BOARD'S REPORT To, Members of MID INDIA INDUSTRIES LIMITED Your directors are pleased to present the 24th Annual Report together with the Audited financial Statement for the year ended 31st March, 2015. 1. STATE OF AFFAIRS, FINANCIAL PERFORMANCE AND FUTURE OUTLOOK: The company is engaged manufacturing of cotton yarn. During the financial year company has total income of Rs. 2926.44 Lacs in comparison to previous year's total income of Rs. 3747.20 Lacs and earned net profit of Rs. 11.83 lacs and in comparison to previous year's net profit of Rs. 16.18 Lacs . 1.2 OPERATIONS AND STATE OF COMPANY'S AFFAIRS During the year 2014-15, the Company's operating margins were not upto the mark. However, it has continued with its long term business strategy of investing in modernization of facilities in Yarn Divisions, increasing emphasis on Product development and expanding distribution systems. Our Company has made focused effort in improving product quality, lowering operating costs, improving operating efficiency. 1.3 CHANGE IN NATURE OF BUSINESS During the year there was no change in nature of business activities of the company. 1.4 SHARE CAPITAL During the year company has not raised any paid up share capital. The Paid Up Equity Share Capital as at 31st March 2015 stood at 16.30 Crores. During the year under review, the company has not issued shares with differential voting rights nor has granted any stock option or sweat equity shares. As on 31st March 2015, none of the Directors of the company hold instruments convertible into equity shares of the Company. 2. EXTRACT OFANNUAL RETURN The Extract of Annual Return as prescribed in form MGT 9 required under section 92 of the Companies Act, 2013 is included in this report as ANNEXURE-1. 3. BOARD MEETINGS AND ANNUAL GENERAL MEETING During the Financial Year 2014-15, meetings of the Board of Directors of the Company were held 4 (Four) times. The gap between two Meetings did not exceed one hundred and twenty days. Further Annual General Meeting was held on 19th September, 2014. Detailed information on the meetings of the Board, its Committees and the AGM is included in the Report on Corporate Governance, which forms part of this Annual Report. 4. DIVIDEND Due to accumulated losses in earlier years and inadequate profit during the year, your directors have regret to recommended any dividend for the year under review. 5. AMOUNTS TRANSFERRED TO RESERVES During the year under review, no amount was transferred to general reserve. 6.FIXED DEPOSITS During the year the Company has not accepted any deposits, within the meaning of Section 73 of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014. 7. DETAILS OF SUBSIDIARY, JOINT VENTURE OR ASSOCIATES The Company does not have any subsidiary, joint venture or associate company. 8. DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL At the annual general meeting held on 19th September, 2014 Shri Shreeram Singh, Shri Rakesh Kumar Jain and Shri Aneet Jain were appointed as an independent director of the Company pursuant to Section 149 of the Companies Act, 2013 for a term of five consecutive years. None of the Independent Directors are due for re-appointment. Thereafter Board of Directors in its meeting held on 14th November, 2014 has appointed Smt. Deepika Gandhi as an Additional Director as well as independent women Director of the Company, not liable to retire by rotation. And Shri Sanjay Singh appointed as additional director as well as managing director of the company for period of five years subject to approval of members in ensuing general meeting. The Company has received notices in writing from the members as required under section 160 of the Companies Act, 2013 for proposal for appointment of Smt. Deepika Gandhi and Shri Sanjay Singh as Directors in ensuing Annual General Meeting Further Shri Dharmprakash Shrivastav, Shri Shreeram Singh & Shri Amrish Gupta resigned from the post of Directors due to their pre occupation and other personal reasons. Your Board places on record their deep appreciation of the valuable contribution made by them during their tenure as Directors of the Company. In accordance with provisions of Section 152 of the Companies Act, 2013 and the Company's article of association, Shri Pradeep Kumar Ganediwal, Director retires by rotation at the forthcoming annual general meeting and being eligible offers himself for re-appointment Mr. Sanjay Singh, Managing Director (w.e.f.14.11.2014); Mr. Shailendra Agrawal Company Secretary and Mr. Om Prakash Dhanotiya, Chief financial officer of the Company are the Key Managerial Personnel of the Company as per the provisions of the Companies Act, 2013. DISQUALIFICATIONS OF DIRECTORS During the year declarations received from the Directors of the Company pursuant to Section 164 of the Companies Act, 2013. Board appraised the same and found that none of the director is disqualified for holding office as director. 9. DECLARATION BY INDEPENDENT DIRECTOR The Company has received declarations from all the Independent Directors of the Company confirming that they fulfill the criteria of independence as prescribed under sub-section (6) of section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges. The following Directors are independent in terms of Section 149(6) of the Act and Clause 49 of the Listing Agreement: (i) Shri Rakesh Kumar Jain (ii) Shri Aneet Jain (iii) Smt. Deepika Gandhi 10.DIRECTORS RESPONSIBILITY STATEMENT In terms of Section 134(3) (c ) of the Companies Act, 2013, your Directors state that: a) in the preparation of the annual accounts for the financial year ended 31st March, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures , if any; b) the directors have selected such accounting policies and applied them 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 at 31st March, 2015 and of the profit of the Company for year ended on that date; c) the directors have taken proper and sufficient care 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; d) the directors have prepared the annual accounts on a going concern basis; e) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively and f) the directors have laid down proper internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. 11. FAMILIARIZATION OF INDEPENDENT DIRECTORS The details of familiarization programme for Independent Directors have been disclosed on website of the Company www.midindiaindustries.com . 12. MEETING OF INDEPENDENT DIRECTORS The Independent Directors met once during the year under review. The Meeting was conducted in an informal manner without the presence of the Chairman, the Managing Director, the Non-Executive Non-Independent Directors and the Chief Financial Officer. 13. COMMITTEES OF THE BOARD OF DIRECTORS The Company has various committees which have been constituted as a part of the good corporate governance practices and the same are in compliance with the requirements of the relevant provisions of applicable laws and statutes. Your Company has an adequately qualified and experienced Audit Committee with Shri Rakesh Kumar Jain (Chairman), Shri Aneet Jain & Smt. Deepika Gandhi, as Members. The recommendations of the Audit Committee were duly approved and accepted by the Board during the year under review. The other Committees of the Board are : (i) Nomination and Remuneration Committee (ii) Stakeholders Relationship Committee (iii) Internal Committee for Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 redressal of complaint at the workplace. The details with respect to the composition, powers, roles, terms of reference, Meetings held and attendance of the Directors at such Meetings of the relevant Committees are given in detail in the Report on Corporate Governance of the Company which forms part of this Annual Report. 14. STATEMENT INDICATING THE MANNER IN WHICH FORMAL ANNUAL EVALUATION HAS BEEN MADE BY THE BOARD OF ITS OWN PERFORMANCE, ITS DIRECTORS, AND THAT OF ITS COMMITTEES Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, performance evaluation of the Board, it's Committee and the Independent Directors was carried out time to time. The manner in which the evaluation is carried out has been explained in the Corporate Governance Report. 15. PARTICULARS OF LOAN, GUARANTEES AND INVESTMENTS UNDER SECTION 186 The Company has not granted any loan or provided any guarantees to or invested in securities of any other body corporate during the year. 16. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES The Company has not entered any related party transactions during the financial year; hence provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus, disclosure in Form AOC-2 is not applicable . 17. CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under subsection (3) (m) of section 134 of the Companies Act, 2013 read with Rule (8)(3) of the Companies (Accounts) Rules, 2014 are given as under : (A) Conservation of Energy The steps taken or impact on conservation of energy : (i) Adequate measures have been initiated to reduce energy consumption by replacing tubelight and other lights with LED. (ii) The capital investment on energy conservation equipments: Nil (B) Technology Absorption (i) The efforts made towards technology absorption : Not Applicable. (ii) The benefits derived like product improvement, cost reduction, product development or import substitution : Not Applicable. (iii) in case of imported technology (imported during the last three years reckoned from the beginning of the Financial Year): Not Applicable. (iv) Company has not incurred any expenditure on Research and Development during the year under review. 18. STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THE FINANCIAL STATEMENTS Your company has an effective internal control and risk mitigation system, which are constantly assessed and strengthened with new/revised standard operating procedures. The company's internal control system is commensurate with its size, scale and complexities of its operations; the internal and operational audit is entrusted to M/s. Kaushal & Agrawal, Chartered Accountants. The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the industry. The audit committee of the board of directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The company has a robust management information system, which is an integral part of the control mechanism. The audit committee of the board of directors, statutory auditors and the business heads are periodically apprised of the internal audit findings and corrective actions taken. Audit plays a key role in providing assurance to the Board of director. Significant audit observations and corrective actions taken by the management are presented to the audit committee of the board. To maintain its objectivity and independence, the internal audit function reports to the chairman of the audit committee. 19. CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY Provisions of section 135 of the Companies Act, 2013 does not apply to the Company, therefore Company has not constituted Corporate Social responsibility (CSR) committee as required under the Act. 20. REMUNERATION POLICY / DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND PARTICULARS OF EMPLOYEES In accordance with Section 178 and other applicable provisions if any, of the Companies Act, 2013 read with the Rules issued there under and Clause 49 of the Listing Agreement, the Board of Directors formulated the Nomination and Remuneration Policy of your Company on the recommendations of the Nomination and Remuneration Committee. Details of policy covering these requirements has disclosed in corporate governance report. Information required under Section 197 of the Companies Act, 2013 read with Rule 5 (1) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 attached as "ANNEXURE 2". During the year none of the employee of the company is drawing more than Rs.60,00,000/- per annum or Rs.5,00,000/- per month for the part of the year, therefore Particulars of the employees as required under Section 197 of Companies Act, 2013 read with rule 5 (2) & rule 5 (3) of Companies (appointment and remuneration) Rules 2014 are not applicable. Further Company did not have any holding or subsidiary company therefore receipt of the commission or remuneration from holding or subsidiary company of the company as provided under section 197 (14) of Companies Act, 2013 is not applicable. 21. REPORTS ON MANAGEMENT DISCUSSION & ANALYSIS ON CORPORATE GOVERNANCE Pursuant to clause 49 of the listing agreement with stock exchanges, a separate section titled " Report on Corporate governance and Management discussion and Analysis forms part of this Annual Report. Certificate confirming compliance with the conditions of Corporate Governance as stipulated under clause 49 of the Listing Agreement also forms parts of this Annual Report. 22.DISCLOSURE ON ESTABLISHMENT OF A VIGIL MECHANISM/WHISTLE BLOWER POLICY The Company has a whistle blower policy to report genuine concerns or grievances. The details of establishment of the reporting mechanism are disclosed on the website of the Company (www.midindiaindustries.com ). No Person has been denied access to the Audit Committee. 23. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY There are no significant and/or material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company. 24. SECRETARIAL AUDIT Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the company has appointed M/s. L.N.Joshi & Company, Practicing Company Secretary, to undertake as the Secretarial Audit of the company. The Secretarial Audit report is included as ANNEXURE-3 and forms an integral part of this Report. With respect to the observations of the Secretarial Auditor , the Board replies hereunder: Delhi stock exchange has not provided any platform for trading and company is listed on nation wide stock exchange. Therefore company has not paid listing fee for the Delhi stock exchange. However company is in compliance with the clauses of listing agreement and duly submitted all the required documents as per listing agreement in prescribed time. Except this there is no Secretarial Audit qualification /observation for the year under review. 25.STATUTORY AUDITORS Pursuant to the provisions of section 139 and 142 of the Companies Act, 2013 M/s. KVNG & Associates, Chartered Accountants (Firm Registration No.002628C) statutory auditors of the company were appointed as auditor to hold office up to the conclusion of forthcoming annual general meeting of the company and are recommended for re-appointment to audit the accounts of the company up to the 26th AGM of the Company to be held in year 2017 subject to ratification of their appointment by members at every AGM held thereafter. A resolution for appointment of M/s. KVNG & Associates, Chartered Accountants, as auditors for the period from the conclusion of the ensuing 24th AGM till the conclusion of the 26th AGM and for fixation of their remuneration for the year 2015-16 is being proposed in the notice of the ensuing AGM for the approval of the members. The Company has received from M/s. KVNG & Associates, Chartered Accountant a written consent for ratification of their appointment from the conclusion of the 24th AGM till the conclusion of the 26th AGM and a certificate to the effect that their appointment shall be in accordance with the prescribed conditions and that the firm is not disqualified under the Companies Act, 2013. EXPLANATION TO AUDITOR'S REMARKS The Auditors in their report have referred to the notes forming part of the Accounts which are self-explanatory and does not contain any qualification, reservation or adverse remark or disclaimer. Further there was no fraud in the Company, which was required to report by statutory auditors of the Company under sub-section (12) of section 143 of Companies Act, 2013. 26. COST AUDITORS The Company does not falls within the provisions of section 148 of Companies Act, 2013 read with Companies (Cost records & Audit) Rules, 2014 , therefore no such records required to be maintained and company is not required to appoint cost Auditor for the Financial year 201415. Further Company has submitted Cost Audit Report for financial year 2013-2014 in prescribed time and there was no qualification in their report. 27.CODE OF CONDUCT The Company has laid down a code of conduct for all Board members and senior management and independent directors of the Company. All the Board members including independent directors and senior management personnel have affirmed compliance with the code of conduct. Declaration on adherence to the code of conduct is forming part of the Corporate governance Report. 28.STATEMENT INDICATING DEVELOPMENT & IMPLEMENTATION OF RISK MANAGEMENT POLICY The Board of Directors has adopted risk management policy for the Company which provides for identification, assessment and control of risks which in the opinion of the Board may threaten the existence of the Company. The Management identifies and controls risks through a properly defined framework in terms of the aforesaid policy. 29. MATERIAL CHANGES & COMMITMENTS, IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY No material changes and commitments affecting the financial position of the company have occurred between the end of the financial year to which the financial statements relate and the date of this Board's report. 30.ENVIRONMENT AND SAFETY The Company is conscious of the importance of environmentally clean and safe operations. The Company's policy required conduct of operations in such a manner, so as to ensure safety of all concerned, compliances environmental regulations and preservation of natural resources. 31. SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013 The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress the Complaint received regarding sexual harassment. There was no case of sexual harassment reported during the year under review. 32.LISTING OF SHARES Company shares listed on Bombay Stock Exchange Limited only . The company has paid annual listing fee for financial year 2015-16 . During the financial year Company has voluntary delisted from Ahmedabad Stock Exchange Limited w.e.f. 24th December, 2014. 33. BUSINESS RESPONSIBILITY REPORT Business responsibility reporting as required by clause 55 of the listing agreement with stock exchange is not applicable to your company for the financial year ending 31st March 2015. 34. DEPOSITORY SYSTEM Your Company's shares are tradable compulsorily in electronic form and your Company has connectivity with both the Depositaries i.e. National Securities Depository Limited (NSDL) and Central Depository Service (India) Limited (CDSL). In view of the numerous advantage offered by the Depository System, members are requested to avail of the facility of Dematerialization of the Company's shares on either of the Depositories mentioned as aforesaid. 35.INSURANCE The Company's assets are adequately insured against the loss of fire and other risk as considered necessary by the Management from time to time. The company has also taken adequate insurance cover for all movable and immovable assets and for all such types of risks as considered necessary by the Management from time to time. 36. PREVENTION OF INSIDER TRADING In view of the SEBI (Prohibition of Insider Trading) Regulation, 2015 the Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires Trading Plan, pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. 37. MD & CFO CERTIFICATION Certificate from Managing Director and Chief Financial Officer, pursuant to provisions of Clause 49(V) of the Listing Agreement, for the year under review was placed before the Board of Directors of the Company at its meeting held on 12th August, 2015.A copy of the certificate on the financial statements for the financial year ended March, 31, 2015 is annexed along with Report Corporate Governance. 38. INDUSTRIAL RELATIONS Company's Industrial relations continued to be healthy, cordial and harmonious during the period under review. 39.ACKNOWLEDGMENT The Board of Directors wish to place on record its appreciation for the extended co-operation and assistance rendered to the Company and acknowledge with gratitude the continued support and cooperation extended by the investors, stakeholders, Banks and other regulatory authorities. For and on behalf of the Board of Directors MID INDIA INDUSTRIES LIMITED Sanjay Singh Managing Director DIN 01548011 Rakesh Kumar Jain Director DIN 01548417 Place: Indore Date: 12th August, 2015 |