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Minal Industries Ltd.

BSE: 522235 Sector: Others
NSE: N.A. ISIN Code: INE097E01028
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OPEN 0.53
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VOLUME 50
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Minal Industries Ltd. (MINALINDUS) - Director Report

Company director report

To

The Members

MINAL INDUSTRIES LIMITED

Your Directors have great pleasure in presenting their 27th Annual Report along withthe Audited Balance Sheet and Profit and Loss Account for the year ended 31st March 2015.

FINANCIAL RESULTS:

The financial Results are briefly indicated below:

Year ended on 31.03.2015 Year ended on 31.03.2014
Rupees Rupees
Loss before Depreciation (19660087) (2609454)
Less: Depreciation 1472398 469900
Net Loss before Tax (18187689) (2139554)
Less: Provision for Income Tax (418108) -
Add: Provision for Deferred Tax (207640) 130580
Net Loss after Tax (17561941) (2270134)
Add: Previous year’s profit brought forward 134478649 136748784
Balance Loss carried forward (17561941) (2270134)

TRANSFER TO RESERVES:

There are no transfers to any specific reserves during the year.

REVIEW OF FINANCIAL OPERATIONS

During the year your Company has reported a total turnover of Rs. 7038905 /- (RupeesSeventy Lacs Thirty Eight Thousand Nine Hundred and Five Only). However the totalexpenditure incurred by the Company during the year under review amounted to Rs.26263219/- (Rupees Two Crore Six Two Lakhs Sixty Three Thousand Two Hundred and nineteenOnly)

During the year due to sluggish and adverse market trend your company has reported anet loss of Rs. 17561941/- (Rupees One Crore Seventy Five Lakhs Sixty One Thousand NineHundred and forty One only) as compared to previous years net loss of Rs. 2270134/-(Rupees Twenty Two Lakhs Seventy Thousand One Hundred and Thirty Four Only)

DIVIDEND

Your Directors do not recommend dividend for the year 31st March 2015 as the companyis incurring losses.

DIRECTORS

The Board of Directors in compliance with the provisions of Section 161 of theCompanies Act 2013 appointed Mrs. Sona Parikh as an additional Non-Executive Director andthus offers herself for regularization at the ensuing Annual General Meeting of theCompany.

Mr. Jesingbhai Parikh & Mr. Vikram Parikh resigned w.e.f. 09 th March 2015.

*NUMBER OF MEETINGS OF THE BOARD:

During the financial year 2014-15 Six (6) Board Meetings were held on the followingdates. The gap between any two meetings was not more than one hundred twenty days asmandated under the provisions of Section 173 of the Companies Act 2013 and Clause 49 ofthe Listing Agreement with the Stock Exchanges:-

*INDEPENDENT DIRECTORS:

In terms of provisions of Section 149(7) of the Companies Act 2013 all theIndependent Directors of the Company have furnished a declaration to the ComplianceOfficer of the Company at the meeting of the Board of Directors stating that they fulfillthe criteria of Independent Director as prescribed under Section 149(6) of the CompaniesAct 2013 and are not being disqualified to act as an Independent Director. In terms ofClause 49 of the Listing Agreement the Company has adopted a familiarization programmefor Independent Directors.

*POLICY ON DIRECTORS'APPOINTMENT AND REMUNERATION:

In terms of provisions of Section 178 of the Companies Act 2013 read with revisedClause 49 of the Listing Agreement a policy relating to remuneration for the DirectorsKey Managerial Personnel and other employees has been adopted by the Board of Directors ofthe Company in pursuance of its formulation and recommendation by the Nomination andRemuneration Committee thereby analyzing the criteria for determining qualificationspositive attributes and independence of a Director.

Constitution of the Nomination and Remuneration Committee: The Board has changed thenomenclature of Remuneration Committee constituted under the erstwhile Companies Act 1956by renaming it as Nomination and Remuneration Committee on 15 th November 2015. TheNomination and Remuneration Committee comprises of following Directors:

Committee members Position in the committee
1 Mrs. Sona Parikh (non –executive Director) Chairman
2 Mr. Shankar Bhagat (Independent non-executive) Member
3 Mr. Amulbhai Patel (Independent non-executive) Member

EVALUATION PROCESS:

The Board of Directors of the Company has established a framework for the evaluation ofits own performance and that of its committees and individual Directors of the Company.The certain parameters covering the evaluation of the Chairman Executive Directors andIndependent Directors have been fixed by the Board on the basis of which the evaluation isbeing carried out on annual basis in terms of provisions of the Companies Act 2013.

KEY MANAGERIAL PERSONNEL:

The Board of Directors of the Company has designated following Director(s)/Official(s)of the Company as Key Managerial Personnel (KMP) of the Company in terms of provisions ofSection 203 of the Companies Act 2013 and Clause 49 of the Listing Agreement with theStock Exchanges:

1. Mr. Shrikant J Parikh Managing Director.

No Key Managerial Personnel (KMP) of the Company has resigned during the financial yearended 31March 2015.

DISCLOSURES UNDER COMPANIES (APPOINTMENT & REMUNERATION OF MANAGERIAL PERSONNEL)RULES 2014:

The information pursuant to Section 197 of the Act read with Rule 5 (1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 relating tomedian employee’s remuneration will be made available at the registered office of theCompany during working hours for a period of twenty-one (21) days before the date of themeeting i.e from 09th September 2015 till 29th September 2015.

PARTICULARS OF EMPLOYEES:

There are no employees in the Company who if employed throughout the financial yearwere in receipt of remuneration whose particulars if so employed are required to beincluded in the report of the Directors in accordance with the provisions of Rule 5 (2)and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014.

CORPORATE SOCIAL RESPONSIBILITY:

The company has not developed and implemented any Corporate Social Responsibilityinitiatives as the said provisions are not applicable for the period under review.

AUDIT COMMITTEE:

Pursuant to provisions of Section 177 of the Companies Act 2013 and clause 49 of theListing Agreement the Audit Committee shall have minimum three directors as member withIndependent Directors forming the majority. The Company has duly complied with the saidprovisions.

Following is the composition of Audit Committee:-

Name of the Member Designations
Mr. Shankar Bhagat Chairman & Independent
Non-Executive Director
Mr. Amulbhai Patel Member & Independent
Non -Executive Director
Mr. J. B. Parikh (Upto 09 th March 2015) Member & Promoter Director
Mr. Shrikant J Parikh Member and Executive Director

SUBSIDIARIES/JOINT VENTURES/ASSOCIATE COMPANIES:

The detail of financial performance of Subsidiary/ Joint Venture/Associate Company isfurnished in Annexure "B" and attached to this report.

DEPOSITS:

During the year under review the Company did not accept any deposits. The Company isin the process of transferring Unpaid Dividend amounting to Rs. 90888/- to the InvestorEducation and Protection Fund.

AUDITORS:

The Statutory Auditors M/s R H Modi & Company Chartered Accountants (FRN:106486W) had been appointed as Statutory Auditors of the Company in the 26 th AnnualGeneral Meeting held on 30 th September 2014 for a period of 5 (Five) years in terms ofprovisions of Section 139 of the Companies Act 2013 to hold office from the 26 th AGM tothe fifth consecutive Annual General Meeting from the 26 th AGM in the Calendar year 2019(subject to ratification by the members at every Annual General Meeting).

Therefore the consent of members for ratification of appointment of Statutory Auditorsto hold office from the ensuing Annual General Meeting of the Company till the next AnnualGeneral Meeting of the Company in calendar year 2016 is being sought in the ensuing AnnualGeneral Meeting.

REPORT ON FINANCIAL STATEMENTS

There are two (2) qualifications reservations or adverse remarks or disclaimers madeby M/s. R H MODI and Company Chartered Accountants Statutory Auditors in their report.The Statutory Auditors have not reported any incident of fraud to the Audit Committee ofthe Company in the year under review. The comments by the Management are given below.

DIRECTORS COMMENTS ON AUDITORS QUALIFICATION:

i) Attention is invited to Note No. 11 to the financial statement relating toinventories is a deviation from the method prescribed by Accounting Standard (AS) - 2‘ Valuation of Inventories’

(D. C.) "In respect of stock of polished diamonds cost is based on technicalestimate by the management to avoid distortion in valuation. In view of the nature ofvariation in the value of individual diamonds the differentials in their costs it is notpracticable to compute the cost of polished diamonds using either FIFO or weighted averagecost. In view of multiple grades it is not practicable to use specific cost. The basis ofcomputing cost used on consistent basis though in line with generally accepted industrypractice."

ii) Attention is invited to Note no. 31 to the financial statement relating to TradeReceivables amounting to Rs.5150734145/- and Loans and Advances receivable amountingto Rs. 4109826/- are outstanding for more than three years.

(D. C.) "The management classifies these debts fully recoverable and good andaccordingly does not consider it necessary to make any provision.’

iii) Attention to Note No. 26 to the financial statement relating to share of loss ofpartnership firm M/s RSBL Jewels excludes effect of exchange rate difference at theyearend as the Trade payable / Trade receivable are not been restated at the yearendexchange rate which is not as per AS-11.

(D. C.) "Regarding trade receivables in view of persistent defaults by overseascustomers in clearing outstanding dues it is deemed expedient not to take cognizance ofdelays depreciation of rupee vis--vis dollar and the same are still outstandingespecially as the outstanding amounts are expected to be realized in phased manner over anuncertain period of time or are doubtful of recovery. Likewise import payables outstandingas at the balance sheet date have not been restated at the rates of exchange prevailing atthe date of the Balance Sheet as the same are expected to be paid off out of realizationsfrom export receivables."

iv) Attention to Note No. 27 to the financial statement Gratuity and leave encashmentis accounted on cash basis which is not as per AS-15 Employee Benefits.

(D. C.) "In view of few employees the management is of the view that it will beaccounted and paid on cash basis as an when liability arises"

SECRETARIAL AUDIT:

The Board has appointed M/s HS Associates Practicing Company Secretaries asSecretarial Auditor for the Financial Year 2014-15 in terms of provisions of Section 204of the Companies Act 2013. The Secretarial Audit Report of the Company for the financialyear ended 31March 2015 in the prescribed form MR-3 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is enclosed as Annexure -"D"to this report.

DIRECTORS COMMENTS ON AUDITORS QUALIFICATION:

i) The company has not appointed Company Secretary as required under section 203 readwith rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 and thus the Financial statements have not been authenticated by a whole time CompanySecretary under Section 203 of the Companies Act 2013.

ii) Internal Auditor for the Financial Year 2014 – 2015 as required under section138 Companies Act 2013 was not appointed.

(D. C.) for i & ii

"In view of the Carried Forward Losses the Company Could not find a suitablecandidate as Company Secretary and due to meager operations of the Company the Company wasnot in a position to appoint an Internal Auditor and also the Board is of the opinion thatthe internal Control of the Company are commensurate with the size of itsoperations."

iii) The Company has not opted for e-voting Facility with neither of the twoDepositories. (D. C.) "The Company is in the process of obtaining registration withCDSL for e-voting facility." iv) The website of the Company has not been updated asper the Companies Act 2013. (D. C.) "The Company is in the process of updating itswebsite."

v) The company has not obtained prior approval for related party transaction of Rentpaid to Minal Plastic Products.

(D. C.) "The Company would be obtaining approval of the members at the forthcomingAnnual General Meeting."

vi) The amount of Rs. 90888/- which was required to be transferred to the InvestorEducation and Protection Fund in accordance with the relevant provisions of the CompaniesAct 1956 (1 of 1956) and the rules made thereunder had not been transferred to the IEPF.

(D. C.) "The Company is in the process of transferring the same to IEPF."

vii) In the Absence of CFO the Company has authenticated the CEO/ CFO Certification asrequired by Corporate Governance by CEO.

(D. C.) "Due to weak financial operations the Company is not in a position toappoint a CFO."

viii) The Company has not Filed Return of Foreign Liabilities and Assets as requiredunder FEMA Regulations.

ix) The Company has not submitted the disclosures as required to be submitted under theRegulation 30 of Securities And Exchange Board Of India (Substantial Acquisition Of SharesAnd Takeovers) Regulations 2011.

(D. C.) for viii & ix

"The Company is in the process of complying with the Regulations of FEMA and SEBI(SAST) Regulations."

x) The Company has given loans to group concerns falling within the purview of Section185 of the Companies Act 2013:

(D. C.) As an urgent necessity of funds the company had given loans to AssociateCompany.

COST AUDIT:

In pursuant to Companies (Cost Records and Audit) Amendment Rules 2014 notified by theMinistry of Corporate Affairs (MCA) on 31 December 2014 the Company shall not bemandatorily required to get its Cost Records for the financial year 2014-15 and 2015-2016audited in terms of provisions of Section 148 of the Companies Act 2013 as the Industryunder which the Company falls has been exempted from the Cost Audit by MCA vide Companies(Cost Records and Audit) Amendment Rules 2014. Therefore the audit of cost records forthe financial year ended on 31 March 2015 has not been undertaken in terms of theCompanies (Cost Records and Audit) Amendment Rules 2014.

INTERNAL AUDITORS:

Due to weak Financial of the company has not appointed internal auditors as requiredunder Section 138 of the Companies Act 2013.

INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY:

Minal Industries Limited has a proper and adequate system of internal financialcontrols which includes the policies and procedures for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation.

WHISTLE BLOWER POLICY/ VIGIL MECHANISM:

In terms of provisions of Section 177 of the Companies Act 2013 the Company hasestablished an effective mechanism called Vigil Mechanism (Whistle Blower Mechanism). Themechanism under the Policy has been appropriately communicated within the organization.The purpose of this policy is to provide a framework to promote responsible whistleblowing by employees. It protects employees wishing to raise a concern about seriousirregularities unethical behavior actual or suspected fraud within the Company byreporting the same to the Audit Committee.

Protected disclosure can be made by the whistle blower in a closed and secured envelopeor send through e-mail to the Compliance Officer. During the year under review noemployee was denied access to the Audit Committee.

RECONCILIATION OF SHARE CAPITAL AUDIT:

As per the directive of the Securities and Exchange Board of India (SEBI) theReconciliation of Share Capital Audit is undertaken by a firm of Practicing CompanySecretaries on quarterly basis. The audit is aimed at reconciliation of total shares heldin CDSL NSDL and in physical form with the admitted issued and listed capital of theCompany. The Reconciliation of Share Capital Audit Reports as submitted by the Auditor onquarterly basis was forwarded to the BSE Limited Mumbai where the original shares of theCompany are listed.

LISTING OF SHARES:

The Equity Shares of the Company are listed on the:

1. Bombay Stock Exchange Limited (BSE).

2. Ahmedabad Stock Exchange Limited (ASE).

3. Vadodara Stock Exchange Limited. (VSE).

DISCLOSURES UNDER SECTION 134 OF THE COMPANIES ACT 2013:

Except as disclosed elsewhere in the Annual Report there have been no material changesand commitments which can affect the financial position of the Company between the end offinancial year and the date of this report.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS & OUTGO:

The information in accordance with the provisions of Section 134(3) (m) of theCompanies Act 2013 read with the Rule 8 of the Companies (Accounts) Rules 2014 is givenin Annexure A to this Report.

EXTRACT OF ANNUAL RETURN:

In terms of provisions of Section 92(3) of the Companies Act 2013 read with Rule 12 ofthe Companies (Management and Administration) Rules 2014 the extract of the AnnualReturn of the Company in Form MGT-9 of the Companies (Management and Administration)Rules 2014 is enclosed as Annexure E to this report.

COURT/TRIBUNAL ORDERS:

There were no instances of any significant and material orders passed by the regulatorsor courts or tribunals impacting the going concern status and company's operations infuture.

INDUSTRIAL RELATIONS:

During the year under review industrial relations in the Company continued to becordial and peaceful.

MANAGEMENT DISCUSSION AND ANALYSIS:

A detailed analysis of the Company's operations in terms of performance in marketsmanufacturing activities business outlook risks and concerns forms part of theManagement Discussion and Analysis a separate section of this report.

DIRECTORS'RESPONSIBILITY STATEMENT:

Pursuant to Section 134(3) (c) of the Companies Act 2013 your Directors confirmthat:-

(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(b) the directors had 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 at 31 March 2015 and of the profitand loss of the Company for the period ended on that date;

(c) the directors had 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 directors had prepared the annual accounts on a going concern basis;

(e) the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and

(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

RELATED PARTY CONTRACTS AND ARRANGEMENTS:

The particulars of the undergoing contracts or arrangements of the Company with relatedparties during the period under review referred to in Section 188(1) of the Company Act2013 were in ordinary course of business and on arm's length basis. During the year theCompany had not entered into any contract/ arrangement/ transaction with related partieswhich could be considered material in accordance with the related party transaction policyof the Company. The prescribed form AOC-2 of the Companies (Accounts) Rules 2014 isenclosed as Annexure C to this report.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENT:

The particulars of Loans guarantees or investments made under Section 186 are notgiven separately in this report as the same has been given in the Financial Statement.

RISK MANAGEMENT POLICY

The Board has adopted the Risk Management Policy based on the recommendation of theRisk Management Committee in order to assess monitor and manage risk throughout theCompany.

Risk is an integral part of the Company's business and sound risk management iscritical to the success of the organization.

Detailed information on risk management is provided in the Management Discussion andAnalysis Report.

CORPORATE GOVERNANCE

The Board is pleased to inform that the Company has complied with the mandatoryrequirements as applicable to the company of the Corporate Governance as detailed inClause 49 of the Listing Agreement.

A separate statement on Management Discussion and Analysis and Corporate Governance isenclosed as a part of the Annual Report along with the certificate of the Auditors M/s. HS Associates Practising Company Secretaries confirming compliance of the code ofCorporate Governance.

ACKNOWLEDGEMENTS

Your Directors take this opportunity to express their gratitude for the assistance andcontinued cooperation extended by Banks Government authorities clients and suppliers.The Directors are pleased to record their sincere appreciation for the devotion and senseof commitment shown by the employees at all levels and acknowledges their contributiontowards sustained progress and performance of your Company.

By Order of the Board
For MINAL INDUSTRIES LIMITED
SHRIKANT J PARIKH
(CHAIRMAN)
(DIN 00112642)
DATE: 14 th August 2015.
PLACE: MUMBAI.