BS LIMITED CORPORATE information Board of Directors Mr. Rajesh Agarwal Chairman & Managing Director Mr. Arun Dogra Whole Time Director Mr. Mahesh Khera Independent Director Ms. Dimple Kaul Independent Director Mr. Narayan Rao Gali Independent Director (appointed w.e.f 21.12.2015) Mr. Kamesh Yalamarty Managing Director (resigned w.e.f 18.03.2016) Mr. A. Gopalakrishnan Iyer Independent Director (resigned w.e.f 30.09.2015) Company Secretary Ms. Alka Kumari (Company Secretary & Compliance Officer) Bankers / Financial Institutions State Bank of India State Bank of Hyderabad State Bank of Mysore State Bank of Travancore State Bank of Bikaner & Jaipur Bank of India Bank of Maharashtra Syndicate Bank Punjab National Bank United Bank of India IFCI Venture Capital Funds Limited IFCI Limited Lakshmi Vilas Bank Limited IDBI Bank Limited Registrar and Share Transfer Agents Karvy Computershare Private Limited Karvy Selenium Tower B, Plot 31-32, Gachibowli Financial District, Nanakramguda, Hyderabad - 500 032 Tel: +91 40 6716 1500 Statutory Auditors M/s. P. Murali & Co. Chartered Accountants, 6-3-655/2/3, Somajiguda, Hyderabad 500 082 Registered Office #504, 5 th Floor, Trendset Towers, Road 2, Banjara Hills, Hyderabad - 500 034, Telangana, India. Tel: +91 40 4455 8888 investors@bsgroup.in www.bsgroup.in Contents Chairman Speech... 02 Directors Report... 03 Annexures to Directors Report... 10 Independent Auditors Report... 45 Balance Sheet... 49 Statement of Profit & Loss Account... 50 Notes on Financial Statements... 51 Consolidated: Auditors Report... 71 Balance Sheet... 74 Statement of Profit & Loss Account... 75 Notes on Financial Statements... 76 Statement of Subsidiary Companies... 95 Annual Report 2015-16 1
BS LIMITED Chairman Speech I am pleased to share Twelfth Annual Report highlighting financial performance of the Company for the financial year 2015-16. The world economy has seen turbulence in the past year from Britain exhibiting its interest in exiting European Union to China sitting on huge capacity due to slowdown in world demand. India has, however, withstood the above and has remained a sweet spot for the investment community. Government of India, on the back of good monsoon, is also providing impetus to the economy through Seventh Pay Commission and focus towards rural economy and infrastructure projects. Power Transmission and Distribution companies who were under pressure due to distressed condition of Discoms have received respite due to rescue scheme from Government of India in the form of UDAY (Ujwal Discom Assurance Yojna). UDAY is the financial turnaround and revival package for electricity distribution companies of India with the intent to find a permanent solution to the financial mess that the power distribution is in. The scheme would help Discoms break-even in next two to three years. Your company has generated a standalone operating revenue of INR 2,383 crore in FY 16 against INR 1,905 crore in FY15, a growth of 25%. Similarly at consolidated level operating revenue stood at INR 4,294 crore in FY16 against INR 2,673 crore in FY15. The standalone operating profit excluding non-cash expense such as depreciation and amortization increased by 14% in FY16 over the previous financial year. The same increased by 20% in FY16 over the previous financial year at consolidated level. Bowing to pressure from high cost of debt, standalone net profit of your company declined by 13% in FY16 against the previous financial year FY15. The same, however, increased by 1% at consolidated level due to contribution from subsidiaries and group companies. This is also the year when your company enjoyed the benefit of full year revenue accrued to it from its first Build Own Operate Manage (BOOM) project. Your company, off late, has been a victim of unprecedented challenges arising either out of execution of projects because of Right Of Way (ROW) or delay in receipt of payments from its clients specially Discoms. Being in infrastructure space, your company was required to invest in Capital Expenditure for smooth running of the operations. This affected the bottom line in the form of higher depreciation cost and interest expense. Your company has approached Joint Lenders Forum ( JLF ) under RBI s JLF framework to restructure the Company s debt in light of RBI circular on Scheme for Sustainable Structuring of the Stressed Assets (S4A). We are hopeful the scheme would help your company to overcome the present financial challenges. I take this opportunity to congrats Government of India for taking initiative in demonetizing Rs 1000 and Rs 500 notes. This would not only help tackle malaises of parallel economy, counterfeit currency and terror financing but would also flush money into banking system thereby keeping check on inflation and inducing banks to lower interest rates. A lower interest rate is imperative for infrastructure to flourish. I express my sincere gratitude and indebtedness to all the stakeholders for their patience and support during these turbulent times. I also extend my gratitude to our human capital for their dedication and support. Best wishes, Rajesh Agarwal Chairman & Managing Director 2 Annual Report 2015-16
Directors Report DIRECTORS REPORT TO THE MEMBERS, 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, 2016. Financial Results (Rs. in Crores) Particulars Standalone Consolidated 2015-16 2014-15 2015-16 2014-15 Total Income 2,392.06 1,910.50 4,303.88 2,682.30 Gross Profit 713.30 604.96 756.99 639.07 Profit Before 328.97 284.53 364.37 302.52 Interest, Depreciation & Tax Less: Interest & 172.60 133.73 184.62 141.21 Financial Charges Depreciation 64.53 44.92 70.03 48.13 Prior Year 0.00 0.00 0.00 0.00 Adjustment/ Amortization Profit Before 91.84 105.90 109.72 113.18 Tax Less: Provision 32.46 37.31 33.91 38.00 for Taxation Profit After Tax 59.37 68.58 75.81 75.19 Earnings per Share 1.35 1.56 1.72 1.71 Performance Review The Company posted impressive performance during the Financial Year 2015-16. Net Revenue from operations on Standalone basis increased to Rs. 2,392.06 Crores as against Rs. 1,910.50 Crores in the previous year a growth of 25%. The Profit after Tax for the Current Year is Rs. 59.37 2.5% of the Sales. On a Consolidated basis, the Company achieved net Revenue of 4,303.88 Crores as against Rs. 2,682.30 Crores a growth of 60.45%. Net Profit for the Current Year stood at Rs. 75.81. 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. There are no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the Financial Year and the date of this Report. The Standalone and Consolidated Performance of the Company for the year under review were as under: Standalone Total Revenue for Fiscal 2016 stood at Rs. 2,392.05 Crores against Rs. 1,910.50 Crores for Fiscal 2015, showing a 25% increase. EBIDTA increased by 15.62% from Rs. 284.53 Crores in Fiscal 2015 to Rs. 328.97 Crores in Fiscal 2016. Profit after Tax for the Fiscal 2016 was Rs. 59.37 Crores as against Rs. 68.58 in Fiscal 2015. Consolidated Consolidated Total Revenue of the Company for Fiscal 2016 stood at Rs. 4,303.88 Crores against Rs. 2,682.30 Crores for Fiscal 2015, showing a 60.45% increase. Consolidated EBIDTA increased by 20.44% from Rs. 302.52 Crores in Fiscal 2015 to Rs. 364.37 Crores in Fiscal 2016. Consolidated Profit after Tax has also increased from Rs. 75.19 Crores in Fiscal 2015 to Rs. 75.81 Crores in Fiscal 2016. Revision of Financial Statements The Company has been carrying forward, Trade Receivables and Trade Advances aggregating to Rs. 1,61,21,55,894/- and Rs. 52,94,17,954/- respectively in the Balance Sheet of the Company which pertain to the earlier years. Though the same have been outstanding for quite a long time, the Management was positive about the realization of the same. Accordingly, the Management had considered them to be standard and had not treated them to be Doubtful Debts. However, the Company could not realize / recover any of the aforesaid outstanding Trade Receivables and Advances during the Financial Year 2015-16 and further they are outstanding till date despite the efforts of the Company. The Board of Directors at its Meeting held on May 27, 2016, has approved the Financial Results for the period ended March 31, 2016. Accordingly, the approved Financial Statements were submitted to the Statutory Auditors, M/s. P. Murali & Co., Chartered Accountants, for their Report to the Members for approval in the ensuing Annual General Meeting to be held on or before December 31, 2016 (in terms of the extension, for 3 months, granted by the Registrar of Companies). The Statutory Auditors had completed the Audit and issued their Report, dated May 27, 2016, for the Financial Year 2015-16. In their Audit Report, the Statutory Auditors of the Company, have emphasized, the matter with respect to the realization of the Outstanding Trade Receivables to the extent of Rs. 1,61,21,50,797/- and the Advances given by the Company, Rs. 52,94,17,954/-, which have been outstanding for more than 365 days as on the Financial Year ending March 31, 2016 Annual Report 2015-16 3
BS LIMITED and that the Financial Statements of the Company did not include any adjustment relating to the certainty of the recovery of such balances. The extract from the aforesaid Audit Report is as under: Attention is invited to Note no. 44 to the Notes to Financial Statements regarding realization of outstanding Trade Receivables to the extent of Rs. 161.21 Crores and Advances given by the Company an amount of Rs. 52.95 Crores which are outstanding for more than 365 days for the year ending 31 st March 2016. The Financial Statements of the Company do not include any adjustment relating to the certainty of the recovery of such balances. Our opinion is not modified in this respect. In response to the Auditors Comments as aforesaid, the Board of Directors at its Meeting held on November 28, 2016 has resolved that the outstanding balances of Rs. 2,14,15,73,848/-, as aforesaid, be considered as not realizable and accordingly be written off from the Books as bad debts so as to give true and fair view of the Balance Sheet and Profit & Loss Accounts. The Write-off was to be done over Two Financial years i.e., partially, Rs. 1,10,54,86,007/-, in the Financial Year 2014-15 and remaining balance of Rs. 1,03,48,05,720/- in the Financial Year 2015-16. Accordingly, the Financial Statements of the Company for the Financial Year 2015-16 were adjusted by writing-off the Trade Receivables and Trade Advances aggregating to Rs. 1,03,48,05,720/- as bad debts. However, since the Financial Statements for FY 2014-15 have been approved and adopted by the Shareholders at the AGM held on September 30, 2015 and have also been filed with the Registrar of Companies, any changes to the approved Financial Statements would tantamount to Revision of the same, which shall be in compliance with the provisions of the Section 131 of the Companies Act, 2013 and Rules prescribed thereunder. In this context, the Board of Directors has, at its Meeting held on November 28, 2016, resolved to write-off Trade Receivables and Trade Advances aggregating to Rs. 1,10,54,86,007/- from the Financial Statements for FY 2014-15 and thereby revising the Financial Statements, voluntarily, by seeking the approval of the National Company Law Tribunal ( NCLT ), in compliance with Section 131 of the Companies Act, 2013 and Rules prescribed thereunder. Accordingly, the Financial Statements for the FY 2014-15 will be placed before the Members of the Company, for adoption, at a General Meeting convened, subsequent to the approval of the NCLT and such other approval(s) from the appropriate authorities as may be necessary. In this regard, the Board of Directors of the Company has authorized Mr. Rajesh Agarwal, Chairman and Managing Director and / or Mr. Arun Dogra, Whole Time Director, to make the necessary Application(s) to the NCLT and such other Authorities and to do all such other acts, deeds, matters and things as may be required in connection with the above. Dividend With a view to conserve resources for funding the growth and CAPEX plans of the Company, your Directors have not recommended any Final Dividend for the Financial Year 2015-16. Business Acquisition The Board of Directors of the Company had, at its Meeting held on May 20, 2015, resolved to acquire, for a Lump-sum Consideration, the Business of the following Companies, which are engaged in the business of manufacturing equipment required in the execution of the Company s Projects: 1. M/s. Sujana Towers Limited 2. M/s. Agarwal Steels Structures India Private Limited 3. M/s. Durafast Automotive Private Limited 4. M/s. NHS Metals Private Limited 5. M/s. Rajesh Sandhi Infras and Metals Private Limited. Accordingly, the Company had entered into Business Transfer Agreements with the aforesaid entities. Since the acquisition of Business from M/s. Agarwal Steels Structures India Private Limited was falling within the ambit of Combination as per the Regulation 5 of the Competition Act, 2002, an Application seeking the approval of CCI, in terms of Regulation 6 of the Competition Act, 2002 was filed by the Company on September 24, 2015 and the same was approved by CCI on December 09, 2015. The Company had also initiated the process of obtaining the Lenders / Bankers approval with respect to the aforesaid proposal. Further, the Company had applied for the In-principle Listing approval for the Preferential Allotment as required under the Listing Agreement. In terms of Clause 4 of the Business Agreement(s) entered into between the Seller Companies and the Company, the Completion of the Transaction / deal was conditional upon the fulfillment of the Conditions Precedent, one of which is to obtain the No-Objection Certificate(s) from all the Lenders / Banks. However, the approval process of the Lenders / Bankers has been delayed following the considerable delay in receipt of the Approval of Competition Commission of India ( CCI ) and the Due Diligence Report ( DDR ) of the Consultants appointed by the Lenders / Bankers. In view of the delay, the Seller Companies, in the meantime, had different plans and accordingly dropped the proposal. Considering the aforesaid scenario, the Company had withdrawn the Business proposal as contained in the BTAs entered with respect to the Acquisition of Business / Assets of the aforesaid Companies. Further, the Company had also withdrawn the proposal of the issue of Equity Shares through Preferential Allotment to discharge the Lump-sum Consideration as per the BTAs. Subsidiaries / Joint Ventures / Associate Companies 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. 4 Annual Report 2015-16
Directors 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 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: 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 Player in the International Minerals Trading Markets. The Financial Performance of the said Subsidiary for the Financial Year ended March 31, 2016 has been decent with a Turnover of Rs. 1359.21 Crores and a Profit before Tax and Profit after Tax of Rs. 11.76 Crores and Rs. 10.33 Crores, respectively. 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. The Subsidiary s performance for FY 2015-16 was outstanding with a Revenue of Rs. 540.76 Crores (AED 304,120,070) and earned a Net Profit of Rs. 7.30 Crores (AED 4,103,185) for the Financial Year ended March 31, 2016. 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. 35.10 Crores from Transmission Service and Rs. 0.25 Crores as other income by way of interest. The Company incurred a loss of Rs. 3.58 Crores for the year ended March 31, 2016. Information in this respect can also be referred in form AOC- 1 which has been disclosed in the Consolidated Financial Statements. Consolidated Financial Statements The Consolidated Financial Statements of your Company for the Financial Year 2015-16, are prepared in compliance with applicable provisions of the Companies Act, 2013 read with Rules prescribed thereunder, applicable Accounting Standards and the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as the Listing Regulations ). The Consolidated Financial Statements have been prepared on the basis of Audited Financial Statements of the Company, its Subsidiary and Associate Companies, as approved by their respective Board of Directors. Credit Rating During the year under review, your Company s bank facilities have been rated by Credit Analysis and Research Limited (CARE) CARE A2 (A Two) for its Short Term Facilities as per which Instruments with this rating are considered to have strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk. For the Long Term Borrowings, Company s has received rating CARE BBB+ (Triple B+), which indicates moderate degree of safety regarding timely servicing of financial obligations. Such instruments carry moderate credit risk. Annual Report 2015-16 5
BS LIMITED Share Capital During the year under review, the Company had issued 1,257,960 Equity Shares (including 628,980 Bonus Equity Shares) of Re. 1/- each, up on Exercise of Options by the Grantees under the Employee Stock Option Plan 2011. Consequent thereto, the outstanding Issued, Subscribed and Paid-up Equity Share Capital of the Company as on March 31, 2016 was Rs. 441,113,660/- divided into 441,113,660 Equity Shares of Re. 1/- each, fully paid-up. Pursuant to the comments made under business acquisition above, for the purpose of discharging the consideration, the Board of Directors has approved the proposal to issue and allot upto 22,30,95,100 Equity Shares of face value of Re. 1 each at price as determined under Regulation 76 of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended ( SEBI ICDR Regulations ), subject to necessary permissions, sanctions, approvals and applicable SEBI Regulations and other provisions of law and which is subject to approval of the Members of the Company. Employee Stock Option Plan During the year, your Company has allotted 1,257,960 Equity Shares (including 628,980 Bonus Equity Shares) of Re. 1/- each, upon Exercise of 628,980 Vested options by the employees. During the Financial Year 2015-16, there has been no change in the Employees Stock Option Plan (ESOP 2011) of the Company. Further, it is confirmed that the ESOP Scheme of the Company is in compliance with SEBI (Share Based Employee Benefits) Regulations, 2014. The applicable disclosures as stipulated under Regulation 14 of SEBI (Share Based Employee Benefits) Regulations, 2014 with regard to Employees Stock Option Plan of the Company are appended as Annexure 1 and form part of this Report. Board of Directors During the year under review, Mr. A. Gopalakrishnan Iyer, Non-Executive Independent Director, had resigned with effect from September 30, 2015, owing to increased personal preoccupations. Mr. Kamesh Yalamarty, who was appointed as Managing Director of the Company with effect from August 12, 2015, had resigned from his post as well as from the Board with effect from March 18, 2016. The Board places on record its appreciation for the valuable contribution made by the aforesaid Directors during their tenure with the Company. 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. Narayan Rao Gali 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 December 21, 2015, to hold Office up to the ensuing Annual General Meeting of the Company. The Board has further, at its Meeting held on November 28, 2016, recommended the appointment of Mr. Narayan Rao as Non-Executive and Independent Director of the Company and accordingly the item relating to his appointment as Independent Director be placed before the Members at the Annual General Meeting for approval. The Company has received requisite notice in writing from a member proposing Mr. Rao for appointment as the Director 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. Declaration of Independence Your Company has received Declarations from the Independent Directors confirming that they meet the criteria of Independence as prescribed under the provisions of Companies Act, 2013 read with the Schedules and Rules issued thereunder as well as Regulation 16(1)(b) of Listing Regulations (including any statutory modification(s) or reenactment(s) for the time being in force). Pursuant to the provisions under Section 134(3)(d) of the Companies Act, 2013, with respect to Statement on Declaration given by Independent Directors under Section 149(6) of the Act, the Board hereby confirms that all the Independent Directors of the Company have given a Declaration and have confirmed that they meet the criteria of Independence as provided in the said Section 149(6). 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, Followup 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 Company's Management and the Board that are necessary for the Board to effectively and reasonably perform its duties. All the Independent Directors were present at the Meeting. 6 Annual Report 2015-16
Directors Report 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. 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: Mr. Rajesh Agarwal Chairman & Managing Director Mr. Kamesh Yalamarty* Managing Director Mr. Arun Dogra Whole-Time Director designated as CFO Ms. Alka Kumari Company Secretary & Compliance Officer * Resigned with effect from March 18, 2016 Apart from the changes as mentioned under the Board of Directors Section, there were no changes in the Office of Key Managerial Personnel during the year under review. Policy on Directors Appointment and Remuneration In accordance with Section 178 and other applicable provisions if any, of the Companies Act, 2013 read with the Rules issued thereunder and the provisions of SEBI LODR Regulations, the Board of Directors has, on the recommendations of the Nomination and Remuneration Committee, formulated the Nomination and Remuneration Policy. The salient aspects covered in the Nomination and Remuneration Policy, covering the Policy on Appointment and Remuneration of Directors, KMP and other employees and other matters have been outlined in `Annexure - 2 which forms part of this Report. Particulars of Remuneration of Directors / KMP / Employees In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing Remuneration in excess of the limits set out in the said Rules is attached as Annexure - 3A which forms part of this Report. 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 is attached as Annexure - 3B which forms part of this Report. Number of Meetings of the Board During the year under review, 4 (Four) Board Meetings were held with gap between Meetings not exceeding the period prescribed under the Companies Act. Details of Board and Committee Meetings held during the year are set out in the Corporate Governance Report which forms part of this Report. Directors Responsibility Statement Pursuant to the provisions under Section 134(5) of the Companies Act, 2013, with respect to Directors Responsibility Statement, the Directors confirm: a. That in the preparation of Annual Accounts, the applicable Accounting Standards have been followed and no material departures have been made from the same; b. That they 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 and Loss of the Company for that period; c. That they have taken proper and sufficient care for the 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; Annual Report 2015-16 7
BS LIMITED d. That they have prepared the Annual Accounts on a Going Concern Basis; e. That they have laid down Internal Financial Controls to be followed by the Company and that such Internal Financial Controls are adequate and operating effectively; and f. That they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were 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 2016-17. Your Company has received written consent and a Certificate from the Auditors stating 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 have also confirmed that they have subjected themselves to the peer review process of Institute of Chartered Accountants of India (ICAI) and hold a valid Certificate issued 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 2016-17 till the conclusion of the next AGM. There are no observations (including any qualification, reservation, adverse remark or disclaimer) of the Auditors in their Audit Report, for the Financial Year 2015-16, that may call for any explanation from the Directors. Further, the notes to accounts referred to in the Auditor s Report are self-explanatory. Cost Auditors As per Section 148 of the Companies Act, 2013 read with Rules framed thereunder, M/s. Srinivas & Co., Cost Accountants, (Firm Registration 00278) were re-appointed as Cost Auditors for the Financial Year 2015-16 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/- ( One Lakh Fifty Thousand only) excluding out of pocket expenses, if any. 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 2016-17 along with a certificate confirming their independence and arm s length relationship. The Cost Audit Reports for the Financial Years 2014-15 and 2015-16, issued by M/s. Srinivas & Co., Cost Auditors, in respect of the various products prescribed under Cost Audit Rules, were filed with the Ministry of Corporate Affairs (MCA) on September 28, 2015 and October 13, 2016 respectively which were within the due dates as per the requirements of applicable laws. 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 7427), was appointed as Secretarial Auditor of the Company for the Financial Year 2015-16. The Secretarial Audit Report submitted by him in the prescribed Form MR-3 is attached as Annexure - 4 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 2015-16 which call for any explanation from the Board of Directors. Extract of Annual Return The details forming part of the Extract of the Annual Return as on March 31, 2016, in Form MGT-9, in accordance with Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, are set out herewith as Annexure - 5 to this Report. Related Party Transactions During the Financial Year 2015-16, your Company entered into transactions with Related Parties as defined under Section 2(76) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, 2014, which were in the ordinary course of business, on arm s length basis and in accordance with the provisions of the Companies Act, 2013 read with Rules issued thereunder and the provisions of SEBI LODR Regulations. Further, there were no transactions with Related Parties which qualify as material transactions under the SEBI LODR Regulations, 2015. The details of the Related Party Transactions as required under Accounting Standard - 18 are set out in Note 35 to the Standalone Financial Statements forming part of this Annual Report. The Form AOC- 2 pursuant to Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out as Annexure 6 to this Report. Loans and Investments Details of Loans, Guarantees and Investments under Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014, as on March 31, 2016 are set out in Note Nos. 12 and 35 to the Standalone Financial Statements forming part of this Report. 8 Annual Report 2015-16
Directors Report 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 plans in 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 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 7 to this Report. Corporate Governance Your Directors adhere to the requirements set out under the provisions of SEBI LODR Regulations. In compliance with Regulation 34 of the Listing Regulations, a separate report on Corporate Governance is attached 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 from the Statutory 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 2015-16. 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 FY 2015-16. 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 Board`s report. To ensure effective Internal Financial Controls the Company has laid down the following measures: Compliance relating to Cost Records of the Company is ensured by way of Cost Audit; 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). The Annual Listing Fee for the Financial Year 2016-17 has been duly paid within the stipulated time to both the Stock Exchanges. Annual Report 2015-16 9
BS LIMITED Public Deposits During the year under review, your Company has not accepted any Deposit within the meaning of Sections 73 and 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 2015-16. 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 8 and forms part of this Report. Significant / Material Orders passed by the Regulators There are no significant / material orders passed against the Company by the Regulators, Courts or Tribunals which impact the Going Concern Status of your Company and its operations in future. 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 Date : November 28, 2016 Place : Hyderabad (Rajesh Agarwal) Chairman & Managing Director Annexure-1 to the Directors Report Disclosure regarding the Employee Stock Option Plan 2011 of the Company. The details as required to be disclosed with regard to the Employee Stock Option Plan 2011 of the Company as on March 31, 2016 are given below. The ESOP 2011 Scheme of the Company is implemented by the Board of Directors and/or the Nomination and Remuneration Committee. Unless otherwise specified, the vested options are to be exercised prior to the expiry of 24 months from the date of vesting. The following table sets forth the particulars of the Options granted under ESOP 2011 as on March 31, 2016: Particulars Tranche I Tranche II Tranche III Total Options available for Grant as authorized by Plan 1,09,39,330 Options granted 48,72,070 21,65,000 200,000 The Pricing Formula Price determined by the Nomination and Remuneration Committee but not less than the Fair Market Value of a Share on the date of grant Date of Grant November 12, 2011 September 29, 2012 March 28, 2016 Exercise Price of Options (in Rs.) 10.995* 20.425* 13.25* Options Vested 30,41,260 21,65,000 - Options Exercised 17,70,230 - - Total of Shares arising as a result of Exercise of Options 17,70,230 - - Options forfeited/ lapsed 30,73,350 21,65,000 - Variation in terms of Options - - - Money realized upon Exercise of Options (in Rs.) 1,94,63,678.85 - - Total of Options in force 28,490-2,00,000 Employee-wise Details of Options granted to: 24,21,090 21,65,000 2,00,000 a) Senior Managerial Personnel (List enclosed) b) Any other employee who received a grant in any one year of Options - - - amounting to 5% or more of the Options granted during that year c) Identified employees who are granted Options, during any one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant - - - Diluted EPS on issue of Shares on Exercise calculated in accordance with AS 20 Rs. 1.35 Rs. 1.35 Rs. 1.35 Method of Valuation of Options Fair Value Method * The Number of Options have been multiplied by 10 (Ten) subsequent to the Split of Face Value of Shares of the Company from Rs. 10/- to Re. 1/-. 10 Annual Report 2015-16
Directors Report Name of Senior Managerial Person Designation of Options Granted of Options Exercised of Options Outstanding C. Chandrasekhar* Head-Corporate Planning & 6,64,910 - - ESOP 2011 Tranche I Telecom R. K. Dubey CEO Power 5,69,920 5,69,920 - ESOP 2011 Tranche I Devendra Singh Chauhan* Vice President 3,22,960 1,04,500 - ESOP 2011 Tranche I P. Somayajulu* Vice President 2,46,970 1,38,920 - ESOP 2011 Tranche I Sreedhar Bharatam President 1,72,660 162,320 - ESOP 2011 Tranche I Vinod Sharma Vice President 1,13,980 78,650 28,490 ESOP 2011 Tranche I Ritesh Tawry Deputy General Manager 1,13,980 1,13,980 - ESOP 2011 Tranche I Swadesh Kumar Kesarwani GM - Corporate Planning 51,070 49,160 - ESOP 2011 Tranche I G. Madhusudhan Rao Asst. Vice President 1,64,640 1,64,640 - ESOP 2011 Tranche I Sanjay Kumar Sultania* Chief Strategy Officer 21,65,000 - - ESOP 2011 Tranche II G. Madhusudhan Rao Asst. Vice President 2,00,000-2,00,000 ESOP 2011 Tranche III * Resigned from the Company and the Corresponding Options have lapsed. Plan Nomination and Remuneration Policy Annexure 2 to the Directors Report The Nomination and Remuneration Committee of Directors (NRC) reviews the Composition of the Board, to ensure that there is an appropriate mix of abilities, experience and diversity to serve the interests of all Shareholders and the Company. The Nomination and Remuneration Policy governs the terms of Nomination / Appointment and Remuneration of (i) Directors, (ii) Key Managerial Personnel (KMPs) and (iii) Senior Management Personnel (SMPs) of the Company. The process of appointing a Director / KMPs / SMPs is, that when a vacancy arises, or is expected, the NRC will identify, ascertain the integrity, qualification, appropriate expertise and experience, having regard to the skills that the candidate will bring to the Board / Company, and the balance of skills added to that of which the existing Members hold. The NRC will review the profile of persons and the most suitable person is either recommended for appointment by the Board or is recommended to Shareholders for their election. The NRC has discretion to decide whether qualification, expertise and experience possessed by a person are sufficient / satisfactory for the concerned position. NRC will ensure that any person(s) who is / are appointed or continues in the employment of the Company as its Executive Chairman, Managing Director, Whole Time Director shall comply with the conditions as laid out under Part I of Schedule V to the Act 2013. NRC will ensure that any appointment of a person as an Independent Director of the Company will be made in accordance with the provisions of Section 149 read with Schedule IV of the Act 2013 along with any other applicable provisions and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Criteria for Performance Evaluation, Disclosures on the Remuneration of Directors, and Criteria of making payments to Non-Executive Directors have been disclosed as part of Corporate Governance Report attached herewith. A copy of the aforesaid Nomination and Remuneration Policy is uploaded on the Company s website www.bslimited.in Annual Report 2015-16 11
BS LIMITED Annexure 3A to the Directors Report Statement of Particulars of Employees pursuant to the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 for the year ended March 31, 2016. Employed throughout the year and in receipt of Remuneration of Rs. 60,00,000/- and above: No Employee Name Designation Nature of Employment Qualification & Exp (Years) Joining Date 1 -NA- Age Previous Employment Gross Remuneration (Rs.) Employed partly during the year and in receipt of Remuneration of Rs. 5,00,000/- and above per month: % of Equity Shares held Whether Relative of Director No Employee Name Designation Nature of Employment Qualification & Exp (Years) Joining Date 1 -NA- Age Previous Employment Gross Remuneration (Rs.) % of Equity Shares held Whether Relative of Director Notes: 1. Gross Remuneration shown above is subject to tax and comprises Salary including Arrears, Allowances, Rent, Medical Reimbursements, Leave Travel Benefits, Leave Encashment, Provident Fund, Superannuation Fund & Gratuity under LIC scheme in terms of actual expenditure incurred by the Company. 2. All appointments are contractual in nature. 3. None of the employees mentioned above are related to any Director of the Company. 4. None of the employees mentioned above holds by himself / herself or along with his / her spouse and dependent children, 2% or more of the Equity Shares of the Company. Annexure 3B to the Directors Report Details under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. S. Particulars No 1 The ratio of the remuneration of each 1. Rajesh Agarwal, Chairman & Managing Director Director to the Median Remuneration 2. Kamesh Yalamarty, Managing Director of the employees of the Company for 3. Arun Dogra, Whole-Time Director the Financial Year 2 The percentage increase in 1. Rajesh Agarwal, Chairman & Managing Director Remuneration of each Director, Chief 2. Kamesh Yalamarty Financial Officer, Chief Executive 3. Arun Dogra, Whole Time Director Officer, Company Secretary or 4. Alka Kumari, Company Secretary Manager, if any, in the Financial Year 3 The percentage increase in the Median remuneration of all employees 2015-16 2014-15 Median Remuneration of employees per annum 218,976 230,478 in the Financial Year 4 The Number of Permanent Employees on the rolls of Company 5 The explanation on the relationship between average increase in remuneration and Company performance 6 Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company 21.92 16.81 5.48 - - - 16.48 (4.99) The Average increase is based on the objectives of Remuneration Policy of the Company that is designed to attract, motivate and retain the employees who are the drivers of organization s success and helps the Company to retain its industry competitiveness. Pay mix is designed to reflect the performance and is aligned to the long-term interests of the Shareholders. % Increase in Net Sales in 2015-16 compared with 2014-15 25.09 % Increase in PAT in 2015-16 compared with 2014-15 (13.42) % Increase in EBIDTA in 2015-16 compared with 2014-15 15.62 317 12 Annual Report 2015-16
Directors Report S. Particulars No 7 Variations in the Market Capitalization of the Company, Price Earnings Ratio as at the Closing date of the Current Financial Year and Previous Financial Year and percentage increase over decrease in the Market quotations of the Shares of the Company in comparison to the rate at which the Company came out with the last Public Offer 8 Average Percentile increase already made in the salaries of employees other than the Managerial Personnel in the last Financial Year and its comparison with the percentile increase in the Managerial Remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the Managerial Remuneration 9 Comparison of the each remuneration of the Key Managerial Personnel against the performance of the Company Financial Year ended Closing Share Price (NSE) Market Capitalization Price Earning Ratio 31.03.2016 13.15 580.06 Crores 9.74 31.03.2015 25.40 1117.16 Crores 16.28 The Average % Managerial increase has been 16.48% while for others it is about -4.99%.This is based on Remuneration Policy of the Company that rewards people differentially based on their contribution to the success of the company and also ensures that external market competitiveness and internal relativities are taken care of. Name of the KMP Remuneration in 2015-16 compared with 2014-15 % Increase in Net Sales in 2015-16 compared with 2014-15 % Increase in PAT in 2015-16 compared with 2014-15 % Increase in EBIDTA in 2015-16 compared with 2014-15 Rajesh - 25.09-13.42 15.62 Agarwal Arun Dogra - 25.09-13.42 15.62 Alka Kumari 16.48 25.09-13.42 15.62 10 The key parameters for any variable The Key Parameters are a) Net Sales b) PAT c) EBIDTA d) Net Operating Cash component of Remuneration availed Flow from Business by the Directors 11 The Ratio of the Remuneration of the Name of the Employee Ratio highest paid director to that of the C. Chandrasekhar 1 : 1.46 employees who are not directors but receive remuneration in excess of the Munish Sehgal 1 : 1.25 highest paid director during the year; 1 : 1.25 R.K. Dubey and 12 Affirmation that the remuneration is as per the remuneration policy of the Company It is hereby affirmed that the remuneration is as per the Remuneration Policy of the Company. Notes: 1. The information provided above is on Standalone basis. 2. Median Remuneration of the Company for all its employees is Rs. 218,976 for the Financial Year 2015-16. Annual Report 2015-16 13
BS LIMITED To The Members, M/s. BS Limited, #504, Trendset Towers, Road 2, Banjara Hills, Hyderabad 500034 Annexure 4 to the Directors Report Form MR-3 SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED MARCH 31, 2016 [Pursuant to Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014] I have conducted the Secretarial Audit of the compliance of applicable Statutory Provisions and the adherence to good corporate practices by M/s. BS Limited (hereinafter called The Company ). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the Corporate Conducts / Statutory Compliances and expressing my opinion thereon. Based on my verification of BS Limited s Books, Papers, Minute Books, Forms and Returns filed and other records maintained by the Company and also the information provided by the Company, its Officers, Agents and Authorized Representatives during the conduct of Secretarial Audit, I hereby report that in my opinion, the Company has, during the Audit period covering the Financial Year ended on March 31, 2016, complied with the Statutory Provisions listed hereunder and also that the Company has proper Board-processes and Compliance-Mechanism in place to the extent, in the manner and subject to the reporting made hereinafter: I have examined the Books, Papers, Minute Books, Forms and Returns filed and other records maintained by the Company for the Financial Year ended on March 31, 2016 according to the provisions of: (i) The Companies Act, 2013 (the Act) and the Rules made thereunder; (ii) The Securities Contracts (Regulation) Act, 1956 ( SCRA ) and the rules made thereunder; (iii) The Depositories Act, 1996 and the Regulations and Byelaws framed thereunder; (iv) Foreign Exchange Management Act, 1999 and the Rules and Regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; (v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 ( SEBI Act ) to the extent applicable to the Company:- (a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; (b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; (c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009; (Not applicable during the Audit Period) (d) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014; (e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; (Not applicable during the Audit Period) (f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client; (g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; (Not applicable during the Audit Period) and (h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; (Not applicable during the Audit Period) I have also examined compliance with the applicable Clauses of the following: (i) Secretarial Standards issued by The Institute of Company Secretaries of India; (ii) The Listing Agreements entered into by the Company with The BSE Limited and The National Stock Exchange of India Limited; (iii) The SEBI (Listing Obligations and Disclosure Requirements) Regulations as notified with effect from December 01, 2015; During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, and Listing Agreement(s) etc., mentioned above. I further report that: The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act. Adequate notice is given to all Directors at least seven days in advance to schedule the Board Meetings. Agenda and detailed notes on Agenda were sent in advance except when the Board Meetings were called by giving less than Seven days Notice in accordance with the Provisions of Section 173 of the Companies Act, 2013 and a system exists for seeking and obtaining further information and clarifications on the Agenda 14 Annual Report 2015-16
Directors Report items before the Meeting and for meaningful participation at the Meeting. All decisions at Board and Committee Meetings are carried out and are recorded in the Minutes of the respective Meetings and majority decision is carried through while the dissenting members views, if any, are captured and recorded as part of the Minutes. I further report that, I have not examined compliance by the company with applicable financial laws, like direct and indirect tax laws, Labor laws like Provident Fund and Gratuity laws, Foreign Exchange and Management Act, RBI circulars and notifications, since the same have been subject to review by the Statutory/ Internal Auditors and other designated Professionals/ Agencies I further report that, as far as possible, there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable Laws, Rules, Regulations and Guidelines. I further report that during the Audit Period the Company has: 1. Allotted 1,257,960 Equity Shares (including 6,28,980 Bonus Equity Shares) of Re. 1/- to the Grantees of Employee Stock Options upon exercise of Options under ESOP 2011 the details of which are as under: Date of Allotment of Shares Bonus Shares Exercise Price (Rs.) of Allottees April 24, 2015 30,000 30,000 10.995 01 June 22, 2015 373,070 373,070 10.995 17 October 07, 2015 9,760 9,760 10.995 09 November 02, 2015 25,210 25,210 10.995 05 November 30, 2015 102,380 102,380 10.995 06 December 30, 2015 4,950 4,950 10.995 01 February 23, 2016 7,960 7,960 10.995 02 March 31, 2016 90,650 90,650 10.995 07 6,28,980 6,28,980 Place: Hyderabad Date: November 28, 2016 Signature: Sd/- name of Practicing Company Secretary : Y.KOTESWARA RAO C.P. : 7427 To, The Members, M/s. BS Limited, #504, Trendset Towers, Road 2, Banjara Hills, Hyderabad 500034 ANNEXURE - A My report of even date is to be read along with this letter. 1. Maintenance of Secretarial Record is the responsibility of the Management of the Company. My responsibility is to express an opinion on these Secretarial Records based on my Audit. 2. I have followed the Audit Practices and process as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial Records. The verification was done on test basis to ensure that correct facts are reflected in Secretarial Records. I believe that the process and practices, I followed provide a reasonable basis for my opinion. 3. I have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company. 4. Wherever required, I have obtained the Management representation about the Compliance of Laws, Rules and Regulations and happening of events etc. 5. The Compliance of the provisions of Corporate and other applicable Laws, Rules, regulations, Standards is the responsibility of Management. My examination was limited to the verification of procedure on test basis. 6. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the Management has conducted the affairs of the Company. Place : Hyderabad Date : November 28, 2016 Signature: Sd/- Name of Practicing Company Secretary : Y.KOTESWARA RAO C.P. : 7427 Note: This Report is to be read with my letter of even date which is annexed as Annexure A and forms an integral part of this Report Annual Report 2015-16 15
BS LIMITED Annexure 5 to the Directors Report Form MGT - 9 EXTRACT OF ANNUAL RETURN As on the Financial Year ended on March 31, 2016 [Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014] I. REGISTRATION & OTHER DETAILS: CIN L27109AP2004PLC042375 Registration Date January 07, 2004 Name of the Company BS Limited Category / Sub-category of the Company Public Limited Company Whether Listed Company Yes Address of the Registered Office & Contact Details 8-2-269/10, #504, 5 th Floor, Trendset Towers, Road 2, Banjara Hills, Hyderabad 500034, Telangana. Tel: +91 40 4455 8888 Whether Listed Company Yes Name, Address & Contact details of the Registrar & Karvy Computershare Private Limited Transfer Agent, if any Karvy Selenium Tower B, Plot 31-32, Gachibowli, Financial District, Nanakramguda, Hyderabad 500 032; Tel.: +91 40 67162222, Fax : +91 40 23001153, Website - www.karvy.com, Toll Free - 1800-345-4001 II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY All the business activities contributing 10 % or more of the Total Turnover of the Company shall be stated:- Name and Description of Main Products / Services NIC Code of the Product/Service 1 Engineering, Procurement & Construction 42202 55.58 2 Trading Business 46909 44.42 III. PARTICULARS OF HOLDING, SUBSIDIARY & ASSOCIATE COMPANIES Name and Address of the CIN / GLN Holding/ Subsidiary/ Company Associate 1 BS Global Resources Private -NA- Wholly Owned Limited Subsidiary 2 BS Limited FZE -NA- Wholly Owned Subsidiary 3 Raichur Sholapur Transmission U40108MH2009GOI220024 Joint Venture Company Private Limited Company IV. SHAREHOLDING PATTERN (Equity Share Capital Break up as percentage of Total Equity) i) Category-wise Share Holding % to Total Turnover of the Company % of Shares Applicable Held Section 100.00% 2(87) 100.00% 2(87) 33.33% 2(6) of Shares held at the beginning of the year of Shares held at the end of the year % Category of Shareholders % of % of Change Demat Physical Total Total Shares Demat Physical Total Total Shares during the year A. Promoters 1. Indian Individual / HUF 282,517,480-282,517,480 64.23 278,894,773-278,894,773 63.23-1.00% Central Govt. - - - - - - - - 0.00% State Govt. (s) - - - - - - - - 0.00% 16 Annual Report 2015-16
Directors Report of Shares held at the beginning of the year of Shares held at the end of the year % Category of Shareholders % of % of Change Demat Physical Total Total Shares Demat Physical Total Total Shares during the year Bodies Corp. - - - - - - - - 0.00% Banks / FI - - - - - - - - 0.00% Any Other. 15,812,000-15,812,000 3.60 15,812,000-15,812,000 3.58-0.02% Sub-total (A) (1):- 298,329,480-298,329,480 67.83 294,706,773-294,706,773 66.81-1.02% 2. Foreign a) NRIs - Individuals - - - - - - - - 0.00% b) Other Individuals - - - - - - - - 0.00% c) Bodies Corp. - - - - - - - - 0.00% d) Banks / FI - - - - - - - - 0.00% e) Any Other. - - - - - - - - 0.00% Sub-total (A) (2):- - - - - - - - - 0.00% Total Shareholding of 298,329,480-298,329,480 67.83 294,706,773-294,706,773 66.81-1.02% Promoter (A) = (A)(1)+(A)(2) B. Public Shareholding 1. Institutions a) Mutual Funds - - - - - - - - 0.00% b) Banks / FI - - - - 47,055-47,055 0.01 0.01% c) Central Govt. - - - - - - - - 0.00% d) State Govt.(s) - - - - - - - - 0.00% e) Venture Capital Funds - - - - - - - - 0.00% f) Insurance Companies - - - - - - - - 0.00% g) FPIs / FIIs 12,122,988-12,122,988 2.76 12,122,988-12,122,988 2.75-0.01% h) Foreign Venture Capital - - - - - - - - 0.00% Funds i) Others (specify) - - - - - - - - 0.00% Sub-total (B)(1):- 12,122,988-12,122,988 2.76 12,170,043-12,170,043 2.76 0.00% 2. Non-Institutions a) Bodies Corp. i) Indian 64,974,980-64,974,980 14.77 64,268,905-64,268,905 14.57-0.20% ii) Overseas b) Individuals i) Individual shareholders 10,675,077 22,220 10,697,297 2.43 20,340,408 200,520 20,540,928 4.66 2.23% holding nominal share capital upto Rs. 2 lakh ii) Individual shareholders 52,582,631-52,582,631 11.96 42,565,800-42,565,800 9.65-2.31% holding nominal share capital in excess of Rs 2 lakh c) NBFCs Registered with - - - - 4,854,888-4,854,888 1.10 1.10% RBI c) Others (specify) CLEARING MEMBERS 198,350-198,350 0.05 217,453-217,453 0.05 0.00% NON RESIDENT INDIANS 919,974-919,974 0.21 1,788,870-1,788,870 0.41 0.20% Sub-total (B)(2):- 129,351,012 22,220 129,373,232 29.41 134,036,324 200,520 134,236,844 30.43 1.02% Total Public Shareholding (B)=(B)(1)+ (B)(2) 141,474,000 22,220 141,496,220 32.17 146,206,367 200,520 146,406,887 33.19 1.02% C. Shares held by Custodian for GDRs&ADRs - - - - - - - - 0.00% Grand Total (A+B+C) 439,803,480 22,220 439,825,700 100.00 440,913,140 22,220 441,113,660 100.00 0.00% Annual Report 2015-16 17
BS LIMITED ii) Shareholding of Promoters Sl. iii) Shareholder s Name Shareholding at the beginning of the year Share holding at the end of the year % Change of Shares % of Total Shares of the Company %of Shares Pledged / encumbered to total shares of Shares % of total Shares of the company % of Shares Pledged / Encumbered to Total Shares in Share holding during the year 1 Rajesh S Agrawal 282,517,480 64.23 44.83 278,894,773 63.23 44.60 1.00 2 Reema Agrawal 15,756,000 3.59-15,756,000 3.57 - (0.02) 3 Dhruv Bansal 56,000 0.01-56,000 0.01 - - Total 298,329,480 67.83 44.83 294,706,773 66.81 44.60 (1.02) Sl. Change in Promoters Shareholding (please specify, if there is no change) Shareholding at the beginning of the year % of Total of Shares of the Shares Company Cumulative Shareholding during the year % of Total of Shares of the Shares Company 1 At the beginning of the year 298,329,480 67.83 298,329,480 67.83 2 Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc.): 3 Decrease in Shares 3,622,707 (1.02) 294,706,773 66.81 4 At the End of the year 298,329,480 66.81 294,706,773 66.81 iv) Shareholding Pattern of Top Ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs): Sl. For Each of the Top 10 Shareholders Shareholding at the beginning of the year of Shares % of Total Shares of the Company Date* Increase / (Decrease) In shareholding Reason Cumulative Shareholding during the year of Shares % of Total Shares of the Company 1 Santkumar Brijmohan Agarwal 18096387 4.11 10/04/15 16000 Purchase 18112387 4.12 (1301190300046066) 17/04/15 207500 Purchase 18319887 4.17 24/04/15 92000 Purchase 18411887 4.19 01/05/15 56639 Purchase 18468526 4.20 08/05/15 (870589) Sale 17597937 4.00 15/05/15 (990000) Sale 16607937 3.78 22/05/15 (8672646) Sale 7935291 1.80 29/05/15 (957000) Sale 6978291 1.59 12/06/15 (5050000) Sale 1928291 0.44 10/07/15 (85000) Sale 1843291 0.42 17/07/15 (159280) Sale 1684011 0.38 14/08/15 (66646) Sale 1617365 0.37 28/08/15 (1543300) Sale 74065 0.02 26/02/16 (5000) Sale 69065 0.02 04/03/16 (38527) Sale 30538 0.01 2 Santkumar Brijmohan Agarwal 7395100 1.68 22/05/15 (5495100) Sale 1900000 0.43 (IN001019 / 10010384) 05/06/15 (200000) Sale 1700000 0.38 12/06/15 769460 Purchase 2469460 0.56 10/07/15 9955000 Purchase 12424460 2.82 17/07/15 (11000000) Sale 1424460 0.32 18 Annual Report 2015-16
Directors Report Sl. For Each of the Top 10 Shareholders Shareholding at the beginning of the year of Shares % of Total Shares of the Company Date* Increase / (Decrease) In shareholding Reason Cumulative Shareholding during the year of Shares % of Total Shares of the Company 24/07/15 (500000) Sale 924460 0.21 28/08/15 43300 Purchase 967760 0.22 30/09/15 (100765) Sale 866995 0.20 23/10/15 2500000 Purchase 3366995 0.76 11/12/15 (13700) Sale 3353295 0.76 08/01/16 (18500) Sale 3334795 0.76 29/01/16 3195905 Purchase 6530700 1.48 05/02/16 2083367 Purchase 8614067 1.95 12/02/16 (5000000) Sale 3614067 0.82 26/02/16 4648064 Purchase 8262131 1.87 04/03/16 (453171) Sale 7808960 1.77 25/03/16 5435678 Purchase 13244638 3.00 31/03/16 4274051 Purchase 17518689 3.97 3 Mount Capital Pvt Ltd 9749180 2.22 08/05/15 (5938420) Sale 3810760 1.35 15/05/15 (3810760) Sale 0 0.00 4 Payone Enterprises Private 9588660 2.18 25/12/15 (4200000) Sale 5388660 1.22 Limited 5 India Opportunities Growth 4889656 1.11 -NA- -NA- -NA- -NA- -NA- Fund Ltd - Pinewood Strategy 6 Globe Capital Market Ltd 4500800 1.02 17/04/15 149600 Purchase 4650400 1.06 (IN300966 / 10060240) 24/04/15 (126850) Sale 4523550 1.03 01/05/15 100000 Purchase 4623550 1.05 08/05/15 20200 Purchase 4643750 1.06 15/05/15 (20100) Sale 4623650 1.05 6 Globe Capital Market Ltd (Contd.) 22/05/15 1900 Purchase 4625550 1.05 29/05/15 (4500000) Sale 125550 0.03 05/06/15 (81500) Sale 44050 0.01 12/06/15 (41950) Sale 2100 0.00 19/06/15 35000 Purchase 37100 0.01 26/06/15 (35000) Sale 2100 0.00 30/06/15 5 Purchase 2105 0.00 03/07/15 295 Purchase 2400 0.00 10/07/15 1000 Purchase 3400 0.00 17/07/15 (1700) Sale 1700 0.00 07/08/15 500 Purchase 2500 0.00 14/08/15 1200 Purchase 3700 0.00 21/08/15 1700 Purchase 5400 0.00 28/08/15 1225 Purchase 6625 0.00 04/09/15 900 Purchase 7525 0.00 11/09/15 (200) Sale 7325 0.00 18/09/15 900 Purchase 8225 0.00 25/09/15 100 Purchase 8325 0.00 30/09/15 (1400) Sale 6925 0.00 09/10/15 250 Purchase 7175 0.00 16/10/15 700 Purchase 7875 0.00 Annual Report 2015-16 19
BS LIMITED Sl. For Each of the Top 10 Shareholders 6 Elara Capital Plc A/C Vespera Fund Limited Shareholding at the beginning of the year of Shares % of Total Shares of the Company Date* Increase / (Decrease) In shareholding Reason Cumulative Shareholding during the year of Shares % of Total Shares of the Company 23/10/15 (1000) Sale 6875 0.00 30/10/15 296483 Purchase 303358 0.07 06/11/15 (277333) Sale 26025 13/11/15 (20000) Sale 6025 0.00 20/11/15 39900 Purchase 45925 0.01 27/11/15 396308 Purchase 442233 0.10 04/12/15 203328 Purchase 645561 0.15 11/12/15 94918 Purchase 740479 0.17 18/12/15 255244 Purchase 995723 0.23 25/12/15 (113983) Sale 881740 0.20 31/12/15 179450 Purchase 702290 0.16 08/01/16 (4138) Sale 698152 0.16 15/01/16 (18450) Sale 679702 0.15 22/01/16 4450 Purchase 684152 0.16 29/01/16 11100 Purchase 695252 0.16 05/02/16 (2460) Sale 692792 0.16 12/02/16 (1802) Sale 690990 0.16 19/02/16 (2150) Sale 688840 0.16 26/02/16 (399025) Sale 289815 0.07 11/03/16 (90) Sale 289725 0.07 18/03/16 (129925) Sale 159800 0.04 25/03/16 275 Purchase 160075 0.04 31/03/16 4532 Purchase 164607 0.04 4276666 0.97 -NA- -NA- -NA- -NA- -NA- 7 Alamanat Financial Services 4009000 0.91 -NA- -NA- -NA- -NA- -NAand Projects Pvt Ltd 8 Share India Securities Limited 3414514 0.78 10/04/15 3402000 Purchase 6816514 1.55 01/05/15 75000 Purchase 6891514 1.57 08/05/15 98123 Purchase 6989637 1.59 15/05/15 1877 Purchase 6991514 1.59 22/05/15 (400000) Sale 6591514 1.50 29/05/15 698000 Purchase 7289514 1.66 05/06/15 1343000 Purchase 8632514 1.96 (100000) Sale 8532514 1.94 9 Falguni Sales Trading Agency 0 0.00 08/05/15 5938420 Purchase 5938420 1.35 Private Limited 22/05/15 169909 Purchase 6108329 1.39 26/06/15 534100 Purchase 6642429 1.51 10 Falguni Sales Trading Agency 0 0.00 17/07/15 6600000 Purchase 6600000 1.50 Pvt Ltd 31/07/15 46629 Purchase 6646629 1.51 09/10/15 (200000) Sale 6446629 1.46 16/10/15 (102170) Sale 6344459 21/10/15 (83819) Sale 6260640 1.42 20 Annual Report 2015-16
Directors Report Sl. For Each of the Top 10 Shareholders 11 Falguni Sales Trading Agency Private Limited 12 Thirteen Steps Tradelink Private Limited Shareholding at the beginning of the year of Shares % of Total Shares of the Company Date* Increase / (Decrease) In shareholding Reason Cumulative Shareholding during the year of Shares % of Total Shares of the Company 06/11/15 (885000) Sale 5375640 1.22 13/11/15 10000 Purchase 5385640 1.22 25/12/15 (4718000) Sale 667640 0.15 01/01/16 (7800) Sale 675440 0.15 22/01/16 4718000 Purchase 5393440 1.22 0 0.00 29/01/16 5311951 Purchase 5311951 1.20 05/02/16 185070 Purchase 5497021 1.24 12/02/16 661106 Purchase 6158127 1.40 19/02/16 314849 Purchase 6472976 1.47 25/03/16 666675 Purchase 7139651 1.62 0 0.00 15/05/15 3810760 Purchase 3810760 0.87 22/05/15 112460 Purchase 3923220 0.89 29/05/15 520000 Purchase 4443220 1.01 17/07/15 642280 Purchase 5085500 1.15 13 Mrunmayee Tradelink Private Limited 183655 0.05 29/01/16 5000000 Purchase 5183655 1.18 04/03/16 (1000000) Sale 4183655 0.95 11/03/16 12565 Purchase 4196220 0 0.00 22/05/15 4188086 Purchase 4188086 0.95 29/05/15 401150 Purchase 4589236 1.04 05/06/15 142250 Purchase 4731486 1.08 12/06/15 515400 Purchase 5246886 1.19 10/07/15 (5000000) Sale 246886 0.06 14 Mrunmayee Tradelink Private Ltd 0 0.00 10/07/15 5000000 Purchase 5000000 1.13 17/07/15 (50000) Sale 4950000 1.13 24/07/15 500000 Purchase 5450000 31/07/15 547266 Purchase 5997266 1.36 07/08/15 50000 Purchase 6047266 1.37 21/08/15 (126650) Sale 5920616 1.34 28/08/15 (62000) Sale 5858616 1.33 04/09/15 (37700) Sale 5820916 1.32 31/10/15 (110000) Sale 5710916 1.30 11/06/15 (2066800) Sale 3644116 0.83 13/11/15 1112000 Purchase 4756116 1.08 20/11/15 (600000) Sale 4156116 0.94 15 Mrunmayee Tradelink Private 0 0.00 29/01/16 3804716 Purchase 3804716 0.86 Limited 19/01/16 600000 Purchase 4404716 0.99 25/03/16 356500 Purchase 4761216 1.08 16 Globe Fincap Limited 2503000 0.57 29/05/15 6500000 Purchase 9003000 2.05 17 Coronation Tradelink Private 0 0.00 22/05/15 3022660 Purchase 3022660 0.69 Limited Annual Report 2015-16 21
BS LIMITED Sl. For Each of the Top 10 Shareholders 18 Stock Holding Corporation of India Ltd - A/C NSE D 19 Step Inn Commercial Line Pvt Ltd 20 Step Inn Commercial Line Private Limited 21 Step Inn Commercial Line Private Limited Shareholding at the beginning of the year of Shares % of Total Shares of the Company Date* Increase / (Decrease) In shareholding Reason Cumulative Shareholding during the year of Shares % of Total Shares of the Company 29/05/15 1100000 Purchase 4122660 0.94 05/06/15 287919 Purchase 4410579 1.00 10/07/15 (3903580) Sale 506999 0 0.00 08/05/15 1000000 Purchase 1000000 0.23 15/05/15 1000000 Purchase 2000000 0.45 05/06/15 5000000 Purchase 7000000 1.59 28/08/15 1500000 Purchase 8500000 1.93 15/01/16 2000 Purchase 8502000 1.93 29/01/16 (1000000) Sale 7502000 1.70 05/02/16 (200) Sale 7501800 1.70 12/02/16 5000000 Purchase 12501800 2.84 26/02/16 (2500000) Sale 10001800 2.27 25/03/16 (5501800) Sale 4500000 1.02 3534000 0.80 12/06/15 (3534000) Sale 0 0.00 0 0.00 29/05/15 1539700 Purchase 1539700 0.35 12/06/15 3700900 Purchase 5240600 1.19 26/06/15 501420 Purchase 5742020 1.31 03/07/15 237000 Purchase 5979020 1.36 10/07/15 (4000000) Sale 1979020 0.45 0 0.00 10/07/15 4000000 Purchase 4000000 0.91 17/07/15 2400000 Purchase 6400000 1.45 28/08/15 (156179) Sale 6243821 1.42 04/09/15 (28821) Sale 6215000 1.41 31/10/15 (525130) Sale 5689870 1.29 20/11/15 (330000) Sale 5359870 1.22 27/11/15 (819900) Sale 4539970 1.03 22 Step Inn Commercial Line 0 0.00 3472670 Private Limited (1207780000017479) 25/03/16 3472670 Purchase 4561170 23 Mukesh Vijayvargiya 0 0.00 26/06/15 11664000 Purchase 11664000 2.65 03/07/15 650000 Purchase 12314000 2.79 10/07/15 (300000) Sale 12014000 2.73 04/09/15 (4167852) Sale 7846148 1.78 27/11/15 (30686) Sale 7815462 1.77 04/12/15 340200 Purchase 8155662 1.85 08/01/16 (600000) Sale 7555662 1.71 24 Ideamax Consultancy Services 0 0.00 24/07/15 5100000 Purchase 5100000 1.16 Private Limited 07/08/15 521840 Purchase 5621840 1.28 14/08/15 (30000) Sale 5591840 1.27 18/12/15 4947600 Purchase 10539440 2.39 25/12/15 6943000 Purchase 17482440 3.97 22 Annual Report 2015-16
Directors Report Sl. For Each of the Top 10 Shareholders 25 Quickstart Transporters Private Limited Shareholding at the beginning of the year of Shares % of Total Shares of the Company Date* Increase / (Decrease) In shareholding Reason Cumulative Shareholding during the year of Shares % of Total Shares of the Company 22/01/16 (7934600) Sale 9547840 2.17 0 0.00 26/02/16 7000000 Purchase 7000000 1.59 04/03/16 (500000) Sale 6500000 1.47 11/03/16 (225000) Sale 6275000 1.42 18/03/16 242092 Purchase 6517092 1.48 25/03/16 150000 Purchase 6667092 1.51 31/03/16 (725000) Sale 5942092 1.35 26 Reliance Capital Limited 0 0.00 26/02/16 4200000 Purchase 4200000 * Date of Purchase / Sale has been considered as the date on which the beneficiary position was provided by the Depositories to the Company. v) Shareholding of Directors and Key Managerial Personnel: Sl. For Each of the Directors and KMP Shareholding at the beginning of the year % of Total of Shares of the Shares Company Date* Increase / (Decrease) In Shareholding Reason Cumulative Shareholding during the year % of Total of Shares of the Shares Company 1 Rajesh Agarwal 282,517,480 64.23 -NA- (3,622,707) Invocation 278,894,773 63.23 2 Arun Dogra Nil Nil -NA- Nil -NA- Nil Nil 3 Mahesh Kumar Khera Nil Nil -NA- Nil -NA- Nil Nil 4 A. Gopalakrishnan Iyer Nil Nil -NA- Nil -NA- Nil Nil 5 Alka Kumari Nil Nil -NA- Nil -NA- Nil Nil vi) Indebtedness Indebtedness of the Company including Interest Outstanding / Accrued but not due for Payment Secured Loans excluding Deposits Unsecured Loans Deposits Total Indebtedness Indebtedness at the beginning of the Financial Year i) Principal Amount 1,650,813,821 647,446,184-2,298,260,005 ii) Interest due but not paid - - - - iii) Interest accrued but not due 14,252,199 - - 14,252,199 Total (i+ii+iii) 1,665,066,020 647,446,184-2,312,512,204 Change in Indebtedness during the Financial Year Addition 1,443,402,220 220,227,258-1,663,629,478 Reduction 944,119,272 203,264,080-1,147,383,352 Net Change 499,282,948 16,963,178-516,246,126 Indebtedness at the end of the Financial Year i) Principal Amount 2,144,385,795 664,409,362-2,808,795,157 ii) Interest due but not paid - - - - iii) Interest accrued but not due 19,963,173 - - 19,963,173 Total (i+ii+iii) 2,164,348,968 664,409,362-2,828,758,330 Annual Report 2015-16 23
BS LIMITED Vii. Remuneration of Directors and Key Managerial Personnel A. Remuneration to Managing Director, Whole-time Directors and/or Manager: No Particulars of Remuneration Name of MD / WTD / Manager Total Rajesh Agarwal Arun Dogra Kamesh Yalamarty Amount 1 Gross Salary (a) Salary as per provisions contained in Section 17(1) of the Incometax Act, 1961 48,00,000 12,00,000 36,81,588 96,81,588 (b) Value of Perquisites u/s 17(2) Income-tax Act, 1961 - - - - (c) Profits in lieu of Salary under Section 17(3) Income-tax Act, 1961 - - - - 2 Stock Option - - - - 3 Sweat Equity - - - - 4 Commission - as % of Profit - Others, specify - - - - - - - - 5 Others, please specify - - - - Total (A) 48,00,000 12,00,000 36,81,588 96,81,588 Ceiling as per the Act Rs. 8.29 Crores (being 10% of the Net Profits of the Company calculated as per Section 198 of the Companies Act, 2013) B. Remuneration to other Directors: No Particulars of Remuneration Name of Directors Total Amount 1 Independent Directors Mahesh Kumar Khera A. G. Iyer Dimple Kaul Narayan Rao Gali - Fee for attending Board / Committee Meetings 1,60,000 80,000 1,20,000 40,000 4,00,000 - Commission - - - - - - Others, please specify - - - - - Total (1) 1,60,000 80,000 1,20,000 40,000 4,00,000 2 Other Non-Executive Directors - Fee for attending Board / Committee Meetings - - - - - - Commission - - - - - - Others, please specify - - - - - Total (2) 1,60,000 80,000 1,20,000 40,000 4,00,000 Total (B)=(1+2) 1,60,000 80,000 1,20,000 40,000 4,00,000 Total Managerial Remuneration *100,81,588 Overall Ceiling as per the Act Rs. 0.83 Crores (being 1% of the Net Profits of the Company calculated as per Section 198 of the Companies Act, 2013) * Total Remuneration to Managing Director, Whole Time Directors and Other Directors (being the Total of A and B). C. Remuneration to Key Managerial Personnel other than MD / MANAGER / WTD Key Particulars of Remuneration No 1 Gross salary Managerial Personnel Total CEO Company CFO Amount Secretary - 6,35,000-6,35,000 (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 - - - - (c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961 - - - - 2 Stock Option - - - - 3 Sweat Equity - - - - 4 Commission - - - - - as % of profit - Others, specify 5 Others, please specify - - - - Total - 6,35,000-6,35,000 V. Penalties /Punishment/Compounding Of Offences Type Section of the Companies Act Brief Description Details of Penalty / Punishment / Compounding fees imposed -NA- Authority [RD / NCLT / COURT] Appeal made, if any (give Details) 24 Annual Report 2015-16
Directors Report Annexure 6 to the Directors Report FORM AOC 2 (Pursuant to Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014) Disclosure of Particulars of Contracts / Arrangements entered into by the Company with Related Parties referred to in Section 188(1) of the Companies Act, 2013 including certain Arms Length Transactions under Third proviso thereto: 1. Details of Contracts or Arrangements or Transactions not at Arm s Length Basis: No Particulars (a) Name(s) of the Related Party and Nature of Relationship (b) Nature of Contracts / Arrangements / Transactions (c) Duration of the Contracts / Arrangements / Transactions (d) Salient terms of the Contracts or Arrangements or Transactions including the value, if any (e) Justification for entering into such Contracts or Arrangements or Transactions (f) Date(s) of approval by the Board (g) Amount paid as Advances, if any (h) Date on which the Special Resolution was passed (i) Amount paid as Advances, if any (j) Date on which (a) the Special Resolution was passed in General Meeting as required under first proviso to Section 188 of the Companies Act, 2013 2. Details of Material Contracts or Arrangement or Transactions at Arm s Length Basis: No (a) (b) (c) (d) (e) (f) Particulars Name(s) of the Related Party and Nature of Relationship Nature of Contracts / Arrangements / Transactions Duration of the Contracts / Arrangements / Transactions Salient terms of the Contracts or Arrangements or Transactions including the value, if any Date(s) of Approval by the Board, if any Amount paid as Advances, if any Annexure 7 to the Directors Report CSR Activities for the Financial Year 2015-16 No Particulars 1. A brief outline of the Company's CSR Policy The main objective of the CSR Policy is to lay down guidelines for the Company to undertake activities for sustainable development of the Society. It aims at supplementing the Government with welfare measures for the Society based on the immediate and long term social and environmental consequences of their activities. 2. Overview of Projects or Programs proposed to be undertaken -NA- -NA- The CSR Policy of the Company broadly covers the following areas: 1. To direct Company s CSR Programmes, inter alia, towards achieving one or more of the following - Drinking Water Supply; - Supporting Rural Development; - Social Empowerment; - Promoting Education; - Healthcare by providing medicines and medical facilities; - Sanitation; - Enhancing environmental and natural capital; - Creating livelihoods for people, especially those from disadvantaged sections of Society, in Rural and Urban India; - Preserving and promoting Sports; - Grant / Donation / Financial Assistance / Sponsorship to reputed NGOs of the Society / locality engaged in uplifting Societal Standards; - Adoption of Village for carrying out the activities like Infrastructural Dev elopment viz., Road, Electricity, Water Supply etc.; Annual Report 2015-16 25
BS LIMITED No Particulars 2. To pursue CSR Programmes primarily in areas that fall within the economic vicinity of the Company s operations to enable close supervision and ensure maximum development impact; 3. To carry out CSR Programmes in relevant local areas to fulfill commitments arising from requests by Government / Regulatory Authorities and to earmark amounts of monies towards Corporate Social Responsibility (CSR) activities and to spend such monies through CSR Cells of such administrative bodies of the Government and/or directly by way of developmental works in the local areas around which the Company operates; 4. To provide equal opportunities to beneficiaries of the Company s CSR Programmes as Vendors or Employees on merit; 3. Reference to the web-link to the CSR Policy http://www.bslimited.in/investors.html and Projects or Programs. 4. The Composition of the CSR Committee. No Name of the Director Designation Status Mr. Rajesh Agarwal Executive Director Chairman Mr. Mahesh Kumar Khera Independent Director Member Mr. A. Gopalakrishnan Iyer Independent Director Member 5. Average Net Profit of the Company for Last Rs. 86,63,55,263/- Three Financial Years 6. Prescribed CSR Expenditure (Two per cent of Rs. 1,73,27,105/- the amount as in item 3 above) 7. Details of CSR spent during the Financial year (a) Total amount to be spent for the Financial Rs. 1,73,27,105/- year; (b) Amount unspent, if any; Rs. 1,72,20,000/- (c) Manner in which the amount spent during the Financial year is detailed below. (Rs. in Lakhs) (1) (2) (3) (4) (5) (6) (7) (8) No CSR project Or activity identified. 1 Projects near Factory Sites 2 Education Services 4 Infrastructure Support, Equipment at Hospitals, Construction of Sanitary facilities Sector in Which the Project is covered - Rural Development - Health, Hygiene and Sanitation - Water and Energy - Community / Woman Empowerment Promoting Education Health & Hygiene Projects or programs (1) Local area or other (2) Specify the State and district Where projects or Programs was undertaken Muppireddypalli, Medak District & Banjara Hills, Telangana Muppireddypalli and Gajwel, Telangana Ghanpur, Medchal Mandal, Telangana Amount outlay (budget) project or Program wise Amount spent on the Projects or programs Subheads: (1)Direct expenditure on projects or programs. (2) Overheads: Cumulative expenditure up to the Reporting Period Amount Spent: Direct or through implementing Agency 50.00 0.82 0.82 Direct and through implementing Agency 25.00 0.25 0.25 Direct 100.00 Nil Nil Nil 26 Annual Report 2015-16
Directors Report In case the Company has failed to spend the Two Per cent, of the Average Net Profit of the last Three Financial years or any part thereof, the Company shall provide the reasons for not spending the amount in its Board Report. A Responsibility Statement of the CSR Committee that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the Company. Sd/- (Managing Director) CSR Committee and Board had approved the CSR Projects with specific outlay. However, finalization of suitable Implementing Agencies has taken longer than expected. The Company will be embarking on the Projects as identified by Management during the Financial Year 2015-16. The CSR Committee confirms that the implementation and monitoring of the CSR Policy is in compliance with the CSR Objectives and Policy of the Company. Sd/- (Chairman CSR Committee) Annexure 8 to the Directors Report Statutory Information Information under Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 and forming part of the Directors Report. FORM A (Form for Disclosure of particulars with respect to conservation of energy) No Particulars Unit 2015-16 2014-15 POWER & FUEL CONSUMPTION: 1. Electricity Units/KWH 39,83,310 41,16,610 d) Purchased: Total Amount Rate/Unit Rs. Rs. Ltrs (appx.) 3,37,37,170 8.47 3,75,000 4,20,44,820 10.21 2,77,692 e) Own Generation: Through Diesel 2. Coal: Reheating of Billets MTS 4377.88 7052.81 (Specify quality and where used) 3. Furnace Oil Ltrs 1035 4,26,220.7 CONSUMPTION PER UNIT OF PRODUCTION : Electricity (Units/ Mts) 34.64 31.17 Fuel (Ltrs/ Mts) 3.26 2.10 Others (Furnace Oil) (Ltrs/ Mts) 0.01 3.23 A. RESEARCH & DEVELOPMENT (R & D) FORM B (Form for Disclosure of Particulars with respect to Technology Absorption) 1. Specific area in which R&D carried out by the Company. In-house R&D carried out in respect of the properties of the Steel used and related Weldability, particularly the method of welding and strength of the Weldable Structure. The Company also uses a Spectrometer for Chemical Testing. The Company has made major Strides in Development of Emergency Restoration System using Trailer-Mounted Mobile Power System for immediate reinstatement of collapsed Transmission Lines due to natural calamities. Staying abreast of the Global trend for Zero Waste and Total Quality, the Company embarked on a Mission to improve Operational Efficiency, HR and Admin realignment and increase productivity with the help of an external agency. 2. Benefits derived as a result of the above R & D. Improvement in quality of Welding with superior strength of Welded structure. Addition of 19/23 channel Spectrophotometer is benefiting the Company in delivering quality. In view of the Vintage Transmission Systems across the country, a Mobile System and Equipment would come in handy and help in minimizing the impact of power outage due to the Transmission Line failures. The Company has identified methods and practices that will help attain managerial effectiveness and process efficiency to achieve a target of Zero Product Re-work such as irregular and continuous Quality Audits at all points of the value chain. Annual Report 2015-16 27
BS LIMITED 3. Future Plan of Action. Development is being actively pursued to reduce the cost of production and further improvement in quality of products. Quality Assurance laboratory and facilities are being up-graded taking into consideration the advancement made in the field of Metallurgical testing and analysis s. Extensive study and characterizations of high tensile grade of steel for their corrosion behavior and properties for Weldability. A Mobile Substation is under Development to complement our ERT efforts. 4. Expenditure on R & D No Description 2015-16 2014-15 (a) Capital NIL NIL (b) Recurring -NA- -NA- (c) Total NIL NIL (d) Total R & D expenditure as a Percentage of total turnover NIL NIL B. FUTURE PLAN, TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION 2015-16 2014-15 Import of Technology NIL NIL C. FOREIGN EXCHANGE EARNINGS AND OUT GO (Amount Rs. in Crores) Description 2015-16 2014-15 (a) Earnings 351.53 70.42 (b) Outgo 109.88 67.45 For and on behalf of the Board of Directors Date : November 28, 2016 Place : Hyderabad (Rajesh Agarwal) Chairman & Managing Director Management Discussion and Analysis World Economy According to International Monetary Fund (IMF), global economy has grown by 3.1 percent in 2015 and is projected to slow to 3.1 percent in 2016 before recovering to 3.4 percent in 2017. The forecast reflects a more subdued outlook for advanced economies following the June U.K. vote in favor of leaving the European Union (Brexit) and weaker-thanexpected growth in the United States. Market sentiment toward emerging market economies has, however, improved with expectations of lower interest rates in advanced economies, reduced concern about China s near-term prospects following policy support to growth, and some firming of commodity prices. But prospects differ sharply across countries and regions, with emerging Asia in general and India in particular showing robust growth and sub-saharan Africa experiencing a sharp slowdown. Indian Economy India has emerged as the fastest growing major economy in the world as per the Central Statistics Organisation (CSO) and International Monetary Fund (IMF). According to the Economic Survey 2015-16, the Indian economy will continue to grow more than 7 per cent in 2016-17. The improvement in India s economic fundamentals has accelerated in the year 2015 with the combined impact of strong government reforms, RBI's inflation focus supported by benign global commodity prices. According to IMF World Economic Outlook, Indian economy is expected to grow at 7-7.75 per cent during FY 2016-17, despite the uncertainties in the global market. The Economic Survey 2015-16 had forecasted that the Indian economy will growing by more than 7 per cent for the third successive year 2016-17 and can start growing at eight per cent or more in next two years. The steps taken by the government in recent times have shown positive results as numerous foreign companies are setting up their facilities in India on account of various government initiatives like Make in India and Digital India. The government has also launched an initiative to create 100 smart cities as well as Atal Mission for Rejuvenation and Urban Transformation (AMRUT) for 500 cities with an outlay of USD 7.47 billion and USD 7.34 billion respectively. The International Monetary Fund (IMF) and the Moody s Investors Service have forecasted that India will witness a 28 Annual Report 2015-16
Management Discussion and Analysis GDP growth rate of 7.5 per cent in 2016, due to improved investor confidence, lower food prices and better policy reforms. According to Mr. Jayant Sinha, Minister of State for Finance, Indian economy would continue to grow at 7 to 9 per cent and would double in size to USD 4 5 trillion in a decade, becoming the third largest economy in absolute terms. Indian Power Sector India, in spite of being home to one sixth of world population and third largest economy (after adjusting for Purchasing Power Parity), consumes only 6% of global energy with one fifth of the population not having access to electricity. With initiatives from the Government towards modernization and developing manufacturing base (via Make in India) more and more population are anticipated to live in cities and bear fruit of rising income by 2040. With this, India is entering a sustained phase of rapid growth in energy consumption. It is set to contribute more than any other country to the projected rise in global energy demand. India has also begun to take steps towards deployment of low carbon technologies with focus towards Hydro, Nuclear, Solar and Wind Power in order to deliver its pledge to have 40% share of non-fossil by 2030. Meeting India s energy demand needs commitment of huge capital along with constant vigilance. An estimated USD 2.8 trillion is required to meet energy needs in 2040. Three quarters of this investment goes to power sector, which needs to almost quadruple in size to keep up with projected electricity demand but which remains beset for now by high network losses and high financial losses among the local distribution utilities. Indian Power Transmission India currently has two transmission systems Interstate Transmission System (ISTS) and Intra-state Transmission System (Intra-STS). These systems together make up 337,000ckms of transmission lines (>220kv), 15,000MW of high-voltage direct current (HVDC) terminals and 633, 000MVA of transformation capacity (incl. HVDC lines). Based on the capacity addition required for the inter-state (ISTS) and intra-state transmission systems, a capex of INR2.6tn would be required over the 13th Plan. Out of this, NR1.3tn would be spent on the ISTS and the balance INR1.3tn would be spent by the states on the intra-state transmission network (INR300b on 400kv level and the balance INR1, 000b primarily 220kv and below). Transmission Capacity Addition Description Transmission Lines HVDC Bipole Lines 10 th Plan End (2003-2007) 11 th Plan End (2008-2012) 12 th Plan End (2013-2017) 13 th Plan End (2018-2022) 5,872 9,432 16,872 27,472 765kV 2,184 5,250 32,250 54,450 400kV 75,722 106,819 144,819 174,819 220kV 114,629 135,980 170,980 256,694 Total 198,407 257,481 364,921 513,435 HVDC Terminal HVDC back-to-back 3000 3,000 3,000 3,000 HVDC Bipole 5,000 12,000 19,500 34,500 Terminals HVDC Terminal 8,200 9,750 22,500 37,500 Capacity (MW) AC Substations Capacity 765 kv 25,000 174,000 253,000 400 kv 92942 151,027 196,027 245,027 220 kv 156,497 223,774 299,774 459,774 Total 249,439 399,801 669,801 957,801 Annual Report 2015-16 29