Your Directors are pleased to present the 36th Annual Reports together with theAudited Accounts of the Company for the year ended on 31" March' 2016.
| ||2015-2016 ||2014-2015 |
| ||(Rs. in lacs) ||(Rs. in lacs) |
|Revenue from Operations ||2474.28 ||2356.93 |
|Net Profit Before Taxation ||625.82 ||263.04 |
|Net Profit after taxation ||431.54 ||160.68 |
|Balance of Profit & Loss Account B/F ||950.98 ||886.90 |
|APPROPRIATIONS: || || |
|Transfer to General Reserve ||15.00 ||10.00 |
|Interim Dividend Paid (@ 2.5 per Share) Previous Year @Rs. ||165.91 ||66.36 |
|1.00 per share. || || |
|Tax on Dividend ||33.98 ||10.77 |
|Depreciation related to earlier years ||0.00 ||9.47 |
|Taxes of earlier Years ||0.64 ||0.00 |
|Balance of Profit & Loss Account C/F ||1166.99 ||950.98 |
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to provisions of Section 134(5) of the Companies Act 2013 the Directorshereby state and confirm -
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed Mong with proper explanation relating t o material departures;
(b) the directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial 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 adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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 thecompany and that such internal financial controls are adequate and were operatingeffectively.
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and external consultants including audit of internal financialcontrols over financial reporting by the statutory auditors and the reviews performed bymanagement and the relevant board committees including the audit committee the board isof the opinion that the Company's internal financial controls were adequate and effectiveduring FY 2015-16.
During the year turnover of your Company slightly increased. The Export is increased byaround 20% despite decline in demand of handmade beads recession in global economyfluctuation in foreign currency and dumping by China. However due to decline in domesticsales total turn over could be increased slightly.
Based on the Company's performance during the year 2015-2016 the Board of Directorsdecided to make payment of an interim dividend of Rs. 2.50/- per share in their meetingheld on 9th March 2016 .The Board decided not to recommend any further final dividend.
TRANSFER TO RESERVES:
The Board of the directors has proposed to transfer Rs. 15.00 Lakhs to the GeneralReserve out of the amount available for appropriations and an amount of Rs 216.01 lakhs isproposed to be retained in the Profit and Loss Account after provision of proposeddividend and taxes there on and taxes of earlier year.
SETTLEMENT OF MANAGEMENT DISPUTES:
As already reported that the Special Leave Petition vide no. 25165-25166/2007 filed byShri Ajit Kumar Gupta and others against Hon'ble CLB order ni the matte r of C.P. No.14/99 is still pending before Hon'ble Supreme Court for appropriate order. The matter isstill pending before Hon'ble Supreme Court for final hearing/decision. The Management doesnot reasonably expect that the Special Leave Petition when ultimately concluded anddetermined will have a material and adverse effect on the Company's results of operationsor financial condition.
However in view of Hon'ble Supreme Court order Mr. Raj Kumar Gupta illegally statinghimself as Executive Director and CEO of ihe Company using letter head of Company andsending take and baseless letters to the Company. The Board has rejected all such illegaland baseless letters of Mr. Raj Kumar Gupta.
MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT;
Management's Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 (SEBI LODR) is presented in a separate sectionforming 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 theannual general meeting of the Company held on August 13 201S. They have submitted adeclaration that each of them meets the criteria of independence as provided in section149(6) of the Act and there has been no change in the circumstances which may affect theirstatus as independent director during the year.
Mr. Siddharth Gupta retires by rotation and being eligible has offered himself forre-appointment. If re-appointed he will continue as director and Chief Executive Officer& Managing Director of the company till 31* January 2019.
During the year the non-executive directors of the Company had no pecuniaryrelationship or transactions with the Company other than the sitting fees commission andreimbursement of expenses incurred by them for the purpose of attending meetings of theCompany.
Pursuant to the provisions of section 203 of the Act the key managerial personnel ofthe Company are Mr. Ashok Kumar Gupta Chairman & ' Managing Director Mr. SiddharthGupta Chief Executive Officer and Managing Director Smt. Shalini Chandra. ExecutiveDirector 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 performanceboard committees ana individual directors pursuant to the provisions of the Act and thecorporate governance requirements as prescribed by Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 ("SEBI ListingRegulations").
The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of the criteria such as the composition of committeeseffectiveness of committee meetings etc.
The board and the nomination and remuneration committee reviewed the performance of theindividual directors on the basis of the criteria such as the contribution of theindividual director to the board and committee meetings tike preparedness on the issues tobe discussed meaningful and constructive contribution and inputs in meetings etc. Inaddition the chairman was also evaluated on the key aspects of his role.
In a separate meeting of independent directors performance of non-independentdirectors performance of the board as a whole and performance of the chairman wasevaluated taking into account the views of executive directors and non-executivedirectors. The same was discussed in the board meeting that followed the meeting of theindependent directors at which the performance of the board its committees andindividual directors was also discussed. Performance evaluation of independent directorswas done by the entire board excluding the independent director being evaluated.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS
The Company's policy on directors' appointment and remuneration and other mattersprovided in section 178(3) of the Act has been disclosed in the corporate governancereport which forms pan of this report.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The details in respect of internal financial control and their adequacy are included inthe management discussion & analysis which forms part of this report.
The details pertaining to composition of audit committee are included in the CorporateGovernance Report which forms part of this report.
Re-APPOINTMENT OF AUDITORS AND AUDITOR REPORT:
M/s Kamal Kishore & Co. Chartered Accountants the Auditors of the Company whoare the statutory auditors of the Company and are eligible for re-appointment pursuant tothe provisions of section 139 of the Companies Act 2013 and the Rules framed there under.It is proposed to ratify reappointment of M/s Kamal Kishore & Co. CharteredAccountants as statutory auditors of the Company from the conclusion of this AGM to tillthe conclusion of the thirty seventh AGM to be held in the year 2017. They have confirmedtheir eligibility to the effect that their re-appointment if made would be within theprescribed limits under the Act and that they are not disqualified for re-appointment.
The Notes on financial statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any disqualification reservation or adverse remark.
The Board has appointed Mr. P. N. Gupta Practicing Company Secretary to conductSecretarial Audit for the financial year 2015-16. The Secretarial Audit Report for thefinancial year ended March31 2016 is annexed herewith marked as Annexure -I tothis report. The Secretarial Audit Report does not contain any qualification reservationor adverse remark.
The board of directors of the Company has formed a risk management committee to frameimplement and monitor the risk management plan for the Company. The committee isresponsible for reviewing the risk management plan and ensuring its effectiveness. Theaudit committee has additional oversight in the area of financial risks and controls.Major risks identified by the businesses and functions are systematically addressedthrough mitigating actions on a continuing basis.
The development and implementation of risk management policy has been covered in themanagement 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 Act2013and rule 12(1) of the Companies (Management and Administration) Rules 2014] as onthe financial year ended on 31.03.2016 is attached as Annexure- II with thisReport.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUT GO:
Information as per Section 134 (3) (m) of the Companies Act 2013read with Companies(Accounts) Rules 2014 are furnished as under:
a) Conservation of Energy :
The operations of the Company involve low energy consumption. The company has installedSolar Power Plant of 150 KVA. Other adequate measures are being taken to conserve theenergy.
b) Technological Absorption:
The Company has imported machines from China and Check Republic to upgrades itstechnological inputs for its products. However presently company has no collaborationarrangement with any foreign organization.
c) Foreign Exchange Earning and Outgo:
The actual foreign exchange earnings (inflow) of the Company during the financial yearhas been Rs 1796.69 lakhs from Exports of Glass Beads Hand knotted Carpets Handicraftsand other items. The actual foreign Exchange Outflow during the year has been Rs. 300.33lakhs for the import of materials foreign traveling expenses and other sales promotionalactivities.
Corporate Governance Report Management Discussion and Analysis statement and BusinessResponsibility Report and a certificate from the Auditors confirming compliance areannexed herewith to this report.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANYOCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATEAND THE DATE OF THE REPORT
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial statements relateon the date of this report.
SUBSIDIARIES JOINT VENTURES ANDASSOCIATE COMPAMES
The Company does not have any Subsidiary Joint venture or Associate Company.
NUMBER OF MEETING OF BOARD
Five Board Meetings were held during the F.Y. on 25th May'2015 30" July 201530* October 2015 25* January 2016& 9th March 2016.
STATEMENT OF DECLARATION GIVEN BY INDEPENDENT DIRECTORS U/S 149 (6).
All the Independent Directors have given their declaration as per Section 149(7) thatthey meet the criteria of independence as provided in section 149(6) of the Companies Act2013.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERAT1ON-
The current policy is to have an appropriate mix of executive and independent directorsto maintain the independence of the Board and separate its functions of governance andmanagement. As on 31.03.2016 the board consists of 6 members three of whom are executiveor whole-time directors including one woman and three are independent directors.
The policy of the company on directors appointment and remuneration including criteriafor determining qualifications positive attributes independence of a director and othermatters provided under Sub-section (3) of section 178 of the Companies Act 2013. Weaffirm that the remuneration paid to the directors is as per the terms laid out in thenomination and remuneration policy of the Company.
FIXED DEPOSITS FROM PUBLIC:
The Company have not accepted any fixed deposits and as such no amount of principalinterest was outstanding as of the balance sheet date.
PARTICULARS OF EMPLOYEES AS PER RULE 5(2) OF CHAPTER XIII THE COMPANIES(APPOINTMENT AND REMUNERATION OFMANAGERIAL PERSONNEL) RULES. 2014 -
The company did not have any employee covered by the provisions of Rule 5(2) of ChapterXIII the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
The Company has taken limit from Yes Bank of Rs. 1500.00 lakhs and the amount of loanoutstanding as on 31.3.2016 was Rs.509.03 lakhs.
DETAILS OF LOANS GIVEN INVESTMENTS MADE AND GUARANTEE GIVEN COVERED U/S 186 (4)OF THE COMPANIES
Loans given and Investments made are given under the respective heads of the BalanceSheet.
No Corporate Guarantees given by the Company in respect of loans as at 31stMarch 2016.
TRANSACTIONS WITH RELATED PARTIES.
None of the transactions with related parties falls under the scope of section 188(1)of the Act. 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 2014are given inAnnexure III in Form AOC-2 and the same forms part of this report.
Particulars of contract U/s 188
Transactions i.e. the Company's transactions that are of material nature with itsPromoters Directors and the management their relatives or subsidiaries among othersthat may have potential conflict with the Company's interests at large.
During the period under review the Company had not entered into any materialtransaction with any of its related parties that may have potential conflict with theCompany's interests at large. None of the transactions with any of related parties were inconflict with the Company's interest. Attention of members is drawn to the disclosure oftransactions with related parties set out in Note No. 27 of Financial Statements formingpart of the Annual Report. The related party transactions are entered into based onconsiderations of various business exigencies such as synergy in operations sectoralspecialization and the Company's long-term strategy for sectoral investments optimizationof market share profitability legal requirements liquidity and capital resources ofsubsidiaries and associates.
All related party transactions are negotiated on an arm's length basis and areintended to further the Company's interests.
CORPORATE SOCIAL RESPONSIBILITY
The Provision of Social Responsibility is not applicable to the Company.
EVALUATION REPORT ON CAPITAL
The Provision of Evaluation on Capital is not applicable to the Company. Besides thatthe Board met time to time and appraised performance of the Company. The ways and meanswere made to increase the business and growth of the Company.
INCREASE IN PAID-UP CAPITAL-
During the year six shareholders calls in arrears amount Rs.3000 have been realised.After giving effect of said receipt the paid-up capital changed/ increased to Rs.66137720 from Rs.66134720. The balance calls in arrears are @ Rs. 5 per share on 44900shares amounting Rs. 224500/-
MATERIAL CHANGES :
No material changes were made during the year which affects the financial andcommitments of the Company.
INTERNAL FINANCIAL CONTROLS:
The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weakness in the design or operation were observed.
CREDIT RATING :
The company had been recognized/rated as " ICRA SME 2" by ICRA Ltd.will be expired on 22.07.2016 and the same is under renewal process.
TRADING OF SHARES UNDER "B" GROUP:
The shares of your Company are presently being traded with BSE and NSE Stock Exchangesunder "B" Group.
The Directors wish to place on record their sincere appreciation of the devoted andefficient services rendered by all officers employees and others associated with theCompany.
| ||By order of the Board of Directors |
| ||For BANARAS BEADS LTD. |
| ||Sd/- |
|Place : VARANAS1 ||(Ashok Kumar Gupta) |
|Date :26 05. 2016 ||Chairma n &Managing Director |