This report includes M.D.& A as appropriate so that duplication and
overlapping between Boards Report and the entire material is provided in a composite
and comprehensive document.
4. BUSINESS PORTFOLIOS AND PERFORMANCE:
Our Company is a multi-line business organization and is engaged in
Logistics services, Coffee processing and trading, Rubber plantations, manufacture and
trading of Natural Fibre products.
Coffee Division:
Coffee is seasonal, especially the Divisions Monsooned coffee
business. Monsooned Coffees are Specialty Coffees from India that are considered Specialty
owing to its unique processing method, physical traits and Cup quality.
Monsooned coffees are produced only in the Malabar coast, especially in
Mangalore. It is listed under the GI products. Mangalore, which experiences the South West
Monsoon rains in abundance during June – Septem-ber became an established region for
processing of Monsooned Coffee owing to the humid climatic conditions that was ideal for
recreating Monsooned Coffees. There are two types of Monsooned Coffees – Arabica
& Robusta. The primary processing is done during the Monsoon period i.e. June-
September months. Our processing unit is ideally located to produce the finest quality of
Monsooned coffees.
Harvesting of coffee will take place between the months of Dec-Mar. We
have to procure raw coffee for monsooning during Dec-July to take care of our 11 months
shipments i.e., from October to next year Septem-ber. Monsooned coffees cannot be bought
off the shelf, as and when it is required for the shipments. Our sales take place in the
first half around 30-35% and the balance 65-70% will take place in the second half.
During the year 2018-19, the Division has recorded the highest volume
and turnover, inspite of the substantial reduction of prices in Coffee. The price of
Coffee reached the lowest in 13 years and therefore the Division could not achieve the
Gross Profit levels as compared to the previous two years. The year under review, has
therefore, been an year with normal Gross Profit level.
Natural Fibre Division:
During the year under review, export of coir products from India has
decreased as compared to the previous year. However there was substantial growth in the
export of Geotextiles and power loom mats. The wide applicability and eco friendly
property of coir geotextiles are promoting growth in this segment. There was little to no
gains for the standard PVC Tufted doormats of the division.
In contrast, the turnover for the division for the year under review
was the highest till date both in export as well as domestic sales. The division was
successful in achieving marked increase in profits compared to the previous year as a
result of increased sales coupled with tight cost controls and the favorable exchange
rates.
Selling margins were slightly reduced during the period under review
due to severe pressure from business partners, however this was in effect compensated with
increased business.
It is also to be noted that the period under review saw marked increase
in operating expenses due to increase in raw materials costs. However, the collective
efforts taken to control raw materials usage and minimize wastage at all levels, helped
the division close the year with improved results.
Product and process quality control measures were strictly monitored in
line with control of raw materials usage, to avoid wastage and quality issues. There were
no quality issues/claims reported during the period under review.
The profit margins would have seen further improvement if printing of
door mats at Pollachi, Tamil Nadu, factory was not disrupted by local agitation during the
peak shipment period. Corrective action was taken by the division to move all painting to
Alleppey based vendors. Although there was considerable increase in processing and
transportation costs, the division managed to meet our delivery commitments without even a
single failure. A strategy is being developed to address printing issues at our factory in
consultation with the local Administration and the Pollution Control Board.
NFD has also articulated a vision to grow beyond its traditional
doormat business by widening its scope to Natural products sourced from South India in the
coming years. We have already started exploring opportunity products like Virgin Coconut
oil, Lemongrass oil, Coconut Barbecue briquettes, Cotton and Jute textiles, Coir
Mattresses, Coir Pith products, etc., for overseas markets under the Aspinwall brand name.
Domestic sales are also showing good gains and poised for further growth. Setting up of
our own office and a marketing person in USA (as we did for Europe) is also on the
priority list.
Plantation Division:
Natural Rubber plantation industry in India was badly affected by
torrential rains and floods hitting the state of Kerala in the month of August 2018.The
unexpected floods have pushed the sector into more trouble especially when it was passing
through a critical phase due to low prices, climate vagaries, high wages, etc. The
torrential rains have taken a heavy toll on the rubber output in India, the worlds
sixth-biggest producer and second-largest consumer.
Indias natural rubber production fell by 7.5% to 6.9 lac tonnes
in 2018-19, even as consumption went up by 9% to 12.1 lac tonnes, compared to 2017-18. As
per Rubber Boards provisional data, production was the second lowest in recent times
after the FY 2015-16.
According to the Association of Natural Rubber Producing Countries
(ANRPC), world production of natural rubber (NR) also has experienced a fall of 10.1%.
Our plantation could harvest a crop of 788477 Kgs only against a budget
of 950000 Kgs mainly on account of the heavy rains and landslide calamity. The Division
has taken maximum efforts to bring in more cost efficiency in its operations.
Despite of the adverse conditions, the division could register a
slender operational profit by cutting down costs, generating additional income, enhancing
productivity and improving the sales premium through better quality/services. The division
has successfully started a new venture utilizing the improved brand image and sales
premium. The newly launched Bought Latex operations is making good strides by generating
additional revenue, enlarging the customer base apart from helping in combating the
negative effects of low market price. The division is also exploring the possibility of
inter-cropping like Coffee etc. The Wage Settlement is under negotiation and adequate
provision has been considered in the financials to take care of estimated rise in wages.
The price situation may slightly improve in the FY 2019-20 on account
of the increasing demand - supply gap and expected rise in crude oil prices due to obvious
reasons which could in turn boost synthetic rubber prices.
Logistics Division:
During 2018-19 the division has handled new commodities viz. Met Coke,
River Sand, Bauxite & Raw Cashews, through its Mangalore Branch.
The Division is specialised in food grains import through its major
bulk-cargo handling locations. The volumes of the said cargo are largely controlled by the
Government policies and therefore, can vary from time to time. The performance of the
Division is not strictly comparable with the previous year, which was an exceptionally
good year, considering the large volumes of wheat and fertilizers which were handled
during the said year. This has also led to the substantial higher income from warehouses
at our major Bulk cargo handling locations for the previous year.
5. INTERNAL CONTROL SYSTEM AND ITS ADEQUACY:
The Company has in place adequate systems of internal control
commensurate with its size and the nature of its operations. These have been designated to
provide reasonable assurance with regard to recording and providing reliable financial and
operational information, complying with applicable statutes, safeguarding assets from
unauthorised use, executing transactions with proper authorisation and ensuring compliance
of corporate policies.
The Company has appointed M/s.Suri & Co., Chartered Accountants, to
oversee and carry out internal audit of its activities. The audit is based on an internal
audit plan, which is reviewed every year in consultation with the Statutory Auditors and
the Audit Committee.
The Audit Committee of the Board of Directors of the Company reviews
the Audit Reports submitted by the internal auditors. Suggestions for improvement are
considered and the Audit Committee follows up on corrective action and reviews the
positive remedial actions taken.
Cautionary Statement
Certain statements made in this Report relating to the Companys
objectives, projections, outlook, expectations, estimates and others may constitute
‘forward looking statements within the meaning of applicable laws and
regulations. Actual results may differ from such expectations whether expressed or
implied. Several factors could make significant difference to the Companys
operations. These include climatic and economic conditions affecting demand and supply,
government regulations and taxation, natural calamities over which the Company does not
have any direct control.
6. PERFORMANCE OF THE COMPANY:
The revenue from operations for the FY 2018-19 was at Rs.27,242 lacs
which was marginally lower in comparison to the previous years figure of Rs.28,094
lacs. EBITDA (before exceptional items) was Rs.967 lacs during the FY 2018-19 as compared
to the EBITDA of Rs.2658 lacs (before exceptional items) in the FY 2017-18. During the
year, the total comprehensive income was Rs.738 lacs as against Rs.1317 lacs for the last
year.
Transfer to Reserves
The Company proposes to transfer Rs.450 lacs to the General Reserve out
of the amount available for appropriation and an amount of Rs.1643 lacs is proposed to be
retained in the profit and loss account (excluding Other Comprehensive Income).
Dividend
The Board of Directors are pleased to recommend a first and final
dividend of Rs.3/- per equity share for the year 2018-19 as compared to Rs.3.5/- per
equity share for the year before.
7. DEVELOPMENTS IN HUMAN RESOURCES AND INDUSTRIAL RELATIONS:
Human potentials has been perceived as powerful resource right from
founding stage of Aspinwall wherein Company makes continuous and concerted efforts to
groom its HR to meet with the present and future challenges in the field of Technology and
Management functions and also focuses on providing an environment conducive for grooming
employees to enable them to contribute on a continuous basis for the growth of the
organization and also to meet with the rapidly changing industrial scenario.
The company is deeply concerned about its Human Resource (HR) which is
a prime asset for improvement and enhancement of productivity and profitability. Very
harmonious, cordial and healthy industrial relations prevailed throughout the year.
The total strength of human asset of the Company as on March 31, 2019
was 776.
8. WHOLLY-OWNED SUBSIDIARIES:
The Company has four wholly-owned subsidiaries as on March 31, 2019.
There are no associate companies or joint venture companies within the meaning of Section
2 (6) of the Companies Act, 2013 ("Act"). There has been no material change in
the nature of business of the subsidiaries. Pursuant to the provisions of the Section 129
(3) of the Act, a statement containing the salient features of the financial statements of
the Companys subsidiaries in Form AOC-1 is attached to the financial statements of
the Company. Further, pursuant to the provisions of the Section 136 of the Act, the
financial statements of the Company, consolidated financial statements along with the
relevant documents and separate audited accounts in respect of subsidiaries, are available
on the website of the Company.
Following are the brief description of the wholly-owned subsidiaries of
the Company:
8.1 Aspinwall Technologies Ltd
The main activities of the Company are the development and trading of
business automation systems and programmes in software for Aspinwall and Company Limited
and its subsidiaries.
8.2 Malabar Coast Marine Services Pvt. Ltd.
The main activities of this Company are stevedoring and freight
forwarding. Stevedoring is carried out mainly in the port of Mormugao (Goa). Freight
forwarding is carried out in locations like Goa, Bangalore and Mangalore.
8.3 Aspinwall Geotech Ltd.
Aspinwall Geotech Limited was formed for carrying on the business of
Geotextiles. However, a major fire accident in the year 2002 had damaged a critical
machinery and since then no commercial activity has been possible.
8.4 SFS Pharma Logistics Private Limited
SFS Pharma is engaged in the business of specialized logistics service
and provides service for Door to door transportation of temperature/time sensitive
shipments in India and abroad.
SFS Pharma handles clinical trial/Pharmaceuticals/Biological sample and
other temperature sensitive ship- ments by providing a validated VIP packaging as well as
data loggers.
The company has made made improvements in operations during the last
two years FY 2017-18 and 2018- 19 which is very encouraging and likewise the Company is
confident to make decent margins in the years to come.
The company has a plan to further invest in infrastructure, manpower,
packaging etc in this FY2019-20 to strengthen its capability.
9. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the Section 134 (5) of the Companies Act, 2013, the Board
of Directors, to the best of their knowledge and ability, confirm that:
i. in the preparation of the annual accounts, the applicable accounting
standards have been followed and there are no material departures;
ii. 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 the affairs of the Company at the end of the
financial year and of the profit of the Company for that period;
iii. they 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;
iv. the directors have prepared the annual accounts on a going concern
basis;
v. 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 effectively;
vi. they have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate and operating
effectively.
10. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Changes in Directors
During the year under review, Mr.Venkitraman Anand (DIN: 07446834),
Executive Director, resigned from the Board of Directors of the Company, effective from
the close of business hours of August 31, 2018.
Mr.Adithya Varma (DIN: 02213375), retires by rotation and being
eligible, has offered himself for re-appoint- ment.
Mr.Mahadev Lakshminarayanan (DIN:05003710), was appointed as an
Additional Director under the Independent category, by the Board of Directors effective
from May 01, 2018. The shareholders at the AGM held on August 01, 2018, had regularised
the said appointment by passing a Special Resolution, for a period of five years,
effective from May 01, 2018.
Pursuant to the provisions of Section 203 of the Act, the Key
Managerial Personnel ("KMP") of the Company as on the end of the FY 2018-19 are
– Mr.Rama Varma, Managing Director, Mr.T.R.Radhakrishnan, Chief Financial Officer,
Mr.Rajesh.S, Chief Executive Officer and Mr.Neeraj R Varma, Company Secretary.
The following were the changes to the list of KMPs of the Company
during the FY 2018-19:
a) Mr.Venkitraman Anand, Executive Director, resigned from the Board of
Directors of the Company, effec- tive from the close of business hours of August 31, 2018.
b) Mr.Rajesh.S, was appointed as CEO of the Company effective from
November 12, 2018.
The Independent Directors of the Company have submitted a Declaration
under Section 149 (7) of the Act, declaring that they meet the criteria of independence
under the said Act.
Number of meetings of the Board
Four meetings of the Board of Directors were held during the year. For
details of the meetings of the Board, including the attendance details, please refer to
the Corporate Governance Report, which forms part of this report.
Board Evaluation
The Board of Directors has carried out an annual evaluation of its own
performance, Board Committees and individual directors pursuant to the provisions of the
Act and the Corporate Governance requirements as prescribed by SEBI (LODR) Regulations,
2015 and based on the Guidance Note on Board Evaluation issued by SEBI. The performance of
the Board was evaluated by the Board after seeking inputs from all the Directors on the
basis of the criteria such as composition of committees, effectiveness of committee
meetings, etc. The Board and the Nomination and Remuneration Committee reviewed the
performance of the individual directors on the basis of the criteria such as the
contribution of the individual director to the Board and committee meetings like
preparedness on the issues to be discussed, meaningful and constructive contribution and
inputs in meetings, etc.
In addition, the Chairman was also evaluated on the key aspects of his
role. In a separate meeting of the independent directors, performance of non-independent
directors, performance of the Board as a whole and performance of the Chairman was
evaluated, taking into the views of the Managing Director and Non-Executive Director. The
same was discussed in the Board Meeting that followed the meeting of the independent
directors, at which the performance of the Board, its committees and individual directors
was also discussed. Performance evaluation of independent directors was done by the entire
Board, excluding the independent director being evaluated.
Policy on directors appointment and remuneration and other
details
The brief description of the Companys policy on Directors
appointment and remuneration and other matters, has been disclosed in the Corporate
Governance Report, which forms part of this Report.
Audit committee
The details pertaining to composition of Audit Committee are included
in the Corporate Governance Report, which forms part of this Report.
11. AUDITORS:
Statutory Auditors
Pursuant to the provisions of the Companies Act, 2013, the Company, at
its AGM held on August 02, 2017, had appointed M/s.BSR & Associates LLP, Chartered
Accountants (Firm Registration No.116231W/W-100024), as the Statutory Auditors of the
Company for a period of five years till the conclusion of the 102nd AGM of the Company to
be held in the year 2022.
Cost Auditors
M/s BBS & Associates, Cost Accountants (Registration No.00273),
were the Cost Auditors of the Company for the FY 2018-19. The Board of Directors at their
meeting held on May 27, 2019, has approved the reappointment of the said firm as the Cost
Auditors of the Company for the FY 2019-20 and has also recommended the Audit Fee payable
to them. As per the provisions of the Companies Act, 2013, read with Companies (Audit and
Auditors) Rules, 2014, audit fee payable to the Cost Auditors is to be ratified by the
members of the Company.
Secretarial Auditors
M/s BVR & Associates, Company Secretaries LLP (AAE-7079), were
appointed as the Secretarial Auditors of the Company for the FY 2018-19.
Auditors Report and Secretarial Audit Report
The Auditors report and the Secretarial Audit Report does not
contain any qualifications, reservations or adverse remarks. The report of the Secretarial
Auditor is given as an Annexure, which forms part of this Report.
12. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The Company has not advanced any loans/guarantees, under section 186 of
the Act, during the year. The details of the loans granted by the Company to its
wholly-owned subsidiaries of the Company is given as an Annexure to this Report.
13. TRANSACTIONS WITH RELATED PARTIES
None of the transactions with related parties falls under the scope of
Section 188 (1) of the Act. Information on transactions with related parties pursuant to
Section 134 (3) (h) of the Act read with Rule 8 (2) of the Companies (Accounts) Rules,
2014, are given as an Annexure in Form AOC-2 and the same forms part of this Report.
14. CORPORATE SOCIAL RESPONSIBILITY
The brief outline of the Corporate Social Responsibility (CSR) Policy
of the Company and the initiatives undertaken by the Company on CSR activities during the
year are set out as an Annexure of this Report in the format prescribed in the Companies
(Corporate Social Responsibility) Rules, 2014. For other details of the CSR Committee,
please refer to the Corporate Governance Report, which forms part of this report. The
Policy is available on the website of the Company (URL:
http://aspinwall.in/corporate-governance.php).
15. EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of Section 92(3) of the Act, the extract of
the Annual Return is given as an Annexure in the prescribed Form MGT-9, which forms part
of this Report.
16. PARTICULARS OF EMPLOYEES
There are no employees drawing remuneration more than the prescribed
levels as mentioned under Section 197 of the Act read with Rule 5 (1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, and the subsequent
amendments thereto. The other information required under the said provisions are given
below: a) The ratio of the remuneration of each director to the median remuneration of the
employees of the Company for the financial year:
| Name of Directors |
Ratio to median remuneration |
| Non Executive/Independent Directors* |
|
| Mr. C.R.R. Varma* |
2.25 |
| Mr. Adithya Varma* |
0.97 |
| Mr. K.R.N. Menon* |
2.35 |
| Mr. M. Lakshminarayanan # |
1.80 |
| Vice Admiral Sushil Krishnan Nair (IN Retd.)* |
2.35 |
| Ms.Nina Nayar* |
2.66 |
| Whole-Time Directors |
|
| Mr. Rama Varma – Managing Director |
51.50 |
| Mr. Venkitraman Anand - Executive Director@ |
27.97 |
*The remuneration for Non-Executive/Independent Directors are the
Sitting Fees paid to them for attending the Board/Committee meetings held during the year.
The same, varies, based on their attendance at the meetings.
#Inducted to the Board of Directors w.e.f. May 01, 2018.
@Resigned from the Board of Directors w.e.f. August 31, 2018.
b) The percentage increase in remuneration of each Director, Chief
Financial Officer, Chief Executive Officer and Company Secretary in the financial year:
| Directors, Chief Financial Officer and
Company Secretary |
% increase in remuneration
in the financial year |
| Mr. C.R.R. Varma* |
96.97% |
| Mr. Adithya Varma** |
N.A. |
| Mr. K.R.N. Menon* |
54.55% |
| Vice Admiral Sushil Krishnan Nair (I. N. Retd.)* |
142.86% |
| Ms. Nina Nayar* |
75% |
| Mr. M. Lakshminarayanan # |
N. A. |
| Mr. Rama Varma (Managing Director) |
27.35% |
| Mr. Venkitraman Anand (Executive Director) $ |
(44.54%) |
| Mr. T.R.Radhakrishnan (Chief Financial Officer)& |
(4.92%) |
| Mr. Neeraj R Varma (Company Secretary)@ |
23.80% |
* The remuneration for Non-Executive/Independent Directors are the
Sitting Fees paid to them for attending the Board/Committee meetings held during the year.
The same, varies, based on their attendance. Also, the Sitting Fee for the
Non-Executive/Independent Directors was increased, during the FY 2018-19, with the
approval of shareholders, at the Annual General Meeting.
** Inducted as Additional Director w.e.f. August 17, 2017.
# Inducted as Additional Director during the FY 2018-19.
$ Resigned from the Board of Directors w.e.f. August 31, 2018.
& Decrease is due to the reduction in Variable Pay component.
@ The increase is due to the Variable Pay component as per the Policy
of the Company and due to the annual increments.
c) The percentage increase in the median remuneration of employees in
the financial year: -2.03%
d) The number of permanent employees on the rolls of the Company as on
March 31, 2019: 776.
e) Average percentile increase already made in the salaries of
employees other than the managerial personnel in the last financial year and its
comparison with the percentile increase in the managerial remuneration and justification
thereof and point out if there are any exceptional circumstances for increase in the
managerial remuneration:
The average annual increase made in the salaries of employees other
than managerial personnel was 13.28%.
Increase in the remuneration of managerial personnel for the year was
7.50% (the said variation is due to the Variable Pay component based on the Policy and the
change in the eligibility criteria of the said Policy).
f) The Company affirms that the remuneration is as per the remuneration
policy of the Company.
g) The top 10 employees of the Company in terms of the remuneration
drawn during the year 2018-19 are enclosed as Annexure to this Report.
17. DEPOSITS FROM PUBLIC
As reported last year, the Company has stopped accepting/renewing Fixed
Deposits and has repaid all the Fixed Deposits as on March 31, 2015. The unclaimed
interest amounts relating to the earlier Fixed Deposits are lying in the Interest Warrant
Bank Account of the Company and is being transferred to the Investors Education and
Protection Fund ("IEPF") as and when it is due to be transferred, pursuant to
the provisions of the Act.
18. FOREIGN EXCHANGE EARNINGS AND OUTGO
(a) Export activities, initiatives taken to increase export, etc.
Coffee and Coir are the major export oriented business of the Company.
Our representative based at Netherlands over the past several years has
been able to promote the activities of the Company across Europe. His efforts along with
the visits of senior executives from India have helped the Company to retain and improve
the customer base across Europe. During the year, the Companies Executives along
with our representative in Europe have participated/attended various exhibitions/trade
fairs.
(b) Total foreign exchange used and earned
During the year under review, the Companys foreign exchange
earnings amounted to Rs.13,249 lacs compared to Rs.12,623 lacs in the previous year. The
total outgo of foreign exchange amounted to Rs.72 lacs as against Rs.42 lacs in the
previous year.
19. BUY-BACK
The Company has not contemplated any buy-back of shares.
There has been no change in the share capital of the Company during the
FY 2018-19.
20. CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY
ABSORPTION
The particulars as prescribed under Section 134 (3) (m) of the Act,
read with the Companies (Accounts) Rules, 2014, are not applicable to your Company.
21. 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 Companys
operations in future.
22. ENTERPRISE RISK MANAGEMENT
The Board of Directors had also formulated a Risk Management Policy for
identification, assessment, monitoring, mitigation and reporting procedures of enterprise
risks. The Risks have been categorised under Strategic, Operational, Financial, Compliance
and Project headings.
23. MENTORSHIP AND SUCCESSION PLANNING POLICY
The Board of Directors has formulated a comprehensive policy for
establishing a structured approach to ensure an internal supply of competent employees who
can take up key positions when necessary. The roles, eligibility, time frame, integration
with other Human Resource functions and Succession Planning process for the senior
management has been spelt out in the Policy.
24. VIGIL MECHANISM/WHISTLE-BLOWER POLICY
Vigil Mechanism is created pursuant to the provisions of Section 177 of
the Act, which is an instrument, through which, genuine complaints regarding the Company
can be reported by both the Directors as well as Employees of the Company to an authority.
The Audit Committee has been identified for this purpose. The mode of operation of Vigil
Mechanism has been defined by the Audit Committee. Adequate safeguards against
victimisation of persons who use Vigil Mechanism to make a direct access to the Chairman
of the Audit Committee is provided.
ACKNOWLEDGEMENTS
Your Directors take this opportunity to thank our customers,
shareholders, suppliers, bankers, business partners/ associates, financial institutions
and Central and State Governments for their consistent support and encouragements to the
Company. We would also place on record our sincere appreciation to all employees of the
Company for their hard work and commitment.
The Directors appreciate and value the contributions made by every
employee of the Aspinwall family.
|
By The Order of the Board |
|
KRN MENON |
RAMA VARMA |
| Kochi, |
Chairman |
Managing Director |
| May 27, 2019. |
DIN 00877505 |
DIN 00031890 |
+91-9892691696
