Madhusudan Securities Ltd Directors Report.

To the Members,

MADHUSUDAN SECURITIES LIMITED

Your Directors have pleasure in presenting the 34th Annual Report on the business and operations of the company along with the Audited Financial Statement of Accounts for the year ended March 31, 2017.

1. Financial Result (Standalone)

Particulars Current year Previous year
2016 2017 2015 2016
Rs. Rs.
Total Revenue 74,56,222 36,13,198
Total Expense (89,09,617) (52,75,301)
Profit/ (Loss) before tax (14,53,395) (16,62,103)
Tax expense 100 NIL
Profit/ (Loss) for the year (14,53,495) (16,62,103)
Add: Balance brought forward of the previous year 28,93,656 45,55,760
Balance carried to balance sheet 14,40,160 28,93,656
Earnings per share (0.57) (0.65)

2. Dividend

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

3. Operations and Future Prospects

During the year under review, the Company has earned surplus in its trading activity in securities. With the efforts of the management, the other expenses have reduced during the year under review. However, it has suffered losses due to statutory compliance expenses & administrative expenses incurred by the Company. The net loss suffered by the Company is of Rs. 14,53,495/-.

The 61,42,847 equity Shares of Rs. 10/- each were issued without any cash consideration to Primus Retail (P) 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 (P) Ltd. to transfer the Brand & Business. Hence, due to non performance by Primus Retail (P) Ltd of their obligation, BTA Agreement stands cancelled. Therefore, equity shares issued in lieu of BTA stands cancelled by the Board of Directors and consequently the said shares have been forfeited by the Company pending statutory approvals from respective authorities. Further the face value of such shares are accounted as Forfeited Shares (to be reissued) through Scheme of arrangement under the Companies Act, in due course for further re allotment.

In view of the above, the securities premium charged to 61,42,847 equity shares at the time of allotment has been reversed from the premium account to give effect of such forfeited equity shares by the Board for fair presentation of the financial statements.

The Company has paid Rs. 12 Crores to Primus Retail (P) Ltd. pursuant to the BTA. However, the Primus Retail Pvt. Ltd. could not honour the Agreement due to Court order. Therefore, amount of Rs. 12 Crores paid for the contract stands recoverable which is treated as 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, the Company has filed suit in the Court for recovery till outcome of the Court order, no provision of doubtful debts is made in the books of accounts.

4. Number of meetings of the board

The Board of Directors have conducted quarterly Board Meetings during the Financial Year 2016 2017 on various dates namely, I. May 30, 2016 II. July 21, 2016 III. October 21, 2016 IV. January 25, 2017

5. Equity Share Capital

The Equity Share Capital as on March 31, 2017 is Rs. 8,69,54,870/-, including forfeited shares of Rs. 6,14,28,470/- which results into effective Equity Capital of Rs.2,55,26,400/- until forfeited shares are reissued through the Scheme of Arrangement or otherwise after obtaining statutory approvals under the Companies Act.

6. Extract of annual return

(a) Registration and Other Details:

CIN No L18109MH1983PLC029929
Registration Date 06th May 1983
Name of The Company Madhusudan Securities Limited
Category Public Limited Company
Address 37, National Storage Building,
Plot No, 424-B, Nr.
Johnson & Johnson Building,
S. B. Road, Mahim (West),
Mumbai - 400 016.
Emailid: mslsecurities@yahoo.com
Tel No. 9867658845
Listed Bombay Stock Exchange, Mumbai.
Registrar and Transfer Agents M/s Link Intime India Private Limited
C 101, 247 Park,
L.B.S.Marg, Vikhroli (West),
Mumbai 400083
Email : mumbai@linkintime.co.in
Tel No: 022 49186270

Business Activities of the Company

(b) PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

Name and Description of Main Product/ Services NIC Code of the Product/ Service % of total turnover to the Company
Trading 64990 99.69%

(c) Particulars of Holding, Subsidiary & Associate Companies:

Name And Address Of The Company CIN/GLN Holding/Subsidiary/ Associate % of shares held Applicable Section
1 N.A N.A N.A N.A N.A

I. i. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

The Equity Share Capital as on March 31, 2017 is Rs. 8,69,54,870/-, including forfeited shares of Rs. 6,14,28,470/-which results into effective Equity Capital of Rs. 2,55,26,400/- until forfeited shares are reissued through the Scheme of Arrangement or otherwise after obtaining statutory approvals under the Companies Act.

Category-wise Share Holding

Category of Shareholders No. of Shares held at the beginning of the year [As on 31-March-2016] No. of Shares held at the end of the year [As on 31-March-2017]
Demat Physical Total % Demat Physical Total % of Total Shares % Chang during the year
A. Promoter s
(1) Indian
a) Individual/ HUF 5,450 5,450 0.21 5450 5,450 0.21 Nil
b) Central Govt
c) State Govt(s)
d) Bodies Corp. 14,34,004 14,34,004 56.17 14,33,999 14,34,999 56.17 -
e) Banks / FI
f) Any other
Total shareholding of Promoter (A) (1) 14,39,454 14,39,454 56.38 14,39,449 14,39,449 56.38 -
(2)Foreign - - - - - - - - -
Total Shareholding of new Promoter and Promoter Group (A)= (A)(1)+(A)(2) 14,39,454 - 14,39,454 56.39 14,39,449 - 14,39,449 56.39 (0.05)
B. Public NIL NIL NIL NIL NIL NIL NIL
Shareholding
(B1)
2. Non- Institutions
a) Bodies Corp. 7,98,376 7,98,376 31.27 7,98,335 - 7,98,335 (0.01)
i) Indian
ii) Overseas
b) Individuals
i) Individual shareholders holding nominal share capital upto Rs. 1 lakh 21,524 3350 24,874 0.97 21,992 3,350 25,342 0.99 (0.02)
ii) Individual shareholders holding nominal share capital in excess of Rs 1 lakh 2,87,665 - 2,87,665 11.27 2,87,813 - 2,87,813 11.28 0.01
c) Others (specify)
Hindu Undivided 1201 - 1201 0.04 1201 - 1201 0.04 -
Family
Non Resident 200 - 200 0.01 200 - 200 0.01 -
Indians
Overseas
Corporate Bodies
Foreign Nationals
Clearing Members 870 870 0.03 300 300 0.01 (0.02)
Trusts
Foreign Bodies - D
R
Sub-total (B)(2):- 11,09,836 3350 11,13,186 43.61 11,09,841 3350 11,13,191 43.61 -
Total Public Shareholding (B)=(B)(1)+ (B)(2)
C. Shares held by Custodian for GDRs & ADRs
Grand Total (A+B+C) 2549290 3350 2552640 100 2549290 3350 2552640 100 NIL

(ii) Shareholding of Promoters

Shareholders Name Shareholding at the beginning of the year Shareholding at the end of the year
No. of Shares % of total Shares of the compan y %of Shares Pledged /encum bered to total shares No. of Shares % of total Shares of the compan y %of Shares Pledge d /encu mbere d to total shares % change in share holding during the year
1. Mr. Salim Govani 5450 0.21 - 5450 0.21 - -
2. Foresight Holding P. L. 972973 38.11 - 972973 38.12 -
3. Growsafe Securties Pvt Ltd 230031 9.01 - 230026 9.01 -
4. Indusage Advisors Ltd 231000 9.05 9.05 231000 9.05 9.05 -
Total 1439454 56.39 9.05 1439454 56.39 9.05 -

(iii) Change in Promoters Shareholding

Sl. No Shareholding at the beginning of the year Cumulative Shareholding during the year
No. of shares % of total shares of the company No. of shares % of total shares of the company
At the beginning of the year
1. Mr. Salim Govani 5450 0.21%
2. Foresight Holdings Pvt. Ltd 972973 38.11%
3. GrowsafeSecurtiesPvtLtd 230031 9.01%
4. Indusage Advisors Ltd 231000 9.05% 1439454 56.39%
Date wise Increase / Decrease in (5) 0.00%
Promoters Shareholding during the year specifying the reasons for increase/decrease
At the end of the year
1. Mr. Salim Govani 5450 0.21%
2. Foresight Holdings Pvt. Ltd 972973 38.11%
3. Growsafe SecurtiesPvtLtd 230026 9.01%
4. Indusage Advisors Ltd 231000 9.05% 1439449 56.39%

(Iv) Share holding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):

Sr.No Shareholding at the beginning of the year Shareholding at the end of the year
For Each of the Top 10 Shareholders No. of shares % of total shares of the company No. of shares % of total shares of the company
1 Dewsoft Overseas Private Limited 394736 15.46 394736 15.46
2 Acme Investments Consultants P Ltd 263157 10.31 263157 10.31
3 Exemplar International P. L. 134800 5.28 134800 5.28
4 Mr. Zainal Khan 76500 3.00 76500 3.00
5 Mr. Shyam G Shroff 71826 2.81 71826 2.81
6 Mr. Madhusudan Reddy 63,500 2.48 63,500 2.48
7 Mr. Sidharth Ratanlal Bafna 50949 1.99 50950 1.99
8 Mr. Vipul Priyakant Dalal 24890 0.97 24990 0.97
9 Mr. Raghvendra Mohta 4,650 0.18 4,650 0.18
10 VSL Securities P. L. 4,000 0.15 4,000 0.15

(v) Shareholding of Directors and Key Managerial Personnel:

Sr.No. Particulars Shareholding at the beginning of the year Cumulative Shareholding during the year
For Each of the Directors and KMP No. of shares % of total shares of the company No. of shares % of total shares of the company
At the beginning of the year
1. 1. Mr. Salim Govani 5450 0.21 5450 0.21
Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase/ decrease NIL NIL NIL NIL
At the End of the year
1. Mr. Salim Govani 5450 0.21 5450 0.21

(d) ITS INDEBTEDNESS;

Indebtedness of the Company including interest outstanding/accrued but not due for payment.

Secured Loans excluding deposits Unsecured Loans Deposits Total Indebtedness
Indebtedness at the beginning of the financial year
i) Principal Amount - 20,35,754 - 20,35,754
ii) Interest due but not paid - - - -
iii) Interest accrued but not due - - - -
Total (i+ii+iii)
Change in Indebtedness during the financial year
* Addition - 5,00,000 - 5,00,000
* Reduction - - - -
Net Change - 5,00,000 - 5,00,000
Indebtedness at the end of the financial year
i) Principal Amount - 25,35,754 - 25,35,754
ii) Interest due but not paid - - - -
iii) Interest accrued but not due - - - -
Total (i+ii+iii) 25,35,754 - 25,35,754

(e) REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

- No Remuneration was paid to any of the Directors in the year under review.

(f) Penalty or punishment imposed on the company, its directors or officers and details of compounding of offences and appeals made against such penalty or punishment;

- No Penalty under the Companies Act 2013 has been imposed during the Financial Year 2016-17

7. Its promoters, directors, 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 No Change
Mr. Harsh Javeri Independent Director No Change
Mr. Abhilash Padmanabh Independent Director No Change
Mrs. Isha Sekhri Independent Director Appointed on 25th January, 2017

8. Meetings of members or a class thereof, Board and Annual General Meetings along with attendance details;

Attendance at
Name of the Director Position as on 31/03/2017 Date of Appointment/Re signation No. of Directorshi p(s) in other Companies No. of Membership(s) in Board Committees of other Companies
Board Last
Meeting AGM
Mr. Salim Govani Promoter Appointment on 4 Yes 11 -
21/04/2015
Mrs. Sausan Director Appointment on 4 Yes 2 -
Bukhari 21/04/2015
Mr. Harsh Javeri Independent Appointment on 4 Yes 3 -
Director 30/05/2013
Mr. Abhilash Independent Appointment on 4 No 2 -
Padmanabh Director 30/05/2013
Mrs. Isha Sekhri Independent Appointment on - No 5 NA
Director 21/01/2017

9. 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 Director/ Independent Chairman 4
Director
Mr. Abhilash Padmanabh Non Executive / Independent Director Member 4
Mr. Abhilash Padmanabh Non Executive / Independent Director Member 4

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
Mr. Abhilash Padmanabh Non Executive / Independent Director Member 4

Management Remuneration Committee

Name of the Members Composition and Category Designation Total Meeting Attended
Mr. Abhilash Padmanabh Non-Executive/ Independent Director Chairman 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 thereunder, 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.

10. Directors Responsibility Statement

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

1. That in the preparation of the annual accounts for the financial year ended March 31, 2017, the applicable accounting standards have been followed, along with proper explanation relating to material departures;

2. That the Directors have selected such accounting policies and applied them consistently and made judgements 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 Profit or loss for that period;

3. 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

4. That the annual accounts for the financial year ended March 31, 2017 are prepared on a ‘going concern basis;

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

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

11. Directors And Key Management Personnel

Mrs. Isha Sikhri, a young Chartered Accountant, has been appointed as additional Independent Director vide board meeting dated 25/01/2017, and her approval shall be taken in the ensuing AGM.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and in the Listing Agreement with the Stock Exchanges.

The Management is desirous to appoint a suitable candidate at reasonable cost to look after the secretarial compliances in view of meagre activities at present.

12. 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.

13. Related Parties Transaction

All contracts/ arrangements/ transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arms length basis. The Related Party Transactions are duly recorded as part of Notes to Accounts which is self-explanatory and the terms and conditions of which are not prejudicial to interests of the Company.

14. Material changes and commitments

No material changes have occurred after the Balance Sheet date.

15. Particulars Regarding Conversion of Energy and Technology Absorption

Additional information required regarding Conservation of Energy and Technology Absorption are NOT APPLICABLE as the Company is not carrying out any manufacturing operation.

16. Foreign Exchange Earnings And Outgo

During the year under review, the Company has not earned or incurred any amount in foreign exchange.

17. Internal Financial Controls

The Company has in place adequate internal financial controls with reference to financial statements and during the year, no much activities has been carried out to report any material weakness in the design or operations of the Company.

18. Corporate Social Responsibility

The Company is not liable to constitute a Corporate Social Responsibility Committee since the Company has not attained the prescribed limit under the Companies Act, 2013.

19. Corporate Governance

The company is not mandatorily required to comply corporate governance as per new listing Agreement, However, the company generally maintains proper standards of corporate governance as required by SEBI and voluntarily the report on corporate governance as stipulated under Clause 27 of the LODR is attached in the annual Report.

20. 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.

21. 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.

22. Details of Policy Development and Implementation

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

23. Secretarial Audit Report

Pursuant to the provision of the Section 204 of the Companies Act 2013 and the Companies Rule 2014, the company shall appoint a Practising Company Secretary, to conduct secretarial audit in due course to comply the provisions of the Act.

24. Internal Auditor

The Company has adequate internal control commensurate to the size of the company and nature of its business. However, due to cash crunches and no much activity during the year, the Management has done adequate internal check.

25. Auditors Report & Auditors

The companys statutory auditors M/s. Vora & Associates, Chartered Accountants ICAI FRN 111612W, Mumbai, retire at the ensuing AGM and have tendered their ineligibility of being reappointed as the Statutory Auditors in the AGM due to mandatory rotation of auditors as per the provisions of the Companies Act, 2013. The Management thanks the outgoing auditors for being associated with the Company and timely carrying out the statutory audits of the Company and rendering its other professional services to the Company.

The observations made by the Statutory Auditors in their Report read together with Significant Accounting Policies and the relevant Notes forming part of the accounts for the financial year ended 31st March, 2017 are self explanatory and therefore do not call for any further comments.

The Management has approached M/s. S. V. Bhat & Co., Chartered Accountant, as new Statutory auditors of the Company. The new firm shall be appointed after the approval of the members in the ensuing AGM of the Company.

26. Explanation by the Board on Qualifications Or Adverse Remark by the Auditor in its Audit Report

The Notes on financial statement referred to in the Auditors Report are self-explanatory and do not call for any further comments. Refer Note no. 16(b), (c) and (d) for detailed explanation.

27. Acknowledgement

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

For AND ON BEHALF OF THE BOARD OF DIRECTORS

MR. SALIM P. GOVANI

CHAIRMAN

Place: Mumbai

Dated: August 5, 2017