BOARD'S REPORT To the Members, Your Directors have pleasure in presenting before you the Twenty Sixth Annual Report together with the Audited Statements of Accounts for the year ended 31st March, 2015. Operations During the year your company has earned a gross income of Rs. 1047.78 lakhs as against Rs. 744.62 lakhs in the previous year. Under Stock Broking your company has a mix of institutional and individual clients and has achieved a turnover of Rs. 6082.73 crore during the year. Your company also provides Depository services to institutions and retail customers and has 43928 accounts under DP operations and 21293 accounts under broking operations. Your company reported a net profit of Rs.498.80 lakhs during the year 2014-15 as against a net profit of Rs.30.02 lakhs in the previous year as under: Dividend After adjusting the profits of the year against the brought forward loss and additional depreciation to comply with the requirements of the Companies Act, 2013, your company is left with Rs.191.29 lakhs which need to be ploughed back to improve the net worth. Hence your Directors do not recommend any dividend for the year 2014-15. Board Meetings The Board of Directors met five times during the year on 23.04.2014, 09.08.2014, 20.10.2014, 07.02.2015 & 28.03.2015. Directors and Key Managerial Personnel: Shri G. Rajeevan Pillai has resigned from the Board on his retirement from the services of Indian Bank consequent to his attaining superannuation on 31.05.2014. His resignation was taken on record by the Board at the meeting held on 09.08.2014. In his place Indian Bank has nominated Shri K Udaya Baskara Reddy, General Manager, Indian Bank and he was co-opted as additional Director at the meeting held on 09.08.2014 and appointed as Director at the annual general meeting held on 27.09. 2014 as Director liable to retire by rotation. Shri. K Udaya Bhaskara Reddy has resigned from the Board, consequent to his transfer to Kolkata as Zonal Manager, on 23.05.2015. Shri.B Raj Kumar has resigned from the Board consequent to completion of his term of appointment in Indian Bank as Executive Director on 31.05.2015. Indian Bank has nominated Shri. S Krishnan, General Manager, Indian Bank and Shri. V Gopal, General Manager Indian Bank. They were inducted on the Board as Additional Directors at its meeting held on 13.08.2015. At the annual general meeting held on 27.09.2014 the existing Independent Directors i.e. Shri T M Nagarajan, Shri P M Venkatasubramanian, Shri G R Sundaravadivel & Mrs. Chitra Murali were appointed as Independent Directors under the provisions of the Companies Act, 2013 for a fixed term of five years and they will hold the office till the conclusion of 30"1 Annual General Meeting. They are not liable to retire by rotation. In the opinion of the Board the Independent Directors fulfill the conditions specified in the Companies Act, 2013 and the rules made there under and are independent of the management. Your Directors place on record their appreciation for the valuable contributions made by Shri.B Raj Kumar, Executive Director, Shri. K Udaya Bhaskara Reddy, General Manager, Shri G. Rajeevan Pillai, General Manager during their tenure as Directors of the Company. To comply with the requirements of the Companies Act, 2013, Shri K S Sujay, Officer on deputation from Indian Bank to the company was appointed as Chief Financial Officer. Retirement of Directors by rotation: The Company's Board consists of 4 Independent Directors who were appointed for a fixed term of 5 years, are not liable to retire by rotation as per Section 149(13) of the Companies Act, 2013. The Whole-time Director who was appointed for fixed tenure cannot retire by rotation. The other two Directors who are nominees of Indian Bank are appointed as Additional Directors at the Board Meeting held on 13.08.2015. They will hold office of Directorship until the ensuing Annual General Meeting and their appointment as Directors is placed before the ensuing Annual General Meeting. None of the Directors are retiring by rotation. Declaration from Independent Directors on Annual Basis: The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 that the Independent Directors of the Company meet with the criteria of their Independence laid down in Section 149(6). The Board has accepted all the recommendations of the Audit Committee. The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report. Vigil Mechanism: The Company has established a vigil mechanism called Whistle-blower Policy for its directors and employees to report genuine concerns pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013 and as per Clause 49 of the Listing Agreement. The details of the Whistle-blower Policy is explained in the Corporate Governance Report and also posted on the website of the Company Director's Responsibility Statement: In pursuance of section 134 (5) of the Companies Act, 2013, the Directors hereby confirm that: a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period; c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 the company and that such internal financial controls are adequate and were operating effectively. f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively Extract of Annual Return: As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in form MGT 9 is annexed herewith. Auditors: The Auditors, M/s A V Deven & Co., Chartered Accountants, Chennai were appointed by the Office of the Comptroller and Auditor General of India, New Delhi in exercise of the powers conferred on them by section 139 of the Companies Act, 2013 as statutory auditors of the company for the financial year 2014-15. Auditors Observations in the Audit Report: There is nil observation from the Auditors. Secretarial Audit: Secretarial audit report in Form MR 3 as given by M/s. P Sriram & Associates, Practising Company Secretary is annexed to this Report. Information as per Section 134 (3) (m) of the Companies Act, 2013 a) The company has no activity relating to conservation of energy or technology absorption. b) The company did not have any foreign exchange earnings as well as expenses. Significant & Material orders passed by the Regulators: There is no significant and material order passed by the regulators or Courts or Tribunals impacting the going concern status and the company's operations in future. Details of adequacy of Internal Financial Controls: The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. Risk Management Policy: The company has put in place Risk Management Policy compatible with the type and size of operations and risk perception. The said policy is drawn up based on the guidelines of SEBI and stock exchanges issued in this regard. Corporate Social Responsibility Policy: The company does not fall into the criteria stipulated for the applicability of Section 135 of the Companies Act, 2013. Hence the provisions of section 135 of the Companies Act 2013 are not applicable. Related Party Transactions: During the year under review, there was no transaction with related party that needs to be reported in Form AOC 2 under section 188 of the Companies Act, 2013 read with the Companies (Meeting of Board and its Powers) Rules 2014. Formal Annual Evaluation: Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Stakeholders Relationship Committees. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the President & Whole Time Director and the Non Independent Directors was carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process and the performance of the Board Ratio of Remuneration to each Director: Details / Disclosures of Ratio of Remuneration of each Director to the median employee's remuneration are enclosed as Annexure 1. Listing with Stock Exchanges: The Company confirms that it has paid the Annual Listing Fees for the year 2015-2016 to NSE and BSE where the Company's Shares are listed. Corporate Governance and Shareholders Information: Your Company has taken adequate steps to adhere to all the stipulations laid down in Clause 49 of the Listing Agreement. A report on Corporate Governance is included as a part of this Annual Report Certificate from the Statutory Auditors of the company confirming the compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report. Particulars of Employees: The information required pursuant to Section 197 read with Rule 5 (1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, is attached with this report. None of the employees of the company received remuneration in excess of the limits prescribed Under Rule 5 (2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules of the Companies Act, 2013. Outlook: The cost control and monitoring measures initiated in the previous years coupled with improved performance in the broking areas due to the revival of capital market and recovery in some NPA accounts have resulted in substantial jump in net profit. Your company will continue to focus its efforts to increase its activities under fee-based business in addition to concentrating on recovery of overdues and reduction of Non Performing Assets, disinvestment of quoted and unquoted investments. Your company's involved management network, satisfied clientele, quality manpower and diligent internal control and cost control measures will enable your company to continue to report better performance in the coming years. General: Your Directors wish to place on record their gratitude to the Ministry of Finance, Government of India, SEBI and Comptroller and Auditor General of India for their valuable guidance. Your Directors also wish to place on record their thanks to the Bankers of the Company and their appreciation for the assistance, support and guidance received from Indian Bank and its Employees. Your Directors express their appreciation for the contribution made by the Company's dedicated Employees. In conclusion, your Directors thank you, the members of the company for your support and seek your continued patronage for achieving better results. For and on behalf of the Board of Directors V Gopal Director Banabihari Panda President & Whole Time Director Place: Chennai Date: 13-08-2015 |