DIRECTORS' REPORT Dear Members, The Board of Directors have pleasure in presenting 23rd Annual Report and the Audited financial Statement of the Company for the financial year ended March 31, 2015. OPERATIONS: The weather conditions during the grape harvest season for the year under report were the worst we had in the last two decades. There were unseasonal rains in the first two weeks of March, significantly affecting the grape crop. Unfortunately the poor weather conditions affected all grape growing area in the state of Maharashtra. Despite these conditions your Company has shown a growth in the total income from Rs.1147 million to Rs.1230 million an increase of 6.75%, while the profit after tax has grown from Rs.56.45 million to Rs.75.86 million an increase of 25.59%. The food processing business also became profitable in the year under report, assisting in achieving the above results. FRESH FRUITS SEGMENT: India continues to be an important supplier of Fresh Grapes to Europe. Poor weather conditions have affected this business for the last two years but in fresh produce business the stake holders have learnt the methods of mitigating the risks. The grape growers too have now understood the requirements of the international markets and are to a large extent able to fulfil them. Total exports of grapes from India to EU decreased from 80325.69MT in 2013-14 season to 55094.87MT in 2014-15 season. While our exports of grapes increased from Rs.837 million to Rs.898 million an increase of 7.28%. Our business is now expanding into other countries like China and Russia and for the future we expect to continue to grow this business at an average of over 20% for the coming few years. FOOD PROCESSING SEGMENT: The Indian food processing industry continues to be a focus area for our Government. Many Incentives are offered for stabling and operating this business. Maggi noodle incident is having on the growth of this business but we feel that this is a temporary phenomenon and all concerned agencies will learn a lot from this and the industry as a whole would mature and get more organized. We feel the food processing industry is poised for huge growth both in the domestic and the international markets. During the year under report our income from this segment grew from 236.69 million in 2013-14 to 307.27 million in 2014-15 a growth of 30%. We expect to maintain this for the coming year as well. DIVIDEND: Considering the performance during the year 2014-15, your Directors have recommended a Dividend of per share (10 per cent) for the financial Year 2014-15. The dividend payout, if approved, will result in outflow of Rs.14,617,722 inclusive of Rs.24,72,722 on account of Dividend Distribution Tax. DIRECTORS: Pursuant to the provisions of Section 149 of the Act, which came into effect from April 1, 2014, Mr. Mayur J Shah, Mr. Dinesh Oza, and Mr. Anil Sharma were appointed as independent directors at the Annual General Meeting of the Company held on September22, 2014. The terms and conditions of appointment of independent directors are as per Schedule IV of the Companies Act, 2013. Your Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and clause 49 of Listing Agreement and there has been no change in the circumstances which may affect their status as independent director during the year. The appointments of the Key Managerial Personnel have been made before the commencement of the financial year under review and the same have been formalised during the year as per the Companies Act, 2013. INSURANCE: The Companies Plants,Property,Equipments & Stocks adequately insured against the loss of fire and other risks which are considered necessary by the management. The Company has also taken sales turnover policy which includes Marine Coverage, Domestic Sales & inter unit movement of goods. The Company has also taken Directors and officers Liabilities Policies to provide coverage against the liabilities arising on them. FIXED DEPOSIT: During the year under review, your Company has not accepted any fixed deposits within the meaning of Section 73 of the Companies Act, 2013 read with rules made there under. CERTIFICATION: During the year under review, the Company has obtained the following certifications pertaining to the Highest International Standard of Food Safety and Hygiene: 1. ISO 22000:2005 - This certifies the presence of highest food safety management system covering all organisation in the food chain from "farm to fork". 2. SGF International E.V. - This certifies participation of the Company in Voluntary Control System for safeguarding the perfect quality of its products and enhancing customer and consumer safety. 3. Halal Certificate - This certificate is recognition that the products are permissible in Islamic Law and we acquired this certificate to export our products in Islamic Countries. 4. Kosher Certificate - This certificate helps in increasing the saleability of the product in the international supermarkets. There is clear evidence that a kosher symbol boosts market share that a kosher product can win more favourable shelf space, and that positioned next to a competing non-kosher brand. Kosher is and therefore an important investment our Company makes in order to increase market reach and share. 5. BRC certificate for Nasik (Unit I) Pack house and Sangli (Unit II) Pack house. 6. FDA, USA to supply products in US Market. 7. APEDA Recognition for Nasik (Unit I), Sangli (Unit II). 8. Global GAP Certificate 9. FSSAI 10. Business Social Compliance Initiative (BSCI) FINANCE: 1. CARE has affirmed its rating on long term bank facilities of the Company "CARE A -" & "CARE A2+" for short term facilities of the company. 2. The Bank has renewed Fund and Non Fund Base working Capital Credit facilities up to Rs.2,100 Lakhs. TECHNOLOGY ABSORPTION AND ENERGY CONSERVATION: The Company has a continuous focus on energy conservation. Regular studies are conducted to analyse quantitative energy conservation patterns and variances are rigorously scrutinized. The Company regularly benchmarks its energy conservation levels and consistently works towards improving efficiencies. NUMBER OF BOARD MEETINGS: The Board of Directors met 4 (four) times during the year under review. The details of board meetings and the attendance of the Directors are provided in the Corporate Governance Report which forms part of this Report. INDEPENDENT DIRECTORS' MEETING: The Independent Directors met on March 18, 2015, without the attendance of Non-Independent Directors and members of the Management. The Independent Directors reviewed the performance of non-independent directors and the Board as a whole; the performance of the Chairperson of the Company, taking into account the views of Executive Directors and Non-Executive Directors and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties. BOARD EVALUATION: The Board adopted a formal mechanism for evaluating its performance and as well as that of its Committees and individual Directors, including the Chairman of the Board. The exercise was carried out through a structured evaluation process covering various aspects of the Boards functioning such as composition of the Board & committees, experience & competencies, performance of specific duties & obligations, contribution at the meetings and otherwise, independent judgment, governance issues etc. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION: The Company's policy on directors' appointment and remuneration and other matters provided in Section 178 (3) of the Companies Act, 2013 is available on the website of the Company. FOREIGN EXCHANGE EARNING AND OUTGO: Foreign Exchange earnings during the year amounts to Rs.924,157,495 (Previous Year Rs.897,853,788) and Foreign Exchange outgo during the year was Rs.149,881,785 (Previous Year Rs.139,979,724). CORPORATE GOVERNANCE: The Company has adopted Corporate Governance practices and has complied with all the mandatory requirements as specified under clause 49 of the Listing Agreement. As required under the listing agreement, a separate Report on Corporate Governance forms part of this Annual Report. The certificate from statutory Auditors of the Company regarding compliance of conditions of Corporate Governance is annexed. The Board of Directors support the basic principles of good corporate governance. In addition to this, the Board lays strong emphasis on transparency, accountability and integrity. In compliance with Corporate Governance requirements as per Clause 49 of the Listing Agreement, your Company has formulated and implemented a Code of Business Conduct and Ethics for all Board members and senior management personnel of the Company, who have affirmed the compliance thereto. CORPORATE SOCIAL RESPONSIBILITY The details of Corporate Social Responsibility (CSR) carried out by the Company are appended in the Annexure to the Directors' Report. The particulars of the CSR committee constituted by the Company pursuant to the provisions of Section 135 of the Companies Act, 2013 and the rules forming part of the same are included in the Corporate Governance Report annexed and forming part of this Annual Report. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND Pursuant to the provision of Section 124 of the Companies Act, 2013, relevant amounts which remained unpaid or unclaimed for a period of 7 years have been transferred by the Company to the Investor Education and Protection Fund. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES The information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Companies Act, 2013, the Report and Accounts are being sent to the members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the members at the Registered Office of the Company during business hours on working days of the Company upto the date of the ensuing Annual General Meeting. If any member is interested in inspecting the same, such member may write to the Company Secretary in advance. SECRETARIAL STANDARDS OF ICSI The Companies Act, 2013 has mandated the Secretarial Standards on Board Meetings & General Meetings specified by the Institute of Company Secretaries of India (ICSI). The secretarial standards issued by ICSI from time to time, though were recommendatory in nature, have been complied with by the Company during the year under review. MANAGEMENT DISCUSSION AND ANALYSIS REPORT: As required by Clause 49 of the Listing Agreement with Stock Exchanges, a management discussion and analysis report is appended to the Annual Report. FORMATION OF VARIOUS COMMITTEES: Details of various committees constituted by the Board of Directors are given in the Corporate Governance Report annexed which is a part of this report. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE: As per the requirement, The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 read with rules made thereunder, your Company has constituted Internal Complaints Committee which is responsible for redressal of complaints related to sexual harassment. During the year under review, there were no complaints pertaining to sexual harassment. EXTRACT OF ANNUAL RETURN: The details forming part of the extract of the Annual Return in Form MGT-9, is annexed to this Report as Annexure. RELATED PARTY TRANSACTIONS: All the related party transactions entered into during the financial year were on an arm's length basis and were in the ordinary course of business. Your Company had not entered into any transactions with related parties which could be considered material in terms of Section 188 of the Companies Act, 2013. Accordingly, the disclosure of related party transactions as required under Section 134(3) (h) of the Companies Act, 2013 in Form AOC 2 is not applicable. SECRETARIAL AUDIT REPORT: Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the rules made thereunder, your Company had appointed Mr. R.S. Sharma, Practising Company Secretary to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for financial year 2014-15 is annexed, which forms part ofthis report as Annexure-B. There were no qualifications, reservation or adverse remarks in the Secretarial Audit Report of the Company. AUDITORS' & AUDITORS' REPORT: The Statutory Auditors of the Company, M/s. Mayank Shah & Associates, Chartered Accountants (Firm Registration Number - 106109W) retire at the conclusion of the ensuing Annual General Meeting. The said Statutory Auditors have confirmed their eligibility and willingness to accept the office on re-appointment. The necessary resolution seeking your approval for re-appointment of Statutory Auditors has been incorporated in the Notice convening the Annual General Meeting. The Board has duly reviewed the Statutory Auditors' Report on the Accounts. The observations and comments, if any, appearing in the Auditors' Report are self-explanatory and do not call for any further explanation / clarification by the Board of Directors. APPRECIATION: Yours Directors place on record their appreciation of the sincere and devoted services, rendered by all employees of the company and the continued support and confidence of the customers. The Board expresses special thanks to progressive farmers of Maharashtra who have worked hard to achieve International Standards in the quality of their produce. The Board also expresses its sincere thanks to Axis Bank Ltd. and their officers, Agricultural and Processed Food Products Export Development Authority (APEDA), Ministry of Food Processing Industry (MFPI) and all other well wishers, for their timely support. By order of the Board For Freshtrop Fruits Ltd., Ashok V Motiani Chairman & Managing Director (DIN: 00124470) Date : August 14, 2015 Regd. Office: A-603, Shapath IV, Opp. Karnavati Club, S G Road, Ahmedabad - 380 015 |