Essar Securities Ltd.
|BSE: 533149||Sector: Financials|
|NSE: N.A.||ISIN Code: INE143K01019|
|BSE 16:01 | 02 Dec||2.29||
|NSE 05:30 | 01 Jan||Essar Securities Ltd|
Essar Securities Ltd. (ESSARSECURITIES) - Director Report
Company director report
The members of Essar Securities Limited ("the Company")
The Directors present the 14th Annual Report of the Company together with its AuditedFinancial Statements for the financial year ended March 31 2019.
The financial highlights for the year under review are given below:
(Rs in lakhs)
FINANCIAL PERFORMANCE & STATE OF COMPANYS AFFAIRS
During the year under review the total income of the Company was Rs.100.54 lakhs asagainst Rs.16.23 lakhs in the previous financial year. The Company has incurred net profitof Rs.71.56 lakhs as against net loss of Rs.1016.63 lakhs in the previous financial year.
The Company's performance and outlook for the year under review has been discussed indetail in Management Discussion and Analysis which forms a part of this Report.
AMOUNT TRANSFERRED TO RESERVES
The Directors do not propose to transfer any amount to reserves for the financial yearended March 31 2019.
There was no change in the capital structure of the Company during the financial yearunder review. The paid up share capital as on March 31 2019 was Rs.142877540/-comprising of 14287754 Equity Shares of Rs.10/- each.
The Directors do not recommend any dividend for the financial year ended March 312019.
INVESTOR EDUCATION AND PROTECTION FUND
In terms of Section 124(5) of Companies Act 2013 the Company has transferredunpaid/unclaimed dividend amount aggregating to Rs.985302/- pertaining to the financialyear 2010-11 to the Investor Education and Protection Fund (IEPF) during the financialyear under review.
Pursuant to Section 124(6) of Companies Act 2013 read with Investor Education andProtection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 theCompany has transferred 525016 shares in respect of which the dividend mentionedaforesaid has remained unpaid or unclaimed for a period of seven consecutive years to IEPFdemat account during the financial year under review.
The members whose unclaimed dividends/shares have been transferred to IEPF may claimthe same by making an application to the IEPF Authority in Form No. IEPF-5 available on
DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
Mr. Somashekhar B. Malagi (DIN:07626139) continues to be Independent Director of theCompany.
Mr. Srikanth R. Venkatadriagaram (DIN:07923382) has been appointed as an AdditionalDirector (Independent) with effect from November 13 2018 to hold office upto the date offorthcoming 14th Annual General Meeting and is eligible to be appointed as an IndependentDirector of the Company. It is proposed to appoint Mr. Venkatadriagaram as an IndependentDirector not liable to retire by rotation for a period of 5 years. Accordingly approvalof members is being sought at the forthcoming 14th Annual General Meeting.
Mr. Godfrey Pimenta (DIN:06630502) ceased to be Independent Director of the Companyfrom the closure of business hours on November 13 2018. The Board of Directors places onrecord its appreciation for the valuable services rendered by Mr. Pimenta during histenure as an Independent Director of the Company.
Retirement by Rotation
Ms. Priyanka Oka retires by rotation and being eligible offers herself forre-appointment. A resolution seeking members' approval for her re-appointment forms partof the Notice.
Key Managerial Personnel (KMP)
Ms. Laxmi Joshi continues to be Company Secretary and Compliance Officer of theCompany.
Mr. Girish Sathe who had been appointed as Chief Executive Officer (CEO) of theCompany and Mr. Kapil Purohit as Chief Financial Officer (CFO) of the Company w.e.f. May28 2019 have resigned as CEO and CFO of the Company w.e.f. August 13 2019. The Boardplaces on record its gratitude for the services rendered by them during their tenure asCEO and CFO of the Company.
DECLARATION FROM INDEPENDENT DIRECTORS
All the Independent Directors have given their respective Declaration of Independenceas required under Section 149(7) of the Companies Act 2013 stating that they meet thecriteria of independence as specified in Section 149(6) of the Companies Act 2013 andRegulation 16(1)(b) of Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 ('the Listing Regulations'). In the opinion ofthe Board they fulfil the conditions of independence as specified in the Act and theListing Regulations and are independent of the management.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
The Board met 5 (five) times during the year under review. The details of Boardmeetings held and attendance of the Directors are provided in the Corporate GovernanceReport forming part of this Report.
The Board has constituted an Audit Committee comprising of Mr. Somashekhar B. Malagi asChairman Ms. Priyanka Oka and Mr. Srikanth R. Venkatadriagaram as its members.
Mr. Godfrey Pimenta has stepped down as member of the Audit Committee w.e.f. November13 2018.
The Board accepted the recommendations of the Audit Committee whenever made by theCommittee during the year.
NOMINATION AND REMUNERATION COMMITTEE
The information pertaining to Nomination and Remuneration Committee is furnished in theCorporate Governance Report which forms part of this Report.
COMPANY'S POLICY RELATING TO DIRECTORS' APPOINTMENT PAYMENT OF REMUNERATION ANDDISCHARGE OF THEIR DUTIES
The Company has adopted Nomination and Remuneration Policy for identificationselection and appointment of Directors Key Managerial Personnel and Senior ManagementPersonnel of the Company. The Policy provides criteria for fixing remuneration of theDirectors Key Managerial Personnel and Senior Management Personnel of the Company. ThePolicy enumerates the powers roles and responsibilities of the Nomination andRemuneration Committee. The Remuneration Policy is appended to this report as AnnexureA.
MANAGERIAL REMUNERATION AND OTHER DETAILS
The information required under Section 197(12) of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is furnished in the Annexure B to this report.
EVALUATION OF THE PERFORMANCE OF THE BOARD
In terms of the provisions of the Companies Act 2013 and the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the annual evaluation of the performanceof the Board its Committees and of individual Directors was carried out with a structuredquestionnaire covering various aspects of the Board functioning such as composition of theBoard and its Committees Board culture execution and performance of specific dutiesobligations and governance.
A separate exercise was carried out to evaluate the performance of individualDirectors who were evaluated on factors such as level of participation independence ofjudgement interpersonal relationship etc. On the basis of evaluation exercise the Boardis of the view that the Board and its Committees operate effectively.
The Company has adopted a Whistle Blower Policy to provide a formal mechanism to theDirectors and employees to report their concerns about unethical behavior actual orsuspected fraud or violation of the Company's Code of Conduct. The Policy provides foradequate safeguards against victimization of employees who avail of the mechanism and alsoprovides for direct access to the Chairman of the Audit Committee. It is affirmed that nopersonnel of the Company have been denied access to the Audit Committee. The Policy isavailable on the website of the Company at www.essar.com.
DIRECTORS' RESPONSIBILITY STATEMENT:
In terms of Section 134(5) of the Companies Act 2013 the Directors to the best oftheir knowledge state that:
a) in the preparation of the annual accounts for the financial year ended March 312019 the applicable accounting standards have been followed along with proper explanationrelating to material departures;
b) 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 at the end of the financial year March31 2019 and of the profit of the Company for that period;
c) the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d) the directors have prepared the accounts for the financial year ended March 31 2019on a going concern basis;
e) the directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
f) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
CHANGE IN NATURE OF BUSINESS IF ANY
There was no change in the nature of business of the Company during the financial yearended March 31 2019.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There were no material changes and commitments affecting the financial position of theCompany occurred between the end of the financial year to which this Financial Statementsrelate and on the date of this Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
Considering the nature of business of the Company the information required underSection 134(3)(m) of the Companies Act 2013 read with Companies (Accounts) Rules 2014relating to conservation of energy and technology absorption is not applicable. There wereno foreign exchange earnings or outgo during the period under review.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION& REDRESSAL) ACT 2013
There are no women employees in the Company. Accordingly the said provisions are notapplicable to the Company.
CORPORATE SOCIAL RESPONSIBILITY
The provisions of Section 135 of the Companies Act 2013 are not applicable to theCompany.
LOANS GUARANTEES SECURITIES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT2013
The Company has not provided any loans guarantees securities or made investmentscovered under Section 186 of the Companies Act 2013.
RELATED PARTIES TRANSACTIONS
In line with the requirements of the Companies Act 2013 and Listing Regulations theCompany has formulated a Policy on Related Party Transactions which is available onCompany's website at www.essar.com.
There were no material related party transactions entered into by the Company duringthe financial year under review. The Company has not entered into any transactions withrelated parties which were not in its ordinary course of business or not on an arm'slength basis. Accordingly the disclosure of related party transactions as required underSection 134(3) (h) of the Companies Act 2013 in Form AOC-2 is not applicable to yourCompany.
During the year under review the Company has not accepted any deposits within themeaning of Chapter V of the Companies Act 2013 read with the Companies (Acceptance ofDeposits) Rules 2014.
AUDITORS Statutory Auditors
M/s. D K S K & Company Chartered Accountants (Firm Registration No. 017224S) wereappointed as the Statutory Auditors of the Company at the 12th Annual General Meeting(AGM) of the Company held on September 29 2017 to hold office from the conclusion of the12th AGM till the conclusion of the 17th AGM to be held in the year 2022 subject toratification of their appointment by the members every year. The Ministry of CorporateAffairs vide its Notification dated 7th May 2018 has dispensed with the requirement ofratification of Auditor's appointment by the members every year. Accordingly theresolution relating to ratification of Auditor's appointment is not included in the Noticeof the ensuing Annual General Meeting.
Statutory Auditors' Report
The Auditors' Report for the financial year ended March 31 2019 do not contain anyqualification or reservation or adverse remark.
There were no frauds reported by the Auditors under the provisions of Section 143(12)of the Companies Act 2013.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 Uma Lodha (MembershipNo. FCS 5363) Prop. M/s. Uma Lodha & Co. Associates Practising Company Secretarieswere appointed as the Secretarial Auditors to carry out the secretarial audit of theCompany for the financial year 2018-19.
Secretarial Audit Report
A Secretarial Audit Report given by the Secretarial Auditors in Form No. MR-3 isannexed with this Report as Annexure C. There are no qualifications reservationsor adverse remarks made by Secretarial Auditors in their Report. However there are fewobservations made by Secretarial Auditors. The below are the replies to the observationsmade by Secretarial Auditors:
Reply to observation 1:
During the year under review the Company was in process of appointing KMPs as requiredunder the provisions of Section 203(1) of the Companies Act 2013. Accordingly Mr. GirishSathe had been appointed as Chief Executive Officer (CEO) of the Company and Mr. KapilPurohit as Chief Financial Officer (CFO) of the Company w.e.f. May 28 2019. However theyhave resigned as CEO and CFO of the Company as on date of this Report.
Reply to observations 2:
The Company did not have any business operations during the year under review.Accordingly there is no Executive Director on the Board of the Company.
RISK MANAGEMENT POLICY
The Company has framed Risk Management Policy to identify evaluate monitor andminimize identifiable risks such as strategic financial operational compliance legaland regulatory etc. and to manage and control risks on a continuous basis.
In terms of Regulation 21(5) of Listing Regulations the Risk Management Committee isnot applicable to the Company.
INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Company has adequate system of internal controls that are commensurate with itssize and nature of business to safeguard and protect the Company from losses unauthoriseduse or disposition of its assets. All the transactions are properly authorised recordedand reported to the management. The Company is following all the applicable AccountingStandards for properly maintaining the books of accounts and ensuring timely reporting offinancial statements.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any subsidiary company or joint venture during the financialyear under review.
EXTRACT OF ANNUAL RETURN
The extracts 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 2014is furnished in Annexure D and is attached to this Report.
CORPORATE GOVERNANCE REPORT
In compliance with the provisions of Regulation 34 read with Schedule V of the ListingRegulations the Corporate Governance Report of the Company for the financial year endedMarch 31 2019 and a Certificate from M/s. D K S K & Company Chartered Accountantsthe Auditors on compliance with the provisions of Corporate Governance requirements asprescribed under the said Regulations are annexed and forms part of this Annual Report. ACertificate of the CEO and CFO of the Company in terms of Regulation 17(8) of the ListingRegulations is also annexed.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has devised proper systems to ensure compliance with the provisions of allapplicable Secretarial Standards issued by the Institute of Company Secretaries of Indiaand that such systems are adequate and operating effectively.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
There have been no significant and material orders passed by any regulators or courtsor tribunals impacting the going concern status of the Company and its future operations.
The Directors of the Company express their appreciation for the continuous support andco-operation received from all the stakeholders during the year.
ANNEXURE - A TO THE DIRECTORS REPORT
NOMINATION AND REMUNERATION POLICY
Essar Securities Limited recognises the need to have a fair transparent and reasonableprocess for determining the appropriate remuneration at all levels of the Company. Companyalso believes that board is responsible to its shareholders to ensure that interests ofthe directors key managerial personnel and other employees are aligned with the interestsof the shareholders.
The Nomination & Remuneration Committee comprises of three Directors and the Keyobjectives of the Committee would be: -
1.1 To guide the Board in relation to appointment and removal of Directors KeyManagerial Personnel and Senior Management.
1.2 To recommend the Board on Remuneration payable to the Directors Key ManagerialPersonnel and Senior Management.
1.3 To evaluate the performance of the members of the Board and provide necessaryreport to the Board for further evaluation of the Board.
1.4 To identify persons to be recruited in the Key Managerial Personnel of the Company.
1.5 To retain motivate and promote talent and to ensure long term sustainability oftalented managerial persons and create competitive advantage.
2.1 "Act" means the Companies Act 2013 and Rules framed thereunder asamended from time to time.
2.2 "Board" means Board of Directors of the Company.
2.3 "Key Managerial Personnel" means Managing Director Whole-time DirectorChief Financial Officer Company Secretary and such other officer as may be prescribed.
2.4 "Senior Management" mean personnel of the company who are members of itscore management team excluding the Board of Directors including Functional Heads.
3. ROLE OF COMMITTEE
3.1 Formulation of the criteria for determining qualifications positive attributes andindependence of a director and recommend to the Board a policy relating to theremuneration of the directors key managerial personnel and other employees.
3.2 Formulation of criteria for evaluation of Independent Directors and the Board.
3.3 Devising a policy on Board diversity.
3.4 Identifying persons who are qualified to become directors and who may be appointedin senior management in accordance with the criteria laid down and recommend to the Boardtheir appointment and removal.
3.5 Policy for appointment and removal of Director KMP and Senior Management.
3.6 To carry out any other function as is mandated by the Board from time to time and /or enforced by any statutory notification amendment or modification as may beapplicable.
3.7 To perform such other functions as may be necessary or appropriate for theperformance of its duties.
4. APPOINTMENT CRITERIA AND QUALIFICATIONS
4.1 The Committee shall identify and ascertain the integrity qualification expertiseand experience of the person for appointment as Director KMP or at Senior Managementlevel and recommend to the Board his / her appointment.
4.2 A person should possess adequate qualification expertise and experience for theposition he / she is considered for appointment. The Committee has discretion to decidewhether qualification expertise and experience possessed by a person are sufficient /satisfactory for the concerned position.
4.3 The Company shall not appoint or continue the employment of any person as ManagingDirector or Whole-time Director who has attained the age of seventy years. Provided thatthe term of the person holding this position may be extended beyond the age of seventyyears with the approval of shareholders by passing a special resolution based on theexplanatory statement annexed to the notice for such motion indicating the Justificationfor extension of appointment beyond seventy years.
4.4 A whole-time KMP of the Company shall not hold office in more than one Companyexcept in its Subsidiary Company at the same time. However they can be appointed asDirector in any Company with the permission of the Board of Directors of the Company.
5. TERM / TENURE
5.1 Managing Director/Whole-time Director:
The Company shall appoint or re-appoint any person as its Managing Director orWhole-time Director for a term not exceeding five years at a time. No re-appointment shallbe made earlier than one year before the expiry of term.
5.2 Independent Director:
An Independent Director shall hold office for a term up to five consecutive years onthe Board of the Company and will be eligible for reappointment on passing of a specialresolution by the Company and disclosure of such appointment in the Board's report.
No Independent Director shall hold office for more than two consecutive terms of uptomaximum of five years each but such Independent Director shall be eligible forappointment after expiry of three years of ceasing to become an Independent Director.Provided that an Independent Director shall not during the said period of three years beappointed in or be associated with the Company in any other capacity either directly orindirectly.
The Committee shall carry out evaluation of performance of every Director KMP andSenior Management Personnel at regular interval (yearly).
Due to reasons for any disqualification mentioned in the Act or under any otherapplicable Act rules and regulations thereunder the Committee may recommend to theBoard with reasons recorded in writing removal of a Director KMP or Senior ManagementPersonnel subject to the provisions and compliance of the said Act rules and regulations.
The Director KMP and Senior Management Personnel shall retire as per the applicableprovisions of the Act and the prevailing policy of the Company. The Board will have thediscretion to retain the Director KMP
Senior Management Personnel in the same position/ remuneration or otherwise even afterattaining the retirement age for the benefit of the Company.
9. POLICY RELATING TO THE REMUNERATION FOR THE MANAGING DIRECTOR OR WHOLE-TIMEDIRECTOR KMP AND SENIOR MANAGEMENT PERSONNEL
9.1 The remuneration / compensation / commission etc. to the Managing Director orWholetime Director KMP and Senior Management Personnel will be determined by theCommittee and recommended to the Board for approval. The remuneration / compensation /commission etc. shall be subject to the prior/post approval of the shareholders of theCompany and Central Government wherever required.
9.2 The Non- Executive / Independent Director may receive remuneration by way of feesfor attending meetings of Board or Committee thereof. Provided that the amount of suchfees shall not exceed Rs.100000 (Rupees One Lakh only) per meeting of the Board orCommittee or such amount as may be prescribed by the Central Government from time to time.
9.3 An Independent Director shall not be entitled to any stock option of the Company.
10. POLICY REVIEW
This policy is framed based on the provisions of the Companies Act 2013 read withrules made there under and the requirements of SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 (Earlier Clause 49 of the Listing Agreement). This policyshall be reviewed by Nomination and Remuneration Committee as and when any changes are tobe incorporated in the policy due to change in regulations or as may be felt appropriateby the Committee. Any changes in the policy shall be approved by the Board of Directors.
ANNEXURE - B TO THE DIRECTORS REPORT
A. DETAILS PERTAINING TO REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF THECOMPANIES ACT 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OFMANAGERIAL PERSONNEL) RULES 2014
(i) The ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year 2018-19:
The Directors of the Company are not paid any remuneration or sitting fees. There areno employees on the payroll of the Company. Hence the aforesaid ratio is not applicable.
(ii) The percentage increase in remuneration of each Director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year2018-19:
(iii) The percentage increase in the median remuneration of employees in the financialyear 2018-19:
(iv) The number of permanent employees on the rolls of Company:
(v) Average percentile increase 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:
B. STATEMENT SHOWING PARTICULARS OF EMPLOYEES AS PER THE PROVISIONS OF SECTION 197(12)OF THE COMPANIES ACT 2013 READ WITH RULE 5(2) OF THE COMPANIES (APPOINTMENT ANDREMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014
There are no employees on the payroll of the Company. Hence the aforesaid provision isnot applicable to the Company.