skp securities ltd Directors report

* Retained Earnings including Other Comprehensive Income.

PERFORMANCE HIGHLIGHTS

We entered Financial Year 2022-2023 in the backdrop of post-Pandemic stabilization marred by geopolitical disturbance, and it ended with global macroeconomic uncertainties primarily caused by rising interest rates to tame rapidly growing inflation. Therefore, during the year, financial markets remained volatile and uncertain.

In this backdrop the company witnessed a consolidation in its operations. While Income from Distribution Services across customer segments grew, Broking Services witnessed a decline across customer segments. With some significant assignments, Merchant Banking Services grew sharply, albeit on a low base. Proprietary investments of your company remained stable with a move towards risk reduction.

Your Directors express satisfaction that the Company has become stronger during such uncertainty. DIVIDEND AND RESERVES

At their meeting held on 29th April 2023, your Directors have recommended a Dividend @ 10% ( 1/- per share) for the financial year ended March 31, 2023, subject to approval of shareholders. The total dividend payout will be approximately 68.08 Lacs. Also, they recommended to transfer 50 Lacs to General Reserve.

BONUS ISSUE

On 18th June, 2022 your Company has issued and allotted 34,04,400 equity shares of 10/- each as fully paid up bonus equity shares in the ratio of 1:1 (i.e., one equity share of 10/- each for every one existing equity shares of 10/-) each as on Record date i.e., 17th June 2022. Consequently, the Issued and Paid up Capital of the Company increased from 340.44 Lacs to 680.88 Lacs divided into 68,08,800 equity shares of 10/- each fully paid up.

FUTURE OUTLOOK

The on-going geopolitical and global macro-economic uncertainty have potential to create short term VUCA (volatile, uncertain, complex, ambiguous) times in financial markets and a similar impact on your company?s business. However, medium to long term outlook of Indian economy and financial markets remain quite promising. Competition and regulatory head winds may continue to be disruptive. With a diversified portfolio of value-added services on offer, enhanced growth initiatives and strong financials, your Directors are optimistic that the company will emerge stronger from such VUCA times.

STATE OF THE COMPANY?S AFFAIRS

Detailed information on the operations of the Company, business environment and future expectations are provided in the Management Discussion and Analysis Report, in compliance with Regulations 34(2)(e) of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 ("SEBI Listing Regulations") which is annexed and marked as Annexure A to this report.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES COMPANIES

Your Company does not have any Subsidiary, Joint Venture or Associate Company.

CORPORATE GOVERNANCE

Your Company has complied with the Corporate Governance requirements under the Companies Act, 2013 ("the Act") and as stipulated under the provisions of SEBI Listing Regulations.

A Detailed Report on Corporate Governance together with a Certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under SEBI Listing Regulations forms an integral part of this Report which is annexed and marked as Annexure B.

Mr. Paritosh Sinha (DIN: 00963537) was re-appointed as Non-Executive Independent Director of the Company for a second term of consecutive five years effective from 30th July 2022 up to 29th July 2027.

Mr. Anil Shukla (DIN: 09577789), Chief Financial Officer of the Company was appointed as Whole time Director of the Company for a period of three years effective from 1st October 2022.

KEY MANAGERIAL PERSONNEL

During the year there were no changes in Key Managerial Personnel.

NOMINATION AND REMUNERATION POLICY

Your Company has a well-defined policy for appointment of Directors, Key Managerial Personnel, Senior Management Personnel and other employees of the Company including their remuneration. The policy can be accessed at www.skpsecurities.com.

INDEPENDENT DIRECTORS? DECLARATION

The Company has received necessary declarations from all Independent Directors, in accordance with the provisions of Section 149(7) of the Act stating that they meet the criteria of Independence as laid down in Section 149(6) of the Act and Regulation 25 of SEBI Listing Regulations. In accordance with the provisions of the Act, none of the Non-Executive Independent Directors are liable to retire by rotation.

Pursuant to Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014 as amended, all Independent Directors of the Company have registered themselves in the Independent Directors databank maintained with the Indian Institute of Corporate Affairs.

ANNUAL EVALUATION OF THE PERFORMANCE OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

In terms of the provisions of the Act and SEBI Listing Regulations, the Board of Directors has carried out an evaluation process of its own performance, the performance of its various committees and individual Directors. A structured questionnaire is prepared for assessment based on various aspects, which, among other parameters, include composition of Board and its Committees, conducting of Meetings, effectiveness of Governance Practices etc. The detailed criteria applied in the evaluation process are explained in the Corporate Governance Report.

Further, Independent Directors, at their meeting held on 28th January, 2023 reviewed the performance of the Board and the Non-Independent Directors.

BOARD & COMMITTEE MEETINGS

During the year under review, the Board met four times on 30th April 2022, 30th July 2022, 29th October 2022 and 28th January 2023. The intervening gap between the meetings was within the period prescribed under the Act.

At present, the Board of Directors has the following four committees:

i) Audit Committee

ii) Nomination and Remuneration Committee

iii) Stakeholders Relationship Committee

iv) Corporate Social Responsibility Committee

The details of composition of the Board, its various Committees, brief terms of reference, meetings held and attendance of the Directors are provided in the Corporate Governance Report.

Statutory Auditor

M/s S K Agrawal and Co Chartered Accountants LLP (Firm Registration No. 306033E/E300272) were appointed as Statutory Auditors of the Company for a period of five consecutive years at the 32nd Annual General Meeting held on 2nd July, 2022, to hold office from the conclusion of the said meeting till the conclusion of 37th Annual General Meeting of the Company to be held in the Calendar Year 2027. The requirement for the annual ratification of Auditors appointment at the Annual General Meeting has been omitted pursuant to Companies (Amendment) Act, 2017 notified on 7th May, 2018. The Auditors have given a confirmation to the effect that they are eligible to continue with their appointment and have not been disqualified in any manner from continuing as Statutory Auditor.

The Auditors? Report for the financial year ended 31st March, 2023, does not contain any qualification, reservation or adverse remark. Further, the Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Act. The Auditors? Report is enclosed with the financial statements in this Report.

Secretarial Auditor

Mr. Anil Murarka, Practicing Company Secretary (FCS:3150, CP No:1857) Proprietor of M/s. A. Murarka & Co., Kolkata, was appointed to conduct the Secretarial Audit of the Company for the financial year 2022-23, pursuant to the provisions of Section 204 of the Act, the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and the SEBI Listing Regulations. The Secretarial Audit Report is annexed and marked as Annexure C. The said report does not contain any observation or qualification or adverse remark requiring explanation.

ANNUAL RETURN

Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company for financial year 2022-23 is uploaded on website of the Company and can be accessed at www.skpsecurities.com.

CORPORATE SOCIAL RESPONSIBILITY

The Company has a Policy on Corporate Social Responsibility which is available on the website of the Company i.e. www.skpsecurities.com. The provisions of Section 135 of the Companies Act, 2013 is not applicable to the Company for the financial year 2022-23 and the Company is not required to undertake any CSR activity. The brief outline of the Corporate Social Responsibility Policy of the Company and activity other details as required is set out in Annexure D of this Report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules 2014.

PARTICULAR OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES

All transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on arm?s length basis and are in compliance with the applicable provisions of the Act and SEBI Listing Regulations, details of which are provided in notes to financial statements which forms an integral part of this Report.

All new related party transactions are first placed before the Audit Committee and thereafter placed before the Board for their consideration and approval. A prior omnibus approval of the Audit Committee is obtained on an annual basis for the transactions which are of foreseen and repetitive nature. There have been no materially significant related party transactions that may have potential conflict with the interests of listed entity at large. The policy on materiality of Related Party Transaction and dealing with Related Party Transaction as approved by the Board can be accessed on Company?s website www.skpsecurities.com

Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Act read with Rule 15 of the Companies (Meetings of Board and its Powers) Rules, 2014 in Form AOC-2 is not applicable for the Financial Year 2022-23.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Your Company did not provide any Loans or Guarantees in terms of provisions of Section 186 of the Act. The details of Investments made are provided in notes to the Financial Statements which forms an integral part of this Annual Report.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Information sought under Section 197(12) oftheAct read with Rule 5(1) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed and marked as Annexure E to this Report.

Further, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits as set out in the Rule 5(2) and 5(3) of the aforesaid Rules, forms part of this report. However, in terms of first proviso to Section 136(1) of the Act, the Annual Report and Accounts are being sent to the Members and others entitled thereto, excluding the aforesaid information. The said information is available for inspection by the Members. Any Member interested in obtaining a copy thereof, may write to the Company Secretary at cs@skpsecurities.com.

RISK MANAGEMENT

Risks are an integral part of business and your Company is committed to manage risks in a proactive and efficient manner. Your Company has implemented an integrated Risk Management framework through which it reviews and assesses significant risks on a regular basis to help ensure that there is a robust system of risk controls and mitigation in place. Senior management periodically reviews this risk management framework to keep updated and address emerging challenges. In the opinion of the Board, at present there are no risks which threaten the existence of the Company.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

Your Company has a well-established Whistle Blower Policy as part of vigil mechanism for Directors and Employees to raise their concerns about unethical behavior, actual or suspected fraud or violation of Company?s Code of Conduct etc. in compliance with provisions of Section 177(10) of the Act and Regulation 22 of SEBI Listing Regulations. This mechanism also provides for adequate safeguards against victimization of Directors, Employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee.

During the year under review, none of the Directors/Employees were denied access to the Chairman of the Audit Committee and that no complaints were received during the year. The web link of the said Policy is http://www.skpsecurities.com/index.php/investor/policies.

DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has zero tolerance towards sexual harassment at workplace. All women who are associated with the Company either as permanent, temporary or contractual employees or trainees etc. are covered under the above policy. During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

TRANSFER OF UNPAID/UNCLAIMED AMOUNTS TO INVESTOR EDUCATION & PROTECTION FUND AUTHORITY (IEPF)

In terms of the provisions of Section 124 of the Act read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 and other applicable provisions, all unpaid or unclaimed dividends have been transferred by the Company to IEPF after completion of seven years. Further, shares on which dividend had remained unpaid or unclaimed by Members for seven consecutive years or more are also transferred to the demat account of IEPF Authority.

INTERNAL FINANCIAL CONTROLS

The Company has an Internal Financial Control System, commensurate with size, scale and complexity of its operations to ensure proper recording of financial and operational information and compliances of various internal controls and other regulatory and statutory compliances. During the year under review, no material or serious observation has been received from the Internal Auditor of the Company for inefficiency or inadequacy of such controls.

Audit Committee in consultation with the Internal Auditor formulates the scope, functioning, periodicity and methodology for conducting the Internal Audit. Based on the Internal Audit Report corrective actions in the respective area are undertaken and controls are strengthened.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information sought under the provisions of Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed and marked as Annexure F to this Report.

POLICIES

The details of the policies approved and adopted by the Board are annexed and marked as Annexure G to this report.

DIRECTOR?S RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(3)(c) read with Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, confirm that:

a) in the preparation of the Annual Accounts for the Financial Year ended 31st March, 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) the Directors have selected such accounting policies and applied them consistently and 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 as at 31st March, 2023, and of the profit/loss of the Company for that period;

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

d) the Directors ensured the annual accounts are prepared on a going concern basis;

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

GENERAL DISCLOSURES

Your Company complies with all the applicable Secretarial Standards issued by the Institute of Companies Secretaries of India.

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of shares including sweat equity shares to employees of the Company under SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.

3. Deposits covered under Chapter V of the Act.

4. No significant or material orders were passed by any regulatory authority or courts or tribunals, impacting the going concern status and Company?s operation in future.

5. No other material changes and commitments have occurred after the close of Financial Year till date of this Report which affects the financial position of the Company.

GRATITUDE & ACKNOWLEDGEMENT

Your Directors express their deep gratitude to clients, business associates, principals, bankers, regulators, exchanges, depositories and shareholders for their valuable contribution towards the progress of the Company. Your Directors particularly wish to place on record their sincere appreciation of the best efforts put in by the employees at all levels, but for which, the Company could not have achieved what it did during the year under review.