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Jullundur Motor Agency (Delhi) Ltd.

BSE: 532420 Sector: Auto
NSE: JMA ISIN Code: INE412C01015
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Jullundur Motor Agency (Delhi) Ltd. (JMA) - Director Report

Company director report

To

The Members

Your Directors are pleased to present their Sixty-Ninth (69th) reportfor the Financial Year ended 31st March 2018.

1. Financial Highlights:

The Company's financial performance for the financial year ended 31stMarch 2018 is summarized below:

(Rs In Lacs)

Particulars

Standalone

Consolidated

2017-18

2016-17

2017-18

2016-17

Revenue from Operations

32156.70

37957.71

32716.76

38741.85

Other Income

443.65

372.50

422.49

353.09

Total Income

32600.35

38330.21

33139.25

39094.94

Total Expenses

30759.98

36320.98

31310.40

37079.79

Share of profit in Joint Venture

-

-

106.74

86.88

Profit before Tax (PBT)

1840.37

2009.23

1935.59

2102.03

Provision for Tax- Current

(620.00)

(699.09)

(631.20)

(716.30)

- Deferred

10.14

(2.93)

10.40

(3.64)

- Tax paid for earlier years

(31.50)

-

(31.30)

(0.28)

Profit after Tax

1199.01

1307.21

1283.49

1381.81

Other Comprehensive Income

(46.27)

(6.47)

(48.26)

(8.06)

Total comprehensive Income

1152.74

1300.74

1235.23

1373.75

Non-controlling interest*

-

-

(7.09)

(13.11)

Balance brought forward

354.93

341.29

385.85

364.65

Dividend including taxes thereon

-

(287.10)

-

(285.46)

General Reserve

(900.00)

(1000.00)

(953.98)

(1053.98)

Balance carried forward

607.67

354.93

660.01

385.85

* Non-controlling interest includes 0.20 lacs relating to transfer ofshares to NCI.

State of the Company's affairs

During the year under review revenues dropped by 15.28% approx. to Rs32156.70 Lacs in comparison to Rs 37957.71 Lacs. Profit before tax decreased by 8.40% toRs 1840.37 Lacs in comparison to Rs 2009.23 Lacs. This occurred due to the turbulence inthe market on account of introduction of Goods and Services Tax Act 2017 w.e.f. 01stJuly 2017. Profit after tax also decreased by 8.28% approx. to Rs 1199.01 Lacs incomparison to Rs 1307.21 Lacs in previous financial year. Earnings per share for the yearstood at Rs 20.11 as compared to Rs 21.92 in the preceding financial year.

Consolidated turnover stood at Rs 32716.76 Lacs as compared to Rs38741.85 Lacs in the preceding financial year i.e. decrease of 15.55% and Consolidatedprofit after tax has also decreased by 7.11% and stood at Rs 1283.49 Lacs as compared toRs 1381.81 Lacs.

2.1 Material changes and commitments affecting the financial positionbetween end of the financial year and at the date of this report

There are no material changes and commitments affecting the financialposition of the Company which have occurred between the end of the Financial Year 2017-18and the date of this Report.

2.2 Change in nature of the Business

There has been no change in the nature of the business of the Company.Your Company is engaged in the business of distribution of auto spare parts across India.

2.3 Capital Expenditure incurred during the year and its impact on theliquidity of the Company

No capital expenditure having any impact on the liquidity of theCompany has been incurred during the Financial Year 2017-18.

3. Adoption of new accounting policies as per IND AS

During the year under review your Company has adopted new accountingpolicies so as to align the same with Indian Accounting Standards ("IND AS")which are applicable to the Company with effect from the Financial Year 2017-18 inaccordance with the Notification No. G.S.R. 111(E) dated 16th February 2015 issued byMinistry of Corporate Affairs read with Circular No. CIR/CFD/FAC/62/2016 dated 5th July2016 issued by Securities and Exchange Board of India.

4. Consolidated Accounts

Consolidated Financial Statements are prepared in accordance with theprovisions of the Companies Act 2013 read with IND AS 110 - Consolidated FinancialStatementsIND AS 28 - Investment in Associates and IND AS 31 - Interest in Joint Venture.Consolidated Financial Statements for the Financial Year 2017-18 forms part of this AnnualReport.

A statement in Form AOC-1 containing the salient features of thefinancial statements of associates and the joint venture company is annexed (Annexure -1). Consolidated financial statements have been prepared on the basis of auditedannual financial statements of your Company associate companies and its joint venturecompany.

5. Dividend

The Board of Directors has recommended for the financial year 2017-18a dividend of INR 04/- (40 percent per equity -share) per equity share of INR 10/- each onthe paid up equity share capital of INR 59636100/- Lacs amounting to INR 287.58 Lacs(inclusive of Dividend Distribution Tax of INR 49.03 Lacs). The dividend payment issubject to approval of the members at ensuing Annual General Meeting.

5.1 Transfer of unclaimed dividend into Investor Education &Protection Fund (IEPF)

In accordance with the provisions of Section 124 of the Companies Act2013 unclaimed dividend for the Financial Year 2010-11 aggregating to INR 694926/-lying with the Company for a period of seven years was transferred during the FinancialYear 2017-18 to the Investor Education and Protection Fund established by the CentralGovernment.

5.2 Uncashed / Unclaimed Dividend(s)

The details of uncashed / unclaimed dividends commencing with theFinancial Year 2011-12 are as under:

Financial Year Type of Dividend

Dividend Per Share

Date of Payment

Due Date for Transfer

2011-12 Interim

INR 6/-

28.02.2012

02.04.2019

2012-13 Interim

INR 6/-

28.02.2013

01.04.2020

2013-14 Interim

INR 4/-

28.02.2014

01.04.2021

2014-15 Interim

INR 4/-

05.02.2015

26.02.2022

2015-16 Interim

INR 4/-

29.02.2016

18.03.2023

2016-17 Interim

INR 4/-

28.02.2017

15.03.2024

Shareholders who have not encashed the dividends are requested to do soor approach the Company before these are statutorily transferred to IEPF.

5.3 List of shareholders who have not claimed dividend(s)

List of shareholders who have not claimed their dividends (Interim /Final) is uploaded on website of the Company i.e. www.jmaindia.com.

5.4 SEBI has vide its circular dated April 20 2018 mandated thetransfer of unpaid dividend directly to the Bank Account of Shareholders. Shareholders aretherefore advised to register / update their bank details with the Company's Registrar andShare Transfer Agent.

5.5 Transfer of shares to Investor Education and Protection FundSuspense Account

Pursuant to Investor Education and Protection Fund Authority(Accounting Audit Transfer and Refund) Rules 2016 the Company has transferred allshares in respect of which dividend(s) has / have not been paid / claimed by theshareholders for seven consecutive years or more in the name of Investor Education andProtection Fund Suspense Account ("IEPF Suspense Account"). The details ofequity shares transferred into IEPF Suspense Account during the financial year are givenhereunder:

No. of shares transferred into IEPF Suspense Account

Date of Transfer

1

57511

29th December 2017

2

6199

27th April 2018

Details of shares which had been transferred into IEPF Suspense Accountcan be downloaded from website of IEPF www.iepf.gov.in or under the linkhttp://jmaindia.com/download/List-Of-Shareholders-Whose-Shares-Are-Transferred-Into-IEPF-For-The-FY-2010-11.pdf.Alternatively shareholders may check the record from the website of Investor Educationand Protection Fund Authority i.e. www.iepf.gov.in.

5.6 Shareholders who have not claimed / encashed dividends for thepast seven consecutive years are advised to claim their dividend(s) before these arestatutorily transferred into IEPF Suspense Account.

6. Transfer to Reserves

An amount of Rs 900 Lacs generated out of profits of the Company hadbeen transferred to General Reserve Account during this Financial Year and an amount of Rs607.67 Lacs is proposed to be carried forward as retained earnings.

7. Subsidiary Joint Ventures Associate Companies

There was no subsidiary of your Company during the Financial Yearwhile the details of joint venture and associate companies are given hereunder: a) JMARane Marketing Limited (CIN : U51909DL1991PLC042645) - Joint Venture ; b) Jullundur AutoSales Corporation Limited (CIN : U34101DL1959PLC003066) - Associate; c) ACL ComponentsLimited (CIN : U32204HR1985PLC049478) - Associate Above associates & joint venturecompany are involved in the business of distribution of auto spare parts in differentregions of India.

8. Public Deposits

During the Financial Year ended 31st March 2018 the Company has notaccepted any deposit falling within the ambit of Section 73 of the Companies Act 2013 andthe Companies (Acceptance of Deposit) Rules 2014.

9. Conservation of energy technology absorption and foreignexchange earnings and outgo

Companies (Disclosure of particulars in the report of Board ofDirectors) Rules 1988 are not applicable to the Company during the period under review.There was no inflow and outflow during the financial year 2017-18. There was no inflowduring the Financial Year 2016-17. However Foreign Exchange outflow was Rs 791954 inFinancial Year 2016-17.

10. Changes in Share Capital

Authorized Share Capital is Rs 100000000/- (Rs Ten Crores only)divided into 10000000 equity share of Rs 10/- each. Paid-up share capital of theCompany is Rs 59636100/- (Rs Five Crores Ninety Six Lakh Thirty Six Thousand and OneHundred Only). There has been no change in Share Capital of the Company as compared to theprevious financial year.

11. Extract of Annual Report

Form MGT-9 providing an extract of the Annual Return as prescribedunder Section 92 of the Companies Act 2013 and read with Rule 12 (1) of the Companies(Management and Administration) Rules 2014 is annexed (Annexure - 2) of thisAnnual Report.

12. Directors and Key Managerial Personnel 12.1 Directors retiring byrotation

In accordance with Section 152 of the Companies Act 2013 and Articlesof Association of the Company Shri Ranjit Puri (DIN:00052459) and Shri Sanjeev Kumar(DIN: 00094725) Directors of the Company retire by rotation at the ensuing AnnualGeneral Meeting and being eligible offer themselves for re-appointment.

12.2 Appointment and resignation of the directors

There was no appointment and / or resignation of any director duringthe Financial Year under review.

12.3 Confirmation of appointment / re-appointments

Pursuant to the notification of Securities and Exchange Board of Indiabearing No SEBI/LAD-NRO/GN/2018/10 dated 09th May 2018 approval of shareholders by wayof special resolution is required for continuation of appointment w.e.f. 01st April 2019for those non-executive directors who have attained the age of 75 years. Shri SubhashChander Vasudeva Shri Mohindar Mohan Khanna Shri Avinash Chander Anand Shri Ranjit Puriand Shri Sarvjit Sondhi all Non-Executive directors have already attained the age of 75years and require approval of shareholders by way of passing special resolution tocontinue their respective appointments.

Shri Sanjay Saigal was appointed as Independent Director for a periodof 5 consecutive years starting from 28th May 2014 and his term as Independent Directorwill expire in the month of May 2019. He may be re-appointed for a further term of 5consecutive years subject to the approval of shareholders by way of passing specialresolution in this regard. Accordingly your directors recommend the re-appointment ofretiring directors and confirmation of continuation of Non-executive directors each ofwhom has attained the age of 75 years. Detailed profiles of re-appointee directors aregiven to the Note 16 to notes in the notice of Annual General Meeting.

12.4 Key Managerial Personnel

Shri Virat Sondhi Managing Director Shri Deepak Arora Joint ManagingDirector CA Narinder Pal Singh Chief Financial Officer and CS Sachin Saluja CompanySecretary are the Key Managerial Personnel of the Company in accordance with theprovisions of Section 2(51) and 203 of the Companies Act 2013 read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014.

13 Declaration by Independent Director(s)

All Independent Directors have furnished declarations that they meetthe criteria of Independence as laid down under section 149(6) of the Companies Act 2013read with the Companies (Appointment and Qualification of Directors) Rules 2014 and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.

14 Board Meetings

14.1 Number of Board Meetings

Your Board met 05 (Five) times during the Financial Year 2017-18details of which along with attendance of the directors in such meetings are provided inthe Corporate Governance Report.

14.2 Annual Evaluation

Pursuant to the provisions of the Companies Act 2013 & rules madethereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the Board has carried out its own annual performance evaluation and also of thedirectors individually as well as that working of the Committees. The manner in which theevaluation has been carried out has been explained in the Corporate Governance Report.

14.3 Separate meeting of Independent Directors

In addition to the Board Meetings a separate meeting of IndependentDirectors was held on 29th December 2017 for the year 2017-18 to consider: a) Performanceof Non-independent directors and the Board as a whole; b) Performance of the chairman ofthe Company taking into account of the views of Executive Directors and Non-executivedirectors; and c) Assess the quality quantity and timeliness of flow of informationbetween the Company Management and the Board that is necessary for the Board toeffectively and reasonably perform their duties.

15 Directors Responsibility Statement

In terms of Section 134(3) (c) of the Companies Act 2013 the Board ofDirectors to the best of their knowledge and ability confirm that: a) in the preparationof the annual financial statements for the year ended 31st March 2018 all the applicableaccounting standards have been followed along with proper explanation relating to materialdepartures if any; b) 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; c) they have taken properand sufficient care for the maintenance of adequate accounting records in accordance withthe provisions of the Companies Act 2013 for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities; d) they have prepared theannual accounts on a going concern basis; e) they have laid down internal financialcontrols to be followed by the Company and that such internal financial controls areadequate and were operating effectively; and f) they have devised proper systems to ensurecompliance with the provisions of all applicable laws and that such systems were adequateand operating effectively.

16 Auditors

16.1 Statutory Auditors

M/s Aiyar & Co. Chartered Accountants (Firm Regn No. 001174N) NewDelhi-110001 were appointed as Statutory Auditors of the Company for a period of fiveyears in the 68th Annual General Meeting to hold office till the conclusion of 73rdAnnual General Meeting.

Statutory Auditors have confirmed their eligibility as required underSection 139 141 or any other Section if applicable of the Companies Act 2013 and therules made thereunder to continue and hold office as auditors.

16.2 Report of Auditors

The Auditor's Report for the Financial Year ended 31st March 2018 doesnot contain any qualification reservation or adverse remark or disclaimer on thefinancial statements of the Company. Their report is self-explanatory and hence does notcall for any comment as required under Section 134 of the Companies Act 2013.

16.3 Fraud Reporting

Statutory Auditors have not reported any incident of fraud to AuditCommittee of the Company.

16.4 Report on Internal Financial Controls on Financial Reporting

In the opinion of Statutory Auditors the Company has in all materialrespects an adequate internal financial controls system over financial reporting and suchinternal financial control systems over financial reporting were operating effectively asat 31st March 2018. Reference may be made to "Annexure - B" ofIndependent Auditors Report.

17. Secretarial Auditors and their report

M/s Vijay K. Singhal & Associates Company Secretaries wereappointed as Secretarial Auditors to conduct secretarial audit for the Financial Year2017-18. The secretarial audit report is annexed (Annexure-3) and forms part ofthis Boards' Report. Their report does not contain any qualification reservation oradverse remark.

18. Adequacy of Internal Financial Controls

The Company has in place adequate internal financial controlscommensurate with the size scale and complexity of its operations. The Company haspolicies and procedures in place for ensuring proper and efficient conduct of itsbusiness the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timely preparationof reliable financial information. The Company has adopted accounting policies which arein line with the IND AS and the Companies Act 2013.

An extensive risk based programme of internal audits and managementreviews provides assurance to the Board regarding the adequacy and efficacy of internalcontrols. The internal audit plan is also aligned to the business objectives of theCompany. M/s D Sengupta & Associates Cost Accountants Internal Auditors inaddition looked after the Internal Financial Controls over Financial Reporting andreported to the Board that Internal Financial Controls are adequate and operatingeffectively.

19. Cost Audit

Since the Company is engaged into the business of distribution of autospare parts i.e. trading business maintenance of cost records as specified by the CentralGovernment under Section 148 of the Companies Act 2013 and rules made thereunder are notapplicable.

20. Audit Committee

In accordance with the provisions of Section 177 of the Companies Act2013 read with Regulation 18 of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Rules 2015 your Company has a qualified andindependent Audit Committee details of composition of which are given in CorporateGovernance Report. CA Mohindar Mohan Khanna Independent Director is a Chairman of theAudit Committee. All recommendations of the Audit Committee were accepted by the Board ofDirectors of the Company.

21. Vigil Mechanism

In accordance with Section 177 (10) of the Companies Act 2013 andRegulation 22 of the Securities and Exchange Board of India (Listing Obligations andDisclosures Requirement) Rules 2015 your Company has approved and adopted the WhistleBlower - cum - Vigil Mechanism Policy for the Directors and the Employees. Details ofaforesaid policy are given in the Corporate Governance Report. Such policy has also beenuploaded on the website of the Company i.e. www.jmaindia.com.

22. Related Party Transactions

All contracts / arrangements / transactions entered by the Company withrelated parties were in ordinary course of the business and at arm's length basis. Duringthe year under review the Company had not entered into any contract/ arrangement /transactions with related parties which qualify as material in accordance with the policyof the Company on materiality of related party transactions.

All transactions with related parties were reviewed and approved by theAudit Committee and the Board and are in accordance with the policy on related partytransactions formulated by the Company. Said policy is also uploaded on the Company'swebsite videlink:http://jmaindia.com/download/Policy%20on%20Materiality%20of%20Related%20PartyTransaction(s).pdf Omnibus approval of the Audit Committee and also of the Board hasalso been obtained for the transactions which are of repetitive nature / ongoingtransactions.

There are no material significant related party transactions that mayhave potential conflict of interest with interest of the Company at large. The details ofrelated party transactions as per IND AS - 24 are set out in the notes of accounts of theStandalone Financial Statements of the Company.

Form AOC-2 as required under Section 134 (3) (h) of the Companies Act2013 containing the details of related party transactions is annexed (Annexure-4).

23. Particulars of loans guarantee or investments under Section 186 ofthe Companies Act 2013 & rules made thereunder

The company has not given any loans or guarantees. Investments in otherbody corporates made during the year under review were within the ambit of Section 186 ofthe Companies Act 2013 and rules made thereunder.

24. Nomination and Remuneration Policy

Your company has Nomination and Remuneration policy in place forselection appointment and remuneration of the directors key managerial personnel andsenior management employees of the Company. The Company's remuneration policy is driven bythe success and performance of the individual employee and growth of the Company. Duringthe year under review there has been no change in the said policy of the Company ascompared to preceding year.Remuneration Policy of the Company is uploaded on the Company'swebsite vide link: http://jmaindia.com/download/Nomination-and-Remuneration-Policy.pdf.

25. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report is annexed (Annexure-5).

26. Corporate Governance Report and CEO & CFO Certification

A detailed Corporate Governance Report forms part of this Board'sReport and is attached with this Annual Report.

27. Risk Management Framework

Pursuant to the requirement of the Companies Act 2013 & rules madethereunder & (Listing Obligations and Disclosure Requirements) Regulations 2015 theCompany has a well-defined risk management policy. Your Company recognizes risk managementas an integral component of good corporate governance and fundamental in achieving itsstrategic and operational objectives. It improves decision-making defines opportunitiesand mitigates material events that may impact shareholder value.Your Company also takesadequate insurance to protect its assets.

28. Internal Control Systems

The Company has effective and adequate internal control systemscovering all areas of operations. The Internal control system provides for well documentedpolicies/guidelines authorizations and approval procedures. The Internal control systemprovides a reasonable assurance with regard to maintaining of proper accounting controlsprotecting assets from un-authorized use and compliance of statutes.

Such internal control system is also reviewed for its adequacy andeffectiveness through internal audit carried out at various locations.

29. Internal Auditors and reporting

Your Company has appointed M/s D Sengupta & Associates CostAccountants to conduct the internal audit for the Financial Year 2017-18. Internal auditensures that the systems designed and implemented provide reasonable assurances to theadequacy of the internal controls commensurate with the size and operations of theCompany. The observations arising out of audit are periodically reviewed and compliancesensured.

Internal Auditors are directly reporting to the Audit Committee. Thesummary of the Internal Audit observations and the status on implementation of correctiveactions are reported to the Audit Committee for their review.

30. Corporate Social Responsibility Initiatives

During the Financial Year ended 31st March 2018 the Company hasincurred CSR expenditure of Rs 40.11 Lacs. CSR initiatives taken were under the thrustareas of health & hygiene education and mission for neat and clean Country. AnnualReport on the CSR activities undertaken by the Company is annexed (Annexure - 6) tothis report.

31. Disclosure under the Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013

The Company's policy on prevention of sexual harassment at work placeis in line with the requirements of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and Rules framed thereunder. Pursuant tothe provisions of Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 and Rules framed thereunder an Internal Complaint Committee has beenset up to receive & redress the complaints regarding sexual harassment under theaforesaid Act. All employees (permanent contractual temporary trainees) are coveredunder the policy.

There was no complaint received from any employee during the FinancialYear 2017-18 and hence no complaint is outstanding as at the end of the year forredressal.

32. Prevention of Insider Trading

The Board of Directors have formulated "JMA Code to regulatemonitor and report trading by insiders and practices and procedures for fair disclosure ofunpublished price sensitive information" in accordance with SEBI (Prohibition ofInsider Trading) Regulations 2015 to prevent misuse of any unpublished price sensitiveinformation and prohibit insider trading activity. The code of fair disclosure practicesand procedures for unpublished price sensitive information is available athttp://jmaindia.com/download/Code%20of%20Practice%20and%20Procedure%20for%20Fair%20Disclosure%20of%20UPSI.pdf

33. Human Resources

At the end of March 2018 the total employee strength was 535. TheCompany's focus is to drive each employee to be more focused and productive. Regulartraining programs at various levels are in operation. Incentives are given whereverrequired to motivate staff to meet Company's overall objectives.

34. Remuneration Disclosures

Disclosures pertaining to remuneration and other details as requiredunder Section 197 (12) of the Companies Act 2013 and Rule 5 of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 are annexed (Annexure-7) tothis Report.

35. Orders passed by regulators / courts / tribunals

No orders have been passed by the regulators courts tribunals etc.against the Company which adversely impact the financial position going concern statusof the Company and its future operations.

Acknowledgment

The Directors wish to convey their thanks to various Central and StateGovernment departments Organizations and Agencies for the continued help and co-operationextended by them.

The Directors would also like to thank the Shareholders CustomersBankers Suppliers Manufactures and all other stakeholders for their continuous supportgiven by them to the Company and their confidence in its management. The Directors placeon record their sincere appreciation to all employees of the Company for their unstintedcommitment and continued contribution to the Company.

For and on behalf of the Board of Jullundur Motor Agency (Delhi)Limited

Sd/-Subhash Chander Vasudeva

Chairman (DIN: 00055588)

Place: Gurugram (Gurgaon)

Date: 08th August 2018