jyothy labs ltd Directors report

Dear Members,

It is our pleasure to present to you the 31^st Annual Report of your Company together with the Audited Financial Statements for the Financial Year ended March 31, 2022.

FINANCIAL PERFORMANCE

Your Companys financial performance on standalone basis for the Financial Year ended March 31, 2022 compared with previous Financial Year is summarised below:

		(Rs.in Lacs)
Financial Results	Financial Year ended March 31 2022	Financial Year ended March 31 2021
Revenue from Operations	2,16,626.57	1,88,499.87
Earnings before interest, tax, depreciation and amortization	24,945.78	31,673.20
Finance Cost	668.66	1,172.38
Other Income	1,895.80	1,981.57
Depreciation on Tangible Assets	3,061.83	3,098.43
Amortization of Intangible Assets	3,132.96	3,134.68
Depreciation of right of use assets	1,657.38	1,557.79
Profit before exceptional item and tax	18,320.75	24,691.49
Exceptional items	Nil	2,350.41
Profit before tax	18,320.75	22,341.08
Provision for tax
- Current tax	3,207.00	3,742.00
- Deferred Tax Charge/ (Credit)	(499.16)	(427.10)
Profit after tax	15,612.91	19,026.18
Earning Per Share (Basic) (In )	4.25	5.18
Earning Per Share (Diluted) (In )	4.25	5.18
Dividend Per Share of face value of 1/- (In )	2.50	4.00

The abovementioned financial performance highlights are an abstract of the Financial Statements of your Company for the Financial Year 2021-22. The detailed Financial Statements of your Company forms part of this Annual Report and are also uploaded on the website of your Company i.e. www.jyothylabs.com.

PERFORMANCE HIGHLIGHTS

The Revenue from operations on standalone basis of your Company for the Financial Year 2021-22 was up by 14.92% and stood at 2,16,626.57 Lacs compared to 1,88,499.87 Lacs in the previous financial year. The net profit for the financial year 2021-22 amounted to 15,612.91 Lacs.

The consolidated revenue from operations of your Company for the financial year under review stood at 2,19,648.88 Lacs as against 1,90,912.02 Lacs in the previous year, reporting a growth of 15.05%. The consolidated profit after tax for the financial year under review stood at 15,913.03 Lacs against 19,065.15 Lacs in the previous financial year.

IMPACT OF COVID-19 PANDEMIC

As the COVID-19 pandemic continues and sudden spread of second wave of Corona Virus all over India, the Government of various States including the Central Government had issued various norms and directives. Also, there were partial or complete Lock-down enforced by various State Government(s) depending upon the situation in the respective States during the first half of the Financial Year 2021 -22. Further to curb the spread of the COVID-19, the Government in many States had declared closure of departmental stores, schools, colleges, malls, theaters, etc. Since the overall economy was hit because of the sudden outbreak of COVID - 19, it impacted the overall business of your Company, in the First half of the Financial Year.

However, in the second half of the Financial Year 2021 - 22 the Government relaxed some restrictions as there were reduction in the number of COVID cases and in turn, the impact of COVID-19 reduced on the overall business of your Company. Further, in accordance with the Government policies, your Company has also started getting back to normal and physical presence of Employees at offices/factories has been allowed.

DIVIDEND

Your Board is pleased to recommend for your consideration, a dividend of 2.50 (Rupees Two and Fifty Paisa only) per equity share of 1/- each for the financial year 2021-22. The aforesaid dividend will involve a total payout of 9,180.22 Lacs and is subject to the approval of Members at the ensuing Annual General Meeting of your Company. The proposed dividend payout is in accordance with your Companys Dividend Distribution Policy.

In accordance with the provisions of the Income Tax Act, 1961 as amended by and read with the provisions of the Finance Act, 2020, with effect from April 1, 2020, dividend declared and paid by any Company is taxable in the hands of shareholders. Your Company shall, therefore, be required to regulate deduction of tax at source (TDS) at the time of payment of dividend in accordance with the provisions of the Income Tax Act, 1961 read with the Finance Act, 2020 and at the applicable rates of taxes. The TDS rate may vary depending upon the residential status of the shareholder and the documents submitted to your Company.

Your Company will also be sending communication to the shareholders informing them to submit the necessary documents to enable your Company to calculate the amount of tax required to be deducted from the proposed dividend in respect of each eligible shareholders. The aforesaid communication will be sent to those shareholders whose name appears in the Register of Member as on June 10, 2022 via email to those shareholders who have registered their email id with your Company.

During the previous financial year, your Company had paid a final dividend of 4/- (Rupees Four only) per equity share of 1/- each for the Financial Year 202021. The aforesaid dividend involved a total payout of 14,688.35 Lacs.

DIVIDEND DISTRIBUTION POLICY

The Board of Directors of your Company had approved and adopted a policy on Dividend Distribution formulated in accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the Listing Regulations) and the dividend is recommended in accordance with the said policy.

The SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2021 has allowed the companies to provide web-link of Dividend Distribution Policy instead of attaching it along with the Annual Report. However, for the easy accessibility of the shareholders, your Company has annexed to this report its Dividend Distribution Policy as "Annexure - A" and has also uploaded the same on your Companys website at the link:

https://www.jyothylabs.com/investor/management- policies-notices/#Management-Policies

ISSUE OF SHARES

a) Issue of Equity Shares with differential rights

During the year under review and to date, your Company has not issued any shares with differential rights, hence no information prescribed under the provisions of Section 43(a)(ii) of the Companies Act, 2013 (the Act) read with Rule 4(4) of the Companies (Share Capital & Debentures) Rules, 2014 has been furnished.

b) Issue of Sweat Equity Shares

During the year under review and to date, your Company has not issued any sweat equity shares. Hence no information as per the provisions of Section 54(1 )(d) of the Act read with Rule 8(13) of the Companies (Share Capital & Debentures) Rules, 2014 is furnished.

c) Issue of Employee Stock Option

During the year under review and to date, your Company has not issued any Employee Stock Option, hence no information is furnished.

INCREASE IN SHARE CAPITAL

The Authorised Share Capital of your Company is 2,72,30,00,000/- consisting of: (a) 2,72,00,00,000 Equity Shares of the Face Value of 1/- each and (b) 30,000, 11% Cumulative Redeemable Preference Shares of the Face Value of 100/- each. The paid-up Equity Share Capital of your Company as on March 31, 2022 stood at 36,72,08,644/- consisting of 36,72,08,644 Equity Shares of the Face Value of 1/- each. Further, as on March 31, 2022, none of the Directors of your Company holds instruments convertible into equity shares of your Company.

DEBENTURES

During the Financial Year under review, your Company did not issue any Debentures in terms of Section 42 of the Act read with Rule 14 of the Companies (Prospectus and Allotment) Rules, 2014 and no debentures were redeemed during the Financial Year 2021-22.

ANNUAL RETURN

Pursuant to Section 134 (3) (a) of the Act, the draft annual return for Financial Year 2021-22 prepared in accordance with Section 92(3) of the Act is made available on the website of the Company i.e. https://www.jyothylabs.com/ investor/annual-report-2/#annual-report

NUMBER OF MEETINGS OF THE BOARD

Your Companys Board of Directors met 5 (five) times during the financial year ended March 31, 2022 in accordance with the provisions of the Act and the Rules made thereunder. Except for the Board and the Committee Meetings held on March 28, 2022, which was held physically, all the other Board and Committee Meetings during Financial Year 2021-22 were held through video conferencing in compliance with the provisions of Section 173 of the Act, read with Rule 3 of the Companies (Meetings of Board and its Powers) Rules, 2014, as amended.

The meetings were held on May 18, 2021, July 29, 2021, November 2, 2021, January 21, 2022 and March 28, 2022. Also, during the financial year 2021-22, 1 (one) Circular Resolution pursuant to Section 175 of the Act, was passed on December 13, 2021.

AUDIT COMMITTEE

The Audit Committee of your Company consists of all Independent Directors. The detailed composition of the Audit Committee is provided in the Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of Section 134(5) of the Act, in relation to the Audited Financial Statements of your Company for the financial year ended March 31, 2022, the Board of Directors hereby confirms that:

a. in the preparation of the annual accounts for the financial year ended March 31, 2022, the applicable accounting standards read with the requirements set out under Schedule III to the Act have been followed and there were no material departures from the same;

b. your Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2022 and of the profit of your Company for the year ended on that date;

c. your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

d. your Directors have prepared annual accounts of your Company on a going concern basis;

e. your Directors have laid down internal financial controls to be followed by your Company and that such internal financial controls are adequate and are operating effectively; and

f. your Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

PERFORMANCE EVALUATION

In accordance with the Act and Regulation 4(2)(f) of the Listing Regulations, your Company has framed a Policy for Evaluation of Performance of Independent Directors, Board, Committees and other Individual Directors which includes criteria for performance evaluation of Non-Executive Directors and Executive Directors. A questionnaire is formulated for evaluation of performance of the Board, its committees and individual Directors, after taking into consideration several aspects such as board composition, strategic orientation, board functioning and team dynamics.

An annual performance evaluation for the financial year 2020-21 was carried out by the Board of Directors and the Nomination, Remuneration and Compensation Committee at their respective meetings held on May 18, 2021. The questionnaires were circulated to the Board members and the Committee members of the Nomination, Remuneration and Compensation Committee at the time of performance evaluation conducted at their respective meetings. The Directors and the Committee members then filled-up the questionnaire and rated the Board, its Committees and individual Directors and duly filled questionnaires were handed over to the Company Secretary.

Performance evaluation of Independent Directors was conducted by the Board of Directors, excluding the Director being evaluated. The criteria for performance evaluation of Independent Directors laid down by the Nomination, Remuneration and Compensation Committee include ethics and values, knowledge and proficiency, diligence, behavioral traits, efforts for personal development and independence in decision making.

Similarly, performance evaluation of the Chairman and Non-Independent Directors was carried out by the Independent Directors of your Company at its separate meeting held on May 17, 2021. Your Directors also expressed their satisfaction with the evaluation process.

TRAINING OF INDEPENDENT DIRECTORS

All Independent Directors are familiarized with your Company, their roles, rights and responsibilities in your Company, nature of the industry in which your Company operates, business model, strategy, operations and functions of your Company through its Executive Directors and Senior Managerial Personnel. The details of programs for familiarization of Independent Directors with your Company are available on the website of your Company at the link:

https://www.jyothylabs.com/investor/management- policies-notices/#Management-Policies

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under consideration Mr. K Ullas Kamath ceased to be the Joint Managing Director, member of the Board of Directors and its Committees thereof with effect from the closing hours of January 22, 2022.

Based on the recommendation of the Nomination, Remuneration and Compensation Committee at its meeting held on March 28, 2022, the Board of Directors of your Company appointed Mr. Aditya Sapru (DIN - 00501437) as an Additional Director designated as Independent Director of your Company with effect from March 28, 2022. In the opinion of the Board, Mr. Sapru is a person of integrity and have about 3 decades of international experience in building growth frameworks and growth strategy for organizations to create long term stakeholder value. Further, as per the requirement of Regulation 17(1 C) of the Listing Regulations, your Company on May 8, 2022 has obtained approval of the shareholders of your Company through Postal Ballot under Section 110 of the Act for appointment of Mr. Aditya Sapru as an Independent Director of your Company for a consecutive term of 5 years commencing from March 28, 2022 to March 27, 2027 (both days inclusive).

In accordance with the provisions of Section 152 of the Act, Ms. M. R. Deepthi, Whole Time Director (DIN - 01746698) of your Company retires by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re-appointment.

Apart from the aforesaid changes, there was no change in Directors and Key Managerial Personnel of your Company.

DECLARATION OF INDEPENDENT DIRECTORS

Pursuant to Section 134(3)(d) of the Act, your Company confirms having received necessary declarations from all the Independent Directors under Section 149(7) of the Act and Regulation 25(8) of the Listing Regulations declaring that they meet the criteria of independence laid down under Section 149(6) of the Act and Regulation 16(1 )(b) of the Listing Regulations. All the Independent Directors of your Company have complied with the provisions of subrule (1) and (2) of Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014 by registering themselves under data bank of Independent Director for lifetime. Your Company has also formulated a Code of Conduct for Directors and Senior Management Personnel and has obtained declarations from all the Directors to the effect that they are in compliance with the Code.

MEETING OF INDEPENDENT DIRECTORS

Your Companys Independent Directors meet at least once in every financial year without the presence of the Executive Directors or Management Personnel of your Company and the Meeting is conducted informally. During the year under review, one meeting of Independent Directors was held on May 17, 2021.

REMUNERATION POLICY

Your Company follows the policy on Nomination, Remuneration and Compensation of Directors, Key Managerial Personnel and other Employees as approved by the Nomination, Remuneration and Compensation Committee and the Board of Directors of your Company and the same has been uploaded on your Companys website at https://www.iyothylabs.com/investor/ management-policies-notices/#Management-Policies Salient features of the said Policy is annexed to this report as "Annexure - B".

INSTANCES OF FRAUD, IF ANY, REPORTED BY THE AUDITORS

There have been no instances of any fraud reported by the Statutory Auditors under Section 143(12) of the Act.

AUDITORS & AUDIT REPORTS

Statutory Auditors and their Report

At the 26^th Annual General Meeting held on July 11, 2017, M/s. B S R & Co. LLP, Chartered Accountants, (Firm Registration No.101248W/W-100022) were appointed as the Statutory Auditors of your Company to hold office for a term of 5 years commencing from the conclusion of 26^th Annual General Meeting till the conclusion of 31^st Annual General Meeting subject to ratification by Members in each Annual General Meeting. However, as per the Companies (Amendment) Act, 2017, provisions of Section 139 of the Act have been amended, wherein, the requirement of ratification of appointment of Statutory Auditors at every AGM has been done away with. The re-appointment of the existing Statutory Auditors is due in the ensuing Annual General Meeting. Accordingly, the Audit Committee and the Board of Directors of your Company during their respective meetings held on May 24, 2022 have considered and approved the re-appointment of M/s. B S R & Co. LLP, Chartered Accountants, (Firm Registration No.101248W/W-100022) as the Statutory Auditors of your Company, for further period of 5 years i.e. from the conclusion of the 31^st Annual General Meeting until the conclusion of the 36^th Annual General Meeting of your Company to be held in the year 2027. The item for re-appointment of M/s. B S R & Co. LLP, Chartered Accountants, (Firm Registration No.101248W/W-100022) as the Statutory Auditors for second term of 5 years has been included in the Notice of the ensuing Annual General Meeting for consideration and approval of Members.

M/s. B S R & Co. LLP, Chartered Accountants, (Firm Registration No.101248W/W-100022) have given their consent for the proposed re-appointment as Statutory Auditors of your Company from the conclusion of the ensuing Annual General Meeting till the conclusion of 36^th Annual General Meeting of your Company to be held in the year 2027. They have further confirmed that the said re-appointment, if made, would be within the prescribed limits under Section 141 (3)(g) of the Act and that they are not disqualified for re-appointment.

The Notes on financial statements referred to in the Auditors Report are self-explanatory and do not call for any further comments. The Auditors Report does not contain any qualification(s), reservation(s) or adverse remark(s).

Secretarial Auditors and their Report(s)

In terms of Section 204 of the Act, the Board of Directors of your Company on the recommendation of the Audit Committee have re-appointed M/s. Rathi & Associates, Practicing Company Secretaries, Mumbai as the Secretarial Auditors of your Company to carry out Secretarial Audit for the financial year 2022-23. Your Company has obtained Secretarial Audit Report for the Financial Year 2021 -22 in the prescribed Form MR-3 from M/s Rathi & Associates, Practicing Company Secretaries, which forms part of the Annual Report and is appended as "Annexure - C" to this Report. The report does not contain any qualification(s), reservation(s) or adverse remark(s) which calls for any explanation from your Board of Directors.

In addition to the above Secretarial Audit and pursuant to the requirements of the SEBI Circular No. CIR/CFD/ CMD1/27/2019 dated February 8, 2019, M/s. Rathi & Associates, Practicing Company Secretaries have also issued to your Company Annual Secretarial Compliance Report for the financial year 2021-22 confirming compliance of all laws, SEBI Regulations and circulars/ guidelines issued thereunder, applicable to your Company. The Annual Secretarial Compliance Report dated May 24, 2022 issued by M/s. Rathi & Associates, Practicing Company Secretaries has been submitted to the stock exchanges within 60 days from the financial year ended March 31, 2022.

Regulation 24A of the Listing Regulations requires the companies to annex to its Annual Report, a Secretarial Audit Report, given by a Company Secretary in practice, in the format prescribed by SEBI from time to time. However, pursuant to the provision of SEBI Circular No. CIR/CFD/ CMD1/27/2019 dated February 8, 2019 and in order to avoid duplication, SEBI has allowed companies to use the same Form No. MR-3 as required under the Act and the rules made thereunder for the purpose of compliance with Regulation 24A of the Listing Regulations as well. Accordingly, your Company in compliance with the said SEBI Circular has used the same Form No. MR-3 as prescribed under the Act and the rules made thereunder for the purpose of compliance with Regulation 24A of the Listing Regulations as well.

Cost Auditors and their Report

As per Section 148 of the Act read with the Companies (Cost Records and Audits) Rules, 2014, as amended, the Board of Directors of your Company on recommendation of the Audit Committee have re-appointed M/s. R. Nanabhoy & Co., Cost Accountants, Mumbai (Registration No. 000010) as the Cost Auditors of your Company, to carry out the cost audit of its products covered under the Ministry of Corporate Affairs Order dated June 30, 2014 (as amended on December 31, 2014) for the financial year 2022-23. The remuneration of Cost Auditors has been approved by the Board of Directors on the recommendation of the Audit Committee and the requisite resolution for ratification of remuneration of Cost Auditors by the members has been set out in the Notice convening the 31^st Annual General Meeting of your Company.

The re-appointment of M/s. R. Nanabhoy & Co., Cost Accountants, Mumbai as the Cost Auditors of your Company is within the prescribed limits of the Act and free from any disqualifications specified thereunder. Your Company has received the Certificate from the Cost Auditors confirming their independence and relationship on arms length basis.

The Cost Audit Report for the financial year ended March 31,2021, issued by M/s. R. Nanabhoy & Co., Cost Auditors, in respect of the various products prescribed under Cost Audit Rules does not contain any qualification(s), reservation(s) or adverse remark(s) and the same was filed with the Ministry of Corporate Affairs on August 18, 2021. The Cost Audit Report for the financial year ended March 31,2022 will be filed with the Ministry of Corporate Affairs within the prescribed statutory time limit.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The details of Loans, Guarantees and Investments as prescribed under Section 186 of the Act are appended as "Annexure - D" and forms integral part of this report.

RELATED PARTY TRANSACTIONS

Pursuant to Section 134 of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Act, in the prescribed Form AOC-2 is appended as "Annexure - E" to this Report. During the year under Review, your Company had entered into contract(s)/arrangement(s)/transaction(s) with related parties which were in ordinary course of business and on arms length basis and none of which could be considered as material in accordance with the policy of your Company on materiality of related party transactions. Further, none of the contract(s)/ arrangement(s)/transaction(s) with related parties required approval of members as the same were within the limits prescribed under Section 188(1) of the Act and the Rules framed thereunder read with the provisions of Regulation 23(4) of the Listing Regulations.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed from your Companys website at the link:

https://www.jyothylabs.com/investor/management- policies-notices/#Management-Policies

Attention of Members is also drawn to Note 33 to the financial statements for the year ended March 31, 2022 which sets out the related party disclosures as per the Indian Accounting Standard (Ind AS) 24.

STATE OF THE COMPANYS AFFAIRS (MANAGEMENT DISCUSSION AND ANALYSIS)

In terms of the provisions of Regulation 34(2) of the Listing Regulations, the Management Discussion and Analysis Report of your Companys affairs for the year under review is attached and forms an integral part of this Annual Report.

TRANSFER TO RESERVES

Your Company did not transfer any sum to the General Reserve or to the Debenture Redemption Reserve for the Financial Year under review.

MATERIAL CHANGES AND COMMITMENTS

Except as disclosed elsewhere in this report, no material changes and commitments which could affect your Companys financial position have occurred between the end of the financial year 2021 -22 and to the date of this report.

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 under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 are annexed herewith as "Annexure - F" to this report.

RISK MANAGEMENT

The Board of Directors of your Company at its meeting held on July 29, 2021 appointed Mr. Nilesh B. Mehta, Independent Director of your Company as the Chairman of the Risk Management Committee with effect from July 29, 2021. Mr. K. Ullas Kamath has ceased to be the Director of your Company with effect from the closing hours of January 22, 2022 and accordingly has also ceased to be the member/chairperson of the Risk Management Committee with effect from the closing hours of January 22, 2022.

Accordingly, the Risk Management Committee comprises of the following Directors/Executives of your Company as Members of the Committee as on March 31, 2022:

1. Mr. Nilesh B. Mehta, Independent Director - Chairman;

2. Ms. M. R. Jyothy, Managing Director- Member;

3. Ms. M. R. Deepthi, Whole-time Director - Member;

4. Mr. T. Ananth Rao, Head - Operations & Commercial - Member; and

5. Mr. Ravi Razdan, Head - Systems & HR- Member.

The Risk Management Committee has been entrusted with the powers such as monitoring and reviewing of the risk management plans/policies; appointing various functionaries; deciding the role and responsibilities of various functionaries; evaluating risk including cyber risk to your Company as a whole and also control measures/ security; such other powers as may be delegated by the Board of Directors from time to time. The Risk Management Committee of your Company met twice during the Financial Year 2021-22 i.e. on September 21, 2021 and March 3, 2022. Mr. Nilesh B. Mehta was appointed as the Chairperson to chair the said meetings of the Risk Management Committee.

The Board of Directors of your Company has designed a Risk Management Policy in a structured manner taking into consideration the following factors and the same is being monitored on a periodic basis by your Company:

1. The Management Approach;

2. Vision & Mission;

3. Key Business Goals;

4. Risk Library; and

5. Risk Management Focus.

Also, the Management has adopted the following 5 step approach keeping in view your Companys Vision and Mission:

1. Identifying Key Business goals;

2. Identifying the Risk Management focus;

3. Identifying Business risks;

 

4. Prioritizing the identified business risks; and

5. Rating the current risk management capability for identified risks.

Further, your Company has identified Key Business Goals for a five year horizon and a library of risk events which could be bottleneck in achieving the same. After defining the key business goals and the library of risk events, your Company identified the goals on which the management would focus.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company has been a firm believer that each and every individual including an artificial person owe something to the society at large. Mr. M. P. Ramachandran, Chairman Emeritus of your Company even before the inception of Corporate Social Responsibility provisions under the Act, has been involved in charitable and social activities in his individual capacity.

Your Company for the financial year 2021-22 was required to spend an amount of 410.15 Lacs (2% of the average net profits of last three financial years) towards Corporate Social Responsibility (CSR) activities. However, your Company for the financial year 2021-22 has spent an aggregate amount of 274.82 Lacs towards the CSR activities mentioned in the Annual Action Plan of the Company for the financial year 2021 -22, approved by the Board of Directors. Further, after setting off the excess amount of 9.67 Lacs spent in the financial year 2020-21, the balance unspent CSR amount for the Financial Year 2021-22 works out to 125.66 Lacs.

Accordingly, pursuant to the provisions of Section 135(6) of the Act and based on the recommendation of the CSR Committee, the Board of Directors of your Company approved opening of a special account in the name and style of "Jyothy Labs Limited - Unspent Corporate Social Responsibility Account 2021-22" and transferred the balance unspent amount of 126 Lacs, which is in excess of the balance unspent amount of 125.66 Lacs, to the aforesaid Bank Account on April 27, 2022.

Further, your Company has received request from existing projects supported by your Company for CSR funding to their on-going projects. Accordingly, the unspent amount will be utilized during the mandatory period of 3 years from the date of transfer.

The Annual Report on CSR activities that includes details about brief outline on CSR Policy developed and implemented by your Company, Composition of CSR Committee and CSR initiatives taken during the financial year 2021-22 in accordance with Section 135 of the Act and other details required to be disclosed as per the latest format prescribed under the Companies (Corporate Social Responsibility Policy) Rules, 2014 as amended by the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 dated January 22, 2021 is annexed herewith as "Annexure - G" to this Report.

Details about the CSR Policy adopted and formulated by your Company can be accessed from your Companys website at the link:

https://www.jyothylabs.com/investor/management- policies-notices/#Management-Policies

The Annual action plan for the financial year 2022-23 as recommended by the Corporate Social Responsibility Committee and approved by the Board of Directors of your Company at their respective Meetings held on May 24, 2022 has also been uploaded on your Companys website at the link:

https://www.jyothylabs.com/wp-content/ uploads/2022/05/CSR-Annual-Action-Plan-2022-23.pdf

CHANGE IN NATURE OF BUSINESS

During the year under review, there was no change in the nature of business of your Company.

PERFORMANCE OF SUBSIDIARIES, ASSOCIATE COMPANIES/JOINT VENTURES

A statement containing the salient features of the financial statements of your Companys subsidiaries, Associates and Joint Venture Companies in the prescribed format AOC-1 is presented in separate section forming part of the financial statements and hence not repeated here in this Report for the sake of brevity. Policy for determining material subsidiaries, formulated and adopted by your Company can be accessed from your Companys website at the link:

https://www.jyothylabs.com/investor/management- policies-notices/#Management-Policies

No Company has become or ceased to be your Companys subsidiary, joint venture or associate company during the financial year 2021-22, except cessation of its step- down subsidiaries as per the information provided herein below:

Based on the Joint Petition filed by the Subsidiary of your Company viz. Jyothy Fabricare Services Limited, (JFSL) [the Transferee Company] along with JFSLs Wholly Owned Subsidiary viz. Four Seasons Drycleaning Company Private Limited (Second Transferor Company), the Honble National Company Law Tribunal, Mumbai Bench have sanctioned the Scheme of Amalgamation between Four Seasons Drycleaning Company Private Limited (Second Transferor Company) with JFSL (the Transferee Company) vide their order dated February 16, 2021. Further during the year under review, the Honble bench of National Company Law Tribunal, Bengaluru had also allowed the Scheme of Amalgamation of Snoways Laundrers & Drycleaners Private Limited (First Transferor Company) and Four Seasons Drycleaning Company Private Limited (Second Transferor Company) with JFSL (the Transferee Company) and had granted their final order on December 8, 2021.

FIXED DEPOSITS

Your Company did not accept/renew any fixed deposits from public and no fixed deposits were outstanding or remained unclaimed as on March 31, 2022.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by any Regulator/Court that would impact the going concern status of your Company and its future operations.

INTERNAL FINANCIAL CONTROLS

The Internal Financial Controls adopted and followed by your Company are adequate and are operating effectively. Your Company has adopted a dynamic Internal Financial Controls framework based on the best practices followed in the industry. Under the said framework, Risk and Control Matrix are defined for the following process(es):-

1. Fixed Assets;

2. Financial Statement Closing Process;

3. Information Technology;

4. Inventory Management;

5. Marketing and Advertising;

6. Payroll;

7. Production Process;

8. Taxation; and

9. Treasury.

M/s. MGB Advisors Pvt. Ltd. Chartered Accountants have been entrusted with the responsibility of testing the controls identified and implemented by your Company for all the aforesaid processes.

During the year under review, no material or serious observations have been received from the Internal Auditors of your Company regarding inefficiency or inadequacy of such controls.

CONSOLIDATED ACCOUNTS

The consolidated financial statements of your Company are prepared in accordance with the relevant Indian Accounting Standards issued by the Central Government under Section 133 of the Act and forms integral part of the Annual Report.

CORPORATE GOVERNANCE

The report on Corporate Governance as stipulated under Regulation 34(3) read with Schedule V of the Listing

Regulations together with the Certificate received from M/s. Rathi & Associates, Practicing Company Secretaries, confirming compliance of Corporate Governance requirements is attached and forms an integral part of this Report.

BUSINESS RESPONSIBILITY REPORT

As per the requirements of Regulation 34(2)(f) of the Listing Regulations, the Business Responsibility Reports are applicable to top 500 listed companies based on market capitalization. Further, SEBI vide its notification dated December 26, 2019, notified the provisions of the SEBI (Listing Obligations and Disclosure Requirements) (Fifth Amendment) Regulations, 2019 and has extended the applicability to top 1000 listed companies based on market capitalization.

Your Company being one of the top 500 listed companies is required to report on Business Responsibility. Accordingly, the report on Business Responsibility forms an integral part of this report.

COMPLIANCE WITH SECRETARIAL STANDARDS

During the year under review, your Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.

REMUNERATION/COMMISSION FROM ANY OF ITS SUBSIDIARIES

During the year under review, neither the Managing Directors nor the Whole-time Director of your Company received any remuneration or commission from any of its subsidiaries.

EMPLOYEE STOCK OPTION SCHEME (ESOS)

During the financial year under review, no options were granted, vested or exercised and hence, the disclosure as required under Section 62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 and Regulation 14 of the Securities Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 is not required to be furnished.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

Your Company has a Vigil Mechanism in place which includes a Whistle Blower Policy in terms of the Listing Regulations for Directors and Employees of your Company to provide a mechanism which ensures adequate safeguards to Employees and Directors from any victimization on raising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any financial statements and reports etc.

The Vigil Mechanism/Whistle Blower Policy of your Company can be accessed from your Companys website at the link:

https://www.jyothylabs.com/investor/management- policies-notices/#Management-Policies

Your Company has put in place a mechanism in consonance with the requirements of Section 177 of the Act and Regulation 18(3) of the Listing Regulations for the Directors, employees and other stakeholders to report genuine concerns about unethical behavior, actual or suspected fraud or violation of the Code of Conduct or policy framed by your Company. All Protected Disclosures can be reported by the Whistle Blower in writing or through call on the following number i.e. 18601232120 or Hotline number i.e. 022-66892804 or alternatively, the same can also be sent through email on whistleblower@ jyothy.com with the subject "Protected disclosure under the Whistle Blower Policy".

The Whistle Blowers have a right/option to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Codes of Conduct or policy directly to the Chairman of the Audit Committee. During the year under review, no protected disclosure from any Whistle Blower was received by the designated officer under the Vigil Mechanism.

INTERNAL CONTROL SYSTEMS

Your Company has adequate internal control systems and procedures in place for effective and smooth conduct of business and to meet exigencies of operation and growth. Your Company has set up Standard Operating Process (SOP), procedures and controls apart from regular Internal Audits. Roles and responsibilities have been laid down for each process owners. Management Information System has been established which ensures that adequate and accurate information is available for reporting and decision making.

Internal Audit is conducted by an independent firm of Chartered Accountants viz. M/s. Mahajan & Aibara Chartered Accountants, LLP. Internal Auditors regularly check the adequacy of the system, their observations are reviewed by the management and remedial measures, as necessary, are taken. Internal Auditors report directly to the Chairman of the Audit Committee to maintain its objectivity and independence.

Your Company ensure compliance of all applicable laws through a Compliance Tool software mechanism viz. "Legatrix" designed by Legasis Services Private Limited which ensures compliance with the provisions of all applicable laws to your Company adequately and effectively.

TRANSFERS TO INVESTOR EDUCATION AND PROTECTION FUND

Transfer of Equity Shares:

Pursuant to the provisions of Section 124(6) of the Act and the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 notified by the Ministry of Corporate Affairs on September 7, 2016 and subsequently amended vide notification dated February 28, 2017, all the equity shares of any Company in respect of which dividend amounts have not been paid or claimed by the shareholders for seven consecutive years or more are required to be transferred to demat account of the Investor Education and Protection Fund Authority (IEPF Account).

Accordingly, 19,918 shares of 480 members of your Company were transferred to Demat Account of IEPF Authority on October 7, 2021. Your Company had sent individual notice to all the aforesaid members and has also published the notice in the leading English and Marathi newspapers. The details of the aforesaid members are available on website of your Company i.e. www.jyothylabs.com.

Transfer of Unpaid/Unclaimed Dividend:

Further, pursuant to the provisions of Section 124(5) of the Act, the dividend which remained unclaimed/ unpaid for a period of seven years from the date of transfer to unpaid dividend account is required to be transferred to the Investor Education and Protection Fund (IEPF) established by the Central Government.

As a result, the unclaimed/unpaid dividend pertaining to the financial year 2013-14 which remained unpaid and unclaimed for a period of 7 years has been transferred by your Company to the IEPF.

Your Company has uploaded the details of unclaimed/ unpaid dividend for the financial year 2013-14 onwards on its website i.e. www.jyothylabs.com and on website of the Ministry of Corporate Affairs i.e. www.mca.gov. in and the same gets revised/updated from time to time pursuant to the provisions of IEPF (Uploading of Information Regarding Unpaid and Unclaimed Amount Lying with Companies) Rules, 2012.

Further, the unpaid final dividend amount pertaining to the financial year 2014-15 will be transferred to IEPF during the Financial Year 2022-23.

EMPLOYEE RELATIONS

Your Company has always provided a congenial atmosphere for work to all its employees that is free from discrimination and harassment. Employee relations remained cordial during the year under review.

MANUFACTURING FACILITIES

Your Company has state-of-the-art facilities at all of its manufacturing locations spread across India. Furthermore, six manufacturing plants of your Company situated at Roorkee, Wayanad, Jammu, Pithampur, Puducherry and Baddi are ISO 9001 -2015 certified.

PREVENTION OF SEXUAL HARASSMENT

Your Company has framed Anti - Sexual Harassment Policy at workplace and has constituted an Internal Complaints Committee (ICC) as per the requirement of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed thereunder. No complaints with allegations of any sexual harassment were reported during the year under review.

PARTICULARS OF EMPLOYEES

The disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended and forming part of the Directors Report for the year ended March 31, 2022 is annexed herewith as "Annexure - H" to this Report.

DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016)

Your Company on December 21, 2020 filed an application before the Registrar, National Company Law Tribunal, Chennai Bench (NCLT) as a financial creditor to initiate corporate insolvency resolution process under Section 7 read with Chapter II of Part II/ Under Chapter IV of Part II of the Insolvency and Bankruptcy Code, 2016 (Code) against Abhiraami Chemicals Limited (ACL). During the year under review, vide order dated October 04, 2021 the NCLT admitted the petition in terms of Section 7 of the Code.

In view of fact that Abhiraami Chemicals Limited does not have any operation since the Financial Year 2015-16 and has zero revenue from operations since the year 2015-16, the Committee of Creditors (CoC) vide its meeting held on November 26, 2021 recommended and approved liquidation of the Abhiraami Chemicals Limited and resolution professional has been appointed as liquidator. The Liquidator has filed the application for liquidation of Abhiraami Chemicals Limited under Section 33 of the Code with NCLT, Chennai on March 01, 2022 and the matter is pending before the NCLT, Chennai.

CAUTIONARY NOTE

Certain statements in the "Management Discussion and Analysis" section may be forward-looking. Such forward looking statements are subject to risks and uncertainties and therefore actual results could be different from what your Directors envisage in terms of future performance and outlook.

ACKNOWLEDGEMENT

Your Directors express their sincere appreciation for the contribution and commitment of the employees of your Company at all levels and for the excellent support provided by the members, customers, distributors, suppliers, bankers, media and other stakeholders, during the financial year under review. Your Company looks forward to continued and unstinted support in its endeavor to make lives of consumers better by providing world class products at affordable price.