Your Directors have pleasure to present 15th Annual Report on the business andoperations of the Company together with the audited financial statements (standalone andconsolidated) for the year ended 31st March 2019.
|FINANCIAL REVIEW/RESULTS || || || ||(Rs. in lakhs) |
|Particulars ||Standalone ||Consolidated |
| ||31.03.2019 ||31.03.2018 ||31.03.2019 ||31.03.2018 |
|Net sales / Income from Operation ||11966.08 ||14073.16 ||12411.29 ||14264.19 |
|Other Income ||577.59 ||494.78 ||666.49 ||498.06 |
|Interest & Finance Charges ||99.83 ||73.65 ||103.37 ||73.75 |
|Depreciation ||698.11 ||680.64 ||708.78 ||681.32 |
|Profit /(Loss ) before Tax ||521.88 ||4109.65 ||(204.50) ||3842.36 |
|Tax Expense: || || || || |
|Current tax (provision for tax) ||129.21 ||198.23 ||129.21 ||198.23 |
|Deferred tax asset ||32.49 ||1096.54 ||(166.98) ||1028.83 |
|Tax for earlier years ||- ||9.85 ||- ||9.85 |
|Total Tax Expense ||161.70 ||1304.62 ||(37.77) ||1236.91 |
|Profit /(Loss ) after Tax ||360.18 ||2805.04 ||(159.71) ||2607.00 |
|Profit /(Loss ) to be carried to the Balance Sheet ||365.60 ||2806.61 ||(159.71) ||2607.00 |
|Paid up Equity Share Capital ( Face Value of C10/- each ) ||6090.04 ||6090.04 ||6090.04 ||6090.04 |
|Reserve excluding revaluation reserve || || ||11594.48 ||11336.47 |
|Basic EPS ( in Rupees not annualized ) Excluding extra ordinary items ||0.59 ||4.96 ||(0.11) ||4.61 |
|Diluted EPS ( in Rupees not annualized) Excluding extra ordinary items ||0.59 ||4.96 ||(0.11) ||4.27 |
REVIEW OF OPERATIONS/STATEMENT OF AFFAIRS
Company was successful to achieve its target fixed at the beginning of the financialyear and generated the revenue from operations during the financial year ended 31st March2019 amounted to INR 11966.08 Lakhs as compared to INR 14073.16 Lakhs during the previousyear ended 31.03.2018. The Turnover of the company has decreased by 14.98% in comparisonto previous year.
The company is expanding its business and requires surplus to be ploughed back in thecompany. Hence your directors are constraint to declare any dividend. During year underreview (Financial Year 2018-19) the Board of Directors has not recommended any dividend.
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 2018-19 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 2018-19 upon receipt of writtenrequest from you as a member of the Company. Full version of the Annual Report 2018-19containing 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 2018-19 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 CompanyRs. s website at www.svendgaard.com.
CONSOLIDATED FINANCIAL STATEMENTS
In compliance with the applicable provisions of Companies Act 2013 including theIndian Accounting Standard Ind AS-110 on Consolidated Financial Statements this AnnualReport also includes Consolidated Financial Statements for the financial year 2018- 19.Consolidated Turnover was C12411.29 Lakhs as against C14264.19 lakhs in the previousyear. Net Profit after Tax for the year stood at C (159.71) lakhs against C2607.02 Lakhsin the previous year.
OPERATIONS AND BUSINESS PERFORMANCE
Kindly refer to the integrated reporting and Management Discussion & Analysis andCorporate Governance Report which forms part of this report.
JHS believes in adopting the best practices of Corporate Governance CorporateGovernance Principals are enshrined in the spirit of JHS which form the core values ofJHS. These guiding principles are also articulated through the company's code of businessconduct corporate governance guidelines character of various subcommittees anddisclosure policy.
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 term stakeholdervalue without compromising on ethical standards and corporate social responsibilities.
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 CompanyRs. 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. Ajay Bansal Chief Financial Officer(CFO) of the company was ceased his Office onaccount of resignation with e3ect from 01.06.2018 in his Place Mr. Ashish Goel wasappointed as new CFO w.e.f 14th Aug 2018.
Mrs. Balbir Verma was appointed as an additional director to the Office of anIndependent Women Director w.e.f. 17.09.2018 appointment of her as the regular directoris due at the ensuring Annual General Meeting of the Company.
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 officer them for re-appointment at every AGM. ConsequentlyMr. Vanamali Polavaram Non-Executive Director will retire by rotation at the ensuing AGMand being eligible officers himself for re-appointment in accordance with the provisionsof 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. Ashish Goel ||- ||Chief Financial Officer |
|Mr. Paramvir Singh Pabla ||- ||Chief Executive Officer |
|*Mr. Sanjeev Kumar Singh ||- ||Company Secretary & |
| || ||Compliance Officer |
*Mr. Sanjeev Kumar Singh has resigned as Company Secretary from JHS SvendgaardLaboratories Limited on 07th June 2019.
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 an integral part of this report. The information showing names and other particularsof employees as per Rule 5(2) and 5(3) of the aforesaid Rules forms part of this report.However as per first proviso to Section 136(1) of the Act the Annual Report 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 four committees: the Audit Committee the Nomination &Remuneration Committee the Stakeholders Relationship Committee the Corporate SocialResponsibility 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 five Board meetings five Audit Committee meetings fourStakeholders Relationship Committee meetings two Nomination & Remuneration Committeemeetings and one independent directors meeting were convened and held. Details andattendance of such Board & Committees meetings are provided in Corporate GovernanceReport Annexed herewith and forming integral part of this report.
DECLARATION OF INDEPENDENCE BY DIRECTORS
Pursuant to the provisions of Sub-Section (6) of Section 149 of the Companies Act2013 the Company is in receipt of the Declaration given by each Independent Directorsmeeting the criteria of Independence as provided is received and taken on record.
PERFORMANCE EVALUATION OF THE BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS
Pursuant to applicable provisions of the Companies Act 2013 read with the 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 BoardRs. 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 a separate meeting held on February 12 2019. NoDirectors other than Independent Directors had attended this meeting. IndependentDirectors discussed inter-alia the performance of Non-Independent Directors and Board as awhole and the performance of the Chairman of the Company after taking into considerationthe 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 a3airs 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
Pursuant to the provisions of section 139 of the Companies Act 2013 M/s S. N. Dhawan& Co. Chartered Accountants (Firm Regn. No. 00050N) were appointed as StatutoryAuditors of the Company for a term of five consecutive years to hold Office from theconclusion of the 11th Annual General Meeting held on 1st September 2015 till theconclusion of 16th Annual General Meeting to be held in Calendar year 2020. Pursuant tothe provisions of Section 139 to 141 of the Companies Act Company has received acertificate from M/s S. N. Dhawan & Co. Chartered Accountants to the e3ect that theirre-appointment if made would be within the prescribed limits under Section 141(3) (g) ofthe Companies Act 2013 and relevant rules prescribed thereunder and that they are notdisqualified for re-appointment and no pending proceedings against them or any of theirpartners with respect to professional matters of conduct.
The auditor have also confirmed that they have subjected themselves to the peer reviewprocess of the Institute of Chartered Accountants of India (ICAI) and holds a validcertificate issued by the Peer Review Board of the ICAI.
Report of Statutory Auditors
Auditors Qualification and Managements Representation thereon are as follows:
The auditor's report was issued without any qualification or adverse remark against thecompany.
The amounts received from P&G on account of Settlement should be considered andaccounted for as Income only in 2018-19 as the Arbitral Tribunal has given its Final Awardon 03.04.2018 and two SLPs from the Supreme court were withdrawn on 06.04.2018 &12.04.2018. The applicable TDS on the respective settlement amounts have been deducted anddeposited during the FY 2018-19 only. One of the conditions in the settlement agreement ispending. Though it was not a condition precedent to the payment of the settlement amounthowever in the terms of the agreement and thus unless not concluded the SettlementAgreement can't be termed as completed as the material conditions precedent were dependenton the authorities which were not within the control of the company. Thus it wasinappropriate in view of the management to recognize the income in FY 2018-19.Accordingly net compensation of the settlement amounting to ##Rs. ##2727.21 lakhs hasbeen accounted as income during the year ended 31st March 2019 and as shown underexceptional items.
SECRETARIAL AUDITORS & THEIR REPORT
Pursuant to the provisions of Section 204 of the Companies Act 2013 M/s Mohit &Associates Practising Company Secretaries was appointed the Secretarial Auditor for thefinancial year 2018-19 to conduct the secretarial audit of the company The SecretarialAudit Report submitted by them in the prescribed form MR- 3 is attached as Annexure5' and forms an integral part of this report.
There are no qualifications or observations or other remarks by the SecretarialAuditors in their Report issued by them for the financial year 2018-19 which call for anyexplanation from the Board of Directors.
M/s Mohit & Associates Practising Company Secretaries have been re-appointed toconduct the Secretarial Audit of the Company for the financial year 2019-20. They haveconfirmed that they are eligible for such re-appointment.
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 any frauds to the Audit Committee or to the Board ofDirectors under Section 143(12) of the Companies Act 2013 including rules madethereunder.
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 e3cient 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 withCompanyRs. s policies and Standard Operating Procedures (SOP##Rs. ##s) and audit andcompliance supplemented 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 e3cient 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.
Development and implementation of Risk Management
JHS is having comprehensive risk assessment and minimization procedure in place whichare reviewed by the Board periodically. The Board is responsible for preparation of RiskManagement plan reviewing monitoring and updating the same on regular and ongoing basis.Audit Committee is also taking care for critical risks on yearly basis.
Further the risks control systems are instituted to ensure that the risks in eachbusiness process are mitigated. The Audit Committee of the Board is responsible for theoverall risk management in coordination with Internal Auditor who report directly to theBoard. In the opinion of the Board there have been no identification of elements of riskthat may threaten the existence of the company.
NATURE OF BUSINESS
There has been no change in the nature of business of the Company. However during thefinancial year under review M/s JHS Svendgaard Retail Ventures Private Limited hasbecome the subsidiary of the company.
JHS Svendgaard Retail Ventures Pvt. Ltd. is engaged into the Chain of Retail Stores atvarious Airports in or outside India. The First Retail Store of the company is functionalat the Indira Gandhi International Airport (T2 Terminal) at Delhi. The company has plan toopen 150 stores at various Airports in coming future.
During the year under review there are three subsidiaries i.e. M/s JHS SvendgaardBrands Limited (formerly known as JHS Svendgaard Dental Care Limited) and M/s JHSSvendgaard Mechanical and Warehouse Private Limited as on March 31 2019 and M/s JHSSvendgaard Retail Ventures Private Limited (formerly known as JHS SvendgaardInfrastructure Private Limited) as on April 13 2019.
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.
Pursuant to Section 129 (3) of the Companies Act 2013 and Ind AS-110 issued by theInstitute of Chartered Accountants of India Consolidated Financial Statements presentedby 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 AOC-1 has been disclosed in the consolidatedfinancial 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. The company will make available physical copies of these documentsupon request by any shareholders of the company/subsidiary interested in obtaining thesame.
These documents can also be inspected at the registered Office of the company duringbusiness hours up to the date of ensuing AGM.
EXTRACT OF ANNUAL RETURN
Pursuant to the provision of Section 92(3) of the companies Act 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules 2014 the extract of annualreturn as on 31st March 2019 is attached herein Annexure-6 in the prescribed Form MGT-9which forms an integral part of this report.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
The particulars of loans guarantees and investments under section 186 of the CompaniesAct 2013 as at the end of the financial year ended on 31st March 2019 have been disclosedin the stand alone financial statements of the company. Kindly refer the relevant note tothese 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. During the year the company has not entered into any contract or arrangement withrelated parties which could be considered material (i.e transactions exceeding ten percentof the annual consolidated turnover as per the last audited financial statements enteredinto individually or taken together with previous transactions during the financial year)according to the policy of the company materiality of Related party Transactions.(Annexure - 7).
The Company disclosed all related party transactions in relevant Notes to theStandalone Financial Statements of the year.
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 Annexure- 8 and is attached to this report.
CORPORATE SOCIAL RESPONSIBILITY
Considering the last audited results of company the Provisions of Section 135 of theCompanies Act 2013 has become applicable on the company and accordingly in compliancewith the same the company has constituted
34 a CSR Committee and formulates the CSR Policy of the Company which is available onthe website of the Company www.svendgaard.com. The constitution of the Committee and thedetails of the meeting have been provided on the Corporate Governance Report which formsan integral part of this report.
However during the year under review your Company did not spend any amount of the CSRactivities due to non-availability of any ventures during the years. (Annexure 9)
MATERIAL CHANGES AND COMMITMENTS
Change in Capital Structure and Listing of Shares
As on the date paid up capital of the company is increased to C609004650 consistingof 60900465 fully paid up equity shares of C10/- each.
Out of the above 16360000 equity shares are pending for the listing approval at BSEand NSE.
DISCLOSURE ON DEPOSIT UNDER CHAPTER V
During the year under review the Company has neither accepted nor renewed any depositin terms of Chapter V of the Companies Act 2013 and Rules framed thereunder.
As per Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company has established Vigil Mechanism through which DirectorsEmployees and Business Associates may report unethical behaviour malpractices wrongfulconduct fraud violation of company's code of conduct without any fear of reprisal. VigilMechanism is being overseen by the Audit Committee for the genuine concerns expressed bythe employees and the Directors. The provisions of this policy are in line with theprovisions of the Section 177(9) of the Act. The said Policy provides adequate safeguardsagainst victimization of employees and Directors who express their concerns. The Companyhas also provided direct access to the chairman of the Audit Committee on reporting issuesconcerning the interests of employees and the Company. The policy as approved by the Boardis uploaded on the Company's website at http://svendgaard.com/download/invester/Vigil_Mechansim/VIGIL%20MECHANISM%20POLICY.pdf
DISCLOSURE ON SEXUAL HARASSMENT OF WOMEN AT WORK PLACE 3PREVENTION PROHIBITION &REDRESSAL3 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 COMPANYRs. 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 andCompanyRs. s operations in future.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments affecting the financial position ofthe company which have occurred between the end of the financial year of the company towhich the financial statements relate and the date of this report.
The Company maintained healthy cordial and harmonious industrial relations at alllevels. The enthusiasm and unstinting e3orts 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 all customers shareowners suppliersbankers business partners/ associates financial institutions and the Central Governmentand the State Government for their consistent support and encouragement provided by themin the past. Your Directors conveying their 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.
Date: 06.08.2019 Place: New Delhi
For and on behalf of the Board of