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Shardul Securities Ltd.

BSE: 512393 Sector: Financials
NSE: SHRIYAMSEC ISIN Code: INE037B01012
BSE 00:00 | 19 Aug 92.00 1.60
(1.77%)
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NSE 05:30 | 01 Jan Shardul Securities Ltd
OPEN 94.95
PREVIOUS CLOSE 90.40
VOLUME 39
52-Week high 135.25
52-Week low 55.45
P/E
Mkt Cap.(Rs cr) 161
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 94.95
CLOSE 90.40
VOLUME 39
52-Week high 135.25
52-Week low 55.45
P/E
Mkt Cap.(Rs cr) 161
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Shardul Securities Ltd. (SHRIYAMSEC) - Director Report

Company director report

s

FOR THE FINANCIAL YEAR 2020-2021

To

The Members of

Shardul Securities Ltd.

Your Directors are pleased to present the Thirty-Sixth Annual Report and the AuditedAccounts for the year ended March 312021.

1. Financial Results:

(Rs. in lakhs)

2020-2021 2019-2020
Profit/(Loss) before Depreciation 1854.80 (851.72)
Less: Depreciation 27.67 27.80
Profit/(Loss) before Taxation 1827.13 (879.52)
Less: Tax Expenses
Current tax 33.85 21.00
Deferred Tax 416.53 (252.78)
Profit / (Loss) after Taxation 1376.75 (647.74)
Other Comprehensive Income 8936.93 (3177.87)
Total Comprehensive Income 10313.68 (3825.61)

2. Impact of the covid-19 pandemic on the business of the company:

During the current FY 2020-21 the COVID-19 pandemic developed rapidly globally therebyforcing the government to enforce complete/partial lock-down time to time. Almost alleconomic activities except essential services which were allowed to operate with limitedstaff strength were affected. As capital markets and banking services were declared asessential services your Company continued its operations by strictly adhering to theminimal staff strength requirement and maintaining social distancing and other precautionsas per the Government directions.

In order to ensure health and wellbeing of the employees employees were encouraged towork from home and were provided necessary infrastructure to ensure efficient functioning.All operations and servicing of clients were smoothly ensured without any interruptions asthe activities of trading settlement Stock Exchanges and depository functions arefully-automated and seamless. Based on the facts and available figures the Company hasbeen operating in the normal course and there have been no adverse impact on theliquidity revenues or operational parameters during the year ended March 312021.

3. Dividend:

In view of conserving resources of the Company your Directors do not recommend anydividend for the financial year ended March 312021.

4. Transfer to Reserves:

As per requirement of RBI regulations the Company has transferred to Statutory ReserveFund an amount of Rs. 275.35 Lakhs in Financial Year ended March 312021.

5. Consolidated Financial Statements:

The Consolidated Financial Statements of the Company and its subsidiary prepared inaccordance with Indian Accounting Standards notified under the Companies (IndianAccounting Standards) Rules 2015 (‘Ind AS') form part of the Annual Report and arereflected in the Consolidated Financial Statements of the Company.

6. Share Capital:

The paid up Equity Share Capital of the Company as on March 31 2021 is Rs.174984330/- comprising of 17498433 equity shares of Rs. 10/- each. We would like toinform to our shareholders that there is no change in the paid up equity capital of theCompany during FY 2020-21.

7. Change In The Nature Of Business:

There was no change in the nature of the business of your Company during the financialyear.

8. Material Changes And Commitments Affecting The Financial Position Of Your Company:

There were no material changes and commitments affecting the financial position of yourCompany between the end of FY 2020-21 and the date of this report which could have animpact on your Company's operations in the future or its status as a "GoingConcern".

9. Management Discussions and Analysis Report:

Financial Performance:

(i) Overall Economic View

The year under reporting continued to reel under pressure globally thanks to thewidespread pandemic and India was no exception. In fact India suffered more during thelast quarter that spilled over the next year as well.

The various measures taken by the Government to protect the precious lives of thepeople resulted in lock downs over a long period during the reporting year. The privateenterprises suffered the blunt of the burden by not being able to even keep their doorsopen let alone the employees being able to turn around.

A few industries in IT segment worked fairly on even scale thanks to the technology butindustries that required manpower suffered that resulted in huge downward swing inproduction and employment. Agriculture sector did well as the rural and semi urban areadid not suffer the same impact as the urban and metropolitan areas suffered.

If we analyze the overall impact agriculture production was on the rise IT segmentcontributed significantly to the GDP foreign exchange reserves went up significantlyalmost crossing 600 billion dollars a record high indicating the influx of remittancesinvestments and transfer of foreign held funds. The GDP contracted by 7.3 percent asagainst 8 percent during the previous year that clearly reflects the state of economy thatprevailed.

Indian exports and imports shrank by more than 6 percent during the year indicating theextent of the slowdown of the economy.

However the Government has projected a GDP growth rate of about 9.4 percent for theensuing year as the green shoots are visible thanks to various economic measures initiatedby the Government.

(ii) Industry Structure and Developments:

The financial sector witnessed a heavy stress and strain as recovery of loans andadvances was probably at its lowest levels. Moratorium of payment of interest andinstalments consequent to wage cuts and unemployment resulted on lower growth in incomecoupled with increase in expenses. As a result the performance of Banking sector is likelyto witness lower profitability and growth.

The same situation could prevail in NBFC segment though the loan offtakes haveincreased in the retail segment consequent to increased activities on account of adequatedemand in food medical and other consumables.

The capital market however witnessed a conflicting position by increase in index valuesboth in NSE and BSE touching record levels. The retail investors appear to have enteredthe capital markets significantly that propelled the market to new highs.

Notwithstanding the volatility and speculative investments the boost in indices haveprompted corporates to come out with new public issues in a big way and the market supporthas been fairly encouraging.

(iii) Business Review:

Despite the economic slowdown high volatility in capital markets and otheruncertainties your company could achieve comparable results with that of the previousyear. The setback suffered during the previous year end got reversed the current year asis evidenced in the financial statements thanks to higher turnover in capital marketscoupled with recovery of index levels. However these profits are more by way of valuationalbeit there was marginal increase in income by way of operations also.

(iv) Opportunities and Threats:

The GDP is projected to recover to around 9.4 percent which is not a bad news forbusiness growth. The Government has announced several measures to boost the economicactivities but it remains to be seen if these measures would be adequate to bring aturnaround in the economy to the expected levels. However the continued support incapital market activities give hopes of a turn around for companies like us and thereforewe may witness better results in coming year.

(v) Segment-wise - Product-wise reporting:

As there has been no change in your company's business activities and brokingactivities there are no separate reportable segment.

(vi) Outlook:

Your company expects the capital markets continuing to perform better due to increasedparticipation by retail investors and also due to anticipated respite in spread of thepandemic in the coming months. If the efforts of the Government and other global agencieshold good then we can see a growth spurt that might help all business entities across thespectrum to perform better.

(vii) Risks and Concerns:

Your company's activities which are essentially in the capital market segments and therisk perception of our activity could be discerned as under:

Market Risk: Your company's major investments are mostly in capital market instrumentslike shares mutual funds and bonds and any volatility could erode the capital value ofthe investments. No doubt your company would keep a close vigil on movement of prices andtake appropriate steps to minimize this risk.

Interest risk: The changes in interest rates by RBI and Banks could result influctuations in prices and consequently the income of various investments and borrowingsby the company may vary. Your company has put in measures to hedge this risk but thiscannot be eliminated totally.

Operation Risk: The stock market operations are fraught with certain risks associatedwith market judgments by operational executives and their decision making process based oncertain perceptions prevailing at any given time and these could change suddenly resultingin unexpected adverse positions.

(viii) Internal Financial Control Systems and their Adequacy:

Your company has in place adequate internal control measures. There is continuousmonitoring of all the activities and necessary creative measures are taken periodically tomanage any unforeseen risk factors.

(ix) Human Resources:

Your company has adequate trained professionals to manage the affairs of the company inthe most prudent manner.

(x) Details of significant changes in key financial ratios are given in Annexure A tothe Board Report.

10. Subsidiaries:

Shriyam Broking Intermediary Limited a wholly owned subsidiary of the company achieveda better result during the year thanks to increased activities in capital market segments.The net profit for the year was at about Rs.173 lakhs as against a modest sum of Rs.7lakhs during the previous year. The current market scenario looks to augur well in thecoming year and it will be our endeavor to ensure that our performance improves on asustained basis.

Shriyam Realtors Private Limited a wholly owned subsidiary of Shriyam BrokingIntermediary Limited was incorporated on 15th December 2016. However thecompany had very nominal transactions so far in view of the sluggish health of real estatemarket.

A statement containing the salient features of the financial statements of thesubsidiaries in the prescribed format AOC-1 forms part of notes to ConsolidatedFinancial statement.

11. Names of Companies which have become or ceased to be its subsidiaries jointventures or associate companies during the year:

During the year under review no company has ceased to be its subsidiaries. The Companydoesn't have any joint ventures or associate company.

12. Directors:

In compliance with Section 152 of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. Yogendra Chaturvedi (holding Din No. 00013613) Whole-timeDirector retires by rotation and being eligible offers himself for reappointment. Aresolution seeking shareholders' approval for re-appointment of Mr. Yogendra Chaturvediforms part of the Notice of the 36th AGM. The Board has recommended his re-appointment.

Brief resume of Mr. Yogendra Chaturvedi nature of his experience in specific functionsand area and number of companies in which he hold membership/chairmanship of BoardCommittees as stipulated under regulation 36(3) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (LODR) are provided in the Report of CorporateGovernance forming part of the Annual Report.

13. Declarations by Independent Directors:

All the Independent Directors of your Company have submitted their declarations ofindependence as required pursuant to the provisions of Section 149(7) of the Actstating that they meet the criteria of independence as provided in Section 149(6) of theCompanies Act 2013 and Regulation 16(1 )(b) of the LODR and are not disqualified fromcontinuing as Independent Directors of your Company.

None of the Independent Non-Executive Directors held any equity shares of your Companyduring the financial year ended 31 March 2021. None of the Directors had anyrelationships inter-se.

14. Independent Director's Databank Registration:

Pursuant to a notification dated 22nd October 2019 issued by the Ministry of CorporateAffairs all Independent directors of the Company have registered themselves with onlinedatabank for Independent Directors maintained by Indian Institute of Corporate Affairs(IICA).

The Company has received declarations from all the Independent Directors of the Companyconfirming that they have registered their names in the Independent Directors' databankmaintained by Indian Institute of Corporate Affairs (IICA) as prescribed by MCA.

15. Familiarisation Programmes:

Your Company has familiarised the Independent Directors with regard to their rolesrights responsibilities nature of the industry in which your Company operates thebusiness model of your Company etc.

The Familiarisation Policy for the Independent Directors is uploaded on the website ofyour Company and is accessible at www.shardulsecurities.com.

16. Code of Conduct:

Your Company has in place a Code of Conduct for the Board of Directors and Seniormanagement personnel which reflects the legal and ethical values to which your Company isstrongly committed. The Directors and Senior management personnel of your Company havecomplied with the code as mentioned hereinabove.

The Directors and Senior management personnel have affirmed compliance with the Code ofConduct applicable to them for the financial year ended 31 March 2021.The said code isavailable on the website of your Company at www.shardulsecurities.com.

17. Key Managerial Personnel:

In accordance with the provisions of Section 2(51) and 203 of the Companies Act 2013read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 Mr. R Sundaresan - Executive Director & Chairman Mr. Tarun Chaturvedi - ChiefFinancial Officer Mr. Yogendra Chaturvedi - Chief Executive Officer and Ms Daya Bhalia -Executive Director & Company Secretary are the Key Managerial Personnel (‘KMP')of your Company.

Mr. Prashant Chaturvedi resigned as Chief Financial officer of the Company with effectfrom 31st October 2020. Mr. Tarun Chaturvedi was appointed as Chief FinancialOfficer of the Company with effect from 13th November 2020.

18. Board Evaluation:

Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirement) Regulations 2015 the Board has carried out an evaluation of itsown performance the directors individually as well as the evaluation of the working ofits Audit Nomination & Remuneration Committees. The manner in which the evaluationhas been carried out has been explained in the Corporate Governance Report.

19. Remuneration Policy:

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Remuneration Policy is stated in the Corporate Governance Report.

20. Number of Meetings of the Board:

Four Meetings of the Board of Directors were held during the year and the details ofsuch meetings forms part of the Corporate Governance Report.

21. Audit Committee:

The Audit Committee as on 31st March 2021 comprises of Independent Directorsnamely Mr. Devesh Vasavada (Chairman) Mr. Lalit Shah Mr. Charul Abuwala and Mr. YogendraChaturvedi (Executive Director) as other member. All the recommendations made by the AuditCommittee were accepted by the Board.

22. Annual Return:

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act the Annual Return ason 31st March 2021 is available on the Company's website:https://www.shardulsecurities.com.

23. Taxation:

In opinion of Directors the provision for Income Tax is made as per the provisions ofthe Income Tax Act 1961.

24. Cash flow:

As required by SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 a Cash Flow Statement is appended with this report.

25. Directors' Responsibility Statement:

To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:

a) that in the preparation of the annual financial statements for the year ended 31stMarch 2021 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;

b) that such accounting policies as mentioned in Notes to the Financial Statements havebeen selected and applied consistently and judgments and estimates have been made that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at 31st March 2021 and of the profit of the Company for the yearended on that date;

c) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

d) that the annual financial statements have been prepared on a going concern basis;

e) that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively.

f) that systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.

26. Statutory Auditor and Auditors' Report:

M/s J. Kala & Associates Chartered Accountants (Firm Registration No: 118769W)have conducted audit for the F.Y. 20202021. The Auditor's Report for F. Y. 2020-2021 doesnot contain any qualification reservation or adverse remark. The Auditor's Report isenclosed with the financial statement in this Annual Report.

The notes to the Financial Statement referred to in the Audito rs' Report areself-explanatory and therefore do not call for any further comments.

27. Secretarial Audit:

Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethere under the Company has appointed M/s Dhirendra Maurya & Associates CompanySecretary in Practice to undertake Secretarial Audit of the Company. The Secretarial AuditReport is enclosed in Annexure D and forms an integral part of this Report.

There is no secretarial audit qualification for the year under review.

28. Secretarial Standards:

The Company has complied with the applicable Secretarial Standards i.e. SS-1 relatingto Meetings of the Board of Directors and SS-2 relating to General Meetings respectively.

29. Internal Audit:

The Company's internal control system is commensurate with its size scale andcomplexities of the operations. The internal audit is entrusted to M/s Anil B Jain &Associates Chartered Accountants. The Audit Committee of the Board of Directors andStatutory Auditors are periodically apprised of the internal audit findings and correctiveactions taken.

30. Significant and material orders passed by the regulators or courts:

There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company and its future operations.

31. Corporate Governance:

Report on Corporate Governance stipulated under Regulation 34(3) read with Schedule Vof SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 forms part ofthis annual report. A certificate from the auditors of the Company M/s J. Kala &Associates Chartered Accountants confirming compliance of conditions of CorporateGovernance as stipulated under aforesaid regulation is annexed to and forms part of thisReport.

32. Particulars of Loans Guarantees or Investments by the Company:

Details of Loans guarantees or investments covered under the provisions of Section 186of the Companies Act 2013 are given in the notes to Financial Statements.

33. Related Party Transactions:

All transactions with related parties during the year were on arm's length basis andwere in the ordinary course of business. The details of the material RPTs entered intoduring the year as per the policy on RPTs approved by the Board have been reported in FormAOC-2 which is given in Annexure C to this Report.

As required under Regulation 23 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company has formulated policy on dealing with RelatedParty Transactions. The Policy is available on the website of the Company. Weblink of thesame is: http://www.shardulsecurities.com/related%20party%20transaction%20policy.pdf

34. Whistle blower policy and vigil mechanism:

The Company has established a whistle blower policy and vigil mechanism for directorsand employees to report concerns about unethical behavior actual or suspected fraud orviolation of the company's code of conduct policy. The mechanism provides for adequatesafeguards against victimization of directors and employees. None of the personnel havebeen denied access to the Audit Committee of the Board. The details of Whistle BlowerPolicy are available on the website of the Company. Weblink of the sameis:http://www.shardulsecurities.com/vigil%20mechanism%20policy.pdf

35. Corporate Social Responsibility:

Provisions of Section 135 of the Companies Act 2013 are not applicable to the Companyduring the period under review.

36. Internal Financial Control:

The Board of Directors of your Company have adopted policies and procedures forensuring the orderly and efficient conduct of its business including adherence to yourCompany's policies safeguarding of its assets prevention and detection of frauds anderrors accuracy and completeness of the accounting records and timely preparation ofreliable financial disclosures.

37. Disclosure under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013:

The Company has in place a requisite policy in line with the requirements of the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013. Allemployees (permanent temporary trainees) are covered under the policy. There was nocompliant received from any employee during the financial year 2020-2021 and hence nocomplaint is outstanding as on 31st March 2021 for redressal.

38. Other Statutory information:

a. Particulars of Employees:

Information pursuant to Section 197(12) of the Companies Act 2013 read with Rule 5(1)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 inrespect of the employees of the Company are annexed to this report as Annexure B.

In terms of provisions of Section 197(12) of the Companies Act 2013 read with Rules5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 none of the employees are in receipt of remuneration in excess of the limitsset out in the said Rules.

b. Conservation of Energy Technology Absorption and foreign Exchange earnings andoutgo:

i) Provisions pertaining to conservation of Energy and Technology Absorption are notapplicable or not relevant to the working of Company. The Directors keep themselvesacquainted with ongoing seminars and research papers.

ii) The Company has neither earned nor spent any amount by way of Foreign Exchange.

c. Deposits:

i) There are no deposits covered under Chapter V of the Act which has remainedunclaimed or claimed but not paid for which information is required to be given in thisreport. The Company neither hold any Public Deposits nor is accepting any deposits.

ii) The Company has complied with various requirements in terms of the capital adequacyunder the guidelines issued by the Reserve Bank of India for the Non-Banking FinancialCompanies.

39. CEO/CFO Certification:

The Chief Executive Officer and Chief Financial Officer have issued a certificatepursuant to the provisions of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 certifying that the financial statements do not contain any untruestatement and these statements represent a true and fair view of the Company's affairs.The said certificate is annexed as Annexure E and forms part of the Annual Report.

40. Acknowledgment:

Your Directors appreciate the co-operation and support extended by the ShareholdersEmployees Financial Institutions and Banks.

For and on behalf of Board
Yogendra Chaturvedi Daya Bhalia
Place: Mumbai Executive Director & CEO Executive Director and Company Secretary
Dated: 29th June 2021
Regd. Office:
G-12 Tulsiani Chambers 212 Nariman Point
Mumbai - 400 021

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