Morarka Finance Ltd

To The Shareholders,

MORARKA FINANCE LIMITED

The Directors are pleased to present their Thirty Ninth (39^th) Annual Report to the members together with the Audited Financial

Statements of the Company for the year ended 31^st March, 2024.

1. FINANCIAL RESULTS:

[Amount in lakhs]

2. FINANCIAL PERFORMANCE:

For the financial year ended March 31, 2024, your company has posted Profitsof 631.59 lakhs compared to the profit for the financial year ended March 31, 2023 of 468.05 lakhs.

3. TRANSFER TO RESERVE:

As required by section 45-IC of the RBI Act 1934, the Company maintains a reserve fund and transfers there in a sum not less than twenty per cent of its net profit every year as disclosed in the statement of profit and loss and before any dividend is declared.

4. SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR:

The Company does not have any Subsidiary, Joint Ventures or Associate Companies.

5. DIVIDEND:

Your Board of Directors has recommended dividend of 6 per Equity share (i.e., 60%) for the financial year 2023-24. SEBI, vide its circular dated November 03, 2021 (subsequently amended by circulars dated December 14, 2021, March

16, 2023 and November 17, 2023) mandated that the security holders (holding securities in physical form), whose folio(s) do not have PAN or Choice of Nomination or Contact Details or Mobile Number or Bank Account Details or Specimen Signature updated, shall be eligible for any payment including dividend, interest or redemption in respect of such folios, only through electronic mode with effect from April 01, 2024, upon their furnishing all the aforesaid details in entirety.

6. SHARE CAPITAL:

The paid up Equity Capital of your company as at March 31, 2024 was 4,50,21,000/- The company has not issued any shares with differential voting rights and it has not granted any stock options or sweat equity during the year under the review. Further, none of the directors of the company hold instruments convertible into equity shares of the company.

7. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Pursuant to Section 152(6) of the Companies Act, 2013 read with Schedule IV and Articles of the company, Ms. Priyanka G. Morarka (DIN: 00001088), Director of the Company retire by rotation and being eligible offers herself for re-appointment. The Board of Directors of the Company at its meeting held on July 16, 2024, based on the recommendation of Nomination and Remuneration Committee, had approved the appointment of Shri Prithviraj Natrajan Kokkarne (K. N. Prithviraj), Ms. Nina Chatrath and Ms. Divya Rao as Additional Directors categorised as Non-Executive and Independent Directors of the

Company for a term of five consecutive years commencing from July 17, 2024 to July 16, 2029, subject to the approval of members at its ensuing AGM. There is no change in the Key Managerial Personnel(s) of the Company as on March 31, 2024.

The brief resume/details relating to Directors who are to be appointed / re-appointed as above are furnished in the Notice of the Annual General Meeting.

Declaration from Independent Directors:

Pursuant to the requirements of section 149(7) of the Companies Act, 2013, the company has received the declarations from all the independent directors confirming the fact that they all are meeting the eligibility criteria as stated in section

149(6) of the Companies Act, 2013.

Completion of tenure of Directors:

Shri B. J. Maheshwari, Shri Vijay S. Banka and Shri S.H. Nevatia, Independent Directors of the Company, would complete their second term of tenure with the Company with the conclusion of Annual General Meeting of the Company to be held on September 23, 2024. Accordingly, they would cease to be the Directors of the Company with effect from that date. The Board places on record its appreciation for the extensive contribution rendered by the Independent Directors during their tenure with the Company.

8. CHANGE IN NATURE OF BUSINESS:

There is no change in nature of business of the company.

9. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

No Material changes have occurred subsequent to the close of the financial year of the Company to which the balance sheet relates and the date of the report.

10. CORPORATE SOCIAL RESPONSIBILITY:

The company is not falling in the purview of criteria specified in section 135(1) of the Companies Act, 2013 and hence the requirements pertaining to section 135 of the Companies Act, 2013 is not applicable to the company.

11. HUMAN RESOURCES:

The company is having six Directors, Chief Executive Officer, Chief Finance Officer and Company Secretary being key managerial personnel under Section 203 of the Companies Act, 2013. All are experts in their relevant fields. Company's well-disciplined workforce which has served the company for years lies at the very foundation of the company's major achievements.

12. BUSINESS RISK MANAGEMENT:

Over the period of time, company has been following the principle of risk minimization as is the norm in every sector, it is a gist for company growth and long-term survival in this competitive cosmos.

In terms of requirements of RBI - Scale Based Regulations, 2021 (SBR), a Risk Management Committee (RMC) was required to be constituted and the same was constituted by the Company as on February 02, 2022 having following members:

1. Shri B. J. Maheshwari - Chairman

2. Shri Vijay S. Banka - Member

3. Ms. Priyanka G. Morarka - Member

The Board members were informed about risk assessment and minimization procedures after which the Board formally accepted steps for framing, implementing and monitoring the risk management plan for the company. The main objective of this policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues. In today's challenging and competitive environment, strategies for mitigating inherent risks in accomplishing the growth plans of the Company are imperative. The common risks inter alia are: Regulations, Competition, Business risk, Technology obsolescence, Investments, Retention of talent and Expansion of facilities. Business risk, inter-alia, further includes financial risk, political risk, fidelityrisk, . risk legal

As a matter of policy, these risks are assessed and steps as appropriate are taken to mitigate the same.

13. SYSTEM OF INTERNAL CONTROL & THEIR ADEQUACY:

The Company has put in place adequate system of internal control to safeguard and protect from loss, unauthorized use or disposition of its assets. All the transactions are properly authorized, recorded and reported to the Management. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. The internal auditor of the company checks and verifiesthe them in accordance with policy adopted by the company. The Company continues to ensure proper and adequate systems and procedures in commensurate with its size and nature of its business.

14. WHSITLE BLOWER POLICY OR VIGIL MECHANISM:

The company has put in place a whistle blower policy pursuant to which employees of the company can raise their concerns pertaining to fraud, malpractice, or any other activity or event which is against the interest of the company. Details of complaints received and the action taken are reviewed by the Audit Committee. Whistle Blower Mechanism's functioning is reviewed by the Audit Committee from time to time. None of the company's employees are denied access to

Audit Committee. No complaints were received under the said policy during the financial year at the website at https://www.morarkafinance.in/static-data/2019-20/Whistle-Blower-Policy.pdf

15. PERFORMANCE EVALUATION OF BOARD:

As per the provisions of the Companies Act, 2013, a structured questionnaire was prepared after taking into account various aspects of Board's functioning, composition of board together with its committees, culture, execution and performance of specific roles, duties and obligation. So far as the performance evaluation of independent directors are concerned, the same is done by Board. The Chairman is evaluated by the independent directors. The board has expressed that they are satisfied with process of evaluation.

16. POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:

The company have constituted Nomination and Remuneration Committee (NRC) as required under Section 178 of the

Companies Act, 2013 which recommends the appointment of Directors to the Board. The NRC is responsible to identify persons who are qualified to become directors on the Board and to evaluate them on criteria such as academic qualifications, previous experience, track record and integrity of the persons identified, before recommending their appointment to the

Board. The compensation policy of the company, duly reviewed and recommended by the Nomination and Remuneration committee has been articulated in line with the requirements of the Companies Act, 2013 and placed on below mentioned weblink: https://www.morarkafinance.in/static-data/2019-20/Nomination-and-Remuneration-Policy.pdf

The company's compensation policy is aimed to attract, retain, reward and motivate talented individuals, critical for achieving strategic goals and long-term success. Remuneration policy is aligned to business strategy, market dynamics, internal characteristics and complexities within the organization. The ultimate objective is to provide a fair and transparent structure that helps the organization to retain and acquire the talent pool critical in building competitive advantage and brand equity. The compensation system also considers factors like roles, skills / competencies, experience and grade/ seniority to differentiate pay appropriately on the basis of contribution, skill and availability of talent on account of competitive market forces.

The company pays sitting fees to its Non-Executive & Independent Directors for attending meetings of the Board and its Committees. Non-Executive & Independent Directors are also reimbursed with expenses incurred by them for attending meetings of the Board and its Committees at actuals. The remuneration payable to the Non-Executive Directors and Independent Directors is governed by the provisions of the Companies Act, 2013. The company does not have any subsidiary and hence holding of directorships by any of the directors in subsidiary is not applicable. Policy on Terms of Appointment of Independent Directors is placed at: https://www.morarkafinance.in/static-data/2019-20/Terms-and-Conditions-of-appointment-of-Independent

17. MEETINGS OF THE BOARD OF DIRECTORS:

The Board of Directors of the Company met Four (4) times during the year, April 25, 2023, July 18, 2023, October 18, 2023 & January 19, 2024.

18. RELATED PARTY TRANSACTIONS:

Related partytransactionsthatwereenteredduringthefinancialyear were on an arm's length basis and were in the ordinary courseofbusiness.Therewerenomateriallysignificantrelated party transactions with the Company's Promoters,

Directors, Management, or their relatives, which could have had a potential conflict with the interests of the Company.

Transactions with related parties entered by the Company in the normal course of business are periodically placed before the Audit Committee for its omnibus approval and the particulars of contracts entered during the year as per Form AOC-2 is enclosed herewith and marked as Annexure I. The Board of Directors of the Company has on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act 2013, the rules thereunder and the Listing Regulations and placed on below mentioned weblink: https://www.morarkafinance.in/static-data/2019-20/Policy-on-Related-Party-Transactions.pdf

19. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATOR OR COURTS: by the Regulators / Courts which would impact the going concern status Therearenosignificant of the Company and its future operations.

20. STATEMENT OF DIRECTOR'S RESPONSIBILITIES:

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013: a. that in the preparation of the annual financial statements for the year ended March 31, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b. that such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2024 and of the profit of the Company for the year ended on that date; c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d. that the annual financial statements have been prepared on a going concern basis; e. that proper internal financial financialcontrols were adequate and were operating were placeandthatthe effectively. f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

21. CORPORATE GOVERNANCE:

A separate section on Corporate Governance as stipulated under Schedule V (C) of the SEBI Listing Regulations forms part of this report. The Corporate Governance Report along with the requisite certificate from the statutory auditors of the Company confirmingcompliance with the conditions of corporate governance as stipulated under SEBI Listing Regulations forms part of this Annual Report.

22. ANNUAL RETURN:

Pursuant to Section 92(3) of the Companies Act, 2013, the Annual Return in form MGT-7 is provided on the website of the Company and same can be view at this link https://www.morarkafinance.in/static-data/2023-24/Form-MGT-7-31032024-MFL.pdf

23. PARTICULARS OF EMPLOYEE:

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014 in respect of employees of the Company is attached herewith and marked as Annexure II.

All the Non-Executive Directors of the company, due to financial constraints their remuneration. Further, only sitting fees has been paid to the directors of the Company during the year. The CFO is on deportation & is remunerated by the group Company. Besides this, there are only two employees i.e. CS & CEO in the Company & the same is disclosed in Annexure II.

The particulars of the employees who are covered by the provisions contained in Rule 5(2) and rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are: a) Employed throughout the year Nil b) Employed for part of the year Nil The remuneration paid to all Key management Personnel was in accordance with remuneration policy adopted by the company.

24. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has put in place internal policy on Anti Sexual Harassment. No complaints have been received under this policy during the year.

25. MSME RETURN

MCA vide order dated 22^nd January, 2019 directed all companies, who get supplies of goods or services from micro and small enterprises and whose payments to micro and small enterprise suppliers exceed forty five days during the year. The Company is not required to file MSME Return as all payments have been done within prescribed time.

26. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE AND OUTGO:

Particulars relating to conservation of energy and technology absorption stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014 is not applicable to the company. The company does not have any foreign exchange earnings and expenditure.

STATUTORY AUDITORS

M/s Jayesh Dadia & Associates LLP, Chartered Accountants, Mumbai having ICAI Firm Registration No.121142W/ W100122 were appointed as the Statutory Auditors of the Company at the AGM held on June 28, 2022, to hold office until conclusion of the 42^nd AGM, are ratified for the Financial Year 2024-25. As required under the provisions of Section 139 of the Companies Act, 2013, the Company has obtained written confirmationfrom M/s Jayesh Dadia & Associates LLP, that their appointment is made in conformity with the limits specified in the said Section.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. V K M & Associates (CP No.:4279, FCS: 5023), Company Secretaries to undertake the secretarial audit of the company. The Secretarial Audit Report is annexed herewith as Annexure III. The observations in the said report are self-explanatory and no further comments/explanations are called for.

28. AUDITOR'S REPORT

There are no adverse remarks or observations of the Statutory Auditors in their Report.

29. MANAGEMENT DISCUSSON AND ANALYSIS:

As required under Regulation 34(2)(e) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and listing regulations of Stock Exchanges, the Management Discussion and Analysis Report is enclosed as a part of this report.

30. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

No Loans, Guarantees or investments are made under Section 186 of the Act during the year.

31. PUBLIC DEPOSITS

The Company is an NBFC ND and hence does not have any fixed deposits at the beginning of the year in terms of Section

74 of the Companies Act, 2013. The Company did not accept any deposits during the year.

32. LISTING:

The Company's Equity Shares are listed on Bombay Stock Exchange Limited (BSE).

33. CODE OF CONDUCT:

Your Company is committed to conducting its business in accordance with the applicable laws, rules and regulations and highest standards of business ethics. In recognition thereof, the Board of Directors has implemented a Code of Conduct for adherence by the Directors, Senior Management Personnel and Employees of the Company. This will help in dealing with ethical issues and also foster a culture of accountability and integrity. All the Board Members and Senior Management

Personnel have confirmed compliance with the Code.

34. REPORTING OF FRAUDS

There have been no instances of fraud reported by the Statutory Auditors under Section 143(12) of the Companies Act, 2013 & Rules framed thereunder either to the Company or to the Central Government.

35. ACKNOWLEDGEMENT:

Your Directors take this opportunity to place on record their appreciation for the co-operation received from Employees and overwhelming support extended by the shareholders.