Page 20 - FBL AR 2019-20

Fermenta Biotech Limited
Annual Report 2019-20

Board of Directors Culture of excellence Governance commitment
At Fermenta, governance begins with the At Fermenta, we believe that an At Fermenta, we believe that an
Board of Directors. The Company invested overarching culture of excellence is organisation managed around a defined
in a Board comprising individuals of repute derived from components of excellence set of timeless values becomes enduring.
and standing; the members bring diverse across the organisation. The result of this These values need to be lived perpetually
competencies to the Board; the Board commitment is that no improvement so that the commitment to governance
meetings are well-attended and debated; initiative is considered too small as we represents a discipline that becomes
the Board provides the strategic direction believe that every good thing is connected visible to all. In a number of areas, we
to the management, coupled with periodic to another, which, in turn, strengthens have extended beyond the regulation-
reporting accountability. mindsets and competitiveness. mandated governance requirements of
the day.

Singular focus Never over-leverage Expand incrementally

At Fermenta, we are principally a chemicals At Fermenta, we believe that in a business At Fermenta, we address a global market
Company with a predominant exposure where only a handful of global companies that is annually growing in modest single-
to Vitamin D. A singular product focus possess specialised manufacturing digits. We believe that steady growth is
deepens excellence, attracts specialists, technology, there is always the temptation the safest response for various reasons:
enriches knowledge, strengthens research to mobilise large debt, invest in substantial consumes expenditure that can be largely
and enhances scale. In a world where an capacity and engage in aggressive pricing addressed through our accruals, does not
increasing number of customers seek to to carve out a disproportionately larger affect our brand and earnings potential
work with fewer vendors, we see a growing market share. This is a temptation that and does not stretch our managerial
importance for focused companies like we have avoided as we believe that large bandwidth with a premium on specialised
ours. The management intends to focus debt could influence our strategic thinking professionals. This marathon-like approach
on the existing business and expanding away from the values we have cherished (as opposed to a sprint) has paid us rich
into the nutritional portfolio – no – of remaining a focused quality- and dividends and we expect to sustain this
deviation or distraction - to generate a knowledge-driven player. approach.
superior long-term return over alternative
investment options. The management
took a call to exit businesses that did not
enjoy any synergy with the core business
(even as it retained its renting business
and the vacant land to generate an
attractive annuity income or complete
monetisation).

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