Motilal Oswal Financial Services Ltd
Directors Reports
Dear Members,
The Directors of your Company have the pleasure in presenting the
Seventeenth Board's Report together with the Audited Financial Statements for the
Financial Year ended March 31, 2022.
FINANCIAL RESULTS
The summary of the Company's financial performance, both on a
consolidated and standalone basis, for the Financial Year ("FY") 2021-22 as
compared to the previous FY 2020-21 is given below:
(Rs in Lakhs)
| Particulars |
Consolidated |
Standalone |
|
2021-22 |
2020-21 |
2021-22 |
2020-21 |
| Total Revenue |
4,31,983 |
3,63,412 |
2,61,144 |
2,22,462 |
| Profit before Interest, Depreciation,
Taxation and exceptional items |
2,14,226 |
2,02,431 |
1,06,848 |
1,12,822 |
| Interest |
47,819 |
43,028 |
16,558 |
12,770 |
| Depreciation |
4,826 |
4,752 |
3,876 |
3,676 |
| Profit before Taxation and exceptional
items |
1,61,581 |
1,54,652 |
86,413 |
96,436 |
| Add/(Less): Exceptional Items |
- |
(8,810) |
- |
(8,810) |
| Profit before taxation |
1,61,581 |
1,45,842 |
86,413 |
87,626 |
| Add/(Less) : Provision for Taxation |
|
|
|
|
| Current Tax |
23,588 |
15,849 |
14,807 |
8,985 |
| Deferred Tax |
7,109 |
10,914 |
1,123 |
3,832 |
| Less : Tax for earlier year (s) |
(189) |
(1,217) |
(199) |
(258) |
| Tax Expenses |
30,508 |
25,546 |
15,731 |
12,559 |
| Profit after Taxation from Continuing
Operations |
1,31,073 |
1,20,296 |
70,682 |
75,066 |
| Share of Profit from Associates and Joint
Ventures (net of taxes) |
172 |
6,177 |
- |
- |
| Profit for the Period |
1,31,245 |
1,26,473 |
70,682 |
75,066 |
| Add/Less: Other Comprehensive Income (OCI) |
|
|
|
|
| Acturial gain/(loss) |
176 |
311 |
(27) |
163 |
| Fair value gain/(loss) of investment held through
FVOCI |
4,488 |
32,706 |
2,324 |
27,411 |
| Tax on OCI |
558 |
3,825 |
(259) |
(3,177) |
| Total Comprehensive Income |
1,35,351 |
1,55,665 |
72,720 |
99,464 |
| Net profit attributable to: |
|
|
|
|
| Owners of parent |
1,35,081 |
1,55,233 |
- |
- |
| Non-controlling interests |
269 |
431 |
- |
- |
| Add: Balance brought forward from previous
year |
3,65,525 |
2,15,349 |
2,52,746 |
1,87,606 |
| Profit Available for appropriation |
1,35,087 |
1,54,252 |
70,682 |
75,066 |
| Less: Appropriations |
(11,636) |
(4,075) |
- |
- |
| Transfer to Statutory Reserve |
(2,729) |
(659) |
- |
- |
| Transfer to Capital redemption Reserve |
- |
- |
- |
- |
| Interim Dividend and Final Dividend |
(8,673) |
(2,894) |
(7,365) |
(3,081) |
| Tax on Buyback |
- |
(2,820) |
- |
(2,820) |
| Significant changes due to business
combination |
- |
- |
(9,277) |
(4,025) |
| Dividend Distribution Tax |
- |
- |
- |
- |
| Expected Credit Loss Impairment reserve |
- |
- |
- |
- |
| Transfer to General Reserve |
- |
- |
- |
|
| Transfer to Minority interest |
(137) |
(67) |
- |
- |
| Balance of Profit carried forward |
4,88,977 |
3,65,526 |
3,06,787 |
2,52,746 |
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FINANCIAL PERFORMANCE Standalone
The standalone revenues in FY 2021-22 stood at Rs2,61,144 Lakhs vs
Rs2,22,462 Lakhs in FY 2020-21. Total expenses (excluding interest and depreciation) for
the year came in at Rs1,54,297 Lakhs which increased by 41% over previous year. People
cost increased by 37% YoY to Rs52,888 Lakhs. Operating expenses increased by 44% YoY to
Rs75,461 Lakhs. The profit before depreciation, interest and taxation (EBITDA) stood at
Rs1,06,847 Lakhs. Reported net profit for the year came in at Rs 70,682 Lakhs.
Consolidated
The consolidated revenues for the year were Rs 4,31,983 Lakhs for the
year under review, an increase of 19% as compared to the previous year.
The average daily traded volumes (ADTO) for the equity markets during
FY 2021-22 stood at Rs69.5 Lakh Crores, up 161% YoY from Rs26.7 Lakh Crores in FY 2020-21.
The overall Cash market ADTO reported growth of 12% YoY at Rs 72,443 Crores in FY 2021-22.
Within derivatives, futures volume increased 9% YoY to Rs 1.2 Lakh Crores while options
rose 171% YoY to Rs 67.6 Lakh Crores. Amongst cash market participants, retail constituted
51% of total cash volume, institution 20% and prop 28%. The proportion of DII in the cash
market was 8%. In FY 2021-22, a record of 3.5 Crores new demat accounts were added as
against 1.4 Crores in FY 2020-21. The number of demat accounts stood at 8.97 Crores in FY
2021-22, a growth of 63% YoY.
Key Highlights
- Capital market business (Broking + IB) income grew 48% YoY to Rs
2,537 Crores.
- The Company had 28.5 Lakhs retail broking and distribution clients
growing at a CAGR of 28% from FY 2017-18 to FY 2021-22. Client acquisition stood at 8.8
Lakhs during the year, up 43% YoY.
- Our financial product distribution AUM was Rs16,764 Crores as of
March 2022, up 31% YoY.
- Investment banking business made a strong turnaround in business with
13 deals completed in FY 2021-22. The team have a rich pipeline and continues to engage on
a wide cross-section of mandated transactions across capital markets and advisory.
- Asset management income increased by 17% YoY to Rs622 Crores, as
compared to last year. Total assets under management across mutual funds, PMS and AIF was
Rs49,020 Crores, up 13% YoY. Within this, the mutual fund AUM was up 18% YoY to Rs30,600
Crores, while Alternates AUM (PMS and AIF) stood at Rs18,177 Crores.
- The private equity income stood at Rs254 Crores, up 154% YoY. The
income from wealth management business stood at Rs194 Crores, up 53% YoY. The wealth
management AUM for FY 2021-22 was at Rs34,389 Crores, up 36% YoY.
- Housing finance related gross income of Rs528 Crores, down 3% YoY.
HFC loan book was Rs3,485 Crores, as of March 2022. Disbursements stood at Rs643 Crores,
up 136% YoY.
In line with the long term strategy to grow RoE sustainably, Motilal
Oswal Financial Services Limited (MOFSL) had made strategic allocation of capital to long
term RoE enhancing opportunities like Motilal Oswal Home Finance Limited, and sponsor
commitments to our mutual fund and private equity funds. As of March 2022, our total
quoted equity investments stood at Rs2,676 Crores.
Total expenses (excluding interest and depreciation) for the year at
Rs2,17,757 Lakhs registered an increase of 35% over previous year. Profit before
depreciation, interest and taxation (EBITDA) stood at Rs2,14,226 Lakhs, an increase of 6%
from the previous year. Profit for the year increased by 9% to Rs1,31,073 Lakhs.
The detailed results of operations of the Company are given in the
Management Discussion & Analysis forming part of this Report.
FUTURE OUTLOOK
Our strategy to diversify our business model towards more annuity
sources of earnings continues to deliver positive results. The annuity nature of earnings
in the businesses like asset based businesses and housing finance business has brought in
visibility of our earnings. Our businesses have delivered strong and sustainable
performance in FY2022. Our brand is now being recognized across each of our businesses.
Each of our business segments offers huge headroom for growth and we are well placed to
benefit from this.
CONSOLIDATED FINANCIAL STATEMENT
As per Regulation 33 of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 ("Listing Regulations") and applicable
provisions of the Companies Act, 2013 ("the Act") read with the Rules made
thereunder (as amended from time to time), the Consolidated Financial Statement of the
Company for the FY 2021-22 have been prepared in compliance with applicable Indian
Accounting Standards and on the basis of Audited Financial Statement of the Company and
its subsidiaries, as approved by the respective Board of Directors ("Board").
The Consolidated Financial Statement together with the Auditors' Report
is forming part of this Annual Report.
MOFSL "HIGHEST EVER" OR "LARGEST EVER"
The diversified business model of the Group has led to the largest ever
profitability in the FY 2021-22. The key highlights for FY 2021-22 are as follows:>
Highest ever Annual Revenue and Profit
> Highest ever AMC, Distribution, Wealth and DP AUM
> Highest ever Fund Raise by PE & RE
> Highest ever AMC and Wealth Business Annual Profit
> Highest ever Broking ADTO & Revenue
> Highest ever New Client Acquisition in Broking
> Highest ever NIM led by lowest ever CoF for Home Finance
ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG) INITIATIVES
Since your Company strongly believes in raising corporate transparency,
strengthening risk management, promoting stakeholder engagement, improving communications
with Stakeholders, your Company has undertaken various Environment, Social and (Corporate)
Governance (ESG) initiatives during FY 2021-22. The separate disclosure on ESG initiatives
and contribution by the Company in battling against COVID-19 is forming part of this
Annual Report.
INFORMATION ON THE STATE OF AFFAIRS OF THE COMPANY
The Information on the affairs of the Company has been given in
Management Discussion & Analysis Report forming part of this Annual Report.
CORPORATE RESTRUCTURING OF GROUP ENTITIES
In order to consolidate the fund management business of the Group,
demonstrating the Promoter Group's direct commitment etc., the Board of Directors (the
"Board") of the Company on December 24, 2020 and members of the Company on
December 16, 2021, considered and approved the Scheme of Arrangement between Passionate
Investment Management Private Limited ("PIMPL' or "the Transferor Company
1") and MOPE Investment Advisors Private Limited ("MOPE" or "the
Transferee Company 2" or "the Demerged Company 1" or "the Transferor
Company 3") and Motilal Oswal Real Estate Investment Advisors Private Limited
("MORE" or "the Transferor Company 2") and Motilal Oswal Real Estate
Investment Advisors II Private Limited ("MORE II" or "the Demerged Company
2" or "the Transferor Company 4") and MO Alternate Investment Advisors
Private Limited (erstwhile Motilal Oswal Fincap Private Limited) ("MO Alternate"
or "the Resulting Company") and Motilal Oswal Financial Services Limited
("MOFSL' or "the Transferee Company 1" or "the Holding Company of the
Resulting Company" or "the Company") and their respective shareholders
("the Scheme") under Sections 230-232 of the Act involving the following:-
i. Amalgamation of Passionate Investment Management Private Limited
with Motilal Oswal Financial Services Limited and consequent issue of equity shares by
Motilal Oswal Financial Services Limited;
ii. Amalgamation of Motilal Oswal Real Estate Investment Advisors
Private Limited with MOPE Investment Advisors Private Limited;
iii. Post the amalgamation as stated in clause (ii) above, demerger of
the Fund Management Undertaking (defined as Fund Management Undertaking 1 in the Scheme)
of MOPE Investment Advisors Private Limited into MO Alternate Investment Advisors Private
Limited and consequent issue of equity shares by Motilal Oswal Financial Services Limited
to the shareholders of MOPE Investment Advisors Private Limited;
iv. Post the demerger as stated in clause (iii) above, amalgamation of
MOPE Investment Advisors Private Limited with Motilal Oswal Financial Services Limited and
consequent issue of equity shares by Motilal Oswal Financial Services Limited;
v. Post the amalgamation as stated in clause (iv) above, demerger of
the Fund Management Undertaking (defined as Fund Management Undertaking 2 in the Scheme)
of Motilal Oswal Real Estate Investment Advisors II Private Limited into MO Alternate
Investment Advisors Private Limited and consequent issue of equity shares by Motilal Oswal
Financial Services Limited to the shareholders of Motilal Oswal Real Estate Investment
Advisors II Private Limited;
vi. Post the demerger as stated in clause (v) above, amalgamation of
Motilal Oswal Real Estate Investment Advisors II Private Limited with Motilal Oswal
Financial Services Limited and consequent issue of equity shares by Motilal Oswal
Financial Services Limited;
vii. Various other matters consequential or otherwise integrally
connected herewith.
After obtaining all the statutory and regulatory approvals including No
Objection Certificate from Stock Exchanges, your Company had filed an application with
Hon'ble National Company Law Tribunal, Mumbai Bench ("NCLT") to said effect.
The Hon'ble NCLT vide its Order dated March 11, 2022 has approved the
Scheme of Arrangement between Group Entities. Further, the Scheme was made effective from
March 30, 2022. The appointed date was April 1,2020.
Theaforesaidrestructuringwillnotleadtoanychangeincontrolandthebriefpresentationexplainingtheentirearrangement
and copy of the Hon'ble NCLT order is uploaded on the website of the Company at
www.motilaloswalgroup.com.
MATERIAL CHANGES AND COMMITMENTS, AFFECTING THE FINANCIAL POSITION OF
THE COMPANY
Pursuant to the Corporate Restructuring of Group Entities under the
Scheme of Arrangement which was made effective from March 30, 2022, the updated/revised
Standalone Financial Statements (Amalgamated) of the Company as on March 31, 2021 have
been approved by the Audit Committee and Board at their respective Meeting held on March
30, 2022 for the limited purpose of filing return with Tax Authorities.
Except as stated above, there have been no other material changes and
commitments, affecting the financial position of the Company, which have occurred between
the end of the financial year of the Company and the date of this Report.
DIVIDEND
In terms of Regulation 43A of Listing Regulations, the Board of
Directors of the Company has approved the Dividend Distribution Policy
("Policy") in line with the requirements of the Listing Regulations and it is
available on the website of the Company and can be accessed at
https://www.motilaloswalgroup.com/Downloads/IR/206776066708.-
Dividend-Distribution-Policy.pdf.
During the year under review, the Board of Directors of the Company,
based on the parameters laid down in the Dividend Distribution Policy, at its meeting held
on January 27, 2022 had declared and paid an Interim Dividend of f7/- per Equity Share for
the FY 2021-22, out of the profits of the Company for the third quarter and nine months
ended December 31,2021, on 14,71,76,074 Equity Shares having face value of Rs1/- each,
aggregating to Rs103,02,32,518/-.
Further, the Board of Directors of the Company at its meeting held on
April 28, 2022 have recommended a Final Dividend of Rs3/- per Equity Share having face
value of Rs1/- each for FY 2021-22, subject to approval of the Members of the Company at
the ensuing Annual General Meeting ("AGM").
The Final Dividend, if approved at the ensuing AGM, would be paid to
those Members whose name appears in the Register of Members / Beneficial Holders as on
July 4, 2022.
TRANSFER TO RESERVES
The Board of your Company decided not to transfer any amount to the
General Reserve and retain the entire amount of profit under Retained Earnings.
Further, pursuant to the Corporate Restructuring of Group Entities
under Scheme of Arrangement which was made effective from March 30, 2022, the Statutory
Reserve of Passionate Investment Management Private Limited ("PIMPL' or Transferor
Company 1) of Rs5,232.75 Lakhs was transferred to General Reserve of the Company.
CREDIT RATING
During the year under review, the Credit Rating agencies have
reaffirmed/ assigned the below credit ratings:
| Rating Agency |
Instrument Type |
Size of Issue (fin Crore) |
Rating/Outlook |
Rating Action |
| ICRA Limited |
Commercial Papers |
1,500 |
[ICRA]A1 |
Assigned |
|
|
1,000 |
[ICRA]A1 + |
Reaffirmed |
|
Long-term Principal Protected Market Linked Debentures |
100 |
PP-MLD[ICRA]AA (Stable) |
Reaffirmed |
|
Non-Convertible Debentures |
300 |
[ICRA]AA (Stable) |
Reaffirmed |
|
Bank Lines - Unallocated |
300 |
[ICRA]AA (Stable) |
Reaffirmed |
| India Rating & Research Private |
Commercial Papers |
250 |
IND A1 + |
Assigned |
| Limited |
|
2,250 |
IND A1 + |
Affirmed |
|
Non-Convertible Debentures |
300 |
IND AA/Stable |
Affirmed |
|
Principal Protected Market- Linked Debentures |
300 |
INDPP-MLD AAemr/Stable |
Affirmed |
| CRISIL Limited |
Commercial Papers |
1,750 |
CRISIL A1 + |
Reaffirmed |
The above ratings indicate a very strong degree of safety regarding
timely servicing of financial obligations.
SHARE CAPITAL
During the year under review, the Company has allotted 5,74,100 Equity
Shares having face value of Rs1/- each to eligible employees upon exercise of the vested
options granted to the said employees under various Employee Stock Option Schemes of the
Company.
Further, pursuant to Corporate Restructuring of Group Entities under
Scheme of Arrangement, the Company has allotted 8,82,42,508 Equity Shares to the
shareholders of Transferor Companies i.e. Passionate Investment Management Private Limited
("PIMPL'), MOPE Investment Advisors Private Limited ("MOPE") and Motilal
Oswal Real Estate Investment Advisors II Private Limited ("MORE II") as per the
treatment provided in the Scheme. This includes cancellation of 8,63,74,063 Equity Shares
held by PIMPL against issue of equal number of new Equity Shares of the Company to the
shareholders of PIMPL and issue of 18,68,445 new Equity Shares of the Company to the
shareholders of MOPE & MORE II.
Consequently, the paid up Share Capital of the Company as at March 31,
2022 stood at Rs14,90,62,919/- (Rupees Fourteen Crore Ninety Lakhs Sixty Two Thousand Nine
Hundred Nineteen only) equity shares having face value of Rs1/- each.
The Authorised Share Capital of the Company as on March 31,2021 was
Rs149,00,00,000/- divided into 92,50,00,000 Equity Shares of Rs1/- each and 56,50,000
Preference Shares of Rs100/- each. Pursuant to the Order dated March 11, 2022 passed by
the Hon'ble NCLT approving the Scheme of Arrangement, the Authorized Share Capital of the
Company stands increased to Rs1,74,00,00,000/- divided into 1,12,00,00,000 Equity Shares
of Rs1/- each aggregating to Rs1,12,00,00,000/- and 62,00,000 Preference Shares of Rs100/-
each aggregating to Rs62,00,00,000/- .
EMPLOYEE STOCK OPTION SCHEMES
The disclosures required to be made under the SEBI (Share Based
Employee Benefits) Regulations, 2014 ("ESOP Regulations") (as amended from time
to time), are available on the website of the Company at www.motilaloswalgroup.com.
Further, the Company confirms that all the Employee Stock Options
Schemes of the Company are falling under direct route and not trust route and accordingly
the provisions related to trust route as specified in the ESOP Regulations are not
applicable to the Company. Further, all the permanent employees (except the persons as
mentioned in the regulations) of the Company, its holding company and its subsidiary
companies are entitled to participate in said schemes of the Company. Further, the Company
confirms that it has not granted employee stock options equal to or exceeding one percent
of the issued capital of the Company at the time of grant of stock options to any
employees of the Company/Holding Company/Subsidiary Company.
The Secretarial Auditor of the Company, M/s. U. Hegde and Associates,
have certified that the Company's above- mentioned Schemes have been implemented in
accordance with the ESOP Regulations and the Resolutions passed by the Members for the
respective Schemes.
The Employee Stock Option Schemes are administered by the Nomination
and Remuneration Committee of the Board of the Company, in accordance with the applicable
ESOP Regulations.
DEBENTURES
During the year under review, the Company has issued and allotted 780
Non-Convertible Debentures ("NCDs") of Rs10 Lakhs each aggregating to Rs7800
Lakhs. Accordingly, 3,780 NCDs of Rs10 Lakhs each aggregating to Rs37,800 Lakhs are
outstanding as on March 31,2022.
The Company has been servicing payment of the interest on the due
dates.
The details of the Debenture Trustee of the Company is as under:
Beacon Trusteeship Limited
4C & D, Siddhivinayak Chambers, Gandhi Nagar, Opp. MIG Cricket
Club, Bandra (East), Mumbai 400 051, Tel: +91 (0)22 2655 8759, +91 955 544 9955 Website:
www.beacontrustee.co.in
DEPOSITS
During the year under review, the Company has not accepted or renewed
any amount falling within the purview of provisions of Section 73 of the Act read with the
Companies (Acceptance of Deposits) Rules, 2014 (as amended).
The particulars of loans/advances, etc., required to be disclosed in
the Annual Accounts of the Company pursuant to Para A of Schedule V of the Listing
Regulations are furnished in the Notes to Accounts annexed to Standalone Financial
Statements which forms part of this Annual Report.
ANNUAL RETURN
Pursuant to the provisions of Section 134(3) and 92(3) of the Act read
with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual
Return of the Company for the financial year ended March 31, 2022 is uploaded on website
of the Company at https://www.motilaloswalgroup.com/Investor-Relations/Financial-Report/
Financial-Statement-of-Subsidiaries
SUBSIDIARY COMPANIES
The Company along with its subsidiaries, offers a diversified range of
financial products and services such as Loan against Securities, Investment Activities,
Private Wealth Management, Broking and Distribution, Asset Management Business, Housing
Finance, Institutional Equities, Private Equity and Investment Banking.
As of March 31, 2022, the Company had 17 subsidiaries (including step
down subsidiaries). Pursuant to Corporate Restructuring of Group Entities under the Scheme
of Arrangement becoming effective from March 30, 2022, MOPE Investment Advisors Private
Limited, Motilal Oswal Real Estate Investment Advisors Private Limited and Motilal Oswal
Real Estate Investment Advisors II Private Limited were amalgamated and ceased to be
subsidiaries of the Company. There are no associate companies or joint venture within the
meaning of Section 2(6) of the Act as on March 31,2022.
Further, pursuant to the provisions of Section 136(1) of the Act, the
financial statement for the period ended March 31, 2022 of each subsidiary of the Company
is available on the website of the Company at www.motilaloswalgroup.com.
Material Subsidiaries
As required under Regulation 16(1)(c) and 46 of the Listing
Regulations, the Board of Directors has approved the Policy on Determination of Material
Subsidiaries ("Policy"). The said policy is available on the website of the
Company and can be accessed at
https://www.motilaloswalgroup.com/Downloads/IR/212618793Policy-on-Determination-
of-Material-Subsidiaries.pdf Accordingly, Motilal Oswal Home Finance Limited
("MOHFL'), Motilal Oswal Asset Management Company Limited ("MOAMC") and
Motilal Oswal Finvest Limited ("MOFL') are material subsidiaries of the Company.
Investment in Subsidiaries
During the year under review, the Company has acquired:
• 172,65,446 equity shares having face value of Rs10/- each of
Motilal Oswal Finvest Limited (Wholly Owned Subsidiary);
• 30,00,000 equity shares having face value of Rs10/- each of
Glide Tech Investment Advisory Private Limited (Wholly Owned Subsidiary);
• 96,00,000 equity shares having face value of Rs10/- each of
Motilal Oswal Finsec IFSC Limited (Wholly Owned Subsidiary);
• 92,24,259 equity shares having face value of Rs1/- each of
Motilal Oswal Asset Management Company Limited (Wholly Owned Subsidiary).
Performance and Financial Position of Subsidiaries
As required under Rule 5 and Rule 8(1) of the Companies (Accounts)
Rules, 2014, a report on the highlights of performance of subsidiaries, associates and
joint venture companies and their contribution to the overall performance of the Company
has been appended as "Annexure 1" to the Board's Report. Pursuant to the
provisions of Section 129(3) of the Act, a statement containing salient features of
financial statement of subsidiaries in Form AOC-1 is annexed to the Consolidated Financial
Statement of this Annual Report. Your Company will also E-mail the copy of separate
audited financial statement in respect of each of the subsidiary company upon request by
any Member of the Company interested in obtaining the same. In accordance with provisions
of Section 136 of the Act, the separate audited financial statement in respect of each of
the subsidiary company is also available on the website of your Company at
www.motilaloswalgroup.com. These documents will be available for inspection in electronic
mode. Members can inspect the same up to the date of AGM, by sending an e-mail to the
Company at shareholders@motilaloswal.com.
BOARD, COMMITTEES OF THE BOARD & KEY MANAGERIAL PERSONNEL
Composition of Board
The composition of the Board of Directors of the Company is in
accordance with the provisions of Section 149 of the Act and Regulation 17 of the Listing
Regulations, with an optimum combination of Executive, Non-Executive and Independent
Directors.
The Board of the Company has 10 (Ten) Directors comprising of 1 (One)
Non-Executive Chairman, 1 (One) Managing Director & Chief Executive Officer, 2 (Two)
Whole-time Directors, 1 (One) Non-Executive Director and 5 (Five) Independent Directors.
The complete list of Directors of the Company has been provided in the Report on Corporate
Governance forming part of this Annual Report.
During the year under review, there was no change in the composition of
the Board of Directors of the Company.
Director(s) liable to retire by rotation
Section 152 of the Act provides that unless the Articles of Association
provide for the retirement of all directors at every AGM, not less than two-third of the
total number of directors of a public company (excluding the Independent Directors) shall
be persons whose period of office is liable to determination by retirement of directors by
rotation. Accordingly, Mr. Raamdeo Agarawal and Mr. Navin Agarwal will retire by rotation
at the ensuing AGM and being eligible, have offered themselves for re-appointment. The
details of Mr. Raamdeo Agarawal and Mr. Navin Agarwal are included in the notice of the
AGM of the Company.
The resolutions for the appointment/re-appointment of all the Directors
proposed for Shareholders' approval along with their brief profiles as detailed in the
Notice of AGM would be placed for your approval.
Composition and Meetings of Board of Directors & Committee(s)
The Composition of Board and Committee(s) as on March 31,2022 and the
details of the Meetings of the Board and Committee(s) of the Company held during FY2021-22
are disclosed in the Report on Corporate Governance forming part of this Annual Report.
During the year under review, all the recommendations/submissions made
by the Audit Committee and other Committees of the Board were accepted by the Board.
Separate Meeting of Independent Directors
As stipulated in the Code of Conduct for Independent Directors under
the Act and the Listing Regulations, a separate Meeting of the Independent Directors of
the Company was held on April 29, 2021 to review the performance of NonIndependent
Directors (including the Chairman) and the Board as a whole. The Independent Directors
also assessed the quality, quantity and timeliness of flow of information between the
Company Management and the Boards which is necessary to effectively and reasonably perform
and discharge their duties.
Declaration by Independent Directors
Pursuant to Section 149(7) of the Act, Regulation 16(1)(b) and
Regulation 25(8) of the Listing Regulations, the Independent Directors have provided a
declaration to the Board of Directors that they meet the criteria of Independence as
prescribed in the Act and the Listing Regulations, and are not aware of any situation
which exists or may be reasonably anticipated that could impair or impact their ability to
discharge duties as an Independent Director with an objective independent judgement and
without any external influence. Further, veracity of the above declarations has been
assessed by the Board, in accordance with Regulation 25(9) of the Listing Regulations.
The Board is of the opinion that the Independent Directors of the
Company hold highest standards of integrity and possess requisite expertise and experience
(including the proficiency) required to fulfill their duties as Independent Directors.
Further, in terms of Section 150 of the Act read with Rule 6 of the
Companies (Appointment and Qualification of Directors) Rules, 2014, as amended by Ministry
of Corporate Affairs ('MCA'), all the Independent Directors have confirmed that they have
registered themselves with databank maintained by The Indian Institute of Corporate
Affairs ('IICA'). These declarations/confirmations have been placed before the Board. The
Independent Directors are also required to undertake online proficiency self-assessment
test conducted by IICA within a period of 2 (Two) years from the date of inclusion of
their names in the data bank, unless they meet the criteria specified for exemption.
Mrs. Divya Momaya and Ms. Swanubhuti Jain have passed online
proficiency self-assessment test conducted by IICA, while Mr. C. N. Murthy and Mr.
Chandrashekhar Karnik are not required to pass the online proficiency selfassessment test
pursuant to the exemption provided under first proviso of Rule 6(4) of the Companies
(Appointment and Qualification of Directors) Rules, 2014. However, Mr. Pankaj Bhansali has
confirmed to undertake the said online proficiency self-assessment within prescribed
timeline.
Key Managerial Personnel
As at March 31, 2022, the Company has the following Key Managerial
Personnel:
1) Mr. Motilal Oswal - Managing Director & Chief Executive Officer
2) Mr. Ajay Menon - Whole-time Director
3) Mr. Rajat Rajgarhia- Whole-time Director
4) Mr. Shalibhadra Shah - Chief Financial Officer
5) Mr. Kailash Purohit - Company Secretary & Compliance Officer
FAMILIARIZATION PROGRAMMES
The Company has formulated a policy on 'familiarisation programme for
independent directors'. Accordingly, upon appointment of an Independent Director, the
appointee is given a formal Letter of Appointment, which inter alia, explains the role,
function, duties and responsibilities expected as a Director of the Company.
Further, the Company also familiarize the Independent Directors with
the Company, their roles, responsibilities in the Company, nature of industry in which the
Company operates, business model of the Company, various businesses in the group etc. The
Director is also explained in detail the compliance required from him under the Act and
the Listing Regulations. Further, on an ongoing basis as a part of Agenda of Board /
Committee Meetings, presentations are regularly made to the Independent Directors on
various matters inter-alia covering the business strategies, management structure,
management development, quarterly and annual results, budgets, review of Internal Audit,
risk management framework, operations of subsidiaries and associates.
The Policy on familiarisation programme for independent directors along
with the details of the familiarization Programmes are available on the website of the
Company and can be accessed at https://www.motilaloswalgroup.
com/Downloads/IR/33122429Familiarization-Programmes-for-Independent-Director 2022.pdf
COMPANY'S POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION
Section 178 of the Act and Regulation 19 read with Part D of Schedule
II of the Listing Regulations, as amended from time to time, requires the Nomination and
Remuneration Committee ("NRC") to formulate a Policy relating to the
remuneration for the Directors, Key Managerial Personnel ("KMP"), Senior
Management and other employees of the Company and recommend the same for approval of the
Board.
Accordingly, in compliance to the aforesaid provisions, the Nomination
and Remuneration Policy of the Company is available on the website of the Company and can
be accessed at https://www.motilaloswalgroup.com/Downloads/
IR/724496156Nomination-and-Remuneration-Policy.pdf. The salient features of the Policy are
given below:-
Appointment criteria and qualifications:
1. The Committee shall identify and ascertain the integrity,
qualification, expertise and experience of the person for appointment as Director, KMP or
Senior Management and recommend to the Board his / her appointment.
2. A person should possess adequate qualification, expertise and
experience for the position he / she is considered for appointment. The Committee has
discretion to decide whether qualification, expertise and experience possessed by a person
are sufficient/ satisfactory for the concerned position.
3. The Company shall not appoint or continue the employment of any
person as Managing Director/Whole-time Director/Manager who has attained the age of
seventy years.
Provided that the term of the person holding this position may be
extended beyond the age of seventy years with the approval of shareholders by passing a
special resolution based on the explanatory statement annexed to the notice for such
motion indicating the justification for extension of appointment beyond seventy years.
> Evaluation:
The performance evaluation shall be carried out as given below:-
| Performance Evaluation by |
Of Whom |
| Nomination and Remuneration Committee |
- Every Director's performance |
| Board of Directors |
- Board as a whole and Committees of Board |
|
- All Directors excluding the Director being evaluated |
| Independent Directors |
- Non - Independent Directors |
|
- Chairman of the Company |
|
- Board as a whole |
The Committee shall carry out evaluation of performance of every
Director at regular interval (yearly).
> Removal:
Due to reasons for any disqualification mentioned in the Act, rules
made there under or under any other applicable Act, rules and regulations, the Committee
may recommend, to the Board with reasons recorded in writing, removal of a Director, KMP
or Senior Management subject to the provisions and compliance of the said Act, rules and
regulations.
> Retirement:
The Director, KMP and Senior Management shall retire as per the
applicable provisions of the Act and the prevailing internal policy of the Company. The
Board will have the discretion to retain the Director, KMP, Senior Management in the same
position / remuneration or otherwise even after attaining the retirement age, for the
benefit of the Company.
PROVISIONS RELATING TO REMUNERATION OF MANAGERIAL PERSON, KMP AND
SENIOR MANAGEMENT
• General:
1. The remuneration / compensation / commission etc. to Managerial
Person, KMP and Senior Management will be determined by the Committee and recommended to
the Board for approval. The remuneration / compensation / commission etc. shall be subject
to the prior/post approval of the shareholders of the Company and such other approval,
wherever required.
2. The remuneration and commission to be paid to Managerial Person
shall be as per the statutory provisions of the Act and Listing Regulations, and the rules
made there under for the time being in force.
3. Increments to the existing remuneration / compensation structure may
be recommended by the Committee to the Board which should be within the slabs approved by
the Shareholders in the case of Managerial Person.
4. The remuneration structure will have a right mix of guaranteed
(fixed) pay, pay for performance and long term variable pay based on business growth and
other factors such as growth in shareholder value to ensure that it is competitive and
reasonable.
5. Where any insurance is taken by the Company on behalf of its
Managerial Person, KMP and for Senior Management for indemnifying them against any
liability, the premium paid on such insurance shall not be treated as part of the
remuneration payable to any such personnel.
> Remuneration to Managerial Person, KMP and Senior Management:
1. Fixed pay:
Managerial Person, KMP and Senior Management shall be eligible for a
monthly remuneration as may be approved by the Board on the recommendation of the
Committee in accordance with the statutory provisions of the Act and the rules made there
under for the time being in force. The break-up of the pay scale and quantum of
perquisites including employer's contribution to Provident Fund(s), pension scheme(s),
medical expenses, club fees, etc. shall be decided and approved by the Board on the
recommendation of the Committee and approved by the shareholders and such other approval,
wherever required.
2. Variable Pay:
The Company may in its discretion structure any portion of remuneration
to link rewards to corporate and individual performance, fulfilment of specified
improvement targets or the attainment of certain financial or other objectives set by the
Board. The amount payable shall be based on performance against predetermined financial
and non-financial metrics.
3. Provision for excess remuneration:
If, in any financial year, the Company has no profits or its profits
are inadequate, the Company shall pay remuneration to its Managerial Person in accordance
with the provisions of Schedule V of the Act. If any Managerial Person draws or receives,
directly or indirectly by way of remuneration any such sums in excess of the limits
prescribed under the Act or without such approval, wherever required, he/she shall refund
such sums to the Company and until such sum is refunded, hold it in trust for the Company.
• Remuneration to Non-Executive/Independent Director:
1. Remuneration/Commission:
The remuneration/commission, if any, shall be in accordance with the
statutory provisions of the Act and the rules made there under for the time being in
force.
2. Sitting Fees:
The Non-Executive/Independent Director may receive remuneration by way
of fees for attending meetings of Board or Committee thereof.
Provided that the amount of such fees shall not exceed the maximum
amount as provided in the Act, per meeting of the Board or Committee or such amount as may
be prescribed from time to time.
3. Limit of Remuneration/Commission:
Remuneration/Commission may be paid to Non-Executive Directors within
the monetary limit approved by shareholders, subject to the limit not exceeding 1% of the
net profits of the Company computed as per the applicable provisions of the Act.
PERFORMANCE EVALUATION
Pursuant to the provisions of Section 134(3)(p) and Schedule IV of the
Act and in accordance to Regulation 17(10) and 25(4) of the Listing Regulations, the Board
has carried out the annual performance evaluation of the Board as a whole, various
Committees of the Board and of the individual Directors. The performance evaluation of the
Independent Directors was carried out by the entire Board. The Directors expressed their
satisfaction with the evaluation process.
The Board and the Nomination and Remuneration Committee reviewed the
performance of the individual Directors on the basis of the criteria such as Transparency,
Performance, etc.
In a separate meeting of Independent Directors, performance of
Non-Independent Directors, performance of the Board as a whole and performance of the
Chairman was evaluated, taking into account the views of the executive directors and
non-executive directors. The same was discussed in the Board meeting that followed the
meeting of independent directors, at which the performance of the Board, its committee and
individual Directors was also discussed.
The outcome of the performance evaluation of the Board for the year
under review was discussed by the NRC and the Board at their respective meetings. All
Directors expressed satisfaction with the evaluation process.
PARTICULARS OF EMPLOYEES
Disclosure with respect to the percentage increase in remuneration,
ratio of the remuneration of each Director and Key Managerial Person to the median
employee's remuneration and other details in terms of sub-section 12 of Section 197 of the
Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, are forming part of this report and has been appended as "Annexure
2" to the Board's Report.
In terms of first proviso to Section 136 of the Act, the Report and
Financial Statements are being sent to the Members and others entitled thereto, excluding
the information on employees' particulars as required pursuant to provisions of Rule 5(2)
and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014.
In accordance with the provisions of Section 197 of the Act read with
Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, the annexure pertaining to the names and other particulars of employees will
be available for inspection in electronic mode. Shareholders can inspect the same up to
the date of AGM, by sending an e-mail to the Company at shareholders@motilaloswal.com. Any
shareholder interested in obtaining a copy of the said Annexure may write to the Company
Secretary & Compliance Officer in this regard.
The Board of Directors affirms that the remuneration paid to Senior
Management of the Company is as per the Nomination and Remuneration Policy of the Company.
GOVERNANCE
Report on Corporate Governance
A detailed Report on Corporate Governance in terms of Schedule V of the
Listing Regulations for FY 2021-22, is forming part of this Annual Report.
Further, a Certificate from M/s. Singhi & Co., the Statutory
Auditors of the Company confirming compliance of conditions of Corporate Governance as
stipulated in Regulation 34 read with Schedule V to the Listing Regulations is annexed to
the Report on Corporate Governance.
Code of Conduct
Pursuant to Regulation 26(3) of the Listing Regulations, all the
Directors & Senior Management of the Company have affirmed compliance with the Code of
Conduct of the Company.
Vigil Mechanism/Whistle Blower Policy
Pursuant to the provisions of Section 177(9) of the Act read with Rule
7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of the
Listing Regulations (as amended from time to time), the Company has framed Vigil
Mechanism/Whistle Blower Policy ("Policy") to enable directors and employees to
report genuine concerns or grievances, significant deviations from key management policies
and reports of any non-compliance and wrong practices, e.g., unethical behavior, fraud,
violation of law, inappropriate behavior /conduct etc.
The functioning of the Vigil Mechanism is reviewed by the Audit
Committee from time to time. None of the Directors or employees have been denied access to
the Audit Committee of the Board.
The objective of this mechanism is to maintain a redressal system which
can process all complaints concerning questionable accounting practices, internal
controls, or fraudulent reporting of financial information.
The Policy framed by the Company is in compliance with the requirements
of the Act and Listing Regulations. The same is available on the website of the Company
and can be accessed at https://www.motilaloswalgroup.com/
Downloads/IR/1677814951Vigil-MechanismWhistle-Blower-Policy.pdf
Prevention of Sexual Harassment of Women at Workplace
The Company has in place a Policy for Prevention, Prohibition and
Redressal of Sexual Harassment at Workplace. Appropriate reporting mechanisms are in place
for ensuring protection against Sexual Harassment and the right to work with dignity.
Further, the Company has complied with the provisions relating to the
constitution of Internal Complaints Committee under the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013 to redress complaints received
regarding sexual harassment.
During the year under review, no complaints in relation to sexual
harassment at workplace have been reported.
RISK MANAGEMENT
The Company realizes the importance of Enterprise Risk Management
("ERM") framework and had taken early initiatives towards its implementation.
The Company has also formulated group risk management policy.
A systematic approach has been adopted that originates with the
identification of risk, categorization and assessment of identified risk, evaluating
effectiveness of existing controls and building additional controls to mitigate risk and
monitoring the residual risk through effective Key Risk Indicators ("KRI"). The
implementation is being carried out in phased manner with the objective to encompass the
entire line of businesses.
Effective ERM involves a robust implementation of three lines of
defense - first line of defense is the front-line employees, the second line of defense is
the risk and compliance function and the third line of defense is external and internal
auditors. To build an effective risk culture significant effort has been made towards
robustness of these lines of defense.
Further, pursuant to Regulation 21 of the Listing Regulations, the
Board of Directors have also constituted the Risk Management Committee of the Board,
details of which are mentioned in the Corporate Governance Report. The
composition of the Committee is in conformity with the Listing
Regulations, as amended, with all members being Directors of the Company. The Risk
Management Committee is, inter alia, authorized to monitor and review the risk assessment,
mitigation and risk management plans for the Company from time to time and report the
existence, adequacy and effectiveness of the above process to the Audit Committee/Board on
a periodic basis.
In the opinion of Board, there are no elements of risks threatening the
existence of the Company.
The details of composition of the Risk Management Committee and its
terms of reference, is provided in Corporate Governance Report which forms part of this
Annual Report.
BUSINESS RESPONSIBILITY REPORT
In terms of Regulation 34(2)(f) of the Listing Regulations, as amended
from time to time, top 1000 listed entities based on their market capitalization as on
March 31, are required to prepare a Business Responsibility Report ("BRR")
forming part of this Annual Report.
Accordingly, the Company has prepared the BRR describing the
initiatives taken by the Board from an Environmental, Social and Governance perspective.
The Business Responsibility Committee overviews the BRR and frames and overviews such
polices as may be required from time to time.
The said BRR is forming part of this Annual Report and is also uploaded
on the website of the Company at www.motilaloswalgroup.com.
STATUTORY AUDITORS
Pursuant to the provisions of Section 139(2) of the Act read with rules
made thereunder, the Members at their Twelfth AGM held on July 27, 2017, had appointed
M/s. Walker Chandiok & Co. LLP, Chartered Accountants, ("Walker") as the
Statutory Auditors of the Company for a term of five years, i.e. from the conclusion of
Twelfth AGM till the conclusion of the Seventeenth AGM.
In order to attain the synergy at group level, Walker was also
appointed as Statutory Auditor of material subsidiaries of the Company namely Motilal
Oswal Home Finance Limited (MOHFL), Motilal Oswal Asset Management Company Limited (MOAMC)
and Motilal Oswal Finvest Limited (MOFL) and other group entities for the term of 5 years.
Pursuant to the "Guidelines for Appointment of Statutory Auditors
(SAs) of NBFCs (including HFCs)" issued by RBI, NBFCs are required to appoint new
Statutory Auditors of their respective company for the period of 3 years (including
existing period). Further, as per the said guidelines, the same Auditor cannot be
appointed for two RBI regulated entities within same Group and every Statutory Auditor can
conduct audit of only 8 NBFCs/HFCs in aggregate. Further, Walker had completed 3 years as
Statutory Auditors in MOFL and 2 years in MOHFL.
In view of the aforesaid, Walker had resigned from MOFL due to
completion of 3 years and has expressed their inability to continue as Statutory Auditors
of MOHFL also for balance period of 1 year due to limitation of audit of 8 NBFCs.
Further, due to aforesaid regulatory restrictions, Group was also
required to appoint 2 separate auditors for MOHFL and MOFL.
Further, pursuant to the provisions of Listing Regulations, the
Statutory Auditor of the Company shall undertake a limited review of the audit of all the
entities/companies whose accounts are to be consolidated with the Company and at least
eighty percent of each of the consolidated revenue, assets and profits, respectively,
shall have been subject to audit or in case of unaudited results, subjected to limited
review.
In view of the above, the Management evaluated various audit firms and
decided to discontinue the audit services of Walker across the Group pursuant to the
mutual agreement between the Company and Walker. Accordingly, Walker agreed to resign as
Statutory Auditors of the Company w.e.f. closure of business hours of August 12, 2021.
Consequent to resignation of Walker as Statutory Auditors, the Board of
Directors of the Company, ("the Board"), at it meeting held on August 13, 2021,
on the recommendation of the Audit Committee of the Board, resolved to fill the casual
vacancy caused by the resignation of Walker with the appointment of M/s. Singhi & Co.,
Chartered Accountants as Statutory Auditors of the Company, subject to approval of the
members, to hold office till the conclusion of ensuing AGM.
Further, the members of the Company approved the appointment of M/s.
Singhi & Co., Chartered Accountants as Statutory Auditors of the Company through
Postal Ballot on October 19, 2021 to hold office till the conclusion of 17th AGM of the
Company.
Since the term of appointment of M/s. Singhi & Co., Chartered
Accountants is expiring at the ensuing 17th AGM of the Company, a resolution seeking
approval of the Members for appointment of M/s. Singhi & Co., Chartered Accountants as
Statutory Auditors of the Company for a term of five years commencing from 17th AGM till
conclusion of 22nd AGM of the Company, is included in the Notice of the ensuing AGM.
M/s. Singhi & Co., has furnished a certificate of their eligibility
and consent under Section 139 and 141 of the Act read with the Companies (Audit and
Auditors) Rules 2014 for their continuance as the Auditors of the Company for the FY 2022
- 23. In terms of the Listing Regulations, the Auditors have confirmed that they hold a
valid certificate issued by the Peer Review Board of the ICAI.
Mr. Nikhil Singhi, Partner, Singhi & Co., Chartered Accountants,
Statutory Auditors, has signed the Audited Financial Statements of the Company.
Statutory Auditors' Report
The Statutory Auditors' Report issued by M/s. Singhi & Co.,
Chartered Accountants for the year under review does not contain any qualification,
reservations or adverse remarks. The Notes to the Accounts referred to in the Auditors'
Report are self-explanatory and therefore do not call for any further clarifications under
Section 134(3)(f) of the Act. Further, pursuant to Section 143(12) of the Act, the
Statutory Auditors of the Company have not reported any instances of frauds committed in
the Company by its officers or employees.
SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Act and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended from time
to time), the Company had appointed M/s. U. Hegde and Associates, Practicing Company
Secretaries, to undertake the Secretarial Audit of the Company for the FY 2021-22.
Secretarial Audit & Annual Secretarial Compliance Report
The Secretarial Audit Report issued by the Secretarial Auditor has been
annexed to this Board's Report as "Annexure 3".
Pursuant to the provisions of Regulation 24A of the Listing
Regulations, Annual Secretarial Compliance Report for the Financial Year ended March 31,
2022 was obtained from M/s. U. Hegde and Associates, Practicing Company Secretaries.
There is no adverse remark, qualifications or reservation in the
Secretarial Audit Report and Secretarial Compliance Report.
Secretarial Audit of Material Subsidiaries
In terms of Regulation 24A of Listing Regulations, the Secretarial
Audit Report of material subsidiaries i.e. MOHFL, MOAMC & MOFL for the FY 2021-22 are
made available at website of the Company at www.motilaloswalgroup.com.
INTERNAL AUDITORS
The Board of Directors at their meeting held on April 29, 2021 had
appointed M/s. Aneja Associates, Chartered Accountants, as Internal Auditors of the
Company for the FY 2021-22. The Internal Auditors have been periodically reporting to the
Audit Committee with regards to their audit process and key audit findings during the
year.
MAINTENANCE OF COST RECORDS & COST AUDIT
The Company is engaged in carrying Stock Broking & related
activities and hence provisions related to maintenance of cost records and requirement of
cost audit as prescribed under the provisions of Section 148(1) of the Act are not
applicable.
INTERNAL FINANCIAL CONTROLS
The Internal Financial Controls with reference to financial statements
as designed and implemented by the Company are adequate. The Internal Financial Control
procedure adopted by the Company are adequate for safeguarding its assets, the prevention
and detection of frauds and errors, the accuracy and completeness of the accounting
records and the timely preparation of reliable financial information. During the year
under review, the Internal Financial Controls were operating effectively and no material
or serious observation has been received from the Auditors of the Company for inefficiency
or inadequacy of such controls.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Pursuant to the provisions of Section 134(3) (m) of the Act read with
Rule 8(3)(A) and 8(3)(B) of Companies (Accounts) Rules, 2014, the initiatives taken by the
Company for conservation of energy and technology absorption are provided in Business
Responsibility Report annexed to this Report.
Details of the foreign exchange earnings and outgo are given in the
Note No. 47 to the Standalone Financial Statement of the Company.
DISCLOSURE OF DETAILS OF UNCLAIMED EQUITY SHARES IN THE SUSPENSE
ACCOUNT:
Pursuant to Regulation 34 and Schedule V of Listing Regulations, the
Company reports the following details in respect of unclaimed equity shares that are kept
in Specific Demat Accounts of Motilal Oswal Financial Services Limited:-
| Particulars |
Number of Shareholders |
Number of Equity Shares |
| Aggregate Number of Shareholders and the outstanding shares
in the suspense account lying as on April 1, 2021 |
5 |
575 |
| Number of Shareholders who approached the Company for
transfer of shares from suspense account during the year |
- |
- |
| Number of Shareholders to whom shares were transferred from
the suspense account during the year |
- |
- |
| Aggregate Number of Shareholders and the outstanding shares
in the suspense account lying as on March 31, 2022 |
5 |
575 |
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of Investor Education and Protection Fund
Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the shares in respect of
whom the dividend is unpaid/unclaimed for seven consecutive years are required to be
transferred to Investor Education and Protection Fund ("IEPF") after giving an
opportunity to shareholders to claim the said unpaid/unclaimed dividend.
Accordingly, the Company issued the reminder letters to such
shareholders to claim the dividend and also published the notice to such effect in the
leading newspaper in English and Regional Language having wide circulation and accordingly
informed them that in the event of failure to claim said divided, the unpaid/unclaimed
dividend along with shares pertaining to unpaid/unclaimed dividend would be transferred to
IEPF.
Subsequently, the Company has transferred unpaid/ unclaimed dividend,
amounting to Rs8,06,495/- on September 17, 2021 and 14 Equity Shares to IEPF on October
19, 2021. The details of such shares are available on the website of the Company at
https://www.motilaloswalgroup.com/Investor-Relations/Disclosures/IEPF. The concerned
shareholders are requested to claim the said shares by directly approaching IEPF
Authority.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(5) of the Act in relation to
the Audited Financial Statements of the Company for the year ended March 31, 2022, the
Board of Directors confirm that, to the best of its knowledge and belief:
1) in the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to material
departures, if any;
2) the Directors have 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 as at March 31,2022
and of the profit of the Company for that period;
3) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the provisions of the Act
for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities;
4) the Directors have prepared the annual accounts on a going concern
basis;
5) the Directors have laid down internal financial controls to be
followed by the Company and that such internal financial controls are adequate and
operating effectively;
6) the Directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were adequate and operating
effectively.
CORPORATE SOCIAL RESPONSIBILITY
The Company recognizes the responsibilities towards society and
strongly intends to contribute towards development of knowledge based economy.
In accordance with the requirements of the provisions of Section 135 of
the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the
Company has constituted a Corporate Social Responsibility ("CSR") Committee. The
composition and terms of reference of the CSR Committee is provided in the Corporate
Governance Report forming part of this Annual Report.
The Company has also formulated a CSR Policy which is available on the
website of the Company at https://www.
motilaloswalgroup.com/Downloads/IR/200139696902.-CSR-Policy.pdf
Further, the detailed CSR initiatives undertaken by the Company are
available at www.motilaloswal.com/foundation/
In the wake of COVID-19 pandemic, the Company extended and will
continue to extend full support and co-operation in adhering to the directives issued by
the Government and steps taken by the Government to overcome the crisis. The social
contribution made by the Company is covered in ESG section forming part of this Annual
Report. We assure you that your Company will continue to work towards its social
commitment and contribute in nation building with the same zeal.
The Company has made contribution through Motilal Oswal Foundation, a
not-for-profit charitable company incorporated under Section 25 of the Act and to various
other not-for-profit organisations.
An Annual Report on activities as required under Companies (Corporate
Social Responsibility Policy) Rules, 2014 (as amended from time to time) has been appended
as "Annexure 4" to the Board's Report. Further, the Annual Action Plan on
CSR activities for FY 2022-23 is also uploaded on the website of the Company at
https://www.motilaloswalgroup.com/Downloads/IR/100662267501.-Policy-on-Materiality-and-Dealing-with-
Related-Party-Transactions 27.01.2022 final.pdf
PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES
Particulars of loans given, investments made or guarantees or
securities provided and the purpose for which the loan or guarantee or security is
proposed to be utilised by the recipient of loan or guarantee or security pursuant to
Section 186 of the Act are given under Notes to Accounts annexed to Standalone Financial
Statements for the year ended March 31,2022 and the same forms part of this Annual Report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
InlinewiththerequirementsoftheActandListingRegulationsandpursuanttotherecommendationoftheAuditCommittee,
the Company has formulated the policy on Materiality and dealing with Related Party
Transactions ("RPT Policy") which is available on the Company's website and can
be accessed at https://www.motilaloswalgroup.com/Downloads/ IR/100662267501
.-Policy-on-Materiality-and-Dealing-with-Related-Party-Transactions 27.01.2022 final.pdf
All related party transactions entered into during the FY 2021-22 were
on an arm's length basis and in the ordinary course of business.
All Related Party Transactions were placed before the Audit Committee
for prior approval. Prior omnibus approval of the Audit Committee is obtained for the
transactions which are of unforeseen or repetitive in nature. The details of all such
related party transactions entered into pursuant to the omnibus approval of the Committee,
were placed before the Audit Committee on a quarterly basis for its review.
Pursuant to Section 134 (3) (h) of the Act read with Rule 8 (2) of the
Companies (Accounts) Rules, 2014, there are no transactions to be reported under Section
188 (1) of the Act. Accordingly, the disclosure of Related Party Transactions, as required
in Form AOC-2 is not applicable to the Company.
Details of transactions, contracts and arrangements entered into with
related parties by the Company, during FY 2021-22, is given under Notes to Accounts
annexed to Financial Statements, which forms part of this Annual Report.
COMPLIANCE WITH SECRETARIAL STANDARD
The Company has followed the applicable Secretarial Standards, i.e.
SS-1 and SS-2, relating to 'Meetings of the Board of Directors' and 'General Meetings'
respectively.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
During the year under review, there were no significant and material
orders passed by the regulators or courts or tribunals that would impact the going concern
status of the Company and its future operations.
Further, the Hon'ble NCLT, Mumbai Bench has vide its order dated March
11, 2022 approved the Scheme of Arrangement between group entities.
OTHER DISCLOSURES
Your Directors state that no disclosure or reporting is required in
respect of the following matters as there were no transactions on these matters during the
year under review:
> Issue of equity shares with differential rights as to dividend,
voting or otherwise.
> There has been no change in the nature of business of the Company.
> Neither the Managing Director nor the Whole-time Directors of the
Company receive any remuneration or commission from any of its subsidiaries.
> There are no proceedings, either filed by the Company or filed
against the Company, pending under the Insolvency and Bankruptcy Code, 2016 as amended,
before National Company Law Tribunal or other courts during the year 2022.
> There was no instance of one-time settlement with any Bank or
Financial Institution.
ACKNOWLEDGEMENT
The Directors express their sincere gratitude to the Reserve Bank of
India, Securities and Exchange Board of India, BSE Limited, National Stock Exchange of
India Limited, Ministry of Finance, Ministry of Corporate Affairs, Regional Directors,
Registrar of Companies, other government and regulatory authorities, lenders, financial
institutions and the Company's Bankers for the ongoing support extended by them. The
Directors also place on record their sincere appreciation for the continued support
extended by the Company's stakeholders and trust reposed by them in your Company. The
Directors sincerely appreciate the commitment displayed by the employees of the Company
and its subsidiaries across all levels, resulting in successful performance during the
year under review.
| For and on behalf of the Board of |
| Motilal Oswal Financial Services Limited |
| Sd/- |
| Raamdeo Agarawal |
| Chairman |
| (DIN:00024533) |
| Place : Mumbai |
| Date : April 28, 2022 |