bkm industries Directors report

Dear Shareholders,

Your Directors take pleasure in presenting the 9th (Ninth) Annual Report together with the Audited Annual Accounts of your Company for the year ended March 31, 2020.

FINANCIAL RESULTS/SUMMARY

(In Rs lakhs)

	Standalone		Consolidated
Particulars	2019-20	2018-19	2019-20	2018-19
Total Revenue	868	4152	870	4744
Profit / (Loss) Before Tax (PBT)	-3277	-5888	-3339	-5748
Less: Provisions for Taxation	-	-	-	-
Profit After Tax (PAT)	-2860	-5642	-2922	-5502
Other Total Comprehensive Income	5	33	5	33
Total Comprehensive Income for the period	-2855	-5609	-2917	-5469

STATE OF COMPANYS AFFAIRS AND OPERATIONS

The Company is engaged in the business of metal packaging products,aluminum semi rigid containers, ship building, naval design services and agro-commodities. The Company has achieved a turnover from operations of Rs. 374 lakhscompared to Rs. 3,923 lakhsin the previous financial year and incurred a net loss of Rs. 2860 lakhscompared to a net loss of Rs. 5642 lakhs in the previous financial year.

However, the Company has suspended manufacturing operations at its plant located at 161/1, Village: Khutli, Via Khanve, Dudhni Road, U.T. of DNH, Silvassa, PIN-396230, with effect from 17th July, 2020 from 6A.M. onwards, due to sluggish demand of the products of the Company During the year the management has reviewed the recoverability of its debtors and security deposit in hand based on technical evaluation and has written down its debtors and security deposit (unfit for human consumption as per FASSAI) by Rs. 1,919 lakhs.

CHANGES IN THE NATURE OF BUSINESS, IF ANY

There is no change in the business of the Company during the financial year 2019-20.

DIVIDEND

Due to losses incurred during the financial year under review, the Board could not recommend any dividend on the Equity Shares of the Company.

ISSUE OF SHARES

The Company has not issued any share / securities during the financial year under review.

DETAILS PERTAINING TO SHARES IN SUSPENSE ACCOUNT

Disclosure as required under regulation 34(3) read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "Listing Regulations"), is given in Corporate Governance Report which forms part of this report.

DEPOSITS

The Company has not accepted any deposit during the year under review.

TRANSFER TO RESERVE

During the year under review your Company has not transferred any amount to the General Reserve Account.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the Directors Responsibility Statement as referred to in section 134(3)(c) and 134(5) of the Companies Act, 2013, your Directors hereby confirm that:

i) In the preparation of the annual accounts for the year ended 31st March, 2020, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for that period;

iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) The Directors have prepared the annual accounts on a going concern basis;

v) The Directors, have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

CONSERVATION OF ENERGY, RESEARCH &DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Information related to conservation of energy, Research & Development, technology absorption, foreign exchange earnings and outgo as required under section 134(3)(m) of the Companies Act, 2013 and Rule 8(3) of Companies (Accounts) Rules, 2014 are given in the Annexure – ‘A as attached hereto forming part of this Report.

CORPORATE GOVERNANCE

Your Company has practiced sound Corporate Governance and taken necessary actions at appropriate times for enhancing and meeting stakeholders expectations while continuing to comply with the mandatory provisions of Corporate Governance. Your Company has complied with the requirements of all the applicable Regulations read with Schedule - V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as issued by Securities and Exchange Board of India and as amended from time to time. Your Company has given its deliberations to provide all the information in the Boards Report and the Corporate Governance Report as per the requirements of Companies Act, 2013 and the Listing Regulations entered by the Company with the Stock Exchanges, as a matter of prudence and good governance.

A Report on Corporate Governance along with a certificate from Mr. Santosh Kumar Tibrewalla, Practicing Company Secretary, certifying compliances with the provisions relating to the Corporate Governance as stipulated in the Listing Regulations forms part of this report as Annexure –‘B.

CODE OF CONDUCT

The Code of Conduct for all the Board Members, Key Managerial Personnel and other Senior Executives of the Company is in force and the same has been placed on the Companys website: www.bkmindustries.com. Duties of the Independent Directors have suitably been incorporated in the code. A declaration signed by the Managing Director & CEO to this effect forms part of Corporate Governance Report as annexed to this Report.

CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING

In terms of the SEBI (Prohibition of Insider Trading) Regulations, 1992, your Company has adopted the Code of Conduct for prevention of Insider Trading. Further, in accordance with the provisions of Regulation 8 of SEBI (Prohibition of Insider Trading) Regulations, 2015, the Board of Directors of the Company has duly approved and adopted the code of practices and procedure for fair disclosure of Un-published Price Sensitive Information and formulated the code of conduct of the Company.

However, SEBI has amended certain provisions of the SEBI (Prohibition of Insider Trading) Regulations, 1992 w.e.f. 1stApril, 2019, which were duly adopted by the Company and the Code of Conduct was revised accordingly, the aforesaid code of conduct for prevention of Insider Trading is duly placed on the Website of the Company atwww.bkmindustries.com

PERFORMANCE & FINANCIAL POSITION OF SUBSDIARY/ASSOCIATES

Highlights of performance of subsidiaries, associates and their contribution to the overall performance of the Company during the period. [Pursuant to Section 134 and Rule 8 of Companies (Accounts) Rules, 2014]

SUBSDIARY

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, details containing salient features of the financial statement of subsidiary companies in Form AOC-1 are given in Annexure-‘C. The details of performance of the Subsidiary Companies are as follows:

a. Euroasian Ventures FZE

The revenue of the Company for the year ended 31st March, 2020 stood at AED 50642 (equivalent to Rs 9.78 lakhs during the year ended 31st March, 2020, the Company had incurred net loss of AED 180423 equivalent to 34.83 lakhs (approx.)

b. Eurasian Steels LLC

Euroasian Steels LLC is the subsidiary of Euroasian Ventures FZE. The Companyhas not undertaken any business during the financial year under review. Therefore, the revenue of the Company for the year ended 31stMarch, 2020stood NIL.

c. Jiwanjyoti Vanijya Pvt. Ltd.,Wholly-owned Subsidiary Company

The Company has reported total revenue Rs. 7.69 lakhs during the year as compared to revenue of Rs. 7.21 lakhs in the previous year. During the year ended 31st March, 2020, the Company had incurred a net loss of Rs. 24.58 lakhs compared to Rs. 25.72 lakhs in the previous year

d. Glitter Agencies Pvt. Ltd.,Wholly-owned Subsidiary Company

The Company has reported total revenue Rs. 7.65 lakhs during the year as compared to revenue of Rs. 7.20 lakhs in the previous year. During the year ended 31st March, 2020, the Company has incurred a net loss of Rs. 19.93 lakhs compared to loss of Rs. 20.29 lakhs in the previous year.

e. B K Manaksia Nigeria Ltd., Wholly-owned Subsidiary Company

M/s. BK Manaksia Nigeria Ltd. has not undertaken any business during the financial year under review. However, it has incurred preliminary and pre-operative expenses of 29,39,536.93 (Niara) till 31st March, 2020 (equivalent to Rs. 6.75 lakhs).

f. BKM Agrotech Private Limited, Wholly owned Subsidiary

BKM Agrotech Private Limited incorporated on 13th March, 2018, as the wholly owned subsidiary company.The Companyhas not undertaken any business during the financial year under review. Therefore, the revenue of the Company for the year ended 31stMarch, 2020 stood NIL. During the year ended 31stMarch, 2020, the Company had incurred a net loss of Rs. 91,185.

Except as stated hereinabove, no other Company has become or ceased to be the Companys subsidiary, joint venture or associate company during the year under review.

PERSONNEL

The particulars and information of the employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 has been set out as Annexure – ‘D to this Report.

COMPANYS WEBSITE

The website of your Company www.bkmindustries.com has been designed to present the Companys businesses up-front on the home page. The site carries a comprehensive database of information including the Financial Results of your Company, Shareholding pattern, Directors & Corporate Profile, details of Board Committees, Corporate Policies and business activities of your Company. All the mandatory information and disclosures as per the requirements of the Companies Act, 2013 and Companies Rules 2014 and as per the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 has been uploaded to the aforesaid website of the Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

i) Director - Retirement by Rotation:

Pursuant to the provisions of Section 152(6) and other applicable provisions of the Companies Act, 2013 and Articles of Association of the Company, Mr. Navneet Manaksia (DIN 00438612), Director of the Company, retires by rotation at the ensuing Annual General Meeting and is eligible for reappointment.

None of the Directors of the Company are disqualified as per section 164(2) of the Companies Act, 2013.

The Executive and non-executive Directors have also made necessary disclosures to the extent as required under the provisions of section 184(1) of the Companies Act, 2013, as applicable.

i) Appointment/Re-appointment of the Directors :

a. Ms. Jaya Bajpai (DIN: 08603368)was appointed as an Additional Director (designated as Independent Director) of the Company by the Board w.e.f. November13,2019 for a consecutive period of 5 years.She will hold the office till the ensuing Annual General Meeting (AGM) unless appointed by the Shareholders in the AGM.

b. Ms. Shipra Saha (DIN: 08603410)was appointed as an Additional Director (designated as Independent Director) of the Company by the Board w.e.f. November 13, 2019 for a consecutive period of 5 years.She will hold the office till the ensuing Annual General Meeting (AGM) unless appointed by the Shareholders in the AGM. However, she has resigned from the Directorship w.e.f. June 8, 2020 due to her personal reasons. Further, the Company has received a confirmation from Ms. Saha that there was no other reason except as stated above, for her resignation

c. Mr. Ganesh Chandra Das (DIN: 08608029)was appointed as an Additional Director (designated as Independent Director) of the Company by the Board w.e.f. November 13, 2019 for a consecutive period of 5 years. He will hold the office till the ensuing Annual General Meeting (AGM) unless appointed by the Shareholders in the AGM. d. Mr. Navneet Manaksia was re-appointed as a Wholetime Director of the Company w.e.f January 7, 2020. e. Ms. Ritika Agarwal (DIN: 8771261)was appointed as an Additional Director (designated as Independent Director) of the Company by the Board w.e.f. July 28, 2020 for a consecutive period of 5 years to fill up the vacancy caused by the resignation of Ms. Shipra Saha. She will hold the office till the ensuing Annual General Meeting (AGM) unless appointed by the Shareholders in the AGM.

iii) Resignation of Directors:

a. Dr. Kali Kumar Chaudhuri, Independent Director of the Company, resigned from the Directorship w.e.f. close of business hours on September 21, 2019 due to his personal reasons. Further, the Company has received a confirmation from Dr. Chaudhari that there was no other reason except as stated above, for his resignation.

b. Mrs. SmitaKhaitan, Women Independent Director of the Company, resigned from the Directorship w.e.f. close of business hours on September 21, 2019 due to her personal reasons. Further, the Company has received a confirmation from Mrs. Khaitan that there was no other reason except as stated above, for her resignation

c. Mr. Anil Kumar Saboo, Independent Director of the Company, resigned from the Directorship w.e.f. close of business hours on October 4, 2019 due to his personal reasons. Further, the Company has received a confirmation from Mr. Saboo that there was no other reason except as stated above, for his resignation.

iv) Appointment/Resignation of Wholetime- Key Managerial Personnel (KMP):

a. Ms. Raveena Dugar resigned from the position of Company Secretary and Compliance Officer with effect from1st July, 2020.

b. Mr. Bijay Kumar Sahoo resigned from the position of Chief Financial Officer and Compliance Officer with effect from 21st July, 2020.

c. Mr. Navneet Manaksia was appointed in the position of Chief Financial Officer and Compliance Officer with effect from 21st July, 2020 in the Board Meeting dated 28th July, 2020.

d. Mr. Varun Agarwal has been appointed in the position of Company Secretary and Compliance Officer with effect from 1st August, 2020 in the Board Meeting dated 28th July, 2020.

DECLARATION BY INDEPENDENT DIRECTORS

In accordance with Section 149(7) of the Act, each Independent Director has given a written declaration to the Company conforming that he/she meets the criteria of independence as mentioned under section 149(6) of the Act and Regulation 16(1)(b) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

CORPORATE SOCIAL RESPONSIBILITY cCSR—

During the year under review, provisions of Corporate Social Responsibility (CSR) became applicable to the Company pursuant to section 135 of the Companies Act, 2013 and the Rules made thereunder. Accordingly the Board has constituted the CSR Committee and approved the CSR policy. Other details of the Committee is mentioned in the Corporate Governance Report forming part of this Boards Report and Annual Report on CSR is attached as Annexure ‘E to this Report.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

The Management Discussion and Analysis Report as required under Regulation 34(2) (e) of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this report.

AUDITORS AND THEIR REPORTS (i) Statutory Auditors:

The Statutory Auditors M/s. SRB & Associates, Chartered Accountants, continue to hold office upto the conclusion of the Annual General Meeting (AGM) to be held for the financial year 2020-21. The Notes to Accounts, as referred in the Auditors Report are self-explanatory and hence does not call for any further explanation.

(ii) Internal Auditor:

The Board had appointed M/s.D S Associates, Chartered Accountants, as Internal Auditors of the Company for the F.Y. 2020-21 as per the provisions of Section 138 of the Companies Act read with Rule 13 of the Companies (Accounts) Rules, 2014. The Internal Auditors have submitted the reports as per their scope of work on quarterly basis to the Audit Committee and Board of Directors of the Company.

(iii) Secretarial Auditor:

The Board had appointed Mr. Santosh Kumar Tibrewalla, Practicing Company Secretaries, as the Secretarial Auditors of the Company to carry out the Secretarial Audit for the year 2019-20 under the provisions of Section 204 of the Companies Act, 2013. The report of the Secretarial Auditor in MR 3 is enclosed as Annexure - ‘F to this Boards Report. The Company has initiated strict and timely compliance with the other applicable laws to the Company as reported by the Secretarial Auditors. The rest of the report is self-explanatory and hence do not call for any further explanation.

LISTING OF SECURITIES IN STOCK EXCHANGES

The shares of the Company are presently listed at The National Stock Exchange of India Limited and BSE Limited. The Company is registered with both NSDL & CDSL for holding the shares in dematerialized form and open for trading. The Company has paid Listing Fees to the Stock Exchanges and the depositories.

DISCLOSURES AS PER APPLICABLE ACT AND SEBI cLISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS— REGULATIONS, 2015

i) Related Party Transactions:

All contracts/arrangements/transactions entered by the Company with related parties for the year under review were on arms length basis and in the ordinary course of business and were reviewed by the Audit Committee, and that the provisions of Section 188(1) read with the Companies (Meetings of Board and its Powers) Rules, 2014 are not attracted. Further there are no materially significant related party transactions during the year under review made by the Company which may have a potential conflict with the interest of the Company at large. Thus, disclosure in Form AOC-2 is not required.

All Related Party transactions are placed before the Audit Committee for approval.

During the year under review, the Company has not entered into any contract/ arrangement/ transaction with related parties which could be considered material in accordance with the Companys policy of Materiality of Related Party Transactions. The necessary disclosures regarding the transactions are given in the notes to accounts.

The policy on Related Party Transactions as approved by the Board of Directors of the Company may be accessed on the Companys website at www. bkmindustries.com and the web link thereto http://bkmindustries.com/investor-relation/BKM-industries-limited/corporate-policies

ii) Number of Board Meetings:

The Board of Directors met 4 (four) times in the year 2019-20 i.e. 30.05.2019, 06.08.2019, 13.11.2019 and 13.02.2020. The Directors had passed certain resolutions by circulation on 25.06.2019, 27.08.2019and 16.12.2019. The details of the Board meeting and attendance of the Directors are provided in the Corporate Governance Report, attached as Annexure to this Boards Report.

iii) Composition of Audit Committee:

The Board has re-constituted the Audit Committee in its meeting held on November13, 2019 and has appointed Mr. Ganesh Chandra Das, Ms. Jaya Bajpai and Ms. ShipraSaha as members of the Committee with immediate effect and Dr. Kali Kumar Chaudhury and Mrs. SmitaKhaitan ceased to be member w.e.f 21st September, 2019 and Mr. Anil Kumar Saboo ceased to be member with effect from 4th October, 2019. The complete details of the Committee are given in the Corporate Governance Report, attached as Annexure to this Boards Report.

Recommendation by Audit Committee

There were no such instances where the recommendation of Audit Committee has not been accepted by the Board during the financial year under review.

iv) Extracts of Annual Return:

The details forming part of the extract of the Annual Return in MGT-9 as provided under section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014 is enclosed as Annexure - ‘G.

v) Risk Analysis:

The Board has developed and implemented a risk management policy identifying therein the elements of risk that may threaten the existence of the Company. The Company has a mechanism that helps the Board to keep an overall watch on the business risks and informs the Board members about the evaluation, and estimation of the levels of risks involved in a situation, their comparison against benchmarks or standards, and determination of an acceptable level of risk and mitigation plans and periodical reviews are undertaken to ensure that the critical risks are controlled by the executive management.

vi) Internal Financial Control :

The Company has in place adequate internal financial control as required under section 134(5)(e) of the Act and the same was evaluated by the Audit Committee. During the year such controls were tested with reference to financial statements and no reportable material weakness in the formulation or operations were observed. The statutory auditors of the Company conducted audit on the Companys internal financial control over financial reporting and the report of the same is provided is annexed with Auditors Report.

vii) Loans, Guarantees and Investments:

The Company has not given any loan or provided any guarantee.

viii) Post Balance Sheet events:

On occurrence of COVID -19, there was a complete nationwide lock down since 24thMarch, 2020 and the operation of the Company was jeopardized since then till 17th May, 2020, which marginally affected the sales and profitability in the current financial year under review.

The Company has also suspended manufacturing operations at its plant located at 161/1, Village: Khutli, Via Khanve, Dudhni Road, U.T. of DNH, Silvassa, PIN-396230, with effect from 17th July, 2020 from 6A.M. onwards, due to sluggish demand of the products of the Company.

ix) Evaluation of the Boards Performance:

During the year under review, the Board, in compliance with the Companies Act, 2013 and applicable Regulations of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, has continued to adopt formal mechanism for evaluating its performance and as well as that of its Committees and individual Directors, including the Chairman of the Board. The exercise was carried out through a structured evaluation process covering various aspects of the Boards functioning such as composition of the Board & Committees, experience & competencies, performance of specific duties &obligations, governance issues etc. Separate exercise was carried out to evaluate the performance of individual Directors including the Board, as a whole and the Chairman, who were evaluated on parameters such as their participation, contribution at the meetings and otherwise, independent judgements, safeguarding of minority shareholders interest, etc.

The evaluation of the Independent Directors was carried out by the entire Board and that of the Chairman and the Non-Independent Directors were carried out by the Independent Directors in their separate meeting held on 13th February, 2020.

The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees with the Company.

x) Nomination, Remuneration and Evaluation Policy:

Pursuant to the provisions of the Companies Act, 2013 read with the Rules made therein and the SEBI (Listing Obligations & Disclosure Requirements) Regulation, 2015 (as amended from time to time), the Committee has formulated the Nomination and Remuneration Policy which broadly laid down the various principles of remuneration being support for strategic objectives, transparency, internal & external equity, flexibility, performance driven remuneration, affordability and sustainability and covers the procedure for selection, appointment and compensation structure of Board members, Key Managerial Personnel (KMPs) and Senior Management Personnel (SMPs) of your Company.

The detailed Nomination & Remuneration Policy of the Company is placed on the Companys website at www.bkmindustries.com.

xi) Vigil Mechanism (Whistle Blower Policy):

As per the requirements of the Companies Act, 2013 and Listing Agreement / applicable Regulations of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company had established a mechanism for employees to report concerns for unethical behavior, actual or suspected fraud, or violation of the code of conduct or ethics. It also provides for adequate safeguards against the victimization of employees who avail the said mechanism. This policy also allows the direct access to the Chairperson of the Audit Committee. The Audit Committee is committed to ensure the flawless work environment by providing a platform to report any suspected or confirmed incident of fraud/ misconduct. Details of establishment of the Vigil Mechanism have been uploaded on the Companys website: www.bkmindustries.comand also set out in the Corporate Governance Report attached as Annexure to this Boards Report.

xii) Disclosure under Sexual Harassment of Women at Workplace (Prevention, Prohibition &Redressal) Act, 2013:

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. The Policy is gender neutral. During the year under review, no complaints with allegations of sexual harassment were filed.

xiii) Fraud Reporting:

There was no fraud reported by the Auditors of the Company under Section 143(12) of the Companies Act, 2013, to the Audit Committee or the Board of Directors during the year under review.

INDUSTRIAL RELATIONS

The industrial relation during the year 2019-20 had been cordial. The Directors take on record the dedicated services and significant efforts made by the Officers, Staff and Workers towards the progress of the Company.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE

There have been no significant & material orders passed by regulators / courts / tribunals impacting going concern status and companys operations in future.

APPRECIATION

Your Directors take this opportunity to place on record their gratitude to the Central and State Governments, Bankers and Investors for their continuous support, cooperation and their valuable guidance to the Company and for their trust reposed in the Companys management. The Directors also commend the continuing commitment and dedication of the employees at all levels and the Directors look forward to their continued support in future.