We have pleasure in presenting the Fifteenth Annual Report together with the AuditedFinancial Statements of the company for the Financial Year ended 31st March 2018.
Standalone Profit After Tax for the year was Rs. 2128.14 Lakhs as against Rs. 2112.47Lakhs for 2016-17 an increase of 0.75 %.
Earnings per share of Rs. 2 was Rs. 1.91 for the year as against Rs. 1.90 for 2016-17an increase of 0.52 %.
Consolidated Profit after Tax for the year was Rs. 2396.64 Lakhs as against Rs. 2906.79Lakhs for 2016-17 a decrease of 17.55 %.
2. FINANCIAL RESULTS
(Rs. in Lakhs)
| || |
| ||Year ended 31-03-2018 ||Year ended 31-03-2017 ||Year ended 31-03-2018 ||Year ended 31-03-2017 |
|Total Income ||9943 ||9214 ||14293 ||13440 |
|Less: Expenditure ||6929 ||6435 ||11418 ||10593 |
|Profits before Tax ||3014 ||2779 ||3392 ||3821 |
|Less: Income Tax Expense ||886 ||667 ||995 ||914 |
|Profit after Tax ||2128 ||2112 ||2397 ||2907 |
|Other Comprehensive Income (net of tax) ||1 ||(3) ||1 ||(3) |
|Total Comprehensive Income ||2129 ||2109 ||2397 ||2907 |
|Opening balance of Retained Earnings ||7020 ||5022 ||7808 ||5250 |
|Amount available for Appropriations ||9149 ||7131 ||10008 ||7825 |
|Interim Dividend including Tax ||223 ||111 ||342 ||131 |
|Closing Balance of Retained Earnings ||8926 ||7020 ||9736 ||7694 |
|Earnings per share (in Rs) Basic & diluted ||1.91 ||1.90 ||2.04 ||2.32 |
The above data has been extracted from the Standalone and Consolidated FinancialStatements prepared in accordance with the IndianAccounting Standards (Ind AS) as notifiedunder section 133 of the Companies Act 2013 read with Companies (Indian AccountingStandards Rules 2015) and the relevant provisions of the Act as applicable. Thesefinancial statements for the year ended 31st March 2018 are the first financialstatements of the Company prepared under Ind AS. A detailed note forming part of thefinancial statements explains the transition from previous GAAP to Ind AS and its effecton the performance and financial position.
The year under review was influenced by the after effects of demonetisation and theintroduction of the Goods and Services
Tax (GST) regime. The Company has faced the challenges upfront and the standalonerevenue showed an increase of over 7.5% on value basis in the backdrop of GST andDemonetization. The Company used this period to consolidate its production and marketinginfrastructure. The results are visible and the full impact would be visible in thecurrent year. The Company has made significant inroads into domestic as well as exportmarkets. It exports to over 40 countries and is a Star Export House.
4. SHARE CAPITAL
The paid-up equity share capital of the Company as on 31st March 2018 stood at Rs.222600000 comprising of 111300000 equity shares of Rs. 2/- each. During the yearunder review there was no change in the Share Capital of the Company.
The Board of Directors had at their meeting held on 14th February 2018 declared aninterim dividend of Rs. 0.20 paise on equity share of face value Rs. 2/- each. Further theBoard recommends that this Interim Dividend be treated as the Final Dividend.
The summary of performance of the subsidiary companies is provided below:
a. Foreign Subsidiaries :
Fineotex Malaysia Limited (FML) a Limited Company was incorporated in Labaun Malaysiain 2011. FML in turn has controlling interest in 3 other companies in Malaysia that haveestablished manufacturing and trading activities. These Companies are BT Biotex Sdn BhdBT Chemicals Sdn Bhd and Rovatex Sdn Bhd. The synergy of the businesses has helped all thecompanies. These investments will complete 7 years in June 2018.
Fineotex Specialities FZE was incorporated in the Region of UAE on 25th January 2015.
b. Indian Subsidiaries :
Manya Steels Private Limited is the only Indian subsidiary. It was acquired fordiversification. The Company would commence commercial operations in the future. It is nota material subsidiary as per the SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015
Pursuant to the provisions of Section 129(3) of the Companies Act 2013 a statementcontaining salient features of financial statements of subsidiary companies in Form AOC 1is attached to the Accounts. The separate audited financial statements in respect of eachof the subsidiary companies shall be kept open for inspection at the Registered Office ofthe Company during working hours for a period of 21 days before the date of the AnnualGeneral Meeting.
There have been no significant changes or commitments affecting the financial positionof the Company which has occurred after the Balance Sheet date and the date of adoption ofthe Board Report.
During the year under review and till the date of the Board Report there are nonematerial / significant orders passed by the regulators or appellate authorities that mayaffect the going concern status of the Company's future operations.
8. INTERNAL FINANCIAL CONTROLS
The Company has in place a well defined and adequate internal control system to ensureadherence to Company's policies assets are safeguarded and that transactions areaccurate complete and properly authorized prior to recording. Information provided tomanagement is reliable and timely and statutory obligations are adhered to. The internalcontrol system is supplemented by extensive internal audits.
9. CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company along with its subsidiaries - bothforeign and Indian - for the year ended 31st March 2018 form part of this Annual Report.The same are prepared as per the applicable Indian Accounting Standards (Ind AS) asnotified under section 133 of the Companies Act 2013 read with Companies (IndianAccounting Standards Rules) 2015 and the relevant provisions of the Act as applicable.
10. PUBLIC DEPOSITS LOANS AND ADVANCES
The Company has not accepted any deposits from the public or the shareholders duringthe year or in the previous year. Security Deposits have been taken from the customers asa security against dues for goods sold to them and are not in the opinion of the Board inthe nature of Public Deposits. Rent Deposit given to Subsidiary Company is disclosed inthe financial statements as required under the Indian Accounting Standards (Ind AS) andListing Agreements.
11. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS.
The Particulars of loans guarantees and investments under Section 186 of the CompaniesAct 2013 as at the end of the Financial Year 2017-18 are provided in the standalonefinancial statements and the same are also given in Annexure 1' forming partof this report.
12. RELATED PARTY TRANSACTIONS / CONTRACTS
All Related Party Transactions entered into during the year were on arm's length basisand were in the ordinary course of business. There are no materially significant relatedparty transactions made by the Company with Promoters Directors Key Managerial Personnelor other designated persons which may have a potential conflict with the interest of theCompany at large.
All Related Party Transactions are approved by the Audit Committee. Prior omnibusapproval is obtained from the Audit Committee in respect of transactions which arerepetitive in nature.
The shareholders have also given the approval to these contracts and transactions atthe 12th and 13 th Annual General Meeting of the Company.
Details of related party transactions are given in Annexure 2' giving thedetails as per AOC-2
The policy on Related Party Transactions as approved by the Board is available on thewebsite of the Company www.fineotex. com and may be accessed through the web linkhttp://fineotex. com/Investor-Relation.aspx.
Mrs. Ritu Gupta - A Non-Independent Non Executive Director of the Company has resignedfrom the Board with effect from 14th August 2018 due to her pre-occupation in otherengagements. Ms Aarti Jhunjhunwala has been appointed as an Additional Director witheffect from 14th August 2018 to fill in the casual vacancy caused by Mrs. Gupta'sresignation. She will retire at the conclusion of the ensuing 15 th Annual General Meetingand being eligible she offers herself for re-appointment. She is liable to retire byrotation. The Board has appointed Mrs. Jhunjhunwala as an Executive Director for a periodof 3 years. She is related to the Chairman & Whole-time Director of the Company.
14. BOARD MEETINGS
There has been no change in the Board of Directors or its Committees of the Companyduring the year. The Board of Directors of the Company met five times during the financialyear. The details of various Board Meetings are provided in the Corporate GovernanceReport.
Key Managerial Personnel (KMP)
The following have been designated as the Key Managerial Personnel of the Company asper the Companies Act 2013 read with the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014:
a) Mr. Surendrakumar Tibrewala - Chairman & Managing Director
b) Mr. Sanjay Tibrewala - Whole-Time Director & Chief Financial Officer
c) Ms. Raina D'Silva - Company Secretary (till 04/04/2018)
d) Ms. Pooja Kothari - Company Secretary (since 04/04/2018)
Particulars of Employees and related disclosures
None of the employees who were employed throughout the financial year was in receipt ofremuneration of more than Rs. 10200000 during the year ended 31st March 2018 nor wastheir remuneration in excess of that drawn by the Managing Director or Whole-timeDirector.
There were no employees employed for any part of the financial year 31st March 2018 inreceipt of remuneration more than Rs.850000 per month nor was their remuneration inexcess of that of Managing Director and Whole-time Director.
Disclosure with respect to the remuneration of Directors KMPs and employees asrequired under section 197 (12) of the Companies Act 2013 read with Rule 5 (1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are given in Annexure3' to this Report.
16. DECLARATION OF INDEPENDENT DIRECTORS
The Independent Directors have submitted their disclosures to the Board that theyfulfil all the requirements as stipulated in Section 149(7) of the Companies Act 2013 soas to qualify themselves to be appointed as Independent Directors under the provisions ofthe Companies Act 2013 and the relevant rules.
17. POLICY RELATING TO DIRECTORS KMP AND OTHER EMPLOYEES
In line with the principles of transparency and consistency your company has adoptedthe Nomination and Remuneration Policy which inter alia include criteria for determiningqualifications positive attributes and independence of a Director. The Remunerationpolicy is set out in the Annexure 4' to the Director's Report and is alsoavailable on the Company's website.
18. FAMILIARISATION PROGRAMME FOR THE INDEPENDENT DIRECTORS
In compliance with the requirements of the erstwhile Listing Agreement with the stockexchange (Listing Agreement) and SEBI (Listing Obligation and DisclosureRequirements) Regulations 2015 the Company had conducted a Familiarization Program on16th February 2018 for the Independent directors to familiarize them with the Companytheir roles rights responsibilities in the Company nature of the industry in which theCompany operates entitlement of sitting fees to independent directors etc. The details ofsuch programme is available on the website of the Companyhttp://fineotex.com/Investor-Relation. aspx#InvestorRelation.
19. BOARD EVALUATION
Pursuant to the provision of the Companies Act 2013 and Regulations 17 (10) and25(4)(a) of the Listing Regulations the Nomination and Remuneration Committee formulateda framework containing inter-alia the criteria for performance evaluation of the entireBoard of Directors of the Company including independent directors. The performanceevaluation of Audit Committee was also carried out.
The Evaluation of Board and its findings were shared by the Chairman individually withthe Board Members. The Directors expressed their satisfaction with the evaluation process.
20. AUDITORS AND AUDIT REPORT
M/s. UKG Associates the auditors of the Company bearing ICAI Firm Registration No.123393W were appointed at the 11th General Meeting as Auditors for a period of fiveyears - i.e. till the conclusion of 16th Annual General Meeting to be held in 2019.
M/s. UKG Associates have confirmed their eligibility and qualification required underSections 139 141 and other applicable provisions of the Companies Act 2013 and Rulesissued there under (including any statutory modification(s) or re- enactment(s) thereoffor the time being in force).
The Auditors' Report for the financial year ended 31st March 2018 on the financialstatements of the Company is a part of this Annual Report. The Auditors Report for thefinancial year ended
31st March 2018 does not contain any qualification reservation or adverse remark.
21. COST ACCOUNTING RECORDS AND COST AUDIT
With the notification of Companies (Cost Records and Audit) Rules 2014 the Company isadvised that it is not liable to Cost Audit since the turnover as per standalone financialstatements of the Company is below Rs. 100 crores.
22. SECRETARIAL AUDIT
As per Section 204 of the Companies Act 2013 and Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 it is mandatory for the Listed Companylike yours to have the secretarial records audited. The Board of Directors had appointedHS Associates Company Secretaries as Secretarial Auditors for 2018-19.
The Secretarial Audit Report is annexed herewith as Annexure 5'.
The Secretarial Audit Report for 2017-18 does not contain any qualificationreservation or adverse remark.
23. CORPORATE SOCIAL RESPONSIBILITY
In compliance with the requirements of section 135 of the Companies Act 2013 read withCompanies (Corporate Social Responsibility) Rules 2014 mandates that your Company spendsat least 2% of its average last 3 years net profit after tax on Corporate SocialResponsibility (CSR) Activities and explained therein. This was the fourth year ofcompliance for your Company the Company has formed a Committee which has gone through therequirements and decided to carry out the same through the Trust who carry out theseactivities. The Company had to Spend Rs. 37.06 Lakhs in 2017-18. However it has spent Rs.38 Lakhs till 31st March 2018.
Details of CSR is annexed herewith as Annexure 6'
24. RISK MANAGEMENT COMMITTEE
As per Regulation 21 of (Listing Obligation and Disclosure Requirements) Regulation2015 the provisions of Risk Management Committee is not applicable for your Company.However the management of the Company is determining various aspects so as to be able tominimise the risk in all spheres of the Company's business from finance human resourcesto business strategy growth and stability.
25. AUDIT COMMITTEE
The details pertaining to composition of audit committee are included in the CorporateGovernance Report which forms a part of this Report.
26. WHISTLE BLOWER POLICY/VIGIL MECHANISM
The Company has established a vigil mechanism for Directors and employees to reporttheir genuine concerns details of which have been given in the Corporate GovernanceReport annexed to this Report. The copy of the Policy is available on the website of theCompany and may be accessed through the web link http://fineotex.com/Investor-Relation.aspx#InvestorRelation No complaints/suggestions werereceived during the year.
27. HUMAN RESOURCES
The Company has 84 employees at the year end including Whole time Director. We considerour employees as our most valuable asset and have been working towards keeping themengaged and inspired. The current workforce structure has a good mix of employees as alllevels. The Company is aware that the success of its business depends upon its technicalexpert's cocoordinating with research and development staff on the one hand and marketingon the other. Necessary training and orientation is provided to our employees to equipthem in providing productive and committed results.
28. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS/ OUTGO
The Information on conservation of energy technology absorption and foreign exchangeearnings and outgo as required to be disclosed pursuant to the provisions of Section134(3)(m) of the Companies Act 2013 read with Rule 8 of the Companies (Accounts) Rules2014 is given to the extent applicable in Annexure A' forming part of thisreport.
29. DISCLOSURE UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013. Internal Complaints Committee has been set up to redress complaints receivedregarding sexual harassment. All employees (permanent contractual temporary &trainees) are covered under the policy.
The following is a summary of sexual harassment complaints and disposed off during theyear 2017-18
No of Complains received: NIL
No of Complaints disposed off: NIL
30. MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 (3) of the SEBI (LODR) Regulations 2015 on the operations of theCompany as prescribed under Schedule V is presented in a separate section forming part ofthe Annual Report Annexed as Annexure B'.
31. CORPORATE GOVERNANCE
Your Company would strive to set and achieve appropriate Corporate Governancepractices. In accordance with the requirements of Schedule V read with Regulation 34(3) ofSEBI (Listing Obligation and Disclosure Requirements) Regulations 2015 with the StockExchange a report on the status of compliance of corporate governance norms is alsoattached as Annexure C'. A certificate from the Statutory Auditors of theCompany confirming compliance with the conditions of Corporate Governance as stipulatedin the Listing Regulations forms part of the Annual Report.
32. OPERATIONS & ECONOMIC SCENARIO
The economy has stabilized after the introduction of Goods & Services Tax (GST)which was introduced from 1st July 2017. The outlook is positive and our Company hasadapted well in this scenario. There has been 7 % rise in sales in spite of cautiousapproach in the economy prior to and after the GST came into force. The Company wascautious about the emerging situation and the teething problems in the new regimeunfolded. The Company continues to remain vigilant to face the new challenges.
The Company's thrust continues to concentrate on new markets and pioneering newproducts to enhance the operational efficiency of the customers. The Company hasstrengthened its human recourses to tackle the needs of the customers with entrepreneurialzeal. This commitment is total and coupled with its focused drive to achievegrowth through better management of both materials and overheads. The Company has recordedan increase in turnover of 7% on standalone basis while the consolidate turnover showed amoderate rise due to more efforts on development of products. This will show results inthe coming quarters.
The sales were affected due to certain major monetary decisions taken by thegovernment. There were teething problems. The Company target exports whichresulted in additional earnings of over 1.13%. The exports contribute over 1.42% of itsoperations on a standalone basis. The Company has also reached an advance stage inproduction of products which would foray the Company's operations in to new sector therebywidening and diversifying its activities.
33. DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and explanation and information obtained bythem and as required under Section 134(3)(c) of the Companies Act 2013 your Directorsconfirm that:
(i) in the preparation of the Annual Accounts the applicable accounting standards havebeen followed along with proper explanations relating to material departure if any;
(ii) they have selected such accounting policies as mentioned in Note 2 to the Notes toFinancial Statements and applied them consistently and made judgements and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company at the end of the financial year and of the profit of the Company for thatperiod;
(iii) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(iv) they have prepared the annual accounts on a going concern basis ;
(v) the proper internal controls were in place and that the financial controls wereadequate and were operating effectively and
(vi) the systems to ensure compliance with the provisions of all applicable laws werein place and were adequate and operating effectively.
34. EXTRACT OF ANNUAL RETURN
Pursuant to sub-section 3(a) of section 134 and sub-section (3) of section 92 of theCompanies Act 2013 read with Rule 12(1) of the Companies (Management and Administration)Rules 2014 an extract of the Annual Return as on 31st March 2018 in Form No. MGT 9 isattached herewith as Annexure 7' and forms part of this Report.
Your Directors place on record their sincere appreciation to the Central Governmentthe State Governments all its investors stakeholders & bankers all the businessassociates for the cooperation and support extended to the Company. Your Directors alsowish to place on record their deep appreciation to the employees for their hard workdedication and commitment extended to it throughout the year.
For and on behalf of the Board
|Surendrakumar Tibrewala ||Sanjay Tibrewala |
|(Chairman & Managing Director) ||(Executive Director) |
|00218394 ||00218525 |
|Place : Mumbai || |
|Dated: 14-August-2018 || |