MORARKA FINANCE LIMITED
The Directors are pleased to present their Thirty Sixth (36th) Annual Reportto the members together with the Audited Financial Statements of the Company for the yearended March 31 2021.
1. FINANCIAL RESULTS [Amount in Rs.]
| ||For the year Ended 31/03/2021 ||For the year Ended 31/03/2020 |
|Profit / (Loss) before tax ||9179036 ||49758397 |
|Less: Current Tax ||2280703 ||62266 |
|Provision for taxation earlier year ||- ||- |
|Deferred Tax ||47953 ||230574 |
|Fringe Benefit Tax ||- ||- |
|Profit / (loss) after tax ||6850380 ||49465557 |
|Add: Balance b/f from previous years ||110675430 ||61209873 |
|Less: Appropriations ||- ||- |
|Transfer to reserve Fund u/s 45 IC of RBI Act ||1370076 ||- |
|Dividend Paid ||- ||- |
|Dividend Tax thereon ||- ||- |
|Balance carried to balance sheet ||116155733 ||110675430 |
2. FINANCIAL PERFORMANCE
For the financial year ended March 31 2021 your company has posted Profits ofRs.68.50 lakhs compared to the profit for the financial year ended March 31 2020 ofRs.494.65 lakhs.
3. COVID-19 IMPACT
In the last month of FY 2020 the COVID-19 pandemic developed rapidly into a globalcrisis forcing governments to enforce lock-downs of all economic activity. For theCompany the focus immediately shifted to ensuring the health and well-being of allemployees and as of March 19 2020 work from home was enabled. The focus of the Companyis to ensure the health and well-being of all the concerned. To ensure safety of theemployees work from home is still instilled by the Company. The Company is motivated andkeeping positive outlook for its future growth and prospects.
4. TRANSFER TO RESERVE
As required by section 45-IC of the RBI Act 1934 the Company maintains a reserve fundand transfers there in a sum not less than twenty per cent of its net profit every year asdisclosed in the statement of profit and loss and before any dividend is declared.
5. SUBSIDIARIES JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR
The Company does not have any Subsidiary Joint Ventures or Associate Companies.
Your directors has recommended dividend of Rs. 1/- per share (i.e. 10%) for thefinancial year 2020-21.
7. SHARE CAPITAL
The paid up Equity Capital of your company as at March 31 2021 was Rs. 45021000/-The company has not issued any shares with differential voting rights and it has notgranted any stock options or sweat equity during the year under the review. Further noneof the directors of the company hold instruments convertible into equity shares of thecompany.
Pursuant to Section 152(6) of the Companies Act 2013 read with Schedule IV andArticles of the company Shri G. R. Morarka Director retire by rotation and beingeligible offers himself for re-appointment.
Ms. K. Savitha Rao was appointed as an Additional Director by the Board of Directors ason November 13 2020. Ms. Priyanka G. Morarka was retired by rotation in previous AGM andwas appointed as a Director of the Company through Postal ballot on December 19 2020. Thebrief resume/details relating to Directors who are to be appointed / re-appointed as aboveare furnished in the Corporate Governance Report.
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 Companies act2013.
9. CHANGE IN NATURE OF BUSINESS
There is no change in nature of business of the company.
10. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
No Material changes have occurred subsequent to the close of the financial year of theCompany to which the balance sheet relates and the date of the report.
11. 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.
12. HUMAN RESOURCES
The company is having six Directors Chief Executive Officer Chief Finance Officer andCompany Secretary being key managerial personnel under Section 203 of the Companies Act2013. All are experts in their relevant fields. Companys well-disciplined workforcewhich has served the company for years lies at the very foundation of the companysmajor achievements.
13. 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 todays 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.
14. 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 trying times of non-production period the Company continues to ensureproper and adequate systems and procedures in commensurate with its size and nature of itsbusiness.
15. 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 Blower Mechanismsfunctioning is reviewed by the Audit Committee from time to time. None of thecompanys employees are denied access to audit committee.
16. EVALUATION OF BOARD
As per the provisions of the Companies Act 2013 a structured questionnaire wasprepared after taking into account various aspects of Boards functioningcomposition of board together with its committees culture execution and performance ofspecific roles duties and obligation. So far as the performance evaluation of independentdirectors are concerned the same is done by Board. The Chairman is evaluated by theindependent directors. The board has expressed that they are satisfied with process ofevaluation.
17. 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 responsible to identify persons who are qualified to becomedirectors on the Board and to evaluate them on criteria such as academic qualificationsprevious experience track record and integrity of the persons identified beforerecommending their appointment to the Board. The compensation policy of the company dulyreviewed and recommended by the Nomination and Remuneration committee has been articulatedin line with the requirements of the Companies Act 2013 and placed on below mentionedweblink: https://www.morarkafinance.in/investor-relations/mfl-policies-codes-agreements.
The companys compensation policy is aimed to attract retain reward and motivatetalented individuals critical for achieving strategic goals and long term success. Remunerationpolicy is aligned to business strategy market dynamics internal characteristics andcomplexities within the organization. The ultimate objective is to provide a fair andtransparent structure that helps the organization to retain and acquire the talent poolcritical in building competitive advantage and brand equity.
The compensation system also takes 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 attending meetings ofthe Board and its Committees. Non- executive directors are also reimbursed with expensesincurred by them for attending meetings of the Board and its Committees at actuals. Theremuneration payable to the Non- executive directors and Independent Directors is governedby the provisions of the Companies Act 2013. The company does not have any subsidiary andhence holding directorships by any of the directors of the company in subsidiary is notapplicable in case of the company. Shri B. J. Maheshwari and Shri Vijay S. Banka haverelinquished their sitting fees payable to them for attending the Board/ Committeemeetings.
18. MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors of the Company met Four (4) times during the year June 222020 August 13 2020 November 13 2020 & February 12 2021.
19. RELATED PARTY TRANSACTIONS
Related party transactions that were entered during the financial year were on anarms length basis related party transactions with the Companys PromotersDirectors course of business. There were no materially significant Management or theirrelatives which could have had a potential conflict with the interests of the relatedparties entered by the Company in the normal course of business are periodically placedbefore the Audit Committee for its omnibus approval and the particulars of contractsentered during the year as per Form AOC-2 is enclosed herewith and marked as Annexure I.The Board of Directors of the Company has on the recommendation of the Audit Committeeadopted a policy to regulate transactions between the Company and its Related Parties incompliance with the applicable provisions of the Companies Act 2013 the rules thereunderand the Listing Regulations.
20. 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.
21. STATEMENT OF DIRECTORS 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 2021 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 Statements havebeen selected and applied consistently and judgement and estimates have been made that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at March 31 2021 and of the profit of the Company for the year date; ended onthat
c. that proper and sufficient care has been taken for the maintenance of provisions ofthe Companies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;
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 were inplace and were adequate and operating effectively.
22. CORPORATE GOVERNANCE
In accordance with Regulation 34 of SEBI (LODR) Regulations 2015 Corporate GovernanceReport along with Auditors certificate thereon is enclosed and forms part of thereport.
23. EXTRACT OF ANNUAL RETURN
Pursuant to Section 92(3) of the Companies Act 2013 the extract of the Annual Returnin form MGT 9 is provided on the website of the Company and same can be view at this linkhttps://www.morarkafinance.in/investor-relations/mfl- .
24. PARTICULARS OF EMPLOYEES
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 II.
All the non-executive directors of the company due to financial constraints beingremuneration. Further no sitting fees has been paid to any director during the yearexcept to Shri S. H. Nevatia Ms. K. Savitha Rao 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.
25. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The Company has put in place internal policy on Anti Sexual Harassment. No complaintshave been received under this policy during the year.
26. 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.
M/s. B P Gharda & Co. Chartered Accountants Firm Reg. No. 103155W Mumbai wereappointed as the Statutory Auditors of theCompanyattheAGMheldonSeptember262018toholdoffice until the conclusion of thefifthconsecutive AGM are ratified for the Financial Year 2021-22. As required under theprovisions of Section 139 of the Companies Act 2013 the Company has obtained writtenconfirmation from M/s. B P Gharda & Co. that their appointment is made in conformitywith the limits specified in the said Section.
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 III. The observations in the said report are self-explanatoryand no further comments/explanations are called for.
28. AUDITORS REPORT
There are no adverse remarks or observations of the Statutory Auditors in their Report.
29. 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.
30. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
No Loans Guarantees or investments are made under Section 186 of the Act during theyear.
31. 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.
The Companys Equity Shares are listed on Bombay Stock Exchange Limited (BSE).
33. 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.
34. REPORTING OF FRAUDS
There have been no instances of fraud reported by the Statutory Auditors under Section143(12) of the Companies Act 2013 & Rules framed thereunder either to the Company orto the Central Government.
Your Directors take this opportunity to place on record their appreciation for theco-operation received from Employees and overwhelming support extended by theshareholders.
FOR MORARKA FINANCE LIMITED
G. R. MORARKA
(DIN : 00002078)
B. J. MAHESHWARI
(DIN : 00002075)
Place : Mumbai
Dated: May 21 2021