As on: Oct 02, 2023 05:12 PM
Dear Shareholders,
Your Directors are pleased to present the Thirty-First Annual Report for the financial year ended March 31, 2023 along with the
Audited Financial Statements and the Auditor s Report thereon.
1. Financial Results:
Key highlights of consolidated and standalone financial performance for the year ended March 31, 2023, are summarised as under:
( in Lakhs)
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, Ihsedu Coreagri Services Private Limited, Jacaco Private Limited and Jayant Speciality Products Private Limited and its Associate Company, Vithal Castor Polyols Private Limited.
The Standalone Financial Results for the year show a Total Income of 1,14,201.06 lakhs compared to 1,08,907.14 Lakhs and Net Profit after tax of 4,205.40 lakhs as compared to 7,700.19 lakhs in the previous year.
The Consolidated Financial Results for the year show a Total Income of 2,77,334.71 lakhs compared to 2,59,072.51 lakhs and Net Profit after tax of 5,187.07 lakhs as compared to 9,238.75 lakhs in the previous year.
3. Dividend & Reserves:
The Board of Directors are pleased to recommend dividend of 5/- per equity share on the paid up equity share capital of the Company, for consideration and approval of the shareholders at the ensuing annual general meeting. If approved by the Shareholders, the equity dividend outgo for the Financial Year 2022-23 would be 15 Crores.
Your directors do not propose to transfer any amount to the General Reserve for the financial year ended March31, 2023.
Pursuant to Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 [SEBI Listing Regulations/ SEBI LODR], the Board of Directors of the Company has formulated a Dividend Distribution Policy (‘the Policy'). The weblink of the Policy is available at the Annexure A.
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. Credit Rating:
The Company had received Credit Rating from ICRA for its Long Term Debt and Short Term Debt as ICRA A- (Stable) and ICRA A2+
6. State of Company's Affair:
In order to avoid duplication and for the sake of better understanding, the State of Company's Affairsis explained in detail in the section, Management Discussions and Analysis whichhasbeenincludedinthissectionoftheDirectorsReport.
7. 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 2023-24 has been paid to the respective Stock Exchange(s).
8. Scheme of Amalgamation:
During the period under review, pursuant to the direction of the National Company Law Tribunal (NCLT), Mumbai Bench, the Company had conducted the meeting of equity shareholder of the Company on August 27, 2022 through Video Conference/Other Audio Visual Mode for approval of the Scheme of Merger by Absorption between Jayant Finvest Limited and Jayant Agro-Organics Limited (the Scheme). The Meeting was duly conveyed in compliance with the applicable laws and directives of NCLT, and the Scheme was approved by the special resolution as well as by the majority of the public equity shareholders. The Company has filed the petition for sanctioning the Scheme with NCLT, Mumbai Bench.
9. Management's Discussion and Analysis:
(a) Industry Structure and Developments and impact on the Company and its performance
The exports of castor oil which were at 6,62,812 Metric Tons in 2021-22, stood at 6,06,376 Metric Tons in 2022-23. The estimate of the current years crop is at 18.81 lac MT an improvement from the final estimates of 16.94 lac MT in 2021-22. The carry over estimates vary from 1,00,000/- to 2,00,000/- MT. Going by the current demand and the crop estimate we expect that the supply position it can be assumed that the supply will be comfortable enough to meet the demand.
The year under review was challenging due to the impact of Ukraine-Russia conflict. Geopolitical disturbances rising interest rates are expected to keep the demand in reign. The demand remains subdued and is expected to take a few quarters before we see a robust bounce back.
The Financial highlights of the Company are as under
(b) Opportunities & Threats
With more than 80% of your Company's production being exported, the state of the world economy, determines the overall all demand for the products. The current situation is seeing some stability in demand due to the dry up in the supply chain but future expectations remain subdued till we see the confidencereturning in the global economic growth.
Changes in technology leading to new products or uses being created or substitution or obsolescence of products due to scientific developments has an important bearing on the demand for its products. 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, especially 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 on both sides. The Company is evolving and examining its risks matrix to respond to the price, product and demand risks to mitigate risks arising from these factors. The Company is also cultivating hybrid seeds to improve the productivity of commercial Castor Seeds.
(c) Segment
The Company is organized into three business segments – Castor Oil, Derivatives and Power Generation.
(d) Outlook
The governments across the world have adapted anti-inflationary policies by increasing interest rates and restricting money supply. These policies have curbed the economic activities and consequently the demand for the company's products. The continuation of these policies or their withdrawal and the impact of the continuation or changes on the economies is likely to have an impact on demand for the Company's products.
Under the current scenario, barring unforeseen circumstances, the short term outlook remains subdued but with a stable outlook as demand is not expected to erode further. The company is making efforts ensure continuity of operations and cost controls and is confident of meeting all its obligations and maintaining its operation in the green. The long term outlook remains positive.
Emphasis on green eco-friendly products is likely to lead to an increase in innovation of new products and uses of castor oil by the chemical industry.
(e) Risks and Concerns
The company is adjusting in view of the volatile and uncertain demand and operational flexibility. However, the Company's products are used across geographies in a variety of industries, thereby to a great extent, mitigating the long term 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 / La Nina 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.
With the trend of India's economy growing steadily and demand for trained and experienced manpower is in excess of the supply, the risk of managing and retaining people exists. 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 legal 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 6.13 Crores as on March 31, 2023. Attention of the shareholders is drawn to the explanations mentioned in note no. 35 of the Notes to Financial statements forming integral part of the balance sheet as on March 31, 2023. 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.
(f) Awards and Recognition
The Company and its Subsidiary, Ihsedu Agrochem Private Limited were felicitated with Award of Excellence (2018-19) and Trishul Award (2017-18) respectively by CHEMEXCIL (Export Promotion Council set up by the Ministry of Commerce and Industry, Government of India) for the outstanding export performance.
The company's subsidiary Ihsedu Agrochem Pvt. Ltd was awarded by the Solvent Extractors Association of India for the Highest Processor of Castor Seed Oilcake for the year 2019-20 and the Second Highest Exporter of Castor Seeds Extraction for the year 2021-22.
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 2,77,334.71 lakhs against 2,59,072.51 lakhs in the previous year. The EBDITA was 9,943.85 lakhs current year and 15,364.29 lakhs for the previous year.
2. Derivatives:
The turnover of the derivatives has been 1,12,581.97 lakhs against 1,07,431.21 lakhs in the previous year. The EBDITA was 6,884.15 lakhs as against 11,248.58 lakhs in the previous year.
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 238.65 lakhs
Your directors are pleased to announce that nearly 50% 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 almost 100% of the steam requirement is met by using Company's own product De-oiled Cake, making your company environment friendly manufacturer of environmentally friendly products.
Subsidiary Companies:
Ihsedu Agrochem Pvt Ltd (IAPL)
During the year under review, IAPL a material subsidiary of the Company achieved a turnover of 2,34,381.36 lakhs as compared to 2,15,105.88 lakhs in the previous year. The profit after tax stood at 987.56 lakhs against profit of 1,504.34 lakhs in the previous year.
Ihsedu Coreagri Services Pvt Ltd (ICAS).
During the year under review, ICAS a subsidiary of the Company had profit of 0.07lakhsasagainstprofitof 0.17 lakhs in the previous year.
Ihsedu Itoh Green Chemicals Marketing Pvt. Ltd (IIGCM)
During the year under review, IIGCM achieved a total revenue of 34.48 lakhs as compared to 30.50 lakhs in the previous year. The profit after tax was 16.39 lakhs against profit after tax of 5.05 lakhs in the previous year.
JACACO Private Limited (JACACO)
During the year under review, JACACO Pvt Ltd was yet to commence its business operations. In view of the same, Profit and Loss Account will be prepared upon Commencement of Business.
Jayant Speciality Products Private Limited (JSPPL)
During the year under review, JSPPL incurred loss of 0.22 lakhs as compared to loss of 1.12 lakh in previous year.
Associate Company
Vithal Castor Polyols Pvt Ltd (VCP):
VCP is an Indo – Japanese Joint Venture Company, and your company owns 50% equity shares. VCPs 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 5,371.24 lakhs as compared to 4,481.51 lakhs in the previous year. The Profit after tax stood at 108.85 lakhs as against profit of 61.58 lakhs in the previous year.
The Policy on material subsidiary is provided at the Annexure A.
In accordance with Section 129(3) of the Companies Act, 2013 ("the Act") 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 appended as Annexure I to this Report.
In accordance with third proviso of Section 136(1) of the Act, 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 www.jayantagro.com. Further, as per the fourth proviso of the said Section, the audited accounts of the subsidiary companies are placed on the Company's website and are available for inspection by any member and may write to the Company Secretary for the same.
As stipulated in the provisions of the Act and SEBI Listing Regulations the consolidated financial statements have . been prepared by the Company in accordance with the applicable Accounting Standards.
12. Research and Development (R & D):
The R & D continues the development of products based on castor oil for use in various applications like coatings, inks, polymers, speciality additives, adhesives & sealants, construction chemicals, insulation, furniture, personal care, food additives, fragrance, flavours & lubricants. The R & D is managed by qualified manpower having access to appropriate facilities for R & D work as also to state of the art instruments for checking the performance & quality of the experimental outputs. The R & D scientists keep themselves abreast of the developments in the industry by attending various seminars & trainings. The R & D continues its recognition received from the Department of Scientific & Industrial Research, Government of India, since 2007 & also continues being certified under ISO:9001-2015 quality system.
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 Act and the Companies (Acceptance of Deposits) Rules, 2014 and therefore, no amount of principal or interest on deposit was outstanding as on the Balance Sheet date.
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, 2023 are given in the notes 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. All the Related Party Transactions are placed before the Audit Committee and also the Board for approval. 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 Act read with the rules made thereunder and the SEBI Listing Regulations.
As per the SEBI Listing Regulations, if any related party transaction exceeds 1,000 crore or 10% of the annual consolidated turnover as per the last audited financial statement whichever is lower, would be considered as material and require Members approval. In this regard, during the year under review, the Company had taken necessary Members approval. However, there were no material transactions of the Company with any of its related parties as per the Act. Therefore, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable to the Company for Financial Year 2022-23 and hence, the same is not required to be provided.
A policy on Related Party Transactions is uploaded on the Company's website and can be accessed through the weblink provided in Annexure A
17. Key Managerial Personnel and Directors:
a) Changes, in Directors and Key Managerial Personnel ("KMP"):
Key Managerial Personnel
In accordance with the provisions of section 203 of the Act, the following are the Key Managerial Persons (KMP) of the Company:
As per the provisions of the Act Mr. Varun A. Udeshi retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. The Nomination and Remuneration Committee and the Board recommends his reappointment.
Except for above there has been no change in the Key Managerial Personnel during the year under review.
b) Cessation / Appointment of Independent Director
During the year under review, Mr. Deepak Bhimani, Independent Director of the Company had tendered his resignation from the Board with effect from end of business hours of May 30, 2022 on account of advanced age. The Board of Directors placed on record its deep appreciation for the invaluable contribution made by Mr. Deepak Bhimani to the growth and Corporate Governance of the Company. The Board further wished for his good health and success in all his future endeavors.
Further The Board of directors, on recommendation of the Nomination and Remuneration Committee had appointed Mr. Pankaj M. Mehta (DIN: 09579581) as an Additional Director (Non-Executive, Independent) of the Company with effect from May 30, 2022. The Members of the Company at their 30th Annual General Meeting held on August 27, 2022 have approved the appointment of Mr. Pankaj M. Mehta as an Independent Director for the period of five years.
c) 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 under Section 149 of the Act and rules made there under and Regulation 16 and other applicable regulations, if any of the SEBI (LODR), as amended.
In the opinion of the Board, all the Independent Directors are persons of possessing attributes of integrity, expertise and experience (including proficiency in terms of Section 150(1) of the Act and applicable rules thereunder). Further, in terms of Section 150 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company have included their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs.
d) Pecuniary relationship or transactions with the Company
During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/ Committee(s) of the Company.
e) Board Evaluation
Pursuant to the provisions of the Act read with the rules made thereunder, Regulation 17(10) of the SEBI (LODR) and the Circular issued by SEBI, the evaluation of the Annual Performance of the Directors/ Board/ Committees was carried out for the Financial Year 2022-23.
The details of the evaluation process are set out in the Corporate Governance Report which forms a part of this report.
f) Policy on Directors' Appointment and Remuneration
The Company has devised a Policy for remuneration for the 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 and available at the weblink provided in the Annexure A. Salient features of Nomination and Remuneration Policy is appended as Annexure II to this Report.
g) Familiarisation Program
The details of programs for familiarisation of Directors with the Company are put up on the website of the Company. The weblink of the same is provided in the Annexure A
h) Number of meetings of the Board of Directors
During the year the Board of Directors met Four (4) times. The details of the Board Meeting are provided in the Corporate Governance report forming part of this report. The intervening gap between the meetings was within the period prescribed under the Act and the Listing Regulations.
18. Board Committees:
i) Audit Committee
As on March 31, 2023, 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 are as under;
^ Mrs. Sucheta N. Shah was inducted as Member of Audit Committee with effect from May 30, 2022 in place of Mr. Deepak V Bhimani.
All the recommendations made by the Audit Committee were accepted by the Board.
ii) Stakeholder's Relationship Committee
The Stakeholder s Relationship Committee of the Company comprises of 4 Directors, namely;
iii) Nomination and Remuneration Committee
The Nomination and Remuneration Committee of the Company comprises of 3 Directors; all are Independent Directors.
During the period under review, Mr. Deepak V Bhimani resigned from Directorship and ceased to be Member of Committee w.e.f May 30, 2022.
A detailed write up of the above committees is mentioned in the Corporate Governance section of this report.
iv) Risk Management Committee
As on March 31, 2023, the Risk Management Committee of the Company comprises of 3 Members. The members of the Risk Management Committee are as under:
During the period under review, two meetings of the Risk Management Committee was held on July 19, 2022 and January 12, 2023. The requisite quorum was present for all the meetings.
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. The Company, through the Risk Management process, aims to contain the risk within the risk appetite. There are no risks which in the opinion of the Board threaten the existence of the Company. Further, pursuant to SEBI amendment dated May 5, 2021, the Board of Directors have constituted a Risk Management Committee and policy. The Risk Management policy of the Company is available at the website of the Company and can be access through link provided in Annexure A.
19. Corporate Social Responsibility ("CSR"):
- CSR Committee
The CSR Committee of the Company comprises of the following members:
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- CSR Policy
The Board of Directors, based on the recommendations of the 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. weblink of CSR policy is available in Annexure A.
- CSR spent during the Financial Year 2022-23
In accordance with Section 135 of the Act, the required amount to be spent on CSR activities during the year under review was 0.70 crores. The company has spent 0.09 crores in the current financial year. 0.61 crore was utilized from the excess spent of 0.71 crore from the previous financial year. An excess amount of 0.10 crore is available to meet CSR obligation of subsequent financial years.
During the year under review, the Company continued its activities of rural development and promoting education to farmers.
The disclosures as per Rule 8 of Companies Corporate Social Responsibility Policy) Rules, 2014 for the financial year 2022-23 are annexed herewith as Annexure III to this Report in the prescribed format.
20. Auditors:
i) Statutory Auditors
At the 30th Annual General Meeting held on August 27, 2022, M/s. T.P. Ostwal & Associates LLP, Chartered Accountants, Mumbai (Firm's Registration no. 124444W/ W100150) were appointed as Statutory Auditors of the Company to hold office from the conclusion of the 30th Annual General Meeting until the conclusion of the 35th Annual General Meeting to be held in year 2027.
The Company has received written consent and a certificate from M/s. T.P. Ostwal & Associates LLP, Chartered Accountants, Mumbai (Firm's Registration no. 124444W/ W100150) that they satisfy the criteria provided under Section 141 of the Act and that the appointment is in accordance with the applicable provisions of the Act and rules framed thereunder and are not disqualified from continuing as Statutory Auditor of the Company.
Auditors Report:
The Report given by M/s. T.P. Ostwal & Associates LLP, Statutory Auditors on the financial statement of theCompany for the year 2022-23 is part of the Annual Report. There has been no qualification, reservation or adverse remark or disclaimer in their Report.
ii) Cost Auditor
The Company has maintained cost records for certain products as specified by the Central Government under Section 148(1) of the Act. Further as per the requirements of Section 148 of the Act read with The Companies (Cost Records and Audit) Rules, 2014 as amended, 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 (FRN 00294), Cost Accountants, Mumbai to audit the cost accounts of the Company for the financial year from April 1, 2023 to March 31, 2024 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 31st Annual General Meeting. The Cost Audit Report in respect of Financial Year 2022-23 will be filed within the due date.
iii) Internal Auditor
Pursuant to the provisions of section 138 of the Act read with the rules made thereunder, M/s. K. C. Mehta & Co., Chartered Accountants, conducted the Internal Audit of the Company for the financial year 2022-23. TheAudit Committee at its meeting held on May 27, 2023 recommended to the Board the appointment of M/s. K. C. Mehta & Co., Chartered Accountants as the Internal Auditor of the Company for financial year 2022-23. The said proposal for appointment of M/s. K. C. Mehta & Co., Chartered Accountants 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 Act read with rules made thereunder and SEBI (LODR), the Board had appointed M/s. V. V. Chakradeo & Co., Company Secretaries (C.P. No. 1705) to conduct Secretarial Audit of the Company and its material subsidiary for the financial year ended March 31, 2023. Further the Company is also required to obtain Secretarial Compliance Report from Practicing Company Secretary to certify the compliance of provisions of all the SEBI (LODR).
Accordingly, the Secretarial Audit Report of the Company and its material subsidiary Company, Ihsedu Agrochem Private Limited along with the Secretarial Compliance Report, for the Company, for the financial year ended March 31, 2023 was issued by M/s. V. V. Chakradeo & Co., Company Secretaries forms part of this report and is appended as Annexure IV.
The Company has adhered to the applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to Meetings of the Board of Directors and General Meetings, respectively.
The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
Further the Board of Directors of the Company has appointment of M/s Dhrumil M. Shah & Co. LLP., Practicing Company Secretaries as the Secretarial Auditor of the Company for financial year 2023-24.
21. Reporting of Frauds by Auditors:
During the year under review, the Statutory Auditors, Cost Auditors 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 Act, details of which needs to be mentioned in this Report.
22. Annual Return:
The Annual Return of the Company as on March 31, 2023 in Form MGT - 7 in accordance with Section 92(3) of the Act read with the Companies (Management and Administration) Rules, 2014, is available on the website of the Company at www.jayantagro.com.
23. 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.
24. Details of establishment of Vigil Mechanism for directors and employees:
Pursuant to the provisions of section 177(9) & (10) of the Act and as required under SEBI (LODR), the Company has established a vigil mechanism for directors and employees to report genuine concerns. The details of the Whistle Blower Policy are available in the Corporate Governance report annexed to this report. The Whistle Blower Policy is also uploaded on the website of the Company. Weblink of the same is available at Annexure A.
25. Particulars of Employees
The Company has 382 Employees as on March 31, 2023. In accordance with the provisions of Section 197(12) of the Act read with rules made thereunder, 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 as amended are available for inspection by any Member and may write to the Company Secretary for the same, up to the date of the 31st AGM. Any Member interested in obtaining such information may write to the Company Secretary at investors@jayantagro.com and the same will be furnished on such request.
26. Corporate Governance Report:
As per Regulation 34 read with Schedule V of SEBI Listing Regulations, a separate section on Corporate Governance practices followed by the Company together with a Certificate from Company's Statutory Auditor, M/s. T. Ostwal & Associates LLP, Chartered Accountants, Mumbai M/s. and Certificate V. V. Chakradeo & Co., Company Secretaries., confirming compliance forms an integral part of this report.
27. Business Responsibility and Sustainability Report:
SEBI, vide its circular dated May 10, 2021, made Business Responsibility and Sustainability Report (BRSR) mandatory for the top 1,000 listed companies (by market and material orderscapitalization) from financial year 2022-2023. The disclosure of BRSR is statutorily not required by your Company for financial year 2022-23. However, as good governance practice your Company has adopted the disclosure of BRSR voluntarily for financial year 2022-2023. As per Regulation 34 read with Schedule V of SEBI Listing Regulations, Business Responsibility and Sustainability Report describing the initiatives taken by the Company from environmental, social and governance perspective, forms an integral part of this report.
28. Directors' Responsibility Statement:
Based on the framework of Internal Financial Controls and compliance systems established and maintained by the Company, the work performed by the Internal, Statutory, Cost and Secretarial Auditors including Audit of Internal Financial Controls over financial reporting by the Statutory Auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company's Internal Financial Controls were adequate and effective during the reporting period.
Accordingly, pursuant to Section 134(3)(c) and 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that:
(a) In the preparation of the annual accounts for the financial year ended March 31, 2023, 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 company as on March 31,2023and profitof the the company for the year ended on that date;
(c) The 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 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 Act) 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 regulators or courts or tribunals impacting the going concern status and Company's operations in future
There has been no significant by the regulators or courts or tribunals impacting the going concern status and Company's operations in future.
30. Transfer of Unpaid/Unclaimed Dividend Amounts to IEPF:
Pursuant to provision of Section 124 and 125 of the Act, the unclaimed / unpaid Equity Share Dividend for F.Y 2014-15 amounting to 1,14,230/-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 Central Government. Details of Dividend transfered to Investor Education and Protection Fund is provided on Company's website under the weblink www.jayantagro.com
31. TransferofSharestoInvestorEducationandProtectionFund:
In Accordance with the Investor Education and Protection Fund (IEPF) Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended, During the year under review, the Company had transferred 26,718 equity shares of face value of 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.
32. 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, 2023 are as under:-
33. Industrial Relations:
The Relations between the Employees and the Management have remained cordial, during the year.
34. Environment, Health and Safety:
Your Company has declared the Environment, Health and Safety days and continued their commitments towards Environment, Health and Safety. The Committee formed for the purpose of Environment, Health and Safety have continued to educate and motivate the employees on various aspects Environment, Health and Safety through training program and seminars.
During the year following safety program were held on the dates mentioned therein.
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 ISO 45001:2018 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. Other Disclosures:
38. 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 & Dhanora 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
Abhay V. Udeshi
Chairman
Place: Mumbai,
Date: May 27, 2023
ANNEXURE I
AOC – 1
(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)
Part "A": Subsidiaries
Statement containing salient features of the financial statement of subsidiaries/associate companies/joint ventures ( in Lakhs)
Notes:
Part "B": Associates and Joint Ventures
Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures ( in Lakhs)
1. Names of associates or joint ventures which are yet to commence operations: Nil
2. Names of associates or joint ventures which have been liquidated or sold during the year: Nil
(DIN No. 00355598)
Hemant V. Udeshi
Managing Director
(DIN No. 00529329)
Vikram V. Udeshi
Chief Financial Officer
Dinesh M. Kapadia
Company Secretary
Place: Mumbai
ANNEXURE II
Salient Features of Nomination and Remuneration Policy
The Board vide its resolution passed at their meeting dated 5th July, 2014 re-constituted the Nomination and Remuneration Committee ("Committee"). The terms of reference for the Committee interalia include the following alongwith detailed terms of reference as mentioned in this policy:
Therefore, in furtherance to the aforementioned terms of reference, the Committee has formulated the Nomination and Remuneration Policy in accordance with Section 178 of the Act. The policy has been placed on the website of the Company viz. www.jayantagro.com.
ANNEXURE III
#CSRStart#
Annual Report on CSR Activities
1. A brief outline of the Company's CSR Policy:
The CSR Policy of the Company was approved by the Board of Directors at the Meeting of the Company and has been uploaded on the website of the Company. Broadly the Company has proposed to undertake activities relating to rural development and providing vocational education for the livelihood of the backward class of the society and undertaking such other activities within the purview of the section 135 read with schedule VII of the Act. The Policy of the Company is available on the web link www.jayantagro.com. A write up on the CSR activities and endeavors has been mentioned in the Report on Corporate Governance forming a part of the Board Report.
2. Composition of CSR Committee as on March 31, 2023:
^ Mr. Deepak V. Bhimani ceased to be a Chairman and member of the Committee due to his resignation as Independent Director effective May 30, 2022 and
Mukesh C. Kahgram was appointed as Chairman of CSR Committee w.e.f May 30, 2022.
During the year under review, one CSR Committee Meeting was held on May 30, 2022.
3. Provide the web-link where Composition of CSR committee, CSR Policy and CSR projects approved by the board are disclosed on the website of the company: www.jayantagro.com
4. Provide the executive summary along with web-link(s) of Impact Assessment of CSR Projects carried out in pursuance of sub-rule (3) of rule 8, if applicable: Not applicable
5. (a) Average net profit of the company as per section 135(5):Rs. 34.83 Crores
(b) Two percent of average net profit of the company as per sub-section (5) of section 135: Rs. 0.70 Crores
(c) Surplus arising out of the CSR Projects or programmes or activities of the previous financial years:NIL
(d) Amount required to be set-off for the financial year, if any:Rs. 0.61 Crores
(e) Total CSR obligation for the financial year [(b)+(c)-(d)]:Rs. 0.09 Crores
6. (a) Amount spent on CSR Projects (both Ongoing Project and other than Ongoing Project): Rs. 0.09 Crores
(b) Amount spent in Administrative Overheads: NIL
(c) Amount spent on Impact Assessment, if applicable: Not Applicable
(d) Total amount spent for the Financial Year [(a)+(b)+(c)]: Rs. 0.09 Crores
(e) CSR amount spent or unspent for the Financial Year:
(f) Excess amountforsetoff,ifany:
*Note: In accordance with Section 135 of the Act , the required amount to be spent on C SR activities during the year under review was 0.70 crores. The company has spent 0.09 crores in the current financial year. 0.61 crore was utilized from the excess spent of 0.71 crore from the previous financial year. An excess amount of 0.10 crore is available to meet CSR obligation of subsequent financial years.
7. Details of Unspent CSR Amount for the preceeding three financial years: Not applicable
Amount transferred to any fund specified under Schedule VII as per section 135(6), if any.
8. Whether any capital assets have been created or acquired through Corporate Social Responsibility amount spent in the Financial Year: No If Yes, enter the number of Capital assets created/ acquired: Not Applicable Furnish the details relating to such asset(s) so created or acquired through Corporate Social Responsibility amount spent in the Financial Year: Not Applicable
9. Specify the reason(s), if the company has failed to spend two per cent of the average net profit as per section 135(5):
Not Applicable
Mukesh C. Khagram
Chairman of CSR Committee
Date: May 27,2023
#CSREnd#
ANNEXURE IV
FORM NO. MR-3
#SARStart#
SECRETARIAL AUDIT REPORT
For the Financial year ended March 31, 2023
(Pursuant to section 204 (1) of the companies Act, 2013 and Rule no. 9 of the Companies (Appointment and Remuneration of Managerial Personnel rules, 2014)
To,
The Members,
Jayant Agro - Organics Limited, Mumbai.
I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Jayant Agro-Organics Limited (hereinafter called the Company). Secretarial audit was conducted in a manner that provided me in a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.
Based on my verification of the Company's books, papers, minute books, forms and returns filed and other records maintained by the company and also the information provided by the company its officers, agents and authorised representatives during the conduct of secretarial audit, I hereby report that in my opinion the company had during the audit period covering the financial year ended on March 31,2023 complied with the statutory provisions listed hereunder and also that the company has proper board-processes and compliance mechanism in place to the extent in the manner and subject to the reporting made hereinafter:
I have examined the books papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on March 31, 2023 according to the provisions as may be applicable to the Company of:
I have also examined compliance with the applicable clauses of the following:
(ii) Listing Agreements entered into by the Company with BSE Ltd. and the National Stock Exchange of India Ltd. and The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above.
I further report that:
I further report that there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
I also Report that the during the period under review, pursuant to the direction of the National Company Law Tribunal (NCLT), Mumbai Bench, the Company had conducted the meeting of equity shareholder of the Company on August 27, 2022 through Video Conference/Other Audio Visual Mode for approval of the Scheme of Merger by Absorption between Jayant Finvest Limited and Jayant Agro-Organics Limited (the Scheme). The Meeting was duly conveyed in compliance with the applicable laws and directives of NCLT, and the Scheme was approved by the special resolution as well as by the majority of the public equity shareholders. The Company has filed the petition for sanctioning the Scheme with NCLT, Mumbai Bench.
For V. V. Chakradeo & CO.
V. V. Chakradeo COP: 1705 FCS: 3382
UDIN: F003382E000395807
ANNEXURE A
Jayant Agro - Organics Limited, Mumbai
My report of even date is to be read along with this letter:
1. Maintenance of secretarial record is responsibility of the management of the Company. My responsibility is to express an opinion on these secretarial records based on our audit.
2. I have followed the audit practices and processes as were appropriate to obtain reasonable assurance about correctness of the contents of the secretarial record. The verification was done on test basis to ensure that the correct facts are reflected in secretarial records. I believe that the practices and processes, I followed provide a reasonable basis for our opinion.
3. I have not verified the correctness and appropriateness of financial records and books of accounts of the Company.
4. Wherever required, I obtained management representation about the compliance of laws, rules, regulations, norms and standards and happening of events.
5. The compliance of the provisions of the Corporate and other laws, rules, regulations, norms and standards is the responsibility of the management. My examination was limited to the verification of procedure on test basis.
6. The secretarial audit report is neither an assurance as to the future viability of the Company nor of the efficiency effectiveness with which the management has conducted the affairs of the Company.
7. I have reported in my audit report, only those non-compliances, especially in respect of filing of applicable forms/ documents, which in my opinion are material and having major bearing on the financials of the Company.
FORM NO. MR-3 SECRETARIAL AUDIT REPORT
For the Financial year ended 31st March 2023
(Pursuant to section 204 (1) of the companies Act, 2013 and rule No. 9 of the Companies (Appointment and Remuneration of managerial Personnel rules, 2014)
Ihsedu Agrochem Private Limited,
Mumbai.
I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Ihsedu Agrochem Private Limited (hereinafter called the Company). Secretarial audit was conducted in a manner that provided me in a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.
(i) Secretarial Standards issued by The Institute of Company Secretaries of India.
I further report that there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable operative laws, rules, regulations and guidelines.
Date: May 18, 2023
UDIN: F003382E000331490
Mumbai
1. Maintenance of secretarial record is responsibility of the management of the Company. My responsibility is to express an opinion on these secretarial records based on my audit.
2. I have followed the audit practices and processes as were appropriate to obtain reasonable assurance about correctness of the contents of the secretarial record. The verification was done on test basis to ensure that the correct facts are reflected in secretarial records. I believe that the practices and processes, I followed provide a reasonable basis for my opinion.
6. The secretarial audit report is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company.
7. I have reported in my audit report, only those non compliances, especially in respect of filing of applicable forms/ documents, which in my opinion are material and having major bearing on the financials of the Company.
For V. V. Chakradeo& CO.
Place: Mumbai Date: May 18, 2023
UDIN: 003382E000331490
#SAREnd#
ANNEXURE V
A. Conservation of Energy
In line with Company's commitment towards conservation of energy, all plants continued with their endeavour to make more efficient use of energy through improved operational and maintenance practices.
The Company is continuously putting efforts to improve Energy Management by way of monitoring energy related parameters on regular basis. The Company is committed to transform energy conservation into a strategic business goal fully along with the sustainable development of Energy Management System. To achieve the above objectives the following measures are undertaken by the Company:
B. Technology Absorption, Adoption and Innovation and Research & Development (R&D):
Research and technology helps create superior value by harnessing internal research and development skills and competencies and creates innovations in emerging technology domains related to the Company's businesses. Research and technology focuses on
(i) new products, processes and product development to support existing business, create breakthrough technologies for new businesses and upgradation of the quality to maintain leadership position in Castor . industry.
(ii) Benefits derived as a result of the above efforts: -
(iii) Expenditure on R&D: Provided in the notes to accounts
C. Foreign Exchange Earning and Outgo:
Details of Foreign Exchange used and earned are provided in Notes on Financial Statements.
ANNEXURE VI
Disclosure under section 197 (12) and Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
(i) the ratio of the remuneration of each director* to the median remuneration of the employees of the company for the financial year & the percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager in the financial year;
* Since the Independent Director are not paid remuneration apart from sitting fees for attending the meetings of the Company, details of only executive directors are incorporated.
Weblink of policies/procedures hosted on the website of the Company: