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Your Directors are pleased to present the Twenty-Ninth Annual Report together with the Audited Financial Statements for the year ended March 31, 2018.
|Year ended 31.03.2018||Year ended 31.03.2017|
|Profit before Tax||444.65||511.28|
|Less: Provision for Taxation||114.00||139.40|
|Add / (Less): Deferred Tax||22.15||(19.11)|
|Profit after Tax (Net of adjustment for earlier years)||353.14||355.71|
|Other Comprehensive Income||3.05||1.31|
|Add : Retained Earning brought forward||2461.99||2153.02|
|Balance available for appropriation||2818.18||2510.04|
|Less: Dividend Paid (Including Dividend Tax)||96.09||48.05|
|Balance carried to Balance Sheet||2722.09||2461.99|
In 2017-18, your Companys total Income from Operations stood at Rs. 2067.65 lacs as against Rs. 1487.48 lacs during the previous year, an increase of 39% over last year.
Your Company continued its focus on fee based activities (Investment Banking) and income therefrom was Rs. 987.40 lacs as against Rs. 871.40 lacs during the previous year, recording an increase of 13.31%. It continues to be the thrust area for the Company.
Income from Capital Market Operation for the year has been Rs. 232.91 lacs as against Rs. 268.21 lacs during the previous year, registering a marginal decline of 13.42% over last year.
Income from Other Sources was at Rs. 95.96 lacs as against Rs. 127 lacs during the previous year.
There has not been any change in the nature of business of the Company.
Indian Accounting Standards
Pursuant to the notification dated February 16, 2015 issued by the Ministry of Corporate Affairs, the Company has adopted the Indian Accounting Standards ("Ind AS") notified under the Companies (Indian Accounting Standard) Rules, 2015. Accordingly, the Financial Statements have been prepared in compliance with Ind AS and the comparative information of the previous years have been provided as per the prescribed requirements. Accordingly, the subsidiary, associate and joint venture companies also have adopted Ind AS (irrespective of their net worth).
Dividend & Reserves
The Board of Directors is pleased to recommend a dividend of Re. 1/- per share (10%) for the year ended March 31, 2018, subject to the approval of the Members at the 29th Annual General Meeting.
During the year under review, there was no transfer to General Reserve (Previous year Rs. 20,505/-).
Employee Stock Option Scheme
SFSL Employee Stock Option Scheme, 2011 was framed and implemented in compliance with then prevailing Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 ("Guidelines"). Since then, there have been significant regulatory changes namely introduction of
(i) Companies Act, 2013 repealing erstwhile Companies Act, 1956; and (ii) Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 ("SEBI SBEB Regulations") repealing erstwhile SEBI ESOS Guidelines. Although the Scheme has been compliant with the SEBI SBEB Regulations as on today, the Scheme (prior to amendment) referred to the erstwhile Guidelines and provisions therein. Thus, it was thought expedient to update the Scheme in line with the current regulations.
The Scheme was originally approved and implemented in year 2011 and with efflux of time, it is also considered expedient to review some of its terms with a view to bring-in attractiveness, better controllability and administrative convenience. To achieve the same, amended Scheme proposes to vary some of its terms by way of (i) increasing the maximum vesting period from 3 to 4 years, (ii) changing the exercise price formula to any price not lesser than the face value of shares giving more flexibility to rationalize use of options/ equity dilution with trade off with exercise price, where-ever needed, (iii) re-defining of shorter exercise period in case of separation from employment/ service due to various reasons including death and permanent disability of grantees, and (iv) inserting/ modifying certain routine clauses to ensure administrative convenience. Further particulars about the amended Stock Option Scheme 2011 are provided in the Explanatory Statement to the Notice convening the 29th Annual General Meeting of the Company.
No shares have been issued under the aforesaid Scheme during the FY 2017-18. Disclosures with respect to Stock Options, as required under Regulation 14 of the SEBI SBEB Regulations are available on the Companys website http://wiviv.sumedhqfiscal.com under the section INVESTORS/ESOP DISCLOSURE.
Your Companys Auditors, M/s. V. Singhi & Associates have certified that the Employees Stock Option Scheme of the Company have been implemented in accordance with the Regulations and the resolutions passed by the members in this regard.
The Paid-up Equity Share Capital as at March 31, 2018 stood at Rs. 7,98,44,240/-. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. As on March 31, 2018, none of the Directors of the Company hold instruments convertible into equity shares of the Company.
Management Discussion and Analysis Report
In terms of requirements of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR), a Management Discussion and Analysis Report is attached Annexure - I forming part of this Report.
Report on Corporate Governance
In terms of requirements of Regulation 34 of the SEBI LODR, a Report on Corporate Governance together with Auditors Certificate regarding compliance of Conditions of Corporate Governance are attached as Annexure - II and Annexure - III, forming part of this Report.
Consolidated Financial Statement
In accordance with Section 136 of the Companies Act, 2013 and Regulation 34 of the Listing Regulations read with other applicable provisions, your Directors have attached the Consolidated Financial Statements of the Company for the financial year ended March 31, 2018, prepared in accordance with applicable Ind AS, which form a part of the Annual Report. The financial statements including consolidated financial statements and the audited accounts of the subsidiary are available on the Companys website http://www.sumedhajTscal.com/jtnancials.asp.
Accordingly a statement in Form AOC-1 is attached to the Financial Statements of the Company for your information.
SFSL Commodity Trading Pvt. Ltd. - Subsidiary
During the year the Company recorded Total Revenue of Rs. 17,22,525/- (previous year Rs. 17,01,538/-) and Net Profit of Rs. 10,04,544/- for the year ended 31st March, 2018 (Previous Year: Rs. 1,49,331/-).
The Company continues to be cautious while undertaking Commodity Broking business and continue to explore larger growth opportunities.
Performance of Associate Companies
Capita Finance Services Ltd.
During the year the Company recorded Total Revenue of Rs. 4,43,883/- (previous year Rs. 15,13,584/-) and Net profit of Rs. 2,55,171/- for the year ended 31st March, 2018 against Loss in the Previous Year of Rs. 6,19,485/-. The Company continues to explore growth opportunities.
SFSL Insurance Advisory Services Pvt. Ltd.
During the year the Company recorded Total Revenue of Rs. 1,56,200/- (previous year Rs. 78,394/-) and Net Profit of Rs. 92,582/- for the year ended 31st March, 2018 (Previous Year: Rs. 16,276/-).
The Company continues to explore growth opportunities.
SFSL Risk Management Services Pvt. Ltd.
During the year the Company recorded Total Revenue of Rs. 2,02,934/- (previous year Rs. 1,07,475/-) and Net Profit of Rs. 1,03,509/- for the year ended 31st March, 2018 (Previous Year of Rs. 12,566/-).
The Company continues to explore growth opportunities.
US Infotech Pvt. Ltd.
During the year the Company recorded Total Revenue of Rs. 25,44,137/- (previous year Rs. 22,51,396/-) and Net Profit of Rs. 11,56,026/- for the year ended 31st March, 2018 (Previous Year : Rs. 6,14,747/-).
The Company continues to explore growth opportunities.
Brandshoots Ventures Pvt. Ltd.
Brandshoots Ventures Pvt. Ltd. is incorporated on 06th October, 2016. During the year the Company recorded a revenue of Rs. 6,38,931/- (Previous year : Nil) and booked Net Loss of Rs. 4,49,491/- for the year ended 31st March, 2018 (Previous year : Rs. 3,86,726/-).
The Company is building requisite eco-system to support start-up entities.
In accordance with the Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 (listing Regulations), the unlisted subsidiary of this Company is not a material subsidiary. The Company has formulated a policy for determining material subsidiary. The policy has can be accessed at the Companys website at http://wwiu.sumedhafiscal.com/material_subsidiary.pdf.
Scheme of Amalgamation
The Companys Associates (Capita Finance Services Ltd., SFSL Risk Management Services Pvt. Ltd., SFSL Insurance Advisory Services Pvt. Ltd. - Transferor Companies) are in the process of amalgamation with US Infotech Pvt. Ltd. (Transferee Company, an Associate). The Scheme is having Appointed Date on April 1, 2017 and the matter is pending before the Honble National Company Law Tribunal, Kolkata Bench, Kolkata. Transferor Companies include companies other than the Associates, as aforesaid.
Corporate Social Responsibility
The Company is not yet required to comply to with the requirement associated with Section 135 of the Companies Act, 2013. Business Responsibility Report
The Company is not required to comply with the requirements associated with Regulation 34(2)(f) of the Listing Regulations, 2015.
The 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.
Diretors Responsibility Statement
To the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(3)(c) of the Companies Act. 2013:
(i) that in the preparation of the Annual Accounts for the year ended March 31, 2018, the applicable accounting standards have been followed and there are no material departure;
(ii) 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 March 31, 2018 and profits of the Company for the year ended on that date;
(iii) that Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) the annual accounts have been prepared on a going concern basis;
(v) that the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
(vi) 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.
Members of the Company at its 28th Annual General Meeting held on 23rd September, 2017, approved re-appointment of Mrs. Garima Maheshwari (DIN - 07001628) as a Director liable to retire by rotation.
In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Companys Articles of Association, Mr. Anil Kumar Birla (DIN - 00015948), Director, retire by rotation at the forthcoming Annual General Meeting and being eligible offers himself for re-appointment. The Board of Directors on recommendation of the Nomination and Remuneration Committee has recommended his re-appointment.
The tenure of Mr. R. L. Gaggar, Dr. Basudeb Sen and Mr. Prashant Sekhar Panda, Independent Directors, expires on March 31, 2019. The Company has received their respective consents for re-appointment as Independent Director as well as Notices u/s. 160 of Companies Act, 2013 proposing their re-appointments. Nomination and Remuneration Committee and the Board of Directors have recommended their re-appointments. The matter is being placed before the members at the forthcoming Annual General Meeting for their required approvals.
The Independent Directors of your Company have confirmed that they meet the criteria of Independence as prescribed under Section 149 of the Companies Act, 2013 and Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Mr. Atul Chandra Varma, Independent Director, has resigned from the Board due to his other pre-occupations. The Board acknowledged his deep involvement in the affairs of the Company and leading role in the Risk Management and Corporate Governance process of the Company.
The Company had annual evaluation of its Board, Committees and individual Directors pursuant to the provisions of Companies Act, 2013 and Listing Regulations. The Nomination and Remuneration Committee (NRC) specified the methodology for effective evaluation of performance of Board and Committees and individual Directors and also finalised the Evaluation Statement (containing required particulars as per Guidance Note issued by the SEBI) and authorized the Board to undertake the evaluation process. The Evaluation Statement was reviewed by the Independent Directors.
The performance of individual directors was evaluated on parameters, such as, number of meetings attended, contribution made in the discussions, contribution towards formulation of the growth strategy of the Company, independence of judgement, safeguarding the interest of the Company and minority shareholders etc. The Board then evaluated the performance of the Board, Committees and the individual Directors in the prescribed manner.
Number of Meetings of the Board
Four meetings of the Board were held during the year ended 31st March, 2018.
Key Managerial Personnel (KMP)
The Company is having the following Key Managerial Personnel during the year -
|Mr. Bhawani Sankar Rathi||Wholetime Director|
|Mr. Deb Kumar Sett||Company Secretary|
|Mr. Girdhari Lai Dadhich||Chief Financial Officer|
Committees of the Board
The Board of Directors has the following Committees:
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders Relationship Committee
The details of the Committees along with their composition, number of meetings and attendance at the meetings are provided in the Corporate Governance Report.
Loans, Guarantees or Investments
Details of Loans, Guarantees and Investments covered under the provisions of Section 186(4) of the Companies Act, 2013 are provided in the Notes to Financial Statements.
Vigil Mechanism / Whistle Blower Policy
The Company has a Whistle Blower Policy to report genuine concerns or grievances. The Whistle Blower Policy has been posted on the website of the Company http://iviviv.sumedhafiscal.com/ivhistle_bloiver_policy.pdf.
Remuneration and Nomination Policy
The Company is having a Nomination and Remuneration Policy for determining remuneration of its Directors, Key Managerial Personnel and Senior Management and other matters provided under Section 178(3) of the Companies Act, 2013, adopted by the Board. The details of this policy have been posted on the website of the Company http:// ivunv. sumedhafiscal. com/ remuneration_policy.pdf.
The Remuneration Policy has also been outlined in the Corporate Governance Report forming part of this Annual Report.
Related Party Transactions
All transactions entered with Related Parties for the year under review were on arms length basis and required particulars such transactions are disclosed in form AOC-2 in terms of Section 134 of the Companies Act, 2013. Further, there is no material related party transaction during the year.
All Related Party Transactions are placed before the Audit Committee (for approval) as well as the Board of Directors on a quarterly basis. There has not been any Omnibus approval for such transactions pursuant to Regulation 23 of the Listing Regulations, 2015.
The particulars of Contracts or Arrangements made with related parties pursuant to Section 188(1) of the Companies Act, 2013, furnished in Form AOC-2, is attached to this Report as Annexure - IV.
In line with the requirements of the Companies Act, 2013 and Listing Regulations, your Company has formulated a Policy on Related Party Transactions which is also available on http://iviviv.sumedhafiscal.com/policy_on_rpt. pdf. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties.
Risk Management Policy and Internal Financial Control
The Company has a risk management policy, the objective of which is to lay down a structured framework for identifying potential threats to the organisation on a regular basis, assessing likelihood of their occurrence, designate risk owners to continually evaluate the emergent risks and plan measures to mitigate the impact on the Company, to the extent possible. The framework and the system are reviewed from time to time to enhance their usefulness and effectiveness. The policy recognizes that all risks in the business cannot be eliminated but these could be controlled or minimised through effective mitigation measures, effective internal controls and by defining risk limits. A comprehensive Risk Management Framework has been put in place for each of the businesses segments of the Company which is stringently followed for the management of risks, including categorisation thereof based on their impact on the organisation. Such categorisation gives highest weightage to the risks which have the potential to threaten the existence of the Company. The risks with higher severity receive more attention and management time and it is the endeavour of the Company to strengthen internal controls and other mitigation measures on a continuous basis to improve the risk profile of the Company.
Risk Management System has been integrated with the requirements of internal controls as referred to in Section 134(5)(e) of the Companies Act, 2013 to evolve risk related controls.
The Company has neither accepted nor renewed any deposits during the year. No deposit has remained unpaid or unclaimed at the end of the year under review.
Going Concern Status
No significant and material orders have been passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its operation in the future.
Material Changes and Commitments
There has not been any material change and commitment affecting the financial position of the Company occurred between the end of the Financial Year 2017-18 and the date of the Report.
Based on quarterly reports on the status of statutory compliance from Departmental Heads/ Responsibility Centres, the Company Secretary issues Certificate under Section 205 of the Companies Act, 2013 (Act) and Rules made thereunder. The Certificate is also endorsed by the Wholetime Director of the Company and placed before the Audit Committee and Board of Directors for review.
The status of Statutory Compliance is verified by the Internal Auditors and Secretarial Auditors pursuant to Sections 138 and 204 of the Companies Act, 2013.
Annual Return of the Company pursuant to the provisions of Section 92 of the Companies Act, 2013, has been uploaded to the website of the Company and can be accessed at http://www.sumedhjafLscal.com/annual_retum. asp.
AUDITORS Statutory Auditors
M/s. V. Singhi 8s Associates, Chartered Accountants, 4, Mangoe Lane, Ground Floor, Kolkata-700001 (Firm Registration No. 311017E) were appointed as the Statutory Auditors of the Company for a period of 5 (five) consecutive years for the period from Financial Year 2017-18 to 2021-22, at the 28th AGM of the Company held on 23-Sep-17.
The Board and the Audit Committee has approved their continuation as Statutory Auditors of the Company for the Financial Year 2018-19, based on their consent and confirmation of eligibility dated May 8, 2018.
The Notes on financial statement referred to in the Auditors Report are self-explanatory and do not call for any further comments. The Auditors Report does not contain any qualification, reservation, adverse remark or disclaimer.
In terms of the requirements of Section 204 of the Companies Act, 2013 and the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, M/s. A. K. Labh & Co., Practicing Company Secretaries has been re-appointed to conduct the Secretarial Audit of the Company for FY 2017-18.
Based on the consent received from M/s. A. K. Labh & Co. and recommendation of the Audit Committee, the Board has appointed them as Secretarial Auditor of the Company for FY 2018-19.
The Secretarial Audit Report for FY 2017-18 (attached as Annexure - V) is free from any qualification.
The Company is not engaged in production of goods or providing services pursuant to Section 148 of the Act and therefore not required to comply with the requirements thereunder.
Boards Response on Auditors Qualification, Reservation or Adverse Remark or Disclaimer Made
There are no qualifications, reservations or adverse remarks made by the Statutory Auditors in their report or by the Practicing Company Secretary in their Secretarial Audit Report. During the year, there has been no instances of frauds reported by Auditors under section 143(12) of the Companies Act, 2013.
Significant and Material Orders Passed by the Courts/ Regulators
Disclosure Under the Sexual Harassment of Women At Workplace (Prevention, Prohibition And Redressal) Act, 2013
The Company has a Prevention of Sexual Harassment Policy in line with the requirements of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the period under review, no complaint was received by the Internal Complaint Committee.
Conservation of Energy and Technology Absorption
Since the Company does not own any manufacturing facility, the other particulars relating to conservation of energy and technology absorption stipulated in the Companies (Accounts) Rules, 2014 are not applicable.
Foreign Exchange Earning and Outgo
Foreign Exchange earnings and outgo during the year under review were Rs. 6.96 Lacs and Rs. 4.94 Lacs, respectively (previous year Rs. 77.47 Lacs and Rs. 9.10 Lacs, respectively).
The Company, as an Intermediary (Merchant Banker, Stock Broker, Depository Participant, Portfolio Management Service provider) is registered with the Securities and Exchange Board of India (SEBI) and is required to comply with the prescribed risk management measures. Accordingly, the quarterly status of various risks being faced by the Company and measures for mitigation thereof are placed before the Audit Committee and Board of Directors of the Company, for review and appropriate measures. Further details about the pertinent risks are contained in the statement of Management Discussion and Analysis (Annexure I).
Particulars of Employees
The ratio of the remuneration of each Director to the median employees remuneration and other particulars or details of employees pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are attached to this Report as Annexure VI. None of the employees of the Company is in receipt of remuneration coming under purview of the said Section/Rule.
We acknowledge our appreciation to Shareholders, Bankers, Regulators, National Stock Exchange, Multi-Commodity Exchange, Bombay Stock Exchange and Clients for their continued support. The Board also takes this opportunity to express its whole-hearted appreciation of the efforts put in by the employees at all levels. We look forward to the future with confidence and stand committed to creating a brighter future for all shareholders.
On Behalf of the Board
Ratan Lai Gaggar
Place : Kolkata
Date : 11th August, 2018