Jamna Auto Industries Ltd Directors Report.

Dear Members,

The Directors have pleasure in presenting the 56th Annual Report and Audited Financial Statements for the financial year ended on March 31, 2022.

Financial Results-An Overview

(Rs. in crore)

Standalone Consolidated
Particulars Year Ended March 31, 2022 Year Ended March 31, 2021 Year Ended March 31, 2022 Year Ended March 31, 2021
Net Sales 1649.04 1052.71 1717.88 1079.48
PBDIT 211.51 141.06 230.80 142.39
Finance cost 1.90 4.42 2.79 5.93
PBDT 209.61 136.64 228.01 136.46
Depreciation 35.08 33.99 36.73 35.58
PBT 174.53 102.65 191.27 100.88
Provision for current tax 46.74 28.68 53.19 31.45
Provision for deferred tax (2.67) (2.75) (2.72) (3.53)
PAT 130.46 76.72 140.80 72.96
Other Comprehensive 0.63 (0.46) 0.59 (0.37)
Income
Total Comprehensive 131.09 76.26 141.40 72.60
Income
Balance brought forward 334.30 268.00 325.59 262.95
Payment/Provision of dividend including tax 39.83 9.96 39.83 9.96
Retained earnings 425.55 334.30 427.15 325.59

Operational Review

During FY 2021-22, Companys topline grew as consolidated sales rose to Rs.1,718 crore compared to Rs.1,079 crore in previous year. The consolidated PAT stood at Rs.141 crore as compared to Rs.73 crore in the previous year. The Company continued to maintain its business shares and healthy relations with its customers. The Company started executing its Lakshya 50XT declared in FY 2021-22. For details members please see Management Discussion and Analysis section. The Company plans to start manufacture of new products i.e. U-bolts, Spring Pin, Hanger Shackle and fabrication parts through expansion at existing plants or setting up new plants in the Company or subsidiaries. Mahindra & Mahindra Agriculture Implement Division has accorded us a contract to supply rotavator blades. The components are under development at Yamuna Nagar plant and supplies are expected to begin by January 2023.

The Company has three subsidiaries as on March 31, 2022 namely Jai Automotive Components Limited (JACO), Jai Suspension Systems Private Limited (JSSPL) and Jai Suspensions Limited (JSL). The proposed machined products unit of Companys wholly owned subsidiary JACO at Rudrapur, Uttrakhand is ready and commercial production shall begin by January 2023. JACO proposed unit at Indore for U-bolts, Spring Pin and Hanger Shackle is expected to start commercial production by January 2024. JACO also plans to set up a base to manufacture fabrication parts at Dera Bassi, Punjab for which land & building is procured on lease. JACO proposed unit at Dera Bassi is expected to start commercial production by July 2023. During the year under review, work at proposed unit of another wholly owned subsidiary company JSL at Adityapur (Jharkhand) is started and commercial production is expected to commence by June 2024. During the year under review, the Company launched new products in after market like Clutch, Bearing and Break Lining. These products have high potential in after market.

Credit Rating

Your Company enjoys a sound reputation for its prudent financial management and its ability to meet financial obligations. ICRA Limited ("ICRA") has reviewed the credit rating of the Company and at present, the Companys long term credit rating is [ICRA]AA- (pronounced ICRA double A minus) and short term rating as [ICRA] A1+ (pronounced ICRA A one plus). The credit rating assigned to Commercial Paper (CP) reaffirmed at [ICRA] A1+ (pronounced as ICRA A one plus). The outlook on Long Term Rating is stable.

Material Changes and Commitments

From March 31, 2022 to the date of this report, there have been no major changes and commitments affecting the Companys financial position. There are no major orders issued by any authority to the Company which impact its going concern status and future operations.

Subsidiaries, Joint Ventures and Associate Companies

The Company has three subsidiaries, namely Jai Suspensions Limited ("Wholly-owned Subsidiary"), Jai Automotive Components Limited ("Wholly-owned Subsidiary") and Jai Suspension Systems Private Limited. During the year under review, the Jai Suspension Systems LLP was converted into Jai Suspension Systems Private Limited w.e.f. May 28, 2021. The Company holds 99.9985% of the equity share capital of Jai Suspension Systems Private Limited. The policy for determining material subsidiaries as approved by the Board is placed on the website of the company at www.jaispring. com.

The audited financial statements and related information of subsidiaries are available on the Companys website. www.jaispring.com. Pursuant to Section 129(3) of the Companies Act, 2013, a statement in Form AOC-1 containing salient features of financial statements of the Companys subsidiaries, forms part of the annual report. The statement describes the performance and financial position of each of the Companys subsidiaries.

Dividend and Dividend Distribution Policy

The Companys dividend distribution policy is to pay 33% of PAT as a dividend to the shareholders. Please refer to the website of the Company www.jaispring.com for the policy. During the year under review, the Company has launched a 5-year plan named "Lakshya 50 XT" for FY-26. One of the goals of the plan is to achieve a distribution of 50% of PAT as dividends or share buybacks or both by FY26.

An interim dividend of Rs 0.50 (Fifty Paisa) per share was paid during the FY2021-22. The Directors are pleased to recommend for your consideration a final dividend of Rs. 1 (One Rupee) per equity share of Rs.1 each. The payment of the final dividend is subject to the approval of the shareholders of the Company at the ensuing annual general meeting. After payment of the final dividend, the total dividend payment per share for FY 2021-22 will be Rs.1.50 (One Rupee Fifty paise) per share. The total dividend payout for FY 2021-22 will be 42.5% of the PAT, which is in accordance with the Companys dividend policy and Lakshya 50XT.

Transfer to Reserves

During the year under review, no amount out of profits has been transferred to general reserve.

Deposits

During the year under review, the Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

Directors and Key Managerial Personnel

The Board consists of 8 Directors including Independent, Executive and Non-executive Directors. The composition of the Board is in conformity with the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations).

The founder and non-executive chairman of the Company, Mr. Bhupinder Singh Jauhar (DIN: 00944380), passed away on 31 July 2021 and ceased to be the Director of the Company. The Board of Directors at its meeting held on August 14, 2021 has appointed Mr. R. S. Jauhar, as Chairman of the Board of Directors. Ms. Taru Bahl Bahl, an independent director, has resigned from the Directorship on

April 13, 2022. The Board would like to thank for her contributions and support during her tenure as an independent director of the Company. The Board has appointed Ms. Rashmi Duggal as an Independent Director w.e.f. May 21, 2022.

Ms. Rashmi Duggal is Post Graduate in Economics and holds Diploma in Business Management and CAIIB. She is retired from State Bank of India in the year 2021 as General Manager. Ms. Duggal has worked in different capacities during her more than 3 decades of association with the Bank. She has vast experience in industrial finance, operations, and various administrative areas. Ms. Duggal is registered with the Independent Directors Databank maintained by the Indian Institute of Corporate Affairs. She is required to pass the online proficiency self-assessment test under the Companies (Appointment and Qualification of Directors) Rules, 2014. During the year under review, Mr. Gautam Mukherjee was appointed as an Independent Director with effect from 31 May 2021. The appointment was regularized by the members at their 55th Annual General Meeting.

In compliance with the provisions of Section 152 of the Companies Act, 2013, read with the Articles of Association of the Company, Mr. P. S. Jauhar, Director of the Company will retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment. The Board recommends his reappointment.

The brief profile of Ms. Rashmi Duggal and Mr. P.S. Jauhar, who are proposed to be appointed/re-appointed, forms part of the notice of the 56th AGM. 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 www.jaispring.com.

During the year, there is no change in the Key Managerial Personnel of the Company.

Declaration by Independent Directors

In the opinion of the Board and as confirmed by them, the independent directors fulfill the conditions specified in section 149 of the Companies Act, 2013, the rules made thereunder and the SEBI Listing Regulations as to their status as an independent directors of the Company. The Directors of the Company have also confirmed that they have complied with the Companys code of conduct.

Committees of the Board

The Board of Directors of the Company constituted the following Committees to focus on specific areas and make informed decisions in the best interests of the Company within the law:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders Relationship Committee

4. Corporate Social Responsibility Committee

5. Risk Management Committee

6. Compensation Committee

7. Borrowing Investment and Administrative Committee

The details of the composition of the said Committee(s), their terms of reference, meetings held and attendance of the Committee members thereat, during the financial year 2021-22 are provided in the Corporate Governance Report, which forms an integral part of this report. There was no instance where the Board did not accept the recommendation of the Audit Committee and Nomination and Remuneration Committee.

Performance Evaluation

Pursuant to the applicable provisions of the Companies Act, 2013 and the Listing Regulations, the annual performance evaluation of the Board as a whole and Individual Directors was carried out during the year under review.

The performance evaluation of the Independent Directors was carried out by the entire Board and the performance evaluation of the Chairman & Non-Independent Directors was carried out by the Independent Directors at their meeting held on March 14, 2022.

The performance was evaluated on the basis of the various factors such as the Directors participation, contribution, efficiencies, skills, decision making, independence, integrity, ethical conduct, discharge of responsibilities, etc.

Meetings of Board of Directors

During the year under review, four meetings of the Board of Directors of the Company were held on May 31, 2021, August 14, 2021, November 10, 2021 and February 04, 2022 respectively. The complete details about the Boards strength, attendance and remuneration to 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, confirms that:

a) in preparation of the annual accounts for the FY 2021-22, 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

The Company has appointed M/s S. R. Batliboi & Co; LLP Chartered Accountants as auditors of the Company to hold the office from the conclusion of the 52nd Annual General Meeting up to the conclusion of the 57th Annual General Meeting of the Company to be held in the year 2023. The report of the statutory auditors does not contain any qualification, reservation or adverse remarks and forms part of this Annual Report. The report reads with notes on accounts is self-explanatory and does not call for any further comments.

In relation to emphasis of matter as explained in Note 51 to the accounts, for one of its customer, the Company has obtained a bill discounting facility from the Companys bank (wherein the bill discounting charges are borne by the customer), where the customer has a principle liability to pay to the bank. The obligation of the Company, to the bank may only arise in an unforeseen event of an occurrence of default by the customer. The customer is of very high standing and with an impeccable payment record and has no defaults till date. The Company accordingly saw no risk of any liability arising on this account and had accordingly shown bill discounting amount of INR 115 Crores as a contingent liability as at March 31, 2021. For the year ended on March 31, 2022, the Company has recognized the bill discounting amount of INR 178 Crores as a current liability, with a corresponding amount of INR 178 Crores as receivables from the same customer as at March 31, 2022.

b) Secretarial Audit

The Company has re-appointed M/s RSM & Co., Company Secretaries, as the Secretarial Auditor to conduct a secretarial audit of the Company for FY 2021-22. The report of the secretarial auditors also does not contain any qualifications, reservations or adverse remarks. The secretarial audit report is self-explanatory and is attached as Annexure-2 of this Report.

c) Cost Auditor

M/s Jangira & Associates, Cost Accountants has been reappointed as cost auditors of the Company for the FY 2022-23. The approval for remuneration payable to the Cost Auditor is being sought from the members of the Company in the ensuing Annual General Meeting. The cost audit report for the FY 2021-22 would be filed with the Central Government within the prescribed time.

Change in Equity Shares and ESOP

In FY 2021-22, 159,000 equity shares of Rs. 1 each were allotted upon exercise of vested stock options under Companys Employee Stock Option Scheme, 2017. Accordingly the share capital has increased from 398,463,885 equity shares of Rs. 1/- each to 398,622,885 equity shares of Rs. 1/- each.

The Disclosure with respect to Employees Stock Option Plan pursuant to SEBI (Share Based Employees Benefits) Regulations, 2014/ SEBI (Share Based Employee Benefits and Sweat Equity) Regulation, 2021 and Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 is annexed as Annexure-3. 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

During the year under review, 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 has been transferred to IEPF is also available at the website of the Company at www.jaispring.com.

Business Responsibility Report

Business Responsibility Report in terms of the provisions of Regulation 34 of SEBI Listing Regulations forms an integral part of this Report and is 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 this Annual Report.

Corporate Governance

In compliance with Regulation 34 of the SEBI Listing Regulations, a separate report on Corporate Governance along with a certificate from the Statutory Auditors on its compliance forms an integral part of this Report and is annexed as Annexure-5. The Auditors certificate on Corporate Governance Report of the Company does not contain any qualification or adverse remark.

Web Link of Annual Return

The annual return of the Company under the Companies Act, 2013 is placed on the Companys website at www.jaispring.com

Particulars of Employees

The disclosures 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 given at Annexure-6 and form 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)

In its annual action plan approved by the Corporate Social Responsibility Committee, the Company focuses its corporate social responsibility on promoting healthcare, including preventive healthcare and community service, promoting education, environmental protection, promoting sports and community outreach. Our corporate social responsibility initiative has reached in Haryana (Yamuna Nagar, Gurugram & Kurukshetra), Uttarakhand (Pant Nagar), Jharkhand (Jamshedpur), Maharashtra (Pune), Uttar Pradesh (Lucknow), Madhya Pradesh (Malanpur), Tamil Nadu (Chennai, Pillaipakkam, Hosur), Punjab (Kapurthala), Delhi, Andaman and Nicobar Islands and Lakshwadeep.

The annual report on corporate social responsibility activities is attached in the specified format as Annexure-7 and forms part of this Report. The companys CSR Policy is available on its website at www.jaispring.com.

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 set out in Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8(3) of Companies (Accounts) Rules, 2014 form an integral part of this Report and are attached as Annexure-8.

Risk Management Policy

Risk management refers to identifying and analyzing risks and taking timely action to mitigate or reduce such risks. Company has established risk management frameworks to identify, assess, mitigate or reduce business risks. One of the major objectives of the Companys 5 year plan namely "Lakshya 50XT" is to de-risk the Company from the market, operational and other risks.

The Board of Directors of the Company has formed a Risk Management Committee. The committee has established a risk management policy for the company. The policy is available on the Companys website at www.jaispring.com. The committee assesses risks and recommends actions to control, minimize and mitigate them. The Board of Directors keeps abreast of the companys risk management situation.

Internal Financial Control

The Company has established and maintained appropriate systems of internal controls to ensure authorized access and use of all assets, correct financial recording of transactions to ensure the reliability of financial statements. These internal controls are supplemented by internal audits, management reviews and documented policies, procedures & guidelines. M/s Protiviti Risk & Business Consulting is the internal auditors of the Company.

There were no adverse remarks or qualifications on accounts of the Company from the Internal Auditor.

Vigil Mechanism / Whistle Blower

The Board of Directors of the Company has adopted a Vigil Mechanism Policy. This mechanism provides a tool in the hands of employees and Directors to report to the Management, concerns about unethical behavior, actual or suspected fraud or violation of the Codes of conduct or policy, leakage of unpublished price sensitive information etc. The mechanism provides for adequate safeguards against victimization of employees and Directors, who avails the mechanism and also provides for direct access to the Chairman of the Audit Committee in exceptional cases. The Whistleblower Policy is available at the website of the Company at www.jaispring.com. There was no complaint received under Whistle Blower Policy during the year under review.

Related-Party Transactions

All related party transactions are entered on an arms length basis, in the ordinary course of business in accordance with Companys policy on Related Party Transaction. Companys policy on Related Party Transactions is available at the Companys website at www.jaispring.com. Pursuant to regulation 23(4) of SEBI Listing Regulations read with SEBI circulars no. SEBI/HO/CFD/CMDI/ CIR/P/2022/40 dated 30 March, 2022 and circular no. SEBI/HO/ CFD/CMDI/CIR/P/2022/47 dated 8 April, 2022 on related party transactions, the approval of the shareholders is being sought for entering into transactions with Jai Suspension Systems Private Limited, a subsidiary of the Company. Details of the material contracts or arrangements entered into by the Company with related parties in FY2021-22 are set out in AOC-2 form in Annexure 9 to this Report. The details of the transactions with the Related Party are provided in the Companys financial statements in accordance with the applicable Accounting Standards. All related party transactions are referred to the Audit Committee and the Board of Directors for approval. Omnibus approval of Audit Committee and Board is obtained for foreseeable and recurring transactions. Report of all related party transactions are submitted to the Audit Committee and the Board of Directors on a quarterly basis.

IPR

During the year under review, the Company got registration of its Trademark "JAI" in USA and obtained copyrights for 30 new designs of leaf springs and parabolic springs. Trademark "JAI" is now registered in 15 countries across the world. The Company currently holds the copyrights to approximately 120 leaf and parabolic springs designs and a patent for "Air Suspension System."

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 complaints under the Act were received. The Companys Sexual Harassment Policy is available on its website at www.jaispring.com.

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

No fraud has been reported by auditors under section 143(12) of the Companies Act, 2013 other than those which are reportable to the central government during the financial year 2021-22.

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.