Your Directors have pleasure in presenting the 64th Annual Report onthe business and operations of the Company together with the Audited Financial Statementsfor the year ended 31 December 2020.
|Financial Highlights || ||(All Figures in Rs. Lakhs) |
|Particulars ||Accounting year ended 31-Dec-2020 ||Accounting year ended 31-Dec-2019 |
|Total Revenue from Operations ||25115.04 ||32252.39 |
|Operating Expenses ||(22415.06) ||(26869.78) |
|Earnings before interest tax depreciation and amortisation (EBITDA) ||2699.98 ||5382.61 |
|Finance Cost ||(0.07) ||(0.13) |
|Depreciation and amortisation expense ||(591.06) ||(419.70) |
|Profit Before Tax (PBT) ||2108.85 ||4962.78 |
|Total Tax Expense ||(565.17) ||(1509.49) |
|Profit for the Period (PAT) ||1543.68 ||3453.29 |
|Other Comprehensive Income net of tax ||(89.42) ||(83.03) |
|Total Comprehensive Income for the Year ||1454.26 ||3370.26 |
|Balance brought forward from previous year ||10879.10 ||9386.78 |
|Recognition of Share Based Payment ||- ||46.91 |
|Amount available for appropriation ||12333.36 ||12803.95 |
|Appropriations: || || |
|Interim Dividends ||319.32 ||957.97 |
|Final Dividend ||- ||638.65 |
|Tax on Dividends (Interim and Final) ||- ||328.23 |
|Total Retained Earnings ||12014.04 ||10879.10 |
Financial Year and Indian Accounting Standards (Ind-AS)
The Company follows the Calendar Year from 1st January to 31st Decemberas its Financial Year for drawing up its accounts under the Indian Accounting Standards(Ind-AS).
As on 31 December 2020 the paid-up share capital of the Company stoodat Rs. 63864590/- consisting of 6386459 equity shares of face value of Rs. 10 fullypaid-up. There was no change in the share capital during the year.
During the year one Interim Dividend was declared as given below:
|Particulars of Dividend ||1st Interim Dividend |
|Date of Declaration ||22 October 2020 |
|Record Date ||30 October 2020 |
|Dividend % ||50% |
|Dividend per share ||Rs. 5 |
Your Directors are pleased to recommend for approval of the Members aFinal Dividend of Rs. 10/- per share (i.e. 100%) on an Equity Share of Rs. 10/- eachfor the financial year ended 31 December 2020 taking the total dividend to Rs. 15 pershare (i.e. 150%) (previous year Rs. 15 per share i.e. 150%).
The Company paid out the total dividend for the financial year ended 31December 2020 which aggregated to Rs. 319.32 Lakhs as compared to Rs. 1924.85 Lakhsinclusive of dividend distribution tax paid in the year 2019.
Report on Corporate Governance Management Discussion & AnalysisReport and Business Responsibility Report
Pursuant to Regulation 34(3) read with Schedule V of the SEBI (ListingObligations And Disclosure Requirements) Regulations 2015 a separate section titledReport on Corporate Governance together with a Certificate from the Practicing CompanySecretary forms part of this Annual Report. The disclosure requirement laid down inSchedule V Section II under Clause IV of the Companies Act 2013 are covered in theReport of Corporate Governance under the title Remuneration Policy'.
Management Discussion and Analysis Report and Business ResponsibilityReport are also included as a part of this Annual Report.
Your Company does not have any subsidiary / subsidiaries within themeaning of Section 2 of the Companies Act 2013 ("Act"). Therefore a statementunder the provisions of Section 129(3) of the Act containing salient features of thefinancial statements of the Company's subsidiaries in Form AOC-1 is not attached as thesame is not applicable in the case of your Company.
The Company has not accepted any deposits from the public andaccordingly no amount was outstanding as on the date of the Balance Sheet.
Extract of the Annual Return
As required under Section 92(3) read with Section 134(3)(a) of theCompanies Act 2013 an extract of the Annual Return in Form No. MGT 9 at the financialyear ended 31 December 2020 has been uploaded on the website of the Company athttp://fosecoindia.com/View/AnnualReturn.aspx.
Delisting of the Company's Shares from the Bombay Stock Exchange
The Company's Equity Shares are listed on the Bombay Stock ExchangeLimited (BSE Limited) and the National Stock Exchange of India Limited. The Board ofDirectors have proposed to delist the Company's Equity Shares from the BSE Limited. Incompliance with the SEBI (Delisting of Shares) Regulations 2009 as amended from time totime the Company has made an application for delisting from the BSE Limited. The matteris under progress. However the Company's Equity Shares will continue to remain listed onthe National Stock Exchange of India Limited which provides nation-wide tradingterminals.
Number of Meetings of the Board
During the year 2020 five meetings of the Board of Directors were heldon the following dates: 29 January 2020 27 May 2020 23 July 2020 22 October 2020 and 28December 2020. Since March 2020 the meetings were held virtually throughvideo-conferencing due to the Covid 19 pandemic. The information on the meetings is givenin the Report on Corporate Governance that forms part of this Annual Report. Theintervening gap between any two meetings was within the period of 120 days prescribed bythe Companies Act 2013.
Directors and Key Managerial Personnel
Mr. Sanjay Mathur Managing Director resigned from the employment andalso from the Directorship of the Company at the close of work on 31 December 2020 as heexpressed a desire to pursue his other interests and passion after his departure from theCompany. The Board of Directors hereby confirm that there was no other material reasonthan that provided herein for his resignation. The Board places on record its appreciationof the valuable contributions made by him during his long tenure as Managing Director ofthe Company.
During the year under review the managerial remuneration paid to theManaging Director exceeded the prescribed limit laid down under Section 197 read withSchedule V to the Companies Act 2013 in view of inadequate profit when computed underSection 198 of the Act owing to the Covid-19 pandemic that affected the business of theCompany for some time. Accordingly Shareholders approval is being sought at the ensuingAnnual General Meeting for the excess remuneration paid to Mr. Mathur to be retained byhim.
On the recommendation of the Nomination and Remuneration Committee theBoard of Directors of the Company has appointed Dr. Ujjal Bhattacharjee (DIN 08083932) asan Additional Director of the Company and consequently as a Whole-time Executive Directorwith effect from 1 January 2021 pursuant to the provisions of Section 152 and 161 of theCompanies Act 2013. He shall hold office up to the date of the next Annual General Meeting(AGM) and his appointment will be subject to the approval of the Shareholders of theCompany at the forthcoming AGM. He will be liable to retire by rotation. Additionally theBoard of Directors has approved of the remuneration payable to Dr. Ujjal Bhattacharjee forthe year ending on 31 December 2021 which is subject to the approval of the Shareholdersof the Company at the forthcoming AGM of the Company.
On the recommendation of the Nomination and Remuneration Committee theBoard of Directors of the Company has appointed Mr. Prasad Chavare (DIN: 08846863) as anAdditional Director of the Company on 6 May 2021 and subsequently he will assume charge asa Managing Director and Chief Executive Officer for a period of 5 years with effect from1 June 2021 to 31 May 2026 pursuant to the provisions of Section 152 and 161 of theCompanies Act 2013. The Board of Directors has also approved the remuneration payable toMr. Chavare. He shall hold office up to the date of the next Annual General Meeting (AGM)and his appointment and remuneration will be subject to the approval of the Shareholdersof the Company at the said AGM. He will be liable to retire by rotation.
In terms of the provisions of the Companies Act 2013 and the Articlesof Association of the Company Ms. Karena Cancilleri (DIN 0008598568) a Non-Executive andNon-Independent Director on the Board of the Company who is a nominee of the PromoterCompany - Foseco Overseas Limited retires by rotation at the ensuing Annual GeneralMeeting and being eligible offers herself for re-appointment. She has submitted adeclaration that she is eligible for appointment. The Board recommends her re-appointment.A brief resume and other relevant details of her re-appointment is provided in theCorporate Governance Report which forms part of this Annual Report.
The Board of Directors hereby affirms that none of the Directors on theBoard of the Company are debarred from holding the Office of Director by virtue of anyorder passed by SEBI or any other statutory authority and are therefore not disqualifiedto be appointed as the Directors. Further pursuant to Regulation 34(3) and Schedule VPara C Clause 10(i) of the SEBI (LODR) the practicing Company Secretary has issued acertificate to the Company to this effect which is annexed with this Report markedAnnexure A. All the above appointments re-appointments and/or remuneration form part ofthe Notice of the Annual General Meeting and the Resolutions are recommended for yourapproval. Profile of these Directors are given in the Report on Corporate Governance.
During the year no Non-Executive Director except Mr. Ajit Shah and theNominee Directors appointed by the Promoter Company has had any pecuniary relationship ortransactions with the Company.
Mr. R Umesh Chief Financial Officer and Mr. Mahendra Kumar DutiaController of Accounts and Company Secretary are designated as the Key ManagerialPersonnel of the Company. Mr. Sanjay Mathur Managing Director was the Key ManagerialPersonnel of the Company till 31 December 2020. Dr. Ujjal Bhattacharjee AdditionalDirector has been appointed the Key Managerial Personnel of the Company since 1 January2021.
Rule 5 (iii)(a) of the Companies (Accounts) Amendment Rules 2019 isnot applicable as the Company did not have any requirement of appointment of anyIndependent Director during the year.
Directors' Responsibility Statement
Pursuant to Section 134(5) of the Companies Act 2013 your Directorsconfirm that:
a) in the preparation of the annual accounts the applicable accountingstandards have been followed with no material departures;
b) they have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for the same period;
c) they have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have laid down Internal Financial Controls in the Company thatare adequate and are operating effectively; and
f) they have devised proper systems to ensure compliance with theprovisions of all applicable laws and that these are adequate and are operatingeffectively;
Policy on Directors' Appointment and Remuneration
The policy of the Company on Directors' Appointment and Remunerationincluding criteria for determining qualifications positive attributes independence of aDirector and other matters provided in Section 178(3) of the Companies Act 2013 adoptedby the Board is covered in the Report on Corporate Governance which forms part of thisAnnual Report.
Performance Evaluation of the Directors
The Nomination and Remuneration Committee has laid down the criteriafor performance evaluation by the Board of its own performance and that of the variousCommittees of the Board and the individual Directors including the Chairperson. Theframework of performance evaluation of the Directors captures the following points:
- Key attributes of the Independent Directors that justify his / herextension / continuation on the Board of the Company;
- Participation of the Directors in the Board proceedings and his / hereffectiveness;
More details on this subject is provided in the Report on CorporateGovernance.
Composition of the Audit Committee
The Audit Committee comprises Mr. Ajit Shah as its Chairperson Mr.Ravi Moti Kirpalani and Ms. Anita Belani all of whom are Independent Directors and Mr.Guy Young as a Non-Executive Non-Independent Member. More details on the Committee aregiven in the Report on Corporate Governance.
Adequacy of Internal Financial Controls (IFC)
The Company has an Internal Financial Control System commensurate withthe size scale and complexity of its operations. The internal financial controls areadequate and are operating effectively so as to ensure orderly and efficient conduct ofbusiness operations. The internal controls are designed in a manner that facilitatesachievement of three-pronged objectives viz. i) support the achievement of the Company'sbusiness objectives ii) mitigate risks to acceptable level and iii) support sounddecision making and good governance.
The adequacy and effectiveness of the internal financial controls aredemonstrated by following the procedures as set out below: -
i. The internal controls have been designed to provide reasonableassurance with regard to recording and producing reliable financial and operationalinformation complying with applicable statutes safeguarding assets from unauthoriseduse executing transactions with proper authorisation and ensuring compliance withcorporate policies. The Company has a well-defined delegation of power with authoritylimits for approving revenue as-well-as expenditure. Processes for formulating andreviewing annual and long-term business plans have been laid down.
ii. The Audit Committee periodically deliberates on the operations ofthe Company with the Members of the Management. It also sought the views of PriceWaterhouse Chartered Accountants LLP who are the Statutory Auditors on the internalfinancial control systems. The extensive audit on the internal financial control systemswas done by P G Bhagwat Chartered Accountants.
iii. The Company has appointed P G Bhagwat Chartered Accountants asInternal Auditors of the Company. The Audit Committee in consultation with the InternalAuditors formulates the audit plan scope functioning and methodology which are reviewedevery year in a manner that they cover all areas of operation. The Internal Audit coversinter alia monitoring and evaluating the efficacy and adequacy of internal controlsystems in the Company its compliance with operating systems accounting procedures andpolicies at all locations and adequacy of insurance coverage of all assets. PeriodicalInternal Audit Reports are submitted to the Audit Committee to ensure completeindependence which are then extensively deliberated at every Audit Committee Meeting inthe presence of the Internal and External Auditors. Based on the review by the AuditCommittee process owners undertake corrective actions in their respective areas andconsider suggestions for improvement. The Internal Auditors have expressed that theinternal control system in the Company is robust and effective.
iv. The Board has also put in place requisite legal complianceframework to ensure compliance of all the applicable laws and that such systems areadequate and operating effectively.
v. The Company's financial records are maintained on the ERP Systemwhich is effective and adequate in line with the size of its operations.
Particulars of Loans Investments Guarantees and Securities
Your Company has neither advanced any loans nor made any investmentsor given any guarantees and / or provided any securities to anybody whether directly orindirectly within the meaning of Section 185 of the Companies Act 2013. Hence there areno details worth providing.
Fund raising by issuance of debt securities if any
Pursuant to SEBI Circular No. SEBI/HO/DDRS/CIR/P/2018/144 dated 26November 2018 the Directors confirm that your Company is not identified as a "LargeCorporate" as per the framework provided in the said Circular. Moreover your Companyhas not raised any fund by issuance of debt securities.
Particulars of Contracts or Arrangements with Related Parties
Under the Companies Act 2013 all contracts / arrangements /transactions entered into by the Company during the financial year ended 31 December 2020with related parties were on an arm's length basis and were in the ordinary course ofbusiness. Moreover none of the transaction were material in nature and thereforeMembers' approval was not required to be obtained in accordance with the Policy of theCompany on materiality of related party transactions. Thus provisions of Sections134(3)(h) and 188(1) of the Companies Act 2013 and Rule 8(2) of the Companies (Accounts)Rules 2014 are not applicable to the Company and therefore Form No. AOC-2 has not beenattached.
In compliance with the requirements laid down in the SEBI (ListingObligations And Disclosure Requirements) Regulations 2015 [SEBI (LODR)] all related partytransactions were placed before the Audit Committee for approval. Prior omnibus approvalof the Audit Committee had been obtained for transactions which were foreseeable and ofrepetitive nature. All transactions entered into with the related parties are presented tothe Audit Committee by way of a statement giving details of all transactions.
The Policy on materiality of Related Party Transactions and dealingwith Related Parties as approved by the Board has been uploaded on the Company's websiteat URL: FosecoIndia/View/policies.aspx. Your Directors draw attention of the Members toNote 29 attached to the financial statement which sets out related party disclosures.
Energy Conservation Technology Absorption and Foreign ExchangeEarnings and Outgo
Information under Section 134(3)(m) of the Companies Act 2013 readwith Rule 8(3) of the Companies (Accounts) Rules 2014 is given in Annexure B to thisReport.
Particulars of Employees and Related Disclosures
Disclosure pertaining to remuneration and other details as requiredunder Section 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 and also the Statementcontaining particulars of employees as required under Rules 5(2) and 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rule 2014 is provided in AnnexureC forming part of this Report.
Auditors and Auditors' Report
Price Waterhouse Chartered Accountants LLP (Firm registration no. -012754N / N500016) Chartered Accountants 7th Floor Business Bay Tower A Wing - 1Airport Road Yerwada Pune - 411006 are the Statutory Auditors of the Company. They willcontinue to hold office as the Statutory Auditors of the Company until the conclusion ofthe 65th Annual General Meeting to be held in the year 2022.
The observations of the Statutory Auditors on the annual financialstatement for the year ended 31 December 2020 including the relevant notes to thefinancial statement are self-explanatory and therefore do not call for any furthercomments. The Auditors' Report does not contain any qualification reservation or adverseremark or disclaimer. The Auditors' Report has been issued with unmodified opinion on theannual financial results of the Company.
Report on Frauds if any
During the year under review no incidence of any fraud has occurredagainst the Company by its officers or employees. Neither the Audit Committee of theBoard nor the Board of the Company has received any report involving any fraud from theStatutory Auditors of the Company. As such there is nothing to report by the Board asrequired under Section 134 (3) (ca) of the Companies Act 2013.
Joshi Apte & Associates Cost Accountants were appointed as theCost Auditors of the Company to examine the Cost Records and submit the Cost Audit Report.The Company has maintained the required cost accounting records as per the Companies (CostRecords and Audit) Rules 2014 and is in compliance therewith. The Cost Audit Report inForm CRA-4 relating to the year ended 31 December 2019 has already been filed with theMinistry of Corporate Affairs.
Pursuant to the provisions of Section 204 of the Companies Act 2013and the Rules made thereunder Rajesh Karunakaran & Co. Practicing Company Secretary(FCS 7441; CP No. 6581) Pune was appointed to conduct a secretarial audit of theCompany's Secretarial and related records for the year ended 31 December 2020. ThePracticing Company Secretary has submitted the Secretarial Audit Report which is annexedas Annexure D to this Report. The same does not contain any qualification reservation oradverse remark.
In addition to the above report a Report on Secretarial Compliance hasbeen submitted by Rajesh Karunakaran & Co. There are no observations reservations orqualifications in the said Report. The Secretarial Compliance Report is annexed asAnnexure E to this Report.
Secretarial Standards of the Institute of Company Secretaries of India(ICSI)
The Company has complied with the requirements prescribed under theSecretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings(SS-2).
Significant and Material Orders passed by the Regulators or Courts
There are no significant and material orders passed by any Regulatorsor Courts which would impact the going concern status of the Company and its futureoperations.
Vigil Mechanism / Whistle Blower Policy
The Company has established a vigil mechanism (which incorporates awhistle blower policy) for Directors employees and business associates to report theirgenuine concerns. The details of the same are provided in the Report on CorporateGovernance forming part of this Annual Report. The Policy is also available on theCompany's website at URL: FosecoIndia/View/policies.aspx.
Policies of the Company
Your Company has posted the following documents on its website at URL:FosecoIndia/View/policies.aspx.
- Code of Conduct;
- Familiarisation Programme for the benefit of the IndependentDirectors;
- Archival Policy;
- Policy for Determination of Material Events or Information;
- Policy of Preservation of Documents.
Risk Management Framework
The Board regularly monitors and reviews the risk management strategyof the Company and ensures the effectiveness of its implementation. Your Directors takeall necessary steps towards mitigation of any elements of risk which in their opinioncan impact the Company's survival.
All the identified risks are managed through review of businessparameters by the Management and the Board of Directors are informed of the risks andconcerns.
Corporate Social Responsibility (CSR)
The Board of your Company has constituted a CSR Committee. As on 31December 2020 the Committee comprises three Directors. A brief outline of the CSR Policyof the Company and the initiatives undertaken by the Company on CSR activities during theyear are set out in Annexure F of this Report in the prescribed format of the Companies(Corporate Social Responsibility Policy) Rules 2014. The CSR Policy is available on thewebsite of the Company at URL: FosecoIndia/View/policies.aspx.
Disclosure under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.
Your Company has in place a Policy in line with the requirements of TheSexual Harassment of Women at the Workplace (Prevention Prohibition & Redressal) Act2013.
An Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy.
Your Directors have to report that during the year under reviewneither any complaints of sexual harassment were received by it from the ICC nor werethere any complaints relating thereto which required any disposal thereof.
Employee relations throughout the Company were harmonious. Your Boardof Directors would like to place on record their sincere appreciation for the wholeheartedsupport and contributions made by all the employees of the Company as well as customerssuppliers bankers stakeholders and other authorities. The Directors also thank theCentral and State Governments/Government Departments/Agencies and the parent Company fortheir co-operation and valuable support.