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Camlin Fine Sciences Ltd.

BSE: 532834 Sector: Industrials
BSE 00:00 | 20 Apr 137.10 1.05






NSE 00:00 | 20 Apr 137.20 1.25






OPEN 136.05
VOLUME 34103
52-Week high 160.70
52-Week low 35.45
P/E 75.75
Mkt Cap.(Rs cr) 1,748
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 136.05
CLOSE 136.05
VOLUME 34103
52-Week high 160.70
52-Week low 35.45
P/E 75.75
Mkt Cap.(Rs cr) 1,748
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Camlin Fine Sciences Ltd. (CAMLINFINE) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the 27th Annual Report and the Audited FinancialStatements of Accounts for the financial year ended 31st March 2020.

Standalone Financial Highlights of 2019 – 2020

Revenue from Operations and Other Income of the Company were Rs. 60384.34 lakhs ascompared to Rs. 56178.09 lakhs in the previous year.

Profit before tax was Rs. 4128.62 lakhs as compared to Rs. 1418.63 lakhs in theprevious year.

Profit after tax was Rs. 3072.13 lakhs as compared to Rs. 1072.82 lakhs in theprevious year.

Standalone & Consolidated Financial Results:

(` In Lakhs)







Revenue from Operations & Other Income 60384.34 56178.09 105257.68 90595.40
Earnings before Interest Tax Depreciation & Amortisation 8377.72 4361.82 13413.34 8245.21
Less: Finance Cost 2806.82 2034.37 4312.91 3670.73
Less: Depreciation & Amortisation expenses 1128.21 908.82 3280.23 2899.32
Less: Share of Loss of associate - - (0.09) (5.88)
Profit before exceptional item and tax 4442.69 1418.63 5820.08 1669.28
Less: Exceptional Item 314.07 - - -
Less: Tax Expenses 1056.49 345.81 2837.00 1368.70
Profit After Tax 3072.13 1072.82 2983.08 300.58
Other Comprehensive Income net of tax (29.14) (30.12) 130.19 53.33
Total Comprehensive Income for the Year 3042.99 1042.70 3113.26 353.91
Retained Earnings- Opening Balance 6637.75 5633.14 6689.89 7324.11
Add: Profit for the year 3072.13 1072.82 3031.86 57.72
Add: Adjustments with Other Equity including Other Comprehensive Income (25.63) (68.21) 715.53 (691.94)
Amount appropriated during the year:
Dividend including Dividend Tax paid - - - -
Transfer to General Reserve - - - -
Retained Earnings- Closing Balance 9684.25 6637.75 10437.28 6689.89

On a standalone basis the Revenue from Operations have increased to INR 57977.90lakhs in the financial year 2019-20 vis--vis INR 54812.29 lakhs in the previous yearthereby registering growth of 5.78%. Margins have improved over the last year due to yieldimprovements favourable product mix and favourable currency movement.

On a consolidated basis the Revenue from Operations has shown a robust growth of17.60% over the previous year. The Revenue from Operations for the year ended 31st March2020 was Rs. 104914.84 lakhs vis--vis previous year of Rs. 89216.67 lakhs.

Following are the highlights of performance of the Company's operational subsidiariesassociates and joint venture companies and their contribution to the overall performanceof the company during the period under report.

? CFS Wanglong Flavours (Ningbo) Co. Ltd. (CFS Wanglong):

CFS Wanglong reported a Turnover of Rs. 17652.61 lakhs for the year under review vis avis Rs. 13448.02 lakhs in previous year. CFS Wanglong posted a Loss Before Tax of Rs.2673.72 lakhs during the year under review vis a vis Loss Before Tax of Rs. 1248.41lakhs in previous year. The Margins were under some pressure due to increase in inputcosts. However the Vanillin market is being penetrated globally through our subsidiarynetwork and the outlook remains positive for CFS Wanglong.

? Dresen Quimica SAPI De CV (Dresen):

Turnover of Dresen was Rs. 25710.96 lakhs during the year under review vis a vis Rs.21718.55 lakhs in previous year. Dresen posted a Profit Before Tax of Rs. 4023.92 lakhsduring the year under review vis a vis Rs. 3134.21 lakhs in previous year. The growthpath will sustain for Dresen.

? CFS North America LLC (CFS USA):

CFS USA achieved a Turnover of Rs. 3858.06 lakhs during the year under review vis avis Rs. 2359.09 lakhs in previous year. CFS USA posted a Loss Before Tax of Rs. 783.37lakhs during the year under review vis a vis Loss Before Tax of Rs. 982.45 lakhs inprevious year. The outlook for CFS USA remains positive.

? CFS do Brasil Indstria Comrcio Importao e Exportao de AditivosAlimentcios Ltda. (CFS Brazil):

CFS Brazil reported a Turnover of Rs. 6178.99 lakhs during the year under review vis avis Rs. 4110.67 lakhs in previous year. The Loss Before Tax of Rs. (1832.06) lakhs wasposted during the year under review vis a vis Loss Before Tax of Rs. 889.79 lakhs inprevious year. The outlook remains positive for CFS Brazil.

? CFS Europe S.p.A. (CFS Europe):

Improvements in operations of CFS Europe has resulted in Turnover of Rs. 30908.26lakhs during the year under review vis a vis Rs. 32956.62 lakhs in previous year. CFSEurope posted a Profit Before Tax of Rs. 3273.35 lakhs during the year under review vis avis Profit Before Tax of Rs. 2135.33 lakhs in previous year.

? Chemolutions Chemicals Limited (CCL):

CCL is engaged in contract manufacturing / job work of the Company. The Turnover of CCLduring the year under review was Rs. 391.76 lakhs vis a vis Rs. 518.62 lakhs in previousyear/ CCL posted a Profit Before Tax of Rs. 115.72 lakhs during the year under review visa vis Profit Before Tax of Rs. 164.65 lakhs in previous year.

State of Affairs

Your Company is engaged in research development manufacturing and marketing ofspecialty chemicals ingredients and additive blends which are used in a wide array offood petfood animal feed and industrial products. Our business is categorized intothree verticals based on our product portfolio namely:

(i) Shelf Life Solutions; and

(ii) Aroma Ingredients and

(iii) Performance Chemicals

(iv) Health & Wellness. Your Company market its products globally including inNorth America Europe Asia Pacific India South and Central America.

The Company has been proactive to tackle the challenges that have emerged due to theCovid pandemic which is impacting the entire world since the start of 2020. All ourmanufacturing facilities were operational except the Vanillin manufacturing facility inChina which was shut due to the declaration of the local lockdown in the month of February2020. India facility resumed operations within few days of lockdown 1.0. CFS remainscommitted to the fight against the pandemic and is catering to the needs of"essential services" customers in food chain and the pharmaceutical industry. Atthe present all the manufacturing facilities of the Group are operational at the optimallevel. Company's corporate offce at Mumbai has been under lockdown since March 25 2020however company has set up systems and infrastructure for smooth operations for personnelworking from home. This was possible due to quick response mechanism set up by themanagement to address the challenges during the crisis with a primary objective ofensuring the health and well-being of our employees.

Company's focus on liquidity supported by optimal use of its global manufacturing andsales network would help in navigating any challenges in the current environment andaftermath of COVID pandemic.

During the year Company achieved the mechanical completion of its Diphenol project inDahej SEZ. The trial runs were commenced and are progressing as per technicalspecifications. The trial runs were unfortunately halted due to the countrywide lockdownin the last fortnight of March 2020. The runs were started after getting due permissionfrom the local authorities and the Company is confident of commencing the commercialproduction in the very near future.

The start of this calendar year has also witnessed an unprecedented fall in the oilprices and a spurt in the dollar. The company does not expect any significant impact ofthe oil prices in its business. While for foreign currency fluctuations the Company has anatural hedge.

During the year for administrative convenience Company has reverse merged its whollyowned subsidiary in Mauritius viz. CFCL Mauritius Private Limited into CFS Europe SpaItaly effective 25th June 2019. Pursuant to this merger CFS Europe Spa has now become awholly-owned subsidiary. This merger has resulted in a leaner structure and will help inbetter operational management.

Shelf life Solutions (SLS) include a range of solutions that increases the shelf lifeof a product. It could also help in retaining the freshness colour taste and safety ofthe final product. The business is dominated by the antioxidant range of products for food& beverage petfood rendering animal nutrition aquaculture and biodieselindustries. These antioxidants are marketed under brands "Xtendra" and"NaSure". Other than antioxidants we manufacture and market a range ofantimicrobials toxin binders pellet binders acidifying agents probiotics growthpromoters mould inhibitor to name a few. The blends or additives for food and feed aremanufactured in Mexico Italy Brazil and India catering to the customers in theirrespective continents.

In FY2019-20 we have expanded our product offering for the food and feed industry.Especially with the rising consumption of meat and poultry products; feed additives havebecome an important part of animal nutrition. With the reduction in the usage ofantibiotics for farm animals our products proved to be an effective alternative tomaintain their gut health. Similarly for the petfood segment our natural shelf lifesolutions have gained traction. The humanisation of pets has increased consumer's interestin natural formulations thereby increasing the potential of the petfood companies todiversify their offering to ensure optimum nutrition safety and palatability. The NorthAmerica region has put a special thrust on the development of NaSure shelf-life solutions.

The biodiesel industry too will witness a positive change in the coming years. InBrazil with the introduction of a federal program to curb carbon emissions and expandethanol production will see higher consumption of biofuels. There have been mandatedantioxidant blend levels for diesel fuel which will also revive our biodiesel blendproducts. A quality product also demands a reliable delivery of services. The year focusedon providing real-time services to the feed industry. We have Customer Service ApplicationLaboratories situated in India Mexico Brazil and USA to provide its customers withproduct application and technical services for food as well as feed. Italy laboratorywas the latest addition; located close to our diphenol plant in Ravenna benefiting fromthe high level of expertise in phenol chemistry. The laboratory is equipped to fulfill theneeds of the customers in the European Union. All our laboratories work in closecollaboration to optimize the support for our customers.

Using our vertically integrated robust manufacturing chain we produce VanesseTM(Vanillin) and EvanilTM (Ethyl Vanillin). These products are derived from Catechol route;which is considered to be one of the most acceptable route of synthesis. It is widely usedin food flavour fragrance incense sticks pharma and cattle feed segments. Vanillin ismanufactured at our plant in China following global standards of quality and safety. Wehave also introduced a few other aroma chemicals which have applications in the flavourand fragrance industry.

With the maximum possible capacity utilization of the plant at our CFS plant Italy hasopened its doors to reach out to a wide array of industries enhancing its applicationsand also considerable improvement in energy effciency. Company has added few specialtychemicals to the portfolio and has expanded to serve globally to the PetrochemicalPharmaceutical Flavor & Fragrance Agrochemicals Polymer and Dye Industry. Ourvertically integrated manufacturing has allowed us to be a steady and transparent partnerto our customers.

With increasing health awareness and self-care nutraceutical has gained prominence inthe developed markets. Health and Wellness its new business vertical offers nutraceuticalproducts from fermentation and green extraction sources to food and beverage petfoodnutritional supplements sports nutrition segments etc. A robust team comprising technicaland commercial expertise would set a new benchmark in the wellness space.

With a footprint that extends across the American continents Europe and Asia we areable to effciently meet our customer requirements.


Considering the growth requirements of the business your Directors do not recommendany dividend for the financial year 2019 - 2020.

The Company had transferred a sum of Rs. 316703.00 during the financial year to theInvestor Education and Protection Fund established by the Central Government. The saidamount represents Unclaimed Dividend for the financial year 2011 - 2012 with the Companyfor a period of 7 (seven) years from the due date of payment.

Preferential Warrants

Pursuant to the approval accorded by the Board of Directors of the Company at itsmeeting held on 29th November 2017 and the Special Resolution passed by the Members ofthe Company on 26th December 2017 the Company allotted 9000000 Preferential Warrants(the "Warrants") convertible in to one equity share of face value Re. 1 each(the "Equity Shares") within a period of 18 (eighteen) months from the date ofallotment of the Warrants at a price of Rs. 92.69 per warrant including share premium ofRs. 91.69 per Equity Share aggregating to Rs. 8342.10 lakhs. The Company on 08thFebruary 2018 received an amount equivalent to 25% of the total consideration amountingto Rs. 20.86 Crores towards subscription of Warrants which were invested in mutual fundsetc. The Warrants had to be exercised by the allottees at any time before the expiry of 18(Eighteen) months from the date of allotment of the Warrants i.e. on or before 08thAugust 2019. The allottees have not exercise the Warrants within 18 (Eighteen) monthsfrom the date of allotment of the Warrants and hence the Warrants have lapsed and theamount paid on such Warrants have been forfeited by the Company and transferred to capitalreserve.

Employee Stock Option Scheme

During the year under review the Camlin Fine Sciences Employees' Stock Option Schemeof 2014 has expired and the balance options have lapsed.

Further the Members at their 25th Annual General Meeting held on 13th August 2018approved the CFS Employees Stock Option Scheme 2018. ("CFSL ESOP 2018").Pursuant to CFSL ESOP 2018 the Company can issue and allot up to 1500000 (Fifteen Lacs)equity shares of Re. 1/- each at the exercise price which shall be at the maximum 20%(twenty percent) discount of the market price of the equity shares on the StockExchange(s) on the date of grant of Options. The applicable disclosure as stipulated underSEBI Guidelines as at 31st March 2020 is given in "Annexure A" to this report.


During the year under review your Company neither accepted nor renewed any fixeddeposits falling within the ambit of Section 73 of the Companies Act 2013 and TheCompanies (Acceptance of Deposits) Rules 2014. The total unclaimed Deposits as on 31stMarch 2019 were Rs. 4.10 lakhs.


Your Company has the following subsidiaries (including step down subsidiaries) as onMarch 31 2020:

CFCL Mauritius Private Limited

A 100% owned subsidiary of the Company incorporated for acquisition of CFS EuropeS.p.A. in Italy. Company on 16th July 2019 informed the stock exchanges that the reversemerger of CFS Mauritius Private Limited has been effective from 25th June 2019 andsubsequently Company is now directly holding 100% stake in CFS Europe S.p.A which washeld earlier through CFS Mauritius Private Limited. With effect from 25th June 2019 CFSMauritius Private Limited ceased to be the wholly-owned subsidiary of the Company.

CFS Europe S.p.A.

A 100% owned subsidiary of the Company engaged in manufacture and sale of key rawmaterials required by the Company.

CFS do Brasil Industria Comercio Importacao e Exportao de Aditivos AlimentciosLtda.

A 100% owned subsidiary in Brazil to manufacture and market customized blends to caterto the Latin American market. Besides it also handles distribution of bulk antioxidantsand vanillin. CFS do Brasil Indstria Comrcio Importao e Exportao de AditivosAlimentcios Ltda. has set-up separate entities named CFS Argentina S.A (CFS Argentina)and CFS De Chile SpA to cater to the customers in Argentinian and Chile markets.

CFS Argentina S.A.

CFS do Brasil Indstria Comrcio Importao e Exportao de AditivosAlimentcios Ltda. our wholly owned subsidiary in Brazil has set-up separate entity namedCFS Argentina S.A to cater to the customers in Argentinian market.

CFS De Chile SpA.

CFS do Brasil Indstria Comrcio Importao e Exportao de AditivosAlimentcios Ltda. our wholly owned subsidiary in Brazil has set-up separate entitynamed CFS De Chile SpA to cater to the customers in Chile market.

Solentus North America Inc.

A 100% wholly owned subsidiary incorporated in Canada for the purpose of conductingsales marketing and distribution of antioxidants food ingredients blends formulationsetc. in USA and Canada.

CFS North America LLC.

A 100% wholly owned subsidiary in USA engaged in sales marketing and distribution ofantioxidants food ingredients blends formulations etc. in North America.

CFS Antioxidantes de Mexico SA de C.V.

A 100% owned subsidiary of the Company incorporated for acquisition of Dresen QuimicaSAPI de C.V. in Mexico. Company on 08th May 2019 informed the stock exchanges that thereverse merger of CFS Antioxidnates De Mexico De CV with Dresen Quimica SAPI De CV hasbeen effective from 31st January 2019 and subsequently Company is now directly holding65% stake in Dresen Quimica S.A.P.I de C.V. which was held earlier through CFSAntioxidantes De Mexico S.A. De C.V. With effect from 31st January 2019 CFSAntioxidantes De Mexico S.A. de. C.V. ceased to be the wholly-owned subsidiary of theCompany.

Dresen Quimica S.A.P.I. de C.V.

On 04th May 2016 CFS Antioxidantes De Mexico S.A. de C.V. Mexico acquired 65% stakein Dresen Quimica C.V. Mexico along with its group companies viz. IndustriasPetrotec de Mxico S.A. de C.V. Mexico; Nuvel S.A.C. Peru; Britec S.A. GuatemalaInovel S.A.S. Colombia and Grinel S.A. Dominican Republic.

CFS International Trading (Shanghai) Ltd.

A 100% wholly owned subsidiary CFS International Trading (Shanghai) Ltd. wasincorporated in China (Shanghai) pilot free trade zone to manufacture and deal inspeciality chemicals.

Chemolutions Chemicals Limited (CCL)

A subsidiary in which the Company owns 94.08%. CCL inter alia deals in specialtychemicals and is also engaged in third party contract manufacturing/ jobwork. CCL ishaving its registered offce in Mumbai and its plant at Tarapur Maharashtra.

CFS Wanglong Flavours (Ningbo) Co. Ltd.

In July 2017 your Company through its wholly owned step-down subsidiary viz. CFSEurope S.p.A. acquired 51% stake in CFS Wanglong Flavours (Ningbo) Co. Ltd. (CFS Wanglong)erstwhile Ningbo Wanglong Flavors and Fragrances Company Limited. CFS Wanglong uses apatented process in its 3500 dedicated facility in the coastal city of Yuyao Chinato manufacture vanillin.

CFS Pahang Asia Pte. Ltd.

In April 2018 your Company has signed a contract with Pahang Pharma (S) Pte. Ltd.Singapore (Pahang) for incorporating a holding company named CFS Pahang Asia Pte. Ltd. inSingapore (hereinafter referred to as "CFS Pahang"). CFS Pahang was incorporatedon 09th April 2018 with shareholding in the proportion of 51:49 aims at researchdevelopment production trade and dealing in animal feed ingredients and products forMalaysia and other South Asian countries through its subsidiaries.

The statement containing the salient features of Company's Subsidiaries and AssociateCompanies under the first proviso of section 129(3) forms the part of the financialstatements.

As decided by the Board of Directors at its meeting held on 19th June 2020 the copiesof Audited/ Unaudited Financial Statements of the Subsidiaries have not been attached tothe Annual Accounts of the Company. These documents will however be made available uponrequest by any member of the Company and also shall be available for inspection at theregistered offce of the Company during business hours on working days of the Company up tothe date of the ensuing Annual General Meeting. Further the accounts of the Subsidiariesshall also be uploaded on the Company's website and the weblink for the same is

The Policy for Determining Material Subsidiaries is disclosed on the Company's websiteand the weblink for the same is BusinessConductEthics.


Mr. Dilip D. Dandekar (DIN: 00846901) and Mr. Nirmal V. Momaya (DIN: 06820240) areretiring by rotation and being eligible offer themselves for re-appointment them. TheBoard recommends their re-appointment.

The Board of Directors at its meeting held on 7th February 2020 upon therecommendation of the Nomination and Remuneration Committee has appointed Ms. SutapaBanerjee (DIN: 02844650) as an Independent Director on the Board of the Company. Beingeligible and offering herself for appointment resolution is being placed before theMembers for approval at the 27th Annual General Meeting.

On 3rd August 2019 the Company received the letters from Mr. Abeezar E. Faizullabhoy(DIN: 00203706) and Mr. Bhargav R. Patel Independent Directors tendering their lettersof retirement on expiry of their term. The Board took the note of the same and placed onrecord its appreciation for the services rendered by Abeezar E. Faizullabhoy and Mr.Bhargav R. Patel during their respective tenures as Independent Director.

As required under the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 (SEBI LODR 2015) particulars of Directors seeking appointment/reappointment at the ensuing General Meeting have been given under Corporate GovernanceReport and in the Notice of the 27th Annual General Meeting.

None of the Directors are disqualified from being appointed as Directors as specifiedin Section 164 of the Companies Act 2013.

All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16 of SEBI LODR 2015 as amended from time to time and are independent of the management.

The details of familiarisation programmes held for the directors are disclosed on theCompany's website and the weblink for the same is BusinessConduct Ethics.

Key Managerial Personnel

Mr. Rahul D. Sawale resigned as the Group Company Secretary effective 15th July 2019.The Board of Directors uponrecommendationoftheNominationandRemuneration Committee at itsmeeting held on 8th November 2019 appointed Ms. Lavanya Rastogi as the interim CompanySecretary & Compliance Offcer. Subsequently The Board of Directors uponrecommendation of the Nomination and Remuneration Committee at its meeting held on 7thFebruary 2020 appointed Mr. Mandar Godbole as the Company Secretary & ComplianceOffcer Mr. Mandar Godbole has been appointed as a Company Secretary & ComplianceOffcer.

Board Evaluation

Pursuant to the provisions of the Companies Act 2013 the Board has carried out anannual performance evaluation of its own performance the directors individually as wellas the evaluation of the working of its Audit Nomination & Remuneration and otherCommittees.

The Board's performance for the year under review was assessed on the basis ofparticipation of directors quality of information provided/available quality ofdiscussion and contribution etc. A structured questionnaire was prepared after taking intoconsideration inputs received from the directors covering the aforesaid aspects of theBoard's functioning. The overall performance of the Board and Committees of the Board wasfound satisfactory.

The overall performance of Chairman Executive Directors and the Non-ExecutiveDirectors of the Company was found satisfactory. The review of performance was based onthe criteria of performance knowledge analysis quality of decision making etc.

Nomination and Remuneration Policy and Evaluation criteria of Independent Directors

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Key Managerial PersonnelSenior Management and their remuneration and evaluation criteria for performanceevaluation of Independent Directors.

The Nomination and Remuneration Policy and evaluation criteria of Independent Directorshave been provided under Corporate Governance Report.

Details in respect of adequacy of internal financial controls with reference to theFinancial Statements

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. To maintain its objectivity and independence the InternalAuditor reports to the Chairman of the Audit Committee of the Board.

The Internal Auditor monitors and evaluates the effcacy and adequacy of internalcontrol system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company. Based on the report of StatutoryAuditor and the Internal Auditor corrective actions are undertaken in the respectiveareas and thereby strengthening the controls. Significant audit observations andcorrective actions thereon are presented to the Audit Committee of the Board.

Directors' Responsibility Statement

Pursuant to the requirement u/s 134(3)(c) of the Companies Act 2013 (the"Act") with respect to Directors' Responsibility Statement it is herebyconfirmed that:

(a) in the preparation of the annual accounts for the financial year ended 31st March2020 the applicable accounting standards have been followed and there are no materialdepartures from the same;

(b) the directors have 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 ended31st March 2020 and of the profit of the Company for the year ended on that date;

(c) the directors have taken proper and suffcient 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 have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and

(f) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

Meeting of Board and Committees of Directors

During the year 4 (four) Board Meetings and 4 (four) Audit Committee Meetings wereconvened and held. The details of the same along with other Committee's of Board are givenin the Corporate Governance Report. The intervening gap between the Meetings was withinthe period prescribed under the Companies Act 2013.


M/s. Kalyaniwalla & Mistry LLP Chartered Accountants (Firm Registration No.104607W/W100166) were appointed as Statutory Auditors of your Company at the AnnualGeneral Meeting held on 21st July 2017 for a term of five consecutive years.

Auditors' Report

The observations made in the Auditors' Report are self-explanatory and do not call forany further comments u/s 134(3)(f) of the Companies Act 2013.

Reporting of Frauds

There have been no instances of fraud reported by the Statutory Auditors under Section143(12) of the Act and Rules framed thereunder either to the Company or to the CentralGovernment.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. JHR & Associates a firm of Company Secretaries in Practice toundertake the Secretarial Audit of the Company. The Report of the Management has takennote of the observations mentioned therein and has taken steps to rectify the delays inthe statutory filings.

Cost Audit

As per the Companies (Cost Records and Audit) Rules 2014 the requirement for CostAudit is not applicable to a Company whose revenue from exports in foreign exchangeexceeds seventy-five per cent of its total revenue.

Since the Company's revenue from exports in foreign exchange exceeds seventy-fiveper cent of its total revenue Cost Audit is not applicable to the Company. Howevermaintenance of cost records is required by the Company and accordingly such accounts andrecords are made and maintained.

Particulars of Employees

The information required pursuant to Section 197 read with Rule 5 of The Companies(Appointment and Remuneration ofManagerialPersonnel)Rules2014inrespectofemployees of theCompany is annexed herewith as "Annexure C".

No employees other than Managing Director were in receipt of the remuneration as statedin sub-rule (2) of rule (5) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as amended and hence the relevant disclosures as stated in thesaid Rule (5) is not applicable.

Corporate Social Responsibility (CSR)

Company operates CSR Policy in the areas of promoting healthcare education includingspecial education and employment enhancing vocation skills especially among children thedifferently abled tribal communities and measures for reducing inequalities faced bysocially and economically backward classes.

The projects identified and adopted are as per the activities included and amended fromtime to time in Schedule VII of the Companies Act 2013. The Company endeavors to make CSRa key business process for sustainable development and welfare of the needy sections ofthe society.

After considering the views of CSR Committee the Board of Directors did not recommendany CSR spend for the year under review in view of the losses incurred during the previousyear. The Annual Report on CSR activities forming part of this Board's report is annexedherewith as "Annexure D".

Vigil Mechanism / Whistle Blower Policy

The Company has a vigil mechanism named Whistle Blower Policy to deal with instance offraud and mismanagement if any. The objective of the said policy is to explain andencourage the directors and employees to raise any concern about the Company's operationsand working environment including possible breaches of Company's policies and standardsor values or any laws within the country or elsewhere without fear of adverse managerialaction being taken against such employees.

The Whistle Blower Policy is disclosed on the Company's website and the web link forthe same is http://www.

Particulars of Loans Guarantees or Investments

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in notes to the Financial Statements.

Related Party Transactions

All Related Party Transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company with Promoters Directors andKey Managerial Personnel which may have a potential conflict with the interest of theCompany at large. The disclosure of Related Party Transactions as required under Section134 (3) (h) of the Companies Act 2013 in form AOC-2 is given in the "Annexure E"to this report.

The policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website and the weblink for the same is

Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo.

As required by the Companies (Accounts) Rules 2014 the relevant informationpertaining to conservation of energy technology absorption foreign exchange earnings andoutgoings respectively is given in the "Annexure F" to this report.

Risk Management Policy

The Company is aware of the risks associated with the business. It regularly analysesand takes corrective actions for managing / mitigating the same.

Your Company has institutionalized the process for identifying minimizing andmitigating risks which is periodically reviewed. Some of the risks identified and beenacted upon by your Company are: Securing critical resources; ensuring sustainable plantoperations; ensuring cost competitiveness including logistics; completion of CAPEX;maintaining and enhancing customer service standards and resolving environmental andsafety related issues.

Significant and Material Orders passed by the Regulators/ Courts if any

During the year under review there are no significant or material orders passed by theRegulators or Courts or Tribunals which would impact the going concern status of yourCompany and its future operations.

Sexual Harassment of Women at Workplace:

The Company is an equal opportunity employer and consciously strives to build a workculture that promotes dignity of all employees. During the year under review no cases ofsexual harassment were reported. The Company has complied with provisions relating to theconstitution of Internal Complaints Committee under the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal)Act 2013.

Corporate Governance

As required under Regulation 27 of SEBI LODR 2015 a detailed Report on CorporateGovernance is given as a part of Annual Report. The Company is in full compliance with therequirements and disclosures that have to be made in this regard. The Certificate of thecompliance with Corporate Governance requirements by the Company issued by the PracticingCompany Secretaries is attached to the Report on Corporate Governance.

Management Discussion and Analysis

A detailed review of the operations performance and future outlook of the Company andits business is given in the Management's Discussion and Analysis Report which forms apart of this report.

Extract of the annual return

Pursuant to section 92(3) of the Companies Act 2013 the extract of the annual returnin Form No. MGT – 9 forms part of this Board's report and is enclosed as"Annexure G".


The Board wishes to place on record its appreciation of sincere efforts put in by theemployees of the Company in helping it reach its current growth levels. Your Directorsplace on record their appreciation for the support and assistance received from theinvestors customers vendors bankers financial institutions business associatesregulatory and governmental authorities.

Dilip D. Dandekar For & On behalf of the Board
Chairman Ashish S. Dandekar
Place : Mumbai Managing Director
Dated : 25th June 2020