DIRECTORS’ REPORT To, The Members, MINAL INDUSTRIES LIMITED Your Directors have great pleasure in presenting their 27th Annual Report along with the Audited Balance Sheet and Profit and Loss Account for the year ended 31st March 2015. TRANSFER TO RESERVES: There are no transfers to any specific reserves during the year. REVIEW OF FINANCIAL OPERATIONS During the year your Company has reported a total turnover of Rs. 70,38,905 /- (Rupees Seventy Lacs Thirty Eight Thousand Nine Hundred and Five Only). However the total expenditure incurred by the Company during the year under review amounted to Rs. 26,263,219/- (Rupees Two Crore Six Two Lakhs Sixty Three Thousand Two Hundred and nineteen Only) During the year, due to sluggish and adverse market trend your company has reported a net loss of Rs. 17,561,941/- (Rupees One Crore Seventy Five Lakhs Sixty One Thousand Nine Hundred and forty One only) as compared to previous years net loss of Rs. 22,70,134/- (Rupees Twenty Two Lakhs Seventy Thousand One Hundred and Thirty Four Only) DIVIDEND Your Directors do not recommend dividend for the year 31st March, 2015 as the company is incurring losses. DIRECTORS The Board of Directors in compliance with the provisions of Section 161 of the Companies Act 2013 appointed Mrs. Sona Parikh as an additional Non-Executive Director and thus offers herself for regularization at the ensuing Annual General Meeting of the Company. Mr. Jesingbhai Parikh & Mr. Vikram Parikh resigned w.e.f. 09th March 2015. *NUMBER OF MEETINGS OF THE BOARD: During the financial year 2014-15 Six (6) Board Meetings were held on the following dates. The gap between any two meetings was not more than one hundred twenty days as mandated under the provisions of Section 173 of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges:- *INDEPENDENT DIRECTORS: In terms of provisions of Section 149(7) of the Companies Act, 2013, all the Independent Directors of the Company have furnished a declaration to the Compliance Officer of the Company at the meeting of the Board of Directors stating that they fulfill the criteria of Independent Director as prescribed under Section 149(6) of the Companies Act, 2013 and are not being disqualified to act as an Independent Director. In terms of Clause 49 of the Listing Agreement, the Company has adopted a familiarization programme for Independent Directors. *POLICY ON DIRECTORS'APPOINTMENT AND REMUNERATION: In terms of provisions of Section 178 of the Companies Act, 2013 read with revised Clause 49 of the Listing Agreement, a policy relating to remuneration for the Directors, Key Managerial Personnel and other employees has been adopted by the Board of Directors of the Company in pursuance of its formulation and recommendation by the Nomination and Remuneration Committee thereby analyzing the criteria for determining qualifications, positive attributes and independence of a Director. Constitution of the Nomination and Remuneration Committee: The Board has changed the nomenclature of Remuneration Committee constituted under the erstwhile Companies Act, 1956 by renaming it as Nomination and Remuneration Committee on 15th November 2015. The Nomination and Remuneration Committee comprises of following Directors: EVALUATION PROCESS: The Board of Directors of the Company has established a framework for the evaluation of its own performance and that of its committees and individual Directors of the Company. The certain parameters covering the evaluation of the Chairman, Executive Directors and Independent Directors have been fixed by the Board on the basis of which the evaluation is being carried out on annual basis in terms of provisions of the Companies Act, 2013. KEY MANAGERIAL PERSONNEL: The Board of Directors of the Company has designated following Director(s)/Official(s) of the Company as Key Managerial Personnel (KMP) of the Company in terms of provisions of Section 203 of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges: 1. Mr. Shrikant J Parikh, Managing Director. No Key Managerial Personnel (KMP) of the Company has resigned during the financial year ended 31March, 2015. DISCLOSURES UNDER COMPANIES (APPOINTMENT & REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014: Sr. No. Committee members Position in the committee 1 Mrs. Sona Parikh (non –executive Director) Chairman 2 Mr. Shankar Bhagat (Independent, non-executive) Member 3 Mr. Amulbhai Patel (Independent, non-executive) Member The information pursuant to Section 197 of the Act read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 relating to median employee’s remuneration will be made available at the registered office of the Company during working hours for a period of twenty-one (21) days before the date of the meeting, i.e from 09th September, 2015 till 29th September, 2015. PARTICULARS OF EMPLOYEES: There are no employees in the Company, who if employed throughout the financial year, were in receipt of remuneration, whose particulars if so employed, are required to be included in the report of the Directors in accordance with the provisions of Rule 5 (2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. CORPORATE SOCIAL RESPONSIBILITY: The company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable for the period under review. AUDIT COMMITTEE: Pursuant to provisions of Section 177 of the Companies Act 2013 and clause 49 of the Listing Agreement the Audit Committee shall have minimum three directors as member with Independent Directors forming the majority. The Company has duly complied with the said provisions. SUBSIDIARIES/JOINT VENTURES/ASSOCIATE COMPANIES: The detail of financial performance of Subsidiary/ Joint Venture/Associate Company is furnished in Annexure “B” and attached to this report. DEPOSITS: During the year under review, the Company did not accept any deposits. The Company is in the process of transferring Unpaid Dividend amounting to Rs. 90,888/- to the Investor Education and Protection Fund. AUDITORS: The Statutory Auditors, M/s R H Modi & Company, Chartered Accountants (FRN: 106486W) had been appointed as Statutory Auditors of the Company in the 26th Annual General Meeting held on 30th September, 2014 for a period of 5 (Five) years in terms of provisions of Section 139 of the Companies Act, 2013 to hold office from the 26th AGM to the fifth consecutive Annual General Meeting from the 26th AGM in the Calendar year 2019 (subject to ratification by the members at every Annual General Meeting). Therefore, the consent of members for ratification of appointment of Statutory Auditors to hold office from the ensuing Annual General Meeting of the Company till the next Annual General Meeting of the Company in calendar year 2016 is being sought in the ensuing Annual General Meeting. REPORT ON FINANCIAL STATEMENTS There are two (2) qualifications, reservations or adverse remarks or disclaimers made by M/s. R H MODI and Company, Chartered Accountants Statutory Auditors, in their report. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company in the year under review. The comments by the Management are given below. DIRECTORS COMMENTS ON AUDITORS QUALIFICATION: i) Attention is invited to Note No. 11 to the financial statement, relating to inventories, is a deviation from the method prescribed by Accounting Standard (AS) - 2 ‘ Valuation of Inventories’ (D. C.) “In respect of stock of polished diamonds, cost is based on technical estimate by the management to avoid distortion in valuation. In view of the nature of variation in the value of individual diamonds, the differentials in their costs, it is not practicable to compute the cost of polished diamonds using either FIFO or weighted average cost. In view of multiple grades, it is not practicable to use specific cost. The basis of computing cost used on consistent basis though in line with generally accepted industry practice.” ii) Attention is invited to Note no. 31 to the financial statement, relating to Trade Receivables amounting to Rs.515,07,34,145/-, and Loans and Advances receivable amounting to Rs. 41,09,826/- are outstanding for more than three years. (D. C.) “The management classifies these debts fully recoverable and good and accordingly does not consider it necessary to make any provision.’ iii) Attention to Note No. 26 to the financial statement, relating to share of loss of partnership firm M/s RSBL Jewels excludes effect of exchange rate difference at the yearend as the Trade payable / Trade receivable are not been restated at the yearend exchange rate, which is not as per AS-11. (D. C.) “Regarding trade receivables in view of persistent defaults by overseas customers in clearing outstanding dues, it is deemed expedient not to take cognizance of delays depreciation of rupee vis-à-vis dollar and the same are still outstanding, especially as the outstanding amounts are expected to be realized in phased manner over an uncertain period of time or are doubtful of recovery. Likewise import payables outstanding as at the balance sheet date have not been restated at the rates of exchange prevailing at the date of the Balance Sheet as the same are expected to be paid off out of realizations from export receivables.” iv) Attention to Note No. 27 to the financial statement, Gratuity and leave encashment is accounted on cash basis, which is not as per AS-15 Employee Benefits. (D. C.) “In view of few employees the management is of the view that it will be accounted and paid on cash basis as an when liability arises” SECRETARIAL AUDIT: The Board has appointed M/s HS Associates, Practicing Company Secretaries as Secretarial Auditor for the Financial Year 2014-15 in terms of provisions of Section 204 of the Companies Act, 2013. The Secretarial Audit Report of the Company for the financial year ended 31March, 2015 in the prescribed form MR-3 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure -”D” to this report. DIRECTORS COMMENTS ON AUDITORS QUALIFICATION: i) The company has not appointed Company Secretary as required under section 203 read with rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and thus the Financial statements have not been authenticated by a whole time Company Secretary under Section 203 of the Companies Act 2013. ii) Internal Auditor for the Financial Year 2014 – 2015 as required under section 138 Companies Act, 2013 was not appointed. (D. C.) for i & ii “In view of the Carried Forward Losses, the Company Could not find a suitable candidate as Company Secretary and due to meager operations of the Company the Company was not in a position to appoint an Internal Auditor and also the Board is of the opinion that the internal Control of the Company are commensurate with the size of its operations.” The Company has not opted for e-voting Facility with neither of the two Depositories (D. C.) “The Company is in the process of obtaining registration with CDSL for e-voting facility.” iv) The website of the Company has not been updated as per the Companies Act 2013. (D. C.) "'The Company is in the process of updating its website." v) The company has not obtained prior approval for related party transaction of Rent paid to Minal Plastic Products. (D. C.) "The Company would be obtaining approval of the members at the forthcoming Annual General Meeting." vi) The amount of Rs. 90,888/- which was required to be transferred to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act 1956 (1 of 1956) and the rules made thereunder had not been transferred to the IEPF. (D. C.) "'The Company is in the process of transferring the same to IEPF." vii) In the Absence of CFO the Company has authenticated the CEO/ CFO Certification as required by Corporate Governance by CEO. (D. C.) "'Due to weak financial operations the Company is not in a position to appoint a CFO." viii) The Company has not Filed Return of Foreign Liabilities and Assets as required under FEMA Regulations. ix) The Company has not submitted the disclosures as required to be submitted under the Regulation 30 of Securities And Exchange Board Of India (Substantial Acquisition Of Shares And Takeovers) Regulations, 2011. (D. C.) for viii & ix "The Company is in the process of complying with the Regulations of FEMA and SEBI (SAST) Regulations." x) The Company has given loans to group concerns falling within the purview of Section 185 of the Companies Act 2013: (D. C.) As an urgent necessity of funds the company had given loans to Associate Company. COST AUDIT: In pursuant to Companies (Cost Records and Audit) Amendment Rules, 2014 notified by the Ministry of Corporate Affairs (MCA) on 31 December, 2014, the Company shall not be mandatorily required to get its Cost Records for the financial year 2014-15 and 2015-2016 audited in terms of provisions of Section 148 of the Companies Act, 2013 as the Industry under which the Company falls has been exempted from the Cost Audit by MCA vide Companies (Cost Records and Audit) Amendment Rules, 2014. Therefore, the audit of cost records for the financial year ended on 31 March, 2015 has not been undertaken in terms of the Companies (Cost Records and Audit) Amendment Rules, 2014. INTERNAL AUDITORS: Due to weak Financial of the company has not appointed internal auditors as required under Section 138 of the Companies Act 2013. INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY: Minal Industries Limited has a proper and adequate system of internal financial controls which includes the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. WHISTLE BLOWER POLICY/ VIGIL MECHANISM: In terms of provisions of Section 177 of the Companies Act, 2013, the Company has established an effective mechanism called Vigil Mechanism (Whistle Blower Mechanism). The mechanism under the Policy has been appropriately communicated within the organization. The purpose of this policy is to provide a framework to promote responsible whistle blowing by employees. It protects employees wishing to raise a concern about serious irregularities, unethical behavior, actual or suspected fraud within the Company by reporting the same to the Audit Committee. Protected disclosure can be made by the whistle blower in a closed and secured envelope or send through e-mail to the Compliance Officer. During the year under review, no employee was denied access to the Audit Committee. RECONCILIATION OF SHARE CAPITAL AUDIT: As per the directive of the Securities and Exchange Board of India (SEBI), the Reconciliation of Share Capital Audit is undertaken by a firm of Practicing Company Secretaries on quarterly basis. The audit is aimed at reconciliation of total shares held in CDSL, NSDL and in physical form with the admitted, issued and listed capital of the Company. The Reconciliation of Share Capital Audit Reports as submitted by the Auditor on quarterly basis was forwarded to the BSE Limited, Mumbai where the original shares of the Company are listed. LISTING OF SHARES: The Equity Shares of the Company are listed on the: 1. Bombay Stock Exchange Limited, (BSE). 2. Ahmedabad Stock Exchange Limited, (ASE). 3. Vadodara Stock Exchange Limited. (VSE). DISCLOSURES UNDER SECTION 134 OF THE COMPANIES ACT, 2013: Except as disclosed elsewhere in the Annual Report, there have been no material changes and commitments, which can affect the financial position of the Company between the end of financial year and the date of this report. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO: The information in accordance with the provisions of Section 134(3) (m) of the Companies Act, 2013 read with the Rule 8 of the Companies (Accounts) Rules, 2014 is given in Annexure A to this Report. EXTRACT OF ANNUAL RETURN: In terms of provisions of Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the extract of the Annual Return of the Company in Form MGT-9 of the Companies (Management and Administration) Rules, 2014 is enclosed as Annexure E to this report. COURT/TRIBUNAL ORDERS: There were no instances of any significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future. INDUSTRIAL RELATIONS: During the year under review, industrial relations in the Company continued to be cordial and peaceful. MANAGEMENT DISCUSSION AND ANALYSIS: A detailed analysis of the Company's operations in terms of performance in markets, manufacturing activities, business outlook, risks and concerns forms part of the Management Discussion and Analysis, a separate section of this report. DIRECTORS' RESPONSIBILITY STATEMENT: Pursuant to Section 134(3) (c) of the Companies Act, 2013, your Directors confirm that:- (a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) the directors had 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 31 March, 2015 and of the profit and loss of the Company for the period ended on that date; (c) the directors had 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 had prepared the annual accounts on a going concern basis; (e) the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and (f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. RELATED PARTY CONTRACTS AND ARRANGEMENTS: The particulars of the undergoing contracts or arrangements of the Company with related parties during the period under review referred to in Section 188(1) of the Company Act, 2013 were in ordinary course of business and on arm's length basis. During the year, the Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material in accordance with the related party transaction policy of the Company. The prescribed form AOC-2 of the Companies (Accounts) Rules, 2014 is enclosed as Annexure C to this report. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT: The particulars of Loans, guarantees or investments made under Section 186 are not given separately in this report as the same has been given in the Financial Statement. RISK MANAGEMENT POLICY The Board has adopted the Risk Management Policy based on the recommendation of the Risk Management Committee in order to assess, monitor and manage risk throughout the Company. 27TH ANNUAL REPORT 2014-2015 MINAL INDUSTRIES LIMITED Risk is an integral part of the Company's business, and sound risk management is critical to the success of the organization. Detailed information on risk management is provided in the Management Discussion and Analysis Report. CORPORATE GOVERNANCE The Board is pleased to inform that the Company has complied with the mandatory requirements as applicable to the company of the Corporate Governance as detailed in Clause 49 of the Listing Agreement. A separate statement on Management Discussion and Analysis and Corporate Governance is enclosed as a part of the Annual Report along with the certificate of the Auditors, M/s. H S Associates, Practising Company Secretaries, confirming compliance of the code of Corporate Governance. ACKNOWLEDGEMENTS Your Directors take this opportunity to express their gratitude for the assistance and continued cooperation extended by Banks, Government authorities, clients, and suppliers. The Directors are pleased to record their sincere appreciation for the devotion and sense of commitment shown by the employees at all levels and acknowledges their contribution towards sustained progress and performance of your Company. By Order of the Board For MINAL INDUSTRIES LIMITED SHRIKANT J PARIKH (CHAIRMAN) (DIN 00112642) DATE: 14 th August 2015. PLACE: MUMBAI. |