Joindre Capital Services Ltd Directors Report.

To

The Members,

The Board of Directors are pleased to present herewith the Twenty-fourth Annual Report of your Company together with the Audited Financial Statements for the financial year ended 31st March, 2019. The Management Discussion and Analysis has also been incorporated into this report.

1. FINANCIAL RESULTS

(Rs In Lakhs)
Particulars Year Ended 31st March, 2019 Year Ended 31st March, 2018
Gross Total Income 2590.48 3200.26
Expenditure 1970.77 2446.95
Finance Cost 38.41 40.31
Gross Profit ( Loss ) 581.30 713.00
Depreciation 20.14 8.72
Profit / (Loss) Before Tax 561.16 704.28
Tax Expenses
Current 112.10 137.25
MAT credit entitlement (19.35) (28.95)
Deferred (2.95) 0.34
Provision for Earlier Year 1.48 -
Net Profit (Loss) after Tax 469.88 595.64
Balance B//f from last Year 4250.05 3654.41
Appropriations:
Proposed Dividend * (103.77) -
Tax on Equity Dividend * (21.33) -
Balance c/f to the Balance Sheet 4594.83 4250.05

* Please refer note No. 3 - Dividend

2. OVERVIEW OF FINANCIAL PERFORMANCE

The Company has a Trading-cum-Clearing Membership of BSE Ltd and National Stock Exchange of India Ltd in their Cash and Derivative segment and Trading Member of Metropolitan Stock Exchange Ltd in Currency Derivatives and providing Capital Market services through the network of branches and authorised persons.

The Company is also a Depository Participant of Central Depository Services (I) Ltd and providing the depository services to the Clients.

Total Income for the year decreased to Rs 2590.48. lakhs as compared to Rs. 3200.26 lakhs last year. Total profit before tax for the year was Rs. 561.16 lakhs as against Rs. 704.28 lakhs last year and the net profit after tax was Rs. 469.88 lakhs as against Rs. 595.64 lakhs last year.

M/s. Joindre Commodities Ltd., a subsidiary of the Company, is providing services for trading in commodity futures as a members of National Commodity & Derivatives Exchange Limited and Multi Commodity Exchange of India Ltd.

3. DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 0.75 per Equity Share of Rs. 10/- each (previous year Rs. 0.75). The total outgo for the current year amounts to Rs. 125.10 lakhs including dividend distribution tax of Rs. 21.33 lakhs (previous year Rs. 125.10 lakhs including dividend distribution tax of Rs. 21.33 lakhs).

Pending approval of the shareholders for proposed dividend for the year 2018-19, the same is not recognized in financial statements of the current financial year. In this connection please refer to note No. 24-(b) on financial statements for the year ended 31st March 2019.

4. APPLICABILITY OF INDIAN ACCOUNTING STANDARDS

The Ministry of Corporate Affairs has notified Indian Accounting Standards (Ind-AS) vide its notification dated 16th February, 2015. Further, the Ministry of Corporate Affairs has amended the Companies (Indian Accounting Standards) Rule, 2015 vide its Notification No. G.S.R. 365 (E) dated 30th March, 2016. As per the said notification, the Companies (Indian Accounting Standards) (Amendment) Rule, 2016 has defined the NBFC Company. As per the said definition, the Stock Broker / Sub-broker companies are included in the definition of NBFC Company. As per Rule 4 (iv) (b) of the said rules, the Ind-AS will be applicable to your Company w.e.f. 01st April, 2019.

5. PORTFOLIO MANAGER SERVICES

During the year under review, the Company has started offering Portfolio Manager Services (PMS) to its Clients.

6. SHARE CAPITAL

The paid up Equity Share Capital as on 31st March, 2019 was Rs. 1383.64 Lakhs. During the year under review, the Company has not issued any shares with differential voting rights nor granted stock options nor sweat equity. As on 31st March, 2019, the Directors of the Company hold the Equity Shares of the Company as follows:

Name of the Director Number of Shares % of Total Capital
Mr. Anil Mutha Whole Time Director 1771000 12.80
Mr. Dinesh Khandelwal Whole Time Director 771600 5.58
Mr. Paras Bathia Whole Time Director 1266850 9.16
Mr. Subhash Agarwal Whole Time Director 565450 4.09
Mr. Sunil Jain Whole Time Director 470160 3.40
Mr. Sanjay Jain Independent Director 3600 0.03
Mr. Ramavtar Badaya Independent Director Nil NA
Mr. Ravi Jain Independent Director Nil NA
Mrs. Sonali Chaudhary Independent Director Nil NA
Mr. Veepin Thokal Independent Director 1000 0.00

7. FINANCE

Cash and cash equivalent as at 31st March, 2019 was Rs. 4548.81 lakhs. The Company continues to focus on judicious management of its Working Capital. Receivables, Inventories and other Working Capital parameters were kept under strict check through continuous monitoring.

8. 8.1 DEPOSITS

The Company has not accepted deposit falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

8.2 PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

8.3 TRANSFER TO RESERVES

The Board do not propose to transfer any amount to General Reserve or any other Reserves.

9. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The criteria prescribed for the applicability of Corporate Social Responsibility under Section 135 of the Companies Act, 2013 is not applicable to the Company.

10. BUSINESS RISK MANAGEMENT

The main activities of the Company is retail stock broking through the network of branches and, authorised persons. The Compliance Department ensures that various existing policies regarding registration of clients, risks relating to client level, dealing in penny stocks, exposure limit, brokerage rates, suspending/ closure of clients account etc. are in place in compliance with the Exchange Rules and Regulations so that business risk is minimised and there are no penal action by the Regulatory Authorities. The Company has taken adequate measures to secure interest of the clients. The Trader Terminal provided to the client, offer on line real time data such as ledger balance of stock and funds position etc. Company transfers clients funds and securities to their designated bank and demat account and all receipt and payment from/ to clients are through account payee cheque only and no cash payment/acceptance is permitted. Your Companys risk management system comprises of prudential norms, timely reporting and stringent controls. The various policies of the company, internal control systems ensures operational efficiency and mitigate risk. Technology is an integral part of the Companys business operations and hence to mitigate the risk to technology failure, your company has taken up steps like use of sophisticated firewalls to protect the IT infrastructure from hacking/data leakage and security breaches, multiple options for internet bandwidth and internet connectivity. The Client level risk in broking operations is managed through system.

Risks Management Committee: Though under Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, it is not mandatory for the Company to constitute Risks Management Committee, however, the Company has formed the Risks Management Committee. In the board meeting there is a formal discussion on identifying risk to the business and how to mitigate the same. The Board periodically reviews the companys financial and risk management policies, systems and framework and ensures that risk is minimised.

11. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Financial Control System, commensurate with the nature of business, size, scale of its operations. The Company monitors and evaluates the efficacy and adequacy of internal financial control system, its compliance with operating systems, accounting procedures and other policies of the Company. Based on the report of Statutory Auditors as well as periodic internal audit function carried out by a firm of Chartered Accountant, corrective action in the respective areas is taken thereby strengthen the financial controls. The significant audit observations and corrective actions thereon are presented to the Audit Committee and the Board periodically. Also there is a full fledged Compliance Department to ensure statutory compliances.

12. VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has a vigil mechanism through a Whistle Blower Policy for Employees to deal with instance of fraud and mismanagement, if any. The details of the Whistle Blower Policy is explained in the Corporate Governance Report.

13. SUBSIDIARY COMPANY

The Company has one Wholly Owned Subsidiary Company, M/s. Joindre Commodities Ltd (JCL). The salient features of financial statement of the Subsidiary, pursuant to the first proviso to sub-section 3 of section 129 read with rule 5 of the Companies (Accounts) Rule 2014, in the Form AOC-1 is given below:

(Rs in Lakhs)
Sr.No Particulars Joindre Commodities Ltd
1 Reporting Period April 2018 to March 2019
2 Reporting Currency Rupees
3 Country India
4 Exchange Rate NA.
5 Share Capital 75.00
6 Reserves and Surplus 50.22
7 Total Assets 140.28
8 Total Liabilities 140.28
9 Investment other than Investment in subsidiary 0
10 Turnover 10.52
11 Profit before taxation 1.24
12 Provision for Taxation 0.25
13 Profit after taxation 0.99
14 Proposed Dividend Nil

14. DIRECTORS/KEY MANAGERIAL PERSONS

Mr. Anil Mutha (DIN 00051924), and Mr. Subhash Agarwal (DIN 00022127), Whole Time Directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Mr. Ravi Jain, Mrs. Sonali Chaudhary and Mr. Veepin Thokal were appointed as Independent Directors at the Annual General Meeting held on 20-09-2014 for a term of five consecutive years. These Independent Directors shall be completing their first term of appointment on conclusion of the 24th Annual General Meeting and are eligible for re-appointment for another term of five consecutive years subject to approval of the members. They have consented to their re-appointment and confirm that they are not disqualified and meet the criteria of independence to act as Independent Directors. Based on the performance evaluation, the Nomination and Remuneration Committee and the Board has recommended their re-appointment for a second term of five years from the conclusion of 24th Annual General Meeting of the Company, not liable to retire by rotation, and in respect of whom notice has been received from members proposing their candidature as Director.

Mr. Sanjay Jain was appointed as an Additional Director in the capacity as Independent Director by the Board at its meeting held on 30-11-2018, and he holds the office upto the date of the Annual General Meeting.

The Company has received a notice as required under Section 160 of the Companies Act, 2013 (the Act) from a member proposing Mr. Sanjay Jain for his appointment as Director/Independent Director of the Company. Mr. Sanjay Jain has given a declaration to the Board that he meets the criteria of independence as provided under Section 149(6) of the Act. Mr. Sanjay Jain qualifies to be an Independent Director pursuant to section 149(6) and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015., and if appointed shall hold office of Independent Director for a term of 5 (five) years from the conclusion of 24th Annual General Meeting.

14.1 PERFORMANCE EVALUATION OF BOARD AND ITS COMMITTEES

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit Committee, Nomination and Remuneration Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

14.2 REMUNERATION POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.

14.3 MEETINGS

A calendar of Meetings is prepared and circulated in advance to the Directors.

During the year four Board Meetings and four Audit Committee Meetings were convened and held. The details of Board Meetings and various Committee Meetings are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013/SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

14.4 FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTOR

The Company keeps its Directors informed of the activities of the Company, its management and provides overall capital market perspective and the issues faced by the market. The details of familiarization programme is explained in the Corporate Governance Report and are also available on the Companys website under the head Investor Relations

15. DIRECTORS RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

a) that in the preparation of the annual financial statements for the year ended 31st March, 2019, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) that such accounting policies have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2019 and of the profit of the Company for the year ended on that date;

c) that 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) that the annual financial statements have been prepared on a going concern basis;

e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

16. RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on an arms length basis and in the ordinary course of business. There are no materially significant related party transactions i.e. transactions exceeding ten per cent of annual consolidated turnover as per the last audited financial statements were entered by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. Accordingly the disclosure of related party transactions as required under Section 134(3) (h) of the Companies Act, 2013 in form AOC-2 is not applicable.

All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on yearly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are at arms length and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Companys website. The policy ensures that proper reporting, approval and disclosure process are in place for all transactions between the Company and the related parties.

17. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations.

18. AUDITORS

18.1 STATUTORY AUDITORS

The members of the Company at the 22nd Annual General Meeting of the Company held on 9-9-2017 had approved the appointment of M/s. Jigna Sheth & Associates, Chartered Accountants, as the auditors of the Company for a term of 5 years till the conclusion of 27th Annual General Meeting to be held in the year 2022. However, M/s. Jigna Sheth & Associates have intimated to the Company their unwillingness/ inability to continue as the Auditors of the Company, for the year 2019-20, after the conclusion of ensuing 24th Annual General Meeting of the company, due to their preoccupation with other engagements. The Board placed on records its appreciation for the services rendered by M/s. Jigna Sheth & Associates as the Statutory Auditors of the Company.

On the recommendations of the Audit Committee and the confirmation received from M/s. S. Rakhecha & Co., Chartered Accountants, (Firm Registration No. 108490W) regarding their eligibility, the Board recommended the appointment of M/s. S. Rakhecha & Co as the Statutory Auditors of the Company, pursuant to Section 139 of the Companies Act, 2013. The resolution is included at item No. 5 of the notice convening the Annual General Meeting.

The notes on the financial statement referred to in the Auditors Report are self explanatory and do not call for any further comments. The Auditors Report does not contain any qualification, reservations or adverse remark.

18.2 SECRETARIAL AUDIT

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 has appointed M/s. .P. P. Shah & Co., Practicing Company Secretaries to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as Annexure A. The Secretarial Audit Report does not contain any qualification, reservations or adverse remark.

19. COMPLIANCE OF SECRETARIAL STANDARDS

During the year under review, your Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

20. CORPORATE GOVERNANCE

The Corporate governance practices followed by the Company, together with a certificate from the Secretarial Auditors confirming compliance of the same, forms an integral part of this Report.

21. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The Company has been taking all the possible measures to conserve the energy and use and adopt best technology available in the market.

I) Energy Conservation:

In order to conserve the energy the Company has taken the following steps:

a) replacement of old computers and office equipments with power savings devices as and when required.

b) Switching of lights when not required.

c) Minimizing usage of Air conditioners

II) Technology absorption:

The Company has full-fledged IT Department which keeps abreast of technological advancement and try and adopt the same for day to day operations.

The Company offers user friendly trading terminals and trading platforms to its clients. The Company has in place Wide Area Networking, high breed lease lines, use of Vsats in remote areas, Risk Management software etc..

III) There is no Foreign Exchange earnings and outgo during the year

22. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as Annexure B

23. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The information relating to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as Annexure C

The information required pursuant to Section 197 read with Rule, 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, are not applicable to the Company as no Employee of the Company is in receipt of remuneration of Rs. 60,00,000/- p.a. or Rs. 5,00,000/- p.m.

24. CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company prepared in accordance with relevant Accounting Standards issued by the Institute of Chartered Accountants of India form part of this Annual Report.

25. LISTING OF SHARES

The Companys shares are listed on BSE Ltd., Mumbai and the Company has paid the Listing Fees for the same.

26. CAUTIONARY STATEMENT

Statements in the Board of Directors Report and the Management Discussion & Analysis describing the Companys objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include global economy, government regulations, tax laws, economic developments within the country and market sentiment.

27. INDUSTRY STRUCTURE AND DEVELOPMENTS

The main activity of the Company is retail broking through network of branches, and authorized persons. The internet based trading facilities offered by the company is popular and widely used by the clients and viewers. The Company offers Research Report and financial updates to Individual Clients. The Company is also rendering Depository Services to its clients.

28. OPPORTUNITIES AND THREATS

The expectation of normal monsoon, coupled with Governments continued reforms will help the revival of the economy and the Capital Market. However, due to US China Trade War; Lukewarm Corporate earnings; Liquidity squeeze in NBFC, may have an adverse impact on the inflow of capital.

29. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

The Company has been rendering Capital Market Services and hence there is no separate segment reporting.

30. ANALYSIS OF FINANCIAL PERFORMANCE

Particulars FY 2018-2019 FY 2017-2018 Differe- nce (%)
(i) Debtor Turnover Ratio
Total Sales 179,107,781 242,561,969
Debtors 84,098,460 92,254,918
Ratio & Percentage 2.13 2.63 -0.50
(ii) Inventory Turnover Ratio
Total Sales 0 0
Average inventory 0 0
Ratio & Percentage 0 0 0.00
(iii) Interest Coverage ratio
Profit before interest and tax 58,399,049 72,772,331
Interest Expense 2,282,778 2,344,422
Ratio & Percentage 25.58 31.04 -5.46
(iv) Current Ratio
Current Asset 550,043,427 566,661,635
Current Liabilities 267,520,286 261,179,048
Ratio & Percentage 2.06 2.17 -0.11
(v) Debt Equity Ratio
Total Liability 267,830,186 261,784,248
Shareholders funds 602,847,585 568,370,042
Ratio & Percentage 0.44 0.46 -0.02
(vi) Operating Profit Margin
Operating Profit 62,841,651 80,202,510
Revenue 179,107,781 242,561,969
Ratio & Percentage 35.09 33.06 2.02
(vii) Net Profit Margin
Net Profit 46,988,299 59,564,309
Revenue 179,107,781 242,561,969
Ratio & Percentage 26.23 24.56 1.68
(viii) Return on Net Worth
Profit after Tax 46,988,299 59,564,309
Networth 602,847,585 568,370,042
Ratio & Percentage 7.79 10.48 -2.69
Working Operating Profit FY FY
2018-2019 2017-2018
Revenue 179,107,781 242,561,969
Less: Beokerage Paid 100,465,563 142,963,837
Less: DP charges 3,425,137 4,763,543
Clearing charges 12,375,430 14,632,079
Net Operating Profit 62,841,651 80,202,510

31. OUTLOOK

From April 2018 onwards till September 2018, the Sensex was moving upward and crossed the level of 38000. However, from the month of October 2018, the Capital Market witnessed a sharp correction on account of liquidity crisis led by the Non-banking Finance Companies. The impact of this was so severe that there was a crash in mid and small cap stocks.

During the current year, continued optimism that the Government could push through measures to revive the Economy, the Sensex had touched an all time high of 40,000 in May 2019. However, the recent US and China trade tariff war has created volatility in the Global Market and hurt the World Economy. Furthermore, the lukewarm Corporate earnings has created a fear of uncertainties in the Capital Market. However, we expect that the Governments continued reforms and budgetary support will help the revival of economy. We further expect that investor sentiment to turn positive and volume to pick from the festive season from September 2019.

32. HUMAN RESOURCES

Your company has been able to employ and retain qualified professionals by offering the challenging work environment and compensation. The Company provides in house training to its employees. There were 78 employees as at 31-3-2019.

33. FORWARD LOOKING STATEMENT

The Statements made in this report describe the Companys objectives and projections that may be forward looking statements which are based on certain assumptions and expectations of future events. The Companys actual results, may differ materially from those projected in any such forward looking statements depending on economic conditions, government policies and decisions which are beyond the control of the Company.

34. SEXUAL HARASSMENT OF WOMEN AT WORK PLACE

As required under the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has formed a Committee and also adopted policy on prevention and redressal of grievance relating to sexual harassment of women at work place. There were nil complaints pending/received on sexual harassment during the year under review.

35. ACKNOWLEDGMENT

The Board wishes to place on records its appreciation to all its Shareholders, Customers, Bankers, Stock Exchange Authorities and Employees for the cooperation and contributions made by them at all levels.

By Order of the Board
Anil Mehta Subhash Agarwal
(Whole Time Director) (Whole Time Director)
Place : Mumbai
Date : May 29, 2019
Registered Office:
32 Raja Bahadur Mansion,
Ground Floor,
Opp. Bank of Maharashtra,
Mumbai Samachar Marg,
Fort, Mumbai - 400 023.