Mar 31, 2023
It is our pleasure to present to you the 32nd Annual Report of your Company together with the Audited Financial Statements for the Financial Year ended March 31, 2023.
Your Company''s financial performance on standalone basis for the Financial Year ended March 31, 2023 compared with previous Financial Year is summarised below:
('' in Lacs) |
||
Financial Results |
Financial Year ended March 31, 2023 |
Financial Year ended March 31, 2022 (Restated) |
Revenue from Operations |
248,194.60 |
219,326.33 |
Earnings before Interest, Tax, Depreciation and Amortization |
31,555.77 |
24,790.32 |
Finance Cost |
1,309.09 |
1,180.39 |
Other Income |
3,948.39 |
1,847.58 |
Depreciation on Tangible Assets |
2,941.43 |
3,800.79 |
Amortization of Intangible Assets |
104.55 |
3,162.46 |
Depreciation of right of use assets |
1,956.14 |
1,912.55 |
Profit before exceptional item and tax |
29,192.95 |
16,581.71 |
Exceptional items |
703.25 |
- |
Profit before tax |
29,896.20 |
16,581.71 |
Provision for tax |
||
- Current tax |
5,399.82 |
3,207.00 |
- Deferred Tax Charge/ (Credit) |
543.98 |
(496.73) |
Profit after tax |
23,952.40 |
13,871.44 |
Earning Per Share (Basic) (In '') |
6.52 |
3.78 |
Earning Per Share (Diluted) (In '') |
6.52 |
3.78 |
Dividend Per Share of face value of ''1/- (In '') |
3.00 |
2.50 |
The abovementioned financial performance highlights are an abstract of the Financial Statements of your Company for the Financial Year 2022-23. The detailed Financial Statements of your Company forms part of this Annual Report and are also uploaded on website of your Company i.e. www.jyothylabs.com.
The Revenue from operations on standalone basis of your Company for the Financial Year 2022-23 was up by 13.2% and stood at '' 248,194.60 Lacs compared to '' 219,326.33 Lacs in the previous financial year. The net profit for the financial year 2022-23 amounted to '' 23,952.40 Lacs, up by of 72.7% over the previous financial year.
The consolidated revenue from operations of your Company for the financial year under review stood at '' 248,601.52 Lacs as against '' 219,648.88 Lacs in the previous financial year, reporting a growth of 13.2%. The consolidated profit after tax for the financial year under review stood at '' 23,972.60 Lacs against '' 15,913.03 Lacs in the previous financial year, up by 50.6% over the previous financial year.
DIVIDEND
Your Board is pleased to recommend for your consideration, a dividend of '' 3/- (Rupees Three only) per equity share of ''1/- each for the financial year 2022-23. The aforesaid dividend will involve a total payout of '' 11,016.25 Lacs and is subject to the
approval of Members at the ensuing Annual General Meeting of your Company. The proposed dividend payout is in accordance with your Company''s Dividend Distribution Policy.
In accordance with the provisions of the Income Tax Act, 1961 as amended by and read with the provisions of the Finance Act, 2020, with effect from April 1,2020, dividend declared and paid by any Company is taxable in the hands of shareholders. Your Company shall, therefore, be required to regulate deduction of tax at source (TDS) at the time of payment of dividend in accordance with the provisions of the Income Tax Act, 1961 read with the Finance Act, 2020 and at the applicable rates of taxes. The TDS rate may vary depending upon the residential status of the shareholder and the documents submitted to your Company.
Your Company will also be sending communication to the shareholders informing them to submit the necessary documents to enable your Company to calculate the amount of tax required to be deducted from the proposed dividend in respect of each eligible shareholders. The aforesaid communication will be sent to those shareholders whose name appears in the Register of Member as on June 2, 2023 via email to those shareholders who have registered their email id with your Company.
During the previous financial year, your Company had paid a final dividend of '' 2.50 (Rupees Two and Paise Fifty only) per equity share of ''1/- each for the Financial Year 2021-22. The aforesaid dividend involved a total payout of '' 9,180.22 Lacs.
The Board of Directors of your Company had approved and adopted a policy on Dividend Distribution formulated in accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the Listing Regulations) and the dividend is recommended in accordance with the said policy.
The sub-regulation (1) of Regulation 43A of the Listing Regulations has allowed the companies to provide web-link of the Dividend Distribution Policy instead of attaching it along with the Annual Report. However, for the easy accessibility of the shareholders, your Company has annexed to this report its Dividend Distribution Policy as "Annexure - A" and has also uploaded the same on your Company''s website at the link:
https://www.jyothylabs.com/investor/management-
policies-notices/#Management-Policies
a) Issue of Equity Shares with differential rights
During the year under review and to date, your Company has not issued any shares with differential rights, hence no information prescribed under the provisions of Section 43(a)(ii) of the Companies Act, 2013 (the Act) read with Rule 4(4) of the Companies (Share Capital & Debentures) Rules, 2014 has been furnished.
b) Issue of Sweat Equity Shares
During the year under review and to date, your Company has not issued any sweat equity shares. Hence no information as per the provisions of Section 54(1 )(d) of the Act read with Rule 8(13) of the Companies (Share Capital & Debentures) Rules, 2014 is furnished.
c) Issue of Employee Stock Option
During the year under review and to date, your Company has not issued any Employee Stock Option, hence no information is furnished.
Pursuant to the approval of the Scheme of Amalgamation of Jyothy Fabricare Services Limited with your Company sanctioned by the Hon''ble National Company Law Tribunal, Mumbai Bench, the Authorised Share Capital of your Company is '' 3,08,85,00,000/- consisting of: (a) 3,01,95,00,000 Equity Shares of the Face Value of ''1/- each (b) 30,000 11% Cumulative Redeemable Preference Shares of the Face Value of '' 100/- each and (c) 66,00,000 Preference Shares of '' 10/- each. Since the amalgamation was with the Wholly Owned Subsidiary of your Company, the paid-up Equity Share Capital of your Company remains unchanged as on March 31, 2023 which is '' 36,72,08,644/- consisting of 36,72,08,644 Equity Shares of the Face Value of '' 1/- each. Further, as on March 31, 2023, none of the Directors of your Company holds instruments convertible into equity shares of your Company.
During the Financial Year under review your Company did not issue any Debentures in terms of Section 42 of the Act read with Rule 14 of the Companies (Prospectus and Allotment of Securities) Rules, 2014 and no debentures were redeemed during the Financial Year 2022-23.
Pursuant to Section 134 (3) (a) of the Act, the draft annual return for Financial Year 2022-23 prepared in accordance with Section 92(3) of the Act is made available on your website of the Company i.e. https://www.iyothylabs.com/investor/annual-report-2/#annual-report
NUMBER OF MEETINGS OF THE BOARD
Your Company''s Board of Directors met 7 (seven) times during the financial year ended March 31, 2023 in accordance with the provisions of the Act and the Rules made thereunder. All the Board and the Committee meetings during the financial year 2022-23, were held physically and the facility to attend the meeting through video conferencing in compliance with the provisions of Section 173 of the Act read with Rule 3 of the Companies (Meetings of Board and its Powers) Rules, 2014, as amended was provided.
The meetings were held on May 24, 2022, July 25, 2022, September 7, 2022, September 12, 2022, November 14, 2022, January 25, 2023 and March 3, 2023. Also, during the financial year 2022-23, 1 (one) Circular Resolution pursuant to Section 175 of the Act was passed on August 26, 2022.
The Audit Committee of your Company consists of all Independent Directors. The detailed composition of the Audit Committee is provided in the Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board.
DIRECTORS'' RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Act, in relation to the Audited Financial Statements of your Company for the financial year ended March 31, 2023, the Board of Directors hereby confirms that:
a. i n the preparation of the annual accounts for the financial year ended March 31, 2023, the applicable accounting standards read with the requirements set out under Schedule III to the Act have been followed and there were no material departures from the same;
b. your Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2023 and of the profit of your Company for the year ended on that date;
c. your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;
d. your Directors have prepared annual accounts of your Company on a going concern basis;
e. your Directors have laid down internal financial controls to be followed by your Company and that such internal financial controls are adequate and are operating effectively; and
f. your Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
PERFORMANCE EVALUATION
In accordance with the Act and Regulation 4(2)(f) of the Listing Regulations, your Company has framed a Policy for Evaluation of Performance of Independent Directors, Board, Committees and other Individual Directors which includes criteria for performance evaluation of Non-Executive Directors and Executive Directors. A questionnaire is formulated for evaluation of performance of the Board, its committees and individual Directors, after taking into consideration several aspects such as board composition, strategic orientation, board functioning and team dynamics.
An annual performance evaluation for the financial year 2021-22 was carried out by the Board of Directors and the Nomination, Remuneration and Compensation Committee at their respective meetings held on May 24, 2022. The questionnaires were circulated to the Board members and the Committee members of the Nomination, Remuneration and Compensation Committee at the time of performance evaluation conducted at their respective meetings. The Directors and the Committee members then filled-up the questionnaire and rated the Board, its Committees and individual Directors and duly filled questionnaires were handed over to the Company Secretary.
Performance evaluation of Independent Directors was conducted by the Board of Directors, excluding the Director being evaluated. The criteria for performance evaluation of Independent Directors laid down by the Nomination, Remuneration and Compensation Committee include ethics and values, knowledge and proficiency, diligence, behavioral traits, efforts for personal development and independence in decision making.
Similarly, performance evaluation of the Chairman and Non-Independent Directors was carried out by the Independent Directors of your Company at its separate meeting held on May 24, 2022. Your Directors also expressed their satisfaction with the evaluation process.
TRAINING OF INDEPENDENT DIRECTORS
All Independent Directors are familiarized with your Company, their roles, rights and responsibilities in your
Company, nature of the industry in which your Company operates, business model, strategy, operations and functions of your Company through its Executive Directors and Senior Managerial Personnel. The details of programs for familiarization of Independent Directors with your Company are available on the website of your Company at the link:
https://www.jyothylabs.com/investor/management-
policies-notices/#Management-Policies
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Based on the recommendation of the Nomination, Remuneration and Compensation Committee at its meeting held on March 28, 2022, the Board of Directors of your Company appointed Mr. Aditya Sapru (DIN -00501437) as an Additional Director designated as Independent Director of your Company with effect from March 28, 2022. Further, as per the requirement of Regulation 17(1 C) of the Listing Regulations your Company on May 8, 2022 has obtained approval of the shareholders of your Company through Postal Ballot under Section 110 of the Act for appointment of Mr. Aditya Sapru as an Independent Director of your Company for a consecutive term of 5 years commencing from March 28, 2022 to March 27, 2027 (both days inclusive). In the opinion of the Board, Mr. Sapru is a person of integrity and have about 3 decades of international experience in building growth frameworks and growth strategy for organizations to create long term stakeholder value.
The term of Ms. Bhumika Batra (DIN - 03502004), Independent Director will expire on March 13, 2024. Based on the recommendation of the Nomination, Remuneration and Compensation Committee at its meeting held on May 3, 2023, the Board of Directors of your Company approved the re-appointment of Ms. Bhumika Batra (DIN - 03502004) as Independent Director of your Company for a further consecutive period of 5 years commencing from March 14, 2024 upto March 13, 2029 (both days inclusive). In opinion of the Board Ms. Batra is a person of integrity and has the required expertise and experience (including the proficiency) for appointment as an independent director. Further as per the requirements of Section 149 of the Act and Regulation 17(1C) of the Listing Regulations, a resolution for the re-appointment of Ms. Bhumika Batra as Independent Director of your Company forms an integral part of the Notice of the ensuing 32nd Annual General Meeting (AGM).
In accordance with the provisions of Section 152 of the Act, Ms. M. R. Jyothy, Managing Director (DIN -00571828) of your Company retires by rotation at the
ensuing Annual General Meeting and being eligible, offers herself for re-appointment.
Apart from the aforesaid changes, there was no change in Directors and Key Managerial Personnel of your Company.
DECLARATION OF INDEPENDENT DIRECTORS
Pursuant to Section 134(3)(d) of the Act, your Company confirms having received necessary declarations from all the Independent Directors under Section 149(7) of the Act and Regulation 25(8) of the Listing Regulations declaring that they meet the criteria of independence laid down under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. All the Independent Directors of your Company have complied with the provisions of sub-rule (1) and (2) of Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014 by registering themselves under data bank of Independent Director for lifetime. Your Company has also formulated a Code of Conduct for Directors and Senior Management Personnel and has obtained declarations from all the Directors to the effect that they are in compliance with the Code.
MEETING OF INDEPENDENT DIRECTORS
Your Company''s Independent Directors meet at least once in every financial year without the presence of the Executive Directors or Management Personnel of your Company and the Meeting is conducted informally. During the year under review, one meeting of Independent Directors was held on May 24, 2022.
Your Company follows the policy on Nomination, Remuneration and Compensation of Directors, Key Managerial Personnel and other Employees as approved by the Nomination, Remuneration and Compensation Committee and the Board of Directors of your Company and the same has been uploaded on your Company''s website at https://www.jyothylabs.com/investor/
management-policies-notices/#Management-Policies Salient features of the said Policy is annexed to this report as "Annexure - B".
INSTANCES OF FRAUD, IF ANY, REPORTED BY THE AUDITORS
There have been no instances of any fraud reported by the Statutory Auditors under Section 143(12) of the Act.
Statutory Auditors and their Report
At the 31st Annual General Meeting held on July 25, 2022, M/s B S R & Co. LLP, Chartered Accountants (Firm Registration No.101248W/W-100022) were reappointed as the Statutory Auditors of your Company
for a second term of 5 years commencing from conclusion of the 31st Annual General Meeting till the conclusion of the 36th Annual General Meeting. Also, as per the Companies (Amendment) Act, 2017, provisions of Section 139 of the Act have been amended, wherein, the requirement of ratification of appointment of Statutory Auditors at every AGM has been done away with. Accordingly, appointment of M/s. B S R & Co. LLP, Chartered Accountants, (Firm Registration no.101248W/W-100022) as Statutory Auditors of your Company, will not be placed for ratification by the members in the ensuing Annual General Meeting
The Notes on financial statements referred to in the Auditors'' Report are self-explanatory and do not call for any further comments. The Auditors'' Report does not contain any qualification(s), reservation(s) or adverse remark(s).
Secretarial Auditors and their Report(s)
In terms of Section 204 of the Act, the Board of Directors of your Company on the recommendation of the Audit Committee have re-appointed M/s. Rathi & Associates, Practicing Company Secretaries, (Firm Registration No. P1988MH011900), Mumbai as the Secretarial Auditors of your Company to carry out Secretarial Audit for the financial year 2023-24. Your Company has obtained Secretarial Audit Report for the Financial Year 202223 in the prescribed Form MR-3 from M/s Rathi & Associates, Practicing Company Secretaries, which forms part of the Annual Report and is appended as "Annexure - C" to this Report. The report does not contain any qualification(s), reservation(s) or adverse remark(s) which calls for any explanation from your Board of Directors.
In addition to the above Secretarial Audit and pursuant to the requirements of Regulation 24A of the Listing Regulations M/s. Rathi & Associates, Practicing Company Secretaries have also issued to your Company, Annual Secretarial Compliance Report for the financial year 2022-23 confirming compliance of all laws, SEBI Regulations and circulars/ guidelines issued thereunder, applicable to your Company. The Annual Secretarial Compliance Report dated May 3, 2023 issued by M/s. Rathi & Associates, Practicing Company Secretaries has been submitted to the stock exchanges within 60 days from the financial year ended March 31, 2023.
Regulation 24A of the Listing Regulations requires the companies to annex to its Annual Report, a Secretarial Audit Report, given by a Company Secretary in practice, in the format prescribed by SEBI from time to time. However, pursuant to the provision of SEBI Circular
No. CIR/CFD/CMD1/27/2019 dated February 8, 2019 and in order to avoid duplication, SEBI has allowed companies to use the same Form No. MR-3 as required under the Act and the rules made thereunder for the purpose of compliance with Regulation 24A of the Listing Regulations as well. Accordingly, your Company in compliance with the said SEBI Circular has used the same Form No. MR-3 as prescribed under the Act and the rules made thereunder for the purpose of compliance with Regulation 24A of the Listing Regulations as well.
Cost Auditors and their Report
As per Section 148 of the Act read with the Companies (Cost Records and Audits) Rules, 2014, as amended, the Board of Directors of your Company on recommendation of the Audit Committee have reappointed M/s. R. Nanabhoy & Co., Cost Accountants, Mumbai (Registration No. 000010) as the Cost Auditors to carry out the cost audit of its products covered under the Ministry of Corporate Affairs Order dated June 30, 2014 (as amended on December 31, 2014) for the financial year 2022-23. The remuneration of Cost Auditors has been approved by the Board of Directors on the recommendation of the Audit Committee and the requisite resolution for ratification of remuneration of Cost Auditors by the members has been set out in the Notice convening the 32nd Annual General Meeting of your Company.
The re-appointment of M/s. R. Nanabhoy & Co., Cost Accountants, Mumbai as the Cost Auditors of your Company is within the prescribed limits of the Act and free from any disqualifications specified thereunder. Your Company has received the Certificate from the Cost Auditors confirming their independence and relationship on arm''s length basis.
The Cost Audit Report for the financial year ended March 31, 2022, issued by M/s. R. Nanabhoy & Co., Cost Auditors, in respect of the various products prescribed under Cost Audit Rules does not contain any qualification(s), reservation(s) or adverse remark(s) and the same was filed with the Ministry of Corporate Affairs on August 2, 2022. The Cost Audit Report for the financial year ended March 31, 2023 will be filed with the Ministry of Corporate Affairs within the prescribed statutory time limit.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The details of Loans, Guarantees and Investments as prescribed under Section 186 of the Act are appended as "Annexure - D" and forms integral part of this Report.
RELATED PARTY TRANSACTIONS
Pursuant to Section 134 of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Act, in the prescribed Form AOC-2 is appended as "Annexure - E" to this Report. During the year under Review, your Company had entered into contract(s)/arrangement(s)/transaction(s) with related parties which were in ordinary course of business and on arm''s length basis and none of which could be considered as material in accordance with the policy of your Company on materiality of related party transactions. Further, none of the contract(s)/ arrangement(s)/transaction(s) with related parties required approval of members as the same were within the limits prescribed under Section 188(1) of the Act and the Rules framed thereunder read with the provisions of Regulation 23(4) of the Listing Regulations.
The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed from your Company''s website at the link:
https://www.jyothylabs.com/investor/management-
policies-notices/#Management-Policies
Attention of Members is also drawn to Note 32 to the financial statements for the year ended March 31, 2023 which sets out the related party disclosures as per the Indian Accounting Standard (Ind AS) 24.
STATE OF THE COMPANY''S AFFAIRS (MANAGEMENT DISCUSSION AND ANALYSIS)
In terms of the provisions of Regulation 34(2) of the Listing Regulations, the Management Discussion and Analysis Report of your Company''s affairs for the year under review is attached and forms an integral part of this Annual Report.
TRANSFER TO RESERVES
Your Company did not transfer any sum to the General Reserve or to the Debenture Redemption Reserve for the Financial Year under review.
MATERIAL CHANGES AND COMMITMENTS
Except as disclosed elsewhere in this report, no material changes and commitments which could affect your Company''s financial position have occurred between the end of the financial year 2022-23 and to the date of this Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars relating to conservation of energy, technology absorption, foreign exchange earnings
and outgo, as required to be disclosed under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 are annexed herewith as "Annexure - F" to this Report.
The Board of Directors of your Company on March 14, 2019, constituted the Risk Management Committee. Further, the Board of Directors at their meeting held on July 29, 2021 appointed Mr. Nilesh B. Mehta, Independent Director as the Chairman of the Risk Management Committee.
Accordingly, the Risk Management Committee comprises of the following Directors/Executives of your Company as Members of the Committee as on March 31, 2023:
1. Mr. Nilesh B. Mehta, Independent Director -Chairman;
2. Ms. M. R. Jyothy, Managing Director- Member;
3. Ms. M. R. Deepthi, Whole-time Director - Member;
4. Mr. T. Ananth Rao, Head - Operations & Commercial - Member; and
5. Mr. Ravi Razdan, Head - Systems & HR- Member.
The Risk Management Committee has been entrusted with the powers such as monitoring and reviewing of the risk management plans/policies; appointing various functionaries; deciding the role and responsibilities of various functionaries; evaluating risk including cyber risk to your Company as a whole and also control measures/ security; such other powers as may be delegated by the Board of Directors from time to time. The Risk Management Committee of your Company met twice during the Financial Year 2022-23 i.e. on August 29, 2022 and February 22, 2023. Mr. Nilesh B. Mehta was appointed as the Chairperson to chair the said meetings of the Risk Management Committee.
The Board of Directors of your Company has designed a Risk Management Policy in a structured manner taking into consideration the following factors and the same is being monitored on a periodic basis by your Company:
1. The Management Approach;
2. Vision & Mission;
3. Key Business Goals;
4. Risk Library; and
5. Risk Management Focus.
Also, the Management has adopted the following 5 step approach keeping in view your Company''s Vision and Mission:
1. Identifying ''Key'' Business goals;
2. Identifying the Risk Management focus;
3. Identifying Business risks;
4. Prioritizing the identified business risks; and
5. Rating the current risk management capability for identified risks.
Further, your Company has identified Key Business Goals for a five year horizon and a library of risk events which could be bottleneck in achieving the same. After defining the key business goals and the library of risk events, your Company identified the goals on which the management would focus.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Company has been a firm believer that each and every individual including an artificial person owe something to the society at large. Mr. M. P. Ramachandran Chairman Emeritus of your Company even before the inception of Corporate Social Responsibility provisions under the Act, has been involved in charitable and social activities in his individual capacity.
Your Company for the financial year 2022-23 was required to spend an amount of '' 381.83 Lacs (2% of the average net profits of last three financial years) towards Corporate Social Responsibility (CSR) activities. However, your Company for the financial year 202223 has spent an aggregate amount of '' 381.95 Lacs towards the CSR activities mentioned in the Annual Action Plan of the Company for the financial year 202223, approved by the Board of Directors. Further, the unspent CSR amount for the Financial Year 2021-22 of '' 126.00 Lacs towards your Company''s ongoing project has also been spent during the current financial year.
The Annual Report on CSR activities that includes details about brief outline on CSR Policy developed and implemented by your Company, Composition of CSR Committee and CSR initiatives taken during the financial year 2022-23 in accordance with Section 135 of the Act and other details required to be disclosed as per the latest format prescribed under the Companies (Corporate Social Responsibility Policy) Rules, 2014 as amended from time to time is annexed herewith as "Annexure - G" to this Report.
Details about the CSR Policy adopted and formulated by your Company can be accessed from your Company''s website at the link:
https://www.jyothylabs.com/investor/management-
policies-notices/#Management-Policies
The Annual action plan for the financial year 2023-24 as recommended by the Corporate Social Responsibility
Committee and approved by the Board of Directors of your Company at their respective Meetings held on May 3, 2023 has also been uploaded on your Company''s website at the link:
https://www.jyothylabs.com/wp-content/uploads/2023/05/
CSR-Annual-Action-Plan-for-FY-2023-24.pdf
During the year under review, there was no change in the nature of business of your Company.
PERFORMANCE OF SUBSIDIARIES, ASSOCIATE COMPANIES/JOINT VENTURES
A statement containing the salient features of the financial statements of your Company''s subsidiaries, Associates and Joint Venture Companies in the prescribed format AOC-1 is presented in separate section forming part of the financial statements and hence not repeated here in this Report for the sake of brevity. Policy for determining material subsidiaries, formulated and adopted by your Company can be accessed from your Company''s website at the link:
https://www.jyothylabs.com/investor/management-
policies-notices/#Management-Policies
During the year under review, Jyothy Fabricare Services Limited (JFSL), a wholly owned subsidiary of your Company was amalgamated with your Company pursuant to approval of the Scheme of Amalgamation of Jyothy Fabricare Services Limited (Transferor Company) with Jyothy Labs Limited (Transferee Company) by the Hon''ble National Company Law Tribunal (NCLT), Mumbai Bench vide its Order dated February 24, 2023.
Pursuant to approval of the Scheme of Amalgamation by the NCLT, the JFSL-JLL (JV) was also dissolved with effect from March 31, 2023.
Except as mentioned above, no Company has become or ceased to be your Company''s subsidiary, Joint venture or associate company during the financial year 2022-23.
Your Company did not accept/renew any fixed deposits from public and no fixed deposits were outstanding or remained unclaimed as on March 31, 2023.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by any Regulator/Court that would impact the going concern status of your Company and its future operations.
The Internal Financial Controls adopted and followed by your Company are adequate and are operating effectively. Your Company has adopted a dynamic Internal Financial Controls framework based on the best practices followed in the industry. Under the said framework, Risk and Control Matrix are defined for the following process(es):-
1. Fixed Assets;
2. Financial Statement Closing Process;
3. Information Technology;
4. Inventory Management;
5. Marketing and Advertising;
6. Payroll;
7. Production Process;
8. Taxation; and
9. Treasury.
M/s. MGB & Co LLP have been entrusted with the responsibility of testing the controls identified and implemented by your Company for all the aforesaid processes.
During the year under review, no material or serious observations have been received from the Internal Auditors of your Company regarding inefficiency or inadequacy of such controls.
The consolidated financial statements of your Company are prepared in accordance with the relevant Indian Accounting Standards issued by the Central Government under Section 133 of the Act and forms integral part of the Annual Report.
The report on Corporate Governance as stipulated under Regulation 34(3) read with Schedule V of the Listing Regulations together with the Certificate received from M/s. Rathi & Associates, Practicing Company Secretaries, confirming compliance of Corporate Governance requirements is attached and forms an integral part of this Annual Report.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)
The Securities and Exchange Board of India (SEBI), vide notification dated May 5, 2021 amended Regulation 34(2)(f) of the Listing Regulations prescribing that with effect from the financial year 2022-23, the top 1000 listed entities based on market capitalization shall submit a business responsibility and sustainability report in the format as specified by SEBI.
Your Company being one of the top 1000 listed companies is required to report on Business Responsibility. Accordingly, the BRSR forms an integral part of this Annual Report.
COMPLIANCE WITH SECRETARIAL STANDARDS
During the year under review, your Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.
REMUNERATION/COMMISSION FROM ANY OF ITS SUBSIDIARIES
During the year under review, neither the Managing Directors nor the Whole-time Director of your Company received any remuneration or commission from any of its subsidiaries.
EMPLOYEE STOCK OPTION SCHEME (ESOS)
During the financial year under review, no options were granted, vested or exercised and hence, the disclosure as required under Section 62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 and Regulation 14 of the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 is not required to be furnished.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
Your Company has a Vigil Mechanism in place which includes a Whistle Blower Policy in terms of the Listing Regulations for Directors and Employees of your Company to provide a mechanism which ensures adequate safeguards to Employees and Directors from any victimization on raising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any financial statements and reports etc.
The Vigil Mechanism/Whistle Blower Policy of your Company can be accessed from your Company''s website at the link:
https://www.jyothylabs.com/investor/management-
policies-notices/#Management-Policies
Your Company has put in place a mechanism in consonance with the requirements of Section 177 of the Act and Regulation 18(3) of the Listing Regulations for the Directors, employees and other stakeholders to report genuine concerns about unethical behavior, actual or suspected fraud or violation of the Code of Conduct or policy framed by your Company. All Protected Disclosures can be reported by the Whistle Blower in writing or though call on the following
number i.e. 18601232120 or Hotline number i.e. 022-66892804 or alternatively, the same can also be sent through email on [email protected] with the subject "Protected disclosure under the Whistle Blower Policy".
The Whistle Blowers have a right/option to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Codes of Conduct or policy directly to the Chairman of the Audit Committee. During the year under review, no protected disclosure from any Whistle Blower was received by the designated officer under the Vigil Mechanism.
INTERNAL CONTROL SYSTEMS
Your Company has adequate internal control systems and procedures in place for effective and smooth conduct of business and to meet exigencies of operation and growth. Your Company has set up Standard Operating Process (SOP), procedures and controls apart from regular Internal Audits. Roles and responsibilities have been laid down for each process owners. Management Information System has been established which ensures that adequate and accurate information is available for reporting and decision making.
Internal Audit is conducted by an independent firm of Chartered Accountants viz. M/s. Mahajan & Aibara Chartered Accountants, LLP. Internal Auditors regularly check the adequacy of the system, their observations are reviewed by the management and remedial measures, as necessary, are taken. Internal Auditors report directly to the Chairman of the Audit Committee to maintain its objectivity and independence.
Your Company has also implemented a Compliance Tool software mechanism viz. "Legatrix" designed by Legasis Services Private Limited which ensures compliance with the provisions of all applicable laws to your Company adequately and effectively.
TRANSFERS TO INVESTOR EDUCATION AND PROTECTION FUND
Transfer of Equity Shares:
Pursuant to the provisions of Section 124(6) of the Act and the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, all the equity shares of any Company in respect of which dividend amounts have not been paid or claimed by the shareholders for seven consecutive years or more are required to be transferred to demat account of the Investor Education and Protection Fund Authority (IEPF Account).
Accordingly, 5431 shares of 115 members of your Company were transferred to Demat Account of IEPF
Authority on September 30, 2022. Your Company had sent individual notice to all the aforesaid members and has also published the notice in the leading English and Marathi newspapers. The details of the aforesaid members are available on website of your Company i.e. wwwjyothylabs.com.
Transfer of Unpaid/Unclaimed Dividend:
Further, pursuant to the provisions of Section 124(5) of the Act, the dividend which remained unclaimed/ unpaid for a period of seven years from the date of transfer to unpaid dividend account is required to be transferred to the Investor Education and Protection Fund (IEPF) established by the Central Government.
As a result, the unclaimed/unpaid dividend pertaining to the financial year 2014-15 which remained unpaid and unclaimed for a period of 7 years has been transferred by your Company to the IEPF.
Your Company has uploaded the details of unclaimed/ unpaid dividend for the financial year 2014-15 onwards on its website i.e. www.jyothylabs.com and on website of the Ministry of Corporate Affairs i.e. www.mca.gov.in and the same gets revised/updated from time to time pursuant to the provisions of IEPF (Uploading of Information Regarding Unpaid and Unclaimed Amount Lying with Companies) Rules, 2012.
Further, the unpaid interim and final dividend amount pertaining to the financial year 2015-16 will be transferred to IEPF during the Financial Year 2023-24.
Your Company has always provided a congenial atmosphere for work to all its employees that is free from discrimination and harassment. Employee relations remained cordial during the year under review.
Your Company has 23 state-of-the-art facilities at all of its manufacturing locations spread across India. Furthermore, five manufacturing plants of your Company situated at Roorkee, Wayanad, Jammu, Pithampur and Puducherry are ISO 9001-2015 certified.
PREVENTION OF SEXUAL HARASSMENT
Your Company has framed ''Anti - Sexual Harassment Policy'' at workplace and has constituted an Internal Complaints Committee (ICC) as per the requirement of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed thereunder. No complaints with allegations of any sexual harassment were reported during the year under review.
PARTICULARS OF EMPLOYEES
The disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended and forming part of the Directors'' Report for the year ended March 31, 2023 is annexed herewith as "Annexure - H " to this Report.
DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016)
Your Company filed an application before the Hon''ble National Company Law Tribunal, Chennai Bench (NCLT) as a financial creditor to initiate corporate insolvency resolution process under Section 7 read with Chapter II of Part II/ Under Chapter IV of Part II of the Insolvency and Bankruptcy Code, 2016 (Code) against Abhiraami Chemicals Limited (ACL) and the Hon''ble NCLT admitted the application vide order dated October 04, 2021.
In view of the fact that ACL does not have any business operations since the Financial Year 2015-16, the Committee of Creditors (CoC) vide its meeting held on November 26, 2021 recommended and approved Liquidation of ACL. Subsequently, the Resolution Professional filed an application for initiation of Liquidation before the Hon''ble NCLT and the Hon''ble NCLT vide its order dated September 19, 2022 has allowed for Liquidation of ACL and appointed the Resolution Professional as the Liquidator in this matter. ACL is currently under Liquidation process.
Also, based on the application filed by your Company under Section 9 of the Act read with Rule 6 of the Code before the Hon''ble National Company Law Tribunal, Chennai Bench (NCLT) as the Financial Creditor to initiate corporate insolvency resolution process against Khadyota Kishan Foundation (KRDC), the Hon''ble NCLT was pleased to admit the Application of your Company vide its order dated November 9, 2022. Thereafter, the Committee of Creditors (CoC) vide its meeting held on February 10, 2023 approved and resolved liquidation of KRDC and filed an application to commence liquidation process which is pending hearing before the Hon''ble NCLT.
CAUTIONARY NOTE
Certain statements in the "Management Discussion and Analysis" section may be ''forward-looking''. Such ''forward looking'' statements are subject to risks and uncertainties and therefore actual results could be different from what your Directors envisage in terms of future performance and outlook.
ACKNOWLEDGEMENT
Your Directors express their sincere appreciation for the contribution and commitment of the employees of your Company at all levels and for the excellent support provided by the members, customers, distributors, suppliers, bankers, media and other stakeholders, during the financial year under review. Your Company looks forward to continued and unstinted support in its endeavor to make lives of consumers better by providing world class products at affordable price.
Mar 31, 2022
It is our pleasure to present to you the 31st Annual Report of your Company together with the Audited Financial Statements for the Financial Year ended March 31, 2022.
Your Company''s financial performance on standalone basis for the Financial Year ended March 31, 2022 compared with previous Financial Year is summarised below:
('' in Lacs) |
||
Financial Results |
Financial Year ended March 31 2022 |
Financial Year ended March 31 2021 |
Revenue from Operations |
2,16,626.57 |
1,88,499.87 |
Earnings before interest, tax, depreciation and amortization |
24,945.78 |
31,673.20 |
Finance Cost |
668.66 |
1,172.38 |
Other Income |
1,895.80 |
1,981.57 |
Depreciation on Tangible Assets |
3,061.83 |
3,098.43 |
Amortization of Intangible Assets |
3,132.96 |
3,134.68 |
Depreciation of right of use assets |
1,657.38 |
1,557.79 |
Profit before exceptional item and tax |
18,320.75 |
24,691.49 |
Exceptional items |
Nil |
2,350.41 |
Profit before tax |
18,320.75 |
22,341.08 |
Provision for tax |
||
- Current tax |
3,207.00 |
3,742.00 |
- Deferred Tax Charge/ (Credit) |
(499.16) |
(427.10) |
Profit after tax |
15,612.91 |
19,026.18 |
Earning Per Share (Basic) (In '') |
4.25 |
5.18 |
Earning Per Share (Diluted) (In '') |
4.25 |
5.18 |
Dividend Per Share of face value of '' 1/- (In '') |
2.50 |
4.00 |
The abovementioned financial performance highlights are an abstract of the Financial Statements of your Company for the Financial Year 2021-22. The detailed Financial Statements of your Company forms part of this Annual Report and are also uploaded on the website of your Company i.e. www.jyothylabs.com.
The Revenue from operations on standalone basis of your Company for the Financial Year 2021-22 was up by 14.92% and stood at '' 2,16,626.57 Lacs compared to '' 1,88,499.87 Lacs in the previous financial year. The net profit for the financial year 2021-22 amounted to '' 15,612.91 Lacs.
The consolidated revenue from operations of your Company for the financial year under review stood at '' 2,19,648.88 Lacs as against '' 1,90,912.02 Lacs in the previous year, reporting a growth of 15.05%. The consolidated profit after tax for the financial year under review stood at '' 15,913.03 Lacs against '' 19,065.15 Lacs in the previous financial year.
As the COVID-19 pandemic continues and sudden spread of second wave of Corona Virus all over India, the Government of various States including the Central Government had issued various norms and directives. Also, there were partial or complete Lock-down enforced
by various State Government(s) depending upon the situation in the respective States during the first half of the Financial Year 2021 -22. Further to curb the spread of the COVID-19, the Government in many States had declared closure of departmental stores, schools, colleges, malls, theaters, etc. Since the overall economy was hit because of the sudden outbreak of COVID - 19, it impacted the overall business of your Company, in the First half of the Financial Year.
However, in the second half of the Financial Year 2021 -22 the Government relaxed some restrictions as there were reduction in the number of COVID cases and in turn, the impact of COVID-19 reduced on the overall business of your Company. Further, in accordance with the Government policies, your Company has also started getting back to normal and physical presence of Employees at offices/factories has been allowed.
Your Board is pleased to recommend for your consideration, a dividend of '' 2.50 (Rupees Two and Fifty Paisa only) per equity share of '' 1/- each for the financial year 2021-22. The aforesaid dividend will involve a total payout of '' 9,180.22 Lacs and is subject to the approval of Members at the ensuing Annual General Meeting of your Company. The proposed dividend payout is in accordance with your Company''s Dividend Distribution Policy.
In accordance with the provisions of the Income Tax Act, 1961 as amended by and read with the provisions of the Finance Act, 2020, with effect from April 1, 2020, dividend declared and paid by any Company is taxable in the hands of shareholders. Your Company shall, therefore, be required to regulate deduction of tax at source (TDS) at the time of payment of dividend in accordance with the provisions of the Income Tax Act, 1961 read with the Finance Act, 2020 and at the applicable rates of taxes. The TDS rate may vary depending upon the residential status of the shareholder and the documents submitted to your Company.
Your Company will also be sending communication to the shareholders informing them to submit the necessary documents to enable your Company to calculate the amount of tax required to be deducted from the proposed dividend in respect of each eligible shareholders. The aforesaid communication will be sent to those shareholders whose name appears in the Register of Member as on June 10, 2022 via email to those shareholders who have registered their email id with your Company.
During the previous financial year, your Company had paid a final dividend of '' 4/- (Rupees Four only) per equity share of '' 1/- each for the Financial Year 202021. The aforesaid dividend involved a total payout of '' 14,688.35 Lacs.
The Board of Directors of your Company had approved and adopted a policy on Dividend Distribution formulated in accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the Listing Regulations) and the dividend is recommended in accordance with the said policy.
The SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2021 has allowed the companies to provide web-link of Dividend Distribution Policy instead of attaching it along with the Annual Report. However, for the easy accessibility of the shareholders, your Company has annexed to this report its Dividend Distribution Policy as "Annexure - A" and has also uploaded the same on your Company''s website at the link:
https://www.jyothylabs.com/investor/management-
policies-notices/#Management-Policies
a) Issue of Equity Shares with differential rights
During the year under review and to date, your Company has not issued any shares with differential rights, hence no information prescribed under the provisions of Section 43(a)(ii) of the Companies Act,
2013 (the Act) read with Rule 4(4) of the Companies (Share Capital & Debentures) Rules, 2014 has been furnished.
b) Issue of Sweat Equity Shares
During the year under review and to date, your Company has not issued any sweat equity shares. Hence no information as per the provisions of Section 54(1 )(d) of the Act read with Rule 8(13) of the Companies (Share Capital & Debentures) Rules,
2014 is furnished.
c) Issue of Employee Stock Option
During the year under review and to date, your Company has not issued any Employee Stock Option, hence no information is furnished.
The Authorised Share Capital of your Company is '' 2,72,30,00,000/- consisting of: (a) 2,72,00,00,000 Equity Shares of the Face Value of '' 1/- each and (b) 30,000,
by various State Government(s) depending upon the situation in the respective States during the first half of the Financial Year 2021 -22. Further to curb the spread of the COVID-19, the Government in many States had declared closure of departmental stores, schools, colleges, malls, theaters, etc. Since the overall economy was hit because of the sudden outbreak of COVID - 19, it impacted the overall business of your Company, in the First half of the Financial Year.
However, in the second half of the Financial Year 2021 -22 the Government relaxed some restrictions as there were reduction in the number of COVID cases and in turn, the impact of COVID-19 reduced on the overall business of your Company. Further, in accordance with the Government policies, your Company has also started getting back to normal and physical presence of Employees at offices/factories has been allowed.
Your Board is pleased to recommend for your consideration, a dividend of '' 2.50 (Rupees Two and Fifty Paisa only) per equity share of '' 1/- each for the financial year 2021-22. The aforesaid dividend will involve a total payout of '' 9,180.22 Lacs and is subject to the approval of Members at the ensuing Annual General Meeting of your Company. The proposed dividend payout is in accordance with your Company''s Dividend Distribution Policy.
In accordance with the provisions of the Income Tax Act, 1961 as amended by and read with the provisions of the Finance Act, 2020, with effect from April 1, 2020, dividend declared and paid by any Company is taxable in the hands of shareholders. Your Company shall, therefore, be required to regulate deduction of tax at source (TDS) at the time of payment of dividend in accordance with the provisions of the Income Tax Act, 1961 read with the Finance Act, 2020 and at the applicable rates of taxes. The TDS rate may vary depending upon the residential status of the shareholder and the documents submitted to your Company.
Your Company will also be sending communication to the shareholders informing them to submit the necessary documents to enable your Company to calculate the amount of tax required to be deducted from the proposed dividend in respect of each eligible shareholders. The aforesaid communication will be sent to those shareholders whose name appears in the Register of Member as on June 10, 2022 via email to those shareholders who have registered their email id with your Company.
During the previous financial year, your Company had paid a final dividend of '' 4/- (Rupees Four only) per equity share of '' 1/- each for the Financial Year 202021. The aforesaid dividend involved a total payout of '' 14,688.35 Lacs.
The Board of Directors of your Company had approved and adopted a policy on Dividend Distribution formulated in accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the Listing Regulations) and the dividend is recommended in accordance with the said policy.
The SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2021 has allowed the companies to provide web-link of Dividend Distribution Policy instead of attaching it along with the Annual Report. However, for the easy accessibility of the shareholders, your Company has annexed to this report its Dividend Distribution Policy as "Annexure - A" and has also uploaded the same on your Company''s website at the link:
https://www.jyothylabs.com/investor/management-
policies-notices/#Management-Policies
a) Issue of Equity Shares with differential rights
During the year under review and to date, your Company has not issued any shares with differential rights, hence no information prescribed under the provisions of Section 43(a)(ii) of the Companies Act,
2013 (the Act) read with Rule 4(4) of the Companies (Share Capital & Debentures) Rules, 2014 has been furnished.
b) Issue of Sweat Equity Shares
During the year under review and to date, your Company has not issued any sweat equity shares. Hence no information as per the provisions of Section 54(1 )(d) of the Act read with Rule 8(13) of the Companies (Share Capital & Debentures) Rules,
2014 is furnished.
c) Issue of Employee Stock Option
During the year under review and to date, your Company has not issued any Employee Stock Option, hence no information is furnished.
The Authorised Share Capital of your Company is '' 2,72,30,00,000/- consisting of: (a) 2,72,00,00,000 Equity Shares of the Face Value of '' 1/- each and (b) 30,000,
11% Cumulative Redeemable Preference Shares of the Face Value of '' 100/- each. The paid-up Equity Share Capital of your Company as on March 31, 2022 stood at '' 36,72,08,644/- consisting of 36,72,08,644 Equity Shares of the Face Value of '' 1/- each. Further, as on March 31, 2022, none of the Directors of your Company holds instruments convertible into equity shares of your Company.
DEBENTURES
During the Financial Year under review, your Company did not issue any Debentures in terms of Section 42 of the Act read with Rule 14 of the Companies (Prospectus and Allotment) Rules, 2014 and no debentures were redeemed during the Financial Year 2021-22.
ANNUAL RETURN
Pursuant to Section 134 (3) (a) of the Act, the draft annual return for Financial Year 2021-22 prepared in accordance with Section 92(3) of the Act is made available on the website of the Company i.e. https://www.jyothylabs.com/ investor/annual-report-2/#annual-report
NUMBER OF MEETINGS OF THE BOARD
Your Company''s Board of Directors met 5 (five) times during the financial year ended March 31, 2022 in accordance with the provisions of the Act and the Rules made thereunder. Except for the Board and the Committee Meetings held on March 28, 2022, which was held physically, all the other Board and Committee Meetings during Financial Year 2021-22 were held through video conferencing in compliance with the provisions of Section 173 of the Act, read with Rule 3 of the Companies (Meetings of Board and its Powers) Rules, 2014, as amended.
The meetings were held on May 18, 2021, July 29, 2021, November 2, 2021, January 21, 2022 and March 28, 2022. Also, during the financial year 2021-22, 1 (one) Circular Resolution pursuant to Section 175 of the Act, was passed on December 13, 2021.
AUDIT COMMITTEE
The Audit Committee of your Company consists of all Independent Directors. The detailed composition of the Audit Committee is provided in the Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board.
DIRECTORS'' RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Act, in relation to the Audited Financial Statements of your Company for the financial year ended March 31, 2022, the Board of Directors hereby confirms that:
a. in the preparation of the annual accounts for the financial year ended March 31, 2022, the applicable accounting standards read with the requirements set out under Schedule III to the Act have been followed and there were no material departures from the same;
b. your Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2022 and of the profit of your Company for the year ended on that date;
c. your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;
d. your Directors have prepared annual accounts of your Company on a going concern basis;
e. your Directors have laid down internal financial controls to be followed by your Company and that such internal financial controls are adequate and are operating effectively; and
f. your Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
In accordance with the Act and Regulation 4(2)(f) of the Listing Regulations, your Company has framed a Policy for Evaluation of Performance of Independent Directors, Board, Committees and other Individual Directors which includes criteria for performance evaluation of Non-Executive Directors and Executive Directors. A questionnaire is formulated for evaluation of performance of the Board, its committees and individual Directors, after taking into consideration several aspects such as board composition, strategic orientation, board functioning and team dynamics.
An annual performance evaluation for the financial year 2020-21 was carried out by the Board of Directors and the Nomination, Remuneration and Compensation Committee at their respective meetings held on May 18, 2021. The questionnaires were circulated to the Board
members and the Committee members of the Nomination, Remuneration and Compensation Committee at the time of performance evaluation conducted at their respective meetings. The Directors and the Committee members then filled-up the questionnaire and rated the Board, its Committees and individual Directors and duly filled questionnaires were handed over to the Company Secretary.
Performance evaluation of Independent Directors was conducted by the Board of Directors, excluding the Director being evaluated. The criteria for performance evaluation of Independent Directors laid down by the Nomination, Remuneration and Compensation Committee include ethics and values, knowledge and proficiency, diligence, behavioral traits, efforts for personal development and independence in decision making.
Similarly, performance evaluation of the Chairman and Non-Independent Directors was carried out by the Independent Directors of your Company at its separate meeting held on May 17, 2021. Your Directors also expressed their satisfaction with the evaluation process.
TRAINING OF INDEPENDENT DIRECTORS
All Independent Directors are familiarized with your Company, their roles, rights and responsibilities in your Company, nature of the industry in which your Company operates, business model, strategy, operations and functions of your Company through its Executive Directors and Senior Managerial Personnel. The details of programs for familiarization of Independent Directors with your Company are available on the website of your Company at the link:
https://www.jyothylabs.com/investor/management-
policies-notices/#Management-Policies
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under consideration Mr. K Ullas Kamath ceased to be the Joint Managing Director, member of the Board of Directors and its Committees thereof with effect from the closing hours of January 22, 2022.
Based on the recommendation of the Nomination, Remuneration and Compensation Committee at its meeting held on March 28, 2022, the Board of Directors of your Company appointed Mr. Aditya Sapru (DIN - 00501437) as an Additional Director designated as Independent Director of your Company with effect from March 28, 2022. In the opinion of the Board, Mr. Sapru is a person of integrity and have about 3 decades of international experience in building growth frameworks and growth strategy for organizations to create long
term stakeholder value. Further, as per the requirement of Regulation 17(1 C) of the Listing Regulations, your Company on May 8, 2022 has obtained approval of the shareholders of your Company through Postal Ballot under Section 110 of the Act for appointment of Mr. Aditya Sapru as an Independent Director of your Company for a consecutive term of 5 years commencing from March 28, 2022 to March 27, 2027 (both days inclusive).
In accordance with the provisions of Section 152 of the Act, Ms. M. R. Deepthi, Whole Time Director (DIN -01746698) of your Company retires by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re-appointment.
Apart from the aforesaid changes, there was no change in Directors and Key Managerial Personnel of your Company.
DECLARATION OF INDEPENDENT DIRECTORS
Pursuant to Section 134(3)(d) of the Act, your Company confirms having received necessary declarations from all the Independent Directors under Section 149(7) of the Act and Regulation 25(8) of the Listing Regulations declaring that they meet the criteria of independence laid down under Section 149(6) of the Act and Regulation 16(1 )(b) of the Listing Regulations. All the Independent Directors of your Company have complied with the provisions of subrule (1) and (2) of Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014 by registering themselves under data bank of Independent Director for lifetime. Your Company has also formulated a Code of Conduct for Directors and Senior Management Personnel and has obtained declarations from all the Directors to the effect that they are in compliance with the Code.
MEETING OF INDEPENDENT DIRECTORS
Your Company''s Independent Directors meet at least once in every financial year without the presence of the Executive Directors or Management Personnel of your Company and the Meeting is conducted informally. During the year under review, one meeting of Independent Directors was held on May 17, 2021.
Your Company follows the policy on Nomination, Remuneration and Compensation of Directors, Key Managerial Personnel and other Employees as approved by the Nomination, Remuneration and Compensation Committee and the Board of Directors of your Company and the same has been uploaded on your Company''s website at https://www.iyothylabs.com/investor/ management-policies-notices/#Management-Policies Salient features of the said Policy is annexed to this report as "Annexure - B".
INSTANCES OF FRAUD, IF ANY, REPORTED BY THE AUDITORS
There have been no instances of any fraud reported by the Statutory Auditors under Section 143(12) of the Act.
AUDITORS & AUDIT REPORTS
Statutory Auditors and their Report
At the 26th Annual General Meeting held on July 11, 2017, M/s. B S R & Co. LLP, Chartered Accountants, (Firm Registration No.101248W/W-100022) were appointed as the Statutory Auditors of your Company to hold office for a term of 5 years commencing from the conclusion of 26th Annual General Meeting till the conclusion of 31st Annual General Meeting subject to ratification by Members in each Annual General Meeting. However, as per the Companies (Amendment) Act, 2017, provisions of Section 139 of the Act have been amended, wherein, the requirement of ratification of appointment of Statutory Auditors at every AGM has been done away with. The re-appointment of the existing Statutory Auditors is due in the ensuing Annual General Meeting. Accordingly, the Audit Committee and the Board of Directors of your Company during their respective meetings held on May 24, 2022 have considered and approved the re-appointment of M/s. B S R & Co. LLP, Chartered Accountants, (Firm Registration No.101248W/W-100022) as the Statutory Auditors of your Company, for further period of 5 years i.e. from the conclusion of the 31st Annual General Meeting until the conclusion of the 36th Annual General Meeting of your Company to be held in the year 2027. The item for re-appointment of M/s. B S R & Co. LLP, Chartered Accountants, (Firm Registration No.101248W/W-100022) as the Statutory Auditors for second term of 5 years has been included in the Notice of the ensuing Annual General Meeting for consideration and approval of Members.
M/s. B S R & Co. LLP, Chartered Accountants, (Firm Registration No.101248W/W-100022) have given their consent for the proposed re-appointment as Statutory Auditors of your Company from the conclusion of the ensuing Annual General Meeting till the conclusion of 36th Annual General Meeting of your Company to be held in the year 2027. They have further confirmed that the said re-appointment, if made, would be within the prescribed limits under Section 141 (3)(g) of the Act and that they are not disqualified for re-appointment.
The Notes on financial statements referred to in the Auditors'' Report are self-explanatory and do not call for any further comments. The Auditors'' Report does not contain any qualification(s), reservation(s) or adverse remark(s).
Secretarial Auditors and their Report(s)
In terms of Section 204 of the Act, the Board of Directors of your Company on the recommendation of the Audit Committee have re-appointed M/s. Rathi & Associates, Practicing Company Secretaries, Mumbai as the Secretarial Auditors of your Company to carry out Secretarial Audit for the financial year 2022-23. Your Company has obtained Secretarial Audit Report for the Financial Year 2021 -22 in the prescribed Form MR-3 from M/s Rathi & Associates, Practicing Company Secretaries, which forms part of the Annual Report and is appended as "Annexure - C" to this Report. The report does not contain any qualification(s), reservation(s) or adverse remark(s) which calls for any explanation from your Board of Directors.
In addition to the above Secretarial Audit and pursuant to the requirements of the SEBI Circular No. CIR/CFD/ CMD1/27/2019 dated February 8, 2019, M/s. Rathi & Associates, Practicing Company Secretaries have also issued to your Company Annual Secretarial Compliance Report for the financial year 2021-22 confirming compliance of all laws, SEBI Regulations and circulars/ guidelines issued thereunder, applicable to your Company. The Annual Secretarial Compliance Report dated May 24, 2022 issued by M/s. Rathi & Associates, Practicing Company Secretaries has been submitted to the stock exchanges within 60 days from the financial year ended March 31, 2022.
Regulation 24A of the Listing Regulations requires the companies to annex to its Annual Report, a Secretarial Audit Report, given by a Company Secretary in practice, in the format prescribed by SEBI from time to time. However, pursuant to the provision of SEBI Circular No. CIR/CFD/ CMD1/27/2019 dated February 8, 2019 and in order to avoid duplication, SEBI has allowed companies to use the same Form No. MR-3 as required under the Act and the rules made thereunder for the purpose of compliance with Regulation 24A of the Listing Regulations as well. Accordingly, your Company in compliance with the said SEBI Circular has used the same Form No. MR-3 as prescribed under the Act and the rules made thereunder for the purpose of compliance with Regulation 24A of the Listing Regulations as well.
Cost Auditors and their Report
As per Section 148 of the Act read with the Companies (Cost Records and Audits) Rules, 2014, as amended, the Board of Directors of your Company on recommendation of the Audit Committee have re-appointed M/s. R. Nanabhoy & Co., Cost Accountants, Mumbai (Registration No. 000010) as the Cost Auditors of your Company, to carry out the cost audit of its products covered under the Ministry of Corporate Affairs Order
dated June 30, 2014 (as amended on December 31, 2014) for the financial year 2022-23. The remuneration of Cost Auditors has been approved by the Board of Directors on the recommendation of the Audit Committee and the requisite resolution for ratification of remuneration of Cost Auditors by the members has been set out in the Notice convening the 31st Annual General Meeting of your Company.
The re-appointment of M/s. R. Nanabhoy & Co., Cost Accountants, Mumbai as the Cost Auditors of your Company is within the prescribed limits of the Act and free from any disqualifications specified thereunder. Your Company has received the Certificate from the Cost Auditors confirming their independence and relationship on arm''s length basis.
The Cost Audit Report for the financial year ended March 31,2021, issued by M/s. R. Nanabhoy & Co., Cost Auditors, in respect of the various products prescribed under Cost Audit Rules does not contain any qualification(s), reservation(s) or adverse remark(s) and the same was filed with the Ministry of Corporate Affairs on August 18, 2021. The Cost Audit Report for the financial year ended March 31,2022 will be filed with the Ministry of Corporate Affairs within the prescribed statutory time limit.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The details of Loans, Guarantees and Investments as prescribed under Section 186 of the Act are appended as "Annexure - D" and forms integral part of this report.
Pursuant to Section 134 of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Act, in the prescribed Form AOC-2 is appended as "Annexure - E" to this Report. During the year under Review, your Company had entered into contract(s)/arrangement(s)/transaction(s) with related parties which were in ordinary course of business and on arm''s length basis and none of which could be considered as material in accordance with the policy of your Company on materiality of related party transactions. Further, none of the contract(s)/ arrangement(s)/transaction(s) with related parties required approval of members as the same were within the limits prescribed under Section 188(1) of the Act and the Rules framed thereunder read with the provisions of Regulation 23(4) of the Listing Regulations.
The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed from your Company''s website at the link:
https://www.jyothylabs.com/investor/management-
policies-notices/#Management-Policies
Attention of Members is also drawn to Note 33 to the financial statements for the year ended March 31, 2022 which sets out the related party disclosures as per the Indian Accounting Standard (Ind AS) 24.
STATE OF THE COMPANY''S AFFAIRS (MANAGEMENT DISCUSSION AND ANALYSIS)
In terms of the provisions of Regulation 34(2) of the Listing Regulations, the Management Discussion and Analysis Report of your Company''s affairs for the year under review is attached and forms an integral part of this Annual Report.
Your Company did not transfer any sum to the General Reserve or to the Debenture Redemption Reserve for the Financial Year under review.
MATERIAL CHANGES AND COMMITMENTS
Except as disclosed elsewhere in this report, no material changes and commitments which could affect your Company''s financial position have occurred between the end of the financial year 2021 -22 and to the date of this report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 are annexed herewith as "Annexure - F" to this report.
The Board of Directors of your Company at its meeting held on July 29, 2021 appointed Mr. Nilesh B. Mehta, Independent Director of your Company as the Chairman of the Risk Management Committee with effect from July 29, 2021. Mr. K. Ullas Kamath has ceased to be the Director of your Company with effect from the closing hours of January 22, 2022 and accordingly has also ceased to be the member/chairperson of the Risk Management Committee with effect from the closing hours of January 22, 2022.
Accordingly, the Risk Management Committee comprises of the following Directors/Executives of your Company as Members of the Committee as on March 31, 2022:
1. Mr. Nilesh B. Mehta, Independent Director -Chairman;
2. Ms. M. R. Jyothy, Managing Director- Member;
3. Ms. M. R. Deepthi, Whole-time Director - Member;
4. Mr. T. Ananth Rao, Head - Operations & Commercial - Member; and
5. Mr. Ravi Razdan, Head - Systems & HR- Member.
The Risk Management Committee has been entrusted with the powers such as monitoring and reviewing of the risk management plans/policies; appointing various functionaries; deciding the role and responsibilities of various functionaries; evaluating risk including cyber risk to your Company as a whole and also control measures/ security; such other powers as may be delegated by the Board of Directors from time to time. The Risk Management Committee of your Company met twice during the Financial Year 2021-22 i.e. on September 21, 2021 and March 3, 2022. Mr. Nilesh B. Mehta was appointed as the Chairperson to chair the said meetings of the Risk Management Committee.
The Board of Directors of your Company has designed a Risk Management Policy in a structured manner taking into consideration the following factors and the same is being monitored on a periodic basis by your Company:
1. The Management Approach;
2. Vision & Mission;
3. Key Business Goals;
4. Risk Library; and
5. Risk Management Focus.
Also, the Management has adopted the following 5 step approach keeping in view your Company''s Vision and Mission:
1. Identifying ''Key'' Business goals;
2. Identifying the Risk Management focus;
3. Identifying Business risks;
4. Prioritizing the identified business risks; and
5. Rating the current risk management capability for identified risks.
Further, your Company has identified Key Business Goals for a five year horizon and a library of risk events which could be bottleneck in achieving the same. After defining the key business goals and the library of risk events, your Company identified the goals on which the management would focus.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Company has been a firm believer that each and every individual including an artificial person owe something to the society at large. Mr. M. P. Ramachandran, Chairman Emeritus of your Company even before the inception of Corporate Social Responsibility provisions under the Act, has been involved in charitable and social activities in his individual capacity.
Your Company for the financial year 2021-22 was required to spend an amount of '' 410.15 Lacs (2% of the average net profits of last three financial years) towards Corporate Social Responsibility (CSR) activities. However, your Company for the financial year 2021-22 has spent an aggregate amount of '' 274.82 Lacs towards the CSR activities mentioned in the Annual Action Plan of the Company for the financial year 2021 -22, approved by the Board of Directors. Further, after setting off the excess amount of '' 9.67 Lacs spent in the financial year 2020-21, the balance unspent CSR amount for the Financial Year 2021-22 works out to '' 125.66 Lacs.
Accordingly, pursuant to the provisions of Section 135(6) of the Act and based on the recommendation of the CSR Committee, the Board of Directors of your Company approved opening of a special account in the name and style of "Jyothy Labs Limited - Unspent Corporate Social Responsibility Account 2021-22" and transferred the balance unspent amount of '' 126 Lacs, which is in excess of the balance unspent amount of '' 125.66 Lacs, to the aforesaid Bank Account on April 27, 2022.
Further, your Company has received request from existing projects supported by your Company for CSR funding to their on-going projects. Accordingly, the unspent amount will be utilized during the mandatory period of 3 years from the date of transfer.
The Annual Report on CSR activities that includes details about brief outline on CSR Policy developed and implemented by your Company, Composition of CSR Committee and CSR initiatives taken during the financial year 2021-22 in accordance with Section 135 of the Act and other details required to be disclosed as per the latest format prescribed under the Companies (Corporate Social Responsibility Policy) Rules, 2014 as amended by the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 dated January 22, 2021 is annexed herewith as "Annexure - G" to this Report.
Details about the CSR Policy adopted and formulated by your Company can be accessed from your Company''s website at the link:
https://www.jyothylabs.com/investor/management-
policies-notices/#Management-Policies
The Annual action plan for the financial year 2022-23 as recommended by the Corporate Social Responsibility Committee and approved by the Board of Directors of your Company at their respective Meetings held on May 24, 2022 has also been uploaded on your Company''s website at the link:
https://www.jyothylabs.com/wp-content/
uploads/2022/05/CSR-Annual-Action-Plan-2022-23.pdf
During the year under review, there was no change in the nature of business of your Company.
PERFORMANCE OF SUBSIDIARIES, ASSOCIATE COMPANIES/JOINT VENTURES
A statement containing the salient features of the financial statements of your Company''s subsidiaries, Associates and Joint Venture Companies in the prescribed format AOC-1 is presented in separate section forming part of the financial statements and hence not repeated here in this Report for the sake of brevity. Policy for determining material subsidiaries, formulated and adopted by your Company can be accessed from your Company''s website at the link:
https://www.jyothylabs.com/investor/management-
policies-notices/#Management-Policies
No Company has become or ceased to be your Company''s subsidiary, joint venture or associate company during the financial year 2021-22, except cessation of its step-down subsidiaries as per the information provided herein below:
Based on the Joint Petition filed by the Subsidiary of your Company viz. Jyothy Fabricare Services Limited, (JFSL) [the Transferee Company] along with JFSL''s Wholly Owned Subsidiary viz. Four Seasons Drycleaning Company Private Limited (Second Transferor Company), the Hon''ble National Company Law Tribunal, Mumbai Bench have sanctioned the Scheme of Amalgamation between Four Seasons Drycleaning Company Private Limited (Second Transferor Company) with JFSL (the Transferee Company) vide their order dated February 16, 2021. Further during the year under review, the Hon''ble bench of National Company Law Tribunal, Bengaluru had also allowed the Scheme of Amalgamation of Snoways Laundrers & Drycleaners Private Limited (First Transferor Company) and Four Seasons Drycleaning Company Private Limited (Second Transferor Company) with JFSL (the Transferee Company) and had granted their final order on December 8, 2021.
Your Company did not accept/renew any fixed deposits from public and no fixed deposits were outstanding or remained unclaimed as on March 31, 2022.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by any Regulator/Court that would impact the going concern status of your Company and its future operations.
The Internal Financial Controls adopted and followed by your Company are adequate and are operating effectively. Your Company has adopted a dynamic Internal Financial Controls framework based on the best practices followed in the industry. Under the said framework, Risk and Control Matrix are defined for the following process(es):-
1. Fixed Assets;
2. Financial Statement Closing Process;
3. Information Technology;
4. Inventory Management;
5. Marketing and Advertising;
6. Payroll;
7. Production Process;
8. Taxation; and
9. Treasury.
M/s. MGB Advisors Pvt. Ltd. Chartered Accountants have been entrusted with the responsibility of testing the controls identified and implemented by your Company for all the aforesaid processes.
During the year under review, no material or serious observations have been received from the Internal Auditors of your Company regarding inefficiency or inadequacy of such controls.
The consolidated financial statements of your Company are prepared in accordance with the relevant Indian Accounting Standards issued by the Central Government under Section 133 of the Act and forms integral part of the Annual Report.
The report on Corporate Governance as stipulated under Regulation 34(3) read with Schedule V of the Listing
Regulations together with the Certificate received from M/s. Rathi & Associates, Practicing Company Secretaries, confirming compliance of Corporate Governance requirements is attached and forms an integral part of this Report.
BUSINESS RESPONSIBILITY REPORT
As per the requirements of Regulation 34(2)(f) of the Listing Regulations, the Business Responsibility Reports are applicable to top 500 listed companies based on market capitalization. Further, SEBI vide its notification dated December 26, 2019, notified the provisions of the SEBI (Listing Obligations and Disclosure Requirements) (Fifth Amendment) Regulations, 2019 and has extended the applicability to top 1000 listed companies based on market capitalization.
Your Company being one of the top 500 listed companies is required to report on Business Responsibility. Accordingly, the report on Business Responsibility forms an integral part of this report.
COMPLIANCE WITH SECRETARIAL STANDARDS
During the year under review, your Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.
REMUNERATION/COMMISSION FROM ANY OF ITS SUBSIDIARIES
During the year under review, neither the Managing Directors nor the Whole-time Director of your Company received any remuneration or commission from any of its subsidiaries.
EMPLOYEE STOCK OPTION SCHEME (ESOS)
During the financial year under review, no options were granted, vested or exercised and hence, the disclosure as required under Section 62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 and Regulation 14 of the Securities Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 is not required to be furnished.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
Your Company has a Vigil Mechanism in place which includes a Whistle Blower Policy in terms of the Listing Regulations for Directors and Employees of your Company to provide a mechanism which ensures adequate safeguards to Employees and Directors from any victimization on raising of concerns of any violations of legal or regulatory requirements, incorrect
or misrepresentation of any financial statements and reports etc.
The Vigil Mechanism/Whistle Blower Policy of your Company can be accessed from your Company''s website at the link:
https://www.jyothylabs.com/investor/management-
policies-notices/#Management-Policies
Your Company has put in place a mechanism in consonance with the requirements of Section 177 of the Act and Regulation 18(3) of the Listing Regulations for the Directors, employees and other stakeholders to report genuine concerns about unethical behavior, actual or suspected fraud or violation of the Code of Conduct or policy framed by your Company. All Protected Disclosures can be reported by the Whistle Blower in writing or through call on the following number i.e. 18601232120 or Hotline number i.e. 022-66892804 or alternatively, the same can also be sent through email on whistleblower@ jyothy.com with the subject "Protected disclosure under the Whistle Blower Policy".
The Whistle Blowers have a right/option to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Codes of Conduct or policy directly to the Chairman of the Audit Committee. During the year under review, no protected disclosure from any Whistle Blower was received by the designated officer under the Vigil Mechanism.
INTERNAL CONTROL SYSTEMS
Your Company has adequate internal control systems and procedures in place for effective and smooth conduct of business and to meet exigencies of operation and growth. Your Company has set up Standard Operating Process (SOP), procedures and controls apart from regular Internal Audits. Roles and responsibilities have been laid down for each process owners. Management Information System has been established which ensures that adequate and accurate information is available for reporting and decision making.
Internal Audit is conducted by an independent firm of Chartered Accountants viz. M/s. Mahajan & Aibara Chartered Accountants, LLP. Internal Auditors regularly check the adequacy of the system, their observations are reviewed by the management and remedial measures, as necessary, are taken. Internal Auditors report directly to the Chairman of the Audit Committee to maintain its objectivity and independence.
Your Company ensure compliance of all applicable laws through a Compliance Tool software mechanism viz. "Legatrix" designed by Legasis Services Private Limited which ensures compliance with the provisions of all applicable laws to your Company adequately and effectively.
TRANSFERS TO INVESTOR EDUCATION AND PROTECTION FUND
Transfer of Equity Shares:
Pursuant to the provisions of Section 124(6) of the Act and the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 notified by the Ministry of Corporate Affairs on September 7, 2016 and subsequently amended vide notification dated February 28, 2017, all the equity shares of any Company in respect of which dividend amounts have not been paid or claimed by the shareholders for seven consecutive years or more are required to be transferred to demat account of the Investor Education and Protection Fund Authority (IEPF Account).
Accordingly, 19,918 shares of 480 members of your Company were transferred to Demat Account of IEPF Authority on October 7, 2021. Your Company had sent individual notice to all the aforesaid members and has also published the notice in the leading English and Marathi newspapers. The details of the aforesaid members are available on website of your Company i.e. www.jyothylabs.com.
Transfer of Unpaid/Unclaimed Dividend:
Further, pursuant to the provisions of Section 124(5) of the Act, the dividend which remained unclaimed/ unpaid for a period of seven years from the date of transfer to unpaid dividend account is required to be transferred to the Investor Education and Protection Fund (IEPF) established by the Central Government.
As a result, the unclaimed/unpaid dividend pertaining to the financial year 2013-14 which remained unpaid and unclaimed for a period of 7 years has been transferred by your Company to the IEPF.
Your Company has uploaded the details of unclaimed/ unpaid dividend for the financial year 2013-14 onwards on its website i.e. www.jyothylabs.com and on website of the Ministry of Corporate Affairs i.e. www.mca.gov. in and the same gets revised/updated from time to time pursuant to the provisions of IEPF (Uploading of Information Regarding Unpaid and Unclaimed Amount Lying with Companies) Rules, 2012.
Further, the unpaid final dividend amount pertaining to the financial year 2014-15 will be transferred to IEPF during the Financial Year 2022-23.
EMPLOYEE RELATIONS
Your Company has always provided a congenial atmosphere for work to all its employees that is free from discrimination and harassment. Employee relations remained cordial during the year under review.
MANUFACTURING FACILITIES
Your Company has state-of-the-art facilities at all of its manufacturing locations spread across India. Furthermore, six manufacturing plants of your Company situated at Roorkee, Wayanad, Jammu, Pithampur, Puducherry and Baddi are ISO 9001 -2015 certified.
PREVENTION OF SEXUAL HARASSMENT
Your Company has framed ''Anti - Sexual Harassment Policy'' at workplace and has constituted an Internal Complaints Committee (ICC) as per the requirement of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed thereunder. No complaints with allegations of any sexual harassment were reported during the year under review.
PARTICULARS OF EMPLOYEES
The disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended and forming part of the Directors'' Report for the year ended March 31, 2022 is annexed herewith as "Annexure - H" to this Report.
DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016)
Your Company on December 21, 2020 filed an application before the Registrar, National Company Law Tribunal, Chennai Bench (NCLT) as a financial creditor to initiate corporate insolvency resolution process under Section 7 read with Chapter II of Part II/ Under Chapter IV of Part II of the Insolvency and Bankruptcy Code, 2016 (Code) against Abhiraami Chemicals Limited (ACL). During the year under review, vide order dated October 04, 2021 the NCLT admitted the petition in terms of Section 7 of the Code.
In view of fact that Abhiraami Chemicals Limited does not have any operation since the Financial Year 2015-16 and
has zero revenue from operations since the year 2015-16, the Committee of Creditors (CoC) vide its meeting held on November 26, 2021 recommended and approved liquidation of the Abhiraami Chemicals Limited and resolution professional has been appointed as liquidator. The Liquidator has filed the application for liquidation of Abhiraami Chemicals Limited under Section 33 of the Code with NCLT, Chennai on March 01, 2022 and the matter is pending before the NCLT, Chennai.
Certain statements in the "Management Discussion and Analysis" section may be ''forward-looking''. Such ''forward looking'' statements are subject to risks and uncertainties and therefore actual results could be different from what your Directors envisage in terms of future performance and outlook.
Your Directors express their sincere appreciation for the contribution and commitment of the employees of your Company at all levels and for the excellent support provided by the members, customers, distributors, suppliers, bankers, media and other stakeholders, during the financial year under review. Your Company looks forward to continued and unstinted support in its endeavor to make lives of consumers better by providing world class products at affordable price.
Mar 31, 2019
Dear Members,
It is our pleasure to present the 28th Annual Report of your Company together with the Audited Financial Statements for the financial year ended March 31, 2019.
FINANCIAL PERFORMANCE
The Companyâs financial performance on standalone basis for the financial year ended March 31, 2019 compared with previous financial year is summarised below:
(Rs. in Lacs)
Financial results |
Financial Year ended March 31, 2019 |
Financial Year ended March 31, 2018 |
Revenue from Operations |
1,76,887.38 |
1,64,413.89 |
Earnings before interest, tax, depreciation, amortization and impairment |
28,578.40 |
26,411.70 |
Finance Cost |
2,782.36 |
4234.75 |
Other Income |
2,782.98 |
4,329.97# |
Depreciation on Tangible Assets |
2,702.56 |
2,540.64 |
Amortization of Intangible Assets |
3,126.04 |
3,118.25 |
Profit before tax |
22,750.42 |
20,848.03 |
Provision for tax |
||
- Current tax |
4,690.64 |
4,227.37 |
- Adjustment of Tax relating to earlier period |
- |
(143.65) |
- Deferred Tax Charge/(Credit) |
(1,257.50) |
710.76 |
Profit after tax |
19,317.28 |
16,053.55 |
Earning Per Share (Basic) (In â) |
5.29 |
4.42 |
Earning Per Share (Diluted) (In â) |
5.29 |
4.37 |
Dividend Per Share of face value of Rs. 1/- (In â) |
3.00 |
0.50* |
# Other Income for the financial year ended March 31, 2018 includes Profit of Rs. 1,897.45 lacs from sale of Land and Building situated at Ambattur, Chennai.
* on the expanded capital base (on account of Bonus Issue).
The above mentioned financial performance highlights are an abstract of the Financial Statements of your Company for the Financial Year 2018-19. The detailed Financial Statements of your Company forms part of this Annual Report and are also uploaded on the website of your Company i.e. www.jyothylaboratories.com.
PERFORMANCE HIGHLIGHTS
The Revenue from operations on standalone basis of your Company for the Financial Year 2018-19 grew by 7.6% and stood at Rs. 1,76,887.38 Lacs compared to Rs. 1,64,413.89 Lacs in the previous financial year. The profit before tax was at Rs. 22,750.42 Lacs as against Rs. 20,848.03 Lacs in the previous financial year, registering a growth of 9.1 %. The net profit for the financial year 2018-19 amounted to Rs. 19,317.28 Lacs, registering an increase of 20.3% over the previous year.
The consolidated revenue from operations of your Company for the year under review stood at Rs. 1,81,357.66 Lacs as against Rs. 1,69,027.83 Lacs in the previous year, reporting a growth of 7.3%. The consolidated profit before tax was at Rs. 24,305.64 Lacs registering a growth of 1% over the consolidated profit before tax of the previous financial year. The consolidated profit after tax for the financial year under review stood at Rs. 19,761.71 Lacs against Rs. 17,887.02 Lacs in the previous financial year, an increase by 10.5% over the previous financial year.
DIVIDEND
Your Board is pleased to recommend for your consideration, a dividend of Rs. 3/- (Rupees Three only) per equity share of Rs. 1/- each for the financial year 2018-19. The aforesaid dividend will involve a total payout of Rs. 13,280.68 Lacs (inclusive of Dividend Distribution Tax of Rs. 2,264.42 Lacs) and is subject to the approval of Members at the ensuing Annual General Meeting of your Company. The proposed dividend payout is in accordance with your Companyâs Dividend Distribution Policy.
During the previous financial year, your Company had paid a total dividend of 50 Paisa (Paisa Fifty only) per equity share of Rs. 1/- each for the financial year 2017-18 on the expanded capital base (on account of Bonus Issue) of your Company. The aforesaid dividend involved a total payout of Rs. 2,192.62 Lacs (inclusive of Dividend Distribution Tax of Rs. 373.68 Lacs).
DIVIDEND DISTRIBUTION POLICY
The Board of Directors of your Company has approved and adopted a policy on Dividend Distribution formulated in accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) and the dividend recommended is in accordance with the said policy.
The Dividend Distribution Policy is annexed to this report as âAnnexure - Aâ and can be accessed from your Companyâs website at the link:
http://www.jyothylaboratories.com/admin/docs/ DIVIDEND%20DISTRIBUTI0N%20P0LICY JLL FINAL.pdf
ISSUE OF SHARES
a) Issue of Bonus Shares
During the financial year under review, your Company on July 3, 2018 had allotted Bonus Shares in the ratio of 1:1 i.e. 1 (One) new equity share of Rs. 1/- each for every 1 (One) existing equity share of Rs. 1/- each held by the members as on the record date i.e. June 30, 2018. On account of the said issue of Bonus Shares, the Promoter/ Promoter Group of your Company were allotted 12,15,33,847 equity shares of Rs. 1/- each.
Post bonus issue, the Equity Share Capital of your Company stands increased to Rs. 36,35,88,174/divided into 36,35,88,174 equity shares of â1/- each.
b) Issue of Equity Shares with differential rights
During the year under review and to date, your Company has not issued any shares with differential rights, hence no information prescribed under provisions of Section 43(a)(ii) of the Companies Act, 2013 (the Act) read with Rule 4(4) of the Companies (Share Capital & Debentures) Rules, 2014 has been furnished.
c) Issue of Sweat Equity Shares
During the year under review and to date, your Company has not issued any sweat equity shares. Hence no information as per the provisions of Section 54(1)(d) of the Act read with Rule 8(13) of the Companies (Share Capital & Debentures) Rules, 2014 is furnished.
d) Issue of Employee Stock Option
In terms of the provisions of Section 62(1 )(b) read with Section 39 of the Act, during the year under review, as approved by members at the 23rd Annual General Meeting held on August 13, 2014 and 27th Annual General Meeting held on July 25, 2018, your Company has issued and allotted 36,20,470 equity shares of Rs. 1/- each to Mr. S. Raghunandan under âJyothy Laboratories Employees Stock Option Scheme 2014-Aâ (ESOS 2014-A). Accordingly, the equity share capital of your Company stands increased to Rs. 36,72,08,644/- divided into 36,72,08,644 equity shares of Rs. 1/- each fully paid up.
INCREASE IN SHARE CAPITAL
The Authorised Share Capital of your Company is Rs. 2,72,30,00,000 consisting of: (a) 2,72,00,00,000 equity shares of the face value of Rs. 1/- each and (b) 30,000 11% cumulative redeemable preference shares of the face value of Rs. 100/- each.
Further, after the issue of 36,20,470 equity shares Rs. 1/each to Mr. S. Raghunandan under ESOS 2014-A, the paid up equity share capital of your Company stands increased to Rs. 36,72,08,644/- consisting of 36,72,08,644 equity shares of Rs. 1/- each fully paid-up.
DEBENTURES
In terms of Section 42 of the Act read with Rule 14 of the Companies (Prospectus and Allotment) Rules, 2014, your Company had issued 4000, Secured Rated Unlisted Redeemable Non-Convertible Debentures having a Face Value of Rs. 10,00,000/- (Rupees Ten Lacs only) each aggregating to Rs. 400 Crores (Debentures) on December 9, 2016 on private placement basis. During the previous financial year i.e. 2017-18, your Company had partially redeemed the Debentures by making a payment of Rs. 5,00,000/- (Rupees Five Lacs only) each on 4000 Debentures aggregating to Rs. 200 Crores on February 1, 2018 and February 8, 2018. Further, after the said partial redemption, your Company had revised the Face Value of the said 4000 Debentures to Rs. 5,00,000/- (Rupees Five Lacs only) each.
During the financial year under review, your Company has made the balance payment of Rs. 5,00,000/- (Rupees Five Lacs only) each on 4000 Debentures aggregating to Rs. 200 Crores on April 27, 2018 by exercising the Put option and accordingly, your Company has fully redeemed the entire 4000 Debentures.
EXTRACT OF ANNUAL RETURN
The Extract of Annual Return as prescribed under Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014 in prescribed Form MGT-9 is annexed to this report as âAnnexure - Bâ.
NUMBER OF MEETINGS OF THE BOARD
Your Companyâs Board of Directors met 5 (five) times during the financial year ended March 31, 2019 in accordance with the provisions of the Act and Rules made thereunder.
The dates on which the Board of Directors met during the financial year under review are provided in the Corporate Governance Report.
AUDIT COMMITTEE
The Audit Committee of your Company consists of all Independent Directors and Mr. K. Ullas Kamath, Joint Managing Director of your Company. However, Mr. K. P. Padmakumar and Mr. Kamath ceased to be the members of the Audit Committee with effect from the closing hours of March 31, 2019. The detailed composition of the Audit Committee is provided in the Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board.
DIRECTORSâ RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Act, in relation to the Audited Financial Statements of your Company for the financial year ended March 31, 2019, the Board of Directors hereby confirms that:
a. in the preparation of the annual accounts for the financial year ended March 31, 2019, the applicable accounting standards read with the requirements set out under Schedule III to the Act, have been followed and there were no material departures from the same;
b. your Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2019 and of the profit of your Company for the year ended on that date;
c. your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;
d. your Directors have prepared annual accounts of your Company on a going concern basis;
e. your Directors have laid down internal financial controls to be followed by your Company and that such internal financial controls are adequate and are operating effectively; and
f. your Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
PERFORMANCE EVALUATION
In accordance with the Act and Regulation 4(2)(f) of the Listing Regulations, your Company has framed a Policy for Evaluation of Performance of Independent Directors, Board, Committees and other Individual Directors which includes criteria for performance evaluation of Non-Executive Directors and Executive Directors. A questionnaire is formulated for evaluation of performance of the Board, its committees and individual Directors, after taking into consideration several aspects such as board composition, strategic orientation, board functioning and team dynamics. Based on the questionnaire prepared, an annual performance evaluation was carried on May 16, 2018.
Performance evaluation of Independent Directors was conducted by the Board of Directors, excluding the Director being evaluated. The criteria for performance evaluation of Independent Directors laid down by the Nomination, Remuneration and Compensation Committee include ethics and values, knowledge and proficiency, diligence, behavioral traits, efforts for personal development and independence in decision making.
Similarly, performance evaluation of the Chairman and Non-Independent Directors was carried out by the Independent Directors. Your Directors also expressed their satisfaction with the evaluation process.
TRAINING OF INDEPENDENT DIRECTORS
All Independent Directors are familiarized with your Company, their roles, rights and responsibilities in your Company, nature of the industry in which your Company operates, business model, strategy, operations and functions of your Company through its Executive Directors and Senior Managerial Personnel. The details of programs for familiarization of Independent Directors with your Company are available on the website of your Company at the link:
http://www.jyothylaboratories.com/admin/docs/ Familiarisation%20Programme JLL 2016-17.pdf
DIRECTORS AND KEY MANAGERIAL PERSONNEL
SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 amended the provisions of Regulation 17 of the Listing Regulations, which requires top 500 listed entities to appoint one Woman Independent Director on the Board of the Company. Accordingly, based on the recommendation of the Nomination, Remuneration and Compensation Committee, the Board of Directors of your Company at their meeting held on March 14, 2019, appointed Ms. Bhumika Batra (DIN: 03502004) as an Independent Director of your Company for a period of 5 years commencing from March 14, 2019, subject to approval of members at the ensuing Annual General Meeting. The credentials of Ms. Bhumika Batra have been laid down in the Notice of the ensuing Annual General Meeting.
Mr. M. P. Ramachandran on May 7, 2019 placed his resignation before the Board of Directors of your Company as a Director, which will be effective from April 1, 2020 and thereby he will also cease to be the Chairman & Managing Director of your Company from the said date. In view of his resignation as the Chairman & Managing Director and considering the qualification and experience of Ms. M. R. Jyothy in your Company and as a measure of the succession planning and based on the recommendation of the Nomination, Remuneration and Compensation Committee at their meeting held on May 7, 2019, it is proposed to appoint Ms. M. R. Jyothy (DIN: 00571828) as the Managing Director of your Company for a period of 5 years commencing from April 1, 2020 to March 31, 2025 (both days inclusive).
Ms. M. R. Deepthi having an overall experience of 13 years in the field of Finance/Secretarial function in your Company, she has been playing a key role in budget formulation, preparation of MIS report, monitoring performance against the budget, raising and management of funds and other financial activities. Apart from finance function she is also actively participating in Secretarial function of your Company. Considering Ms. Deepthiâs qualification and overall experience in your Company and based on the recommendation of the Nomination, Remuneration and Compensation Committee at their meeting held on May 7, 2019, it is proposed to appoint Ms. M. R. Deepthi (DIN: 01746698) as the Whole-time Director of your Company for a period of 5 years commencing from April 1, 2020 to March 31, 2025 (both days inclusive).
Both the aforesaid appointments are also subject to the approval of members and accordingly resolutions in respect of their appointments have been set out in the Notice of the ensuing Annual General Meeting.
Further, in accordance with the provisions of Section 152 of the Act, Ms. M. R. Jyothy, the Whole Time Director & Chief Marketing Officer (DIN: 00571828) of your Company retires by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re-appointment.
DECLARATION OF INDEPENDENT DIRECTORS
Pursuant to Section 134(3)(d) of the Act, your Company confirms having received necessary declarations from all the Independent Directors under Section 149(7) of the Act and Regulation 25(8) of the Listing Regulations declaring that they meet the criteria of independence laid down under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. Your Company has also formulated a Code of Conduct for Directors and Senior Management Personnel and has obtained declarations from all the Directors to the effect that they are in compliance with the Code.
MEETING OF INDEPENDENT DIRECTORS
Your Companyâs Independent Directors meet at least once in every financial year without the presence of the Executive Directors or Management Personnel of your Company and the Meeting is conducted informally. During the year under review, one meeting of Independent Directors was held on May 16, 2018.
REMUNERATION POLICY
Your Company follows the policy on Nomination and Remuneration/Compensation of Directors, Key Managerial Personnel and other Employees as approved by the Nomination, Remuneration and Compensation Committee and the Board of Directors of your Company and the same has been uploaded on your Companyâs website at http://www.jyothylaboratories. com/management-policies.php. Salient features of the said Policy is annexed to this report as âAnnexure - Câ.
INSTANCES OF FRAUD, IF ANY REPORTED BY THE AUDITORS
There have been no instances of any fraud reported by the Statutory Auditors under Section 143(12) of the Act.
AUDITORS & AUDIT REPORTS
Statutory Auditors and their Report
At the 26th Annual General Meeting held on July 11, 2017, M/s. B S R & Co. LLP, Chartered Accountants, (Firm Registration No.101248W/W-100022) were appointed as the Statutory Auditors of your Company to hold office for a term of 5 years commencing from the conclusion of 26th Annual General Meeting till the conclusion of 31st Annual General Meeting subject to ratification by Members in each Annual General Meeting. However, as per the Companies (Amendment) Act, 2017 provisions of Section 139 of the Act has been amended, wherein, the requirement of ratification of appointment of Statutory Auditors at every Annual General Meeting has been done away with. Accordingly, appointment of M/s. B S R & Co. LLP, Chartered Accountants, (Firm Registration No.101248W/W-100022) as Statutory Auditors of your Company, will not be placed for ratification by the members in the ensuing Annual General Meeting.
The Notes on financial statements referred to in the Auditorsâ Report are self-explanatory and do not call for any further comments. The Auditorsâ Report does not contain any qualification(s), reservation(s) or adverse remark(s).
Secretarial Auditors and their Report
In terms of Section 204 of the Act, the Board of Directors of your Company on the recommendation of the Audit Committee have re-appointed M/s. Rathi & Associates, Practicing Company Secretaries, Mumbai as the Secretarial Auditors of your Company to carry out Secretarial Audit for the financial year 2019-20. Your Company for the Financial Year 2018-19 has obtained Secretarial Audit Report in the prescribed Form MR-3 from M/s. Rathi & Associates, Practicing Company Secretaries, which forms part of the Annual Report and is appended as âAnnexure - Dâ to this Report. The report do not contain any qualification(s), reservation(s) or adverse remark(s) which calls for any explanation from your Board of Directors.
Cost Auditors and their Report
As per Section 148 of the Act read with the Companies (Cost Records and Audits) Rules, 2014, as amended, the Board of Directors of your Company on recommendation of the Audit Committee have re-appointed M/s. R. Nanabhoy & Co., Cost Accountants, Mumbai (Registration No. 000010) as the Cost Auditors to carry out the cost audit of its products covered under the Ministry of Corporate Affairs Order dated June 30, 2014 (as amended on December 31, 2014) for the financial year 2019-20. The remuneration of Cost Auditors has been approved by the Board of Directors on the recommendation of the Audit Committee and the requisite resolution for ratification of remuneration of Cost Auditors by the members has been set out in the Notice convening the 28th Annual General Meeting of your Company.
The re-appointment of M/s. R. Nanabhoy & Co., Cost Accountants, Mumbai as the Cost Auditors of your Company is within the prescribed limits of the Act and free from any disqualifications specified thereunder. Your Company has received the Certificate from the Cost Auditor confirming their independence and relationship on armâs length basis.
The Cost Audit Report for the financial year ended March 31, 2018, issued by M/s. R. Nanabhoy & Co., Cost Auditors, in respect of the various products prescribed under Cost Audit Rules does not contained any qualification(s), reservation(s) or adverse remark(s) and the same was filed with the Ministry of Corporate Affairs on August 23, 2018. The Cost Audit Report for the financial year ended March 31, 2019 will be filed with the Ministry of Corporate Affairs within the prescribed statutory time limit.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The details of Loans, Guarantees and Investments as prescribed under Section 186 of the Act are appended as âAnnexure - Eâ and forms integral part of this report.
RELATED PARTY TRANSACTIONS
Pursuant to Section 134 of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Act, in the prescribed Form AOC-2 is appended as âAnnexure - Fâ to this Report. During the year, your Company had entered into contract(s)/ arrangement(s)/transaction(s) with related parties which were in ordinary course of business and on armâs length basis and none of which could be considered as material in accordance with the policy of your Company on materiality of related party transactions. Further, none of the contract(s)/arrangement(s)/ transaction(s) with related parties required approval of members as the same were within the limits prescribed under Section 188(1) of the Act and Rules framed thereunder.
The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed from your Companyâs website at the link: http://www.jyothylaboratories.com/ admin/docs/RPT JLL Website.pdf
Attention of Members is also drawn to Note 34 to the financial statements for the year ended March 31, 2019 which sets out the related party disclosures as per Indian Accounting Standard (Ind AS) 24.
STATE OF THE COMPANYâS AFFAIRS (MANAGEMENT DISCUSSION AND ANALYSIS)
In terms of the provisions of Regulation 34(2) of the Listing Regulations, the Management Discussion and Analysis Report of your Companyâs affairs for the year under review is attached and forms an integral part of this Annual Report.
TRANSFER TO RESERVES
Your Company did not transfer any sum to the General Reserve or to the Debenture Redemption Reserve for the financial year under review.
MATERIAL CHANGES AND COMMITMENTS
Except as disclosed elsewhere in this report, no material changes and commitments which could affect your Companyâs financial position have occurred between the end of the financial year 2018-19 and date of this report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 are annexed herewith as âAnnexure - Gâ to this report.
RISK MANAGEMENT
The Board of Directors of your Company on March 14, 2019 has constituted a Risk Management Committee which comprises of the following Directors/Executives of the Company as Members of the Committee:
1. Mr. M. P. Ramachandran, Chairman & Managing Director as Chairman;
2. Mr. K. Ullas Kamath, Joint Managing Director as Member;
3. Ms. M. R. Jyothy, Whole-time Director & Chief Marketing Officer as Member;
4. Mr. T. Ananth Rao, Head - Operations as Member; and
5. Mr. Ravi Razdan, Head - Systems & HR as Member.
The Risk Management Committee have been entrusted with the powers such as Monitoring and reviewing of the risk management plan/policies; Appoint various functionaries; Decide the role and responsibilities of various functionaries; Evaluate risk including cyber risk of your Company as a whole and also control measures/ security; Such other powers as may be delegated by the Board of Directors from time to time.
The Board of Directors of your Company has designed a Risk Management Policy in a structured manner taking into consideration the following factors and the same is being monitored on a periodic basis by your Company:
1. The Management Approach;
2. Vision & Mission;
3. Key Business Goals;
4. Risk Library; and
5. Risk Management Focus.
Also, the Management has adopted the following 5 step approach keeping in view your Companyâs Vision and Mission:
1. Identifying âKeyâ Business goals;
2. Identifying the Risk Management focus;
3. Identifying Business risks;
4. Prioritizing the identified business risks; and
5. Rating the current risk management capability for identified risks.
Further, your Company has identified Key Business Goals for a five year horizon and a library of risk events which could be bottleneck in achieving the same. After defining the key business goals and the library of risk events, your Company identified the goals on which the management would focus.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Company has been a firm believer that each and every individual including an artificial person owe something to the society at large. Mr. M. P. Ramachandran, Chairman & Managing Director of your Company even before the inception of Corporate Social Responsibility provisions under the Companies Act, 2013, has been involved in charitable and social activities in his individual capacity.
Your Company for the financial year 2018-19 was required to spend an amount of Rs. 365.47 Lacs (2% of the average net profits of last three financial years) towards Corporate Social Responsibility (CSR) activities. However, your Company for the financial year 201819 has spent Rs. 421.08 Lacs which was higher than the statutory requirement of 2% of the average net profits for the last three financial years.
The Annual Report on CSR activities that includes details about CSR Policy developed and implemented by your Company and CSR initiatives taken during the financial year 2018-19 in accordance with Section 135 of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed herewith as âAnnexure - Hâ to this Report
Details about the CSR Policy adopted and formulated by your Company can be accessed from your Companyâs website at the link:
http://www.jyothylaboratories.com/admin/docs/JLL CSR%20Policy Website.pdf.
CHANGE IN NATURE OF BUSINESS
During the year under review, there was no change in the nature of business of your Company.
PERFORMANCE OF SUBSIDIARIES, ASSOCIATE COMPANIES/JOINT VENTURES
A statement containing the salient features of the financial statements of your Companyâs subsidiaries, Associates and Joint Venture Companies in the prescribed format AOC-1 is presented in separate section forming part of the financial statements and hence not repeated here in this report for the sake of brevity. Policy for determining material subsidiaries formulated and adopted by your Company can be accessed from your Companyâs website at the link: http://www.jyothylaboratories.com/admin/docs/ Material%20Subsidiary%20Policy JLL%20final.pdf
No Company has become or ceased to be its subsidiary, joint venture or associate company during the financial year 2018-19.
FIXED DEPOSITS
Your Company did not accept/renew any fixed deposits from public and no fixed deposits were outstanding or remained unclaimed as on March 31, 2019.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by any Regulator/Court that would impact the going concern status of your Company and its future operations.
INTERNAL FINANCIAL CONTROLS
The Internal Financial Controls adopted and followed by your Company are adequate and are operating effectively. Your Company has adopted a dynamic Internal Financial Controls framework based on the best practices followed in the industry. Under the said framework, Risk and Control Matrix are defined for the following process(es):-
1. Fixed Assets;
2. Financial Statement Closing Process;
3. Information Technology;
4. Inventory Management;
5. Marketing and Advertising;
6. Payroll;
7. Production Process;
8. Taxation; and
9. Treasury.
M/s. MGB Advisors Private Limited have been entrusted with the responsibility of testing the controls identified and implemented by your Company for all the aforesaid process(es).
During the year under review, no material or serious observations has been received from the Internal Auditors of your Company regarding inefficiency or inadequacy of such controls.
CONSOLIDATED ACCOUNTS
The consolidated financial statements of your Company are prepared in accordance with the relevant Indian Accounting Standards issued by the Central Government under Section 133 of the Act and forms integral part of the Annual Report.
CORPORATE GOVERNANCE
The report on Corporate Governance as stipulated under Regulation 34(3) read with Schedule V of the Listing Regulations together with the Certificate received from M/s. Rathi & Associates, Practicing Company Secretary, confirming compliance of Corporate Governance requirements is attached and forms an integral part of this Report.
BUSINESS RESPONSIBILITY REPORT
The Securities and Exchange Board of India (SEBI), vide amendment to Regulation 34(2)(f) of the Listing Regulations on December 22, 2015, had extended the applicability of Business Responsibility Reports to top 500 listed companies based on market capitalization. Your Company being one of the top 500 listed Companies is required to report on Business Responsibility. Accordingly, the report on Business responsibility forms an integral part of this report.
COMPLIANCE WITH SECRETARIAL STANDARDS
During the year under review, your Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.
REMUNERATION/COMMISSION FROM ANY OF ITS SUBSIDIARIES
During the year under review, neither the Managing Director nor the Whole-time Directors of your Company received any remuneration or commission from any of its Subsidiaries.
EMPLOYEE STOCK OPTION SCHEME (ESOS)
Your Company has adopted Jyothy Laboratories Employee Stock Option Scheme 2014-A (âESOS 2014-Aâ) for granting of options to Mr. S. Raghunandan, the then Whole-time Director and Chief Executive Officer of your Company (who has relinquished the office of Whole-time Director and Chief Executive Officer of your Company w.e.f. May 23, 2016) and Jyothy Laboratories Employee Stock Option Scheme 2014 (âESOS 2014â) for granting of options to other eligible employees of your Company as approved by the Members at the 23rd Annual General Meeting held on August 13, 2014.
Disclosure as required under Section 62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 and Regulation 14 of the Securities Exchange Board of India (Share Based Employee Benefits) Regulation, 2014 are furnished below:
Jyothy Laboratories Employee Stock Option Scheme 2014-A (âESOS 2014-Aâ) |
Jyothy Laboratories Employee Stock Option Scheme 2014 (âESOS 2014â) |
||
1 |
Date of Shareholdersâ approval |
August 13, 2014 |
August 13, 2014 |
2 |
Total number of options approved under ESOS |
27,15,352 |
27,15,352 |
3 |
Vesting Requirements |
Options granted under Options granted under ESOS 2014-A would ESOS 2014 would Vest Vest after One year but after One year but not not later than four years later than four years from the date of grant of from the date of grant of such options. Vesting of such options. Vesting of options would be subject options would be subject to continued employment to continued employment with the Company and with the Company and certain performance certain performance parameters. parameters |
|
4 |
Exercise price or pricing formula |
Rs. 1/- per option |
Rs. 1/- per option |
5 |
Maximum term of options granted |
5 years |
5 years |
6 |
Source of shares |
Primary |
Primary |
7 |
Variation in terms of option |
No variation in the terms of option |
No variation in the terms of option |
8 |
Method of Option Valuation |
Intrinsic Value |
Intrinsic Value |
9 |
Option Movement during the year |
||
Number of Options outstanding at the beginning of the period |
18,10,235 |
- |
|
Number of options granted during the year |
18,10,235 A |
- |
|
Number of options forfeited/lapsed during the year |
- |
- |
|
Number of options vested during the year |
36,20,470 |
- |
|
Number of options exercised during the year |
36,20,470 |
- |
|
Number of shares arising as a result of exercise of options |
36,20,470 |
- |
|
Money realized by exercise of options (Amount in â) |
36,20,470 |
- |
|
Loan repaid by the Trust during the year from exercise price received |
N.A. |
N.A. |
|
Number of Options outstanding at the end of the year 0 |
0 |
||
Number of options exercisable at the end of the year |
0 |
0 |
10 |
Employee Wise details of Options Granted |
||||||
I. |
Senior Managerial Personnel |
||||||
Name |
Designation
|
Options Granted during the Year
|
Exercise Price
|
||||
None |
- |
- |
- |
||||
II. |
Any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during the year; and |
||||||
Name |
Designation |
Options Granted during the Year
|
Exercise Price
|
||||
None |
- |
- |
- |
||||
III. |
Identified employees who were granted option, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant. |
||||||
Name |
Designation
|
Options Granted during the Year
|
Exercise Price
|
||||
Mr. S. Raghunandan |
Whole-time Director & 27,15,352# Rs. 1/- per Option Chief Executive Officer* |
||||||
A During the year under review your Company had issued Bonus shares in the ratio of 1:1 pursuant to the Resolution passed by the Members through Postal Ballot on June 22, 2018 and accordingly, additional 18,10,235 options were adjusted/granted to Mr S. Raghunandan on account of corporate action in form of bonus issue.
* Ceased to be Whole-time Director and Chief Executive Officer of your Company and re-designated as President of your Company w.e.f. May 23, 2016.
# Options Granted to Mr S. Raghunandan during the financial year 2014-15.
Note: Other details as required under Regulation 14 of the Securities Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 read with SEBI circular bearing number CIR/CFD/POLICY CELL/2/2015 dated June 16, 2015 forms part of the Notes to Accounts of the Financial Statements in the Annual Report.
Further the aforesaid details are also available on your Companyâs website at the link: http://www. jyothylaboratories.com/admin/docs/ESOP Reg.%2014. pdf
The certificate from the Statutory Auditors in respect of implementation of Jyothy Laboratories Employee Stock Option Scheme 2014-A (âESOS 2014-Aâ) in accordance with the resolution passed by the Members at the 23rd Annual General Meeting of your Company held on August 13, 2014, shall be placed at the ensuing Annual General Meeting for inspection by Members.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
Your Company has a Vigil Mechanism in place which includes a Whistle Blower Policy in terms of the Listing Regulations for Directors and employees of your Company to provide a mechanism which ensures adequate safeguards to Employees and Directors from any victimization on raising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any financial statements and reports etc.
The Vigil Mechanism/Whistle Blower Policy of your Company can be accessed from your Companyâs website at the link:
http://www.jyothylaboratories.com/admin/docs/Vigil%20Mechanism%20Final%20Approved%2024.1.19.pdf
The Whistle Blowers have a right/option to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Codes of Conduct or policy directly to the Chairman of the Audit Committee. During the year under review, no protected disclosure from any Whistle Blower was received by the designated officer under the Vigil Mechanism.
INTERNAL CONTROL SYSTEMS
Your Company has adequate internal control systems and procedures in place for effective and smooth conduct of business and to meet exigencies of operation and growth. Your Company has set up Standard Operating Process (SOP), procedures and controls apart from regular Internal Audits. Roles and responsibilities have been laid down for each process owners. Management Information System has been established which ensure that adequate and accurate information is available for reporting and decision making.
Internal Audit is conducted by an independent firm of Chartered Accountants viz. M/s. Mahajan & Aibara Chartered Accountants, LLP. Internal Auditors regularly check the adequacy of the system, their observations are reviewed by the management and remedial measures, as necessary, are taken. Internal Auditors report directly to the Chairman of the Audit Committee to maintain its objectivity and independence.
Your Company has also implemented a Compliance Tool software mechanism viz. âLegatrixâ designed by Legasis Services Private Limited which ensures compliance with the provisions of all applicable laws to your Company adequately and effectively.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
Transfer of Equity Shares:
Pursuant to the provisions of Section 124(6) of the Act and the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 notified by the Ministry of Corporate Affairs on September 7, 2016 and subsequently amended vide notification dated February 28, 2017, all the equity shares of the Company in respect of which dividend amounts have not been paid or claimed by the shareholders for seven consecutive years or more are required to be transferred to demat account of Investor Education and Protection Fund Authority (IEPF Account).
Accordingly, 2,952 shares of 67 members of your Company were transferred to Demat Account of IEPF Authority on November 15, 2018. Your Company had sent individual notice to all the aforesaid 67 members and has also published the notice in the leading English and Marathi newspapers. The details of the aforesaid 67 members are available on the website of your Company viz. www.jyothylaboratories.com.
Transfer of Unpaid/Unclaimed Dividend:
Further, pursuant to the provisions of Section 124(5) of the Act, the dividend which remained unclaimed/unpaid for a period of seven years from the date of transfer to unpaid dividend account is required to be transferred to the Investor Education and Protection Fund (IEPF) established by the Central Government.
As a result, the unclaimed/unpaid dividend for the year 2010-11 which remained unpaid and unclaimed for a period of 7 years has been already transferred by your Company to the IEPF.
Your Company has uploaded the details of unclaimed/ unpaid dividend for the financial year 2010-11 onwards on its website viz., www.jyothylaboratories.com and on website of the Ministry of Corporate Affairs viz., www.mca.gov.in and the same gets revised/updated from time to time pursuant to the provisions of IEPF (Uploading of Information Regarding Unpaid and Unclaimed Amount Lying with Companies) Rules, 2012.
Further, the unpaid dividend amount pertaining to the financial year 2011-12 will be transferred to IEPF during the Financial Year 2019-20.
EMPLOYEE RELATIONS
Your Company has always provided a congenial atmosphere for work to all its employees that is free from discrimination and harassment. Employee relations remained cordial during the year under review.
MANUFACTURING FACILITIES
Your Company has state-of-the-art facilities at all of its manufacturing locations spread across India. Furthermore, six manufacturing plants of your Company situated at Roorkee, Wayanad, Jammu, Pithampur, Puducherry and Baddi are ISO 9001-2015 certified.
PREVENTION OF SEXUAL HARASSMENT
Your Company has framed âAnti - Sexual Harassment Policyâ at workplace and has constituted an Internal Complaints Committee (ICC) as per the requirement of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed thereunder. No complaints with allegations of any sexual harassment were reported during the year under review.
PARTICULARS OF EMPLOYEES
The disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended and forming part of the Directorsâ Report for the year ended March 31, 2019 is annexed herewith as âAnnexure - Iâ to this Report.
CAUTIONARY NOTE
Certain statements in the âManagement Discussion and Analysisâ section may be âforward-lookingâ. Such âforward lookingâ statements are subject to risks and uncertainties and therefore actual results could be different from what your Directors envisage in terms of future performance and outlook.
ACKNOWLEDGEMENT
Your Directors express their sincere appreciation for the contribution and commitment of the employees of your Company at all levels and for the excellent support provided by the members, customers, distributors, suppliers, bankers, media and other Stakeholders, during the financial year under review. Your Company looks forward to continued and unstinted support in its endeavor to make lives of consumers better by providing world class products at affordable price.
For and on behalf of the Board of Directors
For Jyothy Laboratories Limited
Sd/-
M. P. Ramachandran
Place: Mumbai Chairman & Managing Director
Date: May 7, 2019 (DIN: 00553406)
Mar 31, 2018
Directors'' Report
Dear Members,
It is our pleasure to present the 27th Annual Report of your Company together with the Audited Financial Statements for the financial year ended March 31, 2018.
FINANCIAL PERFORMANCE
Your Company''s financial performance on standalone basis for the financial year ended March 31, 2018 compared with previous financial year is summarized below:
(Rs, in Lacs)
Financial results |
Financial Year ended March 31, 2018 |
Financial Year ended March 31, 2017 |
Revenue from Operations |
1,71,762.19 |
1,69,815.90 |
Other Income |
2,995.11 |
1,140.08 |
Earnings before interest, tax, depreciation, amortization and impairment |
27,741.84 |
26,255.16 |
Finance Cost/ (Other Income) Net |
1,239.64 |
3,948.83 |
Depreciation on Tangibles Assets |
2,540.64 |
2,338.36 |
Amortization of Intangibles Assets |
3,118.25 |
3,135.70 |
Profit before tax |
20,848.03 |
16,595.97 |
Provision for tax |
||
- Current tax |
4,227.37 |
2,645.67 |
- Adjustment of Tax relating to earlier period |
(143.65) |
785.27 |
- Deferred Tax Charge/ (Credit) |
710.76 |
(7,039.47) |
Profit after tax |
16,053.55 |
20,204.50 |
Earning Per Share (Basic) (In Rs,) |
8.83 |
11.12 |
Earning Per Share (Diluted) (In Rs,) |
8.74 |
11.12 |
Dividend Per Share of face value of Rs, 1/- (In Rs,) |
0.50* |
6.00 |
*on the expanded capital base (on account of Bonus Issue).
PERFORMANCE HIGHLIGHTS
The Revenue from operations on standalone basis of your Company for the financial year 2017-18 grew by 1.15% and stood at Rs, 1,71,762.19 Lacs compared to Rs, 1,69,815.90 Lacs in the previous financial year. The profit before tax was at Rs, 20,848.03 Lacs as against Rs, 16,595.97 Lacs in the previous financial year, registering a growth of 25.62%. The net profit for the financial year 2017-18 amounted to Rs, 16,053.55 Lacs.
The consolidated revenue from operations of your Company for the year under review stood at '' 1,76,375.13 Lacs as against Rs, 1,74,918.49 Lacs in the previous year, reporting a growth of 0.83%. The consolidated profit before tax was at Rs, 24,073.43 Lacs registering a growth of 34.75% over the consolidated profit before tax of the previous financial year. The consolidated profit after tax for the financial year under review stood at Rs, 17,887.02 Lacs against profit after tax of Rs, 20,415.26 Lacs in the previous financial year, down by 12.38% due to reversal of tax of Rs, 6,500 Lacs on set-off of losses in financial year 2017 (Merger of Jyothy Consumer Products Marketing Limited with your Company).
DIVIDEND
Your Board is pleased to recommend for your consideration, a dividend of 50 Paisa (Paisa Fifty only) per equity share of Rs, 1/- each for the financial year 2017-18 on the expanded capital base (on account of Bonus Issue) of your Company. The aforesaid dividend will involve a total payout of Rs, 2,192.62 Lacs (inclusive of tax of Rs, 373.68 Lacs) and is subject to the approval of Members at the ensuing Annual General Meeting of your Company.
During the previous financial year, your Company had paid a total dividend of Rs, 6/- (Rupees Six only) per equity share of Re.1/- each for the financial year 2016-17 involving total cash outflow of Rs, 13,120.21 Lacs (inclusive of tax of Rs, 2,219.19 Lacs).
DIVIDEND DISTRIBUTION POLICY
Your Company has adopted a policy on Dividend Distribution formulated in accordance with Regulation 43A of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 (the Listing Regulations) and the same is annexed to this report as "Annexure - A" and can be accessed from your Company''s website at the link:
http://www.jyothylaboratories.com/admin/docs/ DIVIDEND%20DISTRIBUTI0N%20P0LICY JLL FINAL.pdf
ISSUE OF SHARES
a) Issue of Bonus Shares
The Board of Directors at their meeting held on May 16, 2018, has recommended issue of Bonus Shares in the ratio of 1:1 i.e. 1 (One) new equity share of Rs, 1/- each for every 1 (One) existing equity share of Rs, 1/- each held by the members as on the record date. Your Company has sought approval of the members by passing Ordinary Resolution through Postal Ballot. The Bonus Shares will be issued, by capitalizing a part of its securities premium account as on March 31, 2018. Post bonus issue, the equity share capital of your Company will stand increased to Rs, 36,35,88,174/- divided into 36,35,88,174 equity shares of Rs, 1/- each.
b) Issue of Equity Shares with differential rights
During the year under review and to date, your Company has not issued any shares with differential rights, hence no information prescribed under provisions of Section 43(a)(ii) of the Companies Act, 2013 (the Act) read with Rule 4(4) of the Companies (Share Capital & Debentures) Rules, 2014 has been furnished.
c) Issue of Sweat Equity Shares
During the year under review and to date, your Company has not issued any sweat equity shares. Hence no information as per the provisions of Section 54(1)(d) of the Act read with Rule 8(13) of the Companies (Share Capital & Debentures) Rules, 2014 is furnished.
d) Issue of Employee Stock Option
During the year under review, your Company in terms of the provisions of Section 62(1 )(b) read with Section 39 of the Act has issued and allotted 1,10,363 equity Shares of Rs, 1/- each to eligible employees under "Jyothy Laboratories Employees Stock Option Scheme 2014" (ESOS 2014) respectively and approved by Members of your Company at the 23rd Annual General Meeting held on August 13, 2014.
INCREASE IN SHARE CAPITAL
The Authorized Share Capital of your Company is Rs, 2,72,30,00,000 consisting of: (a) 2,72,00,00,000 equity shares of the face value of Rs, 1/- each and
(b) 30,000 11% cumulative redeemable preference shares of the face value of Rs, 100/- each.
Further, after the issue of 1,10,363 Equity Shares under ESOS 2014, the paid up equity share capital of your Company stands increased to Rs, 18,17,94,087/consisting of 18,17,94,087 equity shares of Rs, 1/- each fully paid-up.
DEBENTURES
During the year under review, your Company has partly redeemed 4000 Secured Rated Unlisted Redeemable Non-Convertible Debentures (Debentures) having face value of Rs, 10,00,000/- (Rupees Ten Lacs only) each. Accordingly, your Company has made the payment of Rs, 5,00,000 (Rupees Five Lacs only) each on 4,000 Debentures aggregating to Rs, 200 Crores on February 1, 2018 and February 8, 2018. Further, after the end of the financial year and up to the date of this report, your Company has made the balance payment of Rs, 5,00,000 (Rupees Five Lacs only) each on 4,000 Debentures aggregating to Rs, 200 Crores on April 27, 2018, pertaining to the remaining outstanding Debentures and accordingly, your Company has fully redeemed entire 4000 Secured Rated Unlisted Redeemable Non-Convertible Debentures.
EXTRACT OF ANNUAL RETURN
The Extract of Annual Return as prescribed under Section 92(3) of the Act, read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014 in prescribed Form MGT-9 is annexed to this report as "Annexure - B".
NUMBER OF MEETINGS OF THE BOARD
Your Company''s Board of Directors met 5 (five) times during the financial year ended March 31, 2018 in accordance with the provisions of the Act and Rules made there under.
The dates on which the Board of Directors met during the financial year under review are provided in the Corporate Governance Report.
AUDIT COMMITTEE
The Audit Committee of your Company consists of all Independent Directors and Mr. K. Ullas Kamath, Joint Managing Director of your Company. The detailed composition of the Audit Committee is provided in the Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board.
DIRECTORS'' RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Act, in relation to the Audited Financial Statements of your Company for the financial year ended March 31, 2018, the Board of Directors hereby confirms that:
a. i n the preparation of the annual accounts for the financial year ended March 31, 2018, the applicable accounting standards read with the requirements set out under Schedule III to the Act, have been followed and there were no material departures from the same;
b. your Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2018 and of the profit of your Company for the year ended on that date;
c. your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;
d. your Directors have prepared annual accounts of your Company on a going concern basis;
e. your Directors have laid down internal financial controls to be followed by your Company and that such internal financial controls are adequate and are operating effectively; and
f. your Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
PERFORMANCE EVALUATION
In accordance with the Act and Regulation 4(2)(f) of the Listing Regulations, your Company has framed a Policy for Evaluation of Performance of Independent Directors, Board, Committees and other Individual Directors which includes criteria for performance evaluation of Non-Executive Directors and Executive Directors. A questionnaire is formulated for evaluation of performance of the Board, its committees and individual Directors, after taking into consideration several aspects such as board composition, strategic orientation, board functioning and team dynamics. Based on the questionnaire prepared, an annual performance evaluation was carried on May 18, 2017.
Performance evaluation of Independent Directors was conducted by the Board of Directors, excluding the Director being evaluated. The criteria for performance evaluation of Independent Directors laid down by the Nomination, Remuneration and Compensation Committee include ethics and values, knowledge and proficiency, diligence, behavioral traits and efforts for personal development.
Similarly, performance evaluation of the Chairman and Non - Independent Directors was carried out by the Independent Directors. Your Directors also expressed their satisfaction with the evaluation process.
TRAINING OF INDEPENDENT DIRECTORS
All Independent Directors are familiarized with your Company, their roles, rights and responsibilities in your Company, nature of the industry in which your Company operates, business model, strategy, operations and functions of your Company through its Executive Directors and Senior Managerial Personnel. The details of programs for familiarization of Independent Directors with your Company are available on the website of your Company at the link:
http://www.jyothylaboratories.com/admin/docs/ Familiarisation%20Programme JLL 2016-17.pdf
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. Sanjay Agarwal has been appointed as Chief Financial Officer and Key Managerial Personnel of your Company w.e.f. May 16, 2018. Consequently, Mr. K Ullas Kamath has ceased to be Chief Financial Officer of your Company. Mr. Kamath will continue to act as Joint Managing Director of your Company.
In accordance with the provisions of the Act, Mr. K. Ullas Kamath, Joint Managing Director (DIN - 00506681) of your Company retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Approval from members has been sought for re-appointment of Mr. Nilesh Mehta (DIN - 00199071) and Mr. Ramakrishnan Lakshminarayanan (DIN -00238887), as Independent Directors for a period of 5 years with effect from April 1, 2019.
DECLARATION OF INDEPENDENT DIRECTORS
Pursuant to Section 134(3)(d) of the Act, your Company confirm having received necessary declarations from all the Independent Directors under Section 149(7) of the Act declaring that they meet the criteria of independence laid down under Section 149(6) of the Act and Regulation 16(b) of the Listing Regulations.
MEETING OF INDEPENDENT DIRECTORS
Your Company''s Independent Directors meet at least once in every financial year without the presence of the Executive Directors or Management Personnel of your Company and the Meeting is conducted informally. During the year under review, one meeting of Independent Director was held on May 18, 2017.
REMUNERATION POLICY
Your Company follows the policy on Nomination and Remuneration/Compensation of Directors, Key Managerial Personnel and other Employees as approved by the Nomination, Remuneration and Compensation Committee and the Board of Directors of your Company and the same has been uploaded on your Company''s website at http://www. jyothylaboratories.com/management-policies.php. Salient features of the said Policy is annexed to this report as "Annexure - C".
INSTANCES OF FRAUD, IF ANY REPORTED BY THE AUDITORS
There have been no instances of any fraud reported by the Statutory Auditors under Section 143(12) of the Act.
AUDITORS & AUDIT REPORTS
Statutory Auditors and their Report:
At the 26th Annual General Meeting held on July 11, 2017, M/s. B S R & Co. LLP, Chartered Accountants, (Firm Registration No.101248W/W-100022) were appointed as Statutory Auditors of your Company to hold office for a term of 5 years commencing from the conclusion of 26th Annual General Meeting till the conclusion of 31st Annual General Meeting subject to ratification by Members in each Annual General Meeting. However, as per the Companies (Amendment) Act, 2017 provisions of Section 139 of the Act has been amended, wherein, the requirement of ratification of appointment of Statutory Auditors at every AGM has been done away with. Accordingly, appointment of M/s. B S R & Co. LLP, Chartered Accountants, (Firm Registration No.101248W/W-100022) as Statutory Auditors of your Company, will not be placed for ratification by the members in the ensuing Annual General Meeting.
The Notes on financial statements referred to in the Auditors'' Report are self-explanatory and do not call for any further comments. The Auditors'' Report does not contain any qualification, reservation or adverse remark.
Secretarial Auditors and their Report
In terms of Section 204 of the Act, the Board of Directors of your Company on the recommendation of the Audit Committee have re-appointed M/s. Rathi & Associates, Company Secretaries, Mumbai as the Secretarial Auditors of your Company to carry out Secretarial Audit for the financial year 2018
19. The Secretarial Audit Report for the financial year 2017-18, in the prescribed Form MR-3, forms part of this Annual Report and is appended as "Annexure - D" to the Directors'' report. The report does not contain any qualification, reservation or adverse remark which calls for any explanation from the Board of Directors.
Cost Auditors and their Report
As per Section 148 of the Act read with the Companies (Cost Records and Audits) Rules, 2014, as amended, the Board of Directors of your Company on recommendation of the Audit Committee have re-appointed M/s. R. Nanabhoy & Co., Cost Accountants, Mumbai (Registration No.
000010) as the Cost Auditors to carry out the cost audit of its products covered under the Ministry of Corporate Affairs Order dated June 30, 2014 (as amended on December 31, 2014) for the financial year 2018-19. The remuneration of Cost Auditors has been approved by the Board of Directors on the recommendation of the Audit Committee and the requisite resolution for ratification of remuneration of Cost Auditors by the members has been set out in the Notice convening the 27th Annual General Meeting of your Company.
The re-appointment of M/s. R. Nanabhoy & Co., Cost Accountants, Mumbai as the Cost Auditors of your Company is within the prescribed limits of the Act and free from any disqualifications specified there under. Your Company has received the Certificate from the Cost Auditor confirming their independence and relationship on arm''s length basis.
The Cost Audit Report for the financial year ended March 31, 2017, issued by M/s. R. Nanabhoy & Co., Cost Auditors, in respect of the various products prescribed under Cost Audit Rules does not contained any qualification, reservation or adverse remark and the same was filed with the Ministry of Corporate Affairs on September 26, 2017. The Cost Audit Report for the financial year ended March 31, 2018 will be filed with the Ministry of Corporate Affairs within the prescribed time.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The details of Loans, Guarantees and Investments as prescribed under Section 186 of the Act are appended as "Annexure - E" and forms integral part of this report.
RELATED PARTY TRANSACTIONS
Pursuant to Section 134 of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Act, in the prescribed Form AOC-2 is appended as "Annexure - F" to the Directors'' report. During the year, your Company had entered into contract / arrangement / transaction with related parties which were in ordinary course of business and on arm''s length basis and none of which could be considered as material in accordance with the policy of your Company on materiality of related party transactions. Further, none of the contract/ arrangement/ transaction with related parties required approval of members as the same were within the limits prescribed under Section 188(1) of the Act and Rules framed there under.
The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed from your Company''s website at the link: http://www.jyothylaboratories.com/ admin/docs/RPT JLL Website.pdf
Attention of Members is also drawn to Note 34 to the financial statements for the year ended March 31, 2018 which sets out the related party disclosures as per Indian Accounting Standard (Ind AS) 24.
STATE OF THE COMPANY''S AFFAIRS (MANAGEMENT DISCUSSION AND ANALYSIS)
In terms of the provisions of Regulation 34(2) of the Listing Regulations, the Management Discussion and Analysis Report of your Company''s affairs for the year under review is attached and forms an integral part of this Annual Report.
TRANSFER TO RESERVES
Your Company did not transfer any sum to the General Reserve for the financial year under review. However, your Company has transferred a sum of Rs, 3,750 Lacs (Rs, 6,250 Lacs in the previous financial year) to the Debenture Redemption Reserve during the year under review.
MATERIAL CHANGES AND COMMITMENTS
Except as disclosed elsewhere in this report, no material changes and commitments which could affect your Company''s financial position have occurred between the end of the financial year 201718 and date of this report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 are annexed herewith as "Annexure - G" to this report.
RISK MANAGEMENT
The Board of Directors of your Company has designed a Risk Management Policy in a structured manner taking into consideration the following factors and the same is monitored on a periodic basis by your Company:
1. The Management Approach;
2. JLL''s Vision & Mission;
3. Key Business Goals;
4. Risk Library; and
5. Risk Management Focus.
Also, the Management has adopted the following 5 step approach keeping in view your Company''s Vision and Mission:
1. Identifying ''Key'' Business goals;
2. Identifying the Risk Management focus;
3. Identifying Business risks;
4. Prioritizing the identified business risks; and
5. Rating the current risk management capability for identified risks.
Further, your Company has identified Key Business Goals for a five year horizon and a library of risk events which could be bottleneck in achieving the same. After defining the key business goals and the library of risk events, your Company identified the goals on which the management would focus.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Company has been a firm believer that each and every individual including an artificial person owe something to the society at large. Mr. M. P. Ramachandran, Chairman & Managing Director of your Company even before the inception of Corporate Social Responsibility provisions under the Companies Act, 2013, has been involved in charitable and social activities in his individual capacity.
Your Company for the financial year 2017-18 was required to spend an amount of Rs, 335.03 Lacs (2% of the average net profits of last three financial years) towards Corporate Social Responsibility (CSR) activities. Your Company in the financial year 201718 was also required to spend an unspent amount of Rs, 55.73 Lacs pertaining to the previous financial year 2016-17. Accordingly, your Company was required to spend an aggregate amount of Rs, 390.76 lacs (i.e. Rs, 335.03 lacs plus Rs, 55.73 lacs) towards CSR. However, your Company for the financial year 201718 has spent Rs, 508.78 Lacs which was higher than the statutory requirement of 2% of the average net profits for the last three financial years.
The Annual Report on CSR activities that includes details about CSR Policy developed and implemented by your Company and CSR initiatives taken during the financial year 2017-18 in accordance with Section 135 of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed herewith as "Annexure - H" to this Report
Details about the CSR Policy adopted and formulated by your Company can be accessed from your Company''s website at the link:
http://www.jyothylaboratories.com/admin/docs/JLL CSR%20Policy Website.pdf.
CHANGE IN NATURE OF BUSINESS
During the year under review, there was no change in the nature of business of your Company.
PERFORMANCE OF SUBSIDIARIES, ASSOCIATE COMPANIES/ JOINT VENTURES
A statement containing the salient features of the financial statements of your Company''s Subsidiaries, Associates and Joint Venture Companies in the prescribed format AOC-1 is presented in separate section forming part of the financial statements and hence not repeated here for the sake of brevity. Policy for determining material subsidiaries formulated and adopted by your Company can be accessed from your Company''s website at the link: http:// www.jyothylaboratories.com/admin/docs/PMS JLL Website.pdf
No Company has become or ceased to be its subsidiary, Joint venture or associate company during the financial year 2017-18.
FIXED DEPOSITS
Your Company did not accept/ renew any fixed deposits from public and no fixed deposits were outstanding or remained unclaimed as on March 31, 2018.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by any Regulator/ Court that would impact the going concern status of your Company and its future operations.
INTERNAL FINANCIAL CONTROLS
The Internal Financial Controls adopted and followed by your Company are adequate and are operating effectively. Your Company has adopted a dynamic Internal Financial Controls framework formulated by Ernst & Young, LLP based on the best practices followed in the industry. Under the said framework, Risk and Control Matrix are defined for the following process(es):-
1. Fixed Assets;
2. Financial Statement Closing Process;
3. Information Technology;
4. Inventory Management;
5. Marketing and Advertising;
6. Order to Cash;
7. Payroll;
8. Production Process;
9. Purchase to Pay;
10. Taxation; and
11. Treasury.
During the year under review, no material or serious observations has been received from the Internal Auditors of your Company regarding inefficiency or inadequacy of such controls.
CONSOLIDATED ACCOUNTS
The consolidated financial statements of your Company are prepared in accordance with the relevant Indian Accounting Standards issued by the Central Government under Section 133 of the Act and forms integral part of the Annual Report.
CORPORATE GOVERNANCE
The report on Corporate Governance as stipulated under Regulation 34(3) read with Schedule V of the Listing Regulations together with the Certificate received from your Company''s Statutory Auditors confirming compliance of Corporate Governance requirements is attached and forms an integral part of this report.
BUSINESS RESPONSIBILITY REPORT
The Securities and Exchange Board of India (SEBI), vide amendment to Regulation 34(2)(f) of the Listing Regulations dated December 22, 2015, had extended the applicability of Business Responsibility Reports to top 500 listed companies based on market capitalization. Your Company being one of the top 500 listed Companies is required to report on Business responsibility. Accordingly, the report on Business Responsibility forms an integral part of this report.
COMPLIANCE WITH SECRETARIAL STANDARDS
During the year under review, your Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.
REMUNERATION/ COMMISSION FROM ANY OF ITS SUBSIDIARIES
During the year under review, neither the Managing Director nor the Whole Time Directors of your Company received any remuneration or commission from any of its Subsidiaries.
EMPLOYEE STOCK OPTION SCHEME (ESOS)
Your Company has adopted Jyothy Laboratories Employee Stock Option Scheme 2014-A ("ESOS 2014-A") for granting of options to Mr. S. Raghunandan, the then Whole Time Director and Chief Executive Officer of your Company (relinquished the office of Whole Time Director and Chief Executive Officer of the Company w.e.f. May 23, 2016) and Jyothy Laboratories Employee Stock Option Scheme 2014 ("ESOS 2014") for granting of options to other eligible employees of your Company as approved by the Members of your Company at the 23rd Annual General Meeting held on August 13, 2014.
Disclosure as required under Section 62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 and Regulation 14 of the Securities Exchange Board of India (Share Based Employee Benefits) Regulation, 2014 are furnished below:
Jyothy Laboratories Employee Stock Option Scheme 2014-A ("ESOS 2014-A") |
Jyothy Laboratories Employee Stock Option Scheme 2014 ("ESOS 2014") |
||
1 |
Date of Shareholders'' approval |
August 13, 2014 |
August 13, 2014 |
2 |
Total number of options approved under ESOS |
27,15,352 |
27,15,352 |
3 |
Vesting Requirements |
Options granted under ESOS 2014-A would Vest after One year but not later than four years from the date of grant of such options. Vesting of options would be subject to continued employment with the Company and certain performance parameters. |
Options granted under ESOS 2014 would Vest after One year but not later than four years from the date of grant of such options. Vesting of options would be subject to continued employment with the Company and certain performance parameters |
4 |
Exercise price or pricing formula |
?1/- per option |
''1/- per option |
5 |
Maximum term of options granted |
5 years |
5 years |
6 |
Source of shares |
Primary |
Primary |
7 |
Variation in terms of option |
No variation in the terms of option |
No variation in the terms of the option |
8 |
Method of Option Valuation |
Intrinsic Value |
Intrinsic Value |
Jyothy Laboratories Employee Jyothy Laboratories Employee |
||
Stock Option Scheme 2014-A Stock Option Scheme 2014 ("ESOS |
||
("ESOS 2014-A") |
2014") |
|
9 Option Movement during the year |
||
Number of Options outstanding |
18,10,235 |
1,35,137 |
at the beginning of the period |
||
Number of options granted |
- |
- |
during the year |
||
Number of options forfeited/ |
- |
24,774 |
lapsed during the year |
||
Number of options vested |
- |
1,10,363 |
during the year |
||
Number of options exercised |
- |
1,10,363 |
during the year |
||
Number of shares arising as a |
- |
1,10,363 |
result of exercise of options |
||
Money realized by exercise of |
- |
1,10,363 |
options (Amount in '') |
||
Loan repaid by the Trust during |
N.A. |
N.A. |
the year from exercise price |
||
received |
||
Number of Options outstanding |
18,10,235 |
0 |
at the end of the year |
||
Number of options exercisable |
18,10,235 |
0 |
at the end of the year |
||
10 Employee Wise details of Options Granted |
||
i. Senior Managerial Personnel |
||
Name |
Designation |
Options Granted Exercise Price during the Year |
None |
- |
- - |
ii. any other employee who receives a grant in any one year of option amounting to 5% or more of option |
||
granted during the year; and |
||
Name |
Designation |
Options Granted Exercise Price during the Year |
None |
- |
- - |
iii. identified employees who were granted option, during any one year, equal to or exceeding 1% of the |
||
issued capital (excluding outstanding warrants and conversations) of the Company at the time of grant. |
||
Name |
Designation |
Options Granted Exercise Price during any one Year |
Mr. S. Raghunandan |
Whole Time Director & Chief Executive Officer* |
27,15,352# ''1/- per Option |
*Ceased to be Whole Time Director and Chief Executive Officer of the Company and re-designated as President of the Company w.e.f. May 23, 2016.
# Options Granted to Mr. S. Raghunandan during the financial year 2014-15.
Note: Other details as required under Regulation 14 of the Securities Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 read with SEBI circular bearing number CIR/CFD/POLICY CELL/2/2015 dated June 16, 2015 forms part of the Notes to Accounts of the Financial Statements in the Annual Report.
Further the aforesaid details are also available on your Company''s website at the link: http://www.jyothylaboratories.com/admin/docs/ESOP Reg.%2014.pdf
The certificate from the Statutory Auditors in respect of implementation of Jyothy Laboratories Employee Stock Option Scheme 2014-A ("ESOS 2014-A") and Jyothy Laboratories Employee Stock Option Scheme 2014 ("ESOS 2014") in accordance with the resolution passed by the Members at the 23rd Annual General Meeting of your Company held on August 13, 2014, shall be placed at the ensuing Annual General Meeting for inspection by Members.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
Your Company has a Vigil Mechanism in place which includes a Whistle Blower Policy in terms of the Listing Regulations for Directors and employees of your Company to provide a mechanism which ensures adequate safeguards to Employees and Directors from any victimization on raising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any financial statements and reports etc.
The Vigil Mechanism/ Whistle Blower Policy of your Company can be accessed from your Company''s website at the link:
http://www.jyothylaboratories.com/admin/docs/ JLL Vigil%20Mechanism%20Policy amended Final 28012016.pdf
The Whistle Blowers have a right/option to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Codes of Conduct or policy directly to the Chairman of the Audit Committee. During the year under review no protected disclosure from any Whistle Blower was received by the designated officer under the Vigil Mechanism.
INTERNAL CONTROL SYSTEMS
Your Company has adequate internal control systems and procedures in place for effective and smooth conduct of business and to meet exigencies of operation and growth. Your Company has set up Standard Operating Process (SOP), procedures and controls apart from regular Internal Audits. Roles and responsibilities have been laid down for each process owners. Management Information System has been established which ensure that adequate and accurate information is available for reporting and decision making.
Internal Audit is conducted by an independent firm of Chartered Accountants viz. M/s. Mahajan & Aibara Chartered Accountants, LLP. Internal Auditors regularly check the adequacy of the system, their observations are reviewed by the management and remedial measures, as necessary, are taken. Internal Auditors report directly to the Chairman of the Audit Committee to maintain its objectivity and independence.
Your Company has also in place a ''Compliance Tool'' designed and implemented by Ernst & Young, LLP which ensures compliance with the provisions of all applicable laws to your Company adequately and efficiently.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
Transfer of Equity Shares:
Pursuant to the provisions of Section 124(6) of the Act and the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 notified by the Ministry of Corporate Affairs on September 7, 2016 and subsequently amended vide notification dated February 28, 2017, all the equity shares of the Company in respect of which dividend amounts have not been paid or claimed by the shareholders for seven consecutive years or more are required to be transferred to demat account of Investor Education and Protection Fund Authority (IEPF Account).
Accordingly, 2,745 shares of 59 members of your Company were transferred to IEPF Account on December 22, 2017. Your Company had sent individual notice to all the aforesaid 59 members of your Company and has also published the notice in the leading English and Marathi newspapers. The details of the aforesaid 59 members are available on the website of your Company viz. www.jyothylaboratories.com.
Transfer of Unpaid/ Unclaimed Dividend:
Further, pursuant to the provisions of Section 124(5) of the Act, the dividend which remained unclaimed/ unpaid for a period of seven years from the date of transfer to unpaid dividend account is required to be transferred to the Investor Education and Protection Fund (IEPF) established by the Central Government.
As a result, the unclaimed/ unpaid dividend for the year 2009-10 which remained unpaid and unclaimed for a period of 7 years has been already transferred by your Company to the IEPF.
Your Company has uploaded the details of unclaimed/ unpaid dividend for the financial year 2009-10 onwards on its website viz., www.jyothylaboratories. com and on website of the Ministry of Corporate Affairs viz., www.mca.gov.in and the same gets revised/ updated from time to time pursuant to the provisions of IEPF (Uploading of Information Regarding Unpaid and Unclaimed Amount Lying with Companies) Rules, 2012.
Further, the unpaid dividend amount pertaining to the financial year 2010-11 will be transferred to IEPF during the Financial Year 2018-19.
EMPLOYEE RELATIONS
Your Company has always provided a congenial atmosphere for work to all its employees that is free from discrimination and harassment. Employee relations remained cordial during the year under review.
MANUFACTURING FACILITIES
Your Company has state-of-the-art facilities at all of its manufacturing locations spread across India. Furthermore, six manufacturing plants of your Company situated at Roorkee, Wayanad, Jammu, Pithampur, Puducherry and Baddi are ISO 9001-2015 certified.
PREVENTION OF SEXUAL HARASSMENT
Your Company has framed ''Anti - Sexual Harassment Policy'' at workplace and has constituted an Internal Complaints Committee (ICC) as per the requirement of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed there under. No complaints with allegations of any sexual harassment were reported during the year under review.
PARTICULARS OF EMPLOYEES
The disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended and forming part of the Directors'' Report for the year ended March 31, 2018 is annexed herewith as "Annexure - I" to this Report.
CAUTIONARY NOTE
Certain statements in the "Management Discussion and Analysis" section may be ''forward-looking''. Such ''forward looking'' statements are subject to risks and uncertainties and therefore actual results could be different from what your Directors envisage in terms of future performance and outlook.
ACKNOWLEDGEMENT
Your Directors express their sincere appreciation for the contribution and commitment of the employees of your Company at all levels and for the excellent support provided by the members, customers, distributors, suppliers, bankers, media and other Stakeholders, during the financial year under review. Your Company looks forward to continued and unstinted support in its endeavor to make lives of consumers better by providing world class products at affordable price.
For and on behalf of the Board of Directors
For Jyothy Laboratories Limited
Sd/-
M. P. Ramachandran
Chairman & Managing Director
(DIN: 00553406)
Mumbai, May 16, 2018
Mar 31, 2017
Dear Members,
It is our pleasure to present the 26th Annual Report of your Company together with the Audited Financial Statements for the financial year ended March 31, 2017.
FINANCIAL PERFORMANCE
The Company''s financial performance on standalone basis for the year ended March 31, 2017 compared with previous financial year is summarized below:
(Rs. in Crore)
Particulars |
Financial Year ended March 31, 2017 |
Financial Year ended March 31, 2016 |
Gross Revenue from Operations |
1698.16 |
1608.90 |
Other Income |
4.24 |
11.74 |
Earnings before interest, tax, depreciation, amortization and impairment |
264.39 |
239.75 |
Interest & Finance Charges/(Income) Net |
43.73 |
52.12 |
Depreciation and Amortization- Tangibles |
23.38 |
23.08 |
Depreciation and Amortization- Intangibles |
31.36 |
31.12 |
Profit before tax and Share of (profit)/loss of an associate and a joint venture |
165.92 |
133.42 |
Share of (profit)/loss of an associate and a joint venture |
(0.04) |
0.07 |
Profit Before Tax |
165.96 |
132.34 |
Provision for tax |
||
- Current tax- (MAT) |
- |
14.52 |
- Adjustment of Tax relating to earlier period |
7.85 |
- |
- Deferred Tax Charge |
(43.94) |
44.30 |
Profit after tax |
202.05 |
74.52 |
Earnings Per Share (Basic) (In H) |
11.12 |
4.12 |
Earnings Per Share (Diluted) (In H) |
11.12 |
4.06 |
Dividend Per Share of face value of H1/- (In H) |
6.00 |
5.00 |
PERFORMANCE HIGHLIGHTS
The gross revenue from operations (inclusive of excise duty) on standalone basis of your Company for the financial year 2016-17 grew by 5.55% and stood at Rs.1698.16 Crore compared to Rs.1,608.90 Crore in the previous financial year. The profit before tax was at Rs.165.96 Crore as against Rs.133.34 Crore in the previous financial year, registering a growth of 24.46%. The net profit for the financial year 2016-17 amounted to Rs.202.05 Crore compared to Rs.74.52 Crore in the previous financial year, depicting a growth of 171.14%.
The consolidated gross revenue from operations (inclusive of excise duty) of your Company for the year under review stood at Rs.1749.19 Crore as against Rs.1659.51 Crore in the previous year, reporting a growth of 5.40%. The consolidated profit before tax was at Rs.178.65 Crore registering a growth of 24.84% over the consolidated profit before tax of the previous financial year. The consolidated profit after tax for the financial year under review stood at H204.15 Crore against profit after tax of Rs.73.81 Crore in the previous financial year, reflecting a growth of 176.59%.
DIVIDEND
The Board is pleased to recommend a dividend of H6/-(Rupees Six) per Equity Share (i.e. @ 600% of face Value of Equity Share of Rs.1/- each) for the financial year ended March 31, 2017. The aforesaid dividend will involve a total payout of Rs.131.20 Crore (inclusive of tax of Rs. 22.19 Crore) and is subject to the approval of Members at the ensuing Annual General Meeting of your Company.
During the previous financial year, your Company had paid a total dividend of Rs.5/- (Rupees Five) per Equity Share of Rs.1/- each for the financial year 2015-16 including interim dividend of Rs.4/- (Rupees Four) per Equity share of Rs.1/- each involving total cash outflow of Rs.109.00 Crore (inclusive of tax of Rs.18.44 Crore).
DIVIDEND DISTRIBUTION POLICY
Your Company has adopted a policy on Dividend Distribution formulated in accordance with the Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as ''Listing Regulations''), and the same is attached as annexure to this report and can be accessed from your Company''s website at the link: http://www.jyothylaboratories. com/admin/docs/DIVIDEND%20DISTRIBUTIQN%20 POLICY JLL FINAL.pdf
TRANSFER TO RESERVES
Your Company did not transfer any sum to the General Reserve for the financial year under review. However, your Company has transferred a sum of Rs.62.50 Crore (Rs.45.60 Crore in the previous financial year) to the Debenture Redemption Reserve during the year under review.
CONSOLIDATED ACCOUNTS
The consolidated financial statements of your Company are prepared in accordance with the relevant Indian Accounting Standards issued by the Central Government under Section 133 of the Companies Act, 2013 and forms integral part of the Annual Report.
PERFORMANCE OF SUBSIDIARIES, ASSOCIATE COMPANIES/ JOINT VENTURES
A report on the performance and financial position of each of the Subsidiaries, Associates and Joint Venture Companies as per the Companies Act, 2013 is attached as Annexure to this report and hence not repeated here for the sake of brevity. Policy for determining material subsidiaries formulated and adopted by your Company can be accessed from your Company''s website at the link: http://www.jyothylaboratories.com/admin/docs/ PMS JLL Website.pdf
During the year under review, Jyothy Consumer Products Marketing Limited - JCPML (Wholly Owned Subsidiary of your Company) amalgamated with your Company pursuant to the Scheme of Amalgamation sanctioned by the Hon''ble Mumbai Bench of National Company Law Tribunal vide its Order dated March 1, 2017. The Appointed date for the above mentioned amalgamation was April 1, 2016 which came into effect on March 17, 2017 after filing of certified copy of the Order of the Hon''ble Mumbai Bench of National Company Law Tribunal with the Registrar of Companies and/ or Ministry of Corporate Affairs.
Except as mentioned above, no Company has become or ceased to be its subsidiaries, joint ventures or associate companies during the financial year 2016-17.
DIRECTORS'' RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Companies Act, 2013, in relation to the Audited Financial Statements of your Company for the financial year ended March 31, 2017, the Board of Directors hereby confirms that:
a. in the preparation of the annual accounts for the financial year ended March 31, 2017, the applicable accounting standards read with the requirements set out under Schedule III to the Act, have been followed and there were no material departures from the same;
b. your Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2017 and of the profit of your Company for the year ended on that date;
c. your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;
d. your Directors have prepared annual accounts of your Company on a going concern basis;
e. your Directors have laid down internal financial controls to be followed by your Company and that such internal financial controls are adequate and are operating effectively; and
f. your Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
In terms of the provisions of Regulation 34(2) of the Listing Regulations, the Management Discussion & Analysis Report is attached and forms an integral part of this Report.
ISSUE OF SHARES
Issue of Equity Shares with differential rights
During the year under review and to date, your Company has not issued any shares with differential rights, hence no information prescribed under provisions of Section 43(a)(ii) of the Companies Act, 2013 read with Rule 4(4) of the Companies (Share Capital & Debentures) Rules, 2014 has been furnished.
Issue of Sweat Equity Shares
During the year under review and to date, your Company has not issued any sweat equity shares. Hence no information as per the provisions of Section 54(1)(d) of the Companies Act, 2013 read with Rule 8(13) of the Companies (Share Capital & Debentures) Rules, 2014 is furnished.
Issue of Employee Stock Option
During the year under review, your Company in terms of the provisions of Section 62(1)(b) read with Section 39 of the Companies Act, 2013 has issued and allotted 4,52,558 (Four Lacs Fifty Two Thousand Five Hundred and Fifty Eight) Equity Shares of Rs.1/- each to Mr. S. Raghunandan under âJyothy Laboratories Employees Stock Option Scheme 2014-A" (ESOS 2014-A) and 1,11,486 (One Lac Eleven Thousand Four Hundred and Eighty Six) Equity Shares of H1/- each to other eligible employees under âJyothy Laboratories Employees Stock Option Scheme 2014" (ESOS 2014) respectively as approved by Members of your Company at the 23rd Annual General Meeting held on August 13, 2014.
INCREASE IN SHARE CAPITAL
During the year under review, pursuant to the Scheme of Amalgamation of Jyothy Consumer Products Marketing Limited into your Company, the Authorised Share Capital of your Company has increased to Rs.2,72,30,00,000 consisting of: (a) 2,72,00,00,000 Equity Shares of the face value of Rs.1/- each and (b) 30,000 11% Cumulative Redeemable Preference Shares of the face value of Rs.100/- each.
Further, after the issue of 5,64,044 Equity Shares under ESOS 2014 and ESOS 2014-A, the Paid up Equity Share Capital of your Company stands increased to Rs.18,16,83,724 consisting of 18,16,83,724 equity shares of your Company of Rs.1/- each fully paid-up.
DEBENTURES
During the year under review, your Company redeemed 4000 Zero Coupon Secured Redeemable Non-Convertible Debentures of Rs.10,00,000/- each aggregating to Rs.400 Crores on November 11, 2016 at an aggregate redemption premium of Rs.146.73 Crores.
Further, your Company during the year under review has also raised Rs.400 Crores through private placement of 4000 Secured Rated Unlisted Redeemable Nonconvertible Debentures of face value of Rs.10,00,000/-each on December 9, 2016 to refinance its existing debt.
CORPORATE GOVERNANCE
The report on Corporate Governance as stipulated under Regulation 34(3) read with Schedule V of the Listing Regulations together with the Certificate received from your Company''s Statutory Auditors confirming compliance of Corporate Governance requirements is attached and forms an integral part of this report.
BUSINESS RESPONSIBILITY REPORT
The Securities and Exchange Board of India (SEBI), vide amendment to Regulation 34(2)(f) of the Listing Regulations dated December 22, 2015, had extended the applicability of Business Responsibility Reports to top 500 listed companies based on market capitalization. Earlier, the requirement of Business Responsibility Report was applicable only to Top 100 Listed entities based on market capitalization. As a result, your Company being one of the top 500 listed Companies is required to report on Business Responsibility. Accordingly, the report on Business Responsibility is attached as annexure and forms an integral part of this report.
RELATED PARTY TRANSACTIONS
Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed form AOC-2 is appended as Annexure to the Board''s report. During the year, your Company had entered into contract / arrangement / transaction with related parties which were on arm''s length basis and none of which could be considered as material in accordance with the policy of your Company on materiality of related party transactions. Further none of the contract/ arrangement/ transaction with related parties required approval of shareholders as the same were within the limits prescribed under Section 188(1) of the Companies Act, 2013 and the Rules framed there under.
The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed from your Company''s website at the link: http://www.jyothylaboratories. com/admin/docs/RPT JLL Website.pdf
Attention of Members is also drawn to Note 35 to the financial statements for the year ended March 31, 2017 which sets out the related party disclosures as per the Indian Accounting Standard (Ind AS) 24.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Company has been a firm believer that each and every individual including an artificial person owe something to the society at large. Mr. M. P. Ramachandran, Chairman & Managing Director of your Company even before the inception of Corporate Social Responsibility provisions under the Companies Act, 2013, has been involved in charitable and social activities in his individual capacity.
Your Company has undertaken projects in the area of skill development, promotion of education and rural development as part of its CSR initiative. These projects were in accordance with Schedule VII to the Companies Act, 2013 and the CSR policy framed by your Company. The report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is appended as annexure and forms an integral part of this report.
Details about the CSR Policy adopted and formulated by your Company can be accessed from your Company''s website at the link: http://www.jyothylaboratories. com/admin/docs/JLL CSR%20Policy Website.pdf
Your Company was required to spend Rs.294.10 lacs (2% of the average net profits of last three financial years) on CSR activities during the financial year 2016-17. Accordingly, your Company spent Rs.238.37 lacs on CSR activities during the year 2016-17 and an amount of Rs.55.73 lacs stands committed towards contribution for skill development etc. and the same will be expended in the current financial year. Further an amount of Rs.6.06 lacs pertaining to financial year 2015-16 was spent towards housing in adivasi area of Trichur District, Kerala in the financial year 2016-17.
MATERIAL CHANGES AND COMMITMENTS
Except as disclosed elsewhere in this report, no material changes and commitments which could affect your Company''s financial position have occurred between the end of the financial year 2016-17 and date of this report.
INTERNAL FINANCIAL CONTROLS
The Internal Financial Controls adopted and followed by your Company are adequate and are operating effectively. Your Company has adopted a dynamic Internal Financial Controls framework formulated by Ernst & Young, LLP based on the best practices followed in the industry. Under the said framework, Risk and Control Matrix are defined for the following process(es):-
1. Fixed Assets;
2. Financial Statement Closing Process;
3. Information Technology;
4. Inventory Management;
5. Marketing and Advertising;
6. Order to Cash;
7. Payroll;
8. Production Process;
9. Purchase to Pay;
10. Taxation;
11. Treasury.
During the year under review, no material or serious observations has been received from the Internal Auditors of your Company regarding inefficiency or inadequacy of such controls.
CHANGE IN NATURE OF BUSINESS
During the year under review, there was no change in the nature of business of your Company.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by any Regulator/ Court that would impact the going concern status of your Company and its future operations.
REMUNERATION/ COMMISSION FROM ANY OF ITS SUBSIDIARIES
During the year under review, neither the Managing Director nor the Whole Time Directors of your Company received any remuneration or commission from any of its Subsidiaries.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The details of Loans, Guarantees and Investments as prescribed under Section 186 of the Companies Act, 2013 are appended as Annexure and forms integral part of this report.
EMPLOYEE STOCK OPTION SCHEME (ESOS)
Your Company has adopted Jyothy Laboratories Employee Stock Option Scheme 2014 -A (âESOS 2014-A") for granting of options to Mr. S. Raghunandan, Whole Time Director and Chief Executive Officer of your Company (relinquished the office of Whole Time Director and Chief Executive Officer of the Company w.e.f. May 23, 2016) and Jyothy Laboratories Employee Stock Option Scheme 2014 (âESOS 2014") for granting of options to other eligible employees of your Company as approved by the Members of your Company at the 23rd Annual General Meeting held on August 13, 2014.
Disclosure as required under Section 62(1)(b) of the Companies Act, 2013 read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 and Regulation 14 of the Securities Exchange Board of India (Share Based Employee Benefits) Regulation, 2014 are furnished below:
Jyothy Laboratories Employee Stock Option Scheme 2014- A (âESOS 2014-A") |
Jyothy Laboratories Employee Stock Option Scheme 2014 (âESOS 2014") |
||
1 |
Date of Shareholders'' approval |
August 13, 2014 |
August 13, 2014 |
2 |
Total number of options approved under ESOS |
27,15,352 |
27,15,352 |
3 |
Vesting Requirements |
Options granted under ESOS 2014-A would Vest after one year but not later than four years from the date of grant of such options. Vesting of options would be subject to continued employment with the Company and certain performance parameters. |
Options granted under ESOS 2014 would Vest after one year but not later than four years from the date of grant of such options. Vesting of options would be subject to continued employment with the Company and certain performance parameters |
4 |
Exercise price or pricing formula |
H1 per option |
H1 per option |
5 |
Maximum term of options granted |
5 years |
5 years |
6 |
Source of shares |
Primary |
Primary |
7 |
Variation in terms of option |
No variation in the terms of option |
No variation in the terms of the option |
8 |
Method of Option Valuation |
Intrinsic Value |
Intrinsic Value |
9 |
Option Movement during the year |
||
Number of Options outstanding at the beginning of the |
22,62,793 |
3,00,804 |
|
period |
|||
Number of options granted during the year |
- |
- |
|
Number of options forfeited/ lapsed during the year |
- |
54,181 |
|
Number of options vested during the year |
4,52,558 |
1,11,486 |
|
Number of options exercised during the year |
4,52,558 |
1,11,486 |
|
Number of shares arising as a result of exercise of options |
4,52,558 |
1,11,486 |
|
Money realized by exercise of options (Amount in H) |
4,52,558 |
1,11,486 |
|
Loan repaid by the Trust during the year from exercise |
N.A. |
N.A. |
|
price received |
|||
Number of Options outstanding at the end of the year |
18,10,235 |
1,35,137 |
|
Number of options exercisable at the end of the year |
18,10,235 |
1,35,137 |
|
10 |
Employee Wise details of Options Granted |
||
i. Senior Managerial Personnel |
|||
Name Designation |
Options Granted during the Year |
Exercise Price |
|
None - |
- |
- |
Jyothy Laboratories Employee Stock Option Scheme 2014- A (âESOS 2014-A") |
Jyothy Laboratories Employee Stock Option Scheme 2014 (âESOS 2014") |
|||||
ii. any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during the year; and |
||||||
Name |
Designation |
Options Granted during the Year |
Exercise Price |
|||
None |
- |
- |
- |
|||
iii. identified employees who were granted option, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversations) of the company at the time of grant. |
||||||
Name |
Designation |
Options Granted during any one Year |
Exercise Price |
|||
Mr. S. Raghunandan |
Whole Time Director & Chief Executive Officer* |
27,15,352# |
Rs.1/- per Option |
|||
*Ceased to be Whole Time Director and Chief Executive Officer of the Company and re-designated as President of the Company w.e.f. May 23, 2016.
# Options Granted to Mr. S. Raghunandan during the financial year 2014-15.
Note: Other details as required under Regulation 14 of the Securities Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 read with SEBI circular bearing number CIR/CFD/POLICY CELL/2/2015 dated June 16, 2015 forms part of the Notes to Accounts of the Financial Statements in the Annual Report.
Further, the aforesaid details are also available on your Company''s website at the link: http://www.jyothylaboratories. com/admin/docs/ESOP Reg.%2014.pdf
The certificate from the Statutory Auditors in respect of implementation of Jyothy Laboratories Employee Stock Option Scheme 2014-A (âESOS 2014-A") and Jyothy Laboratories Employee Stock Option Scheme 2014 (âESOS 2014") in accordance with the resolution passed by the Members at the 23rd Annual General Meeting of your Company held on August 13, 2014, shall be placed at the ensuing Annual General Meeting for inspection by Members.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the Companies Act, 2013 and the Article 140 of the Articles of Association of your Company, Ms. M. R. Jyothy, Whole Time Director and Chief Marketing Officer of your Company retires by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re-appointment.
During the year under review, the members approved re-appointment of Mr. M. P. Ramachandran as the Chairman and Managing Director of your Company for a term of five years with effect from August 22, 2016 to August 21, 2021 at the 25th Annual General Meeting of your Company held on July 21, 2016 by passing special resolution.
Further, the members have also approved re-appointment of Mr. K. Ullas Kamath as the Joint Managing Director and Chief Financial Officer of your Company for a term of five years with effect from January 23, 2017 to January 22, 2022 and Ms. M. R. Jyothy as the Whole Time Director and Chief Marketing Officer of your Company for a term of five years with effect from January 1, 2017 to December 31, 2021 through Postal Ballot dated December 1, 2016.
Mr. Bipin R. Shah resigned as the Independent Director of your Company with effect from August 11, 2016. The Board placed on record, its appreciation for the contribution made by Mr. Shah during his tenure as the Independent Director.
All Independent Directors have given declarations that they meet the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013.
POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
The Board in accordance with the provisions of sub-section (3) of Section 178 of the Companies Act, 2013, formulated the policy setting out the criteria for determining qualifications, positive attributes, independence of a Director and remuneration for Directors, Key Managerial Personnel and other employees.
Major criteria defined in the Policy framed for appointment of the Directors including criteria for determining qualifications, positive attributes, Independence etc. are as under:
(I) Selection
In case of Executive Directors and Key Managerial Personnel, the selection can be made either by recruitment from outside or from within your Company hierarchy or upon recommendation by the Chairman or other Directors. The appointment may be made either to fill up a vacancy caused by retirement, resignation, death or removal of an existing Executive Director and Key Managerial Personnel or it may be a fresh appointment.
In case of Non-Executive Directors, the selection can be made either by way of selection from the data bank of Independent Directors maintained by the Government of India or upon recommendation by the Chairman or other Directors. The appointment may be made either to fill up a vacancy caused by resignation, death or removal of an existing Non-Executive Director or it may be an appointment as an additional director or an alternate director.
(II) Qualifications, Experience and Positive Attributes
a) While appointing a Director, it has to be ensured that the candidate possesses appropriate skills, experience and knowledge in one or more fields of finance, law, management, sales, marketing, administration, research, corporate governance, technical operations or other disciplines related to your Company''s business.
b) In case of appointment as an Executive Director, the candidate must have the relevant technical or professional qualifications and experience as are considered necessary based on the job description of the position. In case no specific qualification or experience is prescribed or thought necessary for the position then, while recommending the appointment, the Human Resource Department shall provide the job description to the Committee and justify that the qualifications, experience and expertise of the recommended candidate are satisfactory for the relevant appointment. In such circumstances, the Committee may call for an expert opinion on the appropriateness of the qualifications and experience of the candidate for the position of the Executive Director.
c) In case of appointment as a Non-Executive Director, the candidate must have a post graduate degree, diploma or a professional qualification in the field of his practice/ profession/ service and shall have not less than five years of working experience in such field as a professional in practice, advisor, consultant or as an employee. Provided that the Board may waive the requirements of qualification and/ or experience under this paragraph for a deserving candidate.
d) The Board, while making the appointment of a Director, shall also try to assess from the information available and from the interaction with the candidate that he is a fair achiever in his chosen field and that he is a person with integrity, diligence and open mind.
(III) Board Diversity and Independence
While making appointment of directors, following principles shall be observed by the Board, as far as practicable:
a) There shall be a proper mix of Executive and Non-Executive Directors and Independent and Non-Independent Directors on the Board. Your Company must always be in compliance of the provisions of Section 149 of the Companies Act, 2013 and Clause 17 of the Listing Regulations, as amended from time to time, in this regard.
b) There shall be a workable mix of directors drawn from various disciplines, like technical, finance, commercial, legal etc. The Board shall not at any time be entirely comprised of persons drawn from one discipline or field.
c) While appointing a director to fill in a casual vacancy caused by death, resignation etc. of a director, an effort shall be made, as far as possible, to appoint such a person in his place who has the relevant experience in the fields or disciplines in which the outgoing director had the experience or the person with relevant experience in the fields or disciplines which are not represented in the Board as requisite to business of your Company.
d) No preference on the basis of gender, religion or cast shall be given while considering the appointment of directors.
e) Generally, an effort shall be made to maintain the Board diversity by appointment of persons from diverse disciplines (relevant to your Company''s business), of different age groups and of both the genders (male as well as female) as Directors.
f) While appointing Independent Directors, the criteria for the independent directors, as laid down in Section 149 (6) of the Companies Act, 2013 and Listing Regulations are followed.
REMUNERATION POLICY
Your Company follows the policy on Remuneration of Directors and Senior Management Employees as approved by the Nomination, Remuneration and Compensation Committee and the Board. A detailed report on the same is given in the Corporate Governance Report.
PERFORMANCE EVALUATION
In accordance with the Companies Act, 2013 and Regulation 4(2)(f) of the Listing Regulations, your Company has framed a Policy for Evaluation of Performance of Independent Directors, Board, Committees and other Individual Directors which includes criteria for performance evaluation of Non-Executive Directors and Executive Directors. A questionnaire is formulated for evaluation of performance of the Board after taking into consideration several aspects such as board composition, strategic orientation, board functioning and team dynamics.
Performance evaluation of Independent Directors was conducted by the Board of Directors, excluding the Director being evaluated. The criteria for performance evaluation of Independent Directors laid down by the Nomination, Remuneration and Compensation Committee include ethics and values, knowledge and proficiency, diligence, behavioral traits and efforts for personal development.
Similarly, performance evaluation of the Chairman and Non - Independent Directors was carried out by the Independent Directors. Your Directors also expressed their satisfaction with the evaluation process.
TRAINING OF INDEPENDENT DIRECTORS
All Independent Directors are familiarized with your Company, their roles, rights and responsibilities in your Company, nature of the industry in which your Company operates, business model, strategy, operations and functions of your Company through its Executive Directors and Senior Managerial Personnel. The details of programs for familiarization of Independent Directors with your Company are available on the website of your Company at the link:
http://www.jyothylaboratories.com/admin/docs/ Familiarisation%20Programme JLL 2016-17.pdf
MEETING OF INDEPENDENT DIRECTORS
Your Company''s Independent Directors meet at least once in every financial year without the presence of the Executive Directors or Management Personnel and the meeting is conducted informally. During the year under review, one meeting of Independent Director was held on May 23, 2016.
BOARD MEETINGS
The Board of Directors met 6 times during the financial year ended March 31, 2017 in accordance with the provisions of the Companies Act, 2013 and the Rules made thereunder.
The dates on which the Board of Directors met during the financial year under review are provided in the Corporate Governance Report.
AUDIT COMMITTEE
The Audit Committee of your Company consists of all Independent Directors and Mr. K. Ulass Kamath, Joint Managing Director and Chief Financial Officer of your Company. The detailed composition of the Audit Committee is provided in the Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
Your Company has a Vigil Mechanism in place which includes a Whistle Blower Policy in terms of the Listing Regulations for Directors and employees of your Company to provide a mechanism which ensures adequate safeguards to Employees and Directors from any victimization on raising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any financial statements and reports etc.
The Vigil Mechanism/ Whistle Blower Policy of your Company can be accessed from your Company''s website at the link:
http://www.jyothylaboratories.com/admin/docs/ JLL Vigil%20Mechanism%20Policy amended Final 28012016.pdf
The Whistle Blowers have a right/option to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Codes of conduct or policy directly to the Chairman of the Audit Committee. During the year under review, no protected disclosure from any Whistle Blower was received by the designated officer under the Vigil Mechanism.
RISK MANAGEMENT
The Board of Directors of your Company has designed a Risk Management Policy in a structured manner taking into consideration the following factors and the same is monitored on a periodic basis by your Company :
1. The Management Approach;
2. JLL''s Vision & Mission;
3. Key Business Goals;
4. Risk Library;
5. Risk Management Focus.
Also, the Management has adopted the following 5 step approach keeping in view your Company''s Vision and Mission:
- Identifying ''Key'' Business goals;
- Identifying the Risk Management focus;
- Identifying Business risks;
- Prioritizing the identified business risks;
- Rating the current risk management capability for identified risks.
Further, your Company identified Key Business Goals for a five year horizon and a library of risk events which could be bottleneck in achieving the same. After defining the key business goals and the library of risk events, your Company identified the goals on which the management would focus.
INTERNAL CONTROL SYSTEMS
Your Company has adequate internal control systems and procedures in place for effective and smooth conduct of business and to meet exigencies of operations and growth. Your Company has set up Standard Operating Process (SOP), procedures and controls apart from regular Internal Audits. Roles and responsibilities have been laid down for each process owners. Management Information System has been established which ensure that adequate and accurate information is available for reporting and decision making.
Internal Audit is conducted by an independent firm of Chartered Accountants viz, M/s Mahajan & Aibara Chartered Accountants LLP. Internal Auditors regularly check the adequacy of the system, their observations are reviewed by the management and remedial measures, as necessary, are taken. Internal Auditors report directly to the Chairman of the Audit Committee to maintain its objectivity and independence.
Your Company has also in place a ''Compliance Tool'' designed and implemented by Ernst & Young, LLP which ensures compliance with the provisions of all applicable laws to your Company adequately and efficiently.
AUDITORS & AUDIT REPORTS
Statutory Auditors and their Report
The present Statutory Auditors of your Company, M/s S R B C & Co LLP, Chartered Accountants (ICAI Registration No. 324982E/ E300003) have served as Statutory Auditors of your Company for a period more than two terms of five consecutive years as provided under Section 139(2) of the Companies Act, 2013 and will hold office till the conclusion of 26th Annual General Meeting (AGM) of your Company.
Therefore, the Board upon recommendation of the Audit Committee, proposed appointment of M/s B S R & Co. LLP, Chartered Accountants in place of M/s S R B C & Co LLP, Chartered Accountants, the retiring Auditors, as the Statutory Auditors, who shall hold the office from the conclusion of the 26th Annual General Meeting for a term of five consecutive years, i.e. until the conclusion of the 31st Annual General Meeting subject to ratification by the members at 27th, 28th, 29th and 30th Annual General Meeting to be held in the financial year 2018, 2019, 2020 and 2021 respectively. Further, Special Notice under Section 115 read with Section 140(4) of the Companies Act, 2013 is not required as the retiring Auditor has completed a consecutive tenure of ten years as provided under Section 139(2) of the Companies Act, 2013.
A certificate has been received from M/s B S R & Co. LLP, Chartered Accountants to the effect that they are eligible for appointment and if made would be, as per the provisions of Section 141 of the Companies Act, 2013 read with Section 139 ibid and rules made there under.
The Board placed on record its appreciation for the services rendered by M/s S R B C & Co LLP Chartered Accountants, Mumbai, as Statutory Auditors of your Company.
The Notes on financial statement referred to in the Auditors'' Report are self-explanatory and do not call for any further comments. The Auditors'' Report does not contain any qualification, reservation or any adverse remark.
Cost Auditors and their Report
As per section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audits) Rules, 2014, as amended, the Board of Directors of your Company on recommendation of the Audit Committee appointed M/s R. Nanabhoy & Co., Cost Accountants, Mumbai (Registration No. 000010) as the Cost Auditors to carry out the cost audit of its products covered under the Ministry of Corporate Affairs Order dated June 30, 2014 (as amended on December 31, 2014) for the financial year 2017-18. The remuneration of Cost Auditors has been approved by the Board of Directors on the recommendation of Audit Committee and the requisite resolution for ratification of remuneration of Cost Auditors by the members has been set out in the Notice of the 26th Annual General Meeting of your Company.
The appointment of M/s R. Nanabhoy & Co., Cost Accountants, Mumbai as the Cost Auditors of your Company is within the prescribed limits of the Companies Act, 2013 and free from any disqualifications specified there under. Your Company has received the Certificate from the Cost an Auditors confirming their independence and relationship on arm''s length basis.
The Cost Audit Report for the financial year ended 31st March 2016, issued by M/s R. Nanabhoy & Co., Cost Auditors, in respect of the various products prescribed under Cost Audit Rules does not contain any qualification, reservation or adverse remark and the same was filed with the Ministry of Corporate Affairs on September 9, 2016. The Cost Audit Report for the financial year ended March 31, 2017 is being submitted shortly.
Secretarial Auditors and their Report
In terms of Section 204 of the Companies Act, 2013, the Board had appointed M/s Rathi & Associates, Company Secretaries, Mumbai as the Secretarial Auditors of your Company to carry out Secretarial Audit for the financial year 2016-17. The report of the Secretarial Auditors in the prescribed form MR-3 is appended as annexure to this report. The report does not contain any qualification, reservation or adverse remark which calls for any explanation from the Board of Directors.
Your Board has decided to appoint M/s Rathi & Associates, Company Secretaries, Mumbai as the Secretarial Auditors of your Company for the financial year 2017-18, based on the recommendations of the Audit Committee.
INSTANCES OF FRAUD, IF ANY REPORTED BY THE AUDITORS
There have been no instances of any fraud reported by the Statutory Auditors under Section 143(12) of the Companies Act, 2013.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of Section 124(6) of the Companies Act, 2013 and the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 notified by the
Ministry of Corporate Affairs on September 7, 2016 and subsequently amended vide notification dated February 28, 2017, all the Equity Shares of the Company in respect of which dividend amounts have not been paid or claimed by the shareholders for seven consecutive years or more are required to be transferred to demat account of Investor Education and Protection Fund Authority (IEPF Account).
Accordingly, 1322 shares of your Company belonging to 28 Shareholders would be due for transfer to IEPF Account on May 31, 2017. Your Company has sent individual notices to all the aforesaid 28 shareholders of your Company and has also published the notice in the leading English and Marathi newspaper. The details of the aforesaid 28 shareholders are available on the website of your Company viz., www.jyothylaboratories. com.
Further, pursuant to the provisions of Section 124(5) of the Companies Act, 2013, the dividend which remained unclaimed/ unpaid for a period of seven years from the date of transfer to unpaid dividend account is required to be transferred to the Investor Education and Protection Fund (IEPF) established by the Central Government.
As a result, the unclaimed/ unpaid dividend for the year 2008-09 which remained unpaid and unclaimed for a period of 7 years has already been transferred by your Company to the IEPF.
Your Company has uploaded the details of unclaimed/ unpaid dividend for the financial year 2009-10 onwards on its website viz., www.jyothylaboratories.com and on website of the Ministry of Corporate Affairs viz., www.mca.gov.in and the same gets revised/ updated from time to time pursuant to the provisions of IEPF (Uploading of Information Regarding Unpaid and Unclaimed Amount Lying with Companies) Rules, 2012.
Further, the unpaid dividend amount pertaining to the financial year 2009-10 will be transferred to IEPF during the Financial Year 2017-18.
EXTRACT OF ANNUAL RETURN
The Extract of Annual Return as prescribed under Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014 is appended as annexure to this Report.
EMPLOYEE RELATIONS
Your Company has always provided a congenial atmosphere for work to all its employees that is free from discrimination and harassment. Employee relations remained cordial during the year under review.
MANUFACTURING FACILITIES
Your Company has state-of-the-art facilities at all of its manufacturing locations spread across India. Furthermore, five manufacturing plants of your Company situated at Roorkee, Wayanad, Jammu, Pithampur, Puducherry and Baddi are ISO 9001:2015 certified.
PREVENTION OF SEXUAL HARASSMENT
Your Company has framed ''Anti - Sexual Harassment Policy'' at workplace and has constituted an Internal Complaints Committee (ICC) as per the requirement of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed there under. No complaints with allegations of any sexual harassment were reported during the year under review.
FIXED DEPOSITS
Your Company did not accept/ renew any fixed deposits from public and no fixed deposits were outstanding or remained unclaimed as on March 31, 2017.
CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION
With regard to the requirements of conservation of energy and technology absorption pursuant to the provision of Section 134 of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, your Company has nothing specific to report.
FOREIGN EXCHANGE EARNINGS AND OUTGO
The details of foreign exchange earnings and outgo are as below:
(Rs. in Crore)
Particulars |
2016-17 1 |
2015-16 |
Foreign exchange earnings |
13.30 |
12.29 |
Foreign exchange outgo |
37.80 |
26.92 |
PARTICULARS OF EMPLOYEES
The disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016 and forming part of the Directors'' Report for the year ended March 31, 2017 is given in a separate Annexure to this Report.
CAUTIONARY NOTE
Certain statements in the âManagement Discussion and Analysis" section may be ''forward-looking''. Such ''forward looking'' statements are subject to risks and uncertainties and therefore actual results could be different from what your Directors envisage in terms of future performance and outlook.
ACKNOWLEDGEMENT
Your Directors express their sincere appreciation for the contribution and commitment of the employees of your Company at all levels and for the excellent support provided by shareholders, customers, distributors, suppliers, bankers, media and other Stakeholders, during the financial year under review. Your Company looks forward to continued and unstinted support in its endeavor to make lives of consumers better by providing world class products at affordable price.
For and on behalf of the Board of Directors
For Jyothy Laboratories Limited
Sd/-
M. P. Ramachandran
Chairman & Managing Director
(DIN:00553406)
Mumbai, May 18, 2017
Mar 31, 2016
It is our pleasure to present the 25th Annual Report of your Company
together with the Audited Financial Statements for the financial year
ended March 31, 2016.
FINANCIAL PERFORMANCE
Your Company''s financial performance for the financial year ended March
31, 2016 compared with previous financial year is summarised below:
(Rs. in Crore)
Financial results Financial
Year ended Financial
Year ended
March 31, 2016 March 31, 2015
Net Sales 1,573.51 1,428.27
Other Income 11.38 16.25
Earnings before interest, tax,
depreciation, amortization and
impairment 227.19 172.25
Interest & Finance Charges/(Income) Net (42.16) (47.13)
Depreciation, Amortization and
Impairment- Tangibles 22.48 24.27
Depreciation and Amortization- Intangibles 45.46 46.10
Exceptional Item - 2.09
Profit before tax 201.41 146.92
Provision for tax
- Current tax- (MAT) 43.12 30.75
- MAT Credit entitlement (28.60) (30.75)
- Excess tax provision/ MAT credit
reversal of earlier years - 4.13
- Deferred Tax change 24.53 -
Profit after tax 162.36 142.79
Balance as per last Balance Sheet
- Brought forward 21.09 22.28
Balance available for appropriations 183.45 165.07
Appropriations:
Dividend Paid (Interim) 72.45 -
Corporate Dividend Tax on Interim Dividend 14.75 -
Proposed Dividend (Final) 18.11 72.41
Corporate Dividend Tax on proposed dividend 3.69 14.74
Depreciation as per Schedule II of
Companies Act, 2013 - 3.11
Transfer to General Reserve - -
Transfer to Debenture Redemption Reserve 45.60 53.72
Balance Carried Forward (Profit and
Loss Account) 28.86 21.09
Earning Per Share (Basic) (In Rs.) 8.97 7.89
Earning Per Share (Diluted) (In Rs.) 8.84 7.83
Dividend Per Share of face value of
Rs. 1/- (In Rs.) 5.00 4.00
PERFORMANCE HIGHLIGHTS
The gross sales (including Excise Duty) from operations on standalone
basis of your Company for the financial year 2015- 16 grew by 10.25%
and stood at Rs. 1,632.88 Crore compared to Rs. 1,481.14 Crore in the
previous financial year. The profit before tax was at Rs. 201.41 Crore
as against Rs. 146.92 Crore in the previous financial year, registering
a growth of 37.08%. The net profit for the financial year 2015-16
amounted to Rs. 162.36 Crore compared to Rs. 142.79 Crore in the
previous financial year.
The consolidated gross sales (including Excise Duty) from operations of
your Company for the year under review stood at Rs. 1,660.85 Crore as
against Rs. 1,515.97 Crore in the previous financial year, reporting a
growth of 9.56%. The consolidated profit before tax was at Rs. 197.26
Crore registering a growth of 55.79% over the consolidated profit
before tax of the previous financial year. The consolidated profit
aftertax atRs. 157.96 Crore reflected a growth of 30.42% against profit
after tax of the previous financial year.
DIVIDEND
The Board has enhanced the total dividend (Interim and Final) to Rs.
5/- (Rupees Five) per Equity Share of Rs. 1/- each for the financial
year 2015-16 as againstRs.4/- (Rupees Four) per Equity share Rs. 1/-
each paid in the previous financial year.
The Board is pleased to recommend a Final Dividend of Rs. 1/- (Rupee
One) per Equity Share (@ 100% of face Value of Equity Share of Rs. 1/-
each) for the financial year ended March 31, 2016. The Final Dividend
payout of Rs. 21.80 Crore (inclusive of tax of Rs. 3.69 Crore) is
subject to the approval of Members at the ensuing Annual General
Meeting of your Company. Further, your Company paid in March 2016, an
interim dividend of Rs. 4/- (Rupees Four) per Equity Share (@ 400% of
face value of Equity Share of Rs. 1/- each) amounting to Rs. 87.20
Crore (inclusive of tax of Rs. 14.75 Crore).
TRANSFER TO RESERVES
Your Company transferred a sum of Rs. 45.60 Crore (Rs. 53.72 Crore in
the previous financial year) to the Debenture Redemption Reserve during
the year under review.
CONSOLIDATED ACCOUNTS
The Consolidated Financial Statements of your Company are prepared in
accordance with the relevant Accounting Standards viz., AS-21 issued by
the Institute of Chartered Accountants of India and forms integral part
of the Annual Report.
PERFORMANCE OF SUBSIDIARIES, ASSOCIATE COMPANIES/ JOINT VENTURES
A report on the performance and financial position of each of the
Subsidiaries, Associates and Joint Venture Companies as per the
Companies Act, 2013 is attached as Annexure to this report and hence
not repeated here for the sake of brevity. Policy for determining
material subsidiaries formulated and adopted by your Company can be
accessed from your Company''s website at the link:
http://www.jyothylaboratories.com/admin/docs/ PMS JLL Website.pdf
During the year under review, Associated Industries Consumer Products
Private Limited - AICPPL (Wholly Owned Subsidiary of your Company)
amalgamated with Jyothy Consumer Products Marketing Limited - JCPML
(Step down subsidiary of your Company i.e. Wholly Owned Subsidiary of
AICPPL) pursuant to the Scheme of Amalgamation sanctioned by the
Hon''ble High Court of Judicature at Bombay vide its Order dated July 3,
2015 which came into effect on August 6, 2015 and as a result, JCPML
which was a step down subsidiary became direct subsidiary of your
Company.
Except as mentioned above, no company has become or ceased to be its
subsidiary, joint venture or associate company during the financial
year 2015-16.
AMALGAMATION OF SUBSIDIARY
The Board of Directors at its meeting held on May 23, 2016 approved the
proposal of Amalgamation of its wholly owned subsidiary viz., Jyothy
Consumer Products Marketing Limited with your Company. The Appointed
Date for the said Amalgamation is fixed as April 1, 2016.
DIRECTORS'' RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Companies Act, 2013, in relation to
the Audited Financial Statements of your Company for the financial year
ended March 31, 2016, the Board of Directors hereby confirms that:
a. In the preparation of the annual accounts for the financial year
ended March 31, 2016, the applicable accounting standards read with the
requirements set out under Schedule III to the Act, have been followed
and there were no material departures from the same;
b. your Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that were reasonable
and prudent so as to give a true and fair view of the state of affairs
of your Company as at March 31, 2016 and of the profit of your Company
for the year ended on that date;
c. your Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of your Company and
for preventing and detecting fraud and other irregularities;
d. your Directors have prepared annual accounts of your Company on a
going concern basis;
e. your Directors have laid down internal financial controls to be
followed by your Company and that such internal financial controls are
adequate and are operating effectively; and
f. your Directors have devised proper systems to ensure compliance
with the provisions of all applicable laws and that such systems are
adequate and operating effectively.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
In terms of the provisions of Regulation 34(2) of the Securities and
Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015, the Management Discussion & Analysis
Report is attached and forms an integral part of this Report.
ISSUE OF SHARES
a) Issue of Equity Shares with differential rights
During the year under review and to date, your Company has not issued
any shares with differential rights, hence no information prescribed
under provisions of Section 43(a)(ii) of the Companies Act, 2013 read
with Rule 4(4) of the Companies (Share Capital & Debentures) Rules,
2014 has been furnished.
b) Issue of Sweat Equity Shares
During the year under review and to date, your Company has not issued
any sweat equity shares. Hence no information as per the provisions of
Section 54(l)(d) of the Companies Act, 2013 read with Rule 8(13) of the
Companies (Share Capital & Debentures) Rules, 2014 is furnished.
c) Issue of Employee Stock Option
During the year under review, your Company in terms of the provisions
of Section 62(l)(b) read with Section 39 of the Companies Act, 2013 has
issued and allotted 96,184 (Ninety Six Thousand One Hundred and Eighty
Four) Equity Shares of Rs. 1/- each to its employees on exercise of
options granted under "Jyothy Laboratories Employees Stock Option
Scheme 2014" (ESOS 2014) approved by the Shareholders of your Company
at the 23rd Annual General Meeting held on August 13, 2014.
After the issue of aforesaid 96,184 Equity Shares, the Paid up Equity
Share Capital of your Company stands increased to Rs. 18,11,19,680
consisting of Rs. 18,11,19,680 Equity Shares of Rs. 1/- each fully
paid-up.
CORPORATE GOVERNANCE
The report on Corporate Governance as stipulated under Regulation 34(3)
read with Schedule V of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (Listing Regulations) togetherwith the
Certificate received from your Company''s Statutory Auditors confirming
compliance of Corporate Governance requirements is attached and forms
an integral part of this report.
RELATED PARTY TRANSACTIONS
Particulars of contracts or arrangements with related parties referred
to in Section 188(1) of the Companies Act, 2013, in the prescribed Form
AOC-2 is appended as Annexure to this Report. During the year, your
Company had entered into contract/ arrangement/ transaction with
related parties which were on arm''s length basis and none of which
could be considered as material in accordance with the policy of your
Company on Materiality of Related Party Transactions. Further none of
the contract/ arrangement/ transaction with related parties required
approval of Shareholders as the same were within the limits prescribed
under Section 188(1) of the Companies Act, 2013 and Rules framed
thereunder.
The Policy on Materiality of Related Party Transactions and dealing
with Related Party Transactions as approved by the Board may be
accessed from your Company''s website at the link: http://
www.jyothylaboratories.com/admin/docs/RPT JLL Website.pdf
Attention of Members is also drawn to Note No. 31 to the financial
statements for the financial year ended March 31, 2016 which sets out
the related party disclosures as perAS-18.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Company has been a firm believer that each and every individual
including an artificial person owe something to the society at large.
Mr. M. P. Ramachandran, Chairman & Managing Director of your Company
even before the inception of Corporate Social Responsibility under the
Companies Act, 2013, has been involved in charitable and social
activities in his individual capacity.
Your Company has undertaken projects in the area of rural development
and sanitation as part of its CSR initiative. These projects were in
accordance with Schedule VII of the Companies Act, 2013 and the CSR
Policy framed by your Company. The report on CSR activities as required
under the Companies (Corporate Social Responsibility Policy) Rules,
2014 is appended as annexure and forms an integral part of this report.
Details about the CSR Policy adopted and formulated by your Company can
be accessed from your Company''s website at the link:
http://www.jyothylaboratories.com/admin/docs/JLL CSR%20Policy
Website.pdf
Your Company was required to spend Rs. 1.95 Crore (2% of the average
net profits of last three financial years) on CSR activities during the
financial year 2015-16. Accordingly, your Company spent Rs. 1.89 Crore
on CSR activities during the year 2015-16 and an amount of Rs. 0.06
Crore stands committed towards housing in Adivasi Area of Trichur
District and the aforesaid projects being construction projects have a
timeline. The balance amount of expenditure stands committed and will
be spent in the current financial year.
MATERIAL CHANGES AND COMMITMENTS
Except as disclosed elsewhere in this report, no material changes and
commitments which could affect your Company''s financial position have
occurred between the end of the financial year 2015-16 and date of this
report.
INTERNAL FINANCIAL CONTROLS
The Internal Financial Controls adopted and followed by your Company
are adequate and are operating effectively. Your Company has adopted a
dynamic Internal Financial Controls framework formulated by Ernst &
Young, LLP based on the best practices followed in the industry. Under
the said framework, Risk and Control Matrix are defined for the
following process(es):-
1. Fixed Assets;
2. Financial Statement Closing Process;
3. Information Technology;
4. Inventory Management;
5. Marketing and Advertising;
6. Order to Cash;
7. Payroll;
8. Production Process;
9. Purchase to Pay;
10. Taxation;
11. Treasury.
During the year under review, no material or serious observations have
been received from the Internal Auditors of your Company regarding
inefficiency or inadequacy of such controls.
CHANGE IN NATURE OF BUSINESS
During the year under review, there was no change in the nature of
business of your Company.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by any Regulator/
Court that would impact the going concern status of your Company and
its future operations.
REMUNERATION/ COMMISSION FROM ANY OF ITS SUBSIDIARIES
During the year under review, neither the Managing Director nor the
Whole Time Directors of your Company receive any remuneration or
commission from any of its Subsidiaries.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The details of Loans, Guarantees and Investments as prescribed under
Section 186 of the Companies Act, 2013 are appended as Annexure and
forms integral part of this report.
EMPLOYEE STOCK OPTION SCHEME (ESOS)
Your Company has adopted Jyothy Laboratories Employee Stock Option
Scheme 2014-A ("ESOS 2014-A") for granting of options to Mr. S.
Raghunandan, Whole Time Director and Chief Executive Officer of your
Company and Jyothy Laboratories Employee Stock Option Scheme 2014
("ESOS 2014") for granting of options to other eligible employees of
your Company approved by the Members of your Company at the 23rd Annual
General Meeting held on August 13, 2014.
Disclosure as required under Section 62(l)(b) of the Companies Act,
2013 read with Rule 12(9) of the Companies (Share Capital and
Debentures) Rules, 2014 and Regulation 14 of the Securities Exchange
Board of India (Share Based Employee Benefits) Regulations, 2014 are
appended as below:
Jyothy Laboratories Employee Stock
Option Scheme 2014-A ("ESOS 2014-A")
1 Date of Shareholders''
approval August 13, 2014
2 Total number of options 27,15,352
approved under ESOS
3 Vesting Requirements Options granted under ESOS 2014-A would
Vest after One year but not later than
four years from the date of grant of such
options. Vesting of options would be
subject to continued employment with the
Company and certain performanc parameters.
4 Exercise price or
pricing Rs. 1 per option
formula
5 Maximum term of options 5 years
granted
6 Source of shares Primary
7 Variation in terms of
option No variation in the terms of option
8 Method of Option
Valuation Intrinsic Value
9 Option Movement during -
the year
Number of Options
outstanding 27,15,352
at the beginning of
the period
Number of options
granted -
during the year
Number of options
forfeited/ 4,52,558
lapsed during the year
Number of options
vested during the year -
Number of options
exercised during the -
year
Number of shares
arising as a result of
exercise of options -
Money realized by
exercise of options -
(Amount in Rs.)
Loan repaid by the
Trust during N.A.
the year from exercise
price received
Number of Options
outstanding 22,62,794
at the end of the year
Number of options
exercisable 22,62,794
at the end of the year
Jyothy Laboratories Employee Stock
Option Scheme 2014-A ("ESOS 2014-A")
1 Date of Shareholders''
approval August 13, 2014
2 Total number of options 27,15,352
approved under ESOS
3 Vesting Requirements Options granted under ESOS 2014 would
Vest after One year but not later than
four years from the date of grant of such
options. Vesting of options would be
subject to continued employment with the
Company and certain performanc parameters.
4 Exercise price or
pricing Rs. 1 per option
formula
5 Maximum term of options 5 years
granted
6 Source of shares Primary
7 Variation in terms of
option No variation in the terms of option
8 Method of Option
Valuation Intrinsic Value
9 Option Movement during -
the year
Number of Options
outstanding 4,84,958
at the beginning of
the period
Number of options
granted -
during the year
Number of options
forfeited/ 87,970
lapsed during the year
Number of options
vested during the year 96,184
Number of options
exercised during the 96,184
year
Number of shares
arising as a result of
exercise of options 96,184
Money realized by
exercise of options 96,184
(Amount in Rs.)
Loan repaid by the
Trust during N.A.
the year from exercise
price received
Number of Options
outstanding 3,00,804
at the end of the year
Number of options
exercisable 3,00,804
at the end of the year
10 Employee Wise details of Options Granted
i. Senior Managerial Personnel
Name Designation Options Granted
during the Year Exercise Price
None - - -
ii. any other employee who receives a grant in any one year of option
amounting to 5% or more of option granted during the year; and
Name Designation Options Granted
during the Year Exercise Price
None - - -
iii. identifed employees who were granted option, during any one year,
equal to or exceeding 1% of the issued capital(excluding outstanding
warrants and conversations) of the company at the time of grant.
Name Designation Options Granted
during the Year Exercise Price
Mr. S.
Raghunandan Whole Time
Director &
Chief 27,15,352# Rs.1/- per Option
Executive Ofcer*
* Ceased to be Whole Time Director and Chief Executive Officer of your
Company and re-designated as President of your Company w.e.f. May 23,
2016.
# Granted during the financial year 2014-15.
Note: Other details as required under Regulation 14 of the Securities
Exchange Board of India (Share Based Employee Benefits) Regulations,
2014 read with SEBI circular bearing number CIR/CFD/POLICY CELL/2/ 2015
DATED June 16, 2015 form part of the Notes to Accounts of the Financial
Statements in this Annual Report
Further the aforesaid details are also available on your Company''s
website at the link: http://www.jyothylaboratories.com/admin/ docs/ESOP
Reg.%2014.pdf
The certificate from the Statutory Auditors in respect of
implementation of Jyothy Laboratories Employee Stock Option Scheme
2014-A ("ESOS 2014-A"), Jyothy Laboratories Employee Stock Option
Scheme 2014 ("ESOS 2014") and the resolution passed by the Members at
the 23rd Annual General Meeting of your Company held on August 13,
2014, shall be placed at the ensuing Annual General Meeting for
inspection by Members.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the Companies Act, 2013 and the
Article 140 of the Articles of Association of your Company, Mr. K.
Ullas Kamath, Joint Managing Director and Chief Financial Officer of
your Company retires by rotation at the ensuing Annual General Meeting
and being eligible, offered himself for re-appointment.
The Board at its meeting held on May 23, 2016 approved appointment of
Mr. M. P. Ramachandran as the Chairman and Managing Director of your
Company for a term of five years with effect from August 22, 2016 to
August 21, 2021 subject to the approval of Shareholders by passing a
Special Resolution at the ensuing Annual General Meeting on the terms
and conditions specified in the Special Resolution set out at Item No.
6 of the notice convening 25th Annual General Meeting of your Company.
The Board at its meeting held on May 23, 2016 also accepted the
resignation of Mr. S. Raghunandan, Whole Time Director and Chief
Executive Officer of your Company. Mr. S. Raghunandan has been
re-designated as the President of your Company. The Board placed on
record, its appericiation for the services rendered by Mr. S.
Raghunandan during his tenure as Whole Time Director and Chief
Executive Officer. The Board Members also took note of relinquishment
of Mr. M. L. Bansal, Company Secretary of your Company. In the same
Board Meeting, Mr. Shreyas Trivedi was appointed as the Company
Secretary, Compliance Officer and a Key Managerial Personnel in
accordance with Section 203 of the Companies Act, 2013.
All Independent Directors have given declarations that they meet the
criteria of Independence as laid down under Section 149(6) of the
Companies Act, 2013.
During the financial year 2015-16, there was no change in Key
Managerial Personnel of your Company.
POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
The Board in accordance with the provisions of sub-section (3) of
Section 178 of the Companies Act, 2013, formulated the policy setting
out the criteria for determining qualifications, positive attributes,
independence of a Director and remuneration for Directors, Key
Managerial Personnel and other employees.
Major criteria defined in the Policy framed for appointment of the
Directors including criteria for determining qualifications, positive
attributes, independence etc are as under:
(I) Selection
In case of Executive Directors and Key Managerial Personnel, the
selection can be made either by recruitment from outside or from within
your Company hierarchy or upon recommendation by the Chairman or other
Directors. The appointment may be made either to fill up a vacancy
caused by retirement, resignation, death or removal of an existing
Executive Director or it may be a fresh appointment.
In case of Non-Executive Directors, the selection can be made either by
way of selection from the data bank of Independent Directors maintained
by the Government or upon recommendation by Chairman or other
Directors. The appointment may be made either to fill up a vacancy
caused by resignation, death or removal of an existing Non-Executive
Director or it may be an appointment as an additional director or an
alternate director.
(II) Qualifications, Experience And Positive Attributes
a) While appointing a Director, it shall always be ensured that the
candidate possesses appropriate skills, experience and knowledge in one
or more fields of finance, law, management, sales, marketing,
administration, research, corporate governance, technical operations or
other disciplines related to your Company''s business.
b) In case of appointment as an Executive Director, the candidate must
have the relevant technical or professional qualifications and
experience as are considered necessary based on the job description of
the position. In case no specific qualification or experience is
prescribed or thought necessary for the position then, while
recommending the appointment, the Human Resource Department shall
provide the job description to the Committee and justify that the
qualifications, experience and expertise of the recommended candidate
are satisfactory for the relevant appointment. In such circumstances,
the Committee may call for an expert opinion on the appropriateness of
the qualifications and experience of the candidate for the position of
the Executive Director.
c) In case of appointment as a Non-Executive Director, the candidate
must have a postgraduate degree, diploma or a professional
qualification in the field of his practice/ profession/ service and
shall have not less than five years of working experience in such field
as a professional in practice, advisor, consultant or as an employee.
Provided that the Board may waive the requirements of qualification
and/ or experience under this paragraph for a deserving candidate.
d) The Board, while making the appointment of a Director, shall also
try to assess from the information available and from the interaction
with the candidate that he is a fair achiever in his chosen field and
that he is a person with integrity, diligence and open mind.
(III) Board Diversity And Independence
While making appointment of directors, following principles shall be
observed by the Board, as far as practicable:
a) There shall be a proper mix of Executive and Non- Executive
Directors and Independent and Non- independent Directors on the Board.
Your Company must always be in compliance of the provisions of Section
149 of the Companies Act, 2013 and Clause 17 of the Listing
Regulations, as amended from time to time, in this regard.
b) There shall be a workable mix of directors drawn from various
disciplines, like technical, finance, commercial, legal etc. The Board
shall not at any time be entirely comprised of persons drawn from one
discipline or field.
c) While appointing a director to fill in a casual vacancy caused by
death, resignation etc. of a director, an effort shall be made, as far
as possible, to appoint such a person in his place who has the relevant
experience in the fields or disciplines in which the outgoing director
had the experience or the person with relevant experience in the fields
or disciplines which are not represented in the Board as requisite to
business of your Company.
d) No preference on the basis of gender, religion or caste shall be
given while considering the appointment of directors.
e) Generally, an effort shall be made to maintain the Board diversity
by appointment of persons from diverse disciplines (relevant to the
Company''s business), of different age groups and of both the genders
(male as well as female) as Directors.
f) While appointing Independent Directors, the criteria for the
Independent Directors, as laid down in Section 149 (6) of the Companies
Act, 2013 and Listing Regulations are followed.
REMUNERATION POLICY
Your Company follows the Policy on Remuneration of Directors and Senior
Management Employees as approved by the Nomination, Remuneration and
Compensation Committee and the Board. A detailed report on the same is
given in the Corporate Governance Report.
PERFORMANCE EVALUATION
In accordance with the Companies Act, 2013 and Regulation 4(2)(f) of
the Listing Regulations, your Company has framed a Policy for
Evaluation of Performance of Independent Directors, Board, Committees
and other Individual Directors which includes criteria for performance
evaluation of Non-Executive Directors and Executive Directors. A
questionnaire is formulated for evaluation of performance of the Board
after taking into consideration several aspects such as board
composition, strategic orientation, board functioning and team
dynamics.
Performance evaluation of Independent Directors was conducted by the
Board of Directors, excluding the Director being evaluated. The
criteria for performance evaluation of Independent Directors laid down
by the Nomination, Remuneration and Compensation Committee include
ethics and values, knowledge and proficiency, diligence, behavioral
traits and efforts for personal development. Similarly, performance
evaluation of the Chairman and Non Independent Directors was carried
out by the Independent Directors. Your Directors also expressed their
satisfaction with the evaluation process.
TRAINING OF INDEPENDENT DIRECTORS
All Independent Directors are familiarized with your Company, their
roles, rights and responsibilities in your Company, nature of the
industry in which your Company operates, business model, strategy,
operations and functions of your Company through its Executive
Directors and Senior Managerial personnel. The details of programs for
familiarization of Independent Directors with your Company are
available on the website of your Company at the link:
http://www.jyothylaboratories.com/admin/docs/
Familiarisation%20Programme JLL.PDF
MEETING OF INDEPENDENT DIRECTORS
Your Company''s Independent Directors meet at least once in every
financial year without the presence of Executive Director or Management
Personnel and the meeting is conducted informally. During the year
under review, one meeting of Independent Directors was held on May 25,
2015.
BOARD MEETINGS
The Board of Directors met 6 times during the financial year ended 31st
March, 2016 in accordance with the provisions of the Companies Act,
2013 and Rules made thereunder.
The dates on which the Board of Directors met during the financial year
under review are provided in the Corporate Governance Report.
AUDIT COMMITTEE
The Audit Committee of your Company consists of majority of Independent
Directors and the detailed composition is provided in the Corporate
Governance Report. All the recommendations made by the Audit Committee
were accepted by the Board.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
Your Company has a Vigil Mechanism in place which also includes a
Whistle Blower Policy in terms of the Listing Regulations for Directors
and employees of your Company to provide a mechanism which ensures
adequate safeguards to Employees and Directors from any victimization
on raising of concerns of any violations of legal or regulatory
requirements, incorrect or misrepresentation of any financial
statements and reports etc.
The Vigil Mechanism/ Whistle Blower Policy of your Company can be
accessed from your Company''s website at the link:
http://www.jyothylaboratories.com/admin/docs/JLL Vigil%20
Mechanism%20Policy amended Final 28012016.pdf
The employees of your Company have the right/ option to report their
concern/ grievance to the Chairman of the Audit Committee. During the
year under review, no protected disclosure from any Whistle Blower was
received by the designated officer under the Vigil Mechanism.
RISK MANAGEMENT
The Board of Directors of your Company has designed a Risk Management
Policy in a structured manner taking into consideration the following
factors and the same is monitored on a periodic basis by the Executive
Directors of your Company.
1. The Management Approach;
2. JLL''s Vision & Mission;
3. Key Business Goals;
4. Risk Library;
5. Risk Management Focus.
Also, the Management has adopted the following 5 step approach keeping
in view your Company''s Vision and Mission:
Identifying ''Key'' Business goals;
Identifying the Risk Management focus;
Identifying Business risks;
Prioritizing the identified business risks;
Rating the current risk management capability for identified risks.
Further your Company had identified Key Business Goals for a five year
horizon and a library of risk events which could be bottleneck in
achieving the same. After defining the key business goals and the
library of risk events, your Company identified the goals on which the
management would focus.
INTERNAL CONTROL SYSTEMS
Your Company has adequate internal control systems and procedures in
place for effective and smooth conduct of business and to meet
exigencies of operation and growth. Your Company has set up Standard
Operating Process (SOP), procedures and controls apart from regular
Internal Audits. Roles and responsibilities have been laid down.
Management Information System has been established which ensure that
adequate and accurate information is available for reporting and
decision making.
Internal Audit is conducted by independent firm of auditors. Internal
Auditors regularly check the adequacy of the system, their observations
are reviewed by the management and remedial measures, as necessary, are
taken. Internal Auditors report directly to the Chairman of the Audit
Committee to maintain its objectivity and independence.
Your Company has also in place a ''Complaince Tool'' designed and
implemented by Ernst & Young, LLP which ensures compliance with the
provisions of all applicable laws to your Company adequately and
efficiently.
AUDITORS & AUDIT REPORTS
Statutory Audit
M/s SRBC & Co LLP, Chartered Accountants (ICAI Registration No.
324982E/ E300003), were appointed by the members of your Company at the
23rd Annual General Meeting (AGM) held on August 13, 2014 for a period
of three years i.e. for the financial years 2014-15, 2015-16 and
2016-17 subject to annual ratification by the Shareholders in the AGMs
to be held for Financial year 2015-16 and 2016-17.
Members are requested to ratify the appointment of M/s SRBC & Co LLP,
Chartered Accountants as Statutory Auditors from the conclusion of the
ensuing Annual General Meeting till the conclusion of the next Annual
General Meeting in 2017 and to authorize the Board to fix their
remuneration for the year 2016-17.
The Notes on financial statement referred to in the Auditors'' Report
are self explanatory and do not call for any further comments. The
Auditors'' Report does not contain any qualification, reservation or
adverse remark.
Cost Audit
As per section 148 of the Companies Act, 2013 read with Companies (Cost
Records and Audits) Rules, 2014, as amended, the Board of Directors of
your Company on recommendation of the Audit Committee, appointed M/s R.
Nanabhoy & Co., Cost Accountants, Mumbai (Firm Registration No. 000010)
as the Cost Auditors to carry out the cost audit of its products
covered under the Ministry of Corporate Affairs Order dated June 30,
2014 (as amended on December 31, 2014) for the financial year 2016-17.
The remuneration of Cost Auditors has been approved by the Board of
Directors on the recommendation of Audit Committee and the requisite
resolution for ratification of remuneration of Cost Auditors by the
members has been set out in the Notice of the 25th Annual General
Meeting of your Company.
The appointment of M/s R. Nanabhoy & Co., Cost Accountants, Mumbai is
within the prescribed limits of Companies Act, 2013 and free from any
disqualifications specified thereunder. Your Company is in receipt of
the Certificate from the Cost Auditors confirming their independence
and relationship on arm''s length basis.
Secretarial Audit
In terms of Section 204 of the Companies Act, 2013, the Board had
appointed M/s Rathi & Associates, Company Secretaries, Mumbai to carry
out Secretarial Audit for the financial year 2015-16. The report of the
Secretarial Auditor is appended as annexure to this report. The report
does not contain any qualification, reservation or adverse remark.
INSTANCES OF FRAUD, IF ANY REPORTED BY THE AUDITORS
There have been no instances of any fraud reported by the Statutory
Auditors under Section 143(12) of the Companies Act, 2013.
TRANSFER OF AMOUNT TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of Section 205C of the Companies Act, 1956,
the dividend/ interest/ refund of applications which remained
unclaimed/ unpaid for a period of seven years from the date of transfer
to unpaid dividend/ interest/ refund account was required to be
transferred to the Investor Education and Protection Fund (IEPF)
established by the Central Government and no claim shall lie against
the Company.
Accordingly, the unclaimed/ unpaid dividend for the year 2007-08 which
remained unpaid and unclaimed for a period of 7 years has been
transferred by your Company to the IEPF.
Your Company updates the details of unclaimed/ unpaid dividend on its
website viz., (www.jyothylaboratories.com) and on MCA website
(www.mca.gov.in-) from time to time pursuant to the provisions of IEPF
(Uploading of Information Regarding Unpaid and Unclaimed Amount Lying
with Companies) Rules, 2012.
Further, the unpaid dividend amount pertaining to the financial year
2008-09 will be transferred to IEPF during the Financial Year 2016-17.
EXTRACT OF ANNUAL RETURN
The Extract of Annual Return as prescribed under Section 92(3) of the
Companies Act, 2013 and Rule 12(1) of the Companies (Management and
Administration) Rules, 2014 is appended as annexure to this Report.
EMPLOYEE RELATIONS
Your Company has always provided a congenial atmosphere for work to all
employees that is free from discrimination and harassment. Employee
relations remained cordial during the year under review.
PREVENTION OF SEXUAL HARASSMENT
Your Company has framed Anti - Sexual Harassment Policy'' at workplace
and has constituted an Internal Complaints Committee (ICC) as per the
requirement of Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 and the Rules framed thereunder.
No complaints with allegations of any sexual harassment were reported
during the year under review.
FIXED DEPOSITS
Your Company did not accept/ renew any fixed deposits from public and
no fixed deposits were outstanding or remained unclaimed as on March
31, 2016.
CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION
With regard to the requirements of conservation of energy and
technology absorption pursuant to provision of Section 134 of the
Companies Act, 2013, read with the Companies (Accounts) Rules, 2014,
your Company has nothing specific to report.
PARTICULARS OF EMPLOYEES
Particular of employees as required under Section 197(12) of the
Companies Act, 2013 read with Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014 and forming part of the Directors''
Report for the year ended March 31, 2016 is given in a separate
Annexure to this Report.
CAUTIONARY NOTE
Certain statements in the "Management Discussion and Analysis" section
may be ''forward-looking''. Such ''forward looking'' statements are subject
to risks and uncertainties and therefore actual results could be
different from what your Directors envisage in terms of future
performance and outlook.
ACKNOWLEDGEMENT
The Board of Directors express their sincere appreciation for the
contribution and commitment of the employees of your Company and for
the excellent support provided by the Shareholders, customers,
distributors, suppliers, bankers, media and other Stakeholders, during
the financial year under review.
For and on behalf of the Board of Directors
For Jyothy Laboratories Limited
M. P. Ramachandran
Chairman & Managing Director
(DIN: 00553406)
Mumbai, May 23, 2016
Mar 31, 2014
The Board of Directors is pleased to present the 23rd Annual Report
together with the Audited Financial Statements for the year ended March
31, 2014 compared with previous financial year as follows:
(Rs. in lac)
Financial results Financial Financial
Year ended Year ended
March 31,
2014 March 31,
2013
Net Sales 1,25,510.57 1,01,737.67
Other Income 954.38 280.75
Earnings before interest, tax,
depreciation, amortization and
impairment 17,155.61 12,543.48
Interest & Finance Charges/
(Income) Net 134.93 1,792.67
Depreciation, Amortization and
Impairment- Tangibles 1,508.08 1,516.24
Depreciation and Amortization-
Intangibles 4,652.33 4,648.28
Prior year items- Expenses - 182.71
Exceptional Item 230.07 -
Profit before tax 0,630.20 4,403.58
Provision for tax
- Current tax- (MAT Payable) 2,260.00 885.00
- MAT Credit (entitlement) (2,260.00) (885.00)
- Excess provision for current
tax of earlier years 18.79 -
Profit after tax 10,611.41 4,403.58
Balance as per last Balance Sheet
 Brought forward 4,543.14 6,745.54
Balance available for appropriations 15,154.55 11,149.12
Appropriations:
Interim Dividend 1,810.23 -
Tax on Interim Dividend 307.65 -
Final Dividend on Equity Shares
(Proposed) 3,620.47 4,150.59
Corp. Dividend Tax 615.30 705.39
Transfer to General Reserve 1,200.00 500.00
Transfer to Debenture Redemption Reserve 5,372.51 1,250.00
Balance Carried Forward (Profit and Loss
Account) 2,228.39 4,543.14
Earning Per Share (Basic and Diluted) 6.21 2.65
Cash Profit 16,771.82 10,568.10
Cash EPS 9.82 6.37
Dividend Per Share of face value of
Rs. 1/- 3.00 2.50
PERFORMANCE
During the financial year ended March 31, 2014, the Company recorded Net
Sales at Rs. 1,25,510.57 lac as against Rs. 1,01,737.67 lac in the previous
financial year. Profit after Tax for the financial year under review
vis-a-vis previous financial year is as follows:
(Rs. in lac)
Particulars 2013-14 2012-13
Profit after tax but before depreciation
and amortization of Goodwill, Copyrights
and Trademarks 15,081.95 8,874.12
acquired due to amalgamation of JCPL
Depreciation and amortization of Goodwill,
Copyrights and Trademarks acquired due to 4,470.54 4,470.54
amalgamation of JCPL
Profit after Tax 10,611.41 4,403.58
During the year under review, the sales of soaps and detergents was Rs.
95,323.65 lac compared to Rs. 75,594.59 lac in previous year and the
sales in homecare segment grew to Rs. 29,131.97 lac compared to Rs.
24,490.86 lac in previous year. The Profitability of Soaps & Detergents
segment improved to Rs. 12,693.18 lac from Rs. 7,654.71 lac in the
previous year. The Profitability in homecare segment improved to Rs.
833.76 lac from Rs. 794.13 lac in the previous year.
ISSUE OF CAPITAL
At the beginning of the financial year under review, the Authorised
Share Capital was Rs. 17,00,00,000/- consisting of 17,00,00,000 equity
shares of Rs. 1/- each and paid-up share capital was Rs. 16,12,64,000/-
consisting of 16,12,64,000 equity shares of Rs. 1/- each fully paid-up.
Consequent to the Scheme of Amalgamation sanctioned by Honorable High
Court of Mumbai on April 12, 2013, which came into operation on May 13,
2013, the Authorised Share Capital was increased by the Authorised
Share Capital of the Transferor Company viz., Jyothy Consumer Products
Ltd (JCPL) i.e. by Rs. 240 crore. On June 3, 2013, pursuant to Clause
16.2 of the said Scheme of Amalgamation, 47,59,496 (Forty Seven Lac,
Fifty Nine Thousand, Four Hundred Ninety Six) Fully Paid-up Equity
shares of Rs. 1/- each, were allotted to the shareholders of JCPL in the
ratio of 1 Fully Paid Up Equity Share of the Company against 4 Fully
Paid Up Equity Shares of JCPL held by them as on May 28, 2013 being the
record date fixed for the purpose.
Further on December 3, 2013, pursuant to the Shareholders'' approval at
the Extra-ordinary General Meeting of the Company held on November 19,
2013 and the In-Principle Approval granted by National Stock Exchange
of India Ltd vide their letter dated November 27, 2013 and by BSE Ltd
vide their letter dated November 29, 2013, Sahyadri Agencies Ltd was
allotted 1,50,00,000 (One Crore Fifty Lac) equity shares of the Company
of Rs. 1/- each on Preferential basis at the Issue Price of Rs. 175.15
per Equity Share (including Rs. 174.15 per share towards share premium)
against receipt of entire amount payable by Sahyadri Agencies Ltd in
cash aggregating to Rs. 262,72,50,000/- in terms of Chapter VII of the
SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009.
Consequent to the above, at the end of financial year under review, the
Authorised Share Capital of the Company was Rs. 257 crore consisting of
257,00,00,000 equity shares of Rs. 1/- each and the paid-up capital was
Rs. 18,10,23,496/- comprising 18,10,23,496 equity shares of Rs. 1/- each
fully paid-up.
DIVIDEND
The Board of Directors in its meeting held on January 28, 2014 declared
interim dividend @100% of face value of Equity share of Rs. 1/- each (Rs.
1/- per equity share), aggregating to total cash outflow of Rs. 2,117.88
lac (including dividend distribution tax of Rs. 307.65 lac). Further, the
Board is pleased to recommend a final dividend @ 200% of face Value of
Equity Shares of Rs. 1/- each (i.e. Rs. 2/- per equity share), aggregating
to cash outflow of Rs. 4,235.77 lac including dividend distribution tax of
Rs. 615.30 lac. With this, the total dividend for the year amounts to 300%
of the face value of Equity Shares of Rs. 1/- each or Rs. 3/- per Equity
Share on the enlarged capital and the total cash outflow on account of
dividend for the financial year under review comes to Rs. 6,353.65 lac
including dividend distribution tax of Rs. 922.95 lac. In the previous
financial year, the Board had recommended and paid a dividend @ 250% of
face Value of Equity Shares of Rs. 1/- each (i.e. Rs. 2.50 per equity
share) involving total cash outflow of Rs. 4,855.98 lac including dividend
distribution tax of Rs. 705.39 lac.
The final dividend will be paid to eligible members if approved at the
ensuing Annual General Meeting of the Company.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
Management Discussion & Analysis Report is attached and forms part of
this Report.
CORPORATE GOVERNANCE
As per Clause 49 of the Listing Agreement with the stock exchanges, a
Report on compliances with Corporate Governance is presented separately
and forms part of this Report.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with Accounting Standard 21, issued by the Institute of
Chartered Accountants of India, Consolidated Financial Statements have
been provided in the Annual Report. These Consolidated Financial
Reports provide financial information about your Company and its
subsidiary companies as a single economic entity. The Consolidated
Financial Statements form part of this Annual Report.
SUBSIDIARY COMPANIES
The Central Government vide General Circular No. 2/2011 dated February
8, 2011 has exempted the holding companies from attaching Annual
Accounts and other documents in respect of its subsidiaries to the
Annual Report of the holding companies from the financial years ended on
or after March 31, 2011. As required vide above Circular, statement in
respect of each of its subsidiary, giving details of capital, reserves,
total assets and liabilities, details of investments, turnover, Profit
before taxation and proposed dividend is attached to the Consolidated
Balance Sheet. Annual accounts of the subsidiary companies and the
related detailed information will be made available to the shareholders
of the Company, seeking such information and will also be made
available for inspection at the Registered Office of the Company.
EMPLOYEE RELATIONS
Employee relations remained cordial during the year under review.
FIXED DEPOSITS
The Company did not accept/renew any fixed deposits from the public and
no fixed deposits were outstanding or unclaimed as on March 31, 2014.
DIRECTORS
Various provisions in respect of Directors contained in the Companies
Act, 2013 ("the 2013 Act") were notified with effect from April 1, 2014
repealing the corresponding provisions in the Companies Act, 1956 ("the
1956 Act").
Independent Directors
As per provisions of Section 149 of the 2013 Act, independent directors
shall hold office for a term up to five consecutive years on the board of
a company, but shall be eligible for re-appointment for another term up
to five years on passing of a special resolution by the company and
disclosure of such appointment in Board''s Report. Further Section 152
of 2013 Act provides that the independent directors shall not be liable
to retire by rotation in the Annual General Meeting (''AGM'') of the
Company.
As per Revised Clause 49 of the Listing Agreement (applicable from
October 1, 2014), any person who has already served as independent
director for five years or more in a company as on October 1, 2014 shall
be eligible for appointment, on completion of the present term, for one
more term of up to 5 (five) years only.
Pursuant to the extant provisions of the 1956 Act, Mr. Nilesh B. Mehta
and Mr. R. Lakshminarayanan, Independent Directors would have been
liable to retire by rotation in the AGM to be held in 2014 and Mr. K.P.
Padmakumar and Mr. Bipin R. Shah, independent directors would have
retired in the AGM to be held in 2015. However, in view of the
provisions contained in 2013 Act, the Company has been advised that all
independent directors are required to be appointed in the ensuing AGM.
Mr. Nilesh B. Mehta, Mr. K. P. Padmakumar, Mr. Bipin R. Shah and Mr. R.
Lakshminarayanan are eligible for appointment as Independent Directors
of the Company for a term up to five years in the ensuing AGM. The said
Independent Directors fulfil the conditions specified in the 2013 Act
and the Rules made there under and are independent of the management.
The Board has conducted the performance evaluation of aforesaid
Independent Directors and on the basis of the same, recommend to the
shareholders the appointments of Mr. Nilesh B. Mehta, Mr. K. P.
Padmakumar, Mr. Bipin R. Shah and Mr. R. Lakshminarayanan as
Independent Directors of the Company for a term up to March 31, 2019.
Non-Independent Directors
In terms of Section 152 of the 2013 Act, two-third of total strength of
the Board (excluding Independent Directors) shall be liable to retire
by rotation. One-third of such directors who are liable to retire by
rotation shall retire at every AGM.
Accordingly, in case of the Company, out of 4 non- independent
directors, three directors (i.e. not less than 2/3rd) shall be liable
to retire by rotation. The Board decided to continue the status of Mr.
M.P. Ramachandran, Chairman & Managing Director, as ''Director not
liable to retire by rotation'' and Mr. K. Ullas Kamath, Ms. M. R. Jyothy
and Mr. S. Raghunandan (constituting not less than two-thirds of total
non-independent directors) shall be the directors who shall be liable
to retire by rotation and one of them (i.e. 1/3rd) will retire every
year starting from AGM 2014. Mr. K. Ullas Kamath, being the longest
serving director in this category, shall retire by rotation in the
ensuing AGM of the Company. Mr. K. Ullas Kamath being eligible, offers
himself for re-appointment as director and the Board recommends his re-
appointment in the ensuing AGM.
Executive Directors
The Board in its meeting held on January 28, 2014 re-appointed Mr. M.
P. Ramachandran as Managing Director of the Company subject to approval
of shareholders in the ensuing AGM for a term of five years commencing
from April 1, 2014 to March 31, 2019. He has expressed his desire to
the Board that he shall be permitted to accept a nominal salary of Rs.
1/- per annum which the Board accepted. The Board had placed on record
its deep appreciation for his dedication, commitment and generous
gesture towards the Company.
The Board in its meeting held on May 22, 2014 approved re-appointment
of Mr. S. Raghunandan as Whole Time Director & CEO for a term of three
years from June 1, 2014 to May 31, 2017 subject to approval of
shareholders in the ensuing AGM on terms and conditions specified in the
Statement pursuant to Section 102 of the 2013 Act attached to Notice of
AGM. This appointment is in supersession of existing contract dated
August 16, 2012 insofar as it relates to unexpired period of that
contract.
The Board in its meeting held on May 22, 2014 also approved
re-appointment of Ms. M. R. Jyothy as Whole Time Director for a term of
three years from June 1, 2014 to May 31, 2017 subject to approval of
shareholders in the ensuing AGM on terms and conditions specified in the
Statement pursuant to Section 102 of the 2013 Act attached to Notice of
AGM. This appointment is in supersession of existing contract dated
September 20, 2011 insofar as it relates to un-expired period of that
Contract.
The Board recommends for approval of aforesaid Executive Directors in
the ensuing AGM.
Woman Director
The composition of the Board of Directors of the Company includes a
woman director viz., Ms. M. R. Jyothy. Accordingly, the Company is in
compliance with the requirement of third proviso to Section 149 (1) of
2013 Act read with Rule 3 of Companies (Appointment and Qualification of
Directors) Rules, 2014.
AUDITORS
M/s S. R. Batliboi & Associates and the present auditors, M/s S. R.
Batliboi & Associates LLP, both being part of same network of audit
firms, together have completed more than 10 (Ten) years as auditors of
the Company. However, the provisions contained in Section 139 of the
Companies Act, 2013 provide for a transition period of three years for
complying with the requirement of rotation of auditors. The Company is
advised that the present auditors or any audit firm associated with them
or within the same network of audit firms can be appointed as auditors
for a maximum period of three years i.e. for financial years 2014-15,
2015-16 and 2016-17, subject to annual ratification by the shareholders
in the Annual General Meetings (AGMs) to be held in the years 2015 and
2016.
M/s. S. R. Batliboi & Associates LLP, Chartered Accountants, Mumbai,
present auditors of the Company, who hold office until conclusion of the
23rd AGM, are eligible for re-appointment. However, they have
expressed their unwillingness to be reappointed as Auditors of the
Company. In view of the same, Audit Committee in its meeting held on
May 22, 2014, recommended appointment of M/s S R B C & Co LLP,
Chartered Accountants, Mumbai, a network firm of M/s. S. R. Batliboi &
Associates LLP, as Auditors of the Company.
A certificate prescribed under Rule 4 of the Companies (Audit and
Auditors) Rules, 2014 has been received from M/s S R B C & Co LLP to
the effect that they are eligible for appointment as auditors, and are
not disqualified for appointment under the Companies Act, 2013, the
Chartered Accountants Act, 1949, or the rules and regulations made
there-under; the proposed appointment is as per the term and within the
limits laid down by or under the authority of the Companies Act, 2013
and that there are no proceedings pending against them or any of their
partners with respect to professional conduct.
The Board recommends the appointment of M/s S R B C & Co LLP, Chartered
Accountants, Mumbai as Auditors of the Company for three years i.e.
from the conclusion of ensuing AGM till the conclusion of 26th AGM in
2017, subject to annual ratification by the members at AGMs to be held
in the year 2015 and 2016.
Auditors'' Report
Auditors in their report, under heading ''Emphasis of Matter'', have
observed that managerial remuneration paid/ provided by the Company for
the year ended March 31, 2013 is in excess of the limits prescribed
under the Companies Act, 1956. We draw your attention to Note 41 of the
financial statements forming part of this Annual Report which is
self-explanatory and therefore, does not require further explanation.
The Auditors'' Report does not contain any Qualification, reservation or
any adverse remark.
Cost Auditors
In compliance with the Central Government''s order No. 52/26/CAB-2010
dated June 30, 2011, the Board has appointed M/s R. Nanabhoy & Co.,
Cost Accountants, Mumbai to carry out cost Audit in respect of various
specified products of the Company for the financial year 2014-15. Cost
Audit Report for the year 2012-13 was fled within due date. The due
date for fling of the Cost Audit Report for the year 2013-14 is
September 30, 2014.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to requirements of Section 217(2AA) of the Companies Act,
1956, your Directors conform that:
1. in the preparation of the annual accounts for the financial year
ended March 31, 2014, the applicable accounting standards have been
followed;
2. the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at March 31, 2014 and of the Profit of the Company for
the financial year ended on that date;
3. the Directors have taken proper and sufficient care in 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;
4. the Directors have prepared the annual accounts for the financial
year ended March 31, 2014 on a ''going concern'' basis.
CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION
With regard to the requirements of Section 217(1)(e) of the Companies
Act, 1956, read with the Companies (Disclosure of Particulars in the
Report of the Board of Directors) Rules, 1988, the Company has nothing
specific to report.
PARTICULARS OF EMPLOYEES
Particular of employees as required under Section 217(2A) of the
Companies Act, 1956, read with the Companies (Particulars of Employees)
Rules, 1975, as amended and forming part of the Directors'' Report for
the year ended March 31, 2014 are set out as an annexure to this
report. However, as per provisions of Section 219(1)(b)(iv) of the
Companies Act, 1956, the report and the accounts are being sent to all
the shareholders excluding the aforesaid information. Any shareholder
desirous of obtaining such particulars may write to the Company
Secretary at the registered office of the Company.
INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY
The Company has adequate internal control systems and procedures in
place for effective and smooth conduct of business and to meet
exigencies of operation and growth. The key business processes have
been documented. The transactions are recorded and reported in
conformity with generally accepted accounting practices. The internal
control systems and procedures ensure reliability of financial
reporting, compliance with the Company''s policies and practices,
governmental regulations and statutes. Internal Audit is conducted by
independent firm of auditors. Internal Auditors regularly check the
adequacy of the system, their observations are reviewed by the
management and remedial measures, as necessary, are taken.
CAUTIONARY NOTE
Certain statements in the "Management discussion and Analysis" section
may be ''forward-looking''. Such ''forward looking'' statements are subject
to risks and uncertainties and therefore actual results could be
different from what the Directors envisage in terms of future
performance and outlook.
ACKNOWLEDGEMENT
The Board of Directors express their sincere appreciation for the
contribution and commitment of the employees of the Company and for the
excellent support provided by the shareholders, customers,
distributors, suppliers, bankers, media and other service providers,
during the financial year under review.
For and on behalf of the Board of Directors
For Jyothy Laboratories Limited
Mumbai, M. P. Ramachandran
May 22, 2014 Chairman & Managing Director
Mar 31, 2013
To, The Members,
The Board of Directors is pleased to present the 22nd Annual Report
together with the Audited Financial Statements for the year ended March
31, 2013 compared with previous financial year as follows:
(Rs. in lacs)
Financial results Financial Financial
Year ended Year ended
March 31, 2013 March 31, 2012
Net Sales 101,737.67 66,278.15
Other Income 305.56 517.63
Earnings before interest, tax,
depreciation, amortization and impairment 12,543.48 8,765.36
Interest & Finance Charges/(Income) Net 1,792.67 (3,259.35)
Depreciation, Amortization and
Impairment - Tangibles 1,516.24 1,434.73
Depreciation and Amortization - Intangibles 4648.28 268.46
Prior year items- Expenses 182.71 -
Profit before tax 4,403.58 10,321.52
Provision for tax
- Current tax - (MAT Payable) 885.00 2,010.00
- MAT Credit (entitlement) (885.00) -
- Deferred tax charge/(reversal) - (40.04)
Profit after tax 4,403.58 8,351.56
Balance as per last Balance Sheet
- Brought forward 6,745.54 2,736.79
Balance available for appropriations 11,149.12 11,088.35
Appropriations:
Final Dividend on Equity Shares 4,150.59 2,015.80
Corp. Dividend Tax 705.39 327.01
Transfer to General Reserve 500.00 2,000.00
Transfer to Debenture Redemption Reserve 1,250.00 -
Balance Carried Forward (Profit and
Loss Account) 4543.14 6,745.54
Earning Per Share (Basic and Diluted) 2.65# 5.18@
Cash Profit 10,568.10 10,054.75
Cash EPS 6.37# 6.23@
Dividend Per Share 2.50# 1.25@
# On post bonus and post merger equity capital.
@ On post bonus pre merger equity capital.
Amalagamation of Jyothy Consumer Products Limited (Formerly Henkel
India Limited) with the Company
Your Directors are pleased to inform that the process of amalgamation
of Jyothy Consumer Products Limited (Transferor Company) (formerly
known as Henkel India Limited) was completed on April 12, 2013, when
the Honourable judge of Bombay High Court approved the Scheme of
Amalgamation. Appointed Date was April 1, 2012, whereas compliances
like filing of necessary e-Forms with Registrar of Companies were
completed on May 13, 2013 and the amalgamation has become effective
from that date.
Your Directors had fixed May 28, 2013 as the ''Record Date'' to determine
eligibility of shareholders of the Transferor Company to get shares of
the Company. Process of allotment and listing of shares is expected to
be completed around June end, 2013. Directors welcome the shareholders
of the Transferor Company.
Performance
The financials for the current financial year are not comparable with
the previous financial year. Financials for the year under review
reflect the affect of merger of Jyothy Consumer Products Limited (JCPL)
with the Company for the full year. Financials for the financial year
2011 -12 are in respect of the full year of the Company as it stood
prior to the merger of JCPL.
During the financial year ended March 31, 2013, the Company recorded
Net Sales at Rs. 1,01,737.67 lac compared to Rs. 66,278.1 5 lac in the
previous financial year. In the financial year under review, Profit
after Tax and Cash Profit compare as follows:
(Rs. lac)
Particulars 2012-13 2011-12
Profit after tax but before depreciation
and amortization of Goodwill, Copyrights
and Trademarks acquired due to
amalgamation of JCPL 8,874.12 8,351.56
Depreciation and amortization of Goodwill,
Copyrights and Trademarks acquired due to
amalgamation of JCPL 4,470.54 Nil
Profit after Tax 4,403.58 8,351.56
During the year under review, the sales of soaps and detergents was Rs.
75,594.59 lac compared to Rs. 44,554.67 lac in previous year and the
sales in homecare segment grew to Rs. 24,490.86 lac compared to Rs.
21,785.18 lac in previous year. The sales and profit in soaps and
detergents reflect the effect of amalgamation of JCPL as well. The
profitability in homecare segment improved considerably from a segment
loss of Rs. 1,594.59 lac in previous year to profit of Rs. 794.13 lac
in the current year.
Finance
The borrowings as on March 31, 2013 was at Rs. 53,720.28 lac (previous
year Rs. 55,291.25 lac). Net working capital as on March 31, 2013 was
at Rs. 3,820.41 lac compared to Rs. 6,700.08 lac at the end of previous
year.
Issue of Bonus Shares
During the year, the Board of Directors of your Company had issued and
allotted bonus shares in the ratio of one new bonus equity share of
face value of Rs. 1/- each for every one equity share held by the
members as on July 1 6, 2012 (Record Date decided for the purpose).
After bonus issue, paid up capital of the Company was augmented and
stood at Rs. 1 6,12,64,000/-.
Dividend
For the financial year under review, the Board is pleased to recommend
a dividend @ 250% of face Value of Equity Shares of Rs. 1/- each (i.e.
Rs. 2.50 per equity share), aggregating to cash outlay of Rs. 4,855.98
lac including dividend distribution tax of Rs. 705.39 lac. The dividend
is payable on the equity capital enhanced by the issue of bonus shares
in the ratio of 1:1 and also on 47,59,496 equity shares ofRs. 1/- each
of the Company to be issued to the shareholders of erstwhile JCPL
consequent upon its amalgamation with the Company. In the previous
financial year, the Board had recommend and paid a dividend @ 250% of
face Value of Equity Shares ofRs. 1/- each (i.e. Rs. 2.50 per equity
share) on pre- bonus equity capital of the Company involving cash
outlay of Rs. 2,342.81 lac including dividend distribution tax of Rs.
327.01 lac.
The dividend will be paid to eligible members if approved by them at
the ensuing Annual General Meeting of the Company.
New Developments & Initiatives
- Creation of new and vibrant organization structure.
- Realisation of synergy with the integration of Henkel operations
with the Company.
- Business model re-engineering to drive efficiency and improve
profitability across entire value chain.
- Better and packaging
- Supply Chain project to improve working capital management through
business planning and improvements in operating processes
- Integration of sales and distribution of Henkel with the Company
- Consolidation of distribution network and movement to C & F model
- Rationalisation of channel margins
- Consolidation of manufacturing facilities and improving cost
competitiveness through improvement in operational efficiencies and
capacity debottlenecking.
- New Brand Strategy.
Bangladesh
- Commercial production expected to start in second quarter of
financial year 2013-14.
Management Discussion & Analysis Report:
Management''s Discussion & Analysis Report is attached and forms part of
this Directors'' Report.
Corporate Governance:
As per Clause 49 of the Listing Agreement with the stock exchanges, a
Section on Corporate Governance is presented separately and forms part
of this Report.
Consolidated Financial Statements
In accordance with Accounting Standard 21, issued by the Institute of
Chartered Accountants of India, Consolidated Financial Statements have
been provided in the Annual Report. These Consolidated Financial
Reports provide financial information about your Company and its
subsidiary companies as a single economic entity. The Consolidated
Financial Statements form part of this Annual Report.
Subsidiary Companies
The Central Government vide General Circular No. 2/2011 dated February
8, 2011 has exempted the holding companies from attaching Annual
Accounts and other documents in respect of its subsidiaries to the
Annual Report of the holding companies from the financial years ended
on or after March 31, 2011. As required vide above letter, statement in
respect of each of its subsidiary, giving details of capital, reserves,
total assets and liabilities, details of investments, turnover, profit
before taxation and proposed dividend is attached to the Consolidated
Balance Sheet. Annual accounts of the subsidiary companies and the
related detailed information will be made available to the shareholders
of the Company, seeking such information and will also be made
available for inspection at the Registered Office of the Company.
Jyothy Fabricare Services Limited
Members are aware that the Company had started a new Value Added
Service in fabric care segment to provide "World class laundry at
affordable price at your doorstep" and other related services through
its subsidiary company namely Jyothy Fabricare Services Limited (JFSL).
The Laundry Plant with 10 tons/day capacity at Ahmedabad, set up on
BOOT model by JFSL - JLL (JV) for the Western Railways, has commenced
its operation in the month of January, 2013. By adopting improvised
methods, the JV has achieved capital utilisation at 130% of its
installed capacity. Further the BOOT project at Delhi International
Airport is being pursued for commencing its operation in the month of
April, 2014.
During the financial year 2012-13, JFSL focused on rationalising and
improving financial efficiency in its operations at all levels after
its expansion drive in previous financial year 2011 -12. As a result,
Loss before Interest, Tax and Depreciation & Amortization reduced by
28.24% at consolidated level and JFSL recorded a total consolidated
turnover of Rs. 44.28 crore up by 16.50%, during the year under review.
For financial year 2013-14, JFSL has concrete plans for enhanced focus
on retail; aligning the institutional & railway business and also
concentrate to further increase volumes of the BOOT project and thereby
improve profitability.
Employee Relations
Employee relations remained cordial during the year under review.
Fixed Deposits
The Company did not take any fixed deposits from the public and no
fixed deposits were outstanding or unclaimed as on March 31, 2013.
Directors
In accordance with the requirements of the Companies Act, 1956, and the
Articles of Association of the Company, Mr. K. P. Padmakumar and Mr.
Bipin R. Shah, Directors of the Company will retire by rotation at the
ensuing Annual General Meeting of the Company and being eligible have
offered themselves for re-appointment. The Board recommends their
re-appointment.
Auditors
During the year, they had informed the Company vide their letter dated
April 2, 2013, that their firm has been converted into Limited
Liability Partnership and now it would be known as "S. R. Batliboi &
Associates LLP".
M/s. S. R. Batliboi & Associates LLP, Chartered Accountants, Mumbai,
having registration number 101049W, Statutory Auditors of the Company,
continue to hold office until conclusion of the 22nd Annual General
Meeting and being eligible offer themselves for re-appointment.
A certificate has been received from the Auditors to the effect that
their appointment, if made, would be within the limits prescribed under
Section 224 (1B) of the Companies Act, 1956. The Auditors have advised
that they have subjected themselves to the peer review process of the
Institute of Chartered Accountants of India (ICAI) and hold a valid
certificate issued by the Peer Review Board of the ICAI.
Auditors'' Report
Auditors'' Report under heading ''Emphasis of Matter'' has drawn attention
to Note 41 to the Financial Statements of the Company (on stand- alone
basis) which form part of this annual report. It is further stated that
the managerial remuneration amounting to Rs. 1,113.72 lacs is paid/
provided during the year under review of which Rs. 921.72 lac is in
excess of the limits prescribed under Schedule XIII of the Companies
Act, 1956 (the said Act).
As explained in the Note 41 referred above, the maximum remuneration
payable to Managerial Personnel amounts to Rs. 1025.37 lacs, i.e. 10%
of the profits computed under section 198 of the said Act as against
Rs. 1113.72 lacs paid/provided during the year resulting in excess
payment/provision of Rs. 88.35 lacs. The Company has applied to the
Central Government seeking their approval and will also seek approval
of its shareholders in the ensuing Annual General Meeting for the
remuneration paid/ payable to the Whole Time Directors. Pending
receipt of such approval from the Central Government, the excess amount
paid, if any, shall be held in trust by such Directors.
Cost Auditors
In compliance with the Central Government''s order No. 52/26/ CAB-2010
dated June 30, 2011, the Board has appointed M/s. R. Nanabhoy & Co.,
Cost Accountants, Mumbai to carry out the cost Audit in respect of
various specified products of the Company for the financial year
2013-14. Cost Audit Report for the year 2011 - 12 was filed within due
date. The due date for filing of the Cost Audit Report for the year
2012-13 is September 30, 2013.
Directors'' Responsibility Statement:
Pursuant to requirements of Section 217(2AA) of the Companies Act,
1956, your Directors confirm that:
1. in the preparation of the annual accounts for the financial year
ended March 31, 2013, the applicable accounting standards have been
followed;
2. the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at March 31, 2013 and of the Profit of the Company
for the financial year ended on that date;
3. the Directors have taken proper and sufficient care in 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;
4. the Directors have prepared the annual accounts for the financial
year ended March 31, 2013 on a ''going concern'' basis.
Conservation of Energy & Technology Absorption
With regard to the requirements of Section 217(1 )(e) of the Companies
Act, 1956, read with the Companies (Disclosure of Particulars in the
Report of the Board of Directors) Rules, 1988, the Company has nothing
specific to report.
Particulars of Employees
Particular of employees as required under Section 217(2A) of the
Companies Act, 1956, read with the Companies (Particulars of Employees)
Rules, 1975, as amended and forming part of the Directors'' Report for
the year ended March 31, 2013 are set out as an annexure to this
report. However, as per provisions of Section 219(1) (b)(iv) of the
Companies Act, 1956, the report and the accounts are being sent to all
the shareholders excluding the aforesaid information. Any shareholder
desirous of obtaining such particulars may write to the Company
Secretary at the registered office of the Company.
Risk and Concerns
The high rate of inflation and depreciation of Rupee continue to cause
anxiety about the growth of Indian economy and the performance of the
Corporates including FMCG sector. The Company would continue to try to
protect profitability by containing cost increases through greater
efficiency in operation and judicious increase in prices. During the
year, the Company increased the price of all its products including
flagship brand ''Ujala'' due to increase in prices of raw materials. The
Company, to some extent, is protected from pressures like slow down of
economy due to small unit values of consumer packs of its products. The
Company continues to promote usage of white apparels, widen its
products range and product appeal, introducing new variants of its
products, brand extensions, create awareness and communicate utility
value of its products to consumers through mass media advertisements
and increasing geographical reach of its products.
The Company was perceived to depend for Turnover and Profits on a few
products and that any adverse movement in sale or profitability of such
products may compromise its performance. The Company, being aware of
the matter, has been continuously extending its products range and
geographical reach within India and reducing cost through greater
operational efficiency without any compromise in quality. In the
previous year, the Company had acquired 83.66% stake in Henkel India
Limited (later renamed as Jyothy Consumer Products Limited), which has
since been amalgamated with the Company. The consolidated operations
after amalgamation, have further broad-based its product portfolio and
consumers.
The management will continue to monitor the risks concerning the
Company and will respond appropriately to every situation.
Internal Control Systems and its Adequacy
The Company has adequate internal control systems and procedures in
place for effective and smooth conduct of business and to meet
exigencies of operation and growth. The key business processes have
been documented. The transactions are recorded and reported in
conformity with generally accepted accounting practices. The internal
control systems and procedures ensure reliability of financial
reporting, compliance with the Company''s policies and practices,
governmental regulations and statutes. Internal Audit is conducted by
independent firm of auditors. Internal Auditors regularly check the
adequacy of the system, their observations are reviewed by the
management and remedial measures, as necessary, are taken.
Cautionary Note
Certain statements in the "Management Discussion and Analysis" section
may be ''forward-looking''. Such ''forward looking'' statements are subject
to risks and uncertainties and therefore actual results could be
different from what the Directors envisage in terms of future
performance and outlook.
Acknowledgement
The Board of Directors express their sincere appreciation for the
contribution and commitment of the employees of the Company and for the
excellent support provided by the shareholders, customers,
distributors, suppliers, bankers, media and other service providers,
during the financial year under review.
For and on behalf of the Board of Directors
For Jyothy Laboratories Limited
M. P. Ramachandran
Chairman & Managing Director
Mumbai, May 22, 2013
Mar 31, 2012
The Board of Directors is pleased to present the 21st Annual Report
together with the Audited Financial Statements for the year ended March
31, 2012 compared with previous financial year as follows:
(Rs in lac)
Financial Financial
Year ended Year ended
March 31,2012 March 31,2011
Sales (net of trade discount and sales tax) 68,835.43 61,720.67
Other Income 5,720.23 2,760.44
Profit before depreciation and interest 13,967.96 10,665.63
Interest and Finance Charges 1,943.25 30.17
Depreciation, Amortization and Impairment 1,703.19 1,078.55
Profit before tax 10,321.52 9,556.91
Provision for tax
- Current tax 2,010.00 1,295.00
- Deferred tax charge/(reversal) (40.04) 296.72
- (Excess) provision for current tax
of earlier year - (61.48)
Profit after tax 8,351.56 8,026.67
Balance as per last Balance Sheet
- Brought Forward 2,736.79 1,524.30
Debit Balance of Profit and Loss Account
of Sri Sai Homecare Products Private
Limited pursuant to Scheme of Amalgamation - (128.55)
Balance available for appropriations 11,088.35 9,422.42
Appropriations:
Final Dividend on Equity Shares 2,015.80 4,031.60
Corp. Dividend Tax 327.01 654.03
Transfer to General Reserve 2,000.00 2,000.00
Balance Carried Forward (Profit and
Loss Account) 6,745.54 2,736.79
Earning Per Share (Basic and Diluted) 10.36 10.35
Dividend Per Share 2.50 5.00
Performance
During the financial year ended March 31, 2012, the Company recorded
Sales (net of trade discount and sales tax) at Rs 68,835.43 lac compared
to Rs 61,720.67 lac in the previous financial year. In the financial
year under review, Profit before Tax stood at Rs 10,321.52 lac compared
to Rs 9,556.91 lac in previous financial year.
The Sales (net of trade discount & sales tax) in financial year under
review had grown by 11.53% compared to the previous year. This increase
in sales was achieved despite drastically bringing down the inventory
levels (to almost one week's stocks) at super distributors in pursuance
to converting three tier distribution system to two tier distribution
system. Trade receivables were brought down from Rs 10,349.89 lac as at
March 31, 2011 to Rs 4,251.55 lac as at March 31, 2012.
During the year under review, the sales of soaps and detergents grew to
Rs 44,554.67 lac from Rs 38,599.19 lac in the previous year and the sales
in homecare segment grew to Rs 21,785.18 lac from Rs 21,651.99 lac in the
previous year. The profitability in homecare segment was adversely
affected due to lower margins in case of mosquito repellant coils and
substantial increase in raw materials and other costs.
Finance
Your Company, for the first time, has borrowed funds to finance the
acquisition of Henkel India Limited. The borrowings as on March 31,
2012 stood atRs 55,291.25 lac.
Dividend
For the financial year under review, the Board is pleased to recommend
a dividend @ Rs 2.50 per equity share of face value of Rs 1/- each (i.e.
250% of face value of equity shares), aggregating to Rs 2,01 5.80 lac.
In the previous financial year, the Board had recommended and paid a
dividend @ Rs5.00 per equity share of face value of Rs 1/- each (i.e.
500% of face value of equity share), aggregating to Rs 4,031.60 lac. The
reduction in dividend was with a view to conserve cash resources of the
Company for financing its increasing business activity.
The dividend on the existing equity shares of the Company will be paid
to eligible members after its approval by the Members in the ensuing
Annual General Meeting.
Bonus Issue
The Board of Directors of your Company declared to issue bonus shares
in the ratio of one new bonus equity share of face value of Rs 1/- each
to be issued for every one equity share held by the members. The
approval of the members is being sought through postal ballot process.
The bonus shares shall be allotted to the members as on book closure
date/ record date to be announced after the approval of bonus issue by
the members. The bonus shares shall be eligible for dividend that may
be declared for the financial year 2012-13 and thereafter.
Increase in Authorised Share Capital
The Company has sought approval of its members through postal ballot to
increase its authorized share capital to 17,00,00,000 equity shares of
Rs 1/- each aggregating to Rs 17,00,00,000 (Rupees Seventeen Crore only)
to accommodate issue of bonus shares.
Utilization of Qip Proceeds
During the financial year ended March 31, 2011, the Company had issued
80,63,200 equity shares of Rs1/- each at a premium of Rs281.62 per equity
share to Qualified Institutional Buyers (QIP) in terms of Chapter XIII
A of the Securities & Exchange Board of India (Disclosure and Investor
Protection) Guidelines, 2000.
The Audit Committee and the Board of Directors of the Company have
taken on record the following statement of utilization of the proceeds
of the amounts raised by the Company:
(Rs in lac)
Particulars Amount
Gross proceeds 22,788.22
Less: Expenses incurred 644.29
Net proceeds 22,143.93
Utilization
Acquisition of Henkel India Limited 22,143.93
Total utilization 22,143.93
The funds raised through QIP proceeds have now been utilized in full.
New Developments Henkel India Limited
- The Company has acquired 83.66% of paid up equity share capital and
the entire preference share capital of Henkel India Limited (HIL). The
equity shares of HIL are listed on Bombay, Madras and Calcutta Stock
exchanges.
Jyothy Kallol Bangladesh Limited
- The Company has set up a joint venture in Bangladesh with Kallol
Enterprise Limited for setting up a state-of-art manufacturing facility
and marketing of all products of the Company and HIL in a phased
manner.
- The commercial production is expected to start in the 2nd half of
the financial year 2012-13.
Management Discussion and Analysis Report
Management Discussion and Analysis Report is attached and forms part of
this Report.
Corporate Governance
As per Clause 49 of the Listing Agreement with the stock exchanges, a
section on Corporate Governance is presented separately and forms part
of this Report.
Consolidated Financial Statements
In accordance with Accounting Standard 21, issued by the Institute of
Chartered Accountants of India, Consolidated Financial Statements have
been provided in the Annual Report. These Statements provide financial
information about your Company and its subsidiary companies as a single
economic entity. The Consolidated Financial Statements form part of
this Annual Report.
Subsidiary Companies
The Central Government vide General Circular No. 2/2011 dated February
8, 2011 has exempted the holding companies from attaching Annual
Accounts and other documents in respect of its subsidiaries to the
Annual Report of the holding companies from the financial years ended
on or after March 31, 2011. As required vide above circular, a
statement in respect of each of its subsidiary, giving details of
capital, reserves, total assets and liabilities, details of
investments, turnover, profit before taxation and proposed dividend
forms part of this Annual Report. Annual accounts of the subsidiary
companies and the related detailed information will be made available
to the shareholders of the Company, seeking such information and will
also be made available for inspection at the Registered Office of the
Company.
Jyothy Fabricare Services Limited
Members are aware that the Company had started a new Value Added
Service in fabric care segment to provide "World-class laundry at
affordable price at your door step" and other related services through
its subsidiary company namely Jyothy Fabricare Services Limited (JFSL).
Major highlights of JFSL are as follows:
- Country's biggest laundry chain with 122 retail outlets which
service brands like Wardrobe and Fabric Spa;
- Currently operating in Bangalore, Delhi, Mumbai, Pune and Chennai;
- Investment to the tune of Rs 100 crore committed by IL&FS for a 25%
equity stake at an Enterprise Valuation of Rs 400 crore. Rs 50 crore
investment have been made and the balance Rs 50 crore is expected to
come in for expansion of operations at Chennai and Hyderabad;
- Bagged prestigious laundry maintenance project for Western Railways
at Ahmedabad - contract for 10 years on BOOT basis;
- Bagged prestigious laundry maintenance project for DIAL (Delhi
International Airport Limited) - contract for 15 years on BOOT basis;
- Total turnover of Rs 3,801 lac for the financial year ended March
31, 2012 (Previous year Rs 941 lac).
Employee Relations
Employee relations remained cordial during the year under review.
Fixed Deposits
The Company did not take any fixed deposits from the public and no
fixed deposits were outstanding or unclaimed as on March 31, 2012.
Directors
In accordance with the requirements of the Companies Act, 1956, and the
Articles of Association of the Company, Mr. Nilesh B. Mehta and Ms. M.
R. Jyothy, Directors of the Company will retire by rotation at the
ensuing Annual General Meeting of the Company and being eligible have
offered themselves for re-appointment. The Board recommends their
re-appointment.
Mr. K. UHas Kamath was appointed as Joint Managing Director of the
Company at the Board Meeting held on January 23, 2012 with increase in
remuneration payable to him. The approval to this appointment and
remuneration payable to him is being sought from the members of the
Company through postal ballot process.
Mr. S. Raghunandan was appointed as Whole-time Director and Chief
Executive Officer of the Company and Mr. Ramakrishnan Lakshminarayanan
was appointed as independent Director of the Company on May 23, 2012.
In terms of Section 260 of the Companies Act, 1956, the term of Mr.
Raghunandan and Mr. Laksminarayanan will expire at the conclusion of
the ensuing Annual General Meeting. They being eligible offer
themselves for appointment at the ensuing Annual General Meeting.
Your Company has received notice under Section 257 of the said Act
along with requisite deposit, in respect of Mr. Raghunandan and Mr.
Lakshminarayanan, proposing their appointments as Directors of the
Company. Resolutions seeking approval of the members for their
appointments have been incorporated in the Notice of the ensuing Annual
General Meeting and brief details about them have been provided in the
Corporate Governance Report.
Auditors
M/s. S. R. Batliboi & Associates, Chartered Accountants, Mumbai, having
registration number 101049W, Statutory Auditors of the Company,
continue to hold office until conclusion of the 21st Annual General
Meeting and being eligible offer themselves for re-appointment.
A certificate has been received from the Auditors to the effect that
their appointment, if made, would be within the limits prescribed under
Section 224 (1 B) of the Companies Act, 1 956. The Auditors have
advised that they have subjected themselves to the peer review process
of the Institute of Chartered Accountants of India (ICAI) and hold a
valid certificate issued by the Peer Review Board of the ICAI.
Cost Auditors
In compliance with the Central Government's Order No. 52/26/ CAB-2010
dated June 30, 2011, the Board has appointed M/s. R. Nanabhoy & Co.,
Cost Accountants, Mumbai to carry out the cost audit in respect of
insecticide products of the Company for the financial year 2011 -12.
The due date for filling of the Cost Audit Reports for the financial
year 2011 -12 is September 30, 2012.
Directors Responsibility Statement
Pursuant to requirements of Section 217(2AA) of the Companies Act,
1956, your Directors confirm that:
1. in the preparation of the annual accounts for the financial year
ended March 31, 2012, the applicable accounting standards have been
followed;
2. the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at March 31, 2012 and of the profit of the Company
for the financial year ended on that date;
3. the Directors have taken proper and sufficient care in 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;
4. the Directors have prepared the annual accounts for the financial
year ended March 31, 2012 on a 'going concern' basis.
Conservation of Energy and Technology Absorption
With regard to the requirements of Section 217(1 )(e) of the Companies
Act, 1956, read with the Companies (Disclosure of Particulars in the
Report of the Board of Directors) Rules, 1988, the Company has nothing
specific to report.
Foreign Exchange Earnings and Outgo (Rs in lac)
Particulars 2011-12 2010-11
Foreign exchange earnings 872.98 699.88
Foreign exchange outgo 382.16 377.86
Particulars of Employees
Particulars of employees as required under Section 217(2A) of the
Companies Act, 1956, read with the Companies (Particulars of Employees)
Rules, 1975, as amended, are attached to this report.
Risk and Concerns
The high rate of inflation continues to cause anxiety about the growth
of Indian economy and the performance of the corporates including FMCG
sector.
We believe that the Company operates in certain segments of FMCG space
where demand for the Company's products is driven more by needs and may
be impacted more by weather conditions and color trends in wearing
apparels. To some extent, the Company is protected from pressures like
slow down of economy due to small unit values of consumer packs of its
products. The Company continues to promote usage of white apparels,
widen its products range, introducing new variants of its products,
brand extensions, create awareness and communicate utility value of its
products to consumers through mass media advertisements and increasing
geographical reach of its products.
The Company would continue to try to protect profitability by
containing cost increases through greater efficiency in operation and
judicious increase in prices. During the year, the Company increased
the price of all its products including flagship brand ' U j a I a' due
to increase in prices of raw materials.
The Company is perceived to depend for turnover and profit on a few
products and that any adverse movement in sale or profitability of such
products may compromise its performance. The Company is aware of the
matter and has been continuously extending its products range and
geographical reach within India and reducing cost through greater
operational efficiency without any compromise in quality. The Company
has acquired 83.66% stake in Henkel India Limited with the objective to
broad base its product portfolio and to grow inorganically as well.
The management will continue to monitor the risks concerning the
Company and will respond appropriately to every situation.
Internal Control Systems and its Adequacy
The Company has adequate internal control systems and procedures in
place for effective and smooth conduct of business and to meet
exigencies of operation and growth. The key business processes have
been documented. The transactions are recorded and reported in
conformity with generally accepted accounting practices. The internal
control systems and procedures ensure reliability of financial
reporting, compliance with the Company's policies and practices,
governmental regulations and statutes. Internal Audit is conducted by
independent firm of auditors. Internal Auditors regularly check the
adequacy of the system, their observations are reviewed by the
management and remedial measures, as necessary, are taken.
Cautionary Note
Certain statements in the "Management Discussion and Analysis" section
may be 'forward-looking'. Such 'forward looking' statements are subject
to risks and uncertainties and therefore actual results could be
different from what the Directors envisage in terms of future
performance and outlook.
Acknowledgement
The Board of Directors express their sincere appreciation for the
contribution and commitment of the employees of the Company and for the
excellent support provided by the shareholders, customers,
distributors, suppliers, bankers, media and other service providers
during the financial year under review.
For and on behalf of the Board of Directors
For Jyothy Laboratories Limited
M. P. Ramachandran
Chairman & Managing Director
Mumbai, May 23, 2012
Mar 31, 2011
The Members,
The Board of Directors is pleased to present the 20th Annual Report
together with the Audited Financial Statements for the year ended March
31, 2011 compared with previous Financial year as follows:
(Rs. in lacs)
Financial results Financial Financial
Year ended Year ended
March 31, 2011 March 31, 2010
Sales (net of trade discount) 66,505.14 62,622.66
Other Income 2,760.44 1,818.78
Profit before depreciation
and interest 10,676.88 11,212.93
Interest and Finance Charges 41.42 61.16
Depreciation, Amortization
and Impairment 1,078.55 1,046.30
Profit before tax 9,556.91 10,105.47
Provision for tax
- Current tax 1295.00 1,860.00
- Deferred tax charge 296.72 259.59
- (Excess) provision for current
tax of earlier year (61.48) (18.82)
Profit after tax 8,026.67 8,004.70
Balance as per last Balance Sheet 1,524.30 904.46
à Brought forward
Debit Balance of Profit and Loss
Account of Sri Sai Homecare
Products Private Limited
pursuant to Scheme of Amalgamation (128.55) Ã
Balance available for appropriations 9,422.42 8,909.16
Appropriations:
Final Dividend on Equity Shares 4031.60 2,902.75
Corp. Dividend Tax 654.03 482.11
Transfer to General Reserve 2000.00 4,000.00
Balance Carried Forward
(Profit and Loss Account) 2736.79 1,524.30
Earning Per Share
(Basic and Diluted) 10.35 11.03
Dividend Per Share 5.00 4.00
Performance
During the financial year ended March 31, 2011, the Company recorded
Sales (net of trade discount) at Rs. 66,505.14 lac compared to Rs.
62,622.66 lac in the previous financial year. In the financial year
under review, Profit before Tax stood at Rs. 9,556.91 lac compared to Rs.
10,105.47 lac in previous financial year.
The Sales (net of trade discount) in Financial Year under review had
grown by 6.2% compared to the previous year. The sales of soaps and
detergents grew @ 13.50%, however, the sales in homecare segment
declined by 10.2% due to adverse climatic condition in Eastern Uttar
Pradesh, Bihar & Jharkhand and heavy discounting at whole-sale market.
The profitability was also adversely impacted due to lower margins in
case of mosquito repellant category, general increase in labour and
other costs and substantial increase in Advertisement and Sales
Promotion Costs at Rs. 5378 lac up by Rs. 1595 lac over previous year.
During the Financial Year 2010-11, Indian economy continued to be
impacted by high rate of inflation. The measures taken by the
Government and the Reserve Bank of India to stem the same have impacted
the rate of growth and resulted into increased cost and contraction of
credit. Consequently, the growth in industrial activity and non-food
demand from consumers de-accelerated while cost pressures affected the
profitability. In the circumstances, the performance of the Company
during the Financial Year has been satisfactory.
Dividend
For the financial year under review, the Board is pleased to recommend
a dividend @ Rs. 5/- per equity share of face value of Re.1/- each, (i.e.
500% of face Value of Equity Shares), aggregating to Rs. 4031.60 lac. In
the previous financial year, the Board had recommend and paid a
dividend @ Rs. 4.00 per equity share of face value of Re.1/- each,
(i.e.400% of face Value of Equity Share), aggregating to Rs. 2902.75 lac.
The dividend will be paid to eligible members after its approval by the
Members in the ensuing Annual General Meeting
Qualified Institutional Placement
During the year, the Company has issued 80,63,200 Equity Shares of
Re.1/- each at a premium of Rs. 281.62 per equity share to Qualified
Institutional Buyers in terms of Chapter XIII A of the Securities &
Exchange Board of India (Disclosure and Investor Protection)
Guidelines, 2000. Consequently, the paid-up share capital of the
Company has increased from 72568800 Equity Shares of Rs. 1/- each to
80632000 equity shares of Rs. 1/- each.
Utilization of QIP Proceeds
The Audit Committee and the Board of Directors of the Company have
taken on record the following statement of utilization of the proceeds
of the amounts raised by the Company consequent to the issue of 8063200
Equity Shares of Re.1/- each at a premium of Rs. 281.62 per equity share
to Qualified Institutional Buyers in terms of Chapter XIII A of the
Securities and Exchange Board of India (Disclosure and Investor
Protection) Guidelines, 2000.
(Rs. in Lac)
Sr. Particulars Amount
No.
1 Gross proceeds 22,788.22
Less: Expenses incurred 644.29
2 Net Proceeds 22,143.93
Utilization
1 Investment in Henkel India Limited 6,073.09
2 Fixed Deposits / Corporate
Deposits with Banks 16,070.84
Total Utilization 22,143.93
The unutilized funds are planned to be invested in acquisition of
Henkel India Limited.
New Developments Henkel India Limited
- The Company has acquired 1,73,51,686 equity shares of Rs. 10/- each of
Henkel India Limited (HIL) from Tamilnadu Petroproducts Limited @ Rs.
35/- per Equity Share. The Company plans to acquire all the equity and
preference shares, currently, held by Henkel AG & Co., KGaA, Germany
and also to make open offer to public shareholders to acquire
additional 20% Equity Share Capital of HIL. The equity shares of HIL
are listed on Bombay, Madras and Calcutta Stock exchanges.
Household Insecticide:
- The Company has introduced variety of products made out of technology
DEPA, a repellant formulation for protection from all blood sucking
insects and mosquitoes from "DRDO" (Defence Research and Development
Organisation), Ministry of Defence, Government of India. This
technological products enables the Company to manufacture and market
the products in India including to armed forces, and to many countries
abroad. The repellant cream and wipers were also launched in the market
during the year.
Surface Cleaning:
- Products like dish-wash bar, liquid and scrubbers were launched at
all India level in the last quarter of the previous financial year.
- Exo Dish Shine in round format was launched which was accepted well
by market
Management Discussion and Analysis Report:
Management's Discussion and Analysis Report is attached and forms part
of this Directors Report.
Corporate Governance:
As per Clause 49 of the Listing Agreement with the stock exchanges, a
Section on Corporate Governance is presented separately and forms part
of this Report.
Subsidiary Companies
The Central Government has vide its letter No. 47/45/2001 Ã Cl. III
dated 09.02.2011 exempted the Company from attaching Annual Accounts
and other documents in respect of its subsidiaries to the Annual Report
of the Company for the year ended March 31, 2011. As required vide
above letter, statement in respect of each of the subsidiary, giving
details of capital, reserves, total assets and liabilities, details of
investments, turnover, profit before taxation and proposed dividend is
attached to the Consolidated Balance Sheet. Annual Accounts of the
subsidiary companies and the related detailed information will be made
available to the shareholders of the Company, seeking such information
and will also be available for inspection at the Registered Office of
the Company.
Jyothy Fabricare Services Limited
Members are aware that the Company had started a new Value Added
Service in fabric care segment to provide "World class laundry at
affordable price at your door step" and other related services through
its subsidiary company namely Jyothy Fabricare Services Limited (JFSL).
A world-class facility equipped with world class machinery and
equipments most updated technology, supported by a robust IT structure
and housed in an area of 70,000 square feet built on 2 acres of land at
Doddaballapur, near Bengalore, Karnataka, became operational in
November 2009. JFSL is providing fabric care services under various
brands namely JFSL Corporate, Fabric Spa, JFSL rentals, Fabric spa busy
easy and Snoways.
Subsequent to the close of the Financial Year, the Company has acquired
control over following companies engaged in business of laundry and
related services which would extend its presence to Delhi and Mumbai:
- Diamond Fabcare Private Limited, Delhi (Wardrobe) with 64 outlets,
and
- Akash Cleaners Private Limited, Mumbai (Akash) with 4 outlets.
Tara India Fund IV Trust has consented to fund the future expansion of
this business, by agreeing to provide up to Rs. 100/- Crore in Equity
/ Convertible Instrument of which the first trench of Rs. 50 Crore is
likely to be received by end June 2011. This investment values JFSL
business at Rs. 400 Crore.
Amalgamation
The process of amalgamation of Sri Sai Homecare Products Private
Limited, a wholly owned subsidiary company with the Company with effect
from April 1, 2010, was over on January 28, 2011, when Bombay High
Court passed the Order approving Scheme of Amalgamation. The said
Company has now merged with the Company.
Employee Relations
Employee relations remained cordial during the year under review.
Fixed Deposits
The Company did not take any fixed deposits from the public and no
fixed deposits were outstanding or unclaimed as on March 31, 2011.
Directors
In accordance with the requirements of the Companies Act, 1956, and the
Articles of Association of the Company, Mr. K. P. Padmakumar and Ms.
Bipin R. Shah, Directors of the Company are due to retire by rotation
at the ensuing Annual General Meeting of the Company and being eligible
have offered themselves for re-appointment. The Board recommends their
re-appointment.
The tenure of Ms. M. R. Jyothy as Whole-Time Director will come to an
end on November 30, 2011. The Board has approved her re-appointment as
stated in the Notice for the 20th Annual General Meeting, scheduled to
be held on August 29, 2011 and explanatory statement attached thereto.
Auditors
M/s. S. R. Batliboi & Associates, Chartered Accountants, Mumbai, having
registration number 101049W, Statutory Auditors of the Company,
continue to hold office until conclusion of the Twentieth Annual
General Meeting and being eligible offer themselves for re-appointment.
A certificate has been received from the Auditors to the effect that
their appointment, if made, would be within the limits prescribed under
Section 224 (1B) of the Companies Act, 1956. The Auditors have advised
that they have subjected themselves to the peer review process of the
Institute of Chartered Accountants of India (ICAI) and hold a valid
certificate issued by the Peer Review Board of the ICAI.
Directors Responsibility Statement:
Pursuant to requirements of Section 217(2AA) of the Companies Act,
1956, your Directors confirm that:
1. in the preparation of the annual accounts for the financial year
ended March 31, 2011, the applicable accounting standards have been
followed;
2. the Directors have selected such accounting policies and applied
them consistently and made judgements and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at March 31, 2011 and of the Profit of the Company
for the financial year ended on that date;
3. the Directors have taken proper and sufficient care in 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;
4. the Directors have prepared the annual accounts for the financial
year ended March 31, 2011 on a 'going concern' basis.
Consolidated Financial Statements
In accordance with Accounting Standard 21, issued by the Institute of
Chartered Accountants of India, Consolidated Financial Statements have
been provided in the Annual Report. These Consolidated Financial
Reports provide financial information about your Company and its
subsidiaries as a single economic entity. The Consolidated Financial
Statements form part of this Annual Report.
Conservation of Energy and Technology Absorption
With regard to the requirements of Section 217(1)(e) of the Companies
Act, 1956, read with the Companies (Disclosure of Particulars in the
Report of the Board of Directors) Rules, 1988, the Company has nothing
specific to report.
Foreign Exchange Earnings and Outgo
(Rs. in Lacs)
Particulars 2010-11 2009-10
Foreign exchange earnings 699.88 732.42
Foreign exchange outgo 375.56 590.89
Particulars of Employees
Particular of employees as required under Section 217(2A) of the
Companies Act, 1956, read with the Companies (Particulars of Employees)
Rules, 1975, as amended and forming part of the Directors' Report for
the year ended March 31, 2011 are attached to this report.
Risk and Concerns
The high rate of inflation, continue to cause anxiety about the growth
of Indian economy and the performance of the Corporate including FMCG
sector.
We believe that the Company operates in certain segments of FMCG space
where demand for the Company's products is driven more by needs and may
be impacted more by weather conditions and colour trends in wearing
apparels. To some extent, the Company is protected from pressures like
slow down of economy due to small unit values of consumer packs of its
products. The Company continues to promote usage of white apparels,
widen its products range, introducing new variants of its products,
brand extensions, create awareness and communicate utility value of its
products to consumers through mass media advertisements and increasing
geographical reach of its products.
The Company would continue to try to protect profitability by
containing cost increases through greater efficiency in operation and
judicious increase in prices. During the year, the Company was forced
to increase the price of its flagship brand 'Ujala' due to increase in
prices of raw materials.
The Company is perceived to depend for Turnover and Profits on a few
products and that any adverse movement in sale or profitability of such
products may compromise its performance. The Company is alive to the
matter and has been continuously extending its products range and
geographical reach within India and squeezing cost through greater
operational efficiency without any compromise in quality. The Company
plans to acquire controlling stakes in Henkel India Limited with the
objective to broad base its product range and consumers and to grow
inorganically as well.
The management will continue to monitor the risks concerning the
Company and will respond appropriately to every situation.
Internal Control Systems and Its Adequacy
The Company has adequate internal control systems and procedures in
place for effective and smooth conduct of business and to meet
exigencies of operation and growth. The key business processes have
been documented. The transactions are recorded and reported in
conformity with generally accepted accounting practices. The internal
control systems and procedures ensure reliability of financial
reporting, compliance with the Company's policies and practices,
governmental regulations and statutes. Internal Audit is conducted by
independent firm of auditors. Internal Auditors regularly check the
adequacy of the system, their observations are reviewed by the
management and remedial measures, as necessary, are taken.
Cautionary Note
Certain statements in the "Management discussion and Analysis" section
may be 'forward-looking'. Such 'forward-looking' statements are subject
to risks and uncertainties and therefore actual results could be
different from what the Directors envisage in terms of future
performance and outlook.
Acknowledgement
The Board of Directors express their sincere appreciation for the
contribution and commitment of the employees of the Company and for the
excellent support provided by the shareholders, customers,
distributors, suppliers, bankers, media and other service providers,
during the financial year under review.
For and on behalf of the Board of Directors
For Jyothy Laboratories Limited
M. P. Ramachandran
Chairman & Managing Director
Mumbai, May 30, 2011
Mar 31, 2010
The Board of Directors is pleased to present the Nineteenth Annual
Report together with the Audited Financial Statements for the year
ended March 31, 2010 compared with previous period (July 1, 2008 to
March 31, 2009) as follows:
Financial result (Rs. in lacs)
Financial year Financial period
ended ended
March 31.2010 March 31.2010
(12 Months) (9 Months)
Sales (net of trade discount) 62,622.66 38,416.86
Other Income 1,818.78 774.60
Profit before depreciation and interest 11,212.93 5,775.28
Interest & Finance Charges 61.16 36.63
Depreciation, Amortization & Impairment 1,046.30 681.24
Profit before tax 10,105.47 5,057.41
Provision for tax
- Current tax 1,860.00 707.76
- Deferred tax charge 259.59 189.84
- Fringe benefit tax 0.00 72.00
- (Excess)/Short provision for current
tax of earlier year (18.82) 77.29
Profit after tax 8,004.70 4,010.52
Balance as per the last Balance Sheet
- Brought forward 904.46 591.98
Balance available for appropriations 8,909.16 4,602.50
Appropriations:
Final Dividend on Equity Shares 2,902.75 1,451.38
Corp. Dividend Tax 482.11 246.66
Transfer to General Reserve 4,000.00 2,000.00
Balance Carried Forward (Profit & Loss A/c) 1,524.30 904.46
* Earning Per Share (for 12 months in the current financial year and
for 9 months for the 11.03 5.53 previous financial period)
* Dividend Per Share (for 12 months in the current financial year and
for 9 months for the previous financial period) 4.00 2.00
*(Based on Face Value of Re.1/- per Equity Share)
Change in the financial year
As you are aware, the Company had changed its financial year to end on
March 31 to coincide the accounting year of the Company with the
conventional financial year to enhance comparability with other
companies. Accordingly, the previous accounting period was for nine
months period from July 1, 2008 to March 31, 2009. Therefore, the
attached financials which have been prepared for twelve month
period/accounting year (April 1, 2009 to March 31, 2010), are not
comparable with the previous period reporting which had been for nine
month period i.e. July 1, 2008 to March 31, 2009.
Performance
During the financial year ended March 31, 2010, the Company recorded
Sales (net of trade discount) at Rs. 62,622.66 lacs compared to Rs.
38,416.86 lacs in the previous 9-month financial period. In the
financial year under review, Profit before Tax stood at Rs. 10,105.47
lacs compared to Rs. 5,057.41 lacs in previous 9-month financial
period.
On a like to like basis the Sales (net of trade discount) in Financial
Year under review had grown by 27.5% compared to corresponding previous
twelve-months. The Sales (net of trade discount) and Profit before tax
of the two periods compare as follows:
(Rs. in lacs)
Particulars April 09-March 10 April 08-March 09 %
(Audited) (Audited) Growth
Sales (net of trade 62,622.66 49,119.68 27.5%
discount)
Profit before tax 10,105.47 7,297.22 38.5%
The Company has performed very well both in terms of growth in sales
and profitability.
With signs of receding food inflation and hope of better weather
conditions, launch of new products, leveraging and extention of
existing brands both in product range and pan-India launches and
acquisition of new technology in mosquito repellents should see your
Company achieve still better growth in the coming years.
Dividend
For the financial year under review, the Board is pleased to recommend
a dividend @ Rs. 4 per equity share of face value of Re.1/- each, (i.e.
400% of face Value of Equity Shares), aggregating to Rs. 2,902.75 lacs.
In the previous financial period (9 Months), July 2008-March 2009, the
Board had recommended and paid a dividend @ Rs. 2.00 per equity share
of face value of Re. 1/- each, (i.e. 200% of face Value of Equity
Share), aggregating to Rs. 1,451.38 lacs.
The dividend will be paid to eligible members after its approval by the
Members in Annual General Meeting.
Finance
The Company continues to remain debt-free. The cash and bank balances
as on March 31, 2010 amount to Rs.12,117.47 lacs.
New developments Fabric care:
- The Company has planned Brand extension to take Ujala detergent to
other states in a phased manner. We are in Kerala since 2003 and
achieved a significant market share in mid-segment.
- Signed up with Sachin Tendulkar as Brand Ambassador for UJALA brand.
Household Insecticide:
- The Company is expanding its reach through new products. In
November, 2009, the Company bought technology DEPA, a repellent
formulation for protection from all blood sucking insects and mosquitos
from ÃDRDOÃ (Defence Research and Development Organisation), Ministry
of Defence, Government of India which allows the Company to manufacture
and market the products in India including to armed forces, and to many
countries abroad. The repellent cream and wipers are in the process of
being launched.
- To promote the products in this category, the Company launched a new
media campaign and packaging for the brand ÃMAXOÃ Ã ÃRaat Achhi To Din
Achhaà which caught fancy of the viewers and has been very successful.
- The mosquito repellent coil manufacturing unit in fiscal incentive
area of Jammu went into full scale production during this fiscal year.
This manufacturing unit is equipped with the most updated technology in
coil manufacturing.
Surface Cleaning:
- The Company achieved 24% market share in southern India and has
launched the product at all India level in the last quarter of the
financial year. The products in this category namely dish- wash bar,
liquid and scrubbers have penetrated into all major cities in India.
Management Discussion & Analysis Report:
Management Discussion & Analysis Report is attached and forms part of
this Directorsà Report.
Corporate Governance
As per Clause 49 of the Listing Agreement with the stock exchanges, a
Section on Corporate Governance is presented separately and forms part
of this Report.
Subsidiary Companies
The Central Government has vide its letter No. 47/4/2010 Ã Cl. III
dated 26.03.2010 exempted the Company from attaching Annual Accounts
and other documents in respect of its four subsidiaries to the Annual
Report of the Company for the year ended March 31, 2010. As required
vide above letter, statement in respect of each of the subsidiary,
giving the details of capital, reserves, total assets and liabilities,
details of investments, turnover, profit before taxation and proposed
dividend is attached to the Consolidated Balance Sheet. Annual Accounts
of the subsidiary companies and the related detailed information will
be made available to the shareholders of the Company, seeking such
information and will also be available for inspection at the Registered
Office of the Company.
Jyothy Fabricare Services Limited
Members are aware that the Company had started a new Value Added
Service in fabric care segment to provide ÃWorld-class laundry at
affordable price at your door stepà and other related services through
its subsidiary company namely ÃJyothy Fabricare Services Limited
(JFSL)Ã. JFSL is providing fabric care services under various brands
namely JFSL Corporate, Fabric Spa, JFSL rentals, Fabric Spa busy easy
and Snoways.
A world-class facility equipped with world-class machinery and
equipments, most updated technology, supported by a robust IT structure
and housed in an area of 70,000 square feet built on 2 acres of land at
Doddaballapur, near Bangalore, Karnataka, became operational in
November 2009.
The Company had earlier launched ÃSnowaysà chain of laundry through
acquisition of 8 retail outlets which have now grown to 30. ÃFabric
Spaà a premium brand was launched on November 9, 2009 in Bangalore.
Response so far from consumers is very encouraging.
During the year under report, Snoways Laundrers & Drycleaners Private
Limited (Snoways) became an associate company of Jyothy Fabricare
Services Limited.
Amalgamation
Your Directors have proposed amalgamation of Sri Sai Homecare Products
Private Limited, a wholly-owned subsidiary company with the Company
with effect from April 1, 2010.
Employee Relations
Employee relations remained cordial during the year under review.
Fixed Deposits
The Company did not take any fixed deposits from the public and no
fixed deposits were outstanding or unclaimed as on March 31, 2010.
Directors
In accordance with the requirements of the Companies Act, 1956, and the
Articles of Association of the Company, Mr. Nilesh B. Mehta and Ms. M.
R. Jyothy, Directors of the Company are due to retire by rotation at
the ensuing Annual General Meeting of the Company and being eligible
have offered themselves for re-appointment. The Board recommends their
re-appointment.
Auditors
M/s. S. R. Batliboi & Associates, Chartered Accountants, Mumbai,
Statutory Auditors of the Company, continue to hold office until
conclusion of the Nineteenth Annual General Meeting and being eligible
offer themselves for re-appointment.
A certificate has been received from the Auditors to the effect that
their appointment, if made, would be within the limits prescribed under
Section 224 (1B) of the Companies Act, 1956. The Auditors have advised
that they have subjected themselves to the peer review process of the
Institute of Chartered Accountants of India (ICAI) and hold a valid
certificate issued by the Peer Review Board of the ICAI.
Directorsà Responsibility Statement:
Pursuant to requirements of Section 217(2AA) of the Companies Act,
1956, your Directors confirm that:
1. in the preparation of the annual accounts for the financial year
ended March 31, 2010, the applicable accounting standards have been
followed;
2. the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at March 31, 2010 and of the Profit of the Company
for the financial year ended on that date;
3. the Directors have taken proper and sufficient care in 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;
4. the Directors have prepared the annual accounts for the financial
year ended March 31, 2010 on a Ãgoing concernà basis.
Consolidated Financial Statements
In accordance with Accounting Standard 21, issued by the Institute of
Chartered Accountants of India, Consolidated Financial Statements have
been provided in the Annual Report. These Consolidated Financial
Reports provide financial information about your Company and its
subsidiaries as a single economic entity. The Consolidated Financial
Statements form part of this Annual Report.
Conservation of Energy & Technology Absorption
With regard to the requirements of Section 217(1)(e) of the Companies
Act, 1956, read with the Companies (Disclosure of Particulars in the
Report of the Board of Directors) Rules, 1988, the Company has nothing
specific to report.
Particulars of Employees
Particulars of employees as required under Section 217(2A) of the
Companies Act, 1956, read with the Companies (Particulars of Employees)
Rules, 1975, as amended and forming part of the Directorsà Report for
the year ended March 31, 2010 are not attached to this report as
permitted under the provisions of Section 219(1)(b) (iv) of the
Companies Act, 1956. Members interested in obtaining the said
information may write to the Company Secretary at the registered office
of the Company.
Acknowledgement
The Board of Directors express their sincere appreciation for the
contribution and commitment of the employees of the Company and
for the excellent support provided by the shareholders, customers,
distributors, suppliers, bankers, media and other service providers,
during the financial year under review.
For and on behalf of the Board of Directors
For Jyothy Laboratories Limited
M. P. Ramachandran
Chairman & Managing Director
Mumbai, May 25, 2010
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