To The Members
Your Directors have pleasure in presenting their Twenty Seventh Annual Report togetherwith the Audited Accounts for the year ended March 312018 FINANCIAL RESULTS:
|Particulars ||2017-2018 ||2016-2017 |
| ||Rs.in 000 ||Rs. in 000 |
|Total Revenue ||15444.07 ||11033.03 |
|Total Expenses ||13716.84 ||11213.23 |
|Profit or Loss before Exceptional and Extraordinary items and Tax ||1727.23 ||(180.20) |
|Less: Exceptional Items ||- ||- |
|Less: Extraordinary Items ||- ||- |
|Profit /(Loss)before Tax ||1727.23 ||(180.20) |
|Less: Current Tax ||- ||- |
|Deferred Tax ||(138.15) ||(99.13) |
|Profit/(Loss) after Tax ||1865.37 ||(81.06) |
|Other Comprehensive Income || || |
|(ii) Gain/(Loss) on measuring equity instrument at Fair Value Through Other Comprehensive Income ||21280.00 ||(3200.00) |
|Total Comprehensive Income for the year ||23145.37 ||(3281.07) |
|Earnings Per Share || || |
|- Basic Earning per Share ||4.51 ||(0.64) |
|- Diluted Earning per Share ||4.51 ||(0.64) |
REVIEW OF BUSINESS OPERATIONS:
During the financial year 2017-18 the Company's total revenue has increased from Rs.11033.03 thousands to Rs. 15444.07 thousands in the current year.
The Company has made a profit of Rs.1865.37.thousands in the current financial year asagainst a loss of Rs 81.06 thousands in the last financial year
Income from stock broking operations has increased from Rs. 1551.13 Thousands in theprevious financial year to Rs. 2346.11 thousands in the current financial year
The broking turnover of the company in cash segment is Rs. 159.75 Crores as compared toRs. 103.30 Crores in the last financial year and in F & O segment is Rs.18.18 Croresas compared to Rs. 9.49 Crores compared in the last financial year.
The Company provides institutional broking business and is empanelled with severalpublic sector banks and insurance companies.
As a Depository Participant the company offers facilities to both institutional andretail investors to maintain their investments in securities in electronic form. Incomefrom Depository operations has increased to Rs. 631.63 Thousands as against Rs. 591.94Thousands in the previous financial year
Merchant Banking & Portfolio Management Services:
The Company continues to provide PMS services under both discretionary and non -discretionary basis.
The Company's MBD division is providing valuation services in accordance with therequirement of the various acts/statutory requirements.
The Company has been appointed as Investment Managers by IL & FS Trust CompanyLimited for Valmark Infra and Realty Trust a SEBI registered Alternate Investment Fund -Category II (AIF II)
Income from Merchant Banking & PMS has increased to Rs 11692.64 Thousands from Rs7502.43 Thousands in the previous year.
The company will continue to focus on Investment Banking Portfolio Management servicesand Institutional Broking business.
INDIAN ACCOUNTING STANDARDS (IND AS)
The Ministry of Corporate Affairs (MCA) on February 15 2015 notified that IndianAccounting Standards (Ind AS) are applicable to certain classes of companies .Ind As hasreplaced the previous Indian GAAP as per the Companies Indian Accounting Standards) Rules2015 notified under Section 133 of Companies 2013 (the Act') and other relevantprovisions of the Act.The financial statements for the year ended March 312018 are thefirst financial statements the Company has prepared in accordance with Ind AS with thedate of transition as April 12016.
The Board of Directors has decided not to recommend any dividend.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:
The provisions of Section 125(2) of the companies Act 2013 do not apply as there wasno dividend declared and paid last year.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHCIHHAS OCCURRED BETWEEN 31ST MARCH 2018( THE END OF THE FINANCIAL YEAR and 28th MAY 2018 (THEDATE OF REPORT)
There were no material changes and commitments affecting the financial position of thecompany between 31st March 2018( the end of the financial year) and 28th May 2018 (thedate of the report).
CONSERVATION OF ENERGY TECHNOLOGYABSORPTION FOREIGN EXCHANGE EARNING AND OUTGO.
The Company has no activities relating to conservation of energy technologyabsorption foreign exchange earning and outgo and hence the provisions of Section 134(m)of the Companies Act 2013 is not applicable to the Company.
STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THECOMPANY
The Risk Management Committee of the Company continuously monitors business andoperations risk through an efficient risk management system.
DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIALRESPONSIBILITY INITIATIVES:
The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as the said provisions are not applicable for the financial year 2017-18.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
The Company has not provided working capital loan Guarantee or provided security. Thedetails of investments made by the company are given in the notes to the financialstatements.
NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW:
The Company has conducted 4 Board meetings during the financial year under review. Theboard is presented with all the relevant information well in advance before each meetingon various matters affecting the working of the company and the Directors have separateand independent access to senior management at all times. The dates of the Board Meetingswere May 23 2017 July 312017 November 24 2017 and February 8 2018.
The Audit Committee comprised of Independent Directors Mr. Ajit Kumbhat (Chairman) Ms.Lakshika Mehta Mr. Mah Sau Cheong and Mr Jaswant Munoth as Members as per therequirement of Section 177 of the Companies Act 2013. All the recommendations made by theAudit Committee were accepted by the Board.
NOMINATION AND REMUNERATION COMMITTEE:
The Remuneration Committee comprised of Ms. Lakshika Mehta (Chairman) Mr. AjitKumbhat Tansri Rajandram.. The committee is vested with all necessary powers andauthority to determine and recommend the remuneration payable to Executive Directors.
COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION ANDDISCHARE OF THEIR DUTIES.
The Company's Policy relating to appointment of Directors payment of managerialremuneration Director's qualifications positive attributes independence of Directorsand other related matters as provided under Section 178(3) of the Companies Act 2013 isfurnished as Annexure 1 and is attached to this report.
SHAREHOLDERS RELATIONSHIP COMMITTEE
Pursuant to Companies Act 2013 the Board of Directors had reconstituted Shareholders'/Investor Greivance Committee with the new name Shareholders relationship committee . Thecommittee specifically looks into the shareholders' and investors' complaints on mattersrelating to transfer of shares nonreceipt of annual report etc. In addition thecommittee also oversees the share transfers and transmission.
The Committee comprised of Ms. Lakshika Mehta (Chairman) Mr. Ajit Kumbhat TansriRajandram Mr. Jaswant Munoth..
The chairperson or the member authorized by him of each of the committees constitutedunder Section
178 attended the general meeting of the Company
The aspects covered in the evaluation included the contribution made by the Directorsto the corporate governance practices long term strategic planning fulfillment ofDirector's obligations and fiduciary responsibilities and active participation at theBoard and Committee meetings. The effectiveness of Board / Committee processes wereassessed based on the Directors' inputs received during the meetings of the Board and oneto one meeting by the Chairman with the Directors.
EXTRACT OF ANNUAL RETURN
The Extract of Annual return as on March 312018 as provided under Sub-section (3) ofsection 92 in Form No. MGT - 9 is being annexed as Annexure 2 to the report
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review as stipulatedunder 34(2)(e) of SEBI(LODR) Regulations is presented in separate section forming part ofthe Annual Report as Annexure 3
DIRECTOR'S RESPONSIBILITY STATEMENT:
As required in Clause (c) of Sub- Section (3) of Section 134 of the Companies Act2013 your Director confirms and 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 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 close of the financial year ended31stMarch 2018 and of the Profit/Loss of the company for the year ended 31st March 2018
c) The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.
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.
f) The Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
The Company has not accepted any public deposits and as such no amount on account ofprincipal or interest on public deposits was outstanding as on the date of balance sheet
DIRECTORS AND KMP
Re appointment of Directors retiring by rotation
Pursuant to Section 152 of the Companies Act 2013 Mr. Lalchand Munoth Mr. BharatMunoth and Mr. Vikas Munoth retire by rotation and being eligble offers themselves forreappointment
Information pursuant to Regulation 36(3) of SEBI (LODR) Regulations
1. Brief resume of Mr. Lalchand Munoth and nature of his expertise in specific areas.
Mr. Lalchand Munoth is retiring by rotation at his Annual General Meeting and beingeligible offers himself for reappointment. Mr. Lalchand Munoth aged 79 years (DOB:05/12/1938) holds a Bachelor Degree in Arts from the Mysore University. He is a seniormember of the board and a guiding figure for the Munoth Team. His stature in the industryand array of corporate relationships are valuable for the Company. He is the architectbehind several successful finance & investment companies and has vast experience inthe finance field. He is the director of the Company since 1990. He is also director ofMisrimal Navajee Estates Private Limited Munoth Industries Limited Munoth BioscienceLimited and South India Chemicals and Leasing Private Limited.
As on March 312018 his shareholding in the Company is 687100 shares and has noshares held by/for other persons on a beneficial basis.
Disclosure of relationships between directors inter-se: Mr. Lalchand Munoth is thefather of Mr. Jaswant Munoth Mr. Bharat Munoth & Mr. Vikas Munoth .
2. Brief resume of Mr. Bharat Munoth and nature of his expertise in specific areas.
Mr. Bharat Munoth is retiring by rotation at this Annual General Meeting and beingeligible offers himself of reappointment. Mr. Bharat Munoth aged 48 years(DOB:02/03/1970) is a commerce graduate and he has extensive knowledge and experience inthe field of finance and investments.
He is the director of the company since 1992.He is also the director of MunothCommunication Limited Munoth Industries Limited Munoth Bioscience Limted South Indiachemicals and Leasing Private Limited Maharana Finance and Investments Private Limitedand Shankeswar Finance and Investments Private Limited.
As on March 312018 his shareholding in the Company is 717900 shares and has noshares held by/for other persons on a beneficial basis.
Disclosure of relationships between directors inter-se: Mr. Lalchand Munoth is thefather of Mr Bharat Munoth and Mr. Jaswant Munoth & Mr. Vikas Munoth are brothers ofMr. Bharat Munoth.
3. Brief resume of Mr.VikasMunoth and nature of his expertise in specific functionalareas:
Mr. Vikas Munoth aged 41 years (Date of Birth : 26/03/1977) holds a Bachelor Degree inCommerce is a Commerce graduate and holds a post-graduate diploma in Business Managementspecialising in Finance and Marketing. He is also a Chartered Financial Analyst andspecialises in fundamental and technical analysis. He has extensive years of experienceand knowledge in the field of Capital Markets. He was appointed as whole time Director onSeptember 27 2001 .He is also the Director of Munoth Communication Limited and MunothIndustries Limited.
As on March 312018 his shareholding in the Company is 994500 shares and has noshares held by/ for other persons on a beneficial basis.
Disclosure of relationships between directors inter-se: Mr. Lalchand Munoth is thefather of Mr. Vikas Munoth and Mr. Bharat Munoth & Mr. Jaswant Munoth are brothers ofMr. Vikas Munoth.
DECLARATION OF INDEPENDENT DIRECTORS:
The independent Directors have confirmed and declared that they are not disqualified toact as an independent Director in compliance with the provisions of Section 149 of theCompanies Act. 2013.
ADEQUACY OF INTERNAL CONTROL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIALSTATEMENTS:
The Company has in place adequate internal financial controls with reference tofinancial statements. During the year under review such controls were tested and noreportable material weakness in the design or operation were observed.
Members of the Company at the AGM held on August 312017 had approved the appointmentof C K Prusty&Associates as the Statutory Auditors for a period of five financialyears and they hold office until the conclusion of the AGM to be held in the year 2022..
A Secretarial Audit was conducted during the year by the secretarial Auditor Mr. NSelvam Practicing Company Secretary in accordance with provisions of section 204 of theCompanies Act 2013. The Secretarial Audit Report is attached as Annexure 4 and forms apart of the report of the Directors.
Cost Audit is not applicable to the Company for the financial year 2017-18
EXPLANATION / COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS.
Mr. Ajit Kumbhat a non executive independent director was disqualified by ministry ofcorporate affairs for non filing of financials for the company- M/s.Kumbhat FinancialServices Limted against which he has got stay order from High Court of Madras. Currentlythe company has filed all the forms required and the status of DIN of Mr.Ajit Kumbhat isactive as on the date of signing this report
SUBSIDIARIES JOINT VENTURES ANDASSOCIATE COMPANIES:
The Company does not have any Subsidiary or Joint venture Company. The nil disclosurein Form No. AOC 1 is enclosed as Annexure 5.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
In line with the requirements of the Companies act 2013 and equity listing Regulationthe Company has formulated a policy on Related Party transactions which is also availableon Company's website at www.munothfinancial.com . The policy intends to ensure that properreporting approval and disclosure procedures are in place for all transactions betweenthe Company and Related Parties.
All Related Party transactions are placed before the Audit Committee for review andapproval Prior omnibus approval is obtained for Related Party transactions on a quarterlybasis for transactions which are of repetitive nature and / or entered in the OrdinaryCourse of Business and are at Arm's Length. There is no materially significant relatedparty transactions which exceeds 10% of the consolidated turnover of the Company. The nildisclosure in Form No . AOC.2 is enclosed as Annexure 6
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURE:
There are no persons employed in the Company during the year or for part of the yearwho were in receipt of remuneration in excess of the limits set out in Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 readwith in terms of provisions of Section197(12) of the Companies Act 2013.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) rules 2014 are provided in the Annual Report as Annexure 7
In terms of Section 136 of the Act the reports and accounts are being sent to themembers and others entitled thereto which is available for inspection by the members atthe registered office of the company during business hours on working days of the company.If any member is interested in inspecting the same such member may write to the Companyin advance and the same will be furnished. The full annual report is also available on theCompany's website.
The Vigil Mechanism of the Company which also incorporates a whistle blower policy interms of the Listing Regulation includes an Ethics & Compliance Task Force comprisingSenior Executives of the Company. The policy on vigil mechanism and whistle blower policymay be accessed on the company's website www.munothfinancial.com
CORPORATE GOVERNANCE REPORT:
Pursuant to Regulation 15 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015report on Corporate Governance is not applicable to the Company for thefinancial year 2017-18 since the NetWorth is below 25 Crore and the Paidup Capital of theCompany is less than 10 Crore.
The Company's shares are listed on The Stock Exchange Mumbai.
PREVENTION OF INSIDER TRADING:
The Company has adopted a Code of Conduct as per the Guidelines issued by theSecurities and Exchange Board of India for prevention of Insider Trading with a view toregulate trading in securities by the Directors and designated employees of the Company.The Board of Directors and the designated employees have confirmed compliance with thecode.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review.
1. Issue of equity shares with differential rights as to dividend voting or otherwise
2. Issue of shares ( including sweat equity shares) to employees of the company andESOS under any scheme
3. The company does not have any subsidiaries and hence the disclosure stating that theManaging Director / whole Time Director of the Company not receiving any remuneration orcommission for subsidiary is not applicable.
4. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
5. There were no cases filed pursuant to the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.
Your Directors would like to express their gratitude to the Shareholders vendorsbankers and customers for their support and co-operation. They wish to thank all theemployees of the Company for their sincere and dedicated services.
For and on behalf of the Board of Directors
|Place : Chennai ||Jaswant Munoth ||Vikas Munoth |
|Date : May 28 2018 ||Managing Director ||Whole Time Director |