Your Directors are pleased to present the 17th ANNUAL REPORT of the Company together with the Audited Financial Statements for the Financial Year ended 31 March 2024.
Financial Performance
(' in lakhs))
|
Particulars
|
Standalone
|
|
Consolidated
|
|
FY 2023-24
|
FY 2022-23
|
FY 2023-24
|
FY 2022-23
|
|
Income from Operations
|
17,984.46
|
11,674.81
|
25,247.36
|
21,055.54
|
|
Other Income
|
22.82
|
41.81
|
3.56
|
37.82
|
|
Total Income
|
18,007.28
|
11,716.62
|
25,250.92
|
21,093.35
|
|
Total Expenditure
|
15,96.60
|
10,500.76
|
21,914.65
|
18,277.00
|
|
Profit Before Tax (PBT)
|
2,043.68
|
1,215.86
|
3,336.27
|
2,816.36
|
|
Less: Tax expenses
|
183.37
|
373.4
|
505.45
|
767.41
|
|
Profit After Tax (PAT)
|
1,860.31
|
842.46
|
2830.81
|
2,048.96
|
|
EPS in ' (Basic & Diluted)
|
2.76
|
1.34
|
4.20
|
3.27
|
Financial statements are prepared in accordance with the Indian Accounting Standards (lnd-AS) as prescribed under Section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 20 15 and Companies (Indian Accounting Standards) Amendment Rules, 2016.
Company Performance / State of Affairs
During the year, revenue from operation of your Company was ' 17,984.46 Lakhs as compared to ' 11,674.81 Lakhs in the previous year and the net profit has grown by 121% to ' 1,860.31 Lakhs as against ' 842.46 Lakhs in the previous year.
Subsidiary Companies / Joint Ventures / Associate Companies
Your Company has following subsidiaries as on 31 March, 2024:
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S.
No.
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Name of the Company
|
Particular
|
|
1)
|
Nova Agri Sciences Private Limited CIN: U01403TG2010PTC068405
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Wholly owned Subsidiary
|
|
2)
|
Nova Agri Seeds (India) Private Limited CIN: U01403TG2009PTC065732
|
Company
|
|
3)
|
Suraksha Agri Retails (India) Private Limited** CIN: U01820TG2009PTC063119
|
Associate
Company
(Promoter)
|
**16.63 % stake is owned by Suraksha in the Company
The statement required to be provided with respect to subsidiaries and associate companies pursuant to the provisions of Section 129(3) of the Act and Rule 5 of the Companies (Accounts) Rules, 2014 in Form AOC - 1 is annexed herewith as “Annexure I”.
The Audited Financial Statements, the Auditors Reports thereon and the Board’s Reports for the year ended
31 March, 2024, of the aforesaid companies, shall be available for inspection by the Members at its registered office, during business hours on all working days up to the date of the Annual General Meeting and the same are also available on the website of the Company www.novaagri.in.
Note:
• Your Company does not have any Joint Ventures.
• No Company has become / ceased to be its Subsidiary, Joint Venture or Associate of Company during the year under review.
Additionally, we would also like to inform that following Companies shall fall under the purview of “Group Companies” pursuant to SEBI circular- SEBI/ HO/ AFD/ AFD - PoD - 2/ CIR/ P/ 2023/ 148 dated 24 August, 2023:
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S.
No.
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Name of the Group Companies
|
CIN
|
|
1)
|
Nova Ferticare Private Limited
|
U24100TG2015PTC099837
|
|
2)
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Nova Dairy Tech India Private Limited
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U01119TG2013PTC087282
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|
3)
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Nova Health Sciences Private Limited
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U85190TG2010PTC068584
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|
4)
|
Agri Genome Resources India Private Limited
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U01403TG2011PTC072116
|
|
5)
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AIC Nova Foundation for Agriculture Innovation and Research
|
U93090TG2018NPL128938
|
Material Subsidiary:
The Company has 1 (one) material subsidiaries as per the definition of Regulation 16(1) (c) of SEBI (Listing Obligations and Disclosure Requirements) Regulations. 2015.
1) Nova Agri Sciences Private Limited CIN:U01403TG2010PTC068405
The Company’s policy on determining the material subsidiaries is uploaded on the Company’s website at www.novaagri.in.
Highlights of Performance of Subsidiaries
During the year, the material subsidiary contributed ' 11,166.4 Lakhs in the consolidated revenue from operation of your Company as compared to ' 10,869.30 Lakhs in the previous year.
' 974.86 Lakhs was contributed by the material subsidiary in the consolidated net profits of the Company as compared to ' 1,198.05 Lakhs in the previous year.
The consolidated net profit has grown by 38.16% to ' 2830.81 Lakhs as against ' 2048.96 Lakhs in the previous year.
Change in the Nature of Business
Your Company is engaged is the business of manufacturing Agro products for Crop protection and crop nutrition. There was no change in the nature of the business during the financial year under review.
Transfers to Reserves
During the year under review, the entire profit of ' 1,860.31 Lakhs for the year ended 31 March 2024 was transferred to the surplus under Reserves and Surplus A/c. No Amount was transferred to Reserves.
Dividend
Considering your Company’s growth, and future strategy and plans, your Directors consider it prudent to conserve resources and despite having sufficient distributable profits, do not recommend any dividend on equity shares for the financial year under review.
Transfer of Unclaimed Dividend to Investor Education and Protection Fund
During the year under review, the Company was not required to transfer any unclaimed dividend to IEPF Account.
Public Deposits
During the financial year 2023-24, your Company has not accepted any deposit that falls within the scope of Sections 73 and 74 of the Companies Act, 2013, read together with the Companies (Acceptance of Deposits) Rules, 2014. Further, there is no amount outstanding at the beginning of financial year 2022-23, which can be classified as ‘Deposits’ in terms of Section 73 of the Companies Act, 2013, read with Companies (Acceptance of Deposit) Rules, 2014.
Particulars of Loans, Guarantees, Investments Under Section 186
The loans granted, guarantees given and investments made are in compliance with Section 186 of the Companies Act, 2013. As per the requirements of Section 186 and Section 134(3)(g) of the Companies Act, 2013, we would like to inform that details of loans, guarantees, securities and investments made by the Company, are provided in the notes to the financial statements forming part of the Annual Report.
Proceedings under IBC
As per the requirements of Rule 8(5)(xi) and (xii) of the Companies (Accounts) Rules, 2014 -
• No application made or proceeding pending against your Company under the Insolvency and Bankruptcy Code, 2016.
• No one-time settlement of financial dues was made during the period under review.
Credit Rating
Acuite Ratings & Research Limited CARE Ratings Limited (CARE) has reaffirmed its ratings of “ACUITE BBB-; Stable” on the long term bank facilities and cash credit of the Company.
Listing of Shares Through Initial Public Offer (IPO)
> Filing of DRHP:
The Company filed Draft Red Herring Prospectus (“DRHP”) with Securities Exchange Board of India (“SEBI”) on March 03, 2023 proposing listing of its equity shares on BSE Limited and National Stock Exchange of India Limited. Through such Initial Public Offer (IPO), the Company proposes to raise additional fund of '140 Crores through “Fresh Offer”. Further, existing shareholder of the Company namely Mr. Nutalapati Venkatasubbarao proposes to dilute his stake in the Company by disposing 77,58,620 Equity shares of ' 2/-each through IPO in “Offer for sale” category.
> Utilization of Fund:
Proposed public issue is with a view to utilize the funds for setting up a new formulation plant for the subsidiary Nova Agri Sciences Private Limited and for the expansion of the existing formulation plant. The funds are also used for working capital requirements, besides general corporate purposes.
> In-principle approval on DRHP:
The Company received in-principle approval for such proposed IPO from BSE, NSE and SEBI vide their letters dated 31st May, 2023, 1st June, 2023 and 26th June, 2023 on the DRHP filed by the Company on 3rd March, 2023.
> Filing of RHP:
The Company filed Red Herring Prospectus for the proposed IPO on 12th January, 2024
> Opening of Issue:
The Public Issue was open for a period of three days from 23rd January, 2024 to 25th January, 2024. Anchor investor was opened on 19th January, 2024
> Allotment of Shares:
On 29th January, 2024, 2,73,17,073 equity shares of ' 2/- each were allotted under Fresh Issue of the Company and 77,58,620 equity shares of ' 2/- each, offered under Offer for Sale were transferred at an Issue Price of ' 41/- per Equity Share including a share premium of ' 39/- per Equity Share, to the respective applicants in various categories, vide approval of IPO Committee of the Company, in terms of the basis of allotment approved in consultation with the authorized representative of the BSE Limited, the designated stock exchange.
Accordingly, the paid capital of the Company was increased from ' 13,04,05,480/- consisting of 6,52,02,740 equity shares of ' 2/- each to ' 18,50,39,626/- consisting of 9,25,19,813 equity shares of ' 2/- each.
> Listing of Shares:
The Company received trading approval from BSE Limited and National Stock Exchange of India Limited (hereinafter referred as “Stock Exchanges”) for listing and trading of 9,25,19,813 equity shares of the Company vide letter dated 30th January, 2024. Accordingly, the equity shares of the Company were duly listed on Stock Exchanges w.e.f. 31st January, 2024.
Deviation In Utilization of Funds Raised Through Initial Public Offer (IPO)
Pursuant to Regulation 32(4) of SEBI (LODR) Regulations, 2015, during the financial year under review, there is no deviation in utilization of proceeds raised through IPO.
The Company has appointed CARE Rating Limited as Monitoring Agency for monitoring the utilisation of proceeds of public issue. Monitoring Agency submits its report quarterly and the same is available at the website of the Company at https://novaagri.in/investor-relations/notices-and-disclosures/ and the website of stock exchanges at www.bseindia.com and www.nseindia.com.
Share Capital
|
Authorized Share Capital
|
' 20,00,00,000/- divided into 10,00,00,000 equity shares of ' 2/- each
|
|
Subscribed, Issued and Paid-up Capital
|
' 18,50,39,626/- divided into 9,25,19,813 equity shares of ' 2/- each
|
During the financial year under review, there were following changes in Share Capital:
Allotment of Shares:
• On 29th January, 2024, 2,73,17,073 equity shares of ' 2/- each were allotted under Fresh Issue of the Company and 77,58,620 equity shares of ' 2/- each, offered under Offer for Sale were transferred at an Issue Price of ' 41/- per Equity Share including a share premium of ' 39/- per Equity Share, to the respective applicants in various categories, vide approval of IPO Committee of the Company, in terms of the basis of allotment approved in consultation with the authorized representative of the BSE Limited, the designated stock exchange.
• Accordingly, the paid capital of the Company was increased from ' 13,04,05,480/- consisting of 6,52,02,740 equity shares of ' 2/- each to ' 18,50,39,626/- consisting of 9,25,19,813 equity shares of ' 2/- each.
Particulars of Contracts or Arrangements with Related Parties
Particulars of contracts or arrangements entered by the Company with related parties referred to in Section 188(1) are furnished under Form AOC-2 as “Annexure II”.
Employee Stock Option Scheme (ESOP)
Your Company had implemented “Nova Agritech Limited Share Based Employee Benefit Scheme - 2022” (hereinafter referred to as “the Scheme”) to create, issue, offer, grant, allot and/or transfer from time to time, upto a maximum of
5.00. 000 (Five Lakh) Options /SARs/Shares or any other benefits of ' 10/- each corresponding to 25,00,000 (Twenty Lakh) Options /SARs/Shares or any other benefits of ' 2/- each that may be granted pursuant to the Scheme, in one or more tranches which shall be convertible into equitable number of Equity Shares unless otherwise determined by the Compensation Committee as constituted by the Board, through “Nova Agritech Limited Employees Welfare Trust”, a trust established by the Company for implementation and/ or administration of the Scheme (hereinafter referred to as “Trust”), at such price or prices, in one or more tranches and on such terms and conditions, as may be determined by the Board in accordance with the provisions of the Scheme, SEBI (SBEBASE) Regulations, 2021, vide board and members approval dated 23rd November, 2022 and 19th December, 2022 respectively.
Pursuant to the aforesaid scheme, the Company allotted
5.00. 000 equity shares of ' 10/- (Rupees Ten Only) each at a price of ' 25/- (including premium of ' 15/- per share) to “Nova Agritech Limited Employees Welfare Trust” on 06 January 2023. However, pursuant to sub-division of equity shares, the holding of “Nova Agritech Limited Employees Welfare Trust” as on 31 March 2023 has tantamount to 25,00,000 Equity Shares of face value of ' 2/- each.
Further, Pursuant to Regulation 12(1) of Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (“SEBI (SBEBASE) Regulations, 2021”), no company is permitted to make any fresh grant which involves allotment or transfer of shares to its employees under any scheme formulated prior to listing of its shares unless such scheme is in conformity with the SEBI (SBEBASE) Regulations, 2021 and is ratified by its members subsequent to the listing of the shares of the Company. Accordingly, approval of the Members is being sought in 17th Annual General Meeting of the Company for ratification of the Scheme and the issue of employee stock options (“ESOPs”) and/or share appreciation rights (“SARs”) to the eligible employees as may be determined by the Compensation Committee in accordance with the Scheme.
The Scheme is in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and the Disclosures pursuant to Regulation 14 read along with Part F of Schedule-I of Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 are provided under “Annexure VI.”
The certificate from the secretarial auditors of the company pursuant to Regulation 13 the SEBI (SBEBASE) Regulations, 2021, that the scheme(s) has been implemented in accordance with these regulations and in accordance with the resolution of the company is annexed herewith under “Annexure XII - Certificates.”
Disclosures in respect of Voting Rights not directly exercised by Employees:
Pursuant to “Nova Agritech Limited Share Based Employee Benefit Scheme - 2022” (“Scheme”), Nova Agritech Limited Employees Welfare Trust holds 25,00,000 equity shares of ' 2/- each in the Company for the benefit of employees.
However, your Company has not granted any ESOPs to employees during the period under review, and accordingly, no disclosures as required under Rule 16(4)
of the Companies (Share Capital and Debentures), 2014 has been furnished.
MOA & AOA
During the year, there is no change in Memorandum of Association (MOA) and Articles of Association (AOA) of the Company.
The Memorandum of Association (MOA) and Articles of Association (AOA) of the Company adopted vide the resolution passed by Board of Directors dated 18 January 2023 and Shareholders dated 11 February 2023 are the latest copies.
Matters Related to Directors and Key Managerial Personnel
Board of Directors
As on 31 March 2024, the Board comprised of 4 (four) Executive Directors and 4 (four) Non-Executive Independent Directors. During the year under review, there is no change in Board of the Company.
(Details of Board members are provided in the Corporate Governance Report)
Retirement by Rotation
In accordance with the provisions of Section 152(6) of the Companies Act, 2013 read with the Articles of Association of the Company, at least 2/3rd of the total number of Directors of a public company shall be liable to retire by rotation and 1/3rd of such Directors shall retire by rotation at every AGM, However, “Independent Directors” are out of the ambit of retiring by rotation.
In accordance with the provisions of Section 152(6), the Board has proposed Mr. Kiran Kumar Atukuri (DIN: 08143781) as the Director to “Retire by rotation” in this 17th AGM.
Mr. Kiran Kumar Atukuri, Managing Director, retires by rotation in the ensuing AGM and being eligible, offers himself for re-appointment. A resolution seeking shareholders’ approval for his re-appointment, along with other required details forms part of the Notice of the AGM.
Detailed information as required under Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is enclosed as “Annexure-A” to the Notice of 17th AGM.
Appointment/Re-appointment and Cessation Directors:
During the period under review Mrs. Malathi Siripurapu (DIN: 03033944) is reappointed as Whole-Time Director of the Company for a period of 3 (three) years w.e.f. 17 March 2024 to 16 March 2027 (both days inclusive), liable to retire by rotation, in the 16th AGM of the Company held on 30 September 2023.
Key Managerial Personnel:
During the year under review there were following changes in KMP:
1. Mr. Srinivasarao Mandalapu is appointed as the Chief Executive Officer (CEO) of the Company w.e.f. 16 March 2024 in the Board Meeting of the Company held on 15 March 2024.
2. Dr. Dhana Raj Boina, Head-Research and Development-Quality Control, was appointed as Chief Technical Officer of the Company w.e.f. 16 March 2024 in the Board Meeting of the Company held on 15 March 2024.
After 31 March 2024 and until the approval of this Directors’ Report, there were the following changes in Board composition:
1. Mr. Sreekanth Yenigalla (DIN: 07228577) ceased to be a Whole Time Director w.e.f. 2nd April, 2024 in view of his resignation.
2. Mr. Basanth Kumar Nadella (DIN: 08139510) ceased to be a Whole Time Director w.e.f. 2nd April, 2024 in view of his resignation.
3. Mr. Rajesh Cherukuri (DIN: 09840611) was appointed as Additional Director designated as Whole-time Director w.e.f. 02nd April, 2024. Subsequently, members approval was accorded by way of postal ballot on 14th June, 2024 for appointment of Mr. Rajesh Cherukuri (DIN: 09840611) as Whole-Time Director.
4. Board of Directors in their meeting held on
10th August, 2024, upon recommendation of Nomination & Remuneration committee, recommended for re-appointment of Mr. Kiran Kumar Atukuri (DIN: 08143781) as a Managing Director of the Company for a period of 3 (three) years w.e.f. 13th November, 2024, Subject to approval of members of the Company in the ensuing shareholders meeting.
5. Board of Directors in their meeting held on
10th August, 2024, upon recommendation of Nomination & Remuneration committee, recommended for re-appointment of Mrs. Swapna Kandula (DIN: 08719208) as an Independent Director of the Company for a second term of 5 (five) years w.e.f. 19th March, 2024, Subject to approval of members of the Company in the ensuing shareholders meeting.
Appropriate resolutions for the re-appointment of Mr. Kiran Kumar Atukuri as Managing Director and Mrs. Swapna Kandula as Independent Director are being moved at the ensuing 17th AGM, which the Board of Directors recommends for your approval.
Detailed information as required under Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is enclosed as “Annexure-A” to the Notice of 17th AGM.
Declaration by the Independent Directors
The Company has received declarations from each Independent Director citing that he/she meets the criteria of independence laid down under Section 149(6) of the Companies Act, 2013 and such other statutory requirements so as to continue as Independent Directors of the Company.
Registration of Independent Directors in Independent Directors Databank:
All the Independent Directors of the Company have been registered and are members of Independent Directors Databank maintained by Indian Institute of Corporate Affairs (IICA), in terms of the provisions of Rule 6 of the Companies
(Appointment and Qualification of Directors) Rules, 2019 and the Companies (Creation and Maintenance of Databank of Independent Directors) Rules, 2019.
Opinion of the Board:
The Board after taking these declarations/disclosures on record and acknowledging the veracity of the same, concluded that Independent Directors of the Company are of persons of integrity, eminent personalities and have expertise/ experience in their respective fields/ professions.
Independent Directors of our Company have cleared online proficiency self-assessment test conducted by the institute notified under sub-section (1) of section 150. These Directors meet the criteria of independence, and were selected and appointed, based on well-defined selection criteria. The Nomination and Remuneration Committee considers, inter alia, key qualifications, skills, expertise and competencies, fulfilment of criteria for independence, while recommending to the Board, the candidature for appointment as Independent Director, to enable the Board to discharge its functions and duties, effectively.
A Board Confirmation in this regard is annexed herewith under “Annexure XII - Certificates.”
Establishment of Vigil Mechanism
The Company has adopted a Whistle Blower Policy, establishing a vigil mechanism to provide a formal mechanism to the Directors and employees to report concern about unethical behavior, actual or suspected fraud or violation of code of conduct and ethics. It, also, provides for adequate safeguards against the victimization of employees, who avail of the mechanism, and provides direct access to the chairman of the Audit Committee in exceptional cases. The whistle-blower policy is available on the website of the Company https://novaagri.in/investor-relations/policies/.
Directors’ Responsibility Statement
Your Directors would like to assure the members that the financial statements for the year under review is as per the requirements of the Companies Act, 2013 and pursuant to the provisions of Section 134(3)(c) of the Companies Act, 2013, to the best of their knowledge and based on the information and explanations received from the Company, your Directors confirm that:
i. i n the preparation of the annual financial statements for the year ended 31 March 2024, the applicable accounting standards have been followed and there are no material departures;
ii. accounting policies have been selected and applied consistently and judgments and estimates that are reasonable and prudent have been made, so as to give a true and fair view of the state of affairs of the Company as at 31 March 2024 and of the profit & loss of the Company for that period;
iii. proper and sufficient care have been taken for the maintenance of accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company, for preventing & detecting fraud and/or other irregularities;
iv. t he annual accounts have been prepared on a going concern basis;
v. i nternal financial controls have been laid down by the Company and that such internal financial controls are adequate and are operating effectively; and
vi. Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
Non-Disqualification of Directors
None of the Directors of the Company is disqualified under the provisions of the Companies Act, 2013 or under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Your Company has obtained a Certificate from Mr. M Ramana Reddy, Company Secretary in Practice, (ICSI M. No. F11891 and C.P. No. 18415) from P. S. Rao & Associates, Hyderabad pursuant to the provisions of Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 provided under “Annexure XII - Certificates”, certifying that none of the Directors of the Company have been debarred or disqualified from being appointed or continuing as Directors of companies by the Securities and Exchange Board of India (SEBI) or by the Ministry of Corporate Affairs (MCA) or by any such statutory authority.
Code of Conduct and Declaration on Code of Conduct
Board of Directors in their meeting held on 27th February, 2023, has approved and laid down a Code of Conduct for all Board members, Senior Management and Independent Directors of the Company, in line with the provisions of Regulation 17(5) of SEBI (LODR) Regulations, 2015. The said Code of Conduct is available on the website of the Company https://novaagri.in/investor-relations/policies/.
Further, in accordance with Schedule V (D) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, declaration from Chief Executive Officer of the Company has been received confirming that all the Directors and the Senior Management Personnel of the Company have complied with the aforesaid Code of Conduct for the year 2023-24 forming part of the report under “Annexure XII - Certificates”.
Annual Evaluation of Individual Directors, Committees and Board
Pursuant to the provisions of the Companies Act, 2013, the Board carried out annual performance evaluation of its own performance, the Directors individually, as well as the
evaluation of the working of its Audit Committee, Nomination and Remuneration Committee, and Stakeholders’ Relationship Committee.
The Board took into consideration inputs received from the Directors, covering various aspects of the Board’s functioning, such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.
A separate exercise was carried out to evaluate the performance of individual Directors, including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgments, safeguarding the interest of the Company and its minority shareholders etc.
The performance evaluation of the Independent Directors was carried out by the entire Board and performance evaluation of the Chairman and Non-Independent Directors was carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process.
Disclosure of Expertise / Skills / Competencies of the Board of Directors:
The list of core skills / expertise / competencies identified by the Board of Directors of the Company as required in the context of its business and sector(s) for it to function effectively and those actually available with the Board, form part of the Corporate Governance Report.
Board Diversity
The Policy on Board Diversity of the Company devised by the Nomination and Remuneration Committee and approved by the Board is disseminated on the website of the Company https://novaagri.in/investor-relations/policies/.
Remuneration Policy and Appointment Criteria
Your Company has in place a policy for remuneration of Directors, Key Managerial Personal (KMPs) and Senior Management as well as a well-defined criterion for the selection of candidates for appointment to the said positions, which has been approved by the Board.
The following policies broadly lays down the guiding principles, philosophy and the basis for payment of remuneration to the Executive and Non-Executive Directors (by way of sitting fees and commission), KMPs and Senior Management. The criteria for the selection of candidates for the above positions cover various factors and attributes, which are considered by the Nomination and remuneration Committee and the Board of Directors while selecting candidates.
• Criteria for making payment / remuneration to the NonExecutive Directors.
• Nomination and Remuneration Policy
Aforesaid policies as recommended by the Nomination and Remuneration Committee and approved by the Board in their respective meeting held on 27th February, 2023 can be accessed from the website of the Company at https://novaagri.in/investor-relations/policies/
Familiarization Programme for Independent Directors
All Independent Directors inducted into the Board are provided an orientation on Company structure and Board constitution and procedures, matters reserved for the Board, and our major risks and risk management strategy.
The Company familiarizes the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, etc., through various interactions and an update on amendments or regulatory requirements and changes is given as part of Board meetings and familiarization programs.
Details of the familiarization programs of the Independent Directors are available on the website of the Company at https://novaagri.in/investor-relations/policies/.
Committees of the Board
As on 31 March 2024, the Board has six committees, (i) Audit Committee, (ii) Nomination and Remuneration Committee, (iii) Stakeholders’ Relationship Committee, (iv) Risk Management Committee, (v) Corporate Social Responsibility Committee and (vi) IPO Committee, which are constituted as per the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.
The details of the above-mentioned committees are as follows:
> Audit Committee
Audit Committee has been constituted in terms of Section 177 of Companies Act, 2013 and in terms of Regulation 18 of SEBI (LODR) Regulations.
Composition of the Committee, its terms of reference, detail of meetings and such other details are provided in the Report on Corporate Governance. All the recommendations made by the Audit Committee were accepted by the Board of Directors.
> Nomination and Remuneration Committee
Nomination and Remuneration Committee has been constituted in terms of Section 178 of Companies Act, 2013 and in terms of Regulation 19 of SEBI (LODR) Regulations.
Composition of the Nomination and Remuneration Committee, its terms of reference, details of meetings and such other details are provided in the Report on Corporate Governance. All the recommendations made by the Audit Committee were accepted by the Board of Directors.
> Stakeholders’ Relationship Committee
Stakeholders’ Relationship Committee is constituted in line with the provisions of Regulation 20 of SEBI (LODR) Regulations and Section 178 of the Act.
Composition of the SRC, its terms of reference, details of the meeting and such other details are provided in the Report on Corporate Governance annexed.
> Risk Management Committee
The Risk Management Committee was constituted on 27 February 2023.
Composition of the Risk Management Committee, its terms of reference, details of its meetings, and such other details are provided in the Report on Corporate Governance annexed.
> Corporate Social Responsibility Committee
CSR Committee is constituted in line with the provisions of Section 135 of the Act to formulate and recommend to the Board, CSR Policy indicating the activities to be undertaken by the Company as specified in Schedule VII of the Act, to recommend the amount of expenditure to be incurred on the activities mentioned in the CSR Policy, and to monitor the CSR Policy.
The brief outline of the corporate social responsibility (CSR) policy of the Company and the initiatives undertaken by the Company on CSR during the year are set out in “Annexure III” of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.
Composition of the committee, its terms of reference, details of the meeting and such other details are provided in the Report on Corporate Governance annexed. The Company has developed and implemented CSR Policy, which is made available on the website of the Company https://novaagri.in/investor-relations/policies/.
> IPO Committee
The IPO Committee was constituted on 27 February 2023.
Composition of the IPO Committee, its terms of reference, details of its meetings, and such other details are provided in the Report on Corporate Governance annexed.
No. of Board Meetings Held During the year
The Board of Directors duly met 14 (Fourteen) times during the F.Y. 2023-24. The Details are given in the “Corporate Governance Report” forming party of the Annual Report under “Annexure XII”. The gap between two Board Meetings has not exceeded 120 days.
Statutory Auditors
Pursuant to Section 139 and other applicable provisions of the Companies Act, 2013, the Members at the 16th AGM of the Company held on 30th September 2023, had approved re-appointment of M/s NSVR & Associates LLP, Chartered Accountants (Firm Registration No. 008801S/S200060), as the Statutory Auditors of the Company, for the second term of 5 years i.e. from the conclusion of 16th Annual General Meeting of the Company to till the conclusion of 21st Annual General Meeting to be held in the year 2028, to conduct statutory audit of the Company for the financial years commencing from 2023-24 to 2027-28 at a remuneration as may be determined and mutually agreed by the Board the Statutory Auditors.
Replies to the audit remarks;
The Auditors Report for the financial year ended 31 March 2024 does not contain any qualification, adverse remark or reservation and therefore, do not call for any further explanation or comments from the Board under Section 134(3) of the Companies Act, 2013.
Fraud reported by Auditors:
There are no frauds reported by auditors under sub-section (12) of section 143.
Cost Audit/ Maintenance of Cost Records
For the financial year 2023-24, your Company was required to maintain cost records, as specified by the central government under sub-section (1) of section 148 of the Act, is in respect of the activities carried on by the Company and conduct Cost Audit of the same. M/s M P R & Associates, Cost Accountants (Firm Registration No. 000413), Cost Auditor of the company conducted the audit of the cost records maintained by the company for financial year.
Further, Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors of your Company upon recommendation of Audit Committee appointed MPR & Associates, Cost Accountants, (Firm Registration No. 000413) as Cost Auditors in its meeting held on 2nd April, 2024 to conduct audit the cost records of the Company for the financial year 2024-25 at an annual remuneration of ' 42,000/-. Further, Board in its meeting held on 10th August, 2024 approved for increase in annual remuneration of Cost Auditors from f 42,000/- to f 1,00,000/-for FY 2024-25 and accordingly recommended the same for shareholders’ approval in the ensuing AGM.
Appropriate resolutions is being moved at the ensuing 17th AGM for ratification of the aforesaid remuneration for the year 2024-25, which the Board of Directors recommends for your approval.
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 upon recommendation of Audit Committee, has appointed P. S. Rao & Associates, Practicing Company Secretaries in its meeting dated 02 September 2023, to undertake the secretarial audit of the Company for FY 2023-24.
Secretarial Audit Report of the Company for the year 2023-24 in “Form MR-3” is annexed to this report as “Annexure VII”. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
Further, Pursuant to Section 204 of the Companies Act, 2013 read with Regulation 24A of SEBI (LODR) Regulations, 2015, the Board of Directors of your Company upon recommendation of Audit Committee appointed P. S. Rao & Associates, Practicing Company Secretaries as Secretarial Auditors in its meeting held on 2nd April, 2024 to conduct the secretarial audit for the financial year 2024-25.
Annual Secretarial Compliance Report
Company has obtained Annual Secretarial Compliance Report from P. S. Rao & Associates on 27th May, 2024, pursuant to SEBI circular no. CIR/CFD/CMD1/27/2019 dated 8th February, 2019; forms part of this Report as “Annexure VIII” and the same was also submitted to the Stock Exchange(s) on 27th May, 2024. The aforesaid Report do not contain any qualification, reservation or adverse remarks.
Secretarial Audit Report of Material Subsidiary
In terms of Regulation 24A of SEBI (LODR) Regulations, 2015, Secretarial Audit Report of the Nova Agri Sciences Private Limited, Material unlisted Subsidiary for the year 2023-24 in “Form MR-3” is annexed to this report as “Annexure IX” and does not contain any qualification, reservation or adverse remark.
Internal Auditors
Pursuant to Section 138 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, the Board of Directors had, upon recommendation of the Audit Committee has appointed M/s. V P S & ASSOCIATES (Firm Reg. No. 009280S), Chartered Accountants, as the Internal Auditors of the Company in its meeting 02 September 2023 to conduct internal audit for the financial year 2023-24.
The Internal Auditors submits their report on quarterly basis to the Audit Committee. Based on the report of internal audit, management undertakes corrective action in the respective areas and takes necessary steps to strengthen the levels of Internal Financial and other operational controls.
Further, Pursuant to Section 138 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, the Board of Directors of your Company upon recommendation of Audit Committee appointed V P S & ASSOCIATES (Firm Reg. No. 009280S), Chartered Accountants as Internal Auditors in its meeting held on 2nd April, 2024 to conduct the internal audit for the financial year 2024-25.
Internal Financial Control Systems And their Adequacy
Your Company has adequate internal control systems and procedures, designed to effectively control its operations. The internal control systems are designed to ensure that the financial and other records are reliable for the preparation of financial statements and for maintaining assets.
Your Company has well designed standard operating procedures (SOPs), considering the essential components of internal control as stated in the Guidance Note on Audit of Internal Controls over Financial Reporting, issued by the Institute of Chartered Accountants of India. Internal Auditor conducts audit, covering a wide range of operational matters and ensures compliance with specified standards.
The findings are reviewed by the top management and by the Audit Committee of the Board of Directors. Based on the deliberations with Statutory Auditors to ascertain their views on the financial statements, including the financial reporting system and compliance to accounting policies and procedures, the Audit Committee was satisfied with the adequacy and effectiveness of the internal controls and systems followed by the Company.
Material Changes and Commitments Affecting the Financial Position of the Company from the end of the Financial year and till the Date of this Report
No material change and commitment affecting the financial performance of the Company which occurred between the end of the financial year of the Company to which the financial statements relate and the date of this Report (i.e. from 1 April 2024 to 9 August 2024) except as mentioned below -
1. Mr. Sreekanth Yenigalla (DIN: 07228577) resigned on 2nd April, 2024 from the post of Whole-Time-Director including directorship accordingly ceased to be a Whole Time Director w.e.f. 2nd April, 2024.
2. Mr. Basanth Kumar Nadella (DIN: 08139510) resigned on 2nd April, 2024 from the post of Whole-Time-Director including directorship accordingly ceased to be a Whole Time Director w.e.f. 2nd April, 2024.
3. Mr. Rajesh Cherukuri (DIN: 09840611) was appointed as Additional Director designated as Whole-time Director w.e.f. 02nd April, 2024.
Subsequently, members approval was accorded by way of postal ballot on 14th June, 2024 for appointment of Mr. Rajesh Cherukuri (DIN: 09840611) as Whole-Time Director w.e.f. 02nd April, 2024.
4. Risk Management Committee was reconstituted w.e.f. 8th June, 2024 by way of resolution passed by circulation by Board of Directors of the Company as mentioned below:
Composition of Risk Management Committee w.e.f. 08-06-2024
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S.
No.
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Name of the Member
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Designation
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Position
|
|
1
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Mr. Kiran Kumar Atukuri
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Managing
Director
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Chairman
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|
2
|
Mr. Adabala Seshagiri Rao
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Independent
Director
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Member
|
|
3
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Mr. Ramesh Babu Nemani
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Independent
Director
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Member
|
|
4
|
Mr. Srinivasa Rao Mandalapu
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Chief Executive Officer
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Member
|
|
5
|
*Mr. Dhana Raj Boina
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Chief Technical Officer
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Member
|
* I nducted to the Risk Management Committee of the Company w.e.f. 08/06/2024
5. Board of Directors in their meeting held on
10th August, 2024, upon recommendation of
Nomination & Remuneration committee, recommended for re-appointment of Mr. Kiran Kumar Atukuri (DIN: 08143781) as a Managing Director of the Company for a period of 3 (three) years w.e.f. 13th November, 2024, Subject to approval of members of the Company in the ensuing shareholders meeting.
6. Board of Directors in their meeting held on
10th August, 2024, upon recommendation of
Nomination & Remuneration committee, recommended for re-appointment of Mrs. Swapna Kandula (DIN: 08719208) as an Independent Director of the Company for a second term of 5 (five) years w.e.f. 19th March, 2024, Subject to approval of members of the Company in the ensuing shareholders meeting.
7. Board of Directors in their meeting held on 10th August, 2024, upon recommendation of Nomination & Remuneration committee, recommended for ratification of the “Nova Agritech Limited Share Based Employee Benefit Scheme - 2022” (hereinafter referred to as “the Scheme”) and the issue of employee stock options (“ESOPs”) and/or share appreciation rights (“SARs”) to the eligible employees as may be determined by the Compensation Committee in accordance with the Scheme pursuant to Regulation 12(1) of Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (“SEBI (SBEBASE) Regulations, 2021”), as the Scheme was formulated prior to listing of its shares.
Appropriate resolutions for the Item No. 5, 6 and 7 as mentioned above are being moved at the ensuing 17th AGM, which the Board of Directors recommends for your approval.
Management Discussion & Analysis Report
The Management Discussion and Analysis Report, as required under Regulation 34 & Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided as “Annexure X”, and forms parts of this report.
Market Capitalisation Ranking
Below is the market capitalization ranking of the Company as on 31st March, 2024:
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Stock Exchange
|
as on 31.03.2024
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|
National Stock Exchange
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1440
|
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BSE Limited
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1571
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Note -
The Company falls under the category of “Top 2000 companies” and accordingly following compliances are applicable:
a) Minimum 6 (six) Directors on the Board of Directors of the Company.
b) The quorum for every meeting of the Board of Directors shall be 1/3rd of its total strength or 3 (three) directors, whichever is higher, including at least one independent director.
Corporate Governance Report
In compliance with Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Corporate Governance Report for the year 2022-23 as required under SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 of the Company is attached to this report as “Annexure XI.”
Certificate from Mr. M Ramana Reddy, Company Secretary in Practice (ICSI M. No. F11891 and C.P. No. 18415) from P. S. Rao & Associates, Hyderabad, w.r.t. compliance of conditions of Corporate Governance as stipulated under Schedule V (E) of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is annexed to the Corporate Governance Report under “Annexure XII - Certificates”.
Annual Return
Annual Return pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the copy of Annual Return for the year 2023-24, will be available on the website of the Company at https://novaagri. in/investor-relations/results-and-reports/.
Significant and Material Orders Passed by Regulators or Courts or Tribunals
During the year under review, no significant and material orders passed by regulators or courts or tribunals impacting the going concern status and company operations in future.
Risk Management Framework
Risk management is the process of identification, assessment and prioritization of risks, followed by coordinated efforts to minimize, monitor and mitigate/ control the probability and/ or impact of unfortunate events to maximize the realization of opportunities. The Board oversees Company’s processes for determining risk tolerance and review management’s action and comparison of overall risk tolerance to established levels. Major risks identified by the businesses and functions are systematically addressed through appropriate actions on a continuous basis.
The Company has a robust internal business management framework to identify, evaluate business risks and opportunities which seeks to minimize adverse impact on the business objectives and enhance the Company’s business prospects. The Company has an Internal Control System, commensurate with the size and scale of its operations.
The Company has constituted Risk Management Committee, the details of which are disclosed are in Corporate Governance Report. The Company has also developed and implemented a Risk Management Policy which is approved by the Board in its meeting held on 27th February, 2023 can be accessed from the website of the Company at https://novaagri.in/investor-relations/policies/.
Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3) (m) of the Companies Act,
2013 read with Rule 8 of The Companies (Accounts) Rules,
2014 is provided under “Annexure IV” forming part of this report.
Information to be Furnished Under Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
The ratio of the remuneration of each director to the median’s employee’s remuneration and other details in terms of Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are provided in separate annexure forming part of this report as “Annexure V.”
Disclosures, as required under Para A of Schedule V of SEBI (Listing Obligations and Disclosure) Requirements) Regulations, 2015
There are no transactions, with person(s) or entity(ies) belonging to the Promoter / Promoter Group which hold(s) 10% or more shareholding in the Company, as per Schedule V (2A) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, during the period under review, except the managerial remuneration being paid to Promoters namely Mr. Kiran Kumar Atukuri, Promoter and Managing Director and Mrs. Malathi Sirirpurapu, Promoter & Whole-Time Director of the Company, however do not holds 10% or more shareholding in the Company.
Insider Trading Regulations
Based on the requirements of SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended from time to time, the code of conduct for the Prohibition of Insider Trading, as approved by the Board is implemented by the Company. The Company, also, adopts the concept of trading window closure, to prevent its Directors, Officers, Designated Employees, their relatives from trading in the securities of the Company at the time when there is unpublished price sensitive information.
The Board has appointed Ms. Neha Soni, Company Secretary, as the Compliance Officer.
The Company has duly implemented the Structured Digital Database (SDD) facility as prescribed under SEBI (Prohibition of Insider Trading) Regulations, 2015.
Secretarial Standards
Your Company is in compliance with the Secretarial Standards on Meetings of the Board of Directors (SS - 1) and General Meetings (SS - 2) issued by The Institute of Company Secretaries of India and approved by the central government.
Industrial Relations
Your Directors are happy to report that the industrial relations have been cordial at all levels throughout the year. Your Directors record their appreciation for all the efforts, support, and co-operation of all employees being extended from time to time.
Human Resources
Your Company considers its human resources as the key to achieve its objectives. Keeping this in view, your Company takes utmost care to attract and retain quality employees. The human resources systems procedures and the organizational environment are all designed to nurture creativity, innovation and greater efficiencies in its human capital. Training is an integral element of the HR system. The employees are sufficiently empowered, and such work environment propels them to achieve higher levels of performance.
The unflinching commitment of the employees is the driving force behind the Company’s vision. Your Company appreciates the spirit of its dedicated employees.
Disclosure Under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) ACT, 2013
The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The policy can be accessed at the website of the Company at https://novaagri.in/investor-relations/policies/.
Summary of harassment complaints:
• No. of complaints received: Nil
• No. of complaints disposed off: Nil
Certifications
The following certificates are annexed herewith to this report as “Annexure XII - Certificates.”
• Compliance Certificate by Practicing Company Secretaries regarding compliance of conditions of Corporate Governance (Pursuant to Schedule V (E) of the SEBI (LODR) Regulations, 2015)
• Certificate by Practicing Company Secretaries regarding non-disqualification of directors (Pursuant to Schedule V(C)(10)(i) of the SEBI (LODR) Regulations, 2015)
• Certificate by Secretarial Auditor w.r.t. ESOP Scheme (Pursuant to Regulation 13 of the SEBI (SBEBASE) Regulations, 2021)
• Confirmation by Board on Independent Directors (Pursuant to Schedule V Para C clause (2)(i) of the SEBI (LODR) Regulations, 2015)
• Declaration by Chief Executive Officer for compliance with Code of Code of Board & senior management (Pursuant to Schedule V Para D of the SEBI (LODR) Regulations, 2015)
• Certificate of the Chief Executive Officer and Chief Financial Officer of the Company on financial statements and applicable internal controls (Pursuant to Regulation 17(8) and 33(2) (a) of the SEBI (LODR) Regulations, 2015)
Disclosures with Respect to the Demat Suspense Account/Unclaimed Suspense Account
The Company do not have any shares in the demat suspense account/unclaimed suspense account.
Disclosures of Certain Types of Agreements Binding Listed Entities
No agreement has been executed by the shareholders, promoters, promoter group related parties, Directors, KMPs and employees of the Company and its Subsidiary pursuant to Regulation 30A of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 which might Impact the management or control of the Company / Impose any restriction on the Company., except in normal course of business / Impose any liability on the Company., except in normal course of business.
Other Disclosures
During the year under review -
• Your Company has not revised financial statement(s).
• Business Responsibility and Sustainability Report (ESG reporting) is not applicable to the Company.
• No special rights have been granted to any shareholders of the Company, hence no compliance pursuant to Regulation 31B of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is required.
• There were no instances of failure of implementation of any Corporate Actions.
• Company has not defaulted in payment of interest and/ or repayment of loans to any of the financial institutions and/ or banks during the year under review.
• Your Company has not issued any non-convertible securities.
• Your company has only one class of shares i.e. equity shares. All the equity shares of the Company are held in dematerialized form.
The additional information required to be given under the Companies Act, 2013 and the Rules made thereunder, has been laid out in the Annexures and Notes attached to the Financial Statements forming part of this report.
Awards & Recognition:
During the period under review, Your Company is duly listed on BSE Limited and National Stock Exchanges of India Limited (hereinafter referred as “Stock Exchanges”) w.e.f. 31st January, 2024.
Appreciation:
The Directors express their appreciation to all employees of the various divisions for their diligence and contribution to performance. The Directors also record their appreciation for the support and co-operation received from bankers and all other stakeholders Last but not the least, the Directors wish to thank all shareholders for their continued support.
By the Order of the Board
For Nova Agritech Limited
Sd/- Sd/-
Rajesh Cherukuri Kiran Kumar Atukuri
Whole-Time-Director Managing Director
DIN: 09840611 DIN:08143781
Place: Hyderabad Date: 10th August 2024
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