To The Members
Your Directors have pleasure in presenting the Thirty First Annual Report of SKPSecurities Limited (SKP) for the Financial Year ended 31st March 2021.
(Rs. in Lacs)
|Particulars ||2021 ||2020 |
|Revenue from Operations and Other Income ||1504.25 ||1108.14 |
|Total Expenses ||1088.70 ||1106.42 |
|Profit Before Tax ||415.55 ||1.72 |
|Tax Expenses ||61.52 ||30.66 |
|Profit / (Loss) for the year ||354.03 ||(28.94) |
|Other Comprehensive Income ||10.57 ||(3.64) |
|Total Comprehensive Income ||364.60 ||(32.58) |
|Retained Earnings : Opening Balance ||1466.56 ||1983.56 |
|Less : Used for Buyback of Shares ||- ||(484.42) |
|Less : Transfer to General Reserve ||(25.00) ||- |
|Retained Earnings : Closing Balance ||1806.16 ||1466.56 |
After two successive challenging years viz. 2018-2019 and 2019-2020 for multiplereasons stated in the previous reports we entered into 2020-2021 amidst Covid-19 Pandemicwhich had no end in sight a National Lockdown specter of an unprecedented global anddomestic recession looming and heightened uncertainty surrounding financial markets. Itcould not have felt worse.
Extraordinary times invited extraordinary action from Governments and central bankersaround the world and in India - the most impactful of them from the economy mostbusinesses and financial markets' perspective being - massive reduction in interest rates.It was a multi-dimensional positive impact. The result was a sharp rebound in corporateperformance across most sectors and an unprecedented broad based rally in equity marketsacross the globe and in India which scaled new heights by the end of the Financial Year.Even Bonds witnessed a smart rally.
In this backdrop your company witnessed an improvement in its income from BrokingServices across all customer segments with research-led value add. Although DistributionServices witnessed a sharp jump in assets under management income was negativelyimpacted primarily due to reduction of fees by the principals and flight to safety byclients due to uncertainty caused by the Pandemic as indicated in previous years' Report.The Pandemic also had an impact on new business initiatives requiring physical meetingswith potential clients. Structural regulatory changes to Investment Advisor Regulationsmade it quite impossible to commence business as a Registered Investment Advisor.Therefore the company surrendered its SEBI registration as an Investment Advisor withinthe same Calendar Year of getting it. Proprietary investments of your company did wellduring the year buoyed by a mid-term review and restructuring of asset allocation to takeoptimal advantage of the prevailing outlook for business and market conditions.
Your Directors express satisfaction that the Company has come out of the crisisstronger as mentioned in the previous years' Report.
DIVIDEND AND RESERVES
After having returned substantial capital back to the shareholders by way of two BuyBack of Shares made during FY18 and FY20 your Directors are of the view that the companyconserve its financial resources not only to encounter heightened volatility in financialmarkets but also for growth capital'. The severity of the Second Wave of Covid-19pandemic in India has also created fresh uncertainty in Financial Markets. Maintainingextra liquidity could be wise in such circumstances. Hence your Directors do not recommendany dividend for the Financial Year 2020-2021. It recommends to transfer '25 Lacs toGeneral Reserve.
While the economy businesses and financial markets were in the midst of a V-shapedrecovery we have entered the Financial Year 2021-2022 amidst a devastating Second Wave ofCovid-19 Pandemic in India. The unfolding human tragedy has not been witnessed by anyliving Indian. However with the vaccine having arrived on the scene it is a matter oftime when things will improve for the better. With the tail wind provided by the recentchanges in the economic business and financial policies particularly highlighted by theUnion Budget 2021 (arguably the best since 1997) the economy businesses and financialmarkets can be reasonably expected to be doing well over the next few years.
With a diversified portfolio of services on offer enhanced efforts for growth andstrong financials your Directors remain optimistic about the future performance of thecompany.
STATE OF THE COMPANY'S AFFAIRS
Detailed information on the operations of the Company business environment and futureexpectations are provided in the Management Discussion and Analysis Report in compliancewith Regulations 34(2)(e) of SEBI (Listing Obligations and Disclosure Requirement)Regulations 2015 ("Listing Regulations") which is annexed and marked as AnnexureA to this report.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATES COMPANIES
Your Company does not have any Subsidiary Joint Venture or Associate Company.
Your Company has complied with the Corporate Governance requirements under the Act andas stipulated under the provisions of Listing Regulations.
A Detailed Report on Corporate Governance together with a Certificate from the Auditorsof the Company regarding compliance of conditions of Corporate Governance as stipulatedunder Listing Regulations forms an integral part of this Report which is annexed andmarked as Annexure B.
Mr. Nikunj Pachisia was re-appointed as a Whole Time Director of the Company for aperiod of three years with effect from 1st August 2020 to 31st July 2023 in the AnnualGeneral Meeting held on 26th September 2020 which was recommended by the Nomination andRemuneration Committee and approved by the Board of Directors in its meeting held on 27thJune 2020.
KEY MANAGERIAL PERSONNEL
During the year there were no changes in Key Managerial Personnel.
NOMINATION AND REMUNERATION POLICY
Your Company has a well-defined policy for appointment of Directors Key ManagerialPersonnel Senior Management Personnel and other employees of the Company including theirremuneration. The policy can be accessed at www.skpsecurities.com.
INDEPENDENT DIRECTORS' DECLARATION
The Company has received necessary declarations from all Independent Directors inaccordance with the provisions of Section 149(7) of the Companies Act 2013 ("theAct") stating that they meet the criteria of Independence as laid down in Section149(6) of the Act and Regulation 25 of Listing Regulations. In accordance with theprovisions of the Act none of the Non-Executive Independent Directors are liable toretire by rotation.
Pursuant to Rule 5 of the Companies (Appointment and qualification of Directors) Rules2014 as amended all Independent Directors of the Company have registered themselves inthe Independent Directors databank maintained with the Indian Institute of CorporateAffairs (UCA).
ANNUAL EVALUATION OF THE PERFORMANCE OF THE BOARD ITS COMMITTEES AND INDIvIDuALDIRECTORS
In terms of the provisions of the Act and Listing Regulations the Board of Directorshas carried out an evaluation process of its own performance the performance of itsvarious committees and individual Directors. A structured questionnaire is prepared forassessment based on various aspects which among other parameters include composition ofBoard and its Committees conducting of Meetings effectiveness of Governance Practicesetc. The detailed criteria applied in the evaluation process are explained in theCorporate Governance Report.
Further Independent Directors at their meeting held on 30th January 2021 reviewedthe performance of the Board and the Non-Independent Directors.
BOARD & COMMITTEE MEETINGS
During the year under review the Board met four times on 27th June 2020 25th July2020 31st October 2020 and 30th January 2021.The intervening gap between the meetings waswithin the period prescribed under the Act.
At present the Board of Directors has the following four committees:
i) Audit Committee
ii) Nomination and Remuneration Committee
iii) Stakeholders Relationship Committee
iv) Corporate Social Responsibility Committee
The details of composition of the Board its various Committees brief terms ofreference meetings held and attendance of the Directors are provided in the CorporateGovernance Report.
AUDITORS' AND AUDIT REPORT Statutory Auditor
M/s. G. P. Agrawal & Co. (FRN No: 302082E) Chartered Accountants Kolkata wereappointed as Statutory Auditors of the Company for a period of five consecutive years atthe 27th Annual General Meeting held on 29th July 2017 to hold office from the conclusionof the said meeting till the conclusion of the 32nd Annual General Meeting of the Companyto be held in the Calender Year 2022. The requirement for the annual ratification ofAuditors appointment at the AGM has been omitted pursuant to Companies (Amendment) Act2017 notified on 7th May 2018.
The Auditors have given a confirmation to the effect that they are eligible to continuewith their appointment and have not been disqualified in any manner from continuing asStatutory Auditor.
The Auditors' Report for the Financial Year ended 31st March 2021 does not contain anyqualification reservation or adverse remark. Further the Auditors of the Company havenot reported any fraud as specified under Section 143(12) of the Act. The Auditors' Reportis enclosed with financial statements in this Report.
Mr. Anil Murarka Practicing Company Secretary (FCS:3150 CP No:1857) Proprietor ofM/s. A. Murarka & Co. Kolkata was appointed to conduct the Secretarial Audit of theCompany for the Financial Year 2020-2021 pursuant to the provisions of Section 204 of theAct the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 andthe Listing Regulations. The Secretarial Audit Report is annexed and marked as AnnexureC.The said report does not contain any observation or qualification or adverse remarkrequiring explanation.
Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Act read withRule 12 of the Companies (Management and Administration) Rules 2014 the Annual Return ofthe Company for Financial Year 2020 - 2021 is uploaded on website of the Company and canbe accessed at www. skpsecurities.com.
CORPORATE SOCIAL RESPONSIBILITY
The brief outline of the Corporate Social Responsibility Policy of the Company and theinitiatives undertaken by the Company on CSR activities during the year are set out in AnnexureD of this Report in the format prescribed in the Companies (Corporate SocialResponsibility Policy) Rules 2014. The Policy is available on the website of the Companyi.e. www.skpsecurities.com.
PARTICULARS OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES
All transactions entered by the Company during the financial year with related partieswere in the ordinary course of business and on arm's length basis and are in compliancewith the applicable provisions of the Act and Listing Regulations details of which areprovided in notes to financial statements which forms an integral part of this Report.
All new related party transactions are first placed before the Audit Committee andthereafter placed before the Board for their consideration and approval. A prior omnibusapproval of the Audit Committee is obtained on an annual basis for the transactions whichare of foreseen and repetitive nature.The policy on materiality of Related PartyTransaction and dealing with Related Party Transaction as approved by the Board can beaccessed on Company's website www.skpsecurities.com
Particulars of contracts or arrangements with related parties referred to in Section188(1) of the Act read with Rule 15 of the Companies (Meetings of Board and its Powers)Rules 2014 in Form AOC-2 is not applicable for the Financial Year 2020-2021.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Your Company did not provide any Loans or Guarantees in terms of provisions of Section186 of the Act. The details of Investments made are provided in Notes to the FinancialStatements which forms an integral part of this Annual Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Information sought under Section 197(12) oftheAct read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed and markedas Annexure E to this Report.
Further a statement showing the names and other particulars of employees drawingremuneration in excess of the limits as set out in the Rule 5(2) and 5(3) of the aforesaidRules forms part of this report. However in terms of first proviso to Section 136(1) ofthe Act the Annual Report and Accounts are being sent to the Members and others entitledthereto excluding the aforesaid information. The said information is available forinspection by the Members. Any Member interested in obtaining a copy thereof may write tothe Company Secretary at email@example.com.
Risks are an integral part of business and your Company is committed to manage risks ina proactive and efficient manner. Your Company has implemented an integrated RiskManagement framework through which it reviews and assesses significant risks on a regularbasis to help ensure that there is a robust system of risk controls and mitigation inplace. Senior management periodically reviews this risk management framework to keepupdated and address emerging challenges. In the opinion of the Board at present there areno risks which threaten the existence of the Company.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
Your Company has a well-established Whistle Blower Policy as part of vigil mechanismfor Directors and Employees to raise their concerns about unethical behavior actual orsuspected fraud or violation of Company's Code of Conduct etc. in compliance withprovisions of Section 177(10) of the Act and Regulation 22 of Listing Regulations. Thismechanism also provides for adequate safeguards against victimization of DirectorsEmployees who avail of the mechanism and also provides for direct access to the Chairmanof the Audit Committee.
During the year under review none of the Directors/Employees were denied access to theChairman of the Audit Committee and that no complaints were received during the year. Theweb link of the said Policy is http://www.skpsecurities.com/index.php/investor/policies.
DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (prevention PROHIBITIONAND REDRESSAL) ACT 2013
Your Company has zero tolerance towards sexual harassment at workplace. All women whoare associated with the Company either as permanent temporary or contractual employees ortrainees etc. are covered under the above policy. During the year under review there wereno cases filed pursuant to the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.
TRANSFER OF UNPAID/UNCLAIMED AMOUNTS TO INVESTOR EDUCATION & PROTECTION FUNDAUTHORITY (IEPF)
In terms of the provisions of Section 124 of the Act read with IEPF Authority(Accounting Audit Transfer and Refund) Rules 2016 and other applicable provisions allunpaid or unclaimed dividends have been transferred by the Company to IEPF aftercompletion of seven years. Further shares on which dividend had remained unpaid orunclaimed by Members for seven consecutive years or more are also transferred to the demataccount of IEPF Authority.
INTERNAL FINANCIAL CONTROLS
The Company has an Internal Control System commensurate with size scale andcomplexity of its operations to ensure proper recording of financial and operationalinformation and compliances of various internal controls and other regulatory andstatutory compliances. During the year under review no material or serious observationhas been received from the Internal Auditor of the Company for inefficiency or inadequacyof such controls.
Audit Committee in consultation with the Internal Auditor formulates the scopefunctioning periodicity and methodology for conducting the Internal Audit. Based on theInternal Audit Report corrective actions in the respective area are undertaken andcontrols are strengthened.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND Outgo
Information sought under the provisions of Section 134(3)(m) of the Act read with Rule8 of the Companies (Accounts) Rules 2014 is annexed and marked as Annexure F tothis Report.
The details of policies approved and adopted by the Board are annexed and marked as AnnexureG to this report.
DIRECTOR'S RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(3)(c) read with Section 134(5) of the Actthe Board of Directors to the best of its knowledge and ability confirm that:
a) in the preparation of the Annual Accounts for the Financial Year ended 31st March2021 the applicable accounting standards have been followed along with proper explanationrelating to material departures;
b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2021 and of theprofit/loss of the Company for that period;
c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors ensured the annual accounts are prepared on a going concern basis;
e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively;
f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Your Company complies with all the applicable Secretarial Standards issued by theInstitute of Companies Secretaries of India.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
1. Issue of equity shares with differential rights as to dividend voting or otherwise.
2. Issue of shares (sweat equity shares) to employees of the Company under ESOS.
3. Deposits covered under Chapter V of the Act.
4. No significant or material orders were passed by any regulatory authority or courtsor tribunals impacting the going concern status and Company's operation in future.
5. No other material changes and commitments have occurred after the close of FinancialYear till date of this Report which affects the financial position of the Company.
GRATITUDE & ACKNOWLEDGEMENT
Your Directors express their deep gratitude to clients business associatesprincipals bankers regulators exchanges depositories and shareholders for theirvaluable contribution towards the progress of the Company. Your Directors particularlywish to place on record their sincere appreciation of the best efforts put in by theemployees at all levels but for which the Company could not have achieved what it didduring the year under review.
For and on behalf of the Board of Directors
| ||Naresh Pachisia ||Nikunj Pachisia |
| ||Managing Director ||Whole-time Director |
|Dated: 8th May 2021 Place: Kolkata ||DIN: 00233768 ||DIN: 06933720 |