Brand Concepts Limited
The Directors hereby presents their 12th Director's Report on the business andoperation of the Company together with the audited Financial Statements for the financialyear ended 31st March 2019
1. Financial Result:
The Company's financial performance for the year under review along with previousyear's figures is given hereunder:
|Particulars For the year ended ||2018-19 ||2017-18 |
|Net Sales/Income from:- || || |
|1. Business Operation ||818057815 ||683674025 |
|2. Other Income ||1551236 ||2086432 |
|Profit after Depreciation and Interest ||37761608 ||30317180 |
|Less: Current income Tax ||12937943 ||3395650 |
|Less: Previous year adjustment of Income Tax ||648864 ||(42650) |
|Less: Deferred Tax ||(2505423) ||4494149 |
|Net Profit After Tax ||26680224 ||22470031 |
|Dividend (Including Interim if any and Final) ||- ||- |
|Earnings Per Share (Basic) ||2.52 ||2.83 |
|Earnings Per Share (Diluted) ||2.52 ||2.83 |
The Company continues to see growth in its overall performance in the financial year2018-19 driven by the performance of the segment in which the Company operates. Yourdirectors are glad to report that during the year under review your company has postedhigher gross income of Rs. 81.80 crores as compared to Rs. 68.37 crores in thecorresponding previous year registering a growth of approx. 20% as compared to previouscorresponding year. As a result your company has posted much better net Profit of Rs.2.67 crores as compared to Rs. 2.24 crores in the corresponding previous year registeringhealthy growth of approx. 20%. Your directors believe that improved financial results aredirectly attributable to several corrective measures viz. increasing volumes; improveproductivity and ensuring overall operational efficiency at different stages and savingsin cost.
2. State of Company's Affairs and Prospects:
The Company continued its efforts to strengthen its marketing strategy efforts andrelationship with customers during the year. The Company has added and continuing to addmore Point of Sales to market its product through Dealers Distributorship FranchiseeOnline Partners & Company Owned Stores. Company is also targeting to take the licenseof more reputed Brands of Fashion Industry in the coming years. It is expected that theeconomy in general will improve in coming financial year. At the same time Company alsoresuming the business with the Old Customers. The Company has planned several correctivemeasures viz. increasing volumes; improve productivity and ensuring overall operationalefficiency.
3. Material Changes and Nature of business
There were no material changes affecting the financial position of the company occurredafter the end of the financial year till the date of this report. There is no change inthe nature of business.
Your directors did not recommend any dividend for the financial year 2018-19 andploughed back the funds in the business. Since there was no unpaid/unclaimed Dividend onthe books till date the provisions of Section 125 of the Companies Act 2013 do not applyto your company.
5. Subsidiary Associate and joint Venture Companies:
The Company has no subsidiary associate or joint venture company.
6. Directors' responsibility statement:
Pursuant to Section 134(5) of the Companies Act 2013 the board of directors to thebest of their knowledge and ability confirm that:
a) In the preparation of the annual accounts the applicable accounting standards havebeen followed and there are no material departures.
b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the Profitof the Company for that period;
c) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
The Company has not accepted any fixed deposit from the public during the financialyear ended 31st March 2019.
8. Conservation of Energy Technology and Foreign Exchange Earnings and outgo
The particulars as prescribed under Section 134(3)(m) of the Companies Act 2013 readwith Companies (Accounts of Companies) Rules 2014 are set out below.
(A) Conservation of Energy:
The Company is engaged in trading activities so conservation of energy is notapplicable to it.
(B) Technology absorption Adaption and Innovation
The Company has not imported any technology from Abroad. Innovation is a constantprocess and the Company has been engaged in improving the product design material costproductivity etc. as part of this process.
(C) Foreign exchange Earnings and Outgo:
The details of total foreign earnings and outgo are as follows.
|Earnings in Foreign Currency ||Nil |
|Expenses in Foreign Currency ||- |
|Value of Imports on C.I.F Value ||: Rs. 136758348/- |
|Travelling Expenses ||: Rs. 1432738/- |
|Royalty in foreign Currency ||: Rs. 1957987/- |
9. Loans Guarantees and Investment
The company has not extended inter corporate loans to any companies and has also notmade investments.
10. Use of proceeds of IPO
The proceeds from the Issue of the Company vide prospectus dated 23rd December 2017have been utilized for the purpose for which they were raised and there is no deviation inthe utilization of proceeds.
11. Change in Share Capital of the Company
There is no change in the share capital of the Company during the year under review.
12. Listing of Equity Shares
The shares of the Company are listed at National Stock Exchange SME Emerge Platformand the Company has established connectivity with both National Securities DepositoryLimited (NSDL) and Central Depository Services (India) Limited (CDSL).
13. Transfer to Reserves
The Company has not transferred any amount to the general reserve during the year underreview.
14. Directors and key managerial personnel
The Board of Directors of Company is a balanced one with an optimum mix of Executiveand Non-Executive Directors. They show active participation at the board and committeemeetings which enhances the transparency and adds value to their decision making. TheBoard takes the strategic decisions frames the policy guidelines and extends wholeheartedsupport to business heads and associates.
As on 31st March 2019 the Board of Company consists of Six (6) Directors. Mr. ManishSaksena is liable to retire by rotation and being eligible offers himself forreappointment. The composition and category of Directors as well as of KMPs are as follow:
|Sr. No. ||Name of Director ||Designation ||DIN/PAN |
|1 ||Mr. Prateek Maheshwari ||Managing Director ||00039340 |
|2 ||Mr. Abhinav Kumar ||Executive Director & CFO ||06687880 |
|3 ||Mrs. Annapurna Maheshwari ||Non-Executive Director ||00038346 |
|4 ||Mr. Narendra Tulsidas Kabra ||Independent Director w.e.f. 9-12-17 ||06851212 |
|5 ||Mr. Kushagra P Toshniwal ||Independent Director w.e.f. 15-12-17 ||07117429 |
|6 ||Mr. Manish Saxena ||Non-Executive Director w.e.f. 22-03-18 ||08014657 |
|7 ||Ms. Swati Gupta ||Company Secretary ||- |
15. Board Evaluation
In compliance with the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the performance evaluation of the Independent Directorswas carried out during the year.
The performance of the Board was evaluated after seeking inputs from all the directorson the basis of the criteria such as the Board composition and structure effectiveness ofboard processes information and functioning etc. The performance of the committees wasevaluated by the board after seeking inputs from the committee members on the basis of thecriteria such as the composition of committees effectiveness of committee meetings etc.
The Board and the Nomination and Remuneration Committee ("NRC") reviewed theperformance of the individual directors on the basis of the criteria such as thecontribution of the individual director to the Board and committee meetings likepreparedness on the issues to be discussed meaningful and constructive contribution andinputs in meetings etc. In addition the Chairman was also evaluated on the key aspectsof his role.
In a separate meeting of independent Directors performance of non-independentdirectors performance of the Board as a whole was evaluated.
16. Number of meetings of the board
The Directors of the Company met at regular intervals with the gap between two meetingsnot exceeding 120 days to take a view of the Company's policies and strategies apart fromthe Board Matters. During the year under review the Board of Directors met 4 (Four) timeson the following dates-
|Sr. No. ||Date of meeting ||Board Strength ||No. of directors present |
|1 ||28/05/2018 ||6 ||5 |
|2 ||09/08/2018 ||6 ||4 |
|3 ||12/11/2018 ||6 ||5 |
|4 ||02/03/2019 ||6 ||3 |
17. Board Committees and their meetings
Your Company has in place the Committee(s) as mandated under the provisions of theCompanies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. There are currently four committees of the Board namely:
a) Audit Committee
The Audit Committee was properly reconstituted as per the provisions of Section 177 ofthe companies Act 2013 during the year as Mr. Narendra Kabra was appointed as Chairman ofthe Committee w.e.f. 9-8-2018. The Audit Committee assists the Board in its responsibilityof overseeing the quality and integrity of the accounting auditing and reportingpractices of the Company and its compliance with the legal and regulatory requirements.The Committee's purpose is to oversee the accounting and financial process of the Companythe audits of the Company's financial statements the appointment independenceperformance and remuneration of the statutory auditors including the Cost auditors theperformance of internal auditors and the Company's risk management policies. The Chairmanof the Audit Committee was present at the 30th Annual General Meeting held on 21st July2018. The Minutes of the Audit Committee Meetings were noted at the Board Meetings.
The Audit Committee met 4 (Four) times during the year on 28-05-2018 9-8-201812-11-2018 and 02-3-2018 under review on the following dates and the attendance records ofthe members of the committee are as follows:-
|Name of Director ||Status ||Category ||Meetings held ||Meetings attended |
|Mr. Narender Tulsidas Kabra ||Chairman ||Non-Executive & Independent Director ||4 ||4 |
|Mr. Kushagra P Toshniwal ||Member ||Non-Executive & Independent Director ||4 ||2 |
|Mr. Abhinav Kumar ||Member ||Whole-time Director ||4 ||4 |
b) Nomination & Remuneration Committee
The Board of Directors duly constituted Nomination & Remuneration Committee incompliance with the provisions of Section 178 of the companies Act 2013.The Board hasframed Nomination and Remuneration policy which is generally in line with the existingindustry practice and applicable laws. The Nomination and Remuneration Committee assistthe Board in overseeing the method criteria and quantum of compensation for directorsbased on their performance and defined assessment criteria. The powers role and terms ofthe reference of Nomination and Remuneration Committee covers the areas mentioned undersection 178 of the Companies Act 2013.
During the year meeting of the Nomination & Remuneration Committee was held on28-05-2018 and the attendance records of the members of the committee are as follows:-
|Name of Director ||Status ||Category ||Meetings held ||Meetings attended |
|Ms. Annapurna Maheshwari ||Chairman ||Non-Executive Director ||1 ||- |
|Mr. Kushagra Praveen Toshniwal ||Member ||Non-Executive & Independent Director ||1 ||1 |
|Mr. Narender Tulsidas Kabra ||Member ||Non-Executive & Independent Director ||1 ||1 |
The policy of the Nomination & Remuneration Committee has been placed on thewebsite of the Company at www.brandconcepts.in and the salient features of that has beendisclosed as Annexure "III" to this report.
c) Stakeholders' Relationship Committee
The Board of Directors duly constituted Stakeholders' Relationship Committee incompliance with the provisions of Section 178 of the companies Act 2013. The Compositionof the committees is given below and meeting of the Stakeholders' Relationship Committeewas held on 9-08-2018 and the attendance records of the members of the committee are asfollows:-
|Name of Director ||Status ||Category ||Meetings held ||Meetings attended |
|Ms. Annapurna Maheshwari ||Chairperson ||Non- Executive Director ||1 ||1 |
|Mr. Abhinav Kumar ||Member ||Whole Time Director ||1 ||1 |
Name and Designation of Compliance Officer: Ms. Swati Gupta Company Secretary Statusof the Investors/Shareholders Complaints:
(i) No. of complaints received during the year : finil
(ii) No. of complaints resolved during the year : finil
(iii) No. of complaints pending at the end of the year : finil
The Company has authorised to implement transfer transmission and Demat of shares tothe Share transfer Agent and to resolve the related problems.
18. Familiarization Program for Independent Directors
Your Company has in place a Familiarization Program for independent Directors toprovide insights into the Company's Business to enable them contribute significantly toits success. The Senior Management made presentations to familiarize the IndependentDirectors with the strategy operations and functions of the Company. The details of thefamiliarization program of the independent directors are available on the website of theCompany www.brandconcepts.in.
19. Transactions with related parties
As specified under the provisions of section 188 of the Companies Act 2013 thecontracts and arrangement entered into with related parties were in ordinary course ofbusiness and on arm's length basis. All related party transactions are placed before theAudit Committee and approved through the Omnibus mode in accordance with the provisions ofthe Companies Act 2013 and Listing Regulations for its approval. The Board has taken onrecord all transaction with related parties. Suitable disclosures as required are providedin AS 18 which forms part of the notes to financial statement. The policy on Related PartyTransactions is uploaded on the Company's website www.brandconcepts.in. Information ontransactions with related parties pursuant to Section 134(3)(h) of the Act read with rule8(2) of the Companies (Accounts) Rules 2014 are given in "Annexure-I" inForm AOC-2 and the same forms part of this report.
20. Extract of annual return
As provided under Section 92(3) read with relevant Rules of the Companies Act 2013the extract of the annual return is given in Annexure II in the prescribed FormMGT-9 which forms part of this report.
21. Managerial Remuneration and particulars of employees
The Company has no employees who is in receipt of remuneration of Rs. 850000/- permonth or Rs. 10200000/- per annum and hence the Company is not required to give anyinformation under Sub-rule 2 and 3 of Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014.
Pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 statement containing the names and other particulars of top tenemployees in terms of remuneration drawn by them is enclosed as "Annexure-IV"to this report.
Disclosure under Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is enclosed as "Annexure-V" to this report.
22. Management Discussion and Analysis Report
Management Discussion and Analysis Report as required under Regulation 34 and ScheduleV (B) of the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 (Regulations) is disclosed separately in the Annual Reportas "Annexure VI"
23. Auditors and their Report
i. Statutory Auditors
M/s Maheshwari & Gupta Chartered Accountants Indore (ICAI Firm Registration No.006179C) are the statutory auditors of the Company for the year ended 31st March 2019who was appointed in the AGM held in the year 2018 for a term of 5 years that is upto AGMto be held in the year 2023. The ratification of appointment of statutory auditor is notrequired as per the rst proviso of Section 139 (1) by the Companies (Amendment) Act 2017effective from 7th May 2018 accordingly the ratification of appointment of Statutoryauditor is not proposed.
ii. Secretarial Auditors
Pursuant to Section 204 of the Companies Act 2013 read with Rules thereof the Boardof Directors had appointed Ms. Manju Mundra Company Secretary as Secretarial Auditors ofthe Company for the Financial Year 2018-19. The Secretarial Audit Report for FY 2018-19 isannexed herewith as Annexure "VII".
iii. Cost Auditors
The Company has not appointed the Cost Auditor as pursuant to Section 148 of theCompanies Act 2013 read with the Companies (Cost Records and Audit) Amendment Rules2014 the cost audit or maintenance of cost records are not applicable to the Company.
iv. Internal Auditors
The Company has M/s B Mantri & Co Chartered Accountant Firm (Registration No:013559C) as Internal Auditors to conduct internal audit of the function and activities ofthe Company for the year 2018-19. The Audit Committee of the Board of Directors inconsultation with the Internal Auditors formulate the scope functioning periodicity andmethodology for conducting the internal audit.
24. Statutory Auditor's report and secretarial audit report
The Statutory Auditors report for the financial year ended 31st March 2019 does notcontain any qualification reservation or adverse remark. The observations made bysecretarial auditors are being taken care by the management.
The auditor's report is self-explanatory and there are qualifications in their reportmade by the Statutory Auditors that Company has not maintained proper records showing fullparticulars including quantitative details and situation of fixed assets. No fraud u/s143(12) was reported by the auditor.
25. Internal Control System and their Adequacy
As per Section 134(5)(e) of the Companies Act 2013 the Company has adequate system ofinternal control to safeguard and protect from loss unauthorized use or disposition ofits assets. All the transactions are properly authorized recorded and reported to theManagement. The Company is following all the applicable Accounting Standards for properlymaintaining the books of accounts and reporting financial statements. The internal controlsystem is commensurate with its size and scale of operations. Roles and responsibilitiesare clearly defined and assigned. Standard operating procedures are in place and have beendesigned to provide a reasonable assurance. Internal checks from time to time ensure thatresponsibilities are executed effectively. The observations and good practices suggestedare thoroughly reviewed by the Management and appropriately implemented for strengtheningthe controls of various business processes.
26. Risk management
The Company has in place a mechanism to identify assess monitor and mitigate variousrisks to Key business objectives. Major risks identified by the Board and systematicallysteps taken to mitigate on a continuous basis. The Company's internal control system iscommensurate with the nature of its business and the size and complexity of operations.
27. Material Orders of Court Tribunal etc.
As required under section 134(q) of the Companies Act 2013 there are no significantand material orders passed by the regulators or courts or tribunals impacting the goingconcern status and company's operations in future.
28. Provisions of Sexual Harassment of women
The provisions/requirement of Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 (Act') and Rules made thereunder are beingfollowed by the Company and the company is providing the proper environment of working toall employees and has proper internal control Mechanism for prevention prohibition andredressal of sexual harassment at workplace. The Company has complied with the provisionsof constitution of Internal Complaints Committee under the Act. There were nocases/complaints led under this Act during the year.
29. Corporate Social Responsibility
As per the provisions of section and 135 of the Companies Act 2013 Corporate SocialResponsibility (CSR) is not applicable to the Company during the year under review sothere are no disclosures required under section134 (3)(o) of the Companies Act 2013.
30. Corporate Governance
Since the Company's Securities are listed on Emerge SME Platform of NSE by virtue ofRegulation 15 of SEBI (Listing Obligation & Disclosure Requirements) Regulation 2015the compliance with the corporate governance provisions as specified in Regulation 17 to27 and clauses (b) to (i) of sub regulation (2) of Regulation 46 and Para CD and E ofSchedule V are not applicable to the Company. Hence Corporate Governance does not formpart of this Board's Report. Though your Company has been practicing the principles ofgood corporate governance as it is committed to maintain the highest standards ofCorporate Governance.
31. Other Disclosures
a) The Company has formulated and published a Whistle Blower Policy to provide VigilMechanism for employees including directors of the Company to report genuine concerns. Theprovisions are in line with the provisions of the section 177(9) of the Companies Act2013 read with regulation 22 of the Listing Regulations.
b) The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all employees in the course of day to day business operations ofthe company.
c) The Company has adopted a Code of Conduct for Prevention of Insider Trading inaccordance with the requirements of the SEB I(Prohibition of Insider Trading) Regulation2015 as revised with a view to regulate trading in securities by the Directors anddesignated employees of the Company. The Code requires pre-clearance for dealing in theCompany's shares and prohibits the purchase or sale of Company shares by the Directors andthe designated employees while in possession of unpublished price sensitive information inrelation to the Company and during the period when the Trading Window is closed. The Boardis responsible for implementation of the Code. All Board of Directors and the designatedemployees have confirmed compliance with the Code. The Insider Trading Policy of theCompany covering code of practices and procedure for fair disclosure of unpublished pricesensitive information and code of conduct for the prevention of insider trading isavailable on the website of the Company at www.brandconcepts.in.
32. Cautionary Note:
Certain statements in the "Management Discussion and Analysis" section may beforward looking and are stated as required by the applicable laws and regulations. Manyfactors may affect the actual results which could be different from what the directorsenvisage in terms of future performance and outlook. Important factors that couldinfluence the Company's operations include global and domestic supply and demandconditions affecting selling prices of finished goods availability of inputs and theirprices changes in the Government policies regulations tax laws economic developmentswithin the country and outside and other factors such as litigation and industrialrelations.
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.
Annexures forming part of Board's report
The Annexures referred to in this Report and other information which are required to bedisclosed are annexed herewith and form a part of this Report:
|Annexure ||Particulars |
|I ||Related Party Transactions in AOC 2 |
|II ||Extract of the Annual Return in Form MGT-9 |
|III ||Policy on Director's appointment & Remuneration |
|IV ||Particulars of top ten Employees |
|V ||Managerial Remuneration as per Rule 5 |
|VI ||Management Discussion And Analysis Report |
|VII ||Secretarial Audit Report |
34. Human Resources and Industrial Relations:
Your Company has been able to operate efficiently because of developing culture ofprofessionalism integrity dedication commitments and continuous improvement shown byits employees in all functions and areas of business. Our basic objective is to ensurethat a robust talent pipeline and a high-performance culture centered on accountabilityis in place. We feel this is critical to enable us retain our competitive edge.
Your Board of Directors would like to place on record their sincere appreciation forthe wholehearted support and contributions made by all the employees of the Company aswell as customers suppliers consultants bankers and other authorities.
The Directors also thank the Central and Government India and concerned GovernmentDepartments/Agencies for their cooperation. The directors appreciate and value thecontributions made by every member of the company.
| ||For and on behalf of the Board of |
| ||Brand Concepts Limited |
|Place: Indore || || |
|Dated: 28-08-2019 ||Prateek Maheshwari ||Abhinav Kumar |
| ||Managing Director ||Whole-Time Director |
| ||DIN- 00039340 ||DIN-06687880 |