Your Directors have pleasure in presenting the 26th Annual Report andthe audited financial statements of the Company for the financial year ended 31st March2020.
(Rs. in lakhs except share capital data)
|Particulars ||Consolidated ||Standalone |
| ||Year ended 31.03.2020 ||Year ended 31.03.2019 ||Year ended 31.03.2020 ||Year ended 31.03.2019 |
|Total Income ||7587.94 ||5277.78 ||7519.11 ||5211.20 |
|Cash Profit ||640.35 ||155.00 ||629.60 ||148.57 |
|Less: Depreciation ||36.19 ||33.24 ||26.72 ||24.03 |
|Profit before Tax ||604.16 ||121.76 ||602.88 ||124.54 |
|Less: Provision for Taxation ||158.73 ||39.46 ||152.20 ||38.12 |
|Add / (Less): Deferred Tax ||9.51 ||37.56 ||6.73 ||2.80 |
|Profit after Tax || || || || |
|(Net of adjustment for earlier years) ||435.92 ||44.74 ||443.95 ||83.62 |
|Add : Retained Earning brought forward ||1453.80 ||1429.29 ||1870.77 ||1798.69 |
|Balance available for appropriation ||1889.72 ||1474.03 ||2314.72 ||1882.31 |
|Appropriation || || || || |
|Less: Transfer to Statutory Reserve ||-1.70 ||-0.29 ||- ||- |
|Less: Dividend Paid (Including Dividend Tax) ||-11.62 ||-11.59 ||-12.02 ||-12.01 |
|Transfer from Other Comprehensive Income ||5.42 ||-37.66 ||10.81 ||0.47 |
|Elimination of fair value of Investment in Holding Company ||- ||29.31 ||- ||- |
|Balance carried to Balance Sheet ||1881.82 ||1453.80 ||2313.51 ||1870.77 |
|Earnings per Share ( ` 10/- each) || || || || |
|Basic (in `) ||9.12 ||0.94 ||8.91 ||1.68 |
|Diluted (in `) ||9.12 ||0.94 ||8.91 ||1.68 |
In 2019-20 your Company's total Income from Operations stood atRs. 1782.88 lacs as against Rs. 1808.72 lacs during the last year.
Your Company continued its focus on sale of shares and income therefrom was Rs.4687.76 lacs as against ` 3026.91 lacs during the previous year recording anincrease of 54.87%. It continues to be the thrust area for the Company. Income from OtherSources was at Rs. 1.36 lacs as against Rs. 0 lacs during the previous year. There has notbeen any change in the nature of business of the Company during the year.
Indian Accounting Standards
Pursuant to the notification dated February 16 2015 issued by theMinistry of Corporate Affairs the Company has adopted the Indian Accounting Standards("Ind AS") notified under the Companies (Indian Accounting Standard) Rules2015. Accordingly the Financial Statements have been prepared in compliance with Ind AS.Consequently the subsidiary associate and joint venture companies also have adopted IndAS(irrespective of their net worth).
Impact of Covid-19
COVID-19 has had a catastrophic impact on people and economy globally.The Registered and Corporate Office of Lohia Securities Limited is opened with limited manpower in accordance with the Government Directives.
Some of the branches are still closed due to continuation of lockdown.However revenues and profitability have seen some impact due to restriction in movementsof personnel. The essential staffs have been attending and other staffs are working fromhome and the business is somehow running.
The Company has taken conscious decision for uninterrupted operationsand ensuring working environment during the lock down period. To ensure this criticalstaffs have been asked to report to work at their locations. The Company has also madenecessary arrangements to ensure that staffs are safe and comfortable at work.
Silver Jubilee Celebration:
The Company celebrated its 25th year of incorporation on 6th January2020 at its offices in which directors employees arbitrageur and authorized persons tookpart. Medallions were distributed to the participants at this event.
Dividend & Reserves
The Board of Directors is pleased to recommend a dividend of Rs. 0.20/-per share (2%) for the year ended March 31 2020 subject to the approval of the Membersat the 26th Annual General Meeting.
During the year under review there was no transfer to General Reserve(Previous year Rs. Nil).
Employee Stock Option Scheme
No shares have been issued under the Employee Stock Option Scheme 2011during the FY 2019-20.
Share Capital The Authorised Share Capital of the Company is Rs. 750lakh divided into 7500000 equity shares of Rs.10/- each. The paid up Equity ShareCapital as on 31st March 2018 was Rs.498.725 lakh dividend into 4983000 Equity Sharesof Rs.10 each and including Rs. 0.425 lakh received on account of 17000 forfeited shares.There has not been any change in the Equity Share Capital of the Company during thefinancial year ended 31st March 2020. During the year under review the Company hasneither issued shares with differential voting rights nor issued sweat equity or grantedstock options.
Management Discussion and Analysis Report
In terms of requirements of Regulation 34 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 (SEBI LODR) a ManagementDiscussion and Analysis Report is attached Annexure B forming part of this Report.
Report on Corporate Governance
In terms of requirements of Regulation 34 of the SEBI LODR a Report onCorporate Governance together with are attached as Auditors' annexure - D andannexure - D1 forming part of this Report.
Consolidated Financial Statement 136 of the Companies In accordancewith Section Act 2013 and Regulation 34 of the Listing Regulations read with otherapplicable provisions your Directors have attached the Consolidated Financial Statementsof the Company for the financial year ended March 31 2020 prepared in accordance withapplicable Ind AS which form a part of the Annual Report. The financial statements andthe audited including consolidated accounts of the subsidiary are available on theCompany's website http://www.lohiasecurities com . .
Accordingly a statement in Form AOC-1 is attached as annexure - a tothe Financial Statements of the Company for your information.
During the financial year under review your company has four 100%subsidiaries. Details of their business and operations
Trade City Securities Private Limited has a Trading Membership of NSEin Capital and F&O Segment and Trading Membership of BSE in Capital and F&OSegment. It reported a net loss of Rs. 9.19 lakhs compared to previous year's netloss of Rs. 42.42 lakhs. Revenue from operation was Rs. 2.05 lakhs compared to lastyear's Rs. 2.25 lakhs.
Trade City Commodities is a member of NCDEX MCX National Spot andNCDEX Spot and is engaged in commodity trading and is registered with SEBI. The Companyhad a net profit of Rs.7.33 lakh against last year's Net profit of Rs.15.94 lakhs.Revenue from operation wasRs.43.82 lakh compared to last year's Rs. 42.55 lakh.
Trade City Real Estate Private Limited is engaged in property and realestate business. It is also investing surplus moneys in shares and securities. The Companyhas suffered net loss of Rs. 14.04 lakhs compared to net loss of Rs. 13.38 lakhs of lastyear. Revenue from operation was derived from rent of Rs. 8.64 lakh compared to lastyear's Rs. 8.64 lakh
Trade City Barter Private Limited is a non-banking finance company andis engaged in investment and financing activities. The Company has a net profit of Rs.8.27 lakhs compared to last year's net loss of Rs. 1.39 lakh. Revenue from operationsof Rs. 9.14 lakh (last year Rs.18.02 lakh) Interest Income
Rs. 14.82 lakh (last year Rs. 12.43 lakh) other sources Rs.0.41 lakh(compared to last year's Rs. 1.68 lakhs ) the Companies Act 2013 and Regulation 33of the SEBI (Listing Obligations In accordance with Section and Disclosure Requirements)Regulations 2015 the consolidated financial statements of the Company and all itssubsidiary companies have been prepared and duly audited by the auditors and form part ofthe Annual Report. Statement containing salient features of the financial statements ofthe subsidiaries is given in Form AOC-1 and note 52 of the Consolidated financialstatements and forms part of this report as annexure-a The Company will make available theAnnual Accounts of the Subsidiary companies and the related detailed information to anymember of the Company who may be interested in obtaining the same. The annual accounts ofthe subsidiary companies will also be kept open for inspection at the Registered Office ofthe Company and that of the respective subsidiary companies. The Consolidated FinancialStatements presented by the Company include the financial results of the subsidiarycompanies.
In accordance with the Regulation 16 of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 (Listing Regulations') theunlisted subsidiaries of this Company are not a material subsidiaries. The Company hasformulated a policy for determining material subsidiary. The policy can be accessed at theCompany's website at http://www.lohiasecurities.com
Corporate Social Responsibility
The Company is not yet required to comply to with the requirementassociated with Section 135 of the Companies Act 2013.
Business Responsibility Report The Company is not required to complywith the requirements associated with Regulation 34(2)(f) of the Listing Regulations2015.
Secretarial Standards The applicable Secretarial Standards i.e. SS-1and SS-2 relating to Meetings of the Board of Directors' and GeneralMeetings' respectively have been duly followed by the Company.
Directors' Responsibility Statement
To the best of knowledge and belief and according to the informationand explanations obtained by them your Directors make the following statement in terms ofSection 134(3)(c) of the Companies Act 2013:
(i) that in the preparation of the Annual Accounts for the year endedMarch 31 2020 the applicable accounting standards have been followed and there are nomaterial departure;
(ii) and applied them consistently and made judgments and estimatesthat are reasonable and prudent so as to give a true and fair view of the state of affairsof the Company as at March 31 2020 and profits of the Company for the year ended on thatdate;
(iii) that 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 annual accounts have been prepared on a going concern basis;
(v) that the Directors had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively; and
(vi) the Directors have devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems were adequate andoperating effectively.
Based on the framework of internal financial controls and compliancesystems established and maintained by the Company the work performed by the internalstatutory and secretarial auditors including the audit of internal financial controlsover financial reporting by the statutory auditors and the reviews performed by managementand the relevant board committees including the audit committee the Board is of theopinion that the Company's internal financial controls were adequate and effectiveduring FY 2019-20.
Members of the Company at its 25th Annual General Meeting held on 21stSeptember 2019 approved reappointment of Mr. Hari Kishan Lohia (DIN: 00081055) and Mr.Rajesh Kumar Bajaj (DIN: 00080664) as Director(s) liable to retire by rotation.
In accordance with the provision of Section 152 of the Companies Act2013 Rules framed thereunder and Articles of Association of your Company Mr. MaheshKumar Bajaj Director is due to retire by rotation at the ensuing Annual General Meetingand being eligible offers himself for re-appointment. Your Board is of the opinion thatcontinued association of Mr. Mahesh Kumar Bajaj with the Board will be of immense benefitto your Company and therefore recommends his re-appointment. In terms of Section 102 ofthe Companies Act 2013 Regulation 36 of the SEBI (Listing Obligation and DisclosureRequirements) regulations 2015 and Secretarial Standards on General Meeting (SS-2) issuedby the Institute of Company Secretaries of India brief profiles of Mr. Mahesh Kumar Bajajhave been annexed to the Notice convening 26th Annual General Meeting of the members ofthe Company and the same form an integral part of this Annual Report.
The Board of Directors of the Company at their meeting held on 4thApril 2020 approved the re-appointment of (a) Mr. Hari Kishan Lohia as Whole-timeDirector for a period of 3 years with effect from 15th April Mahesh Kumar Bajaj asWhole-time Director for a period of 3 years with effect from 15th April 2020 and (c) Mr.Rajesh Kumar Bajaj as Whole-time Director for a period of three years with effect from15th April 2020. All the aforesaid three appointments are subject to approval by themembers at the ensuing Annual General Meeting.
The Company had annual evaluation of its Board Committees andindividual Directors pursuant to the provisions of Companies Act 2013 and ListingRegulations. The Nomination and Remuneration Committee (NRC) specified the methodology foreffective evaluation of performance of Board and Committees and individual Directors andalso finalised the evaluation criteria (containing required particulars as per GuidanceNote issued by the SEBI) and authorized the Board to undertake the evaluation process. TheEvaluation Statement was reviewed by the Independent Directors.
The performance of individual directors was evaluated on parameterssuch as number of meetings attended contribution made in the discussions contributiontowards formulation of the growth strategy of the Company independence of judgementsafeguarding the interest of the Company and minority shareholders etc. The Board thenevaluated the performance of the Board Committees and the individual Directors in theprescribed manner.
Number of Meetings of the Board
Seven meetings of the Board were held during the year ended 31st March2020.
Key Managerial Personnel (KMP)
The Company is having the following Key Managerial Personnel during theyear
Mr. Hari Kishan Lohia Whole-time Director (Retail Trade) Mr. MaheshKumar Baja Whole-time Director (Arbitrage) Mr. Rajesh Kumar Bajaj Whole-time Director(Research) Mr. Sudheer Kumar Jain Whole-time Director Mr. Sujit Kumar Sharma CFO
Mr. Narendra Kumar Rai Company Secretary
Committees of the Board
The Board of Directors has the following
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders' Relationship Committee
4. Independent Directors Committee
The details of the Committees along with their composition number ofmeetings are provided in the Corporate Governance Report.
Loans Guarantees or Investments
Details of Loans Guarantees and Investments covered under theprovisions of Section 186(4) of the Companies Act 2013 are provided in the Notes toFinancial Statements.
Vigil Mechanism/Whistle Blower Policy
The Company has a Whistle Blower Policy to report genuine concerns orgrievances. The Whistle Blower Policy has been posted on the website of the Companyhttp://www.lohiasecurities.com.
Remuneration and Nomination Policy
The Company has updated its Nomination and Remuneration Policy fordetermining remuneration of its Directors Key Managerial Personnel and Senior Managementand other matters provided under Section 178(3) of the Companies Act 2013 and ListingRegulations adopted by the Board. The details of this policy have been posted on thewebsite of the Company http://wwwlohiasecurities com . .
The Remuneration Policy has also been outlined in the CorporateGovernance Report forming part of this Annual
Related Party Transactions
All transactions entered with Related Parties for the year under reviewwere in ordinary course of business and on arm's length basis and thus a disclosurein Form aoC-2 in terms of Section 134 of the Companies Act 2013 is not required. Furtherthere is no material related party transaction during the year. All related partytransactions are mentioned in the Notes to Accounts.
All Related Party Transactions are placed before the Audit Committee(for approval) Directors on a quarterly basis. There has not been any Omnibus approvalfor such transactions pursuant to Regulation 23 of the Listing Regulations 2015.
In line with the requirements of the Companies Act 2013 and ListingRegulations your Company has updated its Policy on Related Party Transactions which isalso available on http://www.lohiasecurities.com . The Policy intends to ensure thatproper reporting approval and disclosure processes are in place for all transactionsbetween the Company and Related Parties.
Risk Management Policy and Internal Financial Control
The Company has a risk management policy the objective of which is tolay down a structured framework for identifying potential threats to the organization on aregular basis assessing likelihood of their occurrence designate risk owners tocontinually evaluate the emergent risks and plan measures to mitigate the impact on theCompany to the extent possible. The framework and the system are reviewed from time totime to enhance their usefulness and effectiveness. The policy recognizes that all risksin the business cannot be eliminated but these could be controlled or minimized througheffective mitigation measures effective internal controls and defining risk limits Acomprehensive Risk Management Framework has been put in place for each of the businessessegments of the Company which is stringently followed for the management of risksincluding categorization thereof based on their impact on the organization. Suchcategorization gives highest weight age to the risks which have the potential to threatenthe existence of the Company. The risks with higher severity receive more attention andmanagement time and it is the endeavor of the Company to strengthen internal controls andother mitigation measures on a continuous basis to improve the risk profile .Company ofthe Risk Management System has been integrated with the requirements of internal controlsas referred to in Section 134(5)(e) of the Companies Act 2013 to evolve risk relatedcontrols.
The Company has neither accepted nor renewed any deposits during theyear. No deposit has remained unpaid or unclaimed at the end of the year under review.
Going Concern Status
The Regulators or Courts or Tribunals impacting the going concernstatus of the Company and its operation in the future have passed no significant andmaterial orders
Material Changes and Commitments
There has not been any material change and commitment affecting thefinancial position of the Company occurred between the end of the Financial Year 2019-20and the date of the Report.
Based on quarterly reports on the status of statutory compliance fromDepartmental Heads/ Responsibility Centres the Company Secretary issues Certificate underSection 205 of the Companies Act 2013 (Act) and Rules made there under. The Certificateis also endorsed by the Whole time Director of the Company and placed before the AuditCommittee and Board of Directors for review. The status of Statutory Compliance isverified by the Internal Auditors and Secretarial Auditors pursuant to Sections 138 and204 of the Companies Act 2013 as well as Annual Secretarial Compliance Report pursuant toReg. 24A of Listing Regulations.
Annual Return of the Company pursuant to the provisions of Section 92of the Companies Act 2013 has been uploaded to the website of the Company and can beaccessed at http://wwwlohiasecurities.com . . The extract of Annual Return in Form MGT-9pursuant to aforesaid provision of the Companies Act 2013 and Rules made there under isattached to this report as annexure -E
M/s. Vasuudeo & Associates Chartered Accountants 5 &6 FancyLane 3rd floor Room no. 9 Kolkata 700 001 (Firm Registration No. 319299E) wereappointed as the Statutory Auditors of the Company for a period of 5 (five) consecutiveyears for the period from Financial Year 2017-18 to 2022-23 at the 23rd AGM of theCompany held on 23-Sep-17.
The Board and the Audit Committee has approved their continuation asStatutory Auditors of the Company for the Financial Year 2020-21 based on their consentand confirmation of eligibility.
The Notes on financial statement referred to in the Auditors'Report are self-explanatory and do not call for any further comments. The Auditors'Report does not contain any qualification reservation adverse remark or disclaimer.
In terms of the requirements of Section 204 of the Companies Act 2013and the Companies (Appointment & Remuneration of Managerial Personnel) Rules 2014M/s. Poonam Binani Practicing Company Secretaries has been re-appointed to conduct theSecretarial Audit of the Company for FY 2019-20.
Based on the consent received from M/s. Poonam Binani. andrecommendation of the Audit Committee the Board has appointed her as Secretarial Auditorof the Company for FY 2020-21.
The Secretarial Audit Report for FY 2019-20 (attached as Annexure C) isfree from any qualification.
The Company is not engaged in production of goods or providing servicespursuant to Section 148 of the Act and therefore not required to comply with therequirements thereunder.
Board's Response on Auditors' Qualification Reservation orAdverse Remark or Disclaimer Made
There are no qualifications reservations or adverse remarks made bythe Statutory Auditors in their report or by the Practicing Company Secretary in theirSecretarial Audit for FY 2019-20. During the year there has been no instances of fraudsreported by Auditors under section 143(12) of the Companies Act 2013.
Significant and Material Orders Passed by the Courts/ Regulators
Disclosure under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act
The Company has a Prevention of Sexual Harassment Policy in line withthe requirements of Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. During the period under review no complaint was received by theInternal Complaint Committee.
Conservation of Energy and Technology Absorption
Since the Company does not own any manufacturing facility the otherparticulars relating to conservation of energy and technology absorption stipulated in theCompanies (Accounts) Rules 2014 are not applicable.
Foreign Exchange Earning and Outgo
Your Company has not earned any foreign exchange during the year underreview (Previous year - Rs. Nil). The Company has not incurred any expenses in foreigncurrency (last year-Rs. Nil) during the financial year.
The Company as an Intermediary (Stock Broker and DepositoryParticipant) is registered with the Securities and Exchange Board of India (SEBI) and isrequired to comply with the prescribed risk management measures.
Accordingly the quarterly status of various risks being faced by theCompany and measures for mitigation thereof are placed before the Audit Committee andBoard of Directors of the Company for review and appropriate measures. Further detailsabout the pertinent risks are contained in the statement of Management Discussion andAnalysis (Annexure - B).
Particulars of Employees
The ratio of the remuneration of each Director to the medianemployee's remuneration and other particulars or details of employees pursuant toSection 197(12) of the Companies Act 2013 read with Rule 5 of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 are attached to this Report asannexure - e. None of the employees of the Company is in receipt of remuneration comingunder purview of the said Section/Rule.
A Statement comprising of top 10 employees in terms of remunerationdrawn is annexed annexure - G. The said Annexure is not being sent along with this AnnualReport to the Members of the Company in line with the provisions of Section 136 of theAct. Members who are interested in obtaining these particulars may write to the CompanySecretary at the Registered Office of the Company.
Key Financial Ratio
Key financial Ratios for the financial year ended March 31 2020 areprovided in the Management Discussion and Analysis Report.
Extension of time for holding of Annual General Meeting(AGM)
Registrar of Companies West Bengal has vide his order no.ROC/WB/Admn./2020/2717 dated 08-09-2020 has extended the time for holding of AGM for thefinancial year ended 31st March 2020 by a period of three months from the due date bywhich the AGM ought to have been held in accordance with the provisions of Section 96(1)of the Companies Act 2013 due to unprecedented Covid-19 pandemic.
We acknowledge our appreciation to Shareholders Bankers Regulatorsand Clients for their continued support.
The Board also takes this opportunity to express its whole-heartedappreciation of the efforts put in by the employees at all levels. We look forward to thefuture with confidence and stand committed to creating a brighter future for allshareholders.
| ||For and on behalf of the Board || |
| ||Rajesh Kumar Bajaj ||Sudheer Kumar Jain |
|Place : Kolkata ||or Direct Whole-time ||Whole-time Director |
|Dated : 11th November 2020 ||DIN: 00080664 ||DIN: 00075103 |