SPA Capital Services Ltd Directors Report.

To the Members,

Your Directors have pleasure in presenting herewith their 35th Annual Report of SPA Capital Services Limited [the "Company") on the business and operations of the company together with the Audited Financial Statements of the Company for the year ended on 31st March, 2019.

FINANCIAL HIGHLIGHTS

Key highlights of financial performance for SPA Capital Services Limited for the financial year 201819 are tabulated below:

(Rs. in lakhs)

Particulars March 31, 2019 March 31, 2018
Sales 5036.39 2652.44
Brokerage Income 3989.90 5025.05
Income from Advisory Services / Management Fees 554.27 760.86
Interest and Dividend Income 269.95 215.60
Profit from Trading in Derivatives - -
Other Income 3.74 9.26
Total income 9854.25 8663.21
Expenditure before Depreciation, Tax and Exceptional items 9709.48 8404.23
Profit before Depreciation, Tax and Exceptional items 144.77 258.98
Less: Depreciation 45.92 50.32
Less: Exceptional Items 6.92 0.11
Less: Prior Period Items 0.59 -
Profit before Tax 91.34 208.55
Less: Provision for Tax 43.02 69.70
Profit After Tax 48.32 138.85
Less: Short/(Excess) provision for earlier years 2.88 4.07
Profit/fLoss) for the period 45.44 134.78
Earnings per Share (Equity Shares of face value Rs.10/- each)
- Basic 1.48 6.71
- Diluted 1.48 6.71

ECONOMIC OVERVIEW

We are very much optimistic about the Industry scenario in India. The Investment in Mutual Funds through various SIPs and other route is on all time high. There is a big opportunity for mutual fund distributors when an average investor still requiring guidance through the complicated maze of investments. AUM of the MF industry in India grew by 11.4% in FY18-19 to INR 23.80 Lakh Crore, of which equity AUM constituted 43% and grew by 17.8% from a year earlier. The growth in Equity AUM can be attributed primarily to healthy net new flows of INR 1.18 Lakh Crore during the year. Debt AUM fell by 8.7% as the industry saw net outflows of INR 1.24 Lakh Crore due to uncertain interest rate environment and a challenging credit cycle. Liquid AUM stands at 1NR 4.36 Lakh Crore, a growth of 30% backed by net inflows of INR 0.76 Lakh Crore. ETFs, FOFs and Arbitrage Funds now add up to INR 1.93 Lakh Crore.

Individual investors contribution to the total AUM now stands at 55% versus 51% a year earlier. Monthly flows from SIPs were INR 8,055 Crore in March 2019, a growth of 13.1% from the same month of the previous year. The industry processed 2.62 Crore SIP transactions during March, 2019 as compared to INR 2.11 Crore in March 2018. AUM from beyond the top 30 cities (B30) stood at INR 3.79 Lakh Crore and formed 15% of the total AUM in March, 2019. Industry participants are ramping up their presence in these locations leading to further development of markets. Favorable regulatory policies have propelled the interest for mutual fund products in B30 cities of the country.

Future outlook

Riding high on strong inflows from domestic individual investors, the MF industry AUM grew by 24% CAGR over the last 5 years, with Equity AUM growing by 39% CAGR over the same time period. The individual investors AUM in the industry has grown from INR 3.93 Lakh Crore in March 2014 to INR 13.54 Lakh Crore in March 2019, a growth of 28% CAGR. Over the same period, the number of individual folios have increased from 3.92 Crore to 8.21 Crore. Individual investors typically invest for longer time frames and have a higher preference for equity-oriented funds. Net inflows into the industry over the past 5 fiscal years were INR 9.62 Lakh Crore, of which INR 6.61 Lakh Crore have been in equity-oriented schemes. There is a trend of Indian retail investors increasing allocation to equities in their overall investment portfolio. The AUM of liquid funds also witnessed healthy growth on the back of buoyant corporate investments and stable returns.

A major game changer for the domestic mutual fund industry has been the acceptance of the systematic investment plans, commonly known as SIPs, which has become a preferred route for most individual investors. The monthly SIP flows grew 2.5 times from April 2016, to INR 8,055 Crore in March 2019. The number of SIP transactions processed in March 2019 was 2.62 Crore as compared to 1.01 Crore in April 2016. SIPs are typically sticky long term inflows and lend high visibility and predictability of AUM growth.

Another important development has been the balancing of roles between the domestic institutional investors (largely Mutual Funds) and Foreign Portfolio Investors (FPI). Historically Indian equity markets have moved in tandem with FPI fund flows. FPI flows tend to be volatile as they are exposed to global challenges.

We believe we are well-poised to capitalize on the healthy prospects of the industry and further solidify our position in the market. Our strong brand equity, disciplined investment philosophy and robust process, customer-centric approach and expansive reach should facilitate our future growth.

BUSINESS AND OPERATIONAL HIGHLIGHTS

Our revenues primarily consist of revenue from sale of securities, brokerage income from distribution of Mutual Fund and other financial products, income from interest and dividend. The Company is also registered with Reserve Bank of India as Non deposit accepting Non Banking Financial Company (NBFC).

During the year under review the Company has obtained registration as Point of Presence - Sub entity (POP- SE) from Pension Fund Regulatory and Development Authority (PFRDA) for providing various facilities to the Subscribers under the National Pension Scheme (NPS) and rendering other services as specified under the Pension Fund Regulatory and Development Authority Act, 2013.

During the year, the Company has registered an increase of 89.88% in the Sale of Securities, from Rs. 265,244,340/- in the financial year 2017-18 to Rs. 503,638,727/- in the Financial Year 2018-19.

However, the brokerage Income has decreased from Rs. 502,504,938/- in the financial year 201718 to Rs. 398,990,195 in the Financial Year 2018-19.

It is submitted further that the income from advisory services / management fees decreased from Rs. 76,085,913/- in the financial year 2017-18 to Rs. 55,427,550/- in the Financial Year 2018-19.

LISTING OF SHARES OF THE COMPANY

With effect from February 07, 2019, the Equity Shares of the Company are being listed on the BSE Limited (BSE). The Company has entered into Listing Agreement with BSE Ltd. in terms of provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 within the prescribed time limit.

DIVIDEND

In order to conserve the resources of the Company and to plough back profits in the Company and to meet the fund requirements of the Company for the purpose of capitalizing on the opportunities available, your Directors have not recommended any dividend for the year under review.

TRANSFER TO GENERAL RESERVE

During the year under review the company has transferred a sum of Rs. 10,000,000 to the General Reserves.

The Reserves and Surplus of your company stood at Rupees 142,455,595/- as at March 31,2019. SHARE CAPITAL

The Authorized Share Capital of the Company as at March 31, 2019 is Rs. 50,000,000 divided into 5,000,000 equity shares of Rs. 10/- each. The paid up share capital of the company as at March 31, 2019 is Rs. 30,742,250 divided into 3,074,225 equity shares of Rs. 10/- each.

During the year under review there has been no change in the Authorized and Paid up Share Capital of the Company.

HOLDING / SUBSIDIARY / ASSOCIATE COMPANIES

Your company does not have any Holding, Subsidiary and Associate Company within the meaning of Section 2(46), Section 2(87) and Section 2(6) of the Companies Act, 2013 ("Act").

PUBLIC DEPOSITS

Your Company has neither invited nor accepted any deposits from public within the meaning of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 during the financial year 2018-19.

EXTRACT OF THE ANNUAL RETURN

As required under Section 134(3)(a)of the Companies Act, 2013, the details forming part of the extract of the Annual Return as stipulated under Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014 in form MGT - 9 is available on the website of the Company at

http://www.spacapitaI.com/CapitalServices/SPACapitalServicesMGT.pdf and the Annual Return for the Financial year 2017-18 in the MGT-7 is available on the website of the Company at http://www.spacapital.com/CapitalServices/Annual Return 2017-18.pdf .

STATUTORY AUDITORS

The Shareholders of the Company had at their Extra Ordinary General Meeting held on April 24, 2019, approved the appointment of M/s SNMG & Co., Chartered Accountants (Regn. No. 004921N), to fill the casual vacancy caused by the resignation of M/s O. P. Mishra & Company, Chartered Accountants (ICAI Firm Registration No. 011873N) and to hold the office of the Statutory Auditors of the Company until the conclusion of the ensuing Annual General Meeting of the Company.

The Board of Directors had after considering recommendation of the Audit Committee decided to re-appoint M/s SNMG & Co., Chartered Accountants (Regn. No. 00492IN) as the Statutory Auditors of the Company, to hold office from the conclusion of the 35th Annual General Meeting upto the conclusion of 40th Annual General Meeting.

The Board, therefore, recommends for their appointment at the ensuing Annual General Meeting.

AUDITORS REPORT

The report of the Auditors on the final accounts of the Company is being attached with the Balance Sheet. The notes to the said report are self explanatory and therefore do not require any further clarifications.

There are no qualifications, reservation or adverse remarks made by the Statutory Auditors in their audit report for the Financial Year 2018-19.

During the year under review, the Statutory Auditors have not reported any incident of fraud under Section 143(12) of the Companies Act, 2013 to the Audit Committee, therefore no detail is required to be disclosed under Section 134(3)(ca) of the Companies Act, 2013.

SECRETARIAL AUDITORS

The Company has appointed M/s RMG and Associates, Company Secretaries to conduct the Secretarial Audit for the financial year ended March 31, 2019, pursuant to Section 204 of the Companies Act, 2013 and rules made thereunder.

The Secretarial Audit Report furnished by M/s RMG and Associates is annexed to this report as "Annexure - A".

The Managements Reply to the observations reported in the Secretarial Audit Report is as follows:

Observation Reply
1. The Company has not submitted prior intimation of Board Meeting convened on February 14, 2019 within the timelines specified in regulation 29(2) & 29(3). Further a notice was received from BSE regarding the non-compliance and accordingly company was fined with Rs. 11,800/-, which was duly complied with. The Company received Trading approval from the Stock Exchange, effective from February 07,2019.
As on the due date of the Compliance to be made under Regulation 29 of the SEB1 (Listing Obligations and Disclosure Requirements) Regulation, 2015, the Company did not have access to the Listing Centre ( http://listing.bseindia.com ). Soon after the generation of Login Id and password, the Company intimated the Stock Exchange regarding convening the Board Meeting on February 14, 2019, without any delay.
Thus, the delay in filing the pre-intimation of the Board Meeting convened on February 14, 2019 was due to technical glitch.
Moreover, the Company has made payment of the said fine amount under protest and requested the BSE officials to waive off the amount of fine imposed on the Company.
Further directions in this regard are awaited from the BSE officials.
2. A Quarterly Return on Important Financial Parameters of non-deposit taking NBFC having asset size of Rs. 50 Crore and above but less than Rs. 100 Crore was required to be filed in terms of RBI circular DNBS (PD). CC. No.243 /03.02.02 /2011-12 dated September 12, 2011. As per NBFC Returns (Reserve Bank) Directions, 2016 having reference No. RBI/DNBS/2016-17/47 Master Direction DNBS.PPD.02/66.15.001/2016-17 dated September 29, 2016, an NBFC-ND-NSI having asset size below Rs. 100 crore is required to file only NBS-9 and Statutory Auditor Certificate.
Moreover, there is no filing mechanism available at the COSMOS Portal made available by RBI.
The Management of the Company is exploring the ways of filing this return and is seeking clarification from the concerned RBI NBFC division.

CORPORATE GOVERNANCE

As per the provision of Regulation 15(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Compliance with Corporate Governance provisions as specified in the Regulations 17 to 27 and clause (b) to (i) of Regulation 46(2) and para C, D and E of Schedule V shall not apply to listed entities having paid-up equity share capital not exceeding Rs. 10 Crores and net worth not exceeding Rs. 25 Crores as on the last date of previous financial year.

The Paid up Equity Share Capital and the Net Worth of the Company is Rs. 3,07,42,250/- and Rs. 16,86,53,887/- respectively, which are less than Rs. 10,00,00,000/- and Rs. 25,00,00,000/ respectively as per the Audited Financial Statements of the company for the Financial year 2017-2018.

Henceforth, Company being falling under the specified limits of above regulation, requirement of giving Corporate Governance report in Annual Report as per the Para C of the Schedule V is exempted to the company and hence not required to be prepared.

However, your Company has made every effort to comply with the provisions of the Corporate Governance and to see that the interest of the Shareholders and the Company are properly served. It has always been the Companys endeavor to excel through better Corporate Governance and fair & transparent practices, many of which have already been in place even before they were mandated by the law of land.

The management of Company believes that it will further enhance the level of Corporate Governance in the company.

CORPORATE SOCIAL RESPONSIBILITY

In terms of provisions of Section 135 of the Companies Act, 2013 and Rules made thereunder, provisions of Corporate Social responsibility is not applicable to the company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Board Composition and its Meetings

As on March 31, 2019, the Board comprises of 8 Directors (1 Chairman Cum Managing Director, 1 Whole Time Director, 2 Non- Executive Promoter Director and 4 Independent Directors). The composition of the Board represents a healthy blend and optimal mix of professionalism, knowledge and experience which enables the Board to discharge its responsibilities and provide effective leadership for long term vision and to achieve the highest level of governance. The Board critically evaluates the Companys strategic directions, management policies and their effectiveness. The Board regularly reviews inter alia, annual business plans, performance against plans, business opportunities including investments/disinvestments, related party transactions, compliance processes including material legal issues, strategy, risk management practices and approval of financial results. Frequent and detailed interaction provides the strategic roadmap for the Companys future growth.

Table showing the Composition of the Board as on March 31. 2019

Name of the Director Category
1 Mr. Sandeep Parwal Chairman Cum Managing Director (Promoter)
2 Mr. Kamal Kishore Somani Non Executive Director (Promoter)
3 Mr. Mahaveer Prasad Mundhra Whole time Director
4 Mr. Vikas Dhingra Independent Director
5 Mr. Kamal Binani Independent Director
6 Mrs. Honey Parwal Non Executive Director (Promoter)
7 Mr. Amit Kumar Jakhotia Independent Director
8 Mr. Ramesh Menon Independent Director

The Board met 6 (Six) times during the year 2018-2019 on May 30, 2018 (Adjourned Meeting on June 13, 2018), August 14, 2018, September 24, 2018, November 20, 2018, February 14, 2019 and March 22, 2019. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and rules made there under.

The details of number of meetings attended by each Director during the financial year 2018-19 are as follows:

Name of Director Category Attendance in FY 2018-19
1 Mr. Sandeep Parwal Chairman Cum Managing Director (Promoter) 6/6
2 Mr. Kamal Kishore Somani Non Executive Director (Promoter) 1/6
3 Mr. Mahaveer Prasad Mundhra Whole time Director 5/6
4 Mr. Vikas Dhingra Independent Director 2/6
5 Mr. Kamal Binani Independent Director 1/6
6 Mrs. Honey Parwal Non Executive Director (Promoter) 3/6
7 Mr. Amit Kumar Jakhotia Independent Director 6/6
8 Mr. Ramesh Menon Independent Director 6/6

None of the directors of the company is disqualified under Section 164(2) of the Companies Act, 2013 and the Rules made there under.

Change in Composition of the Board

During the Year under review following changes were made in the composition of the Board of Directors:

1. Ms. Honey Parwal (DIN: 00025835) was appointed as Director by the Shareholders of the Company at their Annual General Meeting held on September 18, 2018.

2. Mr. Amit Kumar Jakhotia (DIN: 07947687) was appointed as Independent Director by the Shareholders of the Company at their Annual General Meeting held on September 18, 2018; and

3. Mr. Ramesh Menon (DIN: 02182698) was appointed as Independent Director by the Shareholders of the Company at their Annual General Meeting held on September 18, 2018.

After the closure of the Financial Year following changes were made in the composition of the Board of Directors:

1. Mr. Kamal Kishore Somani has resigned from the position of the Director of the Company with effective from September 02, 2019.

As per the provisions of Section 152 of the Companies Act, 2013, and in terms of the Articles of Association of the Company, Ms. Honey Parwal, will retire by rotation and further being eligible, has offered herself for re-appointment at the ensuing Annual General Meeting.

Change in Key Managerial Personnel of the Company

During the year under review Mr. Rajesh Ramnani has resigned from the position of Company Secretary and Compliance Officer of the Company and Compliance Officer under Pension Fund Regulatory and Development Authority Act, 2013 and Pension Fund Regulatory and Development Authority (Point of Presence) Regulations, 2015 from the close of the business hours of 31st March, 2019 due to his personal commitments vide letter dated February 11, 2019.

To fill the Vacancy caused by the resignation of Mr. Rajesh Ramnani, the Board of Directors of the Company, has based on the recommendations of Nomination and Remuneration Committee, appointed Ms. Kajal Gupta, an Associate Member of Institute of Company Secretaries of India, as Company Secretary and Compliance Officer of the Company and Compliance Officer under Pension Fund Regulatory and Development Authority Act, 2013 and Pension Fund Regulatory and Development Authority (Point of Presence) Regulations, 2015 with effect from 1st April, 2019.

Independent Directors

The Independent Directors of the Company are individuals of eminence & repute in their respective fields and they actively contribute to the strategic direction, operational excellence & corporate governance of the Company. In accordance with the criteria set for selection of Independent Directors and for determining their independence, the Nomination and Remuneration (NR) Committee of the Board, inter alia, considers the qualifications, positive attributes, area(s) of expertise and Directorships/ Committee memberships held by these individuals in other companies. The Board considers the NR Committees recommendation and takes appropriate decisions for appointment of the Independent Directors.

Accordingly as on March 31, 2019, the Company has Mr. Vikas Dhingra, Mr. Kamal Binani, Mr. Amit Kumar Jakhotia and Mr. Ramesh Menon as Independent Directors of the Company.

Mr. Vikas Dhingra and Mr. Kamal Binani were appointed as the Independent Director of the Company for a term of five consecutive years commencing from October 01, 2014. Accordingly the term of Mr. Vikas Dhingra and Mr. Kamal Binani was due to expire on September 30, 2019.

In compliance with the provisions of Section 149 read with Schedule IV of the Companies Act, 2013, a separate meeting of the Independent Directors was held on February 14, 2019.

Declaration of Independence

The Company has received declarations from Mr. Vikas Dhingra, Mr. Amit Kumar Jakhotia and Mr. Ramesh Menon, Independent directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 read with Schedule IV and the Rules made thereunder.

Performance Evaluation of Independent Directors by the Board

The performance evaluations of the Independent Directors were carried out by the entire Board. The Directors expressed their satisfaction with the evaluation process.

COMMITTEES OF THE BOARD OF DIRECTORS

The Board Committees play a vital role in strengthening the Corporate Governance practices and focus effectively on the issues and ensure expedient resolution of the diverse matters. All observations, recommendations and decisions of the Committees are placed before the Board for information or for approval.

The Board of Directors has, from time to time, constituted the following Committees, namely:

1) Audit Committee

2) Stakeholder Relationship Committee

3) Nomination and Remuneration Committee

Audit Committee Composition and its Meetings

As on March 31, 2019 the Audit Committee comprises of 4 Directors i.e. Mr. Ramesh Menon as Chairman who is an Independent Director, Mr. Sandeep Parwal, Chairman Cum Managing Director, Mr. Amit Kumar Jakhotia, Independent Director and Mr. Kamal Binani, Independent Director.

The role, terms of reference and powers of the Audit Committee are in conformity with the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015.

During the period under review, all the recommendations of the Audit Committee were accepted by the Board of Directors of the Company.

The Audit Committee met 5 (FIVE) times during the year 2018-2019 on May 30, 2018 (Adjourned Meeting on June 13, 2018), August 14, 2018, November 20, 2018, February 14, 2019 (at 11:00 AM) and February 14, 2019 (At 11:40 AM). The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and rules made there under.

Stakeholder Relationship Committee Composition and its Meetings

The Stakeholder Relationship Committee comprises of 3 Directors i.e. Mr. Ramesh Menon as Chairman who is an Independent Director, Mr. Sandeep Parwal, Chairman Cum Managing Director, and Mr. Amit Kumar Jakhotia, Independent Director.

The Stakeholder Relationship Committee met 1 (One) time during the year 2018-2019 on November 20, 2018.

The role, terms of reference and powers of the Stakeholder Relationship Committee are in conformity with the requirements of the Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015.

Nomination and Remuneration Committee Composition and its Meeting

The composition and terms of reference of the Nomination and Remuneration Committee satisfy the provisions of Section 178 of the Companies Act, 2013. At present, the Nomination and Remuneration (NR) Committee comprises of three (3) Directors i.e. Mr. Ramesh Menon as Chairman who is an Independent Director, Ms. Honey Parwal, Director, and Mr. Amit Kumar Jakhotia, Independent Director.

Nomination and Remuneration Committee met Two (2) times during the financial year 2018-19 on August 14, 2018 and March 22, 2019.

The role, terms of reference and powers of the Nomination and Remuneration Committee are in conformity with the requirements of the Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015.

REMUNERATION POLICY

The NR Committee has formulated the criteria for determining the qualifications, attributes & independence of a Director & recommended to the Board, a policy relating to remuneration for the Directors, KMP & Senior Management Personnel.

The Nomination and Remuneration Committee while formulating the policy takes into consideration the best remuneration practices in the industry while fixing appropriate remuneration packages and for administering the long-term incentive plans.

Further, compensation package of the Directors, Key Managerial Personnel, Senior Management and other employees is designed based on the set of principles enumerated in the said policy.

An extract of the policy covering these requirements is placed at website of the Company at http://www.spacapital.com/CapitalServices/RemunerationPolicy.pdf .

VIGIL MECHANISM

In Compliance with the provisions of Section 177(9) of the Companies Act, 2013 read with the rules made there under, the Company has adopted a Whistle Blower Policy and has established the necessary vigil mechanism for Directors & employees to report genuine concerns about unethical behavior, actual or suspected fraud or violation of the Companys code of conduct. The Policy also provides for adequate safeguard against victimization of Whistle Blower who avails of such mechanism and also provides for the access to the Chairman of the Audit Committee.

Under this policy, we encourage our employees to report any reporting of fraudulent financial or other information to the stakeholders, any conduct that results in violation of the Companys Code of Business Conduct, to management (on an anonymous basis, if employees so desire).

Likewise, under this policy, we have prohibited discrimination, retaliation or harassment of any kind against any employees who, based on the employees reasonable belief that such conduct or practice have occurred or are occurring, reports that information or participates in the said investigation. No individual in the Company has been denied access to the Audit Committee.

Mechanism followed under this policy is appropriately communicated within the Company across all levels.

The Audit Committee periodically reviews the functioning of this mechanism.

INTERNAL FINANCIAL CONTROLS

Internal Financial Controls are an integrated part of the risk management process, addressing financial and financial reporting risks. The internal financial controls have been documented, digitized and embedded in the business processes.

Assurance on the effectiveness of internal financial controls is obtained through management reviews, control, self assessment, continuous monitoring by functional experts as well as testing of the internal financial control systems by the internal auditors and statutory auditors during the course of their audits. The Company believes that these systems provide reasonable assurance that Companys internal financial controls are designed effectively and are operating as intended.

Your company has in place adequate financial controls with reference to financial statements. During the year such controls were reviewed and it did not observe any reportable material weakness in the design or operation of financial controls.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

An effective internal control mechanism is imperative to good corporate governance. The Company has put in place robust internal control systems and procedures in line with the scale of operations and business to ensure timely and accurate recording of financial transactions and adherence to applicable accounting standards; optimum utilization and safety of assets; compliance with applicable laws & regulations; and an effective management information system & reviews of other systems. The Company also has in place well-defined organizational structures to facilitate clearly established roles and responsibilities for effective discharge of duties in a smooth manner.

PERFORMANCE EVALUATION

The Company has a policy for performance evaluation of the Board, Committees and other individual Directors (including Independent Directors] which include criteria for performance evaluation of Non-executive Directors and Executive Directors.

In accordance with the manner specified by the NR Committee, the Board carried out annual performance evaluation of the Board, its Committees and Individual Directors.

The Independent Directors carried out annual performance evaluation of the non-independent directors and the Board as a whole and the Chairperson.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans given and Investments made under the provisions of Section 186 of the Companies Act, 2013 are given under the respective heads of Financial Statements. The Company has not given any Corporate Guarantee (s) in respect of any loans as at March 31, 2019.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

Even though operations of the Company are not energy intensive, the management has been highly conscious of the importance of conservation of energy and technology absorption at all operational levels and efforts are made in this direction on a continuous basis. In view of the nature of activities which are being carried on by the Company, the particulars as prescribed under section 134(3](m) of the Act read with rule 8 of the Companies (Accounts) Rules, 2014 regarding Conservation of Energy and Technology Absorption are not applicable to the Company and hence have not been provided.

FOREIGN EXCHANGE EARNINGS AND OUTGO

There has been no foreign exchange earnings or outgo during the year under Report.

RELATED PARTY TRANSACTIONS

All Related Party Transactions that were entered into during the financial year 2018-19 were on "Arms length" basis and were in the ordinary course of business intended to further the Companys interest.

The Policy on Materiality of Related Party Transactions and on dealing with Related Party Transactions as approved by the Board is put up on the Companys website and can be accessed at http:// www.spacapitaI.com/CapitalServices/Policv%20on%20ReIated%20partv%20transa ctions.pdf

During the period under review, the Company had not entered into any material transaction with any of its related party. None of the transactions with any of related parties were in conflict with the Companys interest.

Members may refer Note No. 26 to the Financial Statement which sets out Related Party Disclosures pursuant to AS.

RISK MANAGEMENT POLICY

Risk Management is the continuous process of systematically identifying, quantifying, prioritizing and responding to all risks and opportunities that can affect the achievement of the Companys strategic and annual objectives. Accordingly the risk Management Policy of the company elaborates the various methods in identification, assessment, monitoring and mitigation of various risks that the company may face in its business. The companys objective is to achieve a balance between acceptable levels of risk and reward in effectively managing its operational, financial, business and other risks.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There have been no material changes and commitments, affecting the financial position of the Company which occurred during between the end of the financial year to which the financial statements relate and the date of this report.

MANAGEMENTS DISCUSSION AND ANALYSIS REPORT

Managements Discussion and Analysis Report for the year under review, as stipulated under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), is presented in a separate section, forming part of the Annual Report marked as "Annexure B".

MAINTENANCE OF COST RECORDS

As per the provisions of the Section 148(1) of the Companies Act, 2013 the Company is not required to maintain cost Records. Accordingly such accounts and records are not made and not maintained.

DIRECTORS RESPONSIBILITY STATEMENT

The Directors Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, state that—

1. in the preparation of the annual accounts for financial year ended 31st March, 2019, the applicable accounting standards have been followed and there is no material departures from the same;

2. 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 true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that year;

3. 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;

4. the Directors have prepared the annual accounts for the financial year ended 31st March, 2019 on a going concern basis.

5. The Directors have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

6. The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.

HUMAN RESOURCES

Employees are our vital and most valuable assets. We have created a favourable work environment that encourages innovation and meritocracy. It is important for us that organization culture and organization strategy are well aligned. Over a period we have developed a strong culture of transparency through constant employee communication and have developed strong performance management practices wherein best class rewards and recognition systems are deployed. We have also set up a scalable recruitment and human resources management process which enables us to attract and retain high caliber employees.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names of top ten employees in terms of remuneration drawn and names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules forms part of this Report.

Disclosures relating to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report and marked as "Annexure - C".

PREVENTION OF SEXUAL HARASSMENT POLICY

The Company has in place a Prevention of Sexual Harassment policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013.

An Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the year 2018-2019, no complaints were received by the Company related to sexual harassment

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE

There are no significant and material orders passed by the regulators or courts or tribunals that may have an impact for the company as a going concern and/or companys operations.

Mr. Kamal Kishore Somani, one of Promoter Director of the Company has filed an application u/s 241, 242 and 244 of the Companies Act, 2013, before the National Company Law Tribunal, New Delhi, Principal Bench for seeking an order to restrain the Company from convening the Extra Ordinary General Meeting on November 16, 2018 for the removal of Mr. Kamal Kishore Somani and appointment of Mr. Sanjay Joon as director of the Company, on the requisition of Dhrubtara Trading Private Limited.

However, the National Company Law Tribunal, New Delhi Principal Bench, has vide its Order dated November 16, 2018 in the Company Application No. 422/241-242/PB/2018 in the matter of Kamal Kishore Somani & Ors. Vs. SPA Capital Services Limited & Ors. has stayed the holding of the Extra Ordinary General Meeting on November 16, 2018 by the Company.

There is no Corporate Insolvency Resolution Process initiated under the Insolvency and Bankruptcy Code, 2016.

OTHER DISCLOSURES AS PER COMPANIES ACT, 2013 AND THE RULES MADE THEREUNDER ARE PROVIDED HEREUNDER

(a) Issue of Equity Shares with Differential Rights: -

During the period under review, the Company has not issued any Equity Shares with Differential Rights.

(b) Issue of Employee Stock Options: -

During the period under review, the Company has not issued any Employee Stock Options.

(c) Issue of Sweat Equity Shares: -

During the period under review, the Company has not issued any sweat equity shares as specified in Rule 8(13) of Companies (Share Capital and Debenture Rules, 2014).

SECRETARIAL STANDARDS

The Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors and ‘General Meetings, respectively, have been duly followed by the Company.

ACKNOWLEDGMENT

We take this opportunity to express our gratitude to the Shareholders & Investors of the Company for their unflinching trust and support. We would also like to thank the, Regulatory Authorities, and Banks for their cooperation and assistance. We would like to place on record their sincere appreciation and acknowledgment towards the efforts and contribution made by the personnel at all levels and their continued support and faith in the Organization. We would like to reiterate our commitment to continue to build our organization into a truly world class enterprise in all respects.

For & on behalf of the Board
SPA Capital Services Limited
Sandeep Parwal Mahaveer Prasad Mundhra
Place: New Delhi Chairman Cum Managing Director Whole time Director
Date: September 02, 2019 DIN No. 00025803 DIN No. 00642941