DIRECTORS' REPORT To THE MEMBERS OF BHAGYANAGAR INDIA LIMITED The Directors have pleasure in presenting the 30th Annual Report of your Company and the Audited financial statements for the financial year ended 31st March 2015 together with Auditors' Report thereon. PERFORMANCE: In the year 2014-15, the Company focused on its core business Copper, its allied products and Solar & Wind Power Generation. The Copper, its allied products segment turnover grew by 11.75% compared to previous year. The operation of 5 MW solar power project at Munipally Village, Medak District, Telangana State has been stabilized during the year and the Company has made a revenue of Rs. 35,527,153/-. The income from operations is Rs. 2,517,467,311 as against Rs. 2,257,636,472 for the corresponding previous year. The profit before tax stood at Rs. 23,951,570 as against Rs. 30,007,327 for the previous year. The profit after tax stood at Rs. 20,502,843 as against Rs. 26,346,400 for the corresponding period. The Basic Earnings Per Share for the year-ended 31.03.2015 is Rs. 0.32 as against Rs. 0.41 for the corresponding previous year ended 31.03.2014. SUBSIDIARIES/ ASSOCIATES: 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 Subsidiaries and Associates: subsidiaries and Associates is set out in the prescribed Form AOC-1, which forms part of the annual report. Pursuant to the provisions of section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries, are available on the website of the Company. CONSOLIDATED FINANCIAL STATEMENTS: In accordance with the Companies Act, 2013 and Accounting Standard (AS)-21 on Consolidated Financial Statements read with AS-23 and AS-27 issued by the Institute of Chartered Accountants of India, the audited consolidated financial statements are provided in the Annual Report. DIVIDEND: Your Directors are pleased to recommend for approval of the members a dividend @15% (Rs. 0.30 per equity share of face value of Rs. 2/- each) for the financial year 2014-15. The total cash outflow on account of dividend on equity shares for the financial year 2014-15 would aggregate Rs. 2,30,35,400 (inclusive of tax thereon). RESERVES: During the year the Company has transferred an amount of Rs. 20,000,000 to General Reserves. FIXED DEPOSITS: The Company has not accepted or invited any Deposits and consequently no deposit has matured / become due for repayment as on 31st March 2015. OPERATIONS: Copper: The strategy for financial year 2015-16 will be to have continued focus on copper business with addition of new products. Your Company plans to achieve a growth of 10% in this segment with emphasis on value added products. Real Estate & Infra: The Land situated at Gachibowli which is held through subsidiaries, the applicability of G.O.111 is still under review by Hon'ble High Court of A.P. Further action on the property will be considered only after decision in this matter is taken by the Hon'ble High Court/State Govt. In respect of Uppal land, the Company is looking for joint development. Wind Power: The Company currently has an overall installed capacity of 9 MW comprising of 7 wind turbines in state of Karnataka and 6.4 Mw comprising 5 wind turbines in Tamilnadu through its Subsidiary viz., Solar Dynamics Private Limited. The said project is giving steady income. Solar Power: The Company successfully set up 5MW Solar Power project at Munipally, Medak District, Telangana State. Further, the Company has obtained all the approvals for accreditation of REC and sale of REC in the exchanges. The Company is generating steady revenue from the project. DIRECTORS: In terms of the provisions of Section 149 of Companies Act, 2013 and clause 49 of the Listing Agreement, Smt. Madhumathi Suresh has been appointed as Additional Director of the Company in the category of Independent Woman Director w.e.f 23.03.2015 based on the recommendation of Nomination and Remuneration Committee. Pursuant to Section 161(1) of the Act, Smt. Madhumathi Suresh holds office up to the date of forthcoming Annual General Meeting of the Company and is eligible for appointment as Director. The Board recommends their appointment and accordingly resolution seeking approval of the members for their appointments has been included in the Notice of forthcoming Annual General Meeting of the Company along with their brief profile. Shri Narender Munoth, Whole-time Director of the Company will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Further, there has been no change in the circumstances which may affect their status as independent director during the year. 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, the appointment of Shri Narender Surana and Shri Devendra Surana, Managing Directors and Shri Narender Munoth and Shri N. Krupkar Reddy, Whole-time Directors, Shri. Surendra Bhutoria, Chief Financial Officer were formalized as the Key Managerial Personnel of the Company. BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out performance evaluation taking into consideration of various aspects of the Board's functioning, composition of Board, and its Committees, execution, and performance of specific duties, obligations and governance. The Performance of evaluation of Independent Directors was completed. The Performance evaluation of Chairman and the Non-Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with evaluation process. 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 Remuneration Policy is stated in the Corporate Governance Report. MEETINGS During the year 5 (five) Board Meetings and 4 (four) Audit Committee 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 Clause 49 of the Listing Agreement. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Details of Loans, Guarantees and Investments covered under the provisions of Section 186 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'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, where ever 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. The particulars of contracts and 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. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURT: There are no significant and material orders passed by the Regulators/ Courts that would impact the going concern status of the Company and its future operations. AUDITORS Statutory Auditors Pursuant to the provisions of Section 139 of the Act and the rules framed there under, M/s Sekhar & Co, Chartered Accountants, were appointed as statutory auditors of the Company from the conclusion of the 29th Annual General Meeting of the Company held on 22nd September, 2014 till the conclusion of the 32nd Annual General Meeting to be held in the year 2017, subject to ratification of their appointment at every AGM. 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 2015-16. 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. Secretarial Auditors 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 M/s. Rakhi Agarwal & Associates, Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the Financial Year 2014-15. The Report of the Secretarial Audit Report is annexed herewith as "Annexure-V". Internal Auditors M/s Luharuka & Associates, Chartered Accountants performs the duties of internal auditors of the Company and their report is reviewed by the Audit Committee from time to time. ISO 9001-2008 CERTIFICATION: Your Company continues to hold ISO 9001-2008 Certification by meeting all the requirements of Certification from time to time. CORPORATE SOCIAL RESPONSIBILITY (CSR): The Company is not covered under the criteria mentioned in the provisions 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. As part of the Corporate Social Responsibility (CSR) activity, the Company has contributed X 3 Lakhs during the year. MANAGEMENT DISCUSSION AND ANALYSIS REPORT Management Discussion and Analysis Report for the year under review as stipulated under Clause 49 of the Listing Agreement with the stock exchanges, is presented in a separate section forms part of the Annual Report as Annexure-II. CORPORATE GOVERNANCE: The Company has implemented the procedures and adopted practices in conformity with the Code of Corporate Governance enunciated in Clause 49 of the Listing Agreement with the Stock Exchanges. 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. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure-IV". 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. RISK MANAGEMENT The Board of the Company has formed a Risk Management Committee to frame, implement and monitor the risk management policy/plan for the Company and ensuring its effectiveness. The Risk Management Committee oversees the Risk Management process including risk identification, impact assessment, effective implementation of the mitigation plans and risk reporting. 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. VIGIL MECHANISM / WHISTLE BLOWER POLICY In order to ensure that the activities of the Company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behaviour the company has adopted a vigil mechanism policy. HUMAN RESOURCES: Many initiatives have been taken to support business through organizational efficiency, process change support and various employee engagement programmes which has helped the Organization achieve higher productivity levels. A significant effort has also been undertaken to develop leadership as well as technical/ functional capabilities in order to meet future talent requirement. DIRECTORS' RESPONSIBILITY STATEMENT: To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013: a) That in the preparation of the accounts for the financial year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 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 of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) That the Directors have prepared the accounts for the financial year ended 31st March 2015 on a 'going concern' basis; e) That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; and f) That devised proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. 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. DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under. During the financial year 2014-15, the Company received no complaints on sexual harassment. 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 Disclosures with respect to the remuneration of Directors and employees as required under 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 ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year; (iii) The percentage increase in the median remuneration of employees in the financial year - 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 and company performance; On an average, employees received an increase of 14.05%. The increase in remuneration is in line with the market trends. (vi) Comparison of the remuneration of the Key Managerial Personnel against the performance of the company; 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 Board desires to place on record its sincere appreciation for the support and co-operation that the Company received from the suppliers, customers, strategic partners, Bankers, Auditors, Registrar and Transfer Agents and all others associated with the Company. The Company has always looked upon them as partners in its progress and has happily shared with them rewards of growth. It will be the Company's endeavor to build and nurture strong links with trade based on mutuality, respect and co-operation with each other. For and on behalf of the Board of Directors NARENDER SURANA DEVENDRA SURANA MANAGING DIRECTOR MANAGING DIRECTOR Date : 06.08.2015 Place : Secunderabad |