MYSTIC ELECTRONICS LIMITED
Your Directors are pleased to present the 8th Annual Report along with the AuditedAccounts for the Financial Year ended 31st March 2019.
1. FINANCIAL PERFORMANCE OF THE COMPANY
(Rs. In Lakhs)
|Particulars ||Year ended 31st March 2019 ||Year ended 31st March 2018 |
|Profit/(Loss) before interest depreciation tax and Extra Ordinary Items ||5.981 ||(384.08) |
|Less: Depreciation/amortization ||0.277 ||0.92 |
|Profit/(Loss) before interest tax and Extra Ordinary Items ||5.704 ||(385.00) |
|Less: Finance Costs ||12.576 ||2.40 |
|Profit/(Loss) before tax and Extra Ordinary Items ||(6.872) ||(387.40) |
|Less: Provision for taxes on income || || |
|--Current tax ||- ||- |
|--Deferred tax liability / (asset) ||(0.077) ||0.37 |
|Profit/(Loss) before Extra-Ordinary Items ||(6.795) ||(387.77) |
|Extra Ordinary Items (Net of Tax) ||- ||- |
|Profit/ (Loss) for the year ||(6.795) ||(387.77) |
|Other Comprehensive Income ||(153.89) ||(364.09) |
|Total Comprehensive Income for the year ||(160.68) ||(751.86) |
2. STATE OF COMPANY'S AFFAIRS
Your Directors regret to report that the company has continued to incur lossesamounting to Rs. 679536/- after Tax in the financial year under review as compared tolosses incurred during the previous financial year.
Due to losses in the previous years your directors are striving to recover the lossesand have been exploring the 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 2019 and noamount was transferred to Reserves.
4. SHARE CAPITAL
The paid up Equity Share Capital as on 31st March 2019 is Rs. 197662480/- (RupeesNineteen Crores Seventy-Six Lakhs Sixty-Two Thousand Four Hundred and Eighty Only) dividedinto 19766248 (One Crore Ninety-Seven Lakh Sixty-Six Thousand Two Hundred andForty-Eight) Equity Shares of the face value of Rs. 10/- each. During the year underreview the Company has not issued any shares with or without differential voting rights.It has neither issued employee stock options nor Sweat Equity Shares and does not have anyscheme to fund its employees to purchase the shares of the Company.
5. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
Director retires by rotation:
In accordance with the provisions of Section 152 of the Companies Act 2013 and interms of Articles of Association of the Company Mrs. Asha Khadaria Director of theCompany retires by rotation at the forthcoming Annual General Meeting (AGM) and beingeligible offers herself for re-appointment. Your Directors recommend her re-appointmentas Director of the Company.
Appointment and cessation of Directors during the year:
During the year under review in pursuance with the provisions of Section 149 161 andother applicable provisions of the Companies Act 2013 and in terms of SEBI (ListingObligation and Disclosure Requirements) Regulation 2015 the Board of Directors had atits meeting held on 12th April 2018 & 30th May 2018 appointed Mr. Harpreet SinghKohli & Mrs. Niraali Santosh Thingalaya as an Additional Director of the Companyrespectively in Non-Executive Independent Director's Category with immediate effect andwhose term was upto the 7th AGM. But due to some personal reasons Mr. Kohli tendered hisresignation to the Board from the post of Additional Director with effect from 20th April2018.
Further the requisite resolution for approval of Mrs. Thingalaya's appointment as anIndependent Director for the term of 5 Consecutive Years has been proposed in the noticeof 7th AGM for the approval of the members which was held on 29th September 2018 and herterm of appointment commenced from 30th September 2018 to 29th September 2023. Pursuantto the provisions of the Companies Act 2013 the members at 3rd AGM of your Company whichwas held on 30th September 2014 had appointed Mr. Manoj Bhatia as an Independent Directorto hold office for 5 (five) consecutive years for a term up to 31st March 2019. Mr. ManojBhatia is eligible for the re-appointment as Independent Director for second term of up to5 (five) consecutive years. Thus in terms with the applicable statutory provisions andbased on the recommendation of the Nomination and Remuneration Committee the Boardrecommends for the approval of the members through a Special Resolution at the 8th AGM ofyour Company the re-appointment of Mr. Bhatia as an Independent Directors for a secondterm of 5 (five) consecutive years from 1stApril 2019 to 31st March 2024. The Companyhas received necessary declaration from each Independent Director under Section 149(7) ofthe Companies Act 2013 that he/she meets the criteria of independence laid down inSection 149(6) of the Companies Act 2013 and Regulation 25 of the Listing Regulations.
Appointment and Cessation of Key Managerial Personnel (KMP) during the year:
During the year under review there was no appointment & cessation of KMP on Boardof the Company.
Information regarding the directors seeking appointment/ re-appointment:
The Resume/ Profile and other information regarding the directors seekingappointment/re-appointment as required by the Regulation 36(3) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 & SS-2 of ICSI have beengiven in the Notice convening the 8th AGM of the Company.
In terms of Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements)Regulation 2015 the Company periodically organizes a program in order to familiarizeIndependent Directors with the Company's operations. The details of familiarizationprogramme have been posted on the website of the Company under the web link:http://www.mystic-electronics.com/investors.html.
Key Managerial Personnel:
As on date Mr. Rajesh Agrawal CFO Mr. Mohit Khadaria Managing Director & Miss.Manisha Swami Company Secretary are the KMPs of the Company.
None of the Directors are disqualified from being appointed as Directors as specifiedin section 164 of Companies Act 2013.
After the closure of financial year under review Mr. Tarun Keram who is anIndependent Director on the Board of the Company has tendered his resignation to the Boardof Directors of the Company with effect from 30th August 2019. The Board has dullyaccepted approved and took the same on record.
6. COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has complied with the applicable mandatory Secretarial Standards issued bythe Institute of Company Secretaries of India.
7. 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 accounts for the year ended 31st March 2019 theapplicable Accounting Standards have been followed and there is no material departures;
b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent affairs of the Company atthe end of the astogive trueand view thestate financial year and of the profit of theCompany for that period;
c) they have taken proper and sufficient care for the maintenance of the provisions ofthe Companies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;
d) they have prepared the annual accounts for the financial year ended 31st March 2019on a going concern basis;
e) they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively; and
f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
8. MEETINGS OF THE BOARD
During the year under review 7(Seven) meetings of the Board of Directors were held.For details of the meetings of the board please refer to the Corporate Governance Reportwhich forms part of this report.
9. 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:
a) Audit Committee;
b) Nomination & Remuneration Committee; and
c) Stake Holders Relationship Committee.
The details with respect to the composition powers roles terms of reference numberof meetings held attendance at the meetings etc. of statutory committees are given indetail in the Corporate Governance Report which forms part of this Report.
10. DETAILS OF SUBSIDIARY/JOINT VENTURES/ ASSOCIATE COMPANIES
Your Company does not have any subsidiary joint ventures and associate company for theyear ended 31st March 2019.
11. EMPLOYEE STOCK OPTION SCHEME
Presently the Company does not have a scheme for grant of stock options to itsemployees.
12. 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 2018-19: 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 : Duringthe year under review No Sitting fees or remuneration was paid to the Directors &percentage increase in the salary of CFO (Mr. Rajesh Agrawal) is 13.33% and CompanySecretary (Miss Manisha Swami) is 23.72%.
3. The percentage increase in the median remuneration of employees in the FinancialYear 2018-19: During the year under review the median remuneration is Rs. 5.63 lakhsp.a. and the percentage increase in median remuneration of employee is 23.72%.
4. The number of permanent employees on the rolls of company: Three (as on 31stMarch 2019)
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 employeeother than 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.
13. SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION 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 filedpursuant to the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
Your Company has adopted a Policy under the provisions of the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013. The constitution ofInternal Complaints Committee under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 is not applicable on your Company andthere were no complaint about sexual harassment during the year under review.
14. CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
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.
15. FOREIGN EXCHANGE EARNINGS AND OUT-GO
During the period under review there were 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.
17. 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 2018-19 are given in the Notes on financial statement.
18. RELATED PARTY TRANSACTIONS
In line with the requirements of the Act and SEBI (Listing Obligation and DisclosureRequirements) Regulations 2015 your Company has formulated a policy on related partytransactions which is available on Company's website at http://www.mystic-electronics.com/pdfs/policy%20on%20related%20party%20transactionpdf.
Omnibus approval was obtained for related party transactions which are of repetitivenature and entered in the ordinary course of business and at arm's length basis. Pursuantto Regulation 23 of the SEBI (Listing Obligation and Disclosure Requirements) Regulations2015 all related party transactions were placed before the Audit Committee for theirreview and approval.
During the year under review in terms with the provisions of Regulation 23 of SEBI(Listing Obligation and Disclosure Requirements) Regulations 2015 the Company hadentered into material related party transactions with M/s. Nouveau Global Ventures Limited& M/s. Mukta Agriculture Ltd and details of which is given in the notes to theFinancial Statement and those transactions were in ordinary course of business and onarm's length basis.
Further the disclosure of material related party transactions pursuant to Section134(3) of Companies Act 2013 in Form AOC-2 is not applicable to the Company.
The related party disclosures as specified in Para A of Schedule V read with Regulation34(3) of the Listing Regulations are given in the Financial Statements.
19. 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 for the period of 5 years from theconclusion of the 4th Annual General Meeting (AGM) held on 30th September 2015 till theconclusion of the 9th AGM.
In accordance with the Section 40 of the Companies (Amendment) Act 2017 theappointment of Statutory Auditors is not required to be ratified at every AGM. Thus M/s.Bansal Bansal & Company will of 9thAGM.
The Auditor's Report on financial statements is a part of this Annual Report. There hasbeen no qualification reservation adverse remark or disclaimer given by the Auditors intheir Report. During the year the Statutory & Internal Auditors had not reported anymatter under Section 143(12) of the Companies Act 2013 therefore no detail is requiredto be disclosed under Section 134(3)(ca) of the Companies Act 2013.
20. SECRETARIAL AUDITORS & AUDITORS' REPORT
Pursuant to the provisions of Section 204 of the Act Mr. Shivhari Jalan a PracticingCompany Secretary had been appointed to undertake the secretarial audit of the Company forthe financial year 2018-19. The Secretarial Audit Report is annexed herewith as ANNEXUREI which forms an integral part of this report.
During the year the Secretarial Auditors had not reported any matter under Section143(12) of the Act therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.
The responses of your Directors on the observations made by the Secretarial Auditor areas follows:-
Response to observation no.1:
The observation is itself self-explanatory and the management is committed tostreamline in future. In regards with the ratification of the same the Board has placedbefore the members of the Company for the approval of existing material related partytransactions entered by and between the related parties during the Financial Year underreview.
21. CORPORATE GOVERNANCE
In compliance with the Regulation 34 read with Schedule V of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 a detailed report on CorporateGovernance is given as Annexure and forms an integral part of this Annual Report. ACertificate from the statutory auditors M/s. Bansal Bansal & Co confirming complianceof the conditions of Corporate Governance as stipulated under the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 is appended of the CEO/MD andCFO to the Corporate Governance of the Company in terms Report. ACertificateof Regulation 17(8) of the Listing Regulations is forming part of corporate GovernanceReport.
22. EXTRACT OF ANNUAL RETURN
Pursuant to Section 92(3) of the Companies Act 2013 read with Rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of the Annual Return ofthe Company in Form MGT-9 forms an integral part of this report as Annexure II. TheAnnual Return as referred in Section 134(3)(a) of the Companies Act 2013 for thefinancial year ended 31st March 2019 shall be placed on the website of the Company atwww.mystic-electronics.com.
23. 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.
24. 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 theadequacy of the internal control procedures.
25. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As required under Regulation 34 (3) of the SEBI (Listing Obligation and DisclosureRequirements) Regulations 2015 a detailed Management Discussion and Analysis Report havebeen given separately forming part of the Annual Report.
26. VIGIL MECHANISM / WHISTLE BLOWER POLICY
Your Company has formed a Whistle Blower Policy for establishing a vigil mechanism fordirectors and employees to report genuine concerns regarding unethical behavior andmismanagement if any. The said mechanism also provides for strict confidentialityadequate safeguards against victimization of persons who provision for direct access tothe chairperson of the Audit Committee in appropriate cases. No personnel have been deniedaccess to the Audit Committee pertaining to the Whistle Blower Policy.
The said Whistle Blower Policy has been disseminated on the Company's website athttp://www.mystic-electronics.com/ investors.html.
27. PERFORMANCE EVALUATION OF THE BOARD
Pursuant to the provisions of Section 134(3) Section 149(8) and Schedule IV of the Actread with SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015 AnnualPerformance Evaluation of the Board the Directors as well as Committees of the Board hasbeen carried out. The performance evaluation of all the Directors and the Board as a wholewas conducted based on the criteria and framework adopted by Nomination & RemunerationCommittee details of which are provided in the Corporate Governance Report.
The performance evaluation of the Independent Directors was carried out by the entireBoard and the performance evaluation of the Non-Independent Directors was carried out bythe Independent Directors in their separate meeting. The Board of Directors expressedtheir satisfaction with the evaluation process.
28. RISK MANAGEMENT
The Board of Director of the Company has made risk Management policy which requiredthem to aware the shareholder of the Company regarding Development and implementation ofRisk management plan for the Company including identification therein of element of riskif any which in their opinion might threaten the existence of the Company the Managementplan to mitigate the same and ensuring its effectiveness. The Audit Committee hasadditional oversight in the area of financial risk and control. The Details of the policyhave been posted on the Companies websitewww.mystic-electronics.com
29. DIRECTORS' APPOINTMENT AND REMUNERATION POLICY
The Board of Directors has framed a Policy which lays down a framework in relation toremuneration of Directors KMP and other employees of the Company. The salient features ofthis Policy is given in the Corporate Governance Report. On the recommendation ofNomination and Remuneration Committee the Board of Directors of the Company at theirmeeting held on 29th March 2019 have amended the Remuneration Policy of the Company. Theamended Policy have been made effective from 1st April 2019. The said Policy is availableon the Company's website athttp://www.mystic-electronics.com/investors.html.
Shares of your Company are continued to be listed on BSE Limited. Listing fees hasalready been paid for the financial year 2019-20.
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 2019 andthe date of this Report.
32 COST RECORDS AND COST AUDIT
In accordance with section 148(1) of the Companies Act 2013 the provisionrelating to maintenance of cost records and requirement of cost audit are not applicableto the company during the year under review due to business activities carried out by thecompany.
33. SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS/COURTS/TRIBUNALS
There are no significant or material orders passed by the Regulators or Courts orTribunals which impacts the going concern status of the Company and 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.
35. GREEN INITIATIVES
The Company supports and pursues the 'Green Initiative'' of the Ministry ofCorporate Affairs Government of India. The Company has effected electronic delivery ofNotice of Annual General Meeting and Annual Report to those Members whose e-mail IDs wereregistered with the Company/ Depository Participants. The Companies Act 2013 and theunderlying rules as well as Regulation 36 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 permit the dissemination of financial statements andannual report in electronic mode to the Members.
For members who have not registered their email addresses physical copies are sent inthe permitted mode. Your Directors are thankful to the Members for actively participatingin the Green Initiative and seek your continued support for implementation of the greeninitiative.
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 to make a special mention of the support extended by thevarious Departments of Government of India the State Governments particularly the TaxAuthorities the Ministry of Commerce Ministry of Corporate Affairs Securities andExchange Board of India and others and look forward to their continued support in allfuture 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 |
| ||Krishan Khadaria ||Mohit Khadaria |
| ||Director ||Managing Director |
| ||DIN: 00219096 ||DIN: 05142395 |
|Registered Office: || || |
|401/A Pearl Arcade Opp. P. K. Jewellers || || |
|Dawood Baug Lane Off J. P. Road || || |
|Andheri (West) Mumbai 400 058 || || |
|Place: Mumbai || || |
|Dated: 30th August 2019 || || |