Your Directors have pleasure in presenting the 25th AnnualReport and the audited financial statements of the Company for the financial year ended31st March 2019.
A summary of financial results of the Company and its subsidiaries forthe year ended 31st March 2019 is given below:
(Rs in lakhs)
|Particulars || |
| || |
| ||2018-19 ||2017-18 ||2018-19 ||2017-18 |
|Income from Operations ||4983.05 ||5989.27 ||5029.44 ||5995.64 |
|Other Income ||208.89 ||239.37 ||229.34 ||264.82 |
|Total Income ||5191.94 ||6228.64 ||5258.78 ||6260.46 |
|Total Expenditure ||4840.45 ||5720.11 ||4874.97 ||5749.35 |
|Profit/ (Loss) before Interest Depreciation & Tax ||351.49 ||508.53 ||383.81 ||511.11 |
|Less: Interest and Finance Charges ||221.03 ||213.35 ||246.69 ||234.21 |
|Less: Depreciation and Amortisation ||24.03 ||16.74 ||33.24 ||26.12 |
|Profit/ Loss(-) Before Tax Before Exceptional Item ||106.43 ||278.44 ||103.88 ||250.78 |
|Exceptional Item ||- ||- ||- ||- |
|Profit/ Loss (-) Before Tax ||106.43 ||278.44 ||103.88 ||250.78 |
|Less Tax Expenses || || || || |
|-Current Tax ||38.25 ||100.82 ||40.69 ||101.06 |
|-Deferred Tax ||1.81 ||4.01 ||35.53 ||52.61 |
|-Income tax for Earlier year ||0.05 ||-20.95 ||0.01 ||-19.45 |
|Profit/ (Loss) for the year ||66.32 ||194.56 ||27.68 ||116.56 |
|Share of Profit from Associate Company ||- ||- ||- ||- |
|Profit/ (Loss) for the period ||66.32 ||194.56 ||27.68 ||116.56 |
|Add: Surplus brought forward from previous year ||1795.59 ||1613.03 ||1426.20 ||1321.65 |
|Amount Available for Appropriation ||1861.91 ||1807.59 ||1453.88 ||1438.21 |
|Less: Proposed Dividend on Equity Shares ||9.97 ||9.96 ||9.96 ||9.96 |
|Less: Corporate Tax on Proposed Dividend ||2.05 ||2.04 ||2.05 ||2.05 |
|Other Adjustment ||- ||- ||-0.29 ||- |
|Balance to Balance Sheet ||1849.89 ||1795.59 ||1441.56 ||1426.20 |
FINANCIALS OF THE COMPANY ON THE STANDALONE BASIS :
Our revenue from operations on a standalone basis decreased to Rs4983.05 lakhs from ' 5989.27 lakh of the previous year. Our Revenue from sale of productaggregated to '4593.48 lakh from last year's '5590.16 lakh Sale of services ' 339.08lakh (last year : ' 366.17 lakh) and other operating revenue ' 50.49 lakh (last year '32.94 lakh).
Our total Income on a standalone basis reduced to ' 5191.94 lakhs fromlast year's ' 6228.64 lakhs. The Statement of Profit and Loss of your Company onstandalone basis shows a Profit after tax of ' 66.32 lakhs against last Year 's Profitafter tax of ' 194.56 lakhs. The disposable profit is ' 1861.91 lakhs (' 1807.59 lakhs)after taking into account the balance of '1795.59 lakhs (' 1613.03 lakhs) brought forwardfrom the last year.
Your Directors are pleased to recommend a dividend of 2% which amountsto '0.20 per share (face value ' 10 per share) for consideration and approval by themembers at the ensuing Annual General Meeting. The total dividend payout includingdividend distribution tax amounts to ' 12.01 lakh.
The Authorised Share Capital of the Company is ' 750 lakh divided into7500000 equity shares of ' 10/- each. The paid up Equity Share Capital as on 31st March2018 was ' 498.725 lakh dividend into 4983000 Equity Shares of ' 10 each and including '0.425 lakh received on account of 17000 forfeited shares. There has not been any changein the Equity Share Capital of the Company during the financial year ended 31st March2019. During the year under review the Company has neither issued shares withdifferential voting rights nor issued sweat equity or granted stock options.
TRANSFER TO RESERVES:
The Company has not transferred any amount to the reserves (Previousyear: Nil) during the current financial year. An amount of ' 1859.89 lakh is proposed tobe retained in the statement of profit & loss against ' 1795.59 lakh of last year.
Lohia Securities Limited (Standalone)
The standalone revenue for the year was ' 5191.94 lakhs as compared to' 6228.64 lakhs for the year ended 31st March 2018. Operating Profit (Earnings beforeinterest depreciation and corporate tax) for the period ended 31st March 2019 was'351.49 lakhs as against '508.53 lakhs for the year ended 31st March 2018.
The Company has Profits before Tax of '106.43 lakhs (as compared tolast year's Profit before Tax of ' 278.44 lakhs) after meeting interest expenses of'221.03 lakhs (last year's '213.35 lakhs) and depreciation of '24.03 lakhs (last year's'16.74 Lakhs) for the year ended 31st March 2019. The Net Profit for the year was '66.32lakhs (as compared to last year's Net Profit of ' 194.56 lakhs).
Lohia Securities Limited (Consolidated)
The consolidated revenue of the Company for the year was ' 5258.78lakhs a decline of 16.00% as compared to previous year. The decline was due to decreasein the sale of products and sale of services whereas increase in other operating revenue.The other income also declined during the year. The other income consists of InterestIncome dividend Income profit on sale of Non current Investment Provision written backand other miscellaneous income.
The Net Group Profit after tax was '27.68 lakhs as against Profit aftertax of '116.56 lakhs of last year. Summary of Consolidated Financial Results of thecompany & its subsidiaries are as below:
Subsidiary / Joint Venture / Associate Companies
During the financial year under review your company has four 100%subsidiaries. Details of their business and operations are given below:-
Trade City Securities Private Limited has a Trading Membership ofNSE in Capital and F&O Segment and Trading Membership of BSE in Capital and F&OSegment. It reported a net loss of '42.42 lakhs compared to previous year's net profit of'7.14 lakhs. Revenue from operation was ' 0.00 compared to last year's ' 0.28 lakhs.
Trade City Commodities Private Limited is a member of NCDEX MCXNational Spot and NCDEX Spot is engaged in commodity trading and is registered with SEBI.The Company had a net profit of '15.63 lakh against last year's Net Loss of '50.63 lakhs.Revenue from operation was '42.24 lakh compared to last year's 6.53 lakh.
Trade City Real Estate Private Limited is engaged in property andreal estate business. It is also investing surplus
moneys in shares and securities. The Company has suffered net loss of'13.25 lakhs compared to net loss of ' 18.17 lakhs of last year. Revenue from operationwas derived from rent of '8.64 lakh compared to last year's '8.64 lakh
Trade City Barter Private Limited is a non-banking finance companyand is engaged in investment and financing activities. The Company has a net profit of '1.39 lakhs compared to last year's net loss of ' 2.07 lakh. Revenue from operations werefrom sale of securities of ' 18.02 lakh (last year '9.45 lakh) Interest Income '11.46lakh(last year '12.86 lakh) other sources '2.99 lakh (compared to last year's '2.06 lakhs)
In accordance with Section 129(3) of the Companies Act 2013 andRegulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the consolidated financial statements of the Company and all its subsidiarycompanies have been prepared and duly audited by the auditors and form part of the AnnualReport. Statement containing salient features of the financial statements of thesubsidiaries is given in Form AOC-1 and note 30 of the Consolidated financial statementsand forms part of this report as Annexure-A.
The Company will make available the Annual Accounts of the Subsidiarycompanies and the related detailed information to any member of the Company who may beinterested in obtaining the same. The annual accounts of the subsidiary companies willalso be kept open for inspection at the Registered Office of the Company and that of therespective subsidiary companies. The Consolidated Financial Statements presented by theCompany include the financial results of the subsidiary companies.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report forms an integral part ofthis Report and gives details of the overall industry structure developmentsopportunities threats performance and state of affairs of the Company's businessinternal controls and their adequacy risk management system and is annexed as Annexure-Bforming part of the Report.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to Section 134(5) of the Companies Act 2013 with respect toDirectors' Responsibility Statement the Board of directors to the best of theirknowledge and ability confirm that:
i) In the preparation of the annual accounts applicable accountingstandards have been followed along with proper explanation relating to materialdepartures.
ii) The Directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company as on 31stMarch 2019 and of the profit of the company for the year;
iii) The Directors have taken proper and sufficient care for themaintenance 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 Directors have prepared the annual accounts on a going concernbasis;
v) The Directors have laid down an adequate system of Internalfinancial controls to be followed by the Company and such internal financial controls areadequate and are operating effectively; and
vi) The Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and wereoperating effectively.
ADEQUACY OF INTERNAL FINANCIAL CONTROL:
The Company has designed and implemented a process driven framework forinternal financial controls within the meaning of the explanation of Section 134(5)(e) ofthe Companies Act 2013. The internal financial controls have been documented andembedded in the business processes.
Assurance on the effectiveness of internal financial controls isobtained through management reviews control self assessment continuous monitoring byfunctional experts as well as testing of the internal financial controls systems by theinternal auditors during the course of their audits. We believe that these systems providereasonable assurance that our internal financial controls are designed effectively and areoperating as intended.
Your Company has neither accepted nor renewed any deposits from publicwithin the meaning of Section 73 of the Companies Act 2013 read with the Companies(Acceptance of Deposits) Rules 2014 during the year. As such no amount of principal orinterest was outstanding as on the date of balance sheet.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
In accordance with the provision of Section 152 of the Companies Act2013 Rules framed thereunder and Articles of Association of your Company Mr. Hari KishanLohia and Mr. Rajesh Kumar Bajaj Directors are due to retire by rotation at the ensuingAnnual General Meeting and being eligible offers themselves for re-appointment. YourBoard is of the opinion that continued association of Mr. Hari Kishan Lohia and Mr. RajeshKumar Bajaj with the Board will be of immense benefit to your Company and thereforerecommends their re-appointment. In terms of Section 102 of the Companies Act 2013Regulation 36 of the SEBI (Listing Obligation and Disclosure Requirements) regulations2015 and Secretarial Standards on General Meeting (SS-2) issued by the Institute ofCompany Secretaries of India brief profiles of Mr. Hari Kishan Lohia and Mr. Rajesh KumarBajaj have been annexed to the Notice convening 25th Annual General Meeting ofthe members of the Company and the same form an integral part of this Annual Report.
The Board of Directors of the Company at their meeting held on 30thMay 2019 approved the re-appointment of Mr. Sudheer Kumar Jain as Whole-time Directorfor a period of 5 years with effect from 26th September 2019 to 25thSeptember 2024.
Pursuant to the provisions of Section 149 and 152 read with Schedule IVof the Companies Act 2013 Mr. Sameer Bajaj and Mr. Vineet Goenka were appointed asIndependent Directors by the shareholders at the Annual General Meeting held on 27thSeptember 2014 for a period of 5 years and their terms comes to an end on 26thSeptember 2019. Ms. Sarita Ojha was appointed as Independent director by the shareholdersat the Annual General Meeting held on 26th September 2015 for a period of 5 years w.e.f.31/03/2015 and her terms comes to an and on 30th March 2020. As per the provisions ofSection 149(10) of the Companies Act 2013 Independent Directors can be re-appointed foranother term of 5 years on passing of special resolution by shareholders of the Company.The Board of Directors on the recommendation of the Nomination and Remuneration Committeeat their meeting held on 30th May 2019 has proposed the re-appointment of Mr.Sameer Bajaj Mr. Vineet Goenka and Ms. Sarita Ojha as Independent Directors for anotherterm of 5 years w.e.f. 27th September 2019 and 31st March 2020 respectivelyfor approval of shareholders at the ensuing AGM of the Company.
DECLARATIONS GIVEN BY INDEPENDENT DIRECTORS:
As on March 31 2019 the Board comprised of four Executive Directorsand four Non-Executive Independent Directors. Definition of "Independence ofDirectors is derived from Regulation 16 of the Listing Regulations and Section 149(6) ofthe Companies Act 2013. The Company has received the necessary declarations under Section149(7) of the Companies Act 2013 from the Independent Directors stating that they meetthe prescribed criteria for independence. The Board of Directors after undertakingassessment and on evaluation of the relationships disclosed considered the followingNon-Executive Directors as Independent Directors:
a) Mr. Sameer Bajaj
b) Mr. Vineet Goenka
c) Ms. Sarita Ojha
d) Mr. Ashish Kumar Gupta
All Independent Directors have affirmed compliance to the code ofconduct for independent directors as
prescribed in Schedule IV of the Companies Act 2013.
The Board meets at regular intervals to discuss and decide on theCompany's policies and strategy apart from other Board matters. During the financial year2018-19 six board meetings were held on April 02 2018 May 30 2018 August 14 2018September 22 2018 November 14 2018 and February 14 2019. The gap between the twoboard meetings did not exceed 120 days.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Nomination and Remuneration Committee has framed a policy forselection and appointment of Directors including determining qualifications competenciespositive a$tudes and independence for appointment of Directors and policies of the Companyrelating to remuneration of Directors Key Managerial Personnel (KMP) Senior managementpersonnel and their remuneration as part of its charter and other matters provided underSection 178(3) of the Companies Act 2013.
Pursuant to Section 134(3) of the Companies Act 2013 the nominationand remuneration policy of the Company which lays down the criteria for determingqualifications competencies positive attributes and independence for appointment ofdirectors and policies of the Company relating to remuneration of Directors KMP and otheremployees is available on the Company's website at www.lohiasecurities.com. We affirm thatthe remuneration paid to Directors is in accordance with the remuneration policy of theCompany.
EVALUATION OF THE BOARD OF DIRECTORS
Annual performance evaluation was conducted for all Board members forthe Board and its committees. The Board evaluation framework has been designed incompliance with requirements under the Companies Act 2013 and the Listing Regulationsand in accordance with the Guidance Note on Board Evaluation issued by SEBI in January2017.
Evaluation of the Board was based on criteria such as composition androle of the Board Board communication and relationships functioning of Board Committeesreview of performance of Executive Directors succession planning strategic planningetc.
In a separate meeting of Independent Directors performance ofNon-Independent Directors performance of the Board as a whole and performance of theChairman was evaluated taking into account the views of executive directors andnon-executive directors. Performance evaluation of independent Directors was done by theentire Board excluding the independent Director being evaluated.
COMMITTEES OF DIRECTORS:
Your Company has five Committees of the Board viz.
1. Audit Committee
2. Stakeholders' Relationship Committee
3. Nomination and Remuneration Committee
4. Risk Management Committee
5. Independent Directors Committee
Details of all the Committees alongwith their composition terms ofreference and meetings held during the year are provided in "Report on CorporateGovernance" forming part of the Annual Report.
The Auditors Report does not contain any qualification reservation oradverse remark on the financial statements
for the year ended 31st March 2019.
Pursuant to the provisions of Section 139 of the Companies Act 2013and the Companies (Audit and Auditors) Rules 2014 and pursuant to the recommendation madeby the Audit Committee of the Board of Directors of the Company Messers Vasudeo &Associates Chartered Accountants having Registration No. 319299E allotted by TheInstitute of Chartered Accountants of India (ICAI) was appointed as the StatutoryAuditors of the Company from the conclusion of 23rd Annual General Meeting ofthe Company held on 23rd September 2017 till the conclusion of the 28thAnnual General Meeting to be held in the year 2022 subject to the ratification of theirappointment at every AGM.
Vide notification dated May 7 2018 issued by Ministry of CorporateAffairs the requirement of seeking ratification of appointment of statutory auditors bymembers at each AGM has been done away with. Accordingly no such item has been consideredin Notice of the 25th AGM.
Pursuant to the provisions of Section 204 of the Companies Act 2013and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theCompany has appointed Ms. Poonam Binani Practising Company Secretary (Membership No.A33638) to undertake the Secretarial Audit of the Company. The Report of Secretarial Auditin Form MR-3 for the financial year ended 31st March 2019 is enclosed as Annexure-C.
QUALIFICATION RESERVATION OR ADVERSE REMARK IN STATUTORY AUDIT REPORTAND SECRETARIAL AUDIT REPORT:
There is no qualification reservation or adverse remark made by theStatutory Auditors in their Auditors' Report to the Financial Statements or by theSecretarial Auditor in its Secretarial Audit Report for the financial year ended March 312019.
REPORTING OF FRAUD:
The Statutory Auditors of the Company have not reported any incident offraud as specified under Section 143(12) of the Companies Act 2013.
COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND ANNUAL GENERALMEETINGS:
The Company has complied with Secretarial Standards issued by theInstitute of Company Secretaries of India on Board Meeting and Annual General Meeting.
CORPORATE SOCIAL RESPONSIBILITY:
The provision of Section 135 of the Companies Act 2013 read withCompanies (Corporate Social Responsibility Policy) Rules 2014 are not applicable to theCompany since it is not fulfilling any of the stipulated requirements of net-worthturnover and net profits.
The Company has a well defined risk management framework in place.Further it has established procedures to periodically place before the Board the riskassessment and management measures. The details of the risks faced by the Company and themitigation thereof are discussed in detail in the Management Discussion and Analysisreport that form part of the Annual Report.
REPORT ON CORPORATE GOVERANANCE
A Report on Corporate Governance for the financial year ended 31stMarch 2019 along with the Statutory Auditors' Certificate on compliance with theprovisions of corporate governance under SEBI (Listing Obligation and DisclosureRequirements) Regulations 2015 is forming part of the Annual Report as Annexure-D.
PARTICULARS OF EMPLOYEES AND RELATED INFORMATION:
The particulars of the employees pursuant to the provisions of Section197(12) of the Companies Act 2013 read with Rule 5(2) and Rule 5(3) of the Appointmentand Remuneration of Managerial Personnel) Rules 2014 are not given since none of theemployees are in receipt of a remuneration in excess of the prescribed limit. Disclosurepertaining to remuneration and other details as required under section 197(12) of theCompanies Act 2013 read with Rules 5(1) of the Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are provided in Annexure-E.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS:
Details of Loans Guarantees and Investments covered under theprovisions of Section 186 of the Companies Act 2013 are given in Notes no. 11 and 13 tothe financial statement.
RELATED PARTIES TRANSACTIONS:
The framework for dealing with related party transactions is given inthe Corporate Governance Report.
During the year your Company had not entered into any contract/arrangement/ transactions with Related Parties referred in Section 188(1) of the CompaniesAct 2013 read with the rules made thereunder. In accordance with Ind AS-24 the RelatedParty Transactions are disclosed under Note no. 32 of the Standalone Financial Statements.
Pursuant to Regulation 23(9) of the Listing Regulations your Companyhas filed half yearly report on Related Party Transactions with the Stock Exchanges forthe year ended March 31 2019
EXTRACT OF ANNUAL RETURN:
The Extract of Annual Return as provided under section 92(3) of theCompanies Act 2013 and as prescribed in Form no. MGT-9 of the Companies (Management andAdministration) Rules 2014 is appended as Annexure-F. Further in terms ofSection 134(3)(a) of the Co0mpanies Act 2013 the Annual Return of the Company has beenplaced on the Company's website and can be accessed at https://bit.ly/2MDLjU8.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THEFINANCIAL POSITION OF THE COMPANY
There has been no material change and commitments affecting thefinancial position of the Company which have occurred between 31st March 2019and the date of this report other than those disclosed in this report.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTIONFOREIGN EXCHANGE EARNINGS/OUTGO:
Your Company has no activities relating to conservation of energy andtechnology absorption as required to be disclosed under Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014. However yourCompany uses information technology extensively in its operations and also continues itsendeavor to improve energy conservation and utilization safety and environment.
Your Company has not earned any foreign exchange during the year underreview (Previous year - Nil). The Company has not incurred any travelling expenses inforeign currency (last year- ' 3.99 lakh) during the financial year.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY:
As per the provisions of Section 177(9) of the Companies Act 2013 theCompany is required to establish an effective Vigil Mechanism for directors and employeesto report genuine concerns.
The Company has a Whistle-blower Policy in place to encourage andfacilitate employees to report concerns about unethical behavior actual/ suspected fraudsand violation of Company's Code of Conduct Policy. The Policy has been suitably modifiedto meet the requirements of Vigil Mechanism under the Act. The policy provides foradequate safeguards against victimization of persons who avail the same and provides fordirect access to
the Chairperson of the Audit Committee. The Audit Committee of theCompany oversees the implementation of the Whistle Blower Policy.
The Company has disclosed information about the establishment of theWhistle Blower Policy on its website www.lohiasecurities.com. During the year no personalhas been declined access to the Audit Committee wherever desired.
PROTECTION OF WOMEN AT WORKPLACE:
The Company has formulated a policy on "Protection of Women'sRights at Workplace" as per the provision of the Sexual Harassment of Women asWorkplace (Prevention Prohibition & Redressal) Act 2013. This has been widelydisseminated. There were no cases of sexual harassment received by the Company in year2018-19.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS ORCOURTS OR TRIBUNALS:
There were no significant and material orders passed by the regulatorsor courts or tribunals during the year impacting the going concerns status and theCompany's operations in future.
BUSINESS RESPONSIBILITY REPORT:
The Company is not mandatorily required to furnish the BusinessResponsibility Report describing the initiatives taken by the Company from anenvironmental social and governance perspective as per clause (f) of Sub-regulation (2)of regulation 34 of Securities and Exchange Board of India (SEBI) Listing Regulations.
ANNEXURES FORMING PART OF THIS REPORT OF THE DIRECTORS
The Annexure referred to in this Report containing information requiredto be disclosed are annexed as under:
|Annexure-A ||Statement containing salient features of the financial statements of subsidiaries/ associate companies/ joint ventures in Form AOC-1 |
|Annexure-B ||Management Discussion And Analysis Report |
|Annexure-C ||Secretarial Audit Report in Form MR-3 |
|Annexure-D ||Report on Corporate Governance |
|Annexure-E ||Particulars of Managerial Remuneration |
|Annexure-F ||Extract of Annual Return in Form MGT-9 |
Your Directors would like to thank all stakeholders namely clientsshareholders arbitragers dealers bankers employees SEBI exchanges clearing housesdepositories authorized persons and all other business associates for the continuoussupport given by them to the Company and its management.
For and on behalf of the Board
| ||Mr. Mahesh Kumar Bajaj ||Sudheer Kumar Jain |
|Place : Kolkata || |
|Dated : 30th May 2019 ||DIN:00080157 ||DIN: 00075103 |