Your Directors have pleasure in presenting the 13th Annual Report on the business andoperation of your Company along with the standalone and consolidated financial statementsfor the year ended 31st March 2017.
|Particulars ||Standalone ||Consolidated |
| ||31.03.2017 ||31.03.2016 ||31.03.2017 ||31.03.2016 |
|Net sales / Income from Operation ||10547.85 ||10008.54 ||10547.85 ||10008.54 |
|Other Income ||195.76 ||73.01 ||195.76 ||73.01 |
|Interest & Finance Charges ||49.59 ||36.48 ||49.60 ||36.48 |
|Depreciation ||635.92 ||1048.50 ||636.34 ||1048.92 |
|Profit /(Loss) before Tax ||518.72 ||-2162.64 ||517.26 ||-2163.95 |
|Tax Expense: || || || || |
|Current tax (provision for tax) ||5.28 ||- ||5.28 ||- |
|Deferred tax asset ||(1684.87) ||- ||(1684.87) ||- |
|Tax for earlier years ||- ||0.16 ||- ||0.16 |
|Total Tax Expense ||(1679.59) ||0.16 ||(1679.59) ||0.16 |
|Profit /(Loss) after Tax ||2198.31 ||-2162.80 ||2196.86 ||-2164.11 |
|Profit /(Loss) to be carried to the Balance Sheet ||2198.31 ||-2162.80 ||2196.86 ||-2164.11 |
|Paid up Equity Share Capital (Face Value of H10/- each) ||4412.04 ||3763.50 ||4412.04 ||3763.50 |
|Reserve excluding revaluation reserve ||- ||- ||- ||- |
|Basic EPS (in Rupees not annualized) Excluding extra ordinary items ||5.46 ||-3.17 ||5.46 ||-3.18 |
|Diluted EPS (in Rupees not annualized) Excluding extra ordinary items ||3.70 ||-3.17 ||3.70 ||-3.18 |
REVIEW OF OPERATIONS
The Turnover from the operation of the company during the financial year ended 31stMarch 2017 amounted to H1054.78 Million as compared to H1000.85 Million during theprevious year ended 31.03.2016. The Turnover of the company has increased by 5.39% fromthe previous year.
The Directors hereby inform that in the financial year 2016-17 the Board of Directorshas not recommended any dividend due to expansion planning of the company where it has toinvest some funds of the Company.
ABRIDGED FINANCIAL STATEMENTS
In accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 (hereinafter referred to as Listing Regulations') and Section 136 of theCompanies Act 2013 read with Rule 10 of the Companies (Accounts) Rules 2014 theabridged Annual Report containing salient features of the financial statements includingConsolidated Financial Statements for the financial year 2016-17 along with statementcontaining salient features of the Directors' Report (including Management Discussion& Analysis and Corporate Governance Report) is being sent to all shareholders who havenot registered their email address(es) for the purpose of receiving documents/communication from the Company in electronic mode. Please note that you will be entitledto be furnished free of cost the full Annual Report 2016-17 upon receipt of writtenrequest from you as a member of the Company. Full version of the Annual Report 2016-17containing complete Balance Sheet Statement of Profit & Loss other statements andnotes thereto including Consolidated Financial Statements prepared as per therequirements of Schedule III to the Companies Act 2013 Directors' Report (includingManagement Discussion and Analysis and Corporate Governance Report is being sent viaemail to all shareholders who have provided their email address(es). Full version ofAnnual Report 2016-17 is also available for inspection at the corporate Office of theCompany during working hours up to the date of ensuing Annual general meeting (AGM). It isalso available at the Company's website at www.svendgaard.com.
CONSOLIDATED FINANCIAL STATEMENTS
In compliance with the applicable provisions of Companies Act 2013 including theAccounting Standard 21 on Consolidated Financial Statements this Annual Report alsoincludes Consolidated Financial Statements for the financial year 2016- 17.
OPERATIONS AND BUSINESS PERFORMANCE
Kindly refer to Management Discussion & Analysis and Corporate Governance Reportwhich forms part of this report.
JHS has adopted the industry best practices of Corporate Governance and aims to run itsbusiness on the highest principles of governance and ethics. At JHS Corporate Governanceis more than just adherence to the statutory and regulatory requirements. It is equallyabout focusing on voluntary practices that underlie the highest levels of transparency.
JHS's governance framework is driven by the objective of enhancing long termstakeholder value without compromising on ethical standards and corporate socialresponsibilities. These guiding principles are also articulated through the Company's codeof business conduct Corporate Governance Guidelines charter of various subcommittees anddisclosure policy. Complete disclosures regarding corporate governance are provided in theCorporate Governance Report which can be referred to for further details.
A certificate from M/s Mohit & Associates Practising Company Secretary regardingcompliance of the conditions of Corporate Governance as stipulated under Schedule V ofthe Listing Regulations is attached as Annexure 1' and forms part of this report.Certificate of the CEO/CFO inter-alia confirming the correctness of the financialstatements compliance with Company`s Code of Conduct adequacy of the internal controlmeasures and reporting of matters to the auditors and the Audit committee in terms ofRegulation 17 of the Listing Regulations is attached in the Corporate Governance reportand forms part of this report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. Vishal Sarad Shah Whole-Time Director and Mr. Piyush Goenka Nominee Directorstepped down from the Board of the Company with effect from 01.06.2016 and 18.10.2016. Mr.Vishal Sarad Shah was appointed as Whole-Time Director at the Annual General Meeting ofthe Company held on September 01 2015. The Board places on record its appreciation of theinvaluable contribution and guidance provided by both of them.
Mr. Dhiraj Kumar Jha resigned from the post of Company Secretary & ComplianceOfficer of the Company with effect from 22nd October 2016 and Mrs. Deepshikha Tomar wasappointed as the Company Secretary & Compliance Officer in the Board Meeting dated27th October 2016. Mr. Neeraj Kumar also resigned from the post of Chief FinancialOfficer of the company in the Board meeting dated 27th October 2016 and Mr. Ajay Bansalwas appointed as the Chief Financial Officer of the company with effect from the samedate.
Mrs. Manisha Lath Gupta was regularized as an Independent Director in the AnnualGeneral Meeting held on 22nd August 2016. She was appointed as an Additional Directorwith effect from February 11 2016.
Pursuant to Section 152 and other applicable provisions if any of the Companies Act2013 one-third of such of the Directors as are liable to retire by rotation shall retireevery year and if eligible offer themselves for re-appointment at every AGM.Consequently Mr. Vanamali Polavaram Non-Executive Director will retire by rotation atthe ensuing AGM and being eligible offers himself for re-appointment in accordance withthe provisions of the Companies Act 2013.
During the year the non-executive directors of the Company had no pecuniaryrelationship or transactions with the Company.
The key Managerial personnel (KMP) in the Company as per section 2(51) and 203 of theCompanies Act 2013 are as follows:
|Mr. Nikhil Nanda ||- Managing Director |
|Mr. Ajay Bansal ||- Chief Financial Officer |
|Mr. Paramvir Singh ||- Chief Executive Officer |
|Mrs. Deepshikha Tomar ||- Company Secretary & |
| ||Compliance Officer |
POLICY ON DIRECTORS' APPOINTMENT AND POLICY ON REMUNERATION
Pursuant to Section 134(3)(e) and Section 178(3) of the Companies Act 2013 the policyon appointment of Board members including criteria for determining qualificationspositive attributes independence of a Director and the policy on remuneration ofDirectors KMP and other employees is attached as `Annexure 2 & 3` respectively whichforms part of this report.
PARTICULARS OF REMUNERATION OF DIRECTORS/ KMP/ EMPLOYEES
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 and Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is attached as Annexure 4' whichforms part of this report. The information showing names and other particulars ofemployees as per Rule 5(2) and 5(3) of the aforesaid Rules forms part of this report.However as per first proviso to Section 136(1) of the Act the Annual Report excludingthe aforesaid information is being sent to the members of the Company and others entitledthereto. The said information is available for inspection by members at the corporateOffice of the Company during business hours on all working days upto the date of ensuingannual general meeting. Any member interested in obtaining a copy thereof may also writeto the Company Secretary at the corporate Office of the Company.
COMMITTEES OF THE BOARD
Currently the Board has five committees: the Audit Committee the Nomination &Remuneration Committee theStakeholdersRelationshipCommitteetheCompensation Committee andthe Allotment Committee. A detailed note on the composition of the Board and itscommittees is provided in the Corporate Governance Report section of this report.
The Company has duly constituted an Audit Committee whose detailed composition andpowers are provided in the Corporate Governance Report. There were no recommendations ofthe Audit Committee which have not been accepted by the Board during the financial year.
NUMBER OF BOARD & COMMITTEE MEETINGS
During the year under review four Board meetings four Audit Committee meetings fourStakeholders Relationship Committee meetings one Nomination & Remuneration Committeemeetings and five Allotment Committee meetings were convened and held. Details andattendance of such Board & Committees meetings are mentioned in Corporate GovernanceReport.
Pursuant to clause VII (1) of Schedule IV of the Companies Act 2013 the IndependentDirectors had a separate meeting on 13.02.2017.
DECLARATION OF INDEPENDENCE BY DIRECTORS
Declaration given by Independent Directors meeting the criteria of Independence asprovided in sub-section (6) of Section 149 of the Companies Act 2013 is received andtaken on record.
PERFORMANCE EVALUATION OF THE BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS
Pursuant to applicable provisions of the Companies Act 2013 and the ListingRegulations the Board in consultation with its Nomination & Remuneration Committeehas formulated a framework containing inter-alia the criteria for performance evaluationof the entire Board of the Company its Committees and individual Directors includingIndependent Directors.
A structured questionnaire covering various aspects of the functioning of the boardand its Committee such as adequacy of the constitution and composition of the Board andits Committees matters addressed in the Board and Committee meetings processes followedat the meeting Board`s focus regulatory compliances and Corporate Governance etc. isin place. Similarly for evaluation of individual Director's performance thequestionnaire covering various aspects like his/her profile contribution in Board andCommittee meetings execution and performance of specific duties obligations regulatorycompliances and governance etc. is also in place.
Board members had submitted their response for evaluating the entire Board respectivecommittees of which they are members and of their peer Board members including Chairmanof the Board.
The Independent Directors had met separately on February 13 2017 without the presenceof Non-Independent Directors and the members of management and discussed inter-alia theperformance of Non-Independent Directors and Board as a whole and the performance of theChairman of the Company after taking into consideration the views of Executive and Non-Executive Directors.
The performance evaluation of all the Independent Directors have been done by theentire Board excluding the Director being evaluated. On the basis of performanceevaluation done by the Board it shall be determined whether to extend or continue theirterm of appointment whenever the respective term expires.
The Directors expressed their satisfaction with the evaluation process.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provision under Section 134(5) of the Companies Act 2013 with respectto the Directors' Responsibility Statement the directors confirm:
i. That in the preparation of the annual accounts the applicable accounting standardshave been followed and there are no material departures;
ii. That they had selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of a_airs of the Company at the end of the financial year and of theprofit of the Company for that period;
iii. That they had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
iv. That they had prepared the annual accounts on a going concern basis;
v. That they had laid down internal financial controls to be followed by the Companyand such internal financial controls are adequate and were operating effectively;
vi. That they had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
STATUTORY AUDITORS & THEIR REPORT
M/s S. N. Dhawan & Co. LLP Chartered Accountants Statutory Auditors of theCompany will retire at the conclusion of the ensuing Annual General Meeting and beingeligible have consented and offered themselves for re-appointment as Statutory Auditorsfor the financial year 2017-18. The Company has received confirmation from M/s S. N.Dhawan & Co LLP. Chartered Accountants to the effect that their re-appointment ifmade would be within the prescribed limits under Section 141(3) (g) of the Companies Act2013 and relevant rules prescribed thereunder and that they are not disqualified forre-appointment.
AUDITORS QUALIFICATION AND MANAGEMENTS REPRESENTATION THEREON:
Auditors Qualification: The Company has not recognised an income amounting to H2750.00Lakhs on account of
compensation agreed and received subsequent to the year-end in terms of settlementagreement with its customers dated March 28 2017 in the financial statements for the yearended March 31 2017 which constitutes a departure from the Accounting Standardsprescribed in section 133 of the Companies Act 2013. Had the management recognised thesaid exceptional income would have increased by H2750.00 Lakhs. The carrying amount ofother current assets would have increased by H2475 Lakhs net profit after tax andreserves and surplus would have increased by H1900.25 Lakhs and deferred tax assets wouldhave reduced by H849.75 Lakhs.
Managements Representation : The amounts received from P&G on account of Settlementshould be considered and accounted for as Income only in 2017-18 on the following grounds:
1. Since there was material conditions precedent to the settlement agreement and thesame were complied with in April' 2017:
The Arbitral Tribunal has given its Final Award on 03.04.2017;
Two SLP's from the Supreme Court were withdrawn on 06.04.2017 & 12.04.2017.
2. The applicable TDS on the respective settlement amounts have been deducted anddeposited during the FY 2017-18 only.
3. One of the conditions in the settlement agreement is pending. Though it is not acondition precedent to the payment of the settlement amount however is a term of theagreement and thus unless not concluded the Settlement Agreement can't be termed ascompleted.
As the material conditions precedent were dependent on the authorities which were notwithin the control of the company. Thus it would be inappropriate in view of themanagement to recognize such an asset in FY 2016-17.
SECRETARIAL AUDITORS & THEIR REPORT
The Board had appointed M/s Mohit & Associates Practising Company Secretaries asSecretarial Auditor to conduct the secretarial audit of the company for the financial year2016-17 pursuant to the provisions of Section 204 of the Companies Act 2013. TheSecretarial Audit Report submitted by them in the prescribed form MR- 3 is attached asAnnexure 5' and forms part of this report.
There are no qualifications or observations or other remarks of the SecretarialAuditors in the Report issued by them for the financial year 2016-17 which call for anyexplanation from the Board of Directors.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS OTHER THAN THOSE WHICH ARE REPORTABLETO THE CENTRAL GOVERNMENT
The Statutory Auditors or Secretarial Auditors of the Company have not reported anyfrauds to the Audit Committee or to the Board of Directors under Section 143(12) of theCompanies Act 2013 including rules made thereunder.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
According to Section 134(5)(e) of the Companies Act 2013 the term Internal FinancialControl (IFC) means the policies and procedures adopted by the company for ensuring theorderly and e_cient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information.
The Company has a well placed proper and adequate IFC system which ensures that allassets are safeguarded and protected and that the transactions are authorised recordedand reported correctly. The Company's IFC system also comprises due compliances withCompany`s policies and Standard Operating Procedures (SOP`s) and audit and compliancesupplemented by internal audit checks from M/s VSD & Associates CharteredAccountants the Internal Auditors. The Internal Auditors independently evaluate theadequacy of internal controls and concurrently audit the majority of the transactions invalue terms. Independence of the audit and compliance is ensured by direct reporting ofInternal Audit Division and Internal Auditors to the Audit Committee of the Board.Additionally during the year M/s MAZARS Advisory Private Limited' have also beenengaged for providing assistance in improvising IFC framework (including preparation ofRisk & Control Matrices for various processes) and deployment of Self Assessment Tool.
The Companies Act 2013 re-emphasizes the need for an effective Internal FinancialControl system in the Company. The Board has adopted policies and procedures for ensuringthe orderly and e_cient conduct of its business including adherence to the Company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial disclosures. The details in respect of internalfinancial control and their adequacy are included in the Management Discussion &Analysis which forms part of this report.
NATURE OF BUSINESS
There has been no change in the nature of business of the Company.
The Company has 2 subsidiaries i.e. M/s JHS Svendgaard Brands Limited (formerly knownas JHS Svendgaard Dental Care Limited) and M/s JHS Svendgaard Mechanical and WarehousePrivate Limited as on March 31 2017.
There are no associate companies within the meaning of Section 2(6) of the CompaniesAct 2013 ("Act"). There has been no material change in the nature of thebusiness of the subsidiaries. One of its subsidiary i.e. JHS Svendgaard Dental CareLimited has changed its name to JHS Svendgaard Brands Limited by passing a SpecialResolution in its ExtraOrdinary General Meeting dated 05th April 2017 and thereforechanged the object clause of the Memorandum of Association of the Company.
Pursuant to Section 129 (3) of the Companies Act 2013 and Accounting Standard- 21issued by the Institute of Chartered Accountants of India Consolidated FinancialStatements presented by the Company include the financial statements of its subsidiaries.
Further a separate statement containing salient features of the financial statementsof the subsidiaries in the prescribed form Form AOC-1 has been disclosed in theconsolidated financial statements.
Pursuant to the provisions of section 136 of the Act the financial statements of theCompany consolidated financial statements along with relevant documents and separateaudited accounts in respect of subsidiaries are available on the website of the Companywww.svendgaard.com.
DISCLOSURE ON AUDIT COMMITTEE
The details pertaining to composition of audit committee are included in the CorporateGovernance Report which forms part of this report.
EXTRACT OF ANNUAL RETURN
As provided under Section 92(3) of the Act the extract of annual return is given inAnnexure-6 in the prescribed Form MGT-9 which forms part of this report.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
The particulars of loans guarantees and investments have been disclosed in thefinancial statements.
CONTRACTS/ARRANGEMENTS WITH RELATED PARTIES
With reference to Section 134(3)(h) of the Companies Act 2013 all contracts andarrangements with related parties under Section 188(1) of the Act entered by the Companyduring the financial year were in the ordinary course of business and on an arm's lengthbasis. The Company presents a Statement of all related party transactions before the AuditCommittee on a quarterly basis specifying the nature value and terms and conditions oftransaction. Transactions with related parties are conducted in a transparent manner withthe interest of the Company as utmost priority. Details of such transactions are given inthe accompanying Financial Statements. The Company's policy on Related Party Transactionsis available at our website www.svendgaard.com. Details of Related Party Transactions aregiven in Annexure-7 i.e. in Form AOC-2.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining to conservation of energy technology absorption Foreignexchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished in Annexure8 and is attached to this report.
CORPORATE SOCIAL RESPONSIBILITY
The Provision of CSR as required by the Companies Act 2013 is not applicable to thecompany as the company does not meet the basic criteria of the applicability of therelevant provision. However your Company believes in making lasting impact towardscreating a just equitable humane and sustainable society. JHS is committed to conductbusiness with a strong environment conscience so as to ensure sustainable developmentsafe work places and enrichment of life of employees clients and the community.
MATERIAL CHANGES AND COMMITMENTS
1. JHS Completes Out of Court Settlement With Procter & Gamble
The on-going disputes at various courts between the company (JHS Svendgaard) andvarious group companies of Procter & Gamble Inc. in India have been settled withmutual consent and concluded positively for JHS on 18th
April 2017. The settlement clears contingent liabilities to the tune of H206.15 crorefrom the balance sheet of JHS.
JHS management further expects that the new expansion plan underway shall also beoperational soon and shall positively add to growth of the company in coming years.
2. Change in Capital Structure and Listing of Shares
Duringtheyear2015-16thecompanyhadallotted34974748 Fully Convertible Warrants to thepersons belonging to the promoter and non-promoter category on a Preferential basis at anissue price of H11/- per warrant in accordance with the provisions of the SEBI (ICDR)Regulations 2009 read with relevant provisions of Companies Act 2013. Equity sharesallotted pursuant to conversion of Fully Convertible Warrants during the financial year2015-16 are as follows:
1. 3280000 equity shares allotted on 05.01.2016 2. 10259748 equity shares allottedon 03.03.2016
During the year under review the company has issued and allotted 1860465 equityshares of face value of H10/- at a price per share of H43/- to HT Media Limited onpreferential basis which got listed on BSE & NSE on 06th April 2017 and 10th April2017 respectively.
As on 31.03.2017 total paid up share capital of the company is 441204650 pursuantto:
a) Conversion of 18164748 FCWs issued in financial year 2015-16 to promoter andnon-promoter group on Preferential basis; and
b) Allotment of 1860465 equity shares to HT Media Limited in the financial year2016-17.
DISCLOSURE ON DEPOSIT UNDER CHAPTER V
The Company has not accepted any deposits during the year under report nor did anydeposits remain unpaid or unclaimed at the end of the year.
As per Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company has formulated and published a Whistle Blower Policy toprovide Vigil Mechanism which is overseen by the Audit Committee for the genuine concernsexpressed by the employees and the Directors. The provisions of this policy are in linewith the provisions of the Section 177(9) of the Act. The said Policy provides adequatesafeguards against victimization of employees and Directors who express their concerns.The Company has also provided direct access to the chairman of the Audit Committee onreporting issues concerning the interests of employees and the Company. The policy asapproved by the Board is uploaded on the Company's website athttp://svendgaard.com/download/ invester/Vigil_Mechansim/VIGIL%20MECHANISM%20 POLICY.pdf
DISCLOSURE ON SEXUAL HARASSMENT OF WOMEN AT WORK PLACE _PREVENTION PROHIBITION &REDRESSAL_ ACT 2013
The Company has zero tolerance for sexual harassment at workplace. A policy has beenadopted in line with the Sexual harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 and the rules framed there under. During the year no complaintspertaining to sexual harassment were received.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERNS STATUS AND COMPANY'S OPERATIONS IN FUTURE
The Company has not received any significant or material orders passed by anyregulatory Authority Court or Tribunal which shall impact the going concern status andCompany`s operations in future.
The Company maintained healthy cordial and harmonious industrial relations at alllevels. The enthusiasm and unstinting e_orts of employees have enabled the Company toremain at the leadership position in the industry. It has taken various steps to improveproductivity across organization.
Your Directors take this opportunity to thank the customers shareholders suppliersbankers business partners/associates financial institutions and Central and StateGovernments for their consistent support and encouragement to the Company. I am sure youwill join our Directors in conveying our sincere appreciation to all employees of theCompany and its subsidiaries and associates for their hard work and commitment. Theirdedication and competence has ensured that the Company continues to be a significant andleading player in this industry.
| ||For and on behalf of the Board |
| ||Nikhil Nanda |
|Date : 23.05.2017 ||Managing Director |
|Place : New Delhi ||DIN: 00051501 |