DIRECTOR'S REPORT TO THE SHAREHOLDERS, MORARKA FINANCE LIMITED The Directors are pleased to present their report to the members together with the audited financial statements of the Company for the year ended 31st March, 2015 2. FINANCIAL PERFORMANCE: For the financial year ended March 31, 2015, your company has posted losses of Rs 3.75 lacs compare to the losses for the financial year ended March 31, 2014 of Rs. 21.15 lacs. Hence compare to previous year, the losses are significantly lesser which indicated the improvement in financial performance compare to last year. 3. SUBSIDIARIES COMPANIES: Your Company has no subsidiaries. 4. DIVIDEND: Your directors have not recommended any dividends in view of losses incurred by the company during the year. 5. SHARE CAPITAL: The paid up Equity Capital of your company as at March 31, 2015 was Rs 4,50,21,000. The company has not issued any shares with differential voting rights and it has not granted any stock options or sweat equity during the period under the review. Further, none of the directors of the company hold instruments convertible into equity shares of the company. 6. DIRECTORS: Pursuant to section 149 of the Companies Act, 2013 read with schedule IV and Articles of the company, Ms. Priyanka Morarka, and Mr. G. R. Morarka Directors retire by rotation and being eligible offer themselves for re-appointment. The company has received declarations from all the independent directors of the company confirming the fact that they meet the criteria of independence mentioned under section 149(6) of the Companies Act, 2013 read with clause 49 of the listing agreement. 7. CORPORATE SOCIAL RESPONSIBILITY: The company is not falling in the purview of criteria specified in section 135(1) of the Companies Act, 2013 and hence the requirements pertaining to section 135 of the Companies Act, 2013 is not applicable to the company. 8. HUMAN RESOURCES: The company is having five directors, chief executive officer, chief finance officer and company secretary being key managerial personnel under section 203 of the Companies Act, 2013. All are experts in their relevant fields. Company's well disciplined workforce which has served the company for years lies at the very foundation of the company's major achievements and shall well continue for the years to come. 9. BUSINESS RISK MANAGEMENT: Over the period of time, company has been following the principle of risk minimization as is the norm in every sector, it has now become a mandatory requirement. Pursuant to clause 49 of the listing agreement the Board members were informed about risk assessment and minimization procedures after which the Board formally accepted steps for framing, implementing and monitoring the risk management plan for the company. The main objective of this policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues. In today's challenging and competitive environment, strategies for mitigating inherent risks in accomplishing the growth plans of the Company are imperative. The common risks inter alia are: Regulations, competition, Business risk, Technology obsolescence, Investments, retention of talent and expansion of facilities. Business risk, inter-alia, further includes financial risk, political risk, fidelity risk, legal risk. As a matter of policy, these risks are assessed and steps as appropriate are taken to mitigate the same. 10. SYSTEM OF INTERNAL CONTROL & THEIR ADEQUACY: The Company has put in place adequate system of internal control to safeguard and protect from loss, unauthorized use or disposition of its assets. All the transactions are properly authorized, recorded and reported to the Management. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. The internal auditor of the company checks and verifies the internal control and monitors them in accordance with policy adopted by the company. Even through this non-production period the Company continues to ensure proper and adequate systems and procedures commensurate with its size and nature of its business. 11. WHSITLE BLOWER POLICY OR VIGIL MECHANISM: The company has put in place a whistle blower policy pursuant to which employees of the company can raise their concerns pertaining to fraud, malpractice, or any other activity or event which is against the interest of the company. Details of complaints received and the action taken are reviewed by the Audit Committee. Whistle Blowers Mechanism's functioning is reviewed by the Audit Committee from time to time. None of the company's employees are denied access to audit committee. 12. EVALUATION OF BOARD: As per clause 49 of the listing agreement and as per the provisions of the Companies Act, 2013, a structured questionnaire was prepared after taking into account various aspects of Board's functioning, composition of board together with its committees, culture, execution and performance of specific roles, duties and obligation. So far as the performance evaluation of independent directors are concerned, the same is done by board. The chairman and executive directors are evaluated by the independent directors. The board has expressed that they are satisfied with process of evaluation. Declaration from Independent Directors: Pursuant to the requirements of section 149(7) of the Companies Act, 2013, the company has received the declarations from all the independent directors confirming the fact that they all are meeting the eligibility criteria as stated in section 149(6) of the Companies act, 2013. 13. POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL: The company is having Nomination and Remuneration Committee (NRC) as required under section 178 of the Companies Act, 2013 which recommends the appointment of Directors to the Board. The NRC is having onus to identify persons who are qualified to become directors on the Board and to evaluate criteria such as academic qualifications, previous experience, track record and integrity of the persons identified before recommending their appointment to the Board. The compensation policy of the company, duly reviewed and recommended by the Nomination and Remuneration committee has been articulated in line with the requirements of the Companies Act, 2013. The company's compensation policy is aimed to attract, retain, reward and motivate talented individuals critical for achieving strategic goals and long term success. Remuneration policy is aligned to business strategy, market dynamics, internal characteristics and complexities within the organization. The ultimate objective is to provide a fair and transparent structure that helps the organization to retain and acquire the talent pool critical to building competitive advantage and brand equity. The compensation system should also take into account factors like roles, skills / competencies, experience and grade / seniority to differentiate pay appropriately on the basis of contribution, skill and availability of talent on account of competitive market forces. The company pays sitting fees to its Non executive directors for attending meetings of the Board and its Committees, Non executive directors are also reimbursed with expenses incurred by them for attending meetings of the Board and its Committees at actuals. The remuneration payable to the non executive directors and independent Directors is governed by the provisions of the Companies Act, 2013, clause 49 of the listing agreement and related rules. The company is not having any subsidiary and hence holding directorships by any of the directors of the company in subsidiary is not applicable in case of the company. Shri B. J. Maheshwari and Shri Vijay S. Banka have relinquished their sitting fees payable to them for attending the Board/ Committee meetings. 14. BOARD & BOARD COMMITTEES : The details of board meetings held during the year, attendance of directors at the meetings and constitutions of various mandatory committees of the board are included separately in the corporate governance report. 15. RELATED PARTY TRANSACTIONS: Related party transactions that were entered during the financial year were on an arm's length basis and were in the ordinary course of business. There were no materially significant related party transactions with the Company's Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. Transactions with related parties entered by the Company in the normal course of business are periodically placed before the Audit Committee for its omnibus approval and the particulars of contracts entered during the year as per Form AOC-2 is enclosed herewith and marked as Annexure I. The Board of Directors of the Company has, on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act 2013, the rules thereunder and the Listing Agreement. 16. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATOR OR COURTS: There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations. 17. DIRECTORS AND KEY MANAGERIAL PERSONNEL: Mr. G. R. Morarka and Ms. Priyanka G. Morarka will retire by rotation in ensuing Annual General Meeting and are eligible for re-appointment. The brief resume/details relating to Directors who are to be appointed / re-appointed as above are furnished in the Corporate Governance. During the year under the review, there are no any change in any other directors and KMPs 18. STATEMENT OF DIRECTOR'S RESPONSIBILITIES: To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013: a) that in the preparation of the annual financial statements for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b) that such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit/ loss of the Company for the year ended on that date; c) that proper and sufficient care has been taken 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; d) that the annual financial statements have been prepared on a going concern basis; e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively. f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. 19. CORPORATE GOVERNANCE: As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on corporate governance practices followed by the Company, together with a certificate from the Company's Auditor confirming compliance forms an integral part of this Report. 20. EXTRACT OF ANNUAL RETURN: The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith and marked as Annexure II. 21. PARTICULARS OF EMPLOYEE: 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 is attached herewith and marked as Annexure III. All the non executive directors of the company, due to financial constraints being faced by the company, have forgone remuneration. Further, no sitting fees has been paid to any director during the year, except to Mr. S. H.Nevatia and Ms. Priyanka Morarka. The particulars of the employees who are covered by the provisions contained in Rule 5(2) and rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are: a) Employed throughout the year Nil b) Employed for part of the year Nil The remuneration paid to all Key management Personnel was in accordance with remuneration policy adopted by the company. 22. POLICY ON PREVENTION OF SEXUAL HARASSMENT: The Company has put in place a policy on Anti Sexual harassment, No complaints have been received under this policy during the period. 23. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE AND OUTGO: Particulars relating to conservation of energy and technology absorption stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014 is not applicable to the company. The company does not have any foreign exchange earnings and expenditure. 24. AUDITORS: STATUTORY AUDITORS The Auditors, M/s. D.P. Agarwal & Co., Chartered Accountants, retire at this Annual General Meeting and being eligible, offer themselves for re-appointment subject to ratification by members at every consequent Annual General Meeting. Therefore, ratification of appointment of Statutory Auditors is being sought from the members of the Company at the ensuing AGM. 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 has appointed V K M & Associates. (CP No.:4279, FCS: 5023),Company Secretaries to undertake the secretarial audit of the company.The Secretarial Audit Report is annexed herewith as Annexure IV. The observations in the said report are self explanatory and no further comments/explanations are called for. 25. MANAGEMENT DISCUSSON AND ANALYSIS: As required under Clause 49 of the Listing Agreements with Stock Exchanges, the Management Discussion and Analysis Report is enclosed as a part of this report. 26. PUBLIC DEPOSITS The Company is an NBFC - ND and hence does not have any fixed deposits at the beginning of the year in terms of Section 74 of the Companies Act, 2013. The Company did not accept any deposits during the year. 27. ACKNOWLEDGEMENT: Your Directors take this opportunity to place on record their appreciation for the co-operation received from Employees and overwhelming support extended by the shareholders. By order of the Board FOR MORARKA FINANCE LIMITED G. R. MORARKA CHAIRMAN B. J. MAHESHWARI DIRECTOR PLACE : Mumbai DATED: 29th May, 2015 |