DIRECTOR’S REPORT To the Members, Your Directors have pleasure in presenting the Twenty Sixth Annual Report and Audited Accounts of SKP Securities Ltd. (SKP) for the Financial Year ended March 31, 2016. DIVIDEND AND RESERVE Your Directors recommend that the Interim Dividend of 10% already paid during Financial Year 2015-2016, be treated as Final Dividend and transfer Rs. 5 lacs to General Reserve. BUSINESS PERFORMANCE Buoyancy in financial markets in general and equity market in particular, witnessed around this time last year, could not sustain momentum. Bottoming out domestic macro economic conditions encountered global macro economic, global geopolitical and domestic political headwinds. Equity markets had a gradual slide to pre-May 2014 levels, till the growth oriented Budget 2016 reversed the tide to some extent. Commodities Markets increasingly became dull with reducing volumes and customer interest. In this environment, your company's business volume, top-line and bottom-line also witnessed a slide, although administrative costs were brought down further. As a consolidation effort, its trading rights in Currency Derivatives Segment and the defunct Equities Segment of Metropolitan Stock Exchange (formerly, MCX-SX) were surrendered while we acquired trading rights on Currency Derivatives Segment of NSE. Its subsidiary viz. SKP Commodities Ltd surrendered its trading rights on Multi Commodity Exchange of India Limited and National Commodity and Derivatives Exchange of India Limited. AWARDS AND RECOGNITION Your directors are delighted to inform that your company received the CNBC TV18 UTI Mutual Fund Best Performing Regional Financial Advisor Award (East) for 2014-2015. FUTURE OUTLOOK Sustained improvement of domestic macro economics and corporate earnings on the verge of bottoming out, should abode well for financial markets and our business, going forward. We shall continue to focus on improving the quality of business. However, our mutual funds distribution business is expected to face head winds due to recently announced regulatory and tax changes. We have made adequate changes in our proprietary investments to create wealth in this environment. After a declining trend over last four years, costs may increase, going forward. MANAGEMENT DISCUSSION AND ANALYSIS In terms of the provisions of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015, the Management Discussion and Analysis forms an integral part of this Report and gives details of the overall industry structure, developments, performance and state of affairs of the Company's business. PUBLIC DEPOSITS Your Company has not accepted any public deposits from the public or the Members during the financial year and no amount on account of principal or interest on public deposits was outstanding as on the date of the Balance Sheet CONSOLIDATED FINANCIAL STATEMENTS In compliance with the Accounting Standards 21 of the Companies (Accounting Standards) Rules, 2006 and pursuant to the SEBI (Listing Obligation and Disclosure Requirements) Regulation 2015 the consolidated financial statements form a part of this Annual Report. SUBSIDIARIES & ASSOCIATES The Company has two Subsidiaries as on 31st March 2016. There are no associate companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act"). During the year, the Board of Directors reviewed the affairs of its subsidiaries. In accordance with Section 129(3) of the Act, a statement containing salient features of the financial statements of Company's subsidiaries is annexed to this report as "Annexure A" in the prescribed Form AOC-1. In accordance with section 136 of the Companies Act, 2013, audited financial statements, including consolidated financial statements and related information of the Company and audited accounts of each of its subsidiaries, are available on our website www.skpmoneywise.com . These documents will also be available for inspection during business hours at our registered office. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS AND AUDIT COMMITTEE The Details of the number of Board Meetings and Audit Committee Meetings of your Company are set out in the Corporate Governance Report which forms part of this Report. DIRECTORS AND KEY MANAGERIAL PERSONNEL During the year Mr. Subrata Kumar Mitra Independent Director of the Company resigned from the Board of the Company. The Board expresses its gratitude for his valuable contribution. Apart from this, there were no changes in the directors or Key Managerial Personnel during the year. Mrs. Manju Pachisia, Non-Executive Director, retires by rotation at the ensuing Annual General Meeting of the Company and being eligible, offers herself for re-appointment. All Independent Directors have submitted the declaration of independence, as required pursuant to section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015. ANNUAL EVALUATION OF BOARD'S PERFORMANCE: In terms of the provisions of the Companies Act, 2013 read with Rules issued there under and in terms of SEBI (Listings Obligations and Disclosures Requirements), Regulations 2015, the Board of Directors on recommendation of the Nomination and Remuneration Committee, have evaluated the effectiveness of the Board/Director(s) for the financial year 2015-16. CORPORATE GOVERNANCE REPORT Your Company has always striven to maintain the highest standards of Corporate Governance. All stipulations set out in the Listing Agreement have been adhered to by your Directors. A Report on Corporate Governance and a Certificate from the Auditors of the Company, M/s. G.P. Agrawal & Co., and confirming compliance of Corporate Governance is annexed to this Report. AUDITORS a) Statutory Auditors At the Annual General Meeting held on 27th September 2014 M/s. G.P. Agrawal & Co., Chartered Accountants, were appointed as Statutory Auditors of your Company to hold office till the conclusion of the Annual General Meeting to be held in the Calendar year 2017. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. G.P. Agrawal & Co., Chartered Accountant, as Statutory Auditors of the Company is placed for ratification by the shareholders. The Auditors' Report for Financial Year 2015-2016 does not contain any qualification, reservation or adverse remark. The Auditors' Report is enclosed with the financial statements in this Annual Report. b) Secretarial Auditors Mr. Kaushik Sonee of K. Sonee & Co. Practicing Company Secretary, was appointed to conduct the secretarial audit of the Company for the Financial Year 2015-2016, as required under section 204 of the Companies Act 2013 and Rules there under. The Secretarial audit report for Financial Year 2015-16 forms part of the Annual Report as "Annexure B" to the Board's Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. EXTRACT OF THE ANNUAL RETURN: The details forming part of the extract of the Annual Return in Form MGT- 9 in accordance with Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, is annexed to this report as "Annexure C". RELATED PARTY TRANSACTIONS (RPT) During the financial year 2015-2016, your company has entered into transaction with related party which was in the ordinary course of business and on arm's length basis, details of which are provided in Note No. 22.6 which forms an integral part of this annual report. The Form AOC 2 pursuant to Sec-134(3)(h) of the Companies Act, 2013 read with rule 8(2) of the Companies (Accounts) Rules, 2014 is set out as "Annexure D" to this report. The policy on Related Party transaction has been devised by your Company for determining the materiality of transaction with Related Parties and dealing with them. LOANS, GUARANTEES OR INVESTMENTS The Company has not given any Loans and Guarantees in terms of provisions of Section 186 of the Companies, Act 2013. The details of Investments made are given under Note No. 8 of Annual Accounts. MANAGERIAL REMUNERATION AND PARTICULARS OF EMPLOYEES The information as required under the provisions of Section 134)(3)(q) and 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 to this report as "Annexure E". There are no employees employed throughout the financial year and in receipt of remuneration of Rs. 60 lacs or more, or employed for part of the year and in receipt of Rs. 5 lacs or more a month, to be reported under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. EMPLOYEE STOCK OPTION PLAN: During the year none of the employees of the Company have exercised their stock options granted under the SKP ESOP PLAN 2010. The Disclosure in the respect of Employee Stock Option plan is annexed to this report as "Annexure F". RISK MANAGEMENT Your Company recognizes that risk is an integral part of business and is committed to managing the risks in a proactive and efficient manner. Your Company has implemented an integrated risk management approach through which it reviews and assesses significant risks on a regular basis to help ensure that there is a robust system of risk controls and mitigation in place. Senior management periodically reviews this risk management framework to keep updated and address emerging challenges. In the opinion of the Board at present there are no risks which threaten the existence of your Company. VIGIL MECHANISM The Company has a well established Whistle Blower Policy as part of vigil mechanism for Directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of the Company's Code of conduct or Ethics Policy. This mechanism also provides for adequate safeguards against victimization of Director(s)/employee(s) who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS There are no significant/material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of your Company and its operations in future. INTERNAL CONTROL SYSTEM AND COMPLIANCE FRAMEWORK The Company has an Internal Control System, commensurate with size, scale and complexity of its operations. The internal financial controls are adequate and are operating effectively so as to ensure orderly and efficient conduct of business operations. The Audit Committee in consultation with the internal auditors formulates the scope, functioning, periodicity and methodology for conducting the internal audit. Based on the internal audit report and review by the Audit Committee, process owners undertake necessary actions in their respective areas. The Board has also put in place requisite legal compliance framework to ensure compliance of all the applicable laws and that such systems are adequate and operating effectively. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING/OUTGO The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is annexed to this report as "Annexure G". LISTINGS Equity shares of the company are listed on BSE Ltd, to which your company has paid Listing Fees. DIRECTOR'S RESPONSIBILITY STATEMENT Pursuant to as per Sec 134 (5) of the Companies Act, 2013, the Directors confirm that: a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; b) the directors had 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 of the profit and loss of the company for that period; c) the directors had 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 had prepared the annual accounts on a going concern basis; and e) the directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. GRATITUDE & ACKNOWLEDGEMENTS The Board expresses its deep gratitude to clients, business associates, principals, bankers, regulators, exchanges, depositories, and shareholders for their valuable contribution towards the progress of the Company. Your Directors particularly wish to place on record their sincere appreciation of the best efforts put in by employees at all levels, but for which, the Company could not have achieved what it did during the year under review. For and on behalf of the Board Naresh Pachisia Managing Director Nikunj Pachisia Director REGISTERED OFFICE: Chatterjee International Centre 33A, J. L. Nehru Road, Level 21 Kolkata 700 071 Dated: 28th April 2016 |