To The Members
Your Directors have pleasure in presenting their Thirtieth Annual Report together withthe Audited Accounts for the year ended March 31 2021
|Particulars ||2020-2021 ||2019-2020 |
| ||Rs. in 000 ||Rs. in 000 |
|Total Revenue ||5368.46 ||4251.54 |
|Other Income ||165.92 ||421.31 |
|Total Expenses ||6508.20 ||9342.77 |
|Profit or Loss before exceptional items and tax ||(973.82) ||(4669.92) |
|Less: Exceptional items ||0 ||0 |
|Profit or Loss after Exceptional items and before tax Expenses ||(973.82) ||(4669.92) |
|Less: Tax Expenses (Current & Deferred) ||47.61 ||74.04 |
|Profit/(Loss) for the year ||(1021.43) ||(4743.96) |
|Other Comprehensive Income || || |
|Change in fair value of equity instruments ||525 ||3777.50 |
|Re-measurement of Post Employment defined benefit plan ||238.65 ||323.86 |
|Total Comprehensive Income for the year ||(257.78) ||(642.60) |
|Earnings Per Share || || |
|- Basic Earning per Share ||(0.20) ||(0.92) |
|- Diluted Earning per Share ||(0.20) ||(0.92) |
REVIEW OF BUSINESS OPERATIONS:
During the financial year 2020-21 the Company's total revenue has increased to INR55.34 Lakhs from INR 46.72 Lakhs in the previous financial year.
The Company has made a loss of INR 10.21 Lakhs in the current financial year as againsta loss of INR 47.43 Lakhs in the last financial year.
Income from stock broking operations has increased to INR 41.87 Lakhs from INR 26.17Lakhs in the previous 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 INR 5.18 Lakhs from INR 5.08 Lakhs in theprevious 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.
Income from Merchant Banking & PMS has decreased to INR 6.62 Lakhs as against INR11.25 Lakhs 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 31 2018 are thefirst financial statements the Company has prepared in accordance with Ind AS with thedate of transition as April 1 2016.
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 WHICHHAS OCCURRED BETWEEN 31st MARCH 2021 (THE END OF THE FINANCIAL YEAR and 28thMAY 2021 (THE DATE OF REPORT):
There were no material changes and commitments affecting the financial position of thecompany between 31st March 2021 (the end of the financial year) and 28th May 2021 (thedate of the report).
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNING AND OUTGO:
The Company has no activities relating to conservation of energy technologyabsorption foreign exchange earnings 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 thesaid provisions are not applicable for the financial year 2020-21.
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 June 18 2020 August 10 2020 November 10 2020 and February 9 2021.
The Audit Committee has Ms. Lakshika Mehta ( Chairman) Mr. SakthivelmuruganMasagounder and Mr. Jaswant Munoth as members. All the recommendations made by the AuditCommittee were accepted by the Board.
NOMINATION AND REMUNERATION COMMITTEE:
The Remuneration Committee has Mr. Sakthivelmurugan Masagounder (Chairman) Ms.Lakshika Mehta and Mr. Jaswant Munoth as members. The committee is vested with allnecessary powers and authority to determine and recommend the remuneration payable toExecutive 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 Grievance Committee with the new name Shareholders relationship committee. Thecommittee specifically looks into the shareholders' and investors' complaints on mattersrelating to transfer of shares non-receipt of annual report etc. In addition thecommittee also oversees the share transfers.
The Committee has Ms. Lakshika Mehta (Chairman) Mr. Sakthivelmurugan Masagounder andMr. Jaswant Munoth as Members.
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 were assessedbased on the Directors' inputs received during the meetings of the Board and one to onemeeting by the Chairman with the Directors.
EXTRACT OF ANNUAL RETURN:
The Extract of Annual return as on March 31 2021 as provided under Sub-section (3) ofsection 92 in Form No. MGT-9 is being annexed as Annexure 2 to the report and the extractas per the amendment though MCA Circular dated 24/08/2020 is available in the weblinkwww.munothfinancial.com
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 ended31st March 2021 and of the Profit/Loss of the company for the year ended 31st March 2021.
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:
Mr. Jaswant Munoth (DIN No: 00769545) was reappointed as Managing Director by the Boardof Directors in their meeting held on May 28 2021 for the period of two years with effectfrom June 20 2021 subject to the approval of members and the same has been placed as itemno. 6 in the accompanying notice.
Re appointment of Directors retiring by rotation:
Pursuant to Section 152 of the Companies Act 2013 Mr. Lalchand Munoth Mr. BharatMunoth and Mr. Jaswant retire by rotation and being eligble offers themselves forreappointment.
Information pursuant to Regulation 36(3) of SEBI (LODR) Regulations for Directorsretiring by rotation and being eligible offers themselves for reappointment:
1.Brief resume of Mr. Lalchand Munoth and nature of his expertise in specific areas.
Mr. Lalchand Munoth is retiring by rotation at this Annual General Meeting and beingeligible offers himself for reappointment. Mr. Lalchand Munoth aged 82 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 South India Chemicals and Leasing Private Limited and Tamilnadu Educational andMedical Foundation.
As on March 31 2021 his shareholding in the Company is 687100 shares and has noshares held by/ for other persons on a beneficial basis. He has attended all the 4 boardmeetings held on 18/06/2020; 10/08/2020; 10/11/2020 and 09/02/2021 by the company.
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 51 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 isalso the director of Munoth Communication 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 31 2021 his shareholding in the Company is 717900 shares and has noshares held by/ for other persons on a beneficial basis. He has attended all the 4 boardmeetings held on 18/06/2020; 10/08/2020; 10/11/2020 and 09/02/2021 by the company.
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. Jaswant Munoth and nature of his expertise in specific functionalareas.
Mr. Jaswant Munoth aged 56 years (Date of Birth: 14/07/1965) holds a Bachelor Degreein Commerce from University of Madras with a Masters Degree in Business Administration. Hehas extensive 34 years of experience and knowledge in the field of Capital Markets. He isthe Managing Director of the company since its inception on 1990. He has managed andsteered the company through the adverse market conditions prevailed in the financialsector. He heads Merchant Banking and Portfolio Management Division of the Company. Underhis leadership the Merchant Banking division has Lead managed IPOs. He has worked withother leading merchant Bankers in 65 other IPO's under various other capacities. He alsoheads Portfolio Management Services since its inception in 1999 and manages portfolio ofclients.
He is also the Managing Director of Munoth Communication Limited and director of MunothIndustries Limited Munoth NEG Windfarm Private Limited Misrimal Navajee Estates PrivateLimited Maharana Finance & Investments P Limited Shankeswara Finance &Investments P Limited South India Chemicals & Leasing P Limited Munoth BioscienceLimited and Tamilnadu Educational and Medical Foundation.
As on March 31 2021 his shareholding in the Company is 836100 shares and has noshares held by/ for other persons on a beneficial basis. He has attended the 4 boardmeetings held on 18/06/2020; 10/ 08/2020; 10/11/2020 and 09/02/2021 and 4 audit committeemeetings held on 18/06/2020; 10/08/2020; 10/11/2020 and 09/02/2021 and attended 5Stakeholders Relationship committee Meetings held on 09/04/2020 18/06/2020; 10/08/2020;10/11/2020 and 09/02/2021.
Disclosure of relationships between directors inter-se: Mr. Lalchand Munoth is thefather of Mr. Jaswant Munoth and Mr. Bharat Munoth & Mr. Vikas Munoth are brothers ofMr. Jaswant 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.
* STATUTORY AUDITORS:
Members of the Company at the AGM held on August 31 2017 had approved the appointmentof C K Prusty & ssociates as the Statutory Auditors for a period of five financialyears.
SECRETARIAL AUDIT REPORT:
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 dated 28/05/2021 is attached as Annexure4 and forms a part of the report of the Directors.
Cost Audit is not applicable to the Company for the financial year 2020-21.
EXPLANATION/COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERSMADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS:
There were no comments or observations or adverse remarks made by the Auditor orPracticing Company Secretary in their reports.
COMPLIANCE WITH SECRETARIAL STANDARDS:
The Company has complied with Secretarial Standards issued by Institute of CompanySecretaries of India (ICSI) as and when it was applicable.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE 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 *Please refer to ITEM NO.5 of the Notice www.munothfinancial.com.The policy intends to ensure that proper reporting approval and disclosure procedures arein place for all transactions between the 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.
The disclosures for the financial year in Form No . AOC.2 if any is enclosed asAnnexure 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 Section 197(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.
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 2015 report on Corporate Governance is not applicable to the Company for thefinancial year 2019-20 since the NetWorth is below 25 Crores and the Paid up Capital ofthe Company is less than 10 Crores.
The Company's shares are listed on BSE.
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 and ESOSunder 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 : 28/05/2021 ||Managing Director ||Whole Time Director |
| ||(DIN : 00769545) ||(DIN : 00769366) |