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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

For the Year 2016-17

Dear Members

Your Directors have pleasure in presenting the 20th Annual Report togetherwith the Audited Accounts of the Company for the year ended 31st March 2017.

FINANCIAL RESULTS

(Rs. in Lakhs)

Particulars 2016-17 2015-16
Turnover 7866.09 6466.27
Profit Before Taxation 1325.59 592.88
Taxation/Deferred Tax 152.70 -327.81
Profit /(Loss) after Tax 1172.89 920.69
Transfer from Revaluation Reserve 7.64 7.64
Proposed Dividend & Dividend Tax 128.48 -
Add: Balance brought forward from Previous year 2791.02 1862.69
Profit transferred to Balance Sheet 3843.07 2791.02

STATE OF COMPANY'S AFFAIR

Your Company has achieved turnover of Rs.7866.09 Lakh for the current financial year2016-17 as against of Rs. 6466.26 Lakhs previous financial year. Similarly the Companyprofit for the current financial year 2016-17 has Rs. 1172.89 Lakhs up from Rs. 920.69Lakhs in previous financial year.

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

Your Company made its landmark move by entering into the capital market on September12 2016. The shares of your Company were listed on SME Platform of "NSEEMERGE" by way of offer for sales of 5790000 equity shares of face value of Rs.10.00 each for cash at a price of Rs. 24.00 per equity share (share premium of Rs. 14.00per equity share).

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 2017 is provided in Annexure I formingpart of this report.

AUDITORS & AUDITORS' REPORT

The term of M/s Ashok Kanther & Associates Chartered Accountants statutoryauditors of the company will be expires in the conclusion of this 20th AnnualGeneral Meeting therefore the Company has appointed M/s. Rajneesh Kanther &Associates Statutory Auditors of the Company for a term of 05 years from the conclusion ofthis annual general meeting till the conclusion of 25th AGM held in the year2022 subject to the ratification at each annual general meeting held after forthcomingannual general meeting. They have confirmed their eligibility to the effect that theirappointment if made would be within the prescribed limits under the Act and that theyare not disqualified for appointment.

The Auditor's Report is self-explanatory and therefore do 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 SP Jethlia & Co. a Proprietorship firm of companySecretaries in practice to undertake the Secretarial Audit of the Company for financialyear 2016-17. The Secretarial Audit report is provided in Annexure II forming part of thisreport.

The Secretarial Audit report does not contain any qualification reservation or adverseremarks.

COST AUDITOR & AUDITORS' REPORT

M/s K.C. Moondra & Associates Cost Accountant was appointed Cost Auditors ofCompany for FY 2017-18. In accordance with the provisions of Section 148 of the CompaniesAct 2013 and the Companies (Audit and Auditors) Rules 2014 and on the recommendation ofthe Audit Committee the Board has appoint M/s K.C. Moondra & Associates CostAccountants (Registration No. 101814) for remuneration at Rs. 30000 plus applicableservice tax and out of pocket expenses to conduct the audit of the cost records of theCompany for the financial year ending 31st March 2018. The appointment and theremuneration of the cost Auditor is required to be ratified subsequently by the Members ofthe Company and further subject to the approval of the Central Government.

INTERNAL AUDITOR & 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 company has made appointment ofMrs. Priyanka Jain Chartered Accountants as the Internal Auditor of the Company and shereports directly to the chairman and the Audit Committee of the Board. The scope andfunctions of internal auditor is defined and reviewed by the Audit Committee.

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

RESERVES

During the year under review The Board of Director of Company Proposed to transfer Rs1180.53 lakhs to general reserve thereby taking it to Rs 3843.07 lakhs.

DIVIDEND

The Board of Directors are pleased to recommend final dividend of Rs. 0.50 per equityshare (face value of Re. 10/- per share) for the financial year 2016-2017.

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 under review Board of Directors of the Company appointed Mrs. ArunaKothari as Additional Director of the Company with effect from June 04 2016 and shallhold office up to the date of the ensuing Annual General meeting of the Company. Mrs.Aruna Kothari is appointed as a woman Independent Director of the company w.e.f. 28thSeptember 2016 pursuant to the section of 152 & 149 of the Companies Act 2013 andthe Articles of Association of the Company. Your Company has received the requisite noticeproposing her appointment as a woman Independent Director of the Company.

Mr. Sourabh Gupta Director and Chief Financial officer of the Company re-designated asWhole Time Director & Chief Financial officer of the Company for a period of 5 (five)w.e.f. 11th June 2016.

During the year Mr. Pankaj Ostwal Chairman & Managing Director of the CompanyMr. Sourabh Gupta Whole Time Director & Chief Financial Officer and Ms. PallaviSukhwal Company Secretary of the Company were designated as Key Managerial Personnel ofthe Company pursuant to Section 203 of the Companies Act 2013.

NUMBER OF MEETINGS OF BOARD OF DIRECTORS:

The Board of Directors duly met 10 (Ten) times 18th April 2016 04thJune 2016 20th June 2016 30th July 2016 17thAugust 2016 19th September 2016 10th October 2016 10thNovember 2016 12th December 2016 and 08th March 2017 in F.Y.2016-17 in respect of which meetings proper notices were given and the proceedings wereproperly recorded and signed in the Minutes Book maintained for the purpose. However theBoard 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.

RISK MANAGEMENT:

Proper Risk Management Practices have followed for the purpose of risk identificationanalysis response planning and monitoring controlling and reporting. Although allrisks cannot be eliminated but mitigation and contingency plans has been developed tolessen their 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:

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. Representative of StatutoryAuditor is permanent invitee. Company Secretary acts as Secretary 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

During the year the Committee had 5 Meetings i.e. on 05th April 2016 01thAugust 2016 25 October 2016 25 November 2016 and 18th January 2016.

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
(2) Shri Arvind Kothari Member
(3) Shri Paras Mal Surana Member

The Committee will meet 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 16 May 2016 And 17th March 2017.

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

During the year the 4 Stakeholder Relationship Committee Meetings were held on 27 June2016 10 August 2016 17 October 2016 And 18 January 2017.

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 orPrograms 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://www.mbapl.com.

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

(1) Shri Arvind Kothari Chairman
(2) Shri Paras Mal Surana Member
(3) Shri Sushil Kumar Surana Member

The company has incurred as per recommendation of committee a sum of Rs. 17.88 Lakhsduring the year 2016-17 as against Rs. 11.31 Lakhs as per provisions of Company Act 2013.Your company as part of its responsibility towards society has been taking welfaremeasures from time to time. The CSR Report of the Company is provided in Annexure Xforming part of this report.

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://www.mbapl.com.

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 2016-17. 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 31stMarch 2017 the applicable accounting standards have been followed along with properexplanation relating to material departures.

b) 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.

c) 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.

d) That the Directors have prepared the accounts for the financial year ended 31stMarch 2017 on a going concern basis.

e) 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.

f) 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 (Raj) Managing Director Whole Time Director & Chief Financial Officer
Date 25.05.2017 DIN 02586806 DIN 07177647