Jocil Ltd Directors Report

The turnover of the company for the year at Rs 1041.90 crores increased by 20.68% from Rs 863.36 crores of the previous year. During the year, the sales volume of Fatty Acids decreased by 18.69% and Toilet Soap & Soap products increased by 55.96%. The Profit Before Tax (PBT) increased to Rs 11.42 crores as compared to Rs 1.34 crores in the previous year due to increase in sales volume of Soap Noodles and decrease in fuel prices.

The appropriations from the profit are as detailed below.

(Rs in Lakhs)

- In accordance with the requirements of Ind AS, dividend is to be accounted in the year of payment. Hence, dividend paid during the year is given instead of dividend declared during the year.

2. DIVIDEND & RESERVES

Considering the increase in profitability of the Company, the Board of Directors have recommend for the approval of the shareholders of the Company for payment of dividend for the year ended 31-03-2026, at Rs 3.00 per equity share of Rs 10 each and also a special dividend at Rs 0.50 per equity share of Rs 10 each totalling to Rs 3.50 per equity share of Rs 10 each which aggregates to Rs 3,10,84,025 on 88,81,150 equity shares of the Company. In the previous year, the Company paid dividend at Rs 0.50 per equity share of Rs 10 each on 88,81,150 shares amounting to Rs 44,40,575. The dividend payout is subject to approval of members at the ensuing Annual General Meeting. Your Directors do not propose to transfer any amount to reserves for the Financial Year ended on March 31, 2026.

3. OPERATIONS

4. BUSINESS REVIEW AND OUTLOOK

Your Company has not changed its nature of business during the period under review. Division wise performance and outlook is described as given below.

Fatty Acids and Soap

There is a vast improvement in sales volume of Soap Noodles. The profitability of the year under review is higher when compared to previous year due to increase in sales volume of Soap Noodles. GST refund/benefit is continuing for North-eastern states and Jammu & Kashmir and will be available upto June 30, 2027. However, these benefits may not be attractive enough to overcome the increased logistical costs for marketing in the south.

Cost of raw materials is a major component in total cost of production and the fluctuation in their prices is a serious cause of concern to the company, particularly when the customers demand long term forward contracts while the same is not possible with the raw material suppliers. There is stiff competition from manufacturers mainly from those having backward integration which gives them a cost advantage. The Company is able to source the raw materials largely from local suppliers. However, to meet the urgent requirements of major customers, Company may have to import PFAD and RBD Palm Stearine in case of shortage in local market.

The Company enters into contracts for supply of Fatty Acids, Soap Noodles and Toilet Soap for major customers wherein the price of raw materials is factored into the selling price of the products. The customers themselves supply/cover raw materials required for the total process and the Company receives processing charges for the manufacture of final products. This system does not provide satisfactory margins but helps to safeguard against fluctuations in raw material prices and thereby avoids losses.

The US-Iran war is impacting the Companys raw material needs during the current period due to abnormal rise in prices. Imports from Indonesia and Malaysia may be significantly impacted due to logistic disruptions. Also, availability of raw materials locally may be impacted if the war continues further and we may have to procure the raw materials at higher price.

As stated in the previous report the sale of Soap Noodles has increased compared to the previous year as expected due to enhancement of capacity of Soap Noodles Plant. Company hopes to achieve the same sales volume as that of the year under review for the coming period also barring unforeseen circumstances.

Biomass Power Plant

The generation from the Plant during the year slightly decreased to 244 lakh units from 253 lakh units achieved in the previous year, a 4% drop when compared to the previous year. Also, sale of Biomass Power decreased to 23 lakh units a 5% drop when compared to the previous year. The main reason for decrease in sales is due to increase in internal consumption consequent upon completion of capacity enhancement of Soap Noodles Plant. The revenue from Biomass Power Plant is expected to decrease slightly compared to the year under review due to additional internal requirement of Power.

Wind Energy Generators (WEG)

Power generation during the year from the four Wind Energy Generators (WEGs) of 6.3 MW capacity has increased as compared to the previous year. During the year, the power generation from all the four WEGs was 143.69 lakh units as compared to 115.72 lakh units in the previous year due to decrease of grid failure from 4.67% to 2.86%. There is no backdown of available time of WEGs for want of evacuation facilities during the year under review as compared to 3.14% in the previous year.

5. SUBSIDIARY/ASSOCIATE COMPANIES

Your Company has no subsidiary/associate/joint venture companies. During the year under review, your company has not added any subsidiaries, joint ventures or associate companies.

6. FINANCE AND STATUTORY COMPLIANCES

The Company availed working capital facilities under consortium arrangement with Union Bank of India and State Bank of India and the accounts are in order. The company complied with all the legal requirements and there are no outstanding statutory dues as on 31st March 2026.

During the year there have been no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future.

7. CREDITRATING

During the year the Credit Rating Agency CARE revised the credit rating for working capital facilities as detailed hereunder.

8. DEPOSITS

Your Company has not accepted any deposits covered under Chapter V of the Companies Act, 2013 i.e. within the meaning of Section 2(31) of the Companies Act, 2013 read with Rule 2(1)(c) of the Companies (Acceptance of Deposits) Rules, 2014 and as such there are no such overdue deposits outstanding as on 31 March 2026.

9. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF REPORT.

There are no material changes and commitments affecting financial position of the Company, which occurred after the end of the financial year i.e. 31 March 2026.

10. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act 2013. The Company is committed to providing a safe and conducive work environment to all its employees. All women employees whether permanent, temporary or contractual are covered under the said policy. The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year the Company has not received any complaints on sexual harassment of women at the workplace.

11. VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has established Vigil Mechanism as required under Section 177 of the Companies Act, 2013 for directors and employees to report genuine concerns as prescribed in the policy. The policy provides adequate safeguards against victimization of persons who use such mechanism and makes provision for direct access to the Chairperson of the Audit Committee in appropriate or exceptional cases.

12. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

In accordance with the provisions of the Companies Act 2013 and Articles of Association of the Company, Sri V.S. Raju, Director retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. Special Resolution for re-appointment of Sri P.A. Chowdary is being proposed at the ensuing Annual General Meeting for the second term of 5 consecutive years from 22.9.2026 to 21.9.2031 after completion of his first term of appointment on September 21, 2026.

a. In the opinion of the Board, Independent Directors appointed during the year possess the requisite integrity, expertise and experience (including proficiency),

b. During the year under review, Dr. V.N. Rao, Independent Director resigned from the Board on 22.7.2025 and Sri Subbarao V. Tipirneni was appointed as an Independent Director from 1.10.2025.

c. The Company held Four Board Meetings during the year. Board Meeting dates and attendance particulars are available in the report on Corporate Governance.

d. The Company has received declarations from all Independent Directors confirming that he/she meets the criteria of independence as provided under sub-section 6 of Sec.149 of the Companies Act, 2013 at the first meeting of the Board in which he/she participated as a Director and thereafter at the first meeting of the Board in every financial year or whenever there is any change in the circumstances that may affect his/her status as an Independent Director.

e. The Audit Committee as on 31 March 2026 consisted of 6 Non-Executive Directors of which 4 are Independent Directors. Sri P.A. Chowdary, Independent Director is the Chairman of the Audit Committee. The remaining 5 members are Sri Mullapudi Thimmaraja, Non-Executive Director, Sri V.S. Raju, Non-Executive Director, Sri P. Kesavulu Reddy, Independent Director, Sri G.S.V. Prasad, Independent Director and Subbarao V. Tipirneni, Independent Director. The Board accepted all the recommendations of the Audit Committee during the year.

During the year under review, the Company is having the following persons as Key Managerial Personnel under Sec.203 of the Companies Act, 2013.

13. MEETING OF INDEPENDENT DIRECTORS

A separate meeting of Independent Directors as required under Schedule IV of the Companies Act, 2013 was held on 3 February 2026, without the presence of Non-Independent Directors. This meeting was conducted to review and evaluate (a) the performance of Non-Independent Directors and the Board as a whole, (b) the performance of the Chairperson of the company, taking into account the views of Executive Directors and Non-Executive Directors and (c) assess the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties. The Independent Directors expressed their satisfaction with the performance of Non-Independent Directors and the Board as a whole and Lead Independent Director Sri P. Kesavulu Reddy briefed the outcome of the meeting to the Board.

14. INTEGRITY, EXPERTISE AND EXPERIENCE OF THE INDEPENDENT DIRECTORS

All the Independent Directors appointed by your Company are selected from the Independent Directors Data bank maintained by the Indian Institute of Corporate Affairs (IICA). All Independent Directors of the Company have passed/been exempted from the online Proficiency Self Assessment Test conducted by IICA.

All the Independent Directors of the Company have given their respective declarations/disclosures under Section 149(7) of the Companies Act, 2013 and Regulation 25(8) of the Listing Regulations and have confirmed that they fulfill the independence criteria as specified under Section 149(6) of the Act and Regulation 16 of the Listing Regulations and have also confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence. Further, the Board after taking these declarations/disclosures on record and acknowledging the veracity of the same, concluded that the Independent Directors are persons of integrity and possess the relevant expertise and experience to qualify as Independent Directors of the Company and are Independent of the Management.

15. AUDITORS

M/s. Chevturi Associates, Chartered Accountants, Vijayawada were appointed as Auditors for a period of 5 years at the 44th Annual General Meeting held on 24 September 2022 till the year 2026-27. There are no qualifications, reservations or adverse remarks in the audit report issued by them for the financial year ended 31st March 2026.

16. COST RECORDS AND COST AUDITORS

Company is maintaining cost records as specified by the Central Government under sub section (1) of Section 148 of the Companies Act, 2013. M/s. Narasimha Murthy & Co., Cost Accountants, Hyderabad are conducting the Cost Audit for applicable products during the year. They are eligible for re-appointment as Cost Auditors for the year 2026-27. Cost Audit for the Financial Year 2025-26 is expected be completed before the due date i.e., 30 September 2026. There are no qualifications, reservations or adverse remarks in the audit report issued by them for the financial year ended 31st March 2025.

17. SECRETARIAL AUDIT

M/s. Nekkanti S.R.V.V.S. Narayana & Co., Company Secretaries, Hyderabad were appointed as Auditors for secretarial audit for the year 2025-26 under Section 204 of the Companies Act, 2013 and they have submitted their report. There are no qualifications, reservations or adverse remarks in the audit report issued by them for the financial year ended 31st March 2026.

18. ANNUAL RETURN

Pursuant to Section 92(3) of the Companies Act, 2013, Annual Return has been placed in the website of the Company and weblink for the same is www.//jocil.in/AnnualReturn2025-26.pdf.

19. DECLARATION AS PER SECTION 134 (3)(ca) OF COMPANIES ACT, 2013

During the year, the auditors have not reported any instance of frauds committed by or against the Company by its Directors/Officers/Employees to the Audit Committee or Board under Section143(12) of the Companies Act, 2013 and rules made there under. Therefore no details are required to be disclosed under Section 134(3)(ca) of the Act.

20. SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS

There were no significant material orders passed by any Regulators/Courts/Tribunals that would impact the going concern status of the Company and its future operations.

Your company has complied with all the Acts, Rules, Regulations and Guidelines issued/prescribed by the Securities Exchange Board of India, Reserve Bank of India, Ministry of Corporate Affairs and other statutory authorities.

21. No application has been made under the Insolvency and Bankruptcy Code. As such the requirement to disclose the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year is not applicable.

22. The requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons there of, is not applicable as no such loans were obtained from any Banks or Financial Institutions.

23. INTERNAL FINANCIAL CONTROLS AND ITS ADEQUACY

Your Company has adequate Internal Financial Controls as per Section 134(5)(e) of the Companies Act, 2013 that commensurate with the size of the business and nature of its operations, designed to provide reasonable assurance with regard to the accuracy and completeness of the accounting records and timely preparation and provision of reliable financial statements.

The Board has inter alia reviewed the adequacy and effectiveness of the Companys internal financial controls relating to its financial statements, the major financial risk exposures if any and steps taken by the management to monitor and control such exposures, overseen and reviewed the functioning of the Whistle Blower Mechanism.

Your Company has adopted necessary policies and procedures 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 financial information.

During the year no fraud by the Company or with the Company by its officers or employees has been noticed/reported.

24. COMPLIANCE WITH SECRETARIAL STANDARDS

During the year under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

25. The information required to be included in the Board of Directors Report under the Companies Act, 2013 and Rules made there under is annexed and forms part of this report, details of which are as follows.

26. INFORMATION UNDER LISTING REGULATIONS

The Company is committed to maintain the standards of Corporate Governance prescribed under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (Listing Regulations). The information required to be included in the Annual Report under Schedule V of the Listing Regulations are as follows.

The Company is having a policy to deal with Related Party Transactions and the same may be viewed in the Companys website www.jocil.in. Accounts for disclosures in compliance with the Accounting Standards on "Related Party Disclosures" are given in note no. 34.

27. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(3)(c) of the Companies Act, 2013, with respect to Directors Responsibility Statement, it is hereby confirmed that -

a. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. the Directors 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 and loss of the company for that period;

c. the Directors had 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 had prepared the annual accounts on a going concern basis;

e. the Directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively;

Explanation : For the purpose of this clause, the term "internal financial controls" 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.

f. and, the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

28. Cautionary Statement

Statements in this Directors Report and Management Discussion and Analysis Report describing the Companys projections, estimates, expectations or predictions may be "forward looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make difference to the Companys operations include raw materials availability and its prices, demand and pricing in the markets, changes in Government regulations, tax regimes, economic developments and other ancillary factors.

29. PERSONNEL

The Directors wish to place on record their appreciation to all the employees of the Company for their sustained efforts and valuable contribution to the performance of the Company during the year.

30. ACKNOWLEDGEMENTS

The Directors wish to place on record their appreciation for the wholehearted and sincere cooperation the Company received from various departments of Central and State Governments, Bankers, Auditors, Dealers and Suppliers of the Company. The Directors also would like to express their grateful appreciation for the guidance and cooperation received from the Holding Company, M/s. The Andhra Sugars Limited, Tanuku.