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Bhagawati Oxygen Ltd.

BSE: 509449 Sector: Industrials
NSE: N.A. ISIN Code: INE026I01010
BSE 00:00 | 20 Jun 28.00 -1.45
(-4.92%)
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NSE 05:30 | 01 Jan Bhagawati Oxygen Ltd
OPEN 28.00
PREVIOUS CLOSE 29.45
VOLUME 17
52-Week high 47.25
52-Week low 24.30
P/E 15.82
Mkt Cap.(Rs cr) 6
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 28.00
CLOSE 29.45
VOLUME 17
52-Week high 47.25
52-Week low 24.30
P/E 15.82
Mkt Cap.(Rs cr) 6
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Bhagawati Oxygen Ltd. (BHAGAWATIOXYGEN) - Director Report

Company director report

Dear Shareholders

The Directors have pleasure in presenting the 45th Annual Reportand the Audited Accounts of the Company for the financial Year ended March 31 2017.

1. SUMMARY OF FINANCIAL RESULTS:

(Rs./Lacs)
Particulars 2016-17 2015-16
Total revenue 1062.67 1070.33
Pbdit 198.93 115.93
Finance cost 18.06 2.82
(Depreciation & amortization 41.76 23.40
NfT 139.11 89.71
Tax expense 49.38 22.43
PAT 89.73 67.29
(Surplus- opening balance 929.33 862.04
Surplus- closing balance 1019.06 929.33

A. OPERATION:

During the year under review the sales and other income of theCompany amounted to Rs 1062.67 lacs compared to Rs. 1070.33 lacs in the previous year.After providing for financial charges depreciation current and deferred taxation andother Adjustments the Company reported profit after tax and extraordinary item of Rs.89.73 Lacs.

Further the Company has enhanced its present capacity by settingup a new 50 TPD oxygen plant project at its existing manufacturing facilities which willserve as a backward Integration Project of the Company.

B. DIVIDEND:

The Board considered it to be prudent to conserve the resourcesfor the Company's growth and expansion and accordingly does not recommend payment of anydividend on the Equity shares for the financial year under review.

STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLWITH REFERENCE TO THE FINANCIAL STATEMENTS:

The Company has in place adequate internal financial controlswith reference to financial statements. During the year such Controls were tested and noreportable or material weakness in the design or operation was observed.

E. MANAGEMENT DISCUSSION & ANALYSIS:

Industry Structure and Development: This Industry is primarily a"Gas Manufacturing Industry" supplying oxygen gas from Ghatsila plant onexclusive supply scheme basis. The Company is also making wind power and supplying toTNEB Tamil Nadu (Outlook Opportunities Threats & Concerns Environment health andSafety: The encouraging growth on both produc- jion and sales in previous years is likelyto be sustained in current year also. Outlook for the current year remains strong. TheCompany's operations are subject to risks which can impact business performanceessentially with regard to prices of basic (materials like molecular sieves power. Themanagement is seized of assessing such risks and takes measures to address the same thefundamental of the gas industry appears to be better and is growing fast because of theimprovement in the steel sector ps sales of the Company are tied up some strategiesadopted by the Company are:

(a) reducing cost of capital

(b) transactional cost of production

(c) reducing pollution levels

(d) creation of good infrastructure etc. The Company has takenadequate Ateps to reduce the cost of production by continuously evaluating processimprovements and best operational practices.

The Company is committed to adhere to all applicable environmentregulations and improve upon the environmental performance on a continued basis.

Human Resources Development: The Company believes that humanassets constitute the driving force behind the Company's ijrowth plans. The Company hasduring the previous year continued to have good industrial relations with its employees.The Company would like to record the whole-hearted support and dedication received fromthe employees at all levels.

6. LISTING WITH STOCK EXCHANGES:

The Company confirms that it has paid the annual Listing Fees forthe year 2016-2017 to BSE where the Company's shares are listed.

DEMATERIALIZATION OF SHARES:

9.31% of the Company's paid up Equity Shares Capital is indematerialization from as on 31st March 2017 and balance 3.69% is in physical form. TheCompany's Registrar's and Share Transfer Agents are M/s Skyline Financial Services Pvt Ltdaving their office at D-153A 1st Floor Okhla Industrial Area Phase-I New Delhi-110020.

NUMBER OF MEETINGS OF THE BOARD:

During the Financial Year 2016-17 4 (four) meetings of the Boardof Directors of the Company were held on 30th May 2016 2th August 2016 10th November 2016and 14th February 2017.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

In accordance with the provisions of the Act and the Articles ofAssociation of the Company Mr. Suresh Kumar Sharma (DIN- 3041150) director of theCompany retires by rotation at the ensuing Annual General Meeting and being eligible hasoffered mself for re-appointment.

The Independent Directors of the Company have given thecertificate of independence to the Company stating that they meet the criteria ofIndependence as mentioned under Section 149(6) of the Companies Act 2013.

10. DIRECTORS' RESPONSIBILITY STATEMENT:

In accordance with the provisions of Section 134(5) of theCompanies Act 2013 the directors confirm that:

a. In the preparation of the annual accounts for the financialyear ended 31 March 2017 the applicable accounting standards had been followed along withproper explanation relating to material departures if any;

b. The Directors had selected such accounting policies andapplied them consistently and made judgments and estimates that are reasonable and prudentso as to give a true and fair view of the state of affairs of the Company as at 31 March2017 and of the profit of the Company for period from 1 April 2016 to 31 March 2017;

c. The Directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

d. The Directors had prepared the annual accounts for thefinancial year ended 31 March 2017 on a going concern basis;

e. The Director had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively;

f. The Directors had devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems were adequate andoperating effectively;

11. NOMINATION AND REMUNERATION POLICY:

Pursuant to Section 178(3) and other applicable provisions of theCompanies Act. 2013 of the Act the Company has put in place a Nomination and RemunerationPolicy framed by the Nomination and Remuneration Committee of the Board for determiningthe qualifications positive attributes and independence of the Directors besidesrecommending a policy on remuneration of the Directors and Key managerial personnel.

12. AUDIT COMMITTEE:

The Audit Committee of the Board is comprised of Mr. HimanshuSharma Mr. Bipin Bihari Lai and Mr. Jagdish Chandra Kaushik with Mr Himanshu Sharma as aexecutive Director/Managing Director and Mr. Bipin Bihari Lai and Mr. Jagdish ChandraKaushik as Independent Directors. All the recommendations made by the Audit Committee wereaccepted by the Board.

During the Financial Year 2016-17 4 (four) meetings of the AuditCommittee of the Board of Directors were held on 30th May 2016 12th August 2016 10thNovember 2016 and 14th February 2017.

13. NOMINATION AND REMUNERATION COMMITTEE:

The Nomination and Remuneration Committee of the Board arecomprised of Mrs. Jaya Sharma Mr. Bipin Bihari Lai and Mr. Jagdish Chandra Kaushik. MrsJaya Sharma being a non-executive Director and Mr. Bipin Bihari Lai and Mr. JagdishChandra Kaushik being Independent Directors.

During the Financial Year 2016-17 1 (One) meeting of theNomination and Remuneration Committee of the Board of Directors were held on 30th May 2016

14. AUDITORS AND AUDITORS REPORT:

As per the provisions of the Act the Company is required toappoint a new auditor and M/s. Chetan & Co. Chartered Accountants (Firm RegistrationNo.321151E) are proposed to be appointed as auditors of the Company for a period of fiveyears commencing from the conclusion of Forty-Fifth Annual General Meeting till theconclusion of Fiftieth Annual General Meeting subject to ratification of such appointmentby the shareholders every year at every Annual General Meeting till the fiftieth AnnualGeneral Meeting of the company.

M/s. Chetan & Co. Chartered Accountants have consented tothe said appointment and confirmed that their appointment if made would be within thelimits specified under Section 141 (3)(g) of the Act. They have further confirmed thatthey are not disqualified to be appointed as statutory auditors in terms of the proviso toSection 139(1) Section 141(2) and Section 141(3) of the Act read with the Companies(Audit and Auditors) Rules 2014.

The Board of Directors recommend the appointment of. M/s. Chetan& Co. Chartered Accountants as Statutory Auditors of the Company for the aforesaidperiod.

The proposed appointment of Messrs M/s. Chetan & Co. as thenew auditors is in place of M/s. Chaturvedi & Co Chartered Accountants (FirmRegistration No. 302137E) who have been the auditors of the Company for long period. TheBoard places on record its appreciation to M/s Chaturvedi & Co for discharging theirduties as the Company's auditors for a long period.

15. SECRETARIAL AUDITOR:

The Board has appointed Mr. Manoj Prasad Shaw Practising CompanySecretary (FCS 4194) to conduct Secretarial Audit for the financial year 2016-17. TheSecretarial Audit Report for the financial year ended March 31 2017 is annexed herewithmarked as Annexure A to this Report. The Secretarial Audit Report does not contain anyqualification reservation or adverse remark.

16. MATERIAL CHANGES OCCURRED AFTER END OF FINANCIAL YEAR:

No material changes and commitment which could affect theCompany's financial position have occurred between the end of

the financial year of the Company and date of this report.

17. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGNEXCHANGE EARNINGS AND OUTGO:

The information required under section 134 of the Companies Act2013 is provided in 'Annexure B' to this Report.

18. VIGIL MECHANISM:

In pursuant to Section 177(9) of the Act 2013 and Rules madethere under the company has in place a policy on vigil mechanism for enabling theDirectors and employees of the Company to report their genuine concerns if any and alsoprovides for adequate safeguards against victimization of persons using the mechanism.

19. CORPORATE SOCIAL RESPONSIBILITY (CSR):

The Company has not developed and implemented any CorporateSocial Responsibility initiatives as the said provisions are not applicable.

20. RISK MANAGEMENT POLICY:

With reference to the provisions of Section 134(3)(n) of theCompanies Act 2013. the Board of Directors has developed a risk management plan of theCompany and had identified the key risk areas where the Company's business is vulnerable.The key risk areas are further categorized in the following:-

(a) Strategic Risks

(b) Operational Risks and

(c) Financial and Compliance related Risks.

All the strategic operational and financial risks are dulyanalyzed and taken care of.

The Directors are aware of the requirement of the risk mitigationplan and are continuously making the necessary efforts to redress the impact of theadversities.

21. STATEMENT ON FORMAL ANNUAL EVALUATION MADE BY THE BOARD OFITS OWN PERFORMANCE ITS DIRECTORS AND THAT OF ITS COMMITTEES:

Pursuant to the provisions of the Companies Act 2013 ("theAct") the Board carried out the performance evaluation of its own and that of itsIndividual Directors through the Nomination and Remuneration Committee of the Board ('theCommittee") duly constituted by the Board for the above purpose amongst others interms of the Act.

During the year under review the Committee made the performanceevaluation as above based on the following criterions in line with the Nomination andRemuneration Policy:

- Attendance and participation in the meetings:

- Preparedness for the meetings;

- Understanding of the Company and the external environment inwhich it operates and

- Constructive contribution to issues and active participation atmeetings The Committee found the Directors to be fulfilling the above criterions.

The Board also conducted the performance evaluation of itsvarious Committees based on references made to the Committees in terms of the Act andfound the performance to be satisfactory.

22. CONTRACT AND ARRANGEMENT WITH RELATED PARTIES:

The Audit Committee reviews all the Related Party Transactionsto ensure that the same are in line with the provisions of Law and Policy. The Committeeapproves the Related Party Transactions none of the transactions approved in thefinancial year breached Arm's Length and ordinary course criteria.

All contracts/arrangements/transactions entered by the Companyduring the financial year with related parties were in the ordinary course of business andon an arm's length basis. During the year the Company had not entered into anycontract/arrangement/transaction with related parties which could be considered materialin accordance with the policy of the Company on materiality of related party transactions.

Your Directors draw attention of the members to Note 26.19 to thefinancial statement which sets out related party disclosures.

23. EXTRACT OF ANNUAL RETURN:

The extract of Annual Return in format MGT-9 is attached as'Annexure C'

24. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

Details of Loans Guarantees and Investments covered under theprovisions of Section 186 of the Companies Act 2013 are [given in the notes to theFinancial Statements

25. SHARE CAPITAL:

During the year under review there was no change in ShareCapital of the Company.

26. PARTICULARS OF EMPLOYEES:

The disclosure as required under Rule 5(1) of Companies(Appointment & Remuneration of Managerial Personnel) Rules 2014 [is enclosed withthis report as Annexure D. The company has not paid any remuneration attracting theprovisions of Rule 5(2) of the Companies (Appointments. Remuneration of ManagerialPersonnel) Rules 2014. Hence no information is required to be [appended to this reportin this regard.

27. CORPORATE WEBSITE:

The Company maintains a website www.globalbol.com where detailedinformation of the Company and its product are provided.

28. DISCLOSURES UNDER RULE 8(5) OF COMPANIES (ACCOUNTS) RULES2014:

a) Financial summary or highlights: As detailed under theheading 'Summary of Financial Results'

b) Change in the nature of business if any: None

c) Details of Directors or Key Managerial Personnel who wereappointed or resigned during the year:

Directors/KMP Appointed NIL
Directors/KMP resigned NIL

d) Names of Companies which have become or ceased to beSubsidiaries Joint Venture Companies or Associate Companies during the year- NIL

e) Details relating to deposits: There were no fixed depositsfrom the public outstanding of the Company at the end of the financial year.

No fixed deposit has been accepted during the year and as suchthere is no default in repayment of the said deposits. There has not been any depositwhich is not in compliance with the requirements of Chapter V of the Companies Act 2013.

f) No significant and material orders have been passed by anyregulator(s) or Court(s) or Tribunal(s) impacting the going concern's status and Companiesoperations in future.

g) Adequacy of Internal Financial Control:

The Company has an adequate system of internal control procedureas commensurate with the size and nature of business which ensures that all assets aresafeguarded and protected against loss and all transactions are recorded and reportedcorrectly.The internal control system of the Company is monitored and evaluated byinternal auditors and their audit reports are periodically reviewed by the Audit Committeeof the Board of Directors. The observations and comments of the Audit Committee are placedbefore the Board for reference.

h) The scope of internal audit includes audit of PurchaseFacilities Sales Promotion Expenditure and Incentive Scheme Debtors and Creditorspolicy Inventory policy VAT and Cenvat matters and others which are also considered bythe Statutory Auditors while conducting audit of the annual financial statements.

29. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013:

The Company has in place an Anti-Sexual Harassment Policy in linewith the requirements of The Sexual Harassment of Women at the Workplace (PreventionProhibition & Redressal) Act 2013.

The Directors are pleased to report that during the year underreview neither any complaints of sexual harassment were received by it nor were thereany complaints relating thereto which required any disposal thereof.

30. CAUTIONARY STATEMENT:

This report contains forward looking statements that involverisks and uncertainties. Actual results performing or achievement could differ materiallyfrom those expressed or implied in such forward looking statements. Significant factorsthat could make a difference to the Company's operation include domestics andinternational economic conditions affecting demand-supply and price conditions foreignexchange fluctuations changes in government regulations tax regimes and other statues.

31. ACKNOWLEDGEMENT:

The Board would like to express its sincere appreciation for thevaluable support and co-operation received from various Central and State GovernmentAuthorities Stock Exchanges Financial Institutions and Banks during the year. They alsogratefully acknowledge the support extended by the customers and shareholders andcontribution made by the employees at all level.

For and on behalf of the Board of Directors
Place :Kolkata S K SHARMA
Date : 18May 2017. Chairman
(DIN:00041150)

ANNEXURE-B

Information on Conservation of Energy Technology AbsorptionForeign Exchange Earnings and Outgo required to be disclosed under section 134 of theCompanies Act 2013 read with Companies (Accounts) Rules 2014 are provided hereunder:

(A) Conservation of Energy

(a) Energy conservation steps taken:

+Energy conservation continues to receive priority attention atall levels.

+Factories have implemented measures to maintain power factorabove 0.98 to reduce reactive power loss.

+Gradual replacement of high energy illumination by lower power

I consuming illumination in working area.

^Replacement of opaque sheets with translucent corrugated sheetsto allow j more natural light.

+Continuous effort to reuse/recycle ground water.

(b) Additional investment proposals if any being implementedfor reduction of consumption of energy:

(c) Impact of measures of (a) & (b) for reduction of energyconsumption and consequent impact on cost of production of goods:

+Reduction in specific power usage per unit of output to berealized in coming years.

(d) Energy conservation in respect of specified industries: NA

(B) Technology Absorption Research & Development (R&D)

1. Efforts and areas in which R&D carried out:

+The Company is successfully doing improvement of productcharacteristics.

+Developing processes to improve product cost structure.

2. Benefits derived as a result of the above efforts:

+ Improved manufacturing efficiency with reduced losses &costs.

+lmproved quality and production meeting customer requirement.

3. Future Plan of Action:

+ lncreased focus on customized product deliverables aligning inline with strategic business partners.

+lmproved process operation with reduced process wastagedebottlenecking of processes equipment and quality issues

4. Expenditure on R&D:

Charged under primary heads of accounts.

(C) Foreign Exchange Earnings and Outgo:

(Rs./Lacs)
2016-17 2015-16
Foreign exchange outgo 874.28 5.96
Foreign exchange earning - -