Dear members,
The Board of Directors is pleased to present the Company's 58th annual report and the
Company's Audited Financial Statements for the financial year ended March 31, 2023.
1. Financial results
The Company's financial performance for the year ended March 31, 2023 is summarized
below:
|
2022 23 |
2021 22 |
|
(Rs. in Lacs) |
(Rs. in Lacs) |
| Revenue from operations |
2306.18 |
2217.56 |
| Operating expenditure |
2153.58 |
2160.48 |
| Profit before Interest, Depreciation, Tax |
152.60 |
57.08 |
| Less: Finance Cost |
149.37 |
146.80 |
| Profit/(Loss) after Finance Cost |
3.23 |
(89.72) |
| Less: Depreciation |
98.27 |
107.49 |
| Profit (Loss) for the year before tax |
(95.04) |
(197.21) |
| Add: Exceptional Items |
- |
- |
| Profit/(Loss) for the year after exceptional items and before tax |
(95.04) |
(197.21) |
| Less: Income Tax |
- |
3.02 |
| Profit/(Loss) after tax |
(95.04) |
(200.23) |
| Add/(Less): Other Comprehensive Income |
0.98 |
1.24 |
| Total Comprehensive Income for the year |
(94.06) |
(198.99) |
2. Company's performance and state of affairs of the company
* Revenue from operations (net) increased by 4.00 % to Rs. 2306.18 Lacs from Rs.
2217.56 Lacs in the previous year.
* PBDIT increased by 167.30 % to Rs. 152.60 Lacs for the year ended 31st March, 2023
compared to previous year Rs. 57.08 Lacs.
* Total comprehensive (loss) decreased by 52.73 % to Rs. (94.06) Lacs for the year
ended 31st March, 2023 compared to previous year Rs. (198.99) Lacs.
3. Dividend and transfer to reserves
In view of the loss, the Board of Directors is unable to recommend any dividend for the
financial year 2022-23 and no amount is transferred to Reserves for the financial year
2022-23.
4. Material changes affecting the company
There have been no material changes and commitments affecting the financial position of
the company between end of the financial year and date of this report. There has been no
change in the nature of business of the company.
5. Management Discussion and Analysis Statement and Corporate Governance Report
The statement on management discussion and analysis, forms part of the annual report is
provided in Annexure I.
Regulation 15(2) of Securities & Exchange Board of India (Listing Obligations &
Disclosure Requirements) Regulations, 2015 is not applicable to the Company since the
Company's paid-up capital is less than Rupees Ten Crores and net worth is less than Rupees
Twenty Five Crores as prescribed under the said regulation and hence the provisions
relating to the Corporate Governance is not applicable to the Company, hence no Corporate
Governance Report is given by the Company as a part of the Director's Report.
6. Secretarial Standards
The Directors state that the applicable Secretarial Standards i.e. SS-1 and SS-2
relating to the 'Meetings of the Board of Directors' and 'General Meetings', respectively
have been duly followed by the Company.
7. Director's Responsibility Statement
Your Directors state that:
a) in the preparation of the annual accounts for the year ended March 31, 2023, 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) the Directors have selected such accounting policies and applied them consistently
and made judgments and estimates that are reasonable and prudent so as to give a true and
fair view of the state of affairs of the Company as at March 31, 2023 and of the profit
and loss of the Company for the year ended on that date;
c) the Directors have taken proper and sufficient care 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 Directors have prepared the annual accounts on a going concern basis;
e) the Directors have laid down internal financial controls to be followed by the
Company and that such internal financial controls are adequate and are operating; and
f) the Directors have revised proper systems to ensure compliance with the provisions
of all applicable laws were in place and that such systems are adequate and operating
effectively.
8. Contracts and arrangements with related parties
All contracts/arrangements/transactions entered by the Company during the financial
year with related parties were in ordinary course of business and on arms length basis and
that the provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus
disclosure in Form AOC-2 is not required.
The Policy on materiality of Related Party Transactions and on dealing with Related
Party Transactions as approved by the Board may be access on the Company's website at:
www.organiccoatingsltd.com
Members may refer to Note No. 33 to the financial statement which sets out related
party disclosures pursuant to Ind AS.
9. Corporate Social Responsibility (CSR)
The provisions relating to Corporate Social Responsibility (CSR) under section 135 of
the Companies Act, 2013 are not applicable to the Company.
10. Risk Management
The Risk Management Policy has been framed, implemented and monitored. Major risk
identified by the businesses and functions are systematically monitored through mitigating
actions on continuing basis.
The development and implementation of Risk Management Policy has been covered in
Management Discussion & Analysis which forms part of this report.
11. Internal Financial Controls
The Company has in place adequate internal financial controls with reference to the
financial statements. During the year such controls were tested and no reportable material
weakness in the design or operation was observed.
12. Directors and Key Managerial Personnel
Mr. Abhay R. Shah, Director of the Company retires by rotation and being eligible
offers himself for re-appointment.
As per the provisions of the Companies Act, 2013 Independent Directors have been
appointed for a period of 5 years and shall not be liable to retire by rotation. The
Company has received declaration from all the Independent Directors of the Company
confirming that they meet the criteria of independence prescribed under the act and the
listing regulations.
The following are the remuneration policies for the Director's, Key Managerial
Personnel and other employees:
a. introduction - Organic Coatings Limited recognizes the importance of aligning the
business objectives with specific and measurable individual objectives and targets. The
company has therefore formulated the remuneration policy for its directors, key personnel
and other employees keeping in view the following objectives.
i. ensuring that the level and compensation of remuneration is reasonable and
sufficient to attract, retain and motivate to run the company successfully.
ii. ensuring that relationship of remuneration to performance is clear and meets the
performance benchmarks.
b. Policy -
i. The Board on the recommendation of Nomination & Remuneration Committee
(NRC) shall review and approve the remuneration payable to the Executive Directors of the
Company within the overall limits approved by the shareholders.
ii. The Board on the recommendation of NRC shall also review and approve the
remuneration payable to the Key Managerial Personnel
iii. The remuneration structure to the Executive Directors and Key Managerial
Personnel shall include the following:
a) Basic pay
b) Perquisites and allowance
c) Retiral benefits
d) Bonus
iv. Remuneration to Non-Executive Directors
The Board on the recommendation of NRC shall review and approve the remuneration
payable to the Non-Executive Directors of the Company.
The Non-Executive Directors shall be entitled to sitting fees for attending the
meetings of the Board and the Committees thereof.
v) Remuneration to other employees
Employees are assigned grades according to their qualifications and work experience,
competencies as well as their roles and responsibilities in the organization. Individual
remuneration shall be determined within the appropriate grade and shall be based on
various factors such as job profile, skills sets, seniority, experience and prevailing
remuneration levels for equivalent jobs.
13. Meetings of the Board
Four meetings of the Board of Directors were held during the year 2022-23 on
30/05/2022, 12/08/2022, 14/11/2022 and 13/02/2023.
14. Performance Evaluation
The Company has devised a policy for performance evaluation of the Board, Committees
and other individual directors (including Independent Directors) which include criteria
for performance evaluation of the Non-Executive and Executive Directors. The evaluation
process inter-alia considers attendance of the Directors at Board and Committee Meetings,
acquaintance with business, communicating interse board members, effective participation,
domain knowledge, compliance with code of conduct, reason and strategy.
The detailed programs for familiarization of Independent Directors with the Company,
their roles, rights and responsibilities in the Company, nature of the industry in which
the Company operates, business model of the Company are being shared and discussed.
A separate meeting of Independent Directors' was held during the year 2022-23 on 14th
November, 2022.
15. Policy on directors' appointment and remuneration and other details
The Board of Directors has framed a policy which lays down a framework in relation to
remuneration of Directors, Key Managerial Personnel and Senior Management of the Company.
This policy also lays down criteria for selection and appointment of Board Members keeping
in mind the relevant provisions of the Companies Act, 2013 read with specific rules.
16. Internal financial control systems and adequacy
The details in respect of internal financial control systems and their adequacy are
included in the management discussion and analysis which forms part of this report.
17. Audit Committee
The audit committee consists of the following members of the Board of Directors:
a) Ms. Ashwini Y. Lad (Independent Director) - Chairperson
b) Mr. Dipakkumar K. Kanabar (Independent Director)
c) Mr. Ashwinkumar H. Raval (Independent Director)
d) Mr. Ajay R. Shah (Wholetime Director & CFO)
During the financial year four audit committee meetings were held on 30/05/2022,
12/08/2022, 14/11/2022 and 13/02/2023.
18. Nomination & Remuneration Committee
The Nomination & Remuneration Committee consists of all the Independent Directors
consisting of the following members of the board of directors:
a) Mr. Dipakkumar K. Kanabar (Independent Director - Chairman)
b) Ms. Ashwini Lad (Independent Director)
c) Mr. Ashwinkumar H. Raval (Independent Director)
During the financial year 22-23 two Nomination & Remuneration Committee meetings
were held on 12/08/2022 & 13/02/2023.
19. Stakeholders Relationship Committee
The Stakeholders Relationship Committee consists of the following Directors:
a) Mr. Ashwinkumar H. Raval. (Independent Director - Chairman)
b) Mr. Dipakkumar K. Kanabar (Independent Director)
c) Ms. Ashwini Lad (Independent Director)
d) Mr. Abhay R. Shah (Managing Director)
During the financial year 22-23 one Stakeholders Relationship Committee meeting was
held on 13/02/2023.
20. Auditors and auditors' report
Statutory Auditors
M/s. Soman Uday & Co, Chartered Accountants were appointed as Statutory Auditors of
your Company at the Annual General Meeting held on 30th September, 2022 for a term of five
consecutive years to hold the office from the conclusion of the said Annual General
Meeting till the conclusion of its 62nd Annual General Meeting i.e. till the conclusion of
Annual General Meeting to be held during the year 2027 for conducting statutory audit for
the financial years 2022-23 to 2026-27. They have confirmed that they are not disqualified
from continuing as Auditors of the Company.
The Report given by the Auditors on the financial statement of the Company is part of
this report. There has been no qualification, reservation, adverse remark or disclaimer
given by the Auditors in their Report.
Secretarial Auditor
The Board has appointed D.Kothari & Associates, Practicing Company Secretaries to
conduct the Secretarial Audit. The Secretarial Audit Report for the financial year ended
March 31, 2023 is annexed herewith and marked as Annexure II to this report. The
Secretarial Audit Report does not contain any qualification, reservation, adverse remark
or disclaimer.
21. Vigil mechanism
The Vigil Mechanism of the Company, which also includes Whistle Blower Policy, includes
an ethics and compliance task force comprising senior executives of the Company. Protected
disclosures can be made by Whistle Blower through an email or letter to the Chairman of
the Audit Committee. No person has been denied access to the Audit Committee.
22. Particulars of loans given, investments made, Guarantees given and securities
provided
The Company has not given any loans or made any investments or provided guarantees u/s
186 of the Companies Act, 2013.
23. Conservation of energy, technology absorption and foreign exchange earnings and
outgo.
The particulars related to conservation of energy, technology absorption, foreign
exchange earnings and outgo as required to be disclosed under the act are provided in
Annexure III to this report.
24. Annual return
The annual return of the Company has been placed on the website of the Company and can
be accessed at www.organiccoatingsltd.com.
25. Particulars of employees and related disclosures
Disclosures with respect to the remuneration of Directors, KMPs and employees as
required under Section 197 of the Companies Act, 2013 read with Rule 5(1) of The Companies
(Appointment and Remuneration of Managerial Personnel) Rules 2014 are given in Annexure IV
to this report.
The Company does not have any employee whose particulars are required to be disclosed
in terms of the provisions of Section 197(12) of the act read with Rule 5(2) and 5(3) of
the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, hence
furnishing of the same does not arise.
Having regard to the provisions of the first proviso to Section 136(1) of the act, the
annual report excluding the information regarding the top ten employees is being sent to
the members of the Company. The said information is available for inspection on all
working days during the business hours at the registered office of the Company. Any member
interested in obtaining such information, may write to the Company Secretary and the same
shall be furnished on request.
26. General
Your Directors take that no disclosure or reporting required in respect of the
following items as there were no transactions on these items during the year under review.
1) Details relating to deposits covered under Chapter V of the act.
2) Issue of Equity Shares to differential rights as to dividend, voting or otherwise.
3) Issue of shares (including sweat equity shares) to employees of the Company.
4) The Company does not have any subsidiaries, hence, the question of receiving
remuneration or commission by the Managing Directors or Whole Time Directors of the
Company from the subsidiaries does not arise.
5) No significant or material orders were passed by the Regulators or Courts or
Tribunals which impact the going concern status and Company's operation in the future.
6) No fraud has been reported by the auditors to the Audit Committee or the Board.
Your Directors further state that during the year under review there were no cases
filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013.
27. Acknowledgement
Your Directors would like to express the sincere appreciation for the assistance and
co-operation received from Shareholders, Bank of Maharashtra, Government Authorities and
other Business constituents during the year under review.
Your Directors would also like to appreciate the commitment displayed by the human
resources of the Company.
| On behalf of the Board of Directors |
| Abhay R. Shah |
| Managing Director |
| (DIN:00016497) |
| Ajay R. Shah |
| Wholetime Director & CFO |
| (DIN:00011763) |
| Place: Mumbai |
| Date : August 14, 2023 |
|