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Hybrid Financial Services Ltd.

BSE: 500262 Sector: Financials
NSE: MAFATLAFIN ISIN Code: INE965B01022
BSE 05:30 | 01 Jan Hybrid Financial Services Ltd
NSE 05:30 | 01 Jan Hybrid Financial Services Ltd

Hybrid Financial Services Ltd. (MAFATLAFIN) - Director Report

Company director report

To

The Members

Hybrid Financial Services Limited

(Formerly known as Mafatlal Finance Company Limited)

Your Directors present the Thirty Fourth Annual Report with the Audited Statement ofAccounts of the Company for the year ended 31st March 2021.

1. FINANCIAL RESULTS

The Financial Results of the company for the year under review as compared to theprevious year are summarized below for your consideration:

Particulars Year Ended 31.03.2021 Year Ended 31.03.2020
(Rs. in Lakhs) (Rs. in Lakhs)
Gross Income 160.77 131.74
Gross Profit before Depreciation
Exceptional Item and
Income Tax 79.77 34.58
Depreciation 0.08 0.11
Exceptional Items 60.92 -
Provision for Tax Nil Nil
Net Profit After Tax 18.77 34.47
Other Comprehensive Income 1.66 (0.86)
Add: Amount brought forward
from previous year (1330.51) (1264.39)
Provision for Contingencies - 99.73
Provision for Contingencies
Reversed 40.00 -
Balance carried forward (1270.08) (1330.51)

2. OPERATIONS

The Financial Year 2020-2021 has ended with the company earning a profit of Rs.18.77Lakhs after Tax. The Company’s operations are still on very low scale due to theuncertainties of business environment and inadequate liquidity. The Company does notanticipate any significant revenue growth from operations in the coming years till theresolution of many pending issues. The Company only foresees lower level of operation inthe coming years due to dwindling business opportunities. The Company is however makingefforts to identify new opportunities and also to further improve the existing activities.

3. OUTLOOK

The company is trying to undertake new Non - NBFC activities and these activitiesearned a net income of Rs.1.46 Lakhs during the year. Other operations have yielded anincome of Rs.84.00 Lakhs and Rs.24.00 Lakhs as Rent. Company’s business is confinedto attending to past issues from its earlier operations and provide support to thesubsidiary’s operations. The business outlook of the subsidiary is showing continuedoptimism.

4. LITIGATIONS

During the year under review there has been no progress in respect of the Litigationsfiled by or against the Company. The Company however lost the case in respect of paymentof Listing Fees in the Securities Appellate Tribunal (SAT) and the Exchanges & NSDLfreezing the Shares of Promoters and Promoters Group.

5. DIVIDEND

The Board of Directors have recommended a Dividend of 1% on Preference Shares amountingto Rs.2.10 Lakhs as per the terms of the instrument subject to approval of members in theensuing Annual General Meeting. However no dividend is recommended on Equity Shares toconserve resources and on account of inadequate profit.

6. ANNUAL RETURN

The Annual Return of the Company as on 31st March 2021 in accordance with Section92(3) of the Act read with the Companies (Management and Administration) Rules 2014 canbe accessed on the Company’s website under Financials FY 2020-21 Tab atwww.hybridfinance.co.in

7. BOARD MEETINGS

The details of the Board Meetings held during the Financial Year 2020-2021 have beenfurnished under clause I 2(d) of the Corporate Governance Report forming a part of thisAnnual Report.

8. OTHER COMMITTEES

The Company has constituted the following Committees sequel to the completion of theirtenure by the existing Independent Directors and Induction of new Independent Directors.

a) Audit Committee:

The Audit Committee of the Company is Constituted in line with the provisions ofsection 177 of the Companies Act 2013 read with Regulation 18 of Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirement) Regulations 2015. TheCompany has reconstituted the Audit Committee with effect from 25th September 2020. Themembers of the Reconstituted Audit Committee are as under as on 31st March 2021:

Name of Member Status Nature of Directorship
Mr. Mahesh S. Makhijani Chairman Independent Director
Mr. Nilay S. Sharma Member Independent Director
Mr. N. R. Divate Member Whole Time Director

Mr. K. Chandramouli is an Ex-officio Secretary of the Audit Committee.

b) Nomination and Remuneration Committee:

The Company has reconstituted Nomination and Remuneration Committee with effect from25th September 2020. Nomination and Remuneration Committee constituted in accordance withRegulation 19 of Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015. The members of the reconstituted Nominationand Remuneration committee are as under as on 31st March 2021:

Name of Member Status Nature of Directorship
Mr. Nilay S. Sharma Chairman Independent Director
Mr. Sameer S. Pimpale Member Independent Director
Mrs. Megha J. Vazkar Member Women Director

c) Stakeholders Relationship Committee:

The Company has reconstituted Stakeholders Relationship Committee with effect from 25thSeptember 2020 and following are the members in the reconstituted committee as on 31stMarch 2021:

Name of Member Status Nature of Directorship
Mr. Sameer S. Pimpale Chairman Independent Director
Mr. Nilay S. Sharma Member Independent Directo
Mr. N. R.Divate Member Whole Time Director
Mr. K. Chandramouli Member Whole Time Director

d) Risk Management Committee:

The company has reconstituted the Risk Management Committee with effect from 25thSeptember 2020 and following are the members in the reconstituted committee as on 31stMarch 2021:

Name of Member Status Nature of Directorship
Mr. Sameer S. Pimpale Chairman Independent Director
Mr. K. Chandramouli Chairman Whole Time Director
Mr. N. R. Divate Member Whole Time Director

The details regarding the meetings held during the Financial Year 2020-2021 are givenin the Corporate Governance Report forming a part of this Annual Report.

9. COMPLIANCES OF APPLICABLE SECRETARIAL STANDARDS

The Company has complied with the provisions of Secretarial Standard 1 (Board Meetings)and Secretarial Standards 2 (General Meetings) to the extent as applicable to the Company.

10. BOARD EVALUATION

The Board generally evaluate the overall performance and the evaluation are as under:

(a) As growth opportunities are getting stymid by environmental threats the managementneeds to be in guard to prevent any unforeseen dangers.

(b) The need to preserve the integrity and ethics are more important than any otherbusiness demands.

(c) Long pending issues need to be addressed and resolved at the earliest so that thefuture path can be hormonised with greater focus.

11. PARTICULRS OF CONTRACTS OR ARRANGEMENTS WITH

RELATED PARTIES

The details of Related Parties and the Transaction with them are disclosed as requiredby Ind AS - 24 issued by The Institute of Chartered Accountants of India under Note No.2.20.9 forming part of this Annual Report.

In the opinion of Board there were no "material" transactions that warrant adisclosure in this report.

Accordingly particulars of Contracts or Arrangements with related parties referred toin Section 188(1) in Form AOC-2 does not form a part of this report.

Further the members may note that the Company has not entered intoContracts/Arrangements/Transactions which are not at arm’s length basis.

12. PARTICULARS OF LOANS GIVEN INVESTMENT MADE GUARANTEES GIVEN AND SECURITIESPROVIDED

During the year under review pursuant to the provisions of Section 186 Company has notgranted any Loan or has made any Investment or given any guarantees and Security.

13. TRANSFER TO RESERVES

The Company has not made any transfer to the reserve other than transfer of surplusearned during the year.

14. LISTING OF SHARES

The company’s efforts to get the suspension revoked with the Exchanges have notbeen successful as both the Exchanges are adamant in their approach and harping ondocumentation which were not insisted at the time of SAT Appeal. However The NationalStock Exchange of India Limited (NSE) has in a change of approach been assisting theCompany in completing the Listing of Shares allotted from 2000 which were causing thematter from proceeding further. We expect that during the current Financial year theimpasse will be broken atleast as regards NSE.

During the year the Company has made payment of Rs. 6092134/- reflected underExceptional Item in the Statement of Profit and Loss towards Outstanding Listing Fees toNSE along with Interest and Taxes and Outstanding Listing Fees to BSE to the extent ofunprovided Listing Fees together with Interest and Taxes. These payments have been madeunder protest as the Company is of the view that no amounts are dues as no services havebeen provided by the Exchanges. The Company shall proceed further in the matter as perLegal Advice and the developments in the matter of revocation of suspension and trading ofshares.

The Company’s ISIN remains suspended as new ISIN subsequent to Name Change andReduction of Capital is not yet allotted.

As regards the Depositories (NSDL & CDSL) subsequent to the approval of NSE forlisting of all Capital issued till Capital Reduction we have submitted our applicationwith the Depositories for carrying out necessary Corporate Action till Reduction ofCapital. If this gets completed we expect that the shareholders would be able to completetheir Demat of shares of Hybrid Financial Services Limited.

15. MAXIMUS SECURITIES LIMITED (MSL) – SUBSIDIARY

COMPANY

The Subsidiary Company has earned a net profit of Rs. 20.92 Lakhs for the financialyear ended 31st March 2021. The Subsidiary Company is exploring various options toimprove its earnings in the current financial year.

16. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGOING

The Company is not engaged in manufacturing activities therefore there is noinformation to submit in respect of conservation of energy and absorption of technology.

Foreign Exchange Earnings: Nil

Foreign Exchange Outgoings: Nil

17. CONTINGENCY PROVISIONS

The company during this year has reversed the Contingency Provision amounting to Rs. 40Lakhs in lieu of the payment of Listing Fees under protest to BSE and NSE till the year2020-2021.

18. DIRECTORATE

The present tenure of Mr. K. Chandramouli as Whole Time Director will end on September30 2021. The Nomination and Renumeration Committee has already recommended thereappointment of Mr. K. Chandramouli as Whole Time Director for a period of Three yearscommencing from 1st October 2021. Members are hereby requested to consider and approvehis reappointment on the terms as per Special resolution placed in the Annual GeneralMeeting. Mr. K. Chandramouli is interested in the said resolution. The Board of Directorsalso recommend the same based on the recommendation of Nomination and RemunerationCommittee.

19. DEPOSITORIES

Effective October 30 2000 the Equity Shares of your Company have been mandated bySecurities and Exchange Board of India for delivery only in dematerialized form for allinvestors.

Your Company has already entered into arrangements with National Securities DepositoryLimited (NSDL) and Central Depository Services Limited (CDSL) for custody anddematerialization of shares in accordance with the Depositories Act 1996.

20. E-VOTING

In terms of the requirements of Listing the Company has concluded an Agreement withCentral Depository Services (India) Limited (CDSL) for E-Voting Facility for itsShareholders.

21. PARTICULARS OF EMPLOYEES

There are no employees who are covered under Section 134(3) of the Companies Act 2013read with Companies (Particulars of Employees) Rules 1975.

22. WEBSITE OF THE COMPANY

The Company maintains a website www.hybridfinance.co.in where detailed information ofthe Company is provided.

23. WHISTLE BLOWER MECHANISM

The Company has a Whistle Blower Policy in place for vigil mechanism. The said policyhas been implemented keeping in view of the amendments in the Companies Act 2013 and incompliance with the Listing Agreement.

24. SEXUAL HARASSEMENT

Your Company and its Subsidiary have Zero Tolerance towards Sexual Harassment and therewere no complaints of any Sexual Harassment during the year under review.

25. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has an adequate internal control system commensurate with the size of theCompany and the nature of its business. The Internal Control System of the Company ismonitored and evaluated by Internal Auditor and his Audit Reports are periodicallyreviewed by the Audit Committee of the Board of Directors. The observations and commentsof the Audit Committee are placed before the Board.

26. DIRECTOR’S RESPONSIBILITY STATEMENT

The financial statements are prepared in accordance with Indian Accounting Standards(Ind AS) under the historical cost convention on accrual basis except for certainfinancial instruments which are measured at fair values. The Company has adopted all theInd AS standards and the adoption was carried out in accordance with applicable transitionguidance.

As required under section 134(3)(c) of the Companies Act 2013 the Directors herebyconfirm that:

i. in the preparation of the annual accounts for the financial year ended March 312021 the applicable accounting standards had been followed along with proper explanationrelating to 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 of the Company for the year;

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 have prepared the Annual Accounts on a going concern basis.

27. CORPORATE GOVERNANCE

Pursuant to the Listing Regulations of Securities and Exchange Board of India (ListingObligations and Disclosures Requirements) Regulations 2015 Management Discussion andAnalysis and Corporate Governance Report are made a part of the Annual Report.

28. AUDIT REOPORTS

The Statutory Auditors have expressed their opinion or observations in the Audit Reportand Management of the Company offers their response on the same:

Opinion / Observations of the Statutory Auditors Response of the Management
Emphasis of Matter
We draw attention to Note 2.20.13 of the standalone financial statements which states that the Company has made provision towards gratuity on the basis of Gratuity Act instead of Ind AS 19 as prescribed by ICAI. "Employee Benefit". Our opinion is not modified in respect of this matter Disclosure Required under Ind AS-19 of The Institute of Chartered Accounts of India with regard to Employee Benefit are not given as the Company has no employees as on 31st March 2021 other than Two Whole Time Directors and Chief Financial Officer (on deputation). However during the year the Company has provided Gratuity with for the two Whole Time Directors as per the Gratuity Act1972

29. SECRETARIAL AUDITOR

The Board of Directors have appointed Mr. Vijay S. Tiwari a practising CompanySecretary as Secretarial Auditor for the Financial Year 2020-2021.

30. IMPACT OF COVID

The business of the Company was adversely affected during the months of April 2020 andMay 2020 but with the relaxations provided and the continued buoyancy in the StockMarkets the business of the Subsidiary improved and overall there was not much impact onthe Company’s Operations during this year. The company however continues to monitorthe situation in view of the uncertain environment on the Covid-19 virus front.

31. AGM BY VIDEO CONFERENCE (VC) / OTHER AUDIO VISUAL MEANS (OVAM)

In view of the advice given by SEBI and MCA vide their notification the dispatch ofprinted copies of the Accounts and Annual Report is not being done. Members have to sendtheir email id to the Registrar and update their records. Copies of Annual AccountsNotice etc will be available in the Exchange Portals and Company’s Websitewww.hybridfinance.co.in

32. CORPORATE SOCIAL RESPOSIBILITY

The said provisions are not applicable to the Company.

33. ACKNOWLEDGEMENTS

Your Directors wish to thank and place on record their appreciation of the valuablesupport given by Company’s Customers Shareholders and Bankers.

Place: Mumbai FOR AND ON BEHALF OF THE BOARD
Date: 31st May 2021 K. CHANDRAMOULI
Whole Time Director and
Company Secretary

.