Your Directors are pleased to present the 40th Annual Reportstogether with the Audited Financial Statements of the Company for the year ended on 31stMarch' 2020.
| ||2019-2020 ||2018-2019 |
| ||(Rs. in lacs) ||(Rs. in lacs) |
|Revenue from Operations ||2578.06 ||1731.17 |
|Net Profit Before Taxation ||323.26 ||158.97 |
|Net Profit after taxation ||234.16 ||115.51 |
|Balance of Profit & Loss Account B/F ||1469.30 ||1354.28 |
|APPROPRIATIONS: || || |
|Transfer to General Reserve ||0.00 ||0.00 |
|Dividend Paid ||0.00 ||0.00 |
|Tax on Dividend paid ||0.00 ||0.00 |
|Taxes of earlier Years ||4.49 ||0.49 |
|Balance of Profit & Loss Account C/F ||1698.97 ||1469.30 |
OPERATION / PERFORMANCE:
During the year revenue from operations of your Company increased by 49% at Rs. 2578lacs as compared to Rs. 1731 lacs in the corresponding period of the previous year andProfit after Tax up by 103% at Rs. 234 lacs as compared to Rs. 115 lacs in thecorresponding period of the previous year.
EFFECT OF COVID-19 PANDEMIC
In last month of Financial Year 2020 the world has been affected with an unprecedentedpandemic COVID -19 which has adversely affected the lives and livelihood of the people ofthe virtually all countries. In India the Nationwide lock down started in the last weekof the March 2020 and fourth phase completed on 31" May 2020. During lock downperiod operation of the company almost closed and company main focus was to secureemployees health first. Some office work was done after getting necessary permissionsfrom the concerned local authorities and ensuring compliances related to Covid-19guidelines i.e. maintaining social distance mandatory to wear face mask propersanitizations cleaning hands thermal scanning.
The operation of the company had already been resumed with all security measures asdirected by government. The Company is following all relevant Government directives andguidelines regarding health and safety of the workers during work.
The Covid-19 certainly would have major negative impact on the export business as perthe market condition transportation demand and policy of the various countries. Howeverthe company is not expecting much future impact as major orders are not being cancelled bythe Foreign Buyers/Stores and once the situation become normal in US and other countriesthe company hope to give good results.
Based on the Company's performance during the year 2019-20 the Board of Directorsdecided not to recommend declaration of dividend.
TRANSFER TO RESERVES
No amount has been transferred to reserve. The closing balance of the retained earningsof the Company for F.Y. 2019 - 2020 after all appropriation and adjustments was 1698.97lacs.
DIRECTORS RESPONSIBILITY STATEMENT :
Pursuant to provisions of Section 134(5) of the Companies Act 2013 the Directorshereby state and confirm -
(a) in the preparation of the annual accounts the applicable accountingstandards had been followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied themconsistently except as required by accounting standards and other applicable law(s) andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company at the end of the financial year and of theprofit and loss of the company for that period;
(c) 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) the directors had prepared the annual accounts on a going concern basis; and
(e) the directors had laid down internal financial controls to be followed bythe company and that such internal financial controls are adequate and were operatingeffectively. () the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such sys f tems were adequate andoperating effectively. Based on the framework of internal financial controls andcompliance systems established and maintained by the Company work performed by theinternal statutory and secretarial auditors and external consultants including audit ofinternal financial controls over financial reporting by the statutory auditors and thereviews performed by management and the relevant board committees including the auditcommittee the board is of the opinion that the Company's internal financial controls wereadequate and effective during FY 2019-20.
PENDING PETITION WITH NCLT:
The Special Leave Petition vide no. 25165-25166/2007 had been disposed off by Hon'bleSupreme Court on 11.04.2018. The company had already complied and executed all thedirection given by Hon'ble Company law Board in its order dated 05.09.2007 and nothing ispending to be complied by the company and accordingly disclosed in Annual Report madethereafter. However Mr. Raj Kumar Gupta ex-director of the company who had notchallenged CLB orders has filed an Execution Petition No. 424/2018 before Hon'ble NCLT toget property of the company situated at Expo Mart Greater NOIDA which was neither partof CLB Petition No. 14/1999 nor mentioned in the list of properties to be transferred to 1stPetitioner (Mr. Raj Kumar Gupta group) in CLB final order dt. 04.07.2007 and modifiedorder dt. 03.08.2007. Mr. Raj Kumar Gupta Ex-director of the company had already made anapplication to get this property before Hon'ble Supreme Court in SLP No. 935-936/2010 andHon'ble Supreme Court finally dismissed the SLP with all pending applications. The presentExecution Petition 424/2018 filed by Mr. Raj Kumar Gupta before Hon'ble NCLT Allahabad ispending.. The Management does not reasonable expect that the Execution Petition whenultimately concluded and determined will have a material and adverse effect on theCompany's results of operations or financial condition.
MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT:
Management's Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 (SEBI LODR) is presented in a separate sectionforming part of the Annual Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL :
INDUCTIONS AND RETIREMENTS
CESSATION UPON COMPLETION OF TERM AS INDEPENDENT DIRECTORS-
During the year Shri Ashok Kumar Kapoor Shri Praveen Anand Singh and Shri TanmayDeva ceased from Directorship of the company with effect from January 21 2020 uponcompletion of their term as Independent Director. The Board places on record itsappreciation for their invaluable contribution and guidance.
APPOINTMENT OF ADDITIONAL AND INDEPENDENT DIRECTORS
Pursuant to the provisions of Section 149 of the Act Mr. Sushil Kumar Kandoi Mr. AnilKumar Gupta and Mr. Manan Kumar Sah were appointed to the Board as an additional andindependent director considering their integrity expertise and experience on January 172020 for a period of five years subject to the approval of shareholders at the 40th AGM.The notice convening the meeting sets out the details of each directors appointment. Asindependent directors they have submitted declarations that each of them meet the criteriaof independence as provided in Section 149(6) of the Act along with Rules framedthereunder and Regulation 16(1)(b) of the SEBI Listing Regulations.
Mrs. Shalini Chandra retires by rotation at the ensuing AGM and being eligible seeksreappointment. Based on the performance evaluation and recommendation of the nominationand remuneration committee the Board recommends her reappointment.
Further the tenure of Mrs. Shalini Chandra as Executive Director has expired on28.02.2020. Keeping her association and benefit to the company the Nomination andRemuneration Committee and the Board of Directors have recommended to re-appoint Mrs.Shalini Chandra (DIN 01036394) as Executive Director for further five years with effectfrom 28th February 2020.
During the year the non-executive directors of the Company had no pecuniaryrelationship or transactions with the Company other than the sitting fees to attend themeetings of the Company except few small transactions on arm's length basis with thecompany of Sri Manan Kumar Sah .
Pursuant to the provisions of section 203 of the Act the key managerial personnel ofthe Company are Mr. Ashok Kumar Gupta Chairman & Managing Director Mr. SiddharthGupta Chief Executive Officer and Managing Director Smt. Shalini Chandra ExecutiveDirector Mr. R.K. Singh Company Secretary and Mr Vinay Kumar Piyush CFO (who has beenappointed w.e.f. 01.04.2019.) There is no other changes in the key managerial personnelduring the year.
The detail of cessation appointment and reappointment are also available onwww.bblinvestor.com.
The Board of Directors has carried out on 29.05.2019 and on 16.01.2020 during the yearevaluation of its own performance board committees and individual directors pursuant tothe provisions of the Act SEBI Listing Regulations and the Guidance Note on BoardEvaluation issued by the Securities and Exchange Board of India on January 5 2017.
The performance of the board was evaluated by the board after seeking inputs from allthe directors on the basis of criteria such as the board composition and structureeffectiveness of board processes information and functioning etc.
The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of the criteria such as the composition of committeeseffectiveness of committee meetings etc.
The board and the nomination and remuneration committee reviewed the performance of theindividual directors on the basis of the criteria such as the contribution of theindividual director to the board and committee meetings like preparedness on the issues tobe discussed meaningful and constructive contribution and inputs in meetings etc. Inaddition the chairman was also evaluated on the key aspects of his role.
In separate meetings of independent directors performance of non-independentdirectors performance of the board as a whole and performance of the chairman wasevaluated taking into account the views of executive directors and non-executivedirectors. The same was discussed in the board meeting that followed the meeting of theindependent directors at which the performance of the board its committees andindividual directors was also discussed. Performance evaluation of independent directorswas done by the entire board excluding the independent director being evaluated.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS
The Company's policy on directors' appointment and remuneration and other mattersprovided in section 178(3) of the Act has been disclosed in the corporate governancereport which forms part of this report and same is available on www.bblinvestor.com.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The details in respect of internal financial control and their adequacy are included inthe management discussion & analysis which forms part of this report.
The details pertaining to composition of audit committee are included in the CorporateGovernance Report which forms part of this report.
At the thirty seventh AGM held on 28th September 2017 the members approvedappointment of M/s G D Dubey & Associates Chartered Accountants (Firm Registrationnumber 009836C) as Statutory Auditors of the Company to hold office for a period of fiveyears from the conclusion of that AGM till the conclusion of the 42nd AGMsubject to ratification of their appointment by Members at every AGM if so required underthe Act. The requirement to place the matter relating to appointment of auditors forratification by Members at every AGM has been done away by the Companies (Amendment) Act2017 with effect from May 7 2018. Accordingly no resolution is being proposed forratification of appointment of statutory auditors at this AGM and a note in respect of thesame has been included in Notice for this AGM.
The Statutory Auditor's Report does not contain any qualification reservation oradverse remark or disclaimer.
The Board has appointed M/s Ajay Jaiswal & Co. Company Secretaries to conductSecretarial Audit for the financial year 2019-20. The Secretarial Audit Report for thefinancial year ended 31st March 2020 is annexed herewith marked as AnnexureI to this report. The Secretarial Audit Report does not contain anyqualification reservation or adverse remark.
The board of directors of the Company has formed a risk management committee to frameimplement and monitor the risk management plan for the Company. The committee isresponsible for reviewing the risk management plan and ensuring its effectiveness. Theaudit committee has additional oversight in the area of financial risks and controls.Major risks identified by the businesses and functions are systematically addressedthrough mitigating actions on a continuing basis.
The development and implementation of risk management policy has been covered in themanagement discussion and analysis which forms part of this report.
The Company has a Whistle Blower Policy and has established the necessary vigilmechanism for directors and employees in confirmation with Section 177(9) of the Act andRegulation 22 of Listing Regulations to report concerns about unethical behavior. Thedetails of the policy is also available on www.bblinvestor.com.
EXTRACT OF ANNUAL RETURN
The extract of Annual Returns
[Pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014] as on the financial year ended on31.03.2020 is attached as Annexure- II with this Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO:
Information as per Section 134 (3) (m) of the Companies Act 2013 read with Companies(Accounts) Rules 2014 are furnished as under: a) Conservation of Energy : Theoperations of the Company involve low energy consumption. The solar power plant of 150 KVAis properly working and saving grid electricity. During the year 138476.48 KWH powergenerated and approx. 42600 KWH transferred to UP electricity board by this wayapproximately saving of around Rs. 11.52 lacs made to the company against electriccharges.
The other adequate measures are being taken to conserve the energy.
b) Technological Absorption:
The Company upgrades its technological inputs time to time for its products. Howeverpresently company has no collaboration arrangement with any foreign organization.
c) Foreign Exchange Earning and Outgo:
The actual foreign exchange earnings (inflow) of the Company during the financial yearhas been Rs 2416.04 lakhs from Exports of Glass Beads Handicrafts and other items. Theactual foreign Exchange Outflow during the year has been Rs. 209.12 lakhs for the importof materials foreign traveling expenses and other sales promotional activities.
Corporate Governance Report Management Discussion and Analysis statement and BusinessResponsibility Report and a certificate from the Auditors confirming compliance areannexed herewith to this report.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANYOCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATEAND THE DATE OF THE REPORT
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial statements relateon the date of this report.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiary Joint venture or Associate Company.
NUMBER OF MEETING OF BOARD
Five Board Meetings were held during the F.Y. on 30th May 2019 25thJuly 2019 24th October 2019 17th January 2020 and 28thFebruary 2020.
STATEMENT OF DECLARATION GIVEN BY INDEPENDENT DIRECTORS U/S 149 (6).
All the Independent Directors have given their declaration as per Section 149(7) thatthey meet the criteria of independence as provided in section 149(6) of the Companies Act2013.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION-
The current policy is to have an appropriate mix of executive and independent directorsto maintain the independence of the Board and separate its functions of governance andmanagement. As on 31.03.2020 the board consists of 6 members three of whom are executiveor whole-time directors including one woman and three are independent directors. Thepolicy of the company on directors appointment and remuneration including criteria fordetermining qualifications positive attributes independence of a director and othermatters is as provided under Sub-section (3) of section 178 of the Companies Act 2013. Weaffirm that the remuneration paid to the directors is as per the terms laid out in thenomination and remuneration policy of the Company.
FIXED DEPOSITS FROM PUBLIC:
The Company have not accepted any fixed deposits and as such no amount of principal orinterest was outstanding as of the balance sheet date.
The Company has taken credit facility by way of working capital limit from Kotak BankLtd. of Rs. 1000.00 lakhs and the amount of loan outstanding as on 31.3.2020 was Rs. NIL.
DETAILS OF LOANS GIVEN INVESTMENTS MADE AND GUARANTEE GIVEN COVERED U/S 186 (4) OF THECOMPANIES ACT 2013.
Loans given and Investments made are given under the respective heads of the BalanceSheet.
No Corporate Guarantees given by the Company in respect of loans as at 31st March2020.
As per SEBI Listing Regulations the Corporate Governance Report with the Auditors'Certificate thereon and the Management Discussion and Analysis are attached which formpart of this report.
As per Regulation 34 of the SEBI Listing Regulations a Business Responsibility Reportis attached and is a part of this annual report.
As per Regulation 43A of the SEBI Listing Regulations the Dividend Distribution Policyis disclosed in the Corporate Governance Report and on the website of the Company.
TRANSACTIONS WITH RELATED PARTIES.
All the transactions are done at arm length price during ordinary course of business.Information on transactions with related parties pursuant to section 134(3) (h) of the Actread with rule 8(2) of the Companies (Accounts) Rules 2014 are given in Annexure III inForm AOC-2 and the same forms part of this report.
Particulars of contract U/s 188
Transactions i.e. the Company's transactions that are of material nature with itsPromoters Directors and the management their relatives or subsidiaries among othersthat may have potential conflict with the Company's interests at large.
During the period under review the Company had not entered into any materialtransaction with any of its related parties that may have potential conflict withthe Company's interests at large. Although all the transactions with related parties aredone at arm length price and in compliance of Ind AS 24 the disclosure of transactionswith related parties are set out in Note No. 32 of Financial Statements which is formingpart of the Annual Report.
CORPORATE SOCIAL RESPONSIBILITY.
The Provision of Section 135 of Companies Act 2013 concerning with Corporate SocialResponsibility is not applicable during the F.Y. 2019-20.
TRANSFER TO IEPF ACCOUNT
During the year the company has transferred given below unclaimed dividends alongwithits related shares to IEPF account-
- Interim unclaimed dividend for F.Y. 2011-12 amounting Rs. 221725/- and final dividendRs. 426138/- and its related 115196 shares of 451 shareholders were transferred into IEPFaccount on 13.11.2019. In said transfer Rs. 219250 of dividend and corresponding 87700shares related with Petitioners on account of continuous noncompliance of CLB orders dt.04.07.2007 and 03.08.2007 by him/them.
- Interim unclaimed dividend for F.Y. 2012-13 amounting Rs. 702622/- and thereon 13080shares of 120 shareholders were transferred into IEPF account on 13.05.2020.
EVALUATION REPORT ON CAPITAL
The Provision of Evaluation on Capital is not applicable to the Company. Besides thatthe Board met time to time and appraised performance of the Company. The ways and meanswere made to increase the business and growth of the Company.
INCREASE IN PAID-UP CAPITAL-
During the year no calls in arrear has been realised from any shareholders. The paid-upcapital Rs. 66139220 and balance calls in arrears are @ Rs. 5 per share on 44600 sharesamounting to Rs. 223000/-
MATERIAL CHANGES :
No material changes were made during the year which affects the financial andcommitments of the Company.
INTERNAL FINANCIAL CONTROLS:
The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weakness in the design or operation were observed.
QUALITY INITIATIVES AND SOCIAL AUDIT
The Company continues to sustain its commitment on quality control with new technologyand reduction of cost. The Company successfully completed the Audits done by BQCcertificates for its product specifically quality certifications viz. ISO 9001-2015.
The Company has also successfully completed Factory/Social Audit SA8000 done by BritishStandards Institution (BSI) in the month of December 2019 and they have accorded GREENstatus/rating till December 2020.
COMPLAINTS PERTAINING TO SEXUAL HARASSMENT:
The details of complaints filed disposed of and pending during the financial yearpertaining to sexual harassment is provided in the Business responsibility report of thisAnnual Report.
PARTICULARS OF EMPLOYEES:
The details pertaining to remuneration as required under section 197(12) of thecompanies act 2013 read with rule 5(1) of the companies (appointment and remuneration ofmanagerial personnel) rules 2014.
(i) The percentage increase in remuneration of each Director Chief FinancialOfficer and Company Secretary during the financial year 2019-20 ratio of the remunerationof each Director to the median remuneration of the employees of the Company for thefinancial year 2019-20 and the comparison of remuneration of each Key Managerial Personnel(KMP) against the performance of the Company are as under:
|Sl. No. Name of Director/KMP and Designation ||Remuneration of Director/KMP for financial year 2019- 20 in Rs ||% increase in Remuneration in the Financial Year 2019-20 ||Ratio of remuneration of each Director/to median remuneration of employee ||Comparison of the Remuneration of the KMP against the performance of the Company |
|1 Ashok Kumar Gupta Chairman & Managing Director ||2421600 ||NIL ||26.44 ||Both Profit before Tax and after tax increase by 103% in Financial year 2019-20 |
|2 Siddharth Gupta CEO & Managing Director ||1666560 ||NIL ||18.20 ||in comparison to previous financial year. |
|3 Shalini Chandra Executive Director ||672000 ||NIL ||7.34 || |
|4 Ramesh Kumar Singh Company Secretary ||850944 ||7.05 ||9.29 || |
|5 Vinay Kumar Piyush Chief Finance Officer ||389760 ||Not Applicable as appointed CFO w.e.f. 01.04.2019. ||4.26 || |
ii) The median remuneration of employees of the Company during the financial year2019-20 is Rs .91579 and in Financial Year 2018-19 was Rs. 77276.
iii) In the financial year there was increase of 18.51 % (previous year decrease of1.42%) in the median remuneration of employees;
iv) There were 258 permanent employees on the rolls of Company as on March 31 2020;
v) Relationship between average increase in remuneration and company performance:-
The Profit before Tax for the financial year ended March 31 2020 increase by 103 % andincrease in median remuneration was 18.51%.
vi) Comparison of Remuneration of the Key Managerial Personnel(s) against theperformance of the Company:
The total remuneration of Key Managerial Personnel Increased by 4.29 % from 57.53 lacs(annualised) in 2018-19 to 60.00 lacs in 2019-20 whereas the Profit before Tax increasedby 103% to 323.26 lacs in 2019-20 (159.53 lacs in 2018-19) .
vii) a) Variations in the market capitalisation of the Company :
The market capitalisation as on March 31 2020 was Rs.1981.32 lacs (Rs. 3201.98 lacs ason March 31 2019).
b) Price Earnings ratio of the Company was 8.07 as at March 31 2020 and was 27.57 asat March 31 2019.
vii) Average percentage increase was made in the salaries of employees other than themanagerial personnel in the last financial year i.e. 2019-20 is 8.59 % and in themanagerial remuneration increase for the last financial year was 1.69 %.
viii) The ratio of the remuneration of the highest paid director to that of theemployees who are not directors but receive remuneration in excess of the highest paiddirector during the year Not Applicable; and
i x) It is hereby affirmed that the remuneration paid is as per the Remuneration Policyfor Directors Key Managerial Personnel and other Employees.
TRADING OF SHARES UNDER "B" GROUP:
The shares of your Company are presently being traded with BSE and NSE Stock Exchangesunder "B" Group.
The Directors wish to place on record their sincere appreciation of the devoted andefficient services rendered by all officers employees and others associated with theCompany. The Board place on record a deep appreciation for the valuable contribution andguidance rendered by Independent Directors who completed their tenure during the year.
Place : VARANASI Date : 25.06.2020
By order of the Board of Directors For BANARAS BEADS LTD.
(Ashok Kumar Gupta) Chairman & Managing Director