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Your Directors have pleasure to present 15th Annual Report on the business and operations of the Company together with the audited financial statements (standalone and consolidated) for the year ended 31st March, 2019.
|FINANCIAL REVIEW/RESULTS||(र in lakhs)|
|Net sales / Income from Operation||11966.08||14073.16||12411.29||14264.19|
|Interest & Finance Charges||99.83||73.65||103.37||73.75|
|Profit /(Loss ) before Tax||521.88||4109.65||(204.50)||3842.36|
|Current tax (provision for tax)||129.21||198.23||129.21||198.23|
|Deferred tax asset||32.49||1096.54||(166.98)||1028.83|
|Tax for earlier years||-||9.85||-||9.85|
|Total Tax Expense||161.70||1304.62||(37.77)||1236.91|
|Profit /(Loss ) after Tax||360.18||2805.04||(159.71)||2607.00|
|Profit /(Loss ) to be carried to the Balance Sheet||365.60||2806.61||(159.71)||2607.00|
|Paid up Equity Share Capital ( Face Value of C10/- each )||6090.04||6090.04||6090.04||6090.04|
|Reserve excluding revaluation reserve||11,594.48||11,336.47|
|Basic EPS ( in Rupees not annualized ) Excluding extra ordinary items||0.59||4.96||(0.11)||4.61|
|Diluted EPS ( in Rupees not annualized) Excluding extra ordinary items||0.59||4.96||(0.11)||4.27|
REVIEW OF OPERATIONS/STATEMENT OF AFFAIRS
Company was successful to achieve its target fixed at the beginning of the financial year and generated the revenue from operations during the financial year ended 31st March 2019 amounted to INR 11966.08 Lakhs as compared to INR 14073.16 Lakhs during the previous year ended 31.03.2018. The Turnover of the company has decreased by 14.98% in comparison to previous year.
The company is expanding its business and requires surplus to be ploughed back in the company. Hence, your directors are constraint to declare any dividend. During year under review (Financial Year 2018-19), the Board of Directors has not recommended any dividend.
In accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as Listing Regulations) and Section 136 of the Companies Act, 2013 read with Rule 10 of the Companies (Accounts) Rules, 2014, the abridged Annual Report containing salient features of the financial statements, including Consolidated Financial Statements, for the financial year 2018-19, along with statement containing salient features of the Directors Report (including Management Discussion & Analysis and Corporate Governance Report) is being sent to all shareholders who have not registered their email address(es) for the purpose of receiving documents/ communication from the Company in electronic mode. Please note that you will be entitled to be furnished, free of cost, the full Annual Report 2018-19, upon receipt of written request from you, as a member of the Company. Full version of the Annual Report 2018-19 containing complete Balance Sheet, Statement of Profit & Loss, other statements and notes thereto, including Consolidated Financial Statements, prepared as per the requirements of Schedule III to the Companies Act, 2013, Directors Report (including Management Discussion and Analysis, and Corporate Governance Report is being sent via email to all shareholders who have provided their email address(es). Full version of Annual Report 2018-19 is also available for inspection at the corporate o3ce of the Company during working hours up to the date of ensuing Annual general meeting (AGM). It is also available at the Companyर s website at www.svendgaard.com.
CONSOLIDATED FINANCIAL STATEMENTS
In compliance with the applicable provisions of Companies Act, 2013 including the Indian Accounting Standard Ind AS-110 on Consolidated Financial Statements, this Annual Report also includes Consolidated Financial Statements for the financial year 2018- 19. Consolidated Turnover was C12,411.29 Lakhs as against C14,264.19 lakhs in the previous year. Net Profit after Tax for the year stood at C (159.71) lakhs against C2,607.02 Lakhs in the previous year.
OPERATIONS AND BUSINESS PERFORMANCE
Kindly refer to the integrated reporting and Management Discussion & Analysis and Corporate Governance Report which forms part of this report.
JHS believes in adopting the best practices of Corporate Governance, Corporate Governance Principals are enshrined in the spirit of JHS, which form the core values of JHS. These guiding principles are also articulated through the companys code of business conduct, corporate governance guidelines, character of various subcommittees and disclosure policy.
JHS has adopted the industry best practices of Corporate Governance and aims to run its business on the highest principles of governance and ethics. At JHS, Corporate Governance is more than just adherence to the statutory and regulatory requirements. It is equally about focusing on voluntary practices that underlie the highest levels of transparency. JHSs governance framework is driven by the objective of enhancing long term stakeholder value without compromising on ethical standards and corporate social responsibilities.
A certificate from M/s Mohit & Associates, Practising Company Secretary, regarding compliance of the conditions of Corporate Governance, as stipulated under Schedule V of the Listing Regulations is attached as Annexure 1 and forms part of this report. Certificate of the CEO/CFO, inter-alia, confirming the correctness of the financial statements, compliance with Companyर s Code of Conduct, adequacy of the internal control measures and reporting of matters to the auditors and the Audit committee in terms of Regulation 17 of the Listing Regulations is attached in the Corporate Governance report, and forms part of this report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. Ajay Bansal, Chief Financial O3cer(CFO) of the company, was ceased his o3ce on account of resignation with e3ect from 01.06.2018, in his Place Mr. Ashish Goel was appointed as new CFO w.e.f 14th Aug, 2018.
Mrs. Balbir Verma, was appointed as an additional director to the o3ce of an Independent Women Director w.e.f. 17.09.2018, appointment of her as the regular director is due at the ensuring Annual General Meeting of the Company.
Pursuant to Section 152 and other applicable provisions, if any, of the Companies Act, 2013, one-third of such of the Directors as are liable to retire by rotation, shall retire every year and, if eligible, o3er them for re-appointment at every AGM. Consequently, Mr. Vanamali Polavaram, Non-Executive Director will retire by rotation at the ensuing AGM, and being eligible, o3ers himself for re-appointment in accordance with the provisions of the Companies Act, 2013.
During the year, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company.
The key Managerial personnel (KMP) in the Company as per section 2(51) and 203 of the Companies Act, 2013 are as follows:
|Mr. Nikhil Nanda||-||Managing Director|
|Mr. Ashish Goel||-||Chief Financial O3cer|
|Mr. Paramvir Singh Pabla||-||Chief Executive O3cer|
|*Mr. Sanjeev Kumar Singh||-||Company Secretary &|
*Mr. Sanjeev Kumar Singh has resigned as Company Secretary from JHS Svendgaard Laboratories Limited on 07th June, 2019.
POLICY ON DIRECTORS APPOINTMENT AND POLICY ON REMUNERATION
Pursuant to Section 134(3)(e) and Section 178(3) of the Companies Act, 2013, the policy on appointment of Board members including criteria for determining qualifications, positive attributes, independence of a Director and the policy on remuneration of Directors, KMP and other employees is attached as Annexure 2 & 3 respectively, which forms part of this report.
PARTICULARS OF REMUNERATION OF DIRECTORS/ KMP/ EMPLOYEES
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure 4 which forms an integral part of this report. The information showing names and other particulars of employees as per Rule 5(2) and 5(3) of the aforesaid Rules forms part of this report. However, as per first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the members of the Company and others entitled thereto. The said information is available for inspection by members at the corporate o3ce of the Company during business hours on all working days upto the date of ensuing annual general meeting. Any member interested in obtaining a copy thereof, may also write to the Company Secretary at the corporate o3ce of the Company.
COMMITTEES OF THE BOARD
Currently, the Board has four committees: the Audit Committee, the Nomination & Remuneration Committee, the Stakeholders Relationship Committee, the Corporate Social Responsibility Committee. A detailed note on the composition of the Board and its committees is provided in the Corporate Governance Report section of this report.
The Company has duly constituted an Audit Committee, whose detailed composition and powers are provided in the Corporate Governance Report. There were no recommendations of the Audit Committee which have not been accepted by the Board during the financial year..
NUMBER OF BOARD & COMMITTEE MEETINGS
During the year under review, five Board meetings, five Audit Committee meetings, four Stakeholders Relationship Committee meetings, two Nomination & Remuneration Committee meetings and one independent directors meeting were convened and held. Details and attendance of such Board & Committees meetings are provided in Corporate Governance Report Annexed herewith and forming integral part of this report.
DECLARATION OF INDEPENDENCE BY DIRECTORS
Pursuant to the provisions of Sub-Section (6) of Section 149 of the Companies Act, 2013, the Company is in receipt of the Declaration given by each Independent Directors meeting the criteria of Independence as provided is received and taken on record.
PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS
Pursuant to applicable provisions of the Companies Act, 2013 read with the Listing Regulations, the Board, in consultation with its Nomination & Remuneration Committee, has formulated a framework containing, inter-alia, the criteria for performance evaluation of the entire Board of the Company, its Committees and individual Directors, including Independent Directors.
A structured questionnaire, covering various aspects of the functioning of the board and its Committee, such as, adequacy of the constitution and composition of the Board and its Committees, matters addressed in the Board and Committee meetings, processes followed at the meeting, Boardर s focus, regulatory compliances and Corporate Governance, etc., is in place. Similarly, for evaluation of individual Directors performance, the questionnaire covering various aspects like his/her profile, contribution in Board and Committee meetings, execution and performance of specific duties, obligations, regulatory compliances and governance, etc., is also in place.
Board members had submitted their response for evaluating the entire Board, respective committees of which they are members and of their peer Board members, including Chairman of the Board.
The Independent Directors had a separate meeting held on February 12, 2019. No Directors other than Independent Directors had attended this meeting. Independent Directors discussed inter-alia the performance of Non-Independent Directors and Board as a whole and the performance of the Chairman of the Company after taking into consideration the views of Executive and Non- Executive Directors.
The performance evaluation of all the Independent Directors have been done by the entire Board, excluding the Director being evaluated. On the basis of performance evaluation done by the Board, it shall be determined whether to extend or continue their term of appointment, whenever the respective term expires.
The Directors expressed their satisfaction with the evaluation process.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provision under Section 134(5) of the Companies Act, 2013, with respect to the Directors Responsibility Statement, the directors confirm:
i. That in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;
ii. That they had 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 a3airs of the Company at the end of the financial year and of the profit of the Company for that period;
iii. That they had taken proper and su3cient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. That they had prepared the annual accounts on a going concern basis;
v. That they had laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and were operating e3ectively;
vi. That they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating e3ectively.
STATUTORY AUDITORS & THEIR REPORT
Pursuant to the provisions of section 139 of the Companies Act, 2013, M/s S. N. Dhawan & Co., Chartered Accountants, (Firm Regn. No. 00050N) were appointed as Statutory Auditors of the Company for a term of five consecutive years, to hold o3ce from the conclusion of the 11th Annual General Meeting held on 1st September 2015 till the conclusion of 16th Annual General Meeting to be held in Calendar year 2020. Pursuant to the provisions of Section 139 to 141 of the Companies Act, Company has received a certificate from M/s S. N. Dhawan & Co., Chartered Accountants to the e3ect that their re-appointment, if made, would be within the prescribed limits under Section 141(3) (g) of the Companies Act, 2013 and relevant rules prescribed thereunder and that they are not disqualified for re-appointment and no pending proceedings against them or any of their partners with respect to professional matters of conduct.
The auditor have also confirmed that they have subjected themselves to the peer review process of the Institute of Chartered Accountants of India (ICAI) and holds a valid certificate issued by the Peer Review Board of the ICAI.
Report of Statutory Auditors
Auditors Qualification and Managements Representation thereon are as follows:
The auditors report was issued without any qualification or adverse remark against the company.
The amounts received from P&G on account of Settlement should be considered and accounted for as Income only in 2018-19 as the Arbitral Tribunal has given its Final Award on 03.04.2018 and two SLPs from the Supreme court were withdrawn on 06.04.2018 & 12.04.2018. The applicable TDS on the respective settlement amounts have been deducted and deposited during the FY 2018-19 only. One of the conditions in the settlement agreement is pending. Though, it was not a condition precedent to the payment of the settlement amount, however in the terms of the agreement and thus unless not concluded, the Settlement Agreement cant be termed as completed as the material conditions precedent were dependent on the authorities which were not within the control of the company. Thus, it was inappropriate in view of the management, to recognize the income in FY 2018-19. Accordingly, net compensation of the settlement amounting to ##Rs. ##2,727.21 lakhs has been accounted as income during the year ended 31st March 2019 and as shown under exceptional items.
SECRETARIAL AUDITORS & THEIR REPORT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 M/s Mohit & Associates, Practising Company Secretaries, was appointed the Secretarial Auditor for the financial year 2018-19 to conduct the secretarial audit of the company, The Secretarial Audit Report submitted by them in the prescribed form MR- 3 is attached as Annexure 5 and forms an integral part of this report.
There are no qualifications or observations or other remarks by the Secretarial Auditors in their Report issued by them for the financial year 2018-19 which call for any explanation from the Board of Directors.
M/s Mohit & Associates, Practising Company Secretaries, have been re-appointed to conduct the Secretarial Audit of the Company for the financial year 2019-20. They have confirmed that they are eligible for such re-appointment.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT
The Statutory Auditors or Secretarial Auditors of the
Company have not reported any frauds to the Audit Committee or to the Board of Directors under Section 143(12) of the Companies Act, 2013, including rules made thereunder.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
According to Section 134(5) (e) of the Companies Act, 2013 the term Internal Financial Control (IFC) means the policies and procedures adopted by the company for ensuring the orderly and e3cient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.
The Company has a well-placed, proper and adequate IFC system which ensures that all assets are safeguarded and protected and that the transactions are authorised, recorded and reported correctly. The Companys IFC system also comprises due compliances with Companyर s policies and Standard Operating Procedures (SOP##Rs. ##s) and audit and compliance, supplemented by internal audit checks from M/s VSD & Associates, Chartered Accountants, the Internal Auditors. The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the majority of the transactions in value terms. Independence of the audit and compliance is ensured by direct reporting of Internal Audit Division and Internal Auditors to the Audit Committee of the Board. Additionally during the year M/s MAZARS Advisory Private Limited have also been engaged for providing assistance in improvising IFC framework (including preparation of Risk & Control Matrices for various processes) and deployment of Self-Assessment Tool.
The Companies Act, 2013 re-emphasizes the need for an e3ective Internal Financial Control system in the Company. The Board has adopted policies and procedures for ensuring the orderly and e3cient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures. The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis, which forms part of this report.
Development and implementation of Risk Management
JHS is having comprehensive risk assessment and minimization procedure in place, which are reviewed by the Board periodically. The Board is responsible for preparation of Risk Management plan, reviewing, monitoring and updating the same on regular and ongoing basis. Audit Committee is also taking care for critical risks on yearly basis.
Further, the risks control systems are instituted to ensure that the risks in each business process are mitigated. The Audit Committee of the Board is responsible for the overall risk management in coordination with Internal Auditor who report directly to the Board. In the opinion of the Board there have been no identification of elements of risk that may threaten the existence of the company.
NATURE OF BUSINESS
There has been no change in the nature of business of the Company. However, during the financial year under review, M/s JHS Svendgaard Retail Ventures Private Limited, has become the subsidiary of the company.
JHS Svendgaard Retail Ventures Pvt. Ltd. is engaged into the Chain of Retail Stores at various Airports in or outside India. The First Retail Store of the company is functional at the Indira Gandhi International Airport (T2 Terminal) at Delhi. The company has plan to open 150 stores at various Airports in coming future.
During the year under review there are three subsidiaries i.e. M/s JHS Svendgaard Brands Limited (formerly known as JHS Svendgaard Dental Care Limited) and M/s JHS Svendgaard Mechanical and Warehouse Private Limited, as on March 31, 2019 and M/s JHS Svendgaard Retail Ventures Private Limited (formerly known as JHS Svendgaard Infrastructure Private Limited) as on April 13, 2019.
There are no associate companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act"). There has been no material change in the nature of the business of the subsidiaries.
Pursuant to Section 129 (3) of the Companies Act, 2013 and Ind AS-110 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company include the financial statements of its subsidiaries.
Further, a separate statement containing salient features of the financial statements of the subsidiaries in the prescribed Form AOC-1 has been disclosed in the consolidated financial statements.
Pursuant to the provisions of section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries, are available on the website of the Company www.svendgaard. com. The company will make available physical copies of these documents upon request by any shareholders of the company/subsidiary interested in obtaining the same.
These documents can also be inspected at the registered o3ce of the company during business hours up to the date of ensuing AGM.
EXTRACT OF ANNUAL RETURN
Pursuant to the provision of Section 92(3) of the companies Act, 2013 read with Rule 12 (1) of the Companies (Management and Administration) Rules, 2014, the extract of annual return as on 31st March 2019 is attached herein Annexure-6 in the prescribed Form MGT-9, which forms an integral part of this report.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The particulars of loans, guarantees and investments under section 186 of the Companies Act, 2013 as at the end of the financial year ended on 31st March 2019 have been disclosed in the stand alone financial statements of the company. Kindly refer the relevant note to these statements.
CONTRACTS / ARRANGEMENTS WITH RELATED PARTIES
With reference to Section 134(3)(h) of the Companies Act, 2013, all contracts and arrangements with related parties under Section 188(1) of the Act, entered by the Company during the financial year, were in the ordinary course of business and on an arms length basis. During the year, the company has not entered into any contract or arrangement with related parties which could be considered material (i.e transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements entered into individually or taken together with previous transactions during the financial year) according to the policy of the company materiality of Related party Transactions. (Annexure - 7).
The Company disclosed all related party transactions in relevant Notes to the Standalone Financial Statements of the year.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure - 8 and is attached to this report.
CORPORATE SOCIAL RESPONSIBILITY
Considering the last audited results of company, the Provisions of Section 135 of the Companies Act, 2013 has become applicable on the company and accordingly in compliance with the same, the company has constituted
34 a CSR Committee and formulates the CSR Policy of the Company which is available on the website of the Company www.svendgaard.com. The constitution of the Committee and the details of the meeting have been provided on the Corporate Governance Report, which forms an integral part of this report.
However, during the year under review, your Company did not spend any amount of the CSR activities due to non-availability of any ventures during the years. (Annexure 9)
MATERIAL CHANGES AND COMMITMENTS
Change in Capital Structure and Listing of Shares
As on the date paid up capital of the company is increased to C60,90,04,650 consisting of 6,09,00,465 fully paid up equity shares of C10/- each.
Out of the above 1,63,60,000 equity shares are pending for the listing approval at BSE and NSE.
DISCLOSURE ON DEPOSIT UNDER CHAPTER V
During the year under review the Company has neither accepted nor renewed any deposit in terms of Chapter V of the Companies Act, 2013 and Rules framed thereunder.
As per Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has established Vigil Mechanism through which Directors, Employees, and Business Associates may report unethical behaviour, malpractices, wrongful conduct fraud, violation of companys code of conduct without any fear of reprisal. Vigil Mechanism is being overseen by the Audit Committee for the genuine concerns expressed by the employees and the Directors. The provisions of this policy are in line with the provisions of the Section 177(9) of the Act. The said Policy provides adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided direct access to the chairman of the Audit Committee on reporting issues concerning the interests of employees and the Company. The policy as approved by the Board is uploaded on the Companys website at http://svendgaard.com/download/invester/ Vigil_Mechansim/VIGIL%20MECHANISM%20POLICY.pdf
DISCLOSURE ON SEXUAL HARASSMENT OF WOMEN AT WORK PLACE 3PREVENTION, PROHIBITION & REDRESSAL3 ACT, 2013
The Company has zero tolerance for sexual harassment at workplace. A policy has been adopted in line with the Sexual harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under. During the year, no complaints pertaining to sexual harassment were received.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERNS STATUS AND COMPANYर S OPERATIONS IN FUTURE
The Company has not received any significant or material orders passed by any regulatory Authority, Court or Tribunal which shall impact the going concern status and Companyर s operations in future.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments a3ecting 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 this report.
The Company maintained healthy, cordial and harmonious industrial relations at all levels. The enthusiasm and unstinting e3orts of employees have enabled the Company to remain at the leadership position in the industry. It has taken various steps to improve productivity across organization.
Your Directors take this opportunity to thank all customers, shareowners, suppliers, bankers, business partners/ associates, financial institutions and the Central Government and the State Government for their consistent support and encouragement provided by them in the past. Your Directors conveying their sincere appreciation to all employees of the Company and its subsidiaries and associates for their hard work and commitment. Their dedication and competence has ensured that the Company continues to be a significant and leading player in this industry.
Date: 06.08.2019 Place: New Delhi
For and on behalf of the Board of