To
The Members of BS Limited,
Your Directors have the pleasure of presenting their Report on the business and
operations of the Company and Audited Financial Statement of Accounts for the year ended
March 31, 2018.
FINANCIAL RESULTS
The financial performance of the Company for the financial year ended on March 31, 2018
is summarized below:
|
|
(Rs. in Lakhs) |
|
Standalone |
Consolidated |
Particulars |
31/03/2018 |
31/03/2017 |
31/03/2018 |
31/03/2017 |
Revenue from operations |
8342.09 |
69298.28 |
46250.86 |
221911.30 |
Other Income |
157.61 |
272.06 |
241.69 |
572.43 |
Total Income |
8499.71 |
69570.35 |
46492.56 |
222483.74 |
Profit/(Loss) Before Depreciation, Finance Cost, Exceptional items, Extraordinary
items & Tax |
(74562.04) |
(27151.97) |
(74899.38) |
(23561.80) |
Less: Depreciation and |
5775.21 |
14361.35 |
7184.14 |
16058.21 |
Finance Cost |
|
|
|
|
Less: Exceptional items/ |
- |
- |
- |
- |
Extraordinary Items |
|
|
|
|
Profit/(Loss) Before Taxation Provisions |
(80337.25) |
(41513.33) |
(82083.52) |
(39620.01) |
Less: Tax |
(366.24) |
(701.57) |
(80.54) |
(654.44) |
Profit / (Loss)After Tax |
(79971.01) |
(40811.75) |
(82002.98) |
(39620.01) |
Balance Carried to Balance Sheet |
(79971.01) |
(40811.75) |
(82002.98) |
(39620.01) |
Earnings per Share |
(18.11) |
(9.24) |
(18.57) |
(8.82) |
Note: the above figures are extracted from the audited standalone and consolidated
financial statements as per Indian accounting Standards (Ind AS).
PERFORMANCE REVIEW
The Company continues to operate in Multiple Segments, i.e., Engineering, Procurement
and Construction and Trading Business. There has been no change in the nature of business
of the Company. State Bank of India, one of the working capital banks, has filed an
application on 12.4.2018 for initiation Corporate Insolvency Resolution Process
(CIRP') against our Company u/s 7 of Insolvency & Bankruptcy Code, 2016
(IBC') with National Company Law Tribunal (NCLT), Hyderabad. Since Company's bank
accounts have been put on hold, after NPA classification by the lenders since July 2016,
Company is not able to conduct its business on an on-going business and the same has
affected the Company's financial performance.
The Standalone and Consolidated Performance of the Company for the year under review
were as under:
Standalone
Total Revenue (excluding other Income) in current FY 2018 stood at Rs. 83.42
Crores as against Rs. 692.98 Crores in previous FY 2017.
EBIDTA in current FY is Rs. (747.19) Crores as compared with Rs. (274.24) Crores
in previous FY 2017.
Loss after Tax for the current FY 2018 was Rs. (799.71) Crores as against Rs.
(408.11) Crores in previous FY 2017.
Consolidated
Consolidated Total Revenue (excluding other Income) of the Company in
current FY 2018 stood at Rs. 462.51 Crores as against Rs. 2219.11 Crores in previous FY
2017.
Consolidated EBIDTA in current FY is Rs. (751.41) Crores as compared with Rs.
(241.34) Crores in previous FY 2017.
Consolidated Loss after Tax in current FY 2018 was Rs. (820.03) Crores as
against Rs. (389.66) Crores in previous FY 2017
REVISION OF FINANCIAL STATEMENTS
The Company had earlier on 9.12.2016 filed an application with Hon'ble National Company
Law Tribunal (NCLT') Hyderabad Bench (under I.R. No. 886 of 2016) under section 131
of the Companies Act of 2013 read with rule 77 of the National Company Law Tribunal Rules
for revision of Financial Statements of the Company for the Financial Years 2014-15 &
2015-16. The said application was dismissed by the NCLT and the detailed order is received
by the Company on 26.04.2018. Your Board had on 17.05.2018 vide resolution through
circulation no. 87 had approved to file an appeal in National Company Law Appellate
Tribunal (NCLAT') against the said order. Accordingly the appeal was filed on
19.06.2018 and the matter is pending before NCLAT. The Audited Financial Statements
represent the Company's financials without factoring into adjustments / changes which may
be necessitated upon NCLT/NCLAT's approval for Company's application filed with them for
revision of financial statements under Sec. 131 of The Companies Act, 2013
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of your Company for the financial year 2017-18
are prepared in compliance with applicable provisions of the Companies Act, 2013 read with
the Rules issued there under, applicable Accounting Standards and the provisions of SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred
to as the "Listing Regulations"). These statements have been prepared on the
basis of audited financial statements of your Company, its subsidiaries / Joint venture
Company as approved by their respective Board of Directors.
SUBSIDIARIES / JOINT VENTURES / ASSOCIATE COMPANIES
Player in the Your Company continues to have Two Subsidiaries Overseas and there were
no changes in the same during the year. Financials of Subsidiaries are disclosed in the
Consolidated Financial Statements which forms part of this Annual Report. Your Company has
one Joint Venture (JV') in India, which was incorporated as a Special Purpose
Vehicle Company. The accounts of the said JV are consolidated with the Accounts of the
Company.
Pursuant to Section 129(3) of the Companies Act, 2013 and Accounting Standard 21 issued
by the Institute of Chartered Accountants of India, the Consolidated Financial Statements
presented by the Company include the Financial Statements of its Subsidiaries.
A Separate Statement containing salient features of Financial Statements of
Subsidiaries of your Company in the prescribed form no. AOC 1 forms part of Consolidated
Financial Statements in compliance with Section 129 and other applicable provisions, if
any, of the Companies Act, 2013. The Financial Statements of the Subsidiary Companies and
related information are available for inspection by the Members at the Registered Office
of your Company during business hours on all days except Saturdays, Sundays and Public
Holidays up to the date of the Annual General Meeting (AGM') as required under
Section 136 of the Companies Act, 2013. The Financial Statements including the
Consolidated Financial Statements, Financial Statements of Subsidiaries and all other
documents required to be attached to this Report have been uploaded on the website of the
Company (www. bslimited.in).
The Company has laid down policy on material subsidiaries and none of the subsidiaries
are material subsidiary as per the Policy. The policy is placed on the website of the
Company (www.bslimited.in).
REPORT ON THE PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES, ASSOCIATES AND JOINT
VENTURE COMPANIES
Pursuant to Section 134 of the Companies Act, 2013 and Rule 8(1) of the Companies
(Accounts) Rules, 2014, the details on the Performance and Financial Position of
Subsidiaries, Associates and Joint Venture Companies included in the Consolidated
Financial Statements are as under: a) M/s. BS Global Resources Private Limited, Singapore
M/s. BS Global Resources Private Limited ("BSGRPL") was incorporated in 2011 as
a Wholly-Owned Subsidiary of the Company. Headquartered in Singapore, BSGRPL is engaged in
the business of Trading of Coal, Nickel, Copper Cathode and Minerals such as Iron Ore, and
is a one-point sourcing firm for Trading and Supply of Mineral Resources and Agro
Products.
The Entity has lasting partnerships with major Coal Mines and Suppliers, Credible
Buyers and Sellers of Mineral Resources and has an Economical Pricing Strategy with
Long-Term Focus that lends it competitive advantage. It seeks to become a Significant
Minerals Trading Markets.
During the year, the said Company has reported a Turnover of Rs. 229.61 Crores and a
Loss before Tax and Loss after Tax of Rs. 19.77 Crores and Rs. 22.63 Crores, respectively.
In view of changed market scenario in the subsidiary's business in their area of
operations, the margins have declined which has affected the performance of our subsidiary
also. b) M/s. BS Limited FZE, Dubai M/s. BS Limited FZE has been incorporated as a
Wholly-Owned Subsidiary in compliance with the laws and regulations of Dubai Airport Free
Zone Authority and has received the Certificate of Incorporation from Dubai Airport Free
Zone Authority on March 06, 2014. The Principal activities of the said Subsidiary consist
of
"Trading in Power Transmission Materials & Coal and Providing Related
Engineering Services.
During the year, the said Company has reported a Turnover of Rs. 132.13 Crores and a
Profit before Tax and after Tax of Rs. 2.22 Crores and Rs. 2.22 Crores, Profit
respectively. c) M/s. Raichur Sholapur Transmission Company Private Limited M/s. Raichur
Sholapur Transmission Company Private Limited ("RSTCPL) (formerly known as M/s.
Raichur Sholapur Transmission Company Limited) has been incorporated as a Special Purpose
Vehicle ("SPV") Company, in Joint Venture with M/s. Patel Engineering Limited
and M/s. Simplex Infrastructures Limited. The revenues in the said BOOM project is on
sharing basis and the same is spread over a period of 35 years. As on March 31, 2016, your
Company holds 26,664,000 Equity Shares (33.33%) aggregating to Rs. 266,640,000/- of the
Total Paid-up Share Capital of RSTCPL.
During the year, the said Company has reported a Turnover of Rs. 36.10 Crores from
Transmission Service and Rs. 2.24 Crores as other income by way of interest. The Company
incurred a loss of Rs. 0.02 Crores for the year ended March 31, 2018.
The lenders' consortium led by Axis Bank have considered and approved the subsidiary's
ECB limits under the Reserve Bank of India's 5/25 (Scheme of Restructuring') in the
months of June / July 2017. Accordingly the terms of sanction especially the repayments
were changed and RSTCPL executed documentation with the lenders during the period under
review.
Information in this respect can also be referred in form AOC-1 which has been disclosed
in the Consolidated Financial Statements.
DIVIDEND
With a view of Company's critical financial position, Directors have not recommended
any Dividend for the Financial Year 2017-18.
SHARE CAPITAL
During the year under review, there were no change in the Issued, Subscribed and
Paid-up Equity Share Capital of the Company.
ANNUAL GENERAL MEETING:
The Company has convened and holds the Annual General Meeting for the financial year
ended 31.3.2017 on 28.12.2017 after receiving approval from Registrar of Companies, Andhra
Pradesh & Telangana dated 04.09.2017 granting an extension of 3 months to convene and
hold the Annual General Meeting for the financial year ended 31.3.2017 till 30.12.2017.
EMPLOYEE STOCK OPTION PLAN
The Company has initiated Employee Stock Option Plan (ESOP') plan in 2011 wherein
all the options have been vested / lapsed as on March 31, 2018.
BANK LIMITS AND CREDIT FACILITIES
The consortium of Working Capital Banks, led by State Bank of India, has classified the
company's working capital limits and Corporate Loan limits / accounts as
"Non-performing Asset" during the earlier financial year. Similarly the
company's term lenders viz. IFCI Limited and Bank of India have classified the company's
term loan accounts as "Non-performing Asset" during the earlier financial year.
The Working Capital Banks of the company have issued notices to the company under
Section 13 (2) of The SARFAESI Act. (for recovery) Company has replied to the banks in
response to the said notices.
Sl. No. |
Name of the Bank |
Date of SARFAESI Notice |
Replied on |
1. |
IDBI Bank Limited |
19-04-2017 |
04-07-2017 |
2. |
Bank of India |
13-06-2017 |
19-06-2017 |
3. |
Lakshmi Vilas Bank |
19-06-2017 |
03-07-2017 |
A. ISSUANCE OF NOTICES UNDER SECTION 13 (4) OF
SARFAESI ACT
a. SBI issued notice dated 7.12.2017 to the company under Rule 13 (4) 8(1) and (2)
advising taking symbolic possession of the land / building properties which were mortgaged
to the bank: i. Property situated at Plot no. 42 (part) in S. No. 258/1 and 259 situated
at Jeedimetla Industrial Area, Shapurnagar, RR district, AP admeasuring 22,439.26 sq. yds
standing in the name of M/s Agarwal Developers ii. Residential flat admeasuring 2575 sq.
ft. bearing No.103 in 2nd floor. Block D of Trendset Valley view apartment bearing MCH
Nos. 8-2-405/1/2/3 at Banjara Hills, Road No. 6, Hyderabad standing in the name of Sri
Rajesh Agarwal Open land admeasuring Ac. 3.10 guntas in survey situated at Survey No. 119,
120, 121, 122 your & 124 Athvelly Village, Medchal Mandal, Ranga Reddy District
standing in the name of M/s. B S Limited and Mr. Rajesh Agarwal B. SBI issued notice dated
29.12.2017 to the company under Rule 13 (4) 8(1) and (2) advising taking symbolic
possession of the land / building properties which were mortgaged to the bank: a. Office
premises No. 302 on the 3rd Floor, admeasuring 3702 sq. ft. Carpet Area (equivalent to
344.05 sq. mtr.) along with 3 (Three) Car Parking in Stack Car parking System of the
Building No. 19 (A Wing), Pinnacle Corporate Park situated on all that piece or parcel of
land or ground situated in the revenue village of Kole Kalyan, Taluka Andheri in the
Registration, Sub District of Bandra, District Bombay Suburban now in Greater Mumbai
bearing CTS No. 4207 (pt) of Village Kole Kalyan, standing in the name of M/s Agarwal
Reality Developers Pvt. Ltd.
SYMBOLIC POSSESSION BY STATE BANK OF INDIA UNDER SARFAESI ACT
The company informed the exchanges on 16.9.2017 that it had received a notice from
State Bank of India (the lead bank of Working capital consortium) stating that the bad had
had taken the symbolic possession of the properties of the company mortgaged to the bank,
under Sec. 13 (4) of the SARFAESI Act read with Rule 8 due to non-payment of dues to the
banks.
FILING OF APPLICATION BY SBI LED BANKS WITH DRT
* State Bank of India and 7 others Banks have filed an application with Debts Recovery
Tribunal (DRT') on 13.7.2017 vide OA No. 437 of 2017 for recovery of outstanding
dues to the Banks from BS Limited which have become irregular and overdue.
* The Hon'ble DRT has passed an interim order on 21.7.2017.
* Company's legal counsel has filed its affidavit on the above application.
* The above case is pending with the Hon'ble DRT for arguments and further submissions
if any.
DECLARATION / ISSUANCE OF WILFUL DEFAULTER NOTICE BY IFCI LTD. AND OTHERS
IFCI Limited, one of the term lenders, has declared the Company as "Wilful
Defaulter" under the guidelines of Reserve Bank of India's Circular dated 1.7.2015.
IFCI Limited vide their letter No. IFCI/HRO/BSL/WD/2018-419 dated 19.3.2018 has cited the
reasons "The Unit has defaulted in meeting its payment / repayment obligations to the
Lender even when it has the capacity to honour the said obligations" [under clause
2.1.3.(a) of the RBI Circular DBR NO. CID.
BC.2220.16.003/2015-16 dated 1.7.2015] for taking the above said action of
classification as "Wilful Defaulter". The Company has preferred an appeal / writ
petition with the High Court of Hyderabad for staying the above action of IFCI Limited.
State Bank of India, SAM II Branch, Hyderabad, vide their letter No. SAMB/HYD/KSJ/1871
dated 5.3.2018 issued a show-cause notice to the company seeking company's replies as to
why the company should not be declared as a willful defaulter. They have invoked the
provisions of relevant RBI guidelines [Sec. 2.1.3. (a) and Sec. 2.2.1. (d)]. Company has
submitted their point-wise replies on 3.4.2018 and requested for not classifying the
Company as a Willful defaulter'.
ACTION INITIATED BY THE TAX AUTHORITIES
Demand notices were raised on 29.11.2017 for assessment years 2013-14 & 2014-15 for
Rs. 18,26,84,830 and Rs. 85,06,22,530 respectively by the assessing officer. Company
preferred appeal with the Appellate Tribunal. Appellate Tribunal vide its order dated
27.4.2018 set aside the order in some aspects for the AY 2013-14. However final order from
the Assessing Officer is awaited.
SIGNIFICANT / MATERIAL ORDERS PASSED BY THE REGULATORS
As explained above, the Company has filed an appeal in National Company Law Appellate
Tribunal (NCLAT') against the order of National Company Law Tribunal. Because of our
application pending at NCLT / NCLAT for last two years, Company could not file the Annual
Reports for last two years i.e. for 2015-16 & 2016-17. Meanwhile, Company has received
a suspension of trading in shares notice dated 11.05.2018 from Stock Exchanges due to
non-filing of Annual Reports for last two continuous years i.e. 2016-17 & 2017-18 and
hence, Company has however decided to file an Annual Reports for the said two financial
years along with current financial year 2017-18.
Moreover, State Bank of India (SBI'), one of the Financial Creditors of the
Company has filed an application with Hon'ble National Company law Tribunal (NCLT'),
Hyderabad on 12.04.2018 for initiation of Corporate Insolvency Resolution Process
(CIRP') against our Company u/s 7 of Insolvency & Bankruptcy Code, 2016
(IBC').
BOARD OF DIRECTORS
Pursuant to Sections 149, 152 and other applicable provisions, if any, of the Companies
Act, 2013, One-third of the Directors as are liable to retire by rotation, shall retire
every year and, if eligible, offer themselves for re-appointment at every AGM.
Accordingly, Mr. Arun Dogra retires by rotation at the ensuing Annual General Meeting of
the Company, and being eligible, offers himself for re-appointment.
The Board of Directors had appointed Mr. Pochender Shanigarapu as Additional Director
of the Company, in the category of Non-Executive Independent Director, in terms of Section
149(1) of the Companies Act, 2013 read with Rules prescribed thereunder, with effect from
27.03.2017, to hold Office up to the ensuing Annual General Meeting of the Company. Before
the Board took up the issue of regularization and reappointment of Mr. Pochender
Shanigarapu as Additional Director (Non-Executive Independent Director)', the
Company received the notice of disqualification of Mr. Pochender Shanigarapu from NSE and
hence, the Company did not consider his reappointment in Annual General Meeting held on
28.12.2017.
Further, Mr. Narayan Rao Gali, Independent Director of the Company, has resigned vide
his Letter dated 30.03.2017, from the Directorship of the Company and accordingly he was
relived from the closing business hours of 31.03.2018. Your Company and its Board of
Directors hereby deeply appreciate the valuable contributions made by the erstwhile
Directors viz. Mr. Pochender Shenigarapu and Mr. Narayan Rao Gali during their tenure as
Board Members of BS Limited. In order to comply with the provisions of Section 149
Companies Act, 2013 read with rules made thereunder and Regulation 17 of SEBI (LODR)
Regulations, 2015, the Company has appointed Mr. Ch Umamaheshwara Rao and Mr. Kotla
Chandra Sekhararao, as Additional (Independent) Directors of the Company w.e.f 30.05.2018
to hold the office up to the date of ensuing Annual General Meeting of the Company.
The brief resume of the Directors proposed to be appointed and / or re-appointed and
other relevant information have been furnished in the Explanatory Statement to the Notice
of the ensuing AGM. The Directors recommend the Resolutions for the aforesaid appointment
/ re-appointment for approval of the Members at the ensuing AGM.
BOARD DIVERSITY
The Company recognizes and embraces the importance of a diverse Board in its success.
We believe that a truly diverse Board will leverage differences in thought, perspective,
knowledge, skill regional and industry experience, cultural and geographical background,
age, ethnicity, race and gender, which will ensure us retain our competitive advantage.
The Board has adopted the Board Diversity policy which sets out the approach to diversity
of the Board of Directors.
POSTAL BALLOT AND E-VOTING
Your company has informed the Exchanges that pursuant to Section 108, 110 of the
Companies Act, 2013 read with Rule 20 of the Companies (Management & Administration)
Rules, 2014, as amended, the Company will provide e-voting facility to the Shareholders to
exercise their vote for transacting the business through Postal Ballot.
DECLARATION BY INDEPENDENT DIRECTORS
Pursuant to provision of section 149(7) of the companies Act, 2013 the Company has
received necessary declaration from each Independent Directors that he meets the criteria
of Independence laid down in section 149(6) of the Companies Act, 2013 and Regulations 25
of SEBI (LODR) Regulations,2015.
PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS
In terms of Section 134 of the Act 2013 and the Corporate Governance requirements as
prescribed under the provisions of SEBI LODR Regulations, the Board had carried out
performance evaluation of its own, the Board Committees and of the Independent directors.
Further, Independent Directors at a separate meeting, discussed, reviewed and evaluated
performance of the Non-Independent Directors, Board as a whole and of the Chairman of the
Board, after taking into consideration the views of Executive and Non-Executive Directors.
The Board discussed and assessed its own composition, size, mix of skills and
experience, its Meeting Sequence, Effectiveness of Discussion, Decision Making, Follow-up
Action, Quality of Information and the Performance and Reporting by the Committees, viz.,
Audit Committee, Nomination and Remuneration Committee (NRC'), Stakeholders
Relationship Committee (SRC') and Corporate Social Responsibility Committee
(CSR').
They also assessed the quality, quantity and timeliness of flow of information between
the the Board that are necessary for the Board to effectively and reasonably perform its
duties. All the Independent Directors were present at the Meeting.
The performance of Individual Directors including all Independent Directors assessed
against a range of criteria such as contribution to the Development of Business Strategy
and Performance of the Company, understanding the major risks affecting the Company, clear
direction to the Management and Contribution to the Board cohesion. The Performance
Evaluation has been done by the entire Board of Directors, except the Director concerned
being evaluated. The Board noted that all Directors have understood the Opportunities and
Risks to the Company's Strategy and are supportive of the direction articulated by the
Management Team towards consistent improvement.
The Performance of each Committee was evaluated by the Board by seeking inputs from its
Members on the basis of the criteria such as matters assessed against terms of reference,
time spent by the Committees in considering matters, quality of information received, work
of each Committee, overall effectiveness and decision making and compliance with the
Corporate Governance requirements, and concluded that all the Committees continued to
function effectively, with full participation by all its Members and the Members of
Executive Management of the Company. The Directors expressed their satisfaction at the
performance of all concerned.
FAMILIARIZATION PROGRAMME
The Company has put in place a structured induction and Familiarization Programme for
all its Directors. The Company, through such programmes, familiarizes the Independent
Directors as well as any new appointee to the Board, with a brief background of the
Company, individual Roles, Rights and Responsibilities in the Company, Management
Structure, Company's operations and other relevant information which would enable them to
effectively discharge the responsibilities and functions conferred on them. They are also
informed about important Policies of the Company including the Code of Conduct for Board
Members and Senior Management Personnel and the Code of Conduct to Regulate, Monitor and
Report Trading by Insiders, etc.
The Familiarization Programme for Independent Directors in terms of provisions SEBI
LODR Regulations is uploaded on the website of the Company at www.bslimited.in.
KEY MANAGERIAL PERSONNEL
The Key Managerial Personnel of the Company, in accordance with the provisions of
Sections 2(51), 203 of the Companies Act, 2013 read with Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s)
or re-enactment(s) for the time being in force), are as under:
1. Mr. Rajesh Agarwal - Chairman & Managing Director
2. Mr. Arun Dogra - Whole-Time Director designated as CFO
Apart from the changes as mentioned under the "Board of Directors" Section,
there was change in the Company Secretary of the Company. During the year under review
Company's Management and consequent upon resignation of Ms. Alka Kumari with effect from
10.8.2017 from the post of Company Secretary of the Company your board had appointed Mr.
BSK Sirish as a Company Secretary and Compliance Officer of the Company w.e.f. 11.8.2017.
However he was relieved off his duties from the closing hours of 24.10.2017.
COMPLIANCE OFFICER
Consequent upon the resignation of Mr. BSK Sirish from the position of Company
Secretary, Mr. Arun Dogra, the Whole-time Director of the Company has been designated as
Compliance Officer with effect from 10.11.2017 under Regulation 6 of SEBI (LODR)
guidelines, 2015, till a new Company Secretary is appointed.
POLICY ON DIRECTOR'S APPOINTMENT, REMUNERATION AND OTHER DETAILS
Your Company has been constituted a Nomination and Remuneration Committee which is
empowered to nominate the number of members of the Board and various standing committees
based on their different experience levels, knowledge and educational qualifications in
different Sectors and discipline relating to the Company's business.
The remunerations paid to Executive Directors are in accordance with the recommendation
of the Nomination & Remuneration Committee as well as by the prescribed law. Due care
is also taken to ensure that the remuneration package is in consistent with the
recommended best practices in the country.
PARTICULARS OF REMUNERATION OF DIRECTORS / KMP / EMPLOYEES
The information required under Section 197(12) of the Act with Rule 5(1) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached
as Annexure III' which forms part of this Report.
The particulars of employees required to be furnished pursuant to Section 197(12) of
the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and
Remuneration of Management Personnel) Rules, 2014 forms part of this Report.
NUMBER OF MEETINGS OF THE BOARD
Five meetings of the Board were held during the financial year 2017-18, the details of
which are given in the Corporate Governance Report that is annexed to this Report as
Annexure V'. The intervening gap between any two meetings was not only within the
period prescribed by the Companies Act, 2013 but it was also in accordance with SEBI
(LODR) Regulations, 2015.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions contained in Section 134(3)(c) of the Companies Act, 2013
and subject to disclosures in the Annual Accounts, your Directors state as under: a) While
preparing the annual accounts of the financial year ended on March 31, 2018, the
applicable accounting standards have been followed and there are no material departures.
b) That the Director have selected appropriate accounting policies in consultation with
Statutory Auditors and applied them consistently to give a true and fair view of the state
of affairs of the Company at the end of financial Loss Account of the period
yearunderreview and Profit under report. c) Proper and sufficientcare has been taken for
maintenance of adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities. d) Annual Accounts have been prepared on a going
concern basis. e) The directors have laid down internal financial controls to be followed
by the Company and that such internal financial controls are adequate and were operating
effectively. f) The Directors have devised proper system to ensure compliance with the
provisions of all applicable laws and that such systems are adequate and operating
effectively.
STATUTORY AUDITORS
M/s. P. Murali & Co., Chartered Accountants, Statutory Auditors of the Company,
will retire at the conclusion of the ensuing AGM and, being eligible, have consented and
offered themselves for re-appointment as Statutory Auditors for the Financial Year
2018-19. Your Company has received stating written consent and a Certificate that they
satisfy the criteria provided under Section 141 of the Companies Act, 2013 read with the
Companies (Audit and Auditors) Rules, 2014 and that their re-appointment, if made, shall
be in accordance with the applicable provisions of the Companies Act, 2013 and Rules
issued thereunder that they are not disqualified for such re-appointment under the
provisions of applicable laws and also that there is no proceeding against them or any of
their partners pending with respect to professional matter of conduct.
As required under provisions of SEBI (LODR) Regulations, the Auditors has also
confirmed that they have subjected themselves to the peer review process of Institute of
Chartered issued Accountants of India (ICAI') and hold a valid Certificate by the
Peer Review Board of the ICAI.
The Audit Committee and the Board of Directors recommend the re-appointment of M/s. P.
Murali & Co., Chartered Accountants, as the Auditors of your Company for the Financial
Year 2018-19 till the conclusion of the next AGM.
Auditor's Adverse Observations and Management Response to Auditor's Adverse
Observations are given in the Annexure I' forming part of this Report.
COST AUDITORS
As per Section 148 of the Companies Act, 2013 read with Rules framed thereunder, M/s.
Srinivas & Co., Cost Accountants, (Firm Registration No. 00278) were re-appointed as
Cost Auditors for the Financial Year 2018-19 to conduct Cost Audit of the Accounts
maintained by the Company in respect of the various products prescribed under the
applicable Cost Audit Rules. The remuneration proposed to be paid to the Cost Auditors,
subject to the ratification, in terms of Section 148(3) of Companies Act, 2013, by the
members at the ensuing Annual General Meeting, would be Rs. 1,50,000/- (Rupees One Lakh
Fifty Thousand only) excluding out of pocket expenses, if any and applicable taxes.
Your Company has received consent from M/s. Srinivas & Co., Cost Accountants, to
act as the Cost Auditor for conducting audit of the cost records for the Financial Year
2018-19 along with a certificate confirming their independence and arm's length
relationship.
SECRETARIAL AUDITORS
In terms of the provisions of Section 204 of the Companies Act, 2013 read with the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Mr. Y.
Koteswara Rao, Practicing Company Secretary (Certificate of Practice No. 7427), was
appointed as Secretarial Auditor of the Company for the Financial Year 2017-18. The
Secretarial Audit Report submitted by him in the prescribed Form MR-3 is attached as
Annexure - VI' and forms part of this Report. There are no qualifications or
observations or adverse remarks of the Secretarial Auditor in the Report issued by him for
the Financial Year 2017-18 which call for any explanation from the Board of Directors.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return as on March 31, 2018 in the prescribed Form No. MGT-9,
pursuant to Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies
(Management and Administration) Rules, 2014 is attached as Annexure II' to this
Report.
RELATED PARTY TRANSACTIONS
With reference to Section 134(3)(h) of the Companies Act, 2013, all contracts and
arrangements with related parties under Section 188(1) of the Act, entered by the Company
during the financial year, were in the ordinary course of business and on an arm's length
basis. Further, there were no transactions with related parties which qualify as material
transactions under the SEBI Listing Regulations. Thus, disclosure in form AOC-2 in terms
of Section 134 of the Companies Act, 2013 is not required.
The details of the related party transactions as per Accounting Standard 18 are set out
in Note 39 to the Standalone Financial Statements forming part of this report.
The Company has also formulated a policy on Related Party Transactions as approved by
the Board of Directors which has been uploaded on the website of the Company.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Pursuant to provisions of Section 186 of the Companies Act, 2013 the particulars of
Loans, Guarantees and Investments are disclosed in the Financial Statement.
RISK MANAGEMENT
Risk is an integral part of business and your Company is committed to managing risks in
a proactive and efficient manner. Your Company periodically assesses risks in the internal
and external environment along with the cost of treating risks, and incorporates risk
treatment fromplans thein its strategy, business and operational plans.
Your Company, through its Risk Management process, strives to contain impact and
likelihood of the risks within the risk appetite as agreed from time to time with the
Board of Directors. As per the requirements of the Regulation 21 of SEBI LODR Regulations,
your Company has constituted a Risk Management Committee to oversee the risk management
efforts in the Company under the Chairmanship of Mr. Rajesh Agarwal, Chairman &
Managing Director of the Company. The details of the Committee along with its charter are
set out in the Corporate Governance Report forming part of this Report. There are no risks
which in the opinion of the Board threaten the existence of your Company. However, some of
the risks which may pose challenges are set out in the Management Discussion and Analysis
which forms part of this Report.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
Your Company is committed to highest standards of ethical, moral and legal business
conduct. Accordingly, the Board of Directors has formulated a Whistle Blower Policy which
is in compliance with the provisions of Section 177(10) of the Companies Act, 2013 and
Regulation 22 of the SEBI LODR Regulations. The Policy provides for a framework and
process whereby concerns can be raised by its employees against any kind of
discrimination, harassment, victimization or any other unfair practice being adopted
against them. More details on the Vigil Mechanism and the Whistle Blower Policy of your
Company have been outlined in the Corporate Governance Report which forms part of this
Report.
CORPORATE SOCIAL RESPONSIBILITY
Pursuant to the provisions of Section 135 of the Companies Act, 2013 read with CSR
Rules, the Company has constituted CSR committee and formulated CSR policy. The CSR Policy
outlines the CSR vision of your Company based on embedded tenets of trust, fairness and
care. The Policy primarily rests on four broad tenets: Healthcare, Education, Community
Development and Ecology and the same is within the ambit of Schedule VII of the Act. The
Annual Report on CSR activities in accordance with the Companies (Corporate Social
Responsibility Policy) Rules, 2014, is set out herewith as Annexure VII' to this
Report.
Board of Directors of your Company had decided not to spend money on CSR activities
till the NCLAT order. Also, your Company had also booked a loss for the FY ended
31.3.2018, therefore did not provide any funds under the CSR guidelines. However,
CORPORATE GOVERNANCE REPORT
Your Directors adhere to the requirements set out under the provisions of SEBI (LODR)
Regulations. In compliance with Regulation 34 of the said Regulations, a separate report
on Corporate Governance is attached as Annexure V' and forms part of the Annual
Report. The Chairman & Managing Director's Declaration regarding the compliance of
Code of Conduct and Ethics for Board Members and Senior Management Personnel forms part of
Report on Corporate Governance. The requisite Certificate Auditors of the Company
confirming Compliance to the conditions of Corporate Governance as stipulated under the
provisions of SEBI LODR Regulations is attached to the Report on Corporate Governance.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As stipulated under the provisions of SEBI (LODR)
Regulations, the Management Discussion and Analysis forms an integral part of this
Report and gives detail of the overall Industry Structure, Performance and State of
Affairs of the Company's various businesses, Internal Controls and their adequacy, Risk
Management Systems and other material developments during the Financial Year 2017-18.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION
AND REDRESSAL) ACT, 2013
The Company has in place, policy on Prevention, Prohibition and Redressal of Sexual
Harassment for women at workplace in accordance with the requirements of The Sexual
Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An
Internal Complaints Committee (ICC') has been in place to redress complaints
received regarding sexual harassment. The policy has set guidelines on the redressal and
enquiry process that is to be followed by complainants and the ICC, whilst dealing with
issues related to sexual harassment at the work place. All women employees are covered
under this policy. The Company has not received any complaints during the year under
review.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Companies Act, 2013 re-emphasizes the need for an effective Internal Financial
Control System in the Company which should be adequate and shall operate effectively. Rule
8 (5) (viii) of Companies (Accounts) Rules, 2014 requires the information regarding
adequacy of Internal Financial Controls with reference to the financial statements to be
disclosed in the Boards report.
To ensure effective Internal Financial Controls the Company has laid down the following
measures: o Compliance relating to Cost Records of the Company is ensured by way of Cost
Audit; o The Internal Auditors have also been engaged for providing assistance in
improvising IFC framework and deployment of Self-Assessment Tool.
LISTING ON STOCK EXCHANGES
The Equity Shares of your Company continue to remain listed on the BSE Limited
(BSE') and the National Stock Exchange of India Limited (NSE'), but Company
has received a suspension of trading in shares notice dated 11.05.2018 from Stock
Exchanges due to non-filing of Annual Reports for last two continuous years i.e. 2015-16
& 2016-17. The Annual Listing Fee for the Financial Year 2018-19 has been duly paid
within the stipulated time to both the Stock Exchanges.
As stated earlier, your Company received a notice dated May 11, 2018 from Stock
Exchanges suspending trading of equity shares due to non-filing of Annual Reports for last
two years i.e. 2015-16 & 2016-17. Your Board has decided to file an Annual Reports
which comprises of Financial Statements along with Auditor's Report & Director's
Report, etc. for the Shareholders' approval for the said two financial years viz. 2015-16
& 2016-17 along with current financial year 2017-18.
PUBLIC DEPOSITS
During the year under review, your Company has not accepted any Deposit within the
meaning of Sections 73 & 74 of the Companies Act, 2013 read with the Companies
(Acceptance of Deposits) Rules, 2014 (including any Statutory modification(s) or
re-enactment(s) for the time being in force).
TRANSFER TO RESERVES
Your Company has not transferred any amount to the General Reserves for the Financial
Year 2017-18.
PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN
EXCHANGE EARNINGS AND OUTGO
The particulars relating to Conservation of Energy, Technology Absorption and Foreign
Exchange Earnings and outgo as required to be disclosed under Section 134 of the Companies
Act, 2013 read with the Companies (Accounts) Rules, 2014, is set out herewith as
Annexure IV' which forms part of this Report.
ACKNOWLEDGEMENTS
Your Directors wish to place on record their gratitude to the Shareholders, Customers,
Vendors, Bankers, Financials Institutions, Government Authorities, Contractors, Joint
Venture Partners and all other Stakeholders for their continued support and valuable
assistance and co-operation to the Company. Your Directors take this opportunity to
commend the continued commitment and dedication of employees at all levels and look
forward to valuable sustained support and encouragement.
|
For and on behalf of the Board of Directors |
|
BS LIMITED |
Date : June 14, 201 |
(RAJESH AGARWAL) |
Place : Hyderabad |
CHAIRMAN & MANAGING DIRECTOR |
|