Lohia Securities Ltd.
|BSE: 590082||Sector: Financials|
|NSE: N.A.||ISIN Code: INE803B01017|
|BSE 00:00 | 08 Mar||Lohia Securities Ltd|
|NSE 05:30 | 01 Jan||Lohia Securities Ltd|
Lohia Securities Ltd. (LOHIASECURITIES) - Director Report
Company director report
Your Directors have pleasure in presenting the 24th Annual Report and the auditedfinancial statements of the Company for the financial year ended 31st March 2018.
A summary of financial results of the Company and its subsidiaries for the year ended31st March 2018 is given below:
FINANCIALS OF THE COMPANY ON THE STANDALONE BASIS :
Our revenue from operations on a standalone basis decreased to ' 5989.27 lakhs from '7038.46 lakh of the previous year. Our Revenue from sale of product aggregated to '5590.16 lakh from last year's ' 6803.69 lakh.
Our total Income on a standalone basis reduced to ' 6228.64 lakhs from last year's '7141.83 lakhs. The Statement of Profit and Loss of your Company on standalone basis showsa Profit after tax of ' 194.56 lakhs against last Year 's Profit after tax of ' 281.72lakhs. The disposable profit is ' 1795.59 lakhs ('1613.03 lakhs) after taking into accountthe balance of ' 1613.03 lakhs (' 1331.31 lakhs) brought forward from the last year.
Your Directors are pleased to recommend a final dividend of ' 0.20 per equity share offace value ' 10.00 each (exclusive of dividend distribution tax) for the financial yearended 31st March 2018. The final dividend subject to approval of Members at the ensuingAnnual General Meeting will be paid within statutory period.
The Authorised Share Capital of the Company is ' 750 lakh divided into 7500000 equityshares of ' 10/- each. The paid up Equity Share Capital as on 31st March 2017 was'498.725 lakh divided into 4983000 Equity Shares of ' 10 each and including ' 0.425 lakhreceived on account of 17000 forfeited shares. There has not been any change in theEquity Share Capital of the Company during the financial year ended 31st March 2018.During the year under review the Company has neither issued shares with differentialvoting rights nor issued sweat equity or granted stock options.
TRANSFER TO RESERVES:
The Company has not transferred any amount to the reserves (Previous year: Nil) duringthe current financial year. An amount of ' 1795.59 lakh is proposed to be retained in thestatement of profit & loss against ' 1613.03 lakh of last year.
Lohia Securities Limited (Standalone)
The standalone revenue for the year was ' 6228.64 lakhs as compared to ' 7141.83 lakhsfor the year ended 31st March 2017. Operating Profit (Earnings before interestdepreciation and corporate tax) for the period ended 31st March 2018 was ' 508.53 lakhsas against ' 531.28 lakhs for the year ended 31st March 2017.
The Company has Profits before Tax of ' 278.44 lakhs (as compared to last year's Profitbefore Tax of ' 417.69 lakhs) after meeting interest expenses of ' 213.35 lakhs (lastyear's ' 90.90 lakhs) and depreciation of ' 16.74 lakhs (last year's ' 22.69 Lakhs) forthe year ended 31st March 2018. The Net Profit for the year was ' 194.56 lakhs (ascompared to last year's Net Profit of ' 281.72 lakhs).
Lohia Securities Limited (Consolidated)
The consolidated revenue of the Company for the year was ' 6260.46 lakhs a decline of13.23% as compared to previous year. There was increase in the Brokerage Income InterestIncome and Receipt of DP division. However due to increase of sale of shares mutualfund government securities profit from equity derivative transactions commoditiesderivative transactions substantial revenue was realized. There were fall in revenue fromcurrency derivative transaction and commodities derivative transaction as compared toprevious year.
The Net Group Profit after tax was '116.56 lakhs as against Profit after tax of '256.30 lakhs of last year. Summary of Consolidated Financial Results of the company &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 of NSE in Capital andF&O Segment and Trading Membership of BSE in Capital and F&O Segment. It reporteda net loss of ' 7.14 lakhs compared to previous year's net profit of '1.36 lakhs. Revenuefrom operation was ' 0.28 lakhs.
Trade City Commodities Private Limited is a member of NCDEX MCX National Spot NCDEXSpot and ICEX and is engaged in commodity trading and is registered with SEBI. TheCompany had a net loss after tax of ' 50.63 lakh against last year's Net Loss of ' 9.02lakhs.
Trade City Real Estate Private Limited is engaged in property and real estate business.It is also investing surplus moneys in shares and securities. The Company has suffered netloss of '18.17 lakhs compared to net loss of ' 18.76 lakhs of last year. Revenue fromoperation was derived from rent of ' 8.64 lakh
Trade City Barter Private Limited is a non-banking finance company and is engaged ininvestment and financing activities. The Company has a net loss of ' 2.07 lakhs comparedto last year's net profit of ' 1.00 lakh. Revenue from operations were from sale ofsecurities of ' 9.45 lakh Interest Income ' 12.86 lakh other sources ' 2.06 lakhs
In accordance with Section 129(3) of the Companies Act 2013 and Regulation 33 of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the consolidatedfinancial statements of the Company and all its subsidiary companies have been preparedand duly audited by the auditors and form part of the Annual Report. Statement containingsalient features of the financial statements of the subsidiaries are given in Form AOC-1and note 31 of the Consolidated financial statements and forms part of this report.
The Company will make available the Annual Accounts of the Subsidiary companies and therelated detailed information to any member of the Company who may be interested inobtaining the same. The annual accounts of the subsidiary companies will also be kept openfor inspection at the Registered Office of the Company and that of the respectivesubsidiary companies. The Consolidated Financial Statements presented by the Companyinclude the financial results of the subsidiary companies.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report forms an integral part of this Report andgives details of the overall industry structure developments opportunities threatsperformance and state of affairs of the Company's business internal controls and theiradequacy risk management system and is annexed as Annexure-A forming part of the Report.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to the requirement under Section 134(3)(c) read with Section 134(5) of theCompanies Act 2013 with respect to Directors' Responsibility Statement your directorshereby confirm that:
i) In the preparation of the annual accounts applicable accounting standards have beenfollowed along with proper explanation relating to material departures.
ii) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at the end of the financial year andof the profit of the company for that period;
iii) The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv) The Directors have prepared the annual accounts on a going concern basis;
v) The Directors have laid down an adequate system of Internal financial controls to befollowed by the Company and such internal financial controls are adequate and operatingeffectively; and
vi) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and were operating effectively.
ADEQUACY OF INTERNAL FINANCIAL CONTROL:
The Company has designed and implemented a process driven framework for internalfinancial controls within the meaning of the explanation of Section 134(5)(e) of theCompanies Act 2013. The internal financial controls have been documented and embedded inthe business processes.
Assurance on the effectiveness of internal financial controls is obtained throughmanagement reviews control self assessment continuous monitoring by functional expertsas well as testing of the internal financial controls systems by the internal auditorsduring the course of their audits. We believe that these systems provide reasonableassurance that our internal financial controls are designed effectively and are operatingas intended.
Your Company has not invited or accepted any deposit from the public covered in termsof Section 73 of the Companies Act 2013 read with the Companies (Acceptance of Deposits)Rules 2014. As such no amount of principal or interest was outstanding as on the date ofbalance sheet.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
In accordance with the provision of Section 152 of the Companies Act 2013 Rulesframed thereunder and Articles of Association of your Company Mr. Sudheer Kumar JainDirector is due to retire by rotation at the ensuing Annual General Meeting and beingeligible offers himself for re-appointment. Your Board is of the opinion that continuedassociation of Mr. Sudheer Kumar Jain with the Board will be of immense benefit to yourCompany and therefore recommends his re-appointment. In terms of Section 102 of theCompanies Act 2013 Regulation 36 of the SEBI (Listing Obligation and DisclosureRequirements) regulations 2015 and Secretarial Standards on General Meeting (SS-2) issuedby the Institute of Company Secretaries of India brief profiles of Mr. Sudheer Kumar Jainhave been annexed to the Notice convening 24th Annual General Meeting of the members ofthe Company and the same form an integral part of this Annual Report.
The following persons are the whole-time Key Managerial Personnel in terms of Section203 of the Companies Act 2013
DECLARATIONS GIVEN BY INDEPENDENT DIRECTORS:
The Independent Directors of the Company have submitted the declaration of Independenceas required under Section 149(7) of the Companies Act 2013 confirming that they meet thecriteria of independence under Section 149(6) of the Companies Act 2013 and Regulation16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
The Board meets at regular intervals to discuss and decide on the Company's policiesand strategy apart from other Board matters. During the financial year 2017-18 nine boardmeetings were held on April 15 2017 May 30 2017 June 23 2017 August 14 2017September 23 2017 November 14 2017 November 28 2017 December 9 2017 and February14 2018. The gap between the two board meetings did not exceed 120 days.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Board of Directors has formulated a Policy which lays down a framework forselection and appointment of Directors and Senior Management and for determiningqualifications positive attributes and independence of directors.
The Board has adopted a Policy relating to remuneration of Directors members of SeniorManagement and Key Managerial Personnel. The Nomination and Remuneration Policy has beenannexed to this Report as Annexure - B.
EVALUATION OF THE BOARD OF DIRECTORS
The Board of Directors have carried out an Annual evaluation of its performance owncommittees and individual Directors pursuant to the provisions of the Act and theCorporate Governance Requirements as prescribed by SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 on the basis of criteria such as skillsknowledge discharge of duties level of participation at the meetings etc. on the issuesto be discussed.
In a 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 directors and non-executivedirectors. Performance evaluation of independent Directors was done by the entire Boardexcluding 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 of reference andmeetings held during the year are provided in "Report on Corporate Governance"forming part of the Annual Report.
The Auditors Report does not contain any qualification reservation or adverse remarkon the financial statements for the year ended 31st March 2018.
Pursuant to the provisions of Section 139 of the Companies Act 2013 and the Companies(Audit and Auditors) Rules 2014 and pursuant to the recommendation made by the AuditCommittee of the Board of Directors of the Company Messers Vasudeo & AssociatesChartered Accountants having Registration No. 319299E allotted by The Institute ofChartered Accountants of India (ICAI) was appointed as the Statutory Auditors of theCompany from the conclusion of 23rd Annual General Meeting of the Company held on 23rdSeptember 2017 till the conclusion of the 28th Annual General Meeting to be held in theyear 2022 subject to the ratification of their appointment at every AGM. Accordingly aResolution seeking the ratification of the Members for their appointment is included atitem no. 5 of the Notice convening the AGM.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Ms. Poonam Binani Practising Company Secretary (Membership No. A33638) toundertake the Secretarial Audit of the Company. The Secretarial Audit Report for thefinancial year ended 31st March 2018 is marked as Annexure-C which is annexed hereto andforms a part of the Board Report.
QUALIFICATION RESERVATION OR ADVERSE REMARK IN STATUTORY AUDIT REPORT AND SECRETARIALAUDIT REPORT:
There is no qualification reservation or adverse remark made by the Statutory Auditorsin their Auditors' Report to the Financial Statements or by the Secretarial Auditor in itsSecretarial Audit Report for the financial year ended March 31 2018. As regard toSecretarial Audit Report for the disqualification of Mr. Rajesh Kumar Bajaj the Board ofDirectors undertakes not to re-appoint Mr. Rajesh Kumar Bajaj as Director of the Companywhen his term comes to an end if such disqualification is not removed by that time.
REPORTING OF FRAUD:
The Auditors of the Company have not reported any fraud as specified under Section143(12) of the Companies Act 2013.
COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND ANNUAL GENERAL MEETINGS:
The Company has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India on Board Meeting and Annual General Meeting.
CORPORATE SOCIAL RESPONSIBILITY:
The provision of Section 135 of the Companies Act 2013 read with Companies (CorporateSocial Responsibility Policy) Rules 2014 are not applicable to the Company since it isnot fulfilling any of the stipulated requirements of net-worth turnover and net profits.
The Company has a well defined risk management framework in place. Further it hasestablished procedures to periodically place before the Board the risk assessment andmanagement measures. The details of the risks faced by the Company and the mitigationthereof are discussed in detail in the Management Discussion and Analysis report that formpart of the Annual Report.
REPORT ON CORPORATE GOVERANANCE
The Report on Corporate Governance as stipulated in the Listing Regulations forms partof the Annual Report. The requisite Certificate from M/s. Vasudeo & Associates.Chartered Accountants confirming compliance with the conditions of corporate Governanceas stipulated under the Listing Regulations as annexed hereto as Annexure D and formspart of this Report.
PARTICULARS OF EMPLOYEES AND RELATED INFORMATION:
The particulars of the employees pursuant to the provisions of Section 197(12) of theCompanies Act 2013 read with Rule 5(2) and Rule 5(3) of the Appointment and Remunerationof Managerial Personnel) Rules 2014 are not given since none of the employees are inreceipt of a remuneration in excess of the prescribed limit. Disclosure pertaining toremuneration and other details as required under section 197(12) of the Companies Act2013 read with Rules 5(1) of the Appointment and Remuneration of Managerial Personnel)Rules 2014 are provided in Annexure-E.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS:
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in Notes to the financial statement.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
All transactions entered into during the financial year 2017-18 with Related Parties asdefined under the Companies Act 2013 and Regulation 23 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 were in ordinary course of business and onarm's length basis. During the year the Company had not entered into any transactionreferred to in Section 188 of the Companies Act 2013 with related parties which could beconsidered as material. Accordingly the disclosure of Related Party transactions asrequired under Section 134(3) of the Companies Act 2013 in Form AOC-2 is not applicable.
Attention of the members is drawn to the disclosures of transactions with relatedparties set out in Notes to Accounts-Note No. 34 forming part of the standalone FinancialStatements.
As required under Regulation 23(1) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company has formulated a Policy on Materiality of anddealing with Related Party Transactions which is available on the website of the Companyat www.lohiasecurities.com
EXTRACT OF ANNUAL RETURN:
The Extract of Annual Return as provided under section 92(3) of the Companies Act 2013and as prescribed in Form no. MGT-9 of the Companies (Management and Administration)Rules 2014 is appended as Annexure-F.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There has been no material change and commitments affecting the financial position ofthe Company which have occurred between 31st March 2018 and the date of this report otherthan those disclosed in this report.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS/OUTGO:
Your Company has no activities relating to conservation of energy and technologyabsorption as required to be disclosed under Section 134(3)(m) of the Companies Act 2013read with Rule 8(3) of the Companies (Accounts) Rules 2014. However your Company usesinformation technology extensively in its operations and also continues its endeavor toimprove energy conservation and utilization safety and environment.
Your Company has not earned any foreign exchange during the year under review (Previousyear - Nil). The Company has not incurred any travelling expenses in foreign 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 the Company isrequired to establish an effective Vigil Mechanism for directors and employees to reportgenuine concerns.
The Company has a Whistle-blower Policy in place to encourage and facilitate employeesto report concerns about unethical behavior actual/ suspected frauds and violation ofCompany's Code of Conduct Policy. The Policy has been suitably modified to meet therequirements of Vigil Mechanism under the Act. The policy provides for adequate safeguardsagainst victimization of persons who avail the same and provides for direct access to theChairperson of the Audit Committee. The Audit Committee of the Company oversees theimplementation of the Whistle Blower Policy.
The Company has disclosed information about the establishment of the Whistle BlowerPolicy on its website www.lohiasecurities.com . During the year no personal has beendeclined access to the Audit Committee wherever desired.
PROTECTION OF WOMEN AT WORKPLACE:
The Company has formulated a policy on "Protection of Women's Rights atWorkplace" as per the provision of the Sexual Harassment of Women as Workplace(Prevention Prohibition & Redressal) Act 2013. This has been widely disseminated.There were no cases of sexual harassment received by the Company in 2017-18.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS:
During the year under review there were no material and significant orders passed bythe regulators or courts or tribunals impacting the going concerns status and theCompany's operations in future.
BUSINESS RESPONSIBILITY REPORT:
The Company is not mandatorily required to furnish the Business Responsibility Reportdescribing the initiatives taken by the Company from an environmental social andgovernance perspective as per clause (f) of Subregulation (2) of regulation 34 ofSecurities and Exchange Board of India (SEBI) Listing Regulations.
TRADING OF SHARES:
The equity share of the Company has been traded on the BSE terminal under the permittedto trade category since 02/05/2008. The trading of shares of the Company was suspended onBSE terminal with effect from 8th March 2017. However BSE Ltd. vide its Noticeno.20171024-9 dated 24th October 2017 announced the recommencement of trading ofsecurities of Lohia Securities Ltd. (Scrip Code: 590082) on its terminals under"Permitted to Trade" category with effect from 27th October 2017.
Your Directors record their appreciation for the encouragement assistance andco-operation received from members government authorities officials of SEBI Exchangesand Depositories banks clients and all other stakeholders. They also thank them for thetrust reposed in the Management and wish to thank all employees arbitrators dealerssub-brokers for their commitments and contribution.