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Jayant Agro-Organics

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Directors Report Year End : Mar '18    Mar 17

The Directors are pleased to present the Twenty-Sixth Annual Report for the financial year ended March 31, 2018 along with the Audited Financial Statement and the Auditor''s Report thereon.

1. Financial Results: (Rs. in Lakhs)

Particulars

Standalone

Consolidated

2017-18

2016-17

2017-18

2016-17

Revenue from operations and other income

78,563.47

66,625.87

255,710.75

167,207.38

Profit before Depreciation & Amortisation Expenses, Finance Costs, Share of Net Profits/(Loss) of Investments and Tax

9,376.28

8,786.53

15,090.19

12,850.82

Less: Depreciation, and Amortisation Expenses

783.25

780.00

1,084.26

1,067.25

Profit before Finance cost, Share of Net Profits/(Loss) of Investments and Tax

8,593.03

8,006.53

14,005.93

11,783.57

Less: Finance Cost

2,240.77

1,248.47

5,424.23

3,180.32

Profit before Share of Net Profit/(Loss) of Investments and Tax

6,352.26

6,758.06

8,581.70

8,603.25

Add: Share of net Profit/(Loss) of Joint Venture

-

-

23.42

(4.24)

Profit Before Tax

6,352.26

6,758.06

8,605.11

8,599.01

Less: Provision for Tax

2,109.58

2,202.18

2,896.85

2,859.65

Add: MAT Credit Entitlement of earlier years

-

43.70

-

55.21

Profit for the year

4,242.68

4,599.58

5,708.27

5,794.57

Add/(Less): Other Comprehensive Income (OCI)

(555.35)

291.44

(917.32)

278.07

Total Comprehensive Income for the year

3,687.33

4,891.01

4,790.95

6,072.64

Less: Total Comprehensive Income for the year attributable to Non-Controlling Interest

-

-

271.50

297.85

Total Comprehensive Income for the year attributable to Owners of the Company

-

-

4,519.45

5,774.79

Add: Profit brought forward from the previous year including OCI

16,821.93

13,925.91

18,954.59

15,334.86

Profit available for appropriation, which is appropriated as follows:

20,509.26

18,816.92

23,474.04

21,109.65

Appropriations:

Interim Dividend

195.00

1,125.00

195.00

1,258.00

Final Dividend

187.50

562.50

187.50

562.50

Dividend Distribution Tax

77.87

307.49

77.87

334.56

Closing Balance including OCI

20,048.89

16,821.93

23,013.67

18,954.59

Earnings per share(EPS) (Face Value of shares Rs.5/-)

14.14

15.33

17.82

18.31

*After adjusting for bonus issue in ratio of 1:1

Pursuant to the provisions of section 133 of the Companies Act, 2013, the Financial Statements for the current financial year is prepared in accordance with the Indian Accounting Standards (IndAS) and for the sake of comparison, the previous financial year figures have been reinstated as per the IndAS.

2. Overview of Financial Performance:

The Annual Report also includes the Consolidated Financial Statements of the Company, which include the results of the Company''s subsidiaries; viz. Ihsedu Agrochem Private Limited, Ihsedu Itoh Green Chemicals Marketing Private Limited and Ihsedu Coreagri Services Private Limited and its share in the Associate Company, Vithal Castor Polyols Private Limited. The Standalone Financial results for the year show a Total Income of Rs.78,563.47 Lakhs compared to Rs.66,625.87 Lakhs and standalone Net Profit after tax of Rs.4,242.68 Lakhs as compared to Rs.4,599.58 Lakhs in the previous year and the Consolidated Financial results for the year show Total Income of Rs.2,55,710.75 Lakhs compared to Rs.1,67,207.38 Lakhs and Consolidated Net Profit after tax of Rs.5,708.27 Lakhs compared to Rs.5,794.57 Lakhs in the previous year.

3. Dividend & Reserves:

During the year under review an interim dividend of Rs.0.65 (i.e. 13% post bonus), each per share on 30,000,000 equity share of Rs.5/- each was paid by the Board of Directors of the Company. The Board of Directors are now pleased to recommend a final dividend of Rs.1.35 (i.e. 27%) per share on the paid up equity share capital of the Company, for consideration and approval of the shareholders at the annual general meeting. With this, the total dividend for the entire year sums out to Rs.2.00 per equity share of Rs.. 5/- each i.e. (40%) on enhanced paid-up equity share capital post issue of bonus share in ratio of 1:1. The equity dividend outgo for the Financial Year 2017-18, inclusive of tax on distributed profits would be upto Rs.723.00 lakhs.

Your Directors do not propose to transfer any amount to the General Reserve for the financial year ended March 31, 2018

4. Change in Nature of Business:

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

5. Bonus Issue of Shares and Share Capital:

During the year under review, the shareholders of the Company were rewarded with Bonus Shares in the proportion of 1 (one) new Equity Share of Rs.5/- (Rupees five) each fully paid up for every 1 (one) existing Equity Share of Rs.5/- (Rupees five) each of the Company held by the members as on August 2, 2017 (i.e. Record Date) which was approved by the members through Postal Ballot. The Bonus shares were allotted on August 3, 2017 and were listed on the stock exchanges w.e.f August 11, 2017. Subsequent to the issue of Bonus Shares, the Paid up share capital of the Company stands increased to ^15,00,00,000 dividend into 3,00,00,000 equity share of Rs.5/- each fully paid-up There was no change in authorised share capital of company during the year under review.

6. Credit Rating:

The Credit Rating of the Company for Long Term Debt and Short Debt is Crisil A-/ Stable and Crisil A2 respectively rated by CRISIL Limited.

7. State of Company’s Affair:

In order to avoid duplication and for the sake of better understanding, the State of Company''s Affairs is explained in detail in the section, Management Discussions and Analysis which has been included in this section of the directors report.

8. Listing of Shares:

The Company''s equity shares are actively traded on BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE). Further, the applicable listing fees for the financial year 2018-19 has been paid to the respective Stock Exchange(s).

9. Management''s Discussion and Analysis:

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

The demand for castor oil products saw a decent growth. India''s exports of castor oil reached an all-time high of Approx 6.4 lakhs Mt. Despite of a lower than normal crop the carry forward of the previous year''s supply ensured smooth supply of castor oil. The market remained volatile with the first half seeing firm prices in anticipation of shortages expected on account of a lower crop, the carry forward of the previous year ensured continuity of supply throughout the year resulting in subdued prices in the second half of the year.

Although the demand for sebacic acid was better than in 2016-17, the sebacic acid market remained more competitive with renewed participation from the Chinese manufacturers. China continues to dominate the sebacic acid industry Your company continues to make effort to improve its capacity utilization and gain a foothold in an industry dominated by China.

Your company has invested in an Indo-Japanese-Korean joint venture, Vithal Castor Polyols Pvt. Ltd. (VCP). VCP''s products directly compete with petroleum based polyols due to which it is facing challenges in capacity utilization and will result in a longer gestation period for the investment. The current surge in the prices of petroleum products is likely to have a positive impact on the demand for VCP''s products. Further, the company is also realigning its product mix to adjust to the market conditions.

The late rainfall in the castor growing region of Gujarat resulted in a surge in the sowing area towards the end of the sowing season. This resulted in boosting the estimates of the crop to over 1.4 million tons against the crop estimates of about 1 million tons for the year 2017. With the estimates of carry forward of 300,000 Mt being lower than the revised estimates of the carry forward stocks of 900,000 Mt the industry will need to keep a close watch on the availability of the seeds as the demand supply equation is likely to be more balanced.

Your company believes that ample availability of castor seeds at stable and competitive prices will be essential for the future growth of the industry. We are confident that like in the past the Indian farmers will rise to the challenges to meet the global requirements for castor seeds.

The demand for castor oil based products continues to see a stable growth across the world with China resuming its growth in consumption. In the current scenario India should be able to satisfy the world demand. Your company will be keeping a close watch on the monsoon and sowing data.

(b) Opportunities & Threats:

With more than 80% of your Company''s production being exported, the state of the world economy, besides other industrial and scientific developments has an important bearing on its growth.

Your company''s products are competing with end products manufactured from crude oil and other vegetable oils. The price behavior of castor oil in relation to them is likely to have a bearing on the growth of the company.

Environment being a major concern, the search for green products is likely to intensify in the future. Castor Oil being a natural, organic, renewable and bio-degradable product is gaining importance as a green product. With improved irrigation, better quality inputs and scientific farming there is a substantial scope to improve yields per hectare of castor seeds. Besides due to its unique chemical structure, it finds myriad applications in virtually every industry be it agriculture, lubricants, paints, inks, surface coatings, pharmaceuticals, food, engineering plastics, cosmetics, perfumeries, electricals, rubber and so on. Your company continues to endeavor to tap these opportunities by focusing on Research & Development and investing in new capacities, new technologies, new applications, and new products.

Castor Seeds continue to be a volatile raw material in terms of its price and is prone to speculation. Being a shallow commodity speculation could lead to extraordinary swing in prices, specially with the wider platform being provided by the listing on National Commodity and Derivatives Exchange (NCDEX). SEBI is keeping an vigilant and watchful eye to ensure an orderly market. Being an agricultural product, it depends on the rainfall and weather conditions prevailing in the area of castor growing States in the country though it is a sturdy crop. The limited size of the crop makes it susceptible to speculation and wild gyration in prices. To mitigate the effect of uncertain weather, the Company has laid down parameters for inventory management. The Company has proper mechanism in place to immediately respond to any unforeseen eventualities. The Company is also cultivating hybrid seeds to improve the productivity of commercial Castor Seeds.

Your company has through, Kalyan Foundation, an trust with whom your company is associated along with its subsidiary, Ihsedu Agrochem Pvt. Ltd, in conjunction with progressive farmers developed model farms for the education and development of the castor industry wherein the farms have achieved a yield of over 6 tons and hectare 3 to 4 times the average yields. It is both the vision and the mission of your company to carry this productivity potential developed at our agricultural universities to performance on our field making castor seeds farming sustainable and profitable for the farmers.

(c) Segment:

The Company is organised into three business segments

- Castor Oil, Derivatives and Power Generation.

(d) Outlook:

The long term demand outlook for your Company''s products remains positive although the near term uncertainties remain due to the low crude oil prices. Emphasis on green eco-friendly products is likely to lead to increase in innovation of new products and uses of castor oil by the chemical industry.

Your Company continues to invest in Research & Development to tap on new growth opportunities. Your Company is also undertaking a backward integration program in order to increase the availability of castor seeds. Barring unforeseen circumstances, your Directors expect satisfactory growth.

(e) Risks and Concerns:

The Company''s products are used across geographies in a variety of industries, thereby to a great extent, mitigating the risks associated with demand for its products on a long-term basis. The price behavior of raw material depends on the weather pattern in the castor growing regions, the impact of El Nino on monsoon in these regions, global demand and inventory, and prices of other oils including Crude Oil and therefore can be volatile as well as unpredictable. The Company is closely watching the development of factors affecting the castor seed prices.

The Company restricts its exposure to the price fluctuation of raw materials by limiting its unhedged exposure.

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

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

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

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

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

Your Company has a contingent liability of Rs.402.54 Lakhs as on March 31, 2018. Attention of the shareholders is drawn to the explanations mentioned in note no. 36 of the Notes to Financial statements forming integral part of the balance sheet as on March 31, 2018. In view of the present status and based on legal advice received, your Board of Directors are of the opinion that no provision is required to be made against these contingent liabilities as of now.

Forward Looking Statement:

This report contains forward looking statements that are based on our current expectations, assumptions, estimates and projections. We have tried, wherever possible to identify such statements by using words such as anticipates, estimates, expects, plans, believes and words of similar substance in connection with any discussion of future performance. Stakeholders are urged to pay careful attention to the risk factors described in this report. One or more of these risks could have an adverse effect on the Company or its group Companies activities, conditions and, financial results. Furthermore, other risks not yet identified or considered as not material by the group could have the same adverse effect. All the forward looking statement included in this report are based on information available to us on the date of issue of this report. The Company do not undertake to update the said statements to reflect the future events or circumstances unless required under the statue.

Awards and Recognition:

Your Company and its subsidiary Ihsedu Agrochem Private Limited were awarded with the Award of Excellency by CHEMEXCIL (Basic Chemicals Pharmaceuticals & Cosmetics Export promotion council) for the outstanding export performance for the year 2016-17. The Company was also awarded with Export Award by Indian Specialty Chemical Manufacturers Association (ISCMA) for the consistency and growth achieved in exports during the year 2016-17.

10. Material changes and commitments affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report:

There has been no material changes occurred subsequent to the close of the financial year of the Company to which the balance sheet relates and the date of the report.

11. Highlights of the Performance/Financial Position of each of subsidiaries/associates/joint venture companies as included in the consolidated financial statements :

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

1. Consolidated Results :

The consolidated turnover of the Company has been Rs.2,55,710.75 Lakhs against Rs.1,67,207.38 Lakhs in the previous year. The EBDITA was Rs.15,113.60 Lakhs current year and Rs.12,846.58 Lakhs for the previous year.

2. Derivatives:

The turnover of the derivatives has been Rs.77,157.01 Lakhs against Rs.65,037.15 Lakhs in the previous year. The EBDITA has increased to Rs.8,898.66 Lakhs to Rs.8,354.02 Lakhs.

3. Castor Oil:

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

4. Power:

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

The performance of the power segment has been steady with the EBIDTA at Rs.199.84 Lakhs

Your directors are pleased to announce that nearly 34% of the electricity at its Ranoli unit and 10% of its power requirement at its crushing plant in Jagana, Palanpur is met by green energy produced from the wind mills.

We would also like to state that more than 95% of its steam requirement is met by using its own product Deoiled Cake, making your company an environment friendly manufacturer of environment friendly products.

Subsidiary Companies:

Ihsedu Agrochem Pvt Ltd (IAPL):

During the year under review, the IAPL a material subsidiary of the Company achieved a turnover of Rs.196,456.05 Lakhs as compared to Rs.114,872.09 Lakhs in the previous year. The Profit after tax stood at Rs.1,434.14 Lakhs as against profit of Rs.1,191.45Lakhs in the previous year.

Ihsedu Coreagri Services Pvt Ltd (ICAS):

During the year under review, the ICAS a subsidiary of the Company incurred loss of Rs.3.31 Lakhs as against Loss of Rs.3.47 Lakhs in the previous year

Ihsedu Itoh Green Chemicals Marketing Pvt. Ltd (IIGCM):

During the year under review, the IIGCM achieved a total revenue of Rs.23.66 Lakhs as compared to Rs.24.25 Lakhs in the previous year. The profit after tax was Rs.11.34 Lakhs against profit after tax of Rs.11.26 Lakhs in the previous year

Associate Company:

Vithal Castor Polyols Pvt Ltd (VCP):

VCP is an Indo - Japanese - Korean Joint Venture Company, and your company owns 50% equity shares. VCP''s products directly compete with petroleum based polyols due to which it is facing challenges in capacity utilization and will result in a longer gestation period for the investment. During the year under review. VCP achieved a turnover of Rs.1021 lakhs as compared to Rs.797 lakhs in the previous year The Profit after tax stood at Rs.46.83 Lakhs as against loss of Rs.8.48 Lakhs in the previous year The Policy on material subsidiary is available on https://www.jayantagro.com The audited accounts of the subsidiary companies are placed on the Company''s website and the same are open for inspection by any member at the Registered Office of the Company on any working day between 10.00 a.m. to 5.00 p.m.

In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared consolidated financial statements of the Company and all its subsidiary and associate companies, which forms part of the Annual Report. A statement containing salient features of the financial statements and other necessary information of the subsidiary companies in the format prescribed under Form AOC-1 is included in the Annual Report.

In accordance with third proviso of Section 136(1) of the Companies Act, 2013, the Annual Report of the Company, containing therein its standalone and the consolidated financial statements has been placed on the website of the Company at wwwjayantagro.com. Further, as per the fourth proviso of the said Section, Financial Statements of each of the subsidiary companies have also been placed on the website of the Company at www. jayantagro.com. Accordingly, the said documents are not being attached to the Annual Report. Shareholders interested in obtaining a copy of the Audited Annua Financial Statements of the subsidiary companies may write to the Company Secretary and Compliance Officer As stipulated in the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulation / LODR), the consolidated financial statements have been prepared by the Company in accordance with the applicable Accounting Standards.

12. Research and Development (R & D):

Our R & D, which is recognised by the Department of Scientific & Industrial Research (DSIR), Government of India, continues its focus on Castor Oil based products for use in wide-range of applications viz. Coatings, Polymers, Sealants, Adhesives, Polyurethane foams, Cosmetics, Lubricants, etc. Some of the recent products developed at R & D and successfully introduced into both, foreign and domestic markets, are products for flooring coatings which are water-based or with zero solvents. These products avoid the drawbacks of conventional products which emit solvents into the environment. Also new esters for use as plasticisers in PVC have been developed and successfully introduced in the market. We expect some more products to be introduced in the very near term for applications as mentioned above. The R & D continuously focusses on the improvement of quality of existing products as also improving the existing production processes

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

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The management monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Periodical reports on the same are presented to the Audit Committee.

14. Deposits:

The Company has not accepted any deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance ofDeposits) Rules, 2014.

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

Particulars of loans given, investments made, guarantees given and securities provided by the Company as on March 31, 2018 are given in the note forming part of the financial statement.

16. Particulars of contracts or arrangements with related parties:

All Related Party Transactions that were entered into during the financial year were on arm''s length basis and in ordinary course of business. There are no materially significant related party transactions made by the Company during the year. All the Related Party Transactions are placed before the Audit Committee and also the Board for approval. A policy on Related Party Transactions is uploaded on the Company''s website and can be accessed through the weblink https://www.jayantagro.com.

Prior Omnibus approvals are granted by the Audit Committee for related party transactions which are of repetitive nature, entered in ordinary course of business and are at arm''s length basis in accordance with the provisions of the Companies Act, 2013 read with the rules made there under and the Listing Regulations.

The particulars of Contracts and Arrangement with related parties referred to in Section 188(1) of the Companies Act, 2013 as prescribed in Form AOC-2 is not applicable.

17. Key Managerial Personnel and Directors:

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

On December 20, 2017, Mr. Abhay V. Udeshi, resigned as the Chairman and Whole-time Director and also ceased to act as Member in various committees of the Company. On account of the said resignation, the Board of Directors appointed Mr. Jayasinh V. Mariwala as the Chairman of the Company with effect from December 20, 2017. Subsequently, on the recommendation of the Nominations and Remuneration Committee, the Board of Directors at their meetings held on February 3, 2018 appointed Mr. Abhay V. Udeshi as an Additional director and designated as Chairman & Whole-Time Director and alsojoined as member of Audit Committee, Stakeholders Relationship Committee and CSR Committees of the Company, effective from February 3, 2018. The Board of Directors expressed its gratitude to Mr. Jayasinh V. Mariwala for being the Chairman of the Company during the said time length. The Board of Directors have further recommended the appointment of Mr Abhay V. Udeshi as Chairman & Whole-time Director for a period of 5 years commencing from February 3, 2018, subject to the approval of the members at the Annual General Meeting. As required under the provisions of the Companies Act, 2013, the Company has received a Notice along with requisite deposit from the member of the Company proposing the candidature of Mr. Abhay V. Udeshi as the Director of the Company.

In accordance with the provisions of section 203 of the Companies Act, 2013, the following are the Key Managerial Personnel (KMP) of the Company

Name of KMP''s

Designation

Mr. Abhay V. Udeshi

Chairman & Whole - Time Director

Mr. Hemant V. Udeshi

Managing Director

Dr. Subhash V. Udeshi

Whole - Time Director

Mr. Varun A. Udeshi

Whole - Time Director

Mr. Vikram V. Udeshi

Chief Financial Officer

Mr. Dinesh M. Kapadia

Company Secretary

As per the provisions of the Companies Act, 2013, Dr. Subhash V. Udeshi retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The Board recommends his re-appointment for consideration of members at the ensuing AGM

As per the SEBI (Listing Obligation & Disclosure Requirement) Amendment Regulation 2018, a NonExecutive director who has attained the age of seventy five years shall be appointed or his directorship be continued only after passing of special resolution by the Company. In view of the same, the Board of Directors, upon the recommendation of the Nomination and Remuneration Committee meeting held on May 30, 2018, proposes the continuity of directorship of Mr. Jayasinh V. Mariwala, Mr. Deepak V. Bhimani and Mr. Vijay Kumar Bhandari, all being Non-Executive & Independent Directors of the Company.

Necessary resolutions for appointment/ reappointment & continuity in appointment of the above mentioned Directors have been included in the notice convening the ensuing AGM and requisite details have been provided in the explanatory statement and annexure to the Notice. Your Directors recommend their appointment / re-appointment and continuity in directorship.

b) Declaration of Independence:

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.

c) Board Evaluation:

Pursuant to the provisions of the Companies Act, 2013 read with the rules made thereunder, Regulation 17(10) of the Listing Regulations and the Circular issued by SEBI dated January 5, 2017 with respect to Guidance Note on Board Evaluation, the evaluation of the Annual Performance of the Directors/ Board/ Committees were carried out for the Financial year 2017-18.

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

d) Policy on Directors'' Appointment and Remuneration:

The Company has devised a Policy for remuneration of Directors, KMPs and other employees. The policy also includes performance evaluation of the Board which includes criteria for performance evaluation of the Independent Directors, Non-Executive Directors and Executive Directors. Policy is also displayed on the Company''s website https://www.jayantagro.com The policy is appended as Annexure I forming part of this report.

e) Familiarisation Programme:

The details of programs for familiarisation of Directors with the Company are put up on the website of the Company https://www.jayantagro.com

f) Number of meetings of the Board of Directors:

During the year the Board of Directors met 5 times. The details of the Board Meeting are provided in the Corporate Governance report forming part of this report.

18. Board Committees:

i) Audit Committee:

During the year under review, the Audit Committee of the Company was reconstituted on February 3, 2018 as Mr. Abhay V. Udeshi was appointed as the member of the Committee. As on March 31, 2018, the Audit Committee of the Company comprises of 5 Directors, 4 of which are Independent Directors. All members of Audit Committee are financially literate The members of the Audit Committee as on March 31, 2018 are as under;-

Mr. Jayasinh V. Mariwala

- Chairman

Mr. Vijaykumar Bhandari

- Member

Mr. Deepak V. Bhimani

- Member

Mr. Mukesh C. Khagram

- Member

Mr. Abhay V. Udeshi

- Member

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

ii) Stakeholder''s Relationship Committee:

During the year under review, the Stakeholder''s Relationship Committee of the Company was reconstituted on February 3, 2018 as Mr. Abhay V. Udeshi was appointed as the member of the CommitteeThe Stakeholder''s Relationship Committee of the Company comprises of 4 Directors, namely;

Mrs. Sucheta N Shah

- Chairperson

Mr. Abhay V. Udeshi

- Member

Mr. Hemant V. Udeshi

- Member

Dr. Subhash V. Udeshi

- Member

iii) Nomination and Remuneration Committee:

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

Mr. Jayasinh V. Mariwala

- Chairman

Mr. Deepak V. Bhimani

- Member

Mr. Mukesh C. Khagram

- Member

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

19. Corporate Social Responsibility (CSR):

CSR Committee:

During the year under review. The CSR Committee of the Company was reconstituted on February 3, 2018 as Mr. Abhay V. Udeshi was appointed as the member of the Committee. Mr. Deepak V. Bhimani is the Chairman of the Committee and Mr. Abhay V. Udeshi and Mr. Hemant V. Udeshi are the other members of the Committee.

CSR Policy:

The Board of Directors, based on the recommendations of the CSR Committee, formulated a CSR Policy encompassing the Company''s philosophy for describing its responsibility as a Corporate citizen, laying down the guidelines and mechanisms for undertaking socially relevant programmes for welfare and sustainable development of the community at large. CSR Policy is available on web link https://www.jayantagro.com

Initiative undertaken during the Financial Year 2017-18:

The amount required to be spent on CSR activities during the year under report in accordance with the provisions of Section 135 of the Act wasRs.73 Lakhs and the Company had spent Rs.73.85 Lakhs during the current financial year. The requisite details on CSR activities pursuant to Section 135 of the Act is as per Annexure II appended to this Report.

20. Risk Management Policy:

The Company has a robust Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company''s competitive advantage.

21. Auditors:

i) Statutory Auditors:

At the 25th Annual General Meeting held on August 9, 2017 M/s. Vatsaraj & Co., Chartered Accountants, Mumbai (Firm''s Registration no. 111327W) were appointed as Statutory Auditors ofthe Company to hold office from the conclusion of the 25th Annual General Meeting until the conclusion of the 30th Annual General Meeting to be held in year 2022, subject to ratification by the Members at every Annual General Meeting on such remuneration as may be fixed by the Board in consultation with the Auditors, apart from reimbursement of out of pocket expenses as may be incurred by them for the purpose of audit.

Auditors Report:

The Report given by M/s. Vatsaraj & Co., Statutory Auditors on the financial statements of the Company for the year 2017-18 is part of the Annual Report. There has been no qualification, reservation or adverse remark or disclaimer in their Report.

ii) Cost Auditor:

As per the requirements of Section 148 of the Act, read with The Companies (Cost Records and Audit) Rules, 2014, the Audit of the Cost Accounts relating to Chemical products is being carried out every year The Board of Directors have, based on the recommendation of the Audit Committee, appointed M/s. Kishore Bhatia & Associates, Cost Accountants, Mumbai (FRN 00294) to audit the cost accounts of the Company for the financial year 2018-19 from April 1, 2018 to March 31, 2019 on a remuneration as may fixed by the Board in consultation with Cost Auditor. As required under the Act, necessary resolution seeking member''s ratification for the remuneration payable to M/s. Kishore Bhatia & Associates is included in the Notice convening the 26th Annual General Meeting. The Cost Audit Report for financial year 2016-17 was filed within the due date and report for Financial Year 2017-18 will be filed prescribed timeline.

iii) Internal Auditor :

Pursuant to the provisions of section 138 of the Companies Act, 2013 read with the rules made thereunder, M/s. K. C. Mehta & Co. (Chartered Accountant) conducted the Internal Audit of the Company for the financial year 2017-18. The Audit Committee at its meeting held on May 5, 2018 recommended to the Board the appointment of M/s. T P Ostwal & Associates LLP (Chartered Accountant) as the Internal Auditor of the Company for financial year 2018-19 in place ofM/s. K. C. Mehta & Co. The said proposal for appointment of M/s. T P Ostwal & Associates LLP as the Internal Auditor of the Company was approved by the Board of Directors at its meeting held on the same day.

iv) Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s. V V Chakradeo & Co., Company Secretaries (C.P No. 1705), to conduct Secretarial Audit for the financial year ended March 31, 2018.

The Secretarial Audit Report for the financial year ended March 31, 2018 issued by M/s. V V Chakradeo & Co., Company Secretaries forms part of this report and is appended as Annexure III

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

22. Reporting of Frauds by Auditors:

During the year under review, the Statutory Auditor, Cost Auditor and Secretarial Auditor have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under section 143(12) of the Companies Act, 2013.

23. Extract of the Annual Return:

Pursuant to section 134(3)(a) and section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return as on March 31, 2018 in Form No. MGT-9 is appended as Annexure IV of this report.

24. Conservation of energy, technology absorption, foreign exchange earnings and outgo:

The particulars of the conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, is appended as Annexure V to this Report.

25. Details of establishment of Vigil Mechanism for directors and employees:

Pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013 and as required underListing Regulations, the Company has established a vigil mechanism for directors and employees to report genuine concerns. The details of the Whistle Blower Policy is available in the Corporate Governance report annexed to this report. The Whistle Blower Policy is also uploaded on the website. (https://www.jayantagro.com).

26. Particulars of Employees

The company has 378 employees as on March 31, 2018. In accordance with the provisions of Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement containing the disclosures pertaining to remuneration and other details as required under the Act and the above Rules are provided in the Annual Report. The disclosures as specified under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, have been appended to this Report as Annexure VI.

As per the provisions of Section 136(1) of the Act, the reports and accounts are being sent to all the Members of the Company. Details as required pursuant to Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are available for inspection by Members at the registered office of the Company between 10.00 a.m. to 5.00 p.m. on any working day (Monday to Friday), up to the date of the 26th Annual General Meeting. Any Member interested in obtaining such information may write to the Company Secretary and the same will be furnished on such request.

27. Corporate Governance Certificate:

As per Regulation 34 (3) read with Schedule V of SEBI (Listing Obligation and Disclosure Requirements), Regulations 2015, a separate section on Corporate Governance practices followed by the Company together with a Certificate from Company''s Statutory Auditor, M/s. Vatsaraj & Co., Chartered Accountants, Mumbai confirming compliance forms an integral part of this report.

28. Directors'' Responsibility Statement:

Based on internal financial control framework put in place by the Company reviews performed by the management, reports provided by the internal, statutory cost and secretarial auditors as well as external agencies as and when required, the Board is of the opinion that the Company observed adequate and effective financial controls during the reporting period.

Pursuant to clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability confirm that-

(a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for that period;

(c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions ofthis Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

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

(e) The Directors had laid down internal financial controls (as required by explanation to section 134 (5)(e) of the Companies Act, 2013) be followed by the company and that such internal financial controls are adequate and are operating effectively and

(f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

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

There has been no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company''s operations in future

30. Unclaimed Dividend:

The Company is required to transfer the amount of dividend remaining unclaimed for a period of seven years from the date of transfer to the unpaid divided account to the Investor Education and Protection Fund (IEPF). The shareholders are requested to claim the dividend from the Company before transfer to IEPF. The unclaimed dividend amount, as on March 31, 2018 are as under-

Financial

Year

Type

Unclaimed Dividend Amount as on 31-3-2018 (Rs. in Lakhs)

Due date for transfer to IEPF

2010-2011

Equity

1.53

4-Dec-18

2011-2012

Equity

1.73

2-Dec-19

2012-2013

Equity

2.14

18-Nov-20

2013-2014

Equity(Interim)

2.90

15-May-21

2013-2014

Equity (Final)

0.54

2-Dec-21

2014-2015

Equity

1.18

29-Nov-22

2015-2016

Equity

5.18

19-Nov-23

2016-2017

Equity (1st Interim)

1.70

28-Sep-23

2016-2017

Equity (2nd Interim)

1.60

24-Dec-23

2016-2017

Equity (3rd Interim)

6.31

11-Apr-24

2016-2017

Equity (Final)

0.00

14-Oct-24

2017-2018

Equity(Interim)

1.92

02-Jan-25

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

Pursuant to provision of Section 124 and 125 of the Companies Act, 2013, the unclaimed / unpaid Equity Share Dividend for F Y 2009-10 amounting to Rs.1,33,464/- which remained unclaimed for the period of seven years has been transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Centra Government. Details of Investor Education and Protection Fund provided on Company''s website https://www.jayantagro. com.

32. Transfer ofShares to Investor Education and Protection Fund:

In Accordance with the Investor Education and Protection Fund (IEPF) Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, during the year under review, the Company had transferred 23,970 equity shares of face value of Rs.5 each fully paid up to Investor Education and Protection Fund Account in respect of which dividend remained unclaimed/ unpaid for a period of seven consecutive years or more. Shares which are transferred to the Demat Account of IEPF Authority can be claimed back by the shareholders from IEPF Authority by following the procedure prescribed under the IEPF Rules.

33. Industrial Relations:

The Relations between the Employees and the Management have remained cordial, during the year.

34. Safety and Environment :

Your Company has declared the Safety, Health and Environment Policy and continued their commitments towards safety and environment. The Committee formed for the purpose of safety and environments have continued to educate and motivate the employees on various aspects on safety and environment through training program and seminars

During the year following safety program were held on the dates mentioned therein.

Fire Safety week:

14th - 20th April

Safety week:

4th March - 10th March

Environment Day:

5th June

The Company is a member of Effluent Channel Projects, for disposal of Effluent Water and also of Nandesari Environment Control Ltd., for disposal of solid waste. The Company is continuously monitoring its waste to ensure adherence to pollution control norms. The Factories are BS OHSAS 18001:2007 certified.

35. Insurance:

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

36. Disclosures under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act 2013:

The Company has in place a Code on Prevention of Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has set up an Internal Complaints Committee to redress complaints received regarding sexual harassment. Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

37. Acknowledgement:

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

For and on behalf of the Board of Directors

Place: Mumbai, Abhay V. Udeshi

Date: May 30, 2018 Chairman

Source : Dion Global Solutions Limited
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