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Jyothy Labs Ltd.

BSE: 532926 Sector: Consumer
NSE: JYOTHYLAB ISIN Code: INE668F01031
BSE 00:00 | 07 Feb 206.80 -6.80
(-3.18%)
OPEN

211.35

HIGH

222.90

LOW

206.00

NSE 00:00 | 07 Feb 207.20 -6.15
(-2.88%)
OPEN

213.15

HIGH

222.70

LOW

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OPEN 211.35
PREVIOUS CLOSE 213.60
VOLUME 78741
52-Week high 222.90
52-Week low 130.00
P/E 35.17
Mkt Cap.(Rs cr) 7,594
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 211.35
CLOSE 213.60
VOLUME 78741
52-Week high 222.90
52-Week low 130.00
P/E 35.17
Mkt Cap.(Rs cr) 7,594
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Jyothy Labs Ltd. (JYOTHYLAB) - Director Report

Company director report

Dear Members

It is our pleasure to present to you the 31st Annual Reportof your Company together with the Audited Financial Statements for the Financial Yearended March 31 2022.

FINANCIAL PERFORMANCE

Your Company's financial performance on standalone basis for theFinancial Year ended March 31 2022 compared with previous Financial Year is summarisedbelow:

(Rs.in Lacs)

Financial Results Financial Year ended March 31 2022 Financial Year ended March 31 2021
Revenue from Operations 216626.57 188499.87
Earnings before interest tax depreciation and amortization 24945.78 31673.20
Finance Cost 668.66 1172.38
Other Income 1895.80 1981.57
Depreciation on Tangible Assets 3061.83 3098.43
Amortization of Intangible Assets 3132.96 3134.68
Depreciation of right of use assets 1657.38 1557.79
Profit before exceptional item and tax 18320.75 24691.49
Exceptional items Nil 2350.41
Profit before tax 18320.75 22341.08
Provision for tax
- Current tax 3207.00 3742.00
- Deferred Tax Charge/ (Credit) (499.16) (427.10)
Profit after tax 15612.91 19026.18
Earning Per Share (Basic) (In ') 4.25 5.18
Earning Per Share (Diluted) (In ') 4.25 5.18
Dividend Per Share of face value of ' 1/- (In ') 2.50 4.00

The abovementioned financial performance highlights are an abstract ofthe Financial Statements of your Company for the Financial Year 2021-22. The detailedFinancial Statements of your Company forms part of this Annual Report and are alsouploaded on the website of your Company i.e. www.jyothylabs.com.

PERFORMANCE HIGHLIGHTS

The Revenue from operations on standalone basis of your Company for theFinancial Year 2021-22 was up by 14.92% and stood at ' 216626.57 Lacscompared to ' 188499.87 Lacs in the previous financial year. The netprofit for the financial year 2021-22 amounted to ' 15612.91 Lacs.

The consolidated revenue from operations of your Company for thefinancial year under review stood at ' 219648.88 Lacs as against '190912.02 Lacs in the previous year reporting a growth of 15.05%. The consolidatedprofit after tax for the financial year under review stood at ' 15913.03Lacs against ' 19065.15 Lacs in the previous financial year.

IMPACT OF COVID-19 PANDEMIC

As the COVID-19 pandemic continues and sudden spread of second wave ofCorona Virus all over India the Government of various States including the CentralGovernment had issued various norms and directives. Also there were partial or completeLock-down enforced by various State Government(s) depending upon the situation in therespective States during the first half of the Financial Year 2021 -22. Further to curbthe spread of the COVID-19 the Government in many States had declared closure ofdepartmental stores schools colleges malls theaters etc. Since the overall economywas hit because of the sudden outbreak of COVID - 19 it impacted the overall business ofyour Company in the First half of the Financial Year.

However in the second half of the Financial Year 2021 - 22 theGovernment relaxed some restrictions as there were reduction in the number of COVID casesand in turn the impact of COVID-19 reduced on the overall business of your Company.Further in accordance with the Government policies your Company has also started gettingback to normal and physical presence of Employees at offices/factories has been allowed.

DIVIDEND

Your Board is pleased to recommend for your consideration a dividendof ' 2.50 (Rupees Two and Fifty Paisa only) per equity share of '1/- each for the financial year 2021-22. The aforesaid dividend will involve a totalpayout of ' 9180.22 Lacs and is subject to the approval of Members at theensuing Annual General Meeting of your Company. The proposed dividend payout is inaccordance with your Company's Dividend Distribution Policy.

In accordance with the provisions of the Income Tax Act 1961 asamended by and read with the provisions of the Finance Act 2020 with effect from April1 2020 dividend declared and paid by any Company is taxable in the hands ofshareholders. Your Company shall therefore be required to regulate deduction of tax atsource (TDS) at the time of payment of dividend in accordance with the provisions of theIncome Tax Act 1961 read with the Finance Act 2020 and at the applicable rates of taxes.The TDS rate may vary depending upon the residential status of the shareholder and thedocuments submitted to your Company.

Your Company will also be sending communication to the shareholdersinforming them to submit the necessary documents to enable your Company to calculate theamount of tax required to be deducted from the proposed dividend in respect of eacheligible shareholders. The aforesaid communication will be sent to those shareholderswhose name appears in the Register of Member as on June 10 2022 via email to thoseshareholders who have registered their email id with your Company.

During the previous financial year your Company had paid a finaldividend of ' 4/- (Rupees Four only) per equity share of ' 1/-each for the Financial Year 202021. The aforesaid dividend involved a total payout of '14688.35 Lacs.

DIVIDEND DISTRIBUTION POLICY

The Board of Directors of your Company had approved and adopted apolicy on Dividend Distribution formulated in accordance with Regulation 43A of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 (the ListingRegulations) and the dividend is recommended in accordance with the said policy.

The SEBI (Listing Obligations and Disclosure Requirements) (SecondAmendment) Regulations 2021 has allowed the companies to provide web-link of DividendDistribution Policy instead of attaching it along with the Annual Report. However for theeasy accessibility of the shareholders your Company has annexed to this report itsDividend Distribution Policy as "Annexure - A" and has also uploaded thesame on your Company's website at the link:

https://www.jyothylabs.com/investor/management-policies-notices/#Management-Policies

ISSUE OF SHARES

a) Issue of Equity Shares with differential rights

During the year under review and to date your Company has not issuedany shares with differential rights hence no information prescribed under the provisionsof Section 43(a)(ii) of the Companies Act 2013 (the Act) read with Rule 4(4) of theCompanies (Share Capital & Debentures) Rules 2014 has been furnished.

b) Issue of Sweat Equity Shares

During the year under review and to date your Company has not issuedany sweat equity shares. Hence no information as per the provisions of Section 54(1 )(d)of the Act read with Rule 8(13) of the Companies (Share Capital & Debentures) Rules2014 is furnished.

c) Issue of Employee Stock Option

During the year under review and to date your Company has not issuedany Employee Stock Option hence no information is furnished.

INCREASE IN SHARE CAPITAL

The Authorised Share Capital of your Company is ' 2723000000/-consisting of: (a) 2720000000 Equity Shares of the Face Value of ' 1/-each and (b) 30000 11% Cumulative Redeemable Preference Shares of the Face Value of '100/- each. The paid-up Equity Share Capital of your Company as on March 31 2022 stood at' 367208644/- consisting of 367208644 Equity Shares of the Face Valueof ' 1/- each. Further as on March 31 2022 none of the Directors of yourCompany holds instruments convertible into equity shares of your Company.

DEBENTURES

During the Financial Year under review your Company did not issue anyDebentures in terms of Section 42 of the Act read with Rule 14 of the Companies(Prospectus and Allotment) Rules 2014 and no debentures were redeemed during theFinancial Year 2021-22.

ANNUAL RETURN

Pursuant to Section 134 (3) (a) of the Act the draft annual return forFinancial Year 2021-22 prepared in accordance with Section 92(3) of the Act is madeavailable on the website of the Company i.e. https://www.jyothylabs.com/investor/annual-report-2/#annual-report

NUMBER OF MEETINGS OF THE BOARD

Your Company's Board of Directors met 5 (five) times during thefinancial year ended March 31 2022 in accordance with the provisions of the Act and theRules made thereunder. Except for the Board and the Committee Meetings held on March 282022 which was held physically all the other Board and Committee Meetings duringFinancial Year 2021-22 were held through video conferencing in compliance with theprovisions of Section 173 of the Act read with Rule 3 of the Companies (Meetings of Boardand its Powers) Rules 2014 as amended.

The meetings were held on May 18 2021 July 29 2021 November 22021 January 21 2022 and March 28 2022. Also during the financial year 2021-22 1(one) Circular Resolution pursuant to Section 175 of the Act was passed on December 132021.

AUDIT COMMITTEE

The Audit Committee of your Company consists of all IndependentDirectors. The detailed composition of the Audit Committee is provided in the CorporateGovernance Report. All the recommendations made by the Audit Committee were accepted bythe Board.

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 134(5) of the Act in relation to the AuditedFinancial Statements of your Company for the financial year ended March 31 2022 theBoard of Directors hereby confirms that:

a. in the preparation of the annual accounts for the financial yearended March 31 2022 the applicable accounting standards read with the requirements setout under Schedule III to the Act have been followed and there were no material departuresfrom the same;

b. your Directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that were reasonable and prudent so asto give a true and fair view of the state of affairs of your Company as at March 31 2022and of the profit of your Company for the year ended on that date;

c. your 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 your Company and for preventing and detecting fraud andother irregularities;

d. your Directors have prepared annual accounts of your Company on agoing concern basis;

e. your Directors have laid down internal financial controls to befollowed by your Company and that such internal financial controls are adequate and areoperating effectively; and

f. your Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems are adequate and operatingeffectively.

PERFORMANCE EVALUATION

In accordance with the Act and Regulation 4(2)(f) of the ListingRegulations your Company has framed a Policy for Evaluation of Performance of IndependentDirectors Board Committees and other Individual Directors which includes criteria forperformance evaluation of Non-Executive Directors and Executive Directors. A questionnaireis formulated 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 2020-21 wascarried out by the Board of Directors and the Nomination Remuneration and CompensationCommittee at their respective meetings held on May 18 2021. The questionnaires werecirculated to the Board members and the Committee members of the Nomination Remunerationand Compensation Committee at the time of performance evaluation conducted at theirrespective meetings. The Directors and the Committee members then filled-up thequestionnaire and rated the Board its Committees and individual Directors and duly filledquestionnaires were handed over to the Company Secretary.

Performance evaluation of Independent Directors was conducted by theBoard of Directors excluding the Director being evaluated. The criteria for performanceevaluation of Independent Directors laid down by the Nomination Remuneration andCompensation Committee include ethics and values knowledge and proficiency diligencebehavioral traits efforts for personal development and independence in decision making.

Similarly performance evaluation of the Chairman and Non-IndependentDirectors was carried out by the Independent Directors of your Company at its separatemeeting held on May 17 2021. Your Directors also expressed their satisfaction with theevaluation process.

TRAINING OF INDEPENDENT DIRECTORS

All Independent Directors are familiarized with your Company theirroles rights and responsibilities in your Company nature of the industry in which yourCompany operates business model strategy operations and functions of your Companythrough its Executive Directors and Senior Managerial Personnel. The details of programsfor familiarization of Independent Directors with your Company are available on thewebsite of your Company at the link:

https://www.jyothylabs.com/investor/management-policies-notices/#Management-Policies

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under consideration Mr. K Ullas Kamath ceased to be theJoint Managing Director member of the Board of Directors and its Committees thereof witheffect from the closing hours of January 22 2022.

Based on the recommendation of the Nomination Remuneration andCompensation Committee at its meeting held on March 28 2022 the Board of Directors ofyour Company appointed Mr. Aditya Sapru (DIN - 00501437) as an Additional Directordesignated as Independent Director of your Company with effect from March 28 2022. In theopinion of the Board Mr. Sapru is a person of integrity and have about 3 decades ofinternational experience in building growth frameworks and growth strategy fororganizations to create long term stakeholder value. Further as per the requirement ofRegulation 17(1 C) of the Listing Regulations your Company on May 8 2022 has obtainedapproval of the shareholders of your Company through Postal Ballot under Section 110 ofthe Act for appointment of Mr. Aditya Sapru as an Independent Director of your Company fora consecutive term of 5 years commencing from March 28 2022 to March 27 2027 (both daysinclusive).

In accordance with the provisions of Section 152 of the Act Ms. M. R.Deepthi Whole Time Director (DIN - 01746698) of your Company retires by rotation at theensuing Annual General Meeting and being eligible offers herself for re-appointment.

Apart from the aforesaid changes there was no change in Directors andKey Managerial Personnel of your Company.

DECLARATION OF INDEPENDENT DIRECTORS

Pursuant to Section 134(3)(d) of the Act your Company confirms havingreceived necessary declarations from all the Independent Directors under Section 149(7) ofthe Act and Regulation 25(8) of the Listing Regulations declaring that they meet thecriteria of independence laid down under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. All the Independent Directors of your Company havecomplied with the provisions of subrule (1) and (2) of Rule 6 of the Companies(Appointment and Qualification of Directors) Rules 2014 by registering themselves underdata bank of Independent Director for lifetime. Your Company has also formulated a Code ofConduct for Directors and Senior Management Personnel and has obtained declarations fromall the Directors to the effect that they are in compliance with the Code.

MEETING OF INDEPENDENT DIRECTORS

Your Company's Independent Directors meet at least once in everyfinancial year without the presence of the Executive Directors or Management Personnel ofyour Company and the Meeting is conducted informally. During the year under review onemeeting of Independent Directors was held on May 17 2021.

REMUNERATION POLICY

Your Company follows the policy on Nomination Remuneration andCompensation of Directors Key Managerial Personnel and other Employees as approved by theNomination Remuneration and Compensation Committee and the Board of Directors of yourCompany and the same has been uploaded on your Company's website athttps://www.iyothylabs.com/investor/ management-policies-notices/#Management-PoliciesSalient features of the said Policy is annexed to this report as "Annexure - B".

INSTANCES OF FRAUD IF ANY REPORTED BY THE AUDITORS

There have been no instances of any fraud reported by the StatutoryAuditors under Section 143(12) of the Act.

AUDITORS & AUDIT REPORTS

Statutory Auditors and their Report

At the 26th Annual General Meeting held on July 11 2017M/s. B S R & Co. LLP Chartered Accountants (Firm Registration No.101248W/W-100022)were appointed as the Statutory Auditors of your Company to hold office for a term of 5years commencing from the conclusion of 26th Annual General Meeting till theconclusion of 31st Annual General Meeting subject to ratification by Members ineach Annual General Meeting. However as per the Companies (Amendment) Act 2017provisions of Section 139 of the Act have been amended wherein the requirement ofratification of appointment of Statutory Auditors at every AGM has been done away with.The re-appointment of the existing Statutory Auditors is due in the ensuing Annual GeneralMeeting. Accordingly the Audit Committee and the Board of Directors of your Companyduring their respective meetings held on May 24 2022 have considered and approved there-appointment of M/s. B S R & Co. LLP Chartered Accountants (Firm RegistrationNo.101248W/W-100022) as the Statutory Auditors of your Company for further period of 5years i.e. from the conclusion of the 31st Annual General Meeting until theconclusion of the 36th Annual General Meeting of your Company to be held in theyear 2027. The item for re-appointment of M/s. B S R & Co. LLP Chartered Accountants(Firm Registration No.101248W/W-100022) as the Statutory Auditors for second term of 5years has been included in the Notice of the ensuing Annual General Meeting forconsideration and approval of Members.

M/s. B S R & Co. LLP Chartered Accountants (Firm RegistrationNo.101248W/W-100022) have given their consent for the proposed re-appointment as StatutoryAuditors of your Company from the conclusion of the ensuing Annual General Meeting tillthe conclusion of 36th Annual General Meeting of your Company to be held in theyear 2027. They have further confirmed that the said re-appointment if made would bewithin the prescribed limits under Section 141 (3)(g) of the Act and that they are notdisqualified for re-appointment.

The Notes on financial statements referred to in the Auditors' Reportare self-explanatory and do not call for any further comments. The Auditors' Report doesnot contain any qualification(s) reservation(s) or adverse remark(s).

Secretarial Auditors and their Report(s)

In terms of Section 204 of the Act the Board of Directors of yourCompany on the recommendation of the Audit Committee have re-appointed M/s. Rathi &Associates Practicing Company Secretaries Mumbai as the Secretarial Auditors of yourCompany to carry out Secretarial Audit for the financial year 2022-23. Your Company hasobtained Secretarial Audit Report for the Financial Year 2021 -22 in the prescribed FormMR-3 from M/s Rathi & Associates Practicing Company Secretaries which forms part ofthe Annual Report and is appended as "Annexure - C" to this Report. Thereport does not contain any qualification(s) reservation(s) or adverse remark(s) whichcalls for any explanation from your Board of Directors.

In addition to the above Secretarial Audit and pursuant to therequirements of the SEBI Circular No. CIR/CFD/ CMD1/27/2019 dated February 8 2019 M/s.Rathi & Associates Practicing Company Secretaries have also issued to your CompanyAnnual Secretarial Compliance Report for the financial year 2021-22 confirming complianceof all laws SEBI Regulations and circulars/ guidelines issued thereunder applicable toyour Company. The Annual Secretarial Compliance Report dated May 24 2022 issued by M/s.Rathi & Associates Practicing Company Secretaries has been submitted to the stockexchanges within 60 days from the financial year ended March 31 2022.

Regulation 24A of the Listing Regulations requires the companies toannex to its Annual Report a Secretarial Audit Report given by a Company Secretary inpractice in the format prescribed by SEBI from time to time. However pursuant to theprovision of SEBI Circular No. CIR/CFD/ CMD1/27/2019 dated February 8 2019 and in orderto avoid duplication SEBI has allowed companies to use the same Form No. MR-3 as requiredunder the Act and the rules made thereunder for the purpose of compliance with Regulation24A of the Listing Regulations as well. Accordingly your Company in compliance with thesaid SEBI Circular has used the same Form No. MR-3 as prescribed under the Act and therules made 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 andAudits) Rules 2014 as amended the Board of Directors of your Company on recommendationof the Audit Committee have re-appointed M/s. R. Nanabhoy & Co. Cost AccountantsMumbai (Registration No. 000010) as the Cost Auditors of your Company to carry out thecost audit of its products covered under the Ministry of Corporate Affairs Order datedJune 30 2014 (as amended on December 31 2014) for the financial year 2022-23. Theremuneration of Cost Auditors has been approved by the Board of Directors on therecommendation of the Audit Committee and the requisite resolution for ratification ofremuneration of Cost Auditors by the members has been set out in the Notice convening the31st Annual General Meeting of your Company.

The re-appointment of M/s. R. Nanabhoy & Co. Cost AccountantsMumbai as the Cost Auditors of your Company is within the prescribed limits of the Act andfree from any disqualifications specified thereunder. Your Company has received theCertificate from the Cost Auditors confirming their independence and relationship on arm'slength basis.

The Cost Audit Report for the financial year ended March 312021issued by M/s. R. Nanabhoy & Co. Cost Auditors in respect of the various productsprescribed under Cost Audit Rules does not contain any qualification(s) reservation(s) oradverse remark(s) and the same was filed with the Ministry of Corporate Affairs on August18 2021. The Cost Audit Report for the financial year ended March 312022 will be filedwith the Ministry of Corporate Affairs within the prescribed statutory time limit.

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS

The details of Loans Guarantees and Investments as prescribed underSection 186 of the Act are appended as "Annexure - D" and forms integralpart of this report.

RELATED PARTY TRANSACTIONS

Pursuant to Section 134 of the Act read with Rule 8(2) of the Companies(Accounts) Rules 2014 the particulars of contracts or arrangements with related partiesreferred to in Section 188(1) of the Act in the prescribed Form AOC-2 is appended as"Annexure - E" to this Report. During the year under Review your Companyhad entered into contract(s)/arrangement(s)/transaction(s) with related parties which werein ordinary course of business and on arm's length basis and none of which could beconsidered as material in accordance with the policy of your Company on materiality ofrelated party transactions. Further none of the contract(s)/arrangement(s)/transaction(s) with related parties required approval of members as thesame were within the limits prescribed under Section 188(1) of the Act and the Rulesframed thereunder read with the provisions of Regulation 23(4) of the Listing Regulations.

The Policy on materiality of related party transactions and dealingwith related party transactions as approved by the Board may be accessed from yourCompany's website at the link:

https://www.jyothylabs.com/investor/management-policies-notices/#Management-Policies

Attention of Members is also drawn to Note 33 to the financialstatements for the year ended March 31 2022 which sets out the related party disclosuresas per the Indian Accounting Standard (Ind AS) 24.

STATE OF THE COMPANY'S AFFAIRS (MANAGEMENT DISCUSSION AND ANALYSIS)

In terms of the provisions of Regulation 34(2) of the ListingRegulations the Management Discussion and Analysis Report of your Company's affairs forthe year under review is attached and forms an integral part of this Annual Report.

TRANSFER TO RESERVES

Your Company did not transfer any sum to the General Reserve or to theDebenture Redemption Reserve for the Financial Year under review.

MATERIAL CHANGES AND COMMITMENTS

Except as disclosed elsewhere in this report no material changes andcommitments which could affect your Company's financial position have occurred between theend of the financial year 2021 -22 and to the date of this report.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO

The particulars relating to conservation of energy technologyabsorption foreign exchange earnings and outgo as required to be disclosed under Section134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules 2014 are annexedherewith as "Annexure - F" to this report.

RISK MANAGEMENT

The Board of Directors of your Company at its meeting held on July 292021 appointed Mr. Nilesh B. Mehta Independent Director of your Company as the Chairmanof the Risk Management Committee with effect from July 29 2021. Mr. K. Ullas Kamath hasceased to be the Director of your Company with effect from the closing hours of January22 2022 and accordingly has also ceased to be the member/chairperson of the RiskManagement Committee with effect from the closing hours of January 22 2022.

Accordingly the Risk Management Committee comprises of the followingDirectors/Executives of your Company as Members of the Committee as on March 31 2022:

1. Mr. Nilesh B. Mehta Independent Director - Chairman;

2. Ms. M. R. Jyothy Managing Director- Member;

3. Ms. M. R. Deepthi Whole-time Director - Member;

4. Mr. T. Ananth Rao Head - Operations & Commercial - Member; and

5. Mr. Ravi Razdan Head - Systems & HR- Member.

The Risk Management Committee has been entrusted with the powers suchas monitoring and reviewing of the risk management plans/policies; appointing variousfunctionaries; deciding the role and responsibilities of various functionaries; evaluatingrisk including cyber risk to your Company as a whole and also control measures/ security;such other powers as may be delegated by the Board of Directors from time to time. TheRisk Management Committee of your Company met twice during the Financial Year 2021-22 i.e.on September 21 2021 and March 3 2022. Mr. Nilesh B. Mehta was appointed as theChairperson to chair the said meetings of the Risk Management Committee.

The Board of Directors of your Company has designed a Risk ManagementPolicy in a structured manner taking into consideration the following factors and the sameis being monitored on a periodic basis by your Company:

1. The Management Approach;

2. Vision & Mission;

3. Key Business Goals;

4. Risk Library; and

5. Risk Management Focus.

Also the Management has adopted the following 5 step approach keepingin view your Company's Vision and Mission:

1. Identifying 'Key' Business goals;

2. Identifying the Risk Management focus;

3. Identifying Business risks;

 

4. Prioritizing the identified business risks; and

5. Rating the current risk management capability for identified risks.

Further your Company has identified Key Business Goals for a five yearhorizon and a library of risk events which could be bottleneck in achieving the same.After defining the key business goals and the library of risk events your Companyidentified the goals on which the management would focus.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company has been a firm believer that each and every individualincluding an artificial person owe something to the society at large. Mr. M. P.Ramachandran Chairman Emeritus of your Company even before the inception of CorporateSocial Responsibility provisions under the Act has been involved in charitable and socialactivities in his individual capacity.

Your Company for the financial year 2021-22 was required to spend anamount of ' 410.15 Lacs (2% of the average net profits of last threefinancial years) towards Corporate Social Responsibility (CSR) activities. However yourCompany for the financial year 2021-22 has spent an aggregate amount of '274.82 Lacs towards the CSR activities mentioned in the Annual Action Plan of the Companyfor the financial year 2021 -22 approved by the Board of Directors. Further aftersetting off the excess amount of ' 9.67 Lacs spent in the financial year2020-21 the balance unspent CSR amount for the Financial Year 2021-22 works out to '125.66 Lacs.

Accordingly pursuant to the provisions of Section 135(6) of the Actand based on the recommendation of the CSR Committee the Board of Directors of yourCompany approved opening of a special account in the name and style of "JyothyLabs Limited - Unspent Corporate Social Responsibility Account 2021-22" andtransferred the balance unspent amount of ' 126 Lacs which is in excess ofthe balance unspent amount of ' 125.66 Lacs to the aforesaid Bank Accounton April 27 2022.

Further your Company has received request from existing projectssupported by your Company for CSR funding to their on-going projects. Accordingly theunspent amount will be utilized during the mandatory period of 3 years from the date oftransfer.

The Annual Report on CSR activities that includes details about briefoutline on CSR Policy developed and implemented by your Company Composition of CSRCommittee and CSR initiatives taken during the financial year 2021-22 in accordance withSection 135 of the Act and other details required to be disclosed as per the latest formatprescribed under the Companies (Corporate Social Responsibility Policy) Rules 2014 asamended by the Companies (Corporate Social Responsibility Policy) Amendment Rules 2021dated January 22 2021 is annexed herewith as "Annexure - G" to thisReport.

Details about the CSR Policy adopted and formulated by your Company canbe accessed from your Company's website at the link:

https://www.jyothylabs.com/investor/management-policies-notices/#Management-Policies

The Annual action plan for the financial year 2022-23 as recommended bythe Corporate Social Responsibility Committee and approved by the Board of Directors ofyour Company at their respective Meetings held on May 24 2022 has also been uploaded onyour Company's website at the link:

https://www.jyothylabs.com/wp-content/uploads/2022/05/CSR-Annual-Action-Plan-2022-23.pdf

CHANGE IN NATURE OF BUSINESS

During the year under review there was no change in the nature ofbusiness of your Company.

PERFORMANCE OF SUBSIDIARIES ASSOCIATE COMPANIES/JOINT VENTURES

A statement containing the salient features of the financial statementsof your Company's subsidiaries Associates and Joint Venture Companies in the prescribedformat AOC-1 is presented in separate section forming part of the financial statements andhence not repeated here in this Report for the sake of brevity. Policy for determiningmaterial subsidiaries formulated and adopted by your Company can be accessed from yourCompany's website at the link:

https://www.jyothylabs.com/investor/management-policies-notices/#Management-Policies

No Company has become or ceased to be your Company's subsidiary jointventure or associate company during the financial year 2021-22 except cessation of itsstep- down subsidiaries as per the information provided herein below:

Based on the Joint Petition filed by the Subsidiary of your Companyviz. Jyothy Fabricare Services Limited (JFSL) [the Transferee Company] along with JFSL'sWholly 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 JFSL (the Transferee Company) vide their orderdated February 16 2021. Further during the year under review the Hon'ble bench ofNational Company Law Tribunal Bengaluru had also allowed the Scheme of Amalgamation ofSnoways Laundrers & Drycleaners Private Limited (First Transferor Company) and FourSeasons Drycleaning Company Private Limited (Second Transferor Company) with JFSL (theTransferee Company) and had granted their final order on December 8 2021.

FIXED DEPOSITS

Your Company did not accept/renew any fixed deposits from public and nofixed deposits were outstanding or remained unclaimed as on March 31 2022.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by anyRegulator/Court that would impact the going concern status of your Company and its futureoperations.

INTERNAL FINANCIAL CONTROLS

The Internal Financial Controls adopted and followed by your Companyare adequate and are operating effectively. Your Company has adopted a dynamic InternalFinancial Controls framework based on the best practices followed in the industry. Underthe said framework Risk and Control Matrix are defined for the following process(es):-

1. Fixed Assets;

2. Financial Statement Closing Process;

3. Information Technology;

4. Inventory Management;

5. Marketing and Advertising;

6. Payroll;

7. Production Process;

8. Taxation; and

9. Treasury.

M/s. MGB Advisors Pvt. Ltd. Chartered Accountants have been entrustedwith the responsibility of testing the controls identified and implemented by your Companyfor all the aforesaid processes.

During the year under review no material or serious observations havebeen received from the Internal Auditors of your Company regarding inefficiency orinadequacy of such controls.

CONSOLIDATED ACCOUNTS

The consolidated financial statements of your Company are prepared inaccordance with the relevant Indian Accounting Standards issued by the Central Governmentunder Section 133 of the Act and forms integral part of the Annual Report.

CORPORATE GOVERNANCE

The report on Corporate Governance as stipulated under Regulation 34(3)read with Schedule V of the Listing

Regulations together with the Certificate received from M/s. Rathi& Associates Practicing Company 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 ListingRegulations the Business Responsibility Reports are applicable to top 500 listedcompanies based on market capitalization. Further SEBI vide its notification datedDecember 26 2019 notified the provisions of the SEBI (Listing Obligations and DisclosureRequirements) (Fifth Amendment) Regulations 2019 and has extended the applicability totop 1000 listed companies based on market capitalization.

Your Company being one of the top 500 listed companies is required toreport on Business Responsibility. Accordingly the report on Business Responsibilityforms an integral part of this report.

COMPLIANCE WITH SECRETARIAL STANDARDS

During the year under review your Company has complied with theSecretarial Standards issued by the Institute of Company Secretaries of India on BoardMeetings and General Meetings.

REMUNERATION/COMMISSION FROM ANY OF ITS SUBSIDIARIES

During the year under review neither the Managing Directors nor theWhole-time Director of your Company received any remuneration or commission from any ofits subsidiaries.

EMPLOYEE STOCK OPTION SCHEME (ESOS)

During the financial year under review no options were granted vestedor exercised and hence the disclosure as required under Section 62(1)(b) of the Act readwith Rule 12(9) of the Companies (Share Capital and Debenture) Rules 2014 and Regulation14 of the Securities Exchange Board of India (Share Based Employee Benefits) Regulations2014 is not required to be furnished.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

Your Company has a Vigil Mechanism in place which includes a WhistleBlower Policy in terms of the Listing Regulations for Directors and Employees of yourCompany to provide a mechanism which ensures adequate safeguards to Employees andDirectors from any victimization on raising of concerns of any violations of legal orregulatory requirements incorrect or misrepresentation of any financial statements andreports etc.

The Vigil Mechanism/Whistle Blower Policy of your Company can beaccessed from your Company's website at the link:

https://www.jyothylabs.com/investor/management-policies-notices/#Management-Policies

Your Company has put in place a mechanism in consonance with therequirements of Section 177 of the Act and Regulation 18(3) of the Listing Regulations forthe Directors employees and other stakeholders to report genuine concerns about unethicalbehavior actual or suspected fraud or violation of the Code of Conduct or policy framedby your Company. All Protected Disclosures can be reported by the Whistle Blower inwriting or through call on the following number i.e. 18601232120 or Hotline numberi.e. 022-66892804 or alternatively the same can also be sent through email onwhistleblower@ jyothy.com with the subject "Protected disclosure under the WhistleBlower Policy".

The Whistle Blowers have a right/option to report their concerns aboutunethical behaviour actual or suspected fraud or violation of the Codes of Conduct orpolicy directly 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 inplace for effective and smooth conduct of business and to meet exigencies of operation andgrowth. Your Company has set up Standard Operating Process (SOP) procedures and controlsapart from regular Internal Audits. Roles and responsibilities have been laid down foreach process 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 CharteredAccountants viz. M/s. Mahajan & Aibara Chartered Accountants LLP. Internal Auditorsregularly check the adequacy of the system their observations are reviewed by themanagement and remedial measures as necessary are taken. Internal Auditors reportdirectly to the Chairman of the Audit Committee to maintain its objectivity andindependence.

Your Company ensure compliance of all applicable laws through aCompliance Tool software mechanism viz. "Legatrix" designed by Legasis ServicesPrivate Limited which ensures compliance with the provisions of all applicable laws toyour 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 theInvestor Education and Protection Fund Authority (Accounting Audit Transfer and Refund)Rules 2016 notified by the Ministry of Corporate Affairs on September 7 2016 andsubsequently amended vide notification dated February 28 2017 all the equityshares of any Company in respect of which dividend amounts have not been paid or claimedby the shareholders for seven consecutive years or more are required to be transferred todemat account of the Investor Education and Protection Fund Authority (IEPF Account).

Accordingly 19918 shares of 480 members of your Company weretransferred to Demat Account of IEPF Authority on October 7 2021. Your Company had sentindividual notice to all the aforesaid members and has also published the notice in theleading English and Marathi newspapers. The details of the aforesaid members are availableon website of your Company i.e. www.jyothylabs.com.

Transfer of Unpaid/Unclaimed Dividend:

Further pursuant to the provisions of Section 124(5) of the Act thedividend which remained unclaimed/ unpaid for a period of seven years from the date oftransfer to unpaid dividend account is required to be transferred to the InvestorEducation and Protection Fund (IEPF) established by the Central Government.

As a result the unclaimed/unpaid dividend pertaining to the financialyear 2013-14 which remained unpaid and unclaimed for a period of 7 years has beentransferred by your Company to the IEPF.

Your Company has uploaded the details of unclaimed/ unpaid dividend forthe financial year 2013-14 onwards on its website i.e. www.jyothylabs.com and on websiteof the Ministry of Corporate Affairs i.e. www.mca.gov. in and the same getsrevised/updated from time to time pursuant to the provisions of IEPF (Uploading ofInformation Regarding Unpaid and Unclaimed Amount Lying with Companies) Rules 2012.

Further the unpaid final dividend amount pertaining to the financialyear 2014-15 will be transferred to IEPF during the Financial Year 2022-23.

EMPLOYEE RELATIONS

Your Company has always provided a congenial atmosphere for work to allits employees that is free from discrimination and harassment. Employee relations remainedcordial during the year under review.

MANUFACTURING FACILITIES

Your Company has state-of-the-art facilities at all of itsmanufacturing locations spread across India. Furthermore six manufacturing plants of yourCompany situated at Roorkee Wayanad Jammu Pithampur Puducherry and Baddi are ISO 9001-2015 certified.

PREVENTION OF SEXUAL HARASSMENT

Your Company has framed 'Anti - Sexual Harassment Policy' at workplaceand has constituted an Internal Complaints Committee (ICC) as per the requirement ofSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013and the Rules framed thereunder. No complaints with allegations of any sexual harassmentwere reported during the year under review.

PARTICULARS OF EMPLOYEES

The disclosures pertaining to remuneration and other details asrequired under Section 197(12) of the Act read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 as amended and formingpart of the Directors' Report for the year ended March 31 2022 is annexed herewith as "Annexure- H" to this Report.

DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THEINSOLVENCY AND BANKRUPTCY CODE 2016 (31 OF 2016)

Your Company on December 21 2020 filed an application before theRegistrar National Company Law Tribunal Chennai Bench (NCLT) as a financial creditor toinitiate corporate insolvency resolution process under Section 7 read with Chapter II ofPart II/ Under Chapter IV of Part II of the Insolvency and Bankruptcy Code 2016 (Code)against Abhiraami Chemicals Limited (ACL). During the year under review vide order datedOctober 04 2021 the NCLT admitted the petition in terms of Section 7 of the Code.

In view of fact that Abhiraami Chemicals Limited does not have anyoperation since the Financial Year 2015-16 and has zero revenue from operations since theyear 2015-16 the Committee of Creditors (CoC) vide its meeting held on November 26 2021recommended and approved liquidation of the Abhiraami Chemicals Limited and resolutionprofessional has been appointed as liquidator. The Liquidator has filed the applicationfor liquidation of Abhiraami Chemicals Limited under Section 33 of the Code with NCLTChennai on March 01 2022 and the matter is pending before the NCLT Chennai.

CAUTIONARY NOTE

Certain statements in the "Management Discussion andAnalysis" section may be 'forward-looking'. Such 'forward looking' statements aresubject to risks and uncertainties and therefore actual results could be different fromwhat your Directors envisage in terms of future performance and outlook.

ACKNOWLEDGEMENT

Your Directors express their sincere appreciation for the contributionand commitment of the employees of your Company at all levels and for the excellentsupport provided by the members customers distributors suppliers bankers media andother stakeholders during the financial year under review. Your Company looks forward tocontinued and unstinted support in its endeavor to make lives of consumers better byproviding world class products at affordable price.

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