BPL Ltd Management Discussions.

and Management Discussion & Analysis

Dear Members,

Your Directors have pleasure in presenting their report along with the audited accounts for the year ended March 31, 2019.


In line with the Governments “Make in India” impetus and the potential opportunity that this offers domestic component suppliers, your company decided to upgrade its thirty year old Printed Circuit Board (PCB) manufacturing plant during the year. PCBs remain at the core of every electronic product and therefore, is a basic requirement of companies looking to shift to domestic manufacture. Over the course of the year, your company has replaced its entire PCB manufacturing plant with state-of-the art automated lines from Taiwan and Japan. The plant has also been provided with necessary utility infrastructure and environmentally friendly effluent treatment facilities. This new line is now installed and is expected to be commissioned by September, 2019. Your companys management is confident that this new PCB plant will vastly improve BPLs prospects as a tier 1 PCB supplier to the Electonics Manufacturing Services (EMS), Lighting, Power Conversion and Automotive industries.

BPLs consumer business continues to grow steadily and made up for the shortage of manufacturing output resulting from the PCB plant upgradation process. In addition to Televisions, Washing Machines, Microwave ovens, Air conditioners and Side-by-Side Refrigerators, the company also added Dishwashers and Audio products like sound bars and Bluetooth speakers to the line-up. BPL remains a top seller across categories and sold across more pin codes than most other online only brands. To ensure post purchase customer care, BPL added its own service infrastructure across all southern states, increased the number of languages supported in our call centre and launched its own CRM and Service Apps for better product support. We believe that these investments will differentiate BPL over multiple new entrant brands that have little or no customer care infrastructure in India. BPL also ensures that it fully complies with various government regulations such as BIS, BEE and the recently introduced E-Waste Management rules.

For the year 2018-19, your company posted gross revenues of Rs.143.22 Crores and operating profits of Rs. 3.70 Crores (before provisions & taxation). Your Companys financial performance for the year under review is summarized below:

(Rs in crores)
Particulars Year Ended
31.03.2019 31.03.2018
Net Sales and other income 143.22 140.32
Profit before Tax 3.70 22.62
Deferred Tax 2.77 15.27
Profit after Tax 0.93 7.35
EPS - Basic 0.19 1.50
- Diluted 0.19 1.50


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

Since there was no unpaid/unclaimed Dividend declared and paid last year, the provisions of Section 125 of the Companies Act, 2013 and rules framed thereunder, do not apply.

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


In view of the Governments recently announced e-commerce policy, and the potential restrictions that this may have on e-commerce platforms, your company is exploring the options of entering off-line markets in addition to the online channel. This will mitigate any risk from a possible slowdown of online sales and will also cater to the growing demand for consumer durables in semi-urban markets. In the initial phase, the company will look to enter Southern States where BPL has created its own service infrastructure. Plans also include selling products into Tier 2 and upcountry regions which have little or no conflict with e-commerce channels. Your companys management is confident that BPL has a significant advantage over other brands sold in the region both in terms of brand recognition and customer experience. In view of this change in channel strategy, your company will add select products such as Direct Cool Refrigerators and large sized Semi Automatic Washing Machines, which appeal to the target market. The company will also offer a wider range of LED televisions and also have Smart TV versions of all popular sizes.

Your companys management firmly believes that the new channel strategies, combined with an expanded and improved service network, will help the company maintain growth in the Consumer Durables business years ahead. Furthermore, with the imminent commissioning of BPLs upgraded PCB plant, the company is confident of sustainable and profitable growth of the business. BPL will also soon explore other “Make in India” initiatives both for inhouse consumption and EMS.


The global trade tensions, the recessionary trends of the Indian economy, burgeoning unemployment and the resultant policy changes by the government continue to pressure our industry. Moreover, frequent changes in import duty tariffs have made it difficult to plan expansions for most companies. While on one side the government encourages domestic manufacture, Free Trade Agreements (FTAs) with neighbouring countries allows duty free imports that makes Indian companies less competitive.

It is hoped that as the economy stabilises and trade conflicts subside, there will be a prolonged period of policy stability and growth of the industry. Most of these risks and concerns stem from factors beyond our direct control.


Your company has no subsidiaries, joint ventures or associate companies.


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


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

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

The Company has126 employees as on March 31, 2019.

Conservation of energy, technology absorption and foreign exchange earnings and outgo

a) Conservation of Energy:

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

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

b) Technology Absorption:

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

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


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


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

The Independent Directors of the Company have also convened a separate meeting on 23rd May 2018 and evaluated the performance of the Board, the non-independent directors and the chairman. Performance evaluation criteria is as per the policy available at the web link http://www.bpl.in/investor-relations/policies/policy-on-board valuation.pdf.


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

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

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

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


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


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

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

b) that the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company ended as on that date;

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

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

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

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


The Board of Directors at its meeting held on 19th March, 2019, on the recommendations of Nomination and Remuneration Committee, has approved the re-appointment of Mr. Ajit G Nambiar as Chairman & Managing Director of the Company for a period of 3 years (with effect from 1st April, 2019), pursuant to provisions of Section 196 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modifications or re-enactment(s) thereof for the time being, in force), and subject to the approval of the shareholders of the Company in the ensuing Annual General Meeting.

In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Mrs. Anju Chandrasekhar, Director, retires by rotation, and being eligible, offers herself for reappointment. Her re-appointment will be placed as one of the items of agenda in the ensuing Annual General Meeting.

In accordance with provisions of Sections149, 150, 152 and any other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being, in force) read with Schedule IV to the Act and Regulation 17(1)(A) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and based on the recommendations of Nomination and Remuneration Committee, your company has re-appointed Capt. S Prabhala and Mr.Suraj L Mehta, as the independent directors of the Company, for a further period of 5 years, at the meeting of the Board of Directors held on 12th August, 2019. These appointments are subject to the approval of shareholders by way of special resolutions at the forthcoming Annual General Meeting. A detailed justification as required under SEBI (LODR) Regulations, 2015, has been stated in the explanatory statement in the Notice convening the Annual General Meeting of the members of the company which forms part of this Annual Report.


The Board of Directors have met five times and Independent Directors, once during the Financial Year 2018-19 and details of date of meetings are available in the Corporate Governance report section, which forms part of the annual report.


Composition of Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee; number of meetings of each committee during the financial year 2018-19 and meetings attended by each member of the committee as required under the Companies Act, 2013 are provided in Corporate Governance Report section which forms part of the annual report.


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

Mr. S Ranganathan has been appointed as CFO of the company with effect from 1st April, 2019 in place of Mr. S V Ganesh who resigned as CFO on 28th March, 2019. Mrs. Chitra M A resigned as Company Secretary & Compliance Officer on 31st March, 2019, and the company is in the process of recruiting a person to fill this post.


The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto are disclosed in Form AOC- 2, which forms part of the annual report.


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


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


The paid up Equity Share Capital of the Company as on 31st March, 2019 stood at Rs.48.88 Crores comprising 4,88,84,818 Equity Shares of Rs.10/- each, fully paid up. The paid-up Preference Share Capital of the Company as on 31st March, 2019 was Rs.169.59 Crores consisting of 1,69,58,682 Redeemable Preference Shares of Rs.100/- each.

The Company has not issued any Sweat Equity Shares or granted any Employee Stock Option during the Financial Year 2018-19. The Company has not made any provision of money for the purchase of or subscription for shares in the Company under any Scheme.

The provisions of Rule 4 (4) of Companies (Share Capital and Debentures) Rules, 2014 are not applicable to the company since no Equity Shares have been issued by the Company with differential rights during the Financial Year 2018-19.


The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. These are discussed at the meetings of the Audit Committee and the Board of Directors of the Company. The Companys internal control systems are commensurate with the nature of its business and the size and complexity of its operations. Significant audit observations and follow up actions thereon are reported to the Audit Committee.


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


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


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

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


The Company has constituted Corporate Social Responsibility Committee which is comprised of three members, out of which, one is an Independent Director. The Committee was set up to formulate and monitor the CSR Policy. The Companys average net profit for last 3 years computed as per the provisions of Section 135(5) of Companies Act, 2013, was Rs. 5.68 lakhs. The Company has already spent certain amount on CSR activities and the details of which are available in Annexure-A.

Disclosures on CSR Activities as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 are as tabled below:

1.A brief outline of the Companys CSR Policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and project or programs The Companys CSR Policy intends to
i. Promote education including employment enhancing vocation skills especially among children and women.
ii. Eradicate hunger, poverty and malnutrition and
iii. Promote healthcare and sanitation.
2.The Composition of the CSR Committee Mrs. Anju Chandrasekhar- Chair person Capt.S.Prabhala- Member Mr. Ajit G Nambiar- Member
3.Average net profit of the Company for last three financial years Rs. 2,84,33,421/-
4.Prescribed CSR Expenditure (two percent of the amount as in item 3 above The Company was required to spend an amount of Rs. 5,68,558/- towards CSR activities. However, the Company has spent a sum of Rs. 3.70 lacs on CSR activities during the current financial year.
5.Details of CSR spent during the year
a) Total amount to be spent for the financial year Rs. 5,68,668/-
b) Amount unspent, if any Rs. 1,98,168/-
c) Manner in which the amount spent during the financial year As detailed in Annexure - A
6.In case the Company has failed to spend the two percent of the average net profit of the last three financial years or any part thereof, the reasons for not spending the amount in its Board report. The Company has spent a sum of Rs. 3.70 lacs on CSR activities out of Rs. 5.68 Rs. 5.68 lacs. The Company will be contributing the balance CSR amount to "PM Nations Relief Fund" to meet flood relief activities.
7.A responsibility Statement of the CSR Committee that the implementation and monitoring of CSR policy is in compliance with CSR objectives and the policy of the company The spending on CSR activities by the Company are covered under Schedule VII of the CA 2013 and further notifications from MCA, from time to time and the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the company.

Annexure - A

SI. No Project or Activities Sector Locations (District/State) Amount outlay (budget) Amount spent (Rs.) Cumulative expenditure upto the reporting period (Rs.) Amount spent: (Direct or through implementing agency)
1. Rural Education Project Education Haliyal, Uttara Kannada District, Karnataka NA 2,00,000/- 2,00,000/- Through Cherysh Trust
2. Kids health improvement Healthcare Bangalore, Karnataka NA 50,000/- 50,000/- Through Aster Sick Kids Foundation
3. Flood Relief Activity Socio Economicof development Kottayam Kerala NA 1,00,000/- 1,00,000/- Through Rotary Club Kottayam
4. Blood donation Healthcare camp Bangalore, Karnataka NA 20,000/- 20,000/- Through National Service Scheme of MSRIT, Bangalore
5. Food for poor Poverty Doddaballapur, Karnataka NA 500/- 500/- Through Ambedkar Charitable Trust
Total 3,70,500/- 3,70,500/-


Ajit G Nambiar Anju Chandrasekhar
Member - CSR Committee Chair Person - CSR Committee


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


M/s. MKUK & Associates, Chartered Accountants, are the Auditors of the Company for five consecutive years from the FY 2017-18.


An extract of Annual Return in the prescribed format is displayed on the Companys website: www.bpl.in under the head “Investor Relations”.


The Company has complied with all the applicable Secretarial Standards.


Pursuant to the provisions of Section 204 read with Section 134(3) of the Companies Act, 2013, your company has appointed Mr. Madhwesh.K, a Practicing Company Secretary as Secretarial Auditor of the Company for the Financial Year 2018-19 and the Secretarial Audit Report is annexed herewith and forming part of the report.The explanations of the Board on every qualification, reservation or adverse remark or disclaimer made by the Auditor in his report have been furnished by way of an addendum.


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


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

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


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

For and on behalf of the
Board of Directors,
Ajit G Nambiar
12th August, 2019 Chairman & Managing Director
Bengaluru DIN: 00228857