DIRECTORS' REPORT TO THE MEMBERS, The Directors have pleasure in submitting the Annual Report together with the Statement of Accounts of your Company for the year ended 31st March, 2016. Transfer to Reserves Due to Carry forward loss of previous years the Company has not transferred any amount to General Reserve in the current year. Highlights / Performance of the Company The company discontinued the operation of horticulture production during the year. Total income of the company was Rs. 92.87 lacs during the year. Management Discussion and Analysis a) Industry Structure and Developments Due to extreme weather conditions and poor quantity of water supply at our site, carrying out horticulture operations have become unviable and hence the said activity has been discontinued. Presently the Company has existing infrastructure facility and also land available for undertaking any kind of activities in future. b) Opportunities and Threats The Management is considering undertaking of viable business activities in the existing infrastructure facility and land available with the Company. There is no specific threat identified which may affect the existence of the Company. c) Outlook The Future outlook of the Company depends upon the business activities to be undertaken by the Company. The Company is looking for various options for undertaking suitable business activities commensurate with its existing facilities and infrastructure. d) Risks and Concerns At present the Company is exposed to the common risks such as any uncertainties / drastic changes in government policies,delay in economic reforms, emergence of inflationary conditions, any unexpected changes in regulatory framework etc. e) Internal Control Systems and their adequacy The company has computerized its accounting system since many years. Adequate Internal control system exists in the Company and the internal control system of the company is commensurate with the size and complexity of the company's business. The operations are subject to periodic internal audit by independent Auditors. f) Financial performance with respect to operational performance is discussed in the main part of the Report. g) Material Developments in Human Resources, Industrial Relations, Environment, Health & Safety The company values and nurtures its human resources and company would continue to adopt and implement the best HRD practices in future. Manpower strength of the company as on March 31, 2016 stands at 7. Conservation of energy, technology absorption and foreign exchange earnings and outgo The information required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as a separate Annexure-I. Particulars of contracts or arrangements with related parties All transactions entered into with Related parties as defined under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 during the financial year were in the ordinary course of business and on an arm's length basis and do not attract the provisions of Section - 188 of the Act. There were no materially significant related party transactions made by the Company with Directors, Key Managerial Personnel or other designated Persons which may have a Potential Conflict with the interest of the Company at large. All related party transactions were placed before the Audit Committee and also the Board for approval. The Policy on related Party transactions as approved by the Board is uploaded on the Company's website i.e. www.madhusudan-india.com The particulars of contracts or arrangement with related Parties as per Section 188(1) of the Companies Act 2013, including arm's length transactions as per Form No. AOC - 2 are enclosed as separate Annexure - II. Director's Responsibility Statement In compliance of Section 134(5) of the Companies Act, 2013, the Directors of your Company confirm: - that in the preparation of annual accounts, the applicable accounting standards have been followed and there are no material departures; - that such accounting policies have been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2016 and of the Profit of the Company for the year ended on that date; - that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; - that the annual accounts have been prepared on a going concern basis; - that internal financial controls have been laid down to be followed by the company and that such internal financial controls are adequate and were operating effectively; - that proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. Managerial Remuneration and Employees Details required pursuant to Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are enclosed as a separate Annexure-III. The Company has no employee as specified under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, hence, there is no information required to be provided in this regards. Company has not offered its shares to its employees under ESOS during the year under review. Company has not sanctioned loan to any of its employees for purchase of company's shares under any scheme Corporate Governance Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, report on Corporate Governance has been included in this Annual Report as a separate Annexure - V. As per the circular ref. no. CIR/CFD/POLICY CELL/7/2014 dated 15th September, 2014 and as per Regulation 15 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company is not required to comply with the provisions of Clause 49 of Listing Agreement and Regulations 17 to 27 and Clauses (b) to (i) of sub-regulation (2) of Regulation 46 and para C, D and E of Schedule V respectively, but the Company has complied with the same voluntarily. Number of Meetings of the Board The Board of Directors, during the financial year 2015-16 duly met 4 times on 27.05.2015, 07.08.2015, 05.11.2015 and 05.02.2016 in respect of which meetings, proper notices were given and the proceedings were properly recorded and signed in the Minutes Book maintained for the purpose. Extract of Annual Return The details forming part of the extract of the annual return in Form No. MGT-9 is annexed herewith as a separate Annexure- IV. Particulars of Loans, guarantees or investments u/s 186 The loans if any, made by the Company are within the limits prescribed u/s 186 of the Companies Act, 2013 and no guarantee or security is provided by the Company. Details of Investments covered u/s 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. Risk Management Policy The Board has approved and implemented risk management Policy of the Company including identification and element of risks. The Risk Management is overseen by the Audit Committee / Board of Directors of the Company on a continuous basis. The Committee oversees Company's process and policies for determining risk tolerance and review management's measurement and comparison of overall risk tolerance to established levels. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuous basis. For details please refer to the Management Discussion and Analysis. Audit Committee The Company has constituted Audit Committee. For details please refer Corporate Governance Report attached as a separate Annexure -V. Internal Control System and its Adequacy The Company has internal control system commensurate with the size, scale and complexity of its business operations. The scope and functions of Internal Auditor are defined and reviewed by the Audit committee. The Internal Auditor reports to the Chairman of the Audit Committee. The Internal Auditor assesses opportunities for improvement of business processes, systems and controls, to provide recommendations, which can add value to the organization. Dividend Due to carry forward loss of previous years the Board of directors has not recommended any dividend. During the year the company was not required to transfer unclaimed dividend to the Investor Education and Protection Fund. Share Capital The paid up Equity Share Capital as on 31st March, 2016 was Rs. 268.75 lacs. During the year under review the Company has not issued any equity shares. As on 31st March, 2016 the Share Capital was Rs. 268.75 lacs. No shares with differential voting rights, stock or sweat equity shares were issued by the Company during the year under review. Exchequer The Company has contributed Rs. 13.54 lacs to the exchequer by way of Service Tax, Income tax, and other fiscal levies. Deposits The Company has not accepted fixed deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014. There have been no defaults in repayment of deposits or payment of interest thereon during the year. The Company has no unclaimed/unpaid fixed deposits as at end of the year. Directors Members at the Annual General Meeting held on 26-09-2014 have appointed Shri Rajesh B. Shah, Shri Prem Chand Surana and Smt. Rutva Acharya as Independent Directors of the Company to hold office for five consecutive years for a term up to 31st March, 2019 (they will not retire by rotation). All independent directors have given declarations that they meet the criteria of independence as laid down under section 149(6) of The Companies Act, 2013. The company keeps informed independent directors about changes in the Companies Act, 2013 from time to time and their role, duties and responsibilities. Shri Sanwarmal Agarwal, director is due to retire at the end of the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Brief resume of Shri Sanwarmal Agarwal, director as required as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided in the notice convening the Annual General Meeting of the Company. Board Evaluation Pursuant to the provisions of the Companies Act, 2013 and Rules made thereunder, Schedule - IV of the Act and SEBI (LODR) Regulations, 2015, the Board has carried the evaluation of its own performance, individual Directors, its Committees, on the basis of attendance, contribution and various criteria as recommended by the Nomination and Remuneration Committee of the Company. The performance of each of the non-independent directors was also evaluated by the Independent Directors at the separate meeting held of Independent Directors of the Company. Policy on Directors appointment and remuneration Criteria determining the qualifications, positive attributes and independence of Directors Independent Directors • Qualifications of Independent Director An Independent director shall possess appropriate skills, qualifications, experience and knowledge in one or more fields of finance, law, management, marketing, administration, corporate governance, operations or other disciplines related to the Company's business. • Positive attributes of Independent Directors An independent director shall be a person of integrity, who possesses knowledge, qualifications, experience, expertise in any area, integrity, level of independence from the Board and the Company etc. Independent Directors are appointed on the basis of requirement of the Company, qualifications & experience, association with the Company etc. He should also devote sufficient time to his professional obligations for informed and balanced decision making; and assist the company in implementing the best corporate governance practices. • Independence of Independent Directors An Independent director should meet the requirements of Section 149(6) of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. Other Directors and Senior Management The Nomination and Remuneration Committee shall identify and ascertain the qualifications, expertise and experience of the person for appointment as Director or at Senior Management level and recommend to the Board his / her appointment. The Company shall not appoint or continue the employment of any person as Whole-time Director or Senior Management Personnel if the evaluation of his performance is not satisfactory. Other Details are disclosed in the Corporate Governance Report under the head Nomination and Remuneration Committee and details of Remuneration (Managing Director / Whole Time Director and Non- Executive Directors). Remuneration / commission from Holding or Subsidiary Company The Company has no Holding Company or Subsidiary Company. Remuneration Policy It is separately disclosed in the Corporate Governance Report attached as a separate Annexure - V to this Report. Auditorsand their Observations H.V. Vasa & Co., Statutory Auditors of the company retire at the end of forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. The Board recommends their re-appointment at the ensuing Annual General Meeting. The Auditors' Report and Secretarial Audit Report to the members for the year under review does not contain any qualification, reservation or adverse remarks or disclaimer. The Statutory Auditors have not reported any fraud during the year under review. Secretarial Audit Pursuant to provisions of Section 204 of Companies Act, 2013 and rules made there under, the Company has appointed Parikh Dave and Associates, Practicing Company Secretaries to undertake the Secretarial audit of the Company for the year 2016-17. The Secretarial Audit Report given by Parikh Dave and Associates, Company Secretaries in practice is annexed with this report. Insurance Your Company has adequately insured all its properties. Industrial Relations Your Company's relations with its employees remained cordial throughout the year. The Directors wish to place on record their deep appreciation for the services rendered by staff members and executives of the Company. Your Company has taken adequate steps for the health and safety of its employees, as required under the Gujarat Factories Rules, 1963. The Company has not received any complaint under The Sexual Harassment of women at Workplace (prevention, prohibition and redressal) Act, 2013. Material Changes Affecting Financial Position of the Company No material changes or commitments, affecting the financial position of the Company have occurred between the end of the financial year of the company to which the financial statements relate, i.e. 31st March, 2016 and the date of the Board's Report. Change in Nature of business The company discontinued the operation of horticulture production during the year. Orders passed by Regulatory Bodies or Courts No regulatory body or court or tribunal has passed any significant and material orders impacting the going concern status and operations of the company. Vigil Mechanism The company has implemented Vigil Mechanism. For details please refer Corporate Governance Report attached as a separate Annexure Appreciation Your Directors would like to place on record their gratitude for the co-operation and assistance given by various departments of both State and Central Governments For and on behalf of the Board of Directors, P. C. Surana P. K Shashidharan Sanwarmal D. Agarwal Rutva Acharya Directors Place : Ahmadabad Date : 26th May, 2016 |