Your Directors have pleasure in submitting their Thirty Second Annual Report on thebusiness and operations of the Company together with the Audited Financial Statements forthe financial year ended March 31 2017.
1. FINANCIAL RESULTS
The Company's financial performance under review along with previous year's figures isgiven hereunder:
|Particulars ||Current Year ||Previous Year |
| ||Amount Rs. ||Amount Rs. |
|Income From Operations ||53289984 ||60156235 |
|Other Income ||2538122 ||871596 |
|Total Income ||55828106 ||61027831 |
|Profit before Interest Depreciation & Tax ||49670492 ||53695877 |
|Less : Interest ||11943363 ||19090860 |
|Profit Before Depreciation ||37727129 ||34605017 |
|Less : Depreciation ||721011 ||700963 |
|Profit After Depreciation and Interest ||37006118 ||33904054 |
|Less: Current Income Tax ||11100000 ||6300000 |
|Less: Previous year Adjustment of Income Tax ||915919 ||587566 |
|Less: Deferred Tax ||(3075423) ||(65549) |
|Net Profit After Taxation ||28065622 ||27082037 |
|Less: Dividend ||- ||6970900 |
|Less: Dividend Distribution Tax ||- ||1419111 |
|Less: Transfer to Statutory Reserve ||5613124 ||5416407 |
|Less: Provision for Standard Assets ||(106251) ||(33558) |
|Balance carried to Balance Sheet ||22558749 ||13309177 |
|Earning Per Share (Basic/Diluted) ||4.03 ||3.89 |
2. TRANSFER TO RESERVE
A sum of Rs.5613124/- has been transferred to Special Reserve during the year. YourCompany does not propose to transfer any amount to General Reserve out of the amountsavailable for appropriation and an amount of Rs.22568749 is proposed to be retained inthe Profit & Loss account.
Your Directors are pleased to recommend dividend of Re.1.00 (Rupee One Only) per equityshare of Rs.10/- (Rupees Ten Only) each (i.e.10%) for the financial year ended March 312017. The dividend if approved and declared in the forthcoming Annual General Meetingwould result a Dividend outflow of Rs.6970900/- and dividend Distribution Tax ofRs.1419111/- aggregating a total outflow of Rs.8390011/-.
The Register of Members and Share Transfer Books will remain closed from September 222017 to September 29 2017 (both days inclusive) for the purpose of payment of dividendfor the financial year ended March 31 2017. Dividend will be paid to those Members whosenames appear in the Register of Members as on September 21 2017.
4. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND
In terms of Section 124 & 125 of the Companies Act 2013 read with The InvestorEducation and Protection Fund Authority (Accounting Audit Transfer and Refund) Rules2016 as amended till date any dividend which remains unpaid or unclaimed for a period of7 years from the due date of payment is required to be transferred by the Company to theInvestor Education & Protection Fund (IEPF) of the Central Government. In accordancewith the provisions for the financial year ended March 31 2009 the Company shalltransfer the unclaimed dividend amount to the IEPF within 30 days from November 05 2017.No claims shall lie against the Company in respect of any amounts which were unclaimed orunpaid for a period of seven (7) years from the dates they first became due for paymentand transferred to IEPF.
The Company updates the details of unclaimed / unpaid dividend on the Company's website- www.mukeshbabu.com and on MCA website - www.mca.gov.in from time to time.
5. SHARE CAPITAL
The paid-up Equity Share Capital of the Company as on March 31 2017 is Rs.696.75Lakhs. During the year under review the Company has neither issued any shares withdifferential voting rights nor granted any stock options nor any sweat equity.
6. PERFORMANCE REVIEW
Your Company earned a net profit of Rs.280.66 Lakhs for the financial year ended March31 2017 as compared to net profit of Rs.270.82 Lakhs in the previous financial year.Depreciation during the year is Rs.7.21 Lakh as compared to Rs.7.01 Lakhs in the previousfinancial year. Provision for taxation for the year is Rs.89.40 Lakhs (including DeferredTax Provision) as compared to Rs.68.22 Lakhs in the previous financial year.
7. PERFORMANCE OF SUBSIDIARY / JOINT VENTURE / ASOCIATE COMPANIES:
a) Subsidiary Company:
During the year under review the Company has only one subsidiary Mukesh BabuSecurities Limited (CIN: U67120MH1994PLC076455) As on March 31 2017 the authorised sharecapital of the Company is Rs. 5 Crores and the paid up Equity Share Capital of the Companyis Rs.5 Crores. The net profit of the Company for the year ended March 31 2017 is Rs.31.07 Lakhs as compared to Rs.160.63 Lakhs in previous year.
Accounts of Subsidiary:
The Consolidated Financial Statements of the Company prepared in accordance with theprovisions of Section 129(3) of the Companies Act 2013 and applicable AccountingStandards issued by the Institute of Chartered Accountants of India.. Pursuant to proviso(b) to Section 136(1) of the Companies Act 2013 a copy of the audited financialstatements for the year ended March 31 2017 of Mukesh Babu Securities Limited shall befurnished to any shareholder on demand. The financial statements of the Companyconsolidated financial statements along with relevant documents and separate auditedaccounts in respect of the subsidiary-Mukesh Babu Securities Limited are available on thewebsite of the Company www.mukeshbabu.com
b) Joint Venture / Associate Company
The Company does not have any Joint Venture / Associate Company.
CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to Section 129(3) of the Companies Act 2013 read with Rule 5 of The Companies(Accounts) Rules 2014 Statement containing salient features of the financial statementsof subsidiary is annexed to this report as ANNEXURE-A.
8. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OFTHE COMPANY THAT OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIALSTATEMENTS RELATE AND THE DATE OF THE REPORT
There are no material changes and commitments affecting the financial position of theCompany that occurred between the end of the financial year to which this financialstatements relate and the date of this report.
9. PUBLIC DEPOSITS
During the year under review the Company has neither accepted nor renewed any depositswithin the meaning of Section 73 and 74 of the Companies Act 2013 read together with TheCompanies (Acceptance of Deposits) Rules 2014.There are no outstanding deposits at the endof the year.
10. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER
SECTION186 OF THE COMPANIES ACT 2013
The provisions of Section 186 of the Companies Act 2013 pertaining to investment &lending activities is not applicable to the Company since the Company is NBFC whoseprincipal business is investment in securities financial services & credit Theparticulars of guarantees in any provided during the financial year are given in the notesto financial statement.
11. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED
All the related party transactions entered by the Company during the financial yearwere on an arms' length basis and were carried out in the ordinary course of business.During the year under review the Company had advanced loans to its subsidiary Mukesh Babu Securities Ltd. There were no materially significant related partytransactions made by the Company during the year under consideration with the PromotersDirectors or Key Managerial Personnel which have a potential conflict with the interest ofthe Company at large.
In accordance with the Regulation 23 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company has in place a Policy on Materiality ofRelated Party Transactions and a Policy on dealing with Related Party Transactions. ThePolicy is available on the Company's Website at www.mukeshbabu.com The particulars asrequired under the Companies Act 2013 are furnished in Form AOC-2 which is annexed as ANNEXURE B to this report
12. CORPORATE SOCIAL RESPONSIBILITY (CSR)
Section 135 of the Companies Act 2013 read with the Companies (Corporate SocialResponsibility Policy) Rules 2014 is not applicable to the Company for the financial yearunder review.
13. RBI GUIDELINES
The Company continues to comply with all the requirements prescribed by the ReserveBank of India from time to time.
14. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an internal control system commensurate with the size of itsoperations and nature of its business activities. The Internal Auditor monitors andevaluates the efficacy and adequacy of internal control system in the Company itscompliance with operating systems accounting procedures and policies at all locations ofthe Company.
15. RISK MANAGEMENT
The Board of Directors of the Company has formed a Risk Management Committee to frameimplement and monitor the Risk Management Policy for the Company. The Committee isresponsible for reviewing the risk management plan and ensuring its efficiency.
16. WHISTLE BLOWER POLICY/ VIGIL MECHANISM
As required under Regulation 22 of the Securities Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 the Company has an effectiveWhistle Blower Policy to deal with the instances of fraud and mismanagement. The detailsof the policy are enumerated in the Corporate Governance Report. The policy is availableon the Company's website at www.mukeshbabu.com.
The policy provides for adequate safeguard against the victimisation of the employeesand Directors who express their concerns. The Company has also provided direct access tothe Chairman of the Audit Committee on reporting issues concerning the interests ofemployees and the Company. The Vigil Mechanism is overseen by the Audit Committee.
17. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition and Redressal)Act 2013. Internal Complaints Committee has been set up to redress the complaintsreceived regarding sexual harassment. All employees (permanent contractual temporarytrainees) are covered under this policy. There were no cases reported during the financialyear ended March 31 2017.
18. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
a) RETIREMENT BY ROTATION
In terms of the provisions of Section 152(6) of the Companies Act 2013 Mrs. Dipali C.Shah whole-time Director (DIN: 07141559) retires by rotation at the forthcoming AnnualGeneral Meeting and being eligible offers herself for re-appointment. In accordance withRegulation 36 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 and applicable provisions of the Companies Act 2013 brief profile of the Directorto be re-appointed is included in the Notice which forms part of this Annual Report.
c) THE DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVERESIGNED DURING THE YEAR;
During the year under review no Director or Key Managerial Personnel were appointed orresigned.
19. DECLARATION BY INDEPENDENT DIRECTORS
The Company has received a declaration from Independent Directors at the time of theirrespective appointments and also at the first meeting of the Board of Directors held inFinancial Year 2016-17 that they meet the criteria of independence specified undersubsection (6) and (7) of Section 149 of the Act read with Rule 5 of theCompanies(Appointment and Qualification of Directors) Rules 2014 and SEBI LODRRegulations for holding the position of IDs and that they shall abide by the "Codefor Independent Directors" as per Schedule IV of the Act.
20. BOARD AND COMMITTEES
The details of the constitution and meetings of the Board and its Committees heldduring the year are provided in the Corporate Governance Report which forms part of thisAnnual Report. During the year Four Board meetings were held and the gap between two BoardMeetings did not exceed 120 days and atleast one meeting has been held in each Quarter.
21. BOARD'S EVALUATION
Pursuant to the provisions of the Companies Act 2013 and the corporate governancerequirements as prescribed by Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 ("SEBI Listing Regulations") theBoard has framed an Evaluation Policy for evaluating the performance of the BoardChairman Managing Director Executive Directors Independent Directors Non Executive Directors and its Committees. Based on the same the Board carried out an annualevaluation of its own performance the Directors individually as well as the evaluation ofthe working of its Audit Committee CSR Committee Nomination and Remuneration Committeeand Stakeholders Relationship Committee. A meeting of the Independent Directors was heldduring the year under review.
The Policy inter alia provides the criteria for performance evaluation such as -Board effectiveness quality of discussion contribution at the meetings business acumenstrategic thinking corporate governance practices contribution of the Committees to theBoard in discharging its functions etc.
The manner in which the evaluation was carried out has been explained in the CorporateGovernance Report.
22. POLICY FOR DETERMINATION OF MATERIALITY OF EVENTS OR INFORMATION
As required under Regulation 30(4)(ii) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company has formulated the Policy for Determinationof Materiality of Events or Information.
23. POLICY FOR DETERMINATION OF MATERIAL SUBSIDIARIES
As required under Regulation 16(1)(c) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company has formulated the Policy for Determinationof Material Subsidiaries.
24. COMPANY'S REMUNERATION POLICY
Pursuant to applicable Regulations of the SEBI Listing Regulations and Section 178 (3)of the Companies Act 2013 the Board has on the recommendation of the Nomination andRemuneration Committee framed a policy for selection and appointment of Directors KeyManagerial Personnel and fixing their remuneration including criteria for determiningqualification positive attributes independence of a director and key managerialpersonnel. The Remuneration Policy is provided in the Corporate Governance Report whichforms part of this Annual Report.
25. DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submit its Responsibility Statement that
(a) in the preparation of the annual accounts for the year ended March 31 2017 theapplicable accounting standards had been followed along with proper explanation relatingto material departures;
(b) they had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company as at 31st March 2017 and of the profitand loss of the company as on that date;
(c) they had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) they had prepared the annual accounts on a going concern basis; and
(e) they had laid down internal financial controls to be followed by the company andthat such internal financial controls are adequate and were operating effectively;
(f) they had devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
26. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR
There were no significant and material orders passed by the Regulators / Courts whichwould impact the going concern status of the Company and its future operations.
27. STATUTORY AUDITORS
Pursuant to the provisions of Section 139(2)(b) of the companies Act 2013 read withthe Companies (Audit & Auditors) Rules 2014 as amended till date Shah Shah &Shah Chartered Accountants (FRN- 116457W) will retire by rotation as the StatutoryAuditors of the Company at the ensuing AGM. The Board of Directors of the Company onrecommendation of the Audit Committee proposed to appoint Chaitanya C. Dalal (CCD')Chartered Accountants (FRN.101632W) as the Statutory Auditors of the Company for a periodof five (5) years to hold office from the conclusion of this Annual General Meeting("AGM") up to the conclusion of the 37th AGM of the Company to be held for thefinancial year ending 31-03-2022. CCD have confirmed that their appointment if madewould be in conformity with the provisions of Sections 139(1) and 141 of the Act readwith Rule 4 of the Companies (Audit and Auditors) Rules 2014 and have given their consentto be appointed as Statutory Auditors of the Company. The approval of the Members issought by passing an Ordinary Resolution to appoint CCD as Statutory Auditors of theCompany to hold office from the conclusion of ensuing AGM till the conclusion of the 37thAGM of the Company to be held for the F. Y. 2021-22 (subject to ratification of theirappointment at every AGM.
28. SECRETARIAL AUDITOR
The Board had appointed Mr. V.V. Chakradeo Practising Company Secretary (MembershipNo.FCS-3382 & COP No.:1705) to carry out Secretarial Audit under the provisions ofSection 204 of the Companies Act 2013 for the financial year 2016-17. The SecretarialAudit Report is annexed to this report as "Annexure C".
29. STATUTORY AND SECRETARIAL AUDITOR OBSERVATION
The Statutory Auditors of the Company have not reported any fraud as specified underthe second proviso to Section 143(12) of the Companies Act 2013.
There are no adverse remarks observation comments qualifications or reservations inthe Statutory Audit Report and Secretarial Audit Report.
30. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
Your Company is not engaged in any manufacturing activities and therefore noparticulars are required to be disclosed under the Rule 8(3) of the Companies (Accounts)Rules 2014 in respect of conservation of energy and technology absorption. Furtherthere were no foreign exchange earnings and outgo during the year under review.
30. CORPORATE GOVERNANCE
In compliance with Regulations 17 to 27 and 34 read with Schedule V of SEBI ListingRegulations as applicable the Corporate Governance Report is given in "AnnexureD" and forms part of the Annual Report. The report is duly certified by theStatutory Auditors of the Company.
The certificate duly signed by the Managing Director and Chief Financial Officer on thefinancial Statements of the Company for the year ended March 31 2017 as submitted to theBoard of Directors regarding compliance by the Board members and senior managementpersonnel with Company's Code of Conduct is also enclosed therewith.
32 EXTRACT OF THE ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT - 9 asrequired under Section 134 of the Companies Act 2013 read with Rule 8 (5) of the Company(Accounts) Rules 2014 is annexed to this report as "Annexure E".
PARTICULARS OF EMPLOYEES
The disclosures required pursuant to Section 197(12) of the Companies Act 2013 readwith Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 in respect of employees of the Company is provided as "Annexure F"to this report.
Further disclosure under Rule 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is not applicable to the Company.
In terms of the provisions of Section 197(12) of the Companies Act 2013 read with Rules5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 no employee was drawing remuneration in excess of the limits set out in thesaid rules.
33. MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT
The Management Discussion and Analysis is annexed to this Report as "Annexure G" and forms the integral part of this report and covers amongst othermatters the performance of the Company during the financial year under review as well asthe future prospects.
35. GREEN INITIATIVE
As in the previous years this year too we are publishing only the statutorydisclosures in the print version of the Annual Report. Electronic copies of the AnnualReport 2016-17 and Notice of the 32nd Annual General Meeting are sent to allmembers whose email addresses are registered with the Company / Depository Participant(s).For members who have not registered their email addresses physical copies are sent in thepermitted mode.
Your Directors place on record their sincere thanks to bankers business associatesconsultants and various Government Authorities for their continued support extended toyour Companies activities during the year under review. Your Directors also acknowledgegratefully the shareholders for their support and confidence reposed on your Company.
|FOR AND ON BEHALF OF THE BOARD OF DIRECTORS || |
|Mukesh Babu ||K. Chandrasekhar |
|Chairman ||Director |
|DIN: 00224300 ||DIN:00138951 |
|Date : 12th August 2017 || |
|Place: Mumbai || |