To,
The Members,
Baba Arts Limited
Your Company9s Board of Directors (<Board=) is pleased to present the Twenty Fourth
Annual Report of Baba Arts Limited (<Company=) for the financial year ended 31st March,
2023.
In Compliance with the applicable provisions of the Companies Act, 2013, (including any
statutory modification(s) or re-enactment(s) thereof, for time being in force) (<the
Act=) and the Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (<Listing Regulations=), this report covers the
financial results and other developments during the financial year ended 31st March, 2023
and up to the date of Board Meeting held on 25th May, 2023 to approve this report, in
respect of Baba Arts Limited.
FINANCIAL RESULTS
(Rs. in Lakhs)
Particulars |
March 31, 2023 |
March 31, 2022 |
|
As per IND AS |
Revenue from Operations |
278.75 |
1801.80 |
Other Income |
103.78 |
90.38 |
Total Income |
382.53 |
1892.18 |
Total Expenditure |
249.29 |
1481.12 |
Profit Before Tax |
133.24 |
411.06 |
Less: Tax Expenses |
|
|
Current Tax |
36.03 |
113.06 |
Prior Year Short Provision of Tax |
(5.44) |
- |
Deferred Tax |
0.44 |
0.46 |
Net Profit /(Loss) for the Year |
102.21 |
297.54 |
l DIVIDEND
In order to strengthen the reserves of the Company, your directors consider it prudent
to plough back the profits and not to recommend any dividend for the financial year
2022-23.
REVIEW OF OPERATIONS
During the year under review, income from Post Production activity increased to Rs.7.84
Lakhs from Rs. 6.46 Lakhs in the previous year. Your Company earned income from trading in
IPR of Rs.251.85 Lakhs in the current year as against Rs. 1795.33 Lakhs in the previous
year. After providing for depreciation of Rs. 5.89 Lakhs (Previous Year Rs. 5.88 Lakhs),
Current Tax (Net of MAT Credit entitlement) of Rs. 36.03 Lakhs (Previous Year Rs. 113.06
Lakhs), your Company earned net profit after tax of Rs.102.21 Lakhs vis-?-vis net profit
after tax of Rs. 297.54 Lakhs in the previous year. Other Comprehensive Expense for the
year was Rs. 0.70 Lakhs (Previous Year Other Comprehensive Income Rs.0.72 Lakhs).
TRANSFER TO RESERVES
Your directors have proposed not to transfer any amount to reserves.
CHANGES IN NATURE OF BUSINESS, IF ANY
During the year under review your Company has ventured in to new business activity of
monetizing Digital Media Content on various digital platforms like You Tube, Face Book
etc.
MATERIAL CHANGES BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THIS
REPORT
There have been no material changes and commitments, 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 signing of this report.
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
DIRECTORS
Shri Santosh A. Shah and Shri Sanjiv L. Hinduja hold office as Independent Directors of
the Company up to 31st March, 2024.
During the year, Ms. Juhi V. Pania resigned as Independent Director of the Company with
effect from 23rd August, 2022 as she has shifted abroad for indefinite period of time.
Your board of directors have placed on record its sincere appreciation for the active
participation in meetings of the board by Ms. Juhi V. Pania during her brief association
with the Company as an Independent Director.
Re-appointment of Director retiring by rotation:
In terms of Section 152 of the Companies Act, 2013, Shri Nikhil G. Tanwani (DIN
01995127), Whole Time Director, retires by rotation at the forthcoming Annual General
Meeting and is eligible for re-appointment. Shri Nikhil G. Tanwani has confirmed that he
is not disqualified for appointment as director under Section 164 of the Act and has
offered himself for re-appointment.
The necessary resolution for re-appointment of Shri Nikhil G. Tanwani forms part of the
notice convening the 24th Annual General Meeting ("24th AGM") scheduled to be
held on Tuesday, the 12th September, 2023.
Re-Appointment of Managing Director
Existing tenure of Shri Gordhan P. Tanwani, Managing Director of the Company will be
expiring on 31st October, 2023. Pursuant to the recommendation of Nomination and
Remuneration Committee (8NRC9), your board of directors has proposed to reappoint Shri
Gordhan P. Tanwani as Managing Director in the category of Non-Independent Executive
Director for a further period of 4 years from 1st November, 2023 to 31st October, 2027
subject to approval of the shareholders of the Company by a special resolution.
The board recommends for approval of the members by way of a special resolution, the
re-appointment of Shri Gordhan P. Tanwani as Managing Director for a period of 4 years
from 1st November, 2023 up to 31st October, 2027 as set out under item no. 3 of the
accompanying notice of the 24th AGM of the Company.
A brief resume of directors being appointed / re-appointed along with the nature of
their expertise, their shareholding in your Company and other details as stipulated under
Regulation 36(3) of the Listing Regulations is given in the notice convening the 24th AGM.
KEY MANAGERIAL PERSONNEL
Shri Gordhan P. Tanwani, Chairman & Managing Director, Shri Ajay D. Acharya, Chief
Financial Officer and Shri Naishadh H. Mankad, Company Secretary continue to be Key
Managerial Personnel (KMP) of the Company in compliance with the requirements of Section
203 of the Companies Act, 2013.
INDEPENDENT DIRECTORS
In terms of Section 149 of the Act, Shri Santosh A. Shah, and Shri Sanjiv L. Hinduja
are Independent Directors of the Company. They are not liable to retire by rotation in
terms of Section 149(13) of the Act.
Pursuant to Section 149(7) of the Companies Act, 2013, the Company has received
declarations from all Independent Directors confirming that they meet the criteria of
independence as prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of the
Listing Regulations and are independent of the management.
In terms of Regulation 25(8) of the Listing Regulations, the independent directors have
confirmed that they are not aware of any circumstance or situation, which exist or may be
reasonably anticipated, that could impair or impact their ability to discharge their
duties with an objective independent judgement and without any external influence. The
board of directors of the Company has taken on record the declaration and confirmation
submitted by the Independent Directors after undertaking due assessment of the veracity of
the same.
The board is of the opinion that the Independent Directors of the Company possess
requisite qualifications, experience and expertise in the fields of Legal, Accounts and
Finance, Governance etc. and that they hold highest standards of integrity.
The Independent Directors of the Company have confirmed that they have enrolled
themselves in the Independent Directors9 Databank maintained with the Indian Institute of
Corporate Affairs (8IICA9) in terms of Section 150 of the Act read with Rule 6 of the
Companies (Appointment & Qualification of Directors) Rules, 2014. Further, both the
Independent Directors are exempt from the requirement to undertake the online proficiency
self-assessment test conducted by IICA.
FAMILIARISATION PROGRAMME
The Company has put in place an induction and familiarization programme for all its
directors including independent directors so as to acquaint themselves with the nature of
the industry in which the Company operates. The directors are periodically advised about
the changes effected in the Corporate Laws, Listing Regulations, Taxation Laws and other
statutes applicable to the Company, with regard to their roles, rights and
responsibilities as director of the Company. The familiarization programme for independent
directors in terms of the provisions of Regulation 46(2) (i) of the Listing Regulations is
uploaded on the web site of the Company.
ANNUAL EVALUATION OF BOARD
Pursuant to Regulation 17 of the Listing Regulations read with Section 134 (3)(p) of
the Companies Act, 2013 and The Companies (Accounts) Rules, 2014, annual evaluation of the
performance of the board, its Committees and of individual directors has been made during
the year under review. To facilitate the evaluation process, the Nomination &
Remuneration Committee of the board has laid down the evaluation criteria for the
performance of Executive/Non-Executive / Independent Directors through a board
effectiveness survey. A questionnaire of the survey is designed with the objective of
reviewing the functioning and effectiveness of the board. Each board member (other than
the director being evaluated) is requested to evaluate the effectiveness of the members of
the board on the basis of information flow, decision making of the directors, relationship
to stakeholders, Company performance, Company strategy, and the effectiveness of the whole
board and its various committees on a scale of one to five.
Evaluation of Independent Directors is done on the basis of their role in governance,
control and guidance and more particularly their performance in the following areas:
Their contribution towards monitoring the Company9s corporate governance
practice
Their participation in formulating business strategies and
Their participation in board and committee meetings and generally fulfilling
their obligations and fiduciary responsibilities as directors of the Company.
BOARD AND COMMITTEES
NUMBER OF MEETINGS OF BOARD
The board met four times during the year, details of which are given in the Corporate
Governance Report that forms part of this annual report. The intervening gap between the
meetings was within the limit prescribed under the Act and the Listing Regulations.
COMMITTEES OF BOARD
As on 31st March, 2023 the board had 3 (Three) Committees - the Audit Committee, the
Nomination & Remuneration Committee and the Stakeholders Relationship Committee.
A detailed note on the composition of board and its committees and the number of
meetings held and attendance of directors at such meetings is provided in the Corporate
Governance Report, which forms part of the Annual Report.
POLICY ON DIRECTORS9 APPOINTMENT & REMUNERATION
The Board has in accordance with the provisions of Sub-Section (3) of Section 178 of
the Act, formulated a policy setting out the criteria for determining qualifications,
positive attributes, independence of a director and policy relating to remuneration for
Directors, Key Managerial Personnel and other employees. The text of the policy is
available on the website of the Company www.babaartslimited.com. l RISK MANAGEMENT POLICY
The Board of Directors of your Company periodically assesses the risk in the internal
and external business environment and takes necessary steps to mitigate the said risks.
The Company has an adequate risk management plan in place which is reviewed at regular
intervals by the Board.
VIGIL MECHANISM /WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy, to provide a formal vigil mechanism to
the directors and employees to report their concerns about unethical behavior, actual or
suspected fraud or violation of the Company9s Code of Conduct or Ethics Policy. The policy
provides for adequate safeguards against victimization of employees who avail of the
mechanism and also provides for direct access to the Chairperson of the audit committee.
It is affirmed that no personnel of the Company have been denied access to the audit
committee.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS
AND OUTGO:
The details of conservation of energy, technology absorption, foreign exchange earnings
and outgo are as follows:
(A) Conservation of energy:
Sr. No. |
Particulars |
Details |
I |
the steps taken or impact on conservation of energy |
Your Company9s activities do not require substantial energy
consumption. However, the Company continues to lay emphasis on reducing energy consumption
by constantly monitoring the consumption and taking steps to reduce wasteful use of
energy. Employees are trained to switch off computers, air conditioners and lights when
not required. |
II |
the steps taken by the company for utilizing alternate sources of
energy. |
Not applicable, in view of comments in clause (i) |
III |
the capital investment on energy conservation equipments |
Not applicable, in view of comments in clause (i) |
(B)Technology absorption:
Sr. No. |
Particulars |
Details |
I |
the effort made towards technology absorption |
The Company does not have any imported technology. |
II |
the benefits derived like product improvement, cost reduction,
product development or import substitution |
N.A. |
III |
in case of imported technology (imported during the last three
years reckoned from the beginning of the financial year) |
N.A. |
|
a) the details of technology imported |
|
|
b) the year of import; |
|
|
c) whether the technology has been fully absorbed |
|
|
d) if not fully absorbed, areas where absorption has not taken
place, and the reasons thereof |
|
IV |
the expenditure incurred on Research and Development |
Nil |
(C) Foreign Exchange Earnings and Outgo:
Foreign Exchange Earning during the year was Rs. 49,23,785/- (Previous Year Rs.
87,50,000/-) and Foreign Exchange outgo during the year under review was Rs. 6,02,952/-.
Export Efforts
The Company is engaged in providing post production services to entertainment industry
in its post production studio and creating content for Television and also in film
production and distribution activity where there is not much scope for exports. However,
the Company has earned some export income through exploitation of intellectual property
rights of entertainment content.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR
TRIBUNALS
IMPACTING THE GOING CONCERN STATUS AND COMPANY9S OPERATIONS IN FUTURE
There were no orders passed by regulators or courts or tribunals impacting the going
concern status and Company9s operations in future.
DETAILS IN RESPECT OF ADEQUECY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO
THE FINANCIAL STATEMENTS:
The Company has in place adequate internal financial controls with reference to
financial statements.
The Internal Auditor continuously monitors the efficiency of the internal
controls/compliance with the objective of providing to audit committee and the board of
directors, an independent, objective and reasonable assurance of the adequacy and
effectiveness of the organization9s risk management, control and governance processes.
This system of internal control facilitates effective compliance of Section 138 of the Act
and the Listing Regulations.
During the year, such controls were tested and no reportable material weakness in the
design or operation was observed.
MAINTENANCE OF COST RECORDS
Maintenance of Cost Records as specified by the Central Government under Section 148(1)
of the Act, is not applicable to the Company.
AUDITORS
Statutory Auditor
M/s. M M Nissim & Co LLP are the Statutory Auditors of the Company who were
appointed for a period of five years in the 23rd Annual General Meeting held on 20th
September, 2022 and hold office up to the conclusion of the 28th Annual General Meeting of
the Company without any further ratification by the shareholders of the Company.
M/s. M M Nissim & Co LLP, have confirmed that they are not disqualified to hold the
office of the Statutory Auditor.
There are no qualifications, reservations or adverse remarks made by M/s. M M Nissim
& Co LLP, Statutory Auditors, in their report for the Financial Year ended 31st March,
2023.
Pursuant to provisions of Section 143(12) of the Act, the Statutory Auditors have not
reported any incident of fraud to the Audit Committee of the Company during the year under
review.
Internal Auditor
Pursuant to Section 138 of the Act, the Board of Directors of the Company has appointed
M/s. SCA & Associates, Chartered Accountants as the internal auditors of the Company
for the financial year 2023-2024.
The audit committee of board of directors in consultation with the Internal Auditor
formulates the scope, functioning, periodicity and methodology for conducting the Internal
Audit.
ANNUAL RETURN
The Annual Return of the Company will be placed on the Company9s Website
www.babaartslimited.com after necessary certification and filing the same with the
Ministry of Corporate Affairs.
An extract of the Annual Return as on 31st March, 2023, is attached in Annexure I to
this report.
SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, the Company, with approval of board,
appointed M/s Dholakia & Associates LLP, Company Secretaries in whole time practice to
undertake the Secretarial Audit of the Company for the financial year 2022-2023. The
detailed report on Secretarial Audit is appended as an Annexure II to this report. There
is no qualification, reservation or adverse remarks given by Secretarial Auditors of the
Company.
The board at its meeting held on 25th May, 2023 has appointed M/s Dholakia &
Associates LLP, Company Secretaries in whole time practice for conducting Secretarial
Audit of the Company for the financial year 2023-2024.
Annual Secretarial Compliance Report
The Company has undertaken an audit for the financial year 2022-2023 for all applicable
compliances as per Securities and Exchange Board of India Regulations and Circulars /
Guidelines issued there under. The annual secretarial compliance report duly signed by
Shri Nrupang B. Dholakia, (ICSI Membership No. 10032) Designated Partner of M/s Dholakia
& Associates LLP, Company Secretaries in whole time practice has been submitted to BSE
Limited within the stipulated time in compliance with the provisions of the Regulation
24(A) of the Listing Regulations.
PARTICULARS OF LOAN, GUARANTEE AND INVESTMENTS
During the year under review, your Company has not given loans, guarantees, provided
securities or made investments covered under Section 186 of the Act, 2013.
CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A separate report on Corporate Governance is provided together with a Certificate from
Statutory Auditors of the Company regarding compliance of conditions of Corporate
Governance as stipulated under Schedule V of the Listing Regulations.
A certificate of the Managing Director (MD) and Chief Financial Officer (CFO) in terms
of Regulation 17(8) as specified in Part B of Schedule II of the Listing Regulations,
inert alia, confirming the correctness of the financial statements and cash flow
statements, adequacy of the internal control measures and reporting of matters to the
audit committee, is also annexed.
The Management Discussion Analysis Report as required under the Listing Regulations is
presented in separate section and forms part of this Annual Report.
SEXUAL HARASSMENT
The provisions relating to constitution of Internal Complaints Committee under the
Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
is not applicable to the Company as the Company is having less than 10 employees. The
Company did not receive any complaint of sexual harassment at workplace during the year
under review.
APPLICATION MADE OR PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016.
No Application was made or any proceedings is pending under the Insolvency and
Bankruptcy Code, 2016 against the Company.
DEPOSITS
Your Company has not invited / accepted any deposits from public under Section 73 to
Section 76 of the Act, hence the disclosures required as per Rule 8 (5) (v) and (vi) of
the Companies (Accounts) Rules, 2014 are not applicable to your Company.
PARTICULARS OF CONTRACTS OR ARRANGMENT WITH RELATED PARTIES
All related party transactions that were entered into during the financial year under
review were on an arm9s length basis and in ordinary course of business and were in
compliance with the applicable provisions of the Act, and the Listing Regulations.
All related party transactions are placed before the Audit Committee as also before the
Board for approval at every quarterly meeting. Details of transactions with related
parties as required under 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 forms part
of this report.
Your Company has formulated a policy on related party transactions which is also
available on Company9s website at www.babaartslimited.com. l DETAILS OF POLICY DEVELOPED
AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY
INITIATIVES
The provisions of the Section 135 the Act, are not applicable to the Company.
PARTICULARS OF EMPLOYEES
The information required under Section 197 of the Act, read with Rule 5(1), 5(2) &
5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
is given in Annexure IV.
SHARE CAPITAL
The Company has only one class of shares viz. equity shares with a face value of Re.1/-
each.
ISSUE OF EQUITY SHARES WITH DIFFERENTIAL RIGHTS
The Company has not issued equity shares with differential rights during the year under
review.
ISSUE OF SWEAT EQUITY SHARES
The Company has not issued sweat equity shares during the year under review.
ISSUE OF EMPLOYEE STOCK OPTIONS
The Company has not issued any Employee Stock Options during the year under review.
SHARE CAPITAL AUDIT
Share Capital audit as per the directives of Securities & Exchange Board of India
is being conducted on quarterly basis by M/s. Dholakia & Associates LLP, Company
Secretaries in whole time practice and the audit reports are duly forwarded to BSE Limited
where the shares of the Company are listed.
BUSINESS RESPONSIBILITY REPORT
The Business Responsibility Reporting as required by Regulation 34(2) (f) of the
Listing Regulations is not applicable to your Company for the financial year ended 31st
March, 2023.
GREEN INITIATIVES
Pursuant to Section 101 and 136 of the Act, the Company has sent the annual report
through electronic mode (e-mail) to all shareholders who have registered their email
addresses with the Company or with Depository to receive the annual report through
electronic mode and initiated steps to reduce consumption of paper.
Physical copy of this annual report is mailed to those shareholders whose e mail
addresses are not registered with the Depository or with the Registrar and Transfer Agents
of the Company. The annual report is also available on the web site of the Company
www.babaartslimited.com.
SUBSIDIARY, JOINT VENTURES AND ASSOCIATE COMPANIES.
The Company does not have any Subsidiary, Joint Venture and Associate Company.
SECRETARIAL STANDARDS
The Company has in place proper systems to ensure compliance with the provisions of the
applicable Secretarial Standards issued by the Institute of Company Secretaries of India
and such systems are adequate and operating effectively. During the financial year under
review, the Company was in compliance with Secretarial Standards i.e. SS 1 and SS 2
relating to <Meetings of Board of Directors= and <General Meetings= respectively.
DIRECTORS9 RESPONSIBILITY STATEMENT
The financial statements are prepared in accordance with Indian Accounting Standards
(IND AS) under the historical cost convention on accrual basis except for certain
financial instruments, which are measured at fair values, the provisions of the Companies
Act,2013 and guidelines issued by SEBI. The IND AS are prescribed under Section 133 of the
Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules,
2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016. Accounting
Policies have been consistently applied except where a newly issued accounting standard is
initially adopted or a revision to an existing accounting standard requires a change in
the accounting policy hitherto in use.
In accordance with Section 134(5) of the Companies Act, 2013, your board of directors
confirms that:
i) In the preparation of the annual accounts, the applicable accounting standards read
with requirements set out under Schedule III to the Companies Act, 2013 have been followed
and there are no material departures from the said standards;
ii) The accounting policies have been consistently applied and reasonable and prudent
judgment and estimates have been made so as to give a true and fair view of the profit of
the Company for the year ended on 31st March, 2023 and the state of affairs of the Company
as at 31st March, 2023 as disclosed in the enclosed accounts;
iii) Proper and sufficient care has been taken for 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) The annual accounts have been prepared on a going concern basis.
v) They have laid down internal financial controls for the Company and such financial
controls are adequate and operating effectively; and
vi) They have devised proper systems to ensure compliance with provisions of all
applicable laws and such systems are adequate and operating effectively.
ACKNOWLEDGEMENT
The Board wishes to thank all the Company9s customers, vendors and Company9s bankers,
who have extended their continuous support to the Company.
Your directors specially thank the shareholders of the Company for having reposed their
confidence in the management of the Company and employees and technicians of the Company
at all levels for their dedicated services to the Company and the contribution made by
them towards working of the Company.