To the Members
The Directors have pleasure in presenting before you the 31st Director'sReport of the Company together with the Audited Statements of Accounts for the year ended31st March 2017.
1. FINANCIAL SUMMARY/HIGHLIGHTS OPERATIONS STATE OF AFFAIRS:
The performance during the period ended 31st March 2017 has been as under:
| || ||(Rs. In Lakhs) |
|Particular ||Standalone ||Consolidate |
| ||2016-2017 ||2015-2016 ||2016-17 |
|Total Income ||2127.27 ||1663.08 ||2870.82 |
|Total Expenditure ||1830.52 ||1469.37 ||2486.22 |
|Profit Before Tax ||296.75 ||193.71 ||384.60 |
|Provision for Tax ||105.26 ||66.53 ||133.75 |
|Profit after Tax ||191.49 ||127.18 ||250.85 |
|Transfer to General Reserves ||- ||3.18 ||- |
|Profit available for appropriation ||191.49 ||124.00 ||250.85 |
|Provision for Proposed Dividend ||- ||40.32 ||- |
|Provision for Dividend Tax ||- ||8.21 ||- |
|Balance Carried to Balance Sheet ||191.49 ||75.47 ||250.85 |
2. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:
There were no material changes and commitments affecting financial position of thecompany between 31st March and the date of Board's Report. (i.e. 15.05.2017)
3. CHANGE IN THE NATURE OF BUSINESS IF ANY:
During the period under review and the date of Board's Report there was no change inthe nature of Business.
The Directors are pleased to recommend a Dividend of Re.1.00 per share on the Paid upEquity Share Capital of the Company in respect of the financial year 2016-17. The totaloutgo on account of dividend inclusive of dividend tax stands at Rs. 6066025/- forwhich necessary provision has been made in the accounts.
5. BOARD MEETINGS:
During the year the Board of Directors duly met 4 (Four) times on 25.05.201611.08.2016 11.11.2016 11.02.2017 and in respect of which meetings proper notices weregiven and the proceedings were properly recorded and signed in the Minutes Book maintainedfor the purpose.
6. CAPITAL OF THE COMPANY :
Authorized Share capital share capital of the company stands at Rs. 60000000/-(Rupees Six Crores Only) divided in to 6000000 equity shares of Rs.10/- each and thepaid up capital of the company stand at Rs. 50400000(Rupees Five Crores Four LakhsOnly) divided in to 5040000 equity shares of Rs.10/- each.
POLICY FOR SELECTION OF DIRECTORS AND DETERMINING DIRECTORS' INDEPENDENCE
This policy sets out the guiding principles for the Nomination & RemunerationCommittee for identifying persons who are qualified to become Directors and to determinethe independence of Directors in case of their appointment as independent Directors ofthe Company.
2. Terms and References:
2.1 "Director" means a director appointed to the Board of a Company.
2.2 "Nomination and Remuneration Committee means the committee constitutedin accordance with the provisions of Section 178 of the Companies Act 2013 and Reg 19 ofSEBI (Listing obligations and Disclosure Requirements) Regulations 2015.
2.3 "Independent Director" means a director referred to in sub-section(6) of Section 149 of the Companies Act 2013 and Regulation 16(1) (b) of the SEBI(Listingobligations and Disclosure Requirements) Regulations 2015.
Qualifications and criteria
3.1.1 The Nomination and Remuneration Committee and the Board shall review on annualbasis appropriate skills knowledge and experience required of the Board as a whole andits individual members. The objective is to have a board with diverse background andexperience that are relevant for the Company's operations.
3.1.2 In evaluating the suitability of individual Board member the NR Committee maytake into account factors such as:
General understanding of the company's business dynamics global business andsocial perspective;
Educational and professional background
Standing in the profession;
Personal and professional ethics integrity and values;
Willingness to devote sufficient time and energy in carrying out their dutiesand responsibilities effectively.
3.1.3 The proposed appointee shall also fulfill the following requirements:
shall possess a Director Identification Number;
shall not be disqualified under the companies Act 2013;
shall endeavour to attend all Board Meeting and wherever he is appointed as aCommittee Member the Committee Meeting;
shall abide by the Code of Conduct established by the company for Directors andsenior Management personnel;
shall disclose his concern or interest in any company or companies or bodiescorporate firms or other association of individuals including his shareholding at thefirst meeting of the Board in every financial year and thereafter whenever there is achange in the disclosures already made;
Such other requirements as may be prescribed from time to time under thecompanies Act 2013 Equity listing Agreements and other relevant laws.
3.1.4 The Nomination & Remuneration Committee shall evaluate each individual withthe objective of having a group that best enables the success of the company's business.
3.2 Criteria of independence
3.2.1 The Nomination & Remuneration Committee shall assess the independence ofDirectors at time of appointment/ re-appointment and the Board shall assess the sameannually.
The Board shall re-assess determinations of independence when any new interest orrelationships are disclosed by a Director.
3.2.2 The criteria of independence shall be in accordance with guidelines as laid downin Companies Act 2013 and Reg 16(1)(b) of SEBI(Listing obligations and DisclosureRequirements) Regulations 2015.
3.2.3 The Independent Director shall abide by the "Code for Independent Directors"as specified in Schedule IV to the companies Act 2013.
1.3 Other Directorships/ Committee Memberships
3.3.1 The Board members are expected to have adequate time and expertise and experienceto contribute to effective Board performance Accordingly members should voluntarily limittheir directorships in other listed public limited companies in such a way that it doesnot interfere with their role as Director of the company. The Committee shall take intoaccount the nature of and the time involved in a Director service on other Boards inevaluating the suitability of the individual Director and making its recommendations tothe Board.
3.3.2 A Director shall not serve as director in more than 20 companies of which notmore than 10 shall be public limited companies.
3.3.3 A Director shall not serve an independent Director in more than 7 listedcompanies and not more than 3 listed companies in case he is serving as a whole-timeDirector in any listed company.
3.3.4 A Director shall not be a member in more than 10 committee or act chairman ofmore than 5 committee across all companies in which he holds directorships.
For the purpose of considering the limit of the committee Audit committee andstakeholder's relationship committee of all public limited companies whether listed ornot shall be included and all other companies including private limited companiesforeign companies and companies under section 8 of the Companies Act 2013 shall beexcluded.
Remuneration policy for Directors key managerial personnel and other employees
1.1 This policy sets out the guiding principles for the Nomination and Remunerationcommittee for recommending to the Board the remuneration of the directors key managerialpersonnel and other employees of the company.
2. Terms and Reference:
In this policy the following terms shall have the following meanings:
2.1 "Director" means a Director appointed to the Board of the company.
2.2 "key managerial personnel" means
(i) The Chief Executive Office or the managing director or the manager;
(ii) The company secretary;
(iii) The whole-time director;
(iv) The chief finance Officer; and
(v) Such other office as may be prescribed under the companies Act 2013
2.3 "Nomination and Remuneration Committee" means the committee constitutedby Board in accordance with the provisions of section 178 of the companies Act 2013 andReg 19 of SEBI (Listing obligations and Disclosure Requirements) Regulations 2015.
3.1 Remuneration to Executive Director and Key Managerial Personnel
3.1.1 The Board on the recommendation of the Nomination and Remuneration (NR) committeeshall review and approve the remuneration payable to the Executive Director of the companywithin the overall approved by the shareholders.
3.1.2 The Board on the recommendation of the NR committee shall also review and approvethe remuneration payable to the key managerial personnel of the company.
3.1.3 The Remuneration structure to the Executive Director and key managerial personnelshall include the following components:
(i) Basic pay
(ii) Perquisites and Allowances
(iii) Commission (Applicable in case of Executive Directors)
(iv) Retrial benefits
(v) Annual performance Bonus
3.1.4 The Annual plan and Objectives for Executive committee shall be reviewed by theNR committee and Annual performance Bonus will be approved by the committee based on theachievement against the Annual plan and Objectives.
3.2 Remuneration to Non Executive Directors
3.2.1 The Board on the recommendation of the Nomination and Remuneration Committeeshall review and approve the remuneration payable to the Non Executive Directors ofthe Company within the overall limits approved if any by the shareholders as perprovisions of the companies act.
3.2.2 Non Executive Directors shall be entitled to sitting fees attending themeetings of the Board and the Committees thereof. The Non- Executive Directors shall alsobe entitled to profit related commission in addition to the sitting fees.
3.3. Remuneration to other employees
3.3.1. Employees shall be assigned grades according to their qualifications and workexperience competencies as well as their roles and responsibilities in the organization.Individual remuneration shall be determined within the appropriate grade and shall bebased on various factors such as job profile skill sets seniority experience andprevailing remuneration levels for equivalent jobs.
7. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS
The Company has received a declaration from Mr.Laxminiwas Sharma Mr. K. Harish ChandraPrasad and Mrs. Shanti Sree Bolleni Independent directors of the company to the effectthat they are meeting the criteria of independence as provided in Sub-section (6) ofSection 149 of the Companies Act 2013 and Regulation 25 of SEBI (Listing Obligations andDisclosure Requirement) Regulations 2015.
8. FAMILIARISATION PROGRAMMES:
The Company familiarises its Independent Directors on their appointment as such on theBoard with the Company their roles rights responsibilities in the Company nature ofthe industry in which the Company operates etc. through familiarisation programme. TheCompany also conducts orientation programme upon induction of new Directors as well asother initiatives to update the Directors on a continuing basis. The familiarisationprogramme for Independent Directors is disclosed on the Company's websitewww.bnrsecurities.com
9. COMPOSITION OF AUDIT COMMITTEE:
I. The Audit Committee of the Company is constituted in line with the provisions ofRegulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015with the Stock Exchanges read with Section 177 of the Companies Act 2013.
II. The terms of reference of the Audit Committee include a review of thefollowing:
Overview of the Company's financial reporting process and disclosure of itsfinancial information to ensure that the financial statements reflect a true and fairposition and that sufficient and credible information is disclosed.
Recommending the appointment and removal of external auditors fixation of auditfee and also approval for payment for any other services.
Discussion with external auditors before the audit commences of the nature andscope of audit as well as post-audit discussion to ascertain any area of concern.
Reviewing the financial statements and draft audit report including quarterly /half yearly financial information.
Reviewing with management the annual financial statements before submission tothe Board focusing on:
1. Any changes in accounting policies and practices;
2. Qualification in draft audit report;
3. Significant adjustments arising out of audit;
4. The going concern concept;
5. Compliance with accounting standards;
6. Compliance with stock exchange and legal requirements concerning financialstatements and
7. Any related party transactions
Reviewing the company's financial and risk management's policies.
Disclosure of contingent liabilities.
Reviewing with management external and internal auditors the adequacy ofinternal control systems.
Reviewing the adequacy of internal audit function including the auditcharacter the structure of the internal audit department approval of the audit plan andits execution staffing and seniority of the official heading the department reportingstructure coverage and frequency of internal audit.
Discussion with internal auditors of any significant findings and follow-upthereon.
Reviewing the findings of any internal investigations by the internal auditorsinto the matters where there is suspected fraud or irregularity or a failure of internalcontrol systems of a material nature and reporting the matter to the Board.
Looking into the reasons for substantial defaults in payments to the depositorsdebenture holders shareholders (in case of non-payment of declared dividends) andcreditors.
Reviewing compliances as regards the Company's Whistle Blower Policy.
III. The previous Annual General Meeting of the Company was held on 06.08.2016 andChairman of the Audit Committee attended previous AGM.
IV. The composition of the Audit Committee and the attendance of each member of theAudit Committee are given below:
The Company has complied with all the requirements of Regulation 27 of SEBI (LODR)Regulations 2015 relating to the composition of the Audit Committee. During the financialyear 2016-2017 (4) four meetings of the Audit Committee were held on the 25.05.201611.08.2016 11.11.2016 11.02.2017.
During the year the audit committee was reconstituted in the Board Meeting held on11.02.2017.
The details of the composition of the Committee post reconstitution and attendance ofthe members at the meetings are given below:
|Name ||Designation ||Category ||No. of Meetings held ||No. of Meetings attended |
|Lakshmi Nivas Sharma ||Chairman ||NED(I) ||4 ||4 |
|Harish Chandra Prasad ||Member ||NED(I) ||4 ||4 |
|Shanti Sree Bolleni ||Member ||NED(I) ||4 ||4 |
|Hari Narayan Rathi* ||Member ||MD ||4 ||0 |
NED (I) : Non Executive Independent Director
MD : Managing Director
*Appointed as member in the committee on 11.02.2017
V. NOMINATION & REMUNERATION COMMITTEE
During the year the Nomination and Remuneration committee was reconstituted in theBoard Meeting held on 11.02.2017.
The details of composition of the Committee post reconstitution are given below:
|Name ||Designation ||Category ||No. of Meetings held ||No. of Meetings attended |
|Harishchandra Prasad ||Chairman ||NED(I) ||1 ||1 |
|Laxminiwas Sharma ||Member ||NED(I) ||1 ||1 |
|Shanti Sree Bolleni ||Member ||NED(I) ||1 ||1 |
|Hari Narayan Rathi* ||Member ||MD ||1 ||0 |
NED (I): Non Executive Independent Director
MD: Managing Director
*Appointed as member in the committee on 11.02.2017
Terms of reference:
The main term of reference of the Committee is to approve the fixation/revision ofremuneration of the Managing Director/Whole Time Director of the Company and whileapproving:
To take into account the financial position of the Company trend in theindustry appointee's qualification experience past performance past remuneration etc.
To bring out objectivity in determining the remuneration package while strikinga balance between the interest of the Company and the Shareholders.
The objectives of the remuneration policy are to motivate Directors to excel in theirperformance recognize their contribution and retain talent in the organization and rewardmerit.
The remuneration levels are governed by industry pattern qualifications and experienceof the Directors responsibilities shouldered individual performance etc.
The details of remuneration paid to the Executive and Non Executive Directors for thefinancial year 2016-17 are given below:
Mr. Hari Narayan Rathi - Managing Director and Mr. Chetan Rathi -Whole time directorhave drawn a remuneration of Rs. 3149275/- and Rs. 1770000/- for the year ended31.03.2017 respectively.
None of the Directors is drawing any Commission Perquisites Retirement benefits etc.
VI. STAKEHOLDERS RELATIONSHIP COMMITTEE
The Details of composition of the Committee are given below:
|Name ||Designation ||Category |
|Mrs. Shanti Sree Bolleni ||Chairperson ||NED(I) |
|Mr. Laxminiwas Sharma ||Member ||NED(I) |
|Mr. K. Harishchandra Prasad ||Member ||NED(I) |
|Mr. Chetan Rathi ||Member ||ED |
NED (I): Non Executive Independent Director
ED: Executive Director
The Committee has been delegated with the following powers:
To redress shareholder and investor complaints relating to transfer of sharesDematerialization of Shares non-receipt of Annual Reports non-receipt of declareddividend and other allied complaints.
To approve transfer transmission and issue of duplicate / fresh sharecertificate(s)
Consolidate and sub-division of share certificates etc.
To redress approve and dispose off any other complaints transactions andrequests etc. received from any shareholder of the company and investor in general.
The Board has delegated the power to process the transfer and transmission of shares tothe Registrar and Share Transfer Agents who process share transfers within a week oflodgement in the case of shares held in physical form.
The Company has designated an exclusive e-mail ID firstname.lastname@example.org for complaints/grievances.
VII. RISK MANAGEMENT COMMITTEE AS PER REGULATION 21 OF SEBI (LODR) REGULATIONS 2015
The Details of composition of the Committee are given below:
|Name ||Designation ||Category |
|Mr. K. Harishchandra Prasad ||Chairman ||NED(I) |
|Mrs. Shanti Sree Bolleni ||Member ||NED(I) |
|Mr. Chetan Rathi ||Member ||ED |
NED (I) : Non Executive Independent Director
ED : Executive Director
Role and Responsibilities of the Committee includes the following:
Framing of Risk Management Plan and Policy
Overseeing implementation of Risk Management Plan and Policy
Monitoring of Risk Management Plan and Policy
Validating the process of risk management
Validating the procedure for Risk minimisation.
Periodically reviewing and evaluating the Risk Management Policy and practiceswith respect to risk assessment and risk management processes.
Continually obtaining reasonable assurance from management that all known andemerging risks have been identified and mitigated or managed.
B) RISK MANAGEMENT POLICY:
The Company follows a comprehensive system of Risk Management. The Company has adopteda procedure for assessment and minimization of probable risks. It ensures that all therisks are timely defined and mitigated in accordance with the well-structured riskmanagement process.
10. COMPLIANCE WITH SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS2015:
In compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the Company has framed the following policies which are available on Company'swebsite i.e. www.bnrsecurities.com
i. Board Diversity Policy
ii. Policy on preservation of Documents
iii. Risk Management Policy
iv. Nomination and Remuneration Policy
v. Policy on material subsidiaries
vi Related party transaction policy.
11. VIGIL MECHANISM:
Vigil Mechanism Policy has been established by the Company for directors and employeesto report genuine concerns pursuant to the provisions of section 177(9) & (10) of theCompanies Act 2013 and Regulation 22 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. The same has been placed on the website of theCompany.
12. DIRECTOR'S RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and the reviews performed by Management and the relevant BoardCommittees including the Audit Committee the Board is of the opinion that the Company'sinternal financial controls were adequate and effective during the financial year 2016-17.Accordingly pursuant to Section 134(5) of the Companies Act 2013 the Board ofDirectors to the best of their knowledge and ability confirm that:
(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) The Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;
(c) The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) The Directors had prepared the annual accounts on a going concern basis; and
(e) The Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
(f) The Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
13. STATUTORY COMPLIANCE:
The Company has complied with the required provisions relating to statutory compliancewith regard to the affairs of the Company in all respects.
14. UNPAID / UN CLAIMED DIVIDEND:
In terms of the provisions of the Companies Act the Company is obliged to transferdividends which remain unpaid or unclaimed for a period of seven years from thedeclaration to the credit of the Investor education and Protection Fund established by theCentral Government. Accordingly the Members are hereby informed that the 7 years periodfor payment of the dividend pertaining to financial year 2009-2010 will expire on 22ndOctober 2017 and thereafter the amount standing to the credit in the said accountwill be transferred to the "Investor Education and Protection Fund" of theCentral Government
The details of Dividend of earlier years remain unclaimed by the shareholders as on31.03.2017 are as given below:
|Financial Year ||Date of Declaration of Dividend ||Last Date of Claiming the Dividend ||Unclaimed amount as on 31.03.2017 (in Rupees) ||Due date for transfer to Investor Education and Protection Fund (IEPF) |
|2009-10 ||24.09.2010 ||23.09.2017 ||202053 ||22.10.2017 |
|2010-11 ||14.09.2011 ||13.09.2018 ||216348 ||12.10.2018 |
|2011-12 ||31.07.2012 ||30.07.2019 ||189056 ||29.08.2019 |
|2012-13 ||08.08.2013 ||07.08.2020 ||191519 ||06.09.2020 |
|2013-14 ||12.07.2014 ||11.07.2021 ||251797 ||10.08.2021 |
|2014-15 ||18.07.2015 ||17.07.2022 ||310794 ||16.08.2022 |
|2015-16 ||06.08.2016 ||05.08.2023 ||188400 ||04.09.2023 |
Pursuant to provisions of Section 124 of Companies Act 2013 the unclaimed dividendwithin the last date mentioned for the respective years will be transferred to InvestorEducation and Protection Fund (IEPF) established by Government of India pursuant toSection 125 of the Companies Act 2013.
15. INFORMATION ABOUT THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THESUBSIDIARIES / ASSOCIATES/ JOINT VENTURES:
M/s. B.N. Rathi Comtrade Private Limited and M/s. B.N. Rathi Industries Private Limitedare wholly owned subsidiaries of the company.
16. DETAILS IN REPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB-SECTION (12) OF SECTION143 OTHER THAN THOSE WHICH ARE REPORTABLE TO CENTRAL GOVERNMENT.
There were no frauds reported by the auditors as per section 143 (12)
The company has not transferred any amount to the reserves.
18. DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONS WHO WERE APPOINTED OR HAVE RESIGNEDDURING THE YEAR.
During the year there were no appointments or resignation of Directors and KeyManagerial Persons.
19. THE NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINTVENTURES OR ASSOCIATE COMPANIES DURING THE YEAR.
No companies have become or ceased to be the subsidiaries joint ventures or associatecompanies of the company.
20. EXTRACT OF ANNUAL RETURN:
As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in MGT9 as a part of this Annual Report (FORMAT IN ANNEXURE I)
21. STATUTORY AUDITORS:
M/s. Seshachalam & Co Statutory Auditors of the company retires at the ensuingannual general meeting and is eligible for reappointment. As required under the provisionsof Section 139 of the Companies Act 2013 the Company has received a written consent fromthe auditors to their reappointment and a certificate to the effect that theirre-appointment if made would be in accordance with the Companies Act 2013 and the rulesframed there under and that they have satisfied the criteria provided in Section 141 ofthe Companies Act 2013.
The Board recommends the re-appointment of M/s. Seshachalam & Co. as the statutoryauditors of the Company from the conclusion of this Annual General meeting till theconclusion of the next Annual General Meeting.
22. INDIAN ACCOUNTING STANDARDS
The Ministry of Corporate Affairs vide its notification dated 16th February2015 has notified the Companies(Indian Accounting Standards) Rules 2015. In pursuance ofthe said notification the Company will adopt Indian Accounting Standards with effect from01st April 2017. The implementation of Indian Accounting Standards (IAS) is amajor change process for which the Company has set up a dedicated team and is providingdesired resources for its completion within the time frame. The impact of the change onadoption of said IAS is being assessed.
23. SECRETARIAL AUDIT:
Pursuant to the provisions of Section 134(3) (f) & Section 204 of the CompaniesAct 2013 Secretarial audit report as provided by M/s. S. S. Reddy & AssociatesPracticing Company Secretaries is annexed to this Report as an annexure.
24. QUALIFICATIONS IN AUDIT REPORTS:
Explanations or comments by the Board on every qualification reservation or adverseremark or disclaimer made -
(a) Statutory Auditors Report:
The Board has duly reviewed the Statutory Auditor's Report on the Accounts for the yearended March 31 2017 and has noted that the same does not have any reservationqualification or adverse remarks. However the Board decided to further strengthen theexisting system and procedures to meet all kinds of challenges and growth in the marketexpected in view of the robust capital market in the coming years.
(b) Secretarial Audit Report:
The Board has duly reviewed the Secretarial Audit Report on the Compliances accordingto the provisions of section 204 of the Companies Act 2013 and the same does not have anyreservation qualifications or adverse remarks.
25. CONSOLIDATED FINANCIAL STATEMENTS
In compliance with the provisions of the Companies Act 2013 and the AccountingStandards AS-21 and AS-27 on consolidated financial statements the Directors haveprovided the consolidated financial statements for the financial year ended March 31 2017which forms part of the Annual Report.
26. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:
The required information as per Sec.134 of the Companies Act 2013 is providedhereunder:
A. Conservation of Energy:
The Company's operations are not energy intensive. Adequate measures have been taken toconserve energy wherever possible by using energy efficient computers and purchase ofenergy efficient equipment.
B. Technology Absorption:
1. Research and Development (R&D): NIL
2. Technology absorption adoption and innovation: NIL
C. Foreign Exchange Earnings and Out Go:
Foreign Exchange Earnings: NIL
Foreign Exchange Outgo: NIL
27. DETAILS RELATING TO DEPOSITS COVERING THE FOLLOWING:
The Company has not accepted any deposits falling within the meaning of Sec.73 74& 76 of the Companies Act 2013 read with the Rule 8(v) of Companies (Accounts) Rules2014 during the financial year under review.
28. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS:
During the period under review there were no significant and material orders passed bythe regulators or Courts or Tribunals impacting the going concern status and the company'soperations in future.
29. DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS:
The Company has well established procedures for internal control across its variouslocations commensurate with its size and operations. The organization is adequatelystaffed with qualified and experienced personnel for implementing and monitoring theinternal control environment. The internal audit function is adequately resourcedcommensurate with the operations of the Company and reports to the Audit Committee of theBoard.
The Board has appointed M/s. Penmetsa & Associates Chartered AccountantsHyderabad as internal Auditors in its meeting held on 15th May 2017. Deviations arereviewed periodically and due compliance ensured. Summary of Significant AuditObservations along with recommendations and its implementations are reviewed by the AuditCommittee and concerns if any are reported to Board.
The properties and assets of the Company are adequately insured.
31. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
The company has not given loans Guarantees or made any investments during the yearunder review.
32. CREDIT & GUARANTEE FACILITIES:
The Company has been availing facilities of Credit and Guarantee as and when requiredfor the business of the Company from HDFC Bank Ltd and Induslnd Bank Ltd. PersonalGuarantees were given by the Mr. Hari Narayan Rathi Managing Director and Mr. ChetanRathi Whole-Time Director without any consideration for obtaining Bank Guarantees.
33. CORPORATE SOCIAL RESPONSIBILTY POLICY:
Since the Company does not have the net worth of Rs. 500 Crore or more or turnover ofRs. 1000 Crore or more or a net profit of Rs. 5 Crore or more during the financial yearsection 135 of the Companies Act 2013 relating to Corporate Social Responsibility is notapplicable and hence the Company need not adopt any Corporate Social ResponsibilityPolicy.
34. RELATED PARTY TRANSACTIONS:
All contracts/arrangements/transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on arm's lengthbasis.
The Directors draw attention of the members to Note 29 to the financial statement whichsets out related party disclosures.
35. FORMAL ANNUAL EVALUATION:
As per section 149 of the Companies Act 2013 read with clause VII (1) of the scheduleIV and rules made thereunder the independent directors of the company had a meeting on11.02.2017 without attendance of non-independent directors and members of management. Inthe meeting the following issues were taken up:
(a) Review of the performance of non-independent directors and the Board as a whole;
(b) Review of the performance of the Chairperson of the company taking into accountthe views of executive directors and non-executive directors;
(c) Assessing the quality quantity and timeliness of flow of information between thecompany management and the Board that is necessary for the Board to effectively andreasonably perform their duties.
The meeting also reviewed and evaluated the performance of non-independent directors.The company has 2 (two) non-independent directors namely:
i) Shri Hari Narayan Rathi Managing Director
ii) Shri Chetan Rathi Whole-Time Director cum CFO.
The meeting recognized the significant contribution made by Shri. Hari Narayan Rathiand Shri. Chetan Rathi non- independent directors in the shaping up of the company andputting the company on accelerated growth path. They devoted more time and attention tobring up the company to the present level.
The meeting also reviewed and evaluated the performance the Board as whole in termsof the following aspects:
Preparedness for Board/Committee meetings
Attendance at the Board/Committee meetings
Guidance on corporate strategy risk policy corporate performance andoverseeing acquisitions and disinvestments.
Monitoring the effectiveness of the company's governance practices
Ensuring a transparent board nomination process with the diversity ofexperience knowledge perspective in the Board.
Ensuring the integrity of the company's accounting and financial reportingsystems including the independent audit and that appropriate systems of control are inplace in particular systems for financial and operational control and compliance withthe law and relevant standards.
The meeting also noted that Shri. Laxminiwas Sharma Chairman of the company hasperformed exceptionally well by attending board meetings regularly by taking activeparticipation in the discussion of the agenda and by providing required guidance from timeto time to the company for its growth etc.
It was noted that the Board Meetings have been conducted with the issuance of propernotice and circulation of the agenda of the meeting with the relevant notes thereon.
36. DISCLOSURE ABOUT COST AUDIT:
Cost Audit is not applicable to the Company.
37. RATIO OF REMUNERATION TO EACH DIRECTOR:
Under section 197(12) of the Companies Act 2013 and Rule 5(1)(2) & (3) of theCompanies (Appointment & Remuneration) Rules 2014 read with Schedule V of theCompanies Act 2013 a remuneration of Rs. 1770000/- is being paid to Shri. Chetan RathiWhole-Time director of the Company and a remuneration of Rs. 31 49 275/- is being paidto Shri. Hari Narayan Rathi Managing Director of the Company.
38. LISTING WITH STOCK EXCHANGES:
The Company confirms that it has paid the Annual Listing Fees for the year 2017-2018 toBombay Stock Exchange where the Company's Shares are listed.
39. CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:
Since the paid up capital of the Company is less than Rs. 10 Crores and Net worth ofthe Company is less than Rs. 25 Crores Corporate Governance is Not Applicable.
40. INDUSTRY BASED DISCLOSURES AS MANDATED BY THE RESPECTIVE LAWS GOVERNING THE COMPANY
The Company is not a NBFC Housing Companies etc. and hence Industry based disclosuresis not required.
41. SECRETARIAL STANDARDS
EVENT BASED DISCLOSURES
During the year under review the Company has not taken up any of the followingactivities:
1. Issue of sweat equity share: NA
2. Issue of shares with differential rights: NA
3. Issue of shares under employee's stock option scheme: NA
4. Disclosure on purchase by company or giving of loans by it for purchase of itsshares: NA
5. Buy back shares: NA
6. Disclosure about revision: NA
7. Preferential Allotment of Shares: NA
42. Non-Executive Directors' Compensation and Disclosures
None of the Independent / Non-Executive Directors has any pecuniary relationship ortransactions with the Company which in the Judgment of the Board may affect theindependence of the Directors.
43. CEO/ CFO Certification
The Managing Director cum CEO and CFO certification of the financial statements for theyear 2016-17 is annexed in this Annual Report.
44. EMPLOYEE RELATIONS:
The Directors are pleased to record their sincere appreciation of the contribution bythe staff at all levels in the improved performance of the Company.
None of the employees is drawing a remuneration of Rs. 10200000/- and above perannum or Rs.850000/- and above in aggregate per month the limits prescribed underSection 197 of the Companies Act 2013.
45. MEANS OF COMMUNICATION
1. Quarterly and half yearly reports are published in the newspapers.
2. Management Discussion and Analysis forms part of this Annual Report.
46. BOARD EVALUATION:
Pursuant to the applicable provisions of the Companies Act 2013 and SEBI ListingRegulations the Board has carried out an Annual Evaluation of its own performanceperformance of the Directors and the working of its Committees. The Board's functioningwas evaluated on various aspects including inter alia degree of fulfilment of keyresponsibilities Board structure and composition establishment and delineation ofresponsibilities to various Committees effectiveness of Board processes information andfunctioning.
The performance of the Board was evaluated based on a criterion that includes aspectslike composition and structure of the Board effectiveness of the Board processinformation and functioning of the Board etc. Evaluation of the Committees performance wasbased on the criteria like composition its terms of the reference and effectiveness ofcommittee meetings etc. Individual Director's performance evaluation is based on theirpreparedness on the issues to be discussed meaningful and constructive discussions andtheir contribution to the Board and Committee meetings. The Chairperson was evaluatedmainly on key aspects of his role. These performance exercises were conducted seekinginputs from all the Directors / Committee Members wherever applicable.
The evaluation process was carried out internally in FY 2016- 2017 each Board membercompleted a questionnaire on the other Board members for peer evaluation and aquestionnaire to provide feedback on Board its Committees and their functioning. TheDirectors were evaluated on parameters such as level of engagement and participation flowof information independence of judgment conflicts resolution attendance contributionat Board/Committee Meetings and guidance/support to the Management outside Board/Committee Meetings and their contribution in enhancing the Board's overall effectiveness.
The Nomination and Remuneration Committee reviewed the performance of the individualdirectors. A separate meeting of the individual directors was also held to review theperformance of Non-independent directors performance of the Board as a whole andperformance of the Chairperson of the Company taking into account the views of all theDirectors.
The peer rating on certain parameters positive attributes and improvement areas foreach Board member was also provided to them in a confidential manner. The feedbackobtained from the interventions was discussed in detail and where required independentand collective action points for improvement were put in place.
47. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at workplace (Prevention Prohibition and Redressal)Act 2013. Internal Complaint Committee (ICC) has been set up to redress complaintsreceived regarding sexual harassment. All employees are covered under this policy.
The following is the summary of sexual harassment complaints received and disposedduring the calendar year.
|No. of complaints received ||: Nil |
|No. of complaints disposed off ||: Nil |
48. DETAILS ON GENERAL BODY MEETINGS:
A. LOCATION DATE AND TIME OF LAST THREE AGMS AND SPECIAL RESOLUTIONS THERE AT ASUNDER:
|Financial Year ||Date ||Time ||Location ||Special / Ordinary Resolution |
|2015-16 ||06/08/2016 ||10.00 A.M ||Hotel Mercure Hyderabad KCP 6-3-551 Somajiguda Hyderabad - 500 082. ||1. Re-appointment of Mr. Hari Narayan Rathi Managing Director. |
|2014-15 ||18.07.2015 ||10.00 A.M. ||Hotel Katriya Raj Bhavan Road Somajiguda Hyderabad - 500 082. ||1. Appointment of Mrs. Shanti Sree Bolleni as Independent director of the Company |
| || || || ||2. Re-appointment of Mr. Chetan Rathi as Whole-Time Director |
| || || || ||3. To issue shares on Rights Issue. |
| || || || ||4. Amendment of Articles of Association of the Company. |
|2013-14 ||12.07.2014 ||10.00 A.M ||Hotel Inner Circle Raj Bhavan Road Somajiguda Hyderabad - 500 082. ||1. Appointment of Mr. Laxminiwas Sharma as Independent director of the Company. |
| || || || ||2. Appointment of Mr. K Harishchandra Prasad as Independent Director of the Company. |
| || || || ||3. Appointment of Mr.T.S. Suryanarayana Murthy as Independent Director of the Company. |
B. ATTENDANCE OF EACH DIRECTOR AT BOARD MEETING HELD DURING THE YEAR AND LAST ANNUALGENERAL MEETING :
|Name of Director ||Category of Directorship ||Attendance Particulars |
| || ||Last AGM 06.07.2016 ||Board meetings '16-17' |
| || || ||held ||attended |
|Mr. Laxminiwas Sharma ||Non Executive Chairman & Independent Director ||Yes ||4 ||4 |
|Mr. Hari Narayan Rathi ||Managing Director ||Yes ||4 ||4 |
|Mr. K. Harishchandra Prasad ||Non Executive & Independent Director ||Yes ||4 ||4 |
|Mrs. Shanti Sree Bolleni ||Non Executive & Independent Director ||No ||4 ||3 |
|Mr. Chetan Rathi ||Whole-Time Director Cum CFO ||Yes ||4 ||4 |
C. PASSING OF RESOLUTIONS BY POSTAL BALLOT
There were no resolutions passed by the Company through Postal Ballot during thefinancial year 2016-17.
The Directors wish to place on record their appreciation of the contribution made bythe employees at all levels to the continued growth and prosperity of the Company.
The Directors also wish to place on record their appreciation of business constituentsbanks and other financial institutions and shareholders of the Company SEBI BSE NSEMCX NSDL CDSL Canara Bank HDFC Bank etc. for their continued support for the growth ofthe Company.
| ||For and on behalf of the Board |
| ||B.N. Rathi Securities Limited |
|Place : Hyderabad ||Laxminiwas Sharma |
|Date : 15.05.2017 ||Chairman |
Certificate of Code of Conduct for the year 2016-17
I Hari Narayan Rathi Managing Director of the Company do hereby declare that thedirectors and senior management of the Company have exercised their authority and powersand discharged their duties and functions in accordance with the requirements of the codeof conduct as prescribed by the company and have adhered to the provisions of the same.
| ||For and on behalf of the Board |
| ||For B. N. Rathi Securities Limited |
|Place : Hyderabad ||Hari Narayan Rathi |
|Date : 15.05.2017 ||Managing Director |