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Your Directors are pleased to present the 38th Annual Reports together with the Audited Accounts of the Company for the year ended on 31st March 2018.
|(Rs. in lacs)||(Rs. in lacs)|
|Revenue from Operations||2377.92||2732.46|
|Net Profit Before Taxation||231.82||281.06|
|Net Profit after taxation||138.28||166.89|
|Balance of Profit & Loss Account B/F||1296.06||1174.06|
|Transfer to General Reserve||0.00||15.00|
|Tax on Dividend paid||13.51||7.07|
|Taxes of earlier Years||0.19||22.82|
|Balance of Profit & Loss Account C/F||1354.28||1296.06|
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to provisions of Section 134(5) of the Companies Act, 2013, the Directors hereby state and confirm -
(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 had selected such accounting policies and applied them consistently except as required by accounting standards and other applicable law(s) 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 profit and loss of the company for that period;
(c) 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) the directors had prepared the annual accounts on a going concern basis; and
(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.
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants, including audit of internal financial controls over financial reporting by the statutory auditors, and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Companys internal financial controls were adequate and effective during FY 2017-18.
ADOPTION OF IND AS:
The company has adopted Ind AS from the current financial year and accordingly figures of 31.03.2017 and 01.04.2016 are re-stated. Details of implication of first time adoption of Ind AS has been given in notes on accounts.
During the year turnover of your Company decreased in the comparison of previous year due to recession in global demand of glass beads, handicrafts etc.
Based on the Companys performance during the year 2017-18, the Board of Directors decided not to recommend dividend.
SETTLEMENT OF MANAGEMENT DISPUTES:
The Special Leave Petition vide no. 25165-25166/2007 filed by Shri Ajit Kumar Gupta and others against Honble CLB order dt. 04.07.2007 and 03.08.2007 in the matter of C.P. No. 14/99, CP No. 14/111/1999, 15/111/1999 and 1/111/2001. The said SLP finally has been decided by Honble Supreme Court on 11.04.2018. The Honble Supreme Court has dismissed the appeals filed by Mr. Ajit Kumar Gupta and others group of small shareholders without any direction, the content of said order is as under-
"We have heard learned council for the parties and perused the record. We do not find any merit in these appeals which are here by dismissed."
By said order of Supreme Court, the two decade old disputes between the management has finally legally resolved. There is no financial impact of said present order of Honble Supreme Court to the company.
MANAGEMENTS DISCUSSION AND ANALYSIS REPORT:
Managements Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR) is presented in a separate section forming part of the Annual Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Pursuant to the provisions of section 149 of the Act, Mr. Ashok Kumar Kapoor, Mr. Praveen Anand Singh, and Mr. Tanmay Deva were appointed as independent directors at the annual general meeting of the Company held on August 13, 2015. They have submitted a declaration that each of them meets the criteria of independence as provided in section 149(6) of the Act and there has been no change in the circumstances which may affect their status as independent director during the year.
Shri Ashok Kumar Gupta retires by rotation and being eligible has offered himself for re-appointment as director.
Further the tenure of Mr. Ashok Kumar Gupta as Managing Director will be expired on 31.03.2019. Keeping his association and benefit to the company the Nomination and Remuneration Committee and the Board of Directors have recommended to re-appoint Mr. Ashok Kumar Gupta (DIN 00016661) as Managing Director for further five years with effect from 1 April 2019.
During the year, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than the sitting fees to attend the meetings of the Company.
Pursuant to the provisions of section 203 of the Act, the key managerial personnel of the Company are Mr. Ashok Kumar Gupta, Chairman & Managing Director, Mr. Siddharth Gupta, Chief Executive Officer and Managing Director, Smt. Shalini Chandra, Executive Director, Mr. Jai Singh, Chief Financial Officer and Mr. R.K. Singh, Company Secretary. There has been no change in the key managerial personnel during the year.
The Board of Directors has carried out an annual evaluation of its own performance, board committees, and individual directors pursuant to the provisions of the Act, SEBI Listing Regulations and the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017.
The performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc.
The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.
The board and the nomination and remuneration committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the chairman was also evaluated on the key aspects of his role.
In a separate meeting of independent directors, performance of non-independent directors, performance of the board as a whole and performance of the chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent directors, at which the performance of the board, its committees and individual directors was also discussed. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.
POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION AND OTHER DETAILS
The Companys policy on directors appointment and remuneration and other matters provided in section 178(3) of the Act has been disclosed in the corporate governance report, which forms part of this report.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The details in respect of internal financial control and their adequacy are included in the management discussion & analysis, which forms part of this report.
The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report.
AUDITORS AND AUDITOR REPORT:
Pursuant to the provisions of Section 139 of the Act read with Companies (Audit and Auditors) Rules, 2014, as amended from time to time, M/s G D Dubey & Associates, Chartered Accountants (Firm Registration number 009836C) ,were appointed as statutory auditors from the conclusion of the thirty seven Annual General Meeting (AGM) held on September 28, 2017 till the conclusion of the forty two AGM of the Company in the year 2022, subject to the ratification of their appointment at every AGM, if required under law. Accordingly, necessary resolution for ratification of appointment of auditors is included in the Notice for this AGM.
The Board has appointed M/s Ajay Jaiswal & Co., Company Secretaries to conduct Secretarial Audit for the financial year 2017-18. The Secretarial Audit Report for the financial year ended 31st March 2018 is annexed herewith marked as Annexure I to this report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
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 reviewing the risk management plan and ensuring its effectiveness. The audit committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.
The development and implementation of risk management policy has been covered in the management discussion and analysis, which forms part of this report.
EXTRACT OF ANNUAL RETURN
The extract of Annual Returns [Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014] as on the financial year ended on 31.03.2018 is attached as Annexure- II with this Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO:
Information as per Section 134 (3) (m) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are furnished as under:
a) Conservation of Energy :
The operations of the Company involve low energy consumption. The solar power plant of 150 KVA is properly working and saving grid electricity. During the year 191353.38 KWH power generated and approx. 35000 KWH transferred to UP electricity board by this way approximately saving of Rs. 20.00 lacs made to the company against electric charges.
The other adequate measures are being taken to conserve the energy.
b) Technological Absorption:
The Company has imported machines from China and Czech Republic to upgrades its technological inputs for its products. However presently company has no collaboration arrangement with any foreign organization.
c) Foreign Exchange Earning and Outgo:
The actual foreign exchange earnings (inflow) of the Company during the financial year has been Rs 1150.33 lakhs from Exports of Glass Beads, Handicrafts and other items. The actual foreign Exchange Outflow during the year has been Rs. 113.71 lakhs for the import of materials, foreign traveling expenses and other sales promotional activities.
Corporate Governance Report, Management Discussion and Analysis statement and Business Responsibility Report and a certificate from the Auditors confirming compliance are annexed herewith to this report.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate on the date of this report.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiary, Joint venture or Associate Company.
NUMBER OF MEETING OF BOARD
Four Board Meetings were held during the F.Y. on 25th May 2017, 27th July, 2017, 26th October , 2017, 25th January, 2018.
STATEMENT OF DECLARATION GIVEN BY INDEPENDENT DIRECTORS U/S 149 (6) .
All the Independent Directors have given their declaration as per Section 149(7) that they meet the criteria of independence as provided in section 149(6) of the Companies Act 2013.
POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION-
The current policy is to have an appropriate mix of executive and independent directors to maintain the independence of the Board, and separate its functions of governance and management. As on 31.03.2018, the board consists of 6 members, three of whom are executive or whole-time directors including one woman and three are independent directors. The policy of the company on directors appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Sub-section (3) of section 178 of the Companies Act, 2013. We affirm that the remuneration paid to the directors is as per the terms laid out in the nomination and remuneration policy of the Company.
FIXED DEPOSITS FROM PUBLIC:
The Company have not accepted any fixed deposits and as such, no amount of principal interest was outstanding as of the balance sheet date.
The Company has taken limit from Yes Bank of Rs. 1500.00 lakhs and the amount of loan outstanding as on 31.3.2018 was Rs.190.30 lakhs.
DETAILS OF LOANS GIVEN, INVESTMENTS MADE AND GUARANTEE GIVEN COVERED U/S 186 (4) OF THE COMPANIES ACT, 2013.
Loans given and Investments made are given under the respective heads of the Balance Sheet.
No Corporate Guarantees given by the Company in respect of loans as at 31st March, 2018.
As per SEBI Listing Regulations, the Corporate Governance Report with the Auditors Certificate thereon, and the Management Discussion and Analysis are attached, which form part of this report.
As per Regulation 34 of the SEBI Listing Regulations, a Business Responsibility Report is attached and is a part of this annual report.
As per Regulation 43A of the SEBI Listing Regulations, the Dividend Distribution Policy is disclosed in the Corporate Governance Report and on the website of the Company.
TRANSACTIONS WITH RELATED PARTIES.
None of the transactions with related parties falls under the scope of section 188(1) of the Act as all the transaction are done at arm length price during ordinary course of business. Information on transactions with related parties pursuant to section 134(3) (h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure III in Form AOC-2 and the same forms part of this report.
Particulars of contract U/s 188
Transactions, i.e. the Companys transactions that are of material nature, with its Promoters, Directors and the management, their relatives or subsidiaries, among others that may have potential conflict with the Companys interests at large.
During the period under review, the Company had not entered into any material transaction with any of its related parties that may have potential conflict with the Companys interests at large. Although all the transactions with related parties are done at arm length price, but in compliance of Ind AS 24 the disclosure of transactions with related parties are set out in Note No. 31 of Financial Statements which is forming part of the Annual Report.
CORPORATE SOCIAL RESPONSIBILITY.
The Provision of Section 135 of Companies Act 2013 concerning with Corporate Social Responsibility is not applicable during the F.Y. 2017-18.
The company has made CSR project/activities on "Renewable Energy Projects" through trust towards installation of 20 KVA Solar Project. The cost of said solar project was Rs. 17.50 lacs but Company has made CSR payment Rs. 8.51 lacs to the Trust during this financial year against the CSR amount of Rs. 8.25 lacs. The said Solar Project has been duly completed and started to generate power.
The said 20 KVA Solar Project will reduce Carbon (Co2) emission approx thirty ton in a year. It is great benefit to the nature and society.
The average net profit of the company for last three financial years is Rs. 3.90 Crore and for immediate preceding financial year is Rs. 1.67 Crore. Hence CSR provisions do not apply during the current financial year to the company. The relevant attachment is attach at the end of this board report.
EVALUATION REPORT ON CAPITAL
The Provision of Evaluation on Capital is not applicable to the Company. Besides that the Board met time to time and appraised performance of the Company. The ways and means were made to increase the business and growth of the Company.
INCREASE IN PAID-UP CAPITAL-
During the year one shareholder calls in arrears amount Rs.500 have been realised. After giving effect of said receipt, the paid-up capital changed/ increased to Rs. 66138720 from Rs. 66138220. The balance calls in arrears are @ Rs. 5 per share on 44700 shares amounting to Rs. 223500/-
MATERIAL CHANGES :
No material changes were made during the year which affects the financial and commitments of the Company.
INTERNAL FINANCIAL CONTROLS:
The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation were observed.
PARTICULARS OF EMPLOYEES:
The details pertaining to remuneration as required under section 197(12) of the companies act, 2013 read with rule 5(1) of the companies (appointment and remuneration of managerial personnel) rules, 2014.
(i) The percentage increase in remuneration of each Director, Chief Financial Officer and Company Secretary during the financial year 2017-18, ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2017-18 and the comparison of remuneration of each Key Managerial Personnel (KMP) against the performance of the Company are as under:
|Sl. No. Name of Director/KMP and Designation||Remuneration of Director/KMP for financial year 2017- 18 in Rs||% increase in Remuneration in the Financial Year 2017-18||Ratio of remuneration of each Director/to median remuneration of employee||Comparison of the Remuneration of the KMP against the performance of the Company|
|1 Ashok Kumar Gupta Chairman & Managing Director||2400000||NIL||30.62|
|2 Siddharth Gupta CEO & Managing Director||1666560||NIL||21.26|
|3 Shalini Chandra Executive Director||672000||NIL||8.57|
|4 Ramesh Kumar Singh Company Secretary||794880||8.11%||10.14||Profit before Tax Decrease By 17.52% and Profit After Tax Decrease by 17.14% in Financial year 2017-18|
|5 Jai Singh Chief Finance Officer||493680||9.65%||6.30|
ii) The median remuneration of employees of the Company during the financial year 2017-18 is Rs.78390 and in Financial Year 2016-17 was Rs. 80836.
iii) In the financial year, there was decrease of 3.03 % in the median remuneration of employees;
iv) There were 236 permanent employees on the rolls of Company as on March 31, 2018;
v) Relationship between average increase in remuneration and company performance:-
The Profit before Tax for the financial year ended March 31, 2018 decrease by 17.52 % whereas the decrease in median remuneration was 3.03%.
vi) Comparison of Remuneration of the Key Managerial Personnel(s) against the performance of the Company:
The total remuneration of Key Managerial Personnel increased by 1.74 % from 59.24 lacs (annualised) in 2016-17 to 60.27 lacs in 2017-18 whereas the Profit before Tax Decrease by 17.52% to 231.82 lacs in 2017-18 (281.06 lacs in 2016-17) .
vii) a) Variations in the market capitalisation of the Company :
The market capitalisation as on March 31, 2018 was Rs. 4048.01 lacs (Rs. 5073.39 lacs as on March 31, 2017) .
b) Price Earnings ratio of the Company was 27.74 as at March 31, 2018 and was 30.46 as at March 31, 2017.
vii) Average percentage increase was made in the salaries of employees other than the managerial personnel in the last financial year i.e. 2017-18 is 1.74 % and in the managerial remuneration increase for the last financial year was 2.60 %.
viii) The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year Not Applicable; and
ix) It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.
TRADING OF SHARES UNDER "B" GROUP:
The shares of your Company are presently being traded with BSE and NSE Stock Exchanges under "B" Group.
The Directors wish to place on record their sincere appreciation of the devoted and efficient services rendered by all officers, employees and others associated with the Company.
|By order of the Board of Directors|
|For BANARAS BEADS LTD.|
|Place : VARANASI||(Ashok Kumar Gupta)|
|Date : 31 05. 2018||Chairman & Managing Director|