REPORT OF THE DIRECTORS TO THE MEMBERS
The Directors are pleased to present their 69th Annual Report on thebusiness and operations of the Company together with the Audited Accounts for thefinancial year ended March 31 2016.
GENERAL OUTLOOK OF INDUSTRY AND ECONOMY:
The demand outlook for our products remains muted across all business segments. Whilethere have been sporadic signs of revival these have failed to be sustainable in nature.Considering the prolonged and slow nature of underlying economic dynamics we continue tobuild in a flat growth scenario in our internal planning. Consistent with this wecontinue to focus on costs and margins along with internal capability building as we awaita more robust business environment.
During the year under review we have focused on maintaining margins in ahypercompetitive environment while balancing the capacity utilization and costs. Towardsthat objective we have tried to prioritize larger orders where possible. This alsoprovides us better visibility on internal production and dispatch cycles. While doing sowe have continuously enhanced our design capabilities and supply chain efficiencies. Thesewill help us when the business environment starts looking up.
| || ||(Rs. in Lakhs) |
| ||Year Ended March 31 2016 ||Year Ended March 31 2015 |
|Sales and Services (Gross) ||71381.14 ||66788.90 |
|Less: Excise Duty ||7429.82 ||5700.20 |
| ||63951.32 ||61088.70 |
|Other Income ||2092.70 ||1818.04 |
| ||66044.02 ||62906.74 |
|Profit/(Loss) before Interest & Financial Charges Depreciation Exceptional items and Tax ||3818.86 ||(253.75) |
|Less: Interest and Finance Charges ||2056.05 ||1995.05 |
|Less: Depreciation ||1027.44 ||1194.34 |
|Profit/(Loss) before Tax ||735.37 ||(3443.14) |
|Less: Provision for Taxation ||52.41 || |
|Profit/(Loss) for the year ||682.96 ||(3443.14) |
|Short/(Excess) provision of Tax for earlier years ||(36.23) ||(38.19) |
|Profit/(Loss) after Taxation ||719.19 ||(3404.95) |
|Add: Profit/(Loss) Brought Forward ||1498.57 ||5041.90 |
|Less: Depreciation adjustment || ||138.38 |
|Net Surplus available for ||2217.76 ||1498.57 |
|Appropriation || || |
|APPROPRIATION: || || |
|Proposed Equity Dividend || || |
|Tax on Proposed Equity Dividend || || |
|General Reserve || || |
|Profit/(Loss) Carried Forward ||2217.76 ||1498.57 |
Previous years figures have been regrouped for comparison purposes with currentyears presentation wherever necessary.
With a view to augment the long term resources and to plough back the earnings in thebusiness itself and accordingly to focus on sustainable profitable volume growth in comingyears your Directors do not recommend any Dividend on the Shares of the Company for theyear ended March 31 2016.
For the fourth successive year the economy and market conditions were dominated bydemand gap low price realisation negative growth in the capital goods industry lowlevels of investment by government and industry and delays in project execution. TheCompany had to maintain its operations against this background.
Income from Sales and Services for the Company increased from Rs. 66788.90 lakhs inthe previous year to Rs. 71381.14 lakhs a rise of 7%. The concentrated efforts to reachdeeper into the markets do cherry picking while accepting the orders and the valueengineering helped the Company to make a profit before exceptional items and tax of Rs.735.37 lakhs as against a loss before exceptional items and tax of Rs. 3443.14 lakhs inthe previous year.
Tight money market conditions and elongated working capital cycle resulted in negativecash flows from operations and caused an increase of Rs. 61 lakhs in finance cost for theyear. The Company ensured that there was no default in meeting any obligation andmaintained a smooth flow of operations.
The Free Reserves of the Company as on March 31 2016 increased by Rs. 719.19 lakhs toRs. 26689.13 lakhs.
During the year Rs. 9.66 lakhs was transferred to the Investor Education and ProtectionFund.
HUMAN RESOURCES AND EMPLOYEE RELATIONS:
There is an ongoing emphasis on building a progressive Human Resources culture withinthe organisation. Structured initiatives to nurture talent and create a workingenvironment that fosters motivation team-work and result-orientation continue to beaddressed.
A long term wage agreement was signed with the workmen union on October 21 2015 for aperiod of three years from January 1 2015 to December 31 2017. Productivity levelcontinued to be subject to continuous monitoring. Employee strength as on March 31 2016was 1342 as compared to 1378 in the previous year.
The Company has not accepted any fixed deposits from the public or the Members underChapter V of the Companies Act 2013 read with the Companies (Acceptance of Deposits)Rules 2014 during the financial year 2015-2016 and as such no amount of principal orinterest on deposits from public or the Members was outstanding as of the Balance Sheetdate.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING FINANCIAL POSITION OF THE COMPANYFROM THE END OF THE FINANCIAL YEAR AND TILL THE DATE OF THIS REPORT:
Except as disclosed elsewhere in this Report no material changes and commitments whichcould affect the Companys financial position have occurred between the end of thefinancial year of the Company to which the Financial Statements relate and the date ofthis Report.
DISCLOSURE OF INTERNAL FINANCIAL CONTROLS:
The Internal Financial Controls with reference to financial statements as designed andimplemented by the Company are adequate which are commensurate with the size scale andcomplexity of its operation. Further the Companys internal controls are supplementedby internal audits review by management and documented policies guidelines andprocedures and are also reviewed by the Audit Committee of the Board of Directors.
During the financial year under review no material or serious observation has beenreceived from the Internal Auditors of the Company for inefficiency or inadequacy of suchcontrols.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL:
There are no significant and/or material orders passed by the Regulator(s) or Court(s)or Tribunal(s) impacting the going concern status of the Company and its businessoperations in future.
PARTICULARS OF CONTRACT OR ARRANGEMENT WITH RELATED PARTIES:
All contracts/arrangements/transactions entered by the Company during the financialyear 2015-2016 with related parties as defined under Section 188 of the Companies Act2013 and the rules made there under and as per the applicable provisions of Securities andExchange Board of India (Listing Obligations & Disclosure Requirements) Regulations2015 (hereinafter referred as "the Listing Regulations") were in the ordinarycourse of business and on arms length basis. Therefore there is no requirement toreport any transaction in Form AOC-2 in terms of Section 134 of the Companies Act 2013read with Rule 8 of the Companies (Accounts) Rules 2014. All such contracts/arrangements/transactions were placed before the Audit Committee for approval. Prioromnibus approval of the Audit Committee is obtained on an annual basis which is reviewedand updated on quarterly basis.
Further during the year under review the Company has not entered into anycontracts/arrangements/transactions with related parties which could be consideredmaterial in accordance with the Related Party Transactions Policy of the Company whichcan be accessed by using the following link:http://www.bharatbijlee.com/doc/RPT-Policy.pdf Transactions with related parties as perthe requirements of Accounting Standard 18 are disclosed in the notes to accounts annexedto the financial statements.
PARTICULARS OF LOANS GUARANTEES INVESTMENTS AND SECURITIES:
Particulars of loans guarantees investments and securities provided during thefinancial year under review covered under the provisions of Section 186 of the CompaniesAct 2013 have been provided in the Financial Statements which forms part of this AnnualReport. (Please refer Note No. 13 14 and 16 to the Financial Statements).
DISCLOSURE UNDER SECTION 43(a)(ii) OF THE COMPANIES ACT 2013:
The Company has not issued any shares with differential rights and hence no informationas per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of the Companies(Share Capital and Debenture) Rules 2014 has been furnished.
DISCLOSURE UNDER SECTION 54(1)(d) OF THE COMPANIES ACT 2013:
The Company has not issued any sweat equity shares during the financial year underreview and hence no information as per provisions of Section 54(1)(d) of the Act read withRule 8(13) of the Companies (Share Capital and Debenture) Rules 2014 has been furnished.
DISCLOSURE UNDER SECTION 62(1)(b) OF THE COMPANIES ACT 2013:
The Company has not issued any equity shares under Employees Stock Option Scheme duringthe financial year under review and hence no information as per provisions of Section62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture)Rules 2014 has been furnished.
DISCLOSURE UNDER SECTION 67(3) OF THE COMPANIES ACT 2013:
During the financial year under review there were no instances of non-exercising ofvoting rights in respect of shares purchased directly by employees under a scheme pursuantto Section 67(3) of the Act read with Rule 16(4) of Companies (Share Capital andDebenture) Rules 2014 and hence no information has been furnished.
BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL:
There was no change in Directorship of the Company during the period under review. YourCompany has Nine (9) Directors consisting of four (4) Independent Directors three(3) Executive Directors and two (2) Non-Executive Directors including one (1)Woman Director as on March 31 2016.
Further in accordance with the provisions of Section 152 of the Companies Act 2013Mr. Ravishanker Prasad (DIN: 06641845) being longest in the office shall retire atthe ensuing 69th Annual General Meeting and being eligible offers himself forre-appointment.
The term of office of Mr. Nikhil J. Danani and Mr. Nakul P. Mehta as ManagingDirectors of the Company respectively expired on June 19 2016. The Board of Directorsat their meeting held on May 12 2016 have reappointed them as Managing Directors for afurther period of three (3) years w.e.f. June 20 2016. Their re-appointment andremuneration is in terms of Section 196 197 198 200 and 203 read with Section II PartII of Schedule V of the Companies Act 2013 and other applicable provisions of theCompanies Act 2013.
Necessary resolutions relating to Directors who are seeking appointment/re-appointmentas required under Regulation 36 of the Listing Regulations is disclosed as part of theNotice dated July 18 2016 of the ensuing 69th Annual General Meeting.
As for the requirement under the provisions of Section 203 of the Companies Act 2013the Board of Directors noted that Mr. Nikhil J. Danani (DIN: 00056514) Managing DirectorMr. Nakul P. Mehta (DIN: 00056561) Managing Director Mr. Shome N. Danani (DIN:00217787) Executive Director Mr. Durgesh N. Nagarkar Company Secretary and Mr. SandeepM. Tilak Chief Financial Officer are the Key Managerial Personnel of the Company as onthe date of this Report.
DECLARATIONS BY INDEPENDENT DIRECTORS:
Pursuant to the provisions of Section 149(7) of the Companies Act 2013 and applicableprovisions of Listing Regulations the Company has received individual declarations fromall the Independent Directors whose names are appended herein below confirming that theyfulfill the criteria of independence as prescribed under Section 149(6) of the CompaniesAct 2013 and the rules made there under to hold the office of Independent Director of theCompany for the financial year ended March 31 2016.
1. Mr. Prakash V. Mehta;
2. Mr. Sanjiv N. Shah;
3. Mr. Jairaj C. Thacker; &
4. Mr. Rajeshwar R. Bajaaj
NUMBER OF MEETINGS OF THE BOARD:
The Board of Directors met five (5) times during the financial year ended March 312016 viz. on May 15 2015 July 24 2015 September 22 2015 October 27 2015 andJanuary 18 2016 in accordance with the provisions of the Companies Act 2013 and rulesmade there under and Listing Regulations. Detailed information on the meetings of theBoard are included in the Report on Corporate Governance which forms part of thisBoards Report. Additionally during the financial year ended March 31 2016 theIndependent Directors held a separate meeting in compliance with the requirements ofSchedule IV of the Companies Act 2013 and Regulation 25(3) and 25(4) of the ListingRegulations.
NOMINATION AND REMUNERATION COMMITTEE:
The Nomination and Remuneration Committee as constituted by the Board of Directors ofthe Company has in accordance with the provisions of Section 178(3) of the Companies Act2013 comprises Mr. Sanjiv N. Shah (Chairman) (DIN: 00007211) Mr. Prakash V. Mehta (DIN:00001366) and Mr. Jairaj C. Thacker (DIN: 00108552) as Members of the Committee and hasformulated necessary policy on appointment and remuneration including criteria fordetermining qualifications positive attributes independence of a Director. The detailsof "Nominations and Remuneration Policy" are explained in the Report onCorporate Governance which forms part of this Report and are also available on thewebsite of the Company (http://www.bharatbijlee.com).
An Audit Committee as constituted by the Board of Directors of the Company inaccordance with the provisions of Section 177 of the Companies Act 2013 comprisesIndependent Directors namely Mr. Sanjiv N. Shah (Chairman) (DIN: 00007211) Mr.Prakash V. Mehta (DIN: 00001366) and Mr. Jairaj C. Thacker (DIN: 00108552) as Members ofthe Committee. All the recommendations made by the Audit Committee during the financialyear under review were accepted by the Board.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:
The Board of Directors have constituted a Corporate Social Responsibility (CSR)Committee as per the provisions of Section 135 of the Companies Act 2013. The Terms ofReference of the CSR Committee are to:
i. Formulate and recommend to the Board a Corporate Social Responsibility(CSR) Policy which shall indicate the activities to be undertaken by theCompany as specified in Schedule VII and the prescribed Rules under Sections 135 of theCompanies Act 2013;
ii. Recommend the amount of expenditure to be incurred on the activities referred to inpoint (i) above; iii. Monitor the CSR Policy of the Company from time to time;
iv. Ensure disclosure of CSR Policy in the Boards Report and on the website ofthe Company;
v. Ensure activities as included in CSR Policy are undertaken and are monitoredregularly;
vi. Ensure the CSR spend is made in terms of Section 135(5) i.e. at least 2% of theaverage net profits of the Company made during the 3 annually preceding financial years.
The CSR Committee comprises of Mr. Nakul P. Mehta as Chairman and Mr. Shome N. Dananiand Mr. Jairaj C. Thacker as Members.
The CSR Committee has met once in the financial year i.e. on March 28 2016 whereinMr. Nakul P. Mehta and Mr. Jairaj C. Thacker were present.
The Board has adopted a CSR policy for the Company on the recommendation of the CSRCommittee. The Report on CSR activities as required under the Companies (Corporate SocialResponsibility) Rules 2014 including a brief outline of the Companys CSR Policytotal amount to be spent under CSR Policy for the financial year amount unspent and thereason for the unspent amount is set out at Annexure I forming part of thisReport.
EVALUATION OF DIRECTORS COMMITTEE AND BOARD:
Pursuant to the provisions of the Companies Act 2013 and the Listing Regulations theBoard of Directors has carried out evaluation of its own performance its Committees andindividual Directors. The evaluation process has been explained in the Report on CorporateGovernance which forms part of this Report. Also the Independent Directors at theirmeeting reviewed the performance of the Board its Chairman and Non-Executive Directors ofthe Company.
RISK MANAGEMENT POLICY:
The Board of Directors of the Company have approved Risk Management Policy andGuidelines wherein all material risks faced by the Company are identified and assessed.Moreover in the said Risk Management Policy the Board has defined a structured approach tomanage uncertainty cultivating the same in their decision making pertaining to allbusiness divisions and corporate functions. For each of the risks identifiedcorresponding control are assessed and policies and procedures are put in place formonitoring mitigating and reporting risks on periodic basis.
VIGIL MECHANISM POLICY:
The Board of Directors of the Company have pursuant to the provisions of Section178(9) of the Companies Act 2013 read with Rule 7 of the Companies (Meetings of Board andits Powers) Rules 2014 framed "Vigil Mechanism Policy" for Directors andemployees of the Company to report their genuine concern of any violations of legal orregulatory requirements incorrect or misrepresentation of any financial statements andreports etc. No employee has been denied access to the Chairman of the Audit Committee.Also Whistle blower complaints if any and their redressal are discussed at the meetingof Audit Committee of the Board. During the year under review no such complaints werereceived.
The details of "Vigil Mechanism Policy" are available on the website of theCompany (http://www.bharatbijlee.com)
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE:
As per the requirement of Section 4 of the Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013 and Rules made there under the Boardof Directors has constituted the Internal Complaints Committee (ICC) at theRegistered Office Works and at all the Regional Offices of the Company to deal with thecomplaints received by the Company pertaining to gender discrimination and sexualharassment at workplace.
The ICC has been constituted covering the offices at Mumbai/Navi Mumbai consisting ofthe following Members:
|Sr. No. ||Name of Officer ||Designation ||Position in Committee |
|1. ||Ms. Aarti Madhankar ||General Manager Human Resources ||Presiding Officer |
|2. ||Mr. Durgesh N. Nagarkar ||Company Secretary & Senior General Manager ||Member |
|3. ||Mr. Nitin R. Rathod ||General Manager Employee Relations ||Member |
|4. ||Ms. Anjali Ranade ||Senior Manager Design ||Member |
Also each branch of the Company has its own ICC consisting of officers from SerialNo. 1 3 and 4 as mentioned herein above along with two more members employed at thebranches one of them consisting of a woman employed in those respective branches.
As per the provisions of Sections 21 & 22 of the Sexual Harassment of Women atWorkplace (Prevention Prohibition & Redressal) Act 2013 the Report on the detailsof the number of cases filed under Sexual Harassment and their disposal is as under:
|Sr. No. ||No. of cases pending as on the beginning of the financial year ||No. of complaints filed during the year ||No. of cases pending as on the end on the financial year |
|1. ||Nil ||Nil ||Nil |
DIRECTORS RESPONSIBILITY STATEMENT:
In terms of Section 134(3)(c) read with Section 134(5) of the Companies Act 2013 theBoard of Directors hereby confirms that:
a. in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
b. such accounting policies have been selected and applied consistently and theDirectors have made judgments and estimates that are reasonable and prudent so as to givea true and fair view of the state of affairs of the Company as at March 31 2016 and ofthe Profit and Loss of the Company for the year ended on that date;
c. proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities;
d. the annual accounts of the Company have been prepared on a going concern basis;
e. internal financial controls have been laid down to be followed by the Company andthat such internal financial controls are adequate and were operating effectively;
f. proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
REPORTING ON FRAUDS:
There were no frauds reported by the Auditors under sub-section (12) of Section143 of the Companies (Amendment) Act 2015 to the Audit Committee Board of Directors orto the Central Government and hence no information has been furnished in this regard.
PARTICULARS OF EMPLOYEES AND REMUNERATION:
Information as required under the provisions of Section 197(12) of the Companies Act2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 and the Companies (Appointment and Remuneration of Managerial Personnel)Amendment Rules 2016 are set out in Annexure II hereto which forms part of thisReport.
As stipulated under the provisions of Regulation 34(3) read with Schedule V(C) of theListing Regulations a separate report on Corporate Governance along with a Certificate asrequired under Schedule V(E) of the Listing Regulations on its compliance from MessrsDalal and Shah LLP Chartered Accountants forms part of this Report.
MANAGEMENT DISCUSSION AND ANALYSIS (MDA) REPORT:
A separate report on MDA forms part of the Annual Report.
AUDITORS AND THEIR REPORTS:
The matters pertaining to Auditors and their Reports are appended below
OBSERVATIONS OF STATUTORY AUDITORS ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH31 2016:
The Auditors report for the year ended March 31 2016 does not contain anyqualification reservation or adverse remark or any Disclaimer.
M/s. Dalal & Shah Chartered Accountants bearing Firm Registration No.102021W/W100110 have been appointed as Statutory Auditors of the Company for a period ofthree (3) years from the conclusion of the 67th Annual General Meeting upto theconclusion of the 70th Annual General Meeting. Pursuant to the provisions ofSection 139 of the Companies Act 2013 and the Companies (Audit and Auditors) Rules 2014their appointment as Statutory Auditors upto the conclusion of 70th AnnualGeneral Meeting is required to be ratified by the members at every Annual General Meeting.Necessary resolution for ratification of appointment of the said Auditors is included inthe Notice of the ensuing 69th Annual General Meeting.
The consent of the Auditors along with certificate under Section 139 of the CompaniesAct 2013 and rules made there under have been obtained from the Auditors to the effectthat their appointment if made shall be in accordance with the prescribed conditions andthat they are eligible to hold the office of Auditors of the Company.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 your Company hadappointed Messrs N. L. Bhatia & Associates Practicing Company Secretaries as itsSecretarial Auditor to conduct the secretarial audit of the Company for the financial year2015-2016.
The Report on Secretarial Audit for the financial year 2015-2016 in Form MR-3as Annexure V forms part of this Board Report. There are no qualificationsreservations or adverse remarks in this Report given by Secretarial Auditors.
Pursuant to the provisions of Section 148 of the Companies Act 2013 read with theCompanies (Cost Records and Audit) Amendment Rules 2014 including any Notifications/Circulars issued by the Ministry of Corporate Affairs from time to time and as per therecommendation of the Audit Committee the Board of Directors at their meeting dated May12 2016 have appointed M/s. P. M. Nanabhoy Cost Accountants (Firm Registration No.:00012) as the Cost Auditors of the Company for the financial year 2016-2017 to audit thecost records of electric motors power transformers drives and magnet technology machinesproducts. A resolution for ratification of the payment to be made for such appointment isincluded in the Notice of the ensuing 69th Annual General Meeting.
The consent of the Auditors along with a Certificate from M/s. P. M. Nanabhoyhave been received to the effect that their appointment as Cost Auditors of the Companyif made would be in accordance with the limits specified under Section 141 of theCompanies Act 2013 and the Rules framed there under.
EXTRACT OF ANNUAL RETURN:
Pursuant to the provisions of Section 134(3)(a) of the Companies Act 2013 Extract ofthe Annual Return for the financial year ended March 31 2016 made under the provisions ofSection 92(3) of the Companies Act 2013 read with Rule 12 of the Companies (Managementand Administration) Rules 2014 is attached as Annexure III which forms part ofthis Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The particulars as required under the provisions of Section 134(3) (m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 in respect ofconservation of energy technology absorption foreign exchange earnings and outgoetc. are furnished in Annexure IV which forms part of this Report.
Your Directors acknowledge with gratitude the assistance and co-operation received fromthe financial institutions banks Government as well as non-government authoritiescustomers vendors stock exchange and members during the year under review. The Boardwishes to take on record its sincere appreciation to the active involvement and dedicationof the officers employees and workers of the Company at all levels to show the resiliencein the performance of the Company.
For and on behalf of the Board of Directors
Prakash V. Mehta
Place : Mumbai
Date : July 18 2016
Electric Mansion 6th Floor
Appasaheb Marathe Marg
Prabhadevi Mumbai 400 025