JHS Svendgaard Laboratories Ltd Directors Report.


The Members,

Your Directors have pleasure in presenting the 16th Annual Report on the business and operations of the Company (JHS) together with the audited financial statements (standalone and consolidated) for the year ended 31st March, 2020.





31.03.2020 31.03.2019 31.03.2020 31.03.2019
Net sales / Income from Operation 13295.61 11966.08 13911.42 12411.29
Other Income 1175.32 577.59 1383.50 666.49
Interest & Finance Charges 136.11 99.83 195.25 103.37
Depreciation 742.97 698.11 876.07 708.78
Profit /(Loss) before Tax 179.09 521.88 (584.30) (204.50)
Tax Expense:
Current tax (provision for tax) 180.87 129.21 180.87 129.21
Deferred tax asset (152.38) 32.49 (253.28) (166.98)
Tax for earlier years (26.39) - (26.39) -
Total Tax Expense 2.10 161.70 (98.80) (37.77)
Profit /(Loss ) after Tax 176.99 360.18 (485.50) (166.73)
Profit /(Loss ) to be carried to the Balance Sheet 175.46 365.60 482.13 (159.71)
Paid up Equity Share Capital (Face Value of rs. 10/- each) 6090.05 6090.05 6090.05 6090.05
Reserve excluding revaluation reserve 12059.75 11909.40 11709.80 11,594.47
Basic EPS (in Rupees not annualized) Excluding extra ordinary items 0.29 0.59 (0.32) (0.11)
Diluted EPS ( in Rupees not annualized) Excluding extra ordinary items 0.29 0.59 (0.32) (0.11)


Company was successful to achieve its target fixed at the beginning of the last financial year and generated the revenue from operations during the financial year ended 31st March 2020 amounted to INR 13295.61 Lakhs as compared to INR 11966.08 Lakhs during the previous year ended 31.03.2019. The turnover of the Company has increased by 11.11% in comparison to previous year.


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 2019-20. Consolidated turnover of the Company was Rs. 13911.42 Lakhs as on March 31, 2020 as against Rs.12411.29 lakhs in the previous year. Net Profit after Tax for the year stood at Rs. (485.50) lakhs against Rs. (166.73) Lakhs in the previous year.


The Company is expanding its business and requires surplus to be ploughed back in the company. Hence, your Board is constraint to recommend any dividend for the last financial year.


The Board of the Company has not proposed to transfer any amount from the profit and loss account to the reserves of the Company


Kindly refer to the Management Discussion & Analysis 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 sub-committees 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.

Kindly refer to the report on Corporate Governance which forms part of this report.


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 Officer
Mr. Paramvir Singh Pabla - Chief Executive Officer
Mrs. Kirti Maheshwari - Company Secretary &
Compliance Officer


During the last financial year Mr. Sanjeev K Singh has resigned from the post of Company Secretary & Compliance Officer with effect from 07th June, 2019.Thereafter Mr. Chetan Batra was appointed as the Company Secretary & Compliance Officer w.e.f. 11th July, 2019, who resigned from his office with effect from 04th, May 2020 and thereafter Ms. Kirti Maheshwari was appointed as Company Secretary & Compliance Officer w.e.f 23rd June, 2020.

Post closure of financial year, Mr. Rajagopal Chakravarthi Venkateish (DIN: 00259537) and Mr. Kapil Minocha (DIN: 02817283), were appointed as Additional Independent

Directors on the Board w.e.f. 23rd June, 2020 for a period of 5 years subject to approval of members of the Company. Their appointment is recommended for approval of members at the ensuing Annual General Meeting (AGM).

Mr. Mukul Pathak, Independent Director of the Company, whose term as an Independent Director ceased on July 01, 2020 was re-appointed for another term of 5 years subject to approval of members of the Company at the recommendation of the Nomination and Remuneration Committee. His re- appointment is recommended for approval of members at the ensuing Annual General Meeting (AGM). The Board feels that his re-appointment will be in the interest of the Company.

Mr. Nikhil Nanda, Managing Director of the Company , who retires by rotation at the ensuing AGM and being eligible offers himself for re-appointment. The necessary resolution (s) for the same forms part of the Notice of the ensuing AGM. The tenure of Mr. Nikhil Nanda as the Managing Director of the Company ceased on July 01, 2020 and he was thereafter re-appointed for another term of 5 years subject to approval of members of the Company at the recommendation of the Nomination and Remuneration Committee. His reappointment is recommended for approval of members at the ensuing AGM. The Board feels that his re-appointment will be in the interest of the Company.


Pursuant to Section 134(3)(e) and Section 178(3) of the Companies Act, 2013 (Act), 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 1 & 2 respectively, which forms part of this report.


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 3 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.


The details of composition , details of meeting and attendance of members of the Audit Committee, the Nomination & Remuneration Committee, the Stakeholders Relationship Committee and the Corporate Social Responsibility Committeeis 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.


During the year under review, the Board met four times, details and attendance of such Board meetings are provided in Corporate Governance Report Annexed herewith and forming integral part of this report.


All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Act and Regulation 16 of SEBI Listing Regulations. The Independent Directors have also confirmed that they have complied with the Companys code of conduct for Directors and Senior Management Personnel.

All the Independent Directors of the Company have registered themselves in the data bank maintained with the Indian Institute of Corporate Affairs, Manesar (IICA). In terms of Section 150 of the Act read with Rule 6(4) of the Companies (Appointment & Qualification of Directors) Rules, 2014, the Independent Directors are required to undertake online proficiency self-assessment test conducted by the IICA within a period of one (1) year from the date of inclusion of their names in the data bank. The Independent Directors, whosoever is required, shall undertake the said proficiency test.

Details of the Familiarization Programme Module for Independent Directors is provided in the Corporate Governance of the Report.

In the opinion of the Board all independent directors possess strong sense of integrity and having requisite experience, qualification and expertise. For further details, please refer corporate governance report.


Pursuant to applicable provisions of the Companies Act, 2013 read with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015) ("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, Board 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 11, 2020. No Directors other than Independent Directors had attended this meeting. Independent Directors discussed inter-alia the performance of NonIndependent Directors and Board as a whole and the performance of the Chairman of the Company after taking into consideration the views of Executive and NonExecutive 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.


Pursuant to the provision under Section 134(5) of the Companies Act, 2013, with respect to the Directors Responsibility Statement, the Board 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 affairs 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 sufficient 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 effectively;

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 effectively.


Statutory Auditors

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 office 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 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 effect 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 reappointment and no pending proceedings against them or any of their partners with respect to professional matters of conduct.

The auditor has 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.

Accordingly, on the recommendation of the Audit Committee, the re-appointment of M/s S. N. Dhawan & Co., Chartered Accountants as the Statutory Auditors of the Company from the conclusion of ensuing AGM till the conclusion of 21st AGM of the Company is being recommended for the approval of the members of the Company at the ensuing AGM.


The auditors report was issued without any qualification or adverse remark against the Company and the Report is self - explanatory.


Pursuant to the provisions of Section 204 of the Companies Act, 2013 M/s Mohit & Associates, Practising Company Secretaries, was appointed as the Secretarial Auditor for the financial year 2019-20 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 4 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 2019-20 which call for any explanation from the Board of Directors.

Cost Auditor

The Company is not required to maintain cost records and to undertake cost audit in accordance with the provisions of the Companies Act, 2013


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.


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 efficient 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 Company s policies and Standard Operating Procedures (SOP 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 effective Internal Financial Control system in the Company. The Board has adopted policies and procedures for ensuring the orderly and efficient 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.


There has been no change in the nature of business of the Company. JHS Svendgaard Retail Ventures Pvt. Ltd., a subsidiary of Company which operates a Chain of retail stores of Patanjali at various Airports in or outside India, has set-up its first retail store at the Indira Gandhi International Airport (T2 Terminal) at Delhi. The Company has plan to open 150 stores at various Airports in coming future.

Further the Board of Directors in their meeting held on July 11, 2020 has also approved a proposal to diversify the existing business of the Company by undertaking business activities related to auto ancillary business i.e. to deal into automobile parts of all kinds & descriptions and other engineering items and other related items for motor cars, motor truck, buses, tractors, vans, jeeps, lorries, motor launches, motor cycles, cycles and vehicles and conveyances of all kinds.

The aforesaid diversification require amendment in the object clause of the Memorandum of Association of the Company and accordingly, a proposal for the same is being placed for the approval of the members at the ensuing AGM.


As on March 31, 2020, there are three subsidiaries i.e. JHS Svendgaard Brands Limited (formerly known as JHS Svendgaard Dental Care Limited), JHS Svendgaard Mechanical and Warehouse Private Limited and JHS Svendgaard Retail Ventures Private Limited (formerly known as JHS Svendgaard Infrastructure Private Limited).

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 and no company has ceased to be/became Subsidiary/ Associate of the Company.

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 and attached with herein as Annexure 5.


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 2020 is attached herein Annexure-6 in the prescribed Form MGT-9, which forms an integral part of this report. Annual Return in Form MGT- 7 of the Company is available on the Companys website at www.svendgaard.com.


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 2020 have been disclosed in the stand alone financial statements of the company. Kindly refer the relevant note 50 to these statements.


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.

The Company disclosed all related party transactions in relevant Note 42 to the Standalone Financial Statements of the year.


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 - 7 and is attached to this report.


For your Company, Corporate Social Responsibility (CSR) means the integration of social, environmental and economic concerns in its business operations. CSR involves operating Companys business in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of businesses. In alignment with vision of the Company, through its CSR initiative, your Company will enhance value creation in the society through its services, conduct and initiatives, so as to promote sustained growth for the society.

The Board of Directors of your Company has further formulated and adopted a policy based on above factors on Corporate Social Responsibility which can be accessed at our website at: [Weblink]. The CSR Policy of your Company outlines the Companys philosophy for undertaking socially useful programs through the creation of a CSR Trust for welfare and sustainable development of the community at large as part of its duties as a responsible corporate citizen. During the year under review, there has been no change in the policy. Broad areas CSR covered in the policy inter-alia includes:

• Eradicating hunger, poverty & malnutrition, promoting preventive health care & sanitation & making available safe drinking water.

• Promoting education, including special education & employment enhancing vocation skills especially among children, women, elderly & the differently unable & livelihood enhancement projects.

• Promoting gender equality, empowering women, setting up homes & hostels for women & orphans, setting up old age homes, day care centers & such other facilities for senior citizens & measures for reducing inequalities faced by socially & economically backward groups.

Further, the CSR policy also aims to provide for following:

• Establishing a guideline for compliance with the provisions of Regulations to dedicate a percentage of Companys profits for social projects.

• Ensuring the implementation of CSR initiatives in letter and spirit through appropriate procedures and reporting.

• Creating opportunities for employees to participate in socially responsible initiatives.

During the last financial years, no changes took place in the CSR Policy Further, during the year under review, your Company did not spend any amount of the CSR activities due [Specific Reasons to be provided]. The constitution of the Committee and the details of the meeting have been provided in the Annual Report on CSR, which forms an integral part of this report as Annexure - 8.


Change in Capital Structure and Listing of Shares

As on 31st March, 2020, the issued and paid up capital of the Company is stood at Rs. 60,90,04,650 consisting of

6.09.00. 465 fully paid up equity shares of Rs.10/- each and there was also no change in authorized share capital during the year under review. Also the authorized share capital of the Company stood at Rs. 65,00,00,000 divided into

65.000. 000 equity shares of Rs. 10/- each.


Your Company is contemplating the preferential issue of Fully Convertible Warrants ("Warrants") in order to meet the funding and business-related requirements of the Company but not limited to funding business growth, capital expenditure, expansion, exploring new initiatives and for other general corporate purposes, and accordingly , the Board has approved a preferential issue of up to 55,00,000 (Fifty-Five Lakh) warrants, convertible into equivalent number of equity shares of face value of Rs. 10/- each of the Company ("Equity Shares"), at an issue price of Rs. 20/- per warrant aggregating to Rs. 11,00,00,000/- (Rupees Eleven Crore only), at such terms and conditions as the Board may decide, to promoter and non-promoter entities subject to approval of the members at the ensuing AGM. The said issue also necessitates increase in authorized capital of the Company and accordingly a proposal to increase the authorized capital of the Company Company from Rs.

65.00. 00.000 (Rupees Sixty Five Crores only) divided into

65.000. 000 (Six Crores Fifty Lakhs) equity shares of Rs. 10/- each to 70,00,00,000/- (Rupees Seventy Crore only) divided into 7,00,00,000 (Seven Crore) Equity Shares of Rs. 10/- each is also being placed for approval of the members at the ensuing AGM.


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 Listing Regulation read with Section 177(9) of the Act, the Company has established Vigil Mechanism through which Directors, Employees, and Business Associates may report unethical behavior, 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 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 and no employee was denied access to the Chairman of the Audit Committee. The policy as approved by the Board is uploaded on the Companys website at http://svendgaard.com/download/ invester/Vigil Mechansim/VIGIL%20MECHANISM%20 POLICY.pdf


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 and an Internal Complaints Committee has also been set up to redress complaints received regarding Sexual

Harassment. During the year, no complaints pertaining to sexual harassment were received.


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 Company s operations in future.


Except to the extent of disclosures made in this report, there have been no 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 this report.

The Ministry of Home Affairs vide its Order No.40-3/2020 dated 24.03.2020 had notified a nationwide lockdown in India to contain the outbreak of COVID19 pandemic. As a result, the operations of the Company were temporarily disrupted at its facilities with reference to Sales, Marketing ,Personnel, warehouses and distribution locations. However, the Management has assessed that there is no material impact on the business operations. Accordingly, the Company has considered the possible effects that may result from the pandemic on the carrying amounts of its property, plant and equipment, investments, inventories, receivables and

other current assets and liabilities. The Company has also evaluated its liquidity position, recoverability of its assets and based on current estimates expects that the carrying amount of these assets will be recovered. The Company has also considered internal and external information upto the date of approval of these standalone financial statements. The Company will continue to closely monitor any material changes to future economic conditions. The impact of COVID-19 on future business of the Company would depend on future developments that cannot be reliably predicted at this stage.


The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Meetings of the Board of Directors and General Meetings;


The Company maintained healthy, cordial and harmonious industrial relations at all levels. The enthusiasm and unstinting efforts 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.

For and on behalf of the Board

Nikhil Nanda Mukul Pathak
Date: 11.07.2020 Managing Director Director
Place: New Delhi DIN:00051501 DIN:0051534