Your Directors have pleasure in presenting twenty-third Annual Report on the businessand operations of the Company together with the audited Statement of Accounts for the yearended 31st March 2015.
Your company could not restart manufacturing activity of mushroom cultivation due toshortage of electricity. Management could not take up the idea of mushroom cultivation inthe hills of Nilgiries as it was contemplating upon as the prefeasibility studiesindicated a need for first establishing pilot operations before venturing in shifting theproject location. Further due to continued losses of the existing unit unavailability ofadequate staff and absence of regular revenues the cash crunch became main obstacle to goahead undeterred on this thinking. Even though company has expertise in successfulhandling of mushroom business in the new scenario of increased costs and inadequateresources this idea remained on paper.
Even in absence of any production activity and with a disconnected electricity supplycompany depended on generators to provide electricity for lighting during night requiredbasically for security of the premises. The same arrangement continues to date. Yourcompany sold spent compost to generate income but this was highly inadequate to meet thenegligible expenses on account of cost of diesel for operating generators for nightlighting salary of security guards salary & wages statutory compliance basicminimum repairs and other expenses on account of professional fees etc.
The need to shift the unit to hilly area was finalized and the Resolution pursuant toSection 192A of the companies Act 1956 was passed on 1.11.2013. However as on date theunit is still not yet shifted to Hills as management has not found a serious buyer forthe purchase of Assets at prevailing rates. All the machinery and other infrastructurehave already lived their life and further have been badly deteriorated as no maintenancecare could be provided to during last more than 4 years.
The mushroom growing process is biological and continuous in nature and it needs asupportive climate. Your company has expertise to produces fresh button mushrooms roundthe year. Company has no turn over from Fresh Mushrooms and during the year under reviewthere was a nominal turnover of Rs. 6.22 lacs on account of sales of spent compost.Company made use of its spent compost which is end residue of the mushroom growing processto generate small revenue.
The summary of the financial results for the year ending 31st March 2015 is presentedhere in below.
|Particulars ||Amount As on 31.03.15 ||Amount As on 31.03.14 |
| ||(in Rs. Lakhs) ||(in Rs. Lakhs) |
|Gross Turnover & Other Income ||20.10 ||21.66 |
|Profit/(Loss) before Depreciation ||(11.17) ||(25.95) |
|Depreciation ||39.83 ||49.32 |
|Profit/(Loss) before Tax ||(51.00) ||(75.27) |
|Provision for Taxation ||0 ||0 |
|Net profit / (Loss) for the period ||(51.00) ||(75.27) |
|Balance B/F ||(2843.64) ||(2768.37) |
|Adjustment of Depreciation ||3.45 ||0 |
|Profit/(Loss) Balance C/F ||(2891.19) ||(2843.64) |
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACIES
The company has adequate system of internal controls to ensure that all assets aresafeguard transactions are authorized optimum utilization of resources and costs arecontrolled and reporting of financial transactions and compliance with applicable law andregulations. The Company has suitable internal control system commensurate with the sizeof the Company and nature of its business.
LIKELY DEVELOPMENTS IN HR / INDUSTRIAL RELATIONS
Company has not recruited employees during the year. In absence of any regular activitythey would have been idle and wasted. As the alternate site is not yet finalized and assuch there is no need of employees.
As per the requirement of Section 177 of the Companies Act 2013 and clause 49 of theListing Agreement entered with the Stock Exchanges your Company has constituted an AuditCommittee
As per the provisions of the Companies Act 2013 Mr. Arvind Kalra who is NonExecutive Director retire by rotation at the ensuing Annual General Meeting and iseligible for re-appointment.
As per clause No.120 of Article of Association of the company and Section 161(2) ofcompanies Act 2013 Mr. B. Rose Advocate is appointed as Alternate director for Chairmanin the meeting of the board of directors held on 13.11.2015. He holds the office up tillthe conclusion of 23rd Annual General Meeting.
All independent directors have given declarations that they meet the criteria ofindependent directors as provided in the Section 149(6) of companys Act 2013.
Mr. Sudhir Singhi C.A. Independent Director has resigned (w.e.f. 23.07.2014) boardappreciates his contributions of valuable services rendered by him during his tenure.
As per the provisions of section 149 of the companies Act 2013 the amended Clause 49of the Listing Agreement the members of the company had at the AGM held on 29.09.2014re-appointed the independent directors as mentioned below: he is not to retire by rotation
|Name of Independent Director ||Date of Appointment ||Period of appointment |
|Dr. R. P.Tewari ||28.06.1994 ||Up to the conclusion of 27th Annual General Meeting |
As per the provisions of section 149 and Section 161 and other provisions applicable asper companies Act 2013 the appointment of Mr. D.K. Yadav and Miss Seema Saini asindependent Director and Independent woman director respectively in the 23rd AGM to beheld on 28th September 2015 the details of their appointment and other Independentdirectors appointment and tenure are given below . These directors are not to retire byrotation.
|Name of Independent Director ||Date of Appointment ||Period of appointment |
|Mr. D.K.Yadav ||30.09.2014 ||Up to the conclusion of 28th Annual General Meeting |
|Miss Seema Saini ||30.03.2015 ||Up to the conclusion of 28th Annual General Meeting |
In view of huge accumulated losses your Directors are not in a position to recommendany dividend this year
During the year your Company has neither invited nor accepted deposits from thepublic. in terms of the provisions of sections 73 to 76 of the Companies Act 2013 readwith the companies acceptance of deposit rules 2014.
M/s. K. Mahaveer & Co. Chartered Accountants (Firm Registration No. 006740S) hasconfirmed their eligibility and willingness to accept office if ratification is made byshareholders in the Annual General Meeting. The share holders of the company are requestedto approve their appointment as Statutory Auditors of the company and authorize the Boardof Directors to fix their remuneration.
The Board of Directors of the company has appointed Mr. ShashiKant Mishra (CharteredAccountant) as an Internal Auditor Pursuant to provisions of section 138 of the companiesAct 2013 for the Financial Year 2015-2016.
The Board of Directors of the company has appointed Ms. Manisha Singhal PractisingCompany Secretary (CP. No. 11424) as Secretarial Auditor pursuant to provisions of section204 of the companies Act 2013 for the Financial Year 2015-2016.
SECRETARIAL AUDITORS REPORT:
A Secretarial Audit Report given by Ms. Manisha Singhal Practicing Company Secretaryis being annexed in MR 3 Form. There is no qualification reservation or adverse remark ordisclaimer made by the Company Secretary in Practice in the Secretarial Audit Report.
STATUTORY AUDITORS REPORT:
Observations made in the Auditors Report are self-explanatory except few pointswhich have been explained in Clause (E) to Annexure to the directors report.
COMPANYS POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION:
The Nomination & Remuneration Committee has been constituted as per therequirements of companies Act 2013 which shall formulate the policy for appointment ofDirectors and Remuneration including criteria for determining qualification positiveattributes independence of a director and other matters as provided under section 178(3)of the companies Act 2013.
As per the requirement of Companies Act 2013 a stakeholder relationship committee hasbeen constituted.
The company aims to conduct its affairs in an ethical manner. A certificate from theCompanys Auditors regarding the compliance of conditions of corporate Governance asstipulated under clause 49 is also annexed with the report.
LISTING OF SHARES & SEBI REGULATION:
The Equity shares of the company are listed on The Stock Exchange Mumbai.
DIRECTORS RESPONSIBILITY STATEMENT:
In accordance with the provisions of Section 134 clause (C) of sub-section 3 of theCompanies Act 2013 your directors state;
a. that in the preparation of the annual accounts the applicable accounting standardshad been followed along with proper explanation relating to material departures;
b. that the directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit of the company for that period;
c. that the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;
d. that the accounts have been prepared the annual accounts on a going concern basis.
MANAGEMENT DISCUSSION & ANALYSIS
Management analysis and review report mention in Corporate Governance report.
PARTICULARS OF EMPLOYEES:
No employee is in receipt of remuneration in excess of limits prescribed under section134 of the Companies Act 2013.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION EXPORTS AND FOREIGN EXCHANGE EARNINGSAND OUTGO:
Information relating to conservation of energy technology absorption and foreignexchange earnings and outgo required under Section 134 of the Companies Act 2013 readwith the Companies (Disclosure of particulars in the Report of Board of Directors) Rules1988 is annexed and forms a part of this report.
Management Discussion and Analysis forming part of this Report is in compliance withCorporate Governance Standards incorporated in the listing agreement with stock Exchangesand such statements may be "forward-looking" within the meaning of applicablesecurities laws and regulations. Actual results could differ materially from thoseexpressed or implied. Important factors that could make a difference to the companysoperations include economic conditions in the domestic and overseas markets on whichcompanys performance is dependant. It may be materially influenced by changes in theGovernment regulations tax laws other statutes and other incidental factors on whichcompany may have no control.
Your Directors place on record their appreciation for the continued co-operationextended by its Bankers Shareholders and employees of the Company.
| ||BY ORDER OF THE BOARD || || |
| ||for SAPTARISHI AGRO INDUSTRIES LIMITED || || |
| ||sd/- ||sd/- ||sd/- |
|Place: Chennai ||B.Rose ||Arvind Kalra ||D.K.Yadav |
|Date: 29.05.2015 ||Alternate Director for Chairman ||Director ||Director |
ANNEXURE TO THE DIRECTORS REPORT
INFORMATION REGARDING CONSERVATION OF ENERGY TECHNOLOGY ABSORBTION EXPORTS ANDFOREIGN EXCHANGE EARNINGS AND OUT GO.
A. CONSERVATION OF ENERGY:
a) During the period under review there was no production of Mushrooms however companywas cautious in conservation of energy as Companys commitment towards energyconservation continued on high priority basis. Company wants to reduce the consumption ofelectricity by adopting evolving technologies to adapt the present available electricityto its previous level of mushroom production.
b) Total Energy Consumption per unit of production Details furnished in Annexureherewith Form A
B. TECHNOLOGY ABSORPTION: Efforts made in technology absorption
Details furnished herewith Form B
C. FOREIGN EXCHANGE EARNINGS AND OUT GO:
a) Activities relating to exports: There has been no export during the financial year2014-2015. At present Company is concentrating on Domestic market.
b) Development of export market for products and services.
As company could not restart production activity so company is not considering anypossibility of venturing into export of mushroom. However Company is exploring inpossibility of utilizing its spent compost as enriched organic garden manure.
D. TOTAL FOREIGN EXCHANGE USED AND EARNED:
E. ADDENDUM TO DIRECTORS REPORT
EXPLANATION TO POINT NO. (a) of the Auditors report basis of qualified opinion (Note23 (2)(b)): Company has made a proper representation to the Tamil Nadu pollutioncontrol board to withdraw this demand as the production activity is halted since February2011 and there is no fresh demand raised by the department.
EXPLANATION TOPOINTNO.(b)oftheAuditorsreportbasisofqualifiedopinion (Note 23 (2)
(c)): Although the receivables are subject to confirmation management is confidentof recovery of the same.
EXPLANATION TO POINT NO. (c) of the Auditors report basis of Annexure toIndependent Auditors Report (Note 23(2) (d)): Though more than 50% of the net worth of thecompany has been eroded and the company has been incurring cash losses continuouslycompany has prepared its financial statements on a going concern assumption. Also due tothe continued shortage of electricity in the state company did not have any activity ofmushroom production even during the year ended 31.03.2015. Such issues as power shortageand suspension of manufacturing are not permanent events and management is confident ofchange in the situation hence the accounts have being prepared on a going concernassumption.
EXPLANATION TO POINT NO. (d) of the Auditors report basis of qualified opinion:Company has not recruited employees in place of the relieved ones since management is ofthe opinion that in absence of any regular activity they will be idle and wasted.Management wants to give sufficient time and watch the development of suitable atmospherewith regard to restart of its operations.
EXPLANATION TO POINT NO. 7 qualified opinion of the Auditors report Other matter (d):
Although some of the items in the inventories of the company as on 31.03.2015 as quiteold but most of items are still having useful life however there may be smalldiminishment in the value of some items. The amount of diminishment of value could not beascertained.
EXPLANATION TO POINT NO 9(e)- Report on legal and regulatory requirements as requiredby section 143(3) of the Act of the Auditors report (Note 23 (2)(e)): As per theprovisions of Sec. 167 (1) (b) of Companies Act 2013 office of Managing Director has gotautomatic vacation on account of no attendance of Mr. Dilsher Singh Managing directors inany board meeting during the year ended 31.03.2015 Reference to the same is noted inCorporate Governance Report.
EXPLANATION TO POINT NO 9(f)(1)- Report on legal and regulatory requirements asrequired by section 143(3) of the Act of the Auditors report (Note 23 (2)(a)) One ofthe creditors has filed a case: of outstanding amount of Rs. 238110/- and interest @ 24%p.a.for printed plastic covers who supplied printed plastic covers to the company as percompany payable is Rs. 78316/- . The suit is contested by company and last hearing washeld in July 2014.
Another creditors has filed a case of outstanding amount of Rs. 52703/- and interest @24% p.a. for printed plastic covers who supplied LLDPE bags to company as per companypayable is Rs. 26018/- . The suit is contested by company and waiting for the hearing.
Company has won a case against a debtor Ms. Poornima Shetty Proprietor of M/s HeavenlyMushrooms Bangalore. Company is in the process of filing an execution petition forrecovery of Rs.1418350/-
An Ex- Employee of the company who was retrenched with compensation as per I.D. Act.has raised a dispute I.D. No. 906/2014 dated 22.07.2014 at the office of Assistant LabourCommissioner Sriperumbudur Irrangattukotta Kanchipuram for revision of compensation.
Other 2 cases by creditors are not heard for last more than 10 years and are consideredas time barred. And amount involved could not be ascertained.
EXPLANATION TO POINT NO. (x)(a) of Annexure to Independent Auditors Report: Theompany has deposited the provident fund dues up to date and the Company is regular indepositing the provident fund payment except delay in depositing on few occasions.
FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY
|PARTICULARS ||For The Year Ended 31.03.2015 ||For The Year Ended 31.03.2014 |
| ||Rs. ||Rs. |
|A. POWER & FUEL CONSUMPTION || || |
|a. Purchased || || |
|Electricity Unit ||Nil ||Nil |
|Total Amount Rs. ||N.A. ||N.A. |
|Rate/Unit Rs. ||N.A ||N.A |
|b. Captive Power Generation || || |
|Electricity Unit ||21285 ||37122 |
|Total Amount Rs. ||425541 ||687710 |
|Rate/Unit Rs. ||19.99 ||18.52 |
|c. Furnace Oil || || |
|Quantity KL ||NIL ||NIL |
|Total Amount Rs. ||NIL ||NIL |
|Avg. Rate KL Rs. ||NIL ||NIL |
B. CONSUMPTION PER KG OF PRODUCTION
|Mushrooms ||No production ||No production |
|ElectricityUnit ||N.A. ||N.A. |
|Furnace Oil Ltrs ||N.A. ||N.A. |
FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO ABSORPTION ESERCH AND DEVELOPMENT(R & D)
1. Specific areas in which R & D was carried out by the Company
There was no mushroom production during the year R & D activity was done onutilization of spent compost as enriched garden manure. The process end residue ofmushroom growing can be developed as an agricultural input by way of enrichment as a byproduct to earn revenues.
2. BENEFITS DERIVED AS A RESULT OF ABOVE R & D:
Company has made rigorous study of development of organic manure using its spentcompost and its enrichment.
3. FUTURE PLAN OF ACTION:
To continue R & D to retain the competitive edge by choosing low cost Agri-wasteminimising transportation improving packing recycling own process residues. Replacinguse of electrical energy with other renewable and local available resources. Convertingprocess waste into a marketable commodity.
EXPENDITURE ON R& D:
Negligible Expenses incurred on R & D
Technology absorption Adaptation and Innovation
1. Efforts in brief toward technology absorption adaptation and innovation:
The technology imported has been fully absorbed and adapted.
2. Benefits derived as a result of the above efforts.
Plant operation was being carried out.
3. In case of imported technology (imported during the last five years reckoned fromthe beginning of the financial year)
following information may be furnished:
a. Technology imported: NIL
b. Year of import: N.A.
c. Has technology been fully absorbed: N.A.
d. If not fully absorbed areas where this has not taken place reasons thereof andfuture plans of action: N.A.
| ||BY ORDER OF THE BOARD |
| ||FOR SAPTARISHI AGRO INDUSTRIES LIMITED |
| ||sd/- |
|Place: Chennai ||B. Rose |
|Date: 29.05.2015 ||ALTERNATE DIRECTOR FOR CHAIRMAN |