Midwest Gold Ltd.
|BSE: 526570||Sector: Others|
|NSE: N.A.||ISIN Code: INE519N01014|
|BSE 10:30 | 17 Nov||Stock Is Not Traded.|
|NSE 05:30 | 01 Jan||Stock Is Not Traded.|
|BSE: 526570||Sector: Others|
|NSE: N.A.||ISIN Code: INE519N01014|
|BSE 10:30 | 17 Nov||Stock Is Not Traded.|
|NSE 05:30 | 01 Jan||Stock Is Not Traded.|
Your Directors have pleasure in presenting the TWENTY SIXTH ANNUAL REPORT togetherwith the Audited Financial Statements of the company for the financial year ended 31stMarch 2016.
1. FINANCIAL HIGHLIGHTS:
The performance of the company for the financial year ended 31st March 2016 issummarized below.
2. COMPANY AFFAIRS
Your Company has achieved a Turnover of Rs.411.04 Lacs when compared to Rs 15.39 lacsduring the previous year. The operations of the Company resulted in loss of Rs.115.85 lacswhen compared to profit of Rs. 8.72 Lacs during the previous year.
3. FUTURE OUTLOOK:
The management has done well to ensure sustain operations. However due to low incomehigh cost and expenditure the operations resulted in loss as specified above. Effortsare being made to improve the turnover and reduce the costs involved in the coming yearsand also for improving the overall business activities of the Company.
The Management is also looking to enhance the profit in the ensuing financial year.
Your Directors do not recommend any dividend for the financial year 2015-2016 in viewof the operating loss in the current year and accumulated losses.
The company has not accepted any deposits during the year under the review.
6. TRANSFER TO RESERVES:
During the year no amount was transfer to General Reserve.
7. CHANGE IN THE NATURE OF BUSINESS:
During the year there was no change in the nature of the business of the company.
8. DISCLOSURE UNDER SECTION 164(2) OF THE COMPANIES ACT 2013
The company has received the disclosure in Form DIR-8 from its Directors beingappointed or re- appointed and has noted that none of the Directors are disqualified undersection 164(2) of the companies Act 2013 read with Rule 14(1) of Companies Appointmentand Qualification of Director Rules 2014
9. SUBSIDAIRY COMPANIES:
The Company does not have any subsidiary Companies as on 31st March 2016.There are noAssociate Companies within the meaning of Section 2(6) of the Companies Act 2013. Thequestion of material change of the business of the subsidiaries/Associates does not arise.
10. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTSRELATE AND THE DATE OF THE REPORT:
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial statements relateon the date of this report.
11. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OFTHE COMPANY:
The Company has in place a business risk management framework for identifying risks andopportunities that may have a bearing on the organization's objectives assessing them interms of likelihood and magnitude of impact and determining a response strategy. YourCompany follows wellestablished and detailed risk assessment and minimizationprocedures which are periodically reviewed by the Board.
The Company has laid down a well-defined risk management mechanism covering riskmapping risk exposure and risk mitigation process. The Companys Risk ManagementPolicy has been developed to include various categories such as Human ResourcesFinancial Business Processes and Systems strategy Corporate Governance and Complianceand Information Security.
A detailed exercise has been carried out to identify evaluate manage and monitor therisks which shall help the Company to take pro-active decisions and avoid all financialimplications. The Board periodically reviews the risks and suggests steps to be taken tocontrol and mitigate the same through a properly defined framework.
The risk management includes identifying types of risks and its assessment riskhandling and monitoring and reporting.
Further the Board ensures risk reporting and updates risk policy compliances andprovide overall guidance and support to business risk owners.
12. CORPORATE SOCIAL RESPONSIBILITY:
Since your Company do not have adequate profits in accordance with provisions of theCompanies Act 2013 and Rules made there under for the past three years hence did notimplement corporate social responsibility policy.
13. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT 2013:
The Company has not given any Loans or Investments made under Section 186 of theCompanies Act 2013 to other Bodies Corporate or persons as referred thereto during thefinancial year. However it has enhanced guarantee to M/s HDFC Bank Ltd on behalf of M/sMidwest Granite Pvt. Ltd its Holding Company for an amount of Rs. 405000000/- from Rs.255000000/- which is well within the limits of prior approval of the Share Holders videSpecial Resolution dated 07.03.2012 (Announcement Date of result of Postal ballot) dulypassed following the provisions of the earst while Companies Act 1956 and relevant Rulesmade there under.
14. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:
The transactions entered with related parties for the year under review were on armslength basis and in the ordinary course of business. Since the provisions of Section 188of the Companies Act 2013 are not attracted the disclosure in Form AOC- 2 is notrequired. Further there are no material related party transactions as applicable underthe SEBI (LODR) Regulations 2016 during the year under review with the PromotersDirectors or Key Managerial Personnel. However pursuant to Section 134(3)(h) & Rule8(2) of the Companies (Accounts) Rules 2014 AOC-2 is enclosed as Annexure-1.
15. EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS:
There were no qualifications reservations or adverse remarks made either by theAuditors or by the Practicing Company Secretary in their respective reports.
16. COMPANYS POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATIONAND DISCHARGE OF THEIR DUTIES:
The Board has framed a Policy relating to appointment of Directors payment ofManagerial remuneration Directors qualifications positive attributes independenceof Directors and other related matters as provided under Section 178 (3) of the CompaniesAct 2013 based on the recommendation ofNomination and Remuneration Committee. The detailsof this Policy is explained in the Corporate Governance Report.
17. DIRECTORS AND KEYMANAGERIAL PERSONNEL INFORMATION:
a) Reappointment of Retiring Director:
In accordance with the provisions of the Companies Act 2013 Mr. Deepak KukretiDirector is retiring at the ensuing Annual General Meeting and being eligible offershimself for reappointment.
b) Resignation of Woman Director:
Mrs. M.Swarupa Rani DIN 00667626 Woman Director resigned for the office of theDirector w.e.f 14.08.2015 due to her personal reasons and other preoccupation.
c) Appointment of Woman Independent Director:
During the year Mrs. K.Neelima DIN 07257891 was appointed as Independent WomanDirector in accordance with the applicable provisions of Companies Act 2013 and relevantrules made there under by the Board of Directors w.e.f. 14-08-2015 and shareholders of thecompany regularised her appointment in their meeting held on 29.09.2015 upon therecommendation of the board of directors.
d) Resignation of Independent Director:
Mr. S.Radha Krishnan Independent Director DIN :00196796 of the Company has resignedwith effect from 14.08.2015 due to his personal reasons. The Board records itsappreciation of the valuable contribution rendered by the said Independent Director duringhis tenure as an Independent Director of the Company.
18. DECLARATION OF INDEPENDENT DIRECTORS:
The Independent Directors submitted their disclosures to the Board that they fulfillall the requirements as stipulated in Section 149(6) of the Companies Act 2013 so as toqualify themselves to be appointed as Independent Directors under the provisions of theCompanies Act 2013 and the relevant rules as per the Listing Agreement.
19. EVALUATION OF THE BOARDS PERFORMANCE:
In compliance with the requirements of Section 134(3) (p) of the Companies Act 2013and 17(10) of SEBI(LODR) Regulations 2015 the performance of the Board was carried outduring the year under review. The Board was evaluated for its performance based on thefollowing factors: i. Attendance of Board Meetings and Committees; ii. Contribution madeto the Board discussions and future planning; iii. Level of commitment to thestakeholders interest; iv. Initiatives towards the growth of the business andprofitability; v. Providing outlook view points and feedback taking the Company aheadbeyond expectations.
The evaluation involves Self-Evaluation by the Board Member and thereafter in thefollowing manner: a) Individual Directors - The performance of the individualDirectors is evaluated by the Nomination and Remuneration Committee.
b) Board and Committees The Board evaluated its own performance and also of theCommittees taking into consideration the above mentioned factors. A member of the Boarddoes not participate in the discussion of his / her evaluation.
20. DIRECTORS RESPONSIBILITY STATEMENT:
The Directors of your Company hereby report:
(i) that in the preparation of Annual Accounts for the financial year ended 31st March2016 the applicable accounting standards have been followed along with the properexplanation relating to material departures if any there from; (ii) that the directorshave selected such accounting policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the company at the end of the financial year and of the profit andloss of the company for that period; (iii) that the directors have taken proper andsufficient care for the maintenance of adequate accounting records in accordance with theprovisions of this Act for safeguarding the assets of the company and for preventing anddetecting fraud and other irregularities; (iv) that the directors have prepared the annualaccounts on a going concern basis. (v) they have laid down internal financial controls tobe followed by the Company and such internal financial controls are adequate and operatingeffectively; (vi) they have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and external consultants and the reviews performed by management andthe relevant board committees including the audit committee the board is of the opinionthat the Companys internal financial controls were adequate and effective during thefinancial year 2015-16.
21. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information regarding Energy Conservation Technology Absorption Foreign ExchangeEarnings and Outgo as required by section 134(3)(m) of the Companies Act 2013 read withRule 8(3) of the Companies (Accounts) Rules 2014 are given as Annexure -2 andforms part of this report.
22. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW:
The Company has conducted Five (5) Board Meetings during the financial year underreview. The Board Meetings were held in compliance with the Companies Act 2013. Thevarious committee meetings are held in accordance with the applicable provisions of theCompanies Act 2013 relevant rules made there under and SEBI (LODR) Regulations 2015.The details of the same are provided in the Corporate Governance Report.
23. STATUTORY AUDITORS:
The Company has received letter from the auditors to the effect that theirre-appointment if made would be within the prescribed limits under Section 141(3)(g) ofthe Companies Act 2013 and that they are not disqualified for re-appointment.
The appointment of Auditors M/s. G.L. Kothari & Co. Chartered AccountantsBangalore shall be subject to the ratification at the ensuing Annual General meeting andbeing eligible offer themselves for reappointment subject to the time stipulated in thenotice of the AGM. Hence your Board of Directors have recommended for the ratification oftheir appointment for the financial year 2016-2017.
24. AUDIT REPORT
The Notes to Accounts referred to in the Auditors Report are self explanatory andtherefore do not call for any further comments.
25. INTERNAL AUDIT:
Your Company continuously invests in strengthening its internal control process andappointed Mr I.Venkateswarlu M.Com LLM who is having vast experience in the field ofaccounts finance costing etc as Internal Auditor of the Company The Company has put inplace an adequate system of internal control commensurate with its size and nature ofbusiness. These systems provided a reasonable assurance in respect of providing financialand operational information complying with applicable statutes safe guarding assets of theCompany and ensuring compliance with Corporate Policies. Procedures to ensure conformancewith policies standards and delegation of authority have been put in place covering allactivities. Audit Committee periodically reviews the performance of internal audit system.
The Company has rigorous business planning system to set the targets and parameters foroperations which are reviewed with actual performance to ensure timely initiation ofcorrective action if required. The Audit Committee reviews adherence to the internalcontrol system and internal audit reports. Further the Board actually reviews theeffectiveness of the Companys internal control system.
26. SECRETARIAL AUDIT:
In accordance with the provisions of Section 204 of the Companies Act 2013 read withRule 9 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 the Company has got the Secretarial Audit conducted from the Practicing CompanySecretary.
A Secretarial Audit Report issued by Mr. G.Shyam Krishna Company Secretary inPractice in Form MR-3 in respect of the secretarial audit of the Company for thefinancial year ended 31st March 2016 is provided in Annexure -3.
27. COST AUDIT
The Company is not required to maintain cost records as per the Companies (Cost Recordsand Audit) Amendment Rules 2014 as the turnover of the Company for the financial year2015-2016 was below Rs. 35 Crores.
28. EXTRACT OF ANNUAL RETURN:
The extract of Annual Return (MGT 9) pursuant to the provisions of Section 92read with Rule 12 of the Companies (Management and administration) Rules 2014 isfurnished in Annexure-4 and is attached to this Report.
29. CORPORATE GOVERNANCE:
Pursuant to the Regulation 15(2) of SEBI (LODR) Regulations 2015 the Regulationspertaining to the Corporate Governance i.e 17 to 27 & Clauses b to i of sub regulation46(2) and para C D & E of schedule V are not applicable to the Company since the networth is less than 25 Crores and the paid up capital is less than 10 Crores as on thelatest Audited Balance Sheet.
However the Company has implemented the procedures and adopted practices in conformitywith the Code of Corporate Governance of the SEBI(LODR) Regulations 2015 to the extentapplicable read with the provisions of the Companies Act 2013 and relevant rules madethere under . A separate report on Corporate Governance is annexed herewith as a part ofthe Annual Report along with the Auditor's Certificate on its compliance.
30. PARTICULARS OF EMPLOYEES:
Comparison of the Remuneration of the KMP against the performance of the company.Further the Company has no person in its employment drawing salary of Rs. 60 lacs perannum or Rs. 5 lacs per month as defined under the provisions of Section 197 of theCompanies Act 2013 read with Rule 5(2) and 3 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014.
Your Companys shares are presently listed on the Stock Exchanges of BombayBangalore Ahmadabad and Delhi. However in the recent past the SEBI has derecognized allthe local stock exchanges i.e Bangalore Delhi except Ahmadabad for their non complianceof the SEBI norms. The Ahmedabad Stock Exchange suspended the listing status of thecompany w.e.f. 01-06-2014. Further none of the local stock exchanges are providing tradingplat form to the Company from the past several years. The company is regular in payment oflisting fee to BSE.
32. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE COURTS/ REGULATORS.
During the year there were no significant and material orders passed by the Courts/Regulators.
33. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Management Discussion and Analysis Report pursuant to Regulation 34 of the SEBI(LODR)Regulations 2015 forms part of this Report and is annexed hereto.
34 DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM:
The Company has constituted an Audit Committee as required under Section 177 of theCompanies Act 2013 and has also established Vigil Mechanism for their employees andDirectors to report their genuine concerns or grievances.
The details of the same are explained in the Corporate Governance Report. The Board hasaccepted all the recommendations of the Audit Committee during the year under review asand when brought to their notice.
The Board of Directors would like to place on record its appreciation towards all theemployees & the managerial personnel of the company for their contribution in theoperations of the company during the year under review. The Directors would also like torecord their sincere thanks to the Companys bankers Central and State Governmentofficials customers vendors and the shareholders for their continued support andco-operation.
Form No. AOC-2
(Pursuant to clause (h) of sub-section (3)of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014)
Form for disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 including certain arms length transactions under third proviso thereto
1. Details of contracts or arrangements or transactions not at arms length basis:
The Company has not entered into any contract or arrangement or transactions with itsrelated parties which is not arms length during the financial year 2015-2016.
2. Details of material contracts or arrangement or transactions at arms lengthbasis:
3. Date(s) of approval by the Board if any: Not applicable. Since the agreements wereentered into in the ordinary course of business and on arms length basis. Howeverthe company has obtained necessary approvals from the Audit Committee pursuant to theprovisions of Companies Act and Rules Regulations made there under.
Information under Section 134 (1) (m) of the Companies Act 2013 Read with Companies(Accounts) Rules 2014
A. CONSERVATION OF ENERGY:
i. The Operations of the Company require extensive use of power and the company issupplementing its power requirement by use of generators installed in the Factory.
ii. The Company has not made any additional investments and has not proposed any amountfor reduction of consumption of energy.
iii. There is no impact of the measures at (i) and (ii) above for reduction of energyconsumption and consequent impact on the cost of production of goods.
iv. Disclosure under Form A is not applicable to the Company.
B. TECHNOLOGY ABSORPTION:
(Disclosure of particulars with respect to technology Absorption)
i) Research and Development (R & D):
C) FOREIGN EXCHANGE EARNINGS AND OUT GO:
Foreign Exchange earnings and outgo:
(On receipts and payments basis)
Form No. MR-3 SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED MARCH 31 2016
[Pursuant to section 204(1) of the companies Act 2013 and rule No. 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]
Midwest Gold Limited Bangalore.
I have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by M/s. Midwest Gold Limited (hereinaftercalled the Company). Secretarial Audit was conducted in a manner that provided me areasonable basis for evaluating the corporate conducts / statutory compliances andexpressing my opinion thereon. Based on my verification of the Midwest Gold Limitedsbooks papers minute books forms and returns filed and other records maintained by thecompany and also the information provided by the company its officers agents andauthorised representatives during the conduct of secretarial audit and as per theexplanations given to me and the representations made by the Management I hereby reportthat in my opinion the Company has during the audit period covering the financial yearended on 31st March 2016 generally complied with the statutory provisions listedhereunder and also that the Company has proper Board processes and compliance mechanism inplace to the extent in the manner and subject to the reporting made hereinafter:
I have examined the books papers minute books forms and returns filed and otherrecords made available to me and maintained by Midwest Gold Limited for the financial yearended on 31st March 2016 according to the applicable provisions of:
i. The Companies Act 2013 (the Act) and the rules made there under asapplicable;
ii. The Securities Contract (Regulation) Act 1956 (SCRA) and the rulesmade there under;
iii. The Depositories Act 1996 and the Regulations and Bye-laws framed there under;
iv. Foreign Exchange Management Act 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment Overseas Direct Investment and ExternalCommercial Borrowings;
v. The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (SEBI Act) and amendments thereto:
a. The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;
b. The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992 & 2015; c. The Securities and Exchange Board of India (Issue ofCapital and Disclosure Requirements) Regulations 2009; and
vi. Other laws applicable to the Company as per the representations made by theManagement.
I have also examined compliance with the applicable Regulations of the following:
i. Secretarial Standards issued by The Institute of Company Secretaries of India withrespect to Board and General Meetings
ii. The Listing Agreement entered into by the Company with BSE Limited read with theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Initially the shares were also listed in BSE ASE DSE BGSE. However in the recentpast the SEBI has de recognized the local stock exchanges except Ahmadabad Stock Exchangedue to their non compliance with SEBI trading norms. Further none of the local stockexchanges are providing trading plat form to the Company from the past several years. TheAhmedabad Stock Exchange suspended the listing status of the company on 01-06-2014.
During the period under review and as per the explanations and clarifications given tome and the representations made by the Management the Company has generally complied withthe provisions of the Act Rules Regulations Guidelines etc. mentioned above.
I further report that:
The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the period under review werecarried out in compliance with the provisions of the Act.
Adequate notices were given to all Directors at least seven days in advance to schedulethe Board Meetings. Agenda and detailed notes on agenda were sent in advance and a systemexists for seeking and obtaining further information and clarifications on the agendaitems before the meeting and for meaningful participation at the meeting. Decisions at theBoard Meetings as represented by the management were taken unanimously. I further reportthat as per the explanations given to me and the representations made by the Managementand relied upon by me there are adequate systems and processes in the Company commensuratewith the size and operations of the Company to monitor and ensure compliance withapplicable laws rules regulations and guidelines.
This Report is to be read with my letter of even date which is annexed as Annexure -Aand forms an integral part of this report.
Annexure - A
The Members Midwest Gold Limited Bangalore
My report of even date is to be read along with this letter.
1. Maintenance of Secretarial record is the responsibility of the management of theCompany. My responsibility is to express an opinion on these secretarial records based onmy audit.
2. I have followed the audit practices and process as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theverification was done on test basis to ensure that correct facts are reflected inSecretarial records. I believe that the process and practices I followed provide areasonable basis for my opinion.
3. I have not verified the correctness and appropriateness of financial records andBooks of Accounts of the Company.
4. Where ever required I have obtained the Management representation about theCompliance of laws rules and regulations and happening of events etc.
5. The Compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of management. My examination was limited tothe verification of procedure on test basis.
6. The Secretarial Audit report is neither an assurance as to the future viability ofthe Company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the Company.