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Your Directors have pleasure to present the 30th Annual Report of the Company together with the Audited Accounts for the financial year ended 31st March, 2019 along with Auditors Report thereon.
1. Financial Results :
The Financial Results for the year ended 31st March, 2019 are summarised as under:
|(Rs. in lacs)|
|Particulars||Current Year 2018-19||Previous Year 2017-18|
|Other Operating Income||98.36||154.62|
|Total Income From Operations (Net)||6009.20||6064.23|
|Profit Before finance cost, Depreciation & Amortisation||340.80||370.05|
|Profit Before Depreciation & Amortisation||130.88||156.77|
|Depreciation & Amortisation||40.47||35.93|
|Profit/(Loss) Before Tax||90.41||120.84|
|Provision for Taxation :-|
|Net Profit /(Loss) for the Period||72.66||91.82|
2. Indian Accounting Standards:
The Company has followed Indian Accounting Standards and accounting principles generally accepted in India in preparation of financial statements for the financial year 2018-19.
Your Company has registered a turnover of Rs. 6009.20 lakhs during the year 2018-19 as against the turnover of Rs. 6064.23 lakhs during the previous year. The Company could make profit Rs. 90.41 lakhs during the financial year 2018-19 before taxes as against Rs.120.84 lakhs during the previous year. After providing for taxes, the Company could make net profit of Rs. 72.66 lakhs during the financial year 2018-19 as against net profit of Rs. 91.82 lakhs during the financial year 2017-18. The profitability of the Company is reduced marginally when compared to previous year in the light of decreased turnovers and shortfalls of rains in many places in the Country which resulted in cut down of the prices of the products in the market.
During the year 2018-19, the turnover decreased by 0.91 % as compared to the turnover of 2017-18. The ratio of manufacturing expenses to the Sales during the year 2018-19 is 85.04% as against 98.25% during 201718. The ratio of Administrative, Selling and other expenses to the total expenditure is 7.73% during the year 2018-19 as against 10.03% during 2017-18.
4. Review of Operations:
a. Brief about Activities and Operations of the Company:
Your Company is mainly into the business of manufacturing & marketing of Pesticides for agriculture sector and presently carrying on the business in two segments i.e. Pesticides Formulations and Real Estate Activities.
The main focus is on the Pesticides Business and the following manufacturing facilities for various pesticides formulations are available at the Factory:
i. Liquid & SC Formulations
ii. Weedcide Formulations
iii. Wettable & Powder Formulations
iv. Granule Formulations
Presently, the Company has Production Capacity of 90,00,000 Ltrs/Kgs per annum to manufacture various pesticides formulations and has established its marketing network in the states of Telangana, Andhra Pradesh, Maharashtra and Karnataka. The products are marketed with its own brands through dealers & distributors network. The Company is continuing Real Estate activity in a small way in Bengaluru for the last few years.
b. Performance of the Company :
The Company has achieved a turnover of Rs. 6009.20 lakhs during the year 2018-19 as against turnover of Rs. 6064.23 lakhs during the previous year. Though Company has taken steps such as establishing new sales divisions and continuous introduction of new products in accordance with current needs of the market, could not achieve the projected sales due to shortfall of rains in many states of the country.
c. Prospects for the Financial Year 2019-20 :
The Company estimates a turnover of Rs. 81.50 crores during the current year 2019-20. Since the Primary business of the Company is Agri related, monsoon conditions play major role in achieving the estimated turnovers. The Company is hopeful of improving turnovers with the established marketing network. As on date, the Companys deployment of funds in Real estate is Rs.96.79 lakhs and hopes to encash the opportunities available in the real estate field at Bengaluru with good margins during the financial year 2019-20.
In order to conserve its financial resources to meet its growth plan, your Board could not recommend any dividend for the year under review.
6. Change in the nature of Business :
During the year under review, there has been no change in the nature of business of the Company.
7. Details of Subsidiary / Joint Ventures / Associate Companies :
The Company does not have any Subsidiaries or Joint Ventures or Associate Companies.
Cash and cash equivalents as at 31st March, 2019 was Rs.18.75 lakhs. The Company continues to focus on judicious management of its working capital, receivables, inventories and other working capital parameters and they were kept under strict check through continuous monitoring at all levels.
9. Material changes and Commitments, affecting the Financial Position of the Company :
There were no material changes and commitments affecting the financial position of the Company from the year ended 31st March 2018 to till the date of this report.
10. Details of Significant and Material Orders passed by the Regulators / Courts / Tribunals impacting the going concern status and the Companys operations in future:
There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status, growth and operations of the Company in future.
11. Share Capital:
The authorised share capital of the Company is Rs.13,50,00,000, divided into 1,35,00,000 equity shares of Rs.10/- each. The paid up share capital is Rs. 4,30,02,000, divided into 43,00,200 equity shares of Rs.10/- each. There were no other changes that have been made in the share capital of the Company during the year under review. Details of Share Capital are mentioned at Notes-9 of the Financial Statements.
The Reserves in Profit & Loss account as per last Balance Sheet is Rs. 4,51,63,702.93 and the Company transferred the profits of Rs.60,59,690.25 for the financial year 2018-19 to Reserves & Surplus account. The balance in reserves and surplus available at the end of the year, 2018-19 is Rs. 5,12,23,393.25. Further details of Reserves & Surplus are mentioned at Notes-10 of the Financial Statements.
13. Details in respect of adequacy of internal financial controls with reference to the financial statements :
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory and Secretarial Auditors including audit of internal financial controls over financial reporting by the Statutory Auditors and the reviews performed by management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Companys internal financial controls are adequate and effective during the period ended on 31st March, 2019.
14. Corporate Social Responsibility (CSR) :
The compliance of the Provisions of CSR criteria mentioned in the provisions of Companies Act, 2013 are not applicable for the Company as on date.
15. Deposits :
The Company has not accepted any fixed deposits from the public during the year.
16. Particulars of Loans, Guarantees or Investments under Section 186 of the Companies Act, 2013:
The Company has not granted any Loans, given Guarantees or made any Investments in any other Companies during the year under Section 186 of the Companies Act, 2013.
17. Extract of Annual Return :
The extract of Annual Return of the Company is given in Annexure - I in the prescribed Form MGT-9, which forms part of this Report as required under Section 92(3) of the Companies Act, 2013.
18. Secretarial Auditors and Secretarial Audit Report :
Pursuant to provisions of Section 204 of the Companies Act, 2013, the Company has appointed M/s Puttaparthi Jagannatham & Co., Company Secretaries to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed as Annexure-II.
The Secretarial Audit Report does not contain any qualification, reservation or adverse remarks.
19. Particulars of Contracts or Arrangements with Related Parities under Section 188 of the Companies Act, 2013 :
All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arms length basis. During the year, the Company has taken an Unsecured Loan amount of Rs. 3,07,15,469.00 (Rupees Three Crores Seven Lakhs Fifteen Thousands Four Hundred and Sixty Nine Only) from Mr Y.Nayudamma (DIN:00377721), Managing Director and Rs. 76,92,340.00 (Rupees Seventy Six Lakhs Ninety Two Thousands Three Hundred and Forty Only) from Mr Y.Janaki Ramaiah (DIN:06949910), Executive Director of the Company on an arms length basis. Disclosures as required under form AOC-2 are annexed as Annexure - III and also contained in Notes-16 to Financial Statements and the Company has not entered into any other related party transactions. The Loans provided by the Directors with their own resources.
20. Disclosures under Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013 :
Our 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. There are no cases filed / complaints lodged in the Company during the year under review in respect of the Sexual Harassment of Women at workplace.
21. Directors and Key Managerial Personnel:
Pursuant to provisions of Section 149 and other applicable provisions of the Companies Act, 2013 read with Rules thereon, the following Directors were appointed as Independent Directors of the Company at the Annual General Meeting held on 25-09-2017 for a period of three years effective from the meeting date.
|Mr.T.A. Choudary -||DIN: 00036470|
|ii. Mr.N. Sudhakar -||DIN: 00426897|
|iii. Mr.M. Balarama Krishnaiah -||DIN: 00036506|
|iv. Mrs. S. Kavitha Rani -||DIN: 06942657|
|v. Dr. G.S.R. Anjaneyulu -||DIN:01874325|
In accordance with the provisions of Section152 of the Companies Act, 2013, Dr. Yadlapalli Venkatswarlu (DIN:00377568) will retire by rotation at this Annual General Meeting and being eligible, has offered himself for re-appointment. The Independent Director Mr.M.Balarama Krishnaiah (DIN:00036506) has tendered the resignation for the post of Independent Director on 20-07-2019. Mr. M. Sreerama Murthy (DIN: 01932910) has been appointed as Additional Director of the Company till the conclusion of ensuing Annual General Meeting and his candidature is recommended for appointment as non executive Independent Director of the Company subject to the approval of the shareholders. The term of Mr.Y.Nayudamma (DIN: 00377721) as Managing Director has expired on 31-122018 and offered himself for re-appointment. The term of Mr.Y.Janaki Ramaiah (DIN: 06949910) as Executive Director expires by 29-09-2019 and he has offered himself for re-appointment. During the year, the NonExecutive and Independent Directors of the Company had no pecuniary relationship or transactions with the Company.
Pursuant to the provisions of Section 203 of the Companies Act, 2013, Mr.Pavansingh Thakur (ACS No.A56920) an Associate Member of the Institute of Company Secretaries of India, was appointed as Company Secretary of the Company during the year.
22. Declaration by the Independent Directors of the Company that they meet the criteria of independence as provided in Sec 149(6) of the Companies Act, 2013 :
All the independent Directors have given declarations that they meet the requisite criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
23. Formal evaluation statement by the Board of its own performance, its committees and individual Directors :
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has formulated a policy for evaluation of its Board, Board Committees, Directors and their performances and carried out evaluation of them. The manner in which the evaluation was carried out has been explained in the Corporate Governance Report.
24. Number of Meetings of the Board :
Six meetings of the Board were held during the year. The details of the meetings of the Board are given in the Corporate Governance Report.
25. Audit Committee :
Four meetings of the Audit Committee were held during the year. The details pertaining to composition of Audit Committee are included in the Corporate Governance Report.
26. Risk Management Policy:
The Company has formulated effective risk management policy and through a Steering Committee oversees the Risk Management process including risk identification, impact assessment, effective implementation of the mitigation plans and risk reporting. The major risks identified in the Company are systematically addressed through justifying actions on a continuous basis. In addition to this, the audit committee has additional oversight in the area of financial risks and controls. The details of Risk Management as practiced by the Company is provided as part of Management Discussion and Analysis Report attached to this report.
27. Stakeholders Relationship Committee:
The Committee focuses on shareholders grievances and strengthening of investor relations. The Committee looks after the services of the Registrars and Share Transfer Agents and recommends measures for providing efficient services to investors. The Committee specifically looks into investor complaints like transfer/ transmission/transposition of shares and other related issues. There were no complaints pending for redressal as at 31st March, 2019. The details pertaining to composition of Stakeholders Relationship Committee are given in the Corporate Governance Report.
28. Directors Responsibility Statement :
As required under section 134(5) of the Companies Act, 2013, with respect to Directors Responsibility Statement, it is hereby confirmed that:
a. In the preparation of the annual accounts for the year ended 31st March, 2019, the applicable accounting standards have been followed including Ind AS Accounting Standards as notified by the Ministry of Corporate Affairs (MCA) on 16th February, 2015.
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 the Company as at 31st March, 2019 and of the profit of the Company for the year ended on that date.
c. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
d. The Directors have prepared the annual accounts of the Company for the Financial Year ended 31st March, 2019 on a going concern basis.
e. The Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively and
f. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
29. CEO and CFO Certification :
In accordance with the Regulation 17(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Managing Director (C.E.O.)and Chief Financial Officer of the Company have submitted a certificate for the year ended 31st March, 2019 to the Board of Directors which forms part of the Annual Report.
30. Auditors & Observations :
M/s. S.T. Mohite & Co., Chartered Accountants, Hyderabad (FRN: 011410S) were appointed as Statutory Auditors of the Company for a period of five years at the 29th Annual General Meeting till the Conclusion of 34th Annual General Meeting of the Company.
The Auditors Report for the year ended 31st March, 2019 does not contain any qualification, reservation or adverse remarks on the accounts and related matters of the Company.
31. Internal Auditor :
M/s T Adinarayana & Co., Chartered Accountants (FRN: 000041S), Hyderabad are the Internal Auditors for the year 2018-19. They have submitted quarterly reports for the financial year 2018-19 to the Board and there are no material adverse comments.
32. Cost Accountant for Cost Accounting Records :
Pursuant to the provisions of Section 148 of the Companies Act, 2013, as amended by the Companies Amendment Act, 2017 read with Rule 6 of Companies (Cost Records and Audit) Rules, 2014, the Company has to maintain Cost Accounting Records for the financial year 2018-19. M/s Sreshti & Associates, Cost Accountants (FRN - 100644) were appointed on the recommendation of the Audit Committee to review and certify that Cost accounting records of the Company for the financial year 2018-19.
33. Policy on Directors Appointment and Remuneration and other details :
The Nomination and Remuneration Committee has laid down the policy for Remuneration of Directors, KMP & other Employees and the criteria has been formulated by the Committee for determining Qualifications, Positive Attributes and Independence of a Director. The Companys policy on Directors Appointment and Remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the Corporate Governance Report.
34. Depository System :
As the Members are aware, your Companys shares are tradeable compulsorily in electronic form and your Company has established connectivity with Central Depository Services (India) Limited (CDSL) & National Securities Depository Limited (NSDL). In view of the numerous advantages offered by the depository system, the Members are requested to avail the facility of Dematerialisation of the Companys shares on CDSL or NSDL. The ISIN allotted to the Companys Equity shares is INE 037C01010.
35. Vigil Mechanism / Whistle Blower Policy :
Pursuant to Section 177 (9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, the Board of Directors had approved the Policy on Vigil Mechanism / Whistle Blower and the same is posted on the official website of the Company. This Policy inter-alia provides a direct access to the Chairman of the Audit Committee.
Your Company hereby affirms that no Director / employee has been denied access to the Chairman of the Audit Committee and that no complaints were received during the year.
36. Particulars of Employees
The Company has no employee whose remuneration falls within the purview of the limits prescribed under the provisions of Section 197 of the Companies Act, 2013, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
Particulars of Remuneration
Disclosures with respect to the remuneration of Directors and employees as required under Section 197(12) of Companies Act, 2013 and Rule 5 (1) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:
a. The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year:
i. Executive Directors :
ii. Non-Executive Directors :
|Sl.No.||Name of the Director||Ratio|
(Mr. K.Srinivasa Rao - Alternate Director)
|8.||Mr G.S.R. Anjaneyulu||0.18|
The Company has not paid any remuneration to the Non-Executive Directors except Sitting Fee.
b. The percentage increase in remuneration of each Director, Chief Executive Officer, Chief Financial Officer, Company Secretary in the financial year:
There is increase in remuneration of Managing Director which is 30.77% and Executive Director which is 2.51% in comparision to previous financial year.
c. Percentage increase in the median remuneration of employees in the financial year : 27.63%
d. The number of permanent employees on the rolls of Company: 103
e. The explanation on the relationship between average increase in remuneration and Company performance:
The increase in remuneration is in line with market trends. In order to ensure that the remuneration reflects Companys performance, the pay is linked to organizational performance. As per the Companys practice, annual increments to the Employees were sanctioned. Hence there is consequent increase in the remuneration of the employees.
f. Variations in the market capitalisation of the Company as at the closing date of the current financial year and previous financial year:
|Particulars||As at 31-03-2019||As at 31-03-2018|
|(Rs. in Lakhs)||(Rs. in Lakhs)|
|Closing rate of share at BSE (Rs.)||29.00||59.20|
|Market Capitalization (Rs in Lakhs)||1247.06||2545.72|
g. Percentage increase or decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer:
The Company made an Initial Public Offer in the year 1995 at par price of Rs.10/- per each equity share. As on 31st March, 2019, the Market quotation for the Companys Equity shares at BSE Limited is Rs.29.00.
h. 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:
There has been increase of 30.77% (Rs.6.00 Lakhs) of Managing Director and increase of 2.51 % (Rs.0.35 Lakhs) of Executive Director in the managerial remuneration and 27.63 % of increase in the salaries to employees of the Company.
i. Comparison of each remuneration of the Key Managerial Personnel against the performance of the Company:
|Name of the Person||Remuneration (Rs. in Lakhs)||Total Revenue (Rs. in Lakhs)||Remuneration as a % of total revenue|
|Mr. Y. Nayudamma - Managing Director||25.50||6009.20||0.42|
|Mr. Y. Janaki Ramaiah - Executive Director||19.50||6009.20||0.32|
|Mr. Pavansingh Thakur - Company Secretary *||1.85||6009.20||0.03|
* Mr. Pavansingh Thakur has joined as Company Secretary in the Company on 19-11-2018.
j. The key parameters for any variable component of remuneration availed by the Directors: Nil
k. The 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.
l. Affirmation that the remuneration is as per the remuneration policy of the Company:
The Company affirms remuneration paid to Key Managerial Personnel is as per the remuneration policy of the Company.
37. Corporate Governance :
The Company is committed to maintain and adhere to the good standards of Corporate Governance. As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Report on Corporate Governance forming part of this Report, together with the Auditors Certificate regarding the compliance of the conditions of Corporate Governance is given in a separate section in the Annual Report.
38. Management Discussion and Analysis Report:
Management Discussion and Analysis Report, pursuant to Regulation 34 (2) of SEBI (LODR) Regulations, 2015 a Report on Management Discussion and Analysis is annexed hereto as Annexure - IV.
39. Particulars regarding Energy Consumption, Technology Absorption and Foreign Exchange Earning and Outgo:
The particulars prescribed under Section 134 of the Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014, relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo are furnished in Annexure-V to this Report.
40. Prevention of Insider Trading :
Your Company has in place code of conduct to regulate, monitor and report trading by designated persons and code of practices and procedures for fair disclosure of unpublished price sensitive information which is in adherence to the SEBI (Prohibition of insider trading) Amendment Regulations, 2018. The disclosures received pursuant to this code and the Regulations are disseminated to the Stock Exchanges with in prescribed time limit. Report of compliance office was placed before the Board. The code is available at the companys website at the following link www.phytochemindia.com
All the Board Members and the designated employees have confirmed the compliance with the Code.
41. Payment of Listing fee :
The shares of the Company are listed at Bombay Stock Exchange Limited, which has nationwide trading terminals and the listing fee has been paid by the Company upto date.
The Directors wish to express their appreciation for the assistance and continued co-operation received from the Central and State Governments, Banks, Financial Institutions, Customers, Dealers and Suppliers and also the Directors wish to thank all the employees for their dedicated contribution, support and continued co-operation throughout the year at all levels.
|For and on Behalf of the Board|
|Place : Hyderabad||Managing Director|
|Date : 14th August, 2019||DIN :00377721|