The Members of Vertex Securities Limited
Your Directors are pleased to present before you the 28th Annual Reportof the Company along with Audited Financial Statements for the year ended 31st March2021.
(Rs. in Lakhs)
|Particulars ||Standalone ||Consolidated |
| ||2020-21 ||2019-20 ||2020-21 ||2019-20 |
|Total Income ||832.17 ||551.52 ||932.19 ||662.82 |
|Total Expenditure ||791.61 ||892.39 ||864.78 ||1088.08 |
|Profit / (Loss) before Exceptional Items and Tax ||40.56 ||(340.87) ||67.41 ||(425.26) |
|Exceptional Items ||0.00 ||0.00 ||0.00 ||0.00 |
|Total Tax Expenses ||0.00 ||0.00 ||0.00 ||0.00 |
|Profit/(Loss) for the Year ||40.56 ||(340.87) ||67.41 ||(425.26) |
|Other Comprehensive Income ||(2.32) ||(7.49) ||(2.32) ||(7.68) |
|Total Comprehensive Income ||38.24 ||(348.36) ||65.09 ||(432.94) |
During the year ended 31st March 2021 your Company earned revenue ofRs. 832.17 Lakhs as compared to Rs. 551.52 Lakhs in the previous year. The operations haverecorded a profit of Rs. 40.56 Lakhs as compared to a loss of Rs. 340.87 Lakhs in theprevious year.
During the year ended 31st March 2021 your Company earnedconsolidated revenue of Rs. 932.19 Lakhs as compared to Rs. 662.82 Lakhs in the previousyear. The consolidated operations have recorded a profit of Rs. 67.41 Lakhs as compared toa loss of Rs. 425.26 Lakhs in the previous year.
Detailed information on operational and financial performance etc. ofthe Company for the financial year is given in the Management Discussion and Analysiswhich is set out separately with the Directors' Report.
Due to inadequacy of profits and in order to consolidate the financialposition of the Company your Directors have not recommended any dividend for the year.
The Consolidated Financial Statements of the Company are prepared inaccordance with Section 129 of the Companies Act 2013 read with relevant AccountingStandards issued by the Institute of Chartered Accountants of India and forms part of thisAnnual Report. Pursuant to Section 136 of the Companies Act 2013 the standalonefinancial statements of the Company and the consolidated financial statements along withthe relevant documents form part of the Annual Report and separate audited accounts inrespect of the subsidiaries are available on the website of the Company atwww.vertexbroking. com.
STATE OF COMPANY'S AFFAIRS AND OPERATIONS
The proactive and continuous efforts by the Company in terms ofdiversifying and de-risking business primarily into product distribution are helping tobuild a stable revenue franchise.
The Company has strengthened its digital focus as COVID-19 pandemicpose challenge of social distancing and reduced movement. Aadhar-based digital onboardinghas been launched to enable customers easily onboard and transact from the safety of theirhomes. Further to strengthen positioning as an advisory services company portfolioanalysis and financial planning applications were improved with enhanced features.
The issued subscribed and paid-up Share Capital as on 31st March 2021was Rs. 15.08 Crores comprising of 74012189 Equity Shares of the face value of Rs. 2each fully paid-up and 27758 15% Non-cumulative Redeemable Preference Shares of Rs. 100each fully paid up.
Further the Company has not issued any convertible securities orshares with differential voting rights nor has granted any stock options or sweat equityor warrants. There has been no change in the capital structure of the Company during theyear.
OPERATIONS OF SUBSIDIARY:
Vertex Commodities And Finpro Private Limited:
Vertex Commodities And Finpro Private Limited (VCFPL) is a wholly ownedsubsidiary of the Company 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. Indian Commodity Exchange of India Ltd. (ICEX)
During the year ended 31st March 2021 the subsidiary company VertexCommodities And Finpro Private Limited had total revenue of Rs. 100.01 lakhs and netprofit of Rs. 26.84 lakhs as against the total revenue of Rs. 111.30 lakhs and net loss ofRs. 84.40 lakhs in the previous year.
The Consolidated Financial Statements presented by the Company includethe financial results of its subsidiary company.
Pursuant to provisions of Section 129(3) of the Companies Act 2013 astatement containing salient features of the financial statements of the Company'ssubsidiary in Form AOC-1 is attached to the financial statements of the Company.
Your Company has also formulated a policy for determining materialsubsidiaries which is available on the website of the Company at the web link:https://www.vertexbroking.com/ Vertex/CompanyPolicy.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
I. Re-appointment of Directors
Re-appointment of Mr. George Mampillil as Executive Director & CFO
Mr. George Mampillil (DIN 01976386) was appointed as the ExecutiveDirector of the Company for a period of 3 years from 13th August 2018 to 12th August2021. The Board on recommendation of the Nomination Remuneration and CompensationCommittee and after evaluating his performance and considering the Company's growthunder his leadership approved his re-appointment for a period of 3 years commencing from13th August 2021 subject to approval of the shareholders. Accordingly resolution seekinghis re-appointment for further term of 3 years forms a part of the notice convening the28th AGM.
II. Retirement by Rotation
In accordance with the provisions of Section 152 of the Companies Act2013 read with Companies (Appointment and Qualification of Directors) Rules 2014 Mr.Ramachandran Unnikrishnan (DIN 00493707) retires by rotation at the ensuing AnnualGeneral Meeting and being eligible has offered himself for re-appointment and your Boardhas recommended his re-appointment.
Pursuant to Regulation 36(3) of the SEBI (Listing Obligations &Disclosure Requirements) 2015 [Listing Regulations] brief resume of the Directorsproposed for appointment/re-appointment has been given in the statement annexed to theNotice convening the Annual General Meeting.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report for 2020-21 forms partof the Annual Report and is attached separately as
REPORT ON CORPORATE GOVERNANCE
Your Company is committed to maintain the highest standards of ethicsand governance resulting in enhanced transparency for the benefit of all stakeholders.The Company has complied with the requirements and disclosures that have to be made interms of the requirements of Corporate Governance specified in SEBI Listing Regulations.
The Report on Corporate Governance as stipulated under Regulation 27 ofthe Listing Regulations 2015 forms part of this report as Annexure B. Acertificate of Statutory Auditor confirming compliance of the Corporate Governancerequirements by the Company is attached to the Report on Corporate Governance.
CODE OF CONDUCT FOR DIRECTORS & SENIOR MANAGEMENT
The Board has adopted a Code of Conduct for Directors & SeniorManagement in accordance with the provisions of the Companies Act 2013 and Regulation17(5) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. TheCode also incorporates the duties of Independent Directors. All the Board Members andSenior Management Personnel have confirmed compliance with the Code. A declaration to thateffect signed by the Managing Director forms part of the Corporate Governance Report. Acopy of the Code has been put on the Company's website.
Pursuant to the provisions of Section 204 of the Companies Act 2013the Company had appointed Mr. Yogesh Sharma Practicing Company Secretary as theSecretarial Auditor of the Company for the year under review to conduct secretarial auditof the Company.
The Secretarial Audit Report for the year under review issued by Mr.Yogesh Sharma is annexed to this Report as Annexure C. With reference to thequalification regarding delay in submission of replated party transactions for the halfyear ended 30.09.2020 the Board noted that the said delay was due to the Pandemicsituation and shut down of offices and transportation due to lockdown. Further theCompany had requested BSE Ltd for waiver of fine levied by BSE and the request for waiverof fine has been approved by BSE vide their email dated 25th June 2021. The observationsmade by NSE during inspection has since been rectified by the Company and measures aretaken to avoid the same in future.
Vertex Commodities And Finpro Pvt.Ltd. material subsidiary of theCompany as per Regulation 16(1)(c) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 has also obtained Secretarial Audit Report from Mr. YogeshSharma Practicing Company Secretary. The said report also forms a part of this AnnualReport as Annexure C1.
Further in terms of the provisions of the Circular No. CIR/CFD/CMD1/27/2019 dated 8th February 2019 issued by Securities and Exchange Board of Indiathe Company has obtained the Annual Secretarial Compliance Report for the financial yearended 31st March 2021 thereby confirming compliance of the applicable SEBI Regulationsand circulars / guidelines issued there under on behalf of the Company.
Pursuant to the provisions of Section 134(3)(a) and Section 92(3) ofthe Act read with Rule 12 of the Companies (Management and Administration) Rules 2014 acopy of the Annual Return of the Company for the financial year ended 31st March 2021 isuploaded on the website of the Company and can be accessed at www.vertexbroking.com.
The Board of Directors of the Company has constituted variousCommittees in compliance with the provisions of the Companies Act 2013 and SEBI ListingRegulations such as Audit Committee Nomination Remuneration and Compensation Committeeand Stakeholders' Relationship Committee.
All decisions pertaining to the constitution of the Committeesappointment of members and fixing of terms of reference/role of the Committees are takenby the Board of Directors.
Details of the role and composition of these Committees including thenumber of meetings held during the financial year and attendance at meetings are providedin the Corporate Governance Report which forms a part of the Annual Report.
MEETINGS OF THE BOARD AND COMMITTEES
The Board met 5 (five) times during the financial year. The detailsregarding the meetings of the Board of Directors Committees of the Board and meeting ofIndependent Directors are provided in the Report on Corporate Governance which forms partof the Annual Report.
The Audit Committee is constituted with two Independent Directors andone Executive Director comprising of Mr. James Pothen as the Chairman Mr. Jose ThomasPolachira and Mr. Ramachandran Unnikrishnan as other Committee Members.
More details regarding the Audit Committee including compositionattendance at the meetings and brief terms of reference are given in the annexedCorporate Governance Report'.
NOMINATION AND REMUNERATION POLICY
The Board on the recommendation of the Nomination Remuneration andCompensation Committee has adopted a policy for selection appointment and remuneration ofDirectors Key Managerial Personnel and Senior Management. The said policy is available onour website at the weblink https://www. vertexbroking.com/Vertex/ Company Policv.
The salient features of the Policy are provided in the CorporateGovernance Report.
The Company has in place a Risk Management Policy to identify andevaluate the various elements of risk which may pose a threat to the business andexistence of the Company. After identifying the risk and assessing the level of impactcontrols are put in place to mitigate the risk. The policy has different risk modelswhich help in identifying risks trend exposure and potential impact analysis at a CompanyLevel.
FAMILIARIZATION PROGRAMME FOR DIRECTORS
The Independent Directors of the Company are persons of integritypossessing rich experience and expertise in the field of corporate management financecapital market economic and business information. The Company has issued appointmentletter to the Independent Directors setting out in detail the terms of appointmentduties roles & responsibilities and expectations of the Independent Director. TheBoard of Directors has complete access to the information within the Company.Presentations are regularly made to the Board of Directors / Audit Committee / Nomination& Remuneration Committee / Stakeholders' Relationship Committee on variousrelated matters where Directors have interactive sessions with the Management. Furtherthe Managing Director also holds one to one discussion with the newly appointed Directorto familiarize with the Company's operations.
The details of the Company's familiarization programme forIndependent Directors can be accessed at (http://www. vertexbroking.com/Investors).
ANNUAL EVALUATION OF THE BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS
The Board of Directors has carried out an annual evaluation of its ownperformance that of board committees and individual directors pursuant to the provisionsof the Companies Act 2013 and the SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015.
The evaluation was done on various parameters like vision and strategyBoard participation quality of contribution to Board discussions and decisionsdisclosure of interest strategic insights or inputs regarding future growth of theCompany and its performance ability to challenge views in a constructive mannerknowledge acquired with regard to the Company's business/ activities leadershipskills marketing and corporate communications etc.
The performance of the Board was evaluated by the Board after seekinginputs from all the directors on the basis of the criteria such as the board compositionand structure effectiveness of board processes information and functioning etc.
Further the Independent Directors at their meeting held during theyear reviewed the performance of the Board the non- Independent Directors and theChairman.
DECLARATION BY INDEPENDENT DIRECTORS
The Independent Directors of the Company have furnished necessarydeclarations to the Company under Section 149(7) of the Companies Act 2013 confirmingthat they meet the criteria of independence as prescribed for independent directors underSection 149(6) of the Act and Regulation 16 of the SEBI Listing Regulations.
In the opinion of the Board all the Independent Directors possess theintegrity expertise and experience including the proficiency required to be IndependentDirectors of the Company fulfil the conditions of independence as specified in the Actand the SEBI Listing Regulations and are independent of the management and have alsocomplied with the Code for Independent Directors as prescribed in Schedule IV of the Act.
At the 26th Annual General Meeting of the Company held in the year2019 the Shareholders had approved the appointment of S.S.Khan & Co. CharteredAccountants ( Firm Registration No.133324W) as the Statutory Auditors of the Company fora period of five years from the conclusion of the 26th AGM till the conclusion of the 31stAGM in terms of the applicable provisions of Section 139(1) of the Companies Act 2013read with the Companies (Audit and Auditors) Rules 2014.
The Auditors' Report on the Financial Statements (Standalone andConsolidated) of the Company for the year under review "with an unmodifiedopinion" as given by the Statutory Auditors is disclosed in the FinancialStatements forming part of this Annual Report. The Auditors' Report is clean andthere are no qualifications in their Report. Also no frauds in terms of the provisions ofSection 143(12) of the Act have been reported by the Statutory Auditors in their reportfor the year under review.
The Notes to the Financial Statements (Standalone and Consolidated) areself-explanatory and do not call for any further comments.
EMPLOYEE STOCK OPTION SCHEME (ESOP)
During the year under review there has been no change in the VertexEmployee Stock Option Plan 2010 (the ESOP Plan') of the Company. The ESOP Planis in compliance with the SEBI (Share Based Employee Benefits) Regulations 2014 (theSBEB Regulations').
During the year under review no options were granted vested orexercised and hence the disclosure required under Section 62(1)(b) of the Companies Act2013 read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules 2014 andRegulation 14 of the SBEB Regulations is not required to be furnished. Accordingly yourCompany is also not required to obtain certificate from the Statutory Auditors in respectof implementation of the ESOP Plan for the financial year 2020-21.
The relevant details for the previous financial years are available onthe website of the Company at www.vertexbroking.com
The Company has not issued any sweat equity shares or equity shareswith differential rights during the year ended 31st March 2021.
PARTICULARS OF LOANS GUARANTEES OR INVESTEMENTS
Details of Loans Guarantees and Investments covered under theprovisions of Section 186 of the Companies Act 2013 are separately disclosed in thisAnnual Report as part of the notes to the Financial Statements.
INTERNAL CONTROL SYSTEM
The Company has put in place an adequate system of internal controlcommensurate with its size and nature of business. These systems provide a reasonableassurance in respect of providing financial and operational information complying withapplicable statutes safeguarding of assets of the Company and ensuring compliance withcorporate policies.
The Company's Board & Audit Committee reviews adherence tointernal control systems internal audit reports and legal compliances. The AuditCommittee reviews all quarterly and yearly financial results of the Company and recommendsthe same to Board for its approval.
INSIDER TRADING REGULATIONS
Based on the requirements under SEBI (Prohibition of Insider Trading)Regulations 2015 as amended from time to time the Company has adopted a Code of Conductfor Prevention of Insider Trading and Policy on Disclosure of Material Events/ Informationwhich is applicable to all Directors and the Designated Employees of the Company. The Codelays down the guidelines which advices on the procedures to be followed and disclosuresto be made while dealing in shares of the Company and indicate the consequences ofnon-compliance. A copy of the Code has been put on the Company's website.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the yearwere on arm's length basis and in the ordinary course of business. The AuditCommittee has approved the related party transactions and subsequently the same wereapproved by the Board of Directors from time to time and the same are disclosed in theFinancial Statements of the Company for the year under review.
Further pursuant to the provisions of the Act and the SEBI ListingRegulations the Board of Directors has on recommendation of its Audit Committee adopteda Policy on Related Party Transactions and the said policy is available on the website ofthe Company i.e. https://www.vertexbroking. com/Vertex/Company Policy.
The disclosure on the Related Party Transactions in Form AOC-2 isprovided as Annexure D to the Board's Report.
Your Directors draw attention of the members to Note 31 to thefinancial statement which sets out related party disclosures.
During the financial year under review the Company has not accepteddeposits within the meaning of Section 73 of the Companies Act 2013 read with theCompanies (Acceptance of Deposits) Rules 2014.
SECRETARIAL STANDARDS OF ICSI
The Company has complied with the requirements prescribed under theSecretarial Standards 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 inexcess of the limits specified under Section 197 of the Companies Act 2013 read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 including any amendments thereof.
The information containing particulars of employees as required underSection 197 of the Companies Act 2013 read with Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 as amended from time to time isattached herewith as Annexure E.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO
The Company ensures optimized and efficient consumption of energy inall the offices/branches of the Company located across India. With the implementation ofits digital initiatives the Company has also substantially reduced its paper consumption.
The Company has always leveraged technological innovations to improveits operational efficiency and satisfy and retain our customer base. Keeping in line withSEBI guidelines the Company has been automating the customer on-boarding process. Thishas enabled the Company to reduce time- consuming activities and complexity of physicalon-boarding of clients.
The details regarding foreign exchange earnings and outgo are givenbelow:
Earnings: Nil Outgo - Nil
MATERIAL CHANGES AND COMMITMENTS
There has been no change in the nature of business during the year.There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the financial year of the Company towhich the financial statements relate and the date of this Report.
DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The Company has zero tolerance for sexual harassment at work place andhas adopted a policy on prevention prohibition and redressal of sexual harassment atworkplace in line with the provision of Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the rules framed there under.
The Company has constituted an Internal Complaints Committee as perSection 4 of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
Your Directors state that during the year under review there was nocomplaint received pursuant to the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.
WHISTLE BLOWER POLICY/VIGIL MECHANISM
The Company has Whistle Blower Policy encompassing vigil mechanism toreport genuine concerns and grievances. The policy provides adequate safeguards againstvictimisation of persons who use the Whistle Blower mechanism. It provides appropriateavenues to the employees to bring to the attention of the management any issue which isperceived to be in violation or in conflict with the fundamental business of the Company.The employees are encouraged to voice their concerns by way of whistle blower policy andhave been given access to the Audit Committee. The policy is available on the website ofthe Company at the weblink https://www.vertexbroking.com/ Vertex/Company Policy
SIGNIFICANT AND MATERIAL ORDERS IMPACTING GOING CONCERN STATUS
No significant or material orders were passed by the regulators orCourts or tribunals which impact the going concern status and Company's operation infuture.
GENERAL SHAREHOLDER INFORMATION
General Shareholder Information is given in the Report on CorporateGovernance forming part of this Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT:
In accordance with the provisions of Section 134 (5) of the CompaniesAct 2013 your Directors confirm that:-
a) in the preparation of the annual accounts the applicable accountingstandards have been followed along with proper explanation relating to materialdepartures wherever necessary.
b) 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 at the end of thefinancial year and of profit of the Company for that period.
c) the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities.
d) the Directors have prepared the annual accounts on an ongoingconcern basis.
e) the Directors have laid down internal financial controls to befollowed by the Company and that such internal financial control is adequate and wasoperating effectively.
f) the Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
Your Directors state that no disclosure or reporting is required inrespect of the following items as there were no transactions on these items during theyear under review:
a. Issue of equity shares with differential right as to dividendvoting or otherwise
b. Issue of shares (including sweat equity shares) to employees of theCompany under any scheme save and except ESOS referred to in this report.
c. Provisions related to Corporate Social Responsibility is notapplicable to the Company.
d. No fraud was reported by auditors of the Company during the yearunder review.
e. The provision of section 148 of the Act are not applicable to theCompany. Accordingly there is no requirement of maintenance of cost records as specifiedunder section 148(1) of the Act.
Your Directors wish to express their grateful appreciation for theco-operation and continued support received from customers shareholders investorsparent company collaborators vendors financial institutions banks regulatoryauthorities and the society at large during the year.
Your Directors recognize and appreciate the efforts and hard work ofall the employees of the Company and their continued contribution to its progress.
|For and On behalf of the Board of Directors || |
|Ramachandran Unnikrishnan ||George Mampillil |
|Managing Director ||Director & CFO |
|(DIN 00493707) ||(DIN 01976386) |
|Place: Kochi || |
|Date: 10th August 2021 || |