Your Directors have pleasure in presenting the 22nd Annual Report and the auditedaccounts of your Company for the financial year ended 31st March 2016.
A summary of financial results of the Company and its subsidiaries for the year ended31st March 2016 is given below:-
|Particulars || |
Standalone Financial Year
Consolidated Financial Year
| ||2015-16 ||2014-15 ||2015-16 ||2014-15 |
| ||(Rs. in lakh) ||(Rs. in lakh) ||(Rs. in lakh) ||(Rs. in lakh) |
|Total Income ||4114.33 ||3987.50 ||4296.73 ||4445.62 |
|Total Expenditure ||4003.66 ||3575.88 ||4157.77 ||3928.18 |
|Profit/ (Loss) before Interest Depreciation & Tax ||110.67 ||411.62 ||138.96 ||517.44 |
|Less : Interest and Finance Charges ||86.91 ||91.63 ||123.54 ||139.25 |
|Less : Depreciation and Amortisation ||31.75 ||46.14 ||42.56 ||53.98 |
|Profit/Loss (-) Before Tax Before Exceptional Item ||(7.99) ||273.85 ||(27.14) ||324.21 |
|Exceptional Item ||- ||- ||- ||- |
|Profit/Loss (-) Before Tax ||(7.99) ||273.85 ||(27.14) ||324.21 |
|Less Tax Expenses || || || || |
|- Current Tax ||6.35 ||17.05 ||6.65 ||17.08 |
|- Deferred Tax ||(2.36) ||66.77 ||0.27 ||86.12 |
|Profit/ (Loss) for the year ||(11.98) ||190.03 ||(34.06) ||221.01 |
|Add : Surplus brought forward from previous year ||1343.30 ||1182.49 ||1101.60 ||916.55 |
|Amount Available for Appropriation ||1331.32 ||1372.52 ||(1067.54) ||1137.56 |
|Less : Proposed Dividend on Equity Shares ||- ||9.97 ||- ||9.97 |
|Less : Corporate Tax on Proposed Dividend ||- ||2.03 ||- ||2.03 |
|Other Adjustment ||- ||17.24 ||- ||23.96 |
|Balance to Balance Sheet ||1331.32 ||1343.29 ||(1067.54) ||1101.60 |
FINANCIALS OF THE COMPANY ON THE STANDALONE BASIS :
Our total Income on a standalone basis increase to Rs.4114.33 lakhs from Rs.3987.50lakhs in the previous year at a growth rate of 3.18%. The Statement of Profit and Loss ofyour Company on standalone basis shows a loss after tax of Rs.11.98 lakhs (Previous Year:Profit of Rs.190.03 lakhs). The disposable profit is Rs.1331.32 lakhs (Rs.1372.52 lakhs)after taking into account the balance of Rs.1343.30 lakhs (Rs.1182.49 lakhs) broughtforward from the previous year.
AMOUNT TO BE CARRIED TO RESERVE :
The Company has not transferred any amount to the reserves (Previous year: Nil) duringthe current financial year. An amount of Rs.1331.31 Lakh is proposed to be retained in thestatement of profit & Loss against Rs.1343.29 lakh of last year.
The Directors do not recommend payment of any dividend during the financial year2015-16 in view of losses sustained during the year as against Rs.0.20 (i.e. 2%on anEquity Share of Rs.10/- each) for the year ended March 31 2015 paid last year.
SHARE CAPITAL :
The paid up Equity Share Capital as on 31st March 2016 was Rs.498.725 lacs. There hasnot been any change in the Equity Share Capital of the Company during the financial yearended 31st March 2016. During the year under review the Company has neither issuedshares with differential voting rights nor issued sweat equity or granted stock options.
Lohia Securities Limited (Standalone)
The standalone revenue for the year was Rs.4114.33 lakhs as compared to Rs.3987.50lakhs for the year ended 31st March 2015 resulting in annualized increase of 3.18%.Operating Profit (Earnings before interest depreciation and Corporate tax) for the periodended 31st March 2016 was Rs.110.67 lakhs as against Rs.411.62 lakhs for the year ended31st March 2015 with annualized decrease of 73.11%.
The Company has Loss before Tax of Rs.7.99 lakhs (as compared to last year's profit ofRs.273.85 lakhs) after meeting interest expenses of Rs.86.91 lakhs (last year's Rs.91.63lakhs) and depreciation of Rs.31.75 lakhs (last year's Rs.46.14 Lakhs) for the year ended31st March 2015. The Net Loss for the year was Rs.11.98 lakhs (as compared to last year'snet profit of Rs.190.03 lakhs).
Lohia Securities Limited (Consolidated)
The consolidated revenue of the Company for the year was Rs.4296.73 a decrease of3.35% as compared to previous year. There was decrease in the Brokerage Income InterestIncome and Receipt of DP division.
The Net Group Loss after tax was Rs.34.06 lakhs as against profit of Rs.221.01 lakhs oflast year.
Summary of Consolidated Financial Results of the company & its subsidiaries are asbelow:
Subsidiary/Joint Venture/Associate Companies
As on 31st March 2016 Lohia Securities Limited has four 100% subsidiaries. Details oftheir business and operations are given below:-
Trade City Securities Private Limited has a Trading Membership of NSE in Capital andF&O Segment and Trading Membership of BSE in Capital and F&O Segment. It reporteda net loss of Rs.12.43 lakhs compared to previous year's net profit of Rs.17.89 lakhs.
Trade City Commodities Private Limited is a member of NCDEX MCX National Spot NCDEXSpot and ICEX and is engaged in commodity trading and is registered with SEBI/FMC. TheCompany had a net loss after tax of Rs.1.07 lacs against last year's Net Loss of Rs.4.73lakhs.
Trade City Real Estate Private Limited is engaged in property and real estate business.It is also investing surplus moneys in shares and securities. The Company has incurred netloss of Rs.17.89 lakhs compared to net loss of Rs.8.36 lakhs of last year.
Trade City Barter Private Limited is a non-banking finance company and is engaged ininvestment and financing activities. The Company has earned a net profit of Rs.9.32lakhscompared to last year's net profit of Rs.26.16 lakhs.
Daadi Stock Broking Private Limited is an Associate Company as per the Companies Act2013. The Company does not have any joint venture Company as per the Companies Act 2013.
In accordance with Section 129(3) of the Companies Act 2013 and Clause 32 of theListing Agreement the consolidated financial statements of the Company and all itssubsidiary companies have been prepared and duly audited by the auditors and form part ofthe Annual Report. A statement containing salient features of the financial statements ofthe subsidiary is also included in the Annual Report.
The Company will make available the Annual Accounts of the Subsidiary companies and therelated detailed information to any member of the Company who may be interested inobtaining the same. The annual accounts of the subsidiary companies will also be kept openfor inspection at the Registered Office of the Company and that of the respectivesubsidiary companies. The Consolidated Financial Statements presented by the Companyinclude the financial results of the subsidiary companies.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report forms an integral part of this Report andgives details of the overall industgry structure dev elopments opportunities threatsperformance and state of affaris of the Company's business internal controls and theiradequacy risk management system and is annexed as Annexure-A forming part of theReport.
DIRECTORS RESPONSIBILITY STATEMENT :
Pursuant to the requirement under Section 134(3)(c) read with Section 134(5) of theCompanies Act 2013 with respect to Directors Rs.Responsibility Statement your directorshereby confirm that:
i) In the preparation of the annual accounts applicable accounting standards have beenfollowed along with proper explanation relating to material departures.
ii) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at the end of the financial year andof the loss of the company for that period;
iii) The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv) The Directors have prepared the annual accounts on a going concern basis;
v) The Directors have laid down an adequate system of Internal financial controls to befollowed by the Company and such internal financial controls are adequate and operatingefficiently; and
vi) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and were operating effectively.
ADEQUACY OF INTERNAL FINANCIAL CONTROL :
The Company has designed and implemented a process driven framework for internalfinancial controls within the meaning of the explanation of Section 134(5)(e) of theCompanies Act 2013. For the year ended 31st March 2016 the Board is of the opinion thatthe Company has sound Internal Financial Control commensurate with the nature and size ofits business operations and operating efficiently and no material weakness exists. TheCompany has a process in place to continuously monitor the same and identify gaps if anyand implement new and/or improved controls wherever the effects of such gaps would havematerial effect on the Company's operations.
PUBLIC DEPOSITS :
During the Financail Year 2015-16 the Company has not accepted any deposit within themeaning of Section 73 and 76 of the Act read with the Companies (Acceptance of Deposits)Rules 2014.
DIRECTORS AND KEY MANAGERIAL PERSONNEL :
The terms of appointment of Shri Rajesh Kumar Bajaj as Managing Director of the Companyexpired on 23rd September 2015. However he was re-appointed as a Director of the Companyat the last Annual General Meeting of the Company as a retirable director. The Boardplaces on record it's appreciation of the immense contribution by Shri Rajesh Kumar Bajajas Managing Director of the Company.
Ms. Sarita Ojha was appointed as an Independent Director at the last AGM held onSeptember 26 2015 for a period of five years with effect from March 30 2015.
In accordance with the provision of Section 152 of the Companies Act 2013 Rulesframed thereunder and Articles of Association of your Company Mr. Hari Kishan LohiaDirector is due to retire by rotation at the ensuing Annual General Meeting and beingeligible offers himself for re-appointment. Your Board is of the opinion that continuedassociation of Mr. Hari Kishan Lohia with the Board will be of immense benefit to yourCompany and therefore recommends his re-appointment. In terms of Section 102 of theCompanies Act 2013 Regulation 36 of the SEBI (Listing Obligation and DisclosureRequirements) regulations 2015 and Secretarial Standards on General Meeting (SS-2) issuedby the Institute of Company Secretaries of India brief profiles of Mr. Hari Kishan Lohiahave been annexed to the Notice convening 22nd Annual General Meeting of the members ofthe Company and the same form an integral part of this Annual Report.
DECLARATIONS GIVEN BY INDEPENDENT DIRECTORS :
The Company has received Declaration of Independence as stipulated under Section 149(7)of the Companies Act 2013 from Independent Directors confirming that he/she is notdisqualified from appointing/continuing as independent directors.
BOARD MEETINGS :
The Board meets at regular intervals to discuss and decide on the Company's policiesand strategy apart from other Board matters. During the financial year 2015-16 sevenboard meetings were held on May 28 2015 June 20 2015 August 14 2015 September 262015 November 14 2015 December 19 2015 and February 14 2016. The gap between the twoboard meetings did not exceed 120 days.
NOMINATION AND REMUNERATION POLICY
The Board has adopted a Nomination and Remuneration Policy recommended by Nominationand Remuneratiojn Committee in term of provision of Section 178 of the Companies Act2013. The Nomination and REmunation Policy has been annexed to this Report as Annexure- B.
EVALUATION OF THE BOARD OF DIRECTORS
The Nomination and Remuneration Committee of the Board has formulated and laid downcertain criteria for annual evaluation of Directors pursuant to provisions of Section 178of the Companies Act 2013 and Listing Regulations and as per requirements of Section 134of the Act are disclosed below:-
A. The Board shall evaluate the roles functions duties of theIndependent Directors of the Company. Each Independent Directors shall be evaluated by allother Directors but not by the Director being evaluated. The Board shall also review themanner in which Independent Directors follow guidelines of professional conduct asspecified in Schedule IV by the Independent Director shall also be reviewed by the Board.
B. Performance review of all the Non-Independent Directors of the Company on thebasis of the activities undertaken by them expectations of the Board andlevel of participation.
C. Performance review of the Chairman of the Company in terms of the level ofcompetence of Chairman in steering the Company.
D. The review and assessment of the flow of information by theCompany to the Board and the manner in which deliberations take place the manner ofplacing Agenda and contents therein.
E. The review of the performance of Directors individually its own performance aswell as evaluation of workings of its Committee shall be carried out by the Board.
F. On the basis of performance evaluation it shall be determined by theNomination and Remuneration Committee and Board whether to extend orcontinue the terms of appointment of Independent Director subject to all other applicablecompliances.
COMMITTEES OF DIRECTORS :
Your Company has five Committees of the Board viz.
1. Audit Committee
2. Stakeholders Rs.Relationship Committee
3. Nomination and Remuneration Committee
4. Risk Management Committee
5. Independent Directors Committee
Details of all the Committees alongwith their composition terms of reference andmeetings held during the year are provided in "Report on Corporate Governance"forming part of the Annual Report.
STATUTORY AUDITORS :
M/s. Patni & Co. Chartered Accountants who are the Statutory Auditors of theCompany hold office in accordance with the provisions of the Act for a period of threeyears viz. financial years 2014-15 2015-16 and 2016-17 from the conclusion of20th Annual General Meeting until the conclusion of the 23rd Annual General Meeting i.e.upto financial year 2016-17. As per Section 139(2) of the Act and the applicableRules of the Act the appointment of the Statutory Auditors needs to be ratified bythe members at every Annual General Meeting. Accordingly the members are requested toratify the appointment of the statutory Auditor at Twenty-second Annual General Meeting.
SECRETARIAL AUDIT :
In terms of the provisions of Section 204 of the Companies Act 2013 read with Rule 9of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 aSecretarial Audit Report in the prescribed format obtained from a Company Secretary inpractice is required to be annexed to the Board's Report. The Secretarial Audit Reportissued by Ms. Poonam Mundhra Company Secretary in Practice is attached as Annexure-Cto this Board Report. The Secretarial Auditors Rs.Report to the shareholders does notcontain any qualification.
QUALIFICATION RESERVATION OR ADVERSE REMARK IN STATUTORY AUDIT REPORT AND SECRETARIALAUDIT REPORT:
There is no qualification reservation or adverse remark made by the StatutoryAuditors in their Auditors Rs.Report to the Financial Statements or by the SecretarialAuditor in its Secretarial Audit Report for the financial year ended March 312016.
REPORTING OF FRAUD :
The Auditors of the Company have not reported any fraud as specified underSection 143(12) of the Companies Act 2013.
DISCLOSURE OF REMUNERATION :
The details of remuneration as required to be disclosed under the Companies Act 2013and the rules made thereunder are given in Annexure forming part of the Board Report.None of the employees of the Company is in receipt of remuneration exceeding Rs.5 lakh permonth or Rs.60 lakh per annum.
COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND ANNUAL GENERAL MEETINGS :
The Company has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India on Board Meeting and Annual General Meeting.
CORPORATE SOCIAL RESPONSIBILITY :
The provision of Section 135 of the Companies Act 2013 read with Companies (CorporateSocial Responsibility Policy) Rules 2014 are not applicable to the Company since it isnot fulfilling any of the stipulated requirements of net-worth turnover and net profits.
RISK MANAGEMENT :
The Company has a well defined risk management framework in place. Further it hasestablished procedures to periodically place before the Board the risk assessment andmanagement measures. The details of the risks faced by the Company and the mitigationthereof are discussed in detail in the Management Discussion and Analysis report that formpart of the Annual Report.
REPORT ON CORPORATE GOVERANANCE
In compliance with Regulation 34 of the SEBI (Listing Obligations and Di9sclosureRequirements) Regulation 2015 a Report on Corporate Governance for the year under reviewtogether with the Auditors Certificate thereon is annexed as Annexure - D formingpart of the Report.
PARTICULARS OF EMPLOYEES AND RELATED INFORMATION :
The particulars of the employees pursuant to the provisions of Section 197(12) of theCompanies Act 2013 read with Rule 5(2) and Rule 5(3) of the Appointment and Remunerationof Managerial Personnel) Rules 2014 are not given since none of the employees are inreceipt of a remuneration in excess of the prescribed limit. Disclosure pertaining toremuneration and other details as required under section 197(12) of the Companies Act2013 read with Rules 5(1) of the Appointment and Remuneration of Managerial Personnel)Rules 2014 are provided in Annexure-E.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS :
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the financial statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WIH RELATED PARTIES :
A policy on Materiality of Related Party Transactions and dealing with related part hasbeen adopted by the Board of Directors and the said policy is posted at the Company'swebsite at www.lohiasecurities.com .
EXTRACT OF ANNUAL RETURN :
Pursuant to the requirement under section 92(3) and Section 134(3) of the Act read withRule 12 of the Companies (Management and Administration) Rules 2014 an extract of AnnualReturn in prescribed Form MGT-9 is given in the Report as Annexure-F.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS/OUTGO:
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo as stipulated under Section 134 of the Companies Act 2013 read withthe Companies Accounts Rules 2014 is annexed to this report as "Annexure-G.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY :
As per the provisions of Section 177(9) of the Companies Act 2013 the Company isrequired to establish an effective Vigil Mechanism for directors and employees to reportgenuine concerns.
The Company has a Whistle-blower Policy in place to encourage and facilitate employeesto report concerns about unethical behaviour actual/ suspected frauds and violation ofCompany's Code of Conduct Policy. The Policy has been suitably modified to meet therequirements of Vigil Mechanism under the Act. The policy provides for adequate safeguardsagainst victimization of persons who avail the same and provides for direct access to theChairperson of the Audit Committee. The Audit Committee of the Company oversees theimplementation of the Whistle Blower Policy.
The Company has disclosed information about the establishment of the Whistle BlowerPolicy on its website www. lohiasecurities.com. During the year no personal has beendeclined access to the Audit Committee wherever desired.
PROTECTION OF WOMEN AT WORKPLACE :
The Company has formulated a policy on "Protection of Women's Rights atWorkplace" as per the provision of the Sexual Harassment of Women as Workplace(Prevention Prohibition & Redressal) Act 2013. This has been widely disseminated.There were no cases of sexual harassment received by the Company in 2015-16.
DETAILS OF SIGINIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS :
During the year under review there were no material and significant orders passed bythe regulators or courts or tribunals impacting the going concerns status and theCompany's operations in future.
LISTING AGREEMENT :
The Securities and Exchange Board of India (SEBI) on September 2 2015 issued SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 with the aimconsolidate and streamline the provisions of the Listing Agreement for different Segmentsof Capital Markets to ensure better enforceability. The said Regulations were effectivefrom December 1 2015. Accordingly all Listed entities were required to enter into theListing Agreement within 6 months from the effective date. The Company entered intoListing Agreement with The Calcutta Stock Exchange Limited and BSE Limited duringFebruary 2016.
Your Board acknowledges the support and co-operation received from all its stakeholdersas well as regulatory authorities as they endevours to create an enabling environment forindustry and commerce to prosper. The Directors express their sincere gratitude to thecooperation and support received from shareholders customers business associatesbankers SEBI and other regulatory and government authorities.
Your directors thanks all the valued clients sub-brokers shareholders banksfinancial institutions stock exchanges depositories and other stake holders for theirpatronage and support and take this opportunity to express their appreciation of thededicated and committed team of employees of the Company.
| || |
For and on behalf of the Board of Directors
| ||Sameer Bajaj ||Sudheer Kumar Jain |
|Kolkata 13th August 2016 ||Chairman ||Whole-time Director |
CONSERVATION OF ENEGY TECHNOLOGY ABSORPTION AND FORIGN EXCHANGE EARNINGS AND OUTGO
Section 134 of the Companies Act 2013 read with Companies Accounts) Rules 2014
A. CONSERVATION OF ENERGY
The Company is engaged in proving securities trading and financial services and henceits operations do not account for substantial energy consumption. Accordingly the Companyis not required to furnish information in Form A under the head "Conservation ofEnergy" under Section 134 of the Companies Act 2013 read with Companies (Accounts)Rules 2014. However the Company is taking all possible measures to conserve energy.Several environment friendly measures to conserve energy have adopted by the Company suchas:
Power shutdown of idle monitors
Minimising air-conditioning usage
Shuffing off all the lights when not in use.
Educating and making employees aware to save power.
B. TECHNOLOGY ABSORPTION
Form B for disclosure of particulars with respect to absorption.
Research and Development (R&D):
|1. Specific areas in which R&D carried out by the Company. ||The Company is engaged in providing securities trading and financial services and so there were no activities in the nature of research and development |
|2. Benefits derived as a result of the above R&D ||Nil |
|3. Future Plan of action ||Nil |
|4. Expenditure on R&D: || |
|(a) Capital ||Nil |
|(b) Recurring ||Nil |
|(c) Total ||Nil |
|(d) Total R&D expenditure as a percentage of total turnovers ||N.A. |
|Technology Absorption Adaptation and Innovation: || |
|1. Efforts in brief made towards technology absorption adaptation and innovation ||The management keeps itself abreast of the technological advancements in the industry and ensures continues and sustained efforts towards absorption as well as development of the same to meet business needs and objectives |
|2. Benefits derived as a result of the above efforts e.g. Product improvement cost reduction product development product substitution ||The technological absorption has resulted in improvement in services. However the benefits derived from the technological advancements are not quantifiable. |
|3. In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year) following information may be furnished. || |
|a) Technology imported ||Nil |
|b) Year of Import ||Not Applicable |
|c) Has technology been fully utilized ||Not Applicable |
|d) If not fully absorbed areas where this has not taken place reasons therefore and future plans of action. ||Not Applicable |
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
During the period under review the Company's foreign exchange earnings and outgo wasRs.Nil.