Your Directors have pleasure in presenting the 26th Annual Report of the Companytogether with the Audited Statement of Accounts and Auditor's Report for the year ending31st March 2019.
F MEC INTERNATIONAL FINANCIAL SERVICES LIMITED (CIN : L65100DL1993PLC053936) is aBSE Listed Company (Scrip Code : 539552) having Registered Office at IInd FloorCentral Bank Building 13-B Netaji Subhash Marg Daryaganj New Delhi- 110002
working as a Non Banking Finance Company after registration with Reserve Bank of India.
The Company has obtained registration as a Non- Banking Financial Company("NBFC) from Reserve Bank of India bearing Registration Number- B-14.01129dated 11th September 1998.
The performance highlights and summarized financial results of the Company are givenbelow:
Consolidated Income for the FY 2018-2019 increased by 143.19% to Rs. 125.06Lakhs as compared to Rs. 51.42 Lakhs in FY 20172018.
Consolidated Profit before Tax for the FY 2018-2019 increased by 3.99% to Rs.4.90 Lakhs as compared to Rs. 4.71 Lakhs in FY 20172018.
Consolidated Profit after Tax for the FY 2018-2019 increased by 73.74% to Rs.3.58 Lakhs as compared to Rs. 2.05 Lakhs in FY 20172018.
The Earning Per Share (EPS) of the Company for the FY 2018-2019 also witnessed ahike of 73.64% raising to Rs. 0.1153 per share as compared to Rs. 0.0664 per share in FY2017-2018.
Financial Year 2018-19 was a mixed year for the overall financial services sector inIndia. Despite operating in a challenging macro environment and with new Management in theCompany comprising of young blood Financial Year 2018-19 was a satisfying year for theCompany. Profit for the year raised to Rs. 382684 (Rupees Three Lakhs Eight-TwoThousand Six Hundred Six Hundred and Eighty Four) as compared to the Previous Year Profiti.e. Rs 234 694 (Rupees Two Lakhs Thirty Four Thousand Six Hundred and Ninety Four).
The Financial Results of the Company for the year ended 31st March 2019 are asfollows:-
|Particulars ||2018- 2019 ||2017-2018 |
|Gross Income ||12506055 ||5142414 |
|Profit before Interest and Depreciation ||620215 ||529893 |
|Less: Finance Charges ||(5537) ||(1434) |
|Gross Profit ||614678 ||528459 |
|Less: Provision for Depreciation ||(99942) ||(28761) |
|Net Profit Before Tax ||514736 ||499698 |
|Less: Current Tax ||(149318) ||(125577) |
|Less: Deferred Tax ||17266 ||(139427) |
|Net Profit After Tax ||382684 ||234694 |
|Appropriations: || || |
|Transfer to Special Reserves and Reserves for Bad and Doubtful Debts || || |
|(As per RBI Act 1934 - applicable for NBFC) ||246446 ||101673 |
|Proposed Dividend on Equity Shares ||- ||- |
|Tax on proposed Dividend ||- ||- |
|Earning per Equity Share (EPS) ||0.1234 ||0.0757 |
After adjusting the Revenue/ losses of the Subsidiary Company the Company has attainedthe Net profit of Rs. 357567 during the year. The detailed consolidated financials areas follows:-
|Particulars ||2018-2019 ||2017-2018 |
|Gross Income ||12506055 ||5142414 |
|Profit before Tax ||489618 ||470815 |
|TaxExpenses ||132051 ||265004 |
|Profit after Tax ||357567 ||205811 |
The Consolidated Financial Statement have been prepared by the Company in accordancewith the Companies Act 2013 ("the Act) and Accounting Standard (AS)-21 onConsolidated Financial Statements and other applicable accounting standards. The auditedConsolidated Financial Statements together with Auditor's Report form part of this AnnualReport.
The Authorised Share Capital of the Company as on 31st March 2019 was Rs.35000000 (Rupees Three Crore Fifty Lacs Only) and Paid-up Equity Share Capital ofthe Company as on March 31st 2019 was Rs. 31007000 (Rupees Three Crore Ten Lacsand Seven Thousand Only). There was no change in the Authorized or the Paid-upCapital/Subscribed Capital during the Financial Year 2018-19.
a. Buy Back Of Securities
The Company has not bought back any of its securities during the year under review asper the provisions of Section 68 of the Companies Act 2013 read with the Rule 17 of theCompanies (Share Capital and Debenture) Rules 2014.
b. Sweat Equity
The Company has not issued any Sweat Equity Shares during the year under review as perthe provisions of Section 54 of the Companies Act 2013 read with Rule 8 of the Companies(Share Capital and Debenture) Rules 2014.
c. Bonus Shares
No Bonus Shares were issued during the year under review as per the provisions ofSection 63 of the Companies Act 2013 read with Rule 14 of the Companies (Share Capitaland Debenture) Rules 2014.
d. Employees Stock Option Plan
The Company has not provided any Stock Option Scheme to the employees pursuant toSection 62 (1) (b) of the Companies Act 2013 read with Rule 12 of the Companies (ShareCapital and Debenture) Rules 2014.
e. Shares With Differential Rights
The Company has not issue any Equity shares with Differential Rights pursuant to theprovisions of Rule 4 of the Companies (Share Capital and Debenture) Rules 2014.
RESERVES AND SURPLUS
As per Section 45- IC of the Reserve Bank of India Act 1934 every Non -BankingFinancial Company shall create a Reserve Fund and transfer therein a sum not less than 20%of its Net Profit every year before declaring any dividend.
The Company is in practice of transferring a sum of 20% to the Reserve fundspecifically made for the purpose named Special Reserve as per RBI Act' fromthe Profit earned by the Company during the year.
Also the Company has pursuant to Notification of Reserve Bank of India dated January17 2011 vide Notification no. DNBS.PD.CC.No.207/03.02.002/2010-11 for making the Provisionof 0.25% for Standard Assets of NBFCs' has transferred a sum of 0.25% on the StandardAssets of the Company under the Reserve named "Provision for Bad and DoubtfulDebts.
Further the Company is complying with all the Reserve Bank of India Guidelines asissued from time to time related to provisioning and reserves.
Considering the present conditions of business and growth stage of Company the Boardof Directors of the Company has decided not to recommend any dividend for the FinancialYear 2018-19. The Management being optimistic about the return from business activitieshas proposed to plough back divisible profit into the main activities of the Company.
Every Non- Banking Finance Company registered with the Reserve Bank of India has tocomply with all the terms and conditions as stipulated by the Certificate of Registrationwith RBI.
F Mec International Financial Services Limited has been registered as a Non BankingFinance Company- Not accepting deposits. Hence pursuant to Section 45- IA of the ReserveBank of India Act 1934 the Company cannot accept deposits from public in compliance ofwhich the Company has not accepted any Deposits during the year. Further the Directors ofthe Company assured to carry on the practice of not accepting the same in order to complywith RBI norms and guidelines in the coming year and the same has been proposed and passedin the meeting of Board of Directors dated 22nd May 2019.
Further the Ministry of Corporate Affairs (MCA) vide it's notifications No. G.S.R.42(E) and G.S.R 341(E) dated 22nd January 2019 and 30th April 2019 respectively amendedRule 16 of Companies (Acceptance of Deposits) Rules 2014 and made it mandatory forCompanies to file One- Time Return of outstanding receipt of money or loan by a companybut not considered as deposits in terms of clause (c) of sub-rule 1 of rule 2 ofCompanies (Acceptance of Deposit) Rules from the 01stApril 2014 till31stMarch 2019 andto file Annual Return of particulars of transactions not considered as Deposits till 30 thJune respectively.
However the Company being a Non-Banking Financial Company (NBFC) duly registered withRBI was exempted from the above mentioned Compliance by virtue of exemption granted to itin clause (iii) of sub-rule 3 of Rule 1 of Companies (Acceptance of Deposits) Rules 2014.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
During the year under review there were no significant and material orders passed bythe Regulators or Courts or Tribunals impacting the going concern status and Company'soperations in future.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTSRELATE AND THE DATE OF THE REPORT
No material changes and/or commitments affecting the Financial Position of the Companyoccurred between the end of the Financial Year to which these Financial Statements relateand the Date of issue of this Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Your Company currently has following four Directors on the Board namely:
Mr. Apoorve Bansal (DIN: 08052540) - Managing Director
Mr. Awanish Srivastava (DIN: 07810744) - Non- Executive Independent Director
Mrs. Richa Choudhary (DIN: 0813225) - Non- Executive Independent Director
Mr. Rohit Agrawal (DIN: 06490313) - Non- Executive Independent Director
During the year under review Mr. Vishal Babbar (DIN: 07772465) who wasappointed as an Additional Executive Director of the
Company in the meeting of Board of Directors duly held on 15th January 2018 andthereafter regularized in the Annual General Meeting of the Company for the Financial Year2017-2018 duly convened on 22nd September 2018 has resigned from his office asDirector w.e.f. 8th February 2019 in compliance with the provisions of Section 168of the Companies Act 2013 read with applicable rules of Companies (Appointment andQualification of Directors) Rules 2014.
Pursuant to provisions of Section 152 of the Companies Act 2013 Mr. Apoorve Bansal(DIN: 08052540) Director of the Company shall retire by rotation at the ensuingAnnual General Meeting and being eligible has offered himself for re-appointment. TheBoard recommends his re-appointment.
All the Directors of the Company have confirmed that they satisfy the fit andproper criteria as prescribed in Chapter XI of RBI Master Direction No. DNBR. PD.008/ 03.10.119/2016-17 dated 1st September 2016 and that they are not disqualified frombeing appointed /continuing as Directors in terms of Section 164(2) of the Companies Act2013.
B. Key Managerial Personnel of the Company
During the year under review there has been no change in the Key Managerial Personnel(KMP) of the Company and the following persons continue to be the KMPs as per theprovisions of Section 203 of the Companies Act 2013 read with the applicable Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014:
Mr. Apoorve Bansal (DIN: 08052540) - Managing Director
Mr. Manoj Kumar - Chief Financial Officer (CFO)
Ms. Radhika Kathuria - Company Secretary (CS)
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received declarations from all Independent Directors of the Companyconfirming that they meet the criteria of Independence as prescribed under Section 149 ofthe Companies Act 2013 and Regulation 25 of the SEBI (Listing Obligations &Disclosure Requirements) Regulations 2015. The Independent Directors have also confirmedthat they have complied with the Code of Conduct for Independent Directors as prescribedunder Schedule IV of the Companies Act 2013.
BOARD DIVERSITY THEIR APPOINTMENT AND REMUNERATION
The Company's Board of Directors constitute of Four Directors comprising of OneExecutive Director and Three Non-Executive Independent Directors. Appointment ofIndependent Directors of the Company shall be governed by the Code of Independent Directorand Appointment of Non Independent Directors of the Company shall be governed by thePolicy of Nomination and Remuneration of the Company. The detailed policy on appointmentof Directors is available on the Company's website at www.fmecinternational.com.
ANNUAL BOARD EVALUATION AND FAMILIARISATION PROGRAMME FOR BOARD MEMBERS
A note on familiarization program adopted by the Company for orientation and trainingof its Directors and Board Evaluation Process undertaken in compliance with the provisionsof the Companies Act 2013 and the same forms part of the Corporate Governance whichforms part of this Report.
The Report generated after evaluation of the Board will be considered by the Board forthe purpose of optimizing their effectiveness.
A note indicating the policy of Annual Evaluation of the entire Board of Directors andthe Independent Directors forms part of this Report and has been attached as Annexure-VII.
COMMITTEES OF BOARD NUMBER OF MEETINGS OF BOARD AND BOARD COMMITTEES
The Board of Directors met Four (4) times during the year. The Company has FourCommittees out of its Board namely Executive Committee Audit Committee Nomination andRemuneration Committee and Stakeholders Relationship Committee
A detailed update on the Board its composition detailed charter including terms andreference of various Board Committees number of Board and Committee meetings held duringFY 2018-19 and attendance of the Directors at each meeting is provided in the Report onCorporate Governance which forms part of this Report.
The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto 'Meetings of the Board of Directors' and 'General Meetings' respectively have beenduly followed by the Company.
SUBSIDIARY ASSOCIATE AND JOINT VENTURE COMPANIES
As on 31st March 2019 the Company neither has any Associate Company nor any JointVenture Company. YDS Securities Private Limited continues to be the Subsidiary of theCompany.
Pursuant to Section 129(3) of the Companies Act 2013 read with Rule 5 of Companies(Accounts) Rules 2014 Consolidated Financial Statements of the Company has been annexedto the Annual Report which reflects the Performance and Financial Position of theSubsidiary.
The Audited Financial Statements of its Subsidiary Company is available for inspectionat the Company's Registered Office and also at Registered Office of the Subsidiary Companypursuant to the provisions of Section 136 of the Companies Act 2013. The FinancialStatements of its Subsidiary Companies are also available on the Company's websitewww.fmecinternational.com. Copies of the Annual Accounts of the Subsidiary Company willalso be made available to the investors of F Mec International Financial Services Limitedand those of the respective companies upon request.
The Details of Subsidiary Company as required to be disclosed under the provisions ofSection 129(2) of the Companies Act 2013 in form AOC-1 is provided and forms a part ofthe Annual Report as Annexure-V.
AUDITORS AND AUDITORS' REPORT Statutory Auditors
M/s Sanjay K Singhal & Co. Chartered Accountants Auditors of the Company wereappointed as Statutory Auditors in the Annual General Meeting held on 27th September2015 for a period of five consecutive years to hold office upto the conclusion of theAnnual General Meeting to be held in the year 2020. However the requirement toplace the matter relating to appointment of Auditors for ratification by members at everyAnnual General meeting as required pursuant to the provisions of Section 139(1) of theCompanies Act 2013 is done away with vide Notification dated 7th May 2018 issuedby the Ministry of Corporate Affairs (MCA) New Delhi. Accordingly no resolution isproposed for ratification of appointment of Auditors in the Annual General Meeting of theCompany to be held in the year 2019.
The Report given by the Auditors on the Financial Statements of the Company for theFinancial Year 2018-19 is a part of the Annual Report. The Report is unmodified and doesnot contain any qualification reservation adverse remark or disclaimer.
Secretarial Auditor and SecretarialAudit Report
M/s A.K. Verma & Co Practicing Company Secretaries (Registration No. Unique Code-S1997DE019500) was appointed to conduct the Secretarial Audit of the Company for theFinancial Year 2018-2019 as required under Section 204 of the Companies Act 2013 andrules framed there under. The Secretarial Audit Report for the Financial Year 2018-2019forms part of the Annual Report as Annexure VI to the Board's report. The SecretarialAudit Report does not contain any qualification reservation or adverse remark.
The Board has re-appointed M/s A.K. Verma & Co Practicing Company Secretaries asthe Secretarial Auditor of the Company for the Financial Year 2019-2020 after obtainingtheir consent to act in such capacity.
M/s. Khem Shiv & Asscociates Chartered Accountants (FRN: 019459N) wasappointed to conduct the Internal Audit of the Company for the Financial Year 2018-2019as required under Section 138 of the Companies Act 2013 and rules framed there under.
The scope functioning periodicity and methodology for conducting the Internal Auditof the Company is formulated by the Audit Committee of the Company in consultation withthe Internal Auditors.
The Board has now appointed M/s. Rajeev Shankar & Co. Chartered Accountants(FRN: 014006N) as Internal Auditor of the Company for the Financial Year 2019-2020after obtaining their consent to act in such capacity.
REPORTING OF FRAUDS BY AUDITORS
During the year under review the Statutory Auditors has not reported any instances offrauds committed in the Company by its Officers or Employees to the Audit Committee underSection 143(12) of the Companies Act 2013 details of which need to be mentioned in thisReport.
CORPORATE SOCIAL RESPONSIBILITY
The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as the said provisions of Section 135 of the Companies Act 2013 are notapplicable to the Company.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Pursuant to Regulation 34 of the SEBI (Listing Regulations and Disclosure Requirements)Regulations 2015 in respect of Management Discussion and Analysis Report for the yearunder review is presented in a Separate section forming part of the Annual Report as Annexure-III
A detailed report on Corporate Governance pursuant to Regulation 34 of the SEBI(Listing Obligations & Disclosure Requirements) Regulations 2015 forms part of theAnnual Report as Annexure-I. As per the provisions of Regulation 15(2) ofthe SEBI (Listing Obligations & Disclosure Requirements) Regulation 2015 provision ofRegulation 27 is applicable to the Companies having paid up equity share capital exceedingRs. 10 Crore and Net Worth exceeding Rs. 25 Crore as on the last day of the previousfinancial year. The Company is not covered under any of the Criterion mentioned above soit is not mandatory for the Company to comply the Provisions of the Regulation 27 of theSEBI (LODR) Regulations 2015. So the Company is not required to file Corporate GovernanceCertificate to the Stock Exchange on Quarterly Basis.
During the year the Board of Directors developed and implemented an appropriate riskmanagement policy which is entrusted with the responsibility to assist the Board inoverseeing and approving the Company's enterprise wide risk management framework andoverseeing all the risks that the organization faces identifying the element of riskwhich in the opinion of the Board may threaten the existence of the Company andsafeguarding the Company against those risks.
INTERNAL FINANCIAL CONTROL SYSTEM
The Company has an Internal Financial Control System commensurate with the size scaleand complexity of its operations.
The Vigil Mechanism of the Company pursuant to the provisions of section 177(9) &(10) of the Companies Act 2013 which also incorporates a Whistle Blower Policy in term ofprovisions of Regulation 22(1) of the SEBI (LODR) Regulations 2015 for the year endedMarch 31st 2019 (as per their applicability) includes an Ethics & Compliance TaskForce comprising Senior Executives of the Company. Protected disclosures can be made by awhistle blower through an e-mail or dedicated telephone line or a letter to the Task Forceor to the Chairperson of the Audit Committee i.e Mr. Awanish Srivastava either personallyor through e-mail at firstname.lastname@example.org or call at 011-43680407.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
The Board has made a Committee of Board presided by Mrs. Richa Choudhary Director ofthe Company for the purpose of prevention of Sexual Harassment of Women at workplace.Every individual has right to treat his/her colleagues with respect and dignity. This isenshrined in values and in the code of Ethics & Conduct of the Company. The Companyhas in line with the requirements of The Sexual Harassment of Women at the Workplace(Prevention Prohibition & Redressal) Act 2013 made various provisions to safeguardthe interest of the female employees (whether permanent contractual temporary andtrainees) under this policy. The policy governs the misconduct with respect todiscrimination or sexual harassment.
Further the Company has complied with the provisions regarding the constitution ofInternal Complaints Committee under the Sexual Harassment of Women as Workplace(Prevention Prohibition and Redressal) Act 2013 as required to be disclosed under Clause(x) of sub-rule 5 of Rule 8 of the Companies (Accounts) Rules 2014 (inserted by MCANotification dated31.07.2018).
EXTRACT OF ANNUAL RETURN
An extract of the Annual Return of your company pursuant to Section 92(3) of theCompanies Act 2013 is given herewith as Annexure II. The annual return ofthe company for the financial year 2018-19 after filing with the Ministry of CorporateAffairs can also be obtained from https://www.fmecinternational.com / FinancialReports/Annual Returns.
LOANS GUARANTEE AND INVESTMENT
The particulars of Loans given Investments made and Guarantee given by Company underSection 186 of the Companies Act 2013 is annexed as Annexure IV.
PARTICULARS OF RELATED PARTY TRANSACTION
There were no contracts or arrangements entered into by the Company in accordance withprovisions of section 188 of the Companies Act 2013. Further all The Related PartyTransactions in terms of the Provisions of Companies Act 2013 were entered in the ordinarycourse of business during the Financial Year 2018-2019 and were also at arm's lengthbasis. There are no materially significant related party transactions made by the Companywith Promoters Directors Key Managerial Personnel or other Designated Person which mayhave a potential conflict with the interest of Company at large.
PARTICULARS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO
The particulars as required under the provisions of Section 134(3)(m) of the CompaniesAct 2013 in respect of Conservation of Energy and Technology Absorption have not beenfurnished considering the nature of activities undertaken by the Company during the yearunder review. Further during the year under review the Company has neither earned norused any foreign exchange.
DISCLOSURE REGARDING MAINTENANCE OF COST RECORDS
Since the Company is engaged in the business of Non- Banking Financial Companytherefore the provisions of Section 148 of the Companies Act 2013 regarding maintenanceof Cost Records and Cost Audit is not applicable to the Company as required to bedisclosed under Clause (ix) of sub-rule 5 of Rule 8 of the Companies (Accounts) Rules2014 (inserted by MCA Notification dated 31.07.2018).
DIRECTORS' RESPONSIBILITY STATEMENT
As required under Section 134(5) of the Companies Act 2013 the Directors of theCompany hereby state that:
i. In the preparation of the annual accounts for the year ended 31st March 2019 theapplicable accounting standards had been followed along with proper explanation relatingto material departures.
ii. The Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the Financial Year and ofthe Profit and Loss of the Company for that period.
iii. The Directors 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.
iv. The Directors had prepared the annual accounts on a Going Concern Basis.
v. The Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively ;and
vi. The Directors had devised proper system to ensure compliance with the provisions ofall applicable laws and such system were adequate and operating effectively.
The Board expresses their gratitude to its all stakeholder's i.e. members customersGovernment agencies and their departments Bankers of the Company for their continuedsupport and faith. The Directors place on record their sincere appreciation to all theemployees of the Company for their contribution in the growth of the Company.
|Place : New Delhi ||Apoorve Bansal ||Rohit Agrawal |
|Date : 12.08.2019 ||Managing Director ||Director |
| ||DIN:08052540 ||DIN:06490313 |