To, The Members,
Your Directors hereby presents their 27th Annual Report on
the business and operations of the Company together with the audited Statements of the
accounts for the year ended on 31st March, 2023.
SUMMARY OF FINANCIAL PERFORMANCE:
(Amount in Lakhs)
|
Year Ended |
Year Ended |
|
31-03-2023 |
31-03-2021 |
| Total Revenue |
9 |
2747.82 |
| Less: Expenses |
5 |
364.76 |
| Profit /(Loss) before Depreciation, Amortization and Tax |
3 |
4 2383.06 |
| Less : Depreciation, Amortization |
5 |
2.55 |
| Profit Before tax |
342.40 |
2380.51 |
| Less : Current Tax |
5 |
- |
| Less : Deferred Tax |
1 |
221.09 |
| Short/(Excess) Provision for tax for earlier years |
2 |
(11.72) |
| Profit/(Loss) After Tax |
1 |
2171.14 |
DIVIDEND
Your Directors have not recommended any dividend.
DIRECTORS? RESPONSIBILITY STATEMENT:
Pursuant to Section 134(5) of the Companies Act, 2013, the Board of
Directors, to be best of their knowledge, confirm that
a) in the preparation of the accounts the applicable accounting
standards have been followed along with proper explanations relating to material
departure; b) appropriate accounting policies have been selected and applied consistently
and have made judgments and estimates that are reasonable and prudent so as to give a true
and fair view of the state of affairs of the Company at the end of the financial year and
of the loss of the Company for that period; c) proper and sufficient care has been taken
for the maintenance of adequate accounting records in accordance with the provisions of
the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities; d) the annual accounts have been prepared on a
going concern basis; e) they have laid down internal financial controls to be followed by
the Company and that such internal financial controls are adequate and were operating
effectively; and f) they have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate and operating
effectively.
MANAGEMENT DISCUSSION AND ANALSYIS
To avoid duplication of certain information in Directors? Report
and Management Discussion & Analysis, the Board of Directors of your Company has
presented the composite summary of performance and functions of the Company.
INDUSTRY STRUCTURE AND DEVELOPMENT
Your Company is Non-banking Finance Company mainly engaged in
investment activities, providing finance against shares and securities and providing
inter-corporate loans. Your Company also provides finance for investment in primary market
issues and mutual fund schemes. Your Company caters to various categories of clients,
namely Retail, NHI, HUFs and Corporate entities. Your Company being a NBFC is strictly
regulated by Reserve Bank of India by its guidelines and notifications.
ECONOMIC OVER VIEW
Indian economy demonstrated resilience throughout the Financial Year
2022-23 even as global macroeconomic environment threw challenges in the form of tight
monetary policy, reduced global demand, and high commodity prices especially crude.
India?s prudent fiscal planning aided in meeting the fiscal deficit target of 6.4% of
GDP in Financial Year 2022-23, moreover a lower Fiscal Deficit target for Financial Year
2023-24 (5.9% of GDP) and record high capex allocation reflected the government?s
strong intent to continue on its fiscal consolidation path, while carefully balancing the
growth requirement of the economy. The uptick in benchmark yields (10 year Gsec) was
marginal (50 bps) even though the repo rates was hiked by 250 bps during this period,
reflecting the confidence of the bond markets in the economy. GST collections have been
consistently clocking above Rs. 1 tn mark since last 21 months, collections reached record
high of Rs.1.6 tn in March, 2023. India?s trade deficit reached as high as USD 29.3bn
in September, 2022 v/s USD 15.9bn avg. during Financial Year 2021-22, which was reduced
significantly by the end of Financial Year 2022-23 (USD 17.4bn in February). The positive
improvement in trade balance was on account of sharp fall in imports v/s exports, decline
in oil prices and resilient services exports helped cushion the Current Account Deficit.
The import cover ratio averaged 9.5 times during this period.
Inspite of war in Ukraine and the staggering inflation, the Indian
equity market had a comparatively stellar year. The government?s focus on
infrastructure development with initiatives like the National Infrastructure Pipeline and
Atmanirbhar Bharat Abhiyan are expected to create opportunities and the GDP is expected to
remain around 6.7% in 2023-24. However, the effects of geo-political tension rising around
the world pose a threat to the economic growth of the Country and clouds of uncertainty
are still hovering around World economic growth.
OPPORTUNITIES, THREATS AND DEVELOPMENTS
India has emerged as the fastest growing major economy in the world and
is expected to be one of the top three economic powers in the world over the next 10-15
years, backed by its robust democracy and strong partnerships. Despite the slowdown in
global economy, lockdown and social distancing norms due to COVID-19 and geopolitical
tensions due to the Russia-Ukraine war, the economic growth of India was ensured by the
government through various financial stimulus packages, announced by the Government of
India and the focus on infrastructural development and implementation of new age
technology in manufacturing and production sector to make India self-reliant. Also,
Production Linked Incentives (PLI) scheme of the government to provide Rs. 2 trillion over
five years to create jobs and boost production in the country shall boost the economy. The
financial stimulus measures and reforms initiated by the Government of India and liquidity
measures by the RBI are expected to support industrial activity and demand. The movement
of various high frequency indicators in recent months, points towards the broad based
resurgence of economic activity.
FUTURE PROSPECTS
The Indian economy is the fastest growing economy in the world,
supported by financial stimulus packages such as Production Linked Incentives, focus on
infrastructural development. These all will augur well for capital market. All the indexes
on stock exchanges are hovering at historic high. Confidence of investors in Indian market
has regained. All these factors point towards a high growth potential for Indian capital
market; both secondary and primary. As a result of which, your Company, which is mainly
engaged in stock financing including IPO financing and investment activities, is looking
forward for a sustainable growth in coming years, which would enhance the
shareholders? value. The Company expects to enhance its entrenched value for the
benefit of the shareholders at large.
RISK AND CONCERNS
The geo-political war in Ukraine, a slowing global economy, tightening
fiscal policy mired with failure of few major players in banking and finance sectors
around the world, may have adverse effect on business confidence and investment.
Uncertainty over the global trade environment and volatility in the financial markets have
softened the global trade and protracted war in Ukraine poses further downside risks to
this forecast. The short-term economic outlook for many European countries has
deteriorated sharply giving headwinds for mild recession. The growth in Asian economies
though stronger than in other regions, with re-opening of China?s economy, is
expected to be bumpy and is likely to remain below the pre-pandemic rate. Countries like
Bangladesh, Pakistan and Sri Lanka have been asking for financial assistance from the
International Monetary Fund (IMF). Since the Indian economy cannot remain in isolation, it
may be impacted by spillover effects, reflecting in rising inflation and further hardening
in interest rate.
REGULATIONS
The Capital Market is regulated by stringent rules and regulations of
the Securities & Exchange Board of India (SEBI) and the stock exchanges. The Company,
being registered with the Reserve Bank of India as Non-Banking Finance Company (NBFC), is
also subjected to strict rules and guidelines notified by the Reserve Bank of India from
time to time. Your Company is committed to the best Corporate Governance practices based
on conscience, openness, fairness, transparency, compliances and ethical practices towards
attaining performance with integrity and accountability thereby paving the way for
enhanced investors? and stakeholders? confidence. Thus, ensuring long term
success.
PERFORMANCE
Total revenue including other operating income for the financial year
ended 31 st March, 2023 was Rs.904.57 lakhs as against Rs.2747.82 lakhs in the
previous year. The sharp reduction in gain on fair value changes effected the revenue.
Interest income was marginally lower compared to previous year whereas dividend income and
fees and commission income were higher. Higher financial cost and higher provision on
account of impairment of financial instruments resulted in higher expenses. The total
expenses for the year under review was Rs.562.17 lakhs as against Rs.367.31 lakhs for the
last year. Due to this, the Company earned a lower pre-tax profit of Rs.342.40 lakhs as
against Rs.2380.51 lakhs a year ago.
Your Directors do not propose to transfer any amount to general
reserve. A sum of Rs.27.29 lakhs is transferred to Statutory Reserve Fund in terms of
Section 45 IC(1) of RBI Act, 1934.
SHARE CAPITAL:
During the year 2022-23 there was no change in share capital. As on 31 st
March, 2023 the issued, subscribed and paid-up capital of your Company was
Rs.10,13,78,250/- divided into 1,01,37,825 Equity Shares of Rs.10/- each.
There was no issue of equity shares with differential rights related to
the dividend, voting or otherwise, and there was no buyback of shares.
MATERIAL CHANGES AND COMMITMENT
There have been no material change and commitment affecting the
financial position of the Company between the end of the financial year to which the
financial statements relate and the date of this report.
SUBSIDIARY:
The Company does not have any subsidiary, joint venture or associate
company.
CONSOLIDATED FINANCIAL STATEMENT
Since the Company does not have any subsidiary company or associate or
joint venture, consolidated financial statements are not prepared.
CORPORATE GOVERNANCE:
A report on Corporate Governance is annexed as Annexure 1 and the same
forms part of this Directors? Report.
LOANS, GUARANTEE AND INVESTMENT:
Particulars of loans and investments made by the Company pursuant to
Section 186 of the Companies Act, 2013 are given in the notes to the Financial Accounts,
which forms part of the Annual Report. The Company has not given any guarantee.
PUBLIC DEPOSIT:
Your Company has not accepted any deposits from the public, its
shareholders or employees during the year under review.
TRANSACTION WITH RELATED PARTIES:
All the transactions with related parties entered into during the
financial year 2022-2023 were on arm?s length basis and also in the ordinary course
of business. Details of all related party transactions are placed before the audit
committee. The policy on related party transactions as approved by the Board of Directors
is placed on the Company?s website.
Since all the transactions with the related parties entered into by the
Company were in ordinary course of business and were on arm?s length basis, Form
AOC-2 is not applicable.
CONSERVATION OF ENERGY, ETC.
Since your Company is not engaged in any manufacturing activity,
information as required under the provisions of Section 143(3)(m) of the Act is not
furnished. During the year under review, the Company neither earned nor spent any foreign
exchange.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
To comply with the requirement of Articles of Association of the
Company and the Companies Act, 2013, Mr. Sandeep P. Shah (DIN: 00368350) shall retire by
rotation in the forthcoming Annual General Meeting and being eligible offers himself for
re-appointment.
Mr. Priyesh Jhaveri and Mrs. Ankita M. Shah resigned on 16th
June, 2023 from the Board as Independent Directors on completion of their tenure. Ms.
Mahita S. Shah resigned from the Board as Director on 22nd August, 2023.
Directors of your Company place on record deep sense of appreciation for esteemed services
and guidance given to the Company during their tenure with the Company.
The Board of Directors had appointed Mr. Kirit B. Rathod (DIN:
10289051) as an Additional Independent Director, effective from 22nd August,
2023. He will be vacating the office at the ensuing Annual General Meeting. The Company
has received notice from its member signifying his intention of proposing appointment of
Mr. Kirit B. Rathod as an Independent Director. Mr. Kirit B. Rathod is Commerce Graduate
(B.Com.) and Diploma Holder in Computer Operation. He has about 14 years? experience
of garment industry. He has worked in various capacity in this industry. Your Directors
recommend passing of the resolution as set-out in the Notice of Annual General Meeting
accompanying this report.
During the year under review, none of the non-executive directors had
any pecuniary relationship or transactions with the Company.
The Company has the following personnel as the Key Managerial Personnel
(KMP) under Section 203 of the Companies Act, 2013:
1. Mr. Sandeep P. Shah, Executive Chairman 2. Mr. Girish Jajoo,
Managing Director 3. Mr. Subhash R. Yadav, Chief Financial Officer 4. Ms. Sarita Jotaniya,
Company Secretary.
Tenure of Mr. Girsih Jajoo as Managing Director shall expire on 31 st
January, 2024. On the basis of recommendation made by the Nomination and Remuneration
Committee, the Board of Directors of your Company has subject to approval of the members
of the Company has re-appointed Mr. Jajoo for an another term of five years. Necessary
resolution proposed to be passed by the members is included in the Notice convening the 27th
Annual General Meeting. Considering long lasting services of the Mr. Jajoo as Managing
Director and growth made under his leadership, the Board of Directors recommends passing
of the resolution.
DISCLOSURE BY INDEPENDENT DIRECTORS
All the Independent Directors have furnished declarations that they
meet the criteria of independence as laid down under Section 149 (6) of the Companies Act,
2013.
The Independent Directors met on 28th March, 2023, without the
attendance of Non-Independent Directors and members of the management. The Independent
Directors reviewed the performance of Non-independent Directors and the Board as a whole;
the performance of the Chairman of the Company took into account the views of Executive
Directors and Non-Executive Directors; it assessed the quality, quantity and timeliness of
information flow between the Company?s management and the Board necessary for the
Board to effectively perform their duties.
BOARD EVALUATION
Pursuant to the provisions of Section 134 (3) of the Companies Act,
2013 and the applicable regulations of the SEBI (Listing Obligations and Disclosure
Requirements), Regulations, 2015, the Independent Directors evaluated the performance of
Non-Independent Directors and Chairperson of the Company after considering the views of
the Executive and Non-Executive Directors, the Board as a whole and assessed the quality,
quantity and timeliness of flow of information between the Company?s management and
the Board. The Nomination and Remuneration Committee evaluated the performance of every
Director. The Independent Directors were regularly updated on the industry and market
trends and the operational performance of the Company through presentations.
AUDIT COMMITTEE
The Committee presently comprises of Ms. Ankita M. Shah and Mr. Priyesh
Jhaveri, both Independent Directors and Mr. Girish Jajoo, Managing Director. All the
members of the Committee are having financial and accounting knowledge. The Committee met
4 times during the financial year 2022-23.
NOMINATION & REMUNERATION COMMITTEE/POLICY
The said Committee presently comprises of Ms. Ankita Shah and Mr.
Priyesh Jhaveri, both Independent Directors and Mr. Sandeep Shah, Director. The Committee
met once during the financial year.
The Nomination and Remuneration Policy recommended by the Nomination
& Remuneration Committee is duly approved and adopted by the Board of Directors. The
said policy is available on the Company?s website viz. www.spsfinqeust.com.
STAKEHOLDER RELATIONSHIP COMMITTEE
The Stakeholder Relationship Committee consists of three members viz.
Ms. Ankita Shah, Chairperson, Mr. Sandeep Shah and Mr. Girish Jajoo as its members. The
Committee mainly looks into redressal of shareholders and investors grievances with
respect to transfer of shares, dematerialization of shares, non-receipt of annual report
or declared dividend, etc. The shareholders grievances committee met once during the year.
During the year ended 31 March, 2023, the Company did not receive any complaint from any
of its members.
BOARD MEETINGS
Six meetings of the Board were held during the year under review. One
meeting of the Independent Directors was also held during the year.
CSR COMMITTEE
The Company?s profit for the financial year ended 31st
March,2022 had crossed the prescribed limit of Rs.500 lacs. Hence, the Board of Directors
in its meeting held on 10th August, 2022 constituted a committee called
‘Corporate Social Responsibility? as required under the provisions of Section
135(1) of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility
Policy) Rules, 2014.
As a part of its initiatives under Corporate Social Responsibility
(CSR), the Company has undertaken projects in the areas of education and rural
development. These projects were undertaken in association with RL Education Sanstha,
Paithan, Maharashtra, and Shree Patan Panjarapole, Patan, Gujarat and are largely in
accordance with Schedule VII of the Companies Act, 2013. The brief outline of the CSR
Policy and the CSR initiatives undertaken by the Company during the financial year under
review are provided in the Annual Report on Corporate Social Responsibility Activities in
Annexure 2 forming part of this report. The policy adopted b y the Company can be viewed
at the website o f the Company v iz. www.spsfinquest.co.in
INTERNAL CONTROL SYSTEM
Adequate internal control systems are in place to maintain quality of
product, proper accounting as per norms and standards prescribed, asset maintenance and
its proper use. The Company has an independent internal auditor, who periodically reviews
the accounts and reports to the Audit Committee.
RISK MANAGEMENT
The management continuously access the risk involved in the business
and all out efforts are made to mitigate the risk with appropriate action. All the assets
of the Company are adequately covered by comprehensive insurance.
EMPLOYEE:
The Company had ten employees during the year under review.
Information required under Section 197(12) of the Companies Act, 2013
read with Rule 5 of the Companies (Appointment and Remuneration of Management Personnel)
Rule, 2014, and forming part of Directors? Report for the year ended 31st March, 2023
is given in a separate annexure III to this report.
The information relating to top ten employees in terms of remuneration
will be provided to any Shareholder on a written request to the Company Secretary. In
terms of Section 136 of the Act, the said report will be available for inspection of the
Members at the registered office of the Company during the business hours on all working
days of the Company upto the date of Annual General Meeting and through electronic mode.
STATUTORY AUDITORS
According to Directors, there is no adverse remarks made by Statutory
Auditors in their report. Notes to the accounts are self-explanatory to
comments/observation made by the auditors in their report. Hence, no separate explanation
is given.
M/s. Shah & Savla LLP Chartered Accountants, Statutory Auditors of
your Company, (FRN 109364W/W100143) were appointed as Statutory Auditors by the members of
the Company in their 26th Annual General Meeting held on 28th
September, 2022 for consecutive term of three years.
INTERNAL AUDITORS
The Internal Auditors, Mrs. Bhavna Pandya, Chartered Accountant, are
the internal auditors of the Company, who plays an important role in strengthening the
internal control. The Internal Auditors reports to the Audit Committee.
SECRETARIAL AUDIT
During the year, Secretarial Audit was carried out by Mr. Upendra
Shukla, Practicing Company Secretary, for the financial year 2022-23. The report on the
Secretarial Audit is appended as Annexure 4 to this report. According to the Board of
Directors the report does not have any adverse remark.
COST AUDIT
Provisions relating to cost audit is not applicable to your Company.
ANNUAL RETURN
Pursuant to the provisions of Section 92(3) and Section 134 (3)(a) of
the Companies Act, 2013 a copy of the Annual Return of the Company for the year ended 31st
March, 2022 is placed on the website of the Company at www.spsfinquest.co.in.
DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS
OR COURTS OR TRIBUNAL
No such order was passed by any of the authorities, which impacts the
going concern status and company?s operations in future.
VIGIL MECHANASIM
The Company has a vigil mechanism policy to deal with instances of
fraud and mismanagement. The whistle blower policy is adopted by the Board of Directors
and is hosted on the website of the Company.
FRAUD REPORTING
During the year, no fraud whether actual, suspected or alleged was
reported to the Board of Directors.
PREVENTION OF SEXUAL HARRASSMENT AT WORKPLACE
The Company has in place an anti-Sexual Harassment Policy in line with
the requirement of the Prevention of Sexual Harassment of Women at Workplace (Prohibition,
Prevention and Redressal) Act, 2013. Internal complaints committee (ICC) has been set-up
to redress complaints received regarding sexual harassment during the year 2022-23 under
review.
The Company has not received any complaint of sexual harassment during
the year 2022-23.
CAUTIONARY STATEMENT
Statements in the Annual Report, particularly those which relate to
Management Discussion and Analysis may constitute forward looking statements within the
meaning of applicable laws and regulations. Although the expectations are based on the
reasonable assumption, the actual results might differ.
ACKNOWLEDGEMENT
Your Directors places on record their deep sense of appreciation to the
Company?s Bankers, clients and all employees for their unstinted support. Your
directors also wish to thank the shareholders for confidence reposed in the management of
the Company.
|
For and on behalf of the Board |
|
Sd/- |
| Mumbai, |
(SANDEEP P. SHAH) |
| 04th August, 2023 |
CHAIRMAN |
|
(DIN: 00368350) |
+91-9892691696
