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BPL

BSE: 500074|NSE: BPL|ISIN: INE110A01019|SECTOR: Consumer Goods - Electronic
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Directors Report Year End : Mar '18    Mar 16

Dear Members,

The Directors have pleasure in presenting their report along with the audited accounts for the year ended March 31,2018.

REVIEW OF OPERATIONS

Building upon a good foundation set up in 2016-17, your company has maintained its course in successfully reviving its Consumer Durables Business. Despite severe competition from International brands aimed at gaining market share with limited focus on short term retained earnings, and regulatory headwinds, as exemplified by a sharp rise in import duties on TVs and Microwave ovens, BPL’s Consumer Durables Business witnessed a year on year revenue growth of close to 45% in 2017-18. Positive customer reviews, exemplary quality standards and feature rich products, and a customer focused value proposition offered by the company, have made it one of the most preferred online brands in the country, with several of its products being top sellers through the year.

In the past year, your company also aggressively launched a range of new products including Side-by-side Refrigerators, Inverter Air Conditioners and 4K Ultra HD LED Televisions. With these introductions, BPL now has a complete consumer durables portfolio including LED TVs, Washing Machines, Microwave Ovens, Refrigerators and Air Conditioners. This has also resulted in over 35 models of products that meet the needs of both urban and semi-urban markets. The Company also ensures that it fully complies with various government regulations such as BIS, BEE and the recently introduced E-Waste Management rules.

For the year 2017-18, your company posted gross revenues of Rs.125.24 Crores and profits from operations for the Financial Year is Rs.22.62.Crores (before provisions & taxation).

Your Company’s financial performance for the year under review is summarized below:

(Rs. in crores)

Particulars

Year Ended

31.03.2018

31.03.2017

Net Sales and other income

140.32

177.35

Profit before Tax

22.62

53.38

Deferred Tax

15.27

0.31

Profit after Tax

7.35

53.07

EPS - Basic

1.50

10.86

- Diluted

1.50

10.86

DIVIDEND

Your Directors express their inability to recommend any dividend on equity shares of the Company since your Company needs to fund new business initiatives, additional product lines and a surge in business levels.

Since there was no unpaid/unclaimed Dividend declared and paid last year, the provisions of Section 125 of the Companies Act, 2013 do notapply.

However, a dividend on the preference shares has been recommended as per the terms of the issue covered by the approved Scheme of Arrangement.

FUTURE OUTLOOK

Your company’s management is a firm believer in the opportunities and advantages of an online sales strategy, specifically in terms of customer reach, logistic efficiencies, data analytics’ insight and real-time market feedback. In view of this, your company will maintain its online exclusive strategy in the near term and is determined to be a leader in this space.

The Company’s focus in the 2018-19 fiscal year is to further extend its product line to include Dish Washers, Audio products and a line of luxury Refrigerators and Washing Machines that allow us to satisfy the needs of this growing customer segment. As consumers become more energy and environmentally conscious, the company will move towards inverter-based technologies in its home appliances,that are more resistant to voltage fluctuations and are energy efficient. In addition, with the intention of improving customer experience and to leverage the growing proliferation of broad-band high speed internet services, your company is upgrading its range of LED Smart TVs to include pure Android Televisions. These LED Televisions will provide the company’s customers with a smartphone like integrated experience and will allow access to unlimited Apps via Google’s play store. Through this offering, the company’s Smart TV customers will soon be able to access all popular internet based streaming channels and services.

The management is confident that the new range of BPL products, combined with an expanded and improved service network, will help the company to maintain healthy and sustainable growth intheyearsahead.

RISKS AND CONCERNS

Most of our risk and concerns stem from factors beyond our direct control.

The steady reduction and thereby absence of critical component manufacturers in India means your company remains heavily reliant on imports. Unfortunately, the weakening of the Indian Rupee has had an adverse impact on both margins and has challenged the customer affordability. Moreover, the possibility of further weakening of the currency and rising logistics costs, owing to a rise in crude oil prices, could have a negative impact on business during the year. There is also the challenge of frequent policy changes by the government in its efforts to discourage imports and accelerate domestic manufacturing and encourage the ‘Make in India campaign1. While such efforts may be in the country’s mid and long term best interests, the transition could disrupt the business in the near term.

PRINTED CIRCUITS BOARD (PCB) BUSINESS

The PCB industry in India, at present, consists of single sided, double sided & multilayer PCBs. BPL is engaged in manufacturing of single sided PCBs. The major market for this comes from the Lighting segment (LED), consumer electronics, basic telecom equipments, low-end power conversion and auto electronics industry.

During the year 2017-18, the segment wise contribution to the total PCB businessisasunder:

Segment

%

TV

16

Lighting

33

Power Conversion

23

EMS

15

Automotive

8

Others

5

Total

100

Your company was able to cope with the competition & sustain a growth of 5% over the previous year with EBIDTA of around 23%.

Further, PCB industry is witnessing sizeable growth in the led lighting/ power conversion sector. The market in this segment is expected to grow around 15% this year. Your company intends to reap benefits from this growth and accordingly, the turnover of PCB business may increase by 12% during the current fiscal year.

RISKS AND CONCERNS

Your Company faces strong competition from other manufacturers with greater installed capacity and economies of scale as well as greater financial resources and pricing flexibility. Your Company is mindful of these factors and is taking various measures to protect its market share and price competitiveness.

SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES

Your company has no Subsidiaries, Joint Ventures or Associate Companies.

SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and company’s operations in the future.

SAFETY, HEALTH AND ENVIRONMENT

Safety committees at the manufacturing unit are functioning properly to ensure safe and healthy work environment.

Safety, Health and Environmental requirements as per rules have been adhered to at the unit. Shop in-charge personnel and all security staff have been given sufficient on the job training in the use of safety equipments. Necessary consent(s) have been obtained from pollution control Board with respect to Water and Air. Fire Fighting equipments and water hydrant system are installed inside the factory for safety of all personnel and to meet any eventuality.

The Company is having 106 employees as on March 31,2018.

Conservation of energy, technology absorption and foreign exchange earningsand outgo

a) Conservation of Energy:

Though not a large-scale user of energy, your Company continues to explore several measures to conserve scarce resources and protect the environment.

These include water recycling, waste recycling, solder fumes control and power factor Improvement.During the year under review, in view of working capital constraints, your company has not made any capital investment on energy conservation equipments.

b) Technology Absorption:

Electronics technology is changing rapidly and continuous efforts are required to keep pace with it. However, due to financial and manpower constraints, your company has not been able to invest in R&D during the year under review. It is hoped that with improvement in top line and bottom line in the coming year, your company will be able to focus on thisimportantarea.”

c) Foreign Exchange earnings and outgo: During the period under review, your Company utilized foreign exchange worth Rs.133.58 lakhs and foreign exchange earning was nil

CORPORATEGOVERNANCE

Your Company reaffirms its commitment to Corporate Governance and is fully compliant with the conditions of Corporate Governance as stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate section on compliance with the conditions of Corporate Governance and certificate from the Statutory Auditors of the Company - M/s MKUK & Associates, Chartered Accountants, in this regard, forms part of the Annual Report.

BOARD PERFORMANCE EVALUATION

The Company has, during the year, conducted an evaluation of the Board as a whole, its committees and the Individual Directors including the independent directors as stipulated in the Nomination and Remuneration policy adopted by the Company. The evaluation was carried out through different evaluation forms which covered among the evaluation of the composition of the Board/Committees, its effectiveness, activities, governance and with respect to the chairman and the individual directors, their participation, integrity, independence, knowledge, impact and influence on the Board.

The Independent Directors of the Company have also convened a separate meeting on 26th March, 2018 and evaluated the performance of the Board, the non-independent directors and the Chairman. Performance evaluation criteria is as per the policy available at the web link http://www.bpl.in/investor-relations/policies/policy-on-board-evaluation.pdf

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION POLICY

Policy on Directors appointment is to follow the criteria as laid down under the Companies Act, 2013, BPL Code of Conduct for Board of Directors and senior management personnel and the Uniform Listing Agreement with stock exchanges and good corporate practices. Emphasis is given to persons from diverse field or professions.

Guiding policy on remuneration of Directors, Key Managerial Personnel and Employees of the company is that:

Remuneration to Key Managerial Personnel, Senior Executives, Managers, Staff and workmen is industry-driven and takes into account their performance and factors such as to attract and retain quality talent.

For Directors, it is based on the shareholders resolutions, provisions of Companies Act, 2013 and Rules framed there in, Circulars and Guidelines issued by the Central Government and other authorities, from time to time.

DECLARATION OF INDEPENDENCE BY THE INDEPENDENT DIRECTORS

Pursuant to Section 149(6) of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, Capt. Subbarao Prabhala and Mr. SurajLal Mehta, the Independent Directors of the company have made a declaration to the Company confirming the compliance of the conditions stipulated in the aforesaid section.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 134 (1) (c) of the Companies Act, 2013, and on the basis of explanations and compliance certificates given by the executives of the company and subject to disclosures in the annual accounts and also on the basis of discussions with the statutory auditors of the company, from time to time, we state as under:

a) that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanations relating to material departures;

b) that the Directors had 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 at the end of the financial year and of the profit of the company ended as on that date;

c) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) that the Directors had prepared the annual accounts on a going concern basis.

e) that the Directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively and

f) that the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DIRECTORS

In accordance with the provisions of the Companies Act, 2013, Mrs. Anju Chandrasekhar, Director, retires by rotation, and being eligible, offers herself for re-appointment.

NUMBEROF MEETINGS OF BOARD OF DIRECTORS

The Board of Directors have met six times and Independent Directors, once during the Financial Year 2017-18 and details of date of meetings are available in the Corporate Governance report section, which forms part of the annual report.

DETAILS OF COMMITTEE OF DIRECTORS

Composition of Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee; Number of meetings of each committee during the financial year 2017-18 and meetings attended by each member of the committee as required under the Companies Act, 2013 are provided in Corporate Governance Report section which forms part of the annual report.

KEY MANAGERIAL PERSONNEL

Mr. Ajit G. Nambiar, Chairman & Managing Director,Mr. S.V. Ganesh, Chief Financial Officer and Mrs. Chitra M.A, Company Secretary & Compliance Officer are the Key Managerial personnel of the Company pursuant to Section 203 of the Companies Act, 2013.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The particulars of every contract or arrangements entered into by the Company with related parties as per Section 188 of the Companies Act, 2013 are disclosed in Form No. AOC- 2, which forms part of the annual report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

DEPOSITS

The Company has not accepted any deposits from the public and hence, the provisions of the Companies Act, 2013 and Rules framed thereunder, are not applicable to the company.

SHARE CAPITAL

The paid up Equity Share Capital of the Company as on 31st March, 2018 stood at Rs.48.88 Crores comprising 4,88,84,818 Equity Shares of Rs.10/- each, fully paid up. The paid-up Preference Share Capital of the Company as on 31st March, 2018 was Rs.169.59 Crores consisting of 1,69,58,682 Non-convertable, Non-cumulative, Redeemable Preference Shares of Rs.100/- each.

The Company has not issued any Sweat Equity Shares or granted any Employee Stock Option during the Financial Year 2017-18. The Company has not made any provision of money for the purchase of or subscription for shares in the Company under any Scheme.

The provisions of Rule 4 (4) of Companies (Share Capital and Debentures) Rules, 2014 are not applicable to the company since no Equity Shares have been issued by the Company with differential rights during the Financial Year 2017-18.

RISK MANAGEMENT

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives.

Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. These are discussed at the meetings of the Audit Committee and the Board of Directors ofthe Company. The Company’s internal control systems are commensurate with the nature of its business and the size and complexity of its operations. Significant audit observations and follow up actions thereon are reported to the Audit Committee.

WHISTLE BLOWER/VIGIL MECHANISM POLICY

The Company has put in place a Whistle Blower/ Vigil Mechanism Policy to provide an open and transparent working environment and to promote responsible and secure whistle blowing system for directors and employees of the company to raise any concern. The policy broadly cover instances of unethical behaviour, actual or suspected fraud or violation of the company’s code of conduct, alteration of documents, fraudulent financial reporting, misappropriation/ misuse of company’s assets, manipulation of company’s data, pilferage of proprietary information, abuse of authority etc. The policy provides safeguard against victimization of Director(s)/employee(s) who raise the concern and have access to the Chairman of Audit Committee who is entrusted to oversee the whistle blower mechanism. The policy is available on the website ofthe company.

MANAGEMENT DISCUSSION & ANALYSIS

Your Directors have covered the Management Discussion & Analysis as required under the Corporate Governance requirements, as a part of the Board’s Report at appropriate places to avoid duplication and overlapping ofthe contents of the said two reports.

INTERNAL CONTROL AND THEIR ADEQUACY

Your Company has adequate internal financial control systems and checks, which ensure that all assets are safeguarded and that all transactions are recorded and reported properly.

The Internal Financial Control Systems are supplemented by extensive programme of internal audit conducted by external qualified Chartered Accountants. The Company has also put in place effective budgetary systems.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company has constituted Corporate Social Responsibility Committee which is comprised of three members out of which one is an Independent Director. The Committee was set up to formulate and monitor the CSR Policy. However the Company’s average net profit for last 3 years computed as per the provisions of Section 135(5) of Companies Act, 2013, being a negative amount, the Company does not qualify for contribution towards CSRActivities.

PARTICULARS OF EMPLOYEES

Pursuant to Rule 5 of the Companies (Appointment and Remuneration) Rules, 2014, a disclosure on remuneration related information of employees, Key Managerial Personnel and Directors is annexed herewith and forms part ofthe report (Annexure-I).

STATUTORY AUDITORS

M/s. MKUK & Associates, Chartered Accountants, are the Auditors of the Company for five consecutive years from the FY 2017-18. Report ofthe statutory auditor forms part of this annual report.

ANNUAL RETURN

An extract of Annual Return in the prescribed format is displayed in the company’s website: www.bpl.in underthe head ‘‘Investor’s Relations”.

SECRETARIAL STANDARDS

The company has complied with all the applicable Secretarial Standards.

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 read with Section 134(3) of the Companies Act, 2013, your company has appointed Mr. Madhwesh.K, a Practicing Company Secretary as Secretarial Auditor of the Company for the Financial Year 2017-18 and the Secretarial Audit Report forms part of the annual report.The explanations ofthe Board on every qualification or reservation made by the Auditor in his report have been furnished byway of an addendum.

COST AUDITORS

The Company’s business during the year under review was not covered underthe Cost Audit Rules nor had the Government notified the company to appoint a cost auditor for the said period.

ANTI SEXUAL HARASSMENT POLICY

The Company has in place an AntiSexual Harassment Policy in line with the requirements of “The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013”, aiming at prevention of harassment of employees and lays down the guidelines for identification, reporting and prevention of sexual harassment. An “Internal Complaints Committee” has been set up to redress complaints received regarding sexual harassment as per the provisions of the said Act. All employees (permanent, contractual, temporary, trainees) are covered under this Policy.

During the year under review, there were no complaints pertaining to sexual harassment.

ACKNOWLEDGEMENTS

The Board wishes to record its appreciation ofthe continued support and hard work of the employees at all levels. The Board also acknowledges continued co-operation received from E-tailers, Dealers, Suppliers, Customers, Banks, Government Departments, Financial Institutions, Channel Partners and Shareholders.

For and on behalf of the

Board of Directors,

Ajit G Nambiar

6th August, 2018 Chairman & Managing Director

Bangalore DIN: 00228857

Source : Dion Global Solutions Limited
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