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Stanrose Mafatlal Investment & Finance Ltd.

BSE: 506105 Sector: Financials
NSE: N.A. ISIN Code: INE441L01015
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OPEN 86.35
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VOLUME 98
52-Week high 133.00
52-Week low 78.05
P/E
Mkt Cap.(Rs cr) 35
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
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Stanrose Mafatlal Investment & Finance Ltd. (STANROSEMAFAT) - Director Report

Company director report

To

The Members

STANROSE MAFATLAL INVESTMENTS AND FINANCE LIMITED

Your Directors have pleasure in presenting the Forty-first Annual Report together withthe Audited Statements of Account of the Company for the financial year ended 31st March2021.

FINANCIAL RESULTS

Current Year

Previous Year

Rupees

Rupees

Total Income 9.16

39.23

Gross Profit (315.4)

(778.39)

Less : Depreciation 49.86

40.60

Profit/(Loss) before Tax &
Exceptional Item (365.26)

(818.99)

Less: Current Tax 14.98

(5.75)

Less : Exceptional Item 0.47

(0.45)

Profit/(Loss) after Tax (379.78)

(813.68)

Add: Profit brought forward from Previous Year 1107.20

1480.76

Balance Available for
Appropriations 727.42

667.08

Less : Dividend Paid (Including tax on dividend) 238.08

287.01

Items of the OCI for the year net of tax:
Remeasurement benefit of defined benefit plans 0.00

(0.49)

Transfer to Reserve 0.00

0.00

Provisioning under IRACP (AS-109) 1.57

0.00

Add: Other Comprehensive Income:
Transfer from OCI to
Retained Earnings 36.79

726.65

Balance carried forward 524.56

1107.21

DIVIDEND

Your Directors recommend a Dividend of Rs.6/- per share (Previous Year Rs.6/-) on3967920 Equity Shares of Rs.10 each aggregating to Rs. 238.08 Lacs for the financialyear ended on 31st March 2021. If approved by the Shareholders at the forthcoming AnnualGeneral Meeting to be held on August 5 2021 the said dividend will be paid on August 172021 or thereafter to

(i) those shareholders whose names appear on the Register of Members of the Company onJuly 29 2021 and

(ii) those whose names as beneficial owners are furnished by National SecuritiesDepository Limited and Central Depository Services (India) Limited for the purpose.

MANAGEMENT DISCUSSION AND ANALYSIS (MD&A) FINANCIAL REVIEW

The total income for the year was Rs.9.16 Lacs as compared to Rs.39.23 Lacs in theprevious year. Depreciation was Rs. 49.86 Lacs (Previous Year Rs.40.60 Lacs). TheProvision for Taxation:

(i) for the year under report was NIL. Loss after tax was Rs. (371.72) Lacs.

This year the company has decided not to transfer any funds to General Reserve andStatutory Reserve Fund pursuant to Section 45IC of RBI Act1934.

The Net Worth of the Company as at 31st March 2021 stood at Rs. 5804.85 Lacs asagainst Rs. 4921.10 Lacs on 31st March 2020.

NBFC INDUSTRY

The NBFC sector has a significant role in bringing efficiency and diversity in thefinancial system. It has evolved extensively in terms of its operations technologyprofitability and asset quality and entered into newer areas of financial services andproducts. NBFCs are now deeply interconnected with the entities in the financial sectoron both sides of their balance sheets.

Being financial entitiesthey are exposed to risks arising out of counterpartyfailures funding and asset concentration interest rate movement and risks pertaining toliquidity and solvency as any other financial sector player.

Business Review

The Company's operations continue to be mainly focused in the areas of Inter-corporateInvestments Capital Market activities and Financing. Segment-wise brief outline offinancial and operational performance during the year under report is as under:

(i) Investments

The Company's investment portfolio is reviewed from time to time to buy securities toadd to the Portfolio or to sell in order to make Capital gains. Details of the Company'sinvestments are given under Note No. 7 to Financial Statements of the Company for the yearended 31st March 2021. The total worth of Company's Quoted and Unquoted Investments inShares and Securities (Including Stock-in-trade) as at 31st March 2021 is Rs. 3223.79Lacs (Previous Year Rs. 2330.67 Lacs). The Company has adopted IND-AS from 1st April2019. Under IND-AS investments are valued at fair value whereas in case of IGAAP Longterm investments were valued at lower of cost or fair value.

During the year under report the Company:

(a) has made disinvestment of Rs. 276.96 Lacs from its Non-current Quoted andNon-Quoted Equity Investments as against Rs. 805.46 Lacs in the Previous Year.

(b) booked a net profit of Rs. 36.79 Lacs on sale of Non-Current investments as againstRs.

726.40 Lacs in the previous year.

(c) earned income by way of Dividend of Rs. 6.92 Lacs against Rs. 32.97 Lacs in theprevious year.

(ii) Finance

Interest on Inter-corporate Deposit:

During the year under report the Company has not earned any interest income on InterCorporate Deposits.

Changes in Key Financial Ratios

Sr. No. Ratios F.Y. 2020-21 F.Y. 2019-20
1. Current Ratio 6.53

5.64

2. Debt Equity Ratio 0.01 0.2
3. Operating Profit Margin (%) (46.22) (20.88)
4. Net Profit Margin (%) (48.06) (24.32)
5. Return on Net Worth (%) (6.54) (16.53)

Note: The Company is not having any Debt/Borrowings as at 31st March 2021. Alsothe Company is not into the Customer based products which are manufactured/produced by theCompany. Hence as required under Part B of Schedule V to the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 ratios such as Debtors Turnover RatioInventory Turnover Ratio and Interest Coverage Ratio have not been provided.

Opportunities and Threats

As various factors are posing constant threats and high volatility in the CapitalMarkets it appears beneficial to diversify the portfolio to reduce the risk and insulatefrom the vagaries of stock-market. Mutual Funds help to reduce risk throughdiversification and professional management. Therefore the Company invests its surplusfunds in debt/ equity oriented Mutual Funds. One of the biggest advantages of Mutual Fundinvestment is Liquidity. Open-end funds provide option to redeem on demand which isbeneficial during rising or falling markets. The management is exploring other avenues ofbusiness.

Outlook

The Company intends to continue focusing on capital market activities including tradingin securities and emerging products in derivatives.

Risk and Concern

The Company is exposed to specific risks that are particular to its business and theenvironment within which it operates including interest rate volatility economic cyclecredit and market risks. The Company has quoted investments which are exposed tofluctuations in stock prices. These investments represent a material portion of theCompany's business and are vulnerable to fluctuations in the stock markets. Any decline inprices of the Company's quoted investments may affect its financial position and theresults of its operations. It continuously monitors its market exposure and tries tomanage these risks by following prudent business and risk management practices.

Adequacy of Internal Control

The Company has a proper and adequate system of internal control in all spheres of itsactivities to ensure that all its assets are safeguarded and protected against loss fromunauthorized use or disposition and that the transactions are authorized recorded andreported diligently. The Internal control is supplemented by an effective internal auditbeing carried out by an external firm of Chartered Accountants.

The Company ensures adherence to all internal control policies and procedures as wellas compliances with all regulatory guidelines.

The Audit Committee of the Board of Directors reviews the adequacy of internalcontrols.

Human Resources

The Company has diverse workforce which leads to sustainable growth and improvement inproductivity. The Company has maintained cordial relations with its employees at alllevels during the year.

CORPORATE GOVERNANCE

The Company has complied with applicable provisions of Corporate Governance as providedunder SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. A separatereport on Corporate Governance compliance is included as a part of the Annual Report alongwith the Auditors' Certificate.

DEPOSITS

Your Company has not accepted any public deposits during the year under review.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 134(5) of the Companies Act 2013 with respectto Directors' Responsibility Statement the Directors confirm that:

1. In the preparation of the annual accounts for the financial year ended 31st March2021 the applicable Indian accounting standards (IndAS) have been followed and that thereare no material departures from the same;

2. Accounting policies selected were applied consistently. Reasonable and prudentjudgments and estimates were made so as to give a true and fair view of the state ofaffairs of the Company as at 31st March 2021 and of the profit for the year ended on thatdate;

3. Proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

4. The annual Accounts for the Financial Year ended 31st March 2021 have been preparedon a `going concern' basis.

5. Proper internal financial controls were in place and that the financial controlswere adequate and were operating effectively.

6. Proper systems devised to ensure compliance with the provisions of all applicablelaws were in place and were adequate and operating effectively.

SUBSIDIARY COMPANIES

The Company's wholly owned subsidiary Stan Plaza Limited is a Non-Listed Companyhaving its Registered Office at Mumbai. As on March 31 2021 in accordance with SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 it will be termed asa Material Subsidiary of the Company.

Stanrose Mafatlal Lubechem Limited - In Liquidation a substantially owned subsidiaryof the Company was ordered to wind-up by the High Court of Mumbai vide its Order datedJune 10 2011 and appointed the Official Liquidator to take charge of its Assets BankAccounts Books of Accounts Affairs Business and Properties with all powers under thethen provisions of the Companies Act 1956.

In compliance with the requirements of the provisions of Section 129(3) read with Rule5 of Companies (Accounts) Rules 2014 a Statement in Form AOC-1 containing the salientfeatures of the financial statements in respect of Stan Plaza Limited a wholly ownedsubsidiary of the Company has been included as a part of this Annual Report. StanroseMafatlal Lubechem Limited being inoperative its details are not disclosed in Form AOC-1.

The Company has framed a `Policy for Determining Material Subsidiaries' for identifyingmaterial subsidiaries and to provide governance framework for such material subsidiaries.The policy is available on the website of the Company www.stanrosefinvest.com.

AMALGAMATION OF SURCOT TRADING PRIVATE LIMITED (STPL) AND UMIYA REAL ESTATE PRIVATELIMITED (UREPL) ("THE TRANSFEROR COMPANIES") WITH STANROSE MAFATLAL INVESTMENTSAND FINANCE LIMITED (SMIFL) ("THE TRANSFEREE COMPANY")

As reported earlier the Company has received a No-Objection Certificate from BSELimited/SEBI on 14th November 2018. The Company has filed an application with theNCLT-Ahmedabad Bench for convening a meeting of the Equity Shareholders and waiving ofmeeting of creditors as there were none. NCLT-Ahmedabad Bench on 16th January 2019ordered for convening the meeting of the equity Shareholders on 22nd February 2019 andwaiving the meeting of the Creditors.

The Company had obtained approval from Shareholders in the NCLT Convened MeetingRegistrar of Companies Regional Director and Official Liquidator. The Scheme ofAmalgamation ("Scheme") between Surcot Trading Private Limited (TransferorCompany Number I) and Umiya Real Estate Private Limited (Transferor Company Number II)with the Company under Sections 230-232 of the Companies Act 2013 was approved by theHon'ble NCLT-Ahmedabad Bench vide its order dated 17th July 2019. However the Company isawaiting final order of Hon'ble NCLT-Chennai Bench for the petition filed by one of theTransferor Company Number II for implementation of the Scheme.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements (CFS) of the Company and its wholly ownedsubsidiary Company viz. Stan Plaza Limited (SPL) are prepared in accordance with theprovisions of Schedule III of the Companies Act 2013 and relevant Indian AccountingStandards issued by the Institute of Chartered Accountants of India as applicable to theCompany and form part of this Annual Report. These Statements have been prepared on thebasis of audited financial statements received from SPL as approved by its Board. StanroseMafatlal Lubechem Ltd. a substantially owned subsidiary Company being inoperative itsfinancial statements are not considered in preparation of CFS.

DIRECTORATE

In terms of Section 152 of the Companies Act 2013 Shri Pradeep R. Mafatlal Director& Chairman of the Company is retiring by rotation and being eligible offers himselffor re-appointment.

Your Directors regret to inform you about the demise of Shri Kersi J. Pardiwalla on 4thNovember 2020 who was associated with the Company as a Director since April 2006. Theinvaluable services and guidance rendered by him to the Company will be greatly missed.

Smt. Datta B. Dave has resigned from the Directorship of the Company with effect from8th June 2021 as she is planning to stay abroad for a long time. Your Directors place onrecord their appreciation of valuable services rendered by Smt. Dave during her tenure asa director.

During the year the Board of Directors appointed Shri Dhansukh H. Parekh (DIN00015734) as an Additional Director of the Company. He is treated as a Non-Executive

Non-Independent Director and being eligible necessary Resolution for his appointmentas a Director of the Company is being put up at the forthcoming Annual General Meetingfor the approval of the Members.

Brief resume of Shri Dhansukh H. Parekh as required under Regulation 36 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 is covered under notesof the Notice of the 41st AGM of the Company.

All Independent Directors have given their declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

None of the Directors of the Company is disqualified from being appointed orre-appointed as a Director as specified under Section 164 of the Companies Act 2013.

KEY MANAGERIAL PERSONNEL

The Company has appointed three Key Managerial Personnel viz. Shri Madhusudan J.Mehta Chief Executive Officer Shri Harshad V. Mehta Chief Financial Officer and ShriSoham A. Dave Company Secretary & Compliance Officer to inter alia shoulder theresponsibilities in their respective fields as envisaged under the provisions of theCompanies Act 2013 & SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.

AUDITORS

Statutory Auditors

At the 37th Annual General Meeting M/s Manubhai & Shah Chartered Accountants(Firm Regn. No. 106041W/ W100136) Ahmedabad were appointed as the Statutory Auditors ofthe Company to hold office from the conclusion of the 37th AGM to the conclusion of the42nd AGM (subject to ratification of the appointment by the members at every AGM heldafter this AGM). On 7th May 2018 Section 40 of the Companies Amendment Act 2017(amending Section 139 of the Companies Act 2013) was notified whereby ratification ofStatutory Auditor's appointment is not required at every Annual General Meeting.Accordingly the resolution for ratification of appointment of Statutory Auditors is notproposed.

Secretarial Auditors

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.Manoj Hurkat and Associates a firm of Company Secretaries in Practice toundertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexedherewith as "Annexure A".

The Report confirms that the Company has complied with all the applicable provisions ofthe Companies Act 2013 Reserve Bank of India Act 1934Equity Listing Agreement/

SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 DepositoriesAct 1996 Securities Contracts (Regulation) Act 1956 SEBI (Prohibition of InsiderTrading) Regulations 1992/2015 SEBI (Substantial Acquisition of Shares and Takeover)Regulations 2011 and various Regulations and Guidelines as applicable to the Company.

CORPORATE SOCIAL RESPONSIBILITY

In accordance with the provisions of Section 135 of the Companies Act 2013 and therules made there under the Company has constituted a Corporate Social ResponsibilityCommittee of Directors. The role of the Committee is to review the CSR activities of theCompany periodically and recommend the Board the amount of expenditure to be incurred onthe CSR activities annually. For the Financial Year 2020-21 the Company is not fallingunder Section 135(1) of the Companies Act 2013 as the Net worth Turnover and Net Profitsof the Company are less than the prescribed limit for the past three consecutive years andso the reporting under the Companies (Corporate Social Responsibility Policy) Rules 2014is not applicable to the Company.

NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee comprises of Ms. Aziza A. Khatri Chairpersonand Shri Harit S. Mehta. Smt. Datta B. Dave was a member of this committee from 2ndFebruary 2021 to 8th June 2021. The role and responsibilities Company's policy ondirectors' appointment and remuneration including the criteria for determining thequalifications positive attributes independence of a director and other related mattersare in conformity with the requirements of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.

AUDIT COMMITTEE

The information relating to the composition of the Committee scope & term ofreference no. of meetings held and attendance etc. during the year under report areprovided in the Corporate Governance Report.

ANNUAL PERFORMANCE EVALUATION:

In compliance with the provisions of the Act and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the performance evaluation was carried out asunder:

Board: As suggested by the Nomination and Remuneration Committee the Board ofDirectors evaluated the performance of the Board with regard to various criteria such asBoard composition Board processes and Board dynamics. The Independent Directors at theirseparate meeting also evaluated the performance of the Board as a whole based on variouscriteria. The Board and the

Independent Directors were of the unanimous view that performance of the Board ofDirectors as a whole was satisfactory.

Committees of the Board: The performance of the Audit Committee Corporate SocialResponsibility Committee Nomination and Remuneration Committee and the StakeholdersRelationship Committee was evaluated by the Board having regard to various criteria suchas committee composition committee processes and committee dynamics. The Board was of theunanimous view that all the committees were performing their functions satisfactorily andaccording to the mandate prescribed by the Board under the regulatory requirementsincluding the provisions of the Act the Rules framed there under and the ListingAgreement/SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

Individual Directors:

(a) Independent Directors: In accordance with the criteria suggested by theNomination and Remuneration Committee the performance of each independent director wasevaluated by the entire Board of Directors (excluding the director being evaluated) onvarious parameters like qualification experience availability and attendance integritycommitment governance independence communication preparedness participation and valueaddition.

The Board was of the unanimous view that each independent director was a reputedprofessional and brought his/her rich experience to the deliberations of the Board. TheBoard also appreciated the contribution made by all the independent directors in guidingthe management in achieving higher growth and concluded that continuance of eachindependent director on the Board will be in the interest of the Company.

(b) Non-Independent Directors: The performance of each of the non-independentdirectors (including the Chairperson) was evaluated by the Independent Directors at theirseparate meeting. Further their performance was also evaluated by the Board of Directors.Various criteria considered for the purpose of evaluation included qualificationexperience availability and attendance integrity commitment governance communicationetc. The Independent Directors and the Board were of the unanimous view that each of thenon-independent director was providing good business and people leadership.

DISCLOSURE OF RATIO OF REMUNERATION OF EACH DIRECTOR TO THE MEDIAN EMPLOYEES'REMUNERATION ETC.

The particulars of ratio of remuneration of each director to median remuneration of theemployees of the Company for the financial year under report percentage increase inremuneration of each Director and KMP etc. more particularly described under Section197(12) of the Companies Act 2013 and Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are given in "Annexure B"to this Report.

PARTICULARS OF LOANS AND INVESTMENTS

The Company being a Non-Banking Financial Company registered with Reserve Bank of Indiawith the principal business inter alia of Inter-Corporate Financing the provisions ofSection 186 except sub-section (1) are not applicable to it. Hence no particulars asenvisaged under Section 134(3)(g) are covered in this Report.

RELATED PARTY TRANSACTIONS

The particulars of contracts or arrangements entered by the Company with relatedparties which are subsisting during the year under Report are provided under"Annexure C" in Form AOC - 2. The Company has framed a 'Policy on Related PartyTransactions' for determining related parties transactions on arm's length basis andprocedures to be followed for obtaining various approvals etc.The policy is available onthe website of the company www.stanrosefinvest.com. As regards the justification forentering into related party transactions it may be noted that the same are entered on tobusiness exigencies and are in the best interest of the Company.

ENERGY TECHNOLOGY AND FOREIGN EXCHANGE

Pursuant to the requirement under Section 134(3) of the Companies Act 2013 read withRule 8 of Companies (Accounts) Rules 2014:

(a) The Company has no activity involving conservation of energy or technologyabsorption.

(b) The Company does not have any Foreign Exchange Earnings.

(c) Outgo under Foreign Exchange - NIL.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Board has approved and adopted "Vigil Mechanism/ Whistle Blower Policy"in the Company. The Brief details of establishment of this Policy are provided in theCorporate Governance Report.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

As per the requirement of the provisions of the sexual harassment of women at workplace(Prevention Prohibition & Redressal) Act 2013 read with rules made there under ourCompany has constituted Internal Complaints Committees as per the requirement of the Actwhich are responsible for redressal of complaints relating to sexual harassment againstwoman at workplace. During the year under review there were no complaints pertaining tosexual harassment against women.

RISK MANAGEMENT POLICY

The Company has formalized risk management system by formulating and adopting RiskManagement Policy to identify evaluate monitor and minimize the identifiable businessrisks in the Organization.

EXTRACT OF ANNUAL RETURN

The extract of the Annual Return in Form MGT-9 can be accessed on the website of theCompany www.stanrosefinvest.com.

PARTICULARS OF EMPLOYEES

The Company has not employed any individual whose remuneration falls within the purviewof the limits prescribed under the provisions of Section 197 of the Companies Act 2013read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014.

ACKNOWLEDGEMENTS

Your Directors sincerely express their appreciation to shareholders bankers andcustomers for their sustained support and trust. The Directors extend their gratitude forcommitment and co-operation shown by the employees and look forward to all stakeholders'continued support.

 

For and on behalf of the Board

Pradeep R. Mafatlal

 

Chairman

Place: Mumbai

Dated: June 8 2021.

.