| Dear Members,
The Directors have pleasure in presenting you the Twenty Second Annual
Report together with Audited Accounts for the year ended 31st March,
2015.
PERFORMANCE OF THE COMPANY (Rs. In Lakhs)
For the year For the year
ended ended
31/03/2015 31/03/2014
Sales & Other Income 27.13 37.29
Profit/(Loss) before interest and
Depreciation 0.78 (3.01)
Depreciation 1.15 2.72
Net Profit / (Loss) before Tax &
Exceptional items (0.37) (5.73)
Exceptional & Extra-Ordinary items - 7.25
Income Tax 0.10 0.15
Profit on Sale of Assets - 4.98
Net Profit/(Loss) after Tax &
Exceptional Items (0.47) (0.96)
COMPANY'S PERFORMANCE AND OPERATIONS:
The Aqua Farm situated at Isakapalli was given on lease during July,
2013 for seven years. Operating in volatile and uncertain environment
at that time, the company had given the farm on long term lease, netted
a gross income of Rs.27.13 lakhs and incurred a marginal loss of
Rs.0.47 lakhs.
DIVIDEND AND RESERVES
In view of considerable accumulated losses, no dividend is declared and
not transferred any amount to reserves.
FUTURE PROSPECTS:
Sea food exports fell just short of the targeted $6 Billion for the
year 2014- 15, but have still peaked to a new high crossing 1 Million
tonnes in volumes for the first time. Frozen shrimps continued to be
the flagship product, accounting for a share of 34% in quantity and 67%
in US $ value of the total exports. Vannamei, grown in aquaculture
farms was the main item under shrimps. This is achieved despite the
problems in the world market like depreciation of Euro, weak economic
conditions in China and devaluation of Yuan.
The company in order to reduce the losses, the company had given the
farm at Iskapally for a long term lease so that it could be put to
better use and the company will not have any burden of maintenance. As
there is a considerable improvement in the economy revival, the
promoters are exploring opportunities in various fields to revive the
fortunes of the company. The lessee had considerably improved the
infrastructure in farm and operating, with no or negligible maintenance
costs to the Company in immediate future, thereby reducing the financial
costs to the Company except the statutory compliance costs.
PARTICULARS REGARDING ENERGY CONSERVATION etc.:
The information relating to conservation of energy, technology
absorption and foreign exchange earnings and outgo pursuant to Section
134(3) of the Companies Act, 2013 read with Rule 8 of the Companies
(Accounts) Rules, 2014 is given in Annexure V to this Report.
SUBSIDIARY:
The company does not have any subsidiary.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
In accordance with the provisions of Section 152 of the Companies Act,
2013 read with the Articles of Association of the Company, Smt.
Bommidala Anitha (DIN: 00112766), Non-executive Woman Director retires
by rotation at the forthcoming Annual General Meeting and being
eligible, offers herself for re-appointment.
As required under clause 49 of the Listing Agreement a brief resume,
expertise and details of other directorships of Smt. Bommidala Anitha
(DIN:00112766) annexed to the Notice convening the 22nd Annual General
Meeting of the Company.
All the Independent Directors viz., Sri Tunuguntla Rama Krishna
(DIN:02324865) and Sri Nellore Dolendra Prasad (DIN:01816366) have
submitted declarations confirming that they continued to meet the
criteria of independence as prescribed under Section 149(6) of the
Companies Act, 2013 and Clause 49 of the Listing Agreement with the
Stock Exchanges.
The Board met 7 times during the financial year 2014-15, the details of
which are given in the Corporate Governance Report.
In accordance with the provisions of Section 134 of the Act and Clause
49 of the Listing Agreement, the Board had carried out an evaluation of
its own performance, the performance of Committees of the Board,
namely, Audit Committee, Risk Management Committee, Stakeholders
Relationship Committee and Nomination and Remuneration Committee and
also the directors individually. The manner in which the evaluation was
carried out and the process adopted had been mentioned in the Corporate
Governance Report.
The Board, on the recommendation of the Nomination & Remuneration
Committee, has framed a policy for selection and appointment of
Directors, Senior Management and their remuneration and also framed the
criteria for determining experience, qualifications, positive
attributes and independence of directors.
Sri Bommidala Rama Krishna (DIN: 00105030), Managing Director and Mr.
Arisetty Sai Prasad, Chief Financial Officer (who had been appointed
during the year) are the Key Managerial Personnel of the Company as per
Section 203 of the Companies Act, 2013.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
During the financial year 2014-15, the Company has not given any
guarantees/loan or made any investments. However during the year, the
company has repaid an amount of Rs. 10.90 Lakhs due as on 31st March,
2014, but received Rs.4.35 Lakhs (after the repayment of Rs.3.25 lakhs)
interest free loan from Mr. Bommidala Rama Krishna, Managing Director.
PARTICULARS OF EMPLOYEES:
The information required pursuant to Section 197 of the Companies Act,
2013 read with Rule 5 of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 is given in Annexure VII to the Board
of Directors report.
AUDITORS AND AUDITORS' REPORT Statutory Auditors;
The Shareholders at the 21 st Annual General Meeting held on 13th
September, 2014, had appointed M/s Garlapati & Co., Chartered
Accountants (Firm Regn.No:000892S) as Statutory Auditors of the Company
to hold office until the conclusion of 22nd Annual General Meeting. M/s
Garlapati & Co., being eligible has expressed their willingness to
continue as Statutory auditors of the Company and accordingly, the
company has received a letter from them to the effect that appointment,
if made would be within the prescribed limits under section 141 (3)(g)
of the Companies Act, 2013 that they are not disqualified for
re-appointment and their appointment is recommended to the
Shareholders.
EXPLANATION FOR AUDITORS EMPHASIS OF MATTER:
(a) Regarding Non- Agriculture Tax, there was no demand from the
concerned department. However, the company had shown the amount as
contingent laibilitiy under other notes on account.
(b) Regarding the preparation of accounts on going concern basis the
notes in Indipendent audit report is self explanatory and the company
had given the farm on long term lease and got steady income and been
able to meet its operational expenses.
Internal Auditors:
The Board, as required under Sec 138 of Companies Act, 2013, in
consultation with Audit Committee had appointed M/s. Jonnalagadda &
Associates, Chartered Accountants (Firn Regn. No:01358S) as internal
auditors for the year 2014-15.
Secretarial Auditor:
Pursuant to the provisions of Section 204 of the Companies Act, 2013
read with the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Company has appointed M/s K. Srinivasa Rao
& Co, Company Secretaries in practice as the Secretarial Auditor to
undertake the Secretarial Audit of the Company. The Report of the
Secretarial Audit is given in Annexure-lII to this Report. There were
no qualifications, reservations or adverse remarks given by Secretarial
Auditor except non- compliance of section 203 of the Companies, 2013 in
respect of appointment the Company Secretary as Key Managerial Person.
The Board has made utmost effort for appointment of the Company
Secretary as KMP but has not been able to appoint a Company Secretary
due to lack of suitability of the Candidate to the profile of the
Company in terms of work location, job profile and remuneration.
RISK MANAGEMENT:
As required under Clause 49 of the Listing Agreement, the Company has
constituted a Risk Management Committee. The details of Committee and
its terms of reference are set out in the Corporate Governance Report
forming part of the Board's Report.
The Company has put in place a mechanism to identify, assess, monitor
and mitigate various risks to its key business objectives. Major risks
identified by the business and functions are systematically addressed
through mitigating actions on a continuing basis. The Company has
formulated a Risk Management Policy which is also available on the
Company's website at www.bkvindustries.com
INTERNAL FINANCIAL CONTROLS:
The Company has adequate Internal Financial Controls with proper checks
to ensure that transactions are properly authorised, recorded and
reported apart from safeguarding its assets. These systems are reviewed
and improved on a regular basis. It has a comprehensive budgetary
control system to monitor revenue and expenditure against approved
budget on an ongoing basis.
The internal auditors of the Company review the controls across the key
processes and submit reports periodically to the Management and
significant observations are also presented to the Audit Committee for
review. Follow up mechanism is in place to monitor the implementation
of the various recommendations.
CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES:
Section 135 of the Companies Act, 2013 provides the threshold limit for
applicability of the CSR to a Company i.e. (a) net worth of the Company
to be ' 500 crore or more; or (b) turnover of the company to be' 1,000
crore or more; or (c) net profit of the company to be ' 5 crore or more.
As the Company does not fall under any of the threshold limits given
above, the provisions of Section 135 are not applicable to the Company.
RELATED PARTY TRANSACTIONS
All contracts/arrangements/transactions entered into during the
financial year with the related parties were on arm's length basis and
were in the ordinary course of business. Section 188(1) of the
Companies Act, 2013 exempts related party transactions that are in the
ordinary course of business and are on arm's length basis. However,
under clause 49 of the Listing Agreement, all material Related Party
Transactions require approval of the shareholders through special
resolution. However, during the year, there are no material related
party transactions, other than the ordinary transactions. The Board of
Directors and the Audit Committee have also approved the said related
party transactions.
There are no materially significant related party transactions with the
promoters, Directors, Key Managerial Personnel or other designated
persons which may have a potential conflict with the interest of the
Company at large. The policy on dealing with Related Party Transactions
as approved by the Board is available at the investors section of the
Company's website at www.bkvindustries.com
The particulars of contracts/arrangements entered into by the Company
with related parties as required to be disclosed are given in Annexure
IV to this Report.
CORPORATE GOVERNANCE:
The Managing Director and the Chief Financial Officer have submitted a
certificate to the Board regarding the financial statements and other
matters as required under the Listing Agreement. Statutory Auditor's
certificate on Corporate Governance compliance is attached to Corporate
Governance report.
MANAGEMENT DISCUSSION AND ANALYSIS:
The Management Discussion and Analysis Report for the year under
review, as stipulated under Clause 49 of the Listing Agreement, form
part of this Annual Report.
TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND:
The company has not declared any dividend till date from inception and
hence not applicable.
DISCLOSURES:
Committees of the Board
During the year, in accordance with the Companies Act, 2013 the Board
re- constituted/re-named some of its Committees and presently the
Company has the following Committees:
* Audit Committee
* Nomination & Remuneration Committee
* Stakeholders Relationship Committee
* Share Transfer Committee
* Risk Management Committee
The details of all the Committees along with their composition, terms
of reference and meetings held during the year are provided with in the
"Report on Corporate Governance" forming part of this Annual Report.
Vigil Mechanism & Whistle Blower Policy
The Company has a vigil mechanism and a whistle blower policy. The same
has been posted on the Company's website and the details of the same
are given in the Corporate Governance Report.
EXTRACT OF THE ANNUAL RETURN
The details of the extract of the Annual Return in Form MGT-9 are given
in Annexure- VI to this Report.
LISTING AGREEMENT WITH STOCK EXCHANGES:
As per the requirement of Listing Agreement, the Company declares that
its securities are listed on the Stock Exchanges of Bombay, Delhi,
Kolkata, Chennai and Hyderabad. The company confirms that it has paid
annual listing fees to the Stock Exchanges of Bombay, Madras, Delhi and
Kolkata for the year 2014-2015. The Hyderabad Stock Exchange Ltd,
Madras Stock Exchange Limited & Delhi Stock Exchange Association
Limited had since informed that SEB1 de-recognized these Stock
Exchanges.
During the year Kolkata Stock Exchange is yet to send their bill for
Listing fees, hence the fees for 2015-16 have not been paid.
DIRECTOR'S RESPONSIBILITY STATEMENT:
Pursuant to the provisions contained in Section 134(3) of the Companies
Act, 2013, your Directors to the best of their knowledge and belief and
according to information and explanations obtained from the management,
confirm that:
in the preparation of the annual accounts for the financial year ended
March 31, 2015, the applicable accounting standards have been followed
and there are no material departures from the same;
the Directors have selected such accounting policies and applied them
consistently except the depreciation accounting policy as per statute
change 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 March 31, 2015 and of the cash flows and loss of the
Company for the year ended on that date;
the Directors have taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
The Directors have prepared the Annual Accounts on a going concern
basis.
The Directors have laid down proper internal financial controls to be
followed by the Company and such controls are adequate and operating
effectively.
the Directors have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems are adequate
and operating effectively
GENERAL:
Your Directors state that no disclosure is required in respect of the
following items as there were no transactions on these items during the
year under review:
1. Details relating to deposits covered under Chapter V of the Companies
Act, 2013.
2. Issue of equity shares with differential rights as to dividend,
voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the
Company under any scheme.
4. No orders were passed by the Regulators or Courts or Tribunals
which impact the going concern status and the Company's operations in
future.
DELISTING OF SHARES
Company's Ordinary Equity shares are originally listed in the Stock
Exchanges of Mumbai (BSE) and four other Stock Exchanges at New Delhi,
Kolkata, Chennai and Hyderabad. The shares of the company are
compulsorily traded in dematerialized form. The Board considered that
continued listing on all stock exchanges was not necessary and
therefore decided to de-list from Delhi and Calcutta stock exchanges in
pursuance of special resolution passed in the 14th Annual General
Meeting held on 28thSeptember, 2007. However, the company was informed
by Madras Stock Exchange Limited, Hyderabad Stock Exchange Limited, The
Delhi Stock Exchange Association Limited, that SEBI had de-recognized
the above Stock Exchanges. Company is yet to hear from Kolkata Stock
Exchange and not received any bill for Listing Fees from them for the
year 2015-16.
PERSONAL RELATIONS AND APPRECIATION:
The Directors gratefully acknowledge all stakeholders of the Company
viz., lessee, members, employees and banks for their support during the
year. Your directors hereby place on record their appreciation for the
services rendered by the staff of the Company for their hard work,
dedication and commitment.
By order of the Board of Directors
Place: Guntur
Date : 23th July, 2015
BOMMIDALA RAMA KRISHNA
Managing Director
DIN:00105030
|