Your Directors have pleasure in presenting the 29th Annual Report and the AuditedFinancial Statements of the Company for the financial year ended 31st March 2016.
The consolidated and standalone financial results of the Company for the financial yearended 31st March 2016 are as follows:
| || || |
(Rs. in Lacs)
|Sl.No. Particulars ||Consolidated ||Standalone |
| ||201516 ||201415 ||201516 ||201415 |
|1. Net Sales /Income from Operations ||62544.80 ||55812.77 ||44953.18 ||42394.78 |
|2. Other Income ||378.91 ||333.80 ||261.68 ||265.09 |
|3. Total Expenditure ||59730.78 ||53192.92 ||42924.31 ||40528.64 |
|4. Interest ||1306.22 ||1452.82 ||1117.08 ||1174.36 |
|5. Gross Profit after Interest but before Depreciation & Tax Items ||3797.90 ||3583.88 ||2703.37 ||2517.48 |
|6. Depreciation ||604.98 ||630.24 ||412.82 ||386.25 |
|7. Profit before Tax ||3192.92 ||2953.64 ||2290.55 ||2131.23 |
|8. Tax Expense ||920.88 ||839.46 ||813.77 ||724.48 |
|9. Net Profit after Tax ||2272.05 ||2114.19 ||1476.78 ||1406.76 |
|10. Share of Profit/ (Loss) of Associate ||192.22 ||0.44 || || |
|11. Minority Interest ||(7.21) ||14.26 || || |
|12. Net Profit/(Loss) after taxes minority interest and share of profit/(loss) of associates ||2471.48 ||2100.37 ||1476.78 ||1406.76 |
|13. Paid up Equity Share Capital ||1171.38 ||1121.38 ||1171.38 ||1121.38 |
|14. Reserves (Excluding Revaluation Reserves) ||20014.16 ||16276.96 ||17597.15 ||14935.59 |
|15. Earning Per Share (Basic) Rs. ||21.69 ||18.83 ||12.96 ||12.61 |
|16. Earning Per Share (Diluted) Rs. ||21.48 ||18.50 ||12.84 ||12.39 |
|17. Dividend ||12% ||10% ||12% ||10% |
On consolidated basis during the year under review the Company achieved a turnover ofRs. 62544.80 Lacs as against Rs. 55812.77 Lacs in the previous year showing an increase of12.06%. The Net Profit after taxes minority interest and share of profit/(loss) ofassociates also increased to Rs. 2471.48 lacs as compared to Rs. 2100.37 Lacs in theprevious year showing an increase of 17.67%.
Your Directors have recommended a Dividend of Rs.1.20/ per paidup equityshare of Rs. 10/ each (i.e. @ 12%) for the Financial Year ended 31st March 2016.The dividend payout is subject to approval of members at the ensuing Annual GeneralMeeting.
During the period under review an amount of rupees two crores has been transferred toReserves of the Company.
During the year under review the following changes had taken place in the sharecapital of the Company:
|Dates ||Description ||No. of shares ||Total value of shares |
|1st April 2015 ||Share Capital at the beginning of the year ||11213848 ||112138480 |
|14th December 2015 ||Add: Equity Shares allotted pursuant to conversion of Warrants into Equity Shares ||500000 ||5000000 |
|31st March 2016 ||Share Capital at the end of the year ||11713848 ||117138480 |
In addition to above the Company had allotted 700000 warrants to NonPromoterGroup on 2nd January 2016 with right to subscribe to equal number of Equity shares uponconversion at face value of Rs. 10/ each and premium of Rs. 590/ each.
The Company had also allotted 164650 Stock options to its employees during the FY201516.
EMPLOYEES STOCK OPTION PLAN
The Nomination and Remuneration Committee of the Board of Directors of the Companyinter alia administers and monitors the Employees' Stock Option Scheme of the Company inaccordance with the Securities and Exchange Board of India (Employee Stock Option Schemeand Employee Stock Purchase Scheme) Guidelines 1999 ('the SEBI Guidelines') read withSecurities and Exchange Board of India (Share Based Employee Benefits) Regulations 2014
The Company has received a certificate from the Statutory Auditors of the Company thatthe Scheme has been implemented in accordance with the SEBI Guidelines and the resolutionpassed by the shareholders. The certificate would be placed at the Annual General Meetingfor inspection by members.
Disclosures as required under clause 12 of the Securities and Exchange Board of India(Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999 (the'SEBI Guidelines') as at 31st March 2016 are set out in Annexure A to this Report.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company are prepared in accordance withrelevant Accounting Standards viz. AS21 AS23 and AS27 issued by theInstitute of Chartered Accountants of India and forms an integral part of this Report.
Pursuant to Section 129(3) of the Companies Act 2013 read with Rule 5 of the Companies(Accounts) Rules 2014 a statement containing salient features of the financialstatements of Subsidiaries/Associate Companies/Joint Ventures is given in Form AOC1and forms an integral part of this Report.
DETAILS AND PERFORMACE OF SUBSIDIARY COMPANIES
Bhartiya Global Marketing Limited
It is a global marketing company engaged in export of textile and leather garments. Thetotal revenues of the Company was Rs. 27871206/ and the net loss was Rs.1282514/ during the financial year 201516.
J&J Leather Enterprises Ltd.
This company is a tannery to support our leather garments and accessories businessthrough conversion of wet blue leather into finished leather. The total revenues of theCompany was Rs. 118993700/ and the net profit was Rs. 93162/ during thefinancial year 201516.
Bhartiya International SEZ Ltd.
The Company is incorporated to develop sector specific Special Economic Zone (SEZ) ofLeather & Leather Products. It is a joint venture between Bhartiya International Ltd.and Andhra Pradesh Industrial Infrastructure Corporation. The total revenues of theCompany was Rs. 3743076/ and the net loss was Rs. 6528814/ during thefinancial year 201516.
Bhartiya Fashion Retail Ltd.
The Company had registered a loss of Rs. 52712/ for the financial year201516.
Ultima S.A. Switzerland
The Company is engaged in marketing and selling of outwears including leather garmentsaccessories and textile products in Europe. The total revenues of the Company was CHF20828340.25 and the net profit was CHF 1106778.34 during the financial year201516.
World Fashion Trade Limited Mauritius
This company is engaged in sourcing of outerwear (including leather PU Garmentsfashion accessories) and textile product from China India and Bangladesh for marketingand selling in Europe and US markets. The total revenues of the Company was HK$40013558.57 and the Company has registered a net profit of HK$ 422121.21 for theperiod ended 31st March 2016.
Ultima Italia SRL Italy
This company markets all fashion products including fur and leather garments in Italianmarket. The total revenues of the Company was Euro 1929264 and the net profit was Euro13949 during the financial year 201516 .
Design Industry Limited Hongkong
This company is engaged in sourcing of outerwear (including leather PU Garmentsfashion accessories) and textile product from China and India for marketing and selling inEurope. The total revenues of the Company was HK$ 60921599.08 and the net profit wasHK$ 451466.25 for the financial year 2015-16.
New Subsidiary/Associate Company incorporated /dissolved during the year
During the year under review two new subsidiaries had been incorporated and onesubsidiary had been liquidated
Bhartiya Urban Infrastructure Limited
The Company was incorporated on 6th August 2015. The Company had registered a loss ofRs. 21886 for the financial year 201516.
Design Industry China Limited China
During the year under review your company had formed one company named Design IndustryChina Limited through its wholly owned subsidiary Ultima S.A. This company is engaged inmarketing and selling of outerwear (including leather PU Garments fashion accessories)from China for marketing and selling in China. The total revenues of the Company was RMBYuan 4563572.60 and the net profit was RMB Yuan 249067.95 for the financial year2015-16.
BIL Group LLC USA
This company was liquidated during the year under review.
As per Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a separate section on corporate governancepractices followed by the Company together with a certificate from the Company's Auditorsconfirming compliance forms an integral part of this Report.
MANAGEMENT DISCUSSION & ANALYSIS
The Management Discussion and Analysis Report forms part of this Annual Report.
SECURITIES AND EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONS AND DISCLOSUREREQUIREMENTS) REGULATIONS 2015
The Company's securities are listed at the following Stock Exchanges in India:
1. BSE Limited
2. The National Stock Exchange of India Limited
The Annual Listing fee for the Financial Year 2016 2017 has already been paid toboth the above Stock Exchanges.
CASH FLOW STATEMENT
Cash Flow Statement is annexed and forms part of this Annual Report.
EXTRACT OF ANNUAL RETURN
The details forming part of the Annual Return in form MGT9 as required underSection 92 of the Companies Act 2013 forms an integral part of this Report. The same isprovided herewith as Annexure B.
During the year under review there is no change in the Board of Directors of theCompany.
In accordance with the provisions of Section 152 of the Companies Act 2013 and theCompany's Articles of Association Mr. Nikhil Aggarwal Director retires by rotation atthe ensuing Annual General Meeting and being eligible offers himself for reappointment.The Board recommends his reappointment for the consideration of the Members of theCompany at the ensuing Annual General Meeting.
Appropriate Resolution seeking your approval for reappointment of Mr. NikhilAggarwal as Director is also included in the Notice.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16 (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Mrs. Annapurna Dixit was appointed as NonExecutive Independent Director by themembers of the Company in the Annual General Meeting (AGM) held on 21st September 2015.
KEY MANAGERIAL PERSONNEL
The following are the Key Managerial Personnel of the Company:
|Sl.No. ||Name of the person ||Designation |
|1 ||Mr. Snehdeep Aggarwal ||Managing Director |
|2 ||Mr. Manoj Khattar ||Chief Financial Officer |
|3 ||Ms. Shilpa Budhia ||Company Secretary |
Pursuant to the provisions of the Companies Act 2013 and the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 a structured questionnaire was preparedafter taking into consideration the various aspects of the Board's functioningcomposition of the Board and its Committees culture execution and performance ofspecific duties obligations and governance.
The performance evaluation of the Independent Directors was completed. The performanceevaluation of the Managing Director WholeTime Directors and the otherNonIndependent Directors was carried out by the Independent Directors. The Board ofDirectors expressed their satisfaction with the evaluation process.
NUMBER OF MEETINGS OF THE BOARD
During the Financial Year 201516 six Board Meetings of the Company were held.The details of the Meetings of the Board held during the Financial Year 201516 formspart of the Corporate Governance Report.
The Board of Directors has the following mandatory Committee
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders' Relationship Committee
4. Corporate Social Responsibility Committee.
The details of the composition of Committees terms of reference and numbers ofMeetings held during the Financial Year 201516 is provided in the CorporateGovernance Report.
PARTICULARS OF LOANS GUARANTESS OR INVESTMENTS BY COMPANY
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to Financial Statements.
WHISTLE BLOWER POLICY
The Company has a Whistle Blower Policy to report genuine concerns or grievances. TheWhistle Blower Policy has been posted on the website of the Company(www.bhartiyafashion.com).
NOMINATION AND REMUNERATION POLICY
The Board of Directors has framed a policy which lays down a framework in relation toremuneration of Directors Key Managerial Personnel and Senior Management of the Company.This policy also lays down the criteria for selection and appointment of Board members.The details of this policy are explained in the Corporate Governance Report.
RELATED PARTY TRANSACTIONS
All transactions entered with related parties for the year under review were on arm'slength basis and in ordinary course of business and that the provisions of Section 188 ofthe Companies Act 2013 are not attracted. Thus disclosure in the form AOC2 is notrequired. Further there are no material related party transactions during the year underreview with Promoters Directors or Key Managerial Personnel.
All related party transactions are placed before the Audit Committee as also to theBoard for approval. Omnibus approval was obtained on a quarterly basis for transactionswhich are of repetitive nature. A statement giving details of all the related partytransactions are placed before the Audit Committee and Board for review and approval on aquarterly basis.
The Policy on Related Party Transactions as approved by the Board of Directors has beenuploaded on the website of the Company. The web link of the same iswww.bhartiyafashion.com.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders by the Regulators/Courts that would impactthe going concern status of the Company and its future operations.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of knowledge and belief and according to the information and explanationsobtained your Directors make the following statement in terms of Section 134(3)(c) of theCompanies Act 2013:
(a) that in the preparation of the annual accounts for the financial year ended 31stMarch 2016 the applicable accounting standards had been followed along with properexplanation relating to material departures;
(b) that 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 as at 31st March 2016and of the profit of the company for the year ended on that date;
(c) that the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;
(d) that the annual accounts have been prepared on a going concern basis; and
(e) that the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and
(f) that the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
M/s. Sushil Poddar & Co. Chartered Accountants (Firm registration No: 014969N)who are the Statutory Auditors of the Company hold office up to the 30th Annual GeneralMeeting. Your directors have recommended their ratification in the ensuing Annual GeneralMeeting.
The Notes on Financial Statements referred to in the Auditors' Report areselfexplanatory and do not call for any further comments.
As per the Companies (Cost Records and Audit) Rules 2014 Cost Audit is not applicableto the Company for the financial year 201617.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethereunder the Company had appointed Mr. Ravichandran K. Practicing Company Secretary(CP No. 3207) to undertake the Secretarial Audit of the Company. The Secretarial AuditReport is included as Annexure C and forms an integral part of this report.
There is no secretarial audit qualification for the year under review.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has robust system of internal control to provide the reasonable assurancethat all information used within the business and for external reporting is adequate.
The Company has inhouse internal audit function manned by experienced CharteredAccountant reporting into Audit Committee. Pursuant to the provisions of section 138 ofthe Companies Act 2013 the internal audit function is entrusted to our inhouseaudit team. Risk based internal audits as per audit charter approved by audit committeehave been conducted during the year with an objective to ensure the:
accuracy of financial reporting
safeguarding of Company's assets
compliance to the applicable statutes and company policies and procedures Theaudit report has been submitted to Audit Committee for consideration. Further to ensurethe completeness the Risk and Control Matrix is maintained for the process audited. Withthe endeavor to strengthen the internal control mechanism and accuracy of reporting theCompany is in the process of implementing an ERP specific to the fashion industry.
The board of directors are informed about the risks or opportunities at StrategicOperational and Compliance levels across business units functions and geographies thatcould have an adverse impact on the Companys operations or to that could beexploited to maximize the gains. The processes and procedures are in place to act in atime bound manner to manage the risks or opportunities. The risk management process isreviewed and evaluated by the board of directors. Bhartiya Internationals exposureto foreign currency risk is restricted to its imports and exports. These risks areminimized through well-thought-out financial operations astute treasury management andeffective use of hedge options.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
As a part of its initiative under the "Corporate Social Responsibility" (CSR)drive the Company has undertaken projects in the area of rural development and promotinghealth care and sanitation. These projects are in accordance with the Schedule VII of theCompanies Act 2013 and the Company's CSR Policy. The report on CSR activities as requiredunder Companies (Corporate Social Responsibility Policy) Rules 2014 is set out asAnnexure D forming part of this report.
ENVIRONMENT AND SAFETY
The Company is conscious of the importance of environmentally clean and safeoperations. The Company's policy requires conduct of operations in such a manner so as toensure safety of all concerned compliances environmental regulations and preservation ofnatural resources.
The Company has even devised a Policy on Prevention of Sexual Harassment at workplacewith a mechanism of lodging complaints. During the year under review no complaints werereported to the Board.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Information in accordance with the provision of Section 134 (3)(m) of the CompaniesAct 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 for the year ended31st March 2016 on the Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and outgo is given in the Annexure-E forming part of this report.
The year 201516 has been a year full of new initiatives for the organization andfor its people. Bhartiya has strong belief in their people and their skill set. Theorganization has contributed to the wellbeing of its people by investing in theirdevelopment and growth within the organization. In order to create and increase the wealthof the people of the organization we introduced the scheme of granting company stocks tothe people of Bhartiya.
While the development of people is of utmost importance we also place prime importancein shaping our human resources for taking up challenges within and outside theorganization which leads to better output and increased efficiencies. We continue tonurture the budding talent and develop them for taking up responsible positions. Bhartiyabelieves in supporting the society and its people and have helped the people of TamilNadu during the event of natural disaster.
PARTICULARS OF EMPLOYEES
5 persons employed throughout the year were in receipt of remuneration of Rs. 60 lacper annum or more amounting to Rs. 4.46 crore and none of the employees employed for thepart of the FY 2015-16 were in receipt of Rs. 5 lac per month or more.
During the financial year 201516 the Company had 299 employees.
The information required under Section 197(12) of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and formingpart of the Director's Report for the year ended 31st March 2016 is given as a separateAnnexure to this Report.
The above Annexure is not being sent along with this report to the Members of theCompany in line with the provision of Section 136 of the Companies Act 2013. Members whowish to obtain these particulars may write to the Company Secretary at the registeredoffice of the Company. The aforesaid Annexure is also available for inspection by Membersat the registered office of the Company 21 days before the 29th Annual General Meetingand upto the date of the ensuing Annual General Meeting during the business hours onworking days.
None of the employees listed in the said Annexure is a relative of any Director of theCompany. None of the employees hold(by himself or along with his spouse and dependentchildren) more than two percent of the equity shares of the Company.
TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of Section 205A(5) and 205C of the Companies Act 1956relevant amounts which remained unpaid or unclaimed for a period of seven years have beentransferred by the Company from time to time on due dates to the Investor Education andProtection Fund.
Pursuant to the provisions of Investor Education and Protection Fund (Uploading ofinformation regarding unpaid and unclaimed amounts lying with companies) Rules 2012 theCompany has uploaded the details of unpaid and unclaimed amounts lying with the Company ason 21st September 2015 (date of last Annual General Meeting) on the Ministry of CorporateAffairs' website.
The Company has neither invited/ nor accepted any deposits during the year within themeaning of Section 73 of the Companies Act 2013 read with Companies (Acceptance ofDeposit) Rules 2014.
BUSINESS RESPONSIBILITY REPORTING
The Business Responsibility Reporting as required under Regulation 34(2)(f) of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 with the Stock Exchanges is not applicable to your Company for thefinancial year ending 31st March 2016.
MATERIAL CHANGES AND COMMITMENTS
There are no material changes occurred in between the financial year ended on 31stMarch 2016 and date of the report of the Company which affects the financial position ofthe Company.
Your Directors are highly grateful for all the help guidance and support received fromthe valued customers suppliers vendors other business associates various governmentand local authorities as well as the various Banks.
The Board places on record its appreciation for the devoted and dedicated servicesrendered by all the employees in taking the Company forward.
| ||For and on behalf of the Board || |
| ||Snehdeep Aggarwal ||Ramesh Bhatia |
|New Delhi 25th May 2016 ||Managing Director ||Director |
| ||DIN. 00928080 ||DIN. 00052320 |
|FORM NO. MGT-9 || || |