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Jamna Auto Industries Ltd.

BSE: 520051 | NSE: JAMNAAUTO |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE039C01032 | SECTOR: Auto Ancillaries

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Annual Report

For Year :
2018 2017 2016 2015 2014 2013 2012 2011 2010

Director’s Report

Dear Members,

The Directors have pleasure in presenting the 52nd Annual Report and Audited Financial Statements for the financial year ended March 31, 2018.

Financial Results-An Overview

(Rs. in crore)

Particulars

Standalone

Consolidated

Year Ended March 31, 2018

Year Ended March 31, 2017

Year Ended March 31, 2018

Year Ended March 31, 2017

Gross Sales

1630.85

1223.87

1757.32

1409.63

Net Sales

1608.55

1081.54

1738.13

1292.44

PBIDT

229.71

188.16

245.69

205.25

Finance cost

15.31

10.76

18.22

12.24

PBDT /Cash Profit

214.40

177.39

227.46

193.01

Depreciation

39.41

46.39

41.37

47.73

PBT

174.99

131.00

186.09

145.28

Provision for current tax

54.00

33.63

63.66

48.24

MAT

-

-

Provision for deferred tax

(4.36)

(6.67)

(2.88)

(7.92)

PAT

125.34

104.05

125.31

104.96

Other Comprehensive Income

(0.49)

(0.42)

(0.58)

(0.45)

Total Comprehensive Income

124.85

103.63

124.72

104.51

Balance brought forward

81.47

18.57

78.97

15.18

Payment/ Provision of dividend including tax

33.56

40.73

33.56

40.73

Retained earnings

172.77

81.47

170.14

78.97

Performance

Year 2017-18 turned out to be a good year for the domestic Commercial Vehicle (CV) segment. In the beginning of the FY 2018, the CV segment saw initial hiccups when the market was transiting to BS IV emission norms. From the beginning of second quarter of the FY 2018, the CV segment led by truck segment has been on a recovery phase aided by higher demand post GST implementation, stricter implementation of overloading norms. Overall CV segment grew at around 16% YoY.

The Company’s topline observed a growth as consolidated revenue rose to Rs. 1,740 crore compared to Rs. 1,292 crore in previous year. The consolidated PBT stood at Rs. 186 crore as compared to Rs. 145 crore in the previous year. In OE segment the Company continues to be a market leader in the multi-leaf springs and parabolic springs with 72% OEM market shares in India. Company’s lift axles have continue to get a good response from customers. The Company also palns to come out with new products i.e. Stablizer Bar, U-Bolt and Trailer Suspension in near future.

The after market segment is a core area of focus for the Company specially post implementation of GST. The Company expands its distribution network in India and abroad and adopted new branding and marketing strategies. The Company has launched the “JAI Vistar” initiative with loyalty programs for mechanics - “Jai Ho” scheme, retailers - “Jai Sarathi” scheme and distributors - “Jai Rising Star” scheme. Currently more than 10,000 mechanics and their families are being benefitted by the “Jai Ho” scheme. The Company has a very strong PAN India after-market network comprising of 11 depots, 300 distributors and 6,000 retailers, supplying 5,000 parts and catering to 10,000 mechanics. In order to promote the ease of doing business, supply chain system has been integrated with a state-of-the-art ERP system.

The Company serves its customers from its plants situated all across India. During the year under review, Yamuna Nagar and Malanpur Plants have been awarded the esteemed TPM Excellence Category ‘A’ award. Company’s focus to adopt best quality and service practices in manufacturing process to deliver quality products. The Company plans to continue to expand its manufacturing footprints by setting up further two plants one at Pithampur near Indore, Madhya Pradesh and other at Adityapur near Jamshedpur, Jharkhand.

During the year under review, The ICRA has maintained Company’s long term rating at AA- and short term rating at A1 with positive outlook. The rating of A1 has been assigned to the commercial papers issued by the Company.

The Company has moved a step closer to achieve the internal target in terms of ‘Project Lakshya’. A detailed discussion on the operations and performance for the year is given in the Management Discussion and Analysis (MDA) section in the annual report. For details, members are requested to please see MDA section.

There has been no change in the nature of business of the Company during the year under review. During the period under review and till the date of last reporting no such material changes/commitments have taken place as to affect the financial position of the Company.

Dividend

An interim dividend of Rs.0.30 per equity share of Rs.1/- each was declared and paid during the FY 2017-18. In addition, the Directors are pleased to recommend for your consideration a final dividend of Rs 0.55/- per equity share of Rs.1/- each. Payment of final dividend will be made subject to approval of the members of the Company at the ensuing Annual General Meeting. With the payment of final dividend, the total dividend payment for the FY 2017-18 would be Rs 0.85 per equity share of Rs.1 each.

Transfer to Reserves

The Company has not transferred any amount to the General Reserves for the FY ended March 31, 2018.

Fixed Deposit

During the year under review, your Company has not invited or accepted/renewed any fixed deposits from public under Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.

Energy Conservation, Technology Absorption & Foreign Exchange

In accordance with the requirements of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts)Rules, 2014, a statement showing particulars with respect to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo is annexed hereto as Annexure-1 and form an integral part of this report.

Risk Management Policy

One of the major aim of the project Lakshya is to de-risk the Company from market, operational and other risks. The Company has established a three layer framework for risk identification, evaluation, control, minimization and control. The Company also has a risk management policy in place. Risk management policy of the Company is available at the website of the Company at www.jaispring.com.

Vigil Mechanism / Whistle Blower

The Company has implemented whistleblower policy to deal with any fraud, irregularity or mismanagement in the Company. The policy enables any employee or director to directly communicate to the Chairman of the Audit Committee to report any fraud, irregularity or mismanagement in the Company. The policy ensures strict confidentiality while dealing with concerns and also that no discrimination or victimization is meted out to any whistleblower. The policy is also hosted on the website of the Company at www.jaispring.com.

Corporate Social Responsibility (CSR)

Diligently discharging its social responsibility is a part of Company’s core strategy. As a responsible organization focused on inclusive growth, the Company emphasizes on environment conservation and sustainability, promotion of education, promotion of sports and community outreach as per the CSR Policy of the Company. In recognition to our contribution to CSR, World CSR Day & World Sustainability Forum awarded the Company as one among the “100 most impactful CSR leaders” of the year in their global listing. The Company is also a receipent of “Social Footprints - National CSR Awards & Summit 2018 for Excellent Value Added to the local Community” conferred by CMAI & CIM Global in Vigyan Bhawan, Delhi.

The details about the CSR policy and initiatives taken by the Company on CSR during the year are available at the website of the Company at www.jaispring.com. The Annual Report on CSR activities undertaken by the Company during the year under review is annexed hereto as Annexure-2 and form an integral part of this report.

Directors and Key Managerial Personnel

Total strength of the Board of Directors is 9 consisting of 5 Independent Directors, 3 Executive Directors and 1 NonExecutive Director. The Composition of the Board is in conformity with the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Mr. B. S. Jauhar, non-executive director is the Chairman of the Board of Directors of the Company. Mr. R. S. Jauhar is the Executive Vice-Chairman and Mr. P.S. Jauhar is the Managing Director & CEO. During the year under review, Mr. H.S. Gujral, an Executive Director resigned from the Board of Directors with effect from February 13, 2018. Mr. S.P.S. Kohli has been inducted as an Executive Director on the Board with effect from February 13, 2018. By virtue of cessation of Mr. H.S. Gujral and induction of Mr. S.P.S. Kohli as Executive Director, the total strength of Board remains same. All the executive directors are appointed by the Board for a fixed term, normally, of three years on recommendation of the Nomination & Remuneration Committee of the Board subject to approval by members of the Company.

Mr. S.P.S. Kohli has been initially inducted as an Additional Director on the Board. The approval of members of the Company is being sought for his appointment as Whole Time Director designated as an Executive Director on the Board of Directors of the Company. The resolution for appointment of Mr. S.P.S. Kohli and payment of remuneration to him shall be placed before the members for their approval at the ensuing Annual General Meeting of the Company. His appointment is appropriate and in the best interest of the Company.

Mr. J. K. Jain, Mr. U. K. Singhal, Mr. Shashi Bhushan Bansal, Mr. Rakesh Kalra and Ms. Payal Chawla are the 5 independent directors on the Board of Directors of the Company. All the independent directors are appointed for a period of five years and are not liable to retire by rotation.

The executive directors are paid monthly remuneration and commission on the profits of the Company as per the terms of their appointment. Non-executive directors are paid sitting fee for attending meetings of the Board and Committee thereof. The Nomination & Remuneration Committee reviews and makes recommendations of the appointment and remuneration of the executive directors. The Policy relating to remuneration of Directors forms an integral part of this report and is attached as Annexure-3. The policy is also available on the website of the Company at www.jaispring.com.

The Nomination & Remuneration Committee and the Board of Directors have recommended the re-appointment of Mr. P. S. Jauhar as Managing Director & CEO of the Company for a further period of 3 years with effect from August 01, 2018 to July 31, 2021.The resolution for re-appointment of Mr. P. S. Jauhar and payment of remuneration to him shall be placed before the members for their approval at the ensuing Annual General Meeting of the Company. His re-appointment is appropriate and in the best interest of the Company.

During the year under review, four meetings of the Board of Directors of the Company were held on May 20, 2017, August 12, 2017, November 11, 2017 and February 13, 2018 respectively. The complete details about the Board’s strength, attendance and remuneration of directors is given under Corporate Governance Report which forms an integral part of this Annual Report.

The Company has received declaration from all the independent directors stating that they continue to meet the criteria of independence laid down under Section 149(7) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. Further, all the Directors have confirmed that they have complied with the Company’s code of conduct.

In compliance with the provisions of Section 152 of the Companies Act, 2013 read with the Articles of Association of the Company, Mr. P S Jauhar, Director of the Company will retire at the ensuing Annual General Meeting and being eligible, has offered himself for reappointment. The Board recommends his re-appointment.

The brief profile of the Directors who are proposed to be appointed / re-appointed, are furnished in the notice of 52nd Annual General Meeting. The Board recommends appointment /re-appointments of above said directors.

Related-Party Transactions

Related party transactions entered into by the Company during the year under review were in the ordinary course of business at arm’s length pricing basis in accordance with Company’s policy on Related Party Transactions. The policy is also available on the website of the Company at www.jaispring.com. Prior approval of the Audit Committee, Board of Directors and the members of the Company as the case may be is also taken for related party transactions. Details of the transactions with related parties entered into by the Company are also periodically placed before the Audit Committee and the Board of Directors. Form AOC-2 for disclosure of particulars of contracts/ arrangements entered into by the Company with related parties referred to in Section 188 of the Companies Act, 2013 is annexed hereto as Annexure-4 and forms an integral part of this report.

Extract of Annual Return

The extract of the Annual Return in Form MGT-9 is annexed herewith as Annexure-5 and form an integral part of this report.

Human Resource

At JAI, it’s about the people behind the scenes. We have worked hard to create a dedicated team having long term commitment to deliver results. Your Company continues to enjoy cordial relationships with the employees and work force across all units and establishments.

Equity shares

During the year under review, the Company’s equity shares of face value of Rs.5 each splitted into equity share of face value of Rs.1 each with effect from October 06, 2017. The Equity Shares of your Company continue to be listed at National Stock Exchange of India Limited and Bombay Stock Exchange Limited. The Company has paid the Listing Fees for FY 2018-19 to the Stock Exchanges.

The Company has not issued any sweat equity shares or equity shares with differential voting rights hence there are no information required to be furnished in terms of provisions of Rule 4(4) and Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014.

In compliance with the provisions of Companies Act, 2013, SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and SEBI (Share Based Employee Benefits) Regulations, 2014, the particulars with regard to employs stock options as on March 31, 2018 are annexed as Annexure-6 and forms an integral part of this report.

IPR

During the year, Company has got registration of its trademarks “JAI” and “ JPSL” in Russian Federation. Company has already got registration of its trademark “JPSL” in Republic of Bangladesh whereas trademark “JAI” is under process. Company is also under process of getting registration of its trademarks “JAI” & ”JPSL’ in Nepal. Company’s application for granting Indian Patent for Air Suspension is pending before the Indian Patent Authorities. Company is copyright holder of more than 75 designs of Leaf and Parabolic spring.

Corporate Governance

The Company lays strong emphasis on transparency, accountability and integrity in its plans, policies and procedures. The Company adheres to accomplish the timely compliances as may be required from time to time under the provisions of Companies Act, 2013, SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The Company ensures the compliances of applicable Secretarial Standards from time to time.

Pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the report on corporate governance regarding compliance of conditions of corporate governance is set out at Annexure-7 as separate section and forms an integral part of this report. The certificate of the Statutory Auditors confirming compliance with the conditions of the SEBI Listing Regulations is also attached thereto. The certificate does not contain any qualification, reservation or adverse remarks.

Pursuant to Regulation 34 & Regulation 43A of SEBI (Listing Obligations & Disclosures Requirement) Regulations, 2015, the Company is covered in list of top 500 Companies as per the data of stock exchanges as on March 31, 2018, the Business Responsibility Report is applicable on the Company for the financial year ending on March 31, 2019.

Auditors and Auditors’ Report Statutory Auditors

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the rules framed thereunder, the tenure of M/s S. R. Batliboi & Co; LLP Chartered Accountants as statutory auditors of the Company shall expire at the conclusion of the 52nd Annual General Meeting of the Company. M/s S. R. Batliboi & Co; LLP Chartered Accountants have expressed their willingness and eligibility to be re-appointed as statutory auditors of the Company. Board of Directors has recommended the re-appointment of M/s S. R. Batliboi & Co; LLP, Chartered Accountants as Statutory Auditors at the ensuing Annual General Meeting for a further period of 5 year subject to the approval of members of the Company. The resolution for approval of re-appointment is being sought in the 52nd Annual General Meeting.

The report of the statutory auditors read with notes on accounts are self-explanatory and do not call for any further comments.

The Auditors’ Report does not contain any qualification, reservation or adverse remarks.

Secretarial Auditors

M/s K J & Associates, Company Secretaries who were appointed to conduct Secretarial Audit for the financial year ended March 31, 2018 have submitted their secretarial audit report. The report does not contain any qualification, reservation or adverse remarks. The report of the Secretarial Auditors for the FY ended March 31, 2018 is annexed as Annexure-8 and forms an integral part of this report.

In compliance with the provisions of Section 204 of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has re-appointed M/s K J & Associates, Company Secretaries to conduct Secretarial Audit for the financial year ending March 31, 2019.

Cost Auditors

M/s Jangira & Associates, Cost Accountants are proposed to be re-appointed as cost auditors of the Company for the FY 2018-19 pursuant to the requirements of Section 148 of the Companies Act, 2013. The cost audit report of the FY 201718 would be filed with the Central Government within the prescribed time. The remuneration payable to the Cost Auditor is being sought for approval by the members of the Company in the ensuing Annual General Meeting.

Subsidiary

The Company has a wholly owned subsidiary namely Jai Suspensions Limited. During the year under review, the subsidiary company has not started its business activity. The Company is also a majority partner in Jai Suspension Systems LLP.

Pursuant to the provisions of Section 136 of the Companies Act, 2013 read with applicable rules made thereunder, the consolidated financial statements of the Company forms part of the Annual Report. A statement containing the salient features of the financial statement of the subsidiary in the Form AOC-1 is attached with the financial statements of the Company.

Management Discussion & Analysis

Management Discussion & Analysis Report is set out as separate section of the Annual Report.

Particulars of Loans, Guarantees or Investments

Particulars of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

Material Changes and Commitment

There were no material changes and commitments affecting the financial position of the Company between the end of FY 2017-18 i.e. March 31, 2018 and the date of this Report. There are no significant material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its future operations.

Particulars of Employees

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure-9 and forms an integral part of this report.

As per the provisions of Section 136(1) of the Companies Act, 2013, the Report and the Accounts are being sent to all the members of the Company, excluding the information required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Any member interested in obtaining such information may write to the Company Secretary at the Registered Office. The said information is also available for inspection at the Registered Office during working hours up to the date of ensuing Annual General Meeting.

Internal Financial Control

In accordance with the provisions of Section 134(5) (e) of the Companies Act, 2013, your Company has duly adopted policies and procedures to ensure orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

Disclosure under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company recognizes its responsibility to provide a safe working environment for women, free from sexual harassment and discrimination. In line with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has constituted a Sexual Harassment Committees at plants and other locations for prevention and redressal of complaints of sexual harassment and for the matters connected therewith. There were no cases/complaints pertaining to the sexual harassment reported to the Committee during the period under review.

Transfer of amount to Investor Education and Protection Fund

During the Financial Year 2017-18, the unclaimed interim dividend of financial year 2010-11 was due and transferred to Investor Education and Protection fund in accordance with the provisions of Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (“IEPF Rules”). The Company has uploaded the details of unpaid and unclaimed dividends lying with the Company for subsequent years on the web site of the Company at www.jaispring.com.

As per the requirements of IEPF Rules, the securities on which dividend remains unclaimed for consecutive seven years were liable to transfer to demat account of IEPF Authority. In complying with the requirements, the equity shares on which dividend remains unclaimed for consecutive seven years has been transferred to IEPF Authority. The detailed list of shareholders whose shares has been transferred to IEPF has been hosted on the website of the Company at www.jaispring. com.

Directors’ Responsibility Statement

Pursuant to Section 134 (3) (c) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

a) in preparation of the annual accounts of financial year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures.

b) the directors 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 and loss of the company for that period.

c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) the directors had prepared the annual accounts on a going concern basis.

e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and operating effectively.

f) the directors had devised proper systems to ensure compliance of the provisions of all applicable laws and that such systems were adequate and operating effectively.

Appreciation

The Directors place on record their appreciation for assistance and co-operation received from various ministries and department of Government of India and other State Governments, financial institutions, banks, shareholders, directors, executives, officers of the Company etc. The management would also like to express great appreciation for the commitment and contribution of its employees at all locations.

For and on behalf of the Board of Directors

Place: New Delhi (B. S. Jauhar)

Date: May 22, 2018 Chairman

Director’s Report