172@29@16@18!~!172@29@0@53!~!|commonstore|commonfiles|moneycontrol_header.php?cid=0&s_cid=0&radar_off=0&is_revamped_header=0&is_responsive=1&sec=PNC_ANNUALREPORT&priceinter=1&frommc=1!~!www|moneycontrol|com!~!|commonstore|commonfiles|moneycontrol_header.php!~!is_mobile=false
Moneycontrol
SENSEX NIFTY
you are here:

Bedmutha Industries Ltd.

BSE: 533270 | NSE: BEDMUTHA |

Shares falling in the `Trade-to-Trade` or `T-segment` are traded in this series and no intraday is allowed. This means trades can only be settled by accepting or giving the delivery of shares.
Series: BE | ISIN: INE844K01012 | SECTOR: Steel - Medium & Small

BSE Live

Sep 25, 16:00
19.15 0.00 (0.00%)
Volume
AVERAGE VOLUME
5-Day
357
10-Day
578
30-Day
1,085
10
  • Prev. Close

    19.15

  • Open Price

    19.15

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    18.60 (510)

NSE Live

Sep 25, 15:32
17.95 0.85 (4.97%)
Volume
AVERAGE VOLUME
5-Day
9,662
10-Day
14,346
30-Day
13,557
2,980
  • Prev. Close

    17.10

  • Open Price

    17.40

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    0.00 (0)

Annual Report

For Year :
2018 2016 2015 2014 2013 2011

Director’s Report

BOARD’S REPORT

To the Members

bedmutha industries limited

The Board of Directors presents the 28th Annual Report together with the Audited Financial Statements (Standalone and Consolidated) for the financial year ended 31st March, 2018.

financial highlights OF PERFORMANCE:

The financial performance of the Company for the year ended on 31st March, 2018 is summarized as under:

(Amount in Rs, Lakhs)

Particulars

Standalone

Consolidated

2017-18

2016-17

2017-18

2016-17

Income from Operations

60,387.21

69,851.22

60,418.22

69,851.22

Add : Other Income

3,310.16

2,074.52

3,313.83

2,115.85

Profit before Interest, Depreciation and Taxes

486.20

5,099.44

400.82

5,149.06

Less : Finance Cost

6,005.64

5,798.67

6,006.97

5,800.44

Profit/ (Loss) before Depreciation and Taxes

(5,519.44)

(699.23)

6,407.79

(651.38)

Less : Depreciation

2,679.24

2,911.34

2,688.47

2,919.70

Profit/ (Loss) Before Taxes

(8,198.68)

(3,610.57)

(9,096.26)

(3,571.08)

Less : Provision for Current Taxation

-

-

3.45

12.90

Less: Provision for Deferred Taxation

-

-

(1.02)

0.20

Less: Taxes in respect of earlier years

-

-

1.85

Profit/ (Loss) after Taxes

(8,198.68)

(3,610.57)

(9,098.69)

(3,586.03)

less: Minority Interest

-

-

(407.28)

11.10

add: Share in Profit / (Loss) of Associates

-

-

8.8

(17.40)

Profit / (Loss) for the year

(8,198.68)

(3,610.57)

(8,682.61)

(3,614.53)

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

During the year, the Standalone, Income from operations of your Company decreased by 13.55%, from Rs, 698.51 Crores to Rs, 603.87 Crores. The company has incurred profit of Rs, 4.86 crores before interest, depreciation and taxes but incurred loss of Rs, 81.99 Crores after taxes as compared to previous year.

During the year, the Consolidated, Income from operations of your Company decreased by 13.50%, from Rs, 698.51 Crores to Rs, 604.18 Crores. The company has incurred profit of Rs. 4.00 crores before interest, depreciation and taxes but incurred loss of Rs, 86.82 Crores after taxes as compared to previous year.

FINANCIAL PERFORMANCE OF SUBSIDIARY:

Our Company has one subsidiary i.e. M/s. Kamalasha Infrastructure and Engineering Private Limited (CIN: U45200MH2007PTC167532). The financial performance of the subsidiary is as under:

(Rs, In lakhs)

Particulars

2017-18

2016-17

Income from Operations

567.24

637.07

Add : Other Income

3.68

41.33

Profit before Interest, Depreciation and Taxes

(887.02)

49.61

Less : Finance Cost

1.33

1.77

Profit/ (Loss) before Depreciation and Taxes

(888.35)

47.84

Less : Depreciation

9.23

8.36

Profit/ (Loss) Before Taxes

(897.58)

39.48

Less : Provision for Current Taxation

3.45

12.90

Less: Provision for Deferred Taxation

(102)

0.20

Less: Taxes in respect of earlier years

-

1.85

Profit/ (Loss) after Taxes

(900.00)

24.54

During the financial year 2017-18, the Income from operations of the company decreased by 10.96% from Rs, 637.07 lakhs to Rs, 567.24 lakhs and incurred a Loss Before Tax of Rs, 897.58 Lakhs against the profit of Rs, 39.48 Lakhs and Net Loss after tax of Rs, 900.00 Lakhs against the Net Profit of Rs, 24.54 Lakhs of the previous year respectively.

consolidated FINANCIAL STATEMENTS:

In accordance with the Companies Act, 2013 (“the Act”) and Accounting Standard (AS-21) on Consolidated Financial Statements read with AS-23 on Accounting for Investments in Associates and AS-27 on Financial Reporting of Interests in Joint Ventures, the audited consolidated financial statement is provided in the Annual Report. The summarized consolidated results are 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 2017-18 on account of loss incurred by the company. BUSINESS REVIEW:

The Financial Year ended 31st March 2018, was one of the most bad year for the Company on account many bad events beyond the control of Management which lead to an extra ordinary losses which is explained in subsequent paragraph.

The First restructuring done by the lender ended on 01/01/2017 and accordingly repayment of term loan started. This repayment scheduled created a huge cash flow mismatch since the first restructuring done by the Bankers w.e.f. 01/01/2015 could not help the Company to reach the rated capacity and cash surplus as envisaged in the projection given during the restructuring proposal on account of many reasons.

a) As per the restructuring proposal additional term loan was sanctioned to be utilized for the last mile capex and for new machinery for rope and copper wire division, as per the plan all capex was to be completed by June 2015 but due to many technical reasons the lenders could not disburse the loan amount and the said loan was released after 1 year, further one of the Consortium Bank did not disburse their share in totality. All this resulted into a vicious circle where the plant could not be ramped up and thus necessary cash flows could not be generated.

b) Due to non-release of additional term loan fixed cost of the Company which is to the tune of Rs, 2 crores per month could not be absorbed resulting into continuous draining of working capital, thus further reducing the capacity utilization.

Due to above mismatch in cash flow, we decided to approach our existing lender to reassess the loan and restructure in such a way to match the cash flow. In view of this number of meetings has been held with the Lenders and they have co-operated and asked us to submit our Resolution Plan and the same on the date of this report is under active progress for final resolution.

As mentioned above, this year we had booked an extra ordinary losses of one time nature to the extent of Rs, 43.3 Crores, the reasons for the same was as below:

As it was reported in July-2017 there was heavy rains and thunderstorm and shed of plant 1 got damaged due to heavy wind pressures and continuing the production in the damaged shed could have pose danger to the life of Employees and property. As it was risky, management had to shut down plant 1 abruptly and suddenly.

Similarly, Plant 3 and 4, which were small units on 1000 Sq. Meter Plot area have also to be discontinued from production as they were fed from plant 1. Plant 1 was responsible to feed raw material to plant 3 & Plant 4.

About the shutdown of production of above mentioned three (3) units of our Sinnar location, we had informed the Stock Exchanges and Lenders immediately.

After shutting down of the above plants, management carried out inspection of the inventory at the plant, most of which was in WIP form. The following was observed during this process:

- Large part of this inventory was in WIP (non-standard) condition and hence cannot directly be used by other customers

Due to the above circumstances, it was decided to dispose off the inventory and the same was carried out. As these were in WIP stage it became non-standard items and there was no other alternative disposal than melting. These could only be sold to the scrap dealers or Steel plant using scrap as RM. WIP and some consumable inventory become obsolete due to its non-usability and presented as scrap item and valued at NRV due to which cost of Consumption during the period has increased to the tune of Rs, 1,325.61 Lakhs.

Thus due to Closure of Sinnar Plants 1,3 & 4 company incurred one-time expenses in relation to closure which are given below:-

(In Crores)

Obsolence on WIP & consumables

13.3

- Cost to retrieve the used lead and zinc of Sinnar plant at Nardana plant

8.0

- Discount On Sales / One time settlement with debtors

1.3

- Bad debts written off

1.7

- Labour cost for 9 months

4.5

- Staff cost for 7 months

2.7

- One time settlement with employees and others

2.8

Low capacity utilization on account of liquidity issues

9.0

TOTAL

43.3

The adversity of under utilization of capacity and the loses for last 4 years year has forced us to restructure the organization internally and very homogeneous team of personnel created which is now fully geared up to ride the upswing in the economy. We are very hopeful that the lender will approve our Resolution Plan to restructure the loan in a workable manner.

The value added lines namely wire rope, copper foil has become functional and the product is well accepted both domestically and internationally. Trial production for Tyre Beed line has started, copper wire division trials have also started.

In continuous drive of consolidating the business, we have stopped the operation of plant 1, 3 and 4 of Sinnar and are proposing to sale the same and utilize the funds to reduce the debt of the Company.

We have also kept the non core assets namely 52 acres of Rasegaon land and 12 acres of Sinnar Land on block for sale and the proceed will be utlised to reduce the debt.

In our Resolution Plan to the lenders we have bifurcated the loan into sustainable and non sustainable. Once this is done, we are more than positive that we will be able to bring the Company out of the Red within 3 years from now.

CHANGES iN THE NATuRE OF BuSiNESS:

There was no change in the nature of business during the year ended 31st March, 2018.

SHARE CAPiTAL:

The paid up Equity Share Capital as on March 31, 2018 was Rs, 24,53,16,110. The Company has neither issued shares with differential voting rights nor granted stock options or sweat equity.

DEPOSiTS:

During the year 2017-18, the Company did not accept any deposit from public within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

industry scenario:

India’s finished steel consumption grew at a CAGR of 5.69 per cent during FY08-FY18 to reach 90.68 MT. India’s crude steel and finished steel production increased to 102.34 MT and 104.98 MT in 2017-18, respectively. In 2017-18, the country’s finished steel exports increased 17 per cent year-on-year to 9.62 million tonnes (MT), as compared to 8.24 MT in 2016-17. Exports and imports of finished steel stood at 0.99 MT and 1.22 MT, during Apr-May 2018.

Government of India’s focus on infrastructure and restarting road projects is aiding the boost in demand for steel. Also, further likely acceleration in rural economy and infrastructure is expected to lead to growth in demand for steel.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

The Management Discussion and Analysis Report for the year under review, as stipulated under Regulation 34(2)(e) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is given in Annexure 1 forming 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, a statement showing the details of top ten employees and the names of other employees drawing the remuneration in excess of the limits set out in the said rules are provided in Annexure 2 of this Board’s Report.

The Disclosures pertaining to remuneration and other details as required under Section 197(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 the Companies 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, the Board of Directors at their meeting held on 12th February, 2015 formulated the Nomination and Remuneration Policy of your Company on the recommendations of the Nomination and Remuneration Committee. The salient aspects covered in the Nomination and Remuneration Policy, covering the policy on appointment and remuneration of Directors and other matters have 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 the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors/employees of your Company is set out in Form MGT - 9 which also forms part of this Report and is also 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 March 31, 2018 and the Statement of Profit and Loss for the year ended on that date of Subsidiary Company, M/s. Kamalasha Infrastructure and Engineering Private Limited is attached to this report. However, the financial information of Subsidiary Company is disclosed in the Annual Report in compliance with this section. The consolidated financial statements presented by the Company include the financial result of its Subsidiary Company.

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 of Company''s Subsidiaries and associates is attached as Annexure 3 to the financial statements of the Company.

In accordance with third proviso of Section 136(1) of the Companies Act, 2013, the Annual Report of the Company, containing therein its standalone and the consolidated financial statements has been placed on the website of the Company. Further, as per fourth proviso of the said section, audited annual accounts of the subsidiary company have also been placed on the website of the Company, www.bedmutha.com. Shareholders interested in obtaining a copy of the audited annual accounts of the subsidiary company may write to the Company Secretary at the Company’s registered 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 or tribunals 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 the financial year 2017-18 with related parties are in compliance with the applicable provisions 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 into any materially significant related party transactions with Promoters, Directors, Key Managerial Personnel or other designated persons, which may have a potential conflict with the interest of the Company at large. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.

All Related Party Transactions are placed before the Audit Committee and the Board of Directors for their approval.

The policy on Related Party Transactions as approved by the Board may be accessed on the Company’s website (www. bedmutha.com).

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

CORPORATE GOVERNANCE:

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Company has also implemented several best Corporate Governance practices as prevalent throughout the country. The Report on Corporate Governance as stipulated under Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section forming part of the Annual Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance.

BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL:

As on 31st March, 2018, the Company has 6 (Six) Directors consisting of 3 (Three) Independent Directors, and 3 (Three) Executive Directors.

Mrs. Vinita A. Vedmutha (DIN:01729366), resigned from the post of Whole-Time Director and continue as Senior Chief Executive Office of the Company w.e.f. 14th August, 2017 , Mr Pradeep Ghare (DIN:07421895) Non-executive & Independent Director resigned w.e.f. 14th September 2017 and Mr. K.R. Bedmutha (DIN:01724420)resigned from the post of Chairman & Whole-Time Director of the Company w.e.f. 14th August, 2018.

The Board of Directors record their appreciation for the contribution made by the said Directors. Further, taking into consideration the contribution made by Mr. K. R. Bedmutha since inception, he has been appointed as Advisor and Chairman Emritus by the Board of the Company.

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

On the recommendation of the Nomination and Remuneration Committee and Audit Committee, the Board of Directors at its meeting held on 14th August, 2018, re-appointed Mr. Vijay K Vedmutha (DIN:00716056) as the Managing Director and Mr. Ajay K Vedmutha (DIN:01726879) as the Managing Director for a period of 5 Years w.e.f. 14th November, 2018 to 13th November, 2023, subject to approval of the shareholders in the ensuing General Meeting. Mr. Vijay Vedmutha has also been appointed as the Chairman by the Board of Directors.

The brief resume of the Director seeking appointment or re-appointment and other related information under Regulation 36 of the SEBI (LODR) Regulations, 2015 and Secretarial Standard-2 (SS-2) has been provided in the Notice convening 28th Annual General Meeting.

During the year, Mr. Prashant Paradkar (ACS No.: 45585)resigned from the post of the Company Secretary and Compliance Officer of the Company w.e.f. 18th May, 2018 and Mr. Ajay Topale (ACS No.:26935) was appointed as Company Secretary and Compliance Officer of the Company w.e.f.14th August, 2018.

Presently, Mr. Vijay Vedmutha, Chairman and Managing Director, Mr. Ajay Vedmutha- Managing Director and Chief Financial Officer, Ms. Vinita Ajay Vedmutha, Chief Executive Officer and Mr. Ajay Topale, Company Secretary are the Key Managerial Personnel of your Company in accordance with the provisions of Sections 2(51) and 203 of the Companies Act, 2013 read with the Companies (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 any manner as stipulated under section 149(6) of Companies Act, 2013 and at the same time possess relevant expertise and experience that are additive to the Board of the company for delivering higher growth and higher values. Further, the Company has received declarations from all the Independent Directors confirming that they meet the criteria of Independence as prescribed under Section 149(6) of the Companies Act, 2013 and Regulation 16(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 Disclosure Requirements) Regulations, 2015, a meeting of the Independent Directors is required to be held to evaluate the performance of the Non-Independent Directors. Accordingly, a meeting of Independent Directors was held on 12th February, 2018 wherein the performance of the Non-Independent Directors, including the Chairman, was evaluated.

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 its own performance, the Directors individually as well as the evaluation of the working of the members of Audit, Nomination and Remuneration and other Compliance Committees. The manner, in which the evaluation is carried out, has been explained in the Corporate Governance Report.

familiarization PROGRAMME FOR INDEPENDENT DIRECTORS:

Every new Independent Director of the Board attends an orientation program. To familiarize the new Independent Director with the strategy, operations and functions of our Company, the Executive Directors/ Senior Managerial Personnel make presentations to the new Independent Director about the company’s strategy, operations, product and service and offerings, markets, organization structure, human resources, technology quality, facilities and risk management.

number OF BOARD MEETING:

The meeting of the Board of Directors was held 5 (Five) times during the financial year 2017-18 and the intervening gap between any two succeeding meetings was not more than 120 days as prescribed under Section 173 of the Companies Act, 2013. Your Company has complied with the provisions of Chapter XII - Meetings of Board and its Powers, of the Companies Act, 2013 with respect to meetings of the Board. The details regarding the Board meeting and the attendance of the Directors present in such meeting is annexed to the Corporate Governance report.

committees OF THE COMPANY: Audit Committee:

The Board has properly constituted the Audit Committee in compliance with Section 177 of Companies Act, 2013 and Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 which consists of the following members’ viz.:

Name of Member

Designation

Category

Mr. Narayan Kadu

Chairman

Independent Director

Mrs. Vandana Sonwanye

Member

Independent Director

Mr. Vijay Vedmutha

Member

Executive Director (Managing Director)

Mr. Vasant B. Joshi

Member

Independent Director

The details regarding Composition, meeting and attendance of the members have been mentioned to the Corporate Governance Report.

All the recommendations of the Audit Committee during the year were accepted by the Board of Directors of the Company. Establishment of Vigil Mechanism / Whistle Blower Policy:

The Company has established a vigil mechanism and oversees through the committee, the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided to any one complainant to have direct access to the Chairman of the Audit Committee via e-mail ID. The Vigil Mechanism Policy of the Company is 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 in accordance with the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 which comprises of the following members viz.:

Name of Member

Designation

Category

Mr. Narayan Kadu

Chairman

Independent Director

Mrs. Vandana Sonwaney

Member

Independent Director

Mr. Vasant B. Joshi

Member

Independent Director

The details regarding Composition, meeting and attendance of the members have been mentioned to the Corporate Governance Report.

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

The Company has adopted a policy titled as “Nomination & Remuneration Policy” which inter alia includes Company''s policy on Board Diversity, selection, appointment and remuneration of directors, criteria for determining qualifications, positive attributes, independence of a director and criteria for performance evaluation of the Directors.

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

Stakeholder Relationship Committee:

The Board of Directors has constituted Stakeholders Relationship Committee in accordance 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 the members 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 Rupees five hundred crore or more, or turnover of Rupees one thousand crore or more, or a net profit of Rupees five crore or more during any financial year shall constitute the CSR Committee.

Considering the above threshold limit specified above, the Company is not required to constitute the CSR Committee. RISK MANAGEMENT PoLICY:

The Company has implemented Risk Management Policy and the Board of Directors has prepared a comprehensive framework of risk management for assessment of risks and to determine the responses to these risks so as to minimize their adverse impact on the organization. The policy as approved by the Board of Directors is uploaded on the Company’s website. (www.bedmutha.com)

The Company manages monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. The Company’s management systems, organizational structures, processes, standards, code of conduct and behaviors together form the Bedmutha Management System (BMS) that governs how the Group conducts the business of the Company and manages associated risks.

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

Risk & Mitigation:

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

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

internal financial CONTROL SYSTEMS AND THEIR ADEQUACY:

Your Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed. Your Company has introduced several improvements such as Integrated Enterprise Risk Management, Internal Control Management and Assurance Frameworks and processes to drive a common integrated view of risks, optimal risk mitigation responses and efficient management of internal control and internal audit activities. Risk management and internal control frameworks are designed and implemented to manage rather than completely eliminated the risk of failure to achieve business objectives.

The Company has appointed M/s. Swati Ware & Co., Chartered Accountant as an internal Auditor to have check on the adequacy of controls in the overall operations and functioning of various departments. The monthly reports of the Internal Auditors are placed before the Audit committee. It is a key component which assists the management in discovering controls, weakness, regulatory violations, policy violation and operational inefficiencies. This self-discovery of issues provides the management an ability to take corrective action in order to maintain the safety, soundness, profitability and integrity.

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

The loans, guarantees and investments covered under section 186 of the Companies Act, 2013 form part of the notes no. 3 & 7 to the Financial Statements provided in this Annual Report.

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

There are no material changes and commitments made which may affect financial position of 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 Accountants, Jalgaon (Firm Registration No. 115959) were appointed as Statutory Auditors of the Company at the Annual General Meeting held on September 25, 2017, for a period of five (5) consecutive years commencing from the conclusion of 27thAGM till the conclusion of the 32nd AGM of the Company, subject to ratification by the members, if any, required as per applicable laws from time to time, at every Annual General Meeting.

Pursuant to notification of certain sections of the Companies (Amendment) Act, 2017, on May 7, 2018, the requirement of ratification of auditors by the members is no longer required. However, as matter of abundant precaution, the ratification by the members is being sought for the approval of members in the ensuing Annual General Meeting.

Further, taking into consideration this recent amendment, the annual ratification will not be sought from next year onwards.

AUDITORS’ REPORT:

During the year under review, there were no frauds reported by the Auditors to the Audit 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 year ended 31st March 2018 in respect of following matters:

a) In respect of preparation of financial statements of the company on going concern basis, for the reasons stated therein, during the year, the Company has incurred net loss of Rs, 81.98 crores resulting into accumulated losses of Rs, 127.70 crores. The Company''s current liabilities exceed current assets. These matters require substantial debt reduction in the company also additional cash flow is required to fund the operations as well as other obligations.

Management Reply:-

- As bankers did not disburse sanctioned Rs, 35.00 crores term Loan fully and timely and due to sudden closure of Sinnar Plant 1 due to the safety of workers as the old shed of Plant 1 was not safe, the Company has incurred a loss of Rs, 81.98 crores in financial year 2017-18. This was a one-time event.

Company is in the process of restructuring its loan from bankers which will result in loan reduction by approx. Rs, 200 crores due to conversion of term loan in CRPS. This will improve the net worth of the company by Rs, 200.00 crores and reduction of debt of the company by Rs, 200.00 crores.

- Secondly, to improve the liquidity position and capacity utilization/Operations of the company, company is in the process of raising minimum funds of Rs, 40.00 crores from Investors or NBFC. This is also a precondition from Bankers to pass the restructuring plan.

- Company being a Mega project has un-accrued Incentive from Government of Maharashtra to the tune of Rs, 208.00 crores. Only Rs, 60.00 crores of the incentive have been accrued till 31st March,2018.

- Also company has decided to sell its non-core assets to improve its liquidity for operations and also for Debt reduction. Accordingly, financial statements have been prepared on the basis that company is a going concern.

b) The Company has defaulted in repayment of loans and borrowings from banks Management Reply:-

The major reason behind for default of loans and borrowings to Lenders was mainly due to delay and partial non disbursement of Rs. 35.00 crores term loans from banks due to which the value added product lines like wire rope, copper foil and tyre breed wire started late by 18 to 36 months which in turn have resulted into non absorption of fixed cost to the tune of Rs. 2.00 crores per month resulting into continuous draining of working capital. Thus, further reducing the capacity utilization. Due to above mismatch in cash flow, we decided to approach our existing lenders to reassess the loan and restructure in such a way to match the cash flow. In view of this number of meetings has been held with the Lenders and they have co-operated and asked us to submit our Resolution Plan and the same on the date of this report is under active progress for final resolution.

c) On the basis of the written representations received from the directors as on 31st March, 2018 taken on record, other than Mr. K.R Bedmutha, none of the directors is disqualified as on 31st March, 2018 for appointment in any other company as a director in terms of sub-section (2) of section 164 of the Act. Further, Mr. K.R Bedmutha, Chairman intimated about the Notice received from the Registrar of Companies, Mumbai, Maharashtra for Striking-off the name of ‘KMK Foods Private Limited’, in which he was as a Director. He also informed that the Hon’ble High Court had stayed the Order of the Ministry of Corporate Affairs (MCA) for disqualification of Director of the struck-off companies. Hence, until the final judgement is passed by the Hon’ble Court, the matter will remain sub-judice.

Management Reply:-

Mr. K.R Bedmutha, Chairman intimated the Company about the Notice received from the Registrar of Companies, Mumbai, Maharashtra for Striking-off the name of ‘KMK Foods Private Limited’, in which he was as a Director. He also informed the Company that the Hon’ble Supreme Court admitted a special leave petition of the Ministry of Corporate Affairs (MCA) and stayed the Order of the Hon’ble High Court, Bombay which gave relief to the those disqualified Directors of the struck-off companies. Hence, until the final judgement is passed by the Hon’ble Supreme Court, the matter will remain sub-judice.

INTERNAL AUDITORS:

M/s. Swati Ware & Co., Chartered Accountants, is the Internal Auditors of the Company 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 the Companies (Audit and Auditors) Rules,

2014, your Company has to appoint cost auditors for conducting the audit of cost records of the applicable products of the Company for the financial year. Accordingly, during the year, your Company has appointed M/s. Ravindra Keshav Deodhar, Cost Accountants (Firm Registration No.: 102138) to conduct the cost audit of the Company for the financial year 2017-18. The ratification of the remuneration payable to the Cost Auditors shall be sought from shareholders in the ensuing Annual General Meeting.

cost records

The Company is maintaining the Cost Records as specified by the Central Government under Section 148(1) of the Companies Act, 2013.

secretarial auditors :

In terms of Section 204 of the Act and the Rules made there under, Mr. Ved Prakash, Designated Partner of M/s. S. Anantha & Ved LLP (LLPIN: AAH-8229) had been appointed as the Secretarial Auditors of the Company for the financial year 2017-18.

The Secretarial Audit Report given by Mr. Ved Prakash, Practicing Company Secretary in Form MR-3 is given in Annexure 5 forming part of the Board’s Report. The Secretarial Audit Report contain an observation with respect to the letter Notice received from the Registrar of Companies, Mumbai, Maharashtra for Striking-off the name of ‘KMK Foods Private Limited’, in which Mr. K. R. Bedmutha was a Director. He also informed the Company that the Hon’ble Supreme Court admitted a special leave petition of the Ministry of Corporate Affairs (MCA) and stayed the Order of the Hon’ble High Court, Bombay which gave relief to the those disqualified Directors of the struck-off companies. Hence, until the final judgment is passed by the Hon’ble Supreme Court, the matter will remain sub-judice.

EXTRACT OF ANNUAL RETURN :

Pursuant to Section 92(3) of the Companies Act, 2013 (‘the Act’) read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the extract of annual return 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 your Company hereby state that:

(i) In the preparation of the Annual accounts for the year ended 31st March 2018, the applicable accounting standards have been followed along with proper explanation related to material departure(s), if any;

(ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2018 and of the loss of the Company for the year ended on that date;

(iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the 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 be followed by the company and that such internal financial controls are adequate and are operating effectively; and

(vi) The Directors have devised proper systems to ensure compliance with the provisions of 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 Company is to attract, retain and develop talent. The Board wishes to place on the record its appreciation of the contributions made by all employees ensuring high levels of performance 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 Exchange Earnings 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 lying unpaid or unclaimed for a period of seven years. Therefore, there were no funds which were required to be transferred 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 of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the year 2017-18, no complaints were received regarding sexual harassment. Further, the Company is conducting the awareness programs at regular intervals.

OTHER MATERIAL INFORMATION:

During the year under review, the registered office of the Company has been shifted from A-32, STICE, Sinnar, Musalgaon MIDC, Sinnar, Nashik -422103 to A-70/71/72, STICE, Sinnar, Musalgaon MIDC, Sinnar Nashik -422112.

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 premier professional bodies in India.

CAUTIONARY STATEMENT:

Statement in the Directors’ report and the Management Discussion and Analysis describing the company’s objectives, expectations or predictions, may be forward looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in statement. Important factors that could influence the company operation include: global and domestic demand and supply conditions affecting selling prices, new capacity additions, availability of critical material and their cost, changes in government policies and tax laws, economic developments of the country and other factors which are material to the business operations of the company.

ACKNOWLEDGEMENT:

Your Directors wish to thank and acknowledge the contributions of Financial Institutions, Banks, Government Authorities, dealers, suppliers, business associates, auditors, consultants and the Company’s valued customers for their assistance and co-operation and the esteemed shareholders for their continued trust and support. The Directors also wish to acknowledge members of Bedmutha Group at all levels for their spirit of commitment, dedication and support extended in challenging times.

For and on behalf of Board of Directors of

bedmutha industries limited

Vijay Vedmutha

Chairman & Managing Director

DIN: 00716056

Date: 14th August, 2018

Place: Sinnar

Director’s Report