DIRECTOR'S REPORT 1.The Board of Directors of The Motor & General Finance Limited take pleasure in presenting their 85th Report on the business and operations of the company and the accounts for the financial year ended March 31,2015. 2. Dividend & Reserves On account of loss reported by the company during the current year, the Board of Directors have not recommended any dividend. Reserves and Surplus as on March 31,2015 stood at Rs. 6858.16 lacs. Keeping in view the decision of the FRRB with respect to the rectification and /or restatement of the financial statement, in compliance, the company has made provision as on March31,2015 for diminution in value of long term investments amounting to Rs. 214.57 lacs . There is, as such, no audit qualification in the financial statements by the statutory auditors for the year under review. 3. Share Capital The Paid up Equity Share Capital as on March 31, 2015 stood at Rs.1936.35 lacs. During the year there is no increase in the Share Capital. 4. Finance and Accounts Your company prepared its financial statements in compliance with the requirements of the Companies Act, 2013 and have been prepared on historical cost basis. The estimates and judgments relating to the financial statements are made on a prudent basis, so as to reflect a true and fair manner. 5. Corporate Governance As per Clause 49 of the Listing Agreement with the Stock Exchanges, Auditor's Certificate regarding the compliance of conditions of Corporate Governance (Annexure'A') and Management Discussion and Analysis Report(Annexure 'B') forms part of this report. A separate section on Corporate Governance practices followed by the company from the company's auditors confirming compliance forms an integral part of this report. 6. Extract of Annual Return Details forming part of the extract of the Annual Return in form MGT-9, as required under Section 92 of the Companies Act, 2013, is included in this report as Annexure- C and forms an integral part of the report. 7. Policy on Directors' Appointment and Remuneration and other details The Board has, in terms of section 178(3) of the Companies Act,2013, on the recommendation of the Nomination & Remuneration Committee, laid down a Nomination & Remuneration policy for selection and appointment of the Directors, Key Managerial Personnel and Senior Management and their remuneration. The company's policy on Directors' appointment and remuneration is stated in the Corporate Governance Report. As at March 31,2015, your Board comprised of following six Directors:- i) Sh. Rajiv Gupta, Chairman & Managing Director The Board of Directors, upon the recommendations of the Remuneration Committee consequent to the demise of Sh. Ved Prakash Gupa, Chairman Emeritus, designated Sh. Rajiv Gupta(DIN:00022964), the Managing Director, as the Chairman & Managing Director of the company with effect from September 1,2005. Further, on the recommendation of Nomination & Remuneration Committee, he was re-appointed by the Board at its meeting held on March 10,2014 for a period of three years with effect from April 1,2014 to March 31,2017 which was approved by the shareholders through Postal Ballot on April 25,2014. Also, on the recommendation of the Nomination and Remuneration Committee, the Board of Directors at its meeting held on October 20,2014, considered the variation in the terms of remuneration with effect from December 1,2014 and the same was approved by the shareholders through Postal Ballot on December 12, 2014. The Board of Directors in their meeting held on August 13,2015, on the recommendation of the Nomination & Remuneration Committee, have also considered the variation in the terms of remuneration viz increase in the salary with effect from October 1, 2015 upto March 31, 2017 as set out in the resolution to be passed by the shareholders in the ensuing Annual General Meeting. ii) Smt. Arti Gupta, Joint Managing Director Smt. Arti Gupta(DIN:00023237), on the recommendations of the Remuneration Committee was appointed by the members in their meeting held on August 29,2008 as Joint Managing Director of the company for a period of three years from June 5,2008 to June 4,2011. Smt. Arti Gupta is related to Sh. Rajiv Gupta, Chairman & Managing Director and on the recommendation of Nomination & Remuneration Committee, she was re-appointed by the Board at its meeting held on March 10,2014 for a period of three years from June 5,2014 to June 4,2017 which was approved through Postal Ballot by the shareholders on April 25,2014. Also, on the recommendation of the Nomination and Remuneration Committee, the Board of Directors at its meeting held on October 20,2014, considered the variation in the terms of remuneration with effect from December 1,2014 and the same was approved by the shareholders through Postal Ballot on December 12,2014. The Board of Directors in their meeting held on August 13,2015, on the recommendation of the Nomination & Remuneration Committee, have also considered the variation in the terms of remuneration viz ncrease in the salary with effect from October 1, 2015 upto June 4,2017 as set out in the resolution to be passed by the shareholders in the ensuing Annual General Meeting. In the case of Smt. Arti Gupta, Joint Managing Director, there is due compliance of section 149(1) of the Companies Act,2013 and clause 49 of the Listing Agreement, providing for appointment of Woman Director on the Board. iii) Sh. Arun Mitter, Executive Director Sh. Arun Mitter(DIN:00022941), a Chartered Accountant, was appointed as Whole Time Director in the company in the year 2002 and since then, his appointment has been renewed from time to time. On the recommendation of Nomination & Remuneration Committee, he was re-appointed by the Board at its meeting held on March 10,2014 for a period of three years with effect from July 11,2014 to July 10,2017 which was approved through Postal Ballot by the shareholders on April 25,2014. Further, on the recommendation of the Nomination and Remuneration Committee, the Board of Directors at its meeting held on October 20,2014, considered the variation in the terms of remuneration with effect from December 1,2014 and the same was approved by the shareholders through Postal Ballot on December 12,2014. The Board of Directors in their meeting held on August 13,2015, on the recommendation of the Nomination & Remuneration Committee, have also considered the variation in the terms of remuneration viz increase in the salary with effect from October 1, 2015 upto July 10,2017 as set out in the resolution to be passed by the shareholders in the ensuing Annual General Meeting. iv) Sh. Bharat Kumar, Independent Director Sh. Bharat Kumar(DIN:00990117) was appointed by the Board in their meeting held on March 19,2002, He is a graduate in Commerce and holds a rich business experience. Pursuant to the provisions of Section 149, 150, 152 and any other applicable provisions of the Companies Act,2013 and rules made thereunder, Sh.Bharat Kumar has been appointed as an Independent Director whose term of office shall not be liable to retirement by rotation in terms of section 149(13) of the said Act. Declaration has been received to the effect that he meets the criteria of independence as provided in section 149(6) of the Act. He holds the office for five consecutive years with effect from September 18,2014 upto September 17, 2019. v) Sh. Abhiram Seth, Independent Director Sh.Abhiram Seth(DIN:00176144) was appointed by the Board in their meeting held on April 29,2006. He is graduate in Economics and Master in Management Studies and holds extensive experience in diverse fields. Pursuant to the provisions of Section 149, 150, 152 and any other applicable provisions of the Companies Act,2013 and rules made thereunder, Sh. Abhiram Seth has been appointed as an Independent Director whose term of office shall not be liable to retirement by rotation in terms of section 149(13) of the said Act. Declaration has been received to the effect that he meets the criteria of independence as provided in section 149(6) of the said Act. He holds the office for five consecutive years with effect from September 18,2014 upto September 17, 2019. vi) Sh. Onkar Nath Aggarwal, Independent Director Sh. Onkar Nath Aggarwal(DIN:00629878) was appointed by the Board in their meeting held on December 31,2005. He is a qualified Mechanical Engineer and holds DLCT(Hons) degree from UK. Pursuant to the provisions of Section 149, 150, 152 and any other applicable provisions of the Companies Act,2013 and rules made thereunder, Sh.Onkar Nath Aggarwal has been appointed as an Independent Director w.e.f. March 31,2015 whose term of office shall not be liable to retirement by rotation in terms of section 149(13) of the said Act. Declaration has been received to the effect that he meets the criteria of independence as provided in section 149(6) of the said Act. His appointment as an Independent Director shall be placed before the shareholders in the ensuing AGM. He holds the office for five consecutive years with effect from March 31,2015 to March 30, 2020. Resignation of Director Sh. Sharad Aggarwal, During the year, Sh. Sharad Aggarwal, an Independent Director, resigned from the Board. The Board of Directors wish to place on record their deep appreciation for the valuable contributions made by Sh. Sharad Aggawal during his tenure as an Independent Director on the Board. 8. Director's Responsibility Statement The Directors confirm that to the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of section 134(3)(c) of the Companies Act, 2013. i) That in the preparation of the annual accounts for the financial year ended March 31,2015, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any; ii) 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 loss of the company for that period. iii) That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities. iv) That annual accounts have been prepared on 'going concern ' basis. v) That the Directors 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 vi) That 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. vii(a) Audit Observation The audit observations on the financial statements are suitably explained as and where necessary in the notes on accounts. 9. Directors retiring by rotation In accordance with the provisions of Section 152 of the Companies Act, 2013 and the company's Articles of Association, Sh. Rajiv Gupta, Chairman and Managing Director and Smt. Arti Gupta, Joint Managing Director retire by rotation in the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. 11. Board Evaluation Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out annual evaluation of its performance, the directors individually as well as the evaluation of the working of its Audit and Nomination and Remuneration Committees. It has also evaluated the various aspects of the Board's functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance. The performance evaluation of the Independent Directors was completed. The Chairman and the Non-Independent Directors performance evaluation was also carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process. 12. Number of Meetings of the Board The details of the number of meetings of the Board held during the Financial Year 2014-2015 forms part of the Corporate Governance Report. 13. Particulars of Loans, Guarantees or Investments by the Company Details of Loans, Guarantees and Investments covered under the provisions of section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. Refer Note No.26(ii) & 26(xii). 14. Whistle Blower Policy The company has a Whistle Blower Policy to report genuine concerns of grievances. The Whistle Blower Policy is also available on the website of the company www.mgfltd.com 15. Related Party Transactions All transactions entered with Related Parties for the year under review were on arm's length basis and in the ordinary course of business. Further, there was no transaction with related parties that may have potential conflict with the interest of the company. Details of related party transactions entered into by the company in the ordinary course of business and at arm's length price are included in the notes forming part of the Financial Statements. Refer Note No. 26(vii)(b). There are no material related party transactions between the company and the related parties as defined under clause 49 of the Listing Agreement. All Related Party Transactions are placed before the Audit Committee as also to the Board for approval. The Policy on Related Party Transactions as approved by the Board of Directors has been uploaded on the website of the company. None of the Directors has any pecuniary relationship or transactions vis-a-vis the company. 16. Statutory Auditors Pursuant to the provisions of Section 139 of the Companies Act,2013 and the Rules made thereunder the current auditors of the company M/s S.N.Dhawan & Co, Chartered Accountants ( Firm Regd No.000050N) are eligible to hold office for the second consecutive year (in the term of three consecutive years approved at the last Annual General Meeting) and as such, are recommended for reappointment to audit the accounts of the company for the financial year ending 2015-16. As required under the provisions of section 139 of the Companies Act,2013, the company has obtained written confirmation from M/s S.N. Dhawan & Co, Chartered Accountants that their appointment, if made, would be in conformity within the limits specified in the said section. The members are requested to appoint M/s. S.N. Dhawan & Co, Chartered Accountants, as auditors for the year 2015-16 and authorize the Board to fix their remuneration. 17. Cost Auditors The Board of Directors, on the recommendation of Audit Committee, has re-appointed M/s PSK & Associates, Cost Accountants,(Firm Regd No. 000514) as Cost Auditors to audit the cost accounts of the company for the financial year ending 2015-16 at a remuneration of Rs. 40,000 plus service tax, as applicable. As required under the Companies Act, 2013, a resolution seeking member's approval for the remuneration payable to the Cost Auditor forms part of the Notice. As required under the Act and rules made thereunder, the remuneration payable to the Cost Auditors is required to be placed before the members in general meeting for approval. Accordingly, resolution seeking approval by members for the remuneration payable to M/s PSK & Associates, Cost Accountants, is included in the notice. 18. Secretarial Auditors Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made there under, the company has appointed M/s Anjali Yadav & Associates, a firm of Company Secretaries in Practice, (FCS No.6628 & CP No.7257) to undertake the Secretarial Audit of the company. The Secretarial Audit Report is included as Annexure-D in Form No.MR-3 and forms an integral part of this report. There is no secretarial audit qualification for the year under review. 19. Internal Auditor & Internal Control The internal audit has been entrusted to Mr. S.K. Aggarwal, a Chartered Accountant. The company has in place adequate internal financial controls with reference to the financial statement and is in commensurate with its size, scale and complexities of its operations. The Audit Committee periodically reviews the internal control systems with the management, internal auditors and statutory auditors and the adequacy of internal audit function, significant internal audit findings and follow ups thereon. 20. Risk Management The Board of Directors has formed a risk management committee to frame, implement and monitor the risk management plan for the company. The committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The audit committee has additional oversight in the area of financial risks and controls. The development and implementation of risk management policy has been covered in the management discussions and analysis, which forms part of this report. 21. Board Committees The Board has the following committees:- (i) Audit Committee The audit committee of the Board of the Directors comprises of three (3) directors namely Sh. Bharat Kumar, Sh. Abhiram Seth and Sh. Onkar Nath Aggarwal, all of them being independent directors. Sh. Bharat Kumar is the Chairman of the Audit Committee. The Board accepts recommendations of the Audit Committee whenever made by the committee. (ii) Nomination & Remuneration Committee Nomination & Remuneration Committee comprises of five(5) directors namely, Sh. Rajiv Gupta, Sh. Arun Mitter, Sh. Bharat Kumar, Sh. Abhiram Seth and Sh. Onkar Nath Aggarwal. Out of five Directors, three directors are Independent Directors. Sh. Abhiram Seth, Independent Director, is the Chairman of the Committee. The Board accepts recommendations of the committee based on the policy on the Directors' appointment and other details as is required under Section 178(4) of the Act in the matter of appointment/reappointments of the Directors, Senior Managers and fixation of remuneration etc. (iii) Stakeholders Relationship Committee Stakeholders Relationship Committee comprises of five (5) Directors, namely Sh. Rajiv Gupta, Smt. Arti Gupta, Sh. Arun Mitter, Sh. Bharat Kumar and Sh. Abhiram Seth. Out of five Directors, two directors are Independent Directors. Sh. Abhiram Seth, Independent Director, is the Chairman of the Committee. The Committee looks into and resolves the grievances of the stakeholders. (iv) Corporate Social Responsibility (CSR) Committee Corporate Social Responsibility (CSR) Committee comprises of three Directors, namely, Sh. Abhiram Seth, Sh. Arun Mitter and Sh. Onkar Nath Aggarwal( appointed as an Independent Director on March 31,2015). Out of three directors, two directors are Independent Directors. Sh. Abhiram Seth, Independent Director is the Chairman of the Corporate Social Responsibility Committee. Corporate Social Responsibility (CSR) Policy As a part of its initiative under the "Corporate Social Responsibility"(CSR) drive, the company has undertaken projects in the area of promoting education, renovation of school building and running of school and libraries etc. This is in accordance with Schedule VII of the Companies Act, 2013 and the company's CSR policy. The report on CSR activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 is set out as Annexure-'E' forming part of this report. The Board of Directors on the recommendation of Corporate Social Responsibility Committee, has approved the CSR Policy of the company which is also available on company's website www.mgfltd.com . (v) Risk Management Committee Risk Management Committee comprises of three(3) Directors, namely, Sh. Bharat Kumar, Sh. Arun Mitter and Sh. Abhiram Seth. Out of three directors, two directors are Independent Directors. Sh. Bharat Kumar, Independent Director, is the Chairman of the Committee. 22. CEO/CFO Certification The CEO and the CFO of the company have certified to the Board with regard to the compliance made by them in terms of clause 49(V) of the listing agreement. 23. Particulars of Employees There are no employees in receipt of remuneration which, inter-alia, requires the company to furnish the particulars of Employees as required under Rule 5(2) & 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel )Rules, 2014. 25. Listing of Shares & Listing Fee The shares of the company are listed on the BSE Limited(BSE) and National Stock Exchange of India Limited(NSE). The listing fee for the year 2015-16 has already been paid to the credit of both the stock exchanges. 26. Dematerialization Members who have not yet got their shares dematerialized, are requested to opt for the same in their own interest and send their certificate through Depository Participants(s) with whom, they have dematerialized account, to the company's registrar and transfer agents, M/s Alankit Assignments Limited, Alankit Heights,1E/13, Jhandewalan Extension, New Delhi-110055. Further The Securities and Exchange Board of India(SEBI) has mandated the submission of Permanent Account Number(PAN) by every participant in securities market. Members holding shares in electronic form are, therefore, requested to submit the PAN to their Depository Participant with whom they are maintaining their Demat Accounts. Members holding shares in physical form can submit their PAN details to the company. 27. Compliance of the Statutory Authorities The company has complied with the requirements of the Stock Exchanges, SEBI and other statutory authorities on all matters relating to the capital markets during the last three years. No penalties or strictures have been imposed on the company by the Stock Exchanges or SEBI or any other statutory authorities relating to the above. 28. Code of Conduct for Directors and Senior Management The Board of Directors of the company has adopted a Code of Conduct for directors and senior management and the same is available on the website of the company i.e. http//www.mgfltd.com 29. Insider Trading Code The Board of Directors in their meeting held on May 14,2015 has adopted a Code of Conduct under SEBI( Prohibition of Insider Trading) Regulations,2015 superseding the 1992 Code. The code is applicable to all designated and connected persons of the company and their immediate relatives, promoters, promoter's group, all directors who are expected to have access to unpublished price sensitive information relating to the company. The company has appointed Mr. M.K. Madan, Vice President & Company Secretary of the company as Compliance Officer under the said regulations. 30. Public Deposits The company has not taken or invited any fixed deposits from the public during the year under review within the meaning of Section 73 to 76 of the Companies Act, 2013 or rules made thereunder. There are no unclaimed deposits. 32. E-mail ID for Investor's Grievances In compliance of sub clause (f) of Clause 47 of the Listing Agreement, the company has designated an e-mail address i.e. mgfcomplaints@yahoo.co.in for the purpose of registering complaints by investors for redressal of their grievances. 33. Nomination Facility In case, any of the members wish to avail facility of Nomination,(Form 2B), they are requested to send the duly completed form to the Registrars and/or at the Registered Office of the company. 34. Consolidation of folios Members who may have more than one folio in their individual name or jointly with other persons mentioned in the same order, are requested to write to the Registrars and Share Transfer Agents indicating the folio numbers for consolidation of similar holdings under one folio. 35. Acknowledgements Directors place on record their thanks for the assistance and cooperation received from banks and all other customers for their continued support and patronage. Yours Directors also wish to place on record the dedicated and devoted services rendered by all personnel of the company. . For and on behalf of the Board FOR THE MOTOR & GENERAL FINANCE LIMITED (RAJIV GUPTA) CHAIRMAN & MANAGING DIRECTOR & CHIEF EXECUTIVE OFFICER DIN:00022964 (ARTI GUPTA) JOINT MANAGING DIRECTOR DIN:00023237 Place: New Delhi Dated: August 13, 2015 |