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 2018.
The financial performance of your Company for the year ended March 31 2018 issummarized below:
|Particulars ||2016-17 ||2017-18 |
|Total Income ||186.24 ||131.99 |
|Total Expenses ||182.58 ||127.76 |
|Net Profit after tax ||3.66 ||4.23 |
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 2017-18hence segment reporting as required by Accounting Standard 17 isnot 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.
Agriculture is the primary source of livelihood for about 58 per cent of India spopulation. Gross Value Added by agriculture forestry and fishing is estimated at Rs17.67 trillion (US$ 274.23 billion) in FY18.
The Indian food industry is poised for huge growth increasing its contribution toworld food trade every year due to its immense potential for value addition particularlywithin the food processing industry. The Indian food and grocery market is the world ssixth largest with retail contributing 70 per cent of the sales. The Indian foodprocessing industry accounts for 32 per cent of the country s total food market one ofthe largest industries in India and is ranked fifth in terms of production consumptionexport and expected growth. It contributes around 8.80 and 8.39 per cent of Gross ValueAdded (GVA) in Manufacturing and Agriculture respectively 13 per cent of India s exportsand six per cent of total industrial investment.
During 2017-18 crop year food grain production is estimated at record 284.83 milliontonnes. In 2018-19 Government of India is targeting food grain production of 285.2million tonnes. Milk production was estimated at 165.4 million tonnes during FY17 whilemeat production was 7.4 million tonnes. As of September 2018 total area sown with kharifcrops in India reached 105.78 million hectares.
India is the second largest fruit producer in the world. Production of horticulturecrops is estimated at record 307.16 million tonnes (mt) in 2017-18 as per second advanceestimates.
Total agricultural exports from India grew at a CAGR of 16.45 per cent over FY10-18 toreach US$ 38.21 billion in FY18. In April-August 2018 agriculture exports were US$ 15.67billion. India is the largest producer consumer and exporter of spices and spiceproducts. Spice exports from India reached US$ 3.1 billion in 2017-18. Tea exports fromIndia reached a 36 year high of 240.68 million kgs in CY 2017 while coffee exports reachedrecord 395000 tonnes in 2017-18.
Food & Grocery retail market in India was worth US$ 380 billion in 2017.
India s textiles sector is one of the oldest industries in Indian economy dating backseveral centuries. India's overall textile exports during FY 2017-18 stood at US$ 39.2billion.
The Indian textiles industry is extremely varied with the hand-spun and hand-woventextiles sectors at one end of the spectrum while the capital intensive sophisticatedmills sector at the other end of the spectrum. The decentralised power looms/ hosiery andknitting sector form the largest component of the textiles sector. The close linkage ofthe textile industry to agriculture (for raw materials such as cotton) and the ancientculture and traditions of the country in terms of textiles make the Indian textiles sectorunique in comparison to the industries of other countries. The Indian textile industry hasthe capacity to produce a wide variety of products suitable to different market segmentsboth within India and across the world.
The Indian textiles industry currently estimated at around US$ 150 billion isexpected to reach US$ 250 billion by 2019. India s textiles industry contributed seven percent of the industry output (in value terms) of India in 2017-18.It contributed two percent to the GDP of India and employs more than 45 million people in 2017-18.The sectorcontributed 15 per cent to the export earnings of India in 2017-18.
The production of raw cotton in India is estimated to have reached 34.9 million balesin FY18.
The company has relatively good strength in textile trading. Total revenue of thecompany grew in Financial Year 2018 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 3%.
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 business 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 developments 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 the financial year 2017-18.
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 are loan given and investment made however guarantee or security is not providedby the Company 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.
Mr. Satish Raval Director of the Company retires by rotation and being eligible offerhimself for re-appointment. The Board appreciates his contribution & co-operation tothe Company during his tenure & wishes a grand success in his venture. Further otherthan this there were no changes in the Board of Directors for the year under review.
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.
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 self- explanatory 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 31st March2018 the applicable accounting standards have been followed along with proper explanationrelating 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 31st March2018.
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 2017-18.
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 focused in identifying and prioritizing the risksrole of various executives in monitoring & mitigation of risk and reporting process.
It 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 2018 in prescribed form dulyaudited by the Practicing Company Secretary Jaymin Modi & Co. Mumbai is annexedherewith 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 2017-18. 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 a Companywide 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 risk managementframework which helps to identify various risks cutting across its business lines. Therisks are identified and are discussed by the representatives from various functions. RiskOfficer will make a presentation periodically on risk management to the Board of Directorsand the Audit Committee. The Board and the Audit Committee provide oversight and reviewthe risk Management policy periodically.
Individual Shareholders holding shares singly or jointly in physical form can nominatea person in whose name the s hares shall be transferable in case of death of theregistered shareholder(s). Nomination form SH-13 ([Pursuant to section 72 of the CompaniesAct 2013 and rule 19(1) of the Companies (Share Capital and Debentures) Rules 2014] canbe obtained from the Company's Registrar and Share Transfer Agent. It is also available onPublic domain.
Corporate Social Responsibility:
The Section 135 of the Companies Act 2013 regarding Corporate Social ResponsibilityCommittee is not applicable to the Company 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 surveillance measures &Company has submitted also necessary explanations to BSE Limited from time to time.
Presentation of Financial Statements:
The financial statements of the Company for the year ended 31st March 2018 have beendisclosed 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 2017-2018 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 an Annexureto the Director Report. Details as required under the provisions of section 197 (12) ofthe 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 of the samewill be made available to any shareholders on request. A cash flow statement for the year2017-18 is attached with the Balance- Sheet.
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 of competence dedicationand commitment to your Company.
For and on behalf of the Board of Directors of Shri Mahalaxmi Agricultural DevelopmentLimited
|Satish Vadilal Raval ||Bhavanaben M Panchal |
|Director ||Director |
|DIN: 02420923 ||DIN: 07138168 |
|Place: Ahmedabad || |
|Date: 21/08/2018 || |