DIRECTOR'S REPORT TO The SHARE HOLDERS The Board of Directors has pleasure in presenting the Nineteenth Annual Report along with the Audited Accounts for the year ended on 31st March, 2015 STATE OF COMPANY'S AFFAIRS AND FUTURE OUTLOOK Since its inception, the Company is engaged in agriculture operations. The Company is broadly engaged in cultivation of Organic Vegetables, Organic Grains and Cereals. We have an integrated facility for cultivation, processing and distribution of agricultural produce. Apart from the above, the Company is also engaged in dairy farming and production and distribution of dairy products. Recently the Company has ventured into the field of renewable energy. The Company has been successfully running a Bio Gas Power Plant on pilot basis at its Kapli Farms. The said plant has been operational for a period of more than 1 year. Apart from that, the Company is in process of commissioning a 1000 M3 capacity Bio Gas Plant for Power Generation at the factory premises of its subsidiary, M/s Sanjeevani Fertilizers and Chemicals Private Limited. The Company is also planning to set up a 3 MCi commercial radiation processing facility for approved low and medium dose items such wheat, atta, Soya bean and spices such as Coriander, Chilies etc. in Pitampura Industrial Area on Agra- Mumbai, Road, Indore, Madhya Pradesh and has entered into a Memorandum of Understanding ("MOU") with President of India acting through and represented by Board of Radiation and Isotope Technology ("BRIT"). DIVIDEND However with the view to conserve the resources of company the directors are not recommending any dividend. INCREASE IN ISSUED, SUBSCRIBED AND PAID UP EQUITY SHARE CAPITAL During the year, the Company issued and allotted 36,00,000 equity shares of the Company through initial public offer by listing on BSE SME platform. Consequently, the issued, subscribed and paid-up capital of the Company increased from Rs. 8,31,75,500/- divided into 83,17,550 equity shares of Rs. 10 each to Rs. 11,91,75,500/- divided into 1,19,17,550 equity shares of Re. 10 each. EXTRACT OF ANNUAL RETURN The extract of Annual Return, in format MGT -9, for the Financial Year 2014-15 has been enclosed with this report as an annexure- 3. NUMBER OF MEETINGS OF THE BOARD The details of number of meeting of the Board held during the financial year 2014-15 forms part of the Corporate Governance Report. PARTICULARS OF LOAN, GUARANTEES AND INVESTMENTS UNDER SECTION 186 Details of Loans and Investments covered under provision of section 186 of the Companies Act, 2013 are stated in the notes of financial statements. RELATED PARTY TRANSACTION In terms of the Accounting Standard-18 "Related Party Disclosures", as notified under the Companies (Accounting Standards) Rules, 2006, the Company has identified the related parties covered therein and details of transactions with such related parties have been disclosed in Notes to the Accounts forming part of this Annual Report. Transactions with related parties entered into by the Company are in the normal course of business on arm's length basis and do not have potential conflicts with the Company. Further, these transactions are also placed in the Audit Committee Meeting(s). COMMITTEES OF THE BOARD During the year, in accordance with the Companies Act, 2013, the Board re-constituted some of its Committees. There were four committees one of them, IPO committee which got dissolved as the objective of the committee was achieved so presently there are three Committees of the Board, as follows: • Audit Committee • Nomination and Remuneration Committee • Stakeholders' Relationship Committee Details of all the Committees along with their charters, composition and meetings held during the year, are provided in the "Report on Corporate Governance", a part of this Annual Report. SUBSIDIARY There are two subsidiaries of Raghuvansh Agrofarms Limited: 1. Sanjeevani Fertilizers and Chemicals Private Limited Sanjeevani Fertilizers and Chemicals Pvt. Ltd. is unlisted material subsidiary of the Raghuvansh Agrofarms Limite. It holds 51.00% of the total equity share capital of the company; SFCPL is primarily engaged in cultivation of fruits. Sanjeevani has orchards of Pomegranate, Guava and Banana etc. The Orchards of SFCPL span across 1.888 hectares of farm land located at Village Gaur Pathak, Thesil Pokhrayan, District Ramabai Nagar (Old Kanpur Dehat). The said farm land is owned by SFCPL. The gross revenue of the company stood at Rs. 1,17,93,141/-(previous year Rs. 80,54,142/-). Profit after Tax stood Rs. 6,29,547/- (Previous year Rs. 94,484/-). 2. Kanpur Organics Private Limited Kanpur Organics Private Limited is unlisted subsidiary of the Raghuvansh Agrofarms Limited as it holds 94.78% of total equity Shares of the Company. The gross revenue of the company stood at Rs.60,52,361/-[Previous year Rs. 1,22,501/- (from other income)]. Profit after Tax Rs. 5,09,035/-(Previous year Rs. 26,019/-). The details of financial performance of Subsidiaries are furnished in annexure-4 and attached to this report. RISK MANAGEMENT Adverse weather conditions, future climate changes, Increases in labor, personnel and benefits costs, may adversely affect our business operations, as well as our operating results. To mitigate such risk the management is always vigilant to overcome the aforesaid problem by applying appropriate technology, employing deserving executives, proper reporting and recording of data, timely evaluation and best decisions making. DIRECTORS AND KEY MANAGERIAL PERSONNEL In accordance with the provisions of the Act and the Articles of Association of the Company, Mrs. Renu Agarwal, Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible has offered herself for reappointment. During the financial year under review the members approved the appointment of Mrs. Renu Agarwal (DIN: 01767959) Non-executive Non Independent Director, Mr. Subhash Ghosh (DIN: 02195056) Non-executive Non Independent Director who are liable to retire by rotation, Mr. Vishal Maheshwari (DIN: 06766258) Independent Director and Mr. Rajesh Kumar (DIN: 06703566) Independent Director who are not liable to retire by rotation. And Mr. Devendra Pratap Singh and Mr. Vinod Kumar Maheshwari have resigned from the office of directorship on 01.07.2014. The following employees were designated as whole time Key Managerial Personnel by the Board of Directors during the period under review. Mr. Subodh Agarwal - Managing Director Mr. Devendra Pratap Singh - Chief Financial Officer (appointed on 01.08.2014). Mr. Rajit Verma- Company Secretary and Compliance Officer (appointed on 01.09.2014). INTERNAL FINANCIAL CONTROLS The Company has in place adequate internal financial controls with reference to financial statements. During the Year, such controls were tested and no reportable material weaknesses in the design or operation were observed. PUBLIC DEPOSITS As on March 31, 2015, there are no public deposits. There are no deposits that remain unclaimed. The company has not renewed/ accepted fixed deposits. BOARD INDEPENDENCE Our definition of 'Independence' of Directors is derived from Section 149(6) of the Companies Act, 2013 and Clause 52 of the Listing Agreement with Stock Exchanges. Based on the confirmation / disclosures received from the Directors and on evaluation of the relationships disclosed, the following Non-Executive Directors are Independent in terms of Clause 52 of the Listing Agreement and Section 149(6) of the Companies Act, 2013 :- • Mr. Vishal Maheshwari • Mr. Rajesh Kumar SECRETARIAL AUDITOR The Board has appointed M/s. JCA & CO. , Practicing Company Secretaries, to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith marked as annexure-1 to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. AUDIT COMMITTEE The Audit Committee comprises of Mr. Vishal Maheshwari (Chairman), Mr. Subodh Agarwal (Member), Mr. Rajesh Kumar (Member). All the recommendations made by audit committee were accepted by Board. BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013 and Clause 52 of the Listing Agreement, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Committees. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance. A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Secretarial Department. The Directors expressed their satisfaction with the evaluation process. COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION The Policy of the Company on Directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under sub-section (3) of section 178, is explained in the Corporate Governance Report. VIGIL MECHANISM The Company has formulated a Whistle Blower Policy to establish a vigil mechanism for Directors and employees of the Company to report concerns about unethical behavior, actual or suspected fraud or violation of the company's code of conduct or ethics policy. The Whistle Blower Policy is available on the website of the Company. CORPORATE GOVERNANCE The Company has complied with the Corporate Governance practices as stipulated under listing agreement with the Stock Exchange and rules set out by SEBI. A separate section on Corporate Governance under the Listing Agreement forms the part of this Annual Report. And the certificate from the Practicing Company Secretary, confirming the Compliances, is annexed as an annexure-2. EMPLOYEES The particulars as required to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are furnished as none of the employee is drawing remuneration of Rs.5,00,000/- or more per month if employed for a part of the year or Rs.60,00,000/-if employed throughout the period. STATUTORY AUDITORS M/s Naval Kapur & Co., Chartered Accountants (Firm Registration No. [005851C], the Statutory Auditors of the Company who is to hold office from the conclusion of the 18th Annual General Meeting until the conclusion of the 23rd Annual General Meeting of the Company subject to ratification in every Annual General Meeting, be and is hereby ratified. AUDITORS' REPORT The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark which is annexed hereto and forms part of the Annual Report. CONSOLIDATED FINANCIAL STATEMENTS In accordance with the Accounting Standard AS-21 on Consolidated Financial Statements read with Clause 34 of the Listing Agreement, the Consolidated Audited Financial Statements and Consolidated Cash Flow Statement for the year ended March 31, 2015 are provided in the Annual Report. CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The Company has ventured into the field of renewable energy. The Company has been successfully running a Bio Gas Power Plant on pilot basis at its Kapli Farms. The said plant has been operational for a period of more than 1 year. Apart from that, the Company is in process of commissioning a 1000 M3 capacity Bio Gas Plant for Power Generation at the factory premises of its subsidiary, M/s Sanjeevani Fertilizers and Chemicals Private Limited and has entered into Memorandum of Understanding. The Company is also planning to set up a 3 Mci commercial radiation processing facility for approved low and medium dose items such wheat, atta, Soya bean and spices such as Coriander, Chilies etc. in Pitampura Industrial Area on Agra- Mumbai, Road, Indore, Madhya Pradesh and has entered into a Memorandum of Understanding dated August 23, 2014 ("MOU") with President of India acting through and represented by Board of Radiation and Isotope Technology ("BRIT"). There was no foreign exchange inflow or Outflow during the year under review. DIRECTORS' RESPONSIBILITY STATEMENT Your Directors hereby confirm that: i. In the preparation of the annual accounts for financial year ended on March 31, 2015, 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 are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at March 31, 2015 and of the profit of the Company for the year ended on that date. 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 for financial year ended on March 31, 2015 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 systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. ACKNOWLEDGEMENT We thank our customers, business associates, bankers and government authorities for their continued support during the last year. We wish to convey our deep appreciation to the suppliers/vendors for their valuable support. We also place on record our sincere appreciation for the enthusiasm and commitment of Company's employees for the growth of the Company and look forward to their continued involvement and support. By order of the Board of Directors For Raghuvansh Agrofarms Limited (Subodh Agarwal) Managing Director DIN: 00122844 (Renu Agarwal) Director DIN: 01767959 Date: 18.08.2015 Place: Kanpur |