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Bhagyanagar India Ltd.

BSE: 512296 | NSE: BHAGYANGR |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE458B01036 | SECTOR: Cables - Telephone

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30-Day
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840
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  • Bid Price (Qty.)

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Volume
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5-Day
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10-Day
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30-Day
13,335
472
  • Prev. Close

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  • Open Price

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  • Bid Price (Qty.)

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  • Offer Price (Qty.)

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Annual Report

For Year :
2018 2016 2015 2014 2013 2012 2011 2010 2009

Director’s Report

To the Members of Bhagyanagar India Limited

The Directors have pleasure in presenting the 33rd Annual Report of your Company and the Audited financial statements for the financial year ended 31st March 2018 together with Auditors’ Report thereon.

FINANCIAL RESULTS:

The performance of the Company during the year has been as under:

(Amount in Rs.)

Particulars

Standalone Results

Consolidated Results

2018

2017

2018

2017

Sales and other Income

458,40,48,786

301,73,25,935

458,40,63,786

304,35,01,209

EBIDTA

24,23,89,531

21,08,56,378

24,23,56,073

22,55,25,588

LESS :

Loss on Foreign Exchange Fluctuation

2,43,464

1,20,63,099

2,43,464

1,20,63,099

Depreciation

3,61,24,508

3,43,58,606

3,76,30,339

4,71,18,799

Interest

3,81,50,522

5,96,71,798

3,81,53,322

6,12,87,285

Amortisation of FCMITDA

-

1,08,44,686

-

1,08,44,686

Extraordinary Items

-

4,25,88,988

-

4,25,88,988

Profit before Taxation

16,78,71,037

5,13,29,201

16,63,28,948

5,16,22,731

Provision for Taxation : Current Tax

3,40,97,481

1,03,74,911

3,40,97,481

1,04,54,117

Deferred Tax

33,00,668

20,97,640

33,00,668

(27,45,589)

MAT Credit

18,24,460

(95,97,782)

18,24,460

(95,97,782)

Tax of earlier years

-

-

-

745

Profit after Tax

12,86,48,428

4,84,54,432

12,71,06,339

5,35,53,473

Less: Non-Controlling Interest

18,76,517

Add: Change in Interest of Associate Companies

(5,27,657)

5,27,657

Add: Divestment on account of Demerger

(6,94,42,726)

12,70,407

Surplus brought forward from previous year

77,68,44,264

75,15,89,062

79,82,13,232

76,79,37,442

Balance available for appropriation

90,54,92,692

80,00,43,494

85,53,49,188

82,14,12,462

Transfer to General Reserves

5,00,00,000

2,31,99,230

5,00,00,000

2,31,99,230

Balance c/f to Balance Sheet

85,54,92,692

77,68,44,264

80,53,49,188

79,82,13,232

Note: The previous years’ figures regrouped and rearranged wherever necessary in order to make them comparable as per Ind-AS.

PERFORMANCE AND OPERATIONS:

During the year 2017-18, the Company’s total revenue is increased by 51.92% as that of previous year. EBIDTA stood at 5.28% as compared to that of last year 6.99%. PBT increased by 227.05% as compared to that of last year. PAT also increased by 165.50% as compared to that of previous year.

BUSINESS OUT LOOK:

The Company will remain focused on copper business and continue to add further value added products in line with the requirement of our OEM customers. We are looking at a minimum of 10% volume growth in this year. The Company received a major boost since the implementation 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 gone up. The company’s disadvantage against tax free territories like Silvasa will no longer apply. Post demonitisation, the customer base has increased and diversified.

EXPANSION PLANS:

The company’s competitiveness in terms of pricing has gone up post GST and volumes have increased substantially. With the kind of growth mode the Company is in the existing capacity as well as space is not enough to meet the demand. Therefore, the Company has decided to double the capacity to 30000 MT from the existing 15000 MT. The expansion shall be done through a 100% subsidiary viz., Aanvik Mercantile Private Limited (AMPL). AMPL has 65.28 Acres of land in Shabhashpally village, Medak District, located near the proposed inner Ring Road. The Company has already invested Rs.14.16 Crores out of capital outlay of Rs.40 Crores in the first phase. All the required statutory approvals are in process and commercial production is expected to commence in March, 2019. The Company is targeting consolidated turnover of Rs.1000 Crores in next 2 to 3 years.

DISINVESTMENT IN SUBSIDIARIES:

(i) Solar Dynamics Private Limited

The Company was carrying out wind power operations of 6.4 MW capacity in Tamil Nadu State through subsidiary company viz., Solar Dynamics Private Limited. Due to regulatory uncertainties and low growth prospective, the Company has exited from the wind power business in Tamil Nadu by selling all the wind mills situated therein. The divestment proceeds shall be utilized for the expansion of copper manufacture facilities.

(ii) Bhagyanagar Metals Limited

Bhagyanagar Metals Limited having land parcel of 22 Acres of land was in incorporated for the future expansion plans. As the land parcel of 22 Acres is not sufficient to meet the expansion criteria, the subsidiary has been hived off. The disinvestment proceeds shall be utilized for expansion of copper manufacturing facilities.

(iii) Bhagyanagar Cables Pvt Ltd

As your company has exited from cables/telecom business long back and the focus is only on copper business now, keeping miniscule Interest in Bhagyanagar Cables Pvt Ltd is no longer worthwhile.

SALE OF FACTORY LAND & BUILDING:

During the year, the factory land & building (erst-while JFTC factory) situated at Pilerne Industrial Estate, Pilerne, Goa, admeasuring 19865 Sq. Mtrs has been sold for Rs.9.55 Crores.

SUBSIDIARIES/ ASSOCIATES:

Your company has the following wholly owned subsidiary Company as on 31st March, 2018. Further there has been no material change in the nature of its business:

Name of the Company

Percentage of Shareholding

Subsidiary/ Associate

Aanvik Mercantile Private Limited

100.00

Wholly-owned Subsidiary

In terms of proviso to sub section (3) of Section 129 of the Act, 2013 read with Companies (Accounts) Rules, 2014, the salient features of the financial statement of the subsidiaries and Associates is set out in the prescribed Form AOC-1, which forms part of the annual report.

CONSOLIDATED FINANCIAL STATEMENTS:

The consolidated financial statements prepared and annexed in accordance with the Accounting Standards 21 and 23 as prescribed under Section 133 of the Companies Act, 2013, read 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 the provisions of Section 136 of the Companies Act, 2013, the Company has placed separate audited accounts of its subsidiaries on its website www.bhagyanagarindia. com and copy of separate audited financial statements of its subsidiaries will be provided to the shareholders at their request.

SECRETARIAL STANDARDS:

The Directors state that applicable Secretarial Standards, i.e., SS-1 and SS-2, relating to ‘Meetings of the Board of Directors’ and ‘General Meetings’, respectively, have been duly followed by the Company.

SHARECAPITAL:

The paid-up Share Capital of the Company as on 31st March, 2018 is Rs.6,39,90,000 divided into 3,19,95,000 equity shares of Rs.2/- each.

DIVIDEND:

The Board of Directors have not recommended dividend for the financial year 2017-18 to retain the maximum possible cash in the system. The Company is constrained to skip the dividend in view of the impeding cash out flow on account of ECB repayment obligations and the proposed expansion plans.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

The Management Discussion and Analysis forms an integral part of this Report and gives details of the overall industry structure, developments, performance and state of affairs of the Company’s business, internal controls and their adequacy, risk management systems and other material developments during the financial year.

Management Discussion and Analysis Report is presented in a separate section forms part of the Annual Report as Annexure-II.

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, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) That the directors have 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 31st March, 2018 and of the profit and loss of the company for that period;

(c) That the directors have 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) That the directors have prepared the annual accounts for the financial year 31st March, 2018 on a going concern basis; and

(e) That the directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

(f) That the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS:

The independent directors have submitted the declaration of independence, as required pursuant to sub-section (7) of section 149 of the Companies Act, 2013 stating that they 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 Committee, framed a policy which lays down a framework in relation to selection, appointment and remuneration to Directors, Key Managerial Personnel and Senior Management of the Company. The details of Nomination and Remuneration Committee and Policy are stated in the Corporate Governance Report.

PARTICULARS OF LOANS, GUARANTEES OR SECURITIES OR INVESTMENTS:

The details of Loans, Guarantees Securities and Investments made during the financial year ended 31st March, 2018 are given in the notes to the Financial Statements in compliance with the provisions of Section 186 of the Companies Act, 2013 read with Companies (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’s length basis and in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee as also the Board for approval, wherever required. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseeable and repetitive nature. A statement giving details of all related party transactions entered into pursuant to the omnibus approval so granted are placed before the Audit Committee and the 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 such transactions. The policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website www.bhagyanagarindia.com.

The particulars of contracts or arrangements with related parties referred to in sub-section (1) of section 188 is prepared in Form AOC-2 pursuant to clause (h) of the Companies (Accounts) Rules, 2014 and the same is annexed herewith as “Annexure-III” to this Report.

EXTRACT OF ANNUAL RETURN:

The Extract of Annual Return as per the provisions of Section 92 of the Companies Act, 2013 and Rule 12 of Companies (Management and Administration) Rules, 2014 in Form MGT-9 are enclosed as Annexure - IV to this Report.

PARTICULARS IN RESPECT OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information on Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and outgo required to be disclosed under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014 are provided in the Annexure-I forming part of this Report.

RISK MANAGEMENT POLICY:

In terms of the requirement Section 134(3)(n) and Regulation 21 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with relevant provisions of the Companies Act 2013 the Company has developed and implemented the Risk Management Policy. The Audit Committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The development and implementation of risk management policy has been covered in the management discussion and analysis, which forms part of this report. At present the Company has not identified any element of risk which may threaten the existence of the company.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

Pursuant to the provisions of Section 135(1) of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014, Corporate Social Responsibility (CSR) Committee was constituted on 26th May, 2018. During the year 2017-18, the Company is not covered under the criteria of Section 135(5) of Companies Act, 2013. The Company, however over the years, is pursuing as part of its Corporate Social Responsibility for welfare and aspirations of the Community. The CSR activities of the Surana Group are guided by the vision and philosophy of its founding father, Shri G Mangilal Surana, who embodied the value of trusteeship in business and laid the Foundation for its ethical and value-based functioning. The core elements of CSR activities include ethical functioning, respect for all stake-holders, protection of human rights, and care for the environment. The G.M. Surana Foundation is established purely for the purpose of providing medical relief to the people who are in below poverty line. It is being run by qualified and registered doctors.

BOARD EVALUATION

During the year under review, pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the evaluation of performance of all Directors is undertaken annually. The company has implemented a system of evaluating performance of the Board of Directors and of its Committees and individual Directors on the basis of a structured questionnaire which comprise evaluation criteria taking into consideration various performance related aspects.

The Board of Directors have expressed their satisfaction with the valuation process.

DIRECTORS:

Shri N.Krupakar Reddy, Director of the Company will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Shri Narender Surana and Shri Devendra Surana, were reappointed as Managing Directors of the Company for a further period of 3 years w.e.f. 18.01.2018, subject to approval of the members at this Annual General Meeting.

Further, Shri G.Mangilal Surana, Non-Executive Director, Shri O.Swaminatha Reddy, Shri R.Surender Reddy and Shri D.Venkata Subbaiah, Non-Executive Independent Directors of the Company who attained the age above 75 years are being appointed as Non-Executive Director/NonExecutive Independent Director through Special Resolution by shareholders at this Annual General Meeting pursuant to SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018.

The brief particulars of the Directors seeking appointment /re-appointment at this Annual General Meeting are being annexed to the Corporate Governance Report.

Pursuant to the provisions of Section 203 of the Act, Shri Narender Surana and Shri Devendra Surana, Managing Directors and Shri N. Krupkar Reddy, Whole-time Director, Shri. Surendra Bhutoria, Chief Financial Officer and Ms Rachna Kewliya, Company Secretary were formalized as the Key Managerial Personnel of the Company.

MEETINGS:

During the financial year under review, 5 (Five) Board Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the meetings was within the period of 120 days as prescribed under the Companies Act, 2013 and Regulation 17 of SEBI Listing Regulations, 2015.

DEPOSITS:

The Company has not accepted any deposits from the public in terms of Section 73 of the Companies Act, 2013 and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.

STATUTORY AUDITORS:

M/s. Luharuka & Associates, Chartered Accountants were appointed as Statutory Auditors of your Company at the 32nd Annual General Meeting held on 26th September, 2017, for a term of five consecutive years. As per the provisions of Section 139 of the Companies Act, 2013, the appointment of Auditors is required to be ratified by Members at every Annual General Meeting.

In accordance with the Companies Amendment Act, 2017, enforced on 7th May, 2018 by the Ministry of Corporate Affairs, the appointment of Statutory Auditors is not required to be ratified at every Annual General Meeting. M/s. Luharuka & Associates, Chartered Accountants have confirmed that they are not disqualified from continuing as Auditors of the Company.

AUDITORS’REPORT:

There are no qualifications, reservations or adverse remarks made by M/s. Luharuka & Associates, Chartered Accountants, Statutory Auditors in their report for the Financial Year ended 31st March, 2018.

The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company in the year under review.

INTERNAL AUDITORS:

The Board of Directors of the Company have re-appointed M/s Sekhar & Co., Chartered Accountants as Internal Auditors to conduct Internal Audit for the financial year ended 31st March, 2019.

COST AUDITORS:

The Board of Directors, subject to the approval of the Central Government, re-appointed M/s BVR & Associates, Cost Accountants, holding Certificate of Practice no.16851, as a Cost Auditor for conducting the Cost Audit for the financial year 2018-19. Subject to section 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. The Company has also received a letter from the Cost Auditor, stating that the appointment, if made, will be within the limits prescribed pursuant to the section 141 of Companies Act, 2013.

CORPORATE GOVERNANCE:

The Company has implemented the procedures and adopted practices in conformity with the Code of Corporate Governance as per the requirements of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015.

A separate report on corporate governance practices followed by the Company together with a Certificate from the 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, to provide a formal mechanism to the Directors and employees to report concerns about unethical 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 avail of the mechanism and provides direct access to the Chairperson of the Audit Committee in exceptional cases. It is affirmed that no personnel of the Company has been denied access to the Audit Committee. The policy of vigil mechanism is available on the Company’s website. The Whistle Blower Policy aims for conducting the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior.

SECRETARIAL AUDIT REPORT:

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 has appointed Mrs. Rakhi Agarwal, Company Secretary in Practice as Secretarial Auditors to conduct Secretarial audit of the company for the financial year ended March 31, 2018.

The Secretarial Audit Report issued by Mrs. Rakhi Agarwal, Company Secretary in Practice in Form MR-3 is enclosed as Annexure - V to this Annual Report.

The Secretarial Audit Report does not contain any qualifications, reservation or adverse remarks.

PARTICULARS OF EMPLOYEES:

The Company has not employed any individual whose remuneration falls within the purview of the limits prescribed under the provisions of Section 197 of the Companies Act, 2013, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

PARTICULARS OF REMUNERATION:

The remuneration and perquisites provided to the employees and Management are at par with the industry levels. The remuneration paid to the Managing Director and senior executives are reviewed and recommended by the Nomination and Remuneration Committee.

(i) The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year;

Name of the Director

Ratio to Median Remuneration

Shri Devendra Surana, MD

38.66

Shri N. Krupakar Reddy, WTD

2.11

(ii) The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year;

Name of Person

% increase in remuneration

Shri Devendra Surana, MD

50.00

Shri N.Krupakar Reddy, WTD

-

Shri Surendra Bhutoria, CFO

6.92

Shri Badarish H Chimalgi, CS*

20.00

*Resigned as Company Secretary w.e.f 18.06.2018

(iii) The percentage increase in the median remuneration of employees in the financial year - 7.18%

(iv) The number of permanent employees on the rolls of company - 131.

(v) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration;

The average increase in salaries of employees other than managerial personnel in 2017-18 was 10.13%. Percentage increase in the managerial remuneration for the year was 46.21.

(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 and complexity of its operations. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board.

The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and its subsidiaries. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

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:

There are no significant and material orders passed by the Regulators or Courts or Tribunals which would 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 the Company which occurred between the end of the financial year 31st March, 2018 to which the financial statements relates and the date of signing of this report.

HUMAN RESOURCES:

The industrial relations of the Company continued to be harmonious during the year under review.

ISO 9001-2008 CERTIFICATION:

Your Company continues to hold ISO 9001-2008 Certification by meeting all the requirements of Certification from time to time.

POLICY ON SEXUAL HARRASSEMENT:

The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplace in 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 complaints received regarding sexual harrassement. During the period under review, no complaint was received by the ICC.

APPRECIATION:

Your Directors wish to place on record their appreciation to employees at all levels for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain at the forefront of the industry, despite increased competition from several existing and new players.

CAUTIONARY STATEMENT:

Statements in the Board’s Report and the Management Discussion & Analysis describing the Company’s objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company’s operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.

ACKNOWLEDGEMENTS:

The Directors take this opportunity to place on record their sincere thanks to the suppliers, customers, strategic partners, Banks and Financial Institutions, Insurance Companies, Central and State Government Departments and the shareholders for their support and co-operation extended to the Company from time to time. Directors are pleased to record their appreciation of the sincere 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: 06.08.2018

Director’s Report