On behalf of the Board of Directors it is our pleasure to present the 70th AnnualReport together with the Audited Statement of Accounts of Bright Brothers Limited("the Company") for the year ended 31st March 2017.
(Rs. in Lakhs)
|Particulars ||Year Ended 31st March 2017 ||Year Ended 31st March 2016 |
|Net Sales and Operating Income ||18353.47 ||15441.56 |
|Less: Expenses ||17581.79 ||15262.53 |
|Operating Profit ||771.68 ||179.03 |
|Add: Other Income ||176.62 ||137.91 |
|Financial Costs ||448.18 ||405.90 |
|Depreciation ||485.80 ||498.20 |
|Profit/(loss) before tax ||14.32 ||(587.16) |
|Less: Tax Related to Earlier Years ||2.06 ||1.89 |
|Profit/(loss) after tax ||12.26 ||(589.05) |
|Balance Profit of previous year ||403.06 ||1128.84 |
|Distributable profit ||415.32 ||539.79 |
|APPROPRIATIONS: || || |
|Proposed Dividend ||113.60 ||113.60 |
|Tax on Dividend ||23.13 ||23.13 |
|Balance Carried to Balance Sheet ||278.59 ||403.06 |
Summary of Operations:
The total operational income for the year ended 31st March 2017 stood at Rs. 18353.47lakhs as against Rs. 15441.56 lakhs in the previous year resulting in an increase of Rs.2911.91 lakhs as compared to the previous year.
The Operating Profit before Depreciation Finance Cost and Tax for the year ended 31stMarch 2017 amounted to Rs. 771.68 lakhs as against Rs. 179.03 lakhs in the previous year.
The Year in Retrospect
In 2016 global growth is projected to slow to 3.1% which reflects a more subduedoutlook for advanced economies following the U.K. vote in favour of leaving the EuropeanUnion (Brexit) and weaker than expected growth in United States. These developments haveput a downward pressure on global interest rates and hence monetary policy is nowexpected to remain accommodative for some time. The Government of India announceddemonetisation of high denomination bank notes of Rs. 1000 and Rs. 500 with effect on8th November 2016 in order to eliminate black money and the growing menace of fakeIndian currency notes thereby creating opportunities for improvement in economic growth.GDP figures for Q3 FY 2016 astonished on the upside showing no significant slowdown fromthe governments demonetization. The data for the fourth quarter is positive:industrial production rebounded in January and the PMIs rose in February. Indian marketsrecorded a modest growth of 1.95 to 3 per cent (Sensex was up by 1.95 per cent while Niftywas higher by 3 per cent) for the calendar year 2016 as compared to losses registered in2015. For the first time since the meltdown of 2008 Net Foreign Portfolio Investments(FPI) have turned negative led by an increase in the US Fed rate by the Federal Reserveleading to outflows from several emerging market economies.
Outlook for the current year
Global economic activity is picking up with a long-awaited cyclical recovery ininvestment manufacturing and trade. World growth is expected to rise from 3.1 percent in2016 to 3.5 percent in 2017 and 3.6 percent in 2018. Stronger activity expectations ofmore robust global demand reduced deflationary pressures and optimistic financial marketsare all upside developments. But structural impediments to a stronger recovery and abalance of risks that remains tilted to the downside especially over the medium termremain important challenges. Overall there is a need for credible strategies in advancedeconomies emerging markets and developing ones to tackle a number of common challenges inan integrated global economy.
Numerous foreign companies are setting up their facilities in India on account ofvarious government initiatives which aim to boost the manufacturing sector of the Indianeconomy to increase the purchasing power of the average Indian consumer which wouldfurther boost demand and hence spur development in addition to benefiting investors. TheGovernment of India under the Make in India initiative is trying to give a boost to thecontribution made by the manufacturing sector and aims to take it up to 25 per cent of theGDP from the current 17 per cent. Industrial production growth lost steam in April and thePMIs pointed in different directions in May. However household consumption is on the mendas the impact of demonetization fades and a healthy monsoon is seen supporting ruralspending. The sweeping GST reform appears set to be rolled out on 1st Julysimplifying Indias array of indirect taxes to four rates 5% 12% 18% and28%. While the reform is seen largely as positive in the long run it is uncertain if manyfirms in the country are prepared for the transition and the implementation could disruptactivity temporarily.
Your Company has aimed at increasing capacity to cater to the customer demand and ismaking sustained efforts to utilize the increased capacity and improve sales which isexpected to give better result in the year 2017-18.
Material changes and commitments if any affecting the financial position of theCompany which have occurred between the end of the financial year till the date of report.
There is no material event that has occurred from the end of the financial year tillthe date of the Directors Report.
Dividend and Reserves:
Your Directors are pleased to recommend a dividend of Rs. 2 per Equity Share on5680235 Equity Shares of Rs. 10 each for the financial year ended 31st March 2017. Thesaid dividend if approved by the members would involve a cash outflow Rs. 136.73 lakhscomprising of Rs. 113.60 lakhs as dividend and Rs. 23.13 lakhs as tax on dividend.
The dividend will be paid subject to the approval of shareholders at the forthcomingAnnual General Meeting to those shareholders whose names appear on the Register of Membersof the Company as on the specified date. During the year under review no amount wastransferred to General Reserves.
The paid up Equity Share Capital as on 31st March 2017 was Rs. 567.60 lakhs. Duringthe year the Company has not issued any shares.
Loans guarantees or investments:
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes accompanying the financialstatements.
Your Company has not accepted any deposits from public. However the Company hasdeposits accepted from its members.
There has been no deposit which was unpaid or unclaimed as at the end of the year.
There has not been any default in repayment of deposits or payment of interest thereonduring the year. The Company is holding deposits of Rs. 13580000/- accepted frommembers as at the end of the year.
Related party transactions:
All transactions entered with related parties for the year under review were onarms length basis and in the ordinary course of business and the provisions ofSection 188 of the Companies Act 2013 are not attracted. Thus disclosure in AOC-2 is notrequired. Further there are no material related party transactions during the year underreview with the Promoters Directors and Key Managerial Personnel. All Related PartyTransactions are placed before the Audit Committee as also before the Board for approval.Omnibus approval was obtained for transactions which are repetitive in nature. A statementgiving details of all the transactions entered into pursuant to omnibus approval areplaced before the Audit Committee and Board for a review.
The policy on Related Party Transactions as approved by the Board of Directors has beenuploaded on the website of the Company. None of the Directors has any pecuniaryrelationships or transactions vis-a vis the Company.
All the assets of the Company are fully insured against major risks.
Internal financial controls:
The internal financial controls with reference to the Financial Statements arecommensurate with the size and nature of business of the Company.
Significant and material orders passed by the Regulators:
During the year under review no significant and material orders were passed by theRegulators or Courts or Tribunals impacting the going concern status and Companysoperations.
Directors Responsibility Statement:
Pursuant to the requirement of clause (c) of sub-section (3) of Section 134 of theCompanies Act 2013 your Directors confirm that:
(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
(b) the Directors have 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 have 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 have prepared the annual accounts on a going concern basis;
(e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively;
(f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Management Discussion and Analysis:
Management Discussion and Analysis of the financial conditions and result of operationsof the Company for the period under review as required under Regulation 34(2)(e) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 is given in a separatestatement in the Annual Report as Annexure I.
A separate report on Corporate Governance is set out in Annexure II.
Extract of Annual Return:
Pursuant to Section 92(3) of the Companies Act 2013 and Rule 12(1) of the Companies(Management and Administration) Rules 2014 an extract of the annual return in the formof MGT - 9 is annexed as Annexure III.
Meetings of the Board and its Committees:
The details of the Board meetings and various Committee meetings have been mentioned inthe Report of Corporate Governance annexed as Annexure II.
Report of the Statutory Auditors and Notes to Financial Statements:
In the 67th Annual General Meeting held on 4th September 2014 M/s. Desai Saksena& Associates Chartered Accountants have been appointed as Statutory Auditors of theCompany from the conclusion of the 67th Annual General Meeting till the conclusion of the70th Annual General Meeting. Your Board intends to re-appoint M/s. Desai Saksena &Associates Chartered Accountants for a further term of 5 years from the conclusionof this Annual General Meeting till the conclusion of 75th Annual General Meeting subjectto ratification of their appointment at every Annual General Meeting.
Further the Report of the Statutory Auditors alongwith notes to Schedules is enclosedto this report. The observations made in the Auditors Report are self-explanatoryand therefore do not call for any further comments.
As per the requirement of the Central Government and pursuant to Section 148 of theCompanies Act 2013 read with the Companies (Cost Records and Audit) Rules 2014 asamended from time to time your Company needs to conduct a Cost Audit for the financialyear ending on 31st March 2018. The Board of Directors on recommendation of the AuditCommittee has appointed M/s. S. R. Singh & Co. Cost Accountants as CostAuditor to audit the cost accounts of the Company for the financial year 2017-18 at aremuneration of Rs. 150000/- plus tax as applicable and reimbursement of out of pocketexpenses. As required under Companies Act 2013 a resolution seeking members approvalfor the remuneration payable to the Cost Auditor forms part of the Notice convening AnnualGeneral Meeting.
In terms of Section 204 of the Act and Rules made there under M/s. Kiran Golla &Associates Practicing Company Secretary have been appointed Secretarial Auditor of theCompany. The report of the Secretarial Auditor is enclosed as Annexure IV to this report.
The Report is self-explanatory and does not call for any further comments.
Whistle Blower Policy:
Pursuant to the requirement of the Act the Company has approved its Whistle BlowerPolicy. This is also called a vigil mechanism.
This mechanism enables directors and employees to report concerns about unethicalbehavior actual or suspected fraud or violation of the Companys code ofconduct or ethics policy.
Risk Management Policy:
The Company has developed and implemented the Risk Management Policy.
The Company considers ongoing risk management to be a core component of the managementof the Company and understands that the Companys ability to identify and addressrisk is central to achieving its corporate objectives.
The policy is in compliance with SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and provisions of the Companies Act 2013 which requires the Company tolay down procedures about risk assessment and risk minimization.
Directors and Key Managerial Personnel:
Smt. Hira Bhojwani Whole Time Director of the Company will retire by rotation at theforthcoming Annual General Meeting and being eligible offers herself for re-appointment.
Declaration by Independent Directors:
Mr. K. P. Rao Dr. T. S. Sethurathnam and Mr. Byram Jeejeebhoy are independentDirectors on the Board of your Company. In the opinion of the Board and as confirmed bythese Directors they fulfill the conditions specified in Section 149 of the Act and theRules made thereunder about their status as Independent Directors of the Company.
Companys Policy on Appointment and Remuneration:
The objective of Remuneration Policy is to attract motivate and retain qualified andexpert individuals that the Company needs in order to achieve its strategic andoperational objectives whilst acknowledging the societal context around remuneration andrecognizing interest of stakeholders.
Formal Annual Evaluation by the Board of its own performance and that of its Committeesand individual Directors:
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a structured questionnaire was preparedafter taking into consideration the various aspects of the Boards functioningcomposition of the Board and its Committees culture execution and performance ofspecific duties obligations and governance. Accordingly Board evaluated its ownperformance. The performance evaluation of Independent Directors was also completedconsidering the same criteria. The performance evaluation of the Chairman andNon-independent Directors was carried out by the Independent Directors in their seperatemeeting conducted during the year. The Board of Directors expressed their satisfactionwith the evaluation process.
Transfer of Amounts to Investor Education and Protection Fund:
During the year your Company has transferred funds lying unpaid or unclaimed for aperiod of seven years to the Investor Education and Protection Fund (IEPF).
Pursuant to the provisions of the Investor Education Protection Fund Authority(Accounting Audit Transfer and Refund) Rules 2016 the Company has filed thenecessary form and uploaded the details of unpaid and unclaimed amounts lying withthe Company as on 3rd August 2016 (the date of previous Annual General Meeting)with the Ministry of Corporate Affairs.
Particulars of Employees:
None of the employees of the Company is falling under the criteria of remuneration asset out in Rule 5(2) of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014. Disclosure pertaining to remuneration and other details asrequired under Section 197(12) of the Companies Act 2013 read with Rule 5(1) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are provided in the Annexure forming part of the Annual Report.
Having regard to the provisions of Section 136(1) read with its relevant proviso of theCompanies Act 2013 the Annual Report excluding the aforesaid information is being sentto the members of the Company. The said information is available for inspection at theRegistered Office of the Company during working hours and any member interested inobtaining such information may write to the Company Secretary.
Your Company treats its human resources as one of its most important assets.
Your Company is focused on the promotion of talent internally through job rotation andjob enlargement.
Prevention Prohibition and Redressal of Sexual Harassment at Workplace:
Your Directors state that during the year under review there were no cases filedpursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo:
Information given as required under Section 134 of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014.
A. Conservation of Energy:
Continuous monitoring and awareness amongst employees has helped to avoid wastage ofenergy. Various investments in reducing the consumption of energy has helped the Companyto reduce the overall power consumption.
Continuous study and analysis for energy conservation installation of energy efficientequipments has resulted into lower units of power consumption per kg production offinished products. Energy Conservation measures taken:
Energy efficient pump for cooling tower.
Installation of servo drives in injection moulding machines to reduce powerconsumption.
Replacement of higher HP motor with lower HP motor.
Replacement of CFL with LED lights.
B. Technology Absorption Adaptation and Innovation:
C. Foreign Exchange Earnings and Outgo:
The particulars of foreign exchange utilised during the year are given in Clause a band c of Note No. 35 of Notes accompanying the financial statements.
Your Directors place on record their appreciation for employees at all levels who havecontributed to the growth and performance of your Company.
Your Directors also thank the clients vendors bankers shareholders and advisers ofthe Company for their continued support.
Your Directors also thank the Central and State Government and other statutoryauthorities for their continued support.
| ||For and on behalf of the Board |
| ||BRIGHT BROTHERS LIMITED |
| ||Suresh Bhojwani |
| ||Chairman & Managing Director |
| ||DIN 00032966 |
|Place : Mumbai || |
|Date : 8th May 2017 || |