DIRECTORS REPORT Dear Shareholders, Your Directors are pleased to present the 35th Annual Reports together with the Audited Accounts of the Company for the year ended on 31st March' 2015. DIRECTORS RESPONSIBILITY STATEMENT: Pursuant to provisions of Section 134(5) of the Companies Act, 2013, the Directors hereby state and confirm - (a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period; (c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; (d) the directors had prepared the annual accounts on a going concern basis; and (e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. (f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. OPERATION: During the year the turnover of the Company has been decreased despite taking all reasonable steps. DIVIDENDS: Based on the Company's performance during the year 2014-15, the Board of Directors decided to recommend dividend of Rs.1/- (i.e. 10%) per share amounting to Rs. 7712783 (inclusive of tax of Rs. 1076561). The dividend payout is subject to approval of members at the ensuing Annual General Meeting. TRANSFER TO RESERVES: The Board of the directors has proposed to transfer Rs. 10.00 Lakhs to the General Reserve out of the amount available for appropriations and an amount of Rs 73.55 lakhs is proposed to be retained in the Profit and Loss Account after provision of proposed dividend and taxes there on. Adjustment of Rs.9.47 Lakhs have been made in the Retained earnings for depreciation on fixed assets whose useful life has been expired before 1.4.2014. SETTLEMENT OF MANAGEMENT DISPUTES: As already reported that the decade old disputes between the two Groups of Shareholders namely Raj Kumar Gupta Group and Ashok Kumar Gupta Group stands resolved by order dated 04.07.2007 read with order dated 03.08.2007 passed by the Hon'ble Company Law Board in C.P. No. 14/99. The directions given by the CLB vide the aforesaid two orders were implemented and communicated to the Shareholders as part of Annual Report forming part of published Accounts for the F.Y.2006-2007 and onwards. However in this regard the Special Leave Petition vide no. 25165-25166/2007filed by Shri Ajit Kumar Gupta and others is still pending before Hon'ble Supreme Court for appropriate order The matter is still pending before Hon'ble Supreme Court for final hearing/decision. Since long back the case is listing in weekly list instead of final list for hearing, company is trying for final hearing at the eeliest. The matter is proposed to come in first week of July, 2015. The Management does not reasonably expect that the Special Leave Petition, when ultimately concluded and determined, will have a material and adverse effect on the Company's results of operations or financial condition. However in view of Hon'ble Supreme Court order Mr. Raj Kumar Gupta illegally stating himself as Executive Director and CEO of the Company, using letter head of Company and sending fake and baseless letters to the Company. The Board has rejected all such illegal and baseless letters of Mr. Raj Kumar Gupta. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT: Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report. DIRECTORS: The Company had, pursuant to the provisions of clause 49 of the Listing Agreements entered into with Stock Exchanges, appointed Mr. Ashok Kumar Kapoor, Mr. Praveen Singh and Mr. Tanmay Deva as Independent Directors of the Company. Further in accordance with the provisions of section 149 of the Act, these Directors are being appointed as Independent Directors to hold office as per their tenure of appointment mentioned in the Notice of this Annual General Meeting (AGM) of the Company. Mrs Shalini Chnadra who was appointed as Additional Director as Executive Director on 01.03.2015 and holds the said office till the date of the Annual General Meeting. A notice has been received from a member proposing her candidature for his reappointment. Mr. Ashok Kumar Gupta, Director, retires by rotation and being eligible has offered himself for re-appointment. RE- APPOINTMENT OF SHRI ASHOK KUMAR GUPTA, AS MANAGING DIRECTOR. The Company has filed by complying all relevant provisions and approval of Nomination and Remuneration Committee and approval of board an application before Central Govt. on 18.02.2014 and on 09.08.2014 under Sections 196, 197, 203 and any other applicable provisions of the Companies Act, 2013 and the rules made there under read with Schedule V to the Companies Act, 2013 to get permission of re- appointment of Shri Ashok Kumar Gupta, as Managing Director a further period of five years, w.e.f. 1st April' 2014. The same is still pending before Central Government for appropriate decision. The company has not paid any remuneration to him for want of said approval and if the approval is granted from the date of re appointment, then the company will have to pay remuneration of Rs 24.00 Lakhs and and provident fund contribution amounting to 2.88 Lakhs. The whole amount has been shown as contingent liabilities of the company in note no. 26. Key Managerial Personnel - During the year Shri Jai singh has been appointed as Chief Financial officer. APPOINTMENT OF AUDITORS AND AUDITOR REPORT: M/s Kamal Kishore & Co., Chartered Accountants, the Auditors of the Company, who are the statutory auditors of the Company, hold office till the conclusion of the forthcoming AGM and are eligible for re-appointment. Pursuant to the provisions of section 139 of the Companies Act, 2013 and the Rules framed there under, it is proposed to appoint M/s Kamal Kishore & Co., Chartered Accountants, as statutory auditors of the Company from the conclusion of the forthcoming AGM till the conclusion of the thirty seventh AGM to be held in the year 2017, subject to ratification of their appointment at every AGM. They have confirmed their eligible to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re-appointment. The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any disqualification, reservation or adverse remark. SECRETARIAL AUDITOR: The Board has appointed Mr. P. N. Gupta, Practicing Company Secretary, to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March31, 2015 is annexed herewith marked as Annexure -I to this report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. EXTRACT OF ANNUAL RETURN The extract of Annual Returns [Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014] as on the financial year ended on 31.03.2015 is attached as Annexure- II with this Report. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO: Information as per Section 134 (3) (m) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are furnished as under: a) Conservation of Energy : The operations of the Company involve low energy consumption. Adequate measures have been taken to conserve the energy. b) Technological Absorption: The Company has imported machines from China and Check Republic to upgrades its technological inputs for its products. However presently company has no collaboration arrangement with any foreign organization. c) Foreign Exchange Earning and Outgo: The actual foreign exchange earnings (inflow) of the Company during the financial year has been Rs 1651.87 lakhs from Exports of Glass Beads, Hand knotted Carpets, Handicrafts and other items. The actual foreign Exchange Outflow during the year has been Rs. 223.08 lakhs for the import of materials, foreign traveling expenses and other sales promotional activities. CORPORATE GOVERNANCE: Corporate Governance Report, Management Discussion and Analysis statement and Business Responsibility Report and a certificate from the Auditors confirming compliance are annexed herewith to this report. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate on the date of this report. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES The Company does not have any Subsidiary, Joint venture or Associate Company. Number of meeting of board Four Board Meetings were held during the F.Y. on 29th May' 2014, 31st July, 2014, 30th October , 2014 & 22nd January, 2015. Statement of declaration given by independent directors U/s 149 (6). All the Independent Directors have given their declaration as per Section 149(7) that they meet the criteria of independence as provided in section 149(6) of the Companies Act 2013. Policy on directors' appointment and remuneration- The current policy is to have an appropriate mix of executive and independent directors to maintain the independence of the Board, and separate its functions of governance and management. As on 31.03.2015, the board consists of 6 members, three of whom are executive or whole-time directors including one woman and three are independent directors. The policy of the company on directors appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Sub-section (3) of section 178 of the Companies Act, 2013. We affirm that the remuneration paid to the directors is as per the terms laid out in the nomination and remuneration policy of the Company. FIXED DEPOSITS: We have not accepted any fixed deposits and as such, no amount of principal interest was outstanding as of the balance sheet date. Particulars of employees as per Rule 5(2) of Chapter XIII, the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 - The company did not have any employee covered by the provisions of Rule 5(2) of Chapter XIII, the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. FINANCE The Company has repaid loan taken from Bank of Baroda and Yes Bank has sanctioned fresh limits of Rs. 1500.00 lakhs during the year and the amount of loan outstanding as on 31.3.2015 was Rs.1494.43 lakhs. DETAILS OF LOANS GIVEN, INVESTMENTS MADE AND GUARANTEE GIVEN COVERED U/S 186 (4) OF THE COMPANIES ACT, 2013. Loans given and Investments made are given under the respective heads. No Corporate Guarantees given by the Company in respect of loans as at 31st March, 2015. Particulars of contract U/s 188 Transactions, i.e. the Company's transactions that are of material nature, with its Promoters, Directors and the management, their relatives or subsidiaries, among others that may have potential conflict with the Company's interests at large. During the period under review, the Company had not entered into any material transaction with any of its related parties. None of the transactions with any of related parties were in conflict with the Company's interest. Attention of members is drawn to the disclosure of transactions with related parties set out in Note No. 27 of Financial Statements, forming part of the Annual Report. The related party transactions are entered into based on considerations of various business exigencies, such as synergy in operations, sectoral specialization and the Company's long-term strategy for sectoral investments, optimization of market share, profitability, legal requirements, liquidity and capital resources of subsidiaries and associates. All related party transactions are negotiated on an arm's length basis, and are intended to further the Company's interests. Corporate social responsibility The Provision of Social Responsibility is not applicable to the Company. Evaluation report on capital The Provision of Evaluation on Capital is not applicable to the Company. Besides that the Board met time to time and appraised performance of the Company. The ways and means were made to increase the business and growth of the Company. MATERIAL CHANGES : No material changes were made during the year which affects the financial and commitments of the Company. INTERNAL FINANCIAL CONTROLS: The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation were observed. CREDIT RATING : The company had been recognized/rated as " ICRA SME 2" by ICRA Ltd. Expired on 26.3.2015 and the same is under renewal process. TRADING OF SHARES UNDER "B" GROUP: The shares of your Company are presently being traded with BSE and NSE Stock Exchanges under "B" Group. ACKNOWLEDGMENT: The Directors wish to place on record their sincere appreciation of the devoted and efficient services rendered by all officers, employees and others associated with the Company. By order of the Board of Directors For BANARAS BEADS LTD. Sd/- (Ashok Kumar Gupta) Chairman & Director Place : VARANASI Date : 25 05. 2015 |