Jasch Industries Ltd Directors Report.

Your Directors have pleasure in presenting the 34th Annual report and audited annual financial statements of the company for the financial year ended 31st March 2020.

1. Performance, Financial & Other Highlights

Your company has achieved sales of Rs. 129.64 crore during 2019-2020, which were 15% lower as compared with the sales of the previous year. The sales of Synthetic Leather Division at Rs. 94.52 crore were lower by 12.15% as compared with sales of Rs. 107.59 crores during the immediately preceding financial year. The sales of Electronic Gauge Division at Rs. 35.12 crore were 22.80% lower as compared those of immediately preceding financial year. Companys operating profit before interest, depreciation and income tax decreased by 24.95% to Rs. 11.55 crore during 2019-2020 as compared with Rs. 15.39 crore during the previous year, mainly due to loss arising out of full dis investment of shares by the company in its wholly-owned foreign subsidiary, which was earlier set up as a special purpose vehicle for business expediency, to explore the US market for companys products.

The net profit after interest, depreciation, income tax and deferred tax have decreased to Rs. 4.54 crore, which were 42.21% lower as compared with that of the previous year. Keeping in view prevailing sluggish market conditions resulting in stagnant sales & realization of Synthetic Leather, the management considers overall performance to be satisfactory. During the year, there has not been any change in nature of business of the company. The financial statements of the company have been audited by independent statutory auditors, who have previously subjected themselves to peer review. Their Audit report, which is annexed, is self-explanatory and does not contain any qualification, reservation, adverse remark or disclaimer calling for comments by the Board.

The financial highlights of company during the financial year ended 31st March 2020 on standalone basis are as under:

Particulars Current Year 2019 - 2020 Previous Year 2018-2019
Gross Income 13077.65 15453.23
Profit before interest and depreciation 1154.73 1539.22
Financial Charges 238.45 244.33
Gross Profit 2405.24 2755.64
Provision for Depreciation 296.25 297.24
Net profit before Tax 620.02 997.65
Provision for Tax (Net) & Deferred Tax 166.31 212.48
Net Profit after Tax 453.72 785.17
Balance of profit brought forward 4202.85 3417.68
Balance available for appropriation 4656.57 4202.84
Amount proposed to be carried to any Reserve
Transfer from General Reserve
Surplus carried to Balance Sheet 4656.57 4202.85

Towards the end of the financial year i.e. w.e.f. 24.03.2020, there has been disruption of production and other business activities due to Covid-19 pandemic and lock-down declared by the Central/State Governments and restrictive orders passed the district administration for movement of people in the District. The impact of this lock down during the last eight days of the financial year under report, although hurting, but was not material. However, continuity of this lock-down and associated disruption beyond the end of the financial year under report has had a material impact on the business of the Company. The Management has not proposed any dividend for the year ended on 31st March 2020 or transfer of any amount to reserve.

2. Material Changes and commitment, if any, after the date of financial statements, affecting the financial position of the company and Future Prospects

As mentioned above, the lock-down due to Covid-19 has continued into the next financial year (2020-21) as well. The fear associated with the pandemic, lock-down, travel restrictions, general economic gloom and reduced purchasing power of the consumer (due to layoffs, pay cuts and job losses), appear to have significantly changed consumer behavior. Your directors hope that this phase is temporary, and, like good times, this too shall pass. So as to avail of the limited opportunities that the were available to the Company to cut costs and be battle-ready, the Company substantially reduced its dependence on the bank for working capital requirement by paying off the entire amount of Rs. 1846 lakh (entire utilized amount out of sanctioned working capital limit of Rs. 2000 lakh) towards the end of the year, by encashing fixed deposits, thus saving interest cost. Further, your Company has developed PPE-grade coated fabrics for use as Personal Protection Equipment for medical staff.

Your directors believe that the things will soon start returning to normalcy, although with a snails speed, and the Company will be able to salvage some part of the situation in the later half of the financial year 2020-21. However, if these conditions of uncertainty do not change for a long time, these may result in reduced demand, substantially lower orders, order cancellations, adversely affect recovery of payments due to the Company, increased cost of raw material prices and sizeable lower production.

3. Changes among Directors & Key Managerial Personnel

During the year under report, while continuing to be a Director, Shri Manish Garg resigned as Executive Director w.e.f. 01.06.2019 on acquiring Maltese citizenship. Later, when he officially acquired Overseas Citizen of India status, he was appointed by the Board as Executive Director afresh w.e.f. 01.10.2019, subject to approval of the ensuing Annual General Meeting as to appointment and remuneration.

Ms. Neetu, was appointed by the Board as Independent Additional Director w.e.f. 01-09-2019 and she vacates office at the ensuing Annual General Meeting and is proposed to be appointed as Independent Director. In the opinion of the Board, she is a person of integrity, expertise and experience to hold this post. She has registered herself on Independent Directors Database vide registration No. IIDDB-DI-201912-003608 and is yet to pass the online proficiency self-assessment test conducted by Indian Institute of Corporate Affairs. Shri Ramnik Garg, a non-independent director retires by rotation at the ensuing Annual General Meeting. The Nomination & Remuneration Committee, which found their performance to be good, has recommended their appointment/ re-appointment as proposed in the accompanying notice of the Meeting and the Board recommends the same to the Annual General Meeting.

During the year under report, Dr. Shiv Kumar Khandelwal and Dr. Kailash Chandra Varshney, Independent Directors resigned on health grounds w.e.f. 15.06.2019 and 03.09.2019 respectively. Smt. Kamlesh Garg, a non-independent director resigned w.e.f. 15.06.2019 due to other commitments. The Board notes with appreciation their contribution to the Company during their respective tenures. Besides the above, there were no other changes in directors or Key Managerial Personnel.

4. Subsidiaries, Consolidated Accounts and materiality

Indev Gauging Systems Inc (INDEV), is a wholly owned foreign subsidiary of Jasch North America Co (JNAC) (the latter in turn being the wholly owned subsidiary of Jasch Industries Ltd "JIL"). Jasch Automation Ltd ("JAL") is the Indian subsidiary of the Company. All

Annual Report 2019-20 11 these entities existed as subsidiaries of the Company at the beginning of the Financial Year under report and none of these subsidiaries was a material subsidiary.

During the year, an application was made to Ministry of Corporate Affairs on 13.06.2019 seeking voluntary strike off of JAL from Register of Companies, it having performed no business activity since its inception.

JNAC being a special purpose vehicle, does not perform any business, except supporting INDEV by way of providing share capital or investment. On 30.06.2019, the JNAC sold its entire shareholding in INDEV and JIL disinvested its entire shareholding in JNAC and repatriated proceeds thereof. After this disinvestment, both JNAC and INDEV ceased to be subsidiaries of the Company. However, financial statements of JNAC as on 30.06.2019 and those of JAL as on 15.05.2019 have been consolidated with the financial statements of the Company (JIL) for the financial year ended on 31.03.2020.

As stated above, the Company no longer has any subsidiary as on 31.03.2020. Companys policy on materiality of subsidiaries is available at weblink https://www.jaschindustries.com/assets/img/ filingdisclosure/Mat subsd.pdf.

The Company did not have any joint ventures or associate companies either at the beginning or the end of the year.

5. Deposits

The Company neither held any deposits at the beginning of the year, nor did it accept any deposits during the year under report. Therefore, there was no occasion for any deposits to remain unpaid or unclaimed or in default for repayment of principal or interest thereon.

6. Internal Audit, Internal Financial Control Systems & Their Adequacy

The Company had engaged M/s AJMD & Associates, Chartered Accountants as Internal Auditors for the Financial Year 2019-20. The scope of their work includes review of processes for safeguarding the assets of Company, effectiveness of systems and processes and assessing the internal control strengths in all areas. Management is having tight control on all the operations of the Company. All expenses are scrutinized and approved by the top management. The Company has adequate system so as to have proper check and control on every department. Deviation from established system, if any are placed before Audit Committee of the Board for review and corrective action to be taken, if any.

7. Cost Audit & Cost Record

During the year, the Company was mandated to maintain cost records and also appoint cost auditors in respect of its products falling under CETA heading 3909 and 3921 (Plastics and Polymers). Accordingly, the Company duly maintained cost records and subjected these to cost audit which was conducted by Vipul Bhardwaj & Company, Cost & Management Accountants. Cost Audit Report, which is required to be submitted by the Cost Auditors to the Board of Directors within 180 days of close of financial year, has not been received yet.

8. Disclosure Pursuant To Section 22 of Sexual Harassment of Women At Workplace (Prevention, Prohibition & Redressal) Act, 2013

In accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, the Company has a policy on prevention of, and affirmative action for, sexual harassment of women, about which all the employees are communicated periodically. For this purpose, the Company has also constituted an Internal Complaints Committee. At the beginning or end of the financial year under report, no cases were pending and during the year, no cases were filed or disposed of under that Act.

9. Corporate Social Responsibility

In accordance with provisions of Section 134(3)(o), the Board set up a Corporate Social Responsibility (CSR) Committee which developed a Policy for carrying out activities which are as specified in

Schedule VII to the Companies Act, 2013. During the financial year 2019-20, the Company spent Rs. 17,16,820 on CSR activities, which amount is slightly more than 2% of Companys average profits of the preceding three years. Information required under Rule 8 and 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is given in the Annexure H to this report.

10. Particulars of Specified Employees

Details of employees whose particulars are required to be disclosed in the Directors Report pursuant to the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure C.

11. Board & Board Committee Meetings

The Board of Directors is the apex body constituted by shareholders for overseeing the Companys overall functioning. The Board provides and evaluates the Companys strategic direction, management policies and their effectiveness and ensures that stakeholders long-term interests are being served. The Chairman and Managing Director (CMD) provides overall direction and guidance to the Board.

The Board has constituted five Committees, namely Audit Committee, Nomination and Remuneration Committee, Finance Committee, CSR Committee, Stakeholders Relationship Committee and is empowered to constitute additional functional Committees from time to time, depending on business needs.

For statements on composition of the Board, Audit Committee, Nomination & Remuneration Committee ("NRC"), Stakeholders Relationship Committee and their Meetings held during the Financial Year under Report; Independent Directors, their brief resume, the declarations of Independence given by them and appointment of Key Managerial Personnel, please refer to Annexure A (Corporate Governance Report) and part B of Annexure C (Disclosures) which form an integral part of this Report. Terms and conditions of appointment of Independent Directors can be accessed from the website of the Company at the following web link : www.jaschindustries.com/Fillings & Disclosures/Appointment & Training of IDs. Details of Board and Committee Meetings held during the year under report are given in the annexed Corporate Governance Report.

12. Evaluation of Board, its Committees and individual Directors

Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the Board carries out periodic evaluation of its own performance, that of the directors individually as well as that of its Committees as per the criteria suggested by the Institute of Company Secretaries of India and adopted by the NRC and the Board, which includes knowledge of directors duties and responsibilities; understanding of Companys vision, mission, strategic plan and key issues, diligence and participation in Board, Committee and General Meetings, and leadership traits.

13. Companys Policy on Appointment and Remuneration and other matters relating to Directors

For a policy on Directors appointment, remuneration and criteria for determining their qualifications, positive attributes, independence and evaluation, required to be disclosed under Section 178(3) of the Companies Act, 2013 and under the Listing Regulations, please refer to Annexure B, which forms part of this Report.

14. Disclosure under Section 197(12) of the Act and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 Schedule V, Part II Section II

The requisite details relating to ratio of remuneration, percentage increase in remuneration, etc. of managerial personnel, as stipulated under the Section/Rules mentioned in the above sub-heading, are annexed as Annexure C to this Report which forms part of this Report. Disclosure pursuant to Schedule V, Part II, Section relating to remuneration and other details of directors are given in the attached Corporate Governance Report (Annexure A).

15. Financial Audit & Financial Auditors Report

M/s Mukesh A Mittal & Co., Chartered Accountants, who have subjected themselves to a peer review, have carried out statutory audit of Companys financial accounts during the financial year 2019-20. The report given by them (Auditors Report) is self-explanatory and does not contain any qualification, reservation, adverse remark or disclaimer. There is no matter reportable under Section 143(12) of the Companies Act, 2013.

16. Secretarial Audit & Secretarial Auditors report

During the financial year under report, the Company subjected itself to Secretarial Audit by Independent Secretarial Auditors, M/s Mukesh Arora & Co, Company Secretaries and their report in Form MR-3 is at Annexure D, which forms part of this Report.

17. Vigil Mechanism

In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company at www.jaschindustries.com under the link Filings & Disclosures/RPT, Vigil & Other Policies.

18. Risk management policy

A statement indicating business risks and the management policy to manage the risks, forms part of Management Discussion & Analysis Report attached with Directors Report.

19. Annual Return

In accordance with the amended provisions of Section 92(3) of the Companies Act, 2013, a copy of Annual Return, after the same has been filed with the Registrar of Companies, will be available at the website of the Company www.jaschindustries.com under the web-link "Filings & Disclosures". An extract of the same in Form MGT-9 is attached at Annexure J.

20. Loans, Guarantees and Investments

As required under Section 186 of the Companies Act, 2013, full particulars of loans and guarantees given, investments made and security provided during the year under Report are contained in the accompanying financial statements.

21. Related Party Transactions

On the recommendation of the Audit Committee, the Board of Directors of the Company has adopted a policy to regulate transactions between the Company and parties related to it. This Policy has been uploaded on the website of the Company at www.jaschindustries.com under the link Filings & Disclosures/RPT, Vigil & Other Policies.

All the related party transactions that were entered during the financial year were on arms length basis and were in the ordinary course of the business. The Audit Committee had granted prior omnibus approval to certain related party transactions and the same were subsequently placed before the Audit Committee on Quarterly basis for its approval or modification, as the case may be.

Disclosures pursuant to Section 188 of the Companies Act, 2013, Regulation 34(3) of Listing Regulations and other applicable provisions of laws are enclosed in Form AOC-2 as Annexure E and also by way to Notes to Financial Statements which may be read as part of the Directors Report.

There were no material related party transactions with the Companys Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company.

22. Corporate Governance Report & Certificate

The Company is committed to maintaining the highest standards of corporate governance and adhering to the corporate governance requirements set out by SEBI. Corporate Governance Report, together with requisite certificate from the Independent Statutory Auditors of the Company, confirming compliance with the conditions of corporate governance as stipulated under the Listing Regulations, is attached as Annexure A and forms an integral part of this Report.

23. Management Discussion and Analysis Report

For Management Discussion & Analysis Report, please refer to Annexure F, which forms a part of this Report.

24. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings & Outgo

Information required under section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is given in the Annexure G to this report.

25. ISO Certification

The Company has ISO 9001:2015 certification for Quality Standards, ISO 14001:2015 certification for environmental management systems and IATF certification for providing improved quality products to automotive customers worldwide.

26. Listing

The Equity Shares of the Company are listed on the BSE Ltd.

27. Other matters

No significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future.

28. Directors Responsibility Statement

Pursuant to Section 134 of the Companies Act, 2013, the Directors affirm that:

(i) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation, if any, relating to material departures;

(ii) Appropriate accounting policies had been selected and applied consistently, and judgments and estimates made were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2020 and of the profits of the Company for the year ended 31st March 2020.

(iii) Proper and sufficient care had been taken 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.

(iv) The annual accounts had been prepared on a going concern basis.

(v) Internal financial controls were laid down to be followed by the Company and such internal financial controls were adequate and were operating efficiently.

(vi) Proper systems had been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and were operating effectively.

28. Appreciation

Your directors wish to place on record their appreciation of the devoted services rendered by the workers, the staff, the executives of the Company, the professionals associated with the Company and for the continued support from the shareholders, the lenders and other stakeholders.

Place : Sonipat

Date : 13th June 2020

For & on behalf of the Board

(J.K.GARG) Chairman