Your directors have pleasure in presenting their Eighteenth Annual Report together withthe Audited Accounts for the year ended on 31st March 2017.
1. FINANCIAL RESULTS
|Particulars ||March 31 2017 ||March 31 2016 |
|Income from Operations ||64.84 ||785.06 |
|Other Income ||146.27 ||124.18 |
|Total Income ||211.11 ||909.24 |
|Total Expenditure ||156.83 ||886.93 |
|Profit /(Loss) before Finance Charges Depreciation and Tax ||54.28 ||22.31 |
|Finance Charges ||0.72 ||0.38 |
|Profit /(Loss) after interest but before Depreciation ||53.56 ||21.93 |
|Depreciation ||12.87 ||14.31 |
|Profit /(Loss) before Tax ||40.69 ||7.62 |
|Exceptional items ||(30.63) ||-- |
|Provision for Tax || || |
|- Current Tax ||-- ||-- |
|- Deferred Tax ||-- ||-- |
|Prior period Taxes ||-- ||3.24 |
|Net Profit /(Loss) for the Year ||10.06 ||4.38 |
|Profit /(Loss) brought forward from previous year ||1277.85 ||1273.47 |
|Transitional Depreciation ||-- ||-- |
|Transfer to Capital Redemption Reserves ||258.00 ||-- |
|Profit available for Appropriations ||1029.91 ||1277.85 |
|Appropriations ||-- ||-- |
|Balance Profit /(Loss) carried forward to Balance Sheet ||1029.91 ||1277.85 |
On account of negligible profit during the year your directors have not recommendedany dividend on equity shares for the year ended on 31st March 2017.
3. REVIEW OF OPERATIONS
During the year under review income from Post Production activity decreased to 19.84Lac from 21.69 Lac in the previous year. Income from trading in IPR of Films/Productionand Distribution of Films and TV Serials decreased to Rs. 45 Lac from Rs. 763.36 Lac inthe previous year. Major source of revenue for the Company was Interest Income at Rs.144.76 Lac. Your Company earned Net Profit of Rs.10.06 Lac vis--vis Net Profit of Rs.4.38 Lac in the previous year after providing for Depreciation of Rs. 12.87 Lac (PreviousYear Rs. 14.31 Lac).
4. TRANSFER TO RESERVES
Your directors have decided to retain full profits for the year under review andcarried forward the same as Retained Earnings.
During the year under review pursuant to buy back of 25800000 equity shares of theface value of Re. 1/- each at a price of Rs. 3/- per share your directors havetransferred an amount of Rs. 25800000 from profit and loss account to CapitalRedemption Reserves. A sum of Rs. 51600000 has been utilized out of Securities PremiumAccount towards premium paid on buy back of shares.
5. CHANGES IN NATURE OF BUSINESS IF ANY
There is no change in the nature of business during the year under review
6. MATERIAL CHANGES BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THIS REPORT
There have been no material changes and commitments affecting the financial positionof the Company which have occurred between the end of the financial year of the Companyto which the financial statements relate and the date of signing of this report.
7. BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
In terms of Section 152 of the Companies Act 2013 Shri Gordhan P. Tanwani (DIN00040942) Director retires by rotation at the forthcoming AGM and is eligible forre-appointment. Shri Gordhan P. Tanwani has offered himself for re-appointment.
?KEY MANAGERIAL PERSONNEL
The Board of Directors appointed Shri Ajay D. Acharya as Chief Financial Officer (CFO)of the Company with effect from 16th September 2016.
?DECLARATIONS BY INDEPENDENT DIRECTOR(S)
The Company has complied with Regulation 25 of the Securities and Exchange Board ofIndia (Listing Obligations
& Disclosure Requirements) Regulations2015 (Listing Obligations) and provisions ofSection 149(6) of the Companies Act 2013. The Company has also obtained declarations fromall the Independent Directors pursuant to Section 149(7) of the Companies Act 2013.
?ANNUAL EVALUATION OF BOARD
The Nomination & Remuneration Committee of the Board has laid down the evaluationcriteria for the performance of Executive/Non Executive / Independent Directors through aBoard effectiveness survey. A questionnaire of the survey is designed with the objectiveof reviewing the functioning and effectiveness of the Board. Each Board member isrequested to evaluate the effectiveness of the members of the Board (other than theDirector being evaluated) on the basis of information flow decision making of thedirectors relationship to stakeholders Company performance Company strategy and theeffectiveness of the whole Board and its various committees on a scale of one to five.
Evaluation of Independent Directors is done on the basis of their role in GovernanceControl and Guidance and more particularly their performance in the following areas:
Their contribution towards monitoring the Company's corporate governancepractice
Their participation in formulating business strategies and
Their participation in Board and Committee meetings and generally fulfillingtheir obligations and fiduciary responsibilities as Directors of the Company.
The details of training and familiarization programmes and Annual Board Evaluationprocess for directors have been provided under Corporate Governance Report.
8. BOARD AND COMMITTEES INDEPENDENT DIRECTORS
The Company's Board comprises of 50% Independent Directors in line with requirement ofSEBI Listing Obligations. Shri Santosh A Shah and Shri Sanjiv L Hinduja are IndependentDirectors.
Eight (8) Board Meetings were convened and held during the year. The intervening gapbetween two meetings was less than the period prescribed under the Companies Act 2013Secretarial Standard-1 on Board Meetings and Listing Obligations.
The Board has constituted an Audit Committee with Shri Santosh A. Shah as Chairman andShri Sanjiv L. Hinduja and Smt. Malavika A. Acharya as members. There have been noinstances during the year when recommendation of the Audit Committee were not accepted bythe Board.
?NOMINATION AND REMUNERATION COMMITTEE
The Board has constituted Nomination & Remuneration Committee comprising of ShriSanjiv L. Hinduja as Chairman Shri Santosh A. Shah and Smt. Malavika A. Acharya asmembers. The terms of reference of the Nomination & Remuneration Committee are set outin the Corporate Governance Report.
9. POLICY ON DIRECTORS APPOINTMENT & REMUNERATION
The Board has in accordance with the provisions of Sub-Section (3) of Section 178 ofthe Companies Act 2013 formulated a policy setting out the criteria for determiningqualifications positive attributes independence of a director and policy relating toremuneration for Directors Key Managerial Personnel and other employees. The text of thepolicy is available on the website of the Company www.babaartslimited.com.
10. RISK MANAGEMNET POLICY
The Company has a Risk Management Committee with defined roles & responsibilities.The committee is constituted in compliance of requirement under Listing Obligations. Thedetails of Committee and its terms of reference are set out in the Corporate GovernanceReport.
11. VIGIL MECHANISM /WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy to provide a formal vigil mechanism tothe directors and employees to report their concerns about unethical behaviour actual orsuspected fraud or violation of the Company's code of conduct or ethics policy. The policyprovides for adequate safeguards against victimization of employees who avail of themechanism and also provides for direct access to the Chairperson of the Audit Committee.It is affirmed that no personnel of the Company has been denied access to the AuditCommittee.
12. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS ANDOUTGO:
Conservation of Energy
Your Company's activities do not require substantial energy consumption. However theCompany continues to lay emphasis on reducing energy consumption by constantly monitoringthe consumption and taking steps to reduce wasteful use of energy.
The Company is engaged in providing post production services to entertainment industryin its post production studio and creating content for Television and also in filmproduction and distribution where there is not much scope for exports. The Company isselling overseas rights of films to domestic distributors. The Company did not have anyexport income during the year.
Foreign Exchange Earning Nil
Foreign Exchange Outgo Nil
Research & Development Technology Absorption Adoption and Innovation
The Company has not under taken any Research & Development activity. In theCompany's business the scope for new technology absorption adoption and innovation isvery limited.
13. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS
IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
There were no orders passed by regulators or courts or tribunals impacting the goingconcern status and Company's operations in future.
14. DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with Section 134(5) of the Companies Act 2013 your board of directorsconfirms that:
i) in the preparation of the annual accounts the applicable accounting standards havebeen followed and there are no material departures from the said standards;
ii) the accounting policies have been consistently applied and reasonable and prudentjudgment and estimates have been made so as to give a true and fair view of the profit ofthe Company for the year ended on 31st March 2017 and the state of affairs of the Companyas at 31st March 2017 as disclosed in the enclosed accounts;
iii) proper and sufficient care has been taken for maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
iv) the annual accounts have been prepared on a going concern basis.
v) They have laid down internal financial controls for the Company and such financialcontrols are adequate and operating effectively; and
vi) They have devised proper systems to ensure compliance with provision of allapplicable laws and such systems are adequate and operating effectively.
15. INTERNAL CONTROL SYSTEM
The Company has in place adequate internal financial controls with reference tofinancial statements.
The Internal Auditor continuously monitors the efficiency of the internalcontrols/compliance with the objective of providing to Audit Committee and the Board ofDirectors an independent objective and reasonable assurance of the adequacy andeffectiveness of the organization's risk management control and governance processes.This system of internal control facilitates effective compliance of Section 138 ofCompanies Act 2013 and the SEBI(Listing Obligations and Disclosure Requirements)Regulations 2015.
During the year such controls were tested and no reportable material weakness in thedesign or operation was observed.
16. DETAILS IN RESPECT OF ADEQUECY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS:
With respect to the adequacy of the Internal Financial controls over financialreporting of the Company and the operating effectiveness of such controls refer Annexureof the Audit report.
M/s. Prakkash Muni & Associates (Firm Regn. No. 111792W) Chartered Accountantswere appointed as Statutory Auditors of the Company at the 15th Annual General Meetingheld on 22nd September 2014 as Auditors for a period 3 years until the conclusion of 18thAnnual General Meeeting in year 2017. They have completed the maximum term permitted underSection 139 of the Companies Act 2013 and the Rules made there under and hence it ismandatory for the Company to rotate the Statutory Auditors and appoint new Auditors inplace of M/s. Prakkash Muni & Associates. The Audit Committee in its meeting held on27th July 2017 has recommended and the Board of Directors has proposed the appointment ofM/s. Arunkumar K. Shah & Co. Chartered Accountants as Statutory Auditor for a periodof 5 consecutive years from the conclusion of the 18th Annual General Meeting scheduled tobe held on 19th September 2017 till the conclusion of the 23rd Annual General Meeting ofthe Company subject to ratification of their appointment at every subsequent AnnualGeneral Meeting. The first year of Audit of Accounts by M/s. Arunkumar K. Shah & Co.will be for financial year ending on 31st March 2018.
The proposed Auditor have confirmed his eligibility under Section 141 of the CompaniesAct 2013 and the rules made thereunder. As per Regulation 33 of the Securities andExchange Board of India (Listing Obligations & Disclosure Requirements)Regulations2015 (Listing Obligations) the auditors have also confirmed that they hold avalid certificate issued by the Peer Review Board of the Institute of CharteredAccountants of India.
Members are requested to approve the proposed resolution seeking appointment of M/sArunkumar K. Shah & Co. as set out in the notice convening the 18th Annual GeneralMeeting and authorize the Board of Directors to fix their remuneration.
18. EXTRACT OF ANNUAL RETURN
An extract of the Annual Return as of 31st March 2017 pursuant to the sub-section (3)of Section 92 of Companies Act 2013 is appended as an Annexure I to this report.
19. SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company withapproval of Board appointed M/s Dholakia & Associates LLP Company Secretaries inpractice to undertake the Secretarial Audit of the Company for the financial year 2016-17.The Detailed Report on Secretarial Audit is appended as an Annexure II to this Report.There is no qualification reservation or adverse remarks give by Secretarial Auditors ofthe Company.
20. PARTICULARS OF LOAN GUARANTEE AND INVESTMENTS
The particulars of loans/advances guarantees and investments under Section 186 of theCompanies Act 2013 are given in the notes forming part of the Financial Statements.
21. CORPORATE GOVERNANCE
A separate report on Corporate Governance is provided together with a Certificate fromStatutory Auditors of the Company regarding compliance of conditions of CorporateGovernance as stipulated under Schedule V of the SEBI (Listing Obligations &Disclosure Requirements) Regulations 2015. A certificate of the Managing Director interms of Regulation 17(8) as specified in Part B of Schedule II of SEBI (ListingObligations & Disclosure Requirements) Regulations2015 inert alia confirming thecorrectness of the financial statements and cash flow statements adequacy of the internalcontrol measures and reporting of matters to the Audit Committee is also annexed.
22. SEXUAL HARASSMENT
The Company did not receive any complaint of sexual harassment at workplace during theyear under review.
Your Company has not invited / accepted any deposits from public under Section 73 andSection 76 of the Companies Act 2013.
24. RELATED PARTY TRANSACTIONS
In line with the requirements of the Companies Act 2013 and SEBI(Listing Obligationsand Disclosure Requirements) Regulations 2015 your Company has formulated a Policy onRelated Party Transactions which is also available on Company's website atwww.babaartslimited.com.
The Company has not entered into any transactions with related parties in accordancewith the Accounting Standard 18 prescribed by the Institute of Chartered Accountants ofIndia.
25. DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIALRESPONSIBILITY
The Company has not developed and Implemented any Corporate Social Responsibility (CSR)initiatives as the said provisions of section 135 of the Companies Act 2013 are notapplicable.
26. PARTICULARS OF EMPLOYEES
The Company did not have any employee drawing remuneration exceeding the limitprescribed under Section 197of the Companies Act 2013 and the Companies (Appointment& Remuneration of Managerial Personnel) Rules 2014.
27. SHARE CAPITAL
The Company has only one class of shares viz. equity shares with a face value of Re.1/- each.
?ISSUE OF EQUITY SHARES WITH DIFFERENTIAL RIGHTS
The Company has not issued equity shares with differential rights during the year underreview.
?ISSUE OF SWEAT EQUITY SHARES
The Company has not issued Sweat equity shares during the year under review.
?ISSUE OF EMPLOYEE STOCK OPTIONS
The Company has not issued any Employee Stock Options shares during the year underreview.
?BUY BACK OF SHARES
During the year under review the Company completed Buy back of 25800000 equityshares of Re.1/- each at price of Rs.3/- per equity share aggregating to Rs.774 Lacs. TheBuyback of Shares from the shareholders of the Company was on proportionate basis throughthe Tender Offer Mechanism as prescribed under the Securities and Exchange Board ofIndia(Buy-back of Securities) Regulations 1998 as amended. Post buy back theoutstanding capital as on 31st March 2017 is Rs. 77400000 comprising of 77400000equity shares of Re. 1/- each.
Share Capital audit as per the directives of Securities & Exchange Board of Indiais being conducted on quarterly basis by Dholakia & Associates LLP CompanySecretaries and the Audit Reports are duly forwarded to BSE Limited where the shares ofthe Company are listed.
28. SUBSIDIARY JOINT VENTURES AND ASSOCIATE COMPANIES.
The Company does not have any Subsidiary Joint Venture and Associate Company.
The Board wishes to thank all the Company's customers film producers artists andtechnicians satellite channels and Company's bankers who have extended their continuoussupport to the Company.
Your Directors specially thank the shareholders of the Company for having reposed theirconfidence in the management of the Company and employees and technicians of the Companyat all levels for their dedicated services to the Company and the contribution made bythem towards working of the Company.
| ||For and On behalf of the Board of Directors |
| ||Gordhan P. Tanwani |
| ||Chairman & Managing Director |
|Place : Mumbai || |
|Date :27th July 2017 || |