On behalf of the Board of Directors ("the Board") I hereby present the 28thAnnual Report on the business and operations of your Company together with the AuditedFinancial Statements for the financial year ended 31 st March 2019.
The Company's financial performance for the year ended 31st March 2019 issummarized below:
(? InLakhs except EPS)
|Particulars ||2018-2019 ||2017-2018 |
|Total Income ||28.99 ||53.28 |
|Profit/(Loss) before depreciation ||(1.72) ||22.29 |
|Less : Depreciation and amortisation ||0.89 ||0.90 |
|Profit/(Loss) before tax & exceptional items ||(2.61) ||21.40 |
|Less : exceptional items ||0.06 ||0.36 |
|Less: Tax Expenses ||(0.57) ||0.66 |
|Profit/(Loss) after tax ||(2.10) ||20.38 |
|EPS (`) ||(0.05) ||0.45 |
Operations and the state of Company Affairs
The total income for the year ended 31st March 2019 was ` 28.99 Lakhs asagainst ` 53.28 Lakhs in the previous year. The revenue from the finance segment hasremained stable for the year but the investment yield has been lower to` 16.21 Lakhs asagainst ` 40.31 Lakhs in the previous year which has resulted in net loss of ` 2.10 Lakhsfor the year ended 31st March 2019 as against the net profit of` 20.38 Lakhsin the previous year.
In view of loss incurred by the Company for the year ended 31st March 2019the Board of Directors of the Company has not recommended any dividend on the equityshares of the Company for the financial year under review.
Transfer to Reserves
During FY 2018-19 no amount has been transferred to the general reserves/ retainedearnings of the Company.
The paid up equity share capital of the Company as on 31st March 2019 is `45700000/- comprising of 4570000 Equity shares of Face Value of ` 10/- each. Duringthe financial year 2018-19 your Company has neither issued equity shares withdifferential rights as to dividends voting or otherwise nor has issued Sweat Equityshares. Your Company does not have any
Employee Stock Option Scheme or Employee Stock Purchase Scheme.
During the year under review your Company does not have any subsidiaries or jointventures or associate companies as defined under theAct.
Pursuant to Section 134(3)(n) of the Companies Act 2013 & Regulation 17(9) of SEBI(Listing Obligations and Disclosure Requirement) Regulation 2015 ("ListingRegulation 2015") the Company has implemented an integrated risk management systemthrough which it takes care of risk identification assessment and mitigation. The AuditCommittee has additional oversight in the area of financial risk and control. At presentthe Company has not identified any element of risk which may threaten the existence of theCompany.
Internal control systems and their adequacy
Your Company maintains adequate internal control system and procedures commensuratewith its size and nature of operations. The internal control systems are designed toprovide a reasonable assurance over reliability in financial ensure appropriateauthorization of transactions safeguarding the assets of the Company and prevent misuse/losses and legal compliances.
The internal control system includes a well-defined delegation of authority and acomprehensive Management Information System coupled with quarterly reviews of operationaland financial performance a well-structured budgeting process and
Directors and Key Managerial Personnel
During the year under review following changes took place in the Board of Directorsand the Key Managerial Personnel:
1. Mr. Shri Dass Maheshwari (DIN : 00181615) Chief Financial Officer of the Company
Director (Finance) for three years w.e.f. 30th April 2018. His appointmentwas duly approved by the members of the Company at the Annual General Meeting (AGM) of theCompany held on 11th September 2018.
2. Ms. Smita Kulkarni (DIN : 08127803) was appointed as a Non-Executive IndependentDirector of the Company for a first term of five consecutive years w.e.f. 8thMay 2018. Her appointment was duly approved by the members of the Company at the AnnualGeneral Meeting (AGM) of the Company held on 11th September 2018.
3. Ms. Jyotsna Jindal resigned from position of Company Secretary and ComplianceOfficer of the Company w.e.f. 9 th June 2018 and Ms. Surbhi Maheshwari was appointed asCompliance Officer of the Company w.e.f. 9 th June 2018 and Company Secretaryw.e.f. 28th June 2018. Further Ms. Surbhi Maheshwari resigned from positionof Company Secretary & Compliance Officer of the Company w.e.f. 31 st July2018 and Mr. Kailash Rawat was appointed as Company Secretary and Compliance Officer ofthe Company w.e.f.1 st August 2018.
The aforesaid appointments were made by the Board pursuant to the recommendation ofNomination and Remuneration Committee (NRC).
The first term of Mr. G. P. Agrawal (DIN: 00008429) Independent Director is expiring on22 nd August 2019 and he is eligible for the re-appointment for a second term.Pursuant to the recommendation of Nomination and Remuneration Committee (NRC) and on thebasis of performance evaluation the Board of Directors of the Company at its meeting heldon 13th May 2019 approved and recommended to the members of the Companyre-appointment of Mr. G. P. Agrawal as Non-Executive
Independent Director of the Company not liable to retire by rotation for a secondterm of five consecutive years w.e.f. 23rd August 2019 to 22ndAugust 2024. Accordingly special resolution for his re-appointment is included in theNotice of ensuing Annual General Meeting (AGM).
Pursuant to the provisions of Section 152 of the Companies Act 2013 Mr. Shri DassMaheshwari (DIN: 00181615) Director of the Company retires by rotation at the ensuingAGM and being eligible has offered himself for the re-appointment. The Board recommendshis re-appointment for consideration at the ensuing AGM.
Members are requested to refer the Notice of the ensuing AGM for brief profile andother related information of Directors seeking appointment/re-appointment.
As on 31st March 2019 Mr. Shri Dass Maheshwari Whole timeDirector-Finance and Chief Financial Officer and Mr. Kailash Rawat Company Secretary& Compliance Officer are the Key Managerial Personnel (KMP) of the Company in terms ofsection 203 of the Companies Act 2013.
All the Independent Directors of the Company have given declarations that they meet thecriteria of independence as prescribed under Section 149(6) of the Act and Regulation16(1)(b) of Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ("Listing Regulations") and that they are notaware of any circumstance or situation which exist or may be reasonably anticipated thatcould impair or impact their ability to discharge duties with an objective independentjudgment and without any external influence. In the opinion of the Board all IndependentDirectors are independent of the management.
During the year under review the Non-Executive Independent Directors of the Companyhad no pecuniary relationship or transactions with the Company and none of the IndependentDirectors are liable to retire by rotation.
Directors' Responsibility Statement
Pursuant to the provisions of Section 134(3)(c) and 134(5) of the Companies Act 2013your Directors to the best of their knowledge and belief and according to the informationand explanations obtained by them state and confirm that:
(a) In the preparation of the Annual Financial Statements for the year ended 31stMarch 2019 the applicable accounting standards had been followed along with properexplanation 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 as at 31st March 2019 and ofthe loss of the Company for the year ended on that date;
(c) The Directors had taken proper and sufficient care for the with the provisions ofthis Act for safeguarding the assets of the Company and for preventing and detecting fraudand other irregularities;
(d) The Directors had prepared the annual accounts on a going concern basis; and
(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.
(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.
Extract of Annual Return
Pursuant to Section 92(3) of the Act read with Rule 12 of the Companies (Management andAdministration) Rules 2014 Extract of the Annual Return in Form MGT-9 as on 31stMarch 2019 is annexed as an Annexure 1'' and is also available on thewebsite of the Company athttp://www.margofinance.com/upload/Margo%20annual%20report%202018-19%20MGT-9.pdf Furtherpursuant to Section 134(3)(a) of the Act a copy of Annual Return for the year ended 31stMarch 2019 will be hosted on the website of the company at www.margofinance.com .
Number of Board Meetings
The Board met 5 (five) times during the financial year 2018-19 i.e. on30 th April2018; 28th June 2018; 30th July 2018; 1st November2018 and 7th February 2019 the details of which are given in the CorporateGovernance Report. The maximum gap between any two consecutive Board meetings did notexceed 120 days.
Company's policy on appointment and remuneration of Directors and Key ManagerialPersonnel
Pursuant to Section 178 of the Companies Act 2013 the Nomination and RemunerationCommittee (NRC) has formulated "Nomination and Remuneration Policy" which deals inter-aliawith appointment and remuneration of Directors Key Managerial Personnel SeniorManagement and other employees. The said policy is uploaded on the website of the Companyand web-link thereto ishttp://www.margofinance.com/upload/MFL%20Nomination%20and%20Remuneration%20Policy.pdf
The salient features of the policy are as under:
I. Criteria for appointment:
a. NRC shall identify ascertain and consider the integrity qualification expertiseand experience of the person for the appointment as a Director of the Company andrecommend to the Board his / her appointment. The Directors shall uphold ethical standardsof integrity and probity and shall exercise their duties and responsibilities in theinterest of the Company. b. A person proposed to be appointed as Director should possessadequate qualification expertise and experience for the position he / she is consideredfor appointment. They shall possess appropriate core skills/ expertise/ competencies/knowledge in one or more fields of finance law management sales and marketingadministration research and in the context of business and/or the sector in which thecompany operates. The NRC has the discretion to decide whether qualifications expertiseand experience possessed by a person are sufficient/ satisfactory for concerned position.
c. The Company shall comply with the provisions of the Act and Listing Regulations andany other laws if applicable for appointment of Director of the Company. The Company shallensure that provisions relating to limit of maximum directorships age term etc. arecomplied with.
II. Remuneration of the Whole Time /Executive Director(s) / Managing Director : a.The remuneration including commission payable to the Whole Time /Executive Director(s) /Managing Director shall be determined and recommended by the NRC to the Board forapproval.
b. While determining the remuneration of the Executive Directors following factorsshall be considered by the NRC/ Board:
Role played by the individual in managing the Company including responding to thechallenges faced by the Company Individual performance and company performance so thatremuneration meets appropriate performance benchmarks Reflectiveof size of the Companycomplexity of the sector/ industry/company's operations and the Company's financialposition Consistent with recognized best industry practices. Peer remunerationRemuneration involves balance between fixed and incentive pay to the working of theCompany and its goals. Remuneration is reasonable and sufficient to retain and motivatedirectors to run the company
III. Remuneration to Non- Executive / Independent Directors:
Sitting Fees: Independent Directors are entitled for sitting fees for attendingmeetings of the Board and committees (excluding Share Transfer Committee) and IndependentDirectors Meeting as may be approved by the Board within the limit specified under theAct.
Annual Evaluation of Board Performance and its Committee and Individual Directors
Criteria of performance evaluation of the Board Committees and Directors are laid downby Nomination and Remuneration Committee (NRC) of the Company. Further pursuant toprovisions of the Companies (Amendment) Act 2017 NRC decided to continue existing methodof performance evaluation through circulation of performance evaluation sheets based onSEBI Guidance Note dated 5th January 2017 and that only Board should carry outperformance evaluation of Board Committees and Individual Directors. An assessment sheetbased on aforesaid SEBI Guidance Note containing the parameters of performance evaluationalong with rating scale was circulated to all the Directors. The Directors rated theperformance against each criteria. Thereafter consolidated score was arrived. Pursuant tothe provisions of the Companies Act 2013 and Listing Regulations the Board has carriedout performance evaluation of its own evaluation of working of the Committees andperformance evaluation of all Directors in the said manner.
A meeting of Independent Directors of the Company was held on 7st February2019 in which Independent Directors inter-alia reviewed performance of Mr. AnilKumar Jain Non-Executive Chairman and Mr. S. K. Agrawal Non-Independent Director and theBoard as a whole through performance evaluation sheets.
Particulars of Employees and related disclosures
The information required pursuant to Section 197 read with Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is provided as "Annexure 2"to this report regarding remuneration of Directors Key Managerial Personnel and otherrelated disclosures.
During the year under review Audit Committee was re-constituted by appointment of Ms.Smita Kulkarni as a Chairperson and cessation of Mr. Anilkumar Indralal Gulati as Chairmanw.e.f. 28th June 2018.
As on 31st March 2019 Audit Committee comprises of 4 (Four) members viz.Ms Smita Kulkarni Independent Director as Chairperson Mr. Govind Prasad Agrawal and Mr.Venkiteswaran Venkitaswaran Parlikad as Non-Executive Independent Directors and Mr.SushilKumar Krishna Agrawal as Non-Executive Non-Independent Director.
More details on the Audit Committee are given in Corporate Governance Report. All therecommendations made by the Audit Committee were accepted by the Board.
In accordance with the provisions of Section 139 of the Act at the Annual GeneralMeeting ("AGM") held on 21st August 2017 M/s. Pawan Shubham &Co. Chartered Accountants (Firm Registration No. 011573C) were appointed as Auditors fora period of 5 years commencing from the conclusion of 26th AGM till theconclusion of the 31st AGM of the Company subject to ratification by membersat every Annual General Meeting.
The requirement to place the matter relating to appointment of Auditors forratification by Members at every Annual General Meeting was omitted vide notificationdated 7th May 2018 issued by the Ministry of Corporate Affairs. is proposed forratification of appointment of Auditors in ensuing AGM of the Company.
The Company has received a letter from M/s. Pawan Shubham & Co. CharteredAccountants confirming that they are eligible for continuing as Statutory Auditors of theCompany.
The Auditors' Report on standalone financial st March 2019 forms partstatementsfortheyearended31 of this Annual Report. The Auditors' Report does notcontainanyqualificationsreservations adverse remarks disclaimer or emphasis of matter.
Notes to the Financial Statements are self-explanatory and do not call for any furthercomments.
Secretarial Auditors and Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Act read with rules thereunder theBoard has appointed M/s. Ashu Gupta
& Co. a firm of Practicing Company Secretaries to conduct Secretarial Audit of theCompany for the year ended 31st March 2019. The Secretarial Audit Reportissued by them in Form No. MR-3 is provided as an "Annexure 3" to this Report.The
Secretarial Audit Report does not contain any qualifications reservations or adverseremarks.
During the year under review your Company has not accepted any deposits from publicunder Chapter V of the Act.
Vigil Mechanism/Whistle Blower Policy
Pursuant to the provision of Section 177(10) of the Companies Act 2013 and Regulation22 of the Listing Regulations 2015 the Board of Directors of the Company has establishedVigil Mechanism/Whistle Blower Policy. The details of the Vigil
Mechanism/Whistle Blower are provided in the Corporate Governance Report. The VigilMechanism and Whistle Blower policy can be accessed on the website of the Company and theweb-link thereto is http://www.margofinance.com/upload/Whistle%20Blower%20Policy%20Vigil%20Mechanism%20annexure-III.pdf
Corporate Governance Report
As per Regulation 34(3) read with Schedule V of the Listing Regulations your Companyhas complied with the requirements of corporate governance. The Corporate GovernanceReport along with Statutory Auditors' Certificate of Corporate Governance for the yearended 31st March 2019 is provided separately and forms integral part of thisAnnual Report.
Related Party Transactions
All Related Party Transactions entered during FY 2018-19 were on arm's length basis andin the ordinary course of business. Further there were no material related partytransactions during FY 2018-19 under Section 188 of the Act and Regulation 23 of ListingRegulations. Hence pursuant to the provisions of Section 134 of the Act particulars ofcontracts/ arrangements with Related Parties are not required to be provided in FormAOC-2. The related party transactions are provided in the notes to the financialstatements.
Prior approval of Audit Committee is obtained for all Related Party Transactions. Astatement of all Related Party Transactions is reviewed by the Audit Committee and Boardon quarterly basis. Your Company has adopted a policy on Related Party Transactions and isuploaded on the website of the Company athttp://www.margofinance.com/upload/Related%20Party%20 Transaction-Policy.pdf
Particulars of Loans Investments Guarantees Securities under Section 186 of theCompanies Act 2013
During the year under review pursuant to Section 186 of the Act no loans were givento any person nor any Guarantees or securities were provided. Further no investment wasmade in the securities of any other body corporate.
Familiarization of Independent Directors
The details of programme for familiarisation of Independent Directors with the Companytheir roles rights responsibilities in the Company nature of the industry in which theCompany operates business model of the Company and related matters are put up on thewebsite of the Company at the www.margofinance.com and the web-link thereto ishttp://www.margofinance.com/upload/Familarisation%20programme%20for%20Independent%20Directors.pdf
Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo
The Company operates in a Service Sector as a Non-Banking Financial Company (NBFC) andtherefore energy consumption is only limited to electricity required for officefunctioning for administration functions. However necessary initiatives have been takenby the Company from time to time for optimum utilization of energy. Since the conservationimpact is minimal it cannot be quantified.
The Company has not made any capital investment on energy conservation equipment.
Since the Company has not imported technology disclosure on technology absorption isnot applicable.
During the year under review there was no foreign exchange inflow or outflow.
Management Discussion & Analysis Report
Management Discussion and Analysis Report for the year under review as stipulatedunder the Listing Regulations 2015 is presented in a separate section forming part of theAnnual Report.
Policy on Prevention Prohibition and Redressal of Sexual Harassment of Women atworkplace
In order to prevent sexual harassment of women at workplace your Company has adopted apolicy for prevention of Sexual Harassment of Women at workplace under the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013. TheCompany is not Constitution of Internal Complaints Committee.
Significant or Material orders passed by Regulators / Courts
During the year under review no significant or material orders were passed by theRegulators or Courts or Tribunals which may impact the going concern status and Company'soperations in future.
Material Changes and Commitments affecting the Financial Position of the Company
There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year 2018-19 and the date ofthis report.
Compliance with Applicable Secretarial Standards
During the year under review your Company has complied with all the applicablestandards. The same has also been confirmed by Secretarial Auditors of the Company.
During the year under review provisions relating to the Cost Records Cost Audit andCorporate Social Responsibility were not applicable to your Company.
Acknowledgements and Appreciation
Your Directors take this opportunity to thank Central and State Governments customersinvestors and bankers for their consistent support and co-operation to the Company. Weplace on record sincere appreciation for the contribution and commitment by all theemployees of the Company.