Your Directors are pleased to present their report and financial statements for theyear ended 31st March 2019.
|Particulars ||2018-19 ||2017-18 |
|Operating Revenue ||8244.88 ||4985.80 |
|Add: Other Incomes ||88.79 ||77.79 |
|Total Income ||8333.67 ||5063.59 |
|Less Total Expenses ||7326.04 ||4533.78 |
|Profit Before Tax ||1007.64 ||572.61 |
|Less Tax Expense ||303.27 ||165.30 |
|Profit After Tax ||704.37 ||407.31 |
|Opening Balance in ||2335.31 ||1928.00 |
|Retained Earnings || || |
|Amount available for appropriation ||3039.69 ||2335.31 |
|Key Ratios || || |
|Earnings per share ( ) ||4.21 ||3.25 |
|Dividend per share ( ) ||0.60 ||Nil |
Total Operating Revenue for the year increased by 65.37%.
Your Company has been able to register CAGR of 55.13% in the Operating Revenueduring the last three years. This has been made possible because of the extreme hard workdedication and sincerity of the Company's work force and efficient completion of RailwayElectrification Projects.
PAT for the year increased by 74%.
Your Company has been able to achieve extraordinary growth in all the earningparameters during the last three years such as EBIDTA on Sales(CAGR-80.34%) andPAT on Sales(CAGR 135.31%). This has been made possible through the policy ofcomplete focus on the Company's core competency.
The Board has recommended a dividend of0.60 per share subject to approval ofshareholders. The outflow on account of dividend if approved would be100.34 lacs andthat on account of Dividend Distribution Tax would be20.63 lacs thus aggregating to anamount of120.97 lacs.
Contribution to Exchequer
Your Company over the years has been making significant contribution in the formvarious taxes. During the year 2018-19 the Company through its business enabled taxcollections at Central and State level close to1330 Lacs in aggregate.
Management Discussion & Analysis
Review of Economic Scenario and outlook
India's economy in 2018 gained momentum as a result of the stabilization of Goods andServices Tax (GST).
The year 2018-19 witnessed quick recovery and India's growth accelerated to anestimated 7.3 per cent for 2018 - 19. The economy regained after a temporary slowdown dueto demonetisation and the implementation of GST. Economic activity continued to recoverwith strong domestic demand and increase in consumption remained a major contributor tothis growth. India emerged as the fastest growing major world economy in 2018 despiteincreased global headwinds such as rising oil prices escalated trade wars between globalpartners and the US monetary shutdown.
During the year 2018-19 India made some important strides. It climbed another 23points in the World Bank's ease of doing business index to the 77th position for thefirst time.
In order to cater to the ever increasing consumption in the Indian Economy because ofthe inclusive nature of growth experienced in the last few years the leadership of theCountry has realised that the transportation sector has to be strengthened keeping in mindthe dependence of the country on imported fossil fuels. As a result Electrification ofIndian Railways has been able to attract top priority from the Government because of itsdirect and indirect benefits for the country. As a result the sector has been able toachieve stupendous growth in getting new routes electrified. Further the Government hasalso set a target of converting the Indian Railways into a 100% electrified service. Theresults of the Government's plans have started getting noticed which can be easilyunderstood from the following data from the Central Organisation for RailwayElectrification (CORE).
Growth in Electrification of routes in terms of Route Kilo meters (RKM) increased from1004 RKM in FY 2016-17 to 3155 RKM in 2017-18. The target for FY 2018-19 has been set at6000 RKM.
The Indian Railways has adopted a holistic approach for reaping the benefits fromelectrification. Alongside setting targets for Route Lengths to be electrified theRailways have also started converting its diesel loco fleet to electric locos. A beginningon this front has been made at Varanasi.
In keeping with the Indian Railways' Mission of 100 per cent electrification andde-carbonization agenda Diesel Locomotive Works Varanasi has developed a new prototypeelectric locomotive converted from diesel locomotive. After its mandatory trials thelocomotive was launched from Varanasi to Ludhiana.
This step of the Railways will help the country in saving precious foreign exchange intwo ways. The requirement of fossil fuels for ignition of the Diesel Locos would come downand the cost of manufacturing fully new electric locos can be effectively reduced becauseof comparatively lower investments in converting diesel to electric. Further since theprocess would be indigenous the country would also register substantial savings inforeign exchange.
Opportunities and Risks
Central Organisation for Railway Electrification (CORE) was set up in 1979 underMinistry of Railways with the prime objective of electrification of railway tracks underthe Indian Railways. Almost 40 years since its inception; the organization is marchingahead in the field of electrification by contributing 43.47% of total electrified sectionsof Indian Railway.
A lot of emphasis is given to Railway Electrification in recent years with a view toreduce the Nation's dependence on imported petroleum based energy and to enhance thecountry's energy security with a vision of providing eco-friendly faster and energyefficient mode of transportation. During the last five years total 204 electrificationprojects consisting of 30964 RKM have been sanctioned by Government of India and keepingin mind the huge cost savings and considerable reduction in carbon foot print IndianRailway has identified electrification of all BG routes as a mission area.
Total 38000 RKM has been identified for electrification of BG network by 2021.
As per a study total greenhouse gases emission from electric traction will become lessthan the diesel traction from 2020-21 onwards.
A blue print has been prepared by Indian Railways to electrify network with anestimated annual saving of the order of savings of Rs. 13500 crore post 100%electrification. As per the analysis approximately 5.5 lakh man years will be generatedduring execution period of Mission Electrification. It has been established that electrictrains have several advantages over diesel-powered ones. These advantages include
Reduced dependence on imported petroleum based fuels.
It provides energy efficient friendly mode of transports besides improving thesystem throughput.
Faster and environment friendly.
Reduced line hauls cost.
Increased sectional capacity by about 18% due to higher average speeds.
Reduced capital operating and maintenance costs.
Offers regenerative braking resulting in saving of energy by around 20% inlocomotives and around 30% in electric multiple units.
A Study by CORE has estimated that with 100% electrification of Indian Railways acumulative saving of81000 crores would be realised by 2027.
Aided by the Government policy and initiatives your Company foresees a very brightfuture for organisations which are providing dedicated services for the RailwayElectrification Eco System.
BCPL because of its focus on Railway Electrification has been able to carve a niche foritself in the field whereby it has become a highly acceptable partner for the Railways.
Your Company has a success record of more than 50% in the tenders that it participatesin. This has been possible because of the Company's focus on efficient execution.
Your Company is constantly directing its efforts towards efficiency enhancement in allfronts starting from administrative office to project locations.
Your Company has also started various programmes for training the work force inachieving improvements in micro level efficiency through training and workshops.
Your Company also encourages leadership skills amongst its employees which has helpedmaintaining a loyal and efficient work force.
Your Company has as a policy always strived to ensure safety and security of its workforce. With a view to achieve this your Company constantly organises training programmesfor educating about the ways and means of working under strict safe conditions. YourCompany procures the best safety gears comprising of helmets safety belts and undertakesregular safety checks to ensure that the rules are followed. The Company has a dedicatedsafety officer to ensure compliance of the rules.
Your Company is aware about its responsibility in terms of delivery of safe RailwayElectrification Eco System for the safety of lives and property that use the services ofthe Railways for meeting their transport requirements.
With a view to achieving the best standards in its construction efforts the Company hasin place a system of checks and balances whereby the work performed by its employees isthoroughly checked by trained engineers in terms of safety standards set by the RailwayAdministration.
Further your Company has a system of identifying its vendors based on their credibilityin terms of delivering quality products within committed time.
Your Company depends on vendors approved by RESEARCH DESIGNS & STANDARDSORGANISATION (RDSO) for procuring equipment required in execution of projects. Consideringthe ambitious plans of the Government towards Railway Electrification timely procurementmay play out as a considerable risk in future. In order to mitigate the risk your Companyis constantly developing new vendor base so that any challenge on this front can beeffectively dealt with in case an occasion for scarcity of supply of equipment arises.
The aim of your Company is to develop business while improving its environmentalperformance in order to create a more sustainable future. In order to achieve this yourCompany continues to focus on measures for the conservation and optimal utilization ofenergy in all the areas of its operations. Work Sites are encouraged to consistentlyimprove operational efficiencies minimize consumption of natural resources and reducewater energy consumption and carbon emissions while maximizing productivity.
Health of Employees
Your Company recognises the importance of maintaining health of its employees who workaway from home for considerable period of time. With a view to providing the best medicalfacilities to its employees whenever required your Company has tied up with MedicalInsurance provider for its employees to avail the best medical attention without worryingabout the cost.
Statements in this Report particularly those which relate to Management Discussion andAnalysis describing the Company's objectives projections estimates and expectations mayconstitute forward looking statements' within the meaning of applicable laws andregulations. Actual results might differ materially from those either expressed or impliedin the statement depending on the circumstances.
Directors' Responsibility Statement
The Directors state that:
i. in the preparation of the annual accounts the applicable accounting standards havebeen followed and no material departures were made from the same; ii. they have selectedsuch accounting policies and applied them consistently and made judgments and estimatesthat are reasonable and prudent so as to give a true and fair view of the state of affairsof the Company at the end of the financial year and of the profits of the Company for thatperiod; BCPL ANNUAL REPORT 2018-19 - 13 iii. they have taken proper and sufficientcare for the maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding the assets of the Company and for preventing and detectingfraud and other irregularities; iv. they have prepared the Annual Accounts on a goingconcern basis; v. they have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and vi. they have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
In terms of Regulation 34 of the Securities Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 (hereinafter "ListingRegulations") a Report on Corporate Governance along with Compliance Certificateissued by Statutory Auditors of the Company is attached as Annexure - 5 and forms integralpart of this Report (hereinafter "Corporate Governance Report").
Directors and Key Managerial Personnel
Mr Aparesh Nandi retires by rotation and being eligible offers himself forre-appointment.
Mr Aparesh Nandi is a graduate from Calcutta University and a promoter and Chairman ofthe Company. He has considerable experience in Electrification and other allied works.
Structure of the Board of Directors
|Name of Director ||Executive/ Non-Executive ||Independent ||Lady |
|Aparesh Nandi ||Non-Executive ||No ||No |
|Jayanta Kumar Ghosh ||Executive ||No ||No |
|Uday Narayan Singh ||Executive ||No ||No |
|Vijay Mehta ||Non-Executive ||Yes ||No |
|Sanghamitra Mukherjee ||Non-Executive ||Yes ||Yes |
|Swapan Kumar Chakraborty ||Non-Executive ||Yes ||No |
The following are the independent directors of the Company:
1. Mr Vijay Mehta
2. Dr Sanghamitra Mukherjee
3. Mr Swapan Kumar Chakraborty
The Company has received declarations from all Independent Directors confirming thatthey meet the criteria for independence in the required format under the Companies Act2013.
The Company arranges detailed presentation on various business aspects to ensurefamiliarising the Independent directors about the different aspects of the prevailingbusiness environment economy performance of the Company and its strategies.
Creating shared value is your Company's fundamental way of working and contributing tosociety while ensuring long-term business success. Your Company has been conductingbusiness in a way that delivers long-term shareholder value and benefits to society.
M/s. Jain Seth & Co. Chartered Accountants was appointed as Statutory Auditors ofthe Company in the AGM held on 30th September 2014 for a period of 5 years till2018-19. The Board of Directors has recommended Jain Seth
& Co. Chartered Accountants to be appointed as Statutory Auditors of the Companyfor a period of 5 years with effect 28th June 2019 consent of which is beingsought from the members of the Company at the ensuing AGM.
Further the report of the Statutory Auditors M/s. Jain Seth & Co. alongwith notesto Schedules is enclosed to this report. The observations made in the Auditors' Report areself-explanatory and therefore do not call for any further comments.
The Auditors have highlighted through reporting under Key Audit Matters the Company'sstanding with regard to Contracts under Joint Venture with EMC Ltd. because of theInsolvency of EMC Ltd. In this regard the Board would like to assure that your Companywould be able to get the projects completed and the amounts recoverable by your Companywould not be jeopardised. The Board anticipates that the works would be fully concludedwithin the next 8 months.
With regard to the issue of non preparation of accounts of the Joint Ventures for theFY 2018-19 the Board has analysed the matter and does not foresee any material impact onthe finances of the Company once the accounts are available.
With regard to write backs of Rs. 1.50 crores also highlighted by the Auditors underKey Audit Matters the Board is convinced about the action taken by your Company keepingin mind the failure of the clients to enable your Company to execute the works.
The Auditors have also brought to light through their reporting on Other Matters thedisputed Tax Demands amounting to Rs. 41432687. In this regard the Board hasconsidered the merits of the issues and does not foresee any outflow on account of thedisputed demands.
Cost Accounts and Cost Auditors
Cost audit applicability provisions are contained under rule 4 of the Companies (CostRecords and Audit) Rules 2014 are not applicable to the Company. Hence no cost accountsare required to be maintained nor Cost Auditors are required to be appointed by theCompany.
Secretarial Auditors and Secretarial Standards
Mr Arvind Bajpai Practising Company Secretaries have been appointed as theSecretarial Auditor of the Company with effect from 22nd January 2019.
Further the report of the Secretarial Auditor is enclosed to this report and formspart of this report.
Meetings of the Board
During the year 2018 the Board of Directors met 8 (Eight) times. For details of themeetings of the Board of Directors please refer to the Corporate Governance Report.
Extract of Annual Return
The extract of annual return in Form MGT 9 as required under Section 92(3) of theCompanies
Act 2013 and Rule 12 of the Companies (Management and Administration) Rules 2014 isAnnexed as Annexure 1.
Details of Loans and Investments
Details of the loans given by your Company under Section 186 of the Act during thefinancial year ended 31st March 2019 are as follows:
Doharia Ispat Pvt. Ltd. Non Related Party Loan Given50 Lacs at 12% p.a.interest for general business purpose. Loan outstanding as at 31st March 201951.85 Lacs
SMTC Steel & Power Pvt. Ltd. Non Related Party Loan Given40 Lacs at12% p.a. interest for general business purpose. Loan outstanding as at 31stMarch 2019 40.00 Lacs
Trident Texofab Ltd. Non Related Party Loan Given100 Lacs at 12% p.a.interest for general business purpose. Loan outstanding as at 31st March 2019104.04 Lacs
Phoenix Overseas Limited Related Company with common promoters Guarantee Given against loan from Bank of India amounting to66.80 Crores.
Related Party Transactions
Members may refer to note no. 26 to the financial statement which sets out relatedparty disclosures.
The Management of the Company endeavours to identify elements of risk in differentareas of operations and to develop mechanism for initiating actions required to mitigatethe risks.
The Management on a timely basis informs the Board about risks that may threaten theexistence of the Company and also about measures that they propose to take in order tomitigate the risks.
Your Company has not accepted any Public Deposits under Chapter V of the Companies Act2013.
Significant and Material orders passed by the Regulators/Courts/ Tribunals
No significant or material orders were passed by the Regulators or Courts or Tribunalswhich impacts the going concern status and Company's operations in future.
Internal Financial Controls and their adequacy
The Directors had laid down internal financial controls to be followed by your Companyand such policies and procedures adopted by your Company for ensuring the orderly andefficient conduct of its business including adherence to your Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information. The Audit Committee evaluates the internal financialcontrol system periodically.
During the year under review the Audit Committee comprised Independent Directorsnamely Mr. Vijay Mehta (Chairman) Mr. Swapan Kumar Chakraborty (Member) and Mr. UdayNarayan Singh Executive Director cum CFO. Powers and role of the Audit Committee areincluded in Corporate Governance Report. All the recommendations made by the AuditCommittee were accepted by the Board of Directors.
The Vigil Mechanism of your Company is governed by the document "Whistle BlowerPolicy & Vigil Mechanism". The said mechanism is available to the directorsand employees who can report to the Company Secretary on a confidential basis anypractices or actions believed to be inappropriate or illegal.
The Mechanism provides for adequate safeguards against victimization of director(s)/employee(s) who avail of the mechanism and also provides for direct access to the Chairmanof the Audit Committee in exceptional cases.
Information regarding Conservation of Energy Technology Absorption and ForeignExchange Earnings and Outgo
The Company's activities during the year do not entail disclosure with respect toconservation of energy technology absorption etc. in accordance with the provisions ofSection 134(3)(m) of the Company Act 2013.
The Company does not have any foreign exchange earning and outgo.
Information regarding Employees and related disclosures
Your Company considers people as its biggest assets and Believing in People' isat the heart of its human resource strategy. Concerted efforts have been put in talentmanagement and strong performance management and learning and training initiatives toensure that your Company consistently develops inspiring strong and credible leadership.Your Company also organises employee felicitation events wherein well performing employeesare rewarded.
The statement of Disclosure of Remuneration under Section 197 of the Act and Rule 5(1)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014("Rules") is appended as Annexure 6 to the Report. The information asper Rule 5(2) of the Rules forms part of this Report.
Ratio of remuneration of Director/ KMP to the median of the employees:
|Name of Director /KMP ||Remuneration ||Ratio as to that of the median employe e ||Percen tage increas e in remun eratio n |
|Mr Jayanta Kumar Ghosh ||3651712 ||10.26:1 ||38.56 |
|Mr Uday Narayan Singh ||3035712 ||8.53:1 ||NA |
|Mr Debasis Sircar ||1460810 ||4.10:1 ||NA |
|Ms Devshree Sinha ||704166 ||1.98:1 ||NA |
Note: The median employee remuneration for 2018-19 is Rs 356002/-.
Your Company has been able to operate efficiently because of the culture ofprofessionalism creativity integrity and continuous improvement in all functions andareas as well as the efficient utilization of the Company's resources for sustainable andprofitable growth.
The Directors hereby wish to place on record their appreciation for the efficient andloyal services rendered by each and every employee without whose whole-hearted effortsthe overall satisfactory performance would not have been possible. Your Directors lookforward to the long term future with confidence.
Your Company continued to receive co-operation and unstinted support from the RailwaysSuppliers and others associated with the Company as its business partners. The Directorswish to place on record their appreciation for the same and your Company will continue inits endeavour to build and nurture strong links with concerned parties based onmutuality respect and co-operation with each other and consistent with National interest.
On behalf of the Board of Directors
Jayanta Kumar Ghosh Managing Director
Uday Narayan Singh Executive Director & CFO
Date 10/05/2019 Place Kolkata