Dear members,
The Directors take pleasure in presenting the 15th Annual Report together with the audited financial statements of the Company for the year ended 31st March 2020.
1. RESULTS OF OUR OPERATIONS AND STATE OF AFFAIRS
The Company's Financial Results for the year ended 31st March 2020 is summarized below:
Rs in Crores
*Ind-AS Adjustments
The Standalone Financial Statements of the Company for the Financial Year Ended 31.03.2020 are prepared in compliance with the applicable provisions of the Act, Indian Accounting Standards (Ind- AS) and as prescribed by Securities and Exchange Board of India (SEBI) under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as 'the SEBI (LODR) Regulations, 2015). The Financial Statements of the Company for the year ended 31st March 2020 have been disclosed as per Division ll of Schedule III to the Companies Act, 2013.
Pursuant to the provisions of Section 136 of the Companies Act, the Financial Statements of the Company, the Standalone Financial Statements along with all relevant documents and the Auditors' Report thereon form part of this Annual Report. The Financial Statements as stated above are also available on the website of the company and can be accessed at the web link http://www.oceanaabiotek.com/
OVERVIEW OF COMPANY'S FINANCIAL PERFORMANCE
During 2019-20, the Company achieved a turnover of Rs. 25.68 Cr., registering a de-growth of 29% over the previous year due to slowdown in the economy as such. The Profit before Tax was at Rs. 2.49 Cr. as against a loss of Rs. 20.56 Cr. in the previous year. The Profit after Tax was at 2.10 Cr. as against a loss of 20.05 Cr. in the previous year, registering an impressive growth of 110%. The Company focused on reducing fixed costs, working capital and spending capital expenditure prudently on critical growth projects.
Material Changes and Commitments
Except as disclosed elsewhere in this Report, no material changes and commitments which could affect the Company's financial position have occurred between the end of the financial year of the Company and date of this Report.
Transfer to Reserves
The Company has not proposed to transfer any amount to the General Reserves.
Cash & Cash Equivalent
Cash and Cash Equivalent as at March 31, 2020 was Rs. 0.13 Crores. The Company Continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.
Dividend
Your Directors has not recommended any dividend for the financial year 2019-20.
We regret to inform that due to unavoidable financial constraint, the Board of Directors at its meeting held on 22nd October, 2018 decided to defer the dividend declared @ Rs. 1.50 (15% of R510) per share for the FY 2017-18, which was approved in the 13th Annual General Meeting.
COVID-19 and its impact
Consequent to the outbreak of the COVID-19 pandemic and the lockdown/curfew introduced by the Central and State Governments, the operations in the Company's manufacturing plants situated across various locations of the Country had to be shut down or were disrupted towards the latter half of the second fortnight of March 2020 onwards and which continued through the month of April 2020.
With the easing in the lockdown/ curfew and the Governments permitting operations to be resumed with necessary permission from the local authorities, the Company from end April 2020 onwards has resumed operations, in a partial manner, in almost all the plants barring very few which are also expected to commence operations shortly as customers start placing their orders. As the situation improves, the Company expects to scale up operations to the full levels over time.
As the pandemic is ongoing, the Company continues to take various measures to safeguard the health and safety of its employees and further to ensure total adherence to the guidelines issued by the Central and the respective State Governments besides the local authorities at all its business locations.
The Company has considered the possible effects/ impact arising from COVID-19 on its financial results for the year 2019-20 and at this stage, it has concluded that no material adjustments are required to the same. The Company will continue to closely monitor any material changes to future economic conditions. A note in this regard is included in the Standalone Audited Financial Statements for the years under review vide Note 32 - Significant Accounting Judgements, Estimates and Assumptions forming part of this Annual Report for the financial year 2019-20.
2. Share Capital
The Company's paid up Equity Share Capital as on March 31st 2020 is Rs. 13.56 Crore. The Company has neither issued any shares with differential rights as to Dividend, Voting or otherwise nor issued shares (including sweat equity shares) to the Employees or Directors of the company under any Scheme. As on March 31, 2020 none of the Directors of the Company hold shares of convertible instruments of the Company.
No disclosure is required under Section 67(3)(c) of the Act, in respect of voting rights not exercised directly by the employees of the Company as the provisions of the said Section are not applicable.
3. Particulars of Loans, Guarantees And Investments
Particulars of loans, guarantees or investments Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the Notes to the financial statements provided in this Annual Report.
4. Public Deposits
We have not accepted any fixed deposits, including from the public, and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.
5. Particulars of contracts or arrangements made with related parties
Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2, is appended as Annexure C to the Board's report.
6. Management's Discussion And Analysis
In terms of the provisions of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management's Discussion and Analysis is set out in this Annual Report.
7. Risk Management Report
In terms of the provisions of Section 134 of the Companies Act, 2013, a Risk Management report forms part of the Management's Discussion and Analysis set out in this Annual Report.
8. Board policies
The Company is compliant with the following policies/charters as mandated for all listed Companies:
- Audit Committee Charter/Policy
- Nomination and Remuneration Policy
- Vigil Mechanism/Whistle Blower Policy
- Code of conduct for prevention of insider trading and code of practices and procedures for fair disclosure of unpublished price sensitive information
- Policy for preservation of documents and Archival Policy
- Policy for Determination of Materiality of Any Event / Information
- Policy on Related Party Transactions
All the policies are available in the website of the Company http: / / www.oceanaabiotek.com/
9. Corporate social responsibility (CSR) initiatives:
The Company's CSR Policy has been re-stated making it more comprehensive and in alignment with the requirements of the Act, when applicable. The Company is committed to Corporate Social Responsibility and strongly believes that the business objectives of the Company must be in congruence with the legitimate development needs of the society in which it operates.
The company is falling under purview/ compliance of Section 135 of the Companies Act, 2013, as
The Company made a loss of INR 20.56 Crores in the immediately preceding Financial Year 2018-19 and hence is not required to make any contribution towards Corporate Social Responsibility pursuant to the provisions of Section 135.
Report made under clause (o) of sub-section (3) of section 134 Unspent Amount under the minimum required CSR Expenditure:
The Company should have spent at least 2% of the average net profits of the company made during the three immediately preceding financial years. The Company unfortunately did not get the proper platform/ assignment to spend its 2% of its average net profit of the company of the immediately preceding three years for CSR, as per the General Circular No. 01/2016 dated 12th January, 2016, issued by the "Ministry of Corporate Affairs", the Company have unspent amount of Rs 6,64,368/- in the earlier years which it intend to carry forward to the subsequent years.
10. Human resources management
At Oceanaa Biotek, we focus on the workplace of tomorrow that promotes a collaborative, transparent and participative organization culture, encourages innovation, and rewards individual contribution. The focus of human resources management at Oceanaa Biotek is to ensure that we enable each and every employee to navigate the next, not just for clients, but also for themselves. We have reimagined our employee value proposition, to make it more meaningful to our employees.
The three key strategic pillars under this are :
• Inspiring them to build what's next
• Making sure their career never stands still
• Navigating further, together
Disclosure pertaining to the remuneration and other details as required under Section 197(12) of the Act, and the provisions contained in Rule 5(2) and Rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:
The company has not employed any person during the year,
- whose remuneration was not less than Rs.1,02,00,000/- for the whole year or
- not less than Rs. 8,60,000/- per month, if employed for part of the year.
- if employed throughout the financial year or part thereof, was in receipt of remuneration in that year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the managing director or whole-time director or manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company.
11. Corporate governance
Our corporate governance philosophy
Our corporate governance practices are a reflection of our value system encompassing our culture, policies, and relationships with our stakeholders. Integrity and transparency are key to our corporate governance practices to ensure that we gain and retain the trust of our stakeholders at all times. Corporate governance is about maximizing shareholder value legally, ethically and sustainably. At Oceanaa Biotek, our Board exercises its fiduciary responsibilities in the widest sense of the term. Our disclosures seek to attain the best practices in international corporate governance. We also endeavor to enhance long-term shareholder value and respect minority rights in all our business decisions.
A separate Section on Corporate Governance practices followed by the Company, together with a Certificate from the Company's Auditors confirming compliance, forms a part of this Annual Report, as per SEBI (LODR) Regulations 2015
12. Meetings Board Meetings
The Board met 12 times during the financial year. The meeting details are provided in the Corporate Governance report that forms part of this Annual Report. The maximum interval between any two meetings did not exceed 120 days, as prescribed in the Companies Act, 2013, the details of which are given in the Corporate Governance Report.
Audit Committee
The Audit Committee comprises Three (3) members of which three are Independent Directors. During the year, Five (5) Audit Committee Meetings were convened and held. Details of the committee are given in the Corporate Governance Report.
CSR Committee
The CSR Committee comprises Three (3) members of which Mr. Jesuraj, Independent Director is the Chairman of the Committee. The Committee met once during the reporting period. Details of the Committee are given in the Corporate Governance Report.
13. Secretarial Standards of ICSI
Pursuant to the approval given on 10 April 2015 by the Central Government to the Secretarial Standards specified by the Institute of Company Secretaries of India, the Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) came into effect from 1 July 2015. The said standards were further amended w.e.f. 1 October 2017.
The Company complies with all applicable mandatory secretarial standards issued by the Institute of Company Secretaries of India.
14. Extract of Annual Return
As required by Section 92(3) of the Act and the Rules framed there-under, the extract of the Annual Return in Form MGT 9 is available on the website of the Company in the following link:
http://www.oceanaabiotek.com/pdf/ Annual%20Return/ Annual%20Return%20MGT%209.pdf.
15. Details In Respect of Frauds Reported By Auditors Under Section 143(12)
During the year under review, neither the statutory auditors nor the secretarial auditor has reported to the audit committee, under Section 143 (12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Board's report.
16. Internal financial control and its adequacy Internal Audit and their adequacy
The Company has in place well defined and adequate internal controls commensurate with the size of the Company and the same were operating effectively throughout the year.
The company has an in-house Internal Audit (IA) function. The scope and authority of the Internal Audit function is defined in the Internal Audit Charter. To maintain its objectivity and independence, the IA function reports to the Chairman of the Audit Committee of the Board. The IA Department evaluates the efficacy and adequacy of Internal Control System, its compliance with operating systems and policies of the Company and accounting procedures at all locations of the company. Based on the report of IA function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.
Internal Controls over Financial Reporting
The Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations. During the year, such controls were tested and no reportable material weakness in the design or operations were observed. The Company has policies and procedures in place for ensuring for proper and efficient conduct of its business, 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 reliable financial information.
The Company has adopted Accounting Policies which are in line with the Accounting Standards and the Act. These are in accordance with generally accepted accounting principles in India. Changes in policies, if required, are made in consultation with the Auditors and are approved by the Audit Committee.
The company has a robust financial closure, certification mechanism for certifying adherence to various accounting policies, accounting hygiene and accuracy of provisions and other estimates.
17. 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 the Company's operations in future.
18. Policy on directors' appointment and remuneration
The current policy is to have an appropriate mix of executive, non-executive and independent directors to maintain the independence of the Board, and separate its functions of governance and management. The Board of Directors consists of 4 Directors as on 31 March, 2020, of whom 3 are NonExecutive Independent Directors. The policy of the Company on directors' appointment and remuneration, including the criteria for determining qualifications, positive attributes, independence of a director and other matters, as required under sub-section (3) of Section 178 of the Companies Act, 2013, is available on our website
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.
19. Board Effectiveness
a. Familiarization Programme for the Independent Directors
In compliance with the requirements of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, the Company has put in place of familiarization Programme for the Independent Directors to familiarize them with their role, rights and responsibility as Directors, the working of the Company, nature of the industry in which the company operates, business model etc. The details of the familiarization Programme are explained in the Corporate Governance Report.
b. Board Evaluation
Pursuant to the provisions of the Act and the SEBI (LODR) Regulations 2015, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Compliance Committee. The criteria applied in the evaluation process are explained in the Corporate Governance Report.
20. Directors and Key Managerial Personnel
The Board of your Company is duly constituted in accordance with the requirements of the Companies Act, 2013 and SEBI Regulations.
Directors and KMPs resigned and appointed during the year:
1. Mrs. Pushpamadha, Director has resigned on 08th May, 2020.
The Company has received necessary declaration from each independent director under Section 149(7) of the Companies Act, 2013, that he / she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
There was no change in the composition of the Board of Directors and the Key Managerial Personnel, except as stated above.
21. Directors' Remuneration Policy And Criteria For Matters Under Section 178
Information regarding Directors' Remuneration Policy and criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of section 178 are provided in the Corporate Governance Report.
22. Listing on stock exchanges
The Company's shares are listed on BSE Limited
23. Directors' Responsibility Statement
The financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) under the historical cost convention on accrual basis except for certain financial instruments, which are measured at fair values, the provisions of the Companies Act, 2013 (to the extent notified) and guidelines issued by SEBI. The Ind AS are prescribed under Section 133 of the Companies Act, 2013, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016. Accounting policies have been consistently applied except where a newly-issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
The directors confirm that:
- In preparation of the annual accounts for the financial year ended March 31, 2020, the applicable accounting standards have been followed and there are no material departures.
- They 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 at the end of the financial year and of the profit of the Company for that period.
- They have taken proper and sufficient care towards the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
- They have prepared the annual accounts on a going concern basis.
- They have laid down internal financial controls, which are adequate and are operating effectively.
- They have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
24. Audit reports and auditors Audit reports
- The Auditors' Report for fiscal 2020 does not contain any qualification, reservation or adverse remark. The Auditors' Report is enclosed with the financial statements in this Annual Report.
- The Secretarial Auditors' Report for fiscal 2020 does not contain any qualification, reservation or adverse remark. The Secretarial Auditors' Report is enclosed as Annexure A to the Board's report in this Annual Report.
- As required by the Listing Regulations, the auditors' certificate on corporate governance is enclosed as Annexure to the Board's report. The auditors' certificate for fiscal 2020 does not contain any qualification, reservation or adverse remark.
- In addition, the Company has also voluntarily engaged a Practicing Company Secretary to conduct an audit of corporate governance. The report does not contain any qualification, reservation or adverse remarks.
Auditors
Statutory auditors
M/ s. Abhay Jain & Co, Chartered Accountants (Firm Registration No: FRN 004636S) were
first appointed as Statutory Auditor of the Company to fill the casual vacancy created by resignation of the earlier Auditor, Ms. Elangovan & Co, Chartered Accountants, Chennai with effect from April 03, 2019 till the conclusion of this AGM M/ s. Abhay Jain & Co, Chartered Accountants (Firm registration number 000008S) was appointed as the statutory auditors of the Company to hold office for a period of four consecutive years from the conclusion of the 14th AGM of the Company to be held 2019, till the conclusion of the 18th AGM to be held in the year 2022. The requirement for the annual ratification of auditors' appointment at the AGM has been omitted pursuant to Companies (Amendment) Act, 2017 notified on May 7, 2018.
During the year, the statutory auditors have confirmed that they satisfy the independence criteria required under Companies Act, 2013, Code of ethics issued by Institute of Chartered Accountants of India.
Reply to the Statutory Auditors' qualification and remarks were given in separate sheet attached to Board's report.
Secretarial Auditor
As required under Section 204 of the Companies Act, 2013 and Rules thereunder, the Board appointed S Satheesh Kumar, Practicing Company Secretary, as secretarial auditor of the Company for fiscal 2019-20.
The Secretarial Audit Report submitted by the Company Secretary in Practice is enclosed as a part of this Annual report in Annexure-A, which is self-explanatory.
Reply to the Secretarial Auditors' qualification and remarks were given in separate sheet attached to Board's report.
Cost Records and Cost Audit
Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities carried out by the Company.
25. Conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo
The particulars, as prescribed under sub-section (3)(m) of Section 134 of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, are enclosed as Annexure B to the Board's report.
26. Particulars Of Contracts Or Arrangements With Related Parties
All transactions with related parties are placed before the Audit Committee as also the Board of approval prior omnibus approval of the Audit Committee and the Board is obtained for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis. The statement is supported by a Certificate from the CEO & MD. Your Company has developed a related party transactions manual, standard operating procedures for the purpose of identification and monitoring of related party transactions.
The policy on related party transactions as approved by the board is available on the Company's website. All transactions entered into with related parties during the year were on an arm's length pricing basis and were in the ordinary course of business. There were no material related party transactions i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last Audited Financial Statements entered into during the year. Accordingly, there are no transactions that are required to be reported in form AOC 2.
None of the Directors or the Key Managerial Personnel has any pecuniary relationships or transactions vis-a-vis the Company.
27. Enhancing Shareholder Value
Your Company firmly believes that its success in the marketplace and a good reputation are among the primary determinants of value to the Shareholder. The organizational vision is founded on the principles of good Governance and by the resolve to be a customer-centric organization which motivates the Company's Management to be aligned to deliver leading-edge building products backed with dependable after sales services.
Your Company is committed to creating and maximizing long-term value for Shareholders and essentially follows a four pronged approach to achieve this end.
a) by increasing all-round operational efficiencies.
b) by identifying strategies that enhance its competitive advantage.
c) by managing risks and pursuing opportunities for profitable growth, and
d) by cementing relationships with other important Stakeholder Groups through meaningful engagement processes and mutually rewarding associations that Enable it to create positive impacts on the economic, societal and environmental dimensions of the Triple Bottom Line.
Underlying this is also a dedication to value-friendly financial reporting that assures the Shareholder and investor of receiving transparent and unfettered information on the Company's performance.
28. Code Of Business Conduct And Ethics
The Board of Directors has approved a Code of Conduct and Ethics in terms of Schedule IV of Companies Act, 2013 and Listing Agreement. All the Board Members and the Senior Management personnel have confirmed compliance with the Code for the year ended March 31, 2020. The annual report contains a declaration to this effect signed by the Managing Director.
29. Prevention Of Sexual Harassment Of Women At Workplace Policy
The Company's policy on Prevention of Sexual Harassment of Women provides for the protection and prevention against sexual harassment of women employees at the workplace and redressal of such complaints. There were no complaints received or pending for redressal during the FY 19-20.
30. Vigil Mechanism/Whistle Blower Policy:
In accordance with section 177(9) and (10) of the Companies Act, 2013 and Regulation 22 of SEBI (LODR) Regulations, 2015 the company has established a Vigil Mechanism and has a Whistle Blower Policy. The policy provides a mechanism for all employees to report to the management, grievances about the unethical behavior or any suspected fraud. The policy is available at the website of the company www.acewinagriteck.com
31. Prevention of insider trading:
The Company has complied with the provisions of SEBI (Prevention of Insider Trading) Regulations. The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. The code of conduct for prevention of insider trading is available in the website of the company www.oceanaabiotek.com
32. Compliance Of Secretarial Standard
The Company has complied with the Secretarial Standards issued by The Institute of Company Secretaries of India and approved by the Central Government as required under Section 118(10) of the Companies Act, 2013
33. Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status of the company:
There are no significant and material orders passed by the Regulators or Courts or Tribunals, which would impact the going concern status of the Company and its future operations.
34. Acknowledgments
We thank our customers, vendors, investors, bankers, employee volunteers for their continued support during the year. We place on record our appreciation of the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation and support.
We thank the Government of India, particularly the Ministry of Labour and Employment, the Ministry of Communications, the Ministry of Electronics and Information Technology, the Ministry of Commerce and Industry, the Ministry of Finance, the Ministry of Corporate Affairs, the Central Board of Direct Taxes, the Central Board of Indirect Taxes and Customs, GST authorities, the Reserve Bank of India, Securities and Exchange Board of India (SEBI), various departments under the state governments and union territories and other government agencies for their support, and look forward to their continued support in the future.