BDH INDUSTRIES LIMITED
Your Directors have pleasure in presenting 26th Annual Report and AuditedFinancial Statements for the year ended 31st March 2016.
FINANCIAL RESULTS :
The financial performance of the Company is summarized below :-
| || ||(Rs. in Lakhs) |
|Particulars ||2015-16 ||2014-15 |
|Sales (Gross) ||4672.82 ||4512.56 |
|Sales (Net) ||4612.87 ||4461.35 |
|Other Income ||179.57 ||121.73 |
|Total Income ||4792.44 ||4583.08 |
|Profit before Interest and Depreciation ||587.90 ||502.06 |
|Less : Interest ||33.42 ||48.15 |
|Depreciation ||73.40 ||74.47 |
|Profit before tax ||481.08 ||379.44 |
|Less : Provision for Taxation ||162.91 ||132.00 |
|Deferred Taxation ||(4.45) ||(9.53) |
|Net Profit After Tax ||322.62 ||256.97 |
|Add : Surplus Brought Forward from the previous year ||1024.79 ||965.89 |
|Balance available for Appropriation ||1347.41 ||1222.86 |
|Less : Transfer to General Reserve ||48.39 ||38.55 |
|Less : Provision for Dividend ||115.15 ||97.87 |
|Less : Tax on Dividend ||23.44 ||20.36 |
|Less : Provision for Retirement Benefit || ||(20.21) |
|Less : Depreciation on transition to Schedule II of the || ||61.50 |
|Companies Act 2013 (Net of Deferred Tax) || || |
|Balance carried forward to Balance Sheet ||1160.43 ||1024.79 |
REVIEW OF OPERATIONS :
During the year 2015-16 Company achieved Sales (Net) of Rs. 4612.87 Lakhs as comparedto Rs. 4461.35 Lakhs in the previous year registering growth by 3% over previous year. TheOperating Profit of the Company i.e. Profit before Interest and Depreciation has increasedfrom Rs. 502.06 lakhs in previous year to Rs. 587.90 lakhs in 2015-16. The Company earnedNet Profit after Tax of Rs. 322.62 lakhs during the year as against Rs. 256.97 lakhs as inprevious year. After adding the surplus brought forward from previous year of Rs. 1024.79lakhs Rs. 1160.43 lakhs is carried to the Balance Sheet as surplus in Statement of Profit& Loss.
EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS :
The Company has also entered into Power generation and Agro Products business. Howeverthe commercial operations have not yet commenced.
CHANGE IN THE NATURE OF BUSINESS IF ANY :
There has been no material change in the nature of business during the financial yearunder review.
Your Directors are pleased to recommend dividend of Rs. 2/- per equity share of Rs.10/- each (previous year Rs. 1.70/- per share) for financial year ended 31stMarch 2016. The dividend on Equity Shares is subject to the approval of the shareholdersat the Annual General Meeting. The total cash outflow on account of dividend paymentincluding distribution tax will be Rs. 138.59 lakhs.
DIRECTORS AND KEY MANAGERIAL PERSONNEL :
The Board of Directors at present has six members Mrs. Jayashree Nair is theChairperson and Managing Director of the Company. She was appointed as Managing Directorof the Company for a period of three years with effect from 1st April 2014 asapproved by the members at the 23rd Annual General meeting. Mr. S. C. Kachharais the Executive Director and Chief Financial Officer of the Company. He was appointed asExecutive Director for a period of three years with effect from 1st April 2014as approved by the members at the 23rd Annual General Meeting. In the interestof the Company the Board has recommended to the members at 26th Annual GeneralMeeting the re-appointment of Mrs. Jayashree Nair as Managing Director and Mr. S. C.Kachhara as Joint Managing Director for a further period of three years with effect from 1stApril 2017.
There are three independent directors on the Board of the Company Mr. A. V. Menon Dr.Dinesh Variar and Mr. Bhagirath Singh Sihag. There is one Non-Executive Director on theBoard of the Company Mrs. Karthika Nair who retires by rotation at the forthcomingAnnual General Meeting being eligible and offer herself for re-appointment. Accordinglythe Board recommends her re-appointment.
Mrs. Jayashree Nair Managing Director Mr. S. C. Kachhara Executive Director andChief Financial Officer and Ms. Nikita Phatak Company Secretary of the Company are theKey Managerial Personnel of the Company.
DECLARATION BY INDEPENDENT DIRECTORS :
The Independent Directors of the Company Mr. A. V. Menon Dr. Dinesh Variar andMr. Bhagirath Singh Sihag have submitted declaration complying with the criteria ofindependence as provided in Section 149(6) of the Companies Act 2013.
DIRECTORS RESPONSIBILITY STATEMENT :
Pursuant to Section 134(5) of the Companies Act 2013 the Directors state that :-
(a) In the preparation of the annual accounts the applicable accounting standards havebeen followed alongwith proper explanation relating to material departures;.
(b) The Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2016 and ofthe Profit of the Company for the year ended 31st March 2016;
(c) The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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 theCompany and that such internal financial controls are adequate and were operatingeffectively; and
(f) The Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
CORPORATE GOVERNANCE :
As per the listing agreement with the stock exchange the Company has complied with therequirements of Corporate Governance. A report on Corporate Governance together with acertificate from Statutory Auditor forms part of this report. A declaration from ManagingDirector under Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is also attached to this report.
LISTING WITH STOCK EXCHANGE :
The equity shares of the Company are listed on BSE Limited. The listing fee for year2016-2017 has been paid by the Company.
RISK MANAGEMENT POLICY :
The Company has adopted a Risk Management Policy to identify and categorize variousrisks implement measures to minimize impact of these risks and a process to monitor themon regular basis.
RELATED PARTY TRANSACTIONS :
There were no materially significant related party transactions during the year thathave potential conflict with the interests of the Company. The transactions with relatedparties are disclosed in the notes to the financial statements. Form AOC-2 prescribedunder the Companies Act 2013 and Companies (Accounts) Rules 2014 is furnished asAnnexure V to this report.
VIGIL MECHANISM :
In compliance with the Regulation 22 of SEBI (Listing Oblgations and DisclosureRequirements) Regulations 2015 the Company has established a Vigil Mechanism forDirectors and employees to report their genuine concerns or grievances. The Whistle BlowerPolicy is adopted which provides safeguards against victimization of the Whistle BlowerPolicy. The employees of the Company are free to report any concerns of unethicalbehavior suspected fraud or violation of laws to the Audit Committee under this policy.The Whistle Blower Policy is also hosted on the website of the Company.
FORMAL ANNUAL EVALUATION :
As required under the Schedule IV of the Companies Act 2013 and Clause 49(II) (B)(6)of the Listing Agreement the Independent Directors at their separate meeting held on 13thNovember 2015 evaluated the performance of the non-independent directors and the Board asa whole. They also reviewed the performance of the Chairperson of the Company taking intoaccount the views of the Executive Director and also assessed the quality quantity andtimeliness of flow of information between the company management and the board that wasnecessary for the Board to effectively and reasonable perform their duties.
The Board assessed the performance of the independent directors as per the criterialaid down and have recommended their continuation on the Board. The Board of Directorsassessed the performance of individual directors on the Board based on parameters such asrelevant experience and skills focus on shareholder value creation governance standardsknowledge of business processes and procedures followed integrity relationship withManagement impact on key management decisions etc.
INTERNAL FINANCIAL CONTROLS :
The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weakness in the design or operation were observed.
FIXED DEPOSIT :
The Company has not invited / accepted any deposits during the year under review asenvisaged under sections 73 74 and 76 of the Companies Act 2013.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS :
The Company has not made any loans to any third party as envisaged under section 186 ofthe Companies Act 2013. The Company has not given any guarantee other than bank guaranteein the normal course of business to meet the contractual obligations. The Board ofDirectors have authorized the Company to invest the surplus in deposits with Banks.
SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS :
During the year under review there have been no significant and material orders passedby any regulators / courts / tribunals that could impact the going concern status and theCompanys operations in future.
CONSERVATION OF ENERGY AND TECHNOLOGY UPGRADATION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO :
Pursuant to Section 134(3)(m) of the Companies Act 2013 read with Rule 8 of theCompanies (Accounts) Rules 2014 particulars of energy conservation technology absorptionand foreign exchange earnings and outgo are appended hereto as Annexure IV and forms partof the Annual Report.
The properties and assets of your Company are adequately insured.
INDUSTRIAL RELATIONS :
The Company has maintained cordial and harmonious relations with all its employees.
ENVIRONMENT HEALTH & SAFETY :
The Company is committed to environment protection and industrial safety. Ourmanufacturing facility is accredited with WHO-GMP and complies with applicable environmentregulations. Our manufacturing facility has achieved ISO 9001:2008 certification from SGSUnited Kingdom Limited. The Company conducts medical check-up programs first aid sessionsand fire safety sessions for employees.
EXTRACT OF ANNUAL RETURN :
The Extract of Annual Return of the Company as on 31st March 2016 isattached herewith as Anexure I to this report.
AUDITORS AND AUDITORS REPORT :
STATUTORY AUDIT :
M/s. L. J. Kothari & Co. Chartered Accountants retire at the ensuing AnnualGeneral Meeting and being eligible offer themselves for re-appointment. Your Directorsrecommend their re-appointment. The Auditors Report read with the notes to accounts areself-explanatory.
SECRETARIAL AUDIT :
Pursuant to the provisions of section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Mangerial
Personnel) Rules 2014 the Company has appointed M/s J. H. Ranade & Associates afirm of Company Secretary in practice to conduct secretarial audit of the Company. TheSecretarial Audit Report is annexed herewith to the Directors Report in Annexure II.
RATIO OF REMUNERATION :
As required under Section 197(12) of the Companies Act 2013 read with Companies(Appointment and Remuneration of Managerial Personnal) Rules 2014 the required detailsare given below :
|a. Directors ||Ratio to median Remuneration |
|Mrs. Jayashree Nair ||25:1 |
|Mr. S. C. Kachhara ||25:1 |
|Mr. A. V. Menon ||0.19:1 |
|Dr. Dinesh Variar ||0.15:1 |
|Mr. Bhagirath Singh Sihag ||0.19:1 |
|Mrs. Karthika Nair ||0.19:1 |
b. The percentage increase in remuneration of Mrs. Jayashree Nair Managing Director is12% Mr. S. C. Kachhara Executive Director and Chief Financial officer is 12% (asapproved by members in 23rd Annual General Meeting) and Ms. Nikita PhatakCompany Secretary is 8%.
c. The median remuneration of employees increased by 8% in the financial year.
d. There are 143 permanent employees on the rolls of the Company.
e. The Companys PAT increased from Rs. 256.97 lakhs to Rs. 322.62 lakhs anincrease of 12% against which the average increase in remuneration is 8% and this increaseis aligned with the Companys Remuneration Policy.
f. The aggregate remuneration of key managerial personnel (KMP) is Rs. 108.38 lakhsrevenue of the Company during the year is Rs. 4672.81 lakhs and the remuneration of KMP is2.32% of revenue.
g. The market capitalization of the Company as on 31st March 2016 was Rs.47.79 crores and as on 31st March 2015 was Rs. 29.91 crores. The PE ratio ofthe Company as on 31st March 2016 was 14.82 and as on 31st March2015 was 11.65. The Company made public offer of equity shares (of face value Rs. 10/-each share) at premium (of Rs. 30/- each share) in the year 1995.
h. The average percentile increase in salaries of employees other than managerialpersonnel is 8% and increase in managerial remuneration is 12% as approved by members atthe 23rd Annual General Meeting.
i. There is no variable component linked to various parameters financial andnon-financial in the remuneration availed by the directors.
j. During the year there was no employee who is not a director of the Company andreceived remuneration in excess of the highest paid directors.
k. We affirm that the remuneration paid is as per Remuneration Policy of the Company.
The Company has constituted an internal complaints committee under the SexualHarassment of Women at workplace (preventionprohibition and redressal) Act 2013 forprevention and redressal of complaints of sexual harassment at workplace. Your Directorsfurther state that during the year under review there was no complaints filed pursuant tosaid Act.
Your Directors thank statutory authorities and bankers for co-operation extended bythem to the Company. Your Directors place on record their sincere appreciation of thecontinued support by the employees and finally thank the shareholders for the trust placedby them with the Company.
| ||FOR AND ON BEHALF OF THE BOARD |
|Place : Mumbai ||Jayashree Nair |
|Date : 27th May 2016 ||Chairperson & Managing Director |