams areappointed to review periodically at different locations of the Company. These policies arealso available on website of the Company.
FOREIGN EXCHANGE EARNING AND OUTGO
Foreign exchange earnings by way of export and Freight were Rs 543.47crore against outgo of Rs 23.89 crore on import of raw materials stores spares &consumables.
During the year Company has not accepted any Fixed Deposits and assuch no amount of principal or interest on account of Fixed Deposits is outstanding as onthe date of Balance Sheet.
PARTICULARS OF LOAN GUARANTEES OR INVESTMENTS BY COMPANY
Details of Loans Guarantees and Investments covered under theprovisions of Section 186 of the Companies Act 2013 are given in the notes to FinancialStatements (refer Note no.41)
All the properties of the Company including buildings plant andmachinery and stock have been adequately insured.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of knowledge and belief and according to the informationand explanations obtained by them your Directors make the following statement in terms ofSection 134(3) (c) of the Companies Act 2013:
i. that in the preparation of the Annual Accounts for the year ended31st March 2021 the applicable Indian Accounting Standards (IND-AS) have been followedalong with proper explanation relating to material departures if any;
ii. the Directors had 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 31st March 2021and of the profit/ loss of the Company for the year ended on that date;
iii. that the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;
iv. the annual accounts have been prepared on a going concern basis;
v. that the Directors had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively; and
vi. that the Directors had devised proper systems were adequate andoperating effectively.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Board has devised proper systems to ensure compliance with theprovisions of all applicable Secretarial Standards issued by the Institute of CompanySecretaries of India and that such systems are adequate and operating effectively.
Pursuant to the provisions of Section 204 of the Companies Act 2013and rules made hereunder the Company has appointed M/s. Jagdish Patel & Co. a firmof Company Secretaries in Practice to undertake the Secretarial Audit of the Company. TheSecretarial Audit Report is included as and forms an integral part of this Report.
The Board of Directors of the Company has appointed of M/s. S C Ajmera& Co Chartered Accountants Udaipur (Registration No. 002908C) as the StatutoryAuditors of the Company for three years pursuant to Section 139 of the Companies Act2013.
Accordingly the Board seeks approval of Shareholders of the companyfor the appointment of Statutory Auditors as mentioned in the notice of the Annual GeneralMeeting.
The Board of Directors has approved appointment of Mr. VijayBavchandbhai Patel Cost Accountant as the Cost Auditor of the Company to conduct costaudit and give report for the year 2021-22. The notice of Annual General Meeting includesthe resolution to obtain consent of the shareholders.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators/Courts that would impact the going concern status of the Company and its futureoperations.
However the consortium of lenders lead by Bank of Baroda has filed anapplication under Section 7 of IBC Code with NCLT Ahmedabad Branch. The said applicationwas dismissed in month of April 2021.
One of the operational creditor of the Company i.e M/s SABIC AsiaPacific Pte.Ltd made a fresh application before NCLT for revocery of its dues.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has an effective internal control and risk-mitigationsystem which are assessed and strengthened with new/revised standard operatingprocedures. The Company's internal control system is commensurate with its size scale andcomplexities of its operations. The internal audit is entrusted to M/s. Bhuwania &Agrawal Associates. Every quarter internal audit report is placed before the AuditCommittee and the Audit Committee of the Directors actively reviews the adequacy andeffectiveness of the internal control systems and suggests improvements to strengthen thesame.
ENVIRONMENT AND SAFETY
The Company has constituted Committee for prevention of sexualharassment at work place with a mechanism of lodging complaints. During the year underreview no complaints were reported to the Board.
The Board of Directors would like to express their gratefulappreciation for the assistance support and co-operation received from the FinancialInstitutions Banks Government Authorities and Shareholders during the year under review.
The employees of the Company contributed significantly in achieving theresults. The Directors take this opportunity of thanking them and hope that they willmaintain their commitment to excellence in the years to come.
For and on behalf of the Board of Directors
| ||S. N. SHETTY |
| ||Director |
| ||DIN-07962778 |
| ||ujjwala apte |
|Place : Mumbai ||Director |
|Date : 12th August 2021 ||DIN-00403378 |