BHANDARI HOSIERY EXPORTS LIMITED
Your Directors have pleasure in presenting their 26th Annual Report togetherwith AuditedAccounts of the Company for the year ended 31st March 2019. FINANCIAL RESULTS
As mandated by the Ministry of Corporate Affairs your company has prepared thefinancial statement (standalone) for the year ended March 31 2019 as per IndianAccounting Standard (IND AS') notified under Sec 133 of the Companies
Act 2013 read with notification no. G.S.R. 111(E) dated 16.02.2015 as amended fromtime to time.
|PARTICULARS ||2018-19 ||2017-18 |
|Total Income ||26639.28 ||24842.96 |
|GROSS PROFIT before interest depreciation and tax ||1987.53 ||1752.07 |
|Less: Financial expenses ||920.51 ||746.98 |
|Less: Depreciation and preliminary exp. written off ||435.23 ||414.02 |
|PROFIT BEFORE TAX ||631.79 ||591.07 |
|Less: Provision for tax ||-96.25 ||-95.37 |
|PROFIT AFTER TAX ||535.54 ||495.70 |
|Add: Balance brought forward ||3046.35 ||2592.19 |
|Less : Previous Years amounts transferred ||0.00 ||24.67 |
|Amount available for appropriation(s) ||3581.88 ||3063.21 |
|Appropriation: || || |
|-Proposed Dividend on Equity shares @ Rs. 0.01/- per Equity Share (i.e. ||14.65 ||14.65 |
|1%) (Refer Note (i) below ) || || |
|-Tax on Proposed Dividend ||2.98 ||2.98 |
|Balance carried to Balance Sheet ||3564.26 ||3045.58 |
|Note: (i) Proposed Dividend on Equity Share || || |
|Proposed Dividend for the year ended 31st March 2019 @ Rs. 0.01/- per ||14.65 ||14.65 |
|Equity Share (i.e. 1%) || || |
|Dividend Distribution Tax on proposed dividend ||2.983 ||2.983 |
"The Board of Directors of the Company has proposed final dividend of Rs. @ Rs.0.01/- per Equity Share (i.e. 1%) which is subject to the approval by the shareholders atthe ensuing Annual General Meeting. In accordance with the revised Indian AccountingStandardContingencies and Events occurring after the Balance Sheet Date' (effectivefrom 01.04.2016) proposed dividend for the year and Corporate Dividend Tax thereon hasnot been recognized as a distribution of profit in the current year's accounts."
Your Company recorded a very goodperformance in terms of increased turnover andprofitability. During the year 2018-19 your Company was able to achieve turnover of Rs.26639.28 Lacs as against Rs. 24842.96 Lacs in the previous year showing an increase of7.21% over the previous year.The Profits after Tax of the Company for the year ended31.03.2019 has been at Rs.535.54 Lacs as against Rs.495.70 Lacs in the previous yearshowing an increase of 8.03% over the previous year.
The Exports of the Company during the financial year were to the tune Rs 760.90 Lacs asagainst Rs. 1548.92 Lacs in the previous year showing the decrease of 50.78% over theprevious year.
The issued and paid up Equity Share Capital of the Company as on March 31 2019 was Rs.146526950/- comprising 146526950 fully paid Equity shares of Rs. 1/- each. Duringthe year under review the Company has not issued any equity shares/ shareswithdifferential voting rights or granted stock options or issued sweat equity or purchasedits own shares. There were no additions/reductions during the financial year 2018-19inshare capital of the Company by way of Public/ Rights/Bonus/preferential issues/ buyback conversions etc.or any other changes.
Your directors are pleased to recommend the dividend of 1% i.e. Rs. 0.01/-per Share offace value Rs. 1/-for the year 2018-19 (Previous year 2017-18 @ 1% i.e. Rs. 0.01/- pershare of face value of Rs. 1/- each.) subject to the approval of the shareholders at theensuing Annual General Meeting. The Final Dividend if declared shall be distributed tothe members within 30 days from the AGM.
As per Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 top five hundred listed entities based on market capitalization arerequired to formulate a Dividend Distribution Policy. However your company has beenclassified by the stock exchanges as small cap and hence this regulation does not apply tothe Company.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
The Company has transferred all amounts of unclaimed dividend declared for theFinancial Year 2006-07 to gThe Investors Education and Protection Fundhestablished by the Central Government during year 2014-15. There were no other amounts ofunpaid dividends pending for transfer to such Fund in the year 2015-16 and 2016-17.Unclaimed Dividend for the financial year ended 31st March 2012 and thecorresponding Equity Shares of the Company in respect of which dividend entitlement remainunclaimed / unpaid for a period of seven (7) consecutive years will be due to betransferred to the Investor Education and Protection Fund (IEPF) of the Central Governmenton 2nd October2019 pursuant to provisions of Section 124 of the CompaniesAct2013 read with Investor Education and Protection Fund Authority(Accounting AuditTransfer & Refund) Rules 2016. Further after year 2006-07 the Company has declaredthe dividends for the year 2014-15 @1% i.e.Rs. 0.1/- per equity share of the face value ofRs. 10/- each then for the year 2015-16 again @ 1% i.e. 0.01 per equity share of facevalue of Rs. 1/- each then for the year 2016-17 again @ 1% i.e. 0.01 per equity share offace value of Rs. 1/- each and then for the year 2017-18 again @ 1% i.e. 0.01 per equityshare of face value of Rs. 1/- each. Dividends that remain unclaimed / unpaid for a periodof seven (7) years from the date on which they were declared are required to betransferred to the Investor Education and Protection Fund.
TRANSFER TO RESERVES
The Company does not propose to transfer any amount to reserves.
CORPORATE GOVERNANCE REPORT
The report on Corporate Governance as stipulated under the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 forms an integral part of this Report. Therequisite certificate from the Statutory Auditors of the Company confirming compliancewith the conditions of corporate governance is attached to the report on CorporateGovernance.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report is given at the end of Directors' Report andforms part of this Report. CAPITAL EXPENDITURE AND EXPANSION
As at 31st March2019 the gross fixed assets stood at Rs77.10 Croresand netfixedassets Rs. 53.59 Crores.During the year under review the Company undertook itssecond phase of expansion in dyeing and fabric processing unit by installing imported hightechnology fabric dyeing machines fabric stenter circular knitting machines automaticcolor mixing and dispenser machine collar knitting machines high power brushing machinesand heat recovery unit. The Company also undertook implementation of RO/ZLD Plant with aview to save water and make industry more environment friendly. The capital expenditure inthe said expansion and modernization amounted to Rs. 23.88 Lacs during the financial year2018-19.
Fresh long term debt was raised during the year which consisted of fresh term loan ofRs. 8.09 crores. However existing term debts to the extent of Rs.5.16 crores were repaid.The Cash Credit Limits were availed to the extent of Rs. 54.63 Crores during Financialyear 2018-19. The Company continues to focus on judicious management of its workingcapital. Receivables inventories and other working capital parameters were kept understrict check through continuous monitoring.
DIRECTORS AND KMPs (i) Appointments
There were no fresh/additional appointments to Board of Directors during the financialyear 2018-19 except for approval to appointment of Mrs. Vibha Sharma as AdditionalIndependent Non-Executive Women Director of the Company w.e.f. 01st April2019. Also Mr.Arpit Jain was appointed as the Company Secretary w.e.f. 23.04.2018 and as Key managerialpersonnal. Also during the Board meeting held on 29.05.2019 the Board of Directorsappointed Mr. Surinder Kumar Kapoor w.e.f. 01.06.2019 as additional Independent Directorof the Company subject to the approval of the Shareholders of the Company.
(ii) Retirement by rotation
In accordance with the provisions of the Companies Act 2013 and Articles ofAssociation of the Company Shri Nitin Bhandari Managing Director retires by rotationand is eligible for reappointment.
Mr. Gurinder Singh Makkar Company Secretary resigned w.e.f 31st March2018.Mr. Arun Kumar Oberoi resigned from the Independent Directorship of the Company w.e.f.23.04.2019 due to the personal reasons. Also Ms. Manmeet Sikka whose tenure expired on31.03.2019 as Independent Women Director of the Company retired from the office w.e.f.01.04.2019.
The Board of Directors have in their Meeting held on 26.03.2019 re-appointed Mr. ArunKumar Oberoi as Independent Director after being recommended by Nomination andRemuneration Committee. However Mr. Arun Kumar Oberoi resigned from the post ofIndependent Director w.e.f. 23.04.2019 due to some personal reasons. Also Mr. NitinBhandari will be retire at the ensuing Annual General Meeting and being eligible seekreappointment. The Board of Directors recommends their re-appointment. Item seeking hisre-appointment along with his detailed profile has been included in the notice conveningthe AGM. Your Directors recommend the resolution for your Approval.
(v) Declarations by Independent Directors
Pursuant to sub section (6) of Section 149 of the Companies Act 2013 and Reg 16(1) (b)of the SEBI (Listing Obligations and Disclosure Requirement) Regulations 2015 theIndependent Directors of the Companyhave given declaration to the Company that theyqualify the criteria of independence as required under the Act and the regulations.
The Board has carried out an annual evaluation of its own performance the directorsand also committees of the Board based on the guideline formulated by the Nomination &Remuneration Committee. Board composition quality and timely flow of informationfrequency of meetings and level of participation in discussions were some of theparameters considered during the evaluation process. A note on the familiarizing programmeadopted by the Company for the orientation and training of the Directors and the Boardevaluation process undertaken in compliance with the provisions of the Companies Act 2013and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is providedin the Corporate Governance Report which forms part of this Report.
Further a Separate Meeting of the Independent Directors of the Company was held onceduring the year on14.11.2018 which also reviewed the performance of the Non-executivedirectors Chairman of the Company and performance of the Board as a whole.
(vii) Nomination & Remuneration Policy
The Board has on the recommendation of the Nomination & Remuneration Committeealready framed a Policy for selection appointment and remuneration of Directors and KeyManagerial Personnel. More details of the same are given in the Corporate GovernanceReport.
(viii) Board Meetings
During the year 6 Board Meetings and 6 Audit Committee Meetings were convened andheld. The details are given in the Corporate Governance Report. The intervening gapbetween the two Meetings was within the period prescribed under the Companies Act 2013.
(ix) Key Managerial Personnel
During the year 2018-19 the Company had three Key Managerial Personnel viz. Mr. NitinBhandari Chairman & Managing Director Mr. Manoj Kumar Chief Financial Officer andMr. Arpit Jain Company Secretary. On 23rd April2018Mr. Arpit Jain wasappointed as Company Secretary and Key Managerial Personnel..
In compliance with Regulation 36(3) of SEBI (Listing Obligations and DisclosureRequirement) Regulations 2015 brief resume of all the Directors proposed to be appointed/ re-appointed are attached along with the Notice to the ensuing Annual General Meeting.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Company has not directly or indirectly - a) given any loan to any person or otherbody corporate other than usual advances envisaged for supply of materials if any b)given any guarantee or provided security in connection with a loan to any other bodycorporate or person and c) acquired by way of subscription purchase or otherwise thesecurities of any other body corporate. The details of loans from Banks/FIs/ Directors asrequiredare given in Financial Statements and Notes thereto.
Your company has not invited/ accepted depositsfrom public as envisagedunder Sections73 to 76 ofCompanies Act2013 read with Companies (Acceptance of Deposit) Rules 2014.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
Pursuant to Section 177(9) of the Companies Act 2013 and applicable provisions ofSEBI(Listing Obligations and Disclosure Requirements) Regulations 2015the Company hasformulated and established a Vigil Mechanism for directors and employees to report genuineconcerns has been established.The Vigil Mechanism Policy has been uploaded on the websiteof the Company at www.bhandariexport.com.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO
The information relating to conservation of energy technology absorption and foreignexchange earnings & outgo as required under Section 134(3)(m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is Annexed herewith asgAnnexure - Ch.
RELATED PARTY TRANSACTIONS
All related party transactions entered into during the financial yearwere on an arm''slength basis and in the ordinary course of thebusiness of the Company.All related partytransactions are placed before the AuditCommittee of the Board of Directors for itsapproval. Prior omnibusapproval of the Audit Committee of the Board of Directors isobtainedfor the transactions which are of foreseen and repetitive nature. A statementgiving details of all related party transactions entered pursuant to the omnibus approvalso granted is being placed before the Audit Committee of the Board of Directors for theirreview on a quarterly basis. During the year under reference no Material Related PartyTransactions were entered. All other related party transactions entered into by theCompany were in ordinary course of business and were on an arm's length basis.. Hence theCompany is not required to disclose details of the related party transactions in Form AOC2 pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of theCompanies (Accounts) Rules 2014. The policy on Materiality of and dealing with RelatedParty transactions as approved by the Board is uploaded on the Company's website i.e.www.bhandariexport.com.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators/ Courts whichwould impact the going concern status of the Company and its future operations.
M/s Krishan Goel & Associates Chartered Accountants Statutory Auditors of theCompany had been appointed as the Statutory Auditors of the Company in the 24thAnnualGeneral Meeting to hold office until the conclusion of29thAnnual GeneralMeeting subject to ratification of their appointment in every Annual General Meeting. TheShareholders at the ensuing General Meeting will consider ratification of the appointmentof the Statutory Auditor. The Auditor has confirmed that they hold a valid certificateissued by the Peer Review Board of the ICAI. There are no qualifications or reservation orremarks made by the Auditors in their Report.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hadappointed M/s Rajeev Bhambri & Associates Company Secretaries a firm of CompanySecretaries in Practice to undertake the Secretarial Audit of the Company. SecretarialAudit Report as per Section 204 of Companies Act 2013 is placed as Annexure - A to thisreport. No adverse comments have been made in the said report by the Practicing CompanySecretary.
Pursuant to Section 148(1) of the Companies Act2013 the Company is required tomaintain the Cost Accounts of the Company and further the Board of Directors on therecommendation of Audit Committee approved the appointment of M/sKhushwinder Kumar&Associates Cost Accountants Ludhiana (Firm Registration No. 00102) as the Cost Auditorsof the company for the year 2019-20 at a remuneration of Rs. 30000/- plus GST + out ofpocket expenses. The proposed appointment & remuneration of the Cost Auditors would beapproved by the members in the ensuing AGM. . For the year 2019-20 the Cost Audit reportshall be duly filed within prescribed time.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICHHAVE OCCURRED BETWEEN MARCH 31 2019 AND DATE OF THE REPORT.
There were no material changes and commitments affecting the financial position of theCompany between the end of financial year and the date of the Report.
The Auditors' Report is self-explanatory and do not call for furthercomments as thereare no adverse remarks in the Auditors' Report.
APPOINTMENT OF SECRETARIAL AUDITOR AND INTERNAL AUDITOR
The Company has in accordance with the applicable provisions of the Companies Act2013appointed M/s Rajeev Bhambri & Associates Practicing Company Secretary (C.P. No.9491)Ludhiana Secretarial Auditors. The Company has appointed M/s Vipan Kumar &Associates. Chartered Accountants (Membership No. 081198 Firm Registration No. 007245N)as the Internal Auditors.
LISTING OF SECURITIES
Atpresent the securities of the Company are listedon BSE Ltd.(BSE) and National StockExchange of India Limited (NSE). The Company haspaid the Listing Fees to the BSE and NSEupto the financial year 2018-19.
The industrial relations remained very cordial and responsive during the year underreview.
DISCLOSURE OF COMPLAINTS OF SEXUAL HARRASMENT CHILD LABOUR ETC.
Considering gender equality the Company has zero tolerance for sexual harassment atworkplace. The Company has an Anti Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition and Redressal)Act 2013.The following is a summary of sexual harassment complaints received and disposedoff during the year 2018-19:
|Sr. Category ||No. of complaints during financial year 2018-19 ||No. of complaints pending as at end of year 2018-19 |
|1 Child labour/forced labour/involuntary labour ||The Company does not hire Child Labour Forced Labour or Involuntary Labour. ||Not Applicable |
| ||No case reported || |
|2 Sexual Harassment ||No case reported ||Not applicable |
|3 Discriminatory employment ||No case reported ||Not applicable |
CORPORATE SOCIAL RESPONSIBILITY (CSR)
As per the Audited Financial Statements of the Company for the year 2015-16 theprovisions of Section 135 read with Schedule VII and Companies (Corporate SocialResponsibility) Rules 2014 of the Companies Act2013 has become applicable to theCompany. So in accordancewith the provisions of Section135 of the Companies Act 2013 readwith schedule VII of the Said Act and further read Companies (Corporate Social
Responsibility) Rules 2014"Corporate Social Responsibility Committee" hadbeen constitutedw.e.f. 28.05.2016 consisting of following persons as Members/ Chairman:
|1 MR. NITIN BHANDARI (CHAIRMAN & MG. DIRECTOR) ||CHAIRMAN |
|2 Ms. MANMEET SIKKA (INDEPENDENT DIRECTOR)* ||MEMBER (RETIRED W.E.F.01.04.2019) |
|3 MR. VIKAS NAYAR (DIRECTOR) ||MEMBER |
|4. MR SURINDER KUMAR KAPOOR (INDEPENDENT DIRECTOR)* ||MEMBER W.E.F. |
| ||01.06.2019 |
During the year 2018-19 the Company had identified certain projects/activities onwhich the CSR expenditure for the financial year 2018-19 was made. The activities includedpromoting health care including preventive health care facilities for senior citizens andmeasures for reducing inequalities faced by socially and economically backward groupsanimal welfare etc.Details about the CSR policy and initiatives taken by the
Company during the year are available on your company's website www.bhandariexport.com.The Report on
CSR activities is given in Annexure-E forming part of this Report.
TheCompany has an innate desire and zeal to contribute towards the welfare and socialupliftment of the community. The Company continues to abide by its general SocialResponsibility and maintain following certifications:
BSCI (Business Social Compliance Initiative) CERTIFICATION
The Company heading towards good Corporate Social Responsibilityalso have sBSCI(Business Social Compliance Initiative) Certification. European retail companies andassociations have developed a common monitoring system simplifying and standardizing therequirements and individual monitoring procedures. The BSCI is based on the labourstandards of the International Labour Organization (ILO) and other important internationalregulations like the UN Charta for Human Rights as well as on national regulations. TheInitiative aims at continuously improving the social performance of suppliers leading toBest Practice like SA8000 certification or equivalents and thus sustainably enhancingworking conditions in factories worldwide. The Certification achieved by the Company inthe true sense reflects the true spirit of the Company in improving working conditionssocial health safety welfare and good Corporate practices. Besides the company would beable to get the confidence of EU based customers by ensuring good social compliance.
Bhandari Hosiery Exports Limited is certified for compliance to GOTS the worldwideleading textile processing standard for organic fibres including ecological and socialcriteria backed up by independent certification. It ensures organic status of textilesfrom harvesting of the raw materials through environmentally and socially responsiblemanufacturing up to labelling in order to provide a credible assurance to the endconsumer. This certification enables Bhandari Hosiery Exports Limited to supply certifiedorganic garments to customers worldwide.
SUBSIDIARY COMPANY/ASSOCIATE COMPANY/JOINT VENTURE
There is no Subsidiary /Associate Company of the Company.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as "Annexure - D".
The provision for gratuity has been made as provided under the Payment of Gratuity Act.
PARTICULARS OF THE EMPLOYEES
The provisions of Rule 5(2) & (3) of the Companies (Appointment & Remunerationof Managerial Personnel) Rules 2014 requiring particulars of the employees in receipt ofremuneration in excess of Rs. 8.5 lacsper month or Rs. 1.02 Crores per year to bedisclosed in the Report of Board of Directors are not applicable to the Company as none ofthe employees was in receipt of remuneration in excess of the these specified amounts. Sothis information is NIL.
The information and other details required under Section 197(12) of the Companies Act2013 read with Rule 5 of the Companies (Appointment & Remuneration of ManagerialPersonnel) Rules 2014 is given in the Statement annexed herewith at gAnnexure-Bh.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has designed and implemented a process driven framework for InternalFinancial Controls. For the year ended on March 31 2019 the Board is of the opinion thatthe Company has sound Internal Financial Controls commensurate with the size scale andcomplexity of its business operations. During the year such controls were tested and nomaterial weakness in their operating effectiveness was observed. The Company has a processin place to continuously monitor the same and identify gaps if any and implement newand/ or improved controls whenever the effect of such gaps would have a material effect onthe Company's operations.
Statements in this report describing the Company's objectives expectations and/oranticipations may be forward looking within the meaning of applicable Securities Law andRegulations. Actual results may differ materially from those stated in the statement.Important factors that could influence the Company's operations include global anddomestic supply and demand conditions affecting selling prices of finished goodsavailability of inputs and their prices changes in the Government policies regulationstax laws economic developments within the country and outside and other factors such aslitigation and industrial relations. The Company assumes no responsibility in respect ofthe forward-looking statements which may undergo changes in future on the basis ofsubsequent developments information or events.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them in terms of the Section 134(3)(c) of the Companies Act2013 your Directorsconfirm that :
a) in the preparation of the annual accounts for the financial year ended March 312019 the applicableIndian accounting standards had been followed and there were nomaterial departures;
b)the directors had selected such accounting policies and applied them consistently andmade judgmentsand estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs ofthe company at the end of the financial year as at March31 2019 and of the profit and loss of thecompany for that period;
c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records inaccordance with the provisions of this Act for safeguarding theassets of the company and for preventingand detecting fraud and other irregularities;
d) the directors had prepared the annual accounts on a going concern basis;
e)the directors had laid down internal financial controls to be followed by thecompany and that suchinternal financial controls are adequate and were operatingeffectively. f)the directors had devised proper systems to ensure compliance with theprovisions of all applicable lawsand that such systems wereadequate and operatingeffectively.
DECLARATION REGARDING CODE OF CONDUCT
Directors Key Managerial Personnel and senior management of the Company have confirmedcompliance with the Code of Conduct applicable to the Directors and employees of theCompany and the declaration in this regard made by the Mg. Director & Chairman of theCompany forms part of this Annual Report.The said code is available at the Company'swebsite i.e. www.bhandariexport.com.
Your Directors place on record their appreciation of the continued assistance andco-operation extended to the Company by theGovernment of India Government of PunjabState Bank of India South Indian Bank HDFC Bank and Andhra Bank the large family ofshareholders business associates/customers/buyers the dedicated employees and all otherbusiness constituents who are continuing to assist your Company.
For and on behalf of the Board of Directors
Sd/-Place : Ludhiana
Chairman & Managing Director