sree rayalaseema hi strength hypo ltd share price Directors report


To

The Members

Your Directors take immense pleasure in presenting 18th Annual Report on the business and operations of the Company along with the audited financial statements (Standalone and consolidated) for the financial year ended March 31, 2023.

Financial Results:

( Rs. in lakhs )

Particulars

Standalone

Consolidated

2022-23

2021-22

2022-23

2021-22
Profit before interest,
Depreciation and Tax

21,457.89

15,942.20

21,451.36

15,941.45
Less: Interest

474.95

320.82

474.96

320.82

Depreciation

1,934.66

1,922.72

1,934.66

1,922.72
Profit before Tax

19,048.28

13,698.67

19,041.74

13,697.92
Provision for Taxation &
Deferred Income Tax

3,616.33

3,420.07

3,616.33

3,420.07
Profit after Tax

15,431.94

10,278.60

15,425.40

10,277.85
Add: Balance brought forward
from previous year

39,212.51

29,448.85

39,208.91

29,446.00
Less: Other adjustments

600.95

514.94

600.95

514.94
Balance carried forward to next year

54,043.51

39,212.51

54,033.37

39,208.91

Performance:

During the year under review, the Company achieved turnover of Rs. 1650.11 Crores against previous year turnover of Rs. 1267.27 crores. The profit before tax stood at Rs.190.48 Crores as against Rs. 136.98 crores for the previous year.

Division / Segment Wise Operations

  1. The net sales of Calcium Hypo Chloride during financial year 2022-23 is Rs.468.88 crores as against 331.80 crores in previous year representing an increase of 41.31%.
  2. The net sales of Stable Bleaching Powder during financial year 2022-23 is Rs. 79.42 crores as against 91.34 crores in previous year representing a decrease of 13.04%.
  3. The net sales of Sodium Methoxide during financial year 2022-23 is 67.69 crores as against Rs. 43.17 crores in previous year representing an increase of 56.78% and the net sales of Sodium Hydride during financial year 2022-23 is 5.24 crores as against Rs. 7.73 crores during previous financial year representing a decrease of 32.21%.
  4. The trading activity in coal had fetched an amount of Rs. 652.74 crores as against Rs. 448.92 crores during previous year.
  5. The net sales of Sulphuric acid during financial year 2022-23 is 217.39 crores as against Rs. 298.54 crores during previous financial year representing a decrease of 27.18%.
  6. Total power generated, sold through Thermal, Wind and Solar during the year under review is Rs. 44.12 Crores.

Dividend:

The Board of Directors at their meeting held on 30th May,2023 has recommended a final dividend of Rs.4/- per equity share of face value Rs.10/- each (i.e.,40% on paid up share capital) for the financial year ended 31st March,2023 . The dividend payment is subject to approval of members at the ensuing Annual General Meeting. The total cash outflow on account of dividend on equity shares for the financial year 2022-23 would aggregate Rs. 6,86,59,284 /-. The dividend will be paid to members whose names appear in the Register of Members as on the book closure date. The dividend payment date is 21st October,2023

In view of the changes made under the Income-tax Act, 1961, by the Finance Act, 2020, dividends paid or distributed by the Company shall be taxable in the hands of the Shareholders. The Company shall, accordingly, make the payment of the final dividend after deduction of tax at source.

Transfer of Unclaimed dividend to Investor Education and Protection Fund (IEPF):

In terms of section 124 and 125 of the companies act, 2013 read with the IEPF Authority ( Accounting, Audit, Transfer and Refund Rules) 2016, (‘the Rules), unpaid or unclaimed dividend pertaining to the financial year 2015-16 will be transferred to the Investor Education and Protection Fund (IEPF) during the financial year 2023-24.

The Company had transferred unclaimed or unpaid dividend to IEPF relating to financial year 2010-11 amounting to Rs. 19,49,114/- on 08.06.2018. Further, 29,896 corresponding shares were transferred as per the requirements of the IEPF Rules. The unclaimed or unpaid dividend of financial year 2014-15 amounting to Rs. 26,87,557 transferred to IEPF on 3rd December,2022 and corresponding 10,29,911 shares were transferred to IEPF. The details are made available on Company website www.tgvgroup.com.

The shareholders can claim back their shares /dividend amount transferred to IEPF by filing Form IEPF-5 and other related documents.

The following table provides list of years for which unclaimed dividends and their corresponding shares would become eligible to be transferred to the IEPF on the dates mentioned below:

Financial Year

Dividend Declared (%)

Date

of declaration of dividend

Last date for claiming

unpaid dividend

Unclaimed Dividend Amount* (Rs.)

Due date for transfer to the IEPF Account
2015-16 15% 28.09.2016 04.11.2023 27,41,488 05-11-2023
2016-17 15% 27.09.2017 03.11.2024 26,90,974 04-11-2024
2017-18 20% 28.09.2018 04.11.2025 36,02,088 05-11-2025
2018-19 20% 30.09.2019 06.11.2026 34,16,997 07-11-2026
2019-20 25% 30.11.2020 06.01.2028 36,55,774 07-01-2028
2020-21 30% 30-09-2021 06-11-2028 43,74,781 07-11-2028
2021-22 35 % 29-09-2022 05-11-2029 51,00,431 06-11-2029

*Amount unclaimed as on July 31, 2023.

Share Capital:

During the year under review , there was no change in the Authorized, Subscribed and Paid up share capital of the company. The Paid up Equity share capital as on 31st March,2023 was Rs.17,16,48,210 comprising of 1,71,64,821 equity shares of Rs.10/- each.

Weblink of Annual Return :

The Annual Return of the Company for the financial year 2022-23 as required under section 92(3) of the Companies Act, 2013 is available on the website of the company at the link http://www.tgvgroup.com/download/hypo/Annual-Return- 2022-23-file..pdf

Board Meetings and its committees conducted during the period under review:

During the year under review, Seven ( 7 ) meetings of the Board of Directors, four (4) meetings of Audit Committee, two(2) meetings of Nomination and remuneration committee, four(4) meeting s of stakeholders relationship committee and one(1) meeting of Corporate Social Responsibility Committee and two(2) meetings of risk management committee were held. Further, the details of same have been enumerated are mentioned in the Corporate Governance Report annexed herewith.

Compliance with Secretarial Standards

The Company is in compliance with applicable secretarial standards issued by the Institute of Company Secretaries of India

Directors Responsibility Statement:

Pursuant to the requirement under Section 134 (5) of the Companies Act, 2013 with respect to Directors Responsibility Statement, it is hereby confirmed:

  1. that the preparation of the accounts for the financial year ended March 31 , 2023, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;
  2. that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 year under review;
  3. that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and
  4. that the Directors had prepared the accounts for the financial year ended March 31, 2023 on a ‘going concern basis.
  5. that 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.
  6. that 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.

Directors and Key Managerial Personnel:

In accordance with the provisions of Section 152 of the companies Act,2013 and Articles of Association of the Company, Sri. H Gurunath Reddy (DIN 07211326), and Sri Satyam Gadwal (DIN: 09762624 ) Directors of the Company are liable to retire by rotation at the ensuing Annual General Meeting and being eligible offers themselves for reappointment. The Board recommends their reappointment for the consideration of the Members of the Company at the forthcoming Annual General Meeting. Brief profiles of Sri. H Gurunath Reddy and Sri Satyam Gadwal are being given in the Notice convening the Annual General Meeting .

The Key Managerial Personnel of the Company pursuant to Section 2(51) and 203 of the Companies Act,2013 are (1) Sri T G Bharath, Chairman and Managing Director (2) Smt V Surekha, Company Secretary and (3) Sri Shaik Ifthekhar Ahmed , Chief Financial Officer .

Evaluation of board performance:

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17(10) of SEBI(LODR)Regulations, 2015, the Board has carried out performance evaluation taking into consideration of various aspects of the Boards functioning, composition of Board, and its Committees, execution, and performance of specific duties, obligations and governance. The Performance of evaluation of Independent Directors was completed. The Performance evaluation of Chairman and the Non-

Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with evaluation process. To familiairze with Company Operations, Programmes were undertaken to Independent and Non-Executive Directors at regular intervals.

Companys policy on Directors appointment and remuneration:

The Nomination and Remuneration Committee had been constituted by the Board which ensures the selection, appointment of persons having wide exposure in their respective fields and remuneration to Directors, Key Managerial Personnel and Senior Management of the Company. The Board on the recommendation of the Nomination & Remuneration Committee takes necessary steps and decisions.

Statement of declaration given by independent directors under section 149(6) :

During the year under review, the Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as stipulated in Section 149(6) of the Companies Act, 2013 and Regulation 16(1) (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and that their names are included in the data bank as per Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules,2014. During the year, the Independent Directors of the Company had no pecuniary relationship or transactions with the Company other than sitting fees.

Transfer to Reserves:

The Company has not transferred any amount to its Reserves during the year under review.

Subsidiaries, Joint Ventues and Associate Companies :

As on March 31, 2023 your Company has one Wholly owned subsidiary Company M/s TGV Sodium & Electrolite Private Limited and one subsidiary Company M/s TGV Metals and Chemicals Private Limited formed on 10th February,2022. Although Company holds more than 20% of shareholding in M/s MV Salts & Chemicals Pvt Limited, it is not an associate Company within the meaning of Section 2(6) of the Companies Act,2013 and the Company has no joint ventures. As required under SEBI(LODR) Regulations, 2015 and Section 129 of the Companies Act,2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, the consolidated financial statements of your Company and its Subsidiary Companies are provided in the Annual Report. The Consolidated financial statements have been prepared in accordance with Ind AS 27. The Consolidated financial statements have been prepared on the basis of audited financial statements of its subsidiary Companies as approved by its Board of Directors. The Consolidated financial statement shows the financial resources, assets, liabilities, income, profit and other details of your Company and its subsidiary after elimination of inter –company transactions. A Separate statement

is annexed explaining salient features of the financial statements of the subsidiary in AOC-1 ((Annexure-A) and the details of such entities of the Company formed/acquired /Ceased during the year are provided in (Annexure-A -1) to this report.

M/s TGV Sodium & Electrolite Private Limited ceases to be Wholly owned subsidiary Company with effect from April 01,2023.

Insurance:

All assets of the Company and other potential risks have been adequately insured.

Fixed Deposits:

The Company has not accepted any public deposits under Section 73 of Companies Act, 2013 and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.

Listing of Shares:

The Equity shares of your Company are listed on BSE Ltd. and National Stock Exchange of India Ltd. The Company has paid the Annual Listing fees to each of these Stock Exchanges for the financial year 2023-24.

Internal control systems and their adequacy:

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and its subsidiaries. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

Change in nature of business:

There is no change in nature of business of the Company.

Significant and material orders passed by the regulators or court:

There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.

Industrial Relations:

Your Companys Industrial Relations continue to be harmonious and cordial.

Particulars of loans, guarantees or investments under section 186 of the Companies Act, 2013 :

The Company had made some investments and given loans covered under Section 186 of the Companies Act, 2013 during the financial year under review. The details in respect of investments and loans as per section 186(4) made have been disclosed in the notes to the financial statements.

Particulars of contracts or arrangements with related parties:

All transactions entered with Related Parties for the year under review were on arms length basis and in the ordinary course of business. There are material significant related party transactions made by the Company. All Related Party Transactions are placed before the Audit Committee as also the Board for approval, where ever required. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseeable and repetitive nature. A statement giving details of all related party transactions entered into is annexed to this report as Form AOC-2 (Annexure-B). The Company had formulated a policy on dealing with related party transactions which has been uploaded on the Companys website http://www.tgvgroup.com/download/hypo/Related-Party-Transaction- Policy-pdf...pdf

Risk management policy:

Risk Management Policy was approved by the Board in its meeting held on 30th June,2021. The policy is placed on Companys website http://www.tgvgroup.com/ download/hypo/risk-management-policy.pdf .

The management takes necessary steps for implementation of the Policy by identifying potential threats to the organization and the likelihood of their occurrence and then taking appropriate actions to address the most likely threats. The process involved in Risk Management are identifications of Risk/Evaluation/ Assessment, Prevention & Control, Financing, Measure and Monitor effectiveness, reviewing and reporting.

Dividend Distribution Policy

Under the regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, the Company has formulated a Dividend Distribution Policy. The Policy sets out the Parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders. As a green initiative, the Policy has been uploaded on the Companys website and can be accessed at http:// www.tgvgroup.com/download/hypo/dividend-distribution-policy.pdf .

Vigil Mechanism / Whistle Blower Policy:

The company has adopted a vigil mechanism in the form of a Whistle Blower Policy to provide adequate safeguards to deal with instances of fraud and

mismanagement and to report concerns about unethical behavior or any violation of the Companys code of conduct in pursuance of provisions of Section 177(10) of the Companies Act,2013. During the year under review, no complaints received under this mechanism. The policy can be accessed on Companys Website at the link: https://www.tgvgroup.com/download/hypo/VIGIL_MECHANISM_POLICY.pdf

Particulars of Energy conservation, Technology Absorption and Foreign Exchange earnings and outgo:

Information as per Section 134 (3) of the Companies Act, 2013 read with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 are forming part of the Directors Report for the year ended 31st March, 2023 is annexed to this Report (Annexure -C).

Business Responsibility and Sustainability Report :

The Business Responsibility and Sustainability Report ("BRSR") of the Company for the year 2022-23 forms part of this Annual Report as required under Regulation 34(2) (f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed to this report (Annexure -D).

Corporate Governance:

A report on Corporate Governance along with a Certificate for compliance with the conditions of Corporate governance in accordance with Securities Exchange Board of India(Listing Obligations & Disclosure Requirements ) Regulations, 2015 issued by Practicing Company Secretary forms part of this Annual Report (Annexure -E) .

Management Discussion and Analysis Report :

Further to comply with regulation 34(2) read with Schedule V of SEBI(LODR) Regulations, 2015, ‘Management Discussion and Analysis has been annexed to this report (Annexure –F ).

Corporate Social Responsibility :

To comply with Section 135 of Companies Act,2013 and other applicable provisions, CSR policy has been approved by the Board and constituted a CSR Committee to monitor the implementation of CSR activities. The details of CSR expenditure, constitution of CSR committee are annexed to this report. (Annexure – G).

Auditors:

Statutory Auditors:

M/s S T Mohite & Co., Chartered Accountants (Firm registration number 011410S) were appointed as the statutory auditors of the Company to hold office for five

consecutive years from the conclusion of the 17th Annual General Meeting of the Company held on September 29, 2022, till the conclusion of 22nd Annual General Meeting to be held in 2027, as required under Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014.

There are no qualifications , reservation or adverse remark or disclaimer made in the audit report for the financial year 2022-23.

Secretarial Auditors:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had re-appointed M/s. Geeta Serwani & Associates, Practicing Company Secretary, Hyderabad to undertake the Secretarial Audit of the Company for the Financial Year 2022-23. The Report of the Secretarial Audit Report is annexed to this report (Annexure- I ). The report does not contain any qualification , reservation or any adverse remark.

Cost Auditors:

As per section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audits) Rules,2014 as amended, the Board of Directors of your Company on recommendation of the Audit Committee appointed Sri Thota SSV Santhosh Kumar , Cost Accountants as the Cost Auditors to carry out the cost audit of products of the Company . The remuneration of cost auditors has been approved by the Board of Directors on the recommendation of Audit Committee and the requisite resolution for ratification of remuneration of cost auditors by the members has been set out in the notice of 18th Annual General Meeting of your Company.

The cost audit report for the financial year ended March 31, 2022 issued by M/

s. Santhosh & Associates, Cost auditors in respect of various products prescribed under Cost Audit Rules does not contain any qualification, reservation and the same was filed with Ministry of Corporate Affairs. The cost audit report for the financial year ended March 31 , 2023 is being submitted shortly.

Prevention of Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013

As per the requirement of the Sexual Harassment of women at workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act ) and rules made thereunder, your Company has adopted a policy .

During the year under review , no case was filed under the POSH Act.

Material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

There are no material changes which affects the financial position of the Company according to the date of financial year and the date of its report.

Particulars of Employees:

Except Sri T G Bharath, Chairman & Managing Director ,no employee of the Company is drawing remuneration as prescribed under 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) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.:

  1. The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year:
  2. Name of the Director

    Ratio to Median

    Remuneration

    Sri.T.G.Bharath, CMD

    189.15

    Sri. A.Kailashnath, Director

    0.14

    Sri. H.Gurunath Reddy, Director

    0.07

    Smt. R Triveni, Director

    0.14

    Sri. P.Ramachandra Gowd , Director

    0.14

    Sri. Krishnamoorthy Chandraiah Naik, Director *

    0.03

    Sri. Satyam Gadwal **

    0.04

    * Demise on 18th September,2022

    ** inducted on the Board on 13th October, 2022

  3. The percentage increase in remuneration of each Director, Chief financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:
  4. Sri.T.G.Bharath, Managing Director

    25%

    Smt.V Surekha, Company Secretary

    11.62%

    Sri.Ifthekhar Ahmed, Chief Financial Officer

    12.70%

  5. The percentage increase in the median remuneration of employees in the financial year - 25.19%.
  6. The number of permanent employees on the rolls of Company - 414.
  7. Average percentile increase already made in the salaries of employees other than managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration :
  8. The average increase in salaries of employees other than managerial personnel in 2022-23 was 25.19%.

    Percentage increase in the managerial remuneration for the year is 25%.

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

Acknowledgements:

Your Directors would like to express their grateful appreciation for the assistance and co-operation received from Customers, Banks, Suppliers, Shareholders , Government departments and other statutory authorities and others associated with the Company. Your directors also wish to place on record their appreciation for the contributions made by employees at all levels , during the year under review.

For and on behalf of the Board

Sd/-

T.G. Bharath

Place : Kurnool Chairman & Managing Director Date : August 14, 2023 (DIN : 00125087)