Mar 31, 2018
The Shareowners
The Directors have pleasure to present 14th Annual Report on the business and operations of the Company together with the audited IND AS financial statements (standalone and consolidated) for the year ended 31st March, 2018.
FINANCIAL REVIEW (Rs. in lakhs)
Particulars |
Standalone |
Consolidated |
||
31.03.2018 |
31.03.2017 |
31.03.2018 |
31.03.2017 |
|
Net sales / Income from Operation |
14073.16 |
10505.78 |
14264.19 |
10505.78 |
Other Income |
494.78 |
43.00 |
498.06 |
43.01 |
Interest & Finance Charges |
73.65 |
61.80 |
73.75 |
61.80 |
Depreciation |
680.64 |
635.70 |
681.32 |
636.11 |
Profit /(Loss ) before Tax |
4109.65 |
515.87 |
3842.34 |
513.68 |
Tax Expense: |
||||
Current tax (provision for tax) |
198.22 |
5.28 |
198.22 |
5.28 |
Deferred tax asset |
1096.54 |
(1685.19) |
1028.83 |
(1685.19) |
Tax for earlier years |
9.85 |
- |
9.85 |
- |
Total Tax Expense |
1304.62 |
(1679.92) |
1236.91 |
(1679.92) |
Profit /(Loss ) after Tax |
2806.61 |
2199.52 |
2607.02 |
2197.33 |
Profit /(Loss ) to be carried to the Balance Sheet |
2806.61 |
2199.52 |
2607.02 |
2197.33 |
Paid up Equity Share Capital ( Face Value of C10/- each ) |
6090.04 |
4412.04 |
6090.04 |
4412.04 |
Reserve excluding revaluation reserve |
- |
- |
- |
|
Basic EPS ( in Rupees not annualized ) Excluding extra ordinary items |
4.96 |
5.46 |
4.61 |
5.45 |
Diluted EPS ( in Rupees not annualized) Excluding extra ordinary items |
4.60 |
3.70 |
4.27 |
3.69 |
REVIEW OF OPERATIONS
Company was successful to achieve it target fixed at the beginning of the financial year and generated the revenue from operations during the financial year ended 31st March, 2018 amounted to Rs.1407.32 Million as compared to Rs.1050.58 Million during the previous year ended 31.03.2017. The Turnover of the company has increased by 33.96% over and above the previous year.
DIVIDEND
The company is expanding its business and requires surplus to be ploughed back in the company. Hence, your directors are constraint to declare any dividend.
During year under review (Financial Year 2017-18), the Board of Directors has not recommended any dividend.
On February 27, 2018, an amount of unclaimed dividend of Rs.43,276/- pending for claim for the Financial year 2009-10 has been transferred to the Investor Education and Protection Fund ( IEPF).
FINANCIAL STATEMENTS
In accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as ''Listing Regulations'') and Section 136 of the Companies Act, 2013 read with Rule 10 of the Companies (Accounts) Rules, 2014, the abridged Annual Report containing salient features of the financial statements, including Consolidated Financial Statements, for the financial year 2017-18, along with statement containing salient features of the Directors'' Report (including Management Discussion & Analysis and Corporate Governance Report) is being sent to all shareholders who have not registered their email address(es) for the purpose of receiving documents/ communication from the Company in electronic mode. Please note that you will be entitled to be furnished, free of cost, the full Annual Report 2017-18, upon receipt of written request from you, as a member of the Company. Full version of the Annual Report 2017-18 containing complete Balance Sheet, Statement of Profit & Loss, other statements and notes thereto, including Consolidated Financial Statements, prepared as per the requirements of Schedule III to the Companies Act, 2013, Directors'' Report (including Management Discussion and Analysis, and Corporate Governance Report is being sent via email to all shareholders who have provided their email address(es). Full version of Annual Report 2017-18 is also available for inspection at the corporate office of the Company during working hours up to the date of ensuing Annual general meeting (AGM). It is also available at the Company s website at www.svendgaard.com.
CONSOLIDATED FINANCIAL STATEMENTS
In compliance with the applicable provisions of Companies Act, 2013 including the Accounting Standard Ind AS 110 on Consolidated Financial Statements, this Annual Report also includes Consolidated Financial Statements for the financial year 2017-18. Consolidated Turnover was Rs.14264.19 Lakhs as against Rs.10505.78 lakhs in the previous year. Net Profit after Tax for the year stood at Rs.2607.00 lakhs against Rs.2197.33 Lakhs in the previous year.
OPERATIONS AND BUSINESS PERFORMANCE
Kindly refer to the integrated reporting and Management Discussion & Analysis and Corporate Governance Report which forms part of this report.
CORPORATE GOVERNANCE
JHS believes in adopting the best practices of Corporate Governance, Corporate Governance Principles are enshrined in the spirit of JHS, which form the core values of JHS. These guiding principles are also articulated through the company''s code of business conduct, corporate governance guidelines, character of various subcommittees and disclosure policy.
JHS has adopted the industry best practices of Corporate Governance and aims to run its business on the highest principles of governance and ethics. At JHS, Corporate Governance is more than just adherence to the statutory and regulatory requirements. It is equally about focusing on voluntary practices that underlie the highest levels of transparency. JHS''s governance framework is driven by the objective of enhancing long term stakeholder value without compromising on ethical standards and corporate social responsibilities.
A certificate from M/s Mohit & Associates, Practising Company Secretary, regarding compliance of the conditions of Corporate Governance, as stipulated under Schedule V of the Listing Regulations is attached as ''Annexure 1'' and forms part of this report. Certificate of the CEO/CFO, inter-alia, confirming the correctness of the financial statements, compliance with Company s Code of Conduct, adequacy of the internal control measures and reporting of matters to the auditors and the Audit committee in terms of Regulation 17 of the Listing Regulations is attached in the Corporate Governance report, and forms part of this report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. C.R. Sharma and Mrs. Manisha Lath Gupta, Independent Directors, were ceased their offices on account of resignation with effect from 19.01.2018 and 30.08.2017 respectively. The Board places on record its appreciation to the invaluable contribution, guidance provided by them to the company.
Mrs. Rohina Sanjay Sangtani, was appointed as additional director to the office of an Independent Women Director w.e.f. 21.11.2017, appointment of her as the regular director is due at the ensuring Annual General Meeting of the Company.
Ms. Deepshikha Tomar, the Company Secretary of the Company was stepped down to the Dy. Company Secretary of the Company and Mr. Sanjeev Kumar Singh, was appointed as the Company Secretary & Compliance Officer of the Company with effect from 01st February, 2018 in the Board Meeting dated 30th January, 2018.
Pursuant to Section 152 and other applicable provisions, if any, of the Companies Act, 2013, one-third of such of the Directors as are liable to retire by rotation, shall retire every year and, if eligible, offer them for re-appointment at every AGM. Consequently, Mr. Vanamali Polavaram, Non-Executive Director will retire by rotation at the ensuing AGM, and being eligible, offers himself for re-appointment in accordance with the provisions of the Companies Act, 2013.
During the year, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company.
The key Managerial personnel (KMP) in the Company as per section 2(51) and 203 of the Companies Act, 2013 are as follows:
Mr. Nikhil Nanda - Managing Director
Mr. Ajay Bansal - Chief Financial Officer
Mr. Paramvir Singh - Chief Executive Officer
Mr. Sanjeev Kumar Singh - Company Secretary & Compliance Officer
POLICY ON DIRECTORS'' APPOINTMENT AND POLICY ON REMUNERATION
Pursuant to Section 134(3)(e) and Section 178(3) of the Companies Act, 2013, the policy on appointment of Board members including criteria for determining qualifications, positive attributes, independence of a Director and the policy on remuneration of Directors, KMP and other employees is attached as Annexure 2 & 3 respectively, which forms part of this report.
PARTICULARS OF REMUNERATION OF DIRECTORS/ KMP/ 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 attached as ''Annexure 4'' which forms an integral part of this report. The information showing names and other particulars of employees as per Rule 5(2) and 5(3) of the aforesaid Rules forms part of this report. However, as per 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 and others entitled thereto. The said information is available for inspection by members at the corporate office of the Company during business hours on all working days upto the date of ensuing annual general meeting. Any member interested in obtaining a copy thereof, may also write to the Company Secretary at the corporate office of the Company.
COMMITTEES OF THE BOARD
Currently, the Board has five committees: the Audit Committee, the Nomination & Remuneration Committee, the Stakeholders Relationship Committee, the Corporate Social Responsibility Committee and the Allotment Committee. A detailed note on the composition of the Board and its committees is provided in the Corporate Governance Report section of this report.
AUDIT COMMITTEE
The Company has duly constituted an Audit Committee, whose detailed composition and powers are provided in the Corporate Governance Report. There were no recommendations of the Audit Committee which have not been accepted by the Board during the financial year.
NUMBER OF BOARD & COMMITTEE MEETINGS
During the year under review, six Board meetings, six Audit Committee meetings, four Stakeholders Relationship Committee meetings, two Nomination & Remuneration Committee meetings, two Allotment Committee meetings and one independent directors meeting were convened and held. Details and attendance of such Board & Committees meetings are provided in Corporate Governance Report Annexed herewith and forming integral part of this report.
DECLARATION OF INDEPENDENCE BY DIRECTORS
Pursuant to the provisions of Sub-Section (6) of Section 149 of the Companies Act, 2013, the Company is in receipt of the Declaration given by each Independent Directors meeting the criteria of Independence as provided is received and taken on record.
PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS
Pursuant to applicable provisions of the Companies Act, 2013 read with the Listing Regulations, the Board, in consultation with its Nomination & Remuneration Committee, has formulated a framework containing, inter-alia, the criteria for performance evaluation of the entire Board of the Company, its Committees and individual Directors, including Independent Directors.
A structured questionnaire, covering various aspects of the functioning of the board and its Committee, such as, adequacy of the constitution and composition of the Board and its Committees, matters addressed in the Board and Committee meetings, processes followed at the meeting, Board s focus, regulatory compliances and Corporate Governance, etc., is in place. Similarly, for evaluation of individual Director''s performance, the questionnaire covering various aspects like his/her profile, contribution in Board and Committee meetings, execution and performance of specific duties, obligations, regulatory compliances and governance, etc., is also in place.
Board members had submitted their response for evaluating the entire Board, respective committees of which they are members and of their peer Board members, including Chairman of the Board.
The Independent Directors had a separate meeting held on January 30, 2018. No Directors other than Independent Directors had attended this meeting. Independent Directors discussed inter-alia the performance of Non-Independent Directors and Board as a whole and the performance of the Chairman of the Company after taking into consideration the views of Executive and Non- Executive Directors.
The performance evaluation of all the Independent Directors have been done by the entire Board, excluding the Director being evaluated. On the basis of performance evaluation done by the Board, it shall be determined whether to extend or continue their term of appointment, whenever the respective term expires.
The Directors expressed their satisfaction with the evaluation process.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provision under Section 134(5) of the Companies Act, 2013, with respect to the Directors'' Responsibility Statement, the directors confirm:
i. That in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;
ii. That they 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 of the Company for that period;
iii. That they had 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;
iv. That they had prepared the annual accounts on a going concern basis;
v. That they had laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and were operating effectively;
vi. That they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
STATUTORY AUDITORS & THEIR REPORT
Statutory Auditors
Pursuant to the provisions of section 139 of the Companies Act, 2013, M/s S. N. Dhawan & Co. LLP, Chartered Accountants, (Firm Regn. No. 000050N/ N500045) were appointed as Statutory Auditors of the Company for a term of five consecutive years, to hold office from the conclusion of the 11th Annual General Meeting held on 1st September 2015 till the conclusion of 16th Annual General Meeting to be held in Calendar year 2020 subject to annual ratification by the members at every Annual General Meeting of the company on such remuneration as may be decided by the Audit Committee of the Board. However, as per the Companies (Amendment) Act, 2017, the requirement of annual ratification has been omitted, which is yet to be notified. Accordingly, the ratification of their appointment shall be placed before the shareholders, in the ensuing Annual General Meeting, if so required. Pursuant to the provisions of Section 139 to 141 of the Companies Act, 2013 Company has received a certificate from M/s S. N. Dhawan & Co. LLP, Chartered Accountants to the effect that their re-appointment, if made, would be within the prescribed limits under Section 141(3) (g) of the Companies Act, 2013 and relevant rules prescribed thereunder and that they are not disqualified for re-appointment and no pending proceedings against them or any of their partners with respect to professional matters of conduct.
The auditor have also confirmed that they have subjected themselves to the peer review process of the Institute of Chartered Accountants of India (ICAI) and holds a valid certificate issued by the Peer Review Board of the ICAI.
Report of Statutory Auditors
Auditors Qualification and Managements Representation thereon are as follows:
The Company has recognized net income amounting to Rs.2,727.21 Lakhs in the year ended 31st March, 2018 on account of compensation received pursuant to Settlement Agreement dated 28th March, 2017, instead of recognizing the same in the year ended 31st March, 2017. This constitutes a material departure from the India Accounting Standards (Ind AS) referred to in section 133 of the Companies Act, 2013. Consequently, the exceptional income for the year ended 31st March, 2018 is over stated and the exceptional income for the year ended 31st March, 2017 is understated by Rs.2727.21 lakhs. Had the company followed the correct accounting, the net profit after tax for the year ended 31st March, 2018 would have been reduced by Rs.2727.21 lakhs and increased by the same amount for the year ended 31st March, 2017, the carrying amount of other current assets as at the previous year ended 31st March, 2017 would have increased by Rs.2,475 Lakhs, deferred tax assets (net) as at the previous year ended 31st March, 2017 would have been reduced by 843.65 lakhs as at the previous year ended 31st March, 2017 and other equity would have increased by C1883.56 lakhs as at the previous year ended 31st March, 2017. This was a matter of qualification in the previous year as well.
Managements Representation:
The amounts received from P&G on account of Settlement should be considered and accounted for as Income only in 2017-18 as the Arbitral Tribunal has given its final Award on 03.04.2017 and two SLPs from the Supreme court were withdrawn on 06.04.2017 & 12.04.2017. the applicable TDS on the respective settlement amounts have been deducted and deposited during the FY 2017-18 only.
One of the conditions in the settlement agreement is pending. Though, it was not a condition precedent to the payment of the settlement amount, however in the terms of the agreement and thus unless not concluded, the Settlement Agreement can''t be termed as completed as the material conditions precedent were dependent on the authorities which were not within the control of the company. Thus, it was inappropriate in view of the management, to recognize the income in FY 2016-17. Accordingly, net compensation of the settlement amounting to Rs.2727.21 lakhs has been accounted as income during the year ended 31st March, 2018 and as shown under exceptional items.
SECRETARIAL AUDITORS & THEIR REPORT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 M/s Mohit & Associates, Practising Company Secretaries, was appointed the Secretarial Auditor for the financial year 2017-18 to conduct the secretarial audit of the company, The Secretarial Audit Report submitted by them in the prescribed form MR- 3 is attached as ''Annexure 5'' and forms an integral part of this report.
There are no qualifications or observations or other remarks by the Secretarial Auditors in their Report issued by them for the financial year 2017-18 which call for any explanation from the Board of Directors.
M/s Mohit & Associates, Practising Company Secretaries, have been re-appointed to conduct the Secretarial Audit of the Company for the financial year 2018-19. They have confirmed that they are eligible for such re-appointment.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT
The Statutory Auditors or Secretarial Auditors of the Company have not reported any frauds to the Audit Committee or to the Board of Directors under Section 143(12) of the Companies Act, 2013, including rules made thereunder.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
According to Section 134(5)(e) of the Companies Act, 2013 the term Internal Financial Control (IFC) means the policies and procedures adopted by the company for ensuring the 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.
The Company has a well-placed, proper and adequate IFC system which ensures that all assets are safeguarded and protected and that the transactions are authorised, recorded and reported correctly. The Company''s IFC system also comprises due compliances with Company s policies and Standard Operating Procedures (SOP s) and audit and compliance, supplemented by internal audit checks from M/s VSD & Associates, Chartered Accountants, the Internal Auditors. The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the majority of the transactions in value terms. Independence of the audit and compliance is ensured by direct reporting of Internal Audit Division and Internal Auditors to the Audit Committee of the Board. Additionally during the year ''M/s MAZARS Advisory Private Limited'' have also been engaged for providing assistance in improvising IFC framework (including preparation of Risk & Control Matrices for various processes) and deployment of Self-Assessment Tool.
The Companies Act, 2013 re-emphasizes the need for an effective Internal Financial Control system in the Company. The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the 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 disclosures. The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis, which forms part of this report.
Development and implementation of Risk Management
JHS is having comprehensive risk assessment and minimization procedure in place, which are reviewed by the Board periodically. The Board is responsible for preparation of Risk Management plan, reviewing, monitoring and updating the same on regular and ongoing basis. Audit Committee is also taking care for critical risks on yearly basis.
Further, the risks control systems are instituted to ensure that the risks in each business process are mitigated. The Audit Committee of the Board is responsible for the overall risk management in coordination with Internal Auditor who report directly to the Board.
In the opinion of the Board there have been no identification of elements of risk that may threaten the existence of the company.
NATURE OF BUSINESS
There has been no change in the nature of business of the Company. However, after the closure of the financial year under review, M/s JHS Svendgaard Retail Ventures Private Limited, has become the subsidiary of the company.
However the company is into the process of closure of its non-operational unit M/s Jai hanuman Exports (a unit of JHS Svendgaard Laboratories Limited) located at H-3A, SDF, NSEZ, Noida, Phase-II, Dadri Road, Gautam Buddh Nagar, U.P., India. We expect that the closure would be completed by the current financial year. No material effect will be impacted on account of such closure.
JHS Svendgaard Retail Ventures Pvt. Ltd. is engaged into the Chain of Retail Stores at various Airports in or outside India. The First Retail Store of the company is functional at the Indira Gandhi International Airport (T2 Terminal) at Delhi. The company has plan to open 150 stores at various Airports in coming future.
SUBSIDIARY COMPANY
During the year under review there are two subsidiaries i.e. M/s JHS Svendgaard Brands Limited (formerly known as JHS Svendgaard Dental Care Limited) and M/s JHS Svendgaard Mechanical and Warehouse Private Limited, as on March 31, 2018.
However, after the close of financial year 2017-18, M/s JHS Svendgaard Retail Ventures Pvt. Ltd. has become the Subsidiary of the company with effect from April 13, 2018. There are no associate companies within the meaning of Section 2(6) of the Companies Act, 2013 (âAct"). There has been no material change in the nature of the business of the subsidiaries.
Pursuant to Section 129 (3) of the Companies Act, 2013 and Ind AS-110 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company include the financial statements of its subsidiaries.
Further, a separate statement containing salient features of the financial statements of the subsidiaries in the prescribed Form AOC-1 has been disclosed in the consolidated financial statements.
Pursuant to the provisions of section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries, are available on the website of the Company www.svendgaard. com. The company will make available physical copies of these documents upon request by any shareholders of the company/subsidiary interested in obtaining the same.
These documents can also be inspected at the registered office of the company during business hours up to the date of ensuing AGM.
EXTRACT OF ANNUAL RETURN
Pursuant to the provision of Section 92(3) of the companies Act, 2013 read with Rule 12 (1) of the Companies (Management and Administration) Rules, 2014, the extract of annual return as on 31st March, 2018 is attached herein Annexure-6 in the prescribed Form MGT-9, which forms an integral part of this report.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The particulars of loans, guarantees and investments under section 186 of the Companies Act, 2013 as at the end of the financial year ended on 31st March, 2018 have been disclosed in the standalone financial statements of the company. Kindly refer the relevant note to these statements.
CONTRACTS/ARRANGEMENTS WITH RELATED PARTIES
With reference to Section 134(3)(h) of the Companies Act, 2013, all contracts and arrangements with related parties under Section 188(1) of the Act, entered by the Company during the financial year, were in the ordinary course of business and on an arm''s length basis.
During the year, the company has not entered into any contract or arrangement with related parties which could be considered material (i.e transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements entered into individually or taken together with previous transactions during the financial year) according to the policy of the company materiality of Related party Transactions, there are no transactions that are required to be reported in Form AOC-2.
The Company disclosed all related party transactions in relevant Notes to the Standalone Financial Statements of the year.
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 is furnished in Annexure ''7'' and is attached to this report.
CORPORATE SOCIAL RESPONSIBILITY
Considering the last audited results of company, the Provisions of Section 135 of the Companies Act, 2013 has become applicable on the company and accordingly in compliance with the same, the company has constituted a CSR Committee and formulates the CSR Policy of the Company which is available on the website of the Company www.svendgaard.com. The constitution of the Committee and the details of the meeting have been provided on the Corporate Governance Report, which forms an integral part of this report.
However, during the year under review, your Company did not expand any amount of the CSR activities due to non availability of the profits during immediately preceding years.
MATERIAL CHANGES AND COMMITMENTS
Change in Capital Structure and Listing of Shares
As on the date paid up capital of the company is increased to Rs.60,90,04,650 consisting of 6,09,00,465 fully paid up equity shares of Rs.10/- each.
During the year under review, the company had allotted 1,67,80,000 Fully paid up equity shares of Rs.10 each due to conversion of Fully Convertible Warrants issued in FY2015-16 to the persons belonging to the promoter and non promoter category on a Preferential basis at an issue price of Rs.11/- per warrant in accordance with the provisions of the SEBI (ICDR) Regulations, 2009 read with relevant provisions of Companies Act, 2013. Equity shares allotted pursuant to conversion of Fully Convertible Warrants during the financial year 2017-18 are as follows:
(i) 4,40,000 equity shares allotted on 23.05.2017
(ii) 1,63,40,000 equity shares allotted on 06.07.2017
Out of the above 1,63,60,000 equity shares are pending for the listing approval at BSE and NSE.
DISCLOSURE ON DEPOSIT UNDER CHAPTER V
During the year under review the Company has neither accepted nor renewed any deposit in terms of Chapter V of the Companies Act, 2013 and Rules framed thereunder.
VIGIL MECHANISM
As per Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has established Vigil Mechanism through which Directors, Employees, and Business Associates may report unethical behavior, malpractices, wrongful conduct fraud, violation of company''s code of conduct without any fear of reprisal. Vigil Mechanism is being overseen by the Audit Committee for the genuine concerns expressed by the employees and the Directors. The provisions of this policy are in line with the provisions of the Section 177(9) of the Companies Act, 2013. The said Policy provides adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided direct access to the chairman of the Audit Committee on reporting issues concerning the interests of employees and the Company. The policy as approved by the Board is uploaded on the Company''s website at http://svendgaard.com/download/ invester/Vigil_Mechansim/VIGIL%20MECHANISM%20 POLICY.pdf
DISCLOSURE ON SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013
The Company has zero tolerance for sexual harassment at workplace. A policy has been adopted in line with the Sexual harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under. During the year, no complaints pertaining to sexual harassment were received.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERNS STATUS AND COMPANY''S OPERATIONS IN FUTURE
The Company has not received any significant or material orders passed by any regulatory Authority, Court or Tribunal which shall impact the going concern status and Company s operations in future.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANICAL POSITION OF THE COMPANY
There have been no material changes and commitments affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of this report.
INDUSTRIAL RELATIONS
The Company maintained healthy, cordial and harmonious industrial relations at all levels. The enthusiasm and unstinting efforts of employees have enabled the Company to remain at the leadership position in the industry. It has taken various steps to improve productivity across organization.
ACKNOWLEDGEMENTS
Your Directors take this opportunity to thank all customers, shareowners, suppliers, bankers, business partners/ associates, financial institutions and the Central Government and the State Government for their consistent support and encouragement provided by them in the past. Your Directors conveying their sincere appreciation to all employees of the Company and its subsidiaries and associates for their hard work and commitment. Their dedication and competence has ensured that the Company continues to be a significant and leading player in this industry.
For and on behalf of the Board of
JHS Svendgaard Laboratories Limited
Nikhil Nanda Mukul Pathak
Date : 14.08.2018 Managing Director Independent Director
Place : New Delhi DIN: 00051501 DIN: 00051534
Mar 31, 2016
THE MEMBERS
The Directors have pleasure in presenting the 12th Annual Report on the business and operation of your Company along with the standalone and consolidated financial statements for the year ended 31st March, 2016.
Financial Review
(Rs. in lakhs)
Particulars |
Standalone |
Consolidated |
||
|
31.03.2016 |
31.03.2015 |
31.03.2016 |
31.03.2015 |
Net sales / Income from Operation |
10008.54 |
5532.39 |
10008.54 |
5532.39 |
Other Income |
73.01 |
85.89 |
73.01 |
87.14 |
Interest & Finance Charges |
36.48 |
14.08 |
36.48 |
14.08 |
Depreciation |
1048.50 |
1234.63 |
1048.92 |
1235.56 |
Profit /(Loss ) before Tax |
-815.33 |
-2209.50 |
-816.65 |
-2213.27 |
Provision for Tax |
0.16 |
4.42 |
0.16 |
4.42 |
Profit /(Loss ) after Tax |
-815.49 |
-2213.92 |
-816.81 |
-2217.69 |
Profit /(Loss ) to be carried to the Balance Sheet |
-815.49 |
-2213.92 |
-816.81 |
-2217.69 |
Paid up Equity Share Capital (Face Value of rs. 10/- each ) |
3763.50 |
2409.53 |
3763.50 |
2409.53 |
Reserve excluding revaluation reserve |
- |
7774.02 |
- |
9550.38 |
Basic EPS (in Rupees not annualized ) Excluding extra ordinary items |
-3.17 |
-9.19 |
-3.18 |
-9.20 |
Diluted EPS ( in Rupees not annualized) Excluding extra ordinary items |
-3.17 |
-9.19 |
-3.18 |
-9.20 |
Review of Operations
The Turnover from the operation of the company during the financial year ended 31st March 2016 amounted to C1000 Million as compared to C553 Million during the previous year ended 31.03.2015. The Turnover of the company has increased by 80.91% from the previous year mainly on accounts of the Tooth paste Business of the contract manufacturing as well as company''s own brand.
Dividend
The Directors hereby inform that in the financial year 201516, the Board of Directors has not recommended any dividend due to the acute financial distress faced by the Company.
Abridged Financial Statements
In accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as ''Listing Regulations'') and Section 136 of the Companies Act, 2013 read with Rule 10 of the Companies (Accounts) Rules, 2014, the abridged Annual Report containing salient features of the financial statements, including Consolidated Financial Statements, for the financial year 2015-16, along with statement containing salient features of the Directors'' Report (including Management Discussion & Analysis and Corporate Governance Report) is being sent to all shareholders who have not registered their email address(es) for the purpose of receiving documents/ communication from the Company in electronic mode. Please note that you will be entitled to be furnished, free of cost, the full Annual Report 2015-16, upon receipt of written request from you, as a member of the Company. Full version of the Annual Report 2015-16 containing complete Balance Sheet, Statement of Profit & Loss, other statements and notes thereto, including Consolidated Financial Statements, prepared as per the requirements of Schedule III to the Companies Act, 2013, Directors'' Report (including Management Discussion and Analysis, and Corporate Governance Report is being sent via email to all shareholders who have provided their email address(es). Full version of Annual Report 2015-16 is also available for inspection at the corporate office of the Company during working hours up to the date of ensuing Annual general meeting (AGM). It is also available at the Company s website at www.svendgaard.com.
Consolidated Financial Statements
In compliance with the applicable provisions of Companies Act, 2013 including the Accounting Standard 21 on Consolidated Financial Statements, this Annual Report also includes Consolidated Financial Statements for the financial year 2015- 16.
Operations and Business Performance
Kindly refer to Management Discussion & Analysis and Corporate Governance Report which forms part of this report.
Corporate Governance
Corporate Governance is all about ethical conduct, openness, integrity and accountability of an enterprise. Good Corporate Governance involves a commitment of the Company to run the business in a legal, ethical and transparent manner and runs from the top and permeates throughout the organization. It involves a set of relationships between a company''s management, its Board, shareholders and Stakeholders. It is a key element in improving the economic efficiency of the enterprise. Credibility offered by Corporate Governance helps in improving the confidence of the investors - both domestic and foreign, and establishing productive and lasting business relationship with all stakeholders.
A certificate from M/s Mohit & Associates, Practicing Company Secretary, regarding compliance of the conditions of Corporate Governance, as stipulated under Schedule V of the Listing Regulations is attached as ''Annexure 1'' and forms part of this report. Certificate of the CEO/CFO, inter-alia, confirming the correctness of the financial statements, compliance with Company s Code of Conduct, adequacy of the internal control measures and reporting of matters to the auditors and the Audit committee in terms of Regulation 17 of the Listing Regulations is attached in the Corporate Governance report, and forms part of this report.
Directors and Key Managerial Personnel
Mr. Amarjit Singh and Mr. P.K Misra, Independent Directors, stepped down from the Board of the Company on 11th February, 2016. Mr. Amarjit Singh was appointed as an independent director at the Annual General Meeting of the Company held on December 29, 2014 and Mr. P K Misra was appointed as an Independent Director with effect from March, 25, 2015 in the general meeting held through postal ballot. The Board places on record its appreciation of the invaluable contribution and guidance provided by both of them.
Mrs. Kalyani Polavaram, Women Director of the Company also resigned from the Company in the Board meeting of the company held on 11th February, 2016. She was appointed as a Woman Director of the company at the Annual General Meeting of the company held on 29th December, 2014.
Mrs. Manisha Lath Gupta was appointed as an Additional Director with effect from February 11, 2016. Her appointment is to be confirmed by the members in the ensuing Annual General Meeting. The terms and conditions of her appointment as an independent director are as per Schedule IV of the Act. She has submitted a declaration that she meets the criteria of independence as provided in Section 149(6) of the Act and there has been no change in the circumstances which may affect her status as independent director during the year.
The Board of Directors of the Company has appointed Mr. Nikhil Vora as a Nominee Director of the Company in the board meeting held on February 11, 2016. However his appointment is subject to the approval of the members of the Company in the ensuing Annual General Meeting.
Pursuant to Section 152 and other applicable provisions, if any, of the Companies Act, 2013, one-third of such of the Directors as are liable to retire by rotation, shall retire every year and, if eligible, offer themselves for re appointment at every AGM. Consequently, Mr. Vanamali Polavaram, NonExecutive Director will retire by rotation at the ensuing AGM, and being eligible, offers himself for re-appointment in accordance with the provisions of the Companies Act, 2013.
During the year, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company.
The key Managerial personnel (KMP) in the Company as per section 2(51) and 203 of the Companies Act, 2013 are as follows:
Mr. Nikhil Nanda - Managing Director Mr. Vishal Sarad Shah - Whole Time Director Mr. Neeraj Kumar - Chief Financial Officer Mr. Paramvir Singh - Chief Executive Officer Mr. Dhiraj Kumar Jha - Company Secretary &
Compliance Officer
During the year accept reappointment of Mr. Nikhil Nanda as managing director, there was no change (appointment or cessation) in the office of KMP
Policy on Directors'' appointment and Policy on remuneration
Pursuant to Section 134(3)(e) and Section 178(3) of the Companies Act, 2013, the policy on appointment of Board members including criteria for determining qualifications, positive attributes, independence of a Director and the policy on remuneration of Directors, KMP and other employees is attached as Annexure 2 & 3 respectively, which forms part of this report.
Particulars of remuneration of Directors/ KMP/ 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 attached as ''Annexure 4'' which forms part of this report. The information showing names and other particulars of employees as per Rule 5(2) and 5(3) of the aforesaid Rules forms part of this report. However, as per 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 and others entitled thereto. The said information is available for inspection by members at the corporate office of the Company during business hours on all working days up to the date of ensuing annual general meeting. Any member interested in obtaining a copy thereof, may also write to the Company Secretary at the corporate office of the Company.
Committees of the Board
Currently, the Board has six committees: the Audit Committee, the Nomination & Remuneration Committee, the Stakeholders Relationship Committee, the Risk Management Committee, the Compensation Committee and the Allotment Committee. A detailed note on the composition of the Board and its committees is provided in the Corporate Governance Report section of this report.
Audit Committee
The Company has duly constituted an Audit Committee, whose detailed composition and powers are provided in the Corporate Governance Report. There were no recommendations of the Audit Committee which have not been accepted by the Board during the financial year.
Number of Board & Committee Meetings
During the year under review, Nine Board meetings, Six Audit Committee meetings, Four Stakeholders Relationship Committee meetings, Three Nomination & Remuneration Committee meetings and Two Allotment Committee meetings were convened and held. Details and attendance of such Board & Committees meetings are mentioned in Corporate Governance Report.
Pursuant to clause VII (1) of Schedule IV of the Companies Act, 2013, the Independent Directors had a separate meeting on 10.11.2015.
Declaration of Independence by Directors
Declaration given by Independent Directors meeting the criteria of Independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013 is received and taken on record.
Performance Evaluation of the Board, its Committees and Individual Directors
Pursuant to applicable provisions of the Companies Act, 2013 and the Listing Regulations, the Board, in consultation with its Nomination & Remuneration Committee, has formulated a framework containing, inter-alia, the criteria for performance evaluation of the entire Board of the Company, its Committees and individual Directors, including Independent Directors.
A structured questionnaire, covering various aspects of the functioning of the board and its Committee, such as, adequacy of the constitution and composition of the Board and its Committees, matters addressed in the Board and Committee meetings, processes followed at the meeting, Board s focus, regulatory compliances and Corporate Governance, etc., is in place. Similarly, for evaluation of individual Director''s performance, the questionnaire covering various aspects like his/her profile, contribution in Board and Committee meetings, execution and performance of specific duties, obligations, regulatory compliances and governance, etc., is also in place.
Board members had submitted their response for evaluating the entire Board, respective committees of which they are members and of their peer Board members, including Chairman of the Board.
The Independent Directors had met separately on November 10, 2015 without the presence of Non-Independent Directors and the members of management and discussed, inter-alia, the performance of Non-Independent Directors and Board as a whole and the performance of the Chairman of the Company after taking into consideration the views of Executive and Non- Executive Directors.
The Nomination and Remuneration Committee has also carried out evaluation of every Director s performance.
The performance evaluation of all the Independent Directors have been done by the entire Board, excluding the Director being evaluated. On the basis of performance evaluation done by the Board, it shall be determined whether to extend or continue their term of appointment, whenever the respective term expires.
The Directors expressed their satisfaction with the evaluation process.
Directors Responsibility Statement
Pursuant to the provision under Section 134(5) of the Companies Act, 2013, with respect to the Directors'' Responsibility Statement, the directors confirm:
i. That in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;
11. That they 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 of the Company for that period;
iii. That they had 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;
iv. That they had prepared the annual accounts on a going concern basis;
v. That they had laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and were operating effectively;
vi. That they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Statutory Auditors & their Report
M/s S. N. Dhawan & Co., Chartered Accountants, Statutory Auditors of the Company, will retire at the conclusion of the ensuing Annual General Meeting and being eligible have consented and offered themselves for re-appointment as Statutory Auditors for the financial year 2016-17. The Company has received confirmation from M/s S. N. Dhawan & Co., Chartered Accountants to the effect that their reappointment, if made, would be within the prescribed limits under Section 141(3) (g) of the Companies Act, 2013 and relevant rules prescribed there under and that they are not disqualified for re-appointment.
The Auditors have vide their letter dated April 20, 2016 also confirmed that they have subjected themselves to the peer review process of Institute of Chartered Accountants of India (ICAI) and holds a valid certificate issued by the Peer Review Board of the ICAI.
There are no observations (including any qualification, reservation, adverse remark or disclaimer) of the Auditors in their Audit Report that may call for any explanation from the Directors. Further, the notes to accounts referred to in the Auditor s Report are self-explanatory.
Secretarial Auditors & their Report
The Board had appointed M/s Mohit & Associates, Practicing Company Secretaries, as Secretarial Auditor to conduct the secretarial audit of the company for the financial year 2015-16, pursuant to the provisions of Section 204 of the Companies Act, 2013. The Secretarial Audit Report submitted by them in the prescribed form MR- 3 is attached as Annexure 5 and forms part of this report.
There are no qualifications or observations or other remarks of the Secretarial Auditors in the Report issued by them for the financial year 2015-16 which call for any explanation from the Board of Directors.
Details in respect of frauds reported by auditors other than those which are reportable to the central government
The Statutory Auditors or Secretarial Auditors of the Company have not reported any frauds to the Audit Committee or to the Board of Directors under Section 143(12) of the Companies Act, 2013, including rules made there under.
Internal financial control systems and their adequacy
According to Section 134(5)(e) of the Companies Act, 2013 the term Internal Financial Control (IFC) means the policies and procedures adopted by the company for ensuring the 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.
The Company has a well placed, proper and adequate IFC system which ensures that all assets are safeguarded and protected and that the transactions are authorized, recorded and reported correctly. The Company''s IFC system also comprises due compliances with Company s policies and Standard Operating Procedures (SOP s) and audit and compliance, supplemented by internal audit checks from M/s VSD & Associates, Chartered Accountants, the Internal Auditors. The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the majority of the transactions in value terms. Independence of the audit and compliance is ensured by direct reporting of Internal Audit Division and Internal Auditors to the Audit Committee of the Board. Additionally during the year ''M/s MAZARS Advisory Private Limited'' have also been engaged for providing assistance in improvising IFC framework (including preparation of Risk & Control Matrices for various processes) and deployment of Self Assessment Tool.
The Companies Act, 2013 re-emphasizes the need for an effective Internal Financial Control system in the Company. The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the 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 disclosures. The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis, which forms part of this report.
Nature of business
There has been no change in the nature of business of the Company.
Risk Management Committee & Policy
Pursuant to the Regulation of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 the Board of the Company has formed a risk management committee to frame, implement and monitor the risk management plan for the Company. The committee is responsible for reviewing the risk management plan and ensuring its effectiveness.
The current economic environment, in combination with significant growth ambitions of the company, carries with it an evolving set of risks. The company recognizes that these risks need to be managed to protect its customers, employees, shareholders and other stakeholders, to achieve its business objectives and enable sustainable growth. Your Company has developed a risk management policy and identified risks and taken appropriate steps for their mitigation. By identifying and proactively addressing risks and opportunities, stakeholder value is protected at all times. The Company has robust systems for Risk Assessment and mitigation which is reviewed periodically. The Company''s risk identification and assessment process is dynamic and hence it has been able to identify, monitor and mitigate the most relevant strategic and operational risks, both during periods of accelerated growth and recessionary pressures.
The Company has laid down a comprehensive Risk Assessment and Minimization Procedure which is reviewed by the Board from time to time.
Subsidiary Company
The Company has 2 subsidiaries i.e. M/s JHS Svendgaard Dental Care Limited and M/s JHS Svendgaard Mechanical and Warehouse Private Limited, as on March 31, 2016. During the year under review the Company has also disposed off its foreign subsidiary M/s Jones H Smith company by sale of shares held in the Company at a consolidated price of Rs.11,00,000/- as per the agreement dated February 8, 2016.
There are no associate companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act"). There has been no material change in the nature of the business of the subsidiaries.
Pursuant to Section 129 (3) of the Companies Act, 2013 and Accounting Standard- 21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company include the financial statements of its subsidiaries.
Further, a separate statement containing salient features of the financial statements of the subsidiaries in the prescribed form Form AOC-1 has been disclosed in the consolidated financial statements.
Pursuant to the provisions of section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries, are available on the website of the Company www.svendgaard.com.
Disclosure on Audit Committee
The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report.
Extract of annual return
As provided under Section 92(3) of the Act, the extract of annual return is given in Annexure-6 in the prescribed Form MGT-9, which forms part of this report.
Particulars of loans, guarantees and investments
The particulars of loans, guarantees and investments have been disclosed in the financial statements.
Contracts/Arrangements with Related Parties
With reference to Section 134(3)(h) of the Companies Act, 2013, all contracts and arrangements with related parties under Section 188(1) of the Act, entered by the Company during the financial year, were in the ordinary course of business and on an arm''s length basis. The Company presents a Statement of all related party transactions before the Audit Committee on a quarterly basis specifying the nature, value and terms and conditions of transaction. Transactions with related parties are conducted in a transparent manner with the interest of the Company as utmost priority. Details of such transactions are given in the accompanying Financial Statements. The Company''s policy on Related Party Transactions is available at our website www.svendgaard.com. Details of Related Party Transactions are given in Annexure-7 i.e. in Form AOC-2.
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 is furnished in Annexure ''8'' and is attached to this report
Corporate Social Responsibility
The Provision of CSR as required by the Companies Act 2013 is not applicable to the company, as the company does not meet the basic criteria of the applicability of the relevant provision. However, the Company is committed to operate and grow in a socially responsible way. With Safety, health and environment protection high on its corporate agenda, JHS is committed to conduct business with a strong environment conscience, so as to ensure sustainable development, safe work places and enrichment of life of employees, clients and the community.
Material Changes and Commitments
Change in Capital Structure and Listing of Shares
During the year under review, the company has allotted 3.49.74.748 Fully Convertible Warrants to the persons belonging to the promoter and non-promoter category on a Preferential basis at an issue price of C11/- per warrant in accordance with the provisions of the SEBI (ICDR) Regulations, 2009 read with relevant provisions of Companies Act, 2013. Equity shares allotted pursuant to conversion of Fully Convertible Warrants are as follows:
1. 32,80,000 equity shares allotted on 05.01.2016
2. 1,02,59,748 equity shares allotted on 03.03.2016
As on 31.03.2016, total paid up share capital of the company is 27,37,52,520 pursuant to allotment and listing of 32,80,000 FCWs. Although, the company has converted further 1.02.59.748 FCW''s on 03rd March, 2016 which increased the paid up share capital to 37,63,50,000 but the listing approval of the same could be received in the month of April, 2016 from the stock exchanges. Hence those shares are not taken into consideration for calculating total listed paid up share capital as on 31.03.2016.
Disclosure on Deposit under chapter V
The Company has not accepted any deposits during the year under report nor did any deposits remain unpaid or unclaimed at the end of the year.
Vigil Mechanism
As per Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated and published a Whistle Blower Policy to provide Vigil Mechanism which is overseen by the Audit Committee for the genuine concerns expressed by the employees and the Directors. The provisions of this policy are in line with the provisions of the Section 177(9) of the Act. The said Policy provides adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided direct access to the chairman of the Audit Committee on reporting issues concerning the interests of employees and the Company. The policy as approved by the Board is uploaded on the Company''s website at http://svendgaard.com/download/invester/Vigil_ Mechansim/VIGIL%20MECHANISM%20P0LICY.pdf
Disclosure on Sexual Harassment of women at work place (Prevention, Prohibition & Redressal) Act, 2013
The Company has zero tolerance for sexual harassment at workplace. A policy has been adopted in line with the Sexual harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under. During the year, no complaints pertaining to sexual harassment were received.
Significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concerns status and company''s operations in future
The Company has not received any significant or material orders passed by any regulatory Authority, Court or Tribunal which shall impact the going concern status and Company s operations in future.
Industrial Relations
The Company maintained healthy, cordial and harmonious industrial relations at all levels. The enthusiasm and unstinting efforts of employees have enabled the Company to remain at the leadership position in the industry. It has taken various steps to improve productivity across organization.
Acknowledgements
Your Directors would like to express their sincere appreciation for the assistance and co-operation received from the Government authorities, customers, vendors, financial institutions, banks and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the Company''s executives, staff and workers without which the Company would not have been able to undertake the challenging targets in all areas of operations. Your Directors acknowledge the exemplary contribution made by the employees of the Company.
The Directors value the trust shown by the shareholders in their ability to manage the Company. We expect that with the ongoing encouragement and support of our shareholders, we shall be successful in achieving the desired objectives in the near future
For and on behalf of the Board
Nikhil Nanda
Date : 26.05.2016 Managing Director
Place : New Delhi DIN: 00051501
Mar 31, 2015
Dear Members,
The Directors have pleasure in presenting the 11th Annual Report on
the business and operation of the Company together with the audited
accounts for the financial year ended 31st March, 2015.
Financial Review
Particulars Standalone
31.03.2015 31.03.2014
Net sales / Income from Operation 5532.39 3527.96
Other Income 85.89 380.84
Interest & Finance Charges 14.08 1406.99
Depreciation 1234.63 1469.91
Profit /(Loss ) before Tax -2209.49 -3528.35
Provision for Tax 4.42 -648.77
Profit /(Loss ) after Tax -2213.92 -2879.58
Profit /(Loss ) to be carried to the
Balance Sheet -2213.92 -2879.58
Paid up Equity Share Capital ( Face Value
of rs. 10/- each ) 2409.53 2409.53
Reserve excluding revaluation reserve 7774.02 2076.12
Basic EPS ( in Rupees not annualized )
Excluding extra ordinary items -9.19 -11.95
Diluted EPS ( in Rupees not annualized)
Excluding extra ordinary items -9.19 -11.95
Particulars Consolidated
31.03.2015 31.03.2014
Net sales / Income from Operation 5532.39 3527.96
Other Income 87.14 380.84
Interest & Finance Charges 14.08 1407.03
Depreciation 1235.56 1470.57
Profit /(Loss ) before Tax -2213.26 -3529.74
Provision for Tax 4.42 -648.77
Profit /(Loss ) after Tax -2217.68 -2880.97
Profit /(Loss ) to be carried to the
Balance Sheet -2217.68 -2880.97
Paid up Equity Share Capital ( Face Value
of rs. 10/- each ) 2409.53 2409.53
Reserve excluding revaluation reserve 9550.38 3781.86
Basic EPS ( in Rupees not annualized )
Excluding extra ordinary items -9.19 -11.95
Diluted EPS ( in Rupees not annualized)
Excluding extra ordinary items -9.19 -11.95
Review of Operations
The Turnover from the operation of the company during the financial
year ended 31st March 2015 amounted to Rs. 553 Million as compared to
Rs. 353 Million during the previous year ended 31.03.2014. The Turnover
of the company has increased by 56.82% from the previous year mainly on
accounts of the Tooth paste Business of the contract manufacturing as
well as company's own brand.
Company has entered One Time Settlement with its lender banks for the
outstanding dues & now the company has become debt free & all the
charges created on the company's assets by banks has now been released
and also the proceedings on the company in Debt Recovery tribunal has
been withdrawn.
Dividend
The Directors hereby inform that in the financial year 2014-15, the
Board of Directors has not recommended any dividend due to the acute
financial distress faced by the Company.
Subsidiary Company
The Company has 3 subsidiaries as on March 31,2015. There are no
associate companies within the meaning of Section 2(6) of the Companies
Act, 2013 ("Act"). There has been no material change in the nature of
the business of the subsidiaries.
Pursuant to provisions of Section 129(3) of the Act, a statement
containing salient features of the financial statements of the Company's
subsidiaries in Form AOC-1 is attached to the financial statements of
the Company.
Pursuant to the provisions of section 136 of the Act, the financial
statements of the Company, consolidated financial statements along with
relevant documents and separate audited accounts in respect of
subsidiaries, are available on the website of the Company.
Directors and Key Managerial Personnel
Mr. D S Grewal, Chairman, stepped down from the Board of the Company on
14th February, 2015. He was associated with the Company since its
incorporation. Under his leadership as Chairman the Company was
transformed into one of the India's largest oral care products
manufacturer. The Board places on record its appreciation of the
invaluable contribution and guidance provided by him.
Pursuant to the provisions of Section 149 of the Act which, came into
effect from April 1, 2014
Mr. C R Sharma and Mr. Amarjit Singh were appointed as independent
directors at the annual general meeting of the Company held on December
29, 2014. Mr. P K Misra was appointed as an Independent Director with
effect from March, 25, 2015 in the general meeting held through postal
ballot. The terms and conditions of appointment of independent directors
are as per Schedule IV of the Act. They have submitted a declaration
that each of them meets the criteria of independence as provided in
Section 149(6) of the Act and there has been no change in the
circumstances which may affect their status as independent director
during the year.
Mr. Vanamali Polavaram was appointed as the Non Executive Director at
the annual general meeting of the Company held on December 29, 2014. He
was further appointed as the chairman of the Company in the Board
meeting held on February 14, 2015.
Mrs. Kalyani Polavaram was appointed as the women Director of the
Company at the annual general meeting of the Company held on December
29, 2014
As part of leadership development, Mr. Vishal Sarad Shah was appointed
as Additional Director with effect from February 14, 2015. His
appointment is to be confirmed by the members in the ensuing Annual
General Meeting
The term of Mr. Nikhil Nanda as the Managing Director of the Company
expired on 17th April, 2015. The Board of Directors of the Company has
appointed him as the managing Director of the Company in the board
meeting held on July 02, 2015. However his appointment is subject to
the approval of the members of the Company in the extra ordinary
general meeting scheduled to be held on August 4, 2015.
Mr. Mukul Pathak was appointed as an Additional Director, w.e.f
14.02.2015. His appointment as independent director is proposed to be
confirmed by the members in the ensuing Annual General Meeting.
Mr. Vanamali Polavaram, Non- Executive Director retires by rotation and
being eligible has offered himself for re- appointment.
During the year, the non-executive directors of the Company had no
pecuniary relationship or transactions with the Company.
Ms. Isha Sablok resigned from the post of Company Secretary &
Compliance Officer of the Company with effect from April 13, 2015 and
Mr. Dhiraj Kumar Jha was appointed as the Company Secretary &
Compliance Officer with effect from the same date.
Number of Meetings of the Board
There were Five Board Meetings held during the Financial Year 2014-15.
Detail of the same forms part of the Corporate Governance Report.
Declaration of Independence by Directors
Declaration given by Independent Directors meeting the criteria of
Independence as provided in sub-section (6) of Section 149 of the
Companies Act, 2013 is received and taken on record.
Directors Responsibility Statement
Pursuant to Section 134(5) of the Companies Act, 2013, the board of
directors, to the best of their knowledge and ability, confirm that:
i. in the preparation of the annual accounts, the applicable
accounting standards have been followed and there are no material
departures;
ii. they 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 at the end of the financial year and of the profit of the
Company for that period;
iii. they 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;
iv. they have prepared the annual accounts on a going concern basis;
v. they have laid down internal financial controls to be followed by
the Company and such internal financial controls are adequate and
operating effectively;
vi. they have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate
and operating effectively.
Based on the framework of internal financial controls and compliance
systems established and maintained by the Company, work performed by
the internal, statutory and secretarial auditors and external
consultants and the reviews performed by management and the relevant
board committees, including the audit committee, the board is of the
opinion that the Company's internal financial controls were adequate
and effective during the financial year 2014-15.
Performance Evaluation of the Board, its Committees and Individual
Directors
The board of directors has carried out an annual evaluation of its own
performance, Board committees and individual directors pursuant to the
provisions of the Act and the corporate governance requirements as
prescribed by Securities and Exchange Board of India ("SEBI") under
Clause 49 of the Listing Agreements ("Clause 49").
The performance of the Board was evaluated by the Board after seeking
inputs from all the directors on the basis of the criteria such as the
Board composition and structure, effectiveness of board processes,
information and functioning, etc.
The performance of the committees was evaluated by the board after
seeking inputs from the committee members on the basis of the criteria
such as the composition of committees, effectiveness of committee
meetings, etc.
The Board and the Nomination and Remuneration Committee ("NRC")
reviewed the performance of the individual directors on the basis of
the criteria such as the contribution of the individual director to the
Board and committee meetings like preparedness on the issues to be
discussed, meaningful and constructive contribution and inputs in
meetings, etc. In addition, the Chairman was also evaluated on the key
aspects of his role.
In a separate meeting of independent Directors, performance of
non-independent directors, performance of the board as a whole and
performance of the Chairman was evaluated, taking into account the views
of executive directors and non-executive directors. The same was
discussed in the board meeting that followed the meeting of the
independent Directors, at which the performance of the Board, its
committees and individual directors was also discussed.
Policy on Directors' Appointment and Remuneration
Considering the requirement of skill set on the Board, eminent people
having an independent standing in their respective field/ profession
and who can effectively contribute to Company's business and Policy
decisions are considered by Nomination and Remuneration Committee for
appointment as an Independent Director on the Board. The Committee
considers ethical standards of integrity, qualification, expertise and
experience of the person for appointment as Director and is not
disqualified under Companies Act, 2013 and rules made thereunder and
accordingly recommend to the Board his/her appointment.
Remuneration to Whole-Time Director is governed under the relevant
provisions of Companies Act, 2013 and rules made thereunder.
Independent/ Non-Executive Directors are paid sitting fees for
attending the meetings of the Board/Committees thereof. The Company's
policy on Directors remuneration is given in Corporate Governance
Report which forms part of this Annual Report. The Board considers the
Nomination and Remuneration Committee's recommendation and takes
appropriate decision.
Internal financial control systems and their adequacy
The details in respect of internal financial control and their adequacy
are included in the Management Discussion & Analysis, which forms part
of this report.
Disclosure on Audit Committee
The details pertaining to composition of audit committee are included
in the Corporate Governance Report, which forms part of this report.
Auditors' report and secretarial auditors' report
The Auditors, M/s S. N Dhawan & Co., Chartered Accountants, (FRN:
000050N) have been appointed as Statutory Auditors of the Company by
the Board of directors on 05th May, 2015 subsequent to the casual
vacancy occurred in the office pursuant to resignation of M/s
Haribhakti & Co. LLP, and subject to the approval of members of the
Company in the general meeting fixed to be held on 4th August, 2015.
Their appointment if approved by the members of the Company will be
valid till the conclusion of the ensuing Annual General Meeting.
The Company has received confirmation from M/s S. N. Dhawan & Co.,
Chartered Accountants to the effect that their re-appointment, if made,
would be within the prescribed limits under Section 141(3) (g) of the
Companies Act, 2013 and that they are not disqualified for
re-appointment.
Auditors' Report and Secretarial Auditors' Report
The Auditors, M/s S. N Dhawan & Co., Chartered Accountants, have been
appointed as Statutory Auditors of the Company by the Board of directors
on 05th May, 2015 subsequent to the casual vacancy occurred in the
office pursuant to resignation of M/s Haribhakti & Co. LLP, and subject
to the approval of members of the Company in the general meeting fixed
to be held on 4th August, 2015. Their appointment if approved by the
members of the Company will be valid till the conclusion of the ensuing
Annual General Meeting.
The Company has received confirmation from M/s S. N Dhawan & Co.,
Chartered Accountants to the effect that their re-appointment, if made,
would be within the prescribed limits under Section 141(3)(g) of the
Companies Act, 2013 and that they are not disqualified for
re-appointment.
Auditor's Qualification and Managements Representation
i) The Holding Company has entered into "One Time Settlement" (OTS) of
dues with its lender banks. As a result, the lenders have agreed to
waive the principal amount on term loan facilities amounting to Rs.
30,82,89,217 and such amount is credited to Capital Reserve which is
not in accordance with the Accounting Standard (AS) 5 on "Net Profit or
Loss for the Period, Prior Period Items and Changes in Accounting
Policies". Further, the said treatment is not in line with the opinion
of the Expert Advisory Committee of the Institute of Chartered
Accountants of India on accounting treatment of waiver of loan.
Had the said waiver of principal amount of loan been credited to the
Statement of Profit and Loss instead of the credit in Capital Reserve
Account, the loss for the year amounting to Rs. 22,17,68,216 would
result in profit of Rs. 8,65,21,001 and balance in the Statement of
Profit & Loss under the head 'Reserves & Surplus' would have been
surplus of Rs. 5,71,90,166 instead of deficit of Rs. 25,10,99,051 as
stated.
The amount attributed towards the waiver of term loan which was earlier
used by the company for procuring various capital assets, hence was in
the nature of capital receipt, which has also been affirmed in various
judicial pronouncements, thus relying on the same and with a view to
present the true & fair view of the financial statement such waiver
amount has been directly credited to the capital reserve a/c.
ii. In earlier years the Holding Company had acquired substantial
tangible fixed assets to carry out contract manufacturing for a major
customer. Such major customer has not renewed/terminated the contract
resulting in some idle fixed assets. This and other internal factors
indicate that the part of tangible fixed assets comprising plant &
machinery which have carried in the books at a written down value of Rs
31,86,11,888 (Previous year Rs. 35,43,87,177) may be impaired.
However, the management has not carried out any testing for impairment
as required by Accounting Standard (AS) 28 "Impairment of Assets".
Therefore, we are unable to comment on the necessity or otherwise to
provide for impairment loss in respect of these tangible assets as
required by AS 28. The effect of the non provision of impairment loss,
if any, cannot be quantified.
One of the major customers of the Company has wrongfully decided not to
renew / terminate the contracts across all the business segments due to
which certain assets got idle. However, in order to safeguard the
interest of the shareholders, the Company has been pursuing litigation
and has sought specific performance of the contract as well against
these arbitrary and unjust acts of the multinational company. Hence, as
the matter is sub-judice the management cannot even consider the
impairment as that would impact upon the litigation. However, the
Company is rapidly growing its tooth brush and tooth paste business and
has also entered into a contract with a big customer in the FMCG market
and is also adding product categories to its own brand.
Report of the secretarial auditor is given as an annexure which forms
part of this report.
Particulars of loans, guarantees and investments
The particulars of loans, guarantees and investments have been
disclosed in the financial statements.
Contracts/Arrangements with Related Parties
All the related party transactions are done on Arm's length basis. The
Company presents a Statement of all related party transactions before
the Audit Committee on a quarterly basis specifying the nature, value
and terms and conditions of transaction. Transactions with related
parties are conducted in a transparent manner with the interest of the
Company as utmost priority. Details of such transactions are given in
the accompanying Financial Statements. The Company's policy on Related
Party Transactions is available at our website www. svendgaard.com.
Risk Management
The Board of the Company has formed a risk management committee to
frame, implement and monitor the risk management plan for the Company.
The committee is responsible for reviewing the risk management plan and
ensuring its effectiveness. The audit committee has additional oversight
in the area of financial risks and controls. Major risks identified by
the businesses and functions are systematically addressed through
mitigating actions on a continuing basis.
The Company has robust systems for Risk Assessment and mitigation which
is reviewed periodically. The Company's risk identification and
assessment process is dynamic and hence it has been able to identify,
monitor and mitigate the most relevant strategic and operational risks,
both during periods of accelerated growth and recessionary pressures.
Extract of Annual Return
As provided under Section 92(3) of the Act, the extract of annual
return is given in Annexure III in the prescribed Form MGT-9, which
forms part of this report.
Corporate Social Responsibility
The Provision of CSR as required by the Companies Act 2013 is not
applicable to the company, as the company does not meet the basic
criteria of the applicability of the relevant provision. However, the
Company is committed to operate and grow in a socially responsible way.
With Safety, health and environment protection high on its corporate
agenda, JHS is committed to conduct business with a strong environment
conscience, so as to ensure sustainable development, safe work places
and enrichment of life of employees, clients and the community.
Particulars of employees
The information required under Section 197 of the Act read with rule
5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 are given below:
Relevant Prescribed
Clause u/r Requirement
5(1)
(i) Ratio of the remuneration of each director
to the Median Remuneration to the employees
of the company for the financial year
(ii) The percentage increase in remuneration of each
director, CFO, CEO, Company Secretary or
Manager, if any, in the financial year.
(iii) Percentage increase in median remuneration of
employees in the financial year
(iv) Number of permanent employee on the rolls
of the company.
(v) Explanation on the relationship between average
increase in remuneration and
company performance.
(vi) Comparison of the remuneration of the Key Managerial
Personnel against the performance of the company.
(Vii) Variations in the market capitalisation of the company,
price earnings ratio as at the closing date of the current
financial year and previous financial year and
percentage increase over decrease in the market
quotations of the shares of the company in comparison
to the rate at which the company came out with the
last public offer in case of listed companies, and in
case of unlisted companies, the variations in the net
worth of the company as at the close of the current
financial year and previous financial year;
(Viii) Average percentile increase already made in the
salaries of employees other than the managerial
personnel in the last financial year and its comparison
with the percentile increase in the managerial
remuneration and justification thereof and point out if
there are any exceptional circumstances for increase
in the managerial remuneration;
(ix) Comparison of the each remuneration of the
Key Managerial Personnel against the performance
of the company
(x) The key parameters for any variable component of
remuneration availed by the directors
(xi) The ratio of the remuneration of the highest paid
director to that of the employees who are not directors
but receive remuneration in excess of the highest paid
director during the year;
(xii) Affirmation that the remuneration is as per
the remuneration policy of the company.
Relevant Particulars
Clause u/r
5(1)
(i) Ratio of the remuneration of Mr. Nikhil Nanda,
Managing Director to the median remuneration of
employees - 7:1. (Refer note 1)
(ii) There is no increase in remuneration of any director,
CFO,CEO, Company Secretary in the financial year.
(iii) -0.87%
(iv) 195 Employees
(v) Average increase in remuneration - 0.87%
Average increase in Profit before Tax - N.A*
* Company has incurred losses in current and
preceding financial year.
(vi) KMP Remune- Company
ration Performance
(PBT) Rs. Lacs
Mr. Nikhil Nanda 10 -2209.49
Managing Director
(Refer note 1)
Neeraj Kumar 6.5 -2209.49
Chief Financial Officer
Isha Sablok 3.22 -2209.49
Company Secretary
Paramvir Singh 14.88 -2209.49
Chief Executive Officer
(Vii) Variations in market capitalisation.
-Market Capitalisation as at 31.03.2014: 1457.76 lacs.
-Market Capitalisation as at 31.03.2015: 1963.76 lacs.
Variations in the PE Ratio
PE Ratio as at 31.03.2014: Not Applicable
PE Ratio as at 31.03.2015: Not Applicable
6.116 times decrease in the market quotation in
comparison to the rate at which the company came out
with IPO.
(Viii) There is no increase in the remuneration of the
Managerial personnel as compared to the salary
increase of the employees salary in the last year in
view of financial position of the company,
(ix) Covered in sub clause VI above.
(x) Financial and Operating performance of the company
(xi) None of the employee is receiving remuneration more
than the director remuneration.
(xii) Remuneration is as per the Nomination and
Remuneration Policy for the Directors, KMP and other
employees of the company , formulated pursuant to
provisions of section 178 of the Companies Act, 2013
Note:1 The remuneration of Managing Director has been provided till
31st August 2014 and for the remaining period Managing Director has
given his consent to waive off the same keeping in view the financial
position of the company
Internal Auditor
In compliance with the provisions of Section 138 of the Companies Act,
2013 M/s VSD & Associates were appointed as Internal Auditors for the
Financial Year 2014-15 to conduct the internal audit of the functions
and activities of the Company. They have submitted their Report to the
Chairman of the Audit Committee and this was further reviewed by the
Management and taken on record.
Disclosure Requirements
As per Clause 49 of the listing agreements entered into with the stock
exchanges, corporate governance report with practicing Company
Secretary certificate thereon and management discussion and analysis
are attached, which form part of this report.
As per Clause 55 of the listing agreements entered into with the stock
exchanges, a business responsibility report is attached and forms part
of this annual report.
Details of the familiarization programme of the independent directors
are available on the website of the Company (www. svendgaard.com).
Policy for determining material subsidiaries of the Company is
available on the website of the Company (www.svendgaard. com).
Policy on dealing with related party transactions is available on the
website of the Company
(www.svendgaard.com).
The Company has formulated and published a Whistle Blower Policy to
provide Vigil Mechanism for employees including directors of the
Company to report genuine concerns. The provisions of this policy are
in line with the provisions of the Section 177(9) of the Act and the
revised Clause 49 of the Listing Agreements with stock exchanges
(www.svendgaard. com).
Particulars of loans, guarantees and investments
The particulars of loans, guarantees and investments have been
disclosed in the financial statements.
Deposits from Public
The Company has not accepted any deposits during the year under report
nor did any deposits remain unpaid or unclaimed at the end of the year.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
Please refer Annexure B
Foreign exchange earnings and outgo
Particulars 2014-15 2013-14
Foreign Exchange Outgo
Travelling 175,827.00 152,028.00
Raw Materials 13,690,273.00 601,962.00
Capital Goods - 359,450.00
Foreign Exchange Earning
Earning in Foreign Exchange - -
Material Changes and Commitments
During the year ended 31.03.2015 Company has entered in to One Time
Settlement (OTS) of dues with its lender banks to clear all the
outstanding loans and interest thereon. As per the terms of the OTS the
company was required to pay 23.50 Crores as the OTS amount before
30.06.2015.
As on the date of the signing of the result the company has made the
entire payments as per the terms of the OTS agreed with the banks &
consequently the banks has also issued no dues certificates to the
company, consequently the bank has released the charges on the assets
of the company and withdrawn the proceedings from the debt recovery
tribunal.
Acknowledgements
Your Directors place on record their gratitude and express their
earnest appreciation for the valuable efforts of every employee of the
organization without which the Company would not have been able to
undertake the challenging targets in all areas of operations. We are
fortunate to have such a team whose endeavors have laid a strong
foundation for the success of the organization as a whole. Your
Directors acknowledge the exemplary contribution made by the employees
of the Company.
The Directors value the trust shown by the shareholders in their
ability to manage the Company. We expect that with the ongoing
encouragement and support of our shareholders, we shall be successful
in achieving the desired objectives in the near future.
By and on behalf of the Board
Nikhil Nanda
Managing Director DIN: 00051501
Mar 31, 2014
The Members
JHS Svendgaard Laboratories Limited
The Directors are pleased to present Tenth Annual Report and the
Statements of Accounts for the financial year ended on 31st March,
2014.
FINANCIAL PERFORMANCE SUMMARY:
The Financial highlights of the Company are given below: -
(Amount in Rs.Lac)
Standalone Consolidated
Particulars 31.03.2014 | 31.03.2013 31.03.2014 31.03.2013
Net Sales/Income 3,527.96 5,605.72 3,527.96 5,959.09
from operations
Other Income 380.84 902.62 380.84 404.93
Interest & Finance 1,406.99 1,034.08 1,407.03 1,034.34
Charges
Depreciation 1,469.91 1,361.88 1,470.57 1,362.54
Profit/(Loss) before Tax (3,528.35) 13.84 (3,529.74) 30.96
Provision for Tax (648.77) 407.09 (648.77) 407.09
Profit/(loss) after Tax (2,879.58) (420.93) (2,880.97) 376.13
Profit/(loss) to be (2,879.58) (420.93) (2,880.97) (376.13)
carried to the Balance Sheet
Paid up Equity Share 2,409.53 2,409.53 2,409.53 2,409.53
Capital (Face Value of
Rs.10/- each)
Reserves excluding 2,076.12 4,955.70 3,781.86 6,512.45
revaluation reserves
Basic EPS (in Rupees (11.95) (5.23) (11.95) (5.06)
not annualized) Excluding extra ordinary items
Diluted EPS (in (11.95) (5.23) (11.95) (5.04)
Rupees not annualized) Excluding extra ordinary items.
DIVIDEND
Considering the Company''s financial performance, the Directors have
not recommended any dividend for the financial year ended on 31st March,
2014.
INCREASE IN SHARE CAPITAL:
There has been no increase in the Share Capital of the Company. As on
31st March, 2014, the Issued and Paid-Up Share Capital of the Company
was Rs.2409.52 Lakhs comprising 2,40,95,252 Equity Shares of Rs.10/-
each fully paid-up.
PERFORMANCE REVIEW:
The turnover from the operations of the Company during the financial
year ended 31st March, 2014 amounted to Rs.353 Million as compared to
Rs.561 Million during the previous year ended 31 st March, 2013. The
turnover of the Company has decreased by 37.08% from the previous
year mainly on account wrongfully termination of contract by one of our
key customer of the Company and due to loss of job work income.
However the turnover from toothbrush business during the financial year
ended 31st of March, 2014 has increase by 37.4% from 230 million in
2013 to 316 million in 2014
EMPLOYEE STOCK OPTION PLAN 2008:
To motivate and retain the efficient employees, the Company has
introduced employee stock option plan 2008. As on date no option is
vested on any employee, therefore no option is in existence till date.
The details regarding options granted; the pricing formula; options
vested; options exercised; the total number of shares arising as a result
of exercise of option and other details as required under SEBI
(Employee Stock Option Scheme and Employee Stock Purchase
Scheme) Guidelines 1999 are not reproduced since no ESOP has been
exercised by the Employees and the relevant details are hence not
available. Requisite information is given in the statements placed at
Annexure "A".
RECOGNITION/AWARD:
Your Company won certificate of excellence in recognition from the
council of the Plastics Export Promotion, Ministry of Commerce and
Industry, Government of India, the second best Exporter of toothbrush
and toothpaste, incl. dental plate brushes and has been awarded as the
Highest Recognition for Export for the year 2011-2012 on December
20th, 2013.
DIRECTORS:
Appointments/ Re-appointment:
Mr. Daljit Singh Grewal (DIN 00051627), Director of the Company, liable
to retire by rotation at the forthcoming Annual General Meeting on 29th
December, 2014 and being eligible, offer himself for re-appointment.
Mr. Chhotu Ram Sharma (DIN: 00522678), Mr. Vanamali Polavaram
(DIN: 01292305) and Mr. Amarjit Singh (DIN: 01244897), Non-Executive
Independent Director of the Company, be and is hereby reappointed as
a Non-Executive Independent Director of the Company, not subject to
retirement by rotation, to hold office for a term of 5 (five) consecutive
years with effect from the date of this Annual General Meeting upto the
conclusion of Annual General Meeting of the Company to be held in the
calendar year 2019."
Necessary resolutions for re-appointment of Mr. Daljit Singh Grewal and
appointment of Mr. Chhotu Ram Sharma, Mr. Vanamali Polavaram and
Mr. Amarjit Singh on 29th December, 2014 are being included in the notice
convening Annual General Meeting.
Brief resume, expertise and other details of Directors proposed to be
appointed/re-appointed, as required by clause 49 of the Listing
Agreement, are furnished in the explanatory statement to the notice
convening Annual General Meeting.tory statement to the notice
convening Annual General Meeting.
AUDITORS:
M/s Haribhakti & Co., LLP (ICAI Firm Registration Number: 103523W),
Statutory Auditors of the Company, holds office until the conclusion
of the ensuing Annual General Meeting and are eligible for
reappointment.
The Company has received letter from the Statutory Auditor that their
reappointment, if made, would be within the prescribed limits under
Section 139 of the Companies Act, 2013 and that they are not disqualified
for reappointment within the meaning of Section 141 of the said Act.
Qualifications and response to Auditor''s Report:
Going Concern
The accompanying consolidated financial statements for the year ended
March 31st, 2014 have been prepared assuming that the company will
continue as Going Concern. However the company has been incurring
operating and cash losses, has defaulted in repayment of loans & interest
due to banks, there have delay in payment of Statutory dues salaries to
employees & payment to vendor & has negative working capital. Further
there has been termination of Contract by a major customer of the
company resulting in idle fixed assets. Such factors create substantial
doubts about the ability of the company to continue as a going concern.
The consolidated financial statements do not include any adjustments
that might result from the outcome of such uncertainty.
- During the period under review there has been a cash loss situation
in the company, as one of the major customer of the company
have wrongfully decided to not renew / terminate the contracts
across all the business segments which has resulted in huge
business loss. However, in order to safeguard the value of our
shareholders the company is pursuing litigation against these
arbitrary and unjust acts of the multinational company which
involves huge litigation costs as well, although on a temporary basis
only. Nevertheless to bring back the value to its shareholders the
company is growing its tooth brush and tooth paste business by
focusing on the other giants in the FMCG market and have recently
launched its own brand as well to cover its operating losses.
As far as the dues towards the bank payments is considered the
same is being defaulted primarily because of the above stated
problem although the company has apprised the situation to its
bankers and is in talks for the settlement of the outstanding loans
which is a prerequisite to make the entire business plan
independently viable.
Further regarding the delays in the clearance of statutory dues,
the same has occurred due to the cash flow situation which has
been caused because of the above stated issues. However as on
date all the accrued statutory dues are clear.
Hence the management is striving to put the house in order, with
its efforts it should be able to revive the company and may come
out of this crisis situation. Thereon the management is of the view
that there should not be any uncertainty regarding the Going
Concern Issue.
Confirmations
The confirmations from the some of the legal counsel engaged by the
company in connection with matter related to indirect Tax & other Matters
including cases filed against the company were not available for our
verification. Accordingly we are unable to comment on outcome of such
matter & consequential impact if any on the reported amount of contingent
liabilities & necessity of any provision required to be recorded.
Trade payable balance amounting to ''2,39,78,283/- due to Nine Parties
are subject to confirmation & reconciliation if any and accordingly we
were unable to confirm or verify by alternative means such trade payables
included in the balance sheet as at 31st March, 2014.
- The company has sent the requisite confirmation letters to all its
legal counsels who were handling the matters for Indirect tax &
any other legal matter; to which some of the counsels have
responded with delay. However, the company confirms that the
matters connected with such counsels does not require any
provisions and neither there are any contingent liabilities to arise
out of such matters over and above what is already reported.
Further regarding the confirmation from nine parties regarding the
trade payables balance of Rs.2,39,78,283 from whom the
confirmations were not received are regular business vendors with
which company deals on a regular basis. Hence difference if any
shall be of miniscule amount which should be cleared on
reconciliation. Although to update some of the vendors have
provided the balance confirmation after the cut off date.
Impairment of assets-AS 28
During the earlier years the company has acquired substantial Tangible
fixed assets to carry out contract manufacturing for a major customer.
Such major customer has terminated the contract resulting in some idle
fixed assets. This and other internal factors indicate that the part of
tangible fixed assets comprising plant & Machinery which have carried
in the books at a written down value of Rs.35,43,87,177/- (PY
Rs.38,81,69,870/-) may be impaired however the management has not
carried out any testing for impairment as required by AS-28, accordingly
we are unable to comment on the necessity or otherwise to provide for
an Impairment loss in respect of these tangible assets as required by
AS 28. The effect of the non provision of the impairment loss on assets,
if any, cannot be quantified.
- During the period under review one of the major customer of the
company have wrongfully decided to not renew / terminate the
contracts across all the business segments due to which certain
assets got idle. However, in order to safeguard the value of our
shareholders the company is pursuing litigation and has sought
specific performance of the contract as well against these arbitrary
and unjust acts of the multinational company. Hence, as the matter
is sub-judice the management cannot even consider the
impairment. Although the company is also growing its tooth brush
and tooth paste business by focusing on the other giants in the
FMCG market and have recently launched its own brand as well in
order to utilize the assets.
Caro Qualifications
i) (a) The company has maintained proper records showing full
particulars, including quantitative details except for situation
of fixed assets.
In this reference the board hereby submits that company has taken
note of the same & the company has updated the Fixed assets
register with reference to situation of fixed assets.
(b) In our opinion and according to the information and explana
-tion given to us, the rate of interest and other terms and
conditions for loans granted to Number One Real Estate Private
Limited and JHS Svendgaard Dental care Limited (fully Provide for
in books of Company) are prejudicial to the interest of the
company. The rate of interest and other terms and conditions of
loans granted to JHS Svendgaard Mechanical And Warehouse Private
Limited and are prima facie not prejudicial to the interest of the
company.
(c) In our opinion and according to the information and
explanation given to us, in respect of the interest free loan
granted to JHS Svendgaard Dental Care Limited and Number
One Real Estate Private limited, the terms of repayment of
principal are not stipulated. Accordingly, we are unable to
comment on regularity of the same. The interest free loan
granted to JHS Svendgaard Mechanical and Ware house
Private Limited is not yet due for receipt as per the terms of
agreement.
(d) In the absence of repayment schedule for JHS svendgaard
Dental Care Limited and Number One Real Estate Private
limited, we are unable to comment on whether the amount in
overdue as at the balance sheet date. In case of loan granted
to JHS SVENDGAARD Mechanical and Warehouse Private
Limited no Amount is overdue on the Balance Sheet date.
For Point no. 1, 2 3, regarding the Loan granted to Number One
Real Estate above the Board hereby submit that during the FY 2013-14
No Loan was given to Number One Real Estate Private limited , the
balance of outstanding loan were transferred at the time merger of
JHS Svendgaard Hygiene Products Limited & wave Hygiene products.
For the Loan given to JHS Svendgaard Dental Care
Limited the board hereby submit that the JHS Dental care
Private limited is the subsidiary of our company , which
is currently having no income , just to meet the Minimum
Operational expenses the Funds were given . The Whole
loan amount given to JHS Svendgaard Dental care Pvt.
Ltd. is already provided in books.
(e) In our opinion, Loan taken from Nikhil Nanda is interest free
and as explained, repayment of loan has not been demanded.
In the absence of any agreement with the two parties, we
are unable to comment on the regularity of repayment of
principal amount and interest thereon.
ii) In our opinion and according to the information and explanations
given to us, there exists an adequate internal control system
commensurate with the size of the company and the nature of its
business with regard to purchase fixed assets and with regard to
the sale of goods and services.
In our opinion and according to the information and explanations
given to us, the internal control system with regard to purchase of
inventory needs to be strengthened to be commensurate with the
size of the company and the nature of its business.
The Board Member has taken the note of the same and
members had already initiated the steps to strengthen the
system of internal control and establish a defined process to
overcome the weakness in respect to purchase of Inventory.
(iii) The system of internal audit of the company needs to be
strengthened commensurate to the size and nature of its business.
In this reference the board hereby submits that the company
has taken the note of the same to improve the Internal Audit
system which is adequate to the size & nature of its Business.
(iv) (a) Undisputed statutory dues including provident fund,
employees'' state insurance and tax deducted at source have
not been regularly deposited with the appropriate authorities
and there have been serious delays in large number of cases.
The company is regular in depositing with appropriate
authorities undisputed statutory dues including income tax,
wealth tax, sales tax and excise duty.
In this reference the Board hereby submit that such non-
deposit of due was unintentional and reason for such
late deposit was that in one of the unit -Wave Hygiene
Products the PF & ESI account number were allotted in
May , 2014 , hence the same were deposited immediately
after the allotment of PF& ESI account Number. With
Regard to the delay in deposit of Statutory Dues of Other
Units the Board hereby submits that your company is
likely to avoid this for the time to come.
The Board hereby submits that due to the Wrong termination
of the Contract by one of the Key customer of the company
the major portion of the revenue of the company decreased
due to which the company has come under deep cash crisis
situation, which resulted in Nonpayment of dues of the Banks.
However, In order to safeguard the value of our shareholders
the company is pursuing litigation against this arbitrary &
unjust act of the multinational company.
(vi) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we
report that the company has applied funds raised on short terms
basis for long term investment amounting to ''507,652,838.
The board hereby submits that all the funds has been used
only for the Business of the company, however Board hereby
submits that your company is likely to avoid this for the time
to come.
LISTING:
Since 21st October, 2006 your Company''s Equity Shares got listed with
Bombay Stock Exchange Limited and National Stock Exchange of India
Limited. The Company has paid the applicable listing fee to both the
stock exchanges.
SUBSIDIARY COMPANIES:
Jones H Smith, FZE, was incorporated as Wholly Owned Subsidiary of
your Company in 2007 in Ras Al Khaimah Free Trade Zone, UAE. The
Company is established for the trading in all personal and oral care
products in the international market specially Middle-East Countries.
M/s JHS Svendgaard Dental Care Limited was incorporated as a
Subsidiary Company in the month of April 2008. Presently your Company
holds 95.12% of total paid up share capital of the Subsidiary Company.
M/s JHS Svendgaard Mechanical and Warehouse Private Limited
has become subsidiary of your company w.e.f 21st June, 2012. Presently
your Company holds 99.99% of total paid up share capital of the
Subsidiary Company.
The statement in respect of each of subsidiary, giving the details of
reserve, total assets and liabilities, details of investment, turnover
, profit after taxation pursuant to section 212 of the Companies Act,
1956, regarding subsidiary Companies forms part of this Annual Report.
PARTICULARS OF EMPLOYEES:
No information regarding particulars of employees required to be
reported under Section 217(2A) of the Companies Act, 1956 is available
since none of the employees of the Company is drawing remuneration in
excess of the limits as prescribed therein.
ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE
Requisite information is given in the statements placed at Annexure "B"
& "C", respectively.
CORPORATE GOVERNANCE:
A separate Section on Corporate Governance forming part of the
Directors'' Report and the Certificate confirming the compliance of the
conditions stipulated in Clause 49 of Listing Agreement is included in
the Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A report on Management Discussion and Analysis as required under clause
49 of the Listing Agreement forms part of the Annual Report.
DEPOSITS
The Company has not accepted any Deposits in pursuance of Section 58A
of the Companies Act, 1956 and other applicable rules made there under.
DIRECTOR''S RESPONSIBILITY STATEMENT:
The Directors confirm that:
in the preparation of the annual accounts, the applicable
accounting
standards have been followed and that no material departures have been
made from the same;
they 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 at the end of the financial year and of the profits of the
Company for that period;
they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
INDUSTRIAL RELATIONS:
Your Company has taken significant steps in developing human resource
and strengthening human resource systems. During the year under review,
industrial relation in the Company continues to be cordial and
peaceful. As on 31st March, 2014, in all there were 176 employees on
the roll of the Company. Out of these, 101 were at the executive level
and the remaining 72 were in non-executive level. Apart from them, the
workers have been appointed through Contractors.
FOREIGN EXCHANGE EARNING AND OUTGO
Activities Relating to Exports, Initiatives taken to increase exports,
Development of new export markets for products and services & export
Plan
As a part of its core strategy, the Company is focusing on exports of
its products by leveraging wide marketing reach.
DISCLOSURES OF ACCOUNTING TREATMENT:
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
to comply with the Accounting Standards notified under Sec 211(3C) of
the Companies Act, 1956("the 1956 Act") (which continues to be
applicable in respect of Section 133 of the Companies Act, 2013 ("the
Companies Act") in terms of General Circular 15/2013 dated 13
September, 2013 of the Ministry of Corporate Affairs and the relevant
provisions of the Companies Act, 1956/2013 Act, as applicable. The
financial statements have been prepared on accrual basis under the
historical cost convention. The accounting policies adopted in the
preparation of the financial statements are consistent with those
followed in the previous year.
VIGIL MECANISM/WHISTLE BLOWER POLICY
Pursuant to the clause 49 of the Listing Agreement and as per
applicable provisions of Section 177 of the Companies Act, 2013 the
Company has adopted a Whistle Blower Policy/Vigil Mechanism for the
directors and employees to report genuine concerns or grievances about
unethical behavior, actual or suspected fraud or violation of the
Company''s Code of Conduct or Ethics Policy. Such Vigil Mechanism shall
provide for adequate safeguard against victimization of directors and
employees who avail of such mechanism. The policy has been put on the
Company''s website www.svendgaard .com
RISK MANAGEMENT:
Your Company has a strong risk management framework that enables active
monitoring of the business environment and identification, assessment
and mitigation of potential internal or external risks.
The senior management team sets the overall tone and risk culture of
the organization through defined and communicated corporate values,
clearly assigned risk responsibilities, appropriately delegated
authority, and a set of processes and guidelines. There are laid down
procedures to inform the Board members about the risk assessment and
risk minimization procedures. Your Company promotes strong ethical
values adds high level of integrity in all its activities, which in
itself is significant risk mitigation.
In addition, there are regular internal audit activities carried out by
the team of Internal Auditors who give their independent assessment on
the risk mitigating measures and provide recommendations for
improvement.
ACKNOWLEDGEMENT:
Your Directors takes this opportunity to express their gratitude and
appreciation for the valuable support and cooperation received from its
employees, esteemed customers, business associates, bank, financial
institutions, various statutory authorities, agencies of Central and
State Government, suppliers and stakeholders.
Your Directors also wish to place on records their appreciation for the
contribution made by the Company''s personnel, whose dedication and
drive for excellence have helped your Company to achieve the desired
performance and sustained growth in the year under review.
On behalf of the Board of Directors
For JHS Svendgaard Laboratories Limited
Sd/- Sd/-
(Nikhil Nanda) (Vanamali Polavaram)
Managing Director Director
DIN- 00051501 DIN- 01292305
Place: New Delhi
Date: 30th May, 2014
Mar 31, 2013
Dear Shareholders,
To The Members of JHS Svendgaard Laboratories Limited
The Directors are pleased to present Ninth Annual Report and the
Statements of Accounts for the financial year ended on March 31, 2013.
FINANCIAL PERFORMANCE SUMMARY:- I
The Financial highlights of the Company are given below: -
(Amount in Rs. Lac)
Standalone Consolidated
Particulars 31.03.2013 31.03.2012 31.03.2013 31.03.2012
Net Sales/Income from
Operations 4743.81 9,258.97 5,097.14 12,638.20
Other Income 86191 21.23 861.91 21.23
Interest & Finance
Charges 1034.08 610.80 1,034.35 611.45
Depreciation 1361.88 736.58 1,362.54 737.45
Profit (Loss) before
Tax (1076.59) (149.19) (1,031.80) 325.69
Provision for Tax 182.58 214.85 182.58 214.85
Profit (loss) after
Tax (1259.17) (364.05) (1,214.38) 110.84
Profit (loss) to be
carried to the Balance
Sheet (420.93) (364.04) (376.13) 110.84
Paid up Equity Share
Capital 2409.53 1,755.00 2,409.53 1,755.00
(Face Value of Rs.10/-
each)
Reserves excluding
revaluation reserves 4,955.70 8205.52 6,512.45 9,686.92
Basic EPS (in Rupees
not annualized) (5.23) (2.15) (5.04) 0.66
Diluted EPS (in Rupees
not annualized) (5.23) (2.15) (5.04) 0.65
DIVIDEND:-
Considering the Company''s financial performance, the Directors have not
recommended any dividend for the financial year ended on March 31,
2013.
SCHEME OF AMALGAMATION:-
The Board of Directors of your Company at its Board Meeting held on
July 07, 2010, had considered and approved the Scheme of Amalgamation
of the JHS Svendgaard Hygiene Products Limited (Transferor Company),
Waves Hygiene Products (Transferor Firm) with your Company.
Accordingly, the Scheme of Amalgamation of M/s JHS Svendgaard Hygiene
Products Limited and M/s Waves Hygiene Products (a Partnership Firm)
with M/s JHS Svendgaard Laboratories Limited had been approved by the
Delhi High Court on 30th August, 2011 and by the Shimla High Court on
28th May, 2012.
As per the Scheme of Amalgamation, all the assets and liabilities of
JHS Svendgaard Hygiene Products Limited (Transferor Company) and Waves
Hygiene Products (Transferor Firm) has been transferred to your Company
with effect from appointed date i.e. 31st March, 2010 . The
Amalgamation will thus now create a platform for value enhancing growth
and reinforces the Company position as an integrated global Company. It
will also enable the business of the company to obtain greater
facilities, possessed and enjoyed by one large Company for securing and
conducting its business on favorable terms and other benefits. The
Company will additionally gain from reduced operating costs arising out
of the Combined operations. Moreover, the
Amalgamation will result in an integrated operation which qualifies the
Company to participate in the market of Fast Moving Consumer Goods,
besides providing synergy benefits to the existing operations.
INCREASE IN SHARE CAPITAL:- 1
The Board of Director of your company has issued and allotted the
65,45,245 (Sixty Five Lakhs Forty Five Thousand Two Hundred and Twenty
Five Lac) Equity Shares to the shareholders of JHS Svendgaard Hygiene
Products Limited and partners of Waves Hygiene Products pursuant to
scheme of amalgamation at its Board Meeting held on 6th November, 2012
As on 31st March, 2013, the Issued and Paid-Up Share Capital of the
Company was Rs. 2409.52 Lakhs comprising 2,40,95,252 Equity Shares of
Rs. 10/- each fully paid-up.
PERFORMANCE REVIEW:-
During the reporting year there has been 25% increase in the EBIDTA
from Rs. 120 Million in the year ended 31st March, 2012 to Rs. 150
Million in the year ended 31st March, 2013. The turnover from the
operations of the Company during the financial year ended 31st March,
2013 amounted to Rs. 561 Million as compared to Rs.928 Million during
the previous year ended 31st March, 2012 as in the previous year ended
on 31st March, 2012 your company made income from trading business
amounting to Rs. 390 million. The turnover of the Company has decreased
by 39.55% from the previous year mainly on account of loss of trading
income.
EMPLOYEE STOCK OPTION PLAN 2008:-
To motivate and retain the efficient employees, the Company has
introduced employee stock option plan 2008. As on date no option is
vested on any employee, therefore no option is in existence till date
The details regarding options granted; the pricing formula; options
vested; options exercised; the total number of shares arising as a
result of exercise of option and other details as required under SEBI
(Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines 1999 are not reproduced since no ESOP has been exercised by
the Employees and the relevant details are hence not available.
Requisite information is given in the statements placed at Annexure "A
RECOGNITION/AWARD:
Your Company has received awarded a certificate of excellence in
recognition to exemplary growth by Inc. India, Indian edition of Inc.,
the leading US magazine that focuses on entrepreneurship and growth.
The Company is ranked 215 among the top 500 India'' fastest growing
midsized companies.
DIRECTORS:-
Appointments/ Re-appointment:- Mr. Amarjit Singh, Director of the
Company, liable to retire by rotation at the forthcoming Annual General
Meeting on 24th September, 2013 and being eligible, offer himself for
re-appointment.
Mr. Daljit Singh Grewal, Director of the Company, liable to retire by
rotation at the forthcoming Annual General Meeting on 24th September,
2013 and being eligible, offer himself for re-appointment.
Necessary resolutions for re-appointment of Mr. Daljit Singh Grewal and
Mr. Amarjit Singh on 24th September, 2013 are being included in the
notice convening Annual General Meeting.
Brief resume, expertise and other details of Directors proposed to be
appointed/re-appointed, as required by clause 49 of the Listing
Agreement, are furnished in the explanatory statement to the notice
convening Annual General Meeting.
AUDITORS:
M/s Haribhakti & Co., Chartered Accountants, Firm Registration Number:
103523W, Statutory Auditors of the Company, holds office until the
conclusion of the ensuing Annual General Meeting and are eligible for
reappointment.
The Company has received letter from the Statutory Auditor that their
reappointment, if made, would be within the prescribed limits under
Section 224(1B) of the Companies Act, 1956 and that they are not
disqualified for reappointment within the meaning of Section 226 of the
said Act.
LISTING:
Since 21st October, 2006 your Company''s Equity Shares got listed with
Bombay Stock Exchange Limited and National Stock Exchange of India
Limited. The Company has paid the applicable listing fee to both the
stock exchanges.
SUBSIDIARY COMPANIES:
Jones H Smith, FZE, was incorporated as Wholly Owned Subsidiary of your
Company in 2007 in Ras Al Khaimah Free Trade Zone, UAE. The Company is
established for the trading in all personal and oral care products, in
the international market specially Middle-East Countries. JHS
Svendgaard Dental Care Limited was incorporated as a Subsidiary Company
in the month of April 2008. Presently your Company holds 95.12% of
total paid up share capital of the Subsidiary Company.
During the year we have acquired 99.99% shares of JHS Svendgaard
Mechanical and Warehouse Private Limited has become subsidiary of you
company w.e.f 21st June, 2012. Presently your Company holds 99.99% of
total paid up share capital of the Subsidiary Company. The statement
in respect of each of subsidiary, giving the detail of reserve, total
assets and liabilities, details of investment, turnover, profit after
taxation pursuant to section 212 of the Companies Act, 1956, regarding
subsidiary companies forms part of this Annual Report.
PARTICULARS OF EMPLOYEES:-
No information regarding particulars of employees required to be
reported under Section 217(2A) of the Companies Act, 1956 is available
since none of the employees of the Company is drawing remuneration in
excess of the limits as prescribed therein.
ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE:-
Requisite information is given in the statements placed at Annexure "B"
& "C", respectively.
CORPORATE GOVERNANCE:-
A separate Section on Corporate Governance forming part of the
Directors'' Report and the Certificate confirming the compliance of the
conditions stipulated in Clause 49 of Listing Agreement is included in
the Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT-
A report on Management Discussion and Analysis as required under clause
49 of the Listing Agreement forms part of the Annual Report.
DEPOSITS:-
The Company has not accepted any Deposits in pursuance of Section 58A
of the Companies Act, 1956 and other applicable rules made there
under.
DIRECTOR''S RESPONSIBILITY STATEMENT:-
Pursuant to Section 217(2AA) of the Companies Act, 1956, in relation to
financial statements for the Financial Year ending on March 31, 2013,
the Directors'' report that: -
a) In the preparation of the annual accounts, the applicable accounting
standards had been followed an that no material departures have been
made from the same;
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 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, 1956 for safeguarding of 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.
INDUSTRIAL RELATIONS:-
Your Company has taken significant steps in developing human resource
and strengthening human resource systems. During the year under review,
industrial relation in the Company continues to be cordial and
peaceful.
As on March 31, 2013, in all there were 382 employees on the roll of
the Company. Out of these, 72 were at the executive level and the
remaining 310 were in non-executive level. Apart from them, the workers
have been appointed through Contractors.
RISK MANAGEMENT:-
Your Company has a strong risk management framework that enables active
monitoring of the business environment and identification, assessment
and mitigation of potential internal or external risks. The senior
management team sets the overall tone and risk culture of the
organization through defined and communicated corporate values, clearly
assigned risk responsibilities, appropriately delegated authority, and
a set of processes and guidelines. There are laid down procedures to
inform the Board members about the risk assessment and risk
minimization procedures. Your Company promotes strong ethical values
ad high level of integrity in all its activities, which in itself is
significant risk mitigation.
In addition, there are regular internal audit activities carried out by
the team of Internal Auditors who give their independent assessment on
the risk mitigating measures and provide recommendations for
improvement.
ACKNOWLEDGMENT:-
Your Directors takes this opportunity to express their gratitude and
appreciation for the valuable support and cooperation received from its
employees, esteemed customers, business associates, bank, financial
institutions, various statutory authorities, agencies of Central and
State Government, Suppliers and Stakeholders.
Your Directors also wish to place on records their appreciation for the
contribution made by the Company''s personnel, whose dedication and
drive for excellence have helped your Company to achieve the desired
performance and sustained growth in the year under review.
On the behalf of Board of Directors
For JHS Svendgaard Laboratories Limited
(Nikhil Nanda) (Rakesh Sharma)
Place: New Delhi Managing Director Director
Date: 27th May, 2013 DIN- 00051501 DIN- 05202265
Mar 31, 2012
To the Members of Jhs Svendgaard Laboratories Limited
The Directors are pleased to present Eight Annual Report and the
Statements of Accounts for the financial year ended on March 31, 2012.
Financial Performance Summary:
The Financial highlights of the Company are given below: -
(Amount in Rs. Lac)
Standalone Consolidated
Particulars 31.03.2012 31.03.2011 31.03.2012 31.03.2011
Net Sales/Income from
Operations 9,280.20 8,541.46 12,660.20 12,769.54
Other Income 83.27 165.48 86.06 165.68
Interest & Finance Charges 610.80 352.90 611.45 353.34
Depreciation 736.58 693.93 737.45 695.39
Profit (Loss) before Tax (149.20) 757.22 325.68 1,373.87
Provision for Tax 214.85 155.87 214.85 152.89
Profit (loss) after Tax (364.05) 601.35 110.84 1,220.99
Profit (loss) to be carried
to the (364.05) 452.15 110.84 1,071.78
Balance Sheet
Paid up Equity Share Capital 1,755.00 1,455.00 1,755.00 1,455.00
(Face Value of Rs.10/- each)
Reserves excluding
revaluation reserves 6,519.88 4,113.03 6,691.70 4,109.65
Basic EPS (in Rupees
not annualised) (2.15) 4.14 0.66 8.41
Diluted EPS (in Rupees not
annualised) (2.15) 4.14 0.65 8.41
Dividend
Considering the Company's financial performance, the Directors have not
recommended any dividend for the financial year ended on March 31, 2012
Scheme of Amalgamation
The Board of Directors of your Company at its Board Meeting held on
July 07, 2010, had considered and approved the Scheme of Amalgamation
of the JHS Svendgaard Hygiene Products Limited (Transferor Company),
Waves Hygiene Products (Transferor Firm) with your Company.
Accordingly, the Scheme of Amalgamation of M/s JHS Svendgaard Hygiene
Products Limited and M/s Waves Hygiene Products (a Partnership Firm)
with M/s JHS Svendgaard Laboratories Limited had been approved by the
Delhi High Court on 30th August, 2011 and the Shimla High Court is also
likely to approve the same very soon.
As per the Scheme of Amalgamation, all the assets and liabilities of
JHS Svendgaard Hygiene Products Limited (Transferor Company) and Waves
Hygiene Products (Transferor Firm) will be transferred to your Company
with effect from appointed date i.e. 31st March, 2010.
The Amalgamation will thus now create a platform for value enhancing
growth and reinforces the Company position as an integrated global
Company. It will also enable the business of the company to obtain
greater facilities, possessed and enjoyed by one large Company for
securing and conducting its business on favorable terms and other
benefits. The Company will additionally gain from reduced operating
costs arising out of the Combined operations. Moreover, the
Amalgamation will result in an integrated operation which qualifies the
Company to participate in the market of Fast Moving Consumer Goods,
besides providing synergy benefits to the existing operations.
Increase in Share Capital
The Board of Director of your company has issued and allotted the
25,00,000 (Twenty Five Lac) Equity Shares to Tano Mauritius India FVCI
at a price of Rupees 97.75/- (including a premium of Rupees 87.75/-)
per equity shares at its Board Meeting held on 22nd April , 2011 and
5,00,000 (Five Lac) Equity Shares to Mr.Nikhil Nanda (the person
belonging to promoter family) at a price of Rupees 97.75/- (including a
premium of Rupees 87.75/- ) per equity shares at its Board Meeting held
on 31st March, 2012.
Performance Review
We take pride in mentioning that there has been a method in achieving
this continuous strong growth trend namely, of maintaining a discipline
on the fundamentals of persuasive and consumer-meaningful innovations
backed by distribution expansion. The national as well as international
market are poised for recovery, but with sharp regional disparities.
There has been increase in the revenue during the period under review.
The net sales/income from operations has gone up to Rs. 9280.20 Lac as
compared to Rs. 8541.46 Lac in the previous year. However The Net Profit
(after tax) has decreased from Rs.601.34 Lac to a loss of Rs. 364.04 Lac.
Employee Stock Option Plan 2008
To motivate and retain the efficient employees, the Company has
introduced employee stock option plan 2008. On July 31, 2008 the
Company has issued 245008 equity options to its senior managerial
persons, giving a right to each option holder to apply for one equity
share of the Company, during the exercise period. Due to effect of
economic downturn and its constraints on cash flows none of the
employee could give their acceptance of the options given to them. As
on date no option is accepted by any employee, therefore no option is
in existence till date .The details regarding options granted; the
pricing formula; options vested; options exercised; the total number of
shares arising as a result of exercise of option and other details as
required under SEBI (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines 1999 are not reproduced since no ESOP has
been exercised by the Employees and the relevant details are hence not
available. Requisite information is given in the statements placed at
Annexure "A
Certificate From Auditor
Certificate from the Auditor of the company in terms of clause 14 of
SEBI (Employee Stock Option Scheme) Guidelines, 1999 certifying that
the scheme has been implemented in accordance with these guidelines and
in accordance with the resolution passed by the Company in the general
meeting, is not required.
Recognition/Award
Your Company has received the Second Best Exporter of Tooth Brushes
including dental Plate brushes and has been awarded the highest
recognitions for Exports for the year 2008-09 by The Plastics Export
promotion council (Sponsored by Department of Commerce Government of
India) on 19th December 2009.
Directors
Appointments/ Re-appointment:
The Board of Director has appointed Mr. Rakesh Sharma as an Additional
Director at its Board Meeting held on 11th February, 2012. Pursuant to
Section 260 of the Companies Act, 1956, Mr. Rakesh Sharma holds the
office only up to the date of the ensuing Annual General Meeting of the
Company and is eligible for appointment as a Director. The Company has
received a notice under section 257 of the Companies Act, 1956
proposing the appointment of Mr. Rakesh Sharma Sharma as a Director of
the Company who will be liable to retire by rotation.
Mr. Chhotu Ram Sharma, Director of the Company, liable to retire by
rotation at the forthcoming Annual General Meeting on 06th September,
2012 and being eligible, offer himself for re- appointment.
Mr. Vanamali Polavaram, Director of the Company, liable to retire by
rotation at the forthcoming Annual General Meeting on 06th September,
2012 and being eligible, offer himself for re- appointment.
Necessary resolutions for appointment of Mr.Rakesh Sharma and
re-appointment of Mr. Chhotu Ram Sharma and Mr. Vanamali Polavaram on
06th September, 2012 are being included in the notice convening Annual
General Meeting.
Brief resume, expertise and other details of Directors proposed to be
appointed/re-appointed, as required by clause 49 of the Listing
Agreement, are furnished in the explanatory statement to the notice
convening Annual General Meeting.
Auditors
M/s Haribhakti & Co., Chartered Accountants, Firm Registration Number:
103523W, Statutory Auditors of the Company, holds office until the
conclusion of the ensuing Annual General Meeting and are eligible for
reappointment.
The Company has received letter from the Statutory Auditor that their
reappointment, if made, would be within the prescribed limits under
Section 224(1B) of the Companies Act, 1956 and that they are not
disqualified for reappointment within the meaning of Section 226 of the
said Act.
The Auditor's have put certain qualifications to which the management
has put forward the following below mentioned replies;
Qualification and response to Auditor's Report
a. The company has engaged in manufacturing hygiene product i.e.
Odonil, which is not specifically covered by object clause of
Memorandum of Association
In this reference the Board hereby submits that as per their opinion
manufacturing of hygiene product Odonil is within the ambit of the main
objects of the Company defined under clause III (A) (2).Secondly also
the Merger of JHS Svendgaard Laboratories Limited with JHS Svendgaard
Hygiene Products Limited has been approved by Delhi High Court and the
same is also likely to be approved by Shimla High Court very soon. The
object clause of JHS Svendgaard Hygiene Products Limited specifically
includes the manufacturing of Hygiene Products.
b. The Company has maintained records showing quantitative details of
fixed assets except for the complete particulars, identification and
situation of fixed assets.
In this reference the Board hereby submits that the company has taken
note of the same and the Company has updated its fixed assets register
with reference of the Particulars, identification and situation of the
fixed assets.
c. The Company has a policy of physically verifying fixed assets
according to a phased program to cover all the items over all a period
of three years, which in our opinion is reasonable having regard to the
size of the Company and the nature of its assets. The fixed assets were
physically verified during the current year. However, the process of
physical verification needs to be strengthened to include proper
instructions and reconciliation with the fixed assets register
The Board Members have taken note of the same and members had already
initiated the steps to strengthen the process of Physical verification
and establish a defined process for reconciliation with fixed assets
register.
d. The procedures of physical verification of inventory followed by the
management are reasonable and adequate in relation to the size of the
Company and the nature of its business. However, the process of
physical verification needs to be further strengthened.
The Board Members have taken note of the same and members had already
initiated the steps to strengthen the process of Physical verification
and establish a defined process for physical verification of Inventory.
e. The Company has granted unsecured loan amounting to 40,030,000 to a
party covered in the register maintained under section 301 of the
Companies Act, 1956. In respect of the above loan, the principal is not
yet due for receipt as per the terms of agreement. However, since the
terms of receipt of interest are not stipulated, we are unable to
comment on the regularity of the same.
The Board hereby submits that the loan has been granted as per terms of
commercial arrangement and interest has also been provided adequately
f. The Company has taken loan from two parties covered in the register
maintained under section 301 of the Companies Act, 1956. The maximum
amount involved during the year is Rs.58,763,775 and the year-end balance
of loans is 9,777,614. In the absence of any agreement with the above
said parties, we are unable to comment on the regularity of repayment
of principal amounts and interest thereon.
Also whether the rate of interest and other terms and conditions for
such loans are prima facie, prejudicial to the interest of the Company
In this reference, the Board has submitted that the loan has been
granted as per terms of commercial arrangement and interest has also
been provided adequately
g. In our opinion and according to the information and explanations
given to us, there exists an adequate internal control system
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory. However, the internal
control system needs to be strengthened to commensurate with the size
of the Company and the nature of its business with regard to purchase
of fixed assets and sale of goods. During the course of our audit, we
have observed continuing failure to correct weakness in respect to
internal control system related to purchase of fixed assets and sale of
goods.
The Board Members have taken note of the same and members had already
initiated the steps to strengthen the system of internal control and
establish a defined process to overcome the weakness in respect to
purchase of fixed assets and sale of goods.
h. The Company is regular in depositing with appropriate authorities
undisputed statutory dues including income tax, wealth tax, sales tax,
investor education and investor fund, customs duty, excise duty.
However, there have been some delays in deposition of Tax deducted at
source and collected at source, Service tax, Provident fund and
Employees' state insurance applicable to it.
In this reference the Board hereby submits that such non- deposit of
due was unintentional and the Company is in the process of depositing
such dues. The Board hereby submits that that your company is likely to
avoid this for the time to come
i. According to the information and explanations provided to us, the
Company has provided corporate guarantees amounting Rs.134,314,729 to
ICICI Bank Limited for loans taken by JHS Svendgaard Hygiene Products
Limited. Amalgamation with these entities was approved by the Board
vide its meeting dated July 7, 2010. Pending amalgamation approvals
from Honourable High Court we are unable to comment, whether the terms
and conditions of guarantees given by the company, are prejudicial or
not to the interest of the company.
The Merger of JHS Svendgaard Laboratories Limited with JHS Svendgaard
Hygiene Products Limited has been approved by Delhi High Court and the
same is also likely to be approved by Shimla High Court very soon. Once
this merger is approved the object clause will get regularized
Listing:
Since 21st October, 2006 your Company's Equity Shares got listed with
Bombay Stock Exchange Limited and National Stock Exchange of India
Limited. The Company has paid the applicable listing fee to both the
stock exchanges.
Subsidiary Companies:
Jones H Smith, FZE, was incorporated as Wholly Owned Subsidiary of your
Company in 2007 in Ras Al Khaimah Free Trade Zone, UAE. The Company is
established for the trading in all personal and oral care products, in
the international market specially Middle-East Countries.
JHS Svendgaard Dental Care Limited was incorporated as a Subsidiary
Company in the month of April 2008. Presently your Company holds 95.12%
of total paid up share capital of the Subsidiary Company.
The statement in respect of each of subsidiary, giving the detail of
reserve, total assets and liabilities, details of investment, turnover,
profit after taxation pursuant to section 212 of the Companies Act,
1956, regarding subsidiary companies forms part of this Annual Report.
Particulars of Employees
No information regarding particulars of employees required to be
reported under Section 217(2A) of the Companies Act, 1956 is available
since none of the employees of the Company is drawing remuneration in
excess of the limits as prescribed therein.
Energy, Technology and Foreign Exchange
Requisite information is given in the statements placed at Annexure "B"
& "C", respectively.
Corporate Governance
A separate Section on Corporate Governance forming part of the
Directors' Report and the Certificate confirming the compliance of the
conditions stipulated in Clause 49 of Listing Agreement is included in
the Annual Report.
Management Discussion And Analysis Report
A report on Management Discussion and Analysis as required under clause
49 of the Listing Agreement forms part of the Annual Report.
Deposits
The Company has not accepted any Deposits in pursuance of Section 58A
of the Companies Act, 1956 and other applicable rules made there under.
Director's Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956, in relation to
financial statements for the Financial Year ending on March 31, 2012,
the Directors' report that: -
a) In the preparation of the annual accounts, the applicable accounting
standards had been followed and that no material departures have been
made from the same;
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 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, 1956 for safeguarding of 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.
Industrial Relations
Your Company has taken significant steps in developing human resource
and strengthening human resource systems. During the year under review,
industrial relation in the Company continues to be cordial and
peaceful.
As on March 31, 2012, in all there were 292 employees on the roll of
the Company. Out of these, 77 were at the executive level and the
remaining 215 were in non-executive level. Apart from them, the workers
have been appointed through Contractors.
Acknowledgement
Your Directors takes this opportunity to express their gratitude and
appreciation for the valuable support and cooperation received from its
employees, esteemed customers, business associates, bank, financial
institutions, various statutory authorities, agencies of Central and
State Government, suppliers and stakeholders.
Your Directors also wish to place on records their appreciation for the
contribution made by the Company's personnel, whose dedication and
drive for excellence have helped your Company to achieve the desired
performance and sustained growth in the year under review.
On behalf of the Board of Directors
For JHS Svendgaard Laboratories Limited
Sd/- Sd/-
(Nikhil Nanda) (Rakesh Sharma)
Managing Director Director
DIN- 00051501 DIN- 05202265
Place: New Delhi
Date : 26th May 2012
Mar 31, 2011
To the members of JHS Svendgaard Laboratories Limited
The Directors are pleased to present Seventh Annual Report and the
Statements of Accounts for the financial year ended on March 31, 2011.
Financial Performance Summary:
The Financial highlights of the Company are given below: -
(Amount inRs.Lac)
Standalone Consolidated
Particulars 31.03.2011 31.03.2010 31.03.2011 31.03.2010
Net Sales/Income
from Operations 8,541.46 5,107.85 12,769.54 6,845.83
Other Income 165.28 11.86 165.47 11.86
Interest & Finance
Charges 370.95 297.85 371.38 299.64
Depreciation 693.93 413.31 695.38 414.57
Profit before Tax 793.58 661.41 1,410.24 889.98
Provision for Tax 156.21 91.17 153.23 87.52
Profit after Tax 637.37 570.24 1,257.01 802.46
Profit to be carried
to the Balance Sheet 452.14 159.25 1,071.78 802.46
Paid up Equity Share
Capital 1,445.00 1,445.00 1,445.00 1,445.00
(Face Value of Rs.
10/- each)
Reserves excluding
revaluation reserves 6,162.71 5,720.62 7,003.19 5,948.65
Basic EPS (in Rupees
not annualised) 4.14 4.16 8.41 5.89
Diluted EPS (in Rupees
not annualised) 4.14 3.95 8.41 5.59
Dividend
Considering the Company's financial performance, the Directors have
recommended a final dividend of Rs.0.75 per equity share of the face
value of Rs.10/- for the financial year ended on March 31, 2011. The
final dividend, subject to approval of shareholders, at the forthcoming
Annual General Meeting of the Company on December 31, 2011
Scheme of Amalgamation
The Board of Directors of your Company at its Board Meeting held on
July 7, 2010, has considered and approved the Scheme of Amalgamation of
the JHS Svendgaard Hygiene Products Limited (Transferor Company), Waves
Hygiene Products (Transferor Firm) with your Company. Accordingly, the
Scheme of Amalgamation of M/s JHS Svendgaard Hygiene Products Limited
and M/s Waves Hygiene Products (a Partnership Firm) with M/s JHS
Svendgaard Laboratories Limited has been approved by the Delhi High
Court on August 30, 2011. However, it is still subject to the approval
of Shimla High Court.
As per the Scheme of Amalgamation, all the assets and liabilities of
JHS Svendgaard Hygiene Products Limited (Transferor Company) and Waves
Hygiene Products (Transferor Firm) will be transferred to your Company
with effect from appointed date i.e. March 31, 2010 subject to the
approval of relevant High Courts and other statutory authorities.
The Amalgamation will create a platform for value enhancing growth and
reinforces the Company position as an integrated global Company. It
will also enable the business of the company to obtain greater
facilities, possessed and enjoyed by one large Company for securing and
conducting its business on favorable terms and other benefits. The
Company will additionally gain from reduced operating costs arising out
of the Combined operations. Moreover, the Amalgamation will result in
an integrated operation which qualifies the Company to participate in
the market of Fast Moving Consumer Goods, besides providing synergy
benefits to the existing operations.
Increase In Share Capital
The Board of Director of your company has issued and allotted the
25,00,000 (Twenty Five Lac) Equity Shares to Tano Mauritius India FVCI
(a strategic investor) at a price of Rupees 97.75/- (including a
premium of Rupees 87.75/-) per equity share at its Board Meeting held
on April 22, 2011.
Performance Review
We take pride in mentioning that there has been a method in achieving
this continuous strong growth trend namely, of maintaining a discipline
on the fundamentals of persuasive and consumer-meaningful innovations
backed by distribution expansion. The national as well as international
market are poised for recovery, but with sharp regional disparities.
There has been increase in the revenue during the period under review.
The net sales/income from operations has gone up to Rs.8,541.46 Lac as
compared to Rs. 5,107.85 Lac in the previous year. The Net Profit
(after tax) has increased from Rs.570.24 Lac to Rs.637.37 Lac. This
rise in the profit of the Company is as a result of optimum
utilisation of the available resources.
Application of IPO Proceeds:
The amount of Rupees 3,886.19 Lac collected in IPO, was completely
utilised by the Company as on July 2, 2010 as per the Objects of the
Issue of the Prospectus and the same was intimated to Bombay Stock
Exchange (BSE) and National Stock Exchange (NSE) via Notes to Account
of the result for the quarter/half year ended on September 30, 2010.
Employee Stock Option Plan 2008
To motivate and retain the efficient employees, the Company has
introduced employee stock option plan 2008. On July 31, 2008 the
Company has issued 245008 equity options to its senior managerial
persons, giving a right to each option holder to apply for one equity
share of the Company, during the exercise period. Due to effect of
economic downturn and its constraints on cash flows none of the
employee could give their acceptance of the options given to them. As
on date, no option is accepted by any employee, therefore no option is
in existence till date .The details regarding options granted; the
pricing formula; options vested; options exercised; the total number of
shares arising as a result of exercise of option and other details as
required under SEBI (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines 1999, are not reproduced since no ESOP has
been exercised by the Employees and the relevant details are hence not
available. Requisite information is given in the statements placed at
Annexure "A"
Certificate from Auditor
Certificate from the Auditor of the company in terms of clause 14 of
SEBI (Employee Stock Option Scheme) Guidelines, 1999 certifying that
the scheme has been implemented in accordance with these guidelines and
in accordance with the resolution passed by the Company in the general
meeting, is not required.
Recognition/Award:
Your Company has received the Second Best Exporter of Tooth Brushes
including dental Plate brushes and has been awarded the highest
recognitions for Exports for the year 2008-09 by The Plastics Export
promotion council (Sponsored by Department of Commerce Government of
India) on December 19, 2009.
Directors
Appointments/ Re-appointment:
The Board of Director has appointed Mr. Chhotu Ram Sharma as an
Additional Director at its Board Meeting held on November 14, 2011.
Pursuant to Section 260 of the Companies Act, 1956, Mr. Chhotu Ram
Sharma hold the office only up to the date of the Ensuing Annual
General Meeting of the Company and is eligible for appointment as a
Director. The Company has received a notice under section 257 of the
Companies Act, 1956 proposing the appointment of Mr. Chhotu Ram Sharma
as a Director of the Company who will be liable to retire by rotation.
The Board of Director has appointed Mr. Amarjit Singh as an Additional
Director at its Board Meeting held on November 14, 2011. Pursuant to
Section 260 of the Companies Act, 1956, Mr. Amarjit Singh hold the
office only up to the date of the Ensuing Annual General Meeting of the
Company and is eligible for appointment as a Director. The Company has
received a notice under section 257 of the Companies Act, 1956
proposing the appointment of Mr. Amarjit Singh as a Director of the
Company who will be liable to retire by rotation.
The Board of Director has appointed Mr. Piyush Goenka as an Additional
Director at its Board Meeting held on May 14, 2011. Pursuant to
Section 260 of the Companies Act, 1956, Mr. Piyush Goenka hold the
office only up to the date of the ensuing Annual General Meeting of the
Company and is eligible for appointment as a Director. The Company has
received a notice under section 257 of the Companies Act, 1956
proposing the appointment of Mr. Piyush Goenka as a Director of the
Company who will not be liable to retire by rotation.
Mr. Gopal Krishan Nanda, Whole Time Director of the Company, liable to
retire by rotation at the forthcoming Annual General Meeting on
December 31, 2011 and being eligible, offer himself for re-appointment.
Mr. Daljit Singh Grewal, Director of the Company, liable to retire by
rotation at the forthcoming Annual General Meeting on December 31, 2011
and being eligible, offer himself for re- appointment.
Necessary resolutions for appointment of Mr. Chhotu Ram Sharma, Mr.
Amarjit Singh and Mr. Piyush Goenka and re- appointment of Mr. Gopal
Krishan Nanda and Mr. Daljit Singh Grewal are being included in the
notice convening Annual General Meeting.
Brief resume, expertise and other details of Directors proposed to be
appointed/re-appointed, as required by clause 49 of the Listing
Agreement, are furnished in the explanatory statement to the notice
convening Annual General Meeting.
Auditors
M/s Haribhakti & Co., Chartered Accountants, Firm Registration Number:
103523W, Statutory Auditors of the Company, holds office until the
conclusion of the ensuing Annual General Meeting and are eligible for
reappointment.
The Company has received letter from the Statutory Auditor that their
reappointment, if made, would be within the prescribed limits under
Section 224(1B) of the Companies Act, 1956 and that they are not
disqualified for reappointment within the meaning of Section 226 of the
said Act.
With reference to the observation mentioned in Para 4 (vi) (a) & (b)
respectively of the Auditor's Report specified by the Auditor of the
Company the attention is invited to the non operative and 11 dormant
accounts having total balance of Rupees 148,454 as at March 31, 2011 of
which no balance confirmation were received and the Company has
produced hygiene product i.e. Odonil which is not specifically covered
by object clause of the
Memorandum of Association.
With reference to the observation mentioned in the Annexure of the
Auditor's Report, the attention is also invited to the below mentioned
points:
a. the internal control system needs to be strengthened to
commensurate with the size of the Company and the nature of its
business with regard to purchase of fixed assets and sale of goods.
b. The internal audit system, the scope and coverage of which requires
to be widened to commensurate with the size and nature of its business.
c. There have been delays in deposition of Tax deducted at source,
Service tax, Provident fund, and Employees state insurance applicable
to the Company.
Pursuant to the Observation given by the Auditor in the Auditor's
Report of the Company the Company has taken immediate action:
To close all the dormant and non operative account of the Company and
has closed Eight such non operative and dormant account till date and
the amount lying in the accounts were taken through demand draft and
pay orders.
To widen the object clause of the Company once the final order of
merger is received from the Honorable Courts.
The Company is shortly going to implement a comprehensive legal
compliance manual in the company to check the internal control of the
Company.
The Board is in the process of appointing top audit firms of the
country to strengthen the internal audit system of the company.
The Board has appointed the hierarchy of the employees who will be
responsible for the timely compliances of TDS, Service tax etc.
Listing
Since October 21, 2006 your Company's Equity Shares are listed with
Bombay Stock Exchange Limited and National Stock Exchange of India
Limited. The Company has paid the applicable listing fee to both the
stock exchanges.
Subsidiary Companies
Jones H Smith, FZE, was incorporated as Wholly Owned Subsidiary of your
Company in 2007 in Ras Al Khaimah Free Trade Zone, UAE. The Company is
established for the trading in all personal and oral care products, in
the international market specially Middle-East Countries.
JHS Svendgaard Dental Care Limited was incorporated as a Subsidiary
Company in the month of April 2008. Presently your Company holds 59.99%
of total paid up share capital of the Subsidiary Company. The
Subsidiary Company has proposed plans of opening a chain of dental
clinics in all the major cities across India. During the year, the
Subsidiary has successfully launched two clinics, one in Delhi and
other in Noida.
The statement in respect of each of subsidiary, giving the detail of
reserve, total assets and liabilities, details of investment, turnover,
profit after taxation pursuant to section 212 of the Companies Act,
1956, regarding subsidiary companies forms part of this Annual Report.
Particulars of Employees:
No information regarding particulars of employees required to be
reported under Section 217(2A) of the Companies Act, 1956 is available
since none of the employees of the Company is drawing remuneration in
excess of the limits as prescribed therein.
Energy, Technology And Foreign Exchange
Requisite information is given in the statements placed at Annexure "B"
& "C", respectively.
Corporate Governance
A separate Section on Corporate Governance forming part of the
Directors' Report and the Certificate confirming the compliance of the
conditions stipulated in Clause 49 of Listing Agreement is included in
the Annual Report.
Management Discussion and Analysis Report
A report on Management Discussion and Analysis as required under clause
49 of the Listing Agreement forms part of the Annual Report.
Deposits
The Company has not accepted any Deposits in pursuance of Section 58A
of the Companies Act, 1956 and other applicable rules made there under.
Director's Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956, in relation to
financial statements for the Financial Year ending on March 31, 2011,
the Directors' report that: -
a) In the preparation of the annual accounts, the applicable accounting
standards had been followed and that no material departures have been
made from the same;
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 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, 1956 for safeguarding of 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.
Industrial Relations
Your Company has taken significant steps in developing human resource
and strengthening human resource systems. During the year under review,
industrial relation in the Company continues to be cordial and
peaceful.
As on March 31, 2010, in all there were 340 employees on the roll of
the Company. Out of these, 75 were at the executive level and the
remaining 265 were in non-executive level. Apart from them, the workers
have been appointed through Contractors.
Acknowledgement:
Your Directors takes this opportunity to express their gratitude and
appreciation for the valuable support and cooperation received from its
employees, esteemed customers, business associates, bank, financial
institutions, various statutory authorities, agencies of Central and
State Government, suppliers and stakeholders.
Your Directors also wish to place on records their appreciation for the
contribution made by the Company's personnel, whose dedication and
drive for excellence have helped your Company to achieve the desired
performance and sustained growth in the year under review.
For JHS Svendgaard Laboratories Limited
Sd/-
Nikhil Nanda
DIN 00051501
Place : New Delhi Gopal Krishna Nanda
Date : December 5, 2011 DIN 01490288
Mar 31, 2010
The Directors are pleased to present Sixth Annual Report and the
Statements of Accounts for the financial year ended on March 31, 2010.
Financial Results:
The Financial highlights of the Company are given below:-
(Amount in Rs. Lac)
Standalone Consolidated
Particulars 31.03.2010 31.03.2009 31.03.2010 31.03.2009
Net Sales/Income from
Operations 5107.85 2799.43 6845.83 2802.44
Other Income 11.86 36.80 11.86 37.61
Interest & Finance Charges 297.85 293.10 299.64 295.19
Depreciation 413.31 304.10 414.57 304.49
Profit before Tax 661.41 163.11 889.98 137.86
Provision for Tax 91.17 16.57 87.52 8.90
Profit after Tax 570.24 152.02 802.46 128.96
Profit to be carried to the
Balance Sheet 159.25 111.15 802.46 128.96
Paid up Equity Share Capital
(Face Value of Rs.10/- each) 1445.00 1290.00 1445.00 1290.00
Reserves excluding
revaluation reserves 5720.62 4674.33 5948.65 4662.95
Basic EPS (in Rupees not
annualized) 4.16 1.14 5.89 1.07
Diluted EPS (in Rupees not
annualized) 3.95 1.12 5.59 1.06
Dividend:
Considering the Companys financial performance, the Directors have
recommended a final dividend of Rs.0.50 per equity share of the face
value of Rs.10/- for the financial year ended on March 31, 2010. The
final dividend, subject to approval of shareholders, at the forthcoming
Annual General Meeting of the Company on December 28, 2010.
Scheme of Amalgamation:
The Board of Directors of your Company at its Board Meeting held on
July 7, 2010, has considered and approved the Scheme of Amalgamation of
the JHS Svendgaard Hygiene Products Limited, Waves Hygiene Products (a
Partnership Firm) with your Company.
The Amalgamation will result in an integrated operation which qualifies
the Company to participate in the market of Fast Moving Consumer Goods,
besides providing synergy benefits to the existing operations.
Performance Review:
We take pride in mentioning that there has been a method in achieving
this continuous strong growth trend namely, of maintaining a discipline
on the fundamentals of persuasive and consumer-meaningful innovations
backed by distribution expansion. The national as well as international
market are poised for recovery, but with sharp regional disparities.
There has been increase in the revenue during the period under review.
The net sales/income from operations has gone up to Rs.5,107.85 Lac as
compared to Rs.2,799.43 Lac in the previous year. The Net Profit (after
tax) has increased from Rs.146.54 Lac to Rs.570.24 Lac. This rise in the
profit of the Company is as a result of optimum utilization of the
available resources.
Application Of IPO Proceeds:
The amount of Rupees.3,886.19 Lac collected in IPO, was completely
utilised by the Company .as on July 2, 2010 as per the Objects of the
Issue of the Prospectus and the same was intimated to Bombay Stock
Exchange (BSE) and National Stock Exchange (NSE) via Notes to Account
of the result for the quarter/half year ended on September 30, 2010.
Employee Stock Option Plan 2008:
To motivate and retain the efficient employees, the Company has
introduced employee stock option plan 2008. On July 31, 2008 the
Company has issued 245008 equity options to its senior managerial
persons, giving a right to each option holder to apply for one equity
share of the Company, during the exercise period. Due to effect of
economic downturn and its constraints on cash flows none of the
employee could give their acceptance of the options given to them. Your
Company has decided to reissue the option again. As till date no option
is accepted by any employee, therefore no option is in existence till
date .The details regarding options granted; the pricing formula;
options vested; options exercised; the total number of shares arising
as a result of exercise of option and other details as required under
SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines 1999 are not reproduced since no ESOP has been exercised by
the Employees and the relevant details are hence not available.
Certificate from Auditor:
Certificate from the Auditor of the Company in terms of Clause 14 of
SEBI (Employee Stock Option Scheme) Guidelines, 1999, certifying that
the scheme has been implemented in accordance with the guideline and in
accordance the resolution passed by the company in the General Meeting,
is not required as no employee of the Company have accepted the grant
offered to them.
Recognition/Award:
Your Company has received the Second Best Exporter of Tooth Brushes
including dental Plate brushes and has been awarded the highest
recognitions for Exports for the year 2008-09 by The Plastics Export
promotion council (Sponsored by Department of Commerce Government of
India) on December 19, 2009.
Directors: Reappointments
Mr. Nikhil Nanda as Managing Director of the Company whose five year
tenure was concluded on April 18, 2010 and after he offered himself for
re-appointment, the Board of Directors at its meeting held on April 17,
2010 approved the resolution of his reappointment. The same is
presented before the shareholders for their confirmation.
Mr. Mukul Pathak, Independent Director of the Company, liable to retire
by rotation at the forthcoming Annual General Meeting on December 28,
2010 and being eligible, offer himself for re- appointment.
Mr. Vanamali Polavaram, Independent Director of the Company, liable to
retire by rotation at the forthcoming Annual General Meeting on
December 28, 2010 and being eligible, offer himself for re-appointment.
Necessary resolutions for re-appointment of Mr. Mukul Pathak and Mr.
Vanamali Polavaram are being included in the notice convening Annual
General Meeting. Brief resume of the Directors being re-appointed, as
required by clause 49 of the Listing Agreement are furnished in the
explanatory statement to the notice convening Annual General Meeting.
Auditors:
M/s Haribhakti & Co., Chartered Accountants, Firm Registration Number:
103523W, Statutory Auditors of the Company, holds office until the
conclusion of the ensuing Annual General Meeting and are eligible for
reappointment.
The Company has received letter from the Statutory Auditor that their
reappointment, if made, would be within the prescribed limits under
Section 224(1B) of the Companies Act, 1956 and that they are not
disqualified for reappointment within the meaning of Section 226 of the
said Act.
With reference to the observation mentioned in Para (VII) to the
Annexure of the Audit Report specified by the Auditor of the Company
for the improvement of internal control system of the Company. Pursuant
to this observation the Company has developed very comprehensive legal
compliance manual which makes the hierarchy of the employees
responsible for the compliance in the Company
Listing:
Since October 21, 2006 your Companys Equity Shares are listed with
Bombay Stock Exchange Limited and National Stock
Exchange of India Limited. The Company has paid the applicable listing
fee to both the stock exchanges.
Subsidiary Companies:
Jones H Smith, FZE, was incorporated as Wholly Owned Subsidiary of your
Company in 2007 in Ras Al Khaimah Free Trade Zone, UAE. The Company is
established for the trading in all personal and oral care products, in
the international market specially Middle-East Countries.
JHS Svendgaard Dental Care Limited was incorporated as a Subsidiary
Company in the month of April 2008. Presently your Company holds 59.99%
of total paid up share capital of the Subsidiary Company. The
Subsidiary Company has proposed plans of opening a chain of dental
clinics in all the major cities across India. During the year, the
Subsidiary has successfully launched two clinics, one in Delhi and
other in Noida.
The statement in respect of each of subsidiary, giving the detail of
reserve, total assets and liabilities, details of investment, turnover,
profit after taxation pursuant to section 212 of the Companies Act,
1956, regarding subsidiary companies forms part of this Annual Report.
Particulars of Employees:
No information regarding particulars of employees required to be
reported under Section 217(2A) of the Companies Act, 1956 is available
since none of the employees of the Company is drawing remuneration in
excess of the limits as prescribed therein.
Energy, Technology and Foreign Exchange:
Requisite information is given in the statements placed at Annexure "B"
& "C", respectively.
Corporate Governance:
A separate Section on Corporate Governance forming part of the
Directors Report and the Certificate confirming the compliance of the
conditions stipulated in Clause 49 of Listing Agreement is included in
the Annual Report.
Management Discussion and Analysis Report:
A report on Management Discussion and Analysis as required under clause
49 of the Listing Agreement forms part of the Annual Report.
Deposits:
The Company has not accepted any Deposits in pursuance of Section 58A
of the Companies Act, 1956 and other applicable rules made there under.
Directors Responsibility Statement:
Pursuant to Section 217(2AA) of the Companies Act, 1956, in relation to
financial statements for the Financial Year ending on March 31, 2010,
the Directors report that:- a) In the preparation of the annual
accounts, the applicable accounting standards had been followed and
that no material departures have been made from the same;
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 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, 1956 safeguarding of 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.
Industrial Relations:
Your Company has taken significant steps in developing human resource
and strengthening human resource systems. During the year under review,
industrial relation in the Company continues to be cordial and
peaceful.
As on March 31, 2010, in all there were 290 employees on the roll of
the Company. Out of these, 50 were at the executive level and the
remaining 240 were in non-executive level. Apart from them, the workers
have been appointed through Contractors.
Acknowledgement:
Your Directors takes this opportunity to express their gratitude and
appreciation for the valuable support and cooperation received from its
employees, esteemed customers, business associates, bank, financial
institutions, various statutory authorities, agencies of Central and
State Government, suppliers and stakeholders.
Your Directors also wish to place on records their appreciation for the
contribution made by the Companys personnel, whose dedication and
drive for excellence have helped your Company to achieve the desired
performance and sustained growth in the year under review.
By order of the Board of Directors
For JHS Svendgaard Laboratories Limited
Sd/- Sd/-
Place: New Delhi Nikhil Nanda) (Guninder Bhalla)
Date: November 23, 2010 Managing Director Director
DIN- 00051501 DIN- 01987186