Mahan Industries Limited
Your Company's Directors are pleased to present the 23rd Annual Report ofthe Company along with the Audited Accounts for the year ended March 31 2017.
The summary of the financial result of the Company for the year under review are asunder:
|Particulars ||31 March 2017 ||31 March 2016 |
| ||Amt (Rs) ||Amt (Rs) |
|INCOME || || |
|Revenue from Operations ||1573310 ||1116088 |
|Other Income ||781 ||745850 |
|Total Revenue (i) ||1574090 ||1861938 |
|EXPENDITURE || || |
|Purchase ||0 ||3839741 |
|(Increase)/ Decrease in inventory ||(2255022) ||(2403113) |
|Employee Benefits Expense ||532452 ||672182 |
|Finance Cost ||4723607 ||5049656 |
|Depreciation ||18651 ||18651 |
|Other Expenses ||5321927 ||772443 |
|Loss on Sale of Investments ||5136435 ||1935542 |
|Total Expenses (ii) ||13478051 ||9885103 |
|Profit / (Loss) before Tax [(i) - (ii) ] ||(11903960) ||(8023165) |
|Tax expense: || || |
|Current Tax ||- ||- |
|Current tax expenses related to previous year ||- ||- |
|Add: Balance from previous year of Profit (Loss) ||(237163705) ||(229097288) |
|Balance of Profit / (Loss) carried to Balance Sheet ||(249067665) ||(237163705) |
Reserves and Surplus :
The Opening balance of Profit and Loss shows a loss of Rs. 237163705 as against (P.Y. 229097288).During the year the Company has incurred a loss of Rs. 11903960as against (P.Y. Rs. 8023165).The closing Balance of Profit and Loss shows a loss of Rs.249067665/ - as against(P.Y. Rs. 237163705). There is no change in Capital Reserves balance. The openingand closing balance of capital reserves stands at Rs. 90.00 lacs.
Your Directors do not recommend any Dividend for the year under the review.
During the financial year 2016-17 the volatility in the macroeconomic environmentcontinued to cast its shadow and affected most of the markets where your Company operatesin. During the year under the review the total income has decreased by approx. 15.45% andloss has increased by 48.36%
Disclosure under Rule 5 of Companies (Accounts) Rules 2014: Change in Nature ofCompany Business:
The Company is a Non-Banking financial Company (NonDeposit taking) registered with theReserve Bank of India. There is no change in nature of Company Business.
Details of Directors and Key Managerial Personnel Appointed / Resigned:
The Board of Directors' key purpose is to ensure the company's prosperity bycollectively directing the company's affairs whilst meeting the appropriate interests ofits Shareholders and stakeholders.
The Board consists of a combination of Executive Non Executive and IndependentDirectors with an extensive and diverse experience in different fields of operations.
During the year under the review no Key Managerial Personnel have been appointed orresigned.
Details of Holding / Subsidiary Companies / Joint Ventures / Associate Companies:During the year under review there was no holding / Subsidiary Company / Joint Ventures /Associate Companies were there.
The Company has not invited any deposit other than the exempted deposit as prescribedunder the provision of the Companies Act 2013 and the rules framed there under asamended from time to time. Hence there are no particulars to report about the depositfalling under Rule 8 (5) (v) and (vi) of Companies (Accounts) Rules 2014.
Details of Significant and Material Orders passed by Regulators or Courts or Tribunals:
During the year under review there were no significant and material orders passed byany Regulators or Court or Tribunals which may have impact on the going concern status. Noorder has been passed by any Regulators or Court or Tribunals which may have impact on theCompanys operation in future.
Internal Financial Controls:
The Company has an adequate internal financial control to support the preparation ofthe financial statements.
CODE OF CONDUCT
Pursuant to the provisions of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 your Company has laid down a Code of Conduct for its Board Members andSenior Management Personnel. All the Directors and the Senior Management Personnel haveaffirmed compliance with the said Code of Conduct. A declaration regarding compliance byBoard Members and Senior Management Personnel with the Code of Conduct for the year endedMarch 31 2017 is also contained in the Corporate Governance Report.
Members not having Shares in Dematerialized form are advised to avail the facility ofDematerialization through any of the nearest Depository Participants (DPs) to avoid thepossibility of loss mutilation etc of share certificates and also to ensure safe andspeedy transactions in the securities.
DIRECTORS' RESPONSIBILITY STATEMENT
As required under the provisions of Section 134 of the Act your Directors report that:
(a) In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to 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 at the end of the financial year and ofthe Loss of the Company for that period.
(c) The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities.
(d) The Directors have prepared the annual accounts on a going concern basis.
(e) The Directors have laid down internal financial controls as required by Explanationto Section 134(5)(e) of the Act) to be followed by the Company and such internal financialcontrols are adequate and are operating effectively.
(f) The Directors have devised proper systems to ensure compliance with the provisionsof applicable laws and such systems are adequate and operating effectively.
Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo :
Pursuant to provision of Section 134 (3) (m) of the Companies Act 2013 read with Rule8 of Companies (Accounts) Rules 2014 the Company has no particulars to report in respectof conservation of energy technology absorption foreign exchange earnings and outgoduring the year under review.
Extract of the Annual Return
Pursuant to provision of Section 92 and 134 and other applicable provision of theCompanies Act 2013 and of Rule 12 (1) of Companies (Management and Administration) Rules2014 the extract of the annual return in form MGT 9 for the Financial Year ended on 31stMarch 2017 is annexed as Annexure I to this Report.
PARTICULARS OF EMPLOYEES:
There was no employee drawing remuneration requiring disclosure under the Rule 5 (2) ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.Theinformation required under Section 197(12) of the Companies Act 2013 and rule 5(2) and5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isgiven in Annexure II to this report and form part of this Report.
The Equity Shares of the Company are listed on Bombay Stock exchange. The Company isregular in payment of listing fees. The Company has paid the listing fees for the year2016 2017. However listing fees for the year 2017 2018 remains unpaid.
AUDITORS AND AUDITORS' REPORT
The Board of Directors of the Company propose to reappoint M/s. Roopen R. Shah &Co. asStatutory Auditors of the Company to hold office from the conclusion of thisannual general meeting until the conclusion of 28th Annual General Meetingsubject to ratification by the members at each annual general meeting. The Company hasalso received a letter from M/ s. Roopen R. Shah & Co. that they are eligible for theappointment of auditors and also stating that their appointment if made will be within thelimits prescribed under the provisions of the Companies Act 2013 and the rules madethereunder.
The Company has received letter from them to the effect that their appointment ifratified would be within the prescribed limits under Section 141(3)(g) of the CompaniesAct 2013 and that they are not disqualified from appointment.
The Board recommends the ratification of their appointment from the conclusion of thisAnnual General Meeting up to the conclusion of next Annual General Meeting of the Company.
There is no qualification or adverse remarks in the auditor's report. The Notes onAccounts referred to in the Auditors' Report are self-explanatory and do not call for anyfurther comments.
The Company has duly constituted its Audit Committee pursuant to the provisions ofSection 177 of the Companies Act 2013&Regulation 18 of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015. The detail of the constitution of theaudit committee is provided in the Corporate Governance Report. In Conformity with therequirements of Regulation 18 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 read with Section 177 of the Companies Act 2013 asapplicable the strength of the Board as also of the Audit Committee is adequate.
DEMATERIALISATION OF SHARES:
The ISIN for the equity shares is INE564J01018. As on 31st March 2017 total 22811707equity shares of the Company have been dematerialized. Members of the Company arerequested to dematerialize their shares.
Related Party Transactions
All related party transactions that were entered into during the year under report wereon an arm's length basis and in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company during the year. No advance is/ was paid for entering into related party transactions. The details of the transactionsentered with related party are mentioned in the notes to the accounts.
Particulars of Loans / Guarantees / Investment :
The Company has not given any loan / guarantee or provided any Security or made anyinvestment to any person (except those required for business purpose). The details ofinvestment made during the year is provided in the Balance Sheet. Further the Company is aNon Banking finance Company and therefore it is eligible for exemption as provided underSection 186 (11) of the Companies Act 2013. The Company and its Directors do not have anyrelation to the person to whom the loan is provided or the Company in which the investmentis made. The loan and investment are made for Business purpose.
Risk Management Policy
The Company has a structured risk management policy. The Risk management process isdesigned to safeguard the organization from various risks through adequate and timelyactions. It is designed to anticipate evaluate and mitigate risks in order to minimizeits impact on the business. The potential risks are inventorised and integrated with themanagement process such that they receive the necessary consideration during decisionmaking. It is dealt with in greater details in the management discussion and analysissection. The Risk Management Policy is also available on the Companys website. i.e.www.mahan.co.in
Declaration by Independent Directors:
The following Directors are independent in terms of Section 149(6) of the Act and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 :
(a) Lalit Sharma
The Company has received requisite declarations/ confirmations from all the aboveDirectors confirming their independence.
POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
The requisite details as required by Section 134(3)(e) Section 178(3) & (4) andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is attachedherewith and forms part of the Directors Report.
The details in respect Disclosure under Section 197(12) and Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are provided inAnnexure II of the Report.
The details of the remuneration policy of the Company as required in terms of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 is provided in AnnexureIII of the Report.
MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT
The Management's Discussion and Analysis on Company's performance industrytrends and other material changes withrespect to the Company pursuant to Regulation 34 ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is attached inAnnexure IV forming part of the Annual Report.
Number of Board Meetings
The Board meets at regular intervals to discuss and decide on Company / business policyand strategy apart from other Board business. The Board / Committee Meetings arepre-scheduled and a tentative annual calendar of the Board and Committee Meetings iscirculated to the Directors well in advance to facilitate them to plan their schedule andto ensure meaningful participation in the meetings. However in case of a special andurgent business need the Board's approval is taken by passing resolutions throughcirculation as permitted by law which are confirmed in the subsequent Board meeting.
The notice of Board meeting is given well in advance to all the Directors. Usuallymeetings of the Board are held in Ahmedabad. The Agenda of the Board / Committee meetingsis circulated at least a week prior to the date of the meeting. The Agenda for the Boardand Committee meetings includes detailed notes on the items to be discussed at the meetingto enable the Directors to take an informed decision.
During the year the Board of Directors met 9 times. The details of the Board Meetingsare provided in the Corporate Governance Report.
Corporate Social Responsibility:
The Company is not covered under the criteria of the provision of Section 135 of theCompanies Act 2013 read with the Companies (Corporate Social Responsibility Policy)Rules 2014 and therefore it is not mandatory for the Company to have the CorporateSocial Responsibility.
Pursuant to SEBI (Listing Obligations and Disclosure Regulations) 2015 and of Clause 49of the Listing Agreement with BSE Limited (Bombay Stock Exchange) Management Discussion& Analysis Corporate Governance Report and Auditor's Certificate regarding complianceto conditions of corporate governance are made part of this Annual Report and marked asAnnexure V.
Code For Prevention Of Insider Trading Practices
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and designated employees of theCompany.
The Code requires pre-clearance for dealing in the Company's shares and prohibits thepurchase or sale of Company shares by the Directors and the designated employees while inpossession of unpublished price sensitive information in relation to the Company andduring the period when the Trading Window is closed. The Board is responsible forimplementation of the Code. The insider trading Policy is also available on the Website ofthe Company i.e. mahan.co.in
Disclosure under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013
The Company has in place an Anti harassment policy in line with the requirements of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.Internal Complaint Committee are set up at shop floor level to redress complaints receivedregularly and are monitored by women line supervisors who directly report to the Chairman.All employees (permanent contractual temporary trainees) are covered under the policy.There was no compliant received from any employee during the financial year 2016-17 andhence no complaint is outstanding as on 31.03.2017 for redressal.
Pursuant to provision of Section 110 of the Companies Act 2013 the Company hascomplied with the mandatory Secretarial Standards which are notified.
The Company is not engaged in the manufacturing activity and therefore the provisionsof Cost Audit are not applicable to the Company.
SECRETARIAL AUDIT REPORT :
Pursuant to Section 204 of the Act the Secretarial Audit Report for the Financial Yearended 31st March 2017 given by Nisha Munka Practicing Company Secretary is attachedherewith and marked as Annexure VI which forms part of the Directors Report. Theobservations are self explanatory.
ANNUAL PERFORMANCE EVALUATION :
During the year the Board has carried out the annual evaluation of its own performanceas well as the evaluation of the working of its Committees and individual Directorsincluding Chairman of the Board. This exercise was carried out through a structuredquestionnaire prepared separately for Board Committee and individual Directors.
The questionnaire for Board evaluation was prepared taking into consideration variousaspects of the Board's functioning such as understanding of Board members of their rolesand responsibilities time devoted by the Board to Company's long-term strategic issuesquality and transparency of Board discussions quality quantity and timeliness of theinformation flow between Board members and management Board's effectiveness indisseminating information to shareholders and in representing shareholder interests Boardinformation on industry trends and regulatory developments and discharge of fiduciaryduties by the Board.
The Board acknowledged certain key improvement areas emerging through this exercise andaction plans to address these are in progress. The performance evaluation of the NonIndependent Directors including Chairman was carried out by the Independent Directors at aseparate meeting of the Independent Directors on 15th January 2016.TheNomination and Remuneration Committee has further carried out evaluation of all Directorsincluding Independent Directors. The report of performance evaluation so arrived at wasthen noted and discussed by the Nomination and Remuneration Committee and the Board intheir respective meetings.
In accordance with the criteria suggested by The Nomination and Remuneration Committeethe Board of Directors evaluated the performance of the Board having regard to variouscriteria such as Board composition Board processes Board dynamics etc. The IndependentDirectors at their separate meetings also evaluated the performance of the Board as awhole based on various criteria. The Board and the Independent Directors were of theunanimous view that performance of the Board of Directors as a whole was satisfactory.
Committees of the Board :
The performance of the Audit Committee the Corporate Social Responsibility Committeethe Nomination and Remuneration Committee and the Stakeholders Relationship Committee wasevaluated by the Board having regard to various criteria such as committee compositioncommittee processes committee dynamics etc. The Board was of the unanimous view that allthe committees were performing their functions satisfactorily and according to the mandateprescribed by the Board under the regulatory requirements including the provisions of theAct the Rules framed thereunder and the Listing Agreement.
Individual Directors :
(a) Independent Directors: In accordance with the criteria suggested by The Nominationand Remuneration Committee the performance of each independent director was evaluated bythe entire Board of Directors (excluding the director being evaluated) on variousparameters like engagement leadership analysis decision making communicationgovernance and interest of stakeholders. The Board was of the unanimous view that eachindependent director was a reputed professional and brought his/her rich experience to thedeliberations of the Board. The Board also appreciated the contribution made by all theindependent directors in guiding the management in achieving higher growth and concludedthat continuance of each independent director on the Board will be in the interest of theCompany.
(b) Non-Independent Directors: The performance of each of the non-independent directors(including the chair person) was evaluated by the Independent Directors at their separatemeeting. Further their performance was also evaluated by the Board of Directors. Thevarious criteria considered for the purpose of evaluation included leadership engagementtransparency analysis decision making functional knowledge governance and interest ofstakeholders. The Independent Directors and the Board were of the unanimous view that eachof the non-independent directors was providing good business and people leadership
CEO AND CFO CERTIFICATION :
Pursuant to Regulation 17(8) of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 Certificate from Mr.Yogendrakumar Gupta Managing Director for the year ended 31st March 2017is given in theCorporate Governance Report. The Company has not yet appointed separate Chief FinancialOfficer and hence it has been signed only by the Managing Director.
MATERIAL CHANGES AND COMMITMENTS:
Pursuant to the directive of the SEBI the Company is put under Shell Category. TheCompany has submitted necessary papers to BSE required and is willing to represent that weare genuine company operating for last 23 years. There are no material changes andcommitments if any affecting the financial position of the Company subsequent to thedate of the Balance sheet and up to the date of the report.
Vigil Mechanism & Whistle Blower Policy
The Company has a Vigil mechanism & Whistle blower policy under which the employeesare free to report violations of applicable laws and regulations and the Code of Conduct.The reportable matters may be reported to the Vigilance & Ethics Officer whichoperates under the supervision of the Audit Committee as protected disclosures through ane-mail or dedicated telephone line or a written letter. Employees may also reportdirectly to the Chairman of the Audit Committee. The said Policy is available on thewebsite of the Company.
Policy on Related Party Transactions
The Board of the Company has adopted the Policy and procedure with regard to RelatedParty Transactions. The policy envisages the procedure governing the materiality ofRelated Party Transactions and dealing with Related Party transactions required to befollowed by Company to ensure compliance with the Law and Regulation. Related PartyTransaction Policy has been placed on the website of the Company and can be accessed atthe link: www.mahan.co.in
Your Directors acknowledge the continued support and cooperation received from theCentral Government Shareholders Banks and other Lenders suppliers and Dealers.
The Board also wishes to record its sincere appreciation of the total commitmentdedication and hard work put in by every stakeholder of the Company.
| ||By the Order of the board of Directors of |
| ||Mahan Industries Limited |
|Date: 2nd September 2017 ||Chairman cum Managing Director |
|Place: Ahmedabad ||Yogendrakumar Gupta |
| ||DIN :01726701 |