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B N Rathi Securities Ltd.

BSE: 523019 Sector: Financials
NSE: N.A. ISIN Code: INE710D01010
BSE 12:17 | 19 Apr 22.05 -1.65
(-6.96%)
OPEN

23.80

HIGH

24.45

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22.05

NSE 05:30 | 01 Jan B N Rathi Securities Ltd
OPEN 23.80
PREVIOUS CLOSE 23.70
VOLUME 226
52-Week high 31.00
52-Week low 11.00
P/E 3.06
Mkt Cap.(Rs cr) 11
Buy Price 22.05
Buy Qty 16.00
Sell Price 24.40
Sell Qty 30.00
OPEN 23.80
CLOSE 23.70
VOLUME 226
52-Week high 31.00
52-Week low 11.00
P/E 3.06
Mkt Cap.(Rs cr) 11
Buy Price 22.05
Buy Qty 16.00
Sell Price 24.40
Sell Qty 30.00

B N Rathi Securities Ltd. (BNRATHISEC) - Director Report

Company director report

To the Members

The Directors have pleasure in presenting before you the 34th Boards' Reportof the Company together with the Audited Statements of Accounts for the year ended 31stMarch 2020.

1. FINANCIAL SUMMARY/HIGHLIGHTS OPERATIONS STATE OF AFFAIRS:

The performance during the period ended 31st March 2020 has been as under:

(Rs. In Lakhs)

Particulars Standalone Consolidate
2019-20 2018-19 2019-20 2018-19
Revenue from operations 2298.43 2085.44 2367.08 2573.20
Other income 254.89 189.07 275.80 237.08
Profit/loss before Depreciation Finance Costs 306.67 222.66 304.81 252.73
Exceptional items and Tax Expense - - - -
Less: Depreciation/ Amortisation/ Impairment 20.74 14.15 21.32 14.66
Profit /loss before Finance Costs Exceptional items 285.93 208.51 283.49 238.07
and Tax Expense
Less: Finance Costs 52.84 41.37 54.79 44.47
Profit /loss before Exceptional items & Tax Expense 233.09 167.14 228.7 193.6
Add/(less): Exceptional items - - - -
Profit /loss before Tax Expense 233.09 167.14 228.6 193.6
Less: Tax Expense (Current & Deferred) 58.56 51.36 58.53 70.03
Profit /loss for the year (1) 174.53 115.78 170.15 123.56
Total Comprehensive Income/loss (2) -26.17 +5.60 -26.07 +5.59
Total (1+2) 148.46 121.38 144.08 129.15
Balance of profit /loss for earlier years 1029.12 980.65 1334.76 1278.52
Less: Transfer to Reserves - - - -
Less: Dividend paid on Equity Shares 100.80 60.48 100.80 60.48

2 . STATE OF AFFAIRS/ COMPANY'S PERFORMANCE:

The total revenue of the Company for the financial year under review on consolidatedbasis was Rs. 2642.89 lakhs as against Rs.2810.30 lakhs for the previous financial year.The company recorded a net profit of Rs.228.68 for the financial year 2019-20 as againstthe net profit of Rs. 193.60 lakhs for the previous year.

On Standalone basis the total revenue of the Company for the financial year 2019-20was Rs. 2553.32 lakhs as against Rs. 2274.51 lakhs for the previous financial year. Thenet profit for the financial year 2019-20 is Rs. 174.53 Lakhs as against the net profit ofRs. 115.79 lakhs for the previous year.

During the period under review and the date of Board's Report there was no change inthe nature of Business.

3. RESERVES:

Pursuant to provisions of Section 134 (3) (j) of the Companies Act 2013 the companyhas not proposed to transfer any amount to general reserves account of the company duringthe year under review

4. DIVIDEND:

Pursuant to the approval of the Board of Directors on February 13 2020 your Companypaid an interim dividend of Re.1/- per equity share of face value of Rs. 10/- each toshareholders who were on the register of members as on February 27 2020 being the recorddate fixed for this purpose. The Board has not recommended a final dividend and theinterim dividend of Re.1/-declared by the Board in February 2020 shall be considered asthe final dividend for the financial year 2019-20. Thus the total dividend for thefinancial year 2019-20 remains Re.1 per equity share.

5. 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.

6. MATERIAL CHANGES AND COMMITMENTS:

During the year the company obtained new membership with the Multi Commodity Exchangeto have a single membership across all the exchanges.

There were no material changes and commitments affecting financial position of thecompany between 31st March and the date of Board's Report. (i.e. 22.06.2020)

7. REVISION OF FINANCIAL STATEMENTS

There was no revision of the financial statements for the year under review.

8. AUTHROISED AND PAID UP CAPITAL OF THE COMPANY:

The Companies Authorised Capital of the Company is Rs. 60000000 divided into600000 equity shares of Rs. 10/- each. The paid up capital of the company is Rs.50400000 divided into 5040000 equity shares of Rs. 10/- each. There is no issue ofshares under differential rights employee stock options sweat equity during the year.

9. INVESTOR EDUCTION AND PROTECTION FUND (IEPF):

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 2012-13 will expire on 07.08.2020and thereafter the amount standing to the credit in the said account will be transferredto the "Investor Education and Protection Fund" of the Central Government Thedetails of Dividend of earlier years remain unclaimed by the shareholders as on 31.03.2020are as given below: (Amount in Rupees)

Financial Year Date of Declaration of Dividend Last Date of Claiming the Dividend Unclaimed amount in Rs. as on 31.03.2020 Due date for transfer to Investor Education and Protection Fund (IEPF)
2012-13 08.08.2013 07.08.2020 192868 06.09.2020
2013-14 12.07.2014 11.07.2021 254979 25.07.2021
2014-15 18.07.2015 17.07.2022 315952 16.08.2022
2015-16 06.08.2016 05.08.2023 195131 17.08.2023
2016-17 05.08.2017 04.08.2024 270100 04.09.2024
2017-18 09.08.2018 08.08.2025 149892 08.09.2025
2018-19 10.08.2019 09.08.2026 193891 09.09.2026

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.

10. TRANSFER OF SHARES AND UNPAID/UNCLAIMED AMOUNTS TO INVESTOR EDUCATION

AND PROTECTION FUND (IEPF):

Pursuant to provisions of the Companies Act 2013 read with Investor Education andProtection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 as amendedfrom time to time an amount of Rs. 190357/- pertaining to unpaid and unclaimed dividendfor the financial year 2011-12 has been transferred to IEPF during the year under report.Further 9004 shares in respect of which dividend has not been paid or claimed for sevenconsecutive years have also been transferred to IEPF.

Before effecting transfer of shares to IEPF company has informed all such memberswhose shares were liable to be transferred to IEPF during financial year 2018-19 throughletters and newspaper publication.

The details of dividend and shares transferred to IEPF unpaid and unclaimed amountslying with the Company and procedure for claiming the dividend and shares from IEPFAuthority are available on the website of the Company at the link: www.bnrsecurities.comand also on the website of Investor Education and Protection Fund Authority i.e.www.iepf.gov.in.

The last date for claiming dividend declared during financial year 2012-13 is07.08.2020 and remained unpaid is Rs. 192868. Members may forward their claims forunclaimed dividend to the Company's RTA before they are due to be transferred to IEPF. Noclaim shall lie against the Company in respect of the dividend/shares so transferred.

DETAILS OF THE NODAL OFFICER

The Company has designated Mr. M V Rao as a Nodal Officer for the purpose of IEPF.

11. DIRECTORS OR KMP APPOINTED OR RESIGNED

None of the Directors or Key Managerial Personnels have appointed nor resigned duringthe year.

12. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS

The Company has received a declaration from Mr. Laxminiwas Sharma Mr. K. HarishChandra Prasad and Mrs. Shanti Sree Bolleni Independent directors of the company to theeffect that they are meeting the criteria of independence as provided in Sub-section (6)of Section 149 of the Companies Act 2013 and under regulation 16(1)(b) read withregulation 25 of SEBI (Listing Obligations and Disclosure Requirement) Regulations 2015.

The Independent Directors have also confirmed that they have complied Company's Code ofConduct.

In terms of Regulations 25(8) of the Listing Regulations the Independent Directorshave confirmed that they are not aware of any circumstance or situation which exists ormay be reasonably anticipated that could impair or impact their ability to dischargetheir duties with an objective independent judgement and without any external influence.

During the year Independent Directors of the Company had no pecuniary relationship ortransactions with the Company other than sitting fees commission and reimbursement ofexpenses incurred by them for the purpose of attending meetings of the Board of Directorsand Committee(s).

13. BOARD MEETINGS

The Board of Directors duly met 4 (Four) times on 22.05.2019 10.08.2019 11.11.2019and 13.02.2020 and in respect of which meetings proper notices were given and theproceedings were properly recorded and signed in the Minutes Book maintained for thepurpose.

14. COMPOSITION OF AUDIT COMMITTEE

Audit committee : Terms of reference of Audit committee covers all the mattersprescribed under Regulation 18 of the Listing Regulations and Section 177 of the Act2013.

Brief Description of Terms of Reference : Overview of the Company's financialreporting process and disclosure of its financial information to ensure that the financialstatements reflect a true and fair position and that sufficient and credible informationis disclosed.

i. Oversight of the Company's financial reporting process and the disclosure of itsfinancial information to ensure that the financial statement is correct sufficient andcredible;

ii. Recommending the appointment and removal of External Auditors fixation of auditfee and approval for payment for any other services;

iii. Review and monitor the auditor's independence and performance and effectivenessof audit process.

iv. Approval of payment to statutory auditors for any other services rendered by them.

v. Review with the management and statutory auditors of the annual financial statementsbefore submission to the Board with particular reference to:

(a) Matters required to be included in the Directors' Responsibility Statement to beincluded in the Board's Report in terms of clause (c) of sub-section (3) of Section 134 ofthe Companies Act 2013;

(b) Changes if any in accounting policies and practices and reasons for the same;

(c) Major accounting entries involving estimates based on the exercise of judgment bymanagement;

(d) Significant adjustments made in the financial statements arising out of auditfindings;

(e) Compliance with listing and other legal requirements relating to financialstatements

(f) Disclosure of any related party transactions;

(g) Modified opinion

(s) in the draft audit report;

vi. Review of the quarterly and half yearly financial results with the management andthe statutory auditors;

vii. Examination of the financial statement and the auditors' report thereon;

viii. Review and monitor statutory auditor's independence and performance andeffectiveness of audit process;

ix. Approval or any subsequent modification of transactions with related parties;

x. Scrutiny of inter-corporate loans and investments;

xi. Review of valuation of undertakings or assets of the company wherever it isnecessary;

xii. Evaluation of internal financial controls and risk management systems;

xiii. Review with the management statutory auditors and the internal auditors aboutthe nature and scope of audits and of the adequacy of internal control systems; xiv.Reviewing the adequacy of internal audit function if any including the structure of theinternal audit department staffing and seniority of the official heading the departmentreporting structure coverage and frequency of internal audit;

xv. Reviewing the findings of any internal investigations by the internal auditors intomatters where there is suspected fraud or irregularity or a failure of internal controlsystems of a material nature and reporting the matter to the board;

xvi. Consideration of the reports of the internal auditors and discussion about theirfindings with the management and suggesting corrective actions wherever necessary;

xvii. Look into the reasons for any substantial defaults in payment to the depositorsdebenture-holders shareholders (in case of non-payment of declared dividend) andcreditors if any;

xviii. Review the functioning of the whistle blower mechanism;

xix. Review and monitor the end use of funds raised through public offers and relatedmatters;

xx. Approval of appointment of Chief Financial Officer after assessing thequalifications experience and background etc. of the candidate;

xxi. Frame and review policies in relation to implementation of the Code of Conduct forPrevention of Insider Trading and supervise its implementation under the overallsupervision of the Board;

xxii. Discharge such duties and functions as indicated in the Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015 theCompanies Act 2013 and the rules made thereunder from time to time.

Review of the following information:

management discussion and analysis of financial condition and results ofoperations;

statement of significant related party transactions (as defined by the auditcommittee) submitted by management;

management letters / letters of internal control weaknesses issued by thestatutory auditors;

internal audit reports relating to internal control weaknesses;

The appointment removal and terms of remuneration of the Chief InternalAuditor shall be subject to review by the Audit Committee.

Statement of deviations as per SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015

Quarterly statement of deviation(s) including report of monitoring agencyif applicable submitted to Stock Exchange(s) in terms of Regulation 32(1).

Annual statement of funds utilized for purposes other than those stated inthe offer document /prospectus / notice in terms of Regulation 32(7).

The Audit Committee of the listed holding company shall also review thefinancial statements in particular the investments made by the unlisted subsidiarycompany.

Carrying out any other function as may be referred to the Committee by theBoard.

Authority to review / investigate into any matter covered by Section 177 ofthe Companies Act 2013 and matters specified in Part C of Schedule II of the ListingRegulations.

During the financial year 2019-20 (4) four meetings of the Audit Committee were heldon the 22.05.2019 10.08.2019 11.11.2019 and 13.02.2020.

The details of the composition of the Committee and attendance of the members at themeetings are given below:

Name Designation Category No. of Meetings held No. of Meetings attended
Laxminiwas 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 4

NED (I): Non-Executive Independent Director

MD: Managing Director

15. Nomination and remuneration committee

The Nomination and Remuneration Committee (‘NRC') functions in accordance withSection 178 of the Act Regulation 19 of the Listing Regulations and its Charter adoptedby the Board. The terms of reference of the NRC includes:

Recommend to the Board the setup and composition of the Board includingformulation of the criteria for determining qualifications positive attributes andindependence of a Director.

Periodical review of composition of the Board with the objective ofachieving an optimum balance of size skills independence knowledge age gender andexperience.

Support the Board in matters related to the setup review and refresh of theCommittees.

Devise a policy on Board diversity.

Recommend to the Board the appointment or reappointment of Directors.

Recommend to the Board how the Company will vote on resolutions forappointment of Directors on the Boards of its material subsidiaries.

Recommend to the Board the appointment of Key Managerial Personnel (KMP)and executive team members.

Carry out the evaluation of every Director's performance and support theBoard and Independent Directors in the evaluation of the performance of the Board itsCommittees and individual Directors including formulation of criteria for evaluation ofIndependent Directors and the Board.

Oversee the performance review process for the KMP and executive team withthe view that there is an appropriate cascading of goals and targets across the Company.

Recommend the Remuneration Policy for the Directors KMP executive team andother employees.

On an annual basis recommend to the Board the remuneration payable toDirectors KMP and executive team of the Company.

Review matters related to remuneration and benefits payable upon retirementand severance to MD/EDs KMP and executive team.

Review matters related to voluntary retirement and early separation schemesfor the Company.

Provide guidelines for remuneration of Directors on material subsidiaries.

Recommend to the Board how the Company will vote on resolutions forremuneration of Directors on the Boards of its material subsidiaries.

Assist the Board in fulfilling its corporate governance responsibilitiesrelating to remuneration of the Board KMP and executive team members.

Oversee familiarisation programmes for Directors.

Review HR and People strategy and its alignment with the business strategyperiodically or when a change is made to either.

Review the efficacy of HR practices including those for leadershipdevelopment rewards and recognition talent management and succession planning.

Perform other activities related to the charter as requested by the Board from time toDuring the financial year 2019-20 one meeting of the NRC was held on the 13.02.2020.

Name Designation Category No. of Meetings held No. of Meetings attended
Harish Chandra Prasad Chairman NED(I) 1 1
Laxminiwas Sharma Member NED(I) 1 1
Shanti Sree Bolleni Member NED(I) 1 1

16. Stakeholder's relationship committee

Terms of reference of the committee comprise of various matters provided underRegulation 20 of the Listing Regulations and section 178 of the Act 2013 which inter-aliainclude:

(i) Resolving the grievances of the security holders of the listed entity includingcomplaints related to transfer/transmission of shares non-receipt of annual reportnon-receipt of declared dividends issue of new/duplicate certificates general meetingsetc.

(ii) Proactively communicate and engage with stockholders including engaging with theinstitutional shareholders at least once a year along with members of the Committee/Board/KMPs as may be required and identifying actionable points for implementation.

(iii) Review of measures taken for effective exercise of voting rights by shareholders

(iv) Review of adherence to the service standards adopted by the listed entity inrespect of various services being rendered by the Registrar & Share Transfer Agent.

(v) Review of the various measures and initiatives taken by the listed entity forreducing the quantum of unclaimed dividends and ensuring timely receipt of dividendwarrants/annual reports/statutory notices by the shareholders of the Company.

The Committee comprises of 4 Directors out of which 3 are independent. In the financialyear 2019-20 4 meetings of the Committee were held 22.05.2019 10.08.2019 11.11.2019and 13.02.2020. Composition of committee and member's attendance at the meetings duringthe year are as under:

Name Designation Category No. of Meetings held No. of Meetings attended
Mrs. Shanti Sree Bolleni Chairperson NED(I) 4 4
Mr. Laxminivas Sharma Member NED(I) 4 4
Mr. Harish Chandra Prasad Member NED(I) 4 4
Mr. Chetan Rathi Member ED 4 3

17. RISK MANAGEMENT COMMITTEE

The Company has an effective risk management procedure which is governed at thehighest level by the Board of Directors. However to further strengthen & streamlinethe procedures about risk assessment and minimization procedures the Board of Directorsvoluntarily constituted a Board level Risk Management Committee (RMC).

A) Composition:

The Details of composition of the Committee are given below:

Name Designation Category
Mr. K. Harishchandra Prasad Chairman NED(1)
Mrs. Shanti Sree Bolleni Member NED(1)
Mr. Chetan Rathi Member ED

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 theprocedure for Risk minimisation.

Periodically reviewing and evaluating the Risk Management Policy andpractices with respect to risk assessment and risk management processes.

Continually obtaining reasonable assurance from management that all knownand emerging risks have been identified and mitigated or managed.

18. POLICY FOR SELECTION OF DIRECTORS AND DETERMINING DIRECTORS' INDEPENDENCE

1. Scope:

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 constituted inaccordance with the provisions of Section 178 of the Companies Act 2013 and reg.

19 of SEBI (Listing Obligation and Disclosure Requirement) Regulations 2015.

2.3 "Independent Director" means a director referred to in sub-section (6) ofSection 149 of the Companies Act 2013 and Regulation 16(1) (b) of the SEBI (Listingobligations and Disclosure Requirements) Regulations 2015.

3. Policy:

3.1 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 businessand social 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 theirduties and responsibilities effectively.

3.1.3 The proposed appointee shall also fulfil 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 asa Committee Member the Committee Meeting;

shall abide by the code of Conduct established by the company for Directorsand senior 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 SEBI (Listing obligations and Disclosure Requirements) Regulations2015 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 interestor relationships 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 the SEBI (Listing obligations and DisclosureRequirements) Regulations 2015.

3.2.3 The Independent Director shall abide by the "Code for Independent Directors"as specifiedin Schedule IV to the companies Act 2013.

3.3 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 NR 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. Scope:

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 "keymanagerial personnel" means (i) The Chief Executive Office or the managing directoror the manager; (ii) The company secretary; (iii) The whole-time director; (iv) The chieffinance Officer; and (v) Such other office as may be prescribed under the companies Act2013

2.3 "Nomination and Remuneration Committee" means the committee constitutedby Board in accordance with the provisions of section 178 of the companies Act2013 andreg.

19 of SEBI (Listing obligations and Disclosure Requirements) Regulations 2015.

3. Policy:

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 of theCompany within the overall limits approved by the shareholders as per provisions of thecompanies act.

3.2.2 Non-Executive Directors shall be entitled to sitting fees attending the meetingsof the Board and the Committees thereof. The Non-Executive Directors shall also beentitled 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.

19. BOARD EVALUATION:

The Board of Directors has carried out an annual evaluation of its own performanceboard committees and individual directors pursuant to the provisions of the Act and SEBIListing Regulations.

The performance of the board was evaluated by the board after seeking inputs from allthe directors on the basis of criteria such as the board composition and structureeffectiveness of board processes information and functioning etc.

The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of criteria such as the composition of committeeseffectiveness of committee meetings etc.

The above criteria are based on the Guidance Note on Board Evaluation issued by theSecurities and Exchange Board of India on January 5 2017

In a separate meeting of independent directors performance of non-independentdirectors the board as a whole and the Chairman of the Company was evaluated taking intoaccount the views of executive directors and nonexecutive directors.

The Board and the Nomination and Remuneration Committee reviewed the performance ofindividual directors on the basis of criteria such as the contribution of the individualdirector to the board and committee meetings like preparedness on the issues to bediscussed meaningful and constructive contribution and inputs in meetings etc.

In the board meeting that followed the meeting of the independent directors and meetingof Nomination and Remuneration Committee the performance of the board its committeesand individual directors was also discussed.

Performance evaluation of independent directors was done by the entire board excludingthe independent director being evaluated.

20. STATEMENT SHOWING THE NAMES OF THE TOP TEN EMPLOYEES IN TERMS OF

REMUNERATION DRAWN AND THE NAME OF EVERY EMPLOYEE AS PER RULE 5(2) & (3) OF THECOMPANIES (APPOINTMENT & REMUNERATION) RULES 2014 :

Disclosure pertaining to remuneration and other details as required under section 197of the Companies Act 2013 read with rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is given in Annexure–1 tothis Report.

The Statement containing the particulars of employees as required under section 197(12)of the Companies Act 2013 read with rule 5(2) and other applicable rules (if any) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is providedin a separate annexure forming part of this report. Further the report and the accountsare being sent to the members excluding the aforesaid annexure. In terms of section 136 ofthe Companies Act 2013 the said annexure is open for inspection at the registered officeof the Company during the working hours. Any member interested in obtaining a copy of thesame may write to the Company

21. RATIO OF REMUNERATION TO EACH DIRECTOR:

Under section 197(12) of the Companies Act 2013 and Rule 5(1of the Companies(Appointment & Remuneration) Rules 2014 read with Schedule V of the Companies Act2013 a remuneration ratio of 11:1 is being paid to Shri. Chetan Rathi Whole-Time directorof the Company and a ratio of 13:1 is being paid to Shri. Hari Narayan Rathi ManagingDirector of the Company.

22. DIRECTOR'S RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest 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.

23. DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

Your 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 resourced commensurate with the operations ofthe Company and reports to the Audit Committee of the Board.

24. NO FRAUDS REPORTED BY STATUTORY AUDITORS

During the Financial Year 2019-20 the Auditors have not reported any matter undersection 143(12) of the Companies Act 2013 therefore no detail is required to bedisclosed under section 134(3) (ca) of the Companies Act 2013.

25. INFORMATION ABOUT THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THE

SUBSIDIARIES / 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 have made an income of Rs. 89.55 lacs with aLoss of Rs. 3.83 lacs and Income of Rs. 0.014 lacs with a loss of Rs. (0.542.) lacsrespectively.

As per the provisions of Section 129 of the Companies Act 2013 read with Companies(Accounts) Rules 2014 a separate statement containing the salient features of thefinancial statements of the subsidiary companies is prepared in Form AOC-1 and is attachedas Annexure -2 and forms part of this report.

26. NAMES OF THE COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS

SUBSIDIARIES JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR.

There have been no companies which have become or ceased to be the subsidiaries jointventures or associate companies during the year.

27. CONSOLIDATED FINANCIAL STATEMENTS

In compliance with the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 (hereinafter referred to as the ‘Listing Regulations') and Section129 of the Companies Act 2013 the Consolidated Financial Statements which have beenprepared by the Company in accordance with the applicable provisions of the Companies Act2013 and the applicable Indian Accounting Standards (Ind AS) forms part of this AnnualReport.

28. DETAILS RELATING TO DEPOSITS COVERING THE FOLLOWING:

The Company has not accepted any public deposits during the Financial Year ended March31 2019 and as such no amount of principal or interest on public deposits wasoutstanding as on the date of the balance sheet

Details of deposits not in compliance with the requirements of the Act:

Since the Company has not accepted any deposits during the Financial Year ended March31 2020 there has been no non-compliance with the requirements of the Act.

Pursuant to the Ministry of Corporate Affairs (MCA) notification dated 22nd January2019 amending the Companies (Acceptance of Deposits) Rules 2014 the Company is requiredto file with the Registrar of Companies (ROC) requisite returns in Form DPT-3 foroutstanding receipt of money/ loan by the Company which is not considered as deposits.

The Company complied with this requirement within the prescribed timelines.

29. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

The company has not given loans Guarantees or made any investments during the yearunder review.

The Company has been availing facilities of Credit and Guarantee as and when requiredfor the business of the Company from banks. Personal Guarantees were given by Mr. HariNarayan Rathi Managing Director and Mr. Chetan Rathi Executive Director without anyconsideration for obtaining Bank Guarantees.

30. RELATED PARTY TRANSACTIONS:

All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of business. During the financial year2019-20 there were no materially significant related party transactions made by theCompany with Promoters Directors Key Managerial Personnel or other designated personswhich may have a potential conflict with the interest of the Company at large.

In line with the provisions of Section 177 of the Act read with the Companies (Meetingsof the Board and its Powers) Rules 2014 omnibus approval for the estimated value oftransactions with the related parties for the financial year is obtained from the AuditCommittee. The transactions with the related parties are routine and repetitive in nature

The summary statement of transactions entered into with the related parties pursuant tothe omnibus approval so granted are reviewed and approved by the Audit Committee and theBoard of Directors on a quarterly basis. The summary statements are supported by anindependent audit report certifying that the transactions are at an arm's length basis andin the ordinary course of business

The Form AOC-2 pursuant to Section 134(3)(h) of the Companies Act 2013 read with Rule8(2) of the Companies (Accounts) Rules 2014 is annexed herewith as Annexure- 3 to thisreport.

31. COMPOSITION OF CSR COMMITTEE AND CONTENTS OF CSR 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.

32. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

OUTGO:

The required information as per Sec.134 (3) (m) of the Companies Act 2013 is providedhereunder:

A. Conservation of Energy : Your Company's operations are not energy intensive.Adequate measures have been taken to conserve energy wherever possible by using energyefficient computers and purchase of energy efficient equipment.

B. Technology Absorption : All the Factors mentioned in Rule 8 (3)(b) Technologyabsorption are not applicable to the Company.

C. Foreign Exchange Earnings and Out Go:

Foreign Exchange Earnings : NIL

Foreign Exchange Outgo : NIL

33. RISK MANAGEMENT POLICY: The Company follows a comprehensive system of RiskManagement. The Company has adopted a procedure for assessment and minimization ofprobable risks. It ensures that all the risks are timely defined and mitigated inaccordance with the well-structured risk management process.

34. VIGIL MECHANISM/ WHISTLE BLOWER POLICY:

The Board of Directors has formulated a Whistle Blower Policy which is in compliancewith the provisions of Section 177(10) of the Companies Act 2013 and Regulation 22 of theListing Regulations. The Company promotes ethical behaviour and has put in place amechanism for reporting illegal or unethical behaviour. The Company has a Vigil Mechanismand Whistle-blower policy under which the employees are free to report violations ofapplicable laws and regulations and the Code of Conduct. Employees may report theirgenuine concerns to the Chairman of the

Audit Committee. During the year under review no employee was denied access to theAudit Committee.

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. The same has been placed on the website of the Companywww.bnrsecurities.com .

35. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the regulators /courts thatwould impact the going concern status of the Company and its future operations.

36. STATUTORY AUDITORS AND STATUTORY AUDITORS REPORT :

At the 33rd Annual General Meeting held on 10.08.2019 the members of the companyapproved the appointment of M/s. Seshachalam & Co chartered Accountants StatutoryAuditors of the company for the term of five years from the financial year 2019-20 onwardson such terms and conditions and remuneration as may be decided by the Board. M/sSeshachalam & Co will continue as statutory auditors of the company till theconclusion of the 38th Annual General Meeting to be held for the financial year 2023-24.

The Auditors' Report for fiscal 2020 does not contain any qualification reservation oradverse remark. The Auditors' Report is enclosed with the financial statements in thisAnnual Report. The Company has received audit report with unmodified opinion for bothStandalone and Consolidated audited financial results of the Company for the FinancialYear ended March 31 2020 from the statutory auditors of the Company.

The Auditors have confirmed that they have subjected themselves to the peer reviewprocess of Institute of Chartered Accountants of India (ICAI) and hold valid certificateissued by the Peer Review Board of the ICAI.

37. SECRETARIAL AUDIT REPORT:

In terms of section 204 of the Companies Act 2013 read with the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 based upon the recommendations ofthe Audit Committee the Board of Directors had appointed M/s. S.S. Reddy &Associates Practicing Company Secretaries (CP No. 7478) as the Secretarial Auditor of theCompany for conducting the Secretarial Audit for financial year ended March 31 2020.

The Secretarial Audit was carried out by M/s. S.S. Reddy & Associates CompanySecretaries (CP No. 7478) for the financial year ended March 31 2020. The Report given bythe Secretarial Auditor is annexed herewith as Annexure- 4 and forms integral partof this Report.

The Secretarial Audit Report does not contain any qualification reservation or adverseremark.

38. INTERNAL AUDITORS:

Pursuant to provisions of Section 138 read with Rule 13 of the Companies (Accounts)Rules 2014 and Section 179 read with Rule 8(4) of the Companies (Meetings of Board andits Powers) Rules 2014; during the year under review the Internal Audit of the functionsand activities of the Company was undertaken by the Internal Auditor of the Company onquarterly basis by M/s Penmetsa & Associates. the Internal Auditor of the Company.

Deviations are reviewed periodically and due compliance ensured. Summary of SignificantAudit Observations along with recommendations and its implementations are reviewed by theAudit Committee and concerns if any are reported to Board. There were no adverse remarksor qualification on accounts of the Company from the Internal Auditor.

The Board has re-appointed by M/s Penmetsa & Associates Chartered AccountantsHyderabad as Internal Auditors for the Financial Year 2020-21.

39. SECRETARIAL STANDARDS

Pursuant to the provisions of Section 118 of the Companies Act 2013 the Company hascomplied with the applicable provisions of the Secretarial Standards issued by theInstitute of Company Secretaries of India and notified by Ministry of Corporate Affairs..

40. DECLARATION BY THE COMPANY

The Company has issued a certificate to its Directors confirming that it has not madeany default under Section 164(2) of the Act as on March 31 2020.

41. 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 annexed as a part of this Annual Report as Annexure – 5

42. DISCLOSURE ABOUT COST AUDIT:

Maintenance of cost records and requirement of cost audit as prescribed under theprovisions of Section 148(1) of the Act are not applicable for the business activitiescarried out by the Company.

43. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Management discussion and analysis report for the year under review as stipulated underRegulation 34 (e) read with schedule V Part B of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 with the stock exchange in India is annexed herewith as Annexure-6 to this report.

44. DECLARATION BY INDEPENDENT DIRECTORS AND STATEMENT ON COMPLIANCE OF

CODE OF CONDUCT

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet with criteria of independence as prescribed both undersub-section (6) of Section 149 of the Companies Act 2013 and under Regulation 16(1)(b)read with Regulation 25 of the Listing Regulations attached as Annexure-7.

The Independent Directors have also confirmed that they have complied with Schedule IVof the Act and the Company's Code of Conduct.

In terms of Regulations 25(8) of the Listing Regulations the Independent Directorshave confirmed that they are not aware of any circumstance or situation which exists ormay be reasonably anticipated that could impair or impact their ability to dischargetheir duties with an objective independent judgement and without any external influence.

During the year Independent Directors of the Company had no pecuniary relationship ortransactions with the Company other than sitting fees commission and reimbursement ofexpenses incurred by them for the purpose of attending meetings of the Board of Directorsand Committee(s).

45. 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

46. INSURANCE:

The properties and assets of your Company are adequately insured.

47. 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.

48. 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.

49. CEO/ CFO Certification

As required Regulation 17(8) read with Schedule II of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the CEO/CFO certification is attached with theannual report as Annexure-8 in this Annual Report.

50. CODE OF CONDUCT FOR THE PREVENTION OF INSIDER TRADING

The Board of Directors has adopted the Insider Trading Policy in accordance with therequirements of the SEBI (Prohibition of Insider Trading) Regulation 2015 and theapplicable Securities laws. The Insider Trading Policy of the Company lays down guidelinesand procedures to be followed and disclosures to be made while dealing with shares of theCompany as well as the consequences of violation. The policy has been formulated toregulate monitor and ensure reporting of deals by employees and to maintain the highestethical standards of dealing in Company securities.

The Insider Trading Policy of the Company covering code of practices and procedures forfair disclosure of unpublished price sensitive information and code of conduct for theprevention of insider trading is available on our website (www.bnrsecurities.com)

51. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND 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.

This is in line with provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 (‘POSH Act') and the Rules madethereunder. With the objective of providing a safe working environment all employees(permanent contractual temporary trainees) are covered under this Policy. The policy isavailable on the website at www. bnrathisecurities.com

As per the requirement of the POSH Act and Rules made thereunder the Company hasconstituted an Internal Committee at all its locations known as the Prevention of SexualHarassment (POSH) Committees to inquire and redress complaints received regarding sexualharassment. During the year under review there were no Complaints pertaining to sexualharassment.

52. Other Disclosures:

Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:

a. Issue of equity shares with differential rights as to dividend voting or otherwise.

b. Issue of shares (including sweat equity shares) to employees of the Company underany scheme save and except ESOS referred to in this Report.

c. Neither the Managing Director nor the Whole-time Directors of the Company receiveany remuneration or commission from any of its subsidiaries.

53. ACKNOWLEDGEMENTS:

Your Directors place on record their appreciation for the overwhelming co-operation andassistance received from the investors customers business associates bankers vendorsas well as regulatory and governmental authorities. Your Directors also thanks theemployees at all levels who through their dedication co-operation support and smartwork have enabled the company to achieve a moderate growth and is determined to poise arapid and remarkable growth in the year to come.

Your Directors also wish to place on record their appreciation of businessconstituents banks and other financial institutions and shareholders of the CompanySEBI BSE NSE MCX NSDL CDSL HDFC Bank etc. for their continued support for the growthof the Company.

For and on behalf of the Board
B.N. Rathi Securities Limited
Sd/-
Laxminiwas Sharma
Place : Hyderabad Chairman
Date : 22.06.2020 DIN : 00010899

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