Nagarjuna Agri Tech Ltd Directors Report.

To the Members,

Nagarjuna Agri-Tech Limited,

Hyderabad, Telangana, India

The Board of Directors hereby submits the report of the business and operations of your Company (the Company) along with the audited "Financial statement for the "Fiscal Year ended March 31, 2019.

1. Financial summary/highlights:

The performance during the period ended 31st March, 2019 has been as under:

(Amount In Rs.)
Particulars 2018-19 2017-18
Turnover/Income (Gross) 3,05,28,559 3,01,87,033
Other Income 8,86,418 3,30,010
Profit/loss before Depreciation, Finance Costs, Exceptional items and Tax Expense 10,12,229 31,49,691
Less: Depreciation/ Amortization/ Impairment 18,24,835 14,21,717
Profit /loss before Finance Costs, Exceptional items and Tax Expense 10,12,229 45,71,398
Less: Finance Costs -- --
Profit /loss before Exceptional items and Tax Expense (8,12,606) 31,49,681
Add/(less): Exceptional items -- --
Profit /loss before Tax Expense (8,12,606) 31,49,681
Less: Tax Expense (Current & Deferred) -- --
Profit /loss for the year (1) (8,12,606) 31,49,681
Total Comprehensive Income/loss (2) 5,36,367 --
Total (1+2) -- --
Balance of profit /loss for earlier years (2,76,239) 31,49,681
Less: Transfer to Debenture Redemption Reserve -- --
Less: Transfer to Reserves -- --
Less: Dividend paid on Equity Shares -- --
Less: Dividend paid on Preference Shares -- --
Less: Dividend Distribution Tax -- --
Balance carried forward (2,76,239) 31,49,681

2. Overview & State Of The Companys Affairs:

During the year under review, the Company has recorded an income of Rs. 3,14,14,977/- and loss of Rs. 2,76,239 as against the income of Rs. 3,05,17,043/- and profit of Rs.31,49,681/- in the previous financial year ending 31.03.2019. The Company is looking forward for good profit margins in near future.

3. Dividend:

Keeping the Companys growth plans in mind, your Directors have decided not to recommend dividend for the year.

4. Transfer to reserves:

Pursuant to provisions of Section 134 (3) (j) of the Companies Act, 2013, the company has not proposed to transfer any amount to general reserves account of the company during the year under review.

5. Material changes & commitment affecting the financial position of the company :

There have been no material changes and commitments affecting the financial position of the Company which have occurred during the end of the Financial Year of the Company to which the financial statements relate and the date of the report.

6. Significant & material orders passed by the regulators or courts or tribunals:

No significant or material orders have been passed against the Company by the Regulators, Courts or Tribunals, which impacts the going concern status and companys operations in future.

7. Transfer of un-claimed dividend to Investor Education and Protection:

There is no such amount of Un-paid or Unclaimed Dividend be transferred to Investor and Education and Protection Fund for the financial year ended 31st March 2019.

8. Revision of financial statements:

There was no revision of the financial statements for the year under review.

9. Change in the nature of business, if any:

During the period under review and the date of Boards Report there was no change in the nature of Business.

10. Deposits from public:

The Company has not accepted any public deposits during the Financial Year ended March 31, 2019 and as such, no amount of principal or interest on public deposits was outstanding as on the date of the balance sheet.

Details of deposits not in compliance with the requirements of the Act:

Since the Company has not accepted any deposits during the Financial Year ended March 31, 2019, there has been no non-compliance with the requirements of the Act.

Pursuant to the Ministry of Corporate Affairs (MCA) notification dated 22nd January 2019 amending the Companies (Acceptance of Deposits) Rules, 2014, the Company is required to file with the Registrar of Companies (ROC) requisite returns in Form DPT-3 for outstanding receipt of money/loan by the Company, which is not considered as deposits.

The Company would be complying with this requirement within the prescribed timelines.

11. Depository System:

SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 mandate that the transfer, except transmission and transposition, of securities shall be carried out in dematerialized form only with effect from 1st April 2019. In view of the numerous advantages offered by the Depository system as well as to avoid frauds, members holding shares in physical mode are advised to avail of the facility of dematerialization from either of the depositories. The Company has, directly as well as through its RTA, sent intimation to shareholders who are holding shares in physical form, advising them to get the shares dematerialized.

12. Selection and procedure for nomination and appointment of directors:

The Company has a Nomination and Remuneration Committee ("NRC") which is responsible for developing competency requirements for the Board, based on the industry and strategy of the Company. The Board composition analysis reflects an in-depth understanding of the Company, including its strategies, environment, operations, and financial condition and compliance requirements.

The NRC makes recommendations to the Board in regard to appointment of new Directors and Key Managerial Personnel ("KMP") and senior management. The role of the NRC encompasses conducting a gap analysis to refresh the Board on a periodic basis, including each time a Directors appointment or re-appointment is required. The NRC is also responsible for reviewing the profiles of potential candidates vis--vis the required competencies, undertake a reference and due diligence and meeting of potential candidates prior to making recommendations of their nomination to the Board.

The appointee is also briefed about the specific requirements for the position including expert knowledge expected at the time of appointment.

13. Criteria for determining qualifications, positive attributes and independence of a director:

In terms of the provisions of Section 178(3) of the Act, and Regulation 19 of the Listing Regulations, the NRC has formulated the criteria for determining qualifications, positive attributes and independence of Directors, the key features of which are as follows:

Qualifications – The Board nomination process encourages diversity of thought, experience, knowledge, age and gender. It also ensures that the Board has an appropriate blend of functional and industry expertise.

Positive Attributes - Apart from the duties of Directors as prescribed in the Act the Directors are expected to demonstrate high standards of ethical behaviour, communication skills and independent judgment. The Directors are also expected to abide by the respective Code of Conduct as applicable to them.

Independence - A Director will be considered independent if he / she meets the criteria laid down in Section 149(6) of the Act, the Rules framed thereunder and Regulation 16(1) (b) of the Listing Regulations.

14. Training of Independent Directors:

Your Companys Independent Directors are highly qualified and have been associated with corporate and business organizations. They understand Companys business and activities very well, however, pursuant to Regulation 4 of the Listing Regulations, the Board has shown all the Independent Directors Companys business and manufacturing activities and were also introduced to Companys staff.

15. Independent directors familiarization programmes:

The familiarization program aims to provide the Independent Directors with the scenario within the software technology/services, the socioeconomic environment in which the Company operates, the business model, the operational and financial performance of the Company, significant development so as to enable them to take well-informed decisions in timely manner. The familiarization programme also seeks to update the Directors on the roles, responsibilities, rights and duties under the Act and other statutes. The policy on Companys familiarization programme for Independent Directors is hosted on your Companys website and its web link is www.nagarjunaagritechlimited.com

16. Boards performance evaluation:

Your Company understands the requirements of an effective Board Evaluation process and accordingly conducts the Performance Evaluation every year in respect of the following:

i. Board of Directors as a whole.

ii. Committees of the Board of Directors.

iii. Individual Directors including the Chairman of the Board of Directors.

Pursuant to the provisions of the Act and in line with the requirements the Listing Regulations, Annual Performance Evaluation was conducted after taking into consideration the various aspects of the Boards functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance. The performance evaluation of the Directors was completed during the year under review. The performance evaluation of the Manging Director and the Non-Independent Directors was carried out by the Independent Directors and Non-Executive Director. The Board of Directors expressed their satisfaction with the evaluation process.

The criteria for Board processes included Board composition, strategic orientation and team dynamics. Evaluation of each of the Board Committees covered whether they have well-defined objectives and the correct composition, and whether they achieved their objectives. The criteria for Individual Board Members included skills, experience, level of preparedness, attendance, extent of contribution to Board debates and discussion, and how each Director leveraged their expertise and networks to meaningfully contribute to the Company. The criteria for the Chairpersons evaluation included leadership style and conduct of Board meetings. The performance evaluation criteria for Independent Directors included a check on their fulfilment of the independence criteria and their independence from the management.

17. Number of Board Meetings:

During the year, four meetings of the Board of Directors of the Company were convened and held in accordance with the provisions of the Act. The date(s) of the Board Meetings for the period under review are 21.05.2018 (21st of May 2018), 14.08.2018 (14th of August 2018), 14.11.2018(14th of November 2018) and 13.02.2019(13th of February 2019).

A separate meeting of Independent Directors, pursuant to Section 149(7) read with Schedule VI of the Companies Act, 2013 and Regulation 25 of the Listing Regulations was held on 13.02.2019.

18. Committees of the Board:

In compliance with the provisions of Sections 177, 178 of the Act, the Board constituted, Audit Committee, Nomination and Remuneration Committee and Risk Management Committee. The details of composition of the Committees, their meeting and attendance of the members are:

19. Audit Committee:

The Committee comprises of the following:

Mr. K. Soma Raju Chairman
Mr. N Viswanatha Raju Member
Mr. K Ravindra Member

I. The Audit Committee of the Company is constituted in line with the provisions of Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with Section 177 of the Companies Act, 2013.

II. The terms of reference of the Audit Committee include a review of the following:

• Overview of the Companys financial reporting process and disclosure of its financial information to ensure that the financial statements reflect a true and fair position and that sufficient and credible information is disclosed.

• Recommending the appointment and removal of external auditors, fixation of audit fee and also approval for payment for any other services.

• Discussion with external auditors before the audit commences, of the nature and scope of audit as well as post-audit discussion to ascertain any area of concern.

• Reviewing the financial statements and draft audit report including quarterly / half yearly financial information.

• Reviewing with management the annual financial statements before submission to the Board, focusing on:

1. Any changes in accounting policies and practices;

2. Qualification in draft audit report;

3. Significant adjustments arising out of audit;

4. The going concern concept;

5. Compliance with accounting standards;

6. Compliance with stock exchange and legal requirements concerning financial statements and

7. Any related party transactions

• Reviewing the companys financial and risk managements policies.

• Disclosure of contingent liabilities.

• Reviewing with management, external and internal auditors, the adequacy of internal control systems.

• Reviewing the adequacy of internal audit function, including the audit character, the structure of the internal audit department, approval of the audit plan and its execution, staffing and seniority of the official heading the department, reporting structure, coverage and frequency of internal audit.

• Discussion with internal auditors of any significant findings and follow-up thereon.

• Reviewing the findings of any internal investigations by the internal auditors into the matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.

• Looking into the reasons for substantial defaults in payments to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors.

• Reviewing compliances as regards the Companys Whistle Blower Policy.

III. The previous Annual General Meeting of the Company was held on 29.09.2018 and Chairman of the Audit Committee, attended previous AGM.

IV. The composition of the Audit Committee and the attendance of each member of the Audit Committee are given below:

The Company has complied with all the requirements of Regulation 27 of SEBI (LODR) Regulations 2015 relating to the composition of the Audit Committee.

During the financial year 2018-19, (4) four meetings of the Audit Committee were held on the 17.05.2018, 09.08.2018, 12.11.2018, and 13.02.2019.

The details of the composition of the Committee and attendance of the members at the meetings are given below:

Name Designation Category No. of meetings held No. of meeting attended
Mr. K. Soma Raju Chairman NED(I) 4 4
Mr. N Viswanatha Raju Member NED 4 4
Mr. K Ravindra Member NED(I) 4 4

NED (I): Non-Executive Independent Director

There is no such incidence where Board has not accepted the recommendation of the Audit Committee during the year under review.

20. Nomination & Remuneration Committee:

The Committee comprises of the following:

Mr. K. Soma Raju Chairman
Mr. N Viswanatha Raju Member
Mr. K Ravindra Member

The main term of reference of the Committee is to approve the fixation/revision of remuneration of the Managing Director/Whole Time Director of the Company and while approving:

To take into account the financial position of the Company, trend in the industry, appointees qualification, experience, past performance, past remuneration etc.

To bring out objectivity in determining the remuneration package while striking a balance between the interest of the Company and the Shareholders.

21. Remuneration Policy:

The objectives of the remuneration policy are to motivate Directors to excel in their performance, recognize their contribution and retain talent in the organization and reward merit.

The remuneration levels are governed by industry pattern, qualifications and experience of the Directors, responsibilities shouldered, individual performance etc.

None of the Directors is drawing any Commission, Perquisites, Retirement benefits etc.,

The details of composition of the Committee post reconstitution are given below:

Name Designation Category No. of meetings held No. of meeting attended
Mr. K. Soma Raju Chairman NED(I) - -
Mr. N Viswanatha Raju Member NED - -
Mr. K Ravindra Member NED(I) - -

NED (I): Non-Executive Independent Director

22. Risk Management Committee:

A.) Composition:

The Committee comprises of the following:

Mr. K. Soma Raju Chairman
Mr. N Viswanatha Raju Member
Mr. K Ravindra Member

Role and Responsibilities of the Committee includes the following:

• Framing of Risk Management Plan and Policy

• Overseeing implementation of Risk Management Plan and Policy

• Monitoring of Risk Management Plan and Policy

• Validating the process of risk management

• Validating the procedure for Risk minimisation.

• Periodically reviewing and evaluating the Risk Management Policy and practices with respect to risk assessment and risk management processes.

• Continually obtaining reasonable assurance from management that al known and emerging risks have been identified and mitigated or managed.

23. Risk Management Policy:

The Company follows a comprehensive system of Risk Management. The Company has adopted a procedure for assessment and minimization of probable risks. It ensures that all the risks are timely defined and mitigated in accordance with the well-structured risk management process.

24. Stakeholders Relationship Committee:

A.) Composition:

The Committee comprises of the following:

Mr. K. Soma Raju Chairman
Mr. N Viswanatha Raju Member
Mr. K Ravindra Member

Role and Responsibilities of the Committee includes the following:

B) Powers:

The Committee has been delegated with the following powers:

To redress shareholder and investor complaints relating to transfer of shares, Dematerialization of Shares, non-receipt of Annual Reports, non-receipt of declared dividend and other allied complaints.

To approve, transfer, transmission, and issue of duplicate / fresh share certificate(s)

Consolidate and sub-division of share certificates etc.

To redress, approve and dispose of any, other complaints, transactions and requests etc., received from any shareholder of the company and investor in general.

The Board has delegated the power to process the transfer and transmission of shares to the Registrar and Share Transfer Agents, who process share transfers within a week of lodgement in the case of shares held in physical form.

25. Policy for Selection of Directors and Determining Directors Independence:

• Scope:

This policy sets out the guiding principles for the Nomination & Remuneration Committee for identifying persons who are qualified to become Directors and to determine the independence of Directors, in case of their appointment as independent Directors of the Company.

• Policy:

Qualifications and criteria

3.1.1 The Nomination and Remuneration Committee, and the Board, shall review on annual basis, appropriate skills, knowledge and experience required of the Board as a whole and its individual members. The objective is to have a board with diverse background and experience that are relevant for the Companys operations.

3.1.2 In evaluating the suitability of individual Board member the NR Committee may take into account factors, such as:

• General understanding of the companys business dynamics, global business and social perspective;

• Educational and professional background

• Standing in the profession;

• Personal and professional ethics, integrity and values;

• Willingness to devote sufficient time and energy in carrying out their duties and responsibilities effectively.

3.1.3 The proposed appointee shall also fulfil the following requirements:

• shall possess a Director Identification Number;

• shall not be disqualified under the Companies Act, 2013;

• shall Endeavour to attend all Board Meeting and Wherever he is appointed as a Committee Member, the Committee Meeting;

• shall abide by the code of Conduct established by the company for Directors and senior Management personnel;

• shall disclose his concern or interest in any company or companies or bodies corporate, firms, or other association of individuals including his shareholding at the first meeting of the Board in every financial year and thereafter whenever there is a change in the disclosures already made;

• Such other requirements as may be prescribed, from time to time, under the Companies Act, 2013, SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015 and other relevant laws.

3.1.4 The Nomination & Remuneration Committee shall evaluate each individual with the objective of having a group that best enables the success of the companys business.

3.2 criteria of independence

3.2.1 The Nomination & Remuneration Committee shall assess the independence of Directors at time of appointment/ re-appointment and the Board shall assess the same annually. The Board shall re-assess determinations of independence when any new interest or relationships are disclosed by a Director.

3.2.2 The criteria of independence shall be in accordance with guidelines as laid down in Companies Act, 2013 and reg. 16(1) (b) of the SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015.

3.2.3 The Independent Director shall abide by the "Code for Independent Directors "as specified in Schedule IV to the companies Act, 2013.

Other Directorships/ Committee Memberships

3.3.1 The Board members are expected to have adequate time and expertise and experience to contribute to effective Board performance Accordingly, members should voluntarily limit their directorships in other listed public limited companies in such a way that it does not interfere with their role as Director of the company. The NR Committee shall take into account the nature of, and the time involved in a Director Service on other Boards, in evaluating the suitability of the individual Director and making its recommendations to the Board.

3.3.2 A Director shall not serve as director in more than 20 companies of which not more than 10 shall be public limited companies.

3.3.3 A Director shall not serve an independent Director in more than 7 listed companies and not more than 3 listed companies in case he is serving as a whole-time Director in any listed company.

3.3.4 A Director shall not be a member in more than 10 committee or act chairman of more than 5 committee across all companies in which he holds directorships.

For the purpose of considering the limit of the committee, Audit committee and stakeholders relationship committee of all public limited companies, whether listed or not, shall be included and all other companies including private limited companies, foreign companies and companies under section 8 of the Companies Act, 2013 shall be excluded.

Remuneration policy for Directors, key managerial personnel and other employees

1. Scope:

1.1 This policy sets out the guiding principles for the Nomination and Remuneration committee for recommending to the Board the remuneration of the directors, key managerial personnel and other employees of the company.

2. Terms and Reference:

In this policy the following terms shall have the following meanings:

2.1 "Director" means a Director appointed to the Board of the company.

2.2 "key managerial personnel" means

(i) The Chief Executive Office or the managing director or the manager;

(ii) The company secretary;

(iii) The whole-time director;

(iv) The chief finance Officer; and

(v) Such other office as may be prescribed under the companies Act, 2013

2.3 "Nomination and Remuneration Committee" means the committee constituted by Board in accordance with the provisions of section 178 of the companies Act,2013 and reg. 19 of SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015.

3. Policy:

3.1 Remuneration to Executive Director and Key Managerial Personnel

3.1.1 The Board on the recommendation of the Nomination and Remuneration (NR) committee shall review and approve the remuneration payable to the Executive Director of the company within the overall approved by the shareholders.

3.1.2 The Board on the recommendation of the NR committee shall also review and approve the remuneration payable to the key managerial personnel of the company.

3.1.3 The Remuneration structure to the Executive Director and key managerial personnel shall include the following components:

(i) Basic pay

(ii) Perquisites and Allowances

(iii) Commission (Applicable in case of Executive Directors)

(iv) Retrial benefits

(v) Annual performance Bonus

3.1.4 The Annual plan and Objectives for Executive committee shall be reviewed by the NR committee and Annual performance Bonus will be approved by the committee based on the achievement against the Annual plan and Objectives.

3.2 Remuneration to Non – Executive Directors

3.2.1 The Board, on the recommendation of the Nomination and Remuneration Committee, shall review and approve the remuneration payable to the Non – Executive Directors of the Company within the overall limits approved by the shareholders as per provisions of the companies act.

3.2.2 Non – Executive Directors shall be entitled to sitting fees attending the meetings of the Board and the Committees thereof. The Non- Executive Directors shall also be entitled to profit related commission in addition to the sitting fees.

3.3. Remuneration to other employees

3.3.1. Employees shall be assigned grades according to their qualifications and work experience, competencies as well as their roles and responsibilities in the organization. Individual remuneration shall be determined within the appropriate grade and shall be based on various factors such as job profile skill sets, seniority, experience and prevailing remuneration levels for equivalent jobs.

26. Skills / Expertise / Competencies of the Board of Directors;

The following is the list of core skills / expertise / competencies identified by the Board of Directors as required in the context of the Companys business and that the said skills are available with the Board Members:

a) Knowledge on Companys businesses (Plantations and Instant Coffee), policies and culture (including the Mission, Vision and Values) major risks / threats and potential opportunities and knowledge of the industry in which the Company operates.

b) Behavioural skills - attributes and competencies to use their knowledge and skills to contribute effectively to the growth of the Company.

c) Business Strategy, Sales & Marketing, Corporate Governance, Forex Management, Administration, Decision Making.

d) Financial and Management skills.

e) Technical / Professional skills and specialized knowledge in relation to Companys business.

27. Information supplied to the board:

The Board has complete access to all information of the Company and is regularly provided advanced detailed information as a part of the agenda papers or is tabled therein. In addition, detailed quarterly performance report by the Managing Director is presented in the quarterly Board meeting, encompassing all facets of the Companys operations during the quarter, including update of key projects, outlook and matters relating to environment, health & safety, corporate social responsibility etc. The following information is provided to the Board as a part of the agenda papers:

• Annual and Quarterly financial statements for the Company and the Accounting Policy.

• Minutes of the meetings of the Audit Committee and other Committees of the Board.

• Annual business plan

• Information on recruitment and remuneration of senior officers just below the level of Board, including the appointment or removal of Chief Financial Officer and Company Secretary, whenever required

• Expansion projects and its status monitoring

• Fatal or serious accidents, injuries or any material environmental problems, if any

• Any material default in financial obligations to and by the Company, or substantial non-payment for goods sold by the Company, if any

• Significant labour problems and their proposed solutions, whenever necessary

• Any significant development in human resources / industrial relations including long-term wage agreement, major voluntary retirement scheme, etc.

• Quarterly details of foreign exchange exposures and the steps taken by the management to limit the risks of adverse exchange rate movement, if material

• Quarterly disclosure of all the investments made

• Material non-compliance of any regulatory, statutory nature or listing requirements and shareholders service, such as non-payment of dividend, delay in share transfer and others, if any

• Quarterly review of compliance status under various laws applicable to the Company

• Substantial non-payment of goods sold by the Company except disputes

• Related Party Transactions, if they are not at arms length and in the ordinary course of business

• Half-yearly summary of bank guarantees issued.

• All other matters required to be placed before the Board for its review / information / approval under the statutes, including SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

28. Vigil Mechanism/Whistle Blower Policy:

The Board of Directors has formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177(10) of the Companies Act, 2013 and Regulation 22 of the Listing Regulations. The Company has a vigil mechanism to deal with fraud and mismanagement, if any. The policy is on the website of the Company.

The policy provides for adequate safeguards against the victimisation of eth employees who use the vigil mechanism. The vigil mechanism is overseen by the audit Committee.

29. Directors and key managerial personnel:

As on date of this report, the Company has four Directors, out of those three are Independent Directors including one Woman Independent Director.

a) Re-Appointment of Independent Directors of the Company:

(i) Pursuant to provisions of Section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014, Mrs. Rama Devi Numburi (DIN 06970266) is liable to retire by rotation at the ensuing 31st Annual General Meeting and being

(ii) Re-appointment of Mr. Soma Raju Kallepalli (holding Director Identification Number 00018539) as independent director for the second consecutive term commencing from 30th September, 2019 to 29th September, 2024;

(iii) Re-appointment of Mr. Ravindra Kalidindi(holding Director Identification Number 00021440) as independent director for the second consecutive term commencing from 30th September, 2019 to 29th September, 2024;

b) Key Managerial Personnel:

Key Managerial Personnel for the financial year 2018-19

• Mr. Venkatalakshmi Narasimha Raju Kosuri, Managing Director of the company.

• Mr. Soma Raju Kallepalli, Director of the company.

• Mr. Viswanadha Raju Namburi, Director of the company.

• Mrs. Rama Devi Numburi, Director of the company.

• Mr. Ravindra Kalidindi, Director of the company.

During the year under review, there is no fresh appointment or resignation of the directors.

30. Statutory Auditors:

At the Annual General Meeting held on 29thSeptember, 2017, (29th AGM) the Company has appointed M/s. Brahmayya& Co. Chartered Accountants Adoni, Hyderabad (Firm Registration No: 000514S) as statutory auditors of the Company to hold office for a period of consecutive five years from the conclusion of this AGM till 34th Annual General meeting of the Company to be held in year 2022. In terms of the first proviso to Section 139 (1) of the Companies Act, 2013, the appointment of the auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. Brahmayya & Co. Chartered Accountants, as statutory auditors of the Company, is placed for ratification by the shareholders at the Annual General Meeting.

The Board of Directors recommended their re-appointment ratification for the financial year 2019-20. The Auditors Report for the financial year 2018-19 is enclosed with the financial statements in this Annual Report.

The Auditors have confirmed that they have subjected themselves to the peer review process of Institute of Chartered Accountants of India (ICAI) and hold valid certificate issued by the Peer Review Board of the ICAI.

31. Internal auditors:

Pursuant to provisions of Section 138 read with Rule 13 of the Companies (Accounts) Rules, 2014 and Section 179 read with Rule 8(4) of the Companies (Meetings of Board and its Powers) Rules, 2014; during the year under review the Internal Audit of the functions and activities of the Company was undertaken by the Internal Auditor of the Company on quarterly basis by M/s.B S K S& Co., the Internal Auditor of the Company.

Deviations are reviewed periodically and due compliance ensured. Summary of Significant Audit Observations along with recommendations and its implementations are reviewed by the Audit Committee and concerns, if any, are reported to Board. There were no adverse remarks or qualification on accounts of the Company from the Internal Auditor.

The Board has re-appointed M/s. B S K S& Co., Chartered Accountants, Hyderabad as Internal Auditors for the Financial Year 2019-20.

32. Secretarial auditors:

In terms of section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, based upon the recommendations of the Audit Committee, the Board of Directors had appointed Mr. K.V. Chalama Reddy, Practicing Company Secretary (C.P No. 5451) the Secretarial Auditor of the Company, for conducting the Secretarial Audit for financial year ended March 31, 2019

The Secretarial Audit was carried out by Mr. K.V. Chalama Reddy, Company Secretaries (CP No. 5451) for the financial year ended March 31, 2019. The Report given by the Secretarial Auditor is annexed herewith and forms integral part of this Report.

33. Qualifications in audit reports:

Explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made, if any —

(a) Statutory Auditors Report:

The Board has duly reviewed the Statutory Auditors Report on the Accounts for the year ended March 31, 2019 and has noted that the same does not have any reservation, qualification or adverse remarks. However, the Board decided to further strengthen the existing system and procedures to meet all kinds of challenges and growth in the market expected in view of the rapid global challenges.

The Auditors Report annexed with this Annual Report, does not contain any qualification, reservation or adverse remarks.

(b) Secretarial Audit Report:

The Board has duly reviewed the Secretarial Audit Report on the Compliances according to the provisions of section 204 of the Companies Act 2013 and noted is at the same that the company has not appointed company secretary and Chief Financial Officer during the year but the company is taking necessary measures to appoint the same at the earliest

34. No Frauds reported by statutory auditors

During the Financial Year 2018-19, the Auditors have not reported any matter under section 143(12) of the Companies Act, 2013, therefore no detail is required to be disclosed under section 134(3) (ca) of the Companies Act, 2013.

35. Conservation of energy, technology absorption and foreign exchange outgo:

The required information as per Sec.134 (3) (m) of the Companies Act 2013 is provided hereunder and Rule 8 of Companies (Accounts) Rules, 2014:

A. Conservation of Energy:

Your Companys operations are not energy intensive. Adequate measures have been taken to conserve energy wherever possible by using energy efficient computers and purchase of energy efficient equipment.

B. Technology Absorption:

1. Research and Development (R&D): NIL

2. Technology absorption, adoption and innovation: NIL

C. Foreign Exchange Earnings and Out Go:

1. Foreign Exchange Earnings: 201.32 Lakhs

2. Foreign Exchange Outgo: NIL

36. Corporate governance:

Since the paid-up capital of the Company is less than Rs. 10 Crores and Net worth of the Company is less than Rs. 25 Crores, Corporate Governance is Not Applicable.

37. Information about the financial performance / financial position of the subsidiaries / associates:

The company does not have any subsidiaries/Associate companies.

38. Names of the companies which have become or ceased to be its subsidiaries, joint ventures or associate companies during the year:

During the year under review no Company has become or ceased to become its subsidiaries, joint ventures or associate Company.

39. DISCLOSURE OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate. The Company maintains appropriate system of internal control, including monitoring procedures, to ensure that all assets are safeguarded against loss from unauthorized use or disposition. Company policies, guidelines and procedures provide for adequate checks and balances, and are meant to ensure that all transactions are authorized, recorded and reported correctly.

During the period under review, there is no material or serious observations have been noticed for inefficiency or inadequacy of such controls.

40. STATUTORY COMPLIANCE:

The Company has complied with the required provisions relating to statutory compliance with regard to the affairs of the Company in all respects.

41. Code of Conduct for Prevention of Insider Trading:

During the year, Nagarjuna Agri-Tech Limitedhas amended the Code of Conduct for Prevention of Insider Trading in NGTL ("Code") in accordance with SEBI (Prohibition of Insider Trading) Amendment Regulations, 2018, which is effective from April 01, 2019. The amended Code is uploaded on the website of the Company. The objective of the Code is to protect the interest of shareholders at large, to prevent misuse of any unpublished price sensitive information and to prevent any insider trading activity by dealing in shares of the Company by its Directors, Designated Persons and their immediate relatives.

Pursuant to Section 134(3) of the Companies Act, 2013,the nomination and remuneration policy of the Company which lays down the criteria for determining qualifications, competencies, positive attributes and independence for appointment of Directors and policies of the Company relating to remuneration of Directors, KMP and other employees is available on the Companys website at www.nagarjunaagritechlimited.com

42. Extract of Annual Return:

As provided under section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, the extract of annual return under form MGT 9 is annexed herewith as Annexure- F to this report.

43. Authorised and paid up capital of the company:

The authorized capital of the company stands at Rs. 100000000/- divided into 1,00,00,000 equity shares of Rs.10/- each andthe companys paid up capital is Rs. 9,36,91,000/- divided into 93,69,100 equity shares of Rs. 10/- each.

44. Declaration of independence:

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Regulation 16(1)(b) read with Regulation 25 of the Listing Regulations.

The Independent Directors have also confirmed that they have complied with Schedule IV of the Act and the Companys Code of Conduct.

In terms of Regulations 25(8) of the Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence.

During the year, Independent Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board of Directors and Committee(s).

45. Policy on Directors appointment and Remuneration and other details:

The Board Governance, Nomination & Compensation Committee has framed a policy for selection and appointment of Directors including determining qualifications and independence of a Director, Key Managerial Personnel (KMP), senior management personnel and their remuneration as part of its charter and other matters provided under Section 178(3) of the Companies Act, 2013.

Pursuant to Section 134(3) of the Companies Act, 2013, the nomination and remuneration policy of the Company which lays down the criteria for determining qualifications, competencies, positive attributes and independence for appointment of Directors and policies of the Company relating to remuneration of Directors, KMP and other employees is available on the Companys website at www.nagarjunaagritechlimited.com.

We affirm that the remuneration paid to Directors is in accordance with the remuneration policy of the Company.

46. Directors Responsibility Statement:

In accordance with the provisions of Section 134(5) of the Companies Act, 2013, your Directors confirm that:-

a) in the preparation of the annual accounts for the financial year ended 31 March 2019, the applicable accounting standards and schedule III of the Companies Act, 2013 have been followed and there are no material departures from the same;

b) 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 your Company as on 31st March 2019 and of the profit and loss of the Company for the financial year ended 31stMarch 2019;

c) proper and sufficient care has been taken 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;

d) The annual accounts have been prepared on a going concern basis;

e) Proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) Proper systems to ensure compliance with the provisions of all applicable laws were followed and that such systems were adequate and operating effectively.

47. Corporate social responsibility policy:

Since your Company does not have net worth of Rs. 500 Crore or more or turnover of Rs. 1000 Crore or more or a net profit of Rs. 5 Crore or more during the financial year, section 135 of the Companies Act, 2013 relating to Corporate Social Responsibility is not applicable and hence the Company need not adopt any Corporate Social Responsibility Policy.

48. Insurance:

The properties and assets of your Company are adequately insured.

49. Particulars of loans, guarantees:

The Company has not availed any facilities of Credit and Guarantee.

50. Non-executive directors compensation and disclosures:

None of the Independent / Non-Executive Directors has any pecuniary relationship or transactions with the Company which in the Judgment of the Board may affect the independence of the Directors.

51. Internal Financial Control Systems:

Your Company has well laid out policies on financial reporting, asset management, adherence to Management policies and also on promoting compliance of ethical and well-defined standards. The Company follows an exhaustive budgetary control and standard costing system. Moreover, the management team regularly meets to monitor goals and results and scrutinizes reasons for deviations in order to take necessary corrective steps. The Audit Committee which meets at regular intervals also reviews the internal control systems with the Management.

52. Related Party Transactions:

All related party transactions that were entered into during the financial year were on arms length basis and were in the ordinary course of business. During the financial year 2018-19, there were no materially significant related party transactions made 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 at large.

In line with the provisions of Section 177 of the Act read with the Companies (Meetings of the Board and its Powers) Rules, 2014, omnibus approval for the estimated value of transactions with the related parties for the financial year is obtained from the Audit Committee. The transactions with the related parties are routine and repetitive in nature.

The summary statement of transactions entered into with the related parties pursuant to the omnibus approval so granted are reviewed and approved by the Audit Committee and the Board of Directors on a quarterly basis. The summary statements are supported by an independent audit report certifying that the transactions are at an arms length basis and in the ordinary course of business

The Form AOC-2 pursuant to Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is is annexed herewith as Annexure- D to this report.

53. Cost records and cost audit:

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Act, are not applicable for the business activities carried out by the Company.

54. Non-executive directors compensation and disclosures:

None of the Independent / Non-Executive Directors has any pecuniary relationship or transactions with the Company which in the Judgment of the Board may affect the independence of the Directors.

55. Industry based disclosures as mandated by the respective laws governing the company:

The Company is not a NBFC, Housing Companies etc., and hence Industry based disclosures is not required.

56. Prevention of sexual harassment at workplace:

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.

This is in line with provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (‘POSH Act) and the Rules made thereunder. With the objective of providing a safe working environment, all employees (permanent, contractual, temporary, trainees) are covered under this Policy. The policy is available on the website at www.palred.com.

As per the requirement of the POSH Act and Rules made thereunder, the Company has constituted an Internal Committee at all its locations known as the Prevention of Sexual Harassment (POSH) Committees, to inquire and redress complaints received regarding sexual harassment. During the year under review, there were no Complaints pertaining to sexual harassment.

57. Green Initiatives:

In commitment to keep in line with the Green Initiative and going beyond it to create new green initiatives, electronic copy of the Notice of 21st Annual General Meeting of the Company are sent to all Members whose email addresses are registered with the Company/Depository Participant(s). For members who have not registered their e-mail addresses, physical copies are sent through the permitted mode.

58. Other Disclosures:

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

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

b. Issue of shares (including sweat equity shares) to employees of the Company under any scheme referred to in this Report.

c. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

59. Appreciation & acknowledgement:

Your Directors place on record their appreciation for the overwhelming co-operation and assistance received from the investors, customers, business associates, bankers, vendors, as well as regulatory and governmental authorities. Your Directors also thanks the employees at all levels, who through their dedication, co-operation, support and smart work have enabled the company to achieve a moderate growth and is determined to poise a rapid and remarkable growth in the year to come.

Your Directors also wish to place on record their appreciation of business constituents, banks and other "financial institutions and shareholders of the Company like SEBI, BSE, NSE, NSDL, CDSL, ICICI Bank, Kotak Mahindra Bank and State Bank of India etc. for their continued support for the growth of the Company.

For and on behalf of the Board of
Nagarjuna Agri-Tech Limited
Sd/-
Mr. K V L N Raju
Place: Hyderabad Managing Director
Date: 10.08.2019 (DIN: 00116664)

CERTIFICATE OF CODE OF CONDUCT FOR THE YEAR 2018-19

The shareholders,

Code of Conduct

The Company has formulated and implemented a Code of Conduct for Board Members and Senior Management of the Company. Requisite annual affirmations of compliance with the respective Codes have been made by the Directors and Senior Management of the Company.

Certificate of Code of Conduct for the year 2018-2019 as per Regulation 17(5) read with Regulation 34 (3) Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

NAGARJUNA AGRI TECH LIMITED is committed for conducting its business in accordance with the applicable laws, rules and regulations and with highest standards of business ethics. The Company has adopted a "Code of Ethics and Business Conduct" which is applicable to all Director, officers and employees.

I hereby certify that all the Board Members and Senior Management have affirmed the compliance with the Code of Ethics and Business Conduct, under a certificate of Code of Conduct for the year 2018-2019.

For and on behalf of the Board of
Nagarjuna Agri-Tech Limited
Sd/-
Mr. K V L N Raju
Place: Hyderabad Managing Director
Date: 10.08.2019 (DIN: 00116664)