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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 Siddharth Gupta retires by rotation and being eligible has offered himself for re-appointment as director.
Further the tenure of Mr. Siddharth Gupta as CEO & Managing Director has expired on 31.01.2019. Keeping his association and benefit to the company the Nomination and Remuneration Committee and the Board of Directors have recommended to re-appoint Mr. Siddharth Gupta (DIN 00342369) as CEO & Managing Director for further five years with effect from 1 February 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, and Mr. R.K. Singh, Company Secretary.
The CFO Mr. Jai Singh expired on 07.09.2018 and in his place Mr. Vinay Kumar Piyush has been appointed as Chief Financial Officer w.e.f. 01.04.2019. There is no other changes in the key managerial personnel during the year.
The Board of Directors has carried out on 21.05.2018 and on 21.01.2019 during the year 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 separate meetings 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.
At the thirty seventh AGM held on 28th September, 2017 the members approved appointment of M/s G D Dubey & Associates, Chartered Accountants (Firm Registration number 009836C) as Statutory Auditors of the Company to hold office for a period of five years from the conclusion of that AGM till the conclusion of the 42nd AGM, subject to ratification of their appointment by Members at every AGM, if so required under the Act. The requirement to place the matter relating to appointment of auditors for ratification by Members at every AGM has been done away by the Companies (Amendment) Act, 2017 with effect from May 7, 2018. Accordingly, no resolution is being proposed for ratification of appointment of statutory auditors at this AGM and a note in respect of the same has been included in Notice for this AGM.
The Statutory Auditors Report does not contain any qualification, reservation or adverse remark or disclaimer.
The Board has appointed M/s Ajay Jaiswal & Co., Company Secretaries to conduct Secretarial Audit for the financial year 2018-19. The Secretarial Audit Report for the financial year ended 31st March 2019 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 31.03.2019 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 139215 KWH power generated and approx. 48948 KWH transferred to UP electricity board by this way approximately saving of around Rs. 10.00 lacs made to the company against electric charges.
The other adequate measures are being taken to conserve the energy.
b) Technological Absorption:
The Company upgrades its technological inputs time to time 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 1430.94 lakhs from Exports of Glass Beads, Handicrafts and other items. The actual foreign Exchange Outflow during the year has been Rs. 89.35 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 31st May, 2018, 26th July, 2018, 31st October , 2018, 22nd January, 2019.
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 31.03.2019, 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 or interest was outstanding as of the balance sheet date.
The Company has taken limit from Kotak Bank Ltd., of Rs. 1000.00 lakhs and the amount of loan outstanding as on 31.3.2019 is Rs. 84.00 lakhs. The loan taken from Yes Bank has since been adjusted.
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, 2019.
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. 2018-19.
TRANSFER TO IEPF ACCOUNT
Un-claimed dividend of 2011-12 amounting to Rs. 219250 and corresponding 87700 shares have not been transferred to IEPF on account of pending execution of CLB order dt. 04.07.2007 , 03.08.2007 and 14.09.2007 pending compliance by Petitioners.
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 of Rs.500 have been realised. After giving effect of said receipt, the paid-up capital changed/ increased to Rs. 66139220 from Rs. 66138720. The balance calls in arrears are @ Rs. 5 per share on 44600 shares amounting to Rs. 223000/-
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.
COMPLAINTS PERTAINING TO SEXUAL HARASSMENT:
The details of complaints filed, disposed of and pending during the financial year pertaining to sexual harassment is provided in the Business responsibility report of this Annual Report.
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 2018-19, ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2018-19 and the comparison of remuneration of each Key Managerial Personnel (KMP) against the performance of the Company are as under:
|Name of Director/KMP and Designation||Remuneration of Director/KMP for financial year 2018- 19 in Rs||% increase in Remuneration in the Financial Year 2018-19||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||2405400||NIL||31.13||Profit before Tax Decrease By 31.42% and Profit After Tax Decrease by 16.46% in Financial year 2018-19|
|2 Siddharth Gupta CEO & Managing Director||1666560||NIL||21.57|
|3 Shalini Chandra Executive Director||672000||NIL||8.70|
|4 Ramesh Kumar Singh Company Secretary||794880||NIL||10.29|
|5 Jai Singh Chief Finance Officer||213928||NIL||2.77|
ii) The median remuneration of employees of the Company during the financial year 2018-19 is Rs.7 7276 and in Financial Year 2017-18 was Rs. 78390.
iii) In the financial year, there was decrease of 1.42 % in the median remuneration of employees;
iv) There were 267 permanent employees on the rolls of Company as on March 31, 2019;
v) Relationship between average increase in remuneration and company performance:-
The Profit before Tax for the financial year ended March 31, 2019 decrease by 31.42 % whereas the decrease in median remuneration was 1.42%.
vi) Comparison of Remuneration of the Key Managerial Personnel(s) against the performance of the Company:
The total remuneration of Key Managerial Personnel decreased by 4.55 % from 60.27 lacs (annualised) in 2017-18 to 57.53 lacs in 2018-19 whereas the Profit before Tax Decrease by 31.42% to 159.53 lacs in 2018-19 (231.82 lacs in 2017-18) .
vii) a) Variations in the market capitalisation of the Company :
The market capitalisation as on March 31, 2019 was Rs. 3201.98 lacs (Rs. 4048.01 lacs as on March 31, 2018). b) Price Earnings ratio of the Company was 27.57 as at March 31, 2019 and was 27.74 as at March 31, 2018.
vii) Average percentage increase was made in the salaries of employees other than the managerial personnel in the last financial year i.e. 2018-19 is 2.06 % and in the managerial remuneration increase for the last financial year was 1.74 %.
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
i x) 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. The Board place on record a deep appreciation for the valuable services rendered by Late Jai Singh who died during his tenure as a Chief Financial Officer of the Company.
By order of the Board of Directors
For BANARAS BEADS LTD.
(Ashok Kumar Gupta)
Chairman & Managing Director
Place : VARANASI
Date : 30 05. 2019
MANAGEMENT DISCUSSION & ANALYSIS OVERVIEW:
The statements made in this Management Discussion and Analysis Report describing the Companys objectives, expectations or predictions may be forward looking within the meaning of applicable laws and regulations. Actual results may differ from such expectation whether express or implied. Several factors that could make significant impact on the companys operations include global and supply conditions, input availability and prices, changes in Government regulations, foreign policy, foreign currency, tax laws, economic developments within the country and other factors.
INDUSTRIAL STRUCTURE AND DEVELOPMENT:
Your company is an Export House recognized by Government of India, Ministry of Commerce & Industries and main business of handicrafts like Glass Beads, Necklaces, Imitation Jewellary in indigenous and Export market. The company exports its products in U.S.A., U.K., France, Germany, Japan, and other countries with various reputed customers.
OPPORTUNITIES & THREATS:
The companys product is fashionable items which are being made by hand/small machines and take times in production. The products of the company appreciated in International and indigenous market. But due to change of fashion in sort period directly affect demand of products in market. The fluctuation in foreign currency price also affected the profit of the Company. The management has taken appropriate steps to meet the threats and making extensive efforts on quality control, cost reduction and widen its marketing network.
The Companys main business is Manufacturing and export of Handicraft items like Glass Beads; Neckleces, Imitation Jewellary etc.. All those items form just one Segment. As the company has its commercial activity mainly at Varanasi, hence separate geographical segment wise reporting is not required.
FINANCIAL / OPERATIONAL PERFORMANCE:
|(Rs. in lacs)||(Rs. in lacs)|
|Revenue from Operations||1731.17||2377.92|
|Net Profit Before Taxation||158.97||231.82|
|Net Profit after taxation||115.51||138.28|
|Balance of Profit & Loss Account B/F||1354.28||1296.06|
|Transfer to General Reserve||0.00||0.00|
|Tax on Dividend||0.00||13.51|
|Taxes of earlier Years||0.49||0.19|
|Balance of Profit & Loss Account C/F||1469.31||1354.28|
The Company is developing new items/products through imported machines and getting order on the basis of same and in coming years demand of company products will be increased in international and indigenous market. During the year company has participated in Foreign Trade Fairs mainly held in Hong Kong and Germany and other countries.
RISK & CONCERNS:
The main business of your Company is Export business, continuous down fall last four five years in international market is major concern for your company. Any further change in duty drawback, DEPB and Exchange Rate policies would have a direct effect on the profitability of the Company. The management of your Company is hopeful on offsetting any adverse impact by better management abilities.
INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY:
The Company has developed adequate Internal Control Systems, commensurate to its size and business, which are aimed at achieving efficiency in operations, effective monitoring and optimum utilisation of resources. The Company has appointed Internal auditors to conduct the Internal Audit work. The reports of the Internal Auditors are periodically reviewed by the Audit Committee. The Company has been accredited with ISO 9001:2015 and follows the prescribed parameters.
DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:
Despite of taking all efforts during the financial year total turnover has decreased to Rs. 1639.04 lacs in comparison to Rs. 2283.29 lacs.
MATERIAL DEVELOPMENT IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED:
Labour relations have been cordial with management without interruption of manufacturing activities. The total number of permanent employees of the company is 267 as on March 31, 2019 and out of which women employees are 124.
DISCLOSURES BY SENIOR MANAGEMENT PERSONNEL (I.E) ONE LEVEL BELOW THE BOARD INCLUDING ALL FUNCTIONAL HEADS:
None of the Senior Management personnel has Financial and Commercial transaction with the Company, where they have personal interest that would have a potential conflict with the interest of the Company at large.
The financial statements of the company (Banaras Beads Limited) are prepared in compliance with the Companies Act, 2013 and in accordance with Indian Accounting Standards (Ind. AS). The balance sheet as at March 31, 2019, statement of profit and loss for the year ended March 31, 2019, statement of change in equity and the cash flow statement for the year ended March 31, 2019 read with statements annexed thereto are more relevant for understanding the performance of the company.
For BANARAS BEADS LTD.
(Ashok Kumar Gupta) Chairman & Managing Director
Place : VARANASI
Date : 30.05.2019