The Board of Directors ("Board") is pleased to present the 35th Annual Report of Advanced Enzyme Technologies Limited ("Company") along with the Audited financial statements for the financial year ended March 31,2024.
FINANCIAL HIGHLIGHTS
The financial performance of your Company for the financial year ended March 31,2024 is summarized below:
|
(Rs. in Million)
|
| |
Standalone
|
Consolidated
|
|
Particulars
|
Year ended March 31, 2024
|
Year ended March 31, 2023
|
Year ended March 31, 2024
|
Year ended March 31, 2023
|
|
Revenue from operations
|
3,655
|
3,115
|
6,239
|
5,406
|
|
EBITDA
|
1,052
|
749
|
2,045
|
1,564
|
|
Less:
|
|
|
|
|
|
Finance Cost
|
2
|
1
|
29
|
24
|
|
Depreciation and Amortisation
|
109
|
103
|
352
|
350
|
|
Add:
|
|
|
|
|
|
Other income
|
588
|
98
|
366
|
255
|
|
Profit before exceptional items and Tax
|
1,529
|
743
|
2030
|
1,445
|
|
Exceptional items
|
189
|
-
|
151
|
41
|
|
Profit Before Tax (PBT)
|
1,340
|
743
|
1,879
|
1,404
|
|
Less: Provision for Taxation
|
|
|
|
|
|
Current tax
|
270
|
183
|
566
|
428
|
|
Deferred tax
|
(11)
|
5
|
(53)
|
(63)
|
|
MAT credit entitlement
|
|
-
|
(4)
|
-
|
|
Tax adjustment for earlier years
|
|
-
|
|
-
|
|
Tax expenses
|
259
|
188
|
509
|
365
|
|
Profit for the year
|
1,081
|
555
|
1370
|
1,039
|
|
Surplus Brought Forward from the Previous Year
|
4,175
|
3,827
|
10,023
|
9,173
|
|
Amount Available for Appropriations
|
5,256
|
4,175
|
11,393
|
10,023
|
|
Earnings Per Share (Amount in ')
|
|
|
|
|
|
Basic
|
9.67
|
4.97
|
11.92
|
9.45
|
|
Diluted
|
9.66
|
4.97
|
11.92
|
9.45
|
RESULTS FROM OPERATIONS Revenue - Consolidated
Your Company’s revenue from operations on consolidated basis increased to ' 6,239 million in the financial year 2023-24 ("FY24") from ' 5,406 million in the financial year 2022-23 ("FY23"), a growth rate of 15%. The total revenue comprises international sales amounting to ' 3,133 million (FY23 - ' 2,850 million), increase of 10% and domestic sales amounting to ' 3,106 million (including Export Incentives of ' 4 million) (FY23 - ' 2,557 million (including Export Incentives of ' 3 million)), an increase of 21%.
Your Company’s domestic sales constitute about 50% of revenue from operations during FY24 as compared to 47% of revenue from operations during FY23. International sales were 50% of revenue from operations as compared to 53% of revenue from operations during FY23.
Revenue - Standalone
Your Company’s revenue from operations on standalone basis increased to ' 3,655 million in FY24 from ' 3,115 million in FY23, at an increase of 17%. The total revenue comprises international sales of ' 1,134 million (FY23 -' 975 million), an increase of 16% and Domestic sales at ' 2,520 million (including Export Incentives of ' 4 million) (FY23 - ' 2,140 million (including Export Incentives of ' 2 million)), an increase of 18%.
The domestic sales constitute 69% of revenue from operations during FY24 as compared to 69% of revenue from operations during FY23. International sales were 31% of revenue from operations during FY24 as compared to 31% of revenue from operations during FY23.
Profits - Consolidated
EBITDA (Earnings before interest, tax, depreciation & amortisation excluding other income) during FY24 was ' 2,045 million (33%) as compared to ' 1,564 million (29%) during FY23, an increase of 31%.
Profit before tax stood at ' 1,879 million (30%) during FY24 as against ' 1404 million (26%) in the previous year, an increase of 34%. Profit after tax stood at ' 1,370 million during FY24 as compared to ' 1,039 million during FY23, an Increase of 32%.
Profits - Standalone
EBITDA during the year under review was at ' 1,052 million (29%) as compared to ' 749 million (24%) in FY23. Profit before tax stood at ' 1,340 million during FY24 as compared to ' 743 million in FY23, an increase of 80%. Profit after tax stood at ' 1,081 million during FY24 as compared to ' 555 million during FY23, an increase of 95%.
DIVIDEND
During the financial year under review, the Board of Directors of your Company had declared an Interim Dividend @ 200%
i.e. ' 4/- per Equity Share of face value of ' 2/- each for the financial year 2023-24, aggregating to about ' 447.30 million (subject to deduction of taxes, as applicable).
Pursuant to the Dividend Distribution Policy of the Company, the Board recommends a final Dividend @ 55%
i.e. ' 1.10/- per Equity Share of face value of ' 2/- each for the financial year 2023-24 ("FY24"), aggregating to about ' 123.01 million (subject to deduction of taxes, as applicable) i.e. an increase of 10% on the previous year final Dividend.
The final Dividend payout is subject to approval of the Members at 35th Annual General Meeting ("AGM") of your Company.
Further, the Board of Directors of your Company declared an Interim Dividend @ 200% i.e. ' 4/- per Equity Share of face value of ' 2/- each for the financial year 2024-25 ("FY25"), aggregating to about ' 447.30 million (subject to deduction of taxes, as applicable).
The Dividend Distribution Policy of the Company is available on the website of the Company at www.advancedenzymes. com/investors/corporate-governance/#codes-and-policies.
The Dividend Distribution Tax payable by domestic companies on declaration of dividend has been abolished w.e.f. April 01, 2020. Pursuant to this amendment and consequential amendments brought vide Finance Act, 2020, as the dividend by the companies is taxable in the hands of the shareholders, the Company would be under an obligation to deduct tax at source ("TDS") in accordance with the provisions of the Income Tax Act, 1961 (as amended from time to time).
RESERVES
During the FY24, your Company has not transferred any amount to the General Reserves.
EMPLOYEES STOCK OPTION PLAN
The Members of the Company have approved the AETL Employee Stock Option Scheme 2022’ ("ESOP 2022") and related matters on August 19, 2022 at the 33rd Annual General Meeting of the Company. Your Company has received the In-principle approval from BSE Limited (BSE) and National Stock Exchange of India Limited (NSE).
During the reporting period, the Nomination & Remuneration Committee of the Company in its meeting held on August 12, 2023 approved the first grant of 5,76,000 (Five Lakh Seventy Six Thousand) stock Options in aggregate having face value of ' 2 each to the eligible employees, divided in relevant categories under ESOP 2022. The said Options are yet to be vested and exercised as on the date of this report. In view of this, there has been no change in the share capital of the Company during the year under review.
The disclosure pertaining to the details of Employees Stock Option Scheme 2022 ("ESOP 2022") are provided in Annexure I and forms part of this Report. The said disclosure is displayed on the website of the Company under the tab 'Details of Employees Stock Option’ at www.advancedenzymes.com/investors/shareholder-information
FINANCIAL STATEMENTS
The financial statements of your Company for the year ended March 31, 2024 are prepared in accordance with the Indian Accounting Standards ("IND AS"), read with the provisions of Section 129 and other applicable provisions, if any, of the Companies Act, 2013 ("the Act") rules framed thereunder and Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (including any statutory modification(s) or re-enactments thereof for the time being in force) ["SEBI Listing Regulations"] and forms part of this Integrated Annual Report.
The estimates and judgments relating to the financial statements are made on a prudent basis, so as to reflect in a true and fair manner, the form and substance of transactions and reasonably present the Company’s state of affairs, profits and cash flows for the year ended March 31,2024.
SUBSIDIARIES
Your Company has Eleven (11) subsidiaries as on March 31, 2024 as listed below:
Domestic Subsidiaries:
1. Advanced Bio-Agro Tech Limited (60%) ["ABAT"];
2. Advanced EnzyTech Solutions Limited (100%) ["AESL"];
3. JC Biotech Private Limited (95.72%) ["JCB"];
4. SciTech Specialities Private Limited (51%) ["SciTech"]
5. Saiganesh Enzytech Solutions Private Limited (50%) ["Saiganesh"]
In terms of the financial performances:
i. ABAT’s revenue for FY24 was ' 448 million (previous financial year ["FY23"] - ' 472 million), and Profit after Tax for FY24 was ' 40 million (FY23 - ' 60 million).
ii. AESL’s revenue for FY24 was ' 153 million (FY23 -' 134 million), and Profit after Tax for FY24 was ' 19 million (FY23 - ' 18 million).
iii. JCB’s revenue for FY24 was ' 626 million (FY23 -' 502 million), and Profit/(loss) after Tax for FY24 was ' 18 million (FY23 - ' (18) million).
iv. SciTech’s revenue for FY24 was ' 418 million (FY23 -' 353 million), and Profit/(loss) after Tax for FY24 was ' 37 million (FY23 - ' (62) million).
v. Saignesh’s revenue for FY24 was ' 267 million (FY23 - '26 million), and Profit after Tax for FY24 was ' 26 million (FY23 - ' 2 million). [Saiganesh became subsidiary of the Company effective from January 03, 2023]
International Subsidiaries:
1. Advanced Enzymes USA (100%)
A. Advanced Supplementary Technologies Corporation (100% Subsidiary of Advanced Enzymes USA) *;
B. Cal-India Foods International (doing Business as Specialty Enzymes and Biotechnologies) (100% Subsidiary of Advanced Enzymes USA);
C. Enzyme Innovation Inc. (100% Subsidiary of Cal-India Foods International);
*Note: As reported in the Board Report for financial year 2022-23, the Board of Directors of respective wholly owned subsidiaries i.e. Dynamic Enzymes, Inc., USA ("DE") and Advanced Supplementary Technologies Corporation, USA ("AST") approved
the merger of DE and AST. Further, the State of California (USA) had approved the merger of DE into AST and consequently thereafter, during the year 2023, DE merged into AST, and DE ceased to exist.
In terms of the consolidated financial performance of Advanced Enzymes USA, the revenue for FY24 was ' 2,128 million (FY23 - ' 1,933 million), and Profit after Tax for FY24 was ' 616 million (FY23 - ' 583 million).
2. Advanced Enzymes Europe B.V. (100%) ["AEE"]
In terms of the consolidated financial performance (including its subsidiary, evoxx technologies, GmbH), AEE’s revenue for FY24 was ' 230 million (FY23 - ' 240 million), and (loss) for FY24 was ' 78 million (which includes about ' 11 million of operational loss, ' 9 million of other income, ' 10 million of deferred tax reversal, ' 59 million of amortization expense and ' 28 million of finance cost) as compared to loss of ' (39) million for FY23.
3. evoxx technologies GmbH [100% subsidiary of AEE] ["evoxx"]
For FY24, the revenues for evoxx was ' 230 million (FY23 - ' 240 million) and had a negative impact on the bottom line by ' 26 million including operational loss of ' 15 million (FY23 - positive impact on the bottom line by ' 18 million including operational gain of ' 36 million) and charge of ' 11 million (FY23 - ' 12 million) of an amortization expense.
4. Advanced Enzymes (Malaysia) Sdn. Bhd. (100%) ["AEM"] (Voluntary Strike off during reporting period)
The Company acquired AEM in the year 2017 (incorporated in 2016). During FY20, the Board of your Company approved the discontinuation of the business and closure of AEM and to initiate the process of closure thereto, since AEM was not giving the desired results. During FY23 and FY24, no business activities were carried out resulting into Nil profit in the respective years. During FY24, the Registrar of Companies, Malaysia has approved the voluntary application of AEM for its strike-off, and status of AEM is appearing as 'Dissolved’. Consequently, AEM ceases to be the subsidiary of the Company, effective from November 08, 2023.
The Policy for determining Material Subsidiaries is available on the website of the Company: www.advancedenzymes.com/investors/corporate-governance. During the year under review, Cal-India
Foods International in USA was Material Subsidiary of your Company based on the criteria specified in the SEBI Listing Regulations.
A separate statement containing the salient features of the financial performance of subsidiaries in the prescribed Form AOC-1 is annexed to the financial statements of the Company. The Audited Consolidated financial statements together with Auditors’ Report form an integral part of the Annual Report.
The individual financial statements and other reports of the Company’s subsidiaries have not been attached to the financial statements of the Company for FY24. Pursuant to the provisions of Section 136 of the Act read with the SEBI Listing Regulations, the financial statements of the subsidiaries and related information are uploaded on the website of your Company and can be accessed on the web link, www.advancedenzymes. com/investors/quarterly-updates/financial-results and also available for inspection, during working hours at the registered office of the Company on working days except Saturdays and Sundays, up to the date of 35th AGM of the Company. Any Member desirous of conducting inspection and/or of seeking information on the Annual financial statements of the Company’s subsidiaries may write and intimate in advance, to the Company Secretary.
SUBSIDIARIES, JOINT VENTURE AND ASSOCIATECOMPANIES
During the year under review:
(i) The Company completed the acquisition of an additional stake of 5.89% in JC Biotech Private Limited, subsidiary ["JCB"] by way of purchase of 12,18,976 Equity Shares from few selling shareholders of JCB, for a consideration of ' 56.07 million i.e. ' 46 per Equity Share. In view of this, the shareholding of the Company in JCB has increased from 89.83% to 95.72% of paid-up share capital of JCB. The said acquisition was approved by the Board in its meeting held on February 10, 2024 and the acquisition was completed on March 05, 2024.
(ii) Conversion of loan/Inter Corporate deposits granted by your Company to Advanced Enzymes Europe B.V, Netherlands (wholly owned subsidiary) ("AEE") in to the Equity Shares of AEE. On April 7, 2023, consequent to conversion of the loan including interest, AEE issued 2,276,837 Equity Shares of a par value of EUR 1 each at a share Premium of EUR 0.63 each, to your Company against outstanding loan amount including interest aggregating to EUR 3,711,244.60. AEE continues to be the wholly-owned subsidiary of your Company and there was no change in the percentage shareholding (100%) of your Company in AEE, post conversion of the aforesaid loan.
(iii) Conversion of loan/Inter Corporate deposits granted by Advanced Enzymes Europe B.V, Netherlands (wholly owned subsidiary) ("AEE") to evoxx technologies GmbH ("evoxx") in to the Equity Shares of the evoxx. On June 28, 2023, consequent to conversion of the said loan including interest, evoxx issued 43,307 Equity Shares of a par value of EUR 1 each at a share Premium of EUR 61.18 each, to your Company against outstanding loan amount including interest aggregating to EUR 26,92,877. evoxx continues to be the wholly-owned subsidiary of your AEE and there was no change in the percentage shareholding (100%) of AEE in evoxx, post conversion of loan given by AEE to evoxx.
(iv) As reported in the Board Report for financial year 2022-23, the Board of Directors of Saignesh Enzytech Solutions Private Limited (50% Subsidiary) ["Saiganesh"] approved the purchase of entire business undertaking of Shri Ganesh Industrial Enzymes (a partnership firm based in Burhanpur, Madhya Pradesh) ("Shri Ganesh"), through a slump sale on a going concern basis for an amount not exceeding ' 9 million, for the purpose of Market expansion & growth for products of Saiganesh. The acquisition was completed during the year under review. Shri Ganesh was involved in the business of processing Latex from papaya, purifying and providing finish papain enzyme in liquid form (agriculture extraction of Papain enzyme) i.e. same business activity as that of Saiganesh (Health care industry). The total turnover and net-worth of the Shri Ganesh for financial year 2021-22 was ' 57.6 million and ' 10.3 million respectively.
(v) As reported in the Board Report for financial year 202223, the Board of Directors of respective wholly owned subsidiaries i.e. Dynamic Enzymes, Inc., USA ("DE") and Advanced Supplementary Technologies Corporation, USA ("AST") approved merger of DE and AST. Further, the State of California (USA) had approved the merger of DE into AST and consequently thereafter, during the year 2023, DE merged into AST, and DE ceased to exist.
(vi) Advanced Enzymes (Malaysia) Sdn. Bhd. (100%) ["AEM"] (Voluntary Strike off during reporting period). The Company acquired AEM during the year 2017. During FY20, the Board of your Company approved the discontinuation of the business and closure of AEM and to initiate the process of closure thereto, as
AEM was not giving the desired results. During FY23 and FY24, no business activities were carried out resulting into Nil profit in the respective years. During FY24, the Registrar of Companies, Malaysia approved the application of AEM for its voluntary strike-off. Consequently, AEM ceased to be the subsidiary of the Company effective from November 08, 2023.
The details are available on the website of the Company at www.advancedenzymes.com/investors/announcements-notices
Except as mentioned above, no other entity has become or ceased to be a Subsidiary, Joint Venture or Associate of the Company during the year under review.
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed review of the operations, performance and future outlook of your Company, Subsidiaries and its Business including Risks, Opportunities and Threats are given in the Management Discussion and Analysis, as required under the SEBI Listing Regulations, which is provided in separate section and forms an integral part of this Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134 of the Companies Act, 2013, the Directors, to the best of their knowledge and belief and based on the information and explanations provided to them, confirm that:
a. in the preparation of the annual accounts for the year ended March 31, 2024, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;
b. appropriate accounting policies have been selected and applied consistently and judgments and estimates are made reasonably and prudently so as to give a true and fair view of the state of affairs of the Company as at March 31,2024 and of the profit of the Company for the year ended on that date;
c. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d. the annual accounts have been prepared on a 'going concern’ basis;
e. Proper internal financial controls are devised to ensure compliance with all the provisions of the applicable
laws and that such internal financial controls are adequate and are operating effectively; and
f. Proper systems are devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
RISK MANAGEMENT
Your Company understands that controlling risks through a formal program is a necessary component and an integral cornerstone of Corporate Governance. Your Company has adopted Risk Assessment & Management policy which embeds the vision that a robust Risk Management system ensures commensurate controls and monitoring mechanism for smooth and efficient management of Business. The Policy outlines the framework for identification, measurement, evaluation, monitoring and mitigation of various risks. The Management has also reviewed the Risk Management framework of the Company. The Risk Registers are prepared by the concerned departments wherein the respective risks are identified along with its current control activities and the mitigation plans. Thereafter, the registers are reviewed.
The Risk Management Committee constituted by the Board assists the Board in monitoring and review of Risk Management Policy of the Company including associated systems, processes, controls & strategies thereto, various risks exposures of the Company, on a periodic basis and then inform the Board about the risks assessed, their concerns and action plan with strategy for mitigation of the risks and such other functions related to risk management & mitigation as may be required by the Board, from time to time.
RELATED PARTY TRANSACTIONS
During the year under review, all transactions with the Related Parties were placed before the Audit Committee for its approval. An omnibus approval from the Audit Committee was obtained for the Related Party transactions which are repetitive in nature. The Audit Committee and the Board, reviewed all the transactions entered into pursuant to the omnibus approvals on a quarterly basis. All the transactions with Related Parties, entered into during the year under review, were in the ordinary course of business and on arms’ length basis in accordance with the provisions of the Act, Rules made thereunder and the SEBI Listing Regulations. Approval of the Members of the Company is also obtained in case any Related Party transaction exceeds the prescribed limits and as good corporate governance practice as there may be few transactions that may be carried out in the long-term interest of the Company. The transactions of the
Company with its wholly-owned subsidiaries are exempted from approval of the Members, and hence such approvals are not obtained by the Company.
The Policy on Related Party Transactions (as amended) is available on the Company’s website and can be accessed at www.advancedenzymes.com/investors/corporate-governance
As prescribed under Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Account) Rules, 2014, particulars of contracts/arrangements with Related Parties are given in Form AOC-2, annexed as Annexure II to this Report.
TRANSFER TO INVESTOR EDUCATION ANDPROTECTION FUND (IEPF)
Pursuant to Section 124(6) of the Companies Act, 2013, all shares in respect of which Dividend has not been paid or claimed for seven consecutive years or more shall be transferred by the company in the name of Investor Education and Protection Fund ("IEPF"). In view of this, your Company has transferred 10,000 unclaimed Equity Shares pertaining to financial year 2015-16 to the Demat account of IEPF during May 2023. The details of the said shares are provided on the website of the Company at www. advancedenzymes.com/investors/shareholder-information
During the year under review, the Company has transferred unclaimed Dividend of ' 1,14,000 for the financial year 2015-16. As on March 31, 2024, the total amount lying in the Unpaid Dividend accounts of the Company in respect of the last seven years is around '1.10 million. In addition, the total amount lying in the Unpaid (Interim) Dividend account of the Company for FY24 is around ' 0.49 million. Details of unclaimed Dividend and Shares due for transfer with due dates and procedure to claim the same are provided in the Notes to the Notice convening 35th AGM of the Company ("AGM Notice" / "Notice of 35th AGM") and briefly in the Corporate Governance Report which forms an integral part of this Report.
Details of Nodal Officer are displayed on the Company’s website at:
www.advancedenzymes.com/investors/shareholder-
information
CORPORATE SOCIAL RESPONSIBILITY ("CSR")
The Annual Report on Corporate Social Responsibility activities has been provided in Annexure III and the report along with all the details thereto, forms an integral part of this Report. The Composition of CSR Committee is disclosed in the said Annual Report on CSR Activities and in the Corporate Governance report section.
The Corporate Social Responsibility Policy may be accessed on the Company’s website at www.advancedenzymes. com/investors/corporate-governance.
POLICY ON CRITERIA FOR APPOINTMENT / REMOVAL OF DIRECTORS AND SENIOR MANAGEMENT PERSONNEL AND REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND EMPLOYEES
As per the Nomination & Remuneration Policy of the Company ("Policy"), the Nomination and Remuneration Committee inter alia recommends the appointment of Directors, Key Managerial Personnel (KMP) and Senior Management Personnel. The Policy lays down the criteria for such appointments and the framework in relation to remuneration of Directors including Managerial Personnel, KMPs and employees of the Company. The Nomination & Remuneration Committee oversees the matter of remuneration to the Executive Directors, KMPs and Senior Management Personnel and recommends to the Board, revision, if any, in the remuneration of the said Directors / Personnel subject to limits as may be approved by the Members.
The Nomination and Remuneration Policy may be accessed on the website of the Company at www.advancedenzymes. com/investors/corporate-governance.
The Board of your Company affirms that the remuneration paid to the Directors is as per the terms laid out in the Nomination and Remuneration Policy of the Company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review, the following changes occurred in the composition of the Board and the Key Managerial Personnel of your Company:
(i) The Board of your Company approved the appointment of Mrs. Vandana R. Tilak (DIN: 10048021) as an Additional Director (Independent) with effect from July 01, 2023 and the Members of the Company in the 34th AGM of the Company held on August 12, 2023 approved her appointment as an Independent Director of the Company for a period of five years effective from July 01,2023.
(ii) The Board of your Company approved the re-appointment of Mr. Vinodkumar Hiralal Jajoo (DIN: 08224980) as an Independent Director for second term with effect from February 09, 2024 to hold office for the term of five years. The Members of the Company in the 34thAGM of the Company held on August 12, 2023 approved his re-appointment as an Independent Director of the Company for a period of five years effective from February 09, 2024.
(iii) The Board of your Company approved the re-appointment of Ms. Rajshree Patel (DIN: 08761022) as an Independent Director for second term with effect from June 12, 2023 to hold office for the term of three years. The Members of the Company in the 34thAGM of the Company held on August 12, 2023 approved her re-appointment as an Independent Director of the Company for a period of three years effective from June 12, 2023.
(iv) Mr. Rajesh Sharma, Independent Director, ceased to be the Director or the Company due to completion of his tenure as the Independent Director of the Company effective from August 10, 2023. Mr. Rajesh Sharma was eligible for re-appointment as an Independent Director for his second term, however due to preoccupation and increased responsibilities in his professional engagements in USA, he conveyed his un-willingness for re-appointment for the subsequent term as an Independent Director.
(v) Mr. Kedar Desai, Independent Director, ceased to be the Director or the Company due to completion of his second tenure as the Independent Director of the Company effective from March 31,2024.
Except as mentioned above, there has been no change in the composition of Board and Key Managerial Personnel of the Company, during the year under review.
DECLARATION BY THE INDEPENDENT DIRECTORS
All Independent Directors of the Company have given the following declarations stating that:
(i) they meet the 'criteria of Independence’ as defined under Regulation 16(1) of the SEBI Listing Regulations and Section 149(6) of the Companies Act, 2013 read with Schedule IV and the relevant Rules made thereunder;
(ii) they have complied with the provisions of the Code of Conduct & Ethics of the Company. The Independent Directors have confirmed that they are not aware of any circumstance or situation which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence.
(iii) they have complied with the provisions of Rule 6(1) and 6(2) of the Companies (Appointment and Qualifications of Directors) Rules, 2014 (as amended) with regards to the registration on the Independent Directors’ databank.
None of the Directors of the Company are disqualified for being appointed as Directors as specified in Section 164(2) of the Companies Act, 2013 and Rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014 (as amended).
The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise and they hold highest standards of integrity.
The Independent Directors of your Company have registered on the Independent Directors’ Databank pursuant to the provisions of Section 149 of the Companies Act, 2013 and the applicable rules thereunder ("Act"). The Independent Directors, as on March 31, 2024, have informed the Company, that they have either claimed exemption or passed the online proficiency test prescribed under the Act.
RETIREMENT BY ROTATION
In accordance with the provisions of Section 152 of the Companies Act, 2013 read with Rules made thereunder and the Articles of Association of the Company, Mr. Vasant Rathi (DIN: 01233447), Director, retires by rotation at the 35th AGM and being eligible offers himself for re-appointment. The Board recommends the said re-appointment of Mr. Vasant Rathi at the 35th AGM and his brief profile is provided in the Notice convening 35th AGM of the Company.
AUDITORS AND AUDITORS' REPORTSTATUTORY AUDITORS
Pursuant to provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 (as amended), M/s. MSKA & Associates, Chartered Accountants [Firm’s Registration No: 105047W] were appointed as Statutory Auditors for a term of five consecutive years to hold office from the conclusion of 32nd AGM up to the conclusion of the 37th AGM. The Auditors’ Report to the Members on the financial statements of the Company for the year ended March 31, 2024 forms a part of the Annual Report and the Auditors’ Report does not contain any qualification, reservation or adverse remark.
COST RECORDS AND AUDIT
The Company has maintained Cost records in accordance with the provisions of Section 148(1) of the Companies Act, 2013, during the year under review. Based on the criteria specified under the Act, the Cost Audit was not applicable for the financial year 2023-24.
The Board of Directors of your Company, based on the recommendations of the Audit Committee, at its meeting
held on May 11, 2024, appointed M/s. Shilpa & Co., Cost Accountants (Firm Registration Number: 100558), as the Cost Auditors of the Company for the financial year ending March 31,2025 (FY25).
Your Company has received the consent of the Cost Auditors inter alia stating that the said appointment is in accordance with the applicable provisions of the Act and rules framed thereunder. The Cost Auditors have confirmed they are free from any disqualifications to be appointed as the Cost Auditors of your Company. Based on recommendations of the Audit Committee, the remuneration of Cost Auditors has been approved by the Board and recommended to the Members and therefore the requisite resolution for ratification of remuneration of the Cost Auditors by the Members is set out in the Notice of the 35th AGM of your Company. The Cost Audit was not applicable for the financial year 2023-24. As per the applicable provisions of the Act, the Cost Auditor is required to forward the Cost Audit Report to the Company within 180 days from the end of the financial year, by September 27, 2025. Once the Cost Audit Report is received, the same shall be filed by the Company within the due date prescribed under the Act.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Board has appointed Mr. Shiv Hari Jalan, Practicing Company Secretary (FCS No. 5703 C.P No. 4226) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for the financial year 2023-24 is annexed as Annexure IV and forms an integral part of this Report. The Secretarial Audit Report for the year ended March 31,2024 does not contain any qualification, reservation or adverse remark.
CORPORATE GOVERNANCE REPORT
The Report on Corporate Governance and the Certificate of the Practicing Company Secretary regarding compliance of the conditions of Corporate Governance as required pursuant to the provisions of the SEBI Listing Regulations, are enclosed as Annexure V. Declaration signed by the Whole-time Director affirming compliance with the Code of Conduct by the members of the Board and Senior Management Personnel also forms part of this Report.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
Pursuant to the provisions of Regulation 34 of the SEBI Listing Regulations (as amended), the Business Responsibility and Sustainability Report ("BRSR Report") for FY24 is provided in a separate section of this Annual Report
FY24 and may be accessed on the website of the Company at https://www.advancedenzymes.com/investors/stock-exchange-compliance/#other-compliance
COMMITTEES OF THE BOARD
As per the Companies Act, 2013 and the SEBI Listing Regulations, during the year under review, the Board has five statutory Committees viz., Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Stakeholders Relationship Committee and the Risk Management Committee. The details of the composition of these Committees along with number of meetings held and attendance at the meetings are provided in the Corporate Governance Report, which forms an integral part of this Report.
VIGIL MECHANISM
Your Company had adopted Whistle Blower Policy / Vigil Mechanism Policy pursuant to the provisions of Section 177(9) of the Companies Act, 2013 and the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of the SEBI Listing Regulations. Details on the Vigil Mechanism of your Company have been outlined in Corporate Governance Report, which forms an integral part of this Report.
The Whistle Blower Policy may be accessed on your Company’s website at www.advancedenzymes.com/ investors/corporate-governance
MEETINGS OF THE BOARD
During the year, 4 (four) meetings of the Board of Directors were held. The requisite details of the Board Meetings and the details of the Directors present are provided in the Corporate Governance Report, which forms part of this Report.
SECRETARIAL STANDARDS
During the year under review, the Company has complied with the provisions of applicable Secretarial Standards issued by the Institute of Company Secretaries of India with respect to the Board and General Meetings, as notified by the Ministry of Corporate Affairs of India.
EVALUATION OF PERFORMANCE OF BOARD, ITS COMMITTEES AND DIRECTORS
Pursuant to the provisions of the Companies Act, 2013 and the SEBI Listing Regulations, the Board has undertaken an Annual Evaluation of its own performance, its various Committees and individual Directors. The manner in which
the performance evaluation has been carried out has been given in the Corporate Governance Report, annexed to this Report. The Board expressed its satisfaction of the evaluation process and outcome.
The Board Evaluation policy can be accessed on your Company’s website at www.advancedenzymes.com/ investors/corporate-governance.
FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS
Pursuant to provisions of Regulation 25(7) of the SEBI Listing Regulations, the details of familiarization program is available on the website of your Company at www. advancedenzymes.com/investors/corporate-governance. Further, upon appointment of an Independent Director, the Company issues a letter of appointment outlining his / her role, function, duties and responsibilities. The format of the letter of appointment is available on the Company’s website at: www.advancedenzymes.com/investors/corporate-
governance
CODE OF CONDUCT FOR PROHIBITION OF INSIDER TRADING
Your Company has in place a Code of Conduct for Prohibition of Insider Trading (known as the AETL Insider Trading Code), which lays down the process for trading in securities of the Company by the Designated Persons and to regulate, monitor and report trading by the employees of the Company either on his/her own behalf or on behalf of any other person, on the basis of Unpublished Price Sensitive Information.
The aforementioned Code, as amended, is available on the website of the Company at www.advancedenzymes.com/ investors/corporate-governance
INTERNAL CONTROL AND ITS ADEQUACY
Your Company has adopted procedures and systems for ensuring the orderly and efficient conduct of its Business, including adherence to the Company’s policies, safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of financial disclosures. Your Company maintains appropriate and adequate Internal Control System / Internal Financial Control commensurate to its size and nature of operations. Your Company’s Internal Control systems are tested and certified by the Internal Auditors and Statutory Auditors of the Company.
The Audit Committee periodically reviews the report(s) of the independent Internal Auditors along with the adequacy and effectiveness of Internal Control systems.
SIGNIFICANT AND MATERIAL ORDERS
During the year under review, there were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and its future operations.
CHANGE IN THE NATURE OF BUSINESS, IF ANY
There was no change in the nature of Business of your Company during the year under review affecting the financial position of the Company.
MATERIAL CHANGES FROM THE DATE OF END OF FINANCIAL YEAR TILL THE DATE OF THIS REPORT
Except as otherwise mentioned in this report, there are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the Financial year of the Company to which the financial statements relates and the date of this report.
PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED
The details of Loans and Investments under Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 (as amended), for the FY24 are given in the Standalone financial statements (Note No. 56 to the Standalone financial statements). Your Company has not provided any guarantee or security under Section 186 of the Act during the year under review.
ANNUAL RETURN
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return of the Company as on March 31, 2024 is available on the website of the Company at www.advancedenzymes.com
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
Information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 (as amended) is furnished in Annexure VI and forms part of this Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Pursuant to Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended ("Rules"), the details are disclosed in Annexure VII to this report. In
terms of Section 136(1) of the Act read with second proviso to the Rule 5 of the said Rules, the Integrated Annual Report with Annexure VII is being sent to the Members excluding the statement of particulars of employees under Rule 5(2) and (3) of the Rules ("Information"), which forms part of this report. The Annexure VII / Information under Rule 5(2) and (3) is available for inspection by the Members at the registered office of the Company during business hours on all working days except Saturdays and Sundays up to the date of the AGM. Any Member interested in conducting inspection and/or obtaining a copy of the said Annexure/ Information may write to the Company Secretary at the Registered Office address of your Company.
DEPOSITS
During the year under review, your Company did not invite or accept any Deposits covered under Chapter V of the Act. There were no outstanding deposits within the meaning of Sections 73 and 74 of the Act, read together with the Companies (Acceptance of Deposits) Rules, 2014 (as amended), at the end of the year under review or the previous financial year.
CREDIT RATING
During the year under review, there is no change in the Credit Rating obtained by the Company i.e. a long term rating of CRISIL A /Stable (Reaffirmed) and a short term rating of CRISIL A1 (Reaffirmed) for outstanding Bank loan facilities (outstanding facilities), by Credit Rating Information Services of India Limited (CRISIL).
GENERAL DISCLOSURES
During the year under review:
a. The Whole-time Director of your Company has not received any remuneration or commission from any of the subsidiaries.
b. Your Company has not issued Shares with Differential Rights as to Dividend, Voting or otherwise.
c. Your Company has devised a policy on Prevention of Sexual Harassment to comply with the provisions of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013. The said policy is hosted on the Company’s website at www.advancedenzymes.com. During the year under review, there were no cases / grievances reported or pending and the Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
d. There are no details to be disclosed under Section 134(3)(ca) of the Act as there has been no such fraud reported by the Auditors under Section 143(12) of the Act.
e. There are no applications made by or any proceedings pending against the Company under the Insolvency and Bankruptcy Code, 2016, during the year under review.
f. The details regarding the difference in valuation between a one-time settlement and valuation for obtaining loans from banks or financial institutions, along with reasons, are not applicable.
ACKNOWLEDGEMENTS
Your Directors acknowledge with gratitude the support received by the Company from the Banks, Government agencies/ organizations and employees of your Company.
Your Directors also acknowledge with thanks the faith reposed by the Investors in the Company and look forward to their continued support for times to come.
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