Your Directors are pleased to present the 29th Annual Report along with the auditedfinancial statements of your Company for the financial year ended on 31st March 2021.
FINANCIAL PERFORMANCE SUMMARY
Pursuant to notification dated 16th February 2015 issued by the Ministry of CorporateAffairs the Company has adopted the Indian Accounting Standards ("IND AS")notified under the Companies (Indian Accounting Standards) Rules 2015 prescribed underSection 133 of the Companies Act 2013 (as amended from time to time) with effect from 1stApril 2016 and the accounts are prepared under IND AS.
The summary of the financial performance for the year is given below:
| || ||Rs. in lakh |
|Particular ||2020-21 ||2019-20 |
|Revenue from operations ||14653.98 ||16516.24 |
|Other Income ||389.35 ||181.79 |
|Total Income ||15043.33 ||16698.03 |
|Total Expenses ||13742.38 ||16096.22 |
|Profit Before Tax ||1300.95 ||601.81 |
|Tax Expenses || || |
|- Current Tax ||329.45 ||213.95 |
|- Deferred Tax ||22.94 ||(74.07) |
|Profit After Tax ||948.56 ||461.92 |
|Other Comprehensive income (net of tax) ||(46.22) ||59.16 |
|Total Comprehensive Income for the period/year ||902.33 ||521.08 |
|Earning Per Equity Share (EPS) for the period (Face Value of Rs.10) || || |
| Basic ||8.52 ||3.89 |
| Diluted ||8.52 ||3.89 |
REVIEW OF OPERATIONS:
During the year under review the Revenue of the Company decreased from Rs 16698.03Lakhs to Rs. 15043.33 Lakhs a decrease of 9.91%. However with strict control on costsdespite the drop in revenues the profit after tax increased from Rs. 461.92 lakhs to Rs.948.56 lakhs an increase of 105.35%. Many Businesses world over have suffered heavilydue to the COVID-19 pandemic. The impact has been different for different businesses butthis has been a useful learning experience for the Company. After the initial severeimpact we hope to strengthen the business moving forward.
FRESH FRUITS SEGMENT:
Our fresh fruit business consists of export of fresh Indian grapes mainly to Europe.This market has stagnated. Consumers world over are looking for something new somethingdifferent. A lot of new grape varieties are being developed by breeders in different partsof the world. The new varieties have different characteristics. Some are more resilient toweather conditions while some help extend the season earlier or later based on marketdemand. Some of them have better physical properties
while some others can be grown with reduced use of chemicals as they are more resilientto pests and diseases. Unfortunately major breeders are not coming to India as India isnot members of (UPOV) The International Union for the Protection of New Varieties ofPlants. This is going to be a major constrain for growth of this business. We are tryingto develop other markets most of them are not as consistent and profitable as theEuropean market. China is a good potential market but here the political conditions arenot conducive for aggressive growth. US is another good possibility but it is still notallowing imports of fresh Indian grapes.
In addition to the above constrains to growth the shipping costs for exports haveskyrocketed in the post Covid period. The sea freight from Mumbai to Rotterdam went upfrom US$ 2000 for a 40 ft refer container during the 2020 season to US$4000 in 2021season and it could be much higher for the 2022 season. The domestic fuel prices have alsogone up increasing the inland transportation costs. The packaging costs have also shown asimilar trend. The costs of running the pack house are also rising due to the need tomaintaining Covid related restrictions.
The Government of India is also not being very supportive to this business. The exportIncentive which used to be 7% of FOB values a few years back dropped to 5% in the preCovid season has now further reduced to 3% from January 2021 and this also has not beenpaid by the government for exports done in the last 18 months.
Considering the current prices of fresh grapes in the European market we do not feelthat it would be possible to get adequately compensated for all the cost increases. Thiscould then result into lower farm gate price for the growers which could have a long-termnegative impact on this business. The silver lining to all these limitations and costescalations is that the competition from new Indian exporters who have been coming inevery year and spoiling the market may get reduced and at the end it may not be as bad asit looks at this stage.
FOOD PROCESSING SEGMENT
The Indian food processing sector has a good scope for growth in the domestic market inthe coming years due to changing lifestyle higher disposable income and changing consumerconsumption pattern. However there remain plenty of challenges due to lack of properinfrastructure modern food processing technology assured raw material availability andinsufficient availability of cold storage facilities amongst others.
Your Company has tried to manage these constrains but unfortunately has not beensuccessful so far. Even after additional investments the revenue continues to be low. Theexports continue to grow but at a slow pace. The HPP cold pressed fruits and vegetablejuices with brand of "Second Nature" has suffered significantly due to theCovid 19 Pandemic. Cold logistics was a critical requirement of this business which cameto a complete halt due to curfew like lock down in Mumbai Pune and Delhi. We have put allinvestments in developing this business on hold and would reevaluate once theuncertainties due to Covid 19 reduce. We have tried hard to see that we conserve cash andtide over this very difficult period without financial stress.
Your Directors do not recommend any Dividend for the financial year ended on 31stMarch 2021 in order to conserve resources of the Company. The Company will retain theearnings for use in future operations and projects and strive to increase the net worth ofStakeholders of the Company.
CHANGES IN SHARE CAPITAL:
Your Directors at the Board Meeting held on January 28 2021 have approved the Buy-backof Equity Shares from the open market through stock Exchange mechanism for an aggregateamount not exceeding Rs. 6.75 Crore (Rupees Six crore and Seventy Five Lacs only)("Maximum Buyback Size") excluding any expenses incurred or to be incurred forthe Buyback at a price not exceeding Rs. 90 (Rupees Ninety only) per Equity Share.
The Company on 10th February 2021 commenced the Buyback from the shareholders/beneficial owners of the company excluding promoters promoter group and persons who arein control of the
Company via the 'open market' route through the Stock Exchange under the Securities andExchange Board of India (Buy-Back of Securities) Regulations 2018. Till 31st March 2021the Company bought back 266683 equity shares at aggregate amount of Rs. 20285528/-.
In view of the above mentioned Buy-back the total share capital of the Company hasdecreased from Rs. 111450000/- to Rs. 108783170/- as on 31st March 2021.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY:
There are no adverse material changes or commitments occurred after 31st March 2021which may affect the financial position of the Company or may require disclosure.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
There were no Change took place in the board of directors and Key Managerial Personnelof the Company during the financial year.
As on 31st Day of March 2021 following below mentioned was the constitution of theboard of the Company.
|DIN/PAN ||Name ||Begin date ||End date |
|00124470 ||ASHOK VISHINDAS MOTIANI ||30/09/1992 ||- |
|00124633 ||MAYUR JASHVANTLAL SHAH ||12/07/2003 ||- |
|00231568 ||RAMCHANDRA GAURISHANKAR JOSHI ||01/04/2020 ||- |
|00787809 ||NANITA ASHOK MOTIANI ||29/01/1997 ||- |
|06688634 ||ANIL SHARMA ||13/08/2013 ||- |
|01307881 ||DINESHBHAI SHANKERLAL OZA ||20-09-2019 ||- |
However after completion of the financial year 2020-21 Mr. Dinesh Oza resigned fromthe directorship of the Company w.e.f. 01.04.2021. The Board thanked Mr. Dinesh Oza forhis services rendered to the company.
Further the Board of Directors at their meeting held on the 29th June 2021 haveappointed Mr. Ashok Chandumal Murajani (DIN: 09217026) as an Additional Director of theCompany with effect from the said date whose term of office is upto the date of thisAnnual General Meeting in accordance with the applicable provisions of the Articles ofAssociation and the Companies Act 2013. The matter of appointing him as an IndependentDirector has already been placed as an Agenda item no. 5 in the Notice of the 29th AnnualGeneral Meeting. Further the company has received notice under Section 160 of theCompanies Act 2013 from a member of the Company proposing the candidature of Mr. AshokMurajani as an Independent Director of the Company..
Regarding proficiency the Company has adopted requisite steps towards the inclusion ofthe names of all Independent Directors in the data bank maintained with the IndianInstitute of Corporate Affairs Manesar ('IICA'). Accordingly all the IndependentDirectors of the Company have registered themselves with IICA for the said purpose. Interms of Section 150 of the Act read with the Companies (Appointment & Qualificationof Directors) Rules 2014 as amended vide Notification No. GSR.774 (E) dated 18.12.2020since all the Independent Directors of the Company have served as Directors for a periodof more than three (3) years on the Board of Listed Company as on the date of inclusion oftheir names in the database except Mr. Ashok C. Murajani they are not required toundertake online proficiency self-assessment test. Mr. Ashok C. Murajani has informed theCompany that he will undertake the online assessment test before due date.
CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS:
In accordance with the SEBI (LODR) (Amendment) Regulations 2018; a certificate hasbeen received from M/s. Manoj Hurkat & Associates Practicing Company Secretariesthat none of the Directors on the Board of the Company has been disqualified to act asDirector. The same is annexed herewith.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability state the following:
a. That in the preparation of the annual financial statements the applicableaccounting standards have been followed along with proper explanation relating to materialdepartures if any;
b. That such accounting policies have been selected and applied consistently andjudgement and estimates have been made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as at 31st March 2021 and of theprofit of the Company for the year ended on that date;
c. That proper and sufficient care has been taken 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;
d. That the annual financial statements have been prepared on a going concern basis;
e. That proper internal financial controls were in place and that the financial controlwas adequate and were operating effectively;
f. That proper system to ensure compliance with the provisions of all applicable lawswere in place and were adequate and operating effectively.
The assets of the Company are adequately insured against the loss of fire and otherrisks which are considered necessary by the management.
INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY:
The details in respect of internal financial control and their adequacy are included inManagement Discussion and Analysis Report which forms part of this report.
During the year under review your Company has not accepted any fixed deposits withinthe meaning of Section 73 of the Companies Act 2013 read with rules made there under.
COMPLIANCE OF APPLICABLE SECRETARIAL STANDARDS:
The Company has complied with applicable Secretarial Standards during the year underreview.
IMPACT OF COVID-19:
For the Company the focus during the financial year was ensuring the health andwellbeing of all employees and on minimizing disruption to services for all our customersglobally. The Company took various proactive precautionary and pre-emptive measures attheir corporate offices at Ahmedabad and units at Nasik and Sangli districts to ensuresafety of all employees since March 2020.
Further the Company has taken all the necessary steps as recommended/stated in theguidelines/ advisories issued by the Central/State Government and Local Authorities forprevention and containment of COVID-19.
The Second and the more deadly Wave of Covid-19 in India started gaining momentum inApril 2021. The grape export packing for the 2021 season had ended and therefore theImpact on Fresh Export business was limited. We were not so lucky in the Processingbusiness. The peak of the Second wave coincided with the mango processing season May andJune 2021.
Due to COVID-19 Business and Financials of the Company have been impacted but theManagement is trying its best to cope up with Business and Financial Losses and adapt tothe new normal as soon as possible.
During the year under review the Company has obtained the following certificationspertaining to the
Highest International Standard of Food Safety and Hygiene:
1. ISO 22000 - ISO 22000 is international standard developed by theInternational Organization for Standardization dealing with food safety it is systematicand proactive approach to identification of food safety hazards development andimplementation of control measures.
2. SGF International E.V. - This certifies participation of the Companyvoluntary self-control safe guide in the fruit juice segment for enhancing customer andconsumer safety.
3. SEDEX (Supplier Ethical Data Exchange) - SEDEX is world's largestcollaborative platforms for sharing responsible sourcing data on supply chains; thecompany is member of SEDEX.
4. Halal Certificate - Halal Products are "universal" products notonly suitable for Muslims consumption it is ensuring the safety of nation's food supplyand we acquired this certificate to export our products in Islamic Countries.
5. Kosher Certificate - This certificate provides certification for ingredientspackaged foods beverages and certain materials as well as food-service providers andfacilities in which kosher food is prepared or served. This certification providescertificate as per standards set in Jewish dietary law. kosher symbol boosts market sharethat a kosher product can win more favorable shelf space and that
6. Positioned next to a competing non-kosher brand. This certificate helps inincreasing the salability of the product in the international supermarkets.
7. BRC certificate - the BRC certificate for Food Safety as requirements of theEU General Product Safety the BRC certificate is for Nashik (Unit I) Pack house andSangli (Unit II) Pack house.
8. FDA - The Food and Drug Administration ensuring the safety of food supply inUS Market.
9. APEDA Pack House - The APEDA Recognition for pack house will be granted formultiple produce for which appropriate facilities and procedural compliances as per theimporting countries. APEDA Pack house has Recognition for Nashik (Unit I) and Sangli (UnitII) as Pack house.
10. Global GAP Certificate - it is a voluntary set worldwide standard foragriculture producer for adoption of safe and sustainable practices.
11. Walmart Supply Chain Security - is the accumulation of controls throughoutthe supply chain process that enhance the security of the supply chain during thetransportation of finished we follow the same for Unit I and Unit II.
12. Fairtrade certificate - Fair trade is an alternative approach toconventional trade based on a partnership between producers and traders businesses andconsumers.
13. FSSAI License - Food Safety and Standards Authority of India is the foodregulatory body of India The FSSAI registration becomes mandatory in order to ensuresafe and smooth operations of the food business. FSSAI food license helps the governmentas well as the consumers feel assured that the regulation of the storage productiondistribution and the sales has been carried out in a way that the food products are fitfor consumption. FSSAI License is for Nasik (Unit I) Pack house and Sangli (Unit II) Packhouse and Nashik processing unit (Unit IV).
14. Amfori BSCI - The Amfori BSCI is based on the labor standards of theInternational Labour Organization (ILO) as well as on national regulations. Thisinitiative aims at continuously improving the social performance of suppliers ultimatelyenhancing working conditions in factories worldwide.
Total energy consumption and energy consumption per unit of production are as under:
|Particular || ||2020-21 ||2019-20 |
|Electricity || || || |
|a) Purchased || || || |
|Units ||KWH ||2331654 ||2751044 |
|Total amount ||Rs ||21373404 ||25540068 |
|Rate/Unit ||Rs ||9.17 ||9.28 |
|b) Own Generation through Diesel Generator Set || || || |
|Units || || || |
|Quantity ||Ltrs ||24515 ||24706 |
|Total Amount ||Rs ||1843978 ||1680634 |
|Rate/Unit ||Rs ||75.22 ||68.03 |
|c) Coal and other Fuels || || || |
|Units ||Kgs ||565060 ||617220 |
|Total Amount ||Rs ||4238994 ||4523516 |
|Rate/Unit ||Rs ||7.50 ||7.33 |
TECHNOLOGY ABSORPTION AND ENERGY CONSERVATION:
The Company has a continuous focus on energy conservation. Regular studies areconducted to analyze quantitative energy conservation patterns and variances arerigorously scrutinized. The Company regularly benchmarks its energy conservation levelsand consistently works towards improving efficiencies.
FOREIGN EXCHANGE EARNING AND OUTGO:
Foreign Exchange earnings during the year amounts to Rs.1357485102/- (Previous YearRs. 1412331540) and Foreign Exchange outgo during the year was Rs.137205581/-(Previous Year Rs. 98396078).
WEB ADDRESS FOR ANNUAL RETURN AND OTHER POLICIES/ DOCUMENTS:
In line with the requirement of the Companies (Amendment) Act 2017 effective from31st July 2018 the extract of annual return is no longer required to be part of theBoard Report. However for the Compliance of Conditions of Section 92 and Section 134copy of the Annual Return for the financial year ended 31st March 2021 and other policiesof the Company shall be placed on the Company's website: www.freshtrop.com.
NUMBER OF BOARD MEETINGS:
The Board of Directors met 4 (four) times on 25th June 2020 31st July 2020 11thNovember 2020 and 28th January 2021 during the year under review. The details of boardmeetings and the attendance of the Directors are provided in the Corporate GovernanceReport which forms part of this Report.
The maximum interval between any two meetings was well within the maximum allowed gapof 120 days.
INDEPENDENT DIRECTORS' MEETING
The Independent Directors met once during the year under review without the attendanceof Non-
Independent Directors and members of the Management. The Independent Directors reviewedthe performance of non-independent directors and the Board as a whole; the performance ofthe Chairperson of the Company taking into account the views of Executive Directors andNon-Executive Directors and assessed the quality quantity and timeliness of flow ofinformation between the Company Management and the Board that is necessary for the Boardto effectively and reasonably perform their duties.
The Board implemented a formal mechanism for assessing its performance and as well asthat of its Committees and individual Directors including the Chairman of the Board. Theexercise was carried out through a designed assessment process covering various featuresof the Boards functioning such as composition of the Board & committees experience& proficiencies performance of specific duties & obligations contribution at themeetings and otherwise independent judgment governance issues etc.
INVESTOR EDUCATION AND PROTECTION FUND (IEPF):
In accordance with the applicable provisions of Companies Act 2013 (hereinafterreferred to as "the Act") read with Investor Education and Protection Fund(Accounting Audit Transfer and Refund) Rules 2016 (hereinafter referred to as the"IEPF Rules") all unclaimed dividends are required to be transferred by theCompany to the IEPF after completion of seven (7) years. Further according to IEPFRules the shares on which dividend has not been claimed by the shareholders for seven (7)consecutive years or more shall be transferred to the demat account of the IEPF Authority.The details relating to amount of dividend transferred to the IEPF during the FY 2021-22and corresponding shares on which dividends were unclaimed for seven (7) consecutiveyears are provided in the General Shareholders Information section of CorporateGovernance report forming part of this Annual Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION:
The Company's policy on directors' appointment remuneration and other matters providedin Section178 (3) of the Companies Act 2013 is available on the website of the Companyi.e. www.freshtrop.com.
CORPORATE SOCIAL RESPONSIBILITY:
The details of Corporate Social Responsibility (CSR) carried out by the Company areappended in the Annexure-B to the Directors' Report.
The particulars of the CSR committee constituted by the Company pursuant to theprovisions of Section 135 of the Companies Act 2013 and the rules forming part of thesame are included in the Corporate Governance Report annexed and form part of this AnnualReport.
PARTICULARS OF EMPLOYEES:
The information required pursuant to Section 197 of the Companies Act 2013 read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014in respect of employees of the Company will be provided upon request. In terms of Section136 of the Companies Act 2013 the Report and Accounts are being sent to the members andothers entitled thereto excluding the information on employees' particulars which isavailable for inspection by the members at the Registered Office of the Company duringbusiness hours on working days of the Company upto the date of the ensuing Annual GeneralMeeting. If any member is interested in inspecting the same such member may write to theCompany Secretary in advance.
CORPORATE GOVARNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
A separate report on Corporate Governance compliance and a Management Discussion andAnalysis
Report as stipulated by Listing Regulations forms part of this Annual Report along withthe required Certificate from a Practicing Company Secretary regarding compliance of theconditions of Corporate Governance as stipulated.
In compliance with Corporate Governance requirements your Company has formulated andimplemented a Code of Business Conduct and Ethics for all Board members and seniormanagement personnel of the Company who have affirmed the compliance thereto.
FORMATION OF VARIOUS COMMITTEES:
Details of various committees constituted by the Board of Directors as per theprovision of the SEBI Listing Regulations and the Companies Act 2013 are given in theCorporate Governance Report annexed which is a part of this report.
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE:
As per the requirement The Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 read with rules made thereunder Your Company hasconstituted Internal Complaints Committee which is responsible for redressal of complaintsrelated to sexual harassment. During the year under review there were no complaintspertaining to sexual harassment. The Company is compliant of all applicable provisions ofthe said Act.
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in Form MGT-9 is annexedto this Report as Annexure-A and available at company website: www.freshtrop.com.
RELATED PARTY TRANSACTIONS:
All the related party transactions entered into during the financial year were on anarm's length basis and were in the ordinary course of business. Your Company has notentered into any transactions with related parties which could be considered material interms of Section 188 of the Companies Act 2013. Accordingly the disclosure of relatedparty transactions as required under Section 134(3) (h) of the Companies Act 2013 in FormAOC 2 is not applicable.
SECRETARIAL AUDIT REPORT:
Pursuant to the provisions of Section 204 of the Act read with the rules madethereunder your Company had appointed Mr. Manoj Hurkat Practicing Company Secretary toundertake the Secretarial Audit of the Company. The Secretarial Audit Report for financialyear 2020-21 is annexed which forms part of this report as Annexure-C. There wereno qualifications reservation or adverse remarks in the Secretarial Audit Report of theCompany.
The Board of Directors had reappointed Mr. Kalpesh Parikh as an internal auditor forF.Y. 2021-22.
DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNAL:
There are no significant material orders passed by the Regulators/Courts which wouldimpact the going concern status of the Company and its future operations
AUDITORS' & AUDITORS' REPORT:
Pursuant to the provisions of Section 139 of the Act read with rules made thereunderas amended from time to time M/s F P & Associates Chartered Accountants (FirmRegistration Number - (0143262W) were appointed as statutory auditors of the Company tohold office from the conclusion on 25th Annual General Meeting till the conclusion of the30th Annual General Meeting subject to ratification of their appointment at every AGM ifrequired under law.
In view of the Companies (Amendment) Act 2017 the first proviso in sub-section (1) insection 139 of the Companies Act 2013 has been omitted with effect from 7th May 2018. Inview of this the said appointment of auditor is no longer required to be ratified by themembers at every annual general meeting.
Notes to the financial statements referred in the Auditors Report are self-explanatoryand therefore do not call for any comments under Section 134 of the Act. The Auditors'Report is enclosed with the financial statements in this Annual Report.
Your Directors place on record their appreciation of the sincere and devoted servicesrendered by all employees of the company and the continued support and confidence of thecustomers. The Board expresses special thanks to progressive farmers of Maharashtra whohave worked hard to achieve International Standards in the quality of their produce. TheBoard also expresses its sincere thanks to Axis Bank Ltd and their officers Agriculturaland Processed Food Products Export Development Authority (APEDA) Ministry of FoodProcessing Industry (MFPI) and all other well- wishers for their timely support
|Date: June 29 2021 ||By order of the Board |
| ||For Freshtrop Fruits Limited |
|Registered Office || |
|A-603 Shapath IV ||Ashok Motiani |
|Opp. Karnavati Club S. G. Road ||Chairman & Managing Director |
|Ahmedabad - 380 015 ||(DIN: 00124470) |