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Jyoti Ltd.

BSE: 504076 Sector: Engineering
NSE: N.A. ISIN Code: INE511D01012
BSE 00:00 | 13 Dec 16.85 0.80
(4.98%)
OPEN

16.25

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17.00

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16.00

NSE 05:30 | 01 Jan Jyoti Ltd
OPEN 16.25
PREVIOUS CLOSE 16.05
VOLUME 2664
52-Week high 71.85
52-Week low 16.00
P/E
Mkt Cap.(Rs cr) 39
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 16.25
CLOSE 16.05
VOLUME 2664
52-Week high 71.85
52-Week low 16.00
P/E
Mkt Cap.(Rs cr) 39
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Jyoti Ltd. (JYOTI) - Director Report

Company director report

To

The Members of Jyoti Limited

Your Directors present this 74th (SEVENTY FOURTH) ANNUAL REPORT and AuditedAccounts for the year ended on 31st March 2018.

FINANCIAL RESULTS

Particulars 2017-18 2016-17
Standalone Consolidated Standalone Consolidated
Revenue from Operations 26019.90 26019.90 26921.09 26921.09
Operating EBITDA 1646.78 1646.78 2011.02 2011.02
Add : Other Income 365.43 365.43 356.84 356.84
Profit/(Loss) before Finance 2012.21 2012.21 2367.86 2367.86
Cost & Depreciation
Less : Finance Costs 169.76 169.76 7357.08 7357.08
Less : Depreciation and Amortization 1013.73 1013.73 1069.32 1069.32
Less: Exceptional Item 810.00 810.00 6360.97 6360.97
Share of Profit/(Loss) of a joint venture - 260.20 - 592.26
Profit/(Loss) before Taxation 18.72 278.92 (12419.51) (11827.25)
Less : Tax Expense (82.75) (82.75) (30.78) (30.78)
Balance of Profit/(Loss) for the year 101.47 361.67 (12388.73) (11796.47)
Other Comprehensive
Income/ (Expense) 92.51 92.51 (34.52) (34.52)
Total Comprehensive Income for the period 193.98 454.18 (12423.25) (11830.99)

PERFORMANCE

1. Revenue from operations of your Company was Rs. 26020 lakhs for the year ended on 31stMarch 2018 as compared to Rs. 26921 lakhs of the previous year.

2. The cost of material consumed at 73% of sales value at Rs. 18885 lakhs as comparedto 72% of sales value at Rs. 19409 lakhs during the previous year.

3. The Employee benefits expenses stood at Rs. 3136 lakhs as compared to Rs. 3107 lakhsduring the previous year.

4. Other Expenses for the year were comparable at Rs. 2353 lakhs against Rs. 2393 lakhsduring the previous year.

5. The operating EBITDA was Rs. 1647 lakhs compared to Rs. 2011 lakhs during theprevious year.

6. The other income was Rs. 365 lakhs during the year was comparable with Rs. 357 lakhsduring the previous year.

7. The Finance Cost during the year was Rs. 170 lakhs as compared to Rs. 7357 lakhsduring the previous year. The lenders of the Company have not charged interest onoutstanding bank facilities since the dues from the Company were categorized as aNon-Performing Asset with all banks from December 2015 onwards. The Company has also notprovided interest amounting to Rs. 8667 lakhs for the year ended on 31st March2018. However the said interest has been recognized as a Contingent Liability in thefinancial statements.

8. After detailed assessment of capital advances capital work in progress and othersyour Company has considered charge to the statement of Profit & Loss amounting to Rs.810 lakhs as an Exceptional Item.

9. Consequently the total profit before tax for the year was Rs. 19 lakhs as comparedto total loss of

Rs. 12420 lakhs during the previous year and after giving effect to tax expense theProfit for the year stood at Rs. 101 lakhs compared to loss of Rs. 12389 lakhs during theprevious year.

10. The total Comprehensive income for the year was at Rs. 194 lakhs compared to Rs.(12423) lakhs during the previous year after considering actuarial gain/loss on employeebenefits.

CURRENT OUTLOOK

The Lenders of the Company have under Section 13 (2) of the Securitization andReconstruction of Financial Assets and Enforcement of Security Interest Act 2002("SARFAESI Act") given notices to your Company in the year 2016. However yourCompany is of the view that considering ongoing operations with improved businessprospects and recovery of old outstanding through cut back mechanism no further action isexpected in the matter. Your Company has shown good performance in operations during theyear under review with continues to execute orders in hand and obtain new orders despiteadversities. Your Directors are very positive about the Company's viability and optimisticabout its future.

RARE Asset Reconstruction Pvt. Ltd. (Rare ARC) vide its letter dated 2nd April2018 communicated to the Company that it has acquired the entire debt together with allsecurity interest including all its rights title interest and benefits of Dena Bankpursuant to the assignment agreement dated 28th March 2018. In turn Dena Bankhas squared off all loans and cash credit account.

Further Rare ARC pursuant to Section 9 (1) (g) of the Securitisation andReconstruction of Financial Assets and Enforcement of Security Interest Act 2002 hasconverted part of the outstanding debt amounting to Rs. 32.80 crores into equity shares.Consequent upon this decision of Rare ARC the Board of Directors of the Company in itsmeeting held on 2nd May 2018 issued and allotted 5963636 equity shares ofRs. 10/- each of the Company at a premium of Rs. 45/- per equity share to Rare ARC.

CONSOLIDATED FINANCIAL STATEMENTS

Your Company has a Joint Venture (JV) Company Jyoti Sohar Switchgear LLC with OmarZawawi Establishment Sultanate of Oman wherein your Company holds 49% share.

Your Company has prepared Consolidated Financial Statements in accordance with Ind AS28 –Investments in Associates and Ind AS 111 – Joint Arrangements issued by theInstitute of Chartered Accountants of India prescribed under Section 133 of the CompaniesAct 2013 read with Rule 7 of the Companies (Accounts) Rules 2015. The AuditedConsolidated Financial Statements together with the Independent Auditor's Report thereonare annexed and form part of this Annual Report. Jyoti Sohar Switchgear LLC is located inSohar Industrial Estate Sohar Sultanate of Oman and manufactures medium voltagemetal-clad switchgear for 12kV system and relay and control panels. In consolidation ofstatements the Company's share of profit of Rs. 260.20 lakhs is included in theConsolidated Financial Statements.

SHARE APPLICATION MONEY

In Compliance with terms and conditions of letter of approval dated 28th September2013 received from CDR Cell Promoters have brought necessary contribution amounting toRs. 1980.00 Lakhs by way of Share Application Money. As there was no possibility ofconverting Share Application Money into Equity Shares the Board of Directors in itsMeeting held on 14th March 2018 decided to refund the Share Application Moneyto the Promoter Group Entities.

DIVISIONAL PERFORMANCE

A. HEAD OFFICE (H.O.) OPERATIONS

During the year under review the divisions in H.O. have achieved a sales turnover ofRs. 220.48 Crores which is slightly more than the turn over achieved in the previousfinancial year. Inspite of difficult situation the H.O. operations could hold on to theprevious year's performance. The Company continues its leadership in large Metallic VolutePumps and remains a major player even today in the irrigation sector. During the yearunder review the Company has received two major orders for Metallic Volute Pumps. Thisincludes supply of 3 Nos. Metallic Volute Pumps with Motors and other Electro Mechanicalequipments including switchyard and transmission line for Veerabhadreshwar Lift IrrigationScheme in the State of Karnataka where the Company is in tie up with DRN Infrastructure.The Company also received an order for 2 Nos. Metallic Volute Pumps from Megha Engineering& Infrastructures Limited for Ramappa Pakhala Lift Irrigation Scheme in the State ofTelangana. Megha Engineering & Infrastructures Limited has further placed orders onthe Company for 6 Nos. large Vertical Turbine Pumps each of 1.95 MW for the Phase-IIProject of Sauni Yojana in the state of Gujarat after successful commissioning of SauniYojana Phase-I. The Company is also associated with Megha Engineering &Infrastructures Limited in their Power Project at Tuticorin for which the Company hasreceived order for Sea Water Pumps.

During the year the Company has supplied erected and commissioned 12 MW MetallicVolute Pumps at Tubchi Bableshwar Lift Irrigation Scheme in the State of Karnataka alongwith all Electro Mechanical Equipments. This project was commissioned by the Company in arecord time which also includes commissioning of 220 KV Switchyard and 31 kms. of 220 KVTransmission Line. This is the first project executed by the Company with 220 KVSwitchyard and Transmission Line thus adding credentials to its qualifications.

During the year the Company also erected and commissioned 6 Nos. of Metallic VolutePumps at Devadula Lift Irrigation Scheme Package-4 in the State of Telangana. With thisthe Company has till date commissioned 26 Nos. of Metallic Volute Pumps in the State ofTelangana and Karnataka and 34 Nos. of Metallic Volute Pumps are under various stages ofexecution. The Company has successfully completed supply of 9 Nos. Kaplan Turbines withGenerators each of 5 MW to Sardar Sarovar Narmada Nigam Limited during the year underreview. These turbines and generators now are under erection and commissioning willgenerate 45 MW of Hydro Power. The Company is in Joint Venture with Megha Engineering& Infrastructures Limited for this prestigious project.

During the year under review the Company has supplied 80 Nos. of Arno Convertors toIndian Railways and at the end of the year has pending order of 25 Nos. of Arno Convertorson hand. With the thrust by the various State Governments on Irrigation and Water Supplythe Company continues to have its focus on various upcoming tenders. The Company has thecomplete range of pumps required for Irrigation and Water Supply Projects and has theinfrastructure for executing the projects from concept to commissioning with addedexpertise during the year for 220 KV SubStation and Transmission Line.

The Company sees a good future with its active presence in Water Supply and Irrigation.

B. SWITCHGEAR OPERATIONS

During the year under review the Switchgear Division achieved sales of Rs. 3675 lakhs.The VCB production in terms of quantity is around 945 Nos. and HT Switchgear Panelsmanufactured are 820 Nos. The Switchgear Division has received orders worth Rs. 4550 lakhsin the year 2017-18.

In addition to above in the Financial Year 2017-18 the Division bagged various 11 kVVCB Panels orders from GETCO worth Rs. 760 lakhs for 250 Nos. Panels.

Many Power Infrastructure and smart city projects as well as Industrial Projects arecoming up in the next five years and hence there will be good potential of orders forMedium Voltage Switchgear and RMU Products.

For Medium Voltage Switchgear Products Switchgear Division is in the process ofre-certification of various products as a continuous product certification process in year2018-19. The Company is confident of achieving better performance in the years to come.

EXPORTS

During the year under review the Company's exports valued at Rs. 4.83 crores. TheCompany's major exports are to Sultanate of Oman for Switchgear.

DIVIDEND

In view of the marginal profit made by the Company during the period under review yourdirectors do not recommend any dividend for the financial year 2017-18.

TRANSFER TO RESERVES

During the year under review Company has made marginal profit and therefore Board hasnot proposed to transfer any amount to the reserves.

PUBLIC DEPOSITS

The Company has not accepted any deposits from the Public during the year under review.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

The Company has not given any loan or provided guarantees or made any investments asprescribed under Section 186 of the Companies Act 2013.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required by Section 134 of the Companies Act 2013 read with the Companies(Accounts) Rules 2014 the relevant data pertaining to conservation of energy technologyabsorption and foreign exchange earnings and outgo are given in Annexure A forming part ofthis Report.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS

As per Regulation 27(2) of the SEBI (LODR) Regulations 2015 Corporate GovernanceReport with Auditors' Certificate thereon and Management Discussion and Analysis are givenin Annexure B forming part of this Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

All the Independent Directors have given declaration to the Company stating theirindependence pursuant to Section 149 (6) of the Companies Act 2013 and there has been nochange in the circumstances which may affect their status as Independent Directors duringthe year.

During the year Mr. Marut Patel resigned as Director of the Company w.e.f. 5th February2018. Your Directors placed on record their appreciation for the services rendered by Mr.Marut Patel during his tenure as Director of the Company.

During the year Mr. Jayesh Verma resigned as the Chief Financial Officer of theCompany with effect from 30th June 2017.

The Directors at their Meeting held on 4th December 2017 have appointed Mr.Ronak Shah Chartered Account as the Chief Financial Officer of the Company with effectfrom 1st January 2018.

Mr. U V Desai retires by rotation and being eligible seeks re-appointment.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Companies Act 2013 the Board ofDirectors to the best of their knowledge and ability confirm and state 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 had 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 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 had prepared the annual accounts on a ‘going concern' basis;

v. The Directors had laid down Internal Financial Controls to be followed by theCompany and that such Internal Financial Controls are adequate and were operatingeffectively; and

vi. The Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

BOARD MEETINGS

The Board of Directors met 7 (Seven) times during the year. The details of the BoardMeetings and the attendance of the Directors are provided in the Corporate GovernanceReport which forms part of this Report.

AUDIT COMMITTEE

The details pertaining to composition of Audit Committee are included in the CorporateGovernance Report which forms part of this Report.

SUBSIDIARY COMPANIES / ASSOCIATE COMPANIES / JOINT VENTURE

The Company does not have any subsidiary.

The Company has a Joint Venture Company viz. Jyoti Sohar Switchgear LLC Sultanate ofOman and holds 49% of the total shareholding.

Pursuant to provisions of Section 129(3) of the Companies Act 2013 read with Companies(Accounts) Rules 2014 a statement containing salient features of the financialstatements of the Company's subsidiary in Form AOC-1 is attached to the financialstatements of the Company.

WHISTLE BLOWER & VIGIL MECHANISM

The Company has established a "Whistle Blower and Vigil Mechanism Policy" forDirectors Employees and Stakeholders to report the genuine concerns. The provisions ofthis policy are in line with the provisions of Section 177(9) of the Companies Act 2013and also as per the Regulation 22 read with Regulation 4(d) (iv) of Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015. Policy is available on the website of the Company at the web-linkhttp://www.jyoti.com/pdf/whistle_blower_and_vigil_mechanism_policy.pdf

NOMINATION AND REMUNERATION POLICY

A Nomination and Remuneration Policy has been formulated pursuant to the provisions ofSection 178 and other applicable provisions of the Companies Act 2013 and Rules theretostating therein the Company's policy on appointment and remuneration of Directors and KeyManagerial Personnel. The said Policy may be referred to at the Company's official websiteat the web-link http://www.jyoti.com/pdf/nomination_and_remuneration_policy_n_evaluation_criteria.pdf

RISK MANAGEMENT

The Risk Management Policy of the Company may be referred to at the Company's officialwebsite at the web-link http://www.jyoti.com/pdf/risk_management_policy.pdf The Companyhas in place a mechanism to identify assess monitor and mitigate various risks inachieving key objectives of the Company. The Company has developed and implemented Risk

Management Policy of the Company to identify evaluate business risks andopportunities. This framework seeks to create transparency minimize adverse impact on thebusiness objectives and enhance the Company's competitive advantage.

BOARD EVALUATION

The evaluation framework for assessing the performance of Board including theindividual directors is based on the following key measures:

- Attendance and participation in the Meetings and timely inputs on the minutes of themeetings

- Adherence to ethical standards & code of conduct of Company and disclosure of non–independence as and when it exists and disclosure of interest

- Raising of valid concerns to the Board and constructive contribution to resolution ofissues at meetings

- Interpersonal relations with other directors and management

- Objective evaluation of Board's performance rendering independent unbiased opinion

- Understanding of the Company and the external environment in which it operates andcontribution to strategic direction

- Safeguarding interest of whistle-blowers under vigil mechanism and safeguard ofconfidential information

The evaluation involves Self-Evaluation by the Board Member and subsequently assessmentby the Board of Directors. A member of the Board does not participate in the discussion ofhis / her evaluation.

EXTRACT OF THE ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT-9 are given inAnnexure C forming part of this Report.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company with the Promoters Directorsand Key Managerial Personnel etc. which may have potential conflict with interest of theCompany at large.

The Policy on Related Party Transactions of the Company is uploaded on the Company'swebsite at the web-linkhttp://www.jyoti.com/pdf/policy%20on_related_party_transactions.pdf The Audit Committeereviews all related party transactions quarterly.

The particulars of contracts or arrangements with related parties given in "FormAOC-2" are given in Annexure D forming part of this Report.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyappointed M/s. Ravi Kapoor & Associates Practicing Company Secretaries to undertakethe Secretarial Audit of the Company for the financial year 2017-18. The Secretarial AuditReport is appended as Annexure E forming part of this Report.

The Secretarial Audit Report for the year under review is self-explanatory and does notcontain any qualification or adverse remarks.

EXPLANATIONS / COMMENTS BY THE BOARD ON QUALIFICATIONS RESERVATION OR ADVERSE REMARKSOR DISCLAIMER MADE BY THE SECRETARIAL AUDITOR IN THEIR REPORT

The Secretarial Audit Report for the year under review does not contain anyqualification or adverse remarks.

INTERNAL FINANCIAL CONTROLS

As per provisions of Section 134(5) (e) of Companies Act 2013 the Directors have anoverall responsibility for ensuring that the Company has implemented robustsystems/framework of internal financial controls to provide them with reasonable assuranceregarding the adequacy and operating effectiveness of controls with regards to reportingoperational and compliance risks.

Your Company has adequate financial control system and framework in place to ensure:

1. The orderly and efficient conduct of its business including adherence to Company'spolicies;

2. Safeguarding of its assets;

3. The prevention and detection of frauds and errors;

4. The accuracy and completeness of the accounting records; and

5. The timely preparation of reliable financial information.

Significant observations including recommendations for improvement of the businessprocesses are reviewed by the Management before reporting to the Audit Committee. AuditCommittee reviews Internal Audit Reports as well as operating plans and status ofimplementation of the agreed action plans. This system of internal control facilitateseffective compliance of Section 138 of the Companies Act 2013 and the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015.

The Internal Auditor of the Company checks and verifies the internal control andmonitors them in accordance with the policy adopted by the Company. The Board of Directorsregularly review the effectiveness of controls and takes necessary corrective actionswhere weaknesses are identified as a result of such reviews. Based on this evaluationthere is nothing that has come to the attention of the Directors to indicate any materialbreak down in the functioning of these controls procedures or systems during the year.There have been no significant events during the year that have materially affected orare reasonably likely to materially affect our internal financial controls.

EQUAL OPPORTUNITY EMPLOYER

The Company has always provided a congenial atmosphere for work to all employees thatis free from discrimination and harassment including sexual harassment. It has providedequal opportunities of employment to all without regard to their caste religion colourmarital status and sex. The Company has also framed a Policy on "Prevention of SexualHarassment" at the workplace. There were no cases reported under the said Policyduring the year.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197(12) of the Companies Act 2013 (Act) readwith Rule 5 (2) and 5(3) of the Companies Act 2013 (Appointment and Remuneration ofManagerial Personnel) Rules 2014 there is no employee drawing remuneration in excess ofthe limits set out in the said Rules and other details as required under Section 197(12)of the Act read with Rule 5(1) and 5 (2) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 are given in Annexure F forming part of this Report.

STATUTORY AUDITORS

Pursuant to provision of Section 139 of the Companies Act read with the Companies(Audit & Auditors) Rules 2014 M/s. Amin Parikh & Co. Chartered AccountantsVadodara (holding Registration No. 100332W) were appointed as Statutory Auditors of theCompany to hold office from the conclusion of 73rd Annual General Meeting untilthe conclusion of 78th Annual General Meeting. The Auditor's Report for theyear under review is self-explanatory and does not contain any qualification or adverseremarks.

EXPLANATIONS / COMMENTS BY THE BOARD ON QUALIFICATIONS RESERVATION OR ADVERSE REMARKSOR DISCLAIMER MADE BY THE AUDITORS IN THEIR REPORT

The Auditor's Report for the year under review does not contain any qualification oradverse remarks.

COST AUDITORS

Based on the recommendation of the Audit Committee and subject to the ratification ofthe remuneration of the Cost Auditors by the Members of the Company the Board ofDirectors of your Company has appointed the following Cost Auditors for conducting theaudit of cost records of the Company for various products for the financial year 2018-19:

(i) M/s. R. K. Patel & Co. Cost Accountants – For Motors and Pumps

(ii) M/s. Y. S. Thakar & Co. Cost Accountants – For Engineering Products suchas Generator Turbine and Relay

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

RARE Asset Reconstruction Pvt. Ltd. (Rare ARC) vide its letter dated 2nd April 2018communicated to the Company that it has acquired the entire debt together with allsecurity interest including all its rights title interest and benefits of Dena Bankpursuant to the assignment agreement dated 28th March 2018. In turn Dena Bank hassquared off all loans and cash credit account.

Further Rare ARC pursuant to Section 9 (1) (g) of the Securitisation andReconstruction of Financial Assets and Enforcement of Security Interest Act 2002 hasconverted part of the outstanding debt amounting to Rs. 32.80 crores into equity shares.Consequent upon this decision of Rare ARC the Board of Directors of the Company in itsmeeting held on 2nd May 2018 issued and allotted 5963636 equity shares of Rs. 10 eachof the Company at a premium of Rs. 45 per equity share to Rare ARC.

SIGNIFICANT AND MATERIAL ORDERS / DEVELOPMENTS

Shri Lavjibhai Dungarbhai Daliya and M/s. Anjani Residency Private Limited (Acquirers)have intimated on 7th May 2018 that they have acquired 4306867 equity sharesconstituting 25.14% of the paid up capital against the Open Offer to acquire 12846744(75%) equity shares of the Company. The Acquirers further intimated that said computationdoes not include issue and allotment of 5963636 equity shares to Rare AssetReconstruction Private Limited on 2nd May 2018 by the Company.

ACKNOWLEDGEMENT

The Board of Directors take this opportunity to thank the Company's customers memberssuppliers bankers associates Central and State Governments and employees at all levelsfor their support and co-operation extended to the Company during the year.

On Behalf of the Board of Directors

Rahul N. Amin

Chairman & Managing Director

(DIN: 00167987)

Place: Vadodara

Date: 26th May 2018