The Members of Unique Organics Limited
Your directors are pleased to present the Twenty Fifth Annual Report of the companytogether with the Audited Financial Statement for the year ended on31 stMarch.2017 asfollows:
FINANCIAL SUMMARY: (Rs. In Lakhs)
|Particulars ||As at ||As at |
| ||31.03.201 7 ||31.03.2016 |
|Revenue from operations ||3176.55 ||12441.34 |
|Other Income ||41.75 ||76.42 |
|Total Operational Cost ||3278.04 ||12216.37 |
|Finance Cost ||60.54 ||150.58 |
|Depreciation ||15.49 ||14.10 |
|Tax Provision ||0.14 ||42.56 |
|Net Profit (Loss) ||-135.91 ||94.15 |
|Paid-up share capital ||595.30 ||595.30 |
|Net surplus in Profit & Loss ||370.15 ||506.06 |
|Total Reserves & Surplus ||532.94 ||668.85 |
STATEMENT OF COMPANY'S AFFAIRS / COMPANY'S WORKING:
Your company is presently engaged in trading activities of agri commodities.
In the field of animal feed and food ingredients both international and domesticmarket witnessed an unexpected downward trend resulting in sharp decline of our exports aswell as domestic sales.
In International front the prices of raw material for animal feed of Indian originwere still non- competitive and hence the demand of Indian origin products continued to beless.
In domestic front Poultry and Cattle feed industry was deeply affected by sudden pricefluctuation of raw materials as well as cheaper imported raw material. It was an unusualsituation for Poultry and Cattle feed industry since more industries were reportingoperational loss thus destroying their financial structure and liquidity.
It is a disturbing feature that one of our major buyer Amrit Group of Companiesdefaulted by the tune of Rs.9.8 cr. and your company is taking all possible measures inthis regard.
Your company reported a total revenue of Rs.3218.31 Lakhs And net Loss of Rs. 135.91Lakhs during the period under review.
Your company is continuously working to add new products and market - both for domesticand international- in the supply portfolio of the company.
The manufacturing facility of your company is now fully operational and the facility isbeing utilized for
Cattle feed manufacturing in mesh form under its own Brand ROHINI' as wellas on job work basis.
Pulverizing and mixing of herbs services on job work basis specially for TheHimalaya Drugs Company.
Despite all teething difficulties being faced the company is moving ahead witha positive outlook and is hopeful of improved conditions in the current financial year.
No dividend is recommended for the financial year2016-17.
No amount transferred to the general reserve during the year 2016-17.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
During the year under review no loans or guarantees given or investment made coveredunder Section 186 of the Companies Act 2013. For details about past transactions pleaserefer the note No. 15 to the financial statement provided in this Annual Report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WTTH RELATED PARTIES:
Particulars of contracts or arrangements with related parties referred to in Section188 of the Companies Act 2013 in the prescribed form AOC-2 is appended as Annexure 1 tothe Board's Report.
The company has not invited/accepted any public deposit whether covered under Chapter Vof the Companies Act 2D13 or not and as such no amount of principal or interestremained unpaid or unclaimed as at the Balance Sheet date.
QUALIFICATIONS RESERVATION OR ADVERSE REMARK IN AUDITRE PORTS:
There is no adverse remark or qualification or any disclaimer remark against theCompany by
(a) the statutory auditor in its audit report; and
(b) the company secretary in practice in its secretarial audit report.
CHANGE IN THE NATURE OF BUSINE SS:
The main activity of the company is the export of agri commodities spices feed mealsetc. but to strengthen the domestic market and as a part of diversification of businesscompany started manufacturing cattle feed job work of pullverzing of herbs rootsmedicinal plants spices & other grinding work from this year and exploring for newproducts and markets as well.
EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:
There are no such changes/ commitments/events or material changes occurred affectingthe financial position of the Company between the end of the financial year (i.e.31.03.2017) and the date of this report.
SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS:
The Company has not received any significant/ material orders from the statutoryregulatory bodies/ courts/ tribunals impacting the going concern status and company'soperations in future.
DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES:
There was no subsidiary joint venture or associate company of Unique Organics Limitedduring the year under review.
DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS:
Your Company is both ethically and professionally managed. It has developed an internalstructure with proper hierarchy delegation of authority and ethical values so that assetsare safeguarded and the transactions are properly authorized and recorded. With referenceto the financial statements the Company has a continuous monitoring mechanism throughAudit Committee Internal Audit and multistage checking of vouchers and documents whichenables the organization to maintain with the same standard of the financial controlsystems and helps them in managing any default on timely basis because of strong reportingmechanism followed by the company. The Internal Audit System of the company helps to bringout a systematic and disciplined approach to evaluate and improve the effectiveness ofinternal financial control.
LISTING OF SHARES:
The company's equity shares continue to be listed with Bombay Stock Exchange (BSE)which has nationwide trading terminals.
Your company has proactively been following the best practices adopted by goodcorporates in India. The report on Corporate Governance required under the SEBI (ListingObligations and Disclosure Requirements) Regulations2015 forms a part of this report.The Auditor's certificate on the compliance of Corporate Governance is attached asAnnexure 2 and forms a part of this report.
AJI board members and senior management have affirmed compliance with Code of Conductunder SEBI (LODR) Regulations 2015 Companies Act 2013 and Code of Conduct on SEBI (PIT)Regulations.2015 on annual basis.
The Board of Directors met 9 (nine) times during the financial year 2016-17 on25.05.2016 13.07.2016 01.08.2016 31.03.2016 05.09.2016 11.11.2016 03.01.201709.02.2017 and 28.03.2017. The intervening gap between any two meetings was within theperiod prescribed by the Companies Act 2013 read with rules thereunder and ListingAgreement/ SEBI (LODR) Regulations.2015.
COMMITTEESOF DIRE CTORS:
The Board has six committees: Audit Committee Nomination & Remuneration CommitteeCorporate Social Responsibility Committee Stakeholders Relationship Committee InternalComplaint Committee and Share Transfer Committee. AJI committees are formed as perprevailing laws and have proper combinations of independent and non-independent directorsin composition.
A detailed note on the Board and its committees is provided under the CorporateGovernance Report section in this Annual Report.
PARTICULARS OF E MPLOYEES:
Particulars of employees in accordance with the provisions of Section 197(12) of theCompanies Act 2013 read with Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is appended in Annexure 3 to the Board's Report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMAN AT WORKPLACE (PREVENTION PROHIBITIONAND RE DRESSAL) ACT 2013.
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Wbman at the workplace (Prevention Prohibition &Redressal) Act 2013. Internal Complaint Committee (ICC) has been setup to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy.
No complaint pertaining to sexual harassment at workplace was received during the yearunder review.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION:
Company has constituted Nomination and Remuneration Committee (Details of which is partof Corporate Governance Report in this Annual Report) and adopted Nomination andRemuneration Policy formulated in compliance with Section 178 of the Companies Act 2013read with rules there under and of the SEBI (LODR) Regulations2015. The said policyincludes criteria for determining qualifications positive attributes independence ofdirectors and other matters provided. The said policy is appended as Annexure 4 to thisReport and also available on Company's website on below web-link:http:/Avww.uniqueorganics.conVcg.php
a) Changes in Directors and Key Managerial Personnel
During the year Mr. Dilip Kumar Joshi independent director (DIN: 01130637)resigned from the office due to personal reasons and short of time w. e.f. 23rd Dec. 2016.
b) Declaration by an Independent Directors)
Company received declarations from its independent directors Shri Dilip KumarJoshi Shri Sanjay Sharma and Shri Himanshu Chodhary under sub section (7) of section 149of the Companies Act 2013 confirming that they meet the criteria as laid down in Section149(6) of the Companies Act 2013 read with rules there under and SEBI (LODR)Regulations.2015.
c) Performance Evaluation of Board and re-appointment
The company has developed and implemented a policy for formal annual evaluation. TheCommittee/Board evaluated the performance of Board its Committees and its individualdirectors including Chairman/Managing Director and Independent Directors of the Companywith reference to the authority under the Policies of the Company framed in accordancewith the relevant provisions of Companies Act 2013 read with rules there under ListingAgreement and based on their functions and the criteria for the evaluation of theperformance as prescribed in the policy. Evaluation of Independent Directors were carriedon by the entire Board in the same way as it is done for the Executive Directors/Non-Independent Directors of the Company except the Director getting evaluated keeping in viewthe inputs provided by Nomination & Remuneration Committee. The Policy on AnnualPerformance Evaluation of the Board its Committee's and individual directors is appendedas Annexure5 to this report and also available on Company's website at below web-link:
Mrs. Madhu Kondia (DIN: 00207604) Director of the Company retires at the ensuingAnnual General Meeting and being eligible offers herself for re-appointment in terms ofprovisions of Articles of Association of the Company. The Board recommends herre-appointment.
d) Familiarization Program for Directors:
The newly independent directors inducted in to the Board generally attends anorientation programme at his convenient time. The details are provided in CorporateGovernance Report.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to provisions of clause (c) of sub-section (3) of section 134 of the CompaniesAct 2013 your directors hereby state that:
a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit of the company for the year ended on that date;
c) the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
d) the directors have prepared the annual accounts on a going concern basis;
e) the directors laid down internal financial controls to be followed by the companyand that such internal financial controls are adequate and are operating effectively; andf) the directors have devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems are adequate and operating effectively.
M/sAK Meharia ^.Associates Chartered Accountants Kolkata were appointed as StatutoryAuditors of your Company at the Annual General Meeting held on 18th August 2015 for aterm of five consecutive years (F.Y 2015-16 to F.Y 2019-20). As per the provisions ofSection 139 of the Companies Act 2013 the appointment of Auditors is required to beratified by Members at every Annual General Meeting.
SECRETARIAL AUDITOR AND REPORT:
M/s Ruchi Jain & Associates Company Secretaries B-37 Ahinsha Marg Jai JawanColony-l Tonk Road Jaipur (Raj.)were appointed as Secretarial Auditor to conduct thesecretarial audit of the company for the financial year2016-17. as required under Section204 of the Companies Act 2013 and Rules there under. The secretarial audit report forthefinancial year2016-17 forms part of the Report as an Annexure 6.
In compliance of the provisions of Section 177 of the Companies Act 2013 read withRules there under and Regulation 18 of the SEBI (LODR) Regulations 2015 company has anaudit committee comprising Shri J.P. Kanodia managing director as Chairman of theCommittee Shri Sanjay Sharma independent director & Shri. Himanshu Chodharyindependent director as members. The Committee functions with the powers andresponsibilities as specified in the CompaniesAct2013 read with rules there underRegulation 18 of the SEBI (LODR) Regulations 2015 and other applicable law if any.
VIGIL MECHANISM/WHISTLE BLOWERPOLICY:
In compliance of the provisions of Section 177 of the Companies Act 2013 andRegulation 22 of the SEBI (LODR) Regulations 2015 Company has established a VigilMechanism (Whistle Blower policy) and formulated a Policy in order to provide a frameworkto the directors and employees of the company a responsible and secure whistle blowing/vigil mechanism to report genuine concerns to the Chairman of the Audit Committee. Andthat Company hereby affirms that no personnel have been denied access to the auditcommittee. More details about the policy and procedure are stated in Corporate GovernanceReport forming part of this Annual Report.
RISK MANAGE MENT POLICY/PLAN:
The Company has developed and established a risk management policy/ Plan for theCompany which sets out a framework for identification of elements of Risk if any which inthe opinion of the Board may threaten the existence of the Company and has devised aproper system of risk management and internal compliance and control through its BoardAudit Committee KM P's and other Senior personnel of the Company.
There was no change in the Share Capital during the year under review as under:
a) Issue of equity shares with differential rights
The company didn't issue any equity shares with differential rights or other securitiesduring the year under review.
b) Issue of sweat equity shares
The company didn't issue any Sweat equity shares during the year under review.
c) Issue of employee stock options
The company didn't issue any ESOP during the year under review.
d) Provision of money by company for purchase of its own shares by employees or bytrustees for the benefit of employees
Company didn't make any Scheme or Provision of money for purchase of its own shares byemployees or by trustees for the benefit of employees during the year under review.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
Company has constituted the Corporate Social Responsibility (CSR) Committee ofDirectors in accordance with the provisions of Section 135 of the Companies Act 2013 readwith the Companies (Corporate Social Responsibility) Rules 2014. The brief outline of theCSR Policy including overview of the programs/ activities undertaken/ to be undertakenthe composition of the CSR Committee average net profit of the Company for the past threefinancial years are given in the policy. Company didn't spend on CSR duringthefinancialyear2016-17 owingto losses maintained and non-availablity of liquidity asalso explainedin Annexure 7 to this Report. Details about the CSR Policy and initiative taken by theCompany during the previous years are available on Company's website on investor pageunderCSR menu. http://www.uniqueorganics.conVcsr.php
EXTRACTS OF ANN UAL RETURN:
In accordance with Section 134(3)(a) of the Companies Act 2013 an extract of theannual return in prescribed format (MGT- 9) is appended as Annexure S to the Board'sReport.
PARTICULARS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNING AND OUTGO:
Having focused on trading for the year under review energy cost constituted a smallproportion of the total cost and there is not much scope for energy conservation. Howeverpursuant to section 134 of the Companies Act 2013 read with the Companies (Accounts)Rules2014the requisite particulars are furnished atAnnexure9givenheretoformingpart ofthis Report.
Foreign exchange earnings and outgo are furnished asunder:
FOREIGN EXCHANGE EARNINGS & OUTGO:
(Rs. in Lakhs)
|Particulars ||2016-17 ||2015-16 |
|Foreign Exchange Earrings Export Sales ||2590.56 ||4427.76 |
|Foreign Exchange Outgo: Brokerage claims & deductions Expenses ||53.20 ||33.61 |
|CIF Value of In ports ||43.23 ||395.94 |
In order to keep pace with the changing technology and to provide the benefits ofelectronic trading to our members your company's shares are tradable compulsorily inelectronic form and it established connectivity with depositories viz. NationalSecurities Depositories Limited (NSDL) and Central Depository Services (India) Limited(CDSL). The company also has common agency for transfer of shares both in demat and inphysical form.
MANAGE MENT DISCUSSION & ANALYSIS:
Your directors are glad to present below the management discussion and analysis fortheyear2016-17:
Industry structure and developments:
The de-oiled meals export during the start of the year 2016-17 showed sudden fallhowever it started improving marginally during the end of the year. The decrease inexport was concentrated not only to de-oiled meals but also spices grains and otherproducts.
Domestic sector could also not remain unaffected from this. However the growthprospects are still high as Rapeseed meal Soyabean meal Maize etc are indigenous rawmaterial for the cattle feed industry.
Despite various macro-economic challenges your company is expecting an increased growthrate during the year 2017-18 from collective efforts in exports and domestic sector.
Management is of the opinion that the efforts must be made to utilize the strengths ofthe company. Since your company has its own manufacturing set up which is fullyoperational also more efforts are being made on the more organised marketing of theproducts and the services provided by your company. Your company is backed by followingmajor strengths:
Continuous Marketing efforts
Well established running manufacturing facility
Goodwill in the market
Team of professionals lead by active management
As agriculture market is affected by unforeseen circumstances your company might beaffected by following factors:
Weather conditions & uncertain Monsoon conditions.
Government Policies/Fiscal policies.
Local market (demand & supply).
International market (being cheaper in other countries may help themto be moreprice competitive).
Changing purchasing patterns across the Globe.
Your company's performance has to be viewed in context of the aforesaid economicandmarket environment.
a) Feed Products:
Cattle feed ingredients constitute the major portion in your company's productportfolio.
Though international prices are providing stiff competition to Indian origin products your company is expecting the situation will improve with GST implication.
Hence your company is of the view to keep the balanced marketing strategies strongenough and minimize the risk-taking practices as the market is not supportive.
Your company succeeded in generating business from various exhibitions and added newproducts in its kit.
Wth manufacturing facilities now being utilized the company is making efforts fordomestic expansion. Overall the sector is showing positive outlook with lesser overheadexpenses.
The outlook for the coming year2017-1S is good. The company has already startedpromoting its Cattle Feed Brand' ROHINI' and exploring more opportunities for its herbalprocessing plant.
In export segment also new products and markets are gradual progress what steadilybeing added which is a good sign for future growth.
Risk and concerns:
Your company had a Risk Management Policy .which helps in identifying the existing andfuture risks assessment of the risks viz-a-viz potential control measures.
The commodity based businesses are likely to be affected by weather demand currencyrates duties and taxes levied at a point of time etc. The business will directly dependupon the growth of the cattle feed Industry.
Macro-economic factors including political and economic developments legislativechanges natural calamities .competitiveness etc. which affect the agriculture sectorwould generally affect your company's business also.
Internal Control System:
Your company is driven by ethics and believes in the concept of professionalism. Formanaging the complexities of growing business your company has made internal systemswhich help out in completing the tasks in a professional manner. AJI employees of thecompany have pre-defined roles to perform which are monitored from time to time and thishelpsto make sure that systematic and disciplined way of working is followed. An InternalAudit Control has been developed which helps to evaluate and improve the effectiveness ofrisk management and governance. This helps in getting an edge in this competitive marketand eliminating the avoidable costs.
Financial and Operational Performance:
Total revenue from operations showed a decline from Rs. 12517.76 lakhs to Rs. 3218.31lakhs decline by 74.47% in turnover and profit after tax (PAT) from Rs. 94.15 lakhs toRs. (135.91) lakhs decline in profitability due to various micro and macro-economicfactors.
With a belief that employees are the assets of the company your company is committedfor proper utilization of its human resources with an aim to achieve professionalexcellence and sustainable mutual growth. As on 31st March 2017 Company has15 Employeeson its roll.
Some of the statements made in "Management Discussion & Analysis"describing projections estimates .company's objectives and planning may be somewhatforward looking within the meaning of applicable laws and regulations. The Actual resultsmight differ substantially or materially depending upon prevailing trends internationalbusiness scenario government policies demand and availability of products and governmentsupport by means of direct or indirect assistance for export of products from time totime.
Your directors express their sincere thanks to Central and State Governmentdepartments Banks foreign buyers and customers for their cooperation and encouragementthey always extended to the company and look forward for their continued support. For thecontinuous support and meticulous efforts of Dealers Business Associates and employeesfor maintaining confidence in operational performance your directors wish to place onrecord their sincere thanks and appreciation.
| ||For & on behalf of the Board of Directors |
|Place: Jaipur || |
|Date: 19.08.2017 ||J.P. Kanodia |
| ||Chairman & Managing Director |
| ||DIN: 00207554 |