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DIRECTOR'S REPORT

Bhageria Industries Ltd.

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Market Cap. (₹) 464.16 Cr. P/BV 1.36 Book Value (₹) 78.45
52 Week High/Low (₹) 167/96 FV/ML 5/1 P/E(X) 6.49
Bookclosure 31/08/2019 EPS (₹) 16.38 Div Yield (%) 4.58
Year End :2018-03 

The Directors have great pleasure in presenting the 29th Annual Report together with the Audited Accounts of the Company for the financial year ended March 31, 2018.

1. FINANCIAL HIGHLIGHTS:

The following is the highlight of the financial performance of the Company during the year under review.

(Rs. in Crores)

Particulars

2017-18

2016-17

Revenue from Operations (net of tax)

373.31

373.46

Other Income

11.54

10.08

Total Income

384.85

383.54

EBITDA

91.33

72.48

Less : Finance Cost

6.05

1.56

Less : Depreciation & Amortisation expenses

22.88

6.04

Profit before tax

62.40

64.89

Tax Expenses

22.06

21.42

Net Profit after tax

40.34

43.46

Other Comprehensive Income (Net of tax)

(0.07)

(0.04)

Total Comprehensive Income after tax

40.27

43.42

Earing per shares of Rs. 5 each (In Rs.)

18.45

23.02

2. OPERATIONAL REVIEW:

During the year under review, the Company has achieved a revenue of Rs. 384.85 Crores as against Rs. 383.54 Crores in the previous financial year. The Profit after tax for the financial year 2017-18 was Rs. 40.27 Crores as compared to previous year of Rs. 43.42 Crores due to higher depreciation of Rs. 22.88 Crores as against previous year of Rs. 6.04 Crores which resulted in a decline of 7.1%.

Dyes and Dye intermediates & Chemical Business

The turnover of the company from chemical business amounted to Rs.342.36 Crores as against Rs. 344.51 Crores for the previous year. The EBIT from this segment has shown an improvement at Rs. 62.73 Crores as against Rs. 58.59 Crores in the previous year.

Solar Power Business

The turnover of the company from solar power operations has gone up to Rs.24.49 Crores as against Rs. 2.63 Crores for the previous year. The EBIT from this segment has shown an improvement at Rs. 2.00 Crores as against Rs.0.12 Crores in the previous year.

3. SCHEME OF AMALGAMATION OF NIPUR CHEMICALS LIMITED WITH THE COMPANY:

The Hon'ble National Company Law Tribunal, Mumbai Bench approved the Scheme of Arrangement in the nature of Amalgamation between the Company and Nipur Chemicals Limited (Amalgamating Company) vide its Order dated April 5, 2018. Both the Companies have filed the said Order with the Registrar of Companies, Mumbai on May 3, 2018. Consequent upon the Scheme became effective from May 3, 2018 with effect from October 1, 2016, being the Appointed Date of the Scheme.

Upon coming into effect of the Scheme, 45,940 equity shares held by Nipur Chemicals Limited in the Company shall get cancelled on account of cross holdings and the Company is required to allot 59,42,530 Equity shares to the shareholders of Nipur Chemicals Limited in pursuance to the Scheme of Amalgamation. Thereafter, the Paid-up Capital of the company will increase to Rs. 10,91,10,450 (Ten Crore Ninety One Lakh Ten Thousand Four Hundred and Fifty) divided into 2,18,22,090 (Two Crore Eighteen Lakh Twenty Two Thousand & Ninety) equity shares of Rs. 5 each.

Your Company has given effect to the Scheme in the Accounts and accordingly the Assets and the Liabilities of Nipur Chemicals Limited are transferred to and vested in the Company with effect from October 1, 2016, being the Appointed Date of the Scheme.

Income accruing and expenses incurred by Nipur Chemicals Limited, during the period from October 1, 2016 to 31 March, 2018, have been incorporated in the Financial Statements after eliminating inter-company transactions. The effects of these transactions are reflected in the Financial Statements.

4. DIVIDEND:

Your Directors have pleasure in recommending, for approval of the Members, at its 29th Annual General Meeting, a Dividend of Rs. 5.50/- per share i.e.110% for the year ended March 31, 2018. If approved at the forthcoming Annual General Meeting, it will result in an outflow of Rs.12 Crores to the Members of the Company, in addition to Rs. 2.47 Crores as dividend distribution tax.

This will be 25th consecutive year of payment of dividend by your Company.

The Company has not transferred any amount to General Reserve during the financial year.

5. CAPITAL STRUCTURE & LIQUIDITY:

Authorised Share capital

Upon coming into effect of the Scheme, the Authorised Share Capital of Nipur Chemicals Limited (Transferor Company) amounting to Rs. 6,00,00,000/- has been added to the Authorised Share Capital of Bhageria Industries Ltd. (Transferee Company). Hence, the Authorised Capital of the Company has been increased to Rs.14,00,00,000/- (Rupees Fourteen Crores only) divided into 2,80,00,000 (Two Crores Eighty Lakhs) equity shares of Rs. 5/- each.

Issued and paid up Share Capital

The Paid Up Equity Share Capital as at March 31, 2018 was Rs. 79,627,500/- divided into 1,59,25,500 Equity Shares, having value of Rs.5/- each fully paid up. During the year under review, the Company has not issued any shares with differential voting rights nor granted any stock options nor sweat equity.

Note: The Company is required to allot 59,42,530 equity shares to the shareholders of Nipur Chemicals Limited in pursuance to the Scheme of Amalgamation. Thereafter, the Paid-up Capital of the company will increase to Rs. 10,91,10,450 (Ten Crore Ninety One Lakh Ten Thousand Four Hundred and Fifty) divided into 2,18,22,090 (Two Crore Eighteen Lakh Twenty Two Thousand & Ninety) equity shares of Rs. 5/- each.

6. SUBSIDIARIES & ASSOCIATE COMPANIES:

The Company does not have any subsidiary or associate companies.

7. BOARD OF DIRECTORS:

Re-appointments:

In accordance with the provisions of Section 152 of the Companies Act 2013 and the Articles of Association of the Company, Mr. Suresh Bhageria, Director of the Company, retires by rotation at the forthcoming Annual General Meeting and being eligible offers himself for re-appointment.

The Board of Directors on recommendation of the Nomination and Remuneration Committee has approved the re-appointment of Mr. Suresh Bhageria as Executive Chairperson, Mr. Vinod Bhageria as Managing Director and Mr. Vikas Bhageria as Jt. Managing Director (Whole-time Director) for a period of 3 years with effect from April 1, 2018 to March 31, 2021 subject to approval of the members at the ensuing Annual General Meeting.

Based on evaluations and recommendations of Nomination and Remuneration Committee and in terms of the provisions of Sections 149, 150, 152 read with Schedule IV and any other applicable provisions of the Act and the Listing Regulations, the Board recommends re-appointment of Mr. Sandeep Kumar Singh, Mr. Omprakash Anandilal Bubna, Dr. Shyam Chandrabhan Agarwal, Mr. Pradipkumar Shankar Dalvi and Mr. Surendra Shriram Gupta as Independent Directors for another term of five consecutive years with effect from April 1, 2019 to March 31, 2024, for the approval of Members.

8. DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received necessary declaration from each Independent Director under Section 149(7) of the Companies Act, 2013 that he meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of the Listing Regulations.

9. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134 of the Act, with respect to Directors Responsibility statement it is hereby confirmed:

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

b) that 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, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively;

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.

10. KEY MANAGERIAL PERSONNEL:

Sr.

No

Name of Personnel

Designation

1.

Mr. Suresh Bhageria

Chairperson

2.

Mr. Vinod Bhageria

Managing Director

3.

Mr. Vikas Bhageria

Jt. Managing Director

4.

Mrs. Chandraprabha Bhageria

Whole-time Director

5.

Mr. Rakesh Kachhadiya

Chief Financial Officer

*6.

Mr. Shrinath Tiwari

Company Secretary

**7

Mr. Ketan Gaur

Company Secretary

*Mr. Shrinath Tiwari resigned from the Company w.e.f. October 31, 2017.

**Mr. Ketan Gaur was appointed w.e.f. January 25, 2018.

11. ANNUAL PERFORMANCE EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, 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 evaluation criteria suggested by the Nomination and Remuneration Committee and the Listing Regulations. Accordingly, the Board has carried out an evaluation of its performance after taking into consideration various performance related aspects of the Board's functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, remuneration, obligations and governance. The performance evaluation of the Board as a whole, Chairperson and Non-Independent Directors was also carried out by the Independent Directors in their meeting held on January 25, 2018.

Similarly, the performance of various committees, individual Independent and Non Independent Directors was evaluated by the entire Board of Directors (excluding the Director being evaluated) on various parameters like engagement, analysis, decision making, communication and interest of stakeholders.

The Board of Directors expressed its satisfaction with the performance of the Board, its committees and individual directors.

12. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS:

The Board met 5 (Five) times during the financial year. The meeting details are provided in the Corporate Governance Report that forms a part of this Annual Report. The maximum interval between any two meetings did not exceed 120 days as prescribed in the Companies Act, 2013.

13. AUDIT COMMITTEE:

In accordance with the provisions of the Regulation 18 of SEBI (LODR) Regulations, 2015 and Companies Act, 2013, the Company is having an Audit Committee comprising of Independent Directors. The Audit Committee was reconstituted on May 4, 2018, the Committee acts in accordance with the terms of reference specified from time to time by the Board. The details of the terms of Audit Committee and other details are explained in the Corporate Governance Report.

14. REMUNERATION & NOMINATION POLICY:

The Board of Directors as per recommendations of the Nomination & Remuneration Committee has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. The policy lays down the criteria for selection and appointment of Board Members. The details of the policy are explained in the Corporate Governance Report.

15. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company has a Vigil Mechanism / Whistle Blower policy to report genuine concerns, grievances, frauds and mismanagements, if any. The Vigil Mechanism /Whistle Blower policy has been posted on the website of the Company (www.bhageriagroup.com).

16. PUBLIC DEPOSITS:

Your Company has not accepted any deposits from the public within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

17. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the Notes to the financial statements provided in this Annual Report. (Refer note no. 48)

18. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:

The Company is having in place a "Corporate Social Responsibility" (CSR) Committee. As part of its initiatives under CSR, the company has contributed funds for the schemes of rural development, promotion of education and medical aid. The contribution in this regard has been made to the registered trust(s) which are undertaking these schemes. The Company has also undertaken schemes in which the amount has been directly spent by the Company.

The Annual Report on CSR activities is annexed herewith as: Annexure 'A'.

19. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF REPORT:

There were no material changes affecting the financial position of the Company between the end of the financial year and date of report.

20. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

There were no significant and material orders passed by the Regulators or Courts during the financial year ended March 31, 2018.

The Hon'ble National Company Law Tribunal, Mumbai Bench approved the Scheme of Arrangement in the nature of Amalgamation between the Company and Nipur Chemicals Limited vide its Order dated April 5, 2018.

21. EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in Form MGT-9, as required under Section 92 of the Companies Act, 2013 is included in this Report as Annexure 'B' and forms an integral part of the Report.

22. INVESTOR EDUCATION & PROTECTION FUND (IEPF):

Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the Rules"), all unpaid or unclaimed dividends are required to the transferred by the Company to the IEPF established by the Government of India, after the completion of seven years. Further, according to the Rules, the shares on which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account of IEPF Authority. Accordingly, the Company has transferred the unclaimed and unpaid dividends of Rs.1,97,608/-in respect of financial year 2009-10. Further, 1,22,400 Equity shares were transferred as per the requirements of IEPF rules. The details are available on our website www.bhageriagroup.com.

23. RELATED PARTY TRANSACTIONS:

Your Company has formulated a policy on related party transactions which is also available on Company's website www.bhageriagroup.com. This policy deals with the review and approval of related party transactions. The Board of Directors of the Company had approved the criteria for making the omnibus approval by the Audit Committee within the overall framework of the policy on related party transactions. Prior omnibus approval is obtained for related party transactions which are of repetitive nature and entered in the ordinary course of business and on an arm's length basis. All related party transactions are placed before the Audit Committee for review and approval.

All related party transactions entered during the Financial Year were in ordinary course of the business and on an arm's length basis. No material related party transactions were entered during the Financial Year by your Company. Accordingly, no disclosure is made in respect of related party transactions, as required under Section 134(3)(h)of the Act in Form AOC 2. Members may refer to note no. 48 of the financial statements which sets out related party disclosures pursuant to INDAS-24.

24. CODE OF CONDUCT:

Your Company is committed to conducting its business in accordance with the applicable laws, rules and regulations and highest standards of business ethics. In recognition thereof, the Board of Directors has implemented a Code of Conduct for adherence by the Directors, Senior Management Personnel and Employees of the Company. The Code of Conduct is dealing with ethical issues and also foster a culture of accountability and integrity. The Code in accordance with the requirements of SEBI (LODR) Regulations, 2015 has been posted on the Company's website www.bhageriagroup.com.

All the Board Members and Senior Management Personnel have confirmed compliance with the Code.

25. STATUTORY AUDITORS:

M/s. MRB & Associates, Chartered Accountants, (Firm Registration No.136306W), were appointed as the Statutory Auditors of the Company at the 28th AGM held on December 2, 2017 and will hold office until the conclusion of the 33rd AGM to be held in 2022, are recommended for ratification of appointment for the Financial Year 2018-19. As required under the provisions of Section 139 of the Companies Act, 2013, the Company has obtained written confirmation from M/s. M R B & Associates that their appointment for the financial year 2018-19 would be in conformity with the limits specified in the said Section.

The Report given by M/s. MRB & Associates, Chartered Accountants, on the financial statements of the Company for the financial year 2017-2018 is a part of the Annual Report. There has been no qualification, reservation or adverse remark or disclaimer in their Report. During the year under review, the Auditors had not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3)(ca) of the Act.

26. COST AUDIT:

As per the requirement of the Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your company has been complying with the provisions of audit of cost records of the Company every year. The Board of Directors, on the recommendation of the Audit Committee, have appointed M/s. Sushilkumar Mantri & Associates, Cost Accountants as the Cost Auditors to audit the accounts of the Company for the Financial Year 2018-19 at a remuneration of 85,000/- plus GST as applicable and reimbursement of out of pocket expenses. As required under the Companies Act, 2013, a resolution seeking member's approval for remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting.

27. INTERNAL AUDIT:

Pursuant to provisions of Section 138 of the Companies Act, 2013 the Board on recommendation of the Audit Committee has appointed M/s. Kamal Dhanuka & Co, Chartered Accountants, having Registration No.131308W as Internal Auditors of the Company.

28. SECRETARIAL AUDIT:

The Secretarial Audit was carried out by M/s. GMJ & Associates, a firm of Company Secretaries in Practice for the Financial Year 2017-2018. The Report given by the Secretarial Auditors is annexed as Annexure 'C' and forms an integral part of this Board's Report. There has been no qualification, reservation or adverse remark or disclaimer in their Report. During the year under review, the Secretarial Auditors had not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3)(ca) of the Act.

In terms of Section 204 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules,2014, the Audit Committee recommended and the Board of Directors have appointed M/s. GMJ & Associates, Company Secretaries as the Secretarial Auditors of the Company in relation to the financial year ending March 31, 2019. The Company has received their written consent that the appointment is in accordance with the applicable provisions of the Act and rules framed there under.

29. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Directors have laid down internal financial controls to be followed by your Company and such policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. The Audit Committee evaluates the internal financial control system periodically.

30. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS:

The Company adheres to the requirements set out by the Securities and Exchange Board of India's Corporate Governance practices and have implemented all the stipulations prescribed. The Company has implemented several best corporate governance practices.

The Corporate Governance and Management Discussion & Analysis Report, which form an integral part of this Report, are set out as separate Annexures, together with the Certificate from the Statutory Auditors of the Company regarding compliance with the requirements of Corporate Governance as stipulated in SEBI (LODR) Regulations, 2015.

31. PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO:

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Companies Act, 2013, read with the Rule 8(3) of the Companies (Accounts) Rules, 2014 is given in Annexure 'D' to this Report.'

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

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. The Company affirms that during the year under review, no complaints were received by the Committee for redressal.

33. ENVIRONMENT AND SAFETY:

The Company is aware of the importance of environmentally clean and safe operations. The Company's policy requires conduct of operations in such a manner, so as to ensure safety of all concerned, compliances, environmental regulations and preservation of natural resources at the Plant.

34. RISK MANAGEMENT POLICY:

The Board of Directors had constituted Risk Management Committee to identify elements of risk in different areas of operations and to develop policy for actions associated to mitigate the risks.

The Committee on timely basis informed members of Board of Directors about risk assessment and minimization procedures which in the opinion of the Committee may threaten the existence of the Company.

Since the constitution of Risk Management Committee was not mandatory to the Company, the Board has dissolved the Committee and taken over the responsibility of ensuring compliance with the Risk Management policy.

35. PARTICULARS OF EMPLOYEES:

The information required pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure 'E' & 'F' to this Report.

36. AFFIRMATION ON COMPLIANCE OF SECRETARIAL STANDARDS:

The Board of Directors of the Company has affirmed with the compliances of Secretarial Standards issued by Institute of Company Secretaries of India.

37. LISTING:

The Company's Shares are listed on BSE Limited and National Stock Exchange of India Limited, Mumbai.

38. APPRECIATION:

Your Directors would like to express their sincere appreciation to the company's Shareholders, Vendors and Stakeholders including Banks, Government authorities, other business associates, who have extended their valuable sustained support and encouragement during the year under review. Your Directors also wish to place on record their appreciation for the hard work, solidarity, cooperation and support of employees at all levels.

Registered Office: For and on behalf of the Board

1002, 10th Floor, BHAGERIA INDUSTRIES LIMITED

Topiwala Centre,

Off S. V. Road, SURESH BHAGERIA

Goregaon [ West ], (DIN: 00540285)

Mumbai - 400 062. CHAIRPERSON

Date : May 4, 2018.

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