DIRECTORS' REPORT Dear Members, Your Directors have pleasure in presenting the 21st Annual Report on the business and operations of the Company along with the financial statements for the Financial Year ended 31st March, 2015. Dividend: In order to consolidate the financial position of the Company the Board has decided to skip the dividend for the financial year ended 31st March, 2015. Subsidiary Companies: Vertex Securities Limited (VSL) and Vertex Commodities And Finpro Private Limited (VCFPL) are the subsidiaries of the Company engaged in the following businesses:- 1. Stock broking focusing business mainly on southern and western India. The company caters to retail, HNI and institutional clients. 2. Currency derivatives segment. 3. Commodity broking through Vertex Commodities And Finpro Pvt. Ltd. (VCFPL) and services retail, HNI and corporate clients. 4. Merchant banking. Vertex Securities Limited (VSL) is a member of: - 1. National Stock Exchange of India Limited (NSE) 2. Bombay Stock Exchange Limited, (BSE) 3. Cochin Stock Exchange Limited, (CSE) 4. OTC Exchange of India ,(OTCEI) 5. National Securities Depository Ltd., (NSDL) (for depository services) 6. SEBI registration as a Merchant Banker 7. MCX Stock Exchange Limited. (MCX Sx) Vertex Commodities And Finpro Private Limited (VCFPL) is a member of following commodity exchanges: - 1. Multi Commodity Exchange of India (MCX) 2. National Commodity and Derivative Exchange (NCDEX) 3. National Multi Commodity Exchange (NMCE) 4. National Spot Exchange of India Limited (NSEIL) During the year under report, the consolidated revenue of these two subsidiaries was Rs. 596.49 lakhs as against Rs. 583.51 lakhs in the previous year. The net loss after tax was Rs. 33.34 lakhs as against net loss of Rs. 152.92 lakhs in the previous year. The Company has two subsidiaries namely Vertex Securities Limited and Vertex Commodities and Finpro Pvt. Ltd. as on March 31, 2015 and there are no associate companies within the meaning of Section 2 (6) of the Companies Act, 2013. There have been no material changes in the business of the subsidiary companies. Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, a statement containing the salient features of the financial statements of the Company's subsidiaries in Form AOC 1 is attached to the financial statements of the Company. Management Discussion and Analysis: A detailed review on the operations and performance of the Company and its business is given in the Management Discussion and Analysis which forms part of this report. Corporate Governance Report: A detailed report on Corporate Governance forms part of this Report. Auditors Certificate on compliance with Corporate Governance requirements by the Company is attached also forms part of this report. Consolidated Financial Statements: Pursuant to Section 136 of the Companies Act, 2013, the standalone financial statements, of the Company, consolidated financial statements along with the relevant documents form part of the Annual Report and separate audited accounts in respect of the subsidiaries are available on the website of the Company. Directors' Responsibility Statement: In terms of Section 134 (3) (c) of the Companies Act, 2013 your Directors state that: 1. In preparation of annual accounts for the year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any; 2. They 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 as at 31st March, 2015 and profit of the Company for the year ended on that date; 3. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; 4. They have prepared the annual accounts on a going concern basis; 5. They have laid down proper internal financial controls to be followed by the Company and they were adequate and operating effectively and 6. They have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively. Deposits: During the financial year under report the Company has not accepted deposits within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014. No amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet. Particulars of Loans, Guarantees and 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. Directors: Mr. Kumar Nair retires by rotation at the ensuing Annual General Meeting in terms of Section 152 of the Companies Act, 2013. During the under review Mr. Pravin D. Khatau (DIN 02425468) and Mr. K. Jay Chandran (DIN 00508434) resigned as Directors of the Company with effect from 27th January, 2015 due to personal reasons. The Board places on record its deep appreciation of the services rendered by these Directors' The Board of Directors on the recommendation of the Nomination and Remuneration Committee appointed Mr. Pravin D. Khatau (DIN 02425468) as Additional Director (Independent) and Mr. U. Ramachandran (DIN 00493707) as Additional Director - Finance and Chief Finance Officer with effect from 25th February, 2015 and Mrs. Nirmala Sachin Parab (DIN 07149007) as Additional Director (Independent) with effect from 30th March, 2015. Pursuant to Section 161 of the Companies Act, 2013 the additional directors hold office upto the date of the ensuing Annual General Meeting. The Company has received notice under Section 160 of the Companies Act, 2013 along with the requisite deposit proposing the appointment of Mr. Pravin D Khatau, Mr. U. Ramachandran, and Mrs. Nirmala Sachin Parab, at the ensuing Annual General Meeting. Familiarization Programme for Directors: At the time of appointment of a Director, a formal letter of appointment is given to him/her. The Director is also explained in detail the role, function, duties and responsibilities expected from him/her and also compliance required from him/her under the Companies Act 2013, and Listing Agreement with stock exchanges. Further the Managing Director also will have one to one discussion with the newly appointed Director to familiarize with the Company's operation. Performance of Board Evaluation Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out annual performance evaluation of its own performance, the Directors individually, as well as the evaluation of the working of its committees. The evaluation was done on various parameters like vision and strategy, Board participation disclosure of interest, review of risk management policies, leadership skills, good governance, marketing and corporate communications etc. Risk Management: The Company has adopted a Risk Management Policy for the Company including identification therein the elements of risk, if any, which in the opinion of the Board may threaten the existence of the Company. After identifying the risk and assessing the level of impact, controls are put in place to mitigate the risk by the concerned executives/the Board to control the exposure of the risk and balance the impact of risk on a continuous basis. Sexual Harassment Policy In line with the requirements of Sexual harassment of Women at Workplace ( Prevention, Prohibition and Redressal) Act 2013 (Act), the Company has in place a policy to prevent sexual harassment of women at workplace. Your Directors state that during the year under review, there were no cases filed pursuant to the above Act. Whistle Blower Policy: The Company has adopted a Whistle Blower Policy as part of vigil mechanism to provide appropriate avenues to the Directors and Employees to bring to the attention of the management any issue which is perceived to be in violation of or in conflict with the fundamental business of the Company. The employees are encouraged to voice their concerns by way of whistle blower policy and all the employees have been given access to the Audit Committee. All cases registered under the Code of Business Principles and Whistle Blower Policy will be reported to the Audit Committee. Had fair value method been used, the compensation cost would have been higher by Rs. 6.87 lakhs (previous year. Rs. 8.05 lakhs). Profit after tax would have been lower by Rs. 6.87 lakhs (Previous year Rs. 8.05 lakhs) and EPS both basic and diluted would have been Rs. 0.02 per share (previous year Rs. 0.06 per share) Independent Directors Meeting: During the year under review a meeting of Independent Directors was held on 25.02.2015. Related Party Transactions: All related party transactions that were entered into during the year were on arm's length basis and in the ordinary course business. The Audit Committee has approved the related party transactions and subsequently the same were approved by the Board of Directors. The details of the transactions with related parties are given in the financial statements. Auditors: M/s. Rahul Gautam Divan and Associates retire as Statutory Auditors of the Company at the conclusion of the ensuing Annual General Meeting. The Company has received eligibility certificate in terms of Section 139 of the Companies Act, 2013 and consent from the retiring auditors and accordingly the Audit Committee has recommended the re-appointment of the retiring auditors for a further period of consecutive four years upto the conclusion the Annual General Meeting in the year 2019 subject to ratification by Members at every Annual General Meeting. Secretarial Audit: Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Rules made there under the Company has appointed Mr. M. P. Sharma, a Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed as part of this Report. Energy Conservation, Technology Absorption : Because of the nature of activities being carried on by the Company, the particulars are not applicable. Foreign Exchange Earnings and outgo: Earnings - Rs. 25.71 lakhs Outgo - Rs. 6.46 lakhs Particulars of Employees and related disclosure: There are no employees drawing a monthly or yearly remuneration in excess of the limits specified under Section 197 of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Acknowledgement: Your Directors acknowledge the support and counsel extended by the bankers, government agencies, shareholders, investors, employees and others associated with the Company. The Directors look forward the same in future also. For and on behalf of Board of Directors Kumar Nair Managing Director (DIN 00320541 Date : May 27, 2015 Place ; Mumbai |