MPF Systems Ltd Directors Report.
Your Directors are pleased to present the 26th Annual Report of the Company together with the Audited Financial Statements for the year ended 31st March, 2019.
SUMMARY OF FINANCIAL RESULTS OF THE COMPANY:
|Profit Before Interest and depreciation||(19,08,461)||(12,39,901)|
|Net Profit/(Loss) After Tax||(19,08,461)||(12,39,901)|
Income of the company from operations is Rs. Nil. Profit/Loss before tax is Rs. (19,08,461) as compared to Rs. (12,39,901) in previous year.
TRANSFER TO RESERVES:
Due to unabsorbed losses no amount has been proposed to be transferred to Reserves.
In view of accumulated losses, your Directors did not recommend any dividend for the year.
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 as order by BSE has been completed and BSE has passed the order for the same.
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.
NUMBER OF MEETINGS OF THE BOARD:
The Board met four 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.
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, 2019 , 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, 2019, 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 (3) 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, 2019, 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 31stMarch 2019 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. (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.
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 high level 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.
Under section 139 of the Companies Act, 2013 and the Rules made there under, it is mandatory to rotate the Statutory Auditors on Completion of the maximum term permitted under the provisions of the Companies Act, 2013. In line with the same, M/s Kala Jain & Co., Chartered Accountants, (Firm registration number - 127886W), was appointed as the statutory auditors of the Company to hold office for a period of five consecutive years from the conclusion of 22nd Annual General Meeting of the Company held on 30th June, 2015, till the conclusion of 27th Annual General Meeting to be held in year 2020. 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.
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 2018-19, as required under Section 204 of the Companies Act, 2013 and Rules there under. The Secretarial Audit Report for F.Y. 2018-19 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 2019-20.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE COURTS/REGULATORS:
Company has received SCN from SEBI dated 7TH August 2018, under rule 4(1) of SEBI (Procedure for holding Inquiry and ImposingPenalities by Adjudicating Officers ) Rules ,1995.
Company has received notice from SEBI vide SEBI/HO/A&E/EAD/KS/AA/25961/2018 dated
14 TH September 2018, hereing notice under rule 4(1) of SEBI (Procedure for holding Inquiry and
Imposing Penalities by Adjudicating Officers ) Rules ,1995.
Company has received an adjudication order from SEBI vide EAD-8/KS/AA/OW/P/2019/2408/1 dated 23rd jan,2019.
The application for listing of new shares on account of reduction of capital has been received on 26th June, 2018. The trading of shares temporarily under hold by the stock exchange On account of GSM.
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.
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.
BANK AND FINANCIAL INSTITUTIONS:
Directors are thankful to their bankers for their continued support to the company.
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|
|Dated: 29th May, 2019||Kirti Salvi|