The Members of
Shardul Securities Ltd.
Your Directors are pleased to present the Thirty-Third Annual Report and the AuditedAccounts for the year ended March 31 2018.
|1. Financial Results: - || ||(Rs. in lakhs) |
| ||2017-2018 ||2016-2017 |
|Profit/(Loss) before Depreciation ||319.99 ||67.71 |
|Less: Depreciation ||32.09 ||32.24 |
|Profit/(Loss) before Taxation ||287.90 ||35.47 |
|Less: Tax Expenses || || |
|Provision for tax ||40.00 ||2.25 |
|Current tax expense relating to prior years ||- ||(6.74) |
|Deferred Tax Liability/(Asset) ||(5.26) ||18.09 |
|Profit / (Loss) after Taxation ||253.16 ||21.87 |
|Surplus/(Deficit) brought forward from previous years ||4070.04 ||4178.90 |
| ||4323.20 ||4200.77 |
|Appropriations: || || |
|Statutory Reserve Fund as per RBI Guidelines ||50.63 ||4.37 |
|Proposed Dividend(including dividend tax) on Equity Shares ||- ||126.36 |
|Balance carried to Balance Sheet ||4272.57 ||4070.04 |
Your Directors recommend a dividend of Re. 0.60 per Equity Share on 17498433 equityshares of Rs.10 each aggregating to Rs. 126.36 lakhs (including dividend tax) for thefinancial year ended 31st March 2018 which if approved at the ensuing Annual GeneralMeeting will be paid to (i) all those Equity Shareholders whose names appear in theRegister of Members as on 19th July 2018 and (ii) to those whose names as beneficialowners are furnished by the National Securities Depositories Ltd. and CentralDepositories Service (India) Ltd.
3. Transfer to Reserves:-
As per requirement of RBI regulations the Company has transferred to Statutory ReserveFund an amount of Rs. 50.63 Lakhs in Financial Year ended March 31 2018.
4. Management Discussions and Analysis Report:-(i) Financial performance:
Your Company achieved a gross revenue of Rs.556.22 lakhs during the year under reportand a net profit of Rs.253.16 lakhs. However on a consolidated basis including thesubsidiary your company achieved a net profit of Rs. 346.80 lakhs.
(ii) Industry Structure and developments:
Though the monsoon conditions were better during the year under report yet many partsof the country still had to go through severe drought conditions. Notwithstandingincreased farm output adequate relief to the farmers by way of fair support price as perProfessor Swaminathan report on agri pricing that the Govt had promised did notmaterialize resulting in gloomy state of affairs for farmers across the country. Theservice sector and industrial sector however contributed marginally higher at 7 and 9percent respectively which resulted in an increase in the GDP growth to about 7.2% ascompared to about 6% during the previous financial year. The low crude oil prices ininternational market helped the Government to substantially mobilize towardsinfrastructure developments but during the year under report the international crude oilprices started moving up again and with the Government Agencies being reluctant to lowerthe tax advantages they gained during the previous year it resulted in an increase in thedomestic petroleum prices leading to inflationary trends and higher cost of livingaffecting the common man in general.
The capital markets remained volatile though there was positive trend in terms ofbetter valuations in metal banking auto and pharmaceutical segments. The continuedinflux of funds through foreign investments and the general growth in the contributionstowards mutual fund industry ensured constant money supply to the capital marketsresulting in increase in stock market indices. The foreign exchange reserves crossed $ 400Billion for the first time thanks to Direct Foreign Investments which increased by almost8% besides the foreign remittances for investments and savings. However the adversebalance of payments due to negative Import/Export activities witnessed Rupee depreciatingsubstantially in the recent times.
The Banking sector has been going through the pains of accumulated burden of makinghuge provisions for bad and doubtful debts that got further accentuated by some hugefrauds committed by a few delinquent traders in diamond and Jewellery Industry that didnot augur well for the Industry. The Credit off take was low with cost of funds being notborrower friendly.
The NBFCs in the country generally showed an improved performance particularly in themicro finance and SME segments and your company though basically engaged in investmentactivities also showed a better growth and performance during the year under review.
(iii) Business Review:
Despite the volatility in Capital markets your company could achieve better results ascompared to previous year for the aforesaid reasons and looks forward to better itsperformance during the ensuing year as the monsoon conditions are expected to be positive.Due to ensuing general election year Government spending is also likely to increase andwould contribute for accelerated economic growth that should auger well for yourcompanys activities as well.
(iv) Opportunities and threats:
Despite a reasonable GDP growth that is expected to be around 7.3% theGovernments finances have been under intense strain after the introduction of GSTwherein determination of the right kind of rate mix is still in an evolution stage. TheGovernment has taken lot of measures to support the rural and power sectors that requireshuge capital expenditure but the strict provisioning norms in the banking system hasresulted in erosion of capital and ability of the banks to lend freely for supporting theaccelerated economic growth envisaged by the Government. Money supply which was a cause ofworry is restored to its normalcy and with higher Govt expenditure the economy shouldmove ahead on a positive note in the coming years.
(v) Segment-wise product-wise reporting:
As there has been no change in your companys business activities and brokingactivities there are no separate reportable segment.
Your company expects the capital markets continuing to be volatile in view of thepolitical developments consequent to the ensuing election year and would like to beguarded in making projections for the year. However if the anticipated Governmentexpenditure to boost the economy takes place the market should remain vibrant and yourcompany should be able to achieve better results for the coming year.
(vii) Risks and concerns:
Your companys activities which are essentially in the capital market segments andthe risk perception of our activity could be discerned as under: Market Risk: Yourcompanys major investments are mostly in capital market instruments like sharesmutual funds and bonds and any volatility could erode the capital value of theinvestments. 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. As the operations are human dependent the error factoris always inbuilt in this activity. Some of the risks could be wrong data inputdeviations from the rules of SEBI or Exchange due to oversight lack of coordinationamongst the dealing and back office administrative delays in adhering to schedules etc.This is not exhaustive and your company strives to minimize this type of risk throughadequate training and motivation periodically.
(viii) Internal Financial control Systems and their Adequacy:
Your company has in place adequate interest 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.
Shriyam Broking Intermediary Limited a wholly owned subsidiary of the company achieveda significant improvement in its working results during the year under report. The netprofit for the year was at Rs.88.82 lakhs as compared to Rs.50.38 lakhs during theprevious year. The subsidiary is poised to improve its performance in coming year withmore active participation in the markets and increase in the clientele base.
Shriyam Realtors Private Limited (Formerly known as Shriyam Broking (IFSC) PrivateLimited) a wholly owned subsidiary of Shriyam Broking Intermediary Limited wasincorporated on 15th December 2016. However the company has not yet started any businessactivities.
6. Names of companies which have become or ceased to be its subsidiaries jointventures or associate companies during the year:- During the year under review nocompany has ceased to be its subsidiaries joint ventures or associate companies.
In accordance with the Articles of Association of the Company and the provisions of theCompanies Act 2013 Mr. Yogendra Chaturvedi (DIN: 00013613) director is liable to retireby rotation at the ensuing AGM and is eligible for reappointment.
The present term of office of Mr. R. Sundaresan (holding Din No. 00029840) Whole-timeDirector expires on 15th June 2018. Your Directors approved his re-appointment asWhole-time Director of the Company for a period of three years with effect from 16th June2018 subject to the approval of shareholders of the Company at the Annual General MeetingAt a board meeting held on 14th November 2017 the board had appointed Ms. Daya Bariya(holding Din No. 07049483) as an Additional Executive Women Director who is liable toretire by rotation and would vacate her office at the ensuing Annual General Meeting ofthe Company and is eligible for re-appointment at the ensuing Annual General Meeting ofthe Company.
Necessary resolutions for the appointment /re-appointment of the aforesaid directorshave been included in the notice convening the ensuing AGM and details of the proposal forappointment / re-appointment are mentioned in the explanatory statement of the notice.Your directors recommend their appointment / re-appointment.
Brief resume of the Directors proposed to be appointed/ reappointed nature of theirexperience in specific functions and area and number of companies in which he/she holdmembership/chairmanship of Board Committees as stipulated regulation 36(3) of SEBI
(Listing Obligations and Disclosure Requirements) Regulations 2015 are provided in theReport of Corporate Governance forming part of the Annual Report.
All independent directors have given declaration that they meet the criteria ofindependence as laid under section 149(6) of the Companies Act 2013 and regulation 25 ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
8. Appointments/Resignations of the Key managerial personnel:-
Ms Daya Bariya was appointed as an Additional Executive Director with effect from 14November 2017. Ms Daya Bariya was also appointed as the Company Secretary with effect from1st December 2017 in place of Ms Monika Agarwal who resigned as Company Secretary of theCompany with effect from 30th November 2017.
9. 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.
10. 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.
11. 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.
12. Audit committee:-
The Audit Committee as on 31st March 2018 comprises of Independent Directors namely Mr.Devesh Vasavada (Chairman) Mr. Kantilal Shah Mr. Charul Abuwala and Mr. YogendraChaturvedi (Executive Director) as other members. All the recommendations made by theAudit Committee were accepted by the Board.
13. Extract of Annual Return:-
The details forming part of the extract of the Annual Return in form MGT-9 as requiredunder section 92 of the Companies Act 2013 is included in this Report as Annexure A andforms as integral part of this Report.
In opinion of Directors the provision for Income Tax is made as per the provisions ofthe Income Tax Act 1961.
15. Cash flow:-
As required by SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 a Cash Flow Statement is appended with this report.
16. 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 March31 2018 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 March 31 2018 and of the profit of the Company for the year ended on that
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
f) that systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
17. Statutory Auditors and Auditors Report:-
M/s Khimji Kunverji & Co. Chartered Accountants (Firm Registration No: 105146Whave conducted audit for the F.Y. 2017-18. M/s Khimji Kunverji & Co. has tenderedtheir resignation to discontinue as the Statutory Auditor of the Company w.e.f. F.Y.2018-19 and further remaining terms of their period.
The Board of Directors recommends appointment of M/s J. Kala & AssociatesChartered Accountants (Firm Registration No.: 118769W) as Statutory Auditors of theCompany in place of M/s Khimji Kunverji & Co. Chartered Accountants (FirmRegistration No: 105146W who have tendered their resignation as Statutory Auditors of theCompany w. e. f. F.Y. 2018-19.
The Board of Directors of the Company at its meeting held on 29th May 2018 haveappointed M/s J. Kala & Associates Chartered Accountants (Firm Registration No.:118769W) subject to approval of shareholders at ensuing Annual General Meeting to holdoffice from the conclusion of 33rd Annual General Meeting till the conclusion of 38thAnnual General Meeting of the Company. The Board recommends to the members of the Companyfor approval of appointment of M/s J. Kala & Associates Chartered Accountants (FirmRegistration No.: 118769W) as the Statutory Auditors of the Company.
Your Company has received a letter from M/s J. Kala & Associates CharteredAccountants (Firm Registration No.: 118769W) to the effect that their appointment ifmade would be under Section 139 (1) of the Companies Act 2013 and that they are notdisqualified within the meaning of Section 141 of the Companies Act 2013 read with Rule4(1) of the Companies (Audit and Auditors) Rules 2014. The notes to the FinancialStatement referred to in the Auditors Report are self-explanatory and therefore donot call for any further comments.
18. 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 included in Annexure B and forms an integral part of this Report.
There is no secretarial audit qualification for the year under review.
19. Internal Audit:-
The Companys 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.
20. Significant and material orders passed by the regulators or courts:- by theRegulators / There are no significant Courts which would impact the going concern statusof the
Company and its future operations.
21. Corporate Governance:-
Report on Corporate Governance stipulated under Regulation 34(3) and Regulation 53(f)read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 with Stock Exchange form part of this annual report. A certificate fromthe auditors of the Company M/s Khimji Kunverji & Co. Chartered Accountantsconfirming compliance of conditions of Corporate Governance as stipulated under aforesaidregulation is annexed to and forms part of this Report.
22. Consolidated Accounts:-
In accordance with the requirements of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and the Accounting Standard -21 prescribed by theInstitute of Chartered Accountants of India Company had made additional disclosure inrespect of Consolidated Financial Statements and Accounting Standard-18 for Related Partytransactions.
23. 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.
24. Related party transactions:- transactions which could have had a potentialconflict with the interests of the There were no materially significant
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 the same is:http://www.shardulsecurities.com/related%20party%20transaction%20policy.pdf
25. 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 companys code of conduct policy. The mechanism provides foradequate safeguards against victimization of directors and employees. None of thepersonnel have been denied access to the Audit Committee of the Board. The details ofWhistle Blower Policy are available on the website of the Company www.shardulsecurities.com
26. Corporate Social Responsibility committee:-
In compliance with Section 135 of the Companies Act 2013 read with the Companies(Corporate Social Responsibility Policy) Rules 2014 the Company has established CorporateSocial Responsibility (CSR) Committee and statutory disclosures with respect to the CSRCommittee and an Annual Report on CSR Activities forms part of this Report as Annexure C.
27. 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 2017-18 and hence nocomplaint is on 31.03.2018 for redressal.
28. 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 AnnexureD.
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 earnednor spent any amount by way of Foreign Exchange.
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 adequacy underthe guidelines issued by the Reserve Bank of India for the Non-Banking FinancialCompanies.
29. CEO/CFO Certification:-
The Chief Executive Officer and Chief Financial Officer have issued certificatepursuant to the provisions 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 Companysaffairs. The said certificate is annexed and forms part of the Annual
Your Directors appreciate the co-operation and support extended by the ShareholdersEmployees Financial Institutions and Banks.
| ||For and on behalf of the Board || |
|Place: mumbai ||R Sundaresan ||Daya Bariya |
|Date: 29th may 2018 ||executive Director ||executive Director and company Secretary |
|Regd. Office : || || |
|G-12 Tulsiani Chambers || || |
|212 Nariman Point || || |
|Mumbai 400 021 || || |