The Directors have pleasure in presenting this 11th Annual Report on theaffairs of the Company together with the Audited Statement of Accounts for the fi nancialyear ended on 31st March 2017.
FINANCIAL HIGHLIGHTS/PERFORMANCE OF THE COMPANY:
The fi nancial results for the year ended 31st March 2017 and thecorresponding fi gures for the last year are as under:- (Rs. in lakhs)
|Particulars ||Financial Year 2016-2017 ||Financial Year 2015-2016 |
|Total Income(Gross) ||21677.49 ||20667.46 |
|Less expenses ||20774.22 ||20236.94 |
|Profi t before interest Depreciation and Tax ||903.27 ||430.52 |
|Less : Interest ||226.71 ||211.34 |
|Profi t before Depreciation and Tax ||676.56 ||219.18 |
|Less Depreciation ||65.69 ||66.79 |
|Profi t before Tax ||610.87 ||152.39 |
|Less : Provision for Taxation ||222.02 ||56.85 |
|Profi t after Tax ||388.85 ||95.54 |
|Add: Balance B/F from previous Year ||259.32 ||163.78 |
|Less: Income Tax Adjustments of prior years ||81.97 ||- |
|Amount Available for Appropriation ||566.20 ||259.32 |
|APPROPRIATIONS: || || |
|Transfer to General Reserve ||Nil ||Nil |
|Balance carries to Balance Sheet ||566.20 ||259.32 |
OVERVIEW OF AIR CARGO IN INDIA:
At its present compounded annual rate of growth of 5.5 percent cargo demand in Indiais expected to boost the airfreight market to 2.8 million tons by 2018. The aggregatedemand for air cargo the analysts concluded comes from a renewed emphasis oninternational trade over the last several years and regulations on the amount of foreigndirect investment (FDI) allowed in India's aviation sector.
The Indian government's FDI policies have been particularly favorable towards privateparticipants entering the market "Major policies fueling market growth include theallowance for 100 percent FDI in existing airports and under automatic routes as well as100 percent tax exemption for airport projects for the next ten years.
The demand for air freight is limited by cost typically priced 45 times morethat of road transport and 1216 times high that of sea transport. These valuesdiffer from country to country season to season and from product to product and fordifferent volumes also. Cargo shipped by air thus have high values per unit or are verytime-sensitive such as documents pharmaceuticals fashion garments production sampleselectronics consumer goods and perishable agricultural and seafood products. They alsoinclude some inputs to meet just-in-time production and emergency shipments of spareparts. As the volume of air freight grows there is a natural progression from passengeraircraft to chartered cargo planes of increasing size and ultimately to scheduled cargoservices.
SNAP SHOT OF KEY FINANCIAL PARAMETERS:
|Particulars ||2015-16 ||2016-17 |
|Growth in Revenue (%) ||42.37 ||4.88 |
|Growth in PAT (%) ||31.29 ||289.13 |
|Return on Capital Employed (%) ||15.61 ||26.49 |
|Return on Equity ||14 ||27 |
|Gearing Ratio (TIMES) ||4.31 ||2.06 |
|Interest Coverage Ratio (TIMES) ||2.07 ||4.01 |
|Yield per ton (Rs.) ||4.58 ||5.27 |
During the fi nancial year ending March 31 2017 the company has undergone severalhighs and lows due to various national and international events like Brexit andDemonetization having indirect impact on the logistics industry. Its fi nancial impact isevident in terms of almost fl at or marginal growth in revenue as compared to previousyear. However company revenue has shown compounded annual growth rate of 22% duringFinancial Year 2016-17.
Having said that Jet Freight has been able to cross the hurdles and emerge with betterfi nancials in terms of growth in PAT and improved EPS contributing to shareholdersreturns. Return on Capital employed has shown a healthy growth @ 26.49% with the gearingratio almost halved as compared to previous year. Long term debt ratio has reduced to 0.47times in Financial Year 2016-17 as compared to 1.72 times in fi nancial year 2015-16.Having improved the margins and reducing the debts your company had a situation ofstretched working capital requirement which is evident from the increase in the interestoutfl ow increase by approx. 10% as compared to the previous year.
Your company carried 34855 tonnes in the Financial year 2016- 2017 as compared to29835 tonnes in Financial year 2015-2016. There is a 16.83% growth in tonnage as comparedto the previous year.
DEALING WITH BANKS AND FINANCIAL INSTITUTIONS:
In line with our fi nancial strategy the management endeavored to shift its bankingfacilities from Shamrao Vittal Co-operative Bank Limited to Kotak Mahindra Bank Limitedduring the year for the better and smooth functioning of the company as the company ishaving various branch offi ces across the country. This yielded results in terms ofcompany being able to access funds at lower cost and able to contain its fi nancialexpenses in spite of increase in the utilisation of its working capital facility. Due tobetter negotiations with the bankers the management has been able to get enhanced workingcapital limits by diluting the existing collateral. The bank was obliged to do it due togood fi nancial track record of the company and impressive fi nancial ratios of theprevious years. Kotak Mahindra Bank Limited is also keen in supporting our future growthand would standby us in terms of their commitment to be a valued stakeholder of ourcompany.
TRANSFER TO RESERVES:
The Company has made no transfer to reserves for the fi nancial year 2016-2017.
During the financial year the Directors have not recommended any divided tostrengthen the fi nancial position of the company.
EQUITY SHARE CAPITAL:
The Authorized Share Capital of the Company was increased from Rs. 40000000 to Rs.60000000 w.e.f. July 01 2016. The Paidup Share Capital of the Company as onMarch 31 2016 was Rs. 39984729/- comprising of 39984729 equity shares of Re. 1/-each. During the year under review the Company have consolidated the face value of equityshares from Re. 1/- each to Rs.10/- each whereby the company then had a paid up sharecapital of 3998473 equity shares of R. 10/- each. Further the Company have issued1452000 Equity Shares of R. 10/- Each at Premium of Rs. 18/- per share to public throughits maiden IPO.
BRIEF BACKGROUND ON THE INITIAL PUBLIC OFFER OF THE COMPANY:
The company entered the capital market with its maiden initial public offering (IPO) of1452000 equity shares of face value of Rs. 10/- and at a premium of Rs. 18/- per shareaggregating to Rs. 40656000 by diluting 26.64% of promoter's shareholding. The issueopened for subscription on November 24 2016 and closed on November 28 2016 .The equityshares have been listed on the SME Emerge Platform of National Stock Exchange of IndiaLtd (NSE) w.e.f. December 06 2016. Consequently the Company's paid up share capitalhas increased from Rs. 39984730/- to Rs. 54504730/-.
Your Directors are pleased to inform that the Initial Public Offering (IPO) of theCompany was fully subscribed with an over-subscription to the extent of 5 times over theissue size.The response from investors was really very encouraging.
Its debut on the NSE Emerge platform on December 06 2016 also met with the similarresponse by way of share price hitting the upper circuit of 5% in the opening session ofthe stock exchange.
Further as per The Economic Times survey indicates that Jet Freight IPO has beenrated as the second best IPO in terms of return over the issue price as compared to otherIPO during the fi nancial year.
The Company's equity shares are available for dematerialization through NationalSecurities Depository Limited and Central Depository Services India Limited.
CHANGE IN THE NATURE OF BUSINESS:
During the year under review there were no material changes in the nature of businessof the company.
DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL:
3 The Composition of Board of Directors and the details of Key Managerial Personnel forthe Financial Year 2016-2017 are as follows:
|Name of the Person ||Category ||With effect from and Tenure |
|1 Mr. Richard F Theknath ||Managing Director & Key Managerial Personnel ||20.06.2016 for a period of 5 years |
|2 Mr. Dax F Theknath ||Whole-Time Director & Key Managerial Personnel ||20.06.2016 for a period of 5 years |
|3 Mrs. Agnes F Theknath ||Non -Executive Director ||26.09.2012 |
|4 Mr. Nikhil Sunil Arya ||Independent Director ||25.07.2016 for a period of 5 years. |
|5 Mr. Pankaj Gupta Kumar ||Independent Director ||25.07.2016 for a period of 5 years. |
|6 Mr. Jabir S Contractor ||Chief Financial Offi cer (Key Managerial Personnel) ||25.07.2016 for a period of 5 years. |
|7 Ms. Shraddha P Mehta ||Company Secretary & Compliance Offi cer (Key Managerial Personnel) ||19.07.2016 |
3 Retire by Rotation:
Pursuant to the provisions of section 152 of the Companies Act 2013 the offi ce ofMr. Richard F Theknath (DIN: 01337478) Director is liable to retire by rotation at thisAnnual General Meeting and being eligible he has offered himself for re-appointment.Accordingly the proposal for his re-appointment has been included in the Notice conveningthe Annual General Meeting of the Company.
A brief resume of directors seeking appointment/re-appointment consisting nature ofexpertise in specifi c functional areas and name of companies in which they holddirectorship and/or membership/ chairmanships of committees of the respective Boardsshareholding and relationship between directorship inter-se as stipulated under Reg. 36(3)of the SEBI (LODR) Regulations 2015 are given in the section of notice of AGM formingpart of the Annual Report.
COMMITTEES OF THE BOARD:
I. The Board has constituted various committees in accordance with the provisions ofthe Companies Act 2013 the details of which are given as under:
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders Relationship Committee.
1. Audit Committee :
The Company has constituted an Audit Committee as per the provisions of Section 177 ofthe Companies Act 2013 vide resolution passed in the meeting of the Board of Directorsheld on July 25 2016.
The committee presently comprises the following three (3) directors:
Composition of Audit Committee:
|Name of the Director ||Status ||Nature of Directorship |
|Mr. Pankaj Gupta Kumar ||Chairman ||Non-Executive & Independent Director |
|Mr. Nikhil Sunil Arya ||Member ||Non-Executive & Independent Director |
|Mr. Richard Francis Theknath ||Member ||Managing Director |
The term of reference of Audit Committee includes:
3 Oversight of the Company's fi nancial reporting process and the disclosure of its financial information to ensure that the fi nancial statement is correct suffi cient andcredible
3 Recommendation for appointment remuneration and terms of appointment of auditors ofthe Company
3 Reviewing and monitoring the auditor's independence and performance andeffectiveness of audit process
3 Scrutiny of related party transactions and inter-corporate loans and investments
3 Reviewing the adequacy of internal audit function
3 Reviewing with the management the annual fi nancial statements and auditor's reportthereon before the same are forwarded to the board for approval with primary focus on; i.Matters required to be included in the director's responsibility statement to beincluded in the board's report in terms of clause (c) of sub-section (3) of Section 134 ofthe Companies Act 2013
ii. Changes if any in accounting policies and practices and reasons for thesame
iii. Significant adjustments made in the fi nancial statements arising out ofaudit fi ndings iv. Disclosure of any related party transactions
v. Modifi ed opinion(s) in the draft audit report.
During the fi nancial year 2016-2017 the Audit Committee of the Board of Directors metFour times viz. on 31.08.2016 06.10.2016 28.01.2017 30.03.2017.
2. Nomination and Remuneration Committee
The Company has constituted a Nomination and Remuneration Committee. The constitutionof the Nomination and Remuneration Committee as per the provisions of Section 178 of theCompanies Act 2013 was approved by a Meeting of the Board of Directors held on July 252016.
The Board has framed the Nomination & Remuneration Committee which ensureseffective compliances as mentioned in section 178 of the Companies Act 2013. The defi nedterms of reference for the Nomination & Remuneration Committee are as follows;
3 Formulation of the criteria for determining qualifi cations positive attributes andindependence of a director and recommend to the board of directors a policy relating tothe remuneration of the directors key managerial personnel and other employees of theCompany;
3 Formulation of criteria for evaluation of performance of independent directors andthe board of directors of the Company;
3 Devising a policy on diversity of Board of Directors;
3 Identifying persons who are qualifi ed to become directors and who may be appointedin senior management in accordance with the criteria laid down and recommend to the boardof directors their appointment;
3 Whether to extend or continue the term of appointment of the independent director onthe basis of the report of performance evaluation of independent directors.
Composition of Nomination and Remuneration Committee:
|Name of the Director ||Status ||Nature of Directorship |
|Mr. Pankaj Gupta Kumar ||Chairman ||Non-Executive & Independent Director |
|Ms. Agnes Francis Theknath ||Member ||Non-Executive Director |
|Mr. Nikhil Sunil Arya ||Member ||Non-Executive & Independent Director |
During the fi nancial year 2016-2017 the Nomination and Remuneration Committee of theBoard of Directors met Two times viz. on 31.08.2016 and 30.03.2017.
3. Stakeholders Relationship Committee
The Company has constituted a Stakeholder's Relationship Committee to redress thecomplaints of the shareholders. The Stakeholder's Relationship Committee was constitutedas per the provisions of Section 178(5) of the Companies Act 2013 vide resolution passedat the meeting of the Board of Directors held on October 23 2016.
Composition of Stakeholder's Relationship Committee:
|Name of the Director ||Status ||Nature of Directorship |
|Ms. Agnes Francis Theknath ||Chairperson ||Non-Executive Director |
|Mr. Nikhil Sunil Arya ||Member ||Non-Executive & Independent Director |
|Mr. Dax Francis Theknath ||Member ||Whole-Time Director |
The Stakeholder's Relationship Committee shall oversee all matters pertaining toinvestors of our Company.
The Committee had delegated the power of Share Transfer to Registrar and TransferAgent who processes the transfers. The Committee also considers and resolves thegrievances of the security holders of the listed entity including complaints related totransfer of shares non-receipt of annual report and non-receipt of declared dividends andlooks after the performance of the Registrar and Transfer Agent of the Company andrecommends measures for overall improvement in the quality of investor services.
II. The Board constitutes additional functional committees from time to timedepending upon the business needs. MATERIAL CHANGES BETWEEN THE DATE OF THE BOARD REPORTAND END OF FINANCIAL YEAR:
The following activities have been carried out by the Company from the end of theFinancial Year till the date of signing of the Directors Report affecting the fi nancialposition of the Company detailed as under -:
1. In addition to above fi nancial facility our Company has availed term loan ofRs. 40500000 from Kotak Mahindra Bank Limited to fi nance the purchase of Offi cepremises of the Company.
2. The Company has availed a Vehicle Loan facility of Rs. 1050000 from HDFC BankLimited for meeting the cost of acquiring Honda CRV repayable in equated monthlyinstallments not exceeding 36 months.
A fraud and corruption free environment in a company is the objective and in view ofthat a Vigil Mechanism (Whistle Blower) Policy has been adopted by the Board fordirectors and employees which is uploaded on the website of the company www.jetfreight.inpursuant to the provisions of section 177(9) & (10) of the Companies Act 2013. Nocomplaint of this nature has been received by the Audit Committee during the year underreview.
EXTRACT OF THE ANNUAL RETURN IN FORM MGT-9:
Pursuant to section 92(3) of the Companies Act 2013 and Rule 12(1) of the Companies(Management and Administration) Rules 2014 is annexed herewith in Annexure-A.
As on March 31 2017 there were no subsidiaries of the company hence this clause isnot applicable.
At the AGM of the company held on 30th September 2014 M/s. S. C. Mehra& Associates. Chartered Accountants Statutory Auditors of the Company havingregistration number (ICAI Firm Registration No. 106156W were appointed for a term of five years i.e. till the conclusion of 13th Annual General Meeting subject toratifi cation of their appointment at every Annual General Meeting. The resolution forratifi cation of their appointment is placed for approval of members of the Company at theensuing Annual General Meeting. The Company has received a certifi cate from the statutoryauditors confi rming that they are eligible for ratifi cation of their appointment.
The report of the Statutory Auditors on Standalone Financial Statements forms a part ofthe Annual Report. There are no specifi cations reservations adverse remarks ondisclosure by the Statutory Auditors in their report. They have not reported any incidentof fraud to the Audit Committee of the Company during the year under review.
Pursuant to Section 204 of Companies Act 2013 the Board of Directors had appointedM/s Parikh & Associates Practicing Company Secretaries Mumbai to undertake theSecretarial Audit of the Company. The Secretarial Auditor's Report is attached to thisreport as `Annexure- B'. The response from the Management is that the Companyconsolidated its Equity Share Capital from Re 1/- each into a share of Rs. 10/- each withshareholders approval by virtue of which one share got rounded off.
INTERNAL FINANCIAL CONTROL WITH REFERENCE TO FINANCIAL STATEMENTS
The Company has adequate fi nancial control procedure commensurate with its size andnature of business. These controls include well defi ned policies guidelines standardoperating procedure authorization and approval procedures. The internal fi nancialcontrol of the company are adequate to ensure the accuracy and completeness of theaccounting records timely preparation of reliable fi nancial information prevention anddetection of frauds and errors safeguarding of the assets and that the business isconducted in an orderly and effi cient manner.
The Company has not invited/ accepted any deposits from the public during the yearended March 31 2017. Hence there were no unclaimed or unpaid deposits as on March 312017.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:
During the year under review there has been no such signifi cant and material orderspassed by the regulators or courts or tribunals impacting the going concern status andcompany's operations in future.
CORPORATE SOCIAL RESPONSIBILITY:
Since Section 135 of Companies Act' 2013 and Rules made there under is not applicablehence no meetings were conducted during the year.
NUMBER OF MEETING OF THE BOARD:
During the fi nancial year 2016-2017 the Board of Directors met Thirteen times viz. on31.05.2016 20.06.2016 27.06.2016 25.07.2016 01.08.2016 31.08.2016 21.09.201606.10.2016 23.10.2016 11.11.2016 14.11.2016 09.02.2017 30.03.2017.
THE NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINTVENTURES OR ASSOCIATE COMPANIES DURING THE FINANCIAL YEAR 2016-2017:
The Company does not have any Subsidiaries Joint Ventures or Associate companiesduring the fi nancial year 2016-2017.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the requirement under section 134(3)(c) of the Companies Act 2013 withrespect to Directors' Responsibility Statement it is hereby confi rmed that: (i) in thepreparation of the annual accounts for the fi nancial year ended 31st March 2017 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed along with proper explanation relating to material departures; (ii)the Directors have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company as at March 31 2017 and of the profi t andloss of the company for that period; (iii) the Directors have taken proper and suffi cientcare for the maintenance of adequate accounting records in accordance with the provisionsof the Companies Act 2013 for safeguarding the assets of the company and for preventingand detecting fraud and other irregularities; (iv) the Directors have prepared the annualaccounts on a going concern basis; (v) the Directors have laid down internal fi nancialcontrols to be followed by the company and that such internal fi nancial controls areadequate and were operating effectively.
(vi) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
The Company has developed and implemented a Risk Management Policy which identifi esmajor risks which may threaten the existence of the Company. The same has also beenadopted by our Board and is also subject to its review from time to time. Risk mitigationprocess and measures have been also formulated and clearly spelled out in the said policy.
A STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION (6) OFSECTION 149 OF THE COMPANIES ACT 2013:
The Company has received necessary declarations from Mr. Nikhil S Arya and Mr. PankajGupta Kumar Independent Directors of the company pursuant to the requirement of section149(7) of the Companies Act 2013 that they fulfi ls the criteria of independence laiddown in section 149(6) of the Companies Act 2013.
COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FORDETERMINING QUALIFICATIONS POSITIVE ATTRIBUTES INDEPENDENCE OF A DIRECTOR AND OTHERMATTERS PROVIDED UNDER SUB-SECTION (3) OF SECTION 178: A policy known as "Appointmentcriteria for Directors & Senior Management and their Remuneration Policy"approved by the Nomination and Remuneration Committee and Board is followed by the Companyon remuneration of Directors and Senior Management employees as required under Section178(3) of the Companies Act 2013 and Rule 6 of the Companies (Meetings of Board and itsPowers) Rules 2014. The Policy aims at attracting and retaining high caliber personnelfrom diverse educational fi elds and with varied experience to serve on the Board forguiding the Management team to enhanced organizational performance.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT2013:
Particulars of loans given investments made guarantees given and securities providedalong with the purpose for which the loan or guarantee or security is proposed to beutilized by the recipient under the provisions of Section 186 of the Companies Act 2013read with the Companies (Meetings of Board and its Powers) Rules 2014 amended from timeto time are forming part of the notes to the fi nancial statements provided in thisAnnual Report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO INSUB-SECTION (1) OF SECTION 188 OF THE COMPANIES ACT 2013:
The particulars of material contracts or arrangements made with related partiesreferred to in section 188(1) of the Companies Act 2013 in the prescribed form AOC-2 isappended as Annexure C' to the Boards' Report.
PARTICULARS OF EMPLOYEE:
Details in terms of the provisions of Section 197 of the Companies Act 2013 read withRule 5(2) of the Companies (Appointment and Remuneration) Rules 2014 the names and otherparticulars of the employee are appended as Annexure D' to the Boards'Report. The ratio of remuneration of each Director to the median employee's remunerationand other details in terms of Section 197(12) of the Companies Act 2013 read along withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is annexed herewith as Annexure D' and forms part of this Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information under Section 134(3)(m) of the Companies Act 2013 read with Rule 8(3)of the Companies (Accounts) Rules 2014 for the year ended March 31 2017 is given below:
A. Conservation of Energy: i) The steps taken or impact on conservation of energy:
The operations of the Company do not involve high energy consumption. However theCompany has for many years now been laying great emphasis on the Conservation of Energyand has taken several measures including regular monitoring of consumption implementationof viable energy saving proposals improved maintenance of systems etc.
ii) The steps taken by the Company for utilizing alternate sources of energy: Nil
iii) The capital investment on energy conservation equipments: Nil B. TechnologyAbsorption:
i) The efforts made towards technology absorption : Nil
ii) The benefi ts derived like product improvement cost reduction product developmentor import substitution: Nil iii) In case of imported technology (imported duringthe last three years reckoned from the beginning of the Financial Year): a) thedetails of technology
b) the year of Import
c) whether the technology been fully absorbed
d) If not fully absorbed areas where this has not taken place reasons thereforeand future plan of action iv) The expenditure incurred on Research and Developmentduring the year included in the manufacturing cost.- Nil C. Foreign ExchangeEarnings and Outgo:
|Particulars ||2016-2017 ||2015-2016 |
|Foreign Exchange Earnings ||4600301 ||10115787 |
|Foreign Exchange outgo ||8892344 ||13486585 |
FORMAL ANNUAL EVALUATION MADE BY THE BOARD OF ITS OWN PERFORMANCE AND THAT OF ITSCOMMITTEES AND INDIVIDUAL DIRECTORS:
Pursuant to Section 134(3) read with Rule 8(4) of the Companies (Account) Rules 2014& Section 178(2) of the Companies Act 2013 a formal annual evaluation needs to beconducted by the Board of its own performance and that of its committees and individualdirectors. Schedule IV to the Companies Act 2013 states that the performance evaluation ofIndependent Directors shall be done by the entire Board of Directors excluding theDirector being evaluated.
The Board based on evaluation criteria recommended by the Nomination andRemuneration Committee' and Code for Independent Directors' evaluated theperformance of Board members. The Board after due discussion and taking into considerationof the various aspects such as Knowledge and skills Competency Financial literacyAttendance at the Meeting Responsibility towards the Board Qualifi cations ExperienceFulfi llment of functions assigned to him Ability to function as a team InitiativeAvailability & Attendance Commitment Contribution; expressed their satisfaction withthe evaluation process and performance of the Board.
DISCLOSURES UNDER THE SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013:
The Company has been employing women employees in various cadres within its RegisteredOffi ce Corporate offi ce and its Branches. The Company has in place a policy againstSexual Harassment in line with the requirements of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013. Internal Complaint Committeesis set up to redress complaints if received and are monitored on regular basis. During theyear under review Company did not receive any complaint regarding sexual harassment.
REVIEW OF A STATEMENT ON THE USAGE OF THE PROCEEDS OF THE ISSUE:
Pursuant to Reg. 32 of SEBI (Listing Obligation & Disclosure Requirements)Regulations 2015 Our Company have submitted the below statement to National StockExchange of India Limited (NSEIL) after reviewing it indicating category wise variationbetween projected utilization of funds made by it in its offer document (Prospectus) andthe actual utilization of funds.
The statement below indicates that the issue proceeds have been fully utilized and thepurposes for which these proceeds were raised through an Initial Public Offer (IPO) hasbeen achieved. The objects of the issue as stated in the prospectus are; to meet theworking capital requirements of the Company and issue expenses. The proceeds of the issuehas not been used for the purposes or objects other than those mentioned in the offerdocument or prospectus of the company.
A statement showing utilization of IPO proceeds was placed for review before the AuditCommittee held on April 26 2017 for the period 06.12.2016 (Company's listing date onNSE-Emerge Platform) to 31.03.2017 which was certifi ed by Mr. S. C. Mehra Partner ofM/s. S. C. Mehra & Associates Statutory Auditors of our Company as detailed hereinbelow:
| || || || |
(Rupees In Lakhs)
|Particulars ||As per Prospectus ||Actual Expenses ||Variation if any* |
|Issue Expenses ||36.00 ||45.12 ||9.12 |
|Working Capital Margin ||370.56 ||361.44 ||(9.12) |
|Amount Received as Proceeds of the Issue ||406.56 ||406.56 ||Nil |
*In terms of the fi nal prospectus fi led for IPO any variations in the actualutilization of funds allocated for the purposes set forth increased fund requirements fora particular purpose may be fi nanced by surplus funds if any available in respect ofthe other purposes for which funds are being raised in this Issue. Accordingly variationamong the actual expenses is adjusted among the various heads.
The reason for the variation in the proceeds of the issue within the category of the"Objects of the Issue" as mentioned in the Prospectus is that the issueexpenses as envisaged at the time of coming out with an IPO got underestimated and hencethe additional expenses was required to be funded by drawing from Working Capital Margin.
AWARDS & ACHIEVEMENTS:
Your Company has a long list of Awards and Recognition from the Airlines during itslong legacy of three decades. Company has been felicitated at various forums by valuablestakeholders in the business. To highlight a few of its achievements during the FinancialYear 2016-17 a list is as given below:
|Airline ||Awarded for ||Year |
|1 Air-India ||1st Rank-Intl Perishable Cargo Agent ||2016 - 2017 |
|2 Emirates ||Top Cargo Agent ||2016 - 2017 |
|3 Emirates ||Certifi cate of Appreciation ||2016 - 2017 |
Given below is the list of few of our esteemed business partners with whom the businessvolumes have increased as compared to previous year.
|Airline ||FY 2016-2017 ||FY 2015-2016 ||Growth in Volumes |
| ||(tonnes) ||(tonnes) || |
|Air India Ltd. ||6408 ||1430 ||348% |
|Jet airways ||8916 ||4973 ||80% |
|Emirates ||9195 ||9104 ||1% |
NEW LOOK OF COMPANY LOGO:
We are pleased to inform that since the company has embarked on its new journey bygoing public and increasing its stakeholders and turning a new leaf in its history afresh look has been designed for its logo. Thus giving the company a new tag line which ismore in line with its long practise philosophy i.e. reliability and trusted businesspartner.
IMPACT ANALYSIS OF MAJOR EVENTS DURING THE YEAR ON THE COMPANY PERFORMANCE:
CONSEQUENCE OF BREXIT ON INDIAN EXPORTS:
Jet Freight has got some of its major revenue contributing customers exporting theirproducts to United Kingdom. Brexit was an event which had its ripple effects on the Indianeconomy. More so in the case of exports as UK is a very major market for Indian exports.India's major exports to Britain includes apparels pharmaceuticals automobiles etc.
With the advent of Brexit and the consequential devaluation of pound impacted theIndian exporters fraternity very adversely. As a result shippers to UK either curtailedtheir exports to UK and those already exported to UK before the Brexit were facing a hugedip in their realization due to devlaution of pound. These two things combined added tothe exporters woes. Thus your company was having a double impact due to exports beingcurtailed by the exporter and the exporters whose shipment was already done prior to theBrexit were sitting on a huge conversion loss. Hence the payment cycle to the company gotslowed down.
As mentioned earlier that due to a good banking relationship with the bankers thecompany was able to tide over this slow down in realisations and come out of this eventunscrathed.
CONSEQUENCE OF DEMONETISATION UNDERTAKEN BY GOI:
In the wake of the demonetisation drive conducted by the Governemnt from 9 November2016 banning 500 and 1000 rupee notes took the entire country by storm as the event hada long lasting impact on the Indian economy post Novemebr 092016. Businesses across thelength and breath of the country got crippled due to scarcity of new notes and the tradegot hampered. Farm produced got decayed at various places due to non-availability oftransportation facility. Agri products were struggling to reach the markets from where itcould be further shipped. It took a long time for the traders and the logistics industryto come to terms with the alternative terms of payment other then cash as promoted by theGOI. In the interveninig period exports plus the local trade got badly affected and theconsequential impact could be felt on the company business. Our business survived thatshock also.
FALL IN INTERNATIONAL OIL PRICES AND USD DEVALUATION
With the fall in the oil prices and devaluation of USD against INR has been taking itstoll on the export business from India. Any further fall in the USD shall eat into themargin of the exporters and can give an adverse push to the growth of the industry.
FUTURE BUSINESS PROSPECTS:
Capacity growth in the Airline industry is resulting in a lot of cargo capacity cominginto the market. According to Cargo Facts air freight transported in the belly ofpassenger airlines accounted for 13.6 percent of total cargo in 2015 up from 11.7 percentin 2009. These wide body passenger aircraft are operating increased frequencies (i.e.carrying more capacity) on some of the most lucrative trade routes. While carrying cargoon passenger airlines is helping the fi nancial performance of those airlines it isleading to falling pricing power for cargo carriers and lower cargo yields. This isfurther fuelled by the increase in wide body passenger jets and the belly space theseaircraft provide for hauling freight. Yields have fallen with capacity continuing to growand demand falling analysts expect that it could take time for freight yields to rebound.
THE RISE OF E-COMMERCE
Traditional freight traffi c continues to make up the bulk of freight transported byair; and while this remains subdued there's growth in other segments of the air freightindustry. One of these areas is e-commerce which includes the sales of goods and servicesthrough the Internet via any device regardless of the method of payment or fulfi llment(e-commerce excludes travel and event ticket sales over the Internet). Strong consumerdemand and buying habits are mitigating some of the negative effects of the recentindustrial recession and slowing international trade with e-commerce becoming a growingdriver of the air cargo industry.
Distributing all of these vastly different products overnight or within two-day timeframes is forcing many air cargo companies to adapt to a new business model. Success inthis sector hinges not only on the ability to adjust to changing customer requirements butalso to compete effectively with customers that rely on the signifi cant belly space ofwide body passenger fl eets.
The air cargo segment is a wide-ranging industry with various types of operators eachfi lling a particular niche of freight demand. As the market changes with lessinternational trade and more regional delivery these niches may evolve as well.
Your Company has also taken a leap into domestic freight forwarding in view of theincrease demand of logistics by the e-commerce companies in India. E-commerce trade isgrowing exponentially in India and with the kind of demand generated by e-commercecompanies there exists a lot of space for the freight forwarders to add value by beingtheir valued service providers. With the Government of India (GOI) open sky policy manyprivate airlines have forayed into the Aviation industry and the existing airlines arealso increasing their fl eet size to accommodate the passenger air traffi c growth inIndia. With the increase in the number of regional air ports under the RegionalConnectivity Scheme (RCS) scheme of GOI and the Ude Desh ka Aam Naagrik (UDAN) policyimplemented by the govt we would witness the jump in the air travel industry growth. Evenforeign airlines are eyeing stake in the Indian aviation industry in order to reap thebenefi t of growth in future. This is an encouraging sign of growth for our company.
IMPACT OF GST ON FREIGHT INDUSTRY:
GST is going to be a game changer for the Indian Economy whereby there would be"ONE TAX ONE NATION" concept that would be put to practise by the GOI. Thisindirect tax reform shall have profounding impact on the way business is conducted in theentire nation.
As a precursor to the GST all the sectors of the economy are doing the impactassessment due to the coming of the GST. Different sectors are going to be impacted and sois the logistics industry. As per the notifi cations put up by the GST council so far theAir freight activity is chargeable to tax under GST regime @18% which was under negativelist under the existing Service tax regime. Hence under the current system Air freight wastotally exempt from Service Tax. This change shall adversely impact the freight forwardingas well as the export industry. Going by this the freight forwarders as well the exportersshall feel a stretched in their working capital requirements. The levy of 18% shall add toexporters cash outfl ow with the consequential adverse impact on our payment cycle. Thecompany shall endeavour to re-negotiate the terms of its payment with the exporters sothat statutory liability of GST can be met on time. Having said this the company shallhave to pay 18% GST on air freight to all the Airlines for which it can claim set-off.
Your Directors take this opportunity to place on record their appreciation and sinceregratitude to the Government of India Government of Maharashtra Bankers to the Companythe Airlines customer its employees/consultants for their valuable support and lookforward to their continued co-operation in the years to come.
Your Directors acknowledge the support and co-operation received from the employees andall those who have helped in the day to day management.
For and on behalf of the Board of Directors
For JET FREIGHT LOGISTICS LIMITED
|Richard Theknath ||Dax Theknath |
|Managing Director ||Whole-time Director |
|DIN : 01337478 ||DIN: 01338030 |