Your Directors have pleasure in presenting the TWENTY SEVENTH ANNUAL REPORT togetherwith the Audited Financial Statements of the company for the financial year ended 31stMarch 2017.
1. FINANCIAL HIGHLIGHTS:
The performance of the company for the financial year ended 31st March 2017 issummarized below.
(Rupees In Lakhs)
|PARTICULARS || |
|Gross Revenue ||262.24 ||411.04 |
|Total Expenditure ||394.35 ||493.06 |
|Profit/ (Loss) before Financial Charges ||(132.12) ||(82.02) |
|Depreciation and Taxation || || |
|Less : Financial Charges ||0.73 ||16.39 |
|Depreciation ||41.83 ||23.86 |
|Profit/(Loss) before Tax (PBT ) ||(174.68) ||(122.28) |
|Less/Add: Profit/ loss on sale / discard nation of Fixed Assets ||0 ||0 |
|Less : (Income Tax) ||0 ||0.53 |
|Add: Provision for Fringe Benefit Tax ||0 ||0 |
|Add: Provision for Deferred Tax Liability / (Asset) ||12.86 ||(6.96) |
|Profit/(Loss) after Tax ||(187.54) ||(115.85) |
2. STATEMENT OF COMPANY AFFAIRS:
Your Company has achieved a Turnover of Rs.262.24 Lacs when compared to Rs 411.04 lacsduring the previous year. The operations of the Company resulted in loss of Rs.187.54 lacswhen compared to loss of Rs.115.85 Lacs during the previous year.
3. FUTURE OUTLOOK:
The management has done well to ensure sustain operations. However due to low incomehigh cost and expenditure the operations resulted in loss as specified above. Effortsare being made to improve the turnover and reduce the costs involved in the coming yearsand also for improving the overall business activities of the Company.
The Management is also looking to revive the loss in the ensuing financial year.
Your Directors do not recommend any dividend for the financial year 2016-2017 in viewof the operating loss in the current year and accumulated losses.
The company has not accepted any deposits during the year. .
6. TRANSFER TO RESERVES:
During the year no amount was transfered to General Reserve.
7. CHANGE IN THE NATURE OF BUSINESS:
During the year there was no change in the nature of the business of the company.
8. DISCLOSURE UNDER SECTION 164(2) OF THE COMPANIES ACT 2013
The company has received the disclosure in Form DIR-8 from its Directors beingappointed or re- appointed and has noted that none of the Directors are disqualified undersection 164(2) of the companies Act 2013 read with Rule 14(1) of Companies Appointmentand Qualification of Director Rules 2014
9. SUBSIDAIRY COMPANIES:
The Company does not have any subsidiary Companies as on 31st March 2017.There are noAssociate Companies within the meaning of Section 2(6) of the Companies Act 2013. Thequestion of material change of the business of the subsidiaries/Associates does not arise.
10. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTSRELATE AND THE DATE OF THE REPORT:
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial statements relateon the date of this report.
11. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OFTHE COMPANY:
The Company has in place a business risk management framework for identifying risks andopportunities that may have a bearing on the organization's objectives assessing them interms of likelihood and magnitude of impact and determining a response strategy. YourCompany follows wellestablished and detailed risk assessment and minimizationprocedures which are periodically reviewed by the Board.
The Company has laid down a well-defined risk management mechanism covering riskmapping risk exposure and risk mitigation process. The Companys Risk ManagementPolicy has been developed to include various categories such as Human ResourcesFinancial Business Processes and Systems strategy Corporate Governance and Complianceand Information Security.
A detailed exercise has been carried out to identify evaluate manage and monitor therisks which shall help the Company to take pro-active decisions and avoid all financialimplications. The Board periodically reviews the risks and suggests steps to be taken tocontrol and mitigate the same through a properly defined framework.
The risk management includes identifying types of risks and its assessment riskhandling and monitoring and reporting.
Further the Board ensures risk reporting and updates risk policy compliances andprovide overall guidance and support to business risk owners.
12. CORPORATE SOCIAL RESPONSIBILITY:
Since your Company does not have profits in accordance with provisions of the CompaniesAct 2013 and Rules made there under for the past three years hence did not implementcorporate social responsibility policy.
13. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT 2013:
The Company has not given any Loans or Investments made under Section 186 of theCompanies Act 2013 to other Bodies Corporate or persons as referred thereto during thefinancial year. However it has enhanced guarantee to M/s HDFC Bank Ltd on behalf of M/sMidwest Granite Pvt. Ltd its Holding Company for an amount of Rs. 405000000/- from Rs.255000000/- which is well within the limits of prior approval of the Share Holders videSpecial Resolution dated 07.03.2012 (Announcement Date of result of Postal ballot) dulypassed following the provisions of the earst while Companies Act 1956 and relevant Rulesmade there under in the year 2015-2016.
14. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:
The transactions entered with related parties for the year under review were on armslength basis and in the ordinary course of business. Since the provisions of Section 188of the Companies Act 2013 are not attracted the disclosure in Form AOC- 2 is notrequired. Further there are no material related party transactions as applicable underthe SEBI (LODR) Regulations 2015 during the year under review with the PromotersDirectors or Key Managerial Personnel. However pursuant to Section 134(3)(h) & Rule8(2) of the Companies (Accounts) Rules 2014 AOC-2 is enclosed as Annexure-1.Further the Audit Committee has reviewed the Related Party transactions in accordance withthe applicable provisions.
15. EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS:
There were no qualifications reservations or adverse remarks made either by theAuditors or by the Practicing Company Secretary in their respective reports.
16. COMPANYS POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATIONAND DISCHARGE OF THEIR DUTIES:
The Board has framed a Policy relating to appointment of Directors payment ofManagerial remuneration Directors qualifications positive attributes independenceof Directors and other related matters as provided under Section 178 (3) of the CompaniesAct 2013 based on the recommendation of Nomination and Remuneration Committee. Thedetails of this Policy is explained in the Corporate Governance Report.
17. DIRECTORS AND KEYMANAGERIAL PERSONNEL INFORMATION:
a). Reappointment of Retiring Director:
In accordance with the provisions of the Companies Act 2013 Mr. P.K.TYAGI Director isretiring at the ensuing Annual General Meeting and being eligible offers himself forreappointment.
b). Appointment of Whole Time Director
Mr. Deepak Kukreti Director was appointed as Whole Time Director w.e.f 28th Day ofOctober 2016 to monitor and enhance the operations of the Company by your Board ofDirectors subject to your approval in the ensuing Annual General Meeting. Your directorsrecommended to approve his appointment as Whole Time Director for Five years from28.10.2016.
18. DECLARATION OF INDEPENDENT DIRECTORS:
The Independent Directors submitted their disclosures to the Board that they fulfillall the requirements as stipulated in Section 149(6) of the Companies Act 2013 so as toqualify themselves as Independent Directors under the provisions of the Companies Act2013 and the relevant rules as per the applicable SEBI (LODR) Regulations 2015.
19. EVALUATION OF THE BOARDS PERFORMANCE:
In compliance with the requirements of Section 134(3) (p) of the Companies Act 2013and 17(10) of SEBI(LODR) Regulations 2015 the performance of the Board was carried outduring the year under review. The Board was evaluated for its performance based on thefollowing factors:
i. Attendance of Board Meetings and Committees;
ii. Contribution made to the Board discussions and future planning;
iii. Level of commitment to the stakeholders interest;
iv. Initiatives towards the growth of the business and profitability;
v. Providing outlook view points and feedback taking the Company ahead beyondexpectations.
The evaluation involves Self-Evaluation by the Board Member and thereafter in thefollowing manner: a) Individual Directors - The performance of the individualDirectors is evaluated by the Nomination and Remuneration Committee.
b) Board and Committees The Board evaluated its own performance and also of theCommittees taking into consideration the above mentioned factors. A member of the Boarddoes not participate in the discussion of his / her evaluation.
20. DIRECTORS RESPONSIBILITY STATEMENT:
The Directors of your Company hereby report:
(i) that in the preparation of Annual Accounts for the financial year ended 31st March2017 the applicable accounting standards have been followed along with the properexplanation relating to material departures if any there from;
(ii) 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 that period;
(iii) that the directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;
(iv) that the directors have prepared the annual accounts on a going concern basis.
(v) they have laid down internal financial controls to be followed by the Company andsuch internal financial controls are adequate and operating effectively;
(vi) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively. Based onthe framework of internal financial controls and compliance systems established andmaintained by the Company work performed by the internal statutory and secretarialauditors and external consultants and the reviews performed by management and the relevantboard committees including the audit committee the board is of the opinion that theCompanys internal financial controls were adequate and effective during thefinancial year 2016-17.
21. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information regarding Energy Conservation Technology Absorption Foreign ExchangeEarnings and Outgo as required by section 134(3)(m) of the Companies Act 2013 read withRule 8(3) of the Companies (Accounts) Rules 2014 are given as Annexure -2 andforms part of this report.
22. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW:
The Company has conducted Five(5) Board Meetings during the financial year . TheBoard Meetings were held in compliance with the provisions of the Companies Act 2013. Thevarious committee meetings are held in accordance with the applicable provisions of theCompanies Act 2013 relevant rules made there under and SEBI (LODR) Regulations 2015.The details of the same are provided in the Corporate Governance Report.
23. STATUTORY AUDITORS:
M/s. G.L. Kothari & Co. Chartered Accountants Bangalore the Statutory Auditorsof the Company hold the office till the conclusion of 27th Annual General Meeting of theCompany pursuant to the retiring provisions of the Companies Act 2013 and relevant Rulesmade there under. The Board has recommended the appointment of M/s. B R N Murthy andAssociates Chartered Accountants Bangalore ( Firm Registration Number - 011309 S) asStaturoty Auditors of the Company in their place for the term of Five consecutive yearsfrom the conclusion of 27th AGM of the Company scheduled to be held in the year 2017 tillthe conclusion of 32nd AGM to be held in the year 2022 for the approval of share holdersof the Company based on the recommendation of the Audit Committee.
Further the Company has received letter from the auditors to the effect that theirappointment if made would be within the prescribed limits under Section 141(3)(g) of theCompanies Act 2013 and that they are not disqualified for appointment.
24. AUDIT REPORT
The Notes to Accounts referred to in the Auditors Report are self explanatory andtherefore do not call for any further comments.
25. INTERNAL AUDIT:
Your Company continuously invests in strengthening its internal control process andappointed Mr. I.Venkateswarlu M.Com LLM who is having vast experience in the field ofaccounts finance legal costing etc as Internal Auditor of the Company The Company hasput in place an adequate system of internal control commensurate with its size and natureof business. These systems provided a reasonable assurance in respect of providingfinancial and operational information complying with applicable statutes safe guardingassets of the Company and ensuring compliance with Corporate Policies. Procedures toensure conformance with policies standards and delegation of authority have been put inplace covering all activities. Audit Committee periodically reviews the performance ofinternal audit system.
The Company has rigorous business planning system to set the targets and parameters foroperations which are reviewed with actual performance to ensure timely initiation ofcorrective action if required. The Audit Committee reviews adherence to the internalcontrol system and internal audit reports. Further the Board actually reviews theeffectiveness of the Companys internal control system.
26. SECRETARIAL AUDIT:
In accordance with the provisions of Section 204 of the Companies Act 2013 read withRule 9 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 the Company has got the Secretarial Audit conducted from the Practicing CompanySecretary.
A Secretarial Audit Report issued by Mr. G.Shyam Krishna Company Secretary inPractice in Form MR-3 in respect of the secretarial audit of the Company for thefinancial year ended 31st March 2017 is provided in Annexure -3.
27. COST AUDIT
The Company is not required to maintain cost records as per the Companies (Cost Recordsand Audit) Amendment Rules 2014 as the turnover of the Company for the financial year2016-2017 was below Rs. 35 Crores.
28. EXTRACT OF ANNUAL RETURN:
The extract of Annual Return (MGT 9) pursuant to the provisions of Section 92read with Rule 12 of the Companies (Management and administration) Rules 2014 isfurnished in Annexure-4 and is attached to this Report.
29. CORPORATE GOVERNANCE:
Pursuant to the Regulation 15(2) of SEBI (LODR) Regulations 2015 the Regulationspertaining to the Corporate Governance i.e 17 to 27 & Clauses b to i of sub regulation46(2) and para C D & E of schedule V are not applicable to the Company since the networth is less than 25 Crores and the paid up capital is less than 10 Crores as on thelatest Audited Balance Sheet.
However the Company has implemented the procedures and adopted practices in conformitywith the Code of Corporate Governance of the SEBI(LODR) Regulations 2015 to the extentapplicable read with the provisions of the Companies Act 2013 and relevant rules madethere under . A separate report on Corporate Governance is annexed herewith as a part ofthe Annual Report along with the Auditor's Certificate on its compliance.
30. PARTICULARS OF EMPLOYEES:
Comparison of the Remuneration of the KMP against the performance of the company.Further the Company has no person in its employment drawing salary of Rs. 60 lacs perannum or Rs. 5 lacs per month as defined under the provisions of Section 197 of theCompanies Act 2013 read with Rule 5(2) and 3 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014.
Your Companys shares are presently listed on the Stock Exchange of Bombay. Thecompany is regular in payment of listing fee to BSE.
32. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE COURTS/ REGULATORS.
During the year there were no significant and material orders passed by the Courts/Regulators.
33. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Management Discussion and Analysis Report pursuant to Regulation 34 of the SEBI(LODR)Regulations 2015 forms part of this Report and is annexed hereto.
34. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM:
The Company has constituted an Audit Committee as required under Section 177 of theCompanies Act 2013 and has also established Vigil Mechanism for their employees andDirectors to report their genuine concerns or grievances.
The details of the same are explained in the Corporate Governance Report. The Board hasaccepted all the recommendations of the Audit Committee during the year under review asand when brought to their notice.
The Board of Directors would like to place on record its appreciation towards all theemployees & the managerial personnel of the company for their contribution in theoperations of the company during the year under review. The Directors would also like torecord their sincere thanks to the Companys bankers Central and State Governmentofficials customers vendors and the shareholders for their continued support andcooperation.
| || ||BY THE ORDER OF THE BOARD |
| || ||For MIDWEST GOLD LIMITED |
| ||K.Deepak ||B.S.Raju |
| ||Whole Time Director ||Whole Time Director |
| ||(DIN: 03146700) ||(DIN: 01431440) |
|Place: Hyderabad || || |
|Date: 14.08.2017 || || |