The Members of Vertex Securities Limited
Your Directors are pleased to present before you the 26th Annual Report of the Companyalong with Audited Financial Statements for the year ended 31st March 2019.
FINANCIAL HIGHLIGHTS (Standalone):
| || ||(Rs. in Lakhs) |
|Particulars ||Year ended 31st March 2019 ||Year ended 31st March 2018 |
|Total Income ||686.33 ||765.02 |
|Total Expenditure ||608.93 ||622.21 |
|Profit / (Loss) from Operations before Other Income Finance Cost & Exceptional Items ||77.40 ||142.81 |
|Finance Costs ||59.32 ||65.49 |
|Profit / (Loss) from Ordinary Activities after Finance Cost but before Exceptional Items ||18.08 ||77.32 |
|Exceptional Items ||0.00 ||0.00 |
|Profit / (Loss) from Ordinary Activities before Tax ||18.08 ||77.32 |
|Tax Expenses ||0.00 ||0.00 |
|Net Profit / (Loss) after Tax ||84.08 ||77.32 |
During the year ended 31st March 2019 your Company earned revenue of Rs. 686.33 Lakhsas compared to Rs. 765.02 Lakhs in the previous year. The operations have recorded aprofit of Rs. 18.08 Lakhs as compared to a profit ofRs. 77.32 Lakhs in the previous year.
During the year ended 31st March 2019 your Company earned consolidated revenue of Rs.795.42 Lakhs as compared to Rs. 875.75 Lakhs in the previous year. The consolidatedoperations have recorded a profit ofRs. 32.85 Lakhs as compared to a profit ofRs. 74.58Lakhs in the previous year. Detailed information on operational and financial performanceetc. of the Company for the financial year is given in the Management Discussion andAnalysis which is set out separately with the Board's Report.
Due to inadequacy of profits and in order to consolidate the financial position of theCompany your Directors have not recommended any dividend for the year.
Pursuant to Section 136 of the Companies Act 2013 the standalone financial statementsof the Company consolidated financial statements along with the relevant documents formpart of the Annual Report and separate audited accounts in respect of the subsidiaries areavailable on the website of the Company.
The issued subscribed and paid-up Equity Share Capital as on 31st March 2019 was Rs.15.08 Crores comprising of 74012189 Equity Shares of the face value of Rs. 2 eachfully paid-up and 27758 15% Non cumulative Redeemable Preference shares of Rs. 100 eachfully paid up.
OPERATIONS OF SUBSIDIARY:
Vertex Commodities And Finpro Private Limited:
Vertex Commodities And Finpro Private Limited (VCFPL) is wholly owned subsidiary of theCompany engaged in commodity broking business.
VCFPL is a member of the following commodity exchanges:
1. Multi Commodity Exchange of India Ltd. (MCX)
2. National Commodity and Derivatives Exchange Ltd. (NCDEX)
3. National Multi Commodity Exchange of India Ltd. (NMCE)
During the year ended 31st March 2019 the subsidiary company Vertex Commodities AndFinpro Private Limited had total revenue of Rs. 109.09 lakhs and net profit ofRs. 14.78lakhs as against the total revenue of Rs. 110.73 lakhs and net loss of Rs. 2.74 lakhs inthe previous year.
In accordance with Section 136 of the Companies Act 2013 the audited financialstatements (including the consolidated financial statements and related information ofthe Company and audited accounts of its subsidiaries) are available on our websitewww.vertexbroking.com. These documents will also be available for inspection duringbusiness hours at our registered office.
The Consolidated Financial Statements presented by the Company include the financialresults of its subsidiary company. Pursuant to provisions of Section 129(3) of theCompanies Act 2013 a statement containing salient features of the financial statementsof the Company's subsidiary in Form AOC-1 is attached to the financial statements of theCompany.
DIRECTORS AND KEY MANAGERIAL PERSONNEL: I. Re-appointment of independentdirectors:
The Board at its meeting held on 27th August 2019 considering the report ofperformance evaluation and based on the recommendation of Nomination and RemunerationCommittee re-appointed the following independent directors for a second term as givenbelow:
|Sr. No. ||Name of independent director ||Tenue of second term |
|1. ||Mr. James Pothen ||Five years w.e.f. 20th September 2019 |
|2. ||Mr. Jose Thomas Polachira ||Five years w.e.f. 20th September 2019 |
|3. ||Mrs. Latha Anand ||Five years w.e.f. 12th May 2020 |
Accordingly resolutions seeking approval of the members for the aforementionedre-appointments forms part of notice convening the 26th AGM.
Necessary details regarding their re-appointment as required under the Act and theListing Regulations are given in the notice of AGM.
II. Retirement by Rotation
In accordance with the provisions of Section 152 of the Companies Act 2013 read withCompanies (Appointment and Qualification of Directors) Rules 2014 Mr. U.
Ramachandran Director of the Company (DIN 00493707) retires by rotation at theensuing Annual General Meeting and being eligible has offered himself for re-appointmentand your Board has recommended his re-appointment.
Pursuant to Regulation 36(3) of the SEBI (Listing Obligations & DisclosureRequirements) 2015 [Listing Regulations] brief resume of the Directors proposed forappointment/re-appointment has been given in the statement annexed to the Notice conveningthe Annual General Meeting.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report for 2018-19 forms part of the AnnualReport and is attached separately as Annexure A.
REPORT ON CORPORATE GOVERNANCE
The report on Corporate Governance as per the requirement of the SEBI ListingRegulations forms an integral part of this Annual Report. The Report on CorporateGovernance is provided as Annexure B.
Referring to observation given under "Basis for Qualified Opinion" in theIndependent Auditors Report it is clarified that as the Company has initiated legalactions for the recovery of the dues it will not be prudent to make any provisions as thecases are in various stages in different Courts.
The Statement on Impact of Audit Qualification submitted to the stock exchange pursuantto SEBI Listing Regulations for modified opinion in Audit Report for both standalone andconsolidated accounts is appended to this report as Annexure C-1 & C-2 respectively.
Pursuant to the provisions of Section 204 of the Companies Act 2013 the Company hadappointed Mr. Yogesh SharmaPracticing Company Secretary as the Secretarial Auditor ofthe Company for the year 2018-19 to conduct secretarial audit and to ensure compliance bythe Company with various Acts applicable to the Company. The Secretarial Audit Report forthe financial year 2018-19 issued by Mr. Yogesh Sharma is annexed to this Report as AnnexureD. There are no qualifications or adverse remarks in the Report.
EXTRACT OF ANNUAL RETURN
An extract of annual return as provided under Section 92(3) of the Companies Act 2013in the prescribed form in Form MGT-9 is annexed to this report as Annexure E and isalso hosted on the Company's website https://www.vertexbroking.com/website/aboutus.aspxRs.tpe=IR
The Board of Directors of the Company has constituted various Committees in compliancewith the provisions of the Companies Act 2013 and SEBI Listing Regulations such as AuditCommittee Nomination Remuneration and Compensation Committee and Stakeholders'Relationship Committee.
All decisions pertaining to the constitution of the Committees appointment of membersand fixing of terms of reference/role of the Committees are taken by the Board ofDirectors.
Details of the role and composition of these Committees including the number ofmeetings held during the financial year and attendance at meetings are provided in theCorporate Governance Report which forms a part of the Annual Report.
The details regarding the meeting of the Board of Directors Committees of the Boardand meeting of Independent Directors are provided in the Report on Corporate Governancewhich forms part of the Annual Report.
NOMINATION AND REMUNERATION POLICY
The Board on the recommendation of the Nomination and Remuneration Committee hasadopted a policy for selection appointment and remuneration of Directors Key ManagerialPersonnel and Senior Management. The said policy is available on our website atwww.vertexbroking.com.
The details of the Policy are provided in the Corporate Governance Report.
The Company has in place a Risk Management Policy to identify and evaluate the variouselements of risk which may pose a threat to the business and existence of the Company.After identifying the risk and assessing the level of impact controls are put in place tomitigate the risk. The policy has different risk models which help in identifying riskstrend exposure and potential impact analysis at a Company Level.
FAMILIARIZATION PROGRAMME FOR DIRECTORS
At the time of appointment of a Director a formal letter of appointment is given tothe Director. The Director is also explained in detail the role function duties andresponsibilities expected from him/her and also compliance required from him/her under theCompanies Act 2013 and Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015.Further the Managing Director will also haveone to one discussion with the newly appointed Director to familiarize with the Company'soperation.
The Board of Directors has complete access to the information within the Company.Presentations are regularly made to the Board of Directors and various Committees of theBoard.
The details of the Company's familiarization programme for Independent Directors can beaccessed at (http://www. vertexbroking.com/Investors).
PERFORMANCE EVALUATION OF BOARD OF DIRECTORS
The Board of Directors has carried out an annual evaluation of its own performanceboard committees and individual directors pursuant to the provisions of the Companies Act2013 and the corporate governance requirements as prescribed by SEBI Listing Regulations.
The evaluation was done on various parameters like vision and strategy Boardparticipation quality of contribution to Board discussions and decisions disclosure ofinterest strategic insights or inputs regarding future growth of the Company and itsperformance ability to challenge views in a constructive manner knowledge acquired withregard to the Company's business/ activities leadership skills marketing and corporatecommunications etc.
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 14 board processes information and functioning etc.
Further the Independent Directors at their meetings held during the year reviewed theperformance of the Board the non-Independent Directors and the Chairman.
DECLARATION BY INDEPENDENT DIRECTORS
The Independent Directors of the Company have furnished necessary declarations to theCompany under Section 149(7) of the Companies Act 2013 confirming that they meet thecriteria of independence as prescribed for independent directors under Section 149(6) ofthe Act and Regulation 16(b) of the SEBI Listing Regulations.
During the year under review a meeting of Independent Directors was held on 05.02.2019.
The Company's Auditors M/s. Rahul Gautam Divan and Associates Chartered Accountantswho were appointed as statutory auditors of the Company at the 22nd AGM of theCompany held on 7th September 2015 for a period of four years will complete theirpresent term on conclusion of the ensuing 26th AGM of the Company.
The Board on the recommendation of the Audit Committee recommended for the approvalof the Members the appointment of S.S.Khan & Co. Chartered Accountants as theAuditors of the Company for a period of five years from the conclusion of the ensuing 26thAGM till the conclusion of the 31st AGM. On the recommendation of the Audit Committee theBoard also recommended for the approval of the Members the remuneration of Rs. 190000to conduct statutory audit including Limited Reviews for the financial year for thefinancial year 2019-20. Appropriate resolution seeking your approval to the appointmentand remuneration of S.S.Khan & Co as the Statutory Auditors is appearing in the Noticeconvening the 26th AGM of the Company.
EMPLOYEE STOCK OPTION SCHEME (ESOP)
Disclosures as per the Securities and Exchange Board of India (Employee Stock OptionScheme and Employee Stock Purchase Scheme) Guidelines 1999 and disclosure pursuant tothe Rule 12(9) of Companies (Share Capital and Debenture) Rules 2014 are provided as AnnexureF to the Board's Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTEMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to financial statements provided inthis Annual Report.
INTERNAL CONTROL SYSTEM
The Company has put in place an adequate system of internal control commensurate withits size and nature of business. These systems provide a reasonable assurance in respectof providing financial and operational information complying with applicable statutessafeguarding of assets of the Company and ensuring compliance with corporate policies.
The Company's Board & Audit Committee reviews adherence to internal controlsystems internal audit reports and legal compliances. The Audit Committee reviews allquarterly and yearly financial results of the Company and recommends the same to Board forits approval.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the year were on arm'slength basis and in the ordinary course of business. The Audit Committee has approved therelated party transactions and subsequently the same were approved by the Board ofDirectors.
The disclosure on the Related Party Transactions in Form AOC-2 is provided as AnnexureG to the Board's Report.
During the financial year under report the Company has not accepted deposits within themeaning of Section 73 of the Companies Act 2013 read with the Companies (Acceptance ofDeposits) Rules 2014.
SECRETARIAL STANDARDS OF ICSI
The Company has complied with the requirements prescribed under the SecretarialStandards on Meetings of the Board of Directors (SS 1) and General Meetings (SS 2).
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
There are no employees drawing a monthly or yearly remuneration in excess of the limitsspecified under Section 197 of the Companies Act 2013 read with Rules 5(2) and 5(3) ofthe Companies (Appointment and Remuneration of Managerial or material orders were passedby the Personnel) Rules 2014 including any amendments thereof.
The information containing particulars of employees as required under Section 197(12)of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 as amended from time to time isattached herewith as Annexure H.
CONSERVATIONOFENERGYTECHNOLOGYABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The company ensures optimized and efficient consumption of energy in all theoffices/branches of the Company located across India. With the implementation of itsdigital initiatives the company has also substantially reduced its paper consumption.
The Company has been at the forefront of using technology absorption and has alwaysleveraged technological innovations to improve our operational efficiency and satisfy andretain our customer base.
The details regarding foreign exchange earnings and outgo are given below:
Earnings: - Nil
Outgo - Nil
The Company has constituted an Internal Complaints Committee as per Section 4 of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
In line with the requirements of Sexual harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 (Act) the Company has in place a policy to preventsexual harassment of women at workplace. Your Directors state that during the year underreview there were no cases filed pursuant to the above Act.
WHISTLE BLOWER POLICY
The Company has Whistle Blower Policy as part of vigil mechanism to report genuineconcerns and grievances. It provides appropriate avenues to the employees to bring to theattention of the management any issue which is perceived to be in violation or inconflict with the fundamental business of the Company. The employees are encouraged tovoice their concerns by way of whistle blower policy and have been given access to theAudit Committee. The policy is uploaded in the website of the Company.
SIGNIFICANT AND MATERIAL ORDERS IMPACTING GOING CONCERN STATUS
Nosignificant or Courts or tribunals which impact the going concern status andCompany's operation in future.
DIRECTORS' RESPONSIBILITY STATEMENT:
In accordance with the provisions of Section 134(5) the Companies Act 2013 yourDirectors confirm that:
a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures wherevernecessary.
b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofprofit of the Company for that period.
c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities.
d) the Directors have prepared the annual accounts on an ongoing concern basis.
e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financialcontrol is adequate and was operating effectively.
f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
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. Issue of equity shares with differential right as to dividend voting or otherwise
b. Issue of shares (including sweat equity shares) to employees of the company underany scheme save and except ESOS referred to in this report.
c. Provisions related to Corporate Social Responsibility is not applicable to theCompany.
d. Pursuant to the provisions of the Act no fraud was reported by auditors of theCompany during FY 2019.
e. The provision of section 148 of the Act are not applicable to the Company.Accordingly there is no requirement of maintenance of cost records as specified undersection 148(1) of the Act.
Your Directors would like to express their gratitude to the officials of National StockExchange of India Limited Bombay Stock Exchange Limited National Securities DepositoryLimited Central Depository Services (India) Limited and also to the Shareholders andBankers. Your directors recognize and appreciate the efforts and hard work of all theemployees of the Company and their continued contribution to its progress.
| ||For and On behalf of the Board of Directors |
|Place: Kochi ||Kumar Nair |
|Date: 27 August 2019 ||Chairman |
| ||(DIN 00320541) |