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Margo Finance Ltd.

BSE: 500206 | NSE: | Series: NA | ISIN: INE680B01019 | SECTOR: Finance - Leasing & Hire Purchase

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Annual Report

For Year :
2015 2014 2012 2011 2010 2009 2007 2006

Director’s Report

Dear Members, The Directors are pleased to present the 24th Annual Report of the Company together with the Audited Financial Statements and Auditors'' Report for the year ended 31st March, 2015. Financial Results : The Company''s financial performance, for the year ended 31st March, 2015 is summarized below: Particulars 2014-2015 2013-2014 (Rs. In lacs) (Rs. In lacs) Total Income 28.01 28.33 Profit/(Loss) before depreciation 2.55 (56.72) Less : depreciation 2.05 1.52 Profit / (Loss) before tax & 0.50 (58.24) extraordinary item Add: exceptional items 2.82 Less: extraordinary items Less: provision for taxation 1.00 3.71 Profit/(Loss) after tax (0.50) (59.13) Add : profit brought forward (1.82) 57.31 from previous year Less: depreciation of 0.62 the earlier year Less : transferred to Special Reserve Balance carried to the (-)2.94 (-)1.82 Balance Sheet Operations Review : The Company has incurred a Net Loss of Rs. 49,956/- during the year under review against the Net loss of Rs. 5,913,019/- in the Previous Year. Company is looking for an opportunity to make a suitable expansion/ diversification. Dividend : Your Directors have not recommended any dividend for the year under review. Reserves : During the financial year ended on 31st March, 2015 no such amounts being transferred to Reserve. Subsidiary and Associate Companies : The particulars of Associate Company as on 31st March, 2015 have been included in Form MGT-9 which is annexed to this report as Annexure C. However in accordance with Companies (Accounts) Amendment Rules, 2014 issued by the Ministry of Corporate affairs, Government of India, the consolidated financial statement of the Associate Company is not required to be annex for the financial year 2014-2015. Further the Company does not have any Subsidiary. Risk Management : The Company does not have any Risk Management Policy. However it has adopted risk mitigation measures in its business 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. Directors and Key Managerial Personnel: 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. Pursuant to Section 149 of the Companies Act, 2013, your Directors seek the appointment of Mr. Anilkumar Indralal Gulati and Mr. Venkiteswaran Venkitaswaran Parlikad as Independent Directors of the Company for 5 (Five) consecutive years, for a term up to 29th Annual General Meeting of the Company, subject to the approval of shareholders in the forthcoming Annual General Meeting. 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 the Companies Act, 2013 and Clause 49 of the Listing Agreement 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. Further Pursuant to Section 196 of the Companies Act, 2013, your Director''s seek the appointment of Ms. Rekha Tukaram Bolkar as the Managing Director of the Company for the tenure of 3 (Three) years, subject to the approval of the shareholders. The resolutions seeking approval of the shareholders for the appointment of Ms. Rekha Tukaram Bolkar have been incorporated in the notice of the forthcoming Annual General Meeting of the Company along with brief details about her. Pursuant to the provisions of Section 203 of the Act, which came into effect from 1st April, 2014, the appointments of Ms. Rekha Tukaram Bolkar, Managing Director; Mr. Shree Dass Maheshwari, Chief Financial Officer and Ms. Jyotsna Jindal, Company Secretary as key managerial personnel of the Company were formalized. Meetings of the Board: During the year 4 (Four) meetings of the Board of Directors were held i.e. on 14th May, 2014; 13th August, 2014; 13th November, 2014 and 11th February, 2015. For further details, please refer report on Corporate Governance forming part of Annual Report. Familiarisation of Independent Directors : The details of programmes 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 : Clause 49 of the Listing Agreement mandates that the Board shall monitor and review the Board evaluation framework. The Companies Act, 2013 states the formal annual evaluation needs to be made by Board of its own performance and that of its committees and individual Directors. Schedule IV of the Companies Act, 2013 states that the performance evaluation of the Independent Directors shall be done by the entire Board of 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 section 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 Sub-section 178 of the Companies Act, 2013, adopted by the Board, is appended as Annexure -A 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. Auditors and Auditor''s Report: Statutory Auditors : The Auditors, M/s AVK & Associates, Chartered Accountants, retire at the conclusion of the ensuing Annual General Meeting and being eligible have sought appointment. The Auditor has confirmed that, they satisfy the criteria provided under Section 141 of the Companies Act, 2013 and their appointment, if made would be in compliance with the conditions prescribed under the Act. The Audit Committee and the Board of Directors recommended the appointment of M/s AVK & Associates, Chartered Accountant, as Auditor of the Company for a Period of two years to hold office from the conclusion of the ensuing Annual General Meeting to the conclusion of the 26th Annual General Meeting of the Company, Subject to ratification by the members at each Annual General Meeting. The Auditors'' Report to the Member together with Accounts for the year ended 31st March, 2015 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 Auditor : Pursuant to the requirement of the Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rule, 2014, the Company has appointed Ashu Gupta & Co., Practising Company Secretary, to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended 31st March, 2015 is annexed herewith marked as Annexure B to this Report. The Secretarial Audit Report has contained the observation regarding the improper composition of the Board of Director and the Rotational Director. During the year the Company has rectify the observation in the Secretarial Auditor Report and in compliance with the applicable provision of the Companies Act, 2013 and Clause 49 of the Listing Agreement proper composition of the Board of Director and Rotational Director has been complied with. Audit Committee : The Audit Committee comprises of four Independent Directors and one Executive Director viz., Mr. Sushilkumar Krishan Agrawal (Chairman), Mr. Govind Prasad Agrawal, Mr. Anilkumar Indralal Gulati, Mr. Venkiteswaran Venkitaswaran Parlikad and Ms. Rekha Tukaram Bolkar as other members. All the recommendations made by the Audit Committee were accepted by the Board. Vigil Mechanism/Whistle Blower Policy: As per Companies Act, 2013 read with Clause 49 of the Listing Agreement, the Board of Directors of the Company have 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 behaviour, 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 are no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large, so there is no need to give disclosure of particulars of contracts/arrangements entered into by the Company with related parties referred in sub-section(1) of the Section 188 of the Companies Act, 2015 in FORM AOC-2 (Pursuant to clause (h) of sub section (3) of Section 134 of the Companies Act, 2015 and Rule 8(2) of the Companies (Accounts) Rules, 2014.Policy on dealing with related party transactions is available on the website of the Company www.margofinance.com. Particulars of Loans given, Investments made, Guarantees given and Securities provided: Particulars of loans given and investments made are mentioned respectively, in the schedule 2.10 and 2.09 in the notes to the accounts to the Balance Sheet for the financial year ended on 31st March, 2015. However the Company has not given any guarantee and security for any such loan. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo : Being a Non-Banking Financial Company, inclusion of particulars with respect to conservation of energy, technology absorption as required under Companies (Disclosure of particulars in the report of Directors) Rules, 1975 is not required. Further the provisions of Section 134(m) of the Companies Act, 2013 do not apply to our Company. There was no foreign exchange inflow or Outflow during the year under review. 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 C. 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, will be provided upon request. In terms of Section 136 of the Act, the reports and accounts are being sent to the members and others entitled thereto, excluding the information on employees particulars which is available for inspection by the members at the Registered office of the Company during business hours on working days of the Company up to the date of ensuing Annual General Meeting. If any member is interested in inspecting the same, such member may write to the Company Secretary in advance. 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; and (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. (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 Clause 49 of the Listing Agreement with the Stock Exchange in India, is presented in a separate section forming part of the Annual Report. 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 Agreement 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. 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 Place : Mumbai Chairman Date : 13th May, 2015 DIN : 00086106

Director’s Report