Your Directors have pleasure in presenting you the Twenty-Eight Annual Report togetherwith Audited Financial Statements for the year ended 31st March 2021.
FINANCIAL PERFORMANCE OF THE COMPANY
(Rs. In Lakhs)
|Particulars ||For the year ended 31/03/2021 ||For the year ended 31/03/2020 |
|Sales & Other Income ||63.34 ||39.04 |
|Profit/(Loss) before interest and Depreciation ||22.40 ||(6.28) |
|Less: Finance Cost ||1.43 ||3.14 |
|Less: Depreciation and Amortisation expenses ||0.58 ||0.69 |
|Profit before Exceptional items& Taxes ||20.39 ||(10.11) |
|Exceptional Items ||- ||- |
|Profit after Exceptional Items & Taxes ||20.39 ||(10.11) |
|Less: Tax expenses ||- ||- |
|Profit/ (Loss) aftertax ||20.39 ||(10.11) |
|Other Comprehensive Income / (Loss) ||8.83 ||(2.15) |
|Total Comprehensive lncome/(Loss) attributable to the owners of the company ||29.22 ||(12.26) |
|Less: Appropriations ||- ||- |
|Closing Balance (Including Other Comprehensive Income) for the year ||29.22 ||(12.26) |
RESULTS OF OPERATIONS AND STATE OF COMPANY AFFAIRS:
The Aqua Farm situated at Isakapalli which was given on lease during July2013 forseven years and the Lessee had offered a reasonable increase in the Lease Rent and thecompany could not accumulate adequate working capital required for the direct operationsand further due to the prevailing conditions due to the pandemic the Board had decided toextend the lease by another seven years with effect from 1st July2020.Operating in volatile and uncertain environment and having given the farm on longterm lease earned a gross income of Rs. 63.34 lakhs including Income Other Income andearned a Net Profit of Rs. 29.22 lakhs (Including income considered under OtherComprehensive lncome/(Profit)). The impact of COVID-19 leading to lockdowns from March2020 had hit the economy badly and the industry was recouping in the last quarter but thesecond wave had again disturbed the operations in thefirst quarter of 2021-22.
Though the pandemic has affected the day-to-day operations no material impact oncompany revenues and finances during the year 2020-21 due to the renewed lease agreementof farm.
DIVIDEND AND RESERVES:
In view of considerable accumulated losses though there is a profit during the currentyear no dividend is recommended for the financial year 2020-21 and no amounts weretransferred to reserves.
SUBSIDIARIES AND JOINT VENTURES
The company does not have any subsidiary and Joint Ventures.
PARTICULARS REGARDING ENERGY CONSERVATION etc.:
The information relating to conservation of energy technology absorption and foreignexchange earnings and outgo pursuant to Section 134(3) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts)Rules 2014is given in Annexure V to this Report.
CHANGES AMONG DIRECTORS AND KEY MANAGERIAL PERSONNEL
CHANGES IN BOARD &KMP
Re-appointment of Retiring Director:
Based on the recommendation of Nomination & Remuneration Committee and approval ofthe Board Smt. Bommidala Anitha (DIN:00112766) who retire by rotation pursuant toSection 152 (6) of the Companies Act 2013 read with the Articles of Association of theCompany at the forth coming Annual General Meeting and being eligible offers her selffor reappointment. During the year the shareholders has reappointed Smt. Bommidala Anithaas the Director of the company atthe27th AGM underretire by rotation.
Board evaluation of its own performance:
As per the provisions of Section 134 (3)(p) of the Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carriedout an annual performance evaluation of its own performance the performance of Committeesof the Board namely Audit Committee Risk Management Committee StakeholdersRelationship Committee and Nomination and Remuneration Committee and also the directorsindividually. The manner in which the evaluation was carried out and the process adoptedhas been mentioned in the Corporate Governance Report.
Policy for selection and appointment of Directors Senior Management and theirremuneration:
The Board on the recommendation of the Nomination & Remuneration Committee hasframed a policy for selection and appointment of Directors Senior Management and theirremuneration and also framed the criteria for determining experience qualificationspositive attributes and independence of directors.
Declaration Given by Independent Directors:
All the Independent Directors viz. Sri Tunuguntla Rama Krishna (DIN:02324865) and SriNellore Dolendra Prasad (DIN:01816366) have submitted declarations confirming that theycontinued to meet the criteria of independence as prescribed under Sectionl49 (6) of theCompanies Act 2013 under Rule 6 of Companies (Appointment and Qualification ofDirectors) Rules 2014 and stating that they have registered themselves in the data bankmaintained by the Indian Institute of Corporate Affairs and underRegulation25(8)ofSEBI(LODR) Regulations2015.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF COMPANIES ACT2013.
During the financial year 2020-2021 the Company has not given any guarantees / loan ormade any investments. However during the year the company has repaid amount Rs. 55.02lakhs against the Interest Free Unsecured Loan and received from CEO and due as on 31stMarch 2021 was Rs. 8.00 lakhs.
Board and Committee Meetings:
The Board met 4 times during the financial year 2020-2021 the details of which aregiven in the Corporate Governance Report.
Committees of the Board:
The details of all the Committees along with their composition terms of reference andmeetings held during the year are provided in the "Report on CorporateGovernance" forming part of this Annual Report.
PARTICULARS OF EMPLOYEES:
The ratio of remuneration of each Director to the median of employees' remuneration asper Section 197 (12) of the Companies Act 2013 and information relating to employees tobe disclosed under Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is disclosed in Annexure VII to the Board of Directors report.
AUDITORS AND AUDITOR'S REPORT
M/s. Kurapati Subba Rao & Co. Chartered Accountants (Firm Regn.No:001618S) wasappointed as Statutory Auditors of your Company at the Annual General Meeting held on 06hSeptember 2017 for a term of five consecutive years. As per the provisions ofSection 139 of the Companies Act 2013 the appointment of Auditors is required to beratified by Members at every Annual General Meeting. But in accordance with the CompaniesAmendment Act 2017 enforced on 7th May 2018 by the Ministry of Corporate Affairs theappointment of Statutory Auditors is not required to be ratified at every Annual GeneralMeeting. The Report given by the Auditors on the financial statements of the Company forms part of this Report. There are no qualifications reservations adverse remarks ordisclaimers given by the Auditors in their Report.
Fraud reported bythe AuditorunderSection 143(12): Nil
EXPLANATION FOR AUDITORS EMPHASIS OF MATTER:
Regarding the preparation of accounts on going concern basis the notes in Iindependent audit report is self-explanatory and the company had given the farm on longterm lease and getting steady income and been able to meet its operational and complianceexpenses though there are considerable carry forward losses.
|Maintenance of Cost Records ||- Not Applicable |
|Cost of Audit ||-Not Applicable |
Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhad appointed M/s K. Srinivasa Rao &Co Company Secretaries as the SecretarialAuditors to undertake the Secretarial Audit of the Company. The Secretarial Audit Reportis given in Annexure -111 to this Report.
There were no qualifications reservations adverse remarks or disclaimers in theirreport.
Board Clarification on Secretarial Auditor qualifications: NIL
The Company has put in place a mechanism to identify assess monitor and mitigatevarious risks to its key business objectives. Major risks identified by the business andfunctions are systematically addressed through mitigating actions on a continuing basis.The Company has formulated a Risk Management Policy which is also available on theCompany's website:www.bkvindustries.in
In addition to the Internal Controls on Operations the Board has laid down standardsprocesses and structures to implement internal financial controls to ensure that thefinancial affairs of the Company are carried out with due diligence. The effectiveness ofthe internal financial controls is ensured by management reviews continuous monitoringand self-assessment and review of all financial transactions and operating systems by theinternal auditors. During the year such controls were tested and no reportable materialweakness or inefficacy or inadequacy in the operation were observed.
CORPORATE SOCIAL RESPONSIBILITY(CSR) INITIATIVES:
Section 135 of the Companies Act 2013 provides the threshold limit for applicabilityof the CSR to a Company i.e.(a) net worth of the Company to be '500 crore or more; or (b)turn over of the company to be '1000 crore or more; or (c) net profit of the company tobe '5 crore or more. As the Company does not fall under any of the threshold limits givenabove the provisions of Section 135 are not applicable to the Company.
RELATED PARTY TRANSACTIONS:
All contracts/arrangements/ transactions entered into during the financial year withthe related parties were on arm's length basis and were in the ordinary course ofbusiness. Section 188 (1) of the Companies Act 2013 exempts related party transactionsthat are in the ordinary course of business and are on arm's length basis. The Board ofDirectors and the Audit Committee have also approved the said related party transactions.
There are no materially significant related party transactions with the promotersDirectors Key Managerial Personnel or other designated persons which may have a potentialconflict with the interest of the Company at large. The policy on dealing with RelatedParty Transactions as approved by the Board is available at the investors section of theCompany's website : www.bkvindustries.in
The particulars of contracts/arrangements entered into by the Company with relatedparties as required to be disclosed are given in AOC-2 as Annexure IV to this Report.
CORPORATE GOVERNANCE REPORT:
The Company is committed to good corporate governance practices. All materialinformation was circulated to the directors before their meeting or placed at theirmeeting including minimum information required to be made available to the Board asprescribed under Part A of Schedule II of Sub- Regulation 7 of Regulation 17 of theListing Regulations.
In terms of Regulation 34 of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 a report on CorporateGovernance along with a Certificate from a Practicing Company Secretary confirming thecompliance with the conditions of Corporate Governance as stipulated under Part E ofSchedule V of Sub- Regulation 34 (3) of the Listing Regulations is attached to thisreport.
MANAGEMENT DISCUSSION AND ANALYSIS:
The Management Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 of the SEBI (LODR) 2015 Regulations given in Corporate GovernanceReport which is the part of this Annual Report.
TRANSFER TO THE INVEST OR EDUCATION AND PROTECTION FUND:
The company has not declared any dividend till date from inception therefore there wereno funds which were required to be transferred to Investor Education and Protection Fund(I EPF).
EXTRACTOFTHE ANNUAL RETURN:
The details of the extract of the Annual Return in Form MGT-9 as per Section 92(3) ofthe Companies Act 2013 read with Rule 12 of the Company (Management and Administration)Rules. 2014 is annexed and given in Annexure - VI to this Report and also available at thewebsite of the Company : www.bkvindustries.in
Vigil Mechanism & Whistle Blower Policy The Company has a vigil mechanism and awhistle blower policy. The same has been posted on the Company'swebsite:www.bkvindustries.in and the details of the same are given in the CorporateGovernance Report.
As per the requirement of SEBI Listing Regulations the Company declares that itssecurities are listed on the Stock Exchanges of Mumbai & Kolkata. The company confirmsthat it has paid annual listing fees to the Stock Exchange of Mumbai & Kolkata for theYear 2020-2021.However in the case of Calcutta Stock Exchange the shares are listedunder "suspension" without any intimation to the Company though company hadsent all the resolutions for delisting it's shares in all stock exchanges except to MumbaiStock Exchange in 2007 & 2014. The company has been paying it's Listing Fees despiteclarification to be received from Calcutta Stock Exchange regarding it's operation. Thecompany is proposing to pursue the delisting of Calcutta Stock Exchange during the currentyear.
DIRECTOR'S RESPONSIBILITY STATEMENT:
Pursuant to the provisions contained in Section 134 (3) (c) of the Companies Act 2013your Directors to the best of their knowledge and belief and according to information andexplanations obtained from the management confirm that:
i) In the preparation of the annual accounts for the financial year ended March 312021 the applicable accounting standards have been followed and there are no materialdepartures 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 the Company as at March 312021 and of the cash flowsand Profit of the Company for the year ended on that date;
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 proper internal financial controls to be followed bythe Company relevant to its nature of operations and such controls are adequate andoperating effectively.
vi) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
Your directors state that no disclosure is required in respect of the following itemsas there were no transactions on these items during theyear under review:
1. Details relating to deposits covered under Chapter Vof the Companies Act 2013.
2. Issue of equity shares with differential rights as to dividend voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company underany scheme.
4. No orders were passed by the Regulators or Courts or Tribunals which impact thegoing concern status and the Company's operations in future.
Material Changes and commitments if any affecting the Financial position of thecompany which has occurred between the end of the Financial year of the company to whichthe Financial statements relate and the date of the report:
No Material Changes and commitments affecting the financial position of the companyoccurred between the end of the financial year and the date of the report.
UNSECURED LOANS RECEIVED FROM DIRECTORS DURING THE YEAR 2020-2021:
During the year the Company has received interest free unsecured loans from theDirectors and also adeclaration in writing stating that the amount given to the Company isnot borrowed by them.
|S.No Name of the Director ||Amount Received during the year (Net) |
|1 Bommidala Rama Krishna ||800000.00 |
The Company is in compliance with the Secretarial Standard on Meetings of the Board ofDirectors (SS-1) and Secretarial Standard on General Meetings (SS-2).
DISCLOSURES UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION PROHIBITIONAND REDRESSAL)ACT2013
The Company has in place a prevention of Sexual Harassment and Grievance HandlingPolicy in line with the requirements of The Sexual Harassment of Women at the workplace(Prevention Prohibition & Redressal) Act 2013.
Internal Complaints Committee (ICC) has been set up to redress complaints receivedregarding sexual harassment. All employees are covered under this policy. The Company didnot receive any complaints during the year.
CHANGES IN THE NATURE OFTHE BUSINESS:
There has been no change in the nature of the business of the Company during thefinancial year ended 31st March 2021.
PERSONAL RELATIONS AND APPRECIATION:
Your directors place on record their appreciation for the continued co- operationsupport and assistance extended to the Company by its Bankers Share holders andEmployees.
| ||By order of the Board of Directors |
| ||For BKV Industries Limited |
| ||BOMMIDALA RAMA KRISHNA |
|Place: Guntur ||Managing Director |
|Date: 29-06-2021 ||DIN:00105030 |