DIRECTORS' REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS
To
The Members,
The Board of Directors are pleased to present herewith the Twenty-third Annual Report of your Company together with the Audited Financial Statements for the financial year ended 31st March, 2018. The Management Discussion and Analysis has also been incorporated into this report.
1. FINANCIAL RESULTS
(Rs, In Lakhs)
Particulars
|
Year Ended
|
Year Ended
|
|
31st March, 2018 31st
|
March, 2017
|
Gross Total Income
|
3200.26
|
2858.07
|
Expenditure
|
2446.95
|
2008.15
|
Finance Cost
|
40.31
|
43.62
|
Gross Profit ( Loss )
|
713.00
|
806.30
|
Depreciation
|
8.72
|
12.57
|
Profit / (Loss) Before Tax
|
704.28
|
793.73
|
Tax Expenses
|
|
|
Current
|
137.25
|
257.00
|
MAT credit entitlement
|
-28.95
|
-
|
Deferred
|
0.34
|
-1.82
|
Provision for Earlier Year
|
-
|
-0.09
|
Net Profit (Loss) after Tax
|
595.64
|
538.64
|
Balance B/f from last Year
|
3654.41
|
3240.67
|
Appropriations:
|
|
|
Proposed Dividend 1
|
-
|
103.77
|
Tax on Equity Dividend *
|
-
|
21.13
|
Balance c/f to the Balance Sheet 4250.05
|
3654.41
|
2. OVERVIEW OF FINANCIAL PERFORMANCE
The Company has a Trading-cum-Clearing Membership of BSE Ltd and National Stock Exchange of India Ltd in their Cash and Derivative segment and Trading Member of Metropolitan Stock Exchange Ltd in Currency Derivatives and providing Capital Market services through the network of branches and sub brokers/authorized persons.
The Company is also a Depository Participant of Central Depository Services (I) Ltd and providing the depository services to the Clients.
Total Income for the year increased to Rs 3200.26 lakhs as compared to Rs. 2858.07 lakhs last year. Total profit before tax for the year 704.28 lakhs as against Rs. 793.73 lakhs last year and the net profit after tax was Rs. 595.64 lakhs as against Rs.538.64 lakhs last year.
M/s. Joindre Commodities Ltd., a subsidiary of the Company, is providing services for trading in commodity futures as a members of National Commodity & Derivatives Exchange Limited and Multi Commodity Exchange of India Ltd.
3. DIVIDEND
Your Directors are pleased to recommend a dividend of Rs.0.75 per Equity Share of Rs. 10/- each (previous year Rs. 0.75 ). The total outgo for the current year amounts to Rs.124.90 lakhs including dividend distribution tax of Rs. 21.13 lakhs (previous year Rs. 124.90 lakhs including dividend distribution tax of Rs. 21.13 lakhs)
Pending approval of the shareholders for proposed dividend for the year 2017-18, the same is not recognized in financial statements of the current financial year. In this connection please refer to note No. 24-(b) on financial statements for the year ended 31st March 2018.
4. APPLICABILITY OF INDIAN ACCOUNTING STANDARDS
The Ministry of Corporate Affairs has notified Indian Accounting Standards (Ind-AS) vide its notification dated 16th February, 2015. Further, the Ministry of Corporate Affairs has amended the Companies (Indian Accounting Standards) Rule, 2015 vide its Notification No. G.S.R. 365 (E) dated 30th March, 2016. As per the said notification, the Companies (Indian Accounting Standards) (Amendment) Rule, 2016 has defined the NBFC Company. As per the said definition, the Stock Broker / Sub-broker companies are included in the definition of NBFC Company. As per Rule 4 (iv) (b) of the said rules, the Ind-AS will be applicable to your Company w.e.f. 01st April, 2019.
5. GOODS AND SERVICE TAX (GST)
The Goods and Services Tax (GST) is a landmark reform which will have a lasting impact on the economy and on businesses. Your Company has successfully implemented and migrated to GST with effect from 01st July, 2017.
6. PORTFOLIO MANAGER SERVICES
The Company proposes to start Portfolio Manager Services (PMS) and has made the necessary application for registration as Portfolio Manager to the Securities and Exchange Board of India and the necessary approval is awaited.
7. SHARE CAPITAL
The paid up Equity Share Capital as on 31st March,
2018 was Rs. 1383.64 Lakhs. During the year under review, the Company has not issued any shares with differential voting rights nor granted stock options nor sweat equity. As on 31st March, 2018, the Directors of the Company hold the Equity Shares of the Company as follows:
Name of the Director
|
|
Number of Shares
|
% of Total Capital
|
Mr. Anil Mutha
|
Whole Time Director
|
1771000
|
12.80
|
Mr. Dinesh Khandelwal
|
Whole Time Director
|
771600
|
5.58
|
Mr. Paras Bathia
|
Whole Time Director
|
1266850
|
9.16
|
Mr. Subhash Agarwal
|
Whole Time Director
|
565450
|
4.09
|
Mr. Sunil Jain
|
Whole Time Director
|
470160
|
3.40
|
Mr. Haresh Mehta
|
Independent Director
|
Nil
|
NA
|
Mr. Ramavtar Badaya
|
Independent Director
|
Nil
|
NA
|
Mr. Ravi Jain
|
Independent Director
|
Nil
|
NA
|
Mrs. Sonali Chaudhary
|
Independent Director
|
Nil
|
NA
|
Mr. Veepin Thokal
|
Independent Director
|
1000
|
0.00
|
8. FINANCE
Cash and cash equivalent as at 31st March, 2018 was Rs. 4662.68 lakhs. The Company continues to focus on judicious management of its Working Capital. Receivables, Inventories and other Working Capital parameters were kept under strict check through continuous monitoring.
8.1 DEPOSITS
The Company has not accepted deposit falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
8.2 PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.
8.3 TRANSFER TO RESERVES
The Board do not propose to transfer any amount to General Reserve or any other Reserves.
9. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
The criteria prescribed for the applicability of Corporate Social Responsibility under Section 135 of the Companies Act, 2013 is not applicable to the Company.
10. BUSINESS RISK MANAGEMENT
The main activities of the Company is retail stock broking through the network of branches and sub brokers, authorized persons. The Compliance Department ensures that various existing policies regarding registration of clients, risks relating to client level, dealing in penny stocks, exposure limit, brokerage rates, suspending/ closure of client's account etc. are in place in compliance with the Exchange Rules and Regulations so that business risk is minimized and there are no penal action by the Regulatory Authorities. The Company has taken adequate measures to secure interest of the clients. The Trader Terminal provided to the client, offer on line real time data such as ledger balance of stock and funds position etc. Company transfers clients' funds and securities to their designated bank and demat account and all receipt and payment from/to clients are through account payee cheque only and no cash payment/acceptance is permitted. Your Company's risk management system comprises of prudential norms, timely reporting and stringent controls. The various policies of the company, internal control systems ensures operational efficiency and mitigate risk. Technology is an integral part of the Company's business operations and hence to mitigate the risk to technology failure, your company has taken up steps like use of sophisticated firewalls to protect the IT infrastructure from hacking/data leakage and security breaches, multiple options for internet bandwidth and internet connectivity. The Client level risk in broking operations is managed through system.
Risks Management Committee: Though under Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, it is not mandatory for the Company to constitute Risks Management Committee, however, the Company has formed the Risks Management Committee. In the board meeting there is a formal discussion on identifying risk to the business and how to mitigate the same. The Board periodically reviews the company's financial and risk management policies, systems and framework and ensures that risk is minimized.
11. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System, commensurate with the nature of business, size, scale of its operations. The Company monitors and evaluates the efficacy and adequacy of internal control system, its compliance with operating systems, accounting procedures and other policies of the Company. Based on the report of Statutory Auditors as well as periodic internal audit function carried out by a firm of Chartered Accountant, corrective action in the respective areas is taken thereby strengthen the controls. The significant audit observations and corrective actions thereon are presented to the Audit Committee and the Board periodically. Also there is a full-fledged Compliance Department to ensure statutory compliances.
12. VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company has a vigil mechanism through a Whistle Blower Policy for Employees to deal with instance of fraud and mismanagement, if any. The details of the Whistle Blower Policy is explained in the Corporate Governance Report.
13. SUBSIDIARY COMPANY
The Company has one Wholly Owned Subsidiary Company, M/s. Joindre Commodities Ltd (JCL). The salient features of financial statement of the Subsidiary, pursuant to the first proviso to sub-section 3 of section 129 read with rule 5 of the Companies (Accounts) Rule 2014, in the Form AOC-1 is given below:
(Rs in Lakhs)
Sr.No
|
Particulars
|
Joindre Commodities Ltd
|
1
|
Reporting Period
|
April 2017 to March 2018
|
2
|
Reporting Currency
|
Rupees
|
3
|
Country
|
India
|
4
|
Exchange Rate
|
NA.
|
5
|
Share Capital
|
75.00
|
6
|
Reserves and Surplus
|
49.23
|
7
|
Total Assets
|
137.81
|
8
|
Total Liabilities
|
137.81
|
9
|
Investment other than Investment in subsidiary
|
0
|
10
|
Turnover
|
8.97
|
11
|
Profit before taxation
|
0.16
|
12
|
Provision for Taxation
|
0.05
|
13
|
Profit after taxation
|
0.11
|
14
|
Proposed Dividend
|
Nil
|
14. DIRECTORS/KEY MANAGERIAL PERSONS
Mr. Paras Bathia (DIN No. 00056197) and Mr. Sunil Jain (DIN No. 00025926), Whole Time Directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.
14.1 PERFORMANCE EVALUATION OF BOARD AND ITS' COMMITTEES
Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit Committee, Nomination and Remuneration Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.
14.2REMUNERATION POLICY
The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.
14.3MEETINGS
A calendar of Meetings is prepared and circulated in advance to the Directors.
During the year five Board Meetings and four Audit Committee Meetings were convened and held. The details of Board Meetings and various Committee Meetings are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013/SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
14.4 FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTOR
The Company keeps its Directors informed of the activities of the Company, its management and provides overall capital market perspective and the issues faced by the market. The details of familiarization programme is explained in the Corporate Governance Report and are also available on the Company's website under the head Investor Relations
15. DIRECTORS' RESPONSIBILITY STATEMENT
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 31st March, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
b) that such accounting policies have been selected and applied consistently and judgment 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 31st March, 2018 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 controls were in place and that the financial controls were adequate and were operating effectively.
f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
16. RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were on an arm's length basis and in the ordinary course of business. There are no materially significant related party transactions i.e. transactions exceeding ten per cent of annual consolidated turnover as per the last audited financial statements were entered by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. Accordingly the disclosure of related party transactions as required under Section 134(3) (h) of the Companies Act, 2013 in form AOC-2 is not applicable.
All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on yearly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are at arms' length and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website. The policy ensures that proper reporting, approval and disclosure process are in place for all transactions between the Company and the related parties.
17. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations.
18. AUDITORS
18.1 STATUTORY AUDITORS
M/s. Jigna Sheth & Associates, Chartered Accountants were appointed as Statutory Auditors of the Company at the Annual General Meeting held on 9th September 2017 for a term of five consecutive years, subject to ratification of appointment by members at every Annual General Meeting. In view of the amendment to Section 139 of the Companies Act, 2013, the Company is not required to ratify the reappointment of the Statutory Auditors at every Annual General Meeting. Hence the item of ratification of re-appointment of Statutory Auditor is not required to be considered at the ensuing Annual General Meeting. In view of the same M/s. Jigna Sheth & Associates, Chartered Accountants will continue to act as Statutory Auditors of your Company for the financial year 2018-19
The notes on the financial statement referred to in the Auditors Report are self-explanatory and do not call for any further comments. The Auditors Report does not contain any qualification, reservations or adverse remark.
18.2SECRETARIAL AUDIT
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. P. P. Shah & Co., Practicing Company Secretaries to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as "Annexure A". The Secretarial Audit Report does not contain any qualification, reservations or adverse remark.
19. COMPLIANCE OF SECRETARIAL STANDARDS
During the year under review, your Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
20. CORPORATE GOVERNANCE
The Corporate governance practices followed by the Company, together with a certificate from the Company's Auditors confirming compliance of the same, forms an integral part of this Report.
21. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company has been taking all the possible measures to conserve the energy and use and adopt best technology available in the market.
I) Energy Conservation:
In order to conserve the energy the Company has taken the following steps:
a) replacement of old computers and office equipment’s with power savings devices as and when required.
b) Switching of lights when not required.
c) Minimizing usage of Air conditioners
II) Technology absorption:
The Company has full-fledged IT Department which keeps abreast of technological advancement and try and adopt the same for day to day operations. The Company offers user friendly trading terminals and trading platforms to its clients. The Company has in place Wide Area Networking, high breed lease lines, use of Vsats in remote areas, Risk Management software etc..
III) There is no Foreign Exchange earnings and outgo during the year
22. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as “Annexure B”.
23. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The information relating to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as Annexure "C"
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, are not applicable to the Company as no Employee of the Company is in receipt of remuneration of Rs. 60,00,000/- p.a. or Rs. 5,00,000/- p.m.
24. CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company prepared in accordance with relevant Accounting Standards issued by the Institute of Chartered Accountants of India form part of this Annual Report.
25. LISTING OF SHARES
The Company's shares are listed on BSE Ltd., Mumbai and the Company has paid the Listing Fees for the same.
26. CAUTIONARY STATEMENT
Statements in the Board of Directors Report and the Management Discussion & Analysis describing the Company's objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company's operations include global economy, government regulations, tax laws, economic developments within the country and market sentiment.
27. INDUSTRY STRUCTURE AND DEVELOPMENTS
The main activity of the Company is retail broking through network of branches, sub-broker and authorized persons. The internet based trading facilities offered by the company is popular and widely used by the clients and viewers. The Company offers Research Report and financial updates to Individual Clients. The Company is also rendering Depository Services to its clients.
28. OPPORTUNITIES AND THREATS
The expectation of normal monsoon, coupled with Government's continued reforms will help the revival of the the economy and the Capital Market. However, due to high international oil prices and interest differentials may have an adverse impact on the inflow of capital.
29. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE
The Company has been rendering Capital Market Services and hence there is no separate segment reporting.
30. OUTLOOK
During the year under review, on account of the significant reforms launched by the Government like GST, Indian Bankruptcy Code and recapitalization packages, have led to the major revival of Indian Economy, thereby boosting the market sentiment and investors’ confidence.
However, in the last quarter of the year, on account of pressure on fiscal, current account deficit, rising crude oil prices and depreciation of rupee in terms of dollar, there was a setback. Further the rising interest rates, willful defaults and bank frauds, had severe impact on the business environment including the capital market during the period January-March 2018. The negative market sentiment had taken toll on mid cap and small cap stocks with the result more than 500 stocks have been corrected between 30% to 70% since their highs in January 2018.
During the current year, the expectation of normal monsoon coupled with Government's continued reforms and budgetary support and general elections, we hope it will further help the revival of the economy and the Capital Market. This will in turn help the company in terms of volume and profitability.
31. HUMAN RESOURCES
Your company has been able to employ and retain qualified professionals by offering the challenging work environment and compensation. The Company provides in house training to its employees. There were 74 employees as at 31-3-2018.
32. FORWARD LOOKING STATEMENT
The Statements made in this report describe the Company's objectives and projections that may be forward looking statements which are based on certain assumptions and expectations of future events. The Company's actual results, may differ materially from those projected in any such forward looking statements depending on economic conditions, government policies and decisions which are beyond the control of the Company.
33. SEXUAL HARASSMENT OF WOMEN AT WORK PLACE
As required under the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has formed a Committee and also adopted policy on prevention and redressal of grievance relating to sexual harassment of women at work place. There were nil complaints pending/received on sexual harassment during the year under review.
34. ACKNOWLEDGMENT
The Board wishes to place on records its appreciation to all its Shareholders, Customers, Bankers, Stock Exchange Authorities and Employees for the cooperation and contributions made by them at all levels.
By Order of the Board
Anil Mehta Subhash Agarwal
(Whole Time Director) (Whole Time Director)
Place : Mumbai
Date : May 30, 2018
Registered Office:
32 Raja Bahadur Mansion,
Ground Floor,
Opp. Bank of Maharashtra,
Mumbai Samachar Marg,
Fort, Mumbai - 400 023.
|