Dear Members,
Your Company's Board of Directors are pleased to present to you the 33rd Annual Report of your Company together with the Audited Financial Statements for the Financial Year ended March 31, 2024.
FINANCIAL PERFORMANCE
Your Company's financial performance on standalone basis for the financial year ended March 31, 2024 compared with previous financial year is summarised below:
The above mentioned financial performance highlights are an abstract of the financial statements of your Company for the Financial Year 2023-24. The detailed Financial Statements of your Company forms part of this Annual Report and are also uploaded on website of your Company i.e. www.jyothylabs.com.
PERFORMANCE HIGHLIGHTS
The Revenue from operations on standalone basis of your Company for the financial year 2023-24 was up by 10.9% and stood at ' 275,403 Lacs compared to ' 248,195 Lacs in the previous financial year. The net profit for the financial year 2023-24 amounted to ' 36,989 Lacs, up by of 54% over the previous financial year.
The consolidated revenue from operations of your Company for the financial year under review stood at ' 275,693 Lacs as against ' 248,602 Lacs in the previous financial year, reporting a growth of 10.9%. The consolidated profit after tax for the financial year under review stood at ' 36,930 Lacs against ' 23,973 Lacs in the previous financial year, up by 54 % over the previous financial year.
DIVIDEND
Your Board is pleased to recommend for your consideration, a dividend of ' 3.50/- (Rupees Three and Fifty Paise only) per equity share of ' 1/- each for the financial year 2023-24. The aforesaid dividend will involve a total payout of ' 12,852 Lacs and is subject to the approval of Shareholders at the ensuing Annual General Meeting of your Company. The proposed dividend payout 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 read with the provisions of the Finance Act, 2020, with effect from April 1,2020, dividend declared and paid by any Company is taxable in the hands of shareholders. Your Company shall, therefore, be required to regulate deduction of tax at source (TDS) at the time of payment of dividend in accordance with the provisions of the Income 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 the documents submitted to your Company.
Your Company will also be sending communication to the shareholders informing them to submit the necessary documents to enable your Company to calculate the amount of tax required to be deducted from the proposed dividend in respect of each eligible shareholders. The aforesaid communication will be sent via e-mail to those shareholders whose names appear in the Register of Member as on May 31, 2024 and to those shareholders who have registered their email id with your Company.
During the previous financial year, your Company had paid a final dividend of ' 3 (Rupees Three only) per equity share of ' 1/- each for the Financial Year 2022-23. The aforesaid dividend involved a total payout of ' 11,016 Lacs.
DIVIDEND DISTRIBUTION POLICY
The Board of Directors of your Company had approved and adopted a policy on Dividend Distribution formulated in accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the Listing Regulations) and the dividend is recommended in accordance with the said policy.
The sub-regulation (1) of Regulation 43A of the Listing Regulations has allowed the companies to provide web-link of the Dividend Distribution Policy instead of attaching it along with the Annual Report. However, for the easy accessibility of the shareholders, your Company has annexed to this report its Dividend Distribution Policy as "Annexure - A" and has also uploaded the same 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 issued any shares with differential rights, hence no information prescribed under the provisions of Section 43(a)(ii) of the Companies Act, 2013 (the Act) read with Rule 4(4) of the Companies (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 issued any 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) Rules, 2014 is furnished.
c) Issue of Employee Stock Option
During the year under review and to date, 96,444 Restricted Stock Units (RSU) were granted under the Jyothy Labs Limited- Restricted Stock Units Plan 2023.
SHARE CAPITAL
The Authorised Share Capital of your Company is ' 3,08,85,00,000/- consisting of: (a) 3,01,95,00,000 Equity Shares of the Face Value of '1/- each and (b) 30,000 11% Cumulative Redeemable Preference Shares of the Face Value of ' 100/- each and (c) 66,00,000 Preference Shares of ' 10/- each. The paid-up Equity Share Capital of your Company as on March 31, 2024 stood at ' 36,72,08,644/- consisting of 36,72,08,644 Equity Shares of the Face Value of ' 1/- each. Further, as on March 31, 2024, none of the Directors of your Company holds instruments convertible into equity shares of your Company.
DEBENTURES
During the Financial Year under review, your Company did not issue any Debentures in terms of Section 42 and Section 71 of the Act read with Rule 14 of the Companies (Prospectus and Allotment of Securities) Rules, 2014 and Rule 18 of the Companies (Share Capital and Debentures) Rules, 2014 and no debentures were redeemed during the Financial Year 2023-24.
ANNUAL RETURN
Pursuant to Section 134(3)(a) of the Act, the draft annual return for Financial Year 2023-24 prepared in accordance with Section 92(3) of the Act is made available on the website of your Company i.e. https:// www.jyothylabs.com/disclosure-under-regulation-46- of-the-lodr/annual-report-2/#annual-report
NUMBER OF MEETINGS OF THE BOARD
Your Company's Board of Directors met 7 (seven) times during the financial year ended March 31, 2024 in accordance with the provisions of the Act and the Rules made thereunder. All the Board and the Committee meetings during the financial year 202324, were held physically and the facility to attend the meeting through video conferencing in compliance with the provisions of Section 173 of the Act read with Rule 3 of the Companies (Meetings of Board and its Powers) Rules, 2014, as amended was provided.
The meetings were held on May 3, 2023, June 9, 2023, July 25, 2023, November 7, 2023, November 24, 2023, January 31, 2024 and March 14, 2024. Also, during the financial year 2023-24, 2 (two) Circular Resolutions pursuant to Section 175 of the Act were passed on September 13, 2023 and December 15, 2023.
AUDIT COMMITTEE
The Audit Committee of your Company consists of all Independent Directors. The detailed composition of the Audit Committee is provided in the Corporate Governance Report. All the recommendations 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 Statements of your Company for the financial year ended March 31, 2024, the Board of Directors of your Company hereby confirms that:
a. in the preparation of the annual accounts for the financial year ended March 31, 2024, the applicable accounting standards read with the requirements set out under Schedule III to the Act have been followed and there were no material departures from the same;
b. your Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2024 and of the profit of your Company for the year ended on that date;
c. your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 concern basis;
e. your Directors have laid down internal financial controls to be followed by your Company and that such internal financial controls are adequate and are operating effectively; and
f. your Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
PERFORMANCE EVALUATION
In accordance with the Act and Regulation 4(2)(f) of the Listing Regulations, your Company has framed a Policy for Evaluation of Performance of Independent Directors, Board, Committees and other individual Directors which includes criteria for performance evaluation of Non-Executive Directors and Executive Directors. A questionnaire is formulated for evaluation of performance of the Board, its committees and individual Directors, after taking into consideration several aspects such as board composition, strategic orientation, board functioning and team dynamics.
An annual performance evaluation for the financial year 2022-23 was carried out by the Board of Directors and the Nomination, Remuneration and Compensation Committee at their respective meetings held on May 3, 2023. The questionnaires were circulated to the Board members and the Committee members of the Nomination, Remuneration and Compensation Committee at the time of performance evaluation conducted at their respective meetings. The Directors and the Committee members then filled-up the questionnaire and rated the Board, its Committees and individual Directors and duly filled questionnaires were handed over to the Company Secretary.
Performance evaluation of Independent Directors was conducted by the Board of Directors, excluding the Director being evaluated. The criteria for performance evaluation of Independent Directors laid down by the Nomination, Remuneration and Compensation Committee include ethics and values, knowledge and proficiency, diligence, behavioural traits, efforts for personal development and independence in decision making.
Similarly, performance evaluation of the Chairman, Non-Independent Directors and the Board of Directors was carried out by the Independent Directors of your Company at its separate meeting held on May 17, 2023. Your Directors also expressed their satisfaction with the evaluation process.
TRAINING OF INDEPENDENT DIRECTORS
All Independent Directors are familiarized with your Company, their roles, rights and responsibilities in your Company, nature of the industry in which your Company operates, business model, strategy, operations and functions of your Company through its Executive Director(s) and Senior Managerial Personnel. The details of programs for familiarization of Independent Directors with your Company are available on the website of your Company at the link: https://www.jyothylabs.com/investor/management- policies-notices/#Management-Policies
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Based on the recommendation of Nomination, Remuneration and Compensation Committee, the Board of Directors of your Company, at their meeting held on May 15, 2024, appointed Ms. M. R. Jyothy (DIN - 00571828) as the Chairperson of the Board of Directors of the Company and re-designated her as the Chairperson and Managing Director of the Company effective from May 15, 2024.
Further at the said meeting, the Board of Directors also, re-appointed Ms. M. R. Jyothy (DIN- 00571828) as the Chairperson and Managing Director and Key Managerial Personnel of your Company, not liable to retire by rotation, in terms of the provisions of the Act for a further period of 5 years commencing from April 1, 2025 to March 31, 2030 (both days inclusive), subject to the approval of the shareholders in the ensuing 33rd Annual General Meeting (AGM) on terms and conditions specified in the Notice of AGM.
Further, during the year, the Board of Directors, based on the recommendation of Nomination, Remuneration and Compensation Committee of the Company:
• Re-appointed Ms. Bhumika Batra (DIN- 03502004) as an Independent Director of your Company, not liable to retire by rotation, for a period of 5 (five) consecutive years commencing from March 14, 2024 to March 13, 2029 (both days inclusive). The members of the Company have approved her re- appointment as an Independent Director of the Company at its AGM held on July 25, 2023.
• Appointed Mr. Narayanan Subramaniam (DIN- 00166621) as an Additional Director designated as Independent Director of your Company, not liable to retire by rotation, for a period of 5 (five) consecutive years commencing from December 15, 2023 to December 14, 2028 (both days inclusive). The members of the Company have approved his
appointment as an Independent Director of the Company, through Postal Ballot on March 7, 2024.
• Appointed Mr. Ananth Rao T (DIN- 02585410) as a Director and Whole-time Director of your Company designated as Director- Operations & Commercial, liable to retire by rotation, for a period of 5 (five) consecutive years commencing from April 1, 2024 to March 31, 2029 (both days inclusive). The members of the Company have approved his appointment as Director and Whole- time Director of the Company, designated as Director- Operations & Commercial, through Postal Ballot on March 7, 2024.
• Appointed Mr. Ravi Razdan (DIN- 08936083) as a Director and Whole-time Director of your Company designated as Director- IT & HR, liable to retire by rotation, for a period of 5 (five) consecutive years commencing from April 1, 2024 to March 31, 2029 (both days inclusive). The members of the Company have approved his appointment as Director and Whole-time Director of the Company, designated as Director- IT & HR, through Postal Ballot on March 7, 2024.
• Appointed Mr. Suresh Balakrishna (DIN- 05207871) as an Independent Director of your Company, not liable to retire by rotation, for a period of 5 (five) consecutive years commencing from April 1, 2024 to March 31, 2029 (both days inclusive). The members of the Company have approved his appointment as an Independent Director of the Company, through Postal Ballot on March 7, 2024.
The Company's Board is of the opinion that the Independent Directors of your Company have fulfilled the conditions as specified in the Listing Regulations, are independent of management, possess requisite qualifications, experience, proficiency and expertise in the field of Business Strategy, Finance and Accounting, Regulatory Framework, Corporate Governance, Risk Management, Marketing and they hold highest standards of integrity.
Cessation of Directors:
• Ms. M. R. Deepthi (DIN: 01746698) has stepped down as a Director and Whole-time Director of your Company with effect from November 24, 2023, to pursue her personal interest.
• Mr. R. Lakshminarayanan (DIN: 00238887) and Mr. Nilesh Mehta (DIN: 00199071), Independent Directors of your Company retired from the Board position with effect from the closing hours of
March 31, 2024, upon completion of their second term of office.
The Board of Directors and Management placed on record its sincere appreciation for the extensive contribution and support rendered by Ms. M. R. Deepthi, Mr. R. Lakshminarayanan and Mr. Nilesh Mehta during their tenure with the Company.
During the year under review, the Non-Executive Directors of your Company had no pecuniary relationship or transactions with your Company, other than sitting fees, commission, and reimbursement of expenses, if any.
In accordance with the provisions of Section 152 of the Act, Ms. M. R. Jyothy, Chairperson and Managing Director (DIN - 00571828) of your Company retires by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re-appointment.
Apart from the aforesaid changes, there was no change 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 received necessary declarations from all the Independent Directors under Section 149(7) of the Act and Regulation 25(8) of the Listing Regulations declaring that they meet the criteria 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 have complied with the provisions of sub-rule (1) and (2) of Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014 by registering themselves under data bank of Independent Directors for lifetime. Your Company has also formulated a Code of Conduct for Directors and Senior Management Personnel and has obtained declarations from all the Directors to the effect that they are in compliance with the Code of Conduct.
MEETING OF INDEPENDENT DIRECTORS
Your Company's Independent Directors meet at least once in every financial year without the presence of the Executive Director(s) or Management Personnel of your Company and the meeting is conducted informally. During the year under review, one meeting of the Independent Directors was held on May 17, 2023.
REMUNERATION POLICY
Your Company follows the policy on Nomination, Remuneration and Compensation of Directors, Key Managerial Personnel and other Employees as
approved by the Nomination, Remuneration and Compensation Committee and the Board of Directors of your Company and the same has been uploaded on your Company's website at https://www.jyothvlabs. com/disclosure-under-regulation-46-of-the-lodr/ management-policies-notices/#management-policies. Salient 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 Statutory Auditors under Section 143(12) of the Act
AUDITORS & AUDIT REPORTS
Statutory Auditors and their Report:
The Members at the 31st Annual General Meeting held on July 25, 2022, approved the appointment of M/s B S R & Co. LLP, Chartered Accountants (Firm Registration No.101248W/W-100022) as the Statutory Auditors of your Company for a second term of 5 years commencing from conclusion of the 31st Annual General Meeting till the conclusion of the 36th Annual General Meeting. Also, as per the Companies (Amendment) Act, 2017, provisions of Section 139 of the Act have been amended, wherein, the requirement of ratification of appointment of Statutory Auditors at every AGM has been done away with. Accordingly, appointment of M/s. B S R & Co. LLP, Chartered Accountants (Firm Registration No.101248W/W-100022) as Statutory Auditors of your Company, will not be placed for ratification by the members in the ensuing Annual General Meeting.
The Notes on financial statements referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not 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 your Company on the recommendation of the Audit Committee have re-appointed M/s. Rathi & Associates, Practicing Company Secretaries (Firm Registration No. P1988MH011900), Mumbai as the Secretarial Auditors of your Company to carry out Secretarial Audit for the financial year 2024-25. Your Company has obtained Secretarial Audit Report for the Financial Year 2023-24 in the prescribed Form MR-3 from M/s Rathi & Associates, Practicing Company Secretaries, which forms part of the Annual Report and is appended as "Annexure - C" to this Report. The report does not contain any qualification(s), reservation(s) or adverse remark(s) which calls for any explanation from your Board of Directors.
In addition to the above Secretarial Audit and pursuant
to the requirements of Regulation 24A of the Listing Regulations, M/s. Rathi & Associates, Practicing Company Secretaries have also issued to your Company, Annual Secretarial Compliance Report for the financial year 2023-24 confirming compliance of all laws, SEBI Regulations and circulars/ guidelines issued thereunder, as applicable to your Company. The Annual Secretarial Compliance Report dated May 15, 2024 issued by M/s. Rathi & Associates, Practicing Company Secretaries will be submitted to the stock exchanges within 60 days from the financial year ended March 31, 2024.
Regulation 24A of the Listing Regulations requires the companies to annex to its Annual Report, a Secretarial Audit Report, given by a Company Secretary in practice, in the format prescribed by SEBI from time to time. However, pursuant to the provision of SEBI Circular No. CIR/CFD/CMD1/27/2019 dated February 8, 2019 and in order to avoid duplication, SEBI has allowed companies to use the same Form No. MR-3 as required under the Act and the rules made thereunder for the purpose of compliance with Regulation 24A of the Listing Regulations as well. Accordingly, your Company in compliance with the said SEBI Circular has used the same Form No. MR-3 as prescribed under the Act and the rules made thereunder for the purpose of compliance with Regulation 24A of the Listing Regulations as well.
Cost Auditors and their Report
As per Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, as amended, the Board of Directors of your Company on recommendation of the Audit Committee have re-appointed M/s. R. Nanabhoy & Co., Cost Accountants, Mumbai (Firm Registration No. 000010) as the Cost Auditors to carry out the cost audit of its products covered under the Ministry of Corporate Affairs Order dated June 30, 2014 (as amended on December 31, 2014) for the financial year 2024-25. The remuneration of Cost Auditors has been approved by the Board of Directors on the recommendation of the Audit Committee and the requisite resolution for ratification of remuneration of Cost Auditors by the members has been set out in the Notice convening the 33rd Annual General Meeting of your Company.
The re-appointment of M/s. R. Nanabhoy & Co., Cost Accountants, Mumbai as the Cost Auditors of your Company is within the prescribed limits of the Act and free from any disqualifications specified thereunder. Your Company has received the Certif?cate from the Cost Auditors confirming their independence and relationship on an arm's length basis.
The Cost Audit Report for the financial year ended March 31, 2023, issued by M/s. R. Nanabhoy & Co., Cost Auditors, in respect of the various products prescribed under Cost Audit Rules does not contain any qualification(s), reservation(s) or adverse remark(s) and the same was filed with the Ministry of Corporate Affairs on August 7, 2023. The Cost Audit Report for the financial year ended March 31, 2024 will be filed with 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 under Section 186 of the Act are appended as "Annexure - D" and forms integral part 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 parties referred 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 Company had entered into contract(s)/arrangement(s)/transaction(s) with related parties which were in ordinary course of business and on arm's length basis and none of which could be considered as material in accordance with the policy of your Company on materiality of related party transactions. Further, none of the contract(s)/ arrangement(s)/transaction(s) with related parties required approval of Members as the same were within the limits prescribed under Section 188(1) of the Act and the Rules framed thereunder read with the provisions of Regulation 23(4) of the Listing Regulations.
In line with the requirements of the Act and amendments to the Listing Regulations, all Related Party Transactions have been approved by the Audit Committee and reviewed by it on a periodic basis.
The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board is available on the website of your Company at the link:
https://www.jyothylabs.com/investor/management-
policies-notices/#Management-Policies
Attention of Members is also drawn to Note 32 to the financial statements for the year ended March 31, 2024 which sets out the related party disclosures as 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 Listing Regulations, the Management Discussion and Analysis Report of your Company's affairs for the 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 the Debenture Redemption Reserve for the Financial Year under review.
MATERIAL CHANGES AND COMMITMENTS
Except as disclosed elsewhere in this report, no material changes and commitments which could affect your Company's financial position have occurred between the end of the financial year 2023-24 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, foreign exchange earnings and outgo, as required to be disclosed under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 are annexed herewith as "Annexure - F" to this Report.
RISK MANAGEMENT
In terms of Regulation 21 of the Listing Regulations, the Board of Directors of your Company constituted the Risk Management Committee. Consequent to the cessation of Ms. M. R. Deepthi as a Director and Whole-time Director of the Company with effect from the closing hours of November 24, 2023, she also ceased to be a member of Risk Management Committee. The Board of Directors at their meeting held on November 24, 2023 appointed Mr. Aditya Sapru, Independent Director as the Member of the Risk Management Committee.
Accordingly, the Risk Management Committee comprises of the following Directors/Executives of your Company as Members of the Committee as on March 31, 2024:
1. Mr. Nilesh Mehta, Independent Director - Chairman;
2. Mr. Aditya Sapru, Independent Director- Member;
3. Ms. M. R. Jyothy, Managing Director- Member;
4. Mr. Ananth Rao T, Head - Operations & Commercial - Member; and
5. Mr. Ravi Razdan, Head - IT & HR- Member.
The Risk Management Committee has been entrusted with the powers such as monitoring and reviewing of the risk management plans/policies; appointing various functionaries; deciding the role and responsibilities of various functionaries; evaluating risk 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. The Risk Management Committee of your Company met twice during the Financial Year 2023-24 i.e. on July 25, 2023 and January 12, 2024. Mr. Nilesh Mehta chaired the said meetings of the Risk Management Committee.
Further, Mr. Nilesh Mehta retired as an Independent Director of your Company upon completion of his second term of office as Independent Director with effect from close of business hours of March 31, 2024 and accordingly ceased to be the Chairman and Member of Risk Management Committee. The Board of Directors of your Company at its meeting held on March 14, 2024 appointed Mr. Aditya Sapru as the Chairman of the Risk Management Committee with effect from April 1, 2024.
The Board of Directors of your Company has designed a Risk Management Policy in a structured manner taking into consideration the following factors and the same is 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 keeping in 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 year horizon 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 Company identified the goals on which the management would focus.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Company has been a firm believer that each and every individual including an artificial person owe something to the society at large. Mr. M. P. Ramachandran, Chairman Emeritus of your Company even before the inception of Corporate Social Responsibility provisions under the Act, has been involved in charitable and social activities in his individual capacity.
Your Company for the financial year 2023-24 was required to spend an amount of ' 458.64 Lacs (2% of the average net profits of last three financial years) towards Corporate Social Responsibility (CSR) activities. However, your Company for the financial year 2023-24 has spent an aggregate amount of ' 458.75 Lacs towards the CSR activities mentioned in the Annual Action Plan of the Company for the financial year 2023-24, as approved by the Board of Directors.
The Annual Report on CSR activities that includes details about brief outline on CSR Policy developed and implemented by your Company, composition of CSR Committee and CSR initiatives taken during the financial year 2023-24 in accordance with Section 135 of the Act and other details required to be disclosed as per the latest format prescribed under the Companies (Corporate Social Responsibility Policy) Rules, 2014 as amended from time to time is annexed herewith as "Annexure - G" to this Report.
Details about the CSR Policy adopted and formulated by your Company can be accessed from your Company's website at the link:
The Annual action plan for the financial year 2024-25 as recommended by the Corporate Social Responsibility Committee and approved by the Board of Directors of your Company at their respective Meetings held on May 15, 2024 has also been uploaded on your Company's website at the link: https://www.jyothylabs.com/wp- content/uploads/2024/05/CSR-Annual-Action-Plan- for-FY-2024-25.pdf
CHANGE IN NATURE OF BUSINESS
During the year under review, there was no change in the nature of business of your Company.
PERFORMANCE OF SUBSIDIARIES, ASSOCIATE COMPANIES/ JOINT VENTURES
A statement containing the salient features of the financial statements of your Company's Subsidiaries, Associates and Joint Venture Companies in the prescribed format AOC-1 is presented in separate
section forming part of the financial statements and hence not repeated here in this Report for the sake of brevity. Policy for determining material subsidiaries, formulated and adopted by your Company can be accessed from your Company's website at the link: https://www.iyothylabs.com/investor/management- policies-notices/#Management-Policies
No Company has become or ceased to be your Company's subsidiary, joint venture or associate company during the financial year 2023-24.
FIXED DEPOSITS
Your Company did not accept/renew any fixed deposits from public and no fixed deposits were outstanding or remained unclaimed as on March 31, 2024
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by any Regulator/Court that would impact 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 and are operating effectively. Your Company has adopted a dynamic Internal Financial Controls framework based on the best practices followed in the industry. Under the 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 & Co. LLP., have been entrusted with the responsibility of testing the controls identified and implemented by your Company for all the aforesaid processes.
During the year under review, no material or serious observations have been received from the Internal Auditors of your Company regarding inefficiency or inadequacy of such controls.
CONSOLIDATED ACCOUNTS
The Consolidated financial statements of your Company are prepared in accordance with the relevant Indian Accounting Standards issued by the Central Government under 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 Certif?cate received from M/s. Rathi & Associates, Practicing Company Secretaries, confirming compliance of Corporate Governance requirements is attached and forms an integral part of this Annual Report.
BUSINESS RESPONSIBILITY AND
SUSTAINABILITY REPORT (BRSR)
The Company has been conducting business in a sustainable manner and to create maximum value for all its stakeholders. Business Responsibility and Sustainability Report for FY 2023-24 in accordance with Regulation 34(2)(f) of the Listing Regulations, forms an integral part of this Annual Report.
COMPLIANCE WITH SECRETARIAL STANDARDS
During the year under review, your Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.
REMUNERATION/ COMMISSION FROM ANY OF ITS SUBSIDIARIES
During the year under review, neither the Managing Director nor the Whole-time Director of your Company received any remuneration or commission from any of its subsidiaries.
EMPLOYEE STOCK OPTION SCHEME (ESOS)
During the financial year under review, with the approval of the shareholders at the Annual General Meeting held on July 25, 2023, your Company has introduced Jyothy Labs Limited- Restricted Stock Units Plan 2023 ("RSU Plan 2023"), to reward, incentivise and retain eligible employees.
The Nomination, Remuneration and Compensation Committee of your Company at their meeting held on September 4, 2023 approved grant of 96,444 Stock Options under the RSU Plan 2023.
The disclosures as required under Regulation 14 of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SEBI SBEBSE Regulations") have been placed on the website of the Company at wwwjyothylabs.com.
A certif?cate from M/s. Rathi & Associates, Practicing Company Secretaries, Secretarial Auditors of the Company certifying that the RSU Plan 2023 has been implemented in accordance with SEBI SBEBSE Regulations pursuant to the resolution passed by the Shareholders, will be available for electronic inspection at the ensuing Annual General Meeting.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
Your Company has a Vigil Mechanism in place which includes a Whistle Blower Policy in terms of the Listing Regulations for Directors and Employees of your Company to provide a mechanism which ensures adequate safeguards to Employees and Directors from any victimization on raising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any financial statements and reports etc.
The Vigil Mechanism/Whistle Blower Policy of your Company can be accessed from your Company's website at the link:
https://wwwjyothylabs.com/investor/management-
Your Company has put in place a mechanism in consonance with the requirements of Section 177 of the Act and Regulation 18(3) of the Listing Regulations for the Directors, employees and other stakeholders to report genuine concerns about unethical behavior, actual or suspected fraud or violation of the Code of Conduct or policy framed by your Company. All Protected Disclosures can be reported by the Whistle Blower in writing or through call on the following number i.e. 18601232120 or Hotline number i.e. 022-66892804 or alternatively, the same can also be sent through email on whistleblower@jyothy.com with the subject "Protected disclosure under the Whistle Blower Policy".
The Whistle Blowers have a right/option to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Codes of Conduct or policy directly to the Chairperson of the Audit Committee. During the year under review, no protected disclosure from any Whistle Blower was received by the designated officer under the Vigil Mechanism.
INTERNAL CONTROL SYSTEMS
Your Company has adequate internal control systems and procedures in place for effective 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 apart from regular Internal Audits. Roles and responsibilities have
been laid down for each process owner. A Management Information System has been established which ensures that adequate 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 LLP, Chartered Accountants, Internal Auditors regularly check the adequacy of the system, their observations are reviewed by the management and remedial measures, as necessary, are taken. Internal Auditors report directly to the Chairperson of the 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 compliance with the provisions of all applicable laws to your Company adequately and effectively.
TRANSFER 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 and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, all the equity shares of the Company in respect of which dividend amounts have not been paid or claimed by the Shareholders for seven consecutive years or more are required to be transferred to demat account of the Investor Education and Protection Fund Authority (IEPF Authority).
Accordingly, 40,666 shares belonging to 918 Shareholders and 30,795 shares belonging to 655 Shareholders of your Company were transferred to Demat Account of IEPF Authority on May 11, 2023 and September 21, 2023 respectively. Your Company had sent individual notice to all the aforesaid members and had also published the notice in the leading English and Marathi newspapers. The details of the aforesaid members are available on website of your Company i.e. www.jyothylabs.com.
Transfer of Unpaid/Unclaimed Dividend:
Pursuant to the provisions of Section 124(5) of the Act, the dividend which remained unclaimed/ unpaid for a period of seven years from the date of transfer to unpaid dividend account is required to be transferred to the Investor Education and Protection Fund (IEPF) established by the Central Government.
As a result, the unclaimed/unpaid dividend pertaining to the financial year 2015-16 which remained unpaid and unclaimed for a period of 7 years has been transferred by your Company to the IEPF.
Your Company has uploaded the details of unclaimed/unpaid dividend for the financial year 2015-16 onwards on its website
i.e. www.jyothylabs.com and on website of the Ministry of Corporate Affairs i.e. www.mca.gov.in and the same gets revised/updated from time to time pursuant to the provisions of IEPF (Uploading of Information Regarding Unpaid and Unclaimed Amount Lying with Companies) Rules, 2012.
Further, the unpaid final dividend amount pertaining to the financial year 2016-17 will be transferred to IEPF during the Financial Year 2024-25.
EMPLOYEE RELATIONS
Your Company has always provided a congenial atmosphere for work to all its employees that is free from discrimination and harassment. Employee relations remained cordial during the year under review.
MANUFACTURING FACILITIES
Your Company has state-of-the-art facilities at all of its 23 Plant locations spread across India. Furthermore, five manufacturing plants of your Company situated at Roorkee, Wayanad, Jammu, Pithampur and Puducherry are ISO 9001:2015 certified, Puducherry manufacturing plant is also ISO 45001:2018 certified and all of the manufacturing plants are ISO 14001:2015 (Environment Management System) certified.
PREVENTION OF SEXUAL HARASSMENT
Your Company has framed 'Anti - Sexual Harassment Policy' at workplace and has constituted an Internal Complaints Committee (ICC) as per the requirement of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed thereunder. No complaints with allegations of any sexual harassment were reported during the year under review.
PARTICULARS OF EMPLOYEES
The information in terms of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in "Annexure H" and forms part of the Director's Report for the year ended March 31, 2024. Further, the statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rule, 2014 is given in an Annexure and forms part of this report. In terms of Section 136(1) of the Companies Act, 2013, the annual report and the financial statements are being sent to the Members excluding the aforesaid Annexure. The Annexure is available for inspection and any Member interested in obtaining a copy of the Annexure may write to the Company Secretary of the Company.
DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016
Your Company filed an application before the Hon'ble National Company Law Tribunal, Chennai Bench (NCLT) as a financial creditor to initiate corporate insolvency resolution process under Section 7 read with Chapter II of Part II/ Under Chapter IV of Part II of the Insolvency and Bankruptcy Code, 2016 (Code) against Abhiraami Chemicals Limited (ACL) and the Hon'ble NCLT admitted the application vide order dated October 04, 2021.
In view of the fact that ACL did not have any business operations since the Financial Year 2015-16, the Committee of Creditors (CoC) at its meeting held on November 26, 2021 recommended and approved the liquidation of ACL. Subsequently, the Resolution Professional filed an application for initiation of liquidation before the Hon'ble NCLT and the Hon'ble NCLT vide its order dated September 19, 2022 had allowed for liquidation of ACL and appointed the Resolution Professional as the Liquidator in this matter.
Further, the Stakeholders Consultation Committee (SCC) of ACL at its meeting held on September 14, 2023, took note of the activities undertaken by the Liquidator in this matter including the recovery process and noted the asset memorandum submitted by the Liquidator along with the order received from the Hon'ble NCLT. The SCC was further satisfied with the recovery process and agreed on complete liquidation of the assets of ACL and subsequent distribution of proceeds to the stakeholders. The Company being a financial creditor received an amount as per its entitlement on September 14, 2023 as per provisions of Section 53 of the Code. The ACL liquidation was taken up for final hearing by the Hon'ble NCLT on May 2, 2024 and after hearing the case, the matter was reserved for orders. Further, the Hon'ble NCLT vide its Order dated May 9, 2024 passed Order for dissolution of ACL.
Also, based on the application filed by your Company under Section 9 of the Act read with Rule 6 of the Code before the Hon'ble National Company Law Tribunal, Chennai Bench (NCLT) as the Financial Creditor to initiate corporate insolvency resolution process against Khadyota Kishan Foundation (KRDC), the Hon'ble NCLT admitted the Application of your Company vide its order dated November 9, 2022. Thereafter, the Committee of Creditors (CoC) vide its meeting held on February 10, 2023 approved and resolved liquidation of KRDC and filed an application to commence liquidation process which is pending hearing before the Hon'ble NCLT.
CAUTIONARY NOTE
Certain statements in the "Management Discussion and Analysis" section may be 'forward-looking'. Such 'forward looking' statements are subject to risks and uncertainties and therefore actual results could be different from what your Directors envisage in terms of future performance and outlook.
ACKNOWLEDGEMENT
Your Directors express their sincere appreciation for the contribution and commitment of the employees of your Company at all levels and for the excellent support provided by the members, customers, distributors, suppliers, bankers, media and other stakeholders, during the financial year under review. Your Company looks forward to continued and unstinted support in its endeavor to make lives of consumers better by providing world class products at affordable price.