Your Directors have pleasure in presenting the 74th (Seventy Fourth) Annual Report onthe business and operations of your Company along with the Audited Financial Statementsfor the Financial Year ended March 312019.
The Board Report is prepared on the basis of standalone financial statements of theCompany. The Company's financial performance for the year under review along with previousyear's figures is given hereunder:
| || ||(Rs. in Lacs) |
| ||2018-19 ||2017-18 |
|Profit/(Loss) for the year after charging all expenses excluding financing charges and depreciation ||1316 ||(642) |
|Deduct : Financing Charges ||7259 ||5509 |
|Cash Profit/(Loss) ||(5943) ||(6151) |
|Deduct: Depreciation/Amortisation ||1044 ||1212 |
|Profit/(Loss) for the year before taxation and exceptional Items ||(6987) ||(7363) |
|Exceptional Items (profit on sale of PPE) ||373 ||- |
|Profit/(Loss) for the year before taxation and after exceptional Items ||(6614) ||(7363) |
|Tax Expenses || || |
|Current Tax || || |
|- MAT Credit Reversal ||- ||- |
|- Previous Year Tax Adjustment ||92 ||5 |
|- Deferred Tax (Benefit)/Charge ||(234) ||(357) |
|- Profit/(Loss) after tax from discontinuing operations ||(116) ||(396) |
|Profit/(Loss) after tax for the year ||(6588) ||(7407) |
|Other Comprehensive Income || || |
|- Re-Measurement (Gains)/Losses on defined Benefit Plans ||60 ||39 |
|- Tax Impact on Re-Measurement (Gains)/Losses on defined Benefit Plans ||(21) ||(13) |
|Total Comprehensive Income for the period ||(6627) ||(7433) |
STATE OF COMPANY'S AFFAIRS
During the year under review the Gross Turnover (including income from Services &Other Sources) was Rs. 30387 Lacs as compared to Rs. 56710 Lacs during the previousyear. The Company incurred a loss before taxation of Rs. 6614 Lacs as compared to lossbefore taxation of Rs. 7363 Lacs during the previous year.
The Company continues to make efforts by monetising the surplus assets of the Companyin order to meet its fund requirements to dilute its high interest rate loans and to meetits working capital requirements.
TRANSFER TO GENERAL RESERVE
In view of losses no amount has been transferred to General Reserve.
In view of the losses incurred by the Company during the year under review the Boardof Directors of your Company do not recommend any dividend.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which these financial statements relateand the date of this Report.
CHANGE IN THE NATURE OF BUSINESS IF ANY
During the year under review there was no change in the nature of business of theCompany.
During the year under review there was no change in the Authorised or Paid-up sharecapital of the Company.
During the year under review the Company has not accepted any deposits falling withinthe ambit of Section 73 of the Companies Act 2013 (the Act") and the Companies(Acceptance of Deposits) Rules 2014.
As on March 312019 92 persons whose Fixed Deposits/Loans with the Company amountingto Rs. 59.19 Lacs had become due for payment during the year did not claim theirDeposits/Loans. Out of these Fixed Deposits/Loans of 12 persons amounting to '4.15 Lacshave since been paid.
During the year under review there has been no default in repayment of deposits orinterest thereon.
HOLDING SUBSIDIARY AND ASSOCIATE COMPANIES
Holding Company :
M/s LPJ Holdings Private Limited holds 83.90% voting rights in the Company i.e JagatjitIndustries Limited and by virtue of such holding M/s Jagatjit Industries Limited hasbecome subsidiary company of M/s LPJ Holdings Private Limited as per the Provision ofSection 2(87) of the Companies Act 2013.
Subsidiary and Associate Companies :
During the year under review M/s. JIL Trading Private Limited M/s. L. P. InvestmentsLimited M/s. Sea Bird Securities Private Limited M/s. S. R. K. Investments PrivateLimited and M/s. Yoofy Computech Private Limited continued to be the subsidiary companiesof the Company.
During the year under review M/s. Hyderabad Distilleries & Wineries PrivateLimited continued to be an Associate Company of the Company.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of your Company for the Financial Year 2018-19are prepared in compliance with the applicable provisions of the Act Indian AccountingStandards (Ind ASs") and the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 ((SEBI (LODR) Regulations)which shall be placed before the members in their forthcoming Annual General Meeting(AGM).
In accordance with Section 129 (3) of the Act a statement containing the salientfeatures of the financial statement of subsidiary/ associate/ joint venture companies isprovided as Annexure in Form AOC - 1to the consolidated financial statements of theCompany and therefore not repeated to avoid duplication.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
There was no change in the composition of the Board during the FY 2018-19.
Mrs. Kiran Kapur (DIN. 02491308) was appointed as an Independent Director of theCompany in the Annual General
Meeting held on September 30 2014 to hold office for a term of five years up to theconclusion of the ensuing AGM of the Company. The Board is of the opinion that it would bein the interest of the Company to continue to avail services of Mrs. Kiran Kapur asDirector of the Company.
Based on the recommendations of the Nomination and Remuneration Committee the Boardhas proposed to re-appoint Mrs. Kiran Kapur as an Independent Director at the ensuing AGMfor second term of five years with effect from the conclusion of 74th AGM until theconclusion of 79th AGM to be held in the calendar year 2024.
Retirement by Rotation
In accordance with the provisions of Section 152 of the Act and in terms of theArticles of Association of the Company Mrs. Sushma Sagar (DIN: 02582144) Non-ExecutiveDirector is liable to retire by rotation at the ensuing AGM and being eligible offersherself for re-appointment. Your Board recommends her re-appointment.
Key Managerial Personnel
During the year under review Mr. Ravi Manchanda Managing Director Mr. Anil GirotraChief Financial Officer and Mr. K. K. Kohli Company Secretary and Compliance Officercontinued to be the Key Managerial Personnel of your Company in accordance with theprovisions of Section 2 (51) and Section 203 of the Act read with Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014.
MEETINGS OF THE BOARD AND ITS COMMITTEES
The number of meetings of the Board and various Committees thereof are set out in theCorporate Governance Report which forms part of this report. The intervening gap betweenthe meetings was within the period prescribed under the Act and SEBI (LODR) Regulationsas applicable.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3) (c) read with Section 134 (5) of the Act the Directorsstate that:
(a) i n the preparation of Annual Accounts for the year ended March 31 2019 theapplicable Accounting Standards have been followed along with proper explanation relatingto material departures;
(b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;
(c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) the Directors have prepared the annual accounts of the Company on a going concernbasis;
(e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
(f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
Details in respect of frauds reported by auditors :
There was no instance of fraud reported by the Auditors.
DECLARATION BY INDEPENDENT DIRECTORS
Your Company has received necessary declarations from each Independent Director thathe/she meets the criteria of independence as laid down under the Act read with Schedule IVand Rules made thereunder as well as SEBI (LODR) Regulations including any amendmentthereof. The Board considered the independence of each of the Independent Directors interms of above provisions and is of the view that they fulfill / meet the criteria ofindependence.
NOMINATION AND REMUNERATION POLICY OF DIRECTORS KEY MANAGERIAL PERSONNEL AND OTHEREMPLOYEES
In accordance with the provisions of Section 178(1) of the Act read with Rules madethereunder and SEBI (LODR) Regulations based on the recommendations of the Nomination andRemuneration Committee the Board of Directors of the Company have approved a policy onnomination and remuneration of Directors Key Managerial Personnel and other employeesincluding criteria for determining qualifications positive attributes independence of adirector and other matters provided u/s 178(4). The broad parameters covered under thePolicy are:
Principle and Rationale
Nomination of Directors
Remuneration of Directors
Evaluation of the Directors
Nomination and Remuneration of the Key Managerial Personnel (other thanManaging/ Whole-time Directors) Key-Executives and Senior Management.
Remuneration of other employees.
The Company's Policy relating to appointment of Directors payment of Managerialremuneration Directors' qualifications positive attributes independence of Directorsand other related matters as provided under Section 178(3) of the Act is given in separateAnnexure to this report. The policy is also available on the website of the Company i.e.www.jagatjit.com.
The above Annexure is not being sent along with this Report to the members of theCompany in line with the provisions of Section 136 of the Act. The aforesaid Annexure isavailable for inspection by Members at the Registered Office of the Company up to the dateof the ensuing AGM during the business hours on working days except Saturdays. Memberswho are interested in obtaining these particulars may write to the Company Secretary atthe Registered Office of the Company.
ANNUAL PERFORMANCE EVALUATION
Pursuant to the provisions of Section 134 (3) (p) of the Act and the rules madethereunder the Board was required to carry out the Annual Performance Evaluation of theBoard its Committees and individual Directors. Additionally as per provision ofRegulation 17 (10) of SEBI (LODR) Regulations and Schedule IV of the Act the performanceevaluation of the independent directors was also to be done by the Board of Directors.Accordingly the Board has carried out the annual evaluation of the Directors individuallyincluding the Independent Directors (wherein the concerned director being evaluated didnot participate) Board as a whole and following Committees of the Board of Directors:
i) Audit Committee;
ii) Nomination and Remuneration Committee;
iii) Stakeholders' Relationship Committee; and
iv) Corporate Social Responsibility Committee.
The evaluation concluded by affirming that the Board as a whole as well as all of itsMembers individually and the Committees of the Board continued to display commitment togood governance ensuring a constant improvement of processes and procedures.
It was acknowledged that every Director and the Committee of the Board contributed itsbest in the overall performance of the Company.
EXTRACT OF ANNUAL RETURN
In accordance with the provisions of Section 92 of the Act read with the Companies(Management and Administration) Rules 2014 the extract of Annual Return of the Companyin Form MGT-9 forms part of this Report and is annexed herewith as Annexure-1.
AUDITORS AND AUDITORS' REPORT
The Members of the Company vide their resolution passed at the 72nd (Seventy Second)AGM read with their resolution passed through postal ballot on November 10 2017 appointedM/s. Madan & Associates Chartered Accountants (Firm Registration Number 000185N) asthe Statutory Auditors of the Company who shall hold office of Statutory Auditors untilthe conclusion of 76th (Seventy Sixth) AGM of the Company to be held for the FY 2020-21.
The Statutory Auditors in their report for the financial year ended March 312019 havemade certain qualifications/remarks which forms part of this Report alongwith Board'sexplanations and comments and is annexed herewith as Annexure-2.
Other observations of the Statutory Auditors in their Report on standalone andconsolidated financial statements for the year ended March 312019 are self-explanatoryand therefore do not call for any further comments.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Act read with corresponding Rulesframed thereunder M/s. Saqib & Associates Company Secretaries were appointed as theSecretarial Auditors of the Company to carry out the Secretarial Audit of secretarial andrelated records of the Company for the Financial Year ended March 312019.
A Secretarial Audit Report submitted by the Secretarial Auditors in Form No. MR-3 formspart of this report and is annexed herewith as Annexure-3.
ANNUAL SECRETARIAL COMPLIANCE REPORT
A Secretarial Compliance Report for the financial year ended March 312019 oncompliance of all applicable SEBI Regulations and circulars/guidelines issued thereunderas received from M/s Saqib & Associates Secretarial Auditors was submitted to theBombay stock exchange.
In terms of Section 148 of the Act and the Companies (Cost Records and Audit) Rules2014 and any amendment thereto Cost Audit is not applicable to the Company.
INTERNAL FINANCIAL CONTROLS
The Company generally has in place adequate Internal Financial Controls with referenceto financial statements. During the year such controls were tested and the Auditorsreported that the Company generally has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were generally operating effectively as at March 31 2019 exceptin respect of trade receivable reconciliation/ confirmation provision for bad anddoubtful debts and accounts payable reconciliation/ confirmation where controls were foundto be ineffective. The Board's response with respect to the trade receivablereconciliation provision for bad and doubtful debts and accounts payable reconciliation/confirmation is mentioned in Annexure - 2 to this report. Further the Auditors havestated that in some areas the controls were effective but need to be strengthened. TheCompany is taking necessary steps to further strengthen the same. The report on theInternal Financial Control issued by M/s. Madan & Associates Chartered Accountantsthe Statutory Auditors of the Company in view of the provisions under the Act is annexedto the Audit Report on the Financial Statements of the Company.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Act are given in the notes to the Financial Statements.
RELATED PARTY TRANSACTIONS
All contract / arrangement / transactions entered into by the Company with RelatedParties as defined under the Act and SEBI (LODR) Regulations during the Financial Year2018-19 were at arm's length basis and in the ordinary course of business. As per theprovisions of Section 188 of the Act and Rules made thereunder read with Regulation 23 ofSEBI (LODR) Regulations your Company has obtained necessary approval of the AuditCommittee before entering into such transactions and the same has been reviewedperiodically.
Your Company has framed a Policy on Related Party Transactions in accordance with SEBI(LODR) Regulations and as per the amended provisions of the Act. The Policy intends toensure that proper reporting approval and disclosure processes are in place for alltransactions between the Company and related parties. The policy is uploaded at thewebsite of the Company at www.jagatjit.com
During the year the Company has not entered into any contract / arrangement /transaction with related parties which could be considered material in accordance with theaforesaid Policy of the Company on Related Party Transactions.
None of the transactions with any of the related parties were in conflict with theinterest of the Company. Rather they synchronised and synergised with the Company'soperations. Attention of Members is drawn to the disclosure of transactions with therelated parties set out in Note no. 38 of the Standalone Financial Statements formingpart of the Annual Report.
Since all the transactions which were entered into during the Financial Year 2018-19were on an arm's length basis and were in the ordinary course of business and there was nomaterial related party transaction entered by the Company during the Financial Year2018-19 as per Related Party Transactions Policy hence no details are required to beprovided in Form AOC-2 prescribed under Clause (h) of Sub-section (3) of Section 134 ofthe Act and Rule 8(2) of the Companies (Accounts) Rules 2014.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The composition role functions and powers of the Corporate Social Responsibility(CSR) Committee of the Company are in accordance with the requirements of the Act.Presently the CSR Committee comprises of Mrs. Kiran Kapur (Independent Director); Mrs.Anjali Varma (Non-Executive Director) and Mr. Ravi Manchanda (Managing Director) asMembers.
The CSR Policy of the Company as approved by the CSR Committee is also available on thewebsite of the Company at www.iagatiit.com.
During the year under review the Company did not meet the requirement of Section135(5) of the Act therefore no such activities were required to be undertaken by theCompany.
The Company is aware of the risks associated with the business. It regularly analysesand takes corrective actions for managing / mitigating the same. Your Company's Riskmanagement framework ensures compliance with the provisions of SEBI (LODR) Regulations.Your Company has institutionalised the process for identifying minimising and mitigatingrisks which is periodically reviewed. Some of the risks identified and been acted upon byyour Company are: securing critical resources; ensuring sustainable plant operations;cordial relations with the workers ensuring cost competitiveness including logistics;maintaining and enhancing customer service standards and resolving environmental andsafety related issues.
The Board of Directors has adopted a formal Risk Management Policy for the Company andthe same is available at the website of the Company at www.iagatiit.com. The Policyoutlines the parameters of identification assessment monitoring and mitigation ofvarious risks which are key to business obiectives.
REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL AND PARTICULARS OF EMPLOYEES
The information required to be disclosed in the Board's Report pursuant to Section 197of the Act read with Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 for the year ended March 31 2019 is given in a separate Annexureto this report.
The above annexure is not being sent along with this Report to the members of theCompany in line with the provision of Section 136 of the Act. The aforesaid Annexure isavailable for inspection by Members at the Registered Office of the Company upto the dateof the ensuing AGM during the business hours on working days except Saturdays. Memberswho are interested in obtaining these particulars may write to the Company Secretary atthe Registered Office of the Company.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO
The information pertaining to conservation of energy technology absorption foreignexchange earnings and outgo as required under Section 1 34(3)(m) of the Act read with Rule8(3) of the Companies (Accounts) Rules 2014 forms part of this report and is annexedherewith as Annexure-4.
Your Company upholds the standards of governance and is compliant with the CorporateGovernance provisions as stipulated under SEBI (LODR) Regulations in both letter andspirit. The Company's core values of honesty and transparency have since its inceptionbeen followed in every line of decision making. Setting the tone at the top yourDirectors cumulatively at the Board level advocate good governance standards at theCompany. Your Company has been built on a strong foundation of good Corporate Governance.
Parameters of Statutory compliances evidencing the standards expected from a listedentity have been duly observed and a Report on Corporate Governance as well as theCertificate from a firm of Practicing Company Secretaries confirming compliance with therequirements of Regulation 34 read with Schedule-V of the SEBI (LODR) Regulations formspart of this report and is annexed herewith as Annexure-5 and 6 respectively.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report as stipulated under Regulation 34 readwith Schedule-V of the SEBI (LODR) Regulations is presented in separate section formingpart of the Annual Report.
LISTING OF SHARES OF THE COMPANY
The shares of your Company are listed on the BSE Limited. The Listing fees for theFinancial Year 2019-20 has been paid to the BSE Limited.
RESEARCH AND DEVELOPMENT (R&D)
The Company takes regular steps for R&D in the manufacturing process and optimumutilisation of its resources. During the year under review the Company has incurred Rs. 1crore towards Research and Development.
Statements in the Board's Report and the Management Discussion & Analysisdescribing the Company's objectives expectations or forecasts may be forward lookingwithin the meaning of applicable security laws and Regulations. Actual results may differmaterially from those expressed in the statement. Important factors that could influencethe Company's operations include global and domestic demand and supply conditionsaffecting selling prices of finished goods input availability and prices changes ingovernment Regulations tax laws economic developments within the country and otherfactors such as litigation and industrial relations.
DISCLOSURES IN RELATION TO THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013 :
The Company is committed to providing and promoting a safe and healthy work environmentfor all its employees. The Company has in place an Anti Sexual Harassment policy in linewith the requirements of The Sexual Harassment of women at the Workplace (PreventionProhibition & Redressal) Act 2013. Internal Complaints Committee (ICC) has been setup to redress complaints received regarding sexual harassment.
(a) number of complaints filed during the financial year - Nil
(b) number of complaints disposed of during the financial year
(c) number of complaints pending as on end of the financial year
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transaction on these items during the year under review:-
1. Issue of equity shares with differential voting rights as to dividend voting orotherwise.
2. The Managing Director of the Company does not receive any remuneration or commissionfrom any of its subsidiaries.
3. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
4. Sweat Equity Shares.
5. Further the Board of Directors also confirm that the Company is in the regularcompliance of applicable provisions of Secretarial Standards issued by the Institute ofCompany Secretaries of India.
The Directors wish to place on record their appreciation for the sincere servicesrendered by employees of the Company at all levels. Your Directors also wish to place onrecord their appreciation for the valuable co-operation and support received from theGovernment of India State Governments the Banks / Financial Institutions and otherstakeholders such as shareholders customers and suppliers among others. The Directorsalso commend the continuing commitment and dedication of the employees at all levelswhich has been critical for the Company's success. The Directors look forward to theircontinued support in future.
For and on behalf of the Board For Jagatjit Industries Limited
| ||Ravi Manchanda ||Kiran Kapur |
|Date: August 14 2019 ||Managing Director ||Director |
|Place: New Delhi ||(DIN.001 52760) ||(DIN. 02491308) |