McDowell Holdings Ltd.
|BSE: 532852||Sector: Financials|
|NSE: MCDHOLDING||ISIN Code: INE836H01014|
|BSE 00:00 | 05 Sep||McDowell Holdings Ltd|
|NSE 05:30 | 01 Jan||McDowell Holdings Ltd|
|BSE: 532852||Sector: Financials|
|NSE: MCDHOLDING||ISIN Code: INE836H01014|
|BSE 00:00 | 05 Sep||McDowell Holdings Ltd|
|NSE 05:30 | 01 Jan||McDowell Holdings Ltd|
TO THE MEMBERS
The Directors have pleasure in presenting the Annual Report of theCompany along with Audited Accounts for the financial year ended March 31 2021.
The summary of the financial results of the Company for the financialyear ended March 31 2021 is as under:
In view of the losses no dividend has been recommended for thefinancial year ended March 31 2021.
Operations of the Company
The total income of the Company during the financial year under reviewwas Rs. 246.89 lakhs as against Rs.1773.41 lakhs in the previous financial year. Thedecrease in income was primarily due to reduction in profit on sale of investments lowerdividends received reduction in provision no longer required written back and drop inservice income. The total expenditure during the year was Rs.360.55 lakhs as againstRs.2461.49 in the previous financial year. The decrease in expenditure was due toreduction in employee costs finance costs professional expenses and provisions. The netloss during the year was Rs.113.66 lakhs as against a loss of Rs.684.09 lakhs in theprevious year.
The spread of the Covid-19 pandemic has brought economic activity to anear standstill in the first half of FY 2020-21. India's (FY 2020-21) GDP isestimated to have contracted by 7.7% Y-o-Y and it has taken a dramatic toll on lives andlivelihoods. With continued uncertainty it is evident that the post- pandemic existencewill be unavoidably different. The pandemic has also impacted the company's effortstowards finding a resolution for the exingent issues prevailing upon it. Despite thechallenging situation the company is working towards finding a solution.
Market Value of Company's investment
The Company's net worth taking into account the market value ofthe Company's investments would be more than adequate to meet its liabilities and tocontinue its operations in future.
Your Company is in the category of NBFC CIC (exempted) and it continuesto hold strategic investments in different companies. The dividend distribution by theinvestee companies contributes to the Company's revenue. However the Company videletter dated August 3 2021 has sought advice from RBI regarding applicability of NBFCrules / application for grant of Certification for becoming CIC-NDSI in view ofcompany's assets being valued at market rate on application of IND AS.
Your Company has entered into advisory and consultancy services whichunder the existing circumstances can be carried on advantageously along with the existingactivities of the Company to augment the revenue of the Company. In order to strengthenthe prospects of the Company your Directors/Management continue to evaluate options toenter into additional activities but the attachment of the Company's investments bythe Regulators has affected the cash flow position of the Company and the process ofevaluating options has been adversely affected. The Company nevertheless would continue toevaluate future business options based on the changing business and external environment.
Directors and Key Managerial Personnel
Ms. Sarvamangala Hadapada (DIN - 08395454) was appointed as anAdditional Director in the category of Non-Executive Independent Woman Director w.e.fOctober 22 2020. The Nomination and Remuneration Committee has recommended theappointment of Ms. Sarvamangala Hadapada as Independent Director. The appointment issubject to the approval of the Shareholders.
Mr. G. Sreenivas (DIN - 07805594) was appointed as an AdditionalDirector in the category of Non-Executive Director w.e.f November 13 2020. The Nominationand Remuneration Committee has recommended the appointment of Mr. G. Sreenivas as a Non-Executive Director. The appointment is subject to the approval of the Shareholders.
Mr. Theerthesh B.S. (DIN - 08955326) was appointed as an AdditionDirector in the Category of Non-Executive Independent Director w.e.f November 13 2020.The Nomination and Remuneration Committee has recommended the appointment of Mr.Theerthesh B.S. as Independent Director. The appointment is subject to the approval of theShareholders.
Ms. Tushita Patel a Non-Executive Woman Director Mr. RaghuveeranKasargod and Mr. Girish Datar both being Non-Executive Independent Directors of theCompany resigned as a Director of the Company w.e.f October 12 2020 and November 18 2020respectively.
The Board of Directors places on record their appreciation for thecontribution by Ms. Tushita Patel Mr. Raghuveeran Kasargod and Mr. Girish Datar duringtheir tenure as Non-Executive Woman Director and as Independent Directors of the Companyrespectively.
Mr. Ajay Kumar Vijay Executive Director of the Company resigned w.e.fNovember 18 2020. The Board of Directors places on record their appreciation for thecontribution by Mr. Ajay Kumar Vijay during his tenure as an Executive Director of theCompany.
Mr. Arindam Ash the Chief Financial Officer and Key ManagerialPersonnel of the Company resigned from the services of the Company w.e.f. November 162020 and efforts are continuing to identify a successor. The Board of Directors places onrecord their appreciation for the contribution by Mr. Arindam Ash during his tenure asChief Executive Officer of the Company.
Mr. Manoj Kumar Company Secretary Compliance Officer and KeyManagerial Personnel resigned from the services of the Company w.e.f. December 10 2019and efforts are continuing to identify a successor.
The affairs of the Company are conducted under the overall supervisionand guidance of the Board of Directors of the Company.
None of the Directors of the Company are disqualified under Section 164(2) of the Companies Act 2013. Your Directors have made necessary disclosures as requiredunder the provisions of the Companies Act 2013.
Directors' Responsibility Statement
The Board of Directors of the Company hereby state that:
(a) in the preparation of the Annual Accounts the applicableAccounting Standards have been followed along with proper explanation relating to materialdepartures;
(b) accounting policies have been selected and applied consistently andthe judgments and estimates made are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at the end of the financial year and of theloss of the Company for that period;
(c) proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for prevention and detection of fraud andother irregularities;
(d) the Annual Accounts have been prepared on a going concern basis;
(e) Internal Financial Controls have been laid down to be followed bythe Company and that such Internal Financial Controls are adequate and operatingeffectively and
(f) proper systems have been devised to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.
(a) Appointment of Statutory Auditors:
The Members of the Company had appointed M/s. BVC & Co. CharteredAccountants (Firm Registration No. 008154S) as the Statutory Auditors of the Company fora period of five years commencing from the conclusion of the Thirteenth Annual GeneralMeeting to the conclusion of the Eighteenth Annual General Meeting of the Company. TheAuditors have confirmed that they continue to fulfill the criteria for appointment asAuditor of the Company as prescribed under the Act and the Rules framed thereunder.
(b) Auditor's Qualifications and Board responses:
Certain issues relating to Company's income stream and its effecton the going concern aspects is the subject matter of Qualification in the Audit Report.This Qualification has been explained in Note no. 34 of the financial statements.
Corporate Governance & Management Discussion and Analysis Reports
Pursuant to the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 (SEBI LODR) a Report onCorporate Governance and Management Discussion and Analysis Report are attached to thisReport.
The Auditor's Certificate confirming compliance of conditions ofCorporate Governance is appended to this report. CEO/CFO Certificate as required underRegulation 17 of the SEBI LODR could not be signed in absence of a CEO/CFO of theCompany..
Board and its Committees
The details of the meetings of the Board and its Committees held duringthe financial year the composition of the board and all of its committees are given inthe Report on Corporate Governance. All the recommendations made by the Audit Committeeand Nomination and Remuneration Committee from time to time were accepted by the Board.
Declarations by Independent Directors
The Company has received declarations from the Independent Directorsthat they meet the criteria of independence as provided in sub-section (6) of Section 149of the Companies Act 2013 and listing regulations.
Performance Evaluation of the Board and it's Committees
The details of annual evaluation made by the Board of its ownperformance and that of its committees individual Directors individually and performancecriteria for Independent Directors laid down by the Nomination and Remuneration Committeeare enclosed as Annexure - A to this Report. The policy for performance evaluationof the Independent Directors and Board of Directors is available on the Company'swebsite www.mcdowellholdings.co.in.
Details of remuneration to Directors
During the year under review remuneration was paid to the ExecutiveDirector. The NonExecutive Directors were paid sitting fee for attending the committee andboard meetings and reimbursement of actual travel expenses boarding and lodgingconveyance and incidental expenses incurred in attending such meetings.
Particulars of Employees and Related Disclosures
Disclosures with respect to the remuneration of Directors and Employeesas required under Section 197 of Companies Act 2013 and Rule 5(1) of Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 has been appended as AnnexureD to this Report.
The Company had not offered any shares to its employees or KeyManagerial Personnel under any scheme of Employees Stock Option and has also not issuedany sweat equity at any time.
During the year under review your Company did not accept any depositswithin the meaning of provisions of Chapter-V (Acceptance of Deposits by Companies) ofthe Companies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014.
Corporate Social Responsibility (CSR)
The Company has constituted a Corporate Social Responsibility Committeeas required under Section 135 of the Companies Act 2013. Since the average net profit ofthe Company for the preceding three financial years was negative there was no necessityfor the Company to carry out any CSR spending for the period under review.
(a) Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Companies Act 2013and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theBoard has appointed Mr. K N Nagesha Rao (C.P.No.12861/Membership No. FCS 3000 CompanySecretary in Practice to undertake the Secretarial Audit of the Company. The Reportfurnished by Auditor in the format prescribed is enclosed as Annexure - E to thisreport.
(b) Qualifications and Board responses
The Board responses to the qualifications of the Secretarial Audit areas under:
(i) Consequent to the resignation of the Company Secretary from theservices of the Company w.e.f. December 10 2019 the Company engaged HR placementagencies and head-hunters to fill up the post. Due to the attachment of the Company'sinvestments and also the freezing of the Company's demat account by the EnforcementDirectorate ( in connection with their investigation against Kingfisher Airlines LimitedDr. Vijay Mallya / Ors) the generation of funds to pay salary dues and otheradministrative expenses have been adversely affected. In view of these facts thecandidates identified by the Placement Agency did not agree to join the Company. Apartfrom these candidates few more candidates also disagreed to join on the same grounds. TheCompany is continuing in its efforts to fill the vacancy.
(ii) The Chief Financial Officer and executive director of the Companyresigned from the services of the Company w.e.f. November 16 2020 and November 18 2020respectively. Due to the attachment of the Company's investments and also thefreezing of the Company's demat account by the Enforcement Directorate ( inconnection with their investigation against Kingfisher Airlines Limited Dr. Vijay Mallya/ Ors) the generation of funds to pay salary dues and other administrative expenses havebeen adversely affected. In view of these facts the candidates disagreed to join on theCompany. The Company is continuing its efforts to fill the vacancy.
Internal Control System
The Company has a robust system of internal control the effectivenessof which is tested by the process of internal audit under the supervision of AuditCommittee. Your Company through internal audit under the supervision of the AuditCommittee reviews the risk management process risk mitigation plans and risk reporting.
The adequacy and effectiveness of Internal Financial Controls have beenendorsed by the Internal Auditor and the Statutory Auditors. The report of the IndependentStatutory Auditors in the annexure to their Audit Report does not contain any adverseobservations.
The Company has implemented a vigil mechanism to provide a frameworkfor the Company's employees and Directors to promote responsible and secure whistleblowing. It protects the employees who raise concern about serious irregularities withinthe Company if any. A brief summary of the vigil mechanism implemented by the Company isset out in Annexure - B to this report.
Your Company hereby affirms that no Director/employee has been deniedaccess to the Chairman of the Audit Committee and that no complaints were received duringthe year under review. The Whistle Blower Policy is available in the Company website www.mcdowellholdings.co.in.
The Authorised Share Capital of the Company stands at Rs.150000000comprising of 15000000 equity share of Rs.10 each and the issued subscribed and paid upcapital of the Company as on March 31 2021 remain unchanged at Rs.139922580 comprisingof 13992258 equity shares of Rs.10 each.
The trading in the equity shares of your Company is under compulsorydematerialisation mode. As the depository system offers numerous advantages members arerequested to take advantage of the same and avail the facility of dematerialisation of theCompany's shares. Moreover transfer of shares of the Company by physical means hasbeen barred from April 1 2019 pursuant to SEBI's Notification dated December 32018.
Your Company's Equity Shares are listed on the BSE Limited andNational Stock Exchange of India Limited. The listing fees have been paid to both theStock Exchanges for the year 2021-2022.
As required under sub-section (3) of Section 92 of the Act as amendedby the Companies (Amendment) Act 2017 the Company has placed a copy of the Annual Returnin Form MGT-7 on its website www.mcdowellholdings.co.in through the linkhttp://mcdowellholdings.co.in/investors/others.
Nomination and Remuneration Policy
The Board on the recommendation of the Nomination and RemunerationCommittee has laid down a policy for the appointment and remuneration of the DirectorsKey Managerial Personnel and Senior Executives of the Company. The same is set out in Annexure- C to this report.
Particulars of Loans Guarantees or investments
Details of loans guarantees and investments covered under Section 186of the Companies Act 2013 are given in Note 4 & 12 of the Notes to the FinancialStatements.
Subsidiary Associates and Joint Ventures
The Company does not have any Subsidiary Associates and JointVentures.
Related Party Transactions
During the year under review all contracts/arrangements entered byyour Company with related parties were on an arm's length basis and in the ordinarycourse of business and did not consummate material transactions with any related party asdefined in the Act. All related party transactions entered for the year under reviewhave been approved by the Audit Committee wherever applicable.
Transactions with related parties as per the requirements of AccountingStandards 18 issued by The Institute of Chartered Accountants of India are disclosed inthe relevant Schedule of Notes to Annual Accounts. The Policy for Related PartyTransactions is available on the Company's website: www.mcdowellholdings.co.in.
Familiarisation Programme for Independent Directors
The details of programmes for familiarisation of the IndependentDirectors their roles rights responsibilities in the Company nature of the industry inwhich the Company operates business model of the Company and related matters areavailable on the Company's website: www.mcdowellholdings.co.in.
Energy Conservation Technology Absorption Foreign Exchange Earningsand Outgo
The provisions under Section 134 of the Companies Act 2013 and rulesmade there under relating to energy conservation technology absorption do not apply tothe Company as the Company is not engaged in the manufacturing activities. There were noforeign exchange earnings or outgo during the year under review.
Sexual harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013
There were no cases filed pursuant to the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013.
Your Directors wish to acknowledge the co-operation and supportextended by the employees and the shareholders of the Company.