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Shardul Securities Ltd.

BSE: 512393 Sector: Financials
NSE: SHRIYAMSEC ISIN Code: INE037B01012
BSE 00:00 | 11 Jun 58.00 1.50
(2.65%)
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58.00

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NSE 05:30 | 01 Jan Shardul Securities Ltd
OPEN 54.20
PREVIOUS CLOSE 56.50
VOLUME 300
52-Week high 66.50
52-Week low 32.00
P/E 59.18
Mkt Cap.(Rs cr) 102
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 54.20
CLOSE 56.50
VOLUME 300
52-Week high 66.50
52-Week low 32.00
P/E 59.18
Mkt Cap.(Rs cr) 102
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

FOR THE FINANCIAL YEAR 2019-2020

To

The Members of Shardul Securities Ltd.

Your Directors are pleased to present the Thirty-Fifth Annual Report and the AuditedAccounts for the year ended March 31 2020.

1. Financial Results :-

(Rs. in Lakh)
Particulars 2019-2020 2018-2019
Profit/(Loss) before Depreciation (851.72) 74.23
Less: Depreciation 27.80 31.62
Profit/(Loss) before Taxation (879.52) 42.61
Less: Tax Expenses
Current tax 21.00 35.00
Deferred Tax (252.78) 3.01
Profit / (Loss) after Taxation (647.74) 4.60
Other Comprehensive Income (3177.87) 4584.63
Total Comprehensive Income (3825.61) 4589.23

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

Covid-19 have been declared as a global pandemic the Indian Government has declaredthe complete lockdown since March 24 2020 and the same is continuing with minorexemptions and essential services were allowed to operate with limited capacity. Capitalmarkets and banking services have been declared as essential services and accordingly theCompany has been continuing the operations with minimal permitted staff. However otheremployees were encouraged to work from home. All operations and servicing of clients weresmoothly ensured without any interruptions as the activities of trading settlement DPStock Exchanges and depositories functions have been fully automated. Based on the factsand circumstances there is no major impact on the business of the Company. The Company isclosely monitoring any material changes on a continuous basis.

3. Dividend:-

In view of losses during the year your Directors do not recommend any dividend for thefinancial year ended March 31 2020.

4. Transfer to Reserves:-

In view of losses during the year the Company has not transferred any amount toStatutory Reserve Fund for Financial Year ended March 31 2020.

5. Management Discussions and Analysis Report:-

(i) Financial Performance:

The Year 2019-20 witnessed a general trend of lower growth in almost all sectors of theeconomy and your company also had to reconcile to the vagaries of market forces thatprompted to follow cautious approach. At the far end of the year the panic set in due topandemic outrage nullified all the good work done through the year. Though our overallperformance per se was comparable to the previous year the setback suffered at theyearend affected our working results to a great extent. The fair valuation lossesreflected in the audited financial statements are as a consequence of a steep fall instock market indices as on 31st March and application of the new accounting standards asper the Company ( Indian Accounting standards Rules 2015 of the companies act 2013) readwith section133 of the Act for preparation of financial statements. This position is boundto be reversed once the market indices recover in the ensuing year.

(ii) Industry Structure and developments:

The year under report continued the same way the previous year ended with economic slowdown globally that affected the market sentiments. The delayed Budget presentation afterthe general elections coupled with lack of any big investments and Government expenditureresulted in lower GDP growth that affected all round growth in industrial activities andagricultural segments. The GDP growth dipped to 3.1 percent from 4.2 percent in theprevious year and inflation rate increased to 4.8 percent from 3.4 percent in the previousyear. Merchandise export import declined by 4.8 percent and 9.1 percent respectively. Thecombined index of 8 core industries stood at 137 constituting 0.6 percent growth asagainst an expected level of 2.5%. India's FDI equity inflow reached $ 469 billion withmaximum contribution from services software exports telecommunication constructionautomobiles and trading. The liquidity in the market continued to be tight notwithstandingefforts of the Government to infuse additional capital in banking system. The flow ofcredit barring a few select segments continued to affect the business growth. The diamondand jewellery industry for example suffered the most with credit flow virtually coming toa standstill. The NBFC sector in India faced a few more failures and frauds resulting inliquidity crisis. These also resulted in huge provisions for bad debts of Public Sectorand some private sector banks. The Agricultural sector showed a marginal increase whilethe manufacturing sector continued to be negative.

The capital markets continued to remain volatile though it appeared to be more indexdriven than real time appreciation in small and medium cap stocks. However by end ofMarch the stocks took a heavy beating due to the panic around the world .

(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 year end should get reversed in the ensuing yearalthough the trading losses cannot be reversed. India is going through a severe economicdown turn due to Corona pandemic after effects and the ensuing year would be anunprecedented year of setbacks and poor results for most of the business activities.

(iv) Opportunities and Threats:

The GDP is projected to recover to around 3 percent which is not a good 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.

(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 be volatile in view of thepresent down turn in economy and would like to be guarded in making projections for theyear. The Company does not foresee any improvements in the working results for the ensuingyear and the aim would be to ensure that the deterioration in the financial health is keptto a minimum level

(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'smajor investments are mostly in capital market instruments like shares mutual funds andbonds and any volatility could erode the capital value of the investments. No doubt yourcompany would keep a close vigil on movement of prices and take appropriate steps tominimize this risk. Interest risk: The changes in interest rates by RBI and Banks couldresult in fluctuations in prices and consequently the income of various investments andborrowings by the company may vary. Your company has put in measures to hedge this riskbut this cannot be eliminated totally. Operation Risk: The stock market operations arefraught with certain risks associated with market judgments by operational executives andtheir decision making process based on certain perceptions prevailing at any given timeand these could change suddenly resulting in unexpected adverse positions.

(viii) Internal Financial Control Systems and their Adequacy:

Your company has in place adequate internal financial control measures. There iscontinuous monitoring of all the activities and necessary creative measures are takenperiodically to manage 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 D toBoard Report.

6. Subsidiaries:-

Shriyam Broking Intermediary Limited a wholly owned subsidiary of the company achieveda modest profit in its working results during the year under report. The net profit forthe year was at about Rs. 7 lakhs as compared to Rs. 26 lakhs during the previous year.The market factors would determine the performance in coming year though all efforts wouldbe made to improve the bottomline.

Shriyam Realtors Private Limited a wholly owned subsidiary of Shriyam BrokingIntermediary Limited was incorporated on 15th December 2016. However the company had verynominal transactions so far in view of the sluggish health of real estate markets.

7. 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.

8. Directors:-

i) Mr. Devesh Vasavada (DIN: 00273128) was appointed as an Independent Non-ExecutiveDirector of the Company by the members at the 31st AGM of the Company held for thefinancial year 2015-2016 for a period of five years with effect from 5th February 2016 to4th February 2021. Based on recommendation of Nomination and Remuneration Committee and interms of the provisions of Sections 149 150 152 read with Schedule IV and any otherapplicable provisions of the Act and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 Mr. Devesh Vasavada being eligible for reappointment asan Independent Director and offering himself for re-appointment is proposed to bereappointed as an Independent Director for second term for period of further five yearsfor a term beginning from 5th February 2021 to 4th February 2026 on the terms andconditions including remuneration as agreed subject to approval of Shareholder at AnnualGeneral Meeting.

ii) The present term of office of Mr. R. Sundaresan (holding Din No. 00029840)Whole-time Director expires on 15th June 2021. Your Directors approved his re-appointmentas Whole-time Director (designated as Chairman and Executive Officer) of the Company forfurther period of three years beginning from 16th June 2021 to 15th June 2024 on the termsand conditions including remuneration as agreed subject to the approval of shareholders ofthe Company at the Annual General Meeting.

iii) The present term of office of Mr. Yogendra Chaturvedi (holding Din No. 00013613)Whole-time Director expires on 4th February 2021. Your Directors approved hisre-appointment as Whole-time Director (designated as Executive Director and ChiefExecutive Officer) of the Company for further period of five years beginning from 5thFebruary 2021 to 4th February 2026 on the terms and conditions includingremuneration as agreed subject to the approval of shareholders of the Company at theAnnual General Meeting.

iv) The present term of office of Ms. Daya Bhalia (holding Din No. 07049483)Whole-time Director expires on 13th November 2020. Your Directors approved herre-appointment as Whole-time Director (designated as Executive Director) of the Companyfor further period of five years beginning from 14th November 2020 to 13thNovember 2025 on the terms and conditions including remuneration as agreed subject to theapproval of shareholders of the Company at the Annual General Meeting. Necessaryresolutions for the appointment /re-appointment of the aforesaid directors have beenincluded 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 Re-appointment. Brief resume of the Directors proposedto be appointed/ reappointed nature of their experience in specific functions and areaand number of companies in which he/she hold membership/chairmanship of Board Committeesas stipulated under regulation 36(3) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 are provided in the Report of Corporate Governance formingpart of the Annual Report. All independent directors have given declaration that they meetthe criteria of independence as laid under section 149(6) of the Companies Act 2013 andregulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015.

9. Key Managerial Personnel

In accordance with the provisions of Section 2(51) and 203 of the Act read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 Mr. PrashantChaturvedi - Chief Financial Officer Mr. Yogendra Chaturvedi - Chief Executive Officerand Ms. Daya Bhalia - Company Secretary & Compliance Officer are the Key ManagerialPersonnel (‘KMP') of your Company.

10. 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.

11. Familiarization Programme for Independent Directors

The Independent Directors (IDs) on the Board of the Company are well versed with theCompany's business model and the nature of industries in which it is operating. Afamiliarization programme for IDs laid down by the Board has been posted on the Company'swebsite at http://www.shardulsecurities.com.

12. 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.

13. 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.

14. Audit Committee:-

The Audit Committee as on 31st March 2020 comprises of Independent Directors namely Mr.Devesh Vasavada (Chairman) Mr. Lalit Shah Mr. Charul Abuwala and Mr. Yogendra Chaturvedi(Executive Director) as other member. All the recommendations made by the Audit Committeewere accepted by the Board.

15. 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. ANNUAL RETURN As required under Section 134(3)(a)of the Act the Annual Return is placed on the Company's website and can be accessed athttp://www.shardulsecurities.com.

16. Taxation:-

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

17. Cash flow:-

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

18. Directors'

f 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 2020 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 2020 and of the loss of the Company for the year ended on thatdate;

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.

19. Statutory Auditor and Auditors'f Report:-

M/s J. Kala & Associates Chartered Accountants (Firm Registration No: 118769Whave conducted audit for the F.Y. 2019-2020.

The Auditor's Report for F. Y. 2019-2020 does not contain any qualificationreservation or adverse remark. The Auditor's Report is enclosed with the financialstatement in this Annual Report. The notes to the Financial Statement referred to in theAuditors' Report are self-explanatory and therefore do not call for any furthercomments.

20. 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 nosecretarial audit qualification for the year under review.

21. 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.

22. 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.

23. 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.

24. Corporate Governance:-

Report on Corporate Governance stipulated under Regulation 34(3) read with Schedule Vof SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 with StockExchange form part of this annual report. A certificate from the auditors of the CompanyM/s J. Kala & Associates Chartered Accountants confirming compliance of conditionsof Corporate Governance as stipulated under aforesaid regulation is annexed to and formspart of this Report.

25. Consolidated Accounts:-

The Consolidated Financial Statements of the Company and its subsidiaries 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.

26. 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.

27. Related Party Transactions:-

There were no materially significant related party transactions which could have had apotential conflict with the interests of the Company.

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

28. 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 www.shardulsecurities.com. Weblink ofthe same is: http://www.shardulsecurities.com/vigil%20mechanism%20policy.pdf

29. Corporate Social Responsibility Committee:-

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

30. 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 2019-2020 and hence nocomplaint is outstanding as on 31.03.2020 for redressal.

31. 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 C'. Interms of provisions of Section 197(12) of the Companies Act 2013 read with Rules 5(2) and5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014none of the employees are in receipt of remuneration in excess of the limits set out inthe 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.

32. CEO/CFO Certification:-

The Chief Executive Officer and Chief Financial Officer have issued a 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 Company's affairs.The said certificate is annexed and forms part of the Annual Report.

33. Acknowledgment:-

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

For and on behalf on the Board

Yogendra Chaturvedi Daya Bhalia

Executive Director & CEO Executive Director and Company Secretary

Place : Mumbai

Date : 29th June 2020

Regd. Office :

G-12 Tulsiani Chambers

212 Nariman Point

Mumbai 400 021.