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Mudra Financial Services Ltd.

BSE: 539819 Sector: Financials
NSE: N.A. ISIN Code: INE967S01014
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Mudra Financial Services Ltd. (MUDRAFINSER) - Director Report

Company director report

Your Directors have great pleasure in presenting the Twenty Second Annual Reportalong with the Audited Statement of Accounts for the year ended 31st March2016.

1. FINANCIAL HIGHLIGHTS:

(Amount in Rs)

Year ended Year ended
Particulars 31.03.2016 31.03.2015
Revenue from Operations 2959615 1720000
Other Income 5014999 4476589
Total Revenue 7974614 6196589
Less : Total Expenses 5028385 3309178
Profit Before Tax 2946229 2887411
Less : Tax Expense
Current Tax 960000 889000
Earlier Years Tax (40) 13000
Deferred Tax (349) (2496)
Profit After Tax 1986618 1987906

2. OPERATIONAL REVIEW:

Your Company has earned an income of Rs.79.75 Lakhs during the year as comparedto Rs.61.97 Lakhs earned in the previous year. The company has achieved Profitafter Taxes of Rs.19.87 Lakhs as compared to Profit after Taxes of Rs.19.88Lakhs in immediately preceding financial year. The Company has posted betteroperational and financial performance for the year under review which has happened due tothe commitment and untiring efforts of management executives and staff at all the levelswho were instrumental in achieving these results.

3. DIVIDEND:

In view of nominal profits after taxes and in order to plough back the profits of theCompany for further growth and development the Directors have decided not to recommend anydividend for the year ended 31sl March 2016.

4. TRANSFER TO GENERAL RESEREVE:

The amount transferred to the General Reserve is Rs. 3.97 Lakhs as compared tothe transfer of Rs. 3.97 Lakhs in the preceding financial year.

5. SHARE CAPITAL OF THE COMPANY:

The Paid up Equity Share Capital as at 31st March 2016 was Rs. 50100000/-divided into 5010000 Equity shares having face value of Rs. 10/- each fully paid up.During the year under review the Company has not issued any shares with differentialvoting rights nor granted any stock options nor sweat equity.

6. SUSID1ARIES/JOINT VENTURES/ASSOCIATE COMPANIES:

The Company does not have any Subsidiary Joint venture or Associate Company.

7. PUBLIC DEPOSITS:

Your Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014 during the yearunder review.

8. PARTICULARS OF LOANS GUARANTEES / SECURITIES OR

INVESTMENTS:

There were no guarantees/securities or investments made by the Company under Section186 of the Companies Act 2013 during the year under review. The details of the loansgiven by the Company have been disclosed in the Notes to Accounts of the financialstatements.

9. CORPORATE SOCIAL RESPONSIBILITY:

The Provisions of Section 135 of the Companies Act 2013 read with the Companies(Corporate Social Responsibility Policy) Rules 2014 were not applicable to the Companyfor the financial year ended 31st March 2016.

10. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

There are no significant or material orders passed by the Regulators or Courts thatwould impact the going status of the Company and its future operations.

11. EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in form MGT-9 as requiredunder Section 92 of the Companies Act 2013 is included in this Report as Annexure‘A’ and forms an integral part of this Report.

12. BOARD OF DIRECTORS:

Your Company has Six (6) Directors of which Three (3) are Independent Directors.

In accordance with the provisions of Section 152 of the Companies Act 2013 andArticles of Association of the Company Mr. Sanjeev Maheshwari Director (DIN: 02431173)retires by rotation and being eligible offers himself for re-appointment. All theIndependent Directors have submitted the declaration of Independence as required pursuantto Section 149(7) of the Companies Act 2013 stating that they meet the criteria ofindependence provided under Section 149(6) of the Act and Regulation 16(b) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.

13. DIRECTORS' RESPONSIBILITY STATEMENT:

To the best of our knowledge and belief and according to the information andexplanations obtained Directors make the following statement in terms of Section 134(5)of the Companies Act 2013:

(a) in the preparation of the Annual Accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures if any;

(b) the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit of the company for that period;

(c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

(d) the Directors had prepared the annual accounts on a going concern basis;

(e) the Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and

(f) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

14. BOARD EVALUATION:

Pursuant to the provisions of the Companies Act 2013 and under Regulation 17 of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Board hascarried out an evaluation after taking into consideration various aspects of theBoard’s functioning composition of the Board and its Committees culture executionand performance of specific duties remuneration obligations and governance. Theperformance evaluation of the Independent Directors was carried out by the entire Board.The performance evaluation of the Chairman and the Non-Independent Directors was carriedout by the Independent Directors. The Board of Directors expressed their satisfaction withthe evaluation process.

15. MEETING OF BOARD OF DIRECTORS OF THE COMPANY:

Number of Meetings of The Board of Directors: During the year 7 Board Meetings wereconvened and held on 30th May 2015 3rd July 2015 14thAugust 2015 26th September 2015 14lh November 2015 12thFebruary 2016 and 31st March 2016. Details of these are as follows:

Name of the Director Category of Directorship

No. of meetings during the year

Held Attended
Mr. Atul Jain Non - Executive Director 7 4
Mr. Mahendra Kumar Singh Non - Executive Independent Director 7 6
Mr. Jagannathan Ramanuj Chakravarti Non - Executive Independent Director 7 7
Mr. Sanjeev Maheshwari Non - Executive Director 7 7
Mrs. Asha Krishan Rathi Non - Executive Independent Director 7 7
Mr. Dipen Maheshwari Managing Director 7 7

16. KEY MANAGERIAL PERSONNEL:

The following are the Key Managerial Personnel of the Company:

SI. No. Name Designation
1. Mr. Dipen Maheshwari Managing Director
2. Mr. Anirudh Tanvar Company Secretary
3. Mr. Tarun Sharda Chief Financial Officer (CFO) (appointed w.e.f. 31st March 2016)

17. AUDIT COMMITTEE:

In accordance with the provisions of the Listing Agreement and Corporate Governance andas per the provisions contained in Regulation 18 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Company has constituted an Audit Committeecomprising of three Directors. The Board terms of reference of the Audit Committee are inconsonance with the provisions of Section 177 of the Companies Act 2013 the ListingAgreement and the Listing Regulations.

The Committee acts as a link between the Management the Statutory Auditors and theBoard of Directors of the Company. The Committee focuses its attention on monitoring thefinancial reporting system within the Company considering Quarterly & AnnualFinancial Results of the Company and submitting its observations to the Board of Directorsbefore it is adopted by the Board review of internal audit report internal controlsystem audit methodology and process major accounting policies and practice compliancewith accounting standards. Committee also reviews the legal compliance reporting system.

The particulars of Members of Audit Committee and their attendance at the Meetings areas under:

Name of the Director Designation Category of Directorship

No. of Meetings during the year

Held Attended
Mr. Mahendra Kumar Singh Chairman Non-Executive Independent Director 4 4
Mr. Jagannathan Ramanuj Chakravarti Member Non-Executive Independent Director 4 4
Mr. Atul Jain Member Non-Executive Director 4 4

The Audit Committee meetings were held on 30th May 2015 14thAugust 2015 14lh November 2015 and 12th February 2016 and allmember Directors of the Audit Committee were present.

18. NOMINATION AND REMUNERATION COMMITTEE:

The Board of Directors of the Company has constituted a ‘Nomination andRemuneration Committee’ in order to align it with the provisions of Section 178 ofthe Companies Act 2013 and Regulation 19 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.

The Board of Directors has also framed a policy which lays down a framework in relationto remuneration of Directors Key Managerial Personnel and Senior Management of theCompany. The policy lays down the criteria determining qualifications positiveattributes independence of a director and other matters pursuant to the provisions ofsubsection (3) of Section 178 of the Companies Act 2013. The particulars of members ofnomination and remuneration committee and this attendance at the meeting as under:

Name of the Director Designation Category of Directorship

No. of Meetings during the year

Held Attended
Mr. Mahendra Kumar Singh Chairman Non-Executive Independent Director 1 1
Mr. Jagannathan Ramanuj Chakravarti Member Non-Executive Independent Director 1 1
Mr. Atul Jain Member Non-Executive Director 1 1

The Nomination and Remuneration Committee meeting was held on 31st March2016.

19. STAKEHOLDERS RELATIONSHIP COMMITTEE:

The Board of Directors of the Company has re-named Share Holders Grievance/ ShareTransfer Committee as ‘Stakeholders Relationship Committee’ in order to align itwith the provisions of Section 178 of the Companies Act 2013 and Regulation 20 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. The Committee hasbeen constituted to strengthen the investor relations and to inter-alia look into issuesrelating to shareholders grievances pertaining to transfer of shares non- receipt ofdeclared dividends non-receipt of Annual Report issues concerning de-materializationetc.

The particulars of Members of Stakeholders Relationship Committee and their attendanceat the Meetings are as under:

Name of the Director Design

ation

Category of Directorship

No. of Meetings during the year

Held Attended
Mr. Mahendra Kumar Singh Chairman Non-Executive Independent Director 2 2
Mr. Jagannathan Ramanuj Member Non-Executive Chakravarti Independent Director 2 2
Mr. Atul Jain Member Non-Executive

Director

2 2

The Stakeholders Relationship Committee Meetings were held on 30th May 2015and 12th February 2016.

The details of the Complaints received during the year under review are as follows:

Sr. Nature of Complaints No. Received Pending Disposed
1. Non receipt of Annual Report
2. Non Receipt of Share Certificates after transfer - - -
3. Non Receipt of Demat Rejected S/C’s
4. Others
Total . . .

There were no complaints pending for action as on 31st March 2016.

20. MEETING OF INDEPENDENT DIRECTORS:

During the year under review pursuant to Regulation 25(3) of SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Independent Directors of the Companymet on 31st March 2016 inter-alia to discuss:

1. Evaluation of performance of Non-Independent Directors and Board of Directors of theCompany as whole.

2. Evaluation of performance of the Chairman of the Company taking into accountthe views of Executive and Non-Executive Directors.

21. RISK MANAGEMENT COMMITTEE:

During the year the risk management committee meeting was held on 31stMarch 2016. The Directors have constituted a Risk Management Committee which has beenentrusted with the responsibility to assist the Board (a) to ensure that all the currentand future material risk exposures of the Company are identified assessed quantifiedappropriately mitigated minimized and managed i.e. to ensure adequate systems for riskmanagement (b) to establish a framework for the company’s risk management process andto ensure its implementation (c) to enable compliance with appropriate regulationswherever applicable through the adoption of best practices and (d) to assure businessgrowth with financial stability.

A Risk Management Policy was reviewed and approved by the Committee.

22. REMUNERATION AND SITTING FEES:

The details of Remuneration Paid and Sittinn Fees naid are as follows:

Name of the Director Category of Directorship Remuneration paid to the Director Sitting fees paid to the Director
Mr. Atul Jain Non - Executive Director - -
Mr. Mahendra Kumar Singh Non - Executive Independent Director NA -
Mr. Jagannathan Ramanuj Chakravarti Non - Executive Independent Director NA -
Mr. Sanjeev Maheshwari Non - Executive Director - -
Mrs. Asha Krishan Rathi Non - Executive Independent Director NA -
Mr. Dipen Maheshwari Managing Director Rs.522581/- -

23. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

Pursuant to Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company has framed a Vigil Mechanism/Whistle Blower policy toreport genuine concerns grievances frauds and mismanagements if any. The VigilMechanism/Whistle Blower policy has been posted on the website of the Company.

24. RELATED PARTY TRANSACTIONS:

The Company has not entered into any related party transactions which falls under theprovisions of Section 188 of the Companies Act 2013 and rules made thereunder. Alsothere are no materially significant related party transactions made by the Company withPromoters Key Managerial Personnel or other designated persons which may have potentialconflict with the interest of the Company at large.

25. DEPOSITORY SERVICES:

The Company’s Equity Shares have been admitted to the depository mechanism of boththe depositories i.e. National Securities Depository Limited (NSDL) and Central DepositoryServices (India) Limited. The Company has been allotted ISIN No. INE967S01014.

Shareholders therefore are requested to take full benefit of the same and lodge their

holdings with Depository Participants [DPs] with whom they have their Demat Accountsfor getting their holdings in electronic form.

26. CODE OF CONDUCT:

Your Company is committed to conducting its business in accordance with the applicablelaws rules and regulations and highest standards of business ethics. In recognitionthereof the Board of Directors has implemented a Code of Conduct for adherence by theDirectors Senior Management Personnel and Employees of the Company. This will help indealing with ethical issues and also foster a culture of accountability and integrity. Allthe Board Members and Senior Management Personnel have confirmed compliance with the Code.

27. STATUTORY AUDITORS:

M/s. Desai Saksena & Associates Chartered Accountants Mumbai. (Firm RegistrationNo.l02358W) were appointed as the Statutory Auditors of the Company at the AGM held on 30thSeptember 2014 to hold office until the conclusion of the third consecutive AGM arerecommended for ratification of appointment for the Financial Year 2016-17. As requiredunder the provisions of Section 139 of the Companies Act 2013 the Company has obtainedwritten confirmation from M/s. Desai Saksena & Associates that their appointment ifmade would be in conformity with the limits specified in the said Section.

28. SECRETARIAL AUDIT:

Pursuant to provisions of section 204 of the Companies Act 2013 and the Rules madethereunder the company has appointed Ms. Bijal Gada Company Secretary to undertake theSecretarial Audit of the Company. The Secretarial Audit report is annexed herewith as Annexure‘B’ and forms an integral part to this Report.

29. AUDITOR’S REPORT/ SECRETARIAT AUDIT REPORT:

There are no adverse observations of the Statutory Auditors and Secretarial Auditors intheir Report.

30. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an in house Internal Control System commensurate with the size scaleand complexity of its operations. The scope and authority of the Internal Audit functionis defined by the Audit Committee. To maintain its objectivity and independence theInternal Audit function reports to the Chairman of the Audit Committee of the Board.

The Internal Audit Department monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies of the Company.

Based on the internal audit function the Company undertakes corrective action in theirrespective areas and thereby strengthens the controls. Significant audit observations andrecommendations along with corrective actions thereon are presented to the Audit Committeeof the Board.

31. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION &

ANALYSIS REPORTS:

The Provisions of Corporate Governance are not applicable to the Company &Management Discussion and Analysis Reports is attached as Annexure ‘C\

32. PARTICULARS REGARDING CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNING AND OUTGO:

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo pursuant to Section 134(3)(m) of the Companies Act 2013 read with theRule 8(3) of the Companies (Accounts) Rules 2014 is not applicable.

33. SEXUAL HARASSMENT:

The Company has constituted an Internal Complaint Committee as required under Section 4of the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013 and the Rules made thereunder. During the year under review no complaints werereported.

34. SAFETY ENVIRONMENT CONTROL AND PROTECTION:

The Company is aware of the importance of environmentally clean and safe operations.The Company's policy requires conduct of operations in such a manner so as to ensuresafety of all concerned compliances environmental regulations and preservation ofnatural resources at the Plant.

35. PARTICULARS OF EMPLOYEES:

No employee was in receipt of remuneration exceeding the limits as prescribed under theprovisions of Section 197 of the Companies Act 2013 and read with rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 hence no suchparticulars are furnished

36. LISTING:

The Company’s Equity Shares are listed on Bombay Stock Exchange Limited andAhmedabad Stock Exchange Limited.

37. INTERNAL FINANCIAL CONTROL AND THEIR ADEQUACY:

The company has in place adequate internal financial controls commensurate with thesize scale and complexity of its operations. The Company has policies and procedures inplace for ensuring proper and efficient conduct of its business the safeguarding of itsassets the prevention and detection of frauds and errors the accuracy and completenessof the accounting records and the timely preparation of reliable financial information.The company has adopted accounting policies which are in line with the accountingstandards and the Companies Act 2013.

38. REPORTING OF FRAUDS:

There have been no instances of fraud reported by the Statutory Auditors under Section143(12) of the Acts & Rules framed thereunder either to the Company or to the CentralGovernment.

39. APPRECIATION:

Your Directors would like to express their sincere appreciation to the company’sShareholders Vendors and Stakeholders including Banks other business associates whohave extended their valuable sustained support and encouragement during the year underreview. Your Directors also wish to place on record their appreciation for impressivegrowth achieved through the competence hard work solidarity cooperation and support ofemployees at all levels.

Registered Office By Order of the Board
3rd Floor Vaastu Darshan "B" Wing For Mudra Financial Services Limited
Azad Road Andheri (East)
Mumbai - 400 069
Sanjeev Maheshwari
Place: Mumbai Chairman
Date: 30th May 2016 DIN:02431173