jamna auto industries ltd Directors report


Dear Members,

Your Directors have pleasure in presenting the 57th Annual Report and Audited Financial Statements of Jamna Auto Industries Limited for the financial year ended March 31, 2023.

Financial Results-An Overview

Standalone

Consolidated

Year Ended March 31, 2023 Year Ended March 31, 2022 Year Ended March 31, 2023 Year Ended March 31, 2022
Net Sales 2231.83 1649.04 2325.32 1717.88
PBDIT 251.02 211.51 272.89 230.80
Finance cost (0.16) 1.90 2.49 2.79
PBDT 251.18 209.61 270.39 228.01
Depreciation 38.37 35.08 41.01 36.73
PBT 212.81 174.53 229.38 191.27
Provision for current tax 53.12 46.74 58.83 53.19
Provision for deferred tax 1.93 (2.67) 2.18 (2.72)
PAT 157.76 130.46 168.37 140.80
Other Comprehensive Income 0.18 0.63 0.28 0.59
Total Comprehensive Income 157.95 131.08 168.65 141.40
Balance brought forward 425.55 334.30 427.15 325.59
Payment/Provision of dividend including tax 71.73 39.83 71.73 39.83
Retained earnings 511.77 425.55 524.07 427.15

Operational Review

The Company continued to outperform the automobile industry with double-digit revenue growth and maintained healthy relationships with customers. As a result of our focused efforts, during FY 2022-23, Companys consolidated sales grew to Rs. 2325.32 crores compared to Rs.1717.88 crores in the previous Financial year. The consolidated PAT stood at Rs.168.37 crore as compared to Rs.140.80 crores in the previous Financial year. During FY 2022-23, Companys performance toward its Lakshya 50XT was broadly aligned. Members are requested to refer to Management Discussion and Analysis section for detailed information. Jai Automotive Components Limited (JACO) is one of wholly owned subsidiary of the Company. During the FY 2022-23, JACOs first unit at Rudrapur,Uttrakhand,formanufacturingmachinedproductscommenced its operations in February, 2023. The Unit started commercial production of Nodo Brackets. JACO has also started operations at second unit at Dera Bassi, Punjab in April, 2023. The Unit started commercial production of agriculture implements i.e. rotavator & cultivator. Work has been ongoing on a proposed factory of one of our wholly owned subsidiary i.e. Jai Suspensions Limited (JSL) in Adityapur (Jharkhand).

Jai Suspension Systems Private Limited (JSSPL), Companys third subsidiary, has a unit in Rudrapur, Uttrakhand, for manufacturing of conventional and parabolic leaf springs and air suspension.

Credit Rating

The Company is in a strong financial position and has adequate liquidity to meet its business requirements. ICRA Limited ("ICRA") has maintained companys long term credit rating as [ICRA]AA- (pronounced ICRA double A minus) and short term rating as [ICRA] A1+ (pronounced ICRA A one plus). ICRA has also given ratings to companys Commercial Paper (CP) issue as [ICRA] A1+ (pronounced as ICRA A one plus). The outlook on Long Term Rating is stable.

Material Changes and Commitments

There are no material changes affecting the financial position of the Company after the closure of the FY 2022-23 and till the date of this report.

Subsidiaries, Joint Ventures and Associate Companies

The Company has three subsidiaries as at March 31, 2023, namely as Jai Suspensions Limited ("Wholly-owned Subsidiary"), Jai Automotive Components Limited ("Wholly-owned Subsidiary") and Jai Suspension Systems Private Limited (Companys holding is 99.9985% of the equity share capital therein). There is no change in the nature of the businesses of the subsidiary companies. Jai Suspension Systems Private Limited is a material subsidiary of the Company effective from April 01,2023 as per the criteria mentioned in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") and Companys policy on material subsidiary. The transactions with Jai Suspension Systems Private Limited is material related party transactions in terms of the Listing Regulations and as per the policy on related party transactions. The approval of members for material related party transactions is being sought in ensuring annual general meeting. The Policy for determining material subsidiaries as approved by the Board of Directors can be accessed on the Companys website at https://www.jaispring.com/assets/investor-relation/corporate-governance/Policy-on-Material-Subsidiary.pdf.

In accordance with Section 129(3) of the Companies Act, 2013 ("Act"), the Company has prepared consolidated financial statements of the Company and all its subsidiaries, which form part of this Annual Report. Audited financial statements together with related information and other reports of each of the subsidiary company are available on the website of the Company at https://www.jaispring.com/annual-reports-2022-2023.html. A statement containing salient features of the financial statements of the subsidiary companies in Form AOC-1 is also provided in this report.

Dividend and Dividend Distribution Policy

During the FY 2022-23, the Board of Directors has declared an interim dividend of Rs.0.80 (Rupee Eighty Paisa) per equity share of Rs.1 each. The Board of Directors has also recommended final Dividend of Rs. 1.10 (One Rupee Ten Paisa) per equity share of Rs.1 each for the FY 2022-23. After payment of the final dividend, the total dividend per share for FY 2022-23 will be Rs. 1.90 (One Rupee Eighty paisa). The total dividend payout will be 45% of PAT, in line with "Lakshya 50XT" plan. The final dividend recommended is subject to the approval of members at the ensuing Annual General Meeting (AGM).

The dividend distribution policy of the company is available on the website of the Company at https://www.jaispring.com/assets/ investor-relation/corporate-governance/Dividend-Distribution-Policy.pdf.

Transfer to Reserves

During the FY 2022-23, Rs. 65 Lacs were transferred to general reserves.

Deposits

The Company has not accepted any deposits from public during the year under review, and as such, no amount of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

Directors and Key Managerial Personnel

In accordance with the provisions of the Act, Listing Regulations and Articles of Association of the Company, there are 8 Board members consisting of Independent, Executive and Non-executive Directors. The detailed information of the Board and the Directors inter alia their composition, directorship, expertise, evaluation, meetings held and attendance are given in the Corporate Governance Report, which forms part of this Annual Report and annexed as Annexure-5. During the FY 2022-23, Mrs. Rashmi Duggal (DIN: 09602912) was appointed as Non-Executive Independent Director with effect from May 21, 2022 for initial term of 5 years and Mr. R.S. Jauhar (DIN: 00746186) was re-appointed as Chairman and Executive Director for a term of 3 years effective from January 01, 2023.

Pursuant to the provisions of the Act and the Articles of Association of the Company, Mr. S.P.S. Kohli (DIN: 01643796) Executive Director will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The Board recommends his re-appointment. The resolution seeking approval of the Members for his re-appointment, forms part of Annual General Meeting (AGM) Notice.

Pursuant to the requirements under Section 134 and Section 178 of the Companies Act, 2013, the policy on the appointment, nomination and remuneration of Directors, Key Managerial Personnel and Senior Management is annexed as Annexure-1, which forms part of this report and also placed on Companys website at https://www. jaispring.com/assets/investor-relation/corporate-governance/ KMP-and-Senior-Management.pdf.

During the FY 2022 - 23 year, there was no change in the Key Managerial Personnel of the Company.

Declaration by Independent Directors

The Company has received declarations from all Independent Directors of the Company that they meet the criteria of independence as prescribed under Section 149 of the Act and Listing Regulations and there has been no change in the circumstances affecting their status as independent director of the Company. The above declarations were placed before the Board and the Board is satisfied of the integrity, expertise and experience including proficiency in terms of Section 150(1) of the Act of all Independent Directors on the Board. All the Directors of the Company have confirmed, that they have complied with the Companys code of conduct and none of the Director is disqualified as on the date of this report.

Committees of the Board

Board of Directors of the Company has formed following committees in terms of requirements of the Act, Listing Regulations and to improve Boards effectiveness and efficiency. These committees enable the Board to have detail analysis and focus attention on matter where specialized or technical discussions are required: i. Audit Committee ii. Nomination and Remuneration Committee iii. Stakeholders Relationship Committee iv. Corporate Social Responsibility Committee v. Risk Management Committee vi. Compensation Committee (ESOP) vii. Borrowing Investment and Administrative Committee Constitution of these committees is in terms of requirement of the Act and Listing Regulations. Details of the committees are given in the Corporate Governance Report, which forms part of this Annual Report. There was no instance where the Board did not accept the recommendation of the Audit Committee and Nomination and Remuneration Committee.

Performance Evaluation

The annual performance evaluation of the Board of Directors as a whole and individual Directors was conducted in accordance with the provisions of the Act and the Listing Regulations. The Board evaluated its performance after seeking inputs from all the Directors on the basis of criteria such as: a. Attendance and participation in meetings b. Effectiveness in decision making c. Rendering independent and unbiased opinion d. Open and constructive communication e. Leadership initiative and ethical conduct f. Professional skills, problem solving and decision making g. Ability for providing strategic direction and proper discharge of responsibility Independent Directors at their meeting held on March 21, 2023 have done performance evaluation of the Chairman and Non-Independent Directors.

Meetings of Board of Directors

The Board meets at least once in a quarter to review the financial results along with other agenda items. Additional meetings of the Board of Directors are conducted to consider significant matters, whenever required. For any business exigencies, the resolutions are passed by circulation and later placed at the subsequent Board / Committee Meeting for ratification/approval.

During the year under review, four meetings of the Board of Directors of the Company were held on May 21, 2022, July 28, 2022, November 02, 2022 and February 03, 2023 respectively. The complete details about the Boards strength, attendance and remuneration of directors are given under the Corporate Governance Report forming part of this report.

Directors Responsibility Statement

Pursuant to Section 134 (3) (c) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that: a) In preparation of the annual accounts for the financial year ended March 31, 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures. b) the directors had 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 the company at the end of the financial year and of the profit and loss of the company for that period.

c) The directors had 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) The directors had prepared the annual accounts on a going concern basis. e) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and operating effectively. f) The directors had devised proper systems to ensure compliance of the provisions of all applicable laws and that such systems were adequate and operating effectively.

Auditors and their Reports a) Statutory Auditors

M/s S. R. Baltiboi & Co. LLP Chartered Accountants were appointed as Statutory Auditors of the Company for their second term of five consecutive years, which will expire at the ensuing 57th Annual General Meeting of the Company. The Directors places on record their appreciation for their cooperation and support during their tenure as statutory auditors of the Company.

In view of the above, Directors recommend that M/s. Price Waterhouse Chartered Accountants LLP (Firm Registration No. 012754N/N500016) may be appointed as Statutory Auditors of the Company to hold office for the term of 5 (five) consecutive years from the conclusion of the ensuing Annual General Meeting, until the conclusion of the 62nd Annual General Meeting of the Company. M/s. Price Waterhouse Chartered Accountants LLP has confirmed their eligibility and willingness to act as Statutory Auditors of the Company, if appointed. The resolution seeking approval of the Members for appointment of M/s. Price Waterhouse Chartered Accountants LLP (Firm Registration No. 012754N/N500016) as Statutory Auditors of the Company forms part of AGM Notice.

The Auditors Report of M/s S. R. Baltiboi & Co. LLP Chartered Accountant for FY 2022-23 is unmodified i.e. it does not contain any qualification, reservation or adverse remark or disclaimer and is self-explanatory.

b) Secretarial Auditors

Pursuant to the provisions of section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company appointed M/s RSM & Co., Company Secretaries (COP NO.3666) to undertake the Secretarial Audit of the Company for the FY 2023-24. The secretarial audit report is attached as Annexure-2 of this report. The Secretarial Audit Report for FY 2022-23 does not contain any qualification, reservation or adverse remark or disclaimer and is self-explanatory.

c) Cost Auditor

M/s Jangira & Associates, Cost Accountants (FRN:103597) were re-appointed as cost auditors of the Company for the FY 2023-24. As per the provisions of the Act, the remuneration payable to the Cost Auditor is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a resolution seeking ratification of Members for the remuneration payable to M/s Jangira & Associates, Cost Accountants forms part of Annual General Meeting Notice.

Change in Equity Shares and ESOP

During the year, the Company issued and allotted 209000 equity shares of Rs.1/- each, pursuant to exercise of stock options by the eligible employees under Employee Stock Option Scheme, 2017. Accordingly the share capital has increased from 398622885 equity shares of Rs. 1/- each to 398831885 equity shares of Rs. 1/- each. There was no change in authorized capital of the Company, during the year.

In compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (‘SEBI Regulations 2021) a certificate from the Secretarial Auditors confirming implementation of the above Scheme is obtained and is annexed as Annexure-3.

The statutory disclosures as mandated under the Act and the SEBI Regulations 2021 are available on the Companys website www. jaispring.com.

The Company has not issued any sweat equity shares or equity shares with differential voting rights hence there is no information required to be furnished in terms of provisions of Rule 4(4) and Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014.

Transfer of amount to Investor Education and Protection Fund

Pursuant to provisions of Section 124(6) of the Act and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the amount of dividend entitlements that remained unclaimed for seven consecutive years or more and corresponding shares thereof were transferred by the Company to Investor Education and Protection Fund (IEPF). The details of dividends and shares which were transferred to IEPF during the year and the future due dates for the transfer of unclaimed and unpaid dividends to the IEPF have been provided under the Corporate Governance section at Annexure-5. A detailed list of shareholders whose dividend or shares have been transferred to IEPF is also available at the website of the Company https://www. jaispring.com/unclaimed-dividend.html.

Business Responsibility and Sustainability Report (BRSR)

SEBI, vide its circular dated May 10, 2021, has introduced new reporting requirement on ESG (Environment, Social and Governance) parameters called Business Responsibility and Sustainability Report (BRSR). BRSR is mandatory for top 1,000 listed companies (by market capitalization) from FY 2022-23 and is intended towards having quantitative and standardized disclosures on ESG parameters. Business Responsibility and Sustainability Report in terms of the provisions of Regulation 34 of Listing Regulations forms integral part of this report and annexed as Annexure-4.

Management Discussion & Analysis

Management Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of SEBI Listing Regulations, is presented in a separate section forming part of the Annual Report.

Corporate Governance

The Management attaches importance to observe the principles of corporate governance in its work. Pursuant to Regulation 34 of the Listing Regulations, a separate report on compliance with corporate governance conditions and the auditors certificate thereon forms an integral part of this report as Annexure-5. The Auditors certificate on Corporate Governance Report of the Company does not contain any qualification or remark.

Web Link of Annual Return

The Company has a functional and updated website at www.jaipsring. com. The annual return of the Company under the Companies Act, 2013 is also published on Companys website https://www.jaispring. com/annual-return.html

Particulars of Employees

In terms of provisions of Section 197(12) of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, disclosures pertaining to remuneration and other details are given at Annexure-6 and forms an integral part of this report.

As per the provisions of Section 136(1) of the Companies Act, 2013, the Annual Report and the Accounts are being sent to all the members of the Company, excluding the information required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Any member interested in obtaining such information may write to the Company Secretary at the Registered Office. The said information is also available for inspection at the Registered Office during working hours up to the date of the ensuing Annual General Meeting.

Corporate Social Responsibility (CSR)

The Company emphasizes corporate social responsibility activities that promote healthcare, including preventive healthcare, community service, promotion of education, environmental protection, promotion of sports and community outreach. Companys CSR policy and details of its corporate social responsibility activities are available on the Companys website at https://www.jaispring. com/csr.html. The annual report on CSR activities carried out by the company during the year under review is attached as Annexure – 7 of this report, which constitutes an integral part of this report.

Particulars of Loans, Guarantees or Investments

Details of loans, guarantees and investments covered by the provisions of Section 186 of the Companies Act, 2013 are set out in the notes to the Financial Statements.

Energy Conservation, Technology Absorption & Foreign Exchange

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134(3) (m) of the Act read with Companies (Accounts) Rules, 2014 are provided as Annexure – 8 and forms an integral part of this report.

Risk Management Policy

The management has an ongoing approach to risk management, i.e. identifying, analyzing, mitigating or reducing risks and implementing an effective risk management framework for this purpose. The Risk Management Committee of the Board of Directors has formulated a risk management policy for the company. The policy is designed to review risks on a regular basis and provides a risk management framework for the timely and effective monitoring and implementation of risk mitigation measures. Risk management policy is governed and overseen by the Risk Management Committee and is available on the Companys website at https://www.jaispring.com/assets/investor-relation/corporate-governance/RISK-MANAGEMENT-POLICY.pdf One of the major objectives of the Companys 5 year plan namely "Lakshya 50XT" is to de-risk the Company from cyclical CV market and product.

Internal Financial Control

The Company has in place appropriate internal financial controls, systems and procedures to safeguard its assets, prevent and detect fraud and errors, ensure accuracy and completeness of accounting records and timely preparation of reliable financial information.

M/s Protiviti Risk & Business Consulting is the Companys internal auditor. Internal auditors independently assess the adequacy of internal controls, procedures and concurrently audit majority of the transactions in value terms. The internal auditors report is submitted to the Audit Committee.

Vigil Mechanism / Whistle Blower

The Company has adopted a Whistle Blower Policy establishing vigil mechanism to deal with any fraud, irregularities or mismanagement within the company. Policy allows directors and employees to write directly to the chair of the audit committee to report any fraud, irregularities, or mismanagement. The policy ensures that concerns received are handled with confidentiality and without discrimination or harm to any whistleblower. There was no complaint received under vigil mechanism during the year under review. The Whistleblower Policy is available at the website of the Company at https://www. jaispring.com/assets/investor-relation/corporate-governance/ Whistle-Blower-Mechanism.pdf

Related-Party Transactions

Details of related party transactions entered into by the Company during FY 2022-23 are provided in financial statements in accordance with applicable Accounting Standards. All contracts/arrangements/ transactions with related parties were done on an arms length basis, in the ordinary course of business and in compliance with applicable provisions of the Act and Listing Regulations. Approval of the Audit Committee was obtained for related party transactions. Transactions, which were repetitive in nature were got approved through omnibus route. Details of the material related party transactions entered into by the Company in FY 2022-23 are set out in AOC-2 form in Annexure 9 to this report. Approval of the members is being sought for entering into material related party transactions with a subsidiary company i.e. Jai Suspension Systems Private Limited in terms of regulation 23(4) of Listing Regulations and Section 188 of the Act. Companys policy on Related Party Transactions is available at the Companys website at https://www.jaispring.com/assets/ investor-relation/corporate-governance/Policy-on-Related-Party-Transaction.pdf Transactions with person or entity belonging to the promoter/ promoter group holding 10% or more shareholding in the Company are provided in the Financial Statements.

IPR

Companys Trademark ‘JAI is registered in 15 countries across the world. During the year under review Company has applied for getting ‘Well Known status of its Trademark. Company is copyright holder of about 120 designs of its products. During the year under review the Company has applied for copyright registration of 20 new designs. Company holds one patent of its product "Air Suspension System". During the year under review, the Company has applied for getting another Patent of its product "Air Suspension System for Trailer".

Disclosure for Compliance with Secretarial Standards

The Company is in compliance with the Secretarial Standard-1 (Meetings of Board of Directors) and Secretarial Standard-2 (General Meetings) issued by the Institute of Company Secretaries of India.

Disclosure under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has constituted a committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year under review, no complaint under that Act was received. The Companys Sexual Harassment Policy is available on its website at https://www.jaispring.com/ assets/investor-relation/corporate-governance/Sexual%20 Harrasment%20Policy.pdf.

Details in respect of fraud reported by auditors under section 143(12) of the Act other than those which are reportable to the central government

No fraud has been reported by auditors under section 143(12) of the Act other than those which are reportable to the Central Government during the financial year 2022-23.

Appreciation

The board of directors expresses its heartfelt thanks and appreciation to employees at all levels for their hard work, solidarity, cooperation and dedication over the past year. The Board expresses its gratitude to customers, shareholders, suppliers, bankers, business partners, regulators and government agencies for their continued support.

For and on behalf of the Board of Directors
Place: New Delhi Randeep Singh Jauhar
Date: May 29, 2023 Chairman & Executive Director