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NOTICE
Notice is hereby given that the 26th Annual General Meeting of the members of JVL Agro Industries Limited will be held on Friday, September 25, 2015 at 3.00 P.M. at Hotel Radisson, The Mall, Cantonment, Varanasi (U.P.), India to transact the following business:
ORDINARY BUSINESS:1. To receive, consider and adopt the Audited Balance Sheet
as on March 31, 2015 and Statement of Profit & Loss for the year ended on that date and the report of Directors’ and Auditor’s thereon.
2. To declare a Dividend on equity shares for the financial year ended on March 31, 2015.
3. To re-appoint Mr. Dina Nath Jhunjhunwala, Director (DIN 00189195) who retires by rotation and being eligible offers himself for re-appointment.
4. To appoint Auditors and fix their remuneration and in this regard to consider and if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution:
“RESOLVED THAT pursuant to the provisions of Section 139 of the Companies Act, 2013 read with Rule 3 of the Companies (Audit and Auditors) Rules 2014, and pursuant to recommendation of Audit Committee of the Board of Directors M/s Singh Dikshit & Company, Chartered Accountants, the retiring auditor of the company who have furnished the eligibility certificate under section 141 of the Companies Act, 2013 be and is hereby re-appointed as Statutory Auditor of the Company from the conclusion of this Annual General Meeting of the Company until the conclusion of next Annual General Meeting of the Company on such remuneration as shall be fixed by the Board of Directors in consultation with Audit Committee, exclusive of travelling and other out of pocket expenses.”
SPECIAL BUSINESS:5. To approve the remuneration of the Cost Auditors for the
financial year ending March 31, 2016 and in this regard to consider and, if thought fit, to pass, with or without modification(s), following resolution as an Ordinary Resolution:
“RESOLVED THAT pursuant to the provisions of Section 148 and all other applicable provisions of the Companies Act, 2013 and Rule 14 of the Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof, for the time being in force), Mr. Sudhir Saxena, Cost Accountant (S.K. Saxena & Co., C/o 11, Shanti Nagar, Nai Sarak, Gwalior, Madhya Pradesh) who was appointed as Cost Auditors by the Board of Directors of the Company, to conduct the audit of the cost records of the Company for the financial year ending March 31, 2016, be paid the remuneration of H50,000/- plus out of pocket expenses incurred for traveling, lodging and other expenses in connection with conducting the cost audit as recommended by the audit committee be and is hereby ratified and confirmed.”
“RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorized to do all acts & take all such steps as may be necessary, proper or expedient to give effect to this resolution.”
6. To adopt new Article of Association of the Company containing regulations in conformity with the Companies Act, 2013 and in this regard to consider and, if thought fit, to pass, with or without modification(s), following resolution as a Special Resolution:
“RESOLVED THAT pursuant to the provisions of Section 5 and 14, Schedule I made thereunder read with Companies (Incorporation) Rules, 2014 and all other applicable provisions of the Companies Act, 2013 (including any
JVL AGRO INDUSTRIES LIMITEDRegd. Off: Jhunjhunwala Bhawan,Nati Imli, Varanasi-221001 (U.P.)
Tele: +91-542-2595930-32; Fax: +91-542-2595941 e-mail: [email protected] ; website: www.jvlagro.com, www.jhoola.com
(CIN L15140UP1989PLC011396)
statutory modification(s) or re-enactment thereof, for the time being in force), the new set of Articles of Association pursuant to the Act based on the form of Table F under the Act as submitted to this meeting be and is hereby approved and adopted in substitution, and to the entire exclusion, of the articles contained in the existing Articles of Association of the Company.”
“RESOLVED FURTHER THAT for the purpose of giving effect to the above resolution, the Board be and is hereby authorized to do such acts, deeds and things as it may, in its absolute discretion, deem necessary and expedient to settle all questions, difficulties or doubts arising at any stage in this regard without requiring the Board to secure any further
consent or approval from the members of the Company and intend that they shall be deemed to have given their approval expressly by the authority of this resolution.”
“RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to do all acts and take all such steps as may be necessary, proper or expedient to give effect to this resolution.”
Place: Varanasi By order of the Board of DirectorsDate: August 25, 2015 Sd/- Kartik Agrawal Company Secretary
NOTES:
1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY OR PROXIES TO ATTEND AND VOTE INSTEAD OF HIMSELF/HERSELF AND SUCH A PROXY/PROXIES NEED NOT BE A MEMBER OF THE COMPANY.
A person can act as a proxy on behalf of members not exceeding fifty (50) and holding in aggregate not more than 10% of the total share capital of the Company carrying voting rights. In case a proxy is proposed to be appointed by a member holding more than 10% of the total share capital of the Company carrying voting rights, then such proxy shall not act as a proxy for any other person or shareholder. The instrument appointing a proxy should, however, be deposited at the registered office of the Company not less than 48 hours before the commencement of the meeting.
2. The Explanatory Statement pursuant to Section 102(1) of the Companies Act, 2013, relating to special business to be transacted at the meeting annexed hereto.
3. In terms of Sections 107 & 108 of the Companies Act, 2013 read with Companies (Management and Administration) Rules, 2014 and read with clause 35B of the Listing Agreement, the Company is providing its members the facility to exercise their right to vote at the meeting by electronic means on any or all of the businesses specified in the accompanying Notice. Necessary arrangements have been made by the Company with CDSL to facilitate e-voting. E-voting is optional and members shall have the option to vote either through e-voting or in person at the General Meeting.
The procedure and instructions for voting through electronic
means are as follows:-
A. In case of Shareholders receiving e-mail from CDSL:
(i) The remote e-voting period begins on 22/09/2015 at 9:00 A.M. and ends on 24/09/2015 at 5:00 P.M. During this period shareholders’ of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date (record date) of 18/09/2015, may cast their vote electronically. The e-voting module shall be disabled by CDSL for voting thereafter.
(ii) The shareholders should log on to the e-voting website www.evotingindia.com during the voting period.
(iii) Click on “Shareholders” tab.
(iv) Select the “JVL AGRO INDUSTRIES LIMITED” form the drop down menu and click on submit
(v) Now Enter your User ID
a. For CDSL: 16 digits beneficiary ID,
b. Members holding shares in Physical Form should enter Folio Number registered with the Company.
(vi) Next enter the Image Verification as displayed and Click on Login.
(vii) If you are holding shares in demat form and had logged on to www.evotingindia.com and voted on an earlier voting of any company, then your existing password is to be used.
(viii) If you are a first time user follow the steps given below:
(ix) After entering these details appropriately, click on “SUBMIT” tab.
(x) Members holding shares in physical form will then directly reach the EVSN selection screen. However, members holding shares in demat form will now reach ‘Password Creation’ menu wherein they are required to mandatorily enter their login password in the new password field. Kindly note that this password is to be also used by the demat holders for voting for resolutions of any other company on which they are eligible to vote, provided that company opts for e-voting through CDSL platform.
Note: It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential.
(xi) For Members holding shares in physical form, the details can be used only for e-voting on the resolutions contained in this notice.
(xii) Click on the EVSN for the relevant JVL Agro Industries Limited on which you choose to vote.
(xiii) On the voting page, you will see “RESOLUTION DESCRIPTION” and against the same the option “YES/NO” for voting. Select the option YES or NO as desired. The option YES implies that you assent to the Resolution and option NO implies that you dissent to the Resolution.
(xiv) Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire Resolution details.
(xv) After selecting the resolution you have decided to vote on, click on “SUBMIT”. A confirmation box will be displayed. If you wish to confirm
your vote, click on “OK”, else to change your vote, click on “CANCEL” and accordingly modify your vote.
(xvi) Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify your vote.
(xvii) You can also take out print of the voting done by you by clicking on “Click here to print” option on the voting page.
(xviii) If Demat account holder has forgotten the same password then Enter the User ID and the image verification code and click on Forgot Password & enter the details as prompted by the system.
(xix) Note for Institutional Shareholders:
• Institutional shareholders (i.e. other than Individuals, HUF, NRI etc.) are required to log on to https://www.evotingindia.co.in and register themselves as Corporate.
• A scanned copy of the Registration Form bearing the stamp and sign of the entity should be emailed to [email protected].
• After receiving the login details they have to create a compliance user using the admin login and password. The Compliance user would be able to link the account(s) for which they wish to vote on.
• The list of accounts should be mailed to [email protected] and on approval of the accounts they would be able to cast their vote.
For Members holding shares in Demat Form and Physical Form
PAN Enter your 10 digit alpha-numeric *PAN issued by Income Tax Department (Applicable for both demat shareholders as well as physical shareholders), and
Members who have not updated their PAN with the Company/Depository Participant are requested to use the first two letters of their name and the 8 digits of the folio number/member ID in the PAN field.
In case the sequence number is less than 8 digits enter the applicable number of 0’s before the number after the first two characters of the name in CAPITAL letters. Eg. If your name is Ramesh Kumar with sequence number 1 then enter RA00000001 in the PAN field.
DOB Enter the Date of Birth as recorded in your demat account or in the company records for the said demat account or folio in dd/mm/yyyy format.
Dividend Bank Details
Enter the Dividend Bank Details as recorded in your demat account or in the company records for the said demat account or folio.
Please enter the DOB or Dividend Bank Details in order to login. If the details are not recorded with the depository or company please enter the number of shares in the Dividend Bank details field.
• A scanned copy of the Board Resolution and Power of Attorney (POA) which they have issued in favour of the Custodian, if any, should be uploaded in PDF format in the system for the scrutinizer to verify the same.
• In case you have any queries or issues regarding e-voting, you may refer the Frequently Asked Questions (“FAQs”) and e-voting manual available at www.evotingindia.co.in under help section or write an e-mail to [email protected].
(xx) GENREAL INSTRUCTIONS :
• Commencement of e-voting: From 9:00 A.M. on 22/09/2015
End of e-voting: Up to 5:00 P.M. on 24/09/2015
• During the e-voting period, Shareholders of the Company, holding shares as on the cut-off date (record date) 18/09/2015 either in physical form or in dematerialized form may cast their vote electronically. The E-voting module shall be disabled by CDSL for voting thereafter.
The voting rights of shareholders shall be in proportion to their shares of the paid up equity share capital of the Company as on (record date) of 18th September, 2015
(xxi) The Company has appointed Mr. Adesh Tandon, Practicing Company Secretary (Membership No. F2253 and Certificate of Practice No.1121), as ‘Scrutinizer’ to scrutinse the e-voting in a fair and transparent manner. The Scrutinizer shall, within a period of not exceeding three working days from the conclusion of the e-voting period, unblock the votes in the presence of at least two witnesses, not in employment of the Company and make Scrutinizer’s Report of the votes cast in favour of or against, if any, forthwith to the Chairman of the Company.
(xxii) Kartik Agrawal, Company Secretary e-mail: [email protected] has been designated for the purpose of registering complaints by investor, pursuant to clause 47(f) of the Listing Agreement.
(xxiii) The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account Number (PAN) by every participant in securities market. Members holding shares in
electronic form are, therefore, requested to submit their PAN to their Depository Participants with whom they are maintaining their demat accounts. Members holding shares in physical form can submit their PAN details to the Company.
(xxiv) Facility for voting, either through electronic voting system or ballot or polling paper shall also be made available at the meeting and members attending the meeting who have not already cast their vote by remote e-voting shall be able exercise their right at the meeting.
(xxv) The members who have cast their vote by remote e -voting may also attend the meeting but shall not be entitled to cast their vote again.
4. In case of joint holders attending the meeting, only such joint holder who is higher in the order of names will be entitled to vote.
5. Members/Proxies should fill the attendance slip for attending the meeting. Members who hold shares in dematerialized form are requested to bring their client ID and DP ID numbers for easy identification for attendance at the meeting.
6. The company has notified closure of register of members and share transfer books of the company from 19th September 2015 to 25th September 2015 (both days inclusive).
7. Members holding shares in electronic form are requested to intimate immediately any change in their address or bank mandates to their depository participants with whom they are maintaining their demat accounts. Members holding shares in physical form are requested to inform the change of their registered address to our Registrar Transfer agent (RTA), M/s MCS Share Transfer Agent Ltd. at its office at F-65, 1st Floor, Okhla Indl. Area, Phase 1, New Delhi 110 020 by quoting their folio number.
8. Company’s equity shares are listed at Bombay Stock Exchange & National Stock Exchange.
Place: Varanasi By order of the Board of DirectorsDate: August 25, 2015 Sd/- Kartik Agrawal Company Secretary
EXPLANATORY STATEMENT UNDER SECTION 102(1) OF THE COMPANIES ACT, 2013 (“the Act”)
ITEM NO.5
The Board, on the recommendation of the Audit Committee, has approved the appointment and remuneration of Mr. Sudhir Saxena, Cost Accountant (S.K. Saxena & Co., C/o 11, Shanti Nagar, Nai Sarak, Gwalior, Madhya Pradesh) as Cost Auditors to conduct the audit of the cost records of the Company for the financial year ending March 31, 2016 at a remuneration of H50,000/- plus out of pocket expenses incurred for traveling, lodging and other expenses in connection with conducting the cost audit.
In accordance with the provisions of Section 148 of the Act read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors has to be ratified by the shareholders of the Company.
Accordingly, consent of the members is sought for passing an Ordinary Resolution as set out at Item No.5 of the Notice for ratification of the remuneration payable to the Cost Auditors for the financial year ending March 31, 2016.
None of the Directors / Key Managerial Personnel of the Company / their relatives are, in any way, concerned or interested, financially or otherwise, in the resolution set out at Item No.5 of the Notice.
The Board recommends the Ordinary Resolution set out at Item No.5 of the Notice for approval by the shareholders.
ITEM NO.6
The Articles of Association (“AoA”) of the Company is presently in force since its incorporation of the Company i.e. year 1989. The existing Articles of Association are in line with the erstwhile Companies Act 1956, which are thus no longer in full conformity with the Companies Act, 2013 (’New Act’). The New Act is now largely in force and substantive sections of the Act which deal
with the general working of companies stand notified. With the coming into force of the Act several articles of the existing Articles of Association of the Company require alteration / deletions. Given this position, it is considered expedient to wholly replace the existing Articles of Association by a new set of Articles. It is thus expedient to adopt new set of Articles of Association (primarily based on Table F set out under the Companies Act, 2013), in place of existing Articles of Association of the Company instead of amending the Articles of Association by alteration/incorporation of provisions of the Companies Act, 2013. Hence the Board of Directors at its meeting held on August 25, 2015 decided to adopt new set of Articles in place of existing Articles of Association of the Company and seek shareholders’ approval for the same. In terms of section 5 and 14 of the Companies Act, 2013, the consent of the members by way of special resolution is required for adoption of new set of Articles of Association of the Company. Your approval is sought by voting via e-Voting/polling in terms of the provisions of inter-alia, Section 14 of the Companies Act, 2013, read with the Companies (Incorporation) Rules, 2014. A copy of the proposed set of new Articles of Association of the Company would be available for inspection for the members at the Registered Office of the Company during the office hours on any working day, except Saturdays, between 11.00 a.m. to 6.00 p.m. None of the Directors, Key Managerial Personnel of Company and their relatives are concerned or interested in the said resolution.
Place: Varanasi By order of the Board of DirectorsDate: August 25, 2015 Sd/- Kartik Agrawal Company Secretary
PLEASE FILL ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE MEETING HALL (Joint shareholders may obtain additional slip at the venue of the meeting).
DP ID* ...................................................................................... Folio No............................................................................
Client ID* ................................................................................... No. Of Shares....................................................................
NAME AND ADDRESS OF THE SHAREHOLDER
I hereby record my presence at the 26th Annual general Meeting of the company held on 25th September 2015 at 3.00 P.M. at Hotel Radisson, The Mall, Cantonment, Varanasi (U.P.) India
..............................................................*Applicable for shareholders holding shares in electronic form Signature of shareholder/Proxy
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ATTENDANCE SLIP
JVL AGRO INDUSTRIES LIMITEDRegd. Off: Jhunjhunwala Bhawan,Nati Imli, Varanasi-221001 (U.P.)
Tele: +91-542-2595930-32; Fax: +91-542-2595941 e-mail: [email protected] ; website: www.jvlagro.com, www.jhoola.com
(CIN L15140UP1989PLC011396)
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Proxy FormForm No. MGT-11
[Pursuant to Section 105(6) of the Companies Act, 2013 and Rule 19(3) of the Companies (Management and Administration) Rules, 2014]
(CIN L15140UP1989PLC011396)Name of the company: JVL Agro Industries Limited
Registered office: Jhunjhunwala Bhawan, Nati Imli, Varanasi – 221001 (U.P.) India
Name of the member (s) :
Registered address :
E-mail Id:
Folio No/ *Client Id :
*DP ID :
I/We, being the member (s) of ................................................................... shares of the above named company, hereby appoint:
1. Name :Address : E-mail Id : Signature : .......................................................... , or failing him
2. Name :Address : E-mail Id : Signature : .......................................................... , or failing him
3. Name :Address : E-mail Id : Signature : .......................................................... , or failing him
as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 26th Annual General Meeting of the Company, to be held on the 25th day of September 2015 at 3.00 P.M. at Hotel Radisson, The Mall, Cantonment, Varanasi (U.P.) India and at any adjournment thereof in respect of such resolutions as are indicated below:
Resolution No.
1. To consider and adopt audited financial statement, reports of the Board of Directors and Auditors. (Ordinary Resolution)
2. To declare a Dividend on equity shares for the financial year ended on March 31, 2015. (Ordinary Resolution)
3. To re-appoint Mr. Dina Nath Jhunjhunwala, Director who retires by rotation. (Ordinary Resolution)
4. Re-appointment of Statutory Auditor of the Company. (Ordinary Resolution)
5. To approve the remuneration of Cost Auditor. (Ordinary Resolution)
6. To adopt new set of Articles of Association of the company. (Special Resolution)
Signed this ..................... day of .................20.............
Signature of shareholder
Signature of Proxy holder(s)
AffixRevenueStamp
Notes:
1. This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company, not less than 48 hours before the commencement of the Meeting.
2. A Proxy need not be a member of the Company.
3. A person can not act as a proxy on behalf of members not exceeding fifty and holding in the aggregate not more than 10 % of the share capital of the Company carrying voting rights. A member holding more than 10 % of the share capital of the Company carrying voting rights may appoint a single person as proxy and such person shall not act as a proxy for any other person or shareholder.
4. This is only optional. Please put a “X” in the appropriate column against the resolution indicated in the box. If you leave the ‘For’ or ‘Against’ column blank against any or all the resolutions, your proxy will be entitled to vote in the manner as he/she thinks appropriate.
5. Appointing a proxy does not prevent a member from attending the meeting in person if he wishes.
6. In the case of joint-holders, the signature of any one holder will be sufficient, but names of all the joint-holders should be stated.
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POLLING PAPER
ASSENT / DISSENT FORM FOR VOTING ON AGM RESOLUTIONS1. Name(s) & Registered Address : of the sole / first named Member2. Name(s) of the : Joint-Holder(s), if any3. i) Registered Folio No. : ii) *DP ID No. & Client ID No. [*Applicable to Members holding shares in dematerialized form]4. Number of Share(s) held:5. I / We hereby exercise my / our vote in respect of the following resolutions to be passed for the business stated in the Notice of the
26th Annual General Meeting dated September 25, 2015, by conveying my / our assent or dissent to the resolutions by placing tick (√) mark in the appropriate box below:
S. No.
RESOLUTION No. of Shares
I / We assent to (FOR)
I / We dissent to (FOR)
Ordinary Business
1. Adoption of Financial Statements for the financial year ended March 31, 2015 and Reports of Board of Directors and Auditors thereon.
2. Declaration of dividend on equity shares for the financial year ended 31st March, 2015
3. Appointment of a director in place of Mr. D.N. Jhunjhunwala, who retires by rotation and being eligible, offers himself for re- appointment
4. Appointment of M/s Singh Dikshit & Co., Chartered Accountants, Varanasi as Statutory Auditors of the Company and to fix their remuneration.Special Business
5. To approve the remuneration of the Cost Auditors for the financial year ending March 31, 2016
6. To adopt new set of Articles of Association of the Company in line with the Companies Act, 2013
Place: ..................................................Date: Signature of the Member or Authorized RepresentativeNotes: (i) If you opt to cast your vote by e-voting, there is no need to fill up and sign this form.
(ii) Last date for receipt of Assent/Dissent Form by the Scrutinizer: September 23rd, 2015 (6.00 pm).
(iii) Please read the instructions printed overleaf carefully before exercising your vote.
JVL AGRO INDUSTRIES LIMITEDRegd. Off: Jhunjhunwala Bhawan,Nati Imli, Varanasi-221001 (U.P.)
Tele: +91-542-2595930-32; Fax: +91-542-2595941 e-mail: [email protected] ; website: www.jvlagro.com, www.jhoola.com
(CIN L15140UP1989PLC011396)
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Dear Shareholder,
RE: Green Initiative in Corporate Governance: Go Paperless
The Ministry of Corporate Affairs (‘Ministry’) has taken a “Green Initiative in Corporate Governance” by allowing paperless compliances by companies through electronic mode. In accordance with the recent circulars bearing no. 17/2011 dated 21.04.2011 and 18/2011 dated 29.04.2011 issued by the Ministry, companies can now send various notices /documents (including notice calling Annual General Meeting, Audited Financial Statements, Directors’ Report, Auditors’ Report etc) to their shareholders through electronic mode, to the registered e-mail addresses of the shareholders.
It is a welcome move for the society at large, as this will reduce paper consumption to a great extent and allow public at large to contribute towards a greener environment.
This is also a golden opportunity for every shareholder of JVL AGRO INDUSTRIES LIMITED (the Company) to contribute to the Corporate Social Responsibility initiative of the Company. Please note that the Company will send future communications including Annual Reports etc. in electronic mode to your e-mail ID.
We therefore invite you to contribute to the cause, by requesting you that:
1. If your shares are in electronic mode, kindly update your e-mail Id with your Depository Participant, and
2. If your shares are in physical mode, kindly register your e-mail-Id with our RTA MCS Share Transfer Agent Limited by sending a letter at following address:
MCS SHARE TRANSFER AGENT LIMITED OR JVL AGRO INDUSTRIES LIMITEDF-65, Ist Floor, Jhunjhunwala BhawanOkhla Industrial Area, Phase-I, Nati ImliNew Delhi- 110020 Varanasi – 221001, U.P.
Kindly note that if you still wish to get a hard copy/physical copy of all the communications, the Company undertakes to provide the same at no extra cost to you. In case you desire to receive the above mentioned documents in physical form, you are requested to send an e-mail to [email protected] or send a letter at the above mentioned address.
The form for registering your e-mail Id is enclosed (Only for Physical shareholders).
Thanking You.For JVL Agro Industries Limited
Sd/-(Kartik Agrawal)Company Secretary
JVL AGRO INDUSTRIES LIMITEDRegd. Off: Jhunjhunwala Bhawan,Nati Imli, Varanasi-221001 (U.P.)
Tele: +91-542-2595930-32; Fax: +91-542-2595941 e-mail: [email protected] ; website: www.jvlagro.com, www.jhoola.com
(CIN L15140UP1989PLC011396)
E-COMMUNICATION REGISTERATION FORM(Unit: JVL AGRO INDUSTRIES LTD.)
To.........................................................................................................................................................................................
Dear Sir/Madam,
RE: Green Initiative in Corporate Governance
I agree to receive all communication from the Company in electronic mode. Please register my e-mail id in your records for sending communication through e-mail.Folio No. / DP ID & Client ID : ............................................................................................................................................
Name of 1st Registered Holder : ............................................................................................................................................
Name of Joint Holder(s) : ............................................................................................................................................
.............................................................................................................................................
Registered Address : ............................................................................................................................................
.............................................................................................................................................
.............................................................................................................................................
E-mail ID : ............................................................................................................................................
Date: .....................................Signature of the first holder ..................................................
Important Notes:
1) On registration, all the communications will be sent to the e-mail ID registered in the folio/DP ID & Client ID.
2) The form is also available on the website of the company www.jvlagro.com.
3) Shareholders are requested to keep company informed as and when there is any change in the e-mail address. Unless the e-mail Id given hereunder is changed by you by sending another communication in writing, the company will continue to send the notices/documents to you on the above mentioned e-mail ID.
4) If shares held in electronic mode, kindly register your e-mail id with your DP and
5) You can also e-mail us on [email protected].
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JVL Agro Industries LimitedRegistered Office
Jhunjhunwala Bhawan, Nati ImliVaranasi 221001 (U.P.), India
P: +91-542-2595930/31/32, F: +91-542-2595941E: [email protected], W: www.jvlagro.com
CIN: L15140UP1989PLC011396
saal ek shuruaat anek!
JVL AGRO INDUSTRIES LIMITED
ANNUAL REPORT
142015
Corporate identity04
Our business model22
Being socially responsible35
Corporate governance report61
Financial highlights06
Better than the others26
Corporate information36
Financial section75
Our journey over the years08
Management discussion and analysis27
Director’s profile37
Managing director’s review12
Risk management33
Directors’ report38
Forward-Looking StatementIn this Annual Report, we have disclosed forward-looking information to enable investors to comprehend our prospects and take informed investment decisions. This report and other statements, written or oral, that we periodically make, contain forward-looking statements that set out anticipated results based on management’s plans and assumptions. We have tried, wherever possible, to identify such statements by using words such as ‘anticipates’, ‘estimates’, ‘expects’, ‘projects’, ‘intends’, ‘plans’, ‘believes’ and words of similar substance in connection with any discussion relating to future performance of the Company
We cannot guarantee that these forward-looking statements will be realised, although we believe we have been prudent in our assumptions. The achievement of results is subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialise, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Readers should bear this in mind.
We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
Saal ek.In 2014-15, JVL Agro Industries Limited reported profitable growth. Our revenues increased by 1.23% inspite of fall in oil prices in the international markets while profit after tax strengthened by 2.24%.
However, the big message that we wish to send out to our stakeholders is that the real performance of the year under review lies in the initiative taken by the Company, the true outcome of which will manifest in the years to come.
Shuruaat
JVL’s real achievement of 2014-15 revolved around various back-end initiatives, the true impact of which will only manifest in the years to come.
Through a widened portfolio. Through an enhanced capacity. Through a foray into newer regions. Through backward integration.
With the objective to emerge as a sustainably profitable company by addressing the growing appetite of a resurgent India.
anek!
15.53(in kilogram) quantum of vegetable oil consumed per capita in India
23.73(in kilogram) global average quantum of vegetable oil consumed per capita
The projected increase in vegetable oil demand in India if per capita consumption increases by 1 kg is 1.27 MT leading to a growth of 8-9% assuming population to remain stagnate.
1.27(in billion) the consumer base in India, the second largest in the world
JVL Agro Industries Limited’s story is not merely one that is unfolding within its manufacturing facilities.
It is unfolding across India.
Across kitchens. Dining tables. Retail stores.Markets. Mindsets.
With just one underlying message.
People saying...
It is around this simple health-based aspiration that we are transforming JVL Agro Industries Limited.
From being a processed oils company to a one-stop processed foods organisation.
From being a products-oriented company to a products-cum-infrastructure company.
From a single-country presence to a multi-country operation.
From addressing rural and suburban palates to becoming a preferred brand across economic classes.
From a regional presence to a pan-India footprint.
“We wish to eat safer and healthier.”
2 | JVL Agro Industries Limited Annual Report, 2014-15 | 3
JVL Agro Industries Limited.
The Company behind the brands available in the most densely populated states of India.
The Company behind the brands addressing 5% of the country’s processed oil basket.
The Company that is a market leader in key processed oil categories.
Who we areIncorporated in 1989 by Founder-Promoter, Mr. D. N. Jhunjhunwala, JVL Agro is one of the fastest growing edible oil processing companies in India (capacity of 3,000 TPD).
What we doAt JVL Agro, we are engaged in the manufacture of refined soyabean oil, refined palm oil, refined sunflower oil, refined cotton seed oil, vanaspati along with mustard oil and bakery shortening agents. The Company is also producing rice from its mill in Bihar with a production capacity of 60,000 TPA.
Where we areHeadquartered in Varanasi, the Company has manufacturing facilities located at various locations across India.
JVL Agro has a subsidiary company and an operational cum supply chain management office in Singapore.
The Company’s shares are listed and actively traded on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
Awards and accreditations• All JVL Agro plants and products comply with national food quality standards like FSSAI; all its plants are ISO 9001:2008-certified.
• The Company was recognised as the ‘Fastest Growing Vanaspati’ brand in 2006
• The Company was ‘Emerging Company of the Year’ 2007 by Globoil
• Mr. S.N. Jhunjhunwala, Managing Director, was conferred the ‘Globoil Man of the Year 2008’ award
• Mr. D.N. Jhunjhunwala, Chairman, was awarded the ‘Globoil India Legend 2011’ award
• The Company is in process of getting Kosher & Halal Quality Certification for making its products exportable to middle east countries.
MissionTo extend leadership from saturated fats to the entire vegetable oils segment in the first stage and to agro-based premium food products thereafter, from being present in a single region in India to acquiring a global manufacturing and marketing presence.
VisionTo delight the consumer through a complete portfolio of vegetable oils and other FMCG products through continuous research and development, leading to single-stop convenience.
Brand• Jhoola • Payal • Royal
Variants • Steamed • Par-boiled
• White rice
Rice
Brand• Jhoola • Shankar • Royal
Variants • Kachchi ghani
• Pakki ghani
Mustard oil
Brand• Jhoola • Payal • Royal
Variants• Olein • Soyabean • Cotton
seed • Palm • Sunflower
Refined oil
BrandJhoola
VariantsVanaspati Ghee
Vanaspati
BrandJhoola
Bakery shortening
Our products and brands
Products Product variant Brand name Manufacturing locations Capacity
Vanaspati Vanaspati Ghee, Bakery Shortening
Jhoola Naupur (Uttar Pradesh) and Dehri-on-sone (Bihar) 1,65,000 TPA
Refined Oil Olein, Soyabean, Cotton Seed, Palm and Sunflower
Jhoola, Payal and Royal
Naupur (Uttar Pradesh), Dehri-on-sone (Bihar), Alwar (Rajasthan) and Haldia (West Bengal)
6,00,000 TPA
Mustard Oil Kachchi ghani and Pakki ghani
Jhoola, Shankar and Royal
Alwar (Rajasthan) 1,20,000 TPA
Rice Steamed, Par Boiled and White Rice
Jhoola, Payal and Royal
Rohtas (Bihar) 60,000 TPA
4 | JVL Agro Industries Limited Annual Report, 2014-15 | 5
How JVL performed in 2014-15
2014-15 versus 2013-14
FY 2015 revenue break-up (products) (in J crore)
Vanaspati
Refined oil
Mustard oil
10/11 11/12 12/13 13/14 14/15
12.9
2
12.0
3
11.6
4
11.3
6
10.7
1
Fixed asset:turnover ratio
10/11 11/12 12/13 13/14 14/15
0.55
0.55
0.49
0.44
0.45
Debt-equity ratio
10/11 11/12 12/13 13/14 14/15
203.
00 289
.80 38
1.38 45
5.86
500.
36
Gross block (H crore)
Our initiativesEdible oils• Commissioned a sunflower oil processing plant at the Haldia unit.
• Launched ‘Royal’, the premium mustard and soyabean oil brand.
• Proposed to set up an edible oil refinery in Pipavav
(Gujarat), inclusive of a cotton seed crushing facility
• Proposed to set up a manufacturing capacity in Assam for producing refined oil, crushing mustard seeds and manufacturing cosmetics and rice.
Processed foods• Launched the Royal brand of rice
Food infrastructure• Proposed to set up a Mega Food Park in Bihar, one of the first in Eastern India.
Cosmetics• Proposed unit to manufacture cosmetics in Assam.
273.83234.54
2,740.32
J62.632014-15
J61.26 2013-14
PAT (crore)
J4,403.882014-15
J4,350.472013-14
Revenues (crore)
J123.792014-15
J123.97 2013-14
EBIDTA (crore)
2.812014-15
2.852013-14
EBIDTA margins (%)
1.422014-15
1.41 2013-14
Net margins (%)
J78.872014-15
J80.012013-14
Cash profit (crore)
6 | JVL Agro Industries Limited Annual Report, 2014-15 | 7
Our journey over the last 25 years
2008 2009 2010 2011 2015• Commenced production from the rice mill in Bihar.
• Clocked the highest profits in its history (H62.63 crore) despite slow growth in sales and sharp fall in oil prices in international markets.
• Commissioned a sunflower oil processing plant at its Haldia Unit and launched a branded sunflower oil in the market.
• Entered the premium segment with the launch of a new brand ‘Royal’ for refined and mustard oils.
2014• Garnered all-time high revenues of H4,405 crore.
• Extended into other processed food segments by establishing a rice mill in Bihar with a capacity of 60,000 TPA.
• Consolidated its growth by focusing on optimum utilisation of assets and curtailing interest costs.
• Laid the foundation for the next round of growth in other processed food segments.
2013• Achieved a topline of H3,500 crore.
• Set out to establish a rice mill and a cement unit in Rohtas, Bihar.
• Received an approval in principle from the Ministry of Food Processing in December 2013 for the Mega Food Park project promoted by the Company.
2012• Increased mustard seed crushing capacity to 400 MTPD, solvent extraction to 450 MTPD and storage capacity of mustard seed by 6,400 MT at the Alwar unit.
• Commenced production from the Company’s biggest unit, at Haldia.
• Introduced refined oil in Eastern India.
Listed on the National Stock Exchange of India Limited.
Commenced development of the Haldia unit with 1,200 TPD refining capacity, captive power plant and oleo chemical section.
• Commenced commercial production from the Bihar unit.
• Introduced products in Jammu and Kashmir, Himachal Pradesh and West Bengal.
• Commissioned an edible oil refinery/ saturated fats unit in Bihar.
• Commenced production from a new refinery in UP.
• Initiated de-oiled cake exports.
2007
• Emerged as the first UP based vanaspati manufacturer to commission a 3-MW power plant.
• Formed a wholly-owned Singapore-based subsidiary under JVL Overseas PTE Ltd.
• Introduced products in the North-Eastern states.
2006
• Acquired Rajasthan-based mustard oil seed crushing and refining plant.
• Invested in Adamjee Extraction, Sri Lanka, to import saturated fats under the Jhoola brand.
• Sold products in the states of UP, Bihar, Jharkhand, Madhya Pradesh, Uttaranchal and Chhattisgarh.
2005
Introduced a fractionation unit with a capacity of 200-TPD.
2000
Increased vanaspati production capacity to 200 TPD.
1999
• Operationalised a 60-TPD refined oil unit at Jaunpur.
• Forayed into crude soyabean and palmolein oil segments.
1995
Switched from legacy chemical method to modern mechanical method for vanaspati processing.
1993
Achieved a production of capacity of 100-TPD at the Varanasi facility.
1990
Commenced production with a manufacturing capacity of 25-TPD.
8 | JVL Agro Industries Limited Annual Report, 2014-15 | 9
From one product manufacturer in 2005-06, the Company has now
become a multi-product manufacturer over the years.
Our cooking
10 | JVL Agro Industries Limited Annual Report, 2014-15 | 11
Managing Director’s reviewA question and answer session with Mr. S. N Jhunjhunwala, the MD of the Company
increased the number of premium oil brands within our portfolio.
We introduced our own rice brand during the course of the year, leveraging the established brand of our vegetable oil products, the full impact of which will reflect in the financials in 2015-16. The result is that the non-edible oil proportion of our revenues increased by H4.43 crore during the second half of the financial year under review.
The big message that one needs to send out is that after decades of servicing India’s suburban and rural markets, we are moving towards premiumisation. The true impact of these moves will be manifested through enhanced margins and profits from 2015-16 onwards.
Q: What other big message you wish to send out to the shareholders? A: The other big message is that we continued to accelerate our evolution from a vegetable oils company into an FMCG organisation. Over the last decade, JVL Agro Industries Limited strengthened its intangibles – its sales channels, its brands, its sectoral knowledge and its vendor relationships. The time has come for the Company to leverage two of its biggest assets – its brand and its distribution network. The Jhoola brand enjoys top-of-the-mind recall across 40% of the Indian landmass. Our distribution network covers 19 states and nearly 60% of the country’s population. The Company recognised that these two building blocks would allow us to market more products with speed and cost-competiveness. This is precisely the direction that the Company is now headed in. The result is that we are rapidly growing the non-
vegetable oil component of our business over the foreseeable future through calculated forays into dairy, corn and wheat processing segments.
Q: Why are these initiatives relevant? A: There is a transition sweeping the country even as we speak. This transition is the result of a number of concurrent realities and developments – the rise of the electronic media, increased incomes, enhanced aspirations, a willingness to extend beyond traditional diets, an openness to use new cooking media beyond the traditional ones, a growing recognition of the fact that unbalanced diets can lead to lifestyle diseases and a growing desire to buy branded products. At JVL Agro Industries Limited, we could have selected to remain a vanaspati company. The reality is that vanaspati accounted for no more than 6.22% of our revenues during the financial year under review.
The other big message that we intend to send out is that we could have conveniently remained an edible oils company focused on one oil. Instead, we have evolved into a multi-product edible oils company. We are now engaged in premiumising our portfolio while at the bottom of our product pyramid are vanaspati and palm oil while at the apex are sunflower and soyabean oils, making it possible to address the needs of every consumer segment.
Most corporates would have been content with this transition but not JVL Agro Industries Limited. The Company embarked on its next evolutionary stage – from processed oils to processed foods. The proportion of foods in our revenue mix is only 0.10% today but over the
next five years, we expect to increase this to 20%, thereby strengthening our revenues growth, margins, profits and overall de-risking.
Q: In what other ways is the Company focused on capturing prevailing opportunities? A: Perhaps the biggest initiative at JVL Agro Industries Limited is centered round the Mega Food Park. It is our conviction that one of the most attractive sectors to invest in India is the food processing sector. India is the second largest producer of vegetable in the world. However, only 6% of the food grown in the country is processed today, significantly lower than some of the developed markets. The country’s food processing sector is intrinsic to national growth and development; it strengthens the case for the organised sector that leads to upstream (farmer) and downstream (consumer) benefits. It also enhances agricultural value-addition and standardisation and facilitates a transfer of wealth from the urban to the rural.
The Indian Government has done well to capitalise on this reality. Attractive fiscal incentives have been offered by the Central and State Governments including capital subsidies, tax rebates, depreciation benefits, as well as reduced customs and excise duties for processed food and relevant machinery. The Central Government has been incentivising the creation of a cutting-edge processing infrastructure which has, in turn, driven the growth of JVL
Agro Industries Limited over the last few years. The time has come for the Company to leverage the prevailing governmental support to ascend to the
next league – through the creation of a full-fledged Mega Food Park within a vegetable-rich pocket of the country. The proposed food park that JVL Agro Industries Limited intends to launch will represent a seamless ecosystem (farm to fork), comprising processing plants, downstream consumption industries, ancillary (banking among others) businesses, and effluent treatment infrastructure. It is our conviction that the creation of such an infrastructure will be catalytic for our business – it will provide us with the opportunity to locate a number of processing plants within the complex and will enable us to lease such facilities to other companies as well. We foresee that India will be littered with such hubs across the coming decades and our first-mover advantage in this niche will make it possible for us to extend this concept across various states before others.
Q: How is this project expected to unfold?A: We expect that this H125 crore project will be commissioned over the next three years. The project will not only generate attractive financial returns for JVL Agro Industries Limited but unleash a host of opportunities by making it possible to commission world-class food processing facilities within the organised realm at relatively lower costs.
Q: Were you pleased with the performance of the Company in 2014-15?A: The financial year 2014-15 was all about consolidation, wherein we focused on maximising asset utilisation, increasing our throughput, strengthening our operational efficiencies and attempting to grow our margins and profits. A number of shareholders will be surprised that despite such a proactive mindset, the Company reported relatively flat topline growth. The reality is that the industry was marked by a decline in average realisations for most edible oil manufacturers, which translated into muted topline growth of around 10% increase in tonnage.
Q. What were some of the positives of the Company’s working during the year under review?A: There were a number of positive developments during the year under review, the effects of which were not immediately visible in our working but will progressively manifest themselves in stronger financials in the years to come.
We were able to increase the sweating of our production capacities in 2014-15, which made it possible to generate higher operating efficiencies and amortise our fixed costs more effectively.
We enhanced the visibility of our sunflower and soyabean oil brands during the course of the year and
The reality is that vanaspati accounted for no more than 6.22% of our revenues during the financial year under review.
12 | JVL Agro Industries Limited Annual Report, 2014-15 | 13
Q. What are some of the other initiatives undertaken by the Company to strengthen the business?A: One of the decisive initiatives undertaken by our Company during the last financial year was acquiring the approval related to setting up a vegetable oil refining capacity in Ethiopia. At JVL Agro Industries Limited, we are convinced that Africa is today where India was about 20 years ago – with
one difference. Africa will catch up with the future faster than India had taken. Companies that invest proactively in the continent will be able to understand consumer needs quicker, launch demand-centric products, and strengthen their foothold in a relatively under-branded market – basically shrinking the learning curve faster.
The approval for setting up a vegetable oil plant in Ethiopia last year was perhaps the only instance of such a license being awarded to an Indian food processing corporate. The land was allotted to a wholly-owned subsidiary. This decision will make it possible for us to achieve a number of things – de-risk the Company from an overdependence on a single country and enter new geographies just when their growth curve begin to swell. Thus making it possible for us to extend our full range of Indian products to Africa.
Q: How does the Company intend to widen its pan-Indian presence? A: During the year under review, JVL Agro Industries Limited acquired 12.5
acres of land at the Pipavav port in Gujarat to commission its next plant (7.5 acres adjacent to the port and 5 acres inside the port). We are optimistic that this will open up a completely new growth avenue. We will import raw oils, process this at the port and use existing linkages to transfer the oil to key consumption pockets within the hinterland. We shall also be crushing cotton seed at this plant.
Assuming that this plant will be operational over the next three years, we acquired an edible oil processing capacity in Gujarat on a job-work basis with the objective to seed the market and establish a sales and distribution network even before the plant becomes operational. This is a tried and tested strategy which ensures that at least 50% of our throughput is in place even before the plant commences commercial production.
Besides, we intend to commission an oil, chemical and rice processing facility in Guwahati, the permission for which we expect to get soon. This initiative will represent a forward integration, a conscious divergence from our present business model where we serve byproducts that are sold to prominent FMCG brands. Once we commission the plant, we will directly manufacture cosmetics. Even as this is uncharted territory for us, we are optimistic on account of the cost benefits available to us on the one hand and the governmental incentives in Assam on the other, expected to translate into an
attractively low breakeven point from day one. We are optimistic of introducing reasonably priced cosmetic products addressing the middle-class, thereby democratising the market.
Q: What is the outlook for the Company? A: At JVL Agro Industries Limited, we are targeting a 15-20% growth in throughput and a 3% increase in EBIDTA margin over the next two years provided all market conditions remain stable. One of the things that we would like our shareholders to note is that we have progressively de-risked the Company even as we have grown in size and stature. In the last two years, we have repaid H48.90 crore in terms loans, strengthening our debt-equity ratio from 0.49 to 0.45. Over the next two years, we expect that our working capital cycle will decline, reducing our interest outflow. We intend to enhance our profitability through a stronger product mix on the one hand and prudent use of government incentives on the other.
Q: Why do you think the valuation of JVL Agro Industries Limited has been low for years?A: This is something that has been a cause of concern. Despite the management having grown the Company’s financials while de-risking them, the Company’s discounting has under-performed the broad edible oil sector. We wish to communicate to shareholders that the JVL Agro management will continue to widen its portfolio and premiumise the product mix with the conviction that the volume-value interplay will enhance revenues, margins and profits, enhancing value in the hands of our shareholders.
In the last two years, we have repaid H48.90 crore in terms loans, strengthening our debt-equity ratio from 0.49 to 0.45.
JVL Agro Industries Limited. Making a case for reconsidering the valuation of the Company.
Net worth as on March 31, 2015: H557 crore
Cash balances as on March 31, 2015: H413 crore
Cumulative net profits in the last five years: H291 crore
Revenue increase over the last five years: H2,200 crore
Debt-equity ratio (long and short-term): 0.45
Capital expenditure incurred over the last five years: H243 crore
Years of uninterrupted dividend payouts: 10
Capacity expansion over the last four years: 4,05,000 TPA to 9,45,000 TPA Subsidy earned
over the last four years: H143 crore
Net fixed assets of as on March 31, 2015: H411 crore
Years of management experience in the edible oils industry: 30
Years of uninterrupted profitability: 10
Manufacturing locations across the country: 5
Our rich fundamentals
14 | JVL Agro Industries Limited Annual Report, 2014-15 | 15
Saal ek. Shuruaat anek!
AT JVL AGRO, EVEN AS WE
GENERATED A SIZEABLE
H4,403.88 CRORE IN REVENUES
IN 2014-15, EVERY SINGLE
RUPEE WAS EARNED OUT OF
INDIA.
The JVL management believes that the time has
come to leverage our rich sectoral understanding and
extend beyond India. Africa appears to be an ideal
destination for its demographic similarities with India.
Right now, with a couple of country exceptions,
Africa’s population density is relatively low. The
continent’s overall population is expected to more
than quadruple over just 90 years, an astonishingly
rapid growth that will make Africa more important
than ever. And it is not just that there will four times
the workforce, four times the resource burden and
four times as many voters. The rapid growth itself will
likely transform political and social dynamics within
African countries and their relationship with the rest
of the world.
Subsequently, the Company embarked on
commissioning a vegetable oil refinery in Ethiopia
(Africa). As a means to this end, the Company
acquired a 12,500 acre plantation on lease during
the fiscal under review.
This plant (production capacity 500 TPD) will not
only increase the present capacity by 16.67% but
will also establish JVL’s identity as a first-mover
within India’s processed oils space to commission a
plant in Africa.
This proactive step will allow the Company to be at
the right time and the right place to capitalise on
emerging opportunities.
AT JVL, IT’S TIME FOR
16 | JVL Agro Industries Limited Annual Report, 2014-15 | 17
Saal ek. Shuruaat anek!
WIDENING OUR INDIAN
OVER THE LAST COUPLE OF
DECADES, JVL AGRO GREW OUT
OF ITS VARANASI LOCATION
AND SPREAD ITSELF ACROSS
DIFFERENT LOCATIONS IN
INDIA, COVERING 40% OF
THE NATIONAL LANDMASS
AND 60% OF THE COUNTRY’S
POPULATION.
During the year under review, JVL Agro made a
significant extension in its presence.
The Company decided to commission a refinery near
Pipavav (Gujarat) port, its second port-based plant
(after Haldia).
The decision will make it possible for the Company to
import raw oils for onwards processing at the port and
market finished products across western and northern
India for the first time in its history.
The plant, expected to go on stream over the next
three years, expects to generate H1,500 crore of
annual revenues, once operationalised.
18 | JVL Agro Industries Limited Annual Report, 2014-15 | 19
Saal ek. Shuruaat anek!
DIVERSIFY TO DRIVE
JVL AGRO BEGAN
AS A VANASPATI
MANUFACTURING
COMPANY THAT
PROGRESSIVELY
EVOLVED INTO
A ONE-STOP
EDIBLE OIL
ORGANISATION.
Thereafter, the Company evolved its personality to enter the processed foods and
ancillary infrastructure creation verticals.
In 2014-15, JVL Agro laid out plans to enter the niche cosmetics space with a
proposed manufacturing facility in Assam.
The business does not represent an unrelated diversification; it represents a
synergic extension for a number of pertinent reasons.
The major byproducts generated from the processing of edible oils are being
marketed by the Company to cosmetic majors for onward manufacture.
Going ahead, the Company intends to process these byproducts to churn out
reasonably priced cosmetics, democratising the market, capturing a large slice of
the value chain and de-risking its business.
The niche addressed by the Company represents a lucrative $ 30.03 billion
global opportunity by 2020; this strategic diversification will allow the Company
to make the most of it.
20 | JVL Agro Industries Limited Annual Report, 2014-15 | 21
Our business model
JVL has one of the largest edible oil capacities at a single port-based location in India (Haldia, 1,200 TPD). The Company has grown its capacity more than 100-fold since inception from 25 TPD in 1990-91 to 3,000 TPD as of March 31, 2015, one of the largest in its space. It now plans to add another 500 TPD over the next couple of years.
Economies-of-scaleThe edible oil business is largely volume-driven with thin margins. This makes it imperative to cut costs. JVL Agro invested in building capacities, which helped leverage economies-of-scale and amortise a large proportion of its fixed costs.
The Company manufactures 1.8 million HDPE jars per annum and 4.2 millions tins per annum (along with handles and caps for containers). The Company is self-sufficient as far as power requirements are concerned.
Integrated approachJVL has channelised a cumulative H243 crore over the past five years towards operational integration. In 2007, the JVL invested in a 3-megawatt captive power plant at Varanasi. The entire packaging process is also taken care of in-house.
Jhoola is a market leader in Bihar and UP. The proportion of revenues earned from branded product sales constituted 77.97% of the total sales garnered during the 2014-15 fiscal.
BrandThe JVL Agro brand stands for ‘safety’ and ‘health’. Over the years, it has invested in conforming to the strictest quality and hygiene, parameters across its entire portfolio.
The Company strengthened its market preference by offering a wide range of SKUs – from 200 millilitres to 5 kilograms to 15 kilograms.
Product basket A key determinant of success in the FMCG business is sales velocity. JVL widened its product basket with the objective to address a range of customers – from mass to premium. From two products in 2005-06, the Company has emerged as a multi-product player.
22 | JVL Agro Industries Limited Annual Report, 2014-15 | 23
The contribution of mass and semi-premium segment to the Company’s total revenue mix increased at a CAGR of 19.21% over the five years leading to 2014-15.
Value-for-money propositionThe target consumers of the Indian edible oil manufacturers are mostly price-conscious middle and lower middle-class consumers, who desire quality products at affordable prices. JVL Agro restructured its pricing strategy to address the needs of this growing segment.
JVL increased its network from 4,000 dealers in 2013-14 to 7,000 dealers in 2014-15. More than 50% of the dealers have been working with the Company for five years or more.
Deep-rooted distribution networkIn India’s competitive FMCG industry, product availability ensures success. JVL has, over the years, made prudent investments in creating a widespread distribution channel, covering more than 1 lac retail outlets across India.
The tangible results of
JVL’s business model
Our evolving personality
VanaspatiEdible oil processing
Processed food
Infrastructure (Mega Food
Park)
Cosmetics
Production volumes increased by 133.33% from 4,05,000 TPA in FY11 to 9,45,000 TPA in FY15
Premium oil output increased by 122.22% from 1,350 TPD in FY11 to 3,000 TPD in FY15
Total sales increased by 101.94% from H2,180.79 crore in FY11 to H4,403.88 crore in FY15
Dealer network increased from ~1,700 dealers in FY11 to ~7,000 dealers in FY15, an increase of 312%
The Company’s revenues increased from H2,180.79 crore in FY11 to H4,403.88 crore in FY15
The Company’s profit after tax increased from H50.02 crore in FY11 to H62.63 crore in FY15
The Company’s focus on enhancing internal efficiencies and achieving operational integration enabled it to generate incremental returns on capital employed from (1)% in 2010-11 to 11.93% in 2014-15
24 | JVL Agro Industries Limited Annual Report, 2014-15 | 25
JVL Agro Industries Ltd. Gokul Refoils & Solvent Ltd.# Ruchi Soya Industries Ltd.# Vimal Oil & Foods Ltd.#
FY15(J crore)
FY15(J crore)
FY15(J crore)
FY15(J crore)
Total sales 4403.88 5,869.48 28,309.08 3,034.67
EBIDTA 123.79 155.56 690.96 96.68
PAT 62.63 12.43 60.93 18.05
Net block 411.32 353.10 2,480.70 32.83
Debt-equity ratio 0.45 1.58 1.68 1.32
Market cap (As on 31.3.2015)
245.97 347.54 1,249.54 174.38
Profit-equity ratio 3.93 20.55 14.02 9.70
Global economic overviewThe global economy is on the path of
regaining its lost momentum as many
high-income countries continue to deal
with the repercussions of the global
financial crisis. Resultantly, global
growth has picked up, albeit marginally
in 2014, to 2.6% from 2.5% in 2013
(Source: IMF). Several major forces
are driving the global outlook including
softer commodity prices, persistently low
interest rates and a reasonable uptick
in consumption. Most importantly, the
sharp decline in oil prices since mid-
2014 is expected to support global
activities and help offset some of the
headwinds to growth in oil-importing
economies including that of India.
Reduced crude prices pose a serious
challenge for oil-exporting countries.
Conflicts in Syria, inflow of refugees into
Turkey, terrorist attacks in Iraq, the civil
war in Yemen and uncertainty over the
nature and timing of the US-Iran nuke
deal have hampered growth prospects.
Anticipating continued depression in oil
prices, the UAE and Saudi Arabia have
revised their forecasted GDP growths.
Kenya and Nigeria are reeling under
geopolitical tension and the expected
GDP growth has also been similarly
revised. Turkey has projected a GDP
growth of 3.1%. The devaluation of the
Nigerian naira, Turkish lira, Kenyan
shilling and Moroccan dirham against
the US dollar during the second half of
2014-15 posed a threat to growth in
these markets.
In the coming years, IMF projects world
growth to pick up modestly to 3.5%
by end-2015; it is estimated to grow
to 3.7% by 2016. According to IMF
reports, while advanced economies
are expected to grow stronger at an
increased rate of 2.4% in 2015,
emerging markets are predicted to show
a weaker growth of 4.3%, reflecting
uncertainty in some of the large
emerging market and oil economies.
High-income countries are likely to
witness growth of 2.2% till 2017, up
from 1.8% in 2014, on the back of
gradually recovering labour markets,
ebbing fiscal consolidation and lowering
financing costs.
Indian economic reviewWith a new and stable government at
the helm after a considerable while, the
economy has bounced back to its growth
track after a couple years. The Indian
economy grew at 7.3% in 2014-15
on the back of an improvement in the
performance of both the services as well
as the manufacturing sectors.
Lower oil prices and widespread
monetary easing has pegged India to
grow by 8% in 2015-16 according to
forecasts by the OECD, compared to
China, which is estimated to grow at 7%
during the same time. With labour costs
spiking in China, India is now expected
to emerge as the fastest growing major
economy in 2015-16. Further, the per
capita income at current prices during
2014-15 rose by 9.2% to H87,748
as against H80,388 in the previous
fiscal (it was H64,316 in 2011-12
and H71,593 in 2012-13). Gross fixed
capital formation increased from 3% in
2013-14 to 4.1% in 2014-15. Average
retail inflation moderated to 6.3% in
2014-15 as against 8.9% in 2013-14.
Food inflation declined from 9.5% in
2013-14 to 4.8% in 2014-15. India’s
current account could be a surplus in
2015, after 32 consecutive quarters in
deficit, and the deficit for the upcoming
fiscal could halve to 0.6% of the GDP
from 1.1% during the current fiscal.
The GVA (gross value-addition), a new
Management discussion and analysis
Better than the others
• The Company maintained its EBIDTA margin at 2.81% and net profit margin of 1.42%, among the highest in its industry. This was derived from strong volume growth, low processing cost and product value-addition.
• The Company generated subsidies of H143 crore in the last four years from greenfield and brownfield expansions.
• The Company enjoys the lowest debt-equity ratio at 0.45 in comparison with industry peers as well as a cash balance of H413 crore as on March 31, 2015.
• JVL Agro has consistently reported profits and dividends over the last 10 years.
# All figures taken from BSE website
26 | JVL Agro Industries Limited Annual Report, 2014-15 | 27
concept introduced by CSO to measure
the economic activity, rose by 7.2%
in 2014-15 compared to 6.6% in the
previous fiscal. The manufacturing sector
GVA rose by 7.1% during the year as
against 5.3% in 2013-14. Similarly, the
output of electricity, gas, water supply
and other utility services rose by 7.9%
as against 4.8% a year ago.
Indian edible oil industryIndia, with 21% of world’s area and
15% of world’s production, is the fourth
largest oilseed producing country in
the world, next to the US, China and
Brazil. Oilseeds in India account for the
second largest agricultural commodity
after cereals, accounting for 13% of the
country’s gross cropped area, nearly 5%
of the gross national product and 10% of
the overall value of agricultural products.
The industry comprises 15,000 oil
mills, 600 solvent extraction units,
600 vegetable oil refineries and 250
vanaspati manufacturing units spread
across the country. These are engaged
in crushing and processing of oilseeds,
oilcakes, rice, bran and vegetable oils.
The Indian edible oil industry is a highly
fragmented one and in terms of volumes,
palm oil, soya bean oil and mustard oil
are the three largest consumed edible
oils in India.
According to the SEA, the vegetable
oil availability from kharif oilseeds and
secondary sources is estimated at 54.60
lac tonnes compared to last year’s 57.95
lac tonnes i.e. down by 3.35 lac tonnes
for 2014-15. This indicates that local
prices have ceased to be a determinant
of domestic demand-supply dynamics
which has instead been dictated by cues
from global markets. A strong inflow of
cheap oil from overseas is keeping the
local scenario depressed. This equation
is unlikely to change in the near-term
and a setback in rabi oilseeds harvest
might not lead to a massive rise in the
prices. Domestic oilseeds production
is projected to drop by 9% in 2014-
15. Although global farm commodity
prices have eased significantly, any
plunge in pulses and oilseed planting
raises risks of imported inflation as the
country meets around half of its annual
requirement of cooking oils through
overseas purchases (Source: CACP).
The Indian edible oil industry, which has
grown at a CAGR of 13% from 2009-14
in terms of the revenue, is expected to
cross H2,080 billion by 2019 due to the
increasing number of edible oil brands
and rising consumption of edible oil in
the country.
Production: Despite having a normal
monsoon during the last financial year,
the total production of edible oils in India
is expected to be around 7.91 million
tonnes, around 2% lower than the
production achieved in 2013-14 (8.08
million tonnes), because of a sharp
decline in kharif (summer) oilseeds
output, especially of groundnut.
Production of nine oilseeds during
2014-15 is estimated at 2.98 crore
tonnes according to the second advance
estimates of the Government of India.
This shows a drop of around 9.7%
compared to 3.27 crore tonnes of
production during 2013-14, according
to final official estimates. These oilseeds
include groundnut, castor seed, sesame,
niger seed, rapeseed, linseed, safflower,
sunflower and soya bean.
Consumption: While the domestic
edible oil consumption has been
steadily growing over the past few years
to reach a per capita consumption of
approximately 16 kilograms per year
per person, it still remains far below
the estimated world average per capita
consumption of around 22 kilograms.
The demand drivers include consistent
GDP growth rate over a period of time,
demographic profile, urbanisation,
consumer tastes and preferences,
among others. However, the supply
growth has been lower primarily due
to a relative stagnation in the domestic
oilseed output, resulting in higher import
volumes.
Imports: In view of the demand-supply
gap, over 60% of the domestic edible
oil consumption is met by imports, with
palm and soya bean oil accounting for
over 85% of the imported volume. The
domestic soya crop production was
marginally lower – around 11 million
metric tonnes in India during the year
under review.
OutlookThe Indian edible oils market continues
to be underpenetrated and given the
positive macro and demographic
fundamentals, the prospects of medium-
to long-term growth seem bright. The
Indian per capita consumption for
edible oil is expected to grow from the
current consumption levels of ~16
kilograms to ~24 kilograms by 2020
with a conservative CAGR of around
6%. This growth is expected to translate
into an edible oil consumption market
of approximately 32 million tonnes by
2020.
Indian food processing industryIndia is the world’s second largest
producer of food next to China and the
Indian food processing industry is one
of the largest industries in India – it
is ranked fifth in terms of production,
consumption and exports. Accounting
for about 32% of the country’s total food
market, 14% of the manufacturing GDP,
13% of India’s exports and 6% of total
industrial investment, the Indian food
processing industry is poised for a huge
growth in years to come.
The Indian food processing industry is
divided into agro-products, milk and milk
products, and meat, poultry and marine
products. In agro-products, India is the
largest producer of several fruits, such
as banana, mango and papaya. It is also
the second largest producer of vegetables
such as brinjal, cabbage and onion,
and of rice, wheat, sugar and cotton.
In milk and milk products, India is the
largest producer, accounting for 20% of
global production. In terms of livestock,
the country has the largest livestock
population in the world.
The Indian food and grocery market
is the world’s sixth largest, with retail
accounting for 70% of the sales and is
projected to grow at the rate of 104%,
touching US$ 482 billion by 2020. This
industry contributes as much as 9-10%
of the agricultural and manufacturing
sector GDP.
The food processing industry in India
has the potential to contribute to the
country’s agricultural growth and
employment, alleviate rural poverty,
guarantee food and nutritional security
and contain food inflation. Currently,
India has 85,000 bakery units of which
75,000 operate in the unorganised
sector, garnering a 65% market share.
The per capita bakery consumption
stands at 1-2 kilograms per annum.
Growth drivers for the food processing industryGrowth of the Indian food processing
industry has been catalysed by changing
demographics, increasing population,
growing affordability and urbanisation,
resulting in a growing demand for value-
added food processing products. The
industry opportunities are marked by the
following:
Growing population: India, with 1.31
billion people, is the second most
populous country in the world after
China (1.38 billion), but by 2022,
India’s population will exceed even with
that of China. According to forecasts,
India will have 1.5 billion people by
Production
India: Total oilseeds production, supply and distribution
Oilseeds (‘000 metric tonnes) MY 2013/14 MY 2014/15 MY 2015/16
Revised Estimate Forecast
Beginning stocks 2,218 1,750 1,666
Production 37,780 35,845 40,175
MY imports 21 1 0
Total supply 40,019 37,596 41,839
MY exports 764 677 805
Crush 29,925 27,490 31,560
Food use domestic consumption 1,900 2,080 2,250
Feed waste domestic consumption 5,680 5,685 5,700
Total domestic consumption 37,505 35,255 39,510
Ending stocks 1,750 1,664 1,524
Total distribution 40,019 37,596 41,839
FY11 FY12 FY13 FY14
9.3
17.3
21.7 22
Exports of processed food and related items (In Billion $)
Exports CAGR 33.2%
(Source: http://www.asa.in/pdfs/surveys-reports/Food-Processing-Sector-in-India.pdf)
28 | JVL Agro Industries Limited Annual Report, 2014-15 | 29
2030 and 1.7 billion by 2050. (Source:
http://money.cnn.com/2015/07/30/
news/economy/india-china-population/)
Rising Indian rural economy: Extreme
rural poverty has declined from 94% in
1985 to 61% in 2005 and is projected
to drop to 26% by 2025.
Rising middle class population: The
middle class, defined as households
with disposable incomes from H200,000
to 1,000,000 a year, comprises about
50 million people, roughly 5% of the
population at present. By 2025, the size
of middle class is expected to increase to
about 583 million people, or 41% of the
current population.
Rising affluent class: The affluent
class, defined as those earning above
H1,000,000 a year, will increase from
0.2% of the population at present to
2% of the population by 2025. The
affluent class’s share of national private
consumption is expected to increase
from 7% at present to 20% in 2025.
Growing per capita income: India’s per
capita net national income during 2014-
15 was pegged at around H88,538
($1,434), showing a rise of 10.1% from
H80,388 ($1,302) during 2013-14.
OutlookThe support that the Government of
India is lavishing on the growth of
the processed foods sector has led
to a positive outlook. The Central
Government’s Vision 2015 initiative has
allocated USD 20 billion towards the
sector, while relaxing the regulations
governing licensing and excise. Other
strategic initiatives by the Central
Government include the approval of
51% ownership of foreign retailers in
joint ventures and the establishment
of mega food parks and cold chain
facilities, including refrigerated vans. All
Favourable government policies The Government of India allows 100% FDI under the automatic route in the food processing sector, in agro-products, milk and milk products, and marine and meat products. Automatic approvals are provided for foreign investment and technology transfer in most cases. Units based on agro-products that are 100% export-oriented are allowed to sell up to 50% in the domestic market. There is no import duty on capital goods and raw material for 100% export-oriented units. Earnings from export activities are exempt from corporate tax. Additionally, there is 100% tax exemption for five years, followed by 25% tax exemption for the next
five years for new agro-processing industries.There is an increasing awareness about the need to bolster India’s food processing sector, given the country’s immense potential with regard to agricultural production. Some of the policies and promotions for the food processing sector are:
• Vision 2015 Action Plan: The Ministry of Food Processing Industries (MoFPI) has formulated a Vision 2015 Action Plan that includes trebling the size of the food processing industry, raising the level of processing of perishables from 6% to 20%, increasing value addition from 20% to 35%, and enhancing India’s share in global food trade from 1.5% to 3%.
• Mega food parks: According to the website of MoFPI, the Government of India is actively promoting the concept of mega food parks and is expected to set up 30 such parks across the country to attract FDI. The government has released a total assistance of USD 23 million to implement the Food Parks Scheme. It has, until now, approved 50 food parks for assistance across the country. The Centre has also planned a subsidy of USD 22 billion for mega food processing parks.
• Agro-export zones: The government has established 60 fully equipped agro-export zones (AEZs), in addition to food parks, to provide a boost to agricultural and food processing exports.
these positive measures are expected to
catapult the food processing sector onto
a higher growth trajectory that would
almost double the country’s presence
in the global food trade to 3%. These
initiatives will also enable the industry
to bring in stability in food prices,
reasonable returns for farmers and other
stakeholders, and create a projected 9
million jobs.
Company overviewJVL Agro Industries Limited (formally
known as Jhunjhunwala Vanaspati
Limited) was incorporated in 1989. The
Company manufactures hydrogenated
vegetable oil (vanaspati), refined oils
and rice from its manufacturing facilities
in Naupur (UP), Pahleza (Bihar), Alwar
(Rajasthan), Haldia (West Bengal) and
Sasaram (Bihar).
The Company commenced with a
production capacity of 25 metric tonnes
per day; today, the Company is the
single largest manufacturer of edible oil
in India (3000 metric tonnes per day).
The Company’s name was changed from
Jhunjhunwala Vanaspati Limited to JVL
Agro Industries Limited on October 21,
2008 due to diversification of Company
operations from a hydrogenated
vegetable oil manufacturer to multi-
product dealer.
Financial overviewIn 2014-15, the Company reported
an increase of 1.23% in revenues
from H4350.47 crore in 2013-14
to H4403.88 crore in 2014-15. The
revenue for all four quarters surpassed
the corresponding period of the previous
financial year. The Company’s profit after
tax grew from H61.26 crore in 2013-14
to H62.63 crore 2014-15, an increase
of 2.24%. EBIDTA decreased by 0.15%
to H123.79 crore in 2014-15 from
H123.97 crore in 2013-14. Cash profit
decreased from H80.01 crore in 2013-
14 to H78.87 crore in 2014-15.
Raw material consumption: Raw
material consumed for 2014-15
decreased by 2.48% to H3,264.13 crore
from H3,347.19 crore in 2013-14.
Operating costs: The Company’s
operating expenses increased marginally
in 2014-15 by 1% from H4,304.53
crore in 2013-14 to H4,343.12 crore in
2014-15. The proportion of operating
expenses to the total revenue stood
at 99% in 2014-15, which is almost
identical to last year.
Equity: The Company’s share capital
comprised 16,79,40,000 equity shares
with a face value of Re. 1 each. There
was no change in the equity share
capital during the last financial year.
Reserves and surplus: Reserves and
surplus increased 13% from H449.36
crore as on March 31, 2014 to H508.07
crore as on March 31, 2015 following
an increase in profit plough back. The
security premium account remained
unchanged at H112.05 crore during the
year under review.
External funds and costs: Debt forms an
integral part of the day-to-day running
of the business. The quantum and the
cost associated with the same plays
an important role in the prospect of
the business. Profits of the Company
are being impacted by the short-term
borrowings of the Company while the
long-term debts dictate the ability with
which the Company is able to mobilise
funds for its projects. Reliance of the
debt has increased this year by nearly
14% from H208.17 as on March
31, 2014 to H237.48 as on March
31, 2015, largely owing to various
expansion and diversification strategies
undertaken by the Company during the
year under review.
Long-term borrowings of the Company
constituted 28% of the total external
borrowings of the Company in 2014-15
compared to 36% in 2013-14 whereas
short-term borrowings constituted 72%
in 2014-15 compared to 64% in 2013-
14. The long-term borrowings of the
Company decreased 10% from H74.41
crore in 2013-14 to H66.66 crore in
2014-15 whereas short-term borrowings
Financial performance review, 2014-15
Particulars 2014-15 (J crore)
2013-14(J crore)
% growth
Total revenue 4403.88 4350.47 1.23
PBT 65.48 70.02 (6.48)
PAT 62.63 61.26 2.24
Cash profit 78.87 80.01 (1.42)
EPS (H) 3.73 3.65 2.19
30 | JVL Agro Industries Limited Annual Report, 2014-15 | 31
of the Company increased 28% from
H133.76 crore as on March 31, 2014 to
H170.82 crore as on March 31, 2015.
Interest costs: The finance cost for the
Company in 2014-15 increased by
nearly 20% from H35.20 in 2013-14
to H42.07 crore in 2014-15, largely
owing to the increase in the short-term
borrowings of the Company in 2013-14.
The interest coverage for 2014-15 stood
at 2.6x compared to 3.0x in 2013-14.
Net block: The net block (tangible
assets) of the Company increased by
n