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DIRECTOR'S REPORT

Mangalam Seeds Ltd.

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Market Cap. (₹) 61.38 Cr. P/BV 2.29 Book Value (₹) 24.42
52 Week High/Low (₹) 110/43 FV/ML 10/1 P/E(X) 18.47
Bookclosure 25/09/2018 EPS (₹) 3.03 Div Yield (%) 0.89
Year End :2016-03 

Dear Members,

The Directors have immense pleasure in presenting the 5th Annual Report together with the Audited Accounts of the Company for the Year ended March 31, 2016. The summarized financial performance for the year ended 31st March, 2016 is as follows:

1. FINANCIAL PERFORMANCE:

(Rs. in Lakhs)

Particulars

March 31, 2016

March 31, 2015

Net Sales

2383.06

1511.55

Other Income

2.84

1.57

Total

2385.90

1513.12

Profit before depreciation, taxation & Extraordinary Items

262.86

150.32

Less: Depreciation

34.49

21.70

Less: Provision for taxation

10.82

8.65

Less: Prior period Items

-

5.27

Profit after taxation

217.54

114.70

Add: Balance brought forward from previous year

147.76

33.55

Surplus available for appropriation

365.30

148.25

Appropriations

General Reserves

Nil

Nil

Less: Proposed Dividend

43.02

Nil

Tax on Dividend

8.76

Nil

Accelerated depreciation on fixed asset

Nil

0.49

Balance carried to Balance sheet

313.52

147.76

Total

313.52

147.76

2. DIVIDEND:

The Board, in its meeting held on May 30, 2016, recommended a dividend of Rs. 1/- per equity share for the financial year ended March 31, 2015. The proposal is subject to the approval of shareholders at the Annual General Meeting to be held on September 26, 2016. The total dividend appropriation (excluding dividend tax) for the current year is Rs. 5.49 Lakhs. The Register of Members and Share Transfer Books will remain closed on September 19, 2016 for the purpose of payment of the final dividend for the financial year ended March 31, 2016 and the Annual General Meeting. The Annual General Meeting is scheduled to be held on September 26, 2016.

3. OPERATIONAL REVIEW:

Net revenue increased to Rs. 2383.06 Lakhs, a growth of around 57.66% against Rs. 1511.55 Lakhs in the previous year. Profit before depreciation, Taxation and Extraordinary Item was Rs. 262.86 Lakhs as against Rs. 150.32 Lakhs in the previous year. After providing for depreciation, taxation and Extraordinary Item of Rs. 34.49 Lakhs, Rs. 20.05 Lakhs and Rs. 0.00 respectively, the net profit of the Company for the year under review was placed at Rs. 217.54 as against Rs. 114.70 in the previous year.

Due to tough market conditions the company's turnover in terms of value has increased only at a marginal rate of 57.66% during the year under review. However, the profit after tax has increased by 89.67% compare to previous year as the Company has started own farming instead of Contract farming, which resulted in lowering expenditure relating to Cost of Material Consumed of the Company.

4. SHARE CAPITAL:

The paid up equity capital as on March 31, 2016 was Rs. 430.20 Lakhs. During the year under review, the Company got its shares listed on SME Platform of Bombay Stock Exchange Limited on August 12, 2015 by Initial Public Offer of 11,40,000 Equity Shares. Further the Company has issued 20,18,251 Bonus shares of Rs. 10/- per equity share to the shareholders on May 08, 2015 and 2,12,328 equity shares at Rs. 50 including securities premium of Rs. 40 per share under private placement on May 15, 2015. The company has not issued shares with differential voting rights nor granted stock options nor sweat equity.

5. FINANCE: Cash and cash equivalents as at March 31, 2016 was Rs. 149.87 Lakhs. The company continues to focus on judicious management of its working capital,

Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.

6. FIXED DEPOSITS:

Your Company has not accepted any fixed deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

7. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

Loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 form part of the notes to the Financial Statements provided in this Annual Report.

8. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations.

9. CONSERVATION OF ENERGY:

a) Company ensures that the operations are conducted in the manner whereby optimum utilization and maximum possible savings of energy is achieved.

b) As the impact of measures taken for conservation and optimum utilization of energy are not quantitative, its impact on cost cannot be stated accurately.

c) Since the Company does not fall under the list of industries, which should furnish this information in Form A annexed to the aforesaid Rules, the question of furnishing the same does not arise.

10. TECHNOLOGY ABSORPTION:

Company's products are grown by using in-house know how and no outside technology is being used for operational activities. Therefore no technology absorption is required. The Company constantly strives for maintenance and improvement in quality of its products and entire Research & Development activities are directed to achieve the aforesaid goal.

11. RESEARCH & DEVELOPMENT:

A) Details of R & D Activity

- The Company has a Research & Development unit working under the expertise of eminent scientist Dr. Ishwar D. Patel, Ex. Scientist G.A.U., Gujarat.

- The company has two Research & Development farms, situated at Maktupur and Valad village having land of 14.25 acres and 33.71 acres respectively.

B) Future Plan of Action

- Innovation is a journey and your company is well placed to ensure that it continues to maintain a strong track record in this field.

12. FOREIGN EXCHANGE EARNINGS AND OUT-GO :

During the period under review there was no foreign exchange earnings or out flow.

13. INDUSTRIAL RELATIONS:

During the year under review, your Company enjoyed cordial relationship with workers and employees at all levels.

14. BOARD OF DIRECTORS:

A) Composition, Category of Directors and their directorship as on March 31, 2016.

Name of the Director

Category of Directorship

No. of Directorship in other Companies

Shri Pravinbhai M. Patel

Managing Director

5

Shri Mafatbhai J. Patel

Chairman

3

Shri Dhanajibhai S. Patel

Executive Director

3

Shri Samir J. Shah

Independent Director

Nil

Shri Mukesh R. Sheth

Independent Director

Nil

Smt. Riddhi Nimit Shah

Independent Director

Nil

B) Meetings

During the year 14 (FOURTEEN) Board Meetings were convened and held. The details of which are annexed herewith as "Annexure III". The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

15. DIRECTOR'S RESPONSIBILITY STATEMENT:

In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:

i) In the preparation of the annual accounts, the applicable accounting standards have been followed.

ii) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review.

iii) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) The directors have prepared the annual accounts on a going concern basis.

v) 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.

vi) The directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.

16. RELATED PARTY TRANSACTIONS:

All related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large. Details have been given in Form AOC-2 annexed.

17. SUBSIDIARY COMPANIES:

The Company has Four Subsidiary companies.

Sr. No

Name of the Company

% of Shares held

1.

Mangalam Nutrifeeds Private Limited

100.00%

2.

Unjha Psyllium Private Limited

100.00%

3.

Unjha Spices Private Limited

100.00%

4.

Kiositech Engineering Limited

99.94%

18. MANAGEMENT DISCUSSION & ANALYSIS:

In compliance with Regulation 34(3) read with Schedule V(B) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations'), Management Discussion and Analysis forms part of this Annual Report.

19. CORPORATE GOVERNANCE REPORT:

In compliance with Regulation 34(3) read with Schedule V(C) of the Listing Regulations, a Report on Corporate Governance forms part of this Annual Report. The Auditors' certificate certifying compliance with the conditions of corporate governance as prescribed under Schedule V(E) of the Listing Regulations is annexed to the Corporate Governance Report.

20. AUDITOR'S REPORT:

The observation made in the Auditors' Report read together with relevant notes thereon are self explanatory and hence, do not call for any further comments under Section 134 of the Companies Act, 2013.

21. AUDITORS:

At the Annual General Meeting held on July 31, 2016, Piyush J. Shah & Co., Chartered Accountants, Ahmedabad, were appointed as Statutory Auditors of the Company to hold office till the conclusion of the Annual General Meeting to be held in 2020. Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules framed there under, the appointment of the auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of Piyush J Shah & Co., Chartered Accountants, as statutory auditors of the Company is placed for ratification by the Shareholders.

22. SECRETARIAL AUDIT:

Monika Bhatia, Practicing Company Secretary was appointed to conduct the Secretarial Audit of the Company for the year 2015-16, as required under Section 204 of the Companies Act, 2013 and Rules there under. The secretarial audit report does not contain any qualification, reservation or adverse mark.

23. EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure".

24. ACKNOWLEDGEMENT:

Your Directors would like to express their sincere appreciation for the assistance and co-operation received from the banks, government authorities, customers, vendors, farmers, employees and the members during the year under review.

Place: Ahmedabad By Order of Board of Directors

Date: 29/08/2016 For Mangalam Seeds Limited

CIN:L01112GJ2011PLC067128

Registered office: Pravinbhai M. Patel

202, Sampada Building, B/H Tulsi Complex Managing Director

Mithakhali Six Road, Navrangpura, DIN: 03173769

Ahmedabad: 380009

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