SVARAJ TRADING AND AGENCIES LIMITED
The Directors are pleased to present the 37th Annual Report together withthe Audited Financial Statements for the financial year ended March 31 2017. TheManagement Discussion and Analysis is also included in this Report.
1. FINANCIAL PERFORMANCE
The brief financial results of the Company are as detailed below:
| || ||[In Rs.] |
|Particulars ||Year ended 31st ||Year ended 31st |
| ||March 2017 ||March 2016 |
|Total Revenue ||44466277 ||73772830 |
|Profit/(Loss) before taxation ||13578270 ||10728189 |
|Less: Tax Expense ||3011091 ||3547061 |
|Profit/(Loss) after tax ||10567179 ||7181128 |
2. OPERATION AND STATE OF THE AFFAIRS OF THE COMPANY
During the financial year ended on March 31 2017 your Company reported a negativegrowth in revenue from operation over the previous year. The revenue from operations stoodat Rs. 4.44 crores as compared with Rs. 7.37 crores in the previous year. The profitbefore tax stood at Rs.1.35 crores as against profit of Rs. 1.07 crores in the previousyear. The net profit for the year stood at Rs. 1.05 crores against profit of Rs.0.72crores reported in the previous year.
At present your Company is doing its existing line business to the optimum use of itsresources and is taking the effort to improve its Earning per Share (EPS) and managementhas no plan of venturing into any new business.
3. CHANGES IN THE NATURE OF BUSINESS IF ANY
During the year the company is in the business of general trading. There is no changein nature of the business of the Company. The Company has its registered office at Mumbai.
4. OVERVIEW OF THE ECONOMY AND ANALYSIS
As per the latest GDP growth estimates Indian economy low by 7% in FY 17 compared to7.9% in FY16 mostly due demonetization initial stage of GST implementation slow growthin the other parts of the world. However inflation showed signs of moderation a welcomesign - wholesale price and consumer price inflation declined. Reduced inflation fallingcrude oil prices stable Rupee improved purchasing power and consumer spending highercapital inflows supported by the government policy reforms have already put India on anaccelerating growth track an improved the business outlook.
Reforms like e-auctions of coalmines and telecom FDI hike in insurance speedierregulatory approvals etc. will be critical growth enablers to de-bottleneck stalledprojects improve the investment outlook and the ease of doing business in the country.Reforms currently underway such as GST implementation Amendment on Land Acquisition BillLabour Reforms etc. are expected to provide the requisite thrust for growth in themedium-term.
Opportunities and Challenges
Being a major employer in India coupled with strong industry linkages with the ruraleconomy augurs trading activities as one of the most significant sectors with anincremental growth potential. Rural economy has seen a spurt in income levels the last fewyears and this is the right time to promote trade and investment. Being one of the keyfocus sectors under the Government's ''Make in India'' campaign is a testimony to the hugegrowth potential the trading and investment activities. Globally favorable trade policyreforms would also allow the trade and investment to expand its trade partners improveits export competitiveness and contribute substantially to the nation's income.
However the trading and investment are constrained with many challenges includingrising costs (wages inventory and interest costs) intensified competition from other lowcost countries and political risk to implement the reforms like GST etc. Such issues needto be addressed to result in unlocking maximum growth potential.
5. DIVIDEND AND RESERVES
After considering the financial results for the financial year 2016-17 your Directorsare of the opinion that it is prudent that no dividend be declared for the year underreview so that the profits earned in the financial year can be ploughed back and utilizedtowards various growth and other expansion plans.
6. SHARE CAPITAL
The paid-up equity share capital as at March 31 2017 stood at Rs. 147500000 (RupeesFourteen Crores Seventy five lacs). There is no change in the share capital of the companyduring the financial year.
7. SUBSIDAIRY AND ASSOCIATES COMPANIES
As on March 31 2017 the Company has no subsidiary or associates company or jointventures company.
8. CONSOLIDATED FINANCIAL STATEMENT
The Company is not required to consolidate its financial statements in terms of theprovision of Section 129(3) of the Companies Act 2013 and Rules made there-under duringthe financial year.
9. CORPORATE GOVERNANCE
A Report on Corporate Governance as required in terms of the provisions of Schedule Vof the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 togetherwith the Auditor's Certificate thereon is annexed herewith.
10. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 as requiredunder Section 92 of the Companies Act 2013 is annexed herewith as Annexure - A and formsan integral part of this report.
11. DIRECTORS AND KEY MANAGERIAL PERSONNEL
In terms of the provision of section 152 of the Companies Act 2013 and of Articles ofAssociation of the Company Ms. Rekha Soni Director of the Company retires by rotation atthe ensuing Annual General Meeting and being eligible seeks re-appointment.
All Independent Directors had furnished to the Company a declaration under Section149(7) of the Companies Act 2013 stating that they meet criteria of Independence asprovided under section 149(6) of the Companies Act 2013 and SEBI Listing Regulations.
12. BOARD EVALUATION INDUCTION AND TRAINING OF BOARD MEMBERS
Pursuant to the provisions of the Companies Act 2013 the Board has carried out anannual performance evaluation of its own performance the Directors individually as wellas evaluation of the working of the Board and its Committees culture execution andperformance of specific duties obligations and governance.
The performance evaluation of the Independent Directors was completed. The performanceevaluation of the Chairman and the Non-Independent Directors was carried out by theIndependent Directors. The Board of Directors expressed their satisfaction with theevaluation process.
The process followed by the Company for induction and training to Board members hasbeen explained in the Corporate Governance Report.
13. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY COMPANY
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to financial statements.
14. WHISTLE BLOWER POLICY
The Company has a whistle blower policy to report genuine concerns or grievances. TheWhistle Blower policy has been posted on the website of theCompany.(www.svarajtrading.com)
15. REMUNERATION AND NOMINATION POLICY
The Board of Directors has framed a policy which lays down a framework in relation toremuneration of Directors Key Managerial Personnel and Senior Management of the Company.This policy also lays down criteria for selection and appointment of Board Members. Theremuneration and nomination policy has been posted on the website of the Company(www.svarajtrading.com).
16. RELATED PARTY TRANSACTIONS AND POLICY
The Company has developed a related party transactions framework through standardoperating procedures for the purpose of identification and monitoring of transactions withthe related parties.
The policy on related party transactions as approved by the Board of Directors has beenuploaded on the website of the Company. None of the Directors has any pecuniaryrelationship or transactions vis-d-vis the Company.
The details of transactions entered into with the related parties are givenhere-in-below in form AOC-2 in terms of the provision of section 188(1) including certainarm's length transactions:
A. Details of contract or arrangement or transactions not at arms' length basis; Nil
|a. ||Name(s) of the related party and nature of relationship ||NA |
|b. ||Nature of contract /arrangements/transaction ||NA |
|c. ||Duration of contract /arrangements/transaction ||NA |
|d. ||Salient terms of contract /arrangements/transaction including the value if ||NA |
| ||any || |
|e. ||Justification for entering into such contract / arrangements/ transaction ||NA |
|f. ||Date(s) of approval by the Board ||NA |
|g. ||Amount paid as advances if any ||NA |
|h. ||Date on which special resolution was passed in general meeting as required ||NA |
| ||under first proviso to section 188 || |
|B. Details of contract or arrangement or transactions at arms' length basis: || |
|a. Name(s) of the related party and nature of relationship ||NA |
|b. Nature of contract /arrangements/transaction ||NA |
|c. Duration of contract /arrangements/transaction ||NA |
|d. Salient terms of contract/arrangements/transaction including the value if any ||NA |
|e. Date(s) of approval by the Board ||NA |
|f. Amount paid as advances if any ||NA |
17. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators/Courts that wouldimpact the going concern status of the Company and its future operations.
18. DIRECTORS' RESPONSIBILITY STATEMENT
To the best of knowledge and belief and according to the information and explanationsobtained by them your Directors make the following statement in terms of Section134(3)(c) of the Companies Act 2013:
i. that in the preparation of the Annual Accounts for the year ended March 31 2017the applicable accounting standards have been followed along with proper explanationrelating to material departures if any; ii. 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 as at March 31 2017 and of the profit of theCompany for the year ended on that date; iii. that the Directors have taken proper andsufficient care for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act 2013 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities; iv. the annual accounts have beenprepared on a going concern basis; v. that the Directors had laid down internal financialcontrols to be followed by the Company and that such internal financial controls areadequate and were operating effectively; and vi. That the Directors had devised propersystems to ensure compliance with the provisions of all applicable laws and that suchsystems were adequate and operating effectively.
19. STATUTORY AUDIT
Pursuant to recommendation of the Audit Committee and the Board of Directorsappointment of R Soni & Co. Chartered Accountants (Firm Registration No: F130349W)in place of S. G. Kabra & Co. Chartered Accountants (Firm Registration No: 104507W)is recommended to appoint as statutory auditor of the company to hold office for a periodof five (5) years from the conclusion of this annual general meeting until the conclusionof forty-second annual general meeting of the company subject to ratification byshareholders at each annual general meeting to be held hereafter.
As required under the provisions of Section 139 of the Companies Act 2013 the Companyhas obtained written confirmation from R Soni & Co. Chartered Accountants (FirmRegistration No: F130349W)that their Appointment if made would be in conformity with thelimits specified in the said Section.
20. COST AUDIT
Provision of Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Rules 2014 are not applicable to the Company during the financial yearunder review.
21. SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethere under the Company has appointed R M Mimani & Associates LLP CompanySecretaries to undertake the Secretarial Audit of the Company. The Secretarial AuditReport (Form MR-3) is annexed herewith as Annexure - B and forms an integral part of thisreport.
22. INTERNAL AUDIT
As per Section 138 of the Companies Act 2013 the Company has appointed M.H.Parihar & Co. Chartered Accountants. as an internal auditor for the year 2017-18to conduct the internal audit and to ensure adequacy of the Internal controls adherenceto Company's policies and ensure statutory and other compliance through periodical checksand internal audit.
23. INTERNAL FINANCIAL CONROL AND THEIR ADEQUACY
Your Company has policies procedures and effective internal controls for ensuringorderly and efficient conduct of the business safeguard of its assets prevention anddetection of fraud and errors accuracy and completeness of the accounting record timelypreparation of financial statements and proper disclosure.
During the financial year such controls were tested and no reportable materialweakness in the design or operation was observed.
The internal and operational audit is conducted on regular basis. The main thrust ofinternal audit is to test and review controls appraisal of risks and business processesbesides benchmarking controls with best practices in the industry.
24. RISK MANAGEMENT
During the financial year under review the Company has identified and evaluateselements of business risk. Consequently a Business Risk Management framework is in place.The risk management framework defines the risk management approach of the Company andincludes periodic review of such risks and also documentation mitigating controls andreporting mechanism of such risks. The framework has different risk models which help inidentifying risks trend exposure and potential impact analysis at a Company level as alsoseparately for business.
Some of the risks that the Company is exposed to are:
The Company's policy is to actively manage its various financial risks within theframework laid down. Given the interest rate fluctuations the Company has adopted aprudentand conservative risk mitigation strategy to minimize interest costs.
Commodity Price Risks
The Company is exposed to the risk of price fluctuation of goods in which it trades.The Company proactively managesthese risks through forward booking inventory managementand proactive vendor development practices.
The Company is exposed to risks attached to various statutes andregulations. TheCompany is mitigating these risks through regular review of legal compliances carriedoutthrough internal as well as external compliance audits.
25. CORPORATE SOCIAL RESPONSIBILITY (CSR)
Provision of Schedule VII of the Companies Act 2013 read with Companies CorporateSocial Responsibility Policy) Rules 2014 are not applicable to the Company during theyear under review.
26. AUDITOR'S CERTIFICATE ON CORPORATE GOVERNANCE:
As required by SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the
Auditor's Certificate on Corporate Governance is set out in this Annual Report. TheAuditor's
Certificate for the year 2017 does not contain any qualification reservation oradverse remark.
27. ENVIRONMENT AND SAFETY
The Company is conscious of the importance of environmentally clean and safeoperations. The Company's policy requires conduct of operations in such a manner so as toensure safety of all concerned compliances environmental regulations and preservation ofnatural resources.
As required by the Sexual Harassment of Women at Workplace (Prevention Prohibition& Redressal) Act 2013 the Company has formulated and implemented a policy onprevention of sexual harassment at workplace with a mechanism of lodging complaints. Itsredressal is placed on the intranet for the benefit of its employees.
During the year under review no complaints were reported to the Board.
28. STATUTORY INFORMATION
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo pursuant to Section 134(3)(m) of the Companies Act 2013 read with theRule 8(3) of the Companies (Accounts) Rules 2014 are not applicable to the Company duringthe financial year under review.
The information required under Section 197 of the Companies Act 2013 read with rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are not applicable to the Company during the financial year under review.
The Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014.
The Business Responsibility Reporting as required under SEBI (LODR) 2015 and is notapplicable to your Company for the financial year under review.
Disclosure as required under para F of Schedule V of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 are not applicable to the Company during thefinancial year.
29. CAUTIONARY STATEMENT
Statements in this Directors' Report & Management Discussion and Analysisdescribing the Company's objectives projections estimates expectations or predictionsmay be "forward-looking statements" within the meaning of applicable securitieslaws and regulations. Actual results could differ materially from those expressed orimplied.
30. PARTICULARS OF EMPLOYEES:
The information required pursuant to Section 197 of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is notapplicable to the company as there was no employee employed in the company during theyear.
Your Directors wish to thank all the stakeholders who have contributed to the successof your Company. Your Directors wish to place on record their appreciation forthecontribution made by employees at all levels. Your Directors also wish to thank itscustomers dealers agents suppliers investors and bankers for their continued supportand faith reposed in the Company.
For and on behalf of the Board of Directors of
SVARAJ TRADING AND AGENCIES LIMITED
|Sd/- ||Sd/- |
|Harendra Kumar Gupta ||Shankar Das Vairagi |
|Managing Director ||Director |
|DIN:05335662 ||DIN:01869965 |
|Place: Mumbai || |
|Dated: August 11 2017 || |