To,
Members,
A AND M JUMBO BAGS LIMITED BLOCK NO.-100,
BHAGWATI RICE MILL,
OPP. HP PETROL PUMP,
JETALPUR, DASKROI,
AHMEDABAD GUJARAT - 382426.
Your Directors have pleasure to present their ninth report together with the Audited Accounts for the financial year ended 31st March 2021
1. Financial Performance:
Revenue from operations of company has decreased by about 55% over the previous year.
Profit after tax of company has been increased significantly.
2. Subsidiaries, Joint Ventures and Associate Companies
Nanuan Finance Private Limited is a wholly owned subsidiary of A and M Jumbo Bags Limited. Nanuan Finance Private Limited is Non-Banking Finance Company and its registered office is situated in KURALI ROAD ROPAR PUNJAB.
In accordance with section 129(3) of the Companies Act, 2013, the Company has prepared consolidated financial statements of the Company, which forms part of the Annual Report. Pursuant to the provision of the section 129(3) of the Companies Act, 2013, a statement containing salient features of the financial statements of the Company's subsidiaries in form AOC-1 is attached herewith as "Annexure - A" to the financial statement of the Company. The statement also provides the details of performance and financial position of the subsidiary of the Company The Company doesn't have any joint venture or Associate Company.
3. Cash flow and Consolidated financial statements:
As required under regulation 34 of the SEBI (LODR) Regulations, 2015, a Cash Flow Statement forms part of Annual Report and also the Company has also consolidated its Accounts with subsidiary company.
4. Directors and Key Managerial Personnel:
There are following changes in the Board of the company during the Financial Year.
1. Mr. NALIN VADILAL SHAH has resigned as Independent Director of the company with effect from 16th September 2020.
2. Mr. MANAN THOTHAWALA has been appointed as Independent director of the company with effect from 11th July 2020.
3. Mr. SAMIRBHAI PATEL has been appointed as Chief Financial Officer of the company with effect from 11th July 2020.
All the Directors of the Company have confirmed that they are not disqualified from being appointed as Directors in terms of Section 164 of the Companies Act, 2013
5. Annual Return:
A Copy of Annual return shall be published on company's website i.e. www.aandmjumbobags.com
6. Particulars of employees:
Statement containing particulars of employees under rule 5 (2) of the companies (Appointment and Remuneration of managerial Personnel) Rules, 2014 is attached herewith in Annexure B).
7. Dividends:
Your Directors do not propose to recommend any dividend for the year under consideration.
8. Material Changes.
• During the year under the company has allotted 34,90,000 equity shares through preferential allotment
Changes after closure of the year and before signing of board report.
Mrs. Zalak Parikh, Managing Director of company has been absconding from 29th July 2021 and further the board has received notice from shareholders regarding removal of Mrs. Zalak Parikh from the board of directors and board approved the removal of Mrs. Zalak Parikh subject to approval of Shareholders.
9. Finance Accounts:
a. Unless otherwise stated the Accounts of the Company have been drawn up on Accrual Basis and under historical cost convention.
b. These financial statements have been prepared to comply with the generally Accepted Accounting Principles in India (Indian GAAP), including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013.
10. Details of Adequacy of Internal Financial Controls:
The Company has adequate Internal Control System, commensurate with the size, scale and complexity of its operations. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls.
11. Register office shifting within the jurisdiction:
There has been no change in registered office address of the company.
12. Particulars Of Contracts Or Arrangements Made With Related Parties:
There is no related Party transaction entered during the Financial Year 2020-21. Except mentioned in Audit report Note 18.
13. Deposits:
The Company has not invited/ accepted or renewed any Public Deposits under the provisions of section 73 of the Companies Act, 2013 and the Rules made there under.
14. Board Evaluation:
The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual directors. Schedule IV, of the Companies Act, 2013, states that the performance evaluation of independent directors shall be done by the entire Board of Directors, excluding the director being evaluated. The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The Board approved the evaluation results as collated by the nomination and remuneration committee. None of the independent directors are due for re-appointment.
15. Statutory Auditors and Auditors' report :
• Auditors' qualification / remark on standalone financial statement:
(i) Company has defaulted in repayment of principal and interest of various loans from banks and NBFC during the year. It includes defaults in repayment of term loan, CC A/c, car loan, All unsecured loan from various NBFCs. We are unable to mention amount of overdue in absence of details and information provided to us for the verification.
(ii) Company has defaulted in payment of statutory dues like TDS liability of the year of Rs. 72654/-
(iii) Also Jobwork income of Rs. 9634512/- shown as indirect income, for the same supporting documents has not been provided to us for verification and GST liability of Rs. 1734212/- @ 18% on the same has not been created in books and also not paid.
(iv) Also tds liability of Rs. 66370/- u/s 194C @ 2% on shed construction jobwork of Rs. 3318488/- has not been created in books of account and also not paid for during the year and supporting documents of job work also has not been provided to us for the verification.
(v) Income tax liability (excluding interest u/s 234A, 234B and 234 C of income tax act) of Rs. 4733219/- for the year 2018-19 and liability of Rs. 398149/- for the financial year 2019-20 is also pending to pay as on reporting date.
(vi) We have not been provided statements of Gujarat Mercantile bank loan, HDFC car loan, Hero Fincorp term loan, Cosmos cooperative bank (closed), Dena bank (closed), SBI current account (closed) and Statement from all NBFCs for unsecured loan during the year for verification and we have relied upon management certificates for the same.
Board Comment:
-Turnover / sales of company has been decreased by almost 55% and company is currently facing liquidity issue, it is the main reason that the Company has defaulted in repayment of principal and interest of various loans from banks and NBFC during the year and also not able to pay TDS Liability.
-Due to less sales of manufacturing products company has taken job work for income generation, hence the same is shown in indirect income, moreover board is in continuous try for payment GST and statutory dues.
- In the matter of providing of documents, Mrs. Zalak Parikh - Managing Director, who is absconding since July 2021, has intentionally not provided documents to auditors
• There has been no any Auditors' qualification / remark on consolidated financial statement.
16. Risk Management Policy:
The Company has framework for managing its risk. It has led down detail procedure to inform Board member about the Risk assessment and Minimization Procedure. The Company has made the policy in this regard and the same is reviewed periodically to ensure the management control risk through means of proper define framework.
17. Conservation Of Energy, Technology Absorption, Foreign Exchange Earnings And Outgo:
The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are:
Conservation of Energy-
The Company is on a continuous basis striving to achieve economy in consumption of energy by optimizing the consumption of power and fuel. As a measure of power conservation, the company has initiated installing LED based electric utilities.
Technology absorption & Foreign Exchange Earnings and Outgo-
The Company has no activities relating to technology absorption and Foreign Exchange Earnings and Outgo.
18. Corporate Social Responsibility:
The Board of Directors of the company confirms that the provisions of Section 135(1) of the company act, 2013 is not applicable to your company during the year under review.
19. Change In The Nature Of Business :
There is no change in the nature of the business of the company during the financial year 2020-21.
20. Declaration by Independent Directors:
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of interdependence as prescribed under the provisions of the Companies Act, 2013 read with schedules and rules issued thereunder and same is Annexure "C" herewith.
Pursuant to Ministry of Corporate affair's four new rules as on 22nd October, 2019 namely Data Bank Notification relating to IICA, Companies (Accounts) Amendments Rules, 2019, Companies (Creation and Maintenance of Databank of Independent Directors) Rules, 2019 and Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019, all the existing Independent Directors have registered themselves with Indian Institute of Corporate Affairs.
21. Directors' responsibility statement as per section 134 (5) of companies act, 2013:
It is hereby stated that:
a) That in the preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.
b) That the Directors have selected such accounting policies & 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 2021 and of the profit and loss account for the year ended 31st March, 2021.
c) 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.
d) That the Directors have prepared the annual accounts on a going concern basis.
e) that proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively; and
f) Those proper internal financial controls were laid down and that such internal financial controls are adequate and were operating effectively.
22. In respect of Frauds noticed/ reported:
There have been no instances of fraud reported by the Auditors under Section 143(12) of the Companies Act, 2013 during the year under review.
23. Number of board meetings of the board:
During the Financial Year, Seven board meetings were held; dates of meetings are as follows;
24. SHARE CAPITAL
There has been following changes in authorized, issued and paid up capital share capital of the company during the year.
• During the year, Company has allotted 34,90,000 equity shares by way of Preferential allotment.
25. Audit Committee:
The Audit Committee consist of following members:
1. Mr. VARUN JIGNESHKUMAR SHAH - Non-executive director. Chairman
2. Mr. JAYPALSIN H VAGHELA - Independent Director.
3. Mr. MANAN THOTHAWALA - Independent Director.
[The Committee members are as on date of Closure of year i.e. 31st March 2021.] During the Financial Year there are three meetings held of Audit committee as follows:
26. Vigil Mechanism:
Pursuant to the provisions of Section 177 (9) & (10) of the Companies Act, 2013 read with Rule 7 of Companies (Meetings of Board and its Powers) Rules, 2014 and SEBI (LODR) Regulations, 2015, the Company has in place a Whistle Blower Policy, which provides for a vigil mechanism that encourages and supports its Directors and employees to report instances of illegal activities, unethical behavior, actual or suspected, fraud or violation of the Company's Code of Conduct or Ethics Policy. It also provides for adequate safeguards a gainst victimization of persons who use this mechanism and direct access to the Chairman of the Audit Committee in exceptional cases.
27. Nomination and Remuneration Policy:
The Company's policy on the appointment and remuneration of Directors and Key Managerial Personnel provides a framework based on which our human resources management aligns their recruitment plans for the strategic growth of the Company. The Nomination and Remuneration policy is provided herewith as at Annexure-D pursuant to provisions of Section 178(4) of the Companies Act, 2013.
Nomination remuneration committee Consist of following members;
1. Mr. BALWANTSINGH UJAGARSINGH PANNU - Non executive Director
2. Mr. JAYPALSINH VAGHELA - Independent Director
3. Mr. MANAN THOTHAWALA - Independent Director - Chairman
[The Committee members are as on date of Closure of year i.e. 31st March 2021.]
During the Financial Year there are Three meetings held of Nomination remuneration committee as follows:
28. Corporate Governance:
The compliance with the corporate governance provisions as specified in regulations 17 to 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 and para C, D and E of Schedule V are not applicable to the Company as the Company's securities are listed on SME Platform (Pursuant to Regulation 15 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015)
29. Management Discussion and analysis:
The Management Discussion and Analysis forms part of this Annual report is annexed with Annexure E.
30. Compliance with applicable Secretarial Standards:
The Company has devised proper system 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.
31. Other Disclosures:
• The Company is not required to maintain cost records, as specified by the Central Government under subsection (1) of section 148 of the Companies Act, 2013 for the financial year 2020-21.
• The Company has transferred amount of Rs. 16504 to reserves and surplus (free reserves).
• None of the directors are disqualified under section 164 of Companies Act, 2013.
32. Disclosure under Sexual Harassment of Women Workplace (Prevention, Prohibition and Redressal) Act, 2013.
During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. the Company has constituted committee called "Internal Complaints Committee" to ensure safe workplace environment, which covers all employees whether permanent, contractual, trainees, temporary etc
33. Significant Material order Passed by the regulators:
No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.
34. Particulars of Loans, Guarantees and Investments
The Company has not granted any loan or provided any guarantee or made any investment exceeds the limit specifies in section 186(2) of the Companies Act, 2013.
35. Secretarial Auditor:
M/s M K Chokshi & Associates, Practicing Company Secretaries, Ahmedabad has been appointed by board as a secretarial auditor of Company for Financial Year 2020-21. There has been no qualification, reservation or adverse remark or declaimer made by secretarial auditor.
Qualifications, reservation or adverse remark or declaimer made secretarial auditor are as follows:
(a) There has been defaults for non-filing of ROC e-forms within the timeline provided under the provisions in case of below matters.
E-Form AOC-4 XBRL, MGT-7 for Annual filing of the Company has not been filed for year ended 31/03/2020. DIR-12 (Regularization of Additional Directors) has not been filed for Mr. Jaypalsinh Vaghela and Mr. Manan Thothawala
MGT-14 has not been filed for preferential allotment with regards to the board meeting held on 12th November, 2020.
MGT-14 has not been filed for preferential issue with regards to the board meeting held on 12th November, 2020.
(b) As per the Compliances provided in Secretarial Standards, there has been irregularity in maintaining minutes, which have been duly regularized during the year.
(c) As per the compliances in the Secretarial Standards-2 as well as per the listing regulations of SEBI, the company's website is non-operational; thereby no notices or reports have been duly uploaded on the website of the Company.
(d) No Managerial Remuneration in compliance with Section 197 has been provided to Directors, Managing Director/Whole time Director.
(e) With regards to the provisions of the Companies Act, 2013, wherein the Company has taken various loan from banks and NBFCs, but the company has defaulted in repayment of term loan, CC a/c, car loan and other unsecured loan, reference of the same is mentioned in the audit report of the Company.
(f) Company has made defaults in payment of statutory dues of TDS, Income Tax, GST during the year
(g) The Company has not been maintaining proper books of accounts and other documentation so audit has been conducted based on the management declarations.
(h) It has been observed that the term loans taken by the Company were not utilized for the purpose it was borrowed.
Board Comments on secretarial audit report:
(i) During the process of secretarial audit, Mrs. Zalak Parikh has been absconded and due to this arranging documents and providing the same was not possible by the management.
(ii) Due to decrease in sales, the board has not provided managerial remuneration to directors during the year.
(iii) Some e-forms, which are required to be filed with Registrar, are left for filing and board will file the same with Registrar of companies in upcoming period.
The Secretarial Audit report for Financial Year is attached herewith. (Annexure G)
36. Acknowledgement:
The Board wishes to place on record its gratitude for the co-operation and assistance extended by the Bankers, Departments of State Governments. We on behalf of the Company assure the shareholders that company will make every effort to meet their aspirations.
For & on Behalf of Board of Directors
A AND M JUMBO BAGS LIMITED