I wonder, why isn’t any of the seniors here commenting on the issue raised by me!! 
Anyhow, I explored the answers by speaking to a trusted CA/CS. here are the views:
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The question: Why did the promoters, from 2010 - 2015, kept proposing Special Resolution for Donation (of seemingly higher amount vis-a-vis profits that the company then earned) and the resolution kept getting rejecting in the AGM, remains unclear!.. As per rules, in the AGM a Special Resolution can get passed by a show of hands / Vote count; And any shareholder (incl. promoters) if feels that the majority by way of a show of hands is affecting his rights, then he can ask for voting by a count of voting rights/shareholding %;… thus, even if by some way, the hand count went against the proposed special resolution for donation, the promoters could still have it passed by opting for by way of voting rights, which of course they would always win o back of 70%+ shareholding (unless, they were too embarrassed to ask for it!).
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Regarding, legality in the donation of INR 5.29 Cr. made by management (from Asset / Land sale of 7.17 Cr.):… As per section 181 of Companies Act, 2013, the Board of Directors are allowed to donate up to 5% of average net profits of immediate 3 preceding financial years; However, if the Company wants to donate in excess of stated 5%, it needs the shareholder’s approval; and if the approval is not given by shareholders, then donating more than this stated limit would be a violation of the law. Further, Section 182 provides the Board is authorized to donate to a political party without any limit.… Now, in regards to these provisions, re-looking at the INR 5.29 Cr. donation, you may note that it’s mentioned in the 2018 AR that of the INR 5.29 Cr donation, INR 4.00 Cr. was donated to BJP (i.e. it’s ok as there is no limit to political donation under law) and the balance INR 1.29 Cr. seems like usual donation (which again is well below 5% limit of avg immediate preceding 3 yrs profit, as provided in law).
. . . with the above info, I am making peace with my mind. I think the company is in such a space that when it was growing it constantly needed to appease some institutions without which they would have stumbled (e.g. in 2011 AR the management stated Downfall in gross receipts was due to obstacles created by some local miscreants which effected the production for approx. four months); we know how all this works in India and how one has to use the money to manage such situations by the support of people in power. The management went to Gujarat and made its mark, and surely on the way they had to make some people happy; over the years they have proven their metal by performance and that’s good enough!.
So, let’s agree to overlook all these seeming issues with donations, and move on . . .
mainey hee issue raise kiya; aur mainey hee band bhi karr diya… lol 
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. . . this post is in in continuation to my above post (about donations); it’s just to close the loop in my mind and to address the academic curiosity!
So, I found the answer to my wandering why did the promoter’s easily let go of the “NOT passing of Special Resolution for permission to Donate” if once not approved in AGM (as I explained they could have opted for passing by way of voting rights, albeit a bit embarrassing) . . .
Refer above 
, an extract from 2011 - 12 AR: After the Special Resolution (for donation) failed in AGM in late 2011, the Promoters subsequently opted for Postal Ballot (adjudged basis the voting rights %) in FEB 2012, and among the other agendas, they got item no. 3 (mentioned above) approved for the funding to charitable purposes by 99.96% voting in favor; thereby, not requiring anymore to present the same Special Resolution again in the next AGM
. . . they really love donating!! 
. . . the loop stands closed!
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Hi Gaurav,
Apologies for the delayed response as I was busy with result season.
Except for FY11, Fy12 and FY18, I dont think the number is too big for rest of the years. Also, sometimes many companies take approval from shareholders during AGM for much larger amounts than what they actually plan as they dont want to go back to the shareholders again. I can give few examples like taking approval for higher debt limits, fund raising etc. Furthermore, I would be more skeptical for companies if donations are high if the company works directly with Government or supplying to PSUs which is not the case with Bharat Rasayan. Also, I feel in many small and mid cap companies, one can find one or the other issues. One can go through old threads of many of the successful VP companies to understand that many had one or the other issues. It becomes an individual’s call to consider what really is a deal breaker.
Furthermore, in case of companies which are not that transparent and don’t do conference calls etc, it becomes difficult to transfer the confidence to others. One has to do more scuttlebutt, supplier/dealer checks, industry feedback, attend AGM etc to get more confidence. However, in case of companies like Bharat Rasayan, management shares most of the information during AGM.
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Hi Soham,
I missed your post. Normally, such projects start with low volumes and take years to scale up especially in case of Japanese players. During the AGMs, management had indicated that they had been supplying to Japanese companies for 5 - 7 years but volumes were pretty low and now have reached a point where they can scale up significantly (off course, we never had a whiff of JV). Also, one interesting comment he made was that once you get associated with a Japanese company, it becomes much easier to get other Japanese companies as your client.
I think as of now most of the molecules being manufacturing for MNCs are generics. Patented products contributed less than 10% of sales upto FY19. However, they should scale up over the next few years.
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. . while reading about agro chemicals I learned an interesting fact - while world share of Herbicides (for managing weeds) is 43% of total crop chemicals consumption; the share of Herbicides consumed in India is 20%; which is attributed to easy/cheaper labor availability ‘for pulling out the weeds by hands’. Whilst, some opinions do point to the fact that with increasing labor cost in India too, the use of Herbicides is likely to go up!
. . .but am wandering, if after massive reverse migration to the village (due to COVID) for at-least mid-term there are going to be available many more hands to toil in the farms (and further as Agro also get more boost from recent positive initiatives by the govt in agro space); could this trend of easy / cheaper labor affect the demand of Herbicides in the coming season or two!!?
Does anyone here know, of the Technical Grade that Bharat Rasayan produces how much of it is towards Herbicides; am sure it’s a small factor but would be interesting to know:
BR Sales x Domestic % x Technical Grade Share % for Herbicides = ?? what impact!
. . . anyone here, any views?
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. . just adding to the above:
Govt. “proposes” to Ban 27 Pesticides: Source Hindu Business Line:
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Basis the above news; I crosschecked if Bharat Rasayan made any of these items, and here they are (PS; i checked only domestic business products of BR as listed on their website):
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Just connecting the dots; maybe govt. is banning these (and many names in list seem to be herbicides) so as to engage more labour (who have migrated back to villages) in de-weeding / insecticides management. . . i know its farfecthed 
- but just throwing open a thought!
PS:
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since we don’t know what proportion of these items contribute to BR sales / or if they are easily replaceable - one cant assess the impact!*
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FYI, BR’s 23% sales come from these two products (as per 2018-19 AR):
Further:
Find below, a comprehensive source to search chemical/technical name and understand it’s application . . . e.g. if you search "Chlorpyrifos: - which is one of 27 names proposed to be banned - you can see it’s an insecticide:
Agro_Chemical_with_Brand_Name.pdf (956.8 KB)
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If one pesticide is banned there will be alternative
Usually farmers will use the cheapest irrespective of havoc caused on food or soil. The more safer they there the less efficient and thus more costly they get.
I think the correct questions are will the government ban all Indian made pesticides, if government bans one pesticide does Bharat rasayan have others in the same price range to offer, if not can they make it
It’s difficult to ban pesticide and herbicide completely in India as Indian produce have to support a huge population and organic food yields are lower than non organic
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hi edward! Tx for response. .
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Of course, no one is talking about banning pesticides/insecticides ‘entirely’, and of course, they all would be replaceable; but, one shouldn’t take a broad base assumption that nothing will happen by banning these - you, yourself in ur post said farmers go for the cheapest! - maybe these 27 chemicals are the cheapest available options, and the farmer may not replace it with something else etc; and maybe govt knows this, and this would have second level effect of engaging more hands to de-weed! just radom thoughts to reflect! As i said, it’s just farfetched thinking for academic purposes (connecting it to perspective that India uses more herbidcides than world)
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And as I already mentioned in my post; we don’t know the impact of these (btw, that too if the draft is finalized as is), and I am sure BR would easily replace it with many more varieties.
my purpose with the post was ‘not any fear-mongering’ but just to provoke some thoughts; am not saying any definitive statements above, just some pointers to reflect upon; before this news, un-till today, atleast I never bothered to check names of what BR produces; but now, thanks to this new-piece, at-least we know something more about what BR makes and what’s it’s further use!!.
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Most of the companies mentioned are making Formulated Products(Ready to use) using active chemical. Pesticides company having presence in B to C category is generally making more than 100 products.They product may account for 3%-6% of total turnover. In general every company makes Ready to use products in Liquid & Powder form.
They can switch to new generation products by modifying Automatic Liquid Filling line & Powder line.
Companies making active chemical will be hit hard due to large investment in Plant & Machinery and % of turnover may significant as compared to total turnover.
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Know your company “visually” - made this collage, just to provide a visual - connect / perspective to co-relate with all that we know about BR (click to zoom)
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Know your company - “inter-linkages” - made this flowchart to elucidate the connections within the Bharat Group of Companies (PS: may not be perfect, but will give a decent perspective).
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Know your company - “where is it in Value Chain”
Feed Stock (Raw Materials / Gases / Petro derivatives) > Intermediates (further synthesized compounds) > Technical Grade (more purer form) > Bulk and Proprietary Formulations (active agents mixed with non-active emulsifiers / excipients) > Packaging (Sizing / grading / packing / labeling) > Branding, Marketing, Distribution and Retail
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they are opening up. it has been quite difficult to obtain information from the company. They usually ask investors to attend the AGM. A veteran investor I know has been asking the management to split the stock or issue a bonus so that it becomes more liquid. But little interest from the management.
disclosure: holding
hi!
can you please qualify your statement “they are opening up” - what are they opening? How closed were they? . . any further details that you may have got, will be helpful!
tx
opening up as in sharing information. this presentation was a revelation. I guess it was shared by management.
Shivkumar JI, which ‘this’ presentation are you talking about? . . . in case you are referring to the above 3 pictorial posts, posted by me; then those are “not” from the company/management; I had simply on my own created those charts/collage/flow-chart just so to represent all the various info as we all know here on this forum! and am sure my posts do have their share of errors!
tx!
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I am invested in Bharat Rasayan and think for investors this might be a bad development however most pesticides that are deemed harmful are because they affect food and indirectly people’s health
The government then has to worry about hospital costs and long term health issues of its citizens
The farming community usually find something that is equally effective but less harmful
I was I think reading LT foods concall or annual report, I don’t exactly recall
They were saying that rice from India has a higher barrier to enter into Eu and USA markets because of pesticides and fertilisers used compared to rice from Pakistan
I don’t know how much of that is true and how much of it is to hide management inefficiency
Investors and companies specially good ones like Bharat rasayan with history of sound management will be able to find an alternative much sooner than the companies that are not so cutting edge
Besides Bharat rasayan margins are good. Most of the time companies don’t change the brand, they just remove the harmful ingredients so the end user doesn’t have much idea of what is going on
For a new product to break in is generally difficult and if they do, the shareholders should be able to monitor this via reduced revenue and profitability to exit or change their position
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