To the Members of
Bhagyanagar India Limited
The Directors have pleasure in presenting the 34th Annual Report of your Company andthe Audited financial statements for the financial year ended 31 st March 2019 togetherwith Auditors' Report thereon.
The performance of the Company during the year has been as under:
| || || || ||(Amount in Rs) |
|Particulars || |
| ||2019 ||2018 ||2019 ||2018 |
|Sales and other Income ||5701950273 ||4584048786 ||5702062105 ||4584063786 |
|EBIDTA ||220545183 ||242389531 ||221422963 ||242356073 |
|LESS : || || || || |
|Loss on Foreign Exchange Fluctuation ||19440591 ||243464 ||19440591 ||243464 |
|Depreciation ||37384099 ||36124508 ||39398712 ||37630339 |
|Interest ||76212439 ||38150522 ||76605120 ||38153322 |
|Amortisation of FCMITDA ||- ||- ||- ||- |
|Extraordinary Items ||- ||- ||- ||- |
|Profit before Taxation ||87507874 ||167871037 ||85978360 ||166328948 |
|Provision for Taxation : Current Tax ||20142448 ||34097481 ||20204000 ||34097481 |
|Deferred Tax ||2879320 ||3300668 ||2879320 ||3300668 |
|MAT Credit ||(498770) ||1824460 ||(498770) ||1824460 |
|Tax of earlier years ||- ||- ||- ||- |
|Profit after Tax ||64984876 ||128648428 ||63393810 ||127106339 |
|Less: Non-Controlling Interest || || || || |
|Add: Change in Interest of Associate Companies || || || ||(527657) |
|Add: Divestment on account of Demerger || || || ||(69442726) |
|Surplus brought forward from previous year ||855492692 ||776844264 ||805349190 ||798213232 |
|Balance available for appropriation ||920477568 ||905492692 ||868743000 ||855349188 |
|Transfer to General Reserves ||50000000 ||50000000 ||50000000 ||50000000 |
|Balance c/f to Balance Sheet ||870477568 ||855492692 ||818743000 ||805349188 |
PERFORMANCE AND OPERATIONS:
During the year 2018-19 the Company's total revenue is increased by 24.39% as that ofprevious year.
BUSINESS OUT LOOK:
The Company will remain focused on copper business and continue to add further valueadded products in line with the requirement of our OEM customers. We are looking at aminimum of 10% volume growth in this year. The Company received a major boost since theimplementation of GST and Demonitisation. With the advent of uniform tax structure (GST)across the country and abolition of CST our competiveness in terms of pricing has goneup. The company's disadvantage against tax free territories like Silvasa will no longerapply.
Post demonitisation the customer base has increased and diversified.
EXPANSION PLANS AND PROGRESS:
The company's competitiveness in terms of pricing has gone up post GST and volumes haveincreased substantially. With the kind of growth mode and in order to meet the demand theexpansion is being done through a 100% subsidiary company viz. Bhagyanagar Copper PrivateLimited (BCPL) with a capacity to 24000 MT from the existing 15000 MT. BCPL has 65.28Acres of land at Shabhashpally Village Shivampet
Mandal Medak District Telangana where copper plant has been set up with capacityutilisation of 4000 MT in the first year of operation and commenced its commercialoperations effective from 1st March 2019. It is proposed to be increased by 9000 MT perannum in a phased manner. Currently. The total capital investment is made around Rs 38.47Crores as of 31.03.2019 including term loan of Rs 10 Crores from Kotak
Mahindra Bank. The Company is targeting consolidated turnover of Rs 1000 Crores in next2 to 3 years.
Your Company has only one wholly owned (100%) subsidiary company viz. BhagyanagarCopper Private Limited (formerly
Aanvik Mercantile Private Limited) engaged in the same line of business of manufactureof copper products. There has been no material change in the nature of its business. Interms of proviso to sub section (3) of Section 129 of the
Act 2013 read with Companies (Accounts) Rules 2014 the salient features of thefinancial statement of the subsidiaries and Associates is set out in the prescribed FormAOC-1 which forms part of the annual report.
CONSOLIDATED FINANCIAL STATEMENTS:
The consolidated financial statements are prepared and annexed in accordance with theAccounting Standards 21 and 23 as prescribed under Section 133 of the Companies Act 2013read with Rule 7 of Companies (Accounts) Rules
2014 and Guidelines issued by Securities and Exchange
Board of India ("SEBI") also forms part of this Annual Report. As per theprovisions of Section 136 of the Companies Act
2013 the Company has placed separate audited accounts of its subsidiaries on itswebsite www.bhagyanagarindia. com and copy of separate audited financial statements of itssubsidiaries will be provided to the shareholders at their request.
The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2relating to Meetings of the Board of
Directors' and General Meetings' respectively have been duly followed by theCompany.
The paid-up Share Capital of the Company as on 31st March 2019 is Rs 63990000divided into 31995000 equity shares of Rs 2/- each.
TRANSFER TO RESERVES:
An amount of Rs 5 Crores from the net profits for the financial year under review isproposed to be carried to General Reserves.
The Board of Directors have not recommended dividend for the financial year 2018-19 toretain the maximum possible cash in the system. The Company is constrained to skip thedividend in view of the impeding cash out flow on account of ECB repayment obligations andthe proposed expansion plans.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
The Management Discussion and Analysis Report as required under schedule V of the SEBI(Listing Obligations and Disclosure Requirement) Regulations 2015 forms an integral partof this Report and gives details of the overall industry structure developmentsperformance and state of affairs of the Company's business internal controls and theiradequacy risk management systems and other material developments during the financialyear.
Management Discussion and Analysis Report is presented in a separate section forms partof the Annual Report as
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the requirement under Section 134 of the
Companies Act 2013 with respect to the Directors'
Responsibility Statement the Board of Directors of the Company hereby confirms: (a)That the preparation of the annual accounts for the financial year ended 31st March 2019the applicable accounting standards have been followed along with proper explanationrelating to material departures; (b) That the directors have selected such accountingpolicies and applied them consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of thecompany at the end of the financial year 31st March 2019 and of the profit and loss ofthe company for that period; (c) That the directors have taken proper and sufficient carefor the maintenance of adequate accounting records in accordance with the provisions ofthis Act for safeguarding the assets of the company and for preventing and detecting fraudand other irregularities;
(d) That the directors have prepared the annual accounts for the financial year 31stMarch 2019 on a going concern basis; and
(e) That the directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and (f) That the Directors have devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems were adequate andoperating effectively.
STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS:
The independent directors have submitted the declaration of independence as requiredpursuant to sub-section (7) of section 149 of the Companies Act 2013 and Regulation 25(8)of SEBI (Listing Obligations and Disclosure Requirement) Regulations 2015 stating thatthey meet the criteria of independence as provided in sub-section(6) of Section 149.
NOMINATION AND REMUNERATION POLICY:
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
Senior Management and other employees of the Company. The details of Nomination andRemuneration Committee and Policy are stated in the Corporate Governance Report.
PARTICULARS OF LOANS GUARANTEES SECURITIES AND INVESTMENTS:
The details of Loans Guarantees Securities and Investments made during thefinancial year ended 31st March 2019 are given in the notes to the Financial Statementsin compliance with the provisions of Section 186 of the Companies Act 2013 read withCompanies (Meetings of Board and its Powers) Rules 2014.
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 theAudit Committee as also the Board for approval wherever required. Prior omnibus approvalof the Audit Committee is obtained for the transactions which are of a foreseeable andrepetitive nature. A statement giving details of all related party transactions enteredinto pursuant to the omnibus approval so granted are placed before the Audit Committee andthe Board of Directors on a quarterly basis. The Company has developed a Policy on Related
Party Transactions for the purpose of identification and monitoring of suchtransactions. The policy on Related Party
Transactions as approved by the Board is uploaded on the Company's websitewww.bhagyanagarindia.com.
The particulars of contracts or 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 as"Annexure-IV" to this Report.
The Audit Committee consists of Independent Directors Shri
Kamlesh Gandhi as Chairman Shri O.Swaminatha Reddy Shri R.Surender Reddy and theManaging Director Shri Devendra Surana as members. The Committee inter alia reviews theInternal Control System Reports of Internal Auditors and Compliance of variousregulations. The Committee also reviews the financial statements before they are placedbefore the Board.
EXTRACT OF ANNUAL RETURN:
The Extract of Annual Return as per the provisions of Section 92 of the Companies Act2013 and Rule 12 of Companies
(Management and Administration) Rules 2014 in Form MGT-9 is annexed as Annexure - Vand has been uploaded on company's website at http://www.bhagyanagarindia.com/investor-relations.php.
PARTICULARS IN RESPECT OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGNEXCHANGE EARNINGS AND OUTGO:
The information on Conservation of Energy Technology
Absorption Foreign Exchange Earnings and outgo required to be disclosed under Section134(3)(m) of the Companies Act 2013 read with Rule 8 of the Companies (Accounts) Rules2014 are provided in the Annexure-I forming part of this Report.
RISK MANAGEMENT POLICY:
In terms of the requirement Section 134(3)(n) of the Companies Act 2013 and Regulation21 of Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations 2015 the Company has developed and implementedthe Risk Management Policy. The Audit Committee has additional oversight in the area offinancial risks and controls. Major risks identified by the businesses and functions aresystematically addressed through mitigating actions on a continuing basis. The developmentand implementation of risk management policy has been covered in the management discussionand analysis which forms part of this report. At present the Company has not identifiedany element of risk which may threaten the existence of the company.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
The Company considers social responsibility as an integral part of its businessactivities. The CSR activities of the Surana Group are guided by the vision and philosophyof its founding father Shri G Mangilal Surana who embodied the value of trusteeship inbusiness and laid the Foundation for its ethical and value-based functioning. The Companyhad taken an initiative in the direction and the journey was embarked in the year 1987 byShri G. Mangilal Surana in the memory of his father Shri Gulab Chand Surana by starting ahospital "Gulab Chand Surana Charitable Hospital" is purely for the purpose ofproviding medical relief to the people who are in below poverty line. It is being run byqualified and registered doctors.
In compliance with requirements of Section 135 of the
Companies Act 2013 the Company has laid down a CSR Policy. The composition of theCommittee contents of CSR Policy and report on CSR activities carried out during thefinancial year ended 31st March 2019 in the format prescribed under Rule 9 of theCompanies (Corporate Social Responsibility Policy) Rules 2014 is annexed herewith asAnnexure III.
During the year under review pursuant to the provisions of the Companies Act 2013 andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the evaluation ofperformance of all Directors is undertaken annually. The company has implemented a systemof evaluating performance of the Board of Directors and of its Committees and individualDirectors on the basis of a structured questionnaire which comprise evaluation criteriataking into consideration various performance related aspects. The Board of Directors haveexpressed their satisfaction with the valuation process.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Shri G Mangilal Surana Director of the Company will retire by rotation at the ensuingAnnual General Meeting and being eligible offers himself for re-appointment. Further thefirst term of appointment of Shri O.Swaminatha Reddy Shri R.Surender Reddy and ShriKamlesh Gandhi will expire on 21.09.2019. The Board of Directors of the Company at theirmeeting held on 7th August 2019 on the recommendation of the Nomination &remuneration Committee and by considering their experience and contributions made by themand on the basis of the report of performance evaluation recommended for approval of themembers for re-appointment of Shri O.Swaminatha Reddy Shri R.Surender Reddy and ShriKamlesh Gandhi as Independent Directors of the Company for second term of fiveyearseffectivefrom21 st September 2019. Further the term of appointment of Smt.Madhumathi Suresh as an Independent Director of the Company will expire on 22nd March2020. The Board of Directors of the Company at their meeting held on 7th August 2019 onthe recommendation of the Nomination & remuneration Committee and on the basis of thereport of performance evaluation recommended for the approval of the Members there-appointment of Smt. Madhumathi Suresh as Independent Director for a further period ofFive years from 22nd March 2020 to 21st March 2025.
Shri D.Venkata Subbaiah Independent Director of the Company is willing to retire fromthe Board due to his old age and whose term of appointment is upto this Annual GeneralMeeting. Shri D.Venkata Subbaiah in his long association with the Company has madevaluable contribution to the company and guided the Board in right manner.
The brief particulars of the Directors seeking appointment /re-appointment at thisAnnual General Meeting are being annexed to the Notice.
Pursuant to the provisions of Section 203 of the Act Shri Narender Surana and ShriDevendra Surana Managing Directors and Shri N. Krupkar Reddy Whole-time Director Shri.Surendra Bhutoria Chief Financial Officer and Mrs. Rachna Kewliya Company Secretary wereformalized as the Key Managerial Personnel of the Company.
MEETINGS OF THE BOARD:
During the financial year under review 5 (Five) Board Meetings were convened and heldthe details of which are given in the Corporate Governance Report. The intervening gapbetween the meetings was within the period of 120 days as prescribed under the CompaniesAct 2013 and Regulation
17 of SEBI Listing Regulations 2015.
The Company has not accepted any deposits from the public in terms of Section 73 of theCompanies Act 2013 and as such no amount on account of principal or interest on publicdeposits was outstanding as on the date of the balance sheet.
LISTING OF EQUITY SHARES:
The Company's equity shares are listed on the following
(i) BSE Limited Phiroze JeeJeebhoy Towers Dalal Street Mumbai 400 001Maharashtra India; and
(ii) National Stock Exchange of India Limited Exchange Plaza Floor 5 Plot No.C/1 G Block Bandra Kurla Complex Bandra (East) Mumbai 400 051Maharashtra India.
The Company has paid the Annual Listing Fees to the said Stock Exchanges for theFinancial Year 2019-20.
M/s. Luharuka & Associates Chartered Accountants were appointed as StatutoryAuditors of your Company at the Annual General Meeting held on 26th September 2017 for aterm of five consecutive years subject to ratification by Members at every Annual GeneralMeeting.
However in accordance with the Companies Amendment Act 2017 enforced on 7th May2018 by the Ministry of Corporate Affairs the appointment of Statutory Auditors is notrequired to be ratified at every Annual General Meeting.
M/s. Luharuka & Associates Chartered Accountants have confirmed that they are notdisqualified from continuing as Auditors of the Company. There are no qualificationsreservations or adverse remarks made by M/s. Luharuka & Associates CharteredAccountants Statutory Auditors in their report for the Financial Year ended 31st March2019.
The Statutory Auditors have not reported any incident of fraud to the Audit Committeeof the Company in the year under review.
The Board of Directors of the Company have re-appointed
M/s Sekhar & Co. Chartered Accountants as Internal Auditors to conduct InternalAudit for the financial year ended 31 st March 2020.
M/s Lavanya & Associates Cost Accountants Hyderabad has been appointed by theBoard on recommendations of Audit Committee as Cost Auditor for conducting audit of thecost accounts maintained by the Company relating to Base Metals and Electricity for thefinancial year 2019-20.
The Company has made and maintained the cost records as specified under Section 148(1)of the Companies Act 2013.
The Board of Directors of the Company appointed Mrs. Rakhi Agarwal Company Secretaryin Practice Hyderabad to conduct Secretarial Audit for the financial year 2019-20. TheSecretarial Audit Report of Mrs. Rakhi Agarwal Company Secretary in Practice for thefinancial year 2018-19 is annexed herewith as Annexure-VI.
The Secretarial Audit Report does not contain any qualification reservation or adverseremark. During the year under review the Company has complied with the applicableprovisions of the Secretarial Standards.
The Company has implemented the procedures and adopted practices in conformity with theCode of Corporate Governance as per the requirements of SEBI (Listing
Obligations and Disclosure Requirements) Regulations 2015. A separate report oncorporate governance practices followed by the Company together with a Certificate fromthe Company's Auditors confirming compliances forms an integral part of this Report.
VIGIL MECHANISM :
The Company has adopted a Whistle Blower Policy establishing vigil mechanism toprovide a formal mechanism to the Directors and employees to report concerns aboutunethical behavior actual or suspected fraud or violation of Code of Conduct and Ethics.It also provides for adequate safeguards against the victimization of employees who availof the mechanism and provides direct access to the Chairperson of the Audit Committee inexceptional cases. It is affirmed that no personnel of the Company has been denied accessto the Audit Committee. The policy of vigil mechanism is available on the Company'swebsite.
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 and
Remuneration of Managerial Personnel) Rules 2014 is provided as follows: (i) The ratioof the remuneration of each director to the median remuneration of the employees of thecompany for the financial
|Name of the Director ||Ratio to Median Remuneration |
|Shri Devendra Surana MD ||43.80 |
|Shri N. Krupakar Reddy WTD ||2.48 |
(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 Devendra Surana MD ||80.00 |
|Shri N.Krupakar Reddy WTD ||24.39 |
|Shri Surendra Bhutoria CFO ||13.31 |
|Mrs. Rachna Kewliya CS* ||NA |
* Appointed as Company Secretary w.e.f 19.06.2018
(iii) The percentage increase in the median remuneration of employees in the financial(iv) The number of permanent employees on the rolls of company 145.
(v) 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 in2018-19 was 9.50%. Percentage increase in the managerial remuneration for the year was52.19%.
(vi) Affirmation that the remuneration is as per the remuneration policy of the company- Yes.
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 Auditors team carries out extensive audit and evaluates the efficacy andadequacy of internal control system in the Company its compliance with operating systemsaccounting procedures and policies at all locations of the Company and its subsidiaries.Based on the report of internal audit function process owners undertake corrective actionin their respective areas and thereby strengthen the controls. Significant auditobservations and corrective actions thereon are presented to the Audit Committee of theBoard.
CHANGE IN NATURE OF BUSINESS :
There is no change in nature of business of the Company.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURT : year; There areno significant and material orders passed by the Regulators or Courts or Tribunals whichwould impact the going concern status of the Company and its future operations.
MATERIAL CHANGES AND COMMITMENTS :
There are no material changes and commitments affecting the financial position of theCompany which occurred between the end of the financial year 31st March 2019 to which thefinancial statements relates and the date of signing of this report.
HUMAN RESOURCES :
The industrial relations of the Company continued to be harmonious during the yearunder review.
ISO 9001-2008 CERTIFICATION :
Your Company continues to hold ISO 9001-2008 Certification by meeting all therequirements of Certification from time to time.
POLICY ON SEXUAL HARRASSEMENT : year 5.93%
The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplacein accordance with The Sexual Harassment of Women at Workplace (Prevention
Prohibition and Redressal) Act 2013.
The Internal Complaints Committee (ICC) has been setup to redress complaint receivedregarding sexual harassment. During the period under review no complaints was received bythe ICC.
CAUTIONARY STATEMENT :
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 supply conditions affectingselling prices of finished goods input availability and prices changes in governmentregulations tax laws economic developments within the country and other factors such aslitigation and industrial relations.
The Directors take this opportunity to place on record their sincere thanks to thesuppliers customers strategic partners
Banks and Financial Institutions Insurance Companies Central and State GovernmentDepartments and the shareholders for their support and co-operation extended to theCompany from time to time. Directors are pleased to record their appreciation of thesincere and dedicated services of the employees and workmen at all levels.
|For and on behalf of the Board of Directors || |
|NARENDER SURANA ||DEVENDRA SURANA |
|MANAGING DIRECTOR ||MANAGING DIRECTOR |
|DIN-00075086 ||DIN-00077296 |
|Place : Secunderabad || |
|Date : 07.08.2019 || |