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Mudra Financial Services Ltd.

BSE: 539819 Sector: Financials
NSE: N.A. ISIN Code: INE967S01014
BSE 05:30 | 01 Jan Mudra Financial Services Ltd
NSE 05:30 | 01 Jan Mudra Financial Services Ltd

Mudra Financial Services Ltd. (MUDRAFINSER) - Director Report

Company director report

TO MEMBERS

Your Directors have great pleasure in presenting the Twenty Third Annual Report alongwith the Audited Statement of Accounts for the year ended 31st March 2017.

1. FINANCIAL HIGHLIGHTS:

Particulars Year ended 31.03.2017 Year ended 31.03.2016
Revenue from Operations 765385 2959615
Other Income 5748900 5014999
Total Revenue 6514285 7974614
Less: Total Expen ses 2827987 5028385
Profit Before Tax 3686298 2946229
Less: Tax Expense
Current Tax 1083500 960000
Earlier Years Tax 750925 (40)
Deferred Tax 233 (3491
Profit After Tax 1851640 1986618

2. OPERATIONAL REVIEW:

Your Company has earned an income of Rs. 65.14 Lakhs during the year as compared to Rs.79.75 Lakhs earned in the previous year. The company has achieved Profit After Taxes ofRs. 18.52 Lakhs as compared to Profit After Taxes of Rs. 19.87 Lakhs in immediatelypreceding financial year.

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 recommendany dividend for the year ended 31st March 2017.

4. TRANSFER TO GENERAL RESEREVE:

There was no amount transferred to General Reserve during the year. However the amounttransferred to the Statutory Reserve pursuant to Section 45-IC of RBI Act 1934 is Rs.3.70 Lakhs as compared to the 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 2017 was Rs. 50100000/- dividedinto 5010000 Equity Shares having face value of Rs. 10/- each fully paid up. During theyear under review the Company has not issued any shares with differential voting rightsnor granted any stock options neither any sweat equity.

6. SUSIDIARIES / 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 and 76 ofthe Companies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014during the year under 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 2017.

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

There was no significant or material orders passed by the Regulators or Courts thatwould impact the going concern 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 Five (5) Directors of which Two(2) are Independent Directors. Inaccordance with the provisions of Section 152 of the Companies Act 2013 and Articles ofAssociation of the Company Mr. Atul Jain Director (DIN: 00096052) retires by rotationand being eligible offers himself for re-appointment. During the year Mr. Mahendra KumarSingh Independent Director of the Company and Mr. Tarun Sharda CFO resigned w.e.f. 27thJune 2016. All the Independent Directors have submitted the declaration of Independenceas required pursuant to Section 149(7) of the Companies Act 2013 stating that they meetthe criteria of Independence provided under Section 149(6) of the Companies Act 2013 andRegulation 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 for the financial year ended 31st March2017 the applicable accounting standards had been followed along with proper explanationrelating 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 frauds 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 Regulation 17 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carriedout an evaluation after taking into consideration various aspects of the Board'sfunctioning composition of the Board and its Committees culture execution andperformance of specific duties remuneration obligations and governance. The performanceevaluation of the Independent Directors was carried out by the entire Board. Theperformance evaluation of the Chairman and the Non-Independent Directors was carried outby the Independent Directors. The Board of Directors expressed their satisfaction with theevaluation process.

15. MEETING OF BOARD OF DIRECTORS OF THE COMPANY:

During the year under review (Six) 6 Board Meetings were convened and held on 30thMay 2016 14th July 2016 12th August 2016 14th November 2016 7th February 2017 and27th March 2017. 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 6 6
Mr. Mahendra Kumar Singh* Non-Executive Independent Director 6 1
Mr. Jagannath Ramanuj Chakravarti Non-Executive Independent Director 6 6
Mr. Sanjeev Maheshwari Non-Executive Director 6 6
Mrs. Asha Krishan Kumar Rathi Non-Executive Independent Director 6 6
Mr. Dipen Maheshwari Managing Director 6 6

* NOTE: Mr. Mahendra Kumar Singh resigned w.e.f. 27th June 2016.

16. KEY MANAGERIAL PERSONNEL:

The following are the Key Managerial Personnel of the Company:

Sr. No. Name Designation
1. Mr. Dipen Maheshwari Managing Director
2. Mr. Anirudh Kumar Tanvar Company Secretary
3. Mr. Tarun Sharda Chief Financial Officer (CFO) resigned w.e.f. 27th June 2016

17. AUDIT COMMITTEE:

In accordance with the provisions contained in Regulation 18 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and in consonance with theprovisions of Section 177 of the Companies Act 2013 the Board of Directors hadconstituted an Audit Committee comprising of 3 Directors. The broad terms of reference ofthe Audit Committee are in consonance with the provisions of Section 177 of the CompaniesAct 2013 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 practices andcompliance with accounting standards. Committee also reviews the legal compliancereporting system.

The particulars of the Members of the Audit Committee and their attendance at theMeetings are as under:

Name of the Director Designation Category of Directorship

No. of Meetings during the year

Held Attended
Mr. Mahendra Kumar Singh (resigned w.e.f. 27th June 2016) Ex-Chairman Non-Executive Independent Director 4 1
Mr. Jagannath Ramanuj Chakravarti Chairman Non-Executive Independent Director 4 4
Mr. Atul Jain Member Non-Executive Director 4 4
Mrs. Asha Krishan Kumar Rathi Member Non-Executive Independent Director 4 3

Mr. Mahendra Kumar Singh Ex-Chairman of the Audit Committee resigned w.e.f. 27th June2016. Thereafter Mr. Jagannath Ramanuj Chakravarti was appointed as the Chairman of theAudit Committee and Mrs. Asha Krishan Kumar Rathi was appointed as a member of the AuditCommittee w.e.f. 14th July 2016.The Audit Committee meetings were held on 30th May 201612th August 2016 14th November 2016 and 7th February 2017 and all the members of theAudit Committee were present.

18. NOMINATION AND REMUNERATION COMMITTEE:

The Board of Directors of the Company had constituted a 'Nomination and RemunerationCommittee' in order to align it with the provisions of Section 178 of the Companies Act2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements)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 ofsub-section (3) of Section 178 of the Companies Act 2013.

The particulars of the Members of the Nomination and Remuneration Committee and

their attendance at the Meeting are as under:

Name of the Director Designation Category of Directorship

No. of M during leetings he year

Held Attended
Mr. Mahendra Kumar Singh (resigned w.e.f 27th June 2016) Ex- Chairman Non-Executive Independent Director
Mr. Jagannath Ramanuj Chakravarti Chairman Non-Executive Independent Director 1 1
Mr. Atul Jain Member Non-Executive Director 1 1
Mrs. Asha Krishan Kumar Rathi Member Non-Executive Independent Director 1 1

Mr. Mahendra Kumar Singh Ex-Chairman of the Nomination and Remuneration Committeeresigned w.e.f. 27th June 2016. Thereafter Mr. Jagannath Ramanuj Chakravarti wasappointed as the Chairman of the Nomination and Remuneration Committee and Mrs. AshaKrishan Kumar Rathi was appointed as a member of the Nomination and Remuneration Committeew.e.f. 14th July 2016.The Nomination and Remuneration Committee meeting was held on 27thMarch 2017 and all the members were present in the meeting.

19. STAKEHOLDERS RELATIONSHIP COMMITTEE:

The Board of Directors of the Company had constituted Stakeholders RelationshipCommittee in order to align it with the provisions of Section 178 of the Companies Act2013 and Regulation 20 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. The Committee had been constituted to strengthen the investor relationsand to inter- alia look into issues relating to shareholders grievances pertaining totransfer of shares nonreceipt of declared dividends non-receipt of Annual Report issuesconcerning de- materializationetc.

The particulars of the Members of the Stakeholders Relationship Committee and theirattendance at the Meetings are as under:

Name of the Director Designation Category of Directorship

No. of Meetings during the year

Held Attended
Mr. Mahendra Kumar Singh (resigned w.e.f 27th June 2016) Ex- Chairman Non-Executive Independent Director 4 1
Mr. Jagannath Ramanuj Chakravarti Chairman Non-Executive Independent Director 4 4
Mr. Atul Jain Member Non-Executive Director 4 4
Mrs. Asha Krishan Kumar Rathi Member Non-Executive Independent Director 4 3

Mr. Mahendra Kumar Singh Ex-Chairman of the Stakeholders Relationship Committeeresigned w.e.f. 27th June 2016.Thereafter Mr. Jagannath Ramanuj Chakravarti wasappointed as the Chairman of the Stakeholders Relationship Committee and Mrs. Asha KrishanKumar Rathi was appointed as a member of the Stakeholders Relationship Committee w.e.f.14th July 2016.The Stakeholders Relationship Committee Meetings were held (Four) 4 timesduring the year i.e. on 30th May 201612th August 2016 14th November 2016 and 7thFebruary 2017.

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

Sr. No. Nature of Complaints 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 2017.

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 27th March 2017 inter-alia to discuss:

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

2. Evaluation of performance of the Chairman of the Company taking into account theviews of Executive and Non-Executive Directors.

21. RISK MANAGEMENT COMMITTEE:

During the year under review the Board of Directors at their meeting held on 30th May2016 decided to dissolve Risk Management Committee as the Regulation 21 of the SEBI(Listing Obligations and Disclosure Requirements) Regulation 2015 is applicable only totop 100 listed entities; hence the company is not required to constitute a Risk ManagementCommittee.

22. REMUNERATION AND SITTING FEES:

The details of Remuneration paid and Sitting Fees paid 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 (resigned w.e.f. 27th June 2016) Non-Executive Independent Director NA -
Mr. Jagannath Ramanuj Chakravarti Non-Executive Independent Director NA -
Mr. Sanjeev Maheshwari Non-Executive Director - -
Mrs. Asha Krishan Kumar Rathi Non-Executive Independent Director NA -
Mr. Dipen Maheshwari Managing Director Rs. 596809/- -

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 the 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 both thedepositories i.e. National Securities Depository Limited (NSDL) and Central DepositoryServices (India) Limited. The Company has been allotted ISIN No. INE967S01014.

Therefore Shareholders are requested to take full benefit of the same and lodge theirholdings with Depository Participants [DPs] with whom they have their Demat Accounts forgetting 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. Sampat & Mehta Chartered Accountants Mumbai. (Firm Registration No.109031W)are hereby appointed as the Statutory Auditors of the Company in place of the retiringauditors M/s. Desai Saksena & Associates to hold office for a period of 5 years fromthe conclusion of 23rd AGM until the conclusion of 28th AGM (subject to ratification ofappointment by the members at every AGM held thereafter). As required under the provisionsof Section 139 of the Companies Act 2013 the Company has obtained written confirmationfrom M/s. Sampat & Mehta that their appointment if made would be in conformity withthe limits specified in the said Section.

28. SECRETARIAL AUDIT:

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Rules madethereunder the company has appointed Ms. Bijal Nagda Practising Company Secretary toundertake the Secretarial Audit of the Company. The Secretarial Audit report is annexedherewith as Annexure 'B' and forms an integral part to this Report.

29. AUDITOR'S REPORT/ SECRETARIAL AUDIT REPORT:

There are no adverse remarks or observations of the Statutory Auditors and SecretarialAuditors in their Report.

30. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit function isdefined by the Audit Committee. To maintain its objectivity and independence the InternalAudit function reports to the Chairman of the Audit Committee of the Board.

The Internal Audit Function 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 REPORT:

The provisions of Corporate Governance are not applicable to the Company and ManagementDiscussion and Analysis Report is attached as Annexure 'C' and forms an integral part tothis Report.

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

Information under Section 134(3)(m) of the Companies Act 2013 read with Rule 8 of theCompanies (Accounts) Rules 2014:

A. Conservation of Energy : Not Applicable
B. Technology Absorption : Not Applicable
C. Foreign Exchange Earnings and Outgo
Foreign Exchange Earnings :Nil
Foreign Exchange Outgo :Nil

33. SEXUAL HARASSMENT:

The Company had 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 compliance environmental regulations and preservation of naturalresources.

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 (BSE) 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. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

There have been no material changes and commitments affecting the financial positionof the Company which occurred during between the end of the financial year to which thefinancial statements relate and the date of this report.

40. 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 co-operation and support ofemployees at all levels.

Registered Office: For and on Behalf of the Board
3rd Floor Vaastu Darshan "B" Wing For Mudra Financial Services Limited
Azad Road Andheri (East)
Mumbai - 400 069
Sanjeev Maheshwari Atul Jain
Place: Mumbai Chairman Director
Date: 29th May 2017 DIN: 02431173 DIN: 00096052