Jainex Aamcol Ltd Directors Report.
Your Directors have pleasure in presenting the 71st Annual Report on the affairs of the Company together with the Audited Statement of Accounts of Jainex Aamcol Limited (the "Company"), for the financial year ended 31st March, 2019. A summary of the financial results is given below:-
1. FINANCIAL PERFORMANCE
The financial performance of the company for the Financial Year 2018-19 in comparison to the previous financial year 2017-18 are summarized below:
|(Amount in Rs)|
|Earnings before interest, tax, depreciation, exceptional items and amortization (EBITDA)||2,80,99,060||2,24,11,771|
|Profit/(Loss) before Extra- ordinary items & Taxes||86,79,658||18,69,383|
|Profit/(Loss) before Taxes||86,79,658||18,69,383|
|Profit/(Loss) after tax||61,03,113||(3,00,509)|
2. STATE OF COMPANYS AFFAIRS
During the year under review, there was increase in the turnover of the company as compared with the previous year i.e. from Rs. 15,76,20,911/- to Rs. 17,53,59,285/-. The Company has reported Net Profit of Rs. 61,03,113/- against Net Loss of Rs. 3,00,509/- in the previous year.
3. TRANSFER TO RESERVES
The Company has earned profit during the financial year 2018-19, but the Board of Directors of your Company, has decided not to transfer any amount to the Reserves for the year under review.
To conserve the funds for future business growth, your Directors have not recommended any dividend on equity shares in respect of the financial year 2018-19.
5. SHARE CAPITAL
The Paid up Share capital as on 31st March, 2019 was Rs. 1,49,93,940/- During the year under review, the Company has not issued any shares with differential rights as to dividend, voting or otherwise or convertible debentures.
6. SUBSIDIARY COMPANIES, JOINT VENTURES AND ASSOCIATE COMPANIES
During the year under review, your Company has no Subsidiary/ Associate/ Joint Venture Companies.
7. PUBLIC DEPOSITS
Your Company has not been accepting any deposits from the public and hence there are neither unpaid/unclaimed deposits nor any default in repayment thereof.
8. BOARD MEETINGS
During the year under review, 4 (Four) Board Meetings were held on 18th May, 2018, 14th August, 2018, 14th November, 2018 and 14th February, 2019.
9. COMMITTEES OF THE BOARD OF DIRECTORS
During the year under review, all recommendations made by the Audit Committee/Nomination & Remuneration Committee were accepted by the Board. There were no instances where the Board has not accepted any recommendation of the Audit Committee.
10. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY
No material changes and commitments affecting the Financial Position of the Company have occurred between the end of the Financial year of the Company to which the Financial Statement relate and the date of this report.
11. EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of Section 134 (3) (a) of the Companies Act, 2013, Extract of the Annual Return for the financial year ended 31st March, 2019 made under the provisions of Section 92 (3) of the Act in Form MGT-9 is annexed herewith as "Annexure A".
12. PARTICULARS OF LOANS GRANTED, GUARANTEE PROVIDED AND INVESTMENTS MADE PURSUANT TO THE PROVISIONS OF SECTION 186 OF THE COMPANIES ACT, 2013
During the year under review the company did not provide any loans, guarantees or investments as per the provisions of Section 186 of the Companies Act, 2013.
13. LOAN FROM DIRECTORS
Particulars of loan from Directors of the Company are provided in Note No. 31- Sub Note No. 10(c) to the financial statements. Refer.
14. PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, EXPENDITURE ON RESEARCH AND DEVELOPMENT & FOREIGN EXCHANGE EARNINGS AND OUTGO
Considering the nature of activities in which the Company operates, energy consumption is in accordance to the normal business practices and does not require any specific installations. In its regular course of business, the Company is always vigilant to conserve the resources and continuously implements measures required to save energy. The Company has adopted new technologies and corrective measures to cope up with the current market situations. In the course of its operations, processes are formed and implemented to achieve operational efficiencies which provide maintaining product quality and cost control. The Company had Foreign Exchange earnings/outgo during the year under review.
The Foreign Exchange earned in terms of actual inflows during the financial year 2018-19 is Rs 315.90 Lakhs
The Foreign Exchange outgo in terms of actual inflows during the financial year 2018-19 is Rs 64.20 Lakhs
The details of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo pursuant to provisions of Section 134 of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are attached as Rs.Annexure B which forms part of this report.
15. DIRECTORS AND KEY MANAGERIAL PERSONNEL
1. In terms of the provisions of the Companies Act, 2013, Mr. Rahul Dugar retires from the Board of Directors of the Company by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment. The Board recommends his re-appointment.
2. Mr. Mohanlal Zumbarlal Kothari was re-appointed as the Managing Director of the Company for a period of three years i.e. from 01st April, 2019 to 31st March, 2022 on the terms & conditions and at a remuneration plus benefits and perquisites as approved by the Board of Directors in its meeting held on 01st April, 2019 subject to approval of the members of the company in the ensuing Annual General Meeting.
3. The Company has received individual declaration from all the Independent Director(s) of the Company under section 149(7) of the Companies Act, 2013 in respect of meeting the criteria of independence provided under section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
None of the Directors are disqualified for re-appointment under Section 164 of the Companies Act, 2013.
16. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirements of Section 134(5) of the Companies Act, 2013, Directors of your Company hereby state and confirm that:-
a) in the preparation of the annual accounts for the financial year ended 31st March, 2019, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
b) that they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at 31st March, 2019 and of the profit and loss of the Company or that period;
c) that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) that they have prepared the annual accounts for the financial year ended 31st March, 2019 on a going concern basis;
e) that they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
f) that they have devised proper systems to ensure compliance with the provisions of all applicable laws and these are adequate and are operating effectively.
17. EXPANSION OF BUSINESS
The Company through its Board of Directors and management is taking extra efforts to reach at higher level by setting a benchmark. The Company also wishes to explore its business in future by keeping in view the dynamism of global market.
M/s. P.M. Bhargava & Co., Chartered Accountants, Mumbai, were appointed as Statutory Auditors for a term of 5 years from FY 2017-18 to FY 2021-22 by the members at the 69th AGM of the Company held on 28th September, 2017. They have confirmed that they are not disqualified from continuing as Statutory Auditors of the Company.
19. AUDITORS REPORT
The notes on financial statements referred to in the Auditors Report are self-explanatory. The Auditors Report does not contain any qualification. However, the Auditors in their Report have mentioned their observation and the same have been laid down below along with Directors comments:
|SR. No.||Auditors Observation in the auditors report||Directors comments on the observations of the auditors mentioned in the auditors report|
|1.||"Details of dues set out herein below in respect of customs duty which has not been deposited as at 31st March, 2019 by the company with the appropriate authorities on account of disputes.||Show Cause Notice was issued wrongly by the assessing authority for Special Additional Duty which was already paid; demand for basic custom duty cant be raised now being time barred as advised by companys counsel does not find any merit.|
|Name of Statute||Nature of Dues||Amount in Lacs||Amount in Rs. Lacs paid under protest||Period to which the amount relates||Forum were disputes is pending|
|Customs||Customs Duty||7.14||2.00||2008- 2009||Customs and Excise Tribunal, Mumbai- Case is heard and matter is reverted back to the concerned assessing authority to re-look afresh.|
|2.||"In our opinion and according to the information and explanations given to us, the Company has defaulted in repayment of term loans installments of Bank of India as mentioned below:||The company has applied to the Bank for reschedulement/ deferment of instalments fallen due on TLs and interest thereon which is under consideration by the bank.|
|Period/ Type||Amount of Default||Delay- till date of this report|
|Financial Year||Due Date||Loan Type|
|1. 2018 (part) and 2019||Mont||Term||17.00||Monthly installment due from December|
|18 to March 19 resulting in delay from 1 to 16 months; as the case may be, respectivel y as per banks original sanction but not reflecting as over due in the banks systems viz. (the download ed current computer and systems/p rints of bank), is neither demanded nor recovered by the bank.||However, interest servicing on Term Loans other than Term Loan 15 has been serviced together with instalments within the permissible grace period for payment.|
20. COST AUDITORS
The appointment of Cost Auditor is not applicable to the Company as per Companies Act, 2013.
21. SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT
The Company has appointed Ms. Kavita Raju Joshi, Practicing Company Secretary, bearing Membership No. 22387 and Certificate of Practice No. 8893 to conduct Secretarial Audit of the Company for the financial year 2018-19 in terms of provisions of Section 204 of the Companies Act, 2013. The Secretarial Audit Report is annexed to this Report as "Annexure C" (Form MR-3).
Your Company has tied up with National Securities Depository Ltd. (NSDL) and Central Depository Services (India) Ltd. (CDSL) to enable the members to trade and hold shares in an electronic/dematerialized form. The shareholders are advised to take benefits of dematerialization.
23. LISTING OF SHARES
The Companys equity shares continue to be listed on The Bombay Stock Exchange Ltd (BSE).
24. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES UNDER SECTION 188 OF THE COMPANIES ACT, 2013
During the financial year under review, the Company had not entered into material related party transactions. However the Company intends to enter into Related Party Transaction with M/s. Metagame Ventures Private Limited during the financial year 2019-20 as set out in the Item No.4 of the Notice to the Annual General Meeting.
25. MANAGEMENT DISCUSSION AND ANALYSIS
Managements Discussion and Analysis Report for the year under review, as stipulated under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") is presented in a separate section forming part of the Annual Report.
26. COMMITTEES OF BOARD
Following are the committees which are constituted or re-constituted by the Company:
A. AUDIT COMMITTEE
The company is having an audit committee comprising of the following directors:
|Mr. Hitesh Mulraj Popat||Chairman||Independent/Non-Executive Director|
|Mr. Sunil Sampatraj Parakh||Member||Independent/Non-Executive Director|
|Mr. Kunal Bafna||Member||Executive Director & CFO|
B. NOMINATION AND REMUNERATION COMMITTEE
The company is having a Nomination and Remuneration Committee comprising of the following Members:
|Mr. Sunil Sampatraj Parakh||Chairman||Independent/Non- Executive Director|
|Mr. Hitesh Mulraj Popat||Member||Independent/Non- Executive Director|
|Mr. Vinit Ramgopal Kejriwal||Member||Independent/Non- Executive Director|
In terms of requirements prescribed under Section 178(3) of the Companies Act, 2013, the Company has formulated the Nomination and Remuneration Policy inter-alia providing the terms for appointment and payment of remuneration to Directors and Key Managerial Personnel and the same has been uploaded on companys website. Nomination & Remuneration Policy is annexed to this report in "ANNEXURE D".
C. ANTI-SEXUAL HARASSMENT COMMITTEE AND RELATED DISCLOSURE.
The Board of Directors having an Anti-Sexual Harassment Committee comprising of following members.
|Ms. Manju Jain||Chairperson||Independent/Non- Executive Director|
|Ms. S L Chavan||Member||Employee|
|Ms. S R Kamble||Member||Employee|
The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Woman at Workplace and has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. All women employees (permanent, contractual, temporary and trainee) of the Company are covered under this Policy. The following is a summary of Sexual Harassment complaints received and disposed off during the year:
|Sr. No.||No. of Complaints received||No. of Complaints disposed off|
NOTE: The Company has dissolved its CSR Committee as the Company is not required to constitute the same.
27. RISK MANAGEMENT POLICY AND INTERNAL ADEQUACY
Your Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. Your Companys internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested by Statutory as well as Internal Auditors. Significant audit observations and follow up actions thereon are reported to the Audit Committee.
28. VIGIL MECHANISM/WHISTLE BLOWER POLICY
The provisions of this policy are in line with the provisions of the Section 177(9) of the Act. The Company has put in place a system through which the Directors and Employees may report concerns about unethical behavior, actual or suspected fraud or violation of the Companys Code of Conduct & Ethics without fear of reprisal. The Employees and Directors may report to the Compliance Officer and have direct access to the Chairman of the Audit Committee. The Company has formulated and published a Whistle Blower Policy to provide Vigil Mechanism for employees including directors of the Company to report genuine concerns.
29. INTERNAL FINANCIAL CONTROLS
Your Company has in place adequate internal financial controls with reference to financial statements. During the year under review, such controls were tested and no reportable material weaknesses were observed.
30. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
During financial year under review, the Company has not transferred any amount to Investor Education and Protection Fund (IEPF).
31. MAINTAINENCE OF COST RECORDS AS SPECIFIED UNDER SECTION 148(1) OF THE COMPANIES ACT, 2013
Central Government has not prescribed the maintenance of cost records under section 148(1) of the Companies Act, 2013 for any of the products/services dealt by the Company. Accordingly, maintenance of such accounts and records is not applicable to the Company.
32. PARTICULARS OF EMPLOYEES
Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided under "Annexure E", which is annexed to this Report. None of the employees of the Company were in receipt of monthly or yearly remuneration in excess of the limits specified under the Companies Act, 2013 and Rule 5(2) & Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
33. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
There are no significant/ material orders passed by the regulators or courts or tribunals impacting the going concern status of the Company and its operations in future.
34. CORPORATE GOVERNANCE
The Company is not required to comply with the provisions of Regulation 17 to Regulation 27 and clause (b) to clause (i) of sub regulation (2) of Regulation 46 and Para C, D and E of Schedule V as mentioned in Regulations 15 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 which came into force with effect from 01st December, 2015 as the Paid-up Share Capital of the Company is less than Rs.10,00,00,000 (Rupees Ten Crores Only) and the Net Worth of the Company is also less than Rs.25,00,00,000 (Rupees Twenty Five Crores Only) based on the Annual Audited Financial Results of the Company for the quarter and year ended March 31, 2019.
35. PERFORMANCE EVALUATION
The Company has devised a policy for evaluation of Performance of the Board of Directors, its Committees and individual Directors ("Policy"). The evaluation involves assessment of performance individually of each of the Board Members and of the entire Board of Directors and its Committees. The performance evaluation criteria of the entire Board of Directors inter alia comprised of the following key areas:
i. the role of a Board Members is clearly defined and understood;
ii. the Board has ensured that the organizations accomplishments and challenges are communicated to Members and Stakeholders;
iii. the spread of talent within the Board reflect the Companys needs;
iv. all Board Members bring valuable skill and experience to the Company;
v. the composition of the Board is sufficient to carry out the work required of it;
vi. the matters relating to the Company are discussed in a structured manner;
vii. the Board knows and understand the Companys mission, vision and strategy; the Boards Meeting agenda clearly reflects strategic plan or priorities;
viii. the Board papers contain the correct amount and type of information;
ix. all Board Members participate in important Board discussions;
x. the Board knows and keep abreast of trends and issues affecting the market in which the Company competes
xi. the Board understands the business it is governing;
xii. the Board Members actively engage in networking for the benefit of the Company;
xiii. the Board Members have sufficient financial skills to ensure that the Board can discharge its governance responsibilities;
xiv. the Company have relevant internal reporting and compliance systems;
xv. the Board Members are aware of their risk assessment duties as Directors; xvi. there is a clear understanding of the Companys business risk;
xvii. the Board encourages Directors to pursue opportunities for personal development;
xviii. the Board have a succession plan in place for the Directors, KMP and Senior Management Personnel;
xix. responsibilities have been effectively delegated amongst the Executive Directors, KMP and Senior Management Personnel;
xx. There is good communication between the Board and KMP.
The evaluation framework for assessing the performance of Committee(s) of Board of Directors inter-alia comprised of the following key areas:
i. the Committees have been constituted in compliance with the requirement of Listing Regulations and the Companies Act, 2013 read with the Rules there under;
ii. the role/terms of reference of the Committee Members is clearly defined and understood;
iii. the composition of the Committee is sufficient to carry out the work required of it;
iv. the Committee knows and understands the Companys mission, vision and strategy;
v. the Committees Meetings are properly conducted and agenda papers contain the correct amount and type of information;
vi. all Committee Members participate in discussion making;
vii. the Committee Members have sufficient skills to ensure efficient discharge of responsibilities;
viii. There is good communication between the Committees and the Board.
ix. the Committee has relevant internal reporting and compliance systems; The performance evaluation process of individual Directors inter alia comprised of the following key areas:
i. uphold ethical standards of integrity and probity;
ii. act objectively and constructively while exercising their duties;
iii. exercise their responsibilities in a bona fide manner in the interest of the Company;
iv. devote sufficient time and attention to their professional obligations for informed and balanced decision making;
v. assist the Company in implementing the best corporate governance practices;
vi. strive to attend all Meetings of the Board of Directors and of the Board committees of which they are members;
vii. moderate and arbitrate in the interest of the Company as a whole, in situations of conflict between Management and Shareholders interest;
viii. satisfy themselves on the integrity of financial information and that financial controls and the systems of risk Management are robust and defensible;
ix. strive to safeguard the interests of all stakeholders, particularly the minority shareholders;
x. balance the conflicting interest of the stakeholders;
xi. seek appropriate clarification or amplification of information and, where necessary, take and follow appropriate professional advice and opinion of outside experts;
xii. keep themselves well informed about the Company and the external environment in which it operates;
xiii. participate constructively and actively in the committees of the Board in which they are chairpersons or members;
xiv. strive to attend the general Meetings of the Company;
xv. acting within their authority, assist in protecting the legitimate interests of the Company, shareholders and its employees;
xvi. pay sufficient attention and ensure that adequate deliberations are held before approving related party transactions and assure themselves that the same are in the interest of the Company;
xvii. ascertain and ensure that the Company has an adequate and functional vigil mechanism and ensure that the interests of a person who uses such mechanism are not prejudicially affected on account of such use;
xviii. report concerns about unethical behaviour, actual or suspected fraud or violation of the Companys code of conduct or ethics policy, if any;
xix. maintain confidentiality of information such as commercial secrets, technologies, advertising and sales promotion plans, unpublished price sensitive information, unless such disclosure is expressly approved by the Board or required by law;
xx. abide by Companys Memorandum and Articles of Association, Companys policies and procedures including code of conduct, insider trading guidelines etc;
xxi. they express concerns about the running of the Company or a proposed action and ensure that these are addressed by the Board and, to the extent that they are not resolved, insist that the concerns are recorded in the Minutes of the Board Meeting;
xxii. develop a good working relationship with other Board members and contribute to the Boards working relationship with the senior Management of the Company;
xxiii. fairly contribute towards proper functioning of Board or Committees of the Board.
The evaluation framework for assessing the performance of Independent Directors inter-alia comprised of the following key areas:
i. satisfy the criteria for independence as prescribed under Section 149 of the Companies Act, 2013 and the Listing Regulations;
ii. help in bringing an independent judgment to bear on the Boards deliberations especially on issues of strategy, performance, risk Management, resources, key appointments and standards of conduct;
iii. bring an objective view in the evaluation of the performance of Board and Management;
iv. actively scrutinize the performance of Management in Meeting agreed goals and objectives and monitor the reporting of performance;
v. undertake appropriate induction and regularly update and refresh their skills, knowledge and familiarity with the Company;
vi. contribute to determine appointment and remuneration of executive Directors, Key Managerial Personnel (KMP) and senior Management;
vii. exercise objective independent judgment in the paramount interest of the Company as a whole, while concurring in or dissenting from the collective judgment of the Board in its decision making. In terms of the Policy, a process of evaluation was undertaken by the Board for its own performance and that of its Committees and individual Directors. The evaluation process focused on various aspects of the functioning of the Board and Committees. Separate exercise was carried out to evaluate the performance of individual Directors on specified parameters. The outcome of evaluation process was shared with the Board, Chairman of respective Committees and individual Directors. Based on the outcome of the evaluation, the Board and Committees have agreed on an action plan for the identified areas. The details of program for familiarization of Independent Directors with the Company, industry in which it operates, their roles, rights, responsibilities is made available on the website of the Company www.jainexaamcol.com.
36. INDEPENDENT DIRECTORS MEETING
During the year under review, the Independent Directors of the Company met on Thursday, 14th February, 2019, inter-alia, to discuss: i. Evaluation of performance of Non-Independent Directors and the Board of Directors of the Company as a whole. ii. Evaluation of performance of the Chairman of the Company, taking into view of Executive and Non- Executive Directors. iii. Evaluation of the quality, content and timelines of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform its duties.
The Board of Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
1. Issue of equity shares with differential rights as to dividend, voting or otherwise.
2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.
3. The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.
4. No fraud has been reported by the Auditors to the Audit Committee or the Board.
5. The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
Your Directors would like to thank and place on record their appreciation for the support and co-operation provided to your Company by its Shareholders, their employees, regulatory authorities and its bankers. Your Directors would also like to place on record their appreciation for the efforts put in by employees of the Company during the year.
|FOR AND ON BEHALF OF THE BOARD OF DIRECTORS|
|for Jainex Aamcol Limited|
|Mohanlal Zumbarlal Kothari||Rahul Dugar|
|Place: Mumbai||DIN: 01486305||DIN : 00013704|
|Date:14th August, 2019|