Your Directors have pleasure in presenting herewith the 24th Audited Annual Reporttogether with the Audited Statement of Accounts of the Company for the year ended on 31stMarch 2017.
During the financial year 2014-15 the financial operational result of the Company isas follows:
| || ||(Amount in Rs) |
|Particulars ||For the year ended on 31st March 2017 ||For the year ended on 31st March 2016 |
|Total Income. ||751000 ||1119780 |
|Total Expenses. ||619384 ||717437 |
|Exceptional Items (Profit on sale of assets) ||113224 ||NIL |
|Profit Before Tax. ||244840 ||402343 |
|Depreciation. (Included in Total Expenses) ||89727 ||98861 |
|Provision for Tax. ||103186 ||110000 |
|Differed Tax (Assets) Liability. ||19328 ||(21325) |
|Fringe Benefit Tax ||NIL ||NIL |
|Excess Provision of IT Written Back ||NIL ||NIL |
|Net Profit/(Loss) for the Year ||122326 ||313667 |
SHARE CAPITAL STRUCTURE
There was no change in Number of shares and value of shares in the Authorized IssuedSubscribed and Paid up Share Capital Structure of the Company.
During the year under review the directors have not recommended any Dividend to be paidin order to strengthen the long term resources of the Company.
TRANSFER OF UNPAID/UNCLAIMED DIVIDEND
The Company does not have any amount of Unpaid/Unclaimed Dividend as defined undersection 124(5) which is required to be transferred to the Investors Education &Protection fund established under section 125 of the Companies Act 2013. There are noother statutory amount like outstanding unpaid Refund Amount on Share Applications unpaidinterests or principal of Deposits and Debentures etc lying with the company which arerequired to be transferred to Investors Education and Protection Fund.
YEAR UNDER REVIEW
During the year under review your company had earned a total income of Rs. 751000/-from other income (Previous Year Rs. 1119780/- from other income. After meeting with theday to day and total expenses (including depreciation) of Rs. 619384/- (Previous year ofRs. 717437/-) Provisions of Depreciation of Rs. 89727/- (Previous year of Rs.98861/-)Provision of Income Tax Rs.103186/- (Previous year Rs.110000/-) Deferred TaxLiability Rs. 19328/- (Previous years Deferred Tax Assets of Rs.21325/-) the company hasearned a net Profit for the year of Rs. 122326/- (Previous Year Net Profit of Rs.313667/-) During the year the company has earned other income in the form of DividendInterest and Rental income only. Except holding of the Securities on long term basis andsome Real Estate property (LAND) during the year your company has not done any otherbusiness activities during the year. However the Management of the Company is identifyingother opportunities to earn the income from the business of Trading of commodities suchEdible oil oil cakes etc and also from trading / Broking in Real Estate business.
SURRENDER OF NBFC REGISTRATION CERTIFICATE:
During the Year due to no general of income from NBFC Activities and also the Companyis at present not Holding minimum 50% NBFC Assets hence it has surrendered the NBFCRegistration Certificate. Now the Company is General Business company and as per RevisedMOA the company is eligible to do the business of Trading business activities and alsodealing in all respect in Real Estate business including acquiring holding giving anyreal estate property on Rent or Lease basis etc.
BUY BACK OF SHARE CAPITAL
The Company had not made any Buy Back of its paid up equity shares during the year interms of section 68 of the Companies Act 2013. Hence no specific disclosure is required tobe made in this report
DETAILS OF LOANS GUARANTEES AND INVESTMENTS U/S 186 OF THE COMPANIES ACT 2013
During the year under review the Company has not made any inter corporate loansinvestments given any corporate guarantee to any other body corporate subsidiaryassociate or any other company.
During the year under review your company has neither invited nor accepted any publicdeposit or deposits from the public as defined under section 73(1) of Companies Act 2013(section 58A of Companies Act 1956).
COMPLIANCE TO CODE OF CORPORATE GOVERNANCE:
The Complete Report on Corporate Governance is given separately after this report.
DEMATERIALISATION OF SECURITIES:
Your Company's Equity shares are admitted in the System of Dematerialization by theDepositories namely NSDL. The Company has signed tripartite Agreement through Registrarand Share Transfer Agent LINK INTIME INDIA (P) LIMITED. The Investors are advised to takeadvantage of timely dematerialization of their securities. The ISIN allotted to yourCompany is INE 474 H 01014.Total Share dematerialized up to 31st March 2017 were 139500which constitute 4.62% of total capital. Your Directors request all theshareholders to dematerialize their shareholding in the company as early as possible.
COMPLIANCE WITH THE LISTING AGREEMENT:
The company is regular in making timely compliance of all the applicable clauses of theListing Agreement from time to time whether it is event based compliance or time boundcompliance of monthly quarterly half yearly or yearly compliances. Your Company hasalready paid Annual Listing fees of the Bombay stock exchange Limited and Ahmedabad StockExchange for and up to the financial year 2016-17. The highest lowest average pricesrecorded on the Bombay Stock Exchange on every month of the financial year 2016-17including the volume in shares traded is separately given in other information para ofCorporate Governance report attached here to. During the year your company has neitherissued any shares or stock options or ESOPs or other employee benefits.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Management's discussion and perceptions on existing business future outlook of theindustry future expansion and diversification plans of the Company and future course ofaction for the development of the Company are fully explained in a separate Para inCorporate Governance Report.
Smt. Rita R. Shah Managing Director of the Company retires by rotation as perprovisions of the Act at this Annual General Meeting. However being eligible offersherself for reappointment. Your Directors recommend appointing her by passing resolutions.
The Company has received declarations from Mr. Ajitsinh K. Chavda and Mr. Manish G.Patel the Independent Directors of the Company confirming that they meet with thecriteria of independence as prescribed both under sub-section (6) of Section 149 of theCompanies Act 2013 and also as per SEBI (LODR) 2015 and pursuant to provisionsof theListing Agreement with the Stock Exchanges. Members are requested to refer to the Noticeof the Annual General Meeting and the Explanatory Statement for details of thequalifications and experience of the Directors and the period of their appointment.
Mrs. Rita R. Shah is the Managing Director of the Company. Because of the Company's badfinancial position she is not taking any managerial Remuneration.
Formation of Audit Committee in Compliance to Section 177 of the Companies Act 2013and as per requirements of SEBI (LODR) 2015 for compliance with Corporate Governance
In Compliance with the provisions of Section 177 of the Companies Act 2013 your companyhas formed an Audit Committee within the Organization consisting of 2 independentdirectors and one promoter director who is Non Executive. An Internal Auditors have beenappointed as Advisors in their professional capacity on this committee. The area ofoperations and functional responsibilities assigned to the committee are as per theguidelines provided in SEBI (LODR) and the Companies Act 2013 and the Listing Agreementfor implementation of code of corporate governance. The Committee meets at least once in aquarter and gives its report of each meeting to the Board for its approval record andinformation purposes. The detail of powers responsibilities and system of functioning ofthis committee is given in report on Corporate Governance forming part of this report.
The Information required to be disclosed in the report of the Board of Directors as perthe provisions of Section 134 of the Companies Act-2013 and the Companies (Accounts Rules2014 regarding the conservation of energy; technology absorption foreign exchangeearnings and outgo are not applicable to the company. As Company is not manufacturing anyproduct or providing any services.
Except the information given in this report there are no material changes have takenplace after completion of the financial year up to the date of this report which may havesubstantial effect on business and finances of the company.
There are no employees of the company who were in receipt of the remuneration ofRs.6000000/- in the aggregate if employed for the year and in receipt of the monthlyremuneration of Rs. 500000/- in the aggregate if employed for a part of the year underreview. Hence the information required under Section 197 (12) of the Companies Act 2013read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 and as amended being not applicable is not given in this report.
PARTICULARS OF THE EMPLOYEES
Particulars of the employees as required under provisions of section 197 of theCompanies Act 2013 read with Rule 5(2) of The Companies (Appointment and Remuneration)Rules 2014 as amended from time to time are not attached with this report since therewas no employee who was in receipt of remuneration in excess of limits prescribed underthe provisions of Section 197(12) of the Companies Act 2013 read with Rule 5 (2) of TheCompanies (Appointment and Remuneration) Rules 2014.
DISCLOUSER AS PER COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL)RULE 2014.
As the Company is not paying any remuneration to its Managing/ Whole Time Director orany other Key Managerial Personnel the information required to be given as per the aboverules are not applicable hence not given here with.
DIRECTORS' RESPONSIBLITY STATEMENT
Pursuant to the provisions of Section 134 (5) of Companies Act 2013 (Section 217(2AA)of the Companies Act 1956) your Directors declare that:
i) In preparation of the annual accounts as far as possible and except to theextent if any accounting standards mentioned by the auditors in their report as notcomplied with all other applicable accounting standards had been followed along withproper explanation relating to material departures;
ii) The Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are responsible 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 andafter the profit or loss of the company for that period;
iii) The Directors have taken proper and sufficient care for the maintenance of theadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv) The Directors had prepared the annual accounts on a going concern basis.
v) The Directors in the case of listed company had laid down internal financialcontrol to be followed by the company and that such internal financial controls areadequate and were operating effectively.
vi) The Director had devised proper system to ensure compliances with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
DECLARATION AS TO INDEPENDENT DIRECTORS:
(Pursuant to Provisions of section 149(6) of the Companies Act 2013).
All the Independent Directors of the Company do hereby declare that:
(1) All the Independent Directors of the Company are neither Managing Director nor aWhole Time Director nor a Manager or a Nominee Director.
(2) All the Independent Directors in the opinion of the Board are persons of integrityand possesses relevant expertise and experience.
(3) Who are or were not a Promoter of the Company or its Holding or subsidiary orassociate company.
(4) Who are or were not related to promoters or directors in the company its holdingsubsidiary or associate company.
(5) Who has or had no pecuniary relationship with the company its holding subsidiaryor associate company or their promoters or directors during the two immediately precedingfinancial years or during the current financial year.
(6) None of whose relatives has or had pecuniary relationship or transaction with thecompany its holding subsidiary or associate company or their promoters or directorsamounting to two per cent or more of its gross turnover or total income or fifty lakhrupees or such higher amount as may be prescribed whichever is lower during the twoimmediately preceding financial years or during the current financial year
(7) Who neither himself nor any of his relatives
(a) Holds or has held the position of a key managerial personnel or is or has beenemployee of the company or its holding subsidiary or associate company in any of threefinancial years immediately preceding the financial year in which he is proposed to beappointed.
(b) Is or has been an employee or proprietor or a partner in any of the threefinancial years immediately preceding the financial years in which he is proposed to beappointed of
(i) A firm of auditors or company secretaries in practice or cost auditors of thecompany or its holding subsidiary or associate company; OR
(ii) Any legal or a consulting firm that has or had any transaction with the companyits holding subsidiary or associate company amounting to ten per cent or more of thegross turnover of such firm;
(iii) Holds together with his relatives two per cent or more of the total voting powerof the company; OR
(iv) Is a Chief Executive or director by whatever name called or any non-profitorganization that receives twenty five per cent or more of its receipts from the Companyany of its promoters directors or its holding subsidiary or associate company or thatholds two per cent or more of the total voting power of the company; OR
(v) Who possesses such other qualifications as may be prescribed.
DECLARATION BY BOARD AS PER REQUIREMENT OF SECTION 178
In compliance with Section 178 (1) as also in compliance with SEBI (LODR) 2015 and ofthe Listing Agreement the Board of Directors does hereby declare that:
a. The Company has proper constitution of the Board of Directors including independentdirectors in proportion as per requirement of clause 49 of the Listing Agreement. Howeverthe Company is still in process for appointing a suitable person as CFO and CompanySecretary as required under Section 203 of the Companies Act 2013.
b. The Company has constituted Nomination and Remuneration Committee StakeholdersRelationship Committee Audit Committee as per requirements of the SEBI (LODR) 2015 and ofthe Listing Agreement and provisions of the Companies Act 2013.
c. The Company has the policy for selection and appointment of independent directorswho are persons of reputation in the society have adequate educational qualificationsufficient business experience and have integrity & loyalty towards their duties.
d. The Company does not pay any managerial remuneration to its Managing Directors andDirectors because of Company's weak financial position.
e. The Independent Directors are not paid any sitting fee for attending Board and othercommittee meetings as decided by the Board from time to time.
f. The Company is not paying any commission on net profits to any directors.
M/S. NIRAV A PATEL & ASSOCIATES present Statutory Auditors of the company areretiring at this Annual General Meeting as per provisions of section 139 of the CompaniesAct 2013. The Board of DIrectors have identified another Chartered Accountants M/s.Anoop Agarwal & Co. (ICAI Firm Registration No. 001739C) to be the statutoryAuditors of the Company who have given their letter of consent and confirmation underprovisions of Section 139(1) of Companies Act 2013 read with Rule 4 and 6 of TheCompanies (Audit and Auditors) Rules 2014 (Section 224(1B) of the Companies Act 1956)for their appointment as Statutory Auditors of the Company. Necessary Resolution makingtheir appointment as the Statutory Auditors and fixing their remuneration is proposed tobe passed at the Annual General Meeting.
The company is in process of appointing an independent Chartered Accountant to act asan Internal Auditor as per suggestion of auditors as well as in compliance with theCompanies Accounts Rules 2014 in order to strengthen the internal control system for theCompany. However as in the company during the previous financial year there were no muchfinancial transactions or trading business activities looking to the size of the companyand its business operations and transactions the matter is being discussed with thestatutory auditors on making of compliance with this requirements.
The Company has appointed M/s. KAMLESH SHAH & SHAH CO. as the secretarialauditor for the financial year 2014-15. They have given their report in the prescribedform MR-3 which is annexed to this report as an ANNEXURE.
OBSERVATION OF THE SECRETARIAL AUDITOR
I. The Chief Financial Officer [CFO] is yet to be appointed as per requirement ofSection 196197203(1) read with rule 8 of Companies (Appointment and remuneration ofManagerial Personnel) rules 2014. The Company has also not appointed a Full Time CompanySecretary in the employment as per requirements of Rule 8A of Companies (Appointment AndRemuneration) Rules 2014.
II. The Company has yet not appointed an Independent Chartered Accountants as anInternal Auditors as Required by Companies (Accounts) Rules 2014.
III. The Company is not properly maintaining and updating its website as perrequirements of SEBI (LODR) 2015 and the provisions of the Listing Agreement.
IV. The Company has not fulfill the criteria as per the section 45-IA of the ReserveBank of India Act 1934. The Company has not even 50% of revenue from Non BankingFinancial Companies (NBFC) activities and 50% NBFC asset. So Company decided to surrender/cancel the certificate of registration as NBFC issued by RBI and applied for the same.
The Company is a very small Company with a paid up share capital just only Rs. 3.018Crores. Though its shares are currently listed on the stock Exchanges of Ahmedabad andMumbai as per provisions of SEBI (LODR) 2015 it is required to appoint KEY Managerialpersonnel such as Managing or whole time Director Chief Financial Officer and CompanySecretary. The Company has already appointed Mrs. Rita R Shah as whole time Director. Asthe Company's financial position is very week and there are no much financial transactionswithin the company during the year it has not appointed CFO or CS as the company is notaffording the cost of remuneration of such professional personnel. Applied the same Logicas there are no much financial transactions within the Company has yet not appointed anIndependent Chartered Accountants as the Internal Auditors.
The Company is in process of updation of its website by uploading requisite informationas early as possible.
As your company has not earned more than 50% NBFC Income and has not held more than 50%financial assets it is not continuing with the requirements of being a NBFC Company.Further due to blockage of funds in real estates there is very rare chances of meetingwith this criteria in the near future. Hence the management has surrendered the NBFCLicense to RBI accordingly it is not now the NBFC.
There are no specific adverse observations made by the Auditors in their report.However notes to the Accounts to itself are clarificatory and self explanatory in thenature.
OTHER STATUTORY DISCLOSURES:
The Board do hereby declared that during the year No events have occured which may havesubstantial effect on the Going concern status of the Company. Further the Companycontinued with its policy on accounting of financial transactions and that there has beenno deviations or material departure made.
During the Financial year there has been no material Orders are passed or penaltiesimposed on or no court cases are filed against the Company or any of its Directors or KeyManagerial Personnel and that none of them are disqualified in any respect.
The details on various corporate policies adopted by the management are given inannexure titled Corporate Governance report and forming part of this Report.
Your Directors take this opportunity to acknowledge the trust reposed in your companyby its Shareholders Bankers and clients. Your Directors also keenly appreciate thededication & Commitment of all our employees without which the continuing progress ofthe company would not have been possible.
|Place: Ahmedabad. ||On Behalf of the Board of Directors |
|Date: 30th May 2017 ||Of R.R. SECURITIES LIMITED |
| ||SD/- |
| ||(RAJENDRA B. SHAH) |
| ||Chairman and Director |