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Bee Electronic Machines Ltd.

BSE: 517203 Sector: Engineering
NSE: N.A. ISIN Code: INE038E01014
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Bee Electronic Machines Ltd. (BEEELECTRONICS) - Director Report

Company director report

Dear members

The Directors of the company present the 35th Annual Report of your Company togetherwith the Audited financial statements and the Auditors Report of your company for thefinancial year March 31st 2017. The summarized financial results for the yearended March 31st 2017 are as under:-

1. Financial Results –

PARTICULARS For the Financial year ended March 31st 2017 For the Financial year ended March 31st 2016
Amt. in Lakhs Amt. in Lakhs
Sales & Other Income 23.43 11.81
Gross Profit/ (Loss) 6.07 (3.40)
Depreciation (3.21) (3.21)
Interest (1.44) (1.44)
Profit / (Loss) before exceptional items 1.42 (8.05)
Exceptional item: Secured lenders balance written back 0 389.34
Profit/ (Loss) before Tax 1.42 381.29
Tax 0 0
Profit/ (Loss) after Tax 1.42 381.29

2. Review of Operations –

The Company has achieved a turnover (Sales and other income) of Rs.23.43 Lakhs againstRs.11.81 Lakhs reported last year and there was a Gross Profit of Rs.6.07 Lakhs ascompared to Gross Loss of Rs.3.40 lakhs reported last year.

The Hon'ble BIFR had directed the Asset Sale Committee (ASC) to sell the surplus assetsof the Company at Tarapur and Daman. The sales proceeds were to be used to settle thestatutory dues along with the dues of the Bankers and UTI. Accordingly the ASC confirmedthe Sale of the Company's properties at Tarapur and Daman in favor of M/s. Mount OverseasPrivate Limited Mumbai who directly deposited a sum of Rs.270 lacs with the OperatingAgency for the purchase of the same. The Company was directed to prepare and submit theDraft Rehabilitation Scheme to the Operating Agency.

The Operating Agency submited its report to the Hon'ble BIFR vide their letter No.CMW/OAD/180/JPV/2013 of date March 27th 2013 who directed the Operating Agency thereafterto retain this amount of Rs. 270 lacs in a No Lien deposit account (Short term for 91days) to be automatically renewed till further instructions and the same to be a part ofDraft Rehabilitation Scheme.

In the interim period the secured lenders were not willing to wait for the DraftRehabilitation Scheme to be formulated circulated and approved as a consensus wasdifficult to be had within the Consortium and UTI. Based on directions from Hon'ble BIFRto settle the secured creditors of the Company the Company entered into dialogue withthem for a One-time Settlement. After much follow up they individually agreed on thecondition of upfront payment.

The Company's finances did not permit this and so a bridge finance was arranged fromM/s. Sai Ram Investments of Rs. 128 lacs. Unable to commit to payment of interest on apercentage basis given the already existing financial burden it was agreed that theamount would be repaid to M/s. Sai Ram Investments from the sales proceeds together with50% interest that would have accrued on the amount kept in the No Lien Account with theOperating Agency. It was agreed between the Company and M/s. Sai Ram Investments that thebridge finance repayment would not exceed beyond 42 months from the date of firstdisbursal.

As the amount still rests with the Operating Agency and the date of release uncertainthe figure of interest is presently not determinable. Therefore no provision for interesthas been made either as receivable from Operating Agency or payable from the same to M/s.Sai Ram Investments. The necessary adjustments of interest receipt and interest paymentwould be made in the Books on actual realization.

While drafting the Draft Rehabilitation Scheme as per norms the promoters wererequired to bring in 25% of the Rehabilitation costs proposed. The Promoters have advancedto the Company Rs.85 lacs till date of reporting. In absence of the Draft RehabilitationScheme being circulated and approved the Company has received a representation from thePromoters for release of the said amount and seeking payment of interest (equivalent tothat of a savings bank account) on the amount advanced to the Company from the currentfinancial year onwards.

M/s. Sai Ram Investments have also been actively pursuing the Company for repayment ofthe bridge finance taken. The Company has requested the Operating Agency to release theamount kept in No Lien Account on behalf of the Company. However in absence of furtherinstructions from appropriate authority the Operating Agency is unable to act in thematter.

On the operations front the Directors continue to look for business streams that canaugment the business volume of the company. The company's plants are presently nonoperational due to various constraints.

3. Dividend –

The Directors taking into consideration the present financial position of the companydo not recommend any dividend for the year ended March 31st 2017.

4. Deposits –

Details related to Deposits:

A) Accepted during the year: NIL

B) Remained unpaid or unclaimed as at the end of the year: NIL

C) Default in repayment of deposits or payment of interest thereon during the year: notapplicable

D) Deposits not in compliance with the provisions of the Companies Act 2013: NIL

5. Listing –

The Company's equity shares are listed on the Mumbai Stock Exchange. The Company haspaid the annual listing fees of Mumbai Stock Exchange upto the year 2014. Presentlytrading in the securities of the Company has been suspended by the Stock Exchange.

6. Directors –

Ms. Abhilasha Krishna Kumar Bhargava (DIN 00940237) Director retires by rotation atthe end of the ensuing Annual General meeting and being eligible offers herself forre-appointment.

Furthermore the term of office of Ms. Abhilasha Krishna Kumar Bhargava (DIN 00940237)Whole time Director ends on September 30th 2017 and the Board recommends herre-appointment as the Whole time Director for a further period of 5 (five) years at theremuneration recommended in the Notice of the meeting and the Board accordingly seeksapproval of the members for her re-appointment and remuneration as the Whole timeDirector.

The Company's Board comprises of five Directors of which two Directors hold anExecutive position and the other three Directors are Independent Non-executive Directors.

A) Composition of the Board:

NAME OF THE DIRECTOR STATUS
Mr. K. Sudeshkumar Acharya Executive Director
Ms. Abhilasha K Bhargava Executive Director
Mr. Venugopal R. Coontoor Non-Executive Director – Independent
Mr. Rajendra Kumar Shah Non-Executive Director – Independent
Ms. Karuna Kotiyan Shaikh Non-Executive Director – Independent

B) Board meetings:

The Board meetings of the Company are held at the registered office of the Company inMumbai. The Notice and Agenda of the meetings are sent 7 (seven) days in advance to theDirectors of the Company. The senior management team is invited to the Board meeting inorder to submit reports participate in discussions clarify on operations as mayberequired from time to time. The Board meets at the close of the quarter to review thequarterly performance and financial results of the Company amongst other matters.

C) Number of Board meetings conducted during the year:

There were 4 (four) Board meetings held during the financial year 2016-17. The Boardmet on the following dates - May 30th 2016; August 12th 2016; November 14th 2016 andFebruary 14th 2017.

D) Attendance of Directors at the Board meetings and the last AGM:

Name of the Director No. of Board meetings held No. of Board meetings attended Attendance at the last AGM No. of Directorships in other Boards No. of Committees (other than Bee Electronic Machines Limited) in which he/ she is a member
Ms. Karuna Shaikh 4 4 Present 0 0
Mr. K. Sudeshkumar Acharya 4 4 Present 0 0
Ms. Abhilasha Bhargava 4 4 Present 5 0
Mr. Venugopal R. Coontoor 4 4 Present 0 0
Mr. Rajendra Kumar C. Shah 4 4 Present 0 0

COMMITTEES OF THE BOARD

The Board has constituted committees comprising of non-executive and independentdirectors to focus on critical functions of the Company and also for the smooth andefficient business operations. The Committees meet at regular intervals for decidingvarious matters and providing directions and authorizations to the management for itsimplementation. The Board takes note of the material recommendations/ decisions of thecommittees and approves / deliberates and decides on them as needed.

The Board has accordingly constituted 3 (three) committees that comply with therequirements of the SEBI (LODR) Regulations 2015 as also the provisions of the CompaniesAct 2013.

A) Audit Committee:

The audit committee comprises of three members of which two are Independent Directors.The constitution of the Committee comprises of Ms. Karuna Kotiyan Shaikh (Chairperson)Mr. Venugopal Coontoor and Ms. Abhilasha Bhargava members.

The terms of reference to the Audit Committee cover the matter specified underRegulation 18 of the SEBI (LODR) Regulations 2015 and Section 177 of the Companies Act2013.

The Committee met 4 (four) times during the current year on May 30th 2016; August12th 2016; November 14th 2016 and February 14th 2017. All members were present at eachmeeting.

B) Nomination and Remuneration Committee:

The Nomination and Remuneration Committee comprises of 4 members of which 2 members arenon executive independent directors Ms. Karuna Kotiyan Shaikh (Chairperson) Mr. Rajendrakumar C. Shah Mr. K. Sudeshkumar Acharya and Ms. Abhilasha Bhargava. The terms ofreference to the Committee cover the matter specified under Regulation 19 of the SEBI(LODR) Regulations and Section 178 of the Companies Act 2013.

The Company met on one occasion i.e. on February 14th 2017 and all the members werepresent at the meeting.

Disclosure of Remuneration to Directors

Non-Executive Directors were not paid any remuneration. The Executive Directors werepaid remuneration during the year as disclosed in Note 16 of the Accounts.

C) Stakeholders Relationship Committee:

The Stakeholders Relationship Committee has been constituted specifically to look intothe redressal of the grievances of the security holders of the Company. The Committee hasbeen established under the Chairmanship of Ms. Karuna K. Shaikh with Mr. K. SudeshkumarAcharya and Ms. Abhilasha Bhargava as members. The Committee met four times during theyear. All the members of the Committee were present at the meetings.

There were no pending shareholders complaints/ grievances and transfer of shares as onMarch 31st 2017.

The Company has designated an email id of the Compliance Officer specifically to lookafter investor grievances and to solve them in a speedy manner.

The Board has appointed Mr. Umesh R. Phalorh Chief Financial officer as the ComplianceOfficer. Email id: investors@beeelectronic.com

DETAILS OF REMUNERATION TO DIRECTORS

The policy in respect of appointment and remuneration of KMP's and other employees inthe Company "The Remuneration Policy" is attached herewith as Annexure A and theinformation relating to the remuneration of Directors as required under Section 197 (12)of the Act is attached herewith as Annexure B.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary declaration from each independent director underSection 149 (7) of The Companies Act 2013 that he/ she meets the criteria of independencelaid down in Section 149 (6) of The Companies Act 2013.

VIGIL MECHANISM

The Company has established a Vigil Mechanism for enabling the Directors and Employeesto report genuine concerns. The Vigil Mechanism provides for (a) adequate safeguardsagainst victimization of persons who use the Vigil Mechanism; and (b) direct access to theChairperson of the Audit Committee of the Board of Directors of the Company in appropriateor exceptional cases. The Audit Committee of the Board has been entrusted with theresponsibility of overseeing the Vigil Mechanism.

BOARD EVALUATION

The Company has devised a policy for performance evaluation of Independent DirectorsBoard committees and other individual directors. The Nomination and Remunerationcommittee of the Board is entrusted with the responsibility in respect of the same. Thecommittee studies the practice prevalent in the industry and advises the Board withrespect to evaluation of the Board members. On the basis of the recommendations of theCommittees the Board carries an evaluation of its own performance and that of itscommittees and individual Directors.

7. Auditors Report –

The observations of the auditors in their report are self-explanatory and are dealtwith in the Notes to Account at appropriate places and therefore in the opinion of theDirectors do not call for further comments. The Management however continues to makeefforts to recover the doubtful loans and advances and hence no provisions have been made.

8. Auditors –

M/s. Shankarlal Jain & Associates Chartered Accountants having their office atPrincess Street Mumbai retire at the ensuing Annual General meeting. Having completedtheir tenure as mandated under the Companies Act 2013 they are now no longer eligible tocontinue as the Statutory Auditors of the Company. Therefore in the opinion of theDirectors M/ s. Bhatter & Paliwal Chartered Accountants having their office at 2ndFloor Room No. 212 Kimatrai Building 77-79 Maharishi Karve Road Marine Lines Mumbai400 002 be appointed as the Statutory Auditors of the Company. The Directors request themembers to appoint them and fix their remuneration.

9. Secretarial Auditors –

The Secretarial Audit report for the financial year 2016-17 issued by the SecretarialAuditor has been attached as Annexure C. The qualification made by the Auditor in herreport and the management's reply to the same is as follows:-

Sr. No. Auditors Remarks Managements reply
1 The Company has not appointed a Company Secretary Company is on the look-out for a suitable candidate.
Would fill the vacancy as soon as an able candidate is found.
2 The Company has not complied with the provisions of The Companies Act 2013 in respect to appointment of its CFO The Company would comply with the requirements shortly.

10. Particulars of employees –

The details of employees as per sub rule 2 and sub rule 3 of Rule 5 of the Companies(Appointment and Remuneration) Rules 2014 is attached herewith as Annexure D.

11. Extract of Annual Return –

The Extract of Annual Return in Form MGT-9 in accordance with the provisions of Section134 (3) (a) of The Companies Act 2013 is attached herewith as Annexure E.

12. Particulars of Loans Guarantees or Investments –

Particulars of Loans Guarantees given and Investments made during the year areprovided in the financial statements forming part of this Annual Report.

13. Related Party Transactions –

The Company has not entered into any transaction with related parties which requireddisclosure as per the provision of Section 134 (3)(h) of The Companies Act 2013.

14. Director's Responsibility Statement –

In compliance to the requirements of Section 134 (3) (c) of The Companies Act 2013your Directors confirm that:

a) The Company has followed the applicable accounting standards in the preparation ofthe Annual Accounts and there has been no material departure.

b) That the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the Profit and Loss of the Company for that period.

c) That the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities.

d) That the Directors have prepared the annual accounts on a going concern basis

e) That the Directors have laid down internal financial control which are adequate andare operating effectively;

f) That the Directors have devised proper systems to ensure compliance with provisionsof all applicable laws and that such systems are adequate and operating effectively.

15. Particulars of Energy Consumption Foreign exchange and outgo –

As required under Section 217 (1) (e) of the Companies Act 1956 read with Companies(Disclosure of Particulars in the Report of the Board of Directors) Rules 1988 therelevant information is as stated below:-

The Company's operations involve low energy consumption. Whenever possible energyconservation measures are being implemented. The Company is not involved in any researchand development activity presently. The foreign exchange earnings and outgo are nil.

16. Risk Management Policy –

Your Company recognizes that risk is an integral part of business and is committed tomanaging the risks in a proactive and efficient manner. Your Company periodically assessesrisks in the internal and external environment and takes all measures necessary toeffectively deal with incidences of risks.

17. Corporate Governance –

The Company's philosophy of corporate governance is aimed at assisting the topmanagement of the Company in efficient conduct of its business and in meeting itsobligation towards all stakeholders. The Company believes that ethical business conduct isthe foundation of efficient corporate governance.

The Management Discussion and Analysis forms a part of the Annual Report.

18. Details of subsidiary Joint Venture or Associate Company –

The Company does not have any subsidiary Joint venture or Associate Company.

19. Obligation Of Company Under The Sexual Harassment Of Women At Workplace(Prevention Prohibition And Redressal) Act 2013

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

20. Acknowledgements –

Your Directors place on record their gratitude to the continuing support of theshareholders and the business associates at all levels.

The employee relations continued to be cordial throughout the year. Your Directors wishto place on record their sincere appreciation to all employees for their commitment andcontinued contribution to the Company.

21. Disclaimer –

The Management Discussion and Analysis contained herein is based on the informationavailable to the Company and assumptions made based on experience with regard to domesticand global economy and also the final decisions of the pending litigation in variousCourts of Law on which the Company's performance is dependent. It may be materiallyinfluenced by changes in economy government policies final judgments in the legalforums environment and the like on which the Company may or may not have any controlwhich could impact the views perceived or expressed herein.

For and on behalf of the Board
Sd/- Sd/-
Date: 14-08-2017 Rajendra Kumar C Shah K. Sudesh kumar Acharya
Place: Mumbai Director Director