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Your Directors have pleasure in presenting you the Twenty Fifth Annual Report together with Audited Financial Statements for the year ended 31st March, 2018.
FINANCIAL PERFORMANCE OFTHE COMPANY
(Rs in Lakhs)
|Particulars||For the year ended 31/03/2018||For the year ended 31/03/2017|
|Sales & Other Income||33.45||30.32|
|Profit/(Loss) before interest and Depreciation||2.20||1.28|
|Less: Finance Cost||0.86||0.47|
|Less: Depreciation and Amortisation expenses||1.04||1.29|
|Profit before Exceptional items& Taxes||0.30||(0.48)|
|Profit after Exceptional Items & Taxes||0.30||(0.48)|
|Less: Tax expenses||-||-|
|Profit / (Loss) after tax||0.30||(0.48)|
|Other Comprehensive Income / (Loss)|
|(Includes Revaluation Gain on Free Hold Land Rs. 65.19 Lakhs)|
|Total Comprehensive lncome/(Loss) attributable to the owners of the company||66.34||(0.74)|
|Closing Balance (Including Other Comprehensive Income) for the year||66.34||(0.74)|
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. 33.45 lakhs including Other Income and earned a Net Profit of Rs. 66.34 lakhs (Including Gain on Revaluation of Rs. 65.19 lakhs considered under Other Comprehensive Income). Company is awaiting the operating lease to get completed to consider the operations.
DIVIDEND AND RESERVES
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.
CHANGES AMONG DIRECTORS AND KEY MANAGERIAL PERSONNEL
Re-Appointment of Non-Executive Director in 24th Annual General Meeting
During the year Smt. Bommidala Anitha (DIN: 00112766), Nonexecutive Woman Director was re-appointed as Director in 24"Annual General Meeting.
Re-appointment of Independent Directors Sri Nellore Delendra Prasad and Sri Tunuguntla Rama Krishna
During the year the shareholders of the company re-appointed Sri Nellore Dolendra Prasad and Sri Tunuguntla Rama Krishna as Independent Directors of the company for second term with a tenure of 5 years, at their Annual General Meeting held on 06-09- 2017.
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), Nonexecutive 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.
Board and Committee Meetings
The Board met 4 times during the financial year 2017-18, 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:
In accordance with the provisions of Section 134 of the Act and of the SEBI (LODR) Regulations,2015 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.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF COMPANIES ACT, 2013.
During the financial year 2017-18, the Company has not given any guarantees/loan or made any investments. However during the year, the company has repaid an amount of Rs.5.00 Lakhs due as on 31st March, 2017, but received Rs.10.55 Lakhs interest free loan during the year,out of which Rs.5.30 Lakhs was repaid to Mr. Bommidala Rama Krishna, Managing Director, leaving a balance of Rs.5.25 lakhs payable as at 3181 March, 2018.
PARTICULARS OF EMPLOYEES:
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.
AUDITORS AND AUDITORS 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 06*September 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
EXPLANATION FOR AUDITORS EMPHASIS OF MATTER:
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.
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-lll to this Report. There were no qualifications, reservations or adverse remarks given by Secretarial Auditor except the following:
1. Noncompliance of section 203 of the Companies Act, 2013 and regulation 6 ofSEBI (LODR) Regulations 2015, in respect of nonappointment of the Company Secretary.
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 25.01.2016of such vacancy.
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 and we hope that the positions are to be filled in the near future.
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 atwww.bkvindustries.com
INTERNAL FINANCIAL CONTROLS:
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.com
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.
MANAGEMENT DISCUSSION AND ANALYSIS:
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).
EXTRACT OFTHE ANNUAL RETURN
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 for the Year 2017-18. 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 Culcutta Stock Exchange, no listing fees paid for 2017-18.
DIRECTORS RESPONSIBILITY STATEMENT:
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 31,2018, 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 fai r view of the state of affairs of the Company as at March 31,2018 and of the cash flows and profit 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.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:
As per requirement of The Sexual Harassment of Women at Workplace (Prevention, prohibition & Redresses) Act, 2013 and Rules made there under, your company has constituted internal Complaints Committee (ICC). During the year there was no complaints received underthis Act.
CHANGES INTHE NATURE OFTHE BUSINESS
There was no change in the nature of the business of the Company during the financial year ended 3181 March, 2018
DELISTING OF SHARES:
Companys Ordinary Equity shares are originally listed in the Stock Exchanges of Mumbai (BSE) and four other Stock Exchanges at New Delhi, Kolkata, Chennai and Hyderabad. The shares of the company are compulsorily traded in dematerialized form. The Board considered that continued listing on all stock exchanges was not necessary and therefore decided to de-list from Delhi, Kolkata & Chennai stock exchanges in pursuance of special resolutions passed in the 14th Annual General Meeting held on 28th September, 2007 & 2181 Annual General Meeting held on 13th September, 2014. However, the company was informed by Madras Stock Exchange Limited, Hyderabad Stock Exchange Limited, The Delhi Stock Exchange Association Limited that SEBI had de-recognized the above Stock Exchanges. The Kolkata Stock Exchange Limited is yet to notify to the company about derecognition by SEBI.
PERSONAL RELATIONS AND APPRECIATION:
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|
|BOMMIDALA RAMA KRISHNA|