WHITE ORGANIC AGRO LIMITED
(FORMERLY KNOWN AS WHITE DIAMOND INDUSTRIES LIMITED) CIN:L01100MH1990PLC055860
The Directors have the pleasure in presenting the 28th Annual Report onthe business and operations of your Company and the Audited Financial Statements for theyear ended 31st March 2018.
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White Organic Agro (BSE: WHITEORG) is Mumbai based only listed entityin organic farming and retail with a vision to empower the farmers and tap ever-expandingmarket for organic food. The Company's flagship store is located in the central suburb ofMumbai i.e; Chembur selling over 250 organic products in 12 major categories and 17 subcategories from cereals to pulses grains to vegetables fruits to health supplements andskincare products to snacks (by following strict quality checks at each level ofactivity) it has become a preferred place for people who are health conscious and lookfor chemical-free food items.
White Organic Agro is the first listed pure play entity in the Indianorganic food sector. Darshak Rupani Managing Director of White Organic Agro who tookover the Company in 2010 initially was into diamond trading activity. He howeverrealized diamond trading business was losing its sheen and soon led the Company todiversify into organic food business being from the farming background. The Company hasalso hired a team of experienced professionals who were into the business of organicfarming for over 10 to 12 years. Also signed an additional pact for leasing 108 acres ofland in Gujarat for organic farming and cultivation currently the Company has 530 acresof land on leased basis.
Currently the Company grows Aloe Vera Moringa Dragon Fruit NilgiriAshwagandha and some medicinal herbs. The Company has also tied-up with over 530 farmerspracticing organic methods of farming in 2800 acres of fertile land of Gujarat theCompany aim is to expand to 3500 acres in one year. We are exploring models like onlinee-store and tie ups with e-marketplaces like Grofers Big Basket and Amazon and theexport channel with strategic tie-ups with international companies.
In the financial year 2017-18 the Company has earned a profit of INR.225.712 lacs on standalone basis as compared to Profit of INR. 86.692 Lacs during theprevious financial year 2017-18. Highlights of consolidated financial performance form apart of Management Discussion and Analysis Report.
CHANGE IN NATURE OF BUSINESS
There was no change in nature of business.
During the Financial Year 2017-2018 :
A) The Company has not issued any equity shares with differentialrights. B) The Company has not issued any Sweat Equity Shares.
C) Issue of Employee Stock Options: The Company has not issued anyEmployee Stock Options.
The Company has allotted 5000000 warrants convertible into equityshares of equivalent amount to promoters and persons other than promoters on December 212018. On excise of options attached to warrants the Company has allotted 5000000 equityshares of Rs. 10/- face value at Rs. 30.50/- to warrants convertible to equity share ofequivalent amount to promoters and persons other than promoters on January 12 2018.
The Company has not accepted any deposits falling within the ambit ofSection 73 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules2014 during the Financial Year under review or any preceding financial years. Hence noamount of principal or interest is outstanding / repayable.
BORROWINGS FROM DIRECTORS
The Company has borrowed certain funds from Directors to meet its shortterm liquidity requirements. Details of the same form a part of notes to the financialstatements. By the end of reporting financial all these funds have been repaid. YourCompany stands free of any kind of debt and borrowing as on 31st March 2018.
The Board of Directors does not propose to declare any Dividend for theFinancial Year 2017-18.
TRANSFER TO IEPF
Amount of INR 45669/- is due to be transferred to IEPF account.
The Company has not transferred any amount to the Reserves.
Mr. Prashantt Rupani (DIN: 03138082) is liable to retire by rotationat the 28th Annual General Meeting of the Company. Being eligible he has offered himselffor re-appointment. The Board of Directors recommend to the members to reappoint him atthe 28th Annual General Meeting. Apart from this there are no changes in the Compositionof the Board of Directors of the Company.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received the declarations from the IndependentDirectors under Section 149(7) of the Companies Act 2013 stating that they meet thecriteria of independence as laid down in Section 149(6) of the Companies Act 2013 andRegulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015.
Annual evaluation of the performance of the Board its committees andindividual Directors pursuant to the provisions of the Act and the corporate governancerequirements as prescribed by Securities and Exchange Board of India Listing Regulationshas been carried out.
The performance of the board was evaluated after seeking inputs fromall the directors on the basis of the criteria such as the board composition andstructure effectiveness of board processes information and functioning etc.
The performance of the committees was evaluated by the board afterseeking inputs from the committee members on the basis of the criteria such as thecomposition of committees effectiveness of committee meetings etc.
The Board and the Nomination and Remuneration Committee reviewed theperformance of the individual Directors on the basis of the criteria such as thecontribution of the individual director to the board and committee meetings.
In a separate meeting of Independent Directors performance ofnon-independent directors and performance of the board as a whole was evaluated takinginto account the views of executive directors and non-executive directors. Performanceevaluation of independent directors was done by the entire board excluding theindependent director being evaluated.
The Board of Directors expressed their satisfaction with the evaluationprocess.
INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has adequate system of internal financial control and riskmitigation system commensurate with the size of the Company and nature of its business.Detailed disclosure under the said head shall be included under the head ManagementDiscussion and Analysis Report.
NUMBER OF MEETINGS OF THE BOARD
The Board met 9 times during the financial year and details of the sameare mentioned in the Corporate Governance report which forms a part of the Board's report.The maximum interval between any two meetings did not exceed 120 days as prescribed inthe Companies Act 2013.
COMMITTEES OF THE BOARD
Currently the Board has the following committees:
1. The Audit Committee
2. The Nomination and Remuneration Committee
3. Stakeholders relationship Committee
The Details of the Committees of the Board is mentioned in theCorporate Governance Report which forms a part of the Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT
As required under the Provisions of section 134(5) of the CompaniesAct 2013 the Directors hereby confirm:
1. That in preparation of the Annual Accounts for the year ended 31stMarch 2018 the applicable accounting standards have been followed along with the properexplanation relating to material departures if any;
2. And applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company as at March 31 2018 and of the profit of the company for the year ended onthat date;
3. That the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the company and for preventing anddetecting fraud and other irregularities.
4. That the Directors have prepared the annual accounts on a goingconcern basis.
5. That the Directors had laid down Internal Financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively;
6. That the Directors had devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems were adequate andoperating effectively.
ORDERS PASSED BY REGULATORY AUTHORITY
During the Financial Year under review there were no material orderspassed by the regulators or courts or tribunals impacting the going concern status andcompany's operations in future.
SUBSIDIARY ASSOCIATES AND JOINT VENTURE COMPANIES
Your Company has a Wholly Owned Subsidiary named White Organic RetailPrivate Limited (Formerly known as Sapna Infraventure Private Limited).
3 NEW SUBSIDIARIES DURING THE YEAR
During the year under review the Company has formed another foreignsubsidiary White Organic Agro F.Z.E in Ajman Free Trade Zone United Arab Emirates. TheCompany also is substantial partner to Future Farms LLP with 75% stake having a totalinvestment size of Rs. 3.75 Crores.
In terms of provisions contained in Section 129(3) of the Act readwith Rule 5 and Rule 8 of the Companies (Accounts) Rules 2014 a report on theperformance and financial position of the said subsidiary Company is provided asAnnexure A' to this report.
3 BRIEF OVERVIEW ON SUBSIDIARIES:
3 White Organic Retail Limited (Formerly known as Sapna InfraventurePrivate Limited)
The said subsidiary Company is into retailing and trading of theproduce of leased farms of White Organic Agro Limited and by products of ICS group farms.The company had commenced the operations of its Organic Products Distribution andRetailing in October 2016. The company had commenced commercial operations of first of itskind only organic store located at 6 Krushal commercial complex Amar Mahal ChemburMumbai. The area is densely populated and dominated by highly educated and healthconscious community. There is enormous and untapped growth Prospect in the areas viz :-organic farming cultivation retailing and marketing.
The management of company has all the organic products under a singlebrand name "White Organics". The management has planned staggered introductionof various ranges of organic products (viz :- pulses spices cereals veggies etc) undera single brand. The management believes that to create a better presence and perceptionit is better to have single brand which shall help to market all the products in betterway. It shall be easy to introduce further more products and get the better presence andbetter profits with minimum efforts compared to having more brands.
The management believes buying organically grown food and healthypowders free of harmful chemicals bursting with more nutrition taste and sustainablesustenance is a direct vote for immediate health and the hopeful future of generations tocome. Commercially it is very much viable business and biggest consumer market of theWorld is India.
Future Plans for Distribution and Retail: The management has launchedthe franchisee module for the retail network. In the first phase of expansion the companyis looking to setup 40+ retail outlets across Mumbai Pune Nasik Ahmedabad SuratVadodra Rajkot and different educated Health conscious and densely populated sectorsacross India. With the help of these distribution network / franchisee model themanagement is very optimistic for the value addition and sales growth of the company.
Products : The company has also launched almost 230+ different productsin wide range of categories viz :- Grains Cereals Pulses Snacks Syrups CapsulesHealth Powders Churans Mukhwas Incence Sticks Soap Juices and many more. The companyhas also launched the capsule range; The Company has also launched many medicinal andnutritional powders; all these products ranges gives the retail segment a broader scopeand gives the edge of retailing and distribution everything under one roof. There istremendous demand for the all these products in domestic and international markets.
The management is actively participating in our mission to create asustainable environment of bringing health happiness and True Wellness to our customers.Owing to these launches the retail segment in a broader scope and gives the retaildivision the edge of retailing and distribution everything under one roof. There istremendous demand for the all these products in domestic and international markets.
The advanced processing methods and dehydration technologies ensurethat our herbs retain their maximum level of potency for the highest quality mosteffective pure and naturally organic True Wellness products available in the markettoday.
The management believes Buying organically grown food and healthypowders free of harmful chemicals bursting with more nutrition taste and sustainablesustenance is a direct vote for immediate health and the hopeful future of generations tocome. Commercially it is very much viable business and biggest consumer market of theWorld is India.
e-Commerce integrated solutions for the Brand "WhiteOrganics"
In-line with the growth prospect and the vision of moving forward withdigital India also as per the current scenario of the country opting for more cashlesstransactions is the need of the time. The management has commenced eCommerce integratedwebsite: www.whiteorganics.co.in and very soon planning to unveil dedicated mobileapplication.
Exports: The Retail division of the company shall also commence exportsvery soon. The management believes buying organically grown food and healthy powders freeof harmful chemicals bursting with more nutrition taste and sustainable sustenance is adirect vote for immediate health and the hopeful future of generations to come.Commercially it is very much viable business and biggest consumer market of the World isIndia.
The company has already received few inquiries from differentdeveloping countries for exports of the Health Range of Organic Powders and Capsules. Themanagement is determined to spread the wings internationally very soon.
3 Future Farms LLP
Future Farms LLP (FFL) is a Rajkot based limited liability partnershipfirm. FFL is directly involved in agricultural activities since past many years. Based inthe heart of Gujarat and having direct access to the organic lands in and across RajkotFuture Farms has an edge in the Agri sector. The management strongly believes thatinvesting in FFL will help White Organics to take a much awaited major leap in the organicagricultural field.
FFL with a strong team of supervisors agronomist and labors isactively involved in agricultural cultivation activities. On direct cultivation frontlike White Organics Agro Ltd. FFL is also doing aloevera and moringa cultivation in andaround Rajkot.
In addition to that FFL have more than 530 farmers registered underits organic programme. Those 530 farmers having an aggregate land of more than 2800acres cultivate 56 different crops as per the crop planning allocated by FFL. The pool ofassociated farmer and products grown by those farmers will also contribute in expandingorganic exports in years to come. A meticulous planning and good co-ordination between thefarmers and our Management shall be set in such a manner that the high quality organicproduction is possible. Our harvest is produced as custom organic Products fromPre-defined farmers; under the supervision of Agronomists and Cultivation Technologists.
3 White Organic Agro F.Z.E
The company has commenced its full operations in its wholly ownedsubsidy in Ajman UAE.
Ajman Free Zone Authority or AFZA is strategically situated Free Zoneat the entrance of the Arabian Gulf. AFZA was established in the year 1988 and was grantedindependent status by the ruler of Ajman.
Benefits of Ajman Free Zone Company Setup
A company established in Ajman can hold an account in a bank in the UAE
Resident or employment visas for investor and employees
A company located in Ajman enjoys 100% legal exemption from all imports and exportduties.
Cheap energy: Companies in Ajman enjoy low energy costs; it is popular for energyintensive businesses such as manufacturing to start their business in Ajman.
Foreign Investors can obtain a 20 year land lease which is renewable for another 20years. This guarantees 40 years of legitimate tax exempt operations.
Registering your company in Ajman will allow you to own an office and do business inUAE. 100% foreign ownership and repatriation of capital and profits.
Exempted from financial reports submission and audit.
Lowest tariffs in the region: Foreign investors enjoy lower set up costs thanequivalent free zones in UAE.
This makes business registration a cost effective solution to internationalentrepreneurs.
The most economical wage structure and easy access to vast work force
Total exemption from all import and export duties
Total elimination of all service charges and hidden fees.
No corporate tax
No personal income tax
Competitive pricing on premises
No hidden fees
No hidden charges
Exceptionally low handling charges
Lowest lease prices
World class infrastructure
Single Window Clearances (Licensing Immigration etc)
Low Labor Cost
No Red Tape
The subsidiary in Ajman would prove as a gateway for the internationalmarket where the company would be exporting Organic produce.
Pursuant to Section 139 and Section 141 of the Companies Act 2013 andrules made thereunder M/s. Gupta Raj & Co (FRN: 001687N) were appointed as theStatutory Auditors of the Company for a period of 5 years to hold office from theconclusion of (27th) AGM till the conclusion of the 32nd AGM to be held in the year 2022(subject to ratification of their appointment at every AGM).
However Ministry of Corporate Affairs vide its notification dated 7thMay 2018 has done away with the requirement of the ratification of the appointment ofStatutory Auditors at every Annual General Meeting and hence M/s. Gupta Raj & Co.shall continue as Statutory Auditors for the remaining period of the term as mentionedabove.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
The information relating to conservation of energy and technologyabsorption by the Company is annexed to the report as "Annexure B"
EXTRACT OF ANNUAL RETURN
The Extract of Annual Return in form MGT-9 as prescribed under theprovisions of Section 92 of the Companies Act 2013 is annexed to the report as"Annexure C". Further Annual return once file shall be available on thewebsite of the Company under the section Investor Relations
FOREIGN EXCHANGE EARNING AND OUTGO
During the year under review there were no earnings in foreignexchange and the foreign exchange out go amounted to INR. 883638 /-. No earnings / outgowere booked during the erstwhile financial year.
CORPORATE SOCIAL RESPONSIBILITY
The provisions of Section 135 of the Companies Act 2013 regardingexpenditure towards Corporate Social Responsibility was not applicable to the Company forFinancial Year 2017-18. However the Company voluntarily extends financial support in theform of donations to certain social welfare organizations.
Our Corporate governance philosophy: Your Company's philosophy onCorporate Governance has been to ensure fairness to the stakeholders with fulltransparency and to enhance and retain investor trust. We always seek to insure that ourperformance is driven by integrity.
Our Corporate governance report for the financial year ended on March31 2018 forms a part of this Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS
The report on management discussion and analysis as per the SEBI(Listing Obligations and Disclosures Requirements) Regulations 2015 forms integral partof this Annual Report.
VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES
The Company has a Vigil Mechanism policy to report genuine concerns orgrievances. The detail forms a part of the Corporate Governance Report.
MATERIAL CHANGES AND COMMITMENTS IF ANY
There were no material changes and commitments affecting the financialposition of the Company which have occurred between the end of the financial year of theCompany to which the financial statements relates and the date of the report.
NOMINATION AND REMUNERATION POLICY
The Company has policies framed for remuneration and appointment ofdirectors Key managerial personnel and senior management of the company includingcriteria for determining qualifications independence of Director and other matters asrequired under Section 178(3). The composition and policies forms a part of the CorporateGovernance Report and the said policies is available at the registered office of theCompany.
PARTICULARS OF TRANSACTION BETWEEN THE COMPANY AND NON EXECUTIVEDIRECTORS
During the year under review the company has not entered into anytransaction with its Non-Executive Directors.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OFTHE COMPANIES ACT 2013
During the year under review the Company has not given any guaranteeto any party as provided under Section 186 of the Companies Act 2013. The details ofloans granted and investments made by the Company are provided in note No. 3 4 and 9 tothe financial statements.
Pursuant to the provisions of Section 204 of the Companies Act 2013 andthe rules made there under the Company has appointed M/s. Rachana J Maru CompanySecretary in Practice (C.P. No 16210) to undertake the Secretarial Audit of the Companyfor the F.Y. 2017-2018.
The Secretarial Audit Report is included as "Annexure D" andforms an integral part of this report.
AUDITOR'S CERTIFICATE ON CORPORATE GOVERNANCE
As required under SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the auditors' certificate on corporate governance isenclosed as "Annexure E" to the Board's report.
RELATED PARTY TRANSACTIONS
All contracts arrangements and transactions entered by the Companywith related parties during FY 17-18 were in the ordinary course of business and on anarm's length basis. During the year the Company did not enter into any transactionscontracts or arrangements with related parties that could be considered material inaccordance with the Company's policy on related party transactions. Accordingly thedisclosure of related party transactions in Form AOC-2 is not applicable
The details of Related Party Transactions entered into by the Companywhich are at Arm's Length Price and in Ordinary Course of Business are provided in NoteNo. 29 of the Financial Statements.
DIRECTOR'S COMMENTS ON QUALIFICATIONS OR OBSERVATIONS
Statutory Auditors' Report
The comments mentioned in the audit report with respect to the fundsthat need to be transferred to IEPF account; the Board of Directors has initiated theprocess to transfer the funds to the IEPF account. Further the Statements made by theAuditors in their report are self-explanatory and doesn't require any comments by theBoard of Directors.
Secretarial Auditor Report
With respect to comments mentioned in the report issued by SecretarialAuditors we would like to state that the Company is in the process of appointing aNon-Executive Director in order to rectify composition of Nomination & RemunerationCommittee Internal Auditor and Company Secretary and in the process of findingappropriate candidates for the same. Other points mentioned in the said report areself-explanatory and necessary measures will be taken by the Board to adhere to theregulatory requirements.
RISK MANAGEMENT POLICY
The Company has adopted a Risk Management Policy which helps theCompany in identification of risk lays down procedure for risk assessment and procedurefor risk minimization.
PARTICULARS OF EMPLOYEES
The Company wishes to place on record their appreciation to thecontribution made by the employees to the operations of the company during the period.
During the year under review there were no employees who were inreceipt of the remuneration beyond the limits prescribed under Rule 5 (2) of Companies(Appointment and Remuneration) Rules 2014 and therefore no disclosures need to be madeunder the said section. Further the details of the top 10 employees in terms ofremuneration drawn pursuant to rule 5(1) and 5(2) of Companies (Appointment andRemuneration) Rules 2014 shall be available at the registered office of the Companyduring the business hours and the details ratios of the remuneration of each Director tothe median remuneration to the employees of the Company for the financial year areenclosed as "Annexure F" to the Board's Report. The Company had 5 permanentemployees during the year 17-18.
Mr. Darshak Rupani Managing Director of the Company and Mr. PrashanttRupani Director are also Directors on the Board of Wholly Owned Subsidiary WhiteOrganic Retail Private Limited however they were not in receipt of any remuneration fromthe said subsidiary.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:
The Company has complied with provisions relating to prevention ofSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013to the extent applicable. During the year under review there were no cases filed relatingto the Sexual Harassment of Women at Workplace.
MAINTENANCE OF COST RECORDS:
Maintenance of cost records as specified by the Central Governmentunder sub-section (1) of section 148 of the Companies Act 2013 is not applicable to theCompany.
Your Directors wish to place on record their sense of appreciation forthe excellent support received from the government authorities bankers consultants andthe dedicated efforts of all employees in the working of the Company.
By Order of the Board
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|Mr. Darshak Rupani || |
Mr. Prashantt Rupani
|Managing Director || |
|DIN: 03121939 || |
Date : 31/08/2018 Place: Mumbai