Tyche Industries Limited
Your Directors presents the 20th Annual Report together with the Audited Accounts ofthe Company for the financial year ended 31st March 2018.
|Financial Results || || |
| || ||(Rupees in Crores) |
|Particulars ||Current Year ended on 31/03/2018 ||Previous Year ended on 31/03/2017 |
|Total Income (Including Other Income) ||53.28 ||44.49 |
|Less: Expenditure (before Finance Cost & Depreciation) ||42.57 ||36.61 |
|Profit before Finance Cost & Depreciation ||10.71 ||7.88 |
|Less: Finance Cost ||0.01 ||0.08 |
|Profit before Depreciation and Tax ||10.70 ||7.80 |
|Less: Depreciation ||1.84 ||1.87 |
|Profit / Loss before tax ||8.86 ||5.93 |
|Less: Provision for Tax || || |
|- Current Tax ||2.97 ||2.13 |
|- Deferred Tax ||0.03 ||0.72 |
|Profit after Tax ||5.86 ||3.08 |
|Less: Extra-Ordinary Items- short provision ||- ||- |
|Profit after tax and prior period ||5.86 ||3.08 |
|Add: Balance brought forward from the Previous Year ||32.18 ||30.18 |
|Appropriations || || |
|Provision for Proposed Dividend ||0.51 ||0.51 |
|Provision for Dividend Tax ||0.11 ||0.11 |
|Transfer to General Reserve ||0.30 ||0.30 |
|Adjustment to Reserves ||0.00 ||0.00 |
|(+/-)Excess/ Short Provision ||-0.03 ||-0.16 |
|Balance carried to Balance Sheet ||37.10 ||32.18 |
Review of the Business:
During the year your Company has achieved a total sales income of Rs. 51.59 Crores asagainst Rs.42.60 Crores in the previous year and earned a net profit of Rs.5.86 Crores(Previous Year Rs.3.08 Crores) after providing Income Tax and Deferred Tax of Rs. 3.00Crores (Previous Year Rs. 2.85 Crores).
Your Directors are working with a focus to build a sustainable business model whichwould add value to all stakeholders over the years to come. The Board of Directors are ofthe opinion that the present and future market scenario of the Pharma Sector is extremelygood as discussed in detail in Management Discussion and Analysis.
Your Directors have recommended a dividend of Re.0.50 per fully paid equity share forthe year ended 31st March 2018 being 5% of the fully Paid-up Equity Capital of theCompany. The dividend if approved at the ensuing Annual General Meeting will be paid tothose members whose names appear on the Company's Register of Members on 21st September2018. The total amount of outgo on account of this will be Rs.0.51 Crores towards dividendand Rs.0.11 Crores towards dividend tax. The dividend would be tax free in the hands ofthe shareholders.
In accordance with the provisions of the Companies Act 2013 Sri. G .Ganesh KumarManaging Director of the Company will retire by rotation at the ensuing Annual GeneralMeeting of the company.
Brief resume of Directors proposed to be appointed/re-appointed as stipulated underSEBI (LODR) Regulations 2015 entered with the Stock Exchanges are given in the Noticeconvening 20th Annual General Meeting.
b) Board Meetings:
During the year seven board meetings were held with gap between meetings notexceeding the period prescribed under the 2013 Act. Details of Board and Board CommitteeMeetings held during the year are given in the Corporate Governance Report.
Board Meeting dates are finalised in consultation with all Directors and agenda papersbacked up by comprehensive notes and background information are circulated well in advancebefore the date of the meeting thereby enabling the Board to take informed decisions. Adetailed presentation is also made to appraise the Board of important developments inindustry segments business operations marketing products etc.
c) Key Managerial Personnel:
Mr. G. Ganesh Kumar Managing Director of the Company.
Mr. Y. Srinivasa Rao Chief Financial Officer (appointed on 30th May 2017 up to13.02.2018) Mr. K. Srinivas Chief Financial officer (appointed on 13.02.2018 withimmediate effect). Ms. Laxmi Chandra Dey Company Secretary and Compliance Officer.
d) Independent Directors:
Mr. Harichandra kantimahanti and Mr. Boosa Eshwar are Independent Directors of theCompany. In terms of Section 149 and 152 of the Companies Act 2013 these IndependentDirector of the Company will hold office till 31st March 2019 who shall not retire byrotation. The Independent Directors of the Company have given declaration that they meetthe criteria of the Independence as provided in Section 149(6) of the Companies Act 2013.
e) Independent Directors familiarisation programme:
As per the requirements under the (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company undertook Directors Familiarisation Programme forIndependent Directors in order to familiarise them with business model managementstructure product portfolio industry overview manufacturing operations internalcontrol system and operations FOREX management risk management framework functioning ofvarious divisions HR Management etc.
f) Performance Evaluation of Board Committees and Directors:
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing obligation andDisclosure Requirements) Regulations 2015 the Board has carried out the annualperformance evaluation of its own performance and of the Independent Directors onparameters such as level of engagement contribution independent judgement safeguardingthe interest of the Company and its minority shareholders etc. The performance evaluationof the Chairman and Non Independent Directors was carried out by the IndependentDirectors. The Directors expressed their satisfaction with the evaluation process as wellas the evaluation of the working of its committee information needs of the Boardexecution and performance of specific duties obligation and governance.
g) Policy on appointment and remuneration of Directors:
The Board has on the recommendation of Nomination & Remuneration Committeeformulated criteria for determining Qualifications Positive Attributes and Independencyof a Director as also a policy for remuneration of Directors Key Managerial Personnel andSenior Management. The details of criteria laid down and the Remuneration policy are givenin the Corporate Governance Report.
M/s. SURYAM & CO Chartered Accountants (Firm Registration No. 012181S) arere-appointed as statutory auditors upon the conclusion of the 20th AGM in accordance withthe provisions of the Companies Act 2013.
The Audit Committee and the Board of Directors recommend the re-appointment of M/s.SURYAM & CO Chartered Accountants as statutory auditors of the Company from theConclusion of the 20th AGM subject to the shareholders approvals.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasre-appointed D. Renuka Company Secretary in Practice to undertake the Secretarial Auditof the Company. The Secretarial Audit Report is annexed herewith as "Annexure 1"and forms part of the Notice. There is no qualification reservation or adverse remark inthe report.
As per the provisions of Section 148 of the Companies Act 2013 read with the Companies(Audit and Auditors) Rules 2014 the cost audit records maintained by the company inrespect of its bulk drugs and API's activity are required to be audited by cost auditors.The Board has on the recommendation of the Audit Committee recommended Mr. Sativada VenkatRao. Practicing Cost Accountant Hyderabad as Cost Auditors of the Company to conduct thecost audit for the financial year 2018-19 at a remuneration of Rs. 30000/-p.a (RupeesThirty Thousand only) excluding taxes as may be applicable in addition to reimbursementof all out-of-pocket expenses subject to ratification by members. Accordingly aresolution seeking Member's ratification for the remuneration payable Mr. Sativada VenkatRao Cost Auditor is included at Item No.5 of the Notice convening the 20th Annual GeneralMeeting.
Pursuant to the provisions of Section 138 of the Companies Act 2013 read with Rule 13of the Companies (Accounts) Rules 2014 the Board has recommended the re-appointment ofM/s. P.S.N Ravishanker & Associates Chartered Accountants as Internal Auditors of theCompany for the financial year 2018-19.
Internal Control System Compliance Framework:
The Company has an Internal Control System commensurate with size scale andcomplexity of its operations. The Company has also put in place the policies andprocedures relating to "Internal Financial Controls" for ensuring the orderlyand efficient conduct of its business including adherence to the company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial statements as per the explanation to Section 134(5) (e) of the Act.
The internal financial controls are adequate and are operating effectively so as toensure orderly and efficient conduct of business operations. The Audit Committee inconsultation with the Internal Auditors formulates the scope functioning periodicity andmethodology for conducting the internal audit. The internal auditors carry out auditcovering interalia monitoring and evaluating the efficacy and adequacy of internalcontrol systems in the Company its compliance with operating systems accountingprocedures and policies at all locations and submit their periodical internal auditreports to the Audit Committee. Based on the internal audit report and review by the AuditCommittee process owners undertake necessary actions in their respective areas. TheInternal Auditors have expressed that the internal control system in the Company is robustand effective.
The Board has also put in place requisite legal compliance framework to ensurecompliance of all the applicable laws and that such systems are adequate and operatingeffectively.
Transfer to Reserves:
Your Company proposes to transfer Rs.0.30 Crores to the General Reserve out of theamount available for appropriations.
There have been no material changes and commitments affecting the financial position ofthe Company since the close of financial year i.e. since 31st March 2018. Further it ishereby confirmed that there has been no change in the nature of business of the Company.The Company continues to operate only in one segment i.e. Bulk drugs.
Directors Responsibility Statement:
Pursuant to the requirement under Section 134(3) (C) of the Companies Act 2013 theBoard of Directors of the Company hereby state that:
i. in the preparation of the annual accounts for the year ended 31stMarch 2018 theapplicable accounting standards read with requirements set out under Schedule III to theAct had been followed and there are no material departures from the same;
ii. the Directors had 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 2018 and profit of thecompany for that period;
iii. the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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.
v. 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 vi. the Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
Related Party Transactions:
All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of the business. There are nomaterially significant related party transactions made by the company with Promoters KeyManagerial Personnel or other designated persons which may have potential conflict withinterest of the company at large and thus disclosure in Form AOC-2 is not required.
Subsidiary and associate Companies:
The Company does not have any subsidiary and/or associate companies.
During the year under review the Company has neither accepted nor renewed any depositwithin the meaning of Section 73 and 76 of the Companies Act 2013 read with Companies(Acceptance of Deposits) Rules 2014.
Your Company has taken wherever possible to mitigate risks appropriate insurances andthe Board is kept apprised of the risk assessment and minimization procedures. The assetsof the Company have been adequately covered under insurance. The policy values have beenenhanced taking into consideration the expanded and upgraded facilities of the Company.
Listing of Securities:
The Equity Shares of the Company are listed with BSE Limited. The Company has paid theAnnual listing fees to the BSE Limited for the financial year 2018-2019.
The Company has only one class of shares viz. Equity share of face value of Rs.10/-each. The total issued and subscribed capital of the Company is Rs.10.25 Crores. The paidup capital of the Company is Rs.10.24 Crores. The Company has not issued shares withdifferential voting rights nor granted stock options nor sweat equity.
Forfeiture of shares:
The company has issued notices to the shareholders for payment of calls in arrears onvarious dates after the issue of said notices the company is left with unpaid capital ofRs 46600/- unpaid on 9320 equity shares @ Rs 5/- share. The company after takingapprovals from the stock exchange the said share capital will be written off accordinglyin books.
Report on Corporate Governance:
A detailed report on Corporate Governance prepared in substantial compliance with theprovisions of SEBI (LODR) Regulations 2015 with the Stock Exchange together withCertificate given by the practising company secretary regarding the compliance ofconditions of corporate governance form a part of Annual Report.
Audit Committee and its Composition:
The Audit Committee of the Company reviews the reports to be submitted with the Boardof Directors with respect to auditing and accounting matters. It also supervises theCompany's internal control and financial reporting process.
As on 31stMarch 2018 the Audit Committee comprised of Mr.Harichandra KantimahantiMr.Boosa Eshwar Independent Directors and Mr. G. Ganesh Kumar Managing Director of theCompany as member.
Mr. Harichandra Kantimahanti was the Chairman of Audit Committee of the Company. TheCompliance Officer of the Company acts as the Secretary of the Audit Committee.
Committees of the Board:
There are currently five Committees of the Board which are as follows:
1. Audit Committee
2. Stakeholders' Relationship Committee
3. Share Transfer Committee
4. Nomination and Remuneration Committee
5. Corporate Social Responsibility Committee
Details of all the Committees along with their charters composition and meetings heldduring the year are provided in the "Report on Corporate Governance" as partof this Annual Report.
Research & Development:
The Company has incurred an expenditure of Rs.0.77 Crores on research and developmentduring the year.
Company has implemented an integrated risk management approach through which it reviewsand assesses significant risks on a regular basis to help ensure that there is a robustsystem of risk controls and mitigation in place. Senior management periodically reviewsthis risk management framework to keep updated and address emerging challenges.
Major risks identified for the Company by the management are Manufacturing &Supply Regulatory Information Technology Currency fluctuation Compliance Litigationetc. The management is however of the view that none of the above risks may threaten theexistence of the Company as robust Risk mitigation mechanism is put in place to ensurethat there is nil or minimum impact on the Company in case any of these risks materialise.
The Company has laid down a well-defined Risk Management Policy covering the riskmapping trend analysis risk exposure potential impact and risk mitigation process. Adetailed exercise is being carried out to identify evaluate manage and monitoring ofboth business and non-business risk. The Board periodically reviews the risks and suggestssteps to be taken to control and mitigate the same through a properly defined framework.
Whistle Blower Mechanism:
The Company has set up Whistle Blower / Vigil Mechanism viz. Whistle Blower Policy toenable the employees and Directors to report genuine concerns and irregularities if anyin the Company noticed by them. The same is reviewed by the Audit Committee from time totime. The details of the Whistle Blower Policy is explained in the Corporate GovernanceReport and also posted on the website of the Company. We affirm that during the financialyear 2017-18 no employee or director was denied access to the Audit Committee.
Loans Guarantees or Investments:
Details of Loans Guarantees and Investments if any covered under the provisions ofSection 186 of the Companies Act 2013 are given in the notes to the Financial Statements.
Corporate Social Responsibility (CSR):
Pursuant to the provisions of Section 135 of the Companies Act 2013 read with CSRRules the Company has constituted CSR Committee and formulated CSR Policy. During theyear the Company undertook several initiatives under the CSR program. The details of CSRpolicy and CSE activities undertaken during the year are annexed herewith as"Annexure II".
Details of Significant and Material Orders passed by the Regulators or Courts orTribunals impacting the Going Concern status and Company's operations in future:
There was no order passed by any regulator or court or tribunal which impacts thegoing concern status of the Company or will have bearing on Company's operations infuture.
Information under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013:
The Company has constituted an Internal Compliant Committee under Section 4 of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.During the year no complaint was made before the Committee.
Extract of the Annual Return:
The extract of the Annual Return in form MGT 9 is annexed herewith as "AnnexureIII".
Managerial Remuneration and Particulars of Employees:
Disclosure pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) rules 2014 are attached as Annexure IV.
In terms of Section 197(12) of the Companies Act 2013 read with rule 5(2) and 5(3) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 astatement showing the names and other particulars of the employees drawing remuneration inexcess of limits set out in said rules forms part of the annual report.
Considering the first proviso to section 136(1) of the Companies Act 2013 the annualreport excluding the aforesaid information. The said information is available forinspection at the registered office of the Company during business hours on working daysup to the date of the forthcoming 20th Annual General Meeting. Any shareholders interestedin obtaining a copy thereof may write to the Company Secretary in this regard.
Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo:
Information regarding Energy Conservation Technology Absorption and Foreign ExchangeEarnings and Outgo required to be disclosed under Section 134 of the Companies Act 2013read with Companies (Accounts) Rules 2014 is enclosed as an Annexure V and formspart of the Report.
Your Company firmly believes that employees are the most valuable assets and keyplayers of business success and sustained growth. Various employee benefits recreationaland team building programs are conducted to enhance employee skills motivation as also tofoster team spirit. Company also conducts in-house training programs to develop leadershipas well as technical/functional capabilities in order to meet future talent requirements.
Industrial relation has been cordial and your directors appreciate the sincere andefficient services rendered by the employees at all levels towards the successful workingof the Company.
Your Directors wish to take this opportunity to thank the employees for their dedicatedservice and contribution to the Company. We also thank Bank of India HDFC BankGovernment Agencies Business Associates Shareholders and Investors at large for theircontinued support towards conduct of efficient operations of the Company.
| ||For and on behalf of the Board of Directors |
| ||Sd/- |
|Place: Hyderabad ||G. Ganesh Kumar |
|Date : 10 August 2018 ||Chairman &Managing Director |