Your Directors are pleased to present their Annual Report on the Business andOperations of the Company together with Audited Statement of Accounts for the year ended 31stMarch 2017.
The financial performance of your Company for the year ended March 31 2017 issummarized below:
|Particulars ||2016-2017 ||2015-2016 |
|Total Income ||186.24 ||207.50 |
|Total Expenses ||182.58 ||202.22 |
|Net Profit After Tax ||3.66 ||5.27 |
Business Performance and Segment Reporting:
The Management of the Company is pleased to inform that the Company has shifted itsbusiness from cultivation of agricultural products to retail in textile Industry. Theturnover & profitability of the Company during the year has been drawn majorly fromtextile business. The main income of the Company is only from trading in textileindustries during 2016-17; hence segment reporting as required by Accounting Standard 17is not applicable.
Management Discussion and Analysis Report:
To avoid duplication between the Directors Report and the Management Discussion andAnalysis Report for the year we pre sent below a composite summary of performance of thevarious business & functions of the Company.
World economy grew at 2.3% in 2016 compared to growth of 2.7% in previous year.Against weak global growth expansion in Indian economy was noteworthy. Despite somedecline in growth due to slowdown in manufacturing and demonetization India remained thefastest growing major economy with ~7.1% yoy growth (forecasted). While the demonetizationof 500 and 1000 currency bill impacted consumer demand for some time the economyweathered the storm well and came out fairly unscathed. Considering India's growth isprimarily driven by Government spending and private consumption latter of which gotimpacted by demonetization strong growth numbers provided a lot of comfort on thestrength of the economy. Not only growth but Indian economy did well on othermacro-economic parameters also. Crude price rose again after remaining weak for lastcouple of years. However in spite of higher crude prices inflation remained undercontrol. Consumer Price Index averaged below 5% for the year a significant improvementover last few years when double digit inflation was the norm. India also saw passing oflong awaited GST bill. GST is likely to be implemented from July 1st and will provide ahuge fillip to industry as it simplifies the tax structure in the country significantlyand will likely provide an impetus to the private investment in the country. While in thelong term implementation of GST is a positive development its impact especially onexports in the near future is still unclear as many export incentives are likely to bediscontinued. The net impact of the new tax law will be known only after further detailsare shared. Domestically however the new law is likely to dilute the present taxarbitrage which is available to unorganised players moving the market towards organisedplayers. Country is still facing challenges on account of lower service exports and weakmanufacturing growth. Indian currency strengthened significantly against US$ towards theend of the year creating another set of challenge for Indian exporters. By the end ofFY2017 Indian rupee was at its highest level against both USD and EUR in almost one and ahalf years.
The company has relatively good strength in textile trading. Total revenue of thecompany grew in Financial Year 2017 primarily on the back of strong growth in our brandsand retail business. Our Operating Earnings (excluding other income) before InterestDepreciation and Taxes (EBITDA) increase marginally by 1%.
Adequacy of Internal Control:
The Company has robust internal control systems in place which are commensurate withthe size and nature of the business. The internal controls are aligned with statutoryrequirements and designed to safeguard the assets of the Company. The internal controlsystems are complemented by various Management Information System (MIS) reports coveringall areas. Increased attention is given to auto generation of MIS reports as againstmanual reports to take care of possible human errors or alteration of data. The Managementreviews and strengthens the controls periodically.
Human Resource Development:
The Company recognizes the importance of Human Resource as a key asset instrumental inits growth. The Company believes in acquisition retention and betterment of talented teamplayers. With the philosophy of inclusive growth the Company has redefined itsperformance management system. The new system focuses on progression of individualemployees together with organizational goals. Under the new system increased thrust willbe on job rotation and multi-skilling.
The company recognizes the importance of human value and ensures that properencouragement both moral and financial is extended to employees to motivate them.
The Company is into single reportable segment only.
The Compliance function of the Company is responsible for independently ensuring thatoperating and b usiness units comply with regulatory and internal guidelines. TheCompliance Department of the Company is continued to play a pivotal role in ensuringimplementation of compliance functions in accordance with the directives issued byregulators the Company's Board of Directors and the Company's Compliance Policy. TheAudit Committee of the Board reviews the performance of the Compliance Department and thestatus of compliance with regulatory/internal guidelines on a periodic basis. NewInstructions/Guidelines issued by the regulatory authorities were disseminated across theCompany to ensure that the business and functional units operate within the boundaries setby regulators and that compliance risks are suitably monitored and mitigated in course oftheir activities and processes.
Investors are cautioned that this discussion contains statements that involve risks anduncertainties. Words like anticipate believe estimate intend will expect and othersimilar expressions are intended to identify "Forward Looking Statements". Thecompany assumes no responsibility to amend modify or revise any forward lookingstatements on the basis of any subsequent developme nts information or events. Actualresults could differ materially from those expressed or implied.
The Board of Directors does not recommend any Dividend for the year under review.
The Company does not have any subsidiary Company.
The Company has not changed its capital structure during 2016-17.
Acceptance of Fixed Deposits:
The Company has not accepted any Fixed Deposits from general public within the purviewof Section 73 of the Companies Act 2013 read with the Companies (Acceptance of Deposit)Rule 2014 during the year under review.
Particulars of Contract or Arrangement with Related Party:
There is no transaction with Related Party which requires disclosure under Section134(3) (h) of the Companies Act 2013 and Rule 8(2) of the Companies (Accounts) Rules2014. There being no material related party transactions as defined under Regulation 23 ofthe SEBI (LODR) Regulations 2015 there are no details to be disclosed in Form AOC - 2 inthat regard.
The policy on materiality of related party transactions and also on dealing withrelated party transactions as approved by the Board may be accessed on the Companywebsite. All related party transactions which were entered into during the year were onarm's leng th basis and were in the ordinary course of business and did not attractprovisions of section 188 of the Companies Act 2013 and were also not material relatedparty transactions under Regulation 23 of the SEBI (LODR) Regulations 2015. There are nomaterials transactions entered into with related parties during the period under reviewwhich may have had any potential conflict with the interests of the Company.
Pursuant to Regulation 26(5) of the SEBI (LODR) Regulations 2015 senior personnelmade periodical disclosures to the Board relating to all material financial and commercialtransactions where they had or were deemed to have had personal interest that might havebeen in potential conflict with the interest of the Company & same was nil.
Loans Investment and Guarantees by the Company:
There is no loan given investment made guarantee given or security provided by theCompany to any entity under Section 186 of the Companies Act 2013. Particulars ofInvestment made/loan given under section 186 of the Companies Act 2013 are provided inthe financial statement.
Internal Financial Controls:
The Internal Financial Controls with reference to financial statements as designed andimplemented by the Company are adequate. During the year under review no material orserious observations has been received from the Auditor of the Company for inefficiency orinadequacy of such controls.
Disclosures under Section 134(3) (I) of the Companies Act 2013:
No material changes and commitments which could affect the Company financial positionhave occurred between the end of the financial year of the Company and the date of thisreport except as disclosed elsewhere in this report.
There has been quite changes in the composition of the Board of Directors of theCompany during the year under review. Hardik Dinesh Bhatt Asha Parag Shah & ParagChandrakant Shah resigned as Director of the Company during 2016-17 & Boardappreciates there valuable contribution to the Company during their tenure.
Bhavanaben Mahendrabhai Panchal and Panchal Laxmanbhai were appointed as Directors ofthe Company on 04/09/2016.
Directors Remuneration Policy
The Board on the recommendation of the Nomination and Remuneration Committee has frameda Remuneration policy providing criteria for determining qualifications positiveattributes independence of a Director and a policy on remuneration for Directors keymanagerial personnel and other employees. The detailed Remuneration policy is placed onthe Company's website.
Consolidated Financial Statement
The audited consolidated financial statement of the Company prepared in accordance withrelevant Accounting Standards (AS) issued by the Institute of Chartered Accountants ofIndia forms part of this Annual Report. The Compliance Officer will make these documentsavailable upon receipt of a request from any member of the Company interested in obtainingthe same. These documents will also be available for inspection at the Registered Officeof your Company during working hours up to the date of the Annual General Meeting.
Declarations by Independent Director:
Pursuant to the provisions of Sub-Section (7) of Section 149 of the Companies Act 2013the Company has received individual declarations from all the Independent Directorsconfirming that they fulfill the criteria of independence as specified in Section 149(6)of the Companies Act 2013.
Pursuant to the provisions of section 139 of the Companies Act 2013 and the Rules madethere under the current auditors of the Company M/s. Mulraj D Gala & CoChartered Accountants hold office up to the conclusion of the ensuing Annual GeneralMeeting of the Company. However their appointment as Statutory Auditors of the Company issubject to ratification by the members at every Annual General Meeting. The Company hasreceived a certificate from the said Statutory Auditors that they are eligible to holdoffice as the Auditors of the Company and are not disqualified for being so appointed.Necessary resolution for ratification of appointment of the said Auditor is included inthis Notice.
The observations and comments furnished by the Auditors in their report read togetherwith the notes to Accounts are selfexplanatory and hence do not call for any furthercomments under Section 134 of the Companies Act 2013.
Directors Responsibility Statement:
1. In accordance with the requirement of Section 134 of the Companies Act 2013 theBoard of Directors of the Company confirms:
2. In the preparation of the annual accounts for the financial year ended 31stMarch 2017 the applicable accounting standards have been followed along with properexplanation relating to material departures.
3. That the Directors have 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 and loss of the Company for the year ended 31stMarch 2017.
4. That the Directors have taken sufficient and proper care 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 material fraudand other irregularities.
5. That the Directors have prepared the Annual Accounts on a going concern basis.
6. There are no material changes & commitments if any affecting the financialposition of the company which have occurred between the end of the financial year of thecompany to which the financial statements relate & the date of the report.
7. There are proper systems have been devised to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
8. That the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
9. Based on the framework of internal financial controls and compliance systemsestablished and maintained by 2013 the Company work performed by the internal statutoryand secretarial auditors and external consultants including audit of internal financialcontrols over financial reporting by the statutory auditors and the reviews performed bymanagement and the relevant board committees including the audit committee the board isof the opinion that the Company's internal financial controls were adequate and effectiveduring FY 2016-17.
Annual Evaluation by the Board of Its Own Performance Its Committees and IndividualDirectors:
The Board of Directors of the Company has initiated and put in place evaluation of itsown performance its committees and individual Directors. The result of the evaluation issatisfactory and adequate and meets the requirement of the Company.
During the year Management of the Company evaluated the existing Risk ManagementPolicy of the Company to make it more focus ed in identifying and prioritizing the risksrole of various executives in monitoring & mitigation of risk and reporting process.
Its aim is to enhance shareholders value and provide an optimum risk-reward tradeoff.The Risk Management Policy has been reviewed and found adequate to the requirements of theCompany and approved by the Board. The Management evaluated various risks and that thereis no element of risk identified that may threaten the existence of the Company.
Secretarial Audit Report:
A Secretarial Audit Report for the year ended 31st March 2017 in prescribedform duly audited by the Practicing Company Secretary Jaymin Modi & Co. Mumbai isannexed herewith and forming part of the report.
Extract of Annual Return:
Pursuant to Section 134(3)(a) of the Companies Act 2013 read with Rule 12(1) of theCompanies (Management and Administration) Rules 2014 the extract of annual return isannexed herewith and forming part of the report. (Annexure - I)
The report on Corporate Governance as required by SEBI (LODR) Regulations 2015 isattached separately in the Annual Report. All Board members and Senior Managementpersonnel have affirmed compliance with the Code of Conduct for the year 2016-17. Adeclaration to this effect signed by the Managing Director of the Company is contained inthis Annual Report. The Managing Di rector have certified to the Board with regard to thefinancial statements and other matters as required under Regulation 17(8) of the SEBI(LODR) Regulations 2015.
The Company has a Risk Management Policy which has been adopted by the Board ofDirectors currently the Company's risk management approach comprises of governanceidentification & assessment of risk. The risks have been prioritized through aCompanywide exercise.
Members of Senior Management have undertaken the ownership and are working onmitigating the same through co-ordination among the various departments insurancecoverage security policy and personal accident coverage for lives of all employees.
The Company has appointed a Risk Officer and also put in place the riskmanagement framework which helps to identify various risks cutting across its businesslines. The risks are identified and are discussed by the representatives from variousfunctions. Risk Officer will make a presentation periodically on risk management to theBoard of Directors and the Audit Committee. The Board and the Audit Committee provideoversight and review the risk Management policy periodically.
Individual Shareholders holding shares singly or jointly in physical form can nominatea person in whose name the shares shall be transferable in case of death of the registeredshareholder(s). Nomination form SH-13 ([Pursuant to section 72 of the Companies Act 2013and rule 19(1) of the Companies (Share Capital and Debentures) Rules 2014] can be obtainedfrom the Company's Registrar and Share Transfer Agent. It is also available on Publicdomain.
Corporate Social Responsibility:
The Section 135 of the Companies Act 2013 regarding Corporate Social ResponsibilityCommittee is not applicable to the Compa ny as the Net Profit of the Company is below thethreshold limit prescribed by the Companies Act 2013.
Managing Director's Certificate:
A Certificate from the Managing Director in respect of the Financial Statements formspart of the Annual Report.
Conservation of Energy Technology Absorptions and Foreign Exchange Earnings and Outgo:
The information relating to the conservation of energy technology absorption foreignexchange earnings and outgo under provisions of 134 of the Companies Act 2013 is notapplicable to the Company considering the nature of its business activities. Further theCompany has not earned nor spends foreign exchange during the year under review.
Significant and Material Orders Passed By the Regulators or Courts
During the year under review there were no significant and material orders passed bythe regulators or courts or tribunals which may impact the going concern status of theCompany and its operations in future except that the trading in the securities was suspended by BSE Limited from 24th December 2015 on account of surveillancemeasures & Company has submitted also necessary explanations to BSE Limited from timeto time.
Presentation of Financial Statements:
The financial statements of the Company for the year ended 31st March 2017have been disclosed as per Schedule III to the Companies Act 2013.
A copy of audited financial statements of the said Companies will be made available tothe members of the Company seeking such information at any point of time. A cash flowstatement for the year 2016-2017 is attached to the Balance Sheet. Pursuant to thelegislation 'Prevention Prohibition and Redressal of Sexual Harassment of Women atWorkplace Act 2013' introduced by the Government of India the Company has a policy onPrevention of Sexual Harassment at workplace. There was no case reported during the yearunder review under the said policy.
Details as required under the provisions of section 197 (12) of the Companies Act 2013read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 are placed on the Company's website i.e. www.smadlindia.com as anAnnexure to the Director Report. Details as required under the provisions of section 197(12) of the Companies Act 2013 read with Rule 5(2) and 5(3) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are placed on the Company's websitei.e. www.smadlindia.com as an Annexure to the Director Report. A physical copy ofthe same will be made available to any shareholders on request. A cash flow statement forthe year 2016-17 is attached with the Balance- Sheet.
Acknowl edgemen t:
The Directors take this opportunity to thank the Financial Institutions BanksBusiness Associates Central and State Government authorities Regulatory authoritiesStock Exchanges and all the various stakeholders for their continued co-operation andsupport to the Company and look forward to their continued support in future.
The Company thanks all of the employees for their contribution to the Company'sperformance. The Company applauds all the employees for their superior levels ofcompetence dedication and commitment to your Company.
By order of the Board of Directors
For Shri Mahalaxmi Agricultural Development Limited
|Place: Ahmedabad |
| ||Date: September 02 2017 |
|Bhavanaben M Panchal ||Satish Vadilal Raval || |
|Director ||Director || |
|DIN: 07138168 ||DIN:02420923 || |