The Directors of your Company have pleasure in presenting Seventh Annual Report and theCompany's Audited Financial Statement for the Financial Year ended March 31 2016
1. Financial summary or highlights/ Performance of the Company (Standalone): Thefinancial performance of the Company for the Year ended 31st March 2016 is as summarizedbelow:
(Rs. In Lacs)
|Particulars ||2015-2016 ||2014-2015 |
|Gross Turnover & Other Income ||3221.20 ||4729.90 |
|Profit /(Loss) before Exceptional Item Interest Depreciation & Taxation ||456.32 ||529.24 |
|Less : Exceptional Item ||60.72 ||(96.33) |
|Profit /(Loss) before Interest Depreciation & Taxation ||395.60 ||625.57 |
|Less Interest ||47.98 ||57.55 |
|Profit / (Loss) before Depreciation & Taxation ||347.62 ||568.02 |
|Less Depreciation ||427.91 ||473.25 |
|Profit / (Loss) before tax ||(80.29) ||94.77 |
|Less Provision for Taxation (Incl. Deferred Tax) ||0.25 ||- |
|Net Profit / (Loss) for the year ||(80.54) ||94.77 |
|Add/ (less) Balance brought forward from previous Year ||(2981.13) ||(3058.78) |
|Add/ (less) Retain Value of Assets ||- ||(17.12) |
|Balance Carried to Balance Sheet ||(3061.67) ||(2981.13) |
2. Performance Review: For the year 2015-16 the Turnover of the Companydecreased and stood at Rs. 2751.68 Lakhs and loss incurred was Rs.80.54 Lakhs which ismainly due to exceptional item and lower capacity utilization coupled with fallingmargins.
3. Extract of Annual Return: Extract of Annual Return as provided undersub-section (3) of section 92 in Form No. MGT 9. (Annexure 1).
4. Number of meetings of the Board of Directors: During the year 2015-16 4meeting of the Board of Directors held.
5. Directors' Responsibility Statement:
1. The Directors' Responsibility Statement referred to in clause (c) of sub-section (3)of Section 134 of the Companies Act 2013 shall state that:
a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;
c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
d) the directors had prepared the annual accounts on a going concern basis; and
e) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
6. Auditors' Report: As regards Auditors remarks in the Audit report comments ofthe Board of Directors are as under: As regards Auditors remarks in the Audit reportcomments of the Board of Directors are as under:
a) Auditor Remark: The Company has sent letters to customers in respect of tradereceivables for confirming balances outstanding as at March 31 2016 but in most of thecases the customers have not sent written confirmation confirming the balance outstandingas at March 31 2016. In the absence of confirmation any provision to be made for adversevariation in the carrying amounts of trade receivables is not quantified.
Boards Comments on the same: The Board considers all outstanding balance of customersas on 31st March 2016 as good and recoverable excepting those considered doubtful andprovided for during the financial year 2015-16.
b) Auditor Remark: The Lender Bank of Bilpower Limited has pursuant to certainCorporate Guarantees given by the Company demanded from the Company their dues fromBilpower Limited amounting to Rs. 215.82 crores. No provision has been made in theaccounts for the probable loss that may arise on account of above demand of Rs. 215.82crores.
Boards Comments on the same: Bilpower Limited the Borrower in whose favor the Companyhas given Corporate Guarantee to State Bank of India has informed the Company that theyare in negotiation with the Lender Bank for settlement/ Re-schedulement of dues and henceno provision has been made in the account.
c) Auditor Remark: The Company has not provided for interest payable to State Bank ofIndia amounting to Rs. 1179.54 Lakhs for the year ended 31st March 2016. The Company hasnot made any provision for the penal interest claimed by the Bank. As a result the lossfor the year ended 31st March 2016 is understated by Rs. 1179.54 Lacs & CurrentLiabilities as at 31st March 2016 are also understated by Rs. 1179.54 Lakhs and alsoreserves are overstated by Rs. 1179.54 Lakhs. The amount of penal interest cannot bequantified as the details have not been received from the bank. Also the Company has notprovided for interest amounting to Rs. 1045.12 Lakhs for the Financial Year 2014-15 as aresult the accumulated losses as on 31st March 2016 are understated by Rs. 2224.68 Lakhsand also current Liabilities are understated by Rs. 2224.68 Lakhs. The amount of penalinterst cannot be quantified as the details have not been received from the bank.
Boards Comments on the same: Based on the Legal advice received by the Company it hasbeen decided not to provide any interest on liability of State Bank of India.
d) Auditor Remark: Loan given includes four interest free loan of Rs. 630.19 Lacs
e) As regards Auditors' remarks in Annexure to their report under Item No. 7 a) & 7b) with respect to nonpayment of Maharashtra vat Professional Tax Excise the same isself-explanatory.
7. Loan and Investment by Company: Particulars of loans guarantees orinvestments under section 186. (Annexure 2)
8. Particulars of contracts or arrangements with related parties: Theparticulars of every contract or arrangements entered into by the Company with relatedparties referred to in sub-section (1) of section 188 of the Companies Act 2013 includingcertain arm's length transactions under third proviso thereto is given in Form No. AOC-2.(Annexure 3)
9. Reserves: In the financial year 2015-16 reserve maintained with theCompany is Rs.1303.94 lacs while in year 2014-15 reserve was Rs. 1384.48. This amount isdecreased due to loss for the year 2015-16 of Rs.80.54 lacs.
10. Dividend: Your Directors do not recommend any dividend for the year underreview in view of losses incurred.
11. 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: No such Material changesoccurred subsequent to the close of the financial year of the Company to which the balancesheet relates and the date of the report.
12. Conservation of energy technology absorption and foreign exchange earnings andoutgo: The details of conservation of energy technology absorption foreign exchangeearnings and outgo are as follows:
A. Conservation of energy:
i. the steps taken or impact on conservation of energy: NIL;
ii. the steps taken by the company for utilising alternate sources of energy: NIL;
iii. the capital investment on energy conservation equipments: NIL.
B. Technology absorption:
i. the efforts made towards technology absorption: NIL;
ii. the benefits derived like product improvement cost reduction product developmentor import substitution: NIL;
iii. in case of imported technology (imported during the last three years reckoned fromthe beginning of the financial year)-
a) the details of technology imported: NIL;
b) the year of import: NIL;
c) whether the technology been fully absorbed: NIL;
d) if not fully absorbed areas where absorption has not taken place and the reasonsthereof: NIL; and
iv. the expenditure incurred on Research and Development: NIL.
C. Foreign exchange earnings and Outgo: The Foreign Exchange earned in terms ofactual inflows during the year and the Foreign Exchange outgo during the year in terms ofactual outflows: Inflow: Nil and Outflow: Rs. 101.87 Lacs.
13. Risk management policy: Our Company maintains conducive work environment andprovides adequate motivation to perform. However senior management team members or keypersonnel may choose to leave the organization in which case operations of our Company maybe affected. However in such eventuality we will promptly fill the vacancy through eitherfresh recruitment or internal promotion.
14. Change in the nature of business if any: No
A) Changes in Directors and Key Managerial Personnel:
Detail is given in corporate governance report annexed and forming part of the Directorreport.
B) Declaration by an Independent Director(s) and re- appointment if any:
A declaration by an Independent Director that they meet the criteria of independence asprovided in sub-section (6) of Section 149 of the Companies Act 2013 has been disclosedby the Independent Director to the Company.
C) Formal Annual Evaluation:
The Board has formulated a code of conduct policy for formal annual evaluation purposewhich has been made by the Board of its own performance and that of its committees andindividual directors.
16. Number of meetings of the Board of Directors
A) Audit Committee: The Audit Committee has three director i.e. one Chairman andTwo members as per The Companies Act 2013 2/3rd of the members should be IndependentDirector and Chairman should be Independent Director. All members of the Audit committeeare independent director. The Chairman of Audit Committee is Ms. Kiren Shrivastav andmembers of the committee are Mr. Sureshkumar Anandilal Choudhary and Mr. Suresh SakharamMore.
B) Details of establishment of vigil mechanism for directors and employees:
The Whistle blower policy of the Company was formulated and policy is available in thecompany's website i.e. www.bilenergy.com.
C) Nomination and Remuneration Committee:
The Company has adopted policy formulated by nomination and remuneration committee forappointment of Key Managerial personal.
17. Managerial Remuneration:
A) There is no employee covered pursuant to 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014
B) There is no director who is in receipt of any commission from the company and who isa Managing Director or Whole-time Director of the Company shall receive any remunerationor commission from any Holding Company or Subsidiary Company of such Company subject toits disclosure by the Company in the Board's Report.
C) There is no such events occurs which require disclosures in the Board of Director'sreport under the heading "Corporate Governance" relating to the financialstatement:
i. all elements of remuneration package such as salary benefits bonuses stockoptions pension etc. of all the directors;
ii. details of fixed component and performance linked incentives along with theperformance criteria;
iii. service contracts notice period severance fees;
iv. stock option details if any and whether the same has been issued at a discount aswell as the period over which accrued and over which exercisable.
18. Details of Subsidiary/ JV/ Associate Companies: The Company has no Subsidiary/JV/ Associate Companies during the year.
A. The details relating to deposits covered under Chapter V of the Act-
a) accepted during the year: NIL;
b) remained unpaid or unclaimed as at the end of the year: NIL;
c) whether there has been any default in repayment of deposits or payment of interestthereon during the year and if so number of such cases and the total amount involved-
i. at the beginning of the year: NIL;
ii. maximum during the year: NIL;
iii. at the end of the year: Nil;
B. The details of deposits which are not in compliance with the requirements of ChapterV of the Act:: NIL;
20. 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
21. Auditors: M/s. Bansal Bansal & Co Chartered Accountants who are theStatutory Auditors of the Company hold office till the conclusion of the forthcoming AGMand are eligible for re-appointment. Pursuant to the provisions of section 139 of theCompanies Act 2013 and the Rules framed there under it is proposed to appoint M/s.Bansal Bansal & Co as statutory auditors of the Company from the conclusion of theSeventh Annual General Meeting (AGM) till the conclusion of Eighth Annual General Meeting(AGM).
The Company has received a Certificate from them that their re-appointment if madewould be within the limits and that they are not disqualified for such an appointmentunder the Companies Act 2013. Their reappointment is recommended by the board.
22. Brief description of the Company's working during the year: The Company hasonly one Manufacturing unit at wada.
23. Details in respect of adequacy of internal financial controls with reference to theFinancial Statements: The Company has adequate internal financial control withreference to the financial statement as all the works relating to financial statement isdone from the corporate office of the Company. If any deviation noticed related to salesand purchase it would be rectified immediately.
24. Share Capital
A) Issue of equity shares with differential rights: No Equity Shares withdifferential rights were issued during the financial year 2015-16 as provided in rule 4(4) of Companies (Share Capital and Debentures) Rules 2014.
B) Issue of sweat equity shares: No Sweat Equity Shares were issued during thefinancial year 2015-16 as provided in rule 8 (13) of Companies (Share Capital andDebentures) Rules 2014.
C) Issue of employee stock options: No employee stock options were issued duringthe financial year 2015-16 as provided in rule 12 (9) of Companies (Share Capital andDebentures) Rules 2014.
D) Provision of money by company for purchase of its own shares by employees or bytrustees for the benefit of employees:
There is no such provision is made for the relevant financial year as provided in rule16 (4) of Companies (Share Capital and Debentures) Rules 2014.
25. Secretarial Audit Report: A Secretarial Audit Report given by M/s. BhuwneshBansal & Associates a company secretary in practice shall be annexed with the report.(Annexure 4)
26. Management's Discussion and Analysis Report: A detailed review of theoperations performance and future outlook of the Company and its businesses is given inthe Management's Discussion and Analysis Report which forms part of this Report.(Annexure 5)
27. Corporate Governance: We adhere to the principal of Corporate Governancemandated by the Securities and Exchange Board of India (SEBI) and have implemented all theprescribed stipulations. As required by Regulation 27 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a detailed report on Corporate Governanceforms part of this Report. The Auditors' Certificate on compliance with CorporateGovernance requirements by the Company is attached with the Corporate Governance Report.(Annexure 6).
28. Tax Provisions: The Company has made adequate provisions as required under theprovisions of Income Tax Act 1961 as well as other relevant laws governing taxation onthe company.
Your Directors would like to express their sincere appreciation for the assistance andco operation received from the financial institutions banks Government authoritiescustomers vendors and members during the year under review. Your Directors also wish toplace on record their deep sense of appreciation for the committed services by theCompany's executives staff and workers.
| ||On behalf of the Board of Directors |
| ||For Bil Energy Systems Limited |
| ||Chandrashekhar Trivedi |
| ||DIN: 00135114 |
|Mumbai 30th May 2016 ||Chairman |