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DIRECTOR'S REPORT

Bharat Rasayan Ltd.

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Market Cap. (₹) 2766.63 Cr. P/BV 6.77 Book Value (₹) 962.18
52 Week High/Low (₹) 6775/3325 FV/ML 10/1 P/E(X) 24.81
Bookclosure 25/09/2019 EPS (₹) 262.49 Div Yield (%) 0.02
Year End :2018-03 

Dear Shareholders,

The behalf of the Board of Directors, it is our pleasure to present the 29th Annual Report together with the Audited Statement of Accounts of Bharat Rasayan Limited (“the Company”) for the year ended March 31, 2018.

Financial Performance

The summarized standalone results of your Company and are given in the table below.

(Rs. in Lacs)

Particulars

As at 31.03.2018

As at 31.03.2017

Total Income

81,301

67,821

Total Expenses

65,034

56,585

Profit before Interest, Depreciation & Tax (EBITDA)

16,267

11,236

Provision for Income Tax (including for earlier years)

3,731

2,939

Net Profit after Tax

9,831

5,453

Earnings Per Share (EPS) (in Rs.)

231.41

128.35

Summary of Operations

During the year, your Company’s profit after tax stood at Rs.9,831 Lacs vis-a-vis Rs.5,453 Lacs in the previous year, registering a growth of approx. 80.29%.

Reserves

During the year, the Company has not transferred any amount to General Reserves of the Company.

Dividend

Your Directors have recommended a dividend of Rs.1.50 per equity share of Rs.10/- each for financial year 2017-18. The final dividend subject to the approval of the members at the Annual General Meeting will be paid to those members whose names appear in the Register of Members or in the records of the Depositories i.e. National Securities Depositories Limited (NSDL) and Central Depository Services (India) Limited (CDSL) as beneficial owners of the shares as at the end of business hours on the record date.

First - Time Adoption of IND AS

The financial statements for the year ended 31st March, 2018, are the first the Company has prepared in accordance with Ind AS. For periods upto and including the year ended 31st March 2017, the Company prepared its financial statements in accordance with accounting standards notified under Section 133 of the Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (“Indian GAAP” or “previous GAAP”).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on 31st March, 2018, together with the comparative period data as at and for the year ended 31st March, 2017. In preparing these financial statements, the Company’s opening balance sheet was prepared as at 1st April, 2016, the Company’s date of transition to Ind As.

Details of Board Meetings

During the year, Six (6) number of Board meetings were held, details of which are given below:

Date of the meeting

No. of Directors attended the meeting

30.05.2017

8

26.06.2017

5

14.08.2017

8

24.10.2017

8

14.11.2017

7

13.02.2018

7

Capital/ Finance

As on 31st March, 2018, the issued, subscribed and paid up share capital of your Company stood at Rs.4,24,87,400/-, comprising 42,48,740 equity shares of Rs.10/- each.

Extract of Annual Return

Pursuant to Section 92(3) of the Companies Act, 2013, (‘the Act’) and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of annual return is annexed.

Committees of Board

The details of composition of the Committees formulated by the Board of Directors are as under:

a . Audit Committee

Sr. No.

Name

Chairperson / Member

1.

Smt. Sujata Agarwal

Chairperson

2.

Shri Pankaj Gupta

Member

3.

Shri Rajender Prasad Gupta

Member

During the year, the Committee had met on 30.05.2017, 11.07.2017, 14.08.2017, 14.11.2017 and

13.02.2018.

b. Nomination & Remuneration Committee

Sr. No.

Name

Chairperson / Member

1.

Smt. Sujata Agarwal

Chairperson

2.

Shri Pankaj Gupta

Member

3.

Shri Suresh Kumar Garg

Member

During the year, the Committee had met on 26.06.2017 and 13.02.2018. c. Corporate Social Responsibility Committee

Sr. No.

Name

Chairperson / Member

1.

Shri Mahabir Prasad Gupta

Chairperson

2.

Shri Rajender Prasad Gupta

Member

3.

Smt. Sujata Agarwal

Member

During the year, the Committee had met on 22.02.2018.

The Committee had approved the CSR Policy and the Budget. The CSR Policy is uploaded on Company’s website. Further, the Report on CSR Activities / Initiatives is enclosed as annexure.

d. Stakeholders Relationship / Shareholder Grievance Committee

Sr. No.

Name

Chairperson / Member

1.

Shri Pankaj Gupta

Chairperson

2.

Smt. Sujata Agarwal

Member

3.

Shri Mahabir Prasad Gupta

Member

During the year, the Committee had met on 03.04.2017, 04.07.2017, 03.10.2017 and 09.01.2018. e. Share Transfer Committee

Sr. No.

Name

Chairperson / Member

1.

Shri Mahabir Prasad Gupta

Chairperson

2.

Shri Rajender Prasad Gupta

Member

3.

Smt. Sujata Agarwal

Member

During the year, the Committee had met on 20.04.2017, 29.05.2017, 04.07.2017, 25.07.2017, 16.08.2017, 01.09.2017, 19.09.2017, 03.11.2017, 12.12.2017, 20.01.2018, 09.02.2018 and 27.03.2018.

f. Committee of Directors

Sr. No.

Name

Chairperson / Member

1.

Shri Sat Narain Gupta

Chairperson

2.

Shri Mahabir Prasad Gupta

Member

3.

Shri Rajender Prasad Gupta

Member

During the year, the Committee had met on 10.04.2017, 05.05.2017, 19.05.2017, 28.06.2017, 31.07.2017, 23.08.2017, 01.09.2017, 24.11.2017, 07.12.2017 and 09.02.2018.

g. Directors’ Responsibility Statement

Pursuant to the requirement Clause (c) of Sub-Section (3) of Section 134 of the Companies Act, 2013, your Directors confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the Directors had 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 and of the profit and loss of the company for that period;

(c) the Directors had 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) the Directors had prepared the annual accounts on a going concern basis;

(e) the Directors, in the case of a listed company, had 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) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Statutory Auditors Report and Notes to Financial Statements

The Independent Auditor’s Report of M/s. R.D Garg & Co., Chartered Accountants, the Statutory Auditors of the Company, on the financial statements of the Company for the financial year ended 31st March, 2018, read with relevant Notes to Financial Statements are self-explanatory and do not call for any further explanation.

Cost Audit

In terms of the provisions of Section 148 and all other applicable provisions of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, M/s. M.K.Singhal & Co., Cost Accountants have been appointed as Cost Auditors to conduct the audit of cost records of your Company for the financial year 2018-19. The remuneration proposed to be paid to them requires ratification of the shareholders of the Company. In view of this, your ratification for payment of remuneration to Cost Auditors is being sought at the ensuing AGM.

Your Company submits its Cost Audit Report with the Ministry of Corporate Affairs within the stipulated time period.

Secretarial Audit

In terms of Section 204 of the Act and Rules made thereunder, M/s. Mamta Jain & Associates, Practicing Company Secretary have been appointed Secretarial Auditors of the Company. The report of the Secretarial Auditors is enclosed as annexure to this report. The report is self-explanatory and do not call for any further comments.

Particulars of Loan, Guarantees or investments

(i) Amount outstanding as at 31st March, 2018

Particulars

(Rs. in Lacs)

Loans Given

Nil

Guarantees Given

170.24

Surety given to Custom & Excise Commissioner

1,608.16

Investments Made in Mutual Funds

Nil

(ii) Loan, Guarantee and Investments made during the Financial Year 2017-18

Name of Entity

Relation

Amount (in Rs.)

Particulars of loan, guarantee and investments

Purpose for which the loans, guarantee and investments are proposed to be utilized

Dakshin Gujarat Vij Company Limited, Dahej, Gujarat

-

69.41

Guarantee Given

As security to electricity department

Reliance Industries Limited

-

20.00

Guarantee Given

As security against supply of Ethylene Gylcol (MEG)

SBI Mutual Funds (Short Term)

-

750.00

Short Term Investments

Cash Management

Related Party Transactions

None of the transactions with related parties falls under the scope of Section 188(1) of the Act. Information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure in Form AOC-2 and the same forms part of this report.

Human Resources

Your Company treats its “Human Resources” as one of its most important assets.

Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement.

Disclosure as per Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has zero tolerance for sexual harassment at workplace and has already 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 thereunder.

During the financial year 2017-18, the Company has not received any complaint on sexual harassment. Vigil Mechanism

Pursuant to the requirement of the Act, the Company has established vigil mechanism, a channel through which the Directors and Employees of the Company have a secure mechanism to report genuine concerns including any unethical behavior, actual or suspected frauds taking place in M/s Bharat Rasayan Limited for appropriate action or reporting.

Board Evaluation

The Board of Directors has carried out an annual evaluation of its own performance, Board Committees and individual Directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 (“SEBI Listing Regulations”).

Directors, who were designated, held separate discussions with each of the Directors of the Company and obtained their feedback on overall Board effectiveness as well as each of the other Directors.

A separate meeting of the Independent Directors (“Annual ID Meeting”) was convened, which reviewed the performance of the Board (as a whole), the Non-Independent Directors and the Chairman.

Some of the key criteria which were being considered for performance evaluation were as follows:

* Attendance at Board or Committee Meetings;

* Contribution at Board or Committee Meetings;

* Guidance/support to Management outside Board/Committee Meetings;

* Degree of fulfilment of key responsibilities;

* Board structure and composition; and

* Effectiveness of Board process;

Risk Management Policy

In terms of the requirement of the Act, the Company has developed and implemented the Risk Management Policy and the Audit Committee of the Board reviews the same periodically.

The main objective of this policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues.

Declaration by Independent Directors

Shri Pankaj Gupta, Shri Ram Kanwar, Smt. Sujata Agarwal, Shri Suresh Kumar Garg and Shri Rajesh Gupta are independent Directors on the Board of your Company. In the opinion of the Board and as confirmed by these Directors, they fulfil the conditions specified in Section 149 of the Act and the Rules made thereunder about their status as Independent Directors of the Company.

Company’s Policy on Appointment and Remuneration

During the year under review the Company is duly following the Nomination and Remuneration Policy. This remuneration policy has been prepared pursuant to the provisions of Section 178(3) of the Companies Act, 2013 (“Act”) and the relevant Listing Regulations.

Ratio of Remuneration of Director

The information required under Section 197 of the Act and the Rules made thereunder, in respect of employees of the Company is enclosed as Annexure to the Board’s Report.

Internal Financial Control

The internal financial controls with reference to the Financial Statements are commensurate with the size and nature of business of the Company.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants and the reviews being made by management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company’s internal financial controls were adequate and effective during the financial year 2017-18.

Secretarial Auditors’ Report

The Secretarial Auditors’ Report do not contain any qualifications, reservations or adverse remarks. Report of the Secretarial Auditor is given as an annexure which forms part of this report.

Directors and Key Managerial Personnel

Shri Ajay Gupta (DIN:02187741) and Shri Abhaykumar Rajendrakumar Sharma (DIN:07780742) were appointed as Additional Directors of the Company w.e.f. 01.04.2017. The Board of Directors in their meeting held on 29.03.2017 had appointed them as Executive Director/Whole Time Director and Key Managerial Personnel of the Company.

The Board of Directors in its meeting held on 26.06.2017 appointed Shri Rajesh Gupta (DIN: 00025368) as an Additional Director of the Company w.e.f. 26.06.2017 pursuant to the provision of Section 161 of the Companies Act, 2013.

Shri Ajay Gupta and Shri Abhaykumar Rajendrakumar Sharma, Directors of the Company retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for reappointment.

During the year, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than the sitting fees, commission and reimbursement of expenses, if any, incurred by them for the purpose of attending meetings of the Company.

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company are Mr. Rakesh Verma, Chief Financial Officer and Ms. Nikita Bahl, Company Secretary of the Company.

Transfer of Amounts to Investor Education and Protection Fund

Pursuant to the provisions of the Investor Education Protection Fund (Uploading of Information regarding Unpaid and Unclaimed amounts lying with Companies) Rules, 2012, the Company has already filed the necessary form and uploaded the details of unpaid and unclaimed amount lying with the Company, as on the date of last AGM (i.e. 27th September, 2017), with the Ministry of Corporate Affairs.

Deposits from Public

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

Disclosure requirements

As per SEBI Listing Regulations, corporate governance report with auditor’s certificate thereon and management discussion and analysis are attached, which form part of this report.

Particulars of Employees

Pursuant to the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, none of the employees was in receipt of remuneration exceeding the limit specifies in the Act and the corresponding rules.

Details of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

(a) Conservation of Energy

Energy conservation has been an important thrust area of the management and is being continuously monitored and efforts to conserve and optimize the use of energy through improved operational methods and other means are being continued on an ongoing basis. We have persistent in our efforts to ensure reuse, recycling to the extent possible.

Wherever possible, energy conservation measures have already been implemented by your Company.

With growing concerns, there has been an exhaustive search made for means of alternative energy which may be considered for implementation in future and your Company would continue to explore alternative sources of energy in future. Sustainability is deeply rooted in all the operations of your Company.

The energy consumption and the cost of production are being kept under control.

(b) Technology Absorption and Research and Development (R&D)

Technology Absorption, Adaptation & Innovation

1. The Company has no technical collaboration and the processes are carried out on the standard known technology and efforts are made to improve upon the same on an ongoing basis.

2. The Company has been in a position to cater to the requirements of customers, both Indian and foreign.

3. The Company has not imported any technology so far.

Research & Development (R&D)

1. Company’s In-house R&D facilities are recognized by the Ministry of Science and Technology, New Delhi.

2. R&D efforts of the Company are directed towards quality assurance and improvement of existing products quality.

3. Development of new processes for products is carried out on an ongoing basis. Several new products were developed during the year under review with special impetus on following aspects:

* Develop new products for contribution in growth of the Company.

* Competitive in terms of technical & commercial point of view.

* Enhanced effectiveness of products towards end use.

* More environment friendly process.

* More safe to manufacture.

4. Expenditure on R&D by Company’s In-house R&D Unit:

* Capital : Rs.94.79 Lacs

* Recurring : Rs.20.72 Lacs

* Total Rs.115.51 Lacs

* Total R&D expenditure (as % of total expenditure) : 0.18

(c) Foreign exchange earnings and Outgo

During the year, the total foreign exchange used was Rs.26,524.09 Lacs and the total foreign exchange earned was Rs.16,531.48 Lacs.

Acknowledgement

Your Directors place on record their appreciation for employees at all levels, who have contributed to the growth and performance of your Company.

Your Directors also thank the clients, vendors, bankers, shareholders and advisers of the Company for their continued support.

Your Directors also thank the Central and State Governments, and other statutory authorities for their continued support.

For and on behalf of the Board

M/s Bharat Rasayan Limited

Sd/-

(SAT NARAIN GUPTA)

NEW DELHI, Chairman & Managing Director

AUGUST 14, 2018 DIN: 00024660

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