SPA Capital Services Ltd.
|BSE: 542376||Sector: Financials|
|NSE: N.A.||ISIN Code: INE726X01014|
|BSE 05:30 | 01 Jan||SPA Capital Services Ltd|
|NSE 05:30 | 01 Jan||SPA Capital Services Ltd|
SPA Capital Services Ltd. (SPACAPTSER) - Director Report
Company director report
To the Members
Your Directors have pleasure in presenting herewith their 36th AnnualReport of SPA Capital Services Limited (the "Company") on the business andoperations of the company together with the Audited Financial Statements of the Companyfor the year ended on 31st March 2020.
Key highlights of financial performance for SPA Capital ServicesLimited for the financial year 2019-20 are tabulated below:
[Rs. in lakhs)
India's mutual fund (MF] industry is currently experiencing a state offlux; while ample opportunities are knocking at the door its equally concerned with thenumerous challenges
However as Albert Einstein states 'in the middle of difficulty liesopportunity' the dictum is equally applicable to India's mutual fund industry.
The Indian capital markets have witnessed a marked shift in the lastfew years largely owing to the mutual fund industry which has been instrumental inchannelizing retail savings into the capital markets in a big way.
The steady shift in savings pattern in favour of equities through SIP(systematic investment plan) in mutual funds has resulted not only in a significant risein the Indian equity ownership but also contributing as a strong counterbalance toforeign institutional investors.
With only 2 qore investors investing in mutual funds the industry bodypointed out the significant untapped potential for growth in the Indian mutual fund space.
FY 1920 was an eventful year for the global economy. During the firstnine months trade tensions between US and China subsequent Phase-I agreementgeopolitical tensions between US & Iran growth slowdown in China uncertainty aroundBREXIT among others were the key developments. Events took an unfortunate turn with theoutbreak of Covid-19 in the last quarter of FY 19-20. Till February 2020 cases werelargely concentrated in Hubei province of China but by March 2020 all major countrieswere impacted and it was declared a Global Pandemic by the World Health Organisation(WHO). To contain the outbreak many economies implemented partial or full shutdown whichin turn significantly disrupted the economic activity and resulted in large job losses.Most asset classes including equities and commodities fell sharply and there was asubstantial increase in volatility in the financial markets. Oil prices in particularfell to unprecedented levels (brent crude price fell below US$ 20/ barrel) due to severedemand destruction because of lockdown and breakdown of alliance between OPEC and Russiafollowing disagreement regarding cut in oil production.
In view of the above developments International Monetary Fund (IMF)revised down its Global GDP growth forecast for Calendar Year (CY) 2020 to -3% from +3.3%.However it expects the growth rate to bounce back to 5.8% in CY 2021 owing to a low baseand normalization of economic activity.
With a view to cushion the economic impact most global central banksreduced the policy rates significantly. US Fed reduced the target fed fund rate by 150 bps(in addition to 75 bps rate cut in 9MFY20) and brought it down to near zero in March 2020.US Fed and ECB also restarted their Quantitative Easing (QE) programme to supportliquidity. US Fed also took steps like providing US$ swap lines to major central bankslaunching facilities to purchase corporate bonds & commercial papers among others toease liquidity. This was supplemented by fiscal stimulus measures by many countriesnotable being US and Japan who announced fiscal stimulus to the tune of -10% and -20% oftheir GDP respectively. Major fiscal measures included cash transfers interest freeloans supporting exports reduction in taxes and so on.
The AUM of the mutual fund industry in India has grown at a CAGR of15.5% over the past five years with the equity AUM growing at a CAGR of 17.3%. Risingawareness about benefits of investing in equity markets growing popularity of ways ofinvesting such as SIP are some of the factors contributing to the increasedparticipation of domestic individual investors in the Indian mutual fund industry. TheMAAUM of individual investors in the industry has reached INR 12.9 Lakh Crore in March2020 and has recorded a growth of 18.2% since March 2015. The number of individual folioshave increased from 4.14 Crore to 8.93 Crore in this period. Net inflows into the industryover the past five fiscal years were INR 9.46 Lakh Crore of which INR 6.47 Lakh Crorehave been in equity-oriented schemes. On the other hand fixed income products includingliquid funds have seen increased popularity amongst corporate as well as retail and highnet-worth investors.
The monthly SIP flows grew 2.8 times from April 2016 to INR 8641Crore in March 2020. The number of SIP transactions processed in March 2020 was 3.12 Croreas compared to 1.01 Crore in April 2016. SIPs offer the benefit of regular investingcoupled with benefits of rupee cost averaging and are typically sticky long term inflowsand lend visihility and predictability of AUM growth.
In this period Indian equity markets achieved a healthy balancebetween the domestic institutional investors (largely Mutual Funds) and Foreign PortfolioInvestors (FPIs) thereby significantly reducing the skew towards reliance on FPI inflowslending more stability to the Indian markets.
We believe we are well-poised to capitalise on the healthy prospects ofthe industry and further solidify our position in the market. Our strong brand equitydisciplined investment philosophy and robust process customer-centric approach andexpansive reach should facilitate our future growth.
BUSINESS AND OPERATIONAL HIGHLIGHTS
Our revenues primarily consist of revenue from sale of securitiesbrokerage income from distribution of Mutual Fund and other financial products incomefrom interest and dividend and is registered as AMFI Registered Mutual Fund Advisory(ARMFA) with Association of Mutual Fund (AMFI).
The Company is also registered with Reserve Bank of India as Nondeposit accepting Non Banking Financial Company (NBFC) and has obtained registration asPoint of Presence - Sub entity (POP-SE) from Pension Fund Regulatory and DevelopmentAuthority (PFRDA) for providing various facilities to the Subscribers under the NationalPension Scheme (NPS) and rendering other services as specified under the Pension FundRegulatory and Development Authority Act 2013.
During the year the brokerage Income has decreased from Rs.398990195/- in the Financial Year 2018-19 to Rs. 320767264/- in the financial year2019-20.
It is submitted further that the profit before tax decreased from Rs.10951783/- in the Financial Year 2018-19 to Rs. 6894267 in the financial year2019-20.
LISTING OF SHARES OF THE COMPANY
With effect from February 07 2019 the Equity Shares of the Companyare being listed on the BSE Limited (BSE). The Company has entered Into Listing Agreementwith DSE Ltd. in terms of provisions of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 within the prescribed time limit.
The Company has timely paid the Annual Listing Fees for the financialyear 2020-2021.
In order to conserve the resources of the Company and to plough backprofits in the Company and to meet the fund requirements of the Company for the purpose ofcapitalizing on the opportunities available your Directors have not recommended anydividend for the year under review.
TRANSFER TO GENERAL RESERVE
During the year under review the company has not transferred any amountto the General Reserves.
The Reserves and Surplus of your company stood at Rupees 118152497/-as at March 31 2020.
The Authorized Share Capital of the Company as at March 31 2020 is Rs.50000000 divided into 5000000 equity shares of Rs.10/- each. The paid up share capitalof the company as at March 31 2020 is Rs. 30742250 divided into 3074225 equity sharesof Rs.10/- each.
During the year under review there has been no change in the Authorizedand Paid up Share Capital of the Company.
HOLDING / SUBSIDIARY / ASSOCIATE COMPANIES
Your company does not have any Holding and Subsidiary Company withinthe meaning of Section 2(46) and Section 2(87) of the Companies Act 2013("Act").
Your company has acquired equity share equivalent to 40.2% of theissued and paid -up share capital of the SPA Investment Adviser Private Limited(Previously known as IFAN Finserv Private Limited) ("Associate Company") onMarch 29 2020 from the Promoter and other existing shareholders of the AssociateCompany. Pursuant to this acquisition SPA Investment Adviser Private Limited (Previouslyknown as IFAN Finserv Private Limited) becomes the Associate Company of your company.
Your Company has neither invited nor accepted any deposits from publicwithin the meaning of Section 73 of the Companies Act 2013 read with Companies(Acceptance of Deposit~) Rules 2014 during the financial year 2018-19.
EXTRACT OF THE ANNUAL RETURN
As required under Section 134(3)(a)of the Companies Act 2013 thedetails forming part of the extract of the Annual Return as stipulated under Section 92(3)of the Companies Act 2013 read with the Companies (Management and Administration) Rules2014 in form MGT - 9 is available on the webSite of the Company athttp://www.wacapital.com/CapitalServices/SPACapitalServicesMGT.pdf and the Annual
Return for the Financial year 2018-19 in the MGT -7 is available on thewebsite of the Company at http: If www.spacapital.com/CapitaIServicesIMGT-7%20-%202018-19.pdf
The shareholders of the Company had after considering recommendation ofthe Audit Committee and Board of Directors re-appointed MIs SNMG & Co. CharteredAccountants (Regn. No. 004921N) as the Statutory Auditors of the Company to hold officefrom the conclusion of the 35th Annual General Meeting upto the conclusion of 40th AnnualGeneral Meeting.
The report of the Auditors on the final accounts of the Company isbeing attached with the Balance Sheet. The notes to the said report are self explanatoryand therefore do not require any further clarifications.
During the year under review the Statutory Auditors have not reportedany incident of fraud under Section 143(12) of the Companies Act 2013 to the AuditCommittee therefore no detail is required to be disclosed under Section 134(3)(ca) of theCompanies Act 2013.
Qualifications reservation or adverse remark as made by the StatutoryAuditors in their audit report (both on standalone and consolidated basis) for theFinancial Year 2019-20 and the management's reply is as follows:
The Company has appointed M/s RMG and Associates Company Secretariesto conduct the Secretarial Audit for the financial year ended March 31 2020 pursuant toSection 204 of the Companies Act 2013 and rules made thereunder.
The Secretarial Audit Report furnished by M/s RMG and Associates isannexed to this report as
The Managements' Reply to the observations reported in the SecretarialAudit Report is as follows:
As per the provision of Regulation 15(2) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 Compliance with CorporateGovernance provisions as specified in the Regulations 17 to 27 and clause (b) to (i) ofRegulation 46(2) and para C D and E of Schedule V shall not apply to listed entitieshaving paid-up equity share capital not exceeding Rs. 10 Crores and net worth notexceeding Rs. 25 Crores as on the last date of previous financial year.
The Paid up Equity Share Capital and the Net Worth of the Company isRs. 30742250/- and Rs. 166757461/- respectively which are less than Rs.100000000/- and Rs. 250000000/ respectively as per the Audited Financial Statementsof the company for the financial year 2019-2020.
Henceforth Company being falling under the specified limits of aboveregulation requirement of giving Corporate Governance report in Annual Report as per thePara C of the Schedule V is exempted to the company and hence not required to be prepared.
However your Company has made every effort to comply with theprovisions of the Corporate Governance and to see that the interest of the Shareholdersand the Company are properly served. It has always been the Company's endeavor to excelthrough better Corporate Governance and fair & transparent practices many of whichhave already been in place even before they were mandated by the law of land.
The management of Company believes that it will further enhance thelevel of Corporate Governance in the company.
CORPORATE SOCIAL RESPONSIBILITY
In terms of provisions of Section 135 of the Companies Act 2013 andRules made thereunder provisions of Corporate Social responsibility is not applicable tothe company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Board Composition and its Meetings
As on March 31 2020 the Board comprises of 4 Directors (1 ChairmanCum Managing Director 1 Non- Executive Promoter Director and 2 Independent Directors).The composition of the Board represents a healthy blend and optimal mix ofprofessionalism knowledge and experience which enables the Board to discharge itsresponsibilities and provide effective leadership for long term vision and to achieve thehighest level of governance. The Board critically evaluates the Company's strategicdirections management policies and their effectiveness. The Board regularly reviews interalia annual business plans performance against plans business opportunities includinginvcsllllcnlsftlis investment:; related party transactions compliance processesIncluding material legal issues strategy risk management practices and approval offinancial results. Frequent and detailed interaction provides the strategic roadmap forthe Company's future growth.
Table showily: the Collocation of tile Board as on March 31. 2020
The Board met 5 (Five) times during the year 2019-2020 on May 28 2019September 02 2019 September 14 2019 December 13 2019 and February 14 2020. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013 and rules made there under.
The details of number of meetings attended by each Director during thefinancial year 2019-20 are as follows:
None of the directors of the company is disqualified under Section164(2) of the Companies Act 2013 and the Rules made there under. .
Change in Composition of the Board
During the Year \lnder review following changes were made in thecomposition of the Board of Directors:
1. Mr. Amit Kumar Jakhotia (DIN: 07947687) has resigned from theposition of the Independent Director of the Company with effect from the close ofbusiness hours of March 192020;
2. Mr. Mahaveer Prasad Mundhra (DIN: 00642941) has resigned from theposition of the whole-time director of the Company with effect from the close of businesshours of September 30 2019;
3. Mr. Vikas Dhingra (DIN: 00342380) ceased to be the IndependentDirector of the Company with effect from the close of business hours on September 302019 due to expiry of his term;
4. Mr. Kamal Binani (DIN: 00340348) has resigned from the position ofthe Independent Director of the Company with effect from the close of business hours ofSeptember 03 2019;
5. Mr. Kamal Kishore Somani (DIN: 00254658) has resigned from theposition of the Director of the Company with effect from the close of business hours ofSeptember 02 2019;
After the closure of the Financial Year following changes were made Inthe composition of the Board of Directors:
1. Ms. Sugeeta Upadhyay has been appointed as an additional directorcategorized as independent director with immediate effect from July 27 2020.
As per the provisions of Section 152 of the Companies Act 2013 and interms of the Articles of Association of the Company Ms. Honey Parwal will retire byrotation and further being eligible has offered herself for re-appointment at the ensuingAnnual General Meeting.
Change in Key Managerial Personnel of the Company
During the year under review Mr. Mahaveer Prasad Mundhra (DIN:00642941) has resigned from the position of the whole-time director of the Company witheffect from the close of business hours of September 30 2019.
The Independent Directors of the Company are individuals of eminence& repute in their respective fields and they actively contribute to the strategicdirection operational excellence & corporate governance of the Company. In accordancewith the criteria set for selection of Independent Directors and for determining theirindependence the Nomination and Remuneration ('NR') Committee of the Board inter aliaconsiders the qualifications positive attributes area(s) of expertise and Directorships/Committee memberships held by these individuals in other companies. The Board considersthe NR Committee's recommendation and takes appropriate decisions for appointment of theIndependent Directors.
Accordingly as on March 31 2020 the Company has Mr. Ramesh Menon andMs.Sugeeta Upadhyay as Independent Directors of the Company.
In compliance with the provisions of Section 149 read with Schedule IVof the Companies Act 2013 a separate meeting of the Independent Directors was held onFebruary 142020.
Declaration of independence
The Company has received declarations from Mr. Ramesh Menon and Ms.Sugeeta Upadhyay Independent directors of the Company confirming that they meet thecriteria of independence as prescribed under Section 149(6) of the Companies Act 2013read with Schedule IV and the Rules made thereunder and that they have complied with theprovisions of sub-rule (1) and sub-rule (2) of Rule 6 of Companies (Appointment andQualification of Directors) Rules 2014 for inclusion of their name in the database ofIndependent Directors.
Performance Evaluation of Independent Directors by the Board
The performance evaluations of the Independent Directors were carriedout by the entire Board. The Directors expressed their satisfaction with the evaluationprocess.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board Committees playa vital role in strengthening the CorporateGovernance practices and focus effectively on the issues and ensure expedient resolutionof the diverse matters. All observations recommendations and decisions of the Committeesare placed before the Board for information or for approval.
The Board of Directors has from time to time constituted thefollowing Committees namely:
1) Audit Committee
2) Stakeholder Relationship Committee
3) Nomination and Remuneration Committee
Audit Committee Composition and its Meetings
As on March 31 2020 the Audit Committee comprises of 2 Directors i.e.Mr. Ramesh Menon as Chairman who is an Independent Director and Mr. Sandeep ParwalChairman Cum Managing Director which was duly reconstituted on July 27 2020.Accordingly now the Audit Committee comprises of 3 Directors i.e. Mr. Ramesh Menon asChairman who is an Independent Director Mr. Sandeep Parwal Chairman Cum ManagingDirector and Ms. Sugeeta Upadhyay Independent Director.
The role terms of reference and powers of the Audit Committee are inconformity with the requirements of the Companies Act 2013 and SEBI (Listing Obligationsand Disclosure Requirement) Regulations 2015.
During the period under review the Board of Directors of the Companyaccepted all the recommendations of the Audit Committee.
The Audit Committee met 5 (FIVE) times during the year 2019-2020 on May28 2019 September 022019 September 14 2019 December 13 2019 and February 14 2020.The intervening gap between the Meetings was within the period prescribed under theCompanies Act 2013 and rules made there under.
Stakeholder Relationship Committee Composition and its Meetings
As nn March 31 2020 thp. Stakeholder Relationship Committee comprisesof 2 Directors Le. Mr. Ramesh Menon as Chairman who is an Independent Director and Mr. Sandeep Parwal Chairman Cum Managing Director which was duly reconstituted on July 272020. Accordingly now the Stakeholder Relationship Committee comprises of 3 Directorsi.e. Mr. Ramesh Menon as Chairman who is an Independent Director Mr. Sandeep Parwa\Chairman Cum Managing Director and Ms. Sugeeta Upadhyay Independent Director.
The role terms of reference and powers of the Stakeholder RelationshipCommittee are in conformity with the requirements of the Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirement) Regulations 2015.
Nomination and Remuneration Committee Composition and its Meeting
The composition and terms of reference of the Nomination andRemuneration Committee satisfy the provisions of Section 178 of the Companies Act 2013.At present the Nomination and Remuneration (NR) Committee comprises of three (3)Directors i.e. Mr. Ramesh Menon as Chairman who is an Independent Director Ms. HoneyParwal Director and Ms. Sugeeta Upadhyay Independent Director.
Nomination Remuneration Committee Three (3) limes during Lhe financialyear 2019-20 on May 282019 September 02 2019 and December 13 2019.
The role terms of reference and powers of the Nomination andRemuneration Committee are in conformity with the requirements of the Companies Act 2013and SEBI (Listing Obligations and Disclosure Requirement) Regulations 2015.
The NR Committee has formulated the criteria for determining thequalifications attributes & independence of a Director & recommended to theBoard a policy relating to remuneration for the Directors KMP & Senior ManagementPersonnel.
The Nomination and Remuneration Committee while formulating the policytakes into consideration the best remuneration practices in the industry while fixingappropriate remuneration packages and for administering the long-term incentive plans.
Further compensation package of the Directors Key ManagerialPersonnel Senior Management and other employees is designed based on the set ofprinciples enumerated in the said policy. An extract of the policy covering theserequirements is placed at website of the Company athttp://www.spacapital.com/CapitaIServices/RemunerationPolicy.pdf.
In Compliance with the provisions of Section 177(9) of the CompaniesAct 2013 read with the rules made there under the Company has adopted a Whistle BlowerPolicy and has established the necessary vigil mechanism for Directors & employees toreport genuine concerns about unethical behavior actual or suspected fraud or violationof the Company's code of conduct. The Policy also provides for adequate safeguard againstvictimization of Whistle Blower who avaHs of such mechanism and also provides for theaccess to the Chairman of the Audit Committee.
Under this policy we encourage our employees to report any reportingof fraudulent financial or other information to the stakeholders any conduct that resultsin violation of the Company's Code of Business Conduct to management (on an anonymousbasis if employees so desire).
Likewise under this policy we have prohibited discriminationretaliation or harassment of any kind against any employees who based on the employee'sreasonable belief that such conduct or practice have occurred or are occurring. reportsthat information or participates in the said investigation. No individual in the Companyhas been denied access to the Audit Committee.
Mechanism followed under this policy is appropriately communicatedwithin the Company across all levels.
The Audit Committee periodically reviews the functioning of thismechanism.
INTERNAL FINANCIAL CONTROLS
Internal Financial Controls are an integrated part of the riskmanagement process addressing financial and financial reporting risks. The internalfinancial controls have been documented digitized and embedded in the business processes.
Assurance on the effectiveness of internal financial controls isobtained through management reviews control self assessment continuous monitoring byfunctional experts as well as testing of the internal financial control systems by theinternal auditors and statutory auditors during the course of their audits. The Companybelieves that these systems provide reasonable assurance that Company's internal financialcontrols are designed effectively and are operating as intended.
Your company has in place adequate financial controls with reference tofinancial statements. During the year such controls were reviewed and it did not observeany reportable material weakness in the design or operation of financial controls.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
An effective internal control mechanism is imperative to good corporategovernance. The Company has put in place robust internal control systems and procedures inline with the scale of operations and business to ensure timely and accurate recording offinancial transactions and adherence to applicable accounting standards; optimumutilization and safety of assets; compliance with applicable laws & regulations; andan effective management information system & reviews of other systems. The Companyalso has in place well-defined organizational structures to facilitate clearly establishedroles and responsibilities for effective discharge of duties in a smooth manner.
The Company has a policy for performance evaluation of the BoardCommittees and other individual Directors (including Independent Directors) which includecriteria for performance evaluation of Non-executive Directors and Executive Directors.
In accordance with the manner specified by the NR Committee the Boardcarried out annual performance evaluation of the Board its Committees and IndividualDirectors.
The Independent Directors carried out annual performance evaluation ofthe non-independent directors and the Board as a whole and the Chairperson.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans given and Investments made under the provisions ofSection 186 of the Companies Act 2013 are given under the respective heads of FinancialStatements. The Company has not given any Corporate Guarantee (s) in respect of any loansas at March 31 2020.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
Even though operations of the Company are not energy intensive themanagement has been highly conscious of the importance of conservation of energy andtechnology absorption at all operational levels and efforts are made in this direction ona continuous basis. In view of the nature of activities which are being carried on by theCompany the particulars as prescribed under section 134(3)(m) of the Act read with rule 8of the Companies (Accounts) Rules 2014 regarding Conservation of Energy and TechnologyAbsorption are not applicable to the Company and hence have not been provided.
FOREIGN EXCHANGE EARNINGS AND OUTGO
There has been no foreign exchange earnings or outgo during the yearunder Report.
RELATED PARTY TRANSACTIONS
All Related Party Transactions that were entered into during thefinancial year 2019-20 were on "Arm's length" basis and were in the ordinarycourse of business intended to further the Company's interest.
The Policy on Materiality of Related Party Transactions and on dealingwith Related Party Transactions as approved by the Board is put up on the Company'swebsite and can be accessed athttp://www.soacapital.com/CapitaIServices/policv%20on%20Related%2Oparty%20transactions.pdf
During the period under review the Company had not entered into anymaterial transaction with any of its related party. None of the transactions with any ofrelated parties were in conflict with the Company's interest.
Members may refer Notes the Financial Statement which sets out RelatedParty Disclosures pursuant to IND AS.
RISK MANAGEMENT POLICY
Risk Management is the continuous process of systematicallyidentifying. quantifying. prioritizing and responding to all risks and opportunities thatcan affect the achievement of the Company's strategic and annual objectives. Accordinglythe risk Management Policy of the company elaborates the various methods inidentification assessment monitoring and mitigation of various risks that the companymay face in its business. The company's objective is to achieve a balance betweenacceptable levels of risk and reward in effectively managing its operational financialbusiness and other risks.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OFTHE COMPANY
There have been no material changes and commitments affecting thefinancial position of the Company which occurred during between the end of the financialyear to which the financial statements relate and the date of this report.
MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT
Management's Discussion and Analysis Report for the year under reviewas stipulated under the Securities and Exchange Hoard of India (Listing Obligations andDIsclosure Requirements) Regulations 2015 ("Listing Regulations") is presentedin a separate section forming part of the Annual Report marked as "Annexure B".
MAINTENANCE OF COST RECORDS
As per the provisions of the Section 148(1) of the Companies Act 2013the Company is not required to maintain cost Records. Accordingly such accounts andrecords are not made and not maintained.
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors' Responsibility Statement referred to in clause (c) ofsub-section (3) of Section 134 of the Companies Act. 2013. state that-
1. In the preparation of the annual accounts for financial year ended31st March. 2020. the applicable accounting standards have been followed and there is nomaterial departures from the same;
2. The Directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for that year;
3. The Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
4. The Directors have prepared the annual accounts for the financialyear ended 31st March. 2020 on a going concern basis.
5. The Directors have laid down internal financial controls to befollowed by the Company and such internal financial controls are adequate and operatingeffectively;
6. The directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such system were adequate and operatingeffectively.
Employees are our vital and most valuable assets. We have created afavorable work environment that encourages innovation and meritocracy. It is important forus that organization culture and organization strategy are well aligned. Over a period wehave developed a strong culture of transparency through constant employee communicationand have developed strong performance management practices wherein best class rewards andrecognition systems are deployed. We have also set up a scalable recruitment and humanresources management process which enables us to attract and retain high caliberemployees.
PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 197(12) of the Act read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules. 2014. a statement showing the names of top ten employees in terms ofremuneration drawn and names and other particulars of the employees drawing remunerationin excess of the limits set out in the said rules forms part of this Report.
Disclosures relating to remuneration and other details as requiredunder Section 197(12) of the Act read with Rule 5(1). 5(2) and 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules. 2014 forms part of thisReport and marked as "Annexure - C".
PREVENTION OF SEXUAL HARASSMENT POLICY
The Company has in place a Prevention of Sexual Harassment policy inline with the requirements of the Sexual Harassment of Women at the Workplace (Prevention.Prohibition and Redressal) Act. 2013.
An Internal Complaints Committee has been set up to redress complaintsreceived regarding sexual harassment. All employees (permanent contractual temporarytrainees) are covered under this policy. During the year 2019-2020 no complaints werereceived by the Company related to sexual harassment
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS ORCOURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
There are no significant and material orders passed by the regulatorsor courts or tribunals that may have an impact for the company as a going concern and/orcompany's operations.
Mr. Kamal Kishore Somani one of Promoter Director of the Company hasfiled an application u/s 241 242 and 244 of the Companies Act 2013. before the NationalCompany Law Tribunal New Delhi Principal Bench for seeking an order to restrain theCompany from convening the Extra Ordinary General Meeting on November 16 2018 for theremoval of Mr. Kamal Kishore Somani and appointment of Mr. Sanjay Joon as director of theCompany on the requisition of Dhrubtara Trading Private Limited.
However the National Company Law Tribunal New Delhi Principal Benchhas vide its Order dated November 16 2018 in the Company Application No.422/241-242/PB/2018 in the matter of Kamal Kishore Somani & Ors. Vs. SPA CapitalServices Limited & Ors. has stayed the holding of the Extra Ordinary General Meetingon November 16 2018 by the Company.
Further in terms of settlement arrived between the parties petitionerhas applied for withdrawal of petition pursuant to which the Hon'ble NCLT has dismissedthe petition vide its order dated September 11 2019 in the Company Application No.422/241-242/PB/2018 in the matter of Kamal Kishore Somani & Ors. Vs. SPA CapitalServices Limited & Ors.
There is no Corporate Insolvency Resolution Process initiated under theInsolvency and Bankruptcy Code 2016.
OTHER DISCLOSURES AS PER COMPANIES ACT 2013 AND THE RULES MADETHEREUNDER ARE PROVIDED HEREUNDER
(a) Issue of Equity Shares with Differential Rights:-
During the period under review the Company has not issued any EquityShares with Differential Rights.
(b) Issue of Employee Stock Options: -
During the period under review the Company has not issued any EmployeeStock Options.
(c) Issue of Sweat Equity Shares:-
During the period under review the Company has not issued any sweatequity shares as specified In Rule 8(13) of Companies (Share Capital and Debenture Rules2014).
The Directors state that applicable Secretarial Standards i.e. 55-1and 55-2 relating to 'Meetings of the Board of Directors' and 'General Meetings'respectively have been duly followed by the Company.
We take this opportunity to express our gratitude to the Shareholders& Investors of the Company for their unflinching trust and support. We would also liketo thank the Regulatory Authorities and Banks for their cooperation and assistance. Wewould like to place on record their sincere appreciation and acknowledgment towards theefforts and contribution made by the personnel at all levels and their continued supportand faith in the Organization. We would like to reiterate our commitment to continue tobuild our organization into a truly world class enterprise in all respects.