Your Directors take pleasure in presenting the 9th (Ninth) Annual Report together withthe Audited Annual Accounts of your Company for the year ended March 31 2020.
(In Rs lakhs)
| ||Standalone || ||Consolidated || |
|Particulars ||2019-20 ||2018-19 ||2019-20 ||2018-19 |
|Total Revenue ||868 ||4152 ||870 ||4744 |
|Profit / (Loss) Before Tax (PBT) ||-3277 ||-5888 ||-3339 ||-5748 |
|Less: Provisions for Taxation ||- ||- ||- ||- |
|Profit After Tax (PAT) ||-2860 ||-5642 ||-2922 ||-5502 |
|Other Total Comprehensive Income ||5 ||33 ||5 ||33 |
|Total Comprehensive Income for the period ||-2855 ||-5609 ||-2917 ||-5469 |
STATE OF COMPANY'S AFFAIRS AND OPERATIONS
The Company is engaged in the business of metal packaging productsaluminum semi rigidcontainers ship building naval design services and agro-commodities. The Company hasachieved a turnover from operations of Rs. 374 lakhscompared to Rs. 3923 lakhsin theprevious financial year and incurred a net loss of Rs. 2860 lakhscompared to a net loss ofRs. 5642 lakhs in the previous financial year.
However the Company has suspended manufacturing operations at its plant located at161/1 Village: Khutli Via Khanve Dudhni Road U.T. of DNH Silvassa PIN-396230 witheffect from 17th July 2020 from 6A.M. onwards due to sluggish demand of the products ofthe Company During the year the management has reviewed the recoverability of its debtorsand security deposit in hand based on technical evaluation and has written down itsdebtors and security deposit (unfit for human consumption as per FASSAI) by Rs. 1919lakhs.
CHANGES IN THE NATURE OF BUSINESS IF ANY
There is no change in the business of the Company during the financial year 2019-20.
Due to losses incurred during the financial year under review the Board could notrecommend any dividend on the Equity Shares of the Company.
ISSUE OF SHARES
The Company has not issued any share / securities during the financial year underreview.
DETAILS PERTAINING TO SHARES IN SUSPENSE ACCOUNT
Disclosure as required under regulation 34(3) read with Schedule V of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 (hereinafter referred to as"Listing Regulations") is given in Corporate Governance Report which forms partof this report.
The Company has not accepted any deposit during the year under review.
TRANSFER TO RESERVE
During the year under review your Company has not transferred any amount to the GeneralReserve Account.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the Directors Responsibility Statement as referred to in section 134(3)(c)and 134(5) of the Companies Act 2013 your Directors hereby confirm that:
i) In the preparation of the annual accounts for the year ended 31st March 2020 theapplicable accounting standards have been followed along with proper explanation relatingto material departures;
ii) 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 loss of the Company for that period;
iii) The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this 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 have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; 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.
CONSERVATION OF ENERGY RESEARCH &DEVELOPMENT TECHNOLOGY ABSORPTION FOREIGNEXCHANGE EARNINGS AND OUTGO
Information related to conservation of energy Research & Development technologyabsorption foreign exchange earnings and outgo as required under section 134(3)(m) of theCompanies Act 2013 and Rule 8(3) of Companies (Accounts) Rules 2014 are given in theAnnexure A' as attached hereto forming part of this Report.
Your Company has practiced sound Corporate Governance and taken necessary actions atappropriate times for enhancing and meeting stakeholders' expectations while continuing tocomply with the mandatory provisions of Corporate Governance. Your Company has compliedwith the requirements of all the applicable Regulations read with Schedule - V of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 as issued bySecurities and Exchange Board of India and as amended from time to time. Your Company hasgiven its deliberations to provide all the information in the Board's Report and theCorporate Governance Report as per the requirements of Companies Act 2013 and the ListingRegulations entered by the Company with the Stock Exchanges as a matter of prudence andgood governance.
A Report on Corporate Governance along with a certificate from Mr. Santosh KumarTibrewalla Practicing Company Secretary certifying compliances with the provisionsrelating to the Corporate Governance as stipulated in the Listing Regulations forms partof this report as Annexure B'.
CODE OF CONDUCT
The Code of Conduct for all the Board Members Key Managerial Personnel and otherSenior Executives of the Company is in force and the same has been placed on the Company'swebsite: www.bkmindustries.com. Duties of the Independent Directors have suitably beenincorporated in the code. A declaration signed by the Managing Director & CEO to thiseffect forms part of Corporate Governance Report as annexed to this Report.
CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING
In terms of the SEBI (Prohibition of Insider Trading) Regulations 1992 your Companyhas adopted the Code of Conduct for prevention of Insider Trading. Further in accordancewith the provisions of Regulation 8 of SEBI (Prohibition of Insider Trading) Regulations2015 the Board of Directors of the Company has duly approved and adopted the code ofpractices and procedure for fair disclosure of Un-published Price Sensitive Informationand formulated the code of conduct of the Company.
However SEBI has amended certain provisions of the SEBI (Prohibition of InsiderTrading) Regulations 1992 w.e.f. 1stApril 2019 which were duly adopted by the Companyand the Code of Conduct was revised accordingly the aforesaid code of conduct forprevention of Insider Trading is duly placed on the Website of the Companyatwww.bkmindustries.com
PERFORMANCE & FINANCIAL POSITION OF SUBSDIARY/ASSOCIATES
Highlights of performance of subsidiaries associates and their contribution to theoverall performance of the Company during the period. [Pursuant to Section 134 and Rule 8of Companies (Accounts) Rules 2014]
Pursuant to the provisions of Section 129(3) of the Companies Act 2013 read with Rule5 of the Companies (Accounts) Rules 2014 details containing salient features of thefinancial statement of subsidiary companies in Form AOC-1 are given in Annexure-C'.The details of performance of the Subsidiary Companies are as follows:
a. Euroasian Ventures FZE
The revenue of the Company for the year ended 31st March 2020 stood at AED 50642(equivalent to Rs 9.78 lakhs during the year ended 31st March 2020 the Company hadincurred net loss of AED 180423 equivalent to 34.83 lakhs (approx.)
b. Eurasian Steels LLC
Euroasian Steels LLC is the subsidiary of Euroasian Ventures FZE. The Companyhas notundertaken any business during the financial year under review. Therefore the revenue ofthe Company for the year ended 31stMarch 2020stood NIL.
c. Jiwanjyoti Vanijya Pvt. Ltd.Wholly-owned Subsidiary Company
The Company has reported total revenue Rs. 7.69 lakhs during the year as compared torevenue of Rs. 7.21 lakhs in the previous year. During the year ended 31st March 2020the Company had incurred a net loss of Rs. 24.58 lakhs compared to Rs. 25.72 lakhs in theprevious year
d. Glitter Agencies Pvt. Ltd.Wholly-owned Subsidiary Company
The Company has reported total revenue Rs. 7.65 lakhs during the year as compared torevenue of Rs. 7.20 lakhs in the previous year. During the year ended 31st March 2020the Company has incurred a net loss of Rs. 19.93 lakhs compared to loss of Rs. 20.29 lakhsin the previous year.
e. B K Manaksia Nigeria Ltd. Wholly-owned Subsidiary Company
M/s. BK Manaksia Nigeria Ltd. has not undertaken any business during the financial yearunder review. However it has incurred preliminary and pre-operative expenses of2939536.93 (Niara) till 31st March 2020 (equivalent to Rs. 6.75 lakhs).
f. BKM Agrotech Private Limited Wholly owned Subsidiary
BKM Agrotech Private Limited incorporated on 13th March 2018 as the wholly ownedsubsidiary company.The Companyhas not undertaken any business during the financial yearunder review. Therefore the revenue of the Company for the year ended 31stMarch 2020stood NIL. During the year ended 31stMarch 2020 the Company had incurred a net loss ofRs. 91185.
Except as stated hereinabove no other Company has become or ceased to be the Company'ssubsidiary joint venture or associate company during the year under review.
The particulars and information of the employees as required under Section 197(12) ofthe Companies Act 2013 read with Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 has been set out as Annexure D' to thisReport.
The website of your Company www.bkmindustries.com has been designed to present theCompany's businesses up-front on the home page. The site carries a comprehensive databaseof information including the Financial Results of your Company Shareholding patternDirector's & Corporate Profile details of Board Committees Corporate Policies andbusiness activities of your Company. All the mandatory information and disclosures as perthe requirements of the Companies Act 2013 and Companies Rules 2014 and as per the SEBI(Listing Obligations & Disclosure Requirements) Regulations 2015 has been uploaded tothe aforesaid website of the Company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
i) Director - Retirement by Rotation:
Pursuant to the provisions of Section 152(6) and other applicable provisions of theCompanies Act 2013 and Articles of Association of the Company Mr. Navneet Manaksia (DIN00438612) Director of the Company retires by rotation at the ensuing Annual GeneralMeeting and is eligible for reappointment.
None of the Directors of the Company are disqualified as per section 164(2) of theCompanies Act 2013.
The Executive and non-executive Directors have also made necessary disclosures to theextent as required under the provisions of section 184(1) of the Companies Act 2013 asapplicable.
i) Appointment/Re-appointment of the Directors :
a. Ms. Jaya Bajpai (DIN: 08603368)was appointed as an Additional Director (designatedas Independent Director) of the Company by the Board w.e.f. November132019 for aconsecutive period of 5 years.She will hold the office till the ensuing Annual GeneralMeeting (AGM) unless appointed by the Shareholders in the AGM.
b. Ms. Shipra Saha (DIN: 08603410)was appointed as an Additional Director (designatedas Independent Director) of the Company by the Board w.e.f. November 13 2019 for aconsecutive period of 5 years.She will hold the office till the ensuing Annual GeneralMeeting (AGM) unless appointed by the Shareholders in the AGM. However she has resignedfrom the Directorship w.e.f. June 8 2020 due to her personal reasons. Further theCompany has received a confirmation from Ms. Saha that there was no other reason except asstated above for her resignation
c. Mr. Ganesh Chandra Das (DIN: 08608029)was appointed as an Additional Director(designated as Independent Director) of the Company by the Board w.e.f. November 13 2019for a consecutive period of 5 years. He will hold the office till the ensuing AnnualGeneral Meeting (AGM) unless appointed by the Shareholders in the AGM. d. Mr. NavneetManaksia was re-appointed as a Wholetime Director of the Company w.e.f January 7 2020. e.Ms. Ritika Agarwal (DIN: 8771261)was appointed as an Additional Director (designated asIndependent Director) of the Company by the Board w.e.f. July 28 2020 for a consecutiveperiod of 5 years to fill up the vacancy caused by the resignation of Ms. Shipra Saha. Shewill hold the office till the ensuing Annual General Meeting (AGM) unless appointed by theShareholders in the AGM.
iii) Resignation of Directors:
a. Dr. Kali Kumar Chaudhuri Independent Director of the Company resigned from theDirectorship w.e.f. close of business hours on September 21 2019 due to his personalreasons. Further the Company has received a confirmation from Dr. Chaudhari that therewas no other reason except as stated above for his resignation.
b. Mrs. SmitaKhaitan Women Independent Director of the Company resigned from theDirectorship w.e.f. close of business hours on September 21 2019 due to her personalreasons. Further the Company has received a confirmation from Mrs. Khaitan that there wasno other reason except as stated above for her resignation
c. Mr. Anil Kumar Saboo Independent Director of the Company resigned from theDirectorship w.e.f. close of business hours on October 4 2019 due to his personalreasons. Further the Company has received a confirmation from Mr. Saboo that there was noother reason except as stated above for his resignation.
iv) Appointment/Resignation of Wholetime- Key Managerial Personnel (KMP):
a. Ms. Raveena Dugar resigned from the position of Company Secretary and ComplianceOfficer with effect from1st July 2020.
b. Mr. Bijay Kumar Sahoo resigned from the position of Chief Financial Officer andCompliance Officer with effect from 21st July 2020.
c. Mr. Navneet Manaksia was appointed in the position of Chief Financial Officer andCompliance Officer with effect from 21st July 2020 in the Board Meeting dated 28th July2020.
d. Mr. Varun Agarwal has been appointed in the position of Company Secretary andCompliance Officer with effect from 1st August 2020 in the Board Meeting dated 28th July2020.
DECLARATION BY INDEPENDENT DIRECTORS
In accordance with Section 149(7) of the Act each Independent Director has given awritten declaration to the Company conforming that he/she meets the criteria ofindependence as mentioned under section 149(6) of the Act and Regulation 16(1)(b) of SEBI(Listing Obligations & Disclosure Requirements) Regulations 2015.
CORPORATE SOCIAL RESPONSIBILITY cCSR
During the year under review provisions of Corporate Social Responsibility (CSR)became applicable to the Company pursuant to section 135 of the Companies Act 2013 andthe Rules made thereunder. Accordingly the Board has constituted the CSR Committee andapproved the CSR policy. Other details of the Committee is mentioned in the CorporateGovernance Report forming part of this Board's Report and Annual Report on CSR is attachedas Annexure E' to this Report.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
The Management Discussion and Analysis Report as required under Regulation 34(2) (e) ofSecurities & Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 forms part of this report.
AUDITORS AND THEIR REPORTS (i) Statutory Auditors:
The Statutory Auditors M/s. SRB & Associates Chartered Accountants continue tohold office upto the conclusion of the Annual General Meeting (AGM) to be held for thefinancial year 2020-21. The Notes to Accounts as referred in the Auditors Report areself-explanatory and hence does not call for any further explanation.
(ii) Internal Auditor:
The Board had appointed M/s.D S Associates Chartered Accountants as Internal Auditorsof the Company for the F.Y. 2020-21 as per the provisions of Section 138 of the CompaniesAct read with Rule 13 of the Companies (Accounts) Rules 2014. The Internal Auditors havesubmitted the reports as per their scope of work on quarterly basis to the Audit Committeeand Board of Directors of the Company.
(iii) Secretarial Auditor:
The Board had appointed Mr. Santosh Kumar Tibrewalla Practicing Company Secretariesas the Secretarial Auditors of the Company to carry out the Secretarial Audit for the year2019-20 under the provisions of Section 204 of the Companies Act 2013. The report of theSecretarial Auditor in MR 3 is enclosed as Annexure - F' to this Board's Report. TheCompany has initiated strict and timely compliance with the other applicable laws to theCompany as reported by the Secretarial Auditors. The rest of the report isself-explanatory and hence do not call for any further explanation.
LISTING OF SECURITIES IN STOCK EXCHANGES
The shares of the Company are presently listed at The National Stock Exchange of IndiaLimited and BSE Limited. The Company is registered with both NSDL & CDSL for holdingthe shares in dematerialized form and open for trading. The Company has paid Listing Feesto the Stock Exchanges and the depositories.
DISCLOSURES AS PER APPLICABLE ACT AND SEBI cLISTING OBLIGATIONS AND DISCLOSUREREQUIREMENTS REGULATIONS 2015
i) Related Party Transactions:
All contracts/arrangements/transactions entered by the Company with related parties forthe year under review were on arm's length basis and in the ordinary course of businessand were reviewed by the Audit Committee and that the provisions of Section 188(1) readwith the Companies (Meetings of Board and its Powers) Rules 2014 are not attracted.Further there are no materially significant related party transactions during the yearunder review made by the Company which may have a potential conflict with the interest ofthe Company at large. Thus disclosure in Form AOC-2 is not required.
All Related Party transactions are placed before the Audit Committee for approval.
During the year under review the Company has not entered into any contract/arrangement/ transaction with related parties which could be considered material inaccordance with the Company's policy of Materiality of Related Party Transactions. Thenecessary disclosures regarding the transactions are given in the notes to accounts.
The policy on Related Party Transactions as approved by the Board of Directors of theCompany may be accessed on the Company's website at www. bkmindustries.com and the weblink theretohttp://bkmindustries.com/investor-relation/BKM-industries-limited/corporate-policies
ii) Number of Board Meetings:
The Board of Directors met 4 (four) times in the year 2019-20 i.e. 30.05.201906.08.2019 13.11.2019 and 13.02.2020. The Directors had passed certain resolutions bycirculation on 25.06.2019 27.08.2019and 16.12.2019. The details of the Board meeting andattendance of the Directors are provided in the Corporate Governance Report attached asAnnexure to this Board's Report.
iii) Composition of Audit Committee:
The Board has re-constituted the Audit Committee in its meeting held on November132019 and has appointed Mr. Ganesh Chandra Das Ms. Jaya Bajpai and Ms. ShipraSaha asmembers of the Committee with immediate effect and Dr. Kali Kumar Chaudhury and Mrs.SmitaKhaitan ceased to be member w.e.f 21st September 2019 and Mr. Anil Kumar Sabooceased to be member with effect from 4th October 2019. The complete details of theCommittee are given in the Corporate Governance Report attached as Annexure to thisBoard's Report.
Recommendation by Audit Committee
There were no such instances where the recommendation of Audit Committee has not beenaccepted by the Board during the financial year under review.
iv) Extracts of Annual Return:
The details forming part of the extract of the Annual Return in MGT-9 as provided undersection 92(3) of the Companies Act 2013 and Rule 12 of the Companies (Management andAdministration) Rules 2014 is enclosed as Annexure - G'.
v) Risk Analysis:
The Board has developed and implemented a risk management policy identifying thereinthe elements of risk that may threaten the existence of the Company. The Company has amechanism that helps the Board to keep an overall watch on the business risks and informsthe Board members about the evaluation and estimation of the levels of risks involved ina situation their comparison against benchmarks or standards and determination of anacceptable level of risk and mitigation plans and periodical reviews are undertaken toensure that the critical risks are controlled by the executive management.
vi) Internal Financial Control :
The Company has in place adequate internal financial control as required under section134(5)(e) of the Act and the same was evaluated by the Audit Committee. During the yearsuch controls were tested with reference to financial statements and no reportablematerial weakness in the formulation or operations were observed. The statutory auditorsof the Company conducted audit on the Company's internal financial control over financialreporting and the report of the same is provided is annexed with Auditor's Report.
vii) Loans Guarantees and Investments:
The Company has not given any loan or provided any guarantee.
viii) Post Balance Sheet events:
On occurrence of COVID -19 there was a complete nationwide lock down since 24thMarch2020 and the operation of the Company was jeopardized since then till 17th May 2020which marginally affected the sales and profitability in the current financial year underreview.
The Company has also suspended manufacturing operations at its plant located at 161/1Village: Khutli Via Khanve Dudhni Road U.T. of DNH Silvassa PIN-396230 with effectfrom 17th July 2020 from 6A.M. onwards due to sluggish demand of the products of theCompany.
ix) Evaluation of the Board's Performance:
During the year under review the Board in compliance with the Companies Act 2013 andapplicable Regulations of Securities & Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 has continued to adopt formal mechanismfor evaluating its performance and as well as that of its Committees and individualDirectors including the Chairman of the Board. The exercise was carried out through astructured evaluation process covering various aspects of the Boards functioning such ascomposition of the Board & Committees experience & competencies performance ofspecific duties &obligations governance issues etc. Separate exercise was carried outto evaluate the performance of individual Directors including the Board as a whole andthe Chairman who were evaluated on parameters such as their participation contributionat the meetings and otherwise independent judgements safeguarding of minorityshareholders interest etc.
The evaluation of the Independent Directors was carried out by the entire Board andthat of the Chairman and the Non-Independent Directors were carried out by the IndependentDirectors in their separate meeting held on 13th February 2020.
The Directors were satisfied with the evaluation results which reflected the overallengagement of the Board and its Committees with the Company.
x) Nomination Remuneration and Evaluation Policy:
Pursuant to the provisions of the Companies Act 2013 read with the Rules made thereinand the SEBI (Listing Obligations & Disclosure Requirements) Regulation 2015 (asamended from time to time) the Committee has formulated the Nomination and RemunerationPolicy which broadly laid down the various principles of remuneration being support forstrategic objectives transparency internal & external equity flexibilityperformance driven remuneration affordability and sustainability and covers the procedurefor selection appointment and compensation structure of Board members Key ManagerialPersonnel (KMPs) and Senior Management Personnel (SMPs) of your Company.
The detailed Nomination & Remuneration Policy of the Company is placed on theCompany's website at www.bkmindustries.com.
xi) Vigil Mechanism (Whistle Blower Policy):
As per the requirements of the Companies Act 2013 and Listing Agreement / applicableRegulations of Securities & Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 the Company had established a mechanism foremployees to report concerns for unethical behavior actual or suspected fraud orviolation of the code of conduct or ethics. It also provides for adequate safeguardsagainst the victimization of employees who avail the said mechanism. This policy alsoallows the direct access to the Chairperson of the Audit Committee. The Audit Committee iscommitted to ensure the flawless work environment by providing a platform to report anysuspected or confirmed incident of fraud/ misconduct. Details of establishment of theVigil Mechanism have been uploaded on the Company's website: www.bkmindustries.comand alsoset out in the Corporate Governance Report attached as Annexure to this Board's Report.
xii) Disclosure under Sexual Harassment of Women at Workplace (Prevention Prohibition&Redressal) Act 2013:
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013. Internal Complaints Committee (ICC) has been set up to redress complaintsreceived regarding sexual harassment. All employees (permanent contractual temporarytrainees) are covered under this Policy. The Policy is gender neutral. During the yearunder review no complaints with allegations of sexual harassment were filed.
xiii) Fraud Reporting:
There was no fraud reported by the Auditors of the Company under Section 143(12) of theCompanies Act 2013 to the Audit Committee or the Board of Directors during the yearunder review.
The industrial relation during the year 2019-20 had been cordial. The Directors take onrecord the dedicated services and significant efforts made by the Officers Staff andWorkers towards the progress of the Company.
SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
There have been no significant & material orders passed by regulators / courts /tribunals impacting going concern status and company's operations in future.
Your Directors take this opportunity to place on record their gratitude to the Centraland State Governments Bankers and Investors for their continuous support cooperation andtheir valuable guidance to the Company and for their trust reposed in the Company'smanagement. The Directors also commend the continuing commitment and dedication of theemployees at all levels and the Directors look forward to their continued support infuture.