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Beardsell Ltd.

BSE: 539447 Sector: Industrials
NSE: BEARDSELL ISIN Code: INE520H01022
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OPEN 52.15
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VOLUME 1
52-Week high 92.75
52-Week low 46.20
P/E
Mkt Cap.(Rs cr) 147
Buy Price 52.30
Buy Qty 10.00
Sell Price 55.95
Sell Qty 50.00
OPEN 52.15
CLOSE 56.95
VOLUME 1
52-Week high 92.75
52-Week low 46.20
P/E
Mkt Cap.(Rs cr) 147
Buy Price 52.30
Buy Qty 10.00
Sell Price 55.95
Sell Qty 50.00

Beardsell Ltd. (BEARDSELL) - Director Report

Company director report

REPORT OF BOARD OF DIRECTORS

Your Directors present the 80th Annual Report of the Company together with the AuditedAccounts for the Financial Year ended 31.03.2017.

PERFORMANCE / OPERATIONS

FINANCIAL RESULTS

( Rs. In Lakhs)

Year Ended Year Ended
31.03.2017 31.03.2016
Gross Revenue 16914.29 15122.88
Profit before interest & Depreciation 1861.50 1355.94
Finance Cost 444.07 520.26
Profit before Depreciation 1417.22 835.68
Depreciation 337.12 322.33
Profit / ( LOSS) before tax 1080.31 513.55
Profit / (LOSS) after taxation 659.61 328.53
Surplus in Statement of Profit & Loss Account
from Last Year 1911.97 1651.08
Appropriations
Interim Dividend paid on Equity Shares 70.25 56.20
Tax on Dividend 14.30 11.44
Surplus carried to Balance Sheet 2487.03 1911.97

DIVIDEND:

The Board of Directors wishes to inform the shareholders that Interim Dividend at therate of Re.1.50 (15 percent) per share was paid as Dividend for the year ended 31st March2017 to those share holders whose name appeared in the Register of Members on 23rd March2017. The above payment shall be considered as final dividend and no fresh dividend isrecommended by the Board.

Consolidated Financial Statements

In accordance with the Accounting Standard (AS)-21 on Consolidated FinancialStatements the audited consolidated financial statement is provided in the Annual Report.

REVIEW OF OPERATIONS A) PACKAGING PRODUCTS

EPS division has performed well over the last year both in terms of production as wellas gross margins. Results would have been better had the prices been stable. During thesecond half of the year raw material prices continuously increased which could not bepassed on to the customers. New customers were added which added to the volume and values.

B) PREFABRICATED PANEL PRODUCTS

Isobuild and Quikbuild divisions performed extremely well in terms of volume and alsomargins. We were able to execute both private and Govt sector orders.

Quikbuild is poised for exponential growth in the years ahead due to approval byBMTPC / CPWD / New Delhi Municipal Corporation. This technology is approved for PradhanMantri Awaz Yojna (PMAY) scheme by the Central Government - Housing for all.

C) CONTRACTS & EXPORTS

Our contracting division continues to execute insulation contracts for major publicsector companies. We are striving to increase revenues in this segment by marketing acrossregions. The exports division faced stiff competition in global tenders. Efforts are on toimprove this division.

CHANGE IN THE NATURE OF BUSINESS IF ANY: There is no change in the nature of business.

Material changes and commitments if any affecting the financial position of theCompany which have occurred between the end of the financial year of the Company to whichthe Financial Statements relate and the date of the report: Nil

Details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future : Nil

Details in respect of adequacy of internal financial controls with reference to theFinancial Statements : Adequate internal financial controls are in place and they areworking effectively and efficiently.

Details of Associate Companies: Nil

DETAILS OF WHOLLY OWNED SUBSIDIARY

M/s. Sarovar Insulation Pvt Ltd a wholly owned Subsidiary of our Company with effectfrom 29/02/2016 is engaged in the manufacture and processing of EPS products at Coimbatoreand at SUPA Ahmednagar Maharashtra.

FIXED DEPOSITS

(a) Accepted During the year Rs. 8095000/-
(b) Remained Unpaid or unclaimed as at the end of the year Rs. 54000/-
(c) Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so number of such cases and the total amount involved There was no default in repayment of deposits or payment of interest thereon.
(d) At the beginning of the year NIL
Maximum during the year NIL
At the End of the year NIL
The details of deposits which are not in compliance with the requirements of Chapter V of the Act NIL

STATUTORY AUDITORS

Messrs. Deloitte Haskins & Sells (DHS) Chartered Accountants Chennai (ICAIRegistration Number of the firm is 008072S) Statutory Auditors of your Company hold officeup to the conclusion of eightieth Annual General Meeting. Section 139142 and otherapplicable provisions of the Companies Act 2013 read with the Companies ( Audit andAuditors ) Rules 2014 stipulates that no listed Company shall re-appoint an audit firm asstatutory auditors for more than two terms of Five consecutive years. M/s Deloitte Haskins& Sells (DHS) ( formerly known as Fraser and Ross have been the Statutory Auditors ofyour Company since inception and are therefore not eligible for reappointment.

Your Directors recommend the appointment of M/s.S.R.Batliboi & Associates LLPChartered Accountants Chennai as Statutory Auditors of the Company in accordance withthe provisions of section 139141 and other applicable provisions of the Companies Act2013 to hold office from the conclusion of 80th Annual General Meeting until conclusion ofthe 85th Annual General Meeting Subject to ratification by the members at every AnnualGeneral Meeting thereafter.

Your Directors place on record their grateful appreciation of the contribution made andservices rendered by Messrs. Deloitte Haskins & Sells (DHS) Chartered Accountants since the inception of the Company

INTERNAL AUDITORS

Mr .V. V Sridharan (Membership Number FCA 24801) is the Internal Auditor of ourCompany.

EXTRACT OF THE ANNUAL RETURN

The extract of the annual return in Form No.MGT-9 forms part of this Board's Report.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information Under Section 134 (3) (m) of the Companies Act 2013 read with Companies(Accounts) Rules 2014 and forming part of Directors Report for the year ended 31st March2017.

Research and Development Technology Absorption and Conservation of Energy

The main focus of the Company's Research and Development effort is on EnergyConservation process up gradation and environmental preservation.

Better utility of Resources to minimize cost & wastage. Continuous efforts are onto reduce wastage in use of Power and Fuel.

Foreign Exchange Earnings And Outgo

During the year under review Foreign Exchange Earnings amounted to Rs.121.75 Lakhs asagainst Rs.1155.29 Lakhs during previous year.

The total Foreign Exchange Outgo during the year under review was Rs.503.39 Lakhs asagainst Rs.1102.74 Lakhs during previous year.

DIRECTORS

DEMISE OF DIRECTOR

With deep regret the Board noted the sudden demise of Mr.V.Thirumal Rao on 13th July2016. The Directors and staff at all levels places on record the contribution made byMr.V.Thirumal Rao during his tenure as a director.

RESIGNATION OF DIRECTOR

On account of health grounds Mr. M Uttam Reddi resigned from the Board on 20th October2016. The Directors and staff at all levels places on record the contribution made by Mr.MUttam Reddi during his tenure as a director.

RETIREMENT OF EXECUTIVE DIRECTOR

On account of health grounds Mr S V Narasimha Rao Executive Director retired on 8thMay 2017. The Directors and staff at all levels places on record the contribution made byMr. S V Narasimha Rao during his tenure as Executive Director.

APPOINTMENT AND RE-APPOINTMENT OF DIRECTORS

Mr Amrith Anumolu retires by rotation at this Annual General Meeting and beingeligible offers himself for reappointment.

DECLARATION BY INDEPENDENT DIRECTORS:

The declaration by Independent Directors has been placed in our web sitewww.beardsell.co.in

FORMAL ANNUAL EVALUATION:

The Board members and the Committee members performed their functions as required bythe Companies Act 2013 and as per the regulatory framework of Securities and ExchangeBoard of India. The Company has received the annual evaluation report from the Directors.The Board of Directors individually and as a whole has been formally evaluated by theIndependent Directors at their meeting held on 15th March 2017.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS:

During the financial year 2016-17 Six Board Meetings were held on 27/05/201611/08/2016 11/11/2016 11/02/2017 13/03/2017 and 15/03/2017.

AUDIT COMMITTEE:

During the financial year 2016-17 Six Audit Committee Meetings were held on 25/05/201611/08/2016 09/11/2016 11/02/2017 13/03/2017 and 15/03/2017.

Composition and Attendance record of the members of the Committee is as under:

S.No Member Designation No. of meetings attended
1 Mr. M. Uttam Reddi * Independent 1
2 Mr. V. Thirumal Rao ** Non-Executive 1
3 Mr. R. Gowri Shanker Independent 5
4 Mr. V.J. Singh Independent 6
5 Mr. S.V. Narasimha Rao Executive Director 6

* Resigned on 20/10/2016 ** Expired on 13/07/2016

VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES

The Company has established a vigil mechanism for directors and employees to reportgenuine concerns and the same is hosted in our website www.beardsell.co.in.

NOMINATION AND REMUNERATION COMMITTEE

During the financial year 2016-17 one Committee meeting was held on 15/03/2017.

S.No Member Designation No. of meetings attended
1 Mr. R. Gowri Shanker Independent 1
2 Mr. V.J. Singh Independent 1
3 Mrs. A. Jayasree Non-Executive -

CORPORATE SOCIAL RESPONSIBILITY REPORTING (CSR)

CSR Reporting forms part of this Report.

During the financial year 2016-17 one Committee meeting was held on 13/03/2017.

CSR COMMITTEE COMPRISES OF THE FOLLOWING DIRECTORS :

S.No Member Designation No. of meetings attended
1 Mr Bharat Anumolu Managing Director 1
2 Mr.Amrith Anumolu Executive Director 1
3 Mr.R.Gowri Shanker Independent Director 1

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

This particulars are annexed to this report.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT2013:

(i) Loans : Rs.1497.28 lacs
(ii) Guarantees : Nil
(iii) Investments : Rs.159.20 lacs

SECRETARIAL AUDIT REPORT:

A Secretarial Audit Report given by Lakshmmi Subramanian & Associates PracticingCompany Secretaries Chennai is annexed to this report.

AUDITORS' CERTIFICATE ON CORPORATE GOVERNANCE:

M/s Deloitte Haskins & Sells Chartered Accountants Chennai have given acertificate regarding compliance of conditions of Corporate Governance as stipulated inClause 49 of the Listing Agreement and the same is annexed to this report.

RISK MANAGEMENT POLICY:

The Company has developed and implemented a risk management policy includingidentification therein the elements of risk which in the opinion of the Board may threatenthe existence of the company.

COST AUDIT

Your company has appointed Mr M. Krishnaswamy Practicing Cost Accountant Chennai(FCMA No.5944) as Cost Auditor for the financial year 2016-17 with the consent of theCentral Government for the Audit of Cost Accounts maintained by the Company.

EMPLOYEE RELATIONS

The relations between the employees and management continued to be cordial during theyear.

DIRECTORS' RESPONSIBILITY STATEMENT:

As required by Sec. 134 (3) [c] of the Companies Act 2013 your Directors furtherreport that: I In preparation of the annual accounts applicable accounting standards havebeen followed along with proper explanation relating to material departures; II TheDirectors have selected accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as on 31st March 2017 and of the Profit of theCompany for financial year ended 31st March 2017; III The Directors have taken proper andsufficient care for the maintenance of adequate accounting records in accordance with theprovisions of this act for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; IV The Directors have prepared the AnnualAccounts on a going concern basis.

V The directors had laid down internal financial controls to be followed by the companyand that such internal financial controls are adequate and were operating effectively.

VI The directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

REMUNERATION POLICY OF THE COMPANY

The remuneration policy of the Company comprising the appointment and remuneration ofthe Directors Key Managerial Personnel and Senior Executives of the Company includingcriteria for determining qualifications positive attributes independence of a Directorand other related matters has been hosted in our website www.beardsell.co.in.

CORPORATE GOVERNANCE

Your Directors report that your Company has been fully compliant with the SEBI ICDRRegulations on Corporate Governance which have been incorporated in Clause 49 of theListing Agreement. A detailed report on this forms part of Annexure.

ACKNOWLEDGEMENT

Your Directors gratefully acknowledge the continued support received from the BankersPrincipals/Suppliers Customers and Employees.

For and on behalf of the Board
Bharat Anumolu
Managing Director
Chennai V.J. Singh
July 22 2017 Director

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

Form No. AOC-2: (Pursuant to clause (h) of sub-section (3) of section 134 of theCompanies Act 2013 and Rule 8(2) of the Companies (Accounts) Rules 2014).

Form for disclosure of particulars of contracts / arrangements entered into by thecompany with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 including certain arm's length transactions under third provisothereto:

Details of contracts or arrangements or transactions not at arm's length basis : NIL
Details of material contracts or arrangements or transactions at arm's length basis :
1. Name of the related party and nature of relationship : Sarovar Insulation Pvt Ltd
(i) Nature of contracts/arrangements/transactions : Processor and seller of EPS Products and
Purchaser of EPS Resins
(ii) Duration of contracts/arrangements/transactions : Ongoing
(iii) Salient terms of contract including value : Processing charges : Rs.24.04 lacs;
Sale of EPS Products : Rs.856.29 lacs;
Purchase of EPS Resins : Rs.50.30 lacs
(iv) Date of approval by Board if any : 27th May 2016
(v) Amount paid as advances if any : Nil
2. Name of the related party and nature of relationship : Gunnam Subbarao Insulation Pvt Ltd
(i) Nature of contracts / arrangements / transactions: Processor buyer and seller of EPS & Quikbuild products
(ii) Duration of contracts/arrangements/transactions : Ongoing
(iii) Salient terms of contract including value : Processing charges : Rs. 230.60 lacs
Sales of Isobuild products : Rs. 570.02 lacs;
Purchase of Isobuild products : Rs. 454.71 lacs
(iv) Date of approval by Board if any : 27th May 2016
(v) Amount paid as advances if any : Nil

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:

BOARD'S REPORT FOR THE YEAR ENDED 31/03/2017 PARTICULARS OF EMPLOYEES:

(A) Information as per Section 197 (12) read with Rule 5 (1) of The Companies(Appointment & Remuneration of Managerial Personnel) Rules 2014: (i) The ratio ofRemuneration of each Director to the median remuneration of the employees of the Companyfor the financial year:

Name of the Director Ratio
Mr. Bharat Anumolu 10.31
Mr. S.V. Narasimha Rao 6.30
Mr. Amrith Anumolu 10.31
Mr. Uttam Reddi (*)
Mr. V. Thirumal Rao (*)
Mr. R. Gowri Shanker (*)
Mr. V.J. Singh (*)
Mrs. Jayasree Anumolu (*)

The median remuneration of the employees of the company during the Financial Year2016-17 was Rs.349165/-(*) The sitting fees received by the non-executive IndependentDirectors was less than the median remuneration of employee and hence the ratio is notprovided.

(ii) The percentage increase in remuneration of each Director Chief Financial Officerand Company Secretary in the financial year:

Name of the Director Designation % of increase in Remuneration
Mr. Bharat Anumolu Managing Director -
Mr. S.V. Narasimha Rao Executive Director -
Mr. Amrith Anumolu Executive Director -
Mr. M.Uttam Reddi Independent Director (#)
Mr. V.Thirumal Rao Non-Executive Director (#)
Mr. R.Gowri Shanker Independent Director (#)
Mr. V.J.Singh Non-Executive Director (#)
Mrs. Jayasree Anumolu Independent Director (#)
Mr. Y.Mukthar Basha Chief Financial Officer 40.16
Mr. K.Murali Company Secretary 12.37

(#) The remuneration to non-executive Independent Directors comprises of sitting feesfor attending the Board / Committee meetings. The actual payment of sitting fee is basedon the number of meetings attended by the Directors. In view of the aforesaid facts thecalculation of percentage increase in remuneration would not be meaningful and hence notprovided.

The percentage increase in the remuneration of Chief Financial Officer and CompanySecretary in the financial year: 29.00 %

(iii) The percentage increase in the median remuneration of employees in the financialyear: 11.85 %

(iv) The number of permanent employees on the rolls of the company: 253

(v) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration: NIL.

(vi) Affirmation that the remuneration is as per the remuneration policy of thecompany: The Company affirms that the remuneration is as per the Remuneration Policy ofthe Company.

(B) Information as per section 197 (12) read with Rule 5 (2) and 5(3) of The Companies(Appointment & Remuneration of Managerial Personnel) Rules 2014: (i) None of theemployee was in receipt of remuneration for the financial year 2016-17 which inaggregate was not less than sixty lakh rupees; and (ii) None of the employee who wasemployed for a part of the financial year 2016-17 was in receipt of remuneration for anypart of the financial year 2016-17 at a rate which in the aggregate was not less thanfive lakh rupees per month.