Baba Arts Limited
Your Company s Board of Directors ( Board ) is pleased to present the Twenty SecondAnnual Report of Baba Arts Limited ( Company ) for the financial year ended 31st March2021.
In Compliance with the applicable provisions of the Companies Act 2013 (including anystatutory modification(s) or re-enactment(s) thereof for time being in force) ( the Act )and the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ( Listing Regulations ) this report covers the financialresults and other developments during the financial year ended 31st March 2021 and uptothe date of Board Meeting held on 24th June 2021 to approve this Report in respect ofBaba Arts Limited.
l FINANCIAL RESULTS
| || ||(Rs. in Thousands) |
|Particulars ||March 31 2021 ||March 31 2020 |
| ||As per IND AS |
|Revenue from Operations ||133212.27 ||1787.19 |
|Other Income ||11969.83 ||11320.00 |
|Total Income ||145182.10 ||13107.19 |
|Total Expenditure ||112992.40 ||8516.01 |
|Profit Before Tax ||32189.70 ||4591.18 |
|Less: Tax Expenses || || |
|Current Tax ||3642.27 ||647.10 |
|MAT Credit Entitlement ||(185.26) ||(303.17) |
|Prior Year Short Provision of Tax ||19.25 ||2.96 |
|Deferred Tax ||677.53 ||(293.98) |
|Net Profit /(Loss) for the Year ||28035.91 ||4538.27 |
In order to strengthen the reserves of the Company your directors consider it prudentto plough back the profits and not to recommend any dividend for the financial year2020-21.
l REVIEW OF OPERATIONS
During the year under review income from Post Production activity decreased to Rs.739.07 Thousand from Rs.1768.34 Thousand in the previous year. Your Company earned incomefrom trading in IPR of Rs.132473.20 Thousands in the current year. After providing fordepreciation of Rs. 453.45 Thousand (Previous Year Rs. 397.68 Thousand) Current Tax (Netof MAT Credit entitlement) of Rs. 3457.01 Thousand (Previous Year Rs. 343.93 Thousand)prior year short provision of tax of Rs. 19.25 Thousand (Previous Year Rs. 2.96 Thousand)providing for Deferred Tax Liability of Rs. 677.53 Thousand (Previous Year Deferred TaxAssets of Rs. 293.98 Thousand) your Company earned Net Profit after tax of Rs.28035.91Thousand vis--vis Net Profit after tax of Rs. 4538.27 Thousand in the previous year.Other Comprehensive Income for the year was Rs. 68.04 Thousand (Previous Year OtherComprehensive Expense Rs. 207.23 Thousand).
l TRANSFER TO RESERVES
Your directors have proposed not to transfer any amount to reserves.
l CHANGES IN NATURE OF BUSINESS IF ANY
There is no change in the nature of business during the year under review.
l MATERIAL CHANGES BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THIS REPORT
There have been no material changes and commitments affecting the financial positionof the Company which have occurred between the end of the financial year of the Companyto which the financial statements relate and the date of signing of this report.
Second wave of global pandemic COVID 19 has once again affected the businessactivities across all sectors of economy. The Company has considered the possible effectsthat may result from COVID 19 in the preparation of these financial results. The Companybelieves that the pandemic is unlikely to impact on the recoverability of the carryingvalue of its assets as at 31st March 2021. Looking to the present situation of pandemicthe extent to which the same will impact company s future financial results is currentlyuncertain and will depend on future development.
The board and the management will continue to closely monitor the situation as itevolves and do its best to take all necessary measures in the interest of allstakeholders of the Company.
l BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
Shri Santosh A. Shah and Shri Sanjiv L. Hinduja hold office as Independent Directors ofthe Company up to 31st March 2024.
Pursuant to the recommendation of Nomination and Remuneration Committee ( NRC ) theBoard of Directors has appointed Ms. Juhi V. Pania as Additional Director in the categoryof Independent Non-Executive Director with effect from 15th June 2021 and she holdsoffice up to the date of the forthcoming Annual General Meeting ( AGM ). The Company hasreceived notice from a Member in writing proposing her candidature as Director of theCompany.
The Board recommends for the approval of the members by way of an Ordinary Resolutionthe appointment of Ms. Juhi V. Pania as an Independent Director on the Board for a periodof 5 consecutive years effective from 15th June 2021 under item no. 3 of the accompanyingnotice of the 22nd AGM of the Company.
In terms of Section 152 of the Companies Act 2013 Shri Gordhan P. Tanwani (DIN00040942) Managing Director retires by rotation at the forthcoming AGM and is eligiblefor re-appointment. Shri Gordhan P. Tanwani has confirmed that he is not disqualified forappointment as Director under Section 164 of the Act and has offered himself forre-appointment.
The necessary resolution for re-appointment of Shri Gordhan P. Tanwani forms part ofthe notice convening the AGM scheduled to be held on Wednesday the 22nd September 2021.
A brief resume of directors being appointed / re-appointed along with the nature oftheir expertise their shareholding in your Company and other details as stipulated underRegulation 36(3) of the Listing Regulations is given in the notice convening the 22nd AGMof the Company to be held on Wednesday the 22nd September 2021.
KEY MANAGERIAL PERSONNEL
Shri Ajay D. Acharya Chief Financial Officer and Shri Naishadh H. Mankad CompanySecretary continue to be Key Managerial Personnel (KMP) of the Company in compliance withthe requirements of Section 203 of the Companies Act 2013.
In terms of Section 149 of the Act Shri Santosh A. Shah Shri Sanjiv L. Hinduja andMs. Juhi V. Pania are Independent Directors of the Company. They are not liable to retireby rotation in terms of Section 149(13) of the Act.
Pursuant to Section 149(7) of the Companies Act 2013 the Company has receiveddeclarations from all Independent Directors confirming that they meet criteria ofindependence as prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of theListing Regulations and are independent of the management.
In terms of Regulation 25(8) of the Listing Regulations the independent directors haveconfirmed that they are not aware of any circumstance or situation which exist or may bereasonably anticipated that could impair or impact their ability to discharge theirduties with an objective independent judgement and without any external influence.
The Board of Directors of the Company has taken on record the declaration andconfirmation submitted by the Independent Directors after undertaking due assessment ofthe veracity of the same.
The Board is of the opinion that the Independent Directors of the Company possessrequisite qualifications experience and expertise in the fields of Legal Accounts andFinance Governance etc. and that they hold highest standards of integrity.
The Independent Directors of the Company have confirmed that they have enrolledthemselves in the Independent Directors Databank maintained with the Indian Institute ofCorporate Affairs ( IICA ) in terms of Section 150 of the Act read with Rule 6 of theCompanies (Appointment & Qualification of Directors) Rules 2014. Further except Ms.Juhi V. Pania all Independent Directors are exempt from the requirement to undertake theonline proficiency self-assessment test conducted by IICA.
The Company has put in place an induction and familiarization programme for all itsdirectors including independent directors so as to acquaint themselves with the nature ofthe industry in which the Company operates. The Directors are periodically advised aboutthe changes effected in the Corporate Laws Listing Regulations Taxation Laws and otherstatutes applicable to the Company with regard to their roles rights andresponsibilities as Director of the Company. The familiarization programme for independentdirectors in terms of the provisions of Regulation 46(2) (i) of Listing Regulations isuploaded on the web site of the Company.
ANNUAL EVALUATION OF BOARD
Pursuant to regulation 17 of the Listing Regulations read with Section 134 (3)(p) ofthe Companies Act 2013 and The Companies (Accounts) Rules 2014 annual evaluation of theperformance of the Board its Committees and of individual directors has been made duringthe year under review. To facilitate the evaluation process the Nomination &Remuneration Committee of the Board has laid down the evaluation criteria for theperformance of Executive/Non-Executive / Independent Directors through a Boardeffectiveness survey. A questionnaire of the survey is designed with the objective ofreviewing the functioning and effectiveness of the Board. Each Board member is requestedto evaluate the effectiveness of the members of the Board (other than the Director beingevaluated) on the basis of information flow decision making of the directorsrelationship to stakeholders Company performance Company strategy and the effectivenessof the whole Board and its various committees on a scale of one to five.
Evaluation of Independent Directors is done on the basis of their role in GovernanceControl and Guidance and more particularly their performance in the following areas:
Their contribution towards monitoring the Company s corporate governancepractice
Their participation in formulating business strategies and
Their participation in Board and Committee meetings and generally fulfillingtheir obligations and fiduciary responsibilities as Directors of the Company.
BOARD AND COMMITTEES
NUMBER OF MEETINGS OF BOARD
During the financial year 4 (Four) Board Meetings were held on 20th June 2020 5thAugust 2020 6th November 2020 and 4th February 2021. The board meeting held on 20thJune 2020 was held with a gap of more than 120 days after the previous board meetingunder the relaxation granted by the Ministry of Corporate Affairs vide its circular dated24th March 2020 and Securities and Exchange Board of India (SEBI) vide its circular dated10th March 2020 to hold board meetings within a maximum gap of 180 days between twoconsecutive board meetings. The interval between other board meetings was well within themaximum allowed gap of 120 days.
COMMITTEES OF BOARD
As on 31st March 2021the Board had 3 (Three) Committees the Audit Committee theNomination & Remuneration Committee and the Stakeholders Relationship Committee.
A detailed note on the composition of Board and its committees and the number ofmeetings held and attendance of Directors at such meetings is provided in the CorporateGovernance Report which forms part of the Annual Report.
POLICY ON DIRECTORS APPOINTMENT & REMUNERATION
The Board has in accordance with the provisions of Sub-Section (3) of Section 178 ofthe Act formulated a policy setting out the criteria for determining qualificationspositive attributes independence of a director and policy relating to remuneration forDirectors Key Managerial Personnel and other employees. The text of the policy isavailable on the website of the Company www.babaartslimited.com.
RISK MANAGEMENT POLICY
The Board of Directors of your Company periodically assesses the risk in the internaland external business environment and takes necessary steps to mitigate the said risks.The Company has an adequate risk management plan in place which is reviewed at regularintervals by the Board.
VIGIL MECHANISM /WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy to provide a formal vigil mechanism tothe directors and employees to report their concerns about unethical behavior actual orsuspected fraud or violation of the Company s Code of Conduct or Ethics Policy. The policyprovides for adequate safeguards against victimization of employees who avail of themechanism and also provides for direct access to the Chairperson of the Audit Committee.It is affirmed that no personnel of the Company have been denied access to the AuditCommittee.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGSAND OUTGO:
The details of conservation of energy technology absorption foreign exchange earningsand outgo are as follows:
(A) Conservation of energy:
|Sr. No. Particulars ||Details |
|i. the steps taken or impact on conservation of energy ||Your Company s activities do not require substantial energy consumption. However the Company continues to lay emphasis on reducing energy consumption by constantly monitoring the consumption and taking steps to reduce wasteful use of energy. Employees are trained to switch off computers air conditioners and lights when not required. |
|ii. the steps taken by the company for utilizing alternate sources of energy. ||Not applicable in view of comments in clause (i) |
|iii. the capital investment on energy conservation equipments ||Not applicable in view of comments in clause (i) |
(B) Technology absorption:
|Sr. No. Particulars ||Details |
|I the effort made towards technology absorption ||The Company does not have any imported technology. |
|II the benefits derived like product improvement cost reduction product development or import substitution ||N.A. |
|III in case of imported technology (imported during the last three years reckoned from the beginning of the financial year) ||N.A. |
|a) the details of technology imported || |
|b) the year of import; || |
|c) whether the technology has been fully absorbed || |
|d) if not fully absorbed areas where absorption has not taken place and the reasons thereof IV the expenditure incurred on Research and Development ||Nil |
(C) Foreign Exchange Earnings and Outgo:
There was no Foreign Exchange Earnings and Outgo during the Financial Year.
The Company is engaged in providing post production services to entertainment industryin its post production studio and creating content for Television and also in filmproduction and distribution activity where there is not much scope for exports. TheCompany is selling overseas rights of films to domestic distributors. The Company did nothave any export income during the year.
l DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS
IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
There were no orders passed by regulators or courts or tribunals impacting the goingconcern status and Company s operations in future.
l DETAILS IN RESPECT OF ADEQUECY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL
The Company has in place adequate internal financial controls with reference tofinancial statements.
The Internal Auditor continuously monitors the efficiency of the internalcontrols/compliance with the objective of providing to Audit Committee and the Board ofDirectors an independent objective and reasonable assurance of the adequacy andeffectiveness of the organization s risk management control and governance processes.This system of internal control facilitates effective compliance of Section 138 of theAct and the Listing Regulations.
During the year such controls were tested and no reportable material weakness in thedesign or operation was observed.
l MAINTENANCE OF COST RECORDS
Maintenance of Cost Records as specified by the Central Government under Section 148(1)of the Act is not applicable to the Company.
M/s. Arunkumar K. Shah & Co. are the Statutory Auditors of the Company who wereappointed for a period of five years in the 18th Annual General Meeting held on 19thSeptember 2017 and hold office up to the conclusion of the 23rd Annual General Meeting ofthe Company.
Auditors have confirmed their eligibility and submitted a certificate in writing thatthey are not disqualified to hold the office of the Statutory Auditor.
There are no qualifications reservations or adverse remarks made by M/s. Arunkumar K.Shah & Co. Statutory Auditors in their report for the Financial Year ended 31stMarch 2021.
Pursuant to provisions of Section 143(12) of the Act the Statutory Auditors have notreported any incident of fraud to the Audit Committee of the Company during the year underreview.
Pursuant to Section 138 of the Act the Board of Directors of the Company has appointedM/s. SCA & Associates Chartered Accountants as the internal auditors of the Companyfor the financial year 2020-21.
The Audit Committee of Board of Directors in consultation with the Internal Auditorformulates the scope functioning periodicity and methodology for conducting the InternalAudit.
l ANNUAL RETURN
The Annual Return of the Company will be placed on the Company s Websitewww.babaartslimited.com after necessary certification and filing the same with theMinistry of Corporate Affairs.
An extract of the Annual Return as on 31st March 2021 is attached in Annexure I tothis Report.
l SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 the Company with approval of Boardappointed M/s Dholakia & Associates LLP Company Secretaries in whole time practice toundertake the Secretarial Audit of the Company for the financial year 2020-21. Thedetailed report on Secretarial Audit is appended as an Annexure II to this report. Thereis no qualification reservation or adverse remarks given by Secretarial Auditors of theCompany.
The Board at its meeting held on 24th June 2021 has reappointed M/s Dholakia &Associates LLP Company Secretaries in whole time practice for conducting SecretarialAudit of the Company for the financial year 2021-22.
Annual Secretarial Compliance Report
The Company has undertaken an audit for the financial year 2020-21 for all applicablecompliances as per Securities and Exchange Board of India Regulations and Circulars /Guidelines issued there under. The annual secretarial compliance report duly signed byShri Bhumitra V. Dholakia (ICSI Membership No. 977) Designated Partner of M/s Dholakia& Associates LLP Company Secretaries in whole time practice has been submitted to BSELimited within the stipulated time in compliance with the provisions of the Regulation24(A) of the Listing Regulations.
l PARTICULARS OF LOAN GUARANTEE AND INVESTMENTS
The particulars of loans/advances given guarantees/securities provided and investmentsmade during the year under review under Section 186 of the Act are given in Note No. 36of the notes forming part of the Financial Statements.
l CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A separate report on Corporate Governance is provided together with a Certificate fromStatutory Auditors of the Company regarding compliance of conditions of CorporateGovernance as stipulated under Schedule V of the Listing Regulations.
A certificate of the Managing Director (MD) and Chief Financial Officer (CFO) in termsof Regulation 17(8) as specified in Part B of Schedule II of the Listing Regulationsinert alia confirming the correctness of the financial statements and cash flowstatements adequacy of the internal control measures and reporting of matters to theAudit Committee is also annexed.
The Management Discussion Analysis Report as required under the Listing Regulations ispresented in separate section and forms part of this Annual Report.
l SEXUAL HARASSMENT
The provisions relating to constitution of Internal Complaints Committee under theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013is not applicable to the Company as the Company is having less than 10 employees. TheCompany did not receive any complaint of sexual harassment at workplace during the yearunder review.
Your Company has not invited / accepted any deposits from public under Section 73 toSection 76 of the Act hence the disclosures required as per Rule 8 (5) (v) and (vi) ofthe Companies (Accounts) Rules 2014 are not applicable to your Company.
l PARTICULARS OF CONTRACTS OR ARRANGMENT WITH RELATED PARTIES
All related party transactions that were entered into during the financial year underreview were on an arm s length basis and in ordinary course of business and were incompliance with the applicable provisions of the Act and the Listing Regulations.
All related party transactions are placed before the Audit Committee as also before theBoard for approval at every quarterly meeting. Details of transactions with relatedparties as required Under Section 134(3)(h) of the Act read with Rule 8(2) of theCompanies (Accounts) Rules 2014 are given in Annexure III in Form AOC -2 and forms partof this report.
Your Company has formulated a policy on related party transactions which is alsoavailable on Company s website at www.babaartslimited.com. l DETAILS OF POLICY DEVELOPEDAND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY
The provisions of the Section 135 of the Act are not applicable to the Company.
l PARTICULARS OF EMPLOYEES
The information required under Section 197 of the Act read with Rule 5(1) 5(2) &5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is given in Annexure IV.
l SHARE CAPITAL
The Company has only one class of shares viz. equity shares with a face value of Re.1/- each.
ISSUE OF EQUITY SHARES WITH DIFFERENTIAL RIGHTS
The Company has not issued equity shares with differential rights during the year underreview.
ISSUE OF SWEAT EQUITY SHARES
The Company has not issued sweat equity shares during the year under review.
ISSUE OF EMPLOYEE STOCK OPTIONS
The Company has not issued any Employee Stock Options during the year under review.
l SHARE CAPITAL AUDIT
Share Capital audit as per the directives of Securities & Exchange Board of Indiais being conducted on quarterly basis by M/s. Dholakia & Associates LLP CompanySecretaries in whole time practice and the Audit Reports are duly forwarded to BSE Limitedwhere the shares of the Company are listed.
l BUSINESS RESPONSIBILITY REPORT
The Business Responsibility Reporting as required by Regulation 34(2) of the ListingRegulations is not applicable to your Company for the financial year ended 31st March2021.
l GREEN INITIATIVES
Pursuant to Section 101 and 136 of the Act the Company has sent Annual Report throughelectronic mode (e-mail) to all shareholders who have registered their email addresseswith the Company or with Depository to receive the Annual Report through electronic modeand initiated steps to reduce consumption of paper.
In view of relaxation granted on account of prevailing pandemic COVID 19 Ministry ofCorporate Affairs vide its circular dated 5th May 2020 8th April 2020 13th April 2020and 13th January 2021 and Securities & Exchange Board of India vide its circulardated 12th May 2020 and 15th January 2021 physical copy of this annual report is notmailed to those shareholders whose e mail addresses are not registered with the Depositoryor with the Registrar and Transfer Agents of the Company. The annual report is howeveravailable on the web site of the Company www.babaartslimited.com.
l SUBSIDIARY JOINT VENTURES AND ASSOCIATE COMPANIES.
The Company does not have any Subsidiary Joint Venture and Associate Company.
l SECRETARIAL STANDARDS
The Company has in place proper systems to ensure compliance with the provisions of theapplicable Secretarial Standards issued by the Institute of Company Secretaries of Indiaand such systems are adequate and operating effectively. During the financial year underreview the Company was in compliance with Secretarial Standards i.e. SS 1 and SS 2relating to Meetings of Board of Directors and General Meetings respectively.
l DIRECTORS' RESPONSIBILITY STATEMENT
The financial statements are prepared in accordance with Indian Accounting Standards(Ind AS) under the historical cost convention on accrual basis except for certainfinancial instruments which are measured at fair values the provisions of the CompaniesAct2013 (to the extent notified) and guidelines issued by SEBI. The IND AS are prescribedunder Section 133 of the Companies Act 2013 read with Rule 3 of the Companies (IndianAccounting Standards) Rules 2015 and Companies (Indian Accounting Standards) AmendmentRules 2016. Accounting Policies have been consistently applied except where a newlyissued accounting standard is initially adopted or a revision to an existing accountingstandard requires a change in the accounting policy hitherto in use.
In accordance with Section 134(5) of the Companies Act 2013 your board of directorsconfirms that:
i) In the preparation of the annual accounts the applicable accounting standards readwith requirements set out under Schedule III to the Companies Act 2013 have been followedand there are no material departures from the said standards;
ii) The accounting policies have been consistently applied and reasonable and prudentjudgment and estimates have been made so as to give a true and fair view of the profit ofthe Company for the year ended on 31st March 2021 and the state of affairs of the Companyas at 31st March 2021 as disclosed in the enclosed accounts;
iii) Proper and sufficient care has been taken for maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
iv) The annual accounts have been prepared on a going concern basis.
v) They have laid down internal financial controls for the Company and such financialcontrols are adequate and operating effectively; and
vi) They have devised proper systems to ensure compliance with provisions of allapplicable laws and such systems are adequate and operating effectively.
The Board wishes to thank all the Company s customers vendors and Company s bankerswho have extended their continuous support to the Company.
Your Directors specially thank the shareholders of the Company for having reposed theirconfidence in the management of the Company and employees and technicians of the Companyat all levels for their dedicated services to the Company and the contribution made bythem towards working of the Company.
| ||For and on behalf of the Board of Directors |
| ||Gordhan P. Tanwani |
| ||Chairman & Managing Director |
| ||DIN: 00040942 |
|Place: Mumbai || |
|Date: 24th June 2021 || |