DEAR SHAREHOLDERS,
Your Directors have pleasure to present the 41st Annual Report and the
Company's Audited Financial Statement for the year ended 31st March, 2023.
The Company's financial performance, for the year ended on 31st March, 2023 is
summarized below:
FINANCIAL RESULTS
|
|
(Rs. Crore) |
Particulars |
Year ended on 31st March, 2023 |
Year ended on 31st March, 2022 |
Revenue from Operations |
1097.17 |
3,272.23 |
Other Income |
12.35 |
19.96 |
Profit/(Loss) from the year before Finance cost, Depreciation and exceptional items |
(33.67) |
250.15 |
Less : Finance Cost |
235.18 |
249.17 |
Less : Depreciation and Amortisation Expenses |
14.20 |
87.10 |
Less : Exceptional Item |
1503.59 |
1,082.85 |
Profit / (Loss) Before Tax |
(1786.64) |
(1,168.97) |
Current Tax |
- |
- |
MAT Credit Entitlement |
- |
- |
Short/(Excess) Provision of Tax of Earlier Years (Net) |
64.09 |
1.29 |
Deferred Tax |
2.73 |
0.21 |
Profit / (Loss) for the year |
(1,853.46) |
(1,170.47) |
Other Comprehensive Income |
(5.08) |
(0.39) |
Total Comprehensive Income for the year |
(1858.55) |
(1,170.86) |
PHYSICAL HANDOVER OF SECURED ASSETS & RELINQUISHMENT OF MANAGEMENT CONTROL TO CFM
ASSET RECONSTRUCTION PRIVATE LIMITED (ASSET RECONSTRUCTION COMPANY)
As you are aware the consortium of bankers led by Bank of Baroda had filed an
application with the National Company Law Tribunal (NCLT), Ahmadabad for recovery of their
dues in September 2018 under the Insolvency and Bankruptcy Code, 2016. The said
application has been dismissed and disposed off by the Court in April 2021.
However, on 13th August, 2021, all the lenders (except Tamilnad Mercantile Bank Ltd)
(TMB) have assigned the debts along with all the rights and interests on the secured
assets to CFM Asset Reconstruction Private Limited (CFM) under the Securitization and
Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002
(SARFAESI) by executing two Assignment Agreements both dated 13th August, 2021. A total of
14 fourteen lenders aggregating approximately 99 % of the total debt of the Company have
assigned their debt to an Asset Reconstruction Company called CFM Asset Reconstruction
Private Limited as on 31st March, 2022.
As you are also aware, the Board of Directors' are no longer in the helm of affairs of
the Company w.e.f - 13th August, 2021. CFM is closely monitoring and managing the day to
day plant and corporate office operations through Deloitte Touche Tohmatsu India LLP,
Mumbai who has been appointed as the nodal agency by CFM.
Further, to the intimation of the said assignment, CFM has also issued a demand notice
under Section 13(2) of the SARFAESI Act, 2002 and the rules framed there under to recover
the entire dues including principal and interest. In response to the said notice, the
Company has given an "In principle consent" to handover the secured assets of
the Company to CFM. Subsequently, the authorised officer of CFM has taken physical
possession of secured assets of the Company on 11th November, 2021.
The Company was in receipt of Intimation for sale of secured assets by way of private
treaty under the SARFAESI Act, 2002 on 11th May, 2022 to Madelin Enterprises Private
Limited (MEPL).
DIVIDEND
With the handover of the secured assets of the Company to Madelin Enterprises Pvt Ltd
(MEPL), have not recommended dividend on equity shares of the Company for the year
2022-23.
However, the dividend on the preference shares will be carried forward for payment in
the next financial year.
SHARE CAPITAL
The paid up Equity Share Capital as on 31st March, 2023 was Rs.81.87 crores and
Preference Share Capital as on 31st March, 2023 was Rs.14.91 crores.
RESERVES & SURPLUS
You are well aware that, the balance standing in the Equity Share Capital account along
with Other Equity account (Reserves and Surplus) has completely been eroded due
repossession of assets by the Lender. The net worth of the Company has turned negative as
on the Balance Sheet date.
PERFORMANCE OF THE COMPANY
The Company's revenue for financial year 2022-23 was Rs.1097.17 crores against
Rs.3272.23 crores for the previous year. This was primarily due to efficient management of
cash flows, better margins and resurgent market conditions especially during the festive
season in the last two quarters
Directors
Mrs.Ujjwal G Apte, Director who retires by rotation and being eligible offers herself
for re-appointment.
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 Regulation
16(b) of SEBI (Listing Obligation sand Disclosure Requirements) Regulations, 2015.
Mrs. Bindu Darshan Shah, was appointed as an Additional Director on 25th April, 2023
during the year to hold office upto the conclusion of this Annual General Meeting of the
Company.
The Company has received notice proposing her candidature for the office of the
Director. The resolution to that effect is included in the notice and shareholders are
requested to appoint her as Independent Director for five years.
Mrs.Sangita Chudiwala was appointed as an Independent Director on 29th Novenber, 2017
to be re-appointed as Independent Director as per the provisions of Companies Act &
Articles of Association and on the recommendation of NRC, subject to approval of
shareholders for further 5(five ) years.
Mr. Ravi Dalmia was appointed as an Independent Director on 04thJune. 2018 to be
re-appointed as Independent Director as per the provisions of Companies Act & Articles
of Association and on the recommendation of NRC, subject to approval of shareholders for
further 5(five ) years.
BRIEF PROFILE OF DIRECTOR'S
Ms. Bindu Darshan Shah (Din No : 07131459)
Proprietor of K Bindu & Associates, Practicing Company Secretaries, have been in
practice independently as a Whole-time Company Secretary since April, 2007.
Post Graduate Diploma in Business Management (Finance) from Symbiosis, Pune Mrs Sangita
Chudiwala (Din No : 01039360)
Director of Krshna Media & Associates Pvt Ltd , Graduate Of Arts From Bombay
University & Fashion Designer with a Diploma from Bombay University with an experience
of 40 years in the Fashion Industry in India & Abroad & is not related to any
directors of the Company.
Mr. Ravi Dalmia (DIN: 00634870), Bachelor of Commerce having experience of over 30
years in textiles industry to his credit. Mr. Dalmia is not related to any directors of
the Company.
BOARD EVALUATION
The performance evaluation of the Independent Directors was completed. The performance
evaluation of the Chairman and the NonIndependent Directors was carried out by the
Independent Directors The Board of Directors expressed their satisfaction with the
evaluation process.
BOARD COMMITTEES
As per the requirement of the Companies Act, 2013 and of SEBI (Listing Obligations and
Disclosure Requirements) Regulation, 2015, the Board of Directors of the Company has five
Committees namely Audit Committee, Stakeholders Relationship Committee, Risk Management
Committee, Nomination and Remuneration Committee and Corporate Social Responsibility
Committee..
The details of the constitution of the Committees and the meetings held during the
financial year 2022-23 are included in the Corporate Governance Report which is forming
part of Annual Report.
KEY MANAGERIAL PERSONNEL
Following are the Key Managerial Personnel of the Company:
Sr. No. |
Name of the Person |
Designation |
1. |
Mr. S.N. Shetty |
Executive Director |
2. |
Mrs. UjjwalaApte |
Executive Director & Company Secretary |
3. |
Mr. Yash Gupta |
Executive Director |
4 |
Mr. Pravin Prajapati |
Chief Financial Officer From 11.04.2023 to 30.06.2023 |
NUMBER OF MEETINGS OF THE BOARD & AUDIT COMMITTEE
During the year Five 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
and relevant provisions of LODR 2015 of SEBI.
SUBSIDIARIES
Company has an overseas subsidiary under the name and style of JBF Global Pte Ltd based
out at Singapore, which has subsidiaries, namely JBF Petrochemicals Limited at Mangalore,
India, JBF Trade Invest Pte Ltd at Singapore and JBF RAK LLC at UAE with its own
subsidiaries, JBF Bahrain WLL and JBF Global Europe BVBA at Belgium.
The Board would like to bring to the attention of all stakeholders that the step down
subsidiary namely JBF Petrochemicals Limited (JPL) had defaulted in payment of interest
and repayment of principal to its lenders in FY17-18. The consortium of lenders with IDBI
Bank as the lead banker had made an application under the Insolvency Bankruptcy Code, 2016
(IBC) to recover their dues before the National Company Law Tribunal, Ahmadabad in May
2018. The matter was heard and the said application has been admitted under the Insolvency
Bankruptcy Code, 2016 (IBC) on 28th January, 2022. Subsequent to the admission of the
application, the Resolution Professional (RP) appointed by the Committee of Creditors
(COC) has commenced CIRP proceedings as required under the IBC procedure. The Resolution
Professional has taken total control of the plant in Mangalore and the Board of JPL has
been suspended effective 28th January, 2022. JBF Trade Invest Pvt Ltd was strike off and .
Restructuring process is going on for JBF RAK LLC at UAE.
EXPLANATION/COMMENTS ON AUDIT QUALIFICATIONS
I.The Company's business as a "Going concern" -
As on the date of Balance Sheet, the lenders (except TMB) have assigned all their debts
to CFM. CFM has taken physical possession of the secured assets of the Company on 11th
November, 2021. Further, CFM has exercised its right to sell the secured assets by way of
private treaty under the SARFAESI Act, 2002 to recover their dues.
Also, CFM has been in the helm of affairs of all the plants and corporate affairs of
the Company w.e.f. 13th August, 2021 which is as per the provisions of the sArFAESI Act,
2002.
On 11th November 2021, CFM took physical possession of the secured assets of JBF.
Further the Company was in receipt of Intimation for sale of secured assets by way of
private treaty under the SARFAESI Act, 2002 on 11th May, 2022 and thereafter, proceeded to
sell the same by way of private treaty under the SARFAESI Act to Madelin Enterprises
Private Limited (MePl).
Further to the above mentioned points, we would like to bring to your kind attention
that the part secured assets including land, building, sundry debtors, investments, cash
and bank balances, deposits, intangible assets (including the SAP software) and other
movable assets have been sold to the MEPL by CFM on 6th June 2022 and balance assets were
sold by CFM to MEPL on 20th December, 2022. In addition, MEPL has also taken over the
affairs and operations of all the three plants and the corporate office and the current
Board of Directors have no control over the same. With effect from 1st December,2022
manufacturing operations from all locations have been discontinued.
2. INTEREST @ 9% ON BORROWINGS
Company has provided interest @ 9% p.a. on borrowings aggregating to 2,473.80 Crore for
the year from 1st April 2022 to 31st March, 2023 as against the documented rate as
required as per IND AS -23 "Borrowing Costs" read with IND AS-109 on
"Financial Instruments" resulting into lower provision of finance cost for the
year ended 31st March 2023 by Rs. 116.68 Crore.
3. CLAIM FILED BY AN OPERATIONAL CREDITOR OF JBF RAK LLC, (step-down subsidiary of the
company)
An application filed with National Company Law Tribunal (NCLT), Ahmadabad by one of the
operational creditors of JBF RAK, situated at U.A.E., a subsidiary of the Company, against
the Company, for supply of raw material to JBFRAK for a claim of Rs.128.48 crores (US$
19,899,091.53) as per notice dated 17th February, 2020.
Management is of the view that in view of negotiation with the above creditor by JBF
RAK and based on past settlement by the Company with above creditor in respect of raw
material purchased by the Company, there will be no liability on account of it to the
Company and hence no provision is required towards above claim.
CORPORATE GOVERNANCE
As per Regulations 34 (3) read with Schedule V of SEBI (Listing Obligations and
Disclosure Requirements) Regulation, 2015, a separate section on corporate governance
practices followed by the Company (including disclosures prescribed under Section II of
Part II of Schedule V of the Companies Act, 2013), together with a certificate from the
Company's Auditors on compliance forms an integral part of this report.
CORPORATE SOCIAL RESPONSIBILITY
The disclosures required under section 135 of the Companies Act, 2013, read with the
rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014 are
annexed to Directors' Report.
DISCLOSURE UNDER RULE 5 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.
The statement containing Particulars of remuneration of employees as required under
Section 197(12) of the Act, read with Rule 5(2) & 5(3) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014, is given in an annexure to the
Annual Report. In terms of Section 136(1) of the Act, the Annual Report is being sent to
the Member sharing the aforesaid annexure. The information is also available for
inspection by the Members at the Registered Office of the Company during business hours on
all working days except Saturdays and Sundays. Any Member desirous of obtaining a copy of
the said annexure may write to the Company Secretary and the same will be furnished on
request.
COMPANY POLICIES:
The Company has formulated various policies which are available on our website :
www.jbfindustries.co.in/about/
Nomination and Remuneration Policy
The Company has formed Nomination and Remuneration Committee and framed the
Remuneration Policy. The Committee has been given responsibility of appointment and
re-appointment of Whole-time Director, Directors, Key Managerial Persons and the specified
employees /executives of the Company and approving their remuneration based on their
qualification experience and responsibility in the Company. This Committee had no say in
the appointment of the above mentioned employees/executives post 13th August, 2021.
The salient features of Remuneration policy are included in Corporate Governance Report
forming part of this annual report.
RISK MANAGEMENT POLICY
As a good governance practice, the Company has constituted Risk Management Committee.
The Company has a Risk Management Policy and a team to evaluate business risks. However,
post 13th August, 2021 with CFM reigning control over the business operations of the
Company, the said Committee had a very limited role to play into the business affairs of
the Company.
Prior to 13th August, 2021, the Board of Directors used to regularly review risk and
threats in the business and takes suitable steps to safeguard Company's interest.
RELATED PARTY TRANSACTIONS POLICY
As per statutory requirement the Company has framed a robust related party transaction
policy. As a policy all related party transactions including sale and purchase which are
entered into with subsidiary companies, if any, are placed before the Audit Committee and
also before the Board for approval quarter on quarter. Omnibus approval is obtained on a
quarterly / annual basis for such transactions which are of repetitive nature.
There are no material related party transactions during the period under review with
the Promoters, Directors or Key Managerial Personnel. The Company has also formulated a
policy on materiality as regards to Related Party Transactions.
WHISTLE BLOWER POLICY
A whistle blower policy in terms of the Listing Regulations includes Ethics &
Compliance for senior executives of the Company. It also includes vigil mechanism.
Confidential 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.
All efforts are taken to accept the observations of the whistle blower and the
appropriate action is taken accordingly.
Prevention of Sexual Harassment at Workplace Policy and Preservation of Documents
Policy Separate Management Teams are appointed to review periodically at different
locations of the Company. These policies are also available on website of the Company.
FOREIGN EXCHANGE EARNING AND OUTGO
Foreign exchange earnings by way of export and freight were Rs.168.55 crores against an
outgo of Rs.76.12 crores on import of raw materials, stores, spares & consumables.
FIXED DEPOSITS
During the year Company has not accepted any Fixed Deposits from the general public.
PARTICULARS OF LOAN, GUARANTEES OR INVESTMENTS BY COMPANY
On 13th August, 2021, all the lenders (except Tamilnad Mercantile Bank Ltd) (TMB) have
assigned the debts along with all the rights and interests on the secured assets to CFM
Asset Reconstruction Private Limited (CFM) under the Securitization and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) by executing
two Assignment Agreements both dated 13th August, 2021. A total of 14 fourteen lenders
aggregating approximately 99 % of the total debt of the Company have assigned their debt
to an Asset Reconstruction Company called CFM Asset Reconstruction Private Limited as on
31st March, 2023
INSURANCE
All the properties of the Company including buildings, plant and machinery and stock
have been adequately insured.
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 134(3)
(c) of the Companies Act, 2013:
i. that in the preparation of the annual accounts for the year ended 31st March, 2023,
the applicable Indian Accounting Standards (IND- AS) have been followed along with proper
explanation relating to material departures, if any;
ii. 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 as at 31st March, 2023 and of the profit/
loss of the Company for the year ended on that date;
iii. 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;
iv. the annual accounts have been prepared on a going concern basis;
v. 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
vi. that the Directors had devised proper systems that were adequate and operating
effectively.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Board has devised proper systems to ensure compliance with the provisions of all
applicable Secretarial Standards issued by the Institute of Company Secretaries of India
and that such systems are adequate and operating effectively.
SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made
hereunder, the Company has appointed M/s. Mehta & Mehta, a firm of Company Secretaries
in Practice to undertake the Secretarial Audit of the Company for the year 2022-2023. The
Secretarial Audit Report is included as and forms an integral part of this Report.
The Company has appointed M/s SKSI as secretarial Auditor on 30th May 2023 to carry out
secretarial audit for the financial year 2023 - 2024.
STATUTORY AUDITOR
The Board of Directors of the Company has appointed of M/s. S. C. Ajmera & Co.,
Chartered Accountants, Udaipur (Registration No. 002908C) as the Statutory Auditors of the
Company for three years w.e.f. from 1st April, 2020 pursuant to Section 139 of the
Companies Act, 2013. Their appointment was confirmed and ratified by the Members in the
last Annual General Meeting held on 29th September, 2022.
ENVIRONMENT AND SAFETY
At JBF, health and safety of our employees have always been the highest priority. JBF
takes responsibility of its employees to promote and safeguard their health and working
environment. The target is to realize "Zero Accidents". JBF is one among the
best companies in terms of safety performance.
ACKNOWLEDGEMENT
The Board of Directors would like to express their grateful appreciation for the
assistance, support and co-operation received from the Lenders, Government Authorities and
Shareholders during the year under review.
The employees of the Company contributed significantly in achieving the results in
spite of the on-going turmoil within the Company. 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 |
|
S.N. SHETTY |
|
Executive Director |
|
DIN-07962778 |
|
ujjwala apte |
|
Executive Director |
|
DIN-00403378 |
Place : Mumbai |
|
Date : 30th May, 2023 |
|
|