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Madhya Bharat Agro Products Ltd.

BSE: 538370 Sector: Agri and agri inputs
NSE: MBAPL ISIN Code: INE900L01010
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Madhya Bharat Agro Products Ltd. (MBAPL) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting the 22nd Annual Report together with theAudited Accounts of the Company for the year ended 31st March 2019.

FINANCIAL RESULTS:

(Rs. in Lakhs)

Particulars 2018-19 2017-18
Turnover 11629.47 8991.51
Profit Before Taxation 1652.23 727.96
Taxation/Deferred Tax 439.93 216.55
Profit /(Loss) after Tax 1212.30 511.41
Transfer from Revaluation Reserve 7.34 7.34
Proposed Dividend & Dividend tax 132.06 109.53
Profit transferred to Balance Sheet 1087.58 409.22

STATE OF COMPANY'S AFFAIR

During the year under review the Company has achieved significant improvement inoperation and profit. Your Company has achieved turnover of Rs. 11629.47 Lakhs for thecurrent financial year 2018-19 as against of Rs. 8991.51 Lakh in the previous financialyear. Similarly the Company's profit for the current financial year 2018-19 has been Rs.1212.30 Lakhs as against Rs. 511.41 Lakhs in previous financial year. Management of thecompany striving hard by making more sincere efforts for the better growth and prospectsof the company in the future and to yield the better returns for the members of thecompany.

CHANGE IN THE NATURE OF BUSINESS OF COMPANY

During the year under review there is no change in the nature of business of Company

LISTING OF THE COMPANY

The shares of your Company continues to be listed on SME Platform of "NSEEMERGE". The Annual Listing fees for the year 2019-20 has been paid to the exchange.

SHARE CAPITAL

During the year ended 31st March 2019 there was no change in the issued and subscribedcapital of the Company the outstanding capital as on 31st March 2019 continues to be2190.67 Lakhs comprising of 219.06 Lakhs shares of 10/- each.

ANNUAL RETURN:

The information required pursuant to the provisions of Section 134 (3) (a) and Section92 (3) of the Companies Act 2013 read with Rule 12 of Companies (Management andAdministration) Rules 2014 the extract of the Annual Return in Form MGT-9 for thefinancial year ended on March 31st 2019 is provided in Annexure I forming part of thisreport and also disclosed on the website of the Company viz. http://www.mbapl.com

STATUTORY AUDITORS & AUDITORS' REPORT

The Company has appointed M/s. Rajneesh Kanther & Associate Statutory Auditors ofthe Company for a term of 5 years from the conclusion of the last annual general meetingtill the conclusion of 25th AGM to be held in the year 2022.

The Auditor's Report is self-explanatory and therefore does not call for any furthercomments/ clarifications and Auditor's report does not contain any qualificationreservation or adverse remarks.

SECRETARIAL AUDITOR & SECRETARIAL AUDITORS' REPORT

Pursuant to the provisions of Section 204(1) of the Companies Act 2013 and theCompanies (Appointment & Remuneration of Managerial personnel) Rules 2014 thecompany has appointed M/s Sourabh Bapna & Associates a practicing company Secretariesto undertake the Secretarial Audit of the Company for financial year 2019-20. The Companyhas received their consent for appointment.

The Secretarial Audit report for financial year 2018-19 received from Sourabh Bapna& Associates is provided in Annexure II forming part of this report. TheSecretarial Audit report does not contain any qualification reservation or adverseremarks.

COST AUDITOR & AUDITORS' REPORT

In accordance with the provisions of Section 148 of the Companies Act 2013 and theCompanies (Audit and Auditors) Rules 2014 and on the recommendation of the AuditCommittee the Board has appointed M/s K.C. Moondra & Associates Cost Accountants(Registration No. 101814) at such remuneration as shall be fixed by the board ofDirectors of the Company to conduct the audit of the cost records of the Company for thefinancial year ending 31st March 2020. The appointment and the remuneration of the costAuditor is required to be ratified subsequently by the Members of the Company and furthersubject to the approval of the Central Government.

INTERNAL AUDITOR & AUDITORS' REPORT

As per section 138 of The Companies Act 2013 read with Rule 13 of Companies (Accounts)Rules 2014 the company has appointed M/s Sourabh Bapna & Associates PracticingCompanies Secretaries as Internal Auditor to conduct Internal Audit for the Financial Year2019-2020. The Company has received their consent for appointment.

The Internal Audit Report is received yearly by the Company and the same is reviewedand approved by the Audit Committee and Board of Directors for the year 2018-19. All theobservations made by the Internal Auditors have been attended to.

INTERNAL CONTROL SYSTEM

The company has in place an adequate internal control system which is commensuratewith the size scale and complexity of the company. The internal auditors independentlyevaluate the adequacy of internal controls and concurrently audit the majority of thetransactions in value terms. Independence of the audit compliance is ensured by the directreporting of Internal Audit Division and Internal Auditors to the Audit Committee of theBoard.

During the period under review the Internal Financial Control were tested and noreportable material weakness in the design or operation were observed.

REPORTING OF FRAUDS BY AUDITORS IF ANY

No fraud has been reported by auditors under section 143 (12) of the companies act2013.

RESERVES & SURPLUS

During the year under review The Board of Director of Company Proposed to transfer Rs1087.58 lakhs to reserve & surplus after making provision for dividend & dividendtax. With this the reserve & Surplus has increased to Rs 5339.87 lakhs.

DIVIDEND

After considering earnings requirement for funds for future and with the objective ofrewarding the Shareholders the Board has recommended final dividend of 5% being Rs. 0.50per equity share of Rs. 10/- each for the financial year 2018-2019 subject to approval atthe ensuing Annual General Meeting.

DEPOSITS

The Company has not accepted any deposits covered under section 73 of the CompaniesAct 2013.

NO DEFAULT

The company has not defaulted in payment of interest and/or repayment of loan to any ofthe financial institutions and/or bank.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with provisions of Companies Act 2013 and Company's Articles ofAssociation Sh. Sourabh Gupta (DIN 07177647) Director of the Company retire by rotationand being eligible offers himself for re-appointment. The Board recommends hisre-appointment.

During the year Mr. Sushil Kumar Surana Independent Director of the Company hasresigned with effect from February 01 2019 and Board of Directors of the Company hadappointed Mr. Mahendra Kumar Ostwal as Additional Non-Executive Director and Mr. Bheru LalOstwal as an Additional Non-Executive Independent Director of the Company with effect fromMarch 26 2019 and shall hold office up to the date of the ensuing Annual General meetingof the Company.

Mr. Pankaj Ostwal Chairman & Managing Director of the Company Mr. Sourabh GuptaWhole Time Director & Chief Financial Officer and Ms. Pallavi Sukhwal CompanySecretary of the Company were designated as Key Managerial Personnel of the Companypursuant to Section 203 of the Companies Act 2013.

NUMBER OF MEETINGS OF BOARD OF DIRECTORS:

The Board of Directors duly met 10 (Ten) times on 30th April 2018 29th May 201804th July 2018 30th July 2018 24th August 2018 20th October 2018 1st November2018 30th January 2019 09th February 2019 and 26th March 2019 in F.Y. 2018-19 forwhich proper notices were given and the proceedings were properly recorded and signed inthe Minutes Book maintained for the purpose. The Board passed no circular resolution.

PARTICULARS OF EMPLOYEES

The information required pursuant to the Section 197(12) of the Companies Act 2013read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 in respect of ratio of remuneration of each director to the medianremuneration of the employees of the Company is provided in Annexure III forming part ofthis report.

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGOING

The details as required under section 134 (3) (m) of the Companies Act 2013 read withthe Rule 8 of Companies (Account) Rule 2014 for conservation of Energy TechnologyAbsorption and Foreign Exchange earnings and outgo are given in Annexure IV forming partof this report.

PARTICULAR OF LOAN GUARANTEE AND INVESTMENT UNDER SECTION 186

The information required for loans given investment made or guarantee given orsecurity provided during the year under section 186 of the Companies Act 2013 read withthe rule 11 of Companies (Meetings of Board and its power) Rule 2014 is provided inAnnexure V forming part of this report and also provided in the financial statement of theCompany (please refer Notes of the balance sheet).

RISK MANAGEMENT:

Proper Risk Management Practices have been followed for the purpose of riskidentification analysis mitigation planning monitoring and reporting. Although allrisks cannot be eliminated but mitigation and contingency plans are developed to lessentheir impact if they occur.

RELATED PARTY TRANSACTION UNDER SECTION 188

All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of the business. There are nomaterially significant related party transactions made by the company during the financialyear which were in the conflict of interest of the company. Information on transactionswith related parties pursuant to Section 134(3)(h) of the Act read with rule 8(2) of theCompanies (Accounts) Rules 2014 are given in Annexure VI in Form AOC-2 and the same formspart of this report.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS

The Corporate Governance and Management Discussion & Analysis Report as requiredpursuant to the SEBI ((Listing Obligations & Disclosure Requirements) Regulations2015 is provided in Annexure VII and Annexure VIII forming part of this report.

DECLARATION OF INDEPENDENT DIRECTORS:

The Company has received necessary declaration from each Independent Director underSection 149(7) of the Companies Act 2013 to the effect that they meet the criteria ofindependence laid down in Section 149(6) of the Companies Act 2013. The terms andconditions of the Independent Directors are incorporated on the website of the Company.

BOARD EVALUATION:

Pursuant to the relevant provisions of the Companies Act 2013 and the Listingregulations the Board has carried out an annual performance evaluation of its ownworking of its Committees and the Directors. The Nomination and Remuneration Committee hascarried out evaluation of every Director. The Independent Directors evaluated performanceof the Non-Independent Directors the Board as whole and the Chairperson of the Company.

COMMITTEES OF BOARD:

The Board of Directors of your Company has constituted the following committees interms of the provisions of the Companies Act 2013 and the SEBI (Listing Obligations andDisclosures Requirements) Regulation 2015:

AUDIT COMMITTEE DISCLOSURE UNDER SECTION 177:

The Audit Committee of the Company consists of 2 Independent Directors and 1 ExecutiveDirector. The Chairman of the Audit Committee is financially literate and majority of themhaving accounting or related financial management experience. Company Secretary acts asSecretary to the Committee.

The following Directors are the members of Audit Committee.

(1) Shri Arvind Kothari Chairman
(2) Shri Pankaj Ostwal Member
(3) Shri Sushil Kumar Surana* Member
(4) Shri Bheru Lal Ostwal* Member

* Shri Bheru Lal Ostwal was appointed as Member of the Committee on 19th April 2019and Shri Sushil Kumar Surana was ceased to member of the Committee from 1st February 2019.

During the year the Committee had 4 Meetings i.e. on 17th May 2018 30th July 201820th October 2018 and 30th January 2019.

NOMINATION & REMUNERATION COMMITTEE DISCLOSURE UNDER SECTION 178:

In pursuant to the provisions of section 178 (4) of the Companies Act 2013 theNomination and Remuneration Policy recommended by the Nomination and Remunerationcommittee is duly approved by the Board of Directors of the Company and is provided inAnnexure IX forming part of this report.

The following Directors are the members of nomination and Remuneration Committee.

(1) Shri Sushil Kumar Surana* Chairman
(4) Shri Bheru Lal Ostwal* Chairman
(2) Shri Arvind Kothari Member
(3) Shri Paras Mal Surana Member

* Shri Bheru Lal Ostwal was appointed as Chairman of the Committee on 19th April 2019and Shri Sushil Kumar Surana was ceased to chairman of the Committee from 1st February2019.

The Committee meets as and when any remuneration is to be fixed for any Director/Managing Director and Key Managerial Personnel. During the year the Committee had 2Meetings i.e. on 19th May 2018 and 30th January 2019.

STAKEHOLDER RELATIONSHIP COMMITTEE:

The following Committee of Directors looks after the Investor Grievances:

(1) Shri Arvind Kothari Chairman
(2) Shri Pankaj Ostwal Member
(3) Shri Sushil Kumar Surana* Member
(4) Shri Bheru Lal Ostwal* Member

* Shri Bheru Lal Ostwal was appointed as Member of the Committee on 19th April 2019and Shri Sushil Kumar Surana was ceased to member of the Committee from 1st February 2019.

During the year the 4 Stakeholder Relationship Committee Meetings were held on 11th May2018 30th July 2018 20th October 2018 and 30th January 2019 and the complaints receivedand their disposal has been reviewed.

INDEPENDENT DIRECTORS COMMITTEE:

The following are the members of independent directors committee:

(1) Shri Sushil Kumar Surana* Chairman
(4) Shri Bheru Lal Ostwal* Chairman
(2) Shri Arvind Kothari Member
(3) Shri Paras Mal Surana Member

* Shri Bheru Lal Ostwal was appointed as Chairman of the Committee on 19th April 2019and Shri Sushil Kumar Surana was ceased to chairman of the Committee from 1st February2019.

During the year under review the Independent Directors met on January 30 2019.

CORPORATE SOCIAL RESPONSIBILITY:

In pursuant to the provisions of section 135 and schedule VII of the Companies Act2013 CSR Committee of the Board of Directors was formed to recommend (a) the policy onCorporate Social Responsibility (CSR) and (b) implementation of the CSR Projects orProgramme to be undertaken by the Company as per CSR Policy for consideration and approvalby the Board of Directors. CSR Policy is disclosed on the website of the Company viz.http://mbapl.com/pdf/CSR_Policy_MBAPL.pdf

As per provision of new enacted Company Act 2013 the Board of Directors have formedCorporate Social Responsibilities Committee having the following members:-

(1) Shri Arvind Kothari Chairman
(2) Shri Paras Mal Surana Member
(3) Shri Sushil Kumar Surana* Member
(4) Shri Bheru Lal Ostwal* Member

* Shri Bheru Lal Ostwal was appointed as Member of the Committee on 19th April 2019and Shri Sushil Kumar Surana was ceased to member of the Committee from 1st February 2019.

The company has incurred as per recommendation of committee a sum of Rs. 6.49 Lakhsduring the year 2018-19 as against Rs. 17.64 Lakhs required as per provisions of CompanyAct 2013.

Our Company considers social responsibility as an integral part of its businessactivities and endeavors to utilize allocable CSR budget for the benefit of society.During the year the implementation of the CSR projects was delayed and due to spend onthe CSR activities has been less than the limits prescribed under Companies Act 2013.

During the year the Committee had 2 Meetings i.e. on 29th September 2018 and 30thJanuary 2019. The CSR Report of the Company is provided in Annexure X forming part of thisreport.

WHISTLE BLOWER POLICY / VIGIL MECHANISM

The Company has established vigil mechanism policy for Directors and employees toreport concerns about unethical behavior actual or suspected fraud or violation ofCompany's Code of Conduct or Ethics Policy. Vigil Mechanism Policy is disclosed on thewebsite of the Company viz. http://mbapl.com/pdf/Vigil-mechanism.pdf

MATERIAL CHANGES AND COMMITMENTS:

No material changes and commitments affecting the financial position of the Companyoccurred between the ends of the financial year to which this financial statements relateon the date of this report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators or Courts or Tribunalwhich would impact the going concern status of the Company and its future operation.

SUBSIDIARY JOINT VENTURE AND ASSOCIATE COMPANY:

The Company does not have any Subsidiary Joint Venture and Associate Company.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013

The company has in place an Anti-Sexual Harassment Policy in line with the requirementof the Sexual Harassment of Women at the Workplace (Prevention Prohibition and Redressal)Act 2013. Internal Complaints Committee (ICC) has been set up to redress complaintsreceived regarding sexual harassment. All employees (permanent contractual temporarytrainee) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed offduring the year 2018-19. No. of complaints received: Nil No. of complaints disposed off:Nil

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 (3) (c) & 134 (5) of the CompaniesAct 2013 with respect to Directors Responsibility Statement it is hereby confirmed:

a) That in the preparation of the Accounts for the Financial Year ended 31st March2019 the applicable accounting standards have been followed along with proper explanationrelating to material departures.

b) c) That the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that were 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 profit of the company for the year under review.

d) That the Directors have taken proper and sufficient 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 fraud andother irregularities.

e) That the Directors have prepared the accounts for the financial year ended 31stMarch 2019 on a going concern basis.

f) That the Directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

g) That the directors had devised proper system to ensure compliance with theprovisions of all applicable laws and that such system were adequate and operatingeffectively.

HEALTH SAFETY AND QUALITY MANAGEMENT

Your Company is ISO 9001:2015 certified and maintains high quality of product andprocesses and the company is conscious about its responsibility towards the upkeep ofenvironment and maintenance of high safety and health standards at its work places.

ACKNOWLEDGEMENT

We wish to place on record the cooperation received from the M.P. State MiningCorporation Ltd. Shriram Fertilizers & Chemicals Banks and customers suppliersbusiness associates and shareholders of the Company. The Directors also wish to place onrecord the appreciation to the team of executives staff and workers who have showndevotion and efficiency in performing their jobs.

For and on Behalf of the Board of Directors

Sd/- Sd/-
(Pankaj Ostwal) (Sourabh Gupta)
Place Bhilwara Managing Director Whole Time Director
&
Chief Financial Officer
Date 10.05.2019 DIN 02586806 DIN 07177647

.