To the Members
The Board of Directors have pleasure in presenting before you the Twelfth Annual Reportof the Company together with the Audited Statements of Accounts for the year ended 31stMarch 2020.
(Rs in actual)
|PARTICULARS ||2019-20 ||2018-19 |
|Sales of Services - Software ||17886000 ||84078250 |
|Sales of Goods Aquaculture ||289057387 ||114952500 |
|Gross Income ||306943387 ||199030750 |
|Depreciation & amortization expenses ||11650424 ||41159312 |
|Finance Cost ||3727394 ||5566315 |
|Gross Profit ||167589299 ||17243031 |
|Net Profit Before Tax ||167589299 ||17243031 |
|Provision for Tax ||43528443 ||3156606 |
|Net Profit After Tax ||124060856 ||14086425 |
|Balance of Profit brought forward ||124060856 ||14086425 |
|Balance available for appropriation ||124060856 ||14086425 |
|Proposed Dividend on Equity Shares ||0 ||0 |
|Tax on proposed Dividend ||0 ||0 |
|Transfer to General Reserve ||0 ||0 |
|Surplus carried to Balance Sheet ||124060856 ||14086425 |
Gross revenues increased to Rs. 306943387 as against Rs. 199030750 in theprevious year. Profit before taxation was Rs. 167589299 against Rs. 17243031 in theprevious year. After providing for taxation the net profit of the Company for the yearunder review was placed at Rs. 124060856 as against Rs. 14086425 in the previousyear.
Our Company was initially a hardcore software development and information technologyoutsourcing company as a maturing organization we have carefully considered a multitudeof business streams with potential growth opportunities in the near future and long term.A self-analysis and an educated assessment of the risks involved with the softwarebusiness have resulted in our interest and investment in the food industry like Aquaculture business trading in the third quarter of 2018.
This is being the second year of operation in Hatchery trading your Company willconsistently focus on providing good quality with full traceability Prawn seeds to theCustomers by using Modern technologies and innovative ideas in Prawn Hatchery operations.The Company proposed to take out an existing modern hatchery to operate on lease basisunder Asset Light Model in the current financial year 2020-21. In order to augmentproduction with minimal capital cost Hatchery segment is expected to generate Rs.30Crores additional revenue resulting in additional net profit of Rs.6 Crore. The existingcustomer base in trading will be retained and continued after the acquisition of existingHatchery Unit.
The Company has curtailed IT segments on account of the prevailing global economiccrisis IT services will be used for R&D and in-house development of software for AquaCulture activity. Other revenue flow of the company will be from outsourcing of in-housetalents and renting out of work stations that were used for software developmentactivities.
In order to conserve the resources of the Company and to expand and intensify thebusiness operations your Directors do not recommend any dividend for the year endingMarch 31 2020
The Company's paid up Equity Share Capital as on March 31st 2020 is Rs.102632000. The Company has neither issued any shares with differential rights as toDividend Voting or otherwise nor issued shares (including sweat equity shares) to theEmployees or Directors of the company under any Scheme. As on March 31 2020 none of theDirectors of the Company hold shares of convertible instruments of the Company.
No disclosure is required under Section 67(3)(c) of the Act in respect of votingrights not exercised directly by the employees of the Company as the provisions of thesaid Section are not applicable.
Cash and cash equivalents as at 31st March 2020 was Rs. 1096437/-. TheCompany continues to focus on judicious management of its working capital receivablesinventories and other working capital parameters were kept under strict check throughcontinuous monitoring.
The Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014 and anyamendments thereto.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Company has not given any loans or guarantees covered under the provisions ofSection 186 of the Companies Act 2013. The Company has not made any investment for theyear under review.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Board is accountable for evaluating and approving the effectiveness of internalcontrols including financial operational and compliance controls. The Company has aproper and adequate internal control system to ensure that all its assets are safeguardedand protected against any loss and that all the transactions are properly authorized andrecorded.
The internal control system is subject to continuous improvement with systemeffectiveness assessed regularly. Information provided to management is reliable andtimely. The Company ensures the reliability of financial reporting and compliance withlaws and regulations.
The Company is strengthening the controls by leveraging technology and centralizingprocesses enhancing monitoring and maintaining effective tax and treasury strategies.
The Audit Committee continues to monitor the effectiveness of internal control over theuse of new technologies that impact the financial controls and reporting enterprise risk.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Company has formulated CSR Policy based on the recommendation of the Committee anddisclosed contents of such policy in its report and the same is displayed on the Company'swebsite per annexure attached to the Companies (Corporate Social Responsibility Policy)Rules 2014. Amount to be spent for CSR Activities are applicable only in subsequent yearsand other details of the Committee are given by way of Annexure-E attached to this Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
Information required under section 134(3) (m) of the Companies Act 2013 read with Rule8 of the Companies (Accounts) Rules 2014 is given in Annexure-B to this Annual Report.
DIRECTORS AND KEY MANANGERIAL PERSONNEL
The Board of your Company is duly constituted in accordance with the requirements ofthe Companies Act 2013 and SEBI Regulations. There are totally three Directors on boardMr. Jesudas Premkumar Managing Director Mr. Allwin Roeger Independent Director and Mrs.Ruth Hilda Independent Director. All three Directors were reappointed for a period ofFive years for second term with effect from AGM held on last year on 13thSeptember 2019 and are not liable to retire by rotation.
There was no change in the composition of the Board of Directors and the Key ManagerialPersonnel of the Company for the year under review.
INDEPENDENT DIRECTORS (IDS)
Board has two Independent directors Mr. Allwin Roeger and Mrs. Ruth Hilda. All IDshold office for a fixed term of five years and are not liable to retire by rotation.
The terms of IDs cover inter-alia duties rights of access to information disclosureof their interest / concern dealing in Company's shares remuneration and expensesinsurance and indemnity. The IDs are provided with copies of the Company's policies andcharters of various Committees of the Board.
In accordance with Section 149(7) of the Companies Act 2013 all IDs have declaredthat they meet the criteria of independence as provided under Section 149(6) of theCompanies Act 2013 and Regulation 25 of the Listing Regulations and the Board confirmsthat they are independent of the management.
DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS:
The Company has received necessary declaration from each Independent Director of theCompany under Section 149(7) of the Companies Act 2013 that the Independent Directors ofthe Company meet with the criteria of their Independence laid down in Section 149(6) ofthe Companies Act 2013 and Regulation 25 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
A separate meeting of the Independent Directors was held on March 18 2020 to reviewthe performances of;
(a) Non-independent Directors and Executive Directors;
(b) To assess the quality quantity and timeliness of flow of Information
FAMILIARISATION PROGRAMME FORINDEPENDENT DIRECTORS
The details of the familiarisation programme for the Independent Directors is reportedin the Report on Corporate Governance which is attached to the Board's Report.
KEY MANAGERIAL PERSONNEL (KMP)
Mr. Jesudas Premkumar Managing Director Mr. Ezhumalai Muniyan Chief FinancialOfficer and Ms. Dharani Company Secretary are the KMPs of the Company in terms of Section2(51) and Section 203 of the Act 2013 as on date of this Report.
EVALUATION OF THE INDEPENDENT DIRECTORS AND COMMITTEES OF DIRECTORS
In terms of Section 134 of the Act 2013 and the Corporate Governance requirements asprescribed under Listing Regulations the Board reviewed and evaluated IndependentDirectors and various Committees viz. Audit Committee Nomination and RemunerationCommittee Corporate Social Responsibility Committee and Stakeholders' RelationshipCommittee based on the evaluation criteria laid down by the NRC.
Board has carried out the evaluation of all Directors (excluding the Director beingevaluated) and its Committees through a set of questionnaires.
The Company is compliant with the following policies/charters:
- Audit Committee Charter
- Nomination and Remuneration Policy
- Corporate Social Responsibility Committee
- Vigil Mechanism/Whistle Blower Policy
- Policy for determination of Materiality of any Event/Information
- Policy on Independent Directors
- Related Party Transaction Policy
- Code of conduct for prevention of insider trading and code of practices andprocedures for fair disclosure of unpublished price sensitive information
- Policy for preservation of documents and Archival Policy
All the policies are available in the website of the Companyhttp://www.acewinagriteck.com/investor.php
The Board of Directors met 13 times during the financial year 2019-20. The dates of theBoard meetings are as follows:
26th April 2019 10th May 2019 15th May 2019 21stMay 2019 06th June 2019 21st June 2019 27th June2019 06th August 2019 20th August 2019 03rd September2019 11th November 2019 03rd February 2020 and 18thMarch 2020.
DIRECTOR'S RESPONSIBILITY STATEMENT
In terms of Section 134 (5) of the Companies Act 2013 the directors would like tostate that:
i) In the preparation of the annual accounts the applicable accounting standards havebeen followed.
ii) The directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were 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 or loss of the Company for the year under review.
iii) The directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities.
iv)The directors have prepared the annual accounts on a going concern basis.
v) The directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
vi)The directors had devised proper system to ensure compliance with the provisions ofall applicable laws and that such system were adequate and operating effectively.
RELATED PARTY TRANSACTIONS
There are no materially significant related party transactions made by the Company withPromoters Key Managerial Personnel or other designated persons which may have potentialconflict with interest of the Company at large.
The Company does not have any subsidiary.
CODE OF CONDUCT
The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all employees in the course of day to day business operations ofthe Company.
All the Board Members and the Senior Management personnel have confirmed compliancewith the Code. All Management Staff were given appropriate training in this regard.
According to the provision of Section 204 of the Companies Act 2013 read with Rule 9of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theCompany engaged the services of M/s. L B and Co having Firm Reg No: 5363 PractisingCompany Secretary Chennai to conduct the Secretarial Audit of the Company for theFinancial Year 2019-20.
The Secretarial Audit Report submitted by the Company Secretary in Practice is enclosedas a part of this Annual report in Annexure-A which is self-explanatory.
The Secretarial Auditors' report does not contain any qualification reservation oradverse remarks.
M/s. Venkatesh & Co Chartered Accountants (Firm Registration No: FRN 004636S) werefirst appointed as Statutory Auditor of the Company to fill the casual vacancy created byresignation of the Auditor Ms. ELANGOVAN & CO Chartered Accountants Chennai witheffect from March 11 2019 till the conclusion of the previous year AGM vide Postal ballotmeeting dated 09th June 2019.
M/s Venkatesh & Co Chartered Accountants (FRN: 0046365) Chennai has beenreappointed as Statutory Auditor of the Company at last Annual General Meeting held on 13thDay of September 2019 for a period of four years.
OBSERVATIONS IN AUDITORS' REPORT
Details of Audit Qualification: Sundry Debtors amounting to Rs. 110535700/-stands unrealized for a period of more than one year. The Management is of the opinionthat these sundry debtors are Good and Realisable.
Reply: The company supplies shrimp seeds on credit basis repayable within 6 monthscredit period will be extended on a case to case basis depending on the request of the endusers the farmers.
The Aquaculture industries generally offer various credit facilities to farmers forfeeds chemicals and consumables and this will be recovered at the time of harvest ofshrimp. In a year there will be two crops January to June and July to December. Theculture will be 130 days to 150 days per crop. The remaining period is for thedisinfection of the pond.
Farmers are the backbone of Aquaculture industries without farmers there will be nohatchery or processing plant and no export. Out of INR 40000/- thousand crore of marineexport earnings last year INR 30000 crore is from cultured prawn. Hence to support themin all concerns relating to prawn culture the Company follows a liberal approach inhandling the receivables but at any cost we did not have much bad debts in the past wehave collected a major portion. However adequate measures are taking care includingregular follow-up by the marketing team and are ensuring that the receivables arerecovered. A delay in the recovery is inevitable in this type of industry. The farmerswill not cheat but there will be a delay if alternatively crop is good and bad. If thecrop is continuously success it will come on time.
This year there is a further delay in the recovery on account of the COVID 19 pandemic.Even then the Company has a responsibility to the society to help them out of theireconomic crisis because of the force majeure situation but still the Company has reasonsto believe that the debt is good and recoverable. Normally in the month of December toMarch 4 months very good sales will be there and the collection also will be good. Butthis year its complete reverse in nature.
The price of the prawn is based on the export market. Because of the Covid 19 nobodywas prepared to prepare the pond because china is the major importer of prawn next to USAso nobody was willing to stock it has been geared up from middle of March 2020. Thefarmer didn't get the sale proceeds from the processors. Since processor are not able toexport because of the very less demand from China. Once the payment is received fromprocessor the farmer will release the payment. We can assure that all the debts will berealised at the earliest.
The Central Government has not prescribed maintenance of cost records for the existingbusiness activities of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS:
The Management Discussion and Analysis Report are covered separately and forms part ofthe Annual Report.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as Annexure-C to this report and can be accessed in the website of the Company athttp://www.acewinagriteck.com/pdf/annual-return/MGT%209%20-%20Annual%20return.pdf
Constituents of Human Resources Development framework followed at the Company includeWorkforce planning Employee engagement Performance & Compensation managementLearning and Development Career & Succession planning and Organization Development.Towards sustenance and delivering improved results these constituents have a structuredapproach policies and standard operating procedures which are reviewed and updatedperiodically.
Current and future Skill-based competency development are planned and executed throughboth in-house programs and globally acclaimed programs continuing education challengingproject assignments and job rotations. The Company continues to maintain its record ofgood industrial relations without any interruption in work.
PARTICULARS OF EMPLOYEES
The Company has not employed any person during the year
- whose remuneration was not less than Rs. 6000000/- for the whole year or - not lessthan Rs. 500000/- per month if employed for part of the year.
- if employed throughout the financial year or part thereof was in receipt ofremuneration in that year which in the aggregate or as the case may be at a rate whichin the aggregate is in excess of that drawn by the managing director or whole-timedirector or manager and holds by himself or along with his spouse and dependent childrennot less than two percent of the equity shares of the Company.
The information required pursuant to Section 197 read with rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company will be provided upon request. In terms of Section 136 of the Act thereports and accounts are being sent to the members and others entitled thereto excludingthe information on employees' particulars which is available for inspection by the membersat the Corporate office of the Company during business hours on working days of theCompany up to the date of ensuing Annual General Meeting. If any member is interested ininspecting the same such member may write to the Company secretary in advance. Details ofremuneration ratio of the Directors / Key Managerial Personnel (KMP) / Employees are givenin Annexure-D.
CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION
The Company has taken adequate steps to adhere to all the stipulations laid down underSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015. A report on Corporate Governance included as a part of this AnnualReport is given in Annexure-F.
Certificate from the Statutory Auditors of the Company confirming the compliance withthe conditions of Corporate Governance as stipulated under Securities and Exchange Boardof India (Listing Obligations and Disclosure Requirements) Regulations 2015 is attachedto this Annual Report.
The Director & CEO and the Chief Financial Officer (CFO) of the Company havecertified to the Board on financial statements and other matters in accordance withRegulation 17 (8) of the Listing Regulations pertaining to CEO/CFO certification for thefinancial year ended 31st March 2020.
CODE OF BUSINESS CONDUCT AND ETHICS
The Board of Directors has approved a Code of Conduct and Ethics in terms of ScheduleIV of Companies Act 2013 and Listing Agreement. All the Board Members and the SeniorManagement personnel have confirmed compliance with the Code for the year ended March 312019. The annual report contains a declaration to this effect signed by the ManagingDirector and CFO.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE POLICY
The Company's policy on Prevention of Sexual Harassment of Women provides for theprotection and prevention against sexual harassment of women employees at the workplaceand redressal of such complaints. There were no complaints received or pending forredressal during the FY 19-20.
VIGIL MECHANISM/WHISTLE BLOWER POLICY:
In accordance with section 177(9) and (10) of the Companies Act 2013 and Regulation 22of SEBI (LODR) Regulations 2015 the company has established a Vigil Mechanism and has aWhistle Blower Policy. The policy provides a mechanism for all employees to report to themanagement grievances about the unethical behavior or any suspected fraud. The policy isavailable at the website of the company www.acewinagriteck.com
PREVENTION OF INSIDER TRADING:
The Company has complied with the provisions of SEBI (Prevention of Insider Trading)Regulations. The Company has adopted a Code of Conduct for Prevention of Insider Tradingwith a view to regulate trading in securities by the Directors and designated employees ofthe Company. The Code requires pre-clearance for dealing in the Company's shares andprohibits the purchase or sale of Company shares by the Directors and the designatedemployees while in possession of unpublished price sensitive information in relation tothe Company and during the period when the Trading Window is closed. The Board isresponsible for implementation of the Code. The code of conduct for prevention of insidertrading is available in the website of the companywww.acewinagriteck.com
COMPLIANCE OF SECRETARIAL STANDARD
The Company has complied with the Secretarial Standards issued by The Institute ofCompany Secretaries of India and approved by the Central Government as required underSection 118(10) of the Companies Act 2013
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS OF THE COMPANY:
There are no significant and material orders passed by the Regulators or Courts orTribunals which would impact the going concern status of the Company and its futureoperations.
The Directors gratefully acknowledge the continued support and co-operation receivedfrom the Company viz. M/s. Acewin Agriteck Limited Chennai. The Directors also thank thebankers financial institutions customers dealers vendors and sub-contractors for theirvaluable support and assistance.
The Directors wish to place on record their appreciation of the very good work done byall the employees of the Company during the year under review. The Directors also thankthe investors for their continued faith in the Company.
On behalf of the Board
For Acewin Agriteck Limited
Date: 02nd September 2020