The Members of
SYSTEMATIX CORPORATE SERVICES LIMITED
Your Directors have pleasure in presenting the 34th Annual Report onthe business and operations of the Company together with the Audited Statement of Accountsfor the year ended 31st March 2019.
1. FINANCIAL SUMMARY OF THE COMPANY:
|Particulars || |
Year ended 31st March 2019
Year ended 31st March 2018
| ||Standalone ||Consolidated ||Standalone ||Consolidated || |
|Total Income ||826.91 ||5615.18 ||761.24 ||5580.07 || |
|Total Expenditure ||858.46 ||5815.21 ||371.95 ||4682.69 || |
|Profit before Exceptional & Extraordinary Items and Tax ||(31.56) ||(200.02) ||389.29 ||897.39 || |
|Exceptional Items ||- ||- ||- ||- || |
|Extraordinary Items ||- ||- ||- ||- || |
|Profit/(Loss) before Tax ||(31.56) ||(200.02) ||389.29 ||897.39 || |
|Provision for Taxation ||- ||48.51 ||96.51 ||244.30 || |
|Deferred Tax ||(0.23) ||(11.79) ||(1.21) ||3.5 || |
|Income Tax related to Earlier Years ||- ||(2.64) ||1.19 ||10.59 || |
|Profit/(Loss) after Tax ||(31.33) ||(234.12) ||292.80 ||639.00 || |
|Paid up Share Capital ||3798.03 ||3798.03 ||3998.03 ||3998.03 || |
|Reserves & Surplus ||2475.16 ||4716.49 ||2506.49 ||4949.34 || |
|Proposed Dividend / Transfer to Reserve ||- ||- ||- ||- || |
|Surplus / Deficit Transfer to Balance sheet || ||- ||- ||- || |
|EPS (Basic) ||(0.24) ||(1.80) ||2.26 ||4.92 || |
|EPS (Diluted) ||(0-24) ||(1.80) ||2.26 ||4.92 || |
2. TRANSFER TO RESERVES:
Since the Company incurred loss it is not proposed to transfer anyamount to reserves during FY 2018-19.
In view of the loss incurred. Board do not propose any dividend for theFinancial Year ended 31 st March 2019.
4. BRIEF DESCRIPTION OF THE COMPANY'S WORKING DURING THE YEAR / STATEOF COMPANY'S AFFAIR:
As is evident from the above financial review during the year thecompany has earned standalone income of Rs. 826.91 Lakh as compared to income of Rs.761.24 Lakh of the previous year which is 8.63% more as compared to last year Income.Consolidated income of Rs. 5615.18 Lakh as compared to income of Rs. 5580.07 Lakh of theprevious year which is 0.63% more as compared to last year Income.
The Company has incurred standalone loss during the year of Rs. (31.33)Lakh as compared to the standalone profit after tax of the previous year of Rs. 292.80Lakh and consolidated loss during the year of Rs. (234.12) Lakh as compared to theconsolidated profit after tax of the previous year of Rs. 639 Lakh.
5. 5.1 DETAILS OF WHOLLY OWNED SUBSIDIARIES:
The Company as on 31st March 2019 had five Wholly OwnedSubsidiaries viz:
(I) Systematix Shares and Stocks (India) Limited
(ii) Systematix Fincorp India Limited
(iii) Systematix Finvest Private Limited
(iv) Systematix Commodities Services Private Limited
(v) Systematix Ventures Private Limited
5.2 REPORT ON PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES:
During the year the Board of Directors ('the Board') reviewed theaffairs of the subsidiaries. In accordance with Section 129(3) of the Companies Act 2013we have prepared consolidated financial statements of the Company and all itssubsidiaries which form part of the Annual Report. Further a statement containing thesalient features of the financial statement of our subsidiaries in the prescribed formatAOC-1 is appended as Annexure I to the Board's Report. The statement also providesthe details of performance financial positions of each of the subsidiaries. In accordancewith Section 136 of the Companies Act 2013 the audited financial statements includingthe consolidated financial statements and related information of the Company and auditedaccounts of each of its subsidiaries will be available for inspection during businesshours at the registered office of the Company.
5.3 DETAILS OF COMPANIES WHICH HAVE BECOME OR CEASED AS SUBSIDIARYASSOCIATES AND JOINTVENTURES DURING THE YEAR UNDER REVIEW ARE AS UNDER:
During the year under review. Superstar Exports Private Limited hasbecome its Holding Company with effect from 8th May 2018 and there is no company becomingor ceasing as a subsidiary associates and joint ventures.
6. NATURE OF BUSINESS:
The Company is a SEBI registered 'Category I' Merchant Banker.
There was no change in the nature of business of the Company for theyear under review.
7. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIALPOSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THECOMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:
There are no material changes and commitments if any affecting thefinancial position of the Company which have occurred between the end of the financialyear of the Company to which the financial statements relate and the date of the report.
8. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORSOR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS INFUTURE:
There are no significant material orders passed by the Regulators /Courts or Tribunals which would impact the going concern status of the Company and itsfuture operations.
9. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITHREFERENCE TO THE FINANCIAL STATEMENTS:
The Company has adequate systems of internal control to ensure thataii assets are safeguarded and protected against loss from unauthorized use and procedurescommensurate with the size and nature of business. The Company continuously upgrades itssystems in line with the best availability practices. These systems are supported byperiodical reviews by the management and standard policies and guidelines to ensure thatfinancial and other records are prepared accurately.
During the year under review your Company did not accept any depositsin terms of Section 73 of the Companies Act 2013 read with the Companies (Acceptance ofDeposit) Rules 2014 no amounts were outstanding which were classified as 'Deposits'under the applicable provisions of Companies Act 2013 as on the date of Balance Sheet.
11. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDERSECTION 186:
The particulars of loans guarantees and investments given/made duringthe financial year under review and governed by the provisions of Section 186 of theCompanies Act 2013 forms part of financial statements.
12. 12.1 PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
All the transactions/ contracts/ arrangements entered by the Companyduring the year under review with related party (/ies) are in the ordinary course ofbusiness and on arms' length basis. As the transactions entered do not fall under Section188(1) of the Companies Act 2013. Hence disclosure in Form ACO-2 is not required to befurnished. Related Party transaction policy is posted on the website of the company and isavailable at www.systematixgroup.in
12.2 MATERIALLY SIGNIFICANT RELATED PARTY TRANSACTIONS DURING THEPERIOD UNDER REVIEW:
The Company had not entered into any material transaction with any ofits related parties. None of the transactions with any of related parties were in conflictwith the Company's interest. All related party transactions are in the ordinary course ofbusiness and on arms' length basis. Hence Form AOC-2 is not required to be furnished.Transactions with related party are disclosed in Note 25 in 'Notes forming a part offinancial statement' annexed to the financial statements for the year.
The company has formulated a policy on Materiality of Related PartyTransactions and Dealing with Related Party Transactions and the same is placed onwebsite.
13. AUDITORS AND THEIR REPORTS:
The matters related to Auditors and their Reports are as under:
13.1 OBSERVATIONS OF STATUTORY AUDITORS ON ACCOUNTS FOR THE YEAR ENDED31st MARCH 2019:
The auditor's report does not contain any qualification reservation oradverse remark or Disclaimer.
13.2 SECRETARIAL AUDIT REPORT FOR THE YEAR ENDED 31st MARCH 2019:
Pursuant to the provisions of Section 204 of the Companies Act 2013and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 thereport in respect of the Secretarial Audit carried out by M/s. Kothari H. &Associates Company Secretaries in Form MR-3 for the FY 2018-19 is annexed herewith as 'AnnexureII'. The said report does not contain any qualification reservation or adverse remarkor disclaimer.
13.3 STATUTORY AUDITORS:
Pursuant to the provisions of Section 139 of the Companies Act 2013M/s. S Jawahar & Associates Chartered Accountants (Firm Registration No. 006232S) hasbeen appointed as Statutory Auditors of the company for a period of five years to holdoffice from the conclusion of 32nd Annual General Meeting till the conclusion of 37thAnnual General Meeting of the Company. They have confirmed that they are not disqualifiedfrom continuing as the Auditors of the Company.
14. SHARE CAPITAL:
During the year under review there is no change in equity sharecapital of the company.
The Company has not issued any equity shares with differential rights /sweat equity shares/ employee stock options or not made any provision of its own shares byemployees or by trustees for the benefit of employees during the financial year 2018-2019.
The Company has not made any purchase or provision of its own shares byemployees or by trustees for the benefit of employees during the financial year 2018-2019.
15. OTHER DISCLOSURES:
Other disclosures as per provisions of Section 134 of the Act read withCompanies (Accounts) Rules 2014 are furnished as under:
15.1 EXTRACT OF ANNUAL RETURN:
Pursuant to the provisions of Section 134(3)(a) of the Companies Act2013 Extract of the Annual Return for the financial year ended 31st March 2019 madeunder the provisions of Section 92(3) of the Act is attached as 'Annexure IN' whichforms part of this Report.
15.2 CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO:
A) ENERGY CONSERVATION &TECHNOLOGY ABSORPTION:
Your Company is not engaged in any manufacturing activity and thus itsoperations are not energy intensive. However the necessary steps have been taken toconserve & preserve the energy.
The Company has maintained a technology friendly environment for itsemployees to work in. Your Company uses latest technology and equipments. However sincethe Company is not engaged in any manufacturing the information in connection withtechnology absorption is NIL.
B) FOREIGN EXCHANGE EARNINGS AND OUTGO:
The foreign exchange earnings and outgo as required under section134(3) (m) of the Companies Act 2013 read with rule 8(2) of the Companies (Accounts)Rules 2014 are provided as follows:
|a. Total foreign exchange earned ||615825 |
|b. Total foreign exchange outgo ||565738 |
16. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL:
A) CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL:
In accordance with the provisions of the Companies Act 2013 and interms of the Articles of Association of the Company Mr. Nikhil Khandelwal who is liableto retire by rotation and is eligible for re-appointment has offered himself for re-appointment.
During the year under review Mr. Nikhil Khandelwal has been appointedas Additional Director with effect from 13"'August 2018 and designated as ManagingDirector for a period of three years with effect from 01 "'September 2018 to 31"'August 2021.
Mr. Shriram Khandelwal was re-appointed as independent Director for asecond term of five consecutive years with effect from 01st April 2019 to 31st March2024.
Mr. Rakesh Mehta was re-designated from the position of AdditionalIndependent Director to Independent Director for term of five consecutive years witheffect from 10th March 2018 to 09th March 2023. With effect from 29th May 2018 Mr.Mahesh Solanki has resigned from the post of Independent Director.
During the financial year Mr. Anil Bhagchandani was appointed as ChiefFinancial Officer with effect from 29th May 2018.
B) DECLARATION BY AN INDEPENDENT DIRECTOR(S):
Pursuant to the provisions of sub-section (7) of Section 149 of theCompanies Act 2013 the Company has received individual declarations from all theIndependent Directors confirming that they fulfill the criteria of independence asspecified in Section 149(6) of the Companies Act 2013.
C) FORMAL ANNUAL EVALUATION OF DIRECTORS COMMITTEES & BOARD:
Pursuant to the provisions of the Companies Act 2013 and the SEBI(Listing Obligations and Disclosures Requirements) Regulations 2015 the Board hascarried out an annual performance evaluation of its own performance the directorsindividually as well as the evaluation of the working of its Audit and Nomination &Remuneration Committees. The manner in which the evaluation has been carried out has beenexplained in the Corporate Governance Report.
D) FAMILIARIZATION PROGRAMME FOR THE INDEPENDENT DIRECTORS:
In compliance with the requirements of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Company has put in place a FamiliarizationProgramme for independent Directors to familiarize them with the working of the Companytheir roles rights and responsibilities vis-a-vis the Company the industry in which theCompany operates business model etc. Details of the Familiarization Programme areexplained in the Corporate Governance Report and are also available on the Company'swebsite at www.systematixgroup.in
17. DISCLOSURES RELATED TO BOARD AND COMMITTEE:
17.1 BOARD MEETINGS:
The Board of Directors met 6 times during the financial year ended 31stMarch 2019 in accordance with the provisions of the Companies Act 2013 and rules madethereunder. The details of which are given in the Corporate Governance Report. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013. Kindly refer section on Corporate Governance under the head "BOARD OFDiRECTORS (BOARD)."
17.2 AUDIT COMMITTEE:
An Audit Committee is in existence in accordance with the provisions ofSection 177 of the Companies Act 2013. Kindly refer section on Corporate Governanceunder the head 'AUDiT COMMiTTEE' for matters relating to constitution meetingsfunctions & responsibilities of the Committee.
17.3 DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS ANDEMPLOYEES:
In compliance with the provisions of Section 177(9) the Board ofDirectors of the Company has framed the "Whistle Blower Policy" as the vigilmechanism for Directors and employees of the Company. The Whistle Blower Policy isdisclosed on the website of the Company at www.systematixgroup.in
17.4 NOMINATION AND REMUNERATION COMMITTEE:
A Nomination and Remuneration Committee is in existence in accordancewith the provisions of sub section (3) of Section 178. Kindly refer section on CorporateGovernance under the head 'NOMINATION AND REMUNERATION COMMITTEE'for matters relating toconstitution meetings functions of the Committee and the Nomination and remunerationpolicy formulated by this Committee. The Company's Nomination and Remuneration Policyframed under Section 178(3) of the Companies Act 2013 and Chapter IV of the SEBI (ListingObligations and Disclosures Requirements) Regulations 2015 is attached as "Annexure IV"to this report.
17.5 PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT ATWORKPLACE:
The Company is committed to provide a safe and conducive workenvironment to its employees. Your Directors further state that during the year underreview there were no cases filed under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.
In accordance with the introduction of Companies (Accounts) AmendmentRules 2018 dated 31st July 2018 your Directors would further like to inform that theCompany has duly constituted Internal Complaints Committee as required under the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
17.6 RISK MANAGEMENT:
Your Company recognizes that risk is an integral part of business andis committed to managing the risks in a proactive and efficient manner. Your Companyperiodically assesses risks in the internal and external environment along with the costof treating risks and incorporates risk treatment plans in strategy business andoperational plans. Some of the risks which may pose challenges are set out in ManagementDiscussions and Analysis Report which forms part of this report.
18. MANAGERIAL REMUNERATION:
The information required under Section 197 (12) of the Act read withRules 5(1) 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is annexed herewith as 'Annexure-V to this report.
19. CORPORATE GOVERNANCE CERTIFICATE:
The Compliance certificate from M/s .S. Jawahar & AssociatesChartered Accountants Chennai (Firm Registration No. 001931S) regarding compliance ofcorporate governance as stipulated in Schedule V of the SEBI (Listing Obligations andDisclosures Requirements) Regulations 2015 is annexed with the report.
20. CORPORATE SOCIAL RESPONSIBILITY:
The provisions of section 135 of the Companies Act 2013 regardingCorporate Social Responsibility are not applicable.
21. INTERNAL CONTROLS OVER FINANCIAL REPORTING (ICFR):
The Company has in place adequate internal financial controlscommensurate with the size scale and complexity of its operations. During the year suchcontrols were tested and no reportable material weakness in the design or operations wereobserved. The Company has policies and procedures for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation.
22. INDIAN ACCOUNTING STANDARDS (IND AS)-IFRS CONVERGED STANDARDS:
Pursuant to the notification issued by the Ministry of CorporateAffairs dated 16th February 2015 relating to the Companies (Indian Accounting Standard)Rules 2015. Our Company being a SEBI registered 'Category I' Merchant Banker having networth of rupees less than five hundred Crore has adopted "IND AS" with effectfrom 01st April 2019 with the comparatives for the periodsending 31st March 2019.
23. DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the requirement under Section 134(3) (c) of the CompaniesAct 2013 with respect to Directors' Responsibility Statement it is hereby confirmed;
a) That in the preparation of the annual financial statements for yearended 31st March 2019 the applicable accounting standards had been followed along withproper explanation relating to material departures;
b) That the directors had selected such accounting policies andapplied them consistently and made judgments and estimates that are reasonable and prudentso as to give a true and fair view of the state of affairs of the company as at 31 March2019 and of the loss of the company for the year ended on that date;
c) That proper and sufficient care has been taken 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;
d) That the annual financial statements have been prepared on agoing concern basis;
e) That the proper Internal financial controls were in place andthat such internal financial controls were adequate and were operating effectively;
f) That systems to ensure compliance with the provisions of allapplicable laws were In place and were adequate and were operating effectively.
Your Directors gratefully acknowledge the excellent support receivedfrom all stakeholders of the Company viz. clients members dealers vendors banks andother business partners during the year. The Directors place on record their sincereappreciation to all employees of the Company for their unstinted commitment and continuedcontribution to the Company.
| ||For and on behalf of the Board of Directors |
| ||Sd/- |
| ||Chandra Prakash Khandelwal |
|Date: 13.08.2019 ||Chairman & Managing Director |
|Place: Mumbai ||DIN: 00016373 |