To,
The Members
BASILIC FLY STUDIO LIMITED
CIN: L92100TN2016PLC103861 TOWER A, KRC COMMERZONE,
MOUNT POONAMALLEE ROAD, PORUR,
CHENNAI, TN 600116 INDIA
Your directors have pleasure in presenting the 08th Board's Report of our Company together with the Audited Statement of Accounts and the Auditors' Report of your company for the financial year ended 31st March 2024.
FINANCIAL HIGHLIGHTS:
STATE OF COMPANY'S AFFAIRS AND FUTURE OUTLOOK:
In today's vibrant and rapidly evolving business landscape, the strategic allocation and utilization of resources are pivotal to driving sustainable growth and success. By effectively leveraging human capital, financial assets, and technological infrastructure, organizations can not only minimize waste but also maximize productivity. Our dedicated focus on resource management, especially in optimizing employee costs, has led to robust profit margins. This disciplined approach has consistently delivered strong net profits, aligning with last year's achievements. Our steadfast commitment to operational efficiency ensures long-term financial stability and sets the stage for continued success.
Maintaining Momentum in a Challenging Market:
Despite facing international downturns within the VFX industry, Basilic Fly Studio Limited has demonstrated resilience, achieving consistent revenue in line with previous years. Notably, this fiscal year saw a revenue spike, showcasing the effectiveness of our proactive strategy of operational diversification. By strategically entering new market segments and genres, we successfully mitigated the impact of external challenges and capitalized on growth opportunities.
Financial Performance Highlights: - Standalone Basis:
Our ability to achieve such strong financial results, even with increased investment in our future capabilities, reflects the resilience of our business model and our strategic focus on driving sustainable growth. We remain confident in our trajectory and are committed to continuing to enhance shareholder value as we move forward.
Strategic Outlook:
Building upon this year's resilience, Basilic Fly Studio Limited remains confident in its ability to navigate dynamic market conditions. We are dedicated to fostering continuous innovation and strategic expansion, thereby ensuring that our company retains its position as a leader within the VFX industry.
Consolidated Performance and International Expansion:
- Consolidated Basis:
The Company anticipates a substantial increase in both revenue and profit from its overseas operations through its subsidiaries located in Vancouver and London.
The Company is well-positioned for sustained growth and success, driven by our commitment to innovation, strategic expansion, and operational excellence. We remain focused on delivering value to our stakeholders while adapting to evolving market dynamics.
Stock Exchange Listing:
This fiscal year has been a remarkable one for the Company, highlighted by our successful listing on the national stock exchange's SME platform. This strategic achievement perfectly aligns with our vision for accelerated growth and opens the door to exciting new investment opportunities. By entering the capital markets, we have strengthened our financial foundation, empowering us to pursue ambitious expansion plans. With these enhanced resources, we are poised to invest in Advanced technology, expand our talent pool, and explore new market avenues, all while continuing to deliver exceptional visual effects for our clients.
IPO Highlights
IPO Oversubscription: 286.61 times
Retail Individual Investor (RII) Subscription: 415.22 times Qualified Institutional Buyer (QIB) Subscription: 116.34 times
Non-Institutional Investor (NII) Subscription: 549.44 times Welcoming Industry Leaders:
The Directors are glad to announce the addition of two exceptional individuals who will greatly enhance both our creative and operational capabilities:
1. VFX Supervisor:
Mr. Dan Levitan is a seasoned VFX Supervisor with a prolific career spanning over three decades in the visual effects industry. His extensive experience includes working on more than 85 feature films, over 100 television series episodes, and a variety of national commercials and special venue projects. Mr. Dan has held key decision-making roles at major studios and companies such as Disney, DreamWorks, Warner Bros, Paramount/CBS, Hammerhead, Cinesite, FuseFX, and Psyop.
In his role as Executive Visual Effects Supervisor in the Company, Mr. Dan brings his comprehensive knowledge and expertise in overseeing every aspect of VFX production, from pre-production and script analysis to final shot delivery. His portfolio includes work on high-profile projects like Ambulance, Hacks, and The Hangover series, showcasing his ability to manage complex visual effects challenges across various media.
Mr. Dan's leadership and innovative approach to VFX will be instrumental in advancing the creative objectives at the company, ensuring the delivery of cutting-edge visual effects for top-tier film and TV productions.
2. Chief Operating Officer (COO):
Mr. Zameer Hussain as the Global EVP and Chief Operating Officer (COO) of the Company. His leadership will seamlessly blend artistic vision with strategic execution, fueling innovation and driving growth across our organization. With over two decades of experience in the visual effects (VFX) and creative sectors, Mr. Zameer is renowned for his visionary leadership. He has consistently nurtured a culture of continuous learning while mentoring teams to realize their full potential. Throughout his distinguished career, Mr. Zameer has played a pivotal role in major productions such as The Dark Tower, Pirates of the Caribbean: Dead Men Tell No Tales, and X-Men: Apocalypse. His work with top-tier VFX companies like ILM, Iloura, Double Negative, and MPC underscores his extensive expertise and profound impact on the industry.
Mr. Zameer's professional journey is defined by a unique blend of creative ingenuity and effective management, making him an ideal fit for this role. He has not only delivered breathtaking visual effects for high-profile projects but has also led large teams of artists with finesse, ensuring the successful completion of each project. His hands-on involvement and deep industry knowledge reflect his unwavering commitment to excellence.
The addition of these industry luminaries not only enhances the company's capabilities but also solidifies its commitment in delivering exceptional visual effects experiences to the clients. The entire technical team looks forward for their contribution as the Company continues to strive for excellence in all its future endeavors.
BUSINESS OUTLOOK; FISCAL 23-24
The Company has soared to remarkable heights in FY24, reaffirming its leadership in the visual effects industry.
Throughout the fiscal year, Basilic Fly delivered an impressive array of projects, spanning blockbuster films, binge-worthy series, and impactful commercials for renowned brands. The studio's diverse portfolio brought to life a captivating range of narratives, each characterized by stunning visuals and compelling storytelling.
Film Highlights:
• The Zone of Interest: A compelling drama exploring themes of morality and human nature set against a historical backdrop.
• Rebel Moon: A visually stunning sci-fi epic directed by Zack Snyder, featuring a new galaxy and an ensemble cast in a battle against a tyrannical empire.
• Heart of Stone: An action-packed thriller with a strong female lead, focusing on espionage and high-stakes missions.
• Blue Beetle: Captivated superhero fans with its engaging storyline, introducing a new hero to the cinematic universe.
• The Guardian of the Galaxy: Holiday Special: Provided Marvel enthusiasts with a charming and witty holiday- themed adventure featuring beloved characters.
• Franchise Success: Boosted the popularity of established franchises like "Mission Impossible” and "Wonka,” continuing their legacy with new installments.
• Original Features: Demonstrated versatility with original films such as "Genie,” "Heart of Stone,” and "The Book of Clarence,” each offering unique and fresh narratives.
• Series Success: - New Worlds and Favorites: Transported audiences to new realms with series like "Foundation 2” and "Constellation,” while captivating established favorites such as "Loki” and "The Winter King” continued to enthrall viewers.
• Sequel Excitement: Kept audiences on the edge of their seats with highly anticipated sequels like "Invasion” Season 2 and the captivating Western setting of "Hondo.”
• Critical Acclaim: Received critical acclaim for the successful sixth season of "The Crown.”
Impact in Advertising:
- Signature Flair: Brought its distinctive style to commercials for leading brands, showcasing elegance in campaigns for Lancome and technological innovation for Vodafone.
- Engaging Narratives: Crafted engaging narratives for brands like LEGO, Audi, and Lay's, resonating with audiences globally.
The Company concludes the fiscal year 2023-24 with a sense of immense pride in its achievements. The studio's unwavering dedication to quality and innovation has resulted in a year filled with spectacular releases that have left a lasting impression on audiences worldwide. With this momentum, Basilic Fly Studios is poised to continue pushing the boundaries of visual storytelling and captivating audiences for years to come.
VFX Industry Outlook: A Statement by the Board of Directors
The Board of Directors expresses optimism regarding the future of the VFX industry in fiscal year 2023-24, highlighting several significant factors driving its robust growth:
1. Surging Demand:
• Across various sectors including film, television, advertising, gaming, and virtual reality, the demand for high-quality visual effects continues to rise steadily.
• Evolving content consumption patterns necessitate captivating visuals, propelling the VFX industry forward.
2. Technological Leapfrogs:
• Advancements in computer graphics, rendering capabilities, and real-time VFX solutions are revolutionizing VFX production.
• These innovations empower studios to create immersive and realistic visual experiences, attracting new clients and market opportunities.
3. Streaming Powerhouse:
• The rapid expansion of streaming platforms has revolutionized the entertainment industry, leading to a significant increase in the production of original content. This surge in content creation has, in turn, driven an unprecedented demand for VFX services, as streaming platforms strive to captivate audiences with visually stunning and immersive experiences.
• Streaming giants like Netflix, Amazon Prime, Disney+, and others are investing heavily in high- budget productions that often rely on extensive visual effects to bring complex narratives and fantastical worlds to life. This investment not only fuels the growth of the VFX industry but also pushes the boundaries of what is technically and creatively possible.
• The continuous release of new series and films on these platforms creates a steady stream of opportunities for VFX studios, ensuring a consistent demand for their expertise. As streaming services continue to expand globally, the VFX industry is poised to grow alongside them, benefiting from the evolving content landscape.
4. Globalized Landscape:
• The VFX industry is becoming more interconnected as studios across the globe collaborate on international projects. This crossborder collaboration allows for the sharing of expertise, technology, and creative resources, enhancing the quality and efficiency of VFX production.
• This globalization opens up new markets and enables VFX companies to broaden their client base by tapping into emerging economies with rapidly growing entertainment industries. As a result, VFX studios can gain access to diverse projects and opportunities, fostering growth and innovation within the industry.
• Additionally, the globalized nature of the VFX industry helps companies mitigate risks by diversifying their revenue streams across different regions and markets, making them more resilient to economic fluctuations in any single area.
5. Remote Revolution:
• The COVID-19 pandemic accelerated the transition to remote work, fundamentally changing the VFX industry's workforce dynamics.
• The adoption of remote collaboration tools and cloud-based workflows has enabled VFX artists to work from virtually anywhere. This shift has not only broadened talent acquisition by allowing studios to tap into a global pool of skilled professionals but also streamlined project management, facilitating seamless collaboration across different geographical locations.
While the outlook is promising, the industry faces challenges such as intense competition, tight production schedules, and margin pressures. Additionally, rising production costs and talent shortages in specialized areas may pose hurdles for some VFX studios.
The Board emphasizes confidence in our company's ability to navigate these challenges by remaining agile, embracing technological advancements, and adapting to the evolving market landscape. We are well-positioned to capitalize on the numerous opportunities within the VFX industry in fiscal year 2023-24.
ANNUAL RETURN:
The MCA, through its Notification dated March 5, 2021, amended the Companies (Management and Administration) Rules, 2014, relieving the Company from the obligation of attaching the extract of the annual return with the Board's report in Form No. MGT-9.
In compliance with Section 134(3)(a), the Annual Return of the Company, prepared as per Section 92(3) of the Act for the financial year ended March 31, 2024, is accessible on the Company's website at http://www.basilicflystudio.com.
LISTING ON STOCK EXCHANGES:
The Company's Equity shares were successfully listed on the National Stock Exchange (EMERGE) Platform on September 11, 2023, also known as the SME Platform.
DIVIDEND AND TRANSFER TO RESERVES IN TERMS OF SECTION 134 (3) (J) OF THE COMPANIES ACT, 2013:
The Directors of the Company have decided not to declare any dividend for the current financial year. This decision reflects the company's strategic focus on reinvesting profits to fuel future growth and expansion initiatives, thereby conserving resources for sustainable development.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND:
The provisions of Section 125(2) of the Companies Act, 2013 do not apply as there was no dividend unclaimed and lying with the Company.
MEETINGS OF THE BOARD OF DIRECTORS:
The Board meets at regular intervals to discuss and decide on the Company/business policy and strategy apart from other Board business. In case of special and urgent business, if the need arises, the Board's or Committee's approval is taken by passing resolutions through circulation or by calling the Board / Committee meetings at a shorter notice, as permitted by law. The agenda for Board and Committee meetings includes detailed notes on the items to be discussed to enable the Directors to make an informed decision.
During the Financial Year 2023-24, Eleven (11) Board meetings were convened and held which is summarized below. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134(5) of the Companies Act, 2013 the Board of Directors, to the best of their knowledge and ability, confirm that for the financial year ended March 31, 2024:
a) In the preparation of the annual accounts, the applicable accounting standards had been followed and there are no material departures;
b) The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and / or loss of the Company for that period;
c) The directors had 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;
d) The directors had prepared the annual accounts on a going concern basis;
e) The directors had laid down internal financial control to be followed by the Company and that such internal financial control was adequate and operating effectively.
f) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
CEO AND CFO CERTIFICATION:
In accordance with Regulation 17(8) read with Part B of the Listing Regulations, the Chief Executive Officer (CEO)/ Managing Director (MD) and Chief Financial Officer (CFO) of the company have provided a certificate to the Board of Directors confirming the accuracy of the financial statements, cash flow statements for the Financial Year ended March 31, 2024, adequacy of internal control measures, and matters reported to the Audit Committee.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
As per Regulation 34 of the SEBI (LODR) Regulations, 2015, the Management's Discussion and Analysis Report are included in this Report as "Annexure - I” for detailed review.
STATUTORY AUDITORS AND REPORT THEREON:
The Auditors of the Company, M/s. L.U. KRISHNAN & Co, Chartered Accountants, have been appointed as the statutory Auditor of the company until March 31, 2027 by the members at the Annual General meeting held on 30th September 2022. The Statutory Auditors have expressed an unmodified opinion on both the Standalone and Consolidated Financial Statements for FY 2023-24,
without any qualifications, reservations, adverse remarks, or disclaimers. No fraud has been reported by the Statutory Auditors under Section 143(12) of the Act for the year under review.
RESOLUTION PASSED THROUGH POSTAL BALLOT:
During the year under review, no resolution was passed through postal ballot.
SECRETARIAL AUDITORS AND AUDITORS' REPORT:
Pursuant to Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s T P Shridar, Company Secretaries, has been appointed as the Secretarial Auditor for the Financial year 2023-24. The Secretarial Audit Report, received on April 25, 2024, contains an unmodified opinion without any qualifications, reservations, remarks, or disclaimers.
INTERNAL AUDITOR:
M/s KEK & Associates LLP, Chartered Accountants, have been appointed as the Internal Auditor of the Company for the FY 2023-24. The Internal Auditor has conducted the Internal Audit, and the Internal Audit report has been submitted to the company.
COMPLIANCE OF SECRETARIAL STANDARDS:
The Company has complied with the applicable Secretarial Standards in accordance with Section 118(10) of the Companies Act, 2013, and MCA circulars issued from time to time.
RESPONSE TO AUDITOR'S REMARKS:
The Company Director has confirmed that there are no qualifications, reservations, or adverse remarks in the Independent Audit Report as presented by the Statutory Auditors/Practicing Company Secretary in the Secretarial Audit Report. All details, along with relevant notes to the accounts and accounting policies, are self-explanatory and do not require further comments.
COST AUDIT / COMPLIANCE:
The Central Government has not prescribed the maintenance of cost records under Section 148(1) of the Act, in respect of the activities carried on by the Company.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013:
There were no loans, guarantees made by the Company under Section 186 of the Companies Act, 2013 during the Financial Year under review. The particulars of investments under Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014, for the financial year 2023-24 are given in Note 10 of the Notes to the financial statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:
All contracts, arrangements and transactions entered by the Company with related parties during FY 2023-24
(including any material modification thereof), were in the ordinary course of business and on an arm's length basis and were carried out with prior approval of the Board. Disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act,
2013 and Rule 8(2) of the Companies (Accounts) Rules,
2014 in Form AOC-2 is appended to the Board Report as Annexure- II
CORPORATE SOCIAL RESPONSIBILITY:
In compliance with the provisions of Section 135 of the Companies Act, 2013, read with rules made thereunder, the Board members, in their meeting dated 31/03/2023, formulated a CSR Policy and constituted a CSR Committee entrusted with overseeing CSR initiatives of the Company.
The CSR Committee comprises:
In accordance with Section 135 of the Companies Act, 2013, the Company has triggered Corporate Social Responsibility (CSR) obligations for the financial year 2023-24 due to the net profit of Rs. 27.74 crore recorded during the previous financial year (2022-23). Consequently, the Company is required to comply with the provisions of Section 135 of the Companies Act, 2013.
Under the proactive guidance of Mrs. Thiripurasundari Rajarathinam, Non-Executive Director of the Company (DIN: 07323583), seamless execution of CSR initiatives was ensured. Her leadership and strategic vision played a pivotal role in steering the company towards impactful and meaningful contributions to society. Through these initiatives, the Company demonstrates unwavering dedication to corporate social responsibility, driving forward sustainable development objectives while simultaneously enriching shareholder value. By leaving a lasting and transformative mark on society, BFS reaffirms its commitment to shaping a brighter, more inclusive future for all.
The Statutory Auditor, M/s. L.U. KRISHNAN & Co, Chartered Accountants, bearing Firm Registration No.001527S, of the Company have Computed the Profits under the provision of Sec 198 of the Companies Act, 2013. Pursuant to Sec 135 (5) of the Companies Act, 2013, they informed that the company needs to spend Rs. 24.75 lacs towards CSR activities.
The company has disbursed the CSR amount of Rs. 24.75 lacs to the following trusts:
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION:
There have been no material changes or commitments that have impacted the financial position of the Company between the close of FY 2023-24 and the date of this report, except for the following:
- Initial Public Offering (IPO): Shareholders authorized the company's IPO through an Extraordinary General Meeting (EGM) held on June 14, 2023. Subsequently, amendments were made to comply with listing requirements.
- Draft Red Herring Prospectus (DRHP): The Board of Directors approved the Draft Red Herring Prospectus (DRHP) on July 17, 2023. Following in-principle approval from the National Stock Exchange (NSE) for the DRHP, the Board finalized and filed the Red Herring Prospectus (RHP) with the NSE and other relevant authorities on August 31, 2023.
- Final Prospectus Approval: The Board approved the final Prospectus on September 7, 2023. The NSE granted final approval for listing the company's equity shares on the NSE SME platform on September 11, 2023.
- Equity Shares Issuance: The company issued its equity shares through an initial public offer of 68,40,000 equity shares of face value of ? 10 each for cash at a price of ? 97 per equity share, aggregating to ? 6634.8 lakh. This comprised a fresh offer of up to 62,40,000 equity shares aggregating to ? 6052.80 lakh and an offer for sale of 6,00,000 equity shares by the selling shareholders aggregating to ? 582.00 lakh.
- Acquisition of Company: The wholly owned subsidiary of our Company i.e., Basilic Fly Studio UK Private Limited has acquired a 70% stake in a leading visual effects studio with a focus on design and collaboration i.e., One of US Limited. It is also a Bafta & Emmy award-winning company with over 20 years in this industry with a strong presence in both the European and North American Film/TV industry.
One of US Limited was incorporated and registered in England and Wales with company number 05313949, having office at 16 Tabernacle Street, London, England, EC2A 4DD. The Turnover of the Company as on December 31, 2023, is GBP 29.42 million.
This acquisition has been a significant factor in the growth of our Company. It has been the prime factor for the global presence of the Company by merging two studios known for their innovation and exceptional quality in visual effects.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:
The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules,
2014 are as under:-
TECHNOLOGY ABSORPTION
(C) Foreign exchange earnings and Outgo:
The Foreign Exchange earned in terms of actual inflows during the year and the Foreign Exchange outgo during the year in terms of actual outflows.
Particulars
1) Earnings in foreign currency
Income from consulting Service Overseas
2) Expenditure in foreign currency
STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY:
The Company has framed a policy for management and mitigation of business risks which is reviewed on a periodical basis. Business risks and mitigation strategy are discussed in the Board meetings on a periodical basis.
INFORMATION ABOUT HOLDING / SUBSIDIARY/ JV/ ASSOCIATE COMPANY:
As defined under the Act, the company as on 31st March 2024, has two Subsidiary i.e., M/s Basilic Fly Studio Canada Ltd bearing Registration No.1313688, incorporated on (02/07/2021) & ,M/s Basilic Fly Studio UK Private Limited bearing Registration No.14029594 incorporated on (06/04/2022).There has been no material change in the nature of the business of the subsidiary. The consolidated financial statement has been prepared in accordance with the relevant accounting standards and a separate statement containing the salient features of the financial statement of its subsidiary pursuant to provision of Section 129(3) of the Companies Act, 2013 read with rule 5 of the Companies (Accounts) Rules 2014, in form AOC-1 is attached along with the financial statement of the company as Annexure-II.
The Company does not have any Holding, Joint venture or Associate Company.
Revenue From operation(gross)
M/s Basilic Fly Studio Canada Ltd is engaged in the business of VFX Activity in the same line as its Parent Entity. For the year ended 31st March, 2024, the Company has earned a total income of Rs. 2,35,49,279.99/- and has made Profit/ (Loss) after Tax of the Rs. 19,65,662.43 /-. The financial and other details of the said Subsidiary for the Year ended 31-03-2024 are as under:
Further M/s Basilic Fly Studio UK Private Ltd is engaged in the business of VFX Activity in the same line as its Parent Entity. For the year ended 31st March, 2024, the Company has earned a total income of Rs.8,98,87,286.85/- and has made Profit/ (Loss) after Tax of the Rs.12,41,723.60/-. The financial and other details of the said Subsidiary for the Year ended 31-03-2024 are as under:
COMPANY'S POLICY RELATING TO DIRECTOR'S APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES:
The provisions of Section 178(1) relating to constitution of Nomination and Remuneration Committee is applicable to all listed Company as at the end of the Financial Year, the Company got listed in NSE Stock exchange under SME Emerge platform. The Company had in its Board Meeting held on 31st March 2023 formulated the Nomination and Remuneration Committee of the Board and the Company has also devised the policy relating to appointment of Directors, payment of Managerial remuneration, Directors qualifications, positive attributes, independence of Directors and other related matters as provided under Section. 178(3) of the Companies Act, 2013.
The Nomination and Remuneration Committee held Board meeting on 23rd May 2023 to accept the Resignation of Chief Financial Officer, Mr. Vijay Pichaimuthu (having PAN: ABOPV9998B) and approved the Appointment of Mr. M Ramesh (having PAN: AHWPR6977n) as the Chief Financial Officer of the Company.
RECEIPT OF REMUNERATION OR COMMISSION BY THE MANAGING / WHOLE TIME DIRECTOR FROM ITS HOLDING OR SUBSIDIARY COMPANY.
The Managing Director and Whole-Time Directors of the Company do not receive any remuneration or commission from any of its Subsidiary Companies.
APPOINTMENT AND RESIGNATION OF DIRECTORS OR KEY MANAGERIAL PERSONNEL:
A. COMPOSITION OF THE BOARD OF DIRECTORS:
The Board of the Company is comprised of experienced persons with proven competence and integrity. Besides the experience, strong financial acumen, strategic astuteness, and leadership qualities, they have a significant degree of commitment towards the Company and devote adequate time to the meetings and preparation.
During the year under review, the composition of the Board has been changed by the Resignation of Independent Director Mr. Subramaniam Krishnan on 23rd October 2023. The resolution for the resignation of Mr. Subramaniam Krishnan has been passed by the Board of Directors through Resolution by Circulation. As on the date of the report, the Board comprises, 2 Independent, 1 Non- Executive and 3 Executive Directors.
The Board of Directors of the Company consists of Mr. Balakrishnan (DIN:06590484), Managing Director, Mrs. Sundaram Yogalakshmi (DIN:07323404), and Mr. Duraiswami Prabhakar (DIN: 09831080), Whole-time Directors, Mrs. Rajarathinam Thiripurasundari (DIN:07323583), Non- Executive Director, Mr. Vengarai Seshadri Sowrirajan (DIN:00434044) and Mr. Jitendra Kumar Pal (DIN: 08567622), are Independent Directors. The composition of the Board of Directors is in compliance with Section 149 of the Companies Act, 2013.
During the year under review the company the following changes are made to the Board of Directors:
KEY MANAGERIAL PERSONNEL
As on the date of this report, the following are Key Managerial Personnel ("KMPs") of the Company as per Sections 2(51) and 203 of the Act:
Note: The former Company Secretary Mr. Nikhil Midha resigned from the company as on 2nd July, 2024. Post his resignation the new Company Secretary was appointed w.e.f 5th July 2024
CHANGES IN DIRECTOR AND KEY MANAGERIAL PERSONNEL:
During the period under review the following changes have been made to the Board of Directors of the company:
> CFO Transition: Mr. Vijay Pichaimuthu (PAN: ABOPV9998B) resigned as Chief Financial Officer (CFO) on May 23, 2023. The Board accepted his resignation and appointed Mr. M Ramesh (PAN: AHWPR6977N) as the new CFO.
> Board Resignation: Independent Director Mr. Subramaniam resigned on October 23, 2023, due to personal reasons and commitments. The Board accepted his resignation through a resolution circulated on the same date.
There was no appointment of Additional, alternate Director to fill casual any vacancy during the year.
RECONCILIATION OF SHARE CAPITAL AUDIT:
Pursuant to Regulation 76 of Securities and Exchange Board of India (Depository Participants) Regulations, 2018 [erstwhile: vide SeBI circular no. D$CC/ FIT TC/CIR-16/2002 dated December 31, 2002 read with Securities and Exchange Board of India (Depositories Participants) Regulations, 1996], a Company Secretary in practice carries out audit of Reconciliation of Share Capital on a quarterly basis to reconcile the total admitted equity share capital with the National Securities Depository Limited (NSDL) and the Central Depository Services (India) Limited (CDSL) and the total issued and listed equity share capital. The audit report confirm that the total issued/paid up capital is in agreement with the total number of shares in physical form and total number of dematerialized shares held with NSDL and CDSL. The said report, duly signed by practicing company secretary is submitted to stock exchange where the securities of the Company are listed within 30days of the end of each quarter and this Report is also placed before the Board of Directors of the Company.
CORPORATE GOVERNANCE REPORT:
As per Regulation 15 of SEBI (LODR) Regulations, 2015, the applicability with respect to Corporate Governance Report does not arise.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR):
The Business Responsibility and Sustainability Report (BRSR) pursuant to Regulation 34(2)(f) of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 is not applicable to the Company for the financial year ended as on 31st March 2024.
DECLARATION OF INDEPENDENT DIRECTORS A STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD TO INTEGRITY, EXPERTISE AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORS APPOINTED DURING THE YEAR:
Mr. Vengarai Seshadri Sowrirajan (DIN: 00434044) and Mr. Jitendra Kumar Pal (DIN: 08567622) are Independent Directors on the Board.
All the Independent Directors of the Company have submitted declarations pursuant to Section 149(7) of the Act, that each of them meets the criteria of independence as provided in Section 149(6) of the Act and they continue to comply with the Code of Conduct laid down under Schedule IV of the Act.
In the opinion of the Board, there has been no change in the circumstances which may affect their status as Independent Directors of the Company and the Board is satisfied with the integrity, expertise, and experience (including proficiency in terms of Section 150(1) of the Act and applicable rules thereunder) of all Independent Directors on the Board. Further, in terms of Section 150 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company have included their names in the data bank of Independent Directors.
COMMITTEE OF THE BOARD
The Company has listed its equity shares in the Emerge Platform of the National Stock Exchange of India Limited (NSE EMERGE) as part of funding its next phase of growth. The IPO and consequent listing of shares will result in increase in the paid-up capital of the company besides applicability of additional compliance requirements both under the Companies Act, 2013 and SEBI Listing Regulations. The constitution of certain statutory committees of the Board is one of the prominent compliance requirements in this regard. Accordingly, the Board of directors of the Company has constituted the following committees of the Board at its meeting held on 31st March 2023.
a) Audit Committee
b) Nomination and Remuneration Committee
c) Stakeholders Relationship Committee
d) Corporate Social Responsibility Committee
e) Risk Management Committee
The composition and terms of reference of each of the above committee is provided below as on the report date:- a) AUDIT COMMITTEE
A qualified and independent Audit Committee has been set up by the Board in compliance with the requirements of Section 177 of the Act.
As on March 31, 2024, the Committee comprises of two (2) Independent Directors and one(1) executive Director is as follows:-
Mr. Nikhil Midha (former Company secretary of the company, resigned from company as on 2nd July 2024), Company Secretary acts as the Secretary of the Committee
The primary objective of the Committee is to monitor and provide effective supervision of the Management's financial reporting process, to ensure accurate and timely disclosures, with the highest levels of transparency, integrity, and quality of financial reporting. The powers, role and terms of reference of the Committee are in consonance with the requirements mandated under Section 177 of the Companies Act, 2013 and applicable Regulations.
The Audit Committee has held 7 meetings during the Financial Year 2023-24 which is summarized below. The Audit Committee has considered and recommended the Board on different matters which fall under its preview.
Name of Directors
b) NOMINATION AND REMUNERATION COMMITTEE (NRC)
The Nomination and Remuneration Committee ("NRC”) of the Board is entrusted with the responsibility for developing competency requirements for the Board, based on the industry and strategy of the Company. The Board composition analysis reflects an in-depth understanding of the Company, including its strategies, environment, operations, financial condition, and compliance requirements.
Pursuant to the provisions of Section 178 of the Act has formulated, and the Board has adopted a Policy on the appointment and removal of Directors including the Board Diversity Policy ("NRC Policy”). NRC has also formulated the criteria for determining qualifications, positive attributes, and independence of Directors, which has been embedded in NRC Policy.
As on March 31, 2024, the Committee comprises of three (3) Independent Directors and one (1) executive Director is as follows:-
The Nomination and Remuneration Committee of the Board of Directors recommends the nomination of Directors, carries out evaluation of performance of individual Directors, recommends remuneration policy for Directors, Key Managerial Personnel and other employees and also deals with the governance related matters of the Company.
It oversees the implementation of the nomination, remuneration and governance policies of the Company, reviews the effectiveness of such policies from time to time and recommends revisions as and when deemed necessary or expedient.
One meeting of the Nomination and Remuneration Committee was held during the year under review which is summarized below to consider and approve the Resignation of Mr. Vijay Pichaimuthu, Chief Financial Officer and to consider and recommend appointment of Mr. Ramesh M, as Chief Financial Officer.
STAKEHOLDERS' RELATIONSHIP COMMITTEE (SRC)
The Stakeholders' Relationship Committee has been formed by the Board of Directors, at the meeting held on March 31, 2023. As on 31.03.2024 the Stakeholders Relationship Committee comprises of two (2) Independent Directors and one (1) executive Director is as follows:-
Mr. Nikhil Midha (former Company secretary of the company, resigned from company as on 2nd July 2024), Company Secretary acts as the Secretary of the Committee.
The role and terms of reference of the Committee are in consonance with the requirements mandated under Section 178 of the Companies Act, 2013 and applicable Regulation.
One meeting of the Stakeholders Relationship Committee was held during the year which is summarized below to take note of IPO related Investor Grievances and redressal status of Investor grievances for the quarters ended 30th September 2023 and 30th December 2023.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Company is a strong believer of giving back to the community and acknowledging the role played by communities in the growth of our business. The Company stand 'For Better Living' which embeds actions towards For Better Communities, For Better Nutrition, For Better Sourcing, and For Better Planet.
The composition of the CSR Committee as on 31.03.2024 is as follows:-
One meeting of the Corporate Social Responsibility Committee was held during the year which is summarized below for the Constitution of CSR Execution Group consisting of Volunteers Nominated by the company for smoother execution of CSR Activities and to consider and recommend the Board of Directors CSR Expenditure for FY 2023-24.
RISK MANAGEMENT COMMITTEE (RMC)
The Board of Directors of the Company at its meeting held on 31.03.2023 has formed a Risk Management
Committee to frame, implement, and monitor the risk management plan for the Company. The Committee is responsible for identifying elements of risk reviewing the risk management plan and ensuring its effectiveness. The Committee shall be responsible to considers the risks that impact the mid-term to the long-term objectives of the business, including those reputational in nature.
The composition of the Risk Management Committee is as on 31.03.2024 follows:-
No meeting of the Risk Management Committee was held during the financial year.
BOARD POLICIES
We seek to promote and follow the highest level of ethical standards in all our business transactions guided by our value system. The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, mandates the formulation of certain policies for all listed companies. The corporate governance policies are available on the Company's website, at Investor Corner - Basilic Fly Studio Limited. The policies are reviewed periodically by the Board and are updated as needed.
Key policies that have been adopted by the Company are as follows:
VIGIL MECHANISM POLICY (Whistleblower Policy):
The Company has formulated the Whistleblower Policy in line with the mandated regulatory requirements - Sarbanes Oxley Act (SOX), 2002 & Companies Act, 20l3 - which mandates listed companies to establish a "vigil mechanism” for reporting genuine concerns without fear of censure. All Employees and Directors of the Company who are associated with the company can raise concerns regarding malpractices and events which may negatively impact the company.
Details of the Vigil Mechanism Policy can be accessed through the Company's website at Investor Corner - Basilic Fly Studio Limited. This mechanism provides directors and employees with a platform to report their genuine concerns.
CORPORATE SOCIAL RESPONSIBILITY POLICY
The policy outlines the Company's strategy to bring about a positive impact on society at large to eradicate hunger, poverty and malnutrition; promote preventive health care and sanitation and making available safe drinking water, promoting gender equality and empowering women.
The Companies vision on CSR policy are:
1. The Company completely endorses reliability. It is committed to conduct business in a true, fair and ethical manner and takes up the responsibility to create a good impact in the society it belongs.
2. The Company is committed towards improving the quality of lives of people in the communities in which it operates because society is an essential stakeholder and the purpose of its existence. The Company believes that giving back to the society through CSR activities is its moral duty.
3. The Company aims to fulfil the requirements laid down under the Companies Act, 2013 and act diligently to comply with all its Rules and Regulations on CSR.
Details of the CSR Policy of the Company can be accessed through the Company's website at Investor Corner - Basilic Fly Studio Limited.
DIVIDEND DISTRIBUTION POLICY
The Company has adopted the Dividend Distribution Policy in accordance with Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulation, 2015, and shall act as guidance to the board or company during the recommendation or declaration of dividends. It establishes the principles to ascertain amounts that can be distributed to equity shareholders as dividend by the Company as well as enable the Company strike balance between pay-out and retained earnings, in order to address future needs of the Company. The objective of this policy is to lay out the criteria and parameters that are to be considered by the Board of Directors of the company when deciding on the declaration or recommendation of a dividend from time to time. This policy is applicable to all dividends declared or recommended on the equity shares of the company, including interim dividends and final dividends.
Details of the Dividend Distribution Policy can be accessed through the Company's website at Investor Corner - Basilic Fly Studio Limited.
MATERIALITY POLICY
This Materiality Policy (herein after referred to as "Policy'') has been formulated to define the materiality policy for identification of group companies, litigation and outstanding dues to creditors in respect of BASILIC FLY STUDIO LIMITED ( herein after referred to as "Company”) for the purposes of relevant disclosure in the Offer Document (defined herein below) pursuant to the requirements under Schedule VIII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (as amended from time to time) (SEBI ICDR Regulations”).
Details of the Materiality Policy can be accessed through the Company's website at Investor Corner - Basilic Fly Studio Limited.
INTERNAL FINANCIAL CONTROLS:
Your Company has implemented an adequate system of internal control as mandated by Section 134(3)(q) of the Companies Act, 2013, read with Rule 8(5)(viii) of Companies (Accounts) Rules, 2014. This system is commensurate with the size, scale, nature, and complexity of the business, ensuring the safeguarding of all assets and investments against loss from unauthorized use or disposition.
These internal control systems provide reasonable assurance regarding the following:
- Provision of financial and operational information
- Safeguarding of Company assets
- Adherence to management policies
- Ensuring compliance with applicable laws and regulations
CODE OF CONDUCT
In compliance with Companies Act,2013 the Board of Directors of the Company has laid down a Code of Conduct (Code) for the Directors and Senior management employees. The Code is also posted on the Website of the Company at https://www.basilicflystudio.com/
INVESTOR COMPLAINTS DURING THE YEAR
The Company received few complaints from the shareholders during the year which were resolved properly by the Company. Company has registered itself on SCORES and endeavors to resolve all investor complaints received through SCORES within the stipulated period of receipt of the complaint.
CODE FOR PREVENTION OF INSIDER TRADING
The Securities and Exchange Board of India ("SEBI”) has, in pursuance of the powers conferred on it under the Securities and Exchange Board of India Act, 1992 ("SEBI Act”), has formulated the SEBI (Prohibition of Insider Trading) Regulations, 2015 ("the Regulations”). These regulations are applicable to all the companies whose securities are listed on Stock Exchange(s) and all unlisted companies whose securities are proposed to be listed on Stock Exchange(s).
The Company, being a listed company, is required to conform to the minimum standards prescribed by the Code of Conduct ("Code”) for the purpose of regulating, monitoring and reporting Trading by insiders. Accordingly, the Board of Directors of the Company at its meeting held on May 23, 2023 approved and adopted the Code.
The Regulations prohibit an Insider from Trading in the securities of a company listed on stock exchange on the basis of any Unpublished Price Sensitive Information.
The Code is also posted on the Website of the Company at Microsoft Word - BFS Code_of_Conduct_for_Insider_ Trading[1] (basilicflystudio.com).
PARTICULARS OF EMPLOYEES:
The statement containing details of employees as required under Section 197(12) read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 ('the Rules'), as amended, drawing remuneration exceeding the limit as specified in Rule 5(2) and the statement as required under Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure III attached to this report.
According to Section 197(14) of the Act, no remuneration has received by any of the Executive Directors from the Company's subsidiary companies during FY 2023-24.
DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 [14 OF 2013]:
The Company has adopted zero tolerance for sexual harassment at the workplace and has formulated a policy on prevention, prohibition, and redressal of sexual harassment at the workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules thereunder for prevention and redressal of complaints of sexual harassment at workplace.
As a part of the policy for Prevention of Sexual Harassment in the organization, the Company has in place an Internal Complaints Committee (ICC) for prevention and redressal of complaints of sexual harassment of women at work place in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013 and relevant rules there under. No complaints were received by the Committee during the period under review. DEPOSITS:
During the year under review, the Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. The Company has received unsecured loans from Directors in the earlier years, and the outstanding balance stands as on March 31,2023 is Rs.10,50,959/-. The details of the same have been disclosed in Note No.3 (Long term Borrowings) of the Financial Statement. The relative of director from whom money is received have furnished to the company at the time of giving the money, a declaration in writing to the effect that the amount is not being given out of funds acquired by him by borrowing or accepting loans or deposits from others.
CHANGE IN THE NATURE OF BUSINESS:
During the year under review, there has been no change in the nature of the business of the Company and the company continues to engage in the same line of business activities.
VOLUNTARY REVISION OF FINANCIAL STATEMENTS OR BOARD REPORT.
No revision of financial statement or board's report made which need to be disclosed in the board's report pursuant to third proviso to Sub-section (1) of Section 131 of the Companies Act,2013.
SHARES CAPITAL:
AUTHORIZED & PAID-UP SHARE CAPITAL:
The Company's authorized share capital remained unchanged at ?25,00,00,000 throughout the year, divided into 2,50,00,000 Equity Shares of ?10 each.
Following the IPO allotment on September 7, 2023, the Company's paid-up share capital increased from ?17,00,00,000 (1,70,00,000 shares) to ?23,24,00,000 (2,32,40,000 shares). These newly issued shares carry the same rights and privileges (pari-passu) as the existing equity shares.
No additional shares, instruments convertible into shares, shares with differential voting rights, or sweat equity were issued during the year.
BUY BACK OF SECURITIES:
The Company did not buy back any of its securities during the year under review.
SWEAT EQUITY:
No Sweat Equity Shares were issued by the Company during the year under review
BONUS SHARES:
No Bonus shares were issued by the Company during the year under review.
EMPLOYEES STOCK OPTION PLAN:
During the year ender review, the Company has not provided any Stock Option Scheme to the employees during the year under review.
DEMATERIALISATION OF SHARES
During the year ender review, all the shares of the company are held and traded in Dematerialized form only. REGISTRARS AND SHARE TRANSFER AGENTS Purva Sharegistry (India) Private Limited CIN: U67120MH1993PTC074079 Address:- 9, Shiv Shakti Industrial Estate,
J.R.Boricha Marg Lower Parel (East),
Mumbai, 400011, Maharashtra, India,
Telephone No.022-23018261,
Email Id: support@purvashare.com
All maters connected with Share Transfer, Transmission, Change of address, duplicate share certificates and other related matters are handled by the RTA. Accordingly, shareholders holding equity shares in physical form are urged to have their shares dematerialized so as to be able to freely transfer them and participate in various corporate actions. Members can contact the Company or M/s. Purva Sharegistry (India) Private Limited for assistance in this regard.
DISCLOSURE WITH RESPECT TO DEMAT SUSPENSE ACCOUNT / UNCLAIMED SUSPENSE ACCOUNT:
As of the current date, no shares of the company are held in Demat Suspense Account or Unclaimed Suspense Account.
STATEMENT OF DEVIATIONS / VARIATIONS:
During the year under review, there have been no deviations or variations in the utilization of IPO proceeds, in compliance with Regulation 32 of SEBI (LODR) Regulations, 2015, regarding certain terms of the Initial Public Offering (IPO) of the Company.
CREDIT RATING:
As the company's Equity shares are listed on the Stock Exchange, the applicability of Credit Rating is not relevant to the company.
ANNUAL EVALUATION OF THE BOARD, COMMITTEES, AND INDIVIDUAL DIRECTORS:
The Board of Directors has conducted an annual evaluation of its own performance, Board Committees, and individual directors, including Independent Directors, as required by the Companies Act, 2013.
Based on inputs from all directors regarding board composition, structure, effectiveness of board processes, information, and functioning, the evaluation of the Board's performance was conducted.
Similarly, the performance of the committees was evaluated by the Board after obtaining input from committee members on composition, effectiveness, and meeting procedures.
In a separate meeting of Independent Directors, the performance of Non-Independent Directors, the Board as a whole, and the Chairman of the Company were evaluated, considering the views of Executive directors and Non-Executive Directors.
The Nomination & Remuneration Committee and the Board reviewed the performance of individual directors based on criteria such as their contribution to board and committee meetings, preparedness, meaningful contributions, and constructive inputs.
COMPLIANCE OFFICER DETAILS AND ADDRESS FOR CORRESPONDENCE
Ms. Swati Sharma, Company Secretary & Compliance Officer
(erstwhile: Mr. Nikhil Midha former Company Secretary resigned w.e.f 2nd July 2024)
Registered Office:
Tower A, KRC Commerzone Mount Poonamallee Road, Porur Chennai - 600116 Tamil Nadu Phone No. 044 6172 7700
SIGNIFICANT OR MATERIAL ORDERS PASSED BY REGULATORS / COURTS:
During the year under review, there were no significant and material orders passed by the Regulators / Courts that would impact the going concern status of the Company and its future operations.
DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR:
During the year under review, no application or proceeding made by or against the company is pending before any Adjudicating Authority under the Insolvency and Bankruptcy Code, 2016 (31 of 2016).
DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL
INSTITUTIONS ALONG WITH THE REASONS THEREOF:
Not Applicable
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB- SECTION (12) OF SECTION 143 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT:
The Statutory Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Act, in the year under review.
ACKNOWLEDGEMENT:
The Directors wish to convey their deep appreciation to all the employees, customers, vendors, investors and consultants/advisors of the Company for their sincere and dedicated services as well as their collective contribution to the Company's performance.
The Directors thank the Government of India, Governments of various States in India, Governments of various Countries, and concerned Government departments/ Regulatory Authorities for their co-operation. The Directors appreciate and value the contribution made by every member, employee, and their family of the Company.