The Board of directors is pleased to present the 69th Annual Report along with theAudited financial statements for the financial year ended March 31 2021.
FINANCIAL HIGHLIGHTS (As per IND-AS):
(Amount Rs in Lakh)
|Particulars ||Standalone results ||Consolidated results |
| ||FY 2019-20 ||FY 2019-20 |
|Total Revenue ||37943.96 ||31281.97 ||38553.93 ||30527.22 |
|Total Expenditure ||31621.06 ||26527.31 ||33390.87 ||26185.21 |
|Profit before tax (PBT') ||6322.90 ||4754.66 ||5163.06 ||4342.01 |
|Less: Provision for tax (including deferred tax) ||1126.05 ||(1612.37) ||910.02 ||(1610.01) |
|Profit after tax (PAT') ||5196.85 ||6367.04 ||4253.04 ||5952.02 |
|Non-Controlling interest ||- ||- ||(297.62) ||(0.58) |
|Share of interest in profit/(loss) of associates ||- ||- ||- ||- |
|Profit for the year ||5196.85 ||6367.04 ||4550.66 ||5952.60 |
|Proposed Dividend ||NIL ||NIL ||NIL ||NIL |
|Balance in Statement of Profit and Loss account ||5196.85 ||6367.04 ||4550.66 ||5952.60 |
RESULTS FROM OPERATIONS
In financial year 2020-21 (FY 2020-21') the Company on a Standalone basis earnedrevenue of RS 37943.96 Lakh compared to RS 31281.97 Lakh in the previous financial year2019-20 (FY 2019-20'). In FY 2020-21 the Company reported profit after tax of RS5196.85 Lakh as against profit after tax of RS 6367.04 Lakh in FY 2019-20. On aconsolidated basis the Company recorded revenue of RS 38553.93 Lakh compared to RS30527.22 Lakh in the previous financial year FY 2019-20'. In FY 2020-21 theCompany recorded profit after tax of RS 4550.66 Lakh as against profit after tax of RS5952.02 Lakh in FY 2019-20.
The Board of Directors is pleased to recommend an equity dividend of RS 2.50 per equityshare (50%) of RS 5 each for FY 2020-21 (Previous year RS 5 per equity share of RS 5each). The equity dividend if approved by the Members at the 69th Annual General Meeting(AGM') will result in a cash outflow of Rs 735.77 Lakh.
Transfer to Reserves
The Board of Directors have decided to retain the entire amount of profit after tax forFY 2020-21 in the profit and loss account.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements of the Company for FY 2020-21 ("CFS")include financials of its subsidiaries and associate companies (collectively referred asSubsidiaries/ Associates') i.e. Fermenta Biotech (UK) Limited Fermenta BiotechGmbH Fermenta USA LLC Fermenta Biotech USA LLC G.I. Biotech Private Limited AegeanProperties Limited CC Square Films Limited (Subsidiaries') and Health and WellnessIndia Private Limited (associate company). The CFS of the Company and its Subsidiaries/Associates are prepared in accordance with the relevant Indian Accounting Standards (IndAS) notified under the Company (Indian Accounting Standards) rules 2015 and otherapplicable provisions. CFS together with Auditors' Report thereon forms part of thisAnnual Report.
The Company incorporated a wholly-owned subsidiary in the United States of America viz.Fermenta Biotech USA LLC on May 27 2020.
In December 2020 Fermenta Biotech USA LLC a wholly owned subsidiary of the Companyhas acquired 52% membership interest in AGD Nutrition LLC (now known as Fermenta USALLC).
The individual financial statements of the Company's Subsidiaries/Associates have notbeen attached to the financial statements of the Company for FY 2020-21. The financialinformation of the Company's Subsidiaries/ Associates provided in this section may be readalong with the information provided under the heading Consolidated FinancialStatements' in this report. In accordance with the provisions of sub-section (3) ofsection 129 of the Act read with Rule 5 and Rule 8 of the Companies (Accounts) Rules2014 [as amended from time to time] a separate statement containing salient features ofthe financial statements of Company's Subsidiaries/ Associates in Form AOC I is attachedto this Board's report as Annexure I and forms part of this Board's report.
The financial statements of the Company's Subsidiaries/ Associates will be availablefor inspection through electronic mode. Members are requested to write to the Company oninfo@fermentabiotech. com for inspection of said documents.
The standalone and consolidated financial statements of the Company have been uploadedon the website of the Company at https://www.fermentabiotech.com/annual-report.php.
MANAGEMENT DISCUSSION AND ANALYSIS (MD&A)
The Company is engaged in pharmaceuticals manufacturing and marketing APIsbiotechnology and environmental solutions and renting of properties. MD&A coveringdetails of the business of the Company is provided on page 86 and forms part of thisBoard's Report.
INTERNAL CONTROL SYSTEMS AND RISK MANAGEMENT
In order to identify analyse and address potent risks in a systematic manner yourCompany has developed and implemented risk management policy. It also maintains adequateinternal control systems commensurating to its size nature of operations. Periodicalreporting(s) compliance with applicable laws and Company's procedures are duly complied.
The Company's internal control systems are routinely reviewed and certified byStatutory Auditors and Internal Auditors. During the year under review the Company'sInternal Auditors M. M. Nissim & Co. Chartered Accountants conducted and reportedthe effectiveness and efficiency of internal control system including adherence toprocedures as per the policies of the Company and regulatory requirements as well.
The Company has an experienced and qualified finance department which plays animportant role in implementing and monitoring the internal control procedures andcompliance with statutory requirements. The Audit Committee and the Board of Directorsreview the report(s) of the independent Internal Auditors at regular intervals along withthe adequacy effectiveness and observations of the Internal Auditors regarding internalcontrol system and recommends improvements and remedial measures wherever necessary.
The Company has implemented the provisions of Regulation 21 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") i.e. Risk Management Committee effective FY 2021-22.
The information required under sub rule (1) of rule 5 and sub rule (2) of rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 read withsub-section (12) of Section 197 of the Act in respect of employee remuneration and otherdetails forms part of this report and provided as Annexure II. Other applicableinformation for the above provisions will be made available to the members upon theirrequest.
The Company had a headcount of 580 employees during the year under review.
Employee Stock Options
During FY 2020-21 the Company has not granted any options under its FermentaBiotech Limited -Employee Stock Option Plan 2019' ("ESOP 2019").
Disclosures pursuant to Regulation 14 of the SEBI (Share Based Employee Benefits)Regulations 2014 read with SEBI Circular dated June 16 2015 are provided as at Company'swebsite at https://www.fermentabiotech.com/esop-disclosure.php
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
The Company has formulated a code on Redressal of Grievances Regarding SexualHarassment' pursuant to the requirements of the Sexual Harassment of Women at theWorkplace (Prevention Prohibition and Redressal) Act 2013 and the Rules framedthereunder (POSH'). The Company has also set up Internal ComplaintsCommittee' for Company's each location for redressal of grievances and to protect womenagainst any harassment.
The Company is committed to providing a safe and conducive work environment to all itsemployees and associates. The Company has conducted workshops and awareness programmesagainst sexual harassment for its employees.
Details of complaints during the year under review.
a. number of complaints filed during the financial year : Nil
b. number of complaints disposed of during the financial year : Nil
c. number of complaints pending as on end of the financial year : Nil
The Company continues to adopt Next Generation Cyber Security Architecture' thatoffers enhanced detection prevention and correction capabilities to counteract cybersecurity threats at each level of the IT ecosystem. Its threat detection tools protect anddefend operations against existing and emerging cyber security attacks such as phishingdistributed denial-of-service (DDoS) ransomware and malwares based on machine learningand artificial intelligence. While the Company has created a foothold in gettingtechnology ready for business the focus on getting business ready for technology is alsogrowing. The Company welcomes in the bimodal technology approach in strengthening the baseto build a better future. The technology team at FBL ensures that it has the futuristictechnology not just for existing processes but to also to help the Company to grow andcreate newer business models. While establishing technology culture in the organisationthe Company ensures that the business teams adopt the technology resources and implementchanges to reexplore the business and stay ahead of the competition in digital world.
In addition mobility solutions and support has played a key role in achieving improveddeliverables speciality in Covid situation when the nationwide lockdown is continuedthroughout the financial year. All employees from your Company's Corporate Office in Thaneworked from their respective home without a single day interruption. With state of the artERP solution (SAP S4HANA) the Company is equipped to handle the transition of financialdata of its recently acquired subsidiary in USA.
In FY 2020-21 your Company has not accepted any deposits under Section 73 of the Actincluding rules framed thereunder. No principal or interest has remained unpaid orunclaimed as on March 31 2021.
As on March 31 2021 the Company continued to maintain its credit rating as per lastyear's rating i.e. CARE A- (Single A minus) with Stable outlook for Long Term BankFacilities for fund based limits and term loan and CARE A2 (Single A two) for Short TermBank Facilities for non-fund based limits and the same has been reafirmed by the creditagency.
Independent Directors have made relevant declarations to the Company includingconfirmation(s) that the conditions of independence laid down in sub-section (6) ofsection 149 of the Act and Regulation 25 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 ("Listing Regulations") are duly complied.
Retirement by rotation:
Mr. Satish Varma (DIN: 00003255) retires by rotation at the 69th AGM and beingeligible offers himself for re-appointment. Brief profile of Mr. Satish Varma is providedon page no. 288 of this Annual Report.
Directors and Key Managerial Personnel (KMP'):
Mr. Krishna Datla (DIN: 00003247) was appointed at the Annual General Meeting held onSeptember 28 2018 as a Managing Director of the Company for a period of three years witheffect from May 9 2018. His term as a Managing Director ended on May 8 2021. TheBoard subject to members' approval at the ensuing AGM appointed Mr. Krishna Datla (DIN:00003247) as a Whole-time Director of the Company (Key Managerial Personnel) designatedas Executive Vice-Chairman for a term of three years effective from May 9 2021.
The Board appointed Mr. Prashant Nagre (DIN: 09165447) as an Additional Directoreffective from May 6 2021.
The Board subject to members' approval at the ensuing AGM has appointed Mr. PrashantNagre as a Managing Director of the Company for a period of three years effective from May9 2021. Effective May 08 2021 Mr. Prashant Nagre relinquished his office of ChiefExecutive Officer.
Except as above no Director or KMP has resigned or was appointed during the year underreview.
ANNUAL PERFORMANCE EVALUATION OF THE BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS
Details of the annual performance evaluation have been provided in the CorporateGovernance Report attached as Annexure III to this Board's report.
Deloitte Haskins & Sells LLP Chartered Accountants (ICAI Firm Registration No:117366W/W- 100018) have been appointed as Statutory Auditors of the Company as per themembers' approval at the 66th AGM dated September 28 2018 to hold office from theconclusion of 66th AGM until the conclusion of 70th AGM of the Company. The StatutoryAuditors have issued Auditors' Reports with unmodified opinion on the Audited FinancialStatements (Standalone and Consolidated) for FY 2020-21.
SECRETARIAL AUDIT REPORTS AND CERTIFICATE
Mr. Pradeep Purwar (Membership No. FCS-5769) Proprietor of Pradeep Purwar andAssociates Company Secretaries (Secretarial Auditor') was appointed to conduct theSecretarial Audit of the Company for FY 2020-21 as per the provisions of Section 204 ofthe Act read with Rule 9 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 and regulation 24A of Listing Regulations.
The Secretarial Auditor has submitted:
(a) an unqualified Secretarial Audit report; and
(b) a certificate confirming that none of the directors on the board of the Companyhave been debarred or disqualified from being appointed or continuing as directors of theCompany by any statutory authority which are annexed to this Board's report as AnnexureIV and Annexure V and forms part of this Board's report.
The Secretarial Compliance Report for FY 2020-21 has been filed with the BSE Limitedwithin the statutory time period.
In accordance with the provisions of sub-section (1) of section 148 of the CompaniesAct 2013 read with Companies (Audit and Auditors) Rules 2014 (as amended from time totime) the Company is required to maintain the cost records and conduct the cost audit inrespect of applicable products manufactured by the Company.
In accordance with the above the Cost Audit report for the FY 2019-20 was filed withMinistry of Corporate Affairs (MCA) within the due date.
On the recommendation of the Audit Committee the Board of Directors appointed JoshiApte & Associates (Firm Registration No. 00240) as the Cost Auditor of the Company forthe FY 2021-22 to conduct the cost audit (including cost auditing standards) as aforesaid.
Pursuant to the provisions of sub-section (3) of Section 148 of the Act read withCompanies (Audit and Auditors) Rules 2014 (as amended from time to time) Members'consent is sought for payment of remuneration to the Cost Auditor for FY 2021-22 asmentioned in item no. 7 to the Notice of 69th AGM of the Company.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to provisions of sub-section (5) of Section 134 of the Act with respect toDirectors' Responsibility Statement for the year under review it is hereby confirmedthat:
(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 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 and ofthe profit and loss of the Company for that period;
(c) the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this 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 were operatingeffectively; and
(f ) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Pursuant to sub-section (3) of section 92 read with clause (a) of subsection (3) ofsection 134 of the Act the Annual Return as on March 31 2021 is available on theCompany's website at https://www. fermentabiotech.com/annual-returns.php
CODE FOR PREVENTION OF INSIDER TRADING
Policies and codes adopted by the Company pursuant to SEBI (Prohibition of InsiderTrading) Regulations 2015 as amended from time to time are displayed on the Company'swebsite at https:// fermentabiotech.com/policies.php
NOMINATION AND REMUNERATION POLICY
Pursuant to sub-section (4) of section 178 of the Act the Nomination and RemunerationPolicy (Remuneration Policy') of the Company is available on Company's website athttps://fermentabiotech. com/policies.php. The salient features of the Nomination andRemuneration Policy inter alia are:
(b) Matters to be recommended by the Committee to the Board
(c) Criteria for appointment of Director / KMP / Senior management
(d) Additional Criteria for Appointment of Independent Directors
(e) Appointment and Remuneration of Directors
(f) Policy on Board Diversity
(g) Appointment removal and Remuneration of KMP / Senior management and otheremployees of the Company
(h) Criteria for Evaluation of Independent Director and the Board
(i) Succession planning for appointment to the Board of Directors and SeniorManagement
(j) Directors' and Officers' (D & O) Liability Insurance.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of any loans or guarantees provided or investments made by the Company coveredunder the provisions of Section 186 of the Act during FY 2020-21 are as provided in thefinancial statements.
RELATED PARTY TRANSACTIONS
All related party transactions entered into during FY 2020-21 were on an arm's lengthbasis and in the ordinary course of business. During FY 2020-21 the Company has notentered into any material related party transaction. In view of this disclosure in formAOC-2 is not applicable. The brief details of the Company's policy on dealing with RelatedParty transactions (RPT Policy) are covered in Corporate Governance report. The RPT policyis available on Company's website at https://fermentabiotech.com/policies.php
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
Information as per clause (m) sub-section (3) of Section 134 of the Act read withCompanies (Accounts) Rules 2014 (as amended from time to time) forms part of this reportand is given in Annexure VI to this report.
CORPORATE GOVERNANCE REPORT
Pursuant to Regulation 34 read with Schedule V of SEBI Listing Regulations theCorporate Governance Report along with the Corporate Governance Certificate issued by Mr.Pradeep Purwar (Membership No. FCS-5769) Proprietor of Pradeep Purwar and AssociatesCompany Secretaries for the financial year 2021-21 is provided as Annexure III and formspart of this Report. Details of number of Board meetings composition of the AuditCommittee and establishment of Vigil Mechanism as required under the Act are provided inthe Corporate Governance Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Based on CSR Committee's recommendations the Board approved the Corporate SocialResponsibility Policy (CSR Policy') indicating the CSR activities to be undertakenby the Company monitoring the implementation of the framework of the CSR Policy andrecommending the amount to be spent on CSR activities. Annual report on CSR activities ofthe Company for FY 2020-21 including composition of the CSR Committee is provided inAnnexure VII to this Board's report and forms part of this Board's report.
BUSINESS RESPONSIBILITY REPORT
Business Responsibility Report as required under Regulation 34 of Listing Regulationsforms part of this Report and attached as Annexure VIII.
INITIATIVES AGAINST COVID-19
In compliance with the directions issued by the Government from time to time theCompany implemented various measures to contain the spread of Coronavirus Covid-19 andensure overall safety of its employees and stakeholders at large. The Company extended allnecessary assistance to its employees and families of employees in this regard. TheCompany provided work-from-home facility to its employees and wherever physical attendancewas required all safety measures precautions and protocols were adhered to in accordancewith the Government directives. The management of the Company was in regular communicationwith its employees in order to boost their morale and face the challenges brought by thesetough times.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
During FY 2020-21:
(i) There was no significant and material order passed by the Regulators or Courts orTribunals impacting the going concern status and Company's operations;
(ii) No application was made or any proceedings were pending under the Insolvency andBankruptcy Code 2016; and
(iii) Valuation related details for FY 2020-21 in respect of one time settlement ofloan from the Banks or Financial Institutions were not applicable.
During FY 2020-21 the Company has complied with the provisions of applicableSecretarial Standards issued by the Council of the Institute of Company Secretaries ofIndia and approved by the Central Government.
DETAILS OF SHARES IN DEMATERIALISATION (DEMAT) SUSPENSE ACCOUNT/ UNCLAIMED SUSPENSEACCOUNT
Pursuant to Regulation 34 read with Schedule V of SEBI Listing Regulations the detailsof the shares in the Dematerialisation Suspense Account/ Unclaimed Suspense Account are asfollows:
|Aggregate number of shareholders and the outstanding shares in the Suspense Account lying at the beginning of the year (01.04.2020) ||Number of shareholders who approached the Company for transfer of shares from Suspense Account during the year ||Number of shareholders to whom shares were transferred from Suspense Account during the year ||Aggregate number of shareholders and the outstanding shares in the Suspense Account lying at the end of the year (31.03.2021) ||That the voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares. |
|292 number of shareholders and 138018 Equity Shares of RS 5 each ||2 ||1 ||313 number of shareholders and 140699 Equity Shares of RS 5 each ||140699 Equity Shares |
The Board of Directors would like to express its appreciation to the employees of theCompany at all levels members bankers financial institutions regulatory bodies andother business associates for their support during the year under review. The Board ofDirectors also expresses its deepest gratitude to all Covid warriors all across.
Statements in this report including Management Discussion and Analysis describing theCompany's objectives projections estimates expectations or predictions and/or in thisreport may be forward-looking statements' within the meaning of applicable laws andregulations. The actual results may differ materially from those expressed in thestatements.
| ||For and on behalf of the Board of Directors |
| ||Sanjay Buch |
| ||Chairman |
| ||(DIN: 00391436) |
|June 29 2021 Thane || |
|Registered Office: || |
|A -1501 Thane One DIL Complex || |
|Ghodbunder Road Majiwada || |
|Thane (West) 400 610 || |
|Maharashtra India. || |