Your Directors have pleasure in presenting you the Twenty Seventh Annual Reporttogether with Audited Financial Statements for the year ended 31 March 2020.
FINANCIAL PERFORMANCE OF THE COMPANY
(Rs. In Lakhs)
|Particulars ||For the year ended 31/03/2020 ||For the year ended 31/03/2019 |
|Sales & Other Income ||39.04 ||33.42 |
|Pro t/(Loss) before interest and Depreciation ||(6.28) ||(21.72) |
|Less: Finance Cost ||3.14 ||0.39 |
|Less: Depreciation and Amortisation expenses ||0.69 ||0.85 |
|Pro t before Exceptional items& Taxes ||(10.11) ||(22.96) |
|Exceptional Items ||- ||- |
|Pro t after Exceptional Items & Taxes ||(10.11) ||(22.96) |
|Less: Tax expenses ||- ||- |
|Pro t / (Loss) after tax ||(10.11) ||(22.96) |
|Other Comprehensive Income / (Loss) ||(2.15) ||(0.63) |
|Total Comprehensive Income/(Loss) attributable to the owners of the company ||(12.26) ||(23.59) |
|Less: Appropriations ||- ||- |
|Closing Balance (Including Other Comprehensive Income) for the year ||(12.26) ||(23.59) |
RESULTS OF OPERATIONS AND STATE OF COMPANY AFFAIRS:
The Aqua Farm situated at Isakapalli was given on lease during July 2013 for sevenyears. Operating in volatile and uncertain environment at that time the company had giventhe farm on long term lease earned a gross income of Rs. 39.04 lakhs including IncomeOther Income and incurred a Net Loss of Rs. 12.26 lakhs (Including income considered underOther Comprehensive Income/(Loss)). The impact of COVID-19 leading to lock down at the endof March 2020 had hit the economy badly and the industry is still to re-coup to normalcy.Also due to the slowdown in the economy for the last two years and Lessee had offered aincrease in the Lease Rent and the company was not be able to accumulate adequate workingcapital for it's operations. Hence due to the prevailing conditions the Company will notbe in a position to carry on its operations therefore the Board had considered anddecided to extended the Lease period of aqua farm by a further lease term of seven years.
DIVIDEND AND RESERVES:
In view of considerable accumulated losses and current year loss no dividend isrecommended for the financial year 2019-20 .
SUBSIDIARIES AND JOINT VENTURES
The company does not have any subsidiary.
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 2014 is 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 Anita (DIN:00112766) who retire by rotation pursuant to Section152(6) of the Companies Act 2013 read with the Articles of Association of the Company atthe forth coming Annual General Meeting and being eligible offers herself forre-appointment.
During the year Mr. Bommidala Rama Krishna has been reappointed as a Managing Directorfor a period of 5 years w.e.f. 10.03.2019 to 09.03.2024.
Board evaluation of its own performance:
As per the provisions of Section 134(3)(p) of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Board has carried out anannual performance evaluation of its own performance the performance of Committees of theBoard namely Audit Committee Risk Management Committee Stakeholders RelationshipCommittee and Nomination and Remuneration Committee and also the directors individually.The manner in which the evaluation was carried out and the process adopted has beenmentioned 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 e x p e r i e n c e q u a l if i c a t i o n s p o s i t i v e a t t r i b u t e s a n d independence of directors.
Declaration Given by Independent Directors:
All the Independent Directors viz. Sri Tunuguntla Rama Krishna ( D I N : 0 2 3 2 4 8 65 ) a n d S r i N e l l o r e D o l e n d r a P r a s a d (DIN:01816366) have submitteddeclarations confirming that they continued to meet the criteria of independence asprescribed under Section 149(6) of the Companies Act 2013 under Rule 6 of Companies(Appointment and Qualification of Directors) Rules 2014 and stating that they haveregistered themselves in the data bank maintained by the Indian Institute of CorporateAffairs and under Regulation 25(8) of SEBI (LODR) Regulations 2015.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF COMPANIES ACT2013.
During the financial year 2019-2020 the Company has not given any guarantees/loan ormade any investments. However during the year the company has not repaid any amountagainst the Interest Free Unsecured Loan received from CEO and due as on 31st March 2020was Rs. 41.50 lakhs including the amount of Rs. 13.55 Lakhs received during the year.
Board and Committee Meetings:
The Board met 4 times during the financial year 2019-2020 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 to bedisclosed under Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is given 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 06thSeptember 2017 for a term of ve consecutive years. As per the provisions of Section 139of the Companies Act 2013 the appointment of Auditors is required to be ratified byMembers at every Annual General Meeting. But in accordance with the Companies AmendmentAct 2017 enforced on 7th May 2018 by the Ministry of Corporate Affairs the appointmentof Statutory Auditors is not required to be ratified at every Annual General Meeting. TheReport given by the Auditors on the financial statements of the Company forms part of thisReport.
There are no quali cations reservations adverse remarks or disclaimers given by theAuditors in their Report.
Fraud reported by the Auditor under Section 143(12): Nil
EXPLANATION FOR AUDITORS EMPHASIS OF MATTER:
Regarding the preparation of accounts on going concern basis the notes in Independentaudit report is self-explanatory and the company had given the farm on long term lease andgetting steady income and been able to meet its operational and compliance expenses.
|Maintenance of Cost Records ||- Not Applicable |
|Cost of Audit ||- Not Applicable |
Pursuant to the provisions of Section 204 of the Companies Act 2 0 1 3 r e a d w i t ht h e C o m p a n i e s ( A p p o i n t m e n t a n d Remuneration of ManagerialPersonnel) Rules 2014 the Company had appointed M/s K. Srinivasa Rao & Co CompanySecretaries as the Secretarial Auditors to undertake the Secretarial Audit of theCompany. The Secretarial Audit Report is given in Annexure-III to this Report.
There were no quali cations reservations adverse remarks or disclaimers in theirreport.
Board Clari cation on Secretarial Auditor quali cations: 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
INTERNAL FINANCIAL CONTROLS:
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 inef cacy 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) turnover of the company to be '1000 crore or more; or
(c) net profit of the company to be '5 crore or more. As the Company does not fallunder any of the threshold limits given above the provisions of Section 135 are notapplicable to the Company.
RELATED PARTY TRANSACTIONS:
All contracts/arrangements/transactions entered into during the financial year with therelated parties were on arm's length basis and were in the ordinary course of business.Section 188(1) of the Companies Act 2013 exempts related party transactions that are inthe ordinary course of business and are on arm's length basis. The Board of Directors andthe 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 the ListingRegulations.
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 this report.
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.
T R A N S F E R T O T H E I N V E S T O R E D U C A T I O N A N D 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(IEPF).
EXTRACT OF THE 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 a whistle blower policy. The same has been postedon the Company's website: www.bkvindustries.in and the details of the same are given inthe Corporate Governance 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 con rmsthat it has paid annual listing fees to the Stock Exchange of Mumbai & Kolkata for theYear 2019-2020. However in the case of Kolkata Stock Exchange the shares are listedunder "suspension" without any intimation to the Company though companyhad sent all the resolutions for delisting it's shares in all stock exchanges except inMumbai in 2007 & 2014. The company has been paying it's Listing Fees despiteclarification to be received from Calcutta Stock Exchange regarding it's operation.
DIRECTOR'S RESPONSIBILITY STATEMENT:
Pursuant to the provisions contained in Section 134(3) of the Companies Act 2013 yourDirectors to the best of their knowledge and belief and according to information andexplanations obtained from the management con rm that:
i) In the preparation of the annual accounts for the financial year ended March 312020 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 31 2020 and of the cashflows and loss 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 the year under review:
1. Details relating to deposits covered under Chapter V of 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 2019-2020:
During the year the Company has received interest free unsecured loans from theDirectors and also a declaration in writing stating that the amount given to the Companyis not borrowed by them.
|Name of the Director ||Amount Received during the year (Net) |
|1 Bommidala Rama Krishna ||1355000.00 |
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 WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
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 work place(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 OF THE BUSINESS:
There has been no change in the nature of the business of the Company during thefinancial year ended 31st March 2020.
PERSONAL RELATIONS AND APPRECIATION:
Your directors place on record their appreciation for the continued cooperationsupport and assistance extended to the Company by its Bankers Shareholders and Employees.