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Sumedha Fiscal Services Ltd.

BSE: 530419 Sector: Financials
NSE: N.A. ISIN Code: INE886B01012
BSE 00:00 | 22 Mar 19.00 0.10
(0.53%)
OPEN

17.15

HIGH

19.00

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17.15

NSE 05:30 | 01 Jan Sumedha Fiscal Services Ltd
OPEN 17.15
PREVIOUS CLOSE 18.90
VOLUME 4451
52-Week high 51.95
52-Week low 15.00
P/E 16.52
Mkt Cap.(Rs cr) 15
Buy Price 18.30
Buy Qty 25.00
Sell Price 19.00
Sell Qty 380.00
OPEN 17.15
CLOSE 18.90
VOLUME 4451
52-Week high 51.95
52-Week low 15.00
P/E 16.52
Mkt Cap.(Rs cr) 15
Buy Price 18.30
Buy Qty 25.00
Sell Price 19.00
Sell Qty 380.00

Sumedha Fiscal Services Ltd. (SUMEDHAFISCAL) - Director Report

Company director report

TO

THE SHAREHOLDERS

Dear Members

Your Directors are pleased to present the Twenty-Ninth Annual Report together with theAudited Financial Statements for the year ended March 31 2018.

Financial Highlights

Year ended 31.03.2018 Year ended 31.03.2017
Total Income 2163.61 1696.57
Cash Profit 494.52 555.36
Less: Depreciation 49.87 44.08
Profit before Tax 444.65 511.28
Less: Provision for Taxation 114.00 139.40
Add / (Less): Deferred Tax 22.15 (19.11)
Profit after Tax (Net of adjustment for earlier years) 353.14 355.71
Other Comprehensive Income 3.05 1.31
Add : Retained Earning brought forward 2461.99 2153.02
Balance available for appropriation 2818.18 2510.04
APPROPRIATION
Less: Dividend Paid (Including Dividend Tax) 96.09 48.05
Balance carried to Balance Sheet 2722.09 2461.99

Operational Review

In 2017-18 your Company's total Income from Operations stood at Rs. 2067.65 lacs asagainst Rs. 1487.48 lacs during the previous year an increase of 39% over last year.

Your Company continued its focus on fee based activities (Investment Banking) andincome therefrom was Rs. 987.40 lacs as against Rs. 871.40 lacs during the previous yearrecording an increase of 13.31%. It continues to be the thrust area for the Company.

Income from Capital Market Operation for the year has been Rs. 232.91 lacs as againstRs. 268.21 lacs during the previous year registering a marginal decline of 13.42% overlast year.

Income from Other Sources was at Rs. 95.96 lacs as against Rs. 127 lacs during theprevious year.

There has not been any change in the nature of business of the Company.

Indian Accounting Standards

Pursuant to the notification dated February 16 2015 issued by the Ministry ofCorporate Affairs the Company has adopted the Indian Accounting Standards ("IndAS") notified under the Companies (Indian Accounting Standard) Rules 2015.Accordingly the Financial Statements have been prepared in compliance with Ind AS and thecomparative information of the previous years have been provided as per the prescribedrequirements. Accordingly the subsidiary associate and joint venture companies also haveadopted Ind AS (irrespective of their net worth).

Dividend & Reserves

The Board of Directors is pleased to recommend a dividend of Re. 1/- per share (10%)for the year ended March 31 2018 subject to the approval of the Members at the 29thAnnual General Meeting.

During the year under review there was no transfer to General Reserve (Previous yearRs. 20505/-).

Employee Stock Option Scheme

SFSL Employee Stock Option Scheme 2011 was framed and implemented in compliance withthen prevailing Securities and Exchange Board of India (Employees Stock Option Scheme andEmployees Stock Purchase Scheme) Guidelines 1999 ("Guidelines"). Since thenthere have been significant regulatory changes namely introduction of

(i) Companies Act 2013 repealing erstwhile Companies Act 1956; and (ii) Securitiesand Exchange Board of India (Share Based Employee Benefits) Regulations 2014 ("SEBISBEB Regulations") repealing erstwhile SEBI ESOS Guidelines. Although the Scheme hasbeen compliant with the SEBI SBEB Regulations as on today the Scheme (prior to amendment)referred to the erstwhile Guidelines and provisions therein. Thus it was thoughtexpedient to update the Scheme in line with the current regulations.

The Scheme was originally approved and implemented in year 2011 and with efflux oftime it is also considered expedient to review some of its terms with a view to bring-inattractiveness better controllability and administrative convenience. To achieve thesame amended Scheme proposes to vary some of its terms by way of (i) increasing themaximum vesting period from 3 to 4 years (ii) changing the exercise price formula to anyprice not lesser than the face value of shares giving more flexibility to rationalize useof options/ equity dilution with trade off with exercise price where-ever needed (iii)re-defining of shorter exercise period in case of separation from employment/ service dueto various reasons including death and permanent disability of grantees and (iv)inserting/ modifying certain routine clauses to ensure administrative convenience. Furtherparticulars about the amended Stock Option Scheme 2011 are provided in the ExplanatoryStatement to the Notice convening the 29th Annual General Meeting of the Company.

No shares have been issued under the aforesaid Scheme during the FY 2017-18.Disclosures with respect to Stock Options as required under Regulation 14 of the SEBISBEB Regulations are available on the Company's website http://wiviv.sumedhqfiscal.comunder the section INVESTORS/ESOP DISCLOSURE.

Your Company's Auditors M/s. V. Singhi & Associates have certified that theEmployees Stock Option Scheme of the Company have been implemented in accordance with theRegulations and the resolutions passed by the members in this regard.

Share Capital

The Paid-up Equity Share Capital as at March 31 2018 stood at Rs. 79844240/-.During the year under review the Company has not issued shares with differential votingrights nor has granted any stock options or sweat equity. As on March 31 2018 none ofthe Directors of the Company hold instruments convertible into equity shares of theCompany.

Management Discussion and Analysis Report

In terms of requirements of Regulation 34 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (SEBI LODR) a Management Discussion andAnalysis Report is attached Annexure - I forming part of this Report.

Report on Corporate Governance

In terms of requirements of Regulation 34 of the SEBI LODR a Report on CorporateGovernance together with Auditors' Certificate regarding compliance of Conditions ofCorporate Governance are attached as Annexure - II and Annexure - III forming part ofthis Report.

Consolidated Financial Statement

In accordance with Section 136 of the Companies Act 2013 and Regulation 34 of theListing Regulations read with other applicable provisions your Directors have attachedthe Consolidated Financial Statements of the Company for the financial year ended March31 2018 prepared in accordance with applicable Ind AS which form a part of the AnnualReport. The financial statements including consolidated financial statements and theaudited accounts of the subsidiary are available on the Company's websitehttp://www.sumedhajTscal.com/jtnancials.asp.

Accordingly a statement in Form AOC-1 is attached to the Financial Statements of theCompany for your information.

Performance Subsidiary:

• SFSL Commodity Trading Pvt. Ltd. - Subsidiary

During the year the Company recorded Total Revenue of Rs. 1722525/- (previous yearRs. 1701538/-) and Net Profit of Rs. 1004544/- for the year ended 31st March 2018(Previous Year: Rs. 149331/-).

The Company continues to be cautious while undertaking Commodity Broking business andcontinue to explore larger growth opportunities.

Performance of Associate Companies

• Capita Finance Services Ltd.

During the year the Company recorded Total Revenue of Rs. 443883/- (previous year Rs.1513584/-) and Net profit of Rs. 255171/- for the year ended 31st March 2018 againstLoss in the Previous Year of Rs. 619485/-. The Company continues to explore growthopportunities.

• SFSL Insurance Advisory Services Pvt. Ltd.

During the year the Company recorded Total Revenue of Rs. 156200/- (previous year Rs.78394/-) and Net Profit of Rs. 92582/- for the year ended 31st March 2018 (PreviousYear: Rs. 16276/-).

The Company continues to explore growth opportunities.

• SFSL Risk Management Services Pvt. Ltd.

During the year the Company recorded Total Revenue of Rs. 202934/- (previous year Rs.107475/-) and Net Profit of Rs. 103509/- for the year ended 31st March 2018 (PreviousYear of Rs. 12566/-).

The Company continues to explore growth opportunities.

• US Infotech Pvt. Ltd.

During the year the Company recorded Total Revenue of Rs. 2544137/- (previous yearRs. 2251396/-) and Net Profit of Rs. 1156026/- for the year ended 31st March 2018(Previous Year : Rs. 614747/-).

The Company continues to explore growth opportunities.

• Brandshoots Ventures Pvt. Ltd.

Brandshoots Ventures Pvt. Ltd. is incorporated on 06th October 2016. During the yearthe Company recorded a revenue of Rs. 638931/- (Previous year : Nil) and booked Net Lossof Rs. 449491/- for the year ended 31st March 2018 (Previous year : Rs. 386726/-).

The Company is building requisite eco-system to support start-up entities.

Material Subsidiary

In accordance with the Regulation 16 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (listing Regulations') the unlisted subsidiary of thisCompany is not a material subsidiary. The Company has formulated a policy for determiningmaterial subsidiary. The policy has can be accessed at the Company's website athttp://wwiu.sumedhafiscal.com/material_subsidiary.pdf.

Scheme of Amalgamation

The Company's Associates (Capita Finance Services Ltd. SFSL Risk Management ServicesPvt. Ltd. SFSL Insurance Advisory Services Pvt. Ltd. - Transferor Companies) are in theprocess of amalgamation with US Infotech Pvt. Ltd. (Transferee Company an Associate). TheScheme is having Appointed Date on April 1 2017 and the matter is pending before theHon'ble National Company Law Tribunal Kolkata Bench Kolkata. Transferor Companiesinclude companies other than the Associates as aforesaid.

Corporate Social Responsibility

The Company is not yet required to comply to with the requirement associated withSection 135 of the Companies Act 2013. Business Responsibility Report

The Company is not required to comply with the requirements associated with Regulation34(2)(f) of the Listing Regulations 2015.

Directors' Report

Secretarial Standards

The applicable Secretarial Standards i.e. SS-1 and SS-2 relating to ‘Meetings ofthe Board of Directors' and ‘General Meetings' respectively have been duly followedby the Company.

Diretors' Responsibility Statement

To the best of knowledge and belief and according to the information and explanationsobtained by them your Directors make the following statement in terms of Section134(3)(c) of the Companies Act. 2013:

(i) that in the preparation of the Annual Accounts for the year ended March 31 2018the applicable accounting standards have been followed and there are no materialdeparture;

(ii) and applied them consistently and made judgments and estimates that are reasonableand prudent so as to give a true and fair view of the state of affairs of the Company asat March 31 2018 and profits of the Company for the year ended on that date;

(iii) that 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;

(iv) the annual accounts have been prepared on a going concern basis;

(v) that 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

(vi) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

Directors

Members of the Company at its 28th Annual General Meeting held on 23rd September 2017approved re-appointment of Mrs. Garima Maheshwari (DIN - 07001628) as a Director liable toretire by rotation.

In accordance with the provisions of Section 152 of the Companies Act 2013 and theCompany's Articles of Association Mr. Anil Kumar Birla (DIN - 00015948) Director retireby rotation at the forthcoming Annual General Meeting and being eligible offers himselffor re-appointment. The Board of Directors on recommendation of the Nomination andRemuneration Committee has recommended his re-appointment.

The tenure of Mr. R. L. Gaggar Dr. Basudeb Sen and Mr. Prashant Sekhar PandaIndependent Directors expires on March 31 2019. The Company has received theirrespective consents for re-appointment as Independent Director as well as Notices u/s. 160of Companies Act 2013 proposing their re-appointments. Nomination and RemunerationCommittee and the Board of Directors have recommended their re-appointments. The matter isbeing placed before the members at the forthcoming Annual General Meeting for theirrequired approvals.

The Independent Directors of your Company have confirmed that they meet the criteria ofIndependence as prescribed under Section 149 of the Companies Act 2013 and Regulation 16of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

Mr. Atul Chandra Varma Independent Director has resigned from the Board due to hisother pre-occupations. The Board acknowledged his deep involvement in the affairs of theCompany and leading role in the Risk Management and Corporate Governance process of theCompany.

Board Evaluation

The Company had annual evaluation of its Board Committees and individual Directorspursuant to the provisions of Companies Act 2013 and Listing Regulations. The Nominationand Remuneration Committee (NRC) specified the methodology for effective evaluation ofperformance of Board and Committees and individual Directors and also finalised theEvaluation Statement (containing required particulars as per Guidance Note issued by theSEBI) and authorized the Board to undertake the evaluation process. The EvaluationStatement was reviewed by the Independent Directors.

The performance of individual directors was evaluated on parameters such as number ofmeetings attended contribution made in the discussions contribution towards formulationof the growth strategy of the Company independence of judgement safeguarding theinterest of the Company and minority shareholders etc. The Board then evaluated theperformance of the Board Committees and the individual Directors in the prescribedmanner.

Number of Meetings of the Board

Four meetings of the Board were held during the year ended 31st March 2018.

Key Managerial Personnel (KMP)

The Company is having the following Key Managerial Personnel during the year -

Name Designation
Mr. Bhawani Sankar Rathi Wholetime Director
Mr. Deb Kumar Sett Company Secretary
Mr. Girdhari Lai Dadhich Chief Financial Officer

Committees of the Board

The Board of Directors has the following Committees:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders' Relationship Committee

The details of the Committees along with their composition number of meetings andattendance at the meetings are provided in the Corporate Governance Report.

Loans Guarantees or Investments

Details of Loans Guarantees and Investments covered under the provisions of Section186(4) of the Companies Act 2013 are provided in the Notes to Financial Statements.

Vigil Mechanism / Whistle Blower Policy

The Company has a Whistle Blower Policy to report genuine concerns or grievances. TheWhistle Blower Policy has been posted on the website of the Companyhttp://iviviv.sumedhafiscal.com/ivhistle_bloiver_policy.pdf.

Remuneration and Nomination Policy

The Company is having a Nomination and Remuneration Policy for determining remunerationof its Directors Key Managerial Personnel and Senior Management and other mattersprovided under Section 178(3) of the Companies Act 2013 adopted by the Board. Thedetails of this policy have been posted on the website of the Company http:// ivunv.sumedhafiscal. com/ remuneration_policy.pdf.

The Remuneration Policy has also been outlined in the Corporate Governance Reportforming part of this Annual Report.

Related Party Transactions

All transactions entered with Related Parties for the year under review were on arm'slength basis and required particulars such transactions are disclosed in form AOC-2 interms of Section 134 of the Companies Act 2013. Further there is no material relatedparty transaction during the year.

All Related Party Transactions are placed before the Audit Committee (for approval) aswell as the Board of Directors on a quarterly basis. There has not been any Omnibusapproval for such transactions pursuant to Regulation 23 of the Listing Regulations 2015.

The particulars of Contracts or Arrangements made with related parties pursuant toSection 188(1) of the Companies Act 2013 furnished in Form AOC-2 is attached to thisReport as Annexure - IV.

In line with the requirements of the Companies Act 2013 and Listing Regulations yourCompany has formulated a Policy on Related Party Transactions which is also available onhttp://iviviv.sumedhafiscal.com/policy_on_rpt. pdf. The Policy intends to ensure thatproper reporting approval and disclosure processes are in place for all transactionsbetween the Company and Related Parties.

Risk Management Policy and Internal Financial Control

The Company has a risk management policy the objective of which is to lay down astructured framework for identifying potential threats to the organisation on a regularbasis assessing likelihood of their occurrence designate risk owners to continuallyevaluate the emergent risks and plan measures to mitigate the impact on the Company tothe extent possible. The framework and the system are reviewed from time to time toenhance their usefulness and effectiveness. The policy recognizes that all risks in thebusiness cannot be eliminated but these could be controlled or minimised through effectivemitigation measures effective internal controls and by defining risk limits. Acomprehensive Risk Management Framework has been put in place for each of the businessessegments of the Company which is stringently followed for the management of risksincluding categorisation thereof based on their impact on the organisation. Suchcategorisation gives highest weightage to the risks which have the potential to threatenthe existence of the Company. The risks with higher severity receive more attention andmanagement time and it is the endeavour of the Company to strengthen internal controls andother mitigation measures on a continuous basis to improve the risk profile of theCompany.

Risk Management System has been integrated with the requirements of internal controlsas referred to in Section 134(5)(e) of the Companies Act 2013 to evolve risk relatedcontrols.

Deposits

The Company has neither accepted nor renewed any deposits during the year. No deposithas 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 Regulators or Courts orTribunals impacting the going concern status of the Company and its operation in thefuture.

Material Changes and Commitments

There has not been any material change and commitment affecting the financial positionof the Company occurred between the end of the Financial Year 2017-18 and the date of theReport.

Compliance System

Based on quarterly reports on the status of statutory compliance from DepartmentalHeads/ Responsibility Centres the Company Secretary issues Certificate under Section 205of the Companies Act 2013 (Act) and Rules made thereunder. The Certificate is alsoendorsed by the Wholetime Director of the Company and placed before the Audit Committeeand Board of Directors for review.

The status of Statutory Compliance is verified by the Internal Auditors and SecretarialAuditors pursuant to Sections 138 and 204 of the Companies Act 2013.

Annual Return

Annual Return of the Company pursuant to the provisions of Section 92 of the CompaniesAct 2013 has been uploaded to the website of the Company and can be accessed athttp://www.sumedhjafLscal.com/annual_retum. asp.

AUDITORS Statutory Auditors

M/s. V. Singhi 8s Associates Chartered Accountants 4 Mangoe Lane Ground FloorKolkata-700001 (Firm Registration No. 311017E) were appointed as the Statutory Auditors ofthe Company for a period of 5 (five) consecutive years for the period from Financial Year2017-18 to 2021-22 at the 28th AGM of the Company held on 23-Sep-17.

The Board and the Audit Committee has approved their continuation as Statutory Auditorsof the Company for the Financial Year 2018-19 based on their consent and confirmation ofeligibility dated May 8 2018.

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 adverse remark or disclaimer.

Secretarial Audit

In terms of the requirements of Section 204 of the Companies Act 2013 and theCompanies (Appointment & Remuneration of Managerial Personnel) Rules 2014 M/s. A. K.Labh & Co. Practicing Company Secretaries has been re-appointed to conduct theSecretarial Audit of the Company for FY 2017-18.

Based on the consent received from M/s. A. K. Labh & Co. and recommendation of theAudit Committee the Board has appointed them as Secretarial Auditor of the Company for FY2018-19.

The Secretarial Audit Report for FY 2017-18 (attached as Annexure - V) is free from anyqualification.

Cost Audit

The Company is not engaged in production of goods or providing services pursuant toSection 148 of the Act and therefore not required to comply with the requirementsthereunder.

Board's Response on Auditors' Qualification Reservation or Adverse Remark orDisclaimer Made

There are no qualifications reservations or adverse remarks made by the StatutoryAuditors in their report or by the Practicing Company Secretary in their Secretarial AuditReport. During the year there has been no instances of frauds reported by Auditors undersection 143(12) of the Companies Act 2013.

Significant and Material Orders Passed by the Courts/ Regulators

None.

Disclosure Under the Sexual Harassment of Women At Workplace (Prevention ProhibitionAnd Redressal) Act 2013

The Company has a Prevention of Sexual Harassment Policy in line with the requirementsof Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013. During the period under review no complaint was received by the Internal ComplaintCommittee.

Conservation of Energy and Technology Absorption

Since the Company does not own any manufacturing facility the other particularsrelating to conservation of energy and technology absorption stipulated in the Companies(Accounts) Rules 2014 are not applicable.

Foreign Exchange Earning and Outgo

Foreign Exchange earnings and outgo during the year under review were Rs. 6.96 Lacs andRs. 4.94 Lacs respectively (previous year Rs. 77.47 Lacs and Rs. 9.10 Lacsrespectively).

Risk Management

The Company as an Intermediary (Merchant Banker Stock Broker Depository ParticipantPortfolio Management Service provider) is registered with the Securities and ExchangeBoard of India (SEBI) and is required to comply with the prescribed risk managementmeasures. Accordingly the quarterly status of various risks being faced by the Companyand measures for mitigation thereof are placed before the Audit Committee and Board ofDirectors of the Company for review and appropriate measures. Further details about thepertinent risks are contained in the statement of Management Discussion and Analysis(Annexure I).

Particulars of Employees

The ratio of the remuneration of each Director to the median employee's remunerationand other particulars or details of employees pursuant to Section 197(12) of the CompaniesAct 2013 read with Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are attached to this Report as Annexure VI. None of the employeesof the Company is in receipt of remuneration coming under purview of the saidSection/Rule.

Appreciation

We acknowledge our appreciation to Shareholders Bankers Regulators National StockExchange Multi-Commodity Exchange Bombay Stock Exchange and Clients for their continuedsupport. The Board also takes this opportunity to express its whole-hearted appreciationof the efforts put in by the employees at all levels. We look forward to the future withconfidence and stand committed to creating a brighter future for all shareholders.

On Behalf of the Board

Ratan Lai Gaggar

Chairman

Place : Kolkata

Date : 11th August 2018