DIRECTORS' REPORT TO THE SHAREHOLDERS Your Directors have pleasure in presenting the 19th Annual Report on the business and operations of the Company together with the audited accounts of your Company for the year ended 31st March, 2015. 2. DIVIDEND AND APPROPRIATION (A) Dividend Your Directors are pleased to recommend a dividend of Rs. 2.50 per equity share (50% of Rs. 5/- each for the financial year 2014-15) as against the dividend of Rs. 3/- per equity share (30% of Rs. 10/- each for the financial year 2013-14). (B) Appropriation During the Financial year 2014-15, an amount of Rs. 1.50 crore (Rs. 2.44 crore in the financial year 2013-14) was transferred to General Reserve of the Company. 3. STATE OF THE COMPANY'S AFFAIRS Financial Year 2014-15 has been yet another year of achievements for your Company. During the year under review, your Company performed well in this economic crisis and unfavorable economic condition. During the year under review, on standalone basis, your Company achieved, a Total Revenue of Rs. 608.50 crore as against Rs. 572.37 crore recorded in the previous year, registering a growth of 6.31 %. The profit after tax (PAT) increased to Rs. 33.60 crore from Rs. 24.31 crore in the previous year, registering a growth of 38.21 %. During the year under review, on consolidated basis, your Company achieved a total revenue of Rs. 1561.04 crore as against Rs. 1369.48 crore recorded in the previous year, registering a growth of 13.99 %. The profit after tax (after minority interest) increased to Rs. 76.41 crore from Rs. 50.21 crore in the previous year, registering a growth of 52.18 % 4. MATERIAL CHANGES AND COMMITMENTS During the year under review, your Company has approved and issued the following: 1. Sub-division of the face value of equity share from Rs. 10/- each to Rs. 5/- each. 2. Issue of Bonus Shares in the ratio 1:1 i.e. One new equity share for existing one equity share held. All the legal compliances under Companies Act, 2013 and listing Agreement in this regard had been completed. 5. CORPORATE GOVERNANCE REPORT A Report on Corporate Governance along with a Certificate from the Secretarial Auditor of the Company regarding the compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report. 6. MANAGEMENT DISCUSSION AND ANALYSIS REPORT A detailed analysis of the Company's operational and financial performance as well as the initiatives taken by the Company in key functional areas such as Human Resources, Quality, etc. are given in the Management Discussion and Analysis Report, which forms part of this Annual Report. This report also discusses in detail, initiatives taken by the Company in the areas of Corporate Social Responsibility and Sustainability. 7. PARTICULARS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTED OR RESIGNED (i) Directors Mr. H. R. Saini, Executive Director of the Company has retired from the Directorship of the Company w.e.f. 7th June, 2015. Your directors have appointed Mr. Sandip Sanyal as Additional Director of the Company, who shall hold office upto the date of ensuing Annual General Meeting of the Company. The Company has received requisite notice in writing from a member of the Company proposing the candidature of Mr. Sandip Sanyal for the office of Director. In terms of the Articles of Association of the Company and the provisions of the Companies Act, 2013, Mr. Mahesh Kumar Aggarwal and Mr. Ashok Kumar Agarwal, Non-Executive Independent Directors of the Company shall not retire by rotation in the ensuing Annual General Meeting. Further, in terms of the Articles of Association of the Company and the provisions of section 154 of the Companies Act, 2013, Mr. Nishant Arya, will retire by rotation, at the ensuing Annual General Meeting. Mr. Nishant Arya, being eligible, offers himself for re-appointment. The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as provided under Section 149(6) of the Companies Act, 2013 ("the Act") and Clause 49 of the Listing Agreement with the Stock Exchanges. The terms of appointment of Independent Directors may be accessed on the Company's website at the link: <http://www.jbm-group.com/pdfs/jbm-auto-appointment-of-Independent-directors.pdf>. (ii) Key Managerial Personnel Mr. H. R. Saini, Executive Director (retired on 07.06.2015) and Mr. Vivek Gupta, CFO & Company Secretary of the Company, the Key Managerial Personnel were already in the office before the commencement of the Companies Act, 2013. The Board of Directors in their meeting held on 6th February, 2015 designated them as 'Key Managerial Personnel' of the Company in terms of Section 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Further, the Board of Director at their meeting held on 18.05.2015 have appointed Mr. Sandip Sanyal as Executive Director under the category of 'Key Managerial Personnel' of the Company in terms of Section 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. 8. COMPLIANCE UNDER COMPANIES ACT, 2013 Pursuant to Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, your Company complied with the compliance requirements and the detail of compliances under Companies Act, 2013 are enumerated below: 8.1. Extract of Annual Return An extract of Annual Return in Form MGT-9 as on March 31, 2015 is attached as Annexure-I to this Report. 8.2. Board Meetings held during the year During the year, 5 meetings of the Board of Directors were held. The details of the meetings are furnished in the Corporate Governance Report. 8.3. Directors' Responsibility Statement Your Directors make the following statement in terms of Section 134(3)(c) of the Companies Act, 2013, to the best of their knowledge and belief and according to the information and explanation obtained by them: (a) that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) that we had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for that period; (c) that we had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; (d) that we had prepared the annual accounts on a going concern basis; (e) that we had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and (f) that we had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 8.4. Policy on Directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters as provided under section 178(3) of the Companies Act, 2013 The Remuneration policy of the Company containing the appointment and remuneration of the Directors, Key Managerial Personnel and Senior Executives of the Company including criteria for determining qualifications, positive attributes, independence of a Director and other related matters has been provided in the Corporate Governance Report. 8.5. Particulars of Loans, Guarantees or Investments under Section 186 of the Companies Act, 2013 Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the financial statement and forms part of the Annual Report. 8.6. Particulars of contracts or arrangements with related parties referred to section 188(1) of the Companies Act, 2013 All transactions entered by the Company with Related Parties were in the Ordinary Course of Business and at Arm's Length pricing basis. The Audit Committee granted omnibus approval for the transactions (which are repetitive in nature) and the same was reviewed by the Audit Committee and the Board of Directors. There were no materially significant transactions with Related Parties during the financial year 2014-15 which were in conflict with the interest of the Company. Suitable disclosures as required under AS-18 have been made in Note 25 of the notes to the financial statements. The Form AOC-2 for the transactions made with the related parties during the financial year 2014-15 is attached as Annexure - II. The policy on materiality of and dealing with related party transaction as approved by the Board of Directors of the Company may be accessed on the web site of the Company at the web link: <http://www.jbm-group.com/pdfs/JBMA_Auto_tp.pdf> 8.7. AUDITORS (A) Statutory Auditor M/s. Mehra Goel & Co, Chartered Accountants, Statutory Auditors, will retire at the close of ensuing Annual General Meeting and are eligible for re-appointment. The Company has received confirmation from them regarding their consent and eligibility under Sections 139 and 141 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 for appointment as the Auditors of the Company. (B) Secretarial Auditor Pursuant to provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, your Company has engaged the services of Ms. Sunita Mathur, Company Secretary in Practice, New Delhi to conduct the Secretarial Audit of the Company for the financial year ended March 31, 2015. The Secretarial Audit Report (in Form MR-3) is attached as Annexure-III to this Report. 8.8. Comments by the Board on Audit Qualification (i) Statutory Audit report There are no qualifications, reservations or adverse remarks or disclaimers made by the statutory auditors, in their audit report on standalone financial statement of the Company. However, auditors have given qualified opinion in their audit report on the consolidated financials of the Company. Management Response & Comments by the Board on Audit Qualification is given at the page no. 94. (ii) Secretarial Audit report There are no qualifications, reservations or adverse remarks or disclaimers made by the Secretarial Auditor, in the Secretarial Audit report. 8.9. Risk Management Your Company has a robust Risk Management policy. The Company through a Risk Management Committee oversees the Risk Management process including risk identification, impact assessment, effective implementation of the mitigation plans and risk reporting. The Board had approved policy on Risk Management. The policy has been uploaded on the Company's website, under the web link: <http://www.jbm-group.com/pdfs/Risk-Management-Policy.pdf> 8.10. Corporate Social Responsibility Initiatives During the year, your directors have constituted the Corporate Social Responsibilities (CSR) Committee comprising Mr. S. K. Arya as Chairman, Mr. Nishant Arya and Mr. Mahesh Kumar Aggarwal as other members. The said committee has been entrusted with the responsibilities of formulating and recommending to the Board, a CSR Policy indicating the activities to be undertaken by the Company, monitoring the implementation of the framework of the CSR Policy and recommending to the Board the amount to be spent on CSR activities. The CSR policy may be accessed on the Company's website at the link: <http://www.jbm-group.com/pdfs/JBMA_Auto_CSR_Policy.pdf>. The report on CSR activities is attached as Annexure-IV to this Report. 8.11. Board Evaluation Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, Independent Directors at their meeting without the participation of the Non-independent Directors and Management, considered/evaluated the Boards' performance, performance of the Chairman and other Non-independent Directors. The Board subsequently evaluated its own performance, the working of its Committees (Audit, Nomination and Remuneration and Stakeholders Relationship Committee) and Independent Directors (without participation of the Director being evaluated). 8.12. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo Your Company continuously strives to conserve energy, adopt environment friendly practices and employ technology for more efficient operations. The particulars relating to the energy conservation, technology absorption and foreign exchange earnings and outgo, as required under Section134(3)(m) of the Companies Act, 2013 are given in the Annexure V to this Report. 9. DISCLOSURES (a) Audit Committee The Audit Committee comprises of two Independent Directors & one Non-Executive Director namely Mr. Ashok Kumar Agarwal as Chairman, Mr. Mahesh Kumar Aggarwal and Mr. S. K. Arya as members. All the recommendations made by the Audit Committee were accepted by the Board. (b) Nomination and Remuneration Committee The Nomination and Remuneration Committee comprises of two Independent Directors & one Non-Executive Director namely Mr. Ashok Kumar Agarwal, Mr. Mahesh Kumar Aggarwal and Mr. S. K. Arya. (c) Vigil Mechanism/ Whistle Blower Policy Pursuant to Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Clause 49 of the Listing Agreement, the Board of Directors had approved the Policy on Vigil Mechanism/ Whistle Blower and the same was hosted on the website of the Company. This Policy inter-alia provides a direct access to the Chairman of the Audit Committee. Your Company hereby affirms that no director/ employee has been denied access to the Chairman of the Audit Committee and that the complaints received were addressed properly during the year. The policy has been uploaded on the Company's website, under the web link:<http://www.jbm-group.com/investor-jal-wbp>. aspRs.lk=investor2b3 (d) Public Deposits, Loans/ Advances/Guarantees/Investments Your Company has not accepted any deposits from the public or its employees during the year under review. (e) Significant and Material Orders Passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company. (f) Internal Control Systems and their adequacy Details of the same are provided in the Management Discussion and Analysis Report to this Report. (g) Subsidiary Companies Your Company has two subsidiaries namely: i) M/s JBM Auto System Private Limited, and ii) M/s JBM Ogihara Automotive India Limited Your Company monitors performance of subsidiary companies, inter-alia, by the following means: a) The Company has one material unlisted Indian subsidiary i.e. M/s JBM Auto System Private Limited, and Mr. Mahesh Kumar Aggarwal, Independent Director of the Company has been nominated on the Board of material subsidiary. Further, Mr. Sandip Sanyal has been appointed as Key Managerial Personnel (KMP) in JBM Auto Limited. He has also been appointed as Key Managerial Personnel (KMP) in JBM Auto System Private Limited and he will be involved in monitoring the progress of JBM Auto System Private Limited. b) The Audit Committee reviews the financial statements, in particular, the investments made by the unlisted subsidiary company. c) The minutes of the Board Meetings of the unlisted subsidiary companies are placed at the Board Meeting of the Company. d) Your Company formulated a Policy on Material Subsidiary as required under Clause 49(V)(D) and the policy is hosted on the website of the Company under the web link <http://www.jbm-group.com/pdfs/JBMA_Auto_Material-Subsidiary.pdf> (h) Salient Features of the Financial Statements of Subsidiaries, Associates and Joint Ventures Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, the statement containing salient features of the financial statements of the Company's Subsidiaries' and Associates' in Form AOC-1 is attached to the financial statements. (i) Consolidated Financial Statements The Consolidated Financial Statements of the Company and its subsidiaries, prepared in accordance with applicable Accounting Standards form part of this Annual Report. The Consolidated Financial Statements presented by the Company include the financial results of its two subsidiary companies and two joint venture companies. (j) Particulars of Employees and Related Disclosures In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules form part of the Annual Report. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 form part of the Annual Report. Having regard to the provisions of Section 136(1) read with its relevant proviso of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished without any fee. Any shareholder interested in obtaining a copy of the statement may write to the Company. (k) Material changes and commitment affecting financial position of the Company There are no material changes and commitments, affecting the financial position which has occurred between the end of the financial year of the Company i.e. 31st March, 2015 and the date of the Directors' Report i.e. 12th August, 2015. (l) No cases filed under section 22 of the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013. (m) No Stock Option was granted to the Directors or Employees of the Company. 10. CORPORATE GOVERNANCE Your Company is committed to achieve the highest standards of Corporate Governance and adheres to the Corporate Governance requirements set by the Regulators/ applicable laws. Our focus on corporate governance, where investor and public confidence in companies is no longer based strictly on financial performance or products and services but on a company's structure, its Board of Directors, its policies and guidelines, its culture and the behaviour of not only its officers and directors, but also all of its employees 11. ACKNOWLEDGEMENT AND APPRECIATION Your Directors take this opportunity to thank the Company's customers, shareholders, suppliers, bankers, financial institutions and the Central and State Governments for their unstinted support. The Directors would also like to place on record their appreciation to employees at all levels for their hard work, dedication and commitment. For and on behalf of the Board Sd/-S. K. ARYA Chairman DIN : 00004626 Date: 12.08.2015 Place: Gurgaon (Haryana) |