Your Directors take the great pleasure in presenting the Seventeenth Annual Report onthe business and operations of the Company together with the Audited Financial Statementsfor the financial year ended March 31 2019.
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र in lakhs
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|Particulars ||2018-19 ||2017-18 ||2018-19 ||2017-18 |
|REVENUE & PROFITS || || || || |
|Total Revenue from Operations ||104397.20 ||86513.25 ||106033.28 ||86466.10 |
|Profit before Interest Tax & Depreciation ||24248.17 ||18035.70 ||25007.04 ||17438.62 |
|Less: Interest & Finance Charges ||179.05 ||312.25 ||183.92 ||315.45 |
|Less : Depreciation ||1744.84 ||2003.92 ||1745.37 ||2004.41 |
|Profit for the year before Tax ||22324.28 ||15719.52 ||23077.75 ||15118.76 |
|Less: Provision for Taxation || || || || |
|- Current ||8000.00 ||5650.00 ||8089.35 ||5650.00 |
|- Deferred ||696.68 ||(81.98) ||636.64 ||(81.98) |
|Short (Excess) provision for earlier years ||726.23 ||18.01 ||726.23 ||18.01 |
|Net Profit/(Loss) after Tax ||12901.37 ||10133.50 ||13625.53 ||9532.74 |
|Other Comprehensive Income ||(318.88) ||(15.59) ||(318.88) ||(15.59) |
|Total Comprehensive Income ||12582.49 ||10117.91 ||13306.65 ||9517.15 |
|RETAINED EARNINGS || || || || |
|Opening Balance of Retained Earnings ||38190.39 ||31372.64 ||36978.32 ||30761.33 |
|Add: Profit for the year ||12901.37 ||10133.50 ||13625.53 ||9532.74 |
|Less: Appropriations: || || || || |
|Final Dividend ||2146.20 ||2299.50 ||2146.20 ||2299.50 |
|Corporate Dividend Tax on Dividend ||436.92 ||468.12 ||436.92 ||468.12 |
|Transferred to Other Reserve/Non Controlling Interest ||- ||548.13 ||4.56 ||548.13 |
|Balance as at end of the year ||48508.64 ||38190.39 ||48016.17 ||36978.32 |
For FY 2018-19 the Board of Directors has recommended a dividend of र 7/- perequity share i.e. 140% of nominal value of र 5/- each for the financial year 2018-19.If declared by the members at the ensuing Annual General Meeting (AGM') the totaldividend outgo during FY 2019-20 would amount to र 2146.20 lakhs excluding dividendtax. The said dividend shall be paid to those members whose name appears in the registerof beneficial owners/register of members as at the close of business hours on July262019.
TRANSFER TO RESERVES
The closing balance of the retained earnings of the Company for FY 2018-19 after allappropriation and adjustments was र 48508.64 lakhs.
During the year under review your Company reported a top-line growth of 21.92% overthe previous year. At Standalone level the Revenue from Operations (net off taxes)amounted to र 104397.20 lakhs as against र 85628.50 lakhs in the previousyear. The Operating Profit before Tax amounted to र 22324.28 lakhs as against र15719.52 lakhs in the previous year. The Net Profit for the year amounted to र12901.37 lakhs as against र 10133.50 lakhs reported in the previous year and totalcomprehensive income for the year amounted to र 12582.49 lakhs as against र10117.91 lakhs in the previous year. The Consolidated Revenue from Operations (net offtaxes) amounted to र 106033.28 lakhs as against र 85581.35 lakhs in theprevious year registering a growth of 23.90 %. The Consolidated Operating Profit beforeTax amounted to र 23077.75 lakhs as against र 15118.76 lakhs in the previousyear. The Consolidated Net Profit after Tax amounted to र 13625.53 lakhs as againstर 9532.74 lakhs in previous year and Consolidated Total Comprehensive Income for theyear amounted to र 13306.65 lakhs against र 9517.15 lakhs in previous year.
SHARE CAPITAL AND INITIAL PUBLIC OFFERING
During the year there was no change in the share capital of the Company. The Paid upshare capital of the Company as on March 31 2019 is र 1533.00/- lakhs divided into30659976 equity shares of र 5/- each. Pursuant to Initial Public Offer by way ofan offer for sale the Equity shares of the Company have been listed on BSE Ltd.(BSE') and National Stock Exchange of India Limited (NSE') with effect fromJuly 2 2018.
SUBSIDIARIES ASSOCIATE COMPANIES AND JOINT VENTURE
As on March 31 2019 the Company has two subsidiaries i.e. Fine Organics USA Inc. andFine Organics Europe BVBA 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.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements of the Company and its subsidiaries andassociates for FY 2018-19 are prepared in compliance with the applicable provisions of theAct and as stipulated under Regulation 33 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 Listing Regulations' as well as in accordance withthe Indian Accounting Standards notified under the Companies (Indian Accounting Standards)Rules 2015. The audited consolidated financial statements together with the Auditor'sReport thereon form part of this Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134 (3) (c) read with Section 134 (5) of the Companies Act 2013your Directors state that:
a) in the preparation of the annual accounts for the year ended March 31 2019 theapplicable accounting standards have been followed along with proper explanation relatingto material departures;
b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2019 and of the profit ofthe Company for that period;
c the directors had 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 had prepared the annual accounts on a going concern basis;
e) the directors had 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 provisions ofall 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 Director. During the periodunder review there has been no change in the Board of Directors. Key Managerial Personnelof the Company as on March 31 2019 are as follows:
|Prakash Kamat ||- Chairman and Whole Time Director |
|Mukesh Shah ||- Managing Director |
|Jayen Shah ||- Whole Time Director and Chief Executive Officer |
|Tushar Shah ||- Whole Time Director and Chief Financial Officer |
|Bimal Shah ||- Whole Time Director |
|Pooja Gaonkar ||- Company Secretary |
Retire by rotation
Mr. Jayen Shah retires by rotation and being eligible offers himself forre-appointment.
Declarations by Independent Directors
Pursuant to the provisions of Section 149 of the Act the independent directors havesubmitted declarations that each of them meet the criteria of independence as provided inSection 149(6) of the Act along with Rules framed there under and Regulation 16(l)(b) ofthe Listing Regulations.
Five meetings of the Board were held during the year under review. The details of theBoard meetings and the attendance of Directors thereat are provided in the CorporateGovernance Report forming part of the Annual Report.
COMMITTEES OF THE BOARD
In order to strengthen its functioning the Board of Directors has constituted thefollowing Committees as per the requirement of the Companies Act 2013 and the ListingRegulations:
1. Audit Committee
2. Nomination & Remuneration Committee
3. Stakeholders' Relationship Committee
4. Corporate Social Responsibility Committee
Details of the Committees along with their charter composition and meetings heldduring the year are provided in the Corporate Governance Report which forms part of thisAnnual Report.
ANNUAL EVALUATION OF DIRECTORS COMMITTEES AND BOARD
Pursuant to the provisions of the Companies Act 2013 and Rules made there under readwith the Listing Regulations the evaluation of Directors Committees and Board as a wholewas carried out on the basis of various criteria as recommended by the Nomination andRemuneration Committee of the Company (NRC').
The NRC committee carried out the evaluation of the Board its committees and each ofthe Directors after seeking inputs from all directors on the basis of criteria such as thecomposition of committees effectiveness of committee 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 NRC reviewed the performance of the Board its Committees and of the Directors. Thesame was discussed in the Board Meeting that followed the meeting of the IndependentDirectors and NRC at which the feedback received from the Directors on the performance ofthe Board and its Committees was also discussed.
NOMINATION REMUNERATION POLICY
The Company has in place a Nomination Remuneration Policy for the Directors KMP andother employees pursuant to the provisions of the Act and the Listing Regulations which isavailable 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 in place adequate internal financial controls with reference to theFinancial Statements commensurate with the size scale and nature of its operations. Thesehave been designedtoprovide reasonable assurance with regard to recording and providingreliable financial and operational information complying with applicable accountingstandards safeguarding of its assets prevention and detection of errors and frauds. TheCompany uses an established ERP system to record day to day transactions for accountingand financial reporting. The details of internal control system are given in theManagement Discussion and Analysis Report which forms part of this Annual Report.
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 haveconfirmed that they are not disqualified from continuing as 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 is unmodified i.e. it does not contain any qualificationreservation or adverse remark.
II. Cost Auditors:
M/s Y. R. Doshi & Associates Cost Accountants in practice were appointed as theCost Auditors of the Company to audit the cost records for the Financial Year 2019-20. Interms of Rule 14 of the Companies (Audit and Auditors) Rules 2014 the remunerationpayable to the Cost Auditor is required to be ratified by the shareholders. Accordingly aresolution seeking ratification by the members for the remuneration is listed as Item No.4 of the AGM Notice as 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 to undertake the Secretarial Auditof the Company for Financial year 2019-20. Further the Report of the Secretarial Auditorfor the Financial Year 2018-19 is appended as "Annexure A" to thisReport.
The Secretarial Audit Report does not contain any qualification reservation or adverseremark.
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"
Pursuant to provisions of Section 143 (12) of the Companies Act 2013 the StatutoryAuditors have not reported any incident of fraud to the Audit Committee during the yearunder review.
The Board of Directors of the Company has formed a Risk Management Committee to frameimplement and monitor the risk management plan for the Company. The Committee isresponsible for monitoring and reviewing the risk management plan and ensuring itseffectiveness. Major risks identified by the Company's business and functions aresystematically addressed through mitigating actions on a continuing basis.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Particular of loans guarantees and investments covered under Section 186 of theCompanies Act 2013 form 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. The information on transactions with related parties pursuant to Section134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules 2014 are givenin "Annexure B" in Form No. AOC-2 and the same forms part of this report.
CORPORATE SOCIAL RESPONSIBILITY
The Board of Directors has constituted Corporate Social Responsibility Committee (CSRCommittee) consisting of members viz. Mr. Jayen Shah (Chairman) Mr. Mukesh Shah Mr.Tushar Shah Mr. Kaushik Shah Mr. Prakash Apte. The Corporate Social ResponsibilityPolicy (CSR Policy) indicating the activities to be undertaken by the Company is availableat https://www.fineorganics.com/ investor-relations/corporate-governance/policies.
Report on Corporate Social Responsibility as Per Rule 8 of Companies (Corporate SocialResponsibility Policy) Rules 2014 is prepared and the same is enclosed as "Annexure- C" to this Report.
EXTRACT OF ANNUAL RETURN
As per the requirements of Section 92(3) of the Act and Rules framed thereunder theextract of the annual return for FY 2018-19 is given in "Annexure D" inthe prescribed Form No. MGT-9 which is a part of this report. The same is available onhttps://www.fineorganics.com/investor- relations .
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 E" 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 the Report and accounts are being sent to the members and others entitled theretoexcluding the information on employees particulars which is available for inspection bymembers at the Registered office of the Company during business hours on working days ofthe Company. If any member is interested in obtaining a copy thereof such member maywrite to the Company Secretary in this regard.
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
The Management Discussion and Analysis Report for the year under review pursuant toRegulation 34 of the Listing Regulations is presented in a separate section forming anintegral 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
In accordance with Regulation 43A of Listing Regulations it is mandatory for the top500 listed entities based on market capitalisation as on 31 March of every financialyear to formulate a Dividend Distribution Policy (Policy') and disclose the same inthe Annual Report and on the website of the Company. Accordingly the Board of Directorsof the Company has adopted the Policy which endeavours for fairness consistency andsustainability while distributing profits to the shareholders. The Policy is available onthe Company's website under the Investors' section athttps://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 ofRegulation 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 at https://www.fineorganics .com/investor-relations/corporate-governance/policies.
PREVENTION OF SEXUAL HARASSMENT
The Company has zero tolerance towards sexual harassment at the workplace and towardsthis end has adopted prevention of Sexual Harassment Policy in line with the provisionsof Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013 and the Rules thereunder. The Policy aims to provide protection to employees at theworkplace and prevent and redress complaints of sexual harassment and for mattersconnected or incidental thereto. All employees (permanent contractual temporarytrainees) are covered under the said policy. An Internal Complaints Committee has alsobeen set up to redress complaints received on sexual harassment. The Company has notreceived any complaint of sexual harassment during the Financial Year 2018-19.
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 "AnnexureF" to this report.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on the following items during the year underreview:
1. Deposits covered under Chapter V of the Act;
2. Material changes and/ or commitments that could affect the Company's financialposition which have occurred between the end of the financial year of the Company and thedate of this report;
3. Significant or material orders passed by the Regulators or Courts or Tribunalswhich would impact the going concern status and Company's operations in future;
4. Non-exercising of voting rights in respect of shares purchased directly by employeesunder a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) of Companies(Share Capital and Debentures) Rules 2014;
5. Receipt of any remuneration or commission from any of its subsidiary companies bythe Managing Director or the Whole-time Directors of the Company
Your Directors wish to place on record their appreciation for continued support andcooperation by the customers shareholders suppliers investors bankers businesspartners/associates financial institutions and regulatory bodies and other stakeholders.Your Directors would also like to take this opportunity to express their appreciation tothe hard work and dedicated efforts put in by the employees of the Company.
| ||For and On Behalf of the Board |
| ||Prakash Kamat |
|Mumbai May 27 2019 ||Executive Chairman |