Your Directors have pleasure in presenting the Twenty Sixth Annual Report of yourCompany together with the audited Financial Statements for the year ended 31stMarch 2019.
The attached Financial Statements for the year ended 31.03.2019 have been prepared inaccordance with Indian Accounting Standards ("Ind AS") consequent to theNotification of the Companies (Indian Accounting Standards) Rules 2015 issued by TheMinistry of Corporate Affairs.
| || ||र. in lakhs |
|Particulars ||Year ended 31.03.2019 ||Year ended 31.03.2018 |
|Net Sales ||38398.24 ||18330.91 |
|Other income ||59.41 ||76.83 |
|PBDIT ||4189.02 ||1235.76 |
|Depreciation ||(482.12) ||(292.06) |
|Interest ||(794.41) ||(691.81) |
|Profit Before Exceptional Items and Tax ||2912.49 ||251.89 |
|Exceptional Items ||- ||(827.12) |
|Profit after Exceptional Items and before Tax ||2912.49 ||(575.23) |
|Provision for tax (Incl. deferred tax) ||(1083.83) ||445.06 |
|Profit after tax ||1828.66 ||(130.17) |
|Earnings per share (EPS) ||22.53 ||(2.09) |
|Diluted (EPS) ||22.01 ||(2.02) |
The sales revenue for FY 2018-19 was र. 383.98 Crore higher by 109.64 percentover the previous year's sales revenue of र. 183.31 Crore in FY 2017-18. The PATattributable to shareholders for FY 2018-19 was र. 18.29 Crore as compared to theprevious year's net loss of र. 1.3 Crore.
Based on the Company's performance the Directors have recommended a dividend ofर. 2/- per equity share of Rupees 10/- each for the FY 2018-19.The payout by way ofdividend on equity shares including dividend distribution tax if approved by the membersfor FY 2018-19 would be र. 1.95 crore resulting in a cash out flow of 10.66 percentof the net profit of the Company.
Transfer to reserves
The closing balance of the retained earnings of the Company for FY 2018-19 after allappropriation and adjustments is र. 119.76 Crore.
During the year the company has allotted 516000 equity shares upon the conversion of516000 convertible warrants on preferential basis to promoter group each at a price ofर. 181/-(Including premium of र. 171/-). The paid up capital of the company hasincreased from र. 77937000 to र. 83097000 divided into 8309700 equityshares of र. 10/- each.
Material changes and commitments affecting the financial position of the companybetween the end of the financial year and the date of the report
There were no material changes and commitments affecting the financial position of theCompany between the end of the financial year and the date of this Report.
Subsidiaries Associates and Joint Ventures
Our Company has no subsidiaries associates or joint ventures.
Directors and Key Managerial Personnel
None of the directors of the company is disqualified under the provisions of theCompanies Act 2013 (Act') or under the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. All Independent Directors have submitted confirmations asprovided under section 149(7) of the Act.
Cessation or Change in Directors
Mr. D. Ranga Raju (DIN: 00066546) Chairman and Independent Non-Executive Director ofthe Company has resigned as Director during the year under review. Your directors place onrecord their deep appreciation of the immense contributions made by Mr. D.Ranga Raju formore than two decades for the growth of the Company.
On the recommendations of the Nomination and Remuneration Committee the Boardappointed Mrs. A.Lakshmi Sowjanya and Mr. G.S.VKrishna Rao as additional IndependentDirectors of the Company with effect from 14th August 2018 and 13th November2018 respectively.
Mr. Sudhakar Kudva is being proposed for re-appointment as Independent Director for asecond term.
On the recommendations of the Nomination and Remuneration Committee the Boardappointed Mr. Ketan Chamanlal Budh as Whole time Director and Mr. A. Arvind Kumar as ChiefExecutive Officer of the Company with effect from 14th May 2019.
Key Managerial Personnel ('KMP')
Mr. B. Murali resigned as Chief Financial Officer of the company during the year underreview. The Board on the recommendation of the NRC appointed Mr. B.Krishna Mohan Rao asChief Financial Officer of the Company with effect from 14th August 2018.
In terms of Section 203 of the Act the following are the KMPs of the Company:
Mr. S. Chandra Sekhar Managing Director
Mr. Ketan Chamanlal Budh Whole time Director (w.e.f 14th May 2019)
Mr. A. Arvind Kumar Chief Executive Officer (w.e.f 14th May 2019)
Mr. B. Krishna Mohan Rao Chief Financial Officer (w.e.f 14th August 2018)
Mrs. B.N.Suvarchala Company Secretary
Auditors and Auditors' Report Statutory Auditors
M/s. S. Singhvi & Co. Chartered Accountants were appointed as the statutoryauditors at the Annual General Meeting held on 27th September 2017 for a termof five (5) years from the conclusion of the 24th annual general meeting till theconclusion of 29th Annual General Meeting. The Auditors' report does notcontain any qualification reservation or adverse remark.
As per Section 148 of the Act read with the Companies (Cost Records and Audit) Rulesas amended from time to time the cost records are required to be audited. Based on therecommendation of the Audit Committee your Board has appointed M/s. Sagar &Associates Cost Accountants Hyderabad as cost auditors for the financial year 2019-20.Necessary resolution for ratification of their remuneration is being placed for members'approval.
Pursuant to Section 204 of the Act read with the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Company had appointed M/s. NareshTiwari & Associates Company Secretaries to undertake the secretarial audit of theCompany for the financial year 2018-19. The Secretarial Audit Report in Form MR-3 receivedfrom them is annexed herewith as Annexure I. The Secretarial Audit Report does notcontain any qualification reservation or adverse remark.
The Board of Directors approved the appointment of M/s. RPR & AssociatesPracticing company secretaries to undertake the Secretarial Audit of the Company for thefinancial year 2019-20.
The report on corporate governance for the year ended 31st March 2019pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is annexed hereto as Annexure II. The certificate from practicingChartered Accountant regarding the compliance of conditions of corporate governance isattached to the report on corporate governance.
Management Discussion and Analysis
Management discussion and analysis report highlighting the performance and prospectsof the Company's business is provided in a separate section
Directors' Responsibility Statement
Pursuant to the requirement under Section 134(5) of the Companies Act 2013 yourDirectors confirm as under:
I. In the preparation of the annual accounts the applicable accounting standards readwith requirements as set out under Schedule III to the Companies Act 2013 have beenfollowed and there are no material departures from the same.
II. The Directors have 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 your Company for the financial year ended 31stMarch 2019 and the Profit of the Company for the year under review.
III. The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother 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 thecompany and that such internal financial controls are adequate and operating effectively.
VI. The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Extract of the Annual Return
The extract of the Annual Return pursuant to Section 134(3) (a) and Section 92(3) ofthe Act read with Companies (Management and Administration) Rules 2014 in the prescribedform MGT-9 is annexed herewith as Annexure III.
Number of Meetings of the Board
During the year five meetings of the Board of Directors of the Company were convenedand held in accordance with the provisions of the Act. The date(s) of the Board Meetingattendance by the directors are given in the Corporate Governance Report forming anintegral part of this report.
Committees of the Board
In compliance with the provisions of Sections 135 177 178 of the Act the Boardconstituted Audit Committee Nomination and Remuneration Committee and Stakeholders'Relationship Committee. The details of composition of the Committees their meeting andattendance of the members are given in the Corporate Governance Report forming an integralpart of this report.
Corporate Social Responsibility (CSR)
During the year the provisions relating to CSR policy under section 135 read withSchedule VII of the Companies Act 2013 do not apply to the company. Hence the companyhas not contributed towards CSR Activity.
However Pursuant to section 135 of the Companies Act 2013 the Board has constitutedits CSR Committee at its meeting held on 14th May 2019. The Committee comprised of 3(three) Members out of which 1 (one) was Independent NonExecutive Director.
Nomination and Remuneration Policy
The Board has on the recommendation of Nomination and Remuneration Committee framed apolicy for selection and appointment of Directors Senior Management Personnel and theirremuneration. The Nomination and Remuneration Policy adopted by the Board is available onthe Company's website athttp://www.bhagirad.com/reports/policy/Nominationandremunerationpolicy.pdf
Evaluation of the Board
Pursuant to the provisions of the Act and Regulation 17 of SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Board had carried out an annualevaluation of the Directors individually and of the committees of the Board.
A structured questionnaire was prepared after taking into consideration inputs receivedfrom the Directors covering aspects of the Board's functioning such as adequacy of thecomposition of the Board and its committees execution and performance of specific dutiesobligations and governance.
A separate exercise was carried out to evaluate the performance of Individual Directorsincluding the Chairman of the Board. The performance of the Directors was evaluated onparameters such as level of engagement and contribution in safeguarding the interest ofthe Company etc.
The performance evaluation of all Directors including the Independent Directors wascarried out by the entire Board. Further the performance evaluation of the Chairman andthe Non Independent Directors was carried out by the Independent Directors.
Familiarization Programme for Directors
A handbook covering the roles functions duties and responsibilities and the detailsof the compliance requirements expected from the Directors under the Act and relevantRegulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015were given and explained to the new Directors.
The newly appointed Directors are given induction and orientation with respect toCompany's Vision Core purpose Core Values and business operations. In addition detailedpresentations are made by Senior Management Personnel on business environment performanceof the Company at every Board Meeting.
The above initiatives help the Directors to understand the Company its business andthe regulatory framework in which the Company operates and enable the Directors to fulfilltheir role/responsibility.
Particulars of loans guarantees and investments
The Company has not given any loans guarantees or securities in connection with loansor made any investments falling within the ambit of Section 186 of the Act.
Transactions with the Related Parties
None of the transactions with related parties falls under the scope of Section 188(1)of the Act. The information on transactions with related parties pursuant to Section134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules 2014 is givenin Annexure IV in Form No. AOC-2 and the same forms part of this report.
The Company has put in place adequate system of internal controls commensurate with itssize and the nature of its operations. The Company's internal control system covers thefollowing aspects:
Financial propriety of business transactions.
Safeguarding the assets of the Company.
Compliance with prevalent statues regulations management authorizationpolicies and procedures.
The Audit Committee of the Board periodically reviews audit plans observations andrecommendations of the internal and external auditors with reference to the significantrisk areas and adequacy of internal controls and keeps the Board of Directors informed ofits observations if any from time to time
During the year the risk assessment parameters were reviewed and modified. The auditcommittee reviewed the element of risks and the steps taken to mitigate the risks. In theopinion of the Board there are no major elements of risk which have the potential ofthreatening the existence of the Company.
Deposits from Public
The Company has not accepted any deposits from the public falling within the ambit ofSections 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules 2014during the year under review. There are no outstanding deposits as on 31stMarch 2019.
Particulars of Remuneration
The information required pursuant to Section 197(12) of the Act read with Rule 5 of TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexedhereto as Annexure V.
Conservation of Energy Technology absorption Foreign Exchange earnings & outgo
The particulars as required to be disclosed pursuant to Section 134(3)(m) of theCompanies Act 2013 read with Companies (Accounts) Rules 2014 are given to the extentapplicable in the Annexure forming part of this Report enclosed as Annexure - VI.
There are no significant material orders passed by the Regulators/Courts which wouldimpact the going concern status of the Company and its future operations.
Prevention of the Sexual Harassment of Women at workplace
The company has a policy on prohibition prevention and redressal of Sexual Harassmentof women at workplace and matters connected there with or incidental there to covering allthe aspects as contained under "The Sexual Harassment of women at workplace(Prohibition Prevention and Redressal) Act 2013".
During the financial year 2018-19 no complaint was received under the policy.
Research & Development
R&D continues to do a good job in process development. Over the years it hasadapted to changing and difficult times and has been contributing to the current needs ofthe Company by maximum utilization of its existing resources. It has endeavored togenerate revenues by way of development of new products and processes.
Health Safety and Environment protection
The Company is committed to excellence in safety health environment and qualitymanagement. It accords the highest priority to the health and safety of its employeescustomers and other stakeholders as well as to the protection of the environment. Themanagement of your Company is focussed on continuous improvement in these areas which arefundamental to the sustainable growth of the Company.
Awards and Recognition
During the year under review Your Company has received the award for Export Excellencein Medium Scale Units from Pesticides Manufacturers and Formulators Association of India.
During the year under review industrial relations remained cordial and stable. Thedirectors wish to place on record their sincere appreciation of the co-operation receivedfrom employees at all levels.
The Board of Directors takes this opportunity to place on record its appreciation forthe unstinted co-operation commitment and dedication of all the employees of the Companyand the support extended by the channel partners customers vendors business associatesbanks government authorities and all concerned without which it would not have beenpossible to achieve all round growth of the Company. The Directors are thankful to theshareholders for their continued patronage.
| ||For and on behalf of the Board of Directors |
|Place: Hyderabad ||K.S. Raju |
|Date: 14.05.2019 ||Chairman |
| ||(DIN :00008177) |