It is our pleasure to present to you the 30th Annual Report of your Companytogether with the Audited Financial Statements for the Financial Year ended March 312021.
Your Company's financial performance on standalone basis for the Financial Year endedMarch 31 2021 compared with previous Financial Year is summarised below:
| || ||(Rs. in Lacs) |
|Financial results ||Financial Year ended March 31 2021 ||Financial Year ended March 31 2020 |
|Revenue from Operations ||188499.87 ||166537.94 |
|Earnings before Interest Tax Depreciation and Amortization ||31673.20 ||24982.90 |
|Finance Cost ||1172.38 ||2477.88 |
|Other Income ||1981.57 ||2004.76 |
|Depreciation on Tangible Assets ||3098.43 ||2887.52 |
|Amortization of Intangible Assets ||3134.68 ||3132.15 |
|Depreciation of right of use assets ||1557.79 ||1553.45 |
|Profit before exceptional item and tax ||24691.49 ||16936.66 |
|Exceptional items ||2350.41 ||377.83 |
|Profit before tax ||22341.08 ||16558.83 |
|Provision for tax || || |
|- Current tax ||3742.00 ||2663.00 |
|- Deferred Tax Charge/ (Credit) ||(427.10) ||(1873.45) |
|Profit after tax ||19026.18 ||15769.28 |
|Earning Per Share (Basic) (In ') ||5.18 ||4.29 |
|Earning Per Share (Diluted) (In ') ||5.18 ||4.29 |
|Dividend Per Share of face value of Rs.1/- (In ') ||4.00 ||3.00 |
The abovementioned financial performance highlights are an abstract of the FinancialStatements of your Company for the Financial Year 2020-21. The detailed FinancialStatements of your Company forms part of this Annual Report and are also uploaded onwebsites of your Company i.e. www.jyothylabs.com and www.jyothylaboratories.com.
The Revenue from operations on standalone basis of your Company for the Financial Year2020-21 was up by 13.19% and stood at Rs.188499.87 Lacs compared to Rs.166537.94 Lacsin the previous financial year. The net profit for the financial year 2020-21 amounted toRs.19026.18 Lacs registering a growth of 20.65% over the previous financial year.
The consolidated revenue from operations of your Company for the year under reviewstood at Rs.190912.02 Lacs as against Rs.171117.27 Lacs in the previous yearreporting a growth of 11.57%. The consolidated profit after tax for the financial yearunder review stood at Rs.19065.15 Lacs against Rs.16258.14 Lacs in the previousfinancial year an increase by 17.27% over the previous financial year.
IMPACT OF COVID-19 PANDEMIC
As the COVID-19 pandemic continues and sudden spread of second wave of Corona Virus allover India the Government of various States including the Central Government has issuedvarious norms and directives. Also there were partial or complete Lock-down enforced byvarious State Government(s) depending upon the situation in the respective States. Duringthe Financial Year 2020-21 COVID-19 has brought an economic slow down and to avoid itsfurther spread the Government in many States had declared closure of departmental storesschools colleges malls theaters etc. Since the overall economy was hit because of thesudden outbreak of COVID - 19 it impacted the overall business of your Company. Therewere shops/malls etc. at several places closed on alternate days and some restrictions onmovement of people. Wherever possible and based on the Government Orders/Advisories theManufacturing Units were resumed to ensure continued supplies of Company's products to itsconsumers.
To break the chain of COVID-19 various steps have been taken by your Company includingcreating awareness in employees to maintain hygiene by cleaning the hands at regularintervals using the facial mask to avoid the spread of COVID-19 Work From Home facilityis still in force use of Hand Sanitizers kept at every entry point in the Officepremises checking of Body Temperature at the office premises while entry no outsidevisitors allowed for any meeting at corporate office or zonal offices and Meetings wouldbe conducted with optimum source of Communication such as mobile phone/ Videoconferencing/skype or other audio video means etc to avoid gathering.
Your Board is pleased to recommend for your consideration a dividend of Rs.4/- (RupeesFour only) per equity share of Rs.1/- each for the financial year 2020-21. The aforesaiddividend will involve a total payout of Rs.14688.35 Lacs and is subject to the approvalof Members at the ensuing Annual General Meeting of your Company. The proposed dividendpayout is in accordance with your Company's Dividend Distribution Policy.
In accordance with the provisions of the Income Tax Act 1961 as amended by and readwith the provisions of the Finance Act 2020 with effect from April 1 2020 dividenddeclared and paid by any Company is taxable in the hands of shareholders. Your Companyshall therefore be required to regulate deduction of tax at source (TDS) at the time ofpayment of dividend in accordance with the provisions of the Income Tax Act 1961 readwith the Finance Act 2020 and at the applicable rates of taxes. The TDS rate may varydepending upon the residential status of the shareholder and the documents submitted toyour Company.
Your Company will also be sending communication to the shareholders informing them tosubmit the necessary documents to enable your Company to calculate the amount of taxrequired to be deducted from the proposed dividend in respect of each eligibleshareholders. The aforesaid communication will be sent to those shareholders whose nameappears in the Register of Members as on May 28 2021 via email to those shareholders whohave registered their email id with your Company and for shareholders who have notregistered their email addresses through courier/ post at their latest registered addressavailable with your Company.
During the previous financial year your Company had paid an interim dividend of Rs.3/-(Rupees Three only) per equity share of Rs.1/- each which was considered as the finaldividend for the Financial Year 2019-20. The aforesaid dividend involved a total payout ofRs.13280.69 Lacs (inclusive of Dividend Distribution Tax of Rs.2264.43 Lacs).
DIVIDEND DISTRIBUTION POLICY
The Board of Directors of your Company had approved and adopted a policy on DividendDistribution formulated in accordance with Regulation 43A of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 (Listing Regulations) and the dividend isrecommended in accordance with the said policy.
The SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment)Regulations 2021 has allowed the companies to provide web-link of Dividend DistributionPolicy instead of attaching it along with the Annual Report. However for the easyaccessibility of the shareholders your Company has annexed to this report its DividendDistribution Policy as "Annexure - A" and has also uploaded the same onyour Company's website at the link:
ISSUE OF SHARES
a) Issue of Equity Shares with differential rights
During the year under review and to date your Company has not issued any shares withdifferential rights hence no information prescribed under the provisions of Section43(a)(ii) of the Companies Act 2013 (the Act) read with Rule 4(4) of the Companies (ShareCapital & Debentures) Rules 2014 has been furnished.
b) Issue of Sweat Equity Shares
During the year under review and to date your Company has not issued any sweat equityshares. Hence no information as per the provisions of Section 54(1 )(d) of the Act readwith Rule 8(13) of the Companies (Share Capital & Debentures) Rules 2014 isfurnished.
c) Issue of Employee Stock Option
During the year under review and to date your Company has not issued any EmployeeStock Option hence no information is furnished.
INCREASE IN SHARE CAPITAL
The Authorised Share Capital of your Company is Rs.2723000000/- consisting of: (a)2720000000 Equity Shares of the Face Value of Rs.1/- each and (b) 30000 11%Cumulative Redeemable Preference Shares of the Face Value of Rs.100/- each. The paid-upEquity Share Capital of your Company as on March 31 2021 stood at Rs.367208644/-consisting of 367208644 Equity Shares of the Face Value of Rs.1/- each. Further as onMarch 31 2021 none of the Directors of your Company holds instruments convertible intoequity shares of your Company.
During the Financial Year under review your Company did not issue any Debentures interms of Section 42 of the Act read with Rule 14 of the Companies (Prospectus andAllotment) Rules 2014 and no debentures were redeemed during the Financial Year 2020-21.
EXTRACT OF ANNUAL RETURN
The Companies (Amendment) Act 2017 has allowed the companies to provide its websiteaddress wherein its Annual Return referred to in sub-section (3) of Section 92 of the Actis uploaded instead of providing extract of the annual return. However as a goodcorporate governance practice and for the easy accessibility of the shareholders yourCompany has annexed to this report the Extract of Annual Return as prescribed underSection 92(3) of the Act read with Rule 12(1) of the Companies (Management andAdministration) Rules 2014 in the prescribed Form MGT-9 as "Annexure - B"and has also uploaded the same on your Company's website i.e. www.jyothvlabs. com andwww.iyothylaboratories.com.
NUMBER OF MEETINGS OF THE BOARD
Your Company's Board of Directors met 5 (five) times during the financial year endedMarch 31 2021 in accordance with the provisions of the Act and the Rules made thereunder.On account of pandemic of COVID-19 consequent lockdown and taking into considerationsafety and health of the Board Members and other invitees all the Board meetings duringthe financial year were held through video conferencing in compliance with the provisionsof Section 173 of the Companies Act 2013 read with Rule 3 of the Companies (Meetings ofBoard and its Powers) Rules 2014 as amended. Also the Board of Directors of yourCompany passed a resolution by circulation on June 17 2020 and September 8 2020.
The dates on which the Board of Directors met during the financial year under revieware provided in the Corporate Governance Report.
The Audit Committee of your Company consists of all Independent Directors. The detailedcomposition of the Audit Committee is provided in the Corporate Governance Report. All therecommendations made by the Audit Committee were accepted by the Board.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Act in relation to the Audited Financial Statementsof your Company for the financial year ended March 31 2021 the Board of Directors herebyconfirms that:
a. i n the preparation of the annual accounts for the financial year ended March 312021 the applicable accounting standards read with the requirements set out underSchedule III to the Act have been followed and there were no material departures from thesame;
b. your Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were reasonable and prudent so as to give a true andfair view of the state of affairs of your Company as at March 312021 and of the profit ofyour Company for the year ended on that date;
c. your Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of your Company and for preventing and detecting fraud and other irregularities;
d. your Directors have prepared annual accounts of your Company on a going concernbasis;
e. your Directors have laid down internal financial controls to be followed by yourCompany and that such internal financial controls are adequate and are operatingeffectively; and
f. your Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
In accordance with the Act and Regulation 4(2)(f) of the Listing Regulations yourCompany has framed a Policy for Evaluation of Performance of Independent Directors BoardCommittees and other Individual Directors which includes criteria for performance
evaluation of Non-Executive Directors and Executive Directors. A questionnaire isformulated for evaluation of performance of the Board its committees and individualDirectors after taking into consideration several aspects such as board compositionstrategic orientation board functioning and team dynamics.
An annual performance evaluation for the financial year 2019-20 was carried out by theBoard of Directors and the Nomination Remuneration and Compensation Committee at theirrespective meetings held on November 4 2020. The questionnaires were circulated to theBoard members and the Committee members of the nomination Remuneration and CompensationCommittee at the time of performance evaluation conducted at their respective meetings.The Directors and the Committee members then filled-up the questionnaire and rated theBoard its Committees and individual Directors and duly filled questionnaires were handedover to the Company Secretary.
Performance evaluation of Independent Directors was conducted by the Board ofDirectors excluding the Director being evaluated. The criteria for performance evaluationof Independent Directors laid down by the nomination Remuneration and CompensationCommittee include ethics and values knowledge and proficiency diligence behavioraltraits efforts for personal development and independence in decision making.
Similarly performance evaluation of the Chairman and Non-Independent Directors wascarried out by the Independent Directors of your Company at its separate meeting held onNovember 3 2020. Your Directors also expressed their satisfaction with the evaluationprocess.
TRAINING OF INDEPENDENT DIRECTORS
All Independent Directors are familiarized with your Company their roles rights andresponsibilities in your Company nature of the industry in which your Company operatesbusiness model strategy operations and functions of your Company through its ExecutiveDirectors and Senior Managerial Personnel. The details of programs for familiarization ofIndependent Directors with your Company are available on the website of your Company atthe link: https://www.jyothylabs.com/investor/management-policies-notices/#Management-Policies
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Act Ms. M. R. Jyothy ManagingDirector (DIN - 00571828) of your Company retires by rotation at the ensuing AnnualGeneral Meeting and being eligible offers herself for re-appointment.
Further during the financial year 2020-21 Ms. M. R. Jyothy has been appointed as theManaging Director designated as the Key Managerial Personnel of your Company and Ms. M. R.Deepthi has been appointed as the Whole Time Director of your Company. Further Mr. R.Lakshminarayanan Independent Director has been appointed as the Chairman of the Board ofDirectors of your Company. All the changes in the Composition of the Board of Directorshave taken effect from April 1 2020 and apart from the aforesaid changes there was nochange in Directors and Key Managerial Personnel of your Company.
DECLARATION OF INDEPENDENT DIRECTORS
Pursuant to Section 134(3)(d) of the Act your Company confirms having receivednecessary declarations from all the Independent Directors under Section 149(7) of the Actand Regulation 25(8) of the Listing Regulations declaring that they meet the criteria ofindependence laid down under Section 149(6) of the Act and Regulation 16(1)(b) of theListing Regulations. All the Independent Directors of your Company have complied with theprovisions of sub-rule (1) and (2) of Rule 6 of the Companies (Appointment andQualification of Directors) Rules 2014 by registering themselves under data bank ofIndependent Director for lifetime. Your Company has also formulated a Code of Conduct forDirectors and Senior Management Personnel and has obtained declarations from all theDirectors to the effect that they are in compliance with the Code.
MEETING OF INDEPENDENT DIRECTORS
Your Company's Independent Directors meet at least once in every financial year withoutthe presence of the Executive Directors or Management Personnel of your Company and theMeeting is conducted informally. During the year under review one meeting of IndependentDirectors was held on November 3 2020.
Your Company follows the policy on Nomination Remuneration and Compensation ofDirectors Key Managerial Personnel and other Employees as approved by the NominationRemuneration and Compensation Committee and the Board of Directors of your Company and thesame has been uploaded on your Company's website at https://www.jyothylabs.com/investor/management-policies-notices/#Management-PoliciesSalient features of the said Policy is annexed to this report as "Annexure - C".
INSTANCES OF FRAUD IF ANY REPORTED BY THE AUDITORS
There have been no instances of any fraud reported by the Statutory Auditors underSection 143(12) of the Act.
AUDITORS & AUDIT REPORTS
Statutory Auditors and their Report
At the 26th Annual General Meeting held on July 11 2017 M/s. B S R &Co. LLP Chartered Accountants (Firm Registration No.101248W/W-100022) were appointed asthe Statutory Auditors of your Company to hold office for a term of 5 years commencingfrom the conclusion of 26th Annual General Meeting till the conclusion of 31stAnnual General Meeting subject to ratification by Members in each Annual General Meeting.However as per the Companies (Amendment) Act 2017 provisions of Section 139 of the Acthave been amended wherein the requirement of ratification of appointment of StatutoryAuditors at every AGM has been done away with. Accordingly appointment of M/s. B S R& Co. LLP Chartered Accountants (Firm Registration No.1 01248W/W-100022) asStatutory Auditors of your Company will not be placed for ratification by the members inthe ensuing Annual General Meeting.
The Notes on financial statements referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification(s) reservation(s) or adverse remark(s).
Secretarial Auditors and their Report(s)
In terms of Section 204 of the Act the Board of Directors of your Company on therecommendation of the Audit Committee have re-appointed M/s. Rathi & AssociatesPracticing Company Secretaries Mumbai as the Secretarial Auditors of your Company tocarry out Secretarial Audit for the financial year 2021-22. Your Company has obtainedSecretarial Audit Report for the Financial Year 2020-21 in the prescribed Form MR-3 fromM/s Rathi & Associates Practicing Company Secretaries which forms part of the AnnualReport and is appended as "Annexure - D" to this Report. The report doesnot contain any qualification(s) reservation(s) or adverse remark(s) which calls for anyexplanation from your Board of Directors.
In addition to the above Secretarial Audit and pursuant to the requirements of the SEBICircular No. CIR/CFD/CMD1/27/2019 dated February 8 2019 M/s. Rathi & AssociatesPracticing Company Secretaries have also issued to your Company Annual SecretarialCompliance Report for the financial year 2020-21 confirming compliance of all laws SEBIRegulations and circulars/ guidelines issued thereunder applicable to your Company. TheAnnual Secretarial Compliance Report dated May 18 2021 issued by M/s. Rathi &Associates
Practicing Company Secretaries has been submitted to the stock exchanges within 60 daysfrom the financial year ended March 31 2021.
Regulation 24A of the Listing Regulations requires the companies to annex to its AnnualReport a Secretarial Audit Report given by a Company Secretary in practice in theformat prescribed by SEBI from time to time. However pursuant to the provision of SEBICircular No. CIR/CFD/CMD1/27/2019 dated February 8 2019 and in order to avoidduplication SEBI has allowed companies to use the same Form No. MR-3 as required underthe Act and the rules made thereunder for the purpose of compliance with Regulation 24A ofthe Listing Regulations as well. Accordingly your Company in compliance with the saidSEBI Circular has used the same Form No. MR-3 as prescribed under the Act and the rulesmade thereunder for the purpose of compliance with Regulation 24A of the ListingRegulations as well.
Cost Auditors and their Report
As per Section 148 of the Act read with the Companies (Cost Records and Audits) Rules2014 as amended the Board of Directors of your Company on recommendation of the AuditCommittee have re-appointed M/s. R. Nanabhoy & Co. Cost Accountants Mumbai(Registration No. 000010) as the Cost Auditors to carry out the cost audit of its productscovered under the Ministry of Corporate Affairs Order dated June 30 2014 (as amended onDecember 31 2014) for the financial year 2021-22. The remuneration of Cost Auditors hasbeen approved by the Board of Directors on the recommendation of the Audit Committee andthe requisite resolution for ratification of remuneration of Cost Auditors by the membershas been set out in the Notice convening the 30th Annual General Meeting ofyour Company.
The re-appointment of M/s. R. Nanabhoy & Co. Cost Accountants Mumbai as the CostAuditors of your Company is within the prescribed limits of the Act and free from anydisqualifications specified thereunder. Your Company has received the Certificate from theCost Auditors confirming their independence and relationship on arm's length basis.
The Cost Audit Report for the financial year ended March 31 2020 issued by M/s. R.Nanabhoy & Co. Cost Auditors in respect of the various products prescribed underCost Audit Rules does not contain any qualification(s) reservation(s) or adverseremark(s) and the same was filed with the Ministry of Corporate Affairs on August 202020. The Cost Audit Report for the financial year ended March 31 2021 will be filed withthe Ministry of Corporate Affairs within the prescribed statutory time limit.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
The details of Loans Guarantees and Investments as prescribed under Section 186 of theAct are appended as "Annexure - E" and forms integral part of thisreport.
RELATED PARTY TRANSACTIONS
Pursuant to Section 134 of the Act read with Rule 8(2) of the Companies (Accounts)Rules 2014 the particulars of contracts or arrangements with related parties referred toin Section 188(1) of the Act in the prescribed Form AOC-2 is appended as "Annexure- F" to this Report. During the year under review your Company had entered intocontract(s)/arrangement(s)/transaction(s) with related parties which were in ordinarycourse of business and on arm's length basis and none of which could be considered asmaterial in accordance with the policy of your Company on materiality of related partytransactions. Further none of the contract(s)/ arrangement(s)/transaction(s) with relatedparties required approval of members as the same were within the limits prescribed underSection 188(1) of the Act and the Rules framed thereunder read with the provisions ofRegulation 23(4) of the Listing Regulations.
The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed from your Company's website at thelink: https://www.jyothylabs.com/investor/management-policies-notices/#Management-Policies
Attention of Members is also drawn to Note 33 to the financial statements for the yearended March 31 2021 which sets out the related party disclosures as per the IndianAccounting Standard (Ind AS) 24.
STATE OF THE COMPANY'S AFFAIRS (MANAGEMENT DISCUSSION AND ANALYSIS)
In terms of the provisions of Regulation 34(2) of the Listing Regulations theManagement Discussion and Analysis Report of your Company's affairs for the year underreview is attached and forms an integral part of this Annual Report.
TRANSFER TO RESERVES
Your Company did not transfer any sum to the General Reserve or to the DebentureRedemption Reserve for the Financial Year under review.
MATERIAL CHANGES AND COMMITMENTS
Except as disclosed elsewhere in this report no material changes and commitments whichcould affect your Company's financial position have occurred between the end of thefinancial year 2020-21 and to the date of this report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under Section 134(3)(m) of theAct read with Rule 8 of the Companies (Accounts) Rules 2014 are annexed herewith as"Annexure - G" to this report.
The Board of Directors of your Company has constituted a Risk Management Committeewhich comprises of the following Directors/Executives of your Company as Members of theCommittee as on March 31 2021:
1. Mr. K. Ullas Kamath Joint Managing Director
2. Ms. M. R. Jyothy Managing Director;
3. Ms. M. R. Deepthi Whole-time Director
4. Mr. T. Ananth Rao Head - Operations; and
5. Mr. Ravi Razdan Head - Systems & HR.
The Risk Management Committee has been entrusted with the powers such as monitoring andreviewing of the risk management plans/policies; appointing various functionaries;deciding the role and responsibilities of various functionaries; evaluating risk includingcyber risk to your Company as a whole and also control measures/ security; such otherpowers as may be delegated by the Board of Directors from time to time. The RiskManagement Committee of your Company met once during the Financial Year 2020-21 i.e. onJanuary 15 2021. Mr. K. Ullas Kamath was appointed as the Chairperson to chair the saidmeeting of Risk Management Committee.
The Board of Directors of your Company has designed a Risk Management Policy in astructured manner taking into consideration the following factors and the same is beingmonitored on a periodic basis by your Company:
1. The Management Approach;
2. Vision & Mission;
3. Key Business Goals;
4. Risk Library; and
5. Risk Management Focus.
Also the Management has adopted the following 5 step approach keeping in view yourCompany's Vision and Mission:
1. Identifying 'Key' Business goals;
2. Identifying the Risk Management focus;
3. Identifying Business risks;
4. Prioritizing the identified business risks; and
5. Rating the current risk management capability for identified risks.
Further your Company has identified Key Business Goals for a five year horizon and alibrary of risk events which could be bottleneck in achieving the same. After defining thekey business goals and the library of risk events your Company identified the goals onwhich the management would focus.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Company has been a firm believer that each and every individual including anartificial person owe something to the society at large. Mr. M. P. Ramachandran ChairmanEmeritus of your Company even before the inception of Corporate Social Responsibilityprovisions under the Act has been involved in charitable and social activities in hisindividual capacity.
Your Company for the financial year 2020-21 was required to spend an amount ofRs.386.12 Lacs (2% of the average net profits of last three financial years) towardsCorporate Social Responsibility (CSR) activities. However your Company for the financialyear 2020-21 has spent Rs.395.79 Lacs which was higher than the statutory requirement of2% of the average net profits for the last three financial years.
In the financial year 2020-21 your Company has spent an excess amount of Rs.9.67 Lacs.Further as per the provisions of sub-rule (3) of Rule 7 of the Companies (CorporateSocial Responsibility Policy) Rules 2014 the Board of Directors of your Company at itsmeeting held on May 18 2021 passed a resolution to utilize the excess amount of Rs.9.67Lacs spent in the Financial Year 2020-21 to set off against the amount required to bespent under Section 135(5) of the Companies Act 2013 up to immediate succeeding threefinancial years i.e. up to Financial Year 2023-24.
The Annual Report on CSR activities that includes details about brief outline on CSRPolicy developed and implemented by your Company Composition of CSR Committee and CSRinitiatives taken during the financial year 2020-21 in accordance with Section 135 of theAct and other details required to be disclosed as per the latest format prescribed underthe Companies (Corporate Social Responsibility Policy) Rules 2014 as amended by theCompanies (Corporate Social Responsibility Policy) Amendment Rules 2021 dated January 222021 is annexed herewith as "Annexure - H" to this Report
Details about the CSR Policy adopted and formulated by your Company can be accessedfrom your Company's website at the link:
The Annual action plan for the financial year 2021-22 as recommended by the CorporateSocial Responsibility Committee and approved by the Board of Directors of your Company attheir respective Meetings held on May 18 2021 has also been uploaded on your Company'swebsite at the link:
CHANGE IN NATURE OF BUSINESS
During the year under review there was no change in the nature of business of yourCompany.
PERFORMANCE OF SUBSIDIARIES ASSOCIATE COMPANIES/JOINT VENTURES
A statement containing the salient features of the financial statements of yourCompany's subsidiaries Associates and Joint Venture Companies in the prescribed formatAOC-1 is presented in separate section forming part of the financial statements and hencenot repeated here in this Report for the sake of brevity. Policy for determining materialsubsidiaries formulated and adopted by your Company can be accessed from your Company'swebsite at the link:
No company has become or ceased to be your Company's subsidiary Joint venture orassociate company during the financial year 2020-21.
Further during the year under review based on the Joint Petition filed by JyothyFabricare Services Limited Subsidiary of your Company (the Transferee Company) along withits Wholly Owned Subsidiary viz. Four Seasons Drycleaning Company Private Limited (SecondTransferor Company) the Hon'ble National Company Law Tribunal Mumbai Bench havesanctioned the Scheme of Amalgamation between Four Seasons Drycleaning Company PrivateLimited (Second Transferor Company) with Jyothy Fabricare Services Limited (the TransfereeCompany) vide their order dated February 16 2021. Since the registered office of theFirst Transferor Company i.e. Snoways Laundrers & Drycleaners Private Limited is inBangalore Karnataka the Petition has been filed before the Hon'ble National Company LawTribunal Bench at Bangalore seeking their approval to the said Amalgamation.
Your Company did not accept/renew any fixed deposits from public and no fixed depositswere outstanding or remained unclaimed as on March 31 2021.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by any Regulator/Court that wouldimpact the going concern status of your Company and its future operations.
INTERNAL FINANCIAL CONTROLS
The Internal Financial Controls adopted and followed by your Company are adequate andare operating effectively. Your Company has adopted a dynamic Internal Financial Controlsframework based on the best practices followed in the industry. Under the said frameworkRisk and Control Matrix are defined for the following process(es):-
1. Fixed Assets;
2. Financial Statement Closing Process;
3. Information Technology;
4. Inventory Management;
5. Marketing and Advertising;
7. Production Process;
8. Taxation; and
M/s. Mahajan & Aibara Chartered Accountants LLP Internal Auditors of your Companyhave been entrusted with the responsibility of testing the controls identified andimplemented by your Company for all the aforesaid processes.
During the year under review no material or serious observations have been receivedfrom the Internal Auditors of your Company regarding inefficiency or inadequacy of suchcontrols.
The consolidated financial statements of your Company are prepared in accordance withthe relevant Indian Accounting Standards issued by the Central Government under Section133 of the Act and forms integral part of the Annual Report.
The report on Corporate Governance as stipulated under Regulation 34(3) read withSchedule V of the Listing Regulations together with the Certificate received from M/s.Rathi & Associates Practicing Company Secretaries confirming compliance of CorporateGovernance requirements is attached and forms an integral part of this Report.
BUSINESS RESPONSIBILITY REPORT
As per the requirements of Regulation 34(2)(f) of the Listing Regulations the BusinessResponsibility Reports are applicable to top 500 listed companies based on marketcapitalization. Further SEBI vide its notification dated December 26 2019 notified theprovisions of the SEBI (Listing Obligations and Disclosure Requirements) (Fifth Amendment)Regulations 2019 and has extended the applicability to top 1000 listed companies based onmarket capitalization.
The Company being one of the top 500 listed companies is required to report on BusinessResponsibility. Accordingly the report on Business Responsibility forms an integral partof this report.
COMPLIANCE WITH SECRETARIAL STANDARDS
During the year under review your Company has complied with the Secretarial Standardsissued by the Institute of Company Secretaries of India on Board Meetings and GeneralMeetings.
REMUNERATION/COMMISSION FROM ANY OF ITS SUBSIDIARIES
During the year under review neither the Managing Directors nor the Whole-timeDirector of your Company received any remuneration or commission from any of itssubsidiaries.
EMPLOYEE STOCK OPTION SCHEME (ESOS)
During the financial year under review no options were granted vested or exercisedand hence the disclosure as required under Section 62(1)(b) of the Act read with Rule12(9) of the Companies (Share Capital and Debenture) Rules 2014 and Regulation 14 of theSecurities Exchange Board of India (Share Based Employee Benefits) Regulations 2014 isnot required to be furnished.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
Your Company has a Vigil Mechanism in place which includes a Whistle Blower Policy interms of the Listing Regulations for Directors and Employees of your Company to provide amechanism which ensures adequate safeguards to Employees and Directors from anyvictimization on raising of concerns of any violations of legal or regulatoryrequirements incorrect or misrepresentation of any financial statements and reports etc.
The Vigil Mechanism/Whistle Blower Policy of your Company can be accessed from yourCompany's website at the link:
Your Company has put in place a mechanism in consonance with the requirements ofSection 177 of the Act and Regulation 18(3) of the Listing Regulations for the Directorsemployees and other stakeholders to report genuine concerns about unethical behavioractual or suspected fraud or violation of the Code of Conduct or policy framed by yourCompany. All Protected Disclosures can be reported by the Whistle Blower in writing orthough call on the following number i.e. 18601232120 or Hotline number i.e. 022-66892804or alternatively the same can also be sent through email on email@example.com the subject "Protected disclosure under the Whistle Blower Policy".
The Whistle Blowers have a right/option to report their concerns about unethicalbehaviour actual or suspected fraud or violation of the Codes of Conduct or policydirectly to the Chairman of the Audit Committee. During the year under review noprotected disclosure from any Whistle Blower was received by the designated officer underthe Vigil Mechanism.
INTERNAL CONTROL SYSTEMS
Your Company has adequate internal control systems and procedures in place foreffective and smooth conduct of business and to meet exigencies of operation and growth.Your Company has set up Standard Operating Process (SOP) procedures and controls apartfrom regular Internal Audits. Roles and responsibilities have been laid down for eachprocess owners. Management Information System has been established which ensures thatadequate and accurate information is available for reporting and decision making.
Internal Audit is conducted by an independent firm of Chartered Accountants viz. M/s.Mahajan & Aibara Chartered Accountants LLP. Internal Auditors regularly check theadequacy of the system their observations are reviewed by the management and remedialmeasures as necessary are taken. Internal Auditors report directly to the Chairman ofthe Audit Committee to maintain its objectivity and independence.
Your Company has also implemented a Compliance Tool software mechanism viz."Legatrix" designed by Legasis Services Private Limited which ensures compliancewith the provisions of all applicable laws to your Company adequately and effectively.
TRANSFERS TO INVESTOR EDUCATION AND PROTECTION FUND
Transfer of Equity Shares:
Pursuant to the provisions of Section 124(6) of the Act and the Investor Education andProtection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 notified bythe Ministry of Corporate Affairs on September 7 2016 and subsequently amended videnotification dated February 28 2017 all the equity shares of any Company inrespect of which dividend amounts have not been paid or claimed by the shareholders forseven consecutive years or more are required to be transferred to demat account of theInvestor Education and Protection Fund Authority (IEPF Account).
Accordingly 330760 shares of 8156 members and 38781 shares of 876 members of yourCompany were transferred to Demat Account of IEPF Authority on October 14 2020 and March26 2021 respectively. Your Company had sent individual notice to all the aforesaid 9032members and has also published the notice in the leading English and Marathi newspapers.The details of the aforesaid 9032 members are available on websites of your Company i.e. www.jyothylabs.comand www.jyothylaboratories.com.
Transfer of Unpaid/Unclaimed Dividend:
Further pursuant to the provisions of Section 124(5) of the Act the dividend whichremained unclaimed/ unpaid for a period of seven years from the date of transfer to unpaiddividend account is required to be transferred to the Investor Education and ProtectionFund (IEPF) established by the Central Government.
As a result the unclaimed/unpaid dividend pertaining to the financial year 2012-13 andinterim dividend for the financial year 2013-14 which remained unpaid and unclaimed for aperiod of 7 years has been transferred by your Company to the IEPF.
Your Company has uploaded the details of unclaimed/ unpaid dividend for the financialyear 2012-13 onwards on its websites i.e. www.jyothylabs.com and www.jyothylaboratories.comand on website of the Ministry of Corporate Affairs i.e. www.mca.gov.in and thesame gets revised/updated from time to time pursuant to the provisions of IEPF (Uploadingof Information Regarding Unpaid and Unclaimed Amount Lying with Companies) Rules 2012.
Further the unpaid final dividend amount pertaining to the financial year 2013-14 willbe transferred to IEPF during the Financial Year 2021-22.
TRANSFER OF SHARES TO THE CUSTODIAN OF ENEMY PROPERTY OF INDIA (CEPI)
During the financial year under review the Registrar of Companies Mumbai Maharashtra(ROC) had instructed your Company to identify the enemy shareholders of your Company andissue duplicate shares in favor of the Custodian of Enemy Property of India (CEPI) inrespect of the shares held by such enemy shareholders in your Company. CEPI had provided alist of enemy shareholders to your Company and your Company based on the list providedtransferred 194 equity shares held by 15 enemy shareholders in favour of CEPI on September17 2020 and November 9 2020.
Your Company has always provided a congenial atmosphere for work to all its employeesthat is free from discrimination and harassment. Employee relations remained cordialduring the year under review.
Your Company has state-of-the-art facilities at all of its manufacturing locationsspread across India. Furthermore six manufacturing plants of your Company situated atRoorkee Wayanad Jammu Pithampur Puducherry and Baddi are ISO 9001 -2015 certified.
PREVENTION OF SEXUAL HARASSMENT
Your Company has framed 'Anti - Sexual Harassment Policy' at workplace and hasconstituted an Internal Complaints Committee (ICC) as per the requirement of SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 and theRules framed thereunder. No complaints with allegations of any sexual harassment werereported during the year under review.
PARTICULARS OF EMPLOYEES
The disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 as amended and forming part of the Directors' Report forthe year ended March 31 2021 is annexed herewith as "Annexure - I" tothis Report.
DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY ANDBANKRUPTCY CODE 2016 (31 OF 2016)
During the year under review your Company on December 21 2020 filed an applicationbefore the Registrar National Company Law Tribunal Chennai Bench (NCLT) as a financialcreditor to initiate corporate insolvency resolution process under Section 7 read withChapter II of Part II/ Under Chapter IV of Part II of the Insolvency and Bankruptcy Code2016 against Abhiraami Chemicals Limited. On account of pandemic of Covid-19 andconsequent lockdown the application filed by your Company has not yet been admitted bythe NCLT as on the end of the financial year i.e. March 31 2021.
Certain statements in the "Management Discussion and Analysis" section may be'forward-looking'. Such 'forward looking' statements are subject to risks anduncertainties and therefore actual results could be different from what your Directorsenvisage in terms of future performance and outlook.
Your Directors express their sincere appreciation for the contribution and commitmentof the employees of your Company at all levels and for the excellent support provided bythe members customers distributors suppliers bankers media and other stakeholdersduring the financial year under review. Your Company looks forward to continued andunstinted support in its endeavor to make lives of consumers better by providing worldclass products at affordable price.
| || |
For and on behalf of the Board of Directors
| || ||For Jyothy Labs Limited |
| || ||(Formerly known as Jyothy Laboratories Limited) |
| ||Sd/- ||Sd/- |
| ||M. R. Jyothy ||K. Ullas Kamath |
|Place: Mumbai ||Managing Director ||Joint Managing Director |
|Date: May 18 2021 ||(DIN: 00571828) ||(DIN: 00506681) |