Mar 31, 2018
The Directors have pleasure in presenting the 32nd Annual report and audited accounts of the company for the year ended 31st March 2018.
1. Financial Highlights
The performance of company during the financial year ended 31st March 2018 on standalone basis has been as under: (Rs. in jakh)
Particulars |
Current Year 2017-2018 |
Previous Year 2016-2017 |
Gross Income |
13512.98 |
11763.54 |
Profit before interest and depreciation |
1339.67 |
1261.37 |
Financial Charges |
248.32 |
247.38 |
Gross Profit |
1090.35 |
1013.99 |
Provision for Depreciation |
269.81 |
282.70 |
Net profit before Tax |
821.54 |
731.29 |
Provision for Tax (Net) &Deferred Tax |
285.14 |
249.35 |
Net Profit after Tax |
536.40 |
481.94 |
Balance of profit brought forward |
2881.27 |
2399.34 |
Balance available for appropriation |
3417.67 |
2881.27 |
Amount proposed to be carried to any Reserve |
||
Transfer from General Reserve |
||
Surplus carried to Balance Sheet |
3417.67 |
2881.27 |
2. Performance during the financial year under Report
2.1 State of Companyâs Affairs
Your company has achieved sales of Rs.134.00 crore during 2017-2018, which were 14.90% higher as compare with the sales of the previous year. The sales of Synthetic Leather Division at Rs. 97.25 crore were higher by 15.5% as compared with sales of Rs. 84.20 crores during the immediately preceding financial year. The sales of Electronic Gauge Division at Rs. 36.75 crore were 13.88% higher as compared those of immediately preceding financial year. Companyâs operating profit before interest, depreciation and income tax increased by 6.17% to Rs. 13.39 crore during 2017-18 as compared with Rs. 12.61 crore during the previous year due to lower raw material prices and reduced power & fuel. The interest and finance charges have remained unchanged at Rs. 2.48 crore as compared with the previous year.
The net profit after interest, depreciation, income tax and deferred tax have increased to Rs. 5.36 crore, which were 11.32% higher 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. The Board has not proposed appropriation of any amounts to reserves. During the year, there has not been any change in nature of business of the company. No significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and companyâs operations in future. 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.
2.2 Material Changes and commitment, if any, after the date of financial statements, affecting the financial position of the company
No material changes and commitment affecting the financial position of the company have occurred between the end of the financial year to which the financial statements relate and the date of this Directorsâ Report.
Future Prospects
Your company is continuously upgrading its technology and modernizing its plant and machinery to maintain a competitive edge in the market.
In the Synthetic Leather segment, the major thrust of your Company has always been towards indigenization of raw material, improvements in the manufacturing process and developing new products. Your Company is undertaking a major change in the production lines, which besides increasing the capacity of PVC production line from 70 Lakh L. Mtrs to 90 Lakh L. Mtrs and that of PU production line from 24 Lakh L. Mtrs to 30 Lakh L. Mtrs, will also increase operational efficiency and speed of production.
In the Electronics Gauges segment, your Company is developing new types of gauges, which will not be based on nuclear isotopes and X-rays. This will attract new customers.
The management perceives that the above measures will result in increased production & profits and also attract high-end consumers.
3. Dividend
The management has not proposed any dividend for the year ended on 31st March 2018.
4. Directors & Key Managerial Personnel
The Board of Directors is the apex body constituted by shareholders for overseeing the Companyâs overall functioning. The Board provides and evaluates the Companyâs strategic direction, management policies and their effectiveness and ensures that stakeholdersâ long-term interests are being served. The Chairman and Managing Director provides overall direction and guidance to the Board.
The Board has constituted five Committees, namely Audit Committee, Nomination and Remuneration Committee (NRC), Finance Committee, CSR Committee, Stakeholdersâ 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, 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) which forms 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/Filings & Disclosures/ Appointment & Training of IDs.
Smt Kamlesh Garg, Director retires by rotation at this Annual General Meeting. The term of appointment of Independent Directors viz. Dr. Shiv Kumar Khandelwal, Shri Kuldeep Singal, Dr. Kailash Chander Varshney and Shri Krishan Lal Khetarpaul will come to an end on 31-03-2019 and the term of appointment of whole time directors, viz. Shri Jai Kishan Garg, Managing Director; Shri Ramnik Garg, Executive Director and Shri Navneet Garg, Executive Director will come to an end on 30-04-2019, 30-04-2019 and 30-06-2019 respectively.
Being eligible, the aforesaid persons have offered themselves for reappointment for fresh terms. On the recommendations of the
Nomination & Remuneration Committee, which found their performance to be good, the Board of Directors proposes and recommends to the AGM their re-appointments, as proposed in the Notice convening the Annual General Meeting. Brief resume of the proposed re-appointees is given in the annexed Corporate Governance Report, which forms part of the Directorsâ Report.
5. Particulars of Employees
The Company does not have any employees whose particulars are required to be disclosed in the Directorsâ Report pursuant to the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
6. Board & Board Committee Meetings
Details of Board and Committee Meetings are given in the annexed Corporate Governance Report which forms integral part of this Report.
7. 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 directorsâ duties and responsibilities; understanding of Companyâs vision, mission, strategic plan and key issues, diligence and participation in Board, Committee and General Meetings, and leadership traits.
8. Companyâs Policy on Appointment and Remuneration and other matters relating to Directors
For a policy on Directorsâ 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, 2014 and under the Listing Regulations,please refer to Annexure B, which forms part of this Report.
9. Disclosure under Section 197(12) of the Act and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
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.
10. Subsidiaries, Consolidated Accounts and materiality
Indev Gauging Systems Inc (INDEV), is a wholly owned foreign subsidiary of Jasch North America Ltd(JNAC) (the latter in turn being a wholly owned subsidiary of Jasch Industries Ltd). Jasch Automation Ltd (now a dormant company) is the Indian subsidiary of the Company. All these entities existed as subsidiaries of the Company at the beginning and at the end of the Financial Year under report and none of these subsidiaries is a material subsidiary (A subsidiary company is considered as material if the holding Companyâs investment in the subsidiary company exceeds twenty per cent of consolidated net worth of holding company as per holding companyâs audited balance sheet of the previous financial year or if the subsidiary company has generated twenty per cent of the consolidated income of the holding company during the previous financial year).
Performance and financial position: JNAC does not perform any business, except supporting Indev by way of providing share capital or investment. Financial statements of JNAC and JAL have been consolidated with the financial statements of the Company for the financial year ended on that date. During the financial year under report, Indev achieved a gross sales and other income of USD equivalent of INR 2243 lakh but suffered a loss of USD equivalent of INR 98 lakh, which was mainly a capital loss (Rs. 84 lakh) on account of sale of property by Indev in the State of Illinois, USA, for the purpose of shifting to a better location in the State of Ohio, USA. As required under law, the consolidated accounts of the Company, which include those of its wholly owned subsidiaries, are annexed to this report.
11. Financial Audit & Financial Auditorsâ Report
M/s Mukesh A Mittal & Co., Chartered Accountants, who have subjected themselves to a peer review, have carried out statutory audit of Companyâs financial accounts during the financial year 2017-18. The report given by them (Auditorsâ 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.
12. Secretarial Audit & Secretarial Auditorsâ 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.
13. 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. Their report to the Board of Directors does not contain any qualification, reservation, adverse remark or disclaimer.
14. Internal Audit, Internal Control Systems & Their Adequacy
The Company has engaged CMA Jyoti Gandhi as Independent Internal Auditor. 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.
15. Vigil Mechanism:
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.
16. 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 Directorsâ Report.
17. 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 Investor Services.
18. Deposits
The Company neither had 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.
19. 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.
20. Related Parties 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 armâs 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. Particulars of contracts entered during the year as per Form AOC-2 are enclosed as Annexure - F. There were no material related party transactions with the Companyâs promoters, directors, management or their relatives, which could have had a potential conflict with the interests of the Company.
21. 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 and forms an integral part of this Report.
22. Management Discussion and Analysis Report
For Management Discussion & Analysis Report, please refer to Annexure G, which forms a part of this Report.
23. 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 Committees. At the beginning of the financial year under report, no cases were pending and during the year, no cases were filed or disposed of under that Act.
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 H to this report.
25. ISO Certification
The Company has ISO 9001:2015 certification for Quality Standards and has applied for ISO 14001:2015 certification relating to environmental management system.
26. Listing
The Shares of the Company are listed on Stock Exchanges at Mumbai and Kolkata. The Company has filed an application with the Calcutta Stock Exchange Association Ltd (CSE) for delisting of its shares therefrom. The matter is under consideration with CSE.
27. 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 2017-18, the Company spent Rs. 9,61,966 on CSR activities, which is 2% of companyâs average profits of the preceding three years.
28. Directorsâ 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 2018 and of the profits of the Company for the year ended 31st March 2018.
(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.
29. Appreciation
Your directors wish to place on record their appreciation of the devoted services rendered by the workers, the staff and the executives of the Company and for the continued support from the shareholders, the lenders and other associates.
For & on behalf of the Board
Place : Sonipat (J. K. GARG)
Date : 28th July 2018 Chairman
Mar 31, 2016
1. FINANCIAL HIGHLIGHTS
The performance of company on stand-alone basis during the financial year ended 31st March, 2016 has been as under :
('' in lakh)
Particulars |
Current Year |
Previous Year |
2015-16 |
2014-15 |
|
Gross Income |
11021.36 |
10565.80 |
Profit before interest and depreciation |
1126.08 |
934.26 |
Financial Charges |
225.50 |
216.38 |
Gross Profit |
900.58 |
717.88 |
Provision for Depreciation |
257.88 |
246.38 |
Net profit before Tax |
642.70 |
471.50 |
Provision for Tax (Net) & CSR |
232.08 |
162.41 |
Net Profit after Tax |
410.62 |
309.09 |
Balance of profit brought forward |
1993.99 |
1684.91 |
Balance available for appropriation |
2404.61 |
1993.99 |
Amount proposed to be carried to any Reserve |
â |
â |
Transfer from General Reserve |
â |
â |
Surplus carried to Balance Sheet |
2404.61 |
1993.99 |
2. Performance during the financial year under Report
2.1 State of Company''s Affairs
Your company has achieved gross sales of Rs. 110.21 crore during 2015-2016, which were 4.31% higher as compare with the sales of the previous year. The sales of Synthetic Leather Division were almost stagnant at Rs. 83.21 crore as compared with sales of Rs. 83.93 crore during the previous year due to sluggish market conditions. Further with the general decline in the prices of some of the raw materials, selling price of Synthetic Leather was also marginally reduced resulting in stagnant sales. The sales of Electronic Gauge Division at Rs. 26.99 crore were 24.2% higher as compared with previous year due to higher inflow of orders both from Domestic and International market, particularly during the second half of the year.
The company''s operating profit before interest, depreciation, income tax and provision for corporate social responsibility increased by 20.5% to Rs. 11.26 crore during 2015-16 as compared with Rs. 9.34 crore during the previous year due to lower raw material prices and reduced power & fuel. The interest and finance charges have marginally increased to Rs. 2.26 crore as compared with Rs. 2.16 crore during the previous year.
The net profit after interest, depreciation, income tax and write back of deferred tax of Rs. 5.61 lakh and provision for corporate social responsibility have increased to Rs. 4.11 crore, which were 32.68% higher as compared with the previous year. Keeping in view prevailing sluggish market conditions resulting in stagnant sales, the management considers overall performance to be satisfactory. The Board has not proposed appropriation of any amounts to reserves. During the year, there has not been any change in nature of business of the company. No significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and company''s operations in future. 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.
2.2 Material Changes and commitment, if any affecting the financial position of the company
As the members are aware, at present the Company has two business segments: (1) manufacture of PU resins and PU/PVC coated fabrics and
(2) manufacturing of industrial gauges. The manufacture of industrial gauges requires a dedicated focus and business strategies to develop its growth potential in the business market relevant to it. To do so and thus create value for all of its stakeholders, the management proposes its demerger from rest of the business of the Company and vest it in a newly incorporated wholly subsidiary Company viz Jasch Automation Ltd. In consultation with professionals in the field, the management had prepared a draft Scheme of Demerger and also obtained "Fairness Opinion" from a Category-I Merchant Banker and also had "Share Entitlement Ratio" determined by a Chartered Account in practice. A copy of the draft Scheme of Demerger, obtained Fairness Opinion, calculation of Share Entitlement Ratio and other related documents are available at the website of the Company www.jaschindustries.com under the tab "Demerger".
The proposed Scheme envisages allotment in proportion of seventy-two equity shares of Jasch Industries Ltd and twenty-eight equity shares of Jasch Automation Ltd (both of Rs. ten each and fully paid up), in exchange of existing one hundred equity shares (fully paid up) of Jasch Industries Ltd held by the shareholders on a date, which is yet to be determined. Since it is proposed to have the equity shares of Jasch Automation Ltd listed on BSE Ltd, this would also help its shareholders to unlock the value of their shares.
As required by law, the Company had filed an application with BSE Ltd (Mumbai Stock Exchange) " with a draft Scheme of Demerger and has received "observation letter" dated 23rd June, 2016 from it. The proposed Scheme will be subject to approval of the Hon''ble Punjab & Haryana High Court, the shareholders of the Company and its creditors.
Besides the above, no material changes and commitment affecting the financial position of the company have occurred between the end of the financial year to which the financial statements relate and the date of this Director''s Report.
3. Future prospects
The company is continuously upgrading its technology and modernizing plant and machinery to maintain competitive edge in the market. The company is also concentrating on PU Resin where competition is somewhat less and surplus capacity is available after meeting internal requirements for production of PU Synthetic Leather. The company is availing the services of Foreign Technical Experts for developing new Products of PU Leather with potential of higher realization.
4. Dividend
The management has not proposed any dividend for the year ended on 31st March, 2016 so as to conserve resources for Capex and augmenting working capital.
5. Directors & Key Managerial Personnel
The Board of Directors is the apex body constituted by shareholders for overseeing the Company''s overall functioning. The Board provides and evaluates the Company''s strategic direction, management policies and their effectiveness and ensures that shareholders'' long-term interests are being served. The decision making process at the Company is institutionalized. Stakeholder''s interests are taken into account, before making any business decision. The Chairman and Managing Director (CMD) provides overall direction and guidance to the Board. The Board has constituted three Committees, namely Audit Committee, Nomination & Remuneration 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, Stakeholders Relationship Committee and their Meetings held during the Financial Year under Report, Independent Directors, their brief resume, the declarations of Independence given them and appointment of Key Managerial Personnel, please refer to Annexure A (Corporate Governance Report) which forms 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/ Filings & Disclosures/ Appointment & Training of IDs.
During the financial year under report, no new Director was appointed or re-appointed. However, appointment of Dr. SK Khandelwal, Dr. KC Varshney, Shri Kuldeep Singal and Shri KL Khetarpaul as Independent Directors which was previously made under the old Companies Act of 1956, was re-confirmed for a period of five years by means of Postal Ballot. During the period intervening between the close of the financial year under report and the date of this notice, on the recommendations of the Nomination & Remuneration Committee, Shri Jai Kishan Garg, Shri Ramnik Garg and Shri Navneet Garg, whose tenure as Managing Director, Whole Time Director and Whole Time Director respectively, came to an end, were re-appointed for a further period of three years, subject to approval by this Annual General Meeting. Shri Ramnik Garg, Director retires by rotation at this Annual General Meeting and being eligible, offers himself for re-appointment. On the recommendations of the Nomination & Remuneration Committee, the Board of Directors proposes to re-appoint him as Director (subject to retirement by rotation). The Board recommends these (re) appointments.
6. Particulars of Employees
The Company does not have any employees whose particulars are required to be disclosed in the Directors'' Report pursuant to the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
7. Board & Board Committee Meetings
Details of Board and Committee Meetings are given in the Corporate Governance Report, which is annexed as Annexure A ibid which forms integral part of this Report.
8. Evaluation of Board, its Committees and Individual Directors
Pursuant to the provisions of the Companies Act, 2013 and Listing Agreement/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 Nomination & Remuneration Committee, which includes attendance and participation at Board, Committee and General Meetings; quality of individual director''s contribution to Board, relationship of an individual director with other Board members; ability to follow up the views expressed by him/her earlier, ability to contribute to and monitor the corporate governance practices, ability to restrict litigation to the minimum, ability to take unanimous decisions, ability to adopt international best practices, ability to actively participate in long-term strategic planning, ability to fulfill directors'' legal obligations and fiduciary responsibilities, self-appraisal of Key Result Areas (in case of whole time directors), etc.
9. Remuneration Policy, Remuneration of Directors & Appointment of Directors
For a policy on Directors'' appointment, remuneration and criteria of evaluation required to be disclosed under Section 178(3) of the Companies Act, 2014 and under the Listing Agreement /Listing Regulations, please refer to Annexure B, which forms part of this Report.
10. Disclosure under Section 197(12) of the Act and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
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.
11. Subsidiaries, Consolidated Accounts and materiality
Indev Gauging Systems Inc (INDEV), is a wholly owned subsidiary of Jasch North America Ltd(JNAC) (the latter in turn being the wholly owned subsidiary of Jasch Industries Ltd). Incorporated in the United States, both these entities existed as subsidiaries of the Company at the beginning and at the end of the Financial Year under Report. On 16th February, 2016, a new Company i.e. Jasch Automation Ltd was incorporated as a wholly owned subsidiary to receive the demerged business of Automation Division of the Company. A subsidiary company is considered as material if the holding Company''s investment in the subsidiary company exceeds twenty per cent of consolidated net worth of holding company as per holding company''s audited balance sheet of the previous financial year or if the subsidiary company has generated twenty per cent of the consolidated income of the holding company during the previous financial year.
Performance and financial position: JNAC does not perform any business, except supporting INDEV by way of providing share capital or investment or guarantee. Although calendar year is the financial year of both these subsidiaries but financial statement of JNAC has been obtained for the fifteen month period ended on 31-03-2016 and consolidated with the financial statements of the Company for the financial year ended on that date. During this fifteen month period, JNAC achieved a gross sales and other income of USD equivalent of INR 14,45,61,390 and incurred a loss of USD equivalent of INR 1,19,50,518. The loss is largely attributable to the quarter 01-01-2016 to 31-05-2016, which is a lean period in USA. In accordance with the requirements of accounting standard (AS) 21 prescribed by The institute of chartered Accountants of India, the consolidated accounts of the Company, which include those of its wholly owned subsidiaries, are annexed to this report.
12. Financial Audit & Financial Auditors'' Report
M/s Arora and Choudhary Associates, Chartered Accountants, who have subjected themselves to peer review, have carried out statutory audit of Company''s financial accounts during the financial year 2015-16. They hold office till the conclusion of the ensuing Annual General Meeting and have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limit under Companies Act, 2013 and that they are not disqualified for re-appointment. The Directors and the Audit Committee recommend their re-appointment. 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.
13. 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.
14. 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 Auditors. Their report, the due date of which is one hundred and eighty days from the close of the financial year, is not yet due.
15. Internal Audit, Internal Control Systems & Their Adequacy
The Company has engaged CMA Jyoti Gandhi as its Internal Auditor. 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.
16. 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.
17. 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.
18. Extract of Annual Return
Extract of Annual Return is attached at Annexure E.
19. Deposits
The Company neither had 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 i interest thereon.
20. Loans & Advances
During the year under Report, the Company did not give any reportable loans or advances.
21. Related Parties 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 arm''s length basis and were in the ordinary course of the business. The Audit Committee has granted omnibus approval to certain transactions. Transactions with related parties are placed before the Audit Committee on Quarterly basis for its approval or modification and the particulars of contracts entered during the year as per Form AOC-2 are enclosed as Annexure - F. There were no material related party transactions with the Company''s 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 maintain the highest standards of corporate governance and adhere 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 Agreement/Listing Regulations is attached and forms an integral part of this Report.
23. Management Discussion And Analysis Report
For Management Discussion & Analysis Report, please refer to Annexure G, which forms a part of this Report.
24. 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 Committees. At the beginning of the financial year under report, no cases were pending and during the year, no cases were filed or disposed of under that Act.
25. Conservation Of Energy, Technology Absorption,
Foreign Exchange Earnings & Outgo
Information required under section 134 (3) (m) of the Companies Act,
26. Credit Rating & ISO Certification
The financial facilities availed by the Company from HDFC Bank were got rated by CRISIL, a Premier credit rating agency, which has awarded long term rating "BBB/Stable" and short term rating "CRISIL A3 " to these facilities. As per Credit Rating Scales available at the website of CRISIL, instruments with these ratings have moderate degree of safety/credit risk regarding timely servicing/payment of financial obligations. The Company has also obtained ISO 9001:2000 Quality Certificates for its Synthetic Leather and Electronic Gauge Divisions respectively.
27. Listing
The Shares of the Company are listed on Stock Exchanges at Mumbai and Kolkata. The Company has filed an application with the Calcutta Stock Exchange for delisting of its shares there from. No response has yet been received from Calcutta Stock Exchange.
28. Corporate Social Responsibility
Provisions relating to Corporate Social Responsibility were not applicable to the Company during the Financial Year under Report. However, these have subsequently become applicable w.e.f. 01-04-2016 and the Company has taken necessary steps to comply with the same.
29. 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, 2016 and of the profits of the Company for the year ended 31st March, 2016;
(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; and
(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.
30. Appreciation
Your directors wish to place on record their appreciation of the devoted services rendered by the workers, the staff and the executives of the Company and for the continued support from the shareholders, the lenders and other associates.
For & on behalf of the Board
Place: Sonipat (J.K.GARG)
Date: 30-07-2016 Chairman
Mar 31, 2014
Dear Members,
The Directors have pleasure in presenting the 28th Annual report and
audited accounts of the company for the year ended 31st March 2014.
FINANCIAL RESULTS rs in lakh
Particulars Current year Previous Year
2013-14 2012-13
Gross Sales 9755.99 8963.36
Less Excise Duty/VAT/Service Tax 983.72 912.61
Net Sales Turnover 8772.27 8050.75
Other Income 29.16 21.04
Net sales and & other income 8801.43 8071.79
Operating Profit before Interest, 838.05 798.90
Depreciation, Income Tax, Exceptional
Items & Prior Periods Adjustments - -
Interest & Financial Charges 241.54 277.60
Gross Profit Before Depreciation 596.51 521.30
Depreciation 267.76 247.80
Less : Provision for income tax 145.95 103.66
Net profit before deferred tax 182.80 169.84
Add / (Deduct) : Provisions for
deferred Tax (Assets) / Liability 8.22 11.46
Net profit available for appropriation 191.02 181.30
Surplus brought forward from
previous year 1463.89 1282.59
Transfer to general reserve - -
Provision for dividend including
dividend distribution tax - -
surplus carried forward 1684.91 1493.89
Dividend
In view of low profit, tough economic scenario and need for augmenting
working capital resources the Management has not proposed any dividend
for the year endedon31st March, 2014.
Performance during the year
Your company has achieved gross sales of 9755.99 lakh during 2013-2014
which were 8.84% higher as compared with the sales of previous year.
The sales of Synthetic Leather Division at Rs. 7152.72 lakh during
2013-14 were 5 % higher as compared with the sales of previous year.
The sales of Electronic gauge Division at Rs. 2603.28 lakh during the
year were 20.88% higher as compared with the previous year. The
Electronic gauge Division has achieved export of Rs. 965.71 lakh during
the year as compared with export of Rs. 880 lakh during the previous year
despite recessionary conditions in user industries in international
market.
The company operating profit before interest, depreciation, income tax
and deferred tax increased by 4.90% to Rs. 838.05 lakh during 2013-14 as
compared with Rs. 798.90 lakh during the previous year, despite higher
cost of power & fuel, salaries/wages, exchange loss due to Rupee
depreciation and stagnant selling prices due to recession in the
market.
The interest and finance charges decreased to Rs. 241.54 lakhs (previous
year Rs. 277.60 lakhs) despite higher sales, due to effective working
capital management. The gross profit before interest and depreciation
has increased to Rs. 838.05 lakh which is 5% higher as compared to the
previous year. After providing depreciation of Rs. 267.76 lakh and
provision for income tax of Rs. 145.95 lakh and writing back of deferred
tax of Rs. 8.22 lakh the company has earned net profit of Rs. 191.02 lakh,
which is 5.37% higher as compared with the net profit of Rs. 181.30 lakh
in the previous year. Keeping in the view weak scenario in the economy
resulting in stagnant sale realization and all around increase in the
cost of inputs due to inflationary condition, the management considers
overall performance to be satisfactory in a difficult year.
CREDIT RATING AND ISO CERTIFICATION
The company''s performance and financial position was rated by CRISIL
Ltd, the Premier credit rating agency in the country. CRISIL has
assigned BBB Stable rating to fund based long term bank loans and A3
rating to non-fund based facilities from State Bank of India. Our
rating reflects moderate safety to timely payment of financial
obligations and comes under Investment Grade rating. The Company has
obtained ISO 9001:2008 and ISO 9001:2000 Quality Certificates for its
Synthetic Leather and Electronic Gauge Division respectively.
INSURANCE CLAIM
The company''s insurance claim of Rs. 48.96 lakhs regarding fire accident
in November, 2001 continues to be pending in Delhi High Court.
Necessary provisions would be made after the case is settled by the
court. The company has taken adequate insurance cover for the building,
Plant & Machinery and inventory.
FUTURE PROSPECTS
Market conditions for both PU/PVC Synthetic Leather and Electronic
Gauge Division are tough due to difficult economic condition in both
domestic and international market. Despite this the management has been
able to maintain sales due to continuous Modernization and development
of innovative products. The company has further widened its product
range and geographical market reach and hence hopeful of better sales
and profit in the current year.
PERFORMACNE OF JASCH NORTH AMERICA COMPANY / INDEV GAUGING SYSTEM INC,
USA
Indev Gauging Systems Inc, which is a wholly owned subsidiary of Jasch
North America Ltd, (the latter in turn being the wholly owned
subsidiary of Jasch Industries Ltd) achieved gross sales and other
income of USD equivalent of INR 11,66,97,652 with net profit of USD
equivalentofINR 22,99,418 duringtheyearendedon31st December, 2013.
CONSOLIDATED ACCOUNTS
In accordance with the requirements of accounting standard (AS) 21
prescribed by The institute of chartered Accountants of India, the
consolidated accounts of the Company and its wholly owned subsidiary
are annexed to this report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Please refer to Annexure A to this Report.
INFORMATION PURSUANT TO SECTION 217(1) (a) OF THE COMPANIESACT,1956
Information in accordance with section 217 (1) (a) of Companies Act,
1956 read with rule 2 of the Companies (Disclosure of Particulars in
the Report of Board of Directors ) Rules, 1988 and Particulars Relating
to Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo is at Annexure B to this Report.
CORPORATE GOVERNANCE
Corporate Governance Report (which also contains disclosures required
to be mentioned in the Board of Directors'' Report pursuant to Schedule
V, Part II, Section II of the Companies Act, 2013) is contained as a
separate Section in the Annual Report and forms a part of the the Board
of Directors'' Report.
INFORMATIONINACCORDANCEWITH SECTION 217(2A) OF THE Companies ACT 1956
WITH Companies (PARTICULARS OFEMPLOYEES)RULES1975.
The Company hadnoemployees drawing remunerationof Rs. 60 lakhs or more
per annum or, if employed for a part of the year, Rs. 5 lakhs or more
per month during the year under report.
FIXED DEPOSITS
The Company did not accept/renew any fixed deposits during the year
under report. The deposit outstanding as on 31st March 2014 was Nil.
However, with the coming into effect of Companies Act, 2014, unsecured
loans received from relatives of Directors (now included within the
meaning of "deposits") will be suitably dealt with in accordance with
law.
LISTING
The Shares of the Company are listed at Stock Exchanges at Mumbai and
Kolkata.
DIRECTORS
Shri Navneet Garg, Director retires by rotation at this Annual General
Meeting and being eligible, offers himself for re-appointment. Shri
Naresh Kumar was appointed non-executive Additional Director
(Indpendent) w.e.f. 31-05-2014. The directors recommend their
reappointments. A brief resume of these proposed (re)appointees is
given in the Corporate Governance Report. Dr. Ashok Mittal, Director
and Shri OP Garg, Executive Director resigned w.e.f. 30-04-2014 and the
management would like to place on record the rich contribution madeby
themonthe BoardofDirectorsof the Company.
AUDITORS & THEIR REPORT
M/s Arora and Choudhary Associates, Chartered Accountants retire as
Auditors of the Company at the ensuing Annual General Meeting and being
eligible, offer themselves for re-appointment. The company has received
a letter from them that their reappointment, if made would be within
the prescribed limit under Companies Act, 2013 and that they are not
disqualified from being reappointed as Auditor U/s 141. The Directors
and the Audit Committee recommend their re-appointment. Auditors''
Report is self-explanatory and requires no comments by the Directors.
COST AUDIT
In compliance with an order issued by the Cost Audit Branch of Ministry
of Corporate Affairs, Government of India, vide F. No. 52/26/CAB-2010
dated 24th January, 2012, the Board, in its meeting held on 25th May,
2013 appointed M/s Vipul Bhardwaj & Co, Cost & Management Accountants,
Sonipat, as Cost Auditors of the Company for the Financial Year
2013-14. The scope of their audit was the same as defined or prescribed
under Section 233B of Companies Act, 1956, the Order ibid and any other
directions, guidelines or orders that may be issued by the Government,
any professional Institute and the Audit Committeeofthe Company.
The Board, in its Meeting held on 31st May, 2014 had re-appointed M/s
Vipul Bhardwaj & Co as Cost Auditors (subject to approval of Central
Government and Members in the Annual General Meeting) for the Financial
Year 2014-15 under the aforesaid notification which was still in force
at that time. In the meanwhile, the law has changed and the Company is
no longer required to appoint Cost Auditors. Therefore, their
re-appointment for the Financial Year 2014-15 is not being put up to
the Members for their approval.
AUDIT COMMITTEE
The Audit Committee constituted by the Board in compliance with Section
292A of the Companies Act, 1956 and under the Listing agreement,
comprised of Dr. K.C. Varshney, Shri Kuldeep Singal and Shri S.K.
Khandelwal all of whom are non-executive Directors. Dr. Varshney, who
is the Chairman of the Audit Committee, is a retired executive director
of Industrial Development Bank of India with more than 40 years''
experience in the field of corporate finance, and as such has sound
knowledge of financial matters. The finance executives and statutory
auditors of the Company are permanent invitees to the Audit Committee
Meetings. Shri S.K. Verma, Company Secretary is the Secretary of the
Audit Committee.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, as introduced
by Companies (Amendment) Act, 2000, the Directors confirm that:
(i) In the preparation of the annual accounts, the applicable
accounting standards have been followed;
(ii) Appropriate accounting policies have been selected and applied
consistently, and judgments and estimates made 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, 2014 and of the profits of the Company
for the year ended 31st March, 2014.
(iii) Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 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.
ACKNOWLEDGMENTS
Your directors are pleased to place on record their sincere thanks to
the Bankers and business associates of the company for their continued
and valuable co-operation and support to the Company.
Your Directors also express their appreciation for the hard work and
sincere services rendered by workers, staff and executives of the
Company during the year.
For & on behalf of the Board
Place : Sonipat
Date : 26th July, 2014 (J.K.GARG)
Chairman
Mar 31, 2012
The Directors have pleasure in presenting the 26th Annual report and
audited accounts of the company for the year ended 31st March 2012.
FINANCIAL RESULTS Rs. lakh
Particulars Current year Previous Year
2011-12 2010-11
Gross Sales 8620.19 8252.74
Less Excise Duty/VAT/Service Tax 766.76 723.27
Net Sales Turnover 7853.43 7529.47
Other Income 32.70 21.98
Net sales and & other income 7886.13 7551.45
Operating Profit before Interest,
Depreciation, Income Tax, Exceptional
Items & Prior Periods Adjustments 907.25 842.89
Interest & Financial Charges 274.28 226.44
Gross Profit Before Depreciation 632.97 616.45
Depreciation 242.60 180.33
Less : Provision for income tax 78.28 133.41
Net profit before deferred tax 312.09 302.71
Add / (Deduct) : Provisions for
deferred Tax (Assets) / Liability 23.14 26.51
Net profit available for appropriation 288.95 276.20
Surplus brought forward from previous year 993.64 879.55
transfer to general reserve - 30.00
Provision for dividend including
dividend distribution tax - 132.11
surplus carried forward 1282.59 993.64
DIVIDEND
In view of need for augmenting working capital resources and tough
economic situation in the ensuing year the Management has not proposed
any dividend for the year ended on 31st March, 2012.
PERFORMANCE DURING THE YEAR
Your company had achieved gross sales of 8620.19 lakh during 2011-2012
which were 4.4% higher as compare with the sales of previous year. The
sales of Synthetic Leather Division at Rs. 6251.83 lakh during 2011-12
were 4.5 % lower as compared with the sales of previous year. However
the sales of Electronic Gauge Division at Rs. 2368.36 lakh during the
year were 39% higher as compare with the previous year. The Electronic
Gauge Division has achieved the export of Rs. 777 lakh during the year
despite acute recessionary conditions and slowdown of capital
investment in international market.
The company's operating profit before interest, depreciation, income
tax and deferred tax has increased by 7.6% to Rs. 907.25 lakh during
2011-12 as compared with Rs. 842.89 lakh during the previous year. The
improvement in the operating profit has been achieved despite sharp
increase in the prices of raw material on account of inflationary
pressure in the economy. The interest and finance charges have sharply
increased from Rs. 226.44 lakh during 2010-11 to Rs. 274.28 lakh during
2011-12 due to capitalization of loan for DMF Recovery Plant and loss
of Rs. 44 lakh during the year due to exchange fluctuation.
The gross profit before interest and depreciation has also increased to
Rs. 632.97 lakh during the year 2011-12 which is marginal 2.6% higher
than the previous year. After providing depreciation of Rs. 242.60 lakh
and provision of income tax of Rs. 78.28 lakh the company has achieved
net profit (before deferred tax) of Rs. 312.09 lakh, which was marginally
higher as compared with net profit of Rs. 302.71 lakh in the previous
year. After providing deferred income tax of Rs. 23.14 lakh consequent
to capitalization of fixed assets the company has achieved net profit
of Rs. 288.95 lakh as compared with Rs. 276.20 lakh in the previous year.
The cash profit of the company without taking in to account notional
deferred tax was Rs. 554.69 lakh during the year 2011-12 as compared with
Rs. 483 lakh in the previous year. Keeping in view recessionary
conditions prevailing in the local and international market, sharp
increase in the prices of main raw materials and exchange fluctuation
losses the management considers overall performance of the company
during the year under review quite satisfactory.
CREDIT RATING AND ISO 9001 CERTIFICATION
The company's performance and financial position was rated by CRISIL
Ltd, the Premier credit rating agency in the country. CRISIL has
assigned BBB Stable rating to fund based long term bank loans and P-3
to non-fund based facilities from State Bank of India. Our rating
reflects moderate safety to timely payment of financial obligations and
comes under Investment Grade rating. The Company has obtained ISO
9001:2008 and ISO 9001:2000 Quality Certificates for its Synthetic
Leather and Electronic Gauge Division respectively.
INSURANCE CLAIM
The company's insurance claim of Rs. 48.96 lakhs regarding fire accident
in November, 2001 continues to be pending in Delhi High Court.
Necessary provisions would be made after the case is settled by the
court. The company has taken adequate insurance cover for the building,
Plant & Machinery and inventory.
FUTURE PROSPECTS
The company has achieved consistent increase in production and sales in
the last few years due to the Management's focus on continuous up-
gradation and modernization of plant and machinery. However in view of
recessionary conditions in local and international market and almost
25% depreciation in the value of ' against dollar resulting in sharp
increase in the prices of raw material, the Management is cautious
about Performance of the company in current year. The Management is
focusing its efforts to reduce the cost of production and optimizing
existing resourses of the company during the year.
ACQUISITION OF INDEVGAUGING SYSTEM INC, USA
The company's sales in Electronic Gauging Division has been stagnant in
the last 3-4 years mainly due to saturation of local market and
recession in the economy. Electronic Gauging System being capital goods
item the fortune of Electronic Gauge System is linked with investment
in plant and machinery in user industries i.e. Steel, Paper, Aluminum
etc. With a view to increase its presence in the international market,
particularly in the USA, which is the largest market of Electronic
Gauges in the world, the company has identified a small manufacturing
and marketing company Indev Gauging System Inc in USA. The company has
purchased 100% share holding of Indev Gauging System Inc, USA through a
wholly owned subsidiary company named Jasch North America Company
incorporated in USA. The total cost of acquisition was USD 1 million
equivalent to Rs. 517 lakh, financed through unsecured loan of Rs. 275 lakh
brought in the company by the Private Promoters and balance through
internal cash accruals of the company. The company has also incurred
expenditure of Rs. 87 lakh for due diligence for the acquisition which is
being amortized during 2011-12 and next 2 years.
CONSOLIDATED ACCOUNTS:
In accordance with the requirements of Accounting Standard (AS) 21
prescribed by The Institute of Chartered Accountants of India, the
Consolidated Accounts of the Company and its Subsidiary is annexed to
this Report.
MANAGEMENT DISCUSSION ANDANALYSIS REPORT :
Please refer to Annexure A to this Report.
INFORMATION PURSUANT TO SECTION 217(1)(a) OF THE COMPANIES ACT, 1956
Information in accordance with section 217 (1) (a) of Companies Act,
1956 read with rule 2 of the Companies (Disclosure of Particulars in
the Report of Board of Directors ) Rules, 1988 and Particulars Relating
to Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo is at Annexure B to this Report.
CORPORATE GOVERNANCE
Corporate Governance Report is contained as a separate Section in the
Annual Report.
INFORMATION IN ACCORDANCE WITH SECTION 217 (2A) OF THE Companies ACT
1956 WITH Companies (PARTICULARS OF EMPLOYEES) RULES 1975.
The Company had no employees drawing remuneration of Rs. 60 lakhs or more
per annum or, if employed for a part of the year,Rs. 5 lakhs or more per
month during the year under report.
FIXED DEPOSITS
The Company did not accept/renew any fixed deposits during the year
under report. The deposit outstanding as on 31st March 2012 was Nil.
LISTING
The Shares of the Company are listed at Mumbai Stock Exchange and
Kolkata Stock Exchange.
DIRECTORS
Dr. Ashok Mittal and Dr. K.C. Varshney, Directors, retire by rotation
at the ensuing Annual General Meeting and being eligible, offer
themselves for re-appointment. The directors recommend their
reappointments. A brief resume of these proposed re-appointees is given
in the Corporate Governance Report.
AUDITORS & THEIR REPORT
M/s Arora and Choudhary Associates, Chartered Accountants retire as
Auditors of the Company at the ensuing Annual General Meeting and being
eligible, offer themselves for re-appointment. The company has received
a letter from them that their reappointment, if made would be within
the prescribed limit under section 224(1B) of Companies Act, 1956 and
that they are not disqualified from being reappointed as Auditor U/s
226. The Directors and the Audit Committee recommend their
re-appointment. Auditors' Report is self-explanatory and requires no
comments by the Directors.
AUDIT COMMITTEE
The Audit Committee constituted by the Board in compliance with Section
292A of the Companies Act, 1956 and under the Listing agreement,
comprised of Dr. K.C. Varshney, Shri Kuldeep Singal and Shri S.K.
Khandelwal all of whom are non-executive Directors. Dr. Varshney, who
is the Chairman of the Audit Committee, is a retired executive director
of Industrial Development Bank of India with more than 40 years'
experience in the field of corporate finance, and as such has sound
knowledge of financial matters. The finance executives and statutory
auditors of the Company are permanent invitees to the Audit Committee
Meetings. Shri S.K. Verma, Company Secretary is the Secretary of the
Audit Committee.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, as introduced
by Companies (Amendment) Act, 2000, the Directors confirm that:
(i) In the preparation of the annual accounts, the applicable
accounting standards have been followed;
(ii) Appropriate accounting policies have been selected and applied
consistently, and judgments and estimates made 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, 2012 and of the profits of the Company
for the year ended 31st March,2012.
(iii) Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 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.
ACKNOWLEDGMENTS
Your directors are pleased to place on record their sincere thanks to
the Bankers and business associates of the company for their continued
and valuable co-operation and support to the Company.
Your Directors also express their appreciation for the hard work and
sincere services rendered by workers, staff and executives of the
Company during the year.
For & on behalf of the Board
Place: Sonepat
Date : 29th June, 2012
(J. K. GARG)
Chairman
Mar 31, 2010
The Directors have pleasure in presenting the 24th Annual Report and
Audited Accounts of the Company for the year ended 31st March, 2010.
FINANCIAL RESULTS (Rs. in lakh)
Particulars Current Previous
Year Year
2009-10 2008-09
Gross Sales 7033.77 5626.17
Less Excise Duty/vat/service tax 486.64 458.22
Net Sales Turnover 6547.14 5167.95
Other Income 52.40 46.31
Net sales and & other income 6599.53 5214.26
Operating Profit before Interest,
Depreciation, Income Tax, Exceptional
Items & Prior Periods Adjustments 656.14 592.41
Interest & Financial Charges 200.90 218.62
Gross Profit Before Depreciation 455.24 373.79
Depreciation 172.12 163.35
Less : Provision for income tax 94.21 59.95
Net profit before deferred tax 188.91 150.49
Add / (Deduct) : Provisions for
deferred Tax (Assets) / Liability (3.69) (25.84)
Net profit available for appropriation 185.22 124.65
Surplus brought forward from previous year 694.33 627.86
transfer to general reserve - -
surplus carried forward 879.55 694.33
DIVIDEND
The company requires internal resources for expansion & modernization
and augmentation of long term resources for working capital with a view
to support increasing production and sales, hence the Board has not
recommended any dividend for the year ended on 31st March, 2010.
PERFORMANCE DURING THE YEAR
Yours company has achieved gross sales of Rs. 7033.77 lakh during
2009-10 which were 25.02 % higher as compared with the sales of
previous year. The sales of Synthetic Leather Division at Rs. 5390 lakh
during 2009-10 were higher by 39.5 % as compared with the sales of
previous year. The sales of Electronic Gauge Division at Rs. 1643.77
lakh were marginal 6.7% less as compared with sales of Rs. 1762.37
lakh during previous year. The Electronic Gauge Division has achieved
export of Rs. 838 lakh during the year under review as compared with
Rs. 783.0 lakh during 2008-09 and small decline in domestic sale is due
to recessionary conditions in user industries of the capital goods
items.
The growth of 39.5% in production and sales of Synthetic Leather
Division was due to continuous Modernization and Upgradation of Plant &
Machinery and development of innovative products for international shoe
manufacturers like Reebok, Adidas, Nike etc, which require very
stringent quality standard. The company has also made a small
breakthrough in international market by exporting Synthetic Leather of
Rs. 37 lakh during 2009-10.
The companys Operating Profit before depreciation, income tax,
deferred Tax has increased by 11%, to Rs. 656.14 lakh as compared with
the previous years profit of Rs. 592.41 lakh. There was pressure on
margin due to escalating cost of raw material on account of
inflationary pressure in the economy, which the company could not pass
on to its customers immediately. Despite about 25% increase in
production and sales during the year 2009-10, the company has been able
to contain interest charges at almost the same level of Rs. 200 lakh
during the year due to efficient management of inventory and working
capital resources.
The gross profit before depreciation and income tax has also increased
to Rs. 455.24 lakh during the year 2009-10, which was 21.72% higher,
then that of the previous year. After providing depreciation of Rs.
172.12 lakh & provision of Income Tax of Rs. 94.21 lakh, the company
has earned net profit before deferred tax of Rs. 188.91 lakh which was
higher by 25.53% as compared with net profit before deferred tax of Rs.
150.49 lakh in the previous year. After providing deferred income tax
of Rs. 3.69 lakh, the company has achieved net profit of Rs. 185.22
lakh during the year under review as compared with net profit of Rs.
124.65 lakh during the previous year when the provision for deferred
tax was higher at Rs. 25.84 lakh. The cash profit of the company
without taking into account deferred tax liabilities has increased from
Rs. 313.84 lakh during the previous year to Rs. 361.03 lakh during the
year 2009-10. In view of recessionary trend prevailing in the
international market and wide fluctuation in the prices of major raw
material during the year, the Management considers performance of the
company during the year under review as quite satisfactory.
CREDIT RATING AND ISO 9001 CERTIFICATION
The Companys performance and financial position was rated by CRISIL
Ltd, the Premier credit rating agency in the country. CRISIL has
assigned BBB Stable rating to fund based long term bank loans and P3+to
non-fund based facilities from State Bank of India. Our rating reflects
moderate safety to timely payment of financial obligations and comes
under Investment Grade rating. The Company has obtained ISO 9001:2008
and ISO 9001:2000 Quality Certificates for its Synthetic Leather and
Electronic Gauge Division respectively.
INSURANCE CLAIM
The companys insurance claim of Rs. 48.96 lakhs regarding fire
accident in November, 2001 is pending in Delhi High Court. Necessary
provisions would be made after the case is settled by the court. The
company has taken adequate insurance cover for the building, Plant &
Machinery and inventory.
FUTURE PROSPECTS
The company has achieved consistent increase in production and sales in
the last few years due to the Managements focus on continuous
upgradation and modernization of plant and machinery and development of
innovative products. The Management is further planning for upgradation
of existing DMF recovery Plant which besides increasing production
capacity of PU synthetic Leather by 50%, will also result in
substantial saving in cost of power and fuel, thereby improving
profitability of the company in the next 2 - 3 years. In view of this,
the Management is optimistic about better results in the current " year
as well as in future.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT :
Please refer to Annexure A to this Report.
INFORMATION PURSUANT TO SECTION 217(l)(a) OF THE COMPANIES ACT, 1956
Information in accordance with section 217 (1) (a) of Companies Act,
1956 read with rule 2 of the Companies (Disclosure of Particulars in
the Report of Board of Directors ) Rules, 1988 and
Particulars Relating to Conservation of Energy, Technology Absorption
and Foreign Exchange Earnings and Outgo is at Annexure B to this
Report.
CORPORATE GOVERNANCE
Corporate Governance Report is contained as a separate Section in the
Annual Report.
INFORMATION IN ACCORDANCE WITH SECTION 217 (2A) OF THE Companies ACT
1956 WITH Companies (PARTICULARS OF EMPLOYEES) RULES 1975.
The Company had no employees drawing remuneration of Rs. 24 lakhs or
more per annum or, if employed for a part of the year, Rs. two lakh or
more per month during the year under report.
FIXED DEPOSITS
The Company did not accept/renew any fixed deposits during the year
under report. The deposit outstanding as on 31st March 2010 was Nil.
DELISTING FROM AHMEDABAD STOCK EXCHANGE
The Company had sought voluntary delisting of its shares from Stock
Exchanges at Ahmedabad and Kolkata pursuant to SEBI (Delisting of
Shares) Regulations, 2009. The Shares of the Company have been delisted
from Ahmedabad Stock Exchange w.e.f. 6th January, 2010. No response
has been received from Kolkata Stock Exchange inspite of repeated
reminders.
DIRECTORS
Shri Navneet Garg and Shri Kuldeep Singal, Directors, retire by
rotation at the ensuing Annual General Meeting and being eligible,
offer themselves for re-appointment. The directors recommend their
reappointments. A brief resume of these proposed re-appointees is given
in the Corporate Governance Report. Justice A.S Garg (Retired) resigned
during the year from directorship of the company due to his other
commitments. The Board places on record its appreciation to the
contribution made by Justice Garg in the Board Meetings during his
tenure.
AUDITORS & THEIR REPORT
M/s Arora and Choudhary Associates, Chartered Accountants retire as
Auditors of the Company at the ensuing Annual General Meeting and being
eligible, offer themselves for re-appointment. The company has received
a letter from them that their reappointment, if made would be within
the prescribed limit under section 224(1B) of Companies Act, 1956 and
that they are not disqualified from being reappointed as Auditor U/s
226. The Directors and the Audit Committee recommend their
re-appointment. Auditors Report is self-explanatory and requires no
comments by the Directors.
AUDIT COMMITTEE
The Audit Committee constituted by the Board in compliance with Section
292A of the Companies Act, 1956 and under the Listing agreement,
comprised of Dr. K.C. Varshney, Shri Kuldeep Singal and Shri S.K.
Khandelwal all of whom are non-executive Directors. Dr. Varshney, who
is the Chairman of the Audit Committee, is a retired executive director
of Industrial Development Bank of India with more than 38 years
experience in the field of corporate finance, and as such has sound
knowledge of financial matters. The finance executives and statutory
auditors of the Company are permanent invitees to the Audit Committee
Meetings. Shri S.K. Verma, Company Secretary is the Secretary of the
Audit Committee.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, as introduced
by Companies (Amendment) Act, 2000, the Directors confirm that:
(i) in the preparation of the annual accounts, the applicable
accounting standards have been followed;
(ii) Appropriate accounting policies have been selected and applied
consistently, and judgments and estimates made 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, 2010 and of the profits of the Company
for the year ended 31st March, 2010.
(iii) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 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.
ACKNOWLEDGMENTS
Your directors are pleased to place on record their sincere thanks to
the Bankers and business associates of the company for their continued
and valuable co-operation and support to the Company.
Your Directors also express their appreciation for the hard work and
sincere services rendered by workers, staff and executives of the
Company during the year.
For & on behalf of the Board
Place :Sonepat
Date : 12th June, 2010 (J. K. GARG)
Chairman