STEEL CITY SECURITIES LIMITED
49-52-5/4 Shanthipuram Visakhapatnam 530016
Andhra Pradesh India.
Your Directors have pleasure in presenting the Twenty- Fifth Annual Report on thebusiness and operations of the Company along with the Audited Financial Statements for theFinancial Year ended 31st March 2019 and the Report of the Auditors thereon.
1. FINANCIAL PERFORMANCE AND REVIEW : (Standalone and Consolidated)
| || || |
(Rs. in Lakhs)
|Particulars ||Standalone ||Consolidated |
| ||31.03.2019 ||31.03.2018 ||31.03.2019 ||31.03.2018 |
|Gross Income ||6148.55 ||6361.67 ||6388.71 ||6613.86 |
|Expenditure ||4729.44 ||4667.40 ||4938.61 ||4877.93 |
|Profit/ loss before Depreciation Finance Costs Exceptional Items & Taxation ||1419.11 ||1694.27 ||1450.09 ||1735.93 |
|Less: Depreciation ||92.71 ||86.28 ||95.78 ||89.56 |
|Profit/ loss after Depreciation and before Finance Costs Exceptional Items & Taxation ||1326.40 ||1607.99 ||1354.32 ||1646.37 |
|Less: Finance Costs ||31.05 ||36.14 ||34.28 ||40.59 |
|Profit/ loss before Exceptional Items & Taxation ||1295.35 ||1571.85 ||1320.03 ||1605.78 |
|Add/ (Less): Exceptional Items ||0.00 ||0.00 ||0.00 ||0.00 |
|Profit/ loss before taxation ||1295.35 ||1571.85 ||1320.03 ||1605.78 |
|Less: Provision for Taxation || || || || |
|For earlier years ||52.72 ||22.83 ||52.23 ||24.00 |
|For current year ||386.54 ||439.54 ||402.72 ||451.42 |
|Deferred Tax Liability ||(10.84) ||1.61 ||(11.04) ||1.47 |
|Provision for FBT ||0.00 ||0.00 ||0.00 ||0.00 |
|Net Profit after Taxation ||866.92 ||1107.86 ||876.13 ||1128.90 |
|Add: Share of Profit in Associate ||- ||- ||23.90 ||15.25 |
|Profit after Tax and Share of Profit in Associate ||- ||- ||900.03 ||1144.15 |
|Less: Minority Interest ||- ||- ||- ||(7.42) |
|Particulars ||Standalone ||Consolidated |
| ||31.03.2019 ||31.03.2018 ||31.03.2019 ||31.03.2018 |
|Profit for the Year ||866.92 ||1107.86 ||900.03 ||1136.73 |
|Add: Balance brought forward from earlier year ||3458.85 ||2912.93 ||4403.75 ||4018.10 |
|Balance available for appropriations ||4325.77 ||4020.80 ||5303.78 ||4976.81 |
|Less: Amount transferred to Reserves ||86.69 ||110.79 ||87.61 ||114.56 |
|Less: Interim Dividend and Dividend Tax ||364.24 ||363.65 ||364.24 ||363.65 |
|Less: Proposed Dividend and Dividend Tax ||91.06 ||87.51 ||91.05 ||94.85 |
|Balance carried forward to P & L A/c ||3783.77 ||3458.85 ||4760.88 ||4403.75 |
2. AMOUNT TRANSFERRED TO RESERVES:
The Board of Directors proposes to transfer an amount of Rs. 86.69 Lakhs to GeneralReserve for the Financial Year 2018-19.
The Board of Directors of the Company at their meeting held on the 12th dayof October 2018 has declared 1st Interim Dividend @ 10% for every Equity Shareof Rs. 10/- each and has declared 2nd Interim Dividend @10% for every EquityShare of Rs.10/- each at their meeting held on 18th day of February 2019 afterconsidering the Provisional Financials of the Company. The Board at their meeting held on29th May 2019 further recommends a Final Dividend @ 5% for every Equity Shareof Rs. 10/- each after taking into consideration the Financial position of the Company. Onthe whole the Company has declared a dividend of Rs. 2.50/- i.e @25% (inclusive ofInterim and Final Dividend) for every Equity Share of Rs.10/- each for the Financial Year2018-19.
4. STATE OF AFFAIRS OF THE COMPANY DURING THE YEAR:
During the year under review the Company has recorded an Income of Rs. 6148.55 Lakhsas compared to the previous year amount of Rs. 6361.67 Lakhs. The Expenditure incurredbefore depreciation during the year was Rs. 4760.49 Lakhs as against the amount of Rs.4703.54 Lakhs during the previous year. The depreciation and provision for taxes providedduring the year were Rs. 92.71 Lakhs and Rs. 428.42 Lakhs respectively as compared to thedepreciation and provision for taxes provided for the previous year were Rs. 86.28 Lakhsand Rs. 463.98 Lakhs respectively. Hence the Company has earned a Net Profit of Rs.866.92 Lakhs as compared to the previous year amount of Rs. 1107.86 Lakhs. During thisyear the Net Profit has decreased @ 21.75% as compared to the previous year due to thesluggish market conditions prevailing during the year especially in the High Yieldcash segment. The Board has taken all necessary steps to expand its activities byestablishing new Branches/Centers in other States and also by adding new services andproducts. The income from the segment of e-Governance also will certainly increase thebusiness of the Company and has opened around 5000+ Franchises during the Financial Year2018-19. The Company also proposes to get itself registered as a Mutual Fund Intermediary.Hence the Company expects bright future in the years to come.
During the year under review the Company has recorded an Income of Rs. 6688.71 Lakhsas compared to the previous year amount of Rs. 6613.86 Lakhs. The Expenditure incurredbefore Depreciation during the year was Rs. 4972.89 Lakhs as against the amount of Rs.4918.52 Lakhs during the previous year. The depreciation and provision for taxes providedduring the year were Rs. 95.78 Lakhs and Rs. 443.91 Lakhs respectively as compared to thedepreciation and provision for taxes provided for the previous year were Rs. 89.56 Lakhsand Rs. 476.88 Lakhs respectively. Hence the Company has earned a Net Profit of Rs.876.13 Lakhs before considering Minority Interest and Share of Associate and Rs. 900.03Lakhs after considering Minority Interest and Share of Associate as compared to theprevious year amount of Rs. 1128.90 Lakhs before considering Minority Interest and Shareof Associate Rs. 1136.73 Lakhs after considering Minority Interest and Share of Associate.The Net Profit for the year decreased by 22.39% as compared to the Net Profit for theprevious year. The Board considered the matter and has formulated necessary business plansto further increase the profit of the Company during the current Financial Year 2018-19.
5. CHANGE IN THE NATURE OF BUSINESS:
There is no change in the nature of Business of the Company during the Financial Year2018-19.
6. MATERIAL CHANGES AND COMMITMENTS OCCURRED SINCE THE END OF THE FINANCIAL YEARTILL THE DATE OF THE REPORT:
Your Company got itself migrated from SME Platform NSE Emerge to the Main Board of NSEfrom 27th day of June 2019. Further Your Company has laid down the Foundation Stone toconstruct its own building at Seethammapeta Visakhapatnam on the 27th day of June 2019.
7. MILESTONES ACHIEVED:
You're Directors are glad to inform that your Company is now migrated to the Main Boardof National Stock Exchange of India on June 27th 2019. Your Company is having itsfootprint in 34 States and Union Territories across India and is operating through morethan 70 owned branches 8500+ Franchises and is having more than 5000 Authorised Personsworking under the Company.
8. GROWTH PROSPECTS FOR INDIAN CAPITAL MARKET IN 2019:
Stock market ended financial year (FY) 2018-19 on a stellar note thanks to a sharprally in March after weak global cues and IL&FS crisis during the second half of thefiscal dented the investor sentiment in a big way. The S&P BSE Sensex rallied 17 percent in FY19 while the broader Nifty 50 index of the National Stock Exchange (NSE) gained15 per cent. Out of this 7.23 per cent gain in Sensex and 6.99 per cent in Nifty came inMarch alone.
Going forward equities are likely to maintain their upward trajectory and touch newhighs; however intermittent volatility due to general elections occasional profitbooking global developments such as Brexit central banks' policy decisions and oilprices cannot be ruled out.
Most experts believe there is a fair chance that it could happen. "The year ofFY20 will belong to mid and small-caps for having handling well the last period of slowbusinesses tight liquidity and SEBI norms which impacted the valuation and growth ofsuch classes. These are likely to lend a brighter period in the new fiscal year"says Vinod Nair head of research at Geojit Financial Services.
"Our analysis of fundamentals and valuations for mid-caps and comparison ofmid-caps versus large-caps on several frontiers suggest that the relative attractivenessof mid-caps has gone up. Hence we believe the broad underperformance of the mid-caps isoverdone and interesting bottom-up opportunities are now available in this space acrosssectors" says Khemka.
9. CAPITAL AND DEBT STRUCTURE:
a. AUTHORISED SHARE CAPITAL:
The present Authorised Share Capital of the Company is Rs. 250000000/- (RupeesTwenty Five Crores Only).
b. ISSUED AND PAID - UP OF EQUITY SHARES:
The present Issued and Paid-up Share Capital of the Company is Rs. 151070950/-(Fifteen Crores Ten Lakhs Seventy Thousand Nine Hundred and Fifty Only).
c. ISSUE OF EQUITY SHARES:
During the year the Company has not issued any Equity Shares.
d. BUY BACK OF SECURITIES:
The Company has not bought back any of its Securities during the year under review.
e. SWEAT EQUITY:
The Company has not issued any Sweat Equity Shares during the year under review.
f. BONUS SHARES:
No Bonus Shares were issued during the year under review.
g. EMPLOYEES STOCK OPTION PLAN:
The Company has not provided any Stock Option Scheme to the Employees.
h. ISSUE OF EQUITY SHARES WITH DIFFERENTIAL RIGHTS:
The Company has not issued any Equity Shares with differential Rights during the year.
i. PROVISION OF MONEY BY COMPANY FOR PURCHASE OF ITS OWN SHARES BY EMPLOYEES OR BYTRUSTEES FOR THE BENEFIT OF EMPLOYEES:
The Company has not provided any money for purchase of own Shares by Employees or byTrustees for the benefits of Employees.
10. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND:
Your Company has transferred an amount of Rs. 105800/- of Unclaimed Dividend as andwhen they became due to Investor Education and Protection Fund (IEPF) during the FinancialYear 2018-19.
Pursuant to the provisions of the Investor Education Protection Fund (Uploading ofinformation regarding unpaid and unclaimed amounts lying with Companies) Rules 2012 theCompany has already filed the necessary form and uploaded the details of unpaid andunclaimed amounts lying with the Company as on the date of last AGM (i.e. 1st September2018) with the Ministry of Corporate Affairs.
11. TRANSFER OF SHARES TO INVESTOR EDUCATION AND PROTECTION FUND:
Pursuant to the provisions of Section 124(6) Companies Act 2013 the Company isrequired to transfer Shares of the Company relating to those Shareholders who haven'tclaimed Dividend for a period of 7(Seven) Consecutive years. Hence as per the aboveprovisions Your Company has transferred 62500 Equity Shares of the Company to InvestorEducation and Protection Fund during the Financial year 2017-18 and there is norequirement of further transfer of Shares to IEPF during the Current Financial Year.
(a) Change in the Composition of the Board of Directors:
Sri. T. V. Srikanth Additional Director of the Company was appointed as Whole Time Director of the Company designated as Director (IT) at the Annual General Meeting ofthe Company held on 1st September 2018.
(b) Independent Directors:
Pursuant to the provisions of Sections 149 152 read with Schedule IV and all otherapplicable provisions of the Companies Act 2013 and the Companies (Appointment andQualification of Directors) Rules 2014 Sri Godithi Satya Rama Prasad Sri MuraliKrishna Cherukuri Sri. M. H. Jagannadha Rao and Sri. B. Krishna Rao continue asIndependent Directors of the Company.
They have submitted a declaration that each of them meets the criteria of independenceas provided in Section 149(6) of the Act and there has been no change in the circumstanceswhich may affect their status as Independent Director during the year.
(c) Retirement by Rotation:
In terms of Section 152 of the Companies Act 2013 Sri. T. V. Srikanth Director ofthe Company is liable to retire by rotation at the forthcoming Annual General Meeting andbeing eligible offered himself for re-appointment.
The Board confirms that none of the Directors of the Company is disqualified from beingappointed as Director in terms of Section 164 of the Companies Act 2013 and necessarydeclaration has been obtained from all the Directors in this regard.
(d) Key Managerial Personnel (KMP):
Pursuant to the provisions of Section 203 of the Act which came into effect from April1 2014 the Board of Directors have approved the appointments of Sri KamireddiSatyanarayana Executive Chairman; Sri Satish Kumar Arya Managing Director; Sri. T. V.Srikanth Whole Time Director; Sri Ramu Naraharasetti Chief Financial Officer(CFO) and Smt. M. Srividya Company Secretary continue to hold the office as KMP of theCompany.
13. COMPANY'S POLICY ON DIRECTOR'S APPOINTMENT AND REMUNEARATION:
The Company has formulated a policy on Director's appointment and Remuneration which isavailable on the website of the Company www.steelcitynettrade.com .
14. REMUNERATION OF MANAGING DIRECTOR / WHOLE-TIME DIRECTOR FROM SUBSIDIARY COMPANY:
None of the Whole Time Director's or Managing Director of the Company does not draw anyremuneration from the Subsidiary Company.
15. DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134 (5) of the Companies Act 2013 Board of Directors of theCompany confirm that:
a) In preparation of the Annual Accounts for the financial year ended 31st March 2019the applicable Accounting Standards have been followed along with proper explanation tomaterial departures;
b) The Directors have selected Accounting Policies consulted the Statutory Auditorsand applied them consistently and made judgments and estimates that are reasonable andprudent so as to give a true and fair view of the state of affairs of the Company as atend of the financial year and of the profit or loss of the Company for that period.
c) The Directors have taken proper and sufficient care to the best of their knowledgeand ability for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act 2013 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities and
d) The Directors have prepared the Annual Accounts of the company on a going concernbasis;
e) The Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
f) There is a proper system to ensure compliance with the provisions of all applicablelaws and that such systems are adequate and operating effectively.
16. PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES ASSOCIATES ANDJOINT VENTURE COMPANIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENT:
Our Company has One (1) Wholly Owned Subsidiary i.e. M/s. Steel City CommoditiesPrivate Limited and an Associate Company i.e M/s. Steel City Financial Services PrivateLimited. The financial performance of both the Companies is enumerated below:
Steel City Commodities Private Limited
Steel City Commodities Private Limited became Subsidiary of the Company in 2004 andWholly Owned Subsidiary during the Financial Year 2018-19 is in the business of CommodityBroking and is a Member of Multi Commodity Exchange of India Ltd (MCX) National Commodity& Derivatives Exchange Limited (NCDEX) and Indian Commodity Exchange Limited (ICEX) .Now the Company is fully geared up to take a major plunge into the business of CommoditiesBroking and the coming year looks more promising. During the Financial Year 2018-19 theSubsidiary has earned a Net Profit of Rs. 9.21 Lakhs as against the Net Profit of Rs.37.76 Lakhs for the Financial Year 2017-18. The profit of the Company decreased by 75.61%as compared to the F.Y. 2017-18 due to sluggish market conditions.
Steel City Financial Services Private Limited:
Steel City Financial Services Private Limited is an Associate Company of Steel CitySecurities Limited carrying on the business of Non-Banking Financial Services by providingPersonal Loans etc. to its clients. During the Financial Year 2018-19 the AssociateCompany has earned a Net Profit of Rs. 54.64 Lakhs as against the Net Profit of Rs. 34.86Lakhs for the Financial Year 2017-18. The Profit of the Company increased by 56.74% ascompared to the F.Y. 2017-18.
17. DISCLOSURE UNDER SEXUAL HARAASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION& REDRESSAL) ACT 2013.
The Company has always believed in providing a safe and harassment free workplace forevery individual working in premises and always endeavors to create and provide anenvironment that is free from discrimination and harassment including sexual harassment.
During the year ended 31st March 2019 the Company has not received any complaintpertaining to sexual harassment.
18. ISO CERTIFICATION:
The Company continues to hold ISO 9001 : 2015 Certification with the scope of"Service Provision for Stock / Securities Market Operations Depository ParticipantServices Other Allied and Customer Support Services" from TUV India Pvt. Ltd. TheCompany has been complying with the concerned procedure in this regard. Further we are inthe process of complying with ISO 27001 standards which will enhance the cyber andinformation security of our Company.
19. NUMBER OF MEETINGS OF THE BOARD:
During the F.Y. 2018-19 the Board of Directors met for 9 (Nine) times to discuss aboutthe business and other important matters relating to the Company and the details of themeetings of the Board are mentioned in the Corporate Governance Report which forms partof this report.
20. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:
All contracts / arrangements / transactions entered by the Company during the FinancialYear with related parties were in the ordinary course of business and on an arm's lengthbasis. During the year the Company had not entered into any contract / arrangement /transaction with related parties which could be considered material in accordance with thepolicy of the Company on materiality of related party transactions.
These have been discussed in detail in the Notes to the Standalone Financial Statementsin this Annual Report and also a report on related party transactions entered into by theCompany is annexed as Annexure 2.
The Company has not accepted any fixed deposits attracting the provisions of theCompanies Act 2013 and as such no amount of principal or interest was outstanding as onthe Balance Sheet date.
(a) Statutory Auditors:
At the Annual General Meeting held on the 1st September 2018 M/s. SARC &Associates Chartered Accountants Visakhapatnam (FRN: 006085N) were appointed asStatutory Auditors of the Company and shall hold office for a period of 4 years from theFinancial Year 2018-19 till the conclusion of the Annual General Meeting to be held in thecalendar year 2022. Since the appointment of the Statutory Auditors is to be ratified atevery Annual General Meeting of the Company the Board recommend the ratification ofappointment of M/s. SARC & Associates Chartered Accountants Visakhapatnam (FRN:006085N) as Statutory Auditors of the Company.
(b) Internal Auditors:
M/s. Rao & Manoj Associates Chartered Accountants Visakhapatnam were appointed asthe Internal Auditors of the Company for the Financial Year 2018-19 who are actingindependently and also responsible for regulatory and legal requirements relating tooperational processes and internal systems. As the Board is satisfied with the performanceof these Auditors the Board proposes to appoint them in the next Board meeting as InternalAuditors for the Financial Year 2019-2020 also. These Auditors Report directly to theChairman of the Board of Directors.
Sri. Y.S.N. Murthy Chartered Accountant Visakhapatnam was appointed as InternalAuditor of the Company for the Financial Year 2018-19 who is acting independently andalso responsible for regulatory and legal requirements relating to D.P Operations and theInternal
Audit relating to the Pension Fund Regulatory Authority of India of the company. As theBoard is satisfied with the performance of this Auditor the Board proposes to appoint himin the next Board meeting as Internal Auditor for the Financial Year 2019-2020 also. ThisAuditor Reports directly to the Chairman of the Board of Directors.
M/s. T.R. Chadha & Co Chartered Accountants Hyderabad were appointed as InternalAuditors as per the Circular issued by Securities Exchange Board of India for theFinancial Year 2018-19. As the Board is satisfied with the performance of these Auditorsthe Board proposes to Appoint them in the next Board meeting as Internal Auditors for theFinancial Year 2019-2020 also.
(c) Systems Auditors:
M/s. Kochar Consultants Private Limited Chartered Accountants Mumbai were appointedas the Systems Auditors of the company as per the circulars issued by NSE BSE and MSEIExchanges notified Rules & Regulation from time to time for the Year 2018-19. As theBoard is satisfied with the performance of these Auditors the Board Proposes to appointthem in the next Board meeting as Internal Auditors for the Financial Year 2019-2020 also.
(d) Secretarial Auditors:
M/s. ASN Associates Practicing Company Secretaries Visakhapatnam were appointed asSecretarial Auditors of the Company as per provisions of Section 204 of the Companies Act2013 and Rules made there under for the Financial Year 2018-19. The Secretarial AuditReport for the Financial Year 2018 - 19 forms part of the Annual Report as Annexure- 8 tothe Board's Report. As the Board is satisfied with the performance of these Auditors theBoard proposes to appoint them in the next Board meeting as Secretarial Auditors for theFinancial Year 2019-2020 also.
23. AUDITORS' REPORT:
The Notes on Financial Statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation or adverse remarks.
24. CREDIT & GUARANTEE FACILITIES:
The Company has been availing secured loans overdraft facilities and bank guaranteefacilities from HDFC Bank Limited Karur Vysya Bank Limited and Karnataka Bank Limitedfrom time to time for the business requirements.
25. PARTICULARS REGARDING ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNINGS AND OUTGO:
Your Company continues to explore all possible avenues to reduce energy consumption.The particulars as prescribed under Sub Section (3)(m) of Section 134 of theCompanies Act 2013 read with Rule 8 of the Companies (Accounts)Rules 2014 is enclosed asAnnexure - 4 to the Board's Report.
26. COMPLIANCE WITH SECRETARIAL STANDARDS:
The Board hereby declares that the Company hereby follows all the procedures which arein compliance with the Secretarial Standards issued by the Institute of CompanySecretaries of India.
27. MANAGEMENT DISCUSSION ANALYSIS:
Management Discussion & Analysis is given as Annexure - 9.
The Board has been continuing its efforts and taken the required steps in the followingareas:
1. Industry Structure and Development
2. Growth Strategy.
3. Segment-Wise Performance
4. Internal Control Systems and their adequacy
5. Strengths Weaknesses Opportunities and Threats
6. Financial Performance with respect to Operational Performance
7. Material Developments in Human Resources / Industrial Relations
8. Strict Compliances
9. Talent Management Leadership Development and Talent Retention.
10. Learning and Development
28. CORPORATE GOVERNANCE:
Your Company has been complying with the principles of good Corporate Governance overthe years. In compliance with Regulation 34 of the SEBI (LODR) Regulations 2015 aseparate report on Corporate Governance forms an integral part of this report as Annexure3. The Auditor Certificate on Corporate Governance is also annexed along with thereport on Corporate Governance.
The Company recognizes and embraces the importance of a diverse board in its success.We believe that a truly diverse board will leverage differences in thought perspectiveknowledge skill regional and industry experience cultural and geographical backgroundage ethnicity race and gender which will help us retain our competitive advantage.
29. CORPORATE SOCIAL RESPONSIBILITY (CSR):
The key philosophy of all CSR initiatives of the Company is guided by three corecommitments of Scale Impact and Sustainability. During the year the Company has spent anamount of Rs. 1889505.50 which is to be mandatorily spent by the Company on CSRactivities as per the provisions of Section 135 of the Companies Act 2013.
Your Company's CSR Policy Statement and Annual Report on the CSR Activities undertakenduring the Financial Year ended 31st March 2019 in accordance with Section 135 of theCompanies Act 2013 and Companies (Corporate Social Responsibility Policy) Rules 2014 isannexed to this report as Annexure 5.
30. EXTRACT OF ANNUAL RETURN:
In accordance with Section 134(3)(a) of the Companies Act 2013 an Extract of theAnnual Return as per Section 92 (3) of the Companies Act 2013 and Rule 12(1) of theCompanies (Management and Administration) Rules 2014 in the prescribed Format MGT-9 isavailable on the website of our Company www.steelcitynettrade.com
31. INTERNAL FINANCIAL CONTROLS:
The Board has adopted the policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial disclosures.
32. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:
There were no significant and material Orders passed by the Regulators or Courts orTribunals impacting the going concern status and Company's operations in future.
33. DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL ANDPARTICULARS OF EMPLOYEES AS PER SECTION 197(12) UNDER RULE 5(2) OF THE COMPANIES(APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014:
The remuneration paid to the Directors is in accordance with the recommendations ofNomination and Remuneration Committee formulated in accordance with Section 178 of theCompanies Act 2013 and any other re-enactment(s) for the time being in force.
The Managing Director & Whole-Time Directors of your Company did not receiveremuneration from any of the Subsidiaries of your Company.
Particulars of employees as required in accordance with the provisions of Section197(12) of the Companies Act 2013 read with Rule 5(1) and Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are annexed as Annexure- 6.
34. DECLARATION BY INDEPENDENT DIRECTORS:
Every Independent Director at the first meeting of the Board in which he participatesas a Director and thereafter at the first meeting of the Board in every Financial Yeargives a declaration that he meets the criteria of independence as provided under law. Thesame Declaration has been made by the Independent Directors of the Company.
35. VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES:
Your Company is committed to highest standards of ethical moral and legal businessconduct. Accordingly the Board of Directors has formulated a Whistle Blower Policy whichis in compliance with the provisions of Section 177(10) of the Companies Act 2013.Employees can raise concerns regarding any discrimination harassment victimization anyother unfair practice being adopted against them or any instances of fraud by or againstyour Company. Any incidents that are reported are investigated and suitable action takenin line with the Whistle Blower Policy. The Whistle Blower Policy is also available onyour Company's website (www.steelcitynettrade.com).
36. RISK MANAGEMENT:
All the risks are discussed at the Senior Management Level at their meetingsperiodically to ensure that the risk mitigation plans are well thought out and implementedand adverse impact of risks is avoided or kept within manageable proportions. Further theBoard has been identifying the elements of the Risks which may threaten the existence ofthe Company from time to time.
37. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS PURSUANT TO SECTION 186 OF THECOMPANIES ACT 2013:
The particulars of loans guarantees and investments have been disclosed in thefinancial statements.
38. CONSOLIDATED FINANCIAL STATEMENTS:
In accordance with Accounting Standard AS-21 the Consolidated Financial Statements arefurnished herewith and form part of this Report and Accounts.
39. BOARD EVALUATION:
The Board of Directors has carried out an Annual Evaluation of its own performanceBoard Committees and Individual Directors pursuant to the provisions of the Act.
The performance of the Board was evaluated by the Board after seeking inputs from allthe Directors on the basis of the criteria such as the Board composition and structureeffectiveness of Board processes information and functioning etc.
The performance of the Committees was evaluated by the Board after seeking inputs fromthe Committee Members on the basis of the criteria such as the composition of Committeeseffectiveness of Committee meetings etc.
The Board and the Nomination and Remuneration Committee reviewed the performance of theIndividual Directors on the basis of the criteria such as the contribution of theIndividual Director to the Board and Committee meetings like preparedness on the issues tobe discussed meaningful and constructive contribution and inputs in meetings etc. Inaddition the Chairman was also evaluated on the key aspects of his role.
In a separate meeting of Independent Directors performance of Non-IndependentDirectors performance of the Board as a whole and performance of the Chairman as well asthe Whole-Time Directors was evaluated taking into account the views of ExecutiveDirectors and Non-Executive Directors. The same was discussed in the Board meeting thatfollowed the meeting of the Independent Directors at which the performance of the Boardits Committees and Individual Directors was also discussed. Performance evaluation ofIndependent Directors was done by the entire Board excluding the Independent Directorbeing evaluated.
All the assets of the Company wherever necessary and to the extent required have beenadequately insured.
41. EMPLOYEE RELATIONS:
The relationship with the staff and workers continued to be cordial during the entireyear. The Directors wish to place on record their appreciation of the valuable work doneand co-operation extended by them at all levels. Further the Company is taking necessarysteps to recruit the required personnel from time to time.
42. STATUTORY COMPLIANCES:
The Company has complied and continues to comply with all the applicable RegulationsCirculars and Guidelines issued by the MCA Exchanges SEBI other Regulating Agenciesfilings etc.
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:
a. Neither the Managing Director nor the Whole-Time Director of the Company receivesany remuneration or commission from any of its subsidiary.
b. Issue of Equity Shares with differential rights as to Dividend voting.
c. Issue of Shares (including Sweat Equity Shares) to employees of the Company underany scheme.
Steel City Securities Limited is grateful to the Government of India Securities andExchange Board of India National Securities Clearing Corporation Limited Bombay StockExchange Ltd National Stock Exchange of India Limited National Securities DepositoryLimited Central Depositary Services (India) Limited Metropolitan Stock Exchange ofIndia Ltd (MSEI) National Commodities & Derivatives Exchange (NCDEX) MultiCommodities Exchange (MCX) and other Exchanges Pension Fund Regulatory & DevelopmentAuthority (PFRDA) Bankers Rating agencies (CRISIL) Government Authorities Local Bodiesand other agencies for their continued co-operation support and guidance. Steel CitySecurities Limited would like to take this opportunity to express sincere thanks to itsvalued clients and customers for their continued patronage. The Directors express theirdeep sense of appreciation of all the employees whose outstanding professionalismcommitment and initiative has made the organizations growth and success possible andcontinues to drive its progress. Finally the Directors wish to express their gratitude tothe members for their trust and support.
| ||By Order of the Board |
| ||For STEEL CITY SECURITIES LIMITED |
| ||(K. Satyanarayana) ||(Satish Kumar Arya) |
|Place: Visakhapatnam ||Executive Chairman ||Managing Director |
|Date: 29.05.2019 ||(DIN: 00045387) ||(DIN: 00046156) |
Annexure I Form AOC-1
(Pursuant to first proviso to sub-section (3) of Section 129 read with Rule 5 ofCompanies (Accounts) Rules 2014)
Statement containing salient features of the financial statement ofSubsidiaries/Associate Companies/Joint Ventures Part "A": Wholly OwnedSubsidiary
| || ||(Amount in Rs.) |
|Sl.No. ||Particulars ||Steel City Commodities Private Limited |
|1. ||CIN of the Subsidiary ||U51399AP2002PTC039727 |
|2. ||Reporting period for the subsidiary concerned if different from the holding company's reporting period ||01.04.2018 to 31.03.2019 |
|3. ||Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries ||Rupee (INR) |
|4. ||Share Capital ||Rs. 10000000 |
|5. ||Reserves & Surplus ||Rs. 12802039.58 |
|6. ||Total Assets ||Rs. 180045362.78 |
|7. ||Total Liabilities ||Rs. 42025322.70 |
|8. ||Investments (Non- current) ||Rs. 30890635.00 |
|9. ||Turnover ||Rs. 24015373.90 |
|10. ||Profit before taxation ||Rs. 2468306.80 |
|11. ||Provision for taxation ||Rs. 1546998.19 |
|12. ||Profit/Loss after taxation ||Rs. 921308.61 |
|13. ||Proposed Dividend ||Rs.0.00 |
|14. ||% of shareholding ||100% |
Part "B": Associates
Statement pursuant to Section 129 (3) of the Companies Act 2013 related to AssociateCompanies and Joint Ventures
|Name of associates/Joint Ventures ||Steel City Financial Services Private Limited |
| ||Associate Company |
|1. Latest audited Balance Sheet Date ||31.03.2019 |
|2. Shares of Associate/Joint Ventures held by the company on the year end ||960000 Shares |
|Amount of Investment in Associates/Joint Venture ||Rs. 9600000/- |
|Extent of Holding% ||21.87% |
|3. Description of how there is significant influence ||Holding 43.74% of equity share stake along with its subsidiary |
|4. Reason why the associate/joint venture is not consolidated ||NA |
|5. Net worth attributable to shareholding as per latest audited Balance Sheet ||Total Networth of the Associate Company is Rs.66539549.14 |
|6. Profit/Loss for the year ||Rs. 5464807.91 |
|i. Considered in Consolidation ||Rs.2390075.44 |
|ii. Not Considered in Consolidation ||NA |
Annexure - 2 FORM NO. AOC -2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014.
Form for Disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub section (1) of section 188 of theCompanies Act 2013 including certain arms length transaction under third proviso thereto.
1. Details of contracts or arrangements or transactions at Arm's length basis.
|Name of the Related Party ||Nature of Relationship ||Duration of Contracts ||Salient Terms ||Amount (Rs. in Lakhs) |
|The Company has not entered into any contracts / agreements with related parties |
ANNEXURE - 4
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
[Section 134(3)(m) of the Companies Act 2013 read with Rule 8(3) of The Companies(Accounts) Rules 2014]
(a) CONSERVATION OF ENERGY:
During the year under review and nature of activities which are being carried on byyour Company the particulars as prescribed under Section 134(3)(m) of the Companies Act2013 read with Companies' ( Accounts) Rules 2014 regarding Conservation of EnergyTechnology Absorption are not applicable to the Company. However the Company has accessregarding Conservation of Energy and Technology Absorption wherever it is applicable.
(b) TECHNOLOGY ABSORPTION:
(c) FOREIGN EXCHANGE EARNINGS AND OUTGO:
During the period under review the Company has not earned any Foreign Exchange andalso not incurred any expenditure in Foreign Exchange.
|Particulars ||2018-19 ||2017-18 |
|Foreign Exchange Earnings ||Nil ||Nil |
|Foreign Exchange Outgo ||Nil ||Nil |
| ||For Steel City Securities Limited |
|Date : 29.05.2019 ||K. Satyanarayana ||Satish Kumar Arya |
|Place: Visakhapatnam ||Executive Chairman ||Managing Director |
| ||(DIN: 00045387) ||(DIN: 00046156) |
ANNEXURE - 6
Statement of Particulars of Employees Pursuant to provisions of Section 197(12) of theCompanies Act 2013 read with Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.
Employed throughout the Financial Year 2018-19
There were no employees receiving remuneration in the aggregate more than Sixty LakhsRupees in the Company during the Financial Year.
Details pertaining to remuneration as required under Section 197(12) of the CompaniesAct 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.
i. The percentage increase in remuneration of each Director Chief Financial Officerand Company Secretary during the financial year 2018-19 ratio of the remuneration of eachDirector to the median remuneration of the employees of the Company for the Financial Year2018-19 and the comparison of the remuneration to Key Managerial Personnel(KMP) againstthe performance of the Company are as under:
|Sl. No. ||Name of Director/ KMP and Designation ||Remuneration of Director/ KMP for the financial year 2018-19 ||% increase in Remuneration in the Financial Year 2018-19 ||Ratio of Remuneration of each Director/ KMP to median Employees |
| || ||(Rs. in Lakhs) || || |
|1. ||K. Satyanarayana Executive Chairman ||33.00 ||6.45 ||12.96 |
|2. ||Satish Kumar Arya Managing Director ||30.00 ||15.38 ||14.25 |
|3. ||T. V. Srikanth Director (IT) ||15.00 ||NA ||6.48 |
|4. ||N. Ramu Chief Financial Officer ||12.13 ||17.42 ||5.24 |
|5. ||M. Srividya Company Secretary ||5.89 ||10.71 ||2.55 |
i. The Median remuneration of Employees of the Company during the Financial Year wasRs.231535/- .
ii. The Percentage increase in the Median remuneration of employees for the FinancialYear is Rs. 17423/- is 12.35%.
iii. In the financial year there was an increase of Rs. 17423/- p.a.in the medianremuneration of employees.
iv. There were 358 permanent employees on the rolls and 66 probationers working withthe Company as on 31st March 2019.
vi. Average percentile increase made in the salaries of employees other than themanagerial Personnel in the financial year 2018-19 was 16.13% whereas there is a decreaseof Rs. 192200/- in the managerial remuneration for the same financial year. The increasein remuneration was in line with the performance of the Company industrial standards andindividual employee performance.
vii. Affirmation that the remuneration is as per the remuneration policy of theCompany:
The Company affirms that the remuneration paid is as per the Nomination andRemuneration policy of the Company.