BHANDARI HOSIERY EXPORTS LIMITED
Your Directors are pleased to present the 28th Annual Report together with AuditedAccounts of the Company for the year ended 31st March 2021.
As mandated by the Ministry of Corporate Affairs your company has prepared thefinancial statement (standalone) for the year ended March 31 2021 as per IndianAccounting Standard (IND AS') notified under Sec 133 of the Companies Act 2013 readwith notification no. G.S.R. 111(E) dated 16.02.2015 as amended from time to time.
| || ||(Rs. in Lacs) |
|PARTICULARS ||2020-21 ||2019-20 |
|Total Income ||22606.49 ||27753.51 |
|Gross Profit before interest depreciation and tax ||1825.82 ||2150.24 |
|Less: Financial expenses ||1073.81 ||1022.61 |
|Less: Depreciation and preliminary exp. written off ||539.78 ||501.44 |
|PROFIT BEFORE TAX ||212.23 ||626.18 |
|Less: Provision for tax ||(45.34) ||(95.00) |
|PROFIT AFTER TAX ||166.89 ||531.18 |
|Add: Balance brought forward ||4077.75 ||3564.25 |
|Less : Previous Years amounts transferred ||0.00 ||0.00 |
|Amount available for appropriation(s) ||4244.64 ||4095.44 |
|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 |
|Balance carried to Balance Sheet ||4229.99 ||4077.76 |
|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 |
"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 AccountingStandard Contingencies and Events occurring after the Balance Sheet Date'(effective from 01.04.2016) proposed dividend for the year and Corporate Dividend Taxthereon has not been recognized as a distribution of profit in the current year'saccounts."
During the year 2020-21 your Company was able to achieve turnover of Rs. 22606.49 Lacsas against Rs. 27753.21 Lacs in the previous year showing a decrease of 18.54% over theprevious year. The Profits after Tax of the Company for the year ended 31.03.2021 has beenat Rs. 166.89 Lacs as against Rs. 531.18 Lacs in the previous year showing the decrease inprofit of 68.58% in comparison to the previous year.
The Exports of the Company during the financial year were to the tune Rs 972.84 Lacs asagainst Rs. 1377.91 Lacs in the previous year showing the a decrease of 29.39 % over theprevious year.
The issued and paid up Equity Share Capital of the Company as on March 31 2021 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 2020-21 inshare capital of the Company by way of Public/ Rights/Bonus/preferential issues/ buy backconversions 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 2020-21 (Previous year 2019-20 @ 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.
ABOUT COVID-19 LOCKDOWN
The COVID -19 pandemic is rapidly spreading throughout the world. The operations of theCompany were impacted due to shutdown of office and factory following nationwide lockdownby the Government of India. In the Last month of Financial Year 2019-20 the COVID-19pandemic developed rapidly into a global crisis forcing governments to enforce lockdownof all economic activity. For the Company the focus has immediately shifted to ensuringthe health and well being of all employees and on minimizing disruptions to services forall our customers globally. Regular production was suspended in the month of April andsometime in May the Company produced Personal Protective Equipment (PPE) kits and masksduring this time. Consequent to withdrawal of lockdown in phased manner the companyresumed operations with proactive planning and limited workforce at office and factoryfollowing proper health & safety guidelines in place. We are adhering to workplacesafety guidelines issued by government to prevent the spread of such pandemic.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
The Company has transferred all amounts of unclaimed dividend declared for theFinancial Year 2006-07 to "The Investors Education and Protection Fund"established by the Central Government during year 2014-15. There were no other amounts ofunpaid dividends pending for transfer to such Fund. Further after year 2006-07 theCompany has declared the dividends for the year 2014-15 @1% i.e. Rs. 0.1/- per equityshare of the face value of Rs. 10/- each then for the year 2015-16 again @ 1% i.e. 0.01per equity share of face value of Rs. 1/- each then for the year 2016-17 again @ 1% i.e.0.01 per equity share of face value of Rs. 1/- each then for the year 2017-18 again @ 1%i.e. 0.01 per equity share of face value of Rs. 1/- each then for the year 2018-19 again@ 1% i.e. 0.01 per equity share of face value of Rs. 1/- each and then for the year2019-20 again @ 1% i.e. 0.01 per equity share of face value of Rs. 1/- each. Dividendsthat remain unclaimed/unpaid for a period of seven (7) years from the date on which theywere declared are required to be transferred to the Investor Education and ProtectionFund.
TRANSFER TO RESERVES
The Company proposes to transfer amount to the general reserves of the Company.
| ||(INR Lacs) |
|Particulars ||Amount |
|Net Profit for the year ||166.89 |
|Balance of Reserves at the beginning of the year ||4077.75 |
|Share Premium Reserves ||1559.75 |
|General Reserves ||288.05 |
|Less: Appropriation of Profits ||14.65 |
|Balance of Reserves at the end of the Year ||6077.79 |
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 March 2021 the gross fixed assets stood at Rs. 95.59 Cr. and net fixedassets Rs. 62.04 Cr. The Company also undertook implementation of UF Plant with a view tosave water and made industry more environments friendly. The capital expenditure in thesaid expansion and modernization amounted to Rs. 2.20 Cr. during the financial year2020-21.
Fresh debt of Rs. 17.91 crores was sanctioned by our bankers under GECL 2.0 scheme ofRBI to help industry financially due to COVID-19 pandemic out of which Rs. 10.22 croreswere availed by company during financial year 2020-21. The Cash Credit Limits were availedto the extent of Rs. 73 Crores during Financial year 2020-21. The Company continues to keyfocus on judicious management of its working capital receivables inventories and otherworking capital parameters were kept under strict check through continuous monitoring.
DIRECTORS AND KMPs (i) Appointments
There were fresh/additional appointments to Board of Directors during the financialyear 2020-21 appointment of Mrs. Geetika Bhalla as Independent Non-Executive WomenDirector of the Company w.e.f. 18th August 2020 the appointment was approved by theShareholders in the 27th Annual General Meeting of the Company held on 28.09.2020.
Mr. Kunal Verma has also been appointed by the Board as Additional Non executiveIndependent Director of the Company w.e.f. 09.11.2020 subject to the approval of theShareholders in the General Meeting.
(ii) Retirement by rotation
In accordance with the provisions of the Companies Act 2013 and Articles ofAssociation of the Company Mr. Rajesh Kumar Director retires by rotation and iseligible for reappointment.
There was no resignation of director during the financial year 2020-21.
Mr. Rajesh Kumar will retire at the ensuing Annual General Meeting and being eligibleseek reappointment.
(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 09.11.2020 and 13.02.2021 which also reviewed the performance of theNon-executive directors Chairman of the Company and performance of the Board as a whole.
(vii) Nomination & Remuneration Policy
On the recommendation of the Nomination & Remuneration Committee the board hasalready framed a Policy for selection appointment and remuneration of Directors and KeyManagerial Personnel. Saliant feature of Nomination and Remuneration Policy are annexedherewith as Annexure A.
(viii) Board Meetings
During the year 5 Board Meetings and 5 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 2020-21 the Company had three Key Managerial Personnel viz. Mr. NitinBhandari Chairman & Managing Director Mr. Manoj Kumar Chief Financial Officer andMr. Daljeet Singh Company Secretary. (During the financial year Mr. Arpit Jain CompanySecretary and Compliance Officer resigned w.e.f. 01.10.2020 and Mr. Daljeet Singhappointed as Company Secretary and Compliance Officer w.e.f 09.11.2020)
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 orother body corporate other than usual advances envisaged for supply of materials if anyb) 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 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the 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 as"Annexure - D".
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 FormAOC2 pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule8(2) of the Companies (Accounts) Rules 2014. The policy on Materiality of and dealingwith Related Party transactions as approved by the Board is uploaded on the Company'swebsite 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 bythe 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 - B to thisreport.
The Secretarial Auditors' in their report and in Annual Secretarial Compliance Report(Under Regulation 24A of SEBI LODR Regulations 2015) for year ended 31st March 2021 andsecretarial audit report for year ended 31st March 2021 marked observation for deviationfor Regulation 17(1) Regulation 18 and Regulation 19 of SEBI (LODR) Regulations 2015related to the composition of board of directors total no. of directors as member ofAudit Committee and total no. of directors as member of Nomination and RemunerationCommittee from 15.02.2020 to 18.08.2020 and non appointment of compliance officer ascompany secretary from 01.10.2020 to 09.11.2020.
The Board Members made an extensive search to finalise a suitable person as anIndependent Director. The non compliance in connection to Regulation 17(1) and Regulation18 and Regulation 19 was complied with appointment of Mr. Kunal Verma and Mrs. GeetikaBhalla on 09.11.2020 and 18.08.2020 respectively. The BSE had levied fine of Rs.1190000/- (plus 18% GST) and Rs. 195000/- (plus 18% GST) for which company has filedwaiver application with BSE. The NSE had levied fine of Rs. 1252000/- (plus 18% GST) andRs. 195000/- (plus 18% GST) for which company has filed waiver application with NSE.Both the stock exchanges have not intimated its decision on the subject yet till the dateof the Director's Report 2021.
The Board has re-appointed M/s Rajeev Bhambri & Associates Company SecretariesLudhiana as Secretarial Auditor of the Company for Financial Year 2021-22.
No Cost Auditor was appointed during the financial year as there is no statutoryrequirement imposed for mandatorily according to the size and nature of the business.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICHHAVE OCCURRED BETWEEN MARCH 31 2021 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 Vipan Kumar &Associates Chartered Accountants (Membership No. 081198 Firm Registration No. 007245N)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 2021-22.
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 2020-21:
|Sr. No. Category ||No. of complaints during financial year 2020-21 ||No. of complaints pending as at end of year 2020-21 |
|1. Child labour/forced ||The Company does not hire Child Labour ||Not Applicable |
|labour/involuntary labour ||Forced Labour or Involuntary Labour. || |
| ||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 2020-21 theprovisions of Section 135 read with Schedule VII and Companies (Corporate SocialResponsibility) Rules 2014 of the Companies Act 2013 has become applicable to theCompany. So in accordance with the provisions of Section 135 of the Companies Act 2013read with schedule VII of the Said Act and further read Companies (Corporate SocialResponsibility) Rules 2014 "Corporate Social Responsibility Committee" hadbeen constituted w.e.f. 28.05.2016 consisting of following persons as Members/ Chairman:
|Sr. No. Name of The Director ||Designation |
|1. Mr. Nitin Bhandari (Chairman & Mg. Director) ||Chairman |
|2. Mr. Vikas Nayar (Director) ||Member |
|3. Mr Surinder Kumar Kapoor (Independent Director)* ||Member |
During the year 2020-21 the Company had identified certain projects/activities onwhich the CSR expenditure for the financial year 2020-21 was made. The activities includedpromoting health care including preventive health care improvement in education whichincludes special education and employment strengthening vocation skills among childrenwomen elderly and the differently-abled and livelihood enhancement projects facilitiesfor senior citizens and measures for reducing inequalities faced by socially andeconomically backward groups animal welfare etc. Details about the CSR policy andinitiatives taken by the Company during the year are available on your company's websitewww.bhandariexport.com. The Report on CSR activities is given in Annexure-E forming partof this Report.
The Company has an innate desire and zeal to contribute towards the welfare and socialuplifting 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 Responsibility also has 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. The company would be able toget 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 fibers 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 labeling in order to provide a credible assurance to the end consumer.This certification enables Bhandari Hosiery Exports Limited to supply certified organicgarments to customers worldwide.
SUBSIDIARY COMPANY/ASSOCIATE COMPANY/JOINT VENTURE
There is no Subsidiary /Associate Company of the Company.
EXTRACT OF ANNUAL RETURN
An extract of the Annual Return as of 31st March 2021 pursuant to the sub-section (3)of Section 92 of the Companies Act 2013 read with Rule 12(1) of the Companies (Managementand Administration) Rules 2014 and forming part of the report is placed at the website ofthe Company as per provisions of Section 134 [a] of the Companies Act 2013.
The provision for gratuity has been made as provided under the Payment of Gratuity Act.
PARTICULARS OF THE EMPLOYEES
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 "Annexure-C".
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 2021 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 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 thefinancial year ended March 31 2021 the applicable Indian accounting standards had beenfollowed and there were no material departures; b) the directors had selected suchaccounting policies and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe company at the end of the financial year as at March 31 2021 and of the profit andloss of the company for that period; c) the directors had taken proper and sufficient carefor the maintenance of adequate accounting records in accordance with the provisions ofthis Act for safeguarding the assets of the company and for preventing and detecting fraudand other irregularities; d) the directors had prepared the annual accounts on a goingconcern basis; e) the directors had laid down internal financial controls to be followedby the company and that such internal financial controls are adequate and were operatingeffectively. f) the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate 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 the Government 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.
| ||By Order of the Board of Directors |
| ||For Bhandari Hosiery Exports Limited |
| ||Sd/- |
|Place: Ludhiana ||(Nitin Bhandari) |
|Dated: 14.08.2021 ||Chairman & Mg. Director |