Your Directors fill pleasure to inform that Equity Shares of the Company have receivedListing Permission from BSE Limited on 30th January 2017 under Direct ListingRoute. Scrip Code of the Company is 540268.
Your Directors herewith present 23nd Annual Report together with the AuditedStatements of accounts for the Financial Year ended on 31st March 2017.
SUMMARY OF FINANCIAL RESULTS:
During the year under review the Company has shown notable performance. The extractsof financial results 2015-16 are as under:
(Rs. In Lacs)
|Particulars ||Current Year ||Previous Year |
| ||2016-17 ||2015-16 |
| ||Rs. ||Rs. |
|Total Income ||133.72 ||182.9 |
|Financial Expenses ||- ||- |
|Depreciation ||1.22 ||0.40 |
|Profit / (Loss) Before Taxation ||2.79 ||12.18 |
|Provision for Income Tax ||0.56 ||4.03 |
|Provision for Deferred Tax ||1.51 ||- |
|Profit after Taxation ||0.72 ||8.15 |
|Prior Period Adjustment ||- ||- |
|Transfer to Special Reserve ||25.00 ||- |
|Surplus brought forward ||84.58 ||74.58 |
|Balance Carried to Balance Sheet ||60.30 ||84.58 |
Company has managed to earned notable profit during the year. How considering thefuture requirements for funds Company wish to conserve the funds and hence do notrecommend any Dividend.
MANAGEMENT DISCUSSION AND ANALYSIS
As stipulated in Schedule V of SEBI (Listing Obligation and Disclosure Requirements)Regulations 2015 the Management Discussion and Analysis Report forms part of this AnnualReport.
DEPOSITS AND LONG TERM BORROWINGS:
During the year Company has not accepted any Deposits or long term borrowings from anyperson except unsecured Inter Corporate Loans.
PARTICULARS OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES:
During the year Company has entered in to related party transactions and disclosuresin that regard have been made in Annexure I in prescribed formatAOC 2.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134(3) of the Companies Act 2013 in relation to the FinancialStatements for FY 2016-17 the Board of Directors states that:
a) in preparation of the annual accounts the applicable accounting standards have beenfollowed and there are no material departures;
b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as on 31st March 2017 and ofthe profits for the year ended 31st March 2017;
c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d) the annual accounts have been prepared on a going concern basis;
e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and
f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with reference toFinancial Statements. During the year such controls were tested and no reportablematerial weakness was observed.
SUBSIDIARIES AND JOINT VENTURE
Company does not have any subsidiary companies. Company has not made any investment inJoint Venture.
ENVIRONMENT. HEALTH AND SAFETY (EHS)
The Company accords the highest priority to health environment and safety. The Companydoes not carry on manufacturing operations. The Company takes at most care for theemployees and ensures compliance with the applicable rules and regulation applicable tothe Company.
As stipulated by Regulation 34 of SEBI (Listing Obligation and Disclosure Requirements)Regulations 2015 Corporate Governance Report is annexed to Director Report and forms partof this Annual Report. Certificate of the Auditors regarding compliance with theconditions of Corporate Governance as stipulated in Regulation 34 of SEBI (ListingObligation and Disclosure Requirements) Regulations 2015 is annexed to the Board's Report.
CORPORATE SOCIAL RESPONSIBILITY:
The provisions of Companies Act 2013 and rules framed there under with regard toCorporate Social Responsibility do not apply to the Company and hence no disclosure havemade in that regard.
DIRECTORS AND KEY MANAGARIAL PERSONNEL:
APPOINTMENT AND RESIGNATION:
The Board of Directors in their Board meeting held on 03rd June 2017 haveappointed Mr. Karan Neale Desai as Additional Director under the Category of"Professional Director." Pursuant to provisions of Section 161 of the CompaniesAct 2013 read with provisions of Articles of Association he is entitled to hold theoffice of Director till the commencement of ensuing Annual General Meeting. The Companyhas received a notice in writing under Section 160 of Companies Act 2013 along withrequisite deposit from a shareholder proposing candidature of Mr. Karan Neale Desai.Details required to be provided to shareholders under Regulation 36(3) of SEBI (LODR)Regulations 2015 is mentioned in the Explanatory Statement annexed to the Notice of AnnualGeneral Meeting.
Mr. Hitendrabhai Rajnikant Shah (holding DIN: 00014521) and Ms. Jayshribahen HitendraShah (Holding DIN: 00014540) being Independent Directors on the Board have submitted theirResignation their resignation and have ceased to be the Directors w. e. f. 03rdJune 2017.
RE APPOINTMENT OF DIRECTORS:
Ms. Arunaben Girishkumar Shah (Holding DIN 00014528) was appointed as IndependentDirector w. e. f. 18th January 2008 and is entitled to act as IndependentDirector only upto two consecutive terms each of five years. Her term shall expire end on17th January 2018 and shall cease to be the Independent Director.
There are no other Director on the Board whose term expires at this 23rdAnnual General Meeting and hence the Board does not recommend any Reappointment ofDirectors.
DIRECTORS RETIRING BY ROTATION:
There are no directors of the Company whose period of office is liable to determinationby retirement of Directors by rotation.
DECLARATION BY INDEPENDENT DIRECTORS:
Pursuant to provisions of section 149(7) of Companies Act 2013 the Company hasreceived declaration from Independent Directors for FY 2016-17 confirming that they meetthe criteria of independence as prescribed under the Act and Clause 49 of erstwhileListing Agreement now SEBI (Listing Obligation and Disclosure Requirements) Regulations2015. Further
POLICY ON DIRECTORS' APPOINTMENT:
Pursuant to provisions of section 178 read with 134(3)(e) of Companies Act 2013 TheNomination and Remuneration Committee (NRC) has approved the criteria and process foridentification / appointment of Directors which are as under:
Criteria for Appointment:
A) The proposed Director shall meet all statutory requirements and should:
- Possess highest values ethics and integrity.
- Not have any direct or indirect conflict with business operations.
- Be willing to devote time and efforts.
- Have relevant experience.
- Have understanding about corporate functionality.
- Understand real value of stakeholders.
Process for identification of Directors / Appointment of Directors:
- Board Members may suggest any potential person to the Chairman of the Company meetingthe above criteria. If the chairman deems fit recommendation will be made by him to NRC.
- Chairman himself can also recommend a person to NRC.
- NRC shall process and evaluate the proposal and shall submit their recommendation toBoard.
- Board shall consider such proposal on merit and decide suitably.
Criteria for Performance Evaluation:
The Board considered and approved criteria for performance evaluation of itself andthat of its committees and individual directors as follow:
Criteria for Board Evaluation:
- Focus on strategic decisions.
- Qualitative discussion and processes.
Criteria for Committee Evaluation:
- Fulfillment of allotted responsibilities.
- Effectiveness of recommendation meetings.
Criteria for Independent and Non Independent Directors' evaluation:
- Contribution through their experience and expertise.
- Focus on Stakeholders' interest.
MANNER OF EVALUATION OF BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS:
The Evaluation of Board its Committees and Individual Directors was carried out as perprocess and criteria laid down by the Board of Directors based on the recommendation ofthe Nomination and Remuneration Committee.
The obtaining and consolidation of feedback from all Directors in this regards wascoordinated by the Chairman of Independent Directors' meeting for Board andNon-Independent Directors while the process of evaluation of the Independent Directors wascoordinated by the Chairman of the Company. Based on this Chairman of the Company briefedthe Board and each of the Individual Directors as applicable.
NUMBER OF MEETINGS OF THE BOARD:
The Board meets at regular interval with gap between two meetings not exceeding 120days. Additional meetings are held as and when necessary. During the year under reviewthe Board met Ten times respectively on 05.04.2016 30.05.2016 13.08.2016 10.11.201614.11.2016 16.11.2016 23.01.2017 25.01.2017 14.02.2017 25.03.2017.
The Company has formulated the policy relating to the remuneration of the DirectorsKey Managerial Personnel and other employees of the Company which is as under:
A) Components of Remuneration
- Fixed Pay comprising Basic Salary HRA Car Allowance (applicable to General Managers& above employees) Conveyance Allowances / Reimbursement Company's contribution toProvident Fund Superannuation Fund Gratuity etc.
- Variable Pay which is either in the form of:
Commission to Managing Directors and Commission to Whole-time Directors
B) Annual Appraisal process:
Annual Appraisals are conducted following which annual increments and promotions indeserving cases are decided once in a year based on:
- Employees self-assessment
- Assessment by Immediate Superior and
- Assessment by Head of Department
Annual Increment leading to an increase in Fixed Pay consists of
- Economic Rise based on All India Consumer Price Index published by the Government ofIndia or Internal Survey wherein inflation on commonly used items is calculated.
Remuneration of Independent Directors:
The Company has formulated a policy for the remuneration of Independent Directors asfollows:
- Reimbursement of Expenses incurred by Independent Directors for attending any meetingof the Board.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
Disclosure under provisions of Section 197(12) of the Companies Act 2013 read withRule 5(1) 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are given herein below:
|Sr. No. ||Name and Designation ||Ratio of Remuneration of Director to Median Remuneration of Employee ||% Increase in remuneration for FY 2016 17 ||Comparison of Remuneration of Employee against the performance of the Company. |
| || ||Sub Clause (i) of Rule 5(1) ||Sub Clause (ii) of Rule 5(1) ||Sub-Clause (ix) of Rule 5(1) |
|1 ||Mr. Malay Rohitkumar Bhow Whole Time Director * ||1.93 ||Not Applicable ||Not Applicable |
|2 ||Mr. Dhairya Thakkar Company Secretary ||Not Applicable ||Not Applicable ||Not Applicable |
|3 ||Ms. Prakruti Kachchhi Employee ||Not Applicable ||Not Applicable ||Not Applicable |
* Mr. Malay Rohitkumar Bhow was paid remuneration w. e. f. 01st February2017. Hence increase in remuneration is not applicable.
Sub Clause (iii) of Rule 5(1): The percentage increase in the remuneration of employeesin the financial year is 232.31%.
Sub Clause (iv) of Rule 5(1): There are no permanent employees on the roll of Companyexcept the Whole Time Director and Company Secretary.
Sub Clause (v) of Rule 5(1): The Profit of the company increased 251.86% during FY 201516
compared to FY 2014 15. However Profit of the Company reduced by 91.12% compared to FY2015 16. It may be noted that Remuneration of the Company is paid with one year lag i. e.on the basis of Financial Results of FY 2015 16. In addition the remuneration isincreased keeping in mind the completion of probation period economic factors etc.
Sub Clause (vi) of Rule 5(1): The Company was not paying any Remuneration to Whole TimeDirector during FY 2015 16. Remuneration paid to Key Managerial personnel has increased by116% on completion of probation period.
Sub Clause (vii) of Rule 5(1): The Equity Shares of the Company received ListingPermission from BSE Limited on 30th January 2017 hence P/E ratio for FY 2015 16cannot be calculated.
a) Variations in the Market Capitalization of the Company and the Price Earnings Ratio:
|Market Capitalization ||BSE Limited |
|31st March 2017 (7757800 Equity Shares) ||Rs. 13.88 Crores (@ Rs. 17.90/- per share) |
|P/E Ratio || |
|31st March 2017 ||0.46 times (17.90 / 38.40) |
b) The Company has not come out with any Public offer and hence percentage increaseover decrease in the market quotations of the shares of the Company in comparison to therate at which the Company came out with the last public offer is not applicable.
Sub Clause (viii) of Rule 5(1): During the FY 2016 17 average salary of the Companyhas been increased by 116%. The Managerial Personnel were not paid any Remuneration priorto the FY 2016 17. Hence it is not appropriate to compare the percentile increase inManagerial Remuneration. Hence no justification is given in that regard. There are noexceptional circumstances for increase in managerial remuneration.
Sub Clause (ix) of Rule 5(1): During 2016-17 only one Key Managerial Personnel waspaid remuneration for Rs. 500000. The Remuneration was paid based on the profit earned byCompany during FY 2015 16 which was 251.86% more than FY 2014 15.
Sub Clause (x) of Rule 5(1): Directors are not paid any variable component asRemuneration.
Sub Clause (xi) of Rule 5(1): There are no employees of the Company receivingremuneration in excess of the remuneration of Director.
Sub Clause (xii) of Rule 5(1): it is hereby affirmed that the remuneration paid is asper the Remuneration Policy of the Company.
Sub Clause (i) to (iii) of Rule 5(2) and 5(3): There are no employees of the Companyreceiving remuneration in excess of prescribed limits hence no disclosure required to bemade in this regard except that Mr. Malay Rohitkumar Bhow Whole Time of Director of theCompany received aggregate remuneration of Rs. 5 lakhs during FY 2016 17 and is holding inaggregate 3.22% of paid up share capital of the Company.
M/s. Jignesh Domadiya & Co Chartered Accountant Ahmedabad have submitted theirresignation on 09th November 2016 due to their pre occupation. The Board ofDirectors in their Board Meeting held on 10th November 2016 have appointed M/sD Shah & Associates Chartered Accountant Ahmedabad (FRN 109528W FCA 030492) asStatutory Auditors of the Company in casual vacancy. The appointment was confirmed by themembers of the Company in Extra Ordinary General Meeting held on 02nd March2017. They are entitled to hold the office till the conclusion of Annual General Meetingfor the Financial Year 2016 17.
The Board of Directors recommends appointment of M/s Haribhakti & Co. LLPChartered Accountant Ahmedabad as Statutory Auditors of the Company. Company has receiveda certificate regarding their eligibility for being appointed as Statutory Auditor of theCompany pursuant to Section 139(1) of Companies Act 2013 read with rules framedthereunder. The Board of Directors recommends their appointment from the conclusion ofthis Annual General Meeting for Financial Year 2016 17 till the conclusion of fifth AnnualGeneral Meeting for the Financial Year 2020-21 subject to approval of the members to beobtained in each Annual General Meeting.
The Auditors' report for financial year 2016-17 is self explanatory and forms part ofthis Annual Report and does not contain any qualification reservation or adverse remark.
Pursuant to Section 204 of the Companies Act 2013 read with Rules thereof the Boardof Directors has appointed Mr. Viral Ranpura Practicing Company Secretary as SecretarialAuditors of the Company for FY 2016 17. A Secretarial Audit Report for FY 2016-17 isannexed herewith as Annexure II. There are no adverse observations in the SecretarialAudit Report which call for explanation.
AUDIT AND RISK MANAGEMENT:
During the year the Board reviewed the decision taken by it regarding the role of RiskManagement being carried out by the Audit Committee and after detailed deliberation it wasdecided that the Audit Committee of the Board shall continue to play the role of RiskManagement Committee and be called as Audit and Risk Management Committee unless otherwisedecided by the Board.
COMPOSITION OF AUDIT COMMITTEE:
|Name of Director ||Category of Directorship |
|Mr. Hitendra Shah ||Chairman - Independent Director |
|Ms. Arunaben Shah ||Member - Independent Director |
|Ms. Jayshriben Shah ||Member - Independent Director |
|Mr. Malay Bhow ||Member - Promoter Director |
The provisions of Regulation 22 of SEBI (LODR) Regulations 2015 are not applicable tothe Company. However Company has established whistle Blower Policy as matter of GoodGovernance.
RISK MANAGEMENT POLICY:
The provisions of Regulation 21 of SEBI (LODR) Regulations 2015 is not applicable tothe Company hence no Risk Management Committee is formulated. However the Board ofDirectors has developed and implemented Risk Management Policy for the Company. It hasidentified and assessed various risks factors with potential impact on the Company inachieving its strategic objectives or may threaten its existence. The Policy lays downprocedures for risk identification assessment monitoring review and reporting. ThePolicy also lists the roles and responsibilities of Board and Risk Management Committee.
CONSERVATION OF ENERGY TECHNOLOGY ABSOPTION FOREIGN EXCHANGE EARNIGS AND OUTGO:
During the financial year 2015-16 Company has not undertaken any manufacturingoperations. Company has neither earned nor spent anything in foreign currency. Hence nodisclosure is required under this head pursuant to Companies (Accounts) Rules 2014.
THE EXTRACTS OF ANNUAL RETURN:
The extract of the Annual Return in Form MGT-9 is annexed as Annexure III to thisDirectors' Report and forms part of Annual Report.
ALLOTMENT OF SHARES AND CHANGE OF MANAGEMENT.
The Board of Directors of the Company proposes to issue and allot 5742200 EquityShares to M/s Truvalue Agro Ventures Private Limited on Preferential basis pursuant toprovisions of Section 42 read with 62 of Companies Act 2013 read with SEBI (ICDR)Regulations 2009. The relevant disclosure have been made in the explanatory statementannexed to the Notice of Annual General Meeting for FY 2016 17. Due to the proposedpreferential allotment M/s Truvalue Agro Ventures Private Limited is required and intendsto make an open offer under regulation 3& 4 of SEBI (SAST) Regulations 2011 and willacquire substantial number of shares and control of the Company in place of existingpromoters.
The aforementioned resolution is put before the members for their approval in theAnnual General Meeting. The resolution if approved with requisite majority and onreceiving other statutory approvals for allotment of shares would result in Change ofManagement of the Company pursuant to Regulation 3 and Regulation 4 of SEBI (ICDR)Regulations 2011. In that context a Resolution is also proposed in the Annual GeneralMeeting for reclassification of Promoters pursuant to provisions of Regulation 31A of SEBI(LODR) Regulations 2015.
APPRECIATION AND ACKNOWLEDGMENT
The Directors feel pleasure thanking all the stakeholders who have reposed their faithin the management and the company and for their valuable support and cooperation.
|Place: Ahmedabad ||By Order Of The Board |
|Date: 27.07.2017 ||For Dhanvarsha Finvest Limited |
| ||Malay Rohitkumar Bhow |
| ||Chairman & Whole Time Director |
| ||Din: 02770605 |