MPF Systems Ltd Directors Report.

Dear Members,

Your Directors are pleased to present the 27th Annual Report of the Company together with the Audited Financial Statements for the year ended 31st March, 2020.

SUMMARY OF FINANCIAL RESULTS OF THE COMPANY:

Standalone

PARTICULARS 2019-2020 2018-2019
Total Income - -
Total Expenditure 13,05,436 19,08,461
Profit Before Interest and depreciation (13,05,436) (19,08,461)
Less: Depreciation - -
Interest - -
Tax - -
Net Profit/(Loss) After Tax (13,05,436) (19,08,461)

OPERATIONAL PERFORMACE:

Income of the company from operations is Rs. Nil. Loss before tax is Rs. (13,05,436) as compared to Rs(19,08,461) in previous year.

TRANSFER TO RESERVES:

Due to unabsorbed losses no amount has been proposed to be transferred to Reserves.

DIVIDEND:

In view of accumulated losses, your Directors did not recommend any dividend for the year.

DEPOSITS:

The company has not accepted/renewed deposits within the meaning of Section 73 of the Companies Act, 2013 and rules made there under from public or from the shareholders during the period under review.

MANAGEMENTS DISCUSSION AND ANALYSIS REPORT:

Managements Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 (3) read with Schedule Part V of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 with Stock Exchange in India, is presented in a separate Annexure -I forming part of the Annual Report.

CHANGE IN THE NATURE OF BUSINESS, IF ANY:

There was no change in the nature of business of the Company or any of its subsidiaries during the year.

MATERIAL CHANGES AND COMMITMENT, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

During the year under review, there were no material changes and commitments affecting the financial position of the Company.

FORENSIC AUDIT:

The Forensic Audit was conducted for the period from April 1,2015 to January 15, 2018.The Forensic Audit

Report was submitted by BSE to SEBI on September 27, 2018.On the basis of the examination of Forensic Audit Report by SEBI an Show Cause Notice was issued dated August 9, 2019.The Company has filled its reply dated January 15, 2020. After considering all the facts and circumstances of the case and exercising the power conferred an order was passed by Adjudicating Officer dated February 28, 2020 imposing a monetary penalty of Rs. 6,00,000 on the Company. There was also another proceeding initiated by the Whole Time Member, SEBI by issuing a show cause notice dated April 22,2019.The Company has filled its reply dated November 22,2019 to the SCN. After considering all the facts and circumstances of the case and exercising the power conferred an order was passed by Whole Time Member (SEBI), dated April 20, 2020. SEBI has issued another Show Cause Notice dated May 05, 2020 after an order passed by Adjudicating Officer dated February 28, 2020 .The Company has filled its reply dated May 21,2020 to the SCN.Also the Company is in the process of filing an appeal before Securities Appellate Tribunal. The Company is unable to predict the scope, duration or the outcome of these matters, therefore no provision has been made for penalty leviable due to the above report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

As per the provisions of Section 149(4) of the Companies Act, 2013 every listed company shall have at least one-third of the total number of directors as independent directors. The Board of the Company to comply with the aforesaid requirements

As per the Section 149(10) of the Companies Act, 2013 provides that independent director shall hold office for a term of upto five consecutive years on the Board of the Company. Further, according to the Section 149(11) of the Companies Act, 2013, no independent director shall be eligible for appointment for more than two consecutive terms of five years. Sub-section (13) states that the provisions of retirement by rotation as defined in Sub-sections (6) and (7) of Section 152 of the Act shall not apply to such independent directors.

1. Mr. Anil Mansukhlal Kothari (DIN: 01991283) has been reappointed as non- executive Independent Director for the 2nd term (5 years) w.e.f 23 March,2020 to 20 March, 2025 for period of 5 years.

2. Mrs. Kirti Ghag Rakesh (DIN: 07141300) has been re-appointed as Managing Director for the 2nd term w.e.f. August 26, 2020 to August 25, 2025 for a period of 5 years.

NUMBER OF MEETINGS OF THE BOARD:

The Board 5 times during the financial year, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013.

INDEPENDENT DIRECTORS DECLARATION:

The Company has received necessary declaration from each independent director under Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015.

The Independent Directors under section 149(6) of the Companies Act, 2013 declared that:

1. They are not promoters of the Company or its holding, subsidiary or associate company;

2. They are not related to promoters or directors in the company, its holding, subsidiary or associate company.

3. The independent Directors have /had no pecuniary relationship with company, its holding, subsidiary or associate company , or their promoters, or directors, during the two immediately preceding financial years or during the current financial year;

4. None of the relatives of the Independent Director has or had pecuniary relationship or transaction with the company, its holding, subsidiary or associate company, or their promoters, or directors, amounting to two per cent or more of its gross turnover or total income or fifty lakh rupees or such higher amount as may be prescribed, whichever is lower, during the two immediately preceding financial years or during

the current financial year;

5. Independent Director, neither himself nor any of his relatives--

(i) holds or has held the position of a key managerial personnel or is or has been employee of the company or its holding, subsidiary or associate company in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed;

(ii) is or has been an employee or proprietor or a partner, in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed, of--

(A) a firm of auditors or company secretaries in practice or cost auditors of the company or its holding, subsidiary or associate company; or

(B) any legal or a consulting firm that has or had any transaction with the company, its holding, subsidiary or associate company amounting to ten percent or more of the gross turnover of such firm;

(iii) Holds together with his relatives two percent. or more of the total voting power of the company; or

(iv) is a Chief Executive or Director, by whatever name called, of any nonprofit organization that receives twenty-five percent. or more of its receipts from the company, any of its promoters, directors or its holding, subsidiary or associate company or that holds two percent or more of the total voting power of the company;

6. Independent Director possesses such qualifications as may be directed by the Board.

7. The Company & the Independent Directors shall abide by the provisions specified in Schedule IV of the Companies Act, 2013.

BOARD EVALUATION:

SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 mandates that the Board shall monitor and review the Board evaluation framework. The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual directors. The Schedule IV of the Companies Act, 2013 states that the performance evaluation of independent directors should be done by the entire Board of Directors, excluding the director being evaluated.

The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The Board approved the evaluation results along with evaluation done by the Nomination and Remuneration Committee.

PERFORMANCE OF THE BOARD AND COMMITTEES:

During the year under review, the performance of the Board & Committees and Individual Director(s) based on the below parameters was satisfactory:

(i) All Directors had attended the Board meetings.

(ii) The remunerations paid to Executive Directors are strictly as per the Company and industry policy.

(iii) The Independent Directors only received sitting fees.

(iv) The Independent Directors contributed significantly in the Board and committee deliberation and business and operations of the Company and subsidiaries based on their experience and knowledge and Independent views.

(v) The Credit Policy, Loan Policy and compliances were reviewed periodically;

(vi) Risk Management Policy was implemented at all critical levels and monitored by the Internal Audit team who places report with the Audit committee and Board.

MEETING OF INDEPENDENT DIRECTORS:

Pursuant of the provision of Section 149 (8) of the Companies Act, 2013 read with Schedule IV and Regulation 25 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, the Independent Directors of the Company held their meeting on 12th February, 2020, reviewed the performance of non- independent directors and the Board as a whole including the Chairperson of the Company, views expressed by the executive directors and non-executive directors at various level, and quantified the quality, quantity and timeliness of flow of information between the Company, management and the Board and expressed satisfaction. The Board is professionally managed.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION:

The current policy is to have an appropriate mix of executive and independent directors to maintain the independence of the Board and separate its functions of governance and management. As on 31st March, 2020, the Board consists of 3 members. Out of which one is the Managing Director, two are independent Directors.

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 of Section 178 of the Companies Act, 2013, adopted by the Board and are stated in this Board report. We affirm that the remuneration paid to the directors is as per the terms laid out in the nomination and remuneration policy of the Company.

COMMITTEES OF THE BOARD:

Currently, the Board has Four Committees :(1) Audit Committee, (2) Nomination and Remuneration Committee,(3) Stakeholders Relationship Committee, (4) Shares Transfer Committee,

A detailed note on the Board and its Committees is provided under the Corporate Governance Report that forms part of this Annual Report.

NOMINATION AND REMUNERATION COMMITTEE AND STAKEHOLDERS RELATIONSHIP COMMITTEE:

Pursuant to the Section 178 of the Companies Act, 2013, the Company has set up a Nomination and Remuneration and Stakeholders Relationship Committee. A detailed note on the composition of the Committees is provided in the corporate governance report section of this Annual Report.

The Key Features of the Policy of the said committee are as follows:

For Appointment of Independent Director (ID):

a. Any person who is between the age of 25 years and below 75 years eligible to become Independent Director(ID);

b. He has to fulfill the requirements as per section 149 of the Companies Act, 2013 read with Clause 49 of the Listing Agreement;

c. Adhere to the code of conduct as per Schedule IV to the Companies Act, 2013;

d. Strictly adhere to the Insider Trading Regulation of the SEBI and Insider Trading policy of the Company;

e. Independent Director should have adequate knowledge and reasonably able to contribute to the growth of the Company and stakeholders;

f. Independent Director should be able to devote time for the Board and other meetings of the company;

g. Entitled for sitting fees and reasonable conveyance to attend the meetings; and

h. Able to review the policy, participate in the meeting with all the stakeholders of the company at the Annual General Meeting.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the Section 134(3)(c) and Section 134 (5) of the Companies Act, 2013, the Board of Directors of the Company hereby confirm:

(i) That in the preparation of the accounts for the financial year ended 31st March, 2020, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) That 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 and loss of the Company for the year under review;

(iii) That 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;

(iv) That the Directors have prepared the accounts for the financial year ended 31st March 2020 on a going concern basis.

(v) The internal financial controls are laid and have been followed by the company and that such controls are adequate and are operating effectively. Such controls means controls and policies and procedures adopted and adhered by the company for orderly and efficient conduct of the business for safeguarding assets, prevention and detection of frauds and errors and maintenance of accounting records and timely preparation of financial statements and review its efficiency.

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.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

In terms of the provisions of Section 177(9) of the Companies Act, 2013, the Company has implemented a vigil mechanism named Whistle Blower Policy to deal with instance of fraud and mismanagement, if any, in staying true to our values of Strength, Performance and Passion and in line with our vision of being one of the most respected companies in India, the Company is committed to the high standards of Corporate Governance and stakeholder responsibility.

A Committee has been constituted which looks into the complaints raised. The Committee reports to the Audit Committee and the Board. The Whistle Blower Policy ensures that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination will be meted out to any person for a genuinely raised concern.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys 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 disclosures.

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee.

The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company.

Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to Board.

SDK & Associates (Membership no- 111573) as the internal auditor for the financial year 2020-21 STATUTORY AUDITORS:

pursuant 139, 142 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 and pursuant to the recommendation made by the Audit Committee to the Board of Directors, M/s. Kala Jain & Co., Chartered Accountants, having registration no. 127886W be and are hereby re-appointed as a Auditors of the Company , who shall hold office from the conclusion of this 27th Annual General Meeting for a term of 5 years till conclusion of the 32nd Annual General Meeting to be held in the calendar year 2025 and that the Board of Directors be and is hereby authorized to fix such remuneration as may be determined by the Audit Committee in consultation with the Auditors, and that such remuneration may be paid on a progressive billing basis in addition to reimbursement of all out-of-pocket expenses as may be incurred in connection with the audit of the accounts of the Company.

The requirement for the annual ratification of auditors appointment at the AGM has been omitted pursuant to Companies (Amendment) Act, 2017 notified on May 07, 2018.

AUDITORS REPORT:

The Auditors have not made any qualification to the financial statement. Their reports on relevant notes on accounts are self-explanatory and do not call for any comments under section 134 of the companies Act, 2013.

SECRETARIAL AUDITORS AND THEIR REPORT:

M/s. Ramesh Chandra Mishra & Associates, Company Secretary in Practice was appointed to conduct the secretarial audit of the Company for the financial year 2019-20, as required under Section 204 of the Companies Act, 2013 and Rules there under. The Secretarial Audit Report for F.Y 2019-20 is Annexure-II to this Boards Report.

The Board has re-appointed M/s. Ramesh Chandra Mishra & Associates, Company Secretary in Practice, as secretarial auditor of the Company for the financial year 2020-21.

SIGNIFICANT AND MATERIALORDERS PASSED BY THE COURTS/REGULATORS:

The Forensic Audit was conducted for the period from April 1,2015 to January 15, 2018.The Forensic Audit Report was submitted by BSE to SEBI on September 27, 2018.On the basis of the examination of Forensic Audit Report by SEBI an Show Cause Notice was issued dated August 9, 2019.The Company has filled its reply dated January 15, 2020. After considering all the facts and circumstances of the case and exercising the power conferred an order was passed by Adjudicating Officer dated February 28, 2020 imposing a monetary penalty of Rs. 6,00,000 on the Company. There was also another proceeding initiated by the Whole Time Member, SEBI by issuing a show cause notice dated April 22,2019.The Company has filled its reply dated November 22,2019 to the SCN. After considering all the facts and circumstances of the case and exercising the power conferred an order was passed by Whole Time Member (SEBI), dated April 20, 2020. SEBI has issued another Show Cause Notice dated May 05, 2020 after an order passed by Adjudicating Officer dated February 28, 2020 .The Company has filled its reply dated May 21,2020 to the SCN.Also the Company is in the process of filing an appeal before Securities Appellate Tribunal. The Company is unable to predict the scope, duration or the outcome of these matters, therefore no provision has been made for penalty leviable due to the above report

1. EFD/DRA1 /SM/RR/MPFSL / 10051 / 2019/ 01 DATED April 22,2019

Show cause notice under 11(1) ,11(4) ,11A AND 11B OF SEBI ACT 1992 AND SECTION 12A OF SECURITIES CONTRACT (REGULATION) ACT,1956 in the matter of MPF Systems Limited.

2. EFD/DRA1 /RJB/TT/MPF / 28332 / 2019/ 01 DATED October 25,2019

SCN dated April 22,201-9 issued under Section 11(4) and 11(B) in the matter of MPF Systems Limited.

3. EAD-7/BJD/BKM/ 20494/1/2019 dated 09-08-2019

Notice under Rule 4(1) of SEBI (Procedure for Holding inquiry and imposing penalties by Adjudications Officer) Rules. 1995 read with Section 15 I of SEBI Act. 1992 & Securities Contracts (Regulation) (Procedure for Holding inquiry and imposing Penalties by Adjudicating Officer) Rules. 2005 read with Section 23 I of SCRA 1956.

Reply to all SCN has been given in reasonable due dates.

CONSERVATION OF ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE:

The details of Conversion of Energy, Technology Absorption are not applicable in the case of the company. However the company took adequate steps to conserve the energy and used the latest technology.

During the year under review there were no foreign Exchange Earnings. The Foreign Exchange outgo is Nil.

RELATED PARTY TRANSACTIONS/CONTRACTS:

The Company has implemented a Related Party Transactions policy for the purposes of identification and monitoring of such transactions. All the transactions that were entered into during the financial year were on arms length basis and were in the ordinary course of business. There were 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.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

There were no loans, Guarantees and Investments covered under Section 186 of the Companies Act,2013. EXTRACT OF ANNUAL RETURNS:

Pursuant to the Section 134(3)(a) of the Companies Act, 2013, the details forming part of the extract of the Annual Return is Form MGT-9 is Annexure-III.

CORPORATE GOVERNANCE:

A Report on Corporate Governance along with a Certificate from M/s. Ramesh Chandra Mishra & Associates, regarding compliance with the conditions of Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 forms part of this Report and Annexure-IV to this Boards Report

CORPORATE SOCIAL RESPONSIBILITY:

As per the Companies Act, 2013 all companies having net worth of 500 crore or more or turnover of Rs. 1000 crore or more or a net profit of Rs. 5 crore or more during any financial year are required to constitute a appropriate corporate social responsibility (CSR) Committee of the Board of Directors comprising there or more directors, at least one of whom an independent director and such company shall spend at least 2% of the average net profits of the Companys three immediately preceding financial year.

The Company presently does not with any of the criteria stated herein above.

BANK AND FINANCIAL INSTITUTIONS:

Directors are thankful to their bankers for their continued support to the company.

ACKNOWLEDGMENTS:

Your Directors convey their sincere thanks to the Government, Banks, Shareholders and customers for their continued support extended to the company at all times.

The Directors further express their deep appreciation to all employees for commendable teamwork, high degree of professionalism and enthusiastic effort displayed by them during the year.

On behalf of the Board of Directors
For MPF Systems Limited
Place: Mumbai
Dated: 26.06.2020
Sd/-
Kirti Ghag Rakesh
Managing Director
DIN:07141300