The Directors take pleasure in presenting the 24th Annual Report along withthe Audited Statement of Accounts for the year ended 31st March 2015 as under:
(Rs. in Lacs)
|Particulars || |
Year Ended 31/03/2015
Year Ended 31/03/2014
|Income from operations || |
|Other Income || |
|Total Expenditure || |
|Interest || |
|Profit before Amortisation Depreciation & Prior Period Adjustment || |
|Depreciation || |
|Provision for Tax Current / Deferred || |
|Net Profit after depreciation and tax || |
|Profit / (Loss) brought forward || |
|Net Profit / (Loss) carried to Balance Sheet || |
The turnover of the company in the year 2014-15 is Rs. 6315.62 Lacs as against Rs.6364.09 Lacs for the previous year 2013-14.
During the current financial year our Company has gain a net profit of Rs. 68.63Lacs as against the loss of Rs. 165.36 Lacs in P.Y. 2013-14 which shows the upwardgrowth in the bottom line of more than 100%. Still at present there have been a number ofexternal factors adversely affecting the performance and profitability of the Company:
1) Pressure on raw material input cost for Phenol Methanol Formaldehyde andMelamine due to rising crude oil prices.
2) Unfavorable exchange rates of US Dollar and EURO
3) Increase in both inward and outward freight costs due to high fuel prices.
In addition to this frequent shortage of raw materials also affected the overallproduction and in turn the anticipated top and bottom line of the Company.
Moreover with the new project of an additional press in the laminate vertical andincreasing the product range and the capacity the company faced several unforeseenbottlenecks in the smooth working of this new expansion. Additional investment had to bemade in large machineries including a boiler phenolic treater etc which consumed timeand increased fixed costs thereby delaying the opportunity to leverage the output and theadded capacity.
Despite the downturn in the economy Bloom Dekor has managed to sustain the top line.
Your Directors have recommended a dividend of Rs. 0.60/- [i.e. 6%] per equityshare on 6850000 equity shares of Rs. 10/ - each fully paid-up for the financialyear ended on 31st March 2015 amounting to Rs. 4932000 Lacs [inclusive ofcorporate dividend tax of Rs. 822000 lacs]. The dividend if declared by theshareholders at the ensuing Annual General Meeting will be paid to those shareholderswhose names stand registered in the Register of Members on July 31 2015. In respect ofshares held in dematerialized form it will be paid to the members whose names arefurnished by the National Securities Depository Limited and the Central DepositoryServices [India] Limited as beneficial owners.
MANAGEMENT DISCUSSION AND ANALYSIS [MDA]:
MDA for the year under review as stipulated under clause 49 of the Listing Agreementis presented in a separate section forming part of this Annual Report.
Industry Overview and Developments:
Globally the decorative laminate industry is projected to have a marginal growth.However the picture appears to becoming better for the coming decade mainly on account ofboom in the real estate markets which has put a high demand for decorative laminate sheetscatering to the interior decoration of the innumerable residential and commercialbuildings sector.
At the same time the Chinese invasion with low prices is adding pressure on the pricerealizations. The contribution of Indian laminate industry to the world demand is stillunder utilized and offers a lot of opportunity for the growth in volume.
OUTLOOK & OPPORTUNITIES:
Bloom has always been a preference amongst the architects and the interior designers the major influencers in the buying decision of the customer. With all bottlenecksremoved Bloom is all geared to introduce its range of 7x3 laminates into the market andis looking at a 15-20% growth notwithstanding the market conditions. Due to booming in thereal estate sector of India Company has captured a good market share in the said areawhich is possible due to good product range and the network of the Company across theglobe. Bloom has great plans to significantly achieve growth with improved margins.
Bloom Doors is on track with its business plan of increasing the network andpenetration into the market by reaching out to the dealer network directly. Authorisedchannel partners are being formed pan India as a part of the business plan along withfranchises given to showcase a gallery of doors that make the convincing process mucheasier. Bloom has started the various mode of advertising to capture the customer andcreate awareness about the value of door in decoration. The product has a guaranteedfuture but is finding resistance due to the price because of high and quality productioncost. This however will be overcome by the increased awareness of good quality doorsamongst the minds of the end customers. Bloom Doors have also found their place online ine-commerce portal of Snapdeal which has helped the company build its brand online. A feworders have been processed through Snapdeal and the feedback has been very encouraging.Except for minor challenges in sourcing man power the road map for Bloom Doors is vividwith a guaranteed product with zero defects and zero maintenance problems.
The company is strategically taking calls to merge teams of both the verticals toincrease the network without increasing the fixed costs significantly. An increased teamof professionals to advice on the financial decisions of foreign exchange fluctuations anda smooth on time outsourced internal audit team to help us receive apt reports to takeinformed decisions about the segment wise performance and profitability.
RISK PERCEPTION AND RISK MANAGEMENT POLICY
Looking at the price movement of world crude oil prices there would be noticeablevariations in prices and supply of various chemicals and raw materials. The weakening ofrupee will prove to be a major setback which will directly affect all raw material pricesin both the Doors and the Laminates division.
However the company is determined and focused to gain momentum in growth and toimprove their profit margins for the coming financial year by dividing the over heads intohigher sales.
For the doors division competition will come in from cheaper doors being marketed byChinese companies and other unorganized flush door manufacturers and not to forget thegrowth of new companies which would be wanting to tap the huge market that exists for theeco-friendly engineered panel doors and designer flush doors. This will induce heavypressure on the cost control during the manufacturing process.
The Company is aware of the risks associated with the business. It regularly analysesand takes corrective actions for managing/ mitigating the same.
The Company has framed a formal Risk Management Framework for risk assessment and riskminimization which is periodically reviewed to ensure smooth operation and effectivemanagement control. The Audit Committee also reviews the adequacy of the risk managementframework of the Company the key risks associated with the business and measure and stepsin place to minimize the same.
SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
There were no incidences of sexual harassment reported during the year under review interms of the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statement.
MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of theCompany which has occurred between the end of financial year of the Company i.e.31stMarch 2015 and the date of Directors Report i.e. 14th July 2015.
Related Party Transactions
All transactions entered by the Company during the financial year with related partieswere in the ordinary course of business and on an arms length basis. The Policy onmateriality of related party transactions and dealing with related party transactions asapproved by the Board may be accessed on the Companys website.
During the year there was no cessation of any of the Director of the Company.
ii. Retirement by rotation:
In accordance with the provisions of section 152 of the Act and in terms of Articlesof Association of the Company Ms. Rupal Gupta [DIN 00012611] will retire byrotation at the ensuing Annual General Meeting and being eligible offer herself forreappointment. The Board recommends her reappointment.
iii. Appointment of Director:
No proposal / nomination have been received / made for the appointment as a Director ofthe Company.
iv. Independent Directors:
The Independent Directors have submitted their declarations of independence asrequired pursuant to the provisions of section 149(7) of the Act stating that they meetthe criteria of independence as provided in section 149.
v. Profile of the Directors seeking appointment / reappointment:
As required under clause 49 of the Listing Agreement particulars of the Directorsretiring by rotation and seeking appointment / reappointment at the ensuing Annual GeneralMeeting is annexed to the notice convening 24th Annual General Meeting.
Mr. Mayur Parikh Chartered Accountant is the Chairman of the Board of Directorsof the Company and also holds the chair as a chairman in the Board Meeting of the Company.
vii. Key Managerial Personnel:
The following persons were designated as Key Managerial Personnel:
1. Dr. Sunil Gupta - Managing Director
2. Mrs. Rupal Gupta - Whole Time Director
3. Mr. Kamlesh Sompura - Chief Financial officer
4. Mr. K. Rajendran - Compliance Officer
Pursuant to the provisions of the Act and Rules made there under and as provided underSchedule IV of the Act and clause 49 of the Listing Agreement the Board has carried outthe annual performance evaluation of itself the Directors individually as well as theevaluation of its committees. The manner in which the evaluation was carried out isprovided in the Corporate Governance Report which is part of this Annual Report.
Committee of Board
Your Company has several Committees which have been established as part of the bestCorporate Governance practices and are in compliance with the requirements of the relevantprovisions of applicable laws and statutes except Nomination and Remuneration Committee.
The Company has following committees of the board
Nomination and Remuneration Committee.
Stakeholders Grievances and Relationship Committee.
Independent Directors Committee.
The Board has on the recommendations of Nomination and Remuneration Committee framed aPolicy on selection and appointment of Directors Senior Management and theirremuneration. The Remuneration Policy is stated in the Corporate Governance Report whichis part of this Annual Report.
Directors Responsibility Statement:
In terms of section 134[c] of the Act your Directors state that:
i. in the preparation of the annual financial statements for the year ended on 31stMarch 2015 applicable accounting standards read with requirements set out under scheduleIII of the Act have been followed along with proper explanation relating to materialdepartures if any
ii. such accounting policies have been selected and applied consistently and judgmentsand estimates made that are reasonable and prudent so as to give a true and fair view ofthe state of affairs of the company as at 31st March 2015 and of the profit of thecompany for the year ended on that date
iii. proper and sufficient care has been taken for maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of thecompany and for prevention and detection of fraud and other irregularities
iv. the annual financial statements are prepared on a going concern basis
v. proper internal financial controls are in place and that the financial controls areadequate and are operating effectively and
vi. the systems to ensure compliance with the provisions of all applicable laws are inplace and are adequate and operating effectively.
INTERNAL CONTROLS & THEIR ADEQUACY:
The Company has established a well-defined process of risk management wherein theidentification analysis and assessment of the various risks measuring of the probableimpact of such risks formulation of risk mitigation strategy and implementation of thesame takes place in a structured manner. Though the various risks associated with thebusiness cannot be eliminated completely all efforts are made to minimize the impact ofsuch risks on the operations of the Company. Necessary internal control systems are alsoput in place by the Company on various activities across the board to ensure that businessoperations are directed towards attaining the stated organizational objectives withoptimum utilization of the resources. Apart from these internal control procedures awell-defined and established system of internal audit is in operation to independentlyreview and strengthen these control measures which is carried out by a reputed firm ofChartered Accountants. The Audit Committee of the Company regularly reviews the reports ofthe internal auditors and recommends actions for further improvement of the internalcontrols.
INTERNAL AUDIT & INSPECTION:
A comprehensive system of internal inspection and audit is in place in the company tomonitor internal control systems. The scope and coverage of the Audit is reviewed fromtime to time to make it more focused and effective. The system of both out-sourcing andin-house audit continued during the year 2014-15.
During the year under review the employee attrition was minimal. The managementcontinues its efforts in imparting professional training to Executives and Staff membersat various levels with the view to upgrade their competence and managerial abilities. TheIndustrial relations in the company continued to be cordial in the year 2014-15.
New focus is being given to improve safety for the workers and improve awareness ofwork place management through training on 5S principles.
The statements and observations made in this analysis are reflective of the collectiveopinion of the company. Wherever possible conservative estimates have been considered.
Certain statements in this section relating to estimates projections and expectationsmay be forward looking within the meaning of applicable laws and regulations. The actualresults could differ marginally from what the directors envisage in terms of the futureperformance and outlook. The factors that may affect the performance of the company willbe changes pertaining to government policies tariff barriers delays in registrationschanges in local and overseas markets and the related factors thereof.
The company has not accepted any deposits from the public hence the directives issuedby the Reserve Bank of India & the Provision of Section 73 to 76 of the Company Act -2013 or any other relevant provisions of the Act and the Rules there under are notapplicable.
A calendar of meetings to be held in a year is decided in advance by the Board andcirculated to the Directors. During the year Six Board and Five Audit Committee Meetingswere convened and held the details of which are provided in the Corporate GovernanceReport forming part of the Directors Report. The gap between two consecutivemeetings was not more than one hundred and twenty days as provided in section 173 of theAct.
Your Company strives to incorporate the appropriate standards for corporate governance.Pursuant to Clause-49 of listing agreement to the Stock Exchange Corporate GovernanceReport and Practicing Company Secretaries on its compliance is annexed and formspart of this report.
The Companys Auditors B.T. Vora & Co. Chartered Accountants Ahmedabad [FirmReg. No. 123652W] have resigned from the position of the statutory auditor of the companydue to their pre-occupation in other commitments. In place of him M/s. Dharmendra Shah& Co. Chartered Accountants [Firm Registration No. [102474W] is to be appointed asthe statutory auditor of the company for the tenure of 5 years from the date of thisAnnual General Meeting subject to approval of the shareholders.
M/s. Dharmendra Shah & Co. Chartered Accountants [Firm Registration No. [102474W]Statutory Auditor of the Company holds office until the conclusion of the ensuing 24thAnnual General Meeting and offers themselves for reappointment. Pursuant to provisions ofsection 139 of the Companies Act 2013 and the Rules made thereunder the Board proposesto reappoint M/s. Dharmendra Shah & Co. Chartered Accountants as Statutory Auditor ofthe Company from the conclusion of the ensuing 24th Annual General Meeting tillthe conclusion of 29th Annual General Meeting. They have furnished acertificate confirming the eligibility under section 141 of the Companies Act 2013 andRules made thereunder.
The Board based on the recommendation of Audit Committee recommends the appointment ofM/s. Dharmendra Shah & Co. Chartered Accountants [Firm Registration No. [102474W]Chartered Accountants as the Statutory Auditor of the Company.
Secretarial Auditor and Secretarial Audit Report:
Pursuant to the provisions of section 204 of the Act and The Companies [Appointment andRemuneration of Managerial Personnel] Rules 2014 the Company has appointed Mr. Anand S.Lavingia - Practicing Company Secretary to undertake Secretarial Audit for the financialyear ended on 31st March 2015. Secretarial Audit Report is attached to this report asAnnexure"A". The Board has duly reviewed the Secretarial AuditorsReport and the observations and comments appearing in the report are self-explanatory anddo not call for any further explanation / clarification by the Board of Directors asprovided under section 134 of the Act.
Corporate Social Responsibility [CSR]:
The provisions related to CSR are not applicable to the company.
Business Risk Management:
A well-defined risk management mechanism covering the risk mapping and trend analysisrisk exposure potential impact and risk mitigation process is in place. The objective ofthe mechanism is to minimize the impact of risks identified and taking advance actions tomitigate it. The mechanism works on the principles of probability of occurrence andimpact if triggered. A detailed exercise is being carried out to identify evaluatemonitor and manage both business and non-business risks..
Managing the Risks of fraud corruption and unethical business practices:
i. Vigil Mechanism / Whistle Blower Policy:
The Company has established vigil mechanism and framed whistle blower policy forDirectors and employees to report concerns about unethical behavior actual or suspectedfraud or violation of Companys Code of Conduct or Ethics Policy.
ii. Code of Conduct:
The company is having its code of conduct to be followed by the Management. The samehave been also published on the website of the company.
Extract of Annual Return:
Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of theCompanies Act 2013 read with Rule 12 of Companies (Management and Administration) Rules2014 the extract of the Annual Return as at 31st March 2015 in Form MGT-9 forms part ofthis Annual Report as Annexure- "B".
Constitution of Audit Committee:
The Board has constituted the Audit Committee which comprises of Mr. Mayur Parikh asthe Chairman and Mr. Ashok Gandhi and Mr. Karan Gupta as the members. More details on theCommittee are given in the Corporate Governance Report.
Particulars of Employees:
There is no employee who fall in the category of the information required under section197 of the Act read with Rule 5 of The Companies [Appointment and Remuneration ofManagerial Personnel] Rules 2014.
Energy Conservation Technology Absorption and Foreign Exchange Earnings and Outgo:
Information on conservation of energy technology absorption foreign exchange earningsand outgo as required to be disclosed under section 134[m] of the Act read with theCompanies [Accounts] Rules 2014 are provided in the Annexure"C" andforms part of this Report.
Your Directors state that the Company has made disclosures in this report for the itemsprescribed in section 134 of the Act and Rule 8 of The Companies [Accounts] Rules 2014to the extent the transactions took place on those items during the year.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of Equity Shares with differential rights as to dividend voting orotherwise.
3. Issue of shares (including sweat equity shares) to employees of the Companyunder any scheme save and ESOS.
4. There is no revision in the Board Report or Financial Statement.
5. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Companys operations in future.
Your Directors wish to place on record their sincere appreciation for significantcontributions made by the employees at all levels through their dedication hard work andcommitment enabling the Company to achieve good performance during the year under review.
Your Directors also take this opportunity to place on record the valuable co-operationand support extended by the banks government business associates and the shareholdersfor their continued confidence reposed in the Company and look forward to having the samesupport in all future endeavors.
| ||For and On behalf of the Board |
| ||Sd/- |
| ||Dr. Sunil Gupta |
|Place : Ahmedabad ||Managing Director |
|Date : July 14 2015 ||DIN: 00012572 |
ANNEXURE TO THE DIRECTORS' REPORT
Information pursuant to the Companies (Disclosure of particulars in the report of Boardof Directors) Rules 1988 as amended.
(1) CONSERVATION OF ENERGY:
The average consumption of Electricity per unit of production has increased to 0.28units from 1.60 per unit of production in the Financial Year 2014-2015.
(2) TECHNOLOGY ABSORPTION: Nil (3) FOREIGN EXCHANGE EARNINGS AND OUTGO:
Total Exchange used and earned.
(Rs. in Lacs)
| || |
|i Foreign Exchange earned including Direct and Indirect exports. || |
|ii Foreign Exchange used || |
FORM - A
FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSUMPTION OF ENERGY:
| || |
|(A) Power and Fuel Consumption || || |
|1) Electricity : || || |
|a) Purchase : || || |
|Units || |
|Total Amount || |
|(Rs. in Lacs) || || |
|Rate/Unit || |
|b) Own Generation || || |
|i. Through Diesel || || |
|Generator Units || |
|Unit per liter of Fuel || |
|(Total Diesel used) || || |
|Cost/Unit ||Rs. 30.52 ||Rs. 26.39 |
|ii. Through Steam || || |
|Generator Units: || |
|Unit per litre of Fuel || || |
|Cost/Unit || || |
|2) Coal : || || |
|Quantity || |
|Total Cost || || |
|Average rate || || |
|3) Lignite : || || |
|Quantity || |
|Total Cost || || |
|Average rate || || |
|4) Fire Wood & Lignite : || || |
|Quantity (in Kgs.) || |
|Total Amount (Rs. in Lacs) || |
|Average rate/Kgs. || |
| || |
|5) Others || || |
|(a) Gas : || || |
|Quantity || || |
|Consumed in M3 || |
|Total Cost || || |
|Rate || || |
|(b) L.P.G. : || || |
|Quantity Consumed || |
|Total Cost || || |
|Rate || || |
(B) Consumption per Unit of Production ELECTRICITY (UNITS/UNIT OF PRODUCTION) FIRE WOOD& LIGNITE
(LTS KGS/UNIT OF PROD.)
FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO ABSORPTION OF TECHNOLOGY RESEARCH& DEVELOPMENT. RESEARCH AND DEVELOPMENT (R&D)
|1. Specific areas in which R & D is carried out by the Company || |
|2. Benefits derived as a result of the above R & D || |
|3. Future plan of action || |
|4. Expenditure on R & D || |
|(a) Capital || |
|(b) Benefits derived as a result of the above R & D || |
|(c) Future plan of action || |
|(d) Total R & D expenditure as a percentage of total turnover adaptation and innovation. || |