Modern Shares Director Discussions


TO THE MEMBERS OF MODERN SHARES AND STOCKBROKERS LIMITED

(CIN: L45200MH1939PLC002958)

The Directors take pleasure in presenting the Eighty-Fourth Annual Report together with the audited financial statements for the year ended March 31, 2023.

1. FINANCIAL RESULTS

31/03/2023 31/03/2022
Rupees () Rupees ()
Revenue from Operations 2,40,13,879 2,73,31,000
Other Income 56,67,996 52,89,254
Total Income 2,96,81,875 3,26,20,254
Operating Expenditure 2,69,57,712 2,86,74,311
Depreciation 2,70,726 2,08,536
Total Expenses 2,72,28,438 2,88,82,847
Profit/ (Loss) Before 24,53,437 37,37,408
Exceptional Items and
Taxation
Exceptional Items 1,57,069 -
Tax Expenses (Net) 4,64,850 9,17,837
Other Comprehensive (2,36,051) 3,15,511
Income (Net of Tax)
Profit/ (Loss) After Tax 15,95,467 31,35,081
Attributed to Shareholders
of the Company
Opening Balance of 5,12,07,637 4,80,72,556
retained earnings*
Closing Balance of 5,28,03,104 5,12,07,637
retained earnings

* Previous year figures regrouped recast wherever applicable

2. BUSINESS ACTIVITIES AND OPERATIONS

The Companys operations resulted in a profit of Rs. 15.95 Lakhs as against Profit of Rs. 31.35 Lakhs in the previous year, after providing for depreciation of Rs. 2.71 Lakhs (previous year Rs. 2.09 Lakhs) and making net provision for taxation of Rs.4.65 Lakhs as against (previous year Rs 9.18 Lakhs), Your Board of Directors has decided not to transfer any amount to the Reserves for the year under review in view of the marginal profit incurred during the year.

While the year 2020-21 was about lockdowns and re-openings, 2021-22 was about sharp recoveries in economies and stock exchanges worldwide; in contrast 2022-23 was all about consolidation and taking fresh stock of the financial situation globally.

The company has had to weather the storm as markets have been up and down in the past financial year. While we came out well post covid and the following year, this last year was all about managing expenses as we did see a slowdown in overall market activities. We have heard how multiple depository accounts were opened in

2021-22 and subsequently many have been closed in the last year. However, it is not all gloom and doom as we are witnessing renewed interest by the retail segment in the current financial year.

We also saw a slowdown in the 4th quarter of last financial year as far as Institutional activity is concerned which is once again picking up over the last month. The year will be remembered for rotation of stocks/sectors across portfolios with strength in Bank Nifty and the Midcap Index. Globally it was a year dominated by the conflict news from Ukraine and Russia and also one where headline news was dominated by Inflation and

Interest rate hikes worldwide. We saw a concerted effort by central banks across the globe to tame

Inflation by rising interest rates which was one of the reasons for market volatility. Our own RBI too has continuously raised rates in line with the rest of the world. We are seeing a drop in inflation due to high base effect and also as crude prices have cooled off overall commodity prices are lower than last year.

The India growth story is intact and continues to attract foreign investment. Given global uncertainty, India is well positioned to gain from external rift between various countries.

The general theme of India as an Investment destination is picking up pace and we expect the same to continue in the long run. The government also continues to emphasize on infrastructure spending and growth. We are positive that given these factors, the Stock Market will remain positive in the next few years to come.

As far as our company is concerned, we will continue to strive to build on our performance and always aim to do better.

3. DIVIDEND

The Board of Directors has decided not to recommend any dividend on the Equity Shares of the Company during the year under review.

4. DIRECTORS

In accordance with the Articles of Association of the Company, Mr. Narendra Hira Advani (DIN: 03351909) who is longest in the office retires by rotation and being eligible for re-appointment and has indicated his willingness to serve, if reappointed.

Pursuant to Section 152(6) of the Companies Act, 2013 and the Articles of Association of the Company, approval of members is also being sought for his reappointment as Non-Executive Director on the Companys Board.

Both Independent Directors have given declaration that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 25 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

5. DEPOSITS

The Company has not accepted any deposits falling under the ambit of Section 73 of the Companies Act, 2013 (hereinafter referred to as ‘The Act) and the Rules framed thereunder during the year under review.

6. BOARD EVALUATION

Pursuant to the provisions of the Companies

Act, 2013 and Regulation 25 (4) & 26 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration, and Stakeholders & Grievance Committees. The manner in which the evaluation has been carried out has been explained herein below:

Dates on which Board Meetings held

Strength of the Board No. of Directors
Present
27th May, 2022 6 6
05th August, 2022 6 5
11th November, 2022 6 5
08th February, 2023 6 6

A structured questionnaire was prepared after inputs received from the Directors, covering various aspects of the Boards functioning such as adequacy of the composition of the Board and its committees, Board culture, execution and performance of specific duties, obligation and governance.

A separate exercise was carried out to evaluate the performance of Individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independent judgment, safeguarding the interest of the Company and its stakeholders, etc. The performance evaluation of Independent

Directors was carried out by the entire Board. The performance of Non-independent Directors was carried out by the Independent Directors who also reviewed the performance of the compliance department and had expressed their satisfaction with the evaluation process.

2 Number of Board Meetings held:

The Board of Directors duly met 4 (Four) times during the financial year from 1st April, 2022 to 31st March, 2023. The dates on which the meetings were held are as follows:

2 Relevant Details of Directors

Sr. No. Name of the Director

Date of Appointment Category Number of Directorship held in other Indian Companies Committee(s) Position Member and Chairperson in all Companies

1 Mr. Ashok Tikamdas Kukreja

18/02/2015 Chairperson & Non- Executive Director/ Independent 2 6 and 5

2 Mr. Anil Sugno Manghnani

25/10/2000 Whole-time Director 2 1

3 Mr. Narendra Hira Advani

30/05/2011 Non-Executive Director 2 -

4 Mr. Ghansham Shewakramani

25/01/1995 Non-Executive Director 20 1

5 Mrs. Roshan Advani Patheria

31/01/2007 Woman Non- Executive Director - 1

6 Mr. Pankaj Rajnikant Ved

01/04/2019 Non-Executive Director/ Independent 4 3

2 Attendance of Directors at Board Meetings and Virtual Annual General Meeting held through VC/ OAVM:

Name of the Director

Attendance at the Board Meeting held on

Attendance at the AGM held on
27/05/2022 05/08/2022 11/11/2022 08/02/2023
Virtual Virtual Virtual Physical 23rd September, 2022
Mr. Anil Sugno Manghnani Attended Attended Attended Attended Attended
Mr. Narendra Hira Advani Attended Attended Leave Attended Attended
Mr. Ashok Tikamdas Kukreja Attended Attended Attended Attended Attended
Ms. Roshan Advani Patheria Attended Leave Attended Attended Attended
Mr. Ghansham Shewakramani Attended Attended Attended Attended Attended
Mr. Pankaj Rajnikant Ved Attended Attended Attended Attended Attended

2 Audit Committee Member:

Name of the Member 27/05/2022 05/08/2022 11/11/2022 08/02/2023
Virtual Virtual Virtual Physical

Mr. Ashok Tikamdas Kukreja (Chairperson)

Attended Attended Attended Attended
Mr. Pankaj Rajnikant Ved Attended Attended Attended Attended
Mr. Anil Sugno Manghnani Attended Attended Attended Attended

2 Stakeholder & Grievance Committee Member:

Name of the Member 26/05/2022 04/08/2022 10/11/2022 08/02/2023
Virtual Virtual Virtual Physical

Mr. Ashok Tikamdas Kukreja (Chairperson)

Attended Attended Attended Attended
Mr. Ghansham Shewakramani Leave Attended Leave Attended
Mr. Pankaj Rajnikant Ved Attended Attended Attended Attended

2 Nomination & Remuneration Committee Member:

Name of the Member 26/05/2022 08/02/2023
Virtual Physical
Mr. Ashok Tikamdas Kukreja Attended Attended
(Chairperson)
Mr. Pankaj Rajnikant Ved Attended Attended
Mrs. Roshan Advani Patheria Attended Attended

2 Independent Directors(in Person)

Name of the Member 08/02/2023
Mr. Ashok Tikamdas Kukreja (Chairperson) Attended
Mr. Pankaj Rajnikant Ved Attended

7. DIRECTORS RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(5)(c) of the Companies Act, 2013: a) that in the preparation of the Annual Financial

Statements for the year ended March 31, 2023, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

b) that such Accounting Policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made 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, 2023 and of the profit of the Company for the year ended on that date;

c) that proper and sufficient care has been taken 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;

d) that the Annual Financial Statements have been prepared on a going concern basis;

e) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively and

f) that proper internal financial controls were in place and that the financial controls were

adequate and were operating effectively.

8. BUSINESS RISK MANAGEMENT Although the Company has long been following the principle of risk minimization as is the norm in every industry, it has now become a compulsion.

Therefore, in accordance with Regulation 21 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Board members were informed about risk assessment and minimization procedures after which the Board formally adopted steps for framing, implementing and monitoring the risk management plan for the Company.

The main objective of this policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues. In todays challenging and competitive environment, strategies for mitigating inherent risks in accomplishing the growth plans of the Company are imperative.

The common risks inter alia are: Regulations, competition, Business risk, Technology obsolescence, Investments, retention of talent and expansion of facilities. Business risk, inter-alia, further includes financial risk, political risk, fidelity risk and legal risk. As a matter of policy, these risks are assessed and steps as appropriate are taken to mitigate the same.

9. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit (IA) function is to maintain its objectivity and independence, the Internal Audit function reports to the Chairperson of the Audit

Committee of the Board.

The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies of the Company. Based on the report of internal audit function, each department undertakes corrective action in their respective areas and thereby strengthens the controls.

Significant audit observations and corrective actions thereon are presented to the Audit

Committee of the Board.

In order to strengthen the system of Internal

Control and provide Board of Directors with an added ability to oversee internal controls, Internal

Financial Control (IFC) system was put in place in accordance with the requirements of Section 134(5)(e) of the Companies Act, 2013. Systems of Internal Control were implemented, considering the framework suggested in Guidance Note on Audit of Internal Financial Controls over the

Financial Reporting issued by The Institute of Chartered Accountants of India, to address its operational and financial risk.

10. VIGIL MECHANISM/ WHISTLE BLOWER POLICY

In pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013, a Whistle Blower Policy for directors and employees to report genuine concerns has been established. The Policy has been uploaded on the website of the Company at www.modernshares.com under investors/ policy documents/ Whistle Blower

Policy link.

11. RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on an arms length basis and were in the ordinary course of business. An omnibus approval was taken for one (1) year from Audit Committee and Board at their Meeting held on 27/05/2022. There are no materially significant Related Party Transactions made by the Company with Promoters, Directors,

Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company. None of the Directors have any pecuniary relationships or transactions vis-?-vis the Company.

In compliance under the provisions of the

Companies Act, 2013, transactions with related parties entered by the Company in the normal course of business are periodically placed before the Audit Committee for its omnibus approval and the particulars of contracts entered during the year in Form AOC-2 is enclosed as Annexure- A to this report.

12. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no orders passed by the Regulators/

Courts which would impact the going concern status of the Company and its future operations.

13. AUDITORS

13.1 STATUTORY AUDITORS

M/s. B D G & Co LLP (Formerly known as B

D G & Associates), Chartered Accountants (Firm Reg. No. 119739W) have been appointed as Statutory Auditor of the Company at the Annual General Meeting held on September 23, 2022 for a period of five (5) years up to the conclusion of the

Annual General Meeting to be held in the year 2027. The requirement for seeking ratification of the members for continuation of their appointment has been withdrawn consequent upon the changes made by the Companies (Amendments) Act, 2017 with effect from May 7, 2018. Hence the resolution seeking ratification of the members for their appointment is not being placed at the ensuing Annual General Meeting.

. The Auditor Report on the Standalone Financial Statements for the financial year ended March 31, 2023 does not contain any qualification, reservation or adverse remark requiring any explanations / comments by the Board of Directors.

13.2 SECRETARIAL AUDITORS

The Secretarial Audit Report for the Financial Year ended March 31, 2023 is annexed herewith as Annexure- B.

Pursuant to the provisions of Section

204 of the Companies Act, 2013 and the Companies (Appointment and

Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Janak Pandya, Company Secretary in Practice (CP No.: 5940, ACS: 10841) (Peer Review Certificate No. 1250/2021) to undertake the Secretarial Audit of the Company for the Financial Year ended March 31, 2024.

13.3 INTERNAL AUDITORS

M/s Jayant & Associates, Chartered accountants (Firm Registration No. 104099W) under Section 138 of Companies Act, 2013 appointed as Internal Auditors for the Financial Year ended March 31, 2024 to perform the duties as Internal Auditors of the Company and their report is reviewed by the Audit Committee from time to time.

M/s. Kamlesh P Mehta Associates, Chartered Accountants (Firm Registration No: 120063W) appointed as Internal Auditors for NSE & BSE Regulatory Audit required for Stock brokers by SEBI for the Financial Year ended March 31, 2024 to perform the duties as Internal Auditors of the Company and their report is reviewed by the Audit Committee from time to time.

14. FIXED ASSETS

The Net Fixed Assets of the Company as at the close of the financial year stood at 11.15 Lakhs (Previous year 9.92 Lakhs). In compliance with the Accounting Standard AS-28 relating to "Impairment of Assets", the Company has reviewed the carrying amount of its fixed assets year asattheendofthefinancial

15. CORPORATE GOVERNANCE & ANNUAL SECRETARIAL COMPLIANCE REPORT AND DISCLOSURE OF RELATED PARTY TRANSECTIONS

As per Regulation 15(2)(a) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time, the compliance with the Corporate Governance provisions shall not apply in respect of the listed entity having paid up equity share capital not exceeding 10 Crores and Net Worth not exceeding 25 Crores as on the last day of the Previous Financial Year. Since the Companys Paid up Equity capital and the Net Worth fall below the limit mentioned above, compliance with

Corporate Governance is not applicable to the

Company. Accordingly, as per BSE clarification vide Circular LIST/COMP/12/2019-20 Companies to which the Regulation 15(2)(a) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are not applicable, Regulation 24A of SEBI (Listing Obligations and Disclosure

Requirements) (Amendments) Regulations, 2018 is also not applicable and not required to submit the Annual Secretarial Compliance Report as well as Disclosure of related party transaction on Consolidated basis under regulation 23(9) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

16. ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3) (a) of the Act, the Annual Return as on March 31, 2023 is available on the Companys website on www.modernshares.com.

17. COMPLIANCE WITH SECRETARIAL STANDARDS

The Board of Directors affirm that the Company has complied with the applicable Secretarial Standards issued by the Institute of Company

Secretaries of India (SS-1 & SS-2) respectively as amended relating to Meetings of the Board and its Committees which have mandatory application and General Meeting.

18. REMUNERATION RATIO OF THE DIRECTORS/ KEY MANAGERIAL PERSONS (KMP)/ EMPLOYEES

The information required pursuant to Section 197 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and the Companies (Particulars of Employees) Rules, 1975, in respect of employees of the Company and Directors is furnished hereunder:

There were 19 permanent employees on the rolls of the Company as on 31 March, 2023.

Sr. Name No. D e s i g - nation Remuner- ation paid FY 2022-23 ( Lakhs) Remu- neration paid FY 2021-22 ( Lakhs) Increase/ decrease In Remu- neration From previous Year (. Lakhs) Ratio/ Times per Median of emp loyee Remun- eration

1 Mr. Anil Sugno Manghnani

Whole- time Director 10.81 10.81 NIL 1.51

2 Mr. Radha- krishna N Shenvi

CFO 10.08 10.08 NIL 1.60

3 Mrs. Vibha Axit Gandhi

Company Secretary & Com- pliance Officer 2.29 2.29 NIL 1.61

19. DISCLOSURE

The particulars of the conservation of energy, technology and absorption, foreign exchange earnings and outgo as required u/s. 134(3)(m) of the Companies Act, 2013 and Rule 8(3) of the Companies (Accounts) Rules, 2014, the same are not applicable to the Company. The information required pursuant to Section 197(12) read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, is not given as none of the employees of the company exceeds the limit.

20. DEMATERIALISATION OF SHARES 98.19% of the Companys paid-up equity share capital is in dematerilised form as on 31st March, 2023 and balance 1.81% is in physical form. The Companys Registrar and Share Transfer Agents are M/s. Link Intime India Pvt. Ltd. having office at C-101, 247 Park, LBS Marg, Vikhroli (W), Mumbai - 400083.

21. TRANSFER OF EQUITY SHARES UNPAID/ UNCLAIMED DIVIDEND TO IEPF

In line with the statutory requirements, the

Company has transferred to the credit of the

Investor Education and Protection Fund set up by the Government of India, equity shares in respect of which dividend had remained unpaid/ unclaimed for a period of seven (7) consecutive years within the time lines laid down by the

Ministry of Corporate Affairs. Unpaid/ unclaimed dividend for seven (7) years or more has also been transferred to the IEPF pursuant to the requirements under the Act.

22. ACKNOWELDGEMENTS

The Board of Directors take this opportunity to thank the employees for their dedicated service and contribution towards the growth of the Company, our sincere appreciation to Institutional and Retail Clients for their patronage to our Company and to the Shareholders for their continuous support.

23. CAUTIONARY STATEMENT

The statements contained in the Boards Report contain certain statements relating to the future and therefore, are forward looking within the meaning of applicable securities, laws and regulations. Various factors such as economic conditions, changes in government regulations, tax regime, other statues, market forces and other associated and incidental factors may however lead to variation in actual results.

For and on behalf of the Board of Directors

Sd/- Sd/-
Anil Sugno Manghnani Ghansham Shewakramani
Whole-time Director Director
(DIN: 00012806) (DIN: 00413343)

Mumbai, dated May 19, 2023

Registered

Wankhede Stadium, North Stand, Staircase No. 13, ‘D Road, Churchgate,

Mumbai - 400020

CIN: L45200MH1939PLC002958

Website: www.modernshares.com