To the Members:
Your Directors have pleasure in presenting the 37thAnnual Report and AuditedAccounts of the Company for the financial year ended 31st March 2020.
RESULTS OF OPERATIONS
|Particulars || ||Rs In Lakhs |
| ||2019-2020 ||2018-2019 |
|Revenue from Operations ||217.85 ||363.39 |
|Other Income ||10.33 ||1.17 |
|Total Income ||228.19 ||364.56 |
|Total expenses ||265.84 ||378.25 |
|Profit/(Loss) before Interest and Depreciation ||(37.65) ||(13.69) |
|Less: Interest ||1.26 ||7.92 |
|Profit before Depreciation ||(38.91) ||(21.61) |
|Less: Depreciation ||0.03 ||0 |
|Profit/ (Loss) before Tax ||(38.94) ||(21.61) |
|Exceptional Item - Electricity Duty ||0 ||0 |
|Tax expenses: || || |
|Current year ||0 ||0 |
|Deferred year ||0 ||0 |
|MAT credit entitlement ||0 ||0 |
|Other comprehensive income ||0 ||0 |
|Transfer to reserve ||0 ||0 |
|Profit/(Loss) carried to Balance sheet ||(38.94) ||(21.61) |
The Company during the year achieved a turnover of Rs.217.85 Lakhs as againstRs.363.39 Lakhs of the previous year. The Company has incurred net loss for the year asRs. 38.94 Lakhs as compared to the loss of Rs 21.61 Lakhs of the previous year. YourDirectors are continuously taking all the efforts to improve the existing Business
TRANSFER TO RESERVES
During the year under review the company has incurred loss of Rs. 38.94 Lakhs and hencethe company does not have to transfertwenty percent of net profit to statutory reserves asper 45-IC of Reserve Bank of IndiaAct 1934.
During the year under review the Company has incurred loss of Rs. 38.94 lakhs and hencethe Company does not recommend any dividend.
The paid-up Equity Share Capital as on March 31 2020 was Rs.124000000/- Noadditions and alterations to the capital were made during the financial year 20192020.
LISTING OF SHARES
The Shares of the Company are listed in the Bombay Stock Exchange.
SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES
The Company does not have any subsidiary associate and joint venture companies.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 134(5) of the Act the Directors hereby confirm:
1. That in the Preparation of Final Accounts the applicable Accounting Standards hadbeen followed along with proper explanation relating to material departures;
2. That they had selected such Accounting Policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the Financial Year and of theProfit or Loss of the Company for that period;
3. That they had taken proper and sufficient care for the maintenance of adequateAccounting Records in accordance with the provisions of the Act for safeguarding theAssets of the Company and for preventing and detecting fraud and other irregularities;
4. That they had prepared the Annual Accounts on a Going Concern basis.
5. That they laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and operating properly; and
6. That they have devised proper systems to ensure compliance with the provisions ofall applicable laws and t hat such systems were adequate and operating effectively.
DIRECTORS AND KEY MANAGERIAL PERSONNEL DIRECTORS
Mr. Stanely Gilbert Felix Melkha Singh Managing Director retire by rotation an dbeing eligible offers himself for re-appointment.
The Board is well constituted with composition of one executive and one threeindependent directors.
|Category ||Name of Director |
|Executive Directors ||Stanely Gilbert Felix Melkha Singh - Managing Director |
|Independent Directors ||Vasalakotram Sampath Sudhagar Dinanath Shyam Sundar and Sree Kala |
KEY MANAGERIAL PERSONNEL
The key managerial personnel of the Company are as under:
|1. Mr. Stanely Gilbert Felix Melkha Singh ||Managing Director |
|2. Mr. Babu Madhurai Muthu ||Chief Financial Officer |
|3. Mr. Ajith Kumar Khumbat ||Company Secretary |
NUMBER OF MEETINGS OF THE BOARD
During the year six Meetings of the Board of Directors were held. The details of theMeetings of the Board are provided in the Corporate Governance Report attached with thisReport.
Pursuant to the provisions of the Companies Act 2013 and of the Listing Agreement theBoard has carried out Annual Performance Evaluation of its own performance the Directorsindividually as well the evaluation of the working of its Audit Nomination &Remuneration and Stakeholder Committees. The manner in which the evaluation has beencarried out has been explained in the Corporate Governance Report.
During the year under review the Independent Directors met on 08thFebruary 2020 inter alia to:
i) Review the performance of Non-Independent Directors and the Board as a whole.
ii) Review the performance of the Chairperson of the Company taking into ac count t heviews of Executive Directors and Non-Executive Directors.
iii) Assess t EVALUATION OF EXECUTIVE DIRECTORS BY INDEPENDENT DIRECTORS MEETING
he quality quantity and timeliness of flow of information between the Company'sManagement and the Board that is necessary for the Board to effectively and reasonablyperform their duties.
The above policies are available in the website of the company www.melnbfc.com.
INDEPENDENT DIRECTORS' DECLARATION
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149 of the Companies Act 2013 and Securities andExchange Board of India ( Listing Obligation & Disclosure Requirements) Regulation2015 in respect of financial year ended 31st March 2020 which has been reliedon by the Company and placed at the Board Meeting.
FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS
The Company has practice of conducting familiarization program of the independentdirectors as detailed in the Corporate Governance Report which forms part of the AnnualReport.
POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION AND OTHER DETAILS
The Company's policy on Directors appointment and remuneration and other mattersprovided in Section 178(3) of the Act read with Section 197 read with Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 has beendisclosed at Annexure- I. The policy can be viewed on t he company's website:www.melnbfc.com.
The Company recognizes that building a Board of diverse and inclusive culture isintegral to its success. The Board considers that its diversity including genderdiversity is a vital asset to the business. The Board has adopted a Board diversitypolicy which sets out the approach to diversity of the Board of Directors.
NOMINATION AND REMUNERATION POLICY
The Company has a Nomination and Remuneration Policy for appointment and remunerationof the Directors Key Managerial Personnel and Senior Executives of the Company includingcriteria for determining qualifications positive at tributes independence of a Directorand other related matters as required under Section 178(3) of the A ct an d SEBI ( ListingObligations and Disclosure Requirements) Regulations 2015 and is also available on theCompany's website www.melnbfc.com.
WHISTLE BLOWER POLICY/VIGIL MECHANISM
The Company has framed a whistle blower policy. Directors and employees have fullaccess to the Chairman of the Audit Committee to report their genuine and seriousconcernsand is also available on the Company's website www.melnbfc.com.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has formulated a Framework on Internal Financial Controls and laid downPolicies and procedures commensurate with the Size and nature of its operations pertainingto financial reporting. In accordance with Rule 8 ( 5) (viii) of Companies (Accounts)Rules 2014 t he Company has ad equate internal control systems to monitor businessprocesses financial reporting and compliance with applicable regulations and they areoperating effectively. The systems are periodically reviewed by the Audit Committee of theBoard for identification of deficiencies and necessary time bound actions are taken toimprove efficiency at all the levels. The Committee also reviews the observations formingpart of internal auditors' report key issues and areas of improvement significantprocesses and accounting policies.
M/s. Rakesh Sarup& Co. Chartered Accountants are the Independent InternalAuditors of the Company. The Audit Committee determines the scope of internal Audit inline with regulatory and business requirements.
REPORTING OF FRAUDS BY AUDITORS
During they ear under review neither the Statutory Auditors nor t he SecretarialAuditor has reported to the Audit Committee un der Section 143 ( 12) of t he CompaniesAct 2013 any instances of fraud committed against the Company by its officers oremployees t he details of which would need to be mentioned in the Board's Report.
COMMITTEES OF THE BOARD
With a view to have more focused attention on various business aspects and betteraccountability the Board has constituted the following Committees:
o Audit Committee
o Nomination and Remuneration Committee o Stakeholders' Relationship Committee.
The Board Committees meet at regular intervals; take necessary steps to perform theirduties entrusted by the Board. The details pertaining to the composition of the variousCommittees is also available on the Company's website www.melnbfc.com.
CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT
The Board of Directors had adopted a Code of Conduct for the Board Members andemployees of the Company. This Code helps the Company to maintain the Standard of BusinessEthics and ensure compliance with the legal requirements of the Company.
The Code is aimed at preventing any wrong doing and promoting ethical conduct at theBoard and by employees. The Compliance Officer is responsible to ensure adherence to theCode by all concernedand is available on the Company's website www.melnbfc.com.
The Code lays down the standard of conduct which is expected to be followed by theDirectors and the designated employees in their business dealings and in particular onmatters relating to integrity in the work place in business practices and in dealing withstakeholders.
All the Board Members and t he Senior Management per sonnel have confirmed compliancewith the Code.
At t he Annual General Meeting held on 30th September 2016 the m embers approved t heappointment of M/s. Vivekanandan and Associates Chartered Accountants (Firm RegistrationNo. 05268S) were appointed as Statutory Auditors of the Company to hold office for aperiod of Five Yearsfrom the conclusion of that Annual General Meeting till the conclusionof the 38thAnnual General Meeting of the Company to be held during the calendaryear 2021.
COMMENT ON STATUTORY AUDITOR'S REPORT
There are no qualifications reservations remarks or disclaimers made by M /s.Vivekanandan and Associates Statutory Auditor in their audit report.
Pursuant to notification of Companies (Cost Records and Audit) Rules2014 read withCompanies (Cost Records and Audit) Amendment rules2014 the Company does not fall underthe purview of Cost Audit.
Pursuant to the requirements of Section 204 (1) of the Companies9Act 2013 and Rule 9 ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 M/s.Lakshmmi Subramanian & Associates Practicing Company Secretaries were appointed toconduct secretarial audit for the financial year 2019- 20. The Secretarial Audit report asreceived from the Secretarial Auditor is annexed to this report as Annexure - II
Qualifications in the Secretarial Audit Report
There are no material qualifications in the Secretarial Audit Report.
The Company has a robust Risk Management framework to identify evaluate business risksand opportunities. This framework seeks to create transparency minimize adverse impact onthe business objectives and enhance the Company's competitive advantage. The business riskframework defines the risk management approach across the enterprise at various levelsincluding documentation and reporting. The framework has different risk models which helpin identifying risks trend exposure and potential impact analysis at a Company level asalso separately for business segments. The Company has identified various risks and alsoha s mitigation plans for each risk identified. The Risk Management Policy of t he Companyis available on our website www.melnbfc.com.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Provisions of section 186 of the Companies Act2013 is not applicable to NBFCCompany
RELATED PARTY TRANSACTIONS
The company has not entered into any contracts or arrangements with related partiesreferred to in section 188(1) of the Companies Act 2013 during the financial year underreview. However the Policy on Related Party Transaction is available on our website:www.melnbfc.com.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your company is having losses and not having profits more than Rs. FIVE Crores in theyear 2019-2020 or net worth more than Rs.500 Crores or turnover of more than Rs.1000Crores in the Previous financial year and therefore Constituting of Corporate SocialResponsibility committee and its compliance in accordance with the provisions of section135 of the Act does not arise
EXTRACT OF ANNUAL RETURN
The extract of the Annual Return in the prescribed Form MGT-9 is annexed to and formspart of this Report. Refer to ANNeXuRE - III
PARTICULARS OF EMPLOYEES
The Information required under Section 197 (12) of Companies Act 2013 read with rule5(1) of the Companies (Appointment an d Remuneration of Managerial Personnel) Rules 2014in respect of employees of the Company forms part of this Report as Annexure - I
The Information of employees as per Rule 5(2) of the said Act for the year is 5.
As per SEBI Listing Regulations the Corporate Governance Report with the Auditors'Certificate thereon and the Management Discussion and Analysis are attached which formspart of this report. The Company has devised proper systems to ensure compliance with theprovisions of all applicable Secretarial Standards issued by the Institute of CompanySecretaries of India and is of the view that such systems are adequate and operatingeffectively.
The Company has adopted the following policies and the same are available in thewebsite of the company www.melnbfc.com.
i) Code of conduct for Directors and Senior Management
ii) Whistle Blower Policy/ Vigil Mechanism
iii) Policy of Directors' Appointment and remuneration
iv) Policy on determining materiality of events
v) Policy on documents preservation and archival
vi) Terms and conditions for appointment of independent directors
vii) Nomination & Remuneration policy
viii) Policy on related party transactions
ix) Policy on s exual harassment of women at work place (prevention prohibition andredressal) Act 2013
POLICY ON INSIDER TRADING
On December 312018 the Securities and Exchange Board of India amended the Prohibitionof Insider Trading Regulations 2015 prescribing various new requirements with effectfrom 1stApril 201 9. In line with the amendments your Company has adopted anamended Code of Conduct to regulate monitor and report trading by Designated Persons andtheir Immediate Relatives under the Securities and Exchange Board of India (Prohibition ofInsider Trading) Regulations 2015. This Code of Conduct also includes code of practicesand procedures for fair disclosure of unpublished price sensitive information which hasbeen made available on the Company's website www.melnbfc.com.
POLICY ON SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013
The company has in place the Prevention of sexual harassment policy in line with therequirements of the Sexual Harassment of Women at the Workplace (Prevention Prohibitionand Redressal) A ct 2013. All employees (permanent contractual temporary trainees) arecovered under this policy. The said policy is placed in the website of the company vizwww.melnbfc.com. The Company has not constituted Internal Complaint Committee as per the aforesaid Act as there is no woman employee as except contract labourer for housekeeping.However there were no complaints received pursuant to the Sexual Harassment of the Womanat the Workplace (Prevention Prohibition and Redressal) Act 2013
Your Directors state that during the year under review there was no case filedpursuant to the Sexual Harassment of the Woman at the Workplace (Prevention Prohibitionand Redressal) Act 2013
DEPOSITS FROM PUBLIC
During the year under review your Company has not accepted any deposits from thepublic within the meaning of Section 76 of the Companies Act 2013 and rules madethereunder.
THE CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
1. Energy Conservation: Conservation of energy continues to receive increased emphasisand steps are being taken to reduce the consumption of energy at all levels. The Companyhas taken steps to conserve energy in its office use consequent to which energyconsumption had been minimized. No additional Proposals/ Investments were made to conserveenergy. Since the Company has not carried on industrial activities disclosure regardingimpact of measures on cost of production of goods total energy consumption etc is notapplicable.
2. Foreign Exchange Earnings and Outgo: The Company has not earned or spent any foreignexchange during the year under review.
3. Research and Development & Technology Absorption: The Company has not adoptedany technology for its business and hence no reporting is required to be furnished underthis heading. The Company will adopt necessary technology as and when required in thefurtherance of the business.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
There were no significant or material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.
MATERIAL CHANGES AND COMMITMENTS OF THE COMPANY
There are no Material change and events during the financial year. There are nosignificant and material orders passed by the regulators or courts or tribunals impactingthe going concern status and Company's operations in future.
CORPORATE GOVERNANCE REPORT
In accordance with Schedule V of t he SEBI ( Listing Obligations and DisclosureRequirements) Regulations 2015 Corporate Governance Report forms a part of Director'sReport and attached as Annexure - IV.
MANAGEMENT DISCUSSION & ANALYSIS
In terms of the provisions of Regulation 34 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Management's Discussion and AnalysisReport forms a part of Director's Report and attached as Annexure - V.
The Board of Directors would like to thank all employees of the Company and alsoCompany's shareholders auditors customers and bankers for their continued support.