DIRECTORS' REPORT TO, THE MEMBERS OF VERTEX SECURITIES LIMITED Your Directors are pleased to present the 22nd Annual Report of the Company along with Audited Financial Statements, for the year ended 31st March, 2015. PERFORMANCE REVIEW: During the year ended 31st March, 2015, your Company earned consolidated revenue of Rs. 596.49 Lacs as compared to Rs. 583.50 Lacs in the previous year. The consolidated operations have recorded a loss of Rs. 33.33 Lacs as compared to a loss of Rs. 152.91 Lacs in the previous year. The net loss suffered is being carried over to the Balance Sheet. Detailed information on operational and financial performance, etc. of the Company for the financial year is given in the Management Discussion and Analysis which is set out separately with the Directors' Report. DIVIDEND: Due to inadequacy of profits your Directors regret their inability to recommend any Dividend for the year. CONSOLIDATED ACCOUNTS: The Consolidated Statement of Profit and Loss for the year ended 31st March, 2015 and the Balance Sheet as on that date as required under Listing Agreement is also enclosed herewith. During the year, the Issued, Subscribed and Paid Up Equity Share Capital of the Company has increased due to conversion of 5,206,454 0.5% Fully Convertible Preference shares of Rs. 10/-each into 26,032,270 Equity Shares of Rs. 2/- each. There is no change in the Total Authorised and Paid Up Equity Share Capital of the Company. OPERATIONS OF SUBSIDIARY: Vertex Commodities and Finpro Private Limited: During the year ended 31st March, 2015 the subsidiary company Vertex Commodities And Finpro Private Limited had total revenue of Rs. 9,191,485 and loss of Rs. 552,521 as against the total revenue of Rs. 1,33,89,365 and loss of Rs. 53,86,350 respectively in the previous year. In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary company are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary company and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary company will also be kept open for inspection at the Registered Office of the Company and that of the Subsidiary Company. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary company. LISTING ON STOCK EXCHANGE The Company's Equity Shares continue to be listed on The BSE Ltd. DIRECTORS AND KMP: In accordance with the provisions of Section 152 of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014, Mr. U. Ramachandran, Director of the Company (DIN: 00493707), retires by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment and your Board has recommended his re-appointment. Mrs. Latha Anand was appointed as an Additional Independent Woman Director of the Company pursuant to Section 161 of the Companies Act, 2013 by the Board of Directors on 12th May, 2015. In accordance with the provisions of Section 149 of the Companies Act, 2014 read with Companies (Appointment and Qualification of Directors) Rules, 2014, the approval of Members is being sought at the ensuing Annual General Meeting of the Company for the appointment of Mrs. Latha Anand as Independent Director who shall hold office for a term up to five consecutive years on the Board of the company and will not be liable to retire by rotation. Pursuant to Clause 49(g) (1) of the Listing Agreement with the Stock Exchange, brief resume of the Directors proposed for appointment/re-appointment has been given in the Notice convening the Annual General Meeting. In accordance with the provisions of Section 203 of the Companies Act, 2013, Ms. Aswathi C Madhavadas, an Associate Member of the Institute of Company Secretaries of India, was appointed as Company Secretary and Compliance Officer of the Company w.e.f. 12th May, 2015. MANAGEMENT DISCUSSION AND ANALYSIS The Management Discussion and Analysis Report for 201415, as required under Clause 49 of the Listing Agreement, forms part of the Annual Report and is attached separately as Annexure A. REPORT ON CORPORATE GOVERNANCE The report on Corporate Governance as per the requirement of the Listing Agreement forms an integral part of this Annual Report. The Report on Corporate Governance is provided as Annexure B AUDITORS' REPORT Referring to observations a) and b) given under "Basis for Qualified Opinion" in the Independent Auditors Report, it is clarified that: (a) as stated in notes forming part of accounts the management has evaluated long term investments and confirm that there exist no circumstances which warrant any provision in the accounts for a possible diminution in the value. (b) as the company has initiated legal actions for the recovery of the dues, it will not be prudent to make any provisions as the cases are in various stages in different Courts. SECRETARIAL AUDIT A Report on Secretarial Audit is appended to this report as Annexure C Referring to the qualifications by the Secretarial auditors, it is clarified that: i. The Company has not yet found a suitable person for the post of Chief Financial Officer (CFO). However, the appointment of CFO is under process as the requirement is mandated by the Companies Act, 2013. ii. The change in shareholding of the Promoters and Top Ten Shareholders, which is to be intimated to the Registrar of Companies in the prescribed form pursuant to Section 93 of the Companies Act, 2013, is delayed as there were some discrepancies in the Distinctive Numbers of the Shares provided by the Registrar and Transfer Agents and the Stock Exchange. The matter is clarified and the prescribed return have since been filed. EXTRACT OF ANNUAL RETURN An extract of Annual return in Form MGT-9 is appended to this report as Annexure D BOARD COMMITTEES: The Board of Directors of the Company had already constituted various Committees in compliance with the provisions of the Companies Act, 2013 and Listing Agreement, such as Audit Committee, Remuneration and Compensation Committee, Share Transfer and Stakeholders' Relationship Committee. During the year under review, in compliance with the above said provisions, the Board has re-constituted Remuneration and Compensation Committee into Nomination, Remuneration and Compensation Committee. The Committee acts as a Nomination and Remuneration Committee under Section 178(1) of the Companies Act, 2013 and as Compensation Committee under Regulation 5 of Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Share Purchase Scheme) Guidelines, 1999. All decisions pertaining to the constitution of the Committees, appointment of members and fixing of terms of reference/role of the Committees are taken by the Board of Directors. Details of the role and composition of these Committees, including the number of meetings held during the financial year and attendance at meetings, are provided in the Corporate Governance Report, which forms a part of the Annual Report. MEETINGS The details regarding the meeting of the Board of Directors, Committees of the Board and meeting of Independent Directors are provided in the Report on Corporate Governance, which forms part of the Annual Report. NOMINATION AND REMUNERATION POLICY The Nomination and Remuneration Policy recommended by the Nomination and Remuneration Committee is duly approved by the Board of Directors of the Company and the policy is attached to the Board's Report as Annexure E VIGILANCE MECHANISM AND WHISTLE BLOWER POLICY The Company has a Vigilance Mechanism and Whistle Blower Policy to deal with instances of fraud and mismanagement. The policy is uploaded in the website of the Company. RISK MANAGEMENT Pursuant to the requirement of Section 134 of the Companies Act, 2013, the Company has in place a Risk Management Policy, to identify and evaluate business risk and opportunities. The policy has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company Level. PERFORMANCE REVIEW OF BOARD, COMMITTEE AND INDIVIDUAL DIRECTORS Pursuant to the provisions of Section 134(3) (p), Section 149(8) and Schedule IV of the Companies Act, 2013 and Clause 49 of the Listing Agreement, annual performance evaluation of the Directors as well as the Committees of the Board has been carried out. The performance evaluation of the Independent Directors was carried out by the entire Board of Directors of the Company and the performance evaluation of the Chairman and Non-Independent Directors was carried out by the Independent Directors. STATEMENT OF DECLARATION ON INDEPENDENT DIRECTORS The Board of Directors declares that the Independent Directors of the Company are persons: • who possess relevant expertise and experience to be an independent director in the Company; • who was/were not a promoter of the company or its holding, subsidiary or associate company; • who is not related to promoters / directors / persons occupying management position at the board level or level below the board in the company, its holding, subsidiary or associate company; • who, apart from receiving director sitting fees / remuneration, has/had no pecuniary relationship / transactions with the company, its promoters, its directors, its senior management or its holding, subsidiary or associate company, or their promoters, or directors, during the two immediately preceding financial years or during the current financial; • none of whose relatives has or had any pecuniary relationship or transaction with the company, its holding, subsidiary or associate company, or their promoters, or directors, amounting to 2% or more of its gross turnover or total income or Rs. 50 Lacs or such higher amount as may be prescribed, whichever is lower, during the two immediately preceding financial years or during the current financial year; • who, neither himself nor any of his relatives: a) holds or has held the position of a key managerial personnel or is or has been employee/executive of the company or its holding, subsidiary or associate company in any of the three financial years immediately preceding the financial year; b) is or has been an employee or proprietor or a partner, in any of the three financial years immediately preceding the financial year of; a. a firm of auditors or company secretaries in practice or cost auditors of the company or its holding, subsidiary or associate company; or b. any legal or a consulting firm that has or had any transaction with the company, its holding, subsidiary or associate company amounting to 10% or more of the gross turnover of such firm; c) holds together with my relatives 2% or more of the total voting power of the company; or d) is a Chief Executive or director, by whatever name called, of any nonprofit organization that receives 25% or more of its receipts from the company, any of its promoters, directors or its holding, subsidiary or associate company or that holds 2% or more of the total voting power of the company; or • who is not a material supplier, service provider or customer or a lessor or lessee of the company; • who is not less than 21 years of age. AUDITORS M/s. Rahul Gautam Divan & Associates, Chartered Accountants, Mumbai will retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness for reappointment. Your Directors recommend their appointment. EMPLOYEE STOCK OPTION SCHEME (ESOP) Disclosures as per the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, and disclosure pursuant to the Rule 12(9) of Companies (Share Capital and Debenture) Rules, 2014 are provided as Annexure F to the Board's Report. PENALITIES/PUNISHMENTS OR COMPOUNDING OF OFFENCES There are no significant and material orders passed by the Courts, Tribunal or other Regulators impacting the going concern status and company's operations in future. PARTICULARS OF LOANS, GUARANTEES OR INVESTEMENTS MADE U/S 186 Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are provided in the Notes to Financial Statements of the Company. RELATED PARTY TRANSACTIONS All Related Party Transactions attracting compliance under Section 188 of the Companies Act are placed before the Audit Committee as well as before the Board for approval. The disclosures on the Related Party Transactions in the Form AOC-2 are provided as Annexure G. PUBLIC DEPOSITS Your Company has not accepted any deposits from the public, or its employees during the year under review. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF) Your Company has, during the year, transferred an amount of Rs. 9,666/- to Investor Education and Protection Fund (IEPF), in compliance with the provisions of the Companies Act, 1956. The amount represents the dividend for the year 2006-07 which remained unclaimed by the members of the Company for a period exceeding 7 years from its due date of payment. PARTICULARS OF EMPLOYEES AND OTHER ADDITIONAL INFORMATION The information required under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached herewith as Annexure H. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO In view of the nature of activities which are being carried on by the Company, the disclosures regarding Conservation of Energy & Technology Absorption are not applicable to the Company. SEXUAL HARASSMENT The Company has constituted an Internal Complaints Committee as per Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year, there were no cases filed pursuant to the above said provisions. MATERIAL CHANGES There are no material changes affecting the financial position of the Company between the date of Financial Statements and the Board's report. DIRECTORS' RESPONSIBILITY STATEMENT: In accordance with the provisions of Section 134(5) of the Companies Act, 2013, your Directors confirm that:- a) in the preparation of the Annual Accounts for the year ended 31st March, 2015, applicable Accounting Standards have been followed along with proper explanation relating to material departures, wherever necessary. b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and the loss of the Company for the year ended 31st March, 2015. c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. d) the Directors have prepared the annual accounts on an ongoing concern basis. e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial control is adequate and was operating effectively. f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. ACKNOWLEDGEMENT Your Directors would like to express their gratitude to the officials of National Stock Exchange of India Limited, Bombay Stock Exchange Limited, Cochin Stock Exchange, Over the Counter Exchange of India, National Securities Depository Limited, Central Depository Services (India) Limited and also to the Shareholders and Bankers. Your directors recognize and appreciate the efforts and hard work of all the employees of the Company and their continued contribution it its progress. For and On behalf of the Board of Directors Kumar Nair Chairman and Managing Director (DIN: 00320541) Place : Cochin-18 Date : 27.07.2015 |