TO THE MEMBERS OF
BHALCHANDRAM CLOTHING LIMITED
Your Company s Directors the take pleasure in presenting the 12th Director s Reportalong with Audited Financial Statements of your Company for the Financial Year ended 31stMarch 2017.
The financial performance of the Company for the year ended March 31 2017 issummarized below:
| || ||(in Rs.) |
|Particulars ||Current year ||Previous Year |
|Sales ||37758100 ||88180150 |
|Other Income ||1459728 ||977667 |
|Total Income ||39217828 ||89157817 |
|Less: Operating and Admin. Expenses ||39061686 ||88098609 |
|Profit/Loss Before Tax ||156142 ||1059208 |
|Depreciation ||0 ||0 |
|Tax || || |
|Current Tax ||51600 ||253620 |
|Tax adjustment of earlier years ||0 ||0 |
|Deferred Tax ||0 ||0 |
|Profit/(Loss) after Tax ||104542 ||805588 |
|Earnings per share (Rs.) : Basic ||0.19 ||1.44 |
|Diluted ||0.19 ||1.44 |
Results of Operations
During the year under review your Company has reported a total income of Rs.392.17lakhs as compared to previous years proceeds of Rs. 891.57 lakhs. The Company has seen aconsiderable decline in sales as the Cotton textile Industry has had a general slow downin the market.
Owing to inadequacy of profit no Dividends are recommended for the year under review.
Transfer to Reserves
Since the there is no dividend for the year under review transfer of funds to thereserves is not required.
Nature of Business and Changes therein
The Company is engaged in the business of trading of Cotton textiles and to specializein the export of quality Cotton Yarns and fabrics. The Company covers a wide variety ofCotton Yarns including carded & combed ring spun yams of coarse & fine counts plyyarns special yarns and grey fabrics.
Management Discussion and Analysis Report
As per the provisions of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Management Discussion and Analysis of the financial condition andresults of consolidated operations of the Company under review is annexed and forms anintegral part of the Annual Report.
Subsidiary Companies Joint Ventures and Associate Company
The Company does not have any subsidiary Company Joint Venture or Associate Companyand no such Company ceased to exist as per the provisions of Section 2(87) of theCompanies Act 2013 as on 31st March 2017.
During the year under review your Company did not accept any deposits in terms ofSection 73 of the Companies Act 2013 read with the Companies (Acceptance of Deposit)Rules 2014. No amounts were outstanding which were classified as Deposits under theapplicable provisions of Companies Act 2013 as on the date of Balance Sheet and hencethe requirement for furnishing of details of deposits which are not in compliance with theChapter V of the Companies Act 2013 is not applicable.
Particulars of Contracts or Arrangements with Related Parties
The Section 188 of the Companies Act 2013 read with the Companies (Meetings of Boardand its Powers) Rules 2014 specifies the requirement for approval of the Board and/or theMembers as and when applicable in related party transactions in relation tocontracts/arrangements.
During the year under review the Company has not entered into related partytransactions as per the provisions of Section 188 of the Companies Act 2013. Transactionswith the related parties consist off only unsecured loans accepted which are outside thepurview of section 188 of the Act hence disclosure in Form AOC-2 is not required.
Particulars of Loans Guarantees and Investments
The Company has not provided any Loans Guarantees during the year.
Board of Directors and Key Managerial Personnel
As on the date of this report the Company s Board consists of the followingIndependent Directors:
1. Mr. Prakash R Bang
2. Mr. Mahesh M Bhattad
3. Ms. Meghna V Panchal
There has been no new appointments on the Board Of Directors during the Financial Year2016-17.
2. Retire by rotation and Re-appointments
Mr. Umesh Lahoti (DIN: 00361216) Director retire by rotation at the forthcoming AnnualGeneral Meeting and being eligible offers himself for reappointment.
Committees of Board
The Board has 3 Committees: Audit Committee Stakeholder s Relationship Committee andNomination and Remuneration Committee. A detailed note on the functions of the Board andCommittee are provided hereunder. The Composition of the Committees are as follows:
1. Audit Committee
The Company has constituted the Audit committee ("Audit Committee") as perthe provisions of Section 177 of the Companies Act 2013
The Audit Committee comprises of the following members:
|Name of the Director ||Designation in the Committee |
|Mr. Prakash R Bang (Independent Director) ||Chairman |
|Mr. Mahesh M Bhattad (Independent Director) ||Member |
|Mr. Umesh R Lahoti (Executive Director) ||Member |
All the members are financially literate and have accounting / related financialmanagement expertise.
The Audit Committee advises the Management on the areas where internal control systemcan be improved. The Company has appointed Mittal & Mittal. Chartered Accountants asInternal Auditors to review and report on the internal control system. The report of theinternal auditors is reviewed by the Audit Committee. The Internal Auditors submits theirrecommendations for the Audit Committee and provides their road map for future action.
The Role function responsibility and constitution of the Audit Committee is inaccordance to the provisions of Section 177 of the Companies Act 2013 and as per SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
The Audit Committee functions according to its Charter that defines its compositionauthority responsibilities and reporting functions. The terms of reference of the AuditCommittee inter alia includes the following function:
To investigate any activity within its terms of reference.
To seek information from any employee
To obtain outside legal or other professional advice
To secure attendance of outsiders with relevant expertise if it considersnecessary
Oversight of the Company's financial reporting process and the disclosure of itsfinancial information to ensure that the financial information is correct sufficient andcredible.
Recommending to the Board of Directors the appointment re-appointment and ifrequired the replacement or removal of the statutory auditor and the fixation of auditfees.
Approval of payment to statutory auditors for any other services rendered by thestatutory auditors
Reviewing with the management the annual financial statements beforesubmission to the Board of Directors for approval with particular reference to:
a. Matters required to be included in the Directors' Responsibility Statement to beincluded in the Director's report in terms of clause (2AA) of section 217 of the CompaniesAct 1956.
b. Changes if any in accounting policies and practices and reasons for the same
c. Major accounting entries involving estimates based on the exercise of judgment bymanagement.
d. Significant adjustments arising out of audit.
e. Compliance with listing and other legal requirements relating to financialstatements.
f. Disclosure of any related party transactions.
g. Qualifications in the draft audit report.
Reviewing with the management the half-yearly financial statements beforesubmission to the Board of Directors for approval.
Reviewing with the management the statement of uses / application of fundsraised through an issue.
Reviewing with the management performance of statutory and internal auditorsand adequacy of the internal control systems.
Reviewing the adequacy of internal audit function if any including thestructure of the internal audit department staffing and seniority of the officialheading the department reporting structure coverage and frequency of internal audit.
Discussion with internal auditors any significant findings and follow up thereon.
Reviewing the findings of any internal investigations by the internal auditorsinto matters where there is suspected fraud or irregularity or a failure of internalcontrol systems of a material nature and reporting the matter to the Board of Directors.
Discussion with statutory auditors before the audit commences about the natureand scope of audit as well as post-audit discussion to ascertain any area of concern.
To look into the reasons for substantial defaults in the payment to thedepositors debenture holders shareholders (in case of non-payment of declared dividends)and creditors.
To review the functioning of the Whistle Blower mechanism in case the same isexisting.
Approval of appointment of CFO (i.e. the whole-time Finance Director or anyother person heading the finance function or discharging that function) after assessingthe qualifications experience & background etc. of the candidate.
Carrying out any other function as mentioned in the terms of reference of theAudit Committee. In addition to the above carry out such other functions/powers as may bedelegated by the Board of Directors to the Committee from time to time.
2. Stakeholder s Relationship Committee
The Stakeholder s Relationship Committee comprises of the following members:
|Name of the Director ||Designation in the Committee |
|Mr. Mahesh M Bhattad (Independent Director) ||Chairperson |
|Mr. Ujwal R Lahoti (Managing Director) ||Member |
|Mr. Umesh R Lahoti (Executive Director) ||Member |
The terms of reference of Shareholders / Investors Grievance Committee complies withrequirements of as per SEBI (Listing Obligations And Disclosure Requirements) Regulations2015 and as per the provisions of Section 178 of the Companies Act 2013. Mr. Mahesh R.Bhattad is the Chairman of Shareholders / Investors Grievance Committee.
The terms of reference of Stakeholders Relationship Committee inter alia includes thefollowing:
Redressal of Shareholders debenture holders and other security holdersinvestors complaints including complaints related to transfer of shares;
Allotment of shares approval of transfer or transmission of shares debenturesor any other securities;
Issue of duplicate certificates and new certificates onsplit/consolidation/renewal;
Non-receipt of declared dividends balance sheets of the Company; and
Carrying out any other function as prescribed in the Listing Regulations.
3. Nomination and Remuneration Committee:
The Nomination and Remuneration Committee comprises of the following:
|Name of the Director ||Designation in the Committee |
|Ms. Meghna V Panchal (Independent Director) ||Chairperson |
|Mr. Mahesh M Bhattad (Independent Director) ||Member |
|Mr. Prakash R Bang (Independent Director) ||Member |
In compliance with Section 178 of Companies Act 2013 and Regulation 19 of SEBI(LODR)Regulations the Board Constituted the Nomination and Remuneration Committee comprising ofThree Non-Executive Independent Directors of the company with the following Roles andfunctions:
To lay down criteria and terms and conditions with regard to identifying personswho are qualified to become Directors (Executive and Non-Executive) and persons who may beappointed in Senior Management and Key Managerial positions to determine theirremuneration.
To determine their remuneration based on the company s size and and financialposition and trends and practices on remuneration prevailing in peer companies.
To formulate criteria for evaluation and carry out evaluation of performance ofdirectors as well as Key Managerial Independent Directors and Senior ManagementPersonnel.
To provide them reward linked directly to their effort performance dedicationand achievement relating to company s operations.
To retain motivate and promote talent and to ensure long term sustainability oftalented managerial persons and create competitive advantage.
To ensure no violation by an employee of any applicable laws in India oroverseas including:
i) The Securities Exchange Board of India (Insider Trading) Regulations 1992; or
ii) The Securities Exchange Board of India (Prohibition of Fraudulent and Unfair TradePractices relating to the Securities Market) Regulation1995.
To formulate detailed terms and conditions of employee stock option schemesincluding details pertaining to quantum of options to be granted conditions for lapsingof vested options exercise period adjustments for corporate actions and procedure forcashless exercise and such other functions as are required to be performed by theRemuneration Committee under the Securities Exchange Board of India(Employee Stock OptionScheme and Employee Stock Purchase Scheme) Guidelines 1999 as amended ( ESOP Guidelines) in particular those stated in Clause 5 of ESOP Guidelines; as and when required.
To devise a policy on Board Diversity.
To identifying persons who are qualified to become directors and may beappointed on senior management in accordance with the criteria laid down and recommend tothe board their appointment and removal.
To develop a succession plan for the Board and to regularly review the plan.
Declaration by Independent Directors
Mr. Prakash R Bang Ms. Meghna V Panchal and Mr. Mahesh M Bhattad are the IndependentDirectors on the Board of the Company. The Company has received the declaration from allthe Independent Directors confirming that they meet the criteria as set out in theprovisions of Section 149(6) of the Companies Act 2013 and SEBI (Listing Obligations AndDisclosure Requirements) Regulations 2015.
Vigil Mechanism/Whistle Blower
The Vigil Mechanism as envisaged in the Companies Act 2013 and the Rules prescribed isimplemented through the Whistle Blower Policy to provide for adequate safeguards againstvictimization of persons who use such mechanism and make provision for direct access tothe Chairperson of the Audit Committee. This vigil mechanism has been formulated with aview to provide a mechanism for Directors/ Employees of the Company to approach the ChiefEthics Officer of the Company or Chairperson of the Audit Committee of the Company orChairman of the Company or Corporate Governance Cell.
Company has made arrangements of vigil mechanism under which company has formed somerules regulation & code of Conducts. All these mechanisms are for proper & fluentworking of the business activities. Following are the Objectives of Vigil Mechanism:
To encourage employees to bring ethical and legal violations they are aware ofto an internal authority so that action can be taken immediately to resolve the problem
To minimize the organization s exposure to the damage that can occur whenemployees circumvent internal mechanisms
To let employees know the organization is serious about adherence to codes ofconduct.
To support this Vigil Mechanism of the Company in full measure members are requestedto send their opinion Suggestions or complaints on following address:
Add.: 307 Arun Chambers Tardeo Road Mumbai - 400034
E-mail Id: email@example.com
Directors Responsibility Statement
Pursuant to sub-section (5) of Section 134 of the Companies Act 2013 and to the bestof their knowledge and belief and according to the information and explanations obtained/received from the operating management your Directors make the following statement andconfirm that-
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe 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;
(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; and
(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.
Auditors and Auditors Report
S.R. Marda & Co. Chartered Accountants (FRN: 114092W) Statutory Auditors haveresigned w.e.f. 22nd August 2017 from their position of Statutory Auditors of the Companydue to preoccupation resulting in casual vacancy in the office of Statutory Auditors interms of Section 139(8) of the Companies Act 2013.
The Board in their meeting held on 23rd August 2017 recommend the appointment ofLahoti Navneet & Company Chartered Accountants (ICAI FRN: 116870W). The company hasreceived a confirmation letter from the Auditors to the effect that their appointment ifmade will be within the prescribed limits of Companies Act 2013 and that they are notdisqualified for appointment within the meaning of the said Act. As required under(Listing Obligations and Disclosure Requirements) Regulations 2015 the Auditors havealso confirmed that they hold a valid peer certificate issued by the Peer Review Board ofthe Institute of Chartered Accountants of India (ICAI).
Pursuant to provisions of Section 139(1) of the said Act the Board recommends theirappointment as Auditors for 5 years i.e. from the conclusion of 12th Annual GeneralMeeting till the conclusion of Sixth Annual General Meeting to be held after this AnnualGeneral Meeting i.e. 17th Annual General Meeting.
Being the Statutory Auditors for the Financial Year 2016-17 S.R. Marda & Co.Chartered Accountants Solapur have audited the Books of Accounts of the company
The observations made in the Auditors Report read together with relevant notes thereonare self explanatory and hence do not call for any further comments under Section 134 ofthe Companies Act 2013.
The notes on accounts referred to the Auditor s Report are self explanatory and therehas been no qualification/ remark made thereunder and therefore the same does not call forany further comments/explanation from the Directors.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Atul Kulkarni and Associates a Practicing Company Secretary to undertake theSecretarial Audit of the Company. The Report of the Secretarial Audit Report forms part ofthis report as Annexure 1 .
Equity Shares with Differential Rights.
The Company has not issued any equity shares with differential rights / sweat equityshares/ employee stock options or not made any provision of its own shares by employees orby trustees for the benefit of employees during the financial year 2016-2017
The Company has not made any purchase or provision of its own shares by employees or bytrustees for the benefit of employees during the financial year 2016-2017.
Disclosure of Remuneration paid to Director and Key managerial personal
The table containing the names and other particulars of employees in accordance withthe provisions of Section 197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is appendedas Annexure 2 to the Board's report.
Significant and Material Orders
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.
Extracts of Annual Return
As per the provisions of Section 134(3)(a) of the Companies Act 2013 an extract ofthe annual return in the prescribed format in Form MGT-9 is annexed to this Board s Reportas Annexure 3.
Number of meetings of the board and audit committee
1. Board of Directors Meetings.
During the Financial Year 2016-17 the Company held 4 board meetings of the Board ofDirectors as per Section 173 of Companies Act 2013 which is summarized below. Theprovisions of Companies Act 2013 and listing agreement were adhered to while consideringthe time gap between two meetings.
|S No. Date of Meeting ||Board Strength ||No. of Directors Present |
|1 30/05/2016 ||5 ||5 |
|2 16/08/2016 ||5 ||5 |
|3 09/11/2016 ||5 ||5 |
|4 14/02/2017 ||5 ||5 |
2. Meeting of Audit Committee.
Audit Committee Meetings were convened and held on 30/05/2016 16/08/2016 09/11/2016and 14/02/2017.
3.Meeting of Stakeholders Committee.
Stakeholder Relationship Committee Meetings were convened and held on 30/05/201616/08/2016 09/11/2016 and 14/02/2017.
Annual Evaluation of the Board
As per the provisions of the Companies Act 2013 the Board has carried out an annualperformance evaluation of its own performance of its individual performance as well as ofthe Board as whole.
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The remuneration is decided after considering various factors such asqualification experience performance responsibilities shouldered industry standards aswell as financial position of the Company.
Explanation or comments by the board on qualifications reservations or adverse remarksor disclaimer made
Auditors report read with notes to Financial Statements are self explanatory and do notcall for any further comments.
The particulars as prescribed under sub-section (3)(m) of Section 134 of the CompaniesAct 2013 read with the Companies (Accounts) Rules 2014 as amended up-to-date are setout hereunder:
Energy Conservation Measures Technology Absorption and R & D Efforts and ForeignExchange Earnings and Outgo
Your Company is not engaged in any manufacturing activity and thus its operations arenot energy intensive. However adequate measures are always taken to ensure optimumutilization and maximum possible saving of energy. The Company has installed energyconservative equipment s like LED (Light Emitting Diode) lights instead of CFL (CompactFluorescent Lamp).
The Company has maintained a technology friendly environment for its employees to workin. Your Company uses latest technology and equipment s. However since the Company is notengaged in any manufacturing the information in connection with technology absorption isNIL.
Foreign Exchange Earnings and Outgo:
During the period under review the Company has earned Foreign Exchange of Rs.36687517/- when compared to previous year earning of Rs. 85639313/-. There has been no outgo.
Code of conduct:-
Principles Practices and Values
Your Company is committed to the principles of effective corporate governance. Webelieve that adherence to these principles is essential to maintaining shareholder trustand securing long-term growth. We are of the opinion that growth governance empowermenttransparency compliance are all equally relevant and applicable to businesses - not justto Government.
Thus the Corporate Governance practices of the Company provide transparency indisclosures of the Company s activities business plans operating results and futurestrategy.
Obligation of company under the sexual harassment of women at workplace (preventionprohibition and redressal) act 2013
In order to prevent sexual harassment of women at work place a new act The SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 hasbeen notified on 9th December 2013. Under the said Act every company is required to setup an Internal Complaints Committee to look into complaints relating to sexual harassmentat work place of any women employee.
Company has adopted a policy for prevention of Sexual Harassment of Women at workplaceand has set up Committee for implementation of said policy. During the year Company hasnot received any complaint of harassment.
Internal Financial Control
The Board has adopted the policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial disclosures.
Risk management is the identification assessment and prioritization of risks followedby coordinated and economical application of resources to minimize monitor and controlthe probability and/or impact of unfortunate events or to maximize the realization ofopportunities. Risk management s objective is to assure uncertainty does not deflect theendeavor from the business goals.
The Company is in the process of laying down procedures to inform the members of theBoard about the risk assessment and minimization procedures.
Corporate social responsibility
The Corporate Social Responsibility criteria is not applicable to the Company.
Details of Significant and Material orders passed by the regulators or Courts ortribunals impacting the going concern status and Company s operations in future
No significant and Material Orders passed by the Regulatory authority or Court ofTribunals impacting the going concern Status and Company s operation in future during thefinancial year ended 31st March 2017.
Business responsibility report
Business responsibly report is applicable to top five hundred listed companies based onmarket capitalization as on 31st March 2017 therefore business responsibility report isnot applicable for this company.
Report on Corporate Governance
As SEBI (LODR) Regulations 2015 report on Corporate Governance is applicable to alllisted company except listed on SME Exchange or ITP Platform therefore report on CorporateGovernance is not applicable to your Company as it is listed on ITP Emerge Platform.
Your Directors wish to express their grateful appreciation for co-operation and supportreceived from customers financial institutions Banks regulatory authorities customersvendors and members and the society at large.
Deep sense of appreciation is also recorded for the dedicated efforts and contributionof the employees at all levels as without their focus commitment and hard work theCompany s consistent growth would not have been possible despite the challengingenvironment.
| ||For and on behalf of the Board |
|Place: Mumbai ||Ujwal R. Lahoti ||Umesh R. Lahoti |
|Date: 23/08/2017 ||(Managing Director) ||( Director) |
| ||(DIN 00360785) ||(DIN 00361216) |