DIRECTORS' REPORT Dear Members, Your Directors are pleased to present the 25th Annual Report of the Company together with the Audited Financial Statements and Auditors’ Report for the year ended 31st March, 2016. Operations and State of Company's Affairs : The Company has earned a Net Profit of Rs. 3,03,391/- during the year under review against the Net loss of Rs. 49,956/- in the Previous Year. The Company is looking for an opportunity to make a suitable expansion / diversification. As per Memorandum of Association your Company can be engaged in the business of leasing, financing, purchasing and selling of all kinds of properties, equipments and vehicles etc.,and also can undertake the business of portfolio investment in securities, bonds and other financial investment schemes. However there is no change in the nature of business and state of Company's Affairs during the Financial Year 2015-16. Dividend : Your Directors do not recommend any dividend for the year under review. Reserves : During the financial year ended on 31st March, 2016 Rs. 60,678/- has been transferred to Reserves. Subsidiary, Joint Ventures and Associate Companies : During the year under review, Indocount Securities Limited ceased to be Company’s associate w.e.f 22nd March, 2016. Further the Company does not have any Subsidiary / Joint Ventures. Risk Management : Pursuant to Section 134 (3) (n) of the Companies Act, 2013 & Listing Regulations, 2015, the Company has implemented an integrated risk management approach through which it reviews and assesses significant risks controls and mitigation in place. The Audit Committee has additional oversight in the area of financial risk and control. At present the Company has not identified any element of risk which may threaten the existence of the Company. Internal Control Systems and their adequacy : The Company has in place an elaborate internal control system to ensure proper authorization and accounting of transactions as also for safeguarding and protecting Companies assets against loss. The internal auditor reports are periodically reviewed by the management and the Audit Committee and necessary corrective actions are taken from time to time. Extract of Annual Return : As required pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in Form No. MGT-9 forming part of this Annual Report as Annexure-A. Directors and Key Managerial Personnel : The Board of Directors is duly constituted in accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. Anil Kumar Jain, Director of the Company would retire by rotation and being eligible, offers himself for re-appointment. His appointment will be considered at the ensuing Annual General Meeting. Mr. Sushilkumar Krishna Agrawal, resigned as Independent Director with effect from 8th February, 2016 due to personal preoccupation. The Board place on record their appreciation for the services rendered by him during his tenure with the Company. At the Board meeting held on 8th February, 2016, the board had appointed Mr. Amitkumar Rampal Singh as an Additional Director in the category of Independent Director. His office of Directorship shall expire on the conclusion of the forthcoming Annual General Meeting of the Company. As per the provisions of Companies Act, 2013 he is being regularized by the Members as an Independent Director of the Company for 5 (Five) consecutive years with effect from 8th February, 2016 in accordance with Section 149 of the Companies Act, 2013. The Independent Directors of the Company would not be liable to retire by rotation. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under Section 149(6) of the Companies Act, 2013 and clause 49 of the Listing Agreement read with SEBI Regulations, 2015 and there has been no change in the circumstances which may affect their status as Independent Director during the year. During the year, the Non-Executive Independent Directors of the Company had no pecuniary relationship or transactions with the Company. Meetings of the Board and Attendance : The Board of Directors met 4 (Four) times during the financial year ended on 31st March, 2016 i.e. 13th May, 2015; 31st July, 2015; 20th October, 2015 and 8th February, 2016. The details of the attendance of directors are provided in the Corporate Governance Report appended thereto. Familiarization of Independent Directors : The details of programme for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company at the www.margofinance.com Board Evaluation : The Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirement), 2015 effective from 01.12.2015 states that the formal annual evaluation needs to be made by Board of its own performance and that of its committees and individual Directors, excluding the Directors being evaluated. The evaluation of all the Directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The evaluation process has been explained in the Corporate Governance Report appended in this Annual Report. The Board approved the evaluation results as collated by the Nomination and Remuneration Committee. Nomination and Remuneration Policy : The policy of the Company on Directors appointment and remuneration, including the criteria for determining qualification, positive attributes, independence of a Director and other matters provided under Section 178 of the Companies Act, 2013, adopted by the Board, is appended as Annexure-B to the Directors’ Report. We affirm that the remuneration paid to the Directors is as per the term laid out in the Nomination and Remuneration Policy of the Company. 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 employees of the Company has been annexed as Annexure-C. The details as required under Section 197(12) of the Companies Act, 2013, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel), Rules, 2014 is not applicable as there is no employee in the Company employed throughout the financial year with salary above Rs. 60 Lacs per annum or employed for part of the financial year with average salary receipts above Rs. 5 Lacs per month. Further, there is no employee employed throughout the financial year or part thereof, was in receipt of remuneration which in aggregate is in excess of that drawn by the Managing Director or Whole Time Director or Manager and holds by herself / himself or along with her / his spouse and dependent children, not less than Two percent (2%) of the Equity Shares of the Company. Auditors and Auditor’s Report : Statutory Auditors : The Auditors, M/s AVK & Associates, Chartered Accountants were appointed as statutory auditors of the Company at the 24th Annual General Meeting held on 22nd August, 2015 to hold office till the conclusion of the 26th Annual General Meeting subject to ratification by the members at each Annual General Meeting. Accordingly, the appointment of M/s AVK & Associates, Chartered Accountants is placed for ratification by the shareholders. The Company has received eligibility letter in compliance with the conditions prescribed under Section 141 of the Companies Act, 2013 and rules made there under. The Auditors’ Report to the Member together with Accounts for the year ended 31st March, 2016 and the observations of the Auditors as referred in their report are suitably explained in the notes to accounts and therefore do not call for any further comments. The Auditors’ Report does not contain any qualification, reservation or adverse remark. Secretarial Auditors : Pursuant to provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Ashu Gupta & Co. Practising Company Secretary, to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as “Annexure D”. The Secretarial Auditor Report has contained the observation pursuant to Section 152(6) of the Companies Act, 2013. However in the Board meeting held on 13th May, 2015, the Board has appointed the rotational Director and had complied with the provision of Section 152(6) Companies Act, 2013. Composition of Audit Committee : The composition of Audit Committee has been revised w.e.f. 8th February, 2016 on resignation of Mr. Sushilkumar Krishna Agrawal, Independent Director. The revised constitution of the committee comprises of 4 (four) Independent Directors viz., Mr. Anilkumar Indralal Gulati (Chairman), Mr. Govind Prasad Agrawal, Mr. Amitkumar Rampal Singh, and Mr. Venkiteswaran Venkitaswaran Parlikad and 1 (one) Executive Director viz., Ms. Rekha Tukaram Bolkar. All the recommendations made by the Audit Committee were accepted by the Board. Further details on the committee are given in the Corporate Governance Report. Vigil Mechanism / Whistle Blower Policy : As per the Companies Act, 2013 read with Listing Regulations, 2015, the Board of Directors of the Company has constituted Vigil Mechanism / Whistle Blower Policy and adopted a policy which aims to provide a channel to the Directors and employees to report genuine concerns about unethical behavior, actual or suspected fraud or violation of the Codes of Conduct or policy. The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations and in order to maintain these standards, the Company encourages its employees who have genuine concerns about suspected misconduct to come forward and express those concerns in writing through an e-mail or a letter to the Chairman of the Company or to the Compliance Officer or to the Chairman of the Audit Committee. The Policy on vigil mechanism and whistle blower policy may be accessed on the Company’s website at www.margofinance.com. Contracts and Arrangements with Related Parties : There were no transactions of the Company of material nature with related parties that may have potential conflict with the interest of the Company at large and which fall under the scope of Section 188(1) of the Companies Act, 2013. However, related party disclosure as required by AS - 18 had been reported under Schedule 2.24 in the notes to the financial statements in this report. Policy on dealing with related party transactions is available on the website of the Company at www.margofinance.com. Particulars of Loans given, Investments made, Guarantees given and Securities provided : During the year your Company has not given any Guarantee and Security within the meaning of Section 186 of the Companies Act, 2013. Details of Investments made and Loan given are mentioned respectively, in the Schedule 2.10, 2.11 and 2.14 in the notes to the accounts to the Balance Sheet for the financial year ended on 31st March, 2016. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo : Being a Non-Banking Financial Company, the Company is not carrying on any manufacturing activities, however necessary actions has been taken by the Company from time to time for optimum utilization of energy. Since, the conservation is very minimal therefore its impact on cost cannot be stated accurately. Since, no outside technology is being used, therefore no technology absorption is required. During the year under review there was no foreign exchange inflow or Outflow. Directors’ Responsibility Statement : The Directors’ Responsibility Statement referred to in clause (c) of Sub-Section (3) of Section 134 of the Companies Act, 2013, shall state that : (a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period; (c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (d) The Directors had prepared the annual accounts on a going concern basis; (e) The Directors, in the case of a listed Company, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and (f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. Management Discussion & Analysis Report : Management Discussion and Analysis Report for the year under review, as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section forming part of the Annual Report. Listing on Stock Exchanges : The Equity Shares of your Company are listed with BSE Limited. The Securities Exchange Board of India (SEBI), on 2nd September, 2015, issued SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with aim to consolidate and streamline the provisions of Listing Agreement for different segment of capital market to ensure better enforceability, the said regulation become effective from 1st December, 2015. Accordingly all the listed entities were required to enter listing agreement within six months from the effective date. The Company entered Listing Agreement with BSE Limited. Further we confirm that, your Company has paid the listing fees for the financial year 2016-2017. During the year the equity shares of your Company were suspended from trading due to delay in compliance of Listing Agreement. Your Company has filed detailed representations urging for revocation of suspension from trading of equity shares and have made out a prima facie case for restoration of trading in equity shares of the Company with BSE Limited. Accordingly the trading in shares of your Company was restored w.e.f. 29th March, 2016. Corporate Governance : The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Company has also implemented several best Corporate Governance practices as prevalent in the industry. The report on Corporate Governance as stipulated under the Listing Regulation, 2015 forms an integral part of this Report. The requisite certificate from the Practising Company Secretary confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance. Corporate Social Responsibility : No disclosures on Corporate Social Responsibility are required as provision under Section 135 of the Companies Act, 2013 and Rules made thereunder are not applicable to the Company. Sexual Harassment of women at workplace : There were no incidences of sexual harassment reported during the year under review, in terms of the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. General : Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review : 1. Details relating to deposits covered under Chapter V of the Companies Act, 2013. 2. Issue of equity shares with differential rights as to dividend, voting or otherwise. 3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme ESOS. 4. Provision of money by Company for purchase of its own shares by employees or by trustees for the benefit of employees. 5. Bonus Shares. 6. Significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company operations in future. 7. Material changes and commitments, affecting the financial position of the Company occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report. Acknowledgement : Your Directors would like to express their sincere appreciation for the assistance and co-operation received from the Banks, Government authorities, customers and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the Company’s executives, staff and workers. For and on behalf of the Board of Directors By Order of the Board For MARGO FINANCE LIMITED ANIL KUMAR JAIN Chairman DIN : 00086106 Place : Mumbai Date : 2nd May, 2016 |