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Sumedha Fiscal Services Ltd.

BSE: 530419 Sector: Financials
NSE: N.A. ISIN Code: INE886B01012
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OPEN 44.10
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VOLUME 42784
52-Week high 45.15
52-Week low 13.20
P/E 9.21
Mkt Cap.(Rs cr) 34
Buy Price 41.80
Buy Qty 5.00
Sell Price 42.00
Sell Qty 4.00
OPEN 44.10
CLOSE 43.75
VOLUME 42784
52-Week high 45.15
52-Week low 13.20
P/E 9.21
Mkt Cap.(Rs cr) 34
Buy Price 41.80
Buy Qty 5.00
Sell Price 42.00
Sell Qty 4.00

Sumedha Fiscal Services Ltd. (SUMEDHAFISCAL) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the Twenty-Seventh Annual Report together withthe Audited Financial Statements for the year ended March 31 2016.

Financial Highlights (Rs. in Lacs)
Year ended
31.03.2016 31.03.2015
Total Income 1174.28 1805.99
Cash Profit 200.91 438.18
Less : Depreciation 47.58 75.05
Profit before tax 153.33 363.13
Less : Provision for taxation 47.14 120.25
Add / (Less) : Deferred Tax (5.11) 10.78
Profit after tax 101.08 253.66
Add : Surplus brought forward 2012.91 1841.56
Add / (Less) : Adjustment for Earlier years (5.41) (5.43)
Balance available for appropriation 2108.58 2089.79
APPROPRIATION
Provision for Dividend (Including Dividend Tax) 48.05 76.88
Balance carried to Balance Sheet 2060.53 2012.91

Operational Review

In 2015-16 your Company’s total Income from Operations stood at Rs. 1094.00 lacsas against Rs. 1704.60 lacs during the previous year a decrease of 35.82% over last year.Your Company continued its focus on fee based activities (Investment Banking) and incometherefrom was Rs. 694.98 lacs as against Rs. 845.47 lacs during the previous yearrecording 17.80% decline due to adverse market condition. It continues to be the thrustarea for the Company.

Income from Capital Market Operation for the year has been Rs. 229.80 lacs as againstRs. 192.81 lacs during the previous year an increase of 19.18% over last year.

Income from Other Sources was at Rs. 80.28 lacs as against Rs. 101.38 lacs during theprevious year. There has not been any change in the nature of business of the Company.

FINANCE & ACCOUNTS

Your Company prepares its financial statements in compliance with the requirements ofthe Companies Act 2013 and applicable Accounting Standards issued by the Institute ofChartered Accountants of India. The financial statements have been prepared on historicalcost basis. The estimates and judgments relating to the financial statements are made on aprudent basis so as to reflect in a true and fair manner the form and substance oftransactions and reasonably present the Company's state of affairs profits and cash flowsfor the year ended March 31 2016.

DIVIDEND & RESERVES

Taking into consideration the overall profitability position the Board of Directors ispleased to recommend a dividend of 50 paise per share (5%) for the year ended March 312016 subject to the approval of the Members at the Annual General Meeting.

During the year under review Rs. 20505/- was transferred to General Reserve.

EMPLOYEE STOCK OPTION SCHEME

Details of the shares issued under SFSL Employees Stock Option Scheme (ESOP Scheme) asalso the disclosures in compliance with Section 62 of Companies Act 2013 and Rule 12 ofCompanies (Share Capital and Debentures) Rules 2014 and SEBI (Share Based EmployeeBenefits) Regulations 2014 are set out in the Annexure – I to this Report.Pursuant to approval of Members (on March 24 2011) through Postal Ballot the Companyadopted the SFSL Employee Stock Option Scheme 2011. Accordingly the employees of theCompany (including its subsidiary) are eligible for grant of conditional rights to receiveEquity Shares (Rs. 10/- each) at an issue price of Rs. 11/- each. The grant will vest onlyon fulfillment of conditions as contained in the ESOP Scheme. The ESOP Scheme is subjectto statutory restrictions as applicable. No share or right of entitlement has been issuedthereunder during the year under review.

SHARE CAPITAL

The Paid-up Equity Share Capital as at March 31 2016 stood at Rs. 79844240/-.During the year under review the Company has not issued shares with differential votingrights nor has granted any stock options or sweat equity. As on March 31 2016 none ofthe Directors of the Company hold instruments convertible into equity shares of theCompany.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In terms of requirements of Regulation 34 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (SEBI LODR) a Management Discussion andAnalysis Report is attached Annexure – II forming part of this Report.

REPORT ON CORPORATE GOVERNANCE

In terms of requirements of Regulation 34 of the SEBI LODR a Report on CorporateGovernance together with Auditors’ Certificate regarding compliance of Conditions ofCorporate Governance are attached as Annexure - III and Annexure - IVforming 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 Regulation24 of the SEBI LODR Consolidated Financial Statements of the Company and its Subsidiaryand Associate Companies prepared in accordance with the applicable Accounting Standardsissued by The Institute of Chartered Accountants of India are appended to the AnnualReport. There has not been any addition or cessation or change in the Subsidiary andAssociate Companies during the year under review. The Company is not having any jointventure. Accordingly a statement in Form AOC-1 is attached to the Financial Statements ofthe 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 Companyand can be accessed at http://www.sumedhafiscal.com/ material_subsidiary.pdf.

The performance of the subsidiary and associate companies are summarized below for yourinformation.

SFSL Commodity Trading Pvt. Ltd. - Subsidiary

During the year the Company recorded Total Revenue of Rs. 1559304/- (previous yearRs. 1386547/-) and Net Profit of Rs. 98487/- for the year ended 31st March 2016(Previous Year : Rs. 300725/-).

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. 623040/- (previous year Rs.326397/-) and Net loss ofRs. 1089191/- for the year ended 31st March 2016 againstprofit in the Previous Year of Rs. 210861/-.

The Company continues to explore growth opportunities.

SFSL Insurance Advisory Services Pvt. Ltd.

During the year the Company recorded Total Revenue of Rs. 124960/- (previous year Rs.238086/-) and Net Profit of Rs. 64978/- for the year ended 31st March 2016 (PreviousYear: Rs. 64430/-).

The Company continues to explore growth opportunities.

SFSL Risk Management Services Pvt. Ltd.

During the year the Company recorded Total Revenue of Rs. 154432/- (previous year Rs.162760/-) and Net Profit of Rs. 60577/- for the year ended 31st March 2016 (PreviousYear of Rs. 36054/-).

The Company continues to explore growth opportunities.

US Infotech Pvt. Ltd.

During the year the Company recorded Total Revenue of Rs. 2198931/- (previous yearRs. 1962269/-) and Net Profit of Rs. 746187/- for the year ended 31st March 2016(Previous Year : Rs. 471225/-).

The Company continues to explore growth opportunities.

CORPORATE SOCIAL RESPONSIBILITY

The Company is not yet required to comply to with the requirement associated withSection 135 of the Companies Act 2013.

DIRETORS’ RESPONSIBILITY STATEMENT

To the best of knowledge and belief and according to the information and explanationsobtained by them your Directors make the following statement in terms of Section134(3)(c) of the Companies Act. 2013: (i) that in the preparation of the Annual Accountsfor the year ended March 31 2016 the applicable accounting standards have been followedand there are no material departure; (ii) and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company as at March 31 2016 and profits of the Company for theyear ended on that date; (iii) that Directors have taken proper and sufficient care forthe maintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; (iv) the annual accounts have been prepared on agoing concern basis; (v) that the Directors had laid down internal financial controls tobe followed by the Company and that such internal financial controls are adequate and wereoperating effectively; and (vi) the Directors have devised proper systems to ensurecompliance with the provisions of all applicable laws and that such systems were adequateand operating effectively.

DIRECTORS

The Board of Directors had on the recommendation of Remuneration and NominationCommittee re-appointed Mr. Bhawani Sankar Rathi as "Wholetime Director" of theCompany for a period of 3 (three) years with effect from April 1 2016 subject toapproval of the Shareholders at the forthcoming Annual General Meeting (AGM). Inaccordance with the provisions of Section 152 of the Companies Act 2013 and theCompany’s Articles of Association Mr. Vijay Maheshwari Director retire by rotationat the forthcoming Annual General Meeting and being eligible offer himself forre-appointment.

The Company has duly received Declarations from all the Independent Directors pursuantto Section 149(6) & (7) of the Companies Act 2013.

NUMBER OF MEETINGS OF THE BOARD

The details of the number of meetings of the Board held during the Financial Year 2015-16 form part of the Corporate Governance Report.

KEY MANAGERIAL PERSONNEL (KMP)

The following are the Key Managerial Personnel of the Company:

Name Designation
Mr. Bhawani Sankar Rathi Wholetime Director
Mr. Deb Kumar Sett Company Secretary
Mr. Girdhari Lal Dadhich Chief Financial Officer

The Board at its meeting held on May 28 2016 has appointed Mr. Girdhari Lal Dadhich asthe "Chief Financial Officer" of the Company. Mr. Dadhich has been with theCompany/group for more than 20 years and is having exposure of all the related functionsand transactions of the Company.

COMMITTEES OF THE BOARD

The Board of Directors has the following Committees:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders' Relationship Committee

The details of the Committees along with their composition number of meetings andattendance at the meetings are provided in the Corporate Governance Report.

BOARD EVALUAI1ON

The Board of Directors has carried out an annual evaluation of its own performanceBoard Committees and individual Directors pursuant to Section 134(3)(p) of the of the Actand Reg. 17(10) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. The performance of the Board was evaluated by the Board after seeking inputs fromall the Directors on the basis of the criteria such as the Board composition andstructure effectiveness of Board processes information and functioning etc.

The performance of the Committees was evaluated by the Board after seeking inputs fromthe Committee members on the basis of the criteria such as the composition of Committeeseffectiveness of Committee meetings etc. The Board and the Nomination and RemunerationCommittee ("NRC") reviewed the performance of the individual Directors on thebasis of the criteria such as the contribution of the individual director to the Board andCommittee meetings like preparedness on the issues to be discussed meaningful andconstructive contribution and inputs in meetings etc. In addition the Chairman was alsoevaluated on the key aspects of his role.

In the separate meeting of Independent Directors performance of non-independentDirectors performance of the Board as a whole and performance of the Chairman wasevaluated taking into account the views of executive director and non-executivedirectors. The same was discussed in the board meeting that followed the meeting of theIndependent Directors at which the performance of the Board its Committees andindividual Directors was also discussed.

LOANS GUARANTEES OR INVESTMENTS

Details of Loans Guarantees and Investments covered under the provisions of Section186(4) of the Companies Act 2013 [the Act] are provided in the Notes to FinancialStatements.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a Whistle Blower Policy to report genuine concerns or grievances. TheWhistle Blower Policy has been posted on the website of the Companyhttp://www.sumedhafiscal.com/whistle_blower_policy.pdf.

REMUNERATION AND NOMINATION POLICY

The Board of Directors has framed a policy which lays down a framework in relation toremuneration of Directors Key Managerial Personnel and Senior Management of the Company.This policy also lays down criteria for selection and appointment of Board Members. Thedetails of this policy has been posted on the website of the Companyhttp://www.sumedhafiscal.com/remuneration_policy.pdf.

The policy on Director’s appointment and remuneration including criteria fordetermining qualifications positive attributes independence of Director and alsoremuneration for Key Managerial Personnel and other employees forms part of CorporateGovernance Report of this Annual Report.

RELATED PARTY TRANSACTIONS

All transactions entered with Related Parties for the year under review were on arm'slength basis and required particulars such transactions are disclosed in form AOC-2 interms of Section 134 of the Companies Act 2013. Further there are no material relatedparty transaction during the year. All Related Party Transactions are placed before theAudit Committee as also to the Board for approval on a quarterly basis. There has not beenany Omnibus approval for any such transaction. The Policy on Related Party Transactions asapproved by the Board of Directors has been uploaded on the website of the Companyhttp://www.sumedhafiscal.com/policy_on_rpt.pdf.

PARTICULARS OF CONTRACTS/ARRANGEMENTS WITH RELATED PARTIES

The particulars of Contracts or Arrangements made with related parties pursuant tosubsection (1) of Section 188 of the Companies Act 2013 furnished in Form AOC -2 isattached to this Report as Annexure - V.

In line with the requirements of the Companies Act 2013 and Listing Regulations yourCompany has formulated a Policy on Related Party Transactions which is also available onhttp://www.sumedhafiscal.com/ policy_on_rpt.pdf. The Policy intends to ensure that properreporting approval and disclosure processes are in place for all transactions between theCompany and Related Parties.

DEPOSITS

The Company has neither accepted nor renewed any deposits during the year. No deposithas remained unpaid or unclaimed at the end of the year under review.

GOING CONCERN STATUS

No significant and material orders have been passed by the Regulators or Courts orTribunals impacting the going concern status of the Company and its operation in thefuture.

MATERIAL CHANGES AND COMMITMENTS

There has not been any material change and commitment affecting the financial positionof the Company occurred between the end of the Financial Year 2015-16 and the date of theReport.

COMPLIANCE SYSTEM

Based on the Reports of Statutory Compliance from Departmental Heads/ResponsibilityCentres as aforesaid the Company Secretary issues Certificate under Section 205 of theCompanies Act 2013 (Act) and Rules made thereunder. The Certificate is also endorsed bythe Wholetime Director and Chief Financial Officer of the Company. The status of StatutoryCompliance is verified by the Internal Auditors and Secretarial Auditors pursuant toSections 138 and 204 of the Act.

ANNUAL RETURN

The extract of Annual Return pursuant to the provisions of Section 92 of the CompaniesAct 2013 read with Rule 12 of the Companies (Management and Administration) Rules 2014in Form – MGT-9 is attached to this Report as Annexure - VI.

SECRETARIAL AUDIT

In terms of the requirements of Section 204 of the Companies Act 2013 the SecretarialAudit of the Company for the year ended 31st March 2016 was conducted by Mr. Babu LalPatni Company Secretary in Practice. The Secretarial Auditors’ Report is attached tothis Report as Annexure - VII and forms part of the Directors’ Report. Thereis no qualification or reservation or adverse remark or disclaimer made by the SecretarialAuditor in the Report.

COST AUDIT

The Company is not engaged in production of goods or providing services pursuant toSection 148 of the Act and therefore not required to comply with the requirementsthereunder.

AUDITORS AND AUDIT REPORT

Messrs. ARSK & Associates Chartered Accountants hold office as the Auditors ofthe Company upto the conclusion of the forthcoming Annual General Meeting and areeligible for re-appointment. The Company has received a letter from them to the effectthat their re-appointment if made would be within the prescribed limits under theCompanies Act 2013 and that they are eligible 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 yearended 31st March 2016. The Statutory Auditors have not reported any incident of fraud tothe 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 particularsrelating 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. Nil (previousyear Rs. 7.75 lacs) and Rs. 0.40 lac (previous year Rs. 0.94 lac) respectively.

RISK MANAGEMENT

The Company as an Intermediary registered with the Securities and Exchange Board ofIndia (SEBI) is required to comply with the prescribed risk management measures.Accordingly the quarterly status of various risks being faced by the Company and measuresfor mitigation thereof are placed before the Audit Committee and Board of Directors of theCompany for review and appropriate measures. Further details about the pertinent risksare contained the in the statement of Management Discussion and Analysis.

PARTICULARS OF EMPLOYEES

The ratio of the remuneration of each Director to the median employee’sremuneration and other particulars or details of employees pursuant to Section 197(12) ofthe Companies Act 2013 read with Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are attached to this Report as Annexure VIII.None of the employees of the Company is in receipt of remuneration coming under purview ofthe 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 InternalComplaints Committees. During the year no complaint regarding sexual harassment wasreceived by the said Committee.

APPRECIATION

We acknowledge our appreciation to Shareholders Bankers Regulators National StockExchange Multi-Commodity Exchange Bombay Stock Exchange and Clients for their continuedsupport. The Board also takes this opportunity to express its whole-hearted appreciationof the efforts put in by the employees at all levels. We look forward to the future withconfidence and stand committed to creating a brighter future for all shareholders.

On Behalf of the Board
Place: Kolkata Ratan Lal Gaggar
Date: 28th May 2016 Chairman

Annexure - I

Disclosure pursuant to Regulation 14 of Securities and Exchange Board of India (ShareBased Employee Benefits) Regulations 2014 as on 31st March 2016:

A. Relevant disclosures in terms of the 'Guidance note on accounting for employeeshare-based payments' issued by ICAI or any other relevant accounting standards asprescribed from time to time.

Equity settled stock options granted to employees pursuant to the Company’s stockoption schemes are accounted for as per the intrinsic value method prescribed by EmployeeStock Option Scheme and permitted by the SEBI guidelines 1999 and the Guidance Note onShare Based Payment issued by the Institute of Chartered Accountants of India (ICAI). Theintrinsic value of the option being excess of market value of the underlying share at thedate of grant of option over its exercise price is recognised as deferred employeecompensation with a credit to Employees Stock Options Outstanding Account. The deferredemployee compensation is amortized to Statement of Profit and Loss on straight line basisover the vesting period of the option. In case of forfeiture of option which is notvested amortised portion is reversed by credit to employee compensation expense. In asituation where the stock option expires unexercised the related balance standing to thecredit of the employees Stock Options Outstanding Account are transferred to the GeneralReserve.

B. Diluted EPS on issue of shares pursuant to all the schemes covered under theregulations shall be disclosed in accordance with 'Accounting Standard 20 - Earnings PerShare' issued by ICAI or any other relevant accounting standards as prescribed from timeto time: Rs. 1.20

C. Details related to Employee Stock Option Schemes (ESOS) of the Company:

Sr. No. Particulars ESOS - 2011
Stock options
i. A description of each ESOS that existed at any time during the year including the general terms and condition of each ESOS including -
a. Date of shareholder’s approval 24th March 2011
b. Total number of option approved under ESOS 348000
c. Vesting requirement Not earlier than one year and not more than three years from the date of grant of options.
d. Exercise price or pricing formula The Exercise Price has been the closing price of the Company’s Share on the Bombay Stock Exchange Ltd. (the ‘BSE’) on the day immediately preceding the date of Grant or the average price of the Company’s Share in the twenty six weeks preceding the date of Grant based on the daily Closing Price on the BSE or such other Price as may be determined by the Compensation Committee. Exercise Price: Rs. 11/- Three years from the date of vesting of options
e. Maximum term of options granted
f Source of shares Primary
g. Variation in terms of options Nil
ii. Method used to account for ESOS – Intrinsic or fair value
The Company has calculated the employee compensation cost using the intrinsic value method of accounting to account for options issued under the ESOS.
The intrinsic value of the stock option is Nil as the exercise price exceeds the market price on the date of the Grant. Therefore the Company has not recognized any expense in respect of Employee Stock Option during the Financial Year ended March 31 2016.
iii. Where the Company opts for expensing of the options using the intrinsic value of the options
The difference between the employee compensation cost so computed and the employee compensation cost that shall have been recognized if it had used the fair value of the options shall be disclosed Employee Compensation Cost:
intrinsic value based Rs. Nil
Fair value based Rs. Nil
Difference Rs. Nil
The impact of this difference N.A.
- On profits Net Profit Rs. 95.66 lacs
- On EPS Earnings per shares -
Basic Rs. 1.20
Diluted Rs.1.20
iv. Option (including options and restricted stock units) movement during the year:
Number of options outstanding at the beginning of the year 215800
Number of options granted during the year Nil
Number of options forfeited / lapsed during the year 12800
Number of options vested during the year 64800
Number of options exercised during the year Nil
Number of shares arising as a result of exercise of options Nil
Money realised by exercise of options (INR) if Scheme is implemented directly by the Company Nil
Loan repaid by the Trust during the year from exercise price received Not Applicable
Number of options outstanding at the end of the year 203000
Number of options exercisable at the end of the year 143000
v. Weighted-average exercise prices and weighted-average fair values of options
Weighted- average exercise prices :-
i. equal or exceed to market price of the stock -
ii. less than the market price of the Stock 11
Weighted-average fair values of options :-
i. equal or exceed to the market price of the stock -
ii. less than the market price of the stock. 8.68
vi. Employee wise details (name of employee designation number of options granted during the year exercise price) of options granted to
a. Senior Managerial Personnel Nil
b. Any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during that year Nil
c. Identified employee who were granted option during any one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant Nil
vii. A description of the method and significant assumptions used during the year to estimate the fair value of options including the following information
a. the weighted-average values of share price: Rs. 11.00
Range of exercise price: Rs. 11.00
expected volatility: 87%
expected option life: 3 years
expected dividends: 5%
the risk-free interest rate: 8.9%
and any other inputs to the mode -
b the method used and the assumptions made to incorporate the effects of expected early exercise Black – Scholes Method
c how expected volatility was determined including an explanation of the extent to which expected volatility was based on historical volatility The following factors have been considered: The Closing price of the Company’s shares on the Bombay Stock Exchange of India Limited (BSE) on the date previous to grant date. Adjustment of the aforesaid closing price for the expected dividend yield over the expected life of the options.
d whether and how any other features of the option grant were incorporated into the measurement of fair value such as a market condition Zero coupon Government Bond rate representing the risk free interest rate as on date of grant. Implied volatility of the Company’s stock price on BSE based on the price data of last one year upto the date of grant. Exercise price has been adopted as given by the Company.

Annexure - V

FORM AOC – 2

[Pursuant to clause (h) of sub-section (3) of section 134 of the Companies Act 2013and Rule 8(2) of the Companies (Accounts) Rules 2014]

Form for disclosure of particulars of contracts/ arrangements entered into by theCompany with the related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 including certain arms-length transactions under third provisothereof.

1. Details of contracts or arrangements or transactions not at arm’s lengthbasis:

Sl. No. Name of the related party and nature of relationship Nature of contracts / arrangements/ transactions Duration of the contracts/ arrangements/ transactions Salient features of contracts/ arrangements/ transactions including value if any Justification for entering into such contacts/ arrangements/ transactions Date of approval by the Board Amount paid as advance if any Date on which special resolution was passed in General meeting u/s.
(a) (b) (c) (d) (e) (f) (g) (h)
Not Applicable

2. Details of contracts or arrangements or transactions at arm’s lengthbasis:

Sl. No. Name (s) of the related party and nature of relationship Nature of contracts / arrangements/ transactions Duration of the contracts/ arrangements/ transactions Salient features of contracts/ arrangements/ transactions including value if any Justification for entering into such contacts/ arrangements/ transactions Date of approval by the Board Amount paid as advance if any Date on which special resolution was passed in General meeting u/s. 188(1st proviso)
(a) (b) (c) (d) (e) (f) (g) (h)
1. SFSL Commodity Trading Pvt. Ltd. (Subsidiary) Rent Agreement Subsisting arrangement – renewable Office space at Flat No. 7E Geetanjali Apartments 8B Middleton Street Kolkata - 700071; Rent - Rs. 900000/- per annum. Office space used by the Company Note 1 Nil Not applicable
2. Mr. Vijay Maheshwari Director Payment of Guarantee Commission Subsisting arrangement linked to renewal of credit facilities by Banks (Annual) Consideration for providing Personal Guarantee (as Director) to lending Bank towards credit facilities provided to the Company; Rs. 125000/- per annum. As per Bank’s terms of sanction Note 1 Nil Not applicable
3. Mr. Vijay Maheshwari Director Rent Agreement Subsisting arrangement – renewable Office space at Flat No. 6A Geetanjali Apartments 8B Middleton Street Kolkata – 700071; Rs. 600000/- per annum. Office space used by the Company Note 1 Nil Not applicable
4. Mr. Bijay Murmuria Director Payment of Guarantee Commission Subsisting arrangement linked to renewal of credit facilities by Banks (Annual) Consideration for providing Personal Guarantee (as Director) to lending Banks towards credit facilities provided to the Company; Rs. 125000/- per annum. As per Bank’s terms of sanction Note 1 Nil Not applicable
5. Superb Estates Services Pvt. Ltd. (Company in which Director is interested) Rent Agreement Subsisting arrangement – renewable Space at 5B Sarat Bose Road Kollkata – 700020; Rs. 240000/- per annum. Record storage space Note 1 Nil Not applicable
6. M/s. Maheshwari & Associates (Partnership Firm in which three Directors of the Company are Partners) Licence/ Tenancy Agreement Subsisting arrangement – renewable Office space at Flat No. 1/1C 8B Middleton Street Kolkata - 700 071; Rent - Rs. 420000/- per annum Vacant office space let out 17-May-14 Nil 13-Sep-14

Note 1 : Existing contracts/arrangements at the date of commencement of the Section 188of the Companies Act 2013 [i.e. April 1 2014]

Annexure - VII

FORM No MR-3

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2016

[Pursuant to section 204(1) of the Companies Act 2013 and Rule No. 9 of the Companies(Appointment and Remuneration of Personnel) Rules 2014]

To

The Members

Sumedha Fiscal Services Limited

6A Geetanjali 8B Middleton Street Kolkata -700071.

I have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by Sumedha Fiscal ServicesLimited (hereinafter called the company). Secretarial Audit was conducted in a mannerthat provided me a reasonable basis for evaluating the corporate conducts/statutorycompliances and expressing my opinion thereon.

Based on my verification of the Sumedha Fiscal Services Limited’s books papersminute books forms and returns filed and other records maintained by the company and alsothe information provided by the Company its officers agents and authorizedrepresentatives during the conduct of secretarial audit I hereby report that in myopinion the company has during the audit period covering the financial year ended on31st March 2016 complied with the statutory provisions listed hereunder and also that theCompany has proper Board processes and compliance mechanism in place to the extent in themanner and subject to the reporting made hereinafter: I have examined the books papersminute books forms and returns filed and other records maintained by Sumedha FiscalServices Limited ("the company") for the financial year ended on 31st March2016 according to the provisions of: i. The Companies Act 2013 (the Act) and the rulesmade thereunder; ii. The Securities Contracts (Regulation) Act 1956 (‘SCRA’)and the rules made thereunder; iii. The Depositories Act 1996 and the Regulations andBye-laws framed thereunder; iv. Foreign Exchange Management Act 1999 and the rules andregulations made thereunder to the extent of Foreign Direct Investment Overseas DirectInvestment and External Commercial Borrowings; v. The following Regulations and Guidelinesprescribed under the Securities and Exchange Board of India Act 1992 (‘SEBIAct’) a) The Securities and Exchange Board of India (Substantial Acquisition ofShares and Takeovers) Regulations 2011; b) The Securities and Exchange Board of India(Prohibition of Insider Trading) Regulations 1992. c) The Securities and Exchange Boardof India (Issue of Capital and Disclosure Requirements) Regulations 2009 - (Notapplicable during the year.) d) The Securities and Exchange Board of India (Employee StockOption Scheme and Employee Stock Purchase Scheme) Guidelines 1999 - (Not applicableduring the year.) e) The Securities and Exchange Board of India (Issue and Listing of DebtSecurities) Regulations 2008 - (Not applicable during the year.) f) The Securities andExchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations1993 regarding the Companies Act and dealing with client; g) The Securities and ExchangeBoard of India (Delisting of Equity Shares) Regulations 2009 - (Not applicable during theyear.) h) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998 - (Not applicable during the year.) vi. a) The Securities and Exchange Board of India(Depositories & Participants) Regulations 1996 b) The Securities and Exchange Boardof India (Merchants Bankers) Regulations 1992 c) The Securities and Exchange Board ofIndia (Stock Brokers & Sub Brokers) Regulations 1992 d) The Securities and ExchangeBoard of India (Portfolio Managers) Regulations 1993.

I have also examined compliance with the applicable clauses of the following: i.Secretarial Standards issued by The Institute of Company Secretaries of India. ii. TheListing Agreement entered into by the Company with BSE and CSE. iii. Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015.

During the period under review the Company has complied with the provisions of the ActRules Regulations Guidelines Standards etc. mentioned above subject to the followingobservations: Nil

I further report that -

The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The Whole TimeDirector of the Company has also been designated as the Chief Financial Officer. Thechanges in the composition of the Board of Directors that took place during the periodunder review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.

Majority decision is carried through while the dissenting members views if any arecaptured and recorded as part of the minutes.

I further report that there are adequate systems and process in the companycommensurate with the size and operations of the Company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.

I further report that during the Audit period that there was no specificevents/actions having a major bearing on the company’s affairs in pursuance of theabove referred laws regulations guidelines standards etc. referred to above.

BABU LAL PATNI
Company Secretary in Practice
Place: Kolkata Membership No. FCS 2304
Dated: 20th May 2016 Certificate of Practice No.: 1321

Note:

This report is to be read with our letter of even date which is annexed as Annexure - Aand forms an integral part of this report.

Annexure - A of Secretarial Audit Report

To

The Members

Sumedha Fiscal Services Limited

6A Geetanjali 8B Middleton Street Kolkata -700071.

My report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of theCompany. My responsibility is to be express on opinion on these secretarial records basedon our audit.

2. I have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theverification was done on test basis to ensure that correct facts are reflected insecretarial records. I believe that the processes and practices we followed provide areasonable basis of my opinion.

3. I have not verified the correctness and appropriateness of financial records andBooks of Accounts of the Company.

4. Where ever required I have obtained the Management representation about thecompliance of laws rules and regulations and happenings of events etc.

5. The compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of management. My examination was limited tothe verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability ofthe company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the company.

BABU LAL PATNI
Company Secretary in Practice
Place: Kolkata Membership No. FCS 2304
Dated: 20th May 2016 Certificate of Practice No.: 1321

Annexure - VIII

REMUNERATION AND OTHER SPECIFIED PARTICULARS OF EMPLOYEES

[Information pursuant to Section 197(12) of the Companies Act 2013 read with Rule 5 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014]

A. The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year (2015 – 2016) :

Sl.No. Name of the Directors Ratio to median remuneration
1. Mr. BHAWANI SANKAR RATHI 5.95

B. The percentage increase in remuneration of each director chief executive officerchief financial officer company secretary in the financial year:

Sl.No. Name of the Directors Salary for FY Salary for FY % increase in remuneration in the financial year
2014 - 2015 2015 - 2016
1 Mr. BHAWANI SANKAR RATHI Wholetime Director 1710000 1710000 NIL
3 Mr. DEB KUMAR SETT Company Secretary 657204 666564 1.42%

C. The percentage increase in the median remuneration of employees in the financialyear:

Sl.No. Median FY 2014 - 2015 FY 2015 - 2016 % increase in median remuneration in the financial year
1 Median Remuneration of employees 287502 287505 0.00%

D. The number of permanent employees on the rolls of Company: 66 employees as on31st March 2016 E. The explanation on the relationship between average increase inremuneration and Company performance:

The average increase of 9.30% in remuneration given in the Company was in-line with theaverage inflation of 4.91% in the year 2015 – 2016.

F. Comparison of the remuneration of the key managerial personnel against theperformance of the Company:

Aggregate remuneration of key managerial personnel (KMP) in FY 16 (Rs. Lacs) 23.67
Revenue (Rs. Lacs) 1174.28
Remuneration of KMPs (as % of revenue) 2.02
Profit before Tax (PBT) (Rs.Lacs) 153.33
Remuneration of KMP (as % of PBT) 15.44

G. Variations in the market capitalization of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year:

Particulars March 31 2016 March 31 2015 % Change
Market Capitalisation (Rs.Lacs) 1141.00 1101.00 3.63
Price Earnings Ratio 11.89 4.34 173.96

H. Percentage increase over decrease in the market quotations of the shares of theCompany in comparison to the rate at which the Company came out with the last publicoffer:

Particulars March 31 2016 20/03/1995 % Change
Rs. Rs.
Market Price (BSE) 14.30 10.00 43

I. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:

The average annual increase in the salary of employees other than the managerialpersonnel was around 9.61%. Average increase in the managerial remuneration for the yearwas 0.71%.

There are no exceptional circumstances of increase in KMP remuneration.

J. Comparison of each remuneration of the key managerial personnel against theperformance of the Company:

Mr. Bhawani Sankar Rathi (Wholetime Director) Mr. Deb Kumar Sett (Company Secretary)
Remuneration in FY 16 (Rs. Lacs) 17.10 6.67
Revenue (Rs. Lacs) 1174.28 1174.28
Remuneration as % of revenue 1.45 0.57
Profit before Tax (PBT) (Rs.Lacs) 153.33 153.33
Remuneration (as % of PBT) 11.15 4.35

* Annualised

K. The key parameters for any variable component of remuneration availed by thedirectors: Nil

L. The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year: NIL

M. Affirmation that the remuneration is as per Remuneration Policy of the Company :

The remuneration paid during the financial year ended 31st March 2016 is in term ofthe Remuneration Policy of the Company.

on behalf of the Board
Place: Kolkata Ratan Lal Gaggar
Date: 28th May 2016 Chairman