Board's Report - 2018 - 19

Dear Members,

The Directors are pleased to present their report and financial statements for the year ended 31^st March, 2019.

Financial Results

(In Rs, Lacs)

Earnings

PAT for the year increased by 74%.

Your Company has been able to achieve extraordinary growth in all the earning parameters, during the last three years, such as EBIDTA on Sales(CAGR-80.34%) and PAT on Sales(CAGR -135.31%). This has been made possible through the policy of complete focus on the Company's core competency.

Operating Revenue

Total Operating Revenue for the year increased by 65.37%.

Your Company has been able to register CAGR of 55.13% in the Operating Revenue during the last three years. This has been made possible because of the extreme hard work, dedication and sincerity of the Company's work force, and efficient completion of Railway Electrification Projects.

Dividends

The Board has recommended a dividend of Rs,

0.60 per share subject to approval of shareholders. The outflow on account of dividend, if approved, would be Rs, 100.34 lacs and that on account of Dividend Distribution Tax would be Rs, 20.63 l acs, thus aggregating to an amount of Rs, 120.97 lacs.

Contribution to Exchequer

Your Company over the years has been making significant contribution in the form various taxes. During the year 2018-19, the Company through its business, enabled tax collections at Central and State level close to Rs, 1330 Lacs, in aggregate.

Management Discussion & Analysis

Review of Economic Scenario and outlook

India's economy in 2018 gained momentum as a result of the stabilization of Goods and Services Tax (GST).

The year 2018-19 witnessed quick recovery and India’s growth accelerated to an estimated 7.3 per cent for 2018 - 19. The economy regained after a temporary slowdown due to demonetization and the implementation of GST. Economic activity continued to recover with strong domestic demand and increase in consumption remained a major contributor to this growth. India emerged as the fastest growing major world economy in 2018 despite increased global headwinds, such as rising oil prices, escalated trade wars between global partners, and the US monetary shutdown.

During the year 2018-19, India made some important strides. It climbed another 23 points in the World Bank's ease of doing business index to the 77th position, for the first time.

In order to cater to the ever increasing consumption in the Indian Economy because of the inclusive nature of growth experienced in the last few years, the leadership of the Country has realized that the transportation sector has to be strengthened keeping in mind the dependence of the country on imported fossil fuels. As a result Electrification of Indian Railways has been able to attract top priority from the Government because of its direct and indirect benefits for the country. As a result the sector has been able to achieve stupendous growth in getting new routes electrified. Further the Government has also set a target of converting the Indian Railways into a 100% electrified service. The results of the Government's plans have started getting noticed which can be easily understood from the following data from the Central Organization for Railway Electrification (CORE).

Growth in Electrification of routes in terms of Route Kilo meters (RKM) increased from 1004 RKM in FY 2016-17 to 3155 RKM in 2017-18. The target for FY 2018-19 has been set at 6000 RKM.

The Indian Railways has adopted a holistic approach for reaping the benefits from electrification. Alongside setting targets for Route Lengths to be electrified the Railways have also started converting its diesel loco fleet to electric locos. A beginning on this front has been made at Varanasi.

In keeping with the Indian Railways' Mission of 100 per cent electrification and de-carbonization agenda, Diesel Locomotive Works, Varanasi has developed a new prototype electric locomotive converted from diesel locomotive. After its mandatory trials, the locomotive was launched from Varanasi to Ludhiana.

This step of the Railways will help the country in saving precious foreign exchange in two ways. The requirement of fossil fuels for ignition of the Diesel Locos would come down and the cost of manufacturing fully new electric locos can be effectively reduced because of comparatively lower investments in converting diesel to electric. Further since the process would be indigenous, the country would also register substantial savings in foreign exchange.

Opportunities and Risks

Central Organization for Railway Electrification (CORE) was set up in 1979 under Ministry of Railways with the prime objective of electrification of railway tracks under the Indian Railways. Almost 40 years since its inception; the organization is marching ahead in the field of electrification by contributing 43.47% of total electrified sections of Indian Railway.

A lot of emphasis is given to Railway Electrification in recent years with a view to reduce the Nation's dependence on imported petroleum based energy and to enhance the country's energy security, with a vision of providing eco-friendly, faster and energy efficient mode of transportation. During the last five years, total 204 electrification projects consisting of 30964 RKM have been sanctioned by Government of India and keeping in mind the huge cost savings and considerable reduction in carbon foot print, Indian Railway has identified electrification of all BG routes as a mission area.

Total 38,000 RKM has been identified for electrification of BG network by 2021.

As per a study total greenhouse gases emission from electric traction will become less than the diesel traction from 2020-21 onwards.

A blue print has been prepared by Indian Railways to electrify network with an estimated annual saving of the order of savings of Rs. 13500 crore post 100% electrification. As per the analysis approximately 5.5 lakh man years will be generated during execution period of Mission Electrification. It has been established that electric trains have several advantages over diesel-powered ones. These advantages include

- Reduced dependence on imported petroleum based fuels.

- It provides energy efficient friendly mode of transports besides improving the system throughput.

- Faster and environment friendly.

- Reduced line hauls cost.

- Increased sectional capacity by about 18% due to higher average speeds.

- Reduced capital, operating and maintenance costs.

- Offers regenerative braking resulting in saving of energy by around 20% in locomotives and around 30% in electric multiple units.

A Study by CORE has estimated that with 100% electrification of Indian Railways, a cumulative saving of Rs, 81000 crores would be realised by 2027.

Aided by the Government policy and initiatives your Company foresees a very bright future for organisations which are providing dedicated services for the Railway Electrification Eco System.

BCPL because of its focus on Railway Electrification has been able to carve a niche for itself in the field, whereby it has become a highly acceptable partner for the Railways.

Your Company has a success record of more than 50% in the tenders that it participates in. This has been possible because of the Company's focus on efficient execution.

Your Company is constantly directing its efforts towards efficiency enhancement in all fronts starting from administrative office to project locations.

Your Company has also started various programmes for training the work force in achieving improvements in micro level efficiency through training and workshops.

Your Company also encourages leadership skills amongst its employees which has helped maintaining a loyal and efficient work force.

Safety

Your Company has, as a policy, always strived to ensure safety and security of its work force. With a view to achieve this your Company constantly organizes training programmes for educating about the ways and means of working under strict safe conditions. Your Company procures the best safety gears comprising of helmets, safety belts and undertakes regular safety checks to ensure that the rules are followed. The Company has a dedicated safety officer to ensure compliance of the rules.

Quality Control

Your Company is aware about its responsibility in terms of delivery of safe Railway Electrification Eco System for the safety of lives and property that use the services of the Railways for meeting their transport requirements.

With a view to achieving the best standards in its construction efforts the Company has in place a system of checks and balances whereby the work performed by its employees is thoroughly checked by trained engineers in terms of safety standards set by the Railway Administration.

Further your Company has a system of identifying its vendors based on their credibility in terms of delivering quality products within committed time.

Your Company depends on vendors approved by RESEARCH DESIGNS & STANDARDS ORGANISATION (RDSO) for procuring equipment required in execution of projects. Considering the ambitious plans of the Government towards Railway Electrification, timely procurement may play out as a considerable risk in future. In order to mitigate the risk, your Company is constantly

developing new vendor base so that any challenge on this front can be effectively dealt with in case an occasion for scarcity of supply of equipment arises.

Environment

The aim of your Company is to develop business while improving its environmental performance in order to create a more sustainable future. In order to achieve this, your Company continues to focus on measures for the conservation and optimal utilization of energy in all the areas of its operations. Work Sites are encouraged to consistently improve operational efficiencies, minimize consumption of natural resources and reduce water, energy consumption and carbon emissions while maximizing productivity.

Health of Employees

Your Company recognizes the importance of maintaining health of its employees who work away from home for considerable period of time. With a view to providing the best medical facilities to its employees, whenever required, your Company has tied up with Medical Insurance provider for its employees to avail the best medical attention without worrying about the cost.

Cautionary Statement

Statements in this Report, particularly those which relate to Management Discussion and Analysis, describing the Company's objectives, projections, estimates and expectations may constitute 'forward looking statements' within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied in the statement depending on the circumstances.

Directors' Responsibility Statement The Directors state that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures were made from the same;

ii. they 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 profits of the Company for that period;

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

iv. they have prepared the Annual Accounts on a going concern basis;

v. they 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. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Corporate Governance

In terms of Regulation 34 of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter "Listing Regulations"), a Report on Corporate Governance along with Compliance Certificate issued by Statutory Auditors of the Company is attached as Annexure - 5 and forms integral part of this Report (hereinafter "Corporate Governance Report").

Directors and Key Managerial Personnel

Directors

Mr Aparesh Nandi retires by rotation and being eligible offers himself for re-appointment.

Mr Aparesh Nandi is a graduate from Calcutta University and a promoter and Chairman of the Company. He has considerable experience in Electrification and other allied works.

Structure of the Board of Directors

Independent Directors

The following are the independent directors of the Company:

1. Mr Vijay Mehta

2. Dr Sanghamitra Mukherjee

3. Mr Swapan Kumar Chakraborty

The Company has received declarations from all Independent Directors confirming that they meet the criteria for independence in the required format under the Companies Act, 2013.

The Company arranges detailed presentation on various business aspects to ensure familiarizing the Independent directors about the different aspects of the prevailing business environment, economy, performance of the Company and its strategies.

Business Responsibility

Creating shared value is your Company's fundamental way of working and contributing to society while ensuring long-term business success. Your Company has been conducting business in a way that delivers long-term shareholder value and benefits to society.

Statutory Auditors

M/s. Jain Seth & Co., Chartered Accountants was appointed as Statutory Auditors of the Company in the AGM held on 30^th September 2014 for a period of 5 years till 2018-19. The Board of Directors has recommended Jain Seth & Co., Chartered Accountants to be appointed as Statutory Auditors of the Company for a period of 5 years with effect 28^th June, 2019, consent of which is being sought from the members of the Company at the ensuing AGM.

Further, the report of the Statutory Auditors M/s. Jain Seth & Co. along with notes to Schedules is enclosed to this report. The observations made in the Auditors' Report are self-explanatory and therefore do not call for any further comments.

The Auditors have highlighted, through reporting under Key Audit Matters, the Company's standing with regard to Contracts under Joint Venture with EMC Ltd., because of the Insolvency of EMC Ltd. In this regard the Board would like to assure that your Company would be able to get the projects completed and the amounts recoverable by your Company would not be jeopardized. The Board anticipates that the works would be fully concluded within the next 8 months.

With regard to the issue of non-preparation of accounts of the Joint Ventures for the FY 2018 19, the Board has analysed the matter and does not foresee any material impact on the finances of the Company once the accounts are available.

With regard to write backs of Rs. 1.50 crores also highlighted by the Auditors under Key Audit Matters, the Board is convinced about the action taken by your Company keeping in mind the failure of the clients to enable your Company to execute the works.

The Auditors have also brought to light through their reporting on Other Matters the disputed Tax Demands amounting to Rs. 4,14,32,687. In this regard, the Board has considered the merits of the issues and does not foresee any outflow on account of the disputed demands.

Cost Accounts and Cost Auditors

Cost audit applicability provisions are contained under rule 4 of the Companies (Cost Records and Audit) Rules, 2014 are not applicable to the Company. Hence no cost accounts are required to be maintained nor Cost Auditors are required to be appointed by the Company.

Secretarial Auditors and Secretarial Standards

Mr Arvind Bajpai, Practising Company Secretaries, have been appointed as the Secretarial Auditor of the Company with effect from 22^nd January, 2019.

Further, the report of the Secretarial Auditor is enclosed to this report and forms part of this report.

Meetings of the Board

During the year 2018, the Board of Directors met 8 (Eight) times. For details of the meetings of the Board of Directors, please refer to the Corporate Governance Report.

Extract of Annual Return

The extract of annual return in Form MGT 9 as required under Section 92(3) of the Companies

Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014 is Annexed as Annexure 1.

Details of Loans and Investments

Details of the loans given by your Company under Section 186 of the Act during the financial year ended 31^st March, 2019 are as follows:

Doharia Ispat Pvt. Ltd. - Non Related Party, Loan Given Rs, 50 Lacs, at 12% p.a. interest for general business purpose. Loan outstanding as at 31^st March 2019 - Rs, 51.85 Lacs

SMTC Steel & Power Pvt. Ltd. - Non Related Party, Loan Given Rs, 40 Lacs, at 12% p.a. interest for general business purpose. Loan outstanding as at 31^st March 2019 - Rs, 40.00 Lacs

Trident Texofab Ltd. - Non Related Party, Loan Given Rs, 100 Lacs, at 12% p.a. interest for general business purpose. Loan outstanding as at 31^st March 2019 - Rs, 104.04 Lacs

Phoenix Overseas Limited - Related Company with common promoters - Guarantee Given against loan from Bank of India amounting to Rs, 66.80 Crores.

Related Party Transactions

Members may refer to note no. 26 to the financial statement which sets out related party disclosures.

Risk Management

The Management of the Company endeavors to identify elements of risk in different areas of operations and to develop mechanism for initiating actions required to mitigate the risks.

The Management on a timely basis informs the Board about risks that may threaten the existence of the Company and also about measures that they propose to take in order to mitigate the risks.

Public Deposits

Your Company has not accepted any Public Deposits under Chapter V of the Companies Act, 2013.

Significant and Material orders passed by the Regulators/Courts/ Tribunals

No significant or material orders were passed by the Regulators or Courts or Tribunals which impacts the going concern status and Company's operations in future.

Internal Financial Controls and their adequacy

The Directors had laid down internal financial controls to be followed by your Company and such policies and procedures adopted by your Company for ensuring the orderly and efficient conduct of its business, including adherence to your Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. The Audit Committee evaluates the internal financial control system periodically.

Audit Committee

During the year under review, the Audit Committee comprised Independent Directors, namely, Mr. Vijay Mehta (Chairman), Mr. Swapan Kumar Chakraborty (Member) and Mr. Uday Narayan Singh, Executive Director cum CFO. Powers and role of the Audit Committee are included in Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board of Directors.

Vigil Mechanism

The Vigil Mechanism of your Company is governed by the document "Whistle Blower Policy & Vigil Mechanism". The said mechanism is available to the directors and employees, who can report to the Company Secretary, on a confidential basis, any practices or actions believed to be inappropriate or illegal.

The Mechanism provides for adequate safeguards against victimization of director(s)/ employee(s) who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee in exceptional cases.

Information regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The Company's activities during the year do not entail disclosure with respect to conservation of energy, technology absorption, etc. in

accordance with the provisions of Section 134(3)(m) of the Company Act, 2013.

The Company does not have any foreign exchange earning and outgo.

Information regarding Employees and related disclosures

Your Company considers people as its biggest assets and 'Believing in People' is at the heart of its human resource strategy. Concerted efforts have been put in talent management, and strong performance management and learning and training initiatives to ensure that your Company consistently develops inspiring, strong and credible leadership. Your Company also organises employee felicitation events wherein well performing employees are rewarded.

The statement of Disclosure of Remuneration under Section 197 of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 ("Rules"), is appended as Annexure - 6 to the Report. The information as per Rule 5(2) of the Rules, forms part of this Report.

Ratio of remuneration of Director/ KMP to the median of the employees:

Note: The median employee remuneration for 2018-19 is Rs 3,56,002/-.

Appreciation

Your Company has been able to operate efficiently because of the culture of

BCPL ANNUAL REPORT - 2018-19 – 16 professionalism, creativity, integrity and continuous improvement in all functions and areas as well as the efficient utilization of the Company's resources for sustainable and profitable growth.

The Directors hereby wish to place on record their appreciation for the efficient and loyal services rendered by each and every employee, without whose whole-hearted efforts, the overall satisfactory performance would not have been possible. Your Directors look forward to the long term future with confidence.

Your Company continued to receive

co-operation and unstinted support from the Railways, Suppliers, and others associated with the Company as its business partners. The Directors wish to place on record their appreciation for the same and your Company will continue in its endeavour to build and nurture strong links with concerned parties, based on mutuality, respect and co-operation with each other and consistent with National interest.

On behalf of the Board of Directors

Jayanta Kumar Ghosh Managing Director

Uday Narayan Singh Executive Director & CFO

Date - 10/05/2019

Place – Kolkata