MORARKA FINANCE LIMITED
The Directors are pleased to present their report to the members together with theaudited financial statements of the Company for the year ended 31st March2017.
1. FINANCIAL RESULTS:
| ||For the year Ended 31/03/2017 ||For the year Ended 31/03/2016 |
|Profit / (Loss) before tax ||2651038 ||172923 |
|Less : Provision for taxation for the year ||5068 ||- |
|Provision for taxation earlier year ||9298 ||- |
|Deferred Tax ||822083 ||73375 |
|Fringe Benefit Tax ||- ||- |
|Profit / (loss) after tax ||1814589 ||99548 |
|Add : Balance b/f from previous years ||36757489 ||36657941 |
|Amount available for Appropriation ||38572078 ||36757489 |
|Appropriations: || || |
|Proposed Dividend : || || |
|- On Equity Shares ||- ||- |
|Additional Dividend Tax ||- ||- |
|Balance Carried over to next year ||38572078 ||36757489 |
| ||38572078 ||36757489 |
2. FINANCIAL PERFORMANCE:
For the financial year ended March 31 2017 your company has posted Profits of ' 18.15lakh compare to the profit for the financial year ended March 31 2016 of ' 1.00 lakh.Hence compare to previous year the company's profits have jumped 18 times postingsignificant improvements in bottomline growth.
3. SUBSIDIARIES COMPANIES:
Your company has no subsidiaries.
Your directors have not recommended any dividends in view of meagre profits made by thecompany during the year.
5. SHARE CAPITAL:
The paid up Equity Capital of your company as at March 31 2017 was ' 45021000. Thecompany has not issued any shares with differential voting rights and it has not grantedany stock options or sweat equity during the period under the review. Further none of thedirectors of the company hold instruments convertible into equity shares of the company.
Pursuant to section 149 of the Companies Act 2013 read with schedule IV and Articlesof the company Ms. Priyanka Morarka and Shri G. R. Morarka Directors retire by rotationand being eligible offer themselves for re-appointment. The company has receiveddeclarations from all the independent directors of the company confirming the fact thatthey meet the criteria of independence mentioned under section 149(6) of the CompaniesAct 2013.
7. CORPORATE SOCIAL RESPONSIBILITY:
The company is not falling in the purview of criteria specified in section 135(1) ofthe Companies Act 2013 and hence the requirements pertaining to section 135 of theCompanies Act 2013 is not applicable to the company.
8. HUMAN RESOURCES:
The company is having five directors VP & chief executive officer chief financeofficer and company secretary being key managerial personnel under section 203 of theCompanies Act 2013. All are experts in their relevant fields. Company's well- disciplinedworkforce which has served the company for years lies at the very foundation of thecompany's major achievements.
9. BUSINESS RISK MANAGEMENT:
Over the period of time company has been following the principle of risk minimizationas is the norm in every sector it is a gist for company growth and long term survival inthis competitive cosmos. The Board members were informed about risk assessment andminimization procedures after which the Board formally accepted steps for framingimplementing and monitoring the risk management plan for the company. The main objectiveof this policy is to ensure sustainable business growth with stability and to promote apro-active approach in reporting evaluating and resolving risks associated with thebusiness. In order to achieve the key objective the policy establishes a structured anddisciplined approach to Risk Management in order to guide decisions on risk relatedissues. In today's challenging and competitive environment strategies for mitigatinginherent risks in accomplishing the growth plans of the Company are imperative. The commonrisks inter alia are: Regulations competition Business risk Technology obsolescenceInvestments retention of talent and expansion of facilities. Business risk inter-aliafurther includes financial risk political risk fidelity risk legal risk.
As a matter of policy these risks are assessed and steps as appropriate are taken tomitigate the same.
10. SYSTEM OF INTERNAL CONTROL & THEIR ADEQUACY:
The Company has put in place adequate system of internal control to safeguard andprotect from loss unauthorized use or disposition of its assets. All the transactions areproperly authorized recorded and reported to the Management. The Company is following allthe applicable Accounting Standards for properly maintaining the books of accounts andreporting financial statements. The internal auditor of the company checks and verifiesthe internal control and monitors them in accordance with policy adopted by the company.Even through this non-production period the Company continues to ensure proper andadequate systems and procedures commensurate with its size and nature of its business.
11. WHSITLE BLOWER POLICY OR VIGIL MECHANISM:
The company has put in place a whistle blower policy pursuant to which employees of thecompany can raise their concerns pertaining to fraud malpractice or any other activityor event which is against the interest of the company. Details of complaints received andthe action taken are reviewed by the Audit Committee. Whistle Blowers Mechanism'sfunctioning is reviewed by the Audit Committee from time to time. None of the company'semployees are denied access to audit committee.
12. EVALUATION OF BOARD:
As per the provisions of the Companies Act 2013 a structured questionnaire wasprepared after taking into account various aspects of Board's functioning composition ofboard together with its committees culture execution and performance of specific rolesduties and obligation. So far as the performance evaluation of independent directors areconcerned the same is done by board. The chairman and executive directors are evaluatedby the independent directors. The board has expressed that they are satisfied with processof evaluation.
Declaration from Independent Directors:
Pursuant to the requirements of section 149(7) of the Companies Act 2013 the companyhas received the declarations from all the independent directors confirming the fact thatthey all are meeting the eligibility criteria as stated in section 149(6) of the Companiesact 2013.
13. POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:
The company is having Nomination and Remuneration Committee (NRC) as required undersection 178 of the Companies Act 2013 which recommends the appointment of Directors tothe Board. The NRC is having onus to identify persons who are qualified to becomedirectors on the Board and to evaluate criteria such as academic qualifications previousexperience track record and integrity of the persons identified before recommending theirappointment to the Board. The compensation policy of the company duly reviewed andrecommended by the Nomination and Remuneration committee has been articulated in line withthe requirements of the Companies Act 2013. The company's compensation policy is aimed toattract retain reward and motivate talented individuals critical for achieving strategicgoals and long term success.
Remuneration policy is aligned to business strategy market dynamics internalcharacteristics and complexities within the organization. The ultimate objective is toprovide a fair and transparent structure that helps the organization to retain and acquirethe talent pool critical to building competitive advantage and brand equity. Thecompensation system should also take into account factors like roles skills /competencies experience and grade / seniority to differentiate pay appropriately on thebasis of contribution skill and availability of talent on account of competitive marketforces. The company pays sitting fees to its Non executive directors for attendingmeetings of the Board and its Committees Non executive directors are also reimbursed withexpenses incurred by them for attending meetings of the Board and its Committees atactuals. The remuneration payable to the non executive directors and independent Directorsis governed by the provisions of the Companies Act 2013 The company is not having anysubsidiary and hence holding directorships by any of the directors of the company insubsidiary is not applicable in case of the company. Shri B. J. Maheshwari and Shri VijayS. Banka have relinquished their sitting fees payable to them for attending the Board/Committee meetings.
14. BOARD & BOARD COMMITTEES :
The details of board meetings held during the year attendance of directors at themeetings and constitutions of various mandatory committees of the board are includedseparately in the corporate governance report.
15. RELATED PARTY TRANSACTIONS:
Related party transactions that were entered during the financial year were on an arm'slength basis and were in the ordinary course of business. There were no materiallysignificant related party transactions with the Company's Promoters Directors Managementor their relatives which could have had a potential conflict with the interests of theCompany. Transactions with related parties entered by the Company in the normal course ofbusiness are periodically placed before the Audit Committee for its omnibus approval andthe particulars of contracts entered during the year as per Form AOC-2 is enclosedherewith and marked as Annexure I. The Board of Directors of the Company has on therecommendation of the Audit Committee adopted a policy to regulate transactions betweenthe Company and its Related Parties in compliance with the applicable provisions of theCompanies Act 2013 the rules thereunder and the Listing Regulations.
16. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATOR OR COURTS:
There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company and its future operations.
17. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Shri G. R. Morarka and Ms. Priyanka G. Morarka will retire by rotation in ensuingAnnual General Meeting and are eligible for re-appointment. The brief resume/detailsrelating to Directors who are to be appointed / re-appointed as above are furnished at theend of the notice of AGM. During the year under the review there are no any change in anyother directors and KMPs.
18. STATEMENT OF DIRECTOR'S RESPONSIBILITIES:
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
(a) that in the preparation of the annual financial statements for the year ended March31 2017 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
(b) that such accounting policies as mentioned in Notes to the Financial Statementshave been selected and applied consistently and judgement and estimates have been madethat are reasonable and prudent so as to give a true and fair view of the state of affairsof the Company as at March 31 2017 and of the profit of the Company for the year ended onthat date;
(c) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) that the annual financial statements have been prepared on a going concern basis;
(e) that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively;
(f) that systems to ensure compliance with the provisions of all applicable laws werein place and were adequate and operating effectively.
19. CORPORATE GOVERNANCE:
In accordance with SEBI (LODR) Regulations 2015 Corporate Governance Report alongwith Auditors' certificate thereon and Management Discussion and Analysis Report form partof this report are enclosed and forms part of the report.
20. EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in form MGT 9 is annexedherewith and marked as Annexure II.
21. PARTICULARS OF EMPLOYEE:
The information required pursuant to Section 197 read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company is attached herewith and marked as Annexure III. All the non executivedirectors of the company due to financial constraints being faced by the company haveforgone remuneration. Further no sitting fees has been paid to any director during theyear except to Shri S. H.Nevatia and Ms. Priyanka Morarka.
The particulars of the employees who are covered by the provisions contained in Rule5(2) and rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 are:
|a) Employed throughout the year ||Nil |
|b) Employed for part of the year ||Nil |
The remuneration paid to all Key management Personnel was in accordance withremuneration policy adopted by the company.
22. POLICY ON PREVENTION OF SEXUAL HARASSMENT:
The Company has put in place a policy on Anti Sexual harassment policy. No complaintshave been received under this policy during the period
23. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE AND OUTGO:
Particulars relating to conservation of energy and technology absorption stipulatedunder Section 134(3)(m) of the Companies Act 2013 read with Rule 8 of The Companies(Accounts) Rules 2014 is not applicable to the company. The company does not have anyforeign exchange earnings and expenditure.
The Auditors M/s. D.P Agarwal & Co. Chartered Accountants retire at this AnnualGeneral Meeting and as per the rotational provisions of auditors as prescribed in section139(2) of the Companies Act 2013 the company is now required to appoint new statutoryauditors for the period of next five years. The audit committee and board of directorshave proposed and recommended M/s. B. P Gharda & Co; to be appointed as statutoryauditors of the company by seeking members' approval for the appointment of M/s. B. PGharda & Co.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. VKM & Associates. (CP No.:4279 FCS: 5023) Company Secretaries toundertake the secretarial audit of the company. The Secretarial Audit Report is annexedherewith as Annexure IV. The observations in the said report are self-explanatory and nofurther comments/explanations are called for.
25. MANAGEMENT DISCUSSON AND ANALYSIS:
As required under Regulation 34(2)(e) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and listing regulations of Stock Exchanges the ManagementDiscussion and Analysis Report is enclosed as a part of this report.
26. PUBLIC DEPOSITS
The Company is an NBFC - ND and hence does not have any fixed deposits at the beginningof the year in terms of Section 74 of the Companies Act 2013. The Company did not acceptany deposits during the year.
27. TRAVELLLNG EXPENSES:
Company's CEO and Vice President Shri Pranay G. Morarka has travelled abroad to explorebusiness opportunities for the company. He visited many countries and spend ' 906480 onthe travelling abroad.
The prolonged litigation of the company with SBI Mutual Fund has come to the conclusionin favour of the company and the company received compensation of ' 525000 in additionto the interest of ' 2439697 from SBI Mutual Fund in this victorious litigation.
Your Directors take this opportunity to place on record their appreciation for theco-operation received from Employees and overwhelming support extended by theshareholders.
By order of the Board
FOR MORARKA FINANCE LIMITED
G. R. MORARKA
B. J. MAHESHWARI
Place : Mumbai
Date: 30th May 2017
ADDENDUM TO THE DIRECTORS' REPORT
ANNEXUREI Form No. AOC-2
[Pursuant to clause (h) of sub-section (3)of section 134 of the Act and Rule 8(2) ofthe Companies(Accounts) Rules 2014]
Form for disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 including certain arms length transactions under third provisothereto.
1. Details of contracts or arrangements or transactions not at arm's length basis: None
|Name(s) of the related party and nature of relationship || |
|Nature of contracts/arrangements/transactions || |
|Duration of the contracts / arrangements/transactions || |
|Salient terms of the contracts or arrangements or transactions including the value if any || |
|Justification for entering into such contracts or arrangements or transactions || |
|Date(s) of approval by the Board || |
|Amount paid as advances if any || |
|Date on which the special resolution was passed in general meeting as required under first proviso to section 188 || |
2. Details of material contracts or arrangement or transactions at arm's length basis
|Name(s) of the related party and nature of relationship ||Dwarikesh Sugar Industries. Ltd. |
|Nature of contracts/ arrangements/ transactions ||1. Lease of office premise 2. Management consultancy facilities |
|Duration of the contracts / arrangements/ transactions ||1. Five years |
| ||2. Twelve months |
|Salient terms of the contracts or arrangements or transactions including the value if any ||1. Company has leased the office premises to Dwarikesh Sugar Industries Ltd;- A related party for period of 5 years for a monthly rent not exceeding ' 200000. |
|Date(s) of approval by the Board if any ||2. For financial assistance and other matters of consultancy for the period upto March 31 2018 to a related party Dwarikesh Sugar Industries Ltd company being NBFC has entered into consultancy arrangements with it for fees of ' 250000 per month. |
|Amount paid as advances if any ||Nil |