JVL Agro Industries Ltd Directors Report.

for the year ended 2016-17

Your directors are pleased to present the 28th Annual Report on the business and operations of the Company together with the Audited Statement of Accounts for the year ended 31st March, 2017.

Financial Highlights (Standalone)

During the year under review, performance of your company as under:

Particulars Standalone
Year ended Year ended
March 31, March 31,
2017 2016
Sales and other Income 3860.30 4116.16
Profit before Depreciation (including exceptional item) 54.45 75.11
Depreciation 17.95 17.90
Profit after depreciation 36.50 57.21
Provision for taxation 0.53 4.45
Add: MAT Credit 0.00
Profit after Tax 35.97 52.76
Less:
Previous years Income/Expenses 0.00 0.00
Profit after previous years adjustments 35.97 52.76
Add: Credit Balance
Profit Brought forward from previous year 299.62 290.67
Add:
Transfer from Investment allowance reserve 0.00 0.00
335.59 343.43
Provision for Dividend 0.00 1.68
Provision for Dividend Tax 0.00 0.34
Transfer to General Reserve 0.00 1.00
Deferred Tax 3.58 5.17
Income Tax for earlier years 0.0 0.00
Transfer to Capital Reserve 34.00 35.62
Provision 0.00 0.00
Depreciation adjustment 0.00 0.00
Credit Balance Carried Over to Balance Sheet 298.01 299.62
335.59 343.43

State of Companys Affairs and Future Outlook

In the financial year 2016-17, your Companys sales declined for two reasons – one is reduction of around 52% in traded sales and secondly due to some fssai issues. The Company has been concentrating on its branded sales and the result is that the Companys branded sales have increased by 1.36% from H3487.78 cr. in 2015-16 to H3535.15 cr in 2016-17. The total revenue of the financial year 2016-17 is H3857.18 Crore. Profit after tax for the year under review is H32.39 Crore (including exceptional item) in the year 2016-17. EBIDTA for the year 2016-17 was H 123.95 Crore. Further the Cash profit amounted to H50.34 crore in 2016-17.

Transforming Organization

During the year under review your Company the production from the rice mill in Bihar has seen an upward trend and rice sales increased from H48.37 cr. in 2015-16 to H60.29 crores during the year 2016-17 which is a healthy sign of this potential business. The demand for Companys premium segment edible oils under its proprietary brand JVL Royal have also increased.

Dividend

Considering the reduced profit and limited resources the Board has not recommended dividend for the financial year 2016-17.

Amounts Transferred to Reserves

There has been no transfer of profits to General Reserves during the year under review (previous year H1.00 crore was carried over to this reserve).

Changes in Share Capital, if any

During the Financial Year 2016-17, the paid-up share capital of the Company remain unchanged to H16.794 crores.

Directors and Key Managerial Personnel

Pursuant to the provisions of sub section (6) & (7) of Section 152 of the Companies Act, 2013 Mr. Anju Jhunjhunwala (DIN 00189221) is liable to retire by rotation at the forthcoming Annual General Meeting and being eligible, have offered himself for reappointment. Relevant details pertaining to them are provided in the notice of the

Annual General Meeting. None of the directors resigned during the period under review.

However, during the year under review Mr. Brajesh Kumar Misra was appointed as Independent Director of the Company and Mr. S.N. Jhunjhunwala, Managing Director was also designated as Chief Executive Officer of the Company w.e.f. 2nd May, 2016.

The Company has received declaration from all the Independent Directors of the Company confirming that they meet the criteria of Independence as prescribed under the Companies Act, 2013 and SEBI (LODR) Regulations 2015.

The Company has devised a policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which includes the criteria for performance evaluation of the Non-Executive and Executive Directors.

Board Evaluation

The Board of Directors has carried out an annual evaluation of its own performance, Board Committees and individual directors pursuant to the provisions of the Act and the corporate governance requirement as prescribed by the SEBI (LODR) Regulations 2015.

The performance of the Board and Committees was evaluated by the Board after seeking inputs from all the Directors/Committee Members on the basis of the criteria such as the Board/Committee meetings, attendance, information and functioning.

The Board reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and Committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings & attendance. The Chairman, Managing Director & Whole Time Director was also evaluated on the key aspects of their respective roles.

Pursuant to Section 178(3)&(4) of the Companies Act, 2013, the Nomination and Remuneration Committee of the Board (as mentioned in the Corporate Governance Report) has framed criteria for determining qualifications, positive attributes and independence of a director and have adopted a policy in this respect.

In a separate meeting of Independent Directors, performance of Non-Independent Directors, performance of the Board as a whole and performance of the Chairman were evaluated, taking into account the views of the Executive Directors and Non-Executive Directors.

Particulars of Contracts or Arrangements with Related Parties

All contracts/arrangements/transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on arms length basis. During the year, the Company had entered into contracts/arrangements/transactions with few of its group & subsidiary Companies which were not material under provisions of Section 188 of the Companies Act, 2013 and for which the Company had obtained prior clearance from the Audit Committee, Board/ Shareholders as required under the Act and rules made there under. The relevant disclosure for the transactions with related party have been made in the Standalone Audited Financial Statements under Note 43. Information on transactions with related parties pursuant to Section 134(3)(h) of the Companies Act, 2013 read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure II in Form AOC – 2 and the same forms part of this report.

Your directors draw attention of the members to note 43 to the financial statement which set out details of related party transection.

AUDITORS & AUDITORS REPORT

The Statutory Auditors of the Company, M/s Sparsh & Company, Chartered Accountants, Varanasi (FRN 013070C) hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received letter from M/s Sparsh & Co, Chartered Accountants, to the effect that their appointment, if made, would be within the prescribed limits of Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for such appointment within the meaning of Section 141 of the Companies Act, 2013.

The Board has duly reviewed the Statutory Auditors Report on the accounts. The observations and comments appearing in the Auditors Report are self-explanatory and do not call for any further explanation/comments/clarification of the Board.

Details of Subsidiary, Joint Venture or Associates

JVL Overseas Pte. Ltd. is a wholly-owned subsidiary of the Company based in Singapore. During the year the turnover of the subsidiary was H378.19 crores and cost of sales was H379.16 crores.

Internal Control System and Risk Management Framework

Section 177(4) of the Companies Act, 2013 mandates Audit Committee to evaluate internal financial controls & risk management system of the Company. The Board has laid down the procedure to inform the Board Members about the risk assessment and minimisation on periodical basis.

The Internal Control System of the Company is commensurate with the size, scale and complexity of its operations. These are constantly revised and strengthened. Internal Auditors carry out audit at regular intervals and submit their report to the Audit Committee. Internal Audit plays a key role in providing an assurance to the Board and value adding advisory service to the business operations. Pursuant to Section 138 of Companies Act, 2013 Jitendra Singh & Company have been appointed as Internal Auditor of the Company for the FY 2017-18.

Secretarial Audit Report

As required under Section 204 (1) of the Companies Act, 2013 and Rule No.9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 M/s Adesh Tandon & Associates has submitted its Secretarial Audit Report in prescribed format MR 3 pertaining to the financial year ended 31st March 2017 to the Board and copy of the same is attached as Annexure III to the Directors Report.

The Board has duly reviewed the Secretarial Audit Report. The observations and comments appearing in the Secretarial Auditors Report are self-explanatory and following are managements explanation/comments/clarification to the same :

a. The Cost Audit is in process and the report for the same to be filed soon.

b. The Company is in process of getting the details from the banks to transfer the money to IEPF.

c. The observation of the Secretarial Auditors are only informative and need no explanation.

d. The observation of the Secretarial Auditors are only informative and need no explanation.

Disclosure on Establishment of a Vigil Mechanism

The Board has adopted the Vigil Mechanism (Whistle Blower Policy). Copy of the said policy is available on the website of the Company www.jvlagro.com. This policy is formulated to provide a secure environment and to encourage the individuals to report unethical, unlawful or improper practices, acts or activities that may be taking place in the Company and to prohibit senior managerial personnel from taking any adverse action against those individuals who report such practices in good faith. This policy is framed in accordance with the provisions of Section 177 of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015 entered by the Company with stock exchanges. The Audit Committee of the Company reviews the functioning of the Vigil Mechanism on regular basis.

Corporate Governance

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the requirements set out by the Securities and Exchange Board of India. As required by SEBI (LODR) Regulations, 2015, a detailed report on Corporate Governance is separately annexed to the Annual Report. The Statutory Auditors certificate on compliance with Corporate Governance requirements is attached to the Corporate Governance Report.

Also, the declaration by CEO/CFO that the Board Members and SMPs have complied with the Code of Conduct is annexed with the Corporate Governance Report forming part of Directors Report.

System for Prevention of Sexual Harassment of Women at Workplace

The Company has in place the system for prevention of sexual harassment of women at workplace in line with Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 notified by the Ministry of Women & Child Development. This system prohibits, prevents or deters the commission of acts of sexual harassment of women at workplace and adequate procedures are in place for redressal of complaints pertaining to sexual harassment. The Internal Audit Committee of the Company is authorised to investigate the cases of sexual harassment of women at workplace.

During the year under review no complaints have been received from any of the women employees from any location or unit of the Company under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013.

Fraud Reporting (Required by Companies Amendment Bill, 2014)

During the year under review no fraud was noted by the Audit Committee and/or the Board having material impact on the Company & hence no reporting was made to the concerned authority.

Management Discussion and Analysis Report

Management Discussion and Analysis Report for the year under review as stipulated under SEBI (LODR) Regulations, 2015 is presented in a separate section forming part of the Annual Report.

Corporate Social Responsibility (CSR) Policy

As required under Section 135 of Companies Act, 2013, the Corporate Social Responsibility Committee, as a sub-committee of the Board was formulated during the year. The Committee comprises Mr. Mahesh Kedia, Mr. S.N. Jhunjhunwala and Mr. Adarsh Jhunjhunwala. The Committee, inter alia, frames CSR policy for the Company and monitors & supervises the progress of Company in CSR initiatives as per the approved policy document. The Company has been disclosed on the website of the company www.jvlagro. com.

The Committee met once during the year. There was no change in the composition of the Committee during the year 2016-17 which is as follows:

Name of the Member Category of Directorship Status In Committee
1 Mr. Mahesh Kedia NED/ID Chairman
2 Mr. S.N. Jhunjhunwala CEO/MD/PD/ED Member
3 Mr. Adarsh Jhunjhunwala WTD/PD/ED Member
4 Mr. Kartik Agrawal Company Secretary Secretary

The details of initiatives undertaken on CSR activities during the year are set out in Annexure IV of this report in the format prescribed in the Companies (Corporate Social Responsibility) Policy Rules, 2014.

Directors Responsibility Statement

In accordance with the provisions of Section 134(5) of the Companies Act 2013, your directors confirm that:

a) in the preparation of the annual accounts for the financial year ended 31st March, 2017, 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 as at 31st March, 2017 and of the profit /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 the Companies Act 2013 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 devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively and that such systems are adequate and operating.

f ) 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.

Other Disclosures

Number of Board Meetings

During the Financial Year 2016-17, Fourteen (14) meetings of the Board of Directors of the company were held. Details of which have been provided in the Corporate Governance Report forming part of this Annual Report.

Particulars of Loan, Guarantees and Investments under Section 186

During the period under review your Company has not provided any loan, guarantee & made investments u/s 186 of the Companies Act, 2013.

General

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Issue of equity shares with differential right as to dividend, voting or otherwise

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme of Employee Stock Options.

3. Neither the Managing Director nor the Whole Time Director is in receipt of any remuneration/commission from the subsidiary of the Company.

4. The Company has neither received nor repaid any deposit during the year.

5. No significant or material order were passed by the Regulators or courts or Tribunals which would impact the going concern status and Companys operations in future.

6. There was no change in nature of business.

Conservation of Energy, Technology, Absorption, Foreign Exchange Earnings and Outgo

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo as required to be disclosed are provided in Annexure V to this report.

Particulars of Employees and Related Disclosures

None of the directors/employees of the Company were in receipt of remuneration exceeding the level as prescribed in Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Other Committees:

The details pertaining to the composition of Audit Committee, Corporate Social Responsibility Committee, Nomination & Remuneration Committee, and Stakeholders Relationship Committee are included in the Corporate Governance Report which forms part of the Annual Report.

Acknowledgment

The Directors express their sincere appreciation to the valued shareholders, bankers and clients for their support

For and on behalf of the Board of Directors
Place: Varanasi Satya Narayan Jhunjhunwala Adarsh Jhunjhunwala
Date: 28.08.2017 (Managing Director & CEO) (Whole Time Director)