Monarch Networth Capital Limited
On behalf of the Board of Directors (the Board) it gives me great pleasureto present the 25th Board's Report of your Company along with the Balance SheetStatement of Profit and Loss and Statement of Cash Flow for the financial year ended March31 2018.
I. FINANCIAL PERFORMANCE:
The standalone and consolidated financial statements for the financial year ended March31 2018 forming part of this Annual Report have been prepared in accordance with theIndian Accounting Standards (Ind AS) as notified by the Ministry of Corporate Affairs.
On Standalone basis the total revenue of the Company for the year under review stoodat INR 7334.54 Lakhs (previous year INR 5409.94 Lakhs). During the year the Company earnednet profit of INR 1566.30 Lakhs (previo0us year profit of INR 1174.56 Lakhs).
On Consolidated Basis the total revenue of the Company for the year under review stoodat INR 9026.19 Lakhs (previous year INR 6495.63 Lakhs). During the year the Company earnednet profit of INR 1842.90 Lakhs (previous year profit of INR 1294.80 Lakhs).
Key highlights of the financial performance of the Company is summarized below:
|Particulars || |
Standalone Year ended
Consolidated Year ended
|Year ended 31st March 2018 ||Year ended 31st March 2017 ||Year ended 31st March 2018 ||Year ended 31st March 2017 |
|Revenue & other Income ||7897.92 ||6142.11 ||9458.36 ||7260.31 |
|Finance Cost ||16457607 ||29569758 ||22510277 ||30340632 |
|Depreciation & Amortization Expenses ||8755810 ||12971242 ||8958661 ||13188924 |
|Profit before Tax ||1786.16 ||1265.89 ||2157.65 ||1453.76 |
|Tax Expenses ||170.87 ||142.99 ||263.50 ||208.07 |
|Short & Excess Tax Provision ||1524394.42 ||0 ||1416693 ||-91025 |
|Current Tax ||38100000 ||16836000 ||47350000 ||20964740 |
|Deferred tax ||1863202 ||-2536071.35 ||1984225 ||-66005 |
|Mat Receivable ||-24400441 ||0 ||-24400441 ||0 |
|Net profit for the year ||1615.29 ||1122.89 ||1894.15 ||1245.68 |
|Other comprehensive (loss)/income for the year ||-48.98 ||51.67 ||-48.98 ||51.67 |
|Total comprehensive income for the year ||1566.30 ||1174.56 ||1845.16 ||1297.36 |
|Total comprehensive income for the period attributable to: || || || || |
|Minority Interest ||- ||- ||(00.03) ||(00.02) |
|Share of Profit/(Loss) from Associates EPS: ||- ||- ||(2.23) ||(2.53) |
|- Basic ||5.17 ||3.87 ||6.08 ||4.27 |
|- Diluted ||5.17 ||3.87 ||6.08 ||4.27 |
As on March 312018 the paid up equity share capital of the company was INR303116000 i.e. 30311600 equity shares of INR 10 each. There was no change in Paid-upShare Capital of the Company during the Financial Year 2017-18.
Key highlights of the Segment wise financial performance is summarized below:
|Particulars || |
Standalone Year ended
Consolidated Year ended
| ||Year ended 31st March ||Year ended 31st March ||Year ended 31st March ||Year ended 31st March |
| ||2018 ||2017 ||2017 ||2018 |
|1) Broking ||7464.75 ||5388.94 ||7947.27 ||5831.21 |
|2) Wealth Management ||0 ||0 ||77.72 ||33.20 |
|3) Non Banking financial business ||0 ||0 ||875.37 ||608.52 |
|4) Merchant Banking Income ||87.8 ||21.00 ||87.80 ||21.00 |
|5) Other (Un-allocated) ||0 ||0 ||38.48 ||2.08 |
In order to conserve the resources for future business requirements your Directors donot recommend dividend for the year under review.
Your Company has not accepted any deposits from public and as such no amount onaccount of principal or interest on public deposits was outstanding as on the date of thebalance sheet.
Subsidiaries and Associate Companies:
The company has incorporated subsidiary company Monarch Networth Capital IFSCPrivate Limited on 14th March 2017. Since there are no activities carried outduring the financial year 2017-18 account's has not been merged in Consolidated FinancialStatement of the Company.
The Company has 6 (six) Subsidiary Companies and 2 (two) Associate Companies as on 31stMarch 2018. During the year the Board of Directors ('the Board') reviewed the affairsof the subsidiaries. In accordance with Section 129(3) of the Companies Act 2013 we haveprepared consolidated financial statements of the Company and all its subsidiaries exceptfor Monarch Networth Capital IFSC Private Limited which form part of theAnnual Report. Further a statement containing the salient features of the financialstatement of our subsidiaries and associates in the prescribed format AOC-1 is appended asAnnexure II to the Board's report. The statement also provides the details of performancefinancial positions of each of the subsidiaries. The policy on material subsidiary isavailable on the Company's website viz. https://www.mnclgroup.com/investor-relation/investor-relation-policy;
The Company does not have any Joint Venture.
In accordance with Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of theCompany and audited accounts of each of its subsidiaries are available on the Company'swebsitehttps://www.mnclgroup.com/investor-relation/investor-relation-financials-annual-reports; .These documents will also be available for inspection at the registered office of theCompany and of the subsidiary companies during business hours on all working days andduring the Annual General Meeting.
Particulars of Loans Guarantees or Investments:
Pursuant to Section 186 of Companies Act 2013 and Schedule V of the ListingRegulations disclosure on particulars relating to loans advances guarantees andinvestments are provided as part of the financial statements.
Merger of it's Subsidiaries and Associate Companies with the Company:
At its meeting held on February 14 2018 the Board considered and approved a schemeof amalgamation pursuant to Sections 230 to 232 read with Section 234 and other relevantprovisions of the Companies Act 2013 providing for the merger of its wholly ownedsubsidiary company- Networth Insurance Broking Pvt Ltd Networth Wealth Solution Ltd itssubsidiary company- Monarch Networth Comtrade Ltd and Associate Company- Networth SoftTechLtd with the Company- Monarch Networth Capital Limited. The scheme of amalgamation issubject to necessary statutory and regulatory approvals under applicable laws includingapproval of the National Company Law Tribunal in India. The scheme of amalgamation will
inter alia enable consolidation of resources of the Transferor Companies with theTransferee Company thereby providing greater efficiency in operations and administrativeaffairs of the Transferee Company and thus optimizing the valuation of the consolidatedcompany and its shareholders. It will also result in following benefits
Financial strength and flexibility for the Transferee Company which wouldresult in maximizing overall shareholder value.
Achieve greater efficiencies in operations with optimum utilization ofresources better administration and reduced cost.
Cost savings are expected to flow from more focused operational effortsrationalization standardization and simplification of business processes productivityimprovements and the elimination of duplication and optimum rationalization ofadministrative expenses and utilization of human resources.
Greater efficiency in cash management of the amalgamated entity and pooling ofcash flow generated by the combined entities which can be deployed more efficiently tofund organic and inorganic growth opportunities to maximize shareholder value
Improved organizational capability and leadership arising from pooling offinancial managerial and technical resources.
Effective Margin Management to the clients of the Transferor and the TransfereeCompany.
Management Discussion and Analysis Report:
In terms of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Management Discussion and Analysis Report which gives a detailedaccount of state of affairs of the Company's operations forms part of this Annual Reportas Annexure -VI
II. GOVERNANCE AND ETHICS:
Your Company believes in adopting best practices of corporate governance. Corporategovernance principles are enshrined in the Spirit of Monarch Networth which form the corevalues of the Company. These guiding principles are also articulated through the Company'scode of business conduct Corporate Governance guidelines charter of varioussub-committees and disclosure policy. As per regulation 34 read with Schedule V of ListingObligations and Disclosure Requirements Regulations 2015 LODR a separate section oncorporate governance practices followed by your Company together with a certificate fromVKM & Associates Practising Company Secretaries on compliance with corporategovernance norms under the Listing Regulations is provided as Annexure -V to thisAnnual Report.
Board of Director's
As on March 31 2018 the Board comprised of two Executive Directors- Mr. VaibhavJayantilal Shah- Managing Director and Mrs. Manju Suresh Bafna-Whole-Time Director andalso three Non-Executive Independent Director's. The Company has received necessarydeclarations from the Independent Directors stating that they meet the prescribed criteriafor independence. Based on the confirmations/disclosures received from the Directors underSection 149(7) of the Companies Act 2013 and on evaluation of the relationships disclosedthe following Non-Executive Directors are considered as Independent Directors:
a) Mr. Mayukh Pandya
b) Mr. Shailesh Desai
c) Mr. Chetan Bohra
Meetings of the Board:
The Board met 08 (Eight) times during the financial year 2017-18 i.e. on 28th April2017 30th May 2017 31st July 2017 22nd August 2017 04th September 2017 23rdNovember 2017 20th December 2017 and 14th February 2018. The maximum interval betweenany two meetings did not exceed 120 days.
Director's and Key Managerial Personnel:
Pursuant to the provisions of Section 152 of the Companies Act 2013 read withCompanies (Management & Administration) Rules 2014 and Articles of Association of theCompany Mr. Vaibhav Shah Managing Director retires by rotation and being eligible hasoffered himself for re-appointment.
Mrs. Manju Bafna Whole-Time Director of the Company has been re-appointed for a periodof 05 years w.e.f 13th February 2018 and Mr. Vaibhav Shah Managing Director for a periodof 05years w.e.f. 01st December 2018 subject to the approval of shareholder's in ensuingAGM.
Your Board recommend's their appointment / re-appointment of the above Director.
The Company has formulated code of conduct on appointment of directors and seniormanagement. This code of conduct can be accessed on the website of the Company at the linkhttps://www.mnclgroup.com/investor-relation/investor-relation-code-of- conduct;
Additional Information on directors recommended for appointment/re-appointment asrequired under Regulation 36 (3) of the SEBI (Listing and Obligation DisclosureRequirements) Regulations 2015 at ensuing Annual General Meeting is given in the Noticeconvening 25th Annual General Meeting.
The Equity Shares of the Company are listed at BSE Limited. The Company has paid theAnnual listing fees for the year 20172018 to the said Stock Exchange.
Corporate Social Responsibility: CSR is applicable to the Company for the financialyear 2017-2018 and the details of the CSR Policy and Report forms part of this AnnualReport as Annexure -VII
Annual Performance Evaluation by the Board:
SEBI (Listing and Obligation Disclosure Requirements) Regulations 2015 mandates thatthe Board shall monitor and review the Board evaluation framework. The framework includesthe evaluation of directors on various parameters such as:
i. Board dynamics and relationships
ii. Information flows
iv. Relationship with stakeholders
v. Company performance and strategy
vi. Tracking Board and committee's effectiveness
vii. Peer evaluation
Pursuant to the provisions of the Companies Act 2013 a formal annual evaluation needsto be made by the Board of its own performance and that of its committees and individualdirectors. Schedule IV of the Companies Act 2013 states that the performance evaluationof the independent directors shall be done by the entire Board of Directors excluding thedirector being evaluated. The Board works with the nomination and remuneration committeeto lay down the evaluation criteria.
The Board has carried out an evaluation of its own performance the directorsindividually as well as the evaluation of the working of its Audit Committee Nomination& Remuneration Committee and Stakeholders Relationship Committees of the Company. TheBoard has devised questionnaire to evaluate the performances of each of executivenon-executive and Independent Directors. Such questions are prepared considering thebusiness of the Company and the expectations that the Board have from each of theDirectors. The evaluation framework for assessing the performance of Directors comprisesof the following key areas:
i. Attendance of Board Meetings and Board Committee Meetings;
ii. Quality of contribution to Board deliberations;
iii. Strategic perspectives or inputs regarding future growth of Company and itsperformance;
iv. Providing perspectives and feedback going beyond information provided by themanagement.
v. Ability to contribute to and monitor our corporate governance practices
Committees of the Board:
There are currently four Committees of the Board as follows:
1. Audit Committee
2. Stakeholders' Relationship Committee
3. Nomination and Remuneration Committee
4. Corporate Social Responsibility Committee (constituted on 04th September 2017)
Details of all the Committees along with their charters composition and meetings heldduring the year are provided in the Report on Corporate Governance and forms part of thisAnnual Report.
Whistle Blower Policy:
The Company has adopted a Vigil mechanism / Whistle blower Policy to deal with instanceof fraud and mismanagement if any. The Company had established a mechanism for directorsand employees to report concerns about unethical behavior actual or suspected fraud orviolation of our Code of Conduct and Ethics. The mechanism also provides for adequatesafeguards against victimization of directors and employees who avail of the mechanism andalso provide for direct access to the Chairman of the Audit Committee in the exceptionalcases. The details of the Vigil mechanism Policy is explained in the report of Corporate
Governance and also posted on the website of the Company athttps://www.mnclgroup.com/investor-relation/investor-relation- policy; We affirm thatduring the financial year 2017-18 no employee or director was denied access to the AuditCommittee.
Pursuant to provisions of Section 178 of the Companies Act 2013 and SEBI (Listing andObligation Disclosure Requirements) Regulations 2015 and on the recommendation of theNomination and Remuneration Committee the Board has adopted a Policy on criteria forappointment of Directors Key Managerial Personnel Senior Management and theirremuneration. The salient features of the Remuneration Policy are stated in the Report onCorporate Governance which form's part of this Annual Report and also hosted on thewebsite of the Company -https://www.mnclgroup.com/investor-relation/investor-relation-policy;
Particulars of Contracts or Arrangements with Related Parties:
Your Company has historically adopted the practice of undertaking related partytransactions only in the ordinary and normal course of business and at arm's length aspart of its philosophy of adhering to highest ethical standards transparency andaccountability. In line with the provisions of the Companies Act 2013 and the ListingRegulations the Board has approved a policy on related party transactions. An abridgedpolicy on related party transactions has been placed on the Company's website:https://www.mnclgroup.com/investor-relation/investor-relation-policy;
All Related Party Transactions are placed on a quarterly basis before the AuditCommittee and before the Board for approval. Prior omnibus approval of the Audit and theBoard is obtained for the transactions which are of a foreseeable and repetitive nature.
All Related Policy Transactions entered during the year were in Ordinary Course of theBusiness and on Arm's Length basis. No Material Related Party Transactions entered duringthe year by your Company as per Section 188 of the Companies Act 2013 which requireapproval of the member. Accordingly the disclosure of Related Party Transactions asrequired under Section 134(3) of the Companies Act 2013 in Form AOC-2 is not applicableto the Company.
Information under the Sexual Harrassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013:
Your Company recognises its responsibility and continues to provide a safe workingenvironment for women free from sexual harassment and discrimination. In Compliance withthe Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013 the Company has put in place a Policy on prevention of Sexual Harassment of Women atworkplace. The policy can be accessed on the website of the Company at the link -https://www.mnclgroup.com/investor-relation/investor-relation- policy.
Your Directors further state that the during the fiscal year 2017-18 there were nocomplaints received pursuant to the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. The following is reported pursuant to Section 22 ofthe Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013:
a) Number of complaints received in the year : Nil
b) Number of complaints disposed off during the year : Nil
c) Number of cases pending more than ninety days: Nil
d) Number of workshops or awareness programme against sexual harassment carried out:The Company has conducted an online training for creating awareness against the sexualharassment against the women at work place.
e) Nature of action taken by the employer or district officer: Not applicable
Risks and Areas of Concern:
The Company has laid down a well-defined Risk Management Policy to identify the riskanalyse and to undertake risk mitigation actions. The Board of Directors regularlyundertakes the detailed exercise for identification and steps to control them through awell-defined procedure.
Directors' Responsibility Statement:
As required under Section 134(3)(c) of the Companies Act 2013 and according to theinformation and explanations received by the Board your Directors state that:
a. in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
b. the directors have 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 have 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 have prepared the annual accounts on a going concern basis;
e. the directors have 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 have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Particulars of Remuneration:
Pursuant to Section 197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial personnel Rules 2014 details ofthe ratio of remuneration of each Director to the median employee's remuneration areappended to this report as Annexure IN.
During the year under review no employee was in receipt of remuneration exceeding thelimits as prescribed under provisions of Section 197 of the Companies Act 2013 and Rule5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules2014.
IV. INTERNAL FINANCIAL CONTROLS AND AUDIT Internal Financial Controls and theirAdequacy
The Board of your Company has laid down internal financial controls to be followed bythe Company and that such internal financial controls are adequate and operatingeffectively. Your Company has adopted policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial disclosures.
The Company has re-appointed Nautam Vakil & Co. Chartered Accountants Ahmedabadas its Internal Auditor vide Board Meeting dated 30th May 2017. Further vide BoardMeeting dated 31st July 2017 Akshay Mohnot & Co Chartered Accountants Firm Reg No.123209W were appointed as Internal Auditor in place of Nautam Vakil & Co. The InternalAuditor has given his reports on quarterly basis to the Audit Committee.
Based on the report of internal audit management undertakes corrective action in therespective areas and strengthens the levels of Internal Financial and other operationalcontrols.
At the 22nd Annual General Meeting of the Company held on 30th September 2015 M/s.Parekh Shah and Lodha Chartered Accountants Mumbai (having FRN: 107487W) were appointedas Statutory Auditors of the Company to hold office upto the conclusion of 26th AnnualGeneral Meeting.
Vide notification dated May 7 2018 issued by Ministry of Corporate Affairs therequirement of seeking ratification of appointment of statutory auditors by members ateach AGM has been done away with. Accordingly no such item has been considered in noticeof the 25th AGM.
The Auditor's Report for the year ended 31st March 2018 does not contain anyqualification reservation or adverse remark. Pursuant to provisions of Section 143(12) ofthe Companies Act 2013 the Statutory Auditors have not reported any incident of fraud tothe Audit Committee during the year under review. The Auditor's Report is enclosed withFinancial Statements in this Annual Report.
Secretarial Audit Report:
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 has appointed Mr.Vijay Kumar Mishra Partner VKM & Associates a firm of Company Secretaries inPractice to conduct Secretarial Audit of the Company. The Report of the Secretarial Auditin Form MR-3 for the financial year ended March 31 2018 is enclosed as Annexure IV tothis Report. There are qualifications reservations or adverse remarks made by theSecretarial Auditor in his report which is stated below:
Secretarial Auditor's Remarks:
The Company has Given Loans on interest free basis and has not followed provision ofsection 186 of Companies Act 2013 and Corresponding erstwhile section under CompaniesAct 1956.
With respect to the Remark(s)/Observations or disclaimer made by the SecretarialAuditors in their Report we hereby state that the loans given by the Company aretemporary in nature and are repayable on demand.
Particulars of Conservation of Energy Techonology Absorption and Foreign ExchangeEarnings and Outgo:
Pursuant to Section 134(3)(m) of the Companies act 2013 read with Rule 8 of theCompanies (accounts) rules 2014 details
regarding the Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo for the year under
review are as follows:
A. Conservation of Energy
a. Steps taken or impact on conservation of energy - The Operations of the Company donot consume energy intensively. However the Company continues to implement prudentpractices for saving electricity and other energy resources in day-to-day activities.
b. Steps taken by the Company for utilizing alternate sources of energy - Though theactivities undertaken by the Company are not energy intensive the Company shall explorealternative sources of energy as and when the necessity arises.
c. The capital investment on energy conservation equipment - Nil
B. Technology Absorption
a. The efforts made towards technology absorption - The Company continues to takeprudential measures in respect of technology absorption adaptation and take innovativesteps to use the scarce resources effectively.
b. The benefits derived like product improvement cost reduction product developmentor import substitution- Not Applicable
c. In case of imported technology (imported during the last three years reckoned fromthe beginning of the financial year) - Not Applicable
d. The expenditure incurred on Research and Development - Not Applicable
VI. OTHER DISCLOSURES
The Particulars of Foreign Exchange and Outgo for the year under review are as follows:
|Particulars ||Year ended 31st March 2018 ||Year ended 31st March 2017 |
|Foreign exchange earning ||Nil ||8157.12 |
|Foreign exchange Outgo ||Nil ||Nil |
Extract of Annual Return:
Pursuant to Section 92(3) and Section 134(3)(a) of the Companies Act 2013 extract ofthe Annual Return as on March 312018 in form MGT-9 is enclosed as Annexure I to thisreport.
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 between the end of the financial year to which the financialstatements relate and the date of this report.
Details of Significant and Material Orders Passed by the Regulators or Courts orTribunals impacting the Going Concern Status and Company's Operations in Future:
There was no significant or material order passed by any regulator or court ortribunal which impacts the going concern status of the Company or will have bearing oncompany's operations in future.
Your Directors wish to place on record their gratitude and deep appreciation for thecontinued support and co-operation received by the Company from the shareholderscompany's clients suppliers bankers business partners/ associates financialinstitutions and employees and look forward for their continued support in the future aswell.
| || |
For and on behalf of the Board of Directors
| ||Sd/- ||Sd/- |
|Place: Mumbai ||Vaibhav Shah ||Manju Bafna |
|Date: 03rd September 2018 ||Chairman cum Managing Director ||Whole-Time Director |
| ||DIN: 00572666 ||DIN: 01459885 |