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R G F Capital Markets Ltd.

BSE: 539669 Sector: Financials
NSE: N.A. ISIN Code: INE684D01025
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R G F Capital Markets Ltd. (RGFCAPITAL) - Director Report

Company director report

TO THE MEMBERS

Your Directors have pleasure in presenting their Annual Report together with theAudited Accounts of the Company for the Year ended March 31 2016.

1. FINANCIAL RESULTS:

(Rs. in Lacs)

Particulars March 31 2016 March 31 2015
Revenue from Operations 74.07 82.66
Other Income 1.80 0.59
Total 75.87 83.25
Profit before depreciation & taxation & exceptional item 9.08 24.33
Less: Depreciation 5.36 7.86
Add : exceptional Item - -
Profit Before Tax 3.72 16.47
Less: Provision for taxation 1.15 5.08
Add: Prior period adjustment - 6.36
Profit after taxation 2.57 17.75
Add: Balance brought forward from previous year (79.81) (87.82)
Less: Timing Difference 0.31 9.74
Less : Fixed Assets Written Off - -
Less : Provision for Standard Assets 0.41 -
Surplus available for appropriation 2.57 17.75
Balance carried to Balance sheet (77.96) (79.81)

Due to the accumulated loss in the balance Sheet the company proposes to retain theBalance in the profit and loss account without any making any appropriation.

OPERATIONAL REVIEW:

During the year under review the turnover declined to 75.87 Lacs in comparison to thatof the previous year 83.25 Lacs . Profit before depreciation and taxation was Rs. 9.08lacs against Rs. 24.33 Lacs in the previous year. After providing for taxation of Rs. 1.15Lacs & Rs 5.08 Lacs depreciation of Rs. 5.36 Lacs & 7.86 Lacs respectively thenet profit of the Company for the year under review after considering income fromexceptional item was placed at Rs. 2.57 Lacs as against Rs. 17.75 lacs in the previousyear.

DIVIDEND:

In view of Accumulated Loss in the Balance Sheet your directors do not recommend anydividend for the year under operation.

SHARE CAPITAL:

The paid up equity capital as on March 31 2016 was Rs 1500.24 Lakhs. The company hasnot issued shares with differential voting rights nor granted stock options nor sweatequity. As on 31ST March 2016 none of the Directors hold any instrument convertible intoequity shares of the company .

FINANCE:

Cash and cash equivalents as at March 31 2016 was Rs. 36.70 lakhs. The companycontinues to focus on judicious management of its working capital Receivablesinventories and other working capital parameters were kept under strict check throughcontinuous monitoring.

FIXED DEPOSITS:

The Company being a Non Banking Financial Corporation (NBFC) has not accepted depositsand as such no amount on account of principal or interest on Public Deposits wasoutstanding as on the date of Balance Sheet.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

Being a NBFC Company Section 186 of Companies Act 2013 is not applicable to theCompany.

The details of the investments made by company is given in the notes to the financialstatements.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit function isdefined by the Audit Committee in consultation with the Statutory Auditor of the Company.To maintain its objectivity and independence the Internal Audit function reports to theChairman of the Audit Committee of the Board & to the Chairman & ManagingDirector.

The Internal Auditor monitors and evaluates the efficacy and adequacy of internalcontrol system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company.

Based on the report of internal audit function process owners undertake correctiveaction in their respective areas and thereby strengthen the controls. Significant auditobservations and recommendations along with corrective actions thereon are presented tothe Audit Committee of the Board.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

Your Company does not have the requisite Net Worth nor has it achieved the requisiteturnover nor it has the requisite net profit for the year for triggering theimplementation of "corporate social responsibility" (CSR) .

CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION:

Your Company is a Non Banking Finance Company hence information regarding disclosure ofconservation of energy is not applicable to it. However as a part of national interest itensures that energy consumption is kept at minimum. There are no technology involved asthe Company is a Non Banking Finance Company.

FOREIGN EXCHANGE EARNINGS AND OUT-GO :

During the period under review the Company has NIL foreign exchange earnings/foreignexchange out flow.

INDUSTRIAL RELATIONS:

During the year under review your Company enjoyed cordial relationship with employeesat all levels.

DIRECTORS:

For the Financial Year under review Mr. Sujit Kumar Panda (DIN: 06873319) is liable toretire by rotation.

Mrs. Anushri Pal was appointed as the Woman Director on the Board of the Company on 21stJuly 2015 whose appointment was regularized in the Annual general Meeting held on30th September 2015.

Based on the Confirmation received none of the Director of the Company is disqualifiedfor appointment under the applicable provisions of the Companies Act 2013 .

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary declaration from each independent director underSection 149(7) of the Companies Act 2013 that they meet the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and Clause 49 of the ListingAgreement and applicable regulations of new Listing Agreement.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the ListingAgreement and applicable regulations of new Listing Agreement the Board has carried outan evaluation of its own performance the directors individually as well as the evaluationof the working of its Audit Appointment & Remuneration Committees.

REMUNERATION POLICY

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Remuneration Policy is stated in the Corporate Governance Report.

MEETINGS

A calendar of Meetings is prepared and circulated in advance to the Directors. Duringthe year Seven (7) Board Meetings and Four (4) Audit Committee & StakeholderRelationship Committee Meetings were convened and held. The details of which are given inthe Corporate Governance Report. The intervening gap between the Meetings was within theperiod prescribed under the Companies Act 2013.

DIRECTOR’S RESPONSIBILITY STATEMENT:

In terms of Section 134 (5) of the Companies Act 2013 the directors would like tostate that:

i) In the preparation of the annual accounts the applicable accounting standards havebeen followed.

ii) The directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were 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 or loss of the Company for the year under review.

iii) The directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities.

iv) The directors have prepared the annual accounts on a going concern basis.

v) The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

vi) The directors had devised proper system to ensure compliance with the provisions ofall applicable laws and that such system were adequate and operating effectively.

RELATED PARTY TRANSACTIONS:

All Related party transactions that were entered into during the financial year were onan arms length basis and in the ordinary course of business. There are no materialsignificant related party transactions made by the Company during the year that would haverequired shareholder approval under applicable clauses and regulations of the ListingAgreement. All related party transactions are reported to the Audit Committee. Priorapproval of the Audit Committee is obtained on a yearly basis for the transactions whichare planned and/ or repetitive in nature and omnibus approvals are taken within limitslaid down for unforeseen transactions. The disclosure under Section 134(3)(h) of theCompanies Act 2013 read with Rule 8(2) of the Companies (Accounts) Rules 2014 is notapplicable.

The details of the transactions with related parties during 2015-16 are provided in theaccompanying financial statements.

None of the Directors had any pecuniary relationship or transactions with the Companyduring the year under review.

SUBSIDIARY COMPANIES:

The Company does not have any subsidiary.

CODE OF CONDUCT:

The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all employees in the course of day to day business operations ofthe company. The Company believes in "Zero Tolerance" against briberycorruption and unethical dealings / behaviors of any form and the Board has laid down thedirectives to counter such acts. The code laid down by the Board is known as "code ofbusiness conduct" which forms an Appendix to the Code. The Code has been posted onthe Company’s website .

The Code lays down the standard procedure of business conduct which is expected to befollowed by the Directors and the designated employees in their business dealings and inparticular on matters relating to integrity in the work place in business practices andin dealing with stakeholders. The Code gives guidance through examples on the expectedbehavior from an employee in a given situation and the reporting structure.

All the Board Members and the Senior Management personnel have confirmed compliancewith the Code. All Management Staff were given appropriate training in this regard.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company has a vigil mechanism to deal with instance of fraud and mismanagement ifany. In staying true to our values of Strength Performance and Passion and in line withour vision of being the respected companies in Corporate World the Company is committedto the high standards of Corporate Governance and stakeholder responsibility.

The Company has a Framed a Risk and Management Policy to deal with instances of fraudand mismanagement if any. The FRM Policy ensures that strict confidentiality ismaintained whilst dealing with concerns and also that no discrimination will be meted outto any person for a genuinely raised concern.

A high level Committee has been constituted which looks into the complaints raised. TheCommittee reports to the Audit Committee and the Board.

PREVENTION OF INSIDER TRADING:

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and designated employees of theCompany. The Code requires pre-clearance for dealing in the Company’s shares andprohibits the purchase or sale of Company shares by the Directors and the designatedemployees while in possession of unpublished price sensitive information in relation tothe Company and during the period when the Trading Window is closed. The Board isresponsible for implementation of the Code.

All Board Directors and the designated employees have confirmed compliance with theCode.

AUDITOR’S REPORT/ SECRETARIAL AUDIT REPORT:

The observation made in the Auditors’ Report read together with relevant notesthereon are self explanatory and hence do not call for any further comments under Section134 of the Companies Act 2013.

As required under section 204 (1) of the Companies Act 2013 the Company has obtained asecretarial audit report. Certain observations made in the report. However the companywould ensure in future that all the provisions are complied to the fullest extent.

AUDITORS:

Pursuant to the Provisions of SEC 139 of the Companies Act 2013 and the rules madethere under Auditors C. Ghatak & Co. Chartered Accountants Kolkata were appointedas statutory auditors of the Company from the conclusion of the annual general meeting(AGM) of the Company held on September 29TH 2016 till the conclusion of theannual general meeting (AGM) of the Company to be held in the year 2017.

SECRETARIAL AUDIT:

Pursuant to provisions of section 204 of the Companies Act 2013 and The Companies(Appointment and Remunerationof Managerial Personnel) Rules 2014 the company hasappointed Chetna Gupta & Associates a firm of company Secretaries in practice toundertake the Secretarial Audit of the Company. The Secretarial Audit report is annexedherewith as "Annexure A"

EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as " Annexure B".

BUSINESS RISK MANAGEMENT:

Pursuant to section 134 (3) (n) of the Companies Act 2013 & theSEBI listingagreement the company has constituted a business risk management committee. The detailsof the committee and its terms of reference are set out in the corporate governance reportforming part of the Boards report.

At present the company has not identified any element of risk which may threaten theexistence of the company.

DISCLOSURES AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules there under for prevention andredressal of complaints of sexual harassment at workplace.

PARTICULARS OF EMPLOYEES: (Rule 5(2) & Rule 5(1))

The information required pursuant to Section 197 read with rule 5 of the Companies(Appointment and Remunerationof Managerial Personnel) Rules 2014 in respect of employeesof the Company will be provided upon request. In terms of Section 136 of the Act thereports and accounts are being sent to the members and others entitled thereto excludingthe information on employees’ particulars which is available for inspection by themembers at the Registered office of the company during business hours on working days ofthe company up to the date of ensuing Annual General Meeting. If any member is interestedin inspecting the same such member may write to the company secretary in advance.

a. The ratio of remuneration of each director to the median remuneration of theemployees of the company for the financial year

NON EXECUTIVE DIRECTORS RATIO TO MEDIAN REMUNERATION
Mr. Sandip Kumar Bej --
Mr. Radha Kant Tiwari --
Mr. Sujit Kumar Panja --
EXECUTIVE DIRECTOR
Mr. Sagarmal Nahata --

b. The Percentage increase in remuneration of each Director chief executive officer chief financial officer company secretary in the company .

Director chief executive officer chief financial officer and company secretary % increase in remuneration in the financial year

There was no increase in the remuneration of Director chief executive officer chieffinancial officer. The salary of the company secretary was increased by 50%.

c. The Percentage increase in the remuneration of employees in the financial year

There was no increase in the remuneration of employees in the financial year 2015-2016

d. The Number of permanent employees in the rolls of the Company other than KMP is 9.The Employees has joined the company during the FY 15-16 is still under probation periodthey are not considered as the permanent employees for the FY 15-16.

e. The explanation on the relationship between average increase in remuneration andcompany performances :

On an average the employees received an annual increase of 10% in India. The increasein remuneration will be in line with the market trend . In order to ensure thatremuneration reflects company performance the performance pay is also linked toorganization performance apart from an individual’s performance.

f. Comparison of remuneration of the key managerial personnel against the performanceof the company

Sagarmal Nahata (Managing Director) Vivek Khandelwal (Company Secretary)
REMUNERATION IN FY 15-16 (RS IN LACS) - 3.50
REVENUE REMUNERATION 75.87
AS A % OF REVENUE PROFIT BEFORE - 4.61
TAX (PBT) (RS IN LACS) 3.72
REMUNERATION AS % OF PBT - 94.08

g. Variation in the market capitalization of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year

Financial Year Market Capitalization P/E Ratio
14-15 Nil* Nil*
15-16 Nil* Nil*

h. Percentage increase over decrease in the market quotations of the shares of theCompany in comparison to the rate at which the Company came out with the last public offer

The Share of the Company was not traded in the Financial 15-16. i. Average percentileincrease already made in the salaries of employees other than the managerial personnel inthe last financial year and its comparison with the percentile increase in the managerialremuneration and justification thereof and point out if there are any exceptionalcircumstances for increase in the managerial remuneration :

There was no increase in the remuneration of employees in the financial year 2015-2016

j. Comparison of each remuneration of the managerial personnel against the performanceof the company

Mr. Sagarmal Nahata (Managing Director)
REMUNERATION IN FY 15-16 -
(RS IN LACS)
REVENUE 75.87
REMUNERATION AS A % OF -
REVENUE
PROFIT BEFORE TAX (PBT) 3.72
(RS IN LACS)
REMUNERATION AS % OF -
PBT

k. The key parameters for any variable component of remuneration availed by theDirectors Apart from remuneration paid to the executive directors no remuneration is paidto the non executive directors of the company . l. The ratio of remuneration of thehighest paid director to that of the employees who are not directors but receiveremuneration in excess of the highest paid director during the year NONE m. Affirmationthat the remuneration is as per the remuneration policy of the company

The Company affirms remuneration is as per the remuneration policy of the company.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS

The Corporate Governance and Management Discussion & Analysis Report which form anintegral part of this Report are set out as separate Annexure together with theCertificate from the auditors of the Company regarding compliance with the requirements ofCorporate Governance as stipulated in Clause 49 of the Listing Agreement & SEBI(Listing Obligations and disclosure Requirement) Regulation 2015

ACKNOWLEDGEMENTS:

Your Company and its Directors wish to extend their sincerest thanks to the Members ofthe Company Bankers State Government Local Bodies Customers Suppliers ExecutivesStaff and workers at all levels for their continuous cooperation and assistance.

30th May 2016 For and on behalf of the
Board of Directors
Sagarmal Nahata
Managing Director