Bil Energy System Ltd Management Discussions

BACKGROUND

Bil Energy Systems Limited manufactures Stamping For Rotating Machines and Transformer core and laminations. It is specialized in tailor-made circular stampings upto!250 mm diameter and segmental stampings of width up to 1250 mm with focused end products for Altemators(Domestic / Industrial), Motors (Micro/ HT/ LT), Wind Mill Generators, Hydro Generators, Turbo Generators, Compressors for Air conditioners and Refrigerators, AC / DC Motors for Agriculture Pumps, Fans, Computer transformer and Ballasts. The Company also has a wide range of 1EC frame tools to manufacture circular stampings. As regards Transformer Cores and Lamination, the Company manufactures the same in various shapes and sizes up to 1000 mm width and also rectangular shaped cores with or without holes. The facility is in place to meet customer specific requirements. Rotors are supplied either loose wire tied, welded or aluminum the-casted. Further, stampings made out of semi-processed steel is decarbed, annealed and blued at the Companys unit itself. The Company is fully equipped with Continuous bum off, decarbannealing and blueing furnace.

INDUSTRY STRUCTURE AND DEVELOPMENTS

Being the key link for delivery of power between the point of generation and the end user, transformers have been witnessing buoyant growth on account of various reforms in the Indian power sector.

Power is one of the most critical components of infrastructure crucial for the economic growth and welfare of nations. The existence and development of adequate infrastructure is essential for sustained growth of the Indian economy.

Theproductionofiransformersrequirescold-rolledgrain-orien ted (CRGO) steel as the key raw material. Procurement of CRGO steel is one of the major bottlenecks for the transformers industry as this material is not produced in India, and the industry has to depend on imports for its requirement. The transformer industry is facing the scarcity of high-grade material CRGO. The cost of CRGO accounts for around 25 per cent of the total cost of the production of transformers.

With the enforcement of quality control or dersbringing CRGO, along with distribution transformers under mandatory certification of BIS with energy efficiency levels defined, the demand for high quality CRGO steel has swollen manifold. This in trim increased pressure on suppliers, importers and manufacturing mills too.

The Government of India has identified power sector as a key sector of focus so as to promote sustained industrial growth. Some initiatives by the Government of India to boost the Indian powersector:

• Initiatives taken by the Energy Efficiency Services (EESL) have resulted in energy savings of 37 billion kWh and reduction in greenhouse gas (GHG) emissions by 30milliontonnes.

• The Government of India approved National Policy on Bio fuels - 2018, the expected benefits of this policy are health benefits, cleaner environment, employment generation, reduced import dependency, boost to infrastructural investment in rural areas and additional income to farmers.

The Government of India has released its roadmap to achieve 175 GW capacity in renew able energy by 2022, which includes 100 GW of solar power and 60 GW of wind power. The Union Government of India is preparing a rent a roof policy for supporting its target of generating 40gigawatts (GW)of power through solar rooftop projects by 2022.

The Government of India is taking a number of steps and initiatives like 10- year tax exemption for solar energy projects, etc., in order to achieve Indias ambitious renewable energy targets of adding 175 GW of renewable energy, including addition of 100 GW of solar power, by the year 2022. The government has also sought to restart the stalled hydro power projects and increase the wind energy production target to 60GWby 2022 from the current 20 GW.

OPERATING RESULTS OF THE COMPANY

The Financial Statements have been prepared in compliance with the requirements of the Companies Act. 2013 and Indian Accounting Standards(AS) notified by the Companies(Accounts)Rules,2015 as amended under section 133 of the Act.

The salient features of the Companys performance are:

• Total Sales Nil

• Net Loss of Rs. 6322.71 Lakhs

The Company has a networth of about Rs. (5568.40) Lakhs as on 31^slMarch, 2021.

RATIO:

There is no significant change in the financial ratio as compared to the previous financial year.

In the current year, the Return on Networth of the Company is (113.55%) compared to(183.45%)in the previous year.

OUTLOOK FOR THE COMPANY

With the Central and State Governments promoting Renewable Energy and increased awareness for sustainable energy, the future outlook for the renewable industry is looking verypositive. The Companys customers list, which includes well respected big companies and our product acceptability, give ushope to overcome the losses and post a decent-top line and bottom-line in the ensuing year.

HUMAN RESOURCES AND INDUSTRIAL RELATION :

Your Company strongly believes that employees are centra) to the Companys transformation agenda and that it is important to build capabilities of employees to handle both current andfuture needs. During the year, the Company worked extensively on identifying the needs ofemployees across all categories and level. The Company has built a young and vibrant team of qualified and competent professionals to meet the emerging business challenges and market competition.

RISK AND CONCERNS

The Company has to mainly depend on foreign suppliers for import of CRGO and CRNGO.Any delay in procurement of the same would impact the financials of the Company. However.the Company has tied up with major players and has developed a strong relationship with these suppliers.Further, increase in the prices of Electrical Steel would also have an impact on the bottom line of the Company. However, it is an established pattern of the Company that any escalation in the cost is passed on to the customers to ensure that margins are not affected.While this is the broad understanding with the customers, they may not absorb the increase inrawmaterial cost to full extent at all times and it may not be with immediate effect in all situations.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

In the Company, the Board of Directors is responsible for ensuring that internal financial controls have been laid down in the Company and that such controls are adequate and functioning effectively. BilEnergy Systems Limited has policies, procedures, control frame works and management systems in place that map into the definition of Internal FinancialControls as detailed in the Companies Act, 2013. These have been established at the entity and process levels and are designed to ensure compliance to internal control requirements, regulatory compliance and appropriate recording of financial and operational information.

Internal Financial Controls that encompass the policies, processes and monitoring systems for assessing and mitigating operational, financial anc compliance risks and controls over related party transactions, substantially exist. The senior management reviews and certifies the effectiveness of the internal control mechanism over financial reporting, adherence to the code of conduct and Companys policies for which they are responsible and also the compliance to established procedures relating to financial or commercial transactions, where they have apersonal interest or potential conflict of interest, if any.

CAUTIONARY STATEMENT

Statements in the Managements Discussion and Analysis report, describing the Companys objectives, projections and estimates, are forward-looking statements and progressive within the meaning of applicable securities laws and regulations. Actual results may vary from those expressed or implied, depending upon economic conditions. Government Policies and other incidental / related factors.

By order of the Board of Directors, For Bil Energy Systems Limited
Sd/
Lalit Laxiraro Agarwal
DIN: 06427436
Chairman	Mumbai, 01 September 2021