Jet Freight Logistics Ltd Directors Report.

Dear Members,

The Directors have pleasure in presenting this 11th Annual Report on the affairs of the Company together with the Audited Statement of Accounts for the fi nancial year ended on 31st March, 2017.

FINANCIAL HIGHLIGHTS/PERFORMANCE OF THE COMPANY:

The fi nancial results for the year ended 31st March, 2017 and the corresponding fi gures for the last year are as under:- (Rs. in lakhs)

Particulars Financial Year 2016-2017 Financial Year 2015-2016
Total Income(Gross) 21677.49 20667.46
Less expenses 20774.22 20236.94
Profi t before interest, Depreciation and Tax 903.27 430.52
Less : Interest 226.71 211.34
Profi t before Depreciation and Tax 676.56 219.18
Less Depreciation 65.69 66.79
Profi t before Tax 610.87 152.39
Less : Provision for Taxation 222.02 56.85
Profi t after Tax 388.85 95.54
Add: Balance B/F from previous Year 259.32 163.78
Less: Income Tax Adjustments of prior years 81.97 -
Amount Available for Appropriation 566.20 259.32
APPROPRIATIONS:
Transfer to General Reserve Nil Nil
Balance carries to Balance Sheet 566.20 259.32

OVERVIEW OF AIR CARGO IN INDIA:

At its present, compounded annual rate of growth of 5.5 percent cargo demand in India is expected to boost the airfreight market to 2.8 million tons by 2018. The aggregate demand for air cargo, the analysts concluded, comes from a renewed emphasis on international trade over the last several years and regulations on the amount of foreign direct investment (FDI) allowed in Indias aviation sector.

The Indian governments FDI policies have been particularly favorable towards private participants entering the market "Major policies fueling market growth include the allowance for 100 percent FDI in existing airports and under automatic routes, as well as 100 percent tax exemption for airport projects for the next ten years.

The demand for air freight is limited by cost, typically priced 4–5 times more that of road transport and 12–16 times high that of sea transport. These values differ from country to country, season to season and from product to product and for different volumes also. Cargo shipped by air thus have high values per unit or are very time-sensitive, such as documents, pharmaceuticals, fashion garments, production samples, electronics consumer goods, and perishable agricultural and seafood products. They also include some inputs to meet just-in-time production and emergency shipments of spare parts. As the volume of air freight grows, there is a natural progression from passenger aircraft to chartered cargo planes of increasing size and ultimately to scheduled cargo services.

SNAP SHOT OF KEY FINANCIAL PARAMETERS:

Particulars 2015-16 2016-17
Growth in Revenue (%) 42.37 4.88
Growth in PAT (%) 31.29 289.13
Return on Capital Employed (%) 15.61 26.49
Return on Equity 14 27
Gearing Ratio (TIMES) 4.31 2.06
Interest Coverage Ratio (TIMES) 2.07 4.01
Yield per ton (Rs.) 4.58 5.27

During the fi nancial year ending March 31, 2017, the company has undergone several highs and lows due to various national and international events like Brexit and Demonetization having indirect impact on the logistics industry. Its fi nancial impact is evident in terms of almost fl at or marginal growth in revenue as compared to previous year. However, company revenue has shown compounded annual growth rate of 22% during Financial Year 2016-17.

Having said that, Jet Freight has been able to cross the hurdles and emerge with better fi nancials in terms of growth in PAT and improved EPS contributing to shareholders returns. Return on Capital employed has shown a healthy growth @ 26.49%, with the gearing ratio almost halved as compared to previous year. Long term debt ratio has reduced to 0.47 times in Financial Year 2016-17 as compared to 1.72 times in fi nancial year 2015-16. Having improved the margins and reducing the debts, your company had a situation of stretched working capital requirement which is evident from the increase in the interest outfl ow increase by approx. 10% as compared to the previous year.

TONNAGE IMPROVEMENT:

Your company carried 34,855 tonnes in the Financial year 2016- 2017 as compared to 29,835 tonnes in Financial year 2015-2016. There is a 16.83% growth in tonnage as compared to the previous year.

DEALING WITH BANKS AND FINANCIAL INSTITUTIONS:

In line with our fi nancial strategy, the management endeavored to shift its banking facilities from Shamrao Vittal Co-operative Bank Limited to Kotak Mahindra Bank Limited during the year for the better and smooth functioning of the company as the company is having various branch offi ces across the country. This yielded results in terms of company being able to access funds at lower cost and able to contain its fi nancial expenses in spite of increase in the utilisation of its working capital facility. Due to better negotiations with the bankers, the management has been able to get enhanced working capital limits by diluting the existing collateral. The bank was obliged to do it due to good fi nancial track record of the company and impressive fi nancial ratios of the previous years. Kotak Mahindra Bank Limited is also keen in supporting our future growth and would standby us in terms of their commitment to be a valued stakeholder of our company.

TRANSFER TO RESERVES:

The Company has made no transfer to reserves for the fi nancial year 2016-2017.

DIVIDEND:

During the financial year, the Directors have not recommended any divided, to strengthen the fi nancial position of the company.

EQUITY SHARE CAPITAL:

The Authorized Share Capital of the Company was increased from Rs. 4,00,00,000 to Rs. 6,00,00,000 w.e.f. July 01, 2016. The Paid–up Share Capital of the Company as on March 31, 2016 was Rs. 3,99,84,729/- comprising of 3,99,84,729 equity shares of Re. 1/- each. During the year under review, the Company have consolidated the face value of equity shares from Re. 1/- each to Rs.10/- each whereby the company then had a paid up share capital of 39,98,473 equity shares of R. 10/- each. Further, the Company have issued 14,52,000 Equity Shares of R. 10/- Each at Premium of Rs. 18/- per share to public through its maiden IPO.

BRIEF BACKGROUND ON THE INITIAL PUBLIC OFFER OF THE COMPANY:

The company entered the capital market with its maiden initial public offering (IPO) of 14,52,000 equity shares of face value of Rs. 10/- and at a premium of Rs. 18/- per share, aggregating to Rs. 4,06,56,000, by diluting 26.64% of promoters shareholding. The issue opened for subscription on November 24, 2016 and closed on November 28, 2016 .The equity shares have been listed on the SME Emerge Platform of National Stock Exchange of India Ltd (NSE) w.e.f. December 06, 2016. Consequently, the Companys paid up share capital has increased from Rs. 3,99,84,730/- to Rs. 5,45,04,730/-.

Your Directors are pleased to inform that the Initial Public Offering (IPO) of the Company was fully subscribed with an over-subscription to the extent of 5 times over the issue size.The response from investors was really very encouraging.

Its debut on the NSE Emerge platform on December 06, 2016 also met with the similar response by way of share price hitting the upper circuit of 5% in the opening session of the stock exchange.

Further, as per The Economic Times, survey indicates that Jet Freight IPO has been rated as the second best IPO in terms of return over the issue price as compared to other IPO during the fi nancial year.

DEPOSITORY SYSTEM:

The Companys equity shares are available for dematerialization through National Securities Depository Limited and Central Depository Services India Limited.

CHANGE IN THE NATURE OF BUSINESS:

During the year under review, there were no material changes in the nature of business of the company.

DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL:

3 The Composition of Board of Directors and the details of Key Managerial Personnel for the Financial Year 2016-2017 are as follows:

Name of the Person Category With effect from and Tenure
1 Mr. Richard F Theknath Managing Director & Key Managerial Personnel 20.06.2016 – for a period of 5 years
2 Mr. Dax F Theknath Whole-Time Director & Key Managerial Personnel 20.06.2016 – for a period of 5 years
3 Mrs. Agnes F Theknath Non -Executive Director 26.09.2012
4 Mr. Nikhil Sunil Arya Independent Director 25.07.2016 – for a period of 5 years.
5 Mr. Pankaj Gupta Kumar Independent Director 25.07.2016 – for a period of 5 years.
6 Mr. Jabir S Contractor Chief Financial Offi cer (Key Managerial Personnel) 25.07.2016 – for a period of 5 years.
7 Ms. Shraddha P Mehta Company Secretary & Compliance Offi cer (Key Managerial Personnel) 19.07.2016

3 Retire by Rotation:

Pursuant to the provisions of section 152 of the Companies Act, 2013, the offi ce of Mr. Richard F Theknath, (DIN: 01337478) Director is liable to retire by rotation at this Annual General Meeting, and being eligible, he has offered himself for re-appointment. Accordingly, the proposal for his re-appointment has been included in the Notice convening the Annual General Meeting of the Company.

A brief resume of directors seeking appointment/re-appointment consisting nature of expertise in specifi c functional areas and name of companies in which they hold directorship and/or membership/ chairmanships of committees of the respective Boards, shareholding and relationship between directorship inter-se as stipulated under Reg. 36(3) of the SEBI (LODR) Regulations, 2015, are given in the section of notice of AGM forming part of the Annual Report.

COMMITTEES OF THE BOARD:

I. The Board has constituted various committees in accordance with the provisions of the Companies Act, 2013, the details of which are given as under:

1. Audit Committee,

2. Nomination and Remuneration Committee,

3. Stakeholders Relationship Committee.

1. Audit Committee :

The Company has constituted an Audit Committee, as per the provisions of Section 177 of the Companies Act, 2013, vide resolution passed in the meeting of the Board of Directors held on July 25, 2016.

The committee presently comprises the following three (3) directors:

Composition of Audit Committee:

Name of the Director Status Nature of Directorship
Mr. Pankaj Gupta Kumar Chairman Non-Executive & Independent Director
Mr. Nikhil Sunil Arya Member Non-Executive & Independent Director
Mr. Richard Francis Theknath Member Managing Director

The term of reference of Audit Committee includes:

3 Oversight of the Companys fi nancial reporting process and the disclosure of its fi nancial information to ensure that the fi nancial statement is correct, suffi cient and credible,

3 Recommendation for appointment, remuneration and terms of appointment of auditors of the Company,

3 Reviewing and monitoring the auditors independence and performance, and effectiveness of audit process,

3 Scrutiny of related party transactions and inter-corporate loans and investments,

3 Reviewing the adequacy of internal audit function

3 Reviewing with the management, the annual fi nancial statements and auditors report thereon before the same are forwarded to the board for approval, with primary focus on; i. Matters required to be included in the directors responsibility statement to be included in the boards report in terms of clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013,

ii. Changes, if any, in accounting policies and practices and reasons for the same,

iii. Significant adjustments made in the fi nancial statements arising out of audit fi ndings, iv. Disclosure of any related party transactions,

v. Modifi ed opinion(s) in the draft audit report.

During the fi nancial year 2016-2017, the Audit Committee of the Board of Directors met Four times viz. on 31.08.2016, 06.10.2016, 28.01.2017, 30.03.2017.

2. Nomination and Remuneration Committee

The Company has constituted a Nomination and Remuneration Committee. The constitution of the Nomination and Remuneration Committee as per the provisions of Section 178 of the Companies Act, 2013 was approved by a Meeting of the Board of Directors held on July 25, 2016.

The Board has framed the Nomination & Remuneration Committee which ensures effective compliances as mentioned in section 178 of the Companies Act 2013. The defi ned terms of reference for the Nomination & Remuneration Committee are as follows;

3 Formulation of the criteria for determining qualifi cations, positive attributes and independence of a director and recommend to the board of directors a policy relating to, the remuneration of the directors, key managerial personnel and other employees of the Company;

3 Formulation of criteria for evaluation of performance of independent directors and the board of directors of the Company;

3 Devising a policy on diversity of Board of Directors;

3 Identifying persons who are qualifi ed to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the board of directors their appointment;

3 Whether to extend or continue the term of appointment of the independent director, on the basis of the report of performance evaluation of independent directors.

Composition of Nomination and Remuneration Committee:

Name of the Director Status Nature of Directorship
Mr. Pankaj Gupta Kumar Chairman Non-Executive & Independent Director
Ms. Agnes Francis Theknath Member Non-Executive Director
Mr. Nikhil Sunil Arya Member Non-Executive & Independent Director

During the fi nancial year 2016-2017, the Nomination and Remuneration Committee of the Board of Directors met Two times viz. on 31.08.2016 and 30.03.2017.

3. Stakeholders Relationship Committee

The Company has constituted a Stakeholders Relationship Committee to redress the complaints of the shareholders. The Stakeholders Relationship Committee was constituted as per the provisions of Section 178(5) of the Companies Act, 2013 vide resolution passed at the meeting of the Board of Directors held on October 23, 2016.

Composition of Stakeholders Relationship Committee:

Name of the Director Status Nature of Directorship
Ms. Agnes Francis Theknath Chairperson Non-Executive Director
Mr. Nikhil Sunil Arya Member Non-Executive & Independent Director
Mr. Dax Francis Theknath Member Whole-Time Director

The Stakeholders Relationship Committee shall oversee all matters pertaining to investors of our Company.

The Committee had delegated the power of Share Transfer to Registrar and Transfer Agent, who processes the transfers. The Committee also considers and resolves the grievances of the security holders of the listed entity including complaints related to transfer of shares, non-receipt of annual report and non-receipt of declared dividends and looks after the performance of the Registrar and Transfer Agent of the Company and recommends measures for overall improvement in the quality of investor services.

II. The Board constitutes additional functional committees, from time to time, depending upon the business needs. MATERIAL CHANGES BETWEEN THE DATE OF THE BOARD REPORT AND END OF FINANCIAL YEAR:

The following activities have been carried out by the Company from the end of the Financial Year till the date of signing of the Directors Report affecting the fi nancial position of the Company detailed as under -:

1. In addition to above fi nancial facility, our Company has availed term loan of Rs. 4,05,00,000 from Kotak Mahindra Bank Limited to fi nance the purchase of Offi ce premises of the Company.

2. The Company has availed a Vehicle Loan facility of Rs. 10,50,000 from HDFC Bank Limited for meeting the cost of acquiring Honda CRV repayable in equated monthly installments not exceeding 36 months.

VIGIL MECHANISM:

A fraud and corruption free environment in a company is the objective and in view of that, a Vigil Mechanism (Whistle Blower) Policy has been adopted by the Board for directors and employees, which is uploaded on the website of the company www.jetfreight.in pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013. No complaint of this nature has been received by the Audit Committee during the year under review.

EXTRACT OF THE ANNUAL RETURN IN FORM MGT-9:

Pursuant to section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014 is annexed herewith in Annexure-A.

SUBSIDIARY COMPANY:

As on March 31, 2017, there were no subsidiaries of the company, hence this clause is not applicable.

STATUTORY AUDITOR.

At the AGM of the company held on 30th September 2014, M/s. S. C. Mehra & Associates., Chartered Accountants, Statutory Auditors of the Company having registration number (ICAI Firm Registration No. 106156W, were appointed for a term of fi ve years i.e. till the conclusion of 13th Annual General Meeting subject to ratifi cation of their appointment at every Annual General Meeting. The resolution for ratifi cation of their appointment is placed for approval of members of the Company at the ensuing Annual General Meeting. The Company has received a certifi cate from the statutory auditors confi rming that they are eligible for ratifi cation of their appointment.

AUDITORSS REPORT:

The report of the Statutory Auditors on Standalone Financial Statements forms a part of the Annual Report. There are no specifi cations, reservations, adverse remarks on disclosure by the Statutory Auditors in their report. They have not reported any incident of fraud to the Audit Committee of the Company during the year under review.

SECRETARIAL AUDITOR:

Pursuant to Section 204 of Companies Act, 2013, the Board of Directors had appointed M/s Parikh & Associates, Practicing Company Secretaries, Mumbai to undertake the Secretarial Audit of the Company. The Secretarial Auditors Report is attached to this report as Annexure- B. The response from the Management is that the Company consolidated its Equity Share Capital from Re 1/- each into a share of Rs. 10/- each with shareholders approval by virtue of which one share got rounded off.

INTERNAL FINANCIAL CONTROL WITH REFERENCE TO FINANCIAL STATEMENTS

The Company has adequate fi nancial control procedure commensurate with its size and nature of business. These controls include well defi ned policies, guidelines, standard operating procedure, authorization and approval procedures. The internal fi nancial control of the company are adequate to ensure the accuracy and completeness of the accounting records, timely preparation of reliable fi nancial information, prevention and detection of frauds and errors, safeguarding of the assets, and that the business is conducted in an orderly and effi cient manner.

DEPOSITS:

The Company has not invited/ accepted any deposits from the public during the year ended March 31, 2017. Hence, there were no unclaimed or unpaid deposits as on March 31, 2017.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE:

During the year under review, there has been no such signifi cant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future.

CORPORATE SOCIAL RESPONSIBILITY:

Since Section 135 of Companies Act 2013 and Rules made there under is not applicable, hence no meetings were conducted during the year.

NUMBER OF MEETING OF THE BOARD:

During the fi nancial year 2016-2017, the Board of Directors met Thirteen times viz. on 31.05.2016, 20.06.2016, 27.06.2016, 25.07.2016, 01.08.2016, 31.08.2016, 21.09.2016, 06.10.2016, 23.10.2016, 11.11.2016, 14.11.2016, 09.02.2017, 30.03.2017.

THE NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE FINANCIAL YEAR 2016-2017:

The Company does not have any Subsidiaries, Joint Ventures or Associate companies during the fi nancial year 2016-2017.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement under section 134(3)(c) of the Companies Act, 2013 with respect to Directors Responsibility Statement, it is hereby confi rmed that: (i) in the preparation of the annual accounts for the fi nancial year ended 31st March, 2017, the applicable accounting standards read with requirements set out under Schedule III to the Act have been followed along with proper explanation relating to material departures; (ii) the Directors 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 the company as at March 31, 2017 and of the profi t and loss of the company for that period; (iii) the Directors have taken proper and suffi cient 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; (iv) the Directors have prepared the annual accounts on a going concern basis; (v) the Directors have laid down internal fi nancial controls to be followed by the company and that such internal fi nancial controls are adequate and were operating effectively.

(vi) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

RISK MANAGEMENT:

The Company has developed and implemented a Risk Management Policy which identifi es major risks which may threaten the existence of the Company. The same has also been adopted by our Board and is also subject to its review from time to time. Risk mitigation process and measures have been also formulated and clearly spelled out in the said policy.

A STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION (6) OF SECTION 149 OF THE COMPANIES ACT, 2013:

The Company has received necessary declarations from Mr. Nikhil S Arya and Mr. Pankaj Gupta Kumar, Independent Directors of the company pursuant to the requirement of section 149(7) of the Companies Act 2013, that they fulfi ls the criteria of independence laid down in section 149(6) of the Companies Act 2013.

COMPANYS POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF A DIRECTOR AND OTHER MATTERS PROVIDED UNDER SUB-SECTION (3) OF SECTION 178: A policy known as "Appointment criteria for Directors & Senior Management and their Remuneration Policy" approved by the Nomination and Remuneration Committee and Board is followed by the Company on remuneration of Directors and Senior Management employees as required under Section 178(3) of the Companies Act, 2013 and Rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014. The Policy aims at attracting and retaining high caliber personnel from diverse educational fi elds and with varied experience to serve on the Board for guiding the Management team to enhanced organizational performance.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient under the provisions of Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014 amended from time to time, are forming part of the notes to the fi nancial statements provided in this Annual Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SUB-SECTION (1) OF SECTION 188 OF THE COMPANIES ACT, 2013:

The particulars of material contracts or arrangements made with related parties referred to in section 188(1) of the Companies Act 2013, in the prescribed form AOC-2 is appended as ‘Annexure C to the Boards Report.

PARTICULARS OF EMPLOYEE:

Details in terms of the provisions of Section 197 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration) Rules 2014, the names and other particulars of the employee are appended as ‘Annexure D to the Boards Report. The ratio of remuneration of each Director to the median employees remuneration and other details in terms of Section 197(12) of the Companies Act, 2013 read along with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed herewith as ‘Annexure D and forms part of this Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 for the year ended March 31, 2017 is given below:

A. Conservation of Energy: i) The steps taken or impact on conservation of energy:

The operations of the Company do not involve high energy consumption. However, the Company has for many years now been laying great emphasis on the Conservation of Energy and has taken several measures including regular monitoring of consumption, implementation of viable energy saving proposals, improved maintenance of systems etc.

ii) The steps taken by the Company for utilizing alternate sources of energy: Nil

iii) The capital investment on energy conservation equipments: Nil B. Technology Absorption:

i) The efforts made towards technology absorption : Nil

ii) The benefi ts derived like product improvement, cost reduction, product development or import substitution: Nil iii) In case of imported technology (imported during the last three years reckoned from the beginning of the Financial Year): a) the details of technology

b) the year of Import

c) whether the technology been fully absorbed

d) If not fully absorbed, areas where this has not taken place, reasons therefore and future plan of action iv) The expenditure incurred on Research and Development during the year included in the manufacturing cost.- Nil C. Foreign Exchange Earnings and Outgo:

Particulars 2016-2017 2015-2016
Foreign Exchange Earnings 46,00,301 1,01,15,787
Foreign Exchange outgo 88,92,344 1,34,86,585

FORMAL ANNUAL EVALUATION MADE BY THE BOARD OF ITS OWN PERFORMANCE AND THAT OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS:

Pursuant to Section 134(3) read with Rule 8(4) of the Companies (Account) Rules, 2014 & Section 178(2) of the Companies Act, 2013, a formal annual evaluation needs to be conducted by the Board of its own performance and that of its committees and individual directors. Schedule IV to the Companies Act 2013 states that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the Director being evaluated.

The Board based on evaluation criteria recommended by the ‘Nomination and Remuneration Committee and ‘Code for Independent Directors evaluated the performance of Board members. The Board after due discussion and taking into consideration of the various aspects such as Knowledge and skills, Competency, Financial literacy, Attendance at the Meeting, Responsibility towards the Board, Qualifi cations, Experience, Fulfi llment of functions assigned to him, Ability to function as a team, Initiative Availability & Attendance, Commitment, Contribution; expressed their satisfaction with the evaluation process and performance of the Board.

DISCLOSURES UNDER THE SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has been employing women employees in various cadres within its Registered Offi ce, Corporate offi ce and its Branches. The Company has in place a policy against Sexual Harassment in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint Committees is set up to redress complaints if received and are monitored on regular basis. During the year under review, Company did not receive any complaint regarding sexual harassment.

REVIEW OF A STATEMENT ON THE USAGE OF THE PROCEEDS OF THE ISSUE:

Pursuant to Reg. 32 of SEBI (Listing Obligation & Disclosure Requirements) Regulations, 2015, Our Company have submitted the below statement to National Stock Exchange of India Limited (NSEIL) after reviewing it, indicating category wise variation between projected utilization of funds made by it in its offer document (Prospectus) and the actual utilization of funds.

The statement below, indicates that the issue proceeds have been fully utilized and the purposes for which these proceeds were raised through an Initial Public Offer (IPO) has been achieved. The objects of the issue as stated in the prospectus are; to meet the working capital requirements of the Company and issue expenses. The proceeds of the issue has not been used for the purposes or objects other than those mentioned in the offer document or prospectus of the company.

A statement showing utilization of IPO proceeds was placed for review before the Audit Committee held on April 26, 2017 for the period 06.12.2016 (Companys listing date on NSE-Emerge Platform) to 31.03.2017 which was certifi ed by Mr. S. C. Mehra, Partner of M/s. S. C. Mehra & Associates, Statutory Auditors of our Company, as detailed herein below:

(Rupees In Lakhs)

Particulars As per Prospectus Actual Expenses Variation, if any*
Issue Expenses 36.00 45.12 9.12
Working Capital Margin 370.56 361.44 (9.12)
Amount Received as Proceeds of the Issue 406.56 406.56 Nil

*In terms of the fi nal prospectus fi led for IPO, any variations in the actual utilization of funds allocated for the purposes set forth, increased fund requirements for a particular purpose may be fi nanced by surplus funds, if any, available in respect of the other purposes for which funds are being raised in this Issue. Accordingly, variation among the actual expenses is adjusted among the various heads.

The reason for the variation in the proceeds of the issue within the category of the "Objects of the Issue" as mentioned in the Prospectus is that, the issue expenses as envisaged at the time of coming out with an IPO got underestimated and hence the additional expenses was required to be funded by drawing from Working Capital Margin.

AWARDS & ACHIEVEMENTS:

Your Company has a long list of Awards and Recognition from the Airlines during its long legacy of three decades. Company has been felicitated at various forums by valuable stakeholders in the business. To highlight a few of its achievements during the Financial Year 2016-17, a list is as given below:

Airline Awarded for Year
1 Air-India 1st Rank-Intl Perishable Cargo Agent 2016 - 2017
2 Emirates Top Cargo Agent 2016 - 2017
3 Emirates Certifi cate of Appreciation 2016 - 2017

Given below is the list of few of our esteemed business partners with whom the business volumes have increased as compared to previous year.

Airline FY 2016-2017 FY 2015-2016 Growth in Volumes
(tonnes) (tonnes)
Air India Ltd. 6408 1430 348%
Jet airways 8916 4973 80%
Emirates 9195 9104 1%

NEW LOOK OF COMPANY LOGO:

We are pleased to inform that since the company has embarked on its new journey by going public and increasing its stakeholders and turning a new leaf in its history, a fresh look has been designed for its logo. Thus giving the company a new tag line which is more in line with its long practise philosophy i.e. reliability and trusted business partner.

IMPACT ANALYSIS OF MAJOR EVENTS DURING THE YEAR ON THE COMPANY PERFORMANCE:

CONSEQUENCE OF BREXIT ON INDIAN EXPORTS:

Jet Freight has got some of its major revenue contributing customers exporting their products to United Kingdom. Brexit was an event which had its ripple effects on the Indian economy. More so in the case of exports as UK is a very major market for Indian exports. Indias major exports to Britain includes apparels, pharmaceuticals, automobiles etc.

With the advent of Brexit and the consequential devaluation of pound impacted the Indian exporters fraternity very adversely. As a result, shippers to UK either curtailed their exports to UK and those already exported to UK before the Brexit were facing a huge dip in their realization due to devlaution of pound. These two things combined added to the exporters woes. Thus your company was having a double impact due to exports being curtailed by the exporter and the exporters whose shipment was already done prior to the Brexit were sitting on a huge conversion loss. Hence the payment cycle to the company got slowed down.

As mentioned earlier that due to a good banking relationship with the bankers, the company was able to tide over this slow down in realisations and come out of this event unscrathed.

CONSEQUENCE OF DEMONETISATION UNDERTAKEN BY GOI:

In the wake of the demonetisation drive conducted by the Governemnt from 9 November 2016, banning 500 and 1000 rupee notes, took the entire country by storm as the event had a long lasting impact on the Indian economy post Novemebr 09,2016. Businesses across the length and breath of the country got crippled due to scarcity of new notes and the trade got hampered. Farm produced got decayed at various places due to non-availability of transportation facility. Agri products were struggling to reach the markets from where it could be further shipped. It took a long time for the traders and the logistics industry to come to terms with the alternative terms of payment other then cash as promoted by the GOI. In the interveninig period, exports plus the local trade got badly affected and the consequential impact could be felt on the company business. Our business survived that shock also.

FALL IN INTERNATIONAL OIL PRICES AND USD DEVALUATION

With the fall in the oil prices and devaluation of USD against INR has been taking its toll on the export business from India. Any further fall in the USD shall eat into the margin of the exporters and can give an adverse push to the growth of the industry.

FUTURE BUSINESS PROSPECTS:

Capacity growth in the Airline industry is resulting in a lot of cargo capacity coming into the market. According to Cargo Facts, air freight transported in the belly of passenger airlines accounted for 13.6 percent of total cargo in 2015, up from 11.7 percent in 2009. These wide body passenger aircraft are operating increased frequencies (i.e., carrying more capacity) on some of the most lucrative trade routes. While carrying cargo on passenger airlines is helping the fi nancial performance of those airlines, it is leading to falling pricing power for cargo carriers and lower cargo yields. This is further fuelled by the increase in wide body passenger jets and the belly space, these aircraft provide for hauling freight. Yields have fallen with capacity continuing to grow and demand falling, analysts expect that it could take time for freight yields to rebound.

THE RISE OF E-COMMERCE

Traditional freight traffi c continues to make up the bulk of freight transported by air; and while this remains subdued, theres growth in other segments of the air freight industry. One of these areas is e-commerce, which includes the sales of goods and services through the Internet via any device regardless of the method of payment or fulfi llment (e-commerce excludes travel and event ticket sales over the Internet). Strong consumer demand and buying habits are mitigating some of the negative effects of the recent industrial recession and slowing international trade, with e-commerce becoming a growing driver of the air cargo industry.

Distributing all of these vastly different products overnight or within two-day time frames is forcing many air cargo companies to adapt to a new business model. Success in this sector hinges not only on the ability to adjust to changing customer requirements but also to compete effectively with customers that rely on the signifi cant belly space of wide body passenger fl eets.

The air cargo segment is a wide-ranging industry with various types of operators, each fi lling a particular niche of freight demand. As the market changes with less international trade and more regional delivery, these niches may evolve as well.

Your Company has also taken a leap into domestic freight forwarding in view of the increase demand of logistics by the e-commerce companies in India. E-commerce trade is growing exponentially in India and with the kind of demand generated by e-commerce companies there exists a lot of space for the freight forwarders to add value by being their valued service providers. With the Government of India (GOI) open sky policy, many private airlines have forayed into the Aviation industry and the existing airlines are also increasing their fl eet size to accommodate the passenger air traffi c growth in India. With the increase in the number of regional air ports under the Regional Connectivity Scheme (RCS) scheme of GOI and the Ude Desh ka Aam Naagrik (UDAN) policy implemented by the govt we would witness the jump in the air travel industry growth. Even foreign airlines are eyeing stake in the Indian aviation industry in order to reap the benefi t of growth in future. This is an encouraging sign of growth for our company.

IMPACT OF GST ON FREIGHT INDUSTRY:

GST is going to be a game changer for the Indian Economy whereby there would be "ONE TAX ONE NATION" concept that would be put to practise by the GOI. This indirect tax reform shall have profounding impact on the way business is conducted in the entire nation.

As a precursor to the GST all the sectors of the economy are doing the impact assessment due to the coming of the GST. Different sectors are going to be impacted and so is the logistics industry. As per the notifi cations put up by the GST council so far the Air freight activity is chargeable to tax under GST regime @18%, which was under negative list under the existing Service tax regime. Hence under the current system Air freight was totally exempt from Service Tax. This change shall adversely impact the freight forwarding as well as the export industry. Going by this the freight forwarders as well the exporters shall feel a stretched in their working capital requirements. The levy of 18% shall add to exporters cash outfl ow with the consequential adverse impact on our payment cycle. The company shall endeavour to re-negotiate the terms of its payment with the exporters so that statutory liability of GST can be met on time. Having said this, the company shall have to pay 18% GST on air freight to all the Airlines for which it can claim set-off.

ACKNOWLEDGEMENTS

Your Directors take this opportunity to place on record their appreciation and sincere gratitude to the Government of India, Government of Maharashtra, Bankers to the Company, the Airlines, customer, its employees/consultants for their valuable support and look forward to their continued co-operation in the years to come.

Your Directors acknowledge the support and co-operation received from the employees and all those who have helped in the day to day management.

For and on behalf of the Board of Directors

For JET FREIGHT LOGISTICS LIMITED

Richard Theknath Dax Theknath
Managing Director Whole-time Director
DIN : 01337478 DIN: 01338030

Place: MUMBAI

Dated: 29.05.2017