BKV Industries Ltd Directors Report.

Your Directors have pleasure in presenting you the Twenty Sixth Annual Report together with Audited Financial Statements for the year ended 31st March, 2019 .


(Rs. In Lakhs)
Particulars For the year ended 31/03/2019 For the year ended 31/03/2018
Sales & Other Income 33.42 33.45
Profit/(Loss) before interest and Depreciation (21.72) 2.20
Less: Finance Cost 0.39 0.86
Less: Depreciation and Amortisation expenses 0.85 1.04
Profit before Exceptional items& Taxes (22.96) 0.30
Exceptional Items - -
Profit after Exceptional Items & Taxes (22.96) 0.30
Less: Tax expenses - -
Profit / (Loss) after tax (22.96) 0.30
Other Comprehensive Income / (Loss) (Includes Revaluation Gain on Free Hold Land Rs. 65.19 Lakhs) (0.63) 66.04
Total Comprehensive Income/(Loss) attributable to the owners of the company (23.59) 66.34
Less: Appropriations - -
Closing Balance (Including Other Comprehensive Income) for the year (23.59) 66.34

RESULTS OF OPERATIONS AND STATE OF COMPANY AFFAIRS: The Aqua Farm situated at Isakapalli was given on lease during July, 2013 for seven years. Operating in volatile and uncertain environment at that time, the company had given the farm on long term lease, earned a gross income of Rs. 33.42 lakhs including Income, Other Income and incurred a Net Loss of Rs. 23.59 lakhs (Including income considered under Other Comprehensive Income/(Loss)). Company is awaiting the operating lease to get completed to consider carrying on the operations.


In view of considerable accumulated losses and marginal income no dividend is declared and not transferred any amount to reserves.


The company does not have any subsidiary.

PARTICULARS REGARDING ENERGY CONSERVATION etc.: The information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo pursuant to Section 134(3) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is given in Annexure V to this Report.


Re-Appointment of Non-Executive Director in 26th Annual General Meeting. During the year Smt. Bommidala Anitha (DIN: 00112766), Non-executive Woman Director was re-appointed as Director in 25thAnnual General Meeting.

Retire by Rotation

In accordance with the provisions of Section 152 of the Companies Act, 2013 read with the Articles of Association of the Company, Smt. Bommidala Anitha (DIN: 00112766), Non-executive Woman Director liable to retire by rotation at the forthcoming Annual General Meeting and being eligible, offers herself for re-appointment as Director. The Board recommends her appointment. A brief resume of her and other relevant information have been furnished in the notice convening the AGM.

During the year Mr. Virat Vishnu has been appointed as a Company Secretary and Compliance Officer with effect from 1.10.2018.

During the year Mr. K. Bhanu Kumar has been appointed as a Chief Financial Officer with effect from 20.9.2018.

Board and Committee Meetings

The Board met 7 times during the financial year 2018-19, the details of which are given in the Corporate Governance Report.

Committees of the Board

The details of all the Committees along with their composition, terms of reference and meetings held during the year are provided in the "Report on Corporate Governance" forming part of this Annual Report.

Board evaluation of its own performance:

The Board has carried out an evaluation of its own performance, the performance of Committees of the Board, namely, Audit Committee, Risk Management Committee, Stakeholders Relationship Committee and Nomination and Remuneration Committee and also the directors individually. The manner in which the evaluation was carried out and the process adopted has been mentioned in the Corporate Governance Report.

Policy for selection and appointment of Directors, Senior Management and their remuneration: The Board, on the recommendation of the Nomination & Remuneration Committee, has framed a policy for selection and appointment of Directors, Senior Management and their remuneration and also framed the criteria for determining experience, qualifications, positive attributes and independence of directors.

Declaration Given by Independent Directors:

All the Independent Directors viz., Sri Tunuguntla Rama Krishna (DIN:02324865) and Sri Nellore Dolendra Prasad (DIN:01816366) have submitted declarations confirming that they continued to meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.


During the financial year 2018-19, the Company has not given any guarantees/loan or made any investments. However during the year, the company has repaid an amount of Rs. 5.25 Lakhs due as on 31st March, 2018, but received Rs. 32.45 Lakhs interest free loan during the year, out of which Rs. 4.25 Lakhs was repaid to Mr. Bommidala Rama Krishna, Managing Director, leaving a balance of Rs. 27.95 lakhs payable as at 31st March, 2019.


The information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure VII to the Board of Directors report.


M/s. Kurapati Subba Rao & Co., Chartered Accountants (Firm Regn.No:001618S) was appointed as Statutory Auditors of your Company at the Annual General Meeting held on 06thSeptember 2017, for a term of five consecutive years. As per the provisions of Section 139 of the Companies Act, 2013, the appointment of Auditors is required to be ratified by Members at every Annual General Meeting. But in accordance with the Companies Amendment Act, 2017, enforced on 7th May, 2018 by the Ministry of Corporate Affairs, the appointment of Statutory Auditors is not required to be ratified at every Annual General Meeting. The Report given by the Auditors on the financial statement of the Company is part of this Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report. Fraud reported by the Auditor under Section 143(12): Nil


Regarding the preparation of accounts ongoing concern basis, the notes in Independent audit report is self-explanatory and the company had given the farm on long term lease and got steady income and been able to meet its operational expenses.

Maintenance of Cost Records - Not Applicable
Cost of Audit - Not Applicable


Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s K. Srinivasa Rao & Co, Company Secretaries, as the Secretarial Auditors to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is given in Annexure-III to this Report. There were no qualifications, reservations or adverse remarks given by Secretarial Auditor.

There were no qualifications, reservations or adverse remarks given by Secretarial Auditors except the following:

1. Noncompliance of section 203 of the Companies Act, 2013 and regulation 6 of SEBI (LODR) Regulations 2015, in respect of non-appointment of the Company Secretary for a period up to 30.09.2018.

2. Noncompliance of section 203 regarding non-appointment of CFO by the board with in a period of six months from the date i.e 25.01.2016 of such vacancy for a period up to 19.09.2018.

Board Clarification on Secretarial Auditor qualifications: The Board has made utmost effort from time to time, for appointment of the Company Secretary & Chief Financial Officer, as KMPs but not able to appoint them due to lack of suitable Candidates to the profile of the Company in terms of work location, job profile and remuneration . During the year the company has appointed Company Secretary with effect from 01.10.2018 and the company has appointed a chief financial officer with effect from 20.09.2018.


The Company has put in place a mechanism to identify, assess, monitor and mitigate various risks to its key business objectives. Major risks identified by the business and functions are systematically addressed through mitigating actions on a continuing basis. The Company has formulated a Risk Management Policy which is also available on the Companys website at www.bkvindustries.in


The Company has adequate Internal Financial Controls with proper checks to ensure that transactions are properly authorized, recorded and reported apart from safeguarding its assets. These systems are reviewed and improved on a regular basis. It has a comprehensive budgetary control system to monitor revenue and expenditure against approved budget on an ongoing basis. The internal auditors of the Company review the controls across the key processes and submits reports periodically to the Management and significant observations are also presented to the Audit Committee for review. Follow up mechanism is in place to monitor the implementation of the various recommendations.

CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES: Section 135 of the Companies Act, 2013 provides the threshold limit for applicability of the CSR to a Company i.e. (a) net worth of the Company to be 500 crore or more; or (b) turnover of the company to be 1,000 crore or more; or (c) net profit of the company to be 5 crore or more. As the Company does not fall under any of the threshold limits given above, the provisions of Section 135 are not applicable to the Company.


All contracts/arrangements/transactions entered into during the financial year with the related parties were on arms length basis and were in the ordinary course of business. Section 188(1) of the Companies Act, 2013 exempts related party transactions that are in the ordinary course of business and are on arms length basis. The Board of Directors and the Audit Committee have also approved the said related party transactions.

There are no materially significant related party transactions with the promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. The policy on dealing with Related Party Transactions as approved by the Board is available at the investors section of the Companys website at www.bkvindustries.in

The particulars of contracts/arrangements entered into by the Company with related parties as required to be disclosed are given in AOC-2 as Annexure IV to this Report.


During the year your company followed best corporate governance practices and the same will also be continued in forthcoming years.


The Management Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of the SEBI (LODR) 2015, Regulations, given in Corporate Governance Report, which is the part of this Annual Report.

TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND: The company has not declared any dividend till date from inception therefore there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF).


The details of the extract of the Annual Return in Form MGT-9 are given in Annexure- VI to this Report.


Vigil Mechanism & Whistle Blower Policy

The Company has a vigil mechanism and a whistle blower policy. The same has been posted on the Companys website and the details of the same are given in the Corporate Governance Report.


As per the requirement of SEBI Listing Regulations, the Company declares that its securities are listed on the Stock Exchanges of Mumbai& Kolkata. The company confirms that it has paid annual listing fees to the Stock Exchange of Mumbai & Kolkata for the Year 2018-19. However, in the case of Kolkata Stock Exchange, the shares are listed under "suspension" without any intimation to the Company, though company had sent all the resolutions for delisting in 2007 & 2014, and in view of clarification to be received from Calcutta Stock Exchange.


Pursuant to the provisions contained in Section 134(3) of the Companies Act, 2013, your Directors to the best of their knowledge and belief and according to information and explanations obtained from the management, confirm that:

i) In the preparation of the annual accounts for the financial year ended March 31, 2019, the applicable accounting standards have been followed and there are no material departures from the same.

ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2019 and of the cash flows and loss of the Company for the year ended on that date;

iii) The Directors have 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 have prepared the Annual Accounts on a going concern basis.

v) The Directors have laid down proper internal financial controls to be followed by the Company relevant to its nature of operations and such controls are adequate and operating effectively.

vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.


Your Directors state that no disclosure is required in respect of the following items as there were no transactions on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Companies Act, 2013.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

4. No orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and the Companys operations in future.

Material Changes and commitments, if any, affecting the Financial position of the company which has occurred between the end of the Financial year of the company to which the Financial statements relate and the date of the report:

No Material Changes and commitments affecting the financial position of the company occurred for a period which the financial statements relate and the date of the report.


During the year 2018-19, The Company has received the following loans from the following Directors.

S.No Name of the Director Amount Received during the year (Net)
1 Bommidala Rama Krishna 27,95,000.00


The Directors have devised proper systems and processes for complying with the requirements of applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems were adequate and operating effectively.


Your directors confirm that the Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up Committee for implementation of said policy. Your directors confirmed that the Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.During the year Company has not received any complaint of harassment.


There was no change in the nature of the business of the Company during the financial year ended 31st March, 2019.


The Directors gratefully acknowledge all stakeholders of the Company viz., lessee, members, employees, stock exchanges and banks for their support during the year. Your directors hereby place on record their appreciation for the services rendered by the staff of the Company for their hard work, dedication and commitment.

By order of the Board of Directors
For BKV Industries Limited
Place: Guntur Managing Director
Date: 29.05.2019 DIN: 00105030


1. Preamble

This Remuneration Policy provides the framework for remuneration of members of the Board of Directors, Key Managerial Personnel and other employees of the Company. This Policy is guided by the principles and objectives as enumerated in Section 178 of the Companies Act, 2013 to ensure reasonableness and sufficiency of remuneration to attract, retain and motivate competent resources, a clear relationship of remuneration to performance and a balance between rewarding short and long-term performance of the Company. This policy reflects the remuneration philosophy and principles of the company and considers the pay and employment conditions with peers/competitive market to ensure that pay structures are appropriately aligned.

2. Remuneration of Non-Executive Directors

As the company had earlier incurred substantial losses and do not have any operations other than the lease Income, no remuneration or sitting fees is paid to the Non-Executive Directors ("NEDs").

Once, the company is able to turn around and substantial losses are recovered, the company wants to pay the sitting fee to the NEDs for attending the Board after Committee meetings. The remuneration will be fixed subject to the statutory ceiling and the fee will be reviewed periodically and aligned to comparable best in class companies.

3. Remuneration of Managing Director

The compensation paid to the Managing Director is within the scale approved by the Shareholders. The elements of the total compensation are approved by the N&R Committee within the overall limits specified under the Companies Act, 2013.

The elements of compensation of the Managing Director are described below: As the company do not have adequacy of profit in any financial year, the remuneration payable to the Managing Director shall be subject to the relevant provisions of the Companies Act, 2013 and the same is paid within the limit specified. Remuneration includes Salary, Perquisites not exceeding the salary amount per annum viz. Medical Expenses, Leave Travel Assistance, Club Fees and Personal Accident Insurance Charges. Further, transport charges, telephone expenses, provident fund, superannuation fund and encashment of leave (if applicable to the company) are provided or reimbursed on actual basis. During the year, Managing Director is reappointed for five years and the remuneration is increased from Rs.4.20 Lakhs to Rs.6.00 Lakhs per annum. The increase is considered for the part of the period and provision is made accordingly.

4. Remuneration to Key Managerial Personnel/Other Employees

The Companys total compensation for Key Managerial Personnel/other employees consists of fixed compensation as the company incurred substantial losses and only fixed income from the farm lease.

Fixed compensation is determined on the basis of size and scope of the job typically as reflected by the level or grade of the job, trends in the market value of the job and the skills, experience and performance of the employee. Fixed compensation includes Basic Salary, Housing Allowance, Leave Travel Allowance and a cash allowance.

Overall compensation shall be subject to periodic reviews which takes into account factors such as affordability based on the Companys performance and the economic environment.

5. Adoption, Changes and Disclosure of Information

This Remuneration Policy and any changes thereof are approved by the Board of Directors based on the recommendation(s) of the HR, N&R Committee. The policy may be reviewed at such intervals as the Board or the Committee may deem necessary. Such disclosures of this Remuneration Policy as may be required under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

Annexure - II

Criteria for Board Nominations

The Nomination and Remuneration Committee (N & R Committee) of the Board is responsible for identifying persons for initial nomination as directors and evaluating incumbent directors for their continued service. The following are the qualifications, positive attributes and independence criteria laid down by the Committee of BKV Industries Ltd. in terms of section 178(3) of the Companies Act, 2013 to be considered for nominating candidates for Board positions/re-appointment of directors.


Personal Traits

Highest personal and professional ethics, integrity and values

Shares the values and beliefs of the Company.

Inquisitive and objective perspective, practical wisdom and mature judgment

Demonstrates intelligence, maturity, wisdom and independent judgment

Self-confidence to contribute to board deliberations has a stature that other board members will respect his or her views.

Experience and Background

Well accomplished in his / her respective field. Demonstrated success at policy-setting and strategy development levels in a large organization (such as corporation, government, academic institution or profession).

Leadership role- at the time a potential directors initial candidacy is evaluated must either be current or very fresh and recent, and incumbent directors should continue to demonstrate a sophisticated understanding and current knowledge of business issues.

Absence of adverse events (e.g., bankruptcy affiliations, securities law sanctions, disqualifications under Companies Act 2013 or other applicable laws etc.) that either disqualify or require adverse disclosures.

Fit and proper

With respect to Directors being nominated for Independent position, the candidate should comply with the "Independence qualifications" as defined by applicable laws.

Willingness to devote sufficient time to carry out the duties and responsibilities effectively, including attendance at meetings.

Commitment to representing the long-term interests of the shareholders and balancing the interests of stakeholders.

Adhere to the code of conduct of the Company.

Absence of unfair obstruction in the functioning of the Board/Committees.


The positive attributes for a director would encompass:

Ethical Integrity & transparency.

He/ She acquires sufficient knowledge in the Companys business and operations.

Demonstrate sound judgment gained through experience & expertise in management/ technical/ financial governance or regulatory matters.

Foresight - ability to see and prepare for future, anticipate needs, opportunities and threats.

Managerial abilities required to lead and guide the management such as effective communication skills, cultural sensitivity, flexibility, team player, strategic thinking, and balancing risk with opportunity, ability to juggle several variables and make complicated decisions etc.


A Director is independent if the Board affirmatively determines that he meets the Independence criteria provided under the applicable laws. In addition to applying these guidelines, the Board will consider all relevant facts and circumstances in making its determination relating to a directors independence.

Two core objectives in selecting board members and continued board service are that the skills, experiences and perspectives of the Board as a whole should be broad and diverse, and the collective talent should blend together to be as effective as possible.

Annexure - IV FORM NO. AOC-2 Related Party Transactions

[Pursuant to Clause (h) of sub-section (3) of Section 134 of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014

Form for disclosure of particulars of contracts/ arrangements entered into by the Company with the related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 including certain arms-length transactions under third proviso thereto.

1. Details of contracts or arrangements or transactions not at arms length basis: There were no transactions with related parties, which were not at arms length basis.

2. Details of material contracts or arrangements or transactions at arms length basis: Remuneration to the Managing Director and Key Managerial Personnel, Interest Free Unsecured Loans have been extended by the Managing Director to the company are the only related party transactions entered during the year by the company, which are in the nature of ordinary course of business and not material transactions.

For BKV Industries Limited
Managing Director Director
DIN:00105030 DIN:00112766
Place: Guntur
Date: 29.05.2019

Annexure V

Information to be given under Section 134 read with Rule 8(3) of the Companies (Accounts) Rules, 2014


i The steps taken or impact on conservation of energy Not Applicable
ii The steps taken by the Company for utilizing alternate sources of energy Not Applicable
iii The capital investment on energy conservation equipment NIL, Not Applicable


i The efforts made towards technology absorption Not Applicable
ii The benefits derived like product improvement, cost reduction, product Development or import substitution Not Applicable
iii In case of imported technology (imported during the last three years reckoned from the Beginning of the financial year) Not Applicable
(a)The details of technology imported
(b) The year of import
(c) Whether the technology been fully absorbed
(d) If not fully absorbed, areas where absorption
iv The expenditure incurred on Research and Development NIL, Not Applicable


The foreign exchange earned in terms of actual inflows during the year and the Foreign exchange outgo during the year in terms of actual outflows. 2018-19 2017-18
in Rs. in Rs.
Foreign exchange earned NIL NIL
Foreign exchange outgo NIL NIL

Annexure VII

The information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Pe rsonnel) Rules, 2014

A. Information as per Rule 5(1) of the Companies (Appointment & Remuneration of Mana gerial Personnel) Rules 2014:

1. Ratio of Remuneration of each Director to the median remuneration of the employees of the Company for the financial year:

Sl. No. Particulars Median Ratio with that of employees
1 Bommidala Rama Krishna, Managing Director 2.13:1
2 Bommidala Anitha, Director Nil
3 Nellore Dolendra Prasad, Director Nil
4 Tunuguntla Rama Krishna, Director Nil

As there is no Sitting Fees paid to Non Executive Directors, it has been shown as NIL

2. Percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, if any, in the financial year:

Sl. No. Particulars % Increase in Remuneration
1 Bommidala Rama Krishna, Managing Director 0.02%*
2 Bommidala Anitha, Director NA
3 Nellore Dolendra Prasad, Director NA
4 Tunuguntla Rama Krishna, Director NA
5 B.Virat Vishnu (CS) NA**
6 K. Bhanu Kumar (CFO) NA**

* Increase in part of March, 19

** Appointed during the year.

3. Percentage increase in the median remuneration of employees in the financial year: 24.62%

4. Number of permanent employees on the rolls of company: 5 Nos.

5. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration: The average increase/(Decrease) in salaries of employees other than managerial personnel is 24.62%.

There was no increase in the managerial remuneration during the year.

6. Key parameters for any variable component of remuneration availed by the directors: The Non-executive Directors are not paid any remuneration, as the company had been having fixed income and only marginal profit is earned. Managing Directors remuneration was fixed at Rs.6.00 lakhs per annum (revised from Rs.4.20 Lakhs during March, 19), in view of no profits or profits inadequate, subject to the limits laid down by the Companies Act, 2013 and overall remuneration approved by the Shareholders. No variable component is there in the remuneration payable to the Managing Director.

7. Ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year: None

8. Affirmation that the remuneration is as per the remuneration policy of the Company:

The Company affirms that the remuneration is as per the Remuneration Policy of the Company.

A (1) Information as per Rule 5(2) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules 2014: There were no employees covered under these rules.

By order of the Board of Directors
Place: Guntur Managing Director
Date: 29.05.2019 DIN: 00105030