stci finance limited · (formerly known as securities trading corporation of india limited) 6 7 to...

STCI FINANCE LIMITED

24th ANNUAL REPORTFOR THE YEAR ENDED

31st MARCH, 2018


(Formerly known as Securities Trading Corporation of India Limited)

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I. STCIFINANCELIMITED 04-108

II. CONSOLIDATEDACCOUNTS 111-154

III. STCIPRIMARYDEALERLIMITED 157-237

IV. STCICOMMODITIESLIMITED 241-272



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CONTENTS

I. STCI FINANCE LIMITED

01 DIRECTORS’REPORT 07

02 AUDITORS’REPORT 54

03 AUDITORS’REPORTTODIRECTORS 61

04 C&AGREPORT 63

05 BALANCESHEET 64

06 PROFITANDLOSSSTATEMENT 66

07 CASHFLOWSTATEMENT 67

08 NOTESTOFINANCIALSTATEMENTS 69

09 SIGNIFICANTACCOUNTINGPOLICIES 85

10 NOTESFORMINGPARTOFFINANCIALSTATEMENTS 90

11 FORMAOC-1 107

12 LISTOFSHAREHOLDERS 108



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Board of Directors : Mr. T. C. Venkat Subramanian, Director

Mr. K. Narasimha Murthy, Director

Mr. S. Ravi, Director

Mr. T. V. Rao, Director

Mrs. Thankom T Mathew, Director

Mr.VivekWahi,Director (w.e.f 02.05.2018)

Mr. Pradeep Madhav, Managing Director & CEO

Mr.S.K.Behera,DeputyManagingDirector (upto 28.03.2018)

Mr. Raghvendra Kumar, Deputy Managing Director (w.e.f. 02.05.2018)

Statutory Auditors : M/s Prakash Chandra Jain & Co. Chartered Accountants 101,3D,DheerajEnclaveCHSL OppBhorIndustries,Borivali(E) Mumbai400066

Bankers : HDFCBankLtd AndhraBank BankofIndia KotakBank CorporationBank StateBankofIndia UnionBank AxisBank

Debenture Trustee : IDBITrusteeshipServicesLimited AsianBuilding,GroundFloor17, 17,R.KamaniMarg,BallardEstate, Mumbai-400001 Tel:+912240807014 Fax:+912266311776

Registered & : A/B1,802,A-Wing,8thFloor,MarathonInnova,Corporate Office MarathonNextgenCompound,Off.G.K.Marg,

LowerParel(West),Mumbai400013.

CIN:U51900MH1994PLC078303

Website:-www.stcionline.com

CORPORATE INFORMATION



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Mr. K. Narasimha MurthyDirector

Mrs. Thankom T MathewDirector

Mr. S. K. BeheraDeputy Managing Director

(upto28.03.2018)

Mr. T. C. Venkat SubramanianDirector

Mr. T. V. RaoDirector

Mr. S. RaviDirector

Mr. Vivek WahiDirector

(w.e.f.02.05.2018)

BOARD OF DIRECTORS

Mr. Raghvendra KumarDeputy Managing Director

(w.e.f.02.05.2018)

Mr. Pradeep MadhavManaging Director & CEO



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TO THE SHAREHOLDERS OF


YourDirectorshavepleasureinpresentingtheTwentyFourthAnnualReportandtheauditedaccountsoftheCompanyfortheyearendedMarch31,2018.

1. FINANCIAL RESULTS` in Crore

Particulars March 31, 2018 March 31, 2017

TotalIncome 357.69 421.96

TotalExpenditure 253.80 326.36

Profit before dividend, tax and exceptional items 103.89 95.60

Dividend earned 1.98 76.61

Profit before tax 105.87 172.21

Less:Taxexpenses 33.58 32.30

Profit after Tax for the year 72.29 139.91

Add:Balancebroughtforwardfromlastyear 268.74 255.90

Amount available for appropriation 341.02 395.81

Transfertostatutoryreserves* 15.00 28.00

Interim Dividend - 95.00

TaxonInterimDividend - 4.07

Balancecarriedtobalancesheet 326.02 268.74

Total 341.02 395.81

Basicanddilutedearningpershare(Rs.) 19.02 36.82

*Created pursuant to Section 45 I /c of Reserve Bank of India Act, 1934 as amended in January 1997. This reserve forms part of free reserves, net owned funds and Tier I Capital.

2. RESULTS OF OPERATIONS AND THE STATE OF COMPANY’S AFFAIRS

ThehighlightsoftheperformanceoftheCompanyduringthefinancialyearendedMarch31,2018areasunder:

Thetotalloansdisbursedduringtheyearwere`2170croreasagainst`1432croreinthepreviousyear,representinganincreaseofabout52%.

Theloanbookstoodat`3528.42crore(afterwriteoffof loansof`23.32crore)asonMarch31,2018,asagainst `2999.43croreasonMarch31,2017,anincreaseofabout18%.

ThenetinterestincomefortheyearendedMarch31,2018was`166.23croreasagainst`188.37croreduringtheprevious year.

TheprofitbeforetaxfortheyearwasRs.105.87croreasagainstRs.172.21crore(includesdividendof`75crorefromSTCIPD)inthepreviousfinancialyear.

Theprofitaftertaxfortheyearwas`72.29croreasagainst`139.91crore(includesdividendof`75crorefromSTCIPD)inthepreviousyear.

3. TRANSFER TO RESERVES

Yourcompanyhastransferred20%ofitsProfitaftertaxamountingto`15.00croretoStatutoryReserveasrequiredunderSection45ICoftheReserveBankofIndiaAct,1934.

DIRECTORS’ REPORT



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4. DIVIDEND

YourDirectorshaverecommendedadividendof8%(`8perequityshare)forthefinancialyearendedMarch31,2018. If approved by shareholders at the Annual GeneralMeeting, the dividend distributionwill result in a cash outflow of `36.65croreinclusiveofDividendDistributionTax.

5. MANAGEMENT DISCUSSION & ANALYSIS

I. Macro economic Overview

Worldgrowthstrengthenedin2017to3.8percent,withanotablereboundinglobaltrade,drivenbyaninvestmentrecoveryinadvancedeconomies,continuedstronggrowthinemergingAsia,anotableupswinginemergingEurope,andsignsof recovery in several commodityexporters. IMFworldeconomicoutlookupdate forApril2018projectsGlobalgrowthtoreach3.9percentin2018and2019,supportedbystrongmomentum,favorablemarketsentiment,accommodativefinancialconditions,andthedomesticandinternationalrepercussionsofexpansionaryfiscalpolicyinthe United States.

Onthedomesticfront,GDPgrowthfor2017-18hasbeenestimatedtodecelerateto6.7percentaspertheprovisionalestimates of CSO from 7.1 per cent recorded in 2016-17 as the economic activity was hit by the twin blows ofdemonetisationandimplementationissuesofGST.DomesticeconomicactivityshruggedoffthelossofspeedthathadcharacterisedtheperiodQ1:2016-17toQ1:2017-18andaturningpointappearstohavetakenholdinQ2-Q3,withleadindicatorspointingtofurtheraccelerationinQ4.AggregatedemandgrowthacceleratedinH2:2017-18,supportedmainlybyaninvestmentupturn,whileconsumptionremainedresilient.Aggregatesupplyconditionswerebuoyedbytherobustperformanceofthemanufacturingsectorandtheimprovementinactivityintheagricultureandservicessectors.

HeadlineCPIinflationreachedapeakof5.2percentinDecember2017,reflectinganunseasonalspikeinthepricesofvegetablesandthefullimpactofthecentralgovernmentimplementingthe7thCPC’sHRAaward.Thedelayedsettinginoftheseasonalfoodpricesmoderationtookdownheadlineinflationto4.4percentinFebruary2018.Themonetarypolicystancewaschangedto“neutral”from“accommodative”inFebruary2017andthiswasretainedthroughFY18withjustonecutinthereporateby25bpsintheAugust2017meeting,bringingthereporatedownto6%.Withthereporatecut,MCLRsdeclinedacrosstenorstillaroundFebruary2018,buttendedtoshowsomereversal inMarch2018.

Thecurrentaccountdeficitwidenedin2017-18onthebackofincreaseintradedeficit.ThecrudeoilpricesfirmedupfromUS$56toUS$67abarrelinJanuary2018andthereafterfluctuatedbetweenUS$60andUS$68.TheGrossfiscaldeficitofCentralGovernmentremainedatthelevelof3.5%ofGDPinFY2017,sameasinFY2016-17.TheGovernmenttargetstonarrowthefiscaldeficitto3.3%ofGDPforFY2019.

Going forward, economic activity is expected to improve in 2018-19, supported, inter alia, by the improving GSTimplementation,therecapitalisationofpublicsectorbanksandtheresolutionofdistressedassetsundertheIBC.ThefocusoftheUnionBudgetonRuralandinfrastructuresectorsshouldfurtherenergiseruraldemandandinvestment.Withtheaccelerationinglobaltrade,theIndianeconomycouldbenefitfrombuoyantexternaldemand.Inadditiontotheusualmonsoonrelateduncertainty,inflationfacesupsiderisksfromavarietyofothersources,especiallyduetotheoilprices,thefiscalslippage,uncertaintyoverthepaceandtimingofmonetarypolicynormalisationinadvancedeconomies,tradeprotectionismandfearsofatradewar.

II. NBFC Sector & Developments

Overview of NBFC sector

NBFCsareanintegralpartofIndianFinancialSystemcontributingtowardsinclusivegrowthinthecountrybyprovidingcredittothecustomersintheunderservedandunbankedsegments.AsperCRISIL,NBFCshavebeensteadilygrowingtheirshareinthecreditmarketfrom13%inyear2013to16%in2017.NBFCsareexpectedtoconsolidatetheirpositionfurtheroverthenextcoupleofyearswiththeirshareincreasingto19-20%by2020.ThegrowthofNBFCshasbeendrivenbyfactorsliketheirabilitytolendtosectorsandcustomerswhofinditdifficulttoobtainbanklending,abilitytocustomiseandoffermorespecializedservices,betterservicethroughfasterresponseandpersonalizedapproach,lowercostduetofocusedbusinessmodel,andabilitytocontrolrisksandtoadapttochanges.

DIRECTORS’ REPORT



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AsperFinancialStabilityReportofRBIdatedJune30,2018,asofMarch,2018therewere11,402NBFCsregisteredwith ReserveBank of India, ofwhich 156were deposit accepting (NBFCs-D) and 249were Systemically Important Non-DepositacceptingNBFCs(NBFCs-NDSI).TheaggregatebalancesheetsizeoftheNBFCsectorgrewby18.6percentinFY2018ascomparedto15.2percentinthepreviousyear.TherewasdecelerationinsharecapitalgrowthofNBFCsinFY2018whereasborrowingsgrewat19.1percentimplyingrisingleverageintheNBFCsector.TheloanandadvancesoftheNBFCssectorsgrewby21.2percentinFY2018vis-a-vis14.6percentinthepreviousyear.Thenetprofitofthesectorincreasedby30.8percentinFY2018.Netprofitasapercentageoftotalincomeincreasedfrom13.4percentinFY2017to15.6percentinFY2018.TheReturnonAssets(ROA)increasedduringthesameperiodfrom1.6percentinFY2017to1.9percentinFY2018.TheGrossNon-performingassets(GNPAs)ofthesectorasapercentageoftotaladvancesdeclinedfrom6.1%inFY2017to5.8%inFY2018.Capitaladequacy(CRAR)oftheNBFCsectoralsoincreasedfrom22percentinFY2017to22.9%inFY2018.

Challenges

NBFCscouldcomeunderpressureduetothefollowingRegulatoryandotherdevelopments:

IndiaRatings&Research(Ind-Ra)expectsspreadsofNBFCstocomeunderpressureinFY19duetodualimpactofrisingfundingcostastheinterestratecurveshiftsupwardandcompressionofyieldsduetorisingofcompetition.Creditcostpressurecouldstartreflectinginsomeoftheassetclassessuchaswholesalerealestateandfurtheraccentuateinloanagainstproperty(LAP).

The increase in interest rate rise (by110bpsinceSeptember2017) is likely toputpressureonprofitabilityofNBFCs.Inanyevent-driventighteningofliquidity,NBFCshavingincreasedrelianceonshorttermfundingcouldfacerefinancingchallenges.

WholesaleNBFCsoperating in the realestate spacehavewitnessedaggressive competition togarnermarketshareleadingtoareductioninyieldby200-250bpinthelasteightquartersforasimilarriskprofileborrower. Large-tickethousingandlarge-ticketLAPloanyieldsarelikelytowitnessfurthershrinkage,asbanksincreasefocusonthesesegments.Thesesegmentshavewitnessedasharpshrinkageinmarginsforstrongcreditcustomers.NBFCswouldincreasinglyfinditdifficulttoprofitablylendunderthesecategories.

Reducedsalesvelocityintherealestateindustryloweredthedebtservicingcapabilityofborrowers.However,support through refinancing from NBFCs and private equity players has masked some real pressure on theborrowerside.WiththeimplementationoftheRealEstate(RegulationandDevelopment)Act,2016,(RERA)theindustryisaligningitselfwithanexpectationofanincreaseinearly-stagefinancing,whereriskscouldbehigher.Whilethecurrentdelinquencylevelsaremodestacrossthemajorityofrealestateplayers,somestressmaystartreflectingintheloanportfolioasliquiditytightensforfinancersandriskaversionbuildsup.

Unfavourableeconomicconditions,unstablepoliticalenvironmentandchangesinGovernmentpolicies/regulatoryframeworkcouldimpactthegrowthoftheloanbook,qualityofassetsandtheabilitytoraisefundsbyNBFCs.

Opportunities

NBFCsarelikelytobenefitfromthefollowingopportunitiesanddevelopmentsinthemarket:

NBFCs’nicheincertainassetclasseswouldenablethemtoexpandtheirmarketshare.Eveninthelarge-ticketmidcorporatesegment,wholesaleanddiversifiedNBFCswouldcontinuetogainshareastheypossesstheabilitytopricetheriskandloanstructuringflexibility.Ind-RaexpectslargeNBFCstogrow18%%yoyoverFY18-FY19.

Therealestateandloanagainstproperty(LAP)segmentfaceddisruptionswithGovernmentreformsintheformofdemonetisation,implementationofGSTandRERAtillfirsthalfofFY2017.Postdemonetisation,progressivefamiliarisationwithGSTregulationsandfavourablerealestatepricesinTier-IIandsmallertowns,ledtoaslowandgradualrecoveryinLAPsegmentinFY18whichisexpectedtoimproveinFY19.Thestructuralreformsareexpectedtobringinbrightergrowthprospectsinthemediumterm(FY20andbeyond).CRISILresearchexpectsLAPportfoliotogrowat13-15%inFY19.

Ind-RadoesnotexpectanysignificantriseindelinquenciesintheNBFCsectorandhenceexpectscreditcoststobestable.Consideringthetransitiontothe90dayspastdue(dpd)non-performingassetrecognitioniscompletebyFY18,NBFCscouldfurtherrecalibratetheirprovisioningpolicytocushiontheimpactoncreditcost.

DIRECTORS’ REPORT



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WithNBFCsfacingamarginalriseinborrowingscostowingtothehardeningofinterestratesandtheirlimitedability topasson the increase through lending rates,marginsmayslightlycomeunderpressure inFY19.Theoperating profit buffers, albeit comfortable, can show somemoderation in FY19. NBFCs are well capitalisedwithsignificantcushionovertheregulatoryrequirement.Withmodestgrowthexpectationsandstableinternalaccruals,Ind-Radoesnotexpectanydilutionofcapitalbuffersinthesector.

ThefundingprofileofNBFCsarefairlydiversified,withresourcesmobilisedintheformofbanktermloansandworkingcapitalfacilities,commercialpaper,debenturesetc.However,withthehardeningofinterestrates,bankfundingislikelytoincrease.

TheimplementationoftheInsolvencyandBankruptcyCode,2016,ischangingthelandscapeforrestructuringofstressedassetsbyensuringtime-boundsettlementsofinsolvenciesandfasterturnaround-timesforbusinesses.Thisalongwiththeamendmentsindebtrecoveryandenforcementlaws,wouldgoalongwaytowardsresolvingthetwinbalancesheetproblem(aleveragedcorporatesectoralongsideastressedbankingsector).Thisinturncouldimprovetheinvestmentclimateinthecountry.

TheregulatoryreformsimplementedthroughtheRERAandGSThaslenttransparencytothesectorandmadeitmoreformalised.RERAintroducesfairpracticesthatwouldprotecttheinterestoftheinvestors.Itattemptstoensurethatprojectsaredeliveredintimeandtheinvestor’smoneyisnotmisused.Thiswill boost investment in therealestatesector

Lookingahead,theNBFCsectorappearstobewell-poisedtotakebenefitofthebusinessenvironmentandgrow.

III. Business Review

STCIFinanceLimited isaSystematically ImportantNon-Deposit takingNon-BankingFinancialCompanyundertakinglendingandinvestmentactivitiessince2008.Withthegrowthinthesizeoftheloanbook,STCIFinanceLimitedhasbeenclassifiedasaLoanNBFCsinceyear2011withLendingasitsmainbusinessactivity.TheCompanyisadiversifiedmid-marketB2BNBFC thatprovidescustomizedfinancial solutions toawidespectrumofcustomers ranging fromCorporates,firmsandHighNetworthIndividualsthroughitsloanproductofferingsofLoanagainstsecurities/PromoterFundingandCorporate&otherloanproducts.

(i) Lending operations

STCIFinanceLimitedhasbeenprimarilycateringtotwosegmentsviz.LoanagainstSecurities(LAS)andCorporate&other loanssegment. In theLoanagainstsecurities (LAS)segment, theCompanyoffersLoantopromoters,Corporates,FirmsandIndividualsagainst(listed)singlescripormultiscripsecurity.IntheCorporateandotherloanssegment,theCompanyoffersLoantoRealEstateDevelopersagainstmortgageofpropertyandreceivables,Loan (other than real estate) to Corporates/SMEs etc against property/ receivables/other assets for businesspurposes, structured loans, term loan,bridgefinance, Loanagainst lease rentals, equipmentfinance, lineofcredit,specialsituationlendingetc.Overthelastfewyears,theCompanyhasstrategicallyshifteditsfocustotheCorporate&otherloanssegmenttodiversifyitsloanportfolio.Asaresult,therehasbeenasteadyincreaseintheproportionofthecorporate&otherloanssegment.

During the year, theCompanyhaswidened its product offerings in theCorporate&other loans segmentbydevelopingnewloanproductsinsectorssuchasHealthcare,Education,Manufacturing,Warehousing,financialservicesandEngineering,Procurement&Constructionsector.TheCompanyhasintroducedloanproductssuchastermloans,projectfinance,equipmentfinance,Purchasebilldiscounting/SalesBilldiscounting,LeaseRentalDiscounting (LRD) in the aforesaid sectors and also lending via subscriptionof securedNCDs. The Companyoperates from its Corporate office inMumbai and representative office in Delhi. The Company has recentlyopenedofficesinPune,HyderabadandBengalurutoharnesstheemergingopportunitiesfortheNBFCsectorinthesecities.

Duringtheyearunderreview,theCompanydisbursedloansaggregatingtoRs.2170croreascomparedtoRs.1432croreinthepreviousyear,representinganincreaseofabout52%overthepreviousyear.TheCompany’sloanbookstoodatRs.3528croreasonMarch31,2018,asagainstRs.3000croreonMarch31,2017,registeringagrowthof18%.TheCompanycontinuedtoremainfocusonthecorporate&otherloanssegmentandwideneditsproductsuiteinthissegmenttodiversifytheloanbook.Consequently,theloanproductmixoftheCompany

DIRECTORS’ REPORT



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improvedwithincreaseinproportionoftheCorporate&otherLoanssegmentto44%ofthetotalloanbookonMarch31,2018from39%attheendofthepreviousyearanddeclineintheproportionofLASsegmentto56%ofthetotalloanbookonMarch31,2017from61%attheendofthepreviousyear.

DetailsoftheloanbookoutstandingasonMarch31,2018areasunder:

Particulars 31.03.2018 31.03.2017

(` in crore) (` in crore)

Loan against shares/ Promoter Funding 1977.09(56%) 1937.12(61%)

Corporate&otherloanproducts (Loanagainstproperty,RealestateDeveloperloansetc)

1574.65(44%) 1214.31(39%)

Total Loan Book 3551.74 (100%) 3151.43 (100%)

Less:Loanswrittenoff 23.32 152.00

Outstanding Loan Book 3528.42 2999.43

Duringtheyearunderreview,theinterestincomeontheloanbookwasRs.333.43asagainstRs.383.12croreinthepreviousyear.Thedecreasewasprimarilyonaccountoflowerinterestyieldontheloanportfolioandlargepre-paymentsofhighinterestyieldingloansduringtheyear.

Asset Quality

Duringtheyearunderreview, theCompanycontinuedwith its recoveryeffortsandcouldeffectrecoveries infewNPAaccounts.TheCompanyhaswrittenoffRs.23.32croreinrespectofindividualloansforwhichrecoverywasdifficultinthenearfutureoutoftheexistingprovisionheldinrespectoftheloans.TheCompanyidentifiedNPAsduringtheyearandmaderequiredprovisionsonsuchNPAs.Asaresult,thegrossnon-performingassetsincreasedduringtheyearto3.96%oftheloanbookasonMarch31,2018from2.39%oftheloanbookasonMarch31,2017.ThenetNPAsalsoincreasedto1.97%oftheloanbookasonMarch31,2018from1.02%oftheloanbookasonMarch31,2017.

(ii) Treasury operations

During the periodunderreview,yourCompanygeneratedincome/revenueofRs.8.72crorefromtheequityandfixedincomesecuritiessegmentasagainstRs.25.68croreduringthepreviousyear.

Segment wise performance of the Company

ThesegmentwiseresultsofLendingbusinessandtreasuryoperationsareasunder:(Rs in crore)

Segment InformationLending Treasury

2017-18 2016-17 2017-18 2016-17

TotalRevenue 342.65 391.82 8.72 25.68

SegmentResultProfit/Loss 112.91 89.32 4.50 21.19

(iii) Resource Mobilisation

During the year underreview,yourCompanycontinuedtousediversesourcesoffundingbyissueofCommercialPapers,Non-ConvertibleDebentures(NCDs),SecuredTermLoans,BanklineofCreditandCBLOborrowingtowardsadequateasset liabilitymanagement.YourCompanycontinuedtoaugment its long termsourcesof fundsbyavailing secured term loans fromBanks at competitive rates. Your companyhas total sanctionof term loansamountingtoRs.750crorefromvariousBanksoutofwhichloansaggregatingtoRs.660crorehavebeenavailedbytheCompanyasonMarch31,2018.

Yourcompanyhasbeenregularinservicingallitsdebtobligations.

DIRECTORS’ REPORT



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(iv) Credit rating

YourCompanycontinuestoenjoythehighestratingsofA1+fromratingagencies,CRISILandICRA,foritsshorttermborrowingprogramme.TheratingfortheCompany’slongtermdebtprogrammebyratingagencies,ICRAandICRAcontinuedtoremainAA-withstableoutlook.

(v) Capital to Risk Assets Ratio (CRAR)

The Company maintainedCRARwellabovetheregulatorynormsthroughouttheyear.AsonMarch31,2018,theCRARwas31.71%.Althoughgoingforward,withgrowthinloanbook,theCRARislikelytoslide,yetthesamewillremainwellabovetheregulatoryrequirement.

(vi) Risk Management

YourCompany,beinginthebusinessoflendingandtreasuryoperationshastomanagevariousrisks.ThekeyrisksfacedbytheCompanyarecreditrisk,liquidityrisk,interestrateriskandoperationalrisk.ThecompanyhasinplacepoliciesandproceduresforaddressingthevariousrisksassociatedwiththeCompany’slendingbusinessand treasuryoperations.Theoverallmanagementof interest rate risk is carriedout through thematchingofthematuritiesofassetsandliabilities,asapartoftheAsset-LiabilityManagementprocess.TheAssetLiabilityManagementCommitteereviewsandmonitortheserisksatperiodic intervals.Anylendingactivityisexposedtocredit riskarising fromtheriskofdefaultbyborrowers.The issuerhas inplacecreditappraisal,credit riskmonitoringandmanagement systems. Itundertakesaperiodic reviewof itsentire loanportfoliowithaviewtoidentifyingpotentialareasofactionanddeviseappropriatestrategiesthereon.TheoperationalrisksoftheCompanyaremanagedthroughinternalcontrolsystemsandproceduresand key back up processes.

(vii) Internal Financial Controls and their adequacy

YourCompanyhasinplaceadequateinternalfinancialcontrolframeworkcommensuratewiththenature,sizeandscaleofoperationsoftheCompany.AreviewoftheoverallinternalfinancialcontrolsoverfinancialreportingwasundertakenbytheInternalAuditorsformajorareasofoperationsoftheCompanyduringtheyearbasedonthelaiddownInternalFinancialControlframeworkandthesamewasfoundtobeadequatevis-avisthepresentnatureandscaleoftheoperations.

(viii) Regulatory Compliance

YourCompanyhascompliedwithalltheapplicableguidelinesprescribedbyRBIforNBFCsregardingaccountingstandards, income recognition, valuation of securities, capital adequacy, corporate governance etc and theapplicableGuidelinesprescribedbySEBIandnopenaltiesorrestrictionswereimposedbyanyregulatoryauthorityduring the period.

(ix) HR Resources

The Company aims to recruit and retain talent in the organisation by providing a productive work placeenvironment.Withaviewtostrengtheningitshumanresources,theCompanyhasbeenrecruitingprofessionalswithappropriateskillsandexperienceatmiddleandjuniormanagementlevels.Recognisingtheimportanceofknowledgeenrichmentofitsemployeesandexposingofficerstothelatestdevelopmentsinthefinancialsector,theCompanydeputesitsofficersforappropriatetrainingprogrammes,seminarsandconferences.TheCompany’sHR functionshavebeenoutsourced to M/sCerebrusConsultantswhoprovideHRsupportbywayof reviewofCompany’sHRpolicies,PerformanceLinkedVariableScheme,KeyHiringPlan,newEmployeeSelectionand On-Boarding,SkillandCapabilitybuildingforemployeesandotherregularHRmanagementactivities.

ThestaffstrengthonMarch31,2018is44.

(x) Outlook for the current year

Creditgrowthisacceleratingandisalsobecomingincreasinglybroad-basedwhichbodeswellforsustainingthepick-upindomesticeconomicactivity.Goingforward,theeconomicactivityisexpectedtoacceleratewiththestrengtheningofinvestmentactivity,supportedbyconsumptiondemandandrobustcreditgrowth.

DIRECTORS’ REPORT



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Keepinginviewtheimprovingbusinessenvironment,yourCompanyexpectssteadygrowthinitslendingbusinessthisyear.TheCompanyplanstore-balanceanddiversifyitsloanportfoliobyincreasingitsfocusonthecorporateloan&otherloanssegmentandadoptingacautiousandselectiveapproachtowardslendingintheLoanagainstsecurities(LAS)segment.TheCompanyplanstoexpanditscorporate&otherloanssegmentbyreachingouttoawidercustomerbaseandaddingnewloanproducts.Inordertocatertoawidercustomerbase,theCompanywillleverageitsexistingcustomerrelationshipsandforayintonewlocationsinaphasedmanner.TheCompanywillremainfocussedonmaintainingabalancebetweengrowthandassetquality.TheCompanyshallalsocontinuewithitseffortsinestablishingitselfasapreferredpartnerwithquickturnaroundtimeandbestpractices.

Equityandbondmarketsremainvulnerabletoepisodicboutsofvolatilityinaperiodofconsiderableuncertaintysurroundingtheevolutionofglobalfinancialmarketsaswellasarounddomesticdevelopmentswhichcanimpactmarketsentimentandliquidityconditionssignificantly.Goingforward,thoughtheinflationmayremainintheRBI’srange,theunaccountedimpactoftheMSPsandthehighercrudeoilpricesmayputupwardpressureontheyields.UncertaintyonthefiscalslippageinthiselectionyearandtheRBI’spolicyactionmaykeeptheyieldsincheck.

Overall theoutlook foryourCompany’sbusiness is favourableandyourCompany iswellpoised togrowandcapitaliseonthisopportunity.

6. SUBSIDIARY COMPANIES & THEIR PERFORMANCE

YourCompanyhasthefollowingsubsidiaries:

STCIPrimaryDealerLtd(whollyownedsubsidiary)

STCICommoditiesLtd(whollyownedsubsidiary)

In termsof theprovisionsof Section129(3)of theCompaniesAct, 2013, theConsolidatedFinancial Statementsof theCompanyanditssubsidiaries,STCIPrimaryDealerLtdandSTCICommoditiesLtdfortheyearended31stMarch2018arepreparedandthesamealongwiththeAuditors’ReportformpartofthisAnnualReport.

PursuanttothefirstprovisoofSection129(3)oftheCompaniesActreadwithRule5oftheCompanies(Accounts)rules2014,aseparatestatementcontainingthesalientfeaturesofthefinancialstatementofitssubsidiariesintheprescribedformAOC-IareannexedtotheCompany’sauditedfinancialstatementfortheyearendedMarch31,2018.However,briefcommentsontheirperformanceduringtheyeararebeinggivensoastopresentaconsolidatedpositionoftheoperationsofSTCIGrouptotheshareholders.

(i) STCI Primary Dealer Limited

STCIPrimaryDealerLimited,yourCompany’ssubsidiaryengagedinPrimaryDealershipbusiness, reportedaprofitaftertaxofRs39.15croreforthefinancialyearendedMarch31,2018asagainstaprofitaftertaxofRs.178.12croreduringthepreviousfinancialyear.Thelowerprofitswereprimarilyonaccountofdifficultmarketconditionsduringmostpartoftheyear.

TheAuditedfinancialstatementsalongwiththeAuditors’ReportandtheDirectorsReportthereonofSTCIPrimaryDealerLimitedforthefinancialyearendedMarch31,2018formpartofthisAnnualReport.

(ii) STCI Commodities Limited

STCICommoditiesLimited,yourCompany’ssubsidiarydiscontinueditscommoditybrokingoperationswitheffectfromSeptember22,2011.Sincethen,theCompanyhasbeen liquidating itsassets,payingoff itsclientsdues,settingitspendinglegalcasesandsurrenderingitsmembershipwithMultiCommodityExchangeandNationalCommodityandDerivativeExchange.Asaresult,STCICommoditiesLimitedreportedaprofitaftertaxofRs.16.25lakhfortheyearendedMarch31,2018asagainstaprofitbeforetaxofRs.8.86lakhinthepreviousyear.

TheAuditedfinancialstatementsalongwiththeAuditors’ReportandtheDirectorsReportthereonofSTCICommoditiesLimitedforthefinancialyearendedMarch31,2018formpartofthisAnnualReport.

DIRECTORS’ REPORT



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7. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Cessation

Duringtheyearunderreview,Mr.MelwynORego,nominatedbyBankofIndia,resignedasDirectorfromtheBoardoftheCompanywitheffectfromMay05,2017consequenttohisappointmentasManagingDirector&CEOofSyndicateBank.TheBoardplacesonrecorditsappreciationfortheservicesrenderedbyMr.MelwynORegoasDirectoroftheCompanyandforhiscontributionsattheBoardMeetings.

Mr.S.KBehera,ceasedtoholdofficeasDeputyManagingDirectorandDirectoroftheCompanyonthecloseofbusinessofMarch28,2018pursuant towithdrawalofhisnominationbyBankof India.Accordingly,heceased tobeaKeyManagementPersonneloftheCompany.TheBoardplacesonrecorditsappreciationforthevaluableservicesrenderedbyhimtotheCompanyduringhistenureasDeputyManagingDirectorandDirectoroftheCompany.

Appointment / Re-appointment

(a) Independent Directors

Duringtheyear,theBoardofDirectorsvideresolutionpassedonAugust23,2017,upontherecommendationoftheNomination,Remuneration&HRDCommittee,recommendedfortheapprovaloftheMembers,there-appointmentofShriK.NarasimhaMurthy (DIN00023046),ShriS.Ravi (DIN00009790) andShriT.VRao (DIN05273533)asIndependentDirectorsoftheCompany,notliabletoretirebyrotationforasecondtermoftwoconsecutiveyears.Atthe23rdAnnualGeneralMeeting(AGM)oftheCompanyheldonSeptember22,2017,themembersre-appointedShriK.NarasimhaMurthy,ShriS.RaviandShriT.VRaoasIndependentDirectorsoftheCompany,notliabletoretirebyrotationforasecondtermoftwoconsecutiveyears.

Subsequenttotheyearunderreview,theBoardofDirectorsattheirmeetingheldonJuly25,2018,upontherecommendationoftheNomination,Remuneration&HRDCommittee,haverecommendedfortheapprovalofthemembersattheensuingAGM,re-appointmentofMs.ThankomTMathewasanIndependentDirectornotliable to retireby rotation, fora second termoffiveconsecutiveyears.Ms.ThankomTMathewwas initiallyappointedasanIndependentDirectoratthe21stAGMoftheCompanyheldonSeptember23,2015foratermofthreeconsecutiveyearsuptotheconclusionofthe24thAGMtobeheldincalendaryear2018.TheCompanyhasreceivedanoticeinwritingunderSection160oftheActproposingtheappointmentofMs.ThankomTMathewfortheofficeofIndependentDirector.Thedetailsofherproposedre-appointmentandbriefprofilearefurnishedintheexplanatorystatementannexedtotheNoticeoftheensuingAGM.

(b) Nominee Directors

Pursuant toBankof India’s letterdatedMarch28,2018nominating Mr.RaghvendraKumar (DIN08045355),DeputyGeneralManagerofBankofIndia,asaWholetimeDirector-DMDontheBoardoftheCompany,theBoardofDirectorsatitsmeetingheldonMay02,2018,upontherecommendationoftheNomination,Remuneration&HRDCommittee,appointedMr.RaghvendraKumarasanAdditionalDirectorandasaWholeTimeDirector,designatedasDeputyManagingDirector(DMD),foratermofoneyearwitheffectfromMay03,2018.Intermsof Section161of theAct readwithArticle101of theCompany’sArticleofAssociationheholdsofficeasanAdditionalDirectoruptothedateoftheensuingAGMandiseligibleforappointmentatsuchmeeting.TheBoardrecommendshisappointmentasaDirectorliabletoretirebyrotationfortheapprovalofthemembersattheensuingAnnualGeneralMeeting.Further,intermsofSection203,196,197,203readwithScheduleVoftheAct,therequisiteresolution inregardtoappointmentofMr.RaghvendraKumarasaWholetimeDirector-DMDisincludedintheNoticeoftheensuingAGMfortheapprovalofthemembers.

Further, pursuant to Bank of India’s letter dated April 26, 2018 nominatingMr. VivekWahi (DIN 07490023),GeneralManager,TreasuryofBankofIndia,asDirectorontheBoardoftheCompany,theBoardofDirectorsatitsmeetingheldonMay02,2018,upontherecommendationoftheNomination,Remuneration&HRDCommittee,appointedMr.VivekWahi,asanAdditionalDirectoroftheCompany.IntermsofSection161oftheCompaniesAct,2013(‘theAct’)readwithArticle101oftheCompany’sArticleofAssociationheholdsofficeuptothedateoftheensuingAGMandiseligibleforappointmentatsuchmeeting.TheBoardrecommendshisappointmentasaDirectorliabletoretirebyrotationattheensuingAnnualGeneralMeetingoftheCompany.

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The Company has received separate notices under Section 160 of the Act along with the requisite depositproposingtheappointmentofMr.RaghvendraKumarandMr.VivekWahifortheofficeofDirector.ThedetailsoftheproposedappointmentsandtheirbriefprofilearefurnishedintheexplanatorystatementannexedtotheNoticeoftheAnnualGeneralMeeting.

Retirement by rotation & re-appointment

Mr.T.CVenkatSubramanianretiresbyrotationattheensuingAnnualGeneralMeetingandbeingeligible,offershimselfforre-appointment.TheBoardrecommendshisre-appointmentasaDirectorliabletoretirebyrotationattheensuingAnnualGeneralMeeting.HisbriefprofileisgivenintheExplanatoryStatementannexedtotheNoticefortheensuingAnnualGeneralMeeting.

8. DECLARATION BY INDEPENDENT DIRECTORS

TheCompanyhasreceiveddeclarationsfromallIndependentDirectorsoftheCompanyconfirmingthattheymeetwiththecriteriaofindependenceasprescribedundersub-section(6)ofSection149oftheCompaniesAct,2013.

9. BOARD OF DIRECTORS

Composition

TheBoardofDirectorscompriseofprofessionalswithwideexperienceandskills inthefieldofBankingandFinance.AsonthedateoftheReport,theBoardcomprisesofeightDirectorsconsistingof(i)sixNon-ExecutiveDirectorsoutofwhichfourareIndependentviz.Mr.T.CVenkatSubramanian(Non-Executive),Mr.K.NarasimhaMurthy(Independent),Mr.S.Ravi(Independent),Mr.T.VRao(Independent),Mrs.ThankomT.Mathew(Independent)andMr.VivekWahi(nomineeofBankofIndia)(ii)TwoExecutiveDirectorsviz.Mr.PradeepMadhav,ManagingDirector&CEOandMr.RaghvendraKumar,DeputyManagingDirector(nomineeofBankofIndia).

Meetings held during the financial year:

During the financial year 2017-18, four Meetings of the Board were held on April 26, 2017, August 09, 2017, November07,2017andFebruary08,2018.ThecompositionoftheBoardandattendanceofDirectorsattheBoardmeetingsheldduringthefinancialyearunderreviewaregivenbelow:

Name of Director Category Number of meetings attended /number of meetings held during the tenure of Director

Mr.MelwynOswaldRego(DIN00292670)

Non-ExecutiveDirector 0/1

Mr. T. C. Venkat Subramanian(DIN00040526)

Independent Director 4/4

Mr. K. Narasimha Murthy(DIN00023046)


Mr. S. Ravi(DIN00009790)


Mr. T. V. Rao(DIN05273533)


Mrs. Thankom T. Mathew(DIN00025326)


Mr. Pradeep Madhav(DIN00267422)

Managing Director & CEO 4/4

Mr.S.K.Behera(DIN07480667)

Deputy Managing Director(uptoMarch28,2018)

4/4

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10. COMMITTEES OF THE BOARD

OnthedateofReport,yourCompanyhasthefollowingfiveBoardLevelCommittees.Thecomposition,scopeandfunctionsoftheseCommittees,thenumberofmeetingsheldduringthefinancialyear2017-18andattendanceattheCommitteemeetingshavebeendetailedbelow:

(i) AuditCommittee

(ii) Nomination,Remuneration&HRDCommittee

(iii) CSRCommittee

(iv) CreditandInvestmentCommittee

(v) RiskManagementCommittee.

(i) AUDIT COMMITTEE

Audit Committee has been constituted by the Board of Directors in linewith requirements of Section 177 of theCompaniesAct,2013andtherulesframedthereunder.

Composition

OnthedateoftheReport,theAuditCommitteeoftheBoardcomprisesoffourDirectorsoutofwhichthreeincludingtheChairmanof theCommitteeare Independent.Mr. K.NarasimhaMurthy (Independent) is theChairmanof theCommitteeandothermembersoftheCommitteeareMr.S.Ravi(Independent),Ms.ThankomTMathew(Independent)andMr.RaghvendraKumar(DeputyMD).AllmembersoftheAuditCommitteehaverequisitefinancialandmanagementexpertiseandhaveheldorholdsenior/toppositionsinreputedInstitutions.

Scope and Functions

Presently, the scopeand functionsof theAuditCommitteeare asper Section177ofCompaniesAct, 2013and inparticularincludethefollowing:

recommendappointmentandtermsofappointmentofauditors;

reviewandmonitorauditor’sindependenceandperformanceandeffectivenessofauditprocess,

approvaloranysubsequentmodificationoftransactionswithrelatedparties,

scrutinyofinter-corporateloansandinvestment

Overseeingfinancialreportingprocesses

valuationofundertakingorassetsoftheCompany,

oversee the functioning of vigilmechanism established under the Act for directors and employees and takesuitableactionwhererequired.

Reviewingperiodicfinancialresults,financialstatementsandevaluatingtheadequacyofinternalfinancialcontrolsystems

Reviewing the annual financial statementswith theManagement and StatutoryAuditors and recommendingconsiderationthereoftotheBoardofDirectors

DiscussingandreviewingperiodicallytheInternalandConcurrentAuditReportsandthescopeandadequacyoftheInternalAuditfunction.

ReviewingtheAudit/InspectionreportsoftheComptroller&AuditorGeneralofIndia,ReserveBankofIndiaetc

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Meetings held during the financial year

During the financial year 2017-18, five Audit Committee meetings were held on April 11, 2017, April 26, 2017, August09,2017,November07,2017andFebruary08,2018.ThecompositionoftheAuditCommitteeandattendanceofthemembersattheCommitteemeetingsheldduringthefinancialyearunderreviewaregivenbelow:


Mr. S.Ravi Independent Director(ChairmanofCommitteeuptoFebruary08,2018)

5/5

Mr. K.Narasimha Murthy Independent Director(ChairmanofCommitteew.e.fFebruary09,2018)

Nil

*Mr.T.CVenkatSubramanian Non-ExecutiveDirector 5/5**Mr.T.VRao Independent Director 5/5Ms. Thankom T Mathew Independent Director 5/5

* Ceased to be Member of the Committee w.e.f February 09, 2018** Ceased to be Member of the Committee w.e.f February 09, 2018

(ii) NOMINATION, REMUNERATION & HRD COMMITTEE

TheNomination,Remuneration&HRDCommitteehasbeenconstitutedbytheBoardtoperformtheroleandfunctionsoftheNomination&RemunerationCommitteestipulatedundersection178oftheCompaniesAct2013andalsotoreviewtheHumanResourcespolicyandprocedurefollowedbytheCompany.

Composition:

Presently,theNomination,Remuneration&HRDCommitteecomprisesoffour DirectorsallofwhomincludingtheChairmanof theCommitteeare Independent.Mr.S.Ravi (Independent) is theChairmanof theCommitteeand theothermembersareMr.K.NarasimhaMurthy(Independent),Mr.T.VRao,(Independent)andMs.ThankomTMathew(Independent).

Scope and Functions

ThescopeandfunctionsoftheNomination,Remuneration&HRDCommitteeinparticularincludethefollowing:

Formulate the criteria for determining qualifications, positive attributes and independence of a director andIdentifypersonswhoarequalified tobecomedirectorsandwhomaybeappointed inseniormanagement inaccordancewiththecriterialaiddown,recommendtotheBoardtheirappointmentandremoval

Tospecify themanner foreffectiveevaluationofperformanceof theBoard, itscommitteesand its individualdirectorstobecarriedouteitherbytheBoard,bytheCommittee,byanindependentexternalagencyandreviewitsimplementationandcompliance.

RecommendtotheBoardapolicyrelatingtotheremunerationforthedirectors,keymanagerialpersonnelandotheremployees.

Ensurethatintheremunerationpolicy(i)thelevelandcompositionofremunerationisreasonableandsufficienttoattract,retainandmotivatedirectorsofqualitytorunthecompanysuccessfully,(ii)relationshipofremunerationtoperformanceisclear(iii)remunerationtodirectors,KMPsandseniormanagementinvolvesabalancebetweenfixedandincentivepayreflectingtheperformanceobjectivesappropriatetotheworkingoftheCompanyandgoals.

reviewtheHumanResourcespolicyandproceduretobefollowedbytheCompanybesidestheremunerationtobe paid to the Managing Director

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Duringthefinancialyear2017-18,fourMeetingsoftheNomination,Remuneration&HRDCommitteewereheldonApril26,2017,August09,2017,November02,2017and February08,2018.Thecompositionof theNomination,Remuneration&HRDCommitteeandattendanceofthemembersattheCommitteemeetingsheldduringthefinancialyearunderreviewaregivenbelow:


Mr. S.Ravi Independent Director(ChairmanoftheCommittee)

4/4

*Mr.T.CVenkatSubramanian Non-ExecutiveDirector 4/4**Mr.K.NarasimhaMurthy Independent Director NilMr. T.V Rao Independent Director 4/4Ms. Thankom T Mathew Independent Director 4/4

* Ceased to be a member of the Committee w.e.f February 09, 2018** Inducted as a member of the Committee w.e.f February 09, 2018

(iii) CSR Committee

TheCSRCommitteeoftheBoardhasbeenconstitutedbytheBoardofDirectorsoftheCompanyaspertherequirementsofSection135oftheCompaniesAct,2013toperformthescopeandfunctionsstipulatedundertheActandtherulesmade hereunder.

Composition

OnthedateoftheReport,theCSRCommitteecomprisesoffiveDirectorsoutofwhichthreeDirectorsincludingtheChairmanoftheCommitteeareIndependent.Mr.T.VRao,(Independent)istheChairmanoftheCommitteeandtheothermembers areMr. K.NarasimhaMurthy (Independent),Ms. Thankom TMathew (independent),Mr. PradeepMadhav(MD&CEO)andMr.RaghvendraKumar(DeputyMD).

Scope and Functions

ThescopeandfunctionsoftheCSRCommitteeareasperSection135ofCompaniesAct,2013andinparticularinclude–

FormulateandrecommendtotheBoard,aCSRpolicyindicatingtheactivityoractivitiestobeundertakenbythecompanyasspecifiedinScheduleVIIoftheAct.

Recommendtheamounttobespentontheseactivities;andmonitorthecompany’sCSRpolicyperiodically.

InstitutetransparentmonitoringmechanismfortheimplementationofCSRprojects


Duringthefinancialyear2017-18,twoMeetingsoftheCSRCommitteeoftheBoardwereheldonNovember07,2017andFebruary08,2018.Thecompositionof theCSRCommitteeandattendanceof themembersat theCommitteemeetingsheldduringthefinancialyearunderreviewaregivenbelow:

Name of Director Category Number of meetings attended /number of meetings held in the tenure of Director

Mr. T.V Rao Independent Director(ChairmanoftheCommittee)

2/2

Mr. K.Narasimha Murthy Independent Director 1/2Ms. Thankom T Mathew Non-ExecutiveDirector 2/2Mr. Pradeep Madhav Managing Director & CEO 2/2Mr.S.KBehera Deputy Managing Director

(uptoMarch28,2018)2/2

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(iv) CREDIT AND INVESTMENT COMMITTEE (CIC)

Composition

On thedateofthereport,theCreditandInvestmentCommitteeoftheBoardcomprisesoffiveDirectorsconsistingoftwoExecutiveDirectorsandthreeNon-ExecutiveDirectorsoutofwhichtwoareIndependent.Mr.PradeepMadhav,MD&CEOistheChairmanoftheCommitteeandtheothermembersareMr.T.CVenkatSubramanian(Non-Executive),Mr.S.Ravi(Independent),Mr.T.VRao(independent)andMr.RaghvendraKumar(DMD).

Scope and Functions

The Committee considers and approves loan and investment proposals beyond the delegated authority of theCommitteeofExecutives,subjecttolimitslaiddownbytheBoardforexposuretoasingleborrowerandaborrowergroup. TheCommitteealso examines/vetsmatters relating to credit and investments viz. policies, conceptpapers,delegationofpowersetcandrecommendthesetotheBoardforapproval.

Meetings during the financial year

Duringthefinancialyear2017-18,ninemeetingsofCreditandInvestmentCommitteewereheldonJune20,2017,July06,2017, August08,2017,September26,2017, October12,2017,November17,2017,December15,2017,December27,2017andMarch08,2018.ThecompositionoftheCommitteeandattendanceofthemembersattheCommitteemeetingsheldduringthefinancialyear2017-18aregivenbelow:

Name of Director Category Number of meetings attended /number of meetings held during the tenure of Directors

Mr. T.C Venkat Subramanian Non-ExecutiveDirector(ChairmanoftheCommitteeuptoFebruary07,2018)

9/9

*Mr.K.NarasimhaMurthy Independent Director 7/8**Mr.S.Ravi Independent Director 1/1Mr. T.V Rao Independent Director 9/9Mr. Pradeep Madhav Managing Director & CEO

(ChairmanoftheCommitteew.e.fFebruary08,2018)

9/9

Mr.S.KBehera Deputy Managing Director(uptoMarch28,2018)

9/9

*Ceased to be a member of the Committee w.e.f February 08, 2018. ** Appointed as a member of the Committee w.e.f February 08, 2018

(v) Risk Management Committee of the Board

The Risk Management Committee has been constituted by the Board in line with the RBI corporate governanceguidelinesonconstitutionofaseparateriskmanagementcommitteefornon–deposittakingsystemically importantNBFCs.

Composition

OnthedateoftheReport,theRiskManagementCommitteecomprisesoffourDirectorsoutofwhichtwoDirectorsincluding the Chairman of the Committee are Non-Executive.Mr. T. C Venkat Subramanian (Non-Executive) is theChairmanoftheCommitteeandtheothermembersareMr.T.VRao(Independent),Mr.PradeepMadhav(MD&CEO)andMr.RaghvendraKumar(DeputyMD)

Scope and Functions

ThescopeandfunctionsoftheRiskManagementCommitteeinparticularincludeasfollows:

Approve and review the Risk management framework, policies governing various risks and the reportingmechanism.

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Approveandreviewthevariouslimitsandparametersfortradingandinvestment,stoplosspoliciesviz.settingupoftradingandinvestment limitsfortheCompany’sofficials,counterpartyexposure limits, instrumentwiseexposurelimitsetc.

ReviewofALMandreportsthataresubmittedtotheCommitteefromtimetotimeunderRBINBFCDirections.

Monitoringofcompliancewiththeapprovedriskpolicies,prudentiallimits,procedures,parametersetcand

Anyotherrisk/ALCOrelatedmatterthattheCommitteemayconsiderrelevantandappropriate

AnyothermatterthatmaybedelegatedbytheBoardfromtimetotime.

Meetings during the financial year

Duringthefinancialyear2017-18, fourmeetingsof theRiskManagementCommitteewereheldonJune20,2017,August08,2017,November17,2017andFebruary08,2018.ThecompositionoftheCommitteeandattendanceofthemembersattheCommitteemeetingsheldduringthefinancialyear2017-18aregivenbelow:

Name of Director Category Number of meetings attended /number of meetings held during the tenure of Directors

Mr. T.C Venkat Subramanian Non-ExecutiveDirector(ChairmanoftheCommittee)

4/4

Mr. T.V Rao, Member Independent Director 4/4Mr. Pradeep Madhav Managing Director & CEO 4/4Mr.S.KBehera Deputy Managing Director

(uptoMarch28,2018)4/4

11. MANAGEMENT AND EXECUTIVE COMMITTEES

TheBoardofDirectorshaveconstituted the followingCommitteesofSeniorExecutives tomanage itsbusinessand therelatedrisks.TheseCommitteesmeetregularlytodeliberateonmatterswhichhaveabearingontheCompany’soperationsandfunctionsasaforumtoelicitinputsfromdepartmentalheadsandalsokeepsdepartmentalheadsawareoftheseissues.

(i) ALCO & Risk Management Committee

ALCOandRiskManagementCommitteeisresponsiblefor(i)ensuringadherencetotheprudentiallimitsandguidelinessetbytheBoardofDirectorsandtheAuditCommittee/RiskManagementCommitteeoftheBoard(ii)formulatingRiskManagementPoliciesunderthesupervisionofAuditCommittee/RiskManagementCommitteeoftheBoardand (iii) attending to all issues related to Asset-Liability Management. It comprises of theManaging Director, DeputyManagingDirectorandseniorexecutivesasnominatedbyManagingDirectorfromtimetotime.

(ii) Credit Committee of Executives (CCE)

The Credit Committeeof Executives (CCE) considers and sanctions loanswithin the powers delegated to it by theBoard. For sanctioning creditproposals, theCreditCommitteeofExecutives (CCE)hasbeenconstitutedat2 levels viz.CCE-LevelI&CCE–Level2.CCE-level1comprisesoftheManagingDirector&CEO,DeputyManagingDirector,DGM(Credit)andAGM(legal)asitsmembers.CCE-level2comprisesofDeputyManagingDirector,DGM(Credit)andAGM(legal)asitsmembers.DGM(Risk)isaninviteetoCCE-level1andCCE-level2forgivinghisindependentviewsonthecreditproposalsfromtheriskperspective.

(iii) Investment Committee

InvestmentCommitteetakesinvestment/divestmentdecisionsandmanagesandsupervisesthelongterminvestmentportfolio in accordance with the prudential limits and long term investment guidelines approved by the Board. TheCommitteecomprisesof theManagingDirector&CEO,DeputyManagingDirector/GeneralManager,AssistantGeneralManagerandAssistantGeneralManager(Accounts)asitsmembers.

(iv) CSR Committee of Executives

The CSR Committee of Executives implements and monitors the CSR activities of the Company within the PolicyFrameworkundertheoverallsupervisionoftheCSRCommitteeoftheBoard.TheCommitteecomprisesofManagingDirector&CEO,DeputyManagingDirectorandseniorexecutivesnominatedbytheManagingDirector&CEO.

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(v) Grievances Redressal Committee

TheGrievancesRedressalCommitteereviewsthecomplaintsandgrievancesofstaffandthatofCustomers/clients. TheCommitteecomprisesoftheManagingDirector,DeputyManagingDirector/GeneralManagerandseniorexecutivesnominatedbytheManagingDirectorunderhisdelegatedpowers.

12. EXTRACT OF ANNUAL RETURN

TheextractofannualreturnintheprescribedformMGT-9asprovidedundersection92(3)ofoftheCompaniesAct,2013isannexedtothisReportasAnnexure I.

13. COMPANY’S POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION FOR DIRECTORS / KEY MANAGERIAL PERSONNEL / SENIOR MANAGEMENT PERSONNEL / OTHER EMPLOYEES

PursuanttoSection178oftheCompaniesAct,2013readwiththerulesframedthereunderandtheapplicableRBIGuidelinesoncorporategovernanceforNBFCs,theBoardDirectors,upontherecommendationoftheNomination,Remuneration&HRDCommittee,haveapprovedthepolicyonDirectors’AppointmentandRemunerationforDirectors/KeyManagerialPersonnel/SeniorManagementPersonnel/otheremployees.ThesaidpolicyhasbeenannexedtothisReportasAnnexure II.

14. PERFORMANCE EVALUATION OF THE BOARD, COMMITTEES AND DIRECTORS

Pursuant to theprovisionsof theCompaniesAct2013, theBoardofDirectors carriedoutannualevaluationof itsownperformance,theindividualDirectorsandtheworkingofallCommitteesoftheBoardbasedontheevaluationpolicyapprovedbytheBoardontherecommendationoftheNomination,Remuneration&HRDCommittee.SeparatefeedbackformswerepreparedandcirculatedforevaluationoftheBoardofDirectors,theNon-IndependentDirectors,theIndependentDirectorsandthevariousBoardCommitteesbasedonthebroadcriteria/parameterslaiddowninthepolicy.ThecriteriaforevaluatingtheperformanceoftheBoardincludedvariousaspectsofBoardfunctioningsuchascompositionoftheBoard,frequencyandattendanceatBoardmeetings,flowofinformationtotheBoard,Strategicguidance,mentoringthemanagementetc.ThecriteriaforevaluationofindividualDirectorscoveredparameterssuchasattendanceandparticipationatthemeetingsoftheBoardandCommitteesoftheBoard,independentopinion/judgmentindecisionmaking,implementationofgoodcorporategovernancepracticesetc.Thecriteria forevaluationofBoardCommitteescoveredareassuchasadequacyofcompositionofBoardCommittees,frequencyofcommitteemeetings,fulfillmentoftherole&responsibilitiesasdelegatedbytheBoardfromtimetotimeetc.

Asperthelaiddownevaluationprocess,theIndependentDirectorsattheirseparatemeetingheldduringtheyeardiscussedandratedtheirfeedbackontheevaluationoftheNon-IndependentDirectorsincludingtheManagingDirectorandtheBoardaswholeincludingthequality,quantityandtimelinessofflowofinformationtotheBoard.Onthesamelines,theBoardofDirectorsratedanddiscussedtheirfeedbackontheevaluationoftheIndependentDirectorsaswellastheCommitteesoftheBoard.Whilecarryingouttheperformanceevaluation,theBoardofDirectorsconsideredanddiscussedthefeedbackpresentedbytheIndependentDirectorsonevaluationofBoardasawholeandtheNon-IndependentDirectors.

15. PARTICULARS OF RELATED PARTY TRANSACTIONS

Alltransactionsenteredintowiththerelatedpartiesreferredtoundersection188(1)oftheCompaniesAct,2013duringthe year,were in theordinary courseof business andon arms lengthbasis. There arenomaterially significant relatedpartytransactionsmadebytheCompanywiththeDirectorsorKeyManagerialPersonnelorotherrelatedpartiesthatmayhaveapotentialconflictwiththeinterestoftheCompanyatlarge.AlltransactionswithrelatedpartiesundertheActareplacedbeforetheAuditCommitteeandtheBoardperiodically.AsrequiredbyRBICirculardatedNovember10,2014ontheRevisedRegulatoryFrameworkforNBFCs,theBoardofDirectorsbasedontherecommendationoftheAuditCommittee,havereviewedthePolicyonrelatedpartytransactionsbasedontheprovisionsoftheCompaniesAct,2013andtherulesframedthereunder.ThesaidpolicyonRelatedPartyTransactionsisannexedtothisReportasAnnexure III.TheparticularsofcontractsorarrangementsenteredintowithrelatedpartiesreferredtounderSection188(1)inFormAOC-2isannexedtothis Report as Annexure IV.

16. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186

PursuanttoSection186(11)oftheCompaniesAct,2013(theAct),loansmade,guaranteesgivenorsecuritiesprovidedintheordinarycourseofitsbusinessbyacompanyengagedinthebusinessoffinancingofcompanies/industrialenterprisesoranyacquisitionofsecuritiesmadebyaNonBankingFinancialCompanywhoseprincipalbusinessisacquisitionofsecuritiesareexemptfromtheprovisionsofsection186oftheAct.Therefore,disclosurerelatingtoloans,guaranteesandinvestmentsmadebytheCompanyarenotapplicable.

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17. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company has been contributing to the society through its CSR initiatives in the form of financial support to theunderprivileged,developmentofrural/underprivilegedareas,promotionofeducation,makingavailablefreeoraffordableMedical facilities etc. The Board of Directors have constituted a Corporate Social Responsibility (“CSR”) Committee toperformthescopeandfunctionsstipulatedunderSection135oftheCompaniesAct,2013(theAct)readwiththerulesframedthereunder.TheBoardofDirectors,ontherecommendationoftheCSRCommittee,haveadoptedadetailedpolicyonCorporateSocialResponsibilitybasedontheprovisionsoftheAct,specifyingtheCSRactivities/projects/programstobeundertakenbyCompany,themodalitiesofexecution,implementationandmonitoringprocessforthesame.Duringtheyearunderreview,theBoardofDirectors,ontherecommendationoftheCSRCommittee,approvedaCSRBudgetofRs.261.32LacsforFY2017-18basedon2%oftheaveragenetprofitsmadeduringthelast3financialyearshighlightingthefocusareasinwhichtheCSRactivities/projectswouldbeundertakenduringtheyearinpursuanceoftheCSRPolicy.InlinewithrequirementsoftheCompaniesAct,2013,theCompanyhasspenttheCSRBudgetofRs.261.32lacstowardsvariousCSRactivities/projectsduringFY2017-18.ThebriefoutlineoftheCSRPolicy,theCSRactivitiesundertakenbytheCompanyandtheamountspentontheCSRactivitiesduringthefinancialyear2017-18isgivenasapartofAnnualReportonCSRactivitiesintheformatprescribedundertheCompanies(CorporateSocialResponsibilityPolicy)Rules,2014,annexedtothisReportas Annexure V.

18. VIGIL MECHANISM

PursuanttotheprovisionsofSection177(9)oftheCompaniesAct,2013andtherulesframedthereunder,theCompanyhasestablishedavigilmechanism/WhistleBlowerPolicytoenabledirectorsandemployeesreportgenuineconcernsorgrievancesaboutunethicalorimproperbehaviour,actualorsuspectedfraudorbreachoftheCompany’scodeofconductorcompany’spoliciesandprocedures, lawor regulation.Thevigilmechanismprovides foradequatesafeguardsagainstvictimisationofdirectorsandemployeeswhousesuchmechanismandmakeprovisionfordirectaccesstotheChairpersonoftheAuditCommittee,inappropriateorexceptionalcases.TheAuditCommitteeoverseesthevigilmechanism.Thedetailsofthevigilmechanism/WhistleBlowerPolicyhavebeendisclosedonthewebsiteoftheCompanywww.stcionline.com

19. DISCLOSURE OF REMUNERATION AND OTHER RELATED DISCLOSURES

In termsof Section197(12)of theCompaniesAct, 2013 (theAct) readwithRule5(1)of theCompanies (AppointmentandRemunerationofManagerialPersonnel)Rules,2014, the ratioof the remunerationofeachdirector to themedianemployees’remunerationandsuchotherdetailsasprescribedisannexedtothisReportasAnnexure VI.

ThestatementcontainingparticularsofemployeesasrequiredunderSection197(12)oftheCompaniesAct,2013readwithrule5(2)oftheCompanies(AppointmentandRemunerationofManagerialPersonnel)Rules,2014asamendedfromtimetotimeisgiveninanannexureandformspartofthisreport.IntermsofSection136(1)oftheAct,theReportandtheAccountsarebeingsenttotheshareholdersexcludingtheaforesaidAnnexure.AnyshareholderinterestedinobtainingacopyoftheAnnexuremaywritetotheCompanySecretaryattheRegisteredOfficeoftheCompany.

20. AUDITORS

Statutory Auditors & their Report

M/sPrakashChandraJain&Co,CharteredAccountants,MumbaiwereappointedastheStatutoryAuditorsoftheCompanybytheComptroller&AuditorGeneralofIndia(C&AG)fortheyearendedMarch31,2018.

TheStatutoryAuditors’ReportontheStandaloneAccountsoftheCompanyfortheyearunderreviewdoesnotcontainanyqualification,reservationoradverseremarkordisclaimer.

Secretarial Auditors & their report

PursuanttotheprovisionsofSection204oftheCompaniesAct,2013andtheCompanies(AppointmentandRemunerationofManagerialPersonnel)Rules,2014,theBoardofDirectorsoftheCompanyappointedM/sNileshShah&Associates,afirmofCompanySecretariesinPracticetoundertaketheSecretarialAuditoftheCompanyforFY2017-18.Inaccordancewiththeprovisionsofsub-section(1)ofsection204,theSecretarialAuditReportfortheFinancialYear2017-18isappendedtothisReport as Annexure VII.

TheSecretarialAuditReportdoesnotcontainanyqualification,reservationoradverseremarkordisclaimer.

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Comments of C & AG

C&AGhaveconductedasupplementaryauditoftheCompany’sStandaloneandConsolidatedFinancialStatementsfortheyearendedMarch31,2018intermsofSection143(6)(b)oftheCompaniesAct,2013.CAGvideitsletterNo.GA/CA-I/STCIF/Accounts/2017-18/58datedJuly04,2018haveissueda“NilComment”reportonthestandaloneandconsolidatedfinancialstatementsstatingthatthereisnothingsignificantwhichwouldgiverisetoanycommentuponorsupplementtoStatutoryAuditors’Report.ThesaidreportofC&AGformspartofthisAnnualreport.

Internal & Concurrent Auditors

M/sMukundMChitale&Co.,CharteredAccountants,MumbaiwereappointedastheCompany’sInternal&ConcurrentAuditorsforthefinancialyear2017-18.Thescopeoftheirinternalauditincludedreviewofadequacyandeffectivenessoftheinternalcontrolsystems,verificationofcompliancewithpolicies,procedures,rules,guidelines,andtheapplicablelawsandregulations.TheInternalAuditisconductedatregularintervalsandtheInternalAuditReportsarereviewedbytheAuditCommitteeoftheBoardperiodically.

21. INSTANCES OF FRAUD, IF ANY REPORTED BY THE AUDITORS

TherehavebeennoinstancesoffraudreportedbytheAuditorsunderSection143(12)oftheCompaniesAct,2013.

22. PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars regarding Conservation of Energy and TechnologyAbsorption as required by the Companies (Accounts)Rules,2014arenotapplicableastheCompanydoesnotcarryoutanymanufacturingactivity.Therewerenoearningsandoutgoofforeignexchangeduringtheyearunderreview.YourCompanyusesInformationTechnologyextensivelyinitsdaytodayoperations.

23. PUBLIC DEPOSITS

Duringtheyearthefinancialyear2017-18,yourCompanyhasnotacceptedanydepositsfromthepublicwithinthemeaningoftheprovisionsoftheNon-BankingFinancialCompaniesAcceptanceofPublicDeposits(ReserveBank)Directions,1998orunderChapterVoftheCompaniesAct,2013.

24. FAIR PRACTICES CODE

YourCompanyhasadoptedthefairpracticescodeonthemodelprovidedbyRBIandthis isavailableontheCompany’swebsite.FairpracticecodeprovidesinformationtothecustomersandexplainshowtheCompanyisexpectedtodealwithcustomers on a day to day basis.

25. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY

Duringtheyearunderreview,therewerenosignificantand/ormaterialorderspassedagainsttheCompanybytheRegulatorsorCourtsorTribunalsimpactingthegoingconcernstatusoftheCompany.

26. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL), ACT, 2013

TheCompanyhasinplaceanappropriatePolicyforpreventionofSexualHarassmentofWomenatWorkplace.Duringtheperiodunderreview,nocomplaintshavebeenreportedunderthePreventionofSexualHarassmentofWomenatWorkplace(Prevention,ProhibitionandRedressal)Act,2013.

27. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 134 (5) of the Companies Act, 2013,with respect toDirectors’ ResponsibilityStatement,theDirectorsherebyconfirmthat:

(i) inthepreparationoftheannualaccounts,theapplicableaccountingstandardshadbeenfollowedalongwithproperexplanationrelatingtomaterialdepartures;

(ii) theDirectorshaveselectedsuchaccountingpoliciesandappliedthemconsistentlyandmadejudgmentsandestimatesthatarereasonableandprudentsoastogiveatrueandfairviewofthestateofaffairsofthecompanyattheendofthefinancialyearandoftheprofitandlossofthecompanyforthatperiod;

DIRECTORS’ REPORT



24 25

(iii) theDirectorshavetakenproperandsufficientcareforthemaintenanceofadequateaccountingrecordsinaccordancewiththeprovisionsofthisActforsafeguardingtheassetsofthecompanyandforpreventinganddetectingfraudandotherirregularities;

(iv) theDirectorshavepreparedtheannualaccountsonagoingconcernbasis;

(v) theDirectorshavelaiddowninternalfinancialcontrolstobefollowedbythecompanyandthatsuchinternalfinancialcontrolsareadequateandwereoperatingeffectively;and

(vi) theDirectorshavedevisedpropersystemstoensurecompliancewiththeprovisionsofallapplicablelawsandthatsuchsystemswereadequateandoperatingeffectively.

28. ANNEXURES FORMING PART OF THIS REPORT OF DIRECTORS

TheannexuresreferredtointhisReportandtheinformationrequiredtobeareannexedherewithandformapartofthisReportoftheDirectors.

(i) ExtractofAnnualReturninFormMGT-9-Annexure I.

(ii) Policy on Directors appointment and remuneration for Directors/ KMP/senior management personnel / otheremployees-Annexure II

(iii) PolicyonRelatedpartytransactions-Annexure III

(iv)RelatedpartytransactionsunderSection188(1)inFormAOC-2-Annexure IV

(v) AnnualreportonCSRactivities-Annexure V

(vi) RatioofremunerationtomedianemployeesremunerationasperSection197(12)ofCompaniesAct,2013readwithRule5(1)ofCompanies(AppointmentandRemunerationofManagerialPersonnel)Rules,2014-Annexure VI

(vii)SecretarialAuditReportforfinancialyear2017-18-Annexure VII

29. CAUTIONARY STATEMENT

StatementsinthisDirectors’ReportdescribingtheCompany’sobjectives,projections,estimates,outlook,expectationsorpredictionsmaybe“forward-lookingstatements”.Actualresultscoulddiffermateriallyfromthoseexpressedor implied.ImportantfactorsthatcouldmakeadifferencetotheCompany’soperationsincludedemandandpricingintheCompany’sprincipal markets, changes in Government regulations, tax regimes, economic developments within India and otherincidentalfactors.

30. ACKNOWLEDGEMENT

YourDirectorswouldliketoexpresstheirsincereappreciationoftheco-operationandassistancereceivedfromshareholders,bankers,regulatorybodiesandotherbusinessconstituentsduringtheyearunderreview.

YourDirectorsalsowishtoplaceonrecordtheirappreciationforthecommitmentdisplayedbyalltheexecutives,officersandstaff,intheperformanceoftheCompanyduringtheyear.

For and on behalf of the Board of Directors

Pradeep Madhav T. C. Venkat Subramanian

July 25, 2018 Managing Director & CEO Director

Mumbai (DIN 0267422) (DIN 00040526)

DIRECTORS’ REPORT



24 25

FORM NO. MGT-9

EXTRACT OF ANNUAL RETURN

as on the financial year ended on March 31, 2018

[Pursuanttosection92(3)oftheCompaniesAct,2013andrule12(1)oftheCompanies

(ManagementandAdministration)Rules,2014]

I. REGISTRATION AND OTHER DETAILS:

i) CIN U51900MH1994PLC078303

ii) RegistrationDate 10/05/1994

iii) NameoftheCompany STCI Finance Limited

iv) Category/Sub-CategoryoftheCompany PublicCompanylimitedbyshares/NBFC

v) AddressoftheRegisteredofficeandcontactdetails A/B1-802,A-Wing,8THFloor,MarathonInnova,MarathonNextgen Compound,Off.GanpatraoKadamMarg, LowerParel,Mumbai-400013.Tel:+91-22-61425115/100Fax:+91-2224991092E-mailid:[email protected].

vi) Whetherlistedcompany Yes.TheCompanyisalistedcompanywithinthemeaningof Section 2(52) of the Companies Act, 2013 as the Non-Convertible Debentures of the Company issued onprivateplacementbasisare listedonthewholesaledebtmarketsegmentofNSE.

vii) Name, Address and Contact details of Registrar andTransferAgent,ifany.

LinkIntimeIndiaPvtLtdC101,247Park,LBSMarg,VikhroliWest,Mumbai400083TelNo:+912249186000Fax:+912249186060.E-mailid:[email protected]

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

Allthebusinessactivitiescontributing10%ormoreofthetotalturnoverofthecompany:

Sr. No.

Name and Description of main products / services NIC Code of the Product/service

% to total turnover of the company

1 LendingActivity 64920-Othercreditgranting 95.27%%

ANNEXURE I TO THE DIRECTORS REPORT



26 27

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

Sr. No.

Name and Address of the Company CIN / GLN Holding/ Subsidiary/ Associate

% of Shares Held

Applicable Section

1 STCIPrimaryDealerLimitedA/B1-801,A-Wing,MarathonInnova,MarathonNextgenCompound,Off.GanpatraoKadamMarg,LowerParel,Mumbai-400013.

U67110MH2006PLC165306 Subsidiary 100% 2(87)

2 STCICommoditiesLimitedA/B1-802,A-Wing,MarathonInnova,MarathonNextgenCompound,Off.GanpatraoKadamMarg,LowerParel,Mumbai-400013.

U67120MH2004PLC148711 Subsidiary 100% 2(87)

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

i) Category-wise Share Holding

Category of Shareholders No. of Shares held at the beginning of the year

No. of Shares held at the end of the year

% Changeduring

the year

Demat Physical Total % of Total

Shares


Shares

A. Promoter s

(1) Indian

a) Individual/HUF - - - - - - - - -

b) CentralGovt. - - - - - - - - -

c) StateGovt.(s) - - - - - - - - -

d) BodiesCorp. - - - - - - - - -

e) Banks/FI - - - - - - - - -

f) Any other - - - - - - - - -

Sub-total (A) (1): - - - - - - - - -

(2) Foreign

a) NRI’s-Individuals - - - - - - - - -

b) Other-Individuals - - - - - - - - -

c) BodiesCorp. - - - - - - - - -

d) Banks/FI - - - - - - - - -

e) Any Other - - - - - - - - -

Sub-total (A) (2): - - - - - - - - -

DIRECTORS’ REPORT



26 27



% Changeduring

the year


Shares


Shares

Total Shareholding Promoter (A) = (A)(1) + (A)(2)

- - - - - - - - -

B. Public Shareholding

1. Institutions

a) MutualFunds - - - - - - - - -

b) Banks/FI 34907662 - 34907662 91.86 34260715 34260715 90.16 (1.70)

c) CentralGovt. - - - - - - - - -

d) StateGovt.(s) - - - - - - - -

e) VentureCapitalFunds - - - - - - - - -

f) Insurance Companies 2516250 - 2516250 6.62 3163197 3163197 8.32 1.70

g) FIIs - - - - - - - -

g) ForeignVentureCapitalFunds

- - - - - - - -

i) Others(specify) 576088 - 576088 1.52 576088 576088 1.52 -

Sub-total (B)(1): 38000000 - 38000000 100 38000000 38000000 100 -

2. Non-Institutions - - - - - - - - -

a) BodiesCorp. - - - - - - - - -

i)Indian - - - - - - - - -

ii)Overseas - - - - - - - - -

b) Individuals - - - - - - - - -

i)Individual - - - - - - - - -

shareholders - - - - - - - - -

holdingnominal - - - - - - - - -

sharecapital - - - - - - - - -

upto `1lakh - - - - - - - - -

ii)Individual - - - - - - - - -

shareholders - - - - - - - - -

holdingnominal - - - - - - - - -

sharecapital inexcessof` 1lac

- - - - - - - - -

c) Others(specify) - - - - - - - - -

Sub-total (B)(2): 38000000 - 38000000 100 38000000 - 38000000 100 -

Total Public Shareholding (B) = (B)(1)+ (B)(2)

38000000 - 38000000 100 38000000 - 38000000 100 -

C. Shares held by Custodian for GDRs & ADRs

- - - - - - - - -

Grand Total (A+B+C) 38000000 - 38000000 100 38000000 - 38000000 100 -

ANNEXURE I TO THE DIRECTORS REPORT



28 29

ii) Shareholding of Promoter-

Sr. No.

Shareholder’s Name

Shareholding at the beginning of the year

Share holding at the end of the year % change in share holding

during the year

No. of Shares

% of total Shares of the

company

%of Shares Pledged /

encumbered to total shares

No. of Shares


company

%of Shares Pledged /


1 - - - - - - - -

2 - - - - - - - -

3 - - - - - - - -

4 - - - - - - - -

Total - - - - - - -

iii) Change in Promoters’ Shareholding (please specify, if there is no change)

Sr. No.

Shareholder’s Name Shareholding at the beginning of the year

Cumulative Shareholding during the Year

No. of Shares % of total Shares of the

company


company

1 Atthebeginningoftheyear - - - -

2 Date wise Increase / Decrease in PromotersShareholdingduringtheyearspecifyingthereasons:

- - - -

3 Attheendoftheyear - - - -

iv) Shareholding Pattern of top ten Shareholders:

(otherthanDirectors,PromotersandHoldersofGDRsandADRs):

Sr.No.

For Each of the Top 10 Shareholders




company


company1. Bank of India

Atthebeginningoftheyear 11383781 29.96 11383781 29.96Date wise increase/ decrease in share-holdingduringtheyearalongwithreasons

No change during the year

Attheendoftheyear 11383781 29.96 11383781 29.96



28 29

Sr.No.





company


company2. State Bank of India

Atthebeginningoftheyear 2812415 7.40Date wise increase/ decrease in share-holdingduringtheyearalongwithreasons

Increase- transfer of followingshares to State Bank of India on7/04/2017:- Transfer of 248519 shares

fromStateBankofTravancore

- Transfer of 223896 sharesfromStateBankofBikaner&Jaipur

- Transfer of 268052 sharesfromStateBankofHyderabad

- Transfer of 200616 sharesfromStateBankofPatiala

- Transfer of 167644 sharesfromStateBankofMysore

Reason :Mergerof StateBankofTravancore, StateBankofBikaner&Jaipur,StateBankofHyderabadand State Bank of Mysore withStateBankofIndia:

3921142 10.32

Attheendoftheyear 3921142 10.323. IDFC Bank Limited



Attheendoftheyear 3530136 9.29 3530136 9.294. IDBI Bank Ltd



Attheendoftheyear 2507610 6.60 2507610 6.605. Punjab National bank






30 31

Sr.No.





company


company6. Life Insurance Corporation of India

Atthebeginningoftheyear 1505400 3.96Date wise increase/ decrease in share-holdingduringtheyearalongwithreasons

Increase - purchase of 646947shares from Dena Bank on29/09/2017

2152347 5.66

Attheendoftheyear 2152347 5.667. Canara Bank


Decrease–Transferof1426298sharestoCanaraBanksecuritiesLtdon7/04/2017Increase–Transferof1426298sharesfromCanaraBank securitieson14/04/2017

Attheendoftheyear 1426298 3.758. ICICI Bank Ltd



Attheendoftheyear 1400528 3.69 1400528 3.699. Bank of Baroda



Attheendoftheyear 1253544 3.30 1253544 3.3010. Central Bank of India




v) Shareholding of Directors and Key Managerial Personnel:

Sr. No.

Form each of Directors and KMP Shareholding at the beginning of the year



company


company

1 Atthebeginningoftheyear

NoneoftheDirectorsandKeyManagerialPersonnelhold any shares in the Company.

Date wise increase/ decrease in share-holdingduringtheyearalongwith reasons

Attheendoftheyear



30 31

V) INDEBTEDNESS

IndebtednessoftheCompanyincludinginterestoutstanding/accruedbutnotdueforpayment

(`InLakhs)

Secured Loans excluding deposits

Unsecured Loans

Deposits Total Indebtedness

Indebtedness at the beginning of the financial year

i) PrincipalAmount 116200.00 134780.02 - 250980.02ii) Interest due but not paid - - - -iii) Interest accrued but not due 4521.07 10.67 - 4531.74

Total (i+ii+iii) 120721.07 134790.69 - 255511.76Change in Indebtedness during the financial yeari) Addition(Bankloans) 21000.00 - - 21000.00ii) Reduction (14424.94) (5155.28) - (19580.22)Net Change 6575.06 (5155.28) - 1419.78Indebtedness at the end of the financial year -i) PrincipalAmount 122666.00 129635.40 - 252301.40ii) Interest due but not paid - - - -iii) Interest accrued but not due 4630.13 0.01 - 4630.14

Total (i+ii+iii) 127296.13 129635.41 - 256931.54

VI. REMUNERATION TO MANAGING DIRECTOR, WHOLE-TIME DIRECTORS AND/OR MANAGER

Sr. No.

Particulars of Remuneration Name of MD/WTD/ Manager

Mr. Pradeep MadhavManaging Director

& CEO

Mr.S.K Behera, Deputy Managing Director(from 4.05.2016 to

28.03.2018)

Total Amount

1 Grosssalary(a) Salaryasperprovisionscontainedin

section17(1)oftheIncome-taxAct,1961

87.52 55.42 142.94

(b) Valueofperquisitesu/s17(2)Income-taxAct,1961

0.32 1.10 1.42

(c) Profitsinlieuofsalaryundersection17(3)Income-taxAct,1961

0.00 0.00 0.00

2 StockOption3 SweatEquity4 Commission

- as%ofprofit- others,specify…

5 Others,pleasespecify 3.82 2.18 6.00Total (A) 91.66 58.70 150.36#CeilingaspertheAct 1073.68

# In terms of Section 197 and Schedule V of the Act, the remuneration payable to more than one Managing Director or Whole time Director or Manager shall not exceed 10% of the net profits of the Company for all such directors taken together.



32 33

B. Remuneration to other directors

(`InLakhs)

Sr. No.

Particulars of Remuneration Name of DirectorsTotal

Amount

1 Independent Directors Mr. K.Narasimha

Murthy

Mr. S.Ravi Mr. T.V Rao Mrs. Thankom T.Mathew

(a) Feeforattendingboard/committeemeetings

2.60 3.10 6.00 3.30 15.00

(b) Commission - - -

(c) Others,pleasespecify - - -

Total(1) 2.60 3.10 6.00 3.30 15.00

2 OtherNon-ExecutiveDirectors Mr.MelwynO. Rego

Mr. T.C Venkat Subramanian

(a) Feeforattendingboardcommitteemeetings

Nil 5.30 5.30

(b) Commission - - - - -

(c) Others,pleasespecify - - - - -

Total(2) 5.30

Total(B)=(1+2)

TotalManagerial

Remuneration(A)+(B)

20.30

170.66

OverallCeilingaspertheAct- For (A) –Remuneration payable toMD/WholetimeDirectoralltakentogether

- For (B)- Remuneration payable tootherDirectorsbywayofsittingfeesforattendingeachmeetingofBoardorCommittee

1073.68(10%ofnetprofitsofthe

Company)

Rs.1lakhforeach

meetingofBoardor

Committeethereofattendedby each director

C. Remuneration to Key Managerial Personnel Other Than MD / Manager / WTD

(`InLakhs)

Sr. No.

Particulars of RemunerationKey Managerial Personnel

CS CFO Total

1 Grosssalary

(a) Salaryasperprovisionscon-tainedinsection17(1)oftheIncome-taxAct,1961

29.95 35.46 65.41

(b)

Valueofperquisitesu/s17(2)Income-taxAct,1961

1.00 0.69 1.69



32 33

Sr. No.

Particulars of RemunerationKey Managerial Personnel

CS CFO Total


2 StockOption

3 SweatEquity

4 Commission

- as%ofprofit

- Others,specify……

5 Others,pleasespecify

(ContributiontoProvidentFund) 1.23 1.41 2.64

Total 32.18 37.56 69.74

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

Type Section of the Companies Act

Brief Description Details of Penalty / Punishment/ Compounding fees imposed

Authority [RD / NCLT/

COURT]

Appeal made, if any (give

Details)

A. COMPANY

Penalty

Punishment - - - - -

Compounding - - - - -

B. DIRECTORS

Penalty



C. OTHER OFFICERS IN DEFAULT

Penalty






Mumbai (DIN 0267422) (DIN 00040526)



34 35

ANNEXURE II TO THE DIRECTORS’ REPORT

COMPANY’S POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION FOR DIRECTORS/KEY MANAGERIAL PERSONNEL/ SENIOR MANAGEMENT PERSONNEL/OTHER EMPLOYEES

I. Policy relating to the Appointment criteria & Qualifications for Directors

a) TheCommitteeshallconsidertheethicalstandardsofintegrityandprobity,qualification,expertise,trackrecord,skillsets andexperienceofthepersonforappointmentasDirectorandaccordinglyrecommendtotheBoardhis/herappointment.

b) ThepersontobeappointedasDirectorshallnotbedisqualifiedundertheCompaniesAct,2013andrulesmadethereunder,RBIguidelinesasapplicabletoNBFCsoranyotherenactmentforthetimebeinginforce.

c) The‘fitandproper’criteriashallbeascertainedfortheproposed/existingdirectorsatthetimeoftheirappointment/renewaloftheirappointmentaspertheapplicableRBIguidelinesforNBFCsorotherenactment/regulationsinforcebasedupontheinformationprovidedinrequisitedeclarationsobtainedfromtheproposed/existingDirectorsundertheapplicableRBIGuidelinesorotherapplicableenactment/regulations.Asapartofduediligencefordeterminingthesuitabilityofapersonforappointment/tocontinuetoholdofficeofDirector,theCommitteeshall:

(i) Obtaindeclarationandundertakingfromtheproposed/existingDirectorsatthetimeofappointment/renewalofappointmentintheformatprescribedbyRBI.

(ii) Decide on the acceptance or otherwise of the Directors based on the information provided in the signeddeclarations.

(iii) EnsurethataDeedofCovenanthavebeenexecutedbythenominated/electeddirectorsintheformatprescribedbyRBI.

(iv) EnsurethattheCompanyobtainsannuallyonMarch31asimpledeclarationfromtheexistingDirector(s)thattheinformationprovidedhasnotundergoneanychangeandwherethereisachangetherequisitedetailsarefurnishedbythemforthwith.

d) IncasethepersonconsideredforappointmentisanIndependentDirector,itshouldbeensuredthathe/shepossessthequalificationsstipulatedforIndependentDirectorsundertheCompaniesAct2013andrulesframedthereunder(asamendedfromtimetotime).

e) The appointmentof aDirector/IndependentDirector/ManagingDirector/Whole-timeDirector shall be subject totheprovisionsof theCompaniesAct, 2013and the rulesmade thereunderor anyother applicableenactmentorregulations.

f) TheTerm/TenureforDirectorsshallbesubjecttotheprovisionsoftheCompaniesAct,2013andrulesmadethereunderasamendedfromtimetotimeoranyotherapplicableenactment/Regulations.

II. Policy relating to Remuneration of Directors, Key Managerial Personnel (KMP), Senior Management and other employees

i. General

While determining the Remuneration payable to the Directors, KeyManagerial Personnel, SeniorManagementPersonnelandotheremployees,theCommitteeshallbeguidedbythefollowingsetofprinciplesandobjectivesmoreparticularlydescribedunderSection178oftheCompaniesAct,2013:

a) The level and compositionof remuneration shall be reasonable and sufficient to attract, retain andmotivatedirectorsofthequalityrequiredtorunthecompanysuccessfully.

b) Therelationshipofremunerationtoperformanceshouldbeclearandmeetappropriateperformancebenchmarks.

c) Theremunerationtodirectors,seniormanagementPersonnelandKeyManagerialPersonnelshouldalsoinvolveabalancebetweenfixedandincentivepayreflectingshortandlong-termperformanceobjectivesappropriatetotheworkingofthecompanyanditsgoals:

Indeterminingtheremuneration,dueconsiderationshallbegiventosuchfactorsastheCommitteedeemsappropriateincludingbutnotlimitedtotheIndividualpersonsduties&responsibilities,levelofskill,knowledge,experienceandperformance,coreperformancerequirements,markettrend,costofliving,industrypracticeandtheprevailinglawsandRegulations.



34 35

ii. Remuneration structure

TheremunerationtotheManagingDirector(MD),KeyManagerialPersonnel(KMP),SeniorManagementPersonalandotheremployeesshallcompriseoffixedpayandperformancelinkedvariablepay(PLVP).PLVPisbasedontheIndividualperformanceandCompany’sperformanceasperthePLVPpolicyapprovedbytheBoardfromtimetotime.

iii. Remuneration to Managing Director/Whole time Director

a) TheremunerationtobepaidtotheManagingDirector/WholeTimeDirectors(WTD)shallbedeterminedbytheCommittee inaccordancewith thepercentage/ slabs / conditions laiddownunder theprovisionsof theCompaniesAct,2013andtherulesframedthereunderoranyotherenactmentforthetimebeinginforce.

b) The remuneration of Managing Director/ Whole Time Director as determined by the Committee shall berecommendedtotheBoardforapproval.Theremunerationshallalsobesubjecttoapprovaloftheshareholdersandwhereapplicable,theCentralGovernmentapprovalaspertheprovisionsoftheCompaniesAct,2013.

iv. Remuneration to the Non-Executive & Independent Directors

TheNon-ExecutiveandIndependentDirectorsshallbepaidsittingfeesforattendingBoard/Committeemeetingsapartfrom reimbursementofexpenses incurred for attending themeetings. Theamountof sitting feespayable toNon-ExecutiveandIndependentDirectorsshallbedeterminedbytheBoardfromtimetotimesubjecttoceiling/limitsasprovidedunderCompaniesAct,2013readwiththerulesmadethereunder,asamendedfromtimetotime.

v. Remuneration to Senior management Personnel, KMPs (other than MD, WTD) and other employees

The remuneration to Senior Management Personnel, KMPs (other thanMD,WTD), and other employees will bedeterminedbasedontheexperience,expertise,qualificationandskillsaspertheCompany’sHRPolicyManualamendedfromtimetotime.

vi. Increments

(a) Increments/revisionofremunerationofManagingDirector/WholetimeDirectorshallbesubjecttotheconditionsandtheapplicableprovisionsoftheCompaniesAct,2013.

(b) Annual Increments in the existing remuneration structure in relation to KMPs (Other thanMD/WTD), seniormanagementpersonnelandotheremployeesoftheCompanyasrecommendedbytheManagingDirectorwillbescrutinizedbytheCommitteebasedontheperformanceratings,marketconditionsandotherrelevantfactorsandrecommendedtotheBoardforapproval.




Mumbai (DIN 0267422) (DIN 00040526)



36 37

ANNEXURE III TO THE DIRECTORS’ REPORT


RELATED PARTY TRANSACTION POLICY

1. Preamble

TheBoardofDirectors(the“Board”)ofSTCIFinanceLimited(“theCompany”),hasadoptedthefollowingpolicyonRelatedPartyTransactionsasdefinedbelowbasedon the recommendationof theAuditCommitteepursuant to theprovisionsof Companies Act, 2013 (the Act) and the rules framed there under, as amended from time to time. The Board onrecommendationoftheAuditCommitteemayreviewandamendthispolicyfromtimetotime.ThispolicyappliestothetransactionsbetweentheCompanyanditsrelatedparties.

2. Purpose

Thispolicyhasbeenframedasrequiredunder‘RevisedRegulatoryFrameworkforNBFC’issuedbyReserveBankofIndiavide itscircularno.RBI/2014-15/299DNBS(PD)CC.No.002/03.10.001/2014-15onNovember10,2014.TheCompany isrequiredtodisclosethepolicyondealingwithRelatedPartyTransactionsonitswebsiteandintheAnnualReport,witheffectfromMarch31,2015.

ThePolicyintendstoprovideaframeworktoidentifyrelatedparties,approve,monitor,regulateandreporttransactionsbetweentheCompanyanditsRelatedPartiesbasedontheprovisionsoftheCompaniesAct,2013(theAct).

3. Definitions

(i) “Audit Committee or Committee” meansCommitteeofBoardofDirectorsoftheCompanyconstitutedunderprovisionsoftheAct.

(ii) “Board” meansBoardofDirectorsoftheCompany

(iii) Related Party Transaction” or “RPT” meansthefollowingtransactions/contracts/arrangementswithrelatedpartiesasgivenunderclause(a)to(g)subsection(1)ofsection188oftheAct:

(a) sale,purchaseorsupplyofanygoodsormaterials;

(b) sellingorotherwisedisposingof,orbuying,propertyofanykind;

(c) leasingofpropertyofanykind;

(d) availingorrenderingofanyservices;

(e) appointmentofanyagentforpurchaseorsaleofgoods,materials,servicesorpropertyetc.

(f) such related party’s appointment to any office or place of profit in the Company, its subsidiary company orassociatecompany;and

(g) underwritingthesubscriptionofanysecuritiesorderivativesthereof,oftheCompany.

(iv) “Material Related party Transactions” meanrelatedpartytransaction/transactionstobeenteredintoindividuallyorwhichtakentogetherwithprevioustransactionsduringafinancialyear,exceedtheprescribedmonetarylimitgivenunderRule15oftheCompanies(MeetingsofBoardanditsPowers)Rules,2014:

(v) “Related Party” meansrelatedpartyunderSection2(76)oftheActasprovidedbelow:

(a) Adirectororhisrelative

(b) KeyManagerialPersonnelorhis/herrelative

(c) Afirm,inwhichadirector,managerorhisrelativeisapartner

(d) Aprivatecompanyinwhichadirectorormanagerorhisrelativesisamemberordirector

(e) Apubliccompanyinwhichadirectorormanagerisadirectorandholdsalongwithhisrelatives,morethan2%ofitspaid-upsharecapital

(f) Abodycorporatewhoseboard,managingdirectorormanagerisaccustomedtoactinaccordancewiththeadvice,directionsorinstructionsofadirectorormanager,exceptsuchadviceisgiveninaprofessionalcapacity.



36 37

(g) Anypersononwhoseadvice,directionsorinstructionsadirectorormanagerisaccustomedtoact,exceptsuchadviceisgiveninaprofessionalcapacity

(h) Anycompanywhichis:

-AHolding,SubsidiaryoranAssociatecompanyofsuchcompanyor

-ASubsidiaryofaHoldingcompanytowhichitisalsoaSubsidiary

(i) ADirector, other than an IndependentDirector, or KeyManagerial Personnel of the holding company or hisrelativewithreferencetoacompany,shallbedeemedtobeaRelatedParty.

(vi) “Relative” As provided under Section 2(77) of the Companies Act, 2013 and the rules there under, relative withreferencetoanyperson,meansanyonewhoisrelatedtoanother,if-

(a) theyaremembersofaHinduUndividedFamily;

(b) theyarehusbandandwife;or

(c) onepersonisrelatedtotheotherpersonas-

(i) Father(includingstep-father)

(ii) Mother(includingstep-mother)

(iii) Son(includingstep-son)

(iv) Son’swife

(v) Daughter

(vi) Daughter’shusband

(vii) Brother(includingstep-brother)

(viii) Sister(includingstep-sister).

(vii) “Key Managerial Personnel”meanskeymanagerialpersonnelasdefinedunderSection2(51)oftheCompaniesAct,2013andincludes(i)ManagingDirector(ii)awholetimedirector(iii)ChiefExecutiveOfficer(iii)CompanySecretary;and(iv)ChiefFinancialOfficerand(iv)suchotherofficerprescribedundertheAct.

(viii)‘Associate Company” -AsperSection2(6)ofthecompaniesAct,2013,associatecompanyinrelationtoaCompanymeansacompanyinwhichthatothercompanyhasasignificantinfluence,butwhichisnotasubsidiarycompanyofthecompanyhavingsuchinfluenceandincludesajointventurecompany.

Explanation:Forthepurposesofthisclause,“significantinfluence”meanscontrolofatleast20%ofthetotalsharecapital,orofbusinessdecisionsunderanagreement.

(ix) “Arms length transactions”meanstransactionbetweentworelatedpartiesthatisconductedasiftheywereunrelated,sothatthereisnoconflictofinterest.

(x) Ordinary Course of business:Alltransactionsoractivitiesthatarenecessary,normalandincidentaltothebusinessoftheCompanyaspermittedbytheObjectClauseintheMemorandumofAssociationoftheCompanyortransactionsthatareconsideredwhilecomputingthebusinessincome/revenue/turnoveroftheCompanyasopposedto“incomefromothersourcesshallbedeemedtobeintheordinarycourseofbusiness.Thesemayalsobecommonpracticesandcustomsofcommercialtransactions.

(xi) Office or place of profitmeansanyofficeorplaceofprofit:

(a) isheldbya director,ifthedirectorholdingitreceivesfromthecompanyanythingbywayofremuneration,overandabovetheremunerationtowhichheisentitledasdirector,bywayofsalary,fee,commission,perquisites,anyrent-freeaccommodation,orotherwise;

(b) isheldbyan individualotherthanadirectororbyanyfirm,privatecompanyorotherbodycorporate, iftheindividual,firm,privatecompanyorbodycorporateholding it receivesfromthecompanyanythingbywayofremuneration,salary,fee,commission,perquisites,anyrent-freeaccommodation,orotherwise.

(xii) “Policy” meansthisRelatedTransactionPolicy



38 39

4. Policy

All Transactions with related parties including any subsequent modifications thereto must be reported to the AuditCommitteeandapprovedorreferredforapprovalbytheCommitteeinpursuanceofthispolicyaspertheprovisionsoftheCompaniesAct,2013asamendedfromtimetotime.

4.1 Identification of Related Parties:

EverydirectorandkeymanagerialpersonnelshallatthebeginningofeveryfinancialyeardisclosetotheCompanySecretary(CS)theirrelatedpartiesundersection2(76)oftheActreadwiththerulesframedthereunder,asamendedfromtimetotimeanddiscloseanychangestheretoduringthefinancialyearasimmediatelyaspracticable.Basedonthedisclosures,thelistofrelatedpartieswillbeidentifiedandupdatedfromtimetotime.

4.2 Identification of related Party Transactions:

IncaseofanyproposedtransactionorarrangementwithaRelatedParty,theconcernedfunctionalDepartmentintheCompanyshallfurnishtotheCSfunction,relevantdetailsoftheproposedtransactionwhichshallincludethenameoftherelatedparty;natureofrelationship;natureofcontract,durationandparticularsofthecontract/arrangement/transaction;reasonforenteringintothetransaction,mannerofdeterminingpriceandothercommercialterms,thedraftcontract/agreementandothersupportingdocuments.TheCompanyshallbasedonthedetailsoftransactiondeterminewhetherthetransactiondoes,infact,constituteaRelatedPartyTransactionrequiringcompliancewiththispolicy.

4.3 Approvals/ process for related party transactions

(i) Audit Committee review / approval:

All related party transactions / arrangements or any modifications thereof, will be referred to the AuditCommitteeforreviewandapprovalwiththedetailsofrelatedparty,natureoftransaction,reasonforundertakingthe transaction, particulars of the contract/ arrangement, pricing terms,whether on arms length and in theordinarycourseofbusinessandotherrelevantinformation.AnymemberoftheCommitteewhohasapotentialinterestinanyreportedRelatedPartyTransactionshallabstainfromdiscussionandvotingontheapprovaloftheRelatedPartyTransaction.TheAuditCommittee,ontherecommendationofthemanagement,mayapprovethetransactionswithrelatedpartiesinaccordancewithprovisionsoftheCompaniesActreadwiththeRulesmadethereunder(asamendedfromtimetotime).

TheAuditCommitteemaygrantomnibusapprovaltothetransactionsproposedtobeenteredintowithrelatedpartiessubjecttothefollowingguidelines.

(a) TheAuditCommitteeshallconsiderthefollowingfactors/criteriawhilegrantingomnibusapprovalwhichinclude:

S.No Particulars Criteria1 Repetitiveness of the transaction (in past or

future)More than once

2. Justificationfortheneedofomnibusapproval Repetitivenatureofthetransaction,InterestofthecompanyandAdministrativeconvenience.

3. maximumvalueof transactions, in aggregate,whichcanbeallowedundertheomnibusroutein a year

As determined byAudit Committee fromtimetotime

4. maximum value per transaction which can beallowed

As determined byAudit Committee fromtimetotime

5. Disclosurestobemadeatthetimeofseekingofomnibusapprovals

Name of related party, nature and briefparticulars of transaction, maximum amountof the transaction, indicative pricing, otherinformationrelevanttoAuditCommittee

5 Periodic Review of Related Party Transactionentered into by the company pursuant to each omnibusapprovalmade

AtleasthalfyearlyintervalsorasdeterminedbyAuditCommitteefromtimetotime

6 Transactions which cannot be subject to theomnibusapprovalbytheAuditCommittee.

Transactionsinrespectofsellingordisposingoftheundertakingofthecompany



38 39

(b) WheretheneedforRelatedPartyTransactioncannotbeforeseenandaforesaiddetailsarenotavailable,AuditcommitteemaygrantomnibusapprovalsubjecttotheirvaluenotexceedingRs.1crorepertransaction

(c) Omnibusapprovalshallbevalidforaperiodnotexceedingonefinancialyearandshallrequirefreshapprovalafterexpiryofthefinancialyear.

(d) A related party transaction entered into by the Company,which is not under the omnibus approval orotherwisepre-approvedbytheCommittee,willbeplacedbeforetheCommitteeforratification.

(ii) Board Approval

RelatedPartyTransactionsasdefinedunderSection188oftheActwhicharenotinordinarycourseofbusinessand/ornotonarmslengthbasisoranysubsequentmodificationthereto,shallbeplacedbeforetheBoardforitsapproval.WhereanydirectorisinterestedinanytransactionorcontractorarrangementwithaRelatedParty,suchdirectorshallabstainhimselffromdiscussionandvotingontheapprovaloftherelatedpartytransaction.TheBoardmayapproveallRelatedPartyTransactionswhicharenotatarm’slengthand/orwhicharenotintheordinarycourseofbusinessinaccordancewithprovisionsoftheCompaniesActreadwiththeRulesmadethereunder(asamendedfromtimetotime).

Inadditiontotheabove,contracts/arrangements/transactionswhichareintheordinarycourseofbusinessandatarmslengthanddonotrequireapprovaloftheBoardunderSection188oftheActmayalsobereferredbytheAuditCommitteetotheBoardforitsreviewasamatterofabundantcaution.

(iii) Approval of the Shareholders

ThefollowingMaterialRelatedpartytransactionswhichexceedthemonetarylimitprescribedunderRule15oftheCompanies(MeetingsofBoardanditsPowers)Rules,2014(givenbelow)andwhichareeithernotonarmslengthand/orarenotintheordinarycourseofbusiness,shallonrecommendationoftheBoardbeplacedbeforetheshareholdersforitspriorapprovalinaccordancewiththeprovisionsoftheActandtheRelatedPartiesshallabstainfromvotingonsuchresolutions:

S.No Prescribed Related Party Transaction Monetary limit1 Sale,purchaseorsupplyofanygoodsormaterials

directlyorthroughappointmentofagentsExceeding ten percent of the annual turnover ofthe Company or `100crore,whicheverislower

2. selling or otherwise disposing of, or buying,property of any kind directly or throughappointmentofagents

exceedingtenpercentofnetworthor` 100crore,oftheCompanywhicheverislower

3. leasingofpropertyofanykind exceeding ten percent of the net worth orexceedingtenpercentofturnoveror`100croreoftheCompany,whicheverislower

4 Availing or rendering of any services directly orthroughappointmentofagents

Exceedingtenpercentofannualturnoveror`50croreoftheCompany,whicheverislower

5. Appointment to any office or place of profit inthe company, its subsidiary company or associate company

Monthly remuneration exceeding two and halflakhrupees

6 Remuneration for underwriting the subscriptionof any securities or derivatives thereof of thecompany

Exceedingonepercentofthenetworth

Explanation:

TurnoverorNetworthshallbecomputedbasedonthelastAuditedBalanceSheetoftheCompany.

However, therequirementofobtainingpriorapprovalofshareholdersshallnotbeapplicable fortransactionsenteredintobetweentheholdingcompanyanditswhollyownedsubsidiarywhoseaccountsareconsolidatedwithsuchholdingcompanyandplacedbeforetheshareholdersatthenextgeneralmeeting.



40 41

(iv) Related party Transactions not requiring approval of Audit Committee/Board etc

Notwithstandingtheforegoing,RelatedPartyTransactionsinvolvingtheprovidingofcompensationtoadirectororKeyManagerialPersonnelinconnectionwithhisorherdutiestotheCompanyincludingsalary,reimbursementofbusinessandtravelexpenses,haltingallowance,entertainmentexpensesetcincurredintheordinarycourseofbusiness,willnotrequiretheapprovaloftheAuditCommittee/Board/shareholders.

5. Related party Transactions not approved under this Policy

Whereanycontractorarrangementnotinordinarycourseofbusinessand/ornotonarmslengthbasisisenteredintobyadirectororanyotheremployeewithoutobtainingtheapprovalofBoardorapprovalofshareholdersbyaspecialresolutioninthegeneralmeetingunderSection188(1)oftheAct,itshallbeputupforratificationbytheBoardorbytheshareholdersatameetingwithinthreemonthsfromthedateonwhichsuchcontractorarrangementwasenteredinto.IntheeventtheCompanybecomesawareofatransactionwithaRelatedPartythathasnotbeenapprovedwithinthreemonthsasstatedabove,themattershallbereviewedbytheBoard.TheBoardshallconsideralloftherelevantfactsandcircumstancesofsuchTransaction/arrangementandevaluatealloptionsavailabletotheCompany,includingratificationbytheBoardorshareholders,revisionorterminationofsuchtransaction/arrangementandtakeanysuchactionasitmaydeemappropriate.

6. Disclosures

TheparticularsofcontractsorarrangementwithRelatedPartiesreferredtoinsection188shallbedisclosedintheBoard’sreportforthefinancialyearcommencingonorafterApril1,2014intheprescribedFormandthesaidformshallbesignedbythepersonswhohavesignedtheBoard’sreport.TheCompanyshalldisclosethisPolicyonitswebsiteandalsoinitsannualreport.

7. Register of Contracts/Arrangements in which Directors are interested

The Company shallmaintain a Register of Contractswith Related Parties in accordancewith the requirements ofSection189oftheActtorecordparticularsofallcontracts/arrangementstowhichSection184(2)andSection188oftheActappliesandplacesuchregisterbeforethenextmeetingoftheBoardandobtainsignaturesofallDirectorspresentatthatmeeting.ThesaidregistershallbeauthenticatedbytheCompanySecretaryorsuchotherpersonasmaybeauthorizedbytheBoardandshallbepreservedpermanently.SuchRegisterofContractsshallbekeptattheregisteredofficeoftheCompanyoratsuchotherplaceasthemembersoftheCompanymaydecide,andshallbeopenforinspectionduringbusinesshours.AmemberoftheCompanyisentitledtogettheextractsofthesaidregister, within7daysofthedateoftherequestanduponpaymentofsuchfeesasmaybespecifiedintheArticlesofAssociationoftheCompany.

8. Applicability

IntheeventofanyprovisionscontainedinthisPolicyareinconsistentwiththeprovisionscontainedinCompaniesAct,2013orRBIregulationsorAccountingStandards,etc.oranyamendmentsthereto,(RegulatoryActs),theprovisionscontainedintheRegulatoryActswillprevail.

9. Amendments to the Policy

TheBoardofDirectorsonitsownand/oraspertherecommendationsofAuditCommitteecanamendthisPolicy,asandwhendeemedfit.




Mumbai (DIN 0267422) (DIN 00040526)



40 41

ANNEXURE IV TO THE DIRECTORS’ REPORT

FORM NO. AOC.2

Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms

length transactions under third proviso thereto

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)

1. Detailsofcontractsorarrangementsortransactionsnotatarm’slengthbasis-NIL

(a) Name(s)oftherelatedpartyandnatureofrelationship-N.A

(b) Natureofcontracts/arrangements/transactions-N.A

(c) Durationofthecontracts/arrangements/transactions- N.A

(d) Salienttermsofthecontracts/arrangements/transactionsincludingthevalue,ifany-N.A

(e) Justificationforenteringintosuchcontractsorarrangementsortransactions-N.A

(f) date(s)ofapprovalbytheBoard-N.A

(g) Amountpaidasadvances,ifany:-N.A

(h) Dateonwhichthespecialresolutionwaspassedingeneralmeetingasrequiredunderfirstprovisotosection188-N.A

2. Detailsofmaterialcontractsorarrangementortransactionsatarm’slengthbasis:

AlltransactionsenteredintobytheCompanywithrelatedpartiesduringtheyearendedMarch31,2018areinordinarycourseofbusinessandatarmslengthbasis.ThedetailsofmaterialcontractsorarrangementortransactionsatanaggregatelevelforthefinancialyearendedMarch31,2018are:

S.N Name(s) of the related party and nature of relationship

Nature of contract/

arrangement

Duration of contract/

arrangement/ transaction

Salient terms of contract/

arrangements/ transactions

including value, if any

Amount (in Rs lakh)

Date of Board approval, if any

Amount paid as advances, if

any

1. BankofIndia Loansavailed LoansavailedaspertheBank’ssanctionletter

156976.67 N.A -

2. BankofIndia Repayment oftheLoansavailed

RepaymentofloansavailedaspertheBank’ssanctionletter

181821.37 N.A -

3. BankofIndia Interest Provided

Interest paid ontheloansavailedaspertheBank’ssanctionletter

127.33 N.A -

4 BankofIndia Otherfinancialpayments (Feeforbankcredit)

Processing Fees PaidtoBOIaspertheBank’ssanctionletter

27.73 N.A -



42 43


Nature of contract/

arrangement






Amount (in Rs lakh)



any

5. STCI Primary DealerLtd-whollyownedsubsidiary

Saleof Government Securities

Saleof Government Securitiesattheprevailingmarket prices

4993.83 N.A -


CSGL Charges paid on GSec Deals

CSGL Charges paid on GSec Deals

1.88 -N,A -


Reimbursement madeforelectricitycharges

Reimbursement made towards sharingof Electricitycharges at DelhiOffice,proportionatetotheofficeshared.

1.85 N.A -


Reimbursement towards stafftrainingprogramme

Reimbursement made towards STCI’sshareofchargesforstafftrainingprogram conducted by SoaringEagles.

0.13 N.A -


Reimbursement made toward paymentforOpinion

Reimbursement made towards STCI’sshareofchargesforobtaininglegalopinion(costsharedequally).

1.80 N.A -


Reimbursement ofexpenses received

Reimbursement received towards STCI PD’sshareofchargesforstafftrainingprogram conducted by SoaringEagles.

0.53 N.A -



42 43


Nature of contract/

arrangement






Amount (in Rs lakh)



any


Reimbursement ofexpenses received

Reimbursement receivedforHouseRent recoveredfromstaffofSTCIPDforoccupyingtheCompany’sresidentialquartersatMumbai

10.55 N.A -


Sittingfeesreceived

Sittingfees receivedforeachmeetingoftheBoardattendedbyitsNominee.

2.10 N.A -

13. STCI CommoditiesLtd- whollyownedsubsidiary

Sittingfeesreceived

SittingfeesreceivedforeachmeetingofBoardattendedby its Nominee.

0.45 N.A -

Theabovedisclosureoftransactions/arrangementswithrelatedpartieshasbeenmadeasamatterofabundantprecautioninabsenceofdefinitionofmaterialcontract/arrangement/transactionunderSection188oftheCompaniesAct,2013.




Mumbai (DIN 0267422) (DIN 00040526)



44 45

ANNEXURE V TO THE DIRECTORS REPORT

ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES AS PRESCRIBED UNDER SECTION 135 OF THE COMPANIES ACT, 2013 AND COMPANIES (CORPORATE SOCIAL RESPONSIBILITY POLICY) RULES, 2014

1. A brief outline of the Company’s CSR policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs.

The CSR Policy of the Company lays down the guidelines andmechanism for undertaking socially useful initiatives orprogrammesorprojectsforwelfare&sustainabledevelopmentofthecommunityatlargeinlinewiththerequirementsofsection135oftheCompaniesAct2013(theAct)readwiththeCompanies(CorporateSocialResponsibilityPolicy)Rules2014.TheCSRPolicyinteraliaincludetheCSRactivities/projects/programstobeundertakenbytheCompanyasspecifiedinScheduleVIIoftheAct,themodalitiesofexecution,implementationandmonitoringprocessforthesame.

TheCSRCommitteeconstitutedbytheBoardrecommendstotheBoardtheCSRPolicy,theamountofexpendituretobeincurredeachyearontheCSRactivitiesinpursuanceofthePolicy,monitorstheCSRpolicyoftheCompanyfromtimetotimeandinstitutesamonitoringmechanismforimplementationofCSRprojectsorprogramsoractivitiesundertakenbytheCompany.TheCSRCommitteeofExecutives(CSRCE)comprisingofManagingDirector,DeputyManagingDirectorandseniorexecutivesnominatedbytheManagingDirectorimplementsandmonitorstheCSRactivitiesoftheCompanywithinthePolicyFrameworkundertheoverallsupervisionoftheCSRCommitteeoftheBoard.

Weblink to the CSR Policy and projects or programs

http://stcionline.com/pdf/CSR-Policy.pdf

2. The Composition of the CSR Committee:

ThepresentcompositionoftheCSRCommitteeisasfollows:

(a) ShriT.VRao,Chairman

(b) ShriK.NarasimhaMurthy,member

(c) Ms.ThankomTMathew,member

(d) ShriPradeepMadhav,member

(e) ShriRaghvendraKumar,member

3. Average net profit of the company for last three financial years:

TheAveragenetprofitoftheCompanyis`13065.53Lakh

4. Prescribed CSR Expenditure (two per cent of the amount as in item 3 above):

TheprescribedCSRexpenditurebasedon2%ofaveragenetprofitsmadeduringthelast3financialyearsis`261.32Lakh

5. Details of CSR spent during the financial year:

(a) Total amount to be spent for the financial year : ` 261.32 Lakh;

(b) Amount unspent, if any: Nil



44 45

(c) Manner in which the amount spent during the financial year is detailed below.

(1) (2) (3) (4) (5) (6) (7) (8)

S.N CSR project or activity identified

Sector inwhich Projectis covered

Projects or programs(1) Local area or other(2) Specify the State and district where projects or programs was undertaken

Amount outlay (budget) project or programs wise

Amount spent on projects Sub – heads:1. Direct expenditure on projects or programs2. Overheads

Cumulative expenditure upto the reporting period

Amount spent Direct or throughimplementing agency*

1. Contributionto Prime Minister's NationalReliefFundforsocioeconomic developmentandreliefandwelfare

Socio economic developmentandreliefandwelfare

Contributionto the Prime Minister’sNationalReliefFundforsocioeconomic developmentandreliefandwelfare

155.68 (i)Directexpenditure:

155.68 (ii)Overhead:Nil

155.68 Direct

2. Projectforpatientcaretowards medicaltreatmentof220deservingpoorpatients(70childrensufferingbloodcancer&150womensufferingfrombreastcancer)atTataMemorialhospital.

Promoting healthcareincludingpreventivehealthcare

ParelMumbai,Maharashtra

11.40 (i)DirectExpenditure:11.00

(ii)Overhead:0.40

11.40 Through - Vasantha MemorialTrust

3. ProjectforCancerawareness & screening.

Promotinghealthcareincludingpreventivehealthcare

In and around Mumbai,faroffsuburbsand outside Mumbai in the interiorsofMaharashtra

2.60 (i)DirectExpenditure:

2.60

(ii)Overheads:

Nil

2.60 Through - Vasantha MemorialTrust

(`InLakhs)



46 47

(1) (2) (3) (4) (5) (6) (7) (8)








4 Sponsor the educationalexpensesandcostofmedicines/medicalemergencyfor40parentlessanddestitutechildrenforaperiodof1year.

Empowering orphans, promotingeducation,includingspecialeducationamong children

Gadakana, Bhubaneswar,Odisha


11.00

(ii)Overheads:

Nil

11.00 Through -

RAWAAcademy

5. Sponsor the MiddayMeal Pro-gram for600government schoolchildrenat Vrindavan and500government schoolchildrenatVadodraforaperiodof 1year

Eradicatinghunger and malnutrition,promotingeducation,includingspecialeducationamong children.

Vadodra in GujratandVrindavan in UP


10.09

(ii)Overheads:0.37

10.45 Through - Akshaya Patra Foundation

6. Independent Learners project(activitybasededucation)for20children liv-ingintheslumsofBorivali&Dahisarforaperiodof1year

Promotingeducation,including specialeducationamong children

Borivali&Dahisar, Mumbai-Maharashtra

3.73 (i)Directexpenditure

:3.63

(ii)Overheads:

0.10

3.73 Through -

Touching LivesWelfareTrust



46 47

(1) (2) (3) (4) (5) (6) (7) (8)








7. Projectforrationsupportto50in-digentseniorciti-zens(26singlepersons&12couples)foraperiodofoneyear

Oldagehomes, day care centers & such other facilitiesforseniorcitizensand measures forreducinginequalitiesfacedby sociallyandeconomicallybackward groups etc

Mumbai, Maharashtra

6.00 (i)DirectExpenditure

:5.94

(ii)Overheads:0.06

6.00 Through -

Dignity Foundation

8. Educationtotribalchildrenat50EkalVidyalayas(Oneteacherschools)inGhoti-Nashikforaperiodof1year.

PromotionofEducation& enhancing vocationalskills especiallyamong children.

Ghoti-Nasik 10.00 (i)DirectExpenditure:9.63

(ii)Overheads:

0.37

10.00 Through -

Friends ofTribalsSociety

9. HolisticCommunity projectformother&childhealthcare towards medicaltreatmentof240patients(verypoormothers & children)foraperiodof 1year.

PromotingHealthcareincluding preventivehealthcare

In and around KolkataandtheruralareasofBengal

14.76 (i)Directexpenditure

:14.76

(ii)Overheads

:Nil

14.76 Through -

Ramakrishna Sarda Mission MatriBhavan



48 49

(1) (2) (3) (4) (5) (6) (7) (8)








10. Sponsor thecostofeducationof20 underprivilegedchildrenatRTESchoolsIndia, S.S Marg, Goregaon west foraperiodof1year.

Promotingeducation,including specialeducationespeciallyamong children

S.Goregaon west, Mumbai

3.40 (i)Direct

expenditure

:3.40

(ii)Overheads

:Nil

3.40 Through - Desh Seva Samiti(DSS)

11. Contribution(outofdividend proceedsofHDFCCharityFund)forcancer cure to thecorpusofIn-dia Cancer tofundthecostoftreatmentofneedyand under privilegedcancerpatients

PromotingHealthcareincluding preventivehealthcare

Across hospitalsin28states

32.30 (i)Direct

expenditure

:32.30

(ii)Overheads

:Nil

32.30 Through - India Cancer Society

*Give details of implementing agency.

6. In case the Company has failed to spend the two per cent of the average net profit of the last three financial years or any part thereof, the company shall provide the reasons for not spending the amount in its Board report : Notapplicable

7. A responsibility statement of the CSR Committee that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the Company

WeherebystatethattheimplementationandmonitoringofCSRPolicy, is incompliancewithCSRobjectivesandPolicyoftheCompany.

Pradeep Madhav T. V. RaoJuly 25 , 2018 Managing Director & CEO Chairman of CSR CommitteeMumbai (DIN 0267422) (DIN 05273533)



48 49

ANNEXURE VI TO THE DIRECTORS’ REPORT

DISCLOSURES PURSUANT TO SECTION 197(12) OF THE ACT READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014.

i. The ratio of the remuneration of each director to the median remuneration of employees of the company for the financial year 2017-18.

Name of Director (refer Note 1)

Designation Total remuneration paid in FY 2017-18 (refer note 2)(` in Lakhs)

Ratio of remuneration of director to median remuneration of employees (Refer Note 3 & 4)

Mr. Pradeep Madhav Managing Director & CEO 91.66 10.26

Mr.SurendraBehera Deputy Managing Director(from4.05.2016upto28.03.2018)

58.70 6.57

ii. The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year 2017-18:

Name of Director & KMPs

Designation Total Remuneration paid (` In Lakhs)

% increase (Refer note 5)

FY 2017-18 FY 2016-17

Mr Pradeep Madhav ManagingDirector&CEO(w.e.f24.01.2017) 91.66 16.61 1.28%

Mr.S.KBehera DeputyManaging Director (w.e.f 4.05.2016upto28.03.2018)

58.70 47.37 13.30%

Mr. Yogesh Gaat ManagingDirector&CEO(upto23.12.2016) - 87.98 *notapplicable

Mr.KamleshRathi ChiefFinancialOfficer 37.56 31.72 18.41%

Ms. Suparna Sharma Company Secretary 32.18 31.06 3.61%

*Percentage increase in remuneration is not given as they were not holding directorship/ position of KMP in the Company in FY 2017-18.

iii. The percentage increase in the median remuneration of employees in the financial year ended March 31, 2018:

MedianRemunerationofemployeesisRs8.93lakhsandRs11.03lakhsforFY17-18&FY16-17respectively.Thepercentageincreaseinthemedianremunerationofemployeesinthefinancialyear2017-18is-19%.

iv. The number of permanent employees on the rolls of company:

ThenumberofemployeesonthepermanentpayrollsoftheCompanyasonMarch31,2018is44.

v. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

TheaverageincreaseinthesalariesofemployeesotherthantheKeyManagerialPersonnelforFY2017-18isaround9.70%whiletheaverageincreaseintheremunerationoftheKeyManagerialPersonnelis9.14%.

Notes:

1. TheNon-ExecutiveDirectors including IndependentDirectors are only entitled to payment of sitting fees for eachmeetingoftheBoardorCommitteethereofattendedbythem,detailsofwhichareprovidedintheExtractofAnnualReturninFormMGT-09annexedtothisDirectorsreport.TheNon-ExecutiveDirectorsare,therefore,notconsideredforthepurposeof(i)&(ii)abovei.eRatioofremunerationofdirectortothemedianremunerationofemployees&percentageincreaseinremunerationforeachdirector.



50 51

2. Totalremunerationincludessalary,perquisites,profitsinlieuofsalarydefinedundersection17oftheIncomeTaxAct,1961andCompany’scontributiontoProvidentFund.

3. The median remuneration of employees does not include Managing Director’s and Deputy Managing Director’sremuneration.

4. Theratioofremunerationofdirectortothemedianremunerationofemployeesisdeterminedbasedontheirannualisedremuneration.

5. Thepercentageincreaseinremunerationofdirector&KMPsandtheaverageincreaseinremunerationforemployeesandtheKeyManagerialpersonnelisdeterminedbasedontheirannualisedremuneration.



July 25 , 2018 Managing Director & CEO Director

Mumbai (DIN 0267422) (DIN 00040526)



50 51

FORM NO. MR-3

SECRETARIAL AUDIT REPORTFORTHEFINANCIALYEARENDED31STMARCH,2018

[Pursuanttosection204(1)oftheCompaniesAct,2013andruleNo.9oftheCompanies(AppointmentandRemunerationPersonnnel)Rules,2014]

To The Members, STCI Finance Limited A/B1-802,AWing,8thFloor, Marathon Innova, MarathonNextgenCompound, OffGanpatraoKadamMarg, LowerParel(W),Mumbai400013.

Dear Sir / Madam,

WehaveconductedthesecretarialauditofthecomplianceofapplicablestatutoryprovisionsandtheadherencetogoodCorporateGovernancepracticebySTCI Finance Limited(hereinaftercalled“the Company”).SecretarialAuditwasconductedinamannerthat provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinionthereon.

BasedonourlimitedverificationofCompany’sbooks,papers,minutebooks,formsandreturnsfiledwithregulatoryauthoritiesandotherrecordsmaintainedbytheCompanyandalsotheinformationprovidedbytheCompany,itsofficers,agentsandauthorizedrepresentativesduringtheconductofsecretarialaudit,weherebyreportthatinouropinion,thecompanyhas,duringthefinancialyearendedon31stMarch,2018compliedwiththestatutoryprovisionslistedhereunderandalsothattheCompanyhasproperBoard-processesandcompliance-mechanisminplacetotheextent,inthemannerandsubjecttothereportingmadehereinafter:

We further report that maintenanceofproperandupdatedbooks,papers,minutesbooks,fliingofformsandreturnswithapplicableregulatoryauthoritiesandmaintainingotherrecordsisresponsibilityofmanagementandoftheCompany,ourresponsibilityistoverifythecontentofthedocumentsandreturnsproducebeforeus,makeobjectiveevaluationofthecontent inrespectofcomplianceandreportthereon.

Wehaveexaminedontestbasis.thebooks,papers,minutebooks,formsandreturnsfiledandotherrecordsmaintainedbytheCompanyandproducedbeforeusforthefinancialyearended31stMarch,2018,accordingtotheprovisionsof:

(i) TheCompaniesAct,2013andtherulesmadethereunder;

(ii) TheSecuritiesContracts(Regulation)Act,1956(‘SCRA’)andtherulesmadethereunder;

(iii) TheDepositoriesAct,1996andtheRegulationsandBye-lawsframedthereunder,

(iv) ThefollowingRegulationsandGuidelinesprescribedundertheSecuritiesandExchangeBoardofIndiaAct,1992(‘SEBIAct’):-

a. TheSecuritiesandExchangeBoardofIndia(SubstantialAcquisitionofSharesandTakeovers)Regulations,2011;

b. TheSecuritiesandExchangeBoardofIndia(ProhibitionofInsiderTrading)Regulations,2015;

c. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993,regardingtheCompaniesActanddealingwithclient;

d. TheSecuritiesandExchangeBoardofIndia(IssueandListingofDebtSecurities)Regulations,2008.

(v) ProvisionsofReserveBankofIndiaAct,1934andRegulations/GuidelinesissuedbyReserveBankofIndiafromtimetotimeasapplicabletoNon-depositacceptingNBFCs.

Wehavealsoverifiedsystemsandmechanismwhichare inplaceandasfollowedbyCompanytoensurecomplianceofotherapplicableLaws(inadditiontotheabovementionedLawsapplicabletotheCompany).Wehavealsoreliedontherepresentation

ANNEXURE VII TO THE DIRECTORS’ REPORT



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madebytheCompanyanditsOfficersinrespectofsystemsadoptedbytheCompanyfromtimetotimetoensurecompliancesapplicabletotheCompanyandfoundthesamesatisfactory.

We have also examined compliance with the applicable clauses of the following;

a. Secretarial Standards (SS-1 and SS-2) issued by the Institute of Company Secretaries of India under the provisions ofCompaniesAct,2013;

b. SEBI(ListingObligationsandDisclosureRequirements)Regulations,2015.

We further Report that, during the year, either therewasnoevent attracting thebelowmentionedprovisionsor itwasnotmandatoryonthepartoftheCompanytocomplywiththefollowingProvisions,Regulations/Guidelines:

a. TheSecuritiesandExchangeBoardofIndia(IssueofCapitalandDisclosureRequirements)Regulations,2009(totheextentapplicable);

b. The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)Guidelines,1999;

c. TheSecuritiesandExchangeBoardofIndia(DelistingofEquityShares)Regulations,2009;.

d. TheSecuritiesandExchangeBoardofIndia(BuyBackofSecurities)Regulations,1998.

e. ForeignExchangeManagementAct,1999andtherulesandregulationsmadethereundertotheextentofForeignDirectInvestment,OverseasDirectInvestmentandExternalCommercialBorrowings-ThesamewasnotapplicabletotheCompany,duringtheyearunderreview;

BasedontheabovesaidinformationprovidedbytheCompany,wereportthatduringthefinancialyearunderreport,theCompanyhascompliedwiththeprovisionsoftheabovementionedAct/sincludingtheapplicableprovisionsoftheCompaniesAct,2013andRules,Regulations,Guidelines,Standards,etc.mentionedaboveandwehavenomaterialobservationof instancesofnonComplianceinrespectofthesame.

We further report that:

TheBoardofDirectorsoftheCompanyisdulyconstitutedwithproperbalanceofExecutiveDirectors,Non-ExecutiveDirectorsandIndependentDirectors.ThechangesinthecompositionoftheBoardofDirectorsthattookplaceduringtheyearunderreviewwerecarriedoutincompliancewiththeprovisionsoftheAct.

Wealsoreportthatadequatenotice/sweregiventoalldirectorstoscheduletheBoardMeetings,agendaanddetailednotesonagendaweresentat leastsevendays inadvance(unlessagreedbymembersofBoard),andareasonablesystemexistsforBoardMembersforseekingandobtainingfurtherinformationandclarificationsontheagendaitemsbeforethemeetingandformeaningfulparticipationatthemeeting.

Majoritydecisioniscarriedthroughandpropersystemisinplacewhichfacilitates/ensuretocaptureandrecord,thedissentingmember’sviews,ifany,aspartoftheminutes.

BasedontherepresentationmadebytheCompanyanditsOfficersexplainingusinrespectofinternalsystemsandmechanismestablishedbytheCompanywhichensurescompliancesofotherActs,LawsandRegulationsapplicabletotheCompany,wereportthatthereareadequatesystemsandprocessesintheCompanycommensuratewiththesizeandoperationsoftheCompanytomonitorandensurecompliancewithapplicablelaws,rules,regulationsandguidelines.

We further report that duringtheauditperiodtherewasnospecificeventsactiontakenplacewhichhaveamajorbearingontheCompany’saffairsandstatutorycompliancesinpursuanceoftheabovereferredlaws,rules,regulations,guidelinesetc.

For: Nilesh Shah & Associates Company Secretaries

Nilesh Shah PartnerDate:May2,2018 FCS : 4554 C.P. : 2631Place:Mumbai Note:ThisReporthastobereadwith“Annexure-A”.



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‘ANNEXURE A’

To The Members, STCI Finance Limited A/B1-802,AWing,8thFloor, Marathon Innova, MarathonNextgenCompound, OffGanpatraoKadamMarg, LowerParel(W),Mumbai400013.

1. Maintenanceofsecretarialrecordistheresponsibilityofthemanagementofthecompany.Ourresponsibilityistoexpressanopiniononthesesecretarialrecordsbasedonouraudit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about thecorrectnessofthecontentsoftheSecretarialrecords.Theverificationwasdoneontestbasis(byverifyingrecordsmadeavailabletous)toensurethatcorrectfactsarereflectedinsecretarialrecords.Webelievethattheprocessesandpractices,wefollowed,provideareasonablebasisforouropinion.

3. WehavenotverifiedthecorrectnessandappropriatenessoffinancialrecordsandBooksofAccountsofthecompany.

4. Whereverrequired,wehaveobtainedManagementrepresentationaboutthecomplianceoflaws,rulesandregulationsandoccurrenceofevents.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is responsibilityofmanagement. Our examinationwas limited to the verification of process followed by Company to ensure adequateCompliance.

6. The Secretarial Audit Report is neither an assurance as to the future viability of the company nor of the efficancy oreffectivenesswithwhichthemanagementhasconductedtheaffairsofthecompany.

For: Nilesh Shah & Associates Company Secretaries

Nilesh Shah PartnerDate:May2,2018 FCS : 4554 C.P. : 2631Place:Mumbai



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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF STCI FINANCE LIMITED(FormerlyknownasSecuritiesTradingCorporationofIndiaLimited)

Report on the Standalone Financial Statements

WehaveauditedtheaccompanyingstandalonefinancialstatementsofSTCIFinanceLimited(‘’theCompany’’)whichcomprisetheBalanceSheetasatMarch31,2018,theStatementofProfitandLoss,andtheCashFlowstatementfortheyearthenended,andasummaryofsignificantaccountingpoliciesandotherexplanatoryinformation.

Management’s Responsibility for the Standalone Financial Statements

TheCompany’sBoardofDirectorsisresponsibleforthemattersstatedinsection134(5)oftheCompaniesAct2013(“theAct”)withrespecttothepreparationofthesestandalonefinancialstatementsthatgiveatrueandfairviewofthefinancialposition,financialperformanceandcashflowsoftheCompanyinaccordancewiththeaccountingprinciplesgenerallyacceptedinIndia,includingtheAccountingStandardsspecifiedundersection133oftheAct,readwithRule7oftheCompanies(Accounts)Rules,2014.ThisresponsibilityalsoincludesmaintenanceofadequateaccountingrecordsinaccordancewiththeprovisionoftheActfor safeguardingof theassetsof theCompanyand forpreventinganddetecting fraudsandother irregularities; selectionandapplicationofappropriateaccountingpolicies;making judgmentsandestimatesthatarereasonableandprudent;anddesign,implementationandmaintenanceofadequateinternalfinancialcontrols,thatwereoperatingeffectivelyforensuringtheaccuracyandcompletenessoftheaccountingrecords,relevanttothepreparationandpresentationofthefinancialstatementsthatgiveatrueandfairviewandarefreefrommaterialmisstatement,whetherduetofraudorerror.

Auditor’s Responsibility

Ourresponsibilityistoexpressanopiniononthesestandalonefinancialstatementsbasedonouraudit.

WehavetakenintoaccounttheprovisionsoftheAct,theaccountingandauditingstandardsandmatterswhicharerequiredtobeincludedintheauditreportundertheprovisionsoftheActandtheRulesmadethereunderandtheOrderundersection143(11)oftheAct.

WehaveconductedourauditinaccordancewiththeStandardsonAuditingundersection143(10)oftheAct.ThoseStandardsrequirethat,wecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreefrommaterialmisstatement.

Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresinthefinancialstatements.Theproceduresselecteddependontheauditor’sjudgment,includingtheassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.Inmakingthoseriskassessments,theauditorconsidersinternalfinancialcontrolrelevanttotheCompany’spreparationofthefinancialstatementsthatgiveatrueandfairviewinordertodesignauditproceduresthatareappropriateinthecircumstances.AnauditalsoincludesevaluatingtheappropriatenessofaccountingpoliciesusedandthereasonablenessoftheaccountingestimatesmadebyCompany’sDirectors,aswellasevaluatingtheoverallpresentationofthestandalonefinancialstatements.

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopiniononthestandalonefinancialstatements.

Opinion

Inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous,theaforesaidstandalonefinancialstatementsgivetheinformationrequiredbytheActinthemannersorequiredandgiveatrueandfairviewinconformitywithaccountingprinciplesgenerallyacceptedinIndiaofthestateofaffairsoftheCompanyasatMarch31,2018,anditsprofitsanditscashflowsfortheyearendedonthatdate.

Report on other legal and regulatory requirements

1. AsrequiredbytheCompanies(Auditor’sReport)Order,2016(“theOrder”)issuedbytheCentralGovernmentofIndiaintermsofsub-section(11)ofsection143oftheAct2013,wegiveintheAnnexureIastatementonthemattersspecifiedinparagraphs3and4oftheOrder,totheextentapplicable.



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2. Asrequiredbysection143(3)oftheAct,wereportthat:

a. Wehavesoughtandobtainedalltheinformationandexplanationswhichtothebestofourknowledgeandbeliefwerenecessaryforthepurposeofouraudit;

b. Inouropinion,properbooksofaccount,asrequiredbylaw,havebeenkeptbytheCompanysofarasitappearsfromourexaminationofthosebooks;

c. TheBalanceSheet,StatementofProfitandLossandCashFlowStatementdealtwithbythisReportareinagreementwiththebooksofaccount;

d. Inouropinion,theaforesaidstandalonefinancialstatementscomplywiththeAccountingStandardsspecifiedunderSection133oftheAct,readwithRule7oftheCompanies(Accounts)Rules,2014.

e. OnthebasisofwrittenrepresentationsreceivedfromthedirectorsasonMarch31,2018,andtakenonrecordbytheBoardofDirectors,noneofthedirectorsisdisqualifiedasonMarch31,2018,frombeingappointedasadirectorintermsofsection164(2)oftheAct.

f. WithrespecttotheadequacyoftheinternalfinancialcontrolsoverfinancialreportingoftheCompanyandtheoperatingeffectivenessofsuchcontrols,refertoourseparatereportinAnnexureII.

g. WithrespecttotheothermatterstobeincludedintheAuditor’sReportinaccordancewithRule11oftheCompanies(AuditandAuditors)Rules,2014,asamendedbytheCompanies(AuditandAuditors)AmendmentRules,2017,inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous:

i. TheCompanyhasdisclosedtheimpactofpendinglitigationsonitsfinancialpositioninitsfinancialstatements–ReferNote6.1tothefinancialstatements

ii. The Company did not have any long-term contracts including derivative contracts for which therewere anymaterialforeseeablelosses.

iii. TherewerenoamountswhichwererequiredtobetransferredtotheInvestorEducationandProtectionFundbytheCompanyduringtheyearended31stMarch,2018.

3. Asrequiredbysection143(5)oftheActandinpursuanceofdirectionsissuedbytheOfficeoftheComptrollerandAuditorGeneralofIndiafortheyearendedMarch31,2018,wereportthat:

i. According to the information and explanations given to us, and based on our examinations of the records of theCompany,theCompanydoesnotownanyfreeholdorleaseholdland.

ii. According to the information and explanations given to us, the details ofwaiver of interest/loans/fees during thefinancialyear2017-18alongwiththereasonsaregiveninAnnexureIII.

iii. Accordingtotheinformation&explanationgiventous,theCompanydoesnothaveanyinventorieslyingwiththirdparties.TheCompanyhasnotreceivedanygifts/grant(s)fromtheGovernmentorotherauthority.

ForandonbehalfofPrakash Chandra Jain & Co.Chartered AccountantsFirmRegistrationNo.002438C

Pratibha SharmaPartnerMembership No. 400755

MumbaiMay2,2018

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS STCI FINANCE LIMITED (FormerlyknownasSecuritiesTradingCorporationofIndiaLimited)



56 57

i. a. TheCompanyhasmaintainedproperrecordsshowingfullparticulars, includingquantitativedetailsandsituationoffixedassets.

b. Asexplainedtous,theCompanyhasdecidedtocarryoutphysicalverificationoffixedassetsonceineverythreeyears.Asexplainedtous, lastphysicalverificationoffixedassetwasdone in2015-2016. Inouropinion,thefrequencyofverificationofthefixedassetsisreasonablehavingregardtothesizeoftheCompanyandthenatureofitsassets.

c. AccordingtotheinformationandexplanationsgiventousandonthebasisofourexaminationoftherecordsoftheCompany,thetitledeedsofimmovablepropertiesareheldinthenameoftheCompany.

ii. Thesecuritiesheldasstock intradeare indematerializedformwithcustodian.Statementofsecurities isreceivedfromthecustodianonregularbasisandthesameisreconciledbythemanagementatregularintervals.Assecuritiesareheldindematerializedform,therequirementofphysicalverificationdoesnotarise.TheCompanyismaintainingproperrecordsofsecuritiesheldasstockintrade.Asinformedtous,thestatementsofsecuritiesobtainedfromcustodiansareverifiedwithbookrecordsandnodiscrepancieswerenoticedduringtheyearunderaudit.

iii. Aspertheinformationandexplanationgiventous,theCompanyhasnotgrantedloans,securedorunsecuredtocompanies,firms,LimitedLiabilityPartnershipsorpartiescoveredintheregistermaintainedundersection189oftheAct.Accordingly,provisionsofclause3(iii)(a),(b)and(c)arenotapplicabletotheCompany.

iv. Inouropinionandaccordingtotheinformationandexplanationgiventous,theCompanyhasnotgivenanyloans,guarantees&Securitytoanypartycoveredbytheprovisionsofsection185oftheAct.

In our opinion and according to the information and explanation given to us, the Company hadmade investments insubsidiariescompaniesintheearlieryears,whicharecontinuinginthecurrentyear.ThecompanyhascompliedwiththeprovisionsofSection186(1)oftheAct&inouropinionotherprovisionsofsection186arenotapplicabletotheCompanyastheCompanyisaRegisteredNon-BankingFinancialCompany.

v. TheCompanyhasnotacceptedanydepositsduringtheyearfromthepublicwithinthemeaningoftheprovisionsofsections73to76oranyotherrelevantprovisionsoftheActandrulesmadethereunder.Accordingly,theprovisionsofclause3(v)oftheOrderarenotapplicable.

vi. Accordingtotheinformationandexplanationsgiventous,theCentralGovernmenthasnotspecifiedmaintenanceofcostrecordsunderSection(1)section148oftheAct.Accordingly,theprovisionsofclause3(vi)oftheOrderarenotapplicable.

vii. a Accordingtotheinformationandexplanationsgiventousandbasedontherecordsexaminedbyus,exceptforstampdutyontransactionofNonGovernmentsecurities,(ReferNote19)theCompanyisregularindepositingundisputedstatutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, service tax, duty ofcustoms,dutyofexcise,goodsandservicetax,valueaddedtax,cessandanyotherstatutorydueswiththeappropriateauthorities.Amount relating toaboveand remainingoutstandingasat theyearend foraperiodofmore thansixmonthsfromthedateitbecamepayableisstampdutyonNon-Governmentsecuritiesaggregatingto` 62.65lakhs.

b Accordingtotheinformationandexplanationsgiventousandbasedontherecordsexaminedbyus,therearenoduesofsalestax,servicetax,dutyofcustoms,dutyofexcise,goodsandservicetaxandvalueaddedtaxwhichhavenotbeendepositedonaccountofanydispute.Thedemandsinrespectoftaxdeductedatsourceandincometaxforthefollowingyearshavenotbeendepositedonaccountofdisputes:

Statute Nature of Dues Amount (` in lakhs)

Period to which the amount relates

Forum where dispute is pending

IncomeTaxAct,1961

Taxdeductedatsource

3.54 FinancialYear2008–09 AssistantCommissionerofIncometax–TDS–3(2)

IncomeTaxAct,1961

Taxdeductedatsource


IncomeTaxAct,1961

Taxdeductedatsource


ANNEXURE – I TO THE INDEPENDENT AUDITOR’S REPORT

Referred to in paragraph 1 under “Report on other legal and regulatory requirements” of our report of even date



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Statute Nature of Dues Amount (` in lakhs)

Period to which the amount relates


IncomeTaxAct,1961

Incometax 52.61 FinancialYear2011-12 Assessingofficer

IncomeTaxAct,1961

Incometax 5.24 FinancialYear2012-13 Assessingofficer

viii. Accordingtotheinformationandexplanationsprovidedtousandbasedontherecordsexaminedbyus,theCompanyhasnotdefaultedinrepaymentofduestobanksanddebentureholdersduringtheyear.TheCompanyhasnotraisedanyfundsfromfinancialinstitutionsortheGovernment.

ix. Accordingtoinformationandexplanationgiventousandbasedontherecordsexaminedbyus,theCompanyhasutilizedthemoniesraisedbywayoftermloansforthepurposeforwhichtheloanwasobtained.Thecompanyhasnotraisedanymoneybywayofinitialpublicofferorfurtherpublicoffer(includingdebtinstruments)andtermloansduringtheyear.

x. Accordingtotheinformationandexplanationsprovidedtous,nofraudbytheCompanyorontheCompanybyitsofficersoremployeeshasbeennoticedorreportedduringthecourseoftheaudit.

xi. Accordingtoinformationandexplanationprovidedtousandbasedontherecordsexaminedbyus,theCompanyhaspaid/providedformanagerialremunerationinaccordancewiththerequisiteapprovalsmandatedbytheprovisionsofSection197oftheActtobereadwithScheduleVtotheAct.

xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company.Accordingly,provisionsofclause3(xii)oftheOrderarenotapplicable.

xiii. AccordingtotheinformationandexplanationprovidedtousandbasedonourexaminationofrecordsoftheCompany,alltransactionswiththerelatedpartiesareincompliancewithSections177and188oftheAct,whereapplicableandthedetailshavebeendisclosedinthestandaloneFinancialStatementsasrequiredbytheapplicableaccountingstandards.

xiv. AccordingtotheinformationandexplanationsgiventousandbasedonourexaminationoftherecordsoftheCompany,theCompanyhasnotmadeanypreferentialallotmentorprivateplacementofsharesorfullyorpartlyconvertibledebenturesduringtheyear.Accordingly,theprovisionsofclause3(xiv)oftheOrderarenotapplicable.

xv. AccordingtotheinformationandexplanationprovidedtousandbasedonourexaminationoftherecordsoftheCompany,theCompanyhasnotenteredintoanynon-cashtransactionswiththedirectorsorpersonsconnectedwiththem.Accordingly,provisionsofclause3(xv)oftheOrderarenotapplicable.

xvi. ThecompanyisrequiredtoberegisteredunderSection45-IAoftheReserveBankofIndiaAct,1934andhasinaccordancetothesameobtainedtheCertificateofRegistration.



Place:MumbaiDate:May2,2018





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WehaveauditedtheinternalfinancialcontrolsoverfinancialreportingofSTCIFinanceLimited(“theCompany”)asofMarch31,2018inconjunctionwithourauditofthestandalonefinancialstatementsoftheCompanyfortheyearendedonthatdate.

Management’s Responsibility for Internal Financial Controls

TheCompany’smanagementisresponsibleforestablishingandmaintaininginternalfinancialcontrolsbasedontheinternalcontroloverfinancialreportingcriteriaestablishedbytheCompanyconsideringtheessentialcomponentsofinternalcontrolstatedintheGuidanceNoteonAuditofInternalFinancialControlsOverFinancialReportingissuedbytheInstituteofCharteredAccountantsofIndia(‘ICAI’).Theseresponsibilitiesincludethedesign,implementationandmaintenanceofadequateinternalfinancialcontrolsthatwereoperatingeffectivelyforensuringtheorderlyandefficientconductofitsbusiness,includingadherencetocompany’spolicies,thesafeguardingofitsassets,thepreventionanddetectionoffraudsanderrors,theaccuracyandcompletenessoftheaccountingrecords,andthetimelypreparationofreliablefinancialinformation,asrequiredundertheAct.


OurresponsibilityistoexpressanopinionontheCompany’sinternalfinancialcontrolsoverfinancialreportingbasedonouraudit.WeconductedourauditinaccordancewiththeGuidanceNoteonAuditofInternalFinancialControlsOverFinancialReporting(the“GuidanceNote”)andtheStandardsonAuditing,issuedbyICAIanddeemedtobeprescribedundersection143(10)oftheAct,totheextentapplicabletoanauditofinternalfinancialcontrols,bothapplicabletoanauditofInternalFinancialControlsand,bothissuedbytheInstituteofCharteredAccountantsofIndia.ThoseStandardsandtheGuidanceNoterequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhetheradequateinternalfinancialcontrolsoverfinancialreportingwasestablishedandmaintainedandifsuchcontrolsoperatedeffectivelyinallmaterialrespects.

Ourauditinvolvesperformingprocedurestoobtainauditevidenceabouttheadequacyoftheinternalfinancialcontrolssystemoverfinancialreportingandtheiroperatingeffectiveness.Ourauditofinternalfinancialcontrolsoverfinancialreportingincludedobtaininganunderstandingofinternalfinancialcontrolsoverfinancialreporting,assessingtheriskthatamaterialweaknessexists,andtestingandevaluatingthedesignandoperatingeffectivenessofinternalcontrolbasedontheassessedrisk.Theproceduresselected depend on the auditor’s judgment, including the assessment of the risks ofmaterial misstatement of the financialstatements,whetherduetofraudorerror.

WebelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinionontheCompany’sinternalfinancialcontrolssystemoverfinancialreporting.

Meaning of Internal Financial Controls over Financial Reporting

Acompany’sinternalfinancialcontroloverfinancialreportingisaprocessdesignedtoprovidereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordancewithgenerallyaccepted accounting principles. A company’s internal financial control over financial reporting includes those policies andproceduresthat(1)pertaintothemaintenanceofrecordsthat,inreasonabledetail,accuratelyandfairlyreflectthetransactionsanddispositionsoftheassetsofthecompany;(2)providereasonableassurancethattransactionsarerecordedasnecessarytopermitpreparationoffinancial statements inaccordancewithgenerallyacceptedaccountingprinciples,andthat receiptsandexpendituresofthecompanyarebeingmadeonlyinaccordancewithauthorizationsofmanagementanddirectorsofthecompany;and(3)providereasonableassuranceregardingpreventionortimelydetectionofunauthorizedacquisition,use,ordispositionofthecompany’sassetsthatcouldhaveamaterialeffectonthefinancialstatements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Becauseoftheinherentlimitationsofinternalfinancialcontrolsoverfinancialreporting,includingthepossibilityofcollusionorimpropermanagementoverrideofcontrols,materialmisstatementsduetoerrororfraudmayoccurandnotbedetected.Also,projectionsofanyevaluationoftheinternalfinancialcontrolsoverfinancialreportingtofutureperiodsaresubjecttotheriskthat

ANNEXURE – II TO THE INDEPENDENT AUDITOR’S REPORT

Referred to in paragraph 2(f) under “Report on other legal and regulatory requirements” of our report of even date

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)



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theinternalfinancialcontroloverfinancialreportingmaybecomeinadequatebecauseofchangesinconditions,orthatthedegreeofcompliancewiththepoliciesorproceduresmaydeteriorate.

Opinion

Inouropinion,theCompanyhas,inallmaterialrespects,anadequateinternalfinancialcontrolssystemoverfinancialreportingandsuchinternalfinancialcontrolsoverfinancialreportingwereoperatingeffectivelyasatMarch31,2018,basedontheinternalcontrol overfinancial reporting criteria establishedby theCompany considering theessential componentsof internal controlstatedintheGuidanceNoteonAuditofInternalFinancialControlsOverFinancialReportingissuedbytheInstituteofCharteredAccountantsofIndia.




ANNEXURE II TO THE INDEPENDENT AUDITOR’S REPORT

Referred to in paragraph 2(f) under “Report on other legal and regulatory requirements” of our report of even date



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Cases of waivers and write offs

Sr. No.

Number of cases of waiver of interest

Total Amount waived (` In Lakhs)

Reasons for waiver as given by the company

Cases of waiver of interest

1 4 252.31 Considering business exigencies and to maintainbusinessrelations,interestandfeewaswaived.

Cases of write-off of loans

2 2 2,332.00 Loans and advances of ` 2,332.00 lakhs werewritten off as bad debts, after evaluation of theexistingstatus,securityavailableandthelikelihoodofrecovery.




ANNEXURE – III TO THE INDEPENDENT AUDITOR’S REPORT




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AUDITORS’ REPORT

TO THE BOARD OF DIRECTORS OF STCI FINANCE LIMITED(Formerly Securities Trading Corporation of India Limited)

1) This report is issued in accordance with the requirements of Non Banking Financial Companies Auditors Report (ReserveBank)Directions,2016–(MasterDirectionDNDS.PPD.03/66.15.001/2016-17datedSeptember29,2016).

2) WehaveauditedthecompanyfinancialstatementsofSTCIFinanceLimited

(FormerlySecuritiesTradingCorporationofIndiaLimited)(hereinafterreferredtoasthe“Company”)comprisingBalanceSheetasatMarch31,2018andtherelatedstatementofProfitandLossandCashFlowstatementfortheyearendedonthatdate,onwhichwehaveissuedourreportdatedMay2,2018.

Management’s Responsibility for the Financial Statements

3) The Company’s Board of Directors is responsible for the matter stated in section 134(5) of the Companies Act, 2013 (“theAct”)with respect to thepreparationof thesestandalonefinancial statements togivea trueand fairviewof thefinancialposition,financialperformanceandcashflowsoftheCompanyinaccordancewithaccountingprinciplesgenerallyacceptedinIndia,includingtheaccountingstandardsspecifiedundersection133oftheAct,readtherule7oftheCompanies (Accounts)rules,2014.Thisresponsibilityalsoincludesmaintenanceofadequateaccountingrecordsinaccordancewiththeprovisionsoftheactforsafeguardingoftheassetsofthecompanyandforpreventinganddetectingfraudsandotherirregularities ; selection and application of appropriate accounting policies ;making judgments and estimates that arereasonableandprudent;anddesign,implementationandmaintenanceofadequateinternalfinancialcontrols,thatwereoperatingeffectivelyforensuringtheaccuracyandcompletenessoftheaccountingrecords,relevanttothepreparationandpresentationofthefinancialstatementsthatgiveatrueandfairviewandarefreefrommaterialmisstatement,whetherduetofraudorerror.

4) TheManagement isalsoresponsibleforcompliancewithReserveBankof India(hereinafterRBIorBank)Act,1934andrelevantRBIcircularsandguidelinesapplicabletoNonBankingFinancialCompanies,asamendedfromtimetotime,andforprovidingalltherequiredinformationtoRBI.


5) Pursuant to the requirementsofNonBankingFinancialCompanies Auditor’sReport (ReserveBank)Directions2016asconsolidated in RBImasterDirection (RefDNBR.PD.008/03.10.119/2017-18 (the “Directions”), it is our responsibility toexamine theauditedbooksandrecordsof thecompany for theyearendedMarch31,2018andreporton themattersspecifiedinthedirectionstotheextentapplicableoftheCompany.

6) Weconductedourexaminationinaccordancewiththe‘GuidancenoteonAuditReportsandCertificatesforthe‘SpecialPurposes’issuedbytheInstituteofCharteredAccountantsofIndia.

Opinion

7) BasedonourexaminationoftheauditedbooksandrecordsofthecompanyfortheyearendedMarch31,2018asproducedforourexaminationandtheinformationandexplanationsgiventouswereportthat;

7.1. Thecompanyisengagedinthebusinessofnon-bankingfinancialinstitutionandhasobtainedacertificateofregistration(CoR)(certificateNo.B-13.00005December16,1997)undersection45IAofReserveBankof IndiaAct,1934)(2of1934)fromBank’sDepartmentofNon-BankingSupervision,MumbaiRegionalOffice.

7.2 ThecompanyisentitledtocontinuetoholdsuchCoRintermsofitsasset/(incomepattern)asonMarch31,2018.

7.3 As laid down in Master Direction- non Banking Financial Company- Systematically Important Non Deposit takingCompanyandDeposittakingCompany(ReserveBank)Directions2016,thenonbankingfinancialcompanyismeetingtherequirednetownedfundrequirement.

7.4 TheBoardofDirectorsofthecompanyhaspassedaresolutioninitsmeetingheldonApril26,2017fornonacceptanceofpublicdeposits.

7.5 Thecompanyhasnotacceptedanypublicdepositduringtheyearended31March2018.



62 63

7.6 The companyhas compliedwith theprudential norms relating to income recognition, accounting standards, assetclassificationandprovisioningforbadanddoubtfuldebtsasapplicabletointermsofNonBankingFinancialCompany–SystematicallyImportantNonDeposittakingCompanyandDeposittakingCompany(ReserveBank)directions,2016.

7.7Theannualstatementofcapitalfunds,riskassets/exposuresandriskassetsratio(NBS-7)hasbeenfurnishedtotheBankonApril14,2018withinthestipulatedperiodbasedontheunauditedbooksofaccount.ThecompanyhascorrectlydisclosedcapitaladequacyratioinformNBS-7inthereturnsubmittedtothebank.ItiscompliancewiththeminimumCRAR prescribed by the bank.

Restrictions on Use

8) Ourobligationsinrespectofthisreportareentirelyseparatefrom,andourresponsibilityandliabilityisinnowaychangedby,anyotherrolewemayhavehadasauditorsofthecompanyorotherwise.Nothingsaidinthisreport;noranythingsaidordoneinthecourseoforinconnectionwiththeservicesthataresubjectofthisreport,willextendanydutyofcarewemayhaveinourcapacityasauditorsofanyfinancialstatementsofthecompany.

9) ThisreportissuedpursuanttoourobligationsunderDirectionstosubmitareportonadditionalmattersasstatedintheaboveDirections,totheboardofdirectorsofthecompanyandshouldnotbeusedbyanyotherpersonorforanyotherpurpose.PrakashChandraJain&Co.neitheracceptsnorassumesanydutyorliabilityforanyotherpurposeortoanyotherpartytowhomourreportisshownorintowhosehandsitmaycomewithoutourpriorconsentinwriting.



MumbaiMay2,2018



62 63

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6) (b) OF THE COMPANIES ACT, 2013 ON THE FINANCIAL STATEMENTS OF STCI FINANCE LIMITED FOR THE YEAR ENDED 31 MARCH 2018

ThepreparationofFinancialStatementsofSTCIFinanceLimitedfortheyearended31March2018inaccordancewiththefinancialreportingframeworkprescribedundertheCompaniesAct,2013(Act) istheresponsibilityofthemanagementoftheCompany. The StatutoryAuditor appointedby theComptroller andAuditorGeneral of India under Section139(5) of theActisresponsibleforexpressingopinionontheFinancialStatementsunderSection143oftheActbasedonindependentaudit inaccordancewithstandardsonauditingprescribedunderSection143(10)oftheAct.ThisisstatedtohavebeendonebythemvidetheirAuditReportdated2May2018.

I,onbehalfoftheComptrollerandAuditorGeneralofIndia,haveconductedaSupplementaryAuditundersection143(6)(a)oftheActoftheFinancialStatementsofSTCIFinanceLimitedfortheyearended31March2018.ThisSupplementaryAudithasbeencarriedoutindependentlywithoutaccesstotheworkingpapersoftheStatutoryAuditorsandislimitedprimarilytoinquiriesoftheStatutoryAuditorsandcompanypersonnelandaselectiveexaminationofsomeoftheaccountingrecords.OnthebasisofmyauditnothingsignificanthascometomyknowledgewhichwouldgiverisetoanycommentuponorsupplementtoStatutoryAuditor’sReport.

ForandonthebehalfoftheComptrollerandAuditorGeneraloflndia

(Roop Rashi)PrincipalDirectorofCommercialAuditandex-officioMember,AuditBoard-I,Mumbai

Place:MumbaiDate:July2,2018



64 65

BALANCE SHEET AS AT MARCH 31, 2018(`inlakhs)

Particulars Note No.

As at March 31, 2018


I EQUITY AND LIABILITIES

1 Shareholders' Funds

(a) Sharecapital 1.1 38,000.00 38,000.00

(b) Reservesandsurplus 1.2 82,917.45 75,688.81

Sub-Total-(1) 120,917.45 113,688.81

2 Non Current Liabilities

(a) Longtermborrowings 2.1 98,929.00 103,333.33

(b) Longtermprovisions 2.2 628.95 672.49

Sub-Total-(2) 99,557.95 104,005.82

3 Current Liabilities

(a) Shorttermborrowings 3.1 129,635.40 140,980.02

(b) Tradepayables 3.2

- Totaloutstandingduesofmicroenterprisesandsmallenterprises

0.00 0.00

- Total outstanding dues of creditors other thanmicroenterprisesandsmallenterprises

170.82 34.30

(c) Othercurrentliabilities 3.3 29,348.32 11,800.14

(d) Shorttermprovisions 3.4 1,379.36 1,262.98

Sub-Total-(3) 160,533.90 154,077.44

TOTAL (1+2+3) 381,009.30 371,772.07

II ASSETS

1 Non-current Assets

(a) Property,plantandequipment 4.1 2,118.63 2,223.04

(b) Intangibleassets 4.1 10.77 13.99

(c) Noncurrentinvestments 4.2 18,178.16 26,625.21

(d) Deferredtaxassets(net) 4.3 2,153.13 1,283.23

(e) Longtermloansandadvances 4.4 91,366.75 90,760.37

(f) Othernoncurrentassets 4.5 27.02 77.27

Sub-Total-(1) 113,854.46 120,983.11



64 65

BALANCE SHEET AS AT MARCH 31, 2018(`inlakhs)




2 Current Assets

(a) Inventories 5.1 553.33 35,240.18

(b) Tradereceivables 5.2 3.34 0.91

(c) Cashandbankbalances 5.3 4,776.00 2,919.79

(d) Shorttermloansandadvances 5.4 260,275.28 211,309.92

(e) Othercurrentassets 5.5 1,546.89 1,318.16

Sub-Total-(2) 267,154.84 250,788.96

TOTAL (1+2) 381,009.30 371,772.07

The accompanying notes from 1 to 30 form an integral part of these financial statements.

As per our report of even date For and on behalf of the Board of DirectorsForandonbehalfofFor Prakash Chandra Jain & Co.Chartered AccountantsFirmRegistrationNo.002438C

T. C. Venkat Subramanian Mrs. Thankom T. Mathew Director Director

DIN:00040526 DIN:00025326

Pratibha Sharma Pradeep Madhav Raghvendra KumarPartner Managing Director & CEO Deputy Managing DirectorMembershipNo.400755 DIN:00267422 DIN:08045355

Kamlesh Rathi Suparna SharmaChiefFinancialOfficer Company Secretary

Place:Mumbai Place:MumbaiDate:May2,2018 Date:May2,2018



66 67

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2018(`inlakhs)


For the year ended March 31, 2018


I Revenue from Operationsa) Interestincome 7.1 34,388.15 40,048.56b) Otherfinancialservices 7.2 922.14 870.67c) Profit/(Loss)onsaleofsecurities 7.3 (603.82) 541.88

34,706.47 41,461.11 II Other Income 8 1,260.13 8,395.85III Total Revenue (I+II) 35,966.60 49,856.96 IV Expenses

a) Employeebenefitexpenses 9 771.54 853.39b) Financecosts 10 17,889.16 21,347.57c) Depreciationandamortisationexpenses 4.1 152.67 148.26d) Otherexpenses 11 1,040.88 851.18e) LoanProvisionandWriteoff 12 5,525.89 9,435.68Total Expenses 25,380.14 32,636.08

V Profit before exceptional and extraordinary items and tax (III - IV)

10,586.46 17,220.88

VI Exceptionalitems 0.00 0.00 VII Profit before tax (V+VI) 10,586.46 17,220.88VIII Taxexpenses

i) Currenttax 4,250.00 1,400.00ii) Deferredtax (869.90) 1,829.61iii) Short/(Excess)provisionfortaxofearlieryear(s) (22.28) 0.00

IX Profit for the year (VII-VIII) 7,228.64 13,991.27 X Earning per equity share of par value of ` 100/- each

i) Basicearningspershare(EPS)in` 18 19.02 36.82ii) Dilutedearningspershare(EPS)in` 18 19.02 36.82




DIN:00040526 DIN:00025326






66 67

CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2018(`inlakhs)

Particulars For the year ended March 31, 2018


A. CASH FLOW FROM OPERATING ACTIVITIES

Net(Loss)/Profitbeforetaxandextraordinaryitems 10,586.46 17,220.88

Adjustmentsfor:

Depreciation 152.67 148.26

(Profit)/LossonsaleofProperty,plantandequipment 0.62 (0.13)

(Profit)/LossonsaleofInvestments (758.26) (554.31)

Interest and other income on investments 517.18 (1,604.84)

Dividend on investments 196.98 (7,658.34)

Amortisationofpremiumoninvestments (33.04) (95.50)

Provisionagainstloansandadvances 3,193.67 (5,764.32)

Write-offofBaddebts 2,332.22 15,200.00

5,602.04 (329.18)

Operating Profit / (loss) before working capital changes 16,188.50 16,891.70

Changes in Working Capital:

Increase/(Decrease)intradepayable 136.52 4.28

Increase/(Decrease)inlongtermprovisions 0.94 87.28

Increase/(Decrease)inshorttermprovisions (79.45) 16.46

Increase/(Decrease)inothercurrentliabilities 477.85 (1,678.00)

(Increase)/Decreaseinlongtermloanandadvances (6,054.24) 37,871.85

(Increase)/Decreaseinothernoncurrentassets 50.25 16.75

(Increase)/Decreaseinshorttermloanandadvances (48,965.36) (19,697.52)

(Increase)/Decreaseintradereceivables (2.43) 310.49

(Increase)/Decreaseininventories 34,686.85 4,162.90

(Increase)/Decreaseinothercurrentassets (228.73) 3,359.70

(19,977.80) 24,454.19

CASH FLOW FROM / (USED IN) OPERATING ACTIVITIES (3,789.30) 41,345.89

Less:TaxesPaid (4,121.36) (6,285.69)

NET CASH FLOW FROM / (USED IN) OPERATING ACTIVITIES (7,910.66) 35,060.20



68 69

CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2018(`inlakhs)



B. CASH FLOW FROM INVESTING ACTIVITIES

Fixeddepositwithbankshavingoriginalmaturityoverthreemonths 255.00 0.00

Purchaseoftangible/intangibleassets (45.67) (33.72)

Saleoftangible/intangibleassets 0.01 0.58

Purchaseofinvestments (466.48) (2,616.71)

Saleofinvestments 9,671.79 39,550.95

Dividend received (196.98) 7,658.34

Interest received (517.18) 1,604.84

NET CASH FLOW FROM / (USED IN) INVESTING ACTIVITIES 8,700.49 46,164.28

C. CASH FLOW FROM FINANCING ACTIVITIES

PaymentofDividend(includinginterimdividend&DDT) 0.00 (9,907.15)

Funds borrowed 1,321.38 (71,354.56)

NET CASH FLOW FROM / (USED IN) FINANCING ACTIVITIES 1,321.38 (81,261.71)

NET INCREASE / (DECREASE) IN CASH & CASH EQUIVALENTS (A+B+C) 2,111.21 (37.23)

Cash and Cash Equivalents at beginning of period (ReferNote5.3) 2,019.79 2,057.02

Cash and Cash Equivalensts at end of period (ReferNote5.3) 4,131.00 2,019.79

OtherBankbalances(FD'swithresidualmaturityoflessthan12months) 645.00 900.00

Cash and bank balances at end of period (ReferNote5.3) 4,776.00 2,919.79

Preparedasper"IndirectMethod"asprescribedbyAccountingStandard-3(revised)"CashFlowStatements"



DIN:00040526 DIN:00025326






68 69

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2018

(`inlakhs)NOTE NO. 1.1: SHARE CAPITAL

Particulars As at March 31, 2018


Authorised

5,000,000(PY:5,000,000)Equitysharesof`100/-each 50,000.00 50,000.00

50,000.00 50,000.00

Equity Share Capital

Issued, Subscribed & Fully paid up

38,000,000(PY-38,000,000)Equitysharesof`100/-eachfullypaidup 38,000.00 38,000.00

Total 38,000.00 38,000.00

*PYstandsforPreviousYearthroughoutthefinancialstatements

a) Details of Shareholding as at March 31, 2018

i) 11,383,781numberofequitysharesof`100/-each,areheldbyBankofIndia,thelargestshareholderofthecompany.

ii) Shareholdersholdingmorethan5%ofequitysharesofthecompanyareasunder.

Name of Shareholder As at March 31, 2018 As at March 31, 2017

No of Shares % of holding No of Shares % of holding

BankofIndia 11,383,781 29.96% 11,383,781 29.96%

StateBankofIndia 3,921,142 10.32% 2,812,415 7.40%

IDFCBankLimited 3,530,136 9.29% 3,530,136 9.29%

IDBIBankLimited 2,507,610 6.60% 2,507,610 6.60%

LifeInsuranceCorporationofIndia Limited

2,152,347 5.66% 1,505,400 3.96%

b) Details of shares bought back during past five years : Therehasbeennobuybackofsharesduringpastfiveyears

c) Reconciliation of the number of equity shares outstanding of ` 100/- each



Numberofsharesatthebeginningofyear 38,000,000 38,000,000

Add:Sharesissued 0 0

Less:Shareboughtback/forfeited 0 0

Numberofsharesattheendofyear 38,000,000 38,000,000

d) TheCompanyhasonlyoneclassofequityshareshavingparvalueof`100/-each.Eachshareholder iseligible foronevotepershareheld.Intheeventofliquidation,theequityshareholdersareeligibletoreceivetheremainingassetsoftheCompanyafterdistributionofallpreferentialamounts,inproportiontotheirshareholding.



70 71


(`inlakhs)NOTE NO. 1.2: RESERVES AND SURPLUS



Reserve created pursuant to Section 45 I C of RBI Act, 19341

Balanceatthebeginningoftheyear 36,815.00 34,015.00

Add:-Amounttransferredfromsurplusinstatementofprofitandloss 1,500.00 2,800.00

Balanceattheendoftheyear(I) 38,315.00 36,815.00

1Formspartoffreereserves,NetownedfundsandTierIcapital

Capital Redemption Reserve


Add:-Amounttransferredfromsurplusinstatementofprofitandloss 0.00 0.00

Balanceattheendoftheyear(II) 12,000.00 12,000.00

Surplus in Statement of Profit and Loss


Add:-Profitfortheyear(aftertax) 7,228.64 13,991.27

Profitavailableforappropriation 34,102.45 39,580.96

Less : Appropriations (Refer Note No. 29)

StatutoryReserve(asperSection45ICoftheRBIAct,1934) 1,500.00 2,800.00

Dividendonequityshares`Nil(PY`25/-pershare-Interimdividend) 0.00 9,500.00

Taxondividend 0.00 407.15

Netsurplusinstatementofprofitandloss(III) 32,602.45 26,873.81

Total (I+II+III) 82,917.45 75,688.81

NOTE NO. 2.1: LONG TERM BORROWINGS



a) Secured

- RedeemableNonConvertibleDebentures(NCD's) (Non-Currentportion)

59,000.00 65000.00

- LongtermloanfromBanks(Non-Currentportion) 39,929.00 38,333.33

b) Unsecured 0.00 0.00

Total 98,929.00 103,333.33



70 71


(`inlakhs)i) DetailsofoutstandingSecuredRedeemableNonConvertibleDebenture(NCD’s)of`10lakhseach(privatelyplaced)

Particulars Maturity Date As at March 31, 2018 As at March 31, 2017Current

MaturitiesNon Current

portionCurrent

MaturitiesNon Current

portion9.40%NCDs600(PY-600) October1,2018 6,000.00 0.00 0.00 6,000.009.67%NCDs3,000(PY-3,000) June25,2019 0.00 30,000.00 0.00 30,000.00 9.89%NCDs2,000(PY-2,000) July30,2019 0.00 20,000.00 0.00 20,000.009.40%NCDs900(PY-900) October1,2020 0.00 9,000.00 0.00 9,000.00

6,000.00 59,000.00 0.00 65,000.00

AboveNCDsareredeemableatparandsecuredbywayoffirstchargeonspecificreceivablesandregisteredmortgageof theCompany’simmovablepropertieswithanoverallassetcoverof125%.(ReferNoteNo22)

ii) DetailsofSecuredLongtermloanfromBanks

Name of the lending Bank

Rate of Interest

Repayment detailsAs at March 31, 2018 As at March 31, 2017

Current Maturities

Non Current portion

Current Maturities

Non Current portion

StateBankofIndia 8.60% (PY8.60%)

18QtrlyInstallmentsw.e.f.from30.07.17

11,112.00 30,554.00 6,666.67 33,333.33

HDFCBankLtd 8.75% (PY8.80%)

8QtrlyInstallmentsbeginningfrom07.04.18

2,500.00 2,500.00 0.00 5,000.00

UnionBank 8.40% (PYN.A.)

8QtrlyInstallmentsbeginningfrom29.09.18

4,125.00 6,875.00 0.00 0.00

17,737.00 39,929.00 6,666.67 38,333.33

AboveTermLoansaresecuredbywayoffirstchargeonspecificreceivableswithanoverallassetcoverof120%.(ReferNoteNo22).InterestrateforthesetermloansarelinkedtooneyearMarginalcostoffundbasedlendingrate(MCLR)applicableatthetimeofsanction/annualreview.

NOTE NO. 2.2: LONG TERM PROVISIONS



Foremployeebenefits(asperactuarialvaluation) 224.93 223.99Contingentprovisionagainststandardassets 315.01 326.45Foramortisationofpremiumondebtinvestments 0.00 33.04ForStampDutyonsecuritiestransactions(ReferNoteNo19) 62.64 62.64Others 26.37 26.37

Total 628.95 672.49

NOTE NO. 3.1: SHORT TERM BORROWINGS



I. Secured Borrowings a. Loanrepaybleondemand 0.00 0.00 b. Otherloansandadvances(CBLOborrowings) 0.00 6,200.00Total of Secured Borrowings - (I) 0.00 6,200.00



72 73


(`inlakhs)Particulars As at

March 31, 2018 As at

March 31, 2017II. Unsecured Borrowings a. Loanrepaybleondemand - frombanks2 26,635.40 55,280.02 - fromotherparties 0.00 0.00 b. Otherloansandadvances(CommercialPapers) 103,000.00 79,500.00Total of Unsecured Borrowings - (II) 129,635.40 134,780.02

Total (I + II) 129,635.40 140,980.022Includesloanof`Nil(PY`24,818.01lakhs)fromrelatedparty“BankofIndia”

Additional information to secured/unsecured borrowings:

i) Secured short term CBLO borrowings

Company has borrowed `Nil(PY-`6,200.00lakhsatweightedaveragecostof6.01%)underCBLO.Governmentsecuriteshavingfacevalueof`Nil(PY-`7,000.00lakhs)hasbeenkeptascollateralwithClearingCorporationofIndiaLimitedforCBLOborrowings.Companyhasalsoplaced 40.00lakhs(PY- 200.00lakhs)asCashmarginand 52.00Lakhs(PY- 10.00Lakhs)towardsDefaultFundwithClearingCorporationofIndiaLimitedforCBLOsegment.

ii) Unsecured short term bank borrowings

Bankcredit lines,Short term loansandoverdraftfacilitieshavebeenutilised fromvariousbanks forfinancingactivities,workingcapitalrequirementandassetliabilitymanagement.Thesecreditfacilitiesarerepayableaspertermsofsanctionorondemandandsubjecttoannualreview.BreakupoftheunsecuredbankborrowingsalongwithrateofinterestasonMarch31,2018areasunder.

Name of the lending Bank Rate of Interest Sanctioned Limit

Outstanding as at March 31, 2018

Maturity Date

Bank Of India 1YearMCLR*+10bps-8.40% 5,000.00 0.00 On Demand

i) Overdraft 1YearMCLR*-9.30% (5,000.00) (4,818.01) (OnDemand)

ii)CashCredit/Shorttermloan TenureMCLR+20bps 20,000.00 0.00

(1monthMCLR*-8.15%) (10,000.00) (24-04-2017)

(10,000.00) (29-04-2017)

Corporation Bank -Overdraft 1YearMCLR*-8.65% 20,000.00 6,701.43 On Demand

(1YearMCLR*+25bps-9.00%) (20,000.00) (19,469.50) (OnDemand)

Union Bank of India -Overdraft 1YearMCLR*-8.20% 10,000.00 9,947.37 On Demand

(1YearMCLR*-8.50%) (10,000.00) (9,977.61) (OnDemand)

Andhra Bank -Overdraft 1YearMCLR*-8.40% 10,000.00 9,986.60 On Demand

(1YearMCLR*-9.45%) (10,000.00) (1,014.90) (OnDemand)

*Marginalcostoffundbasedlendingrate(MCLR)applicableatthetimeofsanction/renewalforovderdraftandonthedateofavailmentincaseofshorttermloans

Detailsgiveninthebracketsindicatepreviousyeardata.



72 73

iii) Commercial Paper borrowings

CompanyraisesunsecuredshorttermfundsbyissuingCommercialPapers.TheoutstandingCPborrowingsasonMarch31,2018carries interest ratesranging from7.48%to8.23%(PY7.30%to7.90%). MaturitydetailsofallCPborrowingsoutstandingasonMarch31,2018isasunder.

Particulars Outstanding as at March 31, 2018

Outstanding as at March 31, 2017

Date of Maturity

Maturity Amount

Date of Maturity

Maturity Amount

CommercialPaper(issuedon15-Feb-2018) 17-May-18 7,500.00

CommercialPaper(issuedon19-Mar-2018) 18-May-18 5,000.00




CommercialPaper(issuedon26-Mar-2018) 01-Jun-18 20,000.00








CommercialPaper(issuedon27-Jan-2017) 23-Jun-17 15,000.00

Total Maturity Amount 103,000.00 79,500.00

iv) Duringtheyear,Companyhasnotdefaultedeitheronprincipalorinterestpaymentforanyoftheborrowings.

NOTE NO. 3.2: TRADE PAYABLES



TradePayable - Duetomicroenterprisesandsmallenterprises(ReferNoteNo.16) 0.00 0.00 - Otherthanmicroenterprisesandsmallenterprises i. to subsidiaries 0.00 0.00 ii. to others 169.92 33.75


(`inlakhs)



74 75


(`inlakhs)Particulars As at

March 31, 2018As at

March 31, 2017Others - Duetomicroenterprisesandsmallenterprises(ReferNoteNo.16) 0.00 0.00 - Otherthanmicroenterprisesandsmallenterprises i. to subsidiaries 0.00 0.00 ii. to others 0.90 0.55

Total 170.82 34.30

NOTE NO. 3.3: OTHER CURRENT LIABILITIESParticulars As at

March 31, 2018As at

March 31, 2017SecuredRedeemableNonConvertibleDebentures(NCD's)(Currentportion)(ReferNoteNo.22)

6,000.00 0.00

SecuredLongtermloanfromBanks(Currentportion)(ReferNoteNo.22) 17,737.00 6,666.67Interest accrued but not due on borrowings 4,630.14 4,531.75(includingrelatedpartyamountof`0.01(PY-`10.68lakhs)Statutory dues 24.63 2.09Margin money and other deposits 739.90 599.63Others - Advance Interest 216.65 0.00

Total 29,348.32 11,800.14

NOTE NO. 3.4: SHORT TERM PROVISIONSParticulars As at

March 31, 2018As at

March 31, 2017Provisionforemployeebenefits(asperactuarialvaluation) 98.18 68.38Provisionforperformancelinkedvariablepay 35.00 150.00Contingentprovisionagainststandardassets(ReferNoteNo.21) 1,240.43 1,044.60Provisionforamortisationofpremiumondebtinvestments 0.00 0.00Provisionforproposeddividend 0.00 0.00Provisionfordividenddistributiontax 0.00 0.00ProvisionforCSRExpenses 0.00 0.00ProvisionforlossonEquityFutures&Options 5.75 0.00

Total 1,379.36 1,262.98



74 75

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76 77

NOTE NO. 4.2: NON CURRENT INVESTMENTS

Particulars Face Value

Quantity As at March 31, 2018


I. Trade Investments a) Investment in Equity Shares (Unquoted and fully paid)

ClearingCorporationofIndiaLimited(PY5,000,000) `10/- 5,000,000 500.00 500.00500.00 500.00

b) Investment in Equity Shares of Subsidiaries (Unquoted and fully paid)STCIPrimaryDealerLimited `10/- 150,000,000 15,000.00 15,000.00(Whollyownedsubsidiarycompany)(PY:15,00,00,000)STCICommoditiesLimited4 `10/- 4,500,000 126.15 126.15(Whollyownedsubsidiarycompany)(PY:4,500,000)

15,126.15 15,126.15 4 Net of provision for permanent diminution in value of ` 260.79 lakhs (PY ` 260.79 lakh). STCI Commodities Limited has discontinued businessoperationswitheffectfromSeptember2011.Itisintheprocessofliquidatingitsassetsandsettleallliabilities.Theinvestmentamountreflectstheestimatedminimumnetrealisableamount.Total Trade Investments (I) 15,626.15 15,626.15

II. Non-Trade Investments a) Investment in Equity Shares (Quoted and fully paid)

SunPharmaceuticalIndustriesLimited(PY-Nil) `1/- 50,000 268.72 0.00AsianPaintsIndiaLimited(PY-10,000) `1/- - 0.00 91.82BajajAutoLimited(PY-7,500) `10/- - 0.00 208.83HDFCBankLimited(PY-10,000) `2/- - 0.00 120.03Larsen&ToubroLimited(PY-15,000) `2/- - 0.00 218.73StateBankofIndia(PY-75,000) `1/- - 0.00 182.58

Sub Total (a) 268.72 821.99

b) Investment in Government Securities (Quoted) 5

8.26%GS2027(PYFaceValue-`1,000lakhs) - 0.00 1,010.507.88%GS2030(PYFaceValue-`500lakhs) - 0.00 498.258.28%GS2032(PYFaceValue-`2,000lakhs) - 0.00 2,119.008.33%GS2032(PYFaceValue-`1,500lakhs) - 0.00 1,542.008.17%GS2044(PYFaceValue-`2,000lakhs) - 0.00 2,010.25

Sub Total (b) 0.00 7,180.00 5 Kept as collateral with CCIL for CBLOborrowing having face value of ` Nil (PY`7,000.00lakhs)

c) Investment in State Government Loan (SDL) (Quoted)8.38%TamilNaduSDL2026(PYFaceValue-`500lakhs) - 0.00 500.35

Sub Total (c) 0.00 500.35


(`inlakhs)



76 77

Particulars Face Value

Quantity As at March 31, 2018


d) Investment in Mutual Fund (Quoted) HDFCCharityFundforCancerCure-ArbitragePlan-DirectOption(PY-50,00,000) (100%DividendDonationoption)

`10/- 5,000,000 500.00 500.00

Sub Total (d) 500.00 500.00

e) Investment in Venture Capital Funds (Unquoted and partly paid)TataVentureCapitalFunds-classAunits (PY:25,00,00,000)

`1 250,000,000 1,783.29 1,996.72

Net amount paid per unit - `0.7133(PY`0.7987) afterconsideringredemptionof`0.18665 (PY`0.09218)perunitBalancecommittedCapitalcontribution`250.09lakhs(PY`272.82lakhs)

Sub Total (e) 1,783.29 1,996.72

Total Non Trade Investments (II)=(a+b+c+d+e) 2,552.01 10,999.06Total Non Current Investments (I + II) 18,178.16 26,625.21Aggregatebookvalueofquotedinvestments 768.72 9,002.34Aggregatemarketvalueofquotedinvestments 749.00 9,458.42Aggregateamountofunquotedinvestments (netofprovisionfordiminution)

17,409.44 17,622.87

Aggregateprovisionfordiminuitioninvalueofunquotedinvestments

260.79 260.79

Netdeclineof`21.17lakhs(PY`Nil)invalueofquotedequitysharesisconsideredtobeoftemporarynatureandaccordinglynotprovidedfor.

NOTE NO. 4.3: DEFERRED TAX ASSETS /(LIABILITIES) (NET)

Companyhasaccountedforthedeferredtaxassetsandliabilitiesinrespectofthetimingdifferencesthroughthestatementofprofitandloss.ThecomponentsoftheDeferredTax(Asset)/Liabilityareasunder.


Charged duringthe year


Deferred Tax Asset Provisionforleaveencashment&gratuity 111.82 10.64 101.18Provisionforpaymentofstampduty 21.68 0.00 21.68Other provisions 14.10 (49.25) 63.35Provisionfornon-performingassets(NPA) 2,252.62 894.87 1,357.75Total Deferred Tax Assets 2,400.22 856.26 1,543.96 Deferred Tax Liability DepreciationonProperty,plantandequipment 218.22 7.13 211.09AmortisationofBorrowingcost 28.87 (20.77) 49.64

Total Deferred Tax Liability 247.09 (13.64) 260.73

Deferred Tax Assets (Net) 2,153.13 869.90 1,283.23


(`inlakhs)



78 79

NOTE NO. 4.4: LONG TERM LOANS AND ADVANCES



I. Secured, Considered Good (ReferNoteNo.22)

a. Loan against shares 6,825.00 8,554.33

b. Corporateandotherloans 85,908.84 79,654.03

Gross long term loans and advances 6 92,733.84 88,208.36

Less:-Provisionfornonperformingassets 7,164.29 4,155.01

Net long term loans and advanes 85,569.55 84,053.35

6Allnonperformingloansandadvanceshavebeentreatedas non current assets.

II. Unsecured, Considered Good

a. Loan against shares 0.00 585.14

b. Advanceincomeandwealthtaxpayments(Net) 5,767.43 5,873.78

c. Security deposits 29.55 247.10

d. Others 0.22 1.00

5,797.20 6,707.02

Total (I + II) 91,366.75 90,760.37

NOTE NO. 4.5: OTHER NON CURRENT ASSETSParticulars As at

March 31, 2018As at

March 31, 2017

UnamortizedBorrowingcost 27.02 77.27

Total 27.02 77.27

NOTE NO. 5.1 : INVENTORIES (STOCK-IN-TRADE)



GovernmentSecurities-(Quoted) 40.44 40.49

EquityShares-(Quoted) 512.89 274.69

MutualFundUnits(Unquoted) 0.00 34,925.00

Total 553.33 35,240.18

i) Thecostforeachsecurityundertherelevantcategoryiscalculatedonweightedaveragebasis.Stock/currentinvestmentsarevaluedatlowerofcostormarketvalue,computedcategorywise.NetDepreciationineachcategoryisprovidedfor/chargedtotheProfitandLossaccount.Netappreciation,inthecategory,ifany,isignored.Depreciationinonecategoryis not set off against appreciation in another category. The net depreciation in value of securities held as inventory (stock-in-trade)asonMarch31,2018is`3.33Lakhs(PYNil)


(`inlakhs)



78 79


(`inlakhs)ii) Quantitativedetailsofstock,purchasesandsalesofsecuritiesduringtheyearendedMarch31,2018isasunder.

(No.inunits)Security -Category Op. Balance Purchase Sales/Transfer Cl. BalanceGovernmentSecurities 40,500 90,408,100 90,408,150 40,450MutualFundUnits 9,663,191 271,126,580 280,789,771 0.00 EquityShares 35,978 694,642 645,620 85,000

Total 9,739,669 362,229,322 371,843,541 125,450

FortheyearendedMarch31,2017(No.inunits)

Security -Category Op. Balance Purchase Sales/Transfer Cl. BalanceGovernmentSecurities 1,810,500 2,500,000 4,270,000 40,500MutualFundUnits 10,419,660 151,404,567 152,161,036 9,663,191EquityShares 14,500 2,519,693 2,498,215 35,978

Total 12,244,660 156,424,260 158,929,251 9,739,669

iii) Stock-in-Trade

Nomenclature As at March 31, 2018 As at March 31, 2017Face Value Book Value Face Value Book Value

Government Securities - (Quoted)7.46%GOI2017 0.00 0.00 0.05 0.058.49%AndharaSDL2020 40.40 40.40 40.40 40.40 6.13%GOI2028 0.05 0.04 0.05 0.04

40.44 40.49Less:-Netdepreciationinvalueofsecurities 0.00 0.00 Sub Total (a) 40.44 40.49

Equity Shares- (Quoted) Face Value in `

As at March 31, 2018 As at March 31, 2017Quantity Book Value Quantity Book Value

Asian Paints India Ltd 1/- 4,000 44.99 0 0.00 BhartiAirtelLimited 5/- 15,000 60.89 0 0.00 HousingDevelopmentFinanceCorporationLtd. 2/- 4,000 71.73 0 0.00 ITC Ltd. 1/- 30,000 79.43 0 0.00 Mahindra & Mahindra Ltd. 5/- 10,000 73.49 0 0.00 Tata Motors Limited 2/- 10,000 33.15 0 0.00 UPL Limited 2/- 10,000 73.40 0 0.00 UltraTechCementLimited 10/- 2,000 79.14 0 0.00 Avenue Supermarts Limited 10/- 0 0.00 18,478 55.25Grasim Industries Limited 2/- 0 0.00 2,500 27.43InfosysLimited 5/- 0 0.00 5,000 51.34Larsen & Toubro Limited 2/- 0 0.00 5,000 77.53RelianceIndustriesLtd 10/- 0 0.00 5,000 63.14

516.22 274.69Less:-Netdepreciationinvalueofsecurities 3.33 0.00 Sub Total (b) 512.89 274.69



80 81

Nomenclature As at March 31, 2018 As at March 31, 2017Units Book Value Units Book Value

Mutual Funds - (Unquoted)AxisLiquidFund-DirectGrowth(CF-DG) 0 0.00 138,704.44 2,500.00BarodaPioneerLiquidFund-PlanBGrowth 0 0.00 133,728.81 2,500.00DSPBlackrockLiquidityFund-DirectPlan-Growth 0 0.00 61,298.24 1,425.00HDFCCashManagementFund-SavingsPlan-Dir-GrowthOption 0 0.00 73,653.36 2,500.00ICICIPrudentialMoneyMarketFundOption-DirectPlan-Growth 0 0.00 1,111,313.12 2,500.00IDFCCashFund-DirectPlan-Growth 0 0.00 126,567.95 2,500.00InvescoIndiaLiquidFund-DirectPlanGrowth 0 0.00 111,723.02 2,500.00KotakLiquidScheme-PlanA-DirectPlanGrowth 0 0.00 75,853.73 2,500.00LICMFLiquidFund-GrowthPlan 0 0.00 84,796.30 2,500.00PeerlessLiquidFund-DirectPlanGrowth 0 0.00 55,860.99 1,000.00PrincipalCashManagementFund-DirectPlanGrowth 0 0.00 157,905.99 2,500.00RelianceLiquidFund-TreasuryPlan-DirectGrowthPlan-GrowthOption

0 0.00 63,045.64 2,500.00

SundaramMoneyFund-DirectPlan-Growth 0 0.00 7,291,457.04 2,500.00TataLiquidFund-DirectPlan-Growth 0 0.00 83,368.70 2,500.00UTI-LiquidFund-CashPlan-InstDirectPlanGrowth 0 0.00 93,913.57 2,500.00

0.00 34,925.00Less:-Netdepreciationinvalueofsecurities 0.00 0.00 Sub Total (c) 0.00 34,925.00

Total-(a+b+c) 553.33 35,240.18

NOTE NO. 5.2 : TRADE RECEIVABLES



Unsecured, Considered good

- Outstandingforaperiodexceedingsixmonthsfromthedatetheyaredueforpayment

0.00 0.00

- Others 3.34 0.91

Total 3.34 0.91

NOTE NO. 5.3: CASH AND BANK BALANCES



I. Cash and Cash Equivalents

- Balancewithbanks 4,131.00 2,019.73

- Cash on hand 0.00 0.06


(`inlakhs)



80 81


(`inlakhs)



II. Other Bank Balances (held as Margin Money)7

- Fixeddepositswithoriginalmaturityofmorethan 3monthsbutlessthanorequalto12months

300.00 0.00

- Fixeddepositswithoriginalmaturityofmorethan 12months

345.00 900.00

Total 4,776.00 2,919.79

i) 7Fixeddepositincludes(a) 395.00(PY-Nil)inthenameofNationalSecuritiesClearingCorporationLimitedtowardsmarginrequirementsforEquityFutures&Optionssegment,and(b)`250.00(PY-`250.00lakhs)withcustodian-HDFCBankformeetingmarginrequirementsforequitysegment.

ii) Fixeddepositof`Nil(PY`500.00lakhs)iskeptwithHDFCbankasmarginmoneyforsettlementofG-sectrades.

iii) Residualmaturityofabovefixeddepositsislessthanoneyear.

NOTE NO. 5.4: SHORT TERM LOANS AND ADVANCESParticulars As at

March 31, 2018As at

March 31, 2017

I. Secured, Considered Good (Refer Note No. 22)

a. Loan against shares 188,551.87 172,072.52

b. Corporateandotherloans 55,070.26 39,077.12

243,622.13 211,149.64


a. Corporateandotherloans 16,486.05 0.00

b. Margin Money / Deposits8 92.00 117.00

c. Otherloansandadvances 75.10 43.288IncludesMarginMoneyforequityderivativesNil(PY`117.00Lakhs) 16,653.15 160.28

Total (I+II) 260,275.28 211,309.92

NOTE NO. 5.6: OTHER CURRENT ASSETSParticulars As at

March 31, 2018As at

March 31, 2017

Accrued interest 107.18 116.15

Others 1,439.71 1,202.01

Total 1,546.89 1,318.16

NOTE NO. 6.1: CONTINGENT LIABILITIES (TO THE EXTENT NOT PROVIDED FOR)

Claims against the company not acknowledged as debt:

a) TheCompanyhadreceivedanoticefromtheCentralExciseauthoritiesinrespectoftheinteriorworkamountingto`20.80lakhcarriedoutbyacontractorattheerstwhileofficepremisesatKrishnaChambers,59,SirVithaldasThackerseyMarg,NewMarineLines,Mumbaiintheyear1997-98.TheCompanyhasbeenlegallyadvisedthatthereisnoliabilityundertheCentralExciseActandaccordinglynoprovisionhasbeenmadeagainstthisclaim.



82 83


(`inlakhs)b) NoprovisionhasbeenmadeinrespectoffollowingdisputedtaxduesunderIncomeTaxact1961.Thetotaltaxliabilityunder

dispute is `759.68lakhs(PY`780.48lakhs).

Disputed /Appeal Filed by Disputed tax liability Period to which dispute relates


IncomeTaxDepartment `76.39lakhs F.Y.1999-00 BombayHighCourtIncomeTaxDepartment `100.82lakhs F.Y.2000-01 BombayHighCourtIncomeTaxDepartment `248.08lakhs F.Y.2002-03 BombayHighCourtCompany `0.08lakhs F.Y.2007-08 AssessingOfficerCompany `3.54lakhs F.Y.2008-09 ACIT-TDS-3(2)Company `2.94lakhs F.Y.2009-10 ACIT-TDS-3(2)Company `10.72lakhs F.Y.2010-11 ACIT-TDS-3(2)Company `9.31lakhs F.Y.2010-11 AssessingOfficerCompany `249.95lakhs F.Y.2010-11 AssessingOfficerCompany `52.61lakhs F.Y.2011-12 AssessingOfficerCompany `5.24lakhs F.Y.2012-13 AssessingOfficer

c) Noprovisionhasbeenmadeforstampdutyonnon-governmentsecuritiestransactionsfortheperiodupto31stMarch2006.(ReferNoteNo.19)

NOTE NO. 6.2: CAPITAL AND OTHER COMMITMENTS:

BalancecommittedcapitalcontributiontoTataVentureCapitalFundasonMarch31,2017is`250.09lakhs(PY-`272.82lakhs)

NOTE NO. 7.1: INTEREST INCOME



Interest on Loans

- Loan against shares 18,652.39 22,069.86

- Corporateandotherloans 14,690.55 16,241.75

Interest / Discount on Investments

- Governmentsecurities9 884.68 1,170.61

- Corporate bonds10 0.00 11.87

- OthermoneymarketinstrumentsandCBLO11 13.80 340.66

Others 146.73 213.81

Total 34,388.15 40,048.569Interestincomefromgovernmentsecuritiesincludes 284.58lakhs(PY 1,122.34lakhs)onlongterminvestmentsingovernment securities.10InterestincomefromcorporatebondsincludesNil(PY`11.87lakhs)onlongterminvestmentsincorporatebonds.11includesNil(PY`331.84lakhs)frominvestmentsincommercialpapers.

NOTE NO. 7.2: OTHER FINANCIAL SERVICES



Upfront/ProcessingandManagementfees 717.05 752.27

Otherfeebasedincome 205.09 118.40

Total 922.14 870.67



82 83


(`inlakhs)

NOTE NO. 7.3: PROFIT/(LOSS) ON SALE OF SECURITIESParticulars For the year ended

March 31, 2018For the year ended

March 31, 2017

a) Governmentsecurities(includingSDL) (1,235.72) 68.96

b) Equityshares 302.41 229.35

c) Mutualfundunits 343.34 275.77

d) Derivatives (13.85) (32.20)

Total (603.82) 541.88

a) Government Securities (including SDL)

Sales(netofbrokerage) 88,293.28 4,362.48

Add:Stockattheendoftheyear 40.44 40.49

Less: (i) Purchases 89,528.95 2,521.28

(ii)Stockatthebeginningoftheyear 40.49 1,812.73

Profit/(Loss)onsaleofGovernmentSecurities (1,235.72) 68.96

b) Equity Shares

Sales(netofbrokerageandSTT) 3,277.93 10,607.08

Add:Stockattheendoftheyear 512.89 274.69

Less: (i) Purchases 3,213.72 10,562.07

(ii)Stockatthebeginningoftheyear 274.69 90.35

Profit/(Loss)onsaleofEquityShares 302.41 229.35

c) Mutual Fund Units

Sales(netofexitloadandSTT) 1,097,783.34 473,865.77

Add:Stockattheendoftheyear 0.00 34,925.00

Less: (i) Purchases 1,062,515.00 471,015.00

(ii) Stockatthebeginningoftheyear 34,925.00 37,500.00

Profit/(Loss)onsaleofMutualFundUnits 343.34 275.77

NOTE NO. 8: OTHER INCOME



Dividend income12 197.58 7,661.06

IncomefromVentureCapitalFund(NetofTaxes) 232.60 138.79

Netgain/(loss)onsaleofinvestments 758.26 554.31

Provisionsnolongerrequiredwrittenback 55.80 30.84

Miscellaneousincome 15.89 10.85

Total 1,260.13 8,395.8512Dividendincomeincludes`196.98lakhs(PY`158.34lakhs)beingdividendreceivedoninvestments(otherthansubsidiary).DividendreceviedfromsubsidiaryNil(PY-`7,500.00lakhs)



84 85


(`inlakhs)NOTE NO. 9: EMPLOYEE BENEFIT EXPENSES



Salaries,wages,allowances,etc. 667.90 780.44Contributiontoprovidentandotherfunds 61.59 42.68Staffwelfareexpenses 42.05 30.27

Total 771.54 853.39

NOTE NO. 10: FINANCE COSTSParticulars For the year ended


March 31, 2017a) Interest expenses Onbankcreditline/overdraft 4,871.69 2,174.92 On CP issuance 6,162.87 10,606.20 OnCBLOborrowing 441.87 533.63 On NCD issuance 6,289.00 7,897.46

17,765.43 21,212.21b) Other borrowing cost 123.73 135.36

Total (a+b) 17,889.16 21,347.57

NOTE NO. 11: OTHER EXPENSESParticulars For the year ended


March 31, 2017Advertisingexpenses 0.20 0.36Transactionandsettlementcharges 13.15 12.55CSRExpenditure(ReferNoteNo.26) 261.32 293.73Electricitycharges 30.97 26.09Informationservices 37.95 52.03Insurance charges 14.75 15.53Miscellaneousexpenses 1.55 1.43Officeexpenses 70.98 67.14PaymenttoAuditors:(ExcludingTaxes)-Asauditfees(includingauditfeesforconsolidatedaccounts) 7.50 7.50-Fortaxationmatters(TaxAuditfees) 1.50 1.50 - For other services 2.50 3.00-Forreimbursementofexpenses 0.00 0.15Postage,telephoneandtelegrams 15.29 18.74Printingandstationeryexpenses 8.69 7.99Professionalfees 325.27 243.11Ratesandtaxes 117.75 71.80Rent 22.27 18.58Repairsandmaintenance-building 45.98 26.40Repairs and maintenance - others 16.91 21.89Sittingfeestodirectors 22.07 22.84Travelling,conveyanceandcarexpenses 56.70 34.32Amortisationofpremiumondebtinvestments (33.04) (95.50)(Profit)/Lossonsaleofasset 0.62 0.00

Total 1,040.88 851.18



84 85


(`inlakhs)NOTE NO. 12: LOAN PROVISION AND WRITE OFFS



Contingentprovisionagainststandardassets(ReferNoteNo.21) 184.39 (92.31)

Provisionagainstnonperformingassets 3,009.28 (5,672.01)

BadDebtsWrittenoff 2,332.22 15,200.00

Total 5,525.89 9,435.68

NOTE NO. 13: SIGNIFICANT ACCOUNTING POLICIES

13.1 Basis of Preparation of Accounts

Thefinancialstatementshavebeenpreparedunderhistoricalcostconventiononaccrualbasis tocomply inallmaterialaspectswithapplicableaccountingprinciples in India, theAccountingStandards (AS)specifiedundersection133of theCompaniesAct2013,readwithRule7oftheCompanies(Accounts)Rules,2014,provisionsoftheCompaniesAct,2013(totheextentnotified)andReserveBankofIndiadirectionstoNonBankingFinanceCompanies(NBFCs).TheaccountingpolicieshavebeenconsistentlyappliedbytheCompanyandareconsistentwiththoseusedinthepreviousyear.Allassetsandliabilitieshavebeenclassifiedascurrentandnon-currentaspercompany’snormaloperatingcycleandothercriteriasetoutinthescheduleIIIoftheCompaniesAct,2013.Basedonthenatureofservicesandtheirrealizationincashandcashequivalents,thecompanyhasascertaineditsoperatingcycleas12monthsforthepurposeofcurrent/non-currentclassificationofassetsandliabilities.

13.2 Use of Estimates

The preparation of financial statements, in conformity with generally accepted accounting principles, requires themanagementtomakeestimateandassumptionsthataffectsthereportedamountofassets, liabilitiesanddisclosureofcontingentliabilitiesasatthedateoffinancialstatementsandrevenue&expensesforthereportingperiod.Actualresultscoulddifferfromthoseestimates.Anyrevisiontoaccountingestimatesisrecognisedprospectivelyincurrentandfutureperiods.

13.3 Revenue Recognition and Related Disclosures

(i) Treasury Bills, Commercial Papers, Certificate of Deposits and Zero Coupon Bonds

Thedifferencebetweentheacquisitioncostandtheredemptionvalueisapportionedontimebasisandrecognisedasincome.Thesameisincludedinthecarryingamountofthesesecuritiesandtheaggregateamountisregardedascostforthepurposeofvaluation.

(ii) Government Securities and Corporate Bonds

Income from Fixed Income securities is taken into account on accrual basis, provided that interest rate on theseinstrumentsispre-determinedandinterestisservicedregularlyandisnotinarrears.Theamountspaidandreceivedtowardsaccrued interestonthepurchasesandsalesofGovernmentsecuritiesandCorporateBondsarenettedoffattheyear-endandarerecognisedasincomeunder“InterestonGovernmentSecurities”and“InterestonCorporateBonds”respectively.

Accordingly,inrespectofthetransactionsingovernmentsecuritiesandcorporatebondsdealtwithonoutrightbasis,acquisitioncostandsaleproceedsarethecontractedpurchasepriceandsalepricerespectively.

(iii) Collateralized Borrowing and Lending Obligation (CBLO) Transactions

TransactionsforborrowingandlendingunderCBLOarerecordedatmaturityvalue.Thedifferencepaidorreceivedon redemption is treated as discount paidonCBLO in caseof borrowing anddiscount earnedonCBLO in caseoflending.Thedifferencebetween thediscountedvalueonborrowingdateor lendingdateas thecasemaybe,andtheredemptionvalueoftheinstrument,outstandingontheBalanceSheetdateisapportionedonthetimebasisandrecognizedasexpenseorincomerespectively.TheunamortiseddiscountonCBLOborrowingandlendingisdisclosedunderothercurrentassetsandothercurrentliabilitiesrespectively.



86 87

(iv) Pass Through Certificates (PTCs)

Thedifferencebetweentheacquisitioncost(asreducedbytheproportionateamountofinflows)andtheredemptionvalueisapportionedontimebasis(usingtheIRRatthetimeofacquisition)andrecognisedasaccruedincome.Thisaccruedincomeisaddedtotheacquisitioncost(asreducedbytheproportionateamountofinflows)oftherespectivePassThroughCertificates(PTCs)andthesumisregardedascost(bookvalue)forthepurposeofvaluationofstock-in-trade. Any income received on prepayments is added to the income.

(v) Equity Futures and Options

(a) TheinitialmarginandtheadditionalmarginpaidforenteringintoequityfuturesandoptionsaredisclosedundertheheadShortLoansandAdvancesintheBalanceSheetorundertheheadCashandBankBalances,ifgiveninformoffixeddeposits.

(b) “EquityOptionPremiumAccount”representsthepremiumpaidorreceivedforbuyingorsellingtheoptions,respectively.Thenetpremiumpaidorreceivedforbuyingorsellingtheoption,asthecasemaybe,isrecognisedasprofitorlossforallsettled/expiredcontracts.Similarly,ontheexpiryofthecontractsandonexercisingtheoptions,thedifferencebetweenthefinalsettlementpriceandthestrikepriceisrecognisedasprofitorloss.Gainsorlossesonstock/indexfuturesandoptioncontractsarerecognizedonsquaringupofpositionsoronexpiryofcontracts.

(c) Theopenpositionsaremarkedtomarketonthebalancesheetdateandnetlosses,ifany,areprovidedforwhilenetgains,ifany,arenotrecognized.

(d) Thedailymark-to-marketmarginpaidto/receivedinrespectofequityfuturestradesisdebitedorcreditedtothedailymark-to-marketequityfuturesaccountandthesameisdisclosedundertradereceivableortradepayable,as the case may be.

(e) “IncomeonEquityFuturesandOptions”representsthenetprofitorlossonsettled/expiredpositionsinequityindexandstockfuturesandoptionsafteradjustingbrokerageandothertransactioncosts.

(vi) Commodity Futures

(a) TheinitialmarginandtheadditionalmarginpaidonopenpositionsofcommodityfuturesaredisclosedundertheheadLoansandAdvancesintheBalanceSheet.

(b) Thedailymark-to-marketmarginpaidto/receivedfrominrespectofcommodity futurestrades isdebitedorcreditedtothedailymark-to-marketmargincommodity futuresaccountandthesame isdisclosedundertheheadtradereceivableortradepayable intheBalanceSheet,asthecasemaybe.Thebalance inthisaccountrepresentsnetunrealisedgainsorlossesonopenpositions.


(d) “IncomeonCommodity Futures” represents thenetprofitor losson settled/expiredpositions in commodityfuturesafteradjustingbrokerageandothertransactioncosts.

(vii) Thebrokerage,SecuritiesTransactionTax(STT)andothercostincurredinconnectionwiththeacquisitionofsecuritiesareaddedtothecostofacquisition.TheamountshownundersaleofsecuritiesisnetofbrokerageandSTT.

(viii) Dividendincomeisrecognisedwhentherighttoreceivethesameisestablished

(ix) Profit/Lossfromtradinginequitiesisrecognisedonthebasisofweightedaveragecostontradedates.Profit/Lossfromtradingingovernmentsecurities,corporatebonds,mutualfundunitsandothersecuritiesarerecognisedonthebasisofweightedaveragecostonsettlementdates.

(x) Interest income from loan transactions is recognisedonaccrualbasisbyapplying the interest rate implicit in suchcontractsexceptinthecaseofincomeonNonPerformingAssets(NPAs)whichisrecognisedonrealisation,intermsofRBIGuidelines.Processingfeesonloansisrecognisedasincomeonaccrualbasis.Feesandadditionalinterestincomeon delayed payments are recognized on accrual basis except in casewhere the samehas beenwaived off by thecompetentauthorities.




86 87


(xi) IncaseofsecuritiestransferredfromStock-in-TradetoInvestmentAccount,thesameisreckonedassaleatmarketprice.Resultantgainsorlossesarerecognisedintheprofitandlossaccountonthedateoftransfer.

(xii) Repo/ReverseRepotransactionsforcorporatebondsaretreatedasborrowingandlendingtransactions.Thedifferencebetweenthe1st legand2nd legof repoandreverserepotransaction isaccountedas interestexpense/incomeoncorporatebondsrepo,asthecasemaybe,overtheperiodofcontract.

(xiii) Interest Rate Swaps

GainsorlossesonInterestRateSwaps(IRS)areaccountedforonsettlementdatesasperthetermsofthecontract. Thenetinterestincome/expenseinrespectofthecontractsoutstandingasattheyearendisaccountedonaccrualbasisinrespectofcontractsenteredintoforhedgingpurposes.

(xiv) Interestincomeontaxrefundsisrecognisedonreceiptofassessmentorder.

13.4 Investments

IntermsofNonBankingFinancialCompaniesPrudentialNormsDirectionissuedbyRBI,longterminvestmentsarevaluedatcostcomprisingacquisitioncostandincidentalexpenseslesspermanentdiminutioninvalue,ifany.Provisionfordiminutioninthevalueof longterminvestments ismadetorecogniseadeclineotherthantemporary inthevalueof investments. Inthecaseofdebtinstrumentswherethecostofacquisitionismorethantheredemptionvalue,thedifferenceisamortizedovertheperiodtillmaturityandchargedtotheProfitandLossaccount.

Investmentsother than long-term investmentsareclassifiedascurrent investmentsandvaluedat costormarketvaluewhicheverisless.

13.5 Classification and Valuation of Stock-in-Trade/Current Investments

Companyprovidesnetdepreciationcategory-wiseforsecuritiesheldasstock-in-trade/currentinvestments.

Allthesecuritiesacquiredwiththeintentionoftradingareconsideredasstock-in-tradeandshownundercurrentassets.

(i) Allquotedsecurities(stock-in-trade)aregroupedintothefollowingcategories.

EquityShares

PreferenceShares

DebentureandBonds

Govt.Securities(includingTBills)

MutualFundUnits

Others

(ii) Stock/currentinvestmentsarevaluedatlowerofcostormarketvalue,computedcategorywise.

Thecostiscalculatedonweightedaveragebasis.MarketvalueforfixedincomesecuritiesisdeterminedbythepricesdeclaredbyFixedIncomeMoneyMarketandDerivativesAssociationofIndia(FIMMDA).Marketvalueforequitysharesisdeterminedbythepricesobtainedfromtherecognisedstockexchanges.

However, in linewith theRBI& FIMMDAguidelines, CertificatesofDeposit (CDs) andCommercial Papers (CPs) oflessthanoneyeartenorarevaluedatcost.Similarly,TreasuryBillsheldasstock-in-tradearevaluedatcarryingcost (asexplainedatNote.No.13.3(i)above).

(iii) UnquotedunitsofMutualFundarevaluedatNetAssetValue(NAV)orcostwhicheverislower.

(iv) Netdepreciationineachcategoryisprovidedfor/chargedtotheProfit&Lossaccount.Netappreciation,inthecategory,ifany,isignored.

(v) Depreciationinonecategoryisnotsetoffagainstappreciationinanothercategory.



88 89

13.6 Property, Plant & Equipment and Intangible Assets

Property, Plant & Equipment and Intangible Assets are initially recognised at cost and are stated at original cost lessaccumulateddepreciationandimpairment,ifany.Costincludesalldirectcostsattributabletoacquisition,installationandcommissioning.

DepreciationonProperty,Plant&EquipmentandIntangibleAssets(otherthanbuildingsandimprovementtoleaseholdproperty)isprovidedonthestraightlinemethodbasedontheestimatedusefullivesoftheassets.Buildingsaredepreciatedonwrittendownvaluemethodattheapplicableratesbasedonestimateduseful life.Depreciationon improvementstoleaseholdpropertyisprovidedonstraightlinemethodattheratesarrivedatonthebasisoftheprimaryleaseperiod.

Property,Plant&EquipmentandIntangibleAssetscostinglessthan`0.05lakh,areprovidedwith100%depreciationintheyearofpurchase.Depreciationisprovidedonproratabasisforassetspurchasedandsoldduringtheyear.Depreciationmethods,usefullivesandresidualvaluesarereviewedperiodically.

EffectiveApril1,2014,estimatedusefullifeofProperty,Plant&EquipmentandIntangibleAssetshasbeenrealignedasperScheduleIIoftheCompaniesAct,2013.Thedetailsofestimatedusefullifeassets(alignedwithScheduleIItotheCompaniesAct,2013)areasunder.

Description of Asset Type of Asset Estimated useful Life of Asset wef 01.04.2014

Building Tangible 60years

FurnitureandFixtures Tangible 10years

Computers - End User Devices Tangible 3 years

Computers–Servers&Network Tangible 6Years

ElectricalInstallations Tangible 10years

AirConditioners Tangible 10years

Vehicles Tangible 8years

OfficeEquipments Tangible 5years

ComputerSoftware Intangible 3 years

13.7 Taxes on Income

Provisionforincometaxcomprisesthecurrenttaxprovisionsandthenetchangeinthedeferredtaxassetorliabilityfortheyear.Currenttaxisdeterminedastheamountoftaxpayableinrespectofthetaxableincomefortheyear.Deferredtaxassetorliabilityreflectstheimpactofcurrentyeartimingdifferencesbetweentaxableincomeandtheaccountingincomefortheyearandthereversaloftimingdifferencesofearlieryears.Deferredtaxassetsarerecognisedonlytotheextentthereisareasonablecertaintyofsufficientfuturetaxableincomebeingavailableforitsrealisation.DeferredtaxassetsandliabilitiesaremeasuredusingthetaxratesandtaxlawsthathavebeenenactedorsubstantivelyenactedbytheBalanceSheetdate.TheeffectondeferredtaxassetsandliabilitiesofachangeintaxratesisrecognisedintheStatementofProfitandLossintheperiodofenactmentofthechange.

13.8 Securities Accepted as Pledge and Margin Money

Securitiesornon-cashcollateralacceptedfromaborrowerarenotrecognisedasanasset.MarginmoneyreceivedagainstmargincallisshownunderOtherCurrentLiabilities.

13.9 Operating Lease

Themonthlyrentpaymentsmadeforthepremisesacquiredonleasearechargedtostatementofprofitandlossonaccrualbasis.




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13.10 Employee Benefits

(i) Provident Fund

Contributionsasrequiredunderthestatute,madetotheProvidentFund(DefinedContributionPlan)arechargedtoprofitandlossaccount.ThereisnoobligationotherthanthemonthlycontributionpayabletotheRegionalProvidentFund Commissioner.

(ii) Gratuity

The liabilityof futuregratuitybenefits isbasedon theactuarial valuationobtainedatyearend.TheCompanyhascreatedatrustforfuturepaymentofgratuitieswhichisfundedthroughGratuitycumLifeAssuranceSchemeofLIC(DefinedBenefitPlan).

(iii) Other Benefits

Otherlongtermemployeebenefitscompriseleaveencashmentandareprovidedforbasedontheactuarialvaluation.Short term compensated absences are provided on undiscounted basis.

TheProjectedUnitCreditmethodhasbeenused todetermine the liabilityonaccountofgratuityaswell as leaveencashment.TheactuarialgainorlossisimmediatelyrecognisedintheProfitandLossAccount.

13.11 Borrowing Cost

BorrowingcostsareinterestandancillaryexpenditureincurredbytheCompanyinconnectionwiththeborrowingoffunds.InterestischargedtotheProfitandLossAccountonaccrualbasis.Ancillaryexpenditureincurredinconnectionwiththearrangementofborrowingisamortisedoverthetenureoftherespectiveborrowings.

13.12 Impairment of Assets

Anassetistreatedasimpairedwhenthecarryingcostofassetexceedsitsrecoverablevalue.Animpairmentloss,ifany,ischargedtotheProfitandLossAccounttotheextentcarryingamountofassetsexceedstheirrecoverableamountintheyearinwhichanassetisidentifiedasimpaired.

13.13 Earning Per Share (E.P.S.)

Thebasicearningspershareiscomputedbydividingthenetprofitaftertaxbyweightedaveragenumberofequitysharesoutstandingduringthereportingperiod.Dilutedearningsperequityshareiscomputedbydividingthenetprofitaftertaxbytheweightedaveragenumberofequitysharesanddilutivepotentialequitysharesoutstandingduringthereportingperiod.

13.14 Provisions and Contingencies

TheCompanycreatesaprovisionwhenthere isapresentobligationasaresultofpastevent thatprobably requiresanoutflowofresourcesandareliableestimatecanbemadeoftheobligation.Adisclosureofcontingentliabilityismadewhenthereis:(a)apossibleobligation(obligationisapossibleobligationif,basedontheevidenceavailable,itsexistenceatthebalancesheetdateisconsiderednotprobable)thatarisesfrompasteventsandtheexistenceofwhichwillbeconfirmedonlyby theoccurrenceornonoccurrenceofoneormoreuncertain futureeventsnotwhollywithin thecontrolof theenterprise(b)apresentobligationthatarisesfrompasteventsbutisnotrecognisedbecause(i)itisnotprobablethatanoutflowembodyingeconomicbenefitswillberequiredtosettletheobligation;or(ii)areliableestimateoftheamountoftheobligationcannotbemade.

13.15 Advances and Provision for Non Performing Assets (NPA) and Standard Assets (SA)

AdvancesareclassifiedasperNon-BankingFinancial(Non-DepositAcceptingorHolding)CompaniesPrudentialNormsinto“Performing”(StandardAssets-SA)and“Non-PerformingAdvances”(NPAs)andfurtherintosub-standard,doubtfulandlossassetsbasedontheperiodforwhichtherepaymentinstalmentorinteresthasremainedinarrears.ProvisionismadeinrespectofNPAandSA,subjecttotheminimumprovisionrequiredasperNBFCPrudentialNorms,orwhereadditionalspecificrisksareidentifiedbythemanagement,basedonsuchidentification.




90 91

NOTES FORMING PART OF FINANCIAL STATEMENTS

14. Related Party Transactions as per AS 18

List of related parties

i) Relatedpartywherecontrolexists:

a) STCIPrimaryDealerLimited–wholly-ownedsubsidiary

b) STCICommoditiesLimited–wholly-ownedsubsidiary

ii) Otherrelatedparties:

BankofIndia(BOI)byvirtueofitsshareholdingintheCompanybeinginexcessof20percent.

iii) KeyManagementPersonnel:-

a) MrPradeepMadhav–ManagingDirector&CEO

b) Mr.SurendraKBehera–DeputyManagingDirector(Upto28.03.2018)

c) Mr.KamleshRathi–ChiefFinancialOfficer

d) Ms.SuparnaSharma–CompanySecretary

TherewasnotransactionwithanyoftherelativesofKeyManagementPersonnelduringtheyear.

Allthetransactionsdetailedbelowareenteredintowiththepartiesinordinarycourseofbusiness.

(`inlakhs)

Nature of transaction For the year ended March 31, 2018


BOI Subsidiaries BOI Subsidiaries

Transactions during the year

SaleofGovt.Securities - 4,993.83 - -

Loansavailed13 156,976.67 - 139,534.93 -

RepaymentofLoanavailed13 181,821.37 - 124,692.48 -

MaximumLoan(availed)OutstandingDuring the Year

24,848.91 - 24,883.24 -

Interest Provided 127.33 - 202.92 -

DividendPaid(includinginterim) - - 2,845.95 -

DividendReceived(includinginterim) - - - 7,500.00

Otherfinancialpayments 27.73 1.88 16.10 -

Non-financialpayments - - 0.52 -

Reimbursementofdeposit - - - 0.05

Reimbursementofexpense(payment) - 3.78 - 8.04

Reimbursementofexpenses(receipt) - 11.08 - 7.18

Sittingfeesreceived - 2.55 - 0.60

Sittingfeespaid - - 1.20 -

Outstanding at the end of the year

Loanavailed - - 24,818.01 -

Interest accrued but not due 0.01 - 10.68 -

BalanceinCurrent/ODaccount 30.34 - 4.77 -

13Includesamountsavailedandrepaidfromoverdraftandshorttermloanaccounts.




90 91

Remuneration to Key Management Personnel: (ìnlakhs)

Sr. No. Particulars Year ended March 31, 2018

Year ended March 31, 2017

(i) MrPradeepMadhav(ManagingDirector&CEO From24.01.17)

91.66 16.61

(ii) Mr.SurendraKBehera (DyManagingDirectorFrom04.05.2016upto28.03.2018)

58.70 47.37

(iii) MrYogeshGaat(ManagingDirector&CEOupto24.12.2016)

- 87.98

(iv) Mr.KamleshRathi 37.56 31.72(v) Ms. Suparna Sharma 32.18 31.06

Remunerationincludessalary,perquisiteandprofitsinlieuofsalaryasdefinedunderSection17oftheIncomeTaxAct,1961andcompany’scontributiontoProvidentfund.

15. Assets taken on Lease as per AS 19

TheofficepremiseatDelhihasbeenacquiredunderoperatingleaseonpaymentofmonthlyrentals.

Futureminimumleaserentalrelatingtonon-cancellableoperatingleaseperiodareasunder. (ìnlakhs)



Notlaterthan1year 22.29 21.77Laterthan1yearbutnotlaterthan5years 25.41 47.70Laterthan5years Nil Nil

(ìnlakhs)



Paymentmadeduringtheyear(excludingtaxes) 21.77 18.58

Leaserentalcharges(includingcancellablelease)arerecognisedinthestatementofprofitandloss.

16. TheCompanyhasnotreceivedanyintimationfromitssuppliersregardingtheirstatusundertheMicro,SmallandMediumEnterprisesDevelopmentAct,2006.Accordingly,disclosures,ifany,relatingtoamountsunpaidasattheyearendtogetherwithinterestpaid/payablehasnotbeengiven.

17. Expenditure in Foreign Currency (ìnlakhs)

Sr. No. Particulars For the year ended March 31, 2018


1 OnTravel Nil Nil

2 On Interest Nil Nil

3 On Others Nil Nil

EarningsinForeignCurrency:Nil(PY–Nil)

18. Earning Per Share (E.P.S.) : The EPS calculation as per AS-20 is as under:



ProfitafterTax(ìnlakhs) 7,228.64 13,991.27Weightedaveragenumberofshares(FaceValue`100) 38,000,000 38,000,000EarningsPerSharefortheyear-Basic&Diluted(in`) 19.02 36.82




92 93

19. Nostampdutyhasbeenpaidonnon-governmentsecuritiestransactions inviewoftheon-goingdeliberationsbetweenGovernmentofMaharashtraandvariousrepresentativebodiesoftheparticipant’sviz.IBA,FIMMDA,PDAIandAMFI,ontheapplicabilityofstampdutyonnon-governmentsecurities’transactions.TheCompanyhassofarnotreceivedanyclaimforstampdutyfromtheStampOfficeinrespectofnon-governmentsecuritiestransactions.InthelightofanassurancegivenbytheGovernmentofMaharashtratotheIndianBanks’Association,theliabilityonnon-governmentsecuritiestransactionsfortheperiodupto31stMarch,2006hasnotbeenprovided.

Theprovisionason31stMarch,2018forstampdutyonnon-governmentsecuritiestransactionsstandsat`62.64 lakhs (PY ` 62.64 lakhs) which is for the period commencing 1st April 2006 onwards. The amount of provision as on 31stMarch,2018isincludedunderthehead“Longtermprovisions”inthebalancesheet.

20. ThedetailsofprovisionsasperAS29–Provisions,ContingentLiabilitiesandContingentAssetsisasunder.`inlakhs

Particulars Stamp Duty PLVP*

OpeningBalanceasatApril01,2017 62.64 150.00

Additions 0.00 35.00

Utilisation 0.00 94.20

Reversal 0.00 55.80

ClosingBalanceasatMarch31,2018 62.64 35.00

*PerformanceLinkedVariablePay

ProvisionforstampdutyismadeinrespectofstampdutypayableunderMaharashtraStampAct,(erstwhileBombayStampAct,1958)inrespectofdirectdealsforNonSLRtransactions.Provisionof`35.00lakhs(PY`150.00lakhs)ismadeduringtheyearforpaymentofperformancelinkedvariableandincentivepay.

21. Provision for Standard assets [email protected]%of the outstanding standard assets and accordingly standard assetprovisionof`184.39 lakhs (PYreversalof`92.31 lakhs)hasbeenmadeduringtheyear.Theadditionalstandardassetprovisioncontinuestobemaintainedat`200.00lakhs(PY`200.00lakhs).

22. StandardLoansandAdvancesof`158,187.91 lakhs (PY`142,717.54 lakhs)havebeencharged in favourofDebentureTrustee and Banks for outstanding Secured Redeemable Non-Convertible Debentures (NCD’s) of ` 65,000.00 lakhs (PY`65,000.00lakhs)andSecuredLongTermBankLoanof`57,666.00lakhs(PY-`45,000.00lakhs).

23. Theopeninterestinrespectofderivatives(equityfutures)contractsonthebalancesheetdateisasfollows:

Outstanding on Security Long/Short Series No.of units Book Price (in `) Settlement Price in (`)

31.03.2018 BajajFinance Long 26/04/2018 5,000 1789.70 1,778.45

31.03.2018 HindustanUnilever Long 26/04/2018 6,000 1342.75 1,339.50

31.03.2018 LICHousingFinance Long 26/04/2018 22,000 560.25 537.55

31.03.2017 AmbujaCements Long 27/04/2017 12,500 235.94 236.80

31.03.2017 ICICIBank Long 27/04/2017 12,500 278.55 278.45

24. Segment Reporting

(a) Business Segment :

The Company’smanagement has identified Lending Business and TreasuryOperations as two reportable segmentbasedonrisk,returnandtheregulatoryauthoritiesforreporting.




92 93

(b) Segment Revenues and Expenses :

The segmental revenues and expenses include all directly attributable to the respective segment. Administrativeexpenses,personnelcostsanddepreciationonfixedassetscannotbeidentifiedwithanyparticularsegmentandareconsideredasunallocable.

(c) Segment Assets and Liabilities :

Thesegmentalassetsand liabilities includealldirectlyattributable to the respectivesegment.AllotherassetsandliabilitiesnotattributabletoanyparticularsegmenthavebeengroupedunderUnallocatedAssetsandLiabilities.

(d) Geographical Segment:

TheCompanydoesnothavegeographicalsegmentinthecontextoftheAccountingStandard17onSegmentReportingissuedbytheInstituteofCharteredAccountantsofIndia.

Thedetailedsegmentalinformationisasunder. (`inlakhs)

SegmentInformation Treasury Lending Unallocated Total

Current Year

Previous Year

Current Year

Previous Year

Current Year

Previous Year

Current Year

Previous Year

REVENUES

ExternalSources/Clients 871.59 2,568.43 34,265.08 39,182.27 829.93 8,106.26 35,966.60 49,856.96

Inter-segment 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Total Revenue 871.59 2,568.43 34,265.08 39,182.27 829.93 8,106.26 35,966.60 49,856.96

Segment Result Profit/(Loss)

450.36 2,118.87 11,291.14 8,931.53 11,741.50 11,050.40

Unallocatedincomenetofexpenses

(1,002.37) 6,318.74

OperatingProfit/(Loss) 10,739.13 17,369.14

Depreciation (152.67) (148.26)

Profit before Tax & exceptional item

10,586.46 17,220.88

Exceptionalitems 0.00 0.00

Profitafterexceptionalitemsbeforetax

10,586.46 17,220.88

Provision/(Write-back)forDirectTaxesincludingDeferredTax

3,357.82 3,229.61

Profit/(Loss) after Tax 7,228.64 13,991.27

OTHER INFORMATION

Segment Assets 1,580.30 10,162.71 347,233.75 296,915.38 32,195.25 64,693.98 381,009.30 371,772.07

SegmentLiabilities 170.30 6,295.69 259,443.53 216,357.44 478.02 35,430.13 260,091.85 258,083.26




94 95

25. ThegratuityliabilityoftheCompany’semployeesiscoveredbyaGroupGratuitySchemeoftheLifeInsuranceCorporationofIndia.ThedisclosureasrequiredbyAccountingStandard-15“EmployeeBenefits”issuedbytheInstituteofCharteredAccountantsofIndiaisasunder.

Assumptions 2017-18 2016-17

Mortalityrate IALM(2006-08)Ult. IALM(2006-08)Ult.

Interest / Discount Rate 7.40% 6.69%

RateofreturnofPlanAssets 7.40% 7.00%

SalaryEscalation 10.00% 10.00%

(`inlakhs)

Particulars 2017-18 2016-17

Gratuity Leave Encashment


Changes in present value of obligation

OpeningDefinedBenefitObligation 94.82 237.82 67.04 148.53

Interest Cost 6.22 15.78 5.40 10.51

Current Service Cost 7.08 66.39 7.29 51.60

Transferinofliability 0.18 0.00 10.00 0.00

PastServiceCost(vestedbenefits) 28.45 0.00 0.00 0.00

Actuarial(Gains)/Losses (6.62) (77.65) 5.09 43.88

BenefitsPaid (3.69) (4.04) 0.00 (16.70)

Closing Defined Benefit Obligation 126.44 238.30 94.82 237.82

Changes in the fair value of plan assets

Fairvalueofplanassetsatthebeginningofyear 76.31 0.00 54.22 0.00

TransferInofFunds 0.18 0.00 10.00 0.00

Expectedreturnonplanassets 5.84 0.00 4.75 0.00

Contributions 8.59 4.04 7.36 16.70

Benefitspaid (3.69) (4.04) 0.00 (16.70)

ActuarialGains/(Losses) 0.03 0.00 (0.02) 0.00

Fair value of plan assets at the end of year 87.26 0.00 76.31 0.00

Fair value of plan assets at the beginning of year 76.31 0.00 54.22 0.00

TransferInofFunds 0.18 0.00 10.00 0.00

Actualreturnonplanassets 5.87 0.00 4.73 0.00

Contributions 8.59 4.04 7.36 16.70




94 95




Benefitspaid (3.69) (4.04) 0.00 (16.70)

Fairvalueofplanassetsattheendofyear 87.26 0.00 76.31 0.00

Funded status (39.18) (238.30) (18.51) (237.82)

Excess of Actual over estimate return on assets 0.03 0.00 (0.02) 0.00

Experience History

(Gain)/Lossonobligationduetochangeinassumption (7.09) (16.22) 7.72 1.53

Experience(Gain)/Lossonobligation 0.47 (61.43) (2.63) 42.35

ActuarialGain/(Loss)onplanassets 0.03 0.00 (0.02) 0.00

Actuarial Gain/ (loss) recognised

ActuarialGain/(Loss)fortheyear-obligation 6.62 77.65 (5.09) (43.88)

ActuarialGain/(Loss)fortheyear-planassets 0.03 0.00 (0.02) 0.00

Net Actuarial Gain/ (Loss) recognised for the year 6.65 77.65 (5.11) (43.88)

RecognisedPastServiceCost(vestedbenefits) 28.45 0.00 0.00 0.00

Amount to be recognised in Balance Sheet

Presentvalueofobligationasattheendofyear 126.44 238.30 94.82 237.82

Fairvalueofplanassetsasattheendofyear 87.26 0.00 76.31 0.00

Funded status (39.18) (238.30) (18.51) (237.82)

Net Asset recognised - Prepaid / (provisions) (39.18) (238.30) (18.51) (237.82)

Expenses Recognised in Profit and Loss account

Current Service Cost 7.08 66.39 7.29 51.60

Interest Cost 6.22 15.78 5.40 10.51

PastServiceCost(vestedbenefits) 28.45 0.00 0.00 0.00

NetActuarialloss/(gain)recognisedintheyear (6.65) (77.65) 5.11 43.88

Expectedreturnonplanassets (5.84) 0.00 (4.75) 0.00

Expenses recognised in Profit and Loss Account 29.26 4.52 13.05 105.99


(`inlakhs)



96 97




Movement in Liability recongised in Balance Sheet

OpeningNetLiability 18.51 237.82 12.82 148.53

Expensesasabove 29.26 4.52 13.05 105.99

Contributionpaid (8.59) (4.04) (7.36) (16.70)

Closing Net Liability 39.18 238.30 18.51 237.82

Experience Adjustment – Gratuity

Particulars 31.03.2018 31.03.2017 31.03.2016 31.03.2015 31.03.2014

DefinedBenefitObligation 126.44 94.82 67.04 56.78 50.14

Planassets 87.26 76.31 54.22 42.08 39.72

Surplus/(Deficit) (39.18) (18.51) (12.82) (14.70) (10.42)

Experienceadj.onplanliabilities (0.47) 2.63 (2.12) 2.53 4.85

Experienceadj.onplanassets 0.03 (0.02) 0.10 0.46 0.28

Provisionof`9.58lakhs(Previousyear`8.75lakhs)hasbeenmadeforundiscountedliabilityonaccountofshorttermcompensatedabsences.Totalprovisionason31stMarch,2018forshorttermcompensatedabsencesisof`45.63lakhs(Previousyear`36.04lakhs).

26. CSR Expenses

During the year, Company has spent `261.32lakhs(PY`293.73lakhs)towardsCSRactivities,asrequiredtobespentintermsofSection135oftheCompaniesAct,2013andCompanies(CorporateSocialResponsibilitypolicy)Rules,2014.DetailsofCSRexpensesfortheyearareasunder. (ìnlakhs)

No. Particulars 2017-18 2016-17

1 Construction/acquisitionofanyasset Nil Nil

2 ContributiontoPrimeMinistersReliefFund 155.68 240.93

3 ContributiontoothercharitableorganisationseligibleforCSR purpose

105.64 52.80

Total CSR Expenses 261.32 293.73

Amount Pending to be Spent Nil Nil

27. Disclosures in terms of the provisions of Non-Banking Financial Companies, Prudential Norms :

a) Capital to Risk Weighted Asset Ratio (ìnlakhs)

Sr. No. Particulars As at March 31, 2018


1 CRAR(%) 31.71% 31.10%

2 CRAR–TierICapital(%) 31.28% 30.71%

3 CRAR–TierIICapital(%) 0.43% 0.39%

4 AmountofsubordinateddebtraisedasTier-IIcapital Nil Nil

5 AmountraisedbyissueofPerpetualDebtInstruments Nil Nil


(ìnlakhs)



96 97

b) Investments (ìnlakhs)

Sr. No.



1 Value of Investments :(i) GrossValueofInvestments

(a)InIndia 18,992.28 62,126.18(b)OutsideIndia Nil Nil

(ii) ProvisionsforDepreciation (a)InIndia 260.79 260.79(b)OutsideIndia Nil Nil

(iii) NetValueofInvestments (a)InIndia 18,731.49 61,865.39 (b)OutsideIndia Nil Nil

2 Movement of Provisions held towards depreciation on Investments : (i) OpeningBalance 260.79 260.79 (ii) Add:Provisionsmadeduringtheyear 0.00 0.00 (iii) Less:Write-off/write-backofexcessprovisions

during the year0.00 0.00

(iv) Closingbalance 260.79 260.79

c) Derivatives

i) Forward Rate Agreements / Interest Rate Swap :

TheCompanyhasnotenteredintoanyforwardrateagreementorinterestrateswapduringtheyear.TherearenooutstandingpositionsinrespectofanyforwardrateagreementorinterestrateswapasonMarch31,2018.

(ìnlakhs)

Sr. No.



(i) Thenotionalprincipalofswapagreements Nil Nil(ii) Losses whichwould be incurred if counter parties

failedtofulfiltheirobligationsundertheagreementsNil Nil

(iii) CollateralrequiredbytheNBFCuponenteringintoswaps Nil Nil(iv) Concentrationofcreditriskarisingfromtheswaps Nil Nil(v) Thefairvalueoftheswapbook Nil Nil

ii) Exchange Traded Interest Rate (IR) Derivatives :

The Company has not entered into any Exchange Traded Interest Rate (IR) Derivatives during the year and there are no outstanding positions in respect of any Exchange Traded Interest Rate (IR) Derivatives as on 31stMarch,2018. (ìnlakhs)

Sr. No.



(i) Notional principal amount of exchange traded IRderivativesundertakenduringtheyear

Nil Nil

(ii) Notional principal amount of exchange traded IRderivativesoutstanding

Nil Nil

(iii) Notional principal amount of exchange traded IRderivativesoutstandingandnot“highlyeffective”

Nil Nil

(iv) Mark-to-Market value of exchange traded IRderivativesoutstandingandnot“highlyeffective”

Nil Nil




98 99

iii) Qualitative Disclosure

Duringtheyear,Companyhasnotenteredintoanyderivativetransactions,exceptequityderivatives.Theequityderivativestransactionsenteredduringtheyearareprimarilyforthepurposeoftrading.

RiskmanagementatoperatinglevelhasbeendelegatedtoALCO&RiskManagementcommitteeandInvestmentCommittee of senior executives of the company. Treasury, Investment and Risk policy of the Company laysdowntheriskmanagementframeworkforderivativestrading.ThepolicyalsoprescribesRiskIdentification,itsmeasurement,monitoringandriskmitigants.

iv) Quantitative Disclosure

The company has not entered into any currency or interest rate derivative transactions during the year.There are no outstanding positions in respect of any CurrencyDerivatives or Interest RateDerivatives as on 31stMarch,2018.

Sr. No. Particular Currency Derivatives

Interest Rate Derivatives

(i) Derivatives(NotionalPrincipalAmount)

For hedging Nil Nil

(ii) MarkedtoMarketPositions

a)Asset(+) Nil Nil

b)Liability(-) Nil Nil

(iii) CreditExposure Nil Nil

(iv) UnhedgedExposure Nil Nil

d) Disclosure relating to Securitisation :

i) Duringtheyear,Companyhasnotsecuritizedanyof itsassetsanddoesnothaveanyoutstandingposition inrespectthereofasonMarch31,2018.

ii) CompanyhasnotsoldanyofitsfinancialassetstoSecuritisation/ReconstructionCompanyforAssetReconstruction.

iii) Companyhasnotundertakenanyassignmenttransactionduringtheyear.

iv) Companyhasneitherpurchasednorsoldanynon-performingfinancialassetsduringtheyearanddoesnothaveanyoutstandingpositioninrespectthereofasonMarch31,2018.

e) Asset Liability Management Maturity pattern of certain items of assets and liabilities

Upto 30/31 days

Over 1 month upto 2 month

Over 2 month

upto 3 month

Over 3 month

upto 6 month

Over 6 month

to 1 year

Over 1 year upto 3 years

Over 3 years Upto

5 years

Over 5 Years

Total


Assets

Deposits Nil Nil Nil Nil Nil Nil Nil Nil Nil

Advances 11,899.14 11,406.70 27,080.38 95,806.94 113,915.02 61,769.80 25,594.61 5,369.43 352,842.02

Investments 553.33 Nil Nil Nil Nil 768.73 Nil 17,409.43 18,731.49

Liabilities

BankBorrowings 3,403.00 Nil Nil 4,778.00 36,191.40 31,599.00 8,330.00 Nil 84,301.40

Market borrowings Nil 40,500.00 62,500.00 Nil 6,000.00 59,000.00 Nil Nil 168,000.00


(`inlakhs)



98 99

Foreign Currency :

Foreign Currency Assets

Nil Nil Nil Nil Nil Nil Nil Nil Nil

Foreign Currency Liabilities



Assets

Deposits Nil Nil Nil Nil Nil Nil Nil Nil Nil

Advances 4,255.21 7,102.13 31,751.31 84,090.16 83,950.83 67,749.21 18,647.21 2,397.08 299,943.14

Investments 35,240.18 Nil Nil Nil Nil 821.99 500.00 25,303.22 61,865.39

Liabilities

BankBorrowings 20,000.00 Nil Nil 2,222.22 39,724.46 22,777.78 15,555.56 Nil 100,280.02

Market borrowings 6,200.00 51,500.00 28,000.00 Nil Nil 56,000.00 9,000.00 Nil 150,700.00

Foreign Currency :

Foreign Currency Assets


Foreign Currency Liabilities


f) Exposures

i) Exposure to Real Estate Sector : (`inlakhs)

Category As at March 31, 2018


Direct Exposure*

1 Residential Mortgages

Lendingfullysecuredbymortgagesonresidentialpropertythatisorwillbeoccupiedbytheborrowerorthatisrented;

21,000.00 5,946.29

2 Commercial Real Estate

Lending secured by mortgages on commercial real estates(office buildings, retail space, multipurpose commercialpremises, multi-family residential buildings, multi-tenantedcommercial premises, industrial orwarehouse space, hotels,landacquisition,developmentandconstructionetc.)includingnon-fundbased(NFB)limits

61,522.52 89,494.99

3 Investments inMortgage Backed Securities (MBS) and othersecuritisedexposures

a Residential Nil Nil

b CommercialRealEstate Nil Nil

Indirect Exposure

Fundbasedandnon-fundbasedexposuresonNationalHousingBank(NHB)andHousingFinanceCompanies(HFCs).

Nil Nil

*Directexposuretorealestatesectoristakenasexposuretofinanceacquisition/constructionofcommercial/residentialrealestateandwheretherepaymentisexpectedtobemadeoutoftherealisationoffinancedrealestateassets.CommercialRealEstateexpsourealsoincludesadvancestorealestateentitiesagainstthecollateralofequityshares.


(`inlakhs)



100 101

ii) Exposure to Capital Market



1 Direct investment in equity shares, convertible bonds,convertible debentures and units of equity-oriented mutualfundsthecorpusofwhichisnotexclusivelyinvestedincorporatedebt:

16,907.76 17,222.82

2 Advances against shares / bonds / debentures or other securities or on clean basis to individuals for investment inshares(includingIPOs/ESOPs),convertiblebonds,convertibledebentures,andunitsofequity-orientedmutualfunds:

2,000.00 6,204.33

3 Advances for any other purposewhere shares or convertiblebonds or convertible debentures or units of equity orientedmutualfundsaretakenasprimarysecurity

193,376.87 175,007.66

4 Advancesforanyotherpurposestotheextentsecuredbythecollateralsecurityofsharesorconvertiblebondsorconvertibledebenturesorunitsofequityorientedmutualfundsiewherethe primary security other than shares / convertible bonds /convertibledebentures/unitsofequityorientedmutualfundsdoesnotfullycovertheadvances:

Nil Nil

5 Secured and unsecured advances to stockbrokers and guarantees issuedonbehalfofstockbrokersandmarketmakers:

Nil Nil

6 Loans sanctioned to corporate against the security of shares/ bonds / debentures or other securities or on clean basisfor meeting promoter’s contribution to the equity of newcompaniesinanticipationofraisingresources:

Nil Nil

7 Bridge loans to companies against expected equity flows /issues;

Nil Nil

8 All exposures to venture capital funds (both registered andunregistered)

1,783.29 1,996.72

Total Exposure to Capital Market 214,067.92 200,431.53

iii) Detailsoffinancingofparentcompanyproduct–NotApplicable

iv) CompanyhasnotexceededprudentialSingleBorrowerLimit(SGL)/GroupBorrowerLimit(GBL)duringtheyear.

v) UnsecuredAdvances–`16,486.05lakhs(PY-`585.14lakhs)

g) Miscellaneous

i) Registrationobtainedfromotherfinancialsectorregulators–Nil

ii) DisclosureofPenaltiesimposedbyRBIandotherregulator:Nil(PY–Nil)


(`inlakhs)



100 101

iii) DetailsofCompany’sCreditRatingareasunder.

Rating Agencies

Rating programme31.03.2018 31.03.2017

Rating Assigned

Rating AmountRating

AssignedRating Amount

CRISIL Short Term CrisilA1+ 200,000.00 CrisilA1+ 200,000.00

ICRA Short Term CrisilA1+ 200,000.00 CrisilA1+ 150,000.00

ICRA LongTermBankLines ICRA AA- 20,000.00 ICRA AA- 20,000.00

ICRA LongTermDebt(NCD) ICRA AA- 100,000.0014 ICRA AA- 120,000.0014

CARE LongTermDebt(NCD) CARE AA- 100,000.0014 CARE AA- 120,000.0014

14Includesratingof`Nil(PY-`20,000.00lakhs)forNCD’smatured.

iv) Informationviz.,area,countryofoperationandjointventurepartnerswithregardtoJointVenturesandOverseasSubsidiaries:

CompanyoperatesprimarilythroughitsHeadOfficeinMumbaiandhasabranchofficeinNewDelhi.Companydoesnothaveanyoverseaspresenceeither through itsbranchesorbywayofany jointventureoroverseassubsidiaries.

h) Additional Disclosures

i) Information on all provisions and contingencies booked as expenditure in Profit and Loss Account:(ìnlakhs)


ProvisionforamortisationonInvestment (33.04) (95.50)

ProvisiontowardsNPA(Net) 3,009.28 (5,672.01)

ProvisionforStandardAssets 184.39 (92.31)

ProvisionmadetowardsIncomeTax(incl.deferredtax) 3,357.82 3,229.61

OtherProvision(employeerelated) 35.00 150.00

ii) Draw Down from Reserves – Nil

iii) Concentration of Advances, Exposures and NPAs

a) Concentration of Advances/Exposures (ìnlakhs)


TotalAdvances/exposuretotwentylargestborrowers/customers

188,751.39 163,063.06

%ofAdvances/exposuretotwentylargestborrowerstototaladvances/exp.

53.49% 54.36%

b) Concentration of NPAs (ìnlakhs)


TotalExposuretotopfourNPAaccounts 13,289.44 5,904.33


(ìnlakhs)



102 103

c) Sector-wise NPAs

Sr No. Sector Percentage of NPAs to Total Advances in that sector

2017-18 2016-171 Agriculture&Alliedactivities - -2 MSME - -3 Corporate borrowers (includes LLP and partnership

firms/Trusts)4.00% 1.02%

4 Services - -5 Unsecuredpersonalloans - -6 Autoloans - -7 Otherpersonalloans - -8 Others(IndividualBorrowers) - 55.26%

iv) Movement of NPAs


(i) Net NPAs to Net Advances (%) 1.97% 1.02%

(ii) Movement of NPAs (Gross)

(a) Openingbalance 7,182.22 17,097.08

(b) Additionsduringtheyear 11,589.44 5,506.78

(c) Reductionsduringtheyear(includingwriteoff) 47,89.47 15,421.64

(d) Closingbalance 13,982.19 7,182.22

(iii) Movement of NPAs (Net)


(b) Additionsduringtheyear 5,312.62 2,633.45

(c) Reductionsduringtheyear(includingwriteoff) 1,521.93 6,876.30


(iv) Movement of provisions for NPAs (excluding provisions on standard assets)


(b) provisions during the year 6,276.82 2,873.33

(c) Write-off/write-backofexcessprovisions 3,267.54 8,545.34


v) Company does not have any overseas assets.

vi) CompanydoesnothaveanyoffbalancesheetsponsoredSPV’s.

i) Customer Complaints


(a) No.ofcomplaintspendingatthebeginningoftheyear Nil Nil

(b) No.ofcomplaintsreceivedduringtheyear 1 1

(c) No.ofcomplaintsredressedduringtheyear 1 1

(d) No.ofcomplaintspendingattheendoftheyear Nil Nil


(`inlakhs)



102 103

j) Disclosure of Restructured Accounts

Sr Type of Restructuring OthersAsset Classification Standard Sub-

StandardDoubtful Loss Total

Details1 Restructured Loan Account as on

01/04/2017No.ofborrowers Nil 1 Nil Nil 1Amount outstanding Nil 3,000.00 Nil Nil 3,000.00Provisions Nil 1,350.00 Nil Nil 1350.00

2 Fresh restructuring during the year No.ofborrowers Nil Nil Nil Nil NilAmount outstanding Nil Nil Nil Nil NilProvisionsheld Nil Nil Nil Nil Nil

3 Upgradationtorestructuredstandard category during the year

No.ofborrowers Nil Nil Nil Nil NilAmount outstanding Nil Nil Nil Nil NilProvisions Nil Nil Nil Nil Nil

4 Restructured standard advances which cease to attract higherprovisioning and / or additionalriskweight at the end of the yearand hence need not be shown as restructured standard advances at thebeginningofthenextyear


5 Downgradationsofrestructuredaccounts during the year


6 Write–offsofrestructuredaccounts during the year

No.ofborrowers Nil 1 Nil Nil 1Amount outstanding Nil 1,747.0915 Nil Nil 1747.0915

Provisions Nil 1,747.09 Nil Nil 1747.097 Restructured Loan Account

ason31/03/2018No.ofborrowers Nil Nil Nil Nil NilAmount outstanding Nil Nil Nil Nil NilProvisionsheld Nil Nil Nil Nil Nil

Note:Sincethedisclosureofrestructuredadvanceaccountpertainstosection“Others”,thefirsttwosections,namely,“UnderCDRMechanism”and“UnderSMEDebtRestructuringMechanism”asperformatprescribedintheguidelinesarenotincludedabove.

15Amountrepresentnetamountwrittenoff(afterrecoveryof`1,252.91lakhsduringtheyear).

k) Other Disclosure :

Sr No.

ParticularsAmount Outstanding Amount Overdue

As at 31.3.2018

As at 31.3.2017

As at 31.3.2018

As at 31.3.2017

Liabilities Side

1 LoansandadvancesavailedbytheNBFCinclusive

ofinterestaccruedthereonbutnotpaid:

(a) Debenture

Secured 69,256.19 69,256.19 Nil Nil

Unsecured Nil Nil Nil Nil

(otherthanfallingwithinthemeaningofPublicdeposit)


(`inlakhs)



104 105

Sr No.

ParticularsAmount Outstanding Amount Overdue

As at 31.3.2018

As at 31.3.2017

As at 31.3.2018

As at 31.3.2017

(b) DeferredCredit Nil Nil Nil Nil

(c) Term Loans 58,039.94 65,273.81 Nil Nil

(d) InterCorporateLoansandBorrowing Nil Nil Nil Nil

(e) CommercialPaper 103,000.00 79,500.00 Nil Nil

(f) OthersLoans(WorkingCapital DemandLoan/CBLO)

26,635.41 41,481.76 Nil Nil

Assets SideAmount Outstanding 2017-18 (` in lakhs)

Amount Outstanding 2016-17 (` in lakhs)

2 Break-up of Loans and Advances including bills

receivables (other than those included in (4) below): (forfinancingbusinessofthecompany)

(a) Secured(Gross) 336,355.97 299,358.00

(b) Unsecured 16,486.05 585.14

3 Break up Leased Assets and stock on hire and and other assets counting towards AFC activities

(i) Leaseassetsincludingleaserentalsundersundry debtors

(a) FinanceLease Nil Nil

(b) OperatingLease Nil Nil

(ii) Stockonhireincludinghirechargesundersundry debtor

(a) Assetsonhire Nil Nil

(b) RepossessedAssets Nil Nil

(iii) OtherloanscountingtowardsAFCactivities (a) loanswhereassetshavebeenrepossessed Nil Nil (b) loansotherthan(a)above Nil Nil

4 Break-up of Investments

Current Investment

1. Quoted

(i) Shares:(a)Equity 512.89 274.69

(b)Preference Nil Nil

(ii) DebenturesandBonds Nil Nil

(iii) Unitsofmutualfunds Nil Nil

(iv) GovernmentSecurities 40.44 40.49

(v) others Nil Nil2. Unquoted (i) Shares:(a)Equity Nil Nil

(b)Preference Nil Nil(ii) DebenturesandBonds Nil Nil


(`inlakhs)



104 105

Assets SideAmount Outstanding 2017-18 (` in lakhs)

Amount Outstanding 2016-17 (` in lakhs)

(iii) Unitsofmutualfunds Nil 34,925.00

(iv) GovernmentSecurities Nil Nil

(v) others(Commercialpapers) Nil Nil

Long Term Investments

1. Quoted

(i) Shares:(a)Equity 268.72 821.99



(iii) Unitsofmutualfunds 500.00 500.00

(iv) GovernmentSecurities Nil 7,680.35

(v) others(Pleasespecify) Nil Nil

2. Unquoted

(i) Shares:(a)Equity 15,626.15 15,626.15



(iii) Unitsofmutualfunds Nil Nil

(iv) GovernmentSecurities Nil Nil

(v) others(VentureCapitalFund) 1,783.29 1,996.72

Total 18,731.49 61,865.39

5 Borrower group-wise classification of assets financed as in (2) and (3) above

Category Amount Net of Provisions

Secured Unsecured Total

1. RelatedParties

(a) Subsidiaries Nil Nil Nil

(b) Companiesinthesamegroup Nil Nil Nil

(c) otherrelatedparties Nil Nil Nil

2. Otherthanrelatedparties 329,191.68 16,486.05 345,677.73

Total 329,191.68 16,486.05 345,677.73

6 Investor group-wise classification of all Investments (current & long-term) in shares and securities (quoted & unquoted)

Category Market Value Book Value2017-18 2016-17 2017-18 2016-17

1. RelatedParties

(a) Subsidiaries 15,126.15 15,126.15 15,126.15 15,126.15(b) Companiesinthesamegroup Nil Nil Nil Nil(c) otherrelatedparties Nil Nil Nil Nil

2. Otherthanrelatedparties 3,586.70 47,275.79 3,605.34 46,739.24Total 18,712.85 62,401.94 18,731.49 61,865.39


(`inlakhs)



106 107

Sl. Particulars 2017-18 (` in lakhs)

2016-17 (` in lakhs)

7 Other Information

Particulars

(i) Gross Non Performing Assets

(a) Relatedparties Nil Nil

(b) Otherthanrelatedparties 13,982.19 7,182.22

(ii) Net Non-Performing Assets

(a) Relatedparties Nil Nil

(b) Otherthanrelatedparties 6,817.90 3,027.21

(iii) Assets acquired in satisfaction of Debts Nil Nil

28. NosignificanteventshaveoccurredafterthebalancesheetdatewhichmayhavematerialeffectontheCompany’sfinancialstatements.

29. TheBoardofDirectorsatitsmeetingheldon2ndMay,2018hasrecommendedadividendof8%(`8/-perequityshareof`100/-each)forthefinancialyear2017-18,subjecttoapprovalofmembersattheAnnualGeneralMeeting.IntermsofrevisedAccountingStandard(AS)4 ‘ContingenciesandEventsoccurringafterBalanceSheetDate’,thecompanyhasnotappropiatedproposeddividendof`3,664.88lakhs(includingdividenddistributiontaxof`624.88)fromthesurplusasperStatementofprofitandLossfortheyearended31stMarch,2018.

30. Previousyear’sfigureshavebeenregrouped/rearrangedwherevernecessary.FiguresareroundedofftothenearestlakhRupees.Asaresult,adjustmentshavebeenmadeinthelastdecimalsintheindividualheadsofcertainaccountstoavoiddifferencescausedbyroundingoffofthesefiguresascomparedtototalsandsub-totals.


(`inlakhs)



DIN:00040526 DIN:00025326



Mumbai MumbaiMay2,2018 May2,2018



106 107

(`inLakhs)

Name of the subsidiary STCI Primary Dealer Limited STCI Commodities Limited

Thedatesincewhensubsidiarywasacquired 31/Oct/2006 10/Mar/2008

Reportingperiodforthesubsidiary 31/Mar/2018 31/Mar/2018

Reporting currency and Exchange rate as on the lastdateof therelevantFinancialyear inthecaseof foreignsubsidiaries

NotApplicable NotApplicable

Sharecapital 15,000.00 450.00

Reserves&surplus 34,469.41 (280.73)

TotalAssets 790,189.17 178.33

TotalLiabilities 740,719.76 9.06

Investments 760,894.72 31.00

Turnover / Revenue 45,264.10 19.71

Profitbeforetaxation 6,000.66 16.25

Provisionfortaxation 2,085.45 0.00

Profitaftertaxation 3,915.21 16.25

ProposedDividend(interimdividend@10%forFY17-18) 1,500.00 Nil

%ofshareholding 100.00% 100.00%

Namesofsubsidiarieswhichareyettocommenceoperations Namesofsubsidiarieswhichhavebeenliquidatedorsoldduringtheyear

NotApplicable NotApplicable

Part “B”: Associates and Joint Ventures - Not Applicable

FORM AOC - I(Pursuant to first proviso to sub-section (3) of section 129 read with

rule 5 of Companies (Accounts) Rules, 2014)Statement containing salient features of the financial statement of

subsidiaries/associate companies/joint venturesPart “A”: Subsidiaries



DIN:00040526 DIN:00025326






108

LIST OF SHAREHOLDERS AND SHAREHOLDING PATTERN AS ON 31.03.2018

Sr.No.

Names of the Shareholders No. of Shares Held

% Held

1 BANKOFINDIA 11383781.00 29.96

2 STATEBANKOFINDIA 3921142.00 10.32

3 IDFCBANKLIMITED 3530136.00 9.29

4 IDBIBANKLTD. 2507610.00 6.60

5 LIFE INSURANCE CORPORATION OF INDIA 2152347.00 5.66

6 PUNJABNATIONALBANK 1877564.00 4.94

7 CANARABANK-MUMBAI 1426298.00 3.75

8 ICICIBANKLTD 1400528.00 3.69

9 BANKOFBARODA 1253544.00 3.30

10 CENTRALBANKOFINDIA 1150100.00 3.03

11 INDIANBANK 1102378.00 2.90

12 ALLAHABADBANK 622134.00 1.64

13 SyndicateBank 582160.00 1.53

14 UnionBankofIndia 581248.00 1.53

15 ADMINISTRATOROFTHESPECIFIEDUNDERTAKINGOFTHEUNITTRUSTOF INDIA-UNITSCHEME1964

494043.00 1.30

16 ORIENTALBANKOFCOMMERCE 474277.00 1.25

17 UCOBANK 464892.00 1.22

18 GENERAL INSURANCE CORPORATION OF INDIA 432875.00 1.14

19 UNITEDBANKOFINDIA 378256.00 0.99

20 THENEWINDIAASSURANCECOMPANYLIMITED 368175.00 0.97

21 IFCI LTD 337400.00 0.89

22 ANDHRABANK 313196.00 0.82

23 BANKOFMAHARASHTRA 265032.00 0.70

24 INDIANOVERSEASBANK 254078.00 0.67

25 PUNJABANDSINDBANK 225500.00 0.59

26 CORPORATIONBANK 209461.00 0.55

27 THEORIENTALINSURANCECOMPANYLIMITED 137290.00 0.36

28 SIDBIVENTURECAPITALLIMITED 82045.00 0.22

29 NATIONAL INSURANCE COMPANY LTD 72510.00 0.19

TOTAL 38000000.00 100.00


CONSOLIDATED ACCOUNTS

ANNUAL REPORT

FOR THE YEAR ENDED

31st MARCH, 2018



111

Contents

II. CONSOLIDATED ACCOUNTS

01 Auditor’s Report 112

02 C&AG Reports 118

03 Consolidated Balance Sheet 119

04 ConsolidatedProfit&LossAccount 121

05 Consolidated Cash Flow Statement 123

06 Notes to Consolidated Financial Statements 125

07 SignificantAccountingPolicies 141

08 Notes Forming Part of Consolidated Financial Statements 147



112 113

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF STCI FINANCE LIMITED (FormerlyknownasSecuritiesTradingCorporationofIndiaLimited)

Report on the Consolidated Financial Statements

Wehaveauditedtheaccompanyingconsolidatedfinancial statementsofSTCIFinanceLimited(hereinafterreferredtoas ‘’theHoldingCompany’’)anditssubsidiaries(theHoldingcompanyanditssubsidiariestogetherreferredtoas“theGroup”),comprisingoftheconsolidatedBalanceSheetasatMarch31,2018,theConsolidatedStatementofProfitandLoss,andtheConsolidatedCashFlowstatementfortheyearthenended,andasummaryofsignificantaccountingpoliciesandotherexplanatoryinformation (hereinafterreferredtoas“TheConsolidatedFinancialStatements”).

Management’s Responsibility for the Consolidated Financial Statements

TheHoldingCompany’sBoardofDirectorsisresponsibleforthepreparationsoftheconsolidatedfinancialstatementsintermsofrequirementsoftheCompaniesAct,2013(hereinafterreferredtoas“theAct”)thatgiveatrueandfairviewoftheconsolidatedfinancialposition,consolidatedfinancialperformanceandconsolidatedcashflowsoftheGroupinaccordancewiththeaccountingprinciplesgenerallyacceptedinIndia,includingtheAccountingStandardsspecifiedundersection133oftheAct,readwithRule7oftheCompanies(Accounts)Rules,2014.TherespectiveBoardofDirectorsoftheCompaniesincludedinthegroupareresponsibleformaintenanceofadequateaccountingrecordsinaccordancewiththeprovisionoftheActforsafeguardingoftheassetsoftheGroupandforpreventinganddetectingfraudsandotherirregularities;theselectionandapplicationofappropriateaccountingpolicies;makingjudgmentsandestimatesthatarereasonableandprudent;andthedesign,implementationandmaintenanceofadequateinternalfinancialcontrols,thatwereoperatingeffectivelyforensuringtheaccuracyandcompletenessoftheaccountingrecords,relevanttothepreparationandpresentationofthefinancialstatementsthatgiveatrueandfairviewandarefreefrommaterialmisstatement,whetherduetofraudorerror,whichhavebeenusedforthepurposeofpreparationoftheconsolidatedfinancialstatementsbythedirectorsoftheHoldingCompany,asaforesaid.


Ourresponsibilityistoexpressanopinionontheseconsolidatedfinancialstatementsbasedonouraudit.WhileconductingtheauditwehavetakenintoaccounttheprovisionsoftheAct,theaccountingandauditingstandardsandmatterswhicharerequiredtobeincludedintheauditreportundertheprovisionsoftheActandtheRulesmadethereunder.

WehaveconductedourauditinaccordancewiththeStandardsonAuditingundersection143(10)oftheAct.ThoseStandardsrequirethat,wecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreefrommaterialmisstatement.

Anaudit involvesperformingprocedures toobtainauditevidenceabout theamountsandthedisclosures in theconsolidatedfinancialstatements.Theproceduresselecteddependontheauditor’sjudgment,includingtheassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.Inmakingthoseriskassessments,theauditorconsidersinternalfinancialcontrolrelevanttotheHoldingCompany’spreparationoftheconsolidatedfinancialstatementsthatgiveatrueandfairviewinordertodesignauditproceduresthatareappropriateinthecircumstances.Anauditalsoincludesevaluatingtheappropriatenessofaccountingpoliciesusedandthereasonablenessof theaccountingestimatesmadebyHoldingCompany’sDirectors,aswellasevaluatingtheoverallpresentationoftheconsolidatedfinancialstatements.

WebelievethattheauditevidenceobtainedbyusandtheauditevidenceobtainedbyotherauditorsintermsoftheirreportsreferredtointheOtherMattersparagraphbelow,issufficientandappropriatetoprovideabasisforourauditopinionontheconsolidatedfinancialstatements

Opinion

Inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous,theaforesaidconsolidatedfinancialstatementsgivetheinformationrequiredbytheActinthemannersorequiredandgiveatrueandfairviewinconformitywithaccountingprinciplesgenerallyacceptedinIndiaoftheconsolidatedstateofaffairsoftheCompany,asatMarch31,2018,theirconsolidatedprofitandtheirconsolidatedcashflowsfortheyearendedonthatdate.



112 113

Other Matter

Wedidnotauditthefinancialstatementsofthesubsidiaries,whosefinancialstatementsreflecttotalassetsof790,089.50lakhsasat31stMarch2018,thetotalrevenueof45,283.81lakhsandnetcashoutflowsamountingto4,930.55lakhsfortheyearthenended.Thesefinancialstatementsandotherfinancialinformationhavebeenauditedbyotherauditorswhosereportshavebeenfurnishedtousbythemanagement,andouropinionontheconsolidatedfinancialstatementsinsofarasitrelatestotheamountsanddisclosuresincludedinrespectofthesesubsidiaries,andourreportintermsofsubsections(3)and(5)ofsection143oftheAct,insofarasitrelatestotheaforesaidsubsidiaries,isbasedsolelyonthereportsoftheotherauditors.

Ouropinionaboveontheconsolidatedfinancialstatements,andourreportonOtherLegalandRegulatoryRequirementsbelow,isnotmodifiedinrespectoftheabovematterswithrespecttoourrelianceontheworkdoneandthereportsoftheotherauditorsandthefinancialstatements/financialinformationcertifiedbythemanagement.

Report on Other Legal and Regulatory Requirements

1. Asrequiredbysection143(3)oftheAct,wereport,totheextentapplicable,that:

a. Wehavesoughtandobtainedalltheinformationandexplanationswhichtothebestofourknowledgeandbeliefwerenecessaryforthepurposesofourauditoftheaforesaidconsolidatedfinancialstatements.

b. Inouropinion,properbooksofaccount,as requiredby lawrelating topreparationof theaforesaidconsolidatedfinancialstatementshavebeenkeptsofarasitappearsfromourexaminationofthosebooksandthereportsoftheotherauditors.

c. The ConsolidatedBalance Sheet, the Consolidated Statement of Profit and Loss and the Consolidated Cash FlowStatementdealtwithbythisReportareinagreementwiththerelevantbooksofaccountmaintainedforthepurposeofthepreparationoftheconsolidatedfinancialstatements.

d. Inouropinion,theaforesaidconsolidatedfinancialstatementscomplywiththeAccountingStandardsspecifiedunderSection133oftheAct,readwithRule7oftheCompanies(Accounts)Rules,2014.

e. OnthebasisofwrittenrepresentationsreceivedfromthedirectorsoftheHoldingcompanyasonMarch31,2018,andtakenonrecordbytheBoardofDirectorsoftheHoldingcompany,andthereportsofthestatutoryauditorsofitssubsidiarycompaniesincorporatedinIndia,noneofthedirectorsofthegroupCompaniesincorporatedinIndiaisdisqualifiedasonMarch31,2018,frombeingappointedasadirectorofthatcompanyintermsofsection164(2)oftheAct.

f. WithrespecttotheadequacyoftheinternalfinancialcontrolsoverfinancialreportingoftheGroupandtheoperatingeffectivenessofsuchcontrols,refertoourseparatereportin“AnnexureI”;and

g. WithrespecttotheothermatterstobeincludedintheAuditor’sReportinaccordancewithRule11oftheCompanies(AuditandAuditors)Rules,2014,inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous:

i. Theconsolidatedfinancial statementsdisclose the impactofpending litigationson theconsolidatedfinancialpositionofthegroup–ReferNote6.1totheconsolidatedfinancialstatements;

ii. TheGroupdidnothaveanylong-termcontractsincludingderivativecontractsforwhichtherewereanymaterialforeseeablelosses;

iii. TherewerenoamountswhichwererequiredtobetransferredtotheInvestorEducationandProtectionFundduringtheyearended31stMarch,2018bythegroup.




114 115


2. Asrequiredbysection143(5)oftheActandinpursuanceofdirectionsissuedbytheOfficeoftheComptrollerandAuditorGeneralofIndiafortheyearendedMarch31,2018,wereportthat:

i. According to the information and explanations given to us, and based on the other auditors reports issued inaccordancewithsection143(5),theGroupdoesnotownanyfreeholdorleaseholdland.

ii. According to the information and explanations given to us, and based on the other auditors reports issued inaccordancewithsection143(5),thedetailsofwaiverofinterest/loans/feesduringthefinancialyear2017-18alongwiththereasonsaregiveninAnnexureII.

iii. Accordingtotheinformation&explanationgiventousandbasedontheotherauditor’sreportsissuedinaccordancewithsection143(5),theGroupdoesnothaveanyinventorieslyingwiththirdpartiesexceptincaseofasubsidiarycompanywhere the securities are kept as collateralwith theRBI/ CCIL for availing securedborrowings andwithIL&FS/HDFCBankfortradingpurposes/marginrequirements,forwhichproperrecordshavebeenmaintainedbythesubsidiarycompany.TheGrouphasnotreceivedanygifts/grant(s)fromtheGovernmentorotherauthority.



MumbaiMay2,2018



114 115

Referred to in paragraph 1 (f) under “ Report on other legal and regulatory requirements “ of our report of even date

Report on the Internal financial Controls under clause (i) of sub section 3 of section 143 of the Companies Act 2013 (“THE ACT”)

Inconjunctionwithourauditoftheconsolidatedfinancialstatementsifthecompanyasofandfortheyearended31stMarch2018wehaveauditedtheinternalfinancialcontrolsoverfinancialreportingofSTCIFinanceLtd.(“THEHoldingCompany”)anditssubsidiarycompanieswhicharecompaniesincorporatedinIndia,asofthatdate.

MANAGEMENT’S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

TherespectiveBoardofDirectorsoftheHoldingCompanyanditssubsidiarycompanies,whicharecompaniesincorporatedinIndia,areresponsibleforestablishingandmaintaininginternalfinancialcontrolsbasedontheinternalcontroloverfinancialreportingcriteriaestablishedbytheCompanyconsideringtheessentialcomponentsofinternalcontrolstatedintheGuidanceNoteonAuditof InternalFinancialControlsOverFinancialReporting issuedbythe InstituteofCharteredAccountantsof India(‘ICAI’).Theseresponsibilitiesincludethedesign,implementationandmaintenanceofadequateinternalfinancialcontrolsthatwereoperatingeffectivelyforensuringtheorderlyandefficientconductofitsbusiness,includingadherencetorespectivecompany’spolicies,thesafeguardingofitsassets,thepreventionanddetectionoffraudsanderrors,theaccuracyandcompletenessoftheaccountingrecords,andthetimelypreparationofreliablefinancialinformation,asrequiredundertheAct.

AUDITOR’S RESPONSIBILITY

OurresponsibilityistoexpressanopinionontheCompany’sinternalfinancialcontrolsoverfinancialreportingbasedonouraudit.WeconductedourauditinaccordancewiththeGuidanceNoteonAuditofInternalFinancialControlsOverFinancialReporting(the“GuidanceNote”)issuedbyICAIandtheStandardsonAuditing,issuedbyICAIanddeemedtobeprescribedundersection143(10)oftheAct,totheextentapplicabletoanauditof internalfinancialcontrols,bothissuedbytheInstituteofCharteredAccountantsofIndia.ThoseStandardsandtheGuidanceNoterequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhetheradequateinternalfinancialcontrolsoverfinancialreportingwasestablishedandmaintainedandifsuchcontrolsoperatedeffectivelyinallmaterialrespects.


WebelievethattheauditevidencewehaveobtainedandtheauditevidenceobtainedbyotherauditorsintermsoftheirreportsreferredtointheOtherMattersparagraphbelow,issufficientandappropriatetoprovideabasisforourauditopinionontheCompany’sinternalfinancialcontrolssystemoverfinancialreporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

Acompany’sinternalfinancialcontroloverfinancialreportingisaprocessdesignedtoprovidereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordancewithgenerallyaccepted accounting principles. A company’s internal financial control over financial reporting includes those policies andproceduresthat(1)pertaintothemaintenanceofrecordsthat,inreasonabledetail,accuratelyandfairlyreflectthetransactionsanddispositionsoftheassetsofthecompany;(2)providereasonableassurancethattransactionsarerecordedasnecessarytopermitpreparationoffinancial statements inaccordancewithgenerallyacceptedaccountingprinciples,andthat receiptsandexpendituresofthecompanyarebeingmadeonlyinaccordancewithauthorizationsofmanagementanddirectorsofthecompany;and(3)providereasonableassuranceregardingpreventionortimelydetectionofunauthorizedacquisition,use,ordispositionofthecompany’sassetsthatcouldhaveamaterialeffectonthefinancialstatements.




116 117

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

Becauseoftheinherentlimitationsofinternalfinancialcontrolsoverfinancialreporting,includingthepossibilityofcollusionorimpropermanagementoverrideofcontrols,materialmisstatementsduetoerrororfraudmayoccurandnotbedetected.Also,projectionsofanyevaluationoftheinternalfinancialcontrolsoverfinancialreportingtofutureperiodsaresubjecttotheriskthattheinternalfinancialcontroloverfinancialreportingmaybecomeinadequatebecauseofchangesinconditions,orthatthedegreeofcompliancewiththepoliciesorproceduresmaydeteriorate.

OPINION

Inouropinion,theHoldingCompanyanditssubsidiaries,whicharecompaniesincorporatedinIndia,haveinallmaterialrespects,anadequateinternalfinancialcontrolssystemoverfinancialreportingandsuchinternalfinancialcontrolsoverfinancialreportingwereoperatingeffectivelyasatMarch31,2018,basedontheinternalcontroloverfinancialreportingcriteriaestablishedbytheCompanyconsidering theessential componentsof internal control stated in theGuidanceNoteonAuditof InternalFinancialControlsOverFinancialReportingissuedbytheInstituteofCharteredAccountantsofIndia.

OTHER MATTERS

Ouraforesaidreportsundersection143(3)(i)oftheActontheadequacyandoperatingeffectivenessofthe internalfinancialcontrolsoverfinancialreportinginsofarasitrelatestotwosubsidiarycompanies,whicharecompaniesincorporatedinIndia,isbasedonthecorrespondingreportsoftheauditorsofsuchcompaniesincorporatedinIndia.



MumbaiMay2,2018




116 117


Casesofwaiversandwriteoffs

Sr. No.Number of cases of waiver of interest

Total Interest Waived (` In Lakhs)

Reasons for waiver as given by the company

Cases of waiver of interest/fees

1 4 252.31 Consideringbusinessexigencies and tomaintainbusinessrelations,interestandfeewaswaived.

Cases of write off of loans

2 2 2,332.00 Loansandadvancesof` 2,332.00lakhswerewrittenoffasbaddebts,afterevaluationof theexistingstatus,securityavailableandthelikelihoodofrecovery.



MumbaiMay2,2018

ANNEXURE – II TO THE INDEPENDENT AUDITOR’S REPORT



118 119

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) READ WITH SECTION 129(4) OF THE COMPANIES ACT, 2013 ON THE CONSOLIDATED FINANCIAL STATEMENTS OF STCI FINANCE LIMITED FOR THE YEAR ENDED 31 MARCH 2018

ThepreparationofconsolidatedfinancialstatementofSTCIFinanceLimitedfortheyearended31March2018inaccordancewiththefinancialreportingframeworkprescribedundertheCompaniesAct,2013(Act)istheresponsibilityofthemanagementofthecompany.ThestatutoryauditorappointedbytheComptrollerandAuditorGeneraloflndiaundersection139(7)readwithsection129(4)oftheActisresponsibleforexpressingopiniononthefinancialstatementsundersection143readwithsection129(4)oftheActbasedonindependentauditinaccordancewiththestandardsonauditingprescribedundersection143(10)oftheAct.ThisisstatedtohavebeendonebythemvidetheirAuditReportdated2May2018.

I,onbehalfof theComptrollerandAuditorGeneralof India,haveconductedasupplementaryauditundersection143(6)(a) readwith section 129(4) of the Act of the consolidated financial statements of STCI Finance Limited for the year ended 31March2018.Weconductedasupplementaryauditof thefinancial statementsofSTCIPrimaryDealerLimited,butdidnotconductsupplementaryauditofthefinancialstatementsofSTCICommoditiesLimitedfortheyearended31March2018.Thissupplementaryaudithasbeencarriedout independentlywithoutaccess to theworkingpapersof the statutoryauditorsandis limited primarily to inquires of the statutory auditors and company personnel and a selective examinationof someof theaccountingrecords.

Onthebasisofmyauditnothingsignificanthascometomyknowledgewhichwouldgiverisetoanycommentuponorsupplementtostatutoryauditors’report.

ForandonthebehalfoftheComptroller and Auditor General of lndia


Place:MumbaiDate:July2,2018



118 119

CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2018(`inlakhs)




I EQUITY AND LIABILITIES

1 Shareholders' Funds

(a) Sharecapital 1.1 38,000.00 38,000.00

(b) Reservesandsurplus 1.2 117,429.97 106,269.87

Sub-Total-(1) 155,429.97 144,269.87

2 Non Current Liabilities

(a) Longtermborrowings 2.1 98,929.00 103,333.33

(b) Longtermprovisions 2.2 1,330.65 1,637.50

Sub-Total-(2) 100,259.65 104,970.83

3 Current Liabilities

(a) Shorttermborrowings 3.1 853,380.39 629,486.40

(b) Tradepayables 3.2

- Totaloutstandingduesofmicroenterprisesand small enterprises

0.00 0.00

- Totaloutstandingduesofcreditorsother than micro enterprises and small enterprises

226.01 103.33

(c) Othercurrentliabilities 3.3 45,219.11 24,814.81

(d) Shorttermprovisions 3.4 1,735.51 1,621.55

Sub-Total-(3) 900,561.02 656,026.09

TOTAL (1+2+3) 1,156,250.64 905,266.79

II ASSETS

1 Non-current Assets

(a) Property,PlantandEquipment 4.1 3,787.73 3,934.37

(b) Intangibleassets 4.1 15.95 37.93

(c) Noncurrentinvestments 4.2 48,575.53 47,847.11

(d) Deferredtaxassets(net) 4.3 2,301.35 1,304.44

(e) Longtermloansandadvances 4.4 91,396.69 90,805.97

(f) Othernoncurrentassets 4.5 27.02 77.27

Sub-Total-(1) 146,104.27 144,007.09

2 Current Assets

(a) Currentinvestments 5.1 31.00 7.50

(b) Inventories 5.2 715,924.53 518,611.93

(c) Tradereceivables 5.3 4.02 0.91



120 121

CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2018(`inlakhs)




(d) CashandBankBalances 5.4 5,029.57 8,097.71

(e) Shorttermloansandadvances 5.5 263,821.49 213,881.33

(f) Othercurrentassets 5.6 25,335.76 20,660.32

Sub-Total-(2) 1,010,146.37 761,259.70

TOTAL (1+2) 1,156,250.64 905,266.79


As per our report of even date For and on behalf of the Board of DirectorsForandonbehalfofPrakash Chandra Jain & Co. Chartered AccountantsFirmRegistrationNo.002438C


DIN:00040526 DIN:00025326

Pratibha Sharma Pradeep Madhav Raghvendra KumarPartner ManagingDirector&CEO DeputyManagingDirectorMembershipNo.400755 DIN:00267422 DIN:08045355





120 121

CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2018(`inlakhs)


For the year ended

March 31, 2018

For the year ended

March 31, 2017

I Revenue from Operations

a) Interestincome 7.1 79,174.20 76,002.19

b) Otherfinancialservices 7.2 1,081.35 968.02

c) Profit/(Loss)onsaleofsecurities 7.3 (366.26) 24,670.16

79,889.29 101,640.37

II Other Income 8 1,339.31 982.62

III Total Revenue (I+II) 81,228.60 102,622.99

IV Expenses

a) Employeebenefitexpenses 9 1,435.10 2,036.61

b) Financecosts 10 54,439.51 50,755.66

c) Depreciationandamortisationexpenses 4.1 242.85 245.99

d) Otherexpenses 11 2,998.13 3,059.66

e) LoanProvisionandWriteoffs 12 5,525.89 9,435.68

Total Expenses 64,641.48 65,533.60

V Profit before exceptional and extraordinary items and tax (III - IV)

16,587.12 37,089.39

VI Exceptionalitems 0.00 0.00

VII Profit before tax (V+VI) 16,587.12 37,089.39

VIII Tax expenses

i) Currenttax 6,400.00 10,985.00

ii) Deferredtax (996.91) 1,801.12

iii) Short / (Excess) provision for tax of earlieryear(s)

40.18 0.00

IX Profit and loss from continuing operations (VII-VIII) 11,143.85 24,303.27

X Profit/(loss)fromdiscontinuingoperations(netoftaxes) 16.25 8.85

XI Profit and loss from operations (after tax) ( IX +X) 11,160.10 24,312.12



122 123

CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2018(`inlakhs)


For the year ended

March 31, 2018

For the year ended

March 31, 2017

XII Earning per equity share of par value of ` 100/- each

i)BasicEarningPerShare(EPS)in` 18 29.37 63.98

ii)DilutedEarningPerShare(EPS)in` 18 29.37 63.98




DIN:00040526 DIN:00025326






122 123

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2018(`inlakhs)



A. CASH FLOW FROM OPERATING ACTIVITIES

Net(Loss)/Profitbeforetaxandextraordinaryitems 16,603.37 37,098.24

Adjustmentsfor:

Depreciation 242.85 245.99

(Profit)/LossonsaleofProperty,plantandequipment 1.68 (0.79)

(Profit)/LossonsaleofInvestments (760.04) (555.40)

Interestandotherincomeoninvestments (3,376.76) (3,425.65)

Dividendoninvestments (229.28) (158.34)

Amortisationofpremiumoninvestments 118.74 (17.35)

Provision against loans and advances 3,193.67 (5,764.32)

Write-offofBaddebts 2,332.22 15,200.00

1,523.08 5,524.14

OperatingProfit/(loss)beforeworkingcapitalchanges 18,126.45 42,622.38


Increase/(Decrease)intradepayable 122.68 (22.41)

Increase/(Decrease)inlongtermprovisions (414.15) 576.00

Increase/(Decrease)inshorttermprovisions (79.98) 150.81

Increase/(Decrease)inothercurrentliabilities 3,333.97 (1,274.39)

Decrease/(Increase)inlongtermloanandadvances (6,046.54) 37,866.44

(Increase)/Decreaseinothernoncurrentassets 50.25 16.75

Decrease/(Increase)inshorttermloanandadvances (49,940.16) (21,042.27)

Decrease/(Increase)intradereceivables (3.11) 319.57

Decrease/(Increase)ininventories (197,312.60) 51,198.54

Decrease/(Increase)inothercurrentassets (4,675.44) 2,916.60

(254,965.08) 70,705.64

CASH FLOW FROM / (USED IN) OPERATING ACTIVITIES (236,838.63) 113,328.02

Less:TaxesPaid (6,327.75) (15,224.61)

NET CASH FLOW FROM / (USED IN) OPERATING ACTIVITIES (243,166.38) 98,103.41

B. CASH FLOW FROM INVESTING ACTIVITIES

Fixeddepositwithbankshavingoriginalmaturityoverthreemonths 248.81 (6.66)

Purchaseoftangible/intangibleassets (77.41) (76.25)

Saleoftangible/intangibleassets 1.50 1.25

PurchaseofInvestments (9,701.95) (109,722.13)



124 125

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2018(`inlakhs)



SaleofInvestments 9,710.07 146,251.02

Dividendreceived 229.28 158.34

Interestandotherincomeoninvestments 3,376.76 3,425.65

NET CASH FLOW FROM / (USED IN) INVESTING ACTIVITIES 3,787.06 40,031.22

C. CASH FLOW FROM FINANCING ACTIVITIES

Paymentofdividend(includingDDT) 0.00 (11,433.98)

Fundsborrowed 236,559.99 (121,740.49)

NET CASH FLOW FROM / (USED IN) FINANCING ACTIVITIES 236,559.99 (133,174.47)

NET INCREASE / (DECREASE) IN CASH & CASH EQUIVALENTS (A+B+C) (2,819.33) 4,960.16

Cash and Cash equivalents at beginning of period 7,049.66 2,089.50

Cash and Cash equivalents at end of period 4,230.33 7,049.66

OtherBankbalances(FD'swithresidualmaturityoflessthan12months) 799.24 1,048.05

Cash and bank balances at end of period 5,029.57 8,097.71

Preparedasper"IndirectMethod"asprescribedbyAccountingStandard-3(revised)"CashFlowStatements"



DIN:00040526 DIN:00025326






124 125

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2018

(`inlakhs)NOTE NO. 1.1: SHARE CAPITAL



Authorised

50,000,000Equitysharesof`100/-each 50,000.00 50,000.00

50,000.00 50,000.00

Equity Share Capital

Issued, Subscribed & Fully paid up 38,000.00 38,000.00

38,000,000(PY-38,000,000)Equitysharesof`100/-eachfullypaidup

TOTAL 38,000.00 38,000.00

*PYstandsforPreviousYearthroughoutthefinancialstatements

a) Details of Shareholding As at March 31, 2018

i) 11,383,781numberofequitysharesof`100/-each,heldbyBankofIndia,thelargestshareholderofthecompany.

ii) Shareholdersholdingmorethan5%ofEquitySharesoftheCompanyareasunder:



BankofIndia 11,383,781 29.96% 11,383,781 29.96%

StateBankofIndia 3,921,142 10.32% 2,812,415 7.40%

IDFCBankLimited 3,530,136 9.29% 3,530,136 9.29%

IDBIBankLimited 2,507,610 6.60% 2,507,610 6.60%

LifeInsuranceCorporationofIndiaLimited

2,152,347 5.66% 1,505,400 3.96%

b) Details of shares bought back during past five years: There has been no buy back of shares during past five years.

c) Reconciliation of the number of equity shares outstanding of ` 100/- each


As at March31,2017

Numberofsharesatthebeginningofyear 38,000,000 38,000,000

Add:SharesIssued 0 0

Less:Shareboughtback/forfeited 0 0

Numberofsharesattheendofyear 38,000,000 38,000,000

d) TheCompanyhasonlyoneclassofequityshareshavingparvalueof`100/-each.Eachshareholder iseligible foronevotepershareheld.Intheeventofliquidation,theequityshareholdersareeligibletoreceivetheremainingassetsoftheCompanyafterdistributionofallpreferentialamounts,inproportiontotheirshareholding.



126 127

NOTE NO. 1.2: RESERVES AND SURPLUS



a) Reserve created pursuant to Section 45 I C of RBI Act, 1934

Balanceasatthebeginningoftheyear 46,144.50 39,782.10

Add:-Amounttransferredfromsurplusinstatementofprofitandloss 2,283.05 6,362.40

Balanceasattheendoftheyear(a) 48,427.55 46,144.50

b) Capital Redemption Reserve



Balanceasattheendoftheyear(b) 17,000.00 17,000.00

c) Capital Reserve

Balanceasatthebeginningoftheyear 27.53 27.53


Balanceasattheendoftheyear(c) 27.53 27.53

d) Held to Maturity (HTM) Reserve 1



Balanceasattheendoftheyear(d) 2,126.63 2,126.63

1NetProfit(aftertax)fromsaleofsecuritiesthroughHTMportfoliohavebeentransferredtoReserveonSaleofHTM AccountasperRBIGuidelines.

e) General Reserve

Balanceasatthebeginningoftheyear 319.22 319.22


Balanceasattheendoftheyear(e) 319.22 319.22

f) Surplus in Statement of Profit and Loss


Add:-ProfitfortheYear 11,160.10 24,312.12

TotalProfitavailableforappropriation 51,812.09 58,448.37

Less : Appropriations

TransfertoStatutoryReserve(asperSection45ICoftheRBIAct,1934) 2,283.05 6,362.40

Interimdividendonequityshares`Nil(March31,2017, `25/-pershare)

0.00 9,500.00

Taxondividend 0.00 1,933.98

Netsurplusinstatementofprofitandloss(f) 49,529.04 40,651.99

Total (a+b+c+d+e+f) 117,429.97 106,269.87


(`inlakhs)



126 127

NOTE NO. 2.1: LONG TERM BORROWINGS



a) Secured

- RedeemableNonConvertibleDebentures(NCD's) (Non-Currentportion)

59,000.00 65,000.00

- LongtermloanfromBanks(Non-Currentportion) 39,929.00 38,333.33

b) Others 0.00 0.00

Total (a+b) 98,929.00 103,333.33

i) Details of outstanding Secured Redeemable Non Convertible Debenture (NCD’s) of ` 10 lakhs each (privately placed)

Particulars Maturity Date As at March 31, 2018 As at March 31, 2017

Current Maturities

Non Current portion

Current Maturities

Non Current portion

9.40%NCDs600(PY-600) October1,2018 6,000.00 0.00 0.00 6,000.00

9.67%NCDs3,000(PY-3,000) June25,2019 0.00 30,000.00 0.00 30,000.00

9.89%NCDs2,000(PY-2,000) July30,2019 0.00 20,000.00 0.00 20,000.00

9.40%NCDs900(PY-900) October1,2020 0.00 9,000.00 0.00 9,000.00

Total 6,000.00 59,000.00 0.00 65,000.00

AboveNCDsareredeemableatpar.AboveNCDsareSecuredbywayoffirstchargeonspecificreceivablesandregisteredmortgageoftheCompany’simmovablepropertieswithanoverallassetcoverof125%.(ReferNoteNo25)

ii) DetailsofSecuredLongtermloanfromBanks

Name of the lending Bank

Rate of Interest

Repayment details

As at March 31, 2018 As at March 31, 2017

Current Maturities

Non Current portion

Current Maturities

Non Current portion

StateBankofIndia 8.60% (PY8.60%)

18 Qtrly Installmentsweffrom30.07.17

11,112.00 30,554.00 6,666.67 33,333.33

HDFCBankLtd 8.75% (PY8.80%)

8 Qtrly Installmentsbeginningfrom07.04.18

2,500.00 2,500.00 0.00 5,000.00

UnionBankofIndia 8.40% (PYN.A.)

8 Qtrly Installmentsbeginningfrom29.09.18

4,125.00 6,875.00 0.00 0.00

17,737.00 39,929.00 6,666.67 38,333.33

Above Term Loans are secured by way of first charge on specific receivables with an overall asset cover of 120%. (ReferNoteNo25). Interestrateforthesetermloansare linkedtooneyearMarginalcostof fundbased lendingrate(MCLR)applicableatthetimeofsanction/annualreview.


(`inlakhs)



128 129

NOTE NO. 2.2: LONG TERM PROVISIONS



Foremployeebenefits 289.60 289.45

Contingentprovisionagainststandardassets(ReferNoteNo.24) 315.01 326.45

Foramortisationofpremiumondebtinvestments 193.34 74.60

Provisionforperformancelinkedvariablepay 106.11 535.00

Provisionforstampdutyonsecuritiestransactions(ReferNoteNo.21) 400.22 385.63

Others 26.37 26.37

Total 1,330.65 1,637.50

NOTE NO. 3.1: SHORT TERM BORROWINGS



I. Secured Borrowings

a. Loanrepayableondemand

- frombanks 0.00 0.00

- fromotherparties 0.00 0.00

b. Other loans and advances

CBLOborrowings 183,475.00 109,565.00

Borrowing under Repo 111,248.66 146,267.94

BorrowingUnderLAF/RefinancefromRBI 160,600.00 16,000.00

Total of Secured Borrowings - (I) 455,323.66 271,832.94

II Unsecured Borrowings

a. Loanrepayableondemand

- frombanks2 277,992.40 273,127.02

- fromotherparties(Inter-corporateDeposit) 17,064.33 5,026.44

b. Other loans and advances

- CommercialPapers 103,000.00 79,500.00

Total of Unsecured Borrowings - (II) 398,056.73 357,653.46

Total (I + II) 853,380.39 629,486.40

2Includesloanof`Nil(PY`24,818.01lakhs)fromrelatedparty“BankofIndia”


(`inlakhs)



128 129

Additional information to secured / unsecured borrowings:

i) Secured short term borrowings

a) CBLOborrowingof`183,475.00lakhs(PY-`109,565.00lakhs)isrepayablein2-12days(PY-3-18days)andcarriesinterest rates ranging from 1.51% to 7.25% (PY- 5.45% to 6.15%). Government securities having face value of `196,300.00lakhs(PY-`115,300.00lakhs)hasbeenkeptascollateralwithClearingCorporationofIndiaLimitedforCBLOborrowings.Companyhasalsoplaced`764.00lakhs(PY-`763.00lakhs)asCashmarginand`52.00Lakhs (PY-`10.00lakhs)&Governmentsecuritieshavingfacevalueof`11,111.00lakhs(PY-`13,810.00lakhs)towardsDefaultFund/SGFwithClearingCorporationofIndiaLimitedforCBLO.

b) b)SecuredborrowingunderoutstandingRepoamountingto`111,248.66lakhs(PY-`146,267.94lakhs)issecuredbycollateralofgovernmentsecuritiesandtreasurybillshavingfacevalueof`109,187.00lakhs(PY-`144,597.00lakhs)andwillberepayablewithin2days(PY-3days)andcarriesinterestratebetween6.5%to7.05%(PY-2.5%to6.30%).

c) Secured borrowing under LAF / Refinance from RBI outstanding as on March 31, 2018 is ` 160,600.00 lakhs (PY-`16,000.00lakhs).Theborrowingissecuredbycollateralofgovernmentsecurities&treasurybillsoffacevalueof `173,746.30lakhs(PY-`16,178.30lakhs).Theborrowingswillbematuringonvariousdateswithinnext2to33days(PY-3days)andcarriesinterestratesof6%to6.31%(PY-6.25%).

ii) Unsecured short term bank borrowings

a) Bankcreditlines,Shorttermloansandoverdraftfacilitieshavebeenutilisedfromvariousbanksforfinancingactivites,working capital requirementandasset liabilitymanagement. These credit facilities are repayableasper termsofsanctionorondemandandsubjecttoannualreview.Theseborrowingscarryinterestratesbetween8.20%to8.65%(PY-8.15%to9.45%).

b) Unsecuredbankloanalsoincludes`251,357.00lakhs(PY-`217,847.00lakhs)raisedfromvariousbanks(throughatcall/shortnotice/term)andisrepayablebetween2daysto93days(PY-3daysto80days)andcarriesinterestratebetween6.10%to9.50%(PY-5.90%to6.50%).

iii) Inter-corporate deposit

OutstandingintercorporatedepositsasonMarch31,2018of`17,064.33lakhs(PY-`5,026.44lakhs)carriesinterestratesbetween9.64%(PY-6.04%to7.37%)andrepayable2-85days(PY-3daysto84days).

iv) Commercial paper borrowing

CompanyraisesunsecuredshorttermfundsbyissuingCommercialPapers.ThefacevalueoftheoutstandingborrowingasonMarch31,2018is 1,03,000lakhs(PY- 79,500.00lakhs).Thesearerepayableovernext3months(PY-3months)basedoncontractedmaturityandcarriesinterestratesrangingbetween7.48%to8.23%(PY-7.30%to7.90%).

v) Duringtheyear,therehasbeennodefaulteitheronprincipalorinterestpaymentforanyoftheborrowings.


(`inlakhs)



130 131

NOTE NO. 3.2: TRADE PAYABLE



TradePayable - Duetomicroandsmallenterprises(ReferNoteNo.22) 0.00 0.00 - Otherthanmicroandsmallenterprises i. tosubsidiaries 0.00 0.00 ii. toothers 225.11 102.78

Others

- Duetomicroandsmallenterprises(ReferNoteNo.22) 0.00 0.00

- Otherthanmicroandsmallenterprises

i. tosubsidiaries 0.00 0.00 ii. toothers 0.90 0.55

Total 226.01 103.33

NOTE NO. 3.3: OTHER CURRENT LIABILITIES



SecuredRedeemableNonConvertibleDebentures(NCD's)-Currentportion(ReferNoteNo.25)

6,000.00 0.00

SecuredLongtermloanfromBanks-Currentportion(ReferNoteNo.25) 17,737.00 6,666.67

Employeebenefits 138.85 106.56

Interestaccruedbutnotdueonborrowings 6,562.92 4,970.14

(including related party amount of `0.01lakhs,(PY-`10.68lakhs)

Statutory dues 44.48 8.35

MTMPayableonInterestRateSwaps&Futures 13,742.80 12,435.30

Marginmoney,Otherdeposits&payables 993.06 627.79

Total 45,219.11 24,814.81

NOTE NO. 3.4: SHORT TERM PROVISIONS



Foremployeebenefits 99.67 70.40

Forperformancelinkedvariablepay 35.00 150.00

Fortaxation 354.66 356.55

Contingentprovisionagainststandardassets(ReferNoteNo.24) 1,240.43 1,044.60

Provisionforlossonequityfuturesandoptions 5.75 0.00

Total 1,735.51 1,621.55


(`inlakhs)



130 131

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132 133

NOTE NO. 4.2: NON CURRENT INVESTMENTS

Particulars Face Value QuantityAs at

March 31, 2018As at

March 31, 2017

I. Trade Investments

a) Investment in Equity Shares (Unquoted and fully paid)

ClearingCorporationofIndiaLimited ` 10 5,000,000 500.00 500.00

Total Trade Investments (I) 500.00 500.00

II. Other Investments (Non Trade)

a) Investment in Equity Shares (Quoted and fully paid)

SunPharmaceuticalIndustriesLimited(PY-Nil)

`1/- 50,000 268.72 0.00

AsianPaintsIndiaLimited(PY-10,000) `1/- 0.00 91.82

BajajAutoLimited(PY-7,500) `10/- 0.00 208.83

HDFCBankLimited(PY-10,000) `2/- 0.00 120.03

Larsen&ToubroLimited(PY-15,000) `2/- 0.00 218.73

StateBankofIndia(PY-75,000) `1/- 0.00 182.58

Sub Total (a) 268.72 821.99

b) Investment in Government Securities (Quoted) 4

6.97%GS2026 (PYFaceValue-`34,500lakhs)

`34,500lakhs 35,848.05 35,848.05

6.79%GS2027 (PYFaceValue-Nil)

` 9000 lakhs 9,175.47 0.00


0.00 1,010.50

7.88%GS2030 (PYFaceValue-`500lakhs)

0.00 498.25


0.00 2,119.00


0.00 1,542.00


0.00 2,010.25

4a) Securitieshavingfacevalueof`43,500.00lakhs (PY`41,500.00lakhs)hasbeenkeptascollateralforvariousborrowingsandsettlement.

b) Securitieshavingbookvalueof`45,023.52lakhs (PY`35,848.05lakhs)heldinHTMportfolio

Sub Total (b) 45,023.52 43,028.05


(`inlakhs)



132 133

Particulars Face Value QuantityAs at

March 31, 2018As at

March 31, 2017

c) Investment in State Government Loan (SDL) (Quoted)

8.38%TamilNaduSDL2026 (PYFaceValue-`500lakhs)

0.00 500.35

Sub Total (c) 0.00 500.35

d) Investment in Mutual Fund (Quoted)

HDFCCharityFundforCancer Cure-ArbitragePlan

`10/- 10,000,000 1,000.00 1,000.00

(DirectOption100%DividendDonationoption)-(PY-100,00,000)

Sub Total (d) 1,000.00 1,000.00

e) Investment in Venture Capital Funds (Unquoted and partly paid)

TataVentureCapitalFunds-classAunits (PY:25,00,00,000)

`1/- 250,000,000 1,783.29 1,996.72

Netamountpaidperunit-`0.7133 (PY`0.7987)afterconsideringredemptionof `0.18665(PY`0.09218)perunit

BalancecommittedCapitalcontribution`250.09lakhs(PY`272.82lakhs)

Sub Total (e) 1,783.29 1,996.72

Total Non Trade Investments (II)=(a+b+c+d+e) 48,075.53 47,347.11

Total (I + II) 48,575.53 47,847.11

Aggregatebookvalueofquotedinvestments 46,292.24 45,350.39

Aggregate market value of quoted investments 43,118.94 45,200.17

Aggregate amount of unquoted investments 2,283.29 2,496.72

Alltheaboveinvestmentsarecarriedatcost.

NOTE NO. 4.3 : DEFERRED TAX ASSETS (NET)

Companyhasaccountedforthedeferredtaxassetsandliabilitiesinrespectofthetimingdifferencesthroughthestatementofprofitandloss.Thecomponentsofthedeferredtaxasset/liabilityareasunder.


Charge during the year


Deferred Tax Asset :

Provision for leave encashment & gratuity 145.86 (10.87) 134.99

Provision for payment of stamp duty 139.64 (6.18) 133.46

Other provisions 239.89 (95.22) 144.67

Provisionfornon-performingassets(NPA) 2,252.62 (894.87) 1,357.75

Total deferred tax assets 2,778.01 (1,007.14) 1,770.87


(`inlakhs)



134 135


Charge during the year


Deferred Tax Liability DepreciationonProperty,plantandequipment 447.79 (31.00) 416.79AmortisationofNCDIssueExpenses 28.87 20.77 49.64

476.66 (10.23) 466.43 Net Deferred Tax Asset / (Liability ) 2,301.35 (996.91) 1,304.44

NOTE NO. 4.4: LONG TERM LOANS AND ADVANCES



I. Secured, Considered Gooda. Loanagainstshares 6,825.00 8,554.33b. Corporate and other loans 85,908.84 79,654.03

Gross long term loans and advances 5 92,733.84 88,208.36Less:-Provisionfornonperformingassets 7,164.29 4,155.01Net long term loans and advanes 85,569.55 84,053.35

5Allnonperformingloansandadvanceshavebeentreatedasnon currentassets.

II. Unsecured, Considered Gooda. Loanagainstshares 0.00 585.14

b. Advanceincomeandwealthtaxpayments 5,769.40 5,883.72

c. Security deposits 57.52 282.76

d. Others 0.22 1.00

5,827.14 6,752.62

Total (I + II) 91,396.69 90,805.97

NOTE NO. 4.5 : OTHER NON CURRENT ASSETS



UnamortizedBorrowingcost 27.02 77.27

Total 27.02 77.27

NOTE NO. 5.1 : CURRENT INVESTMENTS

ParticularsFace

ValueQuantity



Non Trade InvestmentsInvestment in Mutual Fund Units (Unquoted)LICSavingsPlusFund-DirectGrowthPlan `10/- 112,781.82 31.00 7.50MarketValue`31.15lakhs(PY-`7.82lakhs) (PY-30,351.22)

Total 31.00 7.50


(`inlakhs)



134 135

NOTE NO. 5.2 : INVENTORIES (STOCK-IN-TRADE)



GovernmentSecurities(incl.TBills) 463,836.38 319,338.07Corporate Bonds 203,350.00 135,637.40Mutual Fund Units 0.00 34,925.00CommercialPapers/CertificatesofDeposits 48,225.26 28,380.69EquityShares 512.89 330.77

Total 715,924.53 518,611.93

i) Thecostforeachsecurityundertherelevantcategoryiscalculatedonweightedaveragebasis.Stock/currentinvestmentsarevaluedatlowerofcostormarketvalue,computedcategorywise.NetDepreciationineachcategoryisprovidedfor/chargedtotheProfit&Lossaccount.Netappreciation,inthecategory,ifany,isignored.Depreciationinonecategoryisnotsetoffagainstappreciationinanothercategory.

ii) Thestock-in-tradeasonMarch31,2018,includesGovernmentSecuritiesandTreasuryBillsofFaceValue`446,844.30lakhs(PY:`249,875.30lakhs)keptascollateralforshorttermborrowingsandotherpurposes.

NOTE NO. 5.3 : TRADE RECEIVABLES



Unsecured,Consideredgood- Outstandingforaperiodexceedingsixmonthsfromthedatethey

are due for payment0.00 0.00

- Others 4.02 0.91Total 4.02 0.91

NOTE NO. 5.4: CASH AND BANK BALANCES



I. Cash and Cash Equivalents

- Balancewithbanks 4,160.63 2,029.41

- CurrentaccountbalancewithRBI 69.62 20.11

- Cash on hand 0.08 0.14

- Fixeddepositswithoriginalmaturitylessthan3months 0.00 5,000.00

II. Other Bank Balances 6

- Fixeddepositswithoriginalmaturityofmorethan3monthsbutless than 12 months

454.24 148.05

- Fixeddepositswithoriginalmaturityofmorethan12months 345.00 900.00

Total (i + ii) 5,029.57 8,097.71

6a) Fixeddepositsof`21.75lakhs(PY-`21.75lakhs)pertainstocapitalrequirementforinterestratefuturesegmentwith NSE/BSE.

b) FixeddepositofNil(PY`500.00lakhs)iskeptwithHDFCbankasmarginmoneyforsettlementofGSectrades.


(`inlakhs)



136 137

c) Fixeddepositincludes(a)`395.00(PY-Nil)inthenameofNationalSecuritiesClearingCorporationLimitedtowardsmarginrequirementsforEquityFutures&Optionssegment,and(b)`250.00(PY-`250.00lakhs)withcustodian-HDFCBankformeetingmarginrequirementsforequitysegment.

d) Residualmaturityofabovefixeddepositsislessthanoneyear.

NOTE NO. 5.5: SHORT TERM LOANS AND ADVANCES



I. Secured, Considered Good

a. Loanagainstshares 188,551.87 172,072.52

b. Corporate and other loans 55,070.26 39,077.12

c. LendingunderCBLO 755.00 0.00

244,377.13 211,149.64


a. Corporate and other loans 16,486.05 0.00

b. MarginMoney/Deposits 7 2,756.25 2,620.25

c. Advances to suppliers 2.45 0.31

d. Other loans and advances 199.61 111.13

7 Kept `724.00 lakhs(PY-`563.00 lakhs)asMarginMoneywithCCILforCBLOborrowingand`1,940.25lakhs(PY-`1,940.25lakhs)withvariousstockexchanges&OthersforIRFTrading.

19,444.36 2,731.69

Total (I + II) 263,821.49 213,881.33

NOTE NO. 5.6: OTHER CURRENT ASSETS



Accrued interest 10,084.00 6,998.12

Other current assets 15,251.76 13,662.20

Total 25,335.76 20,660.32

NOTE NO. 6.1 CONTINGENT LIABILITIES (TO THE EXTENT NOT PROVIDED FOR)

Claims against the company not acknowledged as debt:

a) TheCompanyhadreceivedanoticefromtheCentralExciseauthoritiesinrespectoftheinteriorworkamountingto`20.80lakhcarriedoutbyacontractorattheerstwhileofficepremisesatKrishnaChambers,59,SirVithaldasThackerseyMarg,NewMarineLines,Mumbaiintheyear1997-98.TheCompanyhasbeenlegallyadvisedthatthereisnoliabilityundertheCentralExciseActandaccordinglynoprovisionhasbeenmadeagainstthisclaim.


(`inlakhs)



136 137

b) NoprovisionhasbeenmadeinrespectoffollowingdisputedtaxduesunderIncomeTaxact1961.Thetotaltaxliabilityunderdispute is `759.68lakhs(PY`947.35lakhs).

Disputed /Appeal Filed by Disputed tax liability Period to which dispute relates


IncomeTaxDepartment `76.39lakhs F.Y.1999-00 BombayHighCourtIncomeTaxDepartment `100.82lakhs F.Y.2000-01 BombayHighCourtIncomeTaxDepartment `248.08lakhs F.Y.2002-03 BombayHighCourtCompany `0.08lakhs F.Y.2007-08 AssessingOfficerCompany `3.54lakhs F.Y.2008-09 ACIT-TDS-3(2)Company `2.94lakhs F.Y.2009-10 ACIT-TDS-3(2)Company `10.72lakhs F.Y.2010-11 ACIT-TDS-3(2)Company `9.31lakhs F.Y.2010-11 AssessingOfficerCompany `249.95lakhs F.Y.2010-11 AssessingOfficerCompany `52.61lakhs F.Y.2011-12 AssessingOfficerCompany `5.24lakhs F.Y.2012-13 AssessingOfficer

c) Noprovisionhasbeenmadeforstampdutyonnon-governmentsecuritiestransactionsfortheperiodupto31st March 2006 (ReferNoteNo.21).

NOTE NO. 6.2 : CAPITAL AND OTHER COMMITMENTS:

a) BalancecommittedcapitalcontributiontoTataVentureCapitalFundasonMarch31,2018is`250.09lakhs(PY-`272.82lakhs).

b) Thepurchasesandsalesofthesecuritieseffectedon28thMarch2018,thetransactionshallbeaccountedonApril03,2018iesettlementdate.ThefacevalueofthesecuritiespurchasedandsoldonMarch28,2018areasgiveninthetablebelow.

Transaction detailsAs at

March 31, 2018As at

March 31, 2017

Purchaseofsecurities 80,000.00 65,500.00

Saleofsecurities 93,885.00 143,507.40

d) Openinterestinrespectofequityfuturescontractsonthebalancesheetdateisasfollows:

Security Outstanding on

Series Long/Short No. of Units Holding Rate Market Price

BajajFinance 31.03.2018 26.04.2018 Long 5,000 1,789.70 1,778.45

Hindustan Uniliver 31.03.2018 26.04.2018 Long 6,000 1,342.75 1,339.50

LICHousingFinance 31.03.2018 26.04.2018 Long 22,000 560.25 537.55

AmbujaCements 31.03.2017 27.04.2017 Long 12,500 235.94 236.80

ICICIBank 31.03.2017 27.04.2017 Long 12,500 278.55 278.45


(`inlakhs)



138 139

NOTE NO. 7.1 : INTEREST INCOME



a) Interest on Loans & advances- Loanagainstshares 18,652.39 22,069.86- Corporate and other loans 14,690.55 16,241.75

b) Interest/Discount on Investments - Governmentsecurities8 12,871.94 11,863.59- TreasuryBills 14,110.96 10,349.29- Corporatebonds9 15,100.99 10,121.28- Othermoneymarketinstruments,CBLO&Repo10 3,468.37 4,983.28

c) Others 279.00 373.148Interestincomefromgovernmentsecuritiesincludes`3,144.16 lakhs(PY`2,943.15lakhs)onlongterminvestmentsingovernment securities.9InterestincomefromcorporatebondsincludesNil(PY`11.87lakhs) onlongterminvestmentsincorporatebonds.10includesNil(PY`331.84lakhs)frominvestmentsincommercial papers.

Total (a+b+c) 79,174.20 76,002.19

NOTE NO. 7.2 : OTHER FINANCIAL SERVICES



Upfront/Processingfees 717.05 752.27Underwritingfees 158.25 95.78Others 206.05 119.97

Total 1,081.35 968.02

NOTE NO. 7.3 : PROFIT/(LOSS) ON SALE OF SECURITIES



Governmentsecurities 139.92 23,011.22Corporatedbonds (1,461.26) 206.65Equityshares 322.56 631.56Mutual fund units 707.52 1,050.00EquityDerivatives (106.52) (295.59)Currency&Interestrateswaps/Futures 21.25 (117.89)Others 10.27 184.21

TotaL (366.26) 24,670.16


(`inlakhs)



138 139

NOTE NO. 8 : OTHER INCOME



Interestincomeontaxrefunds 23.80 57.34Dividendincome11 229.88 186.18Netgain/(loss)onsaleofinvestments 758.26 554.31Provisionsnolongerrequiredwrittenback 80.60 34.69Miscellaneous income 14.17 11.31IncomefromVentureCapitalFund 232.60 138.7911Dividendincomeincludes`229.28lakhs(PY`158.34lakhs) beingdividendreceivedoninvestments

TotaL 1,339.31 982.62

NOTE NO. 9 : EMPLOYEE BENEFIT EXPENSES



Salaries,wages,allowances,etc. 1,254.49 1,884.91Contributiontoprovidentandotherfunds 101.75 79.21Staffwelfareexpenses 78.86 72.49

TotaL 1,435.10 2,036.61

NOTE NO. 10 : FINANCE COSTS



a) Interest expensesOnbankcreditline/overdraft 4,871.69 2,174.92On CP issuance 6,162.87 10,606.20OnCBLOborrowing 6,778.91 3,809.97OnNCDissuance 6,289.00 7,897.46On Call & term money 17,845.19 14,731.17OnborrowingsfromRBI 2,208.74 1,581.87On inter corporate deposit 590.89 315.48OnrefinancefromRBI 1,304.23 1,553.81Onrepoborrowings 8,123.23 7,581.24

54,174.75 50,252.12b) Otherborrowingcost 249.58 368.54c) InterestExpenseonIncomeTax 15.18 135.00

Total 54,439.51 50,755.66


(`inlakhs)



140 141

NOTE NO. 11 : OTHER EXPENSES



Advertisingexpenses 0.46 0.91Bank Charges 1.37 1.23Transactionandsettlementcharges 1,012.25 1,501.62Donations/CSRExpenses 540.41 450.20Electricitycharges 54.68 46.42Informationservices 132.80 157.37Insurancecharges 47.78 33.77Miscellaneousexpenses 3.46 2.00Officeexpenses 125.00 127.00PaymenttoAuditors:

-Asauditfees 13.50 13.83-Fortaxationmatters 1.50 1.50-Forotherservices 4.63 3.96-Outofpocketexpenses 0.27 0.40

Postage,telephoneandtelegrams 55.70 63.69Printingandstationeryexpenses 19.40 19.49Professional fees 418.28 325.75Ratesandtaxes 148.01 78.24Rent 54.09 45.87Repairsandmaintenance-building 45.98 26.40Repairsandmaintenance-others 89.90 85.89Sittingfeestodirectors 35.82 36.89Travelling,conveyanceandcarexpenses 72.42 54.58Amortisationofpremiumondebtinvestments 118.74 (17.35)(Profit)/Lossonsaleofasset 1.68 0.00

Total 2,998.13 3,059.66

NOTE NO. 12: LOAN PROVISION AND WRITE OFFS



Contingentprovisionagainststandardassets 184.39 (92.31)

Provision against non performing assets 3,009.28 (5,672.01)

BadDebtsWrittenoff 2,332.22 15,200.00

Total 5,525.89 9,435.68


(`inlakhs)



140 141

NOTE NO. 13 : SIGNIFICANT ACCOUNTING POLICIES

13.1 Basis of Preparation of Accounts

TheconsolidatedfinancialstatementshavebeenpreparedunderhistoricalcostconventiononaccrualbasistocomplyinallmaterialaspectswithapplicableaccountingprinciplesinIndia,theAccountingStandards(AS)specifiedundersection133oftheCompaniesAct2013,readwithRule7oftheCompanies(Accounts)Rules,2014,provisionsoftheCompaniesAct,2013(totheextentnotified)andReserveBankofIndiadirectionstoNon-BankingFinanceCompanies(NBFCs).ReferNoteno.15forSTCICommoditiesLimitedwhosefinancialshavebeenpreparedonthebasisonnetrealizablevalue.Theaccountingpolicieshavebeenconsistentlyappliedandareconsistentwiththoseused inthepreviousyear.Allassetsand liabilitieshavebeenclassifiedascurrentandnon-currentaspercompany’snormaloperatingcycleandothercriteriasetoutinthescheduleIIIoftheCompaniesAct,2013.


The preparation of financial statements, in conformity with generally accepted accounting principles, requires themanagementtomakeestimateandassumptionsthataffectsthereportedamountofassets, liabilitiesanddisclosureofcontingentliabilitiesasatthedateoffinancialstatementsandrevenue&expensesforthereportingperiod.Actualresultscoulddifferfromthoseestimates.Anyrevisiontoaccountingestimatesisrecognisedprospectivelyincurrentandfutureperiods.

13. 3 Principles of Consolidation

(i) (i) The consolidated financial statements relate to STCI Finance Limited (‘the Company’), and all of its subsidiarycompanies.ThefinancialstatementsoftheCompanyanditssubsidiariesareconsolidatedonlinebylinebasis,byadding together thebookvaluesof assets, liabilities, incomeandexpensesafter fullyeliminating the intragroupbalances and intra group transactions resulting in unrealized profits or losses. The financial statements of thesubsidiariesaredrawnuptothesamereportingdateasthatofparentcompany.

(ii) Totheextentpossible,theconsolidatedfinancialstatementsarepreparedusinguniformaccountingpoliciesforliketransactionsandothereventsinsimilarcircumstanceandarepresentedinthesamemannerastheCompany’sseparatefinancialstatementsinaccordancewithAccountingStandards(‘AS’)–21,“ConsolidatedFinancialStatements”.

13.4 Revenue Recognition

(i) Treasury Bills, Commercial Papers, Certificate of Deposits and Zero Coupon Bonds

Thedifferencebetweentheacquisitioncostandtheredemptionvalueisapportionedontimebasisandrecognisedasincome.Thesameisincludedinthecarryingamountofthesesecuritiesandtheaggregateamountisregardedascostforthepurposeofvaluation.

Incaseofdiscountedinstruments,discountincomerepresentstheincomeaccruedfromthedateofacquisitiontothedateofsale/maturity.Profit/Lossonsaleofdiscountedinstrumentsisthedifferencebetweenthesalepriceanditscarryingcostandispartofthetradingincome.

(ii) Government Securities & Corporate Bonds

a) IncomefromFixedIncomesecuritiesistakenintoaccountonaccrualbasis,providedthatinterestrateontheseinstrumentsispre-determinedandinterestisservicedregularlyandisnotinarrears.

b) TheamountspaidandreceivedtowardsaccruedinterestonthepurchasesandsalesofGovernmentsecuritiesandCorporateBondsarenettedoffat theyear-endandreckonedas incomeunder“InterestonGovernmentSecurities” and “Interest on Corporate Bonds” respectively. Accordingly, in respect of the transactions inGovernmentsecuritiesandCorporatebondsdealtwithonoutrightbasis,acquisitioncostandsaleproceedsarethecontractedpurchasepriceandsalepricerespectively.

c) Interestonfixedcoupondebtsecurityheldonbalancesheetdateisaccruedforexpiredperiodatcouponrate,andinterestonfloatingratesecuritiesisaccruedattheratedeterminedbythetermsofissue.




142 143

d) IncaseofInflationIndexedBonds(IIB),theinterestandconsiderationtowardspurchaseandsaleofIIBareindexedwiththeindexratioprevalentonthedateofthetransaction.TheamountspaidandreceivedtowardsaccruedinterestonthepurchasesandsalesofIIBarenettedoffattheyear-endandreckonedasincomeunder“InterestonIIB”.Accordingly,inrespectofthetransactionsinIIB,acquisitioncostandsaleproceedsarethecontractedpurchasepriceandsalepricerespectively.

(iii) Pass Through Certificates (PTCs)

Thedifferencebetweentheacquisitioncost(asreducedbytheproportionateamountofinflows)andtheredemptionvalue is apportioned ontimebasis (using the IRR at thetimeof acquisition) and recognised as accrued income.Thisaccrued income isadded to theacquisitioncost (as reducedby theproportionateamountof inflows)of therespectivePassThroughCertificates(PTCs)andthesumisregardedascost(bookvalue)forthepurposeofvaluationof stock-in-trade.Anyincomereceivedonprepaymentsisaddedtotheincome.

(iv) Collateralized Borrowing and Lending Obligation (CBLO) Transactions

TransactionsforborrowingandlendingunderCBLOarerecordedatmaturityvalue.Thedifferencepaidorreceivedonredemption is treatedasdiscountpaidonCBLO incaseofborrowinganddiscountearnedonCBLO incaseoflending.Thedifferencebetweenthediscountedvalueonborrowingdateorlendingdateasthecasemaybe,andtheredemptionvalueoftheinstrument,outstandingontheBalanceSheetdateisapportionedonthetimebasisandrecognizedasexpenseorincomerespectively.TheunamortiseddiscountonCBLOborrowingandlendingisdisclosedunderothercurrentassetsandothercurrentliabilitiesrespectively.

(v) Expenses / Income under Repo Transactions

Repo/reverserepotransactionsforgovernmentsecuritiesandcorporatebondsaretreatedasborrowing/lendingtransactions.Thedifferencebetweentheconsiderations(cleanpriceandtheaccruedinterest)betweenthe1st and 2nd legoftherepoandreverserepotransactionsisaccountedasRepoExpenditureorRepoIncome,asthecasemaybe,overtheperiodofthecontract.

(vi) Interest incomefromloantransactionsisrecognisedonaccrualbasisbyapplyingtheinterestrate implicit insuchcontractsexceptinthecaseofincomeonNon-PerformingAssets(NPAs)whichisrecognisedonrealisation,intermsofRBIGuidelines.Processing feeson loans is recognisedas incomeonaccrualbasis.Feesandadditional interestincomeondelayedpaymentsarerecognizedonaccrualbasisexceptincasewherethesamehasbeenwaivedoffbythecompetentauthorities.

(vii) Otherinterestincome(excludinginterestontaxrefunds)isrecognisedonaccrualbasis.Interestincomeontaxrefundsisrecognisedonreceiptofassessmentorder.

(viii) Equity Futures and Options

(a) TheinitialmarginandtheadditionalmarginpaidforenteringintoequityfuturesandoptionsaredisclosedundertheheadShortLoansandAdvancesintheBalanceSheetorundertheheadCashandBankBalances,ifgiveninformoffixeddeposits.

(b) “EquityOptionPremiumAccount”representsthepremiumpaidorreceivedforbuyingorsellingtheoptions,respectively.Thenetpremiumpaidorreceivedforbuyingorsellingtheoption,asthecasemaybe,isrecognisedasprofitorlossforallsettled/expiredcontracts.Similarly,ontheexpiryofthecontractsandonexercisingtheoptions,thedifferencebetweenthefinalsettlementpriceandthestrikepriceisrecognisedasprofitorloss.Gainsorlossesonstock/indexfuturesandoptioncontractsarerecognizedonsquaringupofpositionsoronexpiryofcontracts.


(d) Thedailymark-to-marketmarginpaidto/receivedinrespectofequityfuturestradesisdebitedorcreditedtothedailymark-to-marketequityfuturesaccountandthesameisdisclosedundertradereceivable/loansandadvancesortradepayable/currentliabilities,asthecasemaybe.




142 143

(e) “IncomeonEquityFuturesandOptions”representsthenetprofitorlossonsettled/expiredpositionsinequityindexandstockfuturesandoptionsafteradjustingbrokerageandothertransactioncosts.

(ix) Commodity Futures

(a) TheinitialmarginandtheadditionalmarginpaidonopenpositionsofcommodityfuturesaredisclosedundertheheadLoansandAdvancesintheBalanceSheet.

(b) Thedailymark-to-marketmarginpaidto/receivedfrominrespectofcommodity futurestrades isdebitedorcreditedtothedailymark-to-marketmargincommodity futuresaccountandthesame isdisclosedundertheheadtradereceivableortradepayable intheBalanceSheet,asthecasemaybe.Thebalance inthisaccountrepresentsnetunrealisedgainsorlossesonopenpositions.


(d) “IncomeonCommodityFutures”representsthenetprofitorlossonsettled/expiredpositionsincommodityfuturesafteradjustingbrokerageandothertransactioncosts.

(x) Currency and Interest Rate Futures

a) Theinitialmarginandtheadditionalmargininformoffixeddeposits/cashpaidforenteringintocontractsforCurrencyandInterestRateFuturesaredisclosedundertheheadCashandbankbalances/ShortTermLoansandAdvancesasthecasemaybeintheBalanceSheet.

b) Thedailymark-to-marketmarginpaidto/receivedfromthecustodianinrespectofCurrencyandInterestRateFutures contracts are debited/credited to the daily mark-to-market margin Currency/Interest Rates Futuresaccount,asthecasemaybe,ondailybasisandthesameisdisclosedunderShortTermLoansandAdvancesorCurrentliabilities,asthecasemaybe.

c) TheOpenpositionsaremarkedtomarketonthebalancesheetdateandnetlosses,ifany,areprovidedforwhilenetgains,ifany,arenotrecognised.

d) Gainsor lossesonCurrencyand InterestRateFutures contractsare recognizedonFirst inFirstOutbasis,onsquaringupofpositionsorexpiryofcontracts,whicheverisearlier.

(xi) Interest Rate Swaps (IRS)

Gainsor losseson InterestRateSwaps (IRS)areaccounted foron settlementdatesasper the termsof contract. Thenetmark-to-marketinrespectofopenpositionsasattheyear-endisaccountedforonaccrualbasis.

(xii) Hedged Portfolio

a) Securities:-SecuritiesorportfolioofsecuritiesarehedgedusinghedginginstrumentspermittedbyRBIsuchasInterestRateDerivatives.Thesecuritiesthataredesignatedashedgedaretransferredtohedgeportfolioatlowerofcostormarketvalueonthedateofthehedge.

b) Swaps:-Swapsthataredesignatedashedgetoanyassetaremarkedtomarketandthegainorlossonthehedgeswapandthehedgedportfolioissetoff;whiletheresultantnetlossisbeingprovidedfor,thenetgainisignored.Gainsorlossesonterminationorre-designationofhedgeswapsisrecognisedagainsttheoffsettinggainorlossrecognisedonthedesignatedassetorliability.

(xiii) IncaseofsecuritiestransferredfromStock-in-TradetoInvestmentAccount,thesameisreckonedassaleatmarketprice.Resultantgainsorlossesarerecognisedintheprofitandlossaccountonthedateoftransfer.

(xiv) Profit/LossfromtradinginEquitiesandexchangetradedderivativesisrecognisedonthebasisofweightedaveragecost on trade dates. Profit/Loss from trading in Government Securities, FI & Other Bonds, other securities arerecognisedonthebasisofweightedaveragecostonsettlementdates.




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(xv) Underwriting Fees

Underwritingfeeearnedinrespectofdevolvement’sunderunderwritingcommitments,totheextentapportionabletothecostprotanto,arereducedfromthecostofsecuritiesdevolvingandtheremainingamountisreckonedasincome.

(xvi) Brokerage, Securities Transaction Tax (STT) and Other Payments

TheBrokerage,STTandotherpaymentsmadeinconnectionwiththeacquisitionofsecuritiesareaddedtothecostofacquisition.TheamountshownundersaleofsecuritiesisnetofBrokerageandSTT.

(xvii) Front-end fees /Arrangers’ Fee

Front-end/Arrangers’feesreceivedonsubscriptiontoFI&OtherBondsarereckonedasincome.

(xviii) Brokerage and Commission Earned

Brokerageandcommissioninrespectissuemarketingandresourcemobilizationareaccruedtotheextentofavailabilityofinformation.Portfoliomanagementandotherfeesareaccountedforonaccrualbasis.

(xix) Dividendincomeisrecognisedwhentherighttoreceivedividendisestablished.Bonusentitlementsarerecognisedonex-bonusdates.

13.5 Investments

IntermsofNonBankingFinancialCompaniesPrudentialNormsDirectionissuedbyRBI,longterminvestmentsarevaluedatcostcomprisingacquisitioncostandincidentalexpenseslesspermanentdiminutioninvalue,ifany.Provisionfordiminutioninthevalueoflongterminvestmentsismadetorecogniseadeclineotherthantemporaryinthevalueofinvestments.Inthecaseofdebtinstrumentswherethecostofacquisitionismorethantheredemptionvalue,thedifferenceisamortizedovertheperiodtillmaturityandchargedtotheProfitandLossaccount.

GovernmentsecuritiesarealsoheldunderHTM(HeldtoMaturity)category.ThestockistransferredfromHTMtotradingportfolioatcostormarketvalue,whicheverislower.Theprofitonsaleofsecurities,ifanyfromHTMcategoryshallfirstbetakentotheProfit&LossAccountandthereafterbeappropriatedtotheCapitalReserveAccount(netoftax).LossonsaleshallberecognizedintheProfit&LossAccount.Thebalanceinthereserveaccountisutilizedaspertheregulatoryguidelines.Noaccountingadjustmentaremadefordiminution/appreciationinvalueofsuchinvestments.

Investmentsother than long-term investmentsareclassifiedascurrent investmentsandvaluedat costormarketvaluewhicheverisless.

13.6 Classification and Valuation of Stock-in-Trade / Current Investments

Companyprovidesnetdepreciationcategory-wiseforsecuritiesheldasstock-in-trade/currentinvestments.

Allthesecuritiesacquiredwiththeintentionoftradingareconsideredasstock-in-tradeandshownundercurrentassets.

(i) Allquotedsecurities(stock-in-trade)aregroupedintothefollowingcategories.

EquityShares

Preference Shares

DebentureandBonds

Govt.Securities(includingTBills)

Mutual Fund Units

Others

(ii) Stock/currentinvestmentsarevaluedatlowerofcostormarketvalue,computedcategorywise.

Thecostiscalculatedonweightedaveragebasis.MarketvalueforfixedincomesecuritiesisdeterminedbythepricesdeclaredbyFixedIncomeMoneyMarketandDerivativesAssociationofIndia(FIMMDA).Asregardsthetaxfreebonds,forthepurposeofdeterminingmarketvaluepricequotedontherecognisedstockexchangesontherelevantdayis




144 145

alsoconsidered.Itisvaluedatlowerofweightedaveragecost,FIMMDAvalueormarketvalueasperrecognisedstockexchange.Marketvalueforequitysharesisdeterminedbythepricesobtainedfromtherecognisedstockexchanges.

However,inlinewiththeRBIandFIMMDAguidelines,CertificatesofDeposit(CDs)andCommercialPapers(CPs)oflessthanoneyeartenorarevaluedatcost.Similarly,TreasuryBillsheldasstock-in-tradearevaluedatcarryingcost(asexplainedatSl.No.13.4(i)above).

(iii) UnquotedunitsofMutualFundarevaluedatNetAssetValue(NAV)orcostwhicheverislower.

(iv) Netdepreciationineachcategoryisprovidedfor/chargedtotheProfitandLossaccount.Netappreciation,inthecategory,ifany,isignored.

(v) Depreciationinonecategoryisnotsetoffagainstappreciationinanothercategory.

(vi) TheoutstandingswapsheldfortradingpurposearemarkedtomarketonthebalancesheetdateonthebasisofyieldratesdeclaredbyFIMMDA.

13.7 Property, Plant and Equipment (Fixed Assets) and Depreciation

Property,PlantandEquipmentareinitiallyrecognisedatcostandarestatedatoriginalcostlessaccumulateddepreciation.Costincludesalldirectcostsattributabletoacquisition,installationandcommissioning.

Depreciationonfixedassetsotherthanbuildingsandimprovementtoleaseholdpropertyisprovidedonthestraightlinemethodbasedontheestimatedusefullivesoftheassets.EffectiveApril1,2014,estimatedusefullifeoffixedassetshasbeenrealignedasperScheduleIIoftheCompaniesAct,2013.

BuildingsaredepreciatedonwrittendownvaluemethodattheapplicableratesbasedonestimatedusefullifeprescribedinScheduleIItotheCompaniesAct,2013.

Depreciationonimprovementstoleaseholdpropertyisprovidedonstraightlinemethodattheratesarrivedatonthebasisoftheprimaryleaseperiod.

Fixedassetscosting less than`0.05 lakh,areprovidedwith100%depreciation in theyearofpurchase.Depreciation isprovidedonproratabasisforassetspurchasedandsoldduringtheyear.

Thedetailsofestimatedusefullifeassets(alignedwithScheduleIItotheCompaniesAct,2013)areasunder.

Description of Asset Type of Asset Estimated useful Life of Asset wef 01.04.2014

Building Tangible 60 years

FurnitureandFixtures Tangible 10 years

Computers-EndUserDevices Tangible 3 years

Computers–Servers&Network Tangible 6Years

ComputerSoftware Intangible 3 years

ElectricalInstallations Tangible 10 years

AirConditioners Tangible 10 years

Vehicles Tangible 8 years

OfficeEquipment’s Tangible 5 years


Provisionforincometaxcomprisesthecurrenttaxprovisionsandthenetchangeinthedeferredtaxassetorliabilityfortheyear.Currenttaxisdeterminedastheamountoftaxpayableinrespectofthetaxableincomefortheyear.Deferredtaxassetorliabilityreflectstheimpactofcurrentyeartimingdifferencesbetweentaxableincomeandtheaccountingincomefortheyearandthereversaloftimingdifferencesofearlieryears.Deferredtaxassetsarerecognisedonlytotheextentthereisareasonablecertaintyofsufficientfuturetaxableincomebeingavailableforitsrealisation.DeferredtaxassetsandliabilitiesaremeasuredusingthetaxratesandtaxlawsthathavebeenenactedorsubstantivelyenactedbytheBalanceSheetdate.




146 147

TheeffectondeferredtaxassetsandliabilitiesofachangeintaxratesisrecognizedintheStatementofProfitandLossintheperiodofenactmentofthechange.

13.9 Securities Accepted as Pledge and Margin Money

Securitiesornon-cashcollateralacceptedfromaborrowerarenotrecognisedasanasset.MarginmoneyreceivedagainstmargincallisshownunderOtherCurrentLiabilities.


Themonthlyrentpaymentsmadeforthepremisesacquiredonleasearechargedtoprofitandlossaccountonaccrualbasis.


(i) Provident Fund

Contributionsasrequiredunderthestatute,madetotheProvidentFund(DefinedContributionPlan)arechargedtotheProfitandLossAccount.ThereisnoobligationotherthanthemonthlycontributionpayabletotheRegionalProvidentFundCommissioner.

(ii) Gratuity

Theliabilityoffuturegratuitybenefitsisbasedontheactuarialvaluationobtainedattheyearend.TheCompanyhascreatedatrustforfuturepaymentofgratuitieswhichisfundedthroughGratuitycumLifeAssuranceSchemeofLIC(DefinedBenefitPlan).

(iii) Other Benefits

Otherlongtermemployeebenefitscompriseleaveencashmentandareprovidedforbasedontheactuarialvaluationandisnotfunded.Shorttermcompensatedabsencesareprovidedonundiscountedbasis.TheProjectedUnitCreditmethodhasbeenusedtodeterminetheliabilityonaccountofgratuityaswellasleaveencashment.TheactuarialgainorlossisimmediatelyrecognisedintheProfitandLossAccount.

13.12 Borrowing Cost

BorrowingcostsareinterestandancillaryexpenditureincurredbytheCompanyinconnectionwiththeborrowingoffunds.InterestischargedtotheProfitandLossAccountonaccrualbasis.Ancillaryexpenditureincurredinconnectionwiththearrangementofborrowingisamortisedoverthetenureoftherespectiveborrowings.Borrowingcostotherthandirectlyattributabletofixedassetsaredirectlyrecognisedasexpenseintheperiodinwhichtheyareincurredandarechargedtorevenue.


Anassetistreatedasimpairedwhenthecarryingcostofassetexceedsitsrecoverablevalue.Animpairmentloss,ifany,ischargedtotheProfitandLossAccounttotheextentcarryingamountofassetsexceedstheirrecoverableamountintheyearinwhichanassetisidentifiedasimpaired.

13.14 Earnings Per Share (E.P.S.)

Thebasicearningspershareiscomputedbydividingthenetprofitaftertaxbyweightedaveragenumberofequitysharesoutstandingduringthereportingperiod.Dilutedearningsperequityshareiscomputedbydividingthenetprofitaftertaxbytheweightedaveragenumberofequitysharesanddilutivepotentialequitysharesoutstandingduringthereportingperiod.

13.15 Provisions and Contingencies

TheCompanycreatesaprovisionwhenthere isapresentobligationasaresultofpastevent thatprobably requiresanoutflowofresourcesandareliableestimatecanbemadeoftheobligation.Adisclosureofcontingentliabilityismadewhenthereis:(a)apossibleobligation(obligationisapossibleobligationif,basedontheevidenceavailable,itsexistenceatthebalancesheetdateisconsiderednotprobable)thatarisesfrompasteventsandtheexistenceofwhichwillbeconfirmedonlybytheoccurrenceonnon-occurrenceofoneormoreuncertain futureeventsnotwhollywithin thecontrolof theenterprise(b)apresentobligationthatarisesfrompasteventsbutisnotrecognisedbecause(i)itisnotprobablethatanoutflowembodyingeconomicbenefitswillberequiredtosettletheobligation;or(ii)areliableestimateoftheamountoftheobligationcannotbemade.




146 147

13.16 Advances and Provision for Non Performing Assets (NPA) and Standard Assets (SA)

AdvancesareclassifiedasperNon-BankingFinancial(Non-DepositAcceptingorHolding)CompaniesPrudentialNormsinto“Performing”(StandardAssets-SA)and“Non-PerformingAdvances”(NPAs)andfurtherintosub-standard,doubtfulandlossassetsbasedontheperiodforwhichtherepaymentinstalmentorinteresthasremainedinarrears.ProvisionismadeinrespectofNPAandSA,subjecttotheminimumprovisionrequiredasperNBFCPrudentialNorms,orwhereadditionalspecificrisksareidentifiedbythemanagement,basedonsuchidentification.

13.17 Foreign Exchange Transactions

Expensesandremittancesinforeigncurrencyareaccountedatexchangeratesasonthetransactiondate.

Notes forming part of consolidated financial statements

14. Details of entities considered in the consolidated financial statements

Name of the entity

Net Assets (Total assets minus total liabilities)

Share in profit or loss (PBT)

As%ofconsolidated net

assets

Amount (`inlakhs)

As%ofconsolidated profitorloss

(PBT)

Amount (`inlakhs)

STCIFinanceLimited(parent)12 68.06% 105791.29 63.76% 10,586.46

Subsidiaries(Indian)

STCIPrimaryDealerLimited 31.83% 49,469.41 36.14% 6,000.66

STCICommoditiesLimited 0.11% 169.27 0.10% 16.25

Subsidiaries(Foreign) - - - -

MinorityInterestsinallsubsidiaries - - - -

Associates(Indian) - - - -

Associates(Foreign) - - - -

JointVentures(Indian) - - - -

JointVentures(Foreign) - - - -

Total 100.00% 155,429.97 100.00% 16,603.37

12AfteradjustingforIntergroupinvestmentsandprofit.

15. The subsidiary companies considered in the consolidated financial statements are:

Name of Subsidiary Company Country of Incorporation Proportion of ownership interest

STCIPrimaryDealerLimited(STCIPD)13 India 100%

STCICommoditiesLimited14 India 100%

13STCIPDwasincorporatedinOctober2006asawhollyownedsubsidiaryofthecompanyforundertakingPrimaryDealershipbusinessofgovernmentsecurities.

14STCICommoditiesLimitedwasincorporatedonSeptember20,2004withtheobjectofcarryingonthebusinessoftradingand broking in commodities on the various Commodity Exchanges i.e.Multi Commodity Exchange (MCX) andNationalCommodity and Derivative Exchange (NCDEX), Mumbai. The business operations of STCI Commodities Limited werediscontinuedwitheffectfrom20thSeptember2011andpresentlythecompanyisintheprocessofliquidatingitsassetsandsettlingtheoutstandingliabilities.




148 149

Therefore,onthegroundsofprudenceandconsideringtherequirementsofAccountingStandard-1(AS)on“DisclosureofAccountingPolicies”theaccountsofSTCICommoditiesLimitedhavebeendrawnaspernetrealizablevalue.Consequently,adjustmentshavebeenmadetothecarryingvalueofassetstoreflectthetrueandfairviewofthefinancialposition.

The operational results of STCI Commodities Limited have been considered as discontinued operations under AS – 24“DiscontinuingOperations”.Thesummariseddetailsofdiscontinuingoperationsareasunder.

ThecarryingamountofthetotalassetsandliabilitiesofSTCICommoditiesLimited(discontinuingoperations)asonMarch31,2018areasunder

Particulars As at March 31, 2018 As at March 31, 2017

Totalassets 178.33 163.47

Totalliabilities 9.06 10.45

Net assets 169.27 153.02

Therevenueandexpensesinrespectofdiscontinuedoperationsareasunder.


For the year endedMarch 31, 2017

Totalrevenue 19.71 10.92

Totalcostandexpenses 3.46 2.07

Otherincome/(loss)beforetaxes 16.25 8.85

Taxexpenses 0.00 0.00

Netincome/(loss)fromdiscontinuedoperations(aftertax) 16.25 8.85

16. Expenditure in Foreign Currency

Sr. No.



1 OnTravel Nil 5.09

2 OnInterest Nil Nil

3 On Others Nil Nil

EarningsinForeignCurrency:`Nil(PY-Nil)

17. AsubsidiaryhasbeendealinginGovernmentSecuritiesonbehalfoftheConstituentsthroughtheConstituentSGLaccountopenedwithRBI.Thetransactionsundertakencovermoniesreceivedfromtheconstituentsandalsophysicalstenderedby themforconversion intoSGLAccount.AsonMarch31,2018, the facevalueof thesecuritiesheldonbehalfof theconstituentsis`1,884,800.50lakhs(PY-`1,726,751.10lakhs).

18. Earning Per Share (EPS)

TheEPScalculationasperAS-20isgivenbelow:



ProfitafterTax(`inlakhs) 11,160.10 24,312.12

Weightedaverageno.ofshares(F.V.`100/-) 38,000,000 38,000,000

EPSfortheyear–Basic&Diluted(`) 29.37 63.98


(`inlakhs)



148 149

19. Assets taken on Lease

The office premise at various places have been acquired under operating lease on payment of monthly rentals. Futureminimumleaserentalrelatingtonon-cancellableoperatingleaseperiodareasunder.


Not later than 1 year 54.08 48.54

Laterthan1yearbutnotlaterthan5years 91.05 97.80

Laterthan5years Nil Nil

(ìnlakhs)

Particulars FY 17-18 FY 16-17

Paymentmadeduringtheyear(excludingtaxes) 52.89 45.87

Leaserentalcharges(includingcancellablelease)arerecognisedinthestatementofprofitandloss.

20. Related Party Transactions

BankofIndia,byvirtueofitsshareholdingbeinginexcessof20%,isconsideredtobearelatedparty.ThedetailsofthetransactionsenteredintowithBankofIndiaaregivenbelow:-

(ìnlakhs)

Nature of transaction For the year ended March 31, 2018


Transactions during the year Bank of India Bank of India

PurchaseofGovt.Securities/TreasuryBills 55,864.72 9,135.35

SaleofGovernmentSecurities/TreasuryBills 63,861.73 169,074.68

Saleofcorporatebondsandothermoneymarketinstruments - -

Loansavailed15 156,976.67 139,534.93

Repayment of loan availed 15 181,821.37 124,692.48

Maximumloan(availed)outstandingduringtheyear 24,848.91 24,883.24

Fixeddeposits(placedduringtheyear) 101.99 95.79

Interestexpensesfortheyear 127.33 202.92

InterestIncomeonFDR(accrued) 7.09 7.25

DividendPaid - 2845.95

Processingfees/Chargespaid 74.33 62.05

Sittingfees&otherexpensespaid 0.20 4.32

Outstanding as at the end of the year

LoanOutstanding(availed) - 24,818.01

FixedDeposit 101.99 95.79

Interestaccruedbutnotdue(Expenses) 0.01 10.68

Interestaccruedbutnotdue(Income) 4.78 4.60

Balance in current account 30.34 4.77 15 Includesamountsavailedandrepaidfromoverdraftandshorttermloanaccountsandcallmoney.

Allthetransactionsdetailedaboveareenteredintointheordinarycourseofbusiness.


(ìnlakhs)



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Remuneration to Key Management Personnel:

Sr. No.

Particulars Year endedMarch 31, 2018

Year endedMarch 31, 2017

(i) Mr Pradeep Madhav (ManagingDirector&CEOFrom24.01.17)

91.66 16.61

(ii) Mr.SurendraKBehera (DyManagingDirectorFrom04.05.2016upto28.03.2018)

58.70 47.37

(iii) MrYogeshGaat(ManagingDirector&CEOupto24.12.2016) - 87.98

(iv) Mr.KamleshRathi 37.56 31.72

(v) Ms.SuparnaSharma 32.18 31.06

TherewasnotransactionwithanyoftherelativesofKeyManagementPersonnelduringtheyear.

Remunerationincludessalary,perquisiteandprofitsinlieuofsalaryasdefinedunderSection17oftheIncomeTaxAct,1961andcompany’scontributiontoProvidentfund.

21. Nostampdutyhasbeenpaidonnon-governmentsecuritiestransactions inviewoftheon-goingdeliberationsbetweenGovernmentofMaharashtraandvariousrepresentativebodiesoftheparticipant’sviz.IBA,FIMMDA,PDAIandAMFI,ontheapplicabilityofstampdutyonnon-governmentsecurities’transactions.TheCompanyhassofarnotreceivedanyclaimforstampdutyfromtheStampOfficeinrespectofnon-governmentsecuritiestransactions.

Forthecurrentyear,provisionof`14.59lakhs(PY`24.04lakhs)calculatedonthebasisof0.01%ofthevalueoftransactionasstipulatedintheMaharashtraStampAct,(erstwhileBombayStampAct,1958)asamended,hasbeenmadeforstampdutyfordirectdealsofnongovernmentsecurities.TheprovisionasonMarch31,2018forstampdutyonnon-governmentsecuritiestransactionsstandsat`400.22lakhs(PY`385.63lakhs).InthelightofanassurancegivenbytheGovernmentofMaharashtratotheIndianBanks’Association,theliabilityonnon-governmentsecuritiestransactionsfortheperiodupto31stMarch2006hasnotbeenprovided.

22. TheCompanyhasnotreceivedanyintimationfromitssuppliersregardingtheirstatusundertheMicro,SmallandMediumEnterprisesDevelopmentAct,2006.Accordingly,disclosures,ifany,relatingtoamountsunpaidasattheyearendtogetherwithinterestpaid/payablehasnotbeengiven.

23. Segment Reporting

a) Business Segment :

Themanagementhas identifiedLending,GiltsandNon-Giltsasreportablesegmentbasedonrisk, returnandtheregulatoryauthoritiesforreporting.

b) Segment Revenues and Expenses :

The segmental revenues and expenses include all directly attributable to the respective segment. Administrativeexpenses,personnelcostsanddepreciationonfixedassetscannotbeidentifiedwithanyparticularsegmentandareconsideredasunallocable.

c) Segment Assets and Liabilities :

Thesegmentalassetsandliabilitiesincludealldirectlyattributabletotherespectivesegment.Allotherassetsandliabilitiesnotattributabletoanyparticularsegmenthavebeengroupedunderunallocatedassetsandliabilities.

d) Geographical Segment :

TheCompanydoesnothavegeographicalsegmentinthecontextoftheAccountingStandard17onSegmentReportingissuedbytheInstituteofCharteredAccountantsofIndia.


(`inlakhs)



150 151

Thedetailedsegmentalinformationisasunder:-

For the year ended March 31, 2018 (`inlakhs)

Segment Information Gilts Non-Gilts Lending Unallocated Total Discontinued broking op.

Revenue

FromExternalClient 28,108.66 17,945.75 34,265.08 909.11 81,228.60 19.71

Inter-Segment 0.00 0.00 0.00 0.00 0.00 0.00

Total Revenue 28,108.66 17,945.75 34,265.08 909.11 81,228.60 19.71

Segment Result 3,566.12 4,532.06 11,291.14 19,389.32 16.25

Unallocatedexp(net) (2,559.35) 0.00

OperatingProfit 16,829.97 16.25

Depreciation (242.85) 0.00

ExceptionalIncome 0.00 0.00

Profit Before Tax 16,587.12 16.25

TaxExpenses (5,443.27) 0.00

Profit After Tax 11,143.85 16.25

Other Information

Segment Assets 515,181.65 274,513.78 347,233.75 19,143.13 1,156,072.31 178.33

SegmentLiabilities 501,292.44 238,829.60 259,443.53 1,246.04 1,000,811.61 9.06

For the year ended March 31, 2017 (`inlakhs)

Segment Information Gilts Non-Gilts Lending Unallocated Total Discontinued broking op.

Revenue

FromExternalClient 46,301.67 16,471.64 39,182.27 667.91 102,622.99 10.92

Inter-Segment 0.00 0.00 0.00 0.00 0.00 0.00

Total Revenue 46,301.67 16,471.64 39,182.27 667.91 102,622.99 10.92

Segment Result 26,024.86 5,539.39 8,931.53 40,495.78 8.85

Unallocatedexp(net) (3,160.40) 0.00

OperatingProfit 37,335.38 8.85

Depreciation (245.99) 0.00

ExceptionalIncome 0.00 0.00

Profit Before Tax 37,089.39 8.85

TaxExpenses (12,786.12) 0.00

Profit After Tax 24,303.27 8.85

Other Information

Segment Assets 380,508.40 171,211.79 296,915.38 56,467.75 905,103.32 163.47

SegmentLiabilities 354,982.40 153,057.91 216,357.44 36,588.72 760,986.47 10.45




152 153

24. Provision for Standard assets [email protected]%of the outstanding standard assets and accordingly standard assetprovision of `184.39 lakhs (PYreversalof`92.31 lakhs)hasbeenmadeduringtheyear.Theadditionalstandardassetprovisioncontinuestobemaintainedat`200.00lakhs(PY`200.00lakhs).

25. StandardLoansandAdvancesof`158,187.91 lakhs (PY`142,717.54 lakhs)havebeencharged in favourofDebentureTrustee and Banks for outstanding Secured Redeemable Non-Convertible Debentures (NCD’s) of ` 65,000.00 lakhs (PY`65,000.00lakhs)andSecuredLongTermBankLoanof`57,666.00lakhs(PY-`45,000.00lakhs).

26. CSR Expenses

Duringtheyear,`540.41(PY`450.20)lakhshasbeenspenttowardsCSRactivities,asrequiredtobespentintermsofSection135oftheCompaniesAct,2013andCompanies(CorporateSocialResponsibilitypolicy)Rules,2014.DetailsofCSRexpensesfortheyearareasunder.

Sr. No. Particulars 2017-18 2016-17

1 Construction/acquisitionofanyasset Nil Nil

2 ContributiontoPrimeMinistersReliefFund 384.97 397.40

3 ContributiontoothercharitableorganisationseligibleforCSRpurpose

155.44 52.80

Total CSR Expenses 540.41 450.20

AmountPendingtobeSpent Nil Nil

27. ThegratuityliabilityoftheemployeesiscoveredbyaGroupGratuitySchemeoftheLifeInsuranceCorporationofIndia. ThedisclosureasrequiredbyAccountingStandard-15“EmployeeBenefits”issuedbytheInstituteofCharteredAccountantsofIndiaisasunder.

Assumptions 2017-18 2016-17

Mortality rate IALM(2006-08)Ult. IALM(2006-08)Ult.

Interest/DiscountRate 7.40%-7.54% 6.66%-6.69%

Rate of return of Plan Assets 7.40%-7.53% 6.66%-7.00%

SalaryEscalation 5-10% 5-10%

Gratuity (2017-18) Gratuity (2016-17)

Changes in present value of obligation

OpeningDefinedBenefitObligation 140.01 113.36

InterestCost 8.89 8.37

Current Service Cost 13.25 11.85

PastServiceCost(vestedbenefits) 35.07 0.00

Transferinofliability 0.18 10.00

Actuarial(Gains)/Losses (7.23) 9.59

BenefitsPaid (13.84) (13.16)

Closing Defined Benefit Obligation 176.33 140.01

Changes in the fair value of plan assets

Fairvalueofplanassetsatbeginningofyear 122.23 104.93

Adjustmenttoopbalance (2.58) 6.16

Transferinoffunds 0.18 0.00


(`inlakhs)



152 153

Expectedreturnonplanassets 9.13 7.64

Contributions 19.36 13.51

Benefitspaid (13.84) (13.16)

ActuarialGains/(Losses) 2.17 3.15

Fair value of plan assets at the end of the year 136.65 122.23

Actuarial Gain/ (loss) recognised

ActuarialGain/(Loss)fortheyear-obligation 7.23 (9.59)

ActuarialGain/(Loss)fortheyear-planassets 2.17 3.15

Net Actuarial Gain/ (Loss) recognised for the year 9.40 (6.44)

Amount to be recognised in Balance Sheet

Presentvalueofobligationasattheendoftheyear 176.33 140.01

Fair value of plan assets as at the end of the year 136.65 122.23

Funded status (39.68) (17.78)

Net Asset recognised - Prepaid / (provisions) (39.68) (17.78)

Expenses Recognised in Profit and Loss account


InterestCost 8.89 8.37

PastServiceCost(vestedbenefits) 35.07 0.00

NetActuarialloss/(gain)recognisedintheyear (9.40) 6.44

Expectedreturnonplanassets (9.13) (7.64)

Expenses recognised in Profit & Loss Account 38.68 19.02

Experience Adjustment – Gratuity

Particulars 31.03.2018 31.03.2017 31.03.2016 31.03.2015 31.03.2014

DefinedBenefitObligation 176.33 140.01 113.37 118.08 98.74

Plan assets 136.65 122.23 104.93 83.29 72.83

Surplus/(Deficit) (39.68) (17.78) (8.44) (34.79) (25.91)

Experienceadj.onplanliabilities 0.13 (1.87) 22.74 (3.27) (10.55)

Experienceadj.onplanassets 2.17 3.15 (0.28) 0.32 (0.01)

LeaveEncashment:Provisionof`0.58lakhs(PY`94.07lakhsprovisionmade)hasbeenreversedduringtheyearforlongtermleaveencashmentonactuarialvaluationbasis.Provisionof`9.14lakhs(Previousyear`8.17lakhsreversal)hasbeenmadeduringtheyearonaccountofshorttermcompensatedabsences.

28. ThedetailsofprovisionsasperAS29–Provisions,ContingentLiabilitiesandContingentAssetsareasunder.

Particulars Stamp Duty PLVP *

OpeningBalanceasatApril01,2017 385.63 759.35

Additions 14.59 35.00


(`inlakhs)



154

Particulars Stamp Duty PLVP *

Utilisation 0.00 491.33

Reversal 0.00 55.80

ClosingBalanceasatMarch31,2018 400.22 247.22

* Performance Linked Variable Pay

ProvisionforstampdutyismadeforstampdutypayableunderMaharashtraStampAct,(erstwhileBombayStampAct,1958)inrespectofdirectdealsforNonSLRtransactions.Provisionof`35.00lakhs(PY`685.00lakhs)ismadeduringtheyearforpaymentofperformancelinkedvariablepay.

29. DepreciationonBuildingsischargedonWrittendownvalue(WDV)basisexceptforbuildingownedbysubsidiarySTCIPD,constitutingapproximately38.55%of the total costofbuildingsownedby thegroup,which is chargedonStraightLineMethod(SLM)basis.

30. TheBoardofDirectorsatitsmeetingheldonMay02,2018hasrecommendedadividendof8%(`8/-perequityshareof`100/-each)forthefinancialyear2017-18,subjecttoapprovalofmembersattheAnnualGeneralMeeting.IntermsofrevisedAccountingStandard(AS)4 ‘ContingenciesandEventsoccurringafterBalanceSheetDate’,thecompanyhasnotappropiated proposed dividend of `3,664.88lakhs(includingdividenddistributiontaxof`624.88)fromthesurplusasperStatementofprofitandLossfortheyearendedMarch31,2018.

31. NosignificanteventshaveoccurredafterthebalancesheetdatewhichmayhavematerialeffectontheCompany’sfinancialstatements.

32. FiguresareroundedofftothenearestLakhRupees.Asaresult,adjustmentshavebeenmadeinthelastdecimalsintheindividualheadsofcertainaccountstoavoiddifferencescausedbyroundingoffofthesefiguresascomparedtototalsandsub-totals.

Figurespertainingtothesubsidiarycompaniesandpreviousyearhavebeenreclassified/regroupedwherevernecessarytobringtheminlinewiththeparentCompany’scurrentyearsfinancialstatements.




DIN:00040526 DIN:00025326




STCI PRIMARY DEALER LIMITED


ANNUAL REPORTFOR THE YEAR ENDED

31st MARCH, 2018


157

III. STCI PRIMARY DEALER LIMITED

01 DIRECTORS’ REPORT 158

02 AUDITORS’ REPORT 190

03 AUDITORS’ REPORT TO DIRECTORS 196

04 C&AG REPORT 197

05 BALANCE SHEET 198

06 PROFIT AND LOSS STATEMENT 199

07 CASH FLOW STATEMENT 200

08 NOTES TO FINANCIAL STATEMENTS 202

09 SIGNIFICANT ACCOUNTING POLICIES 216

10 NOTES FORMING PART OF FINANCIAL STATEMENTS 221


158 159

DIRECTOR’S REPORT

TO THE SHAREHOLDERS OF STCI PRIMARY DEALER LIMITED (CIN:- U67110MH2006PLC165306)

Your Directors are pleased to present the Twelfth Annual Report together with the Audited Accounts of the Company for the Year ended March 31, 2018.

1. FINANCIAL RESULTS

The Financial performance of the Company for the year ended March 31, 2018 is as under:-(` in Lakh)


Total Revenue 45,264.10 60,265.53

Total Expenses 39,263.44 32,897.02

Profit(+)/loss(-) before Tax 6,000.66 27,368.51

Provision for current year and deferred tax 2,022.99 9,556.51

Short/(Excess) Provision for Tax for earlier years 62.46 -

Profit(+)/loss(-) after Tax 3,915.21 17,812.00

Transfer to Statutory Reserve* 783.05 3,562.40

Net Profit/(Net Loss) For the current year 3,132.16 14,249.60

Balance in profit & loss account brought forward balance 13,992.14 8,769.36

Transfer to Reserves (Profit on Sale of HTM Securities) - -

Interim Dividend@ - 7,500.00

Tax on Interim Dividend@ - 1,526.83

Balance Carried to the Balance Sheet 17,124.30 13,992.14

* Created pursuant to Section 45 I –C of Reserve Bank of India Act, 1934 as amended in January 1997@ Refer note 22.24 of notes to accounts

Your Company has made a Net Profit (Profit After Tax) of ` 39.15 Crore for the financial year 2017-18 as against a Net Profit (Profit After Tax) of ` 178.12 Crore for the financial year 2016-17.

2. MANAGEMENT DISCUSSION AND ANALYSIS

a. The Economy

FY2017-18 was yet another year of high volatility and significant economic developments domestically and globally. On the international front, the global economy saw a sustained pick up as economic growth momentum remained strong across countries. The US Federal Reserve raised interest rates 3 times in 2017 and intends to continue hiking rates as the economy stabilizes further. After taking office, US President has initiated a complete tax overhaul which is expected to benefit the US economy in the near term but could lead to large fiscal deficits in the long-term. Going forward, as inflation meets the 2% target and the labor market continues to strengthen, the US Fed could hike rates at a faster pace. At the same time, advanced economies have also begun the process of balance sheet normalization and winding down accommodation. Geo-political risks emerged as North Korea demonstrated its nuclear capability while missile strikes were ordered against Syria by the US.

On the domestic front, fears of revenue shortfall after the introduction of GST severely dented market sentiment as participants braced for fiscal slippage and additional borrowing. Growth in the economy experienced a downturn due to de-stocking activity ahead of this complete re-haul of the indirect tax regime. Concurrently, the introduction of


158 159

DIRECTOR’S REPORT

Insolvency and Bankruptcy code allowed banks to address and resolve their Non-Performing Assets. While the Reserve Bank expected the disruptions caused by these structural changes to be transient, long-term growth potential is anticipated to be buoyant. Nonetheless, in face of these uncertainties, RBI maintained its monetary stance at “neutral”, retaining the flexibility to move the policy rates in either direction depending on evolving macroeconomic conditions.

Growth slowed down in Q1 as the economy prepared for the impending tax reforms, coming in at 5.7% for Q1FY18. Nonetheless, steady improvement in production and re-stocking activity saw the economy pick up momentum once again, growing at 6.5% in Q2FY18 and 7.2% in Q3FY18. Overall, even though the full year FY18 GDP is expected to stand at 6.6% lower than 7.2% in FY17, growth in FY19 is expected to be upward of 7%. Taking efforts to strengthen revenue receipts, the Government has demonstratively moved away from resorting to expenditure rationalization and taking benefit of cash accounting systems, establishing credibility and commitment to long term fiscal discipline.

On the inflation front, RBI remained committed to achieving the medium term inflation target of 4% +/-2% till 31st March 2021, and as room opened up for monetary easing in August 2017, policy rates were revised downwards by 25 bps. Retail inflation witnessed disinflationary pressures emanating from the food component during the first half of the year, reaching lows of 1.46% in June 2017. However, uneven distribution of monsoon rainfall and supply disruptions caused CPI to rise to a peak of 5.21% in December 2017. RBI emphasized the upside risks to inflation and revised its inflation expectations higher; prudent supply management and seasonal trends however ensured that these pressures remained muted. Converging trends which were observed in CPI and WPI as the year began were however offset due to the impact of a statistical base as well as lower weightage of the food component in WPI.

Alongside the implementation of Goods and Services Tax this year also witnessed revision of House Rent Allowances under the Seventh Pay Commission, which remained one of the key components impacting inflation trajectory, though purely statistical in nature.

The external sector performance deteriorated as Current Account Deficit widened to 1.90% of GDP in FY18 compared to 0.70% of GDP in FY17. Simultaneously, widening trade deficit due to rising international commodity prices worsened the external sector position, despite substantial foreign investment inflows during Q1. The debt segment witnessed sharp inflows of USD 18,702 Mn in FY18 as compared to outflow of USD 828 Mn in FY17.

Equities saw an inflow of USD 3,992 Mn in FY2017-18 as compared to an inflow of USD 8,594 Mn in FY2016-17.

In the Budget, Finance Minister deviated from the government’s commitment of fiscal consolidation for FY2017-18 at 3.5% (against 3.2%) and for FY2018-19 at 3.3% (against 3.0% recommended under the FRBM).

b. Developments In Money And Securities Market

The fiscal year began on a somber note as bond market sentiment continued to reel under the effects of RBI’s change in policy stance from accommodative to neutral in the February 2017 MPC meeting. At the April policy meeting, RBI kept lending rates unchanged at 6.25%, but decided to narrow the policy corridor by hiking the reverse repo by 25bps while flagging upside risks to inflation arising from rollout of GST, implementation of HRA under the 7th CPC, and possibility of El Nino. The minutes of the April Policy revealed that a panel member, Dr Michael Patra believed in a pre-emptive 25bps rate hike despite eventually voting for a status quo. This led to a rise in the 10-year benchmark bond yield. However, record low retail inflation prints dissipated any concerns over a RBI rate hike and instead raised hopes of policy easing in the coming month. This, along with the announcement of a new 10-year benchmark bond at a coupon of 6.79%, pulled yields lower from a high of 6.90% to 6.65% in a span of one week.

However, fragilities in domestic growth resurfaced as Q4FY17 GDP numbers came as a huge disappointment. This further fuelled expectations that RBI could tone down its hawkishness, possibly even cut policy rates, in the upcoming Aug-17 Monetary policy. Translating these sentiments, gilts remained robust. The market rejoiced as CPI print for the month of June 2017 eased to a fresh low of 1.46% as trading enthusiasm revived. Momentum was high as investors built positions, riding on the optimistic sentiment. Comfortable liquidity and bullish sentiment led the yield of the 10 Yr benchmark to reach its lowest level of 6.41% in the fiscal year.


160 161

DIRECTOR’S REPORT

Market conditions reversed with markets taking a sharp turn towards bearishness as RBI continued to manage surplus liquidity via regular OMO announcements while risk appetite took a beating due to escalating geopolitical tensions in the Korean peninsula. Concomitantly, fiscal concerns elevated due to halving of RBI dividend payout to the Government to ` 30,659 Cr as against ` 58,000 Cr budgeted. In its Fourth Monetary Policy Statement, while the MPC shifted their inflation projection upwards, the HTM-SLR cut severely affected demand for bonds in the market. With the lack of positive cues and diminished hopes for future policy rate cuts, bonds traded with a weakening bias. Concerns regarding the governments’ ability to adhere to its fiscal deficit target also re-emerged as indirect tax revenue collections disappointed. Prospects of additional borrowing to compensate for this shortfall in an already fatigued environment led sentiments to remain jittery. Sentiments improved after Moody’s upgraded India’s sovereign rating while RBI withdrew its open market operation, pulling yields 10-15 bps lower across the curve.

This change in sentiment, however, was short-lived as liquidity conditions tightened further due to advance tax payments while inflation trajectory witnessed an upward trend due to rising food and fuel prices. With CPI coming in at a 15 month high, the benchmark paper breached the 7.20% mark. Though BJP’s victory in Gujarat and Himachal Pradesh State Assembly elections brought some respite, lack of clarity on the centre’s fiscal position troubled the market. The announcement of additional borrowing worth Rs 50,000 Cr, higher than market expectations, caused yields to rise by 18-20 bps. However, quarter end purchases as well as cancellation of auction worth Rs 11,000 Cr helped yields recoup some of their losses on the last trading day of the calendar year with the benchmark paper closing at 7.33% compared to 7.40% at the end of the previous calendar year.

Uncertainty on the monetary and fiscal front led sentiments to remain jittery and participation subdued. Yield on the new benchmark security was fixed at 7.17%, 12 bps below closing rate of the old benchmark security. Nonetheless, bonds traded with a weakening bias as crude oil prices continued to firm while US Treasury yields saw a sharp rise, pushing yields higher by 10 bps. Furthermore, in a speech, RBI Deputy Governor Dr. Viral Acharya indicated that the Central Bank may not take measures to reduce mark-to market losses on banks bond portfolios, causing yields to jump by 9 bps, closing at 7.38%. Prior to this meeting, some participants had hoped that the Central Bank would take steps to help banks salvage some of the losses incurred after bond valuations were revised by FIMMDA. Yields jumped once again to cross the 7.44% mark, as the Economic Survey for 2017-18 mentioned a pause in fiscal consolidation for the ongoing financial year. Largely, the market reflected weak momentum and choppy trading trends as clouded visibility over impending global and domestic volatilities continue to deter investor interest.

Sentiments improved as the MPC members took a less hawkish stance in the Feb 2018 Monetary Policy Review, showing disinclination towards the need for hiking policy rates in the near term. The markets recovered as traders found few negative surprises despite prospects of inflation reaching 5.6% levels in the coming months. Towards the end of the fiscal year, reports indicating that the government favors a potential foreign investment limit hike in government debt led buying momentum to re-emerge leading yields to soften.

The government did substantially reduce its gross borrowing amount for H1 FY19 to Rs 2.88 Lac Cr while reducing supply pressure in the belly of the curve. This led the benchmark yield lower by 18bps. With the government effectively stepping in to cool the rise in yields seen since Oct 2017, bond yields closed near their lowest levels in two months with the sharpest single day fall since August 2013, closing as much as 22-32 bps along the curve.

State government borrowings in FY18 also stood higher at ` 4.19 Tn compared to a borrowing of Rs 3.81 Tn in FY17. Liquidity moved from a surplus of as high as Rs 4.79 Tn at the start of FY18 to a deficit of Rs 1.33 Tn at the end of the fiscal year and call money rates traded in a wide range of 5.79%-7.57% during the year.

c. Operation Review

(i) Financial Performance

The Company has made a Net Profit (Profit After Tax) of ` 39.15 Crore for FY2017-18. The Company was able to deliver such financial performance despite the overall business environment, global as well as domestic, which continued to be challenging. The Company had declared an interim dividend for FY2017-18 at the rate of 10% amounting to Re.1/- per share (Face Value - ` 10/- per share), entailing a payout of ` 18.08 Crore, including Dividend Distribution Tax. Your Directors do not recommend final dividend for the current year.


160 161

DIRECTOR’S REPORT

(ii) Performance of the Company as Primary Dealer in Government Securities

The Company’s total turnover ratio was 1458 times in Government dated securities and 113 times in Treasury Bills as against the stipulated minimum ratio of 5 times and 10 times respectively under the RBI’s guidelines for Primary Dealers in Government securities. On outright basis, the turnover ratio was 940 times in Government dated securities and 15 times in Treasury Bills as against the prescribed minimum of 3 times and 6 times respectively. As against the stipulated minimum success ratio of 40%, the Company achieved success ratio in respect of bids tendered for primary issues of Treasury Bills at 58%.

(iii) Risk Management

The Company has in place a comprehensive Business Investment and Risk Policy to monitor market, credit, liquidity and operational risks associated with the business operations of the Company. The Company uses Value-at-Risk (VaR) methodology for measuring and monitoring market risks associated with its portfolio and uses stress-testing tools to assess the impact of interest rate movements on the portfolio. The risk management function of the Company is periodically reviewed by the Risk Management Committee of the Board.

The Company also has an ALCO Committee of executives of the Company comprising of the Managing Director and Senior Management of the Company. The Committee functions under the guidance and directions of the Board of Directors of the Company as well as the Risk Management Committee.

(iv) Internal Audit And Control Systems

For the period under review, the Company appointed M/s. Devdhar Joglekar & Srinivasan, Chartered Accountants, as the Company’s Internal and Concurrent Auditors. The scope of their audit included review of adequacy and efficacy of the internal control systems and procedures and deviations, if any, from generally accepted best practices, review of the Company’s compliance with applicable laws and regulations including the guidelines issued by RBI and other statutory bodies. M/s. Devdhar Joglekar & Srinivasan, Chartered Accountants were also entrusted with work of Concurrent audit of all money and securities market transactions. The Audit Committee as well as the Board of Directors interacts with the Internal and Concurrent Auditors on a regular basis for ensuring adequate internal controls and checks.

(v) Regulatory Compliance

The Company has complied with the applicable guidelines prescribed by RBI for the Primary Dealers and NBFCs regarding accounting standards, income recognition, valuation of securities, capital adequacy etc.

(vi) Credit Rating

The Company has obtained the highest credit ratings of A1+ from credit rating agencies ICRA for ` 400 Crore and from CRISIL for ` 200 Crore for its short-term debt programme.

(vii) Debt & Macro Economic – Research

The Company has a dedicated macroeconomic and debt research desk which releases reports at regular intervals covering in-depth study and analysis of economic developments, events and expectations of various economic events both for the Company’s valued clients/market participants as well as the dealing team for taking trading decisions. Other regular research contributions include series of reports in the form of daily and weekly debt market updates and fortnightly economic updates. It also releases periodic reports such as Monetary Policy expectations, Monetary Policy review, review of the Union Budget and occasional write-ups on issues of topical interest.


162 163

DIRECTOR’S REPORT

(viii) IT Strategy Committee

The Company had an IT Technical Committee which was entrusted with the responsibility of monitoring the IT Systems adequacy and compatibility as well as advising on the timely upgrade of the IT systems of the Company in line with the Company’s dynamic business requirement. Pursuant to the RBI IT Framework Master Directions June 8, 2017, the Company was required to constitute the IT Strategy Committee in line with the directions. With the notification of the RBI IT Framework circular, the erstwhile IT Technical Committee has been rechristened as IT Strategy Committee and the Committee being reconstituted with an Independent Director being inducted as member of the Committee and to Chair the meeting of the Committee as stipulated in the said RBI directions. The IT Strategy Committee of the Company plays an important role in ensuring that the Company has a robust IT System in place with necessary checks and backups. The IT Strategy Committee also reviews the IT audits of the Company which are conducted periodically and gives suggestions/recommendations on areas of improvement.

(ix) Human Resources

The Company’s HR function has been outsourced to an HR Consultant who provides HR support by way of review of Company’s HR policies, compensation structure, key hiring plan, new employee on-boarding, skill and capability building for employees and other regular HR management activities. The Company’s staff strength as on March 31, 2018 is 41 employees.

(x) Internal Financial Controls and their adequacy

The Company has in place adequate Internal Financial Control framework commensurate with the nature, size and scale of operation of the Company. The controls and processes are driven through various policies, procedures and certifications. The processes and controls are reviewed periodically.

d. Outlook For the Current Year

The coming year continues to present several challenges. The inflation trajectory continues to face several uncertainties emanating from implementation of HRA under the 7th CPC by state governments, possibility of deficient/uneven monsoon, rising commodity prices, proposed revisions of MSPs for Kharif crops and fiscal slippage by Centre and States. Nonetheless, CPI is expected to remain within the RBI’s target range of 4% +/-2% for FY19. Rising input costs have, however, led core inflation to turn sticky after showing a downward trend in FY18. RBI has shifted its inflation expectations downwards for FY19 – H1 at 4.7-5.1% (5.1-5.6% prev) and H2 at 4.4% (4.5-4.6% prev) including HRA. Adjusting for HRA impact, inflation is expected to be in the range of 4.4-4.7% in H1 and 4.4% in H2 FY19. This softer inflation trajectory has allayed fears of a rate hiking cycle.

The implementation of GST is expected to have positive rub-off in the economy as the share of organized sector in the economy grows. However, as global economic conditions become increasingly vulnerable due to protectionist policies and fears of a trade war, domestic credit and investment pick up are variables that would be imperative in ensuring economic stability in India. RBI’s commitment to nurture the growth momentum, strengthen macroeconomic conditions, deleverage distressed corporate’s balance sheets, rebuild bank balance sheets, and deepen risk-sharing markets is vital in this context.

On the global front, the US Federal Reserve is expected to hike rate two more times in 2018 as inflation and labor market conditions strengthen. The central banks of other countries notably ECB is expected to continue its asset purchase program till September 2018 contingent upon inflation being consistent with their aim. The global environment continues to face rising geo-political risks coupled with rising trade protectionism and financial market volatility threatening global growth.

Cautionary Statement Statements in this Management Discussion and Analysis may be ‘forward looking’ within the meaning of applicable

laws and regulations. Actual results may differ, from those expressed or implied, due to various factors.


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DIRECTOR’S REPORT

3. COMPOSITION OF BOARD

As on March 31, 2018, the Board comprised of six Directors. The Board includes Independent Directors, Non-Executive Directors and a Managing Director as under:-

- Mr. G Narayanan, Independent Director

- Ms. Sonali Sinha, Independent Director

- Mr. R Venkataramani, Non-Executive Director

- Mr. Pradeep Madhav, Non-Executive Director

- Mr. Raghvendra Kumar, Additional Director

- Mr. Prasanna Patankar, Managing Director

Resignation of Directors during the year

- Mr. Melwyn Rego, Non-Executive Director, stepped down from the Board of the Company with effect from May 05, 2017.

- Mr. R Ganesan, Non-Executive Director, stepped down from the Board of the Company with effect from January 12, 2018.

The Board acknowledges and places on record its deep appreciation for the contribution made by the Directors during their tenure with the Company.

The Company has received declarations from Director(s), as applicable to them. The Board met five times during the year under review.

Date of Board Meeting April 26, 2017 July 19, 2017 Oct 25, 2017 Jan 23, 2018 Mar 07, 2018

Details of Directors

1 Mr. Melwyn Rego~ x Refer note2 Mr. G Narayanan

3 Ms. Sonali Sinha

4 Mr. R Venkataramani

5 Mr. R Ganesan$ x Refer note6 Mr. Pradeep Madhav

7 Mr. Raghvendra Kumar^ Refer note

8 Mr. Prasanna Patankar

~ Ceased to be Director w.e.f. May 05, 2017

$ Ceased to be Director w.e.f. January 12, 2018

^ Appointed on Board w.e.f. March 07, 2018. Ceased to be the Director w.e.f. June 08, 2018

During the year Mr. Raghvendra Kumar was appointed as Additional Director. The brief profile of Mr. Raghvendra Kumar is as under:-

Mr. Raghvendra Kumar is a Deputy General Manager and was in-charge of Bank of India Treasury Front Office. He is a seasoned banker having put in more than 25 years of service with Bank of India. He has more than 12 years’ experience in Treasury operations as an active trader, as a Treasury Head of overseas center Jersey, and as a Chief Dealer and front office in-charge of Global Treasury. He is a science graduate, CAIIB and has the Dealing Certificate from ACI, Paris.

Appropriate Resolution, if any, seeking your approval is included in the Notice.


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DIRECTOR’S REPORT

4. COMMITTEES OF THE BOARD

The Committees of the Board play a crucial role and have been constituted to deal with specific areas/activities which concern the Company and need a closer review. The Board Committees are set up under the formal approval of the Board of Directors to carry out clearly defined roles.

The Company has following Committees of the Board:-

(i) Audit Committee

As on March 31, 2018, the Audit Committee of the Board comprised of Mr. G Narayanan, Mr. R Venkataramani and Ms. Sonali Sinha. The scope and functions of the Audit Committee includes the following;

- review of the Statutory and Internal Auditors’ reports

- monitor the adequacy of the internal control system and internal audit function

- review the Company’s financial management policies

- discussions with the Internal, Concurrent and Statutory Auditors as and when necessary/required

- recommending appointment, remuneration and terms of appointment of auditors of the Company;

- reviewing and monitoring the auditor’s independence and performance, and effectiveness of audit process;

- examining the financial statement and the auditors’ report thereon;

- approving or ratifying transactions of the Company with related parties, if any;

- scrutinizing inter-corporate loans and investments, if any;

- valuation of undertakings or assets of the Company, wherever it is necessary;

- evaluation of internal financial controls and risk management systems;

- any other applicable matters as specified under section 177 of the Companies Act, 2013 and the rules framed thereto or as may be delegated by the Board in this regard

In addition to quarterly meetings for consideration of financial results, meetings of the Audit Committee are also convened, as and when required, for review of various businesses/functional aspects of the Company, business risk assessment, internal audit, etc.

In addition to quarterly meetings for consideration of financial results, meetings of the Audit Committee are also convened, as and when required, for review of various businesses/functional aspects of the Company, business risk assessment, internal audit, etc

The Committee met four times during the year.

Date of Meeting April 26, 2017 July 19, 2017 Oct 25, 2017 Jan 23, 2018


1 Mr. G Narayanan

2 Ms. Sonali Sinha


(ii) Risk Management Committee

As on March 31, 2018, the Risk Management Committee of the Board comprised of Mr. G Narayanan, Mr. Pradeep Madhav and Ms. Sonali Sinha. The Company has in place a detailed Business Investment and Risk Policy, which is reviewed at regular intervals and modified, if required, in order to align with the business dynamics of the Company. The Risk Management Committee meets at regular intervals. The scope of the Risk Management Committee includes the following;

- review compliance with the approved/statutory risk policies and parameters


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DIRECTOR’S REPORT

- review risk policies, procedures and reporting mechanisms

- review risk management reports on a periodic basis and suggest modification to the Business Investment and Risk Policy of the Company for submitting to the Board for final approval

- all such acts and functions as may be delegated by the Board of Directors


Date of Meeting April 26, 2017 June 15, 2017 Oct 25, 2017 Jan 12, 2018


1 Mr. G Narayanan

2 Ms. Sonali Sinha

3 Mr. Pradeep Madhav

(iii) Nomination and Remuneration Committee

As on March 31, 2018, the Nomination and Remuneration Committee of the Board comprised of Mr. G Narayanan, Ms. Sonali Sinha and Mr. R Venkataramani. The Nomination and Remuneration Committee plays an active role in HR development, Performance Management and Talent Retention and reviews HR policies on a regular basis. The scope of the Nomination and Remuneration Committee shall include the following;

- identify person qualified to become Directors and recommend to the Board their appointment and removal, if considered appropriate

- identify person who may be appointed in senior management in accordance with the criteria laid down and recommend to the Board their appointment and removal

- carry out evaluation of every Director’s performance

- formulate the criteria for determining qualifications, positive attributes and independence of a Director and recommend to the Board a policy, relating to the remuneration for the Directors, Key Managerial Personnel and other employees

- any other matters as specified under section 178 of the Companies Act, 2013 and the rules framed thereto or as may be delegated by the Board in this regard


Date of Board Meeting July 19, 2017 Aug 28, 2017 Jan 23, 2018 Mar 07, 2018


1 Mr. G Narayanan

2 Ms. Sonali Sinha


(iv) Corporate Social Responsibility (CSR) Committee

As on March 31, 2018, the Corporate Social Responsibility (CSR) Committee comprised of Ms. Sonali Sinha, Mr. G Narayanan and Mr. Prasanna Patankar. The Company subscribes to the values of concern and care. In accordance with the requirements of the Companies Act, 2013 and the rules framed thereunder, the Company has a Corporate Social Responsibility Committee of the Board of Directors. The scope of the Committee is as prescribed in the act as well as those delegated by the Board. The projects/beneficiaries of the CSR funding of the Company are clearly laid down in the CSR policy of the Company, after consultation with the Board of Directors. The Committee met on January 12, 2018 with all the Committee Members then forming part of the Committee present at the said meeting.


166 167

DIRECTOR’S REPORT

5. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has a policy on Prevention of Sexual Harassment at Workplace. The policy aims at prevention of sexual harassment of employees and lays down the guidelines for identification, reporting and prevention of undesired behaviour. The Internal Complaints Committee (ICC) has been set up. The ICC is responsible for redressal of complaints related to sexual harassment. During the year ended March 31, 2018, the ICC has not received any complaints pertaining to sexual harassment.

6. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 (3) (c) of the Companies Act, 2013 and the rules framed thereto and any other provisions, if any, the Directors confirm:-

(a) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) that appropriate accounting policies have been adopted and have been applied consistently and judgments 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 the Company at the end of the financial year and of the profit and loss of the company for that period;

(c) that proper and sufficient care have been taken 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;

(d) that the annual accounts have been prepared on a going concern basis; and

(e) that systems to ensure compliance with the provisions of all applicable laws and that such systems have been adequate and operating effectively.

7. AUDITORS

M/s Shah Gupta and Company, Chartered Accountants, Mumbai, ICAI firm registration number 109574W, were appointed as the statutory auditors of the Company, by the Comptroller and Auditor General of India (C&AG) for the FY2017-18.

M/s. Dilip Bharadiya & Associates, Practising Company Secretaries, were appointed as Secretarial Auditor of the Company for the FY2017-18.

8. DISCLOSURE OF PARTICULARS

The Company is a Primary Dealer as defined and regulated by the Reserve Bank of India and is not a manufacturing Company, hence the particulars required to be disclosed with respect to the conservation of energy and technology absorption in terms of Section 134(3)(m) of the Companies Act, 2013 and the rules framed thereto are not applicable to the Company.

The information required pursuant to Section 134 read with rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 shall be provided upon request. In terms of Section 136 of the Act, the report and accounts are being sent to members excluding the information on employee’s particulars which is available for inspection by the members at the registered office of the Company during business hours on working days of the Company up to the date of the ensuing General Meeting. Interested members may write to the Company.

There were no foreign exchange earnings as well as no foreign exchange outgo during the FY2017-18.

9. RELATED PARTY TRANSACTION

All related party transactions that were entered into during the financial year were on arm’s length basis and were in the ordinary course of business operations. All related party transactions are placed before the Audit Committee and the Board of Directors. There are no materially significant transactions made by the Company with Promoters, Directors, Key Managerial Persons or any other related party that may have a potential conflict with the interest of the Company at large.


166 167

DIRECTOR’S REPORT

Details of contracts or arrangements with related parties along with justification for entering into transactions referred to in sub-section (1) of section 188 are annexed to the Report as Annexure I. The Policy on Related Party Transaction is available on the Company’s website www.stcipd.com and is also annexed to the Report as Annexure IV.

10. VIGIL MECHANISM POLICY

The Company has established a vigil mechanism through the Audit Committee, to address the concerns expressed by the employees and other Directors. The Company has provided direct access to the Chairman of the Audit Committee on reporting issues concerning the interests of fellow employees and the Company. The Company has formulated a Vigil Mechanism Policy in accordance with the requirements of Section 177 of the Companies Act, 2013 and the rules framed thereto. The Policy is available on the Company’s website www.stcipd.com.

11. POLICY ON NOMINATION & REMUNERATION OF DIRECTORS

The Company has formulated a policy in accordance with the requirements of Section 178 of the Companies Act, 2013 and the rules framed thereto. The Policy is available on the Company’s website www.stcipd.com.

12. CORPORATE SOCIAL RESPONSIBILITY POLICY AND DISCLOSURE

The Company has formulated a policy in accordance with the requirements of Section 135 of the Companies Act, 2013 and the rules framed thereto. Disclosures under Corporate Social Responsibility as per the Companies Act, 2013 & Companies (Corporate Social Responsibility) Policy Rules 2014 is annexed to the report as Annexure II. The Policy is available on the Company’s website www.stcipd.com.

13. EXTRACT OF ANNUAL RETURN IN FORM MGT-9

Extract of Annual Return in Form MGT-9 in accordance with the Companies Act, 2013 is annexed to the Report as Annexure III.

14. FORMAL ANNUAL EVALUATION

The Company has adopted a policy of performance evaluation of the Board of Directors and that of its Committees and individual Directors. During the Financial Year 2017-18, the Company had undertaken the evaluation exercise as stipulated in accordance with the policy as well as in the matter as prescribed under the Act.

15. SUBSEQUENT EVENTS

There are no material changes and commitments affecting the financial position of the Company which have occurred between March 31, 2018 and the date of the report. Refer note 22.24 of notes to accounts.

16. REGARDING KEY MANAGERIAL PERSONNEL

During the FY2017-18 the Company has following Key Managerial Personnel in line with the requirements and as defined by the Companies Act, 2013 and the rules framed thereto

Mr. Prasanna Patankar, Managing Director Mr. M N Suresh, Chief Financial Officer Mr. Kalpesh Mody, Company Secretary

17. INSTANCES OF FRAUD, IF ANY, REPORTED BY THE AUDITORS

There have been no instances of fraud reported by the Auditors under Section 143 (12) of the Companies Act, 2013.

18. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE

There were no significant and/or material orders passed against the Company by the regulators or courts or tribunals impacting the going concern status of the Company and/or impacting the Company’s operations in future.


168 169

DIRECTOR’S REPORT

19. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS

There are no adverse comments, qualifications or reservations made by the Secretarial Auditors, Statutory Auditors as well as Comptroller & Auditor General of India (C&AG).

20. SHARES

There has been no change in shareholding pattern for the FY 2017-18. The detail of the transfer(s) of share(s), if any, has been mentioned in MGT-9, which is annexed to the report as Annexure III.

21. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Pursuant to Section 186 (11) of the Companies Act, 2013, the provisions of Section 186(4) of the Companies Act, 2013 requiring disclosure in the financial statements of the particulars of the loans given, investment made or guarantee given or security provided and the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient of the loan or guarantee or security is not applicable to Non-Banking Financial Company registered under Chapter III of the Reserve Bank of India Act, 1934 and whose principal business is acquisition of securities.

22. REGISTRAR & SHARE TRANSFER AGENT

The Company has appointed M/s. Link Intime India Pvt. Ltd. as the Registrar & Share Transfer Agent of the Company.

23. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any Subsidiary, Joint venture or Associate Company.

24. PUBLIC DEPOSITS

During the year ended March 31, 2018, your Company has not accepted any deposits from the public within the meaning of the provisions of the Non-Banking Financial Companies (Reserve Bank) Directions, 1998 as well as within the meaning of Chapter V of the Companies Act 2013 and the rules framed thereto.

25. BRANCH OFFICES

The Company has branch offices in New Delhi and Kolkata which have been making ongoing efforts for business development and procuring business from PSUs, Commercial Banks, Co-operative Banks, Corporates, MNCs, Provident Funds, Pension and Gratuity Funds, Insurance Companies, etc. The activities of these offices are being regularly assessed and monitored.

26. ACKNOWLEDGEMENT

Your Directors thank STCI Finance Limited (Holding Company), Reserve Bank of India, SEBI, CCIL, its Bankers, other Commercial and Cooperative Banks, BSE, NSE, Financial Institutions, Mutual Funds, Insurance Companies, Corporates and other customers for their business support and continued patronage. The Directors would also like to place on record their appreciation of the dedicated performance by the officers and staff of the Company.

On behalf of the Board of Directors of STCI Primary Dealer Limited

Pradeep Madhav Prasanna Patankar

Mumbai Director Managing DirectorDate: August 02, 2018 DIN 00267422 DIN 07658714


168 169

ANNEXURE I

Form No. AOC-2


Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto

Sr. No

Particulars Amount

1

Details of contracts or arrangements or transactions not at arm’s length basis

(a) Name(s) of the related party and nature of relationship

NotApplicable

(b) Nature of contracts / arrangements / transactions

(c) Duration of the contracts / arrangements / transactions

(d) Salient terms of the contracts or arrangements or transactions including the value, if any

(e) Justification for entering into such contracts or arrangements or transactions

(f) Date(s) of approval by the Board

(g) Amount paid as advances, if any:

(h) Date on which the special resolution was passed in general meeting as required under first proviso to section 188

2

Details of material contracts or arrangement or transactions at arm’s length basis

(a) Name(s) of the related party and nature of relationship

ReferAnnexure A

(b) Nature of contracts / arrangements / transactions

(c) Duration of the contracts / arrangements/transactions

(d) Salient terms of the contracts or arrangements or transactions including the value, if any:

(e) Date(s) of approval by the Board, if any:

(f) Amount paid as advances, if any:

On behalf of the Board of Directors.




170 171

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170 171

ANNEXURE II

ANNUAL REPORT ON CSR ACTIVITIES

1. A brief outline of the company’s CSR policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs

The Corporate Social Responsibility (CSR) Policy is available on the website of the Company www.stcipd.com

2 . The Composition of the CSR Committee

As on March 31, 2018 the CSR Committee comprised of;

Ms. Sonali Sinha, Independent Director Mr. G Narayanan, Independent Director Mr. Prasanna Patankar, Managing Director

3. Average net profit of the company for last three financial years

The Average Net Profit for the past 3 (three) Financial Years was ` 13,954.39 (In Lakh).

4. Prescribed CSR Expenditure (Two per cent of the amount as in item 3 above)

The Company is required to spend ` 279.09 (In Lakh) towards CSR.

5. Details of CSR spent during the financial year

(a) Total amount to be spent for the financial year - ` 279.09 (In Lakh) towards CSR.

(b) Amount unspent, if any - Nil

(c) Manner in which the amount spent during the financial year is detailed below

(` in Lakh)

1 2 3 4 5 6 7 8

Sr. No. CSR Project or activity identified

Sector in which the project is covered

Project or programs(1) local area or other(2) specify the state and district where projects or programs was undertaken


Amount spent on the projects or programsSub heads:-(1) Direct expenditure on projects or programs (2) overheads


Amount Spent:- Direct or through implementing agency

1 Contribution to the Prime Minister’s National Relief Fund forsocio-economic development and relief

Socioeconomicdevelopmentand relief

Contribution to the Prime Minister’s National Relief Fund - PAN India

229.29 (1) 229.29

(2) Nil

229.29 Prime Minister’s National Relief Fund

2 Project forpatient caretowardsmedicaltreatmentof deservingpoor patients

Promotinghealth careincludingpreventivehealth care

local area 7.5 (1) 7.13

(2) 0.37

7.13 Cancer Patient Aid Association (CPAA)


172 173



local area 10 (1) 10.00

(2) Nil

10.00 ImPaCCT Foundation (Paediatric Foundation of Tata Memorial hospital)



local area 32.3 (1) 32.30

(2) Nil

32.30 Indian Cancer Society via HDFC Charity Fund for Cancer Cure*

* The Company has made investment in HDFC Cancer Cure Fund. As per the scheme, any dividend declared in the said scheme will be contributed directly to Indian Cancer Society and eligible towards Company’s contribution for CSR commitment. The said scheme is a close ended scheme

6. In case the Company has failed to spend the two percent of the average net profit of the last three financial years or any part thereof, the Company shall provide the reasons for not spending the amount in its Board report – Not Applicable as the Company has spent the entire amount towards CSR that was required to be spent.

7. A responsibility statement of the CSR Committee that the implementation and monitoring of CSR policy, is in compliance with the CSR objectives and Policy of the Company. – Forms part of the CSR Policy

On behalf of STCI Primary Dealer Limited

Prasanna PatankarManaging DirectorAugust 02, 2018Mumbai

On behalf of On behalf ofCorporate Social Responsibility Committee The Board of Directors

Sonali Sinha Pradeep MadhavChairperson DirectorAugust 02, 2018 August 02, 2018Mumbai Mumbai


172 173

ANNEXURE III

Form No. MGT-9EXTRACT OF ANNUAL RETURN

as on the financial year ended on March 31, 2018[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies

(Management and Administration) Rules, 2014]


i) CIN U67110MH2006PLC165306

ii) Registration Date Date of Incorporation – October 31, 2006

iii) Name of the Company STCI Primary Dealer Limited

iv) Category / Sub-Category of the Company Company having Share Capital

v) Address of the Registered office and contact details A/B1-801 (A-Wing), 8th Floor, Marathon Innova Marathon NextGen Compound, Lower Parel Mumbai – 400 013 Tel:- 022 – 6620 2200

vi) Whether listed company Yes / No No

vii) Name, Address and Contact details of Registrar and Transfer Agent, if any

Link Intime India Pvt Ltd. C 101, 247 Park, L.B.S Marg, Vikhroli (West) Mumbai, Maharashtra 400083


All the business activities contributing 10 % or more of the total turnover of the company shall be stated:-

Sl. No. Name and Description of main products / services

NIC Code of the Product/ service


1 Securities Trading & Underwriting

6599 100%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES -

S. N0

NAME AND ADDRESS OF THE COMPANY

CIN/GLN HOLDING/ SUBSIDIARY/ ASSOCIATE

% of shares held Applicable Section

1 STCI Finance Limited (erstwhile Securities Trading Corporation of India Limited)

U51900MH1994PLC078303 Holding 100%* 2(46)

*includes shares held by nominees


174 175

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)




% Change

during the year


Shares


SharesA. Promoters(1) Indian

a) Individual/HUF Nil Nil Nil Nil Nil Nil Nil Nil Nilb) Central Govt Nil Nil Nil Nil Nil Nil Nil Nil Nilc) State Govt(s) Nil Nil Nil Nil Nil Nil Nil Nil Nild) Bodies Corp. 149999994 6* 150000000 100 149999994 6* 150000000 100 Nile) Banks/FI Nil Nil Nil Nil Nil Nil Nil Nil Nilf) Any Other…… Nil Nil Nil Nil Nil Nil Nil Nil Nil

Sub-total (A)(1):- 149999994 6* 150000000 100 149999994 6* 150000000 100 Nil(2) Foreign

a) NRIs- Individuals Nil Nil Nil Nil Nil Nil Nil Nil Nilb) Other– Individuals Nil Nil Nil Nil Nil Nil Nil Nil Nilc) Bodies Corp. Nil Nil Nil Nil Nil Nil Nil Nil Nild) Banks/FI Nil Nil Nil Nil Nil Nil Nil Nil Nile) Any Other…. Nil Nil Nil Nil Nil Nil Nil Nil Nil

Sub-total (A)(2):- Nil Nil Nil Nil Nil Nil Nil Nil NilTotal shareholding of Promoter (A)=(A)(1)+(A)(2)

149999994 6* 150000000 100 149999994 6* 150000000 100 Nil

B. Public Share holding1) Institutions

a) Mutual Funds Nil Nil Nil Nil Nil Nil Nil Nil Nilb) Banks/FI Nil Nil Nil Nil Nil Nil Nil Nil Nilc) Central Govt Nil Nil Nil Nil Nil Nil Nil Nil Nild) State Govt(s) Nil Nil Nil Nil Nil Nil Nil Nil Nile) Venture Capital

FundsNil Nil Nil Nil Nil Nil Nil Nil Nil

f) Insurance Companies


g) FIIs Nil Nil Nil Nil Nil Nil Nil Nil Nilh) Foreign Venture

Capital FundsNil Nil Nil Nil Nil Nil Nil Nil Nil

i) Others (specify) Nil Nil Nil Nil Nil Nil Nil Nil NilSub-total (B) (1):- Nil Nil Nil Nil Nil Nil Nil Nil Nil2. Non- Institutions

a) Bodies Corp. Nil Nil Nil Nil Nil Nil Nil Nil Nili) Indian Nil Nil Nil Nil Nil Nil Nil Nil Nilii) Overseas Nil Nil Nil Nil Nil Nil Nil Nil Nil


174 175



% Change

during the year


Shares


Sharesb) Individuals

i) Individual share holders holding nominal share capital upto ` 1 lakh


ii) Individual share holders holding nominal share capital in excess of ` 1 lakh


c) Others (specify) Nil Nil Nil Nil Nil Nil Nil Nil NilSub-total (B) (2)Total Public Shareholding (B)=(B)(1)+ (B)(2)




Grand Total (A+B+C) 149999994 6* 150000000 100 149999994 6* 150000000 100 Nil

*shares held by nominees

B. Shareholding of Promoters

Sl No.

Share holder’s Name


Shareholding at the end of the year % shareholding

during the year

No. of Shares


company

% of Shares Pledged/


No. of Shares


company

% of Shares Pledged/


1 STCI Finance Limited (erstwhile Securities Trading Corporation of India Limited)

14,99,99,994 100 Nil 14,99,99,994 100 Nil Nil

2 Mr. Kamlesh Rathi* 01 0 Nil 01 0 Nil Nil3 Mr. Aloke M.

Prasad*01 0 Nil 01 0 Nil Nil

4 Mr. Pradeep Madhav*

01 0 Nil 01 0 Nil Nil

5 Mr. Prasanna Patankar*


6 Ms. Sabita Braganza*+


7 Ms. Suparna Sharma*


Total 15,00,00,000 100 Nil 15,00,00,000 100 Nil Nil

*shares held by nominees


176 177

B. Change in Promoters’ Shareholding (please specify, if there is no Change)

AS PER ANNEXURE ‘’C’’

Sl. No.


Cumulative Shareholding during the year

No. of shares % of total shares of the company


At the beginning of the year 14,99,99,994 100% 15,00,00,000*+ 100%

Date wise Increase/ Decrease in Promoters Share holding during the year specifying

The reasons for increase/decrease (e.g. allotment / transfer /bonus/ sweat equity etc):

No Change

At the End of the year 14,99,99,994 100% 15,00,00,000*+ 100%

* includes shares held by nominees + The Company is a wholly owned subsidiary of STCI Finance Limited

C. Shareholding Pattern of top ten Share holders+ (other than Directors, Promoters and Holders of GDRs and ADRs):

AS PER ANNEXURE ‘’ D ‘’

Sl. No.

Shareholding at the beginning of the year+

Cumulative Shareholding during the year+

For Each of theTop10 Shareholders+



At the beginning of the year+ Not applicable

Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment/ transfer/ bonus/ sweat equity etc):

Not applicable

At the End of the year + (or on the date of Separation, if separated during the year)

Not applicable

+ The Company is a wholly owned subsidiary of STCI Finance Limited


176 177

D. Shareholding of Directors and Key Managerial Personnel:

AS PER ANNEXURE ‘’E’’

Sl. No.


Cumulative Shareholding during the year

For Each of the Directors and KMP



Mr. Pradeep Madhav, Non-Executive Director (holds one share as a nominee)

At the beginning of the year 1 0 1 0

Date wise Increase/ Decrease in Share holding during the year specifying the reasons for increase /decrease (e.g. allotment / transfer/ bonus/ sweat equity etc):

No Change

At the End of the year 1 0 1 0

Mr. Prasanna Patankar, Managing Director (holds one share as a nominee)

At the beginning of the year 1 0 1 0

Date wise Increase/ Decrease in Share holding during the year specifying the reasons for increase /decrease (e.g. allotment / transfer/ bonus/ sweat equity etc):

No Change

At the End of the year 1 0 1 0

E. INDEBTEDNESS

Indebtedness of the Company including interest outstanding / accrued but not due for payment Amount (` in lakh)


Unsecured Loans Deposits Total Indebtedness

Indebtedness at the beginning of the financial year

i) Principal Amount 265,539.62 222,873.44 Nil 488,413.06ii) Interest due but not

paidNil Nil Nil Nil

iii) Interest accrued but not due

416.05 22.35 Nil 438.4

Total (i+ii+iii) 265,955.67 222,895.79 488,851.46Change in Indebtedness during the financial yearAddition 189,699.63 45,547.89 Nil 235,247.52Reduction Nil Nil Nil NilNet Change 189,699.63 45,547.89 235,247.52


178 179


Unsecured Loans Deposits Total Indebtedness

Indebtedness at the end of the financial year

i) Principal Amount 455,239.25 268,421.33 Nil 723,660.58ii) Interest due but not

paidNil Nil Nil Nil

iii) Interest accrued but not due

1688.8 243.98 Nil 1932.78

Total (i+ii+iii) 456,928.05 268,665.31 725,593.36

XI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration*# to Managing Director ,Whole-time Directors and/or Manager:

Amount (` in lakh)

Sl. No. Particulars of Remuneration Name of Managing Director Total Amount 1. Gross salary Prasanna Patankar

(a) Salary as per provisions contained in section17(1) of the Income-tax Act, 1961

56.40 56.40

(b) Value of perquisites u/s17(2) Income-tax Act, 1961 18.67 18.67(c) Profits in lieu of salary under section 17(3) Nil Nil

2. Stock Option NA NA3. Sweat Equity NA NA4. Commission

- As % of profit Nil Nil - others, specify… Nil Nil

5. Others+ 66.37 66.37Total (A) 141.44 141.44

Note:- Mr. Pradeep Madhav, Ex-Managing Director and currently Director on Board, was paid an amount of ` 84,38,625/- (Rupees Eighty Four Lakh Thirty Eight Thousand Six Hundred Twenty Five) (gross) towards Performance Linked Variable Pay (PLVP) during FY2017-18, pertaining to the immediate previous year and other previous years.

+Performance Linked Variable Pay (PLVP) paid during FY2017-18, pertaining to the immediate previous year and other previous years

*Subject to applicable tax deductions #Excludes amount of tax paid by employer on behalf of employeeB. Remuneration# to other Directors: Amount (` in lakh)

Sl. no. Particulars of Remuneration Name of Directors Total Amount

Mr. G Narayanan Ms. Sonali Sinha

1. Independent Directors

• Fee for attending board committee meetings

4.20 4.20 8.40

• Commission Nil Nil

• Others, please specify Nil Nil

Total (1) 4.20 4.20 8.40


178 179

2. Other Non-Executive Directors Mr. Pradeep Madhav *

Mr. Raghvendra Kumar

Mr. R Ganesan + Mr. R Venkataramani

Total Amount

• Fee for attending board Committee meetings

2.10 0.50 0.40 3.00 6.00

• Commission Nil Nil Nil Nil Nil• Others, please specify Nil Nil Nil Nil Nil

2.10 0.50 0.40 3.00 6.00Total(B)=(1+2) 14.40

* paid to STCI Finance Limited (erstwhile Securities Trading Corporation of India Limited) + ` 20,000/- (Rupees Twenty Thousand)paid to Bank of India # Subject to applicable tax deductionsC. Remuneration*#ToKeyManagerialPersonnelOtherThanMD/MANAGER/WTD Amount (` in lakh)

Sl.no.

ParticularsofRemuneration KeyManagerialPersonnel

CompanySecretary CFO Total1. Gross salary

(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961

16.33 39.23 55.56

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961

0.12 0.54 0.66

(c) Profits in lieu of salary under section17(3) Income-tax Act, 1961

Nil Nil Nil

2. Stock Option Nil Nil Nil3. Sweat Equity NIL NIL NIL4. Commission

- As % of profit NA NA NA- others, specify… Nil Nil Nil

5. Others 6.84~ 28.55+ 35.39Total(A) 23.29 68.32 91.61

+Performance Linked Variable Pay (PLVP) paid during FY2017-18, pertaining to the immediate previous year and other previous years

~Performance Linked Variable Pay (PLVP) paid during FY2017-18 pertaining to the immediate previous year. *Subject to applicable tax deductions #Excludes amount of tax paid by employer on behalf of employee.

XII. PENALTIES/PUNISHMENT/COMPOUNDINGOFOFFENCES:

Type SectionoftheCompaniesAct

BriefDescription DetailsofPenalty/Punishment/Compoundingfeesimposed

Authority[RD/NCLT/COURT

Appealmade,ifany(giveDetails)

A. COMPANY

Penalty

NonePunishment

Compounding


180 181

B. DIRECTORS

Penalty

NonePunishment

Compounding


Penalty

NonePunishment

Compounding





180 181

ANNEXURE IV

RELATED PARTY TRANSACTION POLICY

This policy has been framed as required under Master Direction - Standalone Primary Dealers (Reserve Bank) Directions, 2016 issued by Reserve Bank of India, as updated on March 31, 2017. The Company is required to disclose the policy on dealing with Related Party Transactions on its website and in the Annual Report.

The Policy intends to provide a framework to identify related parties, approve, monitor, regulate and report transactions between the Company and its Related Parties based on the provisions of the Companies Act, 2013 and the rules framed there under (the Act), as amended from time to time.

DEFINITIONS

(i) “Audit Committee” or “Committee” means Committee of Board of Directors of the Company constituted as per Section 177 of the Act

(ii) “Board” means Board of Directors of the Company

(iii) “Related Party Transaction” or “RPT” means the following transactions /contracts /arrangements with related parties as laid down under clause (a) to (g) sub-section (1) of section 188 of the Act:

(a) sale, purchase or supply of any goods or materials; (b) selling or otherwise disposing of, or buying, property of any kind; (c) leasing of property of any kind; (d) availing or rendering of any services; (e) appointment of any agent for purchase or sale of goods, materials, services or property etc. (f) such related party’s appointment to any office or place of profit in the Company, its subsidiary company or associate

company; and (g) underwriting the subscription of any securities or derivatives thereof, of the Company.

(iv) “Material Related party Transactions” mean related party transaction / transactions to be entered into individually or which taken together with previous transactions during a financial year, exceed the prescribed monetary limit given under Rule 15 of the Companies (Meetings of Board and its Powers) Rules, 2014

(v) “Related Party” means related party as defined under Section 2(76) of the Act as under;

Sec 2 (76) “Related Party” with reference to a Company, means-

(i) A director or his relative

(ii) Key Managerial Personnel or his/ her relative

(iii) A firm, in which a director, manager or his relative is a partner

(iv) A private company in which a director or manager or his relatives is a member or director

(v) A public company in which a director or manager is a director and holds along with his relatives, more than 2% of its paid-up share capital

(vi) A body corporate whose board, managing director or manager is accustomed to act in accordance with the advice, directions or instructions of a director or manager, except such advice is given in a professional capacity.

(vii) Any other person on whose advice, directions or instructions a director or manager is accustomed to act;

Provided that nothing in sub-clause (vi) and (vii) shall apply to the advice, directions or instructions given in a professional capacity;

(viii) Any company which is:

- A Holding, Subsidiary or an Associate company of such company or

- A Subsidiary of a Holding company to which it is also a Subsidiary


182 183

(ix) such other person as may be prescribed, i.e. as under:-

- A Director, other than an Independent Director, or Key Managerial Personnel of the holding company or his relative with reference to a company, shall be deemed to be a Related Party.

(vi) “Relative” means relative as defined under Section 2(77) of the Act as under;

Section 2(77) “relative”, with reference to any person, means anyone who is related to another, if—

(i) they are members of a Hindu Undivided Family;

(ii) they are husband and wife; or

(iii) one person is related to the other in such manner as may be prescribed; i.e. as under

(a) Father (including step-father)

(b) Mother (including step-mother)

(c) Son (including step-son)

(d) Son’s wife

(e) Daughter

(f) Daughter’s husband

(g) Brother (including step-brother)

(h) Sister (including step-sister)

(vii) “Key Managerial Personnel” or “KMP” means key managerial personnel as defined under Section 2(51) of the Act as under:-

Section 2(51) “key managerial personnel”, in relation to a Company, means—

(i) the Chief Executive Officer or the Managing Director or the Manager;

(ii) the Company Secretary;

(iii) the Whole-Time Director;

(iv) the Chief Financial Officer; and

(v) such other officer as may be prescribed

In addition to the above mentioned KMP, all such person, if any, as identified and designated by the Company may also be treated as KMP for the purpose of this policy.

(viii) “Associate Company” means as defined under Section 2(6) of the Act as under:-

Section 2(6) “Associate Company”, in relation to another Company means a Company in which that other Company has a significant influence, but which is not a Subsidiary Company of the Company having such influence and includes a Joint Venture Company.

For the purposes of this clause, “significant influence” means control of at least twenty per cent of the total share capital, or of business decisions under an agreement.

“Total Share Capital”, for the purposes of clause, means the aggregate of the –

(a) paid-up equity share capital; and

(b) convertible preference share capital;

(ix) “Arms length transactions” means transaction between two related parties that is conducted as if they were unrelated, so that there is no conflict of interest.


182 183

(x) “Ordinary Course of business” means all transactions or activities that are necessary, normal and incidental to the business of the Company as permitted by the Object Clause in the Memorandum of Association of the Company or transactions that are considered while computing the business income / revenue / turnover of the Company and shall be deemed to be in the ordinary course of business. These may also be common practices and customs of commercial/agreed upon transactions.

(xi) Office or place of profit means any office or place of profit:

(i) where such office or place is held by a Director, if the Director holding it receives from the Company anything by way of remuneration, over and above the remuneration to which he is entitled as Director, by way of salary, fee, commission, perquisites, any rent-free accommodation, or otherwise;

(ii) where such office or place is held by an individual other than a Director or by any firm, Private Company or other Body Corporate, if the individual, firm, Private Company or Body Corporate holding it receives from the Company anything by way of remuneration, salary, fee, commission, perquisites, any rent-free accommodation, or otherwise.

(xii) “Policy” means this Related Transaction Policy, as amended from time to time.

Words or expressions used but not defined herein and defined under the Companies Act, 1956 or Companies Act, 2013 or in the RBI Act shall have the same meaning as assigned to them in the respective act as the case may be.

Policy

All Transactions with Related Parties including any subsequent modifications thereto must be reported to the Audit Committee and approved/noted/referred for approval by the Committee in pursuance of this policy, as per the provisions of the Companies Act, 2013 as amended from time to time.

Identification of Related Parties

Every Director and Key Managerial Personnel shall at the beginning of every financial year disclose to the Company Secretary (CS) their related parties under section 2 (76) of the Act read with the rules framed there under, as amended from time to time and disclose any changes thereto during the financial year as immediately as practicable. Based on the disclosures, the list of related parties shall be identified.

Identification of Related Party Transactions

In case of any proposed transaction or arrangement with a Related Party, the concerned team/department in the Company shall furnish to the CS, relevant details of the proposed transaction which shall include the name of the related party, nature of relationship, nature of contract, duration and particulars of the contract/arrangement/transaction; reason for entering into the transaction, manner of determining price and other commercial terms, the draft contract/agreement and other supporting documents. The Company shall, based on the details of transaction determine whether the transaction does, in fact, constitute a Related Party Transaction requiring compliance with this policy.

Approvals/process for related party transactions

The Company generally undertakes transactions with related parties, in its ordinary course of business and at arms’ length basis and such transaction do not require prior approval under the Act. However such transactions would be placed for noting to the Audit Committee as well as the Board of Directors.

(i) Audit Committee review / approval

All related party transactions / arrangements or any modifications thereof, which are not in ordinary course of business and/or not on arms length basis, will be referred to the Audit Committee for review and approval with the details of related party, nature of transaction, reason for undertaking the transaction, particulars of the contract/arrangement, pricing terms, whether on arms length and in the ordinary course of business and other relevant information. Any member of the Committee who has a potential interest in any reported Related Party Transaction shall abstain from discussion and voting on the approval of the Related Party Transaction. The Audit Committee, on the recommendation of the Management, may approve the transactions with related parties in accordance with provisions of the Companies Act read with the Rules made there under, as amended from time to time.


184 185

(ii) Board Approval

Related Party Transactions as defined under Section 188 of the Act which are not in ordinary course of business and/or not on arms length basis or any subsequent modification thereto, shall be placed before the Board for its approval. Where any director is interested in any transaction or contract or arrangement with a Related Party, such director shall abstain himself from discussion and voting on the approval of the related party transaction. The Board may approve all Related Party Transactions which are not at arm’s length and / or which are not in the ordinary course of business in accordance with provisions of the Companies Act read with the Rules made there under, as amended from time to time.

In addition to the above, contracts/ arrangements/ transactions which are in the ordinary course of business and at arms length and do not require approval of the Board under Section 188 of the Act may also be reviewed and noted by the Audit Committee and the Board of Directors.

(iii) Approval of the Shareholders

The following Material Related party transactions which exceed the monetary limit prescribed under Rule 15 of the Companies (Meetings of Board and its Powers) Rules, 2014 (given below) and which are either not on arms length and/or are not in the ordinary course of business, shall on recommendation of the Board be placed before the shareholders for its prior approval in accordance with the provisions of the Act and the Related Parties shall abstain from voting on such resolutions:

Sr. No. Prescribed Related Party Transaction Monetary limit

1 Sale, purchase or supply of any goods or materials directly or through appointment of agents

Exceeding ten percent of the annual turnover of the Company or ` 100 crore, whichever is lower

2 Selling or otherwise disposing of, or buying, property of any kind directly or through appointment of agents

Exceeding ten percent of net worth or ` 100 crore, of the Company whichever is lower

3 Leasing of property of any kind Exceeding ten percent of the net worth or exceeding ten percent of turnover or ` 100 crore of the Company, whichever is lower

4 Availing or rendering of any services directly or through appointment of agents

Exceeding ten percent of annual turnover or ` 50 crore of the Company, whichever is lower

5 Appointment to any office or place of profit in the company, its subsidiary company or associate Company

Monthly remuneration exceeding two and half lakh rupees

6 Remuneration for underwriting the subscription of any securities or derivatives thereof of the Company

Exceeding one percent of the net worth

Explanation:Turnover or Net worth shall be computed based on the last Audited Balance Sheet of the Company.

Summary of Approval process

Sr. No.

Particulars / Criteria Audit Committee Approval Board Approval Shareholders’ Approval

(i) Transaction in the Ordinary Course of Business AND at arm’s length basis

Quarterly Noting at Meeting* Quarterly Noting at Meeting*

×

(ii) Transaction within the threshold limit and either not in the Ordinary course of business OR not at arm’s length basis

√ (prior approval) √ (prior approval) ×


184 185

Sr. No.

Particulars / Criteria Audit Committee Approval Board Approval Shareholders’ Approval

(iii) Transaction exceeding the threshold limit and either not in the Ordinary course of business OR not at arm’s length basis

√ (prior approval) √ (prior approval) √ (prior approval)

* usually identified transaction for which omnibus approval for related party transactions is taken as well as other transactions which are in the ordinary course of business and at arm’s length basis.

Related party Transactions not requiring approval of Audit Committee/Board etc

Notwithstanding the foregoing, Related Party Transactions involving the providing of compensation to a director or Key Managerial Personnel in connection with his or her duties to the Company including salary, reimbursement of business and travel expenses, halting allowance, entertainment expenses etc. incurred in the ordinary course of business, will not require the approval of the Audit Committee/Board/shareholders.

Related party Transactions not approved under this Policy

Where any contract or arrangement not in ordinary course of business and/or not on arms length basis is entered into by a Director or any other employee without obtaining the approval of Board or approval of Shareholders by a resolution in the general meeting under Section 188(1) of the Act, it shall be put up for ratification by the Board or by the shareholders at a meeting within three (3) months from the date on which such contract or arrangement was entered into. In the event the Company becomes aware of a transaction with a Related Party that has not been approved within three (3) months as stated above, the matter shall be reviewed by the Board. The Board shall consider all of the relevant facts and circumstances of such Transaction/ arrangement and evaluate all options available to the Company, including ratification by the Board or shareholders, revision or termination of such transaction/arrangement and take any such action as it may deem appropriate.

Disclosures

The particulars of contracts or arrangement with Related Parties referred to in section 188 shall be disclosed in the Board’s report for each financial year in the prescribed format. The Company shall disclose this Policy on its website and also in its annual report.

Register of Contracts/Arrangements in which Directors are interested

The Company shall maintain a Register of Contracts with Related Parties in accordance with the requirements of Section 189 of the Act to record particulars of all contracts /arrangements to which Section 184(2) and Section 188 of the Act applies and place such register before the next meeting of the Board and obtain signatures of all Directors present at that meeting. The said register shall be authenticated by the Company Secretary or such other person as may be authorized by the Board and shall be preserved permanently. Such Register of Contracts shall be kept at the registered office of the Company or at such other place as the members of the Company may decide, and shall be open for inspection during business hours, except on Saturday. A member of the Company shall be entitled to get the extracts of the said register, within 7 days of the date of the request and upon payment of such fees as may be specified.

Applicability

In the event of any provisions contained in this Policy are inconsistent with the provisions contained in Companies Act, 2013 or RBI regulations or Accounting Standards, etc. or any amendments thereto, (Regulatory Acts), the provisions contained in the Regulatory Acts will prevail.

Amendments to the Policy

The Board of Directors on its own and / or as per the recommendations of Audit Committee and/ or due to any regulatory requirement/amendment can amend this Policy, as and when deemed fit.


186 187

Form No. MR-3

SECRETARIAL AUDIT REPORTFOR THE FINANCIAL YEAR ENDED MARCH 31, 2018

[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To,The MembersSTCI Primary Dealer Limited A/B1 – 801 (A-WING), 8TH FLOOR,MARATHON INNOVA, MARATHON NEXTGEN COMPOUND,LOWER PAREL,MUMBAI – 400 013.

We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by STCI Primary Dealer Limited (hereinafter called “the Company”). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/ statutory compliances and expressing our opinion thereon.

Based on our verification of books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on March 31, 2018, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanisms in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company as given in Annexure I, for the financial year ended on March 31, 2018, according to the provisions of:

(i) The Companies Act, 2013 (“the Act”) and the Companies Amendment Act, 2017 as amended from time to time and the Companies Act, 1956 (to the extent applicable) and the rules made thereunder;

(ii) The Securities Contracts (Regulation) Act, 1956 (“SCRA”) and the rules made thereunder; [Not applicable to the Company during the audit period] ;

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder; [Not applicable to the Company during the audit period] ;

(iv) The Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings, [Not applicable to the Company during the audit period] ;

(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (“SEBI Act”) were not applicable to the Company during the audit period:-

(a) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”);

b. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; c. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations,1992; d. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009; e. The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)

Guidelines, 1999; f. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; g. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993

regarding the Companies Act and dealing with client and h. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998


186 187

The Laws specifically applicable to the Company:

(i) Non Banking Financial (Non Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007.

(ii) RBI Regulations, Guidelines, Operational Guidelines, Notifications & Circulars as may be applicable to the extent of Capital Adequacy and Risk Management Guidelines for Standalone Primary Dealers.

We have relied on the representations made by the Company and its Officers for systems and mechanism formed by the Company for compliances under other Acts, Laws and Regulations applicable to the Company which are stated above very specifically.

We have also examined compliance with the applicable clauses of the Secretarial Standards issued by The Institute of Company Secretaries of India.

During the financial year under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above


• The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

• Adequate notice is given to all the Directors to schedule the Board and Committee Meetings. Agenda and detailed notes on agenda were sent atleast seven days in advance and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

• All decisions at the Board and Committee Meetings are carried out unanimously as recorded in the minutes of the meetings of the Board of Directors or Committees of the Board, as the case may be.

We further report that based on review of compliance mechanism established by the Company and on basis of the representations made by the Company and its Officers, presentation of the Internal and Concurrent Auditors and Compliance Certificate(s) issued by the Company Secretary & other Senior Management Personnel and taken on record by the Board at their meeting(s), we are of the opinion that there are adequate systems and processes in place in the Company which is commensurate with the size and operations of the Company, to monitor and ensure compliance with applicable laws, rules, regulations and guidelines to the Company.


i. The Company is a Non-Banking Financial Institution and Non Deposit Accepting Company vide its Registration Number: N13.01865 dated 23rd May 2007.

ii. The Primary Dealer Business Authorization issued by Reserve Bank of India is valid upto June 30, 2019.

iii. The Company has declared and paid an Interim Dividend at 10% (i.e. Re. 1/- per share) for Financial Year 2017-2018. The said Interim Dividend was approved through resolution passed by way of circulation on April 11, 2018 and intimation for the same has been made to the Reserve Bank of India on April 17, 2018

iv. The Company has made payment to various Associations/Institutes/Fund towards Corporate Social Responsibility (CSR) amounting to ` 2,79,08,800/- (Rupees Two Crores Seventy Nine Lakhs Eight Thousand Eight Hundred Only) in compliance with its CSR Policy and in accordance with the requirements of Companies Act, 2013.

For DILIP BHARADIYA & ASSOCIATES

DILIP BHARADIYAProprietorFCS No.: 7956, C P No.: 6740

Place : MumbaiDate : 26th April 2018


188 189

ANNEXURE - I

DOCUMENTS VERIFIED DURING THE COURSE OF AUDIT INCLUDES:

1. Memorandum & Articles of Association of the Company;

2. Annual Report for the Financial Year ended March 31, 2017.

3. Minutes of the meetings of the Independent Directors Meeting, Board of Directors, Audit Committee, Nomination and Remuneration Committee, Risk Management Committee, IT Committee and Corporate Social Responsibility Committee held during the financial year under review, alongwith the Attendance Registers;

4. Internal Compliance Checklist of the Company.

5. Quarterly Internal and Concurrent Audit Reports.

6. RBI Inspection Report.

7. BSE Inspection Report.

8. Minutes of General Body Meeting held during the financial year under review;

9. Statutory Registers viz.

• Register of Directors & KMP & Directors Shareholding

• Register of loans, guarantees and security and acquisition made by the Company- Not applicable during the period under review

• Register of Charge- Not applicable

• Register of Related Party Transaction- Transactions are in the Ordinary Course of Business at Arm’s Length Basis.

• Register of Members;

10. Agenda papers submitted to all the Directors/ Members for the Board and Committee Meetings;

11. Declarations received from the Directors of the Company pursuant to the provisions of Section 184(1), Section 164(2), Section 149(3) and Section 149(7) of the Companies Act, 2013;

12. E-Forms filed by the Company, from time-to-time, under applicable provisions of the Companies Act, 1956, if any and Companies Act, 2013, as amended from time to time alongwith the attachments thereof, during the financial year under review.


188 189

To,

The Members,STCI PRIMARY DEALER LIMITEDMUMBAI

Our report of even date is to be read along with this letter,

1) Maintenance of secretarial record is the responsibility of the Management of the Company. My responsibility is to express an opinion on these secretarial records based on our audit.

2) I have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. I believe that the processes and practices, I followed provide a reasonable basis for our opinion.

3) I have not verified the correctness and appropriateness of financial records and Books of accounts of the Company.

4) Wherever required, I have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc.

5) The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. My examination was limited to the verification of procedures on test basis.

6) The Secretarial Audit report is neither an assurance as to future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.

For DILIP BHARADIYA & ASSOCIATES

DILIP BHARADIYAProprietorFCS No.: 7956, C P No.: 6740

Place : MumbaiDate : 26th April 2018


190 191

TO THE MEMBERS OF STCI PRIMARY DEALER LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of STCI PRIMARY DEALER LIMITED (hereinafter referred to as “the Company”) which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in sub-section 5 of Section 134 of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.


Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under and the Order under sub-section 11 of Section 143 of the Act.

We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, specified under sub section 10 of Section 143 of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Board of Directors, as well as evaluating the overall presentation of the standalone financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31, 2018, its profit and its cash flows for the year ended on that date.

INDEPENDENT AUDITOR’S REPORT


190 191



1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”), issued by the Central Government of India in terms of sub-section 11 of Section 143 of the Act, we give in the “Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by sub-section 3 of Section 143 of the Act, based on our audit, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion and to the best of our information and according to the explanations given to us, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

(c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under section 133 of the Act.

(e) In pursuance to the Notification No. G.S.R 463(E) dated 05-06-2015 issued by the Ministry of Corporate affairs, sub-section 2 of Section 164 of the Act pertaining to disqualification of Directors, is not applicable to the Government Company. As informed to us by the Company the Board of Directors has taken on record written representations received from the directors as on March 31, 2018. As per the written representation received none of the directors is disqualified as on March 31, 2018, from being appointed as a director in terms of sub-section 2 of Section 164 of the Act.

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B” to this report.

(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 as amended by the Companies (Audit and Auditors) Amendment Rules, 2017, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note 22.1 of the financial statements).

ii. The Company has made provision as at March 31, 2018 as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts; and

iii. As at March 31, 2018 there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

3. As required by sub section 5 of Section 143 of the Act and in terms of directions issued by the Comptroller and Auditor General of India during the course of audit of annual accounts of STCI PRIMARY DEALER LIMITED, we report that:

(a) The Company does not hold any freehold / leasehold land.

(b) The Company has not waived / written off any debt / loans or interest during the year under consideration.

(c) The Company does not have any inventories lying with the third parties excepting for the collaterised securities with the RBI/CCIL for availing secured borrowings and with IL&FS/HDFC bank for trading purposes / margin requirements, for which proper records have been maintained by the Company. Similarly, the Company has not received any assets as gift / grant from the Government or other authorities.

(d) The Company has not waived / reversed accounted fees which was due but not received / written off.

For SHAH GUPTA & CO.,Chartered AccountantsFirm Registration No.: 109574W

Vipul K ChoksiPartnerM. No. 37606Place: MumbaiDate : April 26, 2018


192 193

(Referred to In paragraph 1 under ‘Report on other Legal and Regulatory Requirements’ section of our report to the Members of STCI Primary Dealer Limited of even date)

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) As explained to us, the fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us, the title deeds of immovable properties of the Company are held in the name of the Company.

(ii) The Company’s inventory comprising of Treasury bills and Dated Government Securities are held in the form of Subsidiary General Ledger (SGL) account maintained with the Reserve Bank of India and the said stock is verified with the confirmation certificate received from the Reserve Bank of India. The Stock of other securities are held by the Company in de-materialized form with IL&FS/HDFC Bank, and the same are verified with the confirmation certificates received from them at the year end. In our opinion, the frequency of such verification is reasonable and as explained to us, the Company is maintaining proper records of securities held as stock-in-trade and no material discrepancies were noticed on physical verification of inventories as compared to the book records.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Act. Accordingly, reporting under paragraph 3(iii) (a), (b) and (c) of the Order is not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there are no loans, investments, guarantees, and securities granted in respect of which provisions of section 185 and 186 of the Act are applicable to the Company. Accordingly, reporting under paragraph 3(iv) of the Order is not applicable to the Company.

(v) According to the information and explanations given to us, the Company has not accepted any deposits from the public and hence, reporting under paragraph 3(v) of the Order is not applicable to the Company.

(vi) To the best of our knowledge and as explained, the Central Government has not specified the maintenance of cost records under sub-section 1 of Section 148 of the Act.

(vii) (a) According to the information and explanations given to us, and the records of the company examined by us except stamp duty on transaction of Non-Government securities (Refer Note 22.19), the Company is generally regular in depositing with the appropriate authorities undisputed statutory dues including provident fund, employees’ state insurance, income tax, service tax, goods and service tax, cess and other material statutory dues applicable to it. According to the Information and explanations given to us, there are no undisputed amounts payable in respect of Income tax, service tax, goods and service tax, cess and other material statutory dues which were outstanding, at the year end, for a period of more than six months from the date they became payable, except stamp duty on Non-Government securities aggregating to- ` 337.58 lakhs is outstanding for more than six months as on March 31, 2018. (Refer Note 22.19 of the standalone financial statements).

(b) According to the information and explanations given to us, there are no disputed amounts payable in respect of income tax, service tax, goods and service tax, cess and other material statutory dues which were outstanding, at the year end, for a period of more than six months from the date they became payable.

ANNEXURE A TO THE INDEPENDENT AUDITORS’ REPORT


192 193

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to the banks and the financial institutions. The Company has not taken any loans from government or by way of issue of debentures.

(ix) Based on our audit procedures performed for the purpose of reporting the true and fair view of the standalone financial statements and according to the information and explanations given to us by the Management, the Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year under review. Accordingly, reporting under paragraph 3(ix) of the Order is not applicable to the Company.

(x) Based on the audit procedures performed for the purpose of reporting the true and fair view of the standalone financial statements and according to the information and explanations given by the Management, we report that no material fraud by the Company and on the Company by its officer or employees has been noticed or reported during the year.

(xi) Based on the audit procedures performed for the purpose of reporting the true and fair view of the standalone financial statements and according to the information and explanations given by the Management, we report that the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

(xii) In our opinion, the Company is not a Nidhi Company. Therefore, reporting under paragraph 3 (xii) of the Order are not applicable to the Company.

(xiii) Based on our audit procedures performed for the purpose of reporting the true and fair view of the standalone financial statements and according to the information and explanations given by the management, transactions with the related parties are in compliance with Sections 177 and 188 of the Act, where applicable and the details have been disclosed in the notes to the standalone financial statements, as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overall examination of the Balance Sheet, the Company has not made any preferential allotment / private placement of shares or fully or partly convertible debentures during the year.

(xv) Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements, in our opinion and according to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him.

(xvi) In our opinion and according to the information and explanations given to us, the Company is required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934 and the registration certificate has been obtained.





194 195

ANNEXURE B

(Referred to In paragraph 2(f) under ‘Report on Other Legal and Regulatory Requirements’ section of our report to the Members of STCI PRIMARY DEALER LIMITED of even date)

We have audited the internal financial controls over financial reporting of STCI PRIMARY DEALER LIMITED (hereinafter referred to as “the Company”) as of 31 March 2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.


The Company’s is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (“the Guidance Note”) issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.


Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting of the Company based on our audit. We conducted our audit in accordance with the Guidance Note issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under sub-section 10 of Section 143 of the Act, to the extent applicable to an audit of Internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting.


A Company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone financial statements for external purposes in accordance with generally accepted accounting principles. A Company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorisations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the Company’s assets that could have a material effect on the standalone financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also,

ANNEXURE B TO THE INDEPENDENT AUDITORS’ REPORT


194 195

projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting Issued by the Institute of Chartered Accountants of India.





196 197

INDEPENDENT AUDITORS’ REPORT

TO THE BOARD OF DIRECTORS OF STCI PRIMARY DEALER LIMITED

Pursuant to the paragraphs 3 (A) and (C) of the Non-Banking Financial Companies Auditor’s Report (Reserve Bank) Directions, 2016 (“the Directions”) issued by the Reserve Bank of India (RBI), we have examined the matters specified in the directions in respect of STCI Primary Dealer Limited (hereinafter referred to as “the Company”), for the year endedMarch 31, 2018.

Management’s Responsibility

The Management is responsible for the design and implementation of internal procedures, systems, processes and controls to ensure compliance with the Directions on an ongoing basis. The Management is also responsible for ensuring that the Company complies with the requirements of the Directions and for providing all relevant information to RBI.


Pursuant to the requirements of the directions it is our responsibility to examine the books and other records of the Company and report on the matters as prescribed by the RBI.

We conducted our examination in accordance with the Guidance Note on Audit Reports and Certificates for Special Purposes by the Institute of Chartered Accountants of India. The Guidance Note requires that we comply with the ethical requirements of the Code of Ethics issued by the Institute of Chartered Accountants of India.

We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements.

Conclusion

Based on our examination of the books and records of the Company as produced for our examination, and the information and explanations given to us, we further report that:

1. (a) The Company is engaged in the business of non-banking financial institution and has obtained a Certificate of Registration No. 13.01865 dated 23.05.2007, as provided in Section 45-IA of the Reserve Bank of India Act, 1934.

(b) The Company is entitled to continue to hold Certificate of Registration in terms of its asset/income pattern as on March 31, 2018.

(c) The Company is meeting the required net owned fund requirement as laid down in Master Direction - Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016.

2. (a) The Board of Directors has passed a resolution for the non-acceptance of any public deposits.

(b) ) The Company has not accepted any public deposits during the relevant year.

(c) The Company has complied with the prudential norms relating to income recognition, accounting standards, asset classification and provisioning for bad and doubtful debts as applicable to it.

(d) The capital adequacy ratio as disclosed in the return submitted to the Reserve Bank of India in form NBS-7, has been correctly arrived at and such ratio is in compliance with the minimum capital to risk weighted asset ratio as prescribed by the Reserve Bank of India.

(e) The Annual Statement of Capital Funds, risk assets / exposures and risk asset ratio in form NBS-7 has been submitted within the stipulated period.

(f) The Company is not NBFC Micro Finance Institutions (MFI) as defined in the Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016.




196 197

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) OF THE COMPANIES ACT, 2013 ON THE FINANCIAL STATEMENTS OF STCI PRIMARY DEALER LIMITED FOR THE YEAR ENDED 31 MARCH 2018 ThepreparationofFinancialStatementsofSTCIPrimaryDealerLimitedfortheyearended31March2018inaccordancewiththefinancialreportingframeworkprescribedundertheCompaniesAct,2013(Act) istheresponsibilityofthemanagementoftheCompany.TheStatutoryAuditorappointedbytheComptrollerandAuditorGeneralofIndiaundersection139(5)oftheActisresponsibleforexpressingopinionontheFinancialStatementsundersection143oftheActbasedon independentaudit inaccordancewithstandardsonauditingprescribedunderSection143(10)oftheAct.ThisisstatedtohavebeendonebythemvidetheirAuditReportdated26April2018.

I,onbehalfoftheComptrollerandAuditorGeneralofIndia,haveconductedaSupplementaryAuditundersection143(6)(a)oftheActoftheFinancialStatementsorSTCIPrimaryDealersLimitedfortheyearended31March2018.ThisSupplementaryAudithasbeencarriedoutindependentlywithoutaccesstotheworkingpapersortheStatutoryAuditorsandislimitedprimarilytoinquiriesortheStatutoryAuditorsandcompanypersonnelandaselectiveexaminationofsomeoftheaccountingrecords.OnthebasisofmyauditnothingsignificanthascometomyknowledgewhichwouldgiverisetoanycommentuponorsupplementtoStatutoryAuditor’sReport.



Place:MumbaiDate:June20,2018


198 199

BALANCE SHEET AS AT MARCH 31, 2018(` in Lakhs)




I. EQUITY AND LIABILITIES1) Shareholders’ funds

(a) Share Capital 1 15,000.00 15,000.00(b) Reserves and surplus 2 34,469.41 30,554.19

2) Non-current liabilities(a) Long-term provisions 3 508.36 923.46

3) Current liabilities(a) Short-term borrowings 4 7,23,660.58 4,88,413.06(b) Trade payables 22.21

Total outstanding dues of creditors other than micro and small enterprises

46.71 61.00

(c) Other current liabilities 5 15,869.95 13,012.26(d) Short-term provisions 6 356.16 358.57

TOTAL 7,89,911.17 5,48,322,54II. ASSETS1) Non-current assets

(a) Property, Plant and Equipment 7 1,669.11 1,711.34(b) Intangible assets 5.19 23.95(c) Non-current investments 8 45,330.18 36,306.49(d) Deferred tax assets (net) 22.7 148.22 21.21(e) Long-term loans and advances 9 27.97 25.65

2) Current assets(a) Inventories 10 7,15,371.20 4,83,371. 76(b) Trade receivables 11 0.68 -(c) Cash and bank balances 12 118.33 5,047.63(d) Short-term loans and advances 13 3,545.95 2,571.41(e) Other current assets 14 23,694.34 19,243.10

TOTAL 7,89,911.17 5,48,322,54Significant Accounting Policies & Notes to Accounts 21 & 22

The accompanying notes are an integral part of financial statements

In terms of our report of even date For and on behalf of the Board of DirectorsFor Shah Gupta & Co.Chartered AccountantsFirm Registration No.- 109574W

G Narayanan R VenkataramaniDirectorDIN : 00210831

DirectorDIN : 00829107

Vipul K Choksi Sonali Sinha Pradeep Madhav

Partner DirectorDIN : 07092640


Membership No.: 37606Prasanna Patankar M N SureshManaging Director Chief Financial OfficerDIN : 07658714

Place: Mumbai Kalpesh ModyDate: April 26, 2018 Company Secretary


198 199

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2018(` in Lakhs)




I Revenue from operations 15 45,182.82 60,204.38

II Other income 16 81.28 61.15

III Total Revenue (I + II) 45,264.10 60,265.53

IV Expenses:

Operating expense 17 999.83 1,489.70

Employee benefits expense 18 663.55 1,183.22

Finance costs 19 36,550.35 29,408.08

Depreciation and amortization expense 7 90.18 97.73

Other expense 20 959.53 718.29

Total expenses 39,263.44 32,897.02

V Profit before tax (III-IV) 6,000.66 27,368.51

VI Tax expense:

(a) Current tax 2,150.00 9,585.00

(b) Deferred tax liability/(Asset) (127.01) (28.49)

(c) Short/(Excess) provision for tax for earlier years 62.46 -

VII Profit after tax (V-VI-VII) 3,915.21 17,812.00

VIII Earnings per equity share:

Basic & Diluted (Per Value of ` 10/- each) 22.6 2.61 11.87

The accompanying notes are an integral part of financial statements










200

CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2018 (` in lakhs)



A Cashflow from operating activities

Net Profit before Taxation 6,000.66 27,368.51

Adjustments for:

Add: Depreciation on Fixed Assets 90.18 97.73

Add: (Profit) / Loss on sale of Fixed Asset 1.06 (0.66)

Add: Amortisation on HTM Securities 151.78 78.15

Operating Profit before working capital changes 6,243.68 27,543.73


(Increase) / Decrease in Stock in Trade (2,31,999.44} 47,535.63

(Increase) / Decrease in Trade receivables (0.68) 9.07

(Increase) / Decrease in Short-term loans and advances

(974.54) (1,344.75)

(Increase) / Decrease in Other current assets (4,451.24) (386.96)

(Increase) / Decrease in Long-term loans and advances

(2.32) (5.41

Increase / (Decrease) in Long Term Provisions (415.10) 488.74

Increase / (Decrease) in Trade payables (14.29) (26.52)

Increase / (Decrease) in Other current liabilities 2,857.69 403.42

Increase / (Decrease) in Short-term provisions (0.52) (2,35,000.44) 134.36 46,807.58

Cash flow from / (used in) operating activities (2,28,756.76) 74,351.31

Less: Taxes Paid 2,214.35 8,939.82

Net Cash flow from / (used in) Operating Activities (2,30,971.11) 65,411.49

B Cash flow from Investing Activities

Less: Purchase of Securities (9,175.47} (1,07,597.92

Less: Purchase of Fixed Assets (31.74) (42.54)

Add: Sale of Fixed Assets 1.49 0.68

Net Cash Flow from / (used in) Investing Activities (9,205.72) (946.09)

C Cash flow from Financing Activities

Less: Payment of Dividend (including DDT) - {9,026.83)

Add: Increase / (Decrease) in Short Term Borrowings 2,35,247.52 (50,442.31

Net Cash Flow from Financing Activities 2,35,247.52 (59,469.14)


200 201

CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2018 (` in lakhs)



Net increase / (decrease) in cash & cash equivalent (A+B+C)

(4, 929.31) 4,996.27

Cash & cash equivalent at the beginning of the year 5,025.88 51.37

Cash & cash equivalent at the end of the year 96.58 5,025.88

Deposits having maturity of more than 3 months and less than 12 months

21.75 21.75

Cash & Bank balances at the end of the period 118.33 5,047.63

Prepared as per “Indirect Method” as prescribed by accounting standard 3 (Revised) “Cash Flow Statements”










202 203


(` in lakhs)NOTE 1: SHARE CAPITAL

Particulars As at March 31, 2018 As at March 31, 2017 Number (` in lakhs) Number (` in lakhs)

AuthorisedEquity Shares of ` 10/- each 300,000,000 30,000.00 300,000,000 30,000.00

Issued, Subscribed & Fully Paid upEquity Shares of ` 10/- each fully paid 150,000,000 15,000.00 150,000,000 15,000.00

Total 150,000,000 15,000.00 150,000,000 15,000.00

Note 1.1 Reconcilliation of the number of shares outstanding

Particulars As at March 31, 2018 As at March 31, 2017 Number (` in lakhs) Number (` in lakhs)

Shares outstanding at the beginning of the year 150,000,000 15,000.00 150,000,000 15 000.00Shares Issued during the year - - - -Shares bought back during the year - - - -Shares outstanding at the end of the year 150,000,000 15,000.00 150,000,000 15,000.00

Note 1.2: Details of aggregate shareholding by Holding Company, subsidiary of holding company or Associate of holding Company

Name of Shareholder As at March 31, 2018 As at March 31, 2017No. of Shares No. of Shares

STCI Finance Limited (Holding Company)* 150,000,000 150,000,000* Includes 6 shares held by the nominee

Note 1.3: Terms and Rights attached to equity shares

Each equity share is entitled to one vote per share. The Company has only one class of equity shares having par value of ` 10/- each. In the event of liquidation by the company, the shareholder of equity share will be entitled to receive remaining assets of the Company after distribution of all the preferential amount. Distribution will be in proportion number of equity shares held by each shareholder.

Note No. 1.4: Shareholders holding more than 5% of equity shares of the company are as under.

Name of Shareholder As at March 31, 2018 As at March 31, 2017No. of

Shares held% of

Holding No. of

Shares held% of

Holding STCI Finance Limited (Holding Company)* 150,000,000 100% 150,000,000 100%* Includes 6 shares held by the nominee

Note No. 1.5: Details of Shares bought back during past five years






Equity Shares Equity Shares Equity Shares Equity Shares Equity Shares

Number ( in lakhs)

Number ( in lakhs)

Number ( in lakhs)

Number ( in lakhs)

Number ( in lakhs)

No. of Shares bought back - - - - - - 16,000,000.00 1,600.00 - -


202 203


(` in lakhs)NOTE 2: RESERVE AND SURPLUS



a. Statutory Reserves (Reserve created pursuant to Section 45 I-C of Reserve Bank of India Act, 1934)

Opening Balance 9,329.49 5,767.09

(+) Current Year Transfer 783.05 3,562.40

(-) Written Back in Current Year - -

Closing Balance 10,112.54 9,329.49

b. General Reserve

Opening Balance 105.94 105.94

(-) Written Back in Current Year - -

Closing Balance 105.94 105.94

c. Capital Redemption Reserve

Opening balance 5,000.00 5,000.00

(+) Transfer from General Reserve/ Profit & Loss during the year - -

(-) Transfer to Profit & Loss during the year - -


d. Reserve on Sale of HTM Securities


(+) Transfer from General Reserve/ Profit & Loss during the year - -

(-) Transfer to Profit & Loss during the year - -


e. Surplus


(+) Net Profit/(Net Loss) after appropriation 3,915.21 17,812.00

(-) Transfer to ReseJYes (Profit on Sale of HTM Securities) . .

Profit available for appropriations 783.05 3,562.40

Less: Appropriations

(-) Interim Dividend . 7,500.00

(·) Tax on interim dividend . 1,526.83


Total 34,469.41 30,554.19

*Net Profit (after tax) from sale of securities through HTM portfolio have been transferred to Reserve on Sale of HTM Account as per RBI Guidelines. The same will be utilised as per the provisions of the applicable Act.


204 205

NOTE 3: LONG TERM PROVISIONS



Provision for Employee benefits

(a) Provision for Employee Leave Encashment a Gratuity 97.41 97.68

(b) Performance Linked Incentive Scheme 212.22 609.35

Less: Transfer to other current liabilities (Refer Note 5) (138.85) (106.56)

170.78 600.47

Others

Stamp Duty (Refer Note No. 22.20) 337.58 322.99

Total 508.36 923.46

NOTE 4: SHORT TERM BORROWINGS



Secured

a. Other loans and advances

a.1 Collateral Borrowing and Lending Obligation (CBLO) Segment 1,83,390.59 1,03,271.68

(Carries interest rate between 1.51% to 7.25% and is repayable in 2-12 days)

(PY - Carries interest rate between 5.45% to 6.15% and is repayable in 3-18 days)

(Secured By Collateral of Govt. Securities & Treasury Bills)

(of the above, ` Nil is guaranteed by Directors and / or others)

a.2 Borrowing Under Repo 1,11,248.66 1,46,267. 94

(Carries interest rate between 6.5% to 7.05% and is repayable in 2 days)

(PY - Carries interest rate between 2.5% to 6.30% and is repayable in 3 days)



a.3 Borrowing Under LAF/Refinance from RBI 1,60,600.00 16,000.00

(Carries interest rate 6.00 to 6.31% and is repayable in 2- 12 days (LAF), Carries interest rate) of 6.00% and is repayable within 33 days( Refinance))

(PY Carries interest rate of 6.25% and is repayable within 3 days(LAF))



Total (A) 4,55,239.25 2,65,539.62

Unsecured

(a) Loans repayable on demand

from banks (repayable at call/short notice/term) 2,51,357.00 2,17,847.00

(Carries interest rate between 6.10% to 9.50% and is repayable between 2-93 days)


(` in lakhs)


204 205



(PY Carries interest rate between 5.90% to 6.50% and is repayable between 3-80 days)

from other parties (Inter-corporate Deposit) 17,064.33 5,026.44


(Carries interest rate of 9.64% and is repayable within 2-85 days)

(PY Carries interest rate between 6.04% to 7.37% and is repayable between 3-84 days)

Total (B) 2,68,421.33 2,22,873.44

Total (A+B) 7,23,660.58 4,88,413.06

Continuing default as on the balance sheet date in repayment of loans and interest

1. Period of default Nil Nil

2. Amount Nil Nil

NOTE 5: OTHER CURRENT LIABILITIES



(a) Current dues of long term employee benefits (Refer Note 3)

(i) Leave Encashment 32.74 32.21

(ii) Performance Linked Incentive Scheme 106.11 74.35

138.85 106.56

(b) Interest accrued but not due on borrowings 1,932.78 438.40

(c) Statutory dues 19.77 6.23

(d) MTM Payable on Interest Rate Swaps (Refer Note 22.19a) 13,742.80 12,435.30

(e) Other payables 35.75 25.77

Total 15,869.95 13,012.26

NOTE 6: SHORT TERM PROVISIONS



(a) Provisions for employee benefits 1.50 2.02

(b) Provision for tax* (Net of advance tax ` 21,482.53 Lakhs (PY ` 19,268.18 Lakhs)

354.66 356.55

Total 356.16 358.57

*This figure includes ` 151 lakhs (PY ` 151 lakhs) paid under protest to Income Tax Department for which order has been passed in companies favour in FY 2017-18 and refund is yet to be received.


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NOTE 8: NON CURRENT INVESTMENTS



Non trade Investments

Investments in HTM Portfolio*

(a) Aggregate amount of quoted Investments in Government securities - (Current Year - Amortized cost)

44,830.18 35,806.49

Total 44,830.18 35,806.49

Others-Investment in Mutual Funds

(a) HDFC Charity Fund for Cancer Cure-Arbitrage Plan-Direct option- 100% Dividend Donation (Close Ended Scheme)**

500.00

500.00

Total 500.00 500.00

Additional information:-

Aggregate amount of quoted investments (HTM Investments) (Face Value) 43,500.00 34,500.00

Aggregate amount of quoted investments (HTM Investments) (Market Value)

41,868.49 35,241.75

Aggregate amount of quoted investments (Mutual Fund) (Face Value) 500.00 500.00

Aggregate amount of quoted investments (Mutual fund) (Market Value) 501.45 500.00

Aggregate provision for diminution in value of investment Nil Nil

Basis for Valuation (Refer Note no. 21.5) At Cost At Cost

Details of quoted Investment in HTM Portfolio (At Cost)

Investments in Government securities

6.97% Government Securities 2026 (345,00,000 Units of Rs 100/- each) 35,667.95 35,806.49

6.79% Government Securities 2027 (90,00,000 Units of Rs 100/- each) 9,162.23

Total 44,830.18 35,806.49

**Kept as collateral to the extent of face value of ` 43,500 lakhs was placed for LAF Borrowing. (For the PY 2016-17, collateral to the extent of face value of ` 34,500 lakhs was palced for REPO Borrowing)

** The Company has made investment in HDFC Cancer Cure Fund. As per the scheme, any dividend declared in the said scheme will be contributed directly to Indian Cancer Society and is eligible to be considered towards Company’s contribution towards CSR commitment. The said scheme is a close ended scheme.

NOTE 9: LONG TERM LOANS & ADVANCES



Unsecured, considered goodSecurity Deposits 27.97 25.65 Advance Tax and tax deducted at source* (Net of provision for tax ` 21,837.19 Lakhs (PY ` 19,624.73 lakhs)

- -

Total 27.97 25.65

* *This figure includes ` 151 lakhs (PY ` 151 lakhs) paid under protest to Income Tax Department for which order has been passed in companies favour in FY 2017-18 and refund is yet to be received.


(` in lakhs)


208 209

NOTE 10: INVENTORY (STOCK IN TRADE)



(a) Investments in Central Government securities (CGS) 53,784.56 75,444.05

(b) Investments in State Development Loans (SDLs) 85,247.15 25,290.36

(c) Investments in Government special securities 20,795.91 45,242.31

(d) Investments in Treasury Bills 303,968.32 173,320.87

(e) Investments in Debentures or Bonds 203,350.00 135,637.40

(f) Investments in Equity Shares - 56.08

(g) Investments in Commercial Papers 48,225.26 28,380.69

Total 715,371.20 483,371.76

1. Stock-in trade as on March 31, 2018 includes T-Bills of Face Value of ` 2,07,411 lakhs (PY ` 1,22,100 lakhs) held as collateral with The Clearing Corporation of India.

2. It further includes CGS, SDLs, SPLs and T-Bills of Face Value of ` 1,09,187.00 lakhs (PY ` 1,10,097 lakhs) placed as collateral against REPO borrowings.

3. CGS, SDL and T-Bills of face value of ` 84,246.30 lakhs (PY ` 16,178.30 lakhs) placed as collaterals agaisnt LAF Borrowing.

4. T-Bills of face value ` 46,000 lakhs (PY ` Nil) placed as collateral agaisnt Refinance Borrowing.

Additional Information:

Aggregate amount of quoted investments (Face Value) 677,342.80 455,409.57

Aggregate amount of quoted investments (Market value) 667,685.57 456,313.00

Aggregate amount of unquoted investments (Face Value) 50,000.00 30,000.00

Aggregate provision for diminution in value of quoted investment Nil Nil

Basis of Valuation (Refer Note no. 21.4) : -

Investment in Government Securities (Including Treasury Bills) Aggregate Cost or Market Value whichever is less

Aggregate Cost or Market Value whichever is less

Investment in Debentures or Bonds

Investment in Equity Instruments

Investment in Other Instruments At Cost At Cost

NOTE 11: TRADE RECEIVABLES



Unsecured, considered good

Others 0.68 -

0.68 -


(` in lakhs)


208 209

NOTE 12: CASH AND BANK BALANCES


Cash and Cash equivalents

(a) Balances with banks 96.54 5,025.82

In Current Account with RBI 69.62 20.11

In Current Account with Others 26.92 5.71

In FIXed Deposit account with maturity less than 3 months at inception

- 5,000.00

(b) Cash on hand 0.04 0.06

Other bank balances

Deposits with maturity of more than 3 months but less than 12 months at inception

21.75 21.75

Total 118.33 5,047.63

Note: Fixed deposit of ` 21.75 lacs is pertaining to capital requirements for Interest Rate futures segment with NSE/BSE.

NOTE 13: SHORT TERM LOANS AND ADVANCES


Secured, considered good

Lending under CBLO 754.74 -

Unsecured, considered good

Loans and advances (Others)

(a) Margin Money with CCIL (Securities & CBLO segment) 724.00 563.00

(b) Margin Money with NSE (Currency,IRF & Equity) 1,904.00 1,904.00

(c) Margin Money with BSE (Currency & IRF) 32.25 32.25

(d) Margin Money with MSEI(MCX) (Currency) 1.00 1.00

(e) Margin Money with NDS (Debt) 1.00 1.00

(f) Margin Money with IL&FS (IRF) 2.00 2.00

(g) Advance paid to suppliers 2.45 0.31

(h) Advance paid to staff 0.73

(i) Prepaid expenses 114.57 67.12

(j) GST Input Credit 9.94 -

(k) Daily MTM on Equity Futures - -

Total 3545.95 2571.41


(` in lakhs)


210 211

NOTE 14: OTHER CURRENT ASSETS

Other Current Asset As at March 31, 2018 As at March 31, 2017

(a) Accrued Interest Income which includes:- 9,971.00 6,876.23

On Government Securities (Trading) 1,034.25 1,424.38

On State Development Loan (SDL’s) 589.15 94.60

On GOI Special Securities 204.72 177.99

On Corporate Bond 7,670.97 4,904.70

On Government Securities (Investment) 397.85 166.99

On Fixed Deposit - 4.66

On Others 74.06 102.91

(b) Other Receivables - -

(c) MTM Receivable on Interest Rate Swaps (Refer Note 22.19a)

13,723.34 12,366.87

Total 23,694.34 19,243.10

NOTE 15: REVENUE FROM OPERATIONS(` in lakhs)



(a) Trading Profit/(Loss) on securities (Refer A below) 237.56 24,128.28

Government Securities 4.32 14,708.55

State Development Loans 805.14 3,947.55

GOI Special Securities 465.59 3,990.52

Corporate Bonds -1,535.07 42.42

Zero Coupan Bonds 73.82 164.23

Liquid Mutual Fund 364.18 774.22

Equity Shares 20.15 402.21

Equity Futures & Options -92.67 -263.39

Interest Rate Swaps 8.27 -5.02

Interest Rate Futures 15.15 -87.95

Currency Futures -2.17 -24.92

Treasury Bills 100.58 295.65

Commercial Papers 10.44 18.25

Certificate of Deposits -0.17 165.96


(` in lakhs)


210 211



(b) Interest Income on Discounted Instrument (Refer B below)

17,308.43 14,451.52

Treasury Bills 14,110.96 10,349.29

Commercial Papers 3,152.59 2,179.62

Certificate of Deposits 33.81 1,908.29

CBLO Lending 11.07 14.32

(c) Interest Income 27,477.63 21,502.11

Interest on -

Call Money - 1.24

Government Securities 5,942.41 6,960.85

State Development Loan 4,488.22 1,881.75

GOI Special Securities 1,556.64 1,850.38

Corporate Bond 15,100.99 10,109.41

Fixed Deposit 7.57 20.42

Income from Repo 257.10 539.15

Other Interest 124.70 138.91

(d) Underwritting & Other Income 159.20 122.47

Underwriting Fees 158.25 95.78

Other Fee & Incentive Income 0.95 1.57

Dividend Income - 25.12

Total 45,182.82 60,204.38

*Interest Income on Governement Securities includes interest on HTM investments of ` 2,859.58 lakhs (PY ` 1820.81 lakhs)

⁺Refer Note no 22.8 in Notes forming part of the financial statements for MTM value included in closing stock.


(` in lakhs)


212 213

A Trading Profit/(Loss) on securities For the year ended March 31, 2018


(a) Government securities 4.32 14,708.55

Sales (net of brokerage) 34,707,678.17 59,468,168.54

Add : Stock on hand as at the end of the year 53,784.56 75,444.05

Less: (i) Purchases -34,686,014.36 -59,327,680.31

(ii) Stock on hand as at the beginning of the year -75,444.05 -201,223.73

(b) State Development Loans 805.14 3,947.55



Less: (i) Purchases -2,263,463.28 -2,015,907.23


(c) GOI Special Securities 465.59 3,990.52

Sales (net of brokerage) 341,963.69 576,313.65


Less: (i) Purchases -317,051.70 -596,909.11


(d) Corporate Bond -1,535.07 42.42



Less: (i) Purchases -361,243.37 -283,580.53


(e) Zero Coupon Bonds 73.82 164.23


Add : Stock on hand as at the end of the year - 2,426.18

Less: (i) Purchases - -2,323.49


(f) Liquid Mutual Fund 364.18 774.22


Add : Stock on hand as at the end of the year - 500.00

Less: (i) Purchases -1,369,228.00 -2,407,000.00

(ii) Stock on hand as at the beginning of the year - -

(g) Equity Shares 20.15 402.21


Add : Stock on hand as at the end of the year - 56.08

Less: (i) Purchases -1,775.41 -3,835.15

(ii) Stock on hand as at the beginning of the year -56.08 -


(` in lakhs)


212 213

A Trading Profit/(Loss) on securities For the year ended March 31, 2018


(h) Equity Futures & Options -92.67 -263.39

Profit & Loss on Equity F&O -92.67 -263.39

(i) Interest Rate Swap 8.27 -5.02

Profit & Loss including MTM on IRS 8.27 -5.02

(j) Interest Rate Futures 15.15 -87.95

Profit & Loss on Interest Rate Futures 15.15 -87.95

(k) Currency Futures -2.17 -24.92

Profit & Loss on Currency Futures -2.17 -24.92

(l) Treasury Bills 100.58 295.65



Less : (i) Purchases -3,521,372.76 -3,123,295.18


(iii) Discount Income on Treasury bills -14,110.96 -10,349.29

(m) Commercial Papers 10.44 18.25



Less : (i) Purchases -51,479.50 -49,713.12


(iii) Discount Income on Commercial Papers -3,152.59 -2,179.62

(n) Certificate of Deposit -0.17 165.96


Add : Stock on hand as at the end of the year - -

Less : (i) Purchases -2,426.83 -4,727.83

(ii) Stock on hand as at the beginning of the year - -32,582.22

(iii) Discount Income on Commercial Papers -33.81 -1,908.29

Total (A) 237.56 24,153.20

NOTE 16: OTHER INCOME



(a) Previous year’s provision written Back 24.80 3.85 (b) Misc. Receipt 24.18 57.30

(Misc Receipts includes lnterest on Income Tax refund of ` 23.80 lakh (PY ` 57.34 lakhs)

(c) Dividend income* 32.30 - Total 81.28 61.15

* Dividend income not received in our bank account.Refer Note No. 22.13


(` in lakhs)


214 215

NOTE 17: OPERATING EXPENSES



Transaction and Settlement ChargesDP/CCIl Charges 982.21 1,457.00 Stamp Duty 14.59 24.04 IRF Trading Charges 2.35 4.88 Currency Futures 0.68 3.78

Total 999.83 1,489.70

NOTE 18: EMPLOYEE BENEFIT EXPENSES



(a) Salary & Reimbursements 573.28 568.95 (b) Contribution to PF 28.15 28.03 (c) Gratuity (Refer Note 22.10a) 12.01 8.50 (d) Leave Encashment (Refer Note 22.10b) 13.30 0.52 (e) Staff welfare expenses 36.81 42.22 (f) Performance Linked Variable Scheme - 535.00

Total 663.55 1,183.22

NOTE 19: FINANCE COST



(a) Interest expense Interest on - 30,072.29 25,763.57 Call & Notice Money 5,043.70 4,131.37 Borrowing from RBI 2,208.75 1,581.87 Inter-Corporate Deposit 590.89 315.48 Term Money 12,801.49 10,599.80 Refinance from RBI 1,304.23 1,553.81 Repo Borrowing 8,123.23 7,581.24 (b) Interest expense on discounted instrument 6,337.03 3,276.34 CBLO Borrowing 6,337.03 3,276.34 (c) Financial Charges 125.85 233.17 Intraday Liquidity charges 125.85 233.17 (d) Interest Expense on Income Tax

Interest Expense on Income Tax 15.18

15.18

135.00

135.00

Total 36,550.35 29,408.08


(` in lakhs)


214 215

NOTE 20: OTHER EXPENSES

Other Expenses For the year ended March 31, 2018


(a) Administrative Expenses 267.02 219.16

Bank Charges 0.64 0.61

Electricity Charges 23.72 20.33

Insurance Charges 33.02 18.23

Postage,Telephone & Telegrams 40.41 44.95

Printing & stationery Expenses 10.72 11.50

Rent 31.82 27.29

Repairs & Maintanance 61.36 53.72

Rates & Taxes 30.26 6.44

Software maintanance 11.64 10.28

Other office Expenses 23.43 25.81

(b) Professional Fees 93.01 82.65

Rating Charges 21.18 20.61

Internal Audit 11.74 9.20

Software Consultancy 15.88 15.13

Human Resource Consultancy 19.91 20.69

Other professional fees 24.30 17.02

(c) Payment to Auditors 8.39 7.54

for audit services 6.00 6.33

for other services 2.12 0.96

for reimbursement of expenses 0.27 0.25

(d) Others 591.11 408.94

Advertising Expenses 0.26 0.55

Information Services 94.85 105.34

Newspaper & periodicals 4.55 7.07

Business Development Expenses 18.45 15.93

Travelling, Conveyance & Motor Car Expenses 15.72 20.27

Board Meeting Expenses 7.58 11.05

Sitting Fees to Directors 15.85 14.25

(Profit)/Loss on Sale of Assets 1.06 (0.66)

Amortization of Premium on Investment 151.78 78.15

Corporate Social Responsibility Expenditure 279.09 156.47

Miscellaneous Expenses 1.92 0.52

Total 959.53 718.29


(` in lakhs)


216 217

NOTE 21: SIGNIFICANT ACCOUNTING POLICIES

21.1 Basis of Preparation

The financial statements of the company have been prepared under historical cost convention on accrual basis and are in accordance with the generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material aspects with the accounting standards notified under section 133 of the Companies Act, 2013, read with paragraph 7 of the Companies (Accounts) Rules 2014, Companies (Accounting Standards) Amendment Rules, 2016 and circulars and guidelines issued by the Reserve Bank of India from time to time to the extent applicable to Non Banking Finance Companies (NBFCs) and as applicable to Primary Dealers. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.


The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent liabilities as at the date of the financial statements and revenue and expenses for reporting period. Although these estimates are based on the management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

21.3 Revenue Recognition

i. Treasury Bills, Commercial Papers, Certificate of Deposits and Zero Coupon Bonds

The difference between the acquisition cost and the redemption value is apportioned on time basis and recognised as income. The same is included in the carrying amount of these securities and the aggregate amount is regarded as cost for the purpose of valuation of stock-in-trade.

In case of discounted instruments, discount income represents the income accrued from the date of acquisition to the date of sale/maturity. Profit/Loss on sale of discounted instruments is the difference between the sale price and its carrying cost and is part of the trading income.

ii. Government Securities & Corporate Bonds

a) Income from Fixed Income securities is taken into account on accrual basis, provided that interest rate on these instruments is pre-determined and interest is serviced regularly and is not in arrears.

b) The amounts paid and received towards accrued interest on the purchases and sales of Government Securities and Corporate bonds are netted off at the year-end and is also recognised as income under “Interest on Government Securities” and “Interest on Corporate bonds” respectively. Accordingly, in respect of the transactions in Government Securities and Corporate bonds dealt with on outright basis, acquisition cost and sale proceeds are the contracted purchase price and sale price respectively.

c) Interest on fixed coupon debt securities held on balance sheet date is accrued for expired period at coupon rate and interest on floating rate securities is accrued at the. rate determined by the terms of issue.

d) In case of Inflation Indexed Bonds (llB), the interest and consideration towards purchase and sale of llB are indexed with the index ratio prevalent on the date of the transaction. The amounts paid and received towards accrued interest on the purchases and sales of llB are netted off at the year-end and reckoned as income under the head “Interest on llB”. Accordingly, in respect of the transactions in llB, acquisition cost and sale proceeds are the contracted purchase price and sale price respectively.

iii. Collateralized Borrowing and Lending Obligation (CBLO) transactions

Transactions for borrowing and lending under CBLO are accounted for at their discounted values. The difference paid or received on redemption is treated as discount paid on CBLO in case of borrowing and discount earned on CBLO in case of lending. The difference between the discounted value on the borrowing date or the lending date, as the case may be, and the redemption value of the instrument, outstanding on the Balance Sheet date is apportioned on the time basis and recognized as expense or income respectively under the head “Interest/discount income or expenses”. The same is included in the carrying amount of the borrowing or lending.


(` in lakhs)


216 217

iv. Pass Through Certificates

The difference between the acquisition cost (as reduced by the proportionate amount of inflows) and the redemption value is apportioned on time basis (using the IRR at the time of acquisition) and recognised as accrued income. This accrued income is added to the acquisition cost (as reduced by the proportionate amount of inflows) of the respective Pass Through Certificates (PTCs) and the sum is regarded as cost (book value) for the purpose of valuation of closing stock. Any revenue or income received on prepayments is added to the income.

v. Equity and Index Futures and Options

a) The initial margin and the additional margin in form of fixed deposits/cash paid for entering into contracts for equity and index futures and options are disclosed under the head Cash and cash equivalents/Short Term Loans and Advances as the case may be in the Balance Sheet.

b) “Equity Option Premium Account” represents the premium paid or received for buying or selling the options, respectively. The net premium paid or received for buying or selling the option, as the case may be, is recognized in the Profit and Loss Account for all settled/expired contracts. Similarly, on the expiry of the contracts and on exercising the options, the difference between the final settlement price and the strike price is recognised as profit or loss. Gains or losses on stock/index futures contracts are recognized on squaring up of positions or expirey of contracts.

c) The Open positions are marked to market on the balance sheet date and net losses, if any, are provided for while net gains, if any, are ignored.

d) The daily mark-to-market margin paid to/received from the custodian in respect of equity and index futures trades is debited or credited to the daily mark-to-market equity futures account and the same is disclosed under Short Term Loans and Advances or Current Liabilities as the case may be.

e) “Income on Equity Futures and Options” represents the net profit or loss on settled/expired positions in equity index and stock futures and options after adjusting for brokerage and other transaction costs.

vi. Interest Rate Swaps (IRS)

Gains or losses on Interest Rate Swaps (IRS) are accounted for on settlement dates as per the terms of the contract. The net mark-to-market in respect of open positions as at the year end is accounted for on accrual basis.

vii. Currency and Interest Rate Futures:

a) The initial margin and the additional margin in form of fixed deposits/cash paid for entering into contracts for Currency & Interest Rate Futures are disclosed under the head Cash and cash equivalents/Short Term Loans and Advances as the case may be in the Balance Sheet.

b) The daily mark-to-market margin paid to/received from the custodian in respect of Currency & Interest Rate Futures contracts is debited or credited to the daily mark-to-market margin Currency/Interest Rate futures account, as the case may be, on daily basis and the same is disclosed under Short Term Loans and Advances or Current liabilities as the case may be.

c) The Open positions are marked to market on the balance sheet date and net losses, if any, are provided for while net gains, if any, are ignored.

d) Gains or losses on Currency & Interest Rate Futures contracts are recognized on FIFO basis, on squaring up of positions or expiry of contracts, whichever is earlier.

viii. Expenses/Income under Repo Transactions

In line with the revised guidelines issued by the Reserve Bank of India (RBI), repo/reverse repo transactions are treated as borrowing and lending transactions. Further, in line with the RBI guidelines, the difference between the total consideration (clean price and the accrued interest) between the 1st and 2nd leg of the repo and reverse repo transactions is accounted as Repo Expenditure or Repo Income, as the case may be, over the period of the contract.



218 219

ix. Underwriting Commission/Fees

Underwriting commission/fee earned in respect of successful bids/devolvements towards fulfilment of underwriting commitments, to the extent apportionable to the cost, are reduced from the cost of securities devolved and the remaining amount is reckoned as income.

x. Front-end Fees/Arrangers’ Fee

Front-end/Arrangers’ fees, if any, received on subscription to Corporate Bonds. are reckoned as income.

xi. Cost of acquisition of securities includes Brokerage and Securities Transaction Tax (STT), wherever applicable paid towards the transaction. At the time of sale of securities, brokerage and STT are reduced from consideration received.

xii. Dividend income is recognised when the right to receive dividend is established.

xiii. Profit/Loss from trading in Equities and equity exchange traded derivatives is recognised on the basis of weighted average cost on trade dates. Profit/Loss from trading in Government Securities, Corporate Bonds are recognised on the basis of weighted average cost on settlement dates.

xiv. Hedged Portfolio

(a) Securities

Securities or portfolio of securities which are hedged using hedging instruments permitted by RBI are designated as “hedged” are transferred to hedge portfolio at lower of cost or market value on the date of initiation of hedge.

(b) Swap

Swaps that are designated as hedge to any underlying asset are marked to market and the gain or loss on the hedge swap and the hedged portfolio is set off; while the resuitant net loss is being provided for, the net gain is ignored. Gains or losses on termination or redesignation of hedge swaps is recognised against the offsetting gain or loss recognised on the designated asset or liability.

21.4 Classification and Valuation of Stock-in-trade and Investments

Current Investments/Inventories

All the securities acquired with the intention of trading are considered as stock-in-trade and are shown under current assets. Company provides net depreciation category-wise for securities held as stock-in-trade/current investments.

i. All quoted securities (stock-in-trade) are grouped into the following categories i.e. Equity shares, preference shares, debentures and bonds, Govt. securities (including SOLs, SPLs, T-bills, FRB’s, IIBs etc), Mutual funds and Others.

ii. The securities held as stock-in-trade are valued at lower of cost arrived at on weighted average basis or market/ fair value, computed category-wise.

iii. The cost is calculated on weighted average basis. Market value of fixed income securities is determined in accordance with the guidelines laid down by Fixed Income Money Market and Derivatives Association of India (FIMMDA). Market value for equity shares and tax free bonds is determined by the prices obtained from the recognised stock exchanges. However, in line with the RBI & FIMMDA guidelines, Certificate of Deposit (CDs) and Commercial Papers (CPs) of less than one year tenor are valued at carrying cost.

iv. Mutual Funds units are valued at Net Asset Value (NAV) or cost whichever is lower as declared by the MF/AMC.

v. The outstanding swaps held for trading purpose are marked to market on the Balance Sheet date on the basis of swap yield rates announced by FIMMDA.

vi. Net depreciation in each category is provided for/charged to Profit & Loss account. Net appreciation, in the category, if any, is ignored.

vii. Depreciation in one category is not off set against appreciation in other catergory.



218 219

21.5 Non Current Investments

The securities under HTM category shall be valued as per the guidelines issued by RBI from time to time and important provisions are as under:

i. Government Securities held in HTM Portfolio are valued at amortised cost. The premium, if any, on the security is amortised over the period till maturity.

ii. In respect of Government Securities held in HTM Portfolio, market value at year end is determined and disclosed.

iii. The stock is transferred from HTM Portfolio to trading portfolio at acquisition cost, book value or market value, whichever is lower and the depreciation, if any, on such transfer is fully provided for.

iv. The profit on sale of securities, if any from HTM Portfolio is first be taken to the Profit & loss Account and thereafter be appropriated to the Capital Reserve Account (net of tax) loss on sale is recognized in the Profit & loss Account. The balance in the reserve account is utilized as per the regulatory guidelines.

v. No accounting adjustment are made for diminution/appreciation in value of such investments.

21.6. Propertv, Plant and Equipment & Intangible Assets

Property, Plant and Equipment and Intangible assets are initially recognised at cost and are stated at original cost less accumulated depreciation and impairment, if any. Costs include all direct costs attributable to acquisition, installation and commissioning.

Intangible assets are stated at cost of acquisition alongwith the other directly related costs incurred in acquiring the intangible assets less accumulated depreciation and impairment, if any.

Intangible assets are amortized over useful life of the asset.

Depreciation on Property, Plant and Equipment and Intangible Assets is provided on the straight line method based on the Useful life as per the provisions under Schedule II to the Companies Act, 2013 w.e.f. 01.04.2014.

The Company has applied the following Useful Life of the assets as per Schedule II of the Companies Act, 2013:

Fixed Assets Useful Life as per Schedule IIBuilding 60 yearsFurniture & Fixtures 10 yearsMotor Vehicles – Motor Cars 8 yearsOffice Equipments 5 yearsComputers and data processing units: Servers and Networks 6 years End User Devices 3 yearsElectrical Installation and Equipments 10 yearsComputer- Software 3 years


An asset is treated as impaired when the carrying cost of asset exceeds it recoverable value. An impairment loss, if any, is charged to the Profit and Loss Account to the extent carrying amount of assets exceeds their recoverable amount in the year in which the asset identified is impaired.

21.8 Foreign Exchange Transactions

Expenses and remittances in foreign currency are accounted at the exchange rates as on the transaction date.


Provisions for Income Tax comprises of the current tax provisions, and the net change in the deferred tax asset or liability for the year. Current tax is determined as the amount of tax payable in respect of the taxable income computed according to the



220 221

applicable tax laws for the year. Deferred tax asset or liability reflect the impact of current year timing differences between taxable income and the accounting income for the year and the reversal of timing differences of earlier years. Deferred tax assets are recognised only to the extent there is a reasonable certainty of sufficient future taxable income being available for its realisation. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date. The effect on deferred tax assets and liabilities of a change in tax rates is recognised in the Profrt and loss Account in the period of enactment of the change.


i. Provident Fund

Retirement benefit in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. There is no obligation other than the monthly contribution payable to the Regional Provident Fund Commissioner.

ii. Gratuity

The gratuity liability of the company is funded through a Group Gratuity Scheme with Life Insurance Corporation of India (LIC) under which the annual contribution is paid to LIC. Gratuity liability is defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each reporting period.

iii. Other Benefits

Other employee benefits comprise of compensated absences and are provided for based on actuarial valuation and is not funded. Short term compensated absences are provided for on undiscounted basis.

The “Projected Unit Credit Method” has been used to determine the liability of compensated absences. The actuarial gain or loss is recognised in the Profit and loss Account.

21.11 Borrowing Costs:

Borrowing cost other than directly attributed to Property, Plant and equipment are directly recognised as expenses in the period in which they are incurred and are charged to statement of profit and loss account.


The monthly rent payments made for the premises acquired on lease are charged to statement of profit and loss on accrual basis.

21.13 Earnings Per Share

Basic and Diluted earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

21.14 Provisions and Contingent Liabilities

A provision is recognised when the Company has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The company does not recognize a contingent liability but discloses its existence in the financial statements.



220 221

22. NOTES FORMING PART OF FINANCIAL STATEMENTS

22.1 Contingent Liability

Claims against the Company not acknowledged as debt

Under the Income Tax Act, the following amounts are ·under dispute, the details of which are as under

(` in lakhs)

Assessment Year March 31, 2018 March 31, 2017 Forum where dispute is pending

2010-2011 under section 143(3) r.w.s 147 of the Income Tax Act, 1961*

Nil 151 CIT (Appeals)

TOTAL Nil 151

*Paid under protest refer Note No. 6 & 9

22.2 Capital Commitment and Contractual Obligation

a. Estimated amount of contracts remaining to be executed on capital account - Nil (PY Nil)

b. Commitment and contractual obligations in respect of:

i. The purchases and sales of the securities effected on March 31, 2018, the transaction shall be accounted on April 03, 2018 i.e Settlement date. The face value of the securities purchased and sold on March 31, 2018 are as given in the table below;

(` in lakhs)

S No. Particulars March 31, 2018 March 31, 2017

1. Purchase of securities 80,000 65,500

2. Sale of securities 93,885 1,43,507.40

22.3 Segment Reporting

a. Business Segment :

The Company has identified two business segments viz. Gilts segment and Non-Gilts segment based on risk, return and the regulatory authorities for reporting as the primary segment.

b. Segment Revenues and Expenses:

The Segmental revenues and expenses includes all items directly attributable to the respective segment. Administrative expenses, personnel costs and depreciation on Property, Plant and Equipment and intangible assets cannot be identified with any particular segment and are considered as unallocable.

c. Segment Assets and Liabilities:

The Segmental assets and liabilities includes all items directly attributable to the respective segment. All other assets and liabilities not attributable to any particular segment have been grouped under Unallocated Assets and liabilities.

d. Geographical Segment:

Since the segregation of the business geographically is not possible, in view of the Management, the Company does not have geographical segmentation in the context of the Accounting Standard 17 on Segment Reporting issued by the Institute of Chartered Accountants of India.

Accounting Standard 17 on Segment Reporting issued by the Institute of Chartered Accountants of India.



222 223

The detailed segmental information for the segments is as under :-

(` In lakhs)

Segmental Reporting Gilts Segment Non-Gilts Segment Unallocated Total

REVENUES :-

From External Clients 27,924.65

(44,54363)17,258.17

(15,660.75)81.28

(61.15)45,264.10

(60,265.53)

Internal segment - - - -

Total Revenue27,924.65

(44,543.63)17,258.17

(15,660.75)81.28

(61.15)45,264.10

(60,265.53)

Total Expenditure24,127.35

(19,819.68)13,407.65

(10,943.10)1,728.44

(2,134.24)39263.44

(32,897.02)

Segment Result-Profit/ (-)Loss3,797.30

(24,723.95)3850.52

(4,717.65)-1,647.16

(-2,073.09)6,000.66

(27,368.51)

Less: Tax expenseNil

(Nil)Nil

(Nil)2,085.45

(9,556.51)2,085.45

(9,556.51)

Less : Prior Period expenseNil

(Nil)Nil

(Nil)Nil

(Nil)Nil

(Nil)

Total Result3,915.21

(17,812.00)OTHER INFORMATION

Segment Assets 5,14,769.76

(3,59,969.29)2,73,067.38

(1,81,477.06)2,074.03

(6,876.19)7,89,911.17

(5,48,322.54)

Segment Liabilities5,01,014.45

(3,36,179.18)2,38,659.30

(1,65,430.57)768.02

(1158.60)7,40441.77

(5,02,768.35)

Note : Figures in brackets denote figures for previous financial year

22.4 Related Party disclosures

a. List of related parties:

i. Enterprises that directly or indirectly through one or more intermediaries control or controlled by or are under comman control with the reporting enterprise:

Holding Company : STCI Finance Limited

(erstwhile Securities Trading Corporation of India Limited)

Fellow Subsidiary : STCI Commodities Limited

ii. Key management personnel and relatives of such personnel

1. Shri Prasanna Patankar, Managing Director

2. Shri M. N. Suresh, Chief Financial Officer

3. Shri Kalpesh Mody, Company Secretary

There was no transaction with any of the relatives of Key Management Personnel during the year.



222 223

b. Details of Related party transactions during the year:

(` In lakhs)

Nature of Transaction Related Party 2017-18 2016-17Purchase of Government Securities Holding Company 4993.83 NilSale of Government Securities Holding Company Nil NilCSGL charges and CCIL charges (Received) Holding Company 1.88 NilCapital Expenditure Holding Company Nil NilCapital Receipt Holding Company Nil NilReimbursement of Expenses (Payment) Holding Company 11.08 7.18Reimbursement of Expenses (Received) Holding Company 3.78 8.04Reimbursement of Deposits (Received) Holding Company Nil 0.05Sitting fees Paid Holding Company 2.10 0.20

Total Remuneration (including Salaries, allowances, perquisites, Company’s contribution to PF) are as given in the table given below:-

(` In lakhs)

S No. Key Managerial Personnel Designation March 31, 2018 March 31, 2017

1 Mr. Pradeep Madhav(Ceased to be a Managing Director (upto 23.01.2017)

Nil 93.16+

2 Mr. Prasanna Patankar Managing Director 141.44+ 83.73+

3 Mr. M. N. Suresh Chief Financial Officer 68.32+ 47.52+

4 Mr. Kalpesh Mody Company Secretary 23.29+ 16.87

+ Includes Performance Linked Variable Pay (PLVP) paid during the year. * Subject to applicable tax deducations @ Excludes amount of tax paid by employer on behalf of employee.

Performance linked Variable Pay {PLVP), if any, to be paid for the. financial year shall be paid based on the Individual performance and Company’s performance and as approved by the Board as per the Board approved PLVP policy.

All the transactions detailed above are entered at arms length and in the ordinary course of business.

22.5 Assets taken on Lease

Office premises at Delhi and Kolkatta have been acquired under operating lease on payment of monthly rentals. Future minimum lease rentals relating to non-cancellable operating lease period are as under. Bangalore branch office has been closed and the lease deed of the Bangalore premises has been surrendered w.e.f March 31, 2016

(` In lakhs)



Delhi OfficeNot later than 1 year 23.39 22.22Later than 1 year not later than 5 years 25.34 50.10Later than 5 years Nil NilKolkatta OfficeNot later than 1 year 8.40 4.55Later than 1 year not later than 5 years 40.30 NilLater than 5 years Nil Nil



224 225



Delhi Office

Payment made during the year 23.07 19.49

Kolkatta Office

Payment made during the year 8.05 7.80

Bangalore Office

Payment made during the year Nil Nil

22.6 Earning Per Share:

Particulars March 31, 2018 March 31, 2017Opening number of shares 15,00,00,000 15,00,00,000Closing number of shares 15,00,00,000 15,00,00,000Weighted average number of shares for basic EPS 15,00,00,000 15,00,00,000Profit / (Loss) after taxes 39,15,23,057 178,12,00,262Basic EPS (in `) 2.61 11.87Diluted EPS (in `) 2.61 11.87

22.7 The Company has accounted for the deferred tax asset and liability in respect of the timing differences through the Profit and Loss Account. The components of the Deferred Tax Asset/(Liability) are as under:

(` In lakhs)

S No. Particulars March 31, 2018 March 31, 2017Deferred Tax Asset :

1 Provision for Stamp Duty 117.96 111.782 Provision for Performance Linked Incentive Scheme 37.22 81.323 Provision for Retirement Leave encashment 34.04 33.804 Provision for Depreciation on Fixed interest bonds 188.57 Nil

Total Deferred Tax Asset 377.79 226.91

Deferred Tax Liability:5 Depreciation on Property plant and equipment and

Intangible assets(229.57) (205.70)

Total Deferred Tax Liability (229.57) (205.70)

Net Deferred Tax Asset/(Liability) (148.22) (21.21)

22.8 In line with the Accounting Policy followed by the Company, the fall-in-value of securities held by the Company as stock-in-trade (as detailed below) has been fully provided for.

(` in lakhs)

S No. Type of Security March 31, 2018 March 31, 2017

1 Government dated securities (including T-bills) Nil Nil

2 Corporate Bonds including PSU/PFI 571.04 241.34

TOTAL 571.04 241.34



224 225

22.9 Defined Contribution Plan (` in lakhs)


Employer’s Contribution to Provident Fund* 26.45 25.82

(above figure does not include administrative charges of ` 1.70 lakhs (PY - ` 2.21 Lakhs)

22.10 Defined Benefit Plan

a. Gratuity : Disclosure in terms of Revised AS-15 (` in Lakhs)


I. Assumption as at

Mortality IALM (2006-08) Ult IALM (2006-08) Ult

Interest / Discount rate 7.54% 6.66%

Rate of increase in compensation 5.00% 5.00%

Rate of return (expected) on plan assets 7.53% 6.66%

Employee Attrition Rate 20% 20%

Expected average remaining service 7.23 7.08

II. Changes in present value of obligations

PVO at beginning of period 45.19 46.32

Interest cost 2.67 2.97


Past service cost-(vested benefits) 6.62 Nil

Benefits Paid (10.15) (13.16)

Actuarial (gain)/loss on obligation (061) (4.50)

PVO at end of period 49.89 45.19

III. Changes in fair value of plan assets

Fair Value of Plan Assets at beginning of period 45.92 50.71

Adjustment to opening balance (2.58) (3.84)

Expected Return of Plan Assets 3.29 2.89

Contributions 10.77 6.15

Benefit Paid (10.15) (13.16)

Actuarial gain/(loss) on Plan Assets 2.14 3.17

Fair Value of Plan Assets at end of period 49.39 45.92

IV. Actuarial Gain/(Loss) recognized

Actuarial gain/(loss) for the period (obligation) 0.61 (4.50)

Actuarial gain/(loss) for the period on Plan Assets 2.14 3.17

Total Gain/(Loss) for the period 2.75 (1.33)

Actuarial Gain/(Loss) recognized for the period 2.75 (1.33)

Unrecognized Actuarial Gain/(Loss) at end of period Nil Nil



226 227


V. Amounts to be recognized in the balance sheet and statement of profit & loss account

PVO at end of period 49.89 45.19

Fair Value of Plan Assets at end of period 49.39 45.92

Funded Status (0.50) 0.73

Unrecognised Actuarial Gain/(Loss) Nil Nil

Net Asset/(Liability) recognized in the balance sheet (0.50) 0.73

VI. Expenses recognized in the statement of P & L A/c


Interest Cost 2.67 2.97

Past Service Cost –(non vested benefits) Nil Nil

Past Service Cost –(vested benefits) 6.62 Nil

Expected Return on Plan Assets (3.29) (2.89)

Net Actuarial (Gain)/Loss recognized for the period (2.75) 1.33

Expenses recognized in the statement of P & L A/c 9.42 5.97

Experience Adjustment (` in Lakhs)

Particulars March 31, 2018

March 31, 2017

March 31, 2016

March 31, 2015

March 31, 2014

Defined Benefit Obligation 49.89 45.19 46.32 61.30 48.59Plan Assets 49.39 45.92 50.71 41.21 33.11Surplus / (Deficit) (0.50) 0.73 4.38 (20.09) (15.49)Experience adjustment on plan liabilities

0.61 4.50 (24.86) (5.80) (15.40)

Experience adjustment on plan assets

2.14 (3.17) (0.38) (0.14) (0.29)

Note:- i) The gratuity contribution is paid to Life Insurance Corporation of India (LIC) under under Group gratuity Scheme of LIC.

ii) The estimates of the future salary increases, considered in acturial valuation, include inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

b. Leave Encashment: The Company has reversed the provision of ` 1.50 lakh (P.Y. ` 12.15 lakh) during the period ended March 31, 2018 for leave encashment on acturial valuation basis.

22.11 Expenditure in Foreign Currency :

(` In lakhs)

S No. Particulars March 31, 2018 March 31, 2017

1 On Travel Nil 5.09

2 On Interest Nil Nil

3 On Others Nil Nil

Earnings in Foreign Currency : NIL. (March 31, 2017 – NIL)



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22.12 The Company is a member of Primary Dealers Association of India and Fixed Income Money Market and Derivatives Association of India; which are Companies limited by guarantee and incorporated under the Companies Act, 1956. The amount guaranteed by the Company on this amounts to Rs. One Hundred only, for each Association.

(Amount in `)22.13 Corporate Social Responsibility (CSR) Disclosure

During the year, Company has spent ` 279.09 lakhs (PY ` 156.47 lakhs) towards CSR activities, as required to be spent in terms of Section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility policy) Rules, 2014. Details of CSR expense for the year are as under:-

(` In lakhs)

Sr. No. Particulars Amount Spent Pending to be Spent Total

1. Construction/acquisition of any asset Nil Nil Nil

2. On purposes other than (i) above-

a) Contribution to Prime Minister National Relief Fund

229.29 Nil 229.29

(156.47) (Nil) (156.47)

b) Cancer Patient Aid Association (CPAA) 7.5 Nil 7.5

(Nil) (Nil) (Nil)

c) lmPaCCT Foundation (Paediatric Foundation of Tata Memorial hospital)

10 Nil 10

(Nil) (Nil) (Nil)

d) HDFC Charity Fund for Cancer Cure (Dividend amount)

32.3 Nil 32.3

(Nil) (Nil) (Nil)

The Company has made investment in HDFC Cancer Cure Fund. As per the scheme, any dividend declared in the said scheme will be contributed directly to

Indian Cancer Society and eligible towards Company’s contribution for CSR commitment. The said scheme is a close ended scheme.

Note: Figures in brackets denote figures for March 31, 2017

22.14 The Company has been dealing in Government Securities on behalf of its Constituents through · the Constituent SGL account opened with RBI. The transactions undertaken represents amounts received from the constituents and also physicals tendered by them for conversion into SGL Account. As on March 31, 2018 the face value of the securities held by the Company on behalf of its constituents is ` 18,84,840 lakhs (March 31, 2017 - ` 17,26,751.10 lakhs).

22.15 In terms of the provisons of Reserve Bank of India guidelines, details of Repo and Reverse Repo transactions during the year are given here under:

Paticulars Minimum outstanding during the year

Maximum outstanding during the year

Daily Average outstanding

during the year

March 31, 2018

Securities sold under repos

Government Securities(55,000.00) (21,000.00)

2,99,896.00 (2,23,430.00)

1,37,169.31 (1,22,770.52)

1,09,187.00 (1,44,597.00)

Corporate debt securitiesNil

(Nil)Nil

(Nil)Nil

(Nil)Nil

(Nil)

Securities purchased under reverse repos

Government Securities500.00

(500.00)55,000.00

(77,500.00)4,797.53

(8,576.00)Nil

(Nil)

Corporate debt securitiesNil

(Nil)Nil

(Nil)Nil

(Nil)Nil

(Nil)

Note: Figures in brackets denote figures for March 31, 2017



228 229

22.16 Other Disclosures - Schedule to the Balance Sheet as at March 31, 2018

(as required in terms of paragraph 13 of Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007)

(` In lakhs)

Sr. No.

Particulars Amount Outstanding Amount Outstanding





Liabilities side:

1 Loans and advances availed by the NBFC inclusive of interest accrued thereon but not paid:

a) Debentures

Secured Unsecured

NilNil

NilNil

NilNil

NilNil

(other than falling within the meaning of Public deposit)

b) Deferred Credits Nil Nil Nil Nil

c) Term Loans (includes term money) 2,05,870 1,47,250 Nil Nil

d) Inter-Corporate Loans and Borrowings 17,064.33 5,026.44 Nil Nil

e) Commercial Paper Nil Nil Nil Nil

f) Other Loans -

(i) Call/Notice 45,487 70,597 Nil Nil

(ii) CBLO 1,83,390.59 1,03,271.68 Nil Nil

(iii) RBI LAF 1,19,500 16,000 Nil Nil

(iv) RBI Refinance 41,100 Nil Nil Nil

(v) Loan Against Fixed Deposit Nil Nil Nil Nil

(vi) REPO Borrowing 1,11,248.66 1,46,267.94 Nil Nil

Assets side : Amount Outstanding Amount Outstanding

2017-18 (` in lakhs) 2016-17 (` in lakhs}

2 Break-up of Loans and Advances including bills receivables (other than those included in (4) below):a) Securedb) Unsecured

754.742,819.18

Nil2,597.06

3 Break up Leased Assets and stock on hire and other assets counting towards AFC activities

(i) Lease assets including lease rentals under sundry debtors

(a) Finance lease Nil Nil

(b) Operating lease Nil Nil

(ii) Stock on hire including hire charges under sundry debtor

(a) Assets on hire Nil Nil

(b) Repossessed Assets Nil Nil



228 229

(` In lakhs)

Sr. No.

Particulars Amount Outstanding Amount Outstanding





(iii) Other loans counting towards AFC activities

(a) loans where assets have been repossessed

Nil Nil

(b) loans other than (a) above Nil Nil

4 Break-up of Investments

Current Investments

1. Quoted

(i) shares (a) Equity Nil 56.08

(b) Preference Nil Nil

(ii) Debentures and Bonds 2,03,349.99 1,35,637.40

(iii) Units of mutual funds Nil Nil

(iv) Government Securities & T-bills 4,63,795.94 3,19,297.59

(v) Others Nil

2. Unquoted

(i) Shares (a) Equity Nil Nil


(ii) Debentures and Bonds Nil Nil


(iv) Government Securities Nil Nil

(v) Others (a) Commercial papers 48,225.26 28,380.69

(b) Certificate of Deposits Nil Nil

Long Term Investments

1. Quoted

(i) shares (a) Equity Nil Nil



(iii) Units of mutual funds 500.00 500.00

(iv) Government Securities & T-bills 44,830.18 35,806.49

(v) Others Nil Nil

2. Unquoted

(i) Shares (a) Equity Nil Nil




(iv) Government Securities Nil Nil

(v) Others (Please Specify) Nil Nil



230 231

5 Borrower group-wise classification of assets financed as in (2) and (3) above:

Category Amount Net of Provisions

Secured Unsecured Total

1. Related Parties Nil Nil Nil

(a) Subsidiaries Nil Nil Nil

(b) Companies in the same group Nil Nil Nil

(c) Other related parties Nil Nil Nil

2. Other than related parties Nil Nil Nil

Total

6 Investor group-wise classification of all investments (current and long term) in shares and securities (quoted and unquoted)

Category Market Value Book Value

2017-18 2016-17 2017-18 2016-17

1. Related Parties

(a) Subsidiaries Nil Nil Nil Nil

(b) Companies in the same group Nil Nil Nil Nil

(c) Other related parties Nil Nil Nil Nil

2. Other than related parties 7,58,280.77 5,20,435.44 7,60,701.37 5,19,678.25

Total 7,58,280.77 5,20,435.44 7,60,701.37 5,19,678.25

Sr. No.

Particulars 2017-18 (` in lakhs)

2016-17 (` in lakhs)

7 Other Information

Particulars

(i) Gross Non Performing Assets

(a) Related parties Nil Nil

(b) Other than related parties Nil Nil

(ii) Net Non-Performing Assets

(a) Related parties Nil Nil

(b) Other than related parties Nil Nil

(iii) Assets acquired in satisfaction of Debts Nil Nil



230 231

22.17 Issuer composition of investments in non-Government securities as at March 31, 2018 (Ref: RBI circular no. IDMD.PDRS.No.03/03.64.00/2003-04)

(` In lakhs)

No. Issuer Amount Extent of private

placement**

Extent of ‘below investment grade’

securities

Extent of ‘unrated’ securities

Extent of ‘unlisted’

securities***(1) (2) (3) (4) (5) (6) (7)1. PSUs 14,423.43

(16,076.04)Nil

(3,000.00)Nil Nil Nil

2. FIs 24,977.26 (Nil)

Nil (Nil)

Nil Nil Nil

3. Banks Nil (17,510.80)

Nil (Nil)

Nil Nil Nil

4. Other PDs Nil (Nil)

Nil (Nil)

Nil Nil Nil

5. Private Corporate 2,12,674.56 (1,30,987 .34)

55,711.46 (38,380.69)

Nil Nil Nil

6. Subsidiaries/ Joint Ventures

Nil (Nil)

Nil (Nil)

Nil Nil Nil

7. Others Nil (Nil)

Nil (Nil)

Nil Nil Nil

8. Provision held towards depreciation

Nil (Nil)

Nil (Nil)

Nil Nil Nil

Total 2,52,075.25 (1,64,574.18)

55,711.46 (41,380.69)

Nil Nil Nil

Note: Figures in brackets denote previous year.

All the investments in the above non government securities are rated and are above investment grade securities. * Represents amounts net of provision for depreciation if any and also includes CPs of ` 48,225.26 (PY ` 28,380.69) and CDs

of ` Nil (PY Nil). ** Represents original issue. #includes equity shares and mutual funds

22.18 Disclosure pursuant to RBI circular No. RBI/2008-09/116 DNBS (PD). CC No.125/03.05.002/2008-2009 dated August 1, 2008, RBI/2015-16/12 DNBR (PD) CC.N0.053/03/10.119/2015-16 dated July 1, 2015 and RBI/DNBR/2016-17/42, Master Direction DNBR.PD.004/03.10.119/2016-17 dated August 30, 2016 as updated on November 09, 2017

a. Capital to Risk Assets Ratio (CRAR)*

S No. Items March 31, 2018 March 31, 2017

i. CRAR (%) 34.85 39.17

ii. CRAR - Tier I capital (%) 34.85 39.17

iii. CRAR - Tier II Capital (%) Nil Nil

iv. Amount of subordinated debt raised as Tier-II capital Nil Nil

v. Amount raised by issue of Perpetual Debt Instruments Nil Nil

* Calculated as per RBI circular no. RBI/2006-2007/355 DNBS.PD/CC No.93/03.05.002/2006-07



232

b. Exposures to Real Estate Sector (` In Lakhs)

Category March 31, 2018 March 31, 2017a. Direct exposure

i. Residential Mortgages - NIL NILLending fully secured by mortgages on residential property that is or will be occupied by the borrower or that is rented;

ii. Commercial Real Estate - NIL NILLending secured by mortgages on commercial real estates (office buildings, retail space, multipurpose commercial premises, multi-family residential buildings, multi-tenanted commercial premises, industrial or warehouse space, hotels, land acquisition, development and construction, etc.). Exposure would also include non-fund based (NFB) limits;

iii. Investments in Mortgage Backed Securities (MBS) and other securitized exposures -

a. Residential, NIL NIL

b. Commercial Real Estate. NIL NILb. Indirect Exposure

Fund based and non-fund based exposures on Housing Finance Companies (HFCs).

91,472.35 46,137.10

Non-fund based - Notional Principal of IRS Nil Nil

c. Exposure to capital Market



Direct investment in equity shares, convertible bonds, convertible debentures and units of equity-oriented mutual funds the corpus of which is not exclusively invested in corporate debt;

500.00 556.08

Advances against shares/bonds/debentures or other securities or on clean basis to individuals for investment in shares (including IPOs/ESOPs), convertible bonds, convertible debentures, and units of equity-oriented mutual funds;

Nil Nil

Advances for any other purposes where shares or convertible bonds or convertible debentures or units of equity oriented mutual funds are taken as primary security;

Nil Nil

Advances for any other purposes to the extent secured by the collateral security of shares or convertible bonds or convertible debentures or units of equity oriented mutual funds i.e. where the primary security other than shares/ convertible bonds/convertible debentures/units of equity oriented mutual funds ‘does not fully cover the advances; .

Nil Nil



232 233



Secured and unsecured advances to stockbrokers and guarantees issued on behalf of stockbrokers and market makers;

Nil Nil

Loans sanctioned to corporates against the security of shares/bonds/debentures or other securities or on clean basis for meeting promoter’s contribution to the equity of new companies in anticipation of raising resources;

Nil Nil

Bridge loans to companies ·against expected equity flows/ issues; Nil Nil

All exposures to Venture Capital Funds (both registered and unregistered)

Nil Nil

Total Exposure to capital Market 500.00 556.07

d. Asset Liability Management Maturity Pattern of certain items of Assets and Liabilities as at March 31, 2018****(` In Lakhs)

1 day to 30/31 days (one month

Over 1 month

to 2 months

Over 2 months upto 3

months

Over 3 months to 6 months

Over 6 months to

1 year

Over 1 year to 3 years

Over 3 years to 5

years

Over 5 years

Total

Assets

Deposits - - - - - 0.42 (0.1)

15.60 (15.60)

13.95 (11.95)

29.97 (27.65)

Advances* 754.74 (Nil)

- - - 2,791.21 (2,571.41)

- - - 3,543.95 (2,569.41)

Investments** 7,15,371.20 (4,83,371.76)

- - - - 500.00 (500.00)

- 44,830.18 (35,806.49)

7,60,715.60 (5,19,678.25)

Liabilities

Borrowings from banks ***

- - 2,51,357 (2,17,847)

- - - - - 2,51,357 (2,17,847

Market Borrowings

4,55,239.25 (2,65,539.62)

- 17,064.33 (5,026.44)

- - - - - 4,72,303.58 (2,70,566.06)

Note: Figures in brackets denote previous years figures

* Advances represent advances in the given in the normal course of business and is not in nature of loans given.

** Investments in the nature of ‘Securities held as Stock in Trade’ are classified in the “one month bucket” and those in the nature of ‘Non Current Investments’ are classified as per their residual maturity.

*** Borrowings in Call/Notice/Term have been treated as borrowings from banks.

**** The Company does not have any foreign currency assets and liabilities.



234 235

e. Investments (HTM Portfolio)

(` in Lakhs)Sr. No



1 Value of Investments:(i) Gross Value of Investments

(a) In India 44830.18 35,806.49(b) Outside lndia Nil Nil

(ii) Provisions for Depreciation(a) In India Nil Nil(b) Outside lndia Nil Nil

(iii) Net Value of Investments(a) In India 44830.18 35,806.49(b) Outside lndia Nil Nil

2 Movement of Provisions held towards depreciation on Investments :(i) Opening Balance Nil Nil(ii) Add: Provisions made during the year Nil Nil(iii) less: Write-off I write-back of excess provisions

during the yearNil Nil

(iv) Closing balance Nil Nil

f. The Company has not exceeded Single Borrower Limit (SGL)/Group Borrower Limit (GBL) as prescribed by the regulator.

g. Registration/license/authorisation obtained form financial sector regulators

• RBI- Certificate of Registration bearing No. 13.01865, dated May 23, 2007.

• MCA- Certificate of Incorporation dated October 31, 2006 bearing Corporate Identity No. U67110MH2006PLC165306.

• Primary Dealership Business authorisation granted by RBI has been renewed for the year 2016-19 and is valid uptoJune 30, 2019.

h. Disclosure of Penalties imposed by RBI and other regulator: Nil (PY -Nil)

i. Ratings assigned by credit rating agencies and migration of ratings during the year;

Rating Agencies

Rating Programme

Rating Assigned

Migration Rating Amount (` in Lakhs)31.03.2018 31.03.2017

CRISIL Short Term CRISIL Al+ 20,000 20,000ICRA Short Term [ICRA] A1+ 40,000 40,000

j. Information on all provisions and contingencies booked as expenditure in Profit and Loss Account:

(` in lakhs)Particulars 2017-18 2016-17Provision for depreciation on Investment Nil NilProvision towards NPA Nil NilProvision for Standard Assets Nil NilProvision made towards Income Tax (incl. deferred tax) 2,085.45 9,556.51Other Provision and Contingencies (stamp duty and employee related)

681.44 1062.23



234 235

22.19 Derivatives

a. Interest Rate Swaps

(` in lakhs)Sr.

No.Particulars March 31, 2018 March 31, 2017

National Principal amount of IRS Contractsa. Hedging Contracts Nil Nilb. Trading Contracts 7,98,500.00 4,54,250.21

i. Fair value oftrading IRS (19.45) (68.44)ii. Losses which would be incurred if counterparties failed to

fulfil their obligations under the agreements196.57 215.00

iii. Likely impact of one percentage change in interest rate (100*PV01)

471.54 69.89

iv Collateral value made available towards Derivatives margin.

Nil Nil

v. Credit Risk Concentration@ 46.29 54.41

@ Credit risk concentration is measured as the highest net receivable under swap contracts from a particular group of counter parties.

b. Interest Rate Future Contracts

(` in lakhs)Sr.

No.Particulars March 31, 2018 March 31, 2017

National Principal amount of IRS Contractsi. Notional principal amount of exchange traded IR

derivatives undertaken during the yearIRF on Government Securities 3,07,108 6,24,048

ii. Notional principal amount of exchange traded IR derivatives outstanding (Interest Rate Futures)

Nil Nil

iii. Notional principal amount of exchange traded IR derivatives outstanding and not “highly effective”

Nil Nil

iv Mark-to-Market value of exchange traded IR derivatives outstanding and not “highly effective”

Nil Nil

c. Disclosures on Risk Exposure in Derivatives

Qualitative Disclosure

During the year, Company has entered into derivative transactions in equity, currency and interest rate derivatives. The derivatives transactions entered into during the year are for the purpose of trading and market-making. The Business Investment and Risk policy of the Company lays down the risk management framework for derivatives trading. The Policy prescribes risk identification, measurement monitoring and risk mitigation. The compliance with the prudential limits for derivative transactions as laid down in the Risk Policy is done by the Risk Management Department which reports to the Managing Director. The Risk Management Committee of the Board oversees the risk management function of the Company. For accounting policy refer note no 21.3(v),(vi), (vii), (xiv) of notes forming part of the financial statements.



236 237

Quantitative Disclosure

The company has entered into currency and interest rate futures transactions during the year. There are no outstanding positions in respect of any Currency Derivatives and Interest Rate Futures as on March 31, 2018.

(` in lakhs)Sr.

No.Particular Currency

DerivativesInterest Rate Derivatives

(i) Derivatives (Notional Principal Amount)For hedging Nil Nil

(ii) Marked to Market Positionsa) Asset(+) Nil Nilb) liability(-) Nil Nil

(iii) Credit Exposure Nil Nil(iv) Un-hedged Exposure Nil Nil

d. Disclosure relating to Securitisation :

i) During the year Company has not securitized any of its assets and does not have any outstanding position in respect thereof as on March 31, 2018.

ii) Company has not sold any of its financial assets to Securitisation/Reconstruction Company for Asset Reconstruction.

iii) Company has not undertaken any Assignment transactions during the year.

iv) Company has neither purchased nor sold any non-performing financial assets during the year and does not have any outstanding position in respect thereof as on March 31, 2018.

22.20 No stamp duty has been paid on non-government securities transactions in view of the ongoing deliberations between Government of Maharashtra and various representative bodies of the participants viz. IBA, FIMMDA, PDAI and AMFI, on the applicability of stamp duty on non-government securities’ transactions. The Company has so far not received any claim for stamp duty from the Stamp Office in respect of non-government securities transactions.

For the current year, provision of ` 14.59 lakhs (March 31, 2017 - ` 24.04 lakhs) calculated on the basis of 0.01% of the value of transaction as stipulated in the Maharastra Stamp Act, (erstwhile The Bombay Stamp Act, 1958), as ammended, has been made for stamp duty for direct deals of non government securities. The provision as on March 31, 2018 for stamp duty on non-government securities transactions stands at ` 337.58 lakhs (March 31, 2017 - ` 322.99 lakhs). The amount of provision is included under Note no. 3 “Long term provisions” in the balance sheet and under the head Operating expenses in Note no. 17 in the statement of profit and loss.

22.21 There are no dues payable to micro, small and medium enterprises in view of the nature of the business of the Company. The Company has not received any intimation from its suppliers regarding status under the Micro, Small and Medium Enterprises Development Act, 2006.

22.22 The following information is submitted as required by the Reserve Bank of India’s guidelines to Primary Dealers regarding publication of their audited annual results:

Net borrowings in call : Average net call borrowing during the period ended March 31, 2018 was ` 580.53 crores and peak net call borrowing during the period ended March 31, 2018 was ` 1235.98 crores.

Leverage ratio: Average during the year was 13.46 and peak during the year was 16.02

Quarterly CRAR (Capital To Risk Weighted Asset Ratio) : Quarter ended June 30, 2017 - 24.74 %, quarter ended September 30, 2017 - 25.66%, quarter ended December 31, 2017 - 30.92% and quarter ended March 31, 2018 - 34.85%.

22.23 No significant events have occurred after the balance sheet date which may have material effect on the Company’s financial statements.



236 237

22.24 The Company has declared and paid an interim dividend for the financial year 2017-18 at the rate of 10% (i.e. Re. 1 (Rupee One) per share of the face value of ` 10 (Rupees Ten) each, amounting to ` 15,00,00,000 (Rupees Fifteen Crore Only) (excluding dividend distribution tax). The said interim dividend was declared and approved by the Board of Directors vide resolution passed by way of circulation dated April 11, 2018.

22.25 Previous year figures have been reclassified/regrouped wherever necessary to bring them in line with the Company’s current year financials.


STCI COMMODITIES LIMITED

Annual Report

For The Year Ended

31st March, 2018



241

Contents

IV. STCI COMMODITIES LIMITED

01 Directors’ Report 242

02 Auditors’ Report 255

03 C&AG Report 262

04 Balance Sheet 263

05 ProfitandLossStatement 264

06 CashFlowStatement 265

07 Notes on Accounts 266


242 243

DIRECTORS’ REPORT

TO THE SHAREHOLDERS OF STCI COMMODITIES LIMITED

TheDirectorstakepleasureinpresentingtheFourteenthAnnualReportoftheCompanywiththeauditedaccountsfortheyearended March 31, 2018.

FINANCIAL RESULTS (` in Lakhs)

March 31,2018 March 31,2017

TotalIncome 19.71 10.92

Total expenses 3.46 2.07

Profit/(Loss)beforetaxes 16.25 8.86

Tax expenses - --

NetProfit/(Loss)aftertax 16.25 8.86 PERFORMANCE

SinceyourCompanydiscontinueditscommoditybrokingoperationswitheffectfromSeptember20,2011,ithasbeenliquidatingitsassets,payingoffitsclientsduesandsettlingitspendinglegalcases.TheCompanyhasalreadysurrendereditsmembershipwithNCDEXanditsmembershipwithMCXwassurrenderedduringtheyear.

YourCompanyreportedaprofitbeforetaxof` 16.25lakhfortheyearendedMarch31,2018asagainstaprofitbeforetaxof ` 8.86lakhinthepreviousyear.Theprofitaftertaxwas` 16.25lakhasagainst` 8.86lakhinthepreviousyear.

DIVIDEND

TheBoardofDirectorshasnotrecommendedanydividendforthecurrentyear,duetoinadequateprofits.

BOARD OF DIRECTORS

Mr.DSRMurthyceasedtoholdofficeasDirectoroftheCompanyw.e.fNovember10,2017pursuanttointimationreceivedfromhim in termsofsection164(2)of theCompaniesAct,2013readwithSection167of theCompaniesAct,2016. InaccordancewiththeprovisionsoftheCompaniesAct,2013andtheArticlesofAssociationoftheCompany,ShriS.K.BeherawasappointedasanAdditionalDirectorwitheffectfromNovember10,2017.ShriS.K.BeheraresignedasDirectoroftheCompanywitheffectfromApril24,2018pursuanttoBankofIndiawithdrawinghisnominationasDeputyManagingDirectorofSTCIFinanceLimited.InaccordancewiththeprovisionsoftheCompaniesAct,2013andtheArticlesofAssociationoftheCompany,ShriRaghvendraKumarwasappointedasanAdditionalDirectorwitheffectfromApril24,2018pursuanttoBankofIndianominatinghimasDeputyManagingDirectorofSTCIFinanceLimited(inplaceofMr.S.KBehera).HeholdsofficeuptothedateofensuingAnnualGeneralMeetingandiseligibleforappointmentattheensuingAGM.

IntermsoftheprovisionsoftheCompaniesAct,2013andtheArticlesofAssociation,ShriPradeepMadhavretiresbyrotationatthisAnnualGeneralMeetingand,beingeligible,offershimselfforre-appointment.

ThebriefparticularsoftheDirectortobeappointed/re-appointedattheensuingAnnualGeneralMeetingisfurnishedinAnnexuretotheNoticefortheensuingAnnualGeneralMeeting.

Number of Board Meetings: During the financial year 2018-19, four meetings of the Board of Directors were held on April20,2017,August07,2017,December01,2017andMarch26,2018.


242 243

DIRECTOR’S RESPONSIBILITY STATEMENT

PursuanttoSection134oftheCompaniesAct,2013,theDirectorconfirmsthat:

a. In the preparationofAnnual Accounts, the applicable accounting standards havebeen followed and that there are nomaterialdepartures.

b. Appropriate accountingpolicies havebeen selected and applied themconsistently andmade judgments andestimatesmadearereasonableandprudentsoastogivetrueandfairviewofthestateofaffairsofthecompanyattheendofthefinancialyearandtheprofitofthecompanyforthatperiod.

c. Proper and sufficient carehasbeen taken to thebest of their knowledge and the ability formaintenanceof adequateaccountingrecordsinaccordancewiththeprovisionsoftheCompaniesAct,2013,forsafeguardingtheassetsofthecompanyandforpreventinganddetectingfraudandotherirregularities.

d. TheAnnualAccountshavenotbeenpreparedonagoingconcernbasis.

e. Propersystemshavebeendevisedtoensurecompliancewiththeprovisionsofallapplicablelawsandsuchsystemswereadequateandoperatingeffectively.

AUDITORS

M/s.H.M.Jain&Co.,CharteredAccountants,MumbaiwereappointedastheStatutoryAuditorsoftheCompanybytheComptrollerandAuditorGeneral(CAG)ofIndiafortheFinancialYear2017-18.

TheAuditors’ReportoftheCompanyfortheyearunderreviewdoesnotcontainanyqualification,reservationoradverseremarkordisclaimer.

EXTRACT OF ANNUAL RETURN

TheextractofannualreturnintheprescribedformMGT-9asprovidedundersection92(3)oftheCompaniesAct,2013isannexedto the Report as Annexure I.

RELATED PARTY TRANSACTIONS

Alltransactionsenteredintowiththerelatedpartiesreferredtoundersection188(1)oftheCompaniesAct,2013duringtheyearareintheordinarycourseofbusinessandonarmslengthbasis.TherearenomateriallysignificantrelatedpartytransactionsmadebytheCompanywiththePromotersorDirectorsorotherrelatedpartieswhichmayhaveapotentialconflictwiththeinterestoftheCompanyatlarge.TheparticularsofcontractsorarrangementsenteredintowithrelatedpartiesreferredtounderSection188(1)inFormAOC-2isenclosedasAnnexureII.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

DetailsregardingLoans,GuaranteesorInvestmentsmadebytheCompanyhavebeengiveninthenotestotheFinancialStatements.

OTHER DISCLOSURES

NostatementcontainingparticularsofemployeesasrequiredunderRule5(2)oftheCompanies(AppointmentandRemunerationofManagerialPersonnel)Rules2014isbeingannexedtotheReportasthereisnoemployeedrawingremunerationasprescribedundertheaforesaidRule.

Thedisclosurespertaining toConservationofEnergyandTechnologyAbsorptionarenotapplicable toyourcompany,asyourcompanyisnotamanufacturingcompany.

Therewasnooutgoofforeignexchangeduringtheyear.

PUBLIC DEPOSITS

YourCompanyhasnotacceptedanydepositsfromthepublicduringthefinancialyear2017-18.


244 245

ACKNOWLEDGEMENT

The Board of Directors express their sincere appreciation toMCX,NSPOT, Company’s Bankers and our parent company, STCIFinanceLimitedfortheirsupportandguidance.TheBoardofDirectorsalsoplacesonrecordtheirappreciationofthededicatedperformancebytheemployees.



Mumbai Director DirectorDate: July 24 , 2018 DIN 00267422 DIN 07658714


244 245

ANNEXURE I

Form No. MGT-9EXTRACT OF ANNUAL RETURN

AsonthefinancialyearendedonMarch31,2018[Pursuanttosection92(3)oftheCompaniesAct,2013andrule12(1)oftheCompanies

(ManagementandAdministration)Rules,2014]


i) CIN U67120MH2004PLC148711

ii) RegistrationDate 20/09/2004

iii) NameoftheCompany STCICommoditiesLimited

iv) Category/Sub-CategoryoftheCompany PublicCompanylimitedbyshares/NBFC

v) AddressoftheRegisteredofficeandcontactdetails A/B1-802,A-Wing,8th Floor,

Marathon Innova, Marathon Nextgen Compound, Off.

GanpatraoKadamMarg,LowerParel,Mumbai-400013.

Tel:+91-22-61425115/100

Fax:+91-2224991092

E-mailid:[email protected]

vi) Whetherlistedcompany No

vii) Name,AddressandContactdetailsofRegistrarand

TransferAgent,ifany

LinkIntimeIndiaPvtLtd

C 101, 247 Park,

LBSMarg,VikhroliWest,

Mumbai400083

TelNo:+912249186000

Fax:+912249186060.

E-mailid:[email protected]


(Allthebusinessactivitiescontributing10%ormoreofthetotalturnoverofthecompanyshallbestated)

Sr. No. Name and Description of main products / services NIC Code of the Product/service


1 *Notapplicable

*TheCompanyhasdiscontinueditsCommoditybrokingoperationsw.e.fSeptember20,2011


246 247

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

Sr. No.

Name and Address of the Company CIN / GLN Holding/ Subsidiary /

Associate

% of Shares Held

Applicable Section

1. STCIFinanceLimitedA/B1-802,Awing,8thFloor,MarathonInnova,MarathonNextgenCompound,OffGanpatraoKadamMarg,LowerParel(W),Mumbai400013

U51900MH1994PLC078303 Holding 100% 2(46)

IV. SHARE HOLDING PATTERN (EQUITY SHARE CAPITAL BREAKUP AS PERCENTAGE OF TOTAL EQUITY)


Category of Shareholders

No. of Shares held at the beginning of the year


% Changeduring

the year


Shares


Shares

A. Promoter s

(1) Indian

a) Individual/HUF - - - - - - - - -

b)CentralGovt. - - - - - - - - -

c) StateGovt.(s) - - - - - - - - -

d)BodiesCorp. 4470000 - 4470000 99.34 4470,000 - 4470000 99.34 Nil

e)Banks/FI - - - - - - - - -

f) Anyother - 30,000 30,000 0.66 - 30000 30000 0.66 -

Sub-total (A) (1): 4470000 30000 4500000 100% 4470000 30000 4500000 100 Nil

(2) Foreign

a)NRI’s-Individuals - - - - - - - - -

b)Other-Individuals - - - - - - - - -

c) BodiesCorp. - - - - - - - - -

d)Banks/FI - - - - - - - - -

e)AnyOther - - - - - - - - -

Sub-total (A) (2): - - - - - - - - -

Total Shareholding Promoter (A) = (A)(1) + (A)(2)

- - - - - - - - -

B. Public Shareholding

(1) Institutions

a)MutualFunds - - - - - - - - -

b)Banks/FI - - - - - - - - -

c) CentralGovt. - - - - - - - - -


246 247

Category of Shareholders

No. of Shares held at the beginning of the year


% Changeduring

the year


Shares


Shares

d)StateGovt.(s) - - - - - - - - -

e)VentureCapitalFunds

- - - - - - - - -

f) InsuranceCompanies

- - - - - - - - -

g) FIIs - - - - - - - - -

h)ForeignVenture Capital Funds

- - - - - - - - -

i) Others(specify) - - - - - - - - -

Sub-total (B)(1): - - - - - - - - -

(2) Non-Institutions

a) BodiesCorp. - - - - - - - - -

i) Indian - - - - - - - - -

ii)Overseas - - - - - - - - -

b) Individuals - - - - - - - - -

i) Individual shareholders holdingnominalsharecapital upto ` 1 lakh

- - - - - - - - -

ii)Individual shareholders holdingnominalsharecapital in excessof ` 1 lakh

- - - - - - - - -

c) Others(specify) - - - - - - - - -

Sub-total (B)(2): - - - - - - - - -

TotalPublicShareholding - - - - - - - - -

(B)=(B)(1)+(B)(2) - - - - - - - - -


- - - - - - - - -

Grand Total (A+B+C) 4470000 30000 4500000 100% 4470000 30000 4500000 100 Nil


248 249

ii) Shareholding of Promoter

Sr. No.

Shareholder’s Name Shareholding at the beginning of the year

Share holding at the end of the year

% change in share holding

during the year

No. of Shares


company

%of Shares Pledged / encum-bered to

total shares

No. of Shares


company

%of Shares Pledged / encum-bered to

total shares

1 STCIFinanceLtd 4470000 99.34 Nil 4470000 99.34 Nil Nil

2 STCIFinanceLtdjointlywithRajivRanjan

5000 0.11 Nil 5000 0.11 Nil Nil

3 STCIFinanceLtdjointlywithDeepakPaharya

5000 0.11 Nil 5000 0.11 Nil Nil

4 STCIFinanceLtdjointlywithKamleshRathi

5000 0.11 Nil 5000 0.11 Nil Nil

5 STCIFinanceLtdjointlywithSuparnaSharma

5000 0.11 Nil 5000 0.11 Nil Nil

6 STCIFinanceLtdjointlywithSabitaBraganza

5000 0.11 Nil 5000 0.11 Nil Nil

7 STCIFinanceLtdjointlywith Aloke Prasad

5000 0.11 Nil 5000 0.11 Nil Nil

Total 4500000 100 Nil 4500000 100 Nil Nil

iii) Change in Promoters’ Shareholding (please specify, if there is no change)

Sr. No.

Particulars Shareholding at the beginningof the year


No. of shares % of total shares of the

company


company

1 Atthebeginningoftheyear 4470000 99.34 4470000 99.34

DatewiseIncrease/Decreasein PromotersShareholdingduringtheyearspecifyingthereasons

Nochangeintheshareholding











248 249

Sr. No.

Particulars Shareholding at the beginningof the year



company


company


DatewiseIncrease/DecreaseinPro-motersShareholdingduringtheyearspecifyingthereasons















iv) Shareholding Pattern of top ten Shareholders:

(other than Directors, Promoters and Holders of GDRs and ADRs):

Sr. For Each of the Top 10 Shareholders Shareholding at the beginningof the year



company


company


Datewiseincrease/decreaseinshare-holdingduringtheyearalongwith reasons

Attheendoftheyear - - - -





250 251

Sr. For Each of the Top 10 Shareholders Shareholding at the beginningof the year



company


company










v) Shareholding of Directors and Key Managerial Personnel:

Sr. No.

Form each of Directors and KMP Shareholding at the beginningof the year



company


company

1 Atthebeginningoftheyear

NoneoftheDirectorsholdanysharesintheCompany.Datewiseincrease/decreaseinshare-holdingduringtheyearalongwith reasons

Attheendoftheyear

V) INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due for payment(` in Lakhs)


Unsecured Loans


Indebtedness at the beginning of the financial yeari) PrincipalAmount - - - -ii) Interestduebutnotpaid - - - -iii) Interestaccruedbutnotdue - - - -Total (i+ii+iii) - - - -


250 251


Unsecured Loans


Change in Indebtedness during the financial year

- - - -

i) Addition(issueofNCDsduringtheyear) - - - -ii) Reduction - - - -Net Change - - - -Indebtedness at the end of the financial year - - - -i) PrincipalAmount - - - -ii) Interestduebutnotpaid - - - -iii) Interestaccruedbutnotdue - - - -

Total (i+ii+iii) - - - -

VI) REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL-

A. Remuneration to *Managing Director, Whole-time Directors and/or Manager:

(` In Lakhs)

Sr. No.

Particulars of Remuneration Name of MD/WTD/ Manager Total Amount

1 Grosssalary

(a) Salaryasperprovisionscontainedinsection17(1) oftheIncome-taxAct,1961

- -

(b) Valueofperquisitesu/s17(2)Income-taxAct,1961 - -

(c) Profitsinlieuofsalaryundersection17(3) Income-taxAct,1961

- -

2 StockOption - -

3 SweatEquity - -

4 Commission- as%ofprofit- others,specify…

- -

5 Others,pleasespecify - -

Total (A) - -

CeilingaspertheAct - -

*TheCompanydoesnothaveaManagingDirector,wholetimeDirectorormanager


252 253

B. Remuneration to other directors

(` in Lakhs)

Sr.No. Particulars of Remuneration Name of Directors Total Amount

1 Independent Directors - - - - -

(a) Feeforattendingboard/committeemeetings

- - - - -



Total(1) - - - - -

2 OtherNon-ExecutiveDirectors *DSRMurthy Pradeep Madhav

Prasanna Patankar

**S.KBehera

(a) Feeforattendingboardcommitteemeetings

0.10 0.15 0.20 0.10 0.55



Total(2) 0.10 0.15 0.20 0.10 0.55

Total(B)=(1+2) 0.10 0.15 0.20 0.10 0.55

TotalManagerialRemuneration 0.55

OverallCeilingaspertheActFor(B)-RemunerationtootherDirectorsbywayofsittingfeesforattendingeachmeetingofBoardorCommittee

(Sittingfeesof` 1lakhforeachmeetingoftheBoard orCommittee thereofattendedbyadirector)

*ShriDSRMurthyceasedtoholdofficeasaDirectoron10.11.2017. ** Shri S.K Behera was appointed as Director of the Company w.e.f 10.11.2017. He held office as director upto

April23,2018. C. Remuneration to *Key Managerial Personnel Other Than MD / Manager / WTD

Sr. No.

Particulars of Remuneration Key Managerial Personnel

CEO CS CFO Total

1 Grosssalary - - - -

(a) Salaryasperprovisionscontainedinsection17(1)oftheIncome-taxAct,1961

- - - -

(b) Valueofperquisitesu/s17(2) Income-taxAct,1961

- - - -


- - - -

2 StockOption - - - -


252 253

Sr. No.

Particulars of Remuneration Key Managerial Personnel

CEO CS CFO Total

3 SweatEquity - - - -

4 Commission - - - -

- as%ofprofit - - - -

- Others,specify…… - - - -

5 Others,pleasespecify - - - -

Total

*TheCompanydoesnothaveanyKeyManagerialPersonnel.

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

Type Section of the Companies Act

BriefDescription

Details of Penalty /

Punishment/ Compounding fees imposed

Authority[RD / NCLT/

COURT]

Appeal made,if any

(give Details)

A. COMPANY

Penalty - - - - -



B. DIRECTORS

Penalty - - - - -




Penalty - - - - -







254 255

ANNEXURE II

FORM NO. AOC.2Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties

referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto


1. Detailsofcontractsorarrangementsortransactionsnotatarm’slengthbasis-NIL

(a) Name(s)oftherelatedpartyandnatureofrelationship-N.A

(b) Natureofcontracts/arrangements/transactions-N.A

(c) Durationofthecontracts/arrangements/transactions-N.A

(d) Salienttermsofthecontracts/arrangements/transactionsincludingvalue,ifany-N.A

(e) Justificationforenteringintosuchcontractsorarrangementsortransactions-N.A

(f) date(s)ofapprovalbytheBoard-N.A

(g) Amountpaidasadvances,ifany:-N.A

(h) Dateofpassingspecialresolutioningeneralmeetingundersection188-N.A

2. Detailsofmaterialcontractsorarrangementortransactionsatarm’slengthbasis:

AlltransactionsenteredintobytheCompanywithrelatedpartiesduringtheyearendedMarch31,2018areinordinarycourseofbusinessandatarmslengthbasis.

DetailsoftransactionswithrelatedpartiesatanaggregatelevelforthefinancialyearendedMarch31,2018:

Sr. No.

Name(s) of the related party and nature of relationship

Nature of con-tract/ arrangement

Duration of contract/ arrangement/ transaction

Salient terms of the contract/arrangements/ transactions including value, if any

Amount (in Rs Lakhs )


Amount paid as advances, if any

1. STCI Finance Limited-HoldingCompany

SittingfeespaidforattendingBoardMeetings

N.A Sittingfeesof` 5000/-paidforeachmeetingofBoardattendedby Nomineesof STCIFinanceLimited.

0.45 N.A -





254 255


TO THE MEMBERS OF STCI COMMODITIES LIMITED

Report on the Standalone Financial Statements

1) We have audited the accompanying standalone financial statements of STCI COMMODITIES LIMITED (“the Company”),whichcomprisetheBalanceSheetasat31stMarch,2018,theStatementofProfitandLoss,theCashFlowStatementfortheyearthenended,andasummaryofthesignificantaccountingpoliciesandotherexplanatoryinformation.

Management’s Responsibility for the Standalone Financial Statements

2) The Company’s Board of Directors is responsible for thematters stated in Section 134(5) of the Companies Act, 2013(“theAct”)withrespecttothepreparationofthesestandalonefinancialstatementsthatgiveatrueandfairviewofthefinancial position, financial performance and cash flows of the Company in accordancewith the accounting principlesgenerallyacceptedinIndia, includingtheAccountingStandardsspecifiedunderSection133oftheAct,readwithRule7oftheCompanies(Accounts)Rules,2014.ThisresponsibilityalsoincludesmaintenanceofadequateaccountingrecordsinaccordancewiththeprovisionsoftheActforsafeguardingoftheassetsoftheCompanyandforpreventinganddetectingfraudsandotherirregularities;selectionandapplicationofappropriateaccountingpolicies;makingjudgmentsandestimatesthatarereasonableandprudent;anddesign,implementationandmaintenanceofadequateinternalfinancialcontrols,thatwereoperatingeffectivelyforensuringtheaccuracyandcompletenessoftheaccountingrecords,relevanttothepreparationandpresentationofthefinancialstatementsthatgiveatrueandfairviewandarefreefrommaterialmisstatement,whetherduetofraudorerror.


3) Ourresponsibilityistoexpressanopiniononthesestandalonefinancialstatementsbasedonouraudit.

4) WehavetakenintoaccounttheprovisionsoftheAct,theaccountingandauditingstandardsandmatterswhicharerequiredtobeincludedintheauditreportundertheprovisionsoftheActandtheRulesmadethereunderandtheOrderunderSection143(11)oftheAct.

5) WeconductedourauditinaccordancewiththeStandardsonAuditingspecifiedunderSection143(10)oftheAct.ThoseStandardsrequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreefrommaterialmisstatement.

6) Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsandthedisclosuresinthefinancialstatements.Theproceduresselecteddependontheauditor’sjudgment,includingtheassessmentoftherisksofmaterialmisstatementof thefinancial statements,whetherdue to fraudorerror. Inmaking those riskassessments, theauditorconsidersinternalfinancialcontrolrelevanttotheCompany’spreparationofthefinancialstatementsthatgiveatrueandfairviewinordertodesignauditproceduresthatareappropriateinthecircumstances.AnauditalsoincludesevaluatingtheappropriatenessoftheaccountingpoliciesusedandthereasonablenessoftheaccountingestimatesmadebytheCompany’sDirectors,aswellasevaluatingtheoverallpresentationofthefinancialstatements.

7) Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopiniononthestandalonefinancialstatements.

Opinion

8) Inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous,theaforesaidstandalonefinancialstatementsgivetheinformationrequiredbytheActinthemannersorequiredandgiveatrueandfairviewinconformitywiththeaccountingprinciplesgenerallyacceptedinIndia,ofthestateofaffairsoftheCompanyasat31stMarch,2018,anditsprofit/lossanditscashflowsfortheyearendedonthatdate.

Emphasis of matter

9) a) WedrawattentiontoNote8andnoteNo.12tothefinancialstatements,duringthefinancialyear2011-12,TheCompanyhaddecidedtodiscontinuethecommoditybrokingoperations.Accordinglythebrokingoperationswerediscontinued


256 257

with effect from 20th September 2011. Accordingly, the accounts have not been prepared on the assumption ofgoing concern basis. Further, the company has submitted an applicationwith Commodities Exchanges a) NationalCommodity&DerivativesExchangeLimited(NCDEX)andb)MultiCommodityExchangeforsurrenderofmembershipon25/10/2013.NCDEXacceptedtheapplicationforsurrenderofmembershipandterminatedthemembershipw.e.f.August19,2015.TheCompany’sotherapplicationdated25/10/2013forsurrenderofitsMCXmembershipisapprovedbyMultiCommodityExchangew.e.f.4thJuly,2017.

b) WedrawattentiontoNote11tothefinancialstatements,theCompanyhaddecidedtodiscontinuethecommoditybrokingoperationsandaccordinglythebrokingoperationswerediscontinuedwitheffectfrom20thSeptember2011.Thecompany is requiredtorepaytheclientsandexchangeduesonthediscontinuationofbusiness.Thecompanyhadtakenstepstorepaysuchduestothetuneof` 7,60,562/-byissuingchequestotherespectiveparties,butsomechequeswerereturnedbacktothecompanyandsomechequesweredeliveredbutnotdepositedbythepartiesandsomeothercasesthemattersareindispute.

Ouropinionisnotmodifiedinrespectofthesematters.


10) As required by the Companies (Auditor’s Report) Order, 2016, issued by the Central Government of India in terms of sub-section(11)ofsection143oftheAct(the“Order”),andonthebasisofsuchchecksofthebooksandrecordsoftheCompany aswe considered appropriate and according to the informationandexplanations given tous,we give in theAnnexure‘A’astatementonthemattersspecifiedinparagraphs3and4oftheOrder.

11) AsrequiredbySection143(3)oftheAct,wereportthat:

a) Wehavesoughtandobtainedalltheinformationandexplanationswhichtothebestofourknowledgeandbeliefwerenecessaryforthepurposesofouraudit;

b) Inouropinion,properbooksofaccountasrequiredbylawhavebeenkeptbytheCompanysofarasitappearsfromourexaminationofthosebooks;

c) TheBalanceSheet,theStatementofProfitandLoss,andtheCashFlowStatementdealtwithbythisReportare inagreementwiththebooksofaccounts;

d) Inouropinion,theaforesaidstandalonefinancialstatementscomplywiththeAccountingStandardsspecifiedunderSection133oftheAct,readwithRule7oftheCompanies(Accounts)Rules,2014;

e) Thefinancial statementsof thecompanyhavenotbeenpreparedontheassumptionsofgoingconcern.Thegoingconcernmatterhasbeendescribedinparagraph9(a)undertheEmphasisofMattersparagraphabove.

f) Onthebasisofthewrittenrepresentationsreceivedfromthedirectorsason31stMarch,2018takenonrecordbytheBoardofDirectors,noneofthedirectorsisdisqualifiedason31stMarch,2018frombeingappointedasadirectorintermsofSection164(2)oftheAct.

g) With respect to adequacyof the internalfinancial controlsoverfinancial reportingof theCompanyandoperatingeffectivenessofsuchcontrols,refertoourseparatereportin“AnnexureB”.

h) Withrespecttothedirections issuedbytheC&AGundersection143(5)ofTheCompaniesAct,2013refertoourseparatereportin“AnnexureC”.



256 257

i) WithrespecttotheothermatterstobeincludedintheAuditor’sReportinaccordancewithRule11oftheCompanies(AuditandAuditors)Rules,2014,asamendedbytheCompanies(AuditandAuditors’)AmendmentRules,2017inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous:

i) TherewerenopendinglitigationswhichcouldimpactthefinancialpositionoftheCompany.

ii) The Company did not have any long-term contracts including derivative contracts for which therewere anymaterialforeseeablelosses.

iii) Ason31stMarch2018therewerenoamountswhichwererequiredtobetransferred,totheInvestorEducationandProtectionFundbytheCompany

ForandonbehalfofH M Jain & Co.Chartered AccountantsFirmRegistrationNo.:103909W

H. M. JAINPartner MembershipNo.033953MumbaiApril, 24 2018



258 259

WithreferencetotheAnnexurereferredtoinparagraph10ofthereportoftheAuditors’totheMembersofSTCICommoditiesLimitedontheaccountsfortheyearended31stMarch2018,wereportthat:

(i) Basedontheexamination,thecompanydoesnothaveanyfixedassetsandhenceclause(i)(a),(b)and(c)oftheOrderisnotapplicabletotheCompany.

(ii) Accordingtotheinformationandexplanationgiventous,theCompanydoesnothaveanyinventoryandaccordinglyclause(ii)totheorderisnotapplicable.

(iii) Aspertheinformationfurnished,theCompanyhasnotgrantedanyloans,securedorunsecured,companies,firmsorotherpartiescoveredintheregistermaintainedunderSection189oftheCompaniesAct,2013.Henceclause(iii)(a)and(b)and(c)arenotapplicabletotheCompany.

(iv) As per the information furnished, the Company has not granted any loans, investments, guarantees, and security andtherefore,provisionsofsection185and186oftheCompaniesAct,2013arenotapplicableandaccordinglyclause(iv)totheorderisnotapplicable.

(v) Accordingtothe’informationandexplanationgiventoustheCompanyhasnotacceptedanydepositswithinthedirectivesissuedbytheReserveBankofIndiaandtheprovisionsofsections73to76theAct.Henceclause(v)oftheOrderisnotapplicabletotheCompany.

(vi) Thecentralgovernmenthasnotprescribedmaintenanceofcostrecordsundersectionsubsection(1)ofsection148oftheCompaniesActforanyactivitiesofthecompany.Accordinglyclause(vi)totheorderisnotapplicable.

(vii) Accordingtotheinformationandexplanationgiventousandonthebasisofourexaminationofthebooksofaccount;TheCompanyhasbeenregularindepositingundisputedstatutorydueswiththeappropriateauthorities.TherearenoduesofIncomeTax,SalesTax,ServiceTax,DutyofCustoms,DutyofExcise,ValueaddedtaxorCessIncomeoutstandingonaccountofanydispute.

(viii) Thecompanyhasnotacceptedanyloansorborrowingsfromfinancialinstitution,bank,Governmentandaccordinglyclause(viii)totheorderisnotapplicable.

(ix) Thecompanyhasnotraisedanymoneybywayofinitialpublicofferorfurtherpublicoffer(includingdebtinstruments)andhasnotobtainedanytermloansandaccordinglyclause(ix)totheorderisnotapplicable.

(x) DuringthecourseofourexaminationofthebooksandrecordsoftheCompany,carriedoutinaccordancewiththegenerallyacceptedauditingpracticesinIndia,andaccordingtotheinformationandexplanationsgiventous,wehaveneithercomeacrossanyinstanceoffraudonorbytheCompany,noticedorreportedduringtheyear,norhavewebeeninformedofanysuchcasebytheManagement.

(xi) NoManagerialremunerationhasbeenpaid,andaccordingly,clause(xi)totheorderisnotapplicable.

(xii) ThecompanyisnotaNidhiCompanyandaccordinglyclause(xii)totheorderisnotapplicable.

(xiii) Transactionswiththerelatedpartiesareincompliancewithsections177and188ofCompaniesAct,2013whereapplicableandthedetailshavebeendisclosedintheFinancialStatementsetc.,asrequiredbytheapplicableaccountingstandards.

(xiv) Thecompanyhasnotmadeanypreferentialallotmentorprivateplacementofsharesorfullyorpartlyconvertibledebenturesduringtheyearunderreview.

(xv) Thecompanyhasnotenteredintoanynon-cashtransactionswithdirectorsorpersonsconnectedwithhim.

(xvi) Thecompanyisnotrequiredtoberegisteredundersection45-IAoftheReserveBankofIndiaAct,1934.

ANNEXURE “A” TO THE AUDITORS’ REPORT




258 259

ReportontheInternalFinancialControlsunderClause(i)ofSub-section3ofSection143oftheCompaniesAct,2013(“theAct”).WehaveauditedtheinternalfinancialcontrolsoverfinancialreportingofSTCICOMMODITIESLIMITED(“theCompany”)asof31stMarch2018inconjunctionwithourauditofthestandalonefinancialstatementsoftheCompanyfortheyearendedonthatdate.


TheCompany’smanagementisresponsibleforestablishingandmaintaininginternalfinancialcontrolsbasedontheinternalcontroloverfinancialreportingcriteriaestablishedbytheCompanyconsideringtheessentialcomponentsofinternalcontrolstatedintheGuidanceNoteonAuditofInternalFinancialControlsoverFinancialReportingissuedbytheInstituteofCharteredAccountantsofIndia(‘ICAI’).Theseresponsibilitiesincludethedesign,implementationandmaintenanceofadequateinternalfinancialcontrolsthatwereoperatingeffectivelyforensuringtheorderlyandefficientconductofitsbusiness,includingadherencetocompany’spolicies,thesafeguardingofitsassets,thepreventionanddetectionoffraudsanderrors,theaccuracyandcompletenessoftheaccountingrecords,andthetimelypreparationofreliablefinancialinformation,asrequiredundertheCompaniesAct,2013.

Auditors’ Responsibility

OurresponsibilityistoexpressanopinionontheCompany’sinternalfinancialcontrolsoverfinancialreportingbasedonouraudit.WeconductedourauditinaccordancewiththeGuidanceNoteonAuditofInternalFinancialControlsoverFinancialReporting(the“GuidanceNote”)andtheStandardsonAuditing,issuedbyICAIanddeemedtobeprescribedundersection143(10)oftheCompaniesAct,2013,totheextentapplicabletoanauditof internalfinancialcontrols,bothapplicabletoanauditofInternalFinancialControlsand,bothissuedbytheInstituteofCharteredAccountantsofIndia.ThoseStandardsandtheGuidanceNoterequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhetheradequate internal financial controls over financial reporting was established and maintained and if such controls operatedeffectivelyinallmaterialrespects.


WebelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinionontheCompany’sinternalfinancialcontrolssystemoverfinancialreporting.


Acompany’sinternalfinancialcontroloverfinancialreportingisaprocessdesignedtoprovidereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordancewithgenerallyaccepted accounting principles. A company’s internal financial control over financial reporting includes those policies andproceduresthat(1)pertaintothemaintenanceofrecordsthat,inreasonabledetail,accuratelyandfairlyreflectthetransactionsanddispositionsoftheassetsofthecompany;(2)providereasonableassurancethattransactionsarerecordedasnecessarytopermitpreparationoffinancial statements inaccordancewithgenerallyacceptedaccountingprinciples,andthat receiptsandexpendituresofthecompanyarebeingmadeonlyinaccordancewithauthorisationsofmanagementanddirectorsofthecompany;and(3)providereasonableassuranceregardingpreventionortimelydetectionofunauthorisedacquisition,use,ordispositionofthecompany’sassetsthatcouldhaveamaterialeffectonthefinancialstatements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Becauseoftheinherentlimitationsofinternalfinancialcontrolsoverfinancialreporting,includingthepossibilityofcollusionorimpropermanagementoverrideofcontrols,materialmisstatementsduetoerrororfraudmayoccurandnotbedetected.Also,projectionsofanyevaluationoftheinternalfinancialcontrolsoverfinancialreportingtofutureperiodsaresubjecttotheriskthattheinternalfinancialcontroloverfinancialreportingmaybecomeinadequatebecauseofchangesinconditions,orthatthedegreeofcompliancewiththepoliciesorproceduresmaydeteriorate.

ANNEXURE “B” TO THE AUDITORS’ REPORT


260 261

Opinion

Inouropinion,theCompanyhas,inallmaterialrespects,anadequateinternalfinancialcontrolssystemoverfinancialreportingandsuchinternalfinancialcontrolsoverfinancialreportingwereoperatingeffectivelyasat31March2017,basedontheinternalcontrol overfinancial reporting criteria establishedby theCompany considering theessential componentsof internal controlstatedintheGuidanceNoteonAuditofInternalFinancialControlsOverFinancialReportingissuedbytheInstituteofCharteredAccountantsofIndia

ANNEXURE “B” TO THE AUDITORS’ REPORT


H. M. JAINPartnerMembershipNo.033953MumbaiApril, 24 2018


260 261

ANNEXURE “C” TO THE AUDITORS’ REPORT

Directions and Sub Directions under Section 143(5) of the Companies Act, 2013 applicable from the year 2015-2016

1. Whether the company has clear title/lease deeds forfreeholdandleaseholdrespectively?Ifnotpleasestatetheareaof freeholdand leasehold land forwhichtitle/leasedeedsarenotavailable?

The company does not have any freehold/leasehold titlesduringtheyearunderconsideration

2. Whetherthereareanycasesofwaiver/writeoffofdebts/loans/interestetc.,ifyes,thereasonsthereforandamountinvolved?

There are no cases of waiver/write off of debts/loans/interestetc.duringtheyearunderconsideration.

3. Whether proper records are maintained for inventorieslyingwith third parties& assets received as gift/grant(s)fromGovernmentorotherauthorities?

There are no inventories lying with third parties. The company has not received any gift/grant fromGovernmentorotherauthorities.

4. Whetherthereareanycasesofwaiveroffees/reversalofaccounted feeswhichwas due but not received/writtenoff.Ifyes,thereasonsthereforandamountinvolved-casewise.

Therearenocasesofwaiverand/orreversalofaccountedfeeswhichwasduebutnotreceived/writtenoff.




262 263

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) OF THE COMPANIES ACT, 2013 ON THE FINANCIAL STATEMENTS OF STCI COMMODITIES LIMITED FOR THE YEAR ENDED 31 MARCH 2018

ThepreparationofFinancialStatementsofSTCICommoditiesLimitedfortheyearended31March2018inaccordancewiththefinancialreportingframeworkprescribedundertheCompaniesAct,2013(Act) istheresponsibilityofthemanagementoftheCompany.TheStatutoryAuditorappointedbytheComptrollerandAuditorGeneralofIndiaundersection139(5)oftheActisresponsibleforexpressingopinionontheFinancialStatementsundersection143oftheActbasedon independentaudit inaccordancewithstandardsonauditingprescribedunderSection143(10)oftheAct.Thisisstatedtohavebeendonebythemvidetheir Audit Report dated 24 April 2018.

I,onbehalfoftheComptrollerandAuditorGeneralof India,havedecidednottoconducttheSupplementaryAuditoftheFinancialStatementsofSTCICommoditiesLimitedfortheyearended31March2018undersection143(6)(a)oftheAct.


(Roop Rashi)PrincipalDirectorofCommercialAuditandEx-officioMember,AuditBoard-I,Mumbai

Place:MumbaiDate:June7,2018


262 263

BALANCE SHEET AS AT MARCH 31, 2018(Amountin`)




I EQUITY AND LIABILITIES1 Shareholders' Funds

(a) Sharecapital 1.1 45,000,000 45,000,000 (b) Reservesandsurplus 1.2 (28,073,057) (29,697,838)

Sub-Total-(A) 16,926,943 15,302,162 2 Non Current Liabilities

Sub-Total-(B) 0 03 Current Liabilities

(a) Shorttermborrowings

(b) Tradepayables 2.1 - Totaloutstandingduesofmicroenterprisesand

smallenterprises - Totaloutstandingduesofcreditorsotherthan

microenterprisesandsmallenterprises847,681 802,431

(c) Othercurrentliabilities 2.2 58,300 242,519 Sub-Total-(C) 905,981 1,044,950

TOTAL (A+B+C) 17,832,924 16,347,112 II ASSETS4 Non-current Assets

(a) Property,Plant&Equipment - -(b) Intangibleassets - - (c) LongTermLoansandAdvances 3 197,146 1,993,157

Sub-Total-(D) 197,146 1,993,157 5 Current Assets

(a) Currentinvestments 4.1 3,100,000 750,000 (b) CashandBankBalances 4.2 13,524,095 13,028,244 (c) Othercurrentassets 4.3 1,011,683 575,711

Sub-Total-(E) 17,635,778 14,353,955

TOTAL (D+E) 17,832,924 16,347,112 NotestoAccountsformintegralpartofthefinancialstatement.

As per our attached report of even date For and on behalf of the Board of DirectorsFor H M JAIN & Co. Chartered AccountantsFirmRegnNo.:103909W

H M Jain Pradeep Madhav Prasanna Patankar Partner Director Director MembershipNo.:033953 DIN:00267422 DIN:07658714

Place: Mumbai Place: MumbaiDate: April 24, 2018 Date: April 24, 2018


264 265

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2018(Amountin`)


For the year ended

March 31, 2018

For the year ended

March 31, 2017

I RevenuefromOperations 5

II OtherIncome 6 1,970,575 1,092,320

III Total Revenue (I+II) 1,970,575 1,092,320

IV Expenses

Otherexpenses 7 345,794 206,779

Depreciationandamortizationexpense

V Total Expenses 345,794 206,779

VI Earnings before tax (III-V) 1,624,781 885,541

VII Tax expenses

Current tax 101,868 -

Short/(Excess)provisionfortaxofearlieryear(s) (101,868) -

Deferredtaxliability/(asset) - -

VIII Profit /(Loss) for the period (VI-VII) 1,624,781 885,541

IX Earnings per equity share of face value of ` 10 13

i) Basic 0.36 0.20

ii) Diluted 0.36 0.20

NotestoAccountsformintegralpartofthefinancialstatement.





264 265

CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2018(Amountin`)



A. CASH FLOW FROM OPERATING ACTIVITIESNet(Loss)/Profitbeforetaxandextraordinaryitems 1,624,781 885,541Adjustmentsfor:Loss/(Profit)onsaleofInvestments (178,400) (108,883)

(178,400) (108,883)

OperatingProfit/(loss)beforeworkingcapitalchanges 1,446,381 776,658Changes in Working Capital:(Decrease)/IncreaseinTradePayable 45,250 (17,825)(Decrease)/IncreaseinOtherCurrentLiabilities (184,219) 17,519Decrease/(Increase)inOthercurrentassets (435,972) 23,765Decrease/(Increase)inLongTermLoansandAdvances 1,000,000 0

425,059 23,459CASH FLOW FROM / (USED IN) OPERATING ACTIVITIES 1,871,440 800,117Less:TaxesPaid(RefundReceived) (796,011) (89,890)NET CASH FLOW FROM / (USED IN) OPERATING ACTIVITIES 2,667,451 890,007

B. CASH FLOW FROM INVESTING ACTIVITIESFixeddepositwithbankshavingoriginalmaturityoverthreemonths (619,774) (665,133)(Purchase)/SaleofCurrentInvestments(Net) (2,171,600) (112,647)NET CASH FLOW FROM / (USED IN) INVESTING ACTIVITIES (2,791,374) (777,780)

C. CASH FLOW FROM FINANCING ACTIVITIESRepaymentofborrowings 0 0NET CASH FLOW FROM / (USED IN) FINANCING ACTIVITIES 0 0

NET INCREASE / (DECREASE) IN CASH & CASH EQUIVALENTS (A+B+C) (123,923) 112,227Cash and Cash equivalents at beginning period (Refer note No 4.2) 398,786 286,559Cash and Cash equivalents at end of period (Refer note No 4.2) 274,863 398,786OtherBankbalances(FD'swithresidualmaturityoflessthan12months) 13,249,232 12,629,458Cash and bank balances at end of period (Refer Note 4.2) 13,524,095 13,028,244Preparedasper“IndirectMethod”asprescribedbyAccountingStandard-3(revised)“CashFlowStatements”





266 267

NOTES ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2018

(Amountin`)

NOTE NO. 1.1: SHARE CAPITAL



Authorised

5,000,000(PY:5,000,000)Equitysharesof`10/-each 50,000,000 50,000,000

Issued, Subscribed & Fully paid up

EquityShareCapital

4,500,000(PY:4,500,000)Equitysharesof`10/-eachfullypaid-up 45,000,000 45,000,000

Total 45,000,000 45,000,000

a) Details of Shareholding as at March 31, 2018

i) STCICommoditiesLimitedisa100%whollyownedsubsidiarycompanyofSTCIFinanceLimited

ii) Shareholdersholdingmorethan5%ofEquityShares.



1. STCIFinanceLtd 4,470,000 99.34% 4,470,000 99.34%

2. STCIFinanceLtdjointlywithShriRajivRanjan 5,000 0.11% 5,000 0.11%

3. STCIFinanceLtdjointlywithShriKamleshRathi 5,000 0.11% 5,000 0.11%

4. STCIFinanceLtdjointlywithMsSuparnaSharma 5,000 0.11% 5,000 0.11%

5. STCIFinanceLtdjointlywithMsSabitaBragenza 5,000 0.11% 5,000 0.11%

6. STCIFinanceLtdjointlywithShriAlokePrasad 5,000 0.11% 5,000 0.11%

7. STCIFinanceLtdjointlywithShriDeepakPaharya 5,000 0.11% 5,000 0.11%

4,500,000 100.00% 4,500,000 100.00%

STCI FINANCE LIMITED (PY: 4,500,000 No of shares, 100% holding)

iii) Reconciliationofnumberofequityshares(F.V.of`10each)


No of Shares % of holding No of Shares Amount in `

Numberofsharesatthebeginningofyear 4,500,000 45,000,000 4,500,000 45,000,000

Add:SharesIssued

Less:Shareboughtback/forfeited

Numberofsharesattheendofyear 4,500,000 45,000,000 4,500,000 45,000,000

iv) Eachequityshareisentitledtoonevotepershare.TheCompanyhasonlyoneclassofequityshareshavingparvalueof`10/-each.

v) Therehasnotbeenanychangeinsharecapitalstructureofthecompanyeitherbywayofissueofsharesorbuybackofsharesduringthelastfiveyears.


266 267


(Amountin`)

NOTE NO. 1.2: RESERVES AND SURPLUS



Surplus / (Deficit) at beginning of the year (29,697,838) (30,583,379)

Add:NetProfit/(Loss)forthecurrentyear 1,624,781 885,541

Surplus / (Deficit) at end of the year (28,073,057) (29,697,838)

NOTE NO. 2.1: TRADE PAYABLES(Amountin`)



Trade payables

- DuetoSmallandMicroEnterprises1

- OtherthanMicroandSmallEnteprises

i. toSubsidiaries

ii. toOthers(ReferNoteNo.11) 847,681 802,431

Total 847,681 802,431

1 TheCompanyhasnotreceivedanyintimationfromitssuppliersregardingtheirstatusundertheMicro,SmallandMediumEnterprisesDevelopmentAct,2006.Accordingly,disclosures,ifany,relatingtoamountsunpaidasattheyearendtogetherwithinterestpaid/payablehasnotbeengiven.

NOTE NO. 2.2: OTHER CURRENT LIABILITIES

(Amountin`)



Other Payables

Statutorydues 8,300 3,500

Others 50,000 239,019

Total 58,300 242,519

NOTE NO. 3: LONG TERM LOANS AND ADVANCES

(Amountin`)



CashdepositwithCommoditiesExchanges 0 1,000,000

MAT Tax Credit 101,868 0

TaxDeductedatSource/RefundDue(Net) 95,278 993,157

Total 197,146 1,993,157


268 269


(Amountin`)NOTE NO. 4.1: CURRENT INVESTMENTS



Other Investments (Non Trade) Quoted Units

Investment in Mutual fund units :

LICMFSavingsPlusFund-Direct-GrowthPlan-ST-G1 112,781.818 3,100,000 750,000

FaceValue`10(PYunits:30,351.224)

Total 3,100,000 750,000

Additional information

Aggregateamountofquotedinvestments 3,100,000 750,000

Marketvalueofquotedinvestment 3,114,808 781,571

CurrentInvestmentsarevaluedatcostormarketvaluewhicheverislower.

NOTE NO. 4.2: CASH AND BANK BALANCES(Amountin`)



Cash and Cash Equivalents

Cash on hand 4,284 1,798

Balances with Bank 270,579 396,988

Other Bank Balances

-FixedDepositwithmaturityofmorethan3monthsbutlessthanorequalto12months

13,249,232 12,629,458

Total 13,524,095 13,028,244

NOTE NO. 4.3: OTHER CURRENT ASSETS(Amountin`)



Others

- InterestAccruedbutnotdue(onFixedDepositswithBanks) 582,483 575,711

- ReceivablefromNCDEXeMarketsLimited(formerlyknownasNCDEXSpotExchangeLtd)

429,200 0

Total 1,011,683 575,711


268 269


(Amountin`)NOTE NO. 5: REVENUE FROM OPERATIONS

The company does not have any revenue from operations during the period under audit for the financial year ended 31stMarch,2018nordidithaveinthepreviousyearended31stMarch,2017.Thecorebusinessoperationsofthecompanyshavebeencompletelystalledfrom20thSeptember2011.

NOTE NO. 6: OTHER INCOME



InterestincomefromFDR 930,563 970,020

Provisionnolongerrequiredwrittenback 150,000 0

InterestonIncometaxrefund 182,412 13,397

Miscellaneousincome(ReferNote12) 529,200 20

Netgainonsaleofcurrentinvestments 178,400 108,883

Total 1,970,575 1,092,320

NOTE NO. 7: OTHER EXPENSES (Amountin`)



Rates & Taxes 127,049 15,176

Travellingexpenses 3,975 17,519

Legal&Professionalcharges 71,700 59,200

PostageandCourier 1,020 350

PaymenttoAuditors

- As Auditors 35,000 35,000

- For other services 34,500 4,500

Miscellaneous Expenses 6,330 6,109

BankCharges 1,770 0

Director'sSittingfees 64,450 68,925

Total 345,794 206,779

NOTE NO. 8

The Company and the Nature of its business

Thecompanywas incorporatedonSeptember20,2004with theobjectof carryingon thebusinessof tradingandbroking incommoditiesonthevariousCommodityExchangesieMultiCommodityExchange(MCX)andNationalCommodityandDerivativeExchange(NCDEX),Mumbai.

TheBrokingoperations (corebusinesss)werediscontinuedwitheffect from20thSeptember2011. Since then,CompanyhadsettledalmostallitsclientsoutstandingaccountsandsurrendereditsNCDEXmemebrship.Duringtheyear,MCXalsoapprovedtheCompany’sapplicationforsurrenderofitsmembershipw.e.f.July4,2017.


270 271


Therefore,accordingtotheAccountingStandard(AS)-1“DisclosureofAccountingPolicies”andonthegroundsofprudenceandconsideringtherequirementsofAccountingStandard,theaccountscontinuetohavenotbeenpreparedontheassumptionofgoingconcernbasissincethefinancialyear2011-12.

NOTE NO. 9

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE NO. 9.1: ACCOUNTING CONVENTIONS

ThefinancialstatementshavebeenpreparedonaccrualbasistocomplyinallmaterialaspectswithapplicableaccountingprinciplesinIndia,theAccountingStandards(AS)specifiedundersection133oftheCompaniesAct2013,readwithRule7oftheCompanies(Accounts)Rules,2014,provisionsoftheCompaniesAct,2013(totheextentnotified)

NOTE NO. 9.2: REVENUE RECOGNITIONS

i) Brokerageincomeisrecognizedontradedate.

ii) Dividendisaccountedonanaccrualbasiswhentherighttoreceivethedividendisestablished.

iii) InterestIncomeisrecognizedonaccrualbasis.

NOTE NO. 9.3: INVESTMENTS

LongTerminvestmentsarevaluedatcostcomprisingofacquisitionandincidentalexpenseslesspermanentdiminutioninvalue,ifany.Provisionfordiminutioninthevalueoflongterminvestmentsismadetorecognizeadeclineotherthantemporaryinthevalueofinvestments.

Investmentsotherthanlong-terminvestmentsareclassifiedascurrentinvestmentsandvaluedatcostormarketvaluewhicheverislower.Profit/Lossfrominvestmentisrecognisedonthebasisofweightetedaveragecost.

NOTE NO. 9.4: ACCOUNTING FOR TAXES ON INCOME

Deferredtaxontimingdifferencesbetweentaxableincomeandaccountingincomeisaccountedfor,usingthetaxratesandthetaxlawsenactedorsubstantiallyenactedasonthebalancesheetdate.Deferredtaxassetsotherthanonunabsorbedtaxlossesandprovisionfordoubtfuldebtsarerecognizedonlywhenthereisareasonablecertaintyoftheirrealization.Deferredtaxassetsonunabsorbedtaxlossesandprovisionfordoubtfuldebtsarerecognizedwhenthereisvirtualcertaintyoftheirrealization.

NOTE NO. 9.5: PROVISION AND CONTIGENCIES

TheCompanycreatesaprovisionwhenthereisapresentobligationasaresultofpasteventthatprobablyrequiresanoutflowofresourcesandareliableestimatecanbemadeoftheamountofobligation.Adisclosureofcontingentliabilityismadewhenthereisapossibleobligationorapresentobligationthatwillprobablynotrequireoutflowofresourcesorwhereareliableestimateoftheobligationcannotbemade.Contingentassetsareneitherrecognizednordisclosed.

NOTE NO. 10

Related Party Disclosure

A) ofParent/AssociateCompaniesasidentifiedbytheManagementareasunder:

Name of Related Party Nature of Relationship

1.STCIFinanceLimited HoldingCompany

2.STCIPrimaryDealerLtd FellowSubsidiary


270 271


B) TransactionwithHolding/GroupCompany (Amountin`)

Nature of Transaction Name of Related Party FY 17-18 FY 16-17

1.SittingFeesPaid STCIFinanceLimited 45,000 40,000

NOTE NO. 11

Rules, Bye Laws andBusiness Rules of Commodity Exchanges and ForwardMarkets Commission (FMC) require themembersof Commodity Exchanges to complywith certain requirements relating to their functions in commodities derivativesmarket. Asperthebylawsofexchanges,companyshallmaintaintheconstituent/clientfundsseparatelyandnotusethismoneyforitsowntransactionsorfortransactionsofanyotherclientorforanypurposeotherthanmarginandpayinrelatingtotransactionsenteredintobysuchclientpayingthemargin.

CompanyhaddiscontinueditsbrokingoperationsinceSeptember2011,andhassincerepaidalmostalltheclientandexchangedues.Howeverinfewcases,therepaymentofclientandfranchiseecreditbalancescouldnotbecompletedasthefinalsettlementchequesissuedtoclientswereeithernotdepositedbyclientsorwerereturnedbacktothecompany.Tradepayables(ReferNote2.1)includeRs760,562/-payabletofewsuchclientsandfranchisees.

Detailsofthesetradepayablesareasunder: (Amountin`)


Undisputedclientcreditbalances(notclaimedbyclients) 294,807 294,807

Disputedclientsandfranchiseescreditbalance 412,969 412,969

DepositofAuthorisedAgent 52,786 52,786

Total 760,562 760,562

NOTE NO. 12

DuringtheyearMiscellaneousincomeof`529,200/-hasbeenbooked,asdetailedbelow.

a) RefundofunutilisedbalanceofAdvanceMinimumTransactionCharges(AMTC)/MinmumUsageFee(MUF)byMCXonacceptanceofsurrenderofmembership

100,000

b) AmountconfirmedbyNCDEXeMarketsLimited(formerlyknownasNCDEXSpotExchangeLtd)aspayabletotheCompanytowardsSecuritydepositof`500,000/-afternettingoffpendingannualmembershipchargesof`70,800/-.

429,200

529,200

NOTE NO. 13

Earning Per Share

EarningspersharearecomputedinaccordancewithAS-20Earningspersharebydividingthenetprofitaftertaxbytheweightedaveragenumberofequitysharesoutstandingfortheperiod.

Earning Per Share - Basic and diluted (Amountin`)

March 31, 2018 March 31, 2017

Profit/(Loss)aftertaxfortheyear 1,624,781 885,541

Weightedaveragenumberofequitysharesoutstandingduringtheyear 4,500,000 4,500,000

Nominalvalueperequityshare 10 10

EarningsPerShare–Basicanddiluted 0.36 0.20


272

NOTE NO. 14

Segment Reporting

Thecompanydoesnothaveanyreportablesegmentduringthefinancialyear2017-18.

NOTE NO. 15

PreviousYearfigureshavebeenregrouped/re-arrangedwherevernecessary.





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