DIRECTORS' REPORT TO THE MEMBERS, The Board of Directors are pleased to present herewith the Twentieth Annual Report of your Company together with the Audited Financial Statements for the financial year ended 31st March, 2015. The Management Discussion and Analysis has also been incorporated into this report 2. REVIEW OF PERFORMANCE The Company has a Trading-cum-Clearing Membership of BSE Ltd and National Stock Exchange of India Ltd in their Cash and Derivative segment and Trading Member of MCX Stock Exchange Ltd in Currency Derivatives and providing Capital Market services through the network of branches and sub-brokers/ authorised persons. The Company is also a Depository Participant of Central Depository Services (I) Ltd and providing the depository services to the Clients. Total Income for the year increased by 51% to Rs. 2578.66 lakhs as compared to Rs.1703.57 lakhs last year. Total profit before tax for the year was higher by 93% to Rs.543.58 lakhs as against Rs. 281.64 lakhs last year and the net profit after tax was higher by 93% to Rs. 375.24 lakhs as against Rs. 194.28 last year. M/s. Joindre Commodities Ltd., a subsidiary of the Company, is providing services for trading in commodity futures as a members of National Commodity & Derivatives Exchange Limited, Multi Commodity Exchange of India Ltd and National Spot Exchange Limited. As regards the turnover fee liability of SEBI, please refer note no.28 (b) to Notes on Financial Statements forming parts of accounts, which is self explanatory. 3. DIVIDEND Your Directors are pleased to recommend a dividend of Rs.0.75/- per Equity Share of Rs. 10/- each (previous year Rs. Nil ). The total outgo for the current year amounts to Rs.124.90 lakhs including dividend distribution tax of Rs.21.13 lakhs (previous year Rs. Nil ) 4. SHARE CAPITAL The paid up Equity Share Capital as on 31st March, 2015 was Rs. 1383.64 Lakhs. During the year under review, the Company has not issued any shares with differential voting rights nor granted stock options nor sweat equity. As on 31st March, 2015, the Directors of the Company hold the Equity Shares of the Company as follows: 5. FINANCE Cash and cash equivalent as at 31st March, 2015 was Rs. 1997.66 lakhs. The Company continues to focus on judicious management of its Working Capital. Receivables, Inventories and other Working Capital parameters were kept under strict check through continuous monitoring. 5.1 DEPOSITS The Company has not accepted deposit falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. 5.2 PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. 6. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES The criteria prescribed for the applicability of Corporate Social Responsibility under Section 135 of the Companies Act, 2013 is not applicable to the Company. 7. BUSINESS RISK MANAGEMENT The main activities of the Company is retail stock broking through the network of branches and sub-brokers, authorised persons. The Compliance Department ensures that various existing policies regarding registration of clients, risks relating to Client level, dealing in penny stocks, exposure limit, brokerage rates, suspending/ closure of cleint's account etc. are in place in compliance with the Exchange Rules and Regulations so that business risk is minimised and there are no penal action by the Regulatory Authority. The Company has taken adequate measures to secure interest of the Clients. The Trader Terminal provided offer on line real time data such as ledger balance of stock and funds position etc. Company transfers Clients' funds and securities to their designated bank and demat account and all receipt and payment from/ to clients are through account payee cheque only and no cash payment/acceptance is permitted. Your Company's risk management system comprises of prudential norms, timely reporting and stringent controls. The various policies of the company, internal control systems ensures operational efficiency and mitigate risk. Technology is an integral part of the Company's business operations and hence to mitigate the risk to technology failure, your company has taken up steps like use of sophisticated firewalls to protect the IT infrastructure from hacking/data leakage and security breaches, multiple options for internet bandwidth and internet connectivity. The Client level risk in broking operations is managed through system. The Company has not formed Risk Management Committee and considered it as optional item as prescribed under Clause 49 of Listing Agreement. In the board meeting there is a formal discussion on risk to the business and how to mitigate the same. 8. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has an Internal Control System, commensurate with the nature of business, size, scale of its operations. The Company monitors and evaluates the efficacy and adequacy of internal control system, its compliance with operating systems, accounting procedures and other policies of the Company. Based on the report of Statutory Auditors as well as periodic internal audit function carried out by a firm of Chartered Accountant, corrective action in the respective areas is taken thereby strengthen the controls. The significant audit observations and corrective actions thereon are presented to the Audit Committee and the Board periodically. Also there is a full fledged Compliance Department headed by the qualfied professional to ensure statutory compliances. 9. VIGIL MECHANISM / WHISTLE BLOWER POLICY The Company has a vigil mechanism through a Whistle Blower Policy for Employees to deal with instance of fraud and mismanagement, if any. The details of the Whistle Blower Policy is explained in the Corporate Governance Report. 10. SUBSIDIARY COMPANY The Company has one Wholly Owned Subsidiary Company, M/s. Joindre Commodities Ltd (JCL). The salient features of financial statement of the Subsidiary, pursuant to the first proviso to sub-section 3 of section 129 read with rule 5 of the Companies (Accounts) Rule 2014, in the Form AOC-1 is given below: 11. DIRECTORS/KEY MANAGERIAL PERSONS: Mr. Dinesh Khandelwal (DIN No. 00052077) and Mr. Sunil Jain (DIN No. 00025926), Whole Time Directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Board of Directors of the Company, on the recommendations of the Nomination and Remuneration Committee, at its meeting held on 29th May 2015, re-appointed Mr. Subhash Agarwal (DIN No. 00022127), Mr. Anil Mutha (DIN No. 00051924), Mr. Dinesh Khandelwal (DIN No. 00052077), Mr. Sunil Jain (DIN No. 00025926) and Mr. Paras Bathia (DIN No. 00056197) as Whole Time Directors of the Company for a period of 5 years from 15-09-2015 liable to retire by rotation , subject to the approval of the shareholders. The Board recommends their appointment to the shareholders. All the Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) and clause 49 of the Listing Agreement. Mrs. Kishori Pawde, Head Compliance, has been designated/appointed as Chief Financial Officer. 11.1 Performance evaluation of Board and its' Committees Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, 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 and Remuneration Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. 11.2 Remuneration Policy The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report. 11.3 Meetings A calendar of Meetings is prepared and circulated in advance to the Directors. During the year Five Board Meetings and four Audit Committee Meetings were convened and held. The details of Board Meetings and various Committee Meetings are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. 11.4 Familiarisation Programme for Independent Director The Company keeps its Directors informed of the activities of the Company, its management and provides overall capital market perspective and the issues faced by the market. 12. 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(3)(c) of the Companies Act, 2013: a) that in the preparation of the annual financial statements for the year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b) that such accounting policies have been selected and applied consistently and judgement 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 31st March, 2015 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 proper internal financial controls were in place and that the financial controls were adequate and were operating effectively. f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. 13. RELATED PARTY TRANSACTIONS All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions i.e. transactions exceeding ten per cent of annual consolidated turnover as per the last audited financial statements were entered 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 at large. Accordingly the dislcosure of related party transactions as required under Section 134(3) (h) of the Companies Act, 2013 in form AOC-2 is not applicable. All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on yearly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are at arms length and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website. The policy ensures that proper reporting, approval and disclosure process are in place for all transactions between the Company and the related parties. 14. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS There are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations. As regards the turnover fee liability of SEBI, please refer note No.28(b) to Notes on Financial Statements forms parts of accounts, which is self explanatory. 15. AUDITORS 15.1 Statutory Auditors The Company's Auditors, M/s Banshi Jain & Associates, Chartered Accountants, Mumbai who retire at the ensuing Annual General Meeting of the Company are eligible for reappointment. They have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed thereunder for reappointment as Auditors of the Company. The notes on the financial statement referred to in the Auditors Report are self explanatory and do not call for any further comments. The Audtiors Report does not contain any qualification, reservations or adverse remark. 15.2 Secretarial Audit 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 M/s.P. P. Shah & Co., Practicing Company Secretaries to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as "Annexure A" 16. CORPORATE GOVERNANCE As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on corporate governance practices followed by the Company, together with a certificate from the Company's Auditors confirming compliance forms an integral part of this Report. 17. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The Company has been taking all the possible measures to conserve the energy and use and adopt best technology available in the market. I) Energy Conseration: In order to conserve the energy the Company has taken the following steps: a) replacement of old computers and office equipments with power savings devices as and when required. b) Switching of lights when not required. c) Minimizing usage of Air conditioners II) Technology absorption: The Company has full-fledged IT Department which keeps abreast of technological advancement and try and adopt the same for day to day operations. The Company offers user friendly trading terminals and trading platforms to its clients. The Company has in place Wide Area Networking, high breed lease lines, use of Vsats in remote areas, Risk Management software. III) There is no Foreign Exchange earnings and outgo durig the year 18. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as Annexure "B". 19. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES The information relating to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as Annexure "C" The information required pursuant to Section 197 read with Rule, 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, are not applicable to the Company as no Employee of the Company is in recipt of remuneration of Rs. 60,00,000/- p.a. or Rs. 5,00,000/- p.m. 20. CONSOLIDATED FINANCIAL STATEMENTS The Consolidated Financial Statements of the Company prepared in accordance with relevant Accounting Standards issued by the Institute of Chartered Accountants of India form part of this Annual Report. 21. LISTING OF SHARES The Company's shares are listed on BSE Ltd., Mumbai and the Company has paid the Listing Fees for the same. 22. CAUTIONARY STATEMENT Statements in the Board's Report and the Management Discussion & Analysis describing the Company's objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company's operations include global economy, government regulations, tax laws, economic developments within the country and market sentiment. 23. MANAGEMENT DISCUSSIONS AND ANALYSIS Forward looking statement The Statements made in this report describe the Company's objectives and projections that may be forward looking statements which are based on certain assumptions and expectations of future events. The Company's actual results, may differ materially from those projected in any such forward looking statements depending on economic conditions, government policies and decisions which are beyond the control of the Company. Segment-wise or product-wise performance The Company is engaged in broking business and the revenues generated from broking activities in the cash and derivatives segments of both the exchanges, BSE and NSE and hence there is no separate segment reporting. Outlook The participation in the Stock Market has increased and likely to continue so as to help boost the volumes. We hope, with the stable Government at the Centre and the various reforms adopted by the Government will help to bring back the retail investors in the Capital Market. The improved market sentiment will help the Company in terms of volume and profitability as there is a perception that the Indian Economy is on the path of recovery. Human resources Your company has been able to employ and retain qualified professionals by offering the challenging work environment and compensation. The Company provides in house training to its employees. 24. ACKNOWLEDGMENT The Board wishes to place on records its appreciation to all its Shareholders, Customers, Bankers, Stock Exchange Authorities and Employees for the cooperation and contributions made by them at all levels. By Order of the Board Anil Mutha (Whole Time Director) Subhash Agarwal (Whole Time Director) Registered Office: 32 Raja Bahadur Mansion, Ground Floor, Opp. Bank of Maharashtra, Mumbai Samachar Marg, Fort, Mumbai - 400 023. Place : Mumbai Date : May 29, 2015 |