TO THE SHAREHOLDERS
Your Directors are pleased to present the Thirty Second Annual Reporttogether with the Audited Financial Statements for the year ended March 31 2021.
(Rs. in lakhs except equity share data)
| ||Consolidated ||Standalone |
|Particulars ||Year ended 31.03.2020 ||Year ended 31.03.2020 |
|Total Income ||2000.00 ||1808.42 ||1993.17 ||1801.18 |
|Cash Profit ||1047.21 ||(262.18) ||1010.34 ||(334.37) |
|Less: Depreciation ||51.61 ||54.42 ||51.12 ||53.92 |
|Profit before Tax ||995.60 ||(316.60) ||959.22 ||(388.29) |
|Less: Provision for Taxation ||122.26 ||2.37 ||119.50 ||- |
|Add / (Less): Deferred Tax ||7.45 ||21.07 ||(6.33) ||20.45 |
|Profit after Tax (Net of adjustment for earlier years) ||865.52 ||(285.61) ||833.02 ||(354.85) |
|Other Comprehensive Income ||33.16 ||(21.32) ||4.86 ||(8.52) |
|Add : Retained Earning brought forward ||2775.37 ||3178.54 ||2582.09 ||3041.71 |
|Balance available for appropriation ||3674.05 ||2871.62 ||3419.97 ||2678.34 |
|APPROPRIATION || || || || |
|Less: Dividend Paid (Including Dividend Tax) ||47.90 ||96.25 ||47.90 ||96.25 |
|Balance carried to Balance Sheet ||3626.15 ||2775.37 ||3372.07 ||2582.09 |
|Earnings per Share (Rs.10/- each) || || || || |
|Basic (in Rs.) ||10.84 ||(3.58) ||10.43 ||(4.44) |
|Diluted (in Rs.) ||10.84 ||(3.58) ||10.43 ||(4.44) |
THE COVID-19 PANDEMIC
The year started amidst a strict nationwide lockdown in India withtough restrictions on economic activity and mobility. Whilst facing an unprecedenteduncertainty about the eventual impact of the Covid-19 pandemic your Company plannedeffectively for an unfathomable range of exigencies to ensure business continuity. TheCompany is actively monitoring the impact of the Covid-19 pandemic on its financialcondition liquidity operations industry and workforce. It has used the principles ofprudence in applying judgments estimates and assumptions based on the current estimates.The extent to which Covid-19 impacts the operations will depend on future developmentswhich remain uncertain.
Material Changes and Commitments
The Company has discontinued its Portfolio Management Services (as anIntermediary) in Financial 2020-21 and continues with its Mutual Fund business incompliance with all regulatory requirement.
Besides this no material changes and commitments have occurred afterthe close of the year till the close of this Report which affects the financial positionof the Company.
During the year under review your Company's total Income fromOperations stood at Rs. 1993.17 lacs as against Rs. 1801.18 lacs during the previous year.
Your Company continued its focus on fee based activities (InvestmentBanking) and income therefrom was Rs. 652.43 lacs as against Rs. 1185.76 lacs during theprevious year registering a decline of 44.97% due to the repercussions of ongoingpandemic. Investment Banking continues to be the thrust area for the Company.
For the year under review the Income from Trading from Investmentactivities stood at Rs. 826.33 Lacs as against Rs. (776.53) Lacs in the previous yearregistering an increase of 206.41%.
Income from Other Sources was at Rs. 30.26 lacs as against Rs. 72.55lacs during the previous year.
There has not been any change in the nature of business of the Companyduring the year.
Indian Accounting Standards
Pursuant to the notification dated February 16 2015 issued by theMinistry of Corporate Affairs the Company has adopted the Indian Accounting Standards("Ind AS") notified under the Companies (Indian Accounting Standard) Rules2015. Accordingly the Financial Statements have been prepared in compliance with Ind AS.Consequently the subsidiary and associate companies also have adopted Ind AS(irrespective of their net worth).
Dividend & Transfer to Reserves
The Board of Directors is pleased to recommend a dividend of Re. 1.00/-per share (10%) for the year ended March 31 2021 subject to the approval of the Membersat the 32nd Annual General Meeting.
During the year under review there was no transfer to General Reserve(Previous year Rs. Nil).
Employee Stock Option Scheme
No shares have been issued or allotted under any Employee Stock OptionScheme during the FY 2020-21.
The Paid-up Equity Share Capital as at March 31 2021 stood at Rs.79844240/-. During the year under review the Company has not issued shares withdifferential voting rights nor has granted any stock options or sweat equity.
As on March 31 2021 none of the Directors of the Company holdinstruments convertible into equity shares of the Company.
Management Discussion and Analysis Report
In terms of requirements of Regulation 34 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 (SEBI LODR) a ManagementDiscussion and Analysis Report is attached Annexure - I forming part of thisReport.
Report on Corporate Governance
In terms of requirements of Regulation 34 of the SEBI LODR a Report onCorporate Governance together with Auditors' Certificate regarding compliance ofConditions of Corporate Governance are attached as Annexure - II and Annexure -III forming part of this Report.
Consolidated Financial Statement
In accordance with Section 136 of the Companies Act 2013 andRegulation 34 of the Listing Regulations read with other applicable provisions yourDirectors have attached the Consolidated Financial Statements of the Company for thefinancial year ended March 31 2021 prepared in accordance with applicable Ind AS whichform a part of the Annual Report. The financial statements including consolidatedfinancial statements and the audited accounts of the subsidiary are available on theCompany's website http://www.sumedhjafiscal.com/financials.asp.
Accordingly a statement in Form AOC-1 is attached to theFinancial Statements of the Company for your information.
Performance of Subsidiary:
SFSL Commodity Trading Pvt. Ltd. - Subsidiary
During the year the Company recorded Total Revenue of Rs. 1783528/-(Previous Year Rs. 1931159/-) and Net Profit of Rs. 1657965/- for the year ended 31stMarch 2021 (Previous Year: Rs. 1517357/-).
The subsidiary has formally discontinued commodity trading activities(Membership with MCX) from April 1 2019 considering overall profitability and risksassociated with commodity trading.
Performance of Associate Companies US Infotech Pvt. Ltd.
During the year the Company recorded Total Revenue of Rs. 2104863/-(Previous Year Rs. 4191445/-) and Net Loss of Rs. (37989/-) for the year ended 31stMarch 2021 (Previous Year Profit: Rs. 1635201/-).
The Company continues to explore growth opportunities.
Brandshoots Ventures Pvt. Ltd.
During the year the Company recorded a revenue of Rs. 534884/-(Previous Year : Rs. 554411/-) and booked Net Profit of Rs. 175946/- for the yearended 31st March 2021 (Previous Year Loss : Rs. (716842/-).
The Company is facing difficulties in building the requisite eco-systemto support start-up entities in the Eastern Region of India.
Sumedha Management Solutions Pvt. Ltd. (IPE)
During the year the Company recorded a revenue of Rs. 59653587/-(Previous Year : Rs. 95905405/-) and Net Profit of Rs. 5857648/- for the year ended31st March 2021 (Previous Year : Rs. 16121072/-).
The Company continues to expand its activities as an insolvencyprofessional entity and rationalise its cost in these challenging times.
In accordance with the Regulation 16 of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 (Listing Regulations') theunlisted subsidiary of this Company is not a material subsidiary. The Company hasformulated a policy for determining material subsidiary. The policy can be accessed at theCompany's website at http://www.sumedhafiscal.com/material_subsidiary.pdf.
Corporate Social Responsibility
The provisions of Section 135 of the Companies Act 2013 read withCompanies (Corporate Social Responsibility Policy) Rules 2104 as amended from time totime became applicable to the Company during the current Financial Year. Accordingly theBoard of Directors of the Company has constituted a Corporate Social Responsibility("CSR") Committee on 24th June 2021. The composition and terms of reference ofthe CSR Committee is provided in the Corporate Governance report which forms part of thisreport.
The main responsibility of the Committee is to formulate and recommendto the Board a CSR Policy indicating activities to be undertaken by the Company asspecified in Companies Act 2013 recommending the expenditure on CSR activities &monitoring the activities undertaken from time to time.
The CSR Policy shall be formulated by the Committee and thereaftershall be approved by the Board of Directors and accordingly the CSR expenditure shall beexpended during the current Financial Year.
Business Responsibility Report
The Company is not required to comply with the requirements associatedwith Regulation 34(2)(f) of the Listing Regulations 2015.
The applicable Secretarial Standards i.e. SS-1 and SS-2 relating toMeetings of the Board of Directors' and General Meetings'respectively have been duly followed by the Company.
Directors' Responsibility Statement
The Board of Directors acknowledge the responsibility for ensuringcompliance with the provisions of Section 134(3) (c) read with Section 134(5) of theCompanies Act 2013 in preparation of the Annual Accounts for the year under review andstate that:
(i) in the preparation of the Annual Accounts the applicableaccounting standards have been followed and there are no material departure;
(ii) the Directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company as at March 31 2021and profits of the Company for the year ended on that date;
(iii) the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;
(iv) the annual accounts have been prepared on a going concern basis;
(v) the Directors have laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively; and
(vi) the Directors have devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems were adequate andoperating effectively.
Based on the framework of internal financial controls and compliancesystems established and maintained by the Company the work performed by the internalstatutory and secretarial auditors including the audit of internal financial controlsover financial reporting by the statutory auditors and the reviews performed by managementand the relevant board committees including the audit committee the Board is of theopinion that the Company's internal financial controls were adequate and effectiveduring FY 2020-21.
Members of the Company at its 31st Annual General Meeting held on 19thSeptember 2020 approved reappointment of Mr. Vijay Maheshwari (DIN : 00216687) as aDirector liable to retire by rotation.
In accordance with the provisions of Section 152 of the Companies Act2013 and the Company's Articles of Association Mrs. Garima Maheshwari (DIN:07001628) Director retires by rotation at the forthcoming Annual General Meeting andbeing eligible offers herself for re-appointment. The Board of Directors on recommendationof the Nomination and Remuneration Committee has recommended her re-appointment.
The Company had annual evaluation of its Board Committees andindividual Directors pursuant to the provisions of Companies Act 2013 and ListingRegulations. The Nomination and Remuneration Committee (NRC) specified the methodology foreffective evaluation of performance of Board and Committees and individual Directors andalso finalised the evaluation criteria (containing required particulars as per GuidanceNote issued by the SEBI) and authorized the Board to undertake the evaluation process. TheEvaluation Statement was reviewed by the Independent Directors.
The performance of individual directors was evaluated on parameterssuch as number of meetings attended contribution made in the discussions contributiontowards formulation of the growth strategy of the Company independence of judgementsafeguarding the interest of the Company and minority shareholders etc. The Board thenevaluated the performance of the Board Committees and the individual Directors in theprescribed manner.
DECLARATION BY INDEPENDENT DIRECTORS:
Necessary declarations have been obtained from all the IndependentDirectors that they meet the criteria of independence under sub-section (6) of Section 149of the Companies Act 2013 and as per Regulation 25 read with Regulation 16 of SEBI LODRRegulations. In the opinion of the Board there has been no change in the circumstanceswhich may affect in the status of independent directors of the Company and the Board issatisfied of the integrity expertise and experience (including proficiency in terms ofSection 150(1) of the Companies Act 2013 and applicable rules thereunder) of allIndependent Directors on the Board. In terms of Section 150 read with Rule 6 of theCompanies (Appointment and Qualification of Directors) Rules 2014 Independent Directorsof the Company have undertaken requisite steps towards the inclusion of their names in thedatabank of Independent Directors maintained with the Indian Institute of CorporateAffairs.
Meetings of the Board
During the year under review 4 (Four) Board Meetings were convened andheld. The details thereof are given in the Corporate Governance Report. The interveninggap between the Meetings was within the period prescribed under the Companies Act 2013.
Key Managerial Personnel (KMP)
The Company is having the following Key Managerial Personnel during theyear
|Name ||Designation |
|Mr. Bhawani Shankar Rathi ||Wholetime Director |
|Mr. Deb Kumar Sett ||Company Secretary* |
|Mr. Girdhari Lal Dadhich ||Chief Financial Officer |
* Mr. Deb Kumar Sett resigned w.e.f 01.04.2021 and Ms. DhwaniFatehpuria was appointed as the Company Secretary w.e.f. 24.06.2021
Committees of the Board
The Board of Directors has the following Committees:
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders' Relationship Committee
4. Corporate Social Responsibility Committee
The details of the Committees along with their composition number ofmeetings and attendance at the meetings are provided in the Corporate Governance Report.
Loans Guarantees or Investments
Details of Loans Guarantees and Investments covered under theprovisions of Section 186 of the Companies Act 2013 are provided in the Notes toFinancial Statements.
Vigil Mechanism/Whistle Blower Policy
The Company has a Whistle Blower Policy to report genuine concerns orgrievances. The Whistle Blower Policy has been posted on the website of the Companyhttp://www.sumedhafiscal.com/whistle_blower_policy.pdf.
Nomination and Remuneration Policy
The Company has updated its Nomination and Remuneration Policy fordetermining remuneration of its Directors Key Managerial Personnel and Senior Managementand other matters provided under Section 178(3) of the Companies Act 2013 and ListingRegulations adopted by the Board. The details of this policy have been posted on thewebsite of the Company http://www.sumedhafiscal.com/remuneration_policy.pdf.
The Remuneration Policy has also been outlined in the CorporateGovernance Report forming part of this Annual Report.
Particulars of Contract or Arrangements made with Related Parties
Particulars of contracts or arrangements with related parties referredto in Section 188(1) of the Companies Act 2013 in the prescribed Form AOC-2 is appendedas Annexure IV to the Board's Report. There have been no other materiallysignificant related party transactions monetary transactions or relationships between theCompany and its directors the Management subsidiaries or relatives during the yearexcept as appended aforesaid which was approved by the shareholders.
The Company has formulated a policy on materiality of related partytransactions and also on dealing with related party transactions. The policy is availableon the Company's website - http://www.sumedhafiscal.com/policy_on_ rpt.pdf.The Policy intends to ensure that proper reporting approval and disclosure processes arein place for all transactions between the Company and Related Parties.
All Related Party Transactions are placed before the Audit Committee(for approval) as well as the Board of Directors on a quarterly basis. There has not beenany Omnibus approval for such transactions pursuant to Regulation 23 of the ListingRegulations 2015.
Risk Management Policy and Internal Financial Control
The Company has a risk management policy the objective of which is tolay down a structured framework for identifying potential threats to the organisation on aregular basis assessing likelihood of their occurrence designate risk owners tocontinually evaluate the emergent risks and plan measures to mitigate the impact on theCompany to the extent possible. The framework and the system are reviewed from time totime to enhance their usefulness and effectiveness. The policy recognizes that all risksin the business cannot be eliminated but these could be controlled or minimised througheffective mitigation measures effective internal controls and by defining risk limits.
A comprehensive Risk Management Framework has been put in place foreach of the businesses segments of the Company which is stringently followed for themanagement of risks including categorisation thereof based on their impact on theorganisation. Such categorisation gives highest weightage to the risks which have thepotential to threaten the existence of the Company. The risks with higher severity receivemore attention and management time and it is the endeavour of the Company to strengtheninternal controls and other mitigation measures on a continuous basis to improve the riskprofile of the Company.
Risk Management System has been integrated with the requirements ofinternal controls as referred to in Section 134(5)(e) of the Companies Act 2013 to evolverisk related controls.
A detailed note on risk management along with the measures taken by theCompany under the current COVID-19 global pandemic is given in Management Discussion &Analysis/Integrated Report section forming part of this Annual Report.
The Company has neither accepted nor renewed any deposits during theyear. No deposit has remained unpaid or unclaimed at the end of the year under review.
Going Concern Status
No significant and material orders have been passed by the Regulatorsor Courts or Tribunals impacting the going concern status of the Company and its operationin the future.
Based on quarterly reports on the status of statutory compliance fromDepartmental Heads/ Responsibility Centres the Company Secretary issues Certificate underSection 205 of the Companies Act 2013 (Act) and Rules made thereunder. The Certificate isalso endorsed by the Wholetime Director of the Company and placed before the AuditCommittee and Board of Directors for review.
The status of Statutory Compliance is verified by the Internal Auditorsand Secretarial Auditors pursuant to Sections 138 and 204 of the Companies Act 2013 aswell as Annual Secretarial Compliance Report pursuant to Reg. 24A of Listing Regulations.
The copy of Annual Return is available on the Company's website: http://www.sumedhafiscal.com/annual_return.asp
AUDITORS Statutory Auditors
M/s. V. Singhi & Associates Chartered Accountants 4 Mangoe LaneGround Floor Kolkata - 700001 (Firm Registration No. 311017E) were appointed as theStatutory Auditors of the Company for a period of 5 (five) consecutive years for theperiod from Financial Year 2018-19 to 2021-22 at the 28th AGM of the Company held on23-Sep-17.
The Board and the Audit Committee have approved their continuation asStatutory Auditors of the Company for the Financial Year 2021-22 based on their consentand confirmation of eligibility dated June 15 2021.
The Auditors' Report to the Shareholders does not contain anyreservation qualification or adverse remark. During the year under review neither thestatutory auditors nor secretarial auditors have reported to the Audit Committee of theBoard under Section 143(12) of the Act any instances of fraud committed against theCompany by its officers and employees the details of which need to be mentioned in thisReport.
Based on the consent received from M/s. A. K. Labh & Co. andrecommendation of the Audit Committee in terms of the requirements of Section 204 of theCompanies Act 2013 and the Companies (Appointment & Remuneration of ManagerialPersonnel) Rules 2014 M/s. A. K. Labh & Co. Practicing Company Secretaries has beenre-appointed to conduct the Secretarial Audit of the Company for FY 2021-22.
The Secretarial Audit Report for FY 2020-21 (attached as Annexure -V) does not contain any qualification.
The Company is not engaged in production of goods or providing servicespursuant to Section 148 of the Act and therefore not required to comply with therequirements thereunder.
Board's Response on Auditors' Qualification Reservation orAdverse Remark or Disclaimer Made
There are no qualifications reservations or adverse remarks made bythe Statutory Auditors in their report or by the Practicing Company Secretary in theirSecretarial Audit for FY 2020-21. During the year there has been no instances of fraudsreported by Auditors under section 143(12) of the Companies Act 2013.
Significant and Material Orders Passed by the Courts/ Regulators
During the year under review no significant and material order hasbeen passed by any regulator or by any Court which has a material impact on the financialposition of the Company.
Disclosure under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013
The Company has a Prevention of Sexual Harassment Policy in line withthe requirements of Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. During the period under review no complaint was received by theInternal Complaint Committee.
Conservation of Energy and Technology Absorption
Since the Company does not own any manufacturing facility the otherparticulars relating to conservation of energy and technology absorption stipulated in theCompanies (Accounts) Rules 2014 are not applicable.
Foreign Exchange Earning and Outgo
Foreign Exchange earnings and outgo during the year under review wereRs. 34.88 Lacs and NIL respectively (Previous Year Rs. 10.09 Lacs and Rs. 6.87 Lacsrespectively).
Particulars of Employees
The ratio of the remuneration of each Director to the medianemployee's remuneration and other particulars or details of employees pursuant toSection 197(12) of the Companies Act 2013 read with Rule 5 of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 are attached to this Report as AnnexureVI.
None of the employees of the Company is in receipt of remunerationcoming under purview of the said Section/Rule.
A Statement comprising of top 10 employees in terms of remunerationdrawn is annexed as Annexure VII. The said Annexure is not being sent along withthis Annual Report to the Members of the Company in line with the provisions of Section136 of the Act. Members who are interested in obtaining these particulars may write to theCompany Secretary at the Registered Office of the Company.
Key Financial Ratio
Key financial Ratios for the financial year ended March 31 2021 areprovided in the Management Discussion and Analysis Report.
Electronic copy of the Integrated Annual Report for FY2020-21 and theNotice of the ensuing AGM is being sent to all shareholders whose email addresses areavailable in demat account and registered with Company's Registrar and Share TransferAgent. Shareholders holding shares in demat form are requested to update their emailaddresses with their Depository Participant(s) and for shareholders holding shares inphysical form should get their email registered/ updated with Company's Registrarand Share Transfer Agent.
1. The Company has not entered into any one time settlement proposalwith any Bank or financial institution during the year under report.
2. As per available information no application has been filed againstthe Company under the Insolvency and Bankruptcy Code 2016 nor any proceedings thereunderis pending as on 31.03.2021.
The Directors thank the Company's customers vendors banksfinancial and academic institutions employees regulatory authorities stock exchangesand all other stakeholders for their continued co-operation and support. The Directorsalso acknowledge the support and co-operation from the Government of India and overseasits agencies and other regulatory authorities. The Directors also wish to place on recordtheir appreciation towards employees of the Company for their commendable effortsteamwork and professionalism.
| ||On Behalf of the Board |
| ||Ratan Lal Gaggar |
|Place: Kolkata ||Chairman |
|Date: 24th June 2021 ||DIN:00066068 |