TO THE SHAREHOLDERS
Your Directors are pleased to present their Sixty-seventh (67 ) report on the businessand operations of the Company for the Financial Year ended 31 March 2016.
1. Financial Highlights
The table given below gives the financial highlights of the Company on Standalone andConsolidated basis for the Financial Year ended 31 March 2016 as compared to the previousfinancial year.
| || || ||(INR In Lacs) |
|Particulars ||Standalone ||Consolidated |
| ||2014-15 ||2015-16 ||2015-16 |
|Revenue from Operations ||38151.79 ||38527.79 ||41512.04 |
|Other Income ||507.06 ||368.04 ||384.46 |
|Total Income ||38658.85 ||38895.83 ||41896.49 |
|Total Expenses ||36535.58 ||37004.71 ||39889.35 |
|Profit before Tax (PBT) ||2123.27 ||1891.12 ||2007.14 |
|Less: || ||640.00 ||679.18 |
|Provision for Tax- Current ||681.00 || || |
|- Deferred ||(13.06) ||(4.98) ||(5.43) |
|- Tax paidfor earlier years ||- ||8.56 ||10.95 |
|Profit available for appropriation ||1455.33 ||1247.54 ||1322.45 |
|- Interim dividend ||238.54 ||238.54 ||238.54 |
|- Proposed dividend ||Nil ||Nil ||- |
|- Dividend Tax ||47.69 ||48.56 ||74.56 |
|- General reserve ||1100.00 ||1027.91 ||1027.91 |
|Balance carriedforward ||408.76 ||341.29 ||468.54 |
2. State of the company's affairs
During the year under review revenues grew by 1.00% approx to INR 38527.79 Lacs onlyin comparison to INR 38151.79 Lacs only. While profit before tax decreased by 10.93%approx to INR 1891.12 Lacs only in comparison to INR 2123.27 Lacs only due to adversemarket conditions. Profit after tax also reduced by 14.28% approx to INR 1247.54 Lacs onlyin comparison to INR 1455.33 Lacs only. Earnings per share for the year stood at INR 20.92only.
Consolidated turnover stood at INR 41512.04 Lacs only. Consolidated profit after taxstood at 1322.45 Lacs only.
2.1 Material changes and commitments affecting the financial position between end ofthe financial year and at the date of this report
There have been no material changes and commitments if any affecting the financialposition of the Company which have occurred during or at the end of the financial year towhich the financial statements relate and the date of the report.
2.2 Change in nature of the Business
There has been no change in the nature of the business of the Company.
2.3 Capital Expenditure incurred during the year and its impact on the liquidity of theCompany
During the year under review the Company has spent INR 11993314/- only as capitalexpenditure towards purchase of building which is being used as warehouse to storeinventories. It may be utilized for the expended business operations of the Company. Therehas been no negative impact on liquidity of the Company.
3. Consolidated Accounts
Consolidated Financial Statements of your Company for the Financial Year 2015-16 areprepared in compliance with Section 129(3) of the Companies Act 2013. As per rule 5 ofCompanies (Accounts) Rules 2014 a statement in form AOC-1 containing the silent featuresof the financials statements of associates and joint ventures companies are attachedherewith as "Annexure A". Consolidated financial statements have beenprepared on the basis of audited financial statements of your Company its joint venturecompany and associate companies as approved by the Board of Directors of respectivecompanies.
Your Directors had declared an Interim Dividend of INR 4/- (40 percent per equityshare) per share in the meeting of Board of Directors of the Company held on 11 February2016. Keeping in view the performance for the financial year 2015-16 Interim Dividend isconsidered as Dividend and accordingly no final dividend has been recommended by Board ofDirectors of the Company.
4.1 Transfer of Unclaimed Dividend to Investor Education & Protection Fund (IEPF)
As per Section 124 and 125 of the Companies Act 2013 any amount in theunpaid dividend accounts of the Company which has remained unclaimed and unpaid for aperiod of seven years from the date they become due for payment needs to be transferredto 'Investor Education and Protection Fund' (IEPF Fund) established by the CentralGovernment.
In line with the above provisions during the year the Company has transferredfollowing uncashed/ unclaimed dividend to IEPF:
|Dividend A/c ||Amount(INR) ||Date of Transfer |
|Unclaimed Dividend A/c 2007-08 (Final Dividend) ||363717/- ||23rd November 2015 |
|Unclaimed Dividend A/c 2008-09 (Interim Dividend) ||399768/- ||25th July 2016 |
4.2 Uncashed / Unclaimed Dividend:
Dividend for the financial year ended 31 March 2008 (Final Dividend) and 31 March2009 (Interim Dividend) which remains uncashed or unclaimed for more than seven yearshad been transferred to the Investor Education and Protection Fund ("IEPF").Details of uncashed / unclaimed dividend starting from financial year 2009-10 onwards areas under:
|Financial Year ||Type of Dividend ||Date of Payment ||Due Date for Transfer |
|2009-10 ||Interim ||26.02.2010 ||28.03.2017 |
|2010-11 ||Interim ||28.02.2011 ||31.03.2018 |
|2011-12 ||Interim ||28.02.2012 ||02.04.2019 |
|2012-13 ||Interim ||28.02.2013 ||01.04.2020 |
|2013-14 ||Interim ||28.02.2014 ||01.04.2021 |
|2014-15 ||Interim ||05.02.2015 ||26.02.2022 |
|2015-16 ||Interim ||29.02.2016 ||18.03.2023 |
Shareholders who have not encashed the dividend(s) are requested to do so or approachto the Company before these are statutorily transferred into IEPF.
5. Transfer to Reserves
After payment of interim dividend an amount of INR 102791336/- (INR Ten CroresTwenty Seven Lacs Ninety One Thousand Three Hundred Thirty Six only) generated out ofprofits of the Company has been transferred to General Reserve Account during thisfinancial year. Moreover an amount of INR 34128861/- is proposed to be carried forwardin the Profit and Loss account.
6. Subsidiary Joint Ventures Associate Companies
As on March 31 2016 Your Company has no subsidiary company. Its Joint ventures andAssociate companies are:
a) JMA Rane Marketing Limited (CIN No.: U51909DL1991PLC042645) Joint Venture ;
b) Jullundur Auto Sales Corporation Limited (CIN.: U34101DL1959PLC003066) Associate;&
c) ACL Components Limited (CIN No.: U32204HR1985PLC049478) - Associate All theassociates & joint venture companies are involved in the business of distribution ofauto spare parts in different regions of India.
7. Public Deposits
During the Financial Year ended 31 March 2016 the Company has not accepted anydeposit falling within the ambit of section 73 of the Act and the Companies (Acceptance ofDeposit) Rules 2014.
8. Conservation of energy technology absorption and foreign exchange earningsand outgo
Companies (Disclosure of particulars in the report of Board of Directors) Rules 1988are not applicable to the Company during the period under review. Details on ForeignExchange earnings and outgo are as under:
| || ||(Amount in INR) |
|Foreign Exchange ||2015-16 ||2014-15 |
|Inflow ||- ||- |
|Outflow ||- ||1123200 |
9. Changes in Share Capital
Authorized Share Capital is INR 100000000/- (INR Ten Crores only) divided into10000000 equity share of INR 10/- each. Paid-up share capital of the Company is INR59636100/- (INR Five Crores Ninety Six Lacs Thirty Six thousand and One Hundred Only).
During the Year under review there has been no change in Share Capital of the Companyas compared to last financial year.
10. Extract of Annual Return.
Form MGT-9 providing an extract of the Annual Return as prescribed under Section 92 ofthe Companies Act 2013 and read with Rule 12 (1) of Companies (Management andAdministration) Rules 2014 is annexed herewith as "Annexure B" of thisAnnual Report.
11. Directors and Key Managerial Personnel
11.1 Directors retire by rotation
In accordance with Section 152 of the Companies Act 2013 and Articles of Associationof the Company Ms. Shuchi Arora (DIN: 00093201) and Mr. Sanjeev Kumar (DIN: 00094725)Directors of the Company retire by rotation at the ensuing Annual General Meeting andbeing eligible offer themselves for re-appointment.
11.2 Appointment and resignation of the directors
During the year under review Mr. Aditya Puri (DIN: 00052534) resigned from thedirectorship of the Company w.e.f 28 September 2015. The Board places on record its deepappreciation for his invaluable support and guidance during his association with theCompany.
Ms. Tanupriya Puri (DIN: 07267116) has been appointed as an Additional Director on theBoard of the Company w.e.f. 04 November 2015. Whereas Ms. Tanupriya Puri (DIN: 07267116)shall hold the office of Additional Director till the conclusion of 67 Annual GeneralMeeting subject to the confirmation by the shareholders of the Company.
11.3 Confirmation of appointment / re-appointments
Your Directors recommend the reappointment of retiring directors and confirmation ofappointment of Additional Director as Non-Executive Director on the Board of the Companyin view of the enabling provisions of the Companies Act 2013 read with Companies(Appointment and Qualification of Directors) Rules 2014. Detailed profiles of appointeedirectors are given in Notice of AGM and Corporate Governance Report.
11.4 Key Managerial Personnel
Mr. Virat Sondhi Managing Director Mr. Deepak Aora Joint Managing Director CANarinder Pal Singh Chief Financial Officer and CS Sachin Saluja Company Secretary arethe Key Managerial Personnel of the Company in accordance with the provisions of Section2(51) and 203 of the Companies Act 2013 read with the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014.
12. Declaration by Independent Director(s)
All Independent Directors have furnished declarations that they meet the criteria ofIndependence as laid down under section 149(6) of the Companies Act 2013 read withCompanies (Appointment and Qualification of Directors) Rules 2014 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
13. Board Meetings
13.1 Number of Board Meetings
Your Board met 05 (Five) times during the year under review. The details of the Boardmeetings and attendance of Directors are provided in the Corporate Governance Report.
13.2 Annual Evaluation
Pursuant to the provisions of the Companies Act 2013 & rules made thereunder andthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Boardhas carried out an annual performance evaluation of its own performance the directorsindividually as well as the evaluation of the working of its Committees. The manner inwhich the evaluation has been carried out has been explained in the Corporate GovernanceReport.
13.3. Separate meeting of Independent Directors
A separate meeting of Independent Director was held on 30 December 2015 for the year2015-16 to consider:
a) Performance of Non-independent directors and the Board as a whole;
b) Performance of the chairman of the Company taking into account of the views ofExecutive Directors and Non-executive directors; and
c) Assess the quality quantity and timeliness of flow of information between theCompany Management and the Board that is necessary for the Board to effectively andreasonably perform their duties.
14. Directors Responsibility Statement
In terms of Section 134(3) (c) of the Companies Act 2013 the Board of Directors tothe best of their knowledge and ability confirm that: that in the preparation of theannual financial statements for the year ended 31 March 2016 all the applicableaccounting standards had been followed along with proper explanation relating to materialdepartures if any; they had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit of the Company for that period; they had taken proper andsufficient care for the maintenance of adequate accounting records in accordance with theprovisions of this Act for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; they had prepared the annual accounts on a goingconcern basis; they had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and they had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
15.1 Statutory Auditors
The Company's Auditors M/s V. P. Vijh & Co. Chartered Accountants (FRN001248N)Jalandhar City Punjab who was appointed as Statutory Auditors of the Company for aperiod of three consecutive years in 65 Annual General Meeting subject to theratification at every Annual General Meeting of the Company. Therefore it is proposed andrecommended to ratify the appointment of M/s V. P. Vijh & Co. Chartered Accountantsas Statutory Auditors of the Company from the conclusion of the 67 Annual General Meetingtill the conclusion of 68 Annual General Meeting (being the last year of transitionalperiod of three years).
The Company has received a letter from M/s V. P. Vijh & Co. Chartered Accountantsto the effect that they are eligible to hold office as Auditors and have not incurred anydisqualification under the Companies Act 2013 and Chartered Accountants Act 1949 and therules and regulations made thereunder. Further the Auditors have confirmed that theproposed ratification is in accordance and within limits laid down by or under theprovisions of the Companies Act 2013.
15.1.1 Report of Auditors
The Auditor's Report for the Financial Year ended March 31 2016 does not contain anyqualification reservation or adverse remark or disclaimer on the financials/operations ofthe Company. The observations and comments given by Auditors in their report read togetherwith notes to account are self-explanatory and hence do not call for any further commentsunder Section 134 of Companies Act 2013 and rules made thereunder.
15.1.2 Fraud Reporting
Statutory Auditors have not reported any incident of fraud to the Audit Committee ofthe Company in the year under review.
15.2. Secretarial Auditors and their report
Pursuant to the provisions of Section 204 of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board ofDirectors of the Company had appointed
M/s Vijay K Singhal & Associates a firm of Company Secretaries in Practice (COPNo.: 10385) as Secretarial Auditors to undertake the Secretarial Audit of the Company forfinancial year 2015-16. The report of the Secretarial Auditor is enclosed herewith as"Annexure-C" to this report in prescribed Form MR-3. The report isself-explanatory and do not call for any further comments.
16. Adequacy of Internal Financial Controls
Company has in place adequate internal financial controls commensurate with the sizescale and complexity of its operations. The Company has policies and procedures in placefor ensuring proper and efficient conduct of its business the safeguarding of its assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information. TheCompany has adopted accounting policies which are in line with the Accounting Standardsand the Companies Act 2013.
Board of Directors of the Company has appointed M/s M.K. Saraogi & CompanyChartered Accountants to review the Internal Financial Controls over Financial Reporting.As per report given by Mr. Saraogi Internal Financial controls are adequate and operatingeffectively.
In the opinion of Statutory Auditors the Company has in all material respects anadequate internal financial controls system over financial reporting and such internalfinancial controls over financial reporting were operating effectively as at 31st March2016. Please refer to "Annexure B" of Independent Auditors Report fordetailed comments on Internal Financial Controls on Financial Reporting.
17. Audit Committee
Company has qualified and independent Audit Committee details of composition of whichare given under Corporate Governance Report attached with this report. CA MohindarMohan Khanna Independent Director is Chairperson of the Audit Committee. There is norecommendation by the Audit Committee which has not been accepted by the Board.
18. Vigil Mechanism
Company has established a Vigil Mechanism for Directors and Employees in accordancewith Sub-section (9) and (10) of Section 177 of the Companies Act 2013. Details of VigilMechanism are given in the Corporate Governance Report. The Vigil Mechanism has beenuploaded on the website of the Company.
19. Related Party Transactions
All the related party transactions entered during the year under review were on arm'slength basis and were in ordinary course of business. There are no materially significantrelated party transactions i.e. transactions exceeding 10% of the Annual Turnover as perlast Audited Financial Statement entered by the Company with promoters directors keymanagerial personnel or other designated persons which may have a potential conflict withthe interest of the Company at large. Accordingly the disclosures of related partytransactions as required under Section 134 (3) (h) of the Companies Act 2013 inprescribed Form AOC-2 is not applicable.
The Company has policy on materiality of related part transactions and also on dealingwith related party transactions as approved by the Board of Directors of the Company andthe said policy is also uploaded on the Company's website at the web link:
Omnibus approval of the Audit Committee and also the Board has already been obtainedfor the transactions which are of repetitive nature.
20. Particulars of loans guarantee or investments under section 186 of the CompaniesAct 2013 & rules made thereunder
Neither Loan nor guarantee nor investments had been made during the year under reviewby the Company which falls under the preview of Section 186 of the Companies Act 2013 andthe rules made thereunder.
21. Remuneration Policy
Your company has Nomination and Remuneration policy in place for selection appointmentand remuneration for the Directors Key managerial personnel and senior managementemployees of the Company. The Company's remuneration policy is driven by the success andperformance of the individual employee and the Company. During the year under review therehas been no change in the said policy of the Company as compare to last year.
22. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The statements contained in this section describing the Company's objectivesprojections estimates expectations may be considered to be 'forward looking statements'which the management believes are true to the best of its knowledge at the time ofpreparation within the meaning of applicable laws rules and regulations. Actual resultsmay differ materially from those expressed or implied. The Company assumes noresponsibility to amend modify or revise any forward looking statements on the basis ofany subsequent development information or events.
22.1 INDUSTRIAL STRUCTURE AND DEVELOPMENT OVERVIEW
There are indications with regard to increase in activities of infrastructure sectordue to government investments in roads across India. There are no activities in mines andalso no fresh capital investment by automobiles ancillary industry.
22.2 FUTURE PLANS & OUTLOOK
We do not foresee any growth in the first half of current financial year. We anticipateimprovement in the business in second half of due to normal monsoon and government policyfor infrastructure development.
Overall vehicle production has increased in almost all vehicle segments. Improvement inagricultural production is expected to increase in rural sector which may in turn increasein business of automobiles ancillary industry.
22.4 THREATS AND RISKS
Unutilized capacities are available with the automobiles ancillary industry which hasresulted in surplus inventories in the replacement market are instrumental in unhealthycompetition. Vehicle manufacturers are increasing their share of business in the market.
23. Corporate Governance Report and CEO & CFO Certification
A detailed Corporate Governance Report forms the part of this Directors Report and alsoattached with this Annual Report.
24. Risk Management Policy
Pursuant to the requirement of the Companies Act 2013 & rules made thereunder&(Listing Obligations and Disclosure Requirements) Regulations 2015 the Company hasa well-defined risk management policy. Your Company recognizes risk management as anintegral component of good corporate governance and fundamental in achieving its strategicand operational objectives. It improves decision-making defines opportunities andmitigates material events that may impact shareholder value.Your Company also takesadequate insurance to protect its assets.
25. Internal Control Systems
The Company has effective and adequate internal control systems covering all areas ofoperations. The Internal control system provides for well documented policies/guidelinesauthorizations and approval procedures. The Internal control system stipulates areasonable assurance with regard to maintaining of proper accounting controls protectingassets from unapproved use and compliance of statutes.
The Company has internal Audit to examine and evaluate the adequacy and effectivenessof Internal Control System. The Company through its own internal audit departmentcarries out periodic audits at various branches.
25.1 Internal Auditors
In addition the Company has appointed M/s D Sen Gupta & Associates CostAccountants for carrying out the internal audit. Internal audit ensures that the systemsdesigned and implemented provides adequate internal control commensurate with the sizeand operations of the company. The observations arising out of audit are periodicallyreviewed and compliances ensured.
25.2 Reporting of Internal Auditors
Internal Auditors are directly reporting to the Audit Committee. The summary of theInternal Audit observations and the status on implementation of corrective actions arereported to the Audit Committee for their review.
26. Corporate Social Responsibility Initiatives
An amount of INR 41.74 Lacs has been contributed under CSR which was within thestatutory requirement of @2% of the average net profit for the last three financial years.CSR initiatives taken were under the thrust areas of health & hygiene education andmission for neat and clean Country. Annual Report on the CSR activities undertaken by theCompany is enclosed herewith as "Annexure D" to this report.
27. Disclosure under the Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013
Company has in place an Anti-harassment policy in line with the requirements of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.An Internal Complaint Committee has been set up to receive & redress complaintsreceived. All employees (permanent contractual temporary trainees) are covered underthe policy.
27.1 Complaints under Anti-harassment policy
There was no complaint received from any employee during the financial year 2015-16 andhence no complaint is outstanding as at the end of the year for redressal.
28. Human Resources
At the end of March 2016 the total employee strength was 532. The Company's focus isto drive each employee to be more productive. Regular training programs at various levelsare in operation. Incentives are given wherever required to motivate staff to meetCompany's overall objectives.
29. Remuneration Disclosures
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act 2013 and Rule 5 of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 are enclosed herewith as "Annexure-E" tothis Report.
30. Orders passed by regulators / courts / tribunals
No orders have been passed by the regulators courts tribunals etc. against theCompany which adversely impact the financial position going concern status of theCompany and its future operations.
The Directors wish to convey their thanks to various Central and State Governmentdepartments Organizations and Agencies for the continued help and co-operation extendedby them.
The Directors would also like to thank the Shareholders Customers Bankers SuppliersManufactures' and all other stakeholders for their continuous support given by them to theCompany and their confidence in its management. The Directors place on record theirsincere appreciation to all employees of the Company for their unstinted commitment andcontinued contribution to the Company.
| ||For and on behalf of the Board of |
| ||Jullundur Motor Agency (Delhi) Limited |
| ||Sd/- |
| ||CA Subhash Chander Vasudeva |
|Place : Gurugram (Gurgaon) ||Chairman |
|Date : 3rd August 2016 ||(DIN: 00055588) |