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Jayant Agro Organics Ltd.

BSE: 524330 Sector: Industrials
BSE 00:00 | 12 Aug 213.40 0.85






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OPEN 210.75
52-Week high 310.20
52-Week low 187.00
P/E 8.52
Mkt Cap.(Rs cr) 640
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Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 210.75
CLOSE 212.55
52-Week high 310.20
52-Week low 187.00
P/E 8.52
Mkt Cap.(Rs cr) 640
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Jayant Agro Organics Ltd. (JAYAGROGN) - Director Report

Company director report

Dear Shareholders

Your Directors are pleased to present the Twenty-Ninth Annual Reportfor the financial year ended March 31 2021 along with the Audited Financial Statementsand the Auditor's Report thereon.

1. Financial Results:

(Rs in Lakhs)

Particulars Standalone Consolidated
2020-21 2019-20 2020-21 2019-20
Revenue from operations and other income 67777.74 84923.30 164021.89 251245.15
Profit / (Loss) before Depreciation & Amortisation Expenses Finance Costs and Share of Net Profits / (Loss) of Investments and Tax 5943.83 (2126.31) 9846.28 (716.14)
Less: Depreciation and Amortisation Expenses 928.65 916.82 1348.74 1351.20
Profit / (Loss) before Finance cost and Share of Net Profits / (Loss) of Investments and Tax 5015.18 (3043.13) 8497.53 (2067.34)
Less: Finance Cost 521.42 1357.32 1441.42 4047.21
Profit / (Loss) before Share of Net Profit/(Loss) of Investments and Tax 4493.76 (4400.45) 7056.12 (6114.55)
Add : Share in Profit and Loss of Joint Venture - - 38.08 49.56
Profit / (Loss) before Tax 4493.76 (4400.45) 7094.20 (6064.98)
Less: Provision for Tax 1133.64 (1834.54) 1830.15 (2620.02)
Profit / (Loss) for the year 3360.12 (2565.91) 5264.05 (3444.96)
Add / (Less) Other Comprehensive Income (OCI) 503.13 (966.35) 792.42 (1264.59)
Total Comprehensive Income / (Loss) for the year 3863.25 (3532.26) 6056.47 (4709.55)
Less: Total Comprehensive Income for the year attributable to Non-Controlling Interest - - 536.67 (303.13)
Total Comprehensive Income for the year attributable Owners of the Company - - 5519.80 (4406.42)
Add: Profit brought forward from the previous year including OCI 20437.29 24692.88 23332.56 28462.31
Profit available for appropriation which is appropriated as follows: 24300.54 21160.62 28852.36 24055.89
Final Dividend - 600.00 - 600.00
Dividend Distribution Tax - 123.33 - 123.33
Closing Balance including OCI 24300.54 20437.29 28852.36 23332.56
Earnings per share(EPS) (Face Value of shares 75/-) 11.20 (8.55) 16.00 (10.72)

2. Overview of Financial Performance:

The Annual Report also includes the Consolidated Financial Statementsof the Company which include the results of the Company's subsidiaries; viz. IhseduAgrochem Private Limited Ihsedu Itoh Green Chemicals Marketing Private Limited and IhseduCoreagri Services Private Limited and its Associate Company viz. Vithal Castor PolyolsPrivate Limited. The Standalone Financial results for the year show a Total Income of767777.74 Lakhs as compared to 784923.30 Lakhs and Standalone Net Profit / (Loss) aftertax of 73360.12 Lakhs as compared to 7(2565.91) Lakhs in the previous year and theConsolidated Financial results for the year show Total Income of 7164021.89 lakhs ascompared to 7251245.15 lakhs and Consolidated Net Profit / (Loss) after tax of 75264.05lakhs as compared to 7(3444.96) lakhs in the previous year.

3. Dividend & Reserves:

The Board of Directors are pleased to recommend dividend of 71/- pershare on the paid up equity share capital of the Company for consideration and approvalof the shareholders at the ensuing annual general meeting. The equity dividend outgo forthe Financial Year 2020-21 will be 7300.00 Lakhs.

Your Directors do not propose to transfer any amount to the GeneralReserve for the financial year ended March 31 2021.

Pursuant to SEBI Amendment dated May 5 2021 the company has formulatedDividend Distribution Policy.

4. Change in Nature of Business:

There were no material changes in the nature of business of the Companyduring the year under review.

5. Credit Rating:

The Credit Rating for FY 2020-21 of the Company for Long Term Debt andShort Term Debt is CRISIL BBB+/Stable and CRISIL A2 respectively rated by CRISIL Limited.The Company has also received Credit Rating from ICRA for its Long Term Debt and ShortTerm Debt as ICRA A- and ICRA A2+ respectively vide its letter dated May 9 2021.

6. State of Company's Affair:

In order to avoid duplication and for the sake of better understandingthe State of Company's Affairs is explained in detail in the section ManagementDiscussion and Analysis which has been i ncluded in this section of the Directors Report.

7. Listing of Shares:

The Company's equity shares are actively traded on BSE Limited (BSE)and the National Stock Exchange of India Limited (NSE). Further the applicable listingfees for the financial year 2021-22 has been paid to the respective Stock Exchange.

8. Scheme of Amalgamation:

On recommendation of Audit Committee and the Independent Directors theBoard of Directors at its Meeting held on July 312021 approved the draft Scheme ofMerger by Absorption between Jayant Finvest Limited ("Transferor Company") andJayant Agro-Organics Limited ("Transferee Company") and their respectiveshareholders and creditors under Sections 230 to 232 read with Section 66 and otherrelevant provisions of the Companies Act 2013 as may be applicable and Section 2(lB) andother relevant provisions of the Income Tax Act 1961.

The proposed Amalgamation will lead to consolidation of group entitiesby reduction in company layers which would help the Transferee Company to seize businessopportunities as and when they arise. It would also lead to simplification of theshareholding structure. Further the public shareholding in the Transferee Company shallnot be diluted and shall remain the same.

The said Scheme is subject to the necessary statutory and regulatoryapprovals including the approvals of Hon'ble National Company Law Tribunal theshareholders and creditors of each of the companies.

9. Management's Discussion and Analysis:

(a) Industry Structure and Developments and impact on the Company andits performance

The exports of castor oil which were at 547000 Metric Tons in 2019-20stood at 669000 Metric Tons in 2020

21. The estimate of the crop has decreased from about 1.96 million tonsin 2019-20 to about 1.75 million tons in 2020-21. With an estimated carry of over 400000Mt the supply position is expected to remain comfortable.

The petroleum prices have been witnessing a spike in the current year.The demand for some of the products competing with them are expected to improve. Yourcompany has been working to improve the competitiveness of the project by improving itsproduct and economizing on the costs. Your company has invested in an Indo-Japanese-KoreanJoint Venture Vithal Castor Polyols Pvt. Ltd. (VCP). VCP s products directly compete withpetroleum based polyols. These products have been facing challenges in capacityutilization resulting in a longer gestation period for the investment. Further thecompany is also realigning its product mix to adjust to the market conditions. The trendof firming petroleum prices is likely to improve the demand for its products. Theintroduction of new products should result in improving the long term prospects of theventure. The Financial highlights of the Company are as under

Particulars Standalone Consolidated
2020-21 2019-20 2019-20
Ratio Ratio Ratio Ratio
(i) Debtors Turnover 7.35 10.93 10.29 13.21
(ii) Inventory Turnover 6.92 4.91 8.94 8.21
(iii) Interest Coverage Ratio 9.62 -2.24 5.92 -0.50
(iv) Current Ratio 2.81 1.69 1.81 1.42
(v) Debt Equity Ratio 0.33 0.52 0.77 0.91
(vi) Operating Profit Margin (%) 7.42 -3.59 5.21 -0.80
(vii) Net Profit Margin (%) 4.97 -3.03 3.21 -1.37
(viii) Net Worth (In 7 Crores) 313 274 381 325

On outbreak of Covid-19 Pandemic and subsequent lockdown in country inthe initial period of 2020 the operations in most of our facilities were restricted. The

Company re-commenced its operations in a phased manner on advise /guidelines of Government / local authorities. The current situation of pandemic isunprecedented exceptional and changing dynamically. The Company on a continuous basisassesses the situation and its impact on the business. In view of the above and pursuantto provisions of SEBI (LODR) the current years ratios are not comparable with previewsyear.

(b) Opportunities & Threats

With more than 80% of your Company's production being exported thestate of the world economy the derailing of economic activity because of COVID -19 havean impact on the demand for your products. The duration and the intensity of the virus andthe multiple waves and different mutations are likely to determine the impact on theglobal economy in the near future and is also likely to impact your company.

Changes in technology leading to new products or uses being created orsubstitution or obsolescence of products due to scientific developments has an importantbearing on the demand for its products. Your company's products are competing with endproducts manufactured from crude oil and other vegetable oils. The price behavior ofcastor oil in relation to them is likely to have a bearing on the growth of the company.

Environment being a major concern the search for green products islikely to intensify in the future. Castor Oil being a natural organic renewable andbio-degradable product is gaining importance as a green product. With improved irrigationbetter quality inputs and scientific farming there is a substantial scope to improveyields per hectare of castor seeds. Besides due to its unique chemical structure it findsmyriad applications in virtually every industry be it agriculture lubricants paintsinks surface coatings pharmaceuticals food engineering plastics cosmeticsperfumeries electricals rubber and so on. Your company continues to endeavor to tapthese opportunities by focusing on Research & Development and investing in newcapacities new technologies new applications and new products.

Castor Seeds continue to be a volatile raw material in terms of itsprice and is prone to speculation. Being a shallow commodity speculation could lead toextraordinary swing in prices especially with the wider platform being provided by thelisting on National Commodity and Derivatives Exchange (NCDEX). SEBI is keeping a vigilantand watchful eye to ensure an orderly market. Being an agricultural product it depends onthe rainfall and weather conditions prevailing in the area of castor growing States in thecountry though it is a sturdy crop. The limited size of the crop makes it susceptible tospeculation and wild gyration in prices on both sides. The Company is evolving andexamining its risks matrix to respond to the price product and demand risks to mitigaterisks arising from these factors. The Company is also cultivating hybrid seeds to improvethe productivity of commercial Castor Seeds.

(c) Segment

The Company is organized into three business segments

- Castor Oil Derivatives and Power Generation.

(d) Outlook

The COVID -19 pandemic and the possibility of a third wave andrecurrence of the pandemic has put a cloud of uncertainty over the visibility of demandsupply and operational freedom of the company's units in the near term. The estimationsfor the pandemic to end vary from a few months to the year 2023. The vaccination drive isexpected to create a herd immunity resulting in near normalcy. The governments across theworld have adapted policies to control the economic damage caused by the pandemic byproviding liquidity and financial support to the weaker sections of the society. Thesepolicies have supported the economic activities and consequently the demand for thecompany's products. The continuation of these policies or their withdrawal and the impactof the continuation or changes on the economies is likely to have an impact on demand forthe company's products.

Under the current scenario barring unforeseen circumstances the shortterm outlook remains stable. The company is making efforts to ensure continuity ofoperations and cost controls and is confident of meeting all its obligations andmaintaining its operation in the green. The long term outlook remains positive.

Emphasis on green eco-friendly products is likely to lead to increasein innovation of new products and uses of castor oil by the chemical industry.

(e) Risks and Concerns

In the current situation the company expects barring unforeseencircumstances the demand for the company's product to improve. The company is adjusting inview of the volatile and uncertain demand and operational flexibility. However theCompany's products are used across geographies in a variety of industries thereby to agreat extent mitigating the long term risks associated with demand for its products on along-term basis.

The price behavior of raw material depends on the weather pattern inthe castor growing regions the impact of El Nino / La Nina on monsoon in these regionsglobal demand and inventory and prices of other oils including Crude Oil and thereforecan be volatile as well as unpredictable. The Company is closely watching the developmentof factors affecting the castor seed prices.

With the business of the Company growing steadily and demand fortrained and experienced manpower in excess of the supply the risk of managing the peopleis very big. The Company has to retain its existing trained workforce and also attract newtalent for its different operations. To improve the performance of the staff at work;various refresher training courses are organized to update their knowledge with the latesttechnologies and management ideas.

The demand for castor oil and its products is dependent on the overseasmarkets as more than 80% of the industries production is exported. The threat of newentrants and competition due to aggressive trading policies adopted by them continue to beof concern.

The Company has focused its efforts on marketing and introducing newproducts thereby mitigating to a certain extent the effect of recession / slowdown in theindustry.

Unrestricted speculation and high volatility due to trading incommodity exchange could have a negative effect on the growth of the industry

Your Company has been engaged in several legal cases in connection withor incidental to its business operations. These include service excise and customs casesetc. filed by and against the Company. These cases are being pursued with due importanceand in consultation with legal experts in the respective areas. Your Board believes thatthe outcome of these cases is unlikely to cause a material adverse effect on the company'sprofitability or business performance.

Your Company has a contingent liability of 73.09 crores as on March 312021. Attention of the shareholders is drawn to the explanations mentioned in note no. 33of the Notes to Financial statements forming integral part of the balance sheet as onMarch 31 2021. In view of the present status and based on legal advice received yourBoard of Directors are of the opinion that no provision is required to be made againstthese contingent liabilities as of now.

(f) Forward Looking Statement

This report contains forward looking statements that are based on ourcurrent expectations assumptions estimates and projections. We have tried whereverpossible to identify such statements by using words such as anticipates estimatesexpects plans believes and words of similar substance in connection with any discussionof future performance. Stakeholders are urged to pay careful attention to the risk factorsdescribed in this report. One or more of these risks could have an adverse effect on theCompany or its group Companies activities conditions financial results. Furthermoreother risks notyet identified or considered as not material by the group could have thesame adverse effect. All the forward looking statement included in this report are basedon information available to us on the date of issue of this report. The Company do notundertake to update the said statements to reflect the future events or circumstancesunless required under the statue.

10. Material changes and commitments affecting the financial positionof the company which have occurred between the end of the financial year of the company towhich the financial statements relate and the date of the report The COVID-19 pandemic hasseverely disrupted business operations due to nation-wide lockdown and other emergencymeasures imposed by the authorities. The operations of the Company were impacted due toshutdown of plants and offices following the nation-wide lockdown. The Company continueswith its operations in a phased manner in line with the directives issued by authorities.

The Company has evaluated the impact of this pandemic on its businessoperations liquidity and financial position and based on management's review of currentindicators and economic conditions there is no material impact on its financial resultsas on March 31 2021. However the impact assessment of COVID-19 is a continuing processgiven the uncertainties associated with its nature & duration and accordingly theimpact may be different from that estimated as at the date of approval of the AuditedFinancial Statements for the financial year ended March 31 2021. The Company willcontinue to monitor any material changes to future economic conditions.

11. Highlights of the Performance / Financial Position of each ofsubsidiaries / associates / joint venture companies as included in the consolidatedfinancial statements.

The Company (including its subsidiaries and associates) operates inthree segments:

1. Consolidated Results:

The consolidated turnover of the Company has been

Rs 164021.89 lakhs as against Rs 251245.1 5 Lakhs in the previousyear. The EBDITA was Rs 79884.36 lakhs current year as against 7(666.57) lakhs in theprevious year.

2. Derivatives:

The turnover of the derivatives has been 765206.79 Lakhs as against780152.36 Lakhs in the previous year.

The EBDITA has increased to 75656.84 lakhs as against 7(2466.79)lakhs in the previous year.

3. Castor Oil:

The operation of castor oil are mainly carried out in Ihsedu AgrochemPvt. Ltd and have been discussed thereunder.

4. Power:

The company has installed wind turbines of 2.4 MW and 0.8 MW in JayantAgro-Organics Ltd and Ihsedu Agrochem Pvt. Ltd. respectively.

The performance of the power segment has been steady with the EBIDTA at159.28 Lakhs

Your directors are pleased to announce that nearly 50% of theelectricity at its Ranoli unit and close to 10% of its power requirement at its crushingplant in Jagana Palanpur is met by green energy produced from the wind mills.

We would also like to state that almost 100% of the steam requirementis met by using Company's own product De-oiled Cake making your company environmentfriendly manufacturer of environmentally friendly products.

Subsidiary Companies Ihsedu Agrochem Pvt Ltd (IAPL)

During the year under review IAPL a material subsidiary of the Companyachieved a turnover of 7107391.79 lakhs as compared to 7181462.72 lakhs in theprevious year. The profit after tax stood at 71842.45 lakhs as against Loss of 7944.10lakhs in the previous year.

Ihsedu Coreagri Services Pvt Ltd (ICAS).

During the year under review ICAS a wholly-owned subsidiary of theCompany had profit of 70.12 Lakhs as against profit of 70.37 lakhs in the previous year.

Ihsedu Itoh Green Chemicals Marketing Pvt. Ltd (IIGCM)

During the year under review IIGCM achieved a total revenue of 729.97lakhs as compared to 726.81 lakhs in the previous year. The profit after tax was 714.66lakhs against profit after tax of 715.53 lakhs in the previous year.

JACACO Private Limited (JACACO)

Your Company has incorporated a wholly-owned subsidiary viz. JACACOPrivate Limited on June 21 2021. It is a consumer product company and will focus ontapping new Business opportunities by creating new Product Portfolio.

Jayant Speciality Products Private Limited (JSPPL)

Your Company has incorporated a wholly-owned subsidiary viz. JayantSpeciality Products Private Limited on June 28 2021. JSPPL will focus on Manufacturing ofSpeciality Chemicals at Project that is being set up in the State of Gujarat

Associate Company

Vithal Castor Polyols Pvt Ltd (VCP):

VCP is an Indo - Japanese - Korean Joint Venture Company and yourcompany owns 50% equity shares. VCP" s products directly compete with petroleum basedpolyols which will result in a longer gestation period for the investment. During the yearunder review VCP achieved a turnover of 72375.74 lakhs as compared to 72295.88 lakhs inthe previous year. The Profit after tax stood at 778.97 lakhs as against profit of 795.09lakhs in the previous year.

The Policy on material subsidiary is available on audited accounts of the subsidiary companies are placed on the Company's website andare available for inspection by any member and may write to the Company Secretary for thesame.

In accordance with Section 129(3) of the Companies Act 2013 ("theAct") the Company has prepared consolidated financial statements of the Company andall its subsidiary and associate companies which forms part of the Annual Report. Astatement containing salient features of the financial statements and other necessaryinformation of the subsidiary companies in the format prescribed under Form AOC-1 isappended as Annexure I to this Report.

In accordance with third proviso of Section 136(1) of the Act theAnnual Report of the Company containing therein its standalone and the consolidatedfinancial statements has been placed on the website of the Company at as per the fourth proviso of the said Section Financial Statements of each ofthe subsidiary companies have also been placed on the website of the Company Accordingly the said documents are not being attached to the AnnualReport. Shareholders interested in obtaining a copy of the Audited Annual FinancialStatements of the subsidiary companies may write to the Company Secretary

As stipulated in the provisions of the Act and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 ["SEBI (LODR)"] theconsolidated financial statements have been prepared by the Company in accordance with theapplicable Accounting Standards.

Research and Development (R & D):

The R & D continues its focus on development of new applicationsprocesses and products based on castor oil.

The emphasis has been to replace some of the Petroleum derived productswith Green Bio-based alternatives. The processes are developed so as to improve or atleast maintain the Environment. Also some of the products have been developed from variousco- or by-products generated while making the principal products and have received goodresponse from the customers while adding value to such co- or by-products. All of thesedevelopments indirectly benefit the farmers as demand for the castor seeds grown on theirfarms increases and also the growing of castor plants facilitates Carbon dioxide reductionby its absorption. The R & D keeps updating the methods instruments & humanresources to stay abreast with the progress in various areas of chemistry analyticalmethods catalysis etc.

13. Details in respect of adequacy of internal financial controls withreference to the Financial Statements:

The Company has an Internal Control System commensurate with the sizescale and complexity of its operations. The management monitors and evaluates the efficacyand adequacy of internal control system in the Company its compliance with operatingsystems accounting procedures and policies at all locations of the Company. Periodicalreports on the same are presented to the Audit Committee.

14. Deposits:

The Company has not accepted any deposit from the public falling withinthe ambit of Section 73 of the Act and the Companies (Acceptance of Deposits) Rules 2014and therefore no amount of principal or interest on deposit was outstanding as on theBalance Sheet date.

15. Particulars of loans guarantees or investments under section 186:

Particulars of loans given investments made guarantees given andsecurities provided by the Company as on March 31 2021 are given in the notes formingpart of the financial statement.

16. Particulars of contracts or arrangements with related parties:

All Related Party Transactions that were entered into during thefinancial year were on arm's length basis and in ordinary course of business. There are nomaterially significant related party transactions made by the Company during the year. Allthe Related Party Transactions are presented before the Audit Committee and also the Boardfor approval. A policy on Related Party Transactions is uploaded on the Company's websiteand can be accessed through the weblink

Prior Omnibus approvals are granted by the Audit Committee for relatedparty transactions which are of repetitive nature entered in ordinary course of businessand are at arm's length basis in accordance with the provisions of the Act read with therules made thereunder and the Listing Regulations.

The particulars of Contracts and Arrangement with related partiesreferred to in Section 188(1) of the Act as prescribed in Form AOC-2 is not applicable.

17. Key Managerial Personnel and Directors:

a) Changes in Directors and Key Managerial Personnel("KMP"):

Key Managerial Personnel

In accordance with the provisions of section 203 of the

Act the following are the Key Managerial Persons (KMP) of the Company:

Name of KMP's Designation
Mr. Abhay V. Udeshi Chairman & Whole Time Director
Mr. Hemant V. Udeshi Managing Director
Name of KMP's Designation
Dr. Subhash V. Udeshi Whole - Time Director
Mr. Varun A. Udeshi Whole - Time Director
Mr. Vikram V. Udeshi Chief Financial Officer
Mr. Dinesh M. Kapadia Company Secretary

As per the provisions of the Act Dr. Subhash V. Udeshi retires byrotation at the ensuing Annual General Meeting and being eligible offers himself forreappointment. The Nomination and Remuneration Committee and the Board recommends hisreappointment Mr. Abhay V. Udeshi Chairman and Whole-time Director Mr. Hemant V. UdeshiManaging Director Dr. Subhash V. Udeshi Whole-time Director and Mr. Varun A. UdeshiWhole-time Director were re-appointed by Nomination & Remuneration Committee and Boardof Directors of the Company at their meeting held on February 8 2020 duly approved bythe shareholders through Postal Ballot for a tenure of 3 years commencing from April 12019 up to March 312022 on terms and conditions as agreed between them and Board ofDirectors.

In terms of the provisions of Sections 196197 198 203 read withSchedule IV and any other applicable provisions of the Act Nomination and RemunerationCommittee and the Board of Directors at their meeting held on May 15 2021 recommended thereappointment of Mr. Abhay V. Udeshi as Chairman and Whole-time Director Mr. Hemant V.Udeshi as Managing Director Dr. Subhash V. Udeshi as Whole-time Director and Mr. Varun A.Udeshi as Whole-time Director for a further tenure of five (5) consecutive yearscommencing from April 1 2022 up to March 31 2027 on terms and conditions as agreedbetween them and Board of Directors subject to the approval of shareholders at theensuing 29th AGM.

Cessation / Appointment of Independent Director Mr. Jayasinh V.Mariwala Independent Director of the Company has tendered his resignation from the Boardwith effect from end of business hours of May 15 2021 on account of advanced age. TheBoard of Directors placed on record its deep appreciation for the invaluable contributionmade by Mr. Jayasinh V. Mariwala in growth and Corporate Governance of the Company. TheBoard further wished for his good health and success in all his future endeavours.

Further on recommendation of Nomination and Remuneration Committeethe Board of Directors approved appointment of Mr. Sanjay J. Mariwala (DIN: 01111537) asan "Additional Director (Non-Executive Independent) of the Company with effect fromJune 30 2021 to hold office upto the conclusion of the ensuing AGM. The appointment ofMr. Mariwala as Non-Executive Independent Director is subject to approval of theShareholders of the Company at the ensuing 29th AGM.

b) Declaration of Independence

The Company has received declarations from all the IndependentDirectors of the Company confirming that they meet the criteria of independence asprescribed under Section 149 of the Act and rules made there under and Regulation 16 andother applicable regulations if any of the SEBI (LODR) as amended.

Further the Independent Directors have also submitted theirdeclaration in compliance with the provision of Rule 6(3) of Companies (Appointment andQualification of Directors) Rules 2014 as amended which mandated the inclusion ofIndependent Director's name in the data bank of persons offering to become IndependentDirector of Indian Institute of Corporate Affairs ("IICA") for a period of oneyear or five years or life time or as the case may be till they continues to hold theoffice of an independent director.

In the opinion of the Board all the Independent Directors are personsof possessing attributes of integrity expertise and experience (including theproficiency) as required under the applicable laws rules and regulations.

c) Board Evaluation

Pursuant to the provisions of the Act read with the rules madethereunder Regulation 17(10) of the SEBI (LODR) and the Circular issued by SEBI theevaluation of the Annual Performance of the Directors Board Committees was carried outfor the FY 2020-21.

The details of the evaluation process are set out in the CorporateGovernance Report which forms a part of this report.

d) Policy on Directors' Appointment and Remuneration

The Company has devised a Policy of remuneration for the DirectorsKMPs and other employees. The policy also includes performance evaluation of the Boardwhich includes criteria for performance evaluation of the Independent DirectorsNon-Executive Directors and Executive Directors. Policy is also displayed on the Company'swebsite under the weblink Salient features of Nomination andRemuneration Policy is appended as Annexure II to this Report.

e) Familiarisation Program

The details of programs for familiarisation of Directors with theCompany are put up on the website of the


f) Number of meetings of the Board of Directors During the year theBoard of Directors met four (4) times. The said meetings were conducted through VideoConference in compliance with applicable circulars notifications rules issued under theAct and SEBI (LODR). The details of the Board Meeting are provided in the CorporateGovernance report forming part of this report.

18. Board Committees:

i) Audit Committee

As on March 31 2021 the Audit Committee of the Company comprises of 5Directors 4 of which are Independent Directors. All members of Audit Committee arefinancially literate. The members of the Audit Committee are as under;

Mr. Jayasinh V. Mariwala - Chairman
Mr. Vijaykumar Bhandari - Member
Mr. Deepak V. Bhimani - Member
Mr. Mukesh C. Khagram - Member
Mr. Abhay V. Udeshi - Member

All the recommendations made by the Audit Committee were accepted bythe Board.

ii) Stakeholder's Relationship Committee

The Stakeholder's Relationship Committee of the Company comprises of 4Directors namely;

Mrs. Sucheta N. Shah - Chairperson
Mr. Abhay V. Udeshi - Member
Mr. Hemant V. Udeshi - Member
Dr. Subhash V. Udeshi - Member

iii) Nomination and Remuneration Committee

The Nomination and Remuneration Committee of the Company comprises of 3Directors; all are Independent Directors.

Mr. Jayasinh V. Mariwala - Chairman
Mr. Deepak V. Bhimani - Member
Mr. Mukesh C. Khagram - Member

A detailed write up of the above committees is mentioned in theCorporate Governance section of this report.

iv) Risk Management

- Risk Management Committee

Pursuant to SEBI (Listing Obligations and Disclosure Requirements)(Second Amendment) Regulations 2021 (notification dated May 5 2021) the Board ofDirectors on June 30 2021 approved constitution of Risk Management Comittee and the sameconsists of following Members:

Mr. Sanjay J. Mariwala - Chairman
Mr. Abhay V. Udeshi - Member
Mr. Vikram V. Udeshi - Member

- Risk Management Policy:

The Company has a robust Risk Management framework to identifyevaluate business risks and opportunities. This framework seeks to create transparencyminimize adverse impact on the business objectives and enhance the Company's competitiveadvantage. Further pursuant to SEBI amendment dated May 5 2021 the Board of Directorshave constituted a Risk Management Committee and policy.

19. Corporate Social Responsibility ("CSR"):

- CSR Committee

The CSR Committee of the Company comprises of the following members:

Mr. Deepak V. Bhimani Chairman
Mr. Abhay V. Udeshi Member
Mr. Hemant V. Udeshi Member

- CSR Policy

The Board of Directors based on the recommendations of the Committeeformulated a CSR Policy encompassing the Company's philosophy for describing itsresponsibility as a corporate citizen laying down the guidelines and mechanisms forundertaking socially relevant programmes for welfare and sustainable development of thecommunity at large. CSR Policy is available on web link

- CSR spent during the Financial Year 2020-21

The amount required to be spent on CSR activities during the year underreview in accordance with the provisions of Section 135 of the Act was Rs0.61 crore andthe Company had spent Rs0.71 crore during the current financial year. The Company alongwith its subsidiary spent approx Rs1.02 Crores towards CSR initiative mainly focusingtowards community development. Ministry of Corporate Affairs vide its Notification(s)dated 22nd January 2021 notified the Companies (Corporate SocialResponsibility Policy) Amendment Rules 2021 which inter alia provides for the revisedformat of annual report for publishing the CSR activities undertaken during the financialyear ended March 31 2021. The other changes pursuant to said Notification(s) under theCSR provisions have been briefly highlighted in the annual report of the Company's CSRactivities for the financial year ended March 31 2021.The requisite details on CSRactivities for the current year are annexed as Annexure III.

20. Auditors:

i) Statutory Auditors

At the 25th Annual General Meeting held on August 9 2017M/s. Vatsaraj & Co. Chartered Accountants Mumbai (Firm's Registration no. 1 1 1327W) were appointed as Statutory Auditors of the Company to hold office from theconclusion of the 25th Annual General Meeting until the conclusion of the 30thAnnual General Meeting to be held in year 2022. Consequent to an amendment to CompaniesAct 2013 ratification of Statutory Auditor's appointment is not required at every AnnualGeneral Meeting.

The Company has received written consent and a certificate from M/s.Vatsaraj & Co. Chartered Accountants Mumbai (Firm's Registration no. 111327W) thatthey satisfy the criteria provided under Section 141 of the Act and that the appointmentis in accordance with the applicable provisions of the Act and rules framed thereunder andare not disqualified from continuing as Statutory Auditor of the Company.

Auditors Report:

The Report given by M/s. Vatsaraj & Co. Statutory Auditors on thefinancial statement of the Company for the year 2020-21 is part of the Annual Report.There has been no qualification reservation or adverse remark or disclaimer in theirReport.

ii) Cost Auditor

As per the requirements of Section 148 of the Act read with TheCompanies (Cost Records and Audit) Rules 2014

as amended the Audit of the Cost Accounts relating to Chemicalproducts is being carried out every year. The Board of Directors have based on therecommendation of the Audit Committee appointed M/s. Kishore Bhatia & Associates (FRN00294) Cost Accountants Mumbai to audit the cost accounts of the Company for thefinancial year 2021-22 from April 1 2021 to March 312022 on a remuneration as may befixed by the Board in consultation with Cost Auditor. As required under the Act necessaryresolution seeking member's ratification for the remuneration payable to M/s. KishoreBhatia & Associates is included in the Notice convening the 29th AnnualGeneral Meeting. The Cost Audit Report in respect of Financial Year 2020-21 will be filedwithin the due date. Cost Audit Report for the Financial Year 2019-20 was filed within theprescribed time limit.

iii) Internal Auditor

Pursuant to the provisions of section 138 of the Act read with therules made thereunder M/s. T.P. Ostwal & Associates LLP Mumbai (ICAI RegistrationNo. 124444W / W100150) Chartered Accountants conducted the Internal Audit of the Companyfor the financial year 2020

21. The Audit Committee at its meeting held on May 15 2021 recommendedto the Board the appointment of M/s. T.P. Ostwal & Associates LLP CharteredAccountants as the Internal Auditor of the Company for financial year 2021-22. The saidproposal for appointment of M/s. T P Ostwal & Associates LLP as the Internal Auditorof the Company was approved by the Board of Directors at its meeting held on the same day.

iv) Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act read with rulesmade thereunder and SEBI (LODR) Regulation 2015 The Board had appointed M/s. V. V.Chakradeo & Co. Company Secretaries (C.P. No. 1705) to conduct Secretarial Audit ofthe Company and its material subsidiary for the financial year ended March 312021.Further the Company is also required to obtain Secretarial Compliance Report fromPractising Company Secretary to certify the compliance of provisions of all theregulations of the SEBI (LODR).

Accordingly the Secretarial Audit Report of the Company and itsmaterial subsidiary Company Ihsedu Agrochem Private Limited along with the SecretarialCompliance Report of the Company for the financial year ended March 31 2021 was issuedby M/s. V. V. Chakradeo & Co. Company Secretaries and the same forms part of thisreport and is appended as Annexure IV.

For FY 2020-21 the Company has adhered to the applicable SecretarialStandards i.e. SS-1 and SS-2 relating to 'Meetings of the Board of Directors' and'General Meetings' respectively.

The Secretarial Audit Report does not contain any qualificationreservation or adverse remark.

21. Reporting of Frauds by Auditors:

During the year under review the Statutory Auditors Cost Auditors andSecretarial Auditor have not reported any instances of frauds committed in the Company byits Officers or Employees to the Audit Committee under section 143(12) of the Act detailsof which needs to be mentioned in this Report.

22. Annual Return:

The Annual Return of the Company as on March 31 2021 in Form MGT - 7in accordance with Section 92(3) of the Act read with the Companies (Management andAdministration) Rules 2014 is available on the website of the Company

23. Conservation of Energy Technology Absorption Foreign ExchangeEarnings and Outgo:

The particulars of the conservation of energy technology absorptionforeign exchange earnings and outgo as required to be disclosed under the Act isappended as Annexure V to this Report.

24. Details of establishment of Vigil Mechanism for directors andemployees:

Pursuant to the provisions of section 177(9) & (10) of the Act andas required under SEBI (LODR) the Company has established a vigil mechanism for directorsand employees to report genuine concerns. The details of the Whistle Blower Policy areavailable in the Corporate Governance report annexed to this report. The Whistle BlowerPolicy is also uploaded on the website of the Company.

25. Particulars of Employees

The Company has 372 Employees as on March 31 2021. In accordance withthe provisions of Section 197(12) of the Act read with rules made thereunder a statementcontaining the disclosures pertaining to remuneration and other details as required underthe Act and the above Rules are provided in the Annual Report. The disclosures asspecified under Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 have been appended to this Report as Annexure VI.

As per the provisions of Section 136(1) of the Act the reports andaccounts are being sent to all the Members of the Company. Details as required pursuant toRule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as amended are available for inspection by any Member and may writeto the Company Secretary for the same up to the date of the 29th AGM. AnyMember interested in obtaining such information may write to the Company Secretary and the same will be furnished on such request.

26. Corporate Governance Report:

As per Regulation 34 read with Schedule V of SEBI (LODR) a separatesection on Corporate Governance practices followed by the Company together with aCertificate from Company's Statutory Auditor M/s. Vatsaraj & Co. CharteredAccountants Mumbai and Certificate from Practising Company Secretary M/s. V V. Chakradeo& Co. confirming compliance forms an integral part of this report.

27. Business Responsibility Report:

As per Regulation 34 read with Schedule V of SEBI (LODR) BusinessResponsibility Report describing the initiatives taken by the Company from EnvironmentalSocial and Governance perspective forms an integral part of this report.

28. Directors' Responsibility Statement:

Based on the framework of Internal Financial Controls and compliancesystems established and maintained by the Company the work performed by the InternalStatutory Cost and Secretarial Auditors including Audit of Internal Financial Controlsover financial reporting by the Statutory Auditors and the reviews performed by Managementand the relevant Board Committees including the Audit Committee the Board is of theopinion that the Company's Internal Financial Controls were adequate and effective duringthe reporting period.

Accordingly pursuant to Section 134(3)(c) and 134(5) of the Act theBoard of Directors to the best of their knowledge and ability confirm that:

(a) In the preparation of the annual accounts for the financial yearended March 31 2021 the applicable accounting standards have been followed along withproper explanation relating to material departures;

(b) The Directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the company as on March 31 2021and of the profit of the company for the year ended on that date;

(c) The Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the company and for preventing and detecting fraud andother irregularities;

(d) The Directors have prepared the annual accounts on a going concernbasis;

(e) The Directors had laid down internal financial controls (asrequired by explanation to section 134 (5)(e) of the Act) be followed by the company andthat such internal financial controls are adequate and are operating effectively; and

(f) The Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.

29. Details of significant and material orders passed by the regulatorsor courts or tribunals impacting the going concern status and company's operations infuture:

As on date of this report there has been no significant and materialorders passed by the regulators or courts or tribunals impacting the going concern statusand company's operations in future.

30. Transfer of Unpaid/Unclaimed Dividend Amounts to IEPF:

As on date of this report and pursuant to provision of Section 124 and125 of the Act the unclaimed / unpaid Equity Share Dividend for F Y 2012-13 amounting toRs251271/- and for FY 2013-14 (interim) amounting to Rs 269848/- which remainedunclaimed for the period of seven years has been transferred by the Company to theInvestor Education and Protection Fund (IEPF) established by the Central Government.Details of Investor Education and Protection Fund provided on Company's website under theweblink

31. Transfer of Shares to Investor Education and Protection Fund:

In Accordance with the Investor Education and Protection Fund (IEPF)Authority (Accounting Audit Transfer and Refund) Rules 2016 as amended as on date ofthis report the Company had transferred 13578 equity shares of face value of T5 eachfully paid up to Investor Education and Protection Fund Account in respect of whichdividend remained unclaimed/ unpaid for a period of seven consecutive years.

32. Unclaimed Dividend:

The Company is required to transfer the amount of dividend remainingunclaimed for a period of seven years from the date of transfer to the unpaid dividedaccount to the Investor Education and Protection Fund (IEPF). The shareholders arerequested to claim the dividend from the Company before transfer to IEPF. The unclaimeddividend amount as on March 31 2021 are as under:-

Year Dividend Type Amount (Rs in Lakhs) Due date for transfer to Investor Education & Protection Fund.
2013-2014 Equity (Interim) 2.70 15.04.2021 (transferred to IEPF)
2013-2014 Equity (Final) 0.57 02.1 1.2021
2014-2015 Equity 1.17 30.10.2022
2015-2016 Equity 4.68 26-10-2023
2016-2017 Equity (1st Interim) 1.54 29-08-2023
2016-2017 Equity (2nd Interim) 1.43 24-1 1-2023
2016-2017 Equity (3rd Interim) 5.69 12-03-2024
2016-2017 Equity (Final) 1.69 14-09-2024
2017-2018 Equity (1st Interim) 2.01 03-12-2024
2017-2018 Equity (Final) 3.47 02-09-2025
2018-2019 Equity 4.47 01-09-2026
Total 29.42

33. Industrial Relations:

The Relations between the Employees and the Management have remainedcordial during the year.

34. Environment Health and Safety:

Your Company has declared the Environment Health and Safety days andcontinued their commitments towards Environment Health and Safety. The Committee formedfor the purpose of Environment Health and Safety have continued to educate and motivatethe employees on various aspects Environment Health and Safety through training programand seminars.

During the year following safety program were held on the datesmentioned therein.

- Fire Safety week: 14th April - 20th April

- Safety week: 4th March - 10th March

- Environment Day: 5th June

The Company is a member of Effluent Channel Projects for disposal ofEffluent Water and also of Nandesari Environment Control Ltd. for disposal of solidwaste. The Company is continuously monitoring its waste to ensure adherence to pollutioncontrol norms. The Factories are ISO 45001:2018 certified.

35. Insurance:

The properties and insurable interest of your Company like BuildingPlant and Machinery Stocks etc. are properly insured.

36. Disclosures under Prevention of Workplace Harassment

The Company has in place a Code on Prevention of Sexual HarassmentPolicy in line with the requirements of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013. The Company has set up an InternalComplaints Committee to redress complaints. Your Directors further state that during theyear under review there were no cases filed pursuant to the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013.

37. Other Disclosures:

• None of the Directors of the Company have resigned during theyear under review. However Mr. Jayasinh V. Mariwala tendered his resignation on accountof advanced age with effect from closing business hours of May 15 2021;

• The Company has not issued equity shares with differentialrights as to dividend voting or otherwise;

• There was no revision of financial statements of the companyduring the year under review.

• The Company has not issued any sweat equity shares to itsdirectors or employees

• No application has been made under the Insolvency and BankruptcyCode; hence the requirement to disclose the details of application made or any proceedingpending under the Insolvency and Bankruptcy Code 2016 (31 of 2016) during the yearalongwith their status as at the end of the financial year is not applicable; and

• The requirement to disclose the details of difference betweenamount of the valuation done at the time of onetime settlement and the valuation donewhile taking loan from the Banks or Financial Institutions along with the reasons thereofis not applicable.

39. Acknowledgement:

Your Directors wish to place on record their sincere appreciation forthe whole hearted support extended by the Bankers Authorities of Government such asMinistry of Commerce and State Government of Gujarat Gujarat State Electricity BoardGujarat Pollution Control Board Gujarat Industrial Development Corporation GujaratAlkalies & Chemicals Ltd. and Ranoli & Dhanora Panchayat. Also we would like tothank our employees for their hard work and shareholders for their continued faith andsupport.

For and on behalf of the Board of Directors
Place: Mumbai Abhay V. Udeshi
Date: July 31 2021 Chairman