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Fine Organic Industries Ltd.

BSE: 541557 Sector: Industrials
NSE: FINEORG ISIN Code: INE686Y01026
BSE 00:00 | 21 Jan 3769.40 17.60
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3791.90

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NSE 00:00 | 21 Jan 3771.30 20.00
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3740.00

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OPEN 3775.00
PREVIOUS CLOSE 3751.80
VOLUME 1922
52-Week high 4040.00
52-Week low 2130.00
P/E 81.50
Mkt Cap.(Rs cr) 11,557
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 3775.00
CLOSE 3751.80
VOLUME 1922
52-Week high 4040.00
52-Week low 2130.00
P/E 81.50
Mkt Cap.(Rs cr) 11,557
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Fine Organic Industries Ltd. (FINEORG) - Director Report

Company director report

Dear members

The board of directors are pleased to submit its report on the performance of thecompany along with the audited standalone as well as consolidated financial statements forthe financial year ended march 31 2021.

Financial summary and state of affairs:

Particulars

Standalone

Consolidated

2020-21 2019-20 2020-21 2019-20
Revenue & profits
Total revenue from operations 112129.01 102622.30 113321.84 103807.97
Profit before interest tax & depreciation 20909.36 25659.14 21504.80 25559.83
Less : interest & finance charges 608.99 478.12 612.98 482.11
Less : depreciation 4676.49 3465.07 4676.91 3465.53
Profit for the year before tax 15623.88 21715.95 16214.91 21612.19
Less : provision for taxation
- current 4320.00 5609.49 4380.61 5666.23
- deferred (190.89) (543.71) (201.42) (534.05)
Short (excess) provision for earlier years 1.59 - 1.59 -
Net profit/(loss) after tax 11493.18 16650.17 12034.13 16480.01
Other comprehensive income 232.90 (351.58) 232.90 (351.58)
Total comprehensive income 11726.08 16298.59 12267.03 16128.43
Retained earnings
Opening balance of retained earnings 61092.96 48508.64 60428.45 48016.17
Add: profit for the year 11493.18 16650.17 12034.13 16480.01
Less: appropriations:
Final dividend 919.76 3372.60 919.76 3372.60
Dividend distribution tax - 693.25 - 693.25
Transferred to other reserve / non-controlling interest - - 1.83 1.88
Balance as at end of the year 71666.38 61092.96 71540.99 60428.45

The financial results have been further discussed in detail in the managementdiscussion and analysis report which forms a part of this annual report. The standalone aswell as the consolidated financial statements have been prepared in accordance with theindian accounting standards (‘ind as').

Share capital:

During the year under review there was no change in the share capital of the company.The paid-up share capital of the company as on march 31 2021 is rs.1533.00/- lakhsdivided into 30659976 equity shares of rs.5/- each.

Dividend:

Your directors are pleased to recommend a final dividend of rs.11/- per equity share ofthe face value of rs.5/- each fully paid-up for the financial year ended march 31 2021which includes one-time special dividend of rs.5/- per equity share on account of ourgolden jubilee year. If the dividend as recommended above is declared by the members atthe ensuing annual general meeting (‘agm') the total outflow towards dividend onequity shares for the year would be rs.3372.6 lakhs. The dividend will be paid to thosemembers whose names appear in the register of beneficial owners/register of members as atthe close of business hours on august 17 2021.

Transfer to reserves:

The closing balance of the retained earnings of the company for the financial year2020-21 after all adjustments was rs.71666.38/- lakhs.

29 subsidiaries associate companies and joint ventures:

As on march 31 2021 the company has two subsidiaries i.e. Fine organics (usa) inc.And fine organics europe bv and two joint venture companies i.e. Fine zeelandia privatelimited and fineadd ingredients gmbh. Pursuant to the provisions of section 129 (3) of theact a statement containing the salient features of financial statements of the company'ssubsidiaries and joint ventures in form aoc-1 is attached to the financial statements ofthe company. On may 6 2021 your company has executed joint venture agreement witholeofine organics thailand co. ltd. (oft) and oleofine organics sdn bhd. (ofm). The jointventure agreement was executed for the incorporation of a new joint venture company (jvc)in thailand for the purpose of carrying on the business of manufacturing of specialitychemical products and supplying exporting and distribution of such products.

The separate financial statements of the subsidiaries are also available on the websiteof the company at www.fineorganics. Com and will also be made available for inspection bythe members at the registered office of the company during business hours on all workingdays as required under section 136 of the act. Any member desirous of obtaining a copy ofthe said financial statements may write to the company secretary at the registered officeof the company.

Directors' responsibility statement:

Pursuant to section 134 (3) (c) read with section 134 (5) of the companies act 2013the board of directors to the best of its knowledgeandabilityconfirmthat:

a) in the preparation of the annual accounts for the year ended march 31 2021 theapplicable accounting standards have been followed and there are no 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 as on march 31 2021 and of the profit ofthe 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 financialcontrols are adequate and were operatingeffectively; and

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

Directors and key managerial personnel:

Board of directors of the company comprises 5 (five) executive directors and 5 (five)non executive - independent directors including one woman independent director. During theperiod under review there has been no change in the board of directors.

Mr. Bimal shah retires by rotation and being eligible offers himself forre-appointment. A resolution seeking shareholders' approval for his re-appointment formspart of the notice. The brief details of mr. Bimal shah who is proposed to bere-appointed as required under secretarial standard 2 ("ss-2") andregulation 36 of the sebi (listing obligations and disclosure requirements) regulations2015 as amended (the "listing regulations") is being provided in thenotice convening the annual general meeting of the company.

During the year under review the non-executive independent directors of the companyhad no pecuniary relationship or transactions with the company other than sitting feescommission and reimbursement of expenses if any. Pursuant to the provisions of section 203of the act the key managerial personnel (‘kmp') of the company as on march 31 2021are: mr. Prakash kamat chairman and whole time director; mr. Mukesh shah managingdirector; mr. Jayen shah whole time director and chief executive officer; mr. Tusharshah whole time director and chief financial officer; mr. Bimal shah whole time directorand ms. Pooja lohor company secretary.

Number of board meetings:

The board met four times during the year under review. The maximum gap between twoboard meetings did not exceed 120 days except in case of last board meeting of financialyear 2019-20 and first meeting of financial year 2020-21 and it was during the firstoutbreak of covid-19 virus when section 144 of indian penal code was imposed in the wholecountry. However a one-time relaxation was granted by the ministry of corporate affairsas per general circular no. 11/2020 dated march 24 2020 (details provided in thecorporate governance report) indicating that the maximum interval between two consecutivemeetings of the board can be up to one hundred and eighty days in the wake of the covid-19pandemic. The details of the board meetings and the attendance of directors are providedin the corporate governance report forming part of the annual report.

Committees of the board:

As required pursuant to the act and the listing regulations the company has formed allthe statutory committees namely the audit committee the nomination and remunerationcommittee the stakeholders' relationship committee the corporate social responsibilitycommittee and the risk management committee. In addition the company has an executivecommittee. There have been no instances where the board did not accept the recommendationsof the audit committee. Detailed information of these committees and relevant informationfor the year under review are set out in the corporate governance report.

Declaration by independent directors:

Pursuant to the provisions of section 149(7) of the act the independent directors havesubmitted declarations that each of them meets the criteria of independence as provided insection 149 (6) of the act along with rules framed there under and regulation 16 (1) (b)of the listing regulations.

Annual evaluation of directors committees and board:

Pursuant to the applicable provisions of the act and sebi listing regulations theboard has carried out an annual evaluation of its own performance performance of thedirectors as well as the evaluation of the working of its committees. The nomination andremuneration committee of the company (‘nrc') has defined the evaluation criteriaprocedure and time schedule for the performance evaluation process for the board itscommittees and directors. The performance of the board and its functioning were evaluatedbased on various criteria including expertise and experience of the board industryknowledge diversity board meeting procedure board development succession planningetc. All committees of the board were evaluated based on various criteria including theirfunction and duties periodical reporting to the board along with their suggestions andrecommendations and procedure of the meetings etc.

In a separate meeting of independent directors performance of non-independentdirectors the board as a whole and the chairman of the company was evaluated by theindependent directors. The evaluation of chairperson was done based on criteria whichamong others included managing relationship with shareholders and employees boardmanagement and leadership qualities. The performance of all executive directors as well asindependent directors have been evaluated by whole board based on the criteria whichincludes participation at board/committee meetings managing relationships with otherfellow members and senior management personal attributes like ethics and integrity etc.

The board and nrc reviewed the performance of the board its committees and of thedirectors. The same was discussed in the board meeting and the feedback received from thedirectors on the performance of the board and its committees was also discussed. The boardwas satisfied with the performance of the board board committees and individualdirectors.

Nomination and remuneration policy:

The company has in place a nomination and remuneration policy for the directors kmpand other employees pursuant to the provisions of the act and the listing regulationswhich is available on website of the company i.e. Https://www.Fineorganics.com/investor-relations/corporate-governance/ policies.

Internal financial control system and their adequacy:

Your company has an adequate system of internal financial controls that is commensuratewith the size scale and nature of its operations. These have been designed to providereasonable assurance with regard to recording and providing reliable financial andoperational information complying with applicable accounting standards safeguarding ofits assets prevention and detection of errors and frauds timely preparation of reliablefinancial information your company has adopted the policies and procedures for ensuringthe orderly and efficient conduct of the for more details refer to the ‘internalcontrol systems' section in the management discussion and analysis report which formspart of this annual report.

Auditors:

I. Statutory auditors

m/s. B y & associates chartered accountants mumbai (firm registration no.123423w) were appointed as the statutory auditors of the company to hold office for a termof 5 years from the conclusion of the 15th annual general meeting held on july10 2017 until the conclusion of the 20th annual general meeting of the companyto be held in the year 2022. As per the provisions of section 139 of the act they haveconfirmedthat they are not disqualified from continuing as the auditors of the company.Further the report of the statutory auditors along with notes to schedules is a part ofthe annual report. The auditors' report does not contain any qualification reservation oradverse remark.

Ii. Cost auditors

m/s y. R. Doshi & associates cost accountants mumbai (firm registration no.000286) have been appointed as the cost auditors of the company to audit the cost recordsfor the financial year 2021-22. In terms of rule 14 of the companies (audit and auditors)rules 2014 the remuneration payable to the cost auditors is required to be ratifiedbythe shareholders. Accordingly a resolutionseekingratificationby the members for theremuneration is listed as item no. 5 of the agm notice as an ordinary resolution.

Iii. Secretarial auditors

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 ks & associates - company secretaries mumbai (certificate of practicenumber 5163) to undertake the secretarial audit of the company for the financial year2021-22. Further the report of the secretarial auditor for the financial year 2020-21 isappended as "annexure a" to this report. The secretarial audit reportdoes not contain any r qualification rvation or adverse remark.

Details in respect of frauds reported by auditors under sub-section (12) of section 143"other than those which are reportable to the central government":

During the year under review the statutory auditors cost auditors and secretarialauditors have not reported any instances of frauds committed in the company by itsofficers or employees to the audit committee under section 143(12) of the act details ofwhich needs to be mentioned in this report.

Risk management framework:

Risk management is an integral part of the company's operations. The board of directorshas constituted risk management committee (rmc) to identify elements of risk in differentareas of operations and to develop policy for actions associated to mitigate the risks.Mechanisms for identification and prioritization of risks include scanning the businessenvironment and continuous monitoring of internal risk factors. Major risks identified bythe company's business and functions are systematically addressed through mitigatingactions on a continuing basis. A detailed note on risk management is given under financialof the management discussion and analysis of this annual report.

Particulars of loans guarantees or investments:

Particular of loans guarantees and investments covered under section 186 of thecompanies act 2013 forms part of the notes to the standalone financial statementsprovided in this annual report.

Related party transactions:

None of the transactions with related parties falls under the scope of section 188 (1)of the act. Accordingly the disclosure of related party transactions as required undersection 134 (3) (h) of the act read with rule 8 (2) of the companies (accounts) rules2014 in form no. Aoc-2 is not applicable to the company for the f.y. 2020-21 and hencedoes not form part of this report.

Corporate social responsibility:

Your company has developed a csr framework in line with section 135 of the companiesact 2013 read with schedule vii thereto which focuses on education healthcare womenempowerment and environment conservation etc. The board of directors has constitutedcorporate social responsibility policy of the company and it is available athttps://www.fineorganics.com/investor-relations/corporate-governance/policies.

The report on corporate social responsibility (csr) including constitution of thecorporate social responsibility committee and activities undertaken during the financialyear 2020-21 as per rule 8 of companies (csr policy)

Amendment rules 2021 is enclosed as "annexure b" to this report.

Annual return:

As per the requirements of section 92 (3) of the act and rules framed thereunder theannual return for the financial year 2020-21 will be available onhttps://www.fineorganics.com/investor-relations/compliance/annual-general-meeting-documents.

Particulars of employees & managerial remuneration:

The information required under section 197 (12) of the companies act 2013 read withrule 5 (1) of the companies (appointment and remuneration of managerial personnel) rules2014 is attached as "annexure c" to this report. The statement containingparticulars of employees as required under section 197 of the companies act 2013 readwith rule 5 (2) of the companies (appointment and remuneration of managerial personnel)rules 2014 will be provided upon request. In terms of section 136 of the companies act2013 this report and accounts are being sent to the members and others entitled theretoexcluding the information on particulars of employees which is available for inspection bymembers at the registered office of the company during business hours on all working days.If any member is interested in obtaining a copy thereof such member may write to thecompany secretary in this regard.

Corporate governance:

In compliance with regulation 34 and other applicable provisions of the listingregulations a separate report on corporate governance along with the certificate ofcompliance from the secretarial auditor forms an integral part of this annual report.

Management discussion and analysis report:

Pursuant to regulation 34 of the listing regulations the management discussion andanalysis report capturing your company's performance industry trends and other materialchanges with respect to your company and its subsidiaries wherever applicable ispresented in a separate section forming an integral part of this annual report.

Business responsibility report:

A business responsibility report pursuant to regulation 34 (2) (f) of listingregulations is presented in a separate section forming an integral part of this annualreport.

Dividend distribution policy:

Pursuant to regulation 43a of the listing regulations the company has adopted adividend distribution policy setting out the parameters and circumstances that the boardwill take into account in determining the distribution of dividend to its shareholdersand/or retaining profits earned by the company. A policy is available on the website ofthe company and the web link thereto is:https://www.fineorganics.com/investor-relations/corporate-governance/policies.

Whistle blower policy and vigil mechanism:

In accordance with the provisions of section 177 (9) of the companies act 2013 andrequirements of regulation 22 of the listing regulations your company has a vigilmechanism which has been incorporated in the whistle blower policy for directors andemployees to report genuine concerns about unethical behaviour actual or suspected fraudor violation of code of prevention of insider trading. The whistle blower policy isuploaded on the website of your company athttps://www.fineorganics.com/investor-governance/policies.

Prevention of sexual harassment:

The company has zero tolerance towards sexual harassment at workplace and adoptedpolicy on prevention of sexual harassment in line with the provisions of sexualharassment of women at workplace (prevention prohibition and redressal) act 2013 and therules thereunder. The policy aims to provide protection to the employees at workplace andprevent and redress complaints of sexual harassment and for matters connected orincidental thereto. An internal complaints committee has also been set up to redresscomplaints received on sexual harassment. The company has not received any complaint ofsexual harassment during the financial year 2020-21.

Conservation of energy technology absorption foreign exchange earnings and outgo:

The information pertaining to conservation of energy technology absorption foreignexchange earnings and outgo as required under section 134 (3) (m) of the companies act2013 read with rule 8 (3) of the companies (accounts) rules 2014 is furnished in "annexured" to this report.

Material changes and commitments if any affecting the financial position of thecompany occurred between the end of the financial year to which this financial statementsrelate and the date of the report:

There are no material changes and commitments affecting the financial position of thecompany occurred between the end of the financial year to which these financial statementsrelate and the date of the report other than those mentioned under any section of thisannual report.

Deposits from public:

The company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet. Significant or material orders passed by the regulators or courts ortribunals which would impact the going concern status and company's operations in future:by the there are no significant regulators or courts or tribunals impacting the goingconcern status and the company's operations in future.

Pandemic:

The covid-19 pandemic is a worldwide crisis and has meant that the economies will haveto operate alongside the disease. While conducting its operations during this time thecompany strictly followed the guidelines issued by the local state and central governmentfor containment of the pandemic at its plants and offices.

The company has evaluated the possible impact of this pandemic on the businessoperations and the financial position of the company and based on its initial assessmentof the current indicators of the future economic conditions believes that there is nomaterial impact on the financial results of the company for the year ended march 31 2021.The company will continue to monitor any material change on its businessoperationsandfinancialposition resulting from the future economic conditions anduncertainty if any caused by the covid-19 pandemic.

Acknowledgements:

We thank for the continued support and co-operation by customers vendors investorbankers government and regulatory authorities and stock exchanges during the year underreview. The board of directors wish to place on record its deep sense of appreciation forthe committed services by all the employees of the company.

For and on behalf of the board

Prakash kamat

Executive chairman

Mumbai: may 27 2021

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