DIRECTORS’ REPORT THE MEMBERS, RR FINANCIAL CONSULTANTS LIMITED 1) Your Directors take pleasure in presenting the Twenty Eighth Annual Report and Audited Statement of Accounts of the Company for the period ended on 30th June, 2015 along with the Audited Accounts, Auditor's Report for the year ending 30th June, 2015. 2) BUSINESS PERFORMANCE The Gross Income of the company during the period under review is Rs 9906610.45 as compared to Rs. 26942101.77 in the previous period. The Company registered a loss after Tax and Depreciation amounting Rs.18080654.03 as against profit of Rs.47382.28 in the previous year. The performance of the Company during the period under review has been satisfactory. 3) DIVIDEND No Dividend was declared in the current Financial Year due to Loss incurred by the Company. 4) SHARE CAPITAL The issued, subscribed and paid up Equity Share Capital as on 30th June, 2015 was Rs.110607000. During the year under review, the Company has neither issued shares with differential rights as to dividend, voting or otherwise, nor has issued sweat equity. As on 30TH June, 2015, none of the Directors of the Company holds instruments convertible into Equity Shares of the Company. 5) SUBSIDIARY COMPANIES As on 30.06.2015, RR Financial Consultants Limited has six subsidiary companies. The names of the subsidiaries along with the Percentage of Holding company in these Subsidiary Companies RR Equity Brokers Private Limited has 5 subsidiaries i.e. RR Commodity Brokers Private Limited, RR Information and Investment Research Private Limited, RR Investor Retail services Private Limited, RR IT Solutions Private Limited and RR Investor Distribution Company Private Limited. RR Investor capital services Private Limited has 1 subsidiary i.e. RR Investor securities Trading Private Limited. RR Infra Estates Private Limited has 3 subsidiaries i.e. RR Land Estates Private Limited, Lakshminarayan Infra Estates Private Limited & Priya Darshan Real Estates Private Limited. As per sec 2 (87) of The Companies act, 2013 the subsidiaries of subsidiaries of RRFC are deemed to be subsidiaries of RRFC. As required under the new Clause 49 of the Listing Agreement, the Company has adopted a practice of placing the minutes and statements of all the significant transactions of all the un-listed subsidiary companies in the meeting of Board of Directors of RR Financial Consultants Limited. The Audit Committee of the Company regularly reviews the financials of the subsidiary companies. 6) PUBLIC DEPOSIT Your company has never invited/accepted any deposit from the public within the meaning of Section 73 of the Companies Act, 2013 and the Rules made there under during the period under review. 7) DIRECTORS AND KEY MANAGERIAL PERSONNEL The following have been designated as the Key Managerial Personnel of the Company pursuant to sections 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014: Mr. Raghunandan Prasad was the Chairman, Non-Executive Director of the Company from 15.06.1990 to 07.12.2014. The Board of Directors deeply mourns the sudden death of the Chairman, Mr. Raghunandan Prasad on 07th December, 2014 at Delhi. The Company acknowledged his experience, contribution to the business, personal support to his colleagues, and level of respect in which he had within the company. The Board and executive team of the Company wish to convey their sincerest condolences to his family. He will be sadly missed by RR Group. Mr. Rajat Prasad - Executive Director & Managing Director Ms. Ritu Prasad - Non Executive Women Director w,e.f. 07th December, 2014 Mr. Mahesh Chandra is liable to retire by rotation at the forthcoming Annual General Meeting and being eligible, offer himself for reappointment. Your Directors recommend his re - appointment for your approval. Ms. Deepti Grover - Ceased to be Company secretary w.e.f 30th Sepember, 2015 Ms. Farha Naaz -Appointed as Company secretary w.e.f 19th October, 2015 7.1 BOARD EVALUATION Pursuant to the provisions of companies Act, 2013 and clause 49 of the Listing Agreement, the Board has carried out annual performance evaluation of its own performance, the directors individually as well the evaluation of the working of its Audit, Nomination & Remuneration and Stakeholder committee. The manner in which the evaluation has been carried out has been explained in Corporate Governance Report. 7.2 REMUNERATION POLICY Board has, on the recommendation of the Nomination & Remuneration committee framed a policy for the selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report. 8. BOARD MEETINGS During the year Thirteen (13) Board meeting were held, the details of which are given in Corporate Governance Report and maximum gap between the meeting is well within the limits prescribed under Companies act, 2013 and clause 49 of the listing agreement. 9. COMMITTEE OF BOARD 9.1 AUDIT COMMITTEE During the year Four (4) Audit Committee meeting were held, the details of which are given in Corporate Governance Report and maximum gap between the meetings is well within the limits prescribed under Companies act, 2013 and clause 49 of the listing agreement. 9.2 NOMINATION AND REMUNERATION COMMITTEE During the year no Nomination and Remuneration Committee meeting were held, the details of which are given in Corporate Governance Report and maximum gap between the meetings is well within the limits prescribed under Companies act, 2013 and clause 49 of the listing agreement. 9.3 STAKEHOLDER RELATIONSHIP COMMITTEE During the year no complain was registered by stakeholders so no Committee meeting was held, the detail of committee are given in Corporate Governance Report. 9.4 RISK AND STRATEGY COMMITTEE During the year no Risk and Stategy Committee meeting were held, the details of which are given in Corporate Governance Report and maximum gap between the meetings is well within the limits prescribed under Companies act, 2013 and clause 49 of the listing agreement 10. PLEDGE OF SHARES None of the equity shares of the directors of the Company are pledged with any banks or financial institutions. DISCLOSURES UNDER THE COMPANIES ACT, 20I3 11.1. Section 134 (3) (i): No material changes and commitments which could affect the Company's financial position have occurred etween the end of the financial year of the Company and date of this report. 11.2. Section 43 (a) (ii): The Company has not issued any shares with differential rights and hence no information as per provisions of Section 43 (a) (ii) of the Act read with Rule 4 (4) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished. 11.3. Section 54 (1) (d): The Company has not issued any sweat equity shares during the year under review and hence no information as per provisions of Section 54 (1) (d) of the Act read with Rule 8 (13) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished. 11.4. Section 62 (1) (b): The Company has ESOP during the year under review and hence no information as per provisions of Section 62 (1) (b) is furnished. 12. DECLARATION BY INDEPENDENT DIRECTORS Mr. Mahesh Chandra an independent Director on the Board of your Company. In the opinion of the Board and as confirmed by these Directors, he fulfills the conditions specified in section 149 of the Companies Act, 2013 and the Rules made thereunder about their status as IDs of the Company. 13. VIGIL MECHANISM The Vigil Mechanism as envisaged in the Companies Act, 2013, the Rules prescribed thereunder and the Listing Agreement is implemented through the Company's Whistle Blower Policy to enable the Directors and employees of the Company to report genuin e concerns, to provide for adequate safeguards against victimisation of persons who use such mechanism and ma ke provision for direct access to the Chairman of the Audit Committee. 14. LISTING ON STOCK EXCHANGES The shares of the company are listed with Bombay Stock Exchange. With the wide and extensive network of Bombay Stock Exchange, the investors have access to online dealings in the company's equity shares across the Jcntry. The companmis in process of delisting of its equity shares from Delhi, Madras, Kolkata, Kanpur and Ludhiana stock exchanges as there is hardly any trading on these stock exchanges and listing fee payable to these exchanges no more offer commensurate benefits to the company and its investors. Therefore, delisting of the equity from all Stock Exchanges except Bombay Stock Exchange is considered necessary, firstly on the ground that the cost to the company would stand reduced and secondly that the interest of the members located in the regions where the said Stock Exchanges are located would remain unaffected. 15. GREEN INITIATIVES IN CORPORATE GOVERNANCE In line with the 'Green Initiative', the Company has effected electronic delivery of Notice of AGM and AR to those shareholders whose email ids were registered with the respective depository participants and downloaded from the depositories viz. National Securities Depository Limited/Central Depository Services (India) Limited. The Companies Act, 2013 and the underlying rules as well as Clause 32 of the listing agreement permit the dissemination of financial statements in electronic mode to the shareholders. Your directors are thankful to the shareholders for actively participating in the green initiative and seek your continued support for implementation of the green initiative. 16. DIRECTORS' RESPONSIBILITY STATEMENT To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(5) of the Companies Act, 2013: a) that in the preparation of the annual financial statements for the year ended June 30, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b) that such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at June 30, 2015 and of the profit of the Company for the year ended on that date; c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) That the annual financial statements have been prepared on a going concern basis; e) That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively. f) That systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. 17. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES All Related Party Transactions entered during the year were in the Ordinary Course of Business and on Arm's Length basis. Material Related Party Transactions, i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements, were entered during the year by your Company. Accordingly, the disclosure of Related Party Transactions to be provided under section I34(3)(h) of the Companies Act, 2013, in Form AOC - 2 is applicable and attached in this report. 18. HUMAN RESOURCES The well disciplined workforce which has served the company for two decades lies at the very foundation of the company's major achievements and shall well continue for the years to come. The management has always carried out systematic appraisal of performance. The company has always recognized talent and has judiciously followed the principle of rewarding performance. 19. BUSINESS RISK MANAGEMENT Although the company has long been following the principle of risk minimization as is the norm in every industry, it has now become a compulsion. Therefore, in accordance with clause 49 of the listing agreement the Board members were informed about risk assessment and minimization procedures after which the Board formally adopted steps for framing, implementing and monitoring the risk management plan for the company. The main objective of this policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues. In today's challenging and competitive environment, strategies for mitigating inherent risks in accomplishing the growth plans of the Company are imperative. The common risks inter alia are: Regulations, competition, Business risk, Technology obsolescence, Investments, retention of talent and expansion of facilities. Business risk, inter-alia, further includes financial risk, political risk, fidelity risk, legal risk. As a matter of policy, these risks are assessed and steps as appropriate are taken to mitigate the same. 20. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY The Company has adequate system of internal control to safeguard and protect from loss, unauthorized use or disposition of its assets. All the transactions are properly authorized, recorded and reported to the Management. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. The internal auditor of the company checks and verifies the internal control and monitors them in accordance with policy adopted by the company. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed. 21. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Loans, guarantees and investments covered under Section I86 of the Companies Act, 20I3, form part of the notes to the financial statements provided in this Annual Report. 22. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations. 23. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure 4". 24. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Sec tion I34(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, are not applicable. 25. PARTICULARS OF EMPLOYEES The information required pursuant to Section I97 read with Rule, 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is as follows: The company has one Executive Director to whom the Remuneration of Rs. 9,60,000 has been paid during the year. The particulars of the employees who are covered by the provisions contained in Rule 5(2) and rule 5(3) of Companies (Appointment and Remunerati on of Managerial Personnel) Rules, 20I4 are: a) Employed throughout the year - One b) Employed for part of the year - Nil The remuneration paid to all Key management Personnel was in accordance with remuneration policy adopted by the company 26. FIXED DEPOSITS The Company has not accepted any public deposits during FY 2014- 15 within the meaning of Section 73 of the Companies Act, 2013 and the rules made there under. 27. AUDITORS 27.1 STATUTORY AUDITORS M/s Sandeep Ramesh Gupta & Co., Chartered Accountants, the Auditors of the Company retire at the ensuing Annual General Meeting and shall be eligible for reappointed as the auditors of the Company from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting of the Company. As required under the provisions of section I39(I) of the Companies Act, 20I3, the Company has received a written consent from Sandeep Ramesh Gupta & Co., Chartered Accountants to their appointment and a Certificate, to the effect that their appointment, if made, would be in accordance with the Companies Act, 20I3 and the Rules framed thereunder and that they satisfy the criteria provided in section I4I of the Companies Act, 20I3. The Members are requested to ratify the appointment of the Statutory Auditors as aforesaid and fix their remuneration. The Audito rs' Report does not contain any qualification, reservation or adverse remark. 27.2 SECRETARIAL AUDITORS Pursuant to the provisions of section 204 of the Companies Act, 20I3 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Sudhir Arya, Practicing Company Secretary to undertake the Secretarial Audit of the Company. In terms of provisions of sub-section I of section 204 of the Companies Act, 20I3, the Company has annexed to this Board Report as Annexure B, a Secretarial Audit Report given by the Secretarial Auditor. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. 28. MANAGEMENT DISCUSSION AND ANALYSIS A detailed analysis of your Company's performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report. 29. CORPORATE GOVERNANCE A separate section on Corporate Governance forming part of the Directors' Report and the certificate from the Practicing Comp any Secretary confirming compliance of Corporate Governance norms as stipulated in Clause 49 of the Listing Agreement with the Indian Stock Exchanges is included in the Annual Report pursuant to clause 49 of the Listing Agreements. 3D. CAUTIONARY STATEMENT The statements contained in the Board's Report and Management Discussion and Analysis contain certain statements relating to the future and therefore are forward looking within the meaning of applicable securities, laws and regulations. Various factors such as economic conditions, changes in government regulations, tax regime, other statues, market forces and other associated and incidental factors may however lead to variation in actual results. 31. ACKNOWLEDGEMENTS Your Board of Directors wishes their sincere thanks to Clients, Government Regulators, Stock Exchanges, Statutory Bodies, Bankers, and Agencies, and Business Associates for having extended their continued support. Your Directors would like to place on record their sincere appreciation of the employees for their continuing support and unparallel efforts in ensuring an excellent all-round operational performance. Also Your Directors wish to extend their appreciation for the wholehearted, sincere and continuous support & belief extended by the members who have also been a tremendous source of support for the company. ON BEHALF OF THE BOARD OF DIRECTORS RITU PRASAD DIRECTOR DIN: D2341947 RAJAT PRASAD MANAGING DIRECTOR DIN: DDD62612 Place: New Delhi Date : 05.12.2015 |