To,

The Members,

Your Directors have pleasure in presenting their 20th Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2016.

1. FINANCIAL RESULTS:

Particulars (Standalone) (Amount in INR/lakhs)
2015-16 2014-15
Total Income 245.59 237.85
Total Expenditure 201.42 203.35
Profit before exceptional items and Tax 44.17 34.49
Less: Exceptional Items - -
Profit before Tax 44.17 34.49
Less: Provision for Tax 13.17 9.85
Profit after Tax 31.00 24.64

2. DIVIDEND:

Your directors have decided to deployed back the profits earned during the year and therefore not recommended any dividend for the current financial year.

3. RESERVES:

There are no amounts transferred to Reserves during the year under review except transfer of Rs. 6,20,008/- to Reserves Funds under Section 45IC of Reserve bank of India Act, 1934. Credit balance of Profit and Loss Account is transferred to "Reserves and Surplus" in Balance Sheet.

4. INFORMATION ON THE STATE OF COMPANY’S AFFAIR:

The Company during the year sanctioned and disbursed 230 auto rickshaws loans and 59 other secured loans against hypothecation of computers, equipment, machinery etc. totaling to a tune of Rs 888 lacs. During the year the company collected Rs 932 lacs by way of installments from hire purchase & loan accounts. The company maintained its Asset Financing ratio way above the required RBI norms of 60% of its total assets, hence continuing as NBFC AFC.

As on 31st March 2016 Company has repaid all Public Deposits with interest due thereon.

5. PERFORMANCE REVIEW:

The Company is engaged in the business of Hire-purchase finance. The net receipts from Operations during the year under review were Rs. 245.59 lacs as against Rs. 237.80 lacs in the previous year. The Profit after tax is Rs. 31 lacs as against Rs.24.64 lacs in the previous year.

6. SNAPSHOT OF PERFORMANCE:

(Amount in INR/lakhs)
Particulars 2015-2016 2014-2015
Deposits and interest payable - 147
Corporate Deposits 48.73 52.73
Asset Financing and interest receivable 1618.22 1611.50

Your Company has consolidated its Deposits and Asset financing base during the year. The Total Income has gone up from Rs. 2,37,84,695/- in the last year to Rs. 2,45,59,223/- during the year under review.

Gross and Net Non-Performing Advances have been Rs. 90.91 lacs and Rs. 60.20 lacs in FY 2015-16. In percentage terms Gross NPAs are now at 4.54 % and Net NPAs are at 3.03 % of total assets. Provision for NPA has been done in accordance to the norm.

7. APPROPRIATIONS:

Appropriations from the net profit after the write offs, write backs and provisioning have been affected as under:

Appropriations (Amount in INR/lakhs)
Provision for Income tax 13.17
Preference Share dividend and Dividend Distribution tax 23.68
Tax Balances written off 0.12
Transfer to Reserves Fund 45IC 6.20

8. MATERIAL CHANGES AND COMMITMENTS BETWEEN END OF FINANCIAL YEAR AND DATE OF REPORT:

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate on the date of this report.

9. DIRECTORS’ RESPONSIBILITY STATEMENT:

As per the clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, the Directors’ 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, 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.

10. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

The Company does not have any subsidiary, joint ventures and associate company.

11. SHARE CAPITAL:

The Paid-up Share Capital as on March 31, 2016 was Rs. 8,16,10,830/- comprising 46,70,583 Equity Shares of Rs. 10/- each and 34,90,500 7% CCR Preference Shares of Rs.10/- each.

During the year under review, the Company raised funds through issue and allotment of 1,76,383 equity shares of Rs. 10/- each at par and 4,90,500; 7% CCR Preference Shares of Rs.10/- each at par. These Equity Shares ranks pari-passu in all respect with the existing Equity Shares of the Company.

12. CAPITAL ADEQUACY RATIO:

Your Company’s total Capital fund to Risk weigh Assets Ratio (CRAR) as on March 31, 2015 stood at 55.37%. (Minimum required by RBI norms 15%).

13. NETWORTH:

Net worth of Company as at March 31, 2016 was Rs. 999.54 lacs comprising of Equity Shares, Preference Shares, Reserves and Share Premium.

14. DEPOSITS:

The average cost of deposits was 11 % pa. The Company maintained the limit of acceptance of deposit to 1.5 times of its Net owned funds as per the norms. It has stopped accepting public deposits since December 2011.

15. ASSET FINANCING:

The average yield on Advances was 16.5 % pa. The Company was always above the required minimum norm of Asset financing of 60% of Total Assets.

16. INVESMENTS:

The Company had an Investment portfolio of Rs. 68 lacs as on 31.03.2016 which was invested in Bonds of Government of India out of which SLR was maintained at 15% of its Public Deposits.

17. KNOW YOUR CUSTOMER (KYC/ANTI-MONEY LAUNDERING (AML) MEASURES:

The Company has been implementing KYC/AML policy as approved by the Board of Directors in accordance with the PMLA 2002 (Prevention of Money Laundering Act 2002) and RBI/IBA (Reserve Bank of India/Indian Bank’s Association) guidelines.

18. HUMAN RESOURCES: KEY COMPETITIVE ADVANTAGE:

The Company strongly believes that in a service industry like Banking and finance, it is only through people and their contributions that most of the objectives like offering products to various customer groups and servicing the poor can be achieved. Your Company believes in spreading the risk, and financing self-generating assets like Auto rickshaws, taxis, machineries, equipments etc.

The Management has a healthy relationship with the officers and the Employee.

19. RISK MANAGEMENT POLICY:

The Company has adopted a Risk Management Policy duly approved by the Board and is overseen by the Audit Committee of the Company on a continuous basis to identify, assess, monitor and mitigate various risks to key business objectives.

20. ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

21. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

As required by Regulation 34(2)(e) of SEBI (LODR) Regulations, 2015, the Management Discussion and Analysis Report, which forms part of this Annual Report.

22. PREVENTION OF SEXUAL HARASSMENT POLICY:

The Company has in place a Prevention of Sexual Harassment policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee has been set up headed by Ms. Anjum Syed to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the year 2015-2016, no complaints were received by the Company related to sexual harassment.

24. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Mr. Hozef Darukhanawala, Managing Director of your Company was re-appointed for a period of 3 (three) years commencing from October 01, 2013 to September 30, 2016 by the shareholders of the Company at 18th AGM of your Company held on September 30, 2014. The Board has approved his re appointment for further period of 3 years. The members approval for the said reappointment is being sought in this AGM.

Further, in compliance with the provisions of Sections 149, 152, Schedule IV and other applicable provisions, if any of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014, Mr. Nathmal Gokuldas Lohia (DIN 00177112) and Ms. Sadhana Pai (DIN 00177146) were appointed as Independent Directors on the Board of Directors of your Company at 18th AGM of your Company held on September 30, 2014 to hold office upto 5 (five) consecutive years.

Ms. Tasneem Lakdawala was appointed as Chief Financial Officer of the Company w.e.f. March 20, 2015.

Mrs. Duraiya Hozef Darukhanawala (DIN: 00177073), Non-Executive Director is liable to retire by rotation at the ensuing Annual General Meeting and, being eligible she has offered herself for re-appointment. Your Board has recommended her re-appointment.

25. DECLARATION OF INDEPENDENT DIRECTORS:

The Company has received declarations from all Independent Directors as required under section 149(7) that they meet the criteria of independence as laid down under Section 149(6) of the Act.

26. EVALUATION OF BOARD’S PERFORMANCE:

Pursuant to the provisions of the Companies Act, 2013 the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Committees.

27. BOARD AND BOARD COMMITTEES:

During the year under review, the Board met seven times on May 23, 2015; May 30, 2015; July 06, 2015; August 26, 2015; November 10, 2015; January 30, 2016 And February 12, 2016. The Board has constituted following three Committees:

a. Audit Committee:

Audit Committee comprises of two Independent Directors and one Executive Director. Mr. Nathmal Lohia is the Chairman of Audit Committee and Dr. Sadhana Pai and Mr. Hozef Darukhanawala are the other members of the Committee. During the year under review the Audit Committee met 5 times and all the members have attended the said meetings.

b. Nomination and Remuneration Committee:

Nomination and Remuneration Committee comprises of three non-executive directors. Dr. Sadhana Pai is the Chairperson of the said Committee and Mr. Nathmal Lohia and Mrs. Duraiya Darukhanawala are the other members of the Committee. During the year under review the committee met 3 times and all the members have attended the said meetings.

c. Stakeholders Relationship Committee:

Stakeholder Relationship Committee comprises of two non-executive Independent directors. Said committee was chaired by Dr. Sadhana Pai and Mr. Nathmal Lohia and Mr. Hozef Darukhanawala are the other members of the Committee. The committee met 2 times during the year under review.

28. MANAGERIAL REMUNERATION:

Disclosures of the ratio of the remuneration of each director to the median employee’s remuneration and other details as required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided as "Annexure A".

The details of remuneration paid to the Managing Director of the Company are given in Form MGT-9 forming part of the Directors Report.

29. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186:

The Company is registered Non-Banking Financial Company (NBFC) and therefore the provisions related to loans and investments u/s 186 are not applicable.

30. CORPORATE SOCIAL RESPONSIBILITY (CSR):

The Company is not required to develop and implement any Corporate Social Responsibility initiatives as the said provisions are not applicable.

31. RELATED PARTY TRANSACTIONS:

During the financial year 2015-16, your Company has not executed any transactions with related parties as defined under Section 2(76) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, 2014. During the financial year 2015-16, there were no transactions with related parties which qualify as material transactions under the Listing Regulations.

Your Company has framed a Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board.

32. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS 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.

33. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO:

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, are as below:

• Energy Conservation: Company working in such business segment which does not require it to take steps for energy conservation.

• Technology Absorption: company working in such business segment which does not require to take steps for Technology Absorption.

• Foreign Exchange Earnings and Outgo: During the period under review there was no foreign exchange earnings or out flow.

34. STATUTORY AUDITORS:

The Statutory Auditors M/s. Meena N. Shetty & Co., Chartered Accountants, Mumbai, having Firm Registration No. 106130W holds office until the conclusion of the ensuing Annual General Meeting and is eligible for reappointment.

Your Company has received confirmation from the Auditors to the effect that their appointment, if made, will be in accordance with the limits specified under the Companies Act, 2013 and the firm satisfies the criteria specified in Section 141 of the Companies Act, 2013 read with Rule 4 of Companies (Audit & Auditors) Rules 2014. Your Board is of the opinion that continuation of M/s. Meena N. Shetty & Co., Statutory Auditors during FY 2016-17 will be in the best interests of the Company and therefore Members are requested to consider their re-appointment as Statutory Auditors of the Company from the conclusion of ensuing Annual General Meeting till the conclusion of the Twenty first AGM of the Company to be held in the year 2017 at remuneration as may be decided by the Board.

35. AUDITORS’ OBSERVATION & REPORT:

The observation made in the Auditors Report read together with relevant notes thereon are self-explanatory and hence do not call for any further comments under Section 134 of the Companies Act, 2013.

36. SECRETARIAL AUDIT:

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors has appointed M/s. Komal Deshmukh & Associates, Practicing Company Secretaries for conducting Secretarial Audit of the Company for the financial year 2015-2016.

The Secretarial Audit Report is annexed herewith as "Annexure B".

Board’s Reply of the comments in the Secretarial Audit Report:

The Company has not appointed internal auditor for the financial year under review. The Company will finalize the said appointment in the current financial year 2016-2017.
The website of the Company is not updated. The website does not have details of financial data, policies as required under Clause 33, 34 and 43 of the SME Listing Agreements. The Company is in process of updating the website and will update the details as required under SME Listing Agreements.
The Composition of the Board is not in consonance with Sec 152 (6) & (7) of the Companies Act, 2013. The Board has taken on record observation made by Secretarial Auditor and will take the necessary action.
Company does not have Company Secretary The Company is looking for proper candidature for filling up the position of Company Secretary

37. EXTRACT OF THE ANNUAL RETURN:

The details forming part of the extract of the Annual Return in Form MGT- 9 in accordance with Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, are set out herewith as "Annexure C" to this Report.

38. ACKNOWLEDGEMENTS:

The Board of Directors wish to acknowledge the continued support and co-operation extended by the Securities and Exchange Board of India, Reserve Bank of India, Stock Exchanges, Ministry of Corporate Affairs, Forward Markets Commission, other government authorities, Bankers, material suppliers, customers and other stakeholders for their support and guidance.

Your Directors would also like to take this opportunity to express their appreciation for the dedicated efforts of the employees of the Company at all the levels.

The Board is also indebted to the RBI, and other regulatory authorities, various financial institutions, Banks for their valuable support and guidance to the company from time to time.

On behalf of Board of Directors of
Money Masters Leasing & Finance Limited
Sd/-
Place: Mumbai Hozef Darukhanawala
Date: May 27, 2016 Managing Director

Annexure A to Board’s Report

Information required under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

A. Ratio of remuneration of each Director to the median remuneration of all the employees of your Company for the Financial year 2015-16 is as follows:

Name of Director Total Remuneration (Rs.) Ratio of remuneration of director to the median remuneration
Mr. Hozef Darukhanawala 15,00,000 11.57:1

Notes:

1. The aforesaid details are calculated on the basis of remuneration for the financial year 2015-16.

B. Details of percentage increase in the remuneration of each Director and CFO & Company Secretary in the financial year 2015-16 are as follows:

Name Designation Remuneration (Rs.) Increase
2015-2016 2014-2015 %
Mr. Hoze fDarukhanawala Managing Director 1500000 1276000 +(17.55)
Ms. Minakshi Muchhal Company Secretary *2,10,000 2,50,000 -
#Ms. TasneemLakdawala Chief Financial Officer 3,30,000 - -

*CS has resigned w.e.f. 30/01/2016

# Appointed during the year

• Notes:

1. The remuneration to Directors is within the overall limits approved by the shareholders.

C. Percentage increase in the median remuneration of all employees in the financial year 2015-16:

The median remuneration of the employees in the financial year was increased by 5.78%.

D. Number of employees on the rolls of the Company as on March 31, 2015:

2015-2016 2014-2015
Employees *13 8

* including employees resigned during the year.

E. Explanation on the relationship between average increase in remuneration and Company Performance:

The company’s gross revenue increased by Rs.7.74 lacs, and PAT increased by Rs 6.36 lacs, hence the increase in the remuneration was in line with the progress of the company. The company also recognizes individual performance and contribution to the company by the employees. By substantial increase in the remuneration it commits to healthy work environment and also supports external factors like, increase in the cost of living and inflation.

Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company.

Remuneration of the Key Managerial Personnel includes Managing Director and Company Secretary. The remuneration of Company Secretary is as per industry norm. With respect to MD’s remuneration, since he looks after the company’s operation in total and with an experience of more than 35 years into Banking & Finance MD is being remunerated much lower to the industry norms..

F. Details of Share price and market capitalization:

The details of variation in the market capitalization and price earnings ratio as at the closing date of the current and previous financial years are as follows:

As on March 31, 2016 As on March 31, 2015 Increase / (Decrease) in %
Price Earnings Ratio 3.82 10.89 -(65)%
Market Capitalization (in lacs) 309.19 342.46 -(9.72)%

Comparison of share price at the time of first public offer and market price of the share of 31st March, 2016:

Market price as on 31st March , 2016 6.62
Market price as on 31st March , 2015 7.62
% increase of Market price over the price at the time of initial public offer (13.12)%

Note:

1. Closing share price on Bombay Stock Exchange of India Limited (BSE) has been used for the above tables.

G. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration;

The increase in salaries of the employees was higher by 8.9% in comparing the increase in percentile of the salaries of KMP.

H. Comparison of the each remuneration of the Key Managerial Personnel against the performance of the company

As stated above in point no. A and F.

I. The key parameters for any variable component of remuneration availed by the directors;

There is no variable component included in the remuneration of the director.

J. There are no employees of the Company who receive remuneration in excess of the highest paid Director of the Company.

K. Affirmation:

Pursuant to Rule 5(1)(xii) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, it is affirmed that the remuneration paid to the Directors, Key Managerial Personnel and senior management is as per the Remuneration decided by Nomination and Remuneration Committee of your Company.