BHANDARI HOSIERY EXPORTS LIMITED
Your Directors have pleasure in presenting their 25th Annual Report together withAudited Accounts of the Company for the year ended 31st March 2018.
FINANCIAL RESULTS (RS. IN LACS)
|PARTICULARS ||2017-18 ||2016-17 |
|Turnover ||24842.96 ||21381.21 |
|GROSS PROFIT before interest depreciation and tax ||1752.07 ||1306.88 |
|Less: Financial expenses ||746.98 ||471.08 |
|Less: Depreciation and preliminary exp. written off ||414.02 ||307.18 |
|PROFIT BEFORE TAX ||591.07 ||528.62 |
|Less: Provision for tax ||-95.37 ||-108.25 |
|PROFIT AFTER TAX ||495.70 ||420.37 |
|Add: Balance brought forward ||2592.19 ||2170.05 |
|Less : Previous Years amounts transferred ||24.67 ||1.77 |
|Amount available for appropriation(s) ||3063.21 ||2592.19 |
|Appropriation: || || |
| || || |
|-Proposed Dividend on Equity shares @ Rs. 0.01/- per Equity Share (i.e. 1%) (Refer Note (i) below) ||14.65 ||- |
|-Tax on Proposed Dividend || || |
| ||2.98 ||- |
|Balance carried to Balance Sheet ||3045.58 ||2592.19 |
|Note: (i) Proposed Dividend on Equity Share || || |
|Proposed Dividend for the year ended 31st March 2018 @ 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 at theensuing Annual General Meeting. In accordance with the revised Indian Accounting StandardContingencies and Events occurring after the Balance Sheet Date (effective from01.04.2016) proposed dividend for the year and Corporate Dividend Tax thereon has notbeen recognized as a distribution of profit in the current year s accounts.
Your Company recorded a very good performance in terms of increased turnover as well asincreased profitability. During the year 2017-18 your Company was able to achieveturnover of Rs. 24842.96 Lacs as against Rs. 21381.21 Lacs in the previous year showingan increase of 16.19% over the previous year. The Profits after Tax of the Company for theyear ended 31.03.2018 has been Rs.495.70 Lacs as against Rs.420.37 Lacs in the previousyear showing an increase of 17.92% over the previous year.
The Exports of the Company for the financial year ended 31st March 2018 were to thetune Rs 1548.92 Lacs as against Rs. 1282.34 Lacs in the previous year showing an increaseof 20.78% over the previous year.
The issued and paid up Equity Share Capital of the Company as on March 31 2018 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/ shares withdifferential voting rights or granted stock options or issued sweat equity or purchasedits own shares. There were no additions/reductions during the financial year 2017-18 inshare capital of the Company by way of Public/ Rights/Bonus/preferential issues/ buy back conversions etc. or any other changes.
Your directors recommend a dividend of 1% i.e. Rs. 0.01/- per Share of face value Rs.1/- for the year 2017-18 (Previous year 2016-17 @ 1% i.e. Rs. 0.01/- per share of facevalue of Rs. 1/- each.) subject to the approval of the shareholders at the ensuing AnnualGeneral Meeting.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
The Company had declared Interim Dividends in the year 2006-07. The un-encasheddividend amount lying unclaimed to the credit of the said Unpaid Dividend Account 2006-07had already been duly transferred to the Investor Education and Protection Fund. There areno other such amounts requiring transfer to Investor Education and Protection Fund duringthe year 2017-18. . Further after year 2006-07 the Company has declared the dividends forthe year 2014-15 @1% i.e. Rs. 0.1/- per equity share of the face value of Rs. 10/- each then for the year 2015-16 again @ 1% i.e. 0.01 per equity share of face value of Rs. 1/-each and then for the year 2016-17 again @ 1% i.e. 0.01 per equity share of face value ofRs. 1/- each. Dividends that remain unclaimed / unpaid for a period of seven (7) yearsfrom the date on which they were declared are required to be transferred to the InvestorEducation 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 March2018 the gross fixed assets stood at Rs75.53 Crores and net fixedassets Rs. 56.25 Crores. During the year under review the Company undertook its secondphase 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. 14.75 crores during the financialyear 2017-18.
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 wererepaid. The Cash Credit Limits were availed to the extent of Rs. 54.63 Crores duringFinancial year 2017-18. The Company continues to focus on judicious management of itsworking capital. Receivables inventories and other working capital parameters were keptunder strict check through continuous monitoring.
DIRECTORS AND KMPs
There were no fresh/additional appointments to Board of Directors during the financialyear 2017-18 except for approval to appointments as stated above. Also Mr. Arpit Jainwas appointed as the Company Secretary w.e.f. 23.04.2018 and as Key managerial personnal
(ii) Retirement by rotation
In accordance with the provisions of the Companies Act 2013 and Articles ofAssociation of the Company Shri Nitin Bhandari Director retires by rotation and iseligible for reappointment.
Mr. Gurinder Singh Makkar Company Secretary resigned w.e.f 31st March2018.
The Board of Directors have in their Meeting held on 29.05.2017 re-appointed asrecommended by Nomination and Remuneration Committee. and further Members approval wasgranted to re-appoint him as Chairman Cum Mg. Director and CEO of the Company for a periodof 3 year w.e.f 22.11.2017.
(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 Company have given declaration to the Company that theyqualify the criteria of independence as required under the Act and the regulations.
(vi) Board Evaluation
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 on 14.11.2017 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 2017-18 the Company had three Key Managerial Personnel viz. Mr. NitinBhandari Chairman & Managing Director & CEO Mr. Manoj Kumar Chief FinancialOfficer and Mr. Gurinder Makkar Company Secretary. On 31st March2018 Mr. Gurinder Makkarresigned and Mr. Arpit Jain was appointed as Company Secretary w.e.f. from 23rd April2018
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 asrequired are given in Financial Statements and Notes thereto.
Your company has not invited/ accepted deposits from public as envisaged under Sections73 to 76 of Companies Act 2013 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 2015 the Company hasformulated a Vigil Mechanism for directors and employees to report genuine concerns hasbeen established. The Vigil Mechanism Policy has been uploaded on the website of theCompany 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 as"Annexure - C".
RELATED PARTY TRANSACTIONS
All related party transactions entered into during the financial year were on an arm''slength basis and in the ordinary course of the business of the Company. All related partytransactions are placed before the Audit Committee of the Board of Directors for itsapproval. Prior omnibus approval of the Audit Committee of the Board of Directors isobtained for 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 24th AnnualGeneral Meeting to hold office until the conclusion of 29th Annual General Meeting subjectto ratification of their appointment in every Annual General Meeting. The Shareholders atthe ensuing General Meeting will consider ratification of the appointment of the StatutoryAuditor. The Auditor has confirmed that they hold a valid certificate issued by the PeerReview Board of the ICAI.
There are no qualifications or reservation or remarks made by the Auditors in theirReport.
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/s Khushwinder Kumar &Associates Cost Accountants Ludhiana (Firm Registration No. 00102) as the Cost Auditorsof the company for the year 2018-19 at a remuneration of Rs. 30000/- plus out of pocketexpenses. The proposed remuneration of the Cost Auditors would be approved by the membersin the ensuing AGM. . For the year 2018-19 the Cost Audit report shall be duly filedwithin prescribed time.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICHHAVE OCCURRED BETWEEN MARCH 31 2015 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 further comments 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 Act2013 appointed M/s Rajeev Bhambri & Associates Practicing Company Secretary (C.P.No. 9491) Ludhiana Secretarial Auditors. The Company has appointed M/s Parveen Malhotra& Co. Chartered Accountants (Membership No. 086625 Firm Registration No. 023396N)as the Internal Auditors.
LISTING OF SECURITIES
At present the securities of the Company are listed on BSE Ltd. (BSE) and NationalStock Exchange of India Limited (NSE). The Company has paid the Listing Fees to the BSEand NSE upto the financial year 2017-18.
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 anddisposed off during the year 2017-18:
|Category ||No. of complaints during financial year 2017-18 ||No. of complaints pending as at end of year 2017-18 |
|Child labour/forced ||The Company does not hire Child Labour ||Not Applicable |
|labour/involuntary ||Forced Labour or Involuntary Labour. || |
|labour ||No case reported || |
|Sexual Harassment ||No case reported ||Not applicable |
|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 Act 2013 has become applicable to theCompany with effect from financial year 2017-18. So in accordance with the provisions ofSection 135 of the Companies Act 2013 read with schedule VII of the Said Act and furtherread Companies (Corporate Social Responsibility) Rules 2014 Corporate SocialResponsibility Committee had been constituted w.e.f. 28.05.2016 consisting of followingpersons as Members/ Chairman :
|NAME OF THE DIRECTOR ||DESIGNATION |
|MR. NITIN BHANDARI (CHAIRMAN & MG. DIRECTOR) ||CHAIRMAN |
|Ms. MANMEET SIKKA (INDEPENDENT DIRECTOR) ||MEMBER |
|MR. VIKAS NAYAR (DIRECTOR) ||MEMBER |
During the year 2017-18 the Company had identified certain projects/activities onwhich the CSR expenditure for the financial year 2017-18 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 Companyduring the year are available on your company s website www.bhandariexport.com. The Reporton CSR activities is given in Annexure-E forming part of this Report.
The Company 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:
The Company's core values on safety occupational health environmental stewardship andrespect for people permeate all of its actions and will continue to guide its decisionsand actions in the future. The Company's commitment to environmental health and safetyprocesses is practised by the leadership and at all levels of management. The Companytakes all reasonable and practicable steps to protect occupational health and safety ofemployees community and the environment affected by its process products and services.It is all due to the emphasis on Social Responsibility that the Company gets Certificationfrom Worldwide Responsible Apparel Production (W.R.A.P.) USA a Voluntary Non ProfitOrganization which certifies Health Safety Welfare measures and compliance with Govt.and other Regulatory Authorities laws and bye laws by a Apparel/Textile Unit.
BSCI (Business Social Compliance Initiative) CERTIFICATION
The Company heading towards good Corporate Social Responsibility also have s BSCI(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.
The Company has got C-TPAT Certification and achieved another important milestone.C-TPAT (Customs - Trade Protection Against Terrorism) is a voluntary USgovernment-business initiative to build cooperative relationships that improve overallinternational supply chain and U.S. border security. This initiative was launched toassist the trading community in the war against Terrorism some criteria such as BusinessPartner Requirements (Security Procedures) Container Security (Seals ContainerInspection etc) Physical Access Control Procedural Security Security Training andAwareness Physical Security Information Technology.
C-TPAT stands for Customs Trade Partnership Against Terrorism and it is just that: apartnership or relationship that a company voluntarily builds with customs to ensure themovement of it s supply chain on the company s side and to reassure customs that thecompany is not importing anything hazardous into the U.S. C-TPAT focuses on securingcompany s supply chains with regards to terrorism. It has no doubt its imperative benefitsas the Foreign buyer get more relied about the Company s Risk Management System and Safetyand Security procedures adopted.
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 . GRATUITY
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 lacs per 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 Act 2013 read with Rule 5 of the Companies (Appointment &Remuneration of Managerial Personnel) Rules 2014 is given in the Statement annexedherewith at "Annexure- B" .
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 2018 the Board is of the opinionthat the Company has sound Internal Financial Controls commensurate with the size scaleand complexity of its business operations. During the year such controls were tested andno material weakness in their operating effectiveness was observed. The Company has aprocess in place to continuously monitor the same and identify gaps if any and implementnew and/ or improved controls whenever the effect of such gaps would have a materialeffect on the 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 of the forward-looking statementswhich may undergo changes in future on the basis of subsequent developments informationor 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 Directors confirm that :
a) in the preparation of the annual accounts for the financial year ended March 312018 the applicable Indian accounting standards had been followed and there were nomaterial departures;
b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year as atMarch 31 2018 and of the profit and loss of the company for that period;
c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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;
e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
f) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
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 & CEO 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 the Government of India Government of PunjabState Bank of India the large family of shareholders businessassociates/customers/buyers the dedicated employees and all other business constituentswho are continuing to assist your Company.
For and on behalf of the Board of Directors
Chairman & Managing Director
Place : Ludhiana
Date : 14.08.2018