DIRECTORS’ REPORT To, The Members Hybrid Financial Services Limited (Formerly known as Mafatlal Finance Company Limited) 1. Your Directors present the Twenty Ninth Annual Report with the Audited Statement of Accounts of the Company for the year ended 31st March 2016. 2. OPERATIONS The Financial Year 2015-2016 has ended with the company earning a profit of Rs. 71.09 Lacs after Tax mainly on account of Write Backs and Tax Refunds. The Company’s operations are still muted due to the uncertainties of business environment. The Company does not anticipate any significant revenue growth from operations in the coming years. 3. OUTLOOK The company is trying to undertake new Non - NBFC activities. Other operations have yielded an income of Rs.60.00 Lacs and Rs.30.00 Lacs as Rent. Company’s business is confined to attending to past issues from its earlier operations. 4. DIVIDEND The Board of Directors have recommended a Dividend of 1% on Preference Shares amounting to Rs.3.61 Lacs inclusive of Dividend Distribution Tax. However, no dividend is recommended on Equity Shares to conserve resources and inadequate profit. The Board of Directors have also approved Redemption of Preference Shares of Rs.60.00 Lacs. After redemption of these shares, the balance Preference Shares shall be redeemed in 4 yearly installments of Rs. 60 Lacs each subject to availability of Profits. 5. EXTRACT OF ANNUAL RETURN Extract of Annual Return in the prescribed Form MGT-9 is given as Annexure to this Director’s Report 6. BOARD MEETINGS The details of the Board Meetings held during the Financial Year 2015-2016 have been furnished under clause I 2(d) of the Corporate Governance Report forming a part of this Annual Report. 7. OTHER COMMITTEES The Company has constituted the following Committees: a. Audit Committee b. Nomination and Remuneration Committee c. Stakeholders’ Relationship Committee d. Risk Management Committee (Constituted on 22nd October 2014) The details regarding composition of the above Committees and the meetings held during the Financial Year 2015-2016 are given in the Corporate Governance Report forming a part of this Annual Report. 8. BOARD EVALUATION The evaluation of the Company’s Performance and that of Whole Time Directors was done by the by the Independent Directors. The Independent Directors have not communicated anything adverse. They have however desired that the issue of removal of suspension of Trading of Shares in the BSE to be attended and resolved. 9. PARTICULRS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES The details of Related Parties and the Transaction with them are disclosed as required by Accounting Standard - 18 issued by The Institute of Chartered Accountants of India under Note No. 21 III) 10 forming part of this Annual Report. Further the members may note that the Company has not entered into Contracts / Arrangements / Transactions which are not at arm’s length basis 10. TRANSFER TO RESERVES The Company has transferred an amount of Rs. 60.00 Lacs to Capital Redemption Reserve Account on account of redemption of 6,00,000 1% Redeemable Cumulative Preference Shares of Rs.10/- each 11. LISTING OF SHARES The Company has made an application to BSE for removal of suspension and Trading and Listing of the shares under the new name on 30th August 2011. The matter is being pursued. Though the Company is filing its returns to NSE as a measure of abundant caution as it is not proposing to list its share in the said Exchange as members have already approved the shares to be de-listed from the said Exchange in the year 2003 itself and accordingly de-listed from the said year. The Company’s ISIN remains suspended as new ISIN subsequent to Name Change and Reduction of Capital is not yet allotted. 12. PENALTIES AND OTHER LITIGATIONS Provident Fund Matter Provident Fund Department after conducting an enquiry Under Section 7A proceedings have made a demand of Rs. 21,06,154/- on the Company in year 2013-2014 based on a recalculation of dues on a Contractor for the period 2004-2011. The Company has contested and appealed against the same and obtained a stay from Employee Provident Fund Appellate Tribunal. 13. MAXIMUS SECURITIES LIMITED [Formerly known as MAFATLAL SECURITIES LIMITED (MSL) – SUBSIDIARY COMPANY] The Subsidiary Company has earned a net profit of Rs. 31.38 Lacs for the financial year ended 31st March, 2016. The Subsidiary Company is exploring various options to fare better in the current financial year. 14. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGOING The Company is not engaged in manufacturing activities therefore there is no information to submit in respect of conservation of energy and absorption of technology. Foreign Exchange Earnings: Nil Foreign Exchange Outgoings: Nil 15 DIRECTORATE The present tenure of Mr.N.R.Divate as Whole-time Director will end on 31st July 2016. The Remuneration Committee has already recommended the reappointment of Mr.N.R.Divate as Whole-time Director for a period of Five Years commencing from 1st August 2016. So Members are hereby requested to consider and approve his reappointment on the terms as per the resolution placed in the Annual General Meeting. Mr.N.R.Divate is interested in the said resolution. The Board of Directors also strongly recommend the same. 16. DEPOSITORIES Effective October 30, 2000, the equity shares of your Company have been mandated by Securities and Exchange Board of India for delivery only in dematerialized form for all investors. Your Company has already entered into arrangements with National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) for custody and dematerialization of shares in accordance with the Depositories Act, 1996. 17. E-VOTING In terms of the requirements of Listing, the Company has concluded an Agreement with Central Depository Services (India) Limited (CDSL) for E-Voting Facility for its Shareholders. 18. PARTICULARS OF EMPLOYEES There are no employees who are covered under Section 134(3) of the Companies Act, 2013 read with Companies (Particulars of Employees) Rules 1975. 19. WEBSITE OF THE COMPANY The Company maintains a website www.hybridfinance.co.in where detailed information of the Company are provided. 20. WHISTLE BLOWER MECHANISM The Company has a Whistle Blower Policy in place for vigil mechanism. The said policy has been implemented keeping in view of the amendments in the Companies Act, 2013 and Clause 49 of the Listing Agreement. 21. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY The Company has an adequate internal control system commensurate with the size of the Company and the nature of its business. The Internal Control System of the Company are monitored and evaluated by Internal Auditor and his Audit Reports are periodically reviewed by the Audit Committee of the Board of Directors. The observations and comments of the Audit Committee are placed before the Board. 22. DIRECTOR’S RESPONSIBILITY STATEMENT As required under section 134(3)(c) of the Companies Act, 2013 the Directors hereby confirm that: i. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; ii. the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year; iii. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv. that the Directors have prepared the Annual Accounts on a going concern basis. 23. CORPORATE GOVERNANCE Pursuant to the Listing Agreement with the Stock Exchanges, Management Discussion & Analysis and Corporate Governance Report are made a part of the Annual Report 24. SECRETARIAL AUDITOR The Board of Directors have appointed Mr. Vijay S.Tiwari, a practising Company Secretary, as Secretarial Auditor for the Financial Year 2015-2016. 25. ACKNOWLEDGEMENTS Your Directors wish to thank and place on record their appreciation of the valuable support given by Company’s Customers, Shareholders and Bankers. FOR AND ON BEHALF OF THE BOARD K. CHANDRAMOULI Whole Time Director and Company Secretary Place : Mumbai Date : 24th May 2016 |