Your Directors' have pleasure in presenting the Annual Report and the Audited statements of Accounts of the Company for the year ended 31st March 2019.
The turnover (Gross) for the year under review is Rs.139678 Lakhs as compared to Rs.120950 Lakhs in the previous year. The 15 % increase is on account of the following changes in respective Divisions performance.
2. Division / Segment Wise Operations
The Caustic unit has produced 190797 MTs of Caustic Soda as against 171658 MTs for the previous year representing an increase of 11%. As against net sales of Rs. 66063 Lakhs for previous year the current year sales comes to Rs. 77843 Lakhs representing an increase of 18%.
For the current year the Potassium plant has produced 19316 MTs of Potassium Hydroxide as against 13573 MTs for the previous year representing a increase of 42%. As against net sales of Rs. 8160 Lakhs for previous year the current sales comes to Rs. 13528 Lakhs representing increase of 66%.
Chloromethanes Plant has produced 38603 MT of Chloromethanes for the current year as against previous year production of 39620 MT representing an decrease of 3%. The current year net sales for Chloromethanes is at Rs. 18515 Lakhs. Previous year net sales are at Rs. 13976 lakhs an increase of 32%.
The Castor Oil Plant has processed 2634 MTs of oil for the current year as against 4763 MTs processed for the previous year representing a decrease of 45%. As against net sales of Rs. 5186 lakhs for the previous year the current year sales stood at Rs. 3198 Lakhs representing decrease of 38%. The difference is mainly attributed to the rapid fluctuations in raw materials and finished product prices.
The Fatty acid plant has processed 11492 MTs for the current year as against 14672 MTs for the previous year representing decrease of 22%. The net sales of this division has decreased from Rs. 10741 Lakhs to Rs.6762 Lakhs representing a decrease of 37%.
There are no commercial operations at Bellary Power Plant due to expiry of Power Purchase Agreement (PPA) by KPTCL. The Company is looking out for other viable options including its sale or relocation of the Plant.
The Wind Farm at Ramagiri has generated 26.43 Lakh/ KWH power in the current year as against previous year generated of 26.61 Lakh/KWH representing a marginal decrease of 1% when compared to previous year. The power generated is wheeled through State Grid to the Company for captive use. The generation of Power depends upon Wind velocity.
3. Outlook for the Current Year
Segment-wise discussion is furnished in Management Discussion and Analysis annexed to this report in ANNEXURE - E.
(` in lakhs)
|Profit before Finance Costs & depreciation||23789.56||20180.65|
|Less: Finance Cost||6299.35||5175.94|
|Profit before Depreciation||17490.21||15004.71|
|Profit (Loss) before Exceptional items and Tax||11676.62||7349.17|
|Less: Exceptional items||1161.16||-|
|Profit/Loss Before Tax||10515.46||7349.17|
|Less: - Current Tax||2159.49||1188.52|
|- Deferred Tax||529.30||1130.08|
|Profit for the period from continuing operations||7826.67||5030.57|
|Less:Loss from discountinued operations||986.56||2069.45|
|Profit for the period||6840.11||2961.12|
|Add: Balance Carried from|
|Profit available for Appropriation||11934.54||6635.07|
|Less: Transfer to General Reserve||(3500.00)||(1500.00)|
|Add/Less: Transfer from Other|
|Surplus carried to Balance Sheet||8446.10||5094.43|
Profit after tax for the Current year is Rs.7826.67 Lakhs where as previous year Profit after tax is Rs.5030.57 Lakhs representing an increase of 56%. The increase in profit is mainly on account of better performance of the company.
Upon the completion of Redemption of 0.01 % CRPS at par Capital Redemption Reserve Account has been closed by transfer of Rs. 20 Cr to General Reserve Account.
In view of liquidity constraints and future requirements your Directors have not recommended any dividend on Equity Shares.
5. Capital Expenditure
During the year the Company has incurred an amount of Rs.90.07 Cr towards modernization works and normal capital expenditure. The funds required for the above is met from Banks.
6. Safety and Environment Protection
Your Company has taken all possible steps for pollution free activities of the Company for sustained growth. All steps being taken to ensure Pollution free Environment in the vicinity of the factory where manufacturing activities of the Company takes place. The greenery around the Factory is the real testimony for company's efforts towards this end. With regard to safety the Company is complying all relevant statutory provisions. The safety department was headed by a Senior most officer who was abley supported by dedicated staff who ensures round the clock safety. Mock drills training of employees are some of the important routines taken up by the safety department to ensure preparedness of the Company to take any eventuality at all times.
7. Listing Fees
The Company has paid Listing Fee for the year 2019-20 to Bombay Stock Exchange vide our letter dated 25.04.2019.
Assets of the Company are adequately insured.
9. Fixed Deposits
The Company has not accepted any fixed deposits during the year and there are no fixed deposits outstanding as on 31.03.2019.
10. Directors and Key Managerial Personnel
Sri T.G. Venkatesh (DIN : 00108120) and Sri K. Karunakar Rao (DIN : 02031367) are retiring by rotation at the ensuing Annual General Meeting (AGM) being eligible for re-election they have given their consent for re-appointment. Appropriate resolutions are placed in the notice of Annual General Meeting under ordinary business for members approval.
Sri Gopal Krishan has been re-appointed as Executive Director (Technical) by the Board in its meeting held on 26.11.2018 (on consideration of recommendation of Nomination and Remuneration Committee Meeting dt.26.11.18) to be effective from 07.11.2018 to 31.01.2020 on same terms and conditions subject to members ratification at the ensuing AGM. Appropriate special resolution is placed in the notice of AGM for members ratification.
M/s. IDBI Bank Ltd. has appointed Sri Rangaraj K Rao as their Nominee Director vide their letter Ref.No. LCG-SSCB.53/71/Nom.8 dated 03.10.2018 and the Board in its meeting held on 18/01/2019 has co-opted him as Nominee Director on the Board of the Company.
To comply with the provisions of Sec. 149 152 read with SEBI Notification dt.09.05.2018 SEBI (LODR) Regulations 2015 Nomination and Remuneration Committee in its meeting held on 27.05.2019 and Board in its meeting held on 27.07.2019 has recommended Special Resolution for members approval in the AGM for re-appointment of Sri P.N. Vedanarayanan (DIN:00982697) as Independent Director for a term of 3 years.
To comply with the provisions of Sec.149 152 read with SEBI Notification dt.09.05.2018 SEBI (LODR) Regulations 2015 Nomination and Remuneration Committee in its meeting held on 27.05.2019 and Board in its meeting held on 27.07.2019 has recommended Special Resolution for members approval in the AGM for re-appointment of Sri G. Krishna Murthy (DIN:00134828) as Independent Director for a term of 3 years.
11. Industrial Relations
Your Company's Industrial Relations continue to be harmonious and cordial.
12. Energy Conservation Technology Absorption and Foreign Exchange earnings and outgo
Particulars required to be disclosed under Section 134 (3) of the Companies Act 2013 read with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules 1988 are forming part of the Directors' Report for the year ended 31st March 2019 is annexed hereto as Annexure - A to this report.
13. Directors' Responsibility Statement
As required by the provisions of Section 134 (3) (C) of the Companies Act 2013 Directors' Responsibility Statement is attached as Annexure - B.
14. Corporate Governance - Reg.34 (3) read with Schedule-V of SEBI (LODR) Regulations 2015
A separate report on Corporate Governance (Annexure - C) is being incorporated as a part of the Annual Report along with a certificate from the Auditors of the Company (Annexure - D) regarding compliance of the conditions of Corporate Governance. The Annexure C and D are attached to this report.
15. Management Discussion and Analysis Report
Further to comply with Reg. 34(2) (e) Schedule-V of SEBI (LODR) Regulations 2015 Management Discussion and Analysis has been given as Annexure - E to the Directors' Report.
M/s. K.S. Rao & Co. Chartered Accountants Hyderabad were appointed as Statutory Auditors for a term of 5 years upon the recommendation of Audit Committee in its meeting held on 23.08.2017 by the Board in its meeting held on 23.08.2017. Shareholders in the AGM held on 27.09.2017 has ratified the same. Pursuant to recent amendment to Sec. 143 of Companies Act 2013 members ratification at every AGM is discontinued/not required.
17. Issue and allotment of Convertible Share Warrants
In pursuance to the Shareholders approval for issue of Convertible share Warrants on preferential basis and on completion of required formalities M/s. BSE Ltd. has issued their in-principle approval to the Company vide their Letter Ref. No. DCS/PREF/SV/PRE/3462/2018-19 dtd.23.01.2019. The Board Allotment Committee in its meeting held on 27/01/2019 has allotted following Convertible Share Warrants to the Promoter/Promoter Group company on receipt of 25% upfront payment in Three Tranches to comply with SEBI (ICDR) Regulations 2018 and SEBI (LODR) Regulations 2018.
|S. No.||Tranche||Name of the Promoter/ Promoter Group||No. of Convertible||Issue Price|
|01.||First||M/s. Brilliant Industries Private Ltd.||4832427||37.01|
|02.||Second||Sri T.G. Venkatesh||5086765||37.01|
|03.||Third||M/s. Brilliant Industries Private Ltd.||5354490||37.01|
18. Listing approval from BSE Limited for First Tranche Warrants convertible into Equity
After completion of required formalities BSE Limited vide their letter Ref.No. DCS/PREF/JR/PRE/014/2019-20 dt.09.04.2019 has given Listing Approval and Trading Approval letter Ref.No.DCS/PREF/TP/JR/8780/2019-20 dt.07.05.2019 for listing of 4832427 Equity Shares (which were allotted on 27.01.2019 by the Board Allotment Committee on conversion of convertible share warrants into equity in the ratio 1:1 with a face value of Rs.10/- each at a premium of Rs.27.01 per Share). These Shares are subject to lock-in provision upto 09-05-2022 to comply with SEBI (ICDR) Regulations 2018. These proceeds of preferential issue was utilized for the objectives mentioned in the resolution.
19. Redemption of 0.01 CRP Shares (Cumulative Redeemable Preference Shares)
During the year the Company has completed redemption of 18882332 shares at par in Four quarterly equal installments on 01.04.18; 01.07.18; 01.10.18 and 01.01.19 for Resident Indian (RI) Shareholders and for Non-Resident Indian (NRI) Shareholders in One installment on 01.04.18. The details of unpaid/unclaimed redemption amounts are furnished in this report.
20. Cost Audit
Some of the products manufactured by the Company are coming under Central Govt. order Letter Ref. No. 52/26/ CAB-2010 dated 06.11.2012. To comply with statutory provisions Cost Audit Report has been filed in Form-CRA-4 in XBRL format vide SRN No.H21441365 dt.15.10.2018 with MCA portal for the financial year 2017-18.The cost audit report for the financial year ended 31st March 2019 is being submitted in due course.
21. Audit Committee
An Audit Committee continues to function to comply with provisions of Regulation 18 of SEBI (LODR) Regulations 2015 and other statutory provisions. The Audit Committee was reconstituted on 18.01.2019 with the following members namely Sri Rangaraj K Rao Sri G.Krishna Murthy and Dr. M. Asha Reddy as members with Sri P.N. Vedanarayanan as Chairman of the Audit Committee.
22. Material changes and commitments if any affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the Report
There are no material changes which will be affected to the financial position of the company according to the date of financial year and the date of its Report.
23. Statement concerning development and implementation of Risk Management Policy of the Company
A Committee comprising well qualified Senior Executives having exposure in various fields of risks related matters has been formed to assist Executive Director and CEO in (a) Overseeing and approving the Company's enterprise wide risk management framework and (b) Overseeing that all the risks that the organisation faces such as strategic financial credit market liquidity security property IT legal regulatory reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks.
The Executive Director and CEO monitors and reports on the principal risks and uncertainties that can impact the company and its ability to achieve strategic objectives. The Company's management systems organisational structures processes standards code of conduct and behaviors together form the Management and business of the Company.
Several improvements are effected to integrate Enterprise Risk Management Internal Controls Management and Assurance Frameworks and processes to drive a common integrated view of risks optimal risk mitigation responses and efficient management of internal control and assurance activities.
24. Details of Policy developed and implemented by the Company on its Corporate Social Responsibility initiatives
Your Company has involved in CSR activities right from begining of the company. It recognizes the importance for the sustained growth of the company through society development. Appropriate steps are taken by the company to integrate CSR activities for the development of areas surrounding the Company in particulars and other areas in general. Since its inception CSR Policy has been drafted by a Team of Senior Executives of the Company and the same was approved by the Board in its meeting held on 26.05.2014. For the financial year ending 31.03.2019 the Company has to spend Rs. 81.71 Lakhs as against this the Company has spent Rs. 86.89 Lakhs. The
CSR activities of the company are continuous and the Team of Senior Executives taking all necessary steps for its implementation under the guidance of C.S.R. Committee. A Board sub-committee has been formed by the Board on 26.05.2014 to monitor the implementation of C.S.R. activities. During the year there is no change in the constitution of the CSR Committee. The members of the Committee are (1) Sri G. Krishna Murthy Chairman (2) Sri K. Karunakar Rao Member and (3) Sri Gopal Krishan Member.
Details of C.S.R. activities are given as Annexure - I.
25. Particulars of Loans Guarantees or Investments made under Section 186 of the Companies Act 2013
The Company has not given any loans guarantees and also not made any investments during the year.
26. Particulars of Contracts or Arrangements made with Related Parties
During the course of its business the Company is dealing with the Group Companies which are Related Parties pursuant to the Section 188 of the Companies Act 2013 Accounting Standard 18 and SEBI (LODR) regulations 2015. The Sale Purchase Lease Rental Transactions services availed / provided and monetary values of its transactions are mentioned in notes to Accounts to comply with IND AS-24. All the Related party transactions were on arm-length basis and the same are entered with the prior approval of the Audit Committee (omnibus approval) and Board. Further details to be furnished in Form AOC-2 has been given as Annexure-G to this report to comply with statutory provisions of Sec.188.
27. Explanation or comments on qualifications reservations or adverse remarks or disclaimers made by the Auditors and the Practicing Company Secretary in their Reports
Statutory Auditors of the Company and the Practicing Company Secretary who have conducted statutory audit and Secretarial Audit respectively have not made any adverse comments on the activities of the Company for the financial year 2018-19.
28. Company's Policy relating to Directors appointment payment of Remuneration and discharge of their duties
The Nomination and Remuneration Committee has been re-constituted by the Board in its meeting held on 29.01.2016 to ensure the appointment of persons having wide exposure in the fields which are useful to the companies growth having independence as defined in the Companies Act to be available for appointment as Director. The Committee always keeps a list of eminent personalities having independence and qualification available for Company's requirement depending upon vacancy on the Board. As regards remuneration payable to whole-time Directors the Board will take collective decision within the parameters of various statutes including Companies Act 2013 and SEBI (LODR) Regulations 2015. The Committee will follow the Company's policy to discharge its duties whenever necessity arises. It will not be out of place to mention that the set policy being followed since inception of the Company to ensure transparency.
29. Internal Financial Controls
The Company has in place adequate internal financial controls with reference to financial statements. During the year such controls were tested and no reportable material weakness in the design or operation were observed.
30. Secretarial Auditor
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 204 the Board in its meeting held on 05.05.2018 has reappointed Sri N. Ramaswamy as Secretarial Auditor for the year 2018-19. Secretarial Audit Report for the year ending 31.03.2019 has been Annexed to the Directors' Report as Annexure - K to comply with statutory provisions of the Companies Act 2013 and other applicable provisions of other Acts. The Secretarial Auditor Report does not contain any qualification reservation or adverse remark.
31. Annual Return in Form MGT-9 format
The details of Annual Return in Form MGT-9 format is enclosed as Annexure - H.
32. Subsidiaries Joint Ventures and Associate Companies
The Company is not having any Subsidiaries Joint Ventures and Associate Companies as on 31.03.2019. During the year the company has sold its entire holdings in M/s. NCS Sugars Ltd. Details are furnished in Annexure - F.
33. Declaration of Independent Directors
The Company has received the necessary declaration from each Independent Director in accordance with Section 149 (7) of the Companies Act 2013 that he/she meets the criteria of independence as laid out in subsection (6) of Section 149 of the Companies Act 2013 and SEBI (LODR) Regulations 2015. Further Sri N. Ramaswamy Practicing Company Secretary has issued appropriate certificate regarding non-applicability of the provisions of Directors disqualification to comply with the provisions of SEBI (LODR) Regulations 2015.
The Board evaluated the effectiveness of its functioning and that of the Committees and of individual Directors by seeking their inputs on various aspects of Board/ Committee Governance.
The aspects covered in the evaluation include the contribution to and monitoring of corporate governance practices participation in the long-term strategic planning and the fulfillment of Directors' obligation and fiduciary responsibilities including but not limited to active participation at the Board and Committee meetings.
The Chairman of the Board had one-on-one meetings with the Independent Directors and the Chairman of the Nomination and Remuneration Committee had one-on-one meetings with the Executive and non-Executive Directors. These meetings were intended to obtain Directors' inputs on effectiveness of Board/Committee processes. The Board considered and discussed the inputs received from the Directors.
Further the Independent Directors at their meeting reviewed the performance of Board Chairman of the Board and of Non-Executive Directors.
35. Disclosure as per the Sexual Harassment of Women at workplace (Prevention Prohibition and Redressal) Act 2013
The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 and the Rules thereunder.
a. No. of complaints filed during the financial year - Nil
b. No. of complaints disposed during the financial year - Not Applicable
c. No. of complaints pending as on end of the financial year - Nil
36. Vigil Mechanism
The Vigil Mechanism of the Company which also incorporates a whistle blower policy in terms of the SEBI (LODR) Regulations 2018 includes an Ethics and Compliance Task Force comprising Senior Executives of the Company. Protected disclosures can be made by a whistle blower through an e-mail or a letter to the Task Force or to the Chairman of the Audit Committee. The Policy on Vigil Mechanism and whistle blower policy may be accessed on the Company's website at the link: http://www.tgvgroup.com.
37. Investor Education and Protection Fund (IEPF) :
Pursuant to the applicable provisions of the Companies Act 2013 read with the IEPF Authority (Accounting Audit Transfer and Refund Rules) 2016 (`the Rules') all unpaid and unclaimed dividends/amounts are required to be transferred by the Company to the IEPF established by the Government of India after the completion of seven years.
The following table provides list of years for which unclaimed dividends/redemption amount would become eligible to be transferred to the IEPF on the dates mentioned below.
CRPS Dividend :
|Financial Year||CRPS Dividend Declared (%)||Date of declaration of Dividend on||Last date for claiming unpaid dividend/ amount||Unclaimed Dividend / Amount (Rs.) as on 31.03.2019||Due date for transfer to IEPF Account|
|01.04.2002 to 31.03.2016 (14 years)||@ 0.01 per year||27.09.2016||03.11.2023||33631||04-11-2023|
Fractional Shares Entitlement :
|Financial Year||Fractional Shares entitlement||Date of payment/ declaration||Last date for claiming unpaid amount||Unclaimed Amount (Rs.) as on 31.03.2019||Due date for transfer to IEPF Account|
|2016-2017||Rs. 39/- per share||27.01.2017||04.03.2024||23868||05.03.2024|
CRPS Dividend (2016-17 & 2017-18) + CRPS Redemption amounts :
|Financial Year||Redemption Installments||Date of payment/ declaration||Last date for claiming unpaid amount||Unclaimed Amount (Rs.) as on 31.03.2019||Due date for transfer to IEPF Account|
|RI - First (*)||01.04.2018||08.06.2025||3225960.00||09.06.2025|
|NRI - Single (**)||01.04.2018||08.06.2025||440690.00||09.06.2025|
|2018-2019||RI - Second including Dividend (2 years) (*)||01.07.2018||08.08.2025||3253182.68||09.08.2025|
|RI - Third (*)||01.10.2018||08.12.2025||3399752.50||09.12.2025|
|RI - Fourth (*)||01.01.2019||10.03.2026||3488195.00||11.03.2026|
(*) RI means Resident Indian (**) NRI means Non-Resident Indian
Your Directors wish to express their sincere thanks to Financial Institutions Bankers Distributors and Customers for their continued support to the Company. The Directors also acknowledge with gratitude the continued help and support received from the various departments of the Government of India and the Government of Andhra Pradesh and Government of Telangana.
The Directors place on record their appreciation of the sincerity commitment and contribution made by the Employees at all levels and this was mainly responsible to carry on the business of the Company during the year.
|On behalf of the Board of Directors|
|CA K. KARUNAKAR RAO||N. JESVANTH REDDY|
|Place||: Hyderabad||Executive Director & CEO||Executive Director (Technical)|
|Date||: 27th July 2019||(DIN : 02031367)||(DIN: 03074131)|
ANNEXURE `A' TO THE DIRECTORS' REPORT
Particulars pursuant to Rule 8(3) of Companies (Accounts) Rules 2014.
A. Conservation of energy
1. 1 No. additional capacitor bank of 4416 KVA is installed to improve the power factor to 0.999 which will result in saving of energy.
2. Existing 18 MVA/31.5 MVA Transformers and 132 KVA /11KVA transformers are planned to replace with 50 MVA to reduce energy losses and to get stable operation.
3. Replacing HPMV and Sodium Vapour lamps with LED fixtures to save energy.
B. Details of Technology development and research
1. Research and Development (R & D)
a. Optimization of caustic soda in Hydro chlorination section and Thermal Chlorination Section in Chloromethanes plant by varying concentration by 6 to 10 %. After optimizing the concentration the overall consumption will be reduced by 20 %. Pilot plant studies are in progress to optimize the process. b. R&D experiments are under progress to convert glauber salt to unhydrous sodium sulphate in economical way to facilitate commercial value to sodium sulphate recovered from brine during purification.
2. Benefits derived as a result of R&D a. After optimizing the concentration of caustic soda savings will be upto 20%. b. After successful laboratory experiments we can get better realization for sodium sulphate recovered from brine during purification.
3. Technology Absorption Adoption and Innovation
There is no instances of technology innovation absorption and adoption during the financial year.
C. Foreign Exchange Earnings and Outgo
a) Activities relating to exports; initiatives taken to increase exports development of new export markets for products and services and export plans:
i) Exported Hydrogenated Castor Oil 12 Hydroxy Stearic Acid Caustic Potash and planning to enlarge exports by increasing export quantity and exploring export possibility for other products.
|b) Total Foreign Exchange earned and used||(Rs. in lakhs)|
|i) Foreign Exchange earned||9531.33|
|ii) Foreign Exchange used||6330.01|
ANNEXURE `B' TO THE DIRECTORS' REPORT
Directors' Responsibility Statement
Yours Directors Further Confirm that
i. In the presentation of the Annual Accounts applicable Accounting Standards have been followed.
ii. The accounting policies are consistently applied and reasonable prudent judgment and estimates are made so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profit of the company for that period.
iii. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. iv. The Directors had prepared the Annual Accounts on a going concern basis.
|On behalf of the Board of Directors |
|CA K. KARUNAKAR RAO||N. JESVANTH REDDY|
|Place : Hyderabad||Executive Director & CEO||Executive Director (Technical)|
|Date : 27th July 2019||(DIN : 02031367)||(DIN: 03074131)|