DIRECTORS’ REPORT DEAR SHAREHOLDERS, Your Directors have pleasure to present the Thirty-Third Annual Report and the Company's Audited Financial Statement for the year ended 31st March, 2015. DIVIDEND The Board of Directors has recommended dividend of Rs. 2/- (Rupees Two only) per share (@ 20%; on equity share of Face Value of Rs. 10/- each. Dividend will be paid to eligible equity shareholders, if approved by members at the Annual General Meeting. As per the terms and conditions of Bank of India, dividend will be paid @ 2.5% per annum to Preference Shareholders holding 75709 Cumulative Redeemable Preference Shares of Rs.100 each from 26th March, 2014 and dividend will be paid @ 20% per annum to Preference Shareholders of 1415000 Cumulative Redeemable Preference Shares of Rs.100 each from 26th March, 2014. SHARE CAPITAL The paid up Equity Share Capital as on 31st March, 2015 was Rs. 65.50 crores and Preference Share Capital as on 31st March, 2015 was Rs. 14.91 crores. During the year under review, the Company has issued 172632 equity shares under ESOS scheme. PERFORMANCE OF THE COMPANY Profit before tax of the Company increased from Rs. 29.30 Crores in 2013-14 to Rs. 200.54 Crores in 2014-15 reflecting an increase of 584%. Profit after tax of the Company increased from Rs.15.02 Crores in 2013 14 to Rs.139.44 Crores in 2014-15 reflecting an increase of 828%. Though production of Polyester Chips decreased from 483647 MT in 2013-14 to 466178 MT in 2014-15, production of POY & Yarn increased from 266082 MT in 2013-14 to 273932 MT in 2014-15. Yarn capacity increased from 60000 MT PA to 90,000 MT PA DIRECTO RS In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Company's Articles of Association, Mr. Rakesh Gothi, CEO & Managing Director retires by rotation at the forthcoming Annual General Meeting and being eligible offers himself for reappointment. Mr. Bhagirath C. Arya,Executive Chairman will be reappointed in the forthcoming Annual General Meeting, to hold office for 5 years. Mr. N.K. Shah, Director - Commercial whose term of office expires on 31st August, 2015, will be re-appointed in forthcoming Annual General Meeting. Mr. PN. Thakore, Director - Finance whose term expires on 31st August, 2015 as Director - Finance is retiring from his service as a Director w.e.f 31st August, 2015. All Independent Directors have given declarations that they meet the criteria of Independence as laid down under Section 149(6; of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The term of appointment of Mr. Sunil Diwakar will be changed by making him an Independent Director, not retiring by rotation, for five years, for which a resolution is included in the notice of the Annual General Meeting. FOREIGN EXCHANGE EARNINGS & OUT GO Foreign Exchange earnings by way of exports and Net Gain on currency and interest rate swap were Rs.781.92 crores Crores against out go of Rs. 1565.07 Crores on import of raw materials, stores spares & consumables and Rs. 12.03 Crores of foreign exchange was invested in imported capital equipments for the growth of the Company. FIXED DEPOSITS During the year Company has not accepted any Fixed Deposits and as such, no amount of principal or interest on account of Fixed Deposits is outstanding as on the date of Balance Sheet. particulars of loans, guarantees or investments by company Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to Financial Statements (Refer note no.31;. DISCLOSURE UNDER RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION), RULES, 2014 The information required pursuant to Section 197 read with Rule 5(1; of the Companies (Appointment and Remuneration; Rules, 2014 in respect of employees of the Company and Directors is enclosed in the Annual Report. insurance All the properties of the Company including buildings, plant and machinery and stocks have been adequately insured. subsidiaries Company has overseas subsidiary under the name and style JBF Global Pte Ltd at Singapore, which has subsidiaries, namely JBF Petrochemicals Ltd., Mangalore, India, JBF Trade Invest Pte Ltd at Singapore, JBF Glicols Industria Quimica Ltda, at Brazil and JBF RAK LLC, at U.A.E with its own subsidiaries, JBF Bahrain S.PC at Bahrain and JBF Global Europe BVBA at Belgium. In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. In accordance with the Accounting Standard AS-21, the audited Consolidated Financial Statements including the Financial Information of Subsidiary Companies are provided in the Annual Report. The annual accounts of the Subsidiary Companies will be kept open for inspection at the Registered and Corporate Office of the Company and that of the respective Subsidiary Companies. JBF Global Europe BVBA (Belgium; and JBF Bahrain SPC (Bahrain;, subsidiaries of the Company have started their production and are contributing to the Company. PTA project of the Company at Mangalore SEZ is at advanced stage of completion and the plant would be operational by end of the financial year. CONSOLIDATED ACCOUNTS The Consolidated Financial Statements of the Company are prepared in accordance with relevant Accounting Standards viz. AS-21, AS-23 and AS-27 issued by the Institute of Chartered Accountants of India and forms a part of this Annual Report. extract of annual return The details forming part of the extract of the Annual Return in Form MGT-9, as required under Section 92 of the Companies Act, 2013, is included in this Report as Annexure and forms an integral part of this Report. MANAGEMENT DISCUSSION AND ANALYSIS The Management Discussion and Analysis forms part of the Directors' Report and is annexed hereto. CORPORATE GOVERNANCE As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on corporate governance practices followed by the Company, together with a certificate from the Company's Auditors on compliance forms an integral part of this report. CORPORATE SOCIAL RESPONSIBILITY As a part of its initiative under the "Corporate Social Responsibility" (CSR; drive, the Company has undertaken projects in the area of rural development. The disclosures required undersection 135 of the Companies Act, 2013, read with the rule 8(1; of the Companies (Corporate Social Responsibility policy; Rules,2014 are given in Annexure to the Directors' Report . BOARD COMMITTEES As per the requirement of the Companies Act, 2013 and the Clause 49 of the listing Agreement ,the Board of Directors of the Company has 6 committees namely Audit Committee, Stakeholders Relationship Committee, Risk Mangement Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee and Investment Committee. The details of the constitution of Committees and the meetings held during the financial year 2014-15 are included in the Corporate Governance Report forming part of this Annual Report. NUMBER OF MEETINGS OF THE BOARD & AUDIT COMMITTEE During the year Six Board Meetings and Four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. WIHSTLE BLOWER POLICY A whistle blower policy in terms of the Listing Agreement includes Ethics & Compliance for senior executives of the Company. Confidentiality disclosures can be made by whistle blower through an e-mail, or a letter to the Committee member or to the Chairman of the Audit Committee. The efforts are taken to accept the observations of the whistle blower and the action are taken accordingly. NOMINATION AND REMUNERATION POLICY The Company has framed the remuneration policy and formed Nomination & Remuneration Committee. The Committee has been given responsibility of appointment and re-appointment of Whole-time Director, Executive Directors, Key Managerial Persons and the specified employees / executives of the Company and approving their remuneration based on their qualifications, experience and their responsibility in the Company. RISK MANAGEMENT POLICY Pursuant to the requirement of Clause 49 of the Listing Agreement, the Company has constituted Risk Management Committee. The Company has a Risk Management Policy and a team to evaluate business risks. The Board of Directors regularly reviews risks and threats in the business and takes suitable steps to safeguard Company's interest. BOARD EVALUATION Pursuant to the provision of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a structured questionnaire was prepared after taking into consideration of the various aspects of the Board's functioning, composition of Board and its Committees, culture, execution and performance of specific duties, obligations and governance. The performance evaluation of the Independent Directors was completed. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process. DIRECTORS' RESPONSIBILITY STATEMENT To the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section ^^Xc; of the Companies Act, 2013: that in the preparation of the Annual Accounts for the year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015 and of the profit of the Company for the year ended on that date; that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; the annual accounts have been prepared on a going concern basis; that the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and that the Directors had devised proper systems were adequate and operating effectively. statutory audit M/s. Chaturvedi & Shah, Chartered Accountants, (Firm Registration No. 101720W; who are Statutory Auditors of the Company hold office up to the forthcoming Annual General Meeting and are recommended for the re-appointment to audit the accounts of the Company for the financial year 2015-16. As required under the provisions of Section 139 of the Companies Act, 2013 the Company has obtained written confirmation from M/s. Chaturvedi & Shah that their appointment, if made, would be in conformity with the limits specified in the said Section. COST AUDIT The Company has appointed Ms. Devashree P. Vijayakar, Cost Accountant as the Cost Auditor of the Company to conduct cost audit and give report for the year 2015-16. Since cost audit was not applicable to the Company for the year 2014-15, the cost audit report will not be filed though it is obtained for the internal purpose. SECRETARIAL AUDIT Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Company has appointed M/s. Jagdish Patel & Co., a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is included as and forms an integral part of this Report. RELATED PARTY TRANSACTIONS There are no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel. The Company has formulated policy on materiality of Related Party Transactions which is available on web site of the Company. All Related Party Transactions of sale and purchase entered into with subsidiary companies, are placed before the Audit Committee as also to the Board for approval. Omnibus prior approval was obtained on a quarterly basis for such transactions which are of repetitive nature. A statement giving details of actual Related party Transactions are placed before the Audit Committee and Board for review and approval on a quarterly basis. significant and material orders passed by the regulators or courts There are no significant and material orders passed by the Regulators/ Courts that would impact the going concern status of the Company and its future operations. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY The Company has an effective internal control and risk-mitigation system, which are assessed and strengthened with new/revised standard operating procedures. The Company's internal control system is commensurate with its size, scale and complexities of its operations. The internal audit is entrusted to M/s. Bhuwania & Agrawal Associates. Every quarter internal audit report is placed before the Audit Committee and the Audit Committee of the Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. ENVIRONMENT AND SAFETY The Company has constituted committee for prevention of sexual harassment at work place with a mechanism of lodging complaints. During the year under review no complaints were reported to the Board. ACKNOWLEDGEMENT The Board of Directors would like to express their grateful appreciation for the assistance, support and co-operation received from the Financial Institutions, Banks, Government Authorities and Shareholders during the year under review. The employees of the Company contributed significantly in achieving the results. The Directors take this opportunity of thanking them and hope that they will maintain their commitment to excellence in the years to come. For and on behalf of the Board of Directors P N. THAKORE CFO & Director Finance DIN : 00229024 RAKESH GOTHI CEO & Managing Director DIN : 00229302 Place : Mumbai Date : 27th May, 2015 |