To The Members
Your Directors have pleasure in presenting the 36th(Thirty Sixth) AnnualReport together with the Audited Financial Statements of Monnet Industries Limited("the Company") for the Financial Year ended 31st March 2019.
1. FINANCIAL SUMMARY
A summary of the Company's Financial Results for the Financial Year 2018-19 is asunder:
|Particulars || |
Amount (Rs in Lacs.)
| ||2018-19 ||2017-18 |
|Operating income (Net of Excise) ||0.00 ||0.00 |
|Profit/(Loss) before tax (after Exceptional Item) ||(14284.03) ||(888.41) |
|Tax Expense (Including Deferred Tax) ||0.08 ||0.00 |
|Profit/(Loss) after Tax ||(14284.12) ||(888.41) |
The Company has adopted Indian Accounting Standard (referred to as 'IND AS') witheffect from April 1 2017 and accordingly these financial results along with thecomparatives have been prepared in accordance with the recognition and measurementprincipals stated therein prescribed under Section 133 of the Companies Act("Act") read with the relevant Rules framed thereunder and the other accountingprinciples generally accepted in India.
2. STATEMENT OF COMPANY'S AFFAIR FUTURE OUTLOOK MATERIAL CHANGES AND COMMITMENTS IFANY AFFECTING FINANCIAL POSITION OF THE COMPANY
During the year under review your Company's plant was closed. Therefore operatingincome was Nil. The Company's profit before tax (PBT) stands at (Rs.14284.03)Lacs asagainst the previous year loss of Rs. 888.41 Lacs and profit after tax stands at(Rs.14284.12)Lacs as against the previous year loss of Rs. 888.41 Lacs.
3. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS AND DATE OF THE REPORT
In terms of Section 134(3) (I) of the Companies Act 2013 except as disclosedelsewhere in this Report no material changes or commitments affecting the financialposition of the Company which have occurred between the end of the financial year and thedate of this Report. Further there has been no change in the nature of the businessduring the period under review.
4. DIVIDEND AND RESERVES
In view of the financial performance and inadequate profits during the year underreview your directors have not recommended any dividend and have not transferred anyamount to reserve for the financial year 2018-19.
5. PUBLIC DEPOSITS
Your Company has not accepted any deposits falling within the purview of Section 73 ofthe Act read with Chapter V of the Companies Act2013 and Companies (Acceptance ofDeposits) Rules 2014.
There is no unclaimed or unpaid deposit lying with the Company.
6. SHARE CAPITAL
The Company's Authorized Share Capital during the financial year ended March 31 2019remained at Rs. 19.00. 00.000/- (Rupees Nineteen Crore Only) consisting of 40.00. 000(Forty Lac) equity shares of Rs. 10/- (Rupee Ten Only) each and Rs. 150000000/- (RupeesFifteen Crore) consisting of 1500000(Fifteen Lacs) 10% NonCumulative Non-ConvertibleRedeemable Preference shares of Rs 100/-(Rupee Hundred Only) each.
The Company's Paid Up Share Capital is Rs. 186812620/- (Rupees Eighteen Crore SixtyEight Lac Twelve Thousand Six Hundred Twenty Only) consisting of 3681262 (Thirty SixLacs Eighty One Thousand Two Hundred Sixty Two) equity shares of Rs. 10/- (Rupees TenOnly) each and 1500000 (Fifteen Lac) 10% Non-Cumulative Non-Convertible RedeemablePreference shares of par value of Rs. 100 /- (Rupees Hundred Only) each.
(For Further information please refer Note No. 12 to the Standalone FinancialStatements of the Company for the FY 2018-19).
7. SUBSIDIARIES JOINT VENTURES OR ASSOCIATE COMPANIES
Your Company has no Subsidiary Joint venture or Associate Company and disclosurerequirements in relation to Subsidiaries Joint Ventures or Associate Companies is notapplicable on the Company.
Hence it is not required to attach Form AOC-1 pursuant to Section 129(3) of theCompanies Act 2013 read with Rule 5 of the Companies (Accounts) Rules 2014 a statementcontaining salient features of the financial statements of Subsidiaries/AssociateCompany/Joint Ventures. (Please refer Note No. 11 to the Standalone Financial Statementsof the Company)
8. DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act 2013 and theCompany's Articles of Association Mr. Mahesh Kumar Sharma (DIN: 07504637) Directorretires by rotation at the forthcoming Annual General Meeting and being eligible offershimself for reappointment. The Board recommends his re-appointment for the considerationof the Members of the Company at the ensuing Annual General meeting. Brief profile of Mr.Mahesh Kumar Sharma has been given in the Notice convening the Annual General meeting.
During the year under review Mr. Raj Kumar Sachdev Independent Director resignedfrom his office w.e.f July 05 2018 Mr. Jagdamba Prasad Lath Non-Executive- NonIndependent Director resigned from his office w.e.f. March 30 2019 and Mr. Vijay Sharmahas been appointed as an Additional Director Independent Director by the Board ofDirectors in their meeting held on August 13 2018.
Further Mr. Keshav Sharma (holding DIN:08275228)has been appointed as an AdditionalDirector Non-Excutive Non-Independent by the Board of Directors in their meeting held on30th May 2019.
Key Managerial Personnel
Pursuant to the provisions of Section 2(51) & 203 of the Companies Act 2013during the year under review the Key Managerial Personnel (KMP's) of the Company are:-
1. Mr. Mahesh Kumar Sharma - Whole Time Director & Chief Financial Officer
2. Ms. Khushboo Sharma- Company Secretary and Compliance officer
Further Ms. Khushboo Sharma Company Secretary and Compliance officer has relinquishedher position with effect from 30th April 2019 and Ms. Priya has been appointedas Company Secretary and Compliance officer by the Board of directors with effect from 30thMay 2019.
9. STATEMENT ON INDEPENDENCE OF DIRECTORS
All independent directors have given declarations that they meet the eligible criteriaof independence as laid down in Section 149(6) of the Companies Act 2013 and Regulation16(b) of the SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015.
10. NUMBER OF MEETING OF THE BOARD OF DIRECTORS
Four (4) meetings of the Board were held during the Financial Year 2018-19 forms partof the Corporate Governance Report. The Company has complied with Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015 and theapplicable Secretarial Standards issued by the Institute of Company Secretaries of India.
11. COMMITTEES OF THE BOARD
The Board of Directors has the following Committees:
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders' Relationship Committee
4. Executive Committee
The details of the Committees along with their composition number of meetings termsof reference and attendance of members at the meetings are provided in the CorporateGovernance Report which forms part of this Annual Report.
12. PERFORMANCE EVALUATION OF THE BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS
Pursuant to applicable provisions of the Companies Act 2013 and the SEBI (ListingObligations and Disclosures Requirements) Regulations 2015 a structured questionnaire wasprepared after taking into consideration of the various aspects of the Board'sfunctioning composition of the Board and its Committee culture execution andperformance of specific duties obligations and governance.
Schedule IV to the Companies Act 2013 also provides for the performance evaluation ofIndependent Directors by the entire Board of Directors excluding the Directors beingevaluated. The performance evaluation of the Chairman and the Non-Independent Directorswas carried out by the Independent Directors and Non-Executive Directors. The Board ofDirectors expressed their satisfaction with the evaluation process.
The manner in which the evaluation of the Board its Committees and IndividualDirectors has been carried out is explained in the Corporate Governance Report which formspart of this Annual Report.
13. RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onarm's length basis. Further there have been no materially significant related partytransactions between the Company and the Directors the management the subsidiaries orthe relatives.
The Board of Directors in their meeting held on December 14 2017 pursuant to theprovisions of section 188 and 177 of the Companies Act 2013 & the rules made thereunder and the Articles of Association of the Company read with Security and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015reappointed Mr. Jagdamba Prasad Lath Director as a Consultant in the Company w.e.f.December 01 2017 for a further period of Six months commencing from 01.12.2017 to31.05.2018. It was further extended for a period of 1 (one) year commencing from01.06.2018 to 31.05.2019 by the Board of Directors in their meeting held on May 28th2018.
In this regard disclosure in Form AOC-2 in terms of Section 134(3) (h) read withSection 188(2) of the Companies Act 2013 forms a part of the report as Annexure-1.
As required under Regulation 23(1) of the Listing Regulation the Company hasformulated a policy on dealing with Related Party Transactions. The Policy is available onthe website of the company viz. http://www.monneteroup.com/MIL-code-policv.php
(For Further information please refer Note No. 27 to the Standalone FinancialStatements of the Company for FY 2018-19)
14. DIRECTOR'S RESPONSIBILITY STATEMENT
The Company has taken utmost care in its operations compliance transparencyfinancial disclosures and financial statements have been made to give a true and fair viewof Company. As required under Section 134(5) and Section 134(3) (c) and based upon thedetailed representation due diligence and inquiry thereof and your Board of Directorsassures and confirm as under:
a) In preparation of Annual Accounts for the financial year ended 31stMarch 2019 in the applicable Indian
Accounting Standards (Ind "AS") and Schedule III of Companies Act 2013 hadbeen followed and there are no material departures from the same;
b) The directors had selected such accounting policies and applied 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 31st March 2019 and of theprofit and loss of the Company for the Financial Year ended 31st March 2019.The Company has adopted Indian Accounting Standards (Ind AS) with effect from April 012017 pursuant to notification issued by Ministry of Corporate Affairs dated February 162015 notifying the Companies (Indian Accounting Standard) Rules 2015. Accordingly thefinancial statements of the Company for the financial year ended March 31 2019 have beenprepared in accordance with Ind AS as prescribed under Section 133 of the Companies Act2013 (the "Act") read with the relevant rules made thereunder and otheraccounting principles generally accepted in India.
c) 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;
d) The annual accounts have been prepared on going concern basis;
e) The Directors had laid down internal financial controls and same were followed bythe Company and that such financial controls were adequate and were operating effectively;and
f) The Directors had devised proper systems to ensure compliance with the provisions ofall the applicable laws and that such systems were adequate and operating effectively.
15. INTERNAL CONTROLS SYSTEMS AND ITS ADEQUACY
Your Company has an effective internal control and risk- mitigation system which areconstantly assessed and strengthened with new/revised standard operating procedures. TheCompany's internal control system is commensurate with its size scale and complexities ofits operations. The internal and operational audit is entrusted to M/s O.P Bagla &Co. Chartered Accountants. The main thrust of internal audit is to test and reviewcontrols appraisal of risks and business processes besides bench marking controls withbest practices in the industry.
The Audit Committee of the Board of Directors actively reviews the adequacy andeffectiveness of the internal Control systems and suggests improvements to strengthen thesame. The Company has a robust Management information System which is an integral part ofthe control mechanism.
The Audit Committee of the Board of Directors and the Statutory Auditors areperiodically appraised of the internal audit findings and corrective actions taken.Significant audit observations and corrective actions taken by the management arepresented to the Audit Committee of the Board. To maintain its objectivity andindependence the Internal Audit function reports to the Chairman of the Audit Committee.
i) Statutory Auditor
Pursuant to the provisions of Section 139 of the Act and Rules framed thereunder atthe Annual General Meeting held on September 28 2017 M/s APAS & Co. CharteredAccountants (Registration No.000340C) were appointed as the Statutory Auditors of theCompany to hold such office from conclusion of 34thAnnual General Meeting untilconclusion of 39th Annual General Meeting (subject to ratification of theappointment by the members at every AGM held after 34thAGM) to conduct audit.
Pursuant to Section 40 of the Companies (Amendment) Act 2017 notified by the Ministryof Corporate Affairs on May 7 2018 the requirement for ratification of the appointmentof Statutory Auditors by the members at every Annual General Meeting has been done awaywith. Accordingly the Notice convening the ensuing AGM does not carry any resolution onratification of appointment of Statutory Auditors. However M/s APAS & Co. CharteredAccountants has confirmed that they are eligible to continue as Statutory Auditors of theCompany to audit the books of accounts of the Company for the Financial Year ending March31 2020 and accordingly M/s APAS & Co. Chartered Accountants will continue to be theStatutory Auditors of the Company for Financial Year ending March 31 2020.
Comments/Qualifications of the Statutory Auditors in their report and the notes formingpart of the Accounts are selfexplanatory. Management representations to thesequalifications/comments are as follows:
A. Basis for Qualified Opinion in the Audit Report on Financial Statement and Commentsof Management thereon-
During the year the company has obtained short-term inter corporate deposits. As thereare no major operations during the year and considering liquidity constraints the companyis under negotiation with lender companies and is expecting waiver of interest. In view ofuncertainty as aforesaid the company no provision has been made towards interest on theseloans. Had the interest been provided loss for the year would have been higher by Rs.525.21 Lacs (based on prevailing terms & conditions of lending) with a correspondingincrease in borrowings.
The Company is in the process of the negotiating the waver of interest with the lendersof Short-term facility and inter- corprate deposits hence no provisions has been madetowards interest on these loans.
ii) Secretarial Auditor
Pursuant to Section 204 of the Companies Act 2013 and The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Company had appointed M/s SanjayGrover & Associates Practicing Company Secretaries New Delhi as the SecretarialAuditor of the Company to conduct the Secretarial Audit of the Company for Financial Year2018-19. The Report of Secretarial Auditor (Form MR-3) for the Financial Year 2018-19isannexed to the report as Annexure -2.
The Secretarial Audit Report for the financial year ended March 31 2019 does notcontain any observation or qualification requiring explanation or comments from the Boardunder Section 134(3) of the Companies Act 2013
iii) Internal Auditor
Pursuant to Section 138 of the Companies Act 2013 the Company has appointedM/s.O.P.Bagla& Co. (Firm Registration No. 000018N) as internal auditor of the Companyin its Board Meeting held on August 13 2018 for the financial year 2018-19. The report ofthe same has been placed before the Board of Directors.
17. CORPORATE SOCIAL RESPONSIBILITY
The Company at present does not fall in any of the criteria(s) as provided undersection 135 of the Companies Act 2013 and Rules made there under. Hence the provisions ofCorporate Social Responsibility are not applicable on the Company.
18. LISTING OF SHARES
The Company's Equity Shares are presently listed at BSE Limited(PhirozeJeejeebhoyTowers Dalal Street Fort Mumbai - 400 001 Website: www.bseindia.com). TheListing Fees for the financial year 2018-19 has been paid to BSE Limited.
The Company has made application to The Calcutta Stock Exchange Ltd. (7 Lyons RangeKolkata -700001) for delisting of its equity shares. Pending this application the StockExchange suspended listing of securities of the Company and asked the Company to updatethe compliance status before acceptance of de-listing application.
The Further details in relation to listing of shares are given in the CorporateGovernance Report attached with the Board Report.
19. MANAGEMENT DISCUSSION & ANALYSIS REPORT
A detailed analysis of your Company's performance is discussed in the ManagementDiscussion and Analysis Report as stipulated under Regulation 34 of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 which forms part of this Annual Report as Annexure-3.
20. RISK MANAGEMENT
Your Company's Risk Management Policy is backed by strong internal control systems. Therisk management framework consists of policies and procedures framed at management leveland strictly adhered to and monitored at all levels. The framework also defines the riskmanagement approach across the enterprise at various levels. Risk management is embeddedin our critical business activities functions and processes. The risks are reviewed forchange in the nature and extent of the major risks identified since the last assessment.It also provides control measures for risk and future action plans.
The internal audit team periodically visits the divisions and carries out audit. Thefindings are periodically reviewed by the Board and Audit Committee with emphasis onmaintaining its effectiveness in dynamic business environment.
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 are no significant material orders passed by the Regulators / Courts or Tribunalswhich would impact the going concern status of the Company and its future operations.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS OTHER THAN THOSE WHICH ARE REPORTABLETO THE CENTRAL GOVERNMENT
The Statutory Auditors Secretarial Auditors or Internal Auditors of the Company havenot reported any frauds to the Audit Committee or to the Board of Directors under Section143(12) of the Companies Act 2013 including rules made thereunder.
VOLUNTARY REVISION OF FINANCIAL STATEMENTS OR BOARD REPORT
During the year under review the company has not filed any application with thetribunal for revision of financial statements or board report in any of the threepreceding financial years.
STOCK OPTIONS SCHEME
The Company does not have any Scheme of Stock Option for its employees Directors etc.
DISCLOSURE UNDER SECTION 43(A)(III) AND SECTION 54(1)(D) OF THE COMPANIES ACT 2013
During the year under review the Company has not issued any shares with differentialvoting rights and sweat equity shares and hence no information as required under Section43(a)(iii) & Section 54(1)(d) of the Companies Act 2013 read with applicable rules isrequired to be disclosed.
EXTRACT OF ANNUAL RETURN
In accordance with the provisions of Section 134(3)(a) of the Companies Act 2013 readwith Section 36 of Companies (Amendment) Act 2017 which came into effect on 31stJuly 2018 the extract of the annual return in Form No. MGT - 9 has been placedon the website of the company
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
In accordance with the provisions of Section 186 of the Companies Act 2013 details ofLoans Guarantees and Investments covered under the provisions of Section 186 of theCompanies Act 2013 for the year are given in the Note No. 5 and Note No.6 to thefinancial statements for the FY 2018-19.
NOMINATION AND REMUNERATION POLICY
The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for selection and appointment of Directors Key Managerial Personnel andtheir remuneration as well as policy on other employee's remuneration. The Brief terms ofpolicy is stated on the website http://www.monnetgroup.com/MIL-code- policy.php
The details pertaining to composition of audit committee are included in the CorporateGovernance Report which forms part of this report.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a vigil mechanism named Vigil Mechanism / Whistle Blower Policy to dealwith instances of fraud and mismanagement if any. Details of the same are given in theCorporate Governance Report. The same has also been displayed on the website of theCompany and the link for the same is http://www.monnetgroup.com/MIL- code-policy.php
The Company is not required to maintain cost records as specified by the CentralGovernment under sub-section (1) of section 148 of the Companies Act 2013 read withCompanies (Accounts) Amendment Rules 2018 which came into effect on 31st July2018.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
Your Company has laid down Anti Sexual Harassment policy on Gender EqualityGender Protection Prevention of Sexual Harassment and Redressal System in line with therequirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. An Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary apprenticeship) are covered under this policy. The following is a summary ofsexual harassment complaints received and disposed off during the year under review
No. of complaints received: Nil
No. of complaints disposed off : NA
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1)/(2)/(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are annexed to this report as Annexure-4.
CORPORATE GOVERNANCE REPORT
Your Company has complied with requirements of Regulation 34 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. A report on the CorporateGovernance practices followed by the Company together with a certificate from thePracticing Company Secretary confirming compliance forms part of this report and adeclaration by the Executive Director of the company regarding compliance by Board Membersand Senior Personnel with the company's Code of Conduct. With effect from 01.04.2019 aCertificate form the Company Secretary in practice that none of the directors on the Boardof the Company has debarred or disqualified from being appointed or continuing as Directorof the Company also form the part of the Corporate governance report and annexed to thisreport as Annexure-5.
22. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNING AND OUT GO
Information under Section 134(3)(m) of the Companies Act 2013 read with rule 8(3) ofthe Companies (Accounts) Rules 2014 is given below:
A. Conservation of Energy-
The Company's plant was closed during the year so the Company had not made any majorcapital investment on energy conservation equipment's.
B. Technology Absorption-
I. Efforts in brief made towards technology absorption : As the Company's plant is notin operation so no efforts were made for technology absorption.
ii. Benefits derived like product improvement cost reduction product development orimport substitution : NIL
iii. In case of imported technology (imported during the last three financial yearreckoned from the beginning of the financial year)
(a) Technology Imported: NIL
(b) Year of Import: NIL
(c) Whether the technology has fully been absorbed:NIL
(d) If not fully absorbed area where absorption has not taken place and reasonthereof:NIL
iv. Expenditure incurred on Research and Development: NIL
C. Foreign Exchange Earnings And Outgo- Not Applicable
23. CAUTIONARY NOTE
Certain Statements in the 'Management Discussion and Analysis' section may beforward-looking and are stated as required by applicable laws and regulations. Manyfactors may affect the actual results which would be different from what the Directorsenvisage in terms of the future performance and outlook. Investors are cautioned that thisdiscussion contains forward looking Statement that involve risks and uncertaintiesincluding but not limited to risks inherent in the Company's growth strategy dependenceon certain businesses dependence on availability of qualified and trained manpower andother factors discussed. The discussion and analysis should be read in conjunction withthe Company's Financial Statements and notes on accounts.
Your Directors take this opportunity to offer their sincere thanks to the variousDepartments of the Central and State Government Financial Institutions Bankers to theCompany all Customers Suppliers and contractors for their continued valued assistanceand support. Your Directors also wish to place on record their appreciation for dedicatedservices rendered by all officers staff and workers of the Company at all levels.
|Dated:13.08.2019 ||By Order of the Board |
|Place:Delhi For Monnet Industries Limited |
|(Keshav Sharma) ||(Mahesh Kumar Sharma) |
|Director ||Whole-time Director& CFO |
|DIN:08161059 ||DIN:07504637 |