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Mega Corporation Ltd.

BSE: 531417 Sector: Financials
NSE: N.A. ISIN Code: INE804B01023
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NSE 05:30 | 01 Jan Mega Corporation Ltd
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VOLUME 13511
52-Week high 2.36
52-Week low 0.61
P/E
Mkt Cap.(Rs cr) 6
Buy Price 0.00
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Sell Price 0.00
Sell Qty 0.00
OPEN 0.63
CLOSE 0.64
VOLUME 13511
52-Week high 2.36
52-Week low 0.61
P/E
Mkt Cap.(Rs cr) 6
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Mega Corporation Ltd. (MEGACORP) - Director Report

Company director report

FOR THE FINANCIAL YEAR ENDED 2016- 2017

TO THE MEMBERS OF MEGA CORPORATION LIMITED

Your Directors are pleased to present the 32nd Annual Report on the business andoperations of the Company together with the Audited Financial Statement for the year ended31st March 2017.

FINANCIAL PERFORMANCE

The Summarized financial results are:

(Amount in Lakhs)

Particulars Standalone
Current Year Previous Year
2016-17 2015-16
Income from Operations 140.73 98.73
Other Income 2.00 2.37
Total Income 142.73 101.11
Operating Expenses 13.88 16.48
Depreciation and Amortization 36.77 38.10
Interest 12.97 7.18
Other Expenses 51.95 31.35
Profit/ (Loss) before Tax 27.13 8.00
Tax Expenses
• Previous Year (0.66) 3.00
• Deferred Tax (2.01) (6.27)
Net Profit/ (Loss) for the Year 71.31 14.23

STATE OF COMPANY'S AFFAIRS

During the year 2016-17 the company earned the profit of Rs. 71.31 lakhs as comparedto the revenue of the year 2015-16 which was Rs. 14.23 lakhs.

Nonetheless your director's expect that the initiatives undertaken will result inimprovement in financial results in the coming years.

Material Changes and Commitments after the date of close of Financial Year 2016 17

There are no material changes and commitment affecting the financial position ofcompany after the close of financial year 2016-2017 till the date of report.

DIVIDEND AND RESERVES

During the year under review your Company does not recommend any dividend in theabsence of profits. And also your company has not made any transfer to Reserves duringthe financial year 2016-2017.

FRAUDS REPORTED BY AUDITORS OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRALGOVERNMENT

There are no such frauds reported by auditors which are committed against the companyby officers or employees of the company.

HUMAN RESOURCES DEVELOPMENT

Your Company has continuously adopted structures that help attract best external talentand promote internal talent to higher roles and responsibilities. The Company's peoplecentric focus providing an open work environment fostering continuous improvement anddevelopment helped several employees realize their career aspirations during the year.

Company's Health and Safety Policy commits to provide a healthy and safe workenvironment to all employees. The Company's progressive workforce policies and benefitshave addressed stress management promoted work life balance.

BUSINESS EXCELLENCE AND QUALITY INITIATIVES

Your Company continues to be guided by the philosophy of business excellence to achievesustainable growth. Innovation in services and business models is a key agenda of theManagement along with a customer-focused culture towards building long-term customerrelationships.

SECRETARIAL AUDIT

Pursuant to provisions of Section 204 of the Companies Act 2013 and rules made thereunder the board has appointed M/s Vikash Gupta & Associates Company Secretary inPractice to conduct the Secretarial Audit of the Company for the financial year 2016-17.The Secretarial Audit Report for the financial year ended 31st March 2017 is attachedherewith as part of the Annual Report as Annexure A which forms an integral part of thisreport.

The Secretarial Audit report does not contain any qualification reservation or adverseremark.

DETAILS OF SUBSIDIARY COMPANIES JOINT VENTURES AND ASSOCIATE COMPANIES AND HIGHLIGHTSOF THEIR PERFORMANCE AND THEIR CONTRIBUTION TO THE OVERALL PERFORMANCE OF THE COMPANY

Your Company has a subsidiary namely Mega Airways Limited. There is no associatecompany within the meaning of Section 2(6) of the Companies Act 2013 ("Act").There has been no material change in the nature of business of the subsidiary. The saidsubsidiary is not a material subsidiary.

S.No. Name & Address of Company CIN Holding/ Subsidiary/ Associate
1 Mega Airways Limited U00072DL2005PLC136054 Subsidiary Company

Pursuant to provisions of Section 129(3) of the Act a statement containing salientfeatures of financial statements of the associate company informs AOC 1 is attached as AnnexureB.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Your Company has an effective internal control and risk mitigation system which areconstantly assessed and strengthened with new/revised standard operating procedures.

The internal audit is entrusted to M/s Vikash Gupta & Associates a firm of CompanySecretaries. The main thrust of internal audit is to test and review controls appraisalof risks and business practices. .

The Audit Committee of the Board of Directors actively reviews the adequacy andeffectiveness of internal control systems and suggests improvements to strengthen thesame. The Board of Directors has framed a policy which ensures the orderly and efficientconduct of its business safeguarding of its assets to provide greater assuranceregarding prevention and detection of frauds and accuracy and completeness of theaccounting records of the company.

RISK MANAGEMENT

The risk management framework defines the risk management approach of the Company andincludes periodic review of such risks and also documentation mitigating controls andreporting mechanism of all risks.

In this regard the board has formulated a Risk Management policy which defines therisk assessment and minimization procedures. As per view of board apart from liabilitywhich may arise for payment of statutory dues to government of India regarding increase inauthorized capital there is no other risk in operation of company which may impact theexistence of company.

AMALGAMATION

The Board of Directors of the Company at their meeting held on 07th July 2017 haveapproved the revised Scheme of Amalgamation between Mega Corporation Limited and MegaAirways Limited which provides for the amalgamation of Mega Airways Limited a wholly ownedsubsidiary of Mega Airways Limited ('the Company') under section 230 to 240 Companies Act2013 and other relevant provisions. The Appointed date of the Scheme is April 1 2017 orsuch other date as NCLT may direct.

The Scheme needs to be filed before National Company Law Tribunal (NCLT).

CORPORATE GOVERNANCE

Your Company has implemented all the stipulations of the Corporate Governance Practicesset out by the Securities and Exchange Board of India and as provided in SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. A separate section on Reportof Corporate Governance as stipulated under SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 form part of the Annual Report.

The requisite certificate from the Company Secretary in Practice regarding complianceof conditions of Corporate Governance as stipulated under SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 is attached as Annexure C of theDirector's Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 134(5) of the Act the directors hereby confirmthat:

i. in the preparation of the annual accounts for the financial year 2016-17 theapplicable accounting standards have been followed and there are no material departures;

ii. they have 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 at the end of the financial year and of the profitof the Company for the financial year;

iii. They have taken proper and sufficient care to the best of their knowledge andability for the maintenance of adequate accounting records in accordance with theprovisions of the Act. They confirm that there are adequate systems and controls forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

iv. they have prepared the annual accounts on a going concern basis;

v. they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and operating properly; and

vi. they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

BOARD EVALUATION

SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015 mandates thatthe Board shall monitor and review the Board evaluation framework. The Companies Act 2013states that a formal annual evaluation needs to be made by the Board of its ownperformance and that of its committees and individual directors. Schedule IV of theCompanies Act 2013 states that the performance evaluation of independent directors shallbe done by the entire Board of Directors excluding the director being evaluated.

The evaluation of all the directors and the Board as a whole and that of its committeewas conducted based on the criteria and framework adopted by the Board. Board has engagedNomination and Remuneration Committee for carrying out the evaluation and their findingwere shared with the board that had discussed and analyze its performance during the year.The Board approved the evaluation results as collated by the nomination and remunerationcommittee.

MANAGEMENTS' DISCUSSION AND ANALYSIS REPORT

Managements' Discussion and Analysis Report for the year under review as stipulatedunder SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 ispresented in a separate section forming Annexure D of the Director's Report.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND RESEARCH & DEVELOPMENT ANDFOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars relating to energy conservation technology absorption foreign exchangeearnings and outgo as required to be disclosed under Section 134 (3) (m) of the CompaniesAct 2013 read with the Rule 8(3) of the Companies (Accounts) Rules 2014 are givenhereunder:

Conservation of Energy

i.) Steps taken or impact on conservation of energy: Energy conservation efforts areongoing activities. During the year under review further efforts were made to ensureoptimum utilization of electricity.

ii) Steps taken by the company for utilizing alternate sources of energy: Nil as yourcompany does not carry any manufacturing activities

iii) The Capital investment on energy conservation equipment's: Nil

Technology Absorption Adaption & Innovation and Research & Development

No research & development or technical absorption or adaption & innovationtaken place in the company during the Financial Year 2016-17 the details as per rule 8(3)of The companies (Accounts) Rules 2014 are as follows:

i) Efforts made towards technology absorption: - Nil

ii) Benefits derived like product improvement cost reduction product development orimport substitution: Nil

iii) In case of imported technology (imported during the last 3 years reckoned from thebeginning of the financial year)-

a) Details of technology imported: Nil

b) Year of Import: Nil

c) Whether the technology been fully absorbed: Nil

d) Areas where absorption has not taken place and the reasons there of: Nil

iv) Expenditure incurred on Research and Development: Nil

Foreign Exchange Earnings and Outgo

As your Company does not deal in Foreign Exchange therefore the particulars relatingto Foreign Exchange Earnings and Outgo are not applicable to your Company.

Foreign Exchange Earnings: Nil

Foreign Exchange Outgo: Nil

FIXED DEPOSITS

Your Company has not accepted any fixed deposits covered under Chapter V of the CompanyAct 2013 and as such no amount of principal or interest was outstanding on the date ofthe Balance Sheet.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

• Retirement by Rotation

In accordance with the provisions of Section 152 of The Companies Act 2013 Mr. KunalLalani Director of the Company is liable to retire by rotation at the ensuing AnnualGeneral Meeting and being eligible has offered himself for re-appointment.

Appointment / Re-appointment and Cessation of Directors & KMP

During the year under review there is no change in the composition of the Board ofDirectors of the Company.

Further Ms. Neelu Prajapati has resigned from the post of Company Secretary of theCompany and Ms. Swati Kapoor has been appointed as the new Company Secretary of theCompany with effect from 24/05/2017.

Pursuant to the provisions of Section 203 of the Act your Company has following KeyManagerial Personnel(s):

• Mr. Surendra Chhalani - Chief Financial Officer;

• Ms. Swati Kapoor - Company Secretary.

DECLARATION BY THE INDEPENDENT DIRECTORS

All Independent Directors has given declarations to the company confirming that theymeet the criteria of independence as laid down under Section 149 (6) of The Companies Act2013and Regulation 16(1) (b) of SEBI (Listing Obligation and Disclosure Requirements)Regulations 2015

AUDITORS AND AUDITOR'S REPORT

M/s Sipani & Associates Charted Accountants have completed their term as persection 139 (2)of Companies Act 2013. Therefore board proposes to appoint M/s M/sVirendra Pradeep & Co. as Statutory Auditors.

M/s Virendra Pradeep & Co. Chartered Accountants have conveyed their consent tobe appointed as the Statutory Auditors of the Company along with a confirmation thattheir appointment if made by the members would be within the limits prescribed under theCompanies Act 2013.

M/s Virendra Pradeep & Co. Chartered Accountants are appointed as StatutoryAuditors of the Company for a term of five years subject to ratification at every AGM. M/sVirendra Pradeep & Co. be and is hereby appointed to hold the office from theconclusion of this AGM till the conclusion of the 37th AGM of the Company to be held inthe year 2022 recommended by the audit committee and Board of Director for appointment toaudit the Accounts of the Company for the Financial Year 2017-18 at remuneration as may bedecided by the Board of Directors and audit committee.

The Company has received a certificate from the auditors to the effect that theirappointment if made would be within the limits prescribed under the Companies Act 2013and they are not disqualified for appointment as per the provisions of section 141 of theCompanies Act 2013.

The auditor report and notes on accounts referred to in the Auditors Report isself-explanatory and there are no adverse remarks or qualification in the Report

Pursuant to the provisions of Section 139(1) of the Act and the rules framed thereunder M/s Virendra Pradeep & Co. Chartered Accountants are appointed as StatutoryAuditors of the Company for a term of five years i.e. till the conclusion of the 37thAnnual General Meeting (AGM) subject to ratification at every AGM. They have submittedtheir certificate to the Companies Act 2013. The observation of the auditors is explainedwherever necessary in appropriate notes to the accounts.

The Company has received a certificate from the auditors to the effect that theirappointment if made would be within the limits prescribed under the Companies Act 2013and they are not disqualified for appointment as per the provisions of section 141 of theCompanies Act 2013.

The auditor report and notes on accounts referred to in the Auditors Report isself-explanatory and there are no adverse remarks or qualification in the Report.

LISTING OF SECURITIES

The Company's Equity Shares are listed on following stock exchanges:

i. The Delhi Stock Exchange Limited

ii. The Bombay Stock Exchange Limited

Delhi Stock Exchange has also been derecognized w.e.f. 19th November 2014 vide SEBIorder.

PARTICULARS OF EMPLOYEES

None of the employees of your company is drawing remuneration exceeding limits laiddown under the provisions of Section 197 of the Companies Act 2013 read with Rule 5(2) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

Further the information required under the provisions of Section 197(12) of theCompanies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is appended as Annexure- E and forms part of thisreport.

MEETINGS OF THE BOARD OF DIRECTORS

The Board duly met at regular intervals to discuss and decide on businessstrategies/policies and review the financial performance of the Company. The notice alongwith Agenda and notes on agenda of each Board Meeting was given in writing to eachDirector.

In the Financial Year 2016-17 the Board met Fifteen (15) times. The meetings were heldon 20/05/2016 30/05/2016 13/06/2016 01/08/2016 22/08/2016 27/08/2016 04/11/201611/11/2016 17/11/2016 15/12/2016 13/01/2017 31/01/2017 06/02/2017 13/02/2017 and17/03/2017. The interval between two meetings was well within the maximum period mentionedunder Section 173 of Companies Act 2013 and Regulation 17(2) of SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015.

COMPOSITION OF COMMITTEES

a) Audit Committee

The present Audit Committee of the board comprises of three members with independentdirectors forming a majority namely Mrs. Anisha Anand as Chairman and Mr. Rajendra KumarBengani Mr. Surendra Chhalani as members of the Committee.

All the recommendations made by the Audit Committee were accepted by the board.

Further the Roles and Responsibility and other related matters of Audit Committeeforms an integral part of Corporate Governance Report as part of annual report.

b) Nomination And Remuneration Committee

The Nomination and Remuneration Committee comprises of Mr. Navratan Baid as chairmanMr. Rajendra Kumar Bengani and Mrs. Anisha Anand as members all of whom are Non-Executive Directors.

All the recommendations made by the Nomination and Remuneration committee were acceptedby the board.

Further the terms of reference and other related matters of Nomination andRemuneration committee forms an integral part of Corporate Governance Report as part ofannual report.

c) Stakeholder Relationship Committee

Stakeholders Relationship Committee comprises of Mr. Sachin Mehra as Chairman with Mr.Navratan Baid and Mr. Surendra Chhalani as members of the Committee.

The Committee is set up to monitor the process of share transfer issue of fresh ShareCertificates as well as review of redressed of investors/shareholders grievances.

Further the role and responsibility and other related matters of StakeholdersRelationship Committee forms an integral part of Corporate Governance Report as part ofannual report.

POLICY FOR DIRECTORS' APPOINTMENT AND REMUNERATION

The policy of the Company on Directors' appointment and remuneration includingcriteria for determining qualification positive attributes independence of Director andother matters provided under sub-section 3 of section 178 of the Companies Act 2013adopted by the Board is annexed to this report as Annexure F.

RELATED PARTY TRANSACTIONS

All the related party transactions are entered on arm's length basis and are incompliance with the applicable provisions of the Act and the Listing Agreement. There areno materially significant related party transactions made by the company with PromotersDirectors or Key Managerial Personnel etc. which may have potential conflict with theinterest of the company at large.

All Related Party Transactions are presented to the Audit committee. Omnibus approvalis obtained for the transactions which are foreseen and repetitive in nature. A statementof related party transactions was presented before the Audit Committee on a quarterlybasis specifying the nature value and terms and conditions of the transactions.

All the contracts/arrangements/transactions entered with related party for the yearunder review were on Arm's Length basis. Company has entered into material related partytransactions during the year under review. Further disclosure in Form AOC-2 is as attachedas Annexure G.

The policy on Related Party Transactions as approved by the Board of Directors has beenuploaded on the website of the Company http://www.megacorpltd.com/.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements as on31.03.2017.

PAYMENT OF LISTING FEES

Your Company has paid Listing fees for the financial year 2017-18 to the BSE.

EXTRACT OF ANNUAL RETURN

Extract of Annual Return of the Company in the prescribed Form MGT-9 is appointed as Annexure-H to this Board's Report.

Having regard to the provisions of the first proviso to Section 136(1) of the Act theAnnual Report excluding the aforesaid information is being sent to the members of theCompany. The said information is available for inspection at the registered office of theobtaining such information may write to CFO & Company Secretary and the same will befurnished on request.

The full Annual Report including the aforesaid information is available on thecompany's website www.megacorpltd.com.

RISK MANAGEMENT POLICY

Enterprise Risk Management is a risk based approach to manage an enterpriseidentifying events that may affect the entity and manage risks to provide reasonableassurance regarding achievement of entity's objective.

The risks identified by the Company broadly fall into the following categories viz.strategic risks operational risks regulatory risks financial and accounting risksforeign currency and other treasury related risks and information systems risks. The riskmanagement process consists of risk identification risk assessment risk prioritizationrisk treatment or mitigation risk monitoring and documenting the new risks.

Your Board has laid down a risk management framework and policy to address the aboverisks. The objective of the policy is to identify existing & emerging challenges thatmay adversely affect the Company and manage risks in order to provide reasonable assuranceto the various stakeholders. In the opinion of your Board none of the risks which havebeen identified may threaten the existence of the Company.

POLICIES &DISCLOSURES

VIGIL MECHANISM

Your Company has established ‘Vigil Mechanism' for directors and employees toreport concerns about unethical behavior actual or suspected fraud or violation of theCompany's code of conduct or ethics policy and provides safeguard against victimization ofemployees who avail the mechanism. The policy permits all the directors and employees toreport their concerns directly to the Chairman of the Audit Committee of the Company.

The Vigil Mechanism/Whistle blower Policy of the company provides that protecteddisclosures can be made by a whistle blower through an email to the Chairman of the auditcommittee. The Whistle Blower Policy can be accessed on the Company's Website at the link:http://www.megacorpltd.com/.

CORPORATE SOCIAL RESPONSIBILITY

Pursuant to Section 135 of the Companies Act 2013 and rules made there under everycompany having net worth of Rupees five hundred crores or more or turnover of rupees onethousand crores or more or a net profit of rupees five crores or more during any financialyear shall constitute a Corporate Social Responsibility Committee of the Board.

However it is not applicable in case of your Company. Hence there is no need to formCorporate Social Responsibility Committee and Corporate Social Responsibility Policy forthe company as per the requirement of the Companies Act 2013.

BOARD EVALUATION

SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015 mandates thatthe Board shall monitor and review the Board evaluation framework. The Companies Act 2013states that a formal annual evaluation needs to be made by the Board of its ownperformance and that of its committees and individual directors. Schedule IV of theCompanies Act 2013 states that the performance evaluation of independent directors shallbe done by the entire Board of Directors excluding the director being evaluated.

The evaluation of all the directors and the Board as a whole and that of its committeewas conducted based on the criteria and framework adopted by the Board. Board has engagedNomination and Remuneration Committee for carrying out the evaluation and their findingwere shared with the board that had discussed and analyze its performance during the year.The Board approved the evaluation results as collated by the nomination and remunerationcommittee.

FAMILIARIZATION PROGRAMME AND TRAINING OF INDEPENDENT DIRECTORS

The details of programmes for familiarization of Independent Directors with thecompany their roles and responsibilities in the company business model of the companyand other related matter are put on the website of the Company at the link:http://www.megacorpltd.com/.

To familiarize the new inductees as independent director with the strategy operationsand functions of our Company the executive directors make presentations to the inducteesabout the Company's organization structure finance human resources facilities and riskmanagement.

Further at the time of appointment of an independent director the Company issues aformal letter of appointment outlining his/her role function duties and responsibilitiesas a director.

GENERAL

Your Director states that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year underreview:-

a) Details relating to deposits covered under Chapter V of the Act.

b) Issue of the equity shares with differential rights as to dividend voting orotherwise.

c) Issue of shares (including sweat equity shares) to directors or employees of theCompany

d) Issue of Employee Stock Option Scheme to employees of the company

e) No significant or material orders were passed by the regulators or courts ortribunals which impact the going concern status and Company's operations in future.

f) Purchase of or subscription for shares in the company by the employees of thecompany.

Your Directors further state that:-a) The Company has zero tolerance for sexualharassment and during the year under review there were no complaint received and no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.

b) And there is no change in the nature of business of company during the year.

INDUSTRIAL AND HUMAN RELATIONS

Since the Company is not into any kind of manufacturing activity there is no matter todiscuss about industrial relations and the Company is maintaining cordial relations withits staff members.

ACKNOWLEDGEMENTS

The Directors wish to convey their appreciation to business associates for theirsupport and contribution during the year. The Directors would also like to thank theemployees shareholders customers suppliers bankers and regulatory and governmentauthorities for the continued support given by them to the Company and their confidencereposed in the management.

For and on behalf of the Board of Directors
Sd/-
(Surendra Chhalani)
Director and CFO
Place: New Delhi DIN: 00002747
Date: 28.08.2017 House No. 246 Sector 31 Faridabad- 121003