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Grandeur Products Limited
The Directors have pleasure to presenting Directors Report along with the Audited Financial Statements for Financial Year ended 31st March, 2018.
1. FINANCIAL RESULTS
Your Companys Standalone and Consolidated performance during the Financial Year 2017-18 as compared with that of the previous Financial Year 2016-17 is summarized below: -
(Amount in Rs.)
|Profit before Taxation||(43,22,738)||70,650||(3,49,39,040)||-|
|Provision for Taxation||-||11,442||4,29,959||-|
|Profit After Tax||(32,10,300)||39,599||(3,25,91,389)||-|
2. PERFORMANCE REVIEW & COMPANYS STATE OF AFFAIRS:
Your Companys operations for the year ended 31st March, 2018 resulted in a net loss of Rs. 32.10 Lakhs due to the said uncertain market condition. The Company is in course to review new emerging opportunities for advancement of the Company.
During the year, Your Company has focused on key strategic thrusts to further strengthen its standing in the Indian Seed Sector and market development by acquisitions of businesses and products. As a significant part of its strategical decisio in August, 2017, your company has acquired 100% capital of Tierra Agrotech Private Limited (TAPL).
Further TAPL, has successfully accomplished two major acquisitions in cotton seed industry which are Xylem Seeds Private Limited, (100% owned by Dupont Pioneer USA) and branded Cotton Seed Business from Monsanto India (100% owned by Monsanto Inc, USA). With these acquisitions your Company is continuously focusing for entry into other seed businesses like corn, Hybrid rice and other potential seed businesses to capture market share in Indian seed business.
Your Company together with its subsidiaries has interests in commercializing superior products in major crops like Cotton, Rice, Corn, Pearl Millet, Mustard, Tomato and Pepper.
With the focused approach of growing profitable business, your directors are hopeful for the bright future of the company in the years to come.
Your Directors have not recommended any dividend for the Financial Year 2017-18.
During the year under review, no amount was transferred to Reserves.
5. SHARE CAPITAL:
As on 31st March, 2018, the paid up Capital of the Company was Rs. 12,61,19,600 (Rupees Twelve Crores Sixty-One Lakhs Nineteen Thousand and Six Hundred) divided into 1,26,11,960 (One Crore Twenty-Six Lakhs Eleven Thousand Nine Hundred and Sixty) Equity Shares of Rs. 10 (Rupees Ten only) each.
6. ISSUE OF DEBENTURES:
During the year Company issued and allotted 5,00,000, 6% Fully Secured Unlisted Redeemable NonConvertible Debentures of Rs. 100 each aggregating to Rs. 5.00 Crores under private placement basis.
7. ACQUISTIONS DURING THE YEAR:
During the year under review your Company was focused in the activities of acquisitions of seed Business and forming joint ventures which are involved in the seed research and development of disruptive technologies and products that may provide significant yield and cost advantages to farmers.
7.1. Acquisition of Tierra Agrotech Private Limited (TAPL):
In the year 2017, with the objective to establish itself in the Seed Industry, Grandeur Products Limited (GPL) has acquired Tierra Agrotech Private Limited (TAPL) which is incorporated in the year 2013 as a technology focus agriculture company. It is engaged in the business of Sales, Marketing and Distribution of Seeds.
TAPL is currently one of the germplasm enriched company in the whole country, particularly in cotton after the two major acquisitions in cotton seed industry:
1. Monsanto India (100% owned by Monsanto Inc , USA) Cotton Branded Seed Business.
2. Xylem Seeds Private Limited, (100% owned by Dupont Pioneer USA)
7.2. Acquisition of Branded cotton seed business of Monsanto:
In January 2018, TAPL has completed the acquisition of the branded cotton seed business from Monsantos Indian arm Monsanto Holdings Private Limited with a view to scale up its breeding and research programme by integrating the branded cotton seed business and strategically investing to deliver high-yielding cotton hybrids. This acquisition has supplemented the potential by fetching the notable brands like "Deltapine", "DPL", "Paras" and others which provide higher yields for farmers resulting in higher productivity and income.
7.3. Acquisition of Xylem Seeds Private Limited
TAPL has acquired 100% paid up Capital of Xylem Seeds Private Limited, (100% owned by Dupont Pioneer USA) in March, 2018. Xylem Seeds Private Limited (Originally called as M/s. Nandi Seed Private Limited) established in 1996 was actively engaged in high quality research to develop, cultivate and supply best quality hybrid seeds of Cotton and Bt. Cotton. It developed the best crop management practices and provided Agronomic support and services to help the farmers to increase their crop productivity and profitability through education and training on the scientific methods.
With the above two acquisitions TAPLs overall market share in the hybrid cotton seed business in the country will rise to 6%.
Our Company targets to scale up its breeding and research programme by integrating the acquired business to deliver high-yielding cotton hybrids and your company is in constantly thriving to enter into other seed businesses.
8. CHANGE IN THE NATURE OF BUSINESS, IF ANY
There has been no change in the nature of business of your Company during the Financial Year (F.Y.) 2017-18.
9. DIRECTORS & KEY MANAGERIAL PERSONNEL
The Board of Directors of your Company presently comprises of the following Directors:
|Name of the Director||Designation|
|Vijay Kumar Deekonda||Chairman and Whole Time Director|
|Munnangi Jayaramaprasad||Non-Executive Director|
|Majeti Venkatasesha Sridhar Kumar||Independent Director|
|Sridevi Dasari||Independent Director|
|Ramesh Babu Nemani||Independent Director|
At the 34th Annual General Meeting (AGM) of the Company held on 27th September, 2017 following mentioned re-appointments were approved by the members of the Company:
a. Mr. Munnangi Jayaramaprasad who then retired by rotation, being eligible, was re-appointed as "Director" of the Company.
b. Mr. Vijay Kumar Deekonda has been reappointed as Chairman and Whole-Time Director of the company for a further period of Three years with effect from 1st October 2017.
Director(s) retiring by rotation:
In accordance with the provisions of Section 152 of the Companies Act, 2013 Mr. Munnangi Jayaram Prasad (DIN 03034183) retires by rotation at the ensuring Annual General Meeting and being eligible, offers himself for re-appointment. The Board recommends his re-appointment.
Appointment of Mr. Ramesh Babu Nemani:
After the financial year 2017-18, the Board of Directors at their meeting held on 5th April, 2018, had appointed Mr. Ramesh Babu Nemani as an Additional (Independent) Director of the Company after resignation of Mr. Poppoppu Lenin Babu from the directorship of the Company w.e.f. 5th April, 2018. As an Additional director Mr. Ramesh Babu Nemani shall hold office till the 35th Annual General Meeting.
Appropriate resolution for the appointment of Mr. Ramesh Babu Nemani of the as an Independent Director of the Company is being placed for the approval of the members of the Company at the 35th Annual General Meeting for a period of 5 (five) years from the date of his appointment. The Board of Directors of the Company recommend his appointment as an Independent Director of the Company
The details of Directors being recommended for appointment/ re-appointment as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard 2 issued by Institute of Company Secretaries of India are contained in the accompanying Notice convening the ensuing 35th Annual General Meeting of the Company.
9.2. KEY MANAGERIAL PERSONNEL
The following are the Key Managerial Personnel (KMP) of the Company pursuant to the provisions of Section 203 of the Companies Act, 2013, throughout the Financial Year 2017-18: -
1. Mr. Vijay Kumar Deekonda- Whole Time Director and Chief Financial Officer
2. Ms. Priyanka Kumari - Company Secretary and Compliance Officer
10. BOARD COMMITTEES
The three committees of the Board are Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee. The Committees of the Board focus on certain specific areas and make informed decisions in line with the delegated authority. Details of composition, terms of reference, number and dates of meetings held for respective committees are given in the Report on Corporate Governance attached to this Report.
11. NOMINATION AND REMUNERATION POLICY
On the recommendation of the Nomination and Remuneration Committee, the Board has adopted and framed a Remuneration Policy for the Directors, Key Managerial Personnel and other employees pursuant to the provisions of the Companies Act, 2013 and SEBI Listing Regulations. The remuneration paid to Directors, Key Managerial Personnel and all other employees is in accordance with the Remuneration Policy of the Company. The Nomination and Remuneration Policy and other matters provided in Section 178(3) of the Act and Regulation 19 of SEBI Listing Regulations have been disclosed in the Corporate Governance Report, which forms part of this Report.
12. DECLARATION BY INDEPENDENT DIRECTOR(S) AND RE-APPOINTMENT, IF ANY:
In accordance with section 149(7) of the Companies Act, 2013, each independent director has confirmed to the company that he or she meets the criteria of independence laid down in section 149(6) of the Companies Act, 2013 and regulation 16(1)(b) of the Listing Regulations.
13. MEETINGS OF THE BOARD OF DIRECTORS DURING THE FINANCIAL YEAR 2017-18:
During the financial year 2017-18, the Board of Directors of the Company, met 7 (Seven) times on 30th May, 2017, 24th August, 2017, 2nd September, 2017, 14th September, 2017, 22nd November, 2017, 14th December, 2017 and 13th February, 2018.
The maximum gap between two Board Meetings did not exceed 120 (one hundred twenty) days.
14. EMPLOYEE STOCK OPTION PLAN/ SCHEME AND EMPLOYEE STOCK PURCHASE SCHEME:
The Company has in place 2 (Two) employee benefit plans, namely, Grandeur Employee Stock Option Scheme II, 2016(GPLESOS II, 2016) and the Grandeur Employees Stock Purchase Scheme 2017" ("GPL-ESPS 2017").
The above schemes/plans are in compliance with the SEBI Regulations. During the year under review, no changes were made in the above said schemes. Details regarding the above mentioned schemes along with their status are annexed as "Annexure- A" and forms part of this report.
Further certificate from Statutory Auditors, with respect to implementation of the above Employees Stock Option Schemes in accordance with SEBI Guidelines and the resolution passed by the Members of the Company, would be placed before the Members at the ensuing AGM.
15. BOARD EVALUATION:
Pursuant to the provisions of the Companies Act, 2013 read with the Rules issued thereunder, Regulation 17(10) of the Listing Regulations and the circular issued by SEBI dated 5th January, 2017 with respect to Guidance Note on Board Evaluation, the evaluation of the annual performance of the Directors/Board/ Committees was carried out for the financial year 2017-18. The details of the evaluation process are set out in the Corporate Governance Report which forms a part of this report.
16. STATUTORY AUDITORS:
The members of the company at their Annual General Meeting held on 19th June 2014 approved the appointment of M/s Ramasamy Koteswara Rao and Co LLP Chartered Accountants, (Firm Registration Number 010396S) as the Statutory Auditors of the Company till the conclusion of 36th Annual General Meeting of the Company to be held in calendar year 2019.
The Audit Report issued by the Statutory Auditors for the financial year ended 31st March, 2018 forms part of this Report. There are no qualifications, reservations or adverse remarks made by the Statutory Auditors which requires explanation or comments from the Board.
17. SECRETARIAL AUDITORS:
The Secretarial Auditor of the Company has conducted the Secretarial Audit for the Financial Year 201718, pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rule 9 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014. The Secretarial Audit Report submitted by the Secretarial Auditor is annexed as "Annexure -B" and forms part of this report.
The Secretarial Audit Report for the Financial Year ended 31st March, 2018 does not contain any qualification or reservation or adverse remark.
18. MAINTENANCE OF COST RECORDS:
The maintenance of Cost records as specified by the central government under sub-section (1) of section 148 of the Companies act, 2013, is not applicable on our Company.
19. SUBSIDIARIES, ASSOCIATES AND JOINT VENTUREs:
19.1. subsidiary Companies:
Your Company has the following subsidiaries [as defined under Section 2(87) of the Companies Act, 2013] during the Financial Year 2017-18: -
a. Tierra Agrotech Private Limited: In August, 2017, Your company has acquired 100% paid up capital of Tierra Agrotech Private Limited.
b. Xylem Seeds Private Limited: In March, 2018, Xylem Seeds Private Limited became step down subsidiary of your Company after acquisition of 100% of paid up capital by Tierra Agrotech Private Limited.
19.2. Associates and Joint Ventures:
The Company does not have any Associates or Joint Venture Companies in the Financial Year 2017-18. However, TAPL, Wholly Owned Subsidiary of the Company has entered in to a Joint Venture agreement in July, 2017 with IDEN Biotechnology S.L. a Spanish Limited Liability Company organized under the laws of Spain, with its head office located at Cordovilla (Navarra) Spain. Pursuant to the Joint Venture Agreement, a Joint venture company named TIDAS Agrotech Private Limited was incorporated under the laws of Companies Act, 2013 on 9th August, 2017 situated at Hyderabad.
Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing the salient features of the financial statements of our Subsidiaries in the Form AOC-1 is annexed and forms part of the Financial Statement. The statement provides the details of performance and financial position of each of the Subsidiaries. In accordance with Section 136 of the Companies Act, 2013, the Audited Financial Statements, including the consolidated financial statements, audited accounts of all the subsidiaries and other documents attached thereto are available on our website: www.grandeurproducts.com.
20. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
As required to be reported pursuant to the provisions of Section 186 and Section 134(3)(g) of the Companies Act, 2013, the particulars of loans, guarantees or investments by the Company under the aforesaid provisions during the Financial Year (F.Y.) 2017-18 have been provided in the Notes to the Standalone Financial Statement.
21. RELATED PARTY TRANSACTIONS:
During the Financial Year 2017-18, there are no material significant Related Party Transactions entered into by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company. Attention of Shareholders is also drawn to the disclosure of transactions with related parties set out in Note No. 1.3 of the Standalone Financial Statements, forming part of the Annual Report. None of the Directors have any pecuniary relationships or transactions vis-a-vis the Company. The information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 a is annexed as "Annexure-C" in Form No. AOC-2 and forms part of this report.
During the year under review, the Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).
23. DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:
The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder. The Company has also constituted an Internal Complaints Committee to address complaints of sexual harassment and to take appropriate action. The Company has not received any complaint on sexual harassment during the year.
24. CORPORATE SOCIAL RESPONSIBILITY (CSR):
The provisions of Section 135 of the Companies Act, 2013 read with applicable rules related to Corporate Social Responsibility is not applicable to Company for the Financial Year 2017-18.
25. VIGIL MECHANISM/WHISTLE BLOWER POLICY:
The Board of Directors has adopted the Whistle Blower Policy, which is in compliance with Section 177(10) Companies Act, 2013 and Regulation 22 of the SEBI (LODR) Regulations 2015 to report genuine concerns or grievances.
The Whistle Blower Policy has been posted on the website of the company at www.grandeurproducts. com.
26. RISK MANAGEMENT:
The Risk Management is overseen by the Audit Committee of the Company on a continuous basis. The Committee oversees Companys process and policies for determining risk tolerance and review managements measurement and comparison of overall risk tolerance to established levels. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuous basis.
27. DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to the requirement of Section 134(3)(c) and 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that:
i. in the preparation of the annual accounts for the Financial Year 2017-18, the applicable accounting standards have been followed and there are no material departures;
ii. they 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 at the end of the financial year and of the profit of the Company for the financial year;
iii. they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. they have prepared the annual accounts for the Financial Year 2017-18 on a going concern basis;
v. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating properly; and
vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
28. REPORTING OF FRAUDs:
There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and/or Board under Section 143(12) of the Act and the rules made thereunder.
29. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:
The Information on conservation of energy, technology absorption, foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is annexed as Annexure-D and forms part of this report.
30. EXTRACT OF ANNUAL RETURN:
Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the extract of the Annual Return in Form MGT-9 is annexed herewith as Annexure-E and forms part of this report.
31. MANAGEMENT DISCUSSION & ANALYSIS:
Managements Discussion and analysis Report for the year under review, as stipulated under Regulation 34(2)(e) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section forming part of the Annual Report.
32. CORPORATE GOVERNANCE:
Your Company is in compliance with all the applicable provisions of Corporate Governance as stipulated under Chapter IV of the Listing Regulations. A detailed report on Corporate Governance as required under the Listing Regulations is provided in a separate section and forms part of the Annual Report.
M/s. Ramasamy Koteswara Rao and Co LLP Chartered Accountants, Hyderabad, have certified the Companys compliance of the requirements of Corporate Governance in terms of Regulation 34 of the Listing Regulations and their Compliance Certificate is annexed to the Report on Corporate Governance.
33. HUMAN RESOURCES:
The Companys HR policies and procedures are designed to recruit and retain the best talent to support the operations of your Company and to align the interest of employees with the long term organisational goals.
34. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
During the Financial Year 2017-18, there were no instances of significant and material orders passed by the regulators or Courts or Tribunals which can adversely impact the going concern status of the Company and its operations in future.
35. MANAGERIAL REMUNERATION & REMUNERATION PARTICULARS OF EMPLOYEES:
The remuneration paid to Directors and Key Managerial Personnel and the employees of the Company during the Financial Year 2017-18 was in accordance with the Nomination and Remuneration Policy of the Company. Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of the Companies Act, 2013 and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been appended as "Annexure - F" and forms part of this report.
36. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY AFTER 31ST MARCH 2018:
36.1. After the Closing of the financial year 2017-18, following material changes took place effecting the financial position of the Company:
Changes in Capital of the Company:
a. The Members of the Company at the Extra Ordinary General Meeting held on 5th May, 2018 given approval for the following resolution:
i. Increase in Authorised Share Capital of the Company from Rs. 20.00 Crores to Rs. 25.00 Crores.
ii. Issue of 67,00,000 Equity Shares on preferential basis at the price of Rs. 40 each (including premium of Rs. 30 each) to the non-promoter group.
b. Allotment of Shares
The Board of Directors of the Company has made the following allotments after the closing of financial year 2017-18:
i. Allotment of 67,00,000 Equity Shares at the price of Rs. 40 each (including premium of Rs. 30 each) on preferential basis to the non-promoter group Pursuant to Members approval and
ii. Allotment of 30,00,000 Equity Shares at the price of Rs. 20 each (including premium of Rs. 10 each) pursuant to the conversion of 6,00,000 6% Compulsorily Convertible Debentures of Rs.100 each.
Accordingly, post allotment of above equity shares the paid up capital of the Company has increased to Rs. 22,31,19,600 (Rupees Twenty Two Crores Thirty One Lakhs Nineteen Thousand and Six hundred Only) comprising of 2,23,11,960 (Two Crores Twenty Three Lakhs Eleven Thousand Nine Hundred and Sixty) Equity Shares of Rs. 10 each.
36.2. There have been no commitments affecting the financial position of your Company which have occurred between after the financial year 31st March, 2018.
37. CAUTIONARY STATEMENT:
Statements in the Directors Report and the Management Discussion and Analysis Report describing the Companys objectives, projections, expectations, estimates or forecasts may be forward-looking within the meaning of applicable laws and regulations. Actual results may differ substantially or materially from those expressed or implied therein due to risks and uncertainties. Important factors that could influence the Companys operations, inter alia, include input availability and prices, changes in government regulations, tax laws, economic, political developments within the country and other factors such as litigations and industrial relations.
Your Directors place on record their sincere appreciation for the dedication, hard work and commitment of the employees at all levels and their significant contribution to your Companys growth.
Your Directors thank the Banks, Financial Institutions, Government Departments and Shareholders and look forward to having the same support in all our future endeavors.
|For and on behalf of the Board of Directors|
|Vijay Kumar Deekonda|
|Chairman & Whole Time Director|
|Date: 5th September, 2018|