Balu Forge Industries Ltd
Chairman Speech
Dear Shareholders,
I am pleased to present BFIL's FY23 performance. On the face of it, the
year 2022-23 marked a watershed in our existence. Commencing our voyage in 1989, we have
nurtured consistent growth throughout the years, culminating in an accomplished presence
spanning over three decades within the precision engineering industry. However, an
epiphany has dawned upon us, signalling that the moment is ripe for an accelerated
expansion, thereby creating an enhanced value for our esteemed stakeholders.
What made this journey incredible is that we have successfully embarked
on our strategic vision and have achieved a majority of the milestones set by the
management over the course of our journey. Over the period, we have sincerely worked on
our commitments, ensured we kept our promises and thus, today BFIL has emerged as one of
the leading players in the Indian precision engineering, crankshaft sand forging
components industry space.
That being said, the big message that I wish to communicate today is
that we are working very hard to sustain such crests and will continue to work tirelessly
to create a sustainable future growth strategy for the Company, and our time starts now.
There were a number of reasons behind this optimism
In the face of widespread global uncertainty, the Indian economy
demonstrated remarkable determination and strength. It not only managed to recover to
levels seen before the pandemic but also showcased its robustness on the international
platform. Retaining its position as the second-fastest growing economy within the G20
nations, this achievement was propelled by a combination of heightened consumer
expenditures, supported by favorable governmental policies, and substantial investments in
infrastructure. These factors collectively fostered a promising environment for conducting
business operations within India.
As a domino effect, the Indian automobile industry also showcased
consistent growth over the last few years and aims to double the size of the automobile
industry to '15 lakh crore by 2024. According to the industry experts, the demand for
passenger vehicles (PV) and medium to heavy commercial vehicles (MHCV) within the country
remained robust in 2023. This was due to strong interest from consumers and increased
activity in industries. As a result, India has now emerged as the third largest automotive
market, surpassing Japan. Additionally, the electric mobility sector is experiencing
significant growth, particularly with electric two and three-wheelers. This growth can be
attributed to the support of FAME II subsidies and tax incentives provided by various
state governments.
The India metal forging market is projected to grow from $4.32 billion
in 2022 to $8.80 billion by 2029, growing at a CAGR of 10.69%.
I am pleased to state that at BFIL we had foreseen this industry
optimism a few years back and thus accordingly realigned our business strategy and
capabilities to tap on these opportunities. We believe that this prudent approach has led
to one best performing year in the history of BFIL, thereby enhancing stakeholder value.
A reflection on our performance in FY23
FY23 was a record year with the Company achieving historical high
revenues, EBIDTA and PAT in the history of BFIL. In FY23, BFIL clocked total revenue of
'33,928.48 lakhs, representing a 15.2% increase over the previous year, on the back of an
increase in the orders executed. Our EBITDA margins grew to 18.4% from 15.5% in FY22 on
the back of lower material cost and continued focus on efficient cost management. Net
income for the year stood at '3,891.29 lakhs, a 30.4% increase over the prior year and PAT
margin stood at 11.5%, an increase of 140 bps compared to the previous year. Our EBIDTA
for the year stood at '6,242.37 lakhs, an increase of 37% compared to the previous year.
The next growth phase
In a competitive and regulated sector like ours, the luxury of standing
still does not exist.
Companies that need to enhance their competitiveness need to keep
growing all the time, either by enhancing their manufacturing capacity, or by investing in
cutting-edge technologies, or by undertaking strategic alliances or acquisitions that
enhance our capability, bolster our product and service offering.
With a strong commitment to maintaining our leadership in the industry,
we undertook one of the most significant expansion plans in the history of BFIL. Our
primary objective was to boost our machining capabilities. As a result, we successfully
acquired the precision machining unit located at the Mercedes Benz Truck Plant in
Mannheim, Germany. This strategic acquisition was finalized in FY22, and in FY23, we are
currently in the process of seamlessly integrating these newly acquired machines into our
existing manufacturing facility situated in Belgaum, Karnataka. We anticipate completing
this integration by the second quarter of FY24.
Once fully operational, this venture is projected to elevate our
capacity to approximately 30,000 tonnes, contributing to our continued growth and success.
On the organic front, we have set our eyes on setting up a new 52,000
sg.mt manufacturing facility in Belgaum, Karnataka. Equipped with state- of-the-art
facilities, this precision engineering center would not only enhance our production
capability but would also enable us to extend our portfolio in both the ICE & the new
energy sphere. We've already taken the first steps towards making this plan a reality
during FY23. Our goal is to have the plant up over the next few years. This move not only
reflects our commitment to advancement but also our dedication to meeting the evolving
needs of our stakeholders.
Additionally, during the year, we are focused on developing solutions
across the entire spectrum of New Energy Components. This strategic effort not only
enhances our operational efficiency but also bolsters our capabilities, positioning us to
effectively fulfil the rising demand for superior and cutting-edge products. Expanding the
new energy components unit will enable BFIL to broaden its presence in the emerging new
energy sector. Additionally, we also concentrated on developing essential expertise in
fuel-agnostic systems and components, aiming to both diversify and harmonize the overall
product range.
We also put our attention on making our internal processes smoother,
aiming to boost how well we operate, cut down on unnecessary steps, and make things
faster. These changes have not only brought down costs but also made our customers even
happier with our services. We also focused on developing a robust supply chain strategy
that predicts potential disruptions and guarantees a smooth and consistent supply of
materials.
We aimed to diversify our suppliers and establish a contingency plan to
enhance our preparedness.
We believe that there is considerable relationship head room available
for us to deploy additional manufacturing and technological capacities in servicing the
growing needs of our esteemed clients and acquire a larger wallet share.
Growing opportunities
At BFIL, we foresee India emerging as the shining star of the global
economy, poised to sustain an annual GDP growth surpassing 7% well into the foreseeable
future. Against this backdrop, the realization of the government's vision for India as a
military superpower, a global manufacturing hub, and an Atmanirbhar' India is within
reach. As these aspirations come to fruition, we expect a substantial surge in demand for
the products manufactured by us, thereby presenting a captivating opportunity for a
forward-looking company like ours.
BFIL's preparedness
At BFIL, we will not only increase our manufacturing and technical
capacities to address the markets of the future, but also reinforce our industry position
by aggressively engaging in acquisition and collaboration activities. Further, by
investing regularly on R&D, we intend to enhance our operating efficiency and build on
our capabilities to introduce pioneering products and to assess new material compositions.
As we continue to grow our presence, we intend to focus on
understanding and meeting customer needs through personalized products, efficient customer
service, and strong relationships. Proactively collect customer feedback to identify
weaknesses and opportunities for improvement. We use this feedback to drive product
innovation and improvement.
Adopting a responsible approach
Ensuring responsible business practices remains a top priority for us.
Throughout the year, BFIL's senior management dedicated their efforts to setting clear
goals and creating a comprehensive roadmap to address environmental, social, and
governance (ESG) considerations across all our operations. In our day-to-day activities,
we place a strong emphasis on responsible management of resources and continuously explore
methods to decrease waste, save energy, and limit our impact on the environment. Through
the adoption of streamlined production methods and the use of environmentally friendly
materials, our aim is to play a role in shaping a more environmentally sustainable future.
Road ahead
BFIL has reached an exciting turning point, and we are eager to see
where it takes us. Thanks to our corporate strategy, we have been able to maintain an
EBITDA margin of 15% or higher, regardless of market fluctuations.
Therefore, we believe that our planned capacity expansion and
acquisition strategy, combined with positive macroeconomic developments, will allow us to
achieve sustainable revenue growth, increased surpluses, and enhanced shareholder value at
a faster rate in the near future.
With best wishes
Jaspal Singh Chandock
Chairman & Managing Director
Balu Forge Industries Ltd
Directors Reports
Dear Shareholders,
The Board of Directors is pleased to present the 34th Annual Report of
Balu Forge Industries Limited ("the Company") together with the Audited
Financial Statements of the Company for the Financial Year ended 31st March, 2023.
1. FINANCIAL RESULTS
The Financial Highlights for the year Under report are as under:
Rs in crore
| Description |
Standalone |
Consolidated |
|
Year ended 31 March 2023 |
Year ended 31 March 2022 |
Year ended 31 March 2023 |
Year ended 31 March 2022 |
| Other Income |
12.81 |
8.52 |
12.65 |
8.53 |
| Total Revenue |
281.87 |
293.58 |
339.29 |
294.61 |
| Total Expenses |
238.22 |
253.70 |
288.72 |
255.32 |
| (Loss) / Profit before tax and exceptional items |
43.65 |
39.88 |
50.57 |
39.29 |
| Profit before tax |
43.65 |
39.68 |
50.57 |
39.09 |
| Tax expense |
11.66 |
9.24 |
11.66 |
9.24 |
| Net Profit after tax |
31.99 |
30.44 |
38.91 |
29.85 |
| Other Comprehensive expense/ (Income), net of Income tax |
0.9 |
0.17 |
0.9 |
0.17 |
| Balance Transfer to Reserve |
32.08 |
30.61 |
39.00 |
30.02 |
The Financial Statements for the year ended 31, March 2023 have been
prepaid as per the Indian Accounting Standards (Ind AS)
2. REVIEW OF OPERATIONS
During the financial year ended 31st March, 2023, the Company has
recorded, on standalone basis, total revenue of '281.87 crores and the Company has earned
Net Profit of '31.99 crores as compared to previous year Net Profit of '30.44 crores.
On consolidated basis, the Company achieved total revenue of '339.29
crores and the Company has earned Net Profit of '38.91 crores as compared to previous year
Net Profit of '29.85 crores.
There was no change in nature of Business of the Company, during the
year under review.
3. CREDIT RATING:
Your Company has been rated by Crisil Ratings Limited vide its letter
dated 15th February, 2023 for its bank facilities as follows
Sr. No. Instruments Rating
1 Packing Credit BBB-/Stable
2 Post Shipment Credit A3
The above rating indicates moderate degree of safety regarding timely
servicing of financial obligations, The Company was not identified as a "Large
Corporate" for financial year 2022-23 as per the criteria under SEBI Circular No.
SEBI/ HO/DDHS/CIR/P/2018/144 dated 26th November, 2018.
4. TRANSFER TO RESERVES
The Board of Directors has decided to retain the entire profit
generated during the year under review, in the profit and loss reserve account.
Accordingly, the Company has
not transferred any amount to the ‘Reserves' for the year ended
31st March, 2023.
5. ANNUAL RETURN
In terms of Section 92(3) of the Companies Act, 2013 read with Section
134(3)(a) of the Companies Act, 2013, the Annual Return of the Company as on 31st March,
2023 is available on the Company's website at https://www.baluindustries.com.
6. DIVIDEND
With a view to conserve the resources, the Board of Directors have not
recommended any dividend during the year under review.
The Company has adopted Dividend Distribution Policy in accordance with
Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015 and the same is available on the Company's website at
https://www.baluindustries.com/corporategovernance. php.
7. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF
THE COMPANY AFTER THE CLOSING OF FINANCIAL YEAR:
Increase in Authorised Share Capital of the Company
The Authorised Share Capital of the Company was increased from '
90,00,00,000/- (Rupees Ninety Crores only) divided into 9,00,00,000 (Nine Crore) Equity
Shares of ' 10/- (Rupees Ten) each to ' 1,10,00,00,000/- (Rupees one Hundred and Ten Crore
Only) divided into 11,00,00,000/- (Eleven Crore) Equity Shares ' 10/- (Rupees Ten only).
Alteration of Object Clause of Memorandum of Association of the Company
The Company had with the approval of the members altered its Main
Objects by inserting Clauses in the Main Objects and Objects incidental and ancillary to
the attainment of the main objects. The Company has received approval of the Ministry of
Corporate Affairs to the said alterations.
Allotment of Equity Shares and Convertible Warrants on Preferential
Basis
The Company had issued and allotted 1,37,27,000 Equity Shares of ' 10/-
each for cash at premium of ' 105.45 aggregating to ' 1,58,47,82,150/- to the
Non-Promoters (Public Category). and 30,00,014 warrants convertible into 30,00,014 Equity
Shares of ' 10/- each for cash at premium of ' 105.45 aggregating to ' 34,63,51,616.30/-
to the persons forming part of the Promoters Group. An amount equivalent to 25% of the
Warrant Price was payable at the time of subscription and allotment of each warrant and
the balance 75% of the Warrant Price shall be payable by the Warrant holder against each
Warrant at the time of allotment of Equity Shares pursuant to exercise of the right
attached to Warrants to subscribe to Equity Shares.
The amount raised through the said preferential issue will be utilized
for the objects stated in the Notice of Extra- Ordinary General Meeting dated 21st June,
2023.
8. MAINTENANCE OF COST RECORDS
Pursuant to the provisions of section 148 read with Rule 4 of Companies
(Cost Records and Audit) Rules, 2014, the Company falls under the category of
Non-Regulated Sectors whose revenue from export in foreign exchange exceeds 75% of its
total revenue. Therefore, the Company is exempted from the provisions of the Companies
Act, 2013 related to Cost Audit. Therefore, the appointment of Cost Auditors would not be
applicable for the FY 2023- 2024.
9. CONSOLIDATED FINANCIAL STATEMENTS
In compliance with the applicable provisions of the Companies Act,
2013, including the relevant Indian Accounting Standards (Ind AS) as issued by the
Institute of Chartered Accountants of India and notified under Section 133 of the
Companies Act, 2013 and as required under Regulation 34 of the Listing Regulations, this
Annual Report includes Consolidated Financial Statements for the financial year 2022-23.
10. SHARE CAPITAL
The paid up Equity Share Capital as on 31st March, 2023 was '
83,36,48,860/- divided into 8,33,64,886 Equity Shares of ' 10/- each.
The Company had in terms of Chapter V of SEBI (ICDR) Regulations, 2018
on preferential basis issued and allotted 1,37,27,000 Equity Shares of ' 10/- each for
cash at premium of ' 105.45 aggregating to ' 1,58,47,82,150/-
to the Non-Promoters (Public Category). Further, issued and allotted
30,00,014 warrants convertible into 30,00,014 Equity Shares of ' 10/- each for cash at
premium of ' 10/- aggregating to ' 34,63,51,616.30/- to the persons forming part of the
Promoters Group.
Accordingly, as on the date of signing of Directors Report the paid up
Equity Share Capital has been increased to ' 97,09,18,860/- (' Ninety Seven Crores Nine
Lakhs Eighteen Thousand Eight Hundred Sixty only) divided into 9,70,91,886 (Nine Crores
Seventy Lakhs Ninety One Thousands Eight Hundred Eighty Six) Equity Shares of ' 10/- Each.
The Company has neither issued any shares with differential rights as
to dividend, voting or otherwise nor issued any sweat equity shares and issue shares under
Employees Stock Option Scheme as per provisions of Section62 (1) (b) of the Act read with
Rule 12(9) of the Companies (Share Capital and Debenture) Rules 2014. during the year
under review.
11. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION &
PROTECTION FUND
During the year under review, there was no transfer of equity shares to
the Investor Education and Protection Fund in terms of Section 125 of the Companies Act,
2013.
12. INTERNAL CONTROL SYSTEM
The Company's internal control system has been established on values of
integrity and operational excellence and it supports the vision of the Company "To be
the most sustainable and competitive Company in our industry". The Company's internal
control systems are commensurate with the nature of its business and the size and
complexity of its operations.
Internal Audit - The Company has in place a robust Internal Control
System and ably supported by reputed independent firms i.e. Mehta Singhvi &
Associates, Chartered Accountants, Mumbai as the Internal Auditors. The audit conducted by
the Internal Auditors is based on an internal audit plan, which is reviewed each year in
consultation with the Audit Committee. These audits are based on risk based methodology
and inter-alia involve the review of internal controls and governance processes, adherence
to management policies and review of statutory compliances. The Internal Auditors share
their findings on an ongoing basis during the year for corrective action. Report of the
Internal Auditors for the FY 2022-23 does not contain any qualification, reservation,
disclaimer or adverse remarks.
13. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION
186 OF THE COMPANIES ACT, 2013
The particulars of loan given, investments made, guarantees given and
securities provided during the year under review and as covered under Section 186 of the
Companies Act, 2013 has been disclosed in the note no. 10 and 18 of Standalone financial
statements.
14. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134 (5) of the Companies Act,
2013, in relation to audited financial statements of the Company for the year ended 31st
March, 2023 with respect to Directors Responsibilities Statement, it is hereby confirmed
that:
a) in the preparation of the annual accounts, the applicable accounting
standards had been followed along with proper explanation relating to material departures.
b) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that were 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 31st March, 2023 and of the profit of the Company for the year under
review.
c) t he Directors had 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, and,
d) The Directors had prepared the accounts for the financial year ended
31st March, 2023 on a going concern basis.
e) 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.
f) 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.
15. REPORT ON PERFORMANCE OF SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE
COMPANIES
The Company has in total 4 Subsidiaries of which 2 are Indian and 2 are
Overseas namely:-
1. Naya Energy Works Private Limited (WOS)
2. Balu Advanced Technologies & Systems Private Limited (WOS)
3. Safa Otomotiv FZ - LLC in Dubai (as a WOS)
4. Kelmarsh Technologies FZ-LLC in Dubai (the Company is yet to make
Capital contribution in the said subsidiary). Now the Company has decided to independently
conduct all anticipated operations, either through its own operations or via subsidiary
companies.
The Company does not have any Joint Venture or Associate Company within
the meaning of Section 2(6) of the Companies Act, 2013. No material change has taken place
in the nature of business of the subsidiaries.
Statement containing salient features of financials of subsidiaries
pursuant to Section 129 of the Act read with Rule 5 and 8(1) of the Companies (Accounts)
Rules, 2014, is annexed in the Form AOC-1 as "Annexure A" to this Report.
Pursuant to the provisions of Section 136 of the Companies Act, 2013,
the standalone and consolidated financial statements of the Company, and separate audited
financial statements in respect of subsidiaries are available on the website of the
Company under web link https://www.baluindustries.com/finanial.information.php
The financial statement of the subsidiaries shall also be sent to
Members electronically who request for the same.
The Company has formulated a Policy for determining material
subsidiaries. The said policy is available on the website of the Company at
https://www.baluindustries.com/corporate-governance.php
16. DEPOSITS
The Company has not accepted any deposits within the meaning of
sub-section (31) of Section 2 and Section 73 of the Companies Act, 2013 ("the
Act") and the Rules framed thereunder. As on 31 March 2023, there were no deposits
lying unpaid or unclaimed.
17. DIRECTORS & KEY MANAGERIAL PERSONNEL (KMP)
(i) Composition of the Board of Directors and KMP
The Board of Directors and Key Managerial Personnel is duly
constituted. The details of the directors are given in the Corporate Governance Report
forming part of the Annual Report.
(ii) Changes in Composition of Board and Key Managerial Personnel
a) Mr. Amit Todkari was appointed as Chief Financial Officer of the
company w.e.f 10 May 2023.
b) Ms. Tabassum Begum was appointed as Company Secretary and Compliance
Officer of the company w.e.f 10 June 2023.
Policy on Appointment and Remuneration of Directors, Key Managerial
Personnel and Senior Management Personnel
The Board of Directors has adopted a Nomination and Remuneration Policy
in terms of the provisions of sub- section (3) of Section 178 of the Act and SEBI Listing
Regulations dealing with appointment and remuneration of Directors, Key Managerial
Personnel and Senior Management Personnel. The policy covers criteria for determining
qualifications, positive attributes, independence and remuneration of Directors, Key
Managerial Personnel and Senior Management Personnel.
The Nomination and Remuneration Policy of the Company is hosted on the
Company's website under the web link https://
www.baluindustries.com/corporate-governance.php
Retirement of Directors by Rotation
As per the Companies Act, 2013, Mr. Trimaan Chandock, (DIN: 02853445),
Whole time Director, being longest in the office retire by rotation and being eligible,
offers himself for reappointment.
MEETINGS OF BOARD & COMMITTEES
• Meetings of Board of Directors
The Board of Directors duly meets 6 (Six) times during the financial
year ended 31st March, 2023 as under:
29 April 2022, 24 May 2022, 09 August 2022, 05 September 2022, 14
November 2022 and 14 February 2023.
The periodicity between two Board Meetings was within the maximum time
gap as prescribed in the SEBI (LODR) Regulations, 2015 / Companies Act, 2013. The details
of the Board meetings and attendance of each Director thereat are provided in the
Corporate Governance Report forming part of the Annual Report.
• Committee Meetings:
Audit Committee:
The Audit committee reviews reports of the internal auditor, meets
statutory auditors as and when required and discusses their findings, suggestions,
observations and other related matters. It also reviews major accounting policies followed
by the Company.
The Audit Committee of the Company is constituted/re- constituted in
line with the provisions of Regulation 18 of SEBI (Listing Obligations and Disclosure
requirements) Regulations, 2015 read with Section 177 of the Companies Act, 2013.
During the financial year 2022-23, the Audit Committee of the Company
met 4 times on 24 May 2022, 09 August 2022, 14 November 2022 and 14 February 2023. The gap
was not more than one hundred and twenty days between two Audit Committee meetings.
The Statutory Auditors, Internal Auditor and Whole Time Directors/Chief
Financial Officer are being invited to the meeting as and when required.
The Members of the Audit Committee are financially literate and have
requisite accounting and financial management expertise. The terms of reference of the
Audit Committee and the particulars of meetings held and attendance thereat are mentioned
in the Corporate Governance Report forming part of the Annual Report. During the year
under review, all the recommendations made by the Audit Committee were accepted by the
Board.
The Composition of the Audit Committee is as under:
| Sr. No. Member's Name |
Category |
Designation |
| 1 Mr. Raghvendra Raj Mehta |
Independent Director |
Chairman |
| 2 Mr. Radheshyam Soni |
Independent Director |
Member |
| 3 Ms. Shalu Bhandari |
Independent Director |
Member |
| 4 Mr. Trimaan Chandock |
Whole Time Director |
Member |
Nomination & Remuneration Committee
The Nomination and Remuneration Committee recommends the appointment of
Directors and remuneration of such Directors. The level and structure of appointment and
remuneration of all Key Managerial personnel and Senior Management Personnel of the
Company, as per the Remuneration Policy, is also overseen by this Committee.
The Nomination & Remuneration Committee is duly constituted, during
the year under review, the committee met Once on 14 February, 2023.
The terms of reference of the Nomination and Remuneration Committee and
the particulars of meetings held and attendance thereat are mentioned in the Corporate
Governance Report forming part of the Annual Report.
The Composition of the Nomination & Remuneration Committee is as
under:
| Sr. No. Member's Name |
Category |
Designation |
| 1 Mr. Radheshyam Soni |
Independent Director |
Chairman |
| 2 Mr. Raghvendra Raj Mehta |
Independent Director |
Member |
| 3 Ms. Shalu Bhandari |
Independent Director |
Member |
Stakeholders' Relationship Committee
The scope of the Shareholders/ investors Grievance Committee is to
review and address the grievance of the shareholders in respect of share transfers,
transmission, non-receipt of annual report, non-receipt of dividend etc, and other related
activities. In addition, the Committee also looks into matters which can facilitate better
investor's services and relations.
The Stakeholders' Relationship Committee is duly constituted, during
the year under review, the committee met 3 times on 24 May 2022, 09 August 2022, and 14
February 2023
The Composition of the Stakeholders' Relationship Committee is as
under:
| Sr. No. Member's Name |
Category |
Designation |
| 1 Mr. Raghvendra Raj Mehta |
Independent Director |
Chairman |
| 2 Mr. Radheshyam Soni |
Independent Director |
Member |
| 3 Ms. Shalu Bhandari |
Independent Director |
Member |
The brief terms of reference of the Stakeholders' Relationship
Committee and the particulars of meetings held and attendance thereat are mentioned in the
Corporate Governance Report forming part of the Annual Report.
Risk Management Committee
The Board of Directors of the Company has formed a Risk Management
Committee to frame, implement and monitor the risk management plan for the Company. The
Committee is responsible for monitoring and reviewing the risk management plan and
ensuring its effectiveness.
The Risk Management Committee is duly constituted, during the year
under review, the committee met 2times, 09 August 2022 and 03 February 2023.
The Composition of the Risk Management Committee is as under:
| Sr. Member's Name No. |
Category |
Designation |
| 1 Mr. Trimaan Chandock |
Whole Time Director |
Chairman |
| 2 Mr. Jaikaran Chandock |
Whole Time Director |
Member |
| 3 Mr. Radheshyam Soni |
Independent Director |
Member |
Corporate Social Responsibility Committee
The Board of Directors of the Company has formed a Corporate Social
Responsibility Committee to make CSR as one of the key focus areas where the Company can
play a vital role and provide a reasonable contribution to the society by entering into
sustainable programs of high impact and integrity. The CSR Committee reviews and monitors
the CSR projects and expenditure undertaken by the Company on a regular basis and apprises
the Board of the same.
The details CSR policy and report on CSR activities undertaken during
the year in accordance with Section 134 & 135 of the Act read with Rule 8 of the
Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 and Rule 9 of the
Companies (Accounts) Rules, 2014, is annexed as "Annexure B" to this report.
The Company's CSR Policy is placed on the website of the Company at
https://www.baluindustries.com/corporate- governance.php
The brief terms of reference, particulars of meetings held, and
attendance thereat are mentioned in the Corporate Governance Report forming part of the
Annual Report. The Corporate Social Responsibility Committee had met twice i.e. on 09th
August, 2022 and 14th February, 2023.
The Composition of the Corporate Social Responsibility Committee is as
under:
| Sr. No. Member's Name |
Category |
Designation |
| 1 Mr. Raghvendra Raj Mehta |
Independent Director |
Chairman |
| 2 Mr. Trimaan Chandock |
Whole Time Director |
Member |
| 3 Mr. Jaikaran Chandock |
Whole Time Director |
Member |
18. ATTRIBUTES, QUALIFICATIONS & INDEPENDENCE OF DIRECTORS, THEIR
APPOINTMENT AND REMUNERATION
The Nomination & Remuneration Committee of Directors have approved
a Policy for Selection, Appointment and Remuneration of Directors which inter-alia
requires that composition of remuneration is reasonable and sufficient to attract, retain
and motivate Directors, KMP and senior management employees and the Directors appointed
shall be of high integrity with relevant expertise and experience so as to have diverse
Board and the Policy also lays down the positive attributes/criteria while recommending
the candidature for the appointment as Director.
19. INDEPENDENT DIRECTORS
The Independent Directors hold office for a fixed term of five years
and are not liable to retire by rotation. The Independent Directors have submitted their
disclosure to the board that they fulfill all the requirements as to qualify for their
appointment as an Independent Director under the provisions of the Companies Act, 2013 as
well as SEBI (LODR) Regulations, 2015.
20. DECLARATION OF INDEPENDENT DIRECTORS
In terms of the provisions of sub-section (6) of Section 149 of the Act
and Regulation 16 of SEBI Listing Regulations including amendments thereof, the Company
has received declarations from all the Independent Directors of the Company that they meet
the criteria of independence, as prescribed under the provisions of the Act and SEBI
Listing Regulations. There has been no change in the circumstances affecting their status
as an Independent Director during the year. Further, the Non- Executive Directors of the
Company had no pecuniary relationship or transactions with the Company, other than sitting
fees and reimbursement of expenses, if any, incurred by them for the purpose of attending
meetings of the Company.
The Board is of the opinion that the Independent Directors of the
Company possess requisite qualifications, experience and expertise and they hold highest
standards of integrity.
21. FAMILIARISATION PROGRAMME FOR
INDEPENDENT DIRECTORS
The familiarization program aims to provide Independent Directors with
the industry scenario, the socioeconomic environment in which the Company operates, the
business model, the operational and financial performance of the Company, significant
developments so as to enable them to take well informed decisions in a timely manner. The
familiarization program also seeks to update the Directors on the roles, responsibilities,
rights and duties under the Act and other statutes.
The details of the training and familiarization program conducted by
the Company are hosted on the Company's website under the web link
https://www.baluindustries.com/corporate-governance.php
22. BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 the Boa rd ,
based on the recommendation of the Nomination and Remuneration Committee has carried out
an annual performance evaluation of Board of Directors, Statutory Committees and
Individual Directors. The policy is also in compliance to Regulation 19 read with Schedule
II, Part D of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015. The Nomination and Remuneration Committee has defined the evaluation criteria for
the Performance Evaluation of the Board, its Statutory Committees and individual
Directors.
23. PARTICULARS OF EMPLOYEES
In terms of the requirements of sub-section (12) of Section 197 of the
Act read with sub-rule (1) of Rule 5 of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, as amended from time to time, the disclosures
pertaining to the remuneration and other details, are annexed to this Report as ''Annexure
- C''.
I n terms of Section 136(1) of the Act, details of employee
remuneration as required under provision of Section 197 of the Companies Act, 2013 and
rule 5 (2) and rule 5 (3) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 are available for inspection and any member interested in obtaining
a copy of the same may write to Company at compliance@baluindustries.com
24. RELATED PARTY TRANSACTIONS
All the related party transactions are placed before the Audit
Committee for their review and approval. Prior Omnibus approval is obtained before the
commencement of the new financial year, for the transactions which are repetitive in
nature and also for the transactions which are not foreseen (subject to financial limit).
A statement of all related party transactions is presented before the Audit Committee on a
quarterly basis specifying the nature, value and terms & conditions of the
transactions. All transactions entered with related parties were in compliance with the
applicable provisions of the Companies Act, 2013 read with the relevant rules made
thereunder and the Listing Regulations.
All related party transactions entered into by the Company during the
financial year under review were in the ordinary course of business and on arm's length
basis. All transactions entered with related parties were in compliance with the
applicable provisions of the Companies Act, 2013 read with the relevant rules made
thereunder and the Listing Regulations.
During the FY 2022-23, your Company did not enter into any material
related party transactions. Accordingly, disclosure with respect to the same in the form
AOC- 2 in terms of Section 134 of the Companies Act, 2013 is not applicable.
During the year under review, Policy on Related Party Transactions in
compliance with the requirements of Companies Act, 2013 and amendment to SEBI Listing
Regulations, is available on the website of the Company
https://www.baluindustries.com/corporate-governance.php
25. CORPORATE SOCIAL RESPONSIBILITY
The objective of the Company's Corporate Social Responsibility ('CSR')
initiatives is to improve the quality of life of communities through long-term value
creation for all stakeholders. The Company's CSR Policy provides guidelines to conduct CSR
activities of the Company. CSR initiatives and activities are aligned to the requirements
of Section 135 of the Act. The brief outline of the CSR policy of the Company and the
initiatives undertaken by the Company on CSR activities during the year are set out in "Annexure
B" of this report in the format prescribed in the Companies (Corporate Social
Responsibility Policy) Rules, 2014.
26. CORPORATE GOVERNANCE
In terms of Regulation 34 of SEBI (LODR) Regulations, a separate
section on Corporate Governance with a detailed report on Corporate Governance is provided
as a separate section in the Annual Report and a certificate from Mr. Jaymin Modi
Proprietor of M/s. Jaymin Modi & Co. Company Secretaries, the Secretarial Auditor of
the Company, is certifying compliance of conditions of Corporate Governance, forms part of
this Annual Report. The Report on Corporate Governance also contains certain disclosures
as required under the Companies Act, 2013.
27. MANAGEMENT DISCUSSION ANALYSIS REPORT
The Management Discussion and Analysis Report for the year under
review, as stipulated under regulation 34 (3) and Part B of schedule V of the SEBI
(Listing Obligation and Disclosure Requirement) Regulation, 2015 is provided as a separate
section in the Annual Report.
28. AUDITORS
a) Statutory Auditors
M/s M. B. Agrawal & Co, Chartered Accountants (Registration No
100137W), were appointed as the Statutory Auditors of the Company for a period commencing
from the conclusion of 31st AGM until the conclusion of the 36th Annual General Meeting.
The Statutory Auditors have given a confirmation to the effect that
they are eligible to continue with their appointment and that they have not been
disqualified in any manner from continuing as Statutory Auditors.
The Report given by M/s M. B. Agrawal & Co, Statutory Auditors on
the financial statements of the Company is part of the Annual Report. There has been no
qualification, reservation, adverse remark or disclaimer given by the Auditors in their
Report.
b) Internal Auditors
During the year the Board of Directors has re- appointed M/s Mehta
Singhvi & Associates, Chartered Accountants (Registration No. 122217W) as Internal
Auditors of the Company. The audit conducted by the Internal Auditors is based on an
internal audit plan, which is reviewed each year in consultation with the Audit Committee.
These audits are based on risk- based methodology and inter-alia involve the review of
internal controls and governance processes, adherence to management policies and review of
statutory compliances. The Internal Auditors share their findings on an ongoing basis
during the year for corrective action. Report of the Internal Auditors for the FY 2022- 23
does not contain any qualification, reservation, disclaimer or adverse remarks.
c) Cost Auditor
The members are hereby informed that pursuant to the provisions of
section 148 read with Rule 4 of Companies (Cost Records and Audit) Rules, 2014, the
Company falls under the category of Non-Regulated Sectors whose revenue from export in
foreign exchange exceeds 75% of its total revenue. Therefore, the Company is exempted from
the provisions of the Companies Act, 2013 related to Cost Audit. Therefore, the
appointment of Cost Auditors would not be applicable for the FY 2023-2024.
d) Secretarial Auditor
Secretarial Audit Report, pursuant to the provisions of Section 204 of
the Companies Act, 2013 and Rule 9 the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, was obtained from Mr. Jaymin Modi Proprietor of M/s
Jaymin Modi & Co. Practicing Company Secretaries in form MR-3 for the financial year
2022-23. The remarks in the report are self explanatory.
The said report is disclosed under "Annexure-D" and
forms part of this report.
The Board at its meeting held on August 11, 2023 has appointed M/s. D.
S. Momaya & Co. LLP, as Secretarial Auditor, for conducting Secretarial Audit of the
Company for FY 2023-2024.
29. IMPLEMENTATION OF RISK MANAGEMENT POLICY
The Company has formulated a policy and process for risk management.
The Company has set up a core group of leadership team, which identifies, assesses the
risks and the trends, exposure and potential impact analysis at different level and lays
down the procedure for minimization of risks. Risk Management forms an integral part of
Management policy and is an ongoing process integrated with the operations.
30. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The Company has strong commitment towards conservation of energy,
natural resources and adoption of latest technology in its areas of operation. The
particulars relating to conservation of energy, technology absorption, foreign exchange
earnings and outgo, as required to be disclosed under clause (m) of sub-section (3) of
Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is
annexed to this Report as "ANNEXURE E".
31. WHISTLE BLOWER POLICY AND VIGIL MECHANISM
The Company has adopted the Whistle blower Policy and Vigil Mechanism
in view to provide a mechanism for the Directors and employee of the Company to approach
Audit Committee of the Company to report existing/ probable violations of laws, rules,
regulations or unethical conduct.
The Company is committed to adhere to the highest standards of ethical,
moral and legal conduct of business operations. The Vigil Mechanism Policy is hosted on
the Company's website https://www.baluindustries.com/ corporate governance.php
32. THE DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE
REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S
OPERATIONS IN FUTURE
During the year there has been no significant material orders passed by
the Regulators or Courts or Tribunals impacting the going concern status and company's
operations in future.
33. COMPLIANCE OF APPLICABLE SECRETARIAL STANDARDS
During the year under review, the Company has complied with all the
applicable Secretarial Standards issued by The Institute of Company Secretaries of India
and approved by the Central Government pursuant to Section 118 of the Companies Act, 2013.
34. POLICY ON SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
The Company has complied with provisions relating to the constitution
of Internal Complaints Committee under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 which redresses complaints received on
sexual harassment.
During the financial year under review, the Company has not received
any complaints of sexual harassment from any of the women employees of the Company.
35. GREEN INITIATIVE
Your Directors would like to draw your attention to Section 20 of the
Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014,
as may be amended from time to time which permits paperless compliances and also service
of notice / documents (including annual report) through electronic mode to its members.
Accordingly, Electronic copy of the Annual report and the Notice of the Annual General
Meeting are sent to all members whose email addresses are registered with the Company /
depository participant(s).
To support this green initiative, we hereby once again appeal to all
those members who have not registered their e-mail addresses so far are requested to
register their e-mail address in respect of electronic holding with their concerned
Depository Participants and/or with the Company.
36. GENERAL
Your Directors state that no disclosure or reporting is required in
respect of the following items as there were no transactions for the same during the year
under review:
1. Material Changes and/or commitment that could affect the Company's
financial position, which have occurred between the end of the financial year of the
Company and the date of this report;
2. Non-exercising of voting rights in respect of shares purchased
directly by employees under a scheme pursuant to Section 67(3) of the Companies Act, 2013
read with rules 16(4) of Companies (Share Capital and Debentures) Rules, 2014;
3. Receipt of any remuneration or commission from any of its subsidiary
companies by the Managing Director or the Whole-Time Directors of the Company;
4. Revision of the financial statements pertaining to previous
financial periods during the financial year under review;
5. Frauds reported as per Section 143(12) of the Companies Act, 2013;
6. The details of application made or any proceeding pending under the
Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status
as at the end of the financial year.
7. The details of difference between amount of the valuation done at
the time of one-time settlement and the valuation done while taking loan from the Banks or
Financial Institutions along with the reasons thereof.
37. ACKNOWLEDGEMENTS
Your Directors wish to place on record their appreciation for the
assistance and co-operation received from the Company's Bankers, Government Agencies,
Financial Institutions, Customers, Investors and Business constituents and look forward to
maintain the same in future.
Registered Office:
506, 5th Floor, Imperial Palace, 45 Telly Park Road, Andheri (East),
Mumbai - 400069
|
By the Order of the Board |
|
For Balu Forge Industries Limited |
|
Sd/- |
|
Mr. Jaspalsingh Chandok |
| Date: 4th September 2023 |
Chairman & Managing Director |
| Place: Mumbai |
DIN : 00813218 |