The Members Radha Madhav Corporation Limited
The Directors have pleasure in presenting the Twelfth Annual Report together with theAudited Accounts for the accounting year ended on 31st March 2016.
| ||(31.03.2016) ||(31.03.2015) |
| ||Rs. In million ||Rs. In million |
|Net Revenue from operation and other Income ||2357.44 ||1126.78 |
|Profit (Loss) before Finance cost & Depreciation ||131.41 ||61.62 |
|Less: Finance cost ||0.00 ||0.12 |
|Less: Depreciation & amortization ||16.51 ||18.27 |
|Profit After Depreciation & before Exceptional Items &Tax ||114.90 ||43.23 |
|Less: Exceptional Items -Expenses/(Income) ||(16.03) ||(1077.79) |
|Less: Provision of Tax of earlier year and wealth Tax ||0.83 ||(62.50) |
|Profit /(Loss) after tax ||130.10 ||1183.52 |
Net revenue from operations have risen to 2357.44 million versus 1126.78 million in theprevious year. This growth is approximately 210% and predominately due to growth of RMCLUniverse format. However Management sees a downward growth in the coming year due toworking capital constraints.
Operating Profits have risen from 61.62 million to 131.41 million in the same year dueto increased business.
STATE OF AFFAIRS OF THE COMPANY
The Total Income of the company for the financial year under review has been increasedfrom Rs. 1126.78 millions in FY 2014-15 to Rs. 2357.44 millions in FY 2015-16.
The Profit / (Loss) After Tax for the financial year under review was Rs. 1183.52millions.
No Dividend was declared for the current financial year.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
Since there was no unpaid/unclaimed Dividend declared and paid the provisions ofSection 125 of the Companies Act 2013 do not apply to the Company.
PARTICULARS OF CHANGE IN BUSINESS
There is no change in the Business operations of the Company.
During the Company has not availed credit facilities from any banks and financeinstitutions the performance of the last three years has led to significance liquiditypressure in the long term sources.
All the properties of your Company including Factory Building Plant & Machinerystock etc. are adequately insured.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
During the financial year 2015-16 the Board of Directors of the Company met (Nine Times) times. The details of which are given in the Corporate Governance Report thatforms part of this Annual Report. The intervening gap between the Meetings was within theperiod prescribed under the Companies Act 2013 and the Listing Agreement.
DECLARATION BY INDEPENDENT DIRECTOR(S) AND RE-APPOINTMENT IF ANY
All the Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves to be appointed as Independent Directors under the provisions ofthe Companies Act 2013 and the relevant rules.
NOMINATION AND REMUNERATION POLICY OF DIRECTORS KEY MANAGERIAL PERSONNEL AND OTHEREMPLOYEES DIRECTORS.
In adherence of section 178(1) of the Companies Act 2013 the Board of Directors ofthe Company approved a policy on directors appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a directorand other matters provided u/s 178(3) based on the recommendations of the Nomination andRemuneration Committee. The broad parameters covered under the Policy are CompanyPhilosophy Guiding Principles Nomination of Directors Remuneration of DirectorsNomination and Remuneration of the Key Managerial Personnel (other than Managing /Whole-time Directors) Key-Executives and Senior Management and the Remuneration of OtherEmployees.
EXTRACT OF THE ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT 9 as perprovisions of Companies Act 2013 and rules thereto is annexed to this report [Annexure-A]
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
During the financial year ended 31st March 2016 Neither the Company has not availedany Loan nor has given any Loan Guarantees and Investment in accordance with section 186of the Companies Act 2013
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
There have been no materially significant related party transactions between theCompany and the Directors the management or the relatives except for those disclosed inthe financial statements. Accordingly particulars of contracts or arrangements withrelated parties referred to in Section 188(1) along with the justification for enteringinto such contract or arrangement in Form AOC-2 does not form part of the report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company's vision is to be a global benchmark in value creation and corporatecitizenship and the Companys long-term Corporate Social Responsibility (CSR)objective is to improve the quality of life of the communities through long-term valuecreation for all stakeholders. The Company has been a pioneer in various CSR initiatives.We continue to remain focused on improving the quality of life and engaging communitiesthrough health education sports and infrastructure development.
PARTICULARS OF EMPLOYEES
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 the said information is available for inspection atRegistered Office of the Company during working hours. Any member interested in obtainingsuch information may write to the Company Secretary at the registered office and the samewill be furnished on request.
The Central Government has not prescribed the maintenance of Cost Records Under Section148 (1) of the Companies Act 2003 in respect of the Companys products.
In accordance with the requirements of the provision of the Companies Act 2013 MiteshAgarwal and Mr. Abhishek Agarwal will retire by rotation and being eligible have offeredthemselves for re-appointment.
DISCLOSURE ABOUT RECEIPT OF ANY COMMISSION BY DIRECTOR FROM A COMPANY
None of the Directors of the Company are receiving any Commission from the Companyhence the requirement of disclosure is not applicable.
AUDITORS AND AUDITORS REPORT: STATUTORY AUDITORS
Statutory Auditors M/s. H. P. Shah Associates (Firm Registration No 109588W)Chartered Accountants Vapi hold office till the conclusion of ensuing Annual GeneralMeeting and being eligible; offer themselves for re-appointment to hold the office tillthe conclusion of next Annual General Meeting are recommended for re-appointment. Thecertificate from the Auditors have been received to the effect that their re-appointmentif made would be within the prescribed limit under section 141 of the Companies Act2013.
The Auditors have confirmed that they have subjected themselves to the peer reviewprocess of the institute of Chartered Accountants of India (ICAI) and holds a validcertificate issued by the Peer Review Board of the ICAI."
As to Auditors Qualifications is self-explanatory in their report.
MANAGEMENT COMMENTS AS TO THE AUDITORS' QUALIFICATIONS ARE AS FOLLOWS;
MANAGEMENTS COMMENTS FOR THE OPINION POINT NO. (a) (Outstanding balance) FORMINGPART OF AUDITORS' REPORT;
Company has started dedicated credit control & recovery department headed by aqualified legal expert and has also started serving notices to the defaulting parties. TheCompany is in process of recovering and has been partially successful. It is confident torecover substantial amount in reasonable time.
MANAGEMENTS COMMENTS FOR THE OPINION POINT NO. (b) (Interest payable) FORMINGPART OF AUDITORS' REPORT;
The company has not provided interest and also reversed provided interest on creditfacilities granted by State Bank of India/AARC and Bank of Baroda due to ongoingSettlement process and due to the fact that interest on Substandard Assets are not chargedby the Lenders.
MANAGEMENTS COMMENTS FOR THE EMPHASIS MATTERS POINT NO. (a) (going on concern)FORMING PART OF AUDITORS' REPORT
As per the view of management there is no uncertainties about continues operation ofthe Company in foreseeable future on account of following measures taken by the Company.
1. The Company has begun Online E-Commerce business which is already profitable.
2. The Company has also made profit during the year ended 31.03.2016.
3. The Management has induced long-term capital in the company on various occasions andshall thrive to do so in future.
4. The Management is also planning gradually to modify its business plan by appointingfranchise there by reducing working capital intensive dependence.
5. The Company would be able to continue its operation in the foreseeable futurethrough various restructuring and deleveraging measures.
6. Company is in retail business which is inherently slow start business. Effortsneeded to break- even generally takes initial few years. Company is satisfied on its ownperformance and shall thrive to do better in future.
MANAGEMENTS COMMENTS FOR THE EMPHASIS MATTERS POINT NO. (b & d) (physicalverification of inventory) FORMING PART OF AUDITORS' REPORT;
Since company has more than 75 Depots and more than 4500 Franchised shops it is notpractical to verify the stocks physically. Company relies on its portal and Depotstaff/Franchise Staff for physical verification of inventory discrepancy if any has beenaccounted for in the books.
MANAGEMENTS COMMENTS FOR THE EMPHASIS MATTERS POINT NO. (c) (internal financialcontrol ) FORMING PART OF AUDITORS' REPORT;
Company is in process of setting up qualified staff to adhere to internal financialcontrol and strengthen the same.
MANAGEMENTS COMMENTS FOR THE SUB SECTION (a) OF POINT NO.7 STATUTORY DUES &POINT NO. 9. REPAYMENT OF DUES OF FINANCIAL INSTITUTIONS FORMING PART OF ANNEXURES OF THEAUDITORS' REPORT;
The Company was suffering heavy losses during past few years and it net worth was alsonegative so the Company could not pay up.
MANAGEMENTS COMMENTS FOR THE SUB SECTION (b) OF POINT NO.7 STATUTORY DUESFORMING PART OF ANNEXURES OF THE AUDITORS' REPORT;
The Company has represented its case to appropriate authorities. It is of the opinionthat no such dues shall materialize and hence it has not paid/provided the same.
Company has booked a gain of INR 980.45 on settlement of Secured loans on the basis ofnegotiations of the debt at INR 450 Million. Companies in advance process of drafting therestructuring proposal with Alchemist Asset Reconstruction Company Ltd.
Section 204 of the Companies Act 2013 inter-alia requires every listed company toannex with its Boards report a Secretarial Audit Report given by a CompanySecretary in practice in the prescribed form. The Board of Directors appointed M/s. VipulBhede Practicing Company Secretary as Secretarial Auditor to conduct Secretarial Audit ofthe Company for Financial Year 2015-16 and their report is annexed to this Board report[Annexure-B]. There are no qualifications reservations or adverse remarks made bySecretarial Auditors in their Report.
The Board of Directors constituted an Audit Committee as per the existing clause 49 ofthe Listing Agreements entered into with Stock Exchanges and in terms of Section 177 ofthe Companies Act 2013. The details of which are given in the Corporate Governance Reportthat forms part of this Annual Report. The intervening gap between the Meetings was withinthe period prescribed under the Companies Act 2013 and the Listing Agreement.
DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has zero tolerance towards sexual harassment at the workplace and hasadopted a policy on prevention prohibition and redressal of sexual harassment atworkplace in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the Rules there under.
The Vigil Mechanism of the Company which also incorporates a whistle blower policy interms of the Listing Agreement includes an Ethics & Compliance Task Force comprisingsenior executives of the Company. Protected disclosures can be made by a whistle blowerthrough an e-mail or dedicated telephone line or a letter to the CFO or to the Chairmanof the Audit Committee.
STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THECOMPANY
The Company does not have any Risk Management Policy as the elements of riskthreatening the Companys existence are very minimal.
INTERNAL FINANCIAL CONTROLS
The Company has an internal control system commensurate with the size scale andcomplexity of its operations. The Internal Audit function reports to the Chairman of theAudit Committee of the Board. The Internal Audit Department monitors and evaluates theefficacy and adequacy of internal control systems in the Company its compliance withoperating systems accounting procedures and policies at all locations of the Company andits subsidiaries. Based on the report of internal audit function process owners undertakecorrective action in their respective areas and thereby strengthen the controls. Duringthe year such controls were tested and no reportable material weakness in the design oroperation were observed.
DIRECTORS RESPONSIBILITY STATEMENT:
Based on the framework of internal financial controls established and maintained by theCompany work performed by the internal statutory cost and secretarial auditors andexternal agencies the reviews performed by Management and the relevant Board Committeesthe Board with the concurrence of the Audit Committee is of the opinion that theCompanys internal financial controls were adequate and effective as on 31 March2016. Accordingly pursuant to Section 134(5) of the Companies Act 2013 the Board ofDirectors to the best of their knowledge and ability confirm: a) That in the preparationof the annual accounts the applicable accounting standards have been followed along withproper explanation relating to material departures; b) That we have selected suchaccounting policies and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company at the end of the financial year and of the profit and loss of the Company forthat period; c) That proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
d) That the annual accounts have been prepared on a going concern basis;
e) That proper systems to ensure compliance with the provisions of all applicable lawswere in place and that such systems were adequate and operating effectively;
f ) That proper internal financial controls were laid down and that such internalfinancial controls are adequate and were operating effectively.
During the year the Company has not accepted any deposits under the Companies Act2013.
Corporate Governance is a set of principles processes and systems which govern acompany. The elements of Corporate Governance are independence transparentaccountability responsibility compliance ethics values and trust. Corporate Governanceenables an organization to perform efficiently and ethically generate long term wealth andcreate value for all its stakeholders. The Company believes that sound CorporateGovernance is critical for enhancing and retaining investor trust and your Company alwaysseeks to ensure that its performance goals are met with integrity. The Company hasestablished systems and procedures to ensure that its Board of Directors is well informedand well equipped to fulfill its overall responsibilities and to provide management withthe strategic direction needed to create long term shareholders value. The Company hasalways worked towards building trust with shareholders employees customers suppliersand other stakeholders based on the principles of good corporate.
A Separate section on Corporate Governance Management discussion and Analysis and aCertificate from Companys Auditors regarding compliance of the conditions of thecorporate governance as stipulated under clause 49 of the Listing Agreements with theStock Exchanges forms part of this Annual Report.
Certificate of CEO inter alia confirming the correctness of the financial statementsadequacy of the internal measures and reporting of matters to the audit committee in termsof the clause 49 of the listing agreements with Stock Exchanges is also attached as apart of this Annual Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE
There have been no significant and material orders passed by the regulators or courtsor tribunals impacting the going concern status and Companys operations. Howevermembers' attention is drawn to the note on Going Concern Statement on ContingentLiabilities and Commitments in the notes forming part of the Financial Statements.
CONSERVATION OF ENERGY:
| ||31.03.2016 ||31.3.2015 |
|(1) Electricity || || |
|Purchased units (no.) ||1027221 ||1447882 |
|Total Amount (Rs in million) ||10.86 ||12.60 |
|Rate per Unit (Rs.) ||10.58 ||8.70 |
|(2) Own Generator || || |
|Fuel (Diesel) (Ltr) ||Nil ||Nil |
|Total Amount (Rs in million) ||Nil ||Nil |
|Rate Per Litter (Rs.) ||Nil ||Nil |
|Furnace Oil ||Nil ||Nil |
|Total Amount (Rs in million) ||Nil ||Nil |
|Rate Per Litter (Rs.) ||Nil ||Nil |
The technology required for the industry is available indigenously.
FOREIGN EXCHANGE EARNING & OUTGO (ON ACCRUAL BASIS):
| ||31.03.2016 ||31.3.2015 |
|Earning ||Nil ||Nil |
|Outgo ||Nil ||Nil |
The Directors take this opportunity to express their appreciation for continuedco-operation and assistance extended by Investors Government Authorities BankersSuppliers and Customers. Your Directors look forward to their continued support. Last butnot the least; your Directors also sincerely acknowledge the significant contributionsmade by the devoted workers staff and executives for their dedicated services to theCompany.
| ||For and on Behalf of the Board |
| ||sd/- |
|Place: Daman ||Mitesh Agarwal |
|Dated :05.09.2016 ||MD &CEO |