To The Members
Your Directors have pleasure in presenting the Twenty Fourth Annual Reporttogether with the audited accounts of the Company for the Financial Year ended 31stMarch 2016
1. FINANCIAL SUMMARY
(Rs. in lakhs)
|Particulars ||31.03.2015 ||31.03.2014 |
|Revenue from operations ||1312.28 ||1640.67 |
|Other Income ||- ||- |
|Total Income ||1312.28 ||1640.67 |
|Expenses ||1245.87 ||1588.58 |
|Profit before tax ||66.41 ||52.09 |
|Tax Expense ||15.31 ||10.32 |
|Profit after Tax ||51.10 ||41.77 |
|Earnings per share ||0.95 ||0.77 |
2. STATE OF COMPANYS AFFAIR
During the Financial Year 2015-16 the revenue from operations was Rs. 1312.28 Lakhs ascompared to Rs. 1640.67 Lakhs in the previous year. Though the revenue from operations hasdecreased but the overall performance of the Company demonstrates growth and development.The gems and jewellery industry was faced with slowdown in the world economy whichreduced the demand of luxury goods. Also the gems and jewellery sector has expresseddisappointment over the government's proposal to impose 1% excise duty in Budget 2016.Although as compared to previous year the Company's profit has increased from Rs. 52.09Lakhs to Rs. 66.41 Lakhs the Earning per share of the Company during the reportingperiod demonstrates the improved financial position of the Company.
3. REDUCTION OF CAPITAL:
The Company has filed a Petition for approval/confirmation of the Special resolutionpassed by the Members in Extra Ordinary General Meeting held on 23rd May 2016 for Schemeof Reduction of Capital with the Hon'ble High Court of Telangana and Andhra Pradesh inaccordance with Section 100-102 of the Companies Act 1956 proposing to set-off theAccumulated losses against the Paid-up share capital of the Company. The Company isseeking to reconstruct and restructure its capital by way of writing-off its accumulatedbusiness loss against the reduction of its paid up capital which is not represented byavailable assets. This restructuring of capital will enable the Company to approach forfinancial assistances in order to develop its business and thereby increase its net worthto enhance the stakeholders' value.
In order to conserve resources for further expanding the Company's business yourDirectors have opined to not recommend any dividend for the year 2015-16.
Amount to be carried forward to the reserves Rs. 51.10 Lakhs.
5. SHARE CAPITAL
The paid up share capital of the Company is Rs. 53922000/- divided into 5392200equity shares of Rs. 10/- each at the year end. During the year under review the Companyhas not issued and allotted any equity shares out of the unissued share capital.
6. LISTING AGREEMENT:
The Securities and Exchange Board of India (SEBI) in September2015 issued SEBI(Listing Obligations and Disclosure Requirements)Regulations 2015 with the aim toconsolidate and streamline the provisions of the Listing Agreement and the Companies Act2013 for different segments of capital markets to ensure better enforceability. The saidregulations were effective from1st December 2015. Accordingly all listed entities wererequired to enter into the Listing Agreement within six months from the effective date.The Company entered into Listing Agreement with BSE Limited.
The shares of your Company are listed at BSE Ltd. Madras Stock Exchange Limited(De-recognised) and Delhi Stock Exchange Association Limited (De-recognised). The Companyhas duly complied with all the applicable provisions of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
Corporate governance is an ethically driven business process that is committed tovalues aimed at enhancing an organization's brand and reputation. This is ensured bytaking ethical business decisions and conducting business with a firm commitment tovalues while meeting stakeholders' expectations. This is vital to gain and retain thetrust of our stakeholders. Your Company has been constantly reviewing and benchmarkingitself with well-established standards of Corporate Governance besides strictly complyingwith the requirements of the Companies Act 2013 and the SEBI (Listing Obligations andDisclosure Requirements) 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 networth does not exceed Rs. 25 Crores as on the last day ofprevious financial year. Although the Board of Directors and the management of theCompany believes that the compliance of law should be in true letter and spirit and thatthe Company's legacy of fair transparent and ethical governance practices shall bemaintained.
7. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
In accordance with the provisions of the Companies Act 2013 and the SEBI (ListingObligations and Disclosure Requirements) Rules 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.
Mr. Ritesh Kumar Sanghi retires by rotation at the ensuing Annual General Meeting andbeing eligible offer himself for re-appointment. His profile is given elsewhere in thereport. Your Directors recommend his re-appointment.
As per Section 203 of Companies Act 2013 your Company has appointed Mr. BajranglalAgarwal as the Chief Financial Officer of the Company considering his expertise andexperience. During the period under review Ms. Bandana Sangai has resigned as the CompanySecretary of the Company. Ms. Shreya Mangal an Associate Member of the Institute ofCompany Secretaries of India was appointed as the Company Secretary and ComplianceOfficer of the Company as per Section 203 of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Rules 2015.
8. NUMBER OF MEETINGS OF THE BOARD: i) The Board Meeting is duly called andconvened by giving proper notice to all the directors of the Company. The Board is alsoauthorized to pass any resolution of urgent nature by circulation subject to thecompliance 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 theDirectors of the Company in advance iv) Any sensitive matter may be discussed at themeeting without prior intimation to directors in exceptional circumstances. v) Seven (7)board meetings were held during the year and the gap between two meetings did not exceedone hundred twenty days. The dates on which the said meetings were held are: 29.05.201504.08.2015 27.08.2015 29.09.2015 13.11.2015 31.12.2015 and 12.02.2016. The attendanceof each director at the Board Meetings is as follows:
|S. No. ||Name of Director ||Board Meeting |
| || ||Held ||Attended |
|1 ||Shri Sanjay Kumar Sanghi ||7 ||7 |
|2 ||Shri Ritesh Kumar Sanghi ||7 ||5 |
|3 ||Shri Siddharth Goel ||7 ||7 |
|4 ||Shri Ram Prasad Vempati ||7 ||6 |
|5 ||Shri Vinod Agarwal ||7 ||6 |
|6 ||Smt. Bhavna Sanghi ||7 ||7 |
The necessary quorum was present for all the meetings.
9. DECLARATION BY INDEPENDENT DIRECTORS:
The Company has received necessary declaration from each independent director underSection 149(7) of the Companies Act2013 that they meet the criteria of independence laiddown in Section 149(6) of the Companies Act 2013 and Regulation 25 of SEBI(ListingObligations and Disclosure Requirements) Regulations 2015.
The terms and conditions of appointment of independent directors is provided in
The Independent Directors of the Company have convened a meeting on 12th February2016 exclusively without the presence of non-independent Directors and other members ofmanagement for the evaluation of the Board.
10. BOARD EVALUATION: .
SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 mandates thatthe Board shall monitor and review the Board evaluation framework. The Companies Act 2013states that a formal annual evaluation needs to be made by the Board of its ownperformance and that of its committees and individual directors.
The performance of the Board was evaluated after seeking inputs from all the directorson the basis of the criteria such as the Board composition and structure effectiveness ofboard processes information and its functioning. In a separate meeting of independentDirectors performance of non-independent directors performance of the board as a wholeand performance of the Chairman was evaluated taking into account the views of executivedirectors and non-executive directors.The Board approved the evaluation results ascollated by the nomination and remuneration committee.
The Board Evaluation Policy specifying the manner and process of evaluation of theperformance of the Board is attached as "Annexure -II" to this report.
11. 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 154399/-for the Financial Year 2015-16. ii) The ratio of the remuneration of each director to themedian remuneration of the employees of the company for the financial year 2015-16.- N.A.Since no remuneration is being paid to the directors. iii) Details of percentageincrease in the remuneration of each Director and CFO and Company Secretary in theFinancial Year 2015-16 are as follows:
|Name ||Designation || |
Remunermation (in Rs.)
| || ||2015-16 ||2014-15 ||Increase % |
|Sanjay Kumar Sanghi ||Managing Director ||- ||- ||- |
|Ritesh Kumar Sanghi ||Director ||- ||- ||- |
|Bajranglal Agarwal ||Chief Financial Officer* ||79310* ||- ||N.A. |
|Bandana Sangai ||Company Secretary ||140000* ||- ||N.A. |
* For part of the current year only. iv) Percentage increase in the medianremuneration of all employees in the financial year 2015-16:
|Particulars ||2015-16 (Amt in Rs.) ||2014-15 (Amt in Rs.) ||Increase /decrease)% |
|Median remuneration of all employees per annum ||154399/- ||85877/-* ||N.A. |
* For part of the previous year only. v) Number of permanent employee on the rolls ofthe Company as on 31st March 2016 are less than 10 members.
12. FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS:
At the time of appointment of an independent director the Company issues a formalletter of appointment outlining his/her role function duties and responsibilities as adirector. The Company's Policy for familiarization of Independent Directors is annexed as "Annexure-III" to this report.
13. COMMITTEES OF THE BOARD:
The establishment of board committees can brings more focus to the board's oversight.They improve the effectiveness of the Board in areas where more focus and specializationis deemed necessary. Presently the Board has constituted three committees:
Nomination and Remuneration committee;
Stakeholders Relationship committee
13A. AUDIT COMMITTEE:
The Audit Committee of the Company is constituted in line with the provisions of theerstwhile Listing Agreement present SEBI Listing regulations read with Section 177 of theCompanies Act 2013.The composition of the audit committee and the details of meetingsattended by its members is given under:
|S No. ||Name of the Director ||Category ||Number of meetings during the FY 2015-16 |
| || || ||Held ||Attended |
|1. ||Shri Ram Prasad Vempati - (Chairman) ||Independent Non- Executive ||5 ||4 |
|2. ||Shri Siddharth Goel ||Independent Non- Executive ||5 ||5 |
|3. || || || || |
| ||Shri Vinod Agarwal ||Independent Non- Executive ||5 ||5 |
Five (5) 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: 29.05.2015 04.08.2015 29.09.2015 13.11.2015 and 12.02.2016.Thenecessary quorum 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
13B. NOMINATION AND REMUNERATION COMMITTEE:
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 Non-Executive Directors of the Company are not entitled for anyremuneration other than fee payable for attending Board and Committee Meetings. TheCommittee frames the policy on specific remuneration packages for Whole-time Directorsincluding pension rights and compensation payments. The Committee also approves theRemuneration Policy for employees other than Whole-time Directors as may be recommended toit. The said policy is attached as "Annexure-IV" to this report.
The Nomination and Remuneration Committee of the Company as at 31.03.2016 comprises ofthree directors all of them being non-executive independent directors:
|S. No. ||Name of the Director ||Category ||Attendance |
|1. ||Shri Vinod Agarwal- (Chairman) ||Independent Non- Executive ||Present |
|2. ||Shri Siddharth Goel ||Independent Non- Executive ||Present |
|3. ||Shri Ram Prasad Vempati ||Independent Non- Executive ||Present |
During the year under review one meeting of the Committee was held on 12.02.2016 forassessment and recommendation for the appointment of Chief Financial Officer of theCompany. Requisite quorum was present for the meeting.
13C. STAKEHOLDERS RELATIONSHIP COMMITTEE:
The Company has a Stakeholders Relationship Committee to look into the redressal ofcomplaints of investors such as transfer or credit of shares non-receipt ofdividend/notices/ annual reports etc.
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 uring the FY 2015-16 |
| || || ||Held ||Attended |
|1. ||Shri Vinod Agarwal (Chairman) ||Independent Non- Executive ||6 ||6 |
|2. ||Shri Siddharth Goel ||Independent Non- Executive ||6 ||6 |
|3. ||Shri Ram Prasad Vempati ||Independent Non- Executive ||6 ||6 |
The meetings of the stakeholders' relationship committee were held on 11.05.201530.06.2015 20.07.2015 20.10.2015 02.12.2015 and 30.01.2016 during the year mainly forapproval of share transfers.
14. 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 2016
15. Market performance of the Company during the Financial Year 2015-16
16. 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 http:// www.narbadajewellery.com/investors/downloads.
A. Statutory Auditors:
At the 22nd Annual General Meeting of the Company M/s Venugopal & ChenoyChartered Accountants Hyderabad (Firm Regn No. 004671S) were appointed as StatutoryAuditors of the Company to hold office till the conclusion of the Annual General Meetingto be held in the calendar year 2017. In terms of the first proviso to Section 139 of theCompanies Act 2013 the appointment of the auditors shall be placed for ratification atevery Annual General Meeting. Accordingly the appointment of M/s Venugopal & ChenoyChartered Accountants as statutory auditors of the Company is placed for ratification bythe shareholders.
The Auditors' Report does not contain any qualification/ reservation or adverse remark.Notes to Accounts and Auditor's remarks in their report are self-explanatory and do notcall for any further comments.
B. Secretarial Auditor:
In terms of Section 204 of the Companies Act 2013 and rules made thereunder Mr. AjayS. Shrivastava Practicing Company Secretary Hyderabad (CP No.: 3479)has been appointedSecretarial Auditor of the Company. The report of the Secretarial Auditor is enclosed as "Annexure-V"to this report. The report is self-explanatory and does not contain any qualificationreservation or adverse remark.
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.
18. 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.
19. EXTRACT OF ANNUAL RETURN:
Pursuant to the provisions of Section 92(3) of the Companies Act2013 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 "Annexure-VI".
20. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL
The details in respect of internal financial control and their adequacy are included inthe Management Discussion & Analysis which forms part of this report.
21. 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.
22. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
The Management Discussion and Analysis for the year ended 31st March 2016 areattached which form part of this report.
23. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO: 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.
CONSERVATION OF ENERGY:
|1. The steps taken or impact on conservation of energy. ||NIL |
|2. The steps taken by the company for utilizing alternate sources of energy. ||NIL |
|3. The capital investment on energy conservation equipment's. ||NIL |
|1. The efforts made towards technology absorption. ||Since the Company is not engaged in any technology driven business the information in connection with technology absorption is NIL. |
|2. The benefits derived like product improvement cost reduction product development or import substitution. ||NIL |
|In case of imported technology (imported during the last three years reckoned from the beginning of the financial year)- || |
|- the details of technology imported || |
| ||NIL |
|3. the year of import; || |
|- whether the technology been fully absorbed: || |
|- if not fully absorbed areas where absorption has not taken place and the reasons thereof. || |
|4. The expenditure incurred on Research and Development. ||NIL |
FOREIGN EXCHANGE EARNINGS AND OUTGO:
Particulars of foreign currency earnings and outgo during the financial year are NIL.
24. 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.
25. DIRECTORS' RESPONSIBILITY STATEMENT:
Your Directors would like to inform the members that the audited accounts for the yearended 31st March 2016 are in full conformity with the requirement of the Act and theybelieve that the financial statements reflect fairly the form and substance oftransactions carried out during the year and reasonably present the Company's financialcondition and results of operations. These financial statements are audited by theStatutory Auditors M/s Venugopal & Chenoy. Pursuant to the requirement of Section134(5) of the Companies Act 2013 your Directors further confirm that: i) In thepreparation of the Annual Accounts the applicable Accounting Standards have been followedalong with proper explanations relating to material departures; ii) The Directors haveselected such accounting policies and applied them consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company at the end of the financial year and of the profit and Loss ofthe Company for that period; iii) The Directors have taken proper and sufficient care forthe maintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; iv) The Directors have prepared the AnnualAccounts on a going concern basis. v) The directors in case of Listed Company have laiddown internal financial controls to be followed by the Company and such controls areadequate and are operating effectively. vi) The Directors have devised proper system toensure compliance with the provisions of all applicable laws and that such systems areadequate and are operating effectively.
DISCLOSURES 26. 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.
27. DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES:
There are no subsidiaries or joint ventures to the Company as on the date of thisreport.
28. 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.
29. 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.
30. 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 -VII" 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 : 25.08.2016 || |
|Place : 3-6-290/18 1st Floor Sadana Building || |
|Hyderguda Hyderabad- 500029 ||For and on behalf of the Board |
|Sd/- ||Sd/- |
|(Sanjay Kumar Sanghi) ||(Ritesh Kumar Sanghi) |
|Managing Director ||Director |
|DIN: 00629693 ||DIN: 00628033 |
|Address:8-2-686/DR/7 ||Address:8-2-686/DR/7 |
|Road No. 12 Banjara Hills ||Road No. 12 Banjara Hills |
|Hyderabad - 500034 ||Hyderabad - 500034 |