DIRECTORS' REPORT To The Members, BHANDARI HOSIERY EXPORTS LIMITED Your Directors have pleasure in presenting their 22nd Annual Report together with Audited Accounts of the Company for the year ended 31st March, 2015 PERFORMANCE REVIEW Despite challenging global and Indian scenario, your Company recorded a very good performance in terms of increased turnover as well as increased profitability. During the year 2014-15, your Company was able to achieve turnover of Rs. 12496.50 Lacs as against Rs. 11153.09 Lacs in the previous year, showing an increase of 12.05% over the previous year. The Profits after Tax of the Company for the year ended 31.03.2015 has been Rs. 219.11 Lacs as against Rs. 197.67 Lacs in the previous year showing an increase of 10.85% over the previous. The Exports of the Company for the financial year ended 31.03.2015 were to the tune of Rs. 1390.49 Lacs as against Rs. 1714.67 Lacs in the previous year. EXPORTS The Exports of the Company for the financial year ended 31.03.2015 were to the tune of Rs. 1390.49 Lacs as against Rs. 1714.67 Lacs in the previous year. REVISION IN FINANCIAL STATEMENTS The Financial Statement were approved by the Board of Directors in its meeting held on 29th May 2015, however upon observing some arithmetical errors in calculation of depreciation and some other expenses in the Audited Financial Statements and to recommend payment of dividend for the financial year 2014-15, the Board of Directors reconsidered and approved the Financial Statements in its meeting held on 22nd July 2015. DIVIDEND Your directors recommend a dividend of 1% (Rs. 0.10 per Share of face value Rs. 10/-) for the year 2014-15, (Previous year 2013-14- Nil)), subject to the approval of the shareholders at the ensuing Annual General Meeting. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND The Company had declared Interim Dividends in the year 2006-07. The unencashed dividend amount lying unclaimed to the credit of the said Unpaid Dividend Account 2006-07 became due for transfer to the Investor Education and Protection Fund in April, 2014. The company has accordingly transferred all amounts of unencashed dividend amount remaining unclaimed and due for transfer to the Investor Education and Protection Fund. TRANSFER TO RESERVES The Company does not propose to transfer any amount to reserves. CORPORATE GOVERNANCE REPORT Pursuant to Clause 49 of the Listing Agreement with BSE Ltd. (BSE), a Report on Corporate Governance is given as a part of this Directors' Report. MANAGEMENT DISCUSSION AND ANALYSIS REPORT Management Discussion and Analysis Report is given at the end of Directors' Report and forms part of this Report. SHARE CAPITAL The paid up Equity Share Capital as on 31st March, 2015 is Rs. 14.65 Crores. During the year under review, the Company has not issued any equity shares/ shares with differential voting rights or granted stock options or issued sweat equity or purchased its own shares. CAPITAL EXPENDITURE As at 31st March 2015 the gross fixed assets stood at Rs. 53.49 Crores and net fixed assets Rs. 43.57 Crores. Additions during the year amounted to Rs. 23.49 Crores to plant & machinery and other assets amounted to Rs. 1.16 crores. FINANCE Fresh long term debt for Rs. 17.16 Crores was raised during the year. However, existing term debts to the extent of Rs. 0.52 crores were repaid. The Cash Credit Limits were enhanced from Rs. 26.50 Crores to Rs. 39.50 Crores during Financial year 2014-15 and the limits were availed to the extent of Rs. 28.38 Crores. The company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring. DIRECTORS AND KMPs (i) Appointments The Board of Directors has appointed Ms. Manmeet Sikka (DIN 07135079), as Additional Director/Woman Director of the Company in the category of Independent Directors with effect from 25.03.2015. Ms. Manmeet Sikka, subject to approval of the shareholders in the ensuing Annual General Meeting, is proposed for appointment as Independent Directors for a period upto 31.03.2019. Further details of the above Director are given in the Corporate Governance Report as well as in the Notice of the Annual General Meeting being sent to the shareholders along with the Annual Report. Further, Shri Nitin Bhandari was re-appointed as Chairman & Mg. Director and CEO of the Company for a period of 3 years w.e.f. 22.11.2014 , by the Board of Directors of the Company , subject to the approval of Members of the Company at ensuing Annual General Meeting. So his appointment as such has been proposed for consideration and approval of Members of Company. Further details in this respect are given in the Notice of the Annual General Meeting being sent to the shareholders along with the Annual Report. (ii) Retirement by rotation In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Shri Nitin Bhandari, Director , retires by rotation and is eligible for reappointment. (iii) Resignations During the year under review, Shri Manmohan Sikka, Independent Director resigned from Board of Directors of the Company . (iv) Declarations by Independent Directors All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. (v) Board Evaluation In compliance with the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Nomination & Remuneration Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. (vi) Nomination & Remuneration Policy The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a Policy for selection, appointment and remuneration of Directors and Key Managerial Personnel. More details of the same are given in the Corporate Governance Report. (vii) Board Meetings During the year, 6 Board Meetings and 5 Audit Committee Meetings were convened and held. The details are given in the Corporate Governance Report. The intervening gap between the two Meetings was within the period prescribed under the Companies Act, 2013. (viii) Key Managerial Personnel During the year 2014-15, the Company had three Key Managerial Personnel viz. Mr. Nitin Bhandari, Chairman & Managing Director & CEO, Mr. Surinder Kumar, Chief Financial Officer and Mr. Gurinder Makkar, Company Secretary. On 15th April, 2015, Shri Surinder Kumar resigned and Shri Manoj Kumar has been appointed as CFO of the Company in place. 21 PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS The Company has not directly or indirectly - a) given any loan to any person or other body corporate other than usual advances envisaged for supply of materials if any, b) given any guarantee or provided security in connection with a loan to any other body corporate or person and c) acquired by way of subscription purchase or otherwise, the securities of any other body corporate. DEPOSITS Your company has not invited/ accepted deposits from public as envisaged under Sections 73 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 clause 49 of the Listing Agreement, the Company has formulated a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of 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 foreign exchange earnings & outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is Annexed herewith as "Annexure - C". RELATED PARTY TRANSACTIONS All related party transactions entered into during the financial year were on an arm''s length basis and in the ordinary course of the business of the Company. All related party transactions are placed before the Audit Committee of the Board of Directors for its approval. Prior omnibus approval of the Audit Committee of the Board of Directors is obtained for the transactions, which are of foreseen and repetitive nature. A statement giving details of all related party transactions, entered pursuant to the omnibus approval so granted, is placed before the Audit Committee of the Board of Directors for their review on a quarterly basis. During the year under reference, no Material Related Party Transactions were entered in terms of the proviso to revised Clause 49 VII C of the Listing Agreement. Hence the Company is not required to disclose details of the related party transactions in Form AOC - 2 pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014. The policy on Related Party Transactions as approved by the Board is hosted on the Company's website i.e. www.bhandariexport.com SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS There are no significant and material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations. STATUTORY AUDITORS M/s Vipan Kumar Aggarwal & Company, Chartered Accountants, the Statutory Auditors of the Company, had been appointed as Statutory Auditors of the Company for a period of 3 years at the last annual general meeting held on 29.09.2014 subject to ratification of their appointment by the members at every annual general meeting. The shareholders at the ensuing annual general meeting will consider ratification of the appointment of the Statutory Auditors. As required under Clause 41 of the Listing Agreement, the Auditors have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. SECRETARIAL AUDIT 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 had appointed M/s Rajeev Bhambri & Associates, Company Secretaries, a firm of Company Secretaries in Practice, to undertake the Secretarial Audit of the Company. Secretarial Audit Report as per Section 204 of Companies Act 2013 is placed as Annexure - A to this report. No adverse comments have been made in the said report by the Practicing Company Secretary. COST AUDITORS For the Financial Year 2014-15, Company was not required to appoint Cost Auditors. With the new Cost Audit Rules, now the Company was again required to appoint Cost Auditor for the Financial Year 2015-16. The Board on the recommendation of Audit Committee, has appointed M/s Khushwinder Kumar & Associates, Cost Accountants, Ludhiana (Firm Registration No. 00102), as Cost Auditors for the Financial Year 2015-16 and the remuneration of the Cost Auditor has been proposed to be approved by the members in the Annual General Meeting . MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN MARCH 31, 2015 AND DATE OF THE REPORT. There were no material changes and commitments affecting the financial position of the Company between the end of financial year (March 31, 2015) and the date of the Report. EXPANSION The Company has made expansion and modernization in fabric, dyeing and boiler division. The Company has plans to set up yarn dying within premises as a part of ongoing expansion and modernization programme. AUDITORS' REPORT The Auditors' Report is self-explanatory and do not call for further comments as there are no adverse remarks in the uditors' Report. APPOINTMENT OF SECRETARIAL AUDITOR AND INTERNAL AUDITOR The Company has in accordance with the applicable provisions of the Companies Act, 2013, appointed Secretarial Auditors as well as Internal Auditors for the year 2015-16. LISTING OF SECURITIES The securities of the Company are listed only on BSE Ltd. (BSE), Floor 25, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai. The Company has paid the Listing Fees to the BSE upto the financial year 2015-16 INDUSTRIAL RELATIONS The industrial relations remained very cordial and responsive during the year under review. CASH FLOW STATEMENT In conformity with the provisions of Clause 32 of the Listing Agreement with Stock Exchanges, the Cash Flow Statement for the year ended 31st March, 2015 is annexed at the end of Financial Statements. CORPORATE SOCIAL RESPONSIBILITY The provisions with respect to Corporate Social Responsibility and constitution of CSR Committee are not applicable to the Company in view of applicability criteria set under Section 135 and Schedule VII of the Companies Act, 2013 read with as well as the provisions of the Companies (Corporate Social Responsibility Policy) Rules, 20 However the Company has an innate desire and zeal to contribute towards the welfare and social upliftment of the community. The Company continues to abide by its general Social Responsibility and maintain following certifications: W.R.A.P. CERTIFICATION The Company's core values on safety, occupational health, environmental stewardship and respect for people permeate all of its actions and will continue to guide its decisions and actions in the future. The Company's commitment to environmental, health and safety processes is practised by the leadership and at all levels of management. The Company takes all reasonable and practicable steps to protect occupational health and safety of employees, community, and the environment affected by its process, products and services. It is all due to the emphasis on Social Responsibility that the Company gets Certification from Worldwide Responsible Apparel Production (W.R.A.P.) USA, a Voluntary Non Profit Organization which certifies Health, Safety, Welfare measures and compliance with Govt. and other Regulatory Authorities laws and bye laws by a Apparel/Textile Unit. BSCI (Business Social Compliance Initiative) CERTIFICATION The Company heading towards good Corporate Social Responsibility, also have s BSCI (Business Social Compliance Initiative) Certification. European retail companies and associations have developed a common monitoring system simplifying and standardizing the requirements and individual monitoring procedures. The BSCI is based on the labour standards of the International Labour Organization (ILO) and other important international regulations like the UN Charta for Human Rights, as well as on national regulations. The Initiative aims at continuously improving the social performance of suppliers, leading to Best Practice like SA8000 certification or equivalents and thus sustainably enhancing working conditions in factories worldwide. The Certification achieved by the Company in the true sense reflects the true spirit of the Company in improving working conditions, social health, safety, welfare and good Corporate practices. Besides the company would be able to get the confidence of EU based customers by ensuring good social compliance. C-TPAT CERTIFICATION The Company has got C-TPAT Certification and achieved another important milestone. C-TPAT (Customs - Trade Protection Against Terrorism) is a voluntary US government-business initiative to build cooperative relationships that improve overall international supply chain and U.S. border security. This initiative was launched to assist the trading community in the war against Terrorism some criteria such as Business Partner Requirements (Security Procedures), Container Security (Seals, Container Inspection etc), Physical Access Control, Procedural Security, Security Training and Awareness, Physical Security, Information Technology. C-TPAT stands for Customs Trade Partnership Against Terrorism and it is just that: a partnership, or relationship, that a company voluntarily builds with customs to ensure the movement of it's supply chain on the company's side and to reassure customs that the i company is not importing anything hazardous into the U.S. C-TPAT focuses on "securing company's supply chains with regards to terrorism." It has no doubt its imperative benefits as the Foreign buyer get more relied about the Company's Risk Management System and Safety and Security procedures adopted. SUBSIDIARY COMPANY/ASSOCIATE COMPANY/JOINT VENTURE There is no Subsidiary /Associate Company of the Company. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure - D". GRATUITY The provision for gratuity has been made as provided under the Payment of Gratuity Act. PARTICULARS OF THE EMPLOYEES The provisions of Rule 5(2) & (3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 requiring particulars of the employees in receipt of remuneration in excess of Rs.60 lacs per year to be disclosed in the Report of Board of Directors are not applicable to the Company as none of the employees was in receipt of remuneration in excess of Rs.60 lacs during the financial year 2014-15. So this information is NIL. The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is given in the Statement annexed herewith at "Annexure- B" . DIRECTORS' RESPONSIBILITY STATEMENT To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of the Section 134(3)(c) of the Companies Act, 2013: (i) That in the preparation of the annual financial statements for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; (ii) That such accounting policies, as mentioned in the Financial Statements as 'Significant Accounting Policies' have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31, 2015 and of the profit of the Company for the year ended on that date; (iii) That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv) That the annual financial statements have been prepared on a going concern basis; (v) That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; and (vi) That proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS The Company has in place proper and adequate internal control systems commensurate with the nature of its business, size and complexity of its business operations. Internal control systems comprising of policies and procedures are designed to ensure reliability of financial reporting, compliance with policies, procedures, applicable laws and regulations and that all assets and resources are acquired economically and used efficiently and adequately protected. DECLARATION REGARDING CODE OF CONDUCT All the members of the Board and senior management personnel have affirmed compliance with the Code of Conduct of the Company for the year ended 31st March, 2015 and a declaration to that effect signed by the Chairman & Managing Director is attached and forms part of this report. ACKNOWLEDGEMENTS Your Directors place on record their appreciation of the continued assistance and co-operation extended to the Company by the Government of India, Government of Punjab, State Bank of India, the large family of shareholders, business associates/customers/buyers, the dedicated employees and all other business constituents, who are continuing to assist your Company. For and on behalf of the Board of Directors Sd/- (Nitin Bhandari) Chairman & Managing Director Place : Ludhiana Date : 10.08.2015 |