Your Directors have pleasure in presenting the 35thAnnual Report of Bhagwandas MetalsLimited along with the audited financial statements for the year ended March 312017.
| || ||(Rs.) ||(Rs.) |
| || ||2016-2017 ||2015-2016 |
|S.NO ||PARTICULARS ||Audited financial Statement for the year ended 31.03.2017 ||Audited financial Statement for the year ended 31.03.2016 |
|1 ||Sales ||279165438 ||220932531 |
|2 ||Profit before interest Depreciation Extraordinary items and Tax ||4300134 ||2783752 |
|3 ||Interest ||2008539 ||1222783 |
|4 ||Depreciation ||133721 ||215639 |
|5 ||Profit before Extraordinary items and Tax ||2157874 ||1345330 |
|6 ||-Provision for taxation'& Deferred Tax ||668000 ||416000 |
|7 ||Profit after Extraordinary item and Tax ||1489874 ||929330 |
PERFORMANCE AND STATE OF AFFAIRS OF THE COMPANY.
During the year2016-2017 the Company has earned a net profit after tax of Rs. 14.90lakhs as against Rs.9.29 lakhs earned in the previous year. On the sales front theCompany has achieved a turnover of about Rs.2792 lakhs during the year 2016-2017 asagainst Rs.2209 lakhs achieved in 2015-2016.
During the year 2016-17 the prices of Steel products was less compared to the previousyear and the demand for the steel products was very less during the year 2016-17 ascompared to the previous year in Tamilnadu/Chennai where the company mainly operates. Thereal estate sector and the infrastructure sector in Chennai was very dull during thefinancial year 2016-17 which led to severe reduction in turnover during the year comparedto the previous year. Further the Company had to be very selective in extending creditterms as the realisibility itself is doubtful because of tight money situation in theconstruction sector.
During the year under review there is no change in the nature of activity of thecompany.
In order to conserve resources the board of directors have decide not to declare anydividend forthe current financial year 2016-17
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:
No amount has been transferred to the Investor Education and Protection Fund fortheyear under review.
TRANSFER OF PROFIT TO RESERVES
Your company has not proposed to transfer the profits to reserves and surplus accountduring the financial year 2016-17.
MATERIAL CHANGE AND COMMITMENTS OF THE COMPANY
There are no material changes and commitments 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; and there are no significantand material orders passed by the regulators or courts or tribunals impacting the goingconcern status and company's operations in future.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
There have been no loan guarantees and investment given or made by the Company underSection 186 of the Act during the financial year 2016-2017.
SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES
The company doesn't have any subsidiaries associates and joint venture companies.
TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information as required to be disclosed on conservation of energy technologyabsorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) ofthe Companies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 isannexed herewith as "Annexure I" to this Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In terms of Section 152 of the Companies Act 2013 Mrs.Gita Agarwal who retires byrotation at the forthcoming AGM and is eligible for re-appointment. Mrs.Gita Agarwaloffered herself for re-appointment. Brief profile is mentioned in the Notice offorthcoming Annual General Meeting of the company.
KEY MANAGERIAL PERSONNEL:
The Company is in the process of finding a suitable KMPforthe Post of Company secretary& chief financial officer.
INDEPENDENT DIRECTORS' DECLARATION
All Independent Directors have given declarations that they meet the criteria ofIndependence as laid down under Section 149 of the Companies Act 2013 which has beenrelied on by the Company and placed at the Board Meeting of the Company.
DISCLOSURE WITH RESPECT TO DEMAT SUSPENSE ACCOUNT/ UNCLAIMED SUSPENSEACCOUNT
The Company is not required to give a disclosure with respect to demat suspenseaccount/ unclaimed suspense account.
The companies act 2013 ('the act') was notified effective april 12014. section 139 ofthe act lays down the criteria for appointment and mandatory rotation of statutoryauditors. Pursuant to section 139 of the act and rules made thereunder it is mandatory torotate the statutory auditors on completion of two terms of five consecutive years. Therules also lay down the transitional period that can be served by the existing auditorsdepending on the number of consecutive years for which an audit firm has been functioningas auditor in the same company. The incumbent auditors M/s RR More Chartered accountants(firm registration no. 002133S) have served the company for over 10 years before the actwas notified and will be completing the maximum number of transitional period (threeyears) at the ensuing 35 AGM. The audit committee of the company has proposed and on31/8/2017 the board has recommended the appointment of M/s. Heena Shah & Associates(Firm registration number; 144928W) as statutory auditors of the company for the approvalof members in the AGM.
COMMENT ON STATUTORY AUDITOR REPORT
There are no qualifications reservations remarks or disclaimers made byR.R.More&Co Statutory auditor in their auditor report .The statutory auditor havenot reported any incident of fraud to the Audit Committee of the Company during thefinancial year 2017-17.
SEC RETARIAL AU DITOR
Pursuant to the requirements of Section 204 (1) of the companies Act 2013 and Rule 9 ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed M/s. Lakshmmi Subramanian & Associates a firm of Company Secretariesin Practice to undertake Secretarial Audit of the Company for the financial year 2016-17.
The Secretarial Audit report as received from the secretarial auditor is annexed tothis report as Annexure II.
COMMENT ON SECRETARIAL AUDITOR REPORT
With reference to the remarks made by the secretarial auditor in the Secretarial AuditReport the company has taken the corrective measures during the current financial year.
INTERNAL CONTROL AND ITS ADEQUACY
Mr. A. Karikalan & Co. Chartered Accountant was appointed as internal auditors ofthe Company. They regularly conduct audit and submit their quarterly reports which arereviewed by the Audit Committee.The Company has an adequate Internal Control systemcommensurate with the size scale and complexity of its operations. To maintain itsobjectivity and independence the Internal Auditor reports to the Chairman of the AuditCommittee of the Board. During the year such controls were tested and no reportablematerial weaknesses in the design or operation were observed.
The particulars of contracts or arrangements with related parties referred to section188of the Companies Act2013 as prescribed in the form Aoc-2 is annexed as Annexure -111to this report.
EXTRACT OF ANNUAL RETURN
The details forming part of extract of Annual Return in form MGT -9 as provided underSub Section (3) of the Section 92 of the Companies Act2013 (the "Act") isannexed herewith as Annexure -IV to this report.
The information required under Section 197(12) of the Companies Act 2013 read withrule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 in respect of employees of the Company forms part of this Report as Annexure V.
RISK MANAGEMENT POLICY
The risk management is overseen by the Audit committee of the company in a continuousbasis.Major risks if any identified by the business and functions are systematicallyaddressed through mitigating action on a continuous basis. The Risk Management policy isavailable in the Companywebsitewww.metal-bml.com
DISCLOSURE AS PER SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013
Presently the total numbers of employees are less than the statutory limit and hencethe company has not constituted a separate committee under the Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013.
However the company has zero tolerance for sexual harassment at workplace.
During the financial year 2016-17 the Company has not received any sexual harassmentcomplaints.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The following operating and financial review is intended to convey the management'sperspective on the financial condition and on the operating performance of the company asat the end of the Financial Year 2016-17. The Company's financial statements have beenprepared in compliance with the requirements of the Companies Act 2013 guidelines issuedby the Securities and Exchange Board of India (SEBI) and the Generally Accepted AccountingPrinciples (GAAP) in India.
GLOBAL STEEL INDUSTRY
Global economic activity improved in the second half of CY2016especially in advancedeconomies. Growth picked up in the US asfirms grew more confident about future demand.Thegrowth in the United Kingdom remainedrobust on the back of resilient spending. Japan'sperformance has also been on the upside with strong exports.
However the global economic growth at 3.1% on a y-o-y basis fellshort ofexpectations in CY2016.Although China's growth turned out to be better than expected onthe back of policy stimulus it was lower than CY2015. India fared better than the worldin terms of growth even though the demonetisation exercise temporarily threw a challenge.Brazil on the other hand remained mired in a deep recession.
STEEL INDUSTRY IN INDIA
India was the world's third-largest steel producer in 2016.The Indian steel sector hasbeen driven by domestic availability of raw materials such as iron ore and cost-effectivelabour. In FY2016 -17 India's crude steel production grew by 8.5% y-o-y to 97.4 milliontonnes.The Govt of India has centralized focus on ease of doing business. In thisendeavour it has done away with various complicacies in business and taking variousreforms like the biggest historical tax reform in Indirect Taxation. The GST would be gamechanger and promises a lot to the Indian economy. It is expected to boost Indian GDPgrowth by1.5-2 %.
During the year 2016-17 the prices of Steel products was less compared to the previousyear and the demand for the steel products was very less during the year 2016-17 ascompared to the previous year in Tamilanadu/Chennai where the company mainly operates. Thereal estate sector and the infrastructure sector in Chennai was very dull during the FY2016-17 which led to severe reduction in turnover during the year compared to the previousyear. Further the Company had to be very selective in extending credit terms as therealisibility itself is doubtful because of tight money situation in the constructionsector.
The Indian economy is most promising economy in today's global scenario and may see agrowth @ 7% to 8% in FY 2017-18.The Govt of India is targeting increase in employmentthrough development of these industrial segments indicates a positive development path.
RISKS CONCERNS OPPORTUNITIES AND THREATS
While the steel consumption growth in India has been relatively resilient slowingeconomic growth has meant a moderation in steel consumption growth rates. Despite thechallenging economic conditions increase in the cost of goods sold the Company isconfident of increasing the turnover and profitability in the years to come
INTERNAL CONTROL SYSTEM AND ADEQUACY
The Company has in place adequate internal control systems and procedures commensuratewith the size and the nature of business. These procedures are designed to ensure.
i) That all assets and resources are used efficiently and are adequately protected.
ii) That all the internal policies and statutory guidelines are complied with.
iii) The accuracy and timing of financial reports and management information
DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
The turnover of the Company for the year was Rs.279165438 as against the previousyear's turnover of Rs.220932531. Similarly there has also been a decline in the profitearned from Rs.929330 in 2015-16 to Rs. 1489874 in 2016-17
Your Company considers its employees as one the key stakeholders. It has created aHuman Resources environment which fasters speed and agility in responding to the changingenvironment learning and innovation to survive and prosper and integrity in alloperation.
The Managing Director makes a declaration at each Board Meeting regarding thecompliance with provisions of various statutes after obtaining confirmation from all theunits of the company. The Company ensures compliance with the SEBI regulations andprovisions of the Listing Agreement. The Compliance Officer ensures compliance with theguidelines on the insidertradingforpreventionofinsidertrading.
Statements made in this report describing the Company's objectives projectionsestimates expectations may be "forward looking statements" within the meaningof applicable securities laws and regulations. Actual results could differ materially fromthis expressed or implied. Important factors that could make a difference to the Company'soperations include economic conditions affecting demand/supply and price conditions in thedomestic and overseas markets in which the Company operates changes in the Governmentregulations tax laws and other statutes and incidential factors.
DISCLOSURE OF ACCOUNTING TREATMENT:
During the preparation of the financial statements the treatment followed was as perthe Accounting Standards and no deviation took place.
DEPOSITS FROM PUBLIC
The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on date of the balancesheet.
CORPORATE GOVERNANCE REPORT
Since your company's paid up Equity capital and Networth is less than Rs.10 crores andRs.25 crores respectively the provisions of revised Clause 49 relating to CorporateGovernance vide SEBI circular number CIR/CFD/POLICY CELL/7/2014 dated 15th September2014. Hence is not applicable to the company.
NUMBEROF MEETINGS OF THE BOARD
In total 4(four) Meetings of the Board of Directors of the Company were held during theyear 2016-17held on 30th May 2016 IstAugust 201610th November 2016 and 4thFebruary2017. The maximum time gap between any two consecutive meetings did not exceed 120 days.
PERFORMANCE EVALUATION OF BOARD COMMITTEE AND DIRECTORS
Pursuant to the provisions of the Companies Act 2013 the Board has carried out anannual performance evaluation of its own performance the directors individually as wellas the evaluation of the working of the Audit and Nomination & Remuneration Committeesand the same was based on questionnaire and feedback from all the Directors on the Boardas a whole Committees and self-evaluation.A structured questionnaire was prepared aftertaking into consideration of the inputs received from the Directors covering variousaspects of the Board's functioning such as adequacy of the composition of the Board andits Committees Board culture execution and performance of specific duties obligationsand governance. A separate exercise was carried out to evaluate the performance ofindividual Directors including the Chairman of the Board who were evaluated on parameterssuch as level of engagement and contribution independence of judgement safeguarding theinterests of the Company and its minority shareholders etc.
The performance evaluation of the Independent Directors was carried out by the entireBoard. The performance evaluation of the Chairman of the Board and the Executive Directorswas carried out by the Independent Directors.
CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT
The Board of Directors had adopted a Code of Conduct for the Board Members andemployees of the company. This Code helps the Company to maintain the Standard of BusinessEthics and ensure compliance with the legal requirements of the Company.
The Code is aimed at preventing any wrong doing and promoting ethical conduct at theBoard and employees. The Compliance Officer is responsible to ensure adherence to the Codeby all concerned.
The Code lays down the standard of conduct which is expected to be followed by theDirectors and the designated employees in their business dealings and in particular onmatters relating to integrity in the work place in business practices and in dealing withstakeholders.
All the Board Members and the Senior Management personnel have confirmed compliancewith the Code.
The policy is available in the Company website www.metal-bml.com
WHISTLE BLOWER POLICY/VIGIL MECHANISM
The company has framed a whistle blower policy. Further Directors and employees arehaving full access to the audit committee to report their genuine and serious concern ifthey observe any. The policy is available in the Companywebsitewww.metal-bml.com
POLICY OF DIRECTORS'APPOINTMENT AND REMUNARATION
Directors' appointment and remuneration including criteria for determiningqualifications positive attributes independence of a director and other matters providedunder section 178 of the Act are covered under the Board's policy formulated by theCompany and is available on the Company website www.metal-bml.com
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your company is not mandatorily required to constitute CSR committee since it has notcome within the purview of threshold limit specified in section 135 of the Companies Act2013.
Pursuant to the requirement of Section 134(5) of the Act the Directors hereby confirm:
1. That in the Preparation of Final Accounts the applicable Accounting Standards hadbeen followed along with proper explanation relating to material departures:
2. That they had selected such Accounting Policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the Financial Year and of theProfitor Lossof the Companyforthat period;
3. That they had taken proper and sufficient care for the maintenance of adequateAccounting Records in accordance with the provisions of the Act for safeguarding theAssets of the Company and for preventing and detecting fraud and other irregularities;
4. That they had prepared the Annual Accounts on a Going Concern basis.
5. That they laid down internal financial controls to be followed by the company andthat such internal financial controls are adequate and operating properly; and
6. That they have devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
Your Directors wish to place on record their appreciation of the contributions made byemployees at all levels towards the continued growth and prosperity of your Company.Directors take this opportunity to convey their thanks to all the valued shareholders andthe valuable services rendered by the Officers and Staffs at all levels.
| ||For and on behalf of the Board |
| ||Chairman |
|Place: Chennai ||Govind Prasad |
|Date : 31.08.2017 ||DIN-00017460 |