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Munoth Financial Services Directors Report, Munoth Fin Serv Reports by Directors
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Munoth Financial Services

BSE: 531821|ISIN: INE348D01019|SECTOR: Finance - General
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Directors Report Year End : Mar '15    Mar 14
Dear Members,
 
 Your Directors have pleasure in presenting their Twenty Fourth Annual
 Report together with the Audited Accounts for the year ended March
 31,2015.
 
 FINANCIAL RESULTS:
 
 Particulars                                  2014-2015        2013-2014
                                             Rs.in Lacs      Rs. in Lacs
 
 Total Revenue                                   153.56           121.67
 
 Total Expenses                                  162.88           134.98
 
 Profit or Loss before Exceptional and
 
 Extraordinary items and Tax                      (9.32)          (13.31)
 
 Less: Exceptional Items                               -               -
 
 Less: Extraordinary Items                             -               -
 
 Profit /(Loss)before Tax                         (9.32)          (13.31)
 
 Less: Current Tax                                     -               -
 
 Deferred Tax                                     (2.63)            0.76
 
 Profit/(Loss) after Tax                          (6.69)          (14.07)
 
 Add: Balance as per statement of Profit & Loss    27.75           41.82
 
 Add: Adjustment relating to Fixed Asset          (6.48)               -
 
 Balance (statement of Profit & Loss)
 
 Transferred to Balance Sheet                      14.57           27.75
 
 REVIEW OF BUSINESS OPERATIONS:
 
 During the financial year 2014-15, the Company''s total revenue has
 increased to Rs. 153.56 lakhs compared to Rs. 121.67 lakhs in the
 previous year. The total income from operations has increased to Rs.
 145.01 lakhs compared to Rs. 104.13 lakhs in the previous year. The
 Company was able to reduce losses to Rs. 6.69 lakhs as against Rs.
 14.07 lakhs in the previous year.
 
 Stock Broking
 
 Income from stock broking operations has increased from Rs. 26.90 lakhs
 in the previous year to Rs.  52.15 lakhs in the current year. The
 broking turnover of the company in cash segment is Rs. 184.78 crores
 compared to Rs. 188.69 crores in the last financial year and in F & O
 segment is Rs.2926.61 crores compared to Rs. 501.10 crores in the last
 financial year.
 
 The Company provides institutional broking business and is empanelled
 with several public sector banks and insurance companies.
 
 Depository participant:
 
 As a Depository Participant the company offers facilities to both
 institutional and retail investors to maintain their investments in
 securities in electronic form. Income from Depository operations has
 increased to Rs. 22.01 lakhs against Rs. 10.05 lakhs in the previous
 year.
 
 Portfolio Management Services:
 
 The Company continues to provide PMS services under both discretionary
 and non - discretionary basis. Income from Portfolio Management
 services amounted to Rs. 0.83 lakhs in the current financial year.
 
 Merchant Banking:
 
 The Company is in the process of doing assignments related to SME
 segment.
 
 The Company has been appointed as Investment Managers by IL & FS Trust
 Company Limited for Valmark Infra and Realty Trust, a SEBI registered
 Alternate Investment Fund - Category II (AIF II) .and the first scheme
 of the trust is targeting a corpus of Rs 125 crores comprising of units
 of INR 1 crore each on private placement basis for investment horizon
 of 3 to 5 years. The fund announced its first closing on October 29,
 2013
 
 Income from Management services amounted to Rs. 70 Lakhs in the current
 financial year
 
 FUTURE PROSPECTS
 
 The Company will endeavor to increase income from operations by
 focusing on HNI''s in the retail segment in stock broking division. The
 Company is also working on getting itself empanelled with more public
 sector banks and insurance companies under institutional broking. The
 Company will continue to focus on getting more HNIs and NRIs in both
 discretionary and non-discretionary basis in Portfolio Management
 service division. The company will try to do assignments related to SME
 segment, delisting and other issue related activities.
 
 DIVIDEND:
 
 The Board of Directors has decided not to recommend any dividend.
 
 TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION
 FUND:
 
 The provisions of Section 125(2) of the companies Act, 2013 do not
 apply as there was no dividend declared and paid last year.
 
 MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF
 THE COMPANY WHCIH HAS OCCURRED BETWEEN 31ST MARCH 2015 ( THE END OF THE
 FINANCIAL YEAR and 22nd MAY 2015 (THE DATE OF REPORT)
 
 There were no material changes and commitments affecting the financial
 position of the company between 31st March 2015 ( the end of the
 financial year) and 22nd May 2015 (the date of the report).
 
 CONSERVATION OF ENERGY, TECHNOLOGYABSORPTION, FOREIGN EXCHANGE EARNING
 AND OUTGO.
 
 The Company has no activities relating to conservation of energy,
 technology absorption, foreign exchange earning and outgo and hence the
 provisions of Section 134(m) of the Companies Act, 2013 is not
 applicable to the Company.
 
 STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT
 POLICY OF THE COMPANY
 
 The Risk Management Committee of the Company continuously monitors
 business and operations risk through an efficient risk management
 system.
 
 DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS
 CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:
 
 The Company has not developed and implemented any Corporate Social
 Responsibility initiatives as the said provisions are not applicable
 for the financial year 2014-15.
 
 PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
 
 The Company has not provided working capital loan, Guarantee or
 provided security. The details of investments made by the company are
 given in the notes to the financial statements.
 
 COMPANY''S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF
 REMUNERATION AND DISCHARE OF THEIR DUTIES.
 
 The Company''s Policy relating to appointment of Directors, payment of
 managerial remuneration, Director''s qualifications, positive
 attributes, independence of Directors and other related matters as
 provided under Section 178(3) of the Companies Act, 2013 is furnished
 as Annexure 1 and is attached to this report.
 
 EVALUATION
 
 The aspects covered in the evaluation included the contribution made by
 the Directors to the corporate governance practices, long term
 strategic planning, fulfillment of Director''s obligations and fiduciary
 responsibilities and active participation at the Board and Committee
 meetings. The effectiveness of Board / Committee processes were
 assessed based on the Directors'' inputs received during the meetings of
 the Board and one to one meeting by the Chairman with the Directors.
 
 EXTRACT OF ANNUAL RETURN
 
 The Extract of Annual return as on March 31,2015 as provided under
 Sub-section (3) of section 92 in Form No. MGT - 9 is being annexed as
 Annexure 2 to the report
 
 MANAGEMENT DISCUSSION ANDANALYSIS REPORT
 
 Management Discussion and Analysis Report for the year under review, as
 stipulated under Clause 49 of the Listing Agreement with the Stock
 Exchange is presented in separate section forming part of the Annual
 Report as Annexure 3
 
 DIRECTOR''S RESPONSIBILITY STATEMENT:
 
 As requred in Clause (c) of Sub- Section (3) of Section 134 of the
 Companies Act, 2013, your Director confirms and state that-
 
 a) In the preparation of the annual accounts, the applicable accounting
 standards have 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 close of the financial year ended 31st March 2015
 and of the Profit/Loss of the company for the year ended 31st March
 2015.
 
 c) The Directors had taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, for safeguarding the assets of the
 Company and for preventing and detecting fraud and other
 irregularities.
 
 d) The Directors have prepared the annual accounts on a going concern
 basis.
 
 e) The Directors, have 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.
 
 DEPOSITS
 
 The Company has not accepted any public deposits and, as such, no
 amount on account of principal or interest on public deposits was
 outstanding as on the date of balance sheet.
 
 DIRECTORS:
 
 Mr. Bharat Munoth, Mr. Jaswant Munoth and Mr. Lalchand Munoth retires
 by rotation at the forthcoming Annual General Meeting and being
 eligible offers themselves for re-appointment.
 
 Mr. Jaswant Munoth, whose period of office of Managing Director expired
 on June 24, 2015 was appointed as the Managing Director of the Company
 for the period of 2 years from 25th June 2015 to 24th June 2017 subject
 to the approval of the shareholders at the AGM.
 
 Ms. Lakshika Mehta has been appointed as an Additional Director of the
 Company with effect from May 22, 2015. she is proposed to be appointed
 as Independent Director at the ensuing Annual General Meeting for a
 term of 5 consecutive years from the date of the ensuing Annual General
 Meeting as required under Section 149 of the Companies Act, 2013 and
 Clause 49 of the Listing Agreement.
 
 The profiles of Mr. Jaswant Munoth, Managing Director, Mr. Bharat
 Munoth, Mr. Lalchand Munoth and Ms. Lakshika Mehta are given separately
 in the Corporate Governance Report.
 
 DECLARATION OF INDEPENDENT DIRECTORS:
 
 The independent Directors have confirmed and declared that they are not
 disqualified to act as an independent Director in compliance with the
 provisions of Section 149 of the Companies Act., 2013.
 
 ADEQUACY OF INTERNAL CONTROL, FINANCIAL CONTROLS WITH REFERENCE TO
 FINANCIAL STATEMENTS:
 
 The Company has in place adequate internal financial controls with
 reference to financial statements.  During the year under review, such
 controls were tested and no reportable material weakness in the design
 or operation were observed.
 
 STATUTORY AUDITORS:
 
 M/s Mardia & Associates, Chartered Accountants ,who are the statutory
 auditors of the Company, hold office until the conclusion of the
 ensuing AGM and are eligible for re-appointment. Members of the Company
 at the AGM held on 20th September, 2014 had approved the appointment of
 Mardia & Associates as the Statutory Auditors for a period of three
 financial years i.e., up to 31 March, 2017. As required by the
 provisions of the Companies Act, 2013, their appointment should be
 ratified by members each year at the AGM. Accordingly, requisite
 resolution forms part of the notice convening the AGM.
 
 SECRETARIALAUDIT REPORT:
 
 A Secretarial Audit was conducted during the year by the secretarial
 Auditor, Mr. V. Chandramowli, Practicing Company Secretary in
 accordance with provisions of section 204 of the Companies Act, 2013.
 The Secretarial Audit Report is attached as Annexure 4 and forms a part
 of the report of the Directors.
 
 COST AUDIT:
 
 Cost Audit is not applicable to the Company for the financial year
 2014-15.
 
 EXPLANATION / COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE
 REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY
 SECRETARY IN THEIR REPORTS.
 
 The comments made by the Auditors in their report have been duly
 explained in the attached Notes on Accounts. (Note No. 1(I))
 
 The Company, in order to comply with the requirement of Clause 49(II)
 (A) (1) of Listing Agreement , regarding appointment of woman director
 has sent an invitation letter to Ms. Lakshika Mehta to join the Board of
 Company on March 2, 2015. Ms. Lakshika Mehta has also sent a letter
 dated March 16, 2015 accepting the invitation to join the board. The
 Board in the meeting held on May 22, 2015 has appointed Ms. Lakshika
 Mehta as an additional Director in terms of Section 161 of the Companies
 act, 2013 in the category of Independent Director. Her appointment as
 independent director is placed before the Members for approval under
 Item 6 of the accompanying notice.
 
 SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:
 
 The Company does not have any Subsidiary or Joint venture Company. The
 Company, Munoth Neg Wind Farm(P) Ltd ceased to be associate during the
 financial year 2014-15. As per exception provided under Rule 6 of the
 Companies (Accounts) Rules, 2014 (Notification G.S.R. 723(E) dated
 14.10.2014).  a company having no subsidiaries but having only
 associate company(ies) and/or joint venture(s) is exempted from
 consolidation of financial statement in respect of associate
 company(ies) and/or joint venture(s) for the financial year commencing
 on or after 01.04.2014 and ending before 31.03.2015. The nil disclosure
 in Form No. AOC 1 is enclosed as Annexure 5.
 
 PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
 
 In line with the requirements of the Companies act, 2013 and equity
 listing agreement, the Company has formulated a policy on Related Party
 transactions which is also available on Company''s website at
 www.munothfinancial.com. The policy intends to ensure that proper
 reporting, approval and disclosure procedures are in place for all
 transactions between the Company and Related Parties.
 
 All Related Party transactions are placed before the Audit Committee
 for review and approval, Prior omnibus approval is obtained for Related
 Party transactions on a quarterly basis for transactions which are of
 repetitive nature and / or entered in the Ordinary Course of Business
 and are at Arm''s Length.
 
 There is no materially significant related party transactions which
 exceeds 10% of the consolidated turnover of the Company. The nil
 disclosure in Form No . AOC.2 is enclosed as Annexure 6
 
 PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURE:
 
 There are no persons employed in the Company during the year or for
 part of the year who were in receipt of remuneration in excess of the
 limits set out in Rules 5(2) and 5(3) of the Companies (Appointment and
 Remuneration of Managerial Personnel) Rules, 2014 read with in terms of
 provisions of Section 197(12) of the Companies Act, 2013.
 
 Disclosures pertaining to remuneration and other details as required
 under Section 197(12) of the Act read with Rule 5(1) of the Companies
 (Appointment and Remuneration of Managerial Personnel) rules, 2014 are
 provided in the Annual Report as Annexure 7
 
 In terms of Section 136 of the Act, the reports and accounts are being
 sent to the members and others entitled thereto, which is available for
 inspection by the members at the registered office of the company
 during business hours on working days of the company. If any member is
 interested in inspecting the same, such member may write to the Company
 in advance and the same will be furnished. The full annual report is
 also available on the Company''s website.
 
 VIGIL MECHANISM:
 
 The Vigil Mechanism of the Company, which also incorporates a whistle
 blower policy in terms of the Listing Agreement, includes an Ethics &
 Compliance Task Force comprising Senior Executives of the Company. The
 policy on vigil mechanism and whistle blower policy may be accessed on
 the company''s website www.munothfinancial.com
 
 CORPORATE GOVERNANCE:
 
 A report on Corporate Governance along with the Auditor''s Certificate
 regarding compliance of the conditions of Corporate Governance and also
 a Management Discussion and Analysis Report pursuant to Clause 49 of the
 Listing Agreement are annexed hereto. The Auditor''s have certified the
 Company''s Compliance of the requirements of Corporate Governance in
 terms of the Listing Agreement and the same is enclosed to the Corporate
 Governance Report.
 
 NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW:
 
 The Company has conducted 5 Board meetings during the financial year
 under review. The details regarding the Board Meetings, Audit Committee
 Meetings, Nomination and Remuneration Committee meeting etc., are given
 separately in the Corporate Governance Report .
 
 AUDIT COMMITTEE:
 
 The Audit Committee comprises of Independent Directors namely Mr. Ajit
 Kumbhat (Chairman) , Mr. M Jayantilal Jain and Mr. Mah Sau Cheong as
 Members. All the recommendations made by the Audit Committee were
 accepted by the Board
 
 STOCKEXCHANGES
 
 The Company''s shares are listed on The Stock Exchange, Mumbai.
 
 PREVENTION OF INSIDER TRADING:
 
 The Company has adopted a Code of Conduct as per the Guidelines issued
 by the Securities and Exchange Board of India for prevention of Insider
 Trading with a view to regulate trading in securities by the Directors
 and designated employees of the Company. The Board of Directors and the
 designated employees have confirmed compliance with the code.
 
 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.  Issue of equity shares with differential rights as to dividend,
 voting or otherwise
 
 2.  Issue of shares ( including sweat equity shares) to employees of
 the company and ESOS under any scheme
 
 3.  The company does not have any subsidiaries and hence the disclosure
 stating that the Managing Director / whole Time Director of the Company
 not receiving any remuneration or commission for subsidiary is not
 applicable.
 
 4.  No significant or material orders were passed by the Regulators or
 Courts or Tribunals which impact the going concern status and Company''s
 operations in future.
 
 5.  There were no cases filed pusuant to the Sexual Harassment of Women
 at Workplace ( Prevention, Prohibition and Redressal) Act, 2013.
 
 ACKNOWLEDGEMENTS:
 
 Your Directors would like to express their gratitude to the
 Shareholders, vendors, bankers and customers for their support and
 co-operation. They wish to thank all the employees of the Company for
 their sincere and dedicated services.
 
                            For and on behalf of the Board of Directors
 
 Chennai                                               LALCHAND MUNOTH
 May 22, 2015                                                 CHAIRMAN
 
 
 
Source : Dion Global Solutions Limited
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