The Directors of your Company have pleasure to present 48th Annual Reportwith the Audited Statements of Accounts for the year ended 31st March 2020.
| || ||Rs. in Lakhs |
| ||2019-2020 ||2018-2019 |
|Total Revenue ||13536.57 ||11556.93 |
|Profit for the year after deducting all expenses but before interest depreciation and taxation (EBIDTA) ||985.51 ||902.90 |
|FROM WHICH ARE DEDUCTED || || |
|Interest & Financial Charges ||0.76 ||1.23 |
|Depreciation ||344.07 ||333.55 |
|Provision for Taxation || || |
|Current Tax ||213.25 ||160.07 |
|Deferred Tax ||(98.97) ||(168.25) |
|Short / (Excess) provision of taxation of earlier year ||(9.17) ||0.83 |
| ||535.57 ||575.47 |
|Add: Other comprehensive income ||(43.65) ||(43.08) |
|NET PROFIT FOR THE YEAR TO WHICH IS ADDED: ||491.92 ||532.39 |
|Surplus Brought Forward ||787.16 ||550.78 |
|BALANCE AVAILABLE FOR APPROPRIATION ||1279.08 ||1083.17 |
|APPROPRIATION FOR || || |
|Proposed Dividend ||248.23 ||141.85 |
|Corporate Dividend Tax ||51.02 ||29.16 |
|General Reserve ||125.00 ||125.00 |
|Surplus Carried to next year's account ||854.83 ||787.16 |
| ||1279.08 ||1083.17 |
ECONOMIC SCENARIO & OUTLOOK:
The Revenue of the company has increased by '1979.64 Lakhs over the previous year.Gelatine sales have increased by Rs.406.68 Lakhs (net of duties & taxes) and whereasOssein sales have increased by Rs.1436.97 Lakhs over the previous year.
The demand for the products of the company continued to be robust during the year andbetter realisations for all the products except DCP allowed the company to achieve thehighest turnover of the company since its inception. The company has also successfullyentered into the sales of Marine Collagen under its brand "Everpure Life" anddue to the extensive social media marketing efforts adopted the company is beginning tosee strong sales and good results.
The demand for Ossein remained consistent throughout the year which has contributed toa significant rise in the sales turnover. The total sales of ossein/limed ossein jumped byabout 250% in volume terms and about 260% in value terms over the previous year.
The contribution of Gelatine sales to the turnover was also marginally higher ascompared to the previous year which was primarily on account of better realisations of theproducts sales in both the export as well as domestic markets.
There was a drop in the sales of Gelatine in volume to the tune of about 16% howeverin value terms it was higher by about 5%.
During the year there has been a significant increase in the cost of the company'sprincipal raw material crushed bones. The increase during the year was to the tune of 16%over the previous year.
Based on a recent study conducted by a leading market research firm there has been areduction in the availability of crushed bones over the past few years and with theproduction levels of most other Gelatine plants being at their optimum levels there is amajor shortage of raw materials in the country. The company though could import Gelbonesfrom overseas during the year and has further contracted for additional volumes during theyear 2020-21.
During the year the costs relating to the treatment of waste water have increased atboth ends i.e. at the end of the company's own effluent treatment plant as well as theadditional treatment fees imposed by the Common Effluent Treatment Plant (CETP) run by theVapi Green Enviro Ltd. (VGEL) this cost increase has had a significant impact on thecompany's profits.
In order to reduce the cost of treatment and to reduce the carbon footprint of thecompany various alternatives are being looked into such as recycling of a significant partof the companies effluent as well as direct marine discharge of the effluent as per thepollution control board norms into the Arabian Sea. These are long gestation projects andmay not show results immediately.
During the year the cost of electricity has also increased on account of highertarriffs. This has resulted in an increase in the power bill by about Rs. 22123000 overthe previous year. With regard to the exchange rate between the USD and the INR there wasno significant change during the year except during the last month of the FY The rateswere range bound between 1USD=Rs.69 to Rs.71.
The year ahead looks more challenging given the COVID-19 pandemic although the companyis doing its best to address these challenges by keeping an eye on the raw materials aswell as the sales of the companies products both in the domestic as well as in the exportmarkets.
Impact of Covid-19 pandemic
The Company has assessed the probable impact of COVID-19 pandemic. It has consideredinternal and external information available up to the date of approval of these financialresults and has performed analysis based on current estimates in assessing therecoverability of its assets including trade receivables inventories and other financialand non-financial assets for possible impact on these financial results. The Company hasalso assessed the impact of this whole situation on its capital and financial resourcesprofitability liquidity position etc. On the basis of its present assessment and currentindicators of future economic conditions the Company expects to recover the carryingamounts of these assets and does not anticipate any material impact on these financialresults. However the assessment of impact of COVID-19 is a continuing process given theuncertainties associated with its nature and duration. The company will continue tomonitor any material changes to future economic condition.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Management Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 read with Schedule V to the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") is annexed herewith as "Annexure-A" forming part ofthe Annual Report.
Your directors recommend dividend @ 15% i.e. Rs.1.50/- per share (previous year 35%i.e. '3.50 per share) on Equity Shares of Rs.10/- each of the company for the year ended31st March 2020.
TRANSFER TO RESERVES:
Your Company has transferred '125 Lakhs to the General Reserve (Previous year '125Lakhs) from the current year's profits.
During the year under review the Issued Subscribed and Paid-up equity share capitalof the Company was Rs.70923000/- divided into 7092300 equity shares of face value of'10/- each.
There was no change in the capital structure of the Company during the year.
The Company has made a provision of '213.25 Lakhs towards current year's Income Tax.
The Company continues to get requisite assistance and co-operation from its bankers asand when needed.
All the properties of the Company including building plant and machinery and stockshave been adequately covered under insurance.
Industrial relations continued to remain cordial and satisfactory.
During the financial year 2019-2020 your Company has not accepted any deposit withinthe meaning of Sections 73 & 74 of the Companies Act 2013 read together with theCompanies (Acceptance of Deposits) Rules 2014.
The Corporate Governance which form an integral part of this Report is set out asseparate Annexure together with the Certificate from the Practicing Company Secretariesregarding compliance with the requirements of Corporate Governance as stipulated undervarious regulations of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
The Company has devised proper systems to ensure compliance with the provisions of allapplicable Secretarial Standards issued by the Institute of Company Secretaries of Indiaand that such systems are adequate and operating effectively. The company has compliedwith SS-1 and SS-2.
Transfer of Unclaimed Dividend and Shares to Investor Education and Protection Fund(IEPF')
Pursuant to the provisions of the Companies Act 2013 read with Investor EducationProtection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 asamended the dividends unclaimed for a period of seven years from the date of transfer tothe Unpaid Dividend Account of the Company are liable to be transferred to the IEPF.Accordingly unclaimed dividends of Shareholders for the Financial Year 2012-13 lying inthe unclaimed dividend account of the Company as on September 28 2020 will be transferredto IEPF on the due date. Further the shares (excluding the disputed cases having specificorders of the Court Tribunal or any Statutory Authority restraining such transfer)pertaining to which dividend remains unclaimed for a consecutive period of seven yearsfrom the date of transfer of the dividend to the unpaid dividend account is alsomandatorily required to be transferred to the IEPF Authority established by the CentralGovernment. Accordingly the Company has transferred unclaimed dividend and eligibleShares to IEPF Demat Account within statutory timelines.
The details of unclaimed dividends and shares transferred to IEPF during Financial Year2019-20 are as follows:
|Financial Year ||Amount of Unclaimed Dividend Transferred (Rs. in lakhs) ||Number of Shares Transferred |
|2011-12 ||4.28 ||8674 |
The Company has sent individual communication to the concerned shareholders at theirregistered address whose dividend remained unclaimed and whose shares were liable to betransferred to the IEPF. The communication was also published in newspapers.
Any person whose unclaimed dividend and shares pertaining thereto matured depositsmatured debentures application money due for refund or interest thereon sale proceedsof fractional shares redemption proceeds of preference shares amongst others has beentransferred to the IEPF Fund can claim their due amount from the IEPF Authority by makingan electronic application in e-form IEPF-5. Upon submitting a duly completed formShareholders are required to take print of the same and send physical copy duly signedalong with requisite documents as specified in the form to the attention of the NodalOfficer at the Registered Office of the Company. The e-form can be downloaded from thewebsite of Ministry of Corporate Affairs at www.iepf.gov.in The Shareholders canfile only one consolidated claim in a financial year as per the IEPF Rules.
SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES
Your Company is not having any subsidiary associate or joint venture. Further duringthe financial year under review no company has become or ceased to be subsidiary jointventure or associate of the Company.
DIRECTORS' RESPONSIBILITY STATEMENT:
The Board of Directors acknowledge the responsibility for ensuing compliances with theprovisions of Section 134(3) (c) read with Section 134(5) of the Companies Act 2013 inthe preparation of annual accounts for the year ended on 31st March 2020 and state that:
i) in the preparation of the annual accounts the applicable accounting standards havebeen followed and there are no material departures;
ii) the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the Company for the year ended on that date;
iii) the directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
iv) the directors have prepared the annual accounts on a going concern basis;
v) proper internal financial controls were in place and that the financial controls areadequate and were operating effectively;
vi) systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
AUDITORS AND AUDITORS' REPORT
The Statutory Auditors M/s. Chandulal M. Shah & Co. Chartered Accountants (FirmRegistration No. 101698W) were appointed in 45th Annual General Meeting tohold office from the conclusion of 45th Annual General meeting for a term ofconsecutive five years till conclusion of 50th Annual General Meeting to beheld in the year 2022 (subject to ratification of the appointment by the members at everyAnnual General Meeting). However in terms of the Notification issued by the Ministry ofCorporate Affairs dated 7th May 2018 the proviso requiring ratification ofthe Auditors appointment by the shareholders at each AGM has been omitted. Accordinglythe ratification of appointment of Statutory Auditors would not be required at the ensuingAGM and M/s. Chandulal M. Shah & Co. Chartered Accountants would continue to act asthe Statutory Auditors of the Company for five years upto the conclusion of the 50thAGM to be held in 2022.
Notes on financial statement referred to in the Auditors' Report are self-explanatoryand do not call for any further comments. The Auditor's Report does not contain anyqualification reservation or adverse remark.
Disclosure under Section 143(12) of the Act
The Statutory Auditors of the Company have not reported any instances of fraud orirregularities under provisions of Section 143(12) of the Act and Rules made there underin the management of the Company during financial year under review.
SECRETARIAL AUDITOR AND AUDIT REPORT:
Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 your Companyhas appointed M/s. Samdani Shah & Kabra Practicing Company Secretaries to conduct theSecretarial Audit of your Company for the financial year ended 31 st March2020.
Secretarial Audit Report has been issued by M/s. Samdani Shah & Kabra PracticingCompany Secretaries in Form MR-3.The said report does not contain any observation orqualification requiring explanation or adverse remark. The Secretarial Audit report isannexed herewith as "Annexure-E" to this report.
M/s Chirag Shah & Associates Practicing Company Secretaries has submitted AnnualSecretarial Compliance Report as laid down in SEBI Circular CIR/CFD/CMD1/27/2019 dated 8thFebruary 2019 and has also confirmed that the Company has complied with all applicableSEBI Regulations and circulars / guidelines issued thereunder for the financial year2019-20.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION:
(Including criteria for determining qualification positive attributes independence ofa Director policy relating to remuneration of Directors Key Managerial Personnel andother employees)
(a) Policy on Directors' Appointment
Policy on Directors' appointment is to follow the criteria as laid down under theCompanies Act 2013 the Listing Agreement with Stock Exchanges and good corporatepractices. Emphasis is given to persons from diverse fields or professions.
The policy of the Company on Directors' appointment and remuneration including thecriteria for determining the qualifications positive attributes independence of aDirector and other matters as required under Section 178(3) of Companies Act 2013 isavailable on our website i.e. www.indiagelatine.com or on below mentioned weblink:
(b) Policy on Remuneration
Guiding Policy on remuneration of Directors Key Managerial Personnel and employees ofthe Company is that -
Remuneration to unionized workmen is based on the periodical settlement with theworkmen union.
Remuneration to Key Managerial Personnel Senior Executives Managers Staff andWorkmen (nonunionized) is industry driven in which it is operating and also taking intoaccount the performance leverage and factors such as to attract and retain quality talent.
For Directors it is based on functions and responsibilities shouldered theshareholders resolutions provisions of the Act and Rules framed therein circulars andguidelines issued by Central Government and other authorities from time to time.
ANNUAL EVALUATION BY THE BOARD OF ITS OWN PERFORMANCE ITS COMMITTEES AND INDIVIDUALDIRECTORS:
Pursuant to provisions of the Companies Act 2013 and Regulation 17(10) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Directors on theBoard carried out an annual evaluation of the Board itself its Committees and individualDirectors. The entire Board carried out performance evaluation of each IndependentDirector excluding the Independent Director being evaluated. Nomination and RemunerationCommittee also carried out evaluation of every Director's performance.
A structured questionnaire was prepared after taking into consideration inputs receivedfrom the Directors setting out parameters of evaluation. Evaluation parameters of theBoard and Committees were mainly based on Disclosure of Information Key functions of theBoard and Committees responsibilities of the Board and Committees Corporate GovernanceNorms etc. Evaluation parameters of individual directors including the Chairman of theBoard and Independent Directors were based on knowledge to perform the role time andlevel of participation performance of duties and level of oversight and professionalconduct etc.
Independent Directors in their separate meeting held on 13th March 2020have also evaluated the performance of NonIndependent Directors Chairman of the Board andthe Board as a whole.
DISCLOSURES BY THE DIRECTORS:
The Directors on the Board have submitted notice of interest under Section 184(1)intimation under Section 164(2) and declaration as to compliance with the Code of Conductof the Company. All Independent Directors have also given declarations that they meet thecriteria of independence as laid down under Section 149(6) of the Companies Act 2013 (the"Act") and Regulation 25 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
The Independent Directors have complied with the code of Independent Directors asprescribed in Schedule IV of the Companies Act 2013.
The Independent Directors have confirmed that they have registered their names in thedata bank maintained with the Indian Institute of Corporate Affairs (IICA'). Interms of Section 150 of the Act read with Rule 6(4) of the Companies (Appointment &Qualification of Directors) Rules 2014 the Independent Directors are required toundertake online proficiency self-assessment test conducted by the IICA within a period ofone year from the date of inclusion of their names in the data bank. The IndependentDirectors to whom the provisions of proficiency test are applicable will take the saidonline proficiency self-assessment test in due course.
The Directors and Senior Management Personnel have complied with the code of conductfor Directors and Senior Management.
NUMBER OF MEETING OF BOARD OF DIRECTORS:
The Board of Directors duly met 6 times and the independent Directors once during thefinancial year ended March 31 2020. The dates on which the Board meetings were held are13.05.2019 26.07.2019 17.09.2019 05.11.2019 11.02.2020 & 13.03.2020.
The other details of which are mentioned in the Corporate Governance Report annexedherewith. The intervening gap between the meetings was within the period prescribed underthe Companies Act 2013 and the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
DETAILS OF COMMITTEE OF DIRECTORS:
Composition of Audit Committee of Directors Nomination and Remuneration Committee ofDirectors Corporate Social Responsibility Committee and Stakeholder RelationshipCommittee number of meetings held of each Committee during the financial year 2019-20 andmeetings attended by each member of the Committee as required under the Companies Act2013are provided in Corporate Governance Report and forming part of the report.
The recommendation by the Audit Committee as and when made to Board has been acceptedby it.
DIRECTORS & KEY MANAGERIAL PERSONNEL:
In terms of the provisions of Section 152(6) of the Act Mrs. Shefali V. Mirani (DIN:03107547) who retires by rotation and being eligible offers herself for re-appointment.
Based on the recommendation of Nomination and Remuneration Committee the Board ofDirectors at its meeting held on March 13 2020 had appointed Mr. Malay Mahendra Khimji(DIN: 00402675) as an additional Non Executive Independent Director pursuant to 149150 152 read with schedule IV and Section 161(1) read with Companies (Appointment andQualification of Directors) Rules 2014 and other applicable provisions sections rulesof the Companies Act 2013 and Regulation 17 of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 on the Board ofthe Company for a term of five (5) consecutive years from March 13 2020 to March 122025 not liable to retire by rotation subject to the approval of the shareholders at theupcoming Annual General Meeting.
KEY MANAGERIAL PERSONNEL
Your Company has designated Mr. Viren C. Mirani the Managing Director Mr. Nishant P.Odhvani the Chief Financial Officer and Mrs. Tanaya T Daryanani Company Secretary asthe Key Managerial Personnel. During the year under review there has been no change inthe Key Managerial Personnels.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has proper and adequate internal control systems to ensure that all assetsare safeguarded and protected against loss from unauthorized use or disposition and thosetransactions are authorized recorded and reported correctly.
The Internal Auditor monitors and evaluates the efficacy and adequacy of internalfinancial control system in the Company its compliance with operating systems accountingprocedures application of the instructions and policies fixed by the senior management ofthe Company. The Audit Committee reviews the report submitted by the Internal Auditors ona quarterly basis. During the Audit Process no material discrepancies have been reportedby the Internal Auditor.
LOANS INVESTMENT AND GUARANTEES BY THE COMPANY:
There is no loan given investment made guarantee given or security provided by theCompany to any entity under Section 186 of the Companies Act 2013.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The prescribed particulars of Employees required under Section197(12) of the CompaniesAct 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is annexed herewith as "Annexure-B" to this Report.
The information required under Section 197(12) of the Companies Act 2013 read withRule 5(2) and 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel)Rules2014 and forming part of the Boards' Report for the year ended 31stMarch 2020 is given in the "Annexure B" of this Report.
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in Form MGT- 9 inaccordance with Section 92(3) of the Companies Act 2013 read with the Companies(Management and Administration) Rules 2014 are set out herewith as"Annexure-F" to this Report.
The extract of Annual Return in Form MGT 9 as per provisions of the Companies Act 2013and Rules thereto is available on the Company's website at www.indiagelatine.com
RELATED PARTY TRANSACTIONS:
All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. Form No. AOC-2 is setout herewith as "Annexure- G". There are no materially significant Related PartyTransactions made by the Company with Promoters Directors Key Managerial Personnel orother designated persons which may have a potential conflict with the interest of theCompany at large.
The related party transactions policy is uploaded on the Company's website at theweb-link given below:
All Related Party Transactions are placed before the Audit Committee and also the Boardfor approval. Prior omnibus approval of the Audit committee is obtained for thetransactions which are of foreseen and repetitive nature. The transactions entered intopursuant to the omnibus approval so granted are audited and a statement giving details ofall related party transactions is placed before the Audit committee and the Board ofDirectors for their approval.
Pursuant to Section 134 of the Act the Company has a risk management policy in placefor identification of key risks to the business objectives of the Company impactassessment risk analysis risk evaluation risk reporting and disclosures riskmitigation and monitoring and integration with strategy and business planning.
The Company periodically reviews the risks and suggests steps to be taken to controland mitigate the same through a properly defined framework.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY:
Pursuant to the provisions of sub-section 9 of section 177 of Companies Act. 2013("the Act" or "Act") and in terms of Regulation 22 read withRegulation 4(2)(d)(iv) of Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 ("SEBI LODR") the Company has avigil mechanism named Whistle Blower Policy to deal with instance of fraud andmismanagement and provide a mechanism for the Directors / Employees of the Company toapproach the designated persons / Chairman of the Audit Committee of the Company to interalia report to the management instances of unethical behavior actual or suspected fraudor violation of the company's code of conduct or ethics policy.
The Whistle Blower Policy is uploaded on the Company's website at the web-link givenbelow: http://www.indiagelatine.com/financial/Whistle%20Blower%20Policy.pdf
In staying true to our values strength performance and passion and in line with ourvision of being one of the most respected companies in India the Company is committed tothe high standards of corporate governance and stakeholder responsibility. The details ofthe policy is explained in the Corporate Governance Report and also posted on the websiteof the Company.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:
The brief outline of the Corporate Social Responsibility (CSR) Policy of the companyand the initiatives undertaken by the company on CSR activities during the year are setout in Annexure of this Report in the format prescribed in the Companies (Corporate SocialResponsibility Policy) Rules 2014. The said Report on CSR Activities is annexed herewithas "Annexure-D" and forms an integral part of the Report.
The Policy is available on the website of the Company.
DISCLOSURE UNDER SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013:
The Company has zero tolerance towards sexual harassment at the workplace. The Companyhas adopted a Policy on Prevention Prohibition and Redressal of Sexual Harassment atWorkplace in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the Rules thereunder.
The Company has complied with the provisions relating to the constitution of theInternal Complaints Committee as per the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.
During the reporting year no complaint has been received with respect to sexualharassment.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
There have been no significant and material orders passed by the regulators or courtsor tribunals impacting the going concern status and the Company's future operations.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo as stipulated under Section 134 of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014 is set out herewith as "Annexure C" tothis Report.
PREVENTION OF INSIDER TRADING:
The Company has adopted a Code of Fair Disclosure as per regulation 8(1)& (2) andCode of Conduct as per regulation 9(1) & (2) of the SEBI (Prohibition of InsiderTrading) Regulations 2015 for Prevention of Insider Trading with a view to regulatetrading in securities by the Directors and designated employees of the Company. The coderequires pre- clearance for dealing in the Company's Shares and prohibits the purchase orsale of Company shares by the Directors and the designated employees while in possessionof unpublished price sensitive information in relation to the Company and during theperiod when the trading window is closed. All Directors and designated employees haveconfirmed compliance with the code.
The Board of Directors appreciates the devoted services of the workers staff andexecutives who have contributed to the efficient management of the affairs of the Company.
Your directors place on record their gratitude to the State and Central Government thecompany's Bankers Customers Suppliers and Shareholders for their continued co-operationand support.
| ||For and on behalf of the Board of Directors |
| ||Pradip P. Madhavji |
|Place: Mumbai ||Chairman |
|Date: 03.07.2020 ||(DIN: 00549826) |