Your Directors would like to present the Twenty-Fifth Annual Report together with theAudited Accounts for the year ended March 31 2018. The financial highlights of yourCompany for the year 2017-18 are as follows:
| ||2017 2018 ||20165 2017 |
| ||(Rs. in Lakhs) ||(Rs. in Lakhs) |
|Gross Income ||750.95 ||585.25 |
|Profit before Interest Depreciation and Tax ||338.50 ||251.96 |
|Less: Interest ||48.57 ||48.96 |
|Less: Depreciation ||4.48 ||5.61 |
|Net Profit before Tax ||285.45 ||197.39 |
|Less: Tax and other prior period adjustment ||52.03 ||57.80 |
|Net Profit for the period after prior period adjustment ||233.42 ||139.59 |
|Other Comprehensive Income ||2.93 ||42.36 |
|Net Profit after tax ||236.35 ||181.95 |
|Less: Proposed Dividend & Tax ||- ||- |
|Less: Transitional Depreciation ||- ||- |
|Add: Profit brought forward from the previous year ||448.33 ||308.74 |
|Profit carried forward ||684.68 ||448.33 |
|Earnings per Share || || |
|Basic: ||3.78 ||2.91 |
|Diluted: ||3.78 ||2.91 |
The Company's operations resulted in profit for the year 2017-18. Due to workingcapital and expansion requirements your Directors have not recommended any dividend onthe Equity Capital of the Company for the year ended March 31 2018.
BRIEF DESCRIPTION OF THE COMPANY'S AFFAIRS
The Company has been conducting the operational activities during the year as mentionedbelow:
Buying Selling and dealing in shares and other Securities in Secondary Markets.
In the case of FPOs we take up underwriting and broking.
The Company has not transferred any amount to the Reserves.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY
No material changes and commitments have occurred between the end of the financial yearof the company to which the financial statements relate and the date of the report thataffect the financial position of the company.
Mr. Mahesh Chandak (DIN 00050149) Director retires by rotation and beingeligible offers himself for re-appointment at the ensuing Annual General Meeting.
Mr. S. Vinodh Kumar (DIN 00050095) Director retires by rotation and beingeligible offers himself for re-appointment at the ensuing Annual General Meeting.
DECLARATION OF INDEPENDENCE BY DIRECTORS
The Company has received the necessary declaration from each Independent Directors inaccordance with Section 149(7) of the Companies Act 2013 that he/she meets the criteriaof independence as laid out in sub-section (6) of Section 149 of the Companies Act 2013and relevant regulations of SEBI (LODR) Regulations 2015.
MEETINGS OF THE BOARD OF DIRECTORS
The Company had 4 Board meetings during the financial year under review. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013. For further details please refer report on Corporate Governance of this AnnualReport.
APPOINTMENT OF COMPANY SECRETARY
During the year the Board appointed Ms. Radhika Maheshwari a Member of Institute ofCompany Secretaries of India as the Company Secretary of the Company. The appointment waseffective from August 25 2017.
EXTRACT OF THE ANNUAL RETURN
The extract of Annual Return pursuant to the provisions of Section 92 read with Rule 12of the Companies (Management and Administration) Rules 2014 is furnished in MGT-9 andis attached to this Report in Annexure A.
Pursuant to the provisions of the Companies Act 2013 and the SEBI(Listing Obligationsand Disclosure Requirements) Regulations 2015 the Board has carried out an AnnualPerformance Evaluation of its own performance the directors individually as well as theevaluation of the working of its Audit Nomination & Remuneration Committee and othercommittees.
In compliance with the provisions of the Companies Act2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015with theStock Exchanges theIndependent Directors held a meetingon February 9 2018 and:
? Reviewed the performance of non-independent directors and the Board as a whole.
? Assessed the quality quantity and timeliness of flow of information between theCompany's management and the Board which is necessary for the Board to effectively andreasonably perform their duties.
FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS
Pursuant to Clause 25(7) of SEBI (LODR) Regulations 2015 the Company shallfamiliarize the Independent Directors with the Company and their roles rightsresponsibilities in the Company nature of industry in which the company operatesbusiness model of the Company etc.
However the Independent Directors have been a part of the Board for a few years nowand so no separate sessions for familiarization have been conducted during the year.Further the Policy on the Company's Familarisation Programme for Independent Directors canbe accessed athttp://www.sugalshare.com/InvestorRelations/CompanyPolicies/FamilarisationProgrammeforIndependent Directors
Your Board has a remuneration policy for selection and appointment of Directors SeniorManagement and their remuneration. The remuneration policy forms a part of the CorporateGovernance Report annexed to this report.
INVESTOR EDUCATION AND PROTECTION FUND(IEPF)
Pursuant to the applicable provisions of the Companies Act 2013 read with the IEPFAuthority (Accounting Audit Transfer and Refund) Rules 2016 ('the Rules') all unpaidor unclaimed dividends are required to be transferred by the Company to the IEPFestablished by the Central Government after the completion of seven years. Furtheraccording to the Rules the shares in respect of which dividend has not been paid orclaimed by the shareholders for seven consecutive years or more shall also be transferredto the demat account created by the IEPF Authority. Accordingly the Company shalltransfer the unclaimed and unpaid dividend for FY 2010-11 before October 2018. Furtherthe statement of unclaimed and unpaid dividend are provided on our website atwww.sugalshare.com/Investorrelations/Reporting/StatementofUnclaimedandUnpaid Dividend.
DETAILS OF SUBSIDIARY / JOINT VENTURES / ASSOCIATE COMPANIES
The company neither has any subsidiary nor any joint venture(s) during the year.
Mr. Bharat Raj Sanklecha proprietor M/s. Chandrana & Sanklecha CharteredAccountant
Chennai shall continue as auditors for a term of 5 consecutive years from 2017 to2023.
The Company has obtained a Certificate from them to the effect that their appointmentif made
would be in accordance with the conditions prescribed in Section 141 of the CompaniesAct 2013.
COMMENTS ON AUDITORS' REPORT
The Auditor in his report has made a reservation that the Company has not depositedIncome Tax Dues of Rs. 55.62 Lacs (for Asst. Year 2010-11) Rs. 4.24 Lacs (for Asst. Year2012-13) Rs.5.14 Lacs (for Asst. Year 2013-14) and Rs.2.03 Lacs (for Asst. Year 2014-15).The dues have not been deposited as the same is being contested by the Company and thedispute is pending before the Commissioner of Income Tax (Appeals). The observation in thereport of the Auditor and the Annexure appended thereto is self-explanatory and does notcall for any further comments.
COMMENTS ON SECRETARIAL AUDIT REPORT
The Board of Directors of the Company appointed M/s. Sneha Jain & AssociatesCompany Secretaries to conduct the Secretarial Audit for the Financial Year 2017-18 interms of Section 2014 of the Companies Act 2013. The Secretarial Audit Report for theFinancial Year ended March 31 2018 is annexed as Annexure B of this report.
The Secretarial Auditor in the report observed that there has been a general delay inonline submission on the website of stock exchange and also in filing of returns withregistrar of companies it has been noted by the board that since XBRL filing of quarterresults was newly implemented there was a delay in filing of these forms also these delayswere inadvertent and without prejudice to the interest of the shareholders of the companyand the general public.
It has also been pointed out that company is yet to transfer shares in respect of whichdividend has not been paid or claimed for 7 consecutive years or more to the InvestorEducation and Protection Fund. The company is taking necessary steps to comply with thesame.
INTERNAL AUDIT & CONTROLS
The Company continues to engage Mr. Sudheer Jain Chartered Accountant as its InternalAuditor. His scope of work includes review of processes for safeguarding the assets of theCompany review of operational efficiency effectiveness of systems and processes andassessing the internal control strengths in all areas. Internal Auditors findings arediscussed with the process owners and suitable corrective actions taken as per thedirections of Audit Committee on an ongoing basis to improve efficiency in operations.
WHISTLE BOWLER POLICY AND VIGIL MECHANISM
In pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013a Vigil Mechanism for directors and employees to report genuine concerns has beenestablished. The Vigil Mechanism Policy has been uploaded on the website of the Company atwww.sugalshare.com under Investor Relations > Company Policies > Whistle Blower andVigil Mechanism.
RISK MANAGEMENT POLICY
The company is primarily exposed to credit risk interest rate risk liquidity risk andoperational risks. The Board oversees and approves the Company's enterprise wide riskmanagement framework. It reviews credit and operational risks and policies in relation toinvestment strategy and other risks like interest rate risk and liquidity risk. TheCompany's management monitors and reports principal risks and uncertainties that canimpact its ability to achieveits strategic objectives. The company's management systemsorganisational structures processes standards and code of conduct together form the riskmanagement governance system of the company.
Your company has a robust Risk Management Methodology which has been implementedeffectively outlining the exposure given to the Clients of the Company and ensuring theintegrity of the company's accounting and financial reporting systems including theindependent audit and compliance with the law and relevant standards.
Your Company did not invite or accept any Deposit from public during the year underreview.
NBFC STATUS OF THE COMPANY
The RBI permitted the Company to exit from the NBFC Business and RBI Certificate ofRegistration No. B.07.00362 dt. 13.10.2003 stands cancelled as desired by the Company.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
Details of loans guarantees or investments under section 186 of the Companies Act2013 are annexed to this report in Annexure C.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
Related Party Transaction entered into during the year were on an arm's length basisand were in the ordinary course of business. There were no materially significant relatedparty transactions with the Company's Promoters Directors Management or their relativeswhich could have had a potential conflict with the interests of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS
India's economic growth has picked up after the impact of demonetization on key sectorsin Financial Services sector. GDP growth is likely to improve in the coming years drivenby the government's development initiatives and pickup in business cycle. Since there isgeneral election in 2019 the market is expected to the volatile.
(a) Industry Structure and Developments
Indian equities are likely to continue its bullish run this year on the back ofimproved corporate earnings. The market trends will be determined by various domestic andinternational factors like global market movements strengthening of US dollar RBI'spolicy and visible improvement in corporate earnings of domestic firms.
(b) Opportunities and threats
There are several exciting opportunities for the Company in the upcoming FY 2018-19which consists of India's Growth Rate Focus on Digital and Affluent Customer FinancialInclusion Utilize technology to provide solutions to customers Increase DistributionStrength.
In the same way there are threats for the Company which includes Volatile EnvironmentFiscal Deficit and Current Deficit Attracting and retaining talent and training them forthe right culture Inflation and economic slowdown Competition.
(c) Segment-Wise or Product-Wise Performance
During the financial year ended March 31 2018 the Company operated only in one segmentof business viz Share Broking.
The secondary markets are expected to remain buoyant but market can be volatile asthere are general elections in the year 2019.
(e) Internal Control Systems and their adequacy
In the opinion of your Directors Internal Control Systems in the Company are adequate.
(f) Financial Performance
The financial performance during the year under review is given above.
(g) Human Resources/Industrial Relations
The number of people employed has become 23 and the employer-employee relations havebeen cordial throughout the year.
(h) Risks and concerns
The stock market is witnessing heightened activities and is increasingly gainingimportance. The company is aware that it operates in an environment which is acutelyvulnerable to several kinds of risks. The financial sector is vulnerable to a range ofrisks from economic capital market and regulatory risks. Strategies policies and limitsare designed to ensure that risks are prudently diversified. Risk mitigating activitiesare reviewed periodically by senior management.
As far as external risks are concerned the company takes every precaution to ensurethat it is not exposed to sudden changes in its operating environment. The company is alsomigrating towards providing state of the art trading platforms.
POLICY ON RISK MANAGEMENT
In accordance with the requirement of Corporate Governance the Board of Directors ofthe Company has adopted a policy on risk management for assessment and minimizationprocedure of risk for periodical review by the Board.
POLICY ON DETERMINATION OF MATERIALITY FOR DISCLOSURES
In terms of the Regulation 30 of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 (hereinafter referred to as"Regulations") Sugal and Damani Share Brokers Limited (hereinafter referred toas "the Company") has framed a Policy for determination of materiality ofevents/ information. Further the detailed policy are provided on our website atwww.sugalshare.com/company policies/policy on determination of materiality fordisclosures.
POLICY ON PRESERVATION OF DOCUMENTS
In accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 ("Regulations") the company has formulated the policy on preservation ofdocuments with the objective of classifying various documents records and registers forthe purpose of maintenance and preservation. Further the detailed policy are provided onour website at www.sugalshare.com/companypolicies/policy on preservation of documents.
POLICY ON RELATED PARTY TRANSACTIONS
The policy regulates all transactions between the Company and its related parties inaccordance with Regulation 23 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. Further the detailed policy are provided on our websiteat www.sugalshare.com/company policies/policy on related party transactions.
OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT
WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
The Company has adopted a policy for Prevention of Sexual Harassment of Women atWorkplace and has set up Committee for implementation of said policy. During the yearCompany has not received any compliant of harassment.
PARTICULARS OF EMPLOYEES
There was no employee whose particulars as per the provisions of Section 197(12) of theAct read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are to be reported.
Disclosures pertaining to remuneration and other detail as required under section197(12) of the Act read with Rule5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are provided in this report in Annexure D.
INFORMATION REQUIRED UNDER SECTION 134(3)(M) OF THE COMPANIES ACT
The consumption of electricity during the year was minimal. Management is takingconscious efforts to conserve energy. Your Company has no activity with regard totechnology absorption. Your Company does not have any foreign exchange earnings or outgoduring the year.
The Corporate Governance regulations as per the Listing Agreement have been fullycomplied with. The Report of your Directors on the practices of Corporate Governance formspart of this report in Annexure F. A Certificate from the Auditor of the Companyregarding compliance with the Code of Corporate Governance certification by CEO / CFO andDeclaration of Compliance with Code of Conduct form a part of the Corporate GovernanceReport.
DIRECTORS' RESPONSIBILITY STATEMENT
As required by Section 134(5) of the Companies Act 2013 your Directors confirm:
(a) that in the preparation of the Annual Accounts the applicable Accounting Standardshave been followed along with proper explanation relating to material departures;
(b) that the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year ended March 31 2018 and of the profit/loss of the Company for that year;
(c) that the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
(d) that the Directors have prepared the annual accounts 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 are operatingeffectively; and
(f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
ADOPTION OF THE INDIAN ACCOUNTING STANDARDS (Ind AS)
The Company hitherto was following IGAAP notified under the companies (AccountingStandards) Rules 2006. It has now adopted the Indian Accounting Standards (Ind AS) fromFY 2017-18 as mandated and restated the financial statements for FY 2016-17 for presentingcomparative information. Accordingly the financial statements for current year includingcomparative figures of previous year are based on Ind AS and in accordance with therecognition and measurement principles stated therein. The impact of the application ofInd AS is disclosed in the notes to Financial Statement.
LISTING WITH STOCK EXCHANGES
Shares of the Company are listed on Bombay Stock Exchange Limited Mumbai P.J. TowersDalal Street Mumbai 400 001 (Stock Code 511654). Listing fee to the StockExchange has been paid up to date.
Your Directors would like to sincerely thank the Company's banker's viz. Axis BankLtd. and HDFC Bank Ltd. and the shareholders of the Company. We also thank the employeesof the Company for their co-operation and support.
| || ||By order of the Board |
| || ||For SUGAL & DAMANI SHARE BROKERS LTD. |
| ||Sd/- ||Sd/- |
| ||Mahesh Chandak ||S. Kannadasan |
|Place: Chennai ||Executive Director ||Director |
|Date: May 30 2018 ||DIN 00050149 ||DIN - 00050177 |