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Bedmutha Industries Ltd.

BSE: 533270 Sector: Metals & Mining
NSE: BEDMUTHA ISIN Code: INE844K01012
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OPEN 42.70
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VOLUME 78301
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OPEN 42.70
CLOSE 40.05
VOLUME 78301
52-Week high 43.05
52-Week low 12.14
P/E
Mkt Cap.(Rs cr) 125
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Bedmutha Industries Ltd. (BEDMUTHA) - Director Report

Company director report

BEDMUTHA INDUSTRIES LIMITED

To the Members

BEDMUTHA INDUSTRIES LIMITED

The Board of Directors presents the 30th Annual Report together with theAudited Financial Statements (Standalone and Consolidated) for the Financial Year endedMarch 31 2020.

HIGHLIGHTS OF FINANCIAL PERFORMANCE:

The financial performance of the Company for the Financial Year ended on March 31 2020is summarized as under:

Standalone

Consolidated

Particulars
2019-20 2018-19 2019-20 2018-19
Income from Operations 35978.14 49051.28 36079.68 49114.75
Add : Other Income 2730.81 2908.83 2727.67 2916.58
Profit before Interest Depreciation and Taxes 2608.03 2800.38 2645.71 2855.23
Less : Finance Cost 6433.00 6546.97 6433.37 6548.78
Profit/ (Loss) before Depreciation and Taxes (3824.97) (3746.59) (3787.66) (3693.55)
Less : Depreciation 3308.50 3339.57 3314.74 3348.27
Profit/ (Loss) Before Taxes (7133.46) (7086.17) (7102.40) (7041.82)
Less : Provision for Current Taxation - - 9.38 12.20
Less: Provision for Deferred Taxation - - (1.32) (0.59)
Less: Taxes in respect of earlier years - - - -
Profit/ (Loss) after Taxes (7133.46) (7086.17) (7110.46) (7053.43)
less: Minority Interest - - 9.58 14.81
add: Share in Profit / (Loss) of Associates - - (0.85) 17.88
Profit / (Loss) for the year (7133.46) (7086.17) (7120.88) (7050.37)

SUMMARY OF OPERATIONS/STATE OF THE COMPANY'S AFFAIRS:

During the financial year 2019-20 the Standalone Income from operations of yourCompany decreased by 26.65% from Rs.490.51 Crores to Rs.359.78 Crores. The company hasearned profit of Rs.26.08 crores before interest depreciation and taxes but incurred lossof Rs.71.33 Crores after taxes as compared to the loss of Rs.70.86 crores incurred for theprevious year.

During the financial year 2019-20 the Consolidated Income from operations of yourCompany decreased by 26.54% from Rs.491.15 Crores to Rs.360.80 Crores. The company hasearned profit of Rs.26.45 crores before interest depreciation and taxes but incurred lossof Rs.71.21 Crores after taxes as compared to the loss of Rs.70.50 crores incurred for theprevious year.

FINANCIAL PERFORMANCE OF SUBSIDIARY:

Our Company has one subsidiary i.e. Kamalasha Infrastructure and Engineering PrivateLimited

(CIN: U45200MH2007PTC167532). The financial performance of the subsidiary is as under:

Particulars 2019-20 2018-19
Income from Operations 345.65 3352.66
Add : Other Income (3.14) 7.10
Profit before Interest Depreciation and Taxes 37.67 54.85
Less : Finance Cost 0.37 1.81
Profit/ (Loss) before Depreciation and Taxes 37.31 53.05
Less : Depreciation 8.09 8.70
Profit/ (Loss) Before Taxes 29.22 44.34
Less : Provision for Current Taxation 9.38 12.20
Less: Provision for Deferred Taxation (1.32) (0.59)
Less: Taxes in respect of earlier years - -
Profit/ (Loss) after Taxes 21.16 32.73

During the Financial Year 2019-20 Income from operations of your Company decreased by89.69% from Rs.33.53

Crores to Rs.3.46 Crores. The Company has earned profit of Rs.0.38 crores beforeinterest depreciation and taxes and profit Rs.0.21 Crores after taxes as compared toprevious year profit of Rs.0.53 crores and Rs.0.33 croresrespectively.

Pursuant to restructuring the Board of Directors disinvested the entire investment of542000 Equity Shares in the subsidiary on 22nd September 2020 consequently KamalashaInfrastructure and Engineering Private Limited ceased to be the Company's subsidiary.

CONSOLIDATED FINANCIAL STATEMENTS:

In accordance with the Companies Act 2013 ("the Act") and IND AS 23 onConsolidated Financial Statements read with

IND AS 28 on Investment in Associates and Joint Ventures the audited consolidatedfinancial statement is provided in the Annual Report. The summarized consolidated resultsare given alongside the financial results of your Company.

AMOUNT CARRIED FORWARD TO RESERVES:

Your Company has not transferred any amount to its reserves.

DIVIDEND:

Your Directors do not recommend any dividend for the financial year 2019-20on accountof loss incurred by the company.

BUSINESS REVIEW:

In continuation of Restructuring Process by the Lenders in spite of the lead Bank'sSanction of the Restructuring Plan (RP) other consortium Bank's have awarded Sanction inphased manner out of the Five members banks Sanction from all have been received atdifferent times on account of Covid-19 outbreak. The last sanction came of Andhra Bank(Previously known as Union Bank) came in the month of May 2020 because of the delayedsanction on account of Banks merger and Covid-19 issues at various Consortium Bank theimplementation of RP has been delayed a lot and now expect to implement by December 2020.

In spite of the financialcrunch the Management has tried to maintain the functioningof factory and maintain the EBIDTA to last year level. Further all steps have been takento retain the customer and suppliers credit.

In line with the requirements of the restructuring the Board of Directors has approvedthe following Preferential Issues of Equity & Preference Shares of the Company:

a) Issue of not exceeding in aggregate 6823182 Equity Shares of Rs.10/- each for cash@Rs.55/ per Equity (including a premium of Rs.45/- per Equity Share) aggregating toRs.37527505/- to 3 Corporate belonging to Non-

Promoter category; b) Issue of not exceeding 909091 Equity Shares of Rs. 10/- eachfor cash @ Rs. 55/- per Equity Share a premium of Rs. 45/- per Equity Share) aggregatingto Rs.50000005/- to K.R. Bedmutha Techno Associates

Private Limited Promoter Group category; and c) Issue of not exceeding 2301500 inaggregate 1% Non-Convertible Cumulative Redeemable Preference Shares ("CRPS")having a face value of Rs.10/- each at Rs.1000/- aggregating to Rs. 2301500000/- toPunjab National Bank Bank of Baroda Bank of India Exim Bank and Andhra Bank (now UnionBank) as per the Loan Restructuring scheme.

CHANGES IN THE NATURE OF BUSINESS:

There has been no change(s) of business of the Company or in the nature of businesscarried on by the Company during the financial year under review.

SHARE CAPITAL:

The paid-up Equity Share Capital of the Company as on March 31 2020 wasRs.245316110. The Company has neither issued shares with differential voting rights norgranted stock options or sweat equity.

Considering the proposed increase of the Share Capital of the company the Board hasproposed subject to the approval of the Members of the Company to increase the AuthorisedShare Capital from Rs.300000000/- (Rupees

Thirty Crores only) divided into 30000000 (Three Crores) Equity Shares of Rs.10/-(Rupees Ten only) to Rs.

375000000/- (Rupees Thirty Seven Crores Fifty Lakhs only) divided into 35000000(Three Crores Fifty Lakhs)

Equity Shares of Rs. 10/- (Rupees Ten only) each and 2500000 (Twenty Five Lakhs)Preference Shares of Rs.

10/- (Rupees Ten only) each.

The Board of Directors has also proposed to implement Employee Stock Options Scheme(ESOP) subject to the approval of the Members of the Company at the ensuing AnnualGeneral Meeting

DEPOSITS:

During the year 2019-20 the Company has not accepted any deposit from public withinthe meaning of Section 73 of the Companies Act 2013 read with the Companies (Acceptanceof Deposits) Rules 2014.

INDUSTRY SCENARIO:

Indian metal market growth in 2019 witnessed global macroeconomic and industrialfactors such as trade wars an increase in industry consolidation plant closures andrestricted imports. The industry's main objective remained cost optimization raw materialsustainability and process efficiency.

The Indian Government's flagship programs - Make in India National Capital GoodsPolicy Development of 100 Smart Cities Power for All - are all set to improve metalconsumption within thenextfiveyears. To achieve targeted domestic steel capacity of 300MTPA by 2030 India needs to invest $156.08 billion during the 2030-2031 time period.Industry consolidation is anticipated to support this objective.The Steel Scrap RecyclingPolicy (SSRP) drafted and circulated in July 2019 is intended to facilitate and providea framework for the functioning of metal scrap centers.

India's finishedsteel consumption grew at a CAGR of 5.2 per cent during FY16-FY20 toreach 100 MT. India's crude steel and finished steel production increased to 108.5 MT and101.03 MT in FY20P respectively. Export and import of finished steel stood at 8.24 MT and6.69 MT respectively in FY20P.

But considering the Covid-19 pandemic all over the world the forecast for the metalindustry will certainly affect for the current Financial Year 2020-21.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

The Management Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34(2)(e) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is given in Annexure 1forming part of the Annual Report.

PARTICULARS OF EMPLOYEES:

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 astatement showing the details of top ten employees and the names of other employeesdrawing the remuneration in excess of the limits set out in the said rules are provided inAnnexure 2 of thisBoard's Report.

The Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with

Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 are also provided in Annexure 2 of the Board's Report.

MANAGERIAL REMUNERATION:

In accordance with Section 178 and other applicable provisions if any of theCompanies Act 2013 read with Rule 6 of the Companies (Meetings of Board and its Powers)Rules 2014 issued thereunder and Regulation 19 of the SEBI (LODR) Regulations 2015 theBoard of Directors at their meeting held on February 12 2015 formulated the Nominationand Remuneration Policy of your Company on the recommendations of the Nomination andRemuneration Committee. The salient aspects covered in the Nomination and RemunerationPolicy covering the policy on appointment and remuneration of Directors and other mattershave been outlined in the Corporate Governance Report which forms part of this Report.

The information required under Section 197 of the Companies Act 2013 read with theCompanies (Appointment and

Remuneration of Managerial Personnel) Rules 2014 in respect of Directors/employees ofyour Company is set out in Form MGT – 9 which also forms part of this Report and isalso available on the website of your Company www.bedmutha. com.

SUBSIDIARIES JOINT VENTURE OR ASSOCIATES COMPANIES DURING THE YEAR:

Pursuant to Section 129(3) of the Companies Act 2013 the Balance sheet as on March31 2020 and the Statement of

Profit and Loss for the year ended on that date of Subsidiary CompanyM/s. KamalashaInfrastructure and Engineering

Private Limited is attached to this report. However the financial information ofSubsidiary Company is disclosed in the Annual Report in compliance with this section. Theconsolidated financial statements presented by the Company include the financial result ofits Subsidiary Company.

Pursuant to restructuring the Board of Directors disinvested the entire investment of542000 Equity Shares in the subsidiary on 22nd September 2020 consequently KamalashaInfrastructure and Engineering Private Limited ceased to be the Company's subsidiary.

The company has one associate company named as "Ashoka Pre-con Pvt. Ltd."

The Statement in form AOC-1 containing salient features of the financial statements ofCompany's Subsidiaries and associates is attached as Annexure 3 to the financialstatements of the Company.

In accordance with third proviso of Section 136(1) of the Companies Act 2013 theAnnual Report of the Company containing therein its standalone and the consolidatedfinancial statements has been placed on the website of the

Company. Further as per fourth proviso of the said section audited annual accounts ofeach of the subsidiary company have also been placed on the website of the Companywww.bedmutha.com. Shareholders interested in obtaining a copy of the audited annualaccounts of the subsidiary company may write to the Company Secretary at the Company'sregistered office address.

SIGNIFICANT AND MATERIAL ORDER PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:

During the year under review no order has been passed by the regulators or courts ortribunals against the Company or any Directors Key Managerial Personnel of the Company.

PARTICULARS OF CONTRACTS OR ARRANGMENTS WITH RELATED PARTIES:

All contracts/ arrangements/ transactions entered by the Company during thefinancialyear 2019-20 with related parties are in compliance with the applicableprovisions of the Act Rules issued thereunder and Regulation 23 of the SEBI

(Listing Obligations and Disclosure Requirements) Regulations 2015.

During the year under review the Company had not entered intoanymateriallysignificantrelated party transactions with

Promoters Directors Key Managerial Personnel or other designated persons which mayhave a potential conflict with the interest of the Company at large. None of the Directorshas any pecuniary relationships or transactions vis--vis the Company.

All Related Party Transactions are placed before the Audit Committee and the Board ofDirectors for their approval. The policy on Related Party Transactions as approved by theBoard may be accessed on the Company's website (www. bedmutha.com).

The particulars of contracts or arrangements entered into by the Company with relatedparties are appended in Annexure 4 to the Board's Report.

CORPORATE GOVERNANCE:

The Company is committed to maintain the highest standards of Corporate Governance andadhere to the Corporate

Governance requirements set out by SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. The

Company has also implemented several best Corporate Governance practices as prevalentthroughout the country. The Report on Corporate Governance as stipulated under Regulation34 of SEBI (Listing Obligations and Disclosure

Requirements) Regulations 2015 is presented in a separate section forming part of theAnnual Report. The requisite of the Company confirming compliance with the conditions ofCorporate Governance is certificate attached to the report on Corporate Governance.

BOARD OF DIRECTORS& KEY MANAGERIAL PERSONNEL:

As on March 31 2020 the Company has 5 (Five) Directors consisting of 3 (Three)Independent Directors and 2 (Two) Executive Directors.

Mr. Vijay KachardasVedmutha (DIN:00716056) Managing Director of the Company retiresby rotation at the ensuing Annual General Meeting pursuant to the provisions of theCompanies Act 2013 read with the Companies (Appointment and Qualification of Directors)Rules 2014 and the Articles of Association of the Company and being eligible offeredhimself for re-appointment. Your Directors recommend his re-appointment.

Mr. Shreekrishna Marathe (DIN:08691908) has been appointed as Additional Director(Non-Executive Independent) w.e.f. April 01 2020 who shall hold office upto the date ofensuing Annual General Meeting of the Company and the approval of the Members of theCompany sought in the ensuing General Meeting as an Independent Director of the

Company for a period of 5 (Five) consecutive years not liable to retire by rotationi.e. till March 31 2025.

On the basis of the recommendation of the Nomination and Remuneration Committee and theBoard of Directors members accorded their approval at the 29thAnnual GeneralMeeting of the Company for continuation of appointment of Mr. Vasant Joshi (DIN 07348931)who has attained the age of 80 years the re-appointment of Mr. Narayan M. Kadu (DIN02807124) as an Independent Director of the Company for the second term of 5 (Five)consecutive Years commencing from April 01 2019 to March 31 2024 and for the secondterm of Ms. Vandhana Sonwaney (DIN06955363) as Independent Director(s) of the Company for5 (Five) consecutive Years commencing from December 30 2019 to December 29 2024.

On the basis of the recommendation of the Nomination and Remuneration Committee theBoard of Directors of the Company seeks the appointment of Mr. Vasant Joshi (DIN07348931) as an Independent Director for the second term on the Board of Directors of theCompany with effect from 26th November 2020 till 25th November2025 subject to approval of members at the ensuing Annual General Meeting.

The brief resume of the Director(s) seeking appointment or re-appointment and otherrelated information under Regulation 36 of the SEBI (LODR) Regulations 2015 andSecretarial Standard-2 (SS-2) has been provided in the Notice convening 30thAnnual General Meeting.

Presently Mr. Vijay Vedmutha -Chairman and Managing Director Mr. AjayVedmutha–Managing Director and Chief

Financial Officer Mrs. Vinita Ajay Vedmutha - Chief Executive Officer and Mr. AjayTopale - Company Secretary are the Key Managerial Personnel of your Company in accordancewith the provisions of Sections 2(51) and 203 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

DECLARATION BY INDEPENDENT DIRECTORS:

The Independent Directors of the company are not associated with the Company in anymanner as stipulated under section 149(6) of Companies Act 2013 and at the same timepossess relevant expertise and experience that are additive to the Board of the companyfor delivering higher growth and higher values. Further the Company has receiveddeclarations from all the Independent Directors confirming that they meet the criteria ofIndependence as prescribed under Section 149(6) of the Companies Act 2013 and Regulation16(1)(b) of the SEBI (LODR) Regulations 2015.

ANNUAL EVALUATION OF BOARD'S PERFORMANCE:

According to Regulations 25(3) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a meeting of the Independent Directors is required to beheld to evaluate the performance of the Non-Independent

Directors. Accordingly a meeting of Independent Directors was held on November 122019 wherein the performance of the Non-Independent Directors including the Chairman wasevaluated.

Pursuant to the provisions of the Companies Act 2013 and Regulation 25(4) of SEBI(Listing Obligations and Disclosure

Requirements) 2015 the Board has carried out an annual performance evaluation of itsown performance the Directors individually as well as the evaluation of the working ofthe members of Audit Nomination and Remuneration and other Compliance Committees. Themanner in which the evaluation is carried out has been explained in the CorporateGovernance Report.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS:

Every new Independent Director of the Board attends an orientation program. Tofamiliarize the new Independent Director with the strategy operations and functions ofour Company the Executive Directors/ Senior Managerial Personnel make presentations tothe new Independent Director about the company's strategy operations product and serviceand offerings markets organization structure human resources technology qualityfacilities and risk management.

NUMBER OF BOARD MEETINGS:

The meeting of the Board of Directors was held 4 (Four) times during the Financial Year2019-20 and the intervening gap between any two succeeding meetings was not more than 120days as prescribed under Section 173 of the Companies Act 2013. Your Company has compliedwith the provisions of Chapter XII – Meetings of Board and its Powers of theCompanies Act 2013 with respect to meetings of the Board. The details regarding the Boardmeetings and the attendance of the Directors present in such meetingsare provided in theCorporate Governance report.

COMMITTEES OF THE COMPANY: Audit Committee:

The Board has properly constituted the Audit Committee in compliance with Section 177of Companies Act 2013 and

Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 which consists of the following members' viz.:

Name of Member Designation Category
Mr. Narayan Kadu Chairman Independent Director
Mrs. Vandana Sonwaney Member Independent Director
Mr. Vijay Vedmutha Member Executive Director (Chairman &Managing Director)
Mr. Vasant B. Joshi Member Independent Director
Mr. Shreekrishna Marathe Member Independent Director *

Note: Mr. Shreekrishna Marathe (DIN: 08691908) has been appointed as Member of AuditCommittee w.e.f. June 26 2020.

The details regarding Composition meetings and attendance of the members have beenmentioned in the Corporate Governance Report.

All the recommendations of the Audit Committee during the year were accepted by theBoard of Directors of the Company.

Establishment of Vigil Mechanism / Whistle Blower Policy:

The Company has established a vigil mechanism and oversees through the committee thegenuine concerns expressed by the employees and other Directors. The Company has alsoprovided adequate safeguards against victimization of employees and Directors who expresstheir concerns about unethical practice. Any complainant canhave direct access to theChairman of the Audit Committee via e-mail ID. The Vigil Mechanism Policy of the Companyis placed on Company's website i.e. http://www.bedmutha.com.

Nomination and Remuneration Committee:

The Board of Directors has constituted the Nomination and Remuneration Committee inaccordance with the Companies

Act 2013 and Regulation 19 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 which comprises of the following members viz.:

Name of Member Designation Category
Mr. Narayan Kadu Chairman Independent Director
Mrs. VandanaSonwaney Member Independent Director
Mr. Vasant B. Joshi Member Independent Director

The details regarding composition meeting and attendance of the members have beenmentioned to the Corporate Governance Report.

The Board of Directors re-constituted the Committee with induction of Mr. Marathe as aMember of the Committee with effect from 11th November 2020.

Policy for Selection Appointment and Remuneration of Directors Including Criteria forTheir Performance Evaluation

The Company has adopted a policy titled as "Nomination & RemunerationPolicy" which inter alia includes Company's policy on Board Diversity selectionappointment and remuneration of directors criteria for determining qualificationspositive attributes independence of a director and criteria for performance evaluation ofthe Directors.

The Nomination & Remuneration Policy as approved by the Board is placed on thewebsite of the Company. (www. bedmutha.com)

Stakeholders' Relationship Committee:

The Board of Directors has constituted Stakeholders' Relationship Committee inaccordance of the Companies Act

2013 and Regulation 20 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. The details regarding Composition meeting and attendance of themembers have been mentioned to the Corporate Governance Report.

Corporate Social Responsibility Committee (CSR):

As per Section 135 of the Companies Act 2013 every Company having net worth of Rupeesfive hundred crore or more or turnover of Rupees one thousand crore or more or a netprofit of Rupees five crore or more during any financial year shall constitute the CSRCommittee.

Considering the above threshold limit specified above the Company is not required toconstitute the CSR Committee.

RISK MANAGEMENT POLICY:

The Company has implemented Risk Management Policy and the Board of Directors hasprepared a comprehensive framework of risk management for assessment of risks and todetermine the responses to these risks so as to minimize their adverse impact on theorganization. The policy as approved by the Board of Directors is uploaded on theCompany's website. (www.bedmutha.com) The Company manages monitors and reports on theprincipal risks and uncertainties that can impact its ability to achieve its strategicobjectives. The Company's management systems organizational structures processesstandards code of conduct and behaviors together form the Bedmutha Management System(BMS) that governs how the Group conducts the business of the Company and managesassociated risks.

The Company has introduced several improvements to drive a common integrated view ofrisks optimal risk mitigation responses and efficient management of internal control andassurance activities. This integration is enabled by all three being fully aligned in theCompany wide Risk Management Internal Control and Internal Audit methodologies andprocesses.

Risk & Mitigation:

The Company has identified various risks faced by the Company from different areas. Asrequired under Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Board has adopted a risk management policy whereby a properframework is set up.

Appropriate structures are present so that risks are inherently monitored andcontrolled. A combination of policies and procedures attempts to counter risk as and whenthey evolve.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Your Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weakness in the design or operation was observed. Your Company has introducedseveral improvements such as Integrated Enterprise Risk Management Internal ControlManagement and Assurance Frameworks and processes to drive a common integrated view ofrisks optimal risk mitigation responses and efficient management of internal control andinternal audit activities. Risk management and internal control frameworks are designedand implemented to manage rather than completely eliminated the risk of failure to achievebusiness objectives.

The Company has appointed M/s. Swati Ware & Co. Chartered Accountant as aninternal Auditor to have check on the adequacy of controls in the overall operations andfunctioning of various departments. The monthly reports of the Internal

Auditors are placed before the Audit committee. It is a key component which assists themanagement in discovering controls weakness regulatory violations policy violation andoperational inefficiencies. This self-discovery of issues provides the management anability to take corrective action in order to maintain the safety soundnessprofitability and integrity.

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS HELD BY THE COMPANY UNDER SECTION 186WITH DETAILS:

The loans guarantees and investments covered under section 186 of the Companies Act2013 form part of the notes to the financial statements provided in this Annual Report.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OFFINANCIAL YEAR AND DATE OF REPORT:

There are no material changes and commitments made which may affect financial positionof the Company between the end of financial year and date of report.

STATUTORY AUDITORS:

Mr. A. D. Kulkarni (ICAI Membership No.: 049739) Proprietor of M/s. A. D.Kulkarni& Co. Chartered AccountantsJalgaon (Firm Registration No. 115959) wereappointed as Statutory Auditors of the Company at the Annual General Meeting held onSeptember 25 2017 for a period of five (5) consecutive years commencing from theconclusion of 27thAGM till the conclusion of the 32ndAGM of theCompany.

Ractification Note : The requirement to place the matter relating to appointment ofAuditors for ractification by members of every AGM has been done away by Companies(Amendment) Act 2017 with effect from May 07 2018 Accordingly no resolution is beingproposed for ractification is being proposed for ractification of appoinment of auditorsat the 30 th AGM.

AUDITORS' REPORT:

During the year under review there were no frauds reported by the Auditors to theAudit Committee or the Board under Section 143(12) of the Companies Act 2013.

The Statutory Auditors have expressed qualified opinion in their report for the yearended March 31 2020 in respect of following matters: a) During the quarter in respect ofpreparation of financial statements of the company on going concern basis for the reasonsstated therein during the year the Company has incurred net loss of Rs. 71.33 croresresulting into accumulated losses of Rs. 269.60 crores. The Company's current liabilitiesexceed current assets. These matters require substantial debt reduction in the companyalso additional cash flow is required to fund the operations as well as other obligations.

Management Reply:-

The major loss is incurring due to heavy interest cost and non-utilization of capacityas there is shortage of working capital resulting into current quarter losses.

The company is already in discussion with the lenders for restructuring as per RBIguidelines and one major milestone in restructuring process has been achieved i.e.obtaining RP4 rating from ICRA and CARE rating agencies for the resolution plan submitted.

Till the date of approval of this results major milestone has been achieved as all thebanks in consortium have issued their sanction letter for the restructuring proposal.Hence the company is hopeful of restructuring process to be implemented from the lendersto put the company back on track.

Bank Name Sanction Letter Received Date
Punjab National Bank July 31 2019
Bank Of Baroda March 07 2020
Bank Of India April 08 2020
Exim Bank June 08 2020
Union Bank (Formerly known as Andhra Bank) June 20 2020

Further as stated in our management reply for previous quarter the intention of thecompany is to reduce finance cost by restructuring loan with bankers and bringing fundsfrom investor.

Features of restructuring package will be as follows:-

1) Company is in the process of restructuring its loan from bankers which will resultin loan reduction by Rs.230 crs due to conversion of loan in CRPS.

2) Secondly to improve the liquidity position and capacity utilization / Operations ofthe company company is in the process of raising minimum funds of Rs.42.50 crs fromInvestors or NBFC. This is also a precondition from Bankers to pass the restructuringplan.

3) Also company has decided to sale its non-core assets to improve its liquidity foroperations and also for Debt reduction. Accordingly financial statements have beenprepared on the basis that company is a going concern. b) In respect of investment ofRs.51.21 lakhs in Subsidiary thathavesignificantaccumulated losses as at March 31

2020. In absence of fair valuation of these Investments we are unable to comment uponthe carrying value of these investments and its impact if any.

Management Reply:-

The Company's subsidiary in which 51.21 Lakhs is invested is mainly focusing on 'EPCProjects' business. As Board has decided to go slow on 'EPC Projects' business due toworking capital shortage it is decided to disinvest in this subsidiary for which Board ofDirectors approval and shareholder's approval is already taken in AGM. The Company hasidentified few investor and is hopeful to disinvest soon. Hence carrying value of thisinvestment will be explored in this process. We are hopeful that its impact will not bedetrimental to the Company. Also amount obtained by disinvestment in this subsidiary willimprove the liquidity for working capital of the Company. (The shares in the susbidarycompany disinvested on 22nd september 2020)

INTERNAL AUDITORS:

M/s. Swati Ware & Co. Chartered Accountants is the Internal Auditors of theCompany and their reports are reviewed by the Audit Committee on periodical basis.

COST AUDITORS:

In accordance with the provisions of Section 148 of Companies Act 2013 and theCompanies (Audit and Auditors) Rules 2014 your Company has to appoint cost auditors forconducting the audit of cost records of the applicable products of the Company for thefinancial year. Accordingly during the year your Company has appointed M/s. DeodharJoshi & Associates Cost Accountants (Firm Registration No.: 002146) to conduct thecost audit of the Company for the Financial

Year 2019-20. The ratification of the remuneration payable to the Cost Auditors shallbe sought from shareholders in the ensuing Annual General Meeting.

COST RECORDS

The Company is maintaining the Cost Records as specified by the Central Governmentunder Section 148(1) of the

Companies Act 2013.

SECRETARIAL AUDITORS:

In terms of Section 204 of the Act and the Rules made there under M/s. S. Anantha& Ved LLP (LLPIN: AAH-8229) had been appointed as the Secretarial Auditors of theCompany for the financial year 2019-20.

The Secretarial Audit Report for the year under review is annexed as "Annexure5" to this report. Necessary explanation to the observations made in theSecretarial Audit Report is given below:

1. The Company has not included the following disclosures / reports in the annualreport of financial year 2018-2019: a) Detail of fees paid to the statutory auditor andall entities in the network firm/network entity of which the statutory auditor is a part;and b) Certificatefrom a Company Secretary in practice that none of the Directors on theBoard of the Company have been debarred or disqualified from being appointed or continuingas Directors of Companies.

2. The Company has not filed the Statement on Impact of Audit Qualifications (for auditreport with modified opinion) for the Consolidated Financial Results submitted with theStock Exchanges for the quarter and year ended March

31 2019 approved at the Board Meeting held on May 28 2019.

3. The account of the Company with its consortium Banks had turned Non-Performing Assetduring the previous financial year on various dates. In view of uncertainty the Companyhas not provided interest including penal interest and other dues for the year ended 31stMarch 2020 on borrowings to the extent the same have remained unpaid.

The impact of the same on the loss for the year and its consequent effect onliabilities and Reserves & Surplus are reflecting in the Financial Statements;

4. The Financial Statement indicates that the Company has accumulated losses resultingin erosion of net worth fully.

However the financial Statements of the Company have been prepared on going concernbasis;

5. There are delays in filing some of the e-forms with MCA (Ministry of CorporateAffairs).

Management Reply:-

1. The Company has submitted its reply on April 03 2020 undertaking to forward therequired disclosure / Reports and no further clarification was sought by NSE in thisregard.

2. In response to the NSE letter dated June 06 2019 the Company has filed theStatement on Impact of Audit Qualifications (for audit report with modified opinion) forthe Consolidated Financial Results for the quarter and year ended March 31 2019 on June17 2019.

3.& 4. The major loss is incurred due to heavy interest cost and non-utilization ofcapacity as there was shortage of working capital resulting into current quarter/yearlylosses.

The company is already in discussion with the lenders for restructuring as per RBIguidelines and one major milestone in restructuring process has been achieved i.e.obtaining RP4 rating from ICRA and CARE rating agencies for the resolution plan submitted.Hence the company is hopeful of restructuring process to be implemented from the lendersto put the company back on track.

Further as stated in our management reply for previous quarter the intention of thecompany is to reduce finance cost by restructuring loan with bankers and bringing fundsfrom investor.

Features of restructuring package will be as follows:- a) Company is in the process ofrestructuring its loan from bankers which will result in loan reduction by Rs.230 crs dueto conversion of loan into CRPS. b) Secondly to improve the liquidity position andcapacity utilization/Operations of the company company is in the process of raisingminimum funds of Rs.42.50 crs from Investors or NBFC. This is also a precondition fromBankers to pass the restructuring plan. c) Also company has decided to sell its non-coreassets to improve its liquidity for operations and also for Debt reduction. Accordinglyfinancial statements have been prepared on the basis that company is a going concern.

Company being a Mega project has un-accrued Incentive from Govt. of Maharashtra approx.to the tune of Rs.179 Crs. Only Rs.89 crs of the incentive has been accrued till March 312019.

5. The Board has advised the Secretarial Department to File the E-Forms within due dateto avoid such delay in future.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 92(3) of the Companies Act 2013 (‘the Act') read with Rule12(1) of the Companies (Management and Administration) Rules 2014 the extract of annualreturn in Form MGT-9 is annexed as Annexure 6 to this Report.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors of yourCompany hereby state that:

(i) In the preparation of the Annual accounts for the year ended March 31 2020 theapplicable accounting standards have been followed along with proper explanation relatedto material departure(s) if any;

(ii) The Directors have selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2020 and of the loss ofthe Company for the year ended on that date;

(iii) The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;(iv) The Directors have prepared the annual accounts on a ‘going concern' basis;

(v) The Directors of the Company have laid down internal financial controls to befollowed by the company and that such internal financial controls are adequate and areoperating effectively; and

(vi) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

HUMAN RESOURCES:

Your Company enjoys cordial relations with its employees. The key focus of your Companyis to attract retain and develop talent. The Board wishes to place on the record itsappreciation of the contributions made by all employees ensuring high levels ofperformance and growth during the year.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information on conservation of Energy Technology Absorption and Foreign ExchangeEarnings and outgo mentioned under Section 134(3)(m) read with Rule 8(3) of the Companies(Accounts) Rules 2014 is annexed as Annexure 7 to this report.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND:

Your Company did not have any funds being dividends lying unpaid or unclaimed for aperiod of seven years. Therefore there were no funds which were required to betransferred to Investor Education and Protection Fund (IEPF).

POLICY ON PREVENTION OF SEXUAL HARASSMENT:

The Company has in place Anti-Sexual Harassment Policy in line with the requirements ofthe Sexual Harassment of

Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. InternalComplaints Committee (ICC) has been set up to redress complaints received regarding sexualharassment. All employees (permanent contractual temporary trainees) are covered underthis policy. During the year 2018-19 no complaints were received regarding sexualharassment.Further the Company is conducting the awareness programs at regular intervalof time.

OTHER MATERIAL INFORMATION:

During the year under review there is noother material information to report.

SECRETARIAL STANDARDS ISSUED BY THE INSTITUTE OF COMPANY SECRETARIES OF INDIA (ICSI):

The Company complies with the Secretarial Standards issued by ICSI one of the premierprofessional bodies in India.

CAUTIONARY STATEMENT:

Statement in the Directors' report and the Management Discussion and Analysisdescribing the company's objectives expectations or predictions may be forward lookingwithin the meaning of applicable securities laws and regulations.

Actual results may differ materially from those expressed in statement. Importantfactors that could influence the company operation include: global and domestic demand andsupply conditions affecting selling prices new capacity additions availability ofcritical material and their cost changes in government policies and tax laws economicdevelopments of the country and other factors which are material to the businessoperations of the company.

ACKNOWLEDGEMENT:

Your Directors wish to thank and acknowledge the contributions of FinancialInstitutions Banks Government Authorities dealers suppliers business associatesauditors consultants and the Company's valued customers for their assistance andco-operation and the esteemed shareholders for their continued trust and support. TheDirectors also wish to acknowledge members of Bedmutha Group at all levels for theirspirit of commitment dedication and support extended in challenging times.

For and on behalf of Board of Directors BEDMUTHA INDUSTRIES LIMITED

Vijay Vedmutha Chairman& Managing Director DIN: 00716056

Date: 14th November 2020 Place: Sinnar

DECLARATION UNDER REGULATION 34(3) READ WITH PART D OF SCHEDULE VOF SEBI (LODR)REGULATIONS 2015 WITH REGARDS TO COMPLIANCE WITH CODE OF CONDUCT

This is to certify that in line with the requirement of Regulation 26 (3) of the SEBI(Listing Obligations and Disclosure Requirements) Regulation 2015 all the Directors ofthe Board and Senior Management Personnel have solemnly affirmed that to the best of theirknowledge and belief they have complied with the provisions of the Code of Conduct duringthe Financial Year 2019-20.

For and on behalf of Board of Directors Bedmutha Industries Ltd

Vinita A. Vedmutha

 

Officer SeniorChiefExecutive

Date: November 14th 2020

Place: Sinnar