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Madhav Copper Ltd.

BSE: 538398 Sector: Metals & Mining
NSE: MCL ISIN Code: INE813V01014
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Madhav Copper Ltd. (MCL) - Director Report

Company director report

To

The Shareholders Madhav Copper Limited

(Formerly known as Madhav Copper Pvt. Ltd.)

Your Directors have pleasure in presenting the 5th Annual Report on thebusiness and operations of the Company and the Audited Accounts for the Financial Yearended 31st March 2017.

1. SUMMARY OF FINANCIAL RESULTS:

(Amount in Rupees)

Particulars Current Year Previous Year
2016-17 2015-16
Net Sales/Income from Business operations 714429553 356171865
Other Income 1857414 734016
Total income 716286967 356905881
Less: Expense (Excluding depreciation) 700530744 343906378
Profit before Depreciation 15756223 12999503
Less: Depreciation 4466535 2211992
Profit before Tax 11289689 10787511
Less: Current Tax 3900000 2500000
Less: Deferred tax -1019864 1028463
Net Profit/ (Loss) after Tax for the year 8409553 7259048
Balance carried to the Balance Sheet 8409553 7259048
Earnings per share(Basic & Diluted) 4.10 4.84

2. DIVIDEND:

With a view to finance expansion from internal accrual for the growth of the Companythe directors do not recommend any dividend for the year ended March 31 2017.

3. OPERATIONAL HIGHLIGHTS AND PROSPECTS:

Operational highlights:

The Company earned operational income of Rs. 714429553 compared to Rs. 356171865in the previous year. The other income is Rs. 1857414 compared to Rs. 734016 in theprevious year.

The total revenue for the year is Rs. 716286967 against Rs. 356905881in the previous year. Profit after tax for the year under review is Rs. 8409553 ascompared to previous year figure of Rs. 7259048.

4. IPO PROCEEDS AND DEPLOYMENT OF FUNDS:

Your Company has successfully come up with an Initial Public Offer (IPO) on 23rdJanuary 2017 and has listed on NSE SME EMRGE platform on 6th February 2017.

The issue size was Rs. 44841600 (Rupees Four Crore Forty Eight Lakh Forty OneThousand Six Hundred Only) consisting of 553600 Equity Shares of Rs. 81/- per share(Face value Rs. 10/- per share and premium of Rs. 71/- per share). The issue was opened on23rd January 2017 and closed on 27th January 2017.

Details of utilization of IPO Proceeds are as under

(Rs. in Lakh)

Sr. Category wise Utilisation As Stated in Prospectus Actual Utilisation Deviation
1 Working Capital Requirement 357.42 406.44 (49.02)
2 General Corporate purpose 46.00 0.44 45.34
3 IPO Expenses 45.00 41.54 3.46

The IPO Proceeds were fully utilized and the same has been intimated to the StockExchange wide letter dated 21st June 2017 under Regulation 32 of SEBI (ListingObligation and Disclosure Requirements) Regulation 2015. The deviations in theutilization of proceeds were adjusted among various heads internally.

5. CREDIT FACILITIES:

The Company has been optimally utilizing its ‘fund based' and ‘non-fundbased' working capital requirements as tied up with Bank of Baroda. During the year underreview the Company was comfortable in meeting its financial requirements. Effectivefinancial measures have been continued to reduce cost of interest and bank charges.

6. SHARE CAPITAL AND CHANGES:

During F.Y. 2016-17 changes in the capital structure of Company are as follows.

Initial Public Offer and Listing of Shares:

In January 2017 the Company came up with an IPO and allotted 553600 equity shareswith face value of Rs.10 each fully paid-up at an issue price of Rs. 81 (including a sharepremium of Rs. 71/- per equity share). The changed paid-up Equity Share Capital structureof the Company has been Rs. 20536000 (Rupees Two Crore Five Lakhs Thirty Six Thousandonly) as on 31st March 2017.

Listing of shares:

The members of the Company passed a special resolution in the Extra-ordinary GeneralMeeting of the members held on Saturday the 3rd day of September 2016permitting the Company to be admitted for trading of shares at National Stock ExchangeSME Emerge Platform. Accordingly the shares of the Company listed on National StockExchange SME Emerge Platform on 6th February 2017.

7. MATERIAL CHANGES:

There are no significant events affecting the financial position between the end of thefinancial year and date of the Report except the following:

a) Appointment of M/s B. P. Shah & Associates Chartered Accountants as a StatutoryAuditors of the Company to fill up the casual vacancy caused by Resignation of M/s. NiravPatel & Co. Chartered Accountants existing Auditors.

8. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGO:

The information pertaining to conservation of energy technology absorption Foreignexchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished in AnnexureI and is enclosed to this report.

9. RISK MANAGEMENT:

The Company has framed a sound Risk Management Policy to identify and evaluate businessrisks and opportunities and the same has become integral part of the Company's day to dayoperations. The key business risks identified by the Company are Industry risk Managementand Operations risk Market risk Government policy risk Liquidity risk and Systemsrisk. The Company has in place adequate mitigation plans for the aforesaid risks. ThePolicy on Risk Management is available on website of the Company under tab InvestorInfo/Policies/Risk Management Policy.

10. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:

The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as the said provisions are not applicable.

11. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF

THE COMPANIES ACT 2013:

There were no loans guarantees or investments made by the Company under Section 186 ofthe Companies Act 2013 during the year under review and hence the furnishing the saidinformation is not applicable.

12. RELATED PARTY TRANSACTIONS:

There were no materially significant related party transactions with the Company'sPromoters Directors Management or their relatives which could have had a potentialconflict with the interests of the Company. Transactions with related parties entered bythe Company in the normal course of business are periodically placed before the AuditCommittee for its omnibus approval and the particulars of contracts entered during theyear as per Form AOC-2 is enclosed as Annexure II.

The Board of Directors of the Company has on the recommendation of the AuditCommittee adopted a policy to regulate transactions between the Company and its relatedparties in compliance with the applicable provisions of the Companies Act 2013 the rulesmade thereunder and the Listing Agreement. This policy was considered and approved by theBoard and has been uploaded on the website of the Company at www.madhavcopper.com underInvestors/ Policies/Policy on Related Party Transactions.

13. CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL:

During the year under review there were following changes in the Directors and KeyManagerial Personnel.

Appointment of Independent Directors:

Mr. Manish Makodia (DIN: 07600988) and Mr. Chaitnya Doshi (DIN: 07600986) as anAdditional Independent Directors on the Board w.e.f 1st September 2016. Boththe Independent Directors will hold the office upto the ensuing Annual General Meeting andboth will be regularized in the Annual General Meeting subject to consent of the membersof the Company and be appointed as Independent Directors of the Company.

Further sub-section (13) of Section 149 provides that the provisions of retirement byrotation as defined in sub-sections (6) and (7) of Section 152 of the Companies Act 2013shall not apply to such Independent Directors. Hence none of the Independent Directorsretire at the ensuing AGM.

Appointment of Women Director:

As per proviso to Section 149(1) of the Companies Act 2013 read with Rule 3 of TheCompanies (Appointment and Qualification of directors) Rules 2014 every listed Companyis required to appoint a Women Director. Mrs. Rakshaben Chauhan (DIN: 07600985) wasappointed as a Women Director on the board w.e.f. 1st September 2016. Inaccordance with Section 161 of the Act Mrs. Rakshaben Chauhan holds office up to the dateof the ensuing AGM of the Company and being eligible of her candidature for appointment asDirector. Your approval for her appointment as Director has been sought in the Noticeconvening the ensuing AGM of the Company.

Appointment of Company Secretary (KMP):

Further Mr. Kush Bhatt has been appointed as a Company Secretary and ComplianceOfficer of the Company with effect from 1st September 2016.

Appointment of Chairman Managing Director and Chief Financial Officer (KMPs):

Mr. Nilesh Patel (DIN: 05319890) has been appointed as Chairman & Whole TimeDirector of the Company w.e.f. 1st August 2016 for a period of three yearsi.e. from 1st August 2016 to 31st July 2019 as per provisions ofthe Companies Act 2013. He is devoting his full time for proper working and betterment ofthe Company and associated with the Company since Incorporation.

Mr. Rohit Chauhan (DIN: 06396973) has been appointed as a Managing Director on theboard w.e.f 1st August 2016 for a period of three years i.e. from 1stAugust 2016 to 31st July 2019.

Mr. Kamlesh Solanki has been appointed as a Chief Financial Officer (CFO) of theCompany w.e.f 1st September 2016 as per the provisions of the Companies Act2013.

Composition of Board of Directors:

Thus the Board of Directors of Company is a balanced one with an optimum mix ofExecutive and Non Executive Directors. They show active participation at the board andcommittee meetings which enhances the transparency and adds value to their decisionmaking. The Board of the Company is headed by an Executive Chairman. Chairman takes thestrategic decisions frames the policy guidelines and extends wholehearted support toExecutive Directors business heads and associates.

As on 31st March 2017 the Board of Company consists of Six (6) Directors.The composition and category of Directors as well as other details are as follow:

Name of Director Category DIN No. of Board Meeting attended last year Whether attended last AGM No. of membership in committee in other Public Limited Company
1 Mr. Nilesh N. Patel Promoter & Chairman 05319890 11 YES NIL
2 Mr. Rohitbhai B. Chauhan Promoter & Managing Director 06396973 11 YES NIL
3 Mr. Divya Monpara Promoter & Non- Executive Director 06396970 11 YES NIL
4 Mrs. Rakshaben R. Chauhan Non Executive Director 07600985 6 NO NIL
5 Mr. Manish Makodia Non Executive & Independent Director 07600988 7 NO NIL
6 Mr. Chaitnya Doshi Non Executive & Independent Director 07600986 5 NO NIL

Notes: i. Directorships exclude Private Limited Companies Foreign Companies andSection 8 Companies. ii. Chairmanship/Membership of Committee only includes AuditCommittee and Stakeholders' Relationships Committee in Indian Public Limited companiesother than Madhav Copper Limited. Members of the Board of the Company do not havemembership of more than ten

Board-level Committees or Chairperson of more than five such Committees. iii. None ofthe directors are related to each other except Mr. Rohitbhai Chauhan and Mrs.

Rakshaben Chauhan are related to each other. iv. Details of Director(s) retiring orbeing re-appointed are given in notice to Annual General Meeting. v. Brief profile of eachof the above Directors are given in the beginning of the report.

13.1 BOARD EVALUATION:

Pursuant to the provisions of the Companies Act 2013 and Regulation 17(10) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carriedout an annual performance evaluation of its own performance the directors individually aswell as the evaluation of the working of its Audit Nomination and Remuneration andCompliance Committees.

13.2 BOARD COMMITTEES AND THEIR MEETINGS

The Company has the following Committees of the Board along with details of itscompositions.

Name of Committee Members
1 Audit Committee Mr.Manish Makodia-Chairman
Mr. Chaitanya Doshi-Member
Mr. Nilesh Patel=Member
2 Nomination And Remuneration Committee Mr.Manish Makodia-Chairman
Mr. Chaitanya Doshi-Member
Mrs. Rakshaben Chauhan-Member
3 Stakeholders Relationship Committee Mr. Chaitanya Doshi-Member
Mr.Manish Makodia-Chairman
Mrs. Rakshaben Chauhan-Member

During the Year Under review following meetings were held and the details of membersattended meetings are given below:

Audit Committee:

During the year 4 meeting of Audit Committee were held as on 03.09.2016 27.12.201616.01.2017 and 01.02.2017 respectively.

Name Category Meeting held during the Year Meeting attended during the Year
Mr. Manish Makodia Independent Director 4 4
Mr.Chaitnya Doshi Independent Director 4 4
Mr. Nilesh Patel Chairman 4 4

Nomination and Remuneration Committee:

During the year 3 meeting of Nomination and Remuneration Committee were held as on05.09.2016 27.12.2016 and 01.02.2016 respectively.

Name Category Meeting held during the Year Meeting attended during the Year
Mr. Manish Makodia Independent Director 3 2
Mr.Chaitnya Doshi Independent Director 3 3
Mr. Nilesh Patel Chairman 3 3

Stakeholders Relationship Committee:

During the year 3 meetings of Stakeholders Relationship Committee were held as on05.09.2016 01.02.2017 and 22.03.2017 respectively.

Name Category Meeting held during the Year Meeting attended during the Year
Mr.Chaitnya Doshi Independent Director 3 3
Mr. Manish Makodia Independent Director 3 3
Mrs Rakshaben Chauhan Non Executive Director 3 2

13.3 REMUNERATION POLICY:

The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Policy on Nomination and Remuneration is available on the website of theCompany under Investor Info/Policies/Nomination and Remuneration Policy.

13.4 CODE OF CONDUCT:

The Board has laid down a Code of Conduct for all Board Members and Senior Managementof the Company which is posted on the website of the Company under InvestorInfo/Policies/Code of Conduct. All Board Members and Senior Management Personnel haveaffirmed compliance with the Code on an annual basis.

13.5 INSIDER TRADING:

The Board has in consultation with the Stakeholders' Relationship Committee laid downthe policy to regulate and monitor Insider Trading. The Committee regularly analyzes thetransactions and monitors them to prevent Insider Trading. The policy on Insider Tradingis available on the website of the Company under Investor Info/Polices/Code of Conduct forprevention of Insider Trading Policy.

13.6 MEETINGS:

During the year 11 Board Meetings 4 Audit Committee Meetings 3 Nomination andremuneration Committee Meetings and 3 Stakeholders Relationship Committee Meetings wereheld. The intervening gap between the Meetings was within the period prescribed under theCompanies Act 2013. Aforesaid 11 Board Meetings were held on 27.05.2016 18.06.201601.07.2016 29.07.2016 01.09.2016 05.09.2016 07.11.2016 16.01.2017 01.02.201702.02.2017 and 22.03.2017 respectively.

Details of Various Committee Meetings are given under respective heads.

13.7 DECLARATION OF INDEPENDENT DIRECTORS:

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.

14. WHITSLE BLOWER & VIGIL MECHANISM:

In pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013a Vigil Mechanism for directors and employees to report genuine concerns has beenestablished. The Vigil Mechanism Policy has been uploaded on the website of the Company atwww.madhavcopper.com under Investors/policies/Vigil Mechanism Policy link.

15. DIRECTORS RESPONSIBILITY STATEMENT:

In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submits its responsibility Statement:—

a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures; b) thedirectors had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitand loss of the Company for that period; c) the directors had taken proper and sufficientcare for the maintenance of adequate accounting records in accordance with the provisionsof this Act for safeguarding the assets of the Company and for preventing and detectingfraud and other irregularities; d) the directors had prepared the annual accounts on agoing concern basis; and e) the directors had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively. f) the directors had devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems were adequate andoperating effectively.

16. ANNUAL RETURN:

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule12 of the Companies (Management and administration) Rules 2014 is furnished in AnnexureIII and the same is enclosed to this Report.

17. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES:

The Company does not have any Subsidiary Joint venture or Associate Company.

18. DEPOSITS

The Company has neither accepted nor renewed any deposits during the year under review.

19. AUDITORS & AUDITORS' REPORT:

Statutory Auditor:

The Statutory Auditors M/s. Nirav Patel & Co. Chartered Accountants had expressedtheir inability to continue as Auditors of the Company and hence tendered theirresignation on 9th May 2017. Accordingly the Board had approached M/s. B. P.Shah & Associates Chartered Accountants to fill up the casual vacancy caused byresignation of M/s. Nirav Patel & Co. Chartered Accountants. M/s. B. P. Shah &Associates Chartered Accountants (FRN:117846W) signified their willingness to beappointed and declared their eligibility to be appointed as a Statutory Auditor of theCompany. Hence the Board of Directors vide its resolution passed on 10th May2017 had appointed M/s. B. P. Shah & Associates Chartered Accountants as StatutoryAuditors of the Company to fill up the casual vacancy.

As per provisions of section 139(8) of the Companies Act 2013 the appointment ofStatutory Auditors to fill up the casual vacancy caused by resignation of existingauditors needs to be approved and ratified by the members of the Company at a generalmeeting convened within a period of three months from the date of his appointment. Henceappointment of M/s. B. P. Shah & Associates Chartered Accountants as a statutoryauditor to fill up the casual vacancy caused by resignation of M/s. Nirav Patel & Co.Chartered Accountants has been recommended to be ratified.

It is further proposed to appoint M/s. Nirav Patel & Co. Chartered Accountants(FRN: 134617W) as a Statutory Auditors of the Company to hold the office from theconclusion of ensuing Annual General Meeting till the conclusion of tenth Annual GeneralMeeting.

M/s. Nirav Patel & Co. Chartered Accountants have signified their willingness tobe appointed and declared that they are eligible for appointment.

Statutory Auditors' Report:

The observation made in the Auditors' Report read together with relevant notes thereonare self explanatory and hence do not call for any further comments under Section 134 ofthe Companies Act 2013.

There is no qualification reservations or adverse remarks made by the Auditors.

Secretarial auditor:

M/s. Kashyap Shah & Co. Company Secretaries in practice Vadodara (COP No. 6672)was appointed as a Secretarial Auditor of the Company to conduct Secretarial Audit for thefinancial year 2016-17 as required under Section 204 of the Companies Act 2013 and Rulesthere under.

The Secretarial Audit Report for the financial year ended March 31 2017 is annexedherewith marked as Annexure IV to this Report.

Secretarial Auditor's Report:

The Secretarial Audit Report for the financial year ended 31st March 2017 isself-explanatory and does not call for any further comments.

There is no qualification reservations or adverse remarks made by the Auditors.

Internal Auditor:

As per Section 138 of Companies Act 2013 every Listed Company is required to appointan Internal Auditor or a firm of Internal Auditors.

The Board of directors are pleased to confirm the appointment of M/s. Nirav Shah &Co. as Internal Auditors of the company.

20. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

The Company has adequate system of internal control to safeguard and protect from lossunauthorized use or disposition of its assets. All the transactions are properlyauthorized recorded and reported to the Management. The Company is following all theapplicable Accounting Standards for properly maintaining the books of accounts andreporting financial statements. The internal auditor of the Company checks and verifiesthe internal control and monitors them in accordance with policy adopted by the Company.

The Company continues to ensure proper and adequate systems and procedures commensuratewith its size and nature of its business.

21. SHARES:

Buy-back of Securities:

The Company has not bought back any of its securities during the year under review.

Sweat Equity:

The Company has not issued any Sweat Equity Shares during the year under review.

Bonus Shares:

No Bonus Shares were issued during the year under review.

Employees Stock Option Plan:

The Company has not provided any Stock Option Scheme to the employees.

22. PARTICULARS OF EMPLOYEES:

None of the employee has received remuneration exceeding the limit as stated in Section197 of the Companies Act 2013 read with Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014.

23. COST AUDIT

Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Amendment Rule the activity of your Company does not fall under anysectors as specified under Rule 3 of Companies (Cost Records and Audit) Rules 2014 andhence maintenance of cost records as well as the cost audit as the case may be has notbeen applicable to the Company for the Financial Year 2016-17.

24. HUMAN RESOURCES:

During the period under review the personal and industrial relations with theemployees remained cordial in all respects. The management has always carried outsystematic appraisal of performance and imparted training at periodic intervals. TheCompany recognizes talent and has judiciously followed the principle of rewardingperformance.

25. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION

PROHIBITION AND REDRESSAL) ACT 2013:

The Company has zero tolerance for sexual harassment at its workplace. The Company hasadopted an Anti-harassment Policy in line with the requirements of the Sexual Harassmentof Women at Workplace (Prevention Prohibition and Redressal) Act 2013. InternalComplaint Committee are set up to redress complaints received regularly and are monitoredby women line supervisors who directly report to the Chairman & Managing Director. Allfemale employees are covered under the policy. There was no complaint received from anyemployee during the financial year 2016- 17 and hence no complaint is outstanding as onMarch 31 2017 for redressal.

26. DETAILS OF SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS OR COURT OR

TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

There were no material orders passed by the regulators or court or tribunals impactingthe going concern status and company's operations in future

27. MANAGEMENT DISCUSSION AND ANALYSIS:

The Management Discussion and Analysis Report is appended as Annexure V to this Report.

28. ACKNOWLEDGEMENTS

Your Directors place on record their sincere thanks to bankers business associatesconsultants and various Government Authorities for their continued support extended toyour Companies

Annual Report 2016-17

activities during the year under review. You Directors also acknowledge gratefully theshareholders for their support and confidence reposed on the Company.

For and on behalf of the Board of Directors of
MADHAV COPPER LIMITED
SD/- SD/-
Nilesh Patel Rohit Chauhan
Chairman & WTD Managing Director
(DIN : 05319890) (DIN: 06396973)
Place: Bhavnagar
Date : 14th July 2017