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Amit Securities Ltd.

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Annual Report

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Director’s Report

Dear Members, The Directors take pleasure in presenting their 23rd Annual Report together with the audited financial statements for the year ended March, 31 2015 and the Management Discussion and Analysis has also been incorporated into this Report. 1. HIGHLIGHTS OF PERFORMANCE * Total income for the year increased by 18.93% to Rs 560.50 Lakhs as compared to Rs. 471.30 Lakhs in the previous year; * Income from operations for the year was Rs 542.25 Lakhs as compared to Rs.471.28 Lakhs in the previous year, with growth of 15.05%; * Profit before tax for the year was Rs 58.49 Lakhs as compared to Rs.12.85 Lakhs in the previous year, with growth of 355.17%; * Profit after tax for the year was Rs 45.59 Lakhs as compared to Rs. 9.73 Lakhs previous year, with growth of 368.55%. 2. FINANCIAL RESULTS Rs. In Lacs Particulars Year ended on 31.03.2015 31.03.2014 Revenue from Operations (Net) 560.5 471.3 and other income Profit Before Tax (PBT) 58.49 12.85 Provision for Tax 12.89 3.12 Profit After Tax (PAT) 45.59 9.73 Less: Minority Interest 0 0 Balance brought forward 165.78 156.05 from previous year Profit available for 211.36 165.78 Appropriations Surplus carried to the 211.36 165.78 next year''s account Paid up Equity Share Capital 710 710 EPS (Equity Shares of Rs. 10/- 0.64 0.14 each) Basic & Diluted (in Rs.) 3. DIVIDEND Due to requirement of the long term financial resources your directors proposes to preserve the profits for the growth of the company and do not recommend any dividend for the year 2014-15. (previous year 2013-14 Rs. Nil) 4. SHARE CAPITAL AND RESERVES The paid up Equity Share Capital as at 31st March, 2015 was Rs. 710.00 Lakhs divided into 71.00 Lakhs equity shares of Rs. 10/- each. (excluding 5,68,200 partly paid up equity shares earlier on which Rs.22,72,800 were forfeited and the said shares were not re-issued by the Company upto 31st March, 2015) During the year under review, and the Company has not issued any shares with differential voting rights nor granted stock options nor sweat equity. As on 31st March, 2015, none of the Directors of the Company hold any security or convertible instruments of the Company. 4.1 Transfer to reserves During the year under review your company has not transferred any amount to the general reserves. (Previous year Nil) 5. FINANCE Cash and cash equivalent as at 31st March, 2015 was Rs 17.58 Lakhs. Your 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 The details relating to deposits, covered under Chapter V of the Act,- (a) Accepted during the year : Nil (b) Remained unpaid or unclaimed as at the end of the year : Nil (c) Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved : Nil 5.2 Details of deposits which are not in compliance with the requirements of Chapter V of the Act : The Company has not accepted any deposit which are not in compliance of the Companies (Acceptance of Deposits) Rules, 2014 during the financial year. 5.3 Particulars of loans, guarantees or investments The Company has not provided any guarantees or security. For the particulars of loans given and investments made by the company pursuant to the section 186 of the Companies Act, 2013, kindly refer the relevant notes which forming part of the notes to the financial statements provided in the annual report. 6. ECONOMIC SCENARIO AND OUTLOOK The global economy in FY 2014-15 witnessed divergent trends among major economies, despite unpredictable headwinds, the global economic recovery is gaining momentum. These winds of positive change have masked the growth divergence among major economies. Specifically, the recovery in US was stronger than expected, while performance in Japan and Eurozone has fallen short of expectations. This has resulted in the dollar appreciating vis-a-vis other G7 currencies. The currencies of commodity exporting countries weakened due to fiscal and trade imbalances. India''s economy is poised to return to its high-growth path, thanks to lower fiscal and current account deficits, falling inflation, benign commodity prices, and structural reforms to boost investments. Monetary policy is also likely to be supportive with the Reserve Bank of India (RBI) having moved to flexible inflation targeting. The manufacturing sector is likely to benefit from lower interest rates. The share of investments in Gross Domestic Product (GDP) is at 29% (compared to 33% in 2007) and is expected to pick up. However, productivity and capital efficiency improvement are likely to drive near-term growth. Further that currently the world is tracking the status of Greece and China financial problem, which may have little bit impact on the countries financial performance. 7. INDUSTRY OUTLOOK AND OPPORTUNITIES The Company is mainly having investment activities in the selected unlisted closely held companies as well as metal trading. The Security market in the financial year was having good growth and encouraging beyond the expectation. However, the Company do not foresee any substantial changes in its business and profitability in the coming year. 8. MARKET DEVELOPMENT The Company has made investment in the selected companies for which no stock market is available for liquidity, however it is almost risk free from the changes in the capital market. The Company is making efforts to realize the investment and loans for better deployment for growth of the company. 9. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES In view of the paid up capital, profits and turnover of your company during the previous three years, it does not fall under the provisions of the section 135 of the Companies Act, 2013 and the rules made their under. 10. RISK MANAGEMENT POLICYAND INTERNAL ADEQUACY The current economic environment, carries with it an evolving set of risks. The Company recognizes that these risks need to be managed to protect its customers, employees, shareholders and other stakeholders, to achieve its business objectives and enable sustainable growth. Risk and opportunity management is therefore a key element of the overall strategy. The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. These are discussed at the meetings of the Audit Committee and the Board of Directors of the Company. Your 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 defined in the Internal Audit Charter. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board. The Company emphasizes on those risks that threaten the achievement of business objectives of the Group over the short to medium term. An overview of these risks is provided hereafter, including the actions taken to mitigate these risks and any related opportunities: i) Strategic and Commercial risks: being taken care by the Risk Management Committee and reporting to the Board on need basis. ii) Regulatory compliance risks: The regulatory environment has resulted into increased regulatory scrutiny that has raised the minimum standards to be maintained by the Company. This signifies the alignment of corporate performance objectives, while ensuring compliance with regulatory requirements. The Company recognizes that regulatory requirements can at times be challenging, and therefore will, strive to understand the changing regulatory standards, so as to strengthen its decision making processes and integrate these in the business strategy of each of the industries in which it operates. Drive business performance through the convergence of risk, compliance processes and controls mechanisms to ensure continued operational efficiency and effectiveness. iii) Financial risks: It includes among others, exposure to movements in interest rates and the Company also maintains sufficient liquidity, so that it is able to meet its financial commitments on due dates and is not forced to obtain funds at higher interest rates. iv) Day-to-day Risk Management: Management and staff at the Company''s facilities, assets and functions identify and manage risk, promoting safe, compliant and reliable operations. These requirements, along with business needs and the applicable legal and regulatory requirements, underpin the practical plans developed to help reduce risk and deliver strong, sustainable performance. 11. VIGIL MECHANISM/WHISTLE BLOWER POLICY Your Company has a vigil mechanism named vigil mechanism/whistle blower Policy to deal with instance of fraud and mismanagement, if any. The details of the VM Policy is explained in the Corporate Governance Report and also posted on the website of the Company and annexed to this Report as Annexure 9. There were no complaint under the above said system during the financial year 2014-15. 12. SUBSIDIARY, ASSOCIATE AND JOINT VENTURE COMPANIES During the year under review your company is not having any subsidiary at any moment therefore the financial statements are prepared on standalone basis. The Particulars of the Associate Companies are given in the Form AOC-1 as containing part of the Financial Statement annexed as Annexure 1. 12.1 The Company is an Associate Company The Company is an Associate Company of M/s Shailendra Engineering. Co. Pvt. Ltd. which holds 26,11,700 Equity Shares consisting of 36.78% of the total paid up capital of the Company. 13. BOARD OF DIRECTOR''S & KEY MANAGERIAL PERSONNELS 13.1 Independent Directors At the previous Annual General Meeting (AGM) of the company held on September 24th Sept., 2014, the Members had re-appointed the existing independent directors namely; Shri Vineet Gupta (DIN 00215594), Shri Shrish Agrawal (DIN 002164263) and Shri Anoop Vasudeo Agrawal (DIN 06460053) under the Companies Act, 2013 for a period of 5 years with effect from 1st April 2014. All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Your directors satisfy about their independency. 13.2 Women Director Smt. Aditi Mittal (DIN 06536363) was appointed by the Board as an Additional Director under the category of Women Director, to hold office till the date of the next annual general meeting with effect from 11th Feb., 2015 at the Board meeting held on 11th Feb., 2015 on the recommendation of the Nomination & Remuneration Committee. Further that she has resigned from the Board w.e.f. 16th June, 2015. Your directors take on record their appreciation for the services rendered by her in the capacity of women director to the Company. Smt. Uma Prajeshkumar Halen (DIN 07208620) was appointed by the Board as an Additional Director under the category of Independent and Women Director, to hold office till the date of the next annual general meeting with effect from 16th June, 2015 at the Board meeting held on 16th June, 2015 on the recommendation of the Nomination & Remuneration Committee. 13.3 Key Managerial Personnel The tenure of Shri Hemant Sharma as the Managing Director is only upto 30th May 2016, therefore the Nomination & Remuneration Committee and the Board of directors has approved his re-appointment at their meetings held on 12th August, 2015 subject to approval of the members in the ensuing General Meeting for the further period of 3 years w.e.f. 1st June, 2016 on the terms and conditions as set out in the notice of the forthcoming annual general meeting. CS Kriti Kathal Company Secretary was appointed w.e.f. 10th May, 2014 and has resigned w.e.f. 30.04.2015 due to her personal reasons. The Company is making suitable efforts to appoint another company secretary within the stipulated time. The Company has also appointed Shri Rishabh Kumar Jain as the Chief Financial Officer and is incharge as the Compliance officer of the company, w.e.f. 1st April, 2014 and designated him as the Key managerial Personnel. The Company was already having appointed Shri Hemant Sharma, as the Managing Director of the Company, being the Key Managerial Personnel. 13.4 Directors seeking re-appointment In accordance with the provisions of the Companies Act, 2013 and in terms of the Articles of Association of the company, Shri Hemant Sharma (DIN 06558353)) liable to retire by rotation and is eligible for re- appointment. The Company has received a notice in writing from members pursuant to the provisions of section 160 of the Companies Act, 2013 along with the deposits of Rs.1,00,000 for the appointment of Smt. Uma Prajeshkumar Halen (DIN 07208620) as a director at the ensuing annual general meeting. Your directors recommend to pass necessary resolutions as set out in the notice of the annual general meeting. 13.5 Meetings of the Board The Board meets at regular intervals to discuss and decide on Company/business policy and strategy apart from other Board business. However, in case of a special and urgent business need, the Board''s approval is taken by passing resolutions through circulation, as permitted by law, which are confirmed in the subsequent Board meeting. The notice of Board meeting is given well in advance to all the Directors. Meetings of the Board are held in Indore, at the Corporate Office of the Company. The Agenda of the Board meetings are circulated at least a week prior to the date of the meeting. The Agenda for the Board and Committee meetings includes detailed notes on the items to be discussed at the meeting to enable the Directors to take an informed decision. The Board met 5 times during the financial year 2014-15 on 30th May, 2014; 11th July, 2014; 12th August, 2014; 13th Nov., 2014 and 11th Feb., 2015. The maximum interval between any two meetings did not exceed 120 days. 13.6 Board independence Our definition of ''Independence'' of Directors is derived from Clause 49 of the Listing Agreement with Stock Exchanges and Section 149(6) of the Companies Act, 2013. Based on the confirmation/disclosures received from the Directors and on evaluation of the relationships disclosed, the following Non-Executive Directors are Independent in terms of Clause 49 of the Listing Agreement and Section 149(6) of the Companies Act, 2013; a) Shri Shirish Agrawal (DIN 00216423) b) Shri Vineet Gupta (DIN 00215594) c) Shri Anoop Vasudeo Agrawal (DIN 06460053) d) Smt. Uma Prajesh K. Halen (DIN 07208620) 13.7 Company''s policy on Directors'' appointment and remuneration The Policy of Company on Directors'' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under sub- section (3) of section 178, is appended as Annexure 4 to this Report and hosted on the Company''s website at www.amitsecurities.com. 13.8 Annual evaluation by the Board The evaluation framework for assessing the performance of Directors comprises of the following key areas : i. Attendance of Board Meetings and Board Committee Meetings ii. Quality of contribution to Board deliberations iii. Strategic perspectives or inputs regarding future growth of Company and its performance iv. Providing perspectives and feedback going beyond information provided by the management v. Commitment to shareholder and other stakeholder interests The evaluation involves Self-Evaluation by the Board Member and subsequently assessment by the Board of Directors. An executive member of the Board do not participate in the discussion of his evaluation. 14. 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) 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 as mentioned in Note 1 of the S.No. 1 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 Company as at March, 31st 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. 14.1 Details in respect of fraud reported by auditors u/s 143(12) other than those which are reportable to the central government There is no fraud which are not reportable by the Auditors to the Central Government, and which needs to be disclosed in the Board report during the year under review. 14.2 Disclosure for frauds against the Company In terms of the provisions of section 134(3)(ca) of the Companies Act, 2013, there were no fraud committed against the Company by any person which are reportable under section 141(12) by the Auditors to the Central Government as well as non reportable frauds during the year 2014-15. 15. COMMITTEES OF THE BOARD During the year, in accordance with the Companies Act, 2013, the Board has the following 5 (Five) Committees as follows: (a) Audit Committee (b) Nomination and Remuneration Committee (c) Stakeholders'' Relationship Committee (d) Risk management Committee (e) Internal Complaints Committee (ICC) under the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Details of all the Committees along with their charters, composition and meetings held during the year, are provided in the Report on Corporate Governance, a part of this Annual Report. 16. 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 as details has been given in the prescribed Form AOC-2 as the Annexure 2. 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 at large. All Related Party Transactions are placed before the Audit Committee and also the Board for approval. The transactions entered into are audited 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 statement is supported by a Certificate from the MD and the CFO of the Company has developed a Related Party Transactions Manual, Standard Operating Procedures for purpose of identification and monitoring of such transactions. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website (Link:- http://amitsecurities.com/wp-content/uploads/2013/09/POLICY-FOR-RELATED- PARTY-TRANSACTION.pdf). 17. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS There is no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations. 18. AUDITORS 18.1 Statutory Auditors The Company''s Auditors, M/s M Mehta & Co., Chartered Accountants (FRN 000957C), who were appointed for a term of three years at the Annual General Meeting of the Company held on 24th Sept., 2014 are eligible for ratification of their appointment. They have confirmed their eligibility under Section 141(3)(g) of the Companies Act, 2013 and the Rules framed there under for ratification for appointment as Auditors of the Company. As required under Clause 49 of the Listing Agreement, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. There is no such observation made by the Auditors in their report which needs any further explanation by the Board. 18.2 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 CS Pinky Shrivastava (C.P.No. 8035) a Company Secretary in Practice to undertake the Secretarial Audit of the Company for the year 2014-15 and has further re-appointed for the year 2015-16. The Report of the Secretarial Audit in the Form MR-3 is annexed herewith as Annexure 6. Which is self explanatory and needs no comments except the followings In the matter of Observations raised by No. 1 to 3 & 5 by the Secretarial Auditors; Management Comments: The observations are purely for informative purposes and there is no non compliance or observations which needs further clarification from the management: In the matter of Observation No. 4: Management Comments : The Share Transfer agent has properly resolved the complain within the stipulated time and the SCORE has also confirm the same, therefore, the observation raised by the secretarial auditor is not correct. 19. ENHANCING SHAREHOLDERS VALUE Your Company believes that its Members are among its most important stakeholders. Accordingly, your Company''s operations are committed to the pursuit of achieving high levels of operating performance and cost competitiveness, consolidating and building for growth, enhancing the productive asset and resource base and nurturing overall corporate reputation. Your Company is also committed to creating value for its other stakeholders by ensuring that its corporate actions positively impact the socio-economic and environmental dimensions and contribute to sustainable growth and development. 20. CORPORATE GOVERNANCE As per the SEBI Circular No. CIR/CFD/POLICY CELL/7/2014 September 15, 2014 in view of the paid up capital and net worth of the Company, the Clause 49 of the Listing Agreement with the BSE Ltd., is not mandatory w.e.f. 1st Oct., 2014. However, in view of the best corporate governance, your company is voluntarily complying certain provisions of the said Clause 49 and 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 as Annexure- 5 and the Corporate Governance Report is attached as Annexure 10. 20.1 MD & CFO certification Certificate obtained from Shri Hemant Sharma, Managing Director and Shri Rishabh Kumar Jain, Chief Financial Officer, pursuant to provisions of Clause 49(IX) of the Listing Agreement, for the year under review was placed before the Board at its meeting held on 12th August, 2015. A copy of the certificate on the financial statements for the financial year ended March, 31, 2015 is annexed As Annexure 11 along with this Report. 20.2 Code of Conduct The Company has formulated the code of conduct for the Board members and senior executives under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011 and the SEBI (Prohibition of Insider Trading) Regulations, 1992/2015. A certificate to that effect for the proper compliances given by the Managing Director is annexed as the Annexure 12 with this Report. 21. RATIO OF THE REMUNERATION OF EACH DIRECTOR TO THE MEDIAN EMPLOYEE''S REMUNERATION. Pursuant to provision of section 197(12) of Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the detail is given in the Annexure 3. 21.1 Particulars of remuneration of employees During the year, none of the employees received remuneration in excess of Rs. 60 Lakhs or more per annum. In accordance with the provisions of Section 197 of the Companies Act, 2013 read with Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Therefore there is no information to disclose in terms of the provisions of the Companies Act, 2013. 22. CONSOLIDATED FINANCIAL STATEMENTS Since your company is not having any subsidiary company, therefore in view of the Notification No. GSR 723(E) issued by the MCA on 14th Oct., 2014, the Company is not required to prepare consolidated financial statements for its associate companies for the year 2014-15. 23. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as Annexure 8. 24. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY There have been no material changes and commitments, if any, affecting the financial position of the Company which had occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report. 25. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return as on 31st March, 2015 in form MGT-9 is annexed herewith as Annexure 7. 26. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. Further no complaint was received during the year under review. 27. ACKNOWLEDGEMENTS Your Directors thank the various Central and State Government Departments, Organizations and Agencies for the continued help and co-operation extended by them. The Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, vendors, banks and other business partners for the excellent support received from them during the year. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company. 28. 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 and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations. For & on behalf of the Board Place : Indore Hemant Sharma Dated : 12th August, 2015 Managing Director Amit Securities Ltd DIN-06558353 CIN: L65990MH1992PLC067266

Director’s Report