Tyche Industries Limited
Your Directors presents the 22nd Annual Report together with theAudited Accounts of the Company for the financial year ended 31st March 2020.
(Rupees in Crores)
|Particulars ||Current Year ended on 31/03/2020 ||Previous Year ended on 31/03/2019 |
|Total Income (Including Other Income) ||77.38 ||56.47 |
|Less: Expenditure (before Finance Cost & Depreciation) ||52.31 ||44.78 |
|Profit before Finance Cost & Depreciation ||25.07 ||11.69 |
|Less: Finance Cost ||0.01 ||0.01 |
|Profit before Depreciation and Tax ||25.06 ||11.68 |
|Less: Depreciation ||1.73 ||1.84 |
|Profit / Loss before tax ||23.33 ||9.84 |
|Less: Provision for Tax || || |
|- Current Tax ||6.03 ||2.98 |
|- Deferred Tax ||(0.26) ||(0.28) |
|Profit after Tax ||17.56 ||7.14 |
|Other Comprehensive Income ||- ||- |
|Total Comprehensive Income ||17.56 ||7.14 |
|Add: Balance brought forward from the Previous Year ||43.94 ||37.10 |
|Appropriations || || |
|Dividend Paid* ||0.51 ||0.00 |
|Dividend Tax Paid* ||0.11 ||0.00 |
|Transfer to General Reserve* ||0.30 ||0.30 |
|Adjustment to Reserves ||-0.03 ||0.01 |
|(+/-)Excess/ Short Provision ||0.00 ||0.00 |
|Balance carried to Balance Sheet ||60.55 ||43.94 |
* Recommended by board subject to approval of shareholders in theannual general meeting.
Review of Operations :
During the year your Company has achieved a total income of Rs.77.38Crores as against Rs. 56.47Crores in the previous year and earned a net profit ofRs.17.56Crores (Previous Year Rs.7.14Crores) after providing Income Tax and Deferred Taxof Rs.5.77 Crores (Previous Year Rs. 2.77Crores).
Your Directors always work with a focus to build a sustainable businessmodel which would add value to all stakeholders over the years to come. The Board ofDirectors opine that the present and future market scenario of Pharma Sector will be goodas discussed in detail in Management Discussion and Analysis.
Your Directors have recommended a dividend of Re.1 per fully paidequity share for the year ended 31st March 2020 being 10% of the fully Paid-up EquityCapital of the Company. The dividend if approved at the ensuing Annual General Meetingwill be paid to those members whose names appear on the Company's Register ofMembers on 23rd September 2020. The total amount of outgo on account of this will beRs.1.02 Crores towards dividend. The dividend would be tax in the hands of theshareholders.
In accordance with the provisions of the Companies Act 2013 Mr GGanesh Kumar Director of the Company will retire by rotation at the ensuing AnnualGeneral Meeting of the company.
Brief resume of Directors proposed to be appointed/re-appointed asstipulated under SEBI (LODR) Regulations 2015 entered with the Stock Exchanges are givenin the Notice convening 22nd Annual General Meeting.
b) Board Meetings:
During the year Eight board meetings were held with gap betweenmeetings not exceeding the period prescribed under the 2013 Act. Details of Board andBoard Committee Meetings held during the year are given in the Corporate GovernanceReport.
Board Meeting dates are finalised in consultation with all Directorsand agenda papers backed up by comprehensive notes and background information arecirculated well in advance before the date of the meeting thereby enabling the Board totake informed decisions. A detailed presentation is also made to apprise the Board ofimportant developments in industry segments business operations marketing productsetc.
c) Key Managerial Personnel:
Mr. G. Ganesh Kumar Managing Director of the Company. Mr K.SrinivasChief Financial officer (up to 30.06.2019) Mr. Y Srinivas Chief Financial Officer(Witheffect from 07.08.2019) Mr. SatyaRanjan JenaCompany Secretary and Compliance Officer d)Independent Directors:
Mr Sai Sudhakar Panchakarla with effect from 25th March 2019 andMr.Boosa Eshwar are Independent Directors of the Company. In terms of Section 149 and 152of the Companies Act 2013 these Independent Director of the Company will hold office till29th September 2024 who shall not retire by rotation. The Independent Directors of theCompany have given declaration that they meet the criteria of the Independence as providedin Section 149(6) of the Companies Act 2013.
e) Independent Directors familiarisation programme:
As per the requirements under the (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company undertook Directors Familiarisation Programmefor Independent 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 (Listingobligation and Disclosure Requirements) Regulations 2015 the Board has carried out theannual performance 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 & RemunerationCommittee formulated criteria for determining Qualifications Positive Attributes andIndependency of a Director as also a policy for remuneration of Directors Key ManagerialPersonnel and Senior Management. The details of criteria laid down and the Remunerationpolicy are given in the Corporate Governance Report.
h) Statutory Auditors:
The Company's Statutory Auditors M/s. SURYAM & CO CharteredAccountants (Firm Registration No. 012181S)were appointed as the Statutory Auditors of theCompany for a period of 5 years at the 19th Annual general Meeting of the Company i.e. upto the conclusion of 24th Annual General Meeting of the Company.
Accordingly M/s. SURYAM & CO Chartered Accountants StatutoryAuditors of the Company will continue till the conclusion of Annual General Meeting to beheld 2022.In this regard the Company has received a certificate from the Auditors to theeffect that their continuation as Statutory Auditors would be in accordance with theprovisions of Section 141 of the Companies Act 2013.
i) Secretarial Auditors:
Pursuant to the provisions of Section 204 of the Companies Act 2013and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theCompany has re-appointed Mrs.D. Renuka Company Secretary in Practice to undertake theSecretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as"Annexure 1" and forms part of the Notice. There is no qualificationreservation or adverse remark in the report.
j) Cost Auditors:
As per the provisions of Section 148 of the Companies Act 2013 readwith the Companies (Audit and Auditors) Rules 2014 the cost audit records maintained bythe company in respect of its bulk drugs and API's activity are required to beaudited by cost auditors. The Board has on the recommendation of the Audit Committeerecommended Mr.SativadaVenkat Rao. Practicing Cost Accountant Hyderabad as Cost Auditorsof the Company to conduct the cost audit for the financial year 2020-21 at a remunerationof Rs. 30000/-p.a (Rupees Thirty Thousand only) excluding taxes as may be applicable inaddition to reimbursement of all out-of-pocket expenses subject to ratification bymembers. Accordingly a resolution seeking Member's ratification for the remunerationpayable Mr.SativadaVenkat Rao Cost Auditor is included at Item No.4 of the Noticeconvening the 22nd Annual General Meeting.
k) Internal Auditor:
Pursuant to the provisions of Section 138 of the Companies Act 2013read with Rule 13 of the Companies (Accounts) Rules 2014 the Board has recommended there-appointment of M/s. P.S.N Ravishanker & Associates Chartered Accountants asInternal Auditors of the Company for the financial year 2020-21.
l) Internal Control System Compliance Framework:
The Company has an Internal Control System commensurate with sizescale and complexity 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 policiesthe safeguarding 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 operatingeffectively so as to ensure orderly and efficient conduct of business operations. TheAudit Committee in consultation with the Internal Auditors formulates the scopefunctioning periodicity and methodology for conducting the internal audit. The internalauditors carry out audit covering inter alia monitoring and evaluating the efficacy andadequacy of internal control systems in the Company its compliance with operatingsystems accounting procedures and policies at all locations and submit their periodicalinternal audit reports to the Audit Committee. Based on the internal audit report andreview by the Audit Committee process owners undertake necessary actions in theirrespective areas. The Internal Auditors have expressed that the internal control system inthe Company is robust and effective.
The Board has also put in place requisite legal compliance framework toensure compliance of all the applicable laws and that such systems are adequate andoperating effectively.
m) Transfer to Reserves:
Your Company proposes to transfer Rs.0.30 Crores to the General Reserveout of the amount available for appropriations.
n) Material Changes:
There have been no major material changes and commitments affecting thefinancial position of the Company to since the close of financial year i.e. since 31stMarch 2020. Further it is hereby confirmed that there has been no major change in thenature of business of the Company. The Company continues to operate only in one segmenti.e. Bulk drugs.
Directors Responsibility Statement:
Pursuant to the requirement under Section 134(3)(c) of the CompaniesAct 2013 the Board of Directors of the Company hereby state that:
i. In the preparation of the annual accounts for the year ended 31stMarch 2020 the applicable accounting standards read with requirements set out underSchedule III to the Act had been followed and there are no material departures from thesame;
ii. The Directors had selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company as at 31st March 2020and profit of the company for that period;
iii. The Directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv. The Directors had prepared the annual accounts on a "GoingConcern" basis.
v. The Directors had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively; 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 thefinancial year were on arm's length basis and were in the ordinary course of thebusiness. There are no materially significant related party transactions made by thecompany with Promoters Key Managerial Personnel or other designated persons which mayhave potential conflict with interest of the company at large and the Form AOC-2 isattached (Annexure-II).
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 norrenewed any deposit within the meaning of Section 73 and 76 of the Companies Act 2013read with Companies (Acceptance of Deposits) Rules 2014.
Your Company has taken wherever possible to mitigate risks appropriateinsurances and the Board is kept apprised of the risk assessment and minimizationprocedures. The assets of the Company have been adequately covered under insurance. Thepolicy values have been enhanced taking into consideration the expanded and upgradedfacilities of the Company.
Listing of Securities:
The Equity Shares of the Company are listed with BSE Limited. TheCompany has paid the Annual listing fees to the BSE Limited for the financial year2020-2021.
The Company has only one class of shares viz. Equity share of facevalue of Rs.10/- each. The total issued and subscribed capital of the Company is Rs.10.25Crores. The paid up capital of the Company is Rs.10.24Crores. The Company has not issuedshares with differential voting rights nor granted stock options nor sweat equity.
Forfeiture of shares:
The company has issued notices to the shareholders for payment of callsin arrears on various dates after the issue of said notices the company is left withunpaid capital of Rs 46600/- unpaid on 9320 equity shares @ Rs 5/- share. The companyafter taking approvals from the stock exchange the said share capital will be written offaccordingly in books.
Report on Corporate Governance:
A detailed report on Corporate Governance prepared in substantialcompliance with the provisions of SEBI (LODR) Regulations 2015 with the Stock Exchangetogether with Certificate given by the practising company secretary regarding thecompliance of conditions 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 submittedwith the Board of Directors with respect to auditing and accounting matters. It alsosupervises the Company's internal control and financial reporting process.
As on 31st March 2020 the Audit Committee comprised ofMr.BoosaEshwar Mr.Sai Sudhakara Panchakarla Independent Directors and Mr. G Ganesh KumarManaging Director of the Company as member.
Mr.BoosaEshwar was the Chairman of Audit Committee of the Company. TheCompliance Officer of the Companyacts 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 compositionand meetings held during the year are provided in the "Report on CorporateGovernance" as part of this Annual Report.
Research & Development:
The Company has incurred an expenditure of Rs.0.61Crores on researchand development during the year.
Company has implemented an integrated risk management approach throughwhich it reviews and assesses significant risks on a regular basis to help ensure thatthere is a robust system of risk controls and mitigation in place. Senior managementperiodically reviews this risk management framework to keep updated and address emergingchallenges.
Major risks identified for the Company by the management areManufacturing & Supply Regulatory Information Technology Currency fluctuationCompliance Litigation etc. The management is however of the view that none of the aboverisks may threaten the existence of the Company as robust Risk mitigation mechanism is putin place to ensure that there is nil or minimum impact on the Company in case any of theserisks materialise.
The Company has laid down a well-defined Risk Management Policycovering the risk mapping trend analysis risk exposure potential impact and riskmitigation process. A detailed exercise is being carried out to identify evaluate manageand monitoring of both business and non-business risk. The Board periodically reviews therisks and suggests steps to be taken to control and mitigate the same through a properlydefined framework.
Whistle Blower Mechanism:
The Company has set up Whistle Blower / Vigil Mechanism viz. WhistleBlower Policy to enable the employees and Directors to report genuine concerns andirregularities if any in the Company noticed by them. The same is reviewed by the AuditCommittee from time to time. The details of the Whistle Blower Policy is explained in theCorporate Governance Report and also posted on the website of the Company. We affirm thatduring the financial year 2019-20 no employee or director was denied access to the AuditCommittee.
Loans Guarantees or Investments:
Details of Loans Guarantees and Investments if any covered under theprovisions of Section 186 of the Companies Act 2013 are given in the notes to theFinancial Statements.
Corporate Social Responsibility (CSR):
Pursuant to the provisions of Section 135 of the Companies Act 2013read with CSR Rules the Company has constituted CSR Committee and formulated CSR Policy.During the year the Company undertook several initiatives under the CSR program. Thedetails of CSR
policy and CSE activities undertaken during the year are annexedherewith as "Annexure III".
Details of Significant and Material Orders passed by the Regulators orCourts or Tribunals impacting the Going Concern status and Company's operations infuture:
There was no order passed by any regulator or court or tribunal whichimpacts the going concern status of the Company or will have bearing on Company'soperations in future.
Information under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013:
The Company has constituted an Internal Compliant Committee underSection 4 of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. During the year no complaint was made before the Committee.
Legal Compliance Reporting
The Board of Directors reviews in detail on a quarterly basis thereports of compliance to all applicable laws and regulations. Any non-compliance isseriously taken up by the Board with fixation of accountability and reporting of stepstaken for rectification of non-compliance. In the opinion of the Board there has been noidentification of elements of risk that may threaten the existence of the company. TheCompany complied with all the applicable Secretarial Standards issued by the Institute ofthe Companies Secretaries of India.
Extract of the Annual Return:
The extract of the Annual Return in form MGT 9 is annexed herewith as"Annexure IV" and the extract of annual return is also available at website ofcompany i.e. www.tycheindustries.com.
Managerial Remuneration and Particulars of Employees:
Disclosure pertaining to remuneration and other details as requiredunder Section 197(12) of the Companies Act 2013 read with rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) rules 2014 are attached as"Annexure V".
In terms of Section 197(12) of the Companies Act 2013 read with rule5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 a statement showing the names and other particulars of the employees drawingremuneration in excess of limits set out in said rules forms part of the annual report.
Considering the first proviso to section 136(1) of the Companies Act2013 the annual report excluding the aforesaid information is being sent to theshareholders of the company and other entitled thereto. The said information is availablefor inspection at the registered office of the Company during business hours on workingdays up to the date of the forthcoming 22nd Annual General Meeting. Any shareholdersinterested in obtaining a copy thereof may write to the Company Secretary in this regard.
Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo:
Information regarding Energy Conservation Technology Absorption andForeign Exchange Earnings and Outgo required to be disclosed under Section 134 of theCompanies Act
2013 read with Companies (Accounts) Rules 2014 is enclosed as an"Annexure VI" and forms part of the Report.
Your Company firmly believes that employees are the most valuableassets and key players of business success and sustained growth. Various employeebenefits recreational and team building programs are conducted to enhance employeeskills motivation as also to foster team spirit. Company also conducts in-house trainingprograms to develop leadership as well as technical/functional capabilities in order tomeet future talent requirements.
Industrial relation has been cordial and your directors appreciate thesincere and efficient services rendered by the employees at all levels towards thesuccessful working of the Company.
Your Directors wish to take this opportunity to thank the employees fortheir dedicated service and contribution to the Company. We also thank Bank of IndiaGovernment Agencies Business Associates Shareholders and Investors at large for theircontinued support towards conduct of efficient operations of the Company.
| ||By Order of the Board of Directors |
| ||Sd/- |
|Place: Hyderabad ||G. Ganesh Kumar |
|Date: 05th September 2020 ||Chairman &Managing Director |