DIRECTORS' REPORT TO THE MEMBERS, Your Directors are pleased to present the Twenty Eighth Annual Report on business and operations of your Company together with the Audited Financial Statements for the Financial Year ended 31st March, 2015 2. FINANCIAL HIGHLIGHTS & OPERATIONS Total revenue (net of excise) was Rs.13,015.35 Million during the year under review as against Rs.12,142.17 Million in the previous year showing an increase of 7.19%. Profit after tax was Rs.399.82 Millionin the current year as against Rs.165.18 Million in the previous year, an increase of 142.05%.The increase in net profit is primarily due to the absence of any exceptional items during the year and low finance cost & depreciation. 3. DIVIDEND AND APPROPRIATION (A) Dividend Your Directors have recommended a dividend of Rs.2 (i.e.40%) per equity share (last year Rs.1.25 per equity share) for the financial year ended 31st March, 2015, amounting to Rs.51.96 Millions (inclusive of tax of Rs.8.66 Millions). The dividend payout is subject to approval of members at the ensuing Annual General Meeting. The dividend will be paid to members whose names appear in the Register of Members as on 10th August, 2015 and in respect of shares held in dematerialized form, it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited, as beneficial owners as on that date. (B) Appropriation During the financial year 2014-15, an amount of Rs.16.60 Million (same as previous year) was transferred to the General Reserve from profits of the Company 4. MANAGEMENT DISCUSSION AND ANALYSIS The Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges is presented in separate section forming part of the Annual Report. 5. CREDIT RATING ICRA has affirmed its credit rating of A1 + for short term instruments which is the highest rating for credit quality assigned by ICRA and also A+ rating for long term debt Instruments indicating the outlook on the long term rating as "Stable". 6. QUALITY Your Company has implemented International Quality Management System in all the four units based on the requirement of ISO/TS 16949:2009. The Company has established, implemented and is maintaining an Information Security Management System. During the year, ISO 14001 surveillance was carried out by M/s American System Registrar, LLC and the auditors recommended the continuation of the ISO 14001. Apart from the above, your Company is also OHSAS-18001:2007 and ISO-14001:2004 certiied. 7. HUMAN RESOURCES The overall employee relations were peaceful and harmonious throughout the year. Your Company continued to create a productive, learning and caring environment by implementing robust and comprehensive HR processes. 8. DEPOSITS During the year under review, the Company did not accept any deposits within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 and as such, no amount of principal or interest was outstanding on the date of the Balance Sheet. 9. DIRECTORS AND KEY MANAGERIAL PESONNEL (a) Directors: In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Ms. Esha Arya, Director of the Company will retire by rotation at the ensuing Annual General Meeting and being eligible has offered herself for re-appointment. Mr. Virender Ganda was appointed as additional Director & Independent Director and Mr. Rajiv Gandhi was appointed as additional Director of the Company, who shall hold oice upto the ensuing Annual General Meeting. The Company has received requisite notices in writing from members of the Company proposing the candidature of Mr. Virender Ganda and Mr. Rajiv Gandhi for the office of Director. The Board recommend re-appointment of Ms. Esha Arya, Mr. Virender Ganda and Mr. Rajiv Gandhi. During the year under review, the members approved the appointment of Mr. U. C. Agarwal, Mr. D. P. Agarwal and Mr. Achintya Karati as an Independent Directors, who are not liable to retire by rotation. 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/investor-aid.asp?lk=investor2a3> The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other Individual Directors which includes criteria for performance evaluation of the Non-Executive Directors and Executive Directors. The policy for selection of Directors and determining Directors independence; and the Remuneration Policy for Directors, Key Managerial Personnel & other employees are attached herewith and marked as Annexure- I and II respectively. (b) Key Managerial Personnel Mr. S. K. Arya, Chairman & Managing Director, Mr. Anand Swaroop, President & CFO and Mr. Dinesh Kumar, Company Secretary of the Company are the Key Managerial Personnel and were already in the office before commencement of the Companies Act, 2013. The Board of Directors in their meeting held on 14th January, 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 10. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirement under Section 134 of the Companies Act, 2013, it is hereby confirmed that: (a) in the preparation of the annual accounts for the year ended 31th March, 2015, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same; (b) the Directors have 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 as at 31th March, 2015 and of the profit of the Company for the year ended on that date; (c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (d) the Directors have prepared the annual accounts on a 'going concern' basis; (e) the Directors have laid down internal inancial controls to be followed by the Company and that such internal inancial controls are adequate and are operating effectively; and (f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating efectively. 11. CORPORATE GOVERNANCE The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements as set out by the Regulators/ applicable laws. Accordingly, the Board functions as trustee of the Shareholders and seek to ensure that the long term economic value for its shareholders is achieved while balancing the interest of all the other stakeholders. A section on Corporate Governance Standards followed by the Company as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges is given separately and forms an integral part of this Report. A certiicate from M/s Dhananjay Shukla & Associates, Company Secretaries conirming compliance to the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to the report on Corporate Governance. 12. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES All contracts / transactions entered into by the company during the financial year with related parties were in the ordinary course of the business and on arm's length basis. During the year under review, the Company inter alia entered into contract / transactions with two related parties' viz. Maruti Suzuki India Ltd. and Neel Metal Products Ltd. which are considered as 'material' in accordance with the Policy on materiality of and dealing with related party transactions. The Policy on 'materiality of and dealing with related party transactions' as approved by the board may be accessed on the Company's website at the link: <http://www.jbm-grop.com/PRP-Transaction.asp?lk=investor2a4> The disclosure required under sub section (1) of Section 188 of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is attached hereto and marked as Annexure - III. 13. CORPORATE SOCIAL RESPONSIBILITY (CSR) The Corporate Social Responsibility Committee (CSR Committee) has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board. The CSR Policy may be accessed on the Company's website at the link: <http://www.jbm-group.com/investor-cp.asp?lk=investor2a2> During the year under review, the Company has contributed Rs.5.62 Million (approx. 2% of the average net profits of last three financial years) to Neel Foundation, an eligible Trust having track record of 12 years in undertaking Social Welfare Programme for spending the amounts on CSR activities as per CSR Policy of the Company. The Annual Report on CSR activities is attached herewith and marked as Annexure - IV. RISK MANAGEMENT The Company has in place the Risk management Policy which prescribes the methodology for Risk Mitigation of regular operational risk associated with the Company. Various Risks are identiied, categorized based on their severity & probability/ likelihood of their occurrence. These operational risks are managed through an enterprise Risk Management System with periodic review and control mechanism. Continuous efforts are made towards Mitigation of Risk arising due to external factors or unforeseen circumstances by way of having adequate Insurance coverage and exploring the possibilities of obtaining coverage wherever possible INTERNAL FINANCIAL CONTROLS The Company has in place the Standard Operating Procedures for all material business process in order to have robust internal financial controls. To further strengthen the Internal control in routine transactions, the Company has reviewed its segregation of duties in ERP and is in the process of creating standard Roles for all modules and the assigning of authorization in ERP shall be based on such standard roles. 16. AUDITORS AND AUDITORS' REPORT (a) Statutory Auditors M/s Mehra Goel & Co., Chartered Accountants, Statutory Auditors hold office till the conclusion of the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualiied for re-appointment. The Notes on financial statement referred to in the Auditors' Report are self- explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark. (b) Secretarial Auditors Pursuant to provisions of Section 204 of the Companies Act, 2013, the Company had appointed M/s Dhananjay Shukla & Associates, Company Secretaries, Gurgaon, Haryana as its Secretarial Auditors to conduct secretarial audit of the Company for the financial year 2014-15. The Company provided all assistance and facilities to the Secretarial Auditor for conducting their audit. The Report of Secretarial Auditor for the inancial year 2014-15 is annexed herewith and marked as Annexure-V to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. 17. DISCLOSURES: (a) Audit Committee The Audit Committee comprises three Independent Directors & one Non-Executive Director namely Mr. U. C. Agarwal (Chairman), Mr. D. P. Agarwal, Mr. Achintya Karati and Mr. Nishant Arya as members. All the recommendations made by the Audit Committee were accepted by the Board. (b) Vigil Mechanism/ Whistle Blower Policy The Company has implemented a Whistle Blower Policy pursuant to which whistle blower can raise concerns relating to reportable matter such as breach of code of conduct, fraud, corruption, employee misconduct, misappropriation of funds, etc. Further the mechanism adopted by the Company encourages the Whistle Blower to report genuine concerns or grievances and provide for adequate safeguards against victimization of Whistle Blower who avails of such mechanism and also provides for direct access to the Chairman of the Audit Committee in exceptional cases. Protected disclosures can be made by a Whistle Blower through an e-mail or telephone or a letter to the Ombudsman or to the Chairman of the Audit Committee. The functioning of the vigil mechanism is reviewed by the Audit Committee from time to time. The whistle blower policy may be accessed on the Company's website at the link: <http://www.jbm-group.com/investor-jmbl-wbp.asp?lk=investor2a> (c) Meetings of the Board Four meetings of the Board of Directors were held during the year. For further details, please refer report on Corporate Governance of this Annual Report. (d) Particulars of Loan given, Investment made, Guarantees given and Securities provided Particulars of loans given, investments made are given in the inancial statement. During the year under review, the Company has neither given guarantee nor provided any security to anyone. (e) 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. 31th March, 2015 and the date of the Directors' Report i.e. 13th July, 2015. (f) Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in Annexure VI to this Report. (g) No signiicant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and Company's operation in future. (h) No case filed under Section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. (i) No Employee Stock Options were granted to the Directors or Employees of the Company. ( j) Extract of Annual Return Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the extract of the Annual Return as at 31th March, 2015 is annexed herewith as Annexure VII to this Report. (k) Particulars of Employees and related disclosures In terms of the provisions of Section 197(12) of the Act 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 are form part of the Annual Report. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are form part of the Annual Report. Having regard to the provisions of the first proviso to Section 136(1) of the Act, 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 on request. 18. ACKNOWLEDGEMENT Your Directors acknowledge the continued assistance, guidance and Co-operation received from Maruti Suzuki India Limited & Suzuki Corporation Limited (Japan) and other technical partners. Your Directors also wish to express their sincere appreciation for the assistance and co-operation received from the banks, Government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services rendered by the Company's executives, staff and workers. For and on behalf of the Board of Directors SdJAY BHARAT MARUTI LIMITED S. K. Arya Chairman & Managing Director Date: 13.07.2015 Place: Gurgaon |