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Narbada Gems & Jewellery Ltd.
|BSE: 519455||Sector: Consumer|
|NSE: N.A.||ISIN Code: INE540C01021|
|BSE 00:00 | 16 Nov||27.55||
|NSE 05:30 | 01 Jan||Narbada Gems & Jewellery Ltd|
Narbada Gems & Jewellery Ltd. (NARBADAGEMS) - Director Report
Company director report
DIRECTORS REPORT To
Your Directors have pleasure in presenting the Twenty Sixth Annual Report togetherwith the Audited Financial Statements of the Company for the financial year ended 31stMarch 2018
1 FINANCIAL SUMMARY(Rs. in lakhs)
2. State of Company's Affairs:
The Company is on growth path with reinforced belief into its manufacturingcapabilities. The Company achieved a total turnover of Rs. 2626.49 lakhs for the yearended 31st March 2018 as compared to Rs. 1157.49 lakhs in the previous year with theincrease of 126.91%. The profit after tax during the year ended 31st March 2018is Rs.113.25 lakhs whereas the profit after tax for the previous year ended 31st March 2017stood at Rs. 23.56 lakhs.
3. UTILIZATION OF PROCEEDS OUT OF PREFERENTIAL ISSUE:
During the year the Company had issued 9091600 warrants under Preferential Issue toPromoter/ Promoter Group and Non-Promoters convertible into Equity Shares. During theyear 5046300 warrants has also been converted into Equity shares in first tranche. Fromthe proceeds of Preferential issue to the tune of Rs. 757.20 Lakhs the Company couldaugment the working Capital for expansion of its business operations and has also set upnew factory for manufacturing of Gold Coloured precious stone studded & DiamondJewellery with emphasis on Diamond Jewellery for enhancement of its manufacturingcapabilities.
4. FUTURE OUTLOOK:
The Company at present is dealing in colored precious stone studded jewellery. Thecollection includes varied range of Gemstone Necklace Set Earrings and Pendants. Afterthe end of the financial year the Company has also started manufacturing the products onits own by setting up of its in-house manufacturing unit with the total manufacturingcapacity of 15 kgs. per month out of the proceeds of further issue of capital by way ofissue of warrants convertible into Equity shares. This would enable the Company to lowerits overall processing and jobwork charges and the cost of production as a whole. In viewof the latest industry trends for branded jewellery with modern designs the Company hasintroduced fresh range of products with creative and light weight jewellery along withuncut and flat diamond jewellery. The Company has also started export of its specialityjewellery and completed the first export after the end of the reporting period.
In order to conserve resources for further expansion of the Company's business yourDirectors have opined to not recommend any dividend for the year 2017-18.
Amount to be carried forward to the reserves is Rs. 113.25 Lakhs being profit for theyear.
7. SHARE CAPITAL:
As on the financial year ended 31st March 2018 the paid up share capital of theCompany is Rs. 80120100/- divided into 8012010 Equity shares of Rs. 10/- each. Duringthe year under review the Company has allotted 5046300 new Equity shares uponconversion of warrants issued under Preferential Issue @Rs.12.50 Per share.
8. LISTING AGREEMENT:
The shares of your Company are listed at BSE Ltd. The Company has duly complied withall the applicable provisions of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 as amended from time to time except for the 210000shares issued under Preferential issue and the same are pending for listing due todisclosure requirements.
9. CORPORATE GOVERNANCE
The Corporate Governance Principles implemented by the Company seeks to protectrecognize and facilitate shareholders rights and ensure timely and accurate disclosures tothem. Your Company has been constantly reviewing and benchmarking itself withwell-established standards of Corporate Governance besides strictly complying with therequirements of the Companies Act 2013 and the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 to the extent applicable.
It is to be noted that pursuant to Regulation 15 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the compliance with the Corporate Governanceprovisions as specified in Regulation 17 to 27 clauses (b) to (i) of Regulation 46(2) andpara C D and E of Schedule V does not apply to your Company as its paid-up share capitaldoes not exceed Rs. 10 Crores and net worth does not exceed Rs. 25 Crores as on the lastday of previous financial year ended 31st March 2018. However the Board of Directors andthe management of the Company believe that the compliance of law should be in true letterand spirit and that the Company's legacy of fair transparent and ethical governancepractices shall be maintained.
10. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
In accordance with the provisions of Companies Act 2013 and the SEBI (ListingObligations and Disclosure Requirements) Rules 2015 the Board of Directors of yourCompany is duly constituted with an optimum combination of executive and non-executivedirectors. The terms and conditions of appointment of independent directors are as perSchedule IV of the Act. They have submitted a declaration that each of them meets thecriteria of independence as provided in Section 149(6) of the Act and there has been nochange in the circumstances which may affect their status as independent director duringthe year.
Mr. Ritesh Kumar Sanghi retires by rotation at the ensuing Annual General Meeting andbeing eligible offers himself for re-appointment. His profile is given elsewhere in thereport. Your Directors recommend his re-appointment.
During the period under review Ms. Shreya Mangal had resigned as the Company Secretaryand Compliance Officer of the Company.Further Mr. Ashish Kumar Gupta has been appointedas Company Secretary and Compliance Officer of the Company w.e.f. 11th January 2018.
11. NUMBER OF MEETINGS OF THE BOARD:
i) i) The Board Meeting is duly called and convened by giving proper notice to all thedirectors of the Company. The Board is also authorized to pass any resolution of urgentnature by circulation subject to the compliance of provisions of Companies Act 2013.
ii) The Agenda for the meeting is prepared in consultation with the Managing Directorkeeping in view all the matters including operational matters to be discussed by theBoard.
iii) Notice of the Board Meeting and the notes to agenda are sent to all the Directorsof the Company in advance
iv) Any sensitive matter may be discussed at the meeting without prior intimation todirectors in
v) Nine (9) Board meetings were held during the year and the gap between two meetingsdid not exceed one hundred twenty days. The dates on which the said meetings were heldare:
25.05.2017 31.07.2017 14.08.2017 28.08.2017 16.10.2017 14.12.2017 11.01.201813.02.2018 and 14.03.2018. The attendance of each director at the Board Meetings is asfollows:
The necessary quorum was present for all the meetings.
12. DECLARATION BY INDEPENDENT DIRECTORS:
The Company has received necessary declaration from eachindependent director underSection 149(7) of the Companies Act2013 that they meet the criteria of independence laiddown inSection 149(6) of the Companies Act 2013 and Regulation 25 of SEBI(ListingObligations and Disclosure Requirements) Regulations 2015.
The terms and conditions for appointment of independent directors are available on thewebsite of the Company at www.narbadajewellery.com.
The Independent Directors of the Company have convened a meeting on 11th January 2018exclusively without the presence of non-independent Directors and other members ofmanagement for the evaluation of the Board.
13. BOARD EVALUATION:
The Board of Directors of the Company upon recommendation of Nomination andRemuneration Committee have laid down the criteria for performance evaluation of Boardits Committees and the individual Board Members including Independent Directors pursuantto the provisions of the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulation 2015.
The evaluation of the Board and its committees were based on the criteria coveringvarious assessment parameters like structure and composition frequency & duration ofmeetings its processes and procedures effectiveness of the Board/ committees itsfinancial reporting process under various regulations and/ or terms of reference of thecommittees etc. The criteria for evaluation of performance of the individual Directorsincluded various parameters viz. attendance &participation during the meetings theiractive contribution and discussions on important matters understanding of the Companyamong others. The performance evaluation of Independent Directors was done by the entireBoard and in the evaluation the Director who was subject to evaluation did notparticipate.
The Board Evaluation Policy specifying the manner and process of evaluation of theperformance of the Board is updated on the website of the Company at
14. MANAGERIAL REMUNERATION
No remuneration is paid to the Managing Director or the Whole-time Directors of theCompany. The information required pursuant to Section 197 read with rule 5 of theCompanies (Appointment and Remuneration) Rules 2014 and Companies (Particulars ofEmployees) Rules 1975 in respect of employees of the Company and Directors is furnishedhereunder:
i) Median remuneration of the Company for all its employees is Rs. 38566/- for theFinancial Year 2017-18.
ii) Details of percentage increase in the remuneration of each Director and CFO andCompany Secretary in the Financial Year 2017-18 are as follows:
*For part of the Financial Year
iii) Percentage increase in the median remuneration of all employees in the financialyear 2017-18:
Number of permanent employee on the rolls of the Company as on 31st March 2018 are 52.
13. Familiarization Programme for Independent Directors:
The Company briefs its new Independent Directors on their roles rights as IndependentDirector and nature of the industry in which the Company operates etc. FamiliarizationProgramme for the Independent Directors provides them an opportunity to familiarize withthe Company its management and its operations so as to gain a clear understanding oftheir responsibilities and contribute significantly towards the growth of the Company.
The Companys Policy for familiarization of Independent Directors is updated atthe website of the Company at www.narbadajewellery.com
15. FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS:
The Company briefs its Independent Directors on their roles rights as IndependentDirector and natureof the industry in which the Company operates etc. FamiliarizationProgramme for theIndependent Directors provides them an opportunityto familiarize with theCompany its management and itsoperations so as to gain a clear understanding of theirresponsibilities and contribute significantly towardsthe growth of the Company.
The Company's Policy for familiarization of Independent Directors is updated at thewebsite of the Company at www.narbadajewellery.com
16. COMMITTEES OF THE BOARD:
The Board has constituted three committees at present:
F Audit committee;
F Nomination and Remuneration committee;
F Stakeholders Relationship committee
The Committees of the Board meet at regular intervals and have the requisite subjectexpertise to handle and resolve matters expediently. The Board oversees the functioningofthe Committees. Detailed terms of reference composition meetings and other informationof each of the Committees of the Board is detailed herein below:
16A. AUDIT COMMITTEE:
The constitution of Audit Committee of the Board is incompliance with the provisions ofSection 177 of the Companies Act 2013 Regulation 18 of the SEBI (Listing Obligation andDisclosure Requirement) Regulations 2015. The details of the members of the AuditCommittee and their attendance in the Committee meetings are as under:
Four (4) Audit committee meetings were held during the year and the gap between twomeetings did not exceed one hundred twenty days. The dates on which the said meetings wereheld are as follows: 25.05.2017 28.08.2017 14.12.2017 and 13.02.2018.The necessaryquorum was present for all the meetings.
The terms of reference of the Audit Committee are broadly given under:
G The recommendations for appointment remuneration and terms of appointment ofauditors of the Company;
G Review and monitor the auditor's independence and performance and effectiveness ofaudit process
G Examination of the financial statement and the auditors' report thereon;
G Approval or any subsequent modification of transaction of the company with relatedparties;
G Scrutiny of inter-corporate loans and investments;
G Valuation of undertakings or assets of the Company wherever it is necessary;
G Evaluation of internal financial controls and risk management systems;
G Monitoring the end use of funds raised through public offers and related matters;
G Review the functioning of the whistle blower mechanism;
G Approval of transactions with related parties.
16B. NOMINATION AND REMUNERATION COMMITTEE:
The constitution of Nomination and Remuneration Committee is in compliance with therequirements of provisions of Section 178 of the Companies Act 2013 Regulation 19 ofSEBI (Listing Obligation and Disclosure Requirement) Regulations 2015.
The Nominations and Remuneration Committee constituted by the Company is responsiblefor looking into the remuneration payable to the Whole-time Directors and other Employeesof the Company. The Committee also approves the Remuneration Policy for employees otherthan Whole time Directors of the Company as may be recommended to it. The Company hasformulated a policy on Nomination and Remuneration of directors in accordance with Section178 (3) of the Companies Act 2013 and same is available on website of the Company
The Nomination and Remuneration Committee of the Company as at 31.03.2018 comprises ofthree directors all of them being non-executive independent directors:
During the year under review one meeting of the Committee was held on 11.01.2018 forformulation and evaluation of performance of Independent Directors and for assessment andrecommendation for the appointment of Company Secretary and Compliance Officer of theCompany. Requisite quorum was present for the meeting.
16C. STAKEHOLDERS RELATIONSHIP COMMITTEE:
The Committee ensures cordial investor relations and overseesthe mechanism forredressal of investors' grievances. The Committee specifically looks into redressingshareholders'/investors' complaints/ grievances pertaining to share transfersnon-receipts of annual reports and other related complaints
The composition of the Stakeholders' Relationship Committee and the details of meetingsattended by its members are given below:
The meetings of the stakeholders' relationship committee were held on 10.04.201708.05.2017
20.05.2017 10.06.2017 20.07.2017 31.07.2017 10.08.2017 31.08.2017 20.09.201728.09.2017
12.10.2017 20.11.2017 30.12.2017 11.01.2018 10.03.2018 and 30.03.2018 during theyear mainly for approval of share transfers transmission and issue of duplicate sharecertificates.
17. CONSITUTION OF INTERNAL COMPLAINTS COMMITTEE UNDER SEXUAL HARRASSMENT OF WOMEN ATWORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT 2013:
Your management is concerned about the safety of women workforce and has constituted anInternal Complaints Committee under Sexual Harrassment Of Women At Workplace (PreventionProhibition And Redressal) Act 2013. During the financial year 2017-18 there was no suchinstances reported.
18. CODE OF CONDUCT:
In compliance with the SEBI (Listing Obligations and Disclosure Requirements)Regulation 2015 and the Companies Act 2013 the Company has framed and adopted a Code ofConduct. The Code is applicable to the members of the Board the executive officers themembers of the management one level below the executive directors including allfunctional heads of the Company. The Code is available on the website of the Company -
19. MARKET PERFORMANCE OF THE COMPANY DURING THE FINANCIAL YEAR 2017-18:
20. VIGIL MECHANISM:
In accordance with Section 179(9) & (10) of the Companies Act 2013 the Companyhas adopted vigil mechanism for directors and employees to report concerns aboutunethical behavior actual or suspected fraud or violation of the Company's code ofconduct and ethics. The Vigil Mechanism/ Whistle Blower policy is available on theCompany's website www.narbadajewellery.com
A Statutory Auditors:
The Company had appointed M/s D.V. Aditya & Co. Chartered Accountants (Firm Reg.No. 000044S M. No. 022646) Hyderabad as Statutory Auditors of the Company at the 25thAnnual General Meeting of the Company to hold office till the conclusion of the 30thAnnual General Meeting to be held in the calendar year 2022.
B. Secretarial Auditor:
In terms of Section 204 of the Companies Act 2013 and rules made there under ShriAjay S. Shrivastava Practicing Company Secretary Hyderabad (ICSI Membership No. 3489 ;CP No.: 3479)has been appointed as Secretarial Auditor of the Company. The report of theSecretarial Auditor is enclosed as ''Annexure I" to this report.
C. Internal Auditors:
The Company has appointed M/s Krishna and Suresh Chartered Accountant Hyderabad (FirmRegistration No- 001461S) as its Internal Auditor. Their scope of work includes review ofprocesses for safeguarding the assets of the Company review of operational efficiencyeffectiveness of systems and processes and assessing the internal control strengths inall areas.
22. RISK MANAGEMENT:
Risk Management framework of your Company encompasses practices relating to theidentification analysis evaluation treatment mitigation and monitoring of the externaland operational controls risks to achieve our key business objectives. The Board seeks tominimize the adverse impact of the risks thus enabling the Company to leverage marketopportunities effectively and enhance its long-term competitive advantage.
23. EXTRACTS OF ANNUAL RETURN:
Pursuant to the provisions of section 92(3) oftheCompaniesAct2013 read with Rule 12(1)of the Companies (Management and Administration) Rules 2014 an extract of annual returnin Form MGT-9 is attached as a part of this Annual Report as "Annexure II".
24. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS:
The details in respect of internal financial control and their adequacy are included inthe Management Discussion & Analysis which forms part of this report.
25. MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF THE COMPANY:
There are no material changes between the date of balance sheet and the date of thisreport that would affect the financial position of the company.
26. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
The Management Discussion and Analysis report for the year ended 31st March 2018 areattached which forms part of the Annual Report.
27. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:
A. Conservation of Energy
The disclosure of particulars with respect to conservation of energy pursuant toSection 134 (3) (m) of the Companies Act 2013 read with rule 8(3) of the Companies(Accounts) Rules 2014 are not applicable as our business is not specified in the Schedule. However the Company makes its best efforts to conserve energy in a more efficient andeffective manner.
B. Technology Absorption
The Company has not carried out any specific research and development activities.Accordingly the information related to technology absorption adaptation and innovationis reported to be NIL.
C. Foreign Exchange Earnings and Outgo
During the financial year 2017-18 there were NIL Foreign Exchange Earnings &Outgo.
28. CORPORATE SOCIAL RESPONSIBILITY:
As the Company's net worth does not exceed Rs. 500 Crores or Company's turnover doesnot exceed Rs. 1000 Crores or the Company's net profit does not exceed Rs. 5 Crores forany financial year the provisions of Section 135 of the Companies Act 2013 regardingCorporate Social Responsibility (CSR) are not applicable.
29. ^DIRECTORS' RESPONSIBILITY STATEMENT:
Your Directors would like to inform the members that the Audited Financial Statementsfor the year ended 31stMarch 2018 are in full conformity with the requirement of the Actand they believe that the financial statements reflect fairly the form and substance oftransactions carried out during the year and reasonably present the Company's financialcondition and results of operations. M/s D.V. Aditya & Co. CharteredAccountants Statutory Auditors of the Company have audited the Financial Statements ofthe Company and issued their report thereon. Pursuant to the requirement of Section 134(5)of the Companies Act 2013 your Directors further confirm that:
i) i) In the preparation of the Annual Accounts the applicable Accounting Standardshave been followed along with proper explanations relating to material departures;
ii) The Directors have 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 and ofthe profit and Loss of the Company for that period;
iii) The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv) The Directors have prepared the annual accounts on a going concern basis.
v) The directors in case of listed company have laid down internal financial controlsto be followed by the company and such controls are adequate and are operatingeffectively.
vi) The Directors have devised proper system to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and are operating effectively.
30. PARTICULARS OF EMPLOYEES:
There are no employees drawing remuneration equal or more than the limits specified inCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
31. DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES:
There are no subsidiaries/ Associate Companies and/ or joint ventures to the Company ason the date of this report.
32. DEPOSITS FROM PUBLIC:
The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet.
33. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186:
The Company has not given any loan or guarantee or security or made any investmentduring the financial year in terms of Section 186 of the Companies Act 2013.
34. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
The particulars of every contract or arrangements entered into by the Company withrelated parties referred to in sub-section (1) of section 188 of the Companies Act 2013is disclosed in Form AOC-2 as "Annexure IN1' to this report.
Your Directors thank all the employees customers vendors investors and otherstakeholders of the Company for their continuous support. The Directors also wish to placeon record its appreciation of Banks Central and Local Governments and regulatoryauthorities for their guidance and support.