| Dear Members,
The Directors are pleased to present the Twenty-Sixth Annual Report
together with the Audited Financial Statements for the year ended March
31,2015,
Financial Highlights (Rs. in Lakhs)
Year ended
31.03.2015 31.03.2014
Total Income 1814.22 1381.36
Cash Profit 438.18 523.50
Less : Depreciation 75.05 39.15
Profit before tax 363.13 484.35
Less : Provision for taxation 120.25 146.00
Add / (Less) : Deferred Tax 10.78 5.08
Profit after tax 253.66 343.43
Add : Surplus brought forward 1841.56 1571.82
Add / (Less) : Adjustment for
Earlier years (5.43) 1.04
Balance available for appropriation 2089.79 1916.29
APPROPRIATION
Provision for Dividend
(Including Dividend Tax) 76.88 74.73
Balance carried to Balance Sheet 2012.91 1841.56
Operational Review
In 2014-15, your Company's total Income from Operations stood at Rs.
1704.60 lacs as against Rs. 1314.96 lacs during the previous year, an
increase of 29.63% over last year.
Your Company continued its focus on fee based activities (Investment
Banking) and income therefrom was Rs. 845.47 lacs as against Rs.
1124.10 lacs during the previous year, recording 24.79% decline due to
adverse market condition. It continues to be the thrust area for the
Company.
Income from Capital Market Operation for the year has been Rs. 192.81
lacs as against Rs. 117.74 lacs during the previous year, an increase
of 63.76% over last year.
Income from Other Sources was at Rs. 66.15 lacs as against Rs. 70.82
lacs during the previous year.
There has not been any change in the nature of business of the Company
Dividend & Reserves
Taking into consideration the overall profitability position, the Board
of Directors is pleased to recommend a dividend of 80 paise per share
(8%) for the year ended March 31,2015, subject to the approval of the
Members at the Annual General Meeting.
During the year under review, no amount was transferred to General
Reserve.
STOCK EXCHANGE LISTINGS
The Equity Shares of the Company are listed on the Stock Exchanges at
Kolkata and Mumbai.
SFSL EMPLOYEES STOCK OPTION SCHEME, 2011
The Company had approved the Employee Stock Option Scheme at its Annual
General Meeting on 24th March, 2011 which was further amended on 09th
November, 2013 and 18th January, 2014. Disclosure pursuant to Clause 12
of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase
Scheme) Guidelines, 1999 is annexed hereto - Annexure - I.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In terms of requirements of Clause 49 of the Listing Agreement with
Stock Exchanges, a management Discussion and Analysis Report is
attached a Annexure - II forming part of this Report.
REPORT ON CORPORATE GOVERNANCE
In terms of requirements of Clause 49 of the Listing Agreement with
Stock Exchanges, a Report on Corporate Governance together with
Auditors' Certificate regarding compliance of Conditions of Corporate
Governance are attached as Annexure - III and Annexure - IV, forming
part of this Report.
SUBSIDIARY & ASSOCIATE COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS
As required under Section 129 (3) of the Companies Act, 2013 (the Act)
and Clause 41 of the Listing Agreement with the Stock Exchanges,
Consolidated Financial Statements of the Company and its following
Subsidiary and Associate Companies prepared in accordance with the
applicable Accounting Standards issued by The Institute of Chartered
Accountants of India are appended in the Annual Report. There has not
been any addition or cessation or change in the Subsidiary and
Associate Companies during the year under review. The Company is not
having any joint venture.
Accordingly a statement in Form AOC-1 is attached to the Financial
Statements of the Company for your information.
During the year under review the Company has formulated a Policy for
determining "Material Subsidiary" and the same is disclosed on the
website of the Company and can be accessed at
http://www.sumedhafiscal.com/material_subsidiary.pdf.
The performance of the subsidiary and associate companies are
summarized below for your information.
SFSL Commodity Trading Pvt. Ltd. - Subsidiary
During the year the Company recorded Total Revenue of Rs. 13,86,547/-
(previous year Rs. 17,98,027/-) and Net Profit of Rs. 3,00,725/- for
the year ended 31st March, 2015 (Previous Year : Rs. 3,94,577/-).
The company continues to explore growth opportunities.
PERFORMANCE OF ASSOCIATE COMPANIES
Capita Finance Services Ltd.
During the year the Company recorded Total Revenue of Rs. 3,26,397/-
(previous year Rs. 2,61,048/-) and Net Profit of Rs. 2,10,861/- for
the year ended 31st March, 2015 (Previous Year : Rs. 1,31,594/-).
The company continues to explore growth opportunities.
SFSL Insurance Advisory Services Pvt. Ltd.
During the year the Company recorded Total Revenue of Rs. 2,38,086/-
(previous year Rs. 1,64,383/-) and Net Profit of Rs. 64,430/- for the
year ended 31st March, 2015 (Previous Year: Rs. 24,080/-).
The company continues to explore growth opportunities.
SFSL Risk Management Services Pvt. Ltd.
During the year the Company recorded Total Revenue of Rs. 1,62,760/-
(previous year Rs. 1,05,975/-) and Net Profit of Rs. 36,054/- for the
year ended 31st March, 2015 against loss in the Previous Year of Rs.
16,018/-.
The company continues to explore growth opportunities.
US Infotech Pvt. Ltd.
During the year the Company recorded Total Revenue of Rs. 19,62,269/-
(previous year Rs. 17,99,536/-) and Net Profit of Rs. 4,71,225/- for
the year ended 31st March, 2015 (Previous Year : Rs. 3,33,718/-).
The company continues to explore growth opportunities.
CORPORATE SOCIAL RESPONSIBILITY
The Company is not yet required to comply to with the requirement
associated with Section 135 of the Companies Act, 2013.
DIRETORS RESPONSIBILITY STATEMENT
To the best of knowledge and belief and according to the information
and explanations obtained by them, your Directors make the following
statement in terms of Section 134(3)(c) of the Companies Act. 2013:
(i) that in the preparation of the Annual Accounts for the year ended
march 31,2015, the applicable accounting standards have been followed
and there are no material departure;
(ii) 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 31,2015 and profits of
the Company for the year ended on that date;
(iii) that Directors have taken proper and sufficient care 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;
(iv) the annual accounts have been prepared on a going concern basis;
(v) that 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; and
(vi) that 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.
DIRECTORS
The Board of Directors had on the recommendation of Remuneration and
Nomination Committee appointed Mrs. Garima Maheshwari as a
Non-Executive Director of the Company, with effect from November 8,
2014. Her tenure in office expires at the forthcoming Annual General
Meeting (AGM).
The Board of Directors had on the recommendation of Remuneration and
Nomination Committee also appointed Mr. Prabhat Agarwala as an
Independent Director of the Company with effect from May 16, 2015 for a
period of five consecutive years, subject to approval of the Members at
the forthcoming Annual General Meeting of the Company.
The Company has received respective Notices pursuant to Section 160 of
the Companies Act, 2013 along with required deposits proposing
appointment of Mrs. Garima Maheshwari and Mr. Prabhat Agarwala at the
forthcoming AGM.
In accordance with the provisions of Section 152 of the Companies Act,
2013 and the Company's Articles of Association, Mr. Anil Kumar Birla
and Mr. Bijay Murmuria, Directors, retire by rotation at the
forthcoming Annual General Meeting and, being eligible offer themselves
for re-appointment.
The company has duly received Declarations from all the Independent
Directors pursuant to Section 149(6) & (7) of the Companies Act, 2013
and Clause 49 of the Listing Agreement.
During the year under review the Company has formulated a
Familiarisation Programme for Directors and the same is disclosed on
the website of the Company and can be accessed at
http://www.sumedhafiscal.com/familiarization_programe.pdf.
KEY MANAGERIAL PERSONNEL (KMP)
During the year under review, the Company had the following officials
as Key Managerial Personnel:
Name Designation
Mr. Bhawani Sankar Rathi Wholetime Director & Chief Financial Officer
Mr. Deb Kumar Sett Company Secretary
Mr. Rajesh Kumar Gupta, Wholetime Director, resigned with effect
from August 31,2014.
BOARD EVALUAI1ON
The Board of Directors has carried out an annual evaluation of its own
performance, Board Committees and individual Directors pursuant to the
provisions of the Act and as prescribed by Securities and Exchange
Board of India under Clause 49 of the Listing Agreements. The
performance of the Board was evaluated by the Board after seeking
inputs from all the Directors on the basis of the criteria such as the
Board composition and structure, effectiveness of Board processes,
information and functioning, etc.
The performance of the Committees was evaluated by the Board after
seeking inputs from the Committee members on the basis of the criteria
such as the composition of Committees, effectiveness of Committee
meetings, etc.
The Board and the Nomination and Remuneration Committee ("NRC")
reviewed the performance of the individual Directors on the basis of
the criteria such as the contribution of the individual director to the
Board and Committee meetings like preparedness on the issues to be
discussed, meaningful and constructive contribution and inputs in
meetings, etc. In addition, the Chairman was also evaluated on the key
aspects of his role.
In the 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 executive director and non-executive directors. The same was
discussed in the board meeting that followed the meeting of the
Independent Directors, at which the performance of the Board, its
Committees and individual Directors was also discussed.
AUDIT COMMITTEE
The Audit Committee of the Board as on 31st March 2015 consisted of Mr.
Prashant Sekhar Panda (Chairman) and Mr. Atul Chandra Varma, both
Independent Directors and Mr. Bijay Murmuria, Non-Executive Director.
Mr. Prabhat Agarwala, Independent Director, joined the Audit Committee
on May 16, 2015. The Company has established a vigil mechanism /
whistle blower policy, commensurate with its size and nature of
business, and oversees through the Audit Committee, the genuine
concerns expressed by the employees and other Directors. The Company
has also made provisions for adequate safeguards against victimisation
of employees and Directors who express their concerns. The Company has
also provided direct access to the chairman of the Audit Committee on
reporting issues concerning the interests of the employees and the
Company. The vigil mechanism / whistle blower policy of the Company has
been uploaded on the website of the Company and can be accessed at
http://www.sumedhafiscal.com/whistle_blower_policy.pdf.
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee of the Board as on 31st
March, 2015 comprised of Mr. Prashant Sekhar Panda, a Non- Executive
Independent Director, as the Chairman, Mr. Atul Chandra Varma,
Non-Executive Independent Director, Mr. Vijay Maheshwari and Mr. Bijay
Murmuria, Non-Executive Promoter Directors, as its Members. Mr. Prabhat
Agarwala, a non-executive Independent Director, has joined the
Committee on May 16, 2015.
The Company's Policy relating to appointment of Directors, payment of
managerial remuneration, Directors' qualifications, positive
attributes, independence of Directors and other related matters as
provided under Section 178(3) of the Companies Act, 2013 and clause 49
of the Listing Agreement is attached to this report as Annexure - V.
LOANS, GUARANTEES OR INVESTMENTS
Details of Loans, Guarantees and Investments covered under the
provisions of Section 186(4) of the Companies Act, 2013 [the Act] are
provided in the Notes to Financial Statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
The particulars of Contracts or Arrangements made with related parties
pursuant to subsection (1) of Section 188 of the Companies Act, 2013
furnished in Form AOC -2, is attached to this report as Annexure - VI.
During the year under review the Company has formulated a Policy for
Related Party Transaction and the same is disclosed on the website of
the Company and can be accessed at
http://www.sumedhafiscal.com/policy_on_rpt.pdf.
DEPOSITS
The Company has neither accepted nor renewed any deposits during the
year under review.
CASH FLOW STATEMENT
Cash Flow Statement for the year ended 31st March, 2015 pursuant to
Clause 32 of the Listing Agreements with Stock Exchanges is annexed
herewith.
GOING CONCERN STATUS
No significant and material orders have been passed by the Regulators
or Courts or Tribunals impacting the going concern status of the
Company and its operation in the future.
MATERIAL CHANGES AND COMMITMENTS
There has not been any material change and commitment affecting the
financial position of the Company occurred between the end of the end
of the financial year 2014-15 and the date of the Report.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your Company has an effective internal control and risk-mitigation
system, which are constantly assessed and strengthened with revised
standard operating procedures. The Company's internal control system is
commensurate with its size, scale and complexities of its operations.
The internal and operational audit is entrusted to firms of Chartered
Accountants. The main thrust of internal audit is to test and review
controls, appraisal of risks and business processes, besides
benchmarking controls with best practices in the industry.
The Audit Committee of the Board of Directors actively reviews the
adequacy and effectiveness of the internal control systems and suggests
improvements to strengthen the same. The Company has an effective
Management Information System, which is an integral part of the control
mechanism.
The Company is also having well-defined internal compliances structure
comprising of vertical heads (as responsibility centers) for ensuring
statutory compliance in their respective areas. Department wise
quarterly compliance certificates/status reports issued by every
Department are placed before the Audit Committee for review.
The Audit Committee of the Board of Directors, Statutory Auditors and
the Department Heads are periodically apprised of the internal audit
findings and corrective actions taken. Internal Audit plays a key role
in providing assurance to the Board of Directors. Significant audit
observations and corrective actions taken by the management are
presented to the Audit Committee. To maintain its objectivity and
independence, the Internal Audit function reports to the Chairman of
the Audit Committee.
COMPLIANCE SYSTEM
Based on the Reports of Statutory Compliance from Departmental
Heads/Responsibility Centres, as aforesaid, the Company Secretary
issues Certificate under Section 205 of the Companies Act, 2013 (Act)
and Rules made thereunder. The Certificate is also endorsed by the
Wholetime Director and Chief Financial Officer of the Company.
The status of Statutory Compliance is verified by the Internal Auditors
and Secretarial Auditors pursuant to Sections 138 and 204 of the Act.
ANNUAL RETURN
The extract of Annual Return pursuant to the provisions of Section 92
of the Companies Act, 2013 read with Rule 12 of the Companies
(Management and Administration) Rules, 2014 is attached to this Report
as Annexure - VII.
SECRETARIAL AUDIT
In terms of the requirements of Section 204 of the Companies Act, 2013
the Secretarial Audit of the Company for the year ended 31st March 2015
was conducted by Mr. Babu Lal Patni, Company Secretary in Practice. The
Secretarial Auditors' Report is attached to this Report as Annexure -
VIII and forms part of the Directors' Report. There is no qualification
or reservation or adverse remark or disclaimer made by the Secretarial
Auditor in the Report.
COST AUDIT
The Company is not engaged in production of goods or providing services
pursuant to Section 148 of the Act and therefore not required to comply
with the requirements thereunder.
AUDITORS AND AUDIT REPORT
Messrs. ARSK & Associates, Chartered Accountants, hold office as the
Auditors of the Company upto the conclusion of the forthcoming Annual
General Meeting and are eligible, for reappointment. The Company has
received a letter from them to the effect that their re- appointment,
if made, would be within the prescribed limits under the Companies Act,
2013 and that they are not disqualified for re-appointment.
There is no qualification, reservation or adverse remark made by
Messrs. ARSK & Associates, the Statutory Auditors of the Company in
their Report pertaining to the year ended 31st March 2015.
The Statutory Auditors have not reported any incident of fraud to the
Audit Committee of the Company for the year under review.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
Since the Company does not own any manufacturing facility, the other
particulars relating to conservation of energy and technology
absorption stipulated in the Companies (Accounts) Rules, 2014 are not
applicable.
FOREIGN EXCHANGE EARNING AND OUTGO
Foreign Exchange earnings and outgo during the year under review were
Rs. 7.75 lacs (previous year Rs. 18.09 lacs) and Rs. 0.94 lac
(previous year Rs. 5.75 lacs), respectively.
RISK MANAGEMENT
The Company, as an Intermediary registered with the Securities and
Exchange Board of India (SEBI), is required to comply with the
prescribed risk management measures. Accordingly, the quarterly status
of various risks being faced by the Company and measures for mitigation
thereof are placed before the Audit Committee and Board of Directors of
the Company, for review and appropriate measures. Further details about
the pertinent risks are contained the in the statement of Management
Discussion and Analysis (Annexure - II).
PARTICULARS OF EMPLOYEES
The ratio of the remuneration of each Director to the median employee's
remuneration and other particulars or details of employees pursuant to
Section 197(12) of the Companies Act, 2013 read with Rule 5 of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 are attached to this Report as Annexure - IX. None of the
employees of the Company is in receipt of remuneration coming under
purview of the said Section/Rule.
EMPLOYEE RELATIONS
Work atmosphere of the Company has been harmonious.
In terms of requirements of Section 4 of the Sexual Harassment of Women
at Workplace (Prevention, Prohibition and Rehabilitation) Act, 2013,
the Company has formed Internal Complaints Committees. During the year,
no complaint regarding sexual harassment was received by the said
Committee.
APPRECIATION
We acknowledge our appreciation to Shareholders, Bankers, Regulators,
National Stock Exchange, Multi-Commodity Exchange, Bombay Stock
Exchange, and Clients for their continued support. The Board also takes
this opportunity to express its whole-hearted appreciation of the
efforts put in by the employees at all levels. We look forward to the
future with confidence and stand committed to creating a brighter
future for all shareholders.
On Behalf of the Board
Place: Kolkata Ratan Lal Gaggar
Date: 16th May, 2015 Chairman |