The Board of Directors hereby submits the report of the business and operations of yourCompany for the financial year ended March 312017.
The Company's financial performance for the year ended 31st March 2017 is summarizedbelow:
(Rs. In Lakhs)
|Particulars ||Year 2016-17 ||Year 2015-16 |
|Sales Turnover (Less: Excise) ||1300.65 ||156996 |
|Profitbefore Depreciation ||57.55 ||51.59 |
|Less: Depreciation ||30.41 ||26.36 |
|Profit before Tax (PBT) ||27.14 ||25.23 |
|Less: Provision forlta ||4.14 ||6.54 |
|Net Profit after Tax ||23.00 ||18.69 |
OVERVIEW OFCOMPANY'S PERFORMANCE FORTHE YEAR2016-2017:
Agrochemical Industry is facing challenging times currently due to drought year andtough market conditions. Crop yields have been impacted and farmer's net realization isalso affected badly. Still the sales turnover is Rs 1300.65 lac which is lower by 17.15%as compared to last year which was Rs 1569.96 lac and the PBT stands at Rs 27.14 lac whichis marginally higher by 7.57% as compared to last year which was Rs 25.23 lac.
To ward off the risk of monsoon and dropping agro-products prices the company has beenincreasing its focus on Public Health Business and Export. These two areas will help inwarding offtherisks associated with agricultural business. However this year hopefullywill end the back to back droughts faced in the years 20142015 and lowpestinfestationin2016. This being the main cause for lesser sales will come to an end soon.
The Subsidiary has made a wide range of diagnostic kits ranging from infectiousdiseases to oncology which are being accepted by big names customers in diagnosticmarket. In times to come this Subsidiary would become a market leader. Subsidiary(Molecular Diagnostic Business) sales grew by 60% and EBITDA grew from Rs 49.39 lac to Rs150.56 lac; NP grew from Rs 14.79 lac to Rs 90.20 lac. This trend is expected to continuethis year also.
No deposits have been accepted from public during the financial year2016-17 DIVIDEND:
Although the profit is less the directors still recommend a dividend of 3% (Re 0.30per folly paid up equity shares of Rs 10/- each) for the financial year ended 31 st March2017 just to reward shareholders patience. The dividend payout is subject to approvalofmembers at the ensuing Annual General Meeting.
INVESTMENT IN SUBSIDIARY
During the year the Company has acquired 427500 (Four lakh Twenty Seven ThousandFive Hundred) equity shares of Rs 10/- each amounting to Rs. 4275000.00/-(Rupees FortyTwo Lacs Seventy Five Thousand Only) in its subsidiary company 3B BLACKBIO BIOTECHINDIALIMITED.
Consequently the shareholding of the Company in M/s 3B BLACKBIO BIOTECH INDIA LIMITEDhas increased from 85.50% to 95.38%
TRANSFER TO RESERVES:
The balance of Profit and Loss Account alter adjusting income tax proposed dividendand tax on dividend is proposed to be transferred to Reserves and Surplus in BalanceSheet.
The Company has taken steps to consolidate the production for achieving the economiesof scale. However the Company has not taken up any major expansion during the year underreview.
CHANGES IN THE NATURE OFBUSINESS IF ANY:
There was no change in the nature ofbusiness of the Company during the financial yearended31stMarch2017. CURRENT LISTING:
Presently the Equity Shares of the company are listed on the Bombay Stock ExchangeLtd Mumbai.
In accordance with the provisions of the Companies Act 2013 Mr. Dhirendra DubeyDirector retiring by rotation and being eligible offered himself for re-appointment attheensuing Annual General Meeting.
In compliance with Section 149 read with schedule IV of the Act die appointment of Mr.Abdul Moin Khan as Independent Director for a term of five years is being placed beforethe Members in General Meeting for their approval. As per the previsions of Section 149 ofthe Act he will not be liable to retire by rotation. Members are requested to refer toItem No. 7 of the Notice of the Annual General Meeting (AGM) and the Explanatory Statementfor details of their qualifications and experience.
Independent Director has given declaration that he meets the criteria of independenceas prescribed under the provisions of the Companies Act 2013.
MANAGEMENTDISCUSSIONAND ANALYSIS REPORT:
Management Discussion and Analysis forms an integral part of this report and givesdetails of the overall industry structure economic developments performance and state ofaffairs of your company risk management systems and other material developments duringthe Financial Year 2016-17.
Management Discussion and Analysis Report for the year 2016-17 as stipulated under SEBIListing Regulations is presented in a separate section forming part of Annual Report.
Your Company continues to be committed to good Corporate Governance aligned with goodpractices. A separate report on Corporate Governance along with Auditors' Certificate oncompliance with the Corporate Governance forms an integral part of this Annual Report.
INTERNAL FINANCIAL CONTROLS:
The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested andno reportable materialweakness in the design or operation was observed.
Risk management comprises all the organizational rules and actions for earlyidentification of risks in die course of doing business and the management of such risks.
This robust Risk Management framework seeks to create transparency minimise adverseimpact on business objectives and enhance the Company's competitive advantage.
The Internal Audit Department is responsible for facilitating coordination with theheads of various Departments with respect to the process of identifying key risksassociated with the business manner of handling risks adequacy of mitigating factors andrecommending corrective action. There are no risks which in the opinion of the Boardthreaten the existence of your Company.
The Company has adopted a Risk Management Policy pursuant to Section 134 of fileCompanies Act 2013.
WHISTLE BLOWERPOLICY/VIGIL MECHANISM
The Company has a VigilMechanism/Whistle Blower Policy under which the employees arefree to report violations of applicable laws andregulations and the code of conduct Thedetails pertaining to Whistle Blower Policy are included in file Corporate GovernanceReport which forms part of this report.
PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES ASSOCIATES AND JOINTVENTURE COMPANIES
The consolidated financial statements of file Company and its subsidiaries prepared inaccordance with applicable accounting standards issued by the Institute of CharteredAccountants of India forms part of the Annual Report.
The statement pursuant to the provisions to Section 129(3) of the Companies Act 2013containing salient features of file financial statement ofthe Company's Subsidiary inFarmAOCl is given inAnnexure - m.
ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITS COMMITTEES AND OFDIRECTORS:
In terms of applicable provisions of the Companies Act 2013 read with Rules framedthere under and provisions of Listing Regulations and on the recommendation of Nominationand Remuneration Committee the Board of Directors has put in place a process to formallyevaluate the effectiveness of the Board its Committees along with performance evaluationof each Director carried out on an annual basis. Accordingly the annual performance offile Board its committees and each Director was carried out for the Financial Year2016-17.
Criteria for evaluation of individual Directors include aspects such as professionalqualifications prior experience especially experience relevant to the Company knowledgeand competency fulfilment of functions ability to function as a team initiativeavailability and attendance commitment contribution integrify independence andguidance/ support to management outside Board/ Committee Meetings. In addition theChairman is also evaluated on key aspects of his role including effectiveness ofleadership and ability to steer meetings impartiality ability to keep shareholders1interests in mind and effectiveness as Chairman.
Criteria for evaluation of the Committees of the Board include mandate and composition;effectiveness of the Committee; structure of the Committee; regularity and frequency ofmeetings agenda discussion and dissent recording of minutes and dissemination ofinformation; independence ofthe Committee from the Board; contribution to decisions of theBoard; effectiveness of meetings and quality of relationship of the Committee with theBoard and management
EMPLOYEE STOCK OPTION SCHEME:
At present the Company is not having any Employee Stock Option Scheme.
M/S R.C. Baheti & Co. Chartered Accountants Firm Registration No. 403034C havebeen the Auditors of the Company since very long.
As per the third provision to Section 139(2) of the Companies Act2013(the Act1) a transition period of three years from the commencement of the Act is provided to everyCompany existing on or before the commencement of the Act to comply with the requirementsof appointment of anew Auditor inplace of the existing Auditors.
In view of above M/S R.C. Baheti & Co. Chartered Accountants term as auditors isup to the conclusion of the forthcoming Annual General Meeting (AGM1).Thereforehi accordance with the provisions of Section 13 9 of the Act M/s Baheti & CompanyChartered Accountants (Firm Registration No. 006287C) are proposed to be appointed as theAuditors oftheCompanyforaperiodofS years commencing from the conclusion ofthis AGM tillthe conclusion of the 50th AGM of the Company to be held in 2022 subject to ratificationof their appointment at every AGM if so required under the Act.
M/s Baheti & Company have consented to their appointment as Statutory Auditors andhave confirmed that if appointed their appointment will be in accordance with Section 139read with Section 141 of the Act. Members are requested to approve its appointment andauthorize the Board of Directors to fix their remuneration.
The Report given by the Auditors on the financial statements of the Company is part ofthe Annual Report. The Auditor's Report for the financial year ended 31 st March 2017 docsnot contain any qualification reservation or adverse remark.
The Board has appointed Mr. P.K. Rai & Associates Practicing Company Secretary toconduct Secretarial Audit for the financial year 2016-17.The Secretarial Audit Report forthe financial year ended March 312017 is annexed herewith marked as Annexure IV to thisreport. The Secretarial Audit Report does not contain any qualification reservation oradverse remark.
INVESTOR EDUCATION AND PROTECTION FUND:
During the year die Company was not required to transfer any amount to the InvestorEducation and Protection Fund. DETAILS OF UNCLAIMED DIVIDEND ON WEBSITE
Pursuant to provisions of Investor Education and Protection Fund (Uploading ofInformation regarding unpaid and unclaimed amounts lying with Companies) Rules 2012 theCompany has uploaded details of unpaid and unclaimed amounts lying as on 30.09.2016 (dateof last Annual General Meeting) on website of the Company as also with Ministry ofCorporate Affairs.
DUE DATE FORTRANSFER OF SHARES TO IEPF AUTHORITY
Pursuant to provisions of section 124 (6) of Companies Act 2013 all shares in respectof which dividend has not been paid or claimed for seven consecutive years or more shallbe transferred by the company in the name of INVESTOR EDUCATION AND PROTECTION FUND.Therefore in context to same and with reference to IEPF General Circular No 06/2017 dt.29-05-2017 the due date for transfer of shares to IEPF authority stands extended and ourcompany is waiting for new guidelines and the fresh dates for the transfer of such sharesto IEPF Authority.
HUMAN RESOURCE MANAGEMENT:
Out Employees are most valuable assets of the Company. We encourage innovationmeritocracy and the pursuit of excellence. We have setup a scalable recruitment and humanresources managementprocess which enables us to attract and retain employees. Cordialemployee relations were maintained throughout the year in the Company. The directorsexpress their appreciation for the contributianmade by employees to operations oftheCompany during the year. DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS KEY MANAGERIALPERSONNEL AND PARTICULAR OFEMPLOYEES:
Number of Employees as on March 312017 was 54.
The remuneration paid to the Directors is in accordance with the Nomination andRemuneration Policy formulated in accordance with Section 178 ofthe Companies Act 2013and Regulation 19 ofthe Listing Regulations (Including any statutory modification(s)orre-enactment(s) for the time being in force).
The information required pursuant to Section 197 read with role 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of theDirectors/employees ofthe Company is set out in Annexure-VI to this report.
The details pertaining to composition of audit committee are included in the CorporateGovernance Report which forms part of this report.
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee comprises directors namely Mr. ShabbarHusain Mr. N.K. Dubey and Mr.DJLDubey.
The Company's Policy relating to appointment of Directors payment of ManagerialRemuneration Directors' qualifications positive attributes independence of Directorsand other related matters as provided under Section 178(3) ofthe CompaniesAct 2013 isfurnished asAnnexure II and formspartofthis Report.
MEETINGS OFTHE BOARD
Ten meetings ofthe Board of Directors were held during the year. For further detailsplease refer to report on Corporate Governance of this Annual Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
A statement giving details of Conservation of Energy Technology Absorption ForeignExchange Earnings and Outgo as stipulated under Section 134 ofthe Companies Act 2013read with the Companies (Accounts) Rules 2014 is set out herewith as Annexure V to thisReport.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract ofthe Annual Return as on 31 st March 2017 inform MGT-9 in accordance with Section 92(3) of foe CompaniesAct 2013 read with Companies(Management and Administration) Rules 2014 are set out herewith as Annexure I to thisReport.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
Details of Loam Guarantees and Investments covered under the Provisions of Section 186ofthe Companies Act 2013 are given in foe accompanying Financial Statements.
The assets of Company are adequately insured against loss of fire riot earthquakeflood etc. and other risks which are considerednecessaiyby the Management.
MATERIAL CHANGES & COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANYOCCURRING AFTER BALANCE SHEET.
No material changes and commitments affecting the financial position of the companyoccurred between the ends of this financial year to which these financial statementrelateon the date of this report.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
1. Details relating to CSR. Committee.
2. No significant or material orders were passed by the Regulators or Courts ofTribunals which impact the going concern status and Company's operations in future.
3. No company/companies have become/ceased to be subsidiaries JVs or Associatecompanies during the year.
4. Details relating to issue of Equity Shares with Differential RightsSweatEquityESOSetc.
5. Details relating to disclosure in respect of voting rights not exercised directly bythe employees in respect of shares to which the scheme relates.
6. Disclosure about receipt of any commission by MD/WTD from a company and alsoreceiving commission/ remuneration from its Holding or subsidiary.
7. Particulars of contracts or arrangements with relatedparties referred to insubsection (1) of section 188
8. Details regarding cost audit
9. Your Directors further state that during the year under review there was no casesfiled pursuant to the Sexual Harassment ofWomen at Workplace (Prevention Prohibition andRedressal) Act 2013.
DIRECTORS' RESPONSIBILITY STATEMENT:
The Statement of the Directors' Responsibility on Annual Accounts of the Companyreferred to in clause (c) of subsection (3) of Section 134 of the Companies Act 2013shall state that-
1. That in preparation of annual accounts the applicable accounting standards had beenfollowed along with proper explanation relating to material departures;
2. That directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company a the end of the financial year and ofprofits and loss of the Company for that period;
3. That the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingassets of file Company and for preventing and detecting fraud and other irregularities;
4. That the directors had prepared Annual Accounts on a going concern basis; and
5. The directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and
6. the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that Buch systems are adequate and operating effectively.
Your Directors wish to express their grateful appreciation for the cooperation andcontinued support received from Bankers Financial Institutions Government agenciesShareholders Vendors Customers and Society at large. Your directors also take on recordtheir appreciation for contribution and hard work of Executives Employees and Workers.