THE MEMBERS OF
SHRI BHOLANATH CARPETS LIMITED
Your Directors have pleasure in presenting the 44th Annual Report togetherwith Audited Financial Statements of M/s. SHRI BHOLANATH CARPETS LIMITED for theFinancial Year ended 31st March 2017.
1. FINANCIAL RESULT
The summarized financial performance of your Company for the financial year 2016-17 ascompared to previous year 2015-16 has been as under:
|PARTICULARS ||CURRENT YEAR ||PREVIOUS YEAR |
| ||ENDED 31.03.2017 ||ENDED 31.03.2016 |
|NET SALES ||301264538.05 ||297807584.72 |
|OTHER INCOME ||5394555.50 ||2616885.58 |
|TOTAL REVENUE ||306659093.55 ||300424470.30 |
|TOTAL EXPENDITURE ||305754405.00 ||299589447.44 |
|PROFIT BEFORE EXCEPTIONAL AND ||904688.55 ||835022.86 |
|EXTRAORDINARY ITEMS AND TAX || || |
|EXTRAORDINARY ITEMS (CERS RECEIVABLE ||0.00 ||0.00 |
|WRITTEN OFF) || || |
|PROFIT / (LOSS) BEFORE TAX ||904688.55 ||835022.86 |
|PROVISION FOR TAXATION || || |
|- CURRENT TAX ||643632.00 ||699120.00 |
|- DEFERRED TAX ||-360993.34 ||-406091.23 |
|- TAX ADJUSTMENTS RELATING TO EARLIER ||206416.00 ||20425.00 |
|YEARS || || |
|NET PROFIT (NET LOSS) ||344659.88 ||521569.09 |
2. FINANCIAL HIGHLIGHTS
The Company has continued its growth story in terms of net profit during the year2016-17 in spite of the income from sales has gone up from Rs. 2978.08 Lakhs to Rs.3012.65 Lakhs.
The Company has recorded profit before exceptional and extraordinary items in the yearRs.9.04 Lakhs as compared to Rs. 8.35 Lakhs in the previous year 2015-16.
Whereas the net profit after tax during the year is Rs. 3.44 Lakhs as compared toprevious year 2015-16 is Rs. 5.21 Lakhs.
The reserves of the Company stand at Rs.758.96 Lakhs during the year as compared to Rs.755.51 Lakhs in the previous year ended on 2015-16.
During the year the total revenue from operations of the Company is Rs.3012.65 Lakhs.
During the year the Company was exporting carpets outside India.
6. SHARE CAPITAL
The paid up Equity Share Capital of the Company as on 31st March 2017 wasRs. 480.00 Lakhs. During the year under review the Company has not issued any types ofshare capital.
The Company has not proposed any dividend for the year 2016-17.
Your Company's assets continue to be fully insured against the risk of fire riotearthquake terrorism etc.
The organization has increased focus on cost reduction measures as well as productionof value added products. It is expected that in the current year 2017- 18 the Companyshall demonstrate better bottom line performance for value addition for the investors.
10. HUMAN RESOURCE AND WELFARE
The well-disciplined workforce which has served the Company for more than three decadeslies at the very foundation of the Company's major achievements and shall well continuefor the years to come. The
Management has always carried out systematic appraisal of performance and impartedtraining at periodic intervals. The company has always recognized talent and hasjudiciously followed the principle of rewarding performance.
11. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
There are no material changes and commitments affecting the financial position of theCompany which has occurred between the end of the financial year of the Company to whichthe financial statements relate i.e. 31st March 2017 and the date of thereport i.e. 31st August 2017.
12. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company and its future operations.
13. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has adequate system of internal control to safeguard and protect from lossunauthorized use or disposition of its assets. All the transactions are properlyauthorized recorded and reported to the Management. The Company is following all theapplicable Accounting Standards for properly maintaining the books of accounts andreporting financial statements. The Internal Auditor of the Company checks and verifiesthe internal control and monitors them in accordance with policy adopted by the company.The Company continues to ensure proper and adequate systems and procedures commensuratewith its size and nature of its business.
14. CORPORATE GOVERNANCE
Corporate Governance Report Management Discussion and Analysis statement and BusinessResponsibility Report and a certificate from the Auditors confirming compliance areannexed herewith to this report.
15. VIGIL MECHANISM / WHISTLE BLOWER POLICY
In order to ensure that the activities of the Company and its employees are conductedin a fair and transparent manner by adoption of highest standards of professionalismhonesty integrity and ethical behavior the Company has adopted a vigil mechanism policy.This policy is explained in Corporate Governance Report and also posted on the website ofcompany.
16. BUSINESS RISK MANAGEMENT
Although the company has long been following the principle of risk minimization as isthe norm in every industry it has now become a compulsion. Therefore in accordance withSEBI (LODR) Regulations 2015 the Board members were informed about risk assessment andminimization procedures after which the Board formally adopted steps for framingimplementing and monitoring the risk management plan for the company. The main objectiveof this policy is to ensure sustainable business growth with stability and to promote aproactive approach in reporting evaluating and resolving risks associated with thebusiness. In order to achieve the key objective the policy establishes a structured anddisciplined approach to Risk Management in order to guide decisions on risk relatedissues. In today's challenging and competitive environment strategies for mitigatinginherent risks in accomplishing the growth plans of the Company are imperative. The commonrisks inter alia are: Regulations competition Business risk Technology obsolescenceInvestments retention of talent and expansion of facilities. Business risk inter-aliafurther includes financial risk political risk fidelity risk legal risk. As a matter ofpolicy these risks are assessed and steps as appropriate are taken to mitigate the same.
17. CORPORATE SOCIAL RESPONSIBILITY (CSR)
Even though the provisions of section 135 of the Companies Act 2013 regardingCorporate Social Responsibility are not attracted to the company yet the Company has beenover the years pursuing as part of its corporate philosophy a CSR policy voluntarilywhich goes much beyond mere philanthropic gestures and integrates interest welfare andaspirations of the community with those of the Company itself in an environment ofpartnership for inclusive development.
The Company has not accepted any deposit under Section 73 or Section 76 of theCompanies Act 2013 read with the Companies (Acceptance of Deposit) Rules 2014 during theyear under review.
19 . AUDITORS' OBSERVATION
There were no adverse remarks in the auditor's report.
19.1 STATUTORY AUDITOR
The Statutory Auditor of the Company has given unqualified report during the year underreview.
19.2 SECRETARIAL AUDITOR
There were no qualifying remarks in the Secretarial audit report.
20.1 CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year 2016-17 there is no change in the Directors of the Company.
20.2 INDEPENDENT DIRECTOR(S) DECALARATION
In pursuance of sub-section (7) of Section 149 of the Companies Act 2013 all theIndependent Directors have furnished the declaration that they meet the criteria ofIndependence as provided in Sub-Section (6) of Section 149 of the Companies Act 2013.
20.3 BOARD ANNUAL EVALUATION
Pursuant to the provisions of companies Act 2013 and Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 ("SEBIListing Regulations") the Board has carried out annual performance evaluation of itsown performance the directors individually as well the evaluation of the working of itsAudit Nomination & Remuneration and Stakeholder committee. The manner in which theevaluation has been carried out has been explained in Corporate Governance Report.
20.4 REMUNERATION POLICY
The Board has on the recommendation of the Nomination & Remuneration committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Remuneration Policy is stated in the Corporate Governance Report.
20.5 DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTIVEPROHIBITION AND REDRESSAL) ACT 2013.
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at Work Place (Prevention Prohibition andRedressal) Act 2013'. An Internal
Complaints Committee has been set up to redress complaints received regarding sexualharassment. The Company affirms that during the year under review no cases were filedunder the said Act before the Internal Complaints Committee.
21. BOARD AND COMMITTEE MEETINGS
21.1 BOARD MEETING
During the year 2016-17 05 meeting of the Board of Directors were held on 30thMay 2016 27th July 2016 29th August 2016 14thNovember 2016 04th February 2017. The maximum time gap between any twoconsecutive meetings was not exceeding four months.
21.2 AUDIT COMMITTEE MEETING
The Chairman of the Audit Committee is Mr. Amarnath Pandey. During the year 4 AuditCommittee meetings were held on 23rd May 2016 05th August 201620th October 2016 and 03rd February 2017. The composition of theAudit Committee and number of meetings attended by the Members are given below:
|Name of directors ||Category ||Number of meetings ||Meeting Attended |
| || ||held during 2016-17 || |
|Mr. Amarnath Pandey ||Independent ||4 ||4 |
|Smt. Veena Agnihotri ||Independent ||4 ||4 |
|Dr. Kavita Shah ||Independent ||4 ||4 |
The other details of Board and Committee Meetings are given in Corporate GovernanceReport forming part of the Annual Report.
21.3 INDEPENDENT DIRECTORS MEETING
During the year the one meeting of independent directors was held on 04.01.2017.
22.1 STATUTORY AUDITORS
M/s O. P. Tulsyan & Co. (Firm Registration No. 500028N)Chartered Accountants hasbeen appointed as Statutory Auditors of the Company at the 41st Annual GeneralMeeting held on 30th September 2014 for a period of three years subject toratification by members at every consequent Annual General Meeting. Thereforeratification of appointment of Statutory Auditor is being sought from the Members of theCompany at the ensuing Annual General Meeting to be held on 29th September2017.
22.2 SECRETARIAL AUDITORS
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 hasappointed M/s Ajay Jaiswal & Co. (CP No.: 3684 FCS: 5112) Company Secretaries toundertake the Secretarial Audit of the company. The Secretarial Audit Report is annexedherewith as Annexure A'.
22.3 INTERNAL AUDITORS
Mr. Sandeep Anand Singh Chartered Accountant performs the duties of Internal Auditorsof the Company and their report is reviewed by the Audit Committee from time to time.
23. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3) (m) of the Companies Act 2013 readwith Rule 8 of The Companies (Accounts) Rules 2014 is annexed herewith as "AnnexureB".
24. 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 2013are disclosed in Form No. AOC -2 is annexed herewith as "Annexure C".
25. EXTRACTS OF ANNUAL RETURN AND OTHER DISCLOSURES UNDER COMPANIES (APPOINTMENT &REMUNERATION) RULES 2014
The extract of Annual Return pursuant to the provisions of Section 92 of the CompaniesAct 2013 read with rule 12 of the Companies (Management & Administration) Rules 2014is furnished in Annexure-D and is attached to this report.
26. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Management Discussion and Analysis Report on financial condition and results ofoperations of the Company for the year under reviews required under Regulation 34 of SEBI(LODR) Regulation 2015 is given as separate statement forming part of the Annual Report.
27. PARTICULARS OF EMPLOYEES
DETAILS PERTAINING TO REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIESACT 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIALPERSONNEL) RULES 2014
The information required pursuant to Section 197 read with Rule 5(2) and 5(3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofemployees of the Company is as follows:
i. The percentage increase in remuneration of each Director Chief Executive Officerand Chief Financial Officer during the Financial Year 2016-17 ratio of the remunerationof each Director to the median remuneration of the employees of the Company for thefinancial year 2016-17 and the comparison of remuneration of each Key Managerial Personnel(KMP) against the performance of the Company are as follows:
|Name of Director / KMP ||Remuneratio n of the Director / KMP in F.Y. 2016-17 ||Remuneration of the Director / KMP in F.Y. 2015-16 ||% Increa se in F.Y. 2016- 17 ||Ratio(times) of the remuneration of each director to the median remuneration of the employees ||Comparison of the remuneration of the KMP against the performance of the company |
|Bholanath Baranwal Managing Director (KMP) ||696000 ||696000 ||0.00 ||2.10 ||The turnover of the Company increase 2.35%. There is a marginal increase in profit before tax and but the profit after tax has decreased. |
| || || || || || |
|Vivek ||181000 ||181000 ||0.00 ||2.10 || |
|Baranwal || || || || || |
|(CFO) || || || || || |
ii. There were 2 permanent employees on the rolls of the Company during thefinancial year 2016-17.
iii. Relationship between average increase in remuneration and company performance:
The turnover of the Company increase 2.35% There is a marginal increase in profitbefore tax and but the profit after tax has decreased.
vi. Comparison of Remuneration of the Key Managerial Personnel(s) against theperformance of the Company:
There is no change in total remuneration of Key Managerial Personnel during the year incomparison to last year whereas the turnover of the Company increases 2.35%. There is amarginal increase in profit before tax and but the profit after tax has decreased.
FOLLOWING ARE THE DATE WISE MARKET CAPITALIZATION OF THE COMPANY:-
v. A) Variations in the market capitalization of the Company:
There were trading on the stock exchange.
|Date ||Open ||Total No. of ||Market |
| ||Price ||Shares in the ||Capitalization |
| || ||Market || |
|05-Apr-16 ||6.27 ||4800000 ||30096000 |
|06-Apr-16 ||5.96 ||4800000 ||28608000 |
|07-Apr-16 ||5.67 ||4800000 ||27216000 |
|08-Apr-16 ||5.39 ||4800000 ||25872000 |
|11-Apr-16 ||5.13 ||4800000 ||24624000 |
|12-Apr-16 ||4.88 ||4800000 ||23424000 |
|13-Apr-16 ||4.64 ||4800000 ||22272000 |
|18-Apr-16 ||4.65 ||4800000 ||22320000 |
|28-Apr-16 ||4.62 ||4800000 ||22176000 |
|04-May-16 ||4.39 ||4800000 ||21072000 |
|05-May-16 ||4.18 ||4800000 ||20064000 |
|02-Jan-17 ||3.98 ||4800000 ||19104000 |
|17-Feb-17 ||3.79 ||4800000 ||18192000 |
|21-Feb-17 ||4.37 ||4800000 ||20976000 |
|22-Feb-17 ||4.58 ||4800000 ||21984000 |
|23-Feb-17 ||4.8 ||4800000 ||23040000 |
|27-Feb-17 ||5 ||4800000 ||24000000 |
|28-Feb-17 ||4.78 ||4800000 ||22944000 |
|01-Mar-17 ||5.01 ||4800000 ||24048000 |
|02-Mar-17 ||5.26 ||4800000 ||25248000 |
|03-Mar-17 ||5.52 ||4800000 ||26496000 |
|06-Mar-17 ||5.79 ||4800000 ||27792000 |
|07-Mar-17 ||6.07 ||4800000 ||29136000 |
|08-Mar-17 ||6.37 ||4800000 ||30576000 |
|09-Mar-17 ||6.62 ||4800000 ||31776000 |
|10-Mar-17 ||6.62 ||4800000 ||31776000 |
|14-Mar-17 ||6.68 ||4800000 ||32064000 |
|15-Mar-17 ||6.68 ||4800000 ||32064000 |
|17-Mar-17 ||6.68 ||4800000 ||32064000 |
|20-Mar-17 ||6.68 ||4800000 ||32064000 |
|21-Mar-17 ||6.68 ||4800000 ||32064000 |
There were trading on the stock exchange the price earnings ratio of the company as on31.03.2017 is Rs. 95.42 per share.
c) Percent increase over/ decrease in the market quotations of the shares of thecompany as compared to the rate at which the Company came out with the last public offerin the year:
There was no further offering of the shares (FPO).
vi. Average percentage increase made in the salaries of employees other than theManagerial Personnel in the last financial year i.e. 2016-17 was 7.06 % whereas theincrease in the managerial remuneration for the same financial year was 0%.
vii. The key parameters for the variable component of remuneration availed by thedirectors are considered by the Board of Directors based on the recommendations of theHuman Resources Nomination and Remuneration Committee as per the Remuneration Policy forDirectors Key Managerial Personnel and other Employees.
viii. The ratio of the remuneration of the highest paid director to that of theemployees who are not directors but receive remuneration in excess of the highest paiddirector during the year Not Applicable; and
ix. It is hereby affirmed that the remuneration paid is as per the RemunerationPolicy for Directors Key Managerial Personnel and other Employees.
x. THE PARTICULARS OF THE EMPLOYEES WHO ARE COVERED BY THE PROVISIONS CONTAINED IN RULE5(2) AND RULE 5(3) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OFMANAGERIAL PERSONNEL)RULES 2014 ARE: a) Employed throughout the year Nil b) Employed for part of the yearNil
xi. PERFORMANCE EVALUATION OF THE BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS
The performance of the Directors is evaluated on the basis of their contributions atthe meetings strategic inputs for the performance and growth of the Company among others.The Directors have carried out performance evaluation on annual basis of DirectorsCommittee and the Board. The Nomination and Remuneration Committee of the Board has laiddown the performance evaluation framework under which performance of every Director isevaluated. The framework also provides the manner in which the Directors as a collectiveunit in the form of Board Committees and the Board function and perform.
28. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Companies Act 2013 re-emphasizes the need for an effective Internal FinancialControl system in the Company which should be adequate and shall operate effectively. Rule8(5) (viii) of Companies (Accounts) Rules 2014 requires the information regardingadequacy of Internal Financial Controls with reference to the financial statements to bedisclosed in the Boards report. The internal financial controls were in operationduring the reporting period from 1st April 2015 to 31st March 2017. Ourmanagement assessed the effectiveness of the Company's internal control over financialreporting as of 31st March 2017. M/s. O.P. Tulsiyan & Co. CharteredAccountants the statutory auditors have audited the financial statements. They haveassessed the internal financial controls including the Entity Level Controls ProcessApplication and Transaction Controls and Information Technology General Controls. Theaudit committee review reports have been submitted by the management and audit reportshave been submitted by internal auditors and statutory auditors. Suggestions forimprovement are considered and the audit committee follows up on corrective action. Theaudit committee also meets statutory auditors to ascertain inter alia their views on theadequacy of internal control systems and keeps the board of directors informed of itsmajor observations periodically. The Company has a comprehensive risk managementframework. Compliance of secretarial functions is ensured by way of secretarial audit.Based on its evaluation as defined in section 177 of Companies Act 2013 and Regulation 18of SEBI Listing Regulations 2015 audit committee has concluded that as of 31stMarch 2017 the internal financial controls were adequate and operating effectively.
29 . DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and according to according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
a) That in the preparation of the annual financial statements for the year ended 31stMarch 2017; the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
b) That such accounting policies as mentioned in Notes to the Financial Statements havebeen selected and applied consistently and judgment and estimates have been made that arereasonable and prudent soaps to give a true and fair view of the state of affairs of theCompany as at 31st March 2017 and of the profit of the Company for the yearended on that date;
c) That proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d) That the annual financial statements have been prepared on a going concern basis;
e) That proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively.
f) That system to ensure compliance with the provisions of all applicable laws was inplace and was adequate and operating effectively.
29. COMPANIES WHICH CEASED TO BE HOLDING SUBSIDIARY OR ASSOCIATE COMPANY
There is no holding and subsidiary company which is to be ceased during the financialyear. The Company has an associate company but not ceased the relation during the periodunder review.
30. PARTICULARS OF LOANS INVESTMENTS OR GUARANTEE
There is no loan or guarantee but investment made pursuant to provisions of Section186 of the Companies Act 2013.
The Company has been very well supported from all quarters and therefore your Directorswould like to place on record their sincere appreciation for the support and co-operationreceived from Employees Dealers Suppliers Central Government and State GovernmentsBankers Credit Rating Agencies Depositories Stock Exchange Registrar and ShareTransfer Agents Associates as well as our Shareholders at large during the year underreview.
Your Directors also wish to place on record their deep sense of appreciation for thecommitment abilities and hard work of all executives officers and staff that enabledCompany to consistently deliver satisfactory and rewarding performance even in thechallenging economic conditions.
We look forward to receiving the continued patronage from all quarters to become abetter and stronger company.
32. CAUTIONARY STATEMENT
The statements contained in the Board's Report and Management Discussion and Analysiscontain certain statements relating to the future and therefore are forward looking withinthe meaning of applicable securities laws and regulations. Various factors such aseconomic conditions changes in government regulations tax regime other statues marketforces another associated and incidental factors may however lead to variation in actualresults.
| ||On Behalf of the Board |
| ||Sd/- |
| ||Bholanath Baranwal |
| ||(Chairman & Managing Director) |
| ||DIN: 00306086 |
|Date: 31st August 2017 || |
|Place: Varanasi || |