BHANDARI HOSIERY EXPORTS LIMITED
Your Directors have pleasure in presenting their 23rd Annual Report togetherwith Audited Accounts of the Company for the year ended 31st March 2016 FINANCIAL RESULTS
| || ||(RS. IN LACS) |
|PARTICULARS ||2015-16 ||2014-15 |
|Turnover ||19868.75 ||12496.50 |
|GROSS PROFIT before interest depreciation and tax ||1528.31 ||802.70 |
|Less: Financial expenses ||677.16 ||376.64 |
|Less: Depreciation and preliminary exp. written off ||302.84 ||126.52 |
|PROFIT BEFORE TAX ||548.31 ||299.54 |
|Less: Provision for tax ||-141.50 ||-80.43 |
|PROFIT AFTER TAX ||406.81 ||219.11 |
|Add: Balance brought forward ||1835.06 ||1633.59 |
|Less : Previous Years amounts transferred ||-54.18 || |
|Amount available for appropriation(s) ||2187.69 ||1852.70 |
|Appropriation: || || |
|-Proposed Dividend on Equity shares @ Rs. 0.01/- per Equity Share (i.e. 1%) ||14.65 ||14.65 |
|-Tax on dividend @ 20.36% ||2.983 ||2.983 |
|Balance carried to Balance Sheet ||2170.05 ||1835.06 |
Your Company recorded a very good performance in terms of increased turnover as well asincreased profitability. During the year 2015-16 your Company was able to achieveturnover of Rs. 19868.75 Lacs as against Rs. 12496.50 Lacs in the previous year showing asubstantial increase of 59% over the previous year. The Profits after Tax of the Companyfor the year ended 31.03.2016 has been Rs.406.81 Lacs as against Rs. 219.11 Lacs in theprevious year showing an increase of 85.66% over the previous year.
The Exports of the Company for the financial year ended 31st March 2016were to the tune of Rs. 798.76 Lacs as against Rs. 1390.49 Lacs in the previous year.
SHARE CAPITAL/ SUB-DIVISION OF EQUITY SHARES
During the year under review the Company has not issued any equity shares/ shares withdifferential voting rights or granted stock options or issued sweat equity or purchasedits own shares.
There were no additions/reductions during the financial year 2015-16 in share capitalof the Company by way of Public/ Rights/Bonus/preferential issues/ buy back conversionsetc. or any other changes except for subdivision of one Equity share of face value of Rs.10/- each into 10 shares of face value of Rs. 1/- each in accordance with the SpecialResolution of the Shareholders of the Company passed on 29.01.2016. As a result the paidup equity share capital of the Company stand sub-divided into 146526950 equity sharesof the face value of Rs. 1/- each. The Authorised Share capital of the Company has beensub-divided to 25 Crore equity shares of face value of Rs. 1/- each totalling into Rs. 25crore Authorised Share Capital.
REVISION IN FINANCIAL STATEMENTS
The Financial Statement were approved by the Board of Directors in its meeting held on28th May 2016. However to recommend payment of dividend for the financial year2015-16 the Board of Directors reconsidered and approved the Financial Statements in itsmeeting held on 22nd July 2016. There were no otherchanges/corrections/revision made to financial results/statements except for giving effectto recommendation and payments of dividends for the year 2015-16.
Your directors recommend a dividend of 1% i.e. Rs. 0.01 per Share of face value Rs. 1/-for the year 2015-16 (Previous year 2014-15 @ 1% i.e. Rs. 0.10 per share of face value ofRs. 10/- each.) subject to the approval of the shareholders at the ensuing Annual GeneralMeeting.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
The Company had declared Interim Dividends in the year 2006-07. The unencashed dividendamount lying unclaimed to the credit of the said Unpaid Dividend Account 2006-07 hadalready been duly transferred to the Investor Education and Protection Fund. There are noother such amounts requiring transfer to Investor Education and Protection Fund during theyear 2015-16.
TRANSFER TO RESERVES
The Company does not propose to transfer any amount to reserves.
CORPORATE GOVERNANCE REPORT
The report on Corporate Governance as stipulated under the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 forms an integral part of this Report. Therequisite certificate from the Statutory Auditors of the Company confirming compliancewith the conditions of corporate governance is attached to the report on CorporateGovernance.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report is given at the end of Directors' Report andforms part of this Report.
As at 31st March 2016 the gross fixed assets stood at Rs. 53.64 Crores and net fixedassets Rs. 40.79 Crores. Additions during the year amounted to Rs. 0.43 crores to plantand machinery.
No Fresh long term debt was raised during the year. However existing term debts to theextent of Rs. 2.53 crores were repaid. The Cash Credit Limits were availed to the extentof Rs. 38.63 Crores during Financial year 2015-16. The Company continues to focus onjudicious management of its working capital. Receivables inventories and other workingcapital parameters were kept under strict check through continuous monitoring.
DIRECTORS AND KMPs
Mr. Arun Kumar Oberoi was appointed as Additional Director / Independent Directorw.e.f. 22.07.2016 to hold office upto the ensuing Annual General Meeting. He is proposedto be appointed as Independent Director subject to the approval of the Members at theensuing annual General Meeting for a period upto 31st March 2019.
During the year 2015-16 the appointment of Ms. Manmeet Sikka (DIN 07135079) asDirector/Woman Director of the Company in the category of Independent Directors wasapproved at 22nd Annual General Meeting for a period upto 31.03.2019.
Further the appointment of Shri Nitin Bhandari was as Chairman & Mg. Director andCEO of the Company for a period of 3 years w.e.f. 22.11.2014 was also approved at the 22ndAnnual General Meeting held on 29.09.2015.
There were no fresh/additional appointments to Board of Directors except for approvalto appointments as stated above.
(ii) Retirement by rotation
In accordance with the provisions of the Companies Act 2013 and Articles ofAssociation of the Company Shri Vikas Nayar Director retires by rotation and iseligible for reappointment.
None of the Directors resigned from Board of Directors of the Company during the year2015-16. However after the close of Financial Year 2015-16 Mr. Ashish Thapar IndependentDirector resigned on 12.08.2016.
(iv) Declarations by Independent Directors
Pursuant to sub section (6) of Section 149 of the Companies Act 2013 and Reg 16(1) (b)of the SEBI (Listing Obligations and Disclosure Requirement) Regulations 2015 theIndependent Directors of the Company have given declaration to the Company that theyqualify the criteria of independence as required under the Act and the regulations.
(v) Board Evaluation
The Board has carried out an annual evaluation of its own performance the directorsand also committees of the Board based on the guideline formulated by the Nomination &Remuneration Committee. Board composition quality and timely flow of informationfrequency of meetings and level of participation in discussions were some of theparameters considered during the evaluation process. A note on the familiarizing programmeadopted by the Company for the orientation and training of the Directors and the Boardevaluation process undertaken in compliance with the provisions of the Companies Act 2013and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is providedin the Corporate Governance Report which forms part of this Report.
Further a Separate Meeting of the Independent Directors of the Company was held onceduring the year on 02.11.2015 which also reviewed the performance of the Non-executivedirectors Chairman of the Company and performance of the Board as a whole .
(vi) Nomination & Remuneration Policy
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a Policy for selection appointment and remuneration of Directors and KeyManagerial Personnel. More details of the same are given in the Corporate GovernanceReport.
(vii) Board Meetings
During the year 10 Board Meetings and 6 Audit Committee Meetings were convened andheld. The details are given in the Corporate Governance Report. The intervening gapbetween the two Meetings was within the period prescribed under the Companies Act 2013.
(viii) Key Managerial Personnel
During the year 2015-16 the Company had three Key Managerial Personnel viz. Mr. NitinBhandari Chairman & Managing Director & CEO Mr. Surinder Kumar Chief FinancialOfficer (upto 15.04.2015) and Mr. Gurinder Makkar Company Secretary. On 15thApril 2015 Shri Surinder Kumar resigned and Shri Manoj Kumar was appointed as CFO of theCompany in place.
In compliance with Regulation 36(3) of SEBI (Listing Obligations and DisclosureRequirement) Regulations 2015 brief resume of all the Directors proposed to be appointed/ re-appointed are attached along with the Notice to the ensuing Annual General Meeting.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Company has not directly or indirectly - a) given any loan to any person or otherbody corporate other than usual advances envisaged for supply of materials if any b)given any guarantee or provided security in connection with a loan to any other bodycorporate or person and c) acquired by way of subscription purchase or otherwise thesecurities of any other body corporate. The details of loans from Banks/FIs/ Directors asrequired are given in Financial Statements and Notes thereto.
Your company has not invited/ accepted deposits from public as envisaged under Sections73 to 76 of Companies Act 2013 read with Companies (Acceptance of Deposit) Rules 2014.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
Pursuant to Section 177(9) of the Companies Act 2013 and applicable provisions ofSEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Company hasformulated a Vigil Mechanism for directors and employees to report genuine concerns hasbeen established. The Vigil Mechanism Policy has been uploaded on the website of theCompany at www.bhandariexport.com.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO
The information relating to conservation of energy technology absorption and foreignexchange earnings & outgo as required under Section 134(3)(m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is Annexed herewith as "Annexure- C".
RELATED PARTY TRANSACTIONS
All related party transactions entered into during the financial year were on an arm''slength basis and in the ordinary course of the business of the Company. All related partytransactions are placed before the Audit Committee of the Board of Directors for itsapproval. Prior omnibus approval of the Audit Committee of the Board of Directors isobtained for the transactions which are of foreseen and repetitive nature. A statementgiving details of all related party transactions entered pursuant to the omnibus approvalso granted is placed before the Audit Committee of the Board of Directors for theirreview on a quarterly basis. During the year under reference no Material Related PartyTransactions were entered. All other related party transactions entered into by theCompany were in ordinary course of business and were on an arms length basis.. Hencethe Company is not required to disclose details of the related party transactions in FormAOC 2 pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule8(2) of the Companies (Accounts) Rules 2014. The policy on Materiality of and dealingwith Related Party transactions as approved by the Board is uploaded on the Companyswebsite i.e. www.bhandariexport.com.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators/ Courts whichwould impact the going concern status of the Company and its future operations.
M/s Vipan Kumar Aggarwal & Company Chartered Accountants the Statutory Auditorsof the Company had been appointed as Statutory Auditors of the Company for a period of 3years at the last annual general meeting held on 29.09.2015 subject to ratification oftheir appointment by the members at every annual general meeting. The shareholders at theensuing annual general meeting will consider ratification of the appointment of theStatutory Auditors. The Auditors have confirmed that they hold a valid certificate issuedby the Peer Review Board of the Institute of Chartered Accountants of India.
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 hadappointed M/s Rajeev Bhambri & Associates Company Secretaries a firm of CompanySecretaries in Practice to undertake the Secretarial Audit of the Company. SecretarialAudit Report as per Section 204 of Companies Act 2013 is placed as Annexure - A to thisreport. No adverse comments have been made in the said report by the Practicing CompanySecretary.
The Board of Directors has on the recommendation of Audit Committee approved theappointment of M/s Khushwinder Kumar & Associates Cost Accountants Ludhiana (FirmRegistration No. 00102) as the Cost Auditors of the company for the year 2016-2017 at aremuneration of Rs. 30000/- plus out of pocket expenses. The proposed remuneration of theCost Auditors would be approved by the members in the ensuing AGM.
For the Financial Year 2014-15 Company was not required to appoint Cost Auditors. Withthe new Cost Audit Rules now the Company was again required to appoint Cost Auditor forthe Financial Year 2015-16. The Board on the recommendation of Audit Committee hadappointed M/s Khushwinder Kumar & Associates Cost Accountants Ludhiana (FirmRegistration No. 00102) as Cost Auditors for the Financial Year 2015-16 and theremuneration of the Cost Auditor has been proposed to be approved by the members in theAnnual General Meeting . For the year 2015-16 the Cost Audit report shall be duly filedwithin prescribed time.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICHHAVE OCCURRED BETWEEN MARCH 31 2015 AND DATE OF THE REPORT.
There were no material changes and commitments affecting the financial position of theCompany between the end of financial year (March 31 2015) and the date of the Report.
The Company has completed expansion and modernization in fabric dyeing and boilerdivision. The Company has plans to further expand its fabric dyeing and finishing capacityand also to set up yarn dying within premises as a part of ongoing expansion andmodernization programme.
The Auditors' Report is self-explanatory and do not call for further comments asthere are no adverse remarks in the Auditors' Report.
APPOINTMENT OF SECRETARIAL AUDITOR AND INTERNAL AUDITOR
The Company has in accordance with the applicable provisions of the Companies Act2013 appointed M/s Rajeev Bhambri & Associates Practicing Company Secretary ( C.P.No. 9491) Ludhiana Secretarial Auditors. The Company has appointed M/s Parveen Malhotra& Co. Chartered Accountants (Membership No. 086625 Firm Registration No. 023396N )as the Internal Auditors.
LISTING OF SECURITIES
The securities of the Company are listed only on BSE Ltd. (BSE) Floor 25 PhirozeJeejeebhoy Towers Dalal Street Mumbai. The Company has paid the Listing Fees to the BSEupto the financial year 2016-17
The industrial relations remained very cordial and responsive during the year underreview.
DISCLOSURE OF COMPLAINTS OF SEXUAL HARRASMENT CHILD LABOUR ETC.
Considering gender equality the Company has zero tolerance for sexual harassment atworkplace. The Company has an Anti Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition and Redressal)Act 2013. The following is a summary of sexual harassment complaints received anddisposed off during the year 2015-16:
|Sr. ||Category ||No. of complaints during financial year 2015-16 ||No. of complaints pending as at end of year 2015-16 |
|1 ||Child labour/forced labour/involuntary labour ||The Company does not hire Child Labour Forced Labour or Involuntary Labour. ||Not Applicable |
| || ||No case reported || |
|2 ||Sexual Harassment ||No case reported ||Not applicable |
|3 ||Discriminatory employment ||No case reported ||Not applicable |
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The provisions with respect to Corporate Social Responsibility and constitution of CSRCommittee were not applicable to the Company for the financial year 2015-16 as the Companywas not covered under any of the applicability criteria set under Section 135 and ScheduleVII of the Companies Act 2013 read with as well as the provisions of the Companies(Corporate Social Responsibility Policy) Rules 2014. So for the financial year 2015-16the Company was not required to form Corporate Social Responsibility Committee or to makeexpenditure in pursuance to Corporate Social Responsibility. However as per the AuditedFinancial Statements of the Company for the year 2015-16 the provisions of Section 135read with Schedule VII and Companies Corporate Social Responsibility) Rules 2014 of theCompanies Act 2013 has become applicable to the Company with effect from financial year2016-17. So in accordance with the provisions of Section 135 of the Companies Act 2013read with schedule VII of the Said Act and further read Companies (Corporate SocialResponsibility) Rules 2014 "Corporate Social Responsibility Committee" hasbeen constituted w.e.f. 28.05.2016 consisting of following persons as Members/ Chairman :
|SR. ||NAME OF THE DIRECTOR ||DESIGNATION |
|1 ||MR. NITIN BHANDARI (CHAIRMAN & MG. DIRECTOR) ||CHAIRMAN |
|2 ||Ms. MANMEET SIKKA (INDEPENDENT DIRECTOR) ||MEMBER |
|3 ||MR. VIKAS NAYAR (DIRECTOR) ||MEMBER |
The Company has an innate desire and zeal to contribute towards the welfare and socialupliftment of the community. The Company continues to abide by its general SocialResponsibility and maintain following certifications:
The Company's core values on safety occupational health environmental stewardship andrespect for people permeate all of its actions and will continue to guide its decisionsand actions in the future. The Company's commitment to environmental health and safetyprocesses is practised by the leadership and at all levels of management. The Companytakes all reasonable and practicable steps to protect occupational health and safety ofemployees community and the environment affected by its process products and services.It is all due to the emphasis on Social Responsibility that the Company gets Certificationfrom Worldwide Responsible Apparel Production (W.R.A.P.) USA a Voluntary Non ProfitOrganization which certifies Health Safety Welfare measures and compliance with Govt.and other Regulatory Authorities laws and bye laws by a Apparel/Textile Unit.
BSCI (Business Social Compliance Initiative) CERTIFICATION
The Company heading towards good Corporate Social Responsibility also have s BSCI(Business Social Compliance Initiative) Certification. European retail companies andassociations have developed a common monitoring system simplifying and standardizing therequirements and individual monitoring procedures. The BSCI is based on the labourstandards of the International Labour Organization (ILO) and other important internationalregulations like the UN Charta for Human Rights as well as on national regulations. TheInitiative aims at continuously improving the social performance of suppliers leading toBest Practice like SA8000 certification or equivalents and thus sustainably enhancingworking conditions in factories worldwide. The Certification achieved by the Company inthe true sense reflects the true spirit of the Company in improving working conditionssocial health safety welfare and good Corporate practices. Besides the company would beable to get the confidence of EU based customers by ensuring good social compliance.
The Company has got C-TPAT Certification and achieved another important milestone.C-TPAT (Customs - Trade Protection Against Terrorism) is a voluntary USgovernment-business initiative to build cooperative relationships that improve overallinternational supply chain and U.S. border security. This initiative was launched toassist the trading community in the war against Terrorism some criteria such as BusinessPartner Requirements (Security Procedures) Container Security (Seals ContainerInspection etc) Physical Access Control Procedural Security Security Training andAwareness Physical Security Information Technology. C-TPAT stands for Customs TradePartnership Against Terrorism and it is just that: a partnership or relationship that acompany voluntarily builds with customs to ensure the movement of its supply chainon the companys side and to reassure customs that the company is not importinganything hazardous into the U.S. C-TPAT focuses on "securing companys supplychains with regards to terrorism." It has no doubt its imperative benefits as theForeign buyer get more relied about the Companys Risk Management System and Safetyand Security procedures adopted.
SUBSIDIARY COMPANY/ASSOCIATE COMPANY/JOINT VENTURE
There is no Subsidiary /Associate Company of the Company.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as "Annexure - D".
The provision for gratuity has been made as provided under the Payment of Gratuity Act.
PARTICULARS OF THE EMPLOYEES
The provisions of Rule 5(2) & (3) of the Companies (Appointment & Remunerationof Managerial Personnel) Rules 2014 requiring particulars of the employees in receipt ofremuneration in excess of Rs. 8.5 lacs per month or Rs. 1.02 Crores per year to bedisclosed in the Report of Board of Directors are not applicable to the Company as none ofthe employees was in receipt of remuneration in excess of the these specified amounts. Sothis information is NIL. The information and other details required under Section 197(12)of the Companies Act 2013 read with Rule 5 of the Companies (Appointment &Remuneration of Managerial Personnel) Rules 2014 is given in the Statement annexedherewith at "Annexure- B" .
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has designed and implemented a process driven framework for InternalFinancial Controls . For the year ended on March 31 2016 the Board is of the opinionthat the Company has sound Internal Financial Controls commensurate with the size scaleand complexity of its business operations. During the year such controls were tested andno material weakness in their operating effectiveness was observed. The Company has aprocess in place to continuously monitor the same and identify gaps if any and implementnew and/ or improved controls whenever the effect of such gaps would have a materialeffect on the Companys operations.
Statements in this report describing the Companys objectives expectationsand/or anticipations may be forward looking within the meaning of applicable SecuritiesLaw and Regulations. Actual results may differ materially from those stated in thestatement. Important factors that could influence the Companys operations includeglobal and domestic supply and demand conditions affecting selling prices of finishedgoods availability of inputs and their prices changes in the Government policiesregulations tax laws economic developments within the country and outside and otherfactors such as litigation and industrial relations.
The Company assumes no responsibility in respect of the forward-looking statementswhich may undergo changes in future on the basis of subsequent developments informationor events.
DIRECTORS RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them in terms of the Section 134(3)(c) of the Companies Act2013 your Directors confirm that :
a) in the preparation of the annual accounts for the financial year ended March 312016 the applicable accounting standards had been followed and there were no materialdepartures;
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 as atMarch 31 2016 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;
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 provisions ofall applicable laws and that such systems were adequate and operating effectively.
DECLARATION REGARDING CODE OF CONDUCT
Directors Key Managerial Personnel and senior management of the Company have confirmedcompliance with the Code of Conduct applicable to the Directors and employees of theCompany and the declaration in this regard made by the Mg. Director & CEO of theCompany forms part of this Annual Report. The said code is available at the Companyswebsite i.e. www.bhandariexport.com.
Your Directors place on record their appreciation of the continued assistance andco-operation extended to the Company by the Government of India Government of PunjabState Bank of India the large family of shareholders businessassociates/customers/buyers the dedicated employees and all other business constituentswho are continuing to assist your Company.
| ||For and on behalf of the Board of Directors |
| ||Sd/- |
|Place : Ludhiana ||(Nitin Bhandari) |
|Date : 12.08.2016 ||Chairman & Managing Director |
"ANNEXURE-A" TO THE DIRECTORS' REPORT SECRETARIAL AUDIT REPORT FOR THEFINANCIAL YEAR ENDED 31 MARCH 2016
[Pursuant to section 204(1) of the Companies Act 2013 and rule 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]
Bhandari Hosiery Exports Limited
Bhandari House Village Meharban Rahon Road Ludhiana-141007 (Pb.).
We have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by Bhandari Hosiery ExportsLimited (hereinafter called the Company). Secretarial Audit was conducted in amanner that provided us a reasonable basis for evaluating the corporate conducts/statutorycompliances and expressing my opinion thereon. Based on our verification of theCompanys books papers minute books forms and returns filed and other recordsmaintained by the Company and also the information provided by the Company its officersagents and authorized representatives during the conduct of secretarial audit we herebyreport that in our opinion the Company has during the audit period covering thefinancial year ended on 31st March 2016 (Audit Period) compliedwith the statutory provisions listed hereunder and also that the Company has properBoard-processes and compliance-mechanism in place to the extent in the manner and subjectto the reporting made hereinafter: We have examined the books papers minute books formsand returns filed and other records maintained by the Company for the financial year endedon 31st March 2016 to the extent applicable and according to the provisionsof:
(i) The Companies Act 2013 (the Act) and the rules made thereunder;
(ii) The Securities Contracts (Regulation) Act 1956 (SCRA) and therules made thereunder;
(iii) The Depositories Act 1996 and the Regulations and Bye-laws framedthereunder;
(iv) Foreign Exchange Management Act 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment Overseas Direct Investment and ExternalCommercial Borrowings;
(v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (SEBI Act):
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;
(b) SEBI (Prohibition of Insider Trading) Regulations 1992 and SEBI (Prohibition ofInsider Trading) Regulations 2015;
(c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009 and amendments from time to time
(d) The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999 and the Securities and Exchange Board ofIndia (Share Based Employee Benefits) Regulations 2014;
(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008;
(f) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;
(g) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009; and
(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998;
(vi) We further report that there are adequate systems and processes in theCompany commensurate with the size and operations of the company to monitor and ensurecompliance with laws relating to inter alia:
- All labour & industrial laws;
- The Competition Act 2012;
- All environmental laws;
- Textiles (Consumer Protection) Regulations 1988;
- Textiles (Development and Regulation) Order 2001;
- Textiles Committee Act 1963;
- Additional Duties of Excise (Textiles and Textiles Articles) Act 1978.
- Indian Boilers Act 1923
We have also examined compliance with the applicable clauses of the following:
(i) Secretarial Standards issued by The Institute of Company Secretaries of India tothe extent of its applicability.
(ii) The Listing Agreement entered into by the Company with the BSE Limited read withSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. During theperiod under review the Company has complied with the provisions of the Act RulesRegulations Guidelines Standards etc. mentioned above.
We further report that
The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the period under review werecarried out in compliance with the provisions of the Act. Adequate notice is given to alldirectors to schedule the Board Meetings agenda and detailed notes on agenda were sent atleast seven days in advance and a system exists for seeking and obtaining furtherinformation and clarifications on the agenda items before the meeting and for meaningfulparticipation at the meeting. All decisions at Board Meetings and Committee Meetings arecarried out unanimously or by the majority as recorded in the minutes of the meetings ofthe Board of Directors or Committee of the Board as the case may be. We further reportthat there are adequate systems and processes in the Company commensurate with the sizeand operations of the company to monitor and ensure compliance with applicable lawsrules regulations and guidelines. We further report that during the audit period theCompany has following specific events/actions having a major bearing on the Companysaffairs in pursuance of the above referred laws rules regulations guidelines standardsetc. referred to above:-
Sub-division of the Equity shares of the Company from Rs. 10/- to Rs. 1/- andconsequently the paid up equity share capital of the Company was sub-divided from14652695 equity shares of Rs. 10/- each to 146526950 equity shares of the face valueof Rs. 1/- each.
Rajeev Bhambri & Associates
Company Secretary in whole time practice
C.P. No. 9491
Note: This report is to be read with our letter of even date which is annexed asANNEXURE 1 and forms an integral part of this Report.
ANNEXURE 1 The Members Bhandari Hosiery Exports Limited Bhandari HouseVillage Meharban Rahon Road Ludhiana-141007 (Pb.).
Our report of even date is to be read along with this letter.
1. We have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theverification was done on test basis to ensure that correct facts are reflected insecretarial records. We believe that the processes and practices we followed provide areasonable basis for our opinion.
2. We have not verified the correctness and appropriateness of financial records andBooks of Accounts of the company as we have relied upon the Audit done by StatutoryAuditors as required under Companies Act 2013.
3. Where ever required we have obtained the Management representation about thecompliance of laws rules and regulations and happening of events etc.
4. The compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of management. Our examination was limited tothe verification of procedures on test basis.
5. The Secretarial Audit report is neither an assurance as to the future viability ofthe company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the company.
Rajeev Bhambri & Associates
Company Secretary in whole time practice
C.P. No. 9491
"ANNEXURE -B" TO BOARDS REPORT I. DETAILS PERTAINING TOREMUNERATION AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIES ACT 2013 READ WITH RULE5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014
1. The ratio of the remuneration of each director to the median employeesremuneration for the financial year and such other details as prescribed is as givenbelow:
|Name ||Ratio |
|Mr. Nitin Bhandari (Chairman & Managing Director) ||9.6:1 |
|Other Directors (Non Executive and Independents) (Only Sitting Fee paid) ||N.A. |
|Mr. Gurinder S. Makkar (Company Secretary) ||2.8:1 |
|Mr. Manoj Kumar (CFO) ||2.4:1 |
For this purpose sitting fees paid to the directors has not been considered asremuneration. Non-executive/ Independent Directors are entitled only to sitting fee. Thedetails of remuneration/sitting fee paid are given in Form MGT-9/ Corporate GovernanceReport.
2. The percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year:
|Name ||Designation ||% Increase |
|Mr. Nitin Bhandari* ||Managing Director ||NIL |
|Mr. Manoj Kumar ||Chief Financial Officer ||NIL |
|Mr. Gurinder S. Makkar ||Company Secretary ||NIL |
*There was no increase in remuneration of of KMP during the financial year 2015-16.During the year 2015-16 the turnover of the company was Rs. 19868.75 Lacs as against Rs.12496.50 Lacs in the previous year showing a substantial increase of 59% over theprevious year. The Profits after Tax of the Company for the year ended 31.03.2016 has beenRs.406.81 Lacs as against Rs. 219.11 Lacs in the previous year showing an increase of85.66% over the previous year.
3. Percentage increase/(decrease) in the median remuneration of employees in thefinancial year: (10.71)
4. The number of permanent employees on the rolls of company: 271
5. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and any exceptionalcircumstances for increase in the managerial remuneration:
Average percentage increase already made in the salaries of employees other than themanagerial personnel in the last financial year was 1.93%. There was no increase inremuneration of managerial personnel during the year 2015-16. Average increase inremuneration for employees other than Managerial Personnel is in line with the industrypeers and is also outcome of market competitiveness.
6. It is hereby affirmed that the remuneration paid is as per the as per theRemuneration Policy for Directors Key Managerial Personnel and other Employees.
II. INFORMATION AS PER RULE 5(2) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OFMANAGERIAL PERSONNEL) RULES 2014
(i) Details of top ten employee drawing remuneration pursuant to the provisions ofRule 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 are as follows:
|NAME OF EMPLOYEE ||DESIGNATION ||GROSS REMUNE- RATION PAID ||NATURE OF EMPLOY- MENT ||QUALI- FICATION ||AGE ||EXPE- RIENCE ||DATE OF COMMENC- EMENT ||LAST EMPLOY- MENT ||% OF EQUITY SAHRES |
| || ||(RS.) || || || || || || || |
|1 NITIN BHANDARI* ||MG. DIRECTOR ||1440000 ||PERMANENT ||MBA LONDON ||33 ||11 ||23.11.2009 ||- ||17.18 |
|2 ADITI BHANDARI** ||VICE PRESIDENT- MARKETING ||1140000 ||PERMANENT ||MBA ||33 ||11 ||26.09.2011 ||- ||NIL |
|3 KUSUM BHANDARI*** ||CHIEF MERCHANDISER ||888000 ||PERMANENT ||BA ||66 ||32 ||27.09.2002 ||- ||1.73 |
|4 SANDEEP SHARMA ||DYEING MANAGER ||538065 ||PERMANENT ||M. SC. ||40 ||19 ||02.07.2015 ||Richa Industries Ltd. ||NIL |
|5 KAILASH C. SHARMA ||CHIEF ENGINEER ||472000 ||PERMANENT ||ELE. DIP. ||64 ||45 ||06.04.2015 ||Jindal Cottex Ltd. ||NIL |
|6 GURINDER S. MAKKAR ||COMPANY SECRETARY ||420000 ||PERMANENT ||B.COM FCS ||44 ||15 ||30.07.2004 ||Master Capital Services Ltd. ||NIL |
|7 MONIKA SHARMA ||MERCHANDISER ||403548 ||PERMANENT ||SR. SEC. ||36 ||5 ||02.07.2015 ||Business ||NIL |
|8 SHIV KARAN ||FABRIC PROCESSING & FINHSING HEAD ||392000 ||PERMANENT ||BA ||31 ||13 ||04.02.2015 ||Richa Industries Ltd. ||NIL |
|9 MANOJ KUMAR ||CFO ||360000 ||PERMANENT ||B.COM ||41 ||18 ||05.09.2013 ||Deepak Builders ||NIL |
|10 VIRENDER CHAUDHARY ||FABRIC DIVISION HEAD ||360000 ||PERMANENT ||SR. SEC. ||44 ||25 ||01.07.2010 ||Jain Udhay Fabrics Ltd. ||NIL |
Relationship with Directors
* Mr. Nitin Bhandari is Managing Director of the Company ** Ms. Aditi Bhandari is wifeof Mr. Nitin Bhandari Mg. Director ***Ms. Kusum Bhandari is mother of Mr. Nitin BhandariMg. Director
Except as above none of the other aforesaid employees is related to any director ormanager of the Company.
(ii) None of the employee who employed throughout the financial year 2015-16 was inreceipt of remuneration for that year which in the aggregate was not less than one croreand two lakh rupees ;
(iii) None of the employee employed for a part of the financial year 2015-16 was inreceipt of remuneration for any part of that year at a rate which in the aggregate wasnot less than eight lakh and fifty thousand rupees per month ;
(iv) None of the employee employed throughout the financial year 2015-16 or partthereof was in receipt of remuneration in that year which in the aggregate or as thecase may be at a rate which in the aggregate is in excess of that drawn by the managingdirector or whole-time director or manager.
| ||For and on behalf of the Board of Directors |
| ||Sd/- |
|Place: Ludhiana ||(Nitin Bhandari) |
|Date: 12.08.2016 ||Chairman & Managing Director |
"ANNEXURE-C" TO BOARDS REPORT STATEMENT CONTAINING PARTICULARS PURSUANTTO SECTION 134 (3) (m ) OF THE COMPANIES ACT 2013 READ WITH RULE 8 (3) OF THE COMPANIES(ACCOUNTS) RULES 2014
1. CONSERVATION OF ENERGY
(a) Energy conservation has been an important thrust area for the Company and iscontinuously monitored. The adoption of energy conservation measures has helped theCompany in reduction of cost and reduced machine down-time.
(b) Energy conservation is an ongoing process and new areas are continuously identifiedand suitable investments are made wherever necessary.
(c) Various on-going measures for conservation of energy include (i) use of energyefficient lighting and better use of natural lighting (ii) reduction of energy loss and(iii) replacement of outdated energy intensive equipment.
The company provides high priority to energy conservation schemes to conserve naturalresources and is regularly taking effective steps to conserve energy wherever possible.This continues to remain thrust area with studies discussions and analysis beingundertaken regularly for further improvements. The Company has given due attention towardsconservation of energy. It not only reduces the cost of production but also helps inconservation of natural resources which are depleting very fast. The Company is constantlylooking for savings of energy and trying to conserve energy continuously by modificationsor trying alternate means and continuously upgrading technology and work practices. Stepsare being taken to conserve energy on a continuous basis. Besides continuing the measurestaken in earlier years following steps were taken during the year 2015-16 with a view toreduce the cost of energy and consequently the cost of production. Conservation measurestaken proposed measures being implemented for reduction of consumption of energy andconsequent impact thereof for the year 2015-16:
|Measures taken ||Saving amount (Rs. In Lacs) ||Energy Savings |
| || ||2015-16 in Lacs) ||(Units |
|Installation of energy efficient light fittings. || || || |
|Replacement of old & re-wound motors with Energy Efficient Motors || || || |
|Replacement of derated & defective Capacitors || || || |
|Optimising Water usage in dyeing and reducing load on ETP and power usage. Use of inverters in Unit . ||5.43 || ||0.70 |
(d) Total energy consumption and energy consumption per unit of production is given inthe table below:
|1 ELECTRICITY || ||2015-16 ||2014-15 |
|a PURCHASED UNIT || ||1953311 ||991246 |
|Total Amount || ||15065142 ||6399154 |
|Rate per unit || ||7.71 ||6.45 |
|b OWN GENERATION THROUGH DIESEL GENERATOR(S) || || || |
|Units produced ||KWH ||289800 ||388610 |
|Unit per litre of Diesel ||KWH ||4.41 ||5.06 |
|Total Diesel consumed ||LTR ||65670 ||76776 |
|Diesel cost ||RS ||2808706 ||3818070 |
|Cost per unit of KWH ||Rs/ Kwh ||9.69 ||9.82 |
|2 COAL || ||NIL ||NIL |
|3 FURNANCE OIL || ||NIL ||NIL |
|4 OTHER INTERNAL GENERATION || ||NIL ||NIL |
|5 a HUSK FOR STEAM ||RS. ||27803554 ||14421204 |
|b HUSK FOR STEAM Kg ||KG. ||6159089 ||2782975 |
|Rate Per Kg || ||4.51 ||5.18 |
|6 a DIESEL FOR STEAM || ||163724 ||40214 |
|b Rate per Ltr || ||42.77 ||49.73 |
|Consumption / unit production || || || |
|Production of garments || ||1300000 ||1002301 |
|Electricity Consumed ||Kwh/pc ||1.50 ||0.99 |
|Husk Consumed ||Kg/pc ||NIL ||NIL |
2. RESEARCH & DEVELOPMENT TECHNOLOGY ABSORPTION
Technology absorption Innovation and Research & Development (R & D) is acontinuing Process and a continued emphasis is given on quality improvement and productupgradation.
|1. Specific areas in which R & D activities were carried out by the Company: ||2. Benefits Derived |
| ||-Better Quality; reduced wastages |
|-Quality Improvement ||-Cleaner environment |
|-Yield/Productivity Improvement ||-Safer operations and improved competitiveness |
|-Energy Conservation || |
|-New Technology/Product development || |
3. Future Plan of Action
Management is committed to strengthen R & D activities for product development asper requirements and to improve its competitiveness in the times to come.
|4. Expenditure on R & D || || |
|a) Capital : Nil ||b) Recurring : Nil ||Total : Nil |
TECHNOLOGY ABSORPTION ADAPTATION AND INNOVATION
The Company has not imported any technology from abroad. However the company has beenusing the imported machinery. The Company has been making efforts for absorption of latesttechnology. Your Company has the modern and the state of art technology for themanufacture/fabrication of garments. The Company has necessary research and qualitycontrol facilities.
The Company has achieved improvement in quality and lower cost of production.
(3) PARTICULARS OF FOREIGN EXCHANGE EARNING AND OUTGO (RS. IN LACS)
Activities relating to export initiatives taken to increase exports development ofnew export market for products and services and export plans are given hereunder:
The sale of more environment friendly products has increased.
The Company has explored new markets and buyers and is going good with recentlyobtained buyers.
Targeting growth in the next financial year.
The Company has continued to maintain focus and avail of export opportunities based oneconomic considerations. There have been concentrated efforts to maintain and improveexports performance and to meet the need of end users.
The Management has laid continuous thrust for exploring new markets and as a result the Company was also able find some new foreign customers. The position of ForeignExchange earnings and Outgo for the financial year 2015-16 is as under:
FOREIGN EXCHANGE EARNING AND OUTGO (RS. IN LACS)
|Particulars ||2015-16 ||2014-15 |
|a. Foreign Exchange Earnings (FOB value of Exports commission earned) ||664.54 ||1249.50 |
|b. Foreign Exchange Outgo (CIF value of Imports and expenditure in foreign currency) ||69.93 ||1540.78 |
| ||For and on behalf of the Board of Directors |
| ||Sd/- |
|Place : Ludhiana ||(Nitin Bhandari) |
|Date : 12.08.2016 ||Chairman & Managing Director |