Your Directors have pleasure to present the 30th Annual Report of theCompany together with the Audited Accounts for the financial year ended 31stMarch 2019 along with Auditors' Report thereon.
1. Financial Results :
The Financial Results for the year ended 31st March 2019 are summarised as under:
| || ||(Rs. in lacs) |
|Particulars ||Current Year 2018-19 ||Previous Year 2017-18 |
|Sales ||6944.27 ||6966.48 |
|Less: GST ||1033.43 ||1056.87 |
|Net Sales: ||5910.84 ||5909.61 |
|Other Operating Income ||98.36 ||154.62 |
|Total Income From Operations (Net) ||6009.20 ||6064.23 |
|Profit Before finance cost Depreciation & Amortisation ||340.80 ||370.05 |
|Finance Cost ||209.92 ||213.28 |
|Profit Before Depreciation & Amortisation ||130.88 ||156.77 |
|Depreciation & Amortisation ||40.47 ||35.93 |
|Profit/(Loss) Before Tax ||90.41 ||120.84 |
|Provision for Taxation :- || || |
|Current Tax ||21.06 ||41.7 |
|Deffered tax ||3.32 ||12.68 |
|Net Profit /(Loss) for the Period ||72.66 ||91.82 |
|EPS(Basic)Rs. ||1.69 ||2.14 |
2. Indian Accounting Standards:
The Company has followed Indian Accounting Standards and accounting principlesgenerally accepted in India in preparation of financial statements for the financial year2018-19.
Your Company has registered a turnover of Rs. 6009.20 lakhs during the year 2018-19 asagainst the turnover of Rs. 6064.23 lakhs during the previous year. The Company could makeprofit Rs. 90.41 lakhs during the financial year 2018-19 before taxes as against Rs.120.84lakhs during the previous year. After providing for taxes the Company could make netprofit of Rs. 72.66 lakhs during the financial year 2018-19 as against net profit of Rs.91.82 lakhs during the financial year 2017-18. The profitability of the Company is reducedmarginally when compared to previous year in the light of decreased turnovers andshortfalls of rains in many places in the Country which resulted in cut down of the pricesof the products in the market.
During the year 2018-19 the turnover decreased by 0.91 % as compared to the turnoverof 2017-18. The ratio of manufacturing expenses to the Sales during the year 2018-19 is85.04% as against 98.25% during 201718. The ratio of Administrative Selling and otherexpenses to the total expenditure is 7.73% during the year 2018-19 as against 10.03%during 2017-18.
4. Review of Operations:
a. Brief about Activities and Operations of the Company:
Your Company is mainly into the business of manufacturing & marketing of Pesticidesfor agriculture sector and presently carrying on the business in two segments i.e.Pesticides Formulations and Real Estate Activities.
The main focus is on the Pesticides Business and the following manufacturing facilitiesfor various pesticides formulations are available at the Factory:
i. Liquid & SC Formulations
ii. Weedcide Formulations
iii. Wettable & Powder Formulations
iv. Granule Formulations
Presently the Company has Production Capacity of 9000000 Ltrs/Kgs per annum tomanufacture various pesticides formulations and has established its marketing network inthe states of Telangana Andhra Pradesh Maharashtra and Karnataka. The products aremarketed with its own brands through dealers & distributors network. The Company iscontinuing Real Estate activity in a small way in Bengaluru for the last few years.
b. Performance of the Company :
The Company has achieved a turnover of Rs. 6009.20 lakhs during the year 2018-19 asagainst turnover of Rs. 6064.23 lakhs during the previous year. Though Company has takensteps such as establishing new sales divisions and continuous introduction of new productsin accordance with current needs of the market could not achieve the projected sales dueto shortfall of rains in many states of the country.
c. Prospects for the Financial Year 2019-20 :
The Company estimates a turnover of Rs. 81.50 crores during the current year 2019-20.Since the Primary business of the Company is Agri related monsoon conditions play majorrole in achieving the estimated turnovers. The Company is hopeful of improving turnoverswith the established marketing network. As on date the Company's deployment of funds inReal estate is Rs.96.79 lakhs and hopes to encash the opportunities available in the realestate field at Bengaluru with good margins during the financial year 2019-20.
In order to conserve its financial resources to meet its growth plan your Board couldnot recommend any dividend for the year under review.
6. Change in the nature of Business :
During the year under review there has been no change in the nature of business of theCompany.
7. Details of Subsidiary / Joint Ventures / Associate Companies :
The Company does not have any Subsidiaries or Joint Ventures or Associate Companies.
Cash and cash equivalents as at 31st March 2019 was Rs.18.75 lakhs. The Companycontinues to focus on judicious management of its working capital receivablesinventories and other working capital parameters and they were kept under strict checkthrough continuous monitoring at all levels.
9. Material changes and Commitments affecting the Financial Position of the Company :
There were no material changes and commitments affecting the financial position of theCompany from the year ended 31st March 2018 to till the date of this report.
10. Details of Significant and Material Orders passed by the Regulators / Courts /Tribunals impacting the going concern status and the Company's operations in future:
There are no significant and material orders passed by the Regulators or Courts orTribunals which would impact the going concern status growth and operations of theCompany in future.
11. Share Capital:
The authorised share capital of the Company is Rs.135000000 divided into13500000 equity shares of Rs.10/- each. The paid up share capital is Rs. 43002000divided into 4300200 equity shares of Rs.10/- each. There were no other changes thathave been made in the share capital of the Company during the year under review. Detailsof Share Capital are mentioned at Notes-9 of the Financial Statements.
The Reserves in Profit & Loss account as per last Balance Sheet is Rs.45163702.93 and the Company transferred the profits of Rs.6059690.25 for thefinancial year 2018-19 to Reserves & Surplus account. The balance in reserves andsurplus available at the end of the year 2018-19 is Rs. 51223393.25. Further detailsof Reserves & Surplus are mentioned at Notes-10 of the Financial Statements.
13. Details in respect of adequacy of internal financial controls with reference to thefinancial statements :
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the Internal Statutory andSecretarial Auditors including audit of internal financial controls over financialreporting by the Statutory Auditors and the reviews performed by management and therelevant Board Committees including the Audit Committee the Board is of the opinion thatthe Company's internal financial controls are adequate and effective during the periodended on 31st March 2019.
14. Corporate Social Responsibility (CSR) :
The compliance of the Provisions of CSR criteria mentioned in the provisions ofCompanies Act 2013 are not applicable for the Company as on date.
15. Deposits :
The Company has not accepted any fixed deposits from the public during the year.
16. Particulars of Loans Guarantees or Investments under Section 186 of the CompaniesAct 2013:
The Company has not granted any Loans given Guarantees or made any Investments in anyother Companies during the year under Section 186 of the Companies Act 2013.
17. Extract of Annual Return :
The extract of Annual Return of the Company is given in Annexure - I in the prescribedForm MGT-9 which forms part of this Report as required under Section 92(3) of theCompanies Act 2013.
18. Secretarial Auditors and Secretarial Audit Report :
Pursuant to provisions of Section 204 of the Companies Act 2013 the Company hasappointed M/s Puttaparthi Jagannatham & Co. Company Secretaries to undertake theSecretarial Audit of the Company. The Secretarial Audit Report is annexed as Annexure-II.
The Secretarial Audit Report does not contain any qualification reservation or adverseremarks.
19. Particulars of Contracts or Arrangements with Related Parities under Section 188 ofthe Companies Act 2013 :
All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis. During the year the Company has taken an Unsecured Loan amount of Rs.30715469.00 (Rupees Three Crores Seven Lakhs Fifteen Thousands Four Hundred and SixtyNine Only) from Mr Y.Nayudamma (DIN:00377721) Managing Director and Rs. 7692340.00(Rupees Seventy Six Lakhs Ninety Two Thousands Three Hundred and Forty Only) from MrY.Janaki Ramaiah (DIN:06949910) Executive Director of the Company on an arm's lengthbasis. Disclosures as required under form AOC-2 are annexed as Annexure - III and alsocontained in Notes-16 to Financial Statements and the Company has not entered into anyother related party transactions. The Loans provided by the Directors with their ownresources.
20. Disclosures under Sexual Harassment of Women at workplace (Prevention Prohibitionand Redressal) Act 2013 :
Our Company has complied with provisions relating to the constitution of InternalComplaints Committee under the Sexual Harassment of women at workplace (PreventionProhibition and Redressal) Act 2013. There are no cases filed / complaints lodged in theCompany during the year under review in respect of the Sexual Harassment of Women atworkplace.
21. Directors and Key Managerial Personnel:
Pursuant to provisions of Section 149 and other applicable provisions of the CompaniesAct 2013 read with Rules thereon the following Directors were appointed as IndependentDirectors of the Company at the Annual General Meeting held on 25-09-2017 for a period ofthree years effective from the meeting date.
|Mr.T.A. Choudary - ||DIN: 00036470 |
|ii. Mr.N. Sudhakar - ||DIN: 00426897 |
|iii. Mr.M. Balarama Krishnaiah - ||DIN: 00036506 |
|iv. Mrs. S. Kavitha Rani - ||DIN: 06942657 |
|v. Dr. G.S.R. Anjaneyulu - ||DIN:01874325 |
In accordance with the provisions of Section152 of the Companies Act 2013 Dr.Yadlapalli Venkatswarlu (DIN:00377568) will retire by rotation at this Annual GeneralMeeting and being eligible has offered himself for re-appointment. The IndependentDirector Mr.M.Balarama Krishnaiah (DIN:00036506) has tendered the resignation for the postof Independent Director on 20-07-2019. Mr. M. Sreerama Murthy (DIN: 01932910) has beenappointed as Additional Director of the Company till the conclusion of ensuing AnnualGeneral Meeting and his candidature is recommended for appointment as non executiveIndependent Director of the Company subject to the approval of the shareholders. The termof Mr.Y.Nayudamma (DIN: 00377721) as Managing Director has expired on 31-122018 andoffered himself for re-appointment. The term of Mr.Y.Janaki Ramaiah (DIN: 06949910) asExecutive Director expires by 29-09-2019 and he has offered himself for re-appointment.During the year the NonExecutive and Independent Directors of the Company had nopecuniary relationship or transactions with the Company.
Pursuant to the provisions of Section 203 of the Companies Act 2013 Mr.PavansinghThakur (ACS No.A56920) an Associate Member of the Institute of Company Secretaries ofIndia was appointed as Company Secretary of the Company during the year.
22. Declaration by the Independent Directors of the Company that they meet the criteriaof independence as provided in Sec 149(6) of the Companies Act 2013 :
All the independent Directors have given declarations that they meet the requisitecriteria of independence as provided in sub-section (6) of Section 149 of the CompaniesAct 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
23. Formal evaluation statement by the Board of its own performance it's committeesand individual Directors :
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has formulated a policy forevaluation of its Board Board Committees Directors and their performances and carriedout evaluation of them. The manner in which the evaluation was carried out has beenexplained in the Corporate Governance Report.
24. Number of Meetings of the Board :
Six meetings of the Board were held during the year. The details of the meetings of theBoard are given in the Corporate Governance Report.
25. Audit Committee :
Four meetings of the Audit Committee were held during the year. The details pertainingto composition of Audit Committee are included in the Corporate Governance Report.
26. Risk Management Policy:
The Company has formulated effective risk management policy and through a SteeringCommittee oversees the Risk Management process including risk identification impactassessment effective implementation of the mitigation plans and risk reporting. The majorrisks identified in the Company are systematically addressed through justifying actions ona continuous basis. In addition to this the audit committee has additional oversight inthe area of financial risks and controls. The details of Risk Management as practiced bythe Company is provided as part of Management Discussion and Analysis Report attached tothis report.
27. Stakeholders Relationship Committee:
The Committee focuses on shareholders' grievances and strengthening of investorrelations. The Committee looks after the services of the Registrars and Share TransferAgents and recommends measures for providing efficient services to investors. TheCommittee specifically looks into investor complaints like transfer/transmission/transposition of shares and other related issues. There were no complaintspending for redressal as at 31st March 2019. The details pertaining tocomposition of Stakeholders Relationship Committee are given in the Corporate GovernanceReport.
28. Directors' Responsibility Statement :
As required under section 134(5) of the Companies Act 2013 with respect to Directors'Responsibility Statement it is hereby confirmed that:
a. In the preparation of the annual accounts for the year ended 31st March2019 the applicable accounting standards have been followed including Ind AS AccountingStandards as notified by the Ministry of Corporate Affairs (MCA) on 16th February 2015.
b. 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 31st March 2019 and ofthe profit of the Company for the year ended on that date.
c. The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.
d. The Directors have prepared the annual accounts of the Company for the FinancialYear ended 31st March 2019 on a going concern basis.
e. The Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively and
f. The Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
29. CEO and CFO Certification :
In accordance with the Regulation 17(8) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Managing Director (C.E.O.)and Chief Financial Officerof the Company have submitted a certificate for the year ended 31st March 2019to the Board of Directors which forms part of the Annual Report.
30. Auditors & Observations :
M/s. S.T. Mohite & Co. Chartered Accountants Hyderabad (FRN: 011410S) wereappointed as Statutory Auditors of the Company for a period of five years at the 29thAnnual General Meeting till the Conclusion of 34th Annual General Meeting of the Company.
The Auditors' Report for the year ended 31st March 2019 does not containany qualification reservation or adverse remarks on the accounts and related matters ofthe Company.
31. Internal Auditor :
M/s T Adinarayana & Co. Chartered Accountants (FRN: 000041S) Hyderabad are theInternal Auditors for the year 2018-19. They have submitted quarterly reports for thefinancial year 2018-19 to the Board and there are no material adverse comments.
32. Cost Accountant for Cost Accounting Records :
Pursuant to the provisions of Section 148 of the Companies Act 2013 as amended by theCompanies Amendment Act 2017 read with Rule 6 of Companies (Cost Records and Audit)Rules 2014 the Company has to maintain Cost Accounting Records for the financial year2018-19. M/s Sreshti & Associates Cost Accountants (FRN - 100644) were appointed onthe recommendation of the Audit Committee to review and certify that Cost accountingrecords of the Company for the financial year 2018-19.
33. Policy on Directors' Appointment and Remuneration and other details :
The Nomination and Remuneration Committee has laid down the policy for Remuneration ofDirectors KMP & other Employees and the criteria has been formulated by the Committeefor determining Qualifications Positive Attributes and Independence of a Director. TheCompany's policy on Directors' Appointment and Remuneration and other matters provided inSection 178(3) of the Act has been disclosed in the Corporate Governance Report.
34. Depository System :
As the Members are aware your Company's shares are tradeable compulsorily inelectronic form and your Company has established connectivity with Central DepositoryServices (India) Limited (CDSL) & National Securities Depository Limited (NSDL). Inview of the numerous advantages offered by the depository system the Members arerequested to avail the facility of Dematerialisation of the Company's shares on CDSL orNSDL. The ISIN allotted to the Company's Equity shares is INE 037C01010.
35. Vigil Mechanism / Whistle Blower Policy :
Pursuant to Section 177 (9) of the Companies Act 2013 read with Rule 7 of theCompanies (Meetings of Board and its Powers) Rules 2014 the Board of Directors hadapproved the Policy on Vigil Mechanism / Whistle Blower and the same is posted on theofficial website of the Company. This Policy inter-alia provides a direct access to theChairman of the Audit Committee.
Your Company hereby affirms that no Director / employee has been denied access to theChairman of the Audit Committee and that no complaints were received during the year.
36. Particulars of Employees
The Company has no employee whose remuneration falls within the purview of the limitsprescribed under the provisions of Section 197 of the Companies Act 2013 read with Rule5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
Particulars of Remuneration
Disclosures with respect to the remuneration of Directors and employees as requiredunder Section 197(12) of Companies Act 2013 and Rule 5 (1) Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are given below:
a. The ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year:
i. Executive Directors :
|Sl.No. ||Executive Directors ||Ratio |
|1. ||Mr.Y.Nayudamma ||13.84 |
|2. ||Mr.Y.Janaki Ramaiah ||7.76 |
ii. Non-Executive Directors :
|Sl.No. ||Name of the Director ||Ratio |
|1. ||Dr.P.Sreemannarayana ||0.11 |
|2. ||Dr.Y.Venkateswarlu |
(Mr. K.Srinivasa Rao - Alternate Director)
|3. ||Mr.P.Anjaneyulu ||0.06 |
|4. ||Mr.T.A.Choudary ||0.17 |
|5. ||Mr.N.Sudhakar ||0.19 |
|6. ||Mr.M.Balarama Krishnaiah ||0.18 |
|7. ||Mrs.S.Kavitha Rani ||0.18 |
|8. ||Mr G.S.R. Anjaneyulu ||0.18 |
The Company has not paid any remuneration to the Non-Executive Directors except SittingFee.
b. The percentage increase in remuneration of each Director Chief Executive OfficerChief Financial Officer Company Secretary in the financial year:
There is increase in remuneration of Managing Director which is 30.77% and ExecutiveDirector which is 2.51% in comparision to previous financial year.
c. Percentage increase in the median remuneration of employees in the financial year :27.63%
d. The number of permanent employees on the rolls of Company: 103
e. The explanation on the relationship between average increase in remuneration andCompany performance:
The increase in remuneration is in line with market trends. In order to ensure that theremuneration reflects Company's performance the pay is linked to organizationalperformance. As per the Company's practice annual increments to the Employees weresanctioned. Hence there is consequent increase in the remuneration of the employees.
f. Variations in the market capitalisation of the Company as at the closing date of thecurrent financial year and previous financial year:
|Particulars ||As at 31-03-2019 ||As at 31-03-2018 |
| ||(Rs. in Lakhs) ||(Rs. in Lakhs) |
|Closing rate of share at BSE (Rs.) ||29.00 ||59.20 |
|EPS (Rs.) ||1.69 ||2.14 |
|Market Capitalization (Rs in Lakhs) ||1247.06 ||2545.72 |
g. Percentage increase or decrease in the market quotations of the shares of theCompany in comparison to the rate at which the Company came out with the last publicoffer:
The Company made an Initial Public Offer in the year 1995 at par price of Rs.10/- pereach equity share. As on 31st March 2019 the Market quotation for theCompany's Equity shares at BSE Limited is Rs.29.00.
h. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration:
There has been increase of 30.77% (Rs.6.00 Lakhs) of Managing Director and increase of2.51 % (Rs.0.35 Lakhs) of Executive Director in the managerial remuneration and 27.63 % ofincrease in the salaries to employees of the Company.
i. Comparison of each remuneration of the Key Managerial Personnel against theperformance of the Company:
|Name of the Person ||Remuneration (Rs. in Lakhs) ||Total Revenue (Rs. in Lakhs) ||Remuneration as a % of total revenue |
|Mr. Y. Nayudamma - Managing Director ||25.50 ||6009.20 ||0.42 |
|Mr. Y. Janaki Ramaiah - Executive Director ||19.50 ||6009.20 ||0.32 |
|Mr. Pavansingh Thakur - Company Secretary * ||1.85 ||6009.20 ||0.03 |
* Mr. Pavansingh Thakur has joined as Company Secretary in the Company on 19-11-2018.
j. The key parameters for any variable component of remuneration availed by theDirectors: Nil
k. The ratio of the remuneration of the highest paid Director to that of the employeeswho are not Directors but receive remuneration in excess of the highest paid Directorduring the year : None.
l. Affirmation that the remuneration is as per the remuneration policy of the Company:
The Company affirms remuneration paid to Key Managerial Personnel is as per theremuneration policy of the Company.
37. Corporate Governance :
The Company is committed to maintain and adhere to the good standards of CorporateGovernance. As per SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 a Report on Corporate Governance forming part of this Report together with theAuditors' Certificate regarding the compliance of the conditions of Corporate Governanceis given in a separate section in the Annual Report.
38. Management Discussion and Analysis Report:
Management Discussion and Analysis Report pursuant to Regulation 34 (2) of SEBI (LODR)Regulations 2015 a Report on Management Discussion and Analysis is annexed hereto asAnnexure - IV.
39. Particulars regarding Energy Consumption Technology Absorption and ForeignExchange Earning and Outgo:
The particulars prescribed under Section 134 of the Companies Act 2013 read with Rule8 (3) of the Companies (Accounts) Rules 2014 relating to Conservation of EnergyTechnology Absorption Foreign Exchange Earnings and Outgo are furnished in Annexure-V tothis Report.
40. Prevention of Insider Trading :
Your Company has in place code of conduct to regulate monitor and report trading bydesignated persons and code of practices and procedures for fair disclosure of unpublishedprice sensitive information which is in adherence to the SEBI (Prohibition of insidertrading) Amendment Regulations 2018. The disclosures received pursuant to this code andthe Regulations are disseminated to the Stock Exchanges with in prescribed time limit.Report of compliance office was placed before the Board. The code is available at thecompany's website at the following link www.phytochemindia.com
All the Board Members and the designated employees have confirmed the compliance withthe Code.
41. Payment of Listing fee :
The shares of the Company are listed at Bombay Stock Exchange Limited which hasnationwide trading terminals and the listing fee has been paid by the Company upto date.
The Directors wish to express their appreciation for the assistance and continuedco-operation received from the Central and State Governments Banks FinancialInstitutions Customers Dealers and Suppliers and also the Directors wish to thank allthe employees for their dedicated contribution support and continued co-operationthroughout the year at all levels.
| ||For and on Behalf of the Board |
| ||Y. Nayudamma |
|Place : Hyderabad ||Managing Director |
|Date : 14th August 2019 ||DIN :00377721 |