To The Members of Bhagyanagar India Limited
The Directors have pleasure in presenting the 30th Annual Report of your Companyand the Audited financial statements for the financial year ended 31st March 2015 togetherwith Auditors' Report thereon.
The performance of the Company during the year has been as under:
|Particulars || |
| ||2015 ||2014 ||2015 ||2014 |
|Sales and other Income ||2613462675 ||2338644223 ||2756006154 ||2409847538 |
|Profit before Depreciation and Interest ||156883374 ||175597029 ||163991689 ||184952841 |
|LESS : || || || || |
|Depreciation ||49656585 ||68027104 ||62240975 ||74753622 |
|Interest ||83275219 ||77562598 ||83609238 ||77766134 |
|Profit for the year ||23951570 ||30007327 ||18141532 ||32433085 |
|Prior period Adjustments ||-- ||-- ||-- ||-- |
|Profit before Taxation ||23951570 ||30007327 ||18141532 ||32433085 |
|Provision for Taxation : Current Tax ||3276970 ||4165188 ||3276970 ||4165188 |
|Deferred Tax ||171757 ||(1654313) ||(6934369) ||(4629401) |
|MAT Entitlement Credit ||-- ||1150052 ||-- ||1150052 |
|Income Tax in respect of earlier years ||-- ||- - ||-- ||-- |
|Profit after Tax ||20502843 ||26346400 ||21798931 ||31747246 |
|Less: Minority Interest ||-- ||- ||(384221) ||(652721) |
|Less: Change in Interest of Associate Companies ||-- ||- ||13026626 ||135549 |
|Surplus brought forward from previous year ||753996847 ||770109947 ||751608986 ||762838412 |
|Balance available for appropriation ||774499690 ||796456347 ||786050322 ||794068486 |
|APPROPRIATION: || || || || |
|Dividend ||19197000 ||19197000 ||19197000 ||19197000 |
|Tax on Dividend ||3838400 ||3262500 ||3838400 ||3262500 |
|Transfer to General Reserves ||20000000 ||20000000 ||20000000 ||20000000 |
|Balance c/f to Balance Sheet ||731464290 ||753996847 ||743014922 ||751608986 |
|TOTAL ||774499690 ||796456347 ||786050322 ||794068486 |
In the year 2014-15 the Company focused on its core business Copper its alliedproducts and Solar & Wind Power Generation. The Copper its allied products segmentturnover grew by 11.75% compared to previous year. The operation of 5 MW solar powerproject at Munipally Village Medak District Telangana State has been stabilized duringthe year and the Company has made a revenue of ' 35527153/-.
The income from operations is ' 2517467311 as against ' 2257636472 for thecorresponding previous year. The profit before tax stood at ' 23951570 as against '30007327 for the previous year. The profit after tax stood at ' 20502843 as against '26346400 for the corresponding period. The Basic Earnings Per Share for the year-ended31.03.2015 is ' 0.32 as against ' 0.41 for the corresponding previous year ended31.03.2014.
Your company has the following Subsidiary and Associate companies as mentioned below.Further there has been no material change in the nature of business of the Subsidiariesand Associates:
|Name of the Company ||Percentage (%) |
|Subsidiary Companies: || |
|1. Bhagyanagar Metals Limited ||100.00 |
|2. Bhagyanagar Properties Private Limited ||100.00 |
|3. Scientia Infocom India Private Limited ||76.00 |
|4. Metropolitan Ventures India Limited ||100.00 |
|5. Solar Dynamics Private Limited ||72.00 |
|Associate Companies: || |
|1 Globecom infra Ventures India Private Limited ||50.00 |
|2 GMS Realtors Private Limited ||50.00 |
|3 Bhagyanagar Entertainment & Infra Development Company Private Limited ||47.00 |
|4 Bhagyanagar Infrastructure Limited ||43.40 |
|5 Surana Solar Limited ||23.53 |
In terms of proviso to sub section (3) of Section 129 of the Act the salient featuresof the financial statement of the subsidiaries and Associates is set out in the prescribedForm AOC-1 which forms part of the annual report. Pursuant to the provisions of section136 of the Act the financial statements of the Company consolidated financial statementsalong with relevant documents and separate audited accounts in respect of subsidiariesare available on the website of the Company.
CONSOLIDATED FINANCIAL STATEMENTS:
In accordance with the Companies Act 2013 and Accounting Standard (AS)-21 onConsolidated Financial Statements read with AS-23 and AS-27 issued by the Institute ofChartered Accountants of India the audited consolidated financial statements are providedin the Annual Report.
Your Directors are pleased to recommend for approval of the members a dividend @15% ('0.30 per equity share of face value of ' 2/- each) for the financial year 2014-15. Thetotal cash outflow on account of dividend on equity shares for the financial year 2014-15would aggregate ' 23035400 (inclusive of tax thereon).
During the year the Company has transferred an amount of ' 20000000 to GeneralReserves.
The Company has not accepted or invited any Deposits and consequently no deposit hasmatured / become due for repayment as on 31st March 2015.
Copper: The strategy for financial year 2015-16 will be to have continued focus oncopper business with addition of new products. Your Company plans to achieve a growth of10% in this segment with emphasis on value added products.
Real Estate & Infra: The Land situated at Gachibowli which is held throughsubsidiaries the applicability of G.O.111 is still under review by Hon'ble High Court ofA.P Further action on the property will be considered only after decision in this matteris taken by the Hon'ble High Court/State Govt. In respect of Uppal land the Company islooking for joint development.
Wind Power: The Company currently has an overall installed capacity of 9 MWcomprising of 7 wind turbines in state of Karnataka and 6.4 Mw comprising 5 wind turbinesin Tamilnadu through its Subsidiary viz. Solar Dynamics Private Limited. The said projectis giving steady income.
Solar Power: The Company successfully set up 5MW Solar Power project at MunipallyMedak District Telangana State. Further the Company has obtained all the approvals foraccreditation of REC and sale of REC in the exchanges. The Company is generating steadyrevenue from the project.
In terms of the provisions of Section 149 of Companies Act 2013 and clause 49 of theListing Agreement Smt. Madhumathi Suresh has been appointed as Additional Director of theCompany in the category of Independent Woman Director w.e.f 23.03.2015 based on therecommendation of Nomination and Remuneration Committee.
Pursuant to Section 161(1) of the Act Smt. Madhumathi Suresh holds office up to thedate of forthcoming Annual General Meeting of the Company and is eligible for
appointment as Director. The Board recommends their appointment and accordinglyresolution seeking approval of the members for their appointments has been included in theNotice of forthcoming Annual General Meeting of the Company along with their briefprofile.
Shri Narender Munoth Whole-time Director of the Company will retire by rotation at theensuing Annual General Meeting and being eligible offers himself for re-appointment.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Clause 49 ofthe Listing Agreement. Further there has been no change in the circumstances which mayaffect their status as independent director during the year.
The brief particulars of the Directors seeking appointment / re-appointment at thisAnnual General Meeting are being annexed to the Corporate Governance Report.
Pursuant to the provisions of Section 203 of the Act the appointment of Shri NarenderSurana and Shri Devendra Surana Managing Directors and Shri Narender Munoth and Shri N.Krupkar Reddy Whole-time Directors Shri. Surendra Bhutoria Chief Financial Officer wereformalized as the Key Managerial Personnel of the Company.
Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the ListingAgreement the Board has carried out performance evaluation taking into consideration ofvarious aspects of the Board's functioning composition of Board and its Committeesexecution and performance of specific duties obligations and governance. The Performanceof evaluation of Independent Directors was completed. The Performance evaluation ofChairman and the Non-Independent Directors was carried out by the Independent Directors.The Board of Directors expressed their satisfaction with evaluation process.
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy which lays down a framework in relation to selection appointment andremuneration to Directors Key Managerial Personnel and Senior Management of the Company.The Remuneration Policy is stated in the Corporate Governance Report.
During the year 5 (five) Board Meetings and 4 (four) Audit Committee Meetings wereconvened and held. The details of which are given in the Corporate Governance Report. Theintervening gap between the meetings was within the period of 120 days as prescribed underthe Companies Act 2013 and Clause 49 of the Listing Agreement.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.
RELATED PARTY TRANSACTIONS
All transactions entered with Related Parties for the year under review were on arm'slength basis and in the ordinary course of business. There are no materially significantrelated party transactions made by the Company with Promoters Directors Key ManagerialPersonnel or other designated persons which may have a potential conflict with theinterest of the Company
at large. All Related Party Transactions are placed before the Audit Committee as alsothe Board for approval where ever required. Prior omnibus approval of the Audit Committeeis obtained for the transactions which are of a foreseeable and repetitive nature. Astatement giving details of all related party transactions entered into pursuant to theomnibus approval so granted are placed before the Audit Committee and the Board ofDirectors on a quarterly basis. The Company has developed a Policy on Related PartyTransactions for the purpose of identification and monitoring of such transactions. Thepolicy on Related Party Transactions as approved by the Board is uploaded on the Company'swebsite.
The particulars of contracts and arrangements with related parties referred to insub-section (1) of section 188 is prepared in Form AOC-2 pursuant to clause (h) of theCompanies (Accounts) Rules 2014 and the same is annexed herewith asAnnexure-III to this Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURT:
There are no significant and material orders passed by the Regulators/ Courts thatwould impact the going concern status of the Company and its future operations.
Pursuant to the provisions of Section 139 of the Act and the rules framed there underM/s Sekhar & Co Chartered Accountants were appointed as statutory auditors of theCompany from the conclusion of the 29th Annual General Meeting of the Company held on 22ndSeptember 2014 till the conclusion of the 32nd Annual General Meeting to be held in theyear 2017 subject to ratification of their appointment at every AGM.
The Board of Directors subject to the approval of the Central Government re-appointedM/s BVR & Associates Cost Accountants holding certificate of practice No.16851 as aCost Auditor for conducting the Cost Audit for the financial year 2015-16. Subject tosection 148 of the Companies Act
2013 read with Companies (Cost Records and Audit) Rules
2014 issued by the MCA the Audit Committee recommended their re-appointment. TheCompany has also received a letter from the Cost Auditor stating that the appointment ifmade will be within the limits prescribed pursuant to the section 141 of Companies Act2013.
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 hasappointed M/s. Rakhi Agarwal & Associates Company Secretaries in Practice toundertake the Secretarial Audit of the Company for the Financial Year 2014-15. The Reportof the Secretarial Audit Report is annexed herewith as Annexure-V.
M/s Luharuka & Associates Chartered Accountants performs the duties of internalauditors of the Company and their report is reviewed by the Audit Committee from time totime.
ISO 9001-2008 CERTIFICATION:
Your Company continues to hold ISO 9001-2008 Certification by meeting all therequirements of Certification from time to time.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
The Company is not covered under the criteria mentioned in the provisions of CompaniesAct 2013. The Company however over the years is pursuing as part of its CorporateSocial Responsibility for welfare and aspirations of the Community. The CSR activities ofthe Surana Group are guided by the vision and philosophy of its Founding Father Shri GMangilal Surana who embodied the value of trusteeship in business and laid the Foundationfor its ethical and value-based functioning. The core elements of CSR activities includeethical functioning respect for all stake-holders protection of human rights and carefor the environment. The G.M. Surana Foundation is established purely for the purpose ofproviding medical relief to the people who are in below poverty line. It is being run byqualified and registered doctors. As part of the Corporate Social Responsibility (CSR)activity the Company has contributed ' 3 Lakhs during the year.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review as stipulated underClause 49 of the Listing Agreement with the stock exchanges is presented in a separatesection forms part of the Annual Report as Annexure-II.
The Company has implemented the procedures and adopted practices in conformity with theCode of Corporate Governance enunciated in Clause 49 of the Listing Agreement with theStock Exchanges.
A separate report on corporate governance practices followed by the Company togetherwith a Certificate from the Company's Auditors confirming compliances forms an integralpart of this Report.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT 9 is annexedherewith as Annexure-IV.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. To maintain its objectivity and independence the InternalAudit function reports to the Chairman of the Audit Committee of the Board.
The Internal Audit Department monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company and its subsidiaries. Based on thereport of internal audit function process owners undertake corrective action in theirrespective areas and thereby strengthen the controls. Significant audit observations andcorrective actions thereon are presented to the Audit Committee of the Board.
The Board of the Company has formed a Risk Management Committee to frame implement andmonitor the risk management policy/plan for the Company and ensuring its effectiveness.The Risk Management Committee oversees the Risk Management process including riskidentification impact assessment effective implementation of the mitigation plans andrisk reporting. The Audit Committee has additional oversight in the area of financialrisks and controls. Major risks
identified by the businesses and functions are systematically addressed throughmitigating actions on a continuing basis. The development and implementation of riskmanagement policy has been covered in the management discussion and analysis which formspart of this report.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
In order to ensure that the activities of the Company and its employees are conductedin a fair and transparent manner by adoption of highest standards of professionalismhonesty integrity and ethical behaviour the company has adopted a vigil mechanism policy.
Many initiatives have been taken to support business through organizational efficiencyprocess change support and various employee engagement programmes which has helped theOrganization achieve higher productivity levels. A significant effort has also beenundertaken to develop leadership as well as technical/ functional capabilities in order tomeet future talent requirement.
DIRECTORS' RESPONSIBILITY STATEMENT:
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
a) That in the preparation of the accounts for the financial year ended 31st March2015 the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;
b) That the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the State of Affairs of the Company at the end of theFinancial Year and of the Profit or Loss of the Company for the year under review;
c) That the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
d) That the Directors have prepared the accounts for the financial year ended 31stMarch 2015 on a going concern' basis;
e) That proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively; and
f) That devised proper systems to ensure compliance with the provisions of allapplicable laws were in place and were adequate and operating effectively.
PARTICULARS IN RESPECT OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGNEXCHANGE EARNINGS AND OUTGO
The information on Conservation of Energy Technology Absorption Foreign ExchangeEarnings and outgo required to be disclosed under Section 134(3)(m) of the Companies Act2013 read with Rule 8 of the Companies (Accounts) Rules 2014 are provided in the"Annexure-I" forming part of this Report.
DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013
The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the provisions of Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 and the rules framed there under.
During the financial year 2014-15 the Company received no complaints on sexualharassment.
PARTICULARS OF EMPLOYEES
The Company has not employed any individual whose remuneration falls within the purviewof the limits prescribed under the provisions of Section 197 of the Companies Act 2013read with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.
PARTICULARS OF REMUNERATION
Disclosures with respect to the remuneration of Directors and employees as requiredunder Section 197(12) of Companies Act 2013 and Rule 5 (1) Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is provided as follows:
(i) The ratio of the remuneration of each director to the median remuneration of theemployees of the company for the financial year;
|Name of the Director ||Ratio to Median Remuneration |
|Shri Narender Surana MD ||60 |
|Shri Devendra Surana MD ||60 |
|Shri Narender Munoth WTD ||20 |
|Shri N. Krupakar Reddy WTD ||2.33 |
(ii) The percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year;
|Name of Person ||% increase in remuneration |
|Shri Narender Surana MD ||125.00 |
|Shri Devendra Surana MD ||125.00 |
|Shri Narender Munoth WTD ||0.00 |
|Shri N.Krupakar Reddy WTD ||9.38 |
|Shri Surendra Bhutoria CFO ||13.42 |
(iii) The percentage increase in the median remuneration of employees in the financialyear - 11.13%
(iv) The number of permanent employees on the rolls of company - 123.
(v) The explanation on the relationship between average increase in remuneration andcompany performance;
On an average employees received an increase of 14.05%. The increase in remunerationis in line with the market trends.
(vi) Comparison of the remuneration of the Key Managerial Personnel against theperformance of the company;
|Particulars ||'/ Lac |
|Remuneration of Key Managerial Personnel (KMP) during financial year 2014-15 (aggregated) ||266.34 |
|Total Revenue ||26134.63 |
|Remuneration (as % of Total Revenue) ||1.02% |
(vii) variations in the market capitalisation of the company price earnings ratio asat the closing date of the current financial year and previous financial year;
|Particulars ||Unit ||As at 31.03.2015 ||As at 31.03.2014 |
|Closing rate of share at BSE ||' ||16.75 ||14.20 |
|EPS (Consolidated) ||' ||0.32 ||0.41 |
|Market Capitalization ||'/Lac ||10718.33 ||9086.58 |
|Price Earnings ratio ||Ratio ||52.34 ||34.63 |
(viii) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration;
The average increase in salaries of employees other than managerial personnel in2014-15 was 12.29%. Percentage increase in the managerial remuneration for the year was83.96%.
(ix) Comparison of the each remuneration of the Key Managerial Personnel against theperformance of the company;
|Name of Person ||Remuneration (Rs./ Lac) ||Total Revenue (Rs./ Lac) ||Remuneration as % of Total Revenue |
|Shri Narender Surana MD ||108.00 ||26134.63 ||0.41 |
|Shri Devendra Surana MD ||108.00 ||26134.63 ||0.41 |
|Shri Narender Munoth WTD ||36.00 ||26134.63 ||0.14 |
|Shri N.Krupakar Reddy WTD ||4.20 ||26134.63 ||0.02 |
|Shri Surendra Bhutoria CFO ||10.14 ||26134.63 ||0.04 |
(x) The key parameters for any variable component of remuneration availed by thedirectors - No.
(xi) The ratio of the remuneration of the highest paid director to that of theemployees who are not directors but receive remuneration in excess of the highest paiddirector during the year - Nil.
(xii) Affirmation that the remuneration is as per the remuneration policy of thecompany - Yes.
Your Directors wish to place on record their appreciation to employees at all levelsfor their hard work dedication and commitment. The enthusiasm and unstinting efforts ofthe employees have enabled the Company to remain at the forefront of the industry despiteincreased competition from several existing and new players.
Statements in the Board's Report and the Management Discussion & Analysisdescribing the Company's objectives expectations or forecasts may be forward-lookingwithin the meaning of applicable securities laws and regulations. Actual results maydiffer materially from those expressed in the statement. Important factors that couldinfluence the Company's operations include global and domestic demand and supplyconditions affecting selling prices of finished goods input availability and priceschanges in government regulations tax laws economic developments within the country andother factors such as litigation and industrial relations.
The Board desires to place on record its sincere appreciation for the support andco-operation that the Company received from the suppliers customers strategic partnersBankers Auditors Registrar and Transfer Agents and all others associated with theCompany. The Company has always looked upon them as partners in its progress and hashappily shared with them rewards of growth. It will be the Company's endeavor to build andnurture strong links with trade based on mutuality respect and co-operation with eachother.
| ||For and on behalf of the Board of Directors |
|Place : Secunderabad ||NARENDER SURANA ||DEVENDRA SURANA |
|Date : 06.08.2015 ||MANAGING DIRECTOR ||MANAGING DIRECTOR |