The Directors have pleasure in presenting the 42ndAnnual Report
together with Audited Financial Statements of SHRI BHOLANATH CARPETS
LIMITED for the Financial Year ended March 31,2015.
1. FINANCIAL RESULT
The summarized financial performance of your Company for the financial
year 2014-15 as compared to previous year 2013-14 has been as under:
(Rs. In Lakhs)
PARTICULARS CURRENT YEAR PREVIOUS YEAR
NET SALES 3182.34 3003.13
OTHER INCOME 84.57 217.69
DECREASE AND (INCREASE) IN 40.19 -155.61
INVENTORIES OF FINISHED GOODS AND
TOTAL EXPENDITURE 3132.20 3004.72
FINANCE COST 62.68 328.62
DEPRECIATION 27.62 39.58
profit Before exceptional and 4.22 3.51
EXTRAORDINARY ITEMS AND TAX
EXTRAORDINARY ITEMS (CERS 0.00 0.00
RECEIVABLE WRITTEN OFF)
PROFIT / (LOSS) BEFORE TAX 4.22 3.51
PROVISION FOR TAXATION
- CURRENT TAX 6.64 -0.73
- DEFERRED TAX -5.35 0.00
TAX ADJUSTMENTS RELATING TO 0.06 0.00
NET PROFIT (NET LOSS) 2.87 4.24
2. FINANCIAL HIGHLIGHTS
The Company has continued its growth story during the year 2014-15, the
income from sales grew from Rs. 3003.13 Lakhs to Rs. 3182.34 Lakhs, the
highest ever sales for the first time.There was an increase of 5.97%.
The Company has recorded profit before exceptional and extraordinary
items in during the year 3.49 Lakhs as compared to Rs. 3.51 Lakhs in
the previous year 2013-14.
The Net Profit of the company for the year ended as on 31.03.2015 is
Rs. 2.86 Lakhs as compared to Rs. 4.24 Lakhs last year.
The reserves of the Company stand at 795.55 Lakhs during the year as
compared to Rs. 791.06 Lakhs in the previous year ended on 2013-14. Rs.
Lakhs (net of taxes) was adjusted from General reserve during the year
2014-15 in accordance with Schedule II to the Companies Act, 2013.
During the year the turnover of the Company has increased by approx
During the year The Company was exporting carpets outside India.
6. SHARE CAPITAL
The paid up Equity Share Capital of the Company as on March 31, 2015
was 480.00Lakhs. During the year under review, the Company has not
issued any types of share capital.
The Company has not proposed any dividend for the year 2014-15.
Your Company''s assets continue to be fully insured against the risk of
fire, riot, earthquake, terrorism etc.
The organization has increased focus on cost reduction measures as well
as production of value added products. It is expected that in the
current year 2015- 16, the Company shall 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 decades lies at the very foundation of the Company''s major
achievements and shall well continue for the years to come. The
Management has always carried out systematic appraisal of performance
and imparted training at periodic intervals. The company has always
recognized talent and has judiciously followed the principle of
11. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL
POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE
FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE
AND THE DATE OF THE REPORT
There are no material changes and commitments affecting the financial
position of the Company which has occurred between the end of the
financial year of the Company to which the financial statements relate
i.e. March 31, 2015 and the date of the report i.e. August31,2015.
12. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY''S
OPERATIONS IN FUTURE
There are no significant material orders passed by the Regulators /
Courts which would impact 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 controlto safeguard and
protect from loss, unauthorized use ordisposition of its assets. All
the transactions are properlyauthorized, recorded and reported to the
Management.The Company is following all the applicable
AccountingStandards for properly maintaining the books ofaccounts and
reporting financial statements. TheInternal Auditor of the Company
checks and verifiesthe internal control and monitors them in
accordancewith policy adopted by the company. The Companycontinues to
ensure proper and adequate systems andprocedures commensurate with its
size and nature of its business.
14. CORPORATE GOVERNANCE
As per Clause 49 of the Listing Agreement with the Stock Exchanges, the
Company follows good Corporate Governance practices and complies with
mandatory provisions as applicable. As stipulated in Clause 49 of the
Listing agreement, Corporate Governance Certificate obtained from M/s
O.P. Tulsyan& Co., Chartered Accountantsis annexed with the report.
15. VIGIL MECHANISM / WHISTLE BLOWERPOLICY
In order to ensure that the activities of the Companyand its employees
are conducted in a fair andtransparent manner by adoption of highest
standardsof professionalism, honesty, integrity and ethical behavior
the Company has adopted a vigil mechanismpolicy. This policy is
explained in Corporate GovernanceReport and also posted on the website
16. BUSINESS RISK MANAGEMENT
Although the company has long been following theprinciple of risk
minimization as is the norm in everyindustry, it has now become a
compulsion. Therefore, inaccordance with clause 49 of the Listing
Agreement theBoard members were informed about risk assessmentand
minimization procedures after which the Boardformally adopted steps for
framing, implementing and monitoring the risk management plan for
thecompany.The main objective of this policy is to ensure
sustainablebusiness growth with stability and to promote a
proactiveapproach in reporting, evaluating and resolvingrisks
associated with the business. In order to achievethe key objective, the
policy establishes a structuredand disciplined approach to Risk
Management, in orderto guide decisions on risk related issues.In
today''s challenging and competitive environment,strategies for
mitigating inherent risks in accomplishingthe growth plans of the
Company are imperative. Thecommon risks inter alia are: Regulations,
competition, Business risk, Technology obsolescence,
Investments,retention of talent and expansion of facilities.
Businessrisk, inter-alia, further includes financial risk,
politicalrisk, fidelity risk, legal risk. As a matter of policy,
theserisks are assessed and steps as appropriate are taken tomitigate
17. CORPORATE SOCIAL RESPONSIBILITY (CSR)
Even though the provisions of Companies Act, 2013regarding Corporate
Social Responsibility are notattracted to the company yet the Company
hasbeen, over the years, pursuing as part of its corporatephilosophy, a
CSR policy voluntarily which goes muchbeyond mere philanthropic
gestures and integratesinterest, welfare and aspirations of the
communitywith those of the Company itself in an environment
ofpartnership for inclusive development.
The Company has not accepted any deposit underSection 73 or Section 76
of the Companies Act, 2013 readwith the Companies (Acceptance of
Deposit) Rules, 2014during the year 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 under review.
19.2 SECRETARIAL AUDITOR
The replies of qualifications of Secretarial Auditor by the Board of
Directors are given below:-
1. The cost auditor has been appointed and the audit is under process
and on completion stage.
2. The Board has appointed women director on 28.03.2015 but she has
not provided the Director Identification Number (DIN) till the date of
20.1 CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL
20.2 INDEPENDENT DIRECTOR(S) DECALARATION
In pursuance of sub-section (7) of Section 149 of the Companies Act,
2013 all the Independent Directors have furnished the declaration that
they meet the criteria of Independence 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 clause 49 of the
Listing Agreement, the Board has carried out annual performance
evaluation of its own performance, the directors individually as well
the evaluation of the working of its Audit, Nomination & Remuneration
and Stakeholder committee. The manner in which the evaluation 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
committee framed a policy for selection and appointment of Directors,
Senior Management and their remuneration. The Remuneration Policy is
stated in the Corporate Governance Report.
21. BOARD AND COMMITTEE MEETINGS
21.1 BOARD MEETING
During the year 2014-15, 08 meeting of the Board of Directors were held
on May 30, 2014, July 21. 2014, August 14, 2014, September 1, 2014,
November 15, 2014, January 8, 2015, 14th February, 2015 and 28th March,
2015. The maximum time gap between any two consecutive meetings was not
exceeding four months.
21.2 AUDIT COMMITTEE MEETING
The Chairman of the Audit Committee is Mr. AmarnathPandey. During the
year, 4 Audit Committee meetings were held on May 30, 2014, August 14,
2014, November 15, 2014 and February 14, 2015. The composition of the
Audit Committee and number ofmeetings attended by the Members are given
Name of directors Category Number of Meeting
Mr. AmarnathPandey Independent 4 4
Mr. AmbarishChatterjee Independent 4 2
Mr. R. K. Dubey Independent 4 2
The other details of Board and Committee Meetings aregiven in Corporate
Governance Report forming part ofthe Annual Report.
22.1 STATUTORY AUDITORS
M/s O. P. Tulsyan& Co. (Firm Registration No. 500028N),Chartered
Accountants have been appointed asStatutory Auditors of the Company at
the last i.e. 34thAnnual General Meeting held on August 9, 2014 for
aperiod of three years subject to ratification by membersat every
consequent Annual General Meeting. Therefore,ratification of
appointment of Statutory Auditors isbeing sought from the Members of
the Company atthe ensuing 35th Annual General Meeting to be heldon July
25, 2015. They have confirmed their eligibilityunder Section 141 of the
Companies Act, 2013 for theirre-appointment as Statutory Auditors of
22.2 SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of theCompanies Act, 2013 and
the Companies (Appointmentand Remuneration of Managerial Personnel)
Rules,2014, the Company has appointed M/s Ajay Jaiswal& Co. (CP
No.:3684, FCS: 5112), CompanySecretaries to undertake the Secretarial
Audit of thecompany. The Secretarial Audit Report is annexedherewith as
22.3 INTERNAL AUDITORS
M/s A. C. Dutta& Co., Cost Accountant performs the duties of Internal
Auditors ofthe Company and their report is reviewed by the
AuditCommittee from time to time.
23. ENERGY CONSERVATION, TECHNOLOGYABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and
foreign exchange earnings and outgo stipulated under Section 134(3)(m)
of the Companies Act, 2013 read with Rule, 8 of The Companies
(Accounts)Rules, 2014, is annexed herewith as Annexure B.
24. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The particulars of every contract or arrangement sentered into by the
Company with related parties referred to in sub-section (1) of section
188 of the Companies Act, 2013 are disclosed in Form No. AOC -2.is
annexed herewith as Annexure C.
25. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form
MGT 9 is annexed herewith as AnnexureD.
26. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Management Discussion and Analysis Report on financial condition and
results of operations of the Company for the year under reviews
required underClause 49 of the Listing Agreement entered with the Stock
Exchanges is given as separate statement forming part of the Annual
27. PARTICULARS OF EMPLOYEES
DETAILS PERTAINING TO REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF
THECOMPANIES ACT, 2013 READ WITH RULE 5(1) OF THE COMPANIES
(APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014
The information required pursuant to Section 197read with Rule, 5 of
the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 inrespect of employees of the Company is as follows:
i. The percentage increase in remuneration of each Director, Chief
Executive Officer and Chief Financial Officer during the financial year
2014-15, ratio of the remuneration of each Director to the median
remuneration of the employeesof the Company for the financial year
2014-15and the comparison of remuneration of eachKey Managerial
Personnel (KMP) against theperformance of the Company are as follows:
Name of Remuneration Remuneration %
Director / of the Director of the Director Increas
KMP / KMP in F.Y. / KMP in F.Y. e in F.Y.
2014-15 2014-15 2014-15
Bholanath 6,96,000.00 6,96,000.00 0.00
Name of Ratio(times) of the Comparison of the
Director / remuneration remuneration of the
KMP of each KMP
director to the against the
median performance of
remuneration the company
Bholanath 2.10 The turnover of the
Baranwal, Company increase
Managing 5.97 %. There is a
Director marginal increase
(KMP) in profit before tax
and but the profit
after tax has
ii. The median remuneration of employees of the Company during the
financial year was 3.32Lakhs.
iii. There were 2 permanent employees on the rolls of the Company
during the financial year 2014-15.
v. Relationship between average increase in remuneration and company
The turnover of the Company increase 5.97 %. There is a marginal
increase in profit before tax and but the profit after tax has
vi. Comparison of Remuneration of the Key Managerial Personnel(s)
against the performance of the Company:
There is no change in total remuneration of Key Managerial Personnel
during the year in comparison to last year whereasThe turnover of the
Company increase 5.97 %. There is a marginal increase in profit before
tax and but the profit after tax has decreased.
vii. a) Variations in the market capitalisation of the Company:
There was no trading on the stock exchange.
b) Price Earnings ratio of the Company:
There was no trading on the stock exchange.
c) Percent increase over/ decrease in the market quotations of the
shares of the company as compared to the rate at which the Company came
out with the last public offer in theyear:
There was no further offering of the shares (FPO).
viii. Average percentage increase made in the salaries of employees
other than the managerial personnel in the last financial year i.e.
2014-15 was 34.51 % whereas the increase in the managerial remuneration
for the same financial year was 0%.The CEO and CFO were appointed on
28.03.2015 as per requirement of Companies Act, 2013.
ix. The key parameters for the variable component of remuneration
availed by the directors are considered by the Board of Directors based
on the recommendations of the Human Resources, Nomination and
Remuneration Committee as per the Remuneration Policy for Directors,
Key Managerial Personnel and other Employees.
x. The ratio of the remuneration of the highest paid director to that
of the employees who are not directors but receive remuneration in
excess of the highest paid director during the year - NotApplicable;
xi. It is hereby affirmed that the remuneration paid isas per the
Remuneration Policy for Directors, KeyManagerial Personnel and other
xii. THE PARTICULARS OF THE EMPLOYEES WHOARE COVERED BY THE PROVISIONS
CONTAINEDIN RULE 5(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 year Nil
28. DIRECTORS'' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and accordingto the
information and explanations obtained by them,your Directors make the
following statements in termsof Section 134(3)(c) of the Companies Act,
a) that in the preparation of the annual financialstatements for the
year ended March 31,2015, the applicable accounting standards have
beenfollowed along with proper explanation relating tomaterial
departures, if any;
b) that such accounting policies as mentioned in Notesto the Financial
Statements have been selected andapplied consistently and judgment and
estimateshave been made that are reasonable and prudent soas to give a
true and fair view of the state of affairs ofthe Company as at March
31,2015 and of the profitof the Company for the year ended on that
c) that proper and sufficient care has been taken forthe maintenance of
adequate accounting recordsin accordance with the provisions of the
CompaniesAct, 2013 for safeguarding the assets of the Companyand for
preventing and detecting fraud and otherirregularities;
d) that the annual financial statements have beenprepared on a going
e) that proper internal financial controls were in placeand that the
financial controls were adequate andwere operating effectively.
f) that systems to ensure compliance with theprovisions of all
applicable laws were in place andwere adequate and operating
29. COMPANIES WHICH CEASED TO BEHOLDING, SUBSIDIARY OR ASSOCIATECOMPANY
There is no holding, subsidiary or associate Company ofthe Company.
30. PARTICULARS OF LOANS, INVESTMENTS ORGUARANTEE
There is no loan, or guarantee but investment made pursuant
toprovisions of Section 186 of the Companies Act, 2013.
The Company has been very well supported from allquarters and therefore
your Directors would like to placeon record their sincere appreciation
for the supportand co-operation received from Employees,
Dealers,Suppliers, Central and State Governments, Bankers,Credit Rating
Agencies, Depositories, Stock Exchange, Registrar and Share Transfer
Agents, Associates as wellas our Shareholders at large during the year
Your Directors also wish to place on record their deepsense of
appreciation for the commitment, abilitiesand hard work of all
executives, officers and staff whoenabled Company to consistently
deliver satisfactoryand rewarding performance even in the
We look forward to receiving the continued patronagefrom all quarters
to become a better and strongercompany.
32. CAUTIONARY STATEMENT
The statements contained in the Board''s Report and Management
Discussion and Analysis contain certainstatements relating to the
future and therefore areforward looking within the meaning of
applicablesecurities, laws and regulations. Various factors suchas
economic conditions, changes in governmentregulations, tax regime,
other statues, market forces andother associated and incidental factors
may howeverlead to variation in actual results.
On Behalf of the Board
Date: 31.08.2015 (Chairman & Managing Director)
Place: Varanasi DIN: 00306086