Bhartiya International Ltd Directors Report.

Your Directors have pleasure in presenting the 32nd Annual Report and the Audited Financial Statements of the Company for the financial year ended 31st March, 2019.

FINANCIAL RESULTS

The consolidated and standalone financial results of the Company for the financial year ended 31st March, 2019 are as follows:

(Rs. in Lacs)

Particulars

Consolidated

Standalone

2018-19 2017-18 2018-19 2017-18
Net Sales/ Income from Operations 74799.74 71051.66 60929.63 51825.97
Other Income 1198.07 725.54 412.76 526.12
Total Income 75997.81 71777.20 61342.39 52352.09
Profit before Interest, Tax & Depreciation 6717.19 5408.25 6060.81 4392.53
Finance Cost 3053.31 1956.07 2876.72 1722.71
Profit before Tax & Depreciation 3663.88 3452.18 3184.09 2669.82
Depreciation 812.70 748.27 692.59 628.79
Profit Before Tax 2851.18 2703.90 2491.50 2041.03
Tax Expenses 954.74 842.61 866.09 727.94
Net Profit After Tax 1896.44 1861.30 1625.41 1313.09
Share of Net Profit/(Loss) of Associates 80.35 (118.07) - -
Net Profit 1976.79 1743.22 1625.41 1313.09
Other Comprehensive Income 2.98 3.39 (7.71) 5.70
Total Comprehensive Income for the Year 1979.77 1746.62 1617.70 1318.79
Paid up Equity Share Capital 1219.42 1218.13 1219.42 1218.13
Reserve (Excl. Revaluation Reserve) 38276.25 36272.00 25692.38 24211.22
Earning per Share (Basic) Rs. 16.25 14.42 13.28 10.87
Earning per Share (Diluted) Rs. 16.11 14.28 13.18 10.76
Dividend 0.12 0.12 0.12 0.12

PERFORMANCE REVIEW

On consolidated basis, during the year under review, the Company achieved a turnover of Rs. 74799.74 Lacs as against Rs. 71051.66 Lacs in the previous year showing an increase of 5.28%. The Net Profit after taxes and share of profit/(loss) of associates was reported at Rs. 1976.79 Lacs as against Rs. 1743.22 Lacs in the previous year.

On standalone basis, during the year under review, the Company achieved a turnover of Rs. 60929.63 Lacs as against Rs. 51825.97 Lacs in the previous year showing an increase of 17.57% The Net Profit after taxes also increased to Rs. 1625.41 Lacs as compared to Rs. 1313.09 Lacs in the previous year showing an increase of 23.79%.

DIVIDEND

Your Directors have recommended a Dividend of Rs.1.20/- per paid-up equity share of Rs. 10/- each (i.e. @ 12%) for the Financial Year ended 31st March, 2019. The dividend payout is subject to approval of members at the ensuing Annual General Meeting. The total outflow on account of dividend will be approximately Rs. 146.37 lakhs (excluding taxes).

Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, top five hundred listed entities based on market capitalization are required to formulate a Dividend Distribution Policy. Since, the Company is currently not falling under the above category, the requirement of adopting the Policy is currently not applicable to the Company.

RESERVES

During the period under review an amount of Rs. 2 Crore has been transferred to Reserves of the Company.

SHARE CAPITAL

During the year under review, the following changes had taken place in the Paid-up Equity Share Capital of the Company:

Dates Description No. of shares Total value of shares (Rs.)
01/04/2018 Share Capital at the beginning of the year 12181254 121812540
Addition
23/07/2018 Equity Shares allotted pursuant to ESOP scheme 2369 23690
01/12/2018 Equity Shares allotted pursuant to ESOP scheme 1813 18130
31/01/2019 Equity Shares allotted pursuant to ESOP scheme 8738 87380
31/03/2019 Share Capital at the end of the year 12194174 121941740

As on March 31, 2019, Mr. Manoj Khattar, Whole-Time Director of the Company hold instruments convertible into equity shares of the Company.

EMPLOYEES STOCK OPTION PLAN

During the year under review, the Company has granted 30,000 stock options to eligible employees of the Company based on their performance under the Employee Stock Option Plan 2013.

During the year under review, the Company has allotted 12920 equity shares of Rs. 10/- each on exercise of vested options by certain employees of the Company and its subsidiaries.

The Nomination and Remuneration Committee of the Board of Directors of the Company, inter alia, administers and monitors the Employees Stock Option Scheme of the Company in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (the SEBI Guidelines) read with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.

The Company has received a certificate from the Statutory Auditors of the Company that the Scheme has been implemented in accordance with the SEBI Guidelines and the resolution passed by the shareholders. The certificate would be placed at the Annual General Meeting for inspection by members.

Statement Pursuant to Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations, 2014 as at 31st March 2019, are set out in Annexure A to this Report.

FINANCIAL STATEMENTS

As mandated by the Ministry of Corporate Affairs, the financial statements for the year ended on 31st March, 2019 has been prepared in accordance with the Indian Accounting Standards (IND AS) notified under Section 133 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014. The estimates and judgements relating to the Financial Statements are made on a prudent basis, so as to reflect in a true and fair manner, the form and substance of transactions and reasonably present the Companys state of affairs, profits and cash flows for the year ended 31st March, 2019.

DETAILS AND PERFORMANCE OF SUBSIDIARY COMPANIES Domestic Subsidiaries Bhartiya Global Marketing Ltd.

It is a Marketing Company engaged in export of textile and leather garments. The net loss was reported at Rs. 8.67 lakhs during the financial year 2018-19.

J&J Leather Enterprises Ltd.

This Company is a tannery to support our leather garments and accessories business through conversion/finishing of wet blue leather into finished leather. The total revenues of the Company was Rs. 1687.10 lakhs and the net profit was Rs. 26.88 lakhs during the financial year 2018-19.

Bhartiya International SEZ Ltd.

The Company is incorporated to develop sector specific Special Economic Zone (SEZ) of Leather & Leather Products. It is a joint venture between Bhartiya International Ltd. and Andhra Pradesh Industrial Infrastructure Corporation. The total revenues of the Company was Rs. 35.15 lakhs and the net loss was Rs. 15.26 lakhs during the financial year 2018-19.

Bhartiya Fashion Retail Ltd.

The Company had registered a profit of Rs. 4.71 lakhs for the financial year 2018-19.

Bhartiya Urban Infrastructure Ltd.

The Company had registered a loss of Rs. 0.06 lakhs for the financial year 2018-19.

Overseas Subsidiaries Ultima S.A. Switzerland

The Company is engaged in marketing and selling of outerwears including leather garments, accessories and textile products in Europe. The total revenues of the Company was CHF 22,052,218.08 and the net profit was CHF 647,880.58 during the financial year 2018-19.

World Fashion Trade Ltd., Mauritius

This company is engaged in sourcing of outerwear (including leather, PU Garments, fashion accessories) and textile product from China, India and Bangladesh for marketing and selling in Europe and US markets. The total revenues of the Company was HK$ 4,249,405 and the Company has registered a net profit of HK$ 246,095 for the period ended 31st March 2019.

Ultima Italia SRL, Italy

This company markets all fashion products including fur and leather garments in Italian market. The total revenues of the Company was Euro 2,676,781 and the net profit was Euro 21,136 during the financial year 2018-19.

Design Industry Ltd., Hongkong

This company is engaged in sourcing of outerwear (including leather, PU Garments, fashion accessories) and textile product from China and India for marketing and selling in Europe. The total revenues of the Company was HK$ 78,476,255 and the net profit was HK$ 281,861.

Design Industry China Ltd., China

The company is engaged in marketing and selling of outerwear (including leather, PU Garments, fashion accessories) from China for marketing and selling in China. The total revenue of the Company was RMB Yuan 3,449,941.94 and the net loss was RMB Yuan 1,204,072.19.

New Subsidiary /Associate Company incorporated / dissolved during the year

No new Subsidiary or Associate Company was incorporated/acquired during the year under review. Also, no Subsidiary or Associate Company was dissolved during the year.

Consolidated Financial Statements

The Consolidated Financial Statements of the Company are prepared in accordance with the relevant Indian Accounting Standards issued by the Institute of Chartered Accountants of India and forms an integral part of this Report.

Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of Subsidiaries/Associate Companies/Joint Ventures is given in Form AOC-1 and forms an integral part of this Report.

CORPORATE GOVERNANCE

As per Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on corporate governance practices followed by the Company, together with a certificate from the Companys Auditors confirming compliance forms an integral part of this Report.

MANAGEMENT DISCUSSION & ANALYSIS

The Management Discussion and Analysis Report on the operations of the Company, as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided in a separate section and forms an integral part of this Report.

EXTRACT OF ANNUAL RETURN

The details forming part of the Annual Return in form MGT-9, as required under Section 92 of the Companies Act, 2013, forms an integral part of this Report. The same is provided herewith as Annexure B.

SECURITIES AND EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015

The Companys securities are listed at the following Stock Exchanges in India: -

1. BSE Limited

2. The National Stock Exchange of India Limited

The Annual Listing fee for the Financial Year 2019-2020 has already been paid to both the above Stock Exchanges.

DIRECTORS

During the year under review, Mr. Ashok Kumar Gadhok (DIN: 01254410), and Ms. Jaspal Sethi (DIN: 01689695) ceased to be Whole-Time Directors. Mr. Robert Burton Moore Jr. (DIN: 08108097) was appointed as Non-Executive Director with effect from 16th April, 2018 and Mr. Manoj Khattar (DIN:00694981) was appointed as Whole-Time Director of the Company with effect from 13th August, 2018 for a period of 5 years. The above changes were noted and approved by the shareholders in the last AGM.

The tenure of Mrs. Annapurna Dixit (DIN: 06844250) as Independent Director concluded on 28th September 2018. However, considering her vast experience, knowledge and insights and based on the recommendation of Nomination and Remuneration Committee, Mrs. Annapurna Dixit was re-appointed as Independent Director for a second term on 29th September, 2018.

The tenure of Mr. Snehdeep Aggarwal (DIN: 00928080) as the Managing Director of the company concluded on 31st March, 2019. However, being the promoter of the Company, the Board had appointed him as the Chairman of the Company with effect from 1st April 2019 for a period of 5 years subject to approval of the shareholders. He served as the Executive Chairman from 1st April 2019 till 31st May, 2019 and continued as Non-Executive Chairman with effect from 1st June, 2019 in order to provide guidance and mentorship to the executive management.

Appropriate Resolutions seeking your approval for appointment of Mr. Snehdeep Aggarwal as the Executive Chairman for the period 1st April 2019 till 31st May, 2019 and Non-Executive Chairman with effect from 1st June 2019 is included in the Notice.

The Company has received notice in writing from member under Section 160 of the Companies Act, 2013, proposing the candidature of Mr. Snehdeep Aggarwal as Director of the Company for the ensuing Annual General Meeting.

In accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. Nikhil Aggarwal (DIN: 01891082), is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment. The Board of Directors recommends his re-appointment and the matter is being placed for the approval of members at the ensuing Annual General Meeting of the Company.

Appropriate resolution seeking continuation of Mr. Ramesh Bhatia as Non-Executive Director on attaining the age of 75 years is also included in the Notice for approval of the members.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16 (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

KEY MANAGERIAL PERSONNEL

Mr. Raj Kumar Chawla had been appointed as the Chief Financial Officer (Key Managerial Personnel) of the Company with effect from 11th February, 2019. Mr. Manoj Khattar had been re-designated as the Key Managerial Personnel for the position of Whole-Time Director on 11th February, 2019. Prior to this change, Mr. Manoj Khattar was holding the Key Managerial Personnel position in the capacity of Chief Financial Officer of the Company. Accordingly, the following are the Key Managerial Personnel of the Company:

Sl. No. Name of the person Designation
1 Mr. Manoj Khattar Whole-Time Director
2 Mr. Raj Kumar Chawla Chief Financial Officer
3 Ms. Shilpa Budhia Company Secretary

COMMITTEES

The Board of Directors has the following mandatory Committees:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders Relationship Committee

4. Corporate Social Responsibility Committee

The details of the composition of Committees, terms of reference and numbers of Meetings held during the Financial Year 2018-19 is provided in the Corporate Governance Report.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a structured questionnaire was prepared after taking into consideration the various aspects of the Boards functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance.

The performance evaluation of the Independent Directors was completed. The performance evaluation of the Managing Director, Whole-Time Directors and the other Non-Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

NUMBER OF MEETINGS OF THE BOARD

During the Financial Year 2018-19, four Board Meetings of the Company were held. The details of the Meetings of the Board held during the Financial Year 2018-19 forms part of the Corporate Governance Report.

COMPLIANCE OF SECRETARIAL STANDARDS

During the financial year under review, the Company has complied with the applicable Secretarial Standards specified by the Institute of Company Secretaries of India pursuant to Section 118 of the Companies Act, 2013.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY COMPANY

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to Financial Statements.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a Whistle Blower Policy to report genuine concerns or grievances. The Whistle Blower Policy has been posted on the website of the Company (www.bhartiyafashion.com).

NOMINATION, REMUNERATION AND BOARD DIVERSITY POLICY

The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. The Policy broadly lays down the guiding principles, philosophy and the basis for payment of remuneration to Executive and Non-executive Directors This policy also lays down the criteria for selection and appointment of Board members. The policy also provides the criteria for determining qualifications, positive attributes and Independence of Director and criteria for appointment of Key Managerial Personnel / Senior Management and performance evaluation which are considered by the Nomination and Remuneration Committee and the Board of Directors while making selection of the candidates

RELATED PARTY TRANSACTIONS

All transactions entered with related parties for the year under review were on arms length basis and in ordinary course of business and that the provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus disclosure in the form AOC-2 is not required. Further, there are no material related party transactions during the year under review with Promoters, Directors or Key Managerial Personnel. All related party transactions are mentioned in the Notes to the Financial Statements.

All related party transactions are placed before the Audit Committee as also to the Board for approval.

Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature with Related Parties. A statement giving details of all the related party transactions are placed before the Audit Committee and Board for review and approval on a quarterly basis.

The Policy on Related Party Transactions as approved by the Board of Directors has been uploaded on the website of the Company. The web link of the same is www.bhartiyafashion.com. None of the Directors has any pecuniary relationship or transactions vis-a-vis the Company except remuneration and sitting fees.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders by the Regulators/Courts that would impact the going concern status of the Company and its future operations.

DIRECTORS RESPONSIBILITY STATEMENT

To the best of knowledge and belief and according to the information and explanations obtained, your Directors make the following statement in terms of Section 134(3)(c) of the Companies Act, 2013:

(a) that in the preparation of the annual accounts for the financial year ended 31st March, 2019, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) that the directors had 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 as at 31st March, 2019 and of the profit of the company for the year ended on that date;

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

(d) that the annual accounts have been prepared on a going concern basis; and

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

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

STATUTORY AUDIT

At the Annual General Meeting (AGM) held on 27th September, 2017, M/s. K A S G & Co., Chartered Accountants (Firm Registration No. 002228C) were appointed as the Statutory Auditors of the Company for an initial term of 5 years. The Ministry of Corporate Affairs vide notification No. S.O. 1833(E) dated 7th May, 2018, has done away with the requirement of seeking ratification of members for appointment of auditors at every Annual General Meeting. Accordingly, no resolution is being proposed for ratification of appointment of Statutory Auditors at the 32nd Annual General Meeting.

The Report given by M/s. K A S G &Co., Chartered Accountants, Statutory Auditors on the financial statement of the Company for the year 2018-19 is part of the Annual Report. There has been no qualification, reservation or adverse remark or disclaimer in their Report.

During the year under review, the Auditors had not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3)(ca) of the Act.

COST AUDIT AND MAINTENANCE OF COST RECORD

As per the Companies (Cost Records and Audit) Rules, 2014, Cost Audit is not applicable to the Company for the financial year 2019-20.

Further, maintenance of cost record as specified by the Central Government, under sub-section-1 of Section 148 of the Companies Act, 2013 is not required.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Company had appointed Mr. Ravi Sharma., Practicing Company Secretary, FCS NO. 4468, C. P. NO. 3666 from M/s. RSM & Co. to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is included as Annexure C and forms an integral part of this report.

There is no secretarial audit qualification for the year under review.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has a proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorised use or disposition and that the transactions are authorised, recorded and reported correctly. Such internal controls are supplemented by an extensive programme of internal audits, review by management and documented policies, guidelines and procedures. These are designed to ensure that financial and other records are reliable for preparing financial information and other reports and for maintaining regular accountability of the Companys assets. The internal auditors present their report to the Audit Committee of the Board.

The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The Company has a robust Management Information System, which is an integral part of the control mechanism.

RISK MANAGEMENT

The Company has adequate risk management process to identify and notify the board of directors about the risks or opportunities that could have an adverse impact on the Companys operations or that could be exploited to maximize the gains. The processes and procedures are in place to act in a time bound manner to manage the risks or opportunities The Companys approach to addressing business risks is comprehensive and includes periodic review of such risks and a framework for mitigating controls and reporting mechanism of such risks. Bhartiya Internationals exposure to foreign currency risk is restricted to its imports and exports. These risks are minimized through well-thought-out financial operations, astute treasury management and effective use of hedge options.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

As a part of its initiative under the "Corporate Social Responsibility" (CSR) drive, the Company has undertaken projects in the field of education by mainly providing scholarship to the students and extending donations/fund towards construction/repairs and development and maintenance of school.

These projects are in accordance with the Schedule VII of the Companies Act, 2013 and the Companys CSR Policy. The report on CSR activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 is set out as Annexure D forming part of this report.

ENVIRONMENT AND SAFETY

The Company is conscious of the importance of environmentally clean and safe operations. The Companys policy requires conduct of operations in such a manner so as to ensure safety of all concerned, compliances environmental regulations and preservation of natural resources.

As required by the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, the Company has formulated and implemented a policy on prevention of sexual harassment at the work place with a mechanism of lodging complaints. Besides, redressal is placed on the intranet for the benefit of employees. Further, the Company has complied with provision relating to the constitution of Internal Complaint Committee under the Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013 (14 of 2013).

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information in accordance with the provision of Section 134 (3)(m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 for the year ended 31st March, 2019 on the Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and outgo is given in the Annexure E forming part of this report.

HUMAN RESOURCES

Bhartiya Group has been weaving the best practices into its culture to help employees develop themselves which in turn leads to increased business efficiency and turnover. Bhartiya impresses upon the need for employee engagement at all levels and invest working towards it by introducing the importance of continuous communication with people which revolves around their individual performance and also mutually working on the expectations of the management in terms of their performance and then giving them regular feedbacks which goes a long way in having a congenial work environment. We, at Bhartiya believe in open and transparent culture which helps in sharing ideas, unlearn and re-learn from each other without any hierarchical obstacles. Since innovation is one of the core value of our organization, an open culture gives our employees, wings to soar up their thought process.

In the wake of the technological advancement, Bhartiya has restored the "H" from Human Resources and continuously work towards keeping the human element in its day-to-day working, together with embracing the technology which work wonders in dealing with business complexities and keeping up with the business challenges. The reason of our strong relationship with our customers is because of our belief in our people as they are the ones who lead & are responsible for incessant innovation which gets reflected in our products.

At Bhartiya, we lead the change through our vital assets - Our People and will continue to seek success.

PARTICULARS OF EMPLOYEES

During the financial year 2018-19, the Company had 331 employees.

In terms of the provisions of Section 197(12) of the Companies Act, 2013, read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules forms part of this report.

Further, the disclosures pertaining to remuneration and other details 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, forms part of this Report.

Having regard to the provisions of the second proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the registered office of the Company during business hours on working days upto the date of ensuing Annual General Meeting. Any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. The Annual Report including the aforesaid information is also available on the Companys website.

None of the employees listed in the said Annexure is a relative of any Director of the Company. None of the employees hold (by himself or along with his spouse and dependent children) more than two percent of the equity shares of the Company.

DEMAT SUSPENSE ACCOUNT FOR UNCLAIMED SHARES

There are no unclaimed shares of the Company.

PUBLIC DEPOSIT

The Company has neither invited/ nor accepted any deposits during the year within the meaning of Section 73 of the Companies Act, 2013, read with Companies (Acceptance of Deposit) Rules, 2014.

BUSINESS RESPONSIBILITY REPORTING

The Business Responsibility Reporting as required under Regulation 34(2)(f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the Stock Exchanges is not applicable to your Company for the financial year ending 31st March, 2019.

MATERIAL CHANGES AND COMMITMENTS

There are no material changes occurred in between the financial year ended on 31st March, 2019 and date of the report of the Company which affects the financial position of the Company.

ACKNOWLEDGEMENTS

Your Directors are highly grateful for all the help, guidance and support received from the valued customers, suppliers, vendors, other business associates, various government and local authorities as well as the various Banks.

The Board places on record its appreciation for the devoted and dedicated services rendered by all the employees in taking the Company forward.

For and on behalf of the Board
Snehdeep Aggarwal
Chairman
DIN:00928080
Gurugram, 6th August, 2019

Annexure A - ESOP DISCLOSURE

Statement Pursuant to Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations, 2014

The details of the Employees Stock Option Plan, 2013 approved by the Company is valid as on date and there has been no variation in the Scheme.

A. Relevant disclosures in terms of the "Guidance note on accounting for employee share-based payments" issued by ICAI or any other relevant accounting standards as prescribed from time to time are provided on the weblink: [www. bhartiyafashion.com]

B. Diluted EPS on issue of shares in accordance with "Accounting Standard 20 - Earnings Per Share" issued by ICAI: Rs. 13.18/-

A. Details related to Employees Stock Option Plan, 2013

Name of the Scheme Employees Stock Option Plan, 2013
Date of shareholders approval September 23, 2013
Total number of options approved under ESOS 400,000
Vesting requirements The minimum vesting period shall be 1 (one) year from the date of grant and may extend upto 4 (four) years as may be determined by the Board/ Nomination and Remuneration Committee.
Exercise price or pricing formula The Exercise Price per option shall be such discounted price to the Market Price of the Equity Shares of the Company as may be determined by the Board / Nomination and Remuneration Committee.
Maximum term of options granted The options vested should be exercise within 5 years from the date of such respective vesting.
Source of shares Fresh issue of shares
Variation in terms of options None
Method used for accounting of ESOPs Intrinsic Value
Where the company opts for expensing of the options using the intrinsic value of the options, the difference between the employee compensation cost so computed and the employee compensation cost that shall have been recognized if it had used the fair value of the options shall be disclosed. Had the Compensation Cost for the Companys Stock based compensation plan been determined in the manner consistent with the Fair Value approach as described in the Guidance Note of ICAI, the Companys net Profit would be lower by Rs. 44.16 lakhs.

 

(Rs. in lakhs)
Particulars FY 2018-19
The impact of this difference on profits and on EPS of the company shall also be disclosed. Profit after tax 1,625.41
Add: Employee compensation cost as per intrinsic value 35.98
Less: Employee compensation cost as per fair value 82.82
Adjusted profit after tax 1,581.25
EPS (as reported)
- Basic 13.28
- Diluted 13.18
EPS (as adjusted)
- Basic 12.89
- Diluted 12.79

B. Details of options granted to senior managerial personnel or identified employees is as under:

Particulars Year Ended 31s> March, 2019
Senior managerial personnel 30,000
Any other employees who received a grant in any one year of Options amounting to 5% or more of the Options granted during that year. NA
Identified employees who were granted Options during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant. NA

C. The activity in the Employees Stock Option Plan during the year ended March 31,2019 is as under:

Particulars Year ended 31st March, 2019
Number of options outstanding at the beginning of the period 93,004
Number of options granted during the year 30,000
Number of options forfeited / lapsed during the year 10,566
Number of options vested during the year 38,484
Number of options exercised during the year 12,920
Number of shares arising as a result of exercise of options 12,920
Money realized by exercise of options (INR), if scheme is implemented directly by the company Rs. 64600
Loan repaid by the Trust during the year from exercise price received NA
Number of options outstanding at the end of the year 99,518
Number of options exercisable at the end of the year 42,518
Weighted average exercise price and weighted average fair value of Options granted during the year for Options whose exercise price either equals or exceeds or is less than the market price of the stock.
Options whose exercise price is less than the market price:
- Weighted average exercise price of options 330.00
- Weighted average fair value of options 216.15

A description of the method and significant assumptions used during the year to estimate the fair value of options including the following information:

- Date of Grant September 16, 2015 December 31, 2015 February 03, 2018 April 05, 2018
- Weighted average share price Rs. 468.70 Rs 521.15 Rs. 463.55 Rs. 410.15
- Exercise price Rs. 50.00 Rs. 50.00 Rs. 450.00 Rs. 330.00
- Expected volatility 46.11% 45.56% 39.22% 36.78%
- Option life (comprising of weighted average of vesting period and exercise period) 4.50 years 4.50 years 5.50 years 5.50 years
- Expected dividends 0.21% 0.19% 0.26% 0.29%
- Risk free rate of return 7.80% 7.60% 7.55% 7.22%

 

The method used and the assumptions made to incorporate the effects of expected early exercise Historical data for early exercise of Options is not accurate / uniform, hence not considered in expected life calculations.
How expected volatility was determined, including an explanation of the extent to which expected volatility was based on historical volatility; and Volatility is the measure of the amount by which a price has fluctuated or is expected to fluctuate during a period. The measure of volatility used in the Black-Scholes options pricing model is the annualized standard deviation of the continuously compounded rates of return on the stock over a period of time. For calculating volatility, the daily volatility of the stock prices on the National Stock Exchange, over twelve months period prior to the date of grant has been considered.
Whether and how any other features of the option grant were incorporated into the measurement of fair value, such as a market condition No other feature has been considered for fair valuation of options except as mentioned in the points above.

Annexure E

Information in accordance with the provision of Section 134 (3)(m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is given below:

a. Conservation of Energy

The operations of your Company are not energy intensive however the Company has undertaken several steps for energy conservation like monitoring of DG sets, using energy efficient computers and laptops, Air-conditioners are used only when required and thereby enhancing energy efficiency.

b. Technology Absorption

The Company is in fashion oriented industry. The Company relies heavily on its Italian office for design and product development. Access to Italian facilities is available for Indian operations thereby facilitating transfer of know-how.

c. Foreign Exchange Earnings & Outgo

The information on foreign exchange earnings and outgo during the year under review is provided below:

Earnings Rs. 5,775,692,577 Expenditure Rs. 1,510,140,486

For and on behalf of the Board
Snehdeep Aggarwal
Chairman
DIN:00928080
Gurugram, 6th August, 2019