madhusudan securities ltd share price Directors report


To,

The Members,

Madhusudan Securities Limited

Your directors have the pleasure of presenting the 40th Annual Report on the business and operations of the company along with the Audited Financial Statement of Accounts for the year ended March 31, 2023.

1. FINANCIAL RESULT (STANDALONE):

Particulars

Current year 2022 – 2023 Previous year 2021 – 2022
Rs. Rs.
Total Revenue 3,81,216 2,00,116
Total Expense 17,43,099 11,47,156

Profit/ (Loss) before tax

(13,61,883) (9,47,040)
Tax expense - -

Profit/ (Loss) for the year

(13,61,883) (9,47,040)

Other Comprehensive Income

11,93,698 97,391

Total Profit for the Year

(1,68,185) (8,49,649)
Earnings per share (0.02) (0.10)

2. DIVIDEND:

Due to losses incurred during the year by the Company, the Board regrets its inability to recommend any dividend to strengthen the companys financial resources.

3. OPERATIONS AND FUTURE PROSPECTS:

During the year under review, the Management has carried out investment activities and earned capital gain on the sale of investments. Further, The Management is looking forward to better business avenues Hence, it has suffered losses due to statutory compliance expenses & administrative expenses incurred by the Company. The net loss the Company suffered is Rs. 13.62 Lakhs.

The 61,42,847 equity Shares of Rs. 10/- each were issued as part consideration other than cash to Primus Retail Pvt. Ltd. pursuant to Business Transfer Agreement (BTA) dated 04/02/2011 for transfer of its Brand & Business. However, Karnataka High Court has declined Primus Retail Pvt. Ltd. to transfer the Brand & Business. Hence, due to the non-performance by Primus Retail Pvt. Ltd. of their obligation, BTA Agreement stands cancelled. Therefore, equity shares issued in lieu of BTA stand null and void by the Board of Directors and consequently, the said shares have been revoked/forfeited (to be reissued) by the Company pending statutory approvals from the appropriate authorities.

Further, the application for forfeiture was rejected by SEBI and hence, the equity shares balance and the securities premium thereon have been restated to the original amount.

The Company had paid Rs. 12 Crores to Primus Retail (P) Ltd. pursuant to the BTA and Shares were issued for consideration other than cash prior to the transfer of Brand & Business assets. However, Primus Retail Pvt. Ltd. could not honor the Agreement due to a Court order. Therefore, the amount of Rs. 12 Crores paid for the contract stands recoverable which is treated as an Advance to be recovered in cash or kind.

The Primus Retail P. L. has been declared under liquidation, hence, the advance of Rs. 12 Crores has become doubtful in nature. No provision of doubtful advances is made in the books of accounts since Management is putting efforts for recovery or settlement with the concerned persons on account of the liquidation of Primus Retail Pvt. Ltd.

The Directors are looking forward to better Professional avenues and Investment opportunities for the company. Barring unforeseen circumstances, your directors hope to have better performance in the following year.

4. NUMBER OF MEETINGS OF THE BOARD:

The Board of Directors has conducted quarterly Board Meetings during the Financial Year 2022 – 2023 on various dates namely:

I. May 30, 2022

II. August 13, 2022,

III. September 15, 2022

IV. November 14, 2022,

V. February 09, 2023

5. EQUITY SHARE CAPITAL:

The Equity Share Capital as on March 31, 2023, is Rs. 8,69,54,870/-.

6. ITS PROMOTERS, DIRECTORS, AND KEY MANAGERIAL PERSONNEL ALONG WITH CHANGES THEREIN SINCE THE CLOSE OF THE PREVIOUS FINANCIAL YEAR:

Name of the Director

Position Changes (Appointment/ Resignation)
Mr. Salim Govani Promoter No Change
Mrs. Sausan Bukhari Woman Director & CFO No Change
Mr. Harsh Javeri Independent Director No Change
Mr. Abhilash Padmanabh Kamti Independent Director Resigned on 09-02-2023
Ms. Nidhi Saraf Company Secretary Appointed on 09-02-2022
Ms. Nidhi Saraf Company Secretary Resigned on 09-08-2022
Ms. Bhakti Aghera Company Secretary Appointed on 15-09-2022
Ms. Bhakti Aghera Company Secretary Resigned on 09-02-2023

7. MEETING OF MEMBERS OR A CLASS THEREOF, BOARD AND ANNUAL GENERAL MEETING ALONG WITH ATTENDANCE DETAILS:

Name of the Director

Position as on 31/03/2022 Date of Appointment / Resignation Attendance at No. of Directorship(s ) in Other Companies No. of Members hip(s) in Board Committees of Other Companies
Board Meeting Last AGM
Mr. Salim Govani Promoter Appointment on 21/04/15 5 Yes 13 -
Mrs. Sausan Bukhari Director Appointment on 21/04/15 5 Yes 3 -
Mr. Harsh Javeri Independent Director Appointment on 30/05/13 5 Yes 3 -
Mr. Abhilash Padmanabh Kamti Independent Director Appointed on 27/01/20 3 Yes 5 -

8. BOARD COMMITTEES:

Details of the Board Committees and Other related information are provided hereunder:

Audit Committee

Name of the Members

Composition and Category Designation Total Meetings Attended
Mr. Harsh Javeri Non-Executive/Independent Director Chairman 5
Mr. Abhilash Kamti Non-Executive / Independent Director Member 3
Mr. Salim Govani Promoter Director Member 5

Shareholders / Investors Grievance Committee

Name of the Members

Composition and Category Designation Total Meetings Attended
Mrs. Sausan Bukhari Director Chairperson 4
Mr. Salim Govani Promoter Director Member 4
Mr. Harsh Javeri Non-Executive / Independent Director Member 4

Management Remuneration Committee

Name of the Members

Composition and Category Designation Total Meeting Attended
Mr. Abhilash P Kamti Non-Executive/Independent Director Chairperson 1
Mr. Harsh Javeri Non-Executive/Independent Director Member 1
Mrs. Sausan Bukhari Director Member 1

In accordance with the Companies Act 2013 and the rules prescribed there under, the Company is not required to constitute the following Board Committees being no remuneration to KMP and profit:

(I) Stakeholders Remuneration Committee and

(II) Corporate Social Responsibility Committee.

9. DIRECTORS RESPONSIBILITY STATEMENT:

As per section 134 (3) (c) of the Companies Act 2013

i. That in the preparation of the annual accounts for the financial year ended March 31, 2023, the applicable accounting standards have been followed, along with proper explanation relating to material departures;

ii. That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent to maintain the matching revenue concept, 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 for that period;

iii. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records, in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv. That the annual accounts for the financial year ended March 31, 2023, are prepared on a ‘going concern basis;

v. That proper internal financial controls were in place and the financial controls were adequate and operating effectively;

vi. That systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

10. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY:

During the year under review, there was no material change and commitments which affects financial position of the Company.

11. CHANGE IN THE NATURE OF BUSINESS OF THE COMPANY:

During the year under review there was no change in the nature of business of the company.

12. PUBLIC DEPOSITS:

During the financial year under review, the Company has not accepted or renewed any deposits from public within the meaning of Sections 73 and 76 of the Companies Act, 2013 ("Act") read with the Companies (Acceptance of Deposits) Rules, 2014.

13. SUBIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES:

The Company does not have any subsidiary/joint venture/ associate. Accordingly, there were no companies which have become or ceased to be its subsidiaries, joint ventures or associate companies during the year.

14. LISTING:

The Equity Shares of the Company are listed on BSE Limited (BSE). The Company has paid the requisite listing fees to the said Stock Exchanges for the financial year 2022-2023.

15. ANNUAL RETURN;

As required under Section 92(3) read with 134(3)(a) of the Act, the copy of Annual Return as on 31st March, 2023 will be placed on the Companys website and can be accessed at https://mslsecurities.com/.

16. DIRECTORS AND KEY MANAGEMENT PERSONNEL:

a) Retirement by rotation

In accordance with the provisions of Section 152(6) of the Act read with the Companies (Management and Administration) Rules, 2014 and the Articles of Association of the Company, Mr. Salim Pyarali Govani (DIN: 00364026), Director of the Company, retires by rotation at the ensuing 40th Annual General Meeting ("AGM") and being eligible, has offered herself for re-appointment and your Board recommends her reappointment.

b) Declaration from Independent Directors

The Company has received the necessary declaration from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations and pursuant to Regulation 25 of the said Regulations that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence. The Independent Directors have also confirmed that they have complied with Schedule IV of the Act and the Companys Code of Conduct.

Further, the Independent Directors have also submitted their declaration in compliance with the provisions of Rule 6(3) of the Companies (Appointment and Qualifications of Directors) Rules, 2014, which mandates the inclusion of an Independent Directors name in the data bank of the Indian Institute of Corporate Affairs ("IICA").

None of the directors of your Company are disqualified under the provisions of Section 164(2) of the Act. Your directors have made necessary disclosures, as required under various provisions of the Act and the Listing Regulations and in the opinion of the Board, all the Independent Directors are persons of integrity and possesses relevant expertise and experience and are independent of the management.

c) Annual evaluation of performance by the Board:

In terms of applicable provisions read with Schedule IV of the Act and Rules framed thereunder and Regulation 17 read with Part D of Schedule II of the Listing Regulations the Board of Directors has put in place a process to formally evaluate the effectiveness of the Board along with performance evaluation of each director to be carried out on an annual basis.

Pursuant to the provisions of the Act and the Listing Regulations the evaluation of the Board and its performance, the directors individually and the working of its Audit Committee, Stakeholders Relationship Committee, Nomination and Remuneration Committee and Corporate Social Responsibility Committee including the Chairman of the Company was carried out by the Board. The Board has evaluated the performance of each of Executive, Non-Executive and Independent Directors considering the business of the Company and the expectations that the Board has from each of them.

The evaluation framework for assessing the performance of directors comprises of the following key areas:

i. Attendance of Board Meetings and Committee Meetings;

ii. Quality of contribution to Board deliberations;

iii. Strategic perspectives or inputs regarding future growth of Company and its performance; and

iv. Providing perspectives and feedback going beyond information provided by the management.

17. SEPARATE MEETING OF INDEPENDENT DIRECTORS:

As stipulated by the Code of Independent Directors under Schedule IV of the Act, a separate meeting of the Independent Directors of the Company was held without presence of Non-Independent Directors and members of the management to consider the following:

i. performance of Non-Independent Directors and the Board as a whole;

ii. performance of the Chairman of the Company, taking into account the views of executive directors and non executive directors; and

iii. assessing the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties. The Independent Directors expressed satisfaction on the performance of Non-Independent Directors and the Board as a whole. The Independent Directors were also satisfied with the quality, quantity and timeliness of flow of information between the Company management and the Board.

18. INDEPENDENT DIRECTORS FAMILIARISATION PROGRAMME:

The Company undertakes and makes necessary provisions for appropriate induction programme for new directors and ongoing training for existing directors. The new directors are introduced to the Companys culture, through appropriate training programmes. Such kind of training programmes helps in developing relationship of the directors with the Company and familiarize them with the Company processes. The management provides such information and training either at the meeting of Board of Directors or otherwise. The induction process is designed to: build an understanding of the Companys processes and fully equip directors to perform their role on the Board effectively. Upon appointment, directors receive a letter of appointment setting out in detail, the terms of appointment, duties, responsibilities and expected time commitments.

19. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

Pursuance to the provisions of Section 177 of the Act, the Company has adopted Vigil Mechanism / Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. The Company promotes ethical behaviour in all its business activities and has adopted a mechanism of reporting illegal or unethical behaviour.

The Company has a whistle blower policy wherein the directors and employees are free to report violations of laws, rules, regulations or unethical conduct to their immediate supervisor or such other person as may be notified by the management to the directors and employees / workers. The mechanism also provides for adequate safeguards against victimization of directors and employees who avail of the mechanism and also provide for direct access to the Chairperson of the Audit Committee in the exceptional cases. The confidentiality of those reporting violation is maintained, and they are not subjected to any discriminatory practice. However, no violation of laws or unethical conduct etc. was brought to the notice of the Management or Audit Committee during the financial year under review. We affirm that during the financial year under review, no director or employee was denied access to the Audit Committee. The details of the Vigil mechanism / Whistle Blower Policy is available on the website of the Company viz. https://mslsecurities.com/.

20. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT:

The Company has not made any investment either by loans/ guarantees/ any other form through more than two layers of investment companies.

21. RELATED PARTIES TRANSACTION:

All Related Party Transactions entered during the year were in Ordinary Course of the Business and on Arms Length basis. Material Related Party Transactions were entered during the year by your Company. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) of the Companies Act, 2013 in Form AOC-2 as Annexure – II.

22. PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: Pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, details regarding Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo for the year under review are as follows:

A. Conservation of Energy: a. Steps taken or impact on conservation of energy – The Operations of the Company do not consume energy intensively. However, Company continues to implement prudent practices for saving electricity and other energy resources in day-to-day activities. b. Steps taken by the Company for utilizing alternate sources of energy – Though the activities undertaken by the Company are not energy intensive, the Company shall explore alternative sources of energy, as and when the necessity arises. c. The capital investment on energy conservation equipment – NIL

B. Technology Absorption: a. The efforts made towards technology absorption – The Company continues to take prudential measures in respect of technology absorption, adaptation and take innovative steps to use the scarce resources effectively. b. The benefits derived like product improvement, cost reduction, product development or import substitution – Not Applicable c. In case of imported technology (imported during the last three years reckoned from the beginning of the financial year) – Not Applicable d. The expenditure incurred on Research and Development - Not Applicable

C. Foreign Exchange Inflow / Outgo:

Particulars

2022-23 2021-22
Foreign Exchange earned NIL NIL
Foreign Exchange used NIL NIL

23. COMPLIANCE WITH SECRETARIAL STANDARDS:

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and your directors confirm compliance of the same during the financial year under review.

24. INTERNAL FINANCIAL CONTROLS:

The Company has in place proper and adequate internal control systems commensurate with the nature of its business, size and complexity of its business operations. Internal control systems comprising of policies and procedures are designed to ensure reliability of financial reporting, compliance with policies, procedures, applicable laws and regulations and that all assets and resources are acquired economically used efficiently and adequately protected.

The Audit Committee evaluates the efficiency and adequacy of financial control system in the Company, its compliance with operating systems, accounting procedures at all locations of the Company and strives to maintain the standard in Internal Financial Control.

25. CORPORATE SOCIAL RESPONSIBILITY:

As per the provisions of section and 135 of the Companies Act, 2013 Corporate Social Responsibility (CSR) is not applicable to the Company during the year under review so there are no disclosures required under section134 (3)(o) of the Companies Act, 2013.

26. CORPORATE GOVERNANCE:

Our Company has been practicing the principles of good corporate governance as it is committed to maintain the highest standards of Corporate Governance and believes in conducting its business with due compliance of the Regulation 34 (3) read with Schedule V of the SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015 and other applicable laws. Integrity and transparency are key to our corporate governance practices to ensure that we gain and retain the trust of our stakeholders at all times. The Company has duly implemented the system of Corporate Governance and a separate report on Corporate Governance practices followed by the Company, together with a certificate from the Companys Auditors confirming compliance forms an integral part of this Report as Annexure - III.

27. RISK MANAGEMENT:

The Company has a Fraud and Risk Management Policy to deal with the instances of fraud and mismanagement, if any.

During the year, the Company has not identified any element of risk which may threaten the existence of the Company.

28. PARTICULARS OF EMPLOYEE:

There are no employees in receipt of remuneration exceeding the limit as prescribed under the provisions of Section 197 of the Companies Act, 2013.

29. DETAILS OF POLICY DEVELOPMENT AND IMPLEMENTATION:

The change of management shall draw up the Business Plan and Corporate Social Responsibility in due course.

30. SECRETARIAL AUDIT REPORT:

Pursuant to the provisions of Section 204(1) of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the Listing Regulations, M/s. JSD Associates, Company Secretaries, (M. No.: ACS 50447 /COP No.: 182523) were appointed as Secretarial Auditors of the Company to undertake Secretarial Audit of the Company for the financial year 2022-23. The Secretarial Audit Report for the said financial year is appended to this report as Annexure - I and forms part of this Annual Report.

With respect to the observations made by the Secretarial Auditors in their report, your directors would like to state as follows:

Sr. No. Observations

Explanation of Board of Directors

1 The Company has not complied with the provisions of Regulation 8 and 9 of the SEBI (Prohibition of Insider Trading) Regulation, 2015;

The delay was unintentional.

2 Delay of furnishing prior intimation for the board meeting to approve the financial results for the quarter ended September, 2022;

The delay was unintentional.

3 Delay in submitting the disclosure of related party transactions for the half year ended 30th September, 2022;

The delay was unintentional.

Further, none of the Auditors of the Company have reported any fraud as specified under the second proviso of Section 143(12) of the Act.

31. INTERNAL AUDITOR:

Pursuant to the provisions of Section 138 of the Act read with the Companies (Accounts) Rules, 2014, the Board of Directors, based on the recommendation of the Audit Committee, has not appointed any internal auditor till date.

32. AUDITORS REPORT & AUDITORS:

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the rules made there under, the current auditors of the Company, M/s. S. V. Bhat & Co., Chartered Accountants (Firm Registration No. 101298W) were appointed for a term of four years by the shareholders at the Annual General Meeting held on 24th September, 2018 and they hold office until the conclusion of the 39th Annual General Meeting, subject to ratification by shareholders at each Annual General Meeting. The term of appointment of the Statutory Auditors expires at the conclusion of this Annual General Meeting.

The members are now requested to appoint M/s. S. V. Bhat & Co., Chartered Accountants (Firm Registration No. 101298W) as Statutory Auditors of the Company for a further term of 5 (Five) years to hold office from the conclusion of the 39th Annual General Meeting until the conclusion of the 43rd Annual General Meeting of the Company, subject to ratification by the members at every Annual General Meeting and to fix their remuneration.

During the year under review the Auditor had not reported any fraud under Section 143(12) of the Companies Act, 2013, therefore no details are required to be disclosed under Section 134(3 (ca) of the Companies Act, 2013.

33. EXPLANATION BY THE BOARD ON QUALIFICATIONS OR ADVERSE REMARK BY THE AUDITOR IN ITS AUDIT REPORT: The Notes on the financial statement referred to in the Auditors Report are self-explanatory and do not call for any further comments. Refer to Note No. II 1(a), (b), (c), (d) for detailed explanation.

34. INFORMATION UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has zero tolerance for sexual harassment at workplace and adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has constituted an Internal Complaint Committee as required under Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the financial year under review, no complaint was filed before the said Committee. No compliant was pending at the beginning or end of the financial year under review.

35. PROCEEDINGS UNDER INSOLVENCY AND BANKRUPTCY CODE, 2016:

During the financial year under review, no application was made or proceeding initiated against the Company under the Insolvency and Bankruptcy Code, 2016 nor any such proceeding was pending at the end of the financial year under review.

36. VALUATION OF ASSETS:

During the financial year under review, there was no instance of one-time settlement of loans / financial assistance taken from Banks or Financial Institutions, hence the Company was not required to carry out valuation of its assets for the said purpose.

37. ACKNOWLEDGEMENT:

Your directors wish to place on record their deep sense of appreciation to the Outgoing Promoters, employees, and Bankers for their continued support and cooperation extended by them to the Company.

By order of the Board of Directors
For Madhusudan Securities Limited

Salim P Govani

Place: Mumbai

Chairman & Managing Director

Date: 10.08.2023

DIN: 00364026