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Bharati Defence & Infrastructure Ltd.

BSE: 532609 Sector: Others
NSE: BHARATIDIL ISIN Code: INE673G01013
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VOLUME 962
52-Week high 37.00
52-Week low 13.50
P/E
Mkt Cap.(Rs cr) 79.47
Buy Price 0.00
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Sell Price 0.00
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OPEN 16.00
CLOSE 16.25
VOLUME 962
52-Week high 37.00
52-Week low 13.50
P/E
Mkt Cap.(Rs cr) 79.47
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Bharati Defence & Infrastructure Ltd. (BHARATIDIL) - Director Report

Company director report

TO

THE MEMBERS OF BHARATI SHIPYARD LIMITED

On behalf of the Board of Directors it gives me immense pleasure in presenting to youthe 38th Annual Report on the working of the Company together with the AuditedFinancial Statements of the Company for the year ended March 31 2015.

1. FINANCIAL RESULTS:

The working of your Company for the year under review resulted in

(Rs. in Lakhs)

Particulars Financial Year
2014-15 2013-14
Total Income 4372.78 20300.92
Profit before Interest Depreciation & Tax (64961.21) (46459.96)
Less : Finance Cost 29480.50 51184.26
Less : Depreciation 6227.02 4939.92
Profit before Tax (100668.83) (102584.14)
Less : Tax (14210.50) (18310.71)
Profit / (Loss) after Tax 86458.24 (84273.43)
Surplus brought forward (81312.12) 2961.32
Amount available for appropriation (167770.36) (81312.11)
APPROPRIATIONS (Section 134(3)(j) -- --
Transfer to Debenture Redemption Reserve -- --
Transfer to General Reserve (200.89) --
Dividend including Dividend Tax -- --
Shortfall in provision of Dividend and Dividend Tax for Last -- --
Year
Surplus carried forward (167971.25) (81312.11)
Total Appropriations (167971.25) (81312.11)

2. CAPITAL:

During the year under review Authorized Share Capital of the Company is Rs. 9900.00Lakhs consisting of 99000000 Equity Shares of face value of Rs. 10/- each.

3. DIVIDEND:

In view of inadequate profits the directors do not recommend Dividend for the yearunder review. (Section 134(3) (k)

4. OPERATING RESULTS AND PROFITS:

During the year under review your Company has successfully delivered 4 vessels. Duringthe year turnover has reduced to Rs. 2912.28 Lakhs in comparison to the previous year ofRs. 17856.46 lakhs.. The Company has incurred net loss of Rs.86 458.24 Lakhs as comparedto Rs. 84273.43 Lakhs in the previous year.

5. FINANCE:

As at the end of financial year your Company has total Secured Long-term facilities ofRs.533705.25 Lakhs (Including Debentures and Term Loans). The Company has total Short termfacilities of Rs.63667.43 Lakhs (including Secured Loans Short term borrowing ofRs.56554.89 lakhs and unsecured loans of Rs.7112.54 Lakhs).

6. SUBSIDIARIES JOINT VENTURE AND ASSOCIATE:

During the year under report the following companies are:

SUBSIDIARIES a) Advitiya Urja Private Ltd. b) Dhanshree Properties Private Ltd.c) Natural Power Ventures Private Ltd. d) Nirupam Energy Projects Private Ltd. e) NishitaMercantile Private Ltd. f) Pinky Shipyard Private Ltd. g) Premila Mercantile Private Ltd.h) Vishudh Urja Private Ltd. i) Tebma Shipyard Limited

JOINT VENTURE

Bengal Shipyard Limited a Joint Venture with the Company and Apeejay Shipping Limitedhas reported a loss of Rs. 19.07 Lakhs for the year under consideration and accumulatedloss of Rs.14.66 Lakhs up to 31.03.2015(As per unaudited Financial Statement). Further aSum of Rs.3 162.35 Lakhs remitted towards advances.

ASSOCIATE

Company holds 49.73% in Great offshore limited resulting to which it is classified asan Associate to the Company.

The financial of the subsidiaries joint venture entities and associates of the Companyhave been considered in the consolidated Financial Statements of the Company and form partof this Annual report as required by the applicable Accounting Standards issued by theInstitute of Chartered Accountants of India and Rule 8(1) of the Companies (Accounts)Rules 2014.

However the Company has availed general exemption given by Central Government videcircular no 2/2011 dated February 08 2011 from attaching the Annual Audited Accounts ofthe Subsidiary companies with its Annual Report. Accordingly the said documents have notbeen attached with the Balance sheet of the Company.

However the Annual Accounts of the subsidiary companies and related detailedinformation will be made available to the members of the Company and its subsidiarycompanies seeking such information at any point of time. The Annual Accounts of thesubsidiary companies will be kept open for inspection by any investor at the RegisteredOffice of the Company.

7. DIRECTORS: a) The Company on the date of the report has six directors. Out ofthese 3 are independent directors (including a woman director one acting as occupier andtwo are Executive Directors. Pursuant to the provisions of section 149 of the CompaniesAct 2013 the Independent Directors are not liable to retire by rotation.

b) Ms Shakti Sharma (Woman Director) who was appointed as an Additional Directorholds office up to the date of this AGM and the Company has received a Noticerecommending her candidature for appointment as the director of the Company.

c) During the year under report Mr. V. P. Kamath and Mr. R. P. Singh Directorsresigned from the Board and the Board has kept on record its appreciation of theirguidance to the Company.

8. INFROMATION REGARDING SALARIES AND PRATICULARS OF EMPLOYEES

That information to be disclosed in the Board’s Report of a Listed Company incompliance with the Rule No.5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is given as an annexure to this Board Report.

9. CORPORATE GOVERNANCE REPORT & MANAGEMENT DISCUSSION AND ANALYSIS:

Corporate Governance Report and Management Discussion and Analysis Report forms anintegral part of this Report and are set out as separate Annexure to this Report. Thatpursuant to provisions of Section 204(1) of the Companies Act2013 read with Rule No. 9 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 aSecretarial Audit Report in Form MR 3 for the year under report from the IndependentPracticing Company Secretary for carrying out the Secretarial Audit of the Company’sCompliance of Corporate Governance Conditions as stipulated under the provisions of theCompanies Act2013 Rules framed there under and Amended Clause 49 of the ListingAgreement is annexed to this Board Report.

10. DISCLOSURES ABOUT CSR POLICY:

Pursuant to provisions of Section 134(3)(o) the relevant information has been disclosedin and as per Annexure to the Companies ( Corporate Social Responsibility Policy ) Rules2014 a copy whereof is annexed hereto in compliance of the Rule 9 of the Companies(Accounts) Rules 2014.

11. AUDITORS:

M/s. M.V. Damania & Co. Chartered Accountants the existing auditors hold officeas Statutory Auditor till the ensuing Annual General Meeting as per the provisions ofCompanies Act 2013. M V Damania & Co Chartered Accountants has given consent for theappointment and also issued certificate to the effect that their appointment if madewill be in accordance with the conditions prescribed under rule 4 of the Companies (Auditand Auditors) Rules 2014. The Directors have recommended to the Members theirappointment at the ensuing 38th Annual General Meeting. It is also informed bythe Auditors vide their letter dated 15th May 2015 that the name of theirfirm has been changed from M/s M.V.Damania & Co. to M/s Damania &Varaiya-Chartered Accountants.

12. CORPORATE DEBT RESTRUCTURING SCHEME

The Bharati Shipyard Limited ("company") has approached Corporate DebtRestructuring (CDR) cell through State Bank of India (SBI) Lead Banker of the consortiumfor the restructuring of its debts under CDR scheme in December 2011.

• Flash Report filed with CDR –EG on 16th December 2011

• The restructuring proposal has been sanctioned by CDR-EG with Cut of Date (COD)as 01-10-2011

• Letter of Approval (LOA) has been issued by CDR cell on 25th June2012 which is as above enclosed.

• Various Security Documents were executed under CDR Scheme.

• As per approved Scheme under CDR Many Banks have not released the facilitiesthough Promoters have infused funds towards promoter’s contribution as required inthe CDR package Due to various technical and operational reasons the scheme could not gothough and package could not be implemented. The Banks have entered into new proposal torevive the Company and opted for Stand by Letter of Credit (SBLC) and Advance paymentGuarantee (APG) scheme under which 10 Banks has given Sanction which was also notreleased to the Company upto March 2014 because of which the Company Account has becomeNon Performing Account (NPA) in some of the Banks by June 2014 out of 23 Banks 11 Bankshave sold and assign their 60% of total debts / loans to Edelweiss Assets ReconstructionCompany Limited (EARC) Mumbai. Currently we have 13 Banks / Financials InstitutesIncluding EARC in our Debt.

• Presently we have exited on 20th August 2014 from CDR System onaccount of failure of approved package. Day to day the financials management of theCompany is being managed under the guidance of EARC.

13. FIXED DEPOSITS:

Pursuant to provisions of sub-rule 5(v) of Rule (8) the Companies (Accounts) Rules2014 during the year under report the Company has not accepted nor renewed any depositsfrom public.

14. EXTRACTS OF ANNUAL RETURN:

Pursuant to provisions of Section 134(3)(a) read with provisions of Section 92(3) ofthe Companies Act2013 and in compliance of the requirements of Rule 12(1) of theCompanies ( management and Administration ) Rules 2014 Extracts of Annual Return in FORMMGT 9 are attached with this Report of the Board of Directors of the Company.

15. Details of Board Meetings :

Pursuant to provisions of Section 134(3)(b) of the Companies Act2013 the relevantdetails are given in the Report on Corporate Governance forming part of this Board Report.

16. DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to Section 134(3)(c) of the Companies Act 2013 in relation to financialstatements for the year 2014-15 the Board of Directors reports that:

• In the preparation of the annual accounts the applicable accounting standardsread with requirements as set out under Schedule III to the Companies Act2013 have beenfollowed along with proper explanation relating to material departures;

• Accounting policies have been selected and applied consistently and that thejudgments and estimates made are reasonable and prudent so as to give a true and fair viewof the state of the affairs of the Company as at the end of the financial year and of theloss of the Company for the year ended March 31 2015;

• Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

• The annual accounts have been prepared on a going concern basis.

• That the Directors have laid down internal financial controls to be followed bythe Company and that such internal financial controls are adequate and are operatingeffectively and

• That the Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively

17. STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS:

Pursuant to provisions of Section 134(3)(d) read with Section 149(7) of the CompaniesAct2013 the Independent Directors have given declarations that they meet the criterionas set out under the provisions of Section 149(6) of the Companies Act2013.

18. POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION:

The information required to be given under the provisions of Section 134(3)(e) readwith provisions of Section 178 (1) of the Companies Act2013 is given as an annexure tothis Board Report

19. AUDIT REPORT:

The Auditors have qualified their report (Standalone and Consolidated) on the annualaccounts of the Company for the year ended March 31 2015 at Point No’s (a) to (j) oftheir Report.

That these qualifications are self explanatory and do not need further comments fromthe Board of Directors of the Company under the provisions of Section 134(3) (f) of theCompanies Act 2013.

20. LOANS AND INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT2013:

That pursuant to the provisions of Section 134(3) (g) read with Section 186 of theCompanies Act 2013 no Loans Guarantees or Investments have been made by the Companyduring the year under report.

21. RELATED PARTY TRANSACTIONS:

Pursuant to provisions of Section 134(3) (h) of the Companies Act 2013 details asrequired to be given as per Section 188(1) of the Companies Act 2013 read with Rule 8(2)of the Companies (Accounts) Rules 2014 have been given in Notes to the Accounts.

30. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

Certain creditors of the Company had filed Winding up petitions before the HonorableHigh Court Mumbai. The Company signed consent terms with these creditors and is making thepayments accordingly. There are no other significant material orders passed by theregulators/Courts which would impact the going concern status of the Company and itsfuture operations.

31. ESTABILSMENT OF VIGIL MECHANISM

The Company has a Vigil Mechanism in place. Any employee having any complaint is freeto approach the Chairman of Audit Committee wit his/her grievances. During the year underreport no such complaints have been received.

32. WIND POWER PROJECT

As reported in the last year’s Directors Report the noncore Assets of thisdivision have been transferred to M/s Ghatge Patil Industries Limited during the yearunder report as a part of CDR scheme.

33. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has adequate Internal control System and procedures in place and they areeffectively working. However with a view to have more better controls the Companycontinuously reviews and updates these controls and procedures.

34. ACKNOWLEDGEMENT:

Your Directors place on record their sincere appreciation for the continued supportfrom shareholders customers suppliers banks & financial institutions and otherbusiness associates. A particular note of thanks to all employees of your Company withoutwhose contribution your Company could not have achieved the year’s performance.

Your Directors are thankful to the shareholders for their faith and continued supportin the endeavors of the Company.

For and on behalf of the Board

Date: 30th May 2015 Place: Mumbai

Addendum to the Directors’ Report:

1. Mr.V.Chandrasekaran who was appointed as Director in the last Annual General Meetinghas expressed his inability to continue as Director due to personal reasons and submittedhis resignation on 4th August 2015.The Board of Directors at its meeting heldon 14th August 2015 has accepted his resignation and placed on record sincereand heartfelt thanks for the excellent guidance and active participation in the working ofthe Company during his tenure.

2. The Board of Directors at the same meeting has appointed Mr.S.Balasubramanian as anAdditional Director being an Independent Director on the Board of the Company. Pursuantto the provisions of section 134 of the Companies Act 2013 the members are herebyinformed about this appointment pursuant to the provisions of section 152 of theCompanies Act 2013 read with Schedule IV and Directors (Appointment and Qualification)Rules 2014 this disclosure in the form of addendum is annexed to this report.

For and on behalf of the Board

Date: 30th May 2015 Place: Mumbai

ANNEXURE TO REPORT OF BOARD OF DIRECTORS

The Information in compliance with Rule No.5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is disclosed hereunder.

1. The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year.

Ans: 12.5

2. The percentage increase in remuneration of each director Chief Financial OfficerChief Executive officer Company Secretary or Manager if any in the financial year.

Ans: No such increase during the year.

3. The percentage increase in the median remuneration of employees in the financialyear. Ans: No such increase during the year.

4. The number of permanent employees on the rolls of the Company.

Ans: 1292

5. The explanation on the relationship between average increase in remuneration andCompany performance.

Ans: In view of the absence of increase in the remuneration no explanation isrequired to be given.

6. Comparison of the remuneration of the Key Managerial Personnel against theperformance of the Company.

Ans: The remuneration of Managing Directors has been reduced during the year dueto bad financial position of the Company.

7. Variation in the market capitalization of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year and percentageincrease over/ decrease in the market quotations of the shares of the Company incomparison to the rate at which the company came out with the last public offer in case oflisted companies.

Ans:P E Ratio =Previous Year Rs.(189.15)

P E Ratio =Current Year Rs. (171.89)

Market Capitalization as on 31/3/14= Rs 123 13 18100/-

Market Capitalization as on 31/3/15= Rs 114 68 15877/-

The Market Capitalization has gone down due to falling markets and bad performance ofthe Company.

There is no increase in remuneration during the year under report hence comparison isnot possible.

The Company came out with its First public issue in the year 2008 @ a price of Rs. 66/-per share. There is about 65% fall in price of share when compared with IPO Price.

8. Average percentile increase already made in the salaries of employees other than themanagerial 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. Comparisonof the each remuneration of the Key Managerial Personnel against the performance of theCompany.

Ans: In view of the reply against point No.VI no comparison is possible.

9. Comparison of the each remuneration of the Key Managerial Personnel against theperformance of the Company.

Ans: In view of the reply against point No.VI no comparison is possible.

10. The key parameters for any variable component of remuneration availed by thedirectors.

Ans: No such component in the remuneration of Managing Directors.

11. The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year.

Ans: 0.52

12. Affirmation that the remuneration is as per the remuneration policy of the Company.

Ans: It is affirmed that the remuneration is as per the Remuneration Policy of theCompany. That there are no disclosures required to be made pursuant to provisions of Rule5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

For and on behalf of the Board

Date: 30th May 2015
Place: Mumbai (Managing Director)

ANNEXURE ‘A’

A. Conservation of Energy:

I. We have under taken up gradation of Electrical systems to improve Power Factor to0.99 resulting into reduction in consumption of electricity. II. We have extended energysaving systems for welding sets to additional machines.

III. We have installed Solar panels for the water heating at the accommodation atyards.

B. Technology Absorption:

I. On the construction side we have introduced line production system that avoidsunnecessary transportation time and hastens the productivity. To support this system wehave introduced Computer Numeric Control machines for profile cutting of plates and pipesand Nobolder automatic welding machines. II. We are now engaged in building a MobileOffshore Drilling Unit capable of operating in 350 feet of water. This Rig can be elevatedto a height of 418Feet and has an advanced electric rack and pinion system of jack up aswell as derrick skidding system. It has a cantilever cover of 70 feet beyond the transomand drill floor movement of 30 feet side to side.

III. Also we have introduced Self Propelled Moduler Transport System by which we cantransport large structures weighing as much as 2500 tonnes. We have also introduced inour yards the pneumatically controlled Skidding System by which we can skid and load outstructures as heavy as 7000 tonnes.

C. Foreign Exchange Spent And Earned:

Rs. in Lakhs
Particulars F.Y.2014-15 F.Y.2013-14
a) Value of Direct Import calculated on CIF Basis:
i. Raw Materials (incl Components spare parts) 447.08 16307.00
iii. Capital Goods -
b) Earning in Foreign Exchange on account of export
of Goods:(FOB Value)
c) Expenditure in Foreign Currency:
ii. Design and Consultancy 1.15 23.89
iv. Legal & Professional fees - 206.96
v. Interest 1112.61 587.42
vi. Others 559.71

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