Banaras Beads Ltd

Dear Shareholders,

Your directors are pleased to present the 44^th Annual Reports together with the Audited Financial Statements of the Company for the year ended on 31^st March' 2024.

FINANCIAL RESULTS:

OPERATION / PERFORMANCE:

During the year revenue from operations of your Company increased by 4.64% at Rs. 2821.99 lacs as compared to Rs. 2696.94 lacs in the corresponding period of the previous year and Profit after Tax increased by 8.15% at Rs. 275.08 lacs as compared to Rs. 254.34 lacs in the corresponding period of the previous year.

AWARD /GOLD TROPHY

During the year company has been awarded as under-

- “Leading 75^th MSMEs from Uttar Pradesh Certificate of Felicitation” given by ASSOCHAM. The said award was given by the Hon'ble Minister of MSME of UP Government in June, 2023.

- “Northern Region Export Excellence Award - Gold Trophy for outstanding export performance in the category of multi product-MSME by Federation of Indian Export Organisations in August, 2023. The said award was given by Mr. Piyush Goyel, Hon'ble Commerce and Industry Minister of Government of India.

DIVIDENDS:

Based on the Company's performance during the year 2023-24, the Board of Directors decided to make payment an Interim dividend of Rs. 2/- per share and not recommended for final dividend.

TRANSFER TO RESERVES

No amount has been transferred to reserve. The closing balance of the retained earnings of the Company for F.Y. 2023-2024, after all appropriation and adjustments was 2354.18 lacs.

CHANGE IN THE NATURE OF BUSINESS:

The Company's main business is Manufacturing and export of Handicraft items like Glass Beads; Neckleces, Imitation Jewellary etc. There was no change in the nature of the business of the Company during the year under review..

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 except as required by accounting standards and other applicable law(s) 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. Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants, including audit of internal financial controls over financial reporting by the statutory auditors, and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Company's internal financial controls were adequate and effective during FY 2023-24.

ADOPTION OF IND AS:

The company had already adopted Ind AS since financial year 2017-18.

PENDING PETITION WITH NCLT:

The Special Leave Petition vide no. 25165-25166/2007 had been disposed of by Hon'ble Supreme Court on 11.04.2018. The company had already complied and executed all the direction given by Hon'ble Company law Board in its order dated 05.09.2007 and nothing is pending to be complied by the company and accordingly disclosed in Annual Report made thereafter. However, Mr. Raj Kumar Gupta, ex-director of the company, who had not challenged CLB orders has filed an Execution Petition No. 424/2018 before Hon'ble NCLT to get property of the company situated at Expo Mart, Greater NOIDA, which was neither part of CLB Petition No. 14/1999 nor mentioned in the list of properties to be transferred to 1^st Petitioner (Mr. Raj Kumar Gupta group) in CLB final order dt. 04.07.2007 and modified order dt. 03.08.2007. Mr. Raj Kumar Gupta Ex-director of the company had already made an application to get this property before Hon'ble Supreme Court in SLP No. 935-936/2010 and Hon'ble Supreme Court finally dismissed the SLP with all pending applications. Thus, after final order of Hon'ble Supreme Court, the Management does not reasonable expect that the Execution Petition, when ultimately concluded and determined, will have any material and adverse effect on the Company's results of operations or financial condition. The Execution Petition 424/2018 was listed on 22.5.2024 for final hearing but matter was not taken up and adjourned to 18.07.2024 before the Regular Bench.

MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT:

Management's Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR) is presented in a separate section forming part of the Annual Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

INDUCTIONS AND RETIREMENTS / CESSATION OF DIRECTORS:

During the financial year no director ceased / completed his tenure as director or appointed as an additional director.

Shri Ashok Kumar Gupta (DIN No. 00016661), retires by rotation and being eligible, offers himself for re-appointment. A resolution seeking shareholders' approval for his re-appointment along with other required details forms part of the Notice.

The Company is having proper composition of whole time and independent director(s) alongwith key managerial personnel in compliance of provisions of Section 203 of the Act, as under:

Further the tenure of Mr. Ashok Kumar Gupta as Managing Director expired on 31^st March, 2024. Keeping his association and benefit to the company the Nomination and Remuneration Committee and the Board of Directors have recommended to re-appoint Mr. Ashok Kumar Gupta (DIN 00016661) as Managing Director for further five years with effect from 1^st April 2024, subject to approval of members in the AGM to be held on 1^st August, 2024.

And

the tenure of Mr. Siddharth Gupta as CEO & Managing Director expired on 31^st January, 2024. Keeping his association and benefit to the company the Nomination and Remuneration Committee and the Board of Directors have recommended to re-appoint Mr. Siddharth Gupta (DIN 00 00342369) as CEO & Managing Director for further five years with effect from 1^st February 2024, subject to approval of members in the AGM to be held on 1^st August, 2024.

the tenure of Mrs. Shalini Chandra as Executive Director will be expired on 28^th February, 2025. Keeping his association and benefit to the company the Nomination and Remuneration Committee and the Board of Directors have recommended to re-appoint Mrs. Shalini Chandra (DIN 01036394) as Executive Director for further one year with effect from 28^th February 2025, subject to approval of members in the AGM to be held on 1^st August, 2024.

The tenue of Independent Directors namely Mr. Sushil Kumar Kandoi, Mr. Anil Kumar Gupta, and Mr. Manan Kumar Sah will be expired on January, 16, 2025 Keeping their association and benefit to the company the Nomination and Remuneration Committee and the Board of Directors of the company have recommended their re-appointment as an independent director for further five years from January 17, 2025, subject to the approval of the members in the AGM to be held on 1^st August, 2024.

BOARD EVALUATION:

The Independent Directors of the company has carried out on 11.05.2023 and on 29.01.2024 during the year evaluation of its own performance, board committees, and board of directors pursuant to the provisions of the Companies Act, SEBI Listing Regulations. and the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India.

The performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The board and the nomination and remuneration committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the chairman was also evaluated on the key aspects of his role.

In separate meetings of independent directors, performance of non-independent directors, performance of the board as a whole and performance of the chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent directors, at which the performance of the board, its committees and individual directors was also discussed. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS.

The Company's policy on directors' appointment and remuneration and other matters provided in section 178(3) of the Act has been disclosed in the corporate governance report, which forms part of this report and same is available on www.bblinvestor.com.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The details in respect of internal financial control and their adequacy are included in the management discussion & analysis, which forms part of this report.

AUDIT COMMITTEE

The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report.

AUDITORS:

In accordance with the provisions of Section 139(1) of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 (‘the Act'), M/s G D Dubey & Associates, Chartered Accountants (Firm Registration number 009836C) were appointed as the Statutory Auditors of the Company at the Annual General Meeting held on 18th August, 2022 for a term of 5 years i.e. to hold office till the conclusion of the 47^th AGM.

AUDITOR'S REPORT

There were no qualifications, reservations or adverse remarks made by Auditors in their respective reports. Observation made by the Statutory Auditors in their Report are self-explanatory and therefore, do not call for any further comments under section 134(3) (f) of the Companies Act, 2013.

SECRETARIAL AUDITOR:

The Board has appointed M/s Ajay Jaiswal & Co., Company Secretaries to conduct Secretarial Audit for the financial year 2023-24. The Secretarial Audit Report for the financial year ended 31^st March 2024 is annexed herewith marked as Annexure I to this report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

RISK MANAGEMENT

The board of directors of the Company has formed a risk management committee to frame, implement and monitor the risk management plan for the Company. The committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The audit committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

The development and implementation of risk management policy has been covered in the management discussion and analysis, which forms part of this report.

VIGIL MECHANISM

The Company has a Whistle Blower Policy and has established the necessary vigil mechanism for directors and employees in confirmation with Section 177(9) of the Act and Regulation 22 of Listing Regulations, to report concerns about unethical behavior. The details of the policy is also available on www.bblinvestor.com.

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 31.03.2024 is attached as Annexure- II with this Report. The complete Annual Return as on 31.03.2024 is available on the Company's website at www.bblinvestor.com.

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. The solar power plant of 150 KVA is properly working and saving grid electricity. During the year 169000 KWH power generated and out of which approximately 22000 KWH transferred to UP electricity board by this way approximately saving of around Rs.12.00 lacs made to the company against electric charges.

The other adequate measures are being taken to conserve the energy.

b) Technological Absorption:

The Company upgrades its technological inputs time to time 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 2690.09 lakhs from Exports of Glass Beads, Handicrafts and other items. The actual foreign Exchange Outflow during the year has been Rs.283.72 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 ends of the financial year to which these 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 12^th May 2023, 26^th July 2023, 31^th October, 2023, and 31^st January 2024.

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. There has been no change in the circumstances affecting their status as independent directors of the Company. During the year under review, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees.

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 31.03.2024, 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 is as 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 FROM PUBLIC:

The Company have not accepted any fixed deposits and as such, no amount of principal or interest was outstanding as of the balance sheet date.

FINANCE

The Company has taken credit facility by way of working capital limit from Kotak Mahindra Bank Ltd. of Rs. 1400.00 Lacs and the amount of loan outstanding as on 31.03.2024 was Rs. 329.03 Lacs.

DETAILS PERTAINING TO SHARES IN SUSPENSE ACCOUNT:

In accordance with the requirement of Regulation 34(3) and Part F of Schedule V to the SEBI Listing Regulations, details of equity shares in the suspense account are as follows:

The voting rights on the shares outstanding in the suspense account as on March 31, 2024, shall remain frozen till the rightful owner of such shares claims the shares.

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 of the Balance Sheet.

No Corporate Guarantees given by the Company in respect of loans as at 31st March, 2024.

DISCLOSURE REQUIREMENTS

As per SEBI Listing Regulations, the Corporate Governance Report with the Auditors' Certificate thereon, and the Management Discussion and Analysis are attached, which form part of this report.

As per Regulation 34 of the SEBI Listing Regulations, a Business Responsibility Report is attached and is a part of this annual report.

As per Regulation 43A of the SEBI Listing Regulations, the Dividend Distribution Policy is disclosed in the Corporate Governance Report and on the website of the Company.

TRANSACTIONS WITH RELATED PARTIES.

All the transactions are done at arm length price during ordinary course of business. Information on transactions with related parties pursuant to section 134(3) (h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure III in Form AOC-2 and the same forms part of this report.

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 that may have potential conflict with the Company's interests at large. All the transactions with related parties are done at arm length price and in compliance of Ind AS 24, the disclosure of which is made in Note No. 34 of Financial Statements which is forming part of the Annual Report.

CORPORATE SOCIAL RESPONSIBILITY.

The Provision of Section 135 of Companies Act 2013 concerning with Corporate Social Responsibility is not applicable during the F.Y. 2023-2024.

TRANSFER TO IEPF ACCOUNT

During the year the company has transferred unclaimed dividends and related shares in to IEPF account i.e. Interim unclaimed dividend for F.Y. 2015-16 amounting Rs. 888718/- and corresponding 18506 shares of 121 shareholders on 28.06.2023.

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.

INCREASE IN PAID-UP CAPITAL-

During the year no calls in arrear amount realised from three shareholders. The paid-up capital Rs. 66142200 and balance calls in arrears are @ Rs. 5 per share on 44000 shares amounting to Rs. 220000/- (Including 200 shares of two shareholders had been transferred into IEPF)

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.

The Company has used Tally Prime accounting software for maintaining books of accounts having audit trail (edit log) facility. The features of recording the audit trail (edit log) facility was enabled in the Tally software for the year except in the beginning of the F.Y. for the period 1^st April'2023 to 5^th June'2023 due to technical reason. The features of recording audit trail is continuing since implementation without any tampering.

QUALITY INITIATIVES AND SOCIAL AUDIT

The Company continues to sustain its commitment on quality control with new technology and reduction of cost. The Company successfully completed the Audits done by BQC certificates for its product specifically quality certifications viz., ISO 9001-2015.

The Company has also successfully completed Factory/Social Audit SA8000 done by British Standards Institution (BSI) and they have valid till December, 2025. The another social /ethical and C-PAT audit done by Qima and valid till October, 2024.

COMPLAINTS PERTAINING TO SEXUAL HARASSMENT:

The details of complaints filed, disposed of and pending during the financial year pertaining to sexual harassment is provided in the Business responsibility report of this Annual Report.

SHOW CAUSE, DEMAND, PROSECUTION NOTICES AND PENALTY NOTICES, WHICH ARE MATERIALLY IMPORTANT.

The NSE has made a penalty of Rs. 65000 about noncompliance of regulation 33(3) of SEBI LODR, subsequently on the clarification and request of the company NSE authorities waive the same, except that no other penalty imposed by any other department.

PARTICULARS OF EMPLOYEES:

The details pertaining to remuneration as required under section 197(12) of the companies act, 2013 read with rule 5(1) of the companies (appointment and remuneration of managerial personnel) rules, 2014.

(i) The percentage increase in remuneration of each Director, Chief Financial Officer and Company Secretary during the financial year 2023-24, ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2023-24 and the comparison of remuneration of each Key Managerial Personnel (KMP) against the performance of the Company are as under:

ii) The median remuneration of employees of the Company during the financial year 2023-24 is Rs.136783 and in Financial Year 2022-23 was Rs. 115898. iii) In the financial year, there was increase of 18.02 % (previous year increase of 19.66%) in the median remuneration of employees;

iv) There were 242 permanent employees on the rolls of Company as on March 31, 2024;

v) Relationship between average increase in remuneration and company performance: -

The Profit before Tax for the financial year ended March 31, 2024 increased by 7.93 % and increased in median remuneration was 19.66%

vi) Comparison of Remuneration of the Key Managerial Personnel(s) against the performance of the Company:

The total remuneration of Key Managerial Personnel increased by 0.70 lacs from 75.27 lacs (annualised) in 2023-24 to 75.97 lacs in 2023-24 whereas the Profit before Tax increased by 7.93 % to 368.62 lacs in 2023-24 (341.55 lacs in 2022-23).

vii) a) Variations in the market capitalisation of the Company:

The market capitalisation as on March 31, 2024 was Rs.5876.37 lacs (Rs.5237.31 lacs as on March 31, 2023).

b) Price Earnings ratio of the Company was 20.89 as at March 31, 2024 and was 20.60 as at March 31, 2023.

viii) Average percentage increase was made in the salaries of employees other than the managerial personnel in comparison to previous financial year is 18.97 % and in the managerial remuneration has increased by 0.93% over previous financial year.

ix) 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 Not Applicable; and

x) It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.

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.