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S R G Securities Finance Ltd.

BSE: 536710 Sector: Financials
NSE: N.A. ISIN Code: INE326P01019
BSE 00:00 | 06 Sep S R G Securities Finance Ltd
NSE 05:30 | 01 Jan S R G Securities Finance Ltd
OPEN 44.00
PREVIOUS CLOSE 44.00
VOLUME 12000
52-Week high 44.00
52-Week low 44.00
P/E 38.94
Mkt Cap.(Rs cr) 24
Buy Price 0.00
Buy Qty 0.00
Sell Price 44.00
Sell Qty 3000.00
OPEN 44.00
CLOSE 44.00
VOLUME 12000
52-Week high 44.00
52-Week low 44.00
P/E 38.94
Mkt Cap.(Rs cr) 24
Buy Price 0.00
Buy Qty 0.00
Sell Price 44.00
Sell Qty 3000.00

S R G Securities Finance Ltd. (SRGSECURITIES) - Director Report

Company director report

To

The Members

The Board of Directors of your Company take pleasure in presenting before you the 24thAnnual Report of the Company together with the Audited Financial Statements for thefinancial year ended March 31 2019.

FINANCIAL SUMMARY/HIGHLIGHTS OPERATIONS & STATE OF AFFAIRS:

(Rs. In Lakhs)

Particulars 2018-19 2017-18
Gross Income 381.31 318.68
Less: Finance Cost 121.72 113.46
Overheads 172.91 131.77
Depreciation 5.85 8.18
Profit before Tax & Exceptional Items 80.83 65.27
Add : Exceptional Items 0.00 0.00
Profit Before Tax 65.27
80.83
Less : Tax Expenses (Including Deferred Tax) 19.94 15.94
Profit After Tax 60.89 49.33
Add : Balance b/d from the previous year 106.23 83.06
Surplus available for Appropriations 167.12 132.39
Appropriations:
Transferred to Special Reserve 12.30 9.90
Provision for Standard Assets 0.51 0.72
Provision for NPA 126.95 14.93
Additional Provision for Income Tax 0.02 0.61
Balance carried over to Balance Sheet 27.34 106.23

Note: Figures have been regrouped / reclassified / rearranged wherever necessarywhile preparing the above statement.

LENDING OPERATIONS & DISBURSEMENT OF LOANS:

Your Company registered a remarkable growth in its operations. The highlights ofCompany’s

Performance are as follows:

• As at 31st March 2019 the loan portfolio stood at Rs. 1989.05 Lakhs as againstRs.

1790.28 Lakhs in the previous year representing an increase of 11.10%.

• Disbursements during the year amounted to Rs. 455.53 Lakhs as against Rs.1064.08 Lakhs in previous year.

• The Operating Profit i.e. Profit before tax amounted to Rs. 80.83 Lakhs in theyear 2018-19 as against Rs. 65.27 Lakhs in the preceding year; representing a rise of23.83%.

• Profit after Tax (PAT) before extraordinary items went up by 23.41% to Rs. 60.89Lakhs in the year 2018-19 from Rs. 49.34 Lakhs in the previous year.

DIVIDEND:

Your Directors felt it prudent to retain the earnings for the year under review to beploughed back in business which shall result in further augmentation of theCompany’s growth and Shareholders’ wealth.

CHANGES IN SHARE CAPITAL:

During the year under review there is no change in share capital of the Company.

BORROWINGS:

Banks and Financial Institutions:

The Company did not avail fresh credit facilities during the year 2018-19. Theoutstanding credit facilities from Banks and Financial Institutions as at March 31 2019amounts to Rs. 991.16 lakhs.

Ratings:

The Bank loan facilities of the Company have been rated by Brickwork Ratings theCredit Rating agency as BWR BB Outlook: Stable. Further CARE Rating was Care BB withdrawnwith effect from March 8 2019 on the voluntary request of the Company.

UNCLAIMED DIVIDEND AND UNCLAIMED SHARES:

Under the provisions of Section 124 and 125 of The Companies Act 2013 and Rules framedthereunder and Investor Education and Protection Fund Authority (Accounting AuditTransfer and Refund) Rules 2016 read with the relevant circulars and amendments theretodividends that remain unclaimed for a period of seven years from the date of declarationare required to be transferred to the Investor Education and Protection Fund (IEPF)administered by the Central Government. Further as per the provisions of Section 124(6) ofThe Companies Act 2013 read with the Investor Education & Protection Fund Authority(Accounting Audit Transfer & Refund) Rules 2016 the shares in respect of which thedividend has not been claimed for seven (7) consecutive years are required to betransferred by the Company to the designated Demat account of the IEPF Authority.

As at March 31 2019 there is no unpaid/ unclaimed Dividend and the shares to betransferred to the Investor Education & Protection Fund.

MANAGEMENT DISCUSSION AND ANALYSIS:

Pursuant to SEBI (LODR) Regulations 2015 and Circular/ Notifications/Directionsissued by RBI from time to time Report on Management Discussion and Analysis is annexedherewith as Annexure IV.

SUBSIDIARY COMPANIES:

The Company does not have any subsidiary company.

DIRECTOR’S RESPONSIBILITY STATEMENT:

In pursuance of Section 134 (3) (c) read with Section 134(5) of The Companies Act2013 and based on the information provided by the management your Directors herebyconfirm that: a. In the preparation of the annual accounts the applicable accountingstandards have been followed; b. Accounting policies selected were applied consistently.Reasonable and prudent judgments and estimates were made so as to give a true and fairview of the state of affairs of the Company as at March 31 2019 and of the profit of theCompany for the year ended on that date; c. Proper and sufficient care has been taken forthe maintenance of adequate accounting records in accordance with the provisions of TheCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting frauds and other irregularities; d. The annual accounts of the Company have beenprepared on a going concern basis; e. Internal Financial Controls have been laid down tobe followed by the Company and such Internal Financial Controls were adequate and wereoperating effectively; f. Systems to ensure compliance with the provisions of allapplicable laws were in place and were adequate and operating effectively.

CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:

Your Company has taken adequate steps to adhere to all the stipulations laid down inthe SEBI (LODR) Regulations 2015 RBI Directions and the Companies Act 2013 and Rulesthereto as amended from time to time.

Pursuant to the SEBI (LODR) Regulations 2015 RBI Directions and disclosures asrequired under The Companies Act 2013 and the Rules thereto a separate Section titled‘Report on Corporate Governance’ forms part of this Annual Report as

Annexure V.

Certificate from the Statutory Auditors of the Company confirming the compliance withthe conditions of Corporate Governance as stipulated under SEBI (LODR) Regulations 2015is attached to this report. The said certificate for the financial year 2018-19 does notcontain any qualification reservation or adverse remarks. In terms of Section 136 of TheCompanies Act 2013 the reports and accounts are being sent to the members and othersentitled thereto in the prescribed form.

RELATED PARTY TRANSACTIONS:

All contracts / arrangements / transactions entered by the Company with related partiesare in the ordinary course of business and on an arm’s length basis. Your Directorsdraw attention of the Members to Note no. 23 to the Financial Statements which sets outrelated party disclosures. During the year the Company had not entered into any contract/ arrangement / transaction with related parties which could be considered material inaccordance with the policy of the Company on materiality of related party transactionsaccordingly information is not given in Form AOC-2. The Policy on materiality of relatedparty transactions and dealing with related party transactions as approved by the Boardmay be accessed on the Company’s website at the link

(http://srgfin.com/BestPracticesSub/26/Policy%20 on%20Related%20Party).

RISK MANAGEMENT POLICY:

Pursuant to Section 134 (3) (n) of The Companies Act 2013 & SEBI (LODR)Regulations 2015 the Company has in place a risk management framework approved by theBoard of Directors.

SRGSFL’s Risk Management framework provides the mechanism for risk assessment andmitigation. Company has in place Risk Management Committee. The details of the Committeeand its terms of reference are set out in the Corporate Governance report forming part ofthe Boards report. At present the Company has not identified any element of risk which maythreaten the existence of the Company.

CORPORATE SOCIAL RESPONSIBILTY POLICY:

Pursuant to the provisions of Section 135 and Schedule VII of The Companies Act 2013at present the CSR provisions are not applicable to the Company.

DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit function isdefined by board. To maintain its objectivity and independence the Internal Auditorreports to the Chairman of the Audit Committee of the Board and/or to the ManagingDirector. The Internal Auditor monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies of the Company. Based on the report of internal auditorrespective heads undertake corrective actions in their respective areas and therebystrengthen the controls. Significant audit observations and recommendations along withcorrective actions thereon are presented to the Audit Committee of the Board and/or to theManaging Director.

DIRECTORS:

During the year Ms. Richa Bhandari was appointed as Non-Executive Director of thecompany w.e.f. from 7th September 2018 and she is liable to be retire by rotation. Duringthe year Mrs. Seema Jain was re-appointed as Whole time Director with effect from 20thJuly 2018 and subject to her re-appointment terms she is not liable to retire byrotation. In accordance with the provisions of The Companies Act 2013 and the Articles ofAssociation of the Company Mrs. Richa Bhandari Non-ExecutiveDirector who is liable toretire byrotation retires by rotation and being eligible; offers herself forre-appointment at the ensuing 24th Annual General Meeting. The tenure of Mr. Arjun LalJain and Mr. Nishant Badala Independent Directors of the Company will come to end on theconclusion of ensuing 24th Annual General Meeting of the Company.

Considering their knowledge and expertise the Nomination and Remuneration Committeeproposed their reappointment for further period of 5 years i.e. upto the conclusion of29th Annual General Meeting of the Company to be held in the Calendar year 2024 in termsof Section 149(10) of the Companies Act 2013. The necessary resolution for re-appointmentof the aforesaid directors and their detailed profile has been included in the Noticeconveying the ensuing 24th Annual General Meeting. All the directors of the Company haveconfirmed that they are not disqualified from being appointed as directors in terms ofSection 164 of the Companies Act 2013 and all the Directors have filed their consents anddeclarations as required under the provisions of Companies Act 2013 SEBI (LODR)Regulations 2015. During the year under review Board of Directors of the Company intheir meeting held on 22ndJanuary 2019 accepted resignation of Ms. Garima Soni from thepost of Company Secretary and appointed Ms. Divya Kothari as the Company Secretary cumCompliance Officer of the Company with effect from 22ndJanuary 2019.

DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS:

The Company has received necessary declaration from each Independent Director of theCompany under Section 149(7) of The Companies Act 2013 and Regulation 25(8) of SEBI(LODR) Regulations 2015 that the Independent Directors of the Company meet with thecriteria of their Independence as laid down in Section 149(6) of The Companies Act 2013and Regulation 16(1)(b) of SEBI (LODR) 2015.

AUDITORS:

STATUTORY AUDITOR:

Pursuant to the provisions of Section 139 142 and all other applicable provisions ofthe Companies Act 2013 and Rules made thereunder M/s. PKJ & Co. CharteredAccountants (Registration No. 124115W) appointed by the members at the 22nd AnnualGeneral Meeting held on September 30 2017 as the statutory Auditor of the Company for aperiod of five years upto the conclusion of 27th Annual General Meeting to be held in year2022 will continue as the Statutory Auditors of the Company on such terms and conditionsas may be decided by the Board.

The requirement of placing the matter relating to such appointment for ratification bymembers at every annual general meeting has been dispensed with due to omission of thefirst proviso to Section 139(1) by the Companies (Amendment) Act 2017 effective from May07 2018 as per the Notification issued by Ministry of Corporate Affairs Govt. of India[File No.1/1/2018-CL.I dated May 07 2018] and accordingly the approval of theShareholders have been obtained in last year’s 23rd Annual General Meeting for histerm of five year till the conclusion of 27thAnnual General Meeting of the Company to beheld in year 2022 without ratification at every Annual General Meeting. Accordingly thenotice convening the ensuing Annual General Meeting does not carry any resolution onratification of the appointment of the Statutory Auditors. The Statutory Auditors haveaudited the books of accounts of the Company for the financial year ended

March 31 2019 and have issued the Auditors’ Report thereon.

SECRETARIAL AUDITOR:

M/s Deepak Vijaywargey & Associates Practicing Company Secretary Udaipur wasre-appointed as the Secretarial Auditor of the Company for the financial year 2018-19 bythe Board of Directors pursuant to provisions of The Companies Act 2013 and Rules thereunder. Secretarial audit report as provided by M/s Deepak Vijaywargey & AssociatesPracticing Company Secretary is annexed to this Report as

"Annexure - I".

QUALIFICATIONS IN AUDIT REPORT:

There are no qualifications reservations or adverse remarks or disclaimer made: (a) Bythe Statutory Auditor in his report; and (b) By the Company Secretary in Practice in hisSecretarial Audit Report.

DISCLOSURES: BOARD MEETINGS:

The Board of Directors met 11 (Eleven) times during the financial year 2018-19.

COMPOSITION OF BOARD COMMITTEES:

1. The Audit Committee consists of adequate

composition of Executive and Non- Executive Independent Directors. The details of whichare mentioned in the Corporate Governance Report.

2. The Nomination & Remuneration Committee consists of composition of Non-ExecutiveDirectors. The details of which are mentioned in the Corporate Governance Report.

3. The Stakeholder’s Relationship Committee consists of adequate composition ofExecutive and Non- Executive Independent Directors. The details of which are mentioned inthe Corporate Governance Report.

MATTERS AS PRESCRIBED UNDER SUBSECTIONS (1) AND (3) OF SECTION 178 OF THE COMPANIESACT 2013:

The Nomination & Remuneration Committee consists of composition of Non- ExecutiveDirectors out of which two are Independent Director and one is Non-Executive Director. Thecopy of Nomination and Remuneration policy is available at the Website of the Company i.e.https://www.srghousing.com/DataImages/downloa d/POLICY.pdf

CRITERIA ADOPTED FOR EVALUATION:

Pursuant to the provisions of Section 134(3)(p) the Companies Act 2013 the Board hascarried out the annual performance evaluation of its own performance the Directorsindividually as well as the evaluation of the working of its Committees. A structuredquestionnaire was prepared after taking into consideration inputs received from theDirectors covering various aspects of the Board’s functioning such as adequacy ofthe composition of the Board and its Committees Board culture execution and performanceof specific duties obligations and governance. (i) Performance review of all theNon-Independent Directors of the company on the basis of the activities undertaken bythem expectation of board and level of participation; (ii) Performance review of theExecutive Directors of the company in terms of level of competence of in steering thecompany; (iii) The review and assessment of the flow of information by the company to theboard and manner in which the deliberations take place the manner of placing the agendaand the contents therein; (iv) The review of the performance of the directorsindividually its own performance as well as evaluation of working of its committees shallbe carried out by the board;

PARTICULARS OF LOANS GAURANTEES OR INVESTMENTS:

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 if any apart from the loans made guarantee given orsecurity provided by the Company in the ordinary course of business are given in theNotes to accounts forming part of the Audited Financial Statements for the year endedMarch 31 2019.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO: (A)Conservation of energy:

The Company’s operations are not power intensive.

Nevertheless your Company is taking every step to conserve and minimize the use ofenergy wherever possible such as using energy efficient computer terminals purchasingenergy efficient equipment’s etc.

(B) Technology absorption:

The Company has imported no technology. Indigenous technology available is continuouslyupgraded to improve overall performance.

(C) Expenditure incurred on research and development:

The Company has no formal research and development department but the Company iscontinuously making efforts to strengthen research and development activities to improvequality and reduce cost.

(D) Foreign exchange earnings and Outgo:

During the year under review there was no earnings and outgo in foreign exchange.

REQUIREMENT FOR MAINTENANCE OF COST RECORDS:

Since the Company is Non-Banking Finance Company (NBFC) the Company is not required tomaintain cost records as specified by the Central Government under section 148 (1) of theCompanies Act 2013.

EXTRACT OF ANNUAL RETURN:

As required pursuant to Section 92(3) of The Companies Act 2013 and Rule 12(1) of TheCompanies (Management and Administration) Rules 2014 the details forming part of extractof annual return in MGT-9 is annexed herewith as Annexure III and pursuant to Section 134(3) (a) of the said Act the same has also been placed on the website of the Company atwww.srgfin.com.

PARTICULARS OF EMPLOYEES:

As at March 31 2019 there was no employee employed throughout the year who was inreceipt of remuneration of Rs. 1.02 Crores or more per annum or Rs. 8.50 Lakhs or more permonth if employed for the part of the year.

EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:

There are no material changes and commitments affecting financial position of theCompany between March 31 2019 and the date of Board’s Report.

CHANGE IN THE NATURE OF BUSINESS:

There are no changes in the nature of Business. DETAILS RELATING TO DEPOSITS:

Your Company has not accepted any deposits from the public during the year under review.The Company has been granted registration by the Reserve Bank of India as a non-deposittaking NBFC. Being so the Company has neither accepted in the past nor has any futureplans to accept any public deposits.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS:

The Company has been following directions guidelines circulars issued by SEBI BSEMCA RBI etc. from time to time relating to companies and that there are no significant& material orders passed by these regulators so far.

DISCLOSURES ON MANAGERIAL REMUNERATION:

Details of Managerial remuneration as required under Rule 5(1) of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 read with The Companies(Appointment and Remuneration of Managerial Personnel) Amendment Rules 2016 is given as "Annexure-VII"to this report.

LISTING WITH STOCK EXCHANGES:

The Company confirms that it has paid the Annual Listing Fees for the year 2018-19 toBSE SME where the Company’s Shares are listed.

INVESTOR COMPLAINTS AND COMPLIANCE:

During the year company has not received any investor complaints and that as on date nocomplaints are pending.

EARNINGS PER SHARE (EPS):The Earnings Per Share (EPS) is Rs. 1.13 as at March 31st2019 as against Rs. 1.23 as at March 31st 2018.

CAPITAL ADEQUACY:

Particulars as on 31st 2019 2018
March
Capital Adequacy Ratio 51.38% 51.26%

Your Company’s capital adequacy ratio was 51.38% as on 31st March 2019 which webelieve provides an adequate cushion to withstand business risks.

NON-PERFORMING ASSETS AND PROVISIONS FOR CONTINGENCY:

Your Company adhered to the prudential guidelines for Non-performing Assets (NPAs)issued by Reserve Bank of India as amended from time to time. As per the prudentialnorms the income on such NPAs is not to be recognized if unrealized. As per theprudential norms prescribed by the Reserve Bank of India the Company has made provisionfor contingencies on standard as well as non-performing assets.

DECLARATION UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013:

As required under the provision of Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and rules framed thereunder the Company hasimplemented a policy on Sexual Harassment of Women at Workplace. An internal complaintcommittee has been set up to receive complaints investigate matter and report to themanagement. An Internal Committee has been constituted to receive complaints investigatematter and report to the management. Pursuant to the provisions of Section 22 of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013the complaints received thereunder and the details relating thereto are as follows:

(a) Number of complaints pending at the beginning of the year: Nil

(b) Number of complaints received during the year: Nil (c)Number of complaints disposedof during the year: Nil (d) Number of cases pending at the end of the year: Nil

Your Directors state that during the year under review there were no cases filedpursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.

A NOTE OF APPRECIATION:

Your Directors of the Company place on record their appreciation for the adviceguidance and support given by various regulatory authorities including the Reserve Bank ofIndia (RBI) Securities and Exchange Board of India (SEBI) Ministry of Corporate Affairs(MCA) Stock Exchange (BSE) Depositories (NSDL & CDSL)and all the bankers and Lendersof the Company. The Directors would also like to acknowledge the role of all itsstakeholders shareholders borrowers key partners and lenders for their continuingsupport to the Company. Directors also record their appreciation for the dedicatedservices of the employees and their contribution to the growth of the Company. The Boardwould also like to express its sincere appreciation to all the Company’s valued

Shareholders Registrar & Share Transfer Agent Rating agencies local/ statutoryauthorities Service Providers and Counselors for their continued support and patronage.

Best Wishes
sd/- sd/-
Vinod K. Jain Seema Jain
Managing Director Director
DIN: 00248843 DIN: 00248706
Date: - 30.05.2019
Place: - Udaipur