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Meera Industries Ltd.

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Annual Report

For Year :
2018

Director’s Report

TO,

THE MEMBERS,

MEERA INDUSTRIES LIMITED.

The directors have pleasure in presenting their 12th Annual Report together with the Audited Financial Statement for the year ended 31st March, 2018.

FINANCIAL HIGHLIGHTS:

Performance of your company, for F.Y. 2017-18 is summarized as under:

STANDALONE

CONSOLIDATED

2017-18 Amt. in Rs.

2016-17 Amt. in Rs.

2017-18 Amt. in Rs.

2016-17 Amt. in Rs.

Income from Operations

21,11,95,939.72

13,15,44,812.00

21,49,65,855.81

13,15,44,812.00

Other income

44,66,544.22

33,57,710.00

44,66,736.32

33,57,710.00

Total Income

21,56,62,483.94

13,49,02,522.00

21,94,32,592.13

13,49,02,522.00

Less : Total Expenditure before Int., Depreciation & Tax

17,73,14,524.01

11,74,24,037.00

18,24,73,288.40

11,74,24,037.00

Profit/(Loss) before Int., Depreciation & Tax

3,83,47,959.93

1,74,78,485.00

3,69,59,303.73

1,74,78,485.00

Less : Interest

4,32,444.35

3,16,445.00

4,46,948.73

3,16,445.00

Profit/(Loss) before Depreciation

3,79,15,515.58

1,71,62,040.00

3,65,12,355.00

1,71,62,040.00

Less : Depreciation

29,56,787.00

25,39,693.00

29,86,365.80

25,39,693.00

Profit/(Loss) before Exceptional and extraordinary items and Tax

3,49,58,728.58

1,46,22,347.00

3,35,25,989.20

1,46,22,347.00

Less : exceptional items

0.00

0.00

0.00

0.00

Profit/(Loss) before Tax

3,49,58,728.58

1,46,22,347.00

3,35,25,989.20

1,46,22,347.00

Less : Current Tax

95,37,536.00

43,24,212.00

95,37,536.00

43,24,212.00

: Deferred Tax

(7,16,209.33)

(3,34,680.00)

(7,16,209.33)

(3,34,680.00)

: Prior period items

8504.00

0.00

8504.00

0.00

Profit/(Loss) after Tax

2,61,28,897.91

1,06,32,815.00

2,46,96,158.53

1,06,32,815.00

Add: Adj. In respect of Profit From Discontinuing operations

0.00

0.00

0.00

0.00

Balance

2,61,28,897.91

1,06,32,815.00

2,46,96,158.53

1,06,32,815.00

Add: Surplus/Deficit B/F. from Pre. Year

68,28,908.00

77,97,509.00

68,28,908.00

77,97,509.00

Less: Amount Transferred

From Sundries (Others)

0.00

49,356.00

2,26,007.43

49,356.00

Less: Adjusted for Bon us Issue

0.00

68,25,000.00

0.00

68,25,000.00

Less: Interim Dividend

39,27,500.00

0.00

39,27,500.00

0.00

Less: Provision for Final Dividend

47,13,000.00

39,27,500.00

47,13,000.00

39,27,500.00

Less: Dividend Distri. Tax

17,59,016.00

7,99,560.00

17,59,016.00

7,99,560.00

Balance Carried to B/s.

2,25,58,289.91

68,28,908.00

2,08,99,543.10

68,28,908.00

Figures for F.Y. 2016 -17 have been restated, therefore may not be comparable with financials for FY 2016-17 approved by the Directors and disclosed in the financial statement of previous year.

STATE OF COMPANY’S PERFORMANCE (STANDALONE):

-The revenue of the company increased from Rs. 21,56,62,483.94/- as compared to Rs. 13,49,02,522.00/in the previous year.

-The net profit after Tax also increased from Rs. 2,61,28,897.91/- as compared to Rs. 1,06,32,815.00/- /-in the previous year.

STATE OF COMPANY’S PERFORMANCE (CONSOLIDATED): -The revenue of the company increased from Rs. 21,94,32,592.13/- as compared to Rs. 13,49,02,522.00/in the previous year.

-The net profit after Tax also increased from Rs. 2,46,96,158.53/- as compared to Rs. 1,06,32,815.00/- in the previous year.

CHANGE IN NATURE OF BUSINESS, IF ANY AND FUTURE OUTLOOK:

There has been no significant change in the business carried on by the company and it continued to be plant and machinery for textiles and yarn trade. At present your company has no plan to enter into any other business.

DIVIDEND:

For the F.Y. 201 7-18, under review, the company had already declared and paid an interim dividend @ Rs. 1 in October, 201 7 and also further your Director have recommended final dividend of the further amount of Rs. 1.20 per equity share aggregating to Rs. 2.20 for the financial year. An outflow of Rs. 47,13,000.00 and Dividend Distribution Tax of Rs. 17,59,016.00 have been provided after adjustments of the profit after tax.

EXTRACT OF ANNUAL RETURN:

The extract of Annual return as requires under section 134(3)(a) read with Section 92(3) of the Companies Act, 2013 and rules made thereunder in Form MGT-9 for the Financial Year 201718 is attached as Annexure- A and forms part of this report. USE OF PROCEEDS:

The proceeds from the Issue of the Company vide prospectus dated 21st April, 201 7 was of Rs. 388.80 Lakhs out of which Company had utilized Rs. 314.08 for the purpose of objects as stated in prospectus. There are no deviation of funds raised by IPO.

MEETINGS OF THE BOARD OF DIRECTORS:

As required by clause (b) of sub-section (3) of Section 134 of the Companies Act, 2013, during the Financial Year 2017-18, 6 (SIX) meetings of the Board of Directors were held as against the minimum requirement of four meetings, which is summarized below. The provisions of Companies Act, 2013 were adhered to while considering the time gap between two meetings.

Sr. No.

Date of Meeting

Board Strength

No. of Directors Present

1

07/04/2017

Five

Five

2

09/05/2017

Five

Three

3

30/05/2017

Four

Three

4

24/06/2017

Four

Three

5

10/10/2017

Four

Four

6

08/02/2018

Five

Two

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to provisions contained in section 134(5) of the companies Act, 2013 your directors after due inquiry confirm that:

a) in the preparation of the annual accounts for the financial year ended 31st March, 2018 the applicable accounting standards have been followed and no material departures have been made from the accounting standards;

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, 2018 and of the profit/loss of the company for that period;

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; and

e) the directors have laid down internal financial controls as stated in explanation to section 134(5)(e) of the Companies Act, 2013 to be followed by the company and that such internal financial controls are adequate, commensurate with the nature and size of its business and are operating effectively;

f) The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

AUDITORS AND REPORT THEREON: Ratification of Auditor’s Appointment:

M/s K A Sanghavi & Co; Chartered Accountants (FRN 120846), Surat who was appointed as Statutory Auditors of the Company by members at last AGM and whose appointment need to be ratified by members at this AGM and being eligible be ratified to hold office as Statutory Auditors of the Company until the conclusion of 16th Annual General Meeting of the Company to be held in the year 2022 (Subject to ratification by members at each subsequent Annual General Meeting).

As required U/s 139 of the Act ratification of his appointment to hold office from the conclusion of this AGM till the conclusion of 16th AGM has been proposed for consideration of members. The company has received certificate from the Auditor that they are eligible and do not suffer from any disqualification to hold office as Auditor.

The report of the Auditors is self-explanatory. There are no qualifications or adverse remarks in the Auditors’ Report which require any clarification/ explanation. The Notes on financial statements are self-explanatory, and needs no further explanation. Further the Auditors’ Report for the financial year ended, 31st March, 2018 is annexed to the Balance Sheet.

As required by Section 134(3)(f) of the Companies Act, 2013, your directors report that there is no fraud reported by the auditors in their report which is required to be reported here. Your company has installed adequate internal financial controls with reference to the Financial Statements as reported by Auditors for the year ended 31st March, 2018.

SECRETARIAL AUDITOR:

Pursuant to Section 204 of the Companies Act, 2013 read with Rules thereof, the Board of Directors had appointed M/s. A. G. Shaikh & Associates., Practicing Company Secretary, Surat, as Secretarial Auditors of the Company to conduct the Secretarial Audit for FY 2017-18. A Secretarial Audit Report for FY 2017-18 is annexed herewith as Annexure B. There is no qualification, reservation or adverse remarks in secretarial audit report which is self-explanatory.

PARTICULARS OF LOAN, GUARANTEE AND INVESTMENT UNDER SECTION 186:

Pursuant to the provisions of Section 186 of the Companies Act, 2013, with respect to a loan, guarantee, security or investments covered under are disclosed in the notes to the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

In compliance of listing regulations, the company has framed the policy for transactions with Related Parties.

Apart from the Related Party transactions in the ordinary course of business and at arm’s length basis, details of which are given in the notes to the financial statements, there were no other related party transactions requiring disclosure in the Director’s Report, for compliance with section 134(3)(h) of the Companies Act, 2013. Therefore, a Nil Report is attached as Annexure-C in the format prescribed i.e. Form AOC-2.

AMOUNTS TRANSFERRED TO RESERVES:

Yours directors do not recommend transfer of any amount out of profits to the reserves. Entire profit has been transferred to balance sheet under the head reserves.

MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

In the opinion of board of directors there are no material changes & have occurred after balance sheet date till the date of the report affecting the financial position of the company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The details of conservation of energy, technology, absorption, foreign exchange earnings and outgo as required U/S 134(3)(m) of Companies Act 2013 are enclosed in Annexure -D.

RISK MANAGEMENT POLICY:

The company has been exempt under regulation 21 of SEBI (Listing Obligation and Disclosure requirements) Regulations, 2015 from reporting of risk management.

The board is fully aware of Risk Factor and is taking preventive measures wherever required.

CORPORATE SOCIAL RESPONSIBILITIES (CSR) POLICY:

At present the company is not covered under CSR provisions as per criteria laid down under section 135(1) of the Companies Act, 2013 and therefore no such expenditure has been incurred during the year as prescribed under section 135(5) of the Companies Act, 2013.

PARTICULARS OF DEPOSITS:

Company has not accepted any deposits falling within purview of the section 73 to 76 of The Companies Act, 2013 read with rules made there under. There Is no overdue public deposits, unclaimed public deposits as on the last day of financial year.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS:

Your directors confirmed that no significant and material orders have been passed by Regulators or Courts or Tribunals impacting the going concern status and company’s operations in future.

INTERNAL FINANCIAL CONTROLS:

Yours directors are of the opinion that looking to the size and nature of business of the company there is adequate internal financial control system and the said system is operating effectively. Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 is attached as Annexure A of the Auditors Report.

DIRECTORS AND KMP: COMPANIES POLICIES ON DIRECTORS APPOINTMENT AND REMUNERATION:

Pursuant to provisions of section 178(3) of the Companies Act, 2013 and other applicable provisions, if any, Company has constituted Nomination and Remuneration committee which determines criteria for the qualifications, positive attributes and independence of the Director, Key Managerial Personnel and other employees.

The Remuneration Policy is framed in accordance with Listing regulations and provisions of Companies Act, 2013.

The composition of Nomination and Remuneration committee and policy has been attached as Annexure- E and forms part of this report.

ANNUAL EVALUATION OF PERFORMNACE OF BOARD, DIRECTORS AND COMMITTES:

Though the company has been exempt from annual evaluation of its own performance and performance of directors and committees thereof under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 but in terms of Rule 8(4) of the Companies (Accounts) Rules, 2014 company has laid down specific criteria for evaluation of annual performance and has developed qualitative and quantitative bench marks to ensure effective implementation of the same.

DECLARATION BY INDEPENDENT DIRECTOR:

Independent Director have given necessary declaration under Section 149(7) of the Companies Act, 2013 and as per the said declarations, they fulfill the criteria of Independence as provided in Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The same has been recorded by the Board of Directors.

INDEPENDENT DIRECTOR:

Mr. Yatish C. Parekh has resigned as independent director of Company w.e.f 07.04.2017.

Mr. S. Swaminathan Iyer has resigned as independent director of Company w.e.f 30.05.2017.

Mr. Hetal R. Mehta has been appointed as ADDITIONAL INDEPENDENT DIRECTOR on the Board of the company w.e.f. 07.04.2017.

The Company has received Declaration as required u/s 149(6) of the Act from the Independent Director that he meets the criteria of independence and is not disqualified to be appointed as Independent Director.

Mr. Sanjay Mehta has been appointed as ADDITIONAL INDEPENDENT DIRECTOR on the Board of the company w.e.f. 10.10.2017.

The Company has received Declaration as required u/s 149(6) of the Act from the Independent Director that he meets the criteria of independence and is not disqualified to be appointed as Independent Director.

CHANGE IN COMPOSITION OF BOARD:

- In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. MAYANK YASHWANTRAI DESAI, Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment.

-Mr. Hetal R. Mehta was appointed as ADDITIONAL INDEPENDENT DIRECTOR w.e.f. 07.04.2017.

-Mr. Sanjay N. Mehta was appointed as ADDITIONAL INDEPENDENT DIRECTOR w.e.f. 10.10.2017.

-Mr. Yatish C. Parekh has resigned as director from Company w.e.f 07.04.2017.

-Mr. S. Swaminathan Iyer has resigned as director from Company w.e.f 12.08.2017.

AUDIT COMMITTEE:

In terms of section 177(2) read with section 134(3) of the Companies Act, 2013 the company constituted audit committee. The composition of Audit committee has been attached as Annexure- F and forms part of this report.

The board has accepted and taken steps to implement all recommendation of Audit Committee.

COMPANIES (AUDITOR’S REPORT) ORDER, 2015:

In terms of section 143(11) of the Companies Act, 2013 CARO has been attached as part of Auditors Report.

DISCLOSURE REGARDING ISSUE OF EQUITY SHARES WITH DIFFERENTIAL RIGHTS:

The Company has not issued Equity Shares with differential rights.

DISCLOSURE REGARDING ISSUE OF SWEAT EQUITY SHARES:

The Company has not issued sweat Equity shares during the Financial Year 2017-18.

BONUS SHARES:

The Company has not issued sweat Equity shares during the Financial Year 2017-18.

DISCLOSURE REGARDING ISSUE OF EMPLOYEE STOCK OPTIONS:

The Company has not issued Employee Stock Options during the Financial Year 2017-18.

REDEMPTION OF SHARES/DEBENTURES:

The Company has not redeemed any shares during the Financial Year 2017-18.

INVESTOR EDUCATION PROTECTION FUND:

As on 31/03/2018 there is no amount outstanding which is required to be transferred to I EPF.

VIGIL MECHANISM:

The Policy on vigil mechanism and whistle blower policy may be accessed on the Company’s website at www.meeraind.com

CORPORATE GOVERNANCE:

The company has been exempt from reporting on corporate governance as per Regulation 15 of SEBI (Listing Obligation and Disclosure requirements) Regulations, 2015. Therefore, Corporate Governance Report is not attached.

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013:

There is no case fled, if any, during the Financial Year under the said Act hence the company has no details to offer.

MANAGEMENT’S DISCUSSION AND ANALYSIS REPORT:

As per Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report forms part of this Annual Report being attached as Annexure - G.

DETAILS OF SUBSIDIARY, JOINT VENTURE OR ASSOCIATES:

Your company has one Subsidiary name ‘MEERA INDUSTRIES USA, LLC situated in USA. Your company has no joint venture or associates. However, particulars of Statement containing salient features of the financial statement of subsidiaries/associate companies/joint ventures in the prescribed format AOC-1 has been enclosed under Annexure- H with the report and forms part of this report.

BUSINESS RESPONSIBILITY REPORT:

The company has been exempt from reporting on Business Responsibility Report as per Regulation 34(2)(f) of SEBI (Listing Obligation and Disclosure requirements) Regulations, 2015.

INTERNAL AUDITORS:

Pursuant to provision of Section 138 of Companies Act, 2013 read with Rule 13 of the Companies (Accounts) Rules, 2014 and other applicable provisions if any of the Companies Act, 2013 M/s. Riki Desai & Associates, Chartered Accountants were appointed as Internal Auditor of Company for period of 1 year for the F.Y. 2017-18.

COST AUDITORS

Provisions for Cost Auditor is not applicable to your company. OTHER DISCLOSURES:

- PARTICULARS OF COMMITTEES:

Particulars of Audit Committee, Nomination & Remuneration Committee and Stakeholders Relationship Committee are attached as Annexure-F, Annexure-E and Annexure-I respectively, forming part of this report.

-GENERAL MEETINGS:

11th Annual General Meeting of the Company was held at 2126, Road No. 2, GIDC, Sachin, Surat - 394230 on Saturday, 12th August, 2017 for F.Y. 2016-17.

DISCLOSURE RELATING TO EMPLOYEES:

In terms of rule (5)(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 details on remuneration of top employees of the company are attached to as Annexure “J” and forms part of this report. However, having regard to the provisions of the proviso to Section 136(1) of the Act and as advised, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the registered office of the company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.

GENERAL: CHANGES IN SHARE CAPITAL, IF ANY:

The authorized share capital of the Company as on date is Rs. 50.000.000/- (Rupees Five Crores Only) divided into 5.000.000 Equity shares of Rs.10/- each and During the year the company has issued 10,80,000 equity shares of Rs. 10 with premium of Rs. 26 each through Initial Public Offer. The shares of the company get listed on the SME platform of BSE. The issued, subscribed and paid-up capital of the Company is Rs. 3,92,75,000/- (Rupees Three Crores and Ninety Two Lakhs Seventy Five Thousand Only) divided in to 39,27,500 Equity shares of Rs.10/- each.

ACKNOWLEDGMENT:

Your Directors wish to extend their sincere thanks to the Government as well as the Government agencies, banks, customers, shareholders, vendors and other related organizations who have helped in your Company’s progress, as partners, through their continued support and cooperation.

For and on behalf of Board of Directors of,

MEERA INDUSTRIES LIMITED

Place: SACHIN, SURAT Dharmesh V. Desai

Date : 21/06/2018 Chairman And Managing Director

Director’s Report