Your Directors have pleasure in presenting their 30th (Thirtieth) AnnualReport on the business and operations of the Company and the Audited Financial Statementsfor the Year ended 31st March 2019.
1. Financial summary or highlights/Performance of the Company (Standalone &Consolidated)
| || || |
(Rs. in Lakhs)
|Particulars ||Standalone ||Consolidated |
| ||2018 - 19 ||2017 18 ||2018 - 19 ||2017 18 |
|Revenue including other income* ||23975.78 ||16481.66 ||23966.82 ||16471.36 |
|Total Expenses ||21041.38 ||14728.84 ||21041.38 ||14728.84 |
|Profit Before Tax ||2934.40 ||1752.82 ||2925.43 ||1742.52 |
|Provision for Taxation ||750.00 ||647.70 ||750.00 ||608.00 |
|Deferred Tax Liability ||80.74 ||36.06 ||80.74 ||36.06 |
|Profit After Tax ||2103.67 ||1069.05 ||2094.69 ||1098.45 |
|Other Comprehensive Income ||10.20 ||3.51 ||10.20 ||3.51 |
|Total Comprehensive Income ||2113.86 ||1072.56 ||2104.89 ||1101.96 |
* Revenue from Operations for the year 2017- 2018 was inclusive of excise duty Rs.285.91 Lakhs and share of profit on investment before introduction of Goods and ServiceTax (GST) effective from 1st July 2017 accordingly the revenue from operations isstrictly not comparable.
2. Brief description of the Company's working during the year/State of Company'saffair
The Company reported a standalone total revenue of Rs. 23975.78 Lakhs and consolidatedtotal revenue of Rs. 23956.52 Lakhs in Financial Year 2019 as compare to Standalonerevenue of Rs. 16481.66 Lakhs and consolidated revenue of Rs. 16471.36 Lakhs inthe previous year thereby registered growth of 45.47% for standalone and 45.51% forconsolidated over the previous year. The standalone and consolidated Profit Before Tax(PBT) were Rs. 2934.40 and Rs. 2925.43 as compare to Rs. 1752.82 and Rs.1742.52 respectively over the previous year. The standalone and consolidated Profit AfterTax (PAT) stood at Rs.2103.67 and Rs.2094.69 as compare to Rs.1069.05 and Rs.1098.45over the previous year.
3. Change in the nature of business:
There are no changes in the business line of the Company.
4A. Preference Shares:
The Directors of the Company has declared and paid Preference Dividend to FullyRedeemable Cumulative Preference shares of Rs.10486000 and Dividend Distribution Tax ofRs. 2145221/- during the Financial Year
1. On 30th June 2018 Rs. 4.85 per share amounting to Rs. 5199907/-
2. On 31st December 2018 Rs. 4.94 per share amounting to Rs.5286093/-
The Directors of the Company has declared and paid Preference Dividend to OptionallyConvertible Preference shares of Rs. 650000/- on 30th September 2018at Rs. 10/- per share.
4B. Equity Shares:
For the financial year 2018-19 based on performance of the company the board pleasedto recommend the final dividend of Rs. 1.50/- (Rupees One & Fifty Paise) perequity share.
The Board transferred amount of Rs. 34.67 Lakhs to General Reserves for the financialyear under review.
|6. Share Capital || || |
|Particulars ||Opening Balance as on 1st April 2018 ||Closing Balance as on 31st March 2019 |
|Equity shares: || || |
|- Number of shares ||20000000 ||20078793 |
|- Amount (in Rs.) ||200000000 ||200787930 |
|10% Cumulative Optionally Convertible Preference Shares#: || || |
|- Number of shares ||130000 ||*NIL |
|- Amount (in Rs.) ||13000000 ||*NIL |
|9.8 % Fully Redeemable Cumulative Preference Shares#: || || |
|- Number of shares ||1070000 ||1070000 |
|- Amount (in Rs.) ||107000000 ||107000000 |
* The Company has made Allotment of 78793 Fully Paid Equity Shares of Rs. 10/- each onConversion of 130000 Optionally Convertible Preference Shares of Rs. 100/- each at Boardmeeting held on 8th September 2018.
# Considered as borrowings under Ind AS 109 and hence now shown as share capital inFinancial Statement.
a. Buy Back of Securities
The Company has not bought back any of its securities during the year under review.
b. Sweat Equity
The Company has not issued any Sweat Equity Shares during the year under review.
c. Bonus Shares
The Company has not issued any Bonus Equity shares during the year under review.
d. Issue of Shares with Differential Rights
The company under the provision of Section 43 read with Rule 4(4) of the Companies(Share Capital and Debentures) Rules 2014 [Chapter IV] has not issued any shares withDifferential Rights.
7. Board of Directors and Key Managerial Personnel:
The present directors of the Company are:
|Sr. No ||Particular ||Designation |
|1. ||Mr. Haridas Kanani ||Chairman and Managing Director |
|2. ||Dr. Harin Kanani ||Joint Managing Director |
|3. ||Mr. Sanjay Mehta ||Independent Director |
|4. ||Mr. Hitesh Reshamwala ||Independent Director |
|5. ||Mr. Shyamsunder Upadhyay ||Executive Director |
|6. ||Mr. Anurag Surana ||Non-Executive Non-Independent Director |
|7. ||Dr. Ranjan Kumar Malik ||Independent Director |
|8. ||Ms. Avi Sabavala ||Independent Director |
Re-appointment of Independent Directors:
Pursuant to provisions of Section 149(10) of the Companies Act 2013 the IndependentDirectors viz. Mr. Hitesh Reshamwala and Mr. Sanjay Mehta have been reappointed subjectto approval of members as an Independent Directors for the second term of five (5) yearscommencing from 1st October 2019 to 30th September 2024. Thedetailed performance evaluation of Independent Directors was carried by the Board beforerecommending their reappointment to the shareholders.
During the year under review Dr. Ranjan Kumar Malik was appointed as an AdditionalIndependent Director and Ms. Avi Sabavala was appointed as an Additional Independent WomanDirector of the Company w. e. f. 6th October 2018.
The appointment of Dr. Ranjan Kumar Malik and Ms. Avi Sabavala were regularisedand appointed as Independent Directors of the Company at the Extra OrdinaryGeneral Meeting held on 16th October 2018.
All independent directors have separately submitted a declaration that each of themmeet the criteria of independence as laid down under section 149(6) of the Companies Act2013. Further there has been no change in the circumstances which may affect their statusas Independent Director during the year.
Retirement by Rotation:
As per the provisions of Section 152 of the Companies Act 2013 not less thantwo-third of the total number of Directors other than Independent Directors shall beliable to retire by rotation. One-third of these Directors are require to retire everyyear and if eligible these Directors qualify for reappointment. At the ensuing AGM Mr.Anurag Surana (DIN: 00006665) Non-Executive and Non-Independent Director retires byrotation and being eligible offers himself for reappointment.
A detailed profile of Mr. Anurag Surana along with additional information requiredunder Regulation 36(3) of Listing Regulations and Secretarial Standard on General Meetingsis provided separately by way of Annexure to Notice of the AGM.
Key Managerial Personnel
The Company has appointed Mr. Mahesh Tanna as Chief Financial Officer of the Company w.e. f. 27th August 2018.
The Company has appointed Mr. Lalit Karne as Company Secretary with effect from 19thJuly 2018.
8. Particulars of Employees
The information required under Section 197 (12) of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is attached as "Annexure 1" to this report. The Statement containingparticulars of employees as required under Section 197 of the Companies Act 2013 readwith Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 will be provided upon request. In terms of Section 136 of the Companies Act2013 the Report and accounts are being send to the members and others entitled theretoexcluding the information on employees particulars which is available for inspection bythe member at the Registered Office of the Company during business hours on all workingdays excluding Sunday and National Holidays upto the 30th AGM. If any memberinterested in obtaining a copy thereof such member may write to the Company Secretary inthis regards.
The Board of Directors met 15 times i.e. on 14th April 2018 3rdMay 2018 2nd July 2018 19th July 2018 28th August2018 1st September2018 8th September 2018 21stSeptember 2018 6th October 2018 16th October 2018 31stOctober 2018 5th November 2018 26th November 2018 9thFebruary 2019 and 26th March 2019 during the financial year under review.
Audit Committee Meetings:
The Audit Committee met 5 times during the year i.e. on 3rd May 201821st September 2018 16th October 2018 31st October2018 and 26th March 2019.
Nomination and Remuneration Committee Meetings:
The Nomination and Remuneration Committee met 4 times during the year i.e. on 3rdMay 2018 19th July 2018 6th October 2018 and 16thOctober 2018.
CSR Committee Meeting:
The CSR committee met 1 time during the year i.e. on 9th February 2019.
Annual Evaluation by the Board:
The Nomination and Remuneration Committee have defined the evaluation criteria for theBoard its Committees and Directors. The Board functioning was evaluated on variousaspects including inter alia degree of fulfilment of key responsibilities BoardStructure composition establishment and delegation of responsibilities to variouscommittees effectiveness of Board processes information and functioning.
The performance evaluation of the Independent Directors were carried out by the entireBoard excluding Directors being evaluated. Independent Directors were evaluated based onparameter such as qualification experience knowledge and competency. The performanceevaluation of Chairman Executive and Non-Executive Directors were carried out by theIndependent Directors who also reviewed the performance of the Board as a whole.
Familiarisation programme for Independent Directors
Pursuant to provisions of Regulation 25 of the Listing Regulations the Company hasformulated a programme for familiarizing the Independent Directors their roles rightsresponsibilities under the act and regulations nature of the industry in which companyoperates current business model of the Company etc. through various initiatives. Thedetails of aforementioned programme is available on company's website atwww.neogenchem.com.
10. Details of Subsidiary/Joint Ventures/ Associate Companies:
The Company does not have a subsidiary any associate Company Or a holding Company. TheCompany holds 90% of the capital contribution in a partnership firm M/s. Dhara Fine.Consolidated Financial Statements of the Company have been prepared in accordance withrelevant Accounting Standards issued by the Institute of Chartered Accountants of Indiaforming part of this report. In accordance with Section 136 of the Companies Act 2013the Audited Financial Statements including Consolidated Financial Statements and relatedinformation are available on Company's website at www.neogenchem.com. These documents arealso available for inspection by the Members at the Registered office of the Companyduring business hours on all working days except Sunday and National Holidays up to thedate of forthcoming AGM of the Company.
Members of the Company at the AGM held on 30th September 2014 approved theappointment of M/s. JMT & Associates Chartered Accountants (Firm Registration No.104167W) as a Statutory Auditors for the period of five years till the conclusion ofAnnual General meeting to be held for the financial year ended 31st March 2019.The Board of Directors in their meeting held on 25th May 2019 approved thereappointment of JMT & Associates as Statutory Auditors for the further period of 5consecutive years from the conclusion of ensuing AGM till the conclusion of 34thAGM subject to approval of Members in ensuing Annual General Meeting of the Company.
M/s. JMT & Associates have expressed their willingness to get appointed and haveconfirmed that the appointment if made would be within the limit specified under Section141(3)(g) of the Act and they are not disqualified to be reappointed as a StatutoryAuditors in terms of provisions of Section 139 and 141 of the Act and the Companies (Auditand Auditors) Rules 2015. As required under Regulation 33(1)(d) of Listing RegulationsM/s. JMT & Associates have confirmed that they hold a valid certificate issued byPeer Review Board of the Institute of Chartered Accountants of India.
Based on the recommendation of the Audit Committee at its meeting held on 25thMay 2019 Board of Directors seek approval of the Members of the Company forreappointment of M/s. JMT & Associates Chartered Accountants (Firm Registration No.104167W) as a Statutory Auditors of the Company for the period of 5 consecutive years fromthe conclusion of this AGM till the conclusion of 34th AGM.
Statutory Auditors report
The Statutory Auditors Report to the shareholders for the year under review doesnot contain any modification opinion or qualifications and the observations and commentsgiven in the report of the Statutory Auditors read together with Notes to Accounts andAuditors remarks are self-explanatory and hence do not call for any further explanation orcomments under Section 134(f)(i) of the Companies Act 2013.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and Companies(Appointment and Remuneration of Managerial Personnel) Rule 2014 as amended the Companyhas appointed DVD and Associates Company Secretaries in Practice to undertake theSecretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as"Annexure- 2" to this Report.
M/s. Y.R Doshi & Associates Cost Accountants (Firm Registration No. 000286) wereappointed as Cost Auditor of the Company for Financial Year 2018-19 as per the provisionsof Companies Act 2013.
Reporting of Frauds:
There was no instance of fraud during the year under review which required theStatutory Auditors to report to the Audit Committee and/or Board under Section 143(12) ofthe Companies Act 2013 and Rules made thereunder.
12. Management Discussion and Analysis Report
The Management Discussion and Analysis Report is presented in a separate sectionforming part of this Annual Report.
13. Risk management policy
In terms of the requirement of the Act the Company has developed and implemented theRisk Management Policy and the same is reviewed periodically by the Board of Directors.Salient features of the policy are as under:- Neogen Chemicals Limited is committed to theidentification and comprehensive management of risk.
Risk is the effect of uncertainty on Neogen Chemicals Limited objectives and isinherent in our business. Risk management allows us to prevent losses or capitalize onopportunities. Understanding risk and our appetite for risk will be key considerations inour decision making. We aim to achieve a risk management culture through a series of riskmanagement principles and policies.
14. Vigil Mechanism/Whistle- Blower Policy:
The Company has adopted a Whistle- Blower Policy' for Directors and Employees toreport genuine concerns and to provide adequate safeguards against victimisation ofpersons who may sue such mechanism.
The functioning process of this mechanism has been elaborately mentioned in theCorporate Governance Report forming a part of this Annual Report. The said policy hostedon Company's website at https:// neogenchem.com/company-policy/.
Nomination and Remuneration Policy:
The Board of Directors on the recommendation of Nomination and Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and todevelop and recommend the Board a set of Corporate Governance Guidelines.
15. Extract of annual return:
As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) ofthe Companies (Management and Administration) Rules 2014 an extract of annual return in MGT9 as a part of this Annual Report as "Annexure 3"
16. Declaration by Independent Directors
The Independent Directors of the Company have submitted declaration of independenceconfirming that they meet the criteria of independence under Section 149(6) of theCompanies Act 2013 and Listing Regulation.
17. Material changes and commitments if any affecting the financial position of thecompany which have occurred between the end of the financial year of the company to whichthe financial statements relate and the date of the report
The Company successfully made its Initial Public Offer (IPO) of 6155813 Equity Shares@ Rs. 215/- (including a share premium of Rs. 205/-) per equity shares of Rs. 10/- eachwhich includes a fresh issue of 3255813 Equity Shares of Rs. 10/- each for raising fundsfor the Company to the tune of Rs. 7000 Lakhs and offer for sale by the sellingshareholders of 2900000 Equity Shares of face value of Rs. 10/- each of the Company.
The 1070000 9.8% Fully Redeemable Cumulative Preference shares were redeemed in fullout of the proceeds of fresh issue of Equity Shares.
18. Details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and company's operations in future
During the year under review there has been no such significant and material orderspassed by the regulators or courts or tribunals impacting the going concern status andcompany's operations in future.
19. Details in respect of adequacy of internal financial controls with reference to theFinancial Statements.
The internal financial controls with reference to the Financial Statements arecommensurate with the size and nature of business of the Company.
The Company has not accepted any deposit as per the provisions of Section 73/76 ofCompanies Act 2013 read with the Companies (Acceptance of Deposit Rules) 2014.
21. Particulars of loans guarantees or investments under section 186
The Company has not given any loan has not provided any guarantee or security for anyloan nor has made any investments during the Financial Year and therefore the provisionsof Section 186 of Companies Act 2013 are not applicable.
22. Particulars of contracts or arrangements with related parties:
The Board of Directors has adopted a policy on Related Party Transactions. The saidpolicy is available on Company's website https://neogenchem.com/ company-policy/.
The object of policy is to ensure proper approval disclosure and reporting oftransactions as applicable between the Company and any of its related parties. The RelatedParty Transactions are as mentioned in Notes to Accounts. All transactions are in OrdinaryCourse of business and are at arm's length. No material contracts or arrangements withrelated parties were entered into during the year under review. Therefore there is norequirement to report any transaction in form AOC-2 in terms of Section 134 of theCompanies Act 2013 read with Rule 8 of the Companies (Accounts) Rule 2014.
23. Obligation of the company under the sexual harassment of women at workplace(Prevention Prohibition and Redressal) Act 2013
In order to prevent sexual harassment of women at work place a new act The SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 hasbeen notified on 9th December 2013. Under the said Act every company isrequired to set up an Internal Complaints Committee to look into complaints relating tosexual harassment at work place of any women employee.
Company has adopted a policy for prevention of Sexual Harassment of Women at workplaceand has set up Committee for implementation of said policy. During the year Company hasnot received any complaint of harassment.
24. Conservation of energy technology absorption and foreign exchange earnings andoutgo
The disclosure of particulars with respect to Conservation of Energy TechnologyAbsorption and Foreign Exchange Earnings and Outgo as required under Sub-section (3)(m)of Section 134 of the Companies Act 2013 read with Rule 8 (3) Companies (Accounts) Rules2014 is enclosed herewith as " Annexure 4 " to this Board's Report.
25. Corporate Social Responsibility (CSR)
In accordance with the requirements of the provisions of Section 135 of the CompaniesAct 2013 the Company has constituted CSR Committee. The Company has also formulated aCSR Policy which is available on Company's website at https://neogenchem.com/company-policy/.
During the year under review in compliance with the provisions of Section 135 of theCompanies Act 2013 the Companies (Corporate Social Responsibility) Rules 2014 and thevarious notifications/circulars issued by the Ministry of Corporate Affairs the Companyhas contributed an amount of Rs. 27.25 Lakhs to various organisations engaged inactivities specified in Schedule VII of the Companies Act 2013. The Salient features ofthe CSR policy along with the Report on CSR activities are given in "Annexure- 5"to this Directors' Report.
26. Directors' Responsibility Statement
The Directors' Responsibility Statement referred to in clause (c) of sub-section (3) ofSection 134 of the Companies Act 2013 shall state that
a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures if any;
b) 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 31stMarch 2019 and of the profit of the company for that period;
c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
d) the Directors have prepared the annual accounts on a going concern basis;
e) the Directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and
f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
27. Transfer of Amounts to Investor Education and Protection Fund
Your Company did not have any funds lying unpaid or unclaimed for a period of sevenyears. Therefore there were no funds which were required to be transferred to InvestorEducation and Protection Fund (IEPF).
28. Corporate Governance Report and Certificate:
In compliance with Regulation 34 read with Schedule V(C) of Listing Regulations areport on Corporate Governance and the certificate required under Schedule V(E) of ListingRegulations received from DVD and Associate Practising Company Secretary forms part ofthis Annual Report and attached herewith "Annexure -6"
29. Compliance of Secretarial Standard of ICSI
In terms of Section 118(10) of the Companies Act 2013 the Company is complying withthe Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI)and approved by Central Government with respect to Meetings of Board of Directors.
30. Listing Agreement
In Compliance with SEBI Circular No. CIR/CFD/ CMD/6/2015 dated 13th October2015 the Company has executed a Uniform Listing Agreement with BSE Limited and NationalStock Exchange of India Limited where the Shares of the Company got listed on 8thMay 2019. The Company has paid Annual Listing Fees to both the Stock Exchanges.
31. Prohibition of Insider Trading
In Compliance with SEBI (Prohibition of Insider Trading) Regulation 2015 the Companyhas adopted a Code of Conduct for Prevention of Insider Trading in the Organisation.The said Code is available on Company's website at https://neogenchem.com/company-policy/.
32. Committees of the board
In order to strengthen its functioning the Board of Directors has constituted thefollowing Committees as per the requirements of Companies Act 2013 and the ListingRegulations:
a. Audit Committee (Reconstituted on 16th October 2018)
b. Nomination and Remuneration Committee; (Reconstituted on 16th October2018)
c. Stakeholders' Relationship Committee; (Constituted on 16th October 2018)
d. Corporate Social Responsibility Committee; (Reconstituted on 16thOctober 2018)
Details of the Committees along with their charter composition and meetings heldduring the year are provided in the Corporate Governance Report which forms part of thisAnnual Report.
The Directors express their appreciation for the sincere co-operation and assistance ofCentral and State Government authorities bankers customers suppliers and businessassociates. Your Directors also wish to place on record their deep sense of appreciationfor the committed services by your Company's employees. Your Directors acknowledge withgratitude the encouragement and support extended by our valued shareholders.
| ||For and on behalf of the Board of Directors |
| ||Neogen Chemicals Limited |
| ||Haridas Kanani |
|Place: Thane ||Chairman and Managing Director |
|Date : 9th August 2019 ||DIN: 00185487 |