TO THE MEMBERS
Your Directors have pleasure in presenting the Thirty-Third AnnualReport on the business operations and state of affairs of the Company together with theStandalone and Consolidated Audited Financial Statements for the financial year endedMarch 31 2018.
1. FINANCIAL RESULTS
The Company's standalone financial performance under review along withprevious year's figures is given hereunder:
|Particulars || |
| || |
|Income From Operations || |
|Other Income || |
|Total Income || |
|Profit before Interest Depreciation & Tax || |
|Less : Interest || |
|Profit Before Depreciation || |
|Less : Depreciation || |
|Profit After Depreciation and Interest || |
|Less: Current Income Tax || |
|Less: Previous year Adjustment of Income Tax || |
|Less: Deferred Tax || |
|Net Profit After Taxation || |
|Less: Dividend || |
|Less: Dividend Distribution Tax || |
|Less: Transfer to Statutory Reserve || |
|Less: Provision for Standard Assets || |
|Balance carried to Balance Sheet || |
|Earning Per Share (Basic/Diluted) || |
| || || |
2. TRANSFER TO RESERVE
A sum of Rs.15456975/- has been transferred to Special Reserve duringthe year. Your Company does not propose to transfer any amount to General Reserve out ofthe amounts available for appropriation and an amount of Rs.53334617/- is proposed tobe retained in the Profit & Loss account.
The Board of Directors has recommended a dividend of Rs.1.20 (Rupee Oneand Twenty Paise Only) per equity share on face value of Rs.10/- (Rupees Ten each) i.e.12%for the financial year ended March 31 2018.
The payment of dividend is subject to approval of Members at theforthcoming Annual General Meeting (AGM) would result a Dividend outflow ofRs.8365080/- and dividend Distribution Tax of Rs.1719467/- aggregating a total outflowof Rs.10084547/-.
Dividend will be paid to those Members whose names appear in theRegister of Members as on
September 16 2018.
4. SHARE CAPITAL
The paid-up Equity Share Capital of the Company as on March 31 2018 isRs.69675000/-. During the year under review the Company has neither issued any shareswith differential voting rights nor granted any stock options nor any sweat equity. TheCompany's equity share capital is listed on BSE Limited. The shares are actively traded onBSE and have not been suspended from trading.
5. PERFORMANCE REVIEW / OPERATIONS
During the year under review Income from Operations increased fromRs.532.90 Lakhs to Rs.1041.64 Lakhs (Increase of 95.47%). Profit before InterestDepreciation and Tax increased from Rs.496.70 Lakhs to Rs.970.15 Lakhs (Increase of95.32%) and Profit after Tax increased from Rs. 280.66 Lakhs to Rs.772.85 Lakhs (Increaseof 175.37%) Provision for taxation for the year is Rs.95.66 Lacs (including Deferred TaxProvision) as compared to Rs.89.40 Lakhs in the previous financial year.
6. PERFORMANCE OF SUBSIDIARY COMPANIES:
During the year under review the Company has only one subsidiary Mukesh Babu Securities Limited (CIN: U67120MH1994PLC076455) and the Highlights of thefinancial performance during FY 2017-18 are as follows:
As on March 31 2018 the Authorised & Paid up Share Capital of theCompany is Rs.50000000/- (Rupees Five Crores Only) The net loss of the Company for theyear ended March 31 2018 is Rs.10.10 Lacs as compared to net profit of Rs.31.07 Lacs inprevious year.
Accounts of Subsidiary:
The Consolidated Financial Statements of the Company are prepared inaccordance with the provisions of Section 129(3) of the Companies Act 2013 and as per theapplicable Accounting Standards issued by the Institute of Chartered Accountants of India.
Pursuant to proviso (b) to Section 136(1) of the Companies Act 2013 acopy of the audited financial statements for the year ended March 31 2018 alongwith theReports of the Board of Directors and the Auditors of the Company's subsidiary- MukeshBabu Securities Limited shall be furnished to any shareholder on demand.
These are also available for inspection at the Registered Office of theCompany and are also being posted on the Company's website www.mukeshbabu.com
7. CONSOLIDATED FINANCIAL STATEMENTS
As required under Regulation 33 of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 ("SEBIListing Regulations") and applicable provisions of Companies Act 2013 ("theAct") the Consolidated Financial Statements of the Company have been prepared inaccordance with the applicable Accounting Standards and forms part of the Annual Report.Pursuant to Section 129(3) of the Companies Act 2013 read with Rule 5 of The Companies(Accounts) Rules 2014 Statement containing salient features of the financial statementsof subsidiary is annexed to this report as Annexure -A.
8. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIALPOSITION OF THE COMPANY THAT OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THISFINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
There are no material changes and commitments affecting the financialposition of the Company that occurred between the end of the financial year to which thisfinancial statements relate and the date of this report.
9. PUBLIC DEPOSITS
During the year under review the Company has neither accepted norrenewed any deposits within the meaning of Section 73 and 74 of the Companies Act 2013read with The Companies (Acceptance of Deposits) Rules 2014.There are no outstandingdeposits at the end of the year.
10. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION
186 OF THE COMPANIES ACT 2013
The provisions of Section 186 of the Act pertaining to investment andlending activities is not applicable to the Company since the Company is an NBFC dulyregistered with the Reserve Bank of India. The details of loan given investments made andguarantees and security provided during the financial year are furnished in the Notes tothe financial statements.
11. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
All the related party transactions entered by the Company during thefinancial year were on an arms' length basis and were carried out in the ordinary courseof business.
During the year under review the Company had advanced loans to itssubsidiary Mukesh Babu Securities Ltd. There were no materially significant relatedparty transactions made by the Company during the year under consideration with thePromoters Directors or Key Managerial Personnel which have a potential conflict with theinterest of the Company at large.
In accordance with the Regulation 23 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Company has formulated a Policy onMateriality of Related Party Transactions and a Policy on dealing with Related PartyTransactions. The Policy is available on the Company's Website at www.mukeshbabu.com
The particulars as required under the Companies Act 2013 are furnishedin Form AOC-2 which is annexed as Annexure B to this report.
12. CORPORATE SOCIAL RESPONSIBILITY (CSR)
Section 135 of the Companies Act 2013 read with the Companies(Corporate Social Responsibility Policy) Rules 2014 is not applicable to the Company forthe financial year under review.
13. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an internal control system commensurate with the sizeof its operations and nature of its business activities. The Internal Auditor monitors andevaluates the efficacy and adequacy of internal control system in the Company itscompliance with operating systems accounting procedures and policies of the Company.
14. RISK MANAGEMENT
The Company being a Non- Banking Financial Company is regulated byReserve Bank of India (RBI) and the Board of Directors of the Company has constituted theRisk Management Committee to frame implement and monitor the Risk Management Policy ofthe Company. The Committee is responsible for reviewing the risk management plan andensuring its efficiency. The policy is available on the Company's website atwww.mukeshbabu.com
15. WHISTLE BLOWER POLICY / VIGIL MECHANISM
As required under Regulation 22 of the Securities Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 the Company hasan effective Whistle Blower Policy to deal with the instances of fraud and mismanagement.The details of the policy are enumerated in the Corporate Governance Report. The policy isavailable on the Company's website at www.mukeshbabu.com.
The policy provides for adequate safeguard against the victimisation ofthe employees and Directors who express their concerns. The Company has also provideddirect access to the Chairman of the Audit Committee on reporting issues concerning theinterests of employees and the Company. The Vigil Mechanism is overseen by the AuditCommittee.
16. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
The Company has in place an Anti-Sexual Harassment Policy in line withthe requirements of the Sexual Harassment of Women at the Workplace (PreventionProhibition and Redressal) Act 2013. Internal Complaints Committee has been set up toredress the complaints received regarding sexual harassment. All employees (permanentcontractual temporary trainees) are covered under this policy. There were no casesreported during the financial year ended March 31 2018. The policy is available on theCompany's website at www.mukeshbabu.com.
17. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
Mr. K. Chandrasekhar who was a Non - Executive Director on the Board ofthe Company for a period of more than 2 decades expired on 24th October 2017 and therebyceased to be a Director on the Board. The Board has been deeply saddened by the demise andplaces on record deep appreciation for his insightful contribution to the Company.
Mrs. Dipali Shah who was a Whole - Time Director & CompanySecretary on the Board of the Company resigned from the Company's Board with effect from15th April 2018 after having served the Company in roles of a Director & CompanySecretary.
(b) Appointment of Director:
The Board has appointed Mrs. Meena Mukesh Babu (DIN: 00799732) asNon-Executive Director on the Board of the Company at the Board Meeting held on 29th May2018 with immediate effect. A Resolution is included in the Notice convening the AnnualGeneral Meeting seeking approval of the members for the appointment of Mrs. Meena MukeshBabu as Non-Executive Director. The Board recommends her appointment.
(c) Re-appointment of Managing Director:
Mr. Mukesh Babu is re-appointed as the Managing Director with effectfrom 24th May 2018 at the Meeting of the Board of the Company held on 29th May 2018 inaccordance with the provisions of Sections 196 197 and 203 read with Schedule V and otherapplicable provisions of the Companies Act 2013 and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 as amended by Companies (Appointment andRemuneration of Managerial Personnel) Amendment Rules 2016 subject to the approval of theshareholders at the ensuing Annual General Meeting.
(d) Retirement by rotation:
In terms of the provisions of Section 152(6) of the Companies Act2013 Mr. Mukesh Babu Director (DIN:00224300) retires by rotation at the forthcomingAnnual General Meeting and being eligible offers himself for re-appointment. The Boardrecommends his re-appointment.
In accordance with Regulation 36 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and applicable provisions of the Companies Act2013 brief profile of the Director to be appointed / re-appointed is included in theNotice which forms part of this Annual Report.
(e) Key Managerial Personnel:
Pursuant to the provisions of Section 203 of the Act read with therules made there under the following employees are the whole time key managerialpersonnel of the Company:
1. Mr. Mukesh Babu Managing Director
2. Mr. Mahesh Thakar Chief Financial Officer appointedw.e.f. 29-05-2018
3. Ms. Dipali Shah Company Secretary & Compliance Officerresigned w.e.f. 15-04-2018
4. Ms. Manasi Dalal Company Secretary & ComplianceOfficerappointed w.e.f. 29-05-2018
18. DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors have furnished the declarations that theymeet the criteria of independence as laid down under Section 149(6) of the Companies Act2013.
19. BOARD AND COMMITTEES
During the year Four Board meetings were held and the gap between twoBoard Meetings did not exceed 120 days and atleast one meeting has been held in eachQuarter. The details of the constitution and meetings of the Board and its Committees heldduring the year are provided in the Corporate Governance Report which forms part of thisAnnual Report.
20. BOARD'S EVALUATION
Pursuant to the provisions of the Companies Act 2013 and the corporategovernance requirements as prescribed by Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015; the Board has framed anEvaluation Policy for evaluating the performance of the Board Chairman ManagingDirector Non-executive Directors Independent Directors and its Committees The Policyinter alia provides the criteria for performance evaluation such as Board effectivenessquality of discussion contribution at the meetings business acumen strategic thinkingrelationship with the stakeholders corporate governance practices contribution of theCommittees to the Board in discharging its functions etc.
A meeting of the Independent Directors was held during the year underreview.
The manner in which the evaluation was carried out has been explainedin the Corporate Governance Report.
21. TRAINING IMPARTED TO THE INDEPENDENT DIRECTORS
As required under Regulation 25(7) of the SEBI Listing Regulationsevery Independent Director of the Board is familiarised by the Executive Directors/ SeniorManagerial Personnel about the Company's strategy operations organisation structurehuman resources quality finance and risk management. Further at the time of appointmentof an independent director the Company issues a formal letter of appointment outlininghis/ her role functions duties and responsibilities as a director. The terms andconditions of letter of appointment is available on the Company's website atwww.mukeshbabu.com
22. POLICIES OF THE COMPANY
The Company is determined in maintaining a good corporate governancepractice and has a robust system for smooth and effective functioning of the Board.Various policies have been framed by the Board of Directors as required under theCompanies Act 2013 and SEBI Listing Regulations in order to follow a uniform system ofprocedures. These policies are periodically reviewed and updated by the Board of Directorsof the Company from time to time. Following are some of the major policies adopted by the
1. Code for Insider Trading Policy
2. Nomination & Remuneration Policy
3. Policy for determination of Material Subsidiary
4. Policy on materiality of Related Party Transactions
5. Policy on dealing with Related Party Transactions
6. Whistle Blower Policy
7. Document Retention and Archival Policy
8. Code for Directors and Senior Managerial Personnel
9. Policy on evaluation of Directors
10. Policy on prevention of Sexual Harassment of Women at Workplace
The aforementioned policies are available on the website of the Company and can beaccessed at
23. DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the CompaniesAct 2013 your Directors to the best of their ability & knowledge hereby confirmsthat-
(a) in the preparation of the annual accounts for the year ended March31 2018 the applicable accounting standards have been followed from time to time and nomaterial departures have been made from the same
(b) they have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at 31st March 2018and of the profit and loss of the Company for that period;
(c) they had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
(d) they have prepared the annual accounts on a going concern basis;
(e) they have laid down internal financial controls to be followed bythe Company and that they are adequate and are operating effectively; and
(f) they have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
24. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There were no significant and material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its futureoperations.
25. STATUTORY AUDITORS
At the 32nd Annual General Meeting of the Company held on 29thSeptember 2017 the members of the Company approved the appointment of M/s. Chaitanya C.Dalal & Co. Chartered Accountants (FRN.101632W) as the Statutory Auditors of theCompany for a term of period of 5 (five) years up to the conclusion of 37th Annual GeneralMeeting subject to ratification of such appointment by the members at every annual generalmeeting to be held thereafter.
However pursuant to the Companies (Amendment) Act 2017 and theCompanies (Audit and Auditors) Amendment Rules 2018 with effect from 7th May 2018; therequirement of ratification of appointment of the Auditors at every Annual General Meetinghas been omitted under the Companies (Amendment) Act 2017 which is effective from May 72018 and Accordingly the Board proposes to ratify and confirm appointment of M/s.Chaitanya C. Dalal & Co. Chartered Accountants (FRN-101632W) as the StatutoryAuditors of the Company up to the conclusion of 37th Annual General Meeting withoutfurther ratification of such appointment by the members.
The Company has received written consent and certificate of eligibilitypursuant to the provisions of Sections 139 141 and other applicable provisions if any ofthe Companies Act and rules framed thereunder (including any statutory modification orre-enactment thereof for the time being in force) from M/s. Chaitanya C. Dalal & Co.Chartered Accountants.
The approval of the Members is sought by passing an OrdinaryResolution for ratification of the appointment of the Auditors upto the conclusion of the37th Annual General Meeting of the Company without the requirement of any furtherratification by the members in terms of Section 139 of the Companies Act 2013 and theCompanies (Audit & Auditors) Rules 2014 made thereunder as amended by the Companies(Amendment) Act 2017 and the Companies (Audit and Auditors) Amendment Rules 2018.
26. SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Companies Act 2013read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 the Board of Directors in its meeting re-appointed CS V. V. Chakradeo of M/s. V. V.Chakradeo & Co. Practicing Company Secretaries (FCS: 3382/ COP: 1705) to carry outthe audit of secretarial records of the Company. The consent of the Secretarial Auditor toundertake the secretarial audit for the financial year ended March 31 2018 has beenreceived by the Company.
The Secretarial Audit Report is annexed to this report as Annexure C.
27. STATUTORY AND SECRETARIAL AUDITOR OBSERVATION
The Statutory Auditors of the Company have not reported any fraud asspecified under the second proviso to Section 143(12) of the Companies Act 2013. Thereare no qualifications reservations or adverse remarks or disclaimers in the StatutoryAudit Report and Secretarial Audit Report.
28. EXTRACT OF THE ANNUAL RETURN
Pursuant to the provisions of Section 92(3) of the Act the extract ofthe Annual Return is given in the prescribed Form MGT 9 is annexed to this reportas Annexure D.
29. PARTICULARS OF EMPLOYEES
The disclosures required pursuant to Section 197(12) of the CompaniesAct 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 in respect of employees of the Company is provided asAnnexure - E to this report.
During the year under review the Company does not have any employeewho is drawing remuneration of Rs.10200000/- per annum or Rs.850000/- per month asstipulated in the Act and the rules made thereunder. Hence disclosures required underRule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 have not been provided.
30. CORPORATE GOVERNANCE
In compliance with Regulations 17 to 27 and 34 read with Schedule V ofSEBI Listing Regulations as applicable the Corporate Governance Report is given inAnnexure F and forms part of the Annual Report. The report is duly certified by theStatutory Auditors of the Company.
The certificate duly signed by the Managing Director on the financialStatements of the Company for the year ended March 31 2018 as submitted to the Board ofDirectors regarding compliance by the Board members and senior management personnel withCompany's Code of Conduct is also enclosed therewith.
31. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE
EARNINGS AND OUTGO
The particulars regarding Conservation of Energy and TechnologyAbsorption are not furnished since the Company is not a manufacturing entity. During thefinancial year under review the Company did not have any foreign exchange earnings andoutgo.
32. MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT
The Management Discussion and Analysis is annexed to this Report asAnnexure - G and forms the integral part of this report and covers amongst other mattersthe performance of the Company during the financial year under review as well as thefuture prospects.
33. OTHER DISCLOSURES
a. The Company has complied with the Secretarial Standards issued bythe Institute of Company
Secretaries of India on Meetings of the Board of Directors and GeneralMeetings;
b. The Statutory auditors and the Secretarial auditors of the Companyhave not reported any instances of fraud or irregularities as specified under Section143(12) of the Act read with Rule 13 of the Companies (Audit and Auditors) Rules 2014;
c. There were no significant and material orders passed by theRegulators / Courts which would impact the going concern status of the Company and itsfuture operation;
d. Maintenance of cost records u/s 148 of the Act is not required forthe company;
e. The Company does not have any scheme or provision of money for thepurchase of or subscription to its own shares by the employees/ Directors or by trusteesfor the benefit of the employees/ Directors.
34. GREEN INITIATIVE
As in the previous years this year too we are publishing only thestatutory disclosures in the print version of the Annual Report. Electronic copies of theAnnual Report 2017-18 and Notice of the 33rd Annual General Meeting are sent to allmembers whose email addresses are registered with the Company / Depository Participant(s).For members who have not registered their email addresses physical copies are sent in thepermitted mode.
The Board of Directors wish to place on record their gratitude for thevaluable guidance and continued support extended by the Securities Exchange Board ofIndia Reserve Bank of India Stock Exchanges Insurance Regulatory and DevelopmentAuthority of India Ministry of Corporate Affairs other government authorities Banks andother stakeholders. Your Directors would also like to take this opportunity to expresstheir appreciation for the dedicated efforts of the employees of the Company.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
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|Mukesh Babu || |
|Chairman || |
|DIN: 00224300 || |
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|Date: 10th August 2018 || |
|Place: Mumbai || |
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