Josts Engineering Company Ltd Directors Report.

The Directors present herewith Annual Report together with the Audited Financial Statements for the year ended 31st March, 2020.

Year ended 31-3-2020 Previous Year ended 31-3-2019
Rs. lakhs Rs. lakhs
1. Standalone Financial Results
Profit/(Loss) before exceptional items and Tax 541.46 363.29
Exceptional Items 383.77 -
Profit Before tax 157.69 363.29
Less: Tax Expense:
Current Tax 76.22 75.38
Deferred Tax (10.68) (134.15)
Short/(Excess) Provision for Income tax of (11.89) 10.80
earlier years
Profit/(Loss) after tax 104.04 411.26
Balance brought forward from previous year 1257.35 868.58
Amount available for appropriation 1361.39 1279.84
Less: Dividend paid during the year 27.98 18.66
Dividend distribution tax paid during the year 5.75 3.83
General Reserve - -
Balance carried forward 1327.66 1257.35
========= ==========

2. Dividend

The Directors are pleased to recommend a dividend of Rs. 3/- per share (30%) on Equity Shares of Rs.10/- each for the year ended 31st March, 2020.

3. Operations:

Income for the year under review, was Rs. 10,355.92 Lakhs as against Rs. 10,745.08 Lakhs in the previous year. The profit before tax was Rs. 157.69 Lakhs as against Rs. 363.29 Lakhs in the previous year. Generally, business should continue to progress. Barring unforeseen circumstances, there should be improved results in the current financial year 2020-21.

4. Performance of Subsidiary Company MHE Rentals India Private Limited.

This Subsidiary is engaged in equipment rental business. For the year ended 31st March, 2020, the turnover was Rs. 1228.39 lakhs as against Rs. 912.45 Lakhs in the previous year, the loss for the year ended 31st March, 2020 was Rs. 78.28 lakhs as against loss of Rs. 97.92 Lakhs in the previous year.

5. Consolidated Financial Statements

The Consolidated Financial Statements of the Company are prepared in terms of requirement of Companies Act, 2013 and in accordance with the relevant Indian Accounting Standards issued by the Institute of Chartered Accountants of India and forms an integral part of this Report.

Pursuant to Section 129(3) of the Companies Act, 2013, read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of Subsidiaries / Associate Companies / Joint Ventures is given in Form AOC – 1, which is attached to the Financial Statements of the Company.

6. Material Subsidiary

MHE Rentals India Private Limited is a Material Subsidiary of the Company as per the threshold laid down by the SEBI (Listing Obligations Disclosure Requirements) Regulations, 2015, as amended. The Board of Directors of the Company has approved a policy for determining material subsidiaries which is in line with the SEBI (Listing Obligations Disclosure Requirements) Regulations, 2015, as amended from time to time. This policy has been approved by the Board of Directors of the Company, effective from 1st April, 2019. The policy has been uploaded on the companys website at (www.josts.com).

7. Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo.

Information pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is annexed as Annexure "A" to the Directors Report.

8. Directors Responsibility Statement

Pursuant to Section 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge, state and confirm:

( I) that in the preparation of the Annual Accounts for the year ended 31st March, 2020, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

( II) 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 31st March, 2020 and of the profit of the Company for the year ended on that date;

( III) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

( IV) the annual accounts have been prepared on a going concern basis;

( V) that the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

9. Particulars of employees

The information pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is not given as no employee, employed throughout the financial year 2019-20, was in receipt of the remuneration of Rs.102 lakhs or more and no employee, employed for the part of the financial year 2019-20 was in receipt of remuneration of Rs.8.50 lakhs or more per month.

10. Extract of Annual Return

The extract of the Annual Return in Form MGT-9 as provided under sub-section (3) of Section 92 of the Companies Act, 2013, is annexed as Annexure "B" to the Directors Report.

11. Deposits

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

12. Particulars of Loans, Guarantees and Investments

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013, have been disclosed in the Financial Statements at the appropriate places.

13. Code of Conduct (Code) for Board Members and Senior Management

The Company has adopted, the Code for enhancing further ethical and transparent process in managing the assets and affairs of the Company. This Code has been posted on the website of the Company (www.josts.com).

14. Vigil Mechanism / Whistle Blower Policy

In compliance with the provisions of Section 177 of the Companies Act, 2013, and Rule 7 of the Companies (Meetings of Board and its powers) Rules, 2014, the Company has established Vigil Mechanism / Whistle Blower Policy to encourage Directors and Employees of the Company to bring to the attention of any of the following persons, i.e. the Chairman of the Audit Committee, Company Secretary and HR Head, the instances of unethical behavior, actual or suspected incidence of fraud or violation of the Code of Conduct for Directors and Senior Management (Code) that could adversely impact the Companys operations, business performance or reputation. The Policy and the Code has been posted on the website of the

Company (www.josts.com).

15. Risk Management Policy

The Company has developed and implemented, a Risk Management Policy in compliance with the provisions of Section 134 (3) (n) of the Companies Act, 2013.

Risk Management is an organization-wide approach towards identification, assessment, communication and management of risk in a cost-effective manner – a holistic approach to managing risk. Generally, this involves reviewing operations of the organization, identifying potential threats to the organization and the likelihood of their occurrence and then making appropriate actions to address the most likely threats.

The Policy provides for constitution of Risk Management Core Group (RMCG) consisting of Functional / Departmental / Product line heads and headed by Chairman of the Company.

The RMCG shall be collectively responsible for developing the Companys Risk Management principles and Risk Management expectations, in addition to those specific responsibilities as outlined in the Policy. The RMCG will provide updates to the Audit Committee and Board of Directors of the Company on key risks faced by the Company, if any, and the relevant mitigant actions.

The major risks such as Operational Risk, Financial Risk, External Environment and Strategic Risk have been identified and the Risk Management process has been formulated.

The Risk Management Policy has been posted on the website of the Company (www.josts.com).

16. Nomination and Remuneration Policy

Pursuant to the provisions of Section 178 of the Companies Act, 2013, the Nomination and Remuneration Committee has framed Nomination and Remuneration Policy (the Policy). The Policy applies to the Board of Directors, Key Managerial Personnel and the Senior Management Personnel. The Policy lays down criteria for selection and appointment of Board Members, Key Managerial Personnel and Senior Management Personnel and also lays down a framework in relation to remuneration of the aforesaid persons.

The Nomination and Remuneration Policy has been posted on the website of the Company (www.josts.com).

17. Prevention of Sexual Harassment

The Company has constituted an "Internal Complaints Committee" in compliance with the Sexual Harassment of Women at work place (Prevention, Prohibition and Redressal) Act, 2013.

During the year under review, no complaints of Sexual Harassment were reported to the Board.

18. Committees of the Board

The Board of Directors have constituted the following Committees in compliance with the

Companies Act, 2013.These Committees deal with specific areas and activities which concern the Company.

(I) Audit Committee Mr. F. K. Banatwalla - Chairman
Mr. Shailesh Sheth - Member
Mr. Jai Prakash Agarwal - Member
(II) Nomination and Remuneration Mr. Shailesh Sheth - Chairman
Committee Mr. Marco Wadia - Member
Mr. F. K. Banatwalla - Member
(III) Share Transfer and Stakeholders Mr. Shailesh Sheth - Chairman
Relationship Committee Mr. F. K. Banatwalla - Member
Mr. Jai Prakash Agarwal - Member

19. Independent Directors Meeting

During the year under review, the Independent Directors had a separate Meeting on 6th February, 2020, and have inter-alia, reviewed the performance of non-independent directors, the performance of the Chairperson of the Company, and assessed the quality, quantity and timeliness of flow of information between the management and the Board so as to enable the Board to effectively and reasonably perform their duties.

20. Meetings of the Board

During the year under review, 4 Board Meetings and 7 Committee Meetings were convened and held. The details of the same forms a part of the Corporate Governance Report.

21. Performance Evaluation

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations Disclosure Requirements) Regulations, 2015, the Board of Directors of the company at its meeting held on 6th February, 2020 has evaluated the performance of the Independent Directors, Committees of the Board and the Board as a whole and found the performance to be satisfactory.

The Nomination and Remuneration Committee at its meeting held on 6th February, 2020 evaluated the performance of the Vice Chairman and Managing Director and found the performance to be satisfactory.

22. Related Party Transactions

The Company has formulated a Policy on Related Party Transactions and manner of dealing with related party transactions which is available on the Companys website www.jost.com.

All related party transactions entered into during FY 2019-20 were on an arms length basis and in the ordinary course of business. No material related party transactions were entered into during the financial year 2019-20. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable to the Company.

23. Auditors

( I) Statutory Auditors

M/s. Singhi & Co., Chartered Accountants, (Firms Registration No. 302049E) was appointed as the Statutory Auditors of the Company, at the 110th Annual General Meeting, held on 20th July, 2017 to hold office, from the conclusion of the 110th Annual General meeting till the conclusion of the 115th Annual General Meeting, subject to ratification by the members every year. Necessary resolution for ratification of the appointment of M/s Singhi & Co., Chartered Accountants as the Statutory Auditors is included in the Notice of the 113th Annual General Meeting.

The reports of the Statutory Auditors, M/s. Singhi & Co., Chartered Accountants, on the Standalone and Consolidated Financial Statements of the Company for the year ended 31st March, 2020, form part of this Annual Report. The Statutory Auditors have submitted an unmodified opinion on the audit of financial statements for the year ended 31st March, 2020 and there is no qualification, reservation or adverse remarks given by the Auditors in their Report.

( II) Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors has appointed M/s, Sandeep Dar & Co., Company Secretaries, as Secretarial Auditor, to undertake the Secretarial Audit for the year ended 31st March, 2020. The Secretarial Audit Report is annexed as Annexure "C" to the Directors Report. The Company has complied with applicable Secretarial Standards.

Explanation to the observations made by the Secretarial Auditor in its report

With regard to the observations made by the Secretarial Auditor in its Report, we wish to state as under:

1. Ref: Para I of the Report:

A. The Company Secretary and Compliance Officer of the Company has resigned and ceased in the employment of the Company w.e.f. 1st March, 2020. The Company has six months time to fill up the vacancy caused by the resignation of Company Secretary and Compliance Officer. However, due to nationwide lockdown due to COVID-19 pandemic the company was unable to fill up the said vacancy. On lifting of the nationwide lockdown, the company will put in its best efforts to fill in the vacancy by appointing a suitable candidate as early as possible.

B. The Chief Financial Officer of the Company has resigned and ceased in the employment of the Company w.e.f. 17th December, 2019. The Company has six months time to fill up the vacancy caused by the resignation of Chief Financial Officer. However, due to nationwide lockdown due to COVID-19 pandemic the company was unable to fill up the said vacancy. On lifting of the nationwide lockdown, the company will put in its best efforts to fill in the vacancy by appointing a suitable candidate as early as possible.

2. Ref: Para V (i) of the Report:

A. The Compliance Officer of the Company has resigned and ceased in the employment of the Company w.e.f. 1st March, 2020. The Company has six months time to fill up the vacancy caused by the resignation of Compliance Officer. However, due to nationwide lockdown to contain the spread of COVID-19 pandemic the company was unable to fill up the said vacancy. On lifting of the nationwide lockdown, the company will put in its best efforts to fill in the vacancy by appointing a suitable candidate as early as possible.

B. The Company has re-appointed the Independent Directors by passing a resolution at the Annual General Meeting of the Members held on 14th August, 2019 for further period of 5 consecutive years w.e.f. 1st April, 2019. The Familiarization program to be imparted to the Independent Directors pursuant to Regulation 25(7) of SEBI (listing Obligations and Disclosure Requirements) Regulations, 2015 was to be conducted in a phased manner and on need basis during the Month of February/March, 2020. However, the company was unable to impart familiarization program due to nationwide lockdown to contain the spread of COVID-19 pandemic. On lifting of the lockdown, the company will conduct Familiarization program for the Independent Directors in a phased manner.

24. Disclosure pursuant to Section 197 (12) of the Companies Act, 2013, and Rule 5(1) of

Companies (Appointment and Remuneration of Managerial Personnel), Rules, 2014

Disclosure with respect to the remuneration of Directors, Key Managerial Personnel and Employees as required under Section 197 (12) of the Companies Act, 2013 and Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure "D" to the Directors Report.

25. Management Discussion and Analysis Report

The Management discussion and Analysis Report on the Operations of the Company, as required under Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed as Annexure "E" and forms an integral part of this Report.

26. Corporate Governance

The Corporate Governance Report for the year ended 31st March, 2020 alongwith Certificate of Compliance of conditions of the Corporate Governance received from the practicing Company Secretary, M/s Sandeep Dar & Company as per the requirements of SEBI (Listing Obligations and Disclosure Requirements) is annexed as Annexure ‘F and forms an integral part of this Report.

Practicing Company Secretarys observations on the above report:

The Company Secretary has given his observation that the Company has not conducted familiarization program for Independent Directors pursuant to Regulation 25(7) of SEBI (Listing Obligations and Disclosure Requirements). In this regard, we wish to state as under:

The Company has re-appointed the Independent Directors by passing a resolution at the Annual General Meeting of the Members held on 14th August, 2019 for further period of 5 consecutive years w.e.f. 1st April, 2019. The Familiarization program to be imparted to the Independent Directors pursuant to Regulation 25(7) of SEBI (listing Obligations and Disclosure Requirements) Regulations, 2015 was to be conducted in a phased manner and on need basis during the Month of February/March, 2020. However, the company was unable to impart familiarization program due to nationwide lockdown due to COVID-19 pandemic. On lifting of the lockdown, the company will conduct Familiarization program for the Independent Directors in a phased manner.

27. Internal Control System and Adequacy

The Company has an adequate internal control system commensurate with its size and nature of its business. The Internal Audit is entrusted to Internal Auditors, namely, M/s. Uday & Uday, Chartered Accountants, who submit their report periodically to the Audit Committee. Audit observations and corrective actions taken by the Management are presented to the Audit Committee.

28. Significant and Material Orders passed by the Regulators or Courts

There are no significant and material orders passed by the Regulators / Courts that would impact the going concern status of the Company and its future operations. However, members attention is drawn to the statement on ‘Contingent Liabilities in the notes forming part of the Financial Statements.

29. Directors

( I) In accordance with Article 168 of the Articles of Association of the Company, Mrs. Shikha Jain, Director (DIN: 06778623) liable to retire by rotation at the ensuing Annual General Meeting and being eligible offers herself for reappointment.

( II) All the Independent Directors have given declarations that they meet the criteria of Independence as laid down under section 149(7) of the Companies Act, 2013.

30. Key Managerial Personnel

Pursuant to the provisions of Section 203 of the Companies Act, 2013, the Key Managerial Personnel (KMP) of the Company as on 31st March, 2020 are:

Mr. Vishal Jain – Vice Chairman and Managing Director

Mr. Kshitiz Bilala – Chief Financial Officer, ceased in the employment with effect from 17th December, 2019.

Mrs. Babita Kumari- Company Secretary, ceased in the employment with effect from 1st March, 2020.

31. Acknowledgements

The Board of Directors wish to place on record their appreciation for the continued support and co-operation by the bankers, customers, suppliers and other stakeholders. The Directors also thank the employees at all levels for their hard work, dedication and support.

On behalf of the Board of Directors
Jai Prakash Agarwal
Chairman
Thane,
15th June, 2020.