Your Directors have pleasure in presenting the Twenty Fifth Annual Report togetherwith the audited accounts of the Company for the financial year ended 31st March 2017
|1. FINANCIAL SUMMARY || || |
| || ||(Rs. in lakhs) |
|Particulars ||31.03.2017 ||31.03.2016 |
|Revenue from operations ||1157.49 ||1312.28 |
|Other Income ||-- ||- |
|Total Income ||1157.49 ||1312.28 |
|Expenses ||1123.08 ||1245.87 |
|Profit before tax ||34.41 ||66.41 |
|Tax Expense ||10.85 ||15.31 |
|Profit after Tax ||23.56 ||51.10 |
|Earnings per share ||0.79 ||0.95 |
2. State of Company's Affairs:
The Company achieved a total turnover of Rs. 1157.49 lakhs for the year ended 31stMarch 2017 as compared to Rs. 1312.28 lakhs in the previous year. The profit before taxduring the year ended 31st March 2017 was Rs. 34.41 lakhs whereas the profit for theprevious year ended 31st March 2016 stood at Rs. 66.41 lakhs. During the year theCompany had undergone reduction of its paid up share capital of the Company as approved bythe Hon'ble High Court Judicature at Hyderabad for the states of Telangana and AndhraPradesh. Post reduction of its share capital the Company is planning to expand itsbusiness operations further.
3. Future Outlook
At present the Company is into dealing and trading in gold jewellery. In near futurethere are plans to manufacture the products on its own by setting up of its in-housemanufacturing unit. This would enable the Company to lower its overall processing andjobwork charges and the cost of production as a whole. As per the latest industry trendsthe demand is for branded jewellery with modern designs. Keeping the same in view it isproposed to introduce fresh range of products with creative and light weight jewelleryalong with uncut and flat diamond jewellery ranging from polki sets to chakri patterns.
In order to scale up the operations the Company requires working capital funds for thebusiness. In this regard it is also proposed to infuse further capital in the business byway of issuing share warrants convertible into equity shares on preferential basis. Thiswould boost its financial resources facilitate ease of operations and enhance itsbusiness on the whole.
In order to conserve resources for further expanding the Company's business yourDirectors have opined to not recommend any dividend for the year 2016-17.
Amount to be carried forward to the reserves Rs. 68.01 Lakhs.
6. Share Capital:
The paid up share capital of the Company is Rs. 29657100/- divided into 2965710equity shares of Rs. 10/- each at the financial year ended 31st March 2017. During theyear under review the Company had filed a petition with the Hon'ble High Court ofJudicature at Hyderabad for the States of Telangana and Andhra Pradesh for reduction ofits paid up share capital of the Company from Rs. 53922000/- divided into 5392200equity shares of Rs. 10/- each to Rs. 29657100/- divided into 2965710 equity sharesof Rs. 10/- each and the same was approved by the Hon'ble High Court. Further the Companyhas not issued and allotted any equity shares out of the unissued share capital during theyear under review.
7. Listing Agreement:
The shares of your Company are listed at BSE Ltd. The Company has duly complied withall the applicable provisions of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
Corporate Governance is all about ethical conduct transparency integrity andaccountability of an enterprise. The code of governance is based on the principles ofmaking all the necessary decisions and disclosures accountability and responsibilitytowards various stakeholders complying with all the applicable laws and a continuouscommitment of conducting business in a transparent and ethical manner.
The Corporate Governance Principles implemented by the Company seeks to protectrecognize and facilitate shareholders rights and ensure timely and accurate disclosure tothem. Your Company has been constantly reviewing and benchmarking itself withwell-established standards of Corporate Governance besides strictly complying with therequirements of the Companies Act 2013 and the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
It is to be noted that pursuant to Regulation 15 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the compliance with the Corporate Governanceprovisions as specified in Reg. 17-27 clauses (b) to (i) of Reg. 46(2) and para C D andE of Schedule V does not apply to your Company as its paid-up share capital doesnot exceed Rs. 10 Crores and net worth does not exceed Rs. 25 Crores as on the last dayof previous financial year ended 31st March 2017. However the Board of Directors and themanagement of the Company believe that the compliance of law should be in true letter andspirit and that the Company's legacy of fair transparent and ethical governance practicesshall be maintained.
8. Directors and Key Managerial Personnel:
In accordance with the provisions of Companies Act 2013 and the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Board of Directors of yourCompany is duly constituted with an optimum combination of executive and non-executivedirectors. The terms and conditions of appointment of independent directors are as perSchedule IV of the Act. They have submitted a declaration that each of them meets thecriteria of independence as provided in Section 149(6) of the Act and there has been nochange in the circumstances which may affect their status as independent director duringthe year.
Mrs. Bhavna Sanghi retires by rotation at the ensuing Annual General Meeting and beingeligible offer herself for re-appointment. Her profile is given elsewhere in the report.Your Directors recommend her re-appointment.
During the period Ms. Shreya Mangal has resigned as the Company Secretary andCompliance Officer of the Company with effect from 15th April 2017.
9. Number of Meetings of the Board:
i) The Board Meeting is duly called and convened by giving proper notice to all thedirectors of the Company. The Board is also authorized to pass any resolution of urgentnature by circulation subject to the compliance of provisions of Companies Act 2013.
ii) The Agenda for the meeting is prepared in consultation with the Managing Directorkeeping in view all the matters including operational matters to be discussed by theBoard.
iii) Notice of the Board Meeting and the notes to agenda are sent to all the Directorsof the Company in advance
iv) Any sensitive matter may be discussed at the meeting without prior intimation todirectors in exceptional circumstances.
v) Eleven (11) board meetings were held during the year and the gap between twomeetings did not exceed one hundred twenty days. The dates on which the said meetings wereheld are: 11.04.2016 30.05.2016 22.06.2016 12.08.2016 25.08.2016 14.11.201619.12.2016 11.01.2017 24.01.2017 13.02.2017 and 31.03.2017. The attendance of eachdirector at the Board Meetings is as follows:
|S. No. Name of Director ||Board Meeting |
| ||Held ||Attended |
|1 Shri Sanjay Kumar Sanghi ||11 ||10 |
|2 Shri Ritesh Kumar Sanghi ||11 ||10 |
|3 Smt. Bhavna Sanghi ||11 ||9 |
|4 Shri Siddharth Goel ||11 ||11 |
|5 Shri Ram Prasad Vempati ||11 ||11 |
|6 ShriVinod Agarwal ||11 ||9 |
The necessary quorum was present for all the meetings.
10. Declaration by Independent Directors:
The Company has received necessary declaration from each independent director underSection 149(7) of the Companies Act 2013 that they meet the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and Regulation 25 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
The terms and conditions for appointment of independent directors are available on thewebsite of the Company at www.narbadajewellery.com.
The Independent Directors of the Company have convened a meeting on 31stDecember 2016 exclusively without the presence of non-independent Directors and othermembers of management for the evaluation of the Board.
11. Board Evaluation:
The Board of Directors of the Company upon recommendation of Nomination andRemuneration Committee have laid down the criteria for performance evaluation of Boardits Committees and the individual Board Members including Independent Directors pursuantto the provisions of the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulation 2015.
The evaluation of the Board and its committees were based on the criteria coveringvarious assessment parameters like structure and composition frequency & duration ofmeetings its processes and procedures effectiveness of the Board/ committees itsfinancial reporting process under various regulations and/ or terms of reference of thecommittees etc.The criteria for evaluation of performance of the individual Directorsincluded various parameters viz. attendance & participation during the meetings theiractive contribution and discussions on important matters understanding of the Companyamong others. The performance evaluation of Independent Directors was done by the entireBoard and in the evaluation the Director who was subject to evaluation did notparticipate.
The Board Evaluation Policy specifying the manner and process of evaluation of theperformance of the Board is updated on the website of the Company atwww.narbadajewellery.com.
12. Managerial Remuneration
No remuneration is paid to the Managing Director or the Whole-time Directors of theCompany. The information required pursuant to Section 197 read with rule 5 of theCompanies (Appointment and Remuneration) Rules 2014 and Companies (Particulars ofEmployees) Rules 1975 in respect of employees of the Company and Directors is furnishedhereunder:
i) Median remuneration of the Company for all its employees is Rs 166720/- for theFinancial Year 2016-17.
ii) Details of percentage increase in the remuneration of each Director and CFO andCompany Secretary in the Financial Year 2016-17 are as follows:
|Name ||Designation ||Remuneration (in Rs.) ||Increase % |
| || ||2016-17 ||2015-16 || |
|Sanjay Kumar Sanghi ||Managing Director ||- ||- ||- |
|Ritesh Kumar Sanghi ||Director ||- ||- ||- |
|Bajranglal Agarwal ||Chief Financial Officer ||574880 ||79310* ||- |
|Bandana Sangai ||Company Secretary* ||37800* ||140000* ||- |
|Shreya Mangal ||Company Secretary* ||148800* ||- ||- |
*For part of the Financial Year 2016-17.
i) Percentage increase in the median remuneration of all employees in the financialyear 2016-17:
|Particulars ||2016-17 ||2015-16 ||Increase |
| ||(Amt in Rs.) ||(Amt in Rs.) ||(decrease)% |
|Median remuneration of all employees per annum ||166720/- ||154399/- ||7.98% |
Number of permanent employee on the rolls of the Company as on 31st March 2017 areless than 10
13. Familiarization Programme for Independent Directors:
The Company briefs its new Independent Directors on their roles rights as IndependentDirector and nature of the industry in which the Company operates etc. FamiliarizationProgramme for the Independent Directors provides them an opportunity to familiarize withthe Company its management and its operations so as to gain a clear understanding oftheir responsibilities and contribute significantly towards the growth of the Company.
The Company's Policy for familiarization of Independent Directors is updated at thewebsite of the Company at www.narbadajewellery.com
14. COMMITTEES OF THE BOARD:
The Board has constituted three committees at present:
Nomination and Remuneration Committee;
Stakeholders Relationship Committee
The Committees of the Board meet at regular intervals and have the requisite subjectexpertise to handle and resolve matters expediently. The Board oversees the functioning ofthe Committees. Detailed terms of reference composition meetings and other informationof each of the Committees of the Board is detailed herein below:
14A. AUDIT COMMITTEE:
The constitution of Audit Committee of the Board is incompliance with the provisions ofSection 177 of the Companies Act 2013 Regulation 18 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. The details of the members of the AuditCommittee and their attendance in the Committee meetings are as under:
|S. No. Name of the Director ||Category || |
Number of meetings during the FY 2016-17
| || ||Held ||Attended |
|1. Shri Ram Prasad Vempati Chairman ||Independent Non- Executive ||4 ||4 |
|2. Shri Siddharth Goel ||Independent Non- Executive ||4 ||4 |
|3. Shri Vinod Agarwal ||Independent Non- Executive ||4 ||4 |
Four (4) Audit committee meetings were held during the year and the gap between twomeetings did not exceed one hundred twenty days. The dates on which the said meetings wereheld are as follows: 30.05.2016 12.08.2016 14.11.2016 and 13.02.2017.The necessaryquorum was present for all the meetings.
The terms of reference of the Audit Committee are broadly given under:
The recommendations for appointment remuneration and terms of appointment ofauditors of the Company;
Review and monitor the auditor's independence and performance and effectivenessof audit process
Examination of the financial statement and the auditors' report thereon;
Approval or any subsequent modification of transaction of the company withrelated parties;
Scrutiny of inter-corporate loans and investments;
Valuation of undertakings or assets of the Company wherever it is necessary;
Evaluation of internal financial controls and risk management systems;
Monitoring the end use of funds raised through public offers and related matters
Review the functioning of the whistle blower mechanism.
Approval of transactions with related parties
14B. NOMINATION AND REMUNERATION COMMITTEE:
The constitution of Nomination and Remuneration Committee is in compliance with therequirements of provisions of Section 178 of the Companies Act 2013 Regulation 19 ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
The Nominations and Remuneration Committee constituted by the Company is responsiblefor looking into the remuneration payable to the Whole-time Directors and other Employeesof the Company. The Committee also approves the Remuneration Policy for employees otherthan Whole-time Directors of the Company as may be recommended to it. The Company'spolicy on Director's nomination and remuneration in accordance with Section 178 (3) of theCompanies Act 2013 is attached as Annexure I to this report.
The Nomination and Remuneration Committee of the Company as at 31.03.2017 comprises ofthree directors all of them being non-executive independent directors:
|S. No. ||Name of the Director ||Category ||Number of meetings during the FY 2016-17 |
| || || ||Held ||Attended |
|1. ||Shri Vinod Agarwal Chairman ||Independent Non- Executive ||2 ||2 |
|2. ||Shri Siddharth Goel ||Independent Non- Executive ||2 ||2 |
|3. ||Shri Ram Prasad Vempati ||Independent Non- Executive ||2 ||2 |
During the year under review two meeting of the Committee was held on 16.05.2016 and20.06.2016 for formulation and evaluation of performance of Independent Directors and forassessment and recommendation for the appointment of Company Secretary and ComplianceOfficer of the Company respectively. Requisite quorum was present for the meeting.
14C. STAKEHOLDERS RELATIONSHIP COMMITTEE:
The Committee ensures cordial investor relations and oversees the mechanism forredressal of investors' grievances. The Committee specifically looks into redressingshareholders'/investors' complaints/ grievances pertaining to share transfersnon-receipts of annual reports and other related complaints
The composition of the Stakeholders' Relationship Committee and the details of meetingsattended by its members are given below:
|S. No. ||Name of the Director ||Category ||Number of meetings during the FY 2016-17 |
| || || ||Held ||Attended |
|1. ||Shri Vinod Agarwal Chairman ||Independent Non- Executive ||8 ||8 |
|2. ||Shri Siddharth Goel ||Independent Non- Executive ||8 ||8 |
|3. ||Shri Ram Prasad Vempati ||Independent Non- Executive ||8 ||8 |
The meetings of the stakeholders' relationship committee were held on 11.04.201630.06.2016 12.08.2016 10.11.2016 31.12.2016 20.01.2017 13.02.2017 and 31.03.2017during the year mainly for approval of share transfers transmission and issue ofduplicate share certificate.
15. Code of Conduct:
In compliance with the SEBI (Listing Obligations and Disclosure Requirements)Regulation 2015 and the Companies Act 2013 the Company has framed and adopted a Code ofConduct. The Code is applicable to the members of the Board the executive officers themembers of the management one level below the executive directors including allfunctional heads of the Company. The Code is available on the website of the Company -www.narbadajewellery.com.All members of the Board the executive officers and seniorfinancial officers have affirmed compliance to the Code as on March 31 2017
16. Market performance of the Company during the Financial Year 2016-17
17. Vigil Mechanism:
In accordance with Section 179(9) & (10) of the Companies Act 2013 the Companyhas adopted vigil mechanism for directors and employees to report concerns aboutunethical behavior actual or suspected fraud or violation of the Company's code ofconduct and ethics. The Vigil Mechanism/ Whistle Blower policy is available on theCompany's website www.narbadajewellery.com
A. Statutory Auditors:
The Company had appointed M/s Venugopal & Chenoy Chartered Accountants Hyderabad(Firm Regn No. 004671S) as Statutory Auditors of the Company at the 22nd Annualgeneral Meeting of the Company to hold office till the conclusion of the Annual GeneralMeeting to be held in the calendar year 2017. Their term is about to expire at theconclusion of the ensuing Annual General Meeting. Therefore in accordance with Section139 of the Companies Act 2013 read with the Companies (Audit & Auditors) Rules 2014it is proposed to appoint M/s D.V Aditya & Co. Chartered Accountants (Firm Reg. No.000044S M. No. 0022646) Hyderabad as the Statutory Auditors of the Company subject tothe approval of the members at the ensuing Annual General Meeting.
B. Secretarial Auditor:
In terms of Section 204 of the Companies Act 2013 and rules made there under Mr. AjayS. Shrivastava Practicing Company Secretary Hyderabad (CP No.: 3479)has been appointedas Secretarial Auditor of the Company. The report of the Secretarial Auditor is enclosedas "Annexure II" to this report.
C. Internal Auditors:
The Company has appointed M/s Krishna and Suresh Chartered Accountant Hyderabad (FirmRegn No- 001461S) as its Internal Auditor. Their scope of work includes review ofprocesses for safeguarding the assets of the Company review of operational efficiencyeffectiveness of systems and processes and assessing the internal control strengths inall areas.
19. Risk Management:
Risk Management framework of your Company encompasses practices relating to theidentification analysis evaluation treatment mitigation and monitoring of the externaland operational controls risks to achieve our key business objectives. The Board seeks tominimize the adverse impact of the risks thus enabling the Company to leverage marketopportunities effectively and enhance its long-term competitive advantage.
20. Extract of Annual Return:
Pursuant to the provisions of Section 92(3) of the Companies Act 2013 read with Rule12(1) of the Companies (Management and Administration) Rules 2014 an extract of annualreturn in Form MGT-9 is attached as a part of this Annual Report as "AnnexureIII".
21. Adequacy of Internal Financial Controls with reference to the Financial Statements:
The details in respect of internal financial control and their adequacy are included inthe Management Discussion & Analysis which forms part of this report.
22. Material Changes affecting the Financial Position of the Company:
There are no material changes between the date of balance sheet and the date of thisreport that would affect the financial position of the company.
23. Management Discussion and Analysis Report:
The Management Discussion and Analysis for the year ended 31st March 2017are attached which form part of this report.
24. Conservation of Energy Technology Absorption and Foreign Exchange Earnings andOutgo:
A. Conservation of Energy
The disclosure of particulars with respect to conservation of energy pursuant toSection 134 (3) (m) of the Companies Act 2013 read with rule 8(3) of the Companies(Accounts) Rules 2014 are not applicable as our business is not specified in the Schedule. However the Company makes its best efforts to conserve energy in a more efficient andeffective manner.
B. Technology Absorption
The company has not carried out any specific research and development activities.Accordingly the information related to technology absorption adaptation and innovationis reported to be NIL.
C. Foreign Exchange Earnings and Outgo
During the financial year 2016-17 there were NIL Foreign Exchange Earnings &Outgo.
25. Corporate Social Responsibility (CSR):
As the Company's net worth does not exceed Rs. 500 crores or Company's turnover doesnot exceed Rs. 1000 crores or the Company's net profit does not exceed Rs. 5 crore for anyfinancial year the provisions of section 135 of the Companies Act 2013 are notapplicable.
26. Directors' Responsibility Statement:
Your Directors would like to inform the members that the audited accounts for the yearended 31st March 2017 are in full conformity with the requirement ofthe Act and they believe that the financial statements reflect fairly the form andsubstance of transactions carried out during the year and reasonably present the Company'sfinancial condition and results of operations. These financial statements are audited bythe Statutory Auditors M/s Venugopal & Chenoy.
Pursuant to the requirement of Section 134(5) of the Companies Act 2013 yourDirectors further confirm that:
i) In the preparation of the Annual Accounts the applicable Accounting Standards havebeen followed along with proper explanations relating to material departures;
ii) The Directors have 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;
iii) The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv) The Directors have prepared the annual accounts on a going concern basis.
v) The directors in case of listed company have laid down internal financial controlsto be followed by the company and such controls are adequate and are operatingeffectively.
vi) The Directors have devised proper system to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and are operating effectively.
27. Particulars of Employees:
There are no employees drawing remuneration equal or more than the limits specified inCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
28. Details of Subsidiary/Joint Ventures/Associate Companies:
There are no subsidiaries or joint ventures to the Company as on the date of thisreport.
29. Deposits from Public:
The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet.
30. Particulars of Loans Guarantees or Investments under Section 186:
The Company has not given any loan or guarantee or security or made any investmentduring the financial year in terms of Section 186 of the Companies Act 2013.
31. Particulars of Contracts or Arrangements with Related Parties:
The particulars of every contract or arrangements entered into by the Company withrelated parties referred to in sub-section (1) of section 188 of the Companies Act 2013is disclosed in Form AOC-2 as "Annexure IV" to this report.
The Directors thank the Company's employees customers vendors and investors for theircontinuous support. The Directors also wish to place on record its appreciation of BanksStock Exchange & Other authorities for their able guidance and support.
|Date: 16.10.2017 || || |
|Place: 3-6-290/18 1st Floor Sadana building Hyderguda Hyderabad- 500029 || ||For and on behalf of Board of Directors |
| ||Sd/- ||Sd/- |
|(Sanjay Kumar Sanghi) || ||(Ritesh Kumar Sanghi) |
|Managing Director || ||Director |
| ||DIN: 00629693 ||DIN: 00628033 |