MYSTIC ELECTRONICS LIMITED
Your Directors have pleasure in presenting the 6th Annual Report along with theAudited Accounts for the Financial Year ended March 31 2017.
1. FINANCIAL PERFORMANCE OF THE COMPANY
(Rs. In Lacs)
|PARTICULARS ||Year ended March 31 2017 ||Year ended March 31 2016 |
|Profit before interest depreciation tax and Extra Ordinary Items ||(192.88) ||83.70 |
|Less: Depreciation/amortization ||1.37 ||0.28 |
|Profit before interest tax and Extra Ordinary Items ||(194.25) ||83.42 |
|Less: Finance Costs ||2.58 ||0.50 |
|Profit before tax and Extra Ordinary Items ||(196.83) ||82.88 |
|Less: Provision for taxes on income || || |
|--Current tax ||2.52 ||24.50 |
|--Deferred tax liability / (asset) ||1.12 ||1.06 |
|Profit before Extra Ordinary Items ||(200.47) ||57.30 |
|Extra Ordinary Items (Net of Tax) ||- ||- |
|Profit for the year ||(200.47) ||57.30 |
2. STATE OF COMPANY'S AFFAIRS
Your Directors regret to report that the company has resulted to incur losses amountingto Rs. 20046926/- in the financial year under review as compared to profit earnedduring the previous financial year.
Considering the uncertain market situation and financial difficulties and to scale downthe business the management decided to disengage from Naaptol venture during thefinancial year under review after completion of the other endeavors. The directors of yourcompany have been exploring other prospective growth avenues so as to restore theCompany's financial position.
3. DIVIDEND & RESERVES
Your Directors do not recommend any dividend for the year ended 31st March 2017and noamount was transferred to Reserves
4. SHARE CAPITAL
The paid up Equity Share Capital as on 31st
March 2017 is Rs. 197662480/- (Rupees Nineteenth Crores Seventy-Six Lakh Sixty-TwoThousand Four Hundred and Eighty Only) divided into 19766248 (One Crore Ninety-SevenLakh Sixty-Six Thousand Two Hundred and Forty-Eight) Equity Shares of the face value ofRs. 10/- each. During the year under review the Company has not issued any shares with orwithout differential voting rights. It has neither issued employee stock options nor SweatEquity Shares and does not have any scheme to fund its employees to purchase the shares ofthe Company.
In accordance with the provisions of Section 152 of the Act and in terms of Articles ofAssociation of the Company Mr. Krishan Khadaria Director of the Company retires byrotation at the forthcoming Annual General Meeting (AGM) and being eligible offershimself for re appointment.
During the year under review Ms. Madhumati Gawade resigned as a Director of theCompany w.e.f. 27th January 2017. The Board has placed on record its deep appreciationfor the valuable contribution made by him during his tenure of office.
Pursuant to Sections 149 and 161 of the Companies Act 2013 and in terms of SEBI (Listing Obligation and Disclosure Requirements) Regulation 2015 the Board of Directorshad at its meeting held on 14th February 2017 appointed Ms. Kartikee Yadav as anAdditional Director of the Company w.e.f 14th February 2017. The requisite resolution forapproval of her appointment as Director is being proposed in the notice of the ensuing AGMfor the approval of the members.
None of the Directors are disqualified from being appointed as Directors as specifiedin section 164 of Companies Act 2013.
6. STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS
All the Independent Directors of your Company have given the certificate ofindependence to your Company stating that they meet the criteria of independence asmentioned under Section 149(7) of the Companies Act 2013. In the opinion of the Boardthey fulfill the conditions of independence as specified in the Act and the Rules madethere under and are independent of the management. The details of training andfamiliarization programmes and Annual Board Evaluation process for Directors have beenprovided under the Corporate Governance Report.
7. KEY MANAGERIAL PERSONNEL
During the year under review the Board has appointed Ms. Manisha Swami as CompanySecretary of the Company with effect from 27th January 2017.
8. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134 of the Act the Board of Directors to thebest of their knowledge and ability confirm that:
a) in the preparation of the annual financial statements for the year ended 31st March2017 the applicable Accounting Standards had been followed along with proper explanationrelating to material departures if any;
b) for the financial year ended 31st March 2017 such accounting policies as mentionedin the Notes to the financial statements have been applied consistently and judgments andestimates that are reasonable and prudent have been made 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 theLoss of the Company for the financial year ended 31st March 2017;
c) that proper and sufficient care has been taken 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;
d) the annual financial statements have been prepared on a going concern basis; e) thatproper internal financial controls were followed by the Company and that such internalfinancial controls are adequate and were operating effectively;
f) that proper systems have been devised to ensure compliance with the provisions ofall applicable laws were in place and that such systems were adequate and operatingeffectively.
9. MEETINGS OF THE BOARD
During the year under review 6 (Six) meetings of the Board of Directors were held. Fordetails of the meetings of the board please refer to the Corporate Governance Reportwhich forms part of this report.
10. COMMITTEES OF THE BOARD
Pursuant to requirement under Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board of Directors has constituted variouscommittees of Board such as Audit Committee Nomination & Remuneration Committee andStake Holders Relationship Committee. Details of composition terms of reference numberof meetings held for respective committees and details of the familiarization programmesfor Independent Directors are given in the Report on Corporate Governance which formspart of this Report.
11. DETAILS OF SUBSIDIARY/JOINT
VENTURES/ ASSOCIATE COMPANIES
Your Company does not have any subsidiary joint ventures and associate company for theyear ended 31st March 2017.
12. EMPLOYEE STOCK OPTION SCHEME
Presently the Company does not have a scheme for grant of stock options to itsemployees.
13. PARTICULARS OF EMPLOYEES
The information as per the provisions of Section 197(12) of the Act read with Rule 5(2)and 5(3) of the Rules forms part of this Report. However as per first proviso to Section136(1) of the Act and second proviso of Rule 5(2) of the Rules the Report and FinancialStatements are being sent to the Members of the Company excluding the statement ofparticulars of employees under Rule 5(2) and 5(3) of the Rules. Any Member interested inobtaining a copy of the said statement may write to the Company Secretary at theRegistered Office of the Company.
The statement of Disclosure of Remuneration under Section 197(12) of the Act read withthe Rule 5 (1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 ("Rules") is mentioned below.
Statement of Disclosure of Remuneration under Section 197 of Companies Act 2013 andRule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014:
1. The Ratio of the remuneration of each director to the median remuneration of theemployees of the company for the Financial Year 2016-17: Not applicable as your Companyis not providing any remuneration to the Directors of the company.
2. Percentage increase in remuneration of each Director CFO and Company secretary :
No Sitting fees or remuneration was paid to the Directors & there was no incrementduring the financial yea r in the remuneration of CFO & Company Secretary.
3. The percentage increase in the median remuneration of employees in the FinancialYear 2016 -17: During the Financial Year under review your company has not made anyincrease in the salary of the employee.
4. The number of permanent employees on the rolls of company: Four (as on 31stMarch 2017)
5. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:
Not applicable as the Company has not increased the salary of any of the employee otherthan key managerial personnel during the last financial year. There are no otherexceptional circumstances for increase in the remuneration of key managerial personnel andincrease in remuneration has been in accordance with the Company's policies.
6. It is hereby affirmed that the remuneration paid during the year is as per theRemuneration Policy of the Company.
14. SEXUAL HARASSMENT OF WOMEN AT
W O R K P L A C E ( P R E V E N T I O N PROHIBITION AND REDRESSAL) ACT 2013
Your Company has in place a formal policy for prevention of sexual harassment of itswomen employees in line with "The Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.
During the year under review there were no complaints filed pursuant to the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
15. CONSERVATION OF ENERGY AND
Since the Company is neither engaged in any manufacturing activity nor the Company hasany manufacturing unit therefore there prescribed particulars with regards to complianceof rules relating to conservation of Energy and Technology absorption pursuant to Section134 (3) (m) of the Companies Act 2013 read with Rule - 8 (3) of the Companies (Accounts)Rules 2014 are not applicable on your Company.
16. FOREIGN EXCHANGE EARNINGS AND
During the period under review there was no foreign exchange earnings or out flow.
During the year under review your Company has not invited or accepted any depositsfrom the public in terms of Chapter V of the Companies Act 2013 and no amount ofprincipal or interest was outstanding in respect of deposits from the public as on thedate of balance sheet.
18. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The details of loans and Investments covered under section 186 of the Companies Act2013 read with the Companies (Meetings of Board and its Powers) Rules 2014 for thefinancial year 2016-17 are given in the Notes on financial statement referred to in theAuditors' Report.
19. RELATED PARTY TRANSACTIONS
Pursuant to Regulations 23 of SEBI (Listing Obligation and Disclosure Requirements)Regulations 2015 the Company has adopted a policy on Related Party Transactions. Thepolicy is available on the Company website viz. www.mystic-electronics.com on theInvestors page under the section titled 'Policies'. The same may also be accessed throughthe link given below: http://www.mystic-electronics.com/investors.html.
During the year under review the Company had entered into a material related partytransaction with Kashish Multi Trade Pvt Ltd as per Regulation 23 of SEBI (ListingObligation and Disclosure Requirements) Regulations 2015 and details of which is given inthe notes to the financial statement and further along with the material related partytransaction with the above party no other transactions has been entered other thanordinary course of business and at arm's length basis. Further the disclosure of materialrelated party transaction pursuant to Section 134(3) (h) of the Companies Act 2013 inForm AOC-2 does not apply to the company.
Prior omnibus approval of the Audit committee is obtained on a yearly basis specifyingthe upper ceiling as to amount for the transactions which are of foreseen and repetitivenature.
20. STATUTORY AUDITORS & AUDITORS' REPORT
Pursuant to the provisions of section 139 of the Act and the rules framed thereafter M/s.Bansal Bansal & Company Chartered Accountants (Registration No. 100986W) wereappointed as statutory auditors of the Company from the conclusion of the 4th annualgeneral meeting (AGM) of the Company held on 30th September 2015 till the conclusion ofthe 9th AGM to be held in the year 2019-20 subject to ratification of their appointmentat every AGM.
The Auditors' Report on the financial statements of the Company for the year ending31st March 2017 is unmodified i.e. it does not contain any qualification reservation oradverse remark. The Notes on financial statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report isenclosed with the financial statements forming part of the annual report.
21. SECRETARIAL AUDITORS& AUDITORS' REPORT
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies
( A p p o i n t m e n t a n d R e m u n e r a t i o n o f Managerial Personnel) Rules2014 the Company has appointed Mr. Shivhari Jalan a Practicing Company Secretaryto 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 annexedherewith as "Annexure III."
The responses of your Directors on the observations made by the Secretarial Auditor areas follows:-
Response to point no.1:
The observation is itself self explanatory and the management is committed tostreamline in future.
Response to point no. 2 3 & 4:
The company files necessary documents with Stock Exchange in conformity with SEBI(Listing Obligation and Disclosure Requirement) Regulation 2015. However there were fewdelays due to administrative reasons during t h e y e a r u n d e r r e v i e w w h i ch t h e management is committed to streamline in future.
Further with respect to notice from SEBI your company is in the process to reply thesaid notice in consultation with our legal advisor.
22. CORPORATE GOVERNANCE
Your Company is in compliance with the Corporate Governance guidelines as laid out inthe Securities Exchange Board of India ( Listing Obligations and Disclosure Requirements)Regulations 2015 (SEBI Listing Regulations). All the Directors and the Senior Managementpersonnel have affirmed in writing their compliance with and adherence to the Code ofConduct adopted by the Company.
The Certificate on Corporate Governance received from the statutory auditors M/s.Bansal Bansal & Co. is enclosed as
The Chief Executive Officer/Managing Director/Manager & Chief Financial Officer(Manager/CFO) certification as required under the SEBI Listing Regulations is attached as "ANNEXUREVI" to this Report.
23. EXTRACT OF ANNUAL RETURN
The extract of Annual Return as on 31st March 2017 in the prescribed form MGT.9pursuant to section 92(3) of the Companies Act 2013 and Rule 12 (1) of the Companies(Management and Administration) Rules 2014 is attached herewith as Annexure - IV.
24. CORPORATE SOCIAL RESPONSIBILITIES INITIATIVES
The prerequisite in terms of Section 135 of the Companies Act 2013 of corporate socialresponsibility does not apply to the Company.
25. INTERNAL CONTROL SYSTEMS
The Company has adequate and robust Internal Control System commensurate with thesize scale and complexity of its operation. The Internal Control System is placed tosafeguard and protect from loss unauthorized use or disposition of its assets. All thetransactions are properly authorized recorded and reported to the Management. InternalAudit is carried out in a programmed way and follow up actions were taken for all auditobservations. Your Company's Statutory
Auditors have in their report confirmed the adequacy of the internal controlprocedures.
26. MANAGEMENT DISCUSSION AND
As required under Regulation 34 (3) of the SEBI (Listing Obligation and DisclosureRequirements) Regulations 2015 a detailed Management Discussion and Analysis Report hasbeen given separately forming part of the Annual Report as Annexure-II.
27. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a vigil mechanism called "Whistle Blower Policy" with a viewto provide a mechanism for Directors and employees of the Company to raise concerns of anyviolations of any legal or regulatory requirement incorrect or misrepresentation of anyfinancial statement and reports etc. The Policy provides adequate safeguards againstvictimization of Director(s)/ employee(s) and direct access to the Chairman of the AuditCommittee in exceptional cases.
Your Company hereby affirms that no Director/ employee have denied accessing theChairman of the Audit Committee and that no complaints were received during the year. Thedetails of the Policy have been posted on the Company's website(www.mystic-electronics.com)
28. PERFORMANCE EVALUATION OF THE BOARD
Pursuant to applicable provisions of the Companies Act 2013 and the SEBI (ListingObligation and Disclosure Requirements) Regulations 2015 the Board in consultation withits Nomination & Remuneration Committee has formulated a framework containing interalia the criteria for performance evaluation of the entire Board of the Company itscommittees and individual directors including independent Directors.
The independent directors had met separately without the presence of Non-Independentdirectors and the members of management and discussed inter alia the performance ofNon-Independent directors and Board as a whole. The criteria for performance evaluationhave been detailed in the Corporate Governance Report which is annexed and forms part tothis Report.
The Nomination and Remuneration committee has also carried out evaluation ofperformance of board of Director as a whole.
29. DIRECTORS' APPOINTMENT AND REMUNERATION POLICY
Pursuant to the requirement under Section 134(3) (e) and 178 (3) of the Companies Act2013 the policy on directors' appointment and remuneration including criteria fordetermining qualifications positive attributes independence of a director and the policyon remuneration of directors KMP and other employees which forms part of this report.
Revocation of Suspension from Trading in Equity of the Company
Your Company is listed on BSE Limited and its shares were suspended from trading at theExchange with effect from 27th August 2015 by the order which was passed by ManagingDirector & Chief Executive Officer of BSE limited for Surveillance & Supervisionpurpose.
Further your Company states that it has received the order of resumption of tradingwith effect from 21st November 2016 from the BSE Limited after the submission of all therequired documents.
Also your Company has duly paid the Listing fees for the financial year 2017-18.
31. MATERIAL CHANGES AND COMMITMENTS
There are no material changes and commitments affecting the financial position of theCompany between the end of the financial year of the Company i.e. 31st March 2017 andthe date of this Report.
32. SIGNIFICANT AND MATERIAL ORDERS
PASSED BY REGULATORS / COURTS / TRIBUNALS
The Company has received order for "Resumption of trading in the Equity Shares ofMystic Electronics Limited" from Senior Manger- Listing Operation of BSE Limited on16th November 2016.
Except for the over said order there are no significant/ material orders passed by theRegulators /Courts / Tribunals which would impact the going concern status of the Companyand its future operations.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
i) Issue of equity shares with differential rights as to dividend voting or otherwise.
ii) No change in nature of business.
Your Directors express deep sense of appreciation to the members investors bankersservice providers customers and other business constituents for their continued faithabundant assistance and cooperation extended to the Company.Your Directors would like tomake a special mention of the support extended by the various Departments of Government ofIndia the State Governments particularly the Tax Authorities the Ministry of CommerceMinistry of Corporate Affairs Securities and Exchange Board of India and others and lookforward to their continued support in all future endeavors'.
Your Directors also sincerely appreciate the high degree of professionalism commitmentand dedication displayed by employees at all levels thereby contributing largely to thegrowth and success of the Company.
By and on behalf of the Board For Mystic Electronics Limited
(Formerly known as Pearl Electronics Limited)
|Sd/- ||Sd/- |
|Krishan Khadaria ||Manoj Bhatia |
|Director ||Director |
|DIN: 00219096 ||DIN: 01953191 |
401/A Pearl Arcade Opp. P. K. Jewellers
Dawood Baug Lane Off J. P. Road
Andheri (West) Mumbai - 400 058
Dated: 23rd August 2017