The Board of Directors are pleased to present the Company's 41st
Annual Report on the business and operations along with the Audited Financial Statements
for the Financial Year ended March 31, 2024.
Financial Performance
(H lakhs)
Particulars |
Consolidated |
Standalone |
|
March 31, 2024 |
March 31, 2023 |
March 31, 2024 |
March 31, 2023 |
Revenues from Operations |
6,151 |
4,054 |
3,090 |
2,404 |
Other Income |
513 |
630 |
275 |
469 |
Total Income |
6,664 |
4,684 |
3,365 |
2,873 |
Total Expenses |
4,325 |
3,340 |
2,349 |
1,962 |
Profit before Exceptional Items and Tax |
2,339 |
1,344 |
1,016 |
911 |
Extraordinary Items |
Nil |
173 |
Nil |
173 |
Profit before Tax |
2,339 |
1,517 |
1,016 |
1,084 |
Tax Expenses |
483 |
399 |
154 |
308 |
Profit after Tax |
1,856 |
1,118 |
862 |
776 |
Other Comprehensive Income (Net of Tax) |
1,065 |
732 |
1,063 |
738 |
Total Comprehensive Income |
2,921 |
1,850 |
1,925 |
1,514 |
Overview of Company's financial & operational performance
Consolidated Revenues for the Year ended March 31, 2024 was H6,664
lakhs as compared to H4,684 lakhs in the previous financial year. Consolidated Profit
after Tax including Other Comprehensive Income for the Year ended March 31, 2024 was
H2,921 lakhs as compared to H1,850 lakhs during the previous financial year.
Standalone Revenues was for the Year ended March 31, 2024 was H3,365
lakhs as compared to H2,873 lakhs in the previous financial year. Standalone Profit after
Tax including Comprehensive Income for the Year ended March 31, 2024 was H1,925 lakhs
compared to H1,514 lakhs during the previous financial year.
Financial statements are prepared in accordance with the Companies
(Indian Accounting Standards) Rules, 2015 (Ind-AS) notified under Section 133 and other
applicable provisions of the Companies Act, 2013 read with the Companies (Accounts) Rules,
2014, as amended from time to time.
The operations in the year remained transformative wherein emphasis on
annuity type of income has produced a favorable impact. Investments in startup and
early-stage businesses have remained healthy in terms of growth to carrying values. Our
client base showed a meaningful addition. The growth in revenue and profits remain at
appreciable levels
Acquistion of Artificial Intelligence / Machine Learning-based
technology company in United Kingdom
During the year, pursuant to the authority granted by the Board of
Directors on April 13, 2023, the Company entered into an agreement with Bridgeweave
Limited ("Bridgeweave"), a UK based an Artificial Intelligence / Machine
Learning-based technology company, that has developed a suite of financial products for
retail investors. The Company has acquired about 10% equity stake in Bridgeweave and as a
result of its approximately 10% equity stake in Bridgeweave, the Company is not just the
second largest shareholder after the founders, but also an important strategic ally of
Bridgeweave. Due to the length of time taken for the UK regulatory approval, the original
2023 deal terms have now expired and while the strategic intent remains on both sides, a
new understanding would have to be reached to finalise the transaction. The Company
continues to work closely with the Bridgeweave team, for onboarding the latter onto
multiple broking platforms and expanding their presence in India.
Dividend and Reserves
The Board of Directors recommend a dividend of H1/- per Equity Share of
face value of H5/- each for the Financial Year 2023-24, subject to the approval of the
Members at the 41st Annual General Meeting. In the previous year, the Company
had declared dividend of H0.50 per Equity Share.
During the year under review, no amount from the Profit was transferred
to Reserves.
Equity Share Capital
Paid-up Equity Share Capital of the Company as of March 31, 2024, was
H1,664 lakhs. The outstanding Equity Shares were 3,32,88,825 Equity Shares of face value
of H5/- each.
During the year under review, 9,31,600 Equity Shares were allotted to
the eligible Employees / Directors of the Company / Subsidiaries pursuant to exercise of
Options granted under Employee Stock Option Scheme 2018.
Utilisation of proceeds of preferential issue of equity shares
The Board of Directors had allotted 45,50,000 Equity Shares in November
2021 to select investors, on a Preferential basis, pursuant to approval granted by the
Members at their Extraordinary General Meeting held on November 10, 2021. The part of the
issue proceeds of H4,038 lakhs, received on allotment of Equity Shares, have been utilised
in terms of the object clause, as amended by the subsequent resolution of members, and the
remaining funds have been invested in the fixed deposits till deployment of funds for the
purpose for which the funds were raised.
Management Discussion and Analysis Report
Pursuant to the provisions of the Regulation 34 of the SEBI Listing
Regulations, the Management Discussion and Analysis Report giving a detailed account of
the operations and the state of affairs of the Company is annexed as Annexure
"1" to this Report.
Directors and Key Managerial Personnel
The Members of the Company, at their 40th Annual General
Meeting held on June 13, 2023, appointed Mr. Mayank Malik (DIN: 10178490) and Ms. Smeeta
Harsha Bhatkal (DIN: 07363916) as Non-Executive and Independent Directors of the Company
for a term of 5 years, pursuant to the notice received under Section 160 of the Companies
Act, 2013. Based on the recommendation of Nomination and Remuneration Committee, the Board
of Directors on August 8, 2023, approved the change in designation of Mr. Ashok Kacker
(DIN: 01647408) from Non-Executive and Non-Independent Director to Non-Executive and
Independent Director, for a term of Five Years from the date of original appointment, i.e.
September 27, 2022.
The second term of Mr. Pradip Dubhashi, Chairperson, as Non-Executive
and Independent Director completed on June 13, 2023. The first term of Ms. Namrata Kaul,
as Non-Executive and Independent Director, completed on February 13, 2024, and she
expressed her desire to not seek an appointment for the second term. Ms. Smita Affinwalla,
NonExecutive and Independent Director, resigned w.e.f. June 19, 2023, due to the personal
reasons. The Directors place on record their deep appreciation for the services rendered
by Mr. Pradip Dubhashi, Ms. Namrata Kaul and Ms. Smita Affinwalla during their tenure as
Non-Executive and Independent Directors.
The Company has received declaration under Section 149(7) of the
Companies Act, 2013 from all the Independent Directors of the Company confirming that they
meet the criteria of Independence as prescribed under Section 149(6) of the Companies Act,
2013 and Regulation 16(1)(b) of the SEBI Listing Regulations and that their names have
been included in the Databank of Independent Directors as prescribed under the Companies
Act, 2013. In the opinion of the Board, the Independent Directors of the Company possess
necessary expertise, integrity and experience.
In accordance with the provisions of Section 152 of the Companies Act,
2013 and the Articles of Association of the Company, Mr. Sujit Kumar Varma, Non-Executive
and Non-Independent Director, retires by rotation at the ensuing Annual General Meeting
and being eligible, offers himself for reappointment. An appropriate resolution for
re-appointment of Mr. Sujit Kumar Varma, who retires by rotation, is being placed before
you for your approval at the ensuing Annual General Meeting. The information on the
particulars of Director seeking appointment / re-appointment, as required under SEBI
Listing Regulations, is given in the Notice of the Annual General Meeting, forming part of
this Annual Report. The Board recommends his re-appointment for the consideration of the
Members of the Company at the ensuing Annual General Meeting.
Mr. N. Jayakumar, Managing Director and Group CEO, Mr. Akshay Gupta,
Whole-time Director, Mr. Arun Shah, Chief Financial Officer and Mr. Ajay Shah, Company
Secretary were the key managerial personnel of the Company as on date of this report.
Number of meetings of the Board & its Committees
During the year under review, Nine Board Meetings were convened and
held, the details of which are given in the Report on Corporate Governance, which forms a
part of the Annual Report.
The Board of Directors constituted Audit Committee, Nomination and
Remuneration Committee, Corporate Social Responsibility Committee, Stakeholders'
Relationship Committee and Risk Management Committee, in compliance with the requirements
of the relevant provisions of applicable laws and regulations. The details with respect to
the composition, terms of reference, number of meetings held, etc. of these Committees are
included in the Report on Corporate Governance, which forms a part of the Annual Report.
The intervening gap between the Board and Committee Meetings were
within the period prescribed under the Companies Act, 2013 and SEBI Listing Regulations.
The Company has complied with the applicable Secretarial Standards 1 (SS-1) on Board
Meetings, issued by the Institute of Company Secretaries of India.
Board Evaluation
Annual performance evaluation of the Board of Directors, its committees
and all the Directors individually were done in accordance with the performance evaluation
framework adopted by the Company and a structured questionnaire was prepared after taking
into consideration the various aspects of the Board's functioning, composition of the
Board and its Committees, culture, execution and performance of specific duties,
obligations and governance. The performance evaluation framework sets out the performance
parameters as well as the process of the performance evaluation. Pursuant to the
provisions of the Companies Act, 2013, a separate Meeting of Independent Directors was
held during the year to review (i) performance of the Non-Independent Directors and the
Board of Directors as a whole (ii) performance of the Board Committees (iii) performance
of the Chairperson of the Company, taking into account the views of Executive Directors
and Non-Executive Directors (iv) assess the quality, quantity and timeliness of flow of
information between the Management and the Board of Directors that is necessary for the
Board of Directors to effectively and reasonably perform its duties. The Board of
Directors expressed satisfaction with the evaluation process.
Policy on Directors' appointment, remuneration, etc
The Remuneration Policy of the Company for appointment and remuneration
of the Directors, Key Managerial Personnels and other employees of the Company along with
other related matters have been explained in the Corporate Governance Report forming part
of
this Annual Report. Depending on the need to appoint / re-appoint
Director, the Nomination and Remuneration Committee (NRC Committee) of the Company
determines the criteria based on the specific requirements. NRC Committee, while
recommending candidature to the Board, takes into consideration the qualification,
attributes, experience and independence of the candidate.
Corporate Governance and Code of Conduct
Pursuant to Regulation 34(3) read with Schedule V(C) of the SEBI
Listing Regulations, a separate report on Corporate Governance practices followed by the
Company together with the Certificate required under Schedule V(E) of the SEBI Listing
Regulations from M/s. Pramod Shah & Associates, Practicing Company Secretaries,
confirming compliance by the Company of the conditions of Corporate Governance is annexed
as Annexure "2" to this Report.
Certificate of Non-Disqualification of Directors, pursuant to
Regulation 34(3) and Schedule V(C) clause (10)(i) of SEBI Listing Regulations, 2015, from
M/s. Pramod S. Shah and Associates, Practicing Company Secretaries, forms part of the
Report on Corporate Governance.
Pursuant to the provisions of Regulation 17(5)(a) of the SEBI Listing
Regulations, your Company has also laid down a Code of Conduct for its Board Members and
Senior Management Personnel. All the Directors and the Senior Management Personnel have
affirmed compliance with the said Code of Conduct. A declaration by the Managing Director
and Group CEO confirming the compliance by Board Members and Senior Management Personnel
with the Code of Conduct for the year ended March 31, 2024, forms a part of the Report on
Corporate Governance.
Consolidated Financial Statement
The Audited Consolidated Financial Statements was prepared in
accordance with the Companies (Indian Accounting Standards) Rules, 2015 (Ind-AS) notified
under Section 133 and other applicable provisions of the Companies Act, 2013 read with
Rule 7 of the Companies (Accounts) Rules, 2014, as applicable and shows the financial
information
of the Company and its Subsidiaries as a single entity, after
elimination of minority interest, if any. As required under provisions of the Companies
Act, 2013, as applicable, the Audited Consolidated Financial Statements of the Company and
all its Subsidiaries together with Auditor's Report thereon forms a part of this
Annual Report.
Consolidated Revenues for the Year were H6,664 lakhs compared to H4,684
lakhs in the previous year, which comprises Investment Banking and Advisory Fees of H3,090
lakhs, Corporate Advisory Fees of H3,056 lakhs, Gain on Sale of Investment of H21 lakhs,
Income from Dividend, Interest and Other Income of H462 lakhs, Net Gain on Fair Value
Changes H35 lakhs. Consolidated Net Profit after Tax including Comprehensive Income for
the Year under review was H2,921 lakhs as compared to H1,850 lakhs in the previous year.
Subsidiary Companies / Joint Ventures
Pursuant to the provisions of Section 129(3) of the Companies Act, 2013
read with the Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing the
salient features of the Audited Financial Statements of the Subsidiaries / Associate
Companies for the year ended March 31, 2024, is given in Form AOC- 1 as an annexure to the
Consolidated Financial Statements of the Company forming part of this Annual Report.
The policy for Determining Material Subsidiaries has been placed on the
website of the Company (www.primesec.com). Separate Audited Financial Statements of each
of the Subsidiaries are available on the website of the Company (www.primesec.com) and the
same will also be made available to the Members seeking such information at any point of
time.
The summary of the state of affairs and performance of the subsidiaries
is given below:
Prime Research and Advisory Limited
Prime Research and Advisory Limited ("PRAL") operates in the
segment of financial services business comprising value-added intermediation services in
wealth management and investment advisory, assisting banks and institutional investors in
risk assessment, portfolio analysis and portfolio rebalancing through execution of
specific strategies. PRAL's target clients include corporate treasuries, fund
management companies and family offices among others. PRAL through its network of
investors substantially enhances our capability to execute mandates. During the year under
review, the Board of Directors of PRAL approved an acquisition of 60% equity stake in
Prime Global Asset Management Pte. Ltd., a Singapore based Company ("PGAM").
PGAM will undertake the fund management business and offer its services to global
institutional investors and family offices. The remaining shareholding of PGAM will be
held equally by Mr. Anil Ahuja and Mr. Ajay Abrol, both Singapore residents, who will also
act as Directors and operating team of PGAM. The acquisition is subject to execution of
definitive documentation, regulatory / statutory approvals as may be required under
applicable laws.
During the year under review, PRAL earned revenues of H3,334 lakhs as
compared to H1,820 lakhs in the previous year. This includes Advisory Fees of H3,056
lakhs, Income from Dividend, Interest and Other Income of H242 lakhs, Net Gain on Fair
Value Changes of H23 lakhs and Gain on Sale of Investment of H13 lakhs. During the year,
PRAL earned Net Profit after Tax including Comprehensive Income of H996 lakhs as compared
to H336 lakhs in the previous year.
PRAL has declared its maiden dividend of H100 lakhs for the FY 2023-24.
Prime Funds Management Limited
Prime Funds Management Limited ("PFML") was incorporated in
2018 as a 100% subsidiary of the Company to carry on Portfolio Management and setting up
Alternative Investments Funds. PFML is yet to commence business.
The Company has not entered into any joint ventures.
Annual Return
Pursuant to the provisions of Section 92(3) of the Companies Act, 2013,
the Annual Return of the Company is uploaded on the website of the Company
(www.primesec.com).
Related party contracts & arrangements
In accordance with the provisions of the Companies Act, 2013 and the
SEBI Listing Regulations, the Company has formulated a Policy on Related Party
Transactions and a copy of the same is available on the website of the Company
(www.primesec.com). The policy intends to ensure that proper reporting, approval and
disclosure processes are in place for all transactions with related parties and also deals
with material related party transactions.
All related party transactions are placed before the Audit Committee
for necessary review and approval. Prior omnibus approval of the Audit Committee is
obtained for transactions with related parties, which are repetitive in nature and / or
are entered into in the ordinary course of business and are on an arm's length basis.
None of the Directors has any pecuniary relationships or transactions vis-a-vis the
Company except remuneration and sitting fees.
All transactions entered into by the Company with the related parties
during the financial year were in ordinary course of business and are on an arm's
length basis. Disclosure pursuant to the Accounting Standards on related party transaction
has been made in the notes to the Audited Financial Statements. No material related party
transactions were entered into during the year by the Company and accordingly, the
disclosure of contracts or arrangements with related parties in accordance with the
provisions of Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not
applicable.
Deposits
Your Company did not accept any Fixed Deposits under Chapter V of
Companies Act, 2013, during this financial year and no amount on account of principal or
interest on deposits from the public was outstanding as on March 31, 2024. The Company had
no Deposit which was not in compliance with the provisions of Chapter V of the Companies
Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014.
Directors' Responsibility Statement
To the best of their knowledge and belief and according to the
information and explanations obtained by them, your Directors made the following
statements in terms of Section 134(3) (c) and 134(5) of the Companies Act, 2013 that:
a) In the preparation of the Annual Accounts for the year ended March
31, 2024, the applicable Accounting Standards read with the requirements set out under
Schedule III to the Companies Act, 2013, have been followed and there are no material
departures from the same.
b) They have selected such accounting policies and applied them
consistently and made judgements 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 March 31, 2024, and
of the profits of the Company for the year ended on that date.
c) They have taken proper and sufficient care 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) They have prepared the annual accounts on a going concern basis.
e) They have laid down internal financial controls to be followed by
the Company and that such internal financial controls are adequate and are operating
effectively.
f) They have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems are adequate and operating
effectively.
Corporate Social Responsibility
Pursuant to the provisions of Section 135 of the Companies Act, 2013
read with Schedule VII of the Companies Act, 2013 and the Companies (Corporate Social
Responsibility Policy) Rules, 2014, the Company has constituted Corporate Social
Responsibility ("CSR") Committee. The present Members of the Committee are (i)
Mr. Ashok Kacker, Non-Executive and Independent Director (ii) Ms. Smeeta Bhatkal,
Non-Executive and Independent Director and
(iii) Mr. Sujit Kumar Karma, Non-Executive and Non-Independent
Director. The Company has also formulated CSR Policy and the same is available on the
website of the Company (www.primesec.com). Detailed report on CSR activities as required
under the Companies Corporate Social Responsibility Policy) Rules, 2014 is annexed as
Annexure "3" to this Report.
Particulars of loans given, investments made, guarantees given and
securities provided
Particulars of Loans, Guarantees and Investments made by the Company
pursuant to the provisions of Section 186 of the Companies Act, 2013 are given in the
notes to the Audited Financial Statements forming part of this Annual Report.
Vigil Mechanism / Whistle Blower Policy
The Company established a Vigil Mechanism / Whistle Blower Policy for
Directors and Employees to report genuine concerns or grievances about unethical
behaviour, actual or suspected fraud or violation of the Company's Code of Conduct,
which provides for adequate safeguards against victimisation of persons who avail of such
a mechanism. A copy of the Whistle Blower Policy is available on the website of the
Company (www.primesec.com).
Auditors and Auditors' Report
M/s. Sharp & Tannan Associates, (Firm Registration No. 109983W)
Chartered Accountants, have been appointed as Independent Auditors, for a term of Five
years, commencing from the Financial Year 2014-25, in place of M/s. Walker Chandiok &
Co. LLP, (Firm Registration No. 001076N/N500013) Chartered Accountants, whose term expires
at the ensuing Annual General Meeting. A certificate from them has been received, to the
effect that their appointment as Independent Auditors of the Company is in accordance with
the applicable provisions of Section 139 and 141 of the Companies Act, 2013 and rules
framed thereunder, as amended from time to time.
The Report issued by the Statutory Auditor on the Audited Financial
Statements of theCompany for Financial Year 2023-24 forms part of this Annual Report and
does not contain any qualification, reservation, adverse remark or disclaimer.
Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and the Rules made thereunder, the Board of Directors has appointed M/s. Pramod Shah &
Associates, Company Secretaries (C.P. No. 3804), to undertake the Secretarial Audit for
the year ended March 31, 2024. The Secretarial Report given by the Secretarial Auditor is
annexed as Annexure "4" to this Report. Your directors confirm that the
Secretarial Standards issued by the Institute of Company Secretaries of India have been
duly complied with.
Material changes and commitments, if any, affecting the financial
position of the company occurred between the end of the financial year to which this
financial statements relate and the date of the report
Except as disclosed elsewhere in this Report, no material changes and
commitments affecting the financial position of the Company occurred between the end of
the Financial Year to which this Financial Statements relate and the date of this Report.
Employees
The disclosures with respect to the remuneration of Directors and
Employees as required under Section 197(12) of the Companies Act, 2013 and the Rule 5(1)
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as
Annexure "5" to this Report.
The information on Employee particulars as required under Section
197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended) is annexed
as Annexure "6" to this Report. In terms of Section 136 of the Companies Act,
2013, the Report and Financial Statements are being sent to the Members and others
entitled thereto, excluding the aforesaid
Annexure. Any Member interested in obtaining a copy of the same may
write to the Company Secretary.
None of the Employee of the Company is a Relative of any Director of
the Company.
Employee Stock Option Schemes
The Company implemented Employee Stock Option Scheme viz Employee Stock
Option Scheme 2018 (ESOS 2018). The Nomination and Remuneration Committee of the Board of
Directors has granted, to eligible Employees / Directors of the Company and Subsidiary
Companies pursuant to ESOS 2018 and 14,11,500 Options are outstanding as of March 31,
2024.
The disclosures in accordance with the provisions of the Section
62(1)(b) of Companies Act, 2013 read with the Rule 12(9) of the Companies (Share Capital
and Debentures) Rules, 2014 (as amended from time to time) and the Securities and Exchange
Board of India (Share Based Employee Benefits) Regulations, 2014 are set out as Annexure
"7" to this Report. The shares arising out of exercise of the Options will be
allotted in the name of the respective Employees and accordingly, the provisions relating
to disclosure of voting rights not exercised directly by the employees are not applicable.
Disclosure as per the sexual harassment of women at workplace
(prevention, prohibition and redressal) Act, 2013
The Company adopted a policy on prevention, prohibition and redressal
of sexual harassment at workplace in line with the provisions of the Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made
thereunder. As required under law, an Internal Complaints Committee was constituted for
reporting and conducting inquiry into the complaints made by the victim on the harassments
at the workplace. During the year under review, no complaint of sexual harassment was
received and there was no complaint of sexual harassment pending as at the date of this
report.
Particulars regarding Conservation of Energy, Technology Absorption and
Foreign Exchange Earnings and outgo
In view of nature of business activities of the Company, the
particulars regarding conservation of energy and technology absorption, as prescribed
under Section 134 of the Companies Act, 2013 read with Rule 8(3) of the Companies
(Accounts) Rules, 2014, are not given. However, the Company has taken various measures for
conservation of energy, like switching from conventional lighting systems to LED lights,
etc.
During the year under review, the Company's earnings of foreign
exchange of USD 32,580 and expenditure of foreign exchange were USD10,950.
Listing & Listing Fees
The Equity Shares of the Company are listed on the Bombay Stock
Exchange Limited and the National Stock Exchange of India Limited and the Listing Fees for
the year 2024-25 have been duly paid.
General Disclosures
Your Directors' state that during the year under review:
a) The Business Responsibility Reporting as required pursuant to the
provisions of Regulation 34(2) of the SEBI Listing Regulations is not applicable to your
Company.
b) No Equity Shares with Differential Rights, as to Dividend, Voting or
otherwise, were issued.
c) Except the allotment of Equity Shares to employees of the Company
pursuant to exercise of Option granted under the Employee Stock Option Scheme 2018, no
other Equity Shares (including Sweat Equity Shares) were allotted.
d) The Company did not resort to any buyback of Equity Shares during
the Year under review.
e) Managing Director of the Company did not receive any Remuneration or
Commission from any of its Subsidiaries.
f) There was no instance of fraud during the year under review, which
required the Statutory Auditors to report to the Audit Committee and / or Board under
Section 143(12) of the Companies Act, 2013 and Rules framed thereunder.
g) No significant or material orders were passed by the Regulators or
Courts or Tribunals, which impact the Going Concern status and Company's operations
in future.
Acknowledgements
The Board wishes to place on record its sincere appreciation for the
hard work put in by the Company's employees at all levels in this difficult
environment. The Board of Directors also wish to thank the Company's members, bankers
and business associates for their unstinted support during the year.
|
For and on behalf of the Board of
Directors |
|
Mumbai |
N. Jayakumar |
Akshay Gupta |
April 25, 2024 |
Managing Director and Group CEO |
Whole-time Director |