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JCT Ltd.

BSE: 500223 Sector: Industrials
NSE: JCT ISIN Code: INE945A01026
BSE 00:00 | 20 Feb 0.73 -0.02






NSE 05:30 | 01 Jan JCT Ltd
OPEN 0.70
VOLUME 104070
52-Week high 1.84
52-Week low 0.66
Mkt Cap.(Rs cr) 61
Buy Price 0.72
Buy Qty 500.00
Sell Price 0.81
Sell Qty 1200.00
OPEN 0.70
CLOSE 0.75
VOLUME 104070
52-Week high 1.84
52-Week low 0.66
Mkt Cap.(Rs cr) 61
Buy Price 0.72
Buy Qty 500.00
Sell Price 0.81
Sell Qty 1200.00

JCT Ltd. (JCT) - Director Report

Company director report

Dear Members

Your Directors present the 70th Annual Report on the affairs of the Companytogether with Audited Financial Statements for the financial year ended 31stMarch 2019. The Management Discussion and Analysis is also included in this Report.

1. Financial Highlights

(Rs. in Lakhs)
2018-19 2017-18
Revenue from operations 80032.50 76488.41
Other Income 689.17 1045.21
Profit before Finance Cost Depreciation and Amortization Expense and Tax 3931.21 3011.04
Finance Cost 8099.44 3550.01
Depreciation and amortization Expense 2256.08 3049.36
Profit/(Loss) for the year before tax (6423.91) (3588.33)
Profit/(Loss) for the year after tax (6423.67) (3604.33)
Other Comprehensive Income/(Loss) 157.89 203.82
Total Comprehensive Profit/(Loss) (6265.78) (3400.51)

2. Dividend

In view of the accumulated losses the directors are unable to recommend any dividend.

3. Industry Structure & Development

The Indian Textile Industry is one of the largest in the World. The Industry holds animportant position in country's economic structure because of its huge contributiontowards employment generation Industrial Output and Export earnings. It is the labourintensive industry and contributes 7% of Industry output in value term 4% to India's GDP14% to Index of Industrial Production (IIP). (Source Further industry is alsotargeting the job scenario and manufacturing landscape. The Government is fully consciousof its role in achieving this ambitious target and therefore has taken several Initiativesfor the development of Industry and added the textile in Inverted duty structure under GSTregime during 2018-19.


In 2018 the global economy began its journey on a firm footing with estimatedglobal economic growth of 3.6% (Source: World Economic Outlook by International MonetaryFund (IMF)). During the second half of 2018 this rate of development gradually declinedowing to impending US-China trade dispute and some slowdown across developed markets.Emerging and developing markets of Asia maintained their steady progress at 6.4% during2018. However it's important to note that India's economy expanded at 7.1% in 2018vis-a-vis 6.7% in 2017 whereas China's growth deteriorated from 6.9% in 2017 to 6.6% in2018 (Source: IMF). Sub-Saharan Africa's economy also sustained a steady rise of 3% duringthe year.

Global Textile and Apparel Industry

The global textile and apparel industry is continuously evolving. Over the years ithas witnessed multiple shifts in consumption and production patterns including shifts ingeographical manufacturing hubs as the industry is driven by the availability of cheaplabour. The textile and apparel trade is predicted to grow at a CAGR of 3.7% during theperiod 201828. During this period the increase in apparel trade is expected to be at aCAGR of 4.5% and textiles at a CAGR of 2.5%. Even though apparel industry is dominated bydeveloped markets of EU and the US the emerging markets led by countries such as IndiaChina Russia and Brazil are becoming consumption markets. Simultaneously India and Chinahave strong textile manufacturing base and thus are emerging as both sourcing andconsuming nations.

Currently China holds the largest share in textile and apparel global trade. It hasvertically integrated supply chain from production of fibre to weaving of fabric andgarmenting. The sector also has the capability to manufacture all categories of productsand a conducive ecosystem to provide complete service offering to brands and retailers.However the increasing labour and energy costs have mitigated the internationalcompetitive advantage of China to some extent. The global apparel manufacturers arefinding Bangladesh Vietnam and India as competitive markets over China.


India continues to be one of the fastest growing major economies in the world and isexpected to be among the world's top three economic powers in the next 1015 years. TheIndian economy is expected to improve and close the year 2019 with a GDP growth of 7.3%(Source: IMF). Sustained real GDP growth of over 6% since FY91 has led to a fundamentaltransformation of India's economy. Today India is the world's seventh largest economy inreal terms backed by strong demand positive consumption pattern and rising disposableincome. In PPP terms the economy is expected to be among the top five global economies by2020.

Indian Textile Industry

The domestic textile and apparel market is estimated to be US$ 100 billion in 2018-19and has grown at a CAGR of 10% since 2005-06. Apparel demand at US$ 74 billion hasdominated the domestic market with approximately three-fourth share of the total textileand apparel market. The growth in the disposable income of the middle and lower middleclass sections of the society has led to continuous growth of demand of textile andapparel in India. This growth in demand is expected to continue at 12% CAGR to reach US$220 billion by 2025.

India's textile and apparel exports are estimated at US$ 39 billion in the financialyear 2018-19. The exports have grown at a 6% CAGR since the year 2005-06. India's textileand apparel exports are expected to expand to US$ 80 billion by the year 2025 growing ata CAGR of 10%. Apparel is the largest exported category with a share of 46% in the textileand apparel exports.

The cotton output for this year is expected to be lowest in eight years due to delayedand deficient monsoon in some of the key cotton-growing states and lower acreage in someof the southern states. The cotton prices have started moving upward on reports ofimproved demand from China and at the same time rupee is appreciating. It will impact ofcompetitiveness of Indian products in the international markets.

Indian textile Sector is one of the oldest industries in Indian Economy as well as oneof the largest contributors to Indian Exports. Profitability remained undermined onaccount of volatile Raw Material prices rising wages tough competition and rapidchanging consumer behavior. On a medium to long term India offers huge scope for filamentmanufacturing because of low base per capita consumption of Nylon textile fabric in Indiaas compared to global standards and changing consumer behavior. With better disposableincome in the hands of middle class and ever- changing fashion requirement of youngIndians NFY is witnessing steady growth by virtue of its feel and luster quality. WhileNFY continues to enjoy preference in saree dupatta and dress material its substitutionin silk and VFY may provide an opportunity to increase consumption. Profitability of NFYcontinues to remain under pressure owing to raw material price volatility competitionfrom fragmented small and medium producers and imports from FTA countries which catersabout 20% of total consumption of NFY in India.

4. Business Strategy Textile Unit:

The strategy of the unit is in addition to the existing business that the focus is onincreasing the production of Technical and Performance Textiles provide turnkey solutionsto Institutional buyers getting nominated by major global brands and produce more coatedsynthetic fabrics. The company is also planning to increase weaving capacity of syntheticfabrics to cater increasing demand of Stretch/Structured Fabrics with wider width Add 30 %dyeing capacity to balance weaving and processing capacities of synthetic plant.

Filament Unit

The focus is on to develop new products for catering different end-users moreproduction of conventional and dope dyed yarn for domestic and export markets. The Unit isalso focusing on increasing the production of MONO Yarn which has in good demand withlimited capacities in the segment.

5. OPERATIONS Textiles:

The textile unit at Phagwara despite challenging business environment the unitproduced and sold 376.70 lakhs and 371.57 lakhs meters of fabrics respectively. Thetechnical textiles have been well accepted by the market. The capacities are underutilizeddue to tight liquidity.

Nylon Filament Yarn:

Nylon Filament Unit has been one of the top Textile Grade Nylon Yarn manufacturers inIndia with installed capacity of 16000 TPA and 1000 TPA for Nylon Chips. The unit hasproduced and sold 11847 MT of Filament Yarn and 31 MT of Nylon Chips and sold 12657 MT and403 MT respectively. Capacity utilization is lower on account of stiff competition andcheap imports in India through ASEAN countries.


Global economy has started recovering and provides a good opportunity to the Indiantextile Industry to increase its share in the Global Textile and Clothing. The tariff warbetween two largest economies of the world- The USA and China is expected to have positiveimpact on India's textile exports.

The Industry is dependent on the availability of Raw Cotton at reasonable prices whichis dependent on various factors-monsoon imports etc. The Indian Textile exports continueto face stiff challenges from the small countries like Bangladesh Sri Lanka Taiwan andPakistan etc.

NFY substitution for silk and VFY may provide an opportunity to increase consumption.Moreover increase in drawback rates during 2018-19 in NFY may promote exports.Profitability of NFY continues to remain under pressure owing to raw material pricevolatility competition from fragmented small and medium producers and imports from FTAcountries.


No industry is free from normal business risk and concerns. Textile Industry continuesto face stiff competition from China other Asian/emerging economies. Competitiveness ofIndustry is dependent upon factors like the cotton prices monsoon exchange ratesavailability of domestic raw materials (particularly in case of NFY) and prevalentinterest rates in the regime. The industry being more capital intensive requires hugefunds long term as well as short term in the form of working capital for its running.

The Government through its Industrial Policies should support the industry so thatIndustry be able to enhance its competitive advantage to achieve sustained growth inExports as well as domestic markets.


The Company incurred a net loss of Rs. 62.66 Crores inclusive of interest provided onFCCB of Rs 40.86 Crores for earlier years during the Current Financial Year. The Net Lossexcluding interest on FCCBs which is accounted for during the year would be Rs. 21.80Crores against Rs. 34.00 Crores.

The Company earned higher EBIDTA of Rs. 40.89 Crores against Rs. 31.99 Crores andincurred higher operational interest due to fresh term loan availed from Phoenix ARC forsettlement of FCCBs and the term loan of the banks.


The company has booked interest on Foreign Currency Convertible Bonds (FCCBs) forearlier years that has impacted the return on net worth.


There is no subsidiary of the company however associates are investment companies withno fresh investment during the current year.

11. Material developments in Human Resources/Industrial Relations

The Company is of firm belief that the Human Resources are the driving force thatpropels a Company towards progress and success. The Company continued its policy ofrecruiting the best available talent so that it can face business challenges ahead. Thetotal employee's strength of the Company was 4972 as on 31st March 2019. The industrialrelation continued to remain cordial during the year.


The Company arranged term loans of Rs. 99.45 Crores from a private financer to pay offthe term loans of banks amounting to Rs. 59.45 Crores and settled Foreign CurrencyConvertible Bonds (FCCBs) by way of part- payment of Rs 40.00 Crores and issue of freshEquity Shares of Rs. 2.50 each at a premium of Re.0.15 to FCCB of Rs 63.78 Crores for thebalance of their dues. The company has not been accepting fresh/renewals of deposits andfinally paid off all the fixed deposits received from the public during the year.

As mandated by the Ministry of Corporate Affairs the financial statements for the yearended 31st March 2019 has been prepared in accordance with the Indian Accounting Standards(IND AS) notified under Section 133 of the Companies Act 2013 read with the Companies(Accounts) Rules 2014. The estimates and judgments relating to the Financial Statementsare made on a prudent basis so as to reflect in a true and fair manner the form andsubstance of transactions and reasonable present the Company's state of affairsprofit/loss and cash flows for the year ended 31st March 2019.


The Extract of Annual Return in Form MGT-9 as required under section 92 of the Act isplaced on the website of the Company at


To the best of knowledge and belief and according to the information and explanationsobtained by them your Directors make the following statement in terms of Section134(3)(c) of the Companies Act 2013 that;

i) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;

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

iii) the directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;

iv) the directors have prepared the annual accounts on a going concern basis;

v) the directors have laid down internal financial controls which were followed by thecompany such internal financial controls are adequate and operating effectively; and

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

16. Declaration by Independent Directors and reappointment if any

Independent Directors have given declarations that they meet the criteria ofindependence as laid down under section 149(6) of the Companies Act 2013 and Regulation25 of SEBI (LODR) Regulations 2015.

17. Remuneration Policy

The Board of Directors has framed a policy which lays down a framework in relation toremuneration of Directors Key Managerial Personnel and Senior Management of the Company.This policy also lays down criteria for selection and appointment of Board Members. Thedetails of this policy have been posted on the website of the Company viz.

18. AUDITORS Statutory Auditors

M/S Navdeep Singh & Company Chartered Accountants (Firm Registration No.008400N)are the Statutory Auditors of the Company for the year ended March 31 2019. Theirappointment as the Statutory Auditors will be ratified at the ensuing Annual GeneralMeeting pursuant to the provisions of Section 139 of the Companies Act 2013 and Rulesmade there under.

The Report given by the Auditors on the financial statements of the company is selfexplanatory and is a part of Annual Report.

Cost Auditors

As per the requirement of Central Government and pursuant to Section 148 of theCompanies Act 2013 read with the Companies (Cost Records and Audit) Rules 2014 asamended from time to time your Company has been carrying out audit of cost recordsrelating to Textile & Filament Units every year. The Board of Directors on therecommendation of the Audit Committee has appointed M/s Goyal Goyal & AssociatesCost Accountants (Firm Registration No. FRN-000100) as Cost Auditor to audit the costrecords of the Company for the Financial Year 2019-20. As required under the CompaniesAct 2013 a resolution seeking members' approval for their remuneration payable to theCost Auditor forms part of the Notice convening the Annual General Meeting for theirratification.

Cost records are made and maintained as specified by the Central Government undersub-section (1) of section 148 of the Companies Act 2013.

The Cost Audit Report for the financial year 201819 is under finalization and would befiled within the stipulated time with the Ministry of Corporate Affairs.

Secretarial Audit

In compliance with the provisions of Section 204 of the Companies Act 2013 and rulesmade there under the Board has appointed M/S. Seema K & Assosciates CompanySecretaries (C.P No.4397 and FCS No. 8054) to undertake the Secretarial Audit of theCompany. The Secretarial Audit Report is annexed and forms an integral part of thisReport. There is no secretarial audit qualification for the year under review.


Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.


All transactions entered with Related Parties were on arm's length basis and in theordinary course of business. There were no materially significant transactions with therelated parties during the financial year which were in conflict with the interest of theCompany. Thus a disclosure in Form AOC-2 in terms of Section 1 34 of the Companies Act201 3 is not required. All Related Party Transactions are placed before the AuditCommittee as also before the Board for approval.

The Board of Directors of the Company at its Meeting held on 30th May 2019 on therecommendation of the Audit Committee re-framed a policy on materiality to regulatetransactions between the Company and its related parties in compliance with theapplicable provisions of the Act and Regulation 23 of the Listing Regulations asamended. The Policy as approved by the Board is uploaded and can be viewed on theCompany's website

None of the Directors has any pecuniary relationship or transactions vis-a-vis thecompany except remuneration/sitting fee or stated in the annual report.


There are no significant and material orders passed by the Regulators/Courts that wouldimpact the going concern status of the Company and its future operations.


The information on conservation of energy technology absorption and foreign exchangeearnings and outgo pursuant to Section 134(3)(m) of the Companies (Accounts) Rules 2014is annexed and forms integral part of this Report.

The statement containing particulars of top 10 employees and the employees drawingremuneration in excess of limits prescribed under Section 197 (12) of the Act read withRule 5 (2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 is provided in a separate Annexure forming part of the Report. In terms ofproviso to Section 136(1) of the Act the Report along with Accounts are being sent to theshareholders excluding the aforesaid Annexure. The said Annexure is open for inspection atthe Registered Office of the Company. Any member interested in obtaining a copy of thesame may write to the Company Secretary at the Registered Office of the company 21 daysbefore and upto the date of the ensuing Annual General Meeting during the business hourson working days.

None of the employees mentioned in the said statement is a relative of any Director ofthe Company and none of the employees hold (by himself or along with his spouse anddependent children) more than two percent of the equity shares of the Company.


Changes in Directors and Key Managerial Personnel

Dr. A.K. Doshi and Mr. C.M Bhanot will be completing their present term as IndependentDirectors of the Company on 24th September 2019. On the recommendation of Nomination andRemuneration Committee the Board in its meeting held on 30th May 2019subject to the approval of shareholders by special resolution has recommended thereappointment of Dr. A.K Doshi and Mr. C.M Bhanot as Independent Directors of the Companyfor a further term of five years effective from 25th September 2019.

Pursuant to Listing Regulations 2015 a person who has attained the age of seventyfive years can continue as Independent Director if approval of its Members is obtained byway of a special resolution. Dr. A.K Doshi is above seventy five years of age. Specialresolutions seeking approval for continuation of their Directorships from 1st April 2019on the existing terms of appointment form part of the Notice convening the 70thAnnual General Meeting of the Company.

Pursuant to the provisions of Section 152 of the Companies Act 2013 Ms. Priya Thaparretires by rotation at the forthcoming Annual General Meeting and being eligible offersherself for the re-appointment.

The Board recommends her re-appointment. Brief profile of Ms Priya Thapar has beengiven in the Notice convening the Annual General Meeting.

All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 andRegulation16(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015.

The Board of Directors on the recommendations of the Nomination and RemunerationCommittee have revised the remuneration payable to Mr Samir Thapar Chairman &Managing Director and Ms Priya Thapar -Director (Strategic Business Development) of theCompany with effect from 01.04.2019. However other terms and conditions remain the samesubject to approval of shareholders.

24. Formal Annual Evaluation

Pursuant to the provisions of the Companies Act and Listing Regulations annualevaluation of the Board the directors individually as well as working of its Constitutedcommittees has been carried out from time to time.

25. Number of Meetings of Board and its Committees

The details of the number of meetings of the Board held during the financial year2018-19 forms part of the Corporate Governance Report. .


The Company has a well established framework of internal controls in all areas of itsoperations including suitable monitoring procedures and competent personnel. In additionto statutory audit the financial controls of the Company at various locations arereviewed by the Internal Auditors who report their findings to the Audit Committee of theBoard. The Audit Committee is headed by an Independent Director which ensures independenceof functions and transparency of the process of supervision. The Committee meets onregular basis to review the progress of the internal audit initiatives significant auditobservations planning and implementation of the follow-up action required. The Companyconducts its business with integrity and high standards of ethical behavior and incompliance with the laws and regulations that govern its business.

The Company has in place adequate internal financial control systems commensurate withthe size scale and complexity of its operations. The Company has appropriate policies andprocedures for ensuring the orderly and efficient conduct of its business includingadherence of the Company's policies safeguarding of its assets prevention and detectionof frauds and errors accuracy and completeness of accounting records and timelypreparation of reliable financial information. Based on the report of the internalauditor respective departments undertake corrective action in their respective areas andthereby strengthen the controls. Significant audit observations and corrective actionsthereon are presented to the Audit Committee of the Board.


The paid up Equity Share Capital as at March 31 2019 stood at Rs. 209.61 Crores andduring the year under review the Company has not issued shares with differential votingrights.


In compliance with the Regulation 34 (3) read with Schedule V of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 a separate report on CorporateGovernance practices followed by the Company together with a certificate from theCompany's Auditors confirming compliance forms an integral part of this Report.


The Company has a Whistle Blower Policy to report genuine concerns or grievances forredressal. The Whistle Blower Policy has been posted on the website of the . During the year under review no complaint was received by yourcompany.


The Company has a Risk Management Policy for identifying prioritizing and mitigatingrisks which may impact attainment of short and long term business goals of the Company.The risk management framework is reviewed periodically by the risk management teams at allthe units of the Company constituted by the Board which monitors and evaluates theeffectiveness of risk management framework of the Company and strengthens it.


The Company has drafted the Corporate Social Responsibility Policy which may beaccessed on the website of the Company As there is net average lossincurred by the Company during the three preceding financial years the company need notto spend any amount towards Corporate Social Responsibility activities during the yearended 31.03.2019. The CSR Committee comprises of three members. One member of theCommittee is an Independent Director.


The Company firmly believes that without safe clean environment and healthy workingconditions the overall economic growth cannot be achieved and maintained.

The company also takes all possible measures to prevent accidents and occupationalhazards. The manufacturing operations are conducted to ensure sensitivity towards theenvironment minimize waste by encouraging "Green Initiative" practices and useof renewable resources. All employees are required to ensure that they fully understandall policies and comply with the requirements.


During the year under review the Company has not received any complaint under theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.The Company has also formed an Internal Committee for addressing the complaints receivedunder the said Act.

The company has complied with the provisions relating to the constitution of InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013


Statements in this Directors' Report and Management Discussion and Analysis describingthe Company's objectives projections estimates expectations or predictions may be"forward-looking statements" within the meaning of applicable securities lawsand regulations. Actual results may differ materially from those expressed or implied.Important factors that could make difference to the Company's operations include rawmaterial availability and its prices cyclical demand and pricing in the Company'sprincipal markets changes in Government regulations Tax regimes economic developmentswithin India and the countries in which the Company conducts business and other ancillaryfactors.


The Board of Directors would like to express their sincere appreciation for theassistance and cooperation received from the banks Government authorities customers andvendors during the year under review. The Board of Directors also wish to place on recordits deep sense of appreciation for the committed services by the Company's executivesstaff and workers.

For & on behalf of the Board
Chairman and Managing Director
DIN: 00062287
Place: New Delhi
Date: 30.05.2019