About
Fine Organic Industries Ltd
Fine Organic Industries is a pioneer and the largest producer of oleochemical-based additives in India and a key producer globally. The Company produces a wide range of specialty plant derived oleochemicals-based additives used in the foods, polymers, plastic, cosmetics, personal care, paint, ink, coatings feed nutrition and other specialty application in various industries. It is the first largest producer of to introduce slip additives in India. Its facilities are located at Ambernath, Badlapur and Dombivali, producing over 450 specialty additives.
The Company has a dedicated research and development (R&D) centre located in Mahape, Navi Mumbai. The Company provides specialised products and technical services to the end-user industry, reinforced by inhouse manufacturing and design/engineering facilities, well equipped R&D, and a techno-commercial approach. As at 31st March 2023, the Company had a range of over 470 different products sold under the Fine Organics' brand and 850+ direct customers (i.e., end-users) and over 180 distributors (who sold its products to more than 5,000 customers) from more than 80 countries.
Ramesh Maganlal Shah and Prakash Damodar Kamat founded Fine Organic Industries' in early 1970 at Mumbai, which was registered in 1973 as a partnership firm under the Indian Partnership Act, 1932. It commissioned its first facility in Dombivli MIDC Industrial Area in 1973, i.e. the Dombivli Facility which carried out processing and supply of food additives in Gujarat and Maharashtra. In 1975, Mukesh Maganlal Shah joined the partnership firm and expanded the business across India. Thereafter, in 1982, then existing partners incorporated a private limited company at Mumbai under the name of Smoothex Chemicals Private Limited' for further expansion of the business. In 1988, the partnership firm had set up a production facility of various specialty additives i.e. the Second Ambernath Facility. Subsequently, Smoothex Chemicals expanded the production facilities in Malaysia and Thailand in 1990 and 1993, respectively. Further, the then existing partners founded another partnership firm in the name of Olefine Organics' for enhancing the capacity in order to meet the market demands. In 1995, the then existing promoters incorporated another private limited company under the name of Oleofine Organics (India) Private Limited for expanding the capacity for polymer additives.
Fine Organic Industries Limited (FOIL) was originally incorporated as a private limited company on May 24, 2002 at Mumbai under the name 'Fine Organic Industries (Mumbai) Private Limited'. The Company got converted into a public limited company and the name of Company was changed to Fine Organic Industries Limited with effect from November 2, 2017.
A plot of MIDC land of 39,412 square metre at Additional Ambernath was procured under a lease for 95 years. In 2003, then existing promoters incorporated another private company under the name of 'Fine Research & Development Centre Private Limited' for undertaking dedicated research and development in their existing products, and established the Research and Development Centre in Navi Mumbai. In the First Ambernath Facility, the company commissioned a fatty acids esters facility in 2006. In 2008, the company commissioned a polymer additives unit at its First Ambernath Facility.
In January 2009, the name of the Company was changed to Fine Organic Industries Private Limited for a better depiction of the nature and scale of operations and the business of the Company which is not limited to Mumbai only, as contained in the original name, with effect from February 16, 2009. In 2010, polymer additives capacity was expanded at the company's First Ambernath Facility.
Pursuant to the order passed by the High Court of Bombay on June 17, 2011, Oleofine Organics (India) Private Limited was amalgamated with the Company. In 2012, the company commissioned additional food and polymer additives unit at its First Ambernath Facility. In 2013, the Company incorporated its wholly owned Subsidiary at the United States of America.
In 2014, the Company established Joint Venture with Zeelandia International at Mumbai to manufacture food premixes and to maximize the benefits of synergies.
In 2015, the company commissioned additional food and polymer capacity at its First Ambernath Facility. In 2016, the Company incorporated its wholly owned Subsidiary in Europe.
Pursuant to the order passed by the National Company Law Tribunal, Mumbai on June 19, 2017, Fine Speciality Surfactants Private Limited, a company incorporated on August 19, 1987, and engaged in the manufacture, distribution and production of speciality chemicals, and Fine Research & Development Centre Private Limited were amalgamated with the Company. Thereafter, on July 18, 2017, the Company has sub-leased the facility and general plant and machinery at Dombivli, MIDC from Fine Organic Industries partnership firm pursuant to the leave and license agreement.
In 2018, the company signed a joint venture agreement with Germany's Adcotec for application, development, marketing, distribution and sales activities of food and food additives.
The company launched an initial public offer (IPO) during the period from 20 June 2018 to 22 June 2018. The IPO comprised of offer for sale of 76.64 lakh shares by promoters. There was no fresh issue of shares by the company. The IPO was priced at Rs 783 per share. The stock made its debut on the bourses on 2 July 2018.
On 13 July 2018, Fine Organic Industries informed the stock exchanges that it has signed agreement with Citi Bank N.A., Jersey Branch for availing external commercial borrowing of USD 18.75 million to finance the capital expenditure of the Company.
During the FY 2017-18, pursuant to the resolutions passed by the Board of Directors at its meeting held on 5th July, 2017 and the scheme of amalgamation, 2,80,000 equity shares of face value of Rs 10 each were allotted to the shareholders of Fine Speciality Surfactants Private Limited and Fine Research and Development Centre Private Limited. Further, pursuant to a resolution passed by our Shareholders on 22nd September, 2017 in their Extra-Ordinary General Meeting, for issue of Bonus shares in the proportion of two equity shares for every one equity share, 1,02,19,992 equity shares were allotted to the shareholders as of the record date, being 10th August, 2017 pursuant to the resolution passed by the Board in its meeting held on 16th October, 2017.
The Company carries on business, in India and abroad, as manufacturers, processors, suppliers, distributors, dealers, importers, exporters of flavours, perfumes and flavouring chemicals, oil and colours, surface active agents, emulsifiers, preservatives, clouding agents, textile auxiliaries, lubricants, oleo chemicals and their derivatives, fatty acids and their derivatives, salt and esters. It also develops, processes, manufactures, deals in and carries on business in India and abroad in fine and heavy chemicals, oils, fats, dyes, dyestuffs, dye retardants, dye assistants, organic and inorganic chemicals.
As on March 31, 2021, the Company has two subsidiaries i.e. Fine Organics (USA), Inc. and Fine Organics Europe BV and two joint venture companies i.e. Fine Zeelandia Private Limited and FineADD Ingredients GmbH. On May 6, 2021, Company executed Joint Venture Agreement with Oleofine Organics Thailand Co., Ltd. (OFT) and Oleofine Organics Sdn. Bhd. (OFM) for incorporation of a new Joint Venture Company (JVC) in Thailand to carry on the business of manufacturing of Speciality Chemical products and supplying, exporting and distribution of such products. A joint venture company, Fine Organic Industries (Thailand) Co., Ltd. was incorporated on May 31, 2021. Further, the Board in its meeting held on November 11, 2021 approved the termination of Joint Venture Agreement with Adcotech GmbH for the Company i.e. FineADD Ingredients GmbH subject to the completion of applicable regulatory formalities.
As on March 31, 2022, the Company has two subsidiaries i.e. Fine Organics (USA), Inc. and Fine Organics Europe BV and three joint venture companies i.e. Fine Zeelandia Private Limited, FineADD Ingredients GmbH and Fine Organic Industries (Thailand) Co., Ltd.
In 2022-23, the Company commissioned new Fine Organics plants at Ambernath, Badlapur, Dombivli and Patalganga.
Fine Organic Industries Ltd
Company History
Fine Organic Industries is a pioneer and the largest producer of oleochemical-based additives in India and a key producer globally. The Company produces a wide range of specialty plant derived oleochemicals-based additives used in the foods, polymers, plastic, cosmetics, personal care, paint, ink, coatings feed nutrition and other specialty application in various industries. It is the first largest producer of to introduce slip additives in India. Its facilities are located at Ambernath, Badlapur and Dombivali, producing over 450 specialty additives.
The Company has a dedicated research and development (R&D) centre located in Mahape, Navi Mumbai. The Company provides specialised products and technical services to the end-user industry, reinforced by inhouse manufacturing and design/engineering facilities, well equipped R&D, and a techno-commercial approach. As at 31st March 2023, the Company had a range of over 470 different products sold under the Fine Organics' brand and 850+ direct customers (i.e., end-users) and over 180 distributors (who sold its products to more than 5,000 customers) from more than 80 countries.
Ramesh Maganlal Shah and Prakash Damodar Kamat founded Fine Organic Industries' in early 1970 at Mumbai, which was registered in 1973 as a partnership firm under the Indian Partnership Act, 1932. It commissioned its first facility in Dombivli MIDC Industrial Area in 1973, i.e. the Dombivli Facility which carried out processing and supply of food additives in Gujarat and Maharashtra. In 1975, Mukesh Maganlal Shah joined the partnership firm and expanded the business across India. Thereafter, in 1982, then existing partners incorporated a private limited company at Mumbai under the name of Smoothex Chemicals Private Limited' for further expansion of the business. In 1988, the partnership firm had set up a production facility of various specialty additives i.e. the Second Ambernath Facility. Subsequently, Smoothex Chemicals expanded the production facilities in Malaysia and Thailand in 1990 and 1993, respectively. Further, the then existing partners founded another partnership firm in the name of Olefine Organics' for enhancing the capacity in order to meet the market demands. In 1995, the then existing promoters incorporated another private limited company under the name of Oleofine Organics (India) Private Limited for expanding the capacity for polymer additives.
Fine Organic Industries Limited (FOIL) was originally incorporated as a private limited company on May 24, 2002 at Mumbai under the name 'Fine Organic Industries (Mumbai) Private Limited'. The Company got converted into a public limited company and the name of Company was changed to Fine Organic Industries Limited with effect from November 2, 2017.
A plot of MIDC land of 39,412 square metre at Additional Ambernath was procured under a lease for 95 years. In 2003, then existing promoters incorporated another private company under the name of 'Fine Research & Development Centre Private Limited' for undertaking dedicated research and development in their existing products, and established the Research and Development Centre in Navi Mumbai. In the First Ambernath Facility, the company commissioned a fatty acids esters facility in 2006. In 2008, the company commissioned a polymer additives unit at its First Ambernath Facility.
In January 2009, the name of the Company was changed to Fine Organic Industries Private Limited for a better depiction of the nature and scale of operations and the business of the Company which is not limited to Mumbai only, as contained in the original name, with effect from February 16, 2009. In 2010, polymer additives capacity was expanded at the company's First Ambernath Facility.
Pursuant to the order passed by the High Court of Bombay on June 17, 2011, Oleofine Organics (India) Private Limited was amalgamated with the Company. In 2012, the company commissioned additional food and polymer additives unit at its First Ambernath Facility. In 2013, the Company incorporated its wholly owned Subsidiary at the United States of America.
In 2014, the Company established Joint Venture with Zeelandia International at Mumbai to manufacture food premixes and to maximize the benefits of synergies.
In 2015, the company commissioned additional food and polymer capacity at its First Ambernath Facility. In 2016, the Company incorporated its wholly owned Subsidiary in Europe.
Pursuant to the order passed by the National Company Law Tribunal, Mumbai on June 19, 2017, Fine Speciality Surfactants Private Limited, a company incorporated on August 19, 1987, and engaged in the manufacture, distribution and production of speciality chemicals, and Fine Research & Development Centre Private Limited were amalgamated with the Company. Thereafter, on July 18, 2017, the Company has sub-leased the facility and general plant and machinery at Dombivli, MIDC from Fine Organic Industries partnership firm pursuant to the leave and license agreement.
In 2018, the company signed a joint venture agreement with Germany's Adcotec for application, development, marketing, distribution and sales activities of food and food additives.
The company launched an initial public offer (IPO) during the period from 20 June 2018 to 22 June 2018. The IPO comprised of offer for sale of 76.64 lakh shares by promoters. There was no fresh issue of shares by the company. The IPO was priced at Rs 783 per share. The stock made its debut on the bourses on 2 July 2018.
On 13 July 2018, Fine Organic Industries informed the stock exchanges that it has signed agreement with Citi Bank N.A., Jersey Branch for availing external commercial borrowing of USD 18.75 million to finance the capital expenditure of the Company.
During the FY 2017-18, pursuant to the resolutions passed by the Board of Directors at its meeting held on 5th July, 2017 and the scheme of amalgamation, 2,80,000 equity shares of face value of Rs 10 each were allotted to the shareholders of Fine Speciality Surfactants Private Limited and Fine Research and Development Centre Private Limited. Further, pursuant to a resolution passed by our Shareholders on 22nd September, 2017 in their Extra-Ordinary General Meeting, for issue of Bonus shares in the proportion of two equity shares for every one equity share, 1,02,19,992 equity shares were allotted to the shareholders as of the record date, being 10th August, 2017 pursuant to the resolution passed by the Board in its meeting held on 16th October, 2017.
The Company carries on business, in India and abroad, as manufacturers, processors, suppliers, distributors, dealers, importers, exporters of flavours, perfumes and flavouring chemicals, oil and colours, surface active agents, emulsifiers, preservatives, clouding agents, textile auxiliaries, lubricants, oleo chemicals and their derivatives, fatty acids and their derivatives, salt and esters. It also develops, processes, manufactures, deals in and carries on business in India and abroad in fine and heavy chemicals, oils, fats, dyes, dyestuffs, dye retardants, dye assistants, organic and inorganic chemicals.
As on March 31, 2021, the Company has two subsidiaries i.e. Fine Organics (USA), Inc. and Fine Organics Europe BV and two joint venture companies i.e. Fine Zeelandia Private Limited and FineADD Ingredients GmbH. On May 6, 2021, Company executed Joint Venture Agreement with Oleofine Organics Thailand Co., Ltd. (OFT) and Oleofine Organics Sdn. Bhd. (OFM) for incorporation of a new Joint Venture Company (JVC) in Thailand to carry on the business of manufacturing of Speciality Chemical products and supplying, exporting and distribution of such products. A joint venture company, Fine Organic Industries (Thailand) Co., Ltd. was incorporated on May 31, 2021. Further, the Board in its meeting held on November 11, 2021 approved the termination of Joint Venture Agreement with Adcotech GmbH for the Company i.e. FineADD Ingredients GmbH subject to the completion of applicable regulatory formalities.
As on March 31, 2022, the Company has two subsidiaries i.e. Fine Organics (USA), Inc. and Fine Organics Europe BV and three joint venture companies i.e. Fine Zeelandia Private Limited, FineADD Ingredients GmbH and Fine Organic Industries (Thailand) Co., Ltd.
In 2022-23, the Company commissioned new Fine Organics plants at Ambernath, Badlapur, Dombivli and Patalganga.
Fine Organic Industries Ltd
Directors Reports
Dear Members,
The Directors have pleasure in presenting their twenty-first Annual Report along with
the audited Standalone as well as Consolidated financial statements for the financial year
ended March 31, 2023.
FINANCIAL RESULTS AND STATE OF AFFAIRS:
(Rs. in lakhs)
| Particulars |
Standalone |
Consolidated |
|
for the year ended March 31,
2023 |
for the year ended March 31,
2022 |
for the year ended March 31,
2023 |
for the year ended March 31,
2022 |
| REVENUE & PROFITS |
|
|
|
|
| Total Revenue from
operations |
3,02,914.62 |
1,85,842.83 |
3,02,307.66 |
1,87,625.92 |
| Profit before Interest, Tax
& Depreciation |
84,537.63 |
38,172.37 |
89,346.11 |
39,653.96 |
| Less: Interest & Finance
Charges |
446.69 |
505.64 |
457.39 |
510.91 |
| Less: Depreciation |
4,788.83 |
3,990.01 |
4,789.30 |
3,990.28 |
| Profit for the year
before Tax |
79,302.11 |
33,676.72 |
84,099.42 |
35,152.77 |
| Less: Provision for Taxation |
|
|
|
|
| - Current |
20,500.00 |
8,750.00 |
22,543.58 |
9,313.85 |
| - Deferred |
(257.78) |
(140.21) |
(254.39) |
(131.99) |
| Short (Excess) provision for
earlier years |
- |
- |
- |
- |
| Net Profit/(Loss) after
Tax |
59,059.89 |
25,066.93 |
61,810.23 |
25,970.91 |
| Other Comprehensive Income |
63.11 |
271.50 |
63.11 |
271.50 |
| Total Comprehensive
Income |
59,123.00 |
25,338.43 |
61,873.34 |
26,242.41 |
| RETAINED EARNINGS |
|
|
|
|
| Opening Balance of Retained
Earnings |
93,360.71 |
71,666.38 |
94,250.11 |
71,540.99 |
| Add: Profit for the year |
59,059.89 |
25,066.93 |
61,810.23 |
26,091.64 |
| Less: Appropriations: |
- |
- |
- |
- |
| Final Dividend |
2,759.40 |
3,372.60 |
2,759.40 |
3,372.60 |
| Transferred to Other
Reserve/ Non-Controlling Interest |
- |
- |
- |
9.92 |
| Balance as at end of the
Year |
1,49,661.20 |
93,360.71 |
1,53,300.94 |
94,250.11 |
The Standalone as well as the Consolidated financial statements have been prepared in
accordance with the Indian Accounting Standards ('Ind AS').
On a consolidated basis, the revenue from operations increased to Rs.
3,02,307.66 lakhs in F.Y. 2022-23 from Rs. 1,87,625.92 lakhs in F.Y. 2021-22. The
profit before tax increased to Rs. 84,099.42 lakhs in F. Y. 2022-23 from Rs.
35,152.77 lakhs in F.Y. 2021-22.
On a standalone basis, the revenue from operations increased to Rs. 3,02,914.62
lakhs in F.Y. 2022-23 from Rs. 1,85,842.83 lakhs in F.Y. 2021-22. The profit before
tax increased to Rs. 79,302.11 lakhs in F. Y. 2022-23 from Rs. 33,676.72
lakhs in F.Y. 2021-22.
For more details on the Consolidated and Standalone financial results, please refer to
the Management Discussion
and Analysis Report which forms a part of this Annual Report. SHARE CAPITAL:
During the year under review, there was no change in the share capital of the Company.
The Paid-up share capital of the Company as on March 31, 2023, is Rs. 1,533.00/-
lakhs divided into 3,06,59,976 equity shares of Rs. 5/- each.
DIVIDEND:
Your Directors are pleased to recommend a Final Dividend of Rs. 9/- per equity
share of the face value of Rs. 5/- each fully paid-up for the financial year ended
March 31, 2023.
If the dividend, as recommended above, is declared by the Members at the ensuing Annual
General Meeting ('AGM'), the total outflow towards dividend on Equity Shares for the year
would be Rs. 2,759.40 lakhs.
TRANSFER TO RESERVES:
The closing balance of the retained earnings of the Company for the F.Y. 2022-23, after
all appropriations and adjustments was Rs. 1,49,661.20 lakhs.
SUBSIDIARIES, ASSOCIATE COMPANIES AND JOINT VENTURES:
As on March 31, 2023, the Company has two subsidiaries i.e. Fine Organics (USA), Inc.
and Fine Organics Europe BV and two joint venture companies i.e. Fine Zeelandia Private
Limited and Fine Organic Industries (Thailand) Co. Limited.
Further, the Board in its meeting held on November 11, 2021 approved the termination of
Joint Venture Agreement with Adcotech GmbH for the Company i.e. FineADD Ingredients GmbH
subject to the completion of applicable regulatory formalities. The said Company is
presently in the process of liquidation.
Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 ("the
Act"), a statement containing the salient features of financial statements of the
Company's subsidiaries and joint ventures in Form AOC-1 is attached to the financial
statements of the Company.
The separate financial statements of the subsidiaries are also available on the website
of the Company at www.fineorganics. com and will also be made available for
inspection by the members at the Registered Office of the Company during business hours on
all working days as required under Section 136 of the Act. Any member desirous of
obtaining a copy of the said financial statements may write to the Company Secretary at
the Registered Office of the Company.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134(3)(c) read with Section 134(5) of the Act, the Board of
Directors, to the best of its knowledge and ability, confirm that:
a) in the preparation of the annual accounts for the year ended March 31, 2023, the
applicable accounting standards have been followed and there are no material departures;
b) the directors have selected such accounting policies and applied them consistently
and made judgments and estimates that are reasonable and prudent so as to give a true and
fair view of the state of affairs of the Company as on March 31, 2023 and of the profit of
the Company for that period;
c) the directors have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of this Act for safeguarding the
assets 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 the
Company and that such internal financial controls are adequate and were operating
effectively; and
f) the directors have devised proper systems to ensure compliance with the provisions
of all applicable laws and that such systems were adequate and operating effectively.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Presently, the Board of Directors of the Company comprises 5 (five) Executive Directors
and 5 (five) Non-Executive Independent Directors including one Independent Woman Director.
Cessation
Mr. Prakash Kamat, Chairman and Executive Director of the Company left for his heavenly
abode on June 17, 2022, and ceased to be the Director of the Company from that date.
Appointment
Based on the recommendation of Nomination and Remuneration Committee (NRC), the Board
of Directors appointed Mr. Nikhil Kamat (DIN:00107233) as a Whole Time Director of the
Company for a period of 5 years w.e.f. June 27, 2022, subject to the approval of
shareholders. The shareholders of the Company at its Twentieth Annual General Meeting held
on August 23, 2022, approved the appointment of Mr. Nikhil Kamat as the Whole Time
Director for the above mentioned tenure.
Re-appointment
The following Directors were reappointed at the Twentieth Annual General Meeting of the
Company held on August 23, 2022.
1. Mr. Mukesh Shah (DIN: 00106799) was appointed as a Managing Director of the Company
for a period of 5 years with effect from November 06, 2017. Based on the recommendation of
NRC and the Board of Directors, the shareholders of the Company at its Twentieth Annual
General Meeting held on August 23, 2022, approved the reappointment of Mr. Mukesh Shah
as a Chairman and Managing Director of the Company for a further period of 5 years w.e.f.
November 06, 2022.
2. Mr. Jayen Shah (DIN: 00106919) was appointed as a Whole Time Director and Chief
Executive Officer of the Company for a period of 5 years with effect from November 06,
2017. Based on the recommendation of NRC and the Board of Directors, the shareholders of
the Company at its Twentieth Annual General Meeting held on August 23, 2022, approved the
reappointment of Mr. Jayen Shah as a Whole Time Director and Chief Executive Officer of
the Company for a further period of 5 years w.e.f. November 06, 2022.
3. Mr. Tushar Shah (DIN: 00107144) was appointed as a Whole Time Director and Chief
Financial Officer of the Company for a period of 5 years with effect from November 06,
2017. Based on the recommendation of NRC and the Board of Directors, the shareholders of
the Company at its Twentieth Annual General Meeting held on August 23, 2022, approved the
reappointment of Mr. Tushar Shah as a Whole Time Director and Chief Financial Officer of
the Company for a further period of 5 years w.e.f. November 06, 2022.
4. Mr. Bimal Shah (DIN: 03424880) was appointed as a Whole Time Director of the Company
for a period of 5 years with effect from November 06, 2017. Based on the recommendation of
NRC and the Board of Directors, the shareholders of the Company at its Twentieth Annual
General Meeting held on August 23, 2022, approved the reappointment of Mr. Bimal Shah as a
Whole Time Director of the Company for a further period of 5 years w.e.f. November 06,
2022.
5. Mr. Prakash Apte (DIN: 00196106) completed his first term as Independent Director of
the Company on November 12, 2022. On the recommendation of NRC and the Board of Directors,
the shareholders of the Company at its Twentieth Annual General Meeting held on August 23,
2022, approved the reappointment of Mr. Prakash Apte as Independent Director of the
Company for a second term of 5 years commencing from November 13, 2022.
6. Mr. Mahesh Sarda (DIN: 00023776) completed his first term as Independent Director of
the Company on November 12, 2022. On the recommendation of NRC and the Board of Directors,
the shareholders of
the Company at its Twentieth Annual General Meeting held on August 23, 2022, approved
the reappointment of Mr. Mahesh Sarda as Independent Director of the Company for a second
term of 5 years commencing from November 13, 2022.
7. Mr. Thiruvengadam Parthasarathi (DIN: 00016375) completed his first term as
Independent Director of the Company on November 12, 2022. On the recommendation of NRC and
the Board of Directors, the shareholders of the Company at its Twentieth Annual General
Meeting held on August 23, 2022, approved the reappointment of Mr. Thiruvengadam
Parthasarathi as Independent Director of the Company for a second term of 5 years
commencing from November 13, 2022.
8. Ms. Pratima Umarji (DIN: 05294496) completed her first term as Independent Director
of the Company on November 12, 2022. On the recommendation of NRC and the Board of
Directors, the shareholders of the Company at its Twentieth Annual General Meeting held on
August 23, 2022, approved the reappointment of Ms. Pratima Umarji as Independent Director
of the Company for a second term of 5 years commencing from November 13, 2022.
9. Mr. Kaushik Shah (DIN 00124756) completed his first term as Independent Director of
the Company on January 23, 2023. On the recommendation of NRC and the Board of Directors,
the shareholders of the Company at its Twentieth Annual General Meeting held on August 23,
2022, approved the reappointment of Mr. Kaushik Shah as Independent Director of the
Company for a second term of 5 years commencing from January 24, 2023.
Mr. Jayen Shah (DIN: 00106919) retires by rotation and being eligible has offered
himself for re-appointment. A resolution seeking shareholders approval for his
re-appointment forms part of the Notice. The brief details of Mr. Jayen Shah, who is
proposed to be re-appointed as required under Secretarial Standard 2 ("SS-2")
and Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, as amended, (the "Listing Regulations") is being
provided in the Notice convening the Annual General Meeting ("AGM") of
the Company.
During the year under review, the Non-Executive Independent Directors of the Company
had no pecuniary relationship or transactions with the Company, other than sitting fees,
commission and reimbursement of expenses, if any.
Pursuant to the provisions of Section 149(7) of the Act, the Independent Directors of
the Company have submitted declarations stating that they meet the criteria of
independence as provided in Section 149(6) of the Act along with Rules framed thereunder
read with Regulation 16(1)(b) of the Listing Regulations and Regulation 25(8) of the
Listing Regulations. The Board is of the opinion that the Independent Directors of the
Company possess requisite qualifications, experience, expertise, and proficiency and they
hold the highest standards of integrity.
The Independent Directors of the Company have confirmed that they have enrolled
themselves in the Independent Director's Databank maintained with the Indian Institute of
Corporate Affairs (IICA) in terms of provisions of Section 150 of the Act read with Rule 6
of the Companies (Appointment & Qualification of Directors) Rules, 2014.
Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel
('KMP') of the Company as on March 31, 2023, were: Mr. Mukesh Shah, Chairman and Managing
Director; Mr. Jayen Shah, Whole Time Director and Chief Executive Officer; Mr. Tushar
Shah, Whole Time Director and Chief Financial Officer; Mr. Bimal Shah, Whole Time
Director, Mr. Nikhil Kamat, Whole Time Director and Ms. Pooja Lohor, Company Secretary.
NUMBER OF BOARD MEETINGS:
The Board met five times during the year under review. The maximum gap between two
Board meetings did not exceed 120 days. The details of the Board meetings and the
attendance of Directors are provided in the Corporate Governance Report forming part of
the Annual Report.
COMMITTEES OF THE BOARD:
As on the date of this report, the Board has the following committees:
i) Audit Committee
ii) Nomination and Remuneration Committee
iii) Stakeholders Relationship Committee
iv) Corporate Social Responsibility Committee
v) Risk Management Committee.
vi) Executive Committee
vii) Strategic Growth Committee
All the recommendations made by the Board Committees including the Audit Committee,
were accepted by the Board.
Detailed information of these Committees and relevant information for the year under
review are set out in the Corporate Governance Report.
ANNUAL EVALUATION OF DIRECTORS, COMMITTEES AND BOARD:
Pursuant to the applicable provisions of the Act and the Listing Regulations, the Board
has carried out an annual evaluation of its own performance, the performance of the
Directors as well as the evaluation of the working of its Committees. The Nomination and
Remuneration Committee of the Company ('NRC') has defined the evaluation criteria, and
procedure for the Performance Evaluation process for the Board, its Committees and
Directors.
The performance of the Board and its functioning were evaluated based on various
criteria including expertise and experience of the Board, industry knowledge, diversity,
Board Meeting procedure, Board Development, succession planning etc.
All committees of the Board were evaluated based on various criteria including their
function and duties, periodical reporting to the Board along with their suggestions and
recommendations and procedure of the Meetings etc.
In a separate meeting of Independent Directors, the performance of Non-Independent
Directors, the Board as a whole and the Chairman of the Company was evaluated by the
Independent Directors. The evaluation of the Chairperson was done based on criteria which
among others included managing relationship with shareholders and employees, board,
management and leadership qualities. The performance of all Executive Directors as well as
Independent Directors has been evaluated by whole Board based on the criteria which
include participation at Board/ Committee Meetings, managing relationships with other
fellow members and senior management, personal attributes like ethics and integrity etc.
The Board and NRC reviewed the performance of the Board, its Committees and the
Directors. The same was discussed in the Board Meeting and the feedback received from the
Directors on the performance of the Board and its Committees was also discussed. The Board
was satisfied with the overall performance of the Board, Board Committees and individual
Directors.
NOMINATION AND REMUNERATION POLICY:
The Company has in place a Nomination and Remuneration Policy for the Directors, KMP
and other employees pursuant
to the provisions of the Act and the Listing Regulations which is available on the
website of the Company i.e. https://www. fineorganics.com/investor-policies/
INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY:
Your Company has an adequate system of internal financial controls that is commensurate
with the size, scale and nature of its operations. These have been designed to provide
reasonable assurance with regard to recording and providing reliable financial and
operational information, complying with applicable accounting standards, safeguarding its
assets, prevention and detection of errors and frauds and timely preparation of reliable
financial information.
AUDITORS:
I. Statutory Auditors
M/s. B Y & Associates, Chartered Accountants, Mumbai (Firm Registration No.
123423W) whose term of office was until the conclusion of the 20th AGM of the
Company were re-appointed as the Statutory Auditors of the Company at the 20th
AGM held on August 23, 2022, for a further term of 3 years i.e. from the conclusion of the
20th AGM up to the conclusion of the 23 rd AGM to be held in the
year 2025. As per the provisions of Section 139 of the Act, M/s. B Y & Associates have
confirmed that they are not disqualified from continuing as the Auditors of the Company.
The report of the Statutory Auditors for the F.Y. 2022-23 alongwith notes to Schedules is
a part of the Annual Report. The report of the Statutory Auditors does not contain any
qualification, reservation or adverse remark.
II. Cost Accounts and Cost Auditors
The Company is required to make and maintain cost records for its products as specified
by the Central Government under sub-section (1) of section 148 of the Act. Accordingly,
the Company has been making and maintaining the records as required.
The Board, on the recommendation of the Audit Committee has approved the appointment of
M/s. Y. R. Doshi & Associates, Cost Accountants, Mumbai (Firm Registration No. 000286)
as the Cost Auditors of the Company to audit the cost records for the F.Y. 2023-24. In
terms of Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration
payable to the Cost Auditors is required to be ratified by the shareholders.
Accordingly, a resolution seeking ratification by the members for the remuneration is
listed as Item No. 5 of the AGM Notice as an Ordinary Resolution.
III. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Ks &
Associates - Company Secretaries, Mumbai (Certificate of Practice Number 5163) to
undertake the Secretarial Audit of the Company for the F.Y. 2023-24. Further, the report
of the Secretarial Auditor for the F.Y. 2022-23, is appended as "Annexure A" to
this report. The Secretarial Audit Report does not contain any qualification, reservation
or adverse remark.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB-SECTION (12) OF SECTION 143
"OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT":
During the year under review, the Statutory Auditors, Cost Auditors and Secretarial
Auditors have not reported any instances of fraud committed in the Company by its officers
or employees, to the Audit Committee under Section 143(12) of the Act. Therefore, the
details of same are not provided herein.
RISK MANAGEMENT:
Risk Management is an integral part of the Company's operations. The Company evaluates
risks that can impact its strategic, operational, compliance and reporting objectives.
Mechanisms for the identification and prioritisation of risks include scanning the
business environment and continuous monitoring of internal risk factors. Major risks
identified by the Company's business and functions are systematically addressed through
mitigating actions on a continuing basis. The Board of Directors has constituted Risk
Management Committee (RMC). The RMC is chaired by an Independent Director. The RMC closely
monitors risk management efforts and provides insights for effective Risk Management
across our operations. A detailed note on risk management is given under the financial
review section of the Management Discussion and Analysis of this Annual Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
Particulars of loans, guarantees and investments covered under Section 186 of the Act
forms part of the notes to the Standalone Ind AS financial statements provided in this
Annual Report.
RELATED PARTY TRANSACTIONS:
All transactions with related parties (including material transactions) during the F.Y.
2022-23 were reviewed and approved by the Audit Committee and were at arm's length and in
the ordinary course of business. Prior omnibus approval was obtained for RPTs which were
of repetitive nature and entered in the ordinary course of business and on an arm's length
basis. The transactions entered into pursuant to the omnibus approval so granted were
reviewed by Audit Committee on a quarterly basis. The particulars of contract or
arrangments with related parties which fall within the purview of disclosure required
under Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules,
2014 in Form AOC-2 is enclosed in "Annexure B".
Details of RPTs entered into by the Company, in terms of Ind AS-24 are disclosed in
notes to the standalone/consolidated financial statements forming part of this Annual
Report.
CORPORATE SOCIAL RESPONSIBILITY:
Your Company has developed a CSR framework in line with Section 135 of the Act read
with Schedule VII thereto which focuses on Education, Healthcare, Women Empowerment,
Eradicating extreme hunger and poverty etc.
The Board of Directors has constituted the Corporate Social Responsibility Policy of
the Company and it is available on the website of the Company i.e.
https://www.fineorganics.com/ investor-policies/
The Report on Corporate Social Responsibility (CSR) including the constitution of the
Corporate Social Responsibility Committee and activities undertaken during the F.Y.
2022-23 as per Rule 8 of the Companies (CSR Policy) Amendment Rules, 2021 is enclosed as "Annexure
C" to this Report.
ANNUAL RETURN:
As per the requirements of Section 92(3) of the Act and Rule 12 of the Companies
(Management and Administration) Rules, 2014, the annual return for the F.Y. 2022-23 will
be available on https://www.fineorganics.com/investor-agm- documents/
PARTICULARS OF EMPLOYEES & MANAGERIAL REMUNERATION:
The information required under Section 197(12) of the Act read with Rule 5 (1) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached
as "Annexure D" to this report.
The statement containing particulars of employees as required under section 197 of the
Act read with 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 Act,
this Report and accounts are being sent to the members and others entitled thereto,
excluding the information on particulars of employees which is available for inspection by
members at the Registered Office of the Company during business hours on all working days.
If any member is interested in obtaining a copy thereof, such member may write to the
Company Secretary in this regard.
CORPORATE GOVERNANCE:
The Company is committed to maintain the highest standards of Corporate Governance and
continues to be compliant with the requirements of Corporate Governance as prescribed in
the Listing Regulations. In compliance with Regulation 34 and other applicable provisions
of the Listing Regulations, a separate report on Corporate Governance along with the
Certificate of Compliance from the Secretarial Auditor forms an integral part of this
Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Pursuant to Regulation 34 of the Listing Regulations, the Management Discussion and
Analysis Report, capturing your Company's performance, industry trends and other material
changes with respect to your Company and its subsidiaries, wherever applicable, is
presented in a separate section forming an integral part of this Annual Report.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT:
Pursuant to Regulation 34(2)(f) of the Listing Regulations and SEBI Circular No.
SEBI/HO/CFD/CMD-2/P/CIR/2021/562 dated May 10, 2021, the requirement of submitting a
Business Responsibility Report (BRSR) is discontinued after F.Y. 2021-22 and thereafter
with effect from F.Y. 2022-23, the top one thousand listed entities based on market
capitalisation shall submit a Business Responsibility and Sustainability report in the
format specified by SEBI. The
Company being among the top one thousand listed entities has prepared its Business
Responsibility and Sustainability Report which is presented in a separate section forming
an integral part of this Annual Report. The BRSR indicates the Company's performance
against the principles of the 'National Guidelines on Responsible Business Conduct'.
DIVIDEND DISTRIBUTION POLICY:
Pursuant to Regulation 43A of the Listing Regulations, the Company has adopted a
Dividend Distribution Policy, setting out the parameters and circumstances that the Board
will take into account, in determining the distribution of dividend to its shareholders
and/or retaining profits earned by the Company. The policy is available on the website of
the Company and the web link thereto is: https://www. fineorganics.com/investor-policies/
WHISTLE BLOWER POLICY AND VIGIL MECHANISM:
In accordance with the provisions of Section 177(9) of the Act and requirements of
Regulation 22 of the Listing Regulations, your Company has a vigil mechanism which has
been incorporated in the Whistle Blower Policy for Directors and Employees to report
genuine concerns about unethical behavior, actual or suspected fraud or violation of the
Code for Prevention of Insider Trading. The Whistle Blower Policy is uploaded on the
website of your Company at https://www. fineorganics.com/investor-policies/
PREVENTION OF SEXUAL HARASSMENT:
The Company has zero tolerance towards sexual harassment at the workplace and has
adopted policy on the Prevention of Sexual Harassment, in line with the provisions of
Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
and the Rules thereunder. The Policy aims to provide protection to the employees at the
workplace and prevent and redress complaints of sexual harassment and for matters
connected or incidental thereto. Separate Internal Complaints Committee has also been set
up to redress complaints received on sexual harassment at head office as well as at all
plant locations. The Committee conducts sensitisation workshops to inform the employees
about their rights w.r.t. sexual harassment of women at the workplace. The Company has not
received any complaint of sexual harassment during the F.Y. 2022-23.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information pertaining to the conservation of energy, technology absorption,
foreign exchange earnings and outgo as required under Section 134(3)(m) of the Act read
with Rule 8 (3) of the Companies (Accounts) Rules, 2014 is furnished in "Annexure
E" to this report.
MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING THE FINANCIAL POSITION OF THE
COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS
RELATE AND THE DATE OF THE REPORT:
There are no material changes and commitments affecting the financial position of the
Company that occurred between the end of the financial year to which these financial
statements relate and the date of the report other than those mentioned under any section
of this Annual Report.
DEPOSITS FROM PUBLIC:
The Company has not accepted any deposits from the public and as such, no amount on
account of principal or interest on deposits from the public was outstanding as on the
date of the balance sheet.
SIGNIFICANT OR MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS, WHICH
WOULD IMPACT THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE:
There are no significant or material orders passed by the Regulators or Courts or
Tribunals, impacting the going concern status and the Companys operations in future.
ACKNOWLEDGEMENTS:
The Board of Directors thank for the continued support and co-operation by customers,
vendors, investors, bankers, government and regulatory authorities and stock exchanges
during the year under review. The Board of Directors wish to place on record its deep
sense of appreciation for the committed services by all the employees of the Company.
For and on Behalf of the Board
Mukesh Shah
Chairman and Managing Director Mumbai: May 24, 2023
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