Your Directors have pleasure in presenting their 30th Annual Report together withAudited Financial Statements of the Company for the year ended 31st March 2016.
|Particulars ||2015-2016 ||2014-2015 |
|Total Income ||3947290.50 ||4213643.00 |
|Profit before Interest Depreciation & Tax ||2001121.50 ||2589235.00 |
|Less : Depreciation ||15433.26 ||15432.25 |
|Interest ||826807.00 ||1247498.00 |
|PBT/(Loss) Before Tax & exceptional items ||1158881.24 ||1326304.75 |
|Less: Exceptional items: ||0.00 ||0.00 |
|Profi(loss) before tax ||1158881.24 ||1326304.75 |
|Less:Fringe Benefit Tax ||0.00 ||0.00 |
|Deferred Tax Assets /(Liability) ||2768.00 ||1406.00 |
|Current Year Income tax ||371040.00 ||446239.00 |
|Earlier Year Excess Provision of Income Tax ||51529.00 || |
|Prior Period Income/(Expenses) ||- ||- |
|Profit for the period ||842138.24 ||881471.75 |
|Appropriation ||00 ||00 |
|General Reserve ||00 ||00 |
|Balance Carried to Balance Sheet ||842138.24 ||881471.75 |
FINANCIAL PERFORMANCE :
During the year under review the total income of the Company is Rs. 3947290.50 ascompared to previous year is Rs. 4213643.00. The Company has gained a profit before tax ofRs. 115881.24 as compared to profit of Rs. 1326304.75 in the previous year.
SHARE CAPITAL :
The paid up Equity Share Capital of the company as on 31st of March 2016 is Rs.30519000/-. During the year under review the company has not issued any sharesstocks.
In order to conserve the resources of the Company the Board of Directors has notrecommended any dividend for the financial year ended on 31st of March 2016.
The company has deployed surplus funds for the time being in securities as investmentand granted loans for the purpose of gain.
STATE OF COMPANY'S AFFAIRS:
Your Company has for the year ended on 31st of March 2016 reported a total revenue ofRs. 3947290.50 as compared to Rs. 4213643.00 in financial year ended on 31st of March2015.
The profit before tax is Rs. 1158881.24 for the year ended 31st of March 2016 ascompared to Rs. 1326304.75 in the financial year ended on 31st of March 2015.
The Net profit for the current year is Rs. 842138.24 as compared to net profit of Rs.881471.75 in previous year.
The total expenses for the current year is Rs. 2788409.26 as compared to total expensesof Rs. 2887338.25 in previous year.
CHANGE IN NATURE OF BUSINESS:
There is no change in the nature of business of the Company during the year underreview.
Your Company has not accepted any deposits under section 73 or 76 of the Companies Act2013 during the period under review and as such no amount of principal or interest wasoutstanding on the date of the Balance Sheet.
CONSTITUTION OF VARIOUS COMMITTEES:
The Board of Directors of the Company has constituted the Audit Committee Nomination& Remuneration Committee and Stakeholders Relationship Committee in accordance withthe requirement of Companies Act 2013. They function according to their respective rolesand defined scope and in accordance with the terms of reference specified by Board ofDirectors.
Constitution of above committees are as follows :
|AUDIT COMMITTEE || || |
|NAME OF MEMBER ||DESIGNATION ||EXECUTIVE/NON-EXECUTIVE AND |
| || ||INDEPENDENT/NON-INDEPENDENT DIRECTOR |
|Mr. Vinod Kumar Sharma ||Chairman ||Non-Executive and Independent Director |
|Mr. Sharad Tandon ||Member ||Non-Executive and Independent Director |
|Mr. Ashish Dixit ||Member ||Non-Executive and Non-Independent Director |
|Mr. Tej Narain Agarwal ||Member ||Non-Executive and Independent Director |
|NOMINATION AND REMUNERATION COMMITTEE || |
|NAME OF MEMBER ||DESIGNATION ||EXECUTIVE/NON-EXECUTIVE AND |
| || ||INDEPENDENT/NON-INDEPENDENT DIRECTOR |
|Mr. Tej Narain Agarwal ||Chairman ||Non-Executive and Independent Director |
|Mr. Vinod Kumar Sharma ||Member ||Non-Executive and Independent Director |
|Mr. Sharad Tandon ||Member ||Non-Executive and Independent Director |
|STAKEHOLDERS RELATIONSHIP COMMITTEE || |
|NAME OF MEMBER ||DESIGNATION ||EXECUTIVE/NON-EXECUTIVE AND |
| || ||INDEPENDENT/NON-INDEPENDENT DIRECTOR |
|Mr. Sharad Tandon ||Chairman ||Non-Executive and Independent Director |
|Mr. Arun Kejriwal ||Member ||Executive and Non- Independent Director |
|Ms. Sonali Kejriwal ||Member ||Non-Executive and Non-Independent Director |
DIRECTORS AND KEY MANAGERIAL PERSONNEL: DIRECTORS :
Mr. Ashish Dixit who was liable to retire by rotation was reappointed as Director ofthe company in the Annual General Meeting of the Company for the financial year 2014-2015.
Mr. Vinod Kumar Sharma was appointed as Independent Director of the Company for 5 yearswith effect from 30th September 2015 in the Annual General Meeting of the Company for thefinancial year 2014-2015.
Ms. Sonali Kejriwal was regularized as director of the Company on 30th of September2015 in the Annual General Meeting of the Company for the financial year 2014-2015.
Ms. Sonali Kejriwal the director of the company retires by rotation in the AnnualGeneral Meeting of the Company for the financial year 2015-2016 and being eligible hasoffered herself for re-appointment.
The Board of Directors proposes to re-appoint Mr. Arun Kejriwal as Managing Director ofthe Company who is eligible and willing to be appointed for a further period of 3 yearsw.e.f. 1st of July 2016. The relevant special resolution for the same is contained in thenotice calling Annual General Meeting.
KEY MANAGERIAL PERSONNEL :
Mr. Arun Kejriwal Manging Director Mr. Ashish Dixit Chief Financial Officer and Ms.Shraiya Paliwal Company Secretary are the Key Managerial Personnel of the Company as perthe provisions of Section 2(51) and Section 203 of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
The required information as per Regulation 36(3) of SEBI (Listing Obligations &Disclosure Requirements) Regulations 2015 regarding the directors seeking appointment andre-appointment at the Annual General Meeting for the financial year ended on 31st ofMarch 2016 is annexed to the notice of the Annual General Meeting.
RISK MANAGEMENT POLICY:
The Company appreciates the fact that management of risk is an essential element ofgrowth and for the same assessing the risk and taking steps to control and curb it isnecessary. Thus the Board has implemented a well laid out risk management plan in thecompany and suitably incorporated procedures in it for assessing and minimizing theprospective risks to which the company may be exposed. The Audit Committee also monitorsand evaluates the risk management plan placed in the company from time to time in order toreview if it is working properly and if it needs any kind of modification. The board hasnot identified any element of risk which can create a threat to the company's business orits existence during the period under review.
FORMAL ANNUAL EVALUATION OF BOARD OF DIRECTORS AND ITS COMMITTEES AND INDIVIDUALDIRECTORS : Performance evaluation of the Board of Directors of the Company
As per the evaluation criteria formulated by the Nomination and Remuneration Committeeof the committee the Board has evaluated its own performance in context of company'sperformance status of compliance carried out efforts made towards risk managementinternal control code of conduct followed and maintained by them ethical standards met.Below are some of the criteria on the basis of which Board has made its evaluation atspecific intervals :
1) Size and composition of the Board of Directors of the company as per Companies Act2013.
2) Diversity of thought experience knowledge perspective efficiency of boardmembers to take initiatives and bringing out new ideas and gender in the Board ofDirectors of the company.
3) Maintaining transparency in the entire board processes.
4) Any deviations if any from the set goals of the Board and steps taken to controlsuch deviations.
5) Efficiency and effectiveness of the Board of Directors of the Company in carryingout its functions.
6) Timely flow of information among the Board of Directors.
7) Updation of knowledge of governing laws rules and regulations.
8) Independent judgement of each matter placed before the Board of Directors.
After evaluating its own performance Board is of the view that the performance of theBoard of Directors as a whole was satisfactory during the financial year 2015-2016.
Performance evaluation of the Committees of Board of Directors of the Company
The Board of Directors of the company evaluated the performance of each of itscommittees on the basis of various criteria such as composition of committee quantum andquality of information received by the committee members time spent for discussing thematter and reaching out to the final decision efficiency and effectiveness of thedecision making of the committee members level of active participation of committeeMembers number of meetings attended by the members presence of the Chairman of thecommittee follow up of action taken.
On the basis of the above criteria and the working procedure established by the Boardof Directors of the company the Board is of unanimous consent that all the committees ofthe company are working satisfactorily.
Performance evaluation of the Independent Directors of the Company
As per the criteria formulated by Nomination and Remuneration Committee for theperformance evaluation of Independent directors the performance of each Independentdirector was evaluated by the entire Board of Directors but excluding the director beingevaluated. While evaluation the following things were taken into consideration :
1) Application of Independent judgement while taking decision as part of the Board ofDirectors of the company
2) Exercise of the responsibility in a bona fide manner in the interest of the company
3) Attendance in the meeting of Board of Directors and meetings of committees whereindependent director is a member.
4) Active participation in the familiarization programme conducted for the IndependentDirector.
Performance evaluation of the each individual director of the Company
Further the Board evaluated during the year the performance of each Director takingeach of them as a separate individual in order to judge the contribution and efforts madeby them individually and the initiatives taken by them during the year. This helped theBoard of Directors in deciding whether to extend the tenure of director being evaluated.
MATERIAL CHANGES AND COMMITMENTS THAT MAY AFFECT THE FINANCIAL POSITION OF THE COMPANY:
No material changes and commitments affecting the financial position of the companyhave occurred during the year under review and the period between the end of the financialyear of the company and the date of this report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:
During the year under review there were no significant and material orders passed bythe Regulators courts or Tribunals which may impact the going concern status andcompany's operation in future.
INTERNAL FINANCIAL CONTROLS:
The existing internal financial control system is adequate and commensurate with thenature and size of the business of the company. The internal auditors of the company keepa follow up on the internal financial reporting and information dissemination of thecompany between the departments. The Audit committee of the company interacts from time totime with the internal auditors of the company regarding the adequacy of internalfinancial control system placed in the company.
REPORTING OF FRAUD DURING THE YEAR UNDER REVIEW:
During the year under review neither any fraud of any kind on or by the Company hasbeen noticed by the Board of Directors of the Company nor reported by the Auditors of theCompany. The Company has an internal financial control system commensurate to the size ofthe business in place.
EXTRACT OF THE ANNUAL RETURN AS PROVIDED UNDER SUB SECTION (3) OF SECTION 92 OFTHE COMPANIES ACT 2013:
The extract of Annual Return in the prescribed Form MGT - 9 is annexed with this reportas Annexure 1
SECRETARIAL AUDIT REPORT:
The Secretarial Audit Report in the prescribed Form MR-1 is annexed with this report asAnnexure 2
STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SECTION 149(7) OF THECOMPANIES ACT 2013:
As per section 149(7) of the Companies Act 2013 every independent director on his/herappointment and in the first board meeting of every financial year is required to givedeclaration of independence as specified in section149(6). The Company has receiveddeclaration under section 149(7) of the Companies Act 2013 from all of its independentdirectors.
NUMBER OF MEETINGS OF BOARD OF DIRECTORS :
During the financial year ended on 31st of March 2016 6 Board meetings were convenedon following dates :
29th of April 2015 29th of May 2015 13th of August 2015 21st of August 201514th of November 2015 12th of February 2016.
COMPANY'S POLICY ON DIRECTORS'APPOINTMENT AND REMUNERATION :
In compliance with the provisions of Section 178 of the Companies Act 2013 theNomination and Remuneration Committee of the Board of Directors have formulated a policycomprising the criteria for determining qualifications positive attributes andindependence of a director and remuneration for the directors key managerial personneland other employees which has been approved and adopted by the Board. The criteriaformulated by the Nomination and Remuneration Committee is duly followed by the Board ofDirectors of the Company while appointing the directors Key Managerial Personnel andsenior management personnel in the company.
NOMINATION AND REMUNERATION POLICY OF THE COMPANY
Criteria for appointment of Directors in the Company:
1) Person of integrity with high ethical standards.
2) Person with knowledge skill and innovative ideas that can be beneficial to thecompany.
3) Interested in learning new things and updating the knowledge and skills possessed.
4) Person who can act objectively while excercising his duties.
5) Who believes in team spirit
6) Who is responsible towards the work and can devote sufficient time and attention tothe professional obligations for informed and balanced decision making.
In respect of Managing Director Whole-time director and Independent director besidesthe general criteria laid down by Nomination and Remuneration Committee for all directorsthe criteria as mentioned in Companies Act 2013 have also been included.
Criteria for appointment of Key Managerial Personal and Senior Management Employee:
1) Person should be having the required educational qualification skills knowledgeand experience as required and necessary for the concerned post.
2) Person should be hardworking self-motivated and highly enthusiastic.
3) Person should be having positive thinking leadership qualities sincerity goodsoft skills and power of taking initiatives.
Remuneration policy of the Company :
The Remuneration policy of the company has been framed by the Nomination andRemuneration Committee in such manner that it can attract and motivate the directors keymanagerial personnel and employees of the company to work in the interest of the companyand to retain them.
1) Company has a policy to pay remuneration in such manner that the relationship ofremuneration to performance is clear and meets appropriate performance benchmarks.
2) It has been ensured while formulating the policy that remuneration to directors keymanagerial personnel and senior management should involve a balance between fixed andincentive pay reflecting short and long term performance objectives appropriate to theworking of the company.
3) Remuneration to be paid to Managing Director/Whole-time Director shall be within thelimits specified under Companies Act 2013.
4) Increments to the existing remuneration may be recommended by the committee to theBoard of Directors.
FAMILIARISATION PROGRAMME FOR THE INDEPENDENT DIRECTORS :
Company has in place a familiarization programme under which it has laid downprocedural steps to familiarize the new directors with the company's working andapplicable laws and other things which help them in getting acquainted with the companyas and when they join the company.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 :
Details of loans guarantees and investments under section 186 of the Companies Act2013 have been provided in the notes 8 9 11 and 13 to the financial statements annexedto the Annual Report of the Company.
RELATED PARTY TRANSACTION
All contracts/arrangements/transactions entered by the company with the related partieswere on arm's length basis and in the ordinary course of business. The Company has adopteda policy on Related Party Transactions and the same is available on the website of thecompany www.vikalpsecurities.com at http://vikalpsecurities.com/?page_id=100.
Form AOC 2 regarding the details of related party transactions is annexed with thisreport as Annexure 3
PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE :
Pursuant to Prevention Prohibition and Redressal of Sexual Harassment of Women atWorkplace Act 2013 the Company has a well framed policy on Prevention of SexualHarassment at workplace covering all the employees and personnel at the management toensure the prevention of any instance of such harassment and to provide protection andsafeguard to women.
During the year no complaint or case of woman harassment has been reported to thecompany.
VIGIL MECHANISM :
As per section 177(9) of the Companies Act 2013 read with Rule 7 of the Companies(Meeting of Board and its Powers) Rules 2014 the Company has adopted a Vigil Mechanismfor directors and employees of the company to report their genuine concern for anyunethical conduct or malpractice violation of code of conduct observed by them in thecompany.
The mechanism provides for adequate safeguards against victimization of directorsemployees who avail of the mechanism and also provide for the direct access to theChairman of the Audit Committee.
Details of Vigil Mechanism adopted by the company are available on the website of thecompany www.vikalpsecurities.com at http://vikalpsecurities.com/?page_id=100.
POLICY ON INSIDER TRADING :
The company follows a strict code on prohibition of Insider Trading and the same hasbeen detailed to all the directors senior management and employees of the Company.
For ensuring the same the company has adopted a code of fair disclosure of UnpublishedPrice Sensitive Information in accordance with SEBI (Prohibition of Insider Trading)Regulations 2015 which is available on the website of the companywww.vikalpsecurities.com at http://vikalpsecurities.com/?page_id=124.
DIRECTORS' RESPONSIBILITY STATEMENT:
The Board of Directors confirm that :
(a) In preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
(b) They have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of the affairs of the company at the end of the financial year ended on 31stof March 2016 and of the profit and loss of the company for that period;
(c) They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;
(d) They have prepared the annual accounts on a going concern basis;
(e) they have laid down internal financial controls to be followed by the company andsuch internal financial controls are adequate and operating effectively;
(f) They have devised proper systems to ensure compliance with the provisions of allapplicable laws and such systems are adequate and operating effectively.
STATUTORY AUDITORS :
M/s. Chaudhary Pandiya & Company Chartered Accountants Kanpur the presentAuditors of the Company were appointed as the Statutory Auditors of the Company for aperiod of 2 years in the Annual General Meeting held on 30th of September 2015 subjectto ratification of their appointment by members in every Annual General Meeting. They haveconsented to continue in the office as appointed and submitted the necessary certificatesin terms of second and third proviso to Section 139(1) of the Companies Act 2013 readwith Rule 4 of the Companies (Audit and Auditors) Rules 2014. The appointment of presentauditors if ratified shall continue till the conclusion of Annual General Meeting for thefinancial year 2016-2017.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company appointedM/s. Adesh Tandon and Associates Practicing Company Secretaries as the SecretarialAuditors of the Company to conduct the Secretarial Audit of the Company for the financialyear 2015-2016 and to furnish the audit report to the Company. The Secretarial AuditReport is annexed to this report as Annexure -2.
Pursuant to the provisions of Section 138 of the Companies Act 2013 read with rule 13of Companies (Accounts) Rules 2014 Company appointed M/s. ALOK BASUDEO & CO.Chartered Accountants (FRN: 007299C) as Internal Auditors of the Company for thefinancial year 2015-2016.
The internal Audit Report as issued by the Internal Auditor was placed before the Boardof Directors from time to time.
LISTING ON STOCK EXCHANGES :
The Company's equity shares are currently listed with "The Bombay Stock ExchangeAssociation Limited." Company applied for delisting of its shares from Calcutta StockExchange Limited long back ago in 2007 after passing the resolution for the same but didnot receive the written approval for the same. However based on our own honest opinionand as per the legal advice sought by the company we are of strong view that if one hasapplied for delisting of security complying with all the requirements as per theapplicable law then withholding the approval by the esteemed stock exchange does notmatter.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT :
In terms of Regulation 34(2)(e) of the SEBI (LISTING OBLIGATIONS AND DISCLOSUREREQUIREMENTS) REGULATIONS 2015 the Management Discussion and Analysis Report is annexedto this report.
As per SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS 2015 theprovisions of Corporate Governance are not applicable on the company. Thus the report onCorporate Governance does not form part of this report.
MANAGERIAL REMUNERATION AND PARTICULARS OF EMPLOYEES:
As per Section 197(12) of Companies Act 2013 and Rule 5 of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the required disclosure is annexed asAnnexure 4
TRANSFER TO RESERVES:
The Company has not transferred any amount for the financial year 2015-2016 to anyreserve and the entire Profit and Loss amount has been carried forward to the balancesheet of the Company for the financial year 2015-2016.
DETAILS OF SUBSIDIARY JOINT VENTURE COMPANIES AND ASSOCIATES COMPANY :
The Company has no subsidiary companies no joint venture & associate company.
DETAILS ABOUT POLICY ON CORPORATE SOCIAL RESPONSIBILITY:
The Company at present is not covered under the provisions of section 135 of theCompanies Act 2013 which stipulates the formation of Corporate Social ResponsibilityCommittee and policy thereof. Hence the same is not applicable on the Company during theperiod under review.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION:
As the company is not engaged in any activity requiring the use of energy thus thereis no scope for conservation of energy by the company.
The company has not absorbed any technology during the period under review.
FOREIGN EXCHANGE EARNING AND OUTGO:
Activities relating to exports; initiatives taken to increase exports; development ofnew export markets for products and services; and export plans: - NA
Since the company is not engaged in any activities relating to Exports thereforethere are no Foreign Exchange Earnings and Outgo.
Total Foreign Exchange used and earned:-
|Foreign Exchange Earning ||Rs. Nil |
|Foreign Exchange Outgoing ||Rs. Nil |
INDUSTRIAL RELATIONS :
The relations between the employees and the management have remained cordial andharmonious during the year under review.
COMMENTS OF THE DIRECTORS:
With regard to the observations made by the Statutory Auditors of the Company in theirreport the Board of Directors wants to present the following explanation :
1) Special Resolution not passed under section 186 of the Companies Act 2013:
Although company has granted long term and short term unsecured loans to personsinvested in shares and securities of listed companies as well as in unquoted equity shareswhich is in excess of the 60 % limit as per section 186 but Company has been legallyadvised that it is exempt from complying the said section as per 186(11)(a) read with rulewhich provides that a company engaged in the business of financing of companies are exemptfrom section 186 except section 186(1) thus the loans granted by the company to othercompanies do not come under its purview. Besides that as per section 186(b)(ii) company'sinvestments in securities of other companies are also exempt. Therefore if we exclude theloans granted to persons other than companies from the total figures of granted loansthen they amount to Rs. 2913458 which are well within the limit of section 186. Thusthere arises no requirement of taking approval from the members of the company by way ofspecial resolution.
2) Registration as Non-banking Finance Company with Reserve Bank of India :
The company was registered with SEBI having registration no. INB100726335 w.e.f.07.06.1995 under section 12 of SECURITIES AND EXCHANGE BOARD OF INDIAACT and was a stockbroker of Uttar Pradesh Stock Exchange. As the company was carrying on the business ofstock broking and was governed by SEBI thus as per the RBI guidelines it was exempt fromthe applicability of the provisions of section 45 I A of the Act therefore the need ofgetting the company registered with RBI as Non-Banking Finance Company did not arise.However later on the Company surrendered the stock broking and the same became effectivefrom November 2012 thereafter the company decided upon to majorly carry on the securitytrading and investment business on its own account a line of business in which it washaving profound experience and working knowledge for many past years. As the business withwhich the company was going to continue after the above said surrender did not require theregistration as NBFC with RBI thus the company did not apply for the same.
However the company was confident to carry on its security trading business with fullsuccess and extract good amount of revenue from the same and tried its best tosuccessfully undertake it for long term but as this business completely depends upon themarket conditions and prospects it could not envisage the feasible outcomes and revenuesas was aimed by the company. Thus for the time being the Company focused on other areasof work for revenue generation and deployed its funds towards providing loans to persons.Although Company is keeping a close watch on the security market to tap feasible andrevenue generating trading opportunities and is affirmative that it would very soon starttrading in the market. Thus the Company has not gone for registration with RBI as NBFC astill date its sole business is not providing loan to persons. Besides that company is alsoproposing to diversify its trading activities in other fields also.
The Secretarial Auditors of the Company have also made the same observations in theirreport as made by Statutory Auditors and the same has been already explained above.
Your Directors place on record their appreciation for the excellent support trustguidance and cooperation extended & reposed by all its stakeholders employeescustomers Financial Institutions and Banks Statutory & Regulatory Bodies and localauthorities in the Company and look forward to their continued patronage. The Board alsoexpresses its appreciation of the dedicated services provided by the employees of theCompany.
|Place: Kanpur ||For and on Behalf of Board of Directors |
|Dated: 11/08/2016 || || |
| ||(Arun Kejriwal) ||(Vinod Kumar Sharma) |
| ||Managing Director ||Director |