Directors' Report
Dear Members,
The Directors are pleased to present 29th Annual Report of your Company along with the audited financial statements for the year ended March 31, 2018.
FINANCIAL HIGHLIGHTS
Pursuant to the notification dated February 16, 2015 of the Ministry of Corporate Affairs (MCA), your Company has adopted the Indian Accounting Standards (IND AS) notified under Section 133 of the Companies Act, 2013 ("Act") in preparing and presenting the financial statements beginning the financial year under review. The figures for the previous financial year ended on March 31, 2017 and the balances as on April 1, 2016 has been restated accordingly in order to make this comparable.
The financial performance of your Company for the financial year ended March 31, 2018 is summarized below:
(Rs, in Million)
|
Particulars
|
Standalone
|
Consolidated
|
|
Year ended 31.03.2018
|
Year ended 31.03.2017
|
Year ended 31.03.2018
|
Year ended 31.03.2017
|
|
Revenue from operations
|
2,153.05
|
1,837.77
|
3,956.99
|
3,430.91
|
|
EBIDTA
|
547.15
|
547.01
|
1653.51
|
1533.89
|
|
Less:
|
|
|
|
|
|
Finance charges & interest (Gross)
|
30.60
|
27.20
|
80.86
|
35.77
|
|
Amortisation and Depreciation
|
78.14
|
83.29
|
182.98
|
127.61
|
|
Profit Before Tax
|
438.41
|
436.52
|
1,389.67
|
1,370.51
|
|
Less: Provision for Taxation
|
|
|
|
|
|
Current tax
|
93.78
|
84.55
|
478.47
|
455.36
|
|
Deferred tax
|
(14.27)
|
0.56
|
(7.71)
|
(5.89)
|
|
MAT credit entitlement
|
-
|
(0.90)
|
(17.03)
|
(2.38)
|
|
Tax adjustment for earlier years
|
-
|
6.61
|
0.38
|
(6.02)
|
|
Profit for the year
|
358.90
|
345.70
|
935.56
|
929.44
|
|
Surplus Brought Forward from Previous Year
|
1535.72
|
1194.58
|
3485.17
|
2562.94
|
|
Amount Available for Appropriations
|
1849.15
|
1535.72
|
4332.16
|
3485.17
|
|
Earnings Per Share (Amount in)
|
|
|
|
|
|
Basic
|
3.22
|
3.12
|
8.07
|
8.27
|
|
Diluted
|
3.21
|
3.12
|
8.06
|
8.27
|
RESULTS FROM OPERATIONS Revenue - Consolidated
Your Company's revenue from operations on consolidated basis increased to Rs, 3,956.99 Million in the financial year 2017-18 from Rs, 3,430.91 Million in the previous financial year, a growth rate of 15.33%. The total revenue comprises International sales amounting to Rs, 2,168.50 Million (previous financial year - Rs, 2,029.94 Million), growth of 6.83% and Domestic sales amounting to Rs, 1,788.49 Million (including Export Incentives of Rs, 31.02 Million) (previous financial year - Rs, 1,400.97 Million (including Export Incentives of Rs, 3.26 Million)) increased by 27.66%.
Your Company's domestic sales constitute 45% of revenue from operations during financial year 2017-18 as compared to 41% of revenue from operations during financial year 2016-17.
International sales were 55% of revenue from operations as compared to 59% of revenue from operations during previous financial year.
Revenue - Standalone
Your Company's revenue from operations on standalone basis increased to Rs, 2,153.05 Million from Rs, 1,837.77 Million in the previous financial year, at a growth rate of 17.16%. The total revenue comprises of International sales of Rs, 565.85 Million (previous financial year - Rs, 627.94 Million), decreased by 9.90% and Domestic sales Rs, 1,587.20 Million (including Export Incentives of Rs, 31.01 Million) (previous financial year -Rs, 1,209.83 Million (including Export Incentives of Rs, 3.27 Million)) increased by 31.19%.
The domestic sales constitute 73.72% of revenue from operations during financial year 2017-18 as compared to 65.83% of revenue from operations during financial year 2016-17. International sales were 26.28% of revenue from operations as compared to 34.17% of revenue from operations during financial year 2016-17.
Profits - Consolidated
EBIDTA (Earnings before interest, depreciation, tax and amortisation including other income) margin during financial year 2017-18 was Rs, 1653.51 Million (41.79%) as compared to Rs, 1533.89 Million (44.71%) during financial year 2016-17, decrease of about 2.92%.
Profit before tax stood at Rs, 1389.67 Million during financial year 2017-18 as against Rs, 1370.51 Million in the previous year, a growth of 1.40%. Profit after tax stood at Rs, 935.56 Million during financial year 2017-18 as compared to Rs, 929.44 Million during the financial year 2016-17, a growth of 0.66%.
Profits - Standalone
EBIDTA margin during the year under review was at Rs, 547.15 Million (25.41%) as compared to Rs, 547.01 Million (29.76%) in the previous financial year. Profit before tax stood at Rs, 438.41 Million during financial year 2017-18 as compared to Rs, 436.52 Million in the financial year 2016-17, a growth of 0.43%. Profit after tax stood at Rs, 358.90 Million during financial year 2017-18 as compared to Rs,345.70 Million during financial year 2016-17, a growth of 3.82%.
DIVIDEND
The Board of Directors of your Company ("Board") recommend a final dividend @ 25% i.e. Rs, 0.50 per equity share of face value of Rs, 2 each for the financial year ended March 31, 2018, aggregating to Rs, 55.82 Million (excluding Dividend Distribution Tax) as compared to final dividend @ 20% i.e. Rs, 0.40 per equity share of face value of Rs, 2 each for financial year 2016-17.
The dividend payout is subject to approval of Members at 29th Annual General Meeting of your Company ('AGM').
As mandated by the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) 2015 (as amended) [SEBI Listing Regulations], for the top 500 companies as on 31 March by market capitalization, the Board has adopted a Dividend Distribution Policy and the same is displayed on the Company's website at www.advancedenzymes.com/investors/ corporate-governance
|
Particulars
|
Authorised Capital
|
Paid-up Capital
|
|
No. of shares
|
Amount (Rs,)
|
No. of shares
|
Amount (Rs,)
|
|
Pre Stock Split
|
35,000,000
|
350,000,000
|
22,326,005
|
223,260,050
|
|
Post Stock Split
|
175,000,000
|
350,000,000
|
111,630,025
|
223,260,050
|
EMPLOYEES STOCK OPTION PLAN
The details of Employees Stock Option Scheme 2015 [as amended] ("ESOP Scheme 2015") and Employees Incentive Plan 2017 ("Plan 2017") are provided in Annexure IX and forms part of this Report. The said scheme/plan are also published on the website of the Company at www.advancedenzymes.com/investors/corporate-governance
RESERVES
During the financial year 2017-2018, your Company has not transferred any amount to the General Reserves.
SUB-DIVISION OF SHARES
The sub-division of equity shares of your Company from face value of Rs, 10 each to face value of Rs, 2 each ("Stock Split") and consequent alteration in Capital Clause of Memorandum of Association of your Company was approved by the Members on May 04, 2017, through a Postal Ballot.
The 'Record Date' for the purpose of ascertaining the Members entitled to receive the said sub-divided equity shares was fixed by the Board as 'May 26, 2017'. Subsequently, your Company has issued five (5) sub-divided equity shares of Rs, 2 each in lieu of one (1) equity share of Rs, 10 each to the eligible Members of the Company. In case of Members holding equity shares of your Company in physical form, the Company, without requiring the surrender of old share certificate(s), has directly issued and dispatched the new share certificate(s) for the sub-divided equity shares of Rs, 2 each. The said new share certificate(s) were issued in lieu of the old share certificate(s), which were deemed to have been automatically cancelled and be of no effect. In the case of equity shares of the Company held in dematerialized form, the sub-divided equity shares have been duly credited to the respective beneficiary accounts of the Members with the respective Depository Participants, as per the existing credits representing the equity shares of the Company.
In view of the aforesaid Stock Split, the number of equity shares of your Company and price of underlying equity share in the stock markets has been correspondingly adjusted by the Stock Exchanges, where your Company's shares are listed (i.e. BSE and NSE).
The details of the Authorised and Paid-up share capital of the Company (Pre & Post Stock Split) are as follows (as on March 31, 2018)
ESOP 2015:
The Nomination & Remuneration Committee in its meeting held on February 14, 2017 granted 220,000 (of Rs, 2 each) stock options to its eligible employees of the Company & US subsidiary ("Grantee"). Out of the total Options granted, 10% of stock options (i.e. 22000) got vested on February 15, 2018, as per the provisions of the Scheme. One Option is convertible and is equivalent to 1 equity share. Based on the exercise application & amount received from the Grantees, the Board allotted 17750 equity shares of Rs, 2 each on May 19, 2018. The Company is yet to receive exercise applications allot shares for remaining 4250 stock options. The shares issued under ESOP Scheme 2015 are subject to lock in for a period of 1 year from the date of allotment.
In view of above, the Paid-up share capital of your Company has increased as follows (as on May 19, 2018)
| |
Paid-up Capital
|
|
Particulars
|
No. of shares
|
Amount (Rs,)
|
|
Before Allotment
|
111,630,025
|
223,260,050
|
|
Post Allotment
|
111,647,775
|
223,295,550
|
Employees Incentive Plan 2017:
The Members of the Company has also approved the AETL Employees Incentive Plan 2017 ("Plan 2017") through trust route and related matters on May 4, 2017 through a Postal Ballot. Your Company has received In-Principle approval from BSE Limited (BSE) and National Stock Exchange of India Limited (NSE). As on the date of this report, no Stock Options / Stock Appreciation Rights have been granted under the Plan 2017.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated financial statements of your Company are prepared in accordance with the provisions of Section 129 and other applicable provisions, if any, of the Companies Act, 2013 read with rules made thereunder, Indian Accounting Standards ("IND AS") and Regulation 33 of the SEBI Listing Regulations and forms part of this Annual Report.
As mandated by the Ministry of Corporate Affairs, your Company has adopted IND AS for the financial year commencing from April 1, 2017. 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, 2018.
SUBSIDIARIES Investments: (a) Advanced Enzymes (Malaysia) Sdn. Bhd. ('AEM'):
During the year under review (on July 03, 2017), your Company completed the acquisition of 200,000 equity shares of MYR 1 (Malaysia Ringgit) each aggregating to MYR 200,000 (equivalent to approx. Rs, 3,134,000) of AEM
i.e. 80% of paid-up share capital of AEM.
Your Company also subscribed to Right Issue of 150,000 Equity Shares at MYR 1 per share of AEM, aggregating to mYr 150,000 (equivalent to Rs, 2,602,500) on March 13, 2018. In view of this, the shareholding of your Company in AEM increased to 87.50%.
On March 30, 2018, your Company completed the acquisition of remaining stake i.e. 50,000 equity shares of face value of MYR 1 each of AEM. The said acquisition was made at face value for a total consideration of MYR 50,000 (equivalent to Rs, 867,800). In view of the above, AEM has become a wholly-owned subsidiary of the Company, effective from March 30, 2018.
(b) Advanced Enzymes Europe BV ("AEE"):
During the year under review, your Company incorporated a wholly owned subsidiary, AEE, with issued share capital of Euro 2 Million [2,000,000 equity shares of EUR 1 each] (equivalent to approx. Rs, 149.84 Million) in Netherlands i.e. on July 11, 2017 mainly to expand your Company's business in European Market.
(c) evoxx technologies GmbH ("evoxx"):
Your Company's wholly owned subsidiary, Advanced Enzymes Europe BV completed the acquisition of 100% stake in evoxx for a consideration of € 6.57 million, on August 15, 2017. In view of above, evoxx become a Step-Down Subsidiary (100%) of your Company.
(d) JC Biotech Private Limited ("JCB"):
During the year under review, your Company subscribed to Right Issue of 189,000 equity shares of Rs, 10 each at a premium of Rs, 27 per equity share aggregating to Rs, 6,993,000 of JCB. The shares have been duly allotted on January 31, 2018. The purpose of Right Issue was mainly to meet the capital & operational expenditure of JCB. As the Right Issue was offered & subscribed by JCB's existing shareholders in proportionate to their respective shareholding in JCB, the shareholding of your Company in JCB remains same i.e. 70%.
(e) Acquisition of certain assets & liabilities of Biomedic Labs, LLC, USA
On 03 October 2017, the Company's subsidiary Advanced Supplementary Technologies Corporation ("ASTC") acquired certain assets and liabilities of Biomedic Labs, LLC, USA for a purchase consideration of USD 750,000. The Company has accounted for goodwill of USD 630,000 equivalent to ' 40.98 Million on consolidation.
Other details for the aforementioned Investments from
(a) to (d) are provided on the website of the Company at www.advancedenzymes.com/investors/stock-exchange-compliance
As at March 31, 2018 your Company has eleven (11) subsidiaries as listed below: Domestic Subsidiaries:
1. Advanced Bio-Agro Tech Limited (60%);
2. Advanced EnzyTech Solutions Limited (100%);
3. JC Biotech Private Limited (70%);
International Subsidiaries:
1. Advanced Enzymes Inc., USA (100%);
2. Advanced Supplementary Technologies Corporation (100% Subsidiary of Advanced Enzymes USA);
3. Cal-India Foods International, Inc. (doing business as Specialty Enzymes and Biotechnologies) (100% Subsidiary of Advanced Enzymes USA);
4. Dynamic Enzymes Inc. (100% Subsidiary of your Company);
5. Enzyme Innovation, Inc. (100% Subsidiary of Cal-India Foods International and a Step-down subsidiary of Advanced Enzymes USA)
6. Advanced Enzymes (Malaysia) Sdn. Bhd. (100%);
7. Advanced Enzymes Europe B.V. ["AEE"] (100%) [With effect from July 11, 2017].
8. evoxx technologies GmbH (100%) [Wholly owned subsidiary of AEE with effect from August 15, 2017]
During the year under review, Enzyfuel Innovation Inc. Subsidiary of Advanced Enzyme USA, ceased to be Subsidiary of the Company, as it being non-operative has been dissolved voluntarily.
The Policy for determining material subsidiaries is available on the Company website: www.advancedenzymes.com/investors/ corporate-governance
The individual financial statements and other reports of the Company's Subsidiaries have not been attached to the financial statements of the Company for the financial year 2017-18. Any Member seeking information on the annual financial statements of the Company's Subsidiaries may write to the Company Secretary at the registered office of the Company. The financial statements of the Company's Subsidiaries will be kept open for inspection at the registered office of the Company, from 11.00 a.m. to 3.00 p.m. on all working days, except Saturdays and Sundays, up to the date of the 29th AGM of the Company.
A separate statement containing the salient features of the financial performance of subsidiaries in the prescribed form AOC - 1 is annexed to the Directors' Report as Annexure I and forms part of this report. The Audited Consolidated financial statements together with Auditors' Report forms an integral part of the Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed review of the operations, performance and future outlook of your Company, Subsidiaries and its business are given in the Management Discussion and Analysis, as required under the SEBI Listing Regulations, and forms integral part of this Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134 of the Companies Act, 2013, your Directors, to the best of their knowledge & belief and based on the information & explanations provided to them, confirm that:
a. in the preparation of the annual accounts for the year ended March 31, 2018, 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, 2018 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 programme is necessary for the well-being of your Company. Your Company has adopted a revised Risk Assessment & Management policy in supersession of the existing policy. The Policy initially has outlined the broad based parameters of identification, assessment, monitoring and mitigation of various risks. Internal Auditors has also reviewed the Risk Management framework of the Company.
Your Company has initiated the process of transition to an Integrated Enterprise Risk Management, Internal Controls Management and Assurance Framework and processes to drive a common integrated view of risks, optimal risk mitigation responses and efficient management of internal control and assurance activities.
RELATED PARTY TRANSACTIONS
During the financial year 2017-18, the transactions entered with related parties, as defined under the Companies Act, 2013 and provisions of the SEBI Listing Regulations, were in the ordinary course of business and on arms' length basis. Approval of the Audit Committee and Board of Directors has been obtained by the Company for related party transactions of the Company, as per the provisions of the Companies Act, 2013. A quarterly update has been provided to the Audit Committee and the Board of Directors on the related party transactions undertaken by the Company for their review. 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 Policy on materiality of Related Party Transactions and dealing with related party transaction, as approved by the Board, is available on the Company's website and can be accessed at www.advancedenzymes.com/investors/corporate-governance
As prescribed by 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 AND PROTECTION 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. In view of this, your Company has transferred 48,000 unclaimed equity shares pertaining to financial year 2009-2010 to the Demat account of IEPF on November 30, 2017. The details of the said shares transferred are provided on the website of the Company at www.advancedenzymes.com/investors/corporate-governance
Details of unclaimed shares transferred, unclaimed Dividend & Shares due for transfer & procedure to claim the same are provided in the Notes to Notice for 29th Annual General Meeting of the Company ("AGM") and in the Corporate Governance Report which forms part of this Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Pursuant to the provisions of Section 135 of the Companies Act, 2013, your Company had constituted the Corporate Social Responsibility Committee.
The Annual Report on Corporate Social Responsibility Activities has been provided in Annexure-III and forms part of this report. The Composition of CSR Committee is disclosed in the said Annual Report on CSR Activities.
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) & Senior Management Personnel. The Committee also looks into the matter of remuneration of the Executive Directors, KMP's & Senior Management Personnel and revise the remuneration subject to limits approved by the shareholders.
The Nomination and Remuneration Policy may be accessed on the Company's website at www.advancedenzymes.com/ investors/corporate-governance
CHANGE IN DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the financial year 2017-18, there has been no change in the composition of Board and Key Managerial Personnel of your Company.
Your Company received the resignation letter dated May 18, 2018 from the Independent Director, Mrs. Rupa Vora. She tendered her resignation from the position of Director of the Company with effect from May 18, 2018, due to some personal reasons. The Board accepted her resignation & sincerely appreciated her association with the Company and the support which she rendered during her tenure.
RETIRE BY ROTATION
Mr. Chandrakumar Rathi, Managing Director is liable to retire by rotation at the AGM, and being eligible, offers himself for re-appointment. The Board, therefore, recommends his reappointment as Managing Director of the Company. Brief profile of Mr. Chandrakumar Rathi have been provided in Notice convening 29th AGM of the Company.
DECLARATION BY THE INDEPENDENT DIRECTORS
During the year under review, declarations were received from all Independent Directors of the Company that they satisfy the 'criteria of Independence' as defined under Regulation 16(1)
(b) of the SEBI Listing Regulations and Section 149(6) of the Companies Act, 2013 read with Schedule IV and the relevant Rules made thereunder.
AUDITORS AND AUDITORS' REPORT
Pursuant to provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, BSR & CO LLP, Chartered Accountants ("BSR") were appointed as Statutory Auditors for a term of five years to hold office from the conclusion of 27th Annual General Meeting up to the conclusion of the 32nd Annual General Meeting, subject to ratification at every Annual General Meeting.
In view of the above, the approval of Members is being sought for ratification of appointment of BSR as Statutory Auditors of the Company and to fix their remuneration
The Auditors' Report to the Members on the Financial Statements of the Company for the year ended March 31, 2018 does not contain any qualification, reservation or adverse remark.
CORPORATE GOVERNANCE REPORT
The Report on Corporate Governance and the Certificate of the Auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated in Part C of Schedule V of the SEBI Listing Regulations, are enclosed as Annexure
IV. A declaration signed by the Managing Director in regard to compliance with the Code of Conduct by the members of the Board and Senior Management Personnel also forms part of this Report.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Company has appointed Mr. Shiv Hari Jalan, 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 2017-18 is annexed as Annexure V and forms an integral part of this Report. The Secretarial Audit Report for the year ended March 31, 2018 does not contain any qualification, reservation or adverse remark. However, the Secretarial Auditor in his report has mentioned that the Company has spent an amount of Rs, 5.60 Million against the amount of Rs, 5.86 Million required to be spent during the year towards Corporate Social Responsibility (CSR). Subsequently the Company has spent the unspent amount of Rs, 0.26 Million, which is self-explanatory.
Details of the CSR activities, expenditure & other disclosures are provided in the annexed Annual Report on CSR activities.
BUSINESS RESPONSIBILITY REPORT
Pursuant to Regulation 34 of the SEBI Listing Regulations, top five hundred listed entities based on market capitalization (calculated as on March 31 of every financial year) shall provide Business Responsibility Report describing the initiatives taken by them from an environmental, social and governance perspective. The said report is attached as Annexure VI to this Director's Report.
COMMITTEES OF THE BOARD
As per the Companies Act, 2013 & the SEBI Listing Regulations, the Board has four committees viz., Audit Committee, Nomination and Remuneration Committee, the Corporate Social Responsibility Committee, and the Stakeholders Relationship 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 and forms 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 part of this Report.
The Vigil Mechanism Policy may be accessed on your Company's website at www.advancedenzymes.com/investors/corporate-governance
MEETINGS OF THE BOARD
During the year, eight (8) 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.
EVALUATION OF PERFORMANCE OF BOARD, ITS COMMITTEES AND OF 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 Evaluation policy can be accessed on your Company's website at www.advancedenzymes.com/investors/ corporate-governance. We affirm that the remuneration paid to the Directors is as per the terms laid out in the Nomination and Remuneration Policy of the Company.
FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS
Pursuant to provisions of Regulation 25(7) of the SEBI Listing Regulations, the detail of familiarization program is available at website of your Company at www.advancedenzymes.com/ investors/corporate-governance. Further, at the time of the 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, which lays down the process of trading in securities of the Company by the designated employees and the connected persons and to regulate, monitor and report trading by the employees and the connected persons 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 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, the 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
There are 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 business and in the nature of business of your Company during the year under review.
PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED
The details of loans and investments under Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014, for the financial year 2017-18 are given in the standalone financial statements (Note 7, 8 and 14 to the standalone financial statements). Your Company has not provided any guarantee or security under Section 186 of the Companies Act, 2013 during the financial year 2017-18.
EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of Section 92 the Companies Act, 2013 read with the rules made there under, the extract of Annual Return of the Company in form MGT-9 is enclosed as Annexure X to this report.
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 Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure VII and forms part of this Report.
Pursuant to Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is disclosed in Annexure VIII to this report.
The statement containing particulars of remuneration of employees as required under Section 197(12) of the Act, read with Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is given in an Annexure XI to the Annual Report. In terms of Section 136(1) of the Act, the Annual Report is being sent to the Members excluding the said Annexure XI. However, this annexure 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 desirous of obtaining a copy of the said Annexure may write to the Company Secretary at the Registered Office address of your Company.
FIXED DEPOSIT
Your Company did not invite or accept deposits covered under Chapter V of the Companies Act, 2013 and there are no such deposits outstanding with the Company.
CREDIT RATING
During the year under review, there is no revision in the rating received from CRISIL. The rating stood at A/Stable for Bank facilities to the tune of Rs, 100 Crores, by Credit Rating Information Services of India Limited (CRISIL).
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
a. Neither the Managing Director nor the Whole-time Directors of your Company receive any remuneration or commission from any of its 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; as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The said policy is hosted on Company's website at www.advancedenzymes. com/investors/corporate-governance
There were no cases / grievances reported or pending during the year under review.
ACKNOWLEDGMENTS
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.
For and on behalf of the Board of Directors of
Advanced Enzyme Technologies Limited
Vasant L. Rathi
Date: May 19, 2018 Chairman
Place: Thane (DIN: 01233447)
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