To The Members,
The Board of Directors has the pleasure of presenting the 36th Annual Report of the company together with the Audited Statement of Accounts, Auditors' Report and the Report on the business and operations of the company, for the financial year ended 31st March 2023.
1. BACKGROUND
RR Financial Consultants Limited (RRFCL) is a Non-Systemically Important Non-Deposit taking Non-Banking Financial Company (“NBFC-ND-NSI”), holding a Certificate of Registration dated March 11th1998, from the Reserve Bank of India (“RBI”).
2. FINANCIAL RESULTS
The results of yours Company's consolidated financial prudence and business excellence for the period ended on 31st March, 2023 are as follows:
The Standalone financial results of the Company for the period under review are summarized below. The previous figures in the financial statements have been regrouped, wherever necessary
1. BUSINESS PERFORMANCE
The Gross Income of the company during the period under review is 77,502.09 as compared to 77,880.80 in the previous period. The Company registered a Profit after Tax and Depreciation amounting126.53 as against Profit of 170.90 in the previous year. The performance of the Company during the period under review has been satisfactory.
2. DIVIDEND
Your Directors have considered it financially prudent in the long-term interests of the Company to reinvest the profits into the business of the Company to build a strong reserve base and grow the business of the Company. No dividend has therefore been recommended for the year ended March 31, 2023.
3. CLOSURE OF SHARE TRANSFER BOOKS
The Register of Members and the Share Transfer Books of the company will be closed from Friday, 22nd September 2023 to Thursday, 28th September 2023 (both days inclusive) for the purpose of the 36th Annual General Meeting of the Shareholders of the company to be held on 28th September, 2023.
4. TRANSFER TO RESERVES
The Company proposes to retain the entire amount in the profit and loss account.
5. CONSOLIDATED FINANCIAL STATEMENTS
The Financial Statement of the Company for the Financial year 2022-23 are prepared in compliance with the accounting principles generally a ccepted in India, including the Indian Accounting Standards(Ind AS) prescribed under Section 133 of the Act, read with the companies (Indian Accounting Standards) Rule 2015,as amended, and other accounting principal accepted in India and as prescribed by Securities and Exchange Board of India (SEBI) under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as the SEBI Regulation). The Financial Statement has been prepared on the basis of the audited financial statement of the Company as approved by their respective Board of Directors.
Pursuant to the provisions of Section 136 of the Act, the Financial Statements of the Company, the Consolidated Financial Statements along with all relevant documents and Auditors report thereon form part of this Annual Report. The Financial Statements as stated above are also available on the website of the Company and can be accessed at the web link www.rrfcl.com
6. MATERIAL CHANGES AND COMMITMENT
There is no material changes affecting the financial position of the Company occurred during the Financial Year ended as on 31st March, 2023 to which this financial statement relates on the date of this report.
7. CHANGE OF REGISTERED OFFICE
During the year there is no change in registered office of the company.
8. SHARE CAPITAL
The issued, subscribed a nd paid up Equity Share Capital a on 31st March, 2023was110607000.During the year under review the Company has neither issued shares with differential rights as to dividend, voting or otherwise nor issued shares (including sweat equity shares) to the employees or Directors of the Company, under any Scheme. No disclosure is required under Section 67(3) (c) of the Act,in respect of voting rights not exercised directly by the employees of the Company as the provisions of the said Section are not applicable.
9. SUBSIDIARY COMPANIES
The Company has Six subsidiaries as on March 31, 2023. There are no associate companies or joint venture companies within the meaning of Section 2(6) of the Act. There has been no material change in the nature of the business of the subsidiaries.
Pursuant to the provisions of Section 129(3) of the Act, a statement containing the salient features of financial statements of the Company's subsidiaries in Form AOC-1 is attached to the financial statements of the Company.
Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents, and separate audited accounts in respect of subsidiaries, are available on the website of the Company.
As per sec 2 (87) of the Companies Act, 2013 the subsidiaries of subsidiaries of RRFC are deemed to be subsidiaries of RRFC.
Further, for details of subsidiaries of subsidiaries, please refer to the Corporate Governance Report, which is a part of this report.
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 R R Financial Consultants Limited. The Audit Committee of the Company regularly reviews the financials of the subsidiary companies. AOC-1 pursuant to section 129(3) of the act; statement containing the salient features of the financial statement of subsidiary/associate/joint venture is annexed herewith as (Annexure 1).
10. 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.
11. DIRECTORS AND KEY MANAGERIAL PERSONNEL
a) Board of Directors
During the year, there are some changes took place in the composition of the Board of Directors of the Company: Please refer to the Corporate Governance Report, which is part of this report.
b) Director coming up for retire by rotation
In accordance with the provisions of the Act, and the Articles of Association of the Company, Ms. Priyanka Singh retires by rotation and she has shown her willingness to continue her position and being eligible for re-appointment.
c) Independent Directors
The Independent Director holds office for a fixed term of five years and is not liable to retire by rotation. In accordance with Section 149(7) of the Act, each Independent Director has given a written declaration to the company that he/she meets the criteria of independence as mentioned under Section 149(6) of the Act and SEBI Regulations.
d) Board Effectiveness
Familiarization Programme for the Independent Director in compliance with the requirements of SEBI Regulations, the Company has put in place a familiarization programme for the Independent Directors to familiarize them with their role, rights and responsibility as Directors, the working of the Company, nature of the industry in which the Company operates, business model etc. The details of the familiarization programme are explained in Corporate Governance Report. The same is also available on the website of the Company.
e) Key Managerial Personnel
The following persons have been designated as Key Managerial Personnel of the Company pursuant to Section 2(51) and Section 203 of the Act, read with the Rules framed there under:
12. BOARD EVALUATION
The Board of Directors has carried out an annual evaluation of its own performance, board committees, and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 (‘SEBI Listing Regulations').
The performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc. as provided by the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017.
The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc.
The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In a separate meeting of independent directors, performance of non-independent directors and the board as a whole was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent directors, at which the performance of the board, its committees, and individual directors was also discussed. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.
13. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION AND OTHER DETAILS The Company's policy on directors' appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the Corporate Governance Report, which is a part of this report.
14. BOARD MEETINGS
Fifteen (15) Meetings of the Board were held during the year. For details of meetings of the board, please refer to the Corporate Governance Report, which is a part of this report.
15. COMMITTEE OF BOARD
a) AUDIT COMMITTEE
During the year Seven (7) 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 as per SEBI listing regulations.
b) NOMINATION AND REMUNERATION COMMITTEE
During the year, Four (4)Nominations and Remuneration Committee meeting was held, the details of which are given in Corporate Governance Report as prescribed under Companies Act, 2013 and clause 49 of the listing agreement.
c) STAKEHOLDER RELATIONSHIP COMMITTEE
During the year, no complain was registered by stakeholders. However, One (1) Stakeholders Relationship Committee meeting was held, and the detail of committee is given in Corporate Governance Report.
16. RISK MANAGEMENT POLICY
Your Directors have adopted a Risk Management Policy for the Company. The Audit Committee and the Board of Directors of the Company reviewed the risks, if any, involved in the Company from time to time, and took appropriate measures to minimize the same. The Audit Committee ensures that the Policy for Risk Management is adopted across the Company in an inclusive manner.
17. COMMENTS BY THE BOARD ON AUDIT QUALIFICATION
There were no qualifications, reservations or adverse remarks made either by the Statutory Auditors or by the Practicing Company Secretary in their respective reports.
18. PLEDGE OF SHARES
None of the equity shares of the directors of the Company are pledged with any banks or financial institutions.
19. DECLARATION BY INDEPENDENT DIRECTORS
The Independent Directors have submitted their disclosures to the Board regarding the fulfillment of all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.
20. VIGIL MECHANISM
The Company has established a vigil mechanism and overseas through the committee, the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided direct access to the Chairman of the Audit Committee on reporting issues concerning the interests of co-employees and the Company.
21. LISTING OF SHARES
Your Company's shares are listed and are being traded on the Bombay Stock Exchange Limited (BSE). The Listing Fees for the financial year 2022-23 has been paid.
22. GREEN INITIATIVES IN CORPORATE GOVERNANCE
In line with the ‘Green Initiative', the Company has effected electronic delivery of Notice of AGM and Annual Report 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.
23. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013, the board of directors, to the best of their knowledge and ability, confirm:
a) that in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;
b) that they have 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 of the Company for that period;
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.
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work performed by the internal, statutory and secretarial auditors and external consultants, including the audit of internal financial controls over financial reporting by the statutory a uditors, and the reviews performed by management a nd the relevant board committees, including the audit committee, the board is of the opinion that the Company's internal financial controls were adequate and effective during FY 2022-23.
24. HUMAN RESOURCES
The well disciplined workforce which has served the company for three 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.
25. 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.
26. ENHANCING SHAREHOLDER VALUE
Your Company firmly believes that its success in the marketplace and a good reputation are among the primary determinants of value to the shareholder. The organizational vision is founded on the principles of good governance and by the resolve to be a customer-centric organization which motivates the Company's Management to be aligned to deliver leading-edge building products backed with dependable after sales services.
Your Company is committed to creating and maximizing long term value for shareholder and essentially follows a four pronged approach to achieve this end.
a) By increasing all round operational efficiency,
b) By identifying strategies that enhance its competitive advantage,
c) By managing risks and pursuing opportunities for profitable growth,
d) By cementing relationships with other important stakeholder groups through meaningful engagement processes and mutually rewarding associations that enable it to create positive impacts on the economic, societal and environmental dimensions of the Triple Bottom Line.
Underlying this is also a dedication to value-friendly financial reporting that assures the shareholder and investor of receiving transparent and unfettered information on the Company's performance.
27. INTERNAL CONTROL SYSTEMS
a) Internal Control System and their adequacy
The Company has in place well defined and adequate internal controls commensurate with the size of the Company and the same were operating effectively throughout the year. The Company has an Internal Audit (IA) function. The scope and authority of the Internal Audit function is defined in the Internal Audit Charter. To maintain its objectives and independence, the IA function reports to the Chairman of the Audit Committee of the Board.
The Internal Auditor evaluates the efficiency and adequacy of internal control system, its compliance with operating systems and policies of the Company and accounting procedures at all locations of the Company. Based on the report of Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.
b) Internal Controls Over Financial Reporting
The Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations. During the year, such controls were tested and no reportable material weakness in the design or operations were observed. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information. The Company has adopted accounting policies which are in line with the Accounting Standards and the Act. These are in accordance with generally accepted accounting principles in India. Changes in policies, if required, are made in consultation with the Auditors and are approved by the Audit Committee. The Company has a robust financial closure, certification mechanism for certifying a dherence to various accounting policies, a ccounting hygiene a nd accuracy of provisions and other estimates.
28. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION
186 OF THE COMPANIES ACT, 2013
Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013, form part of the notes to the financial statements provided in this Annual Report.
29. ORDERS PASSED BY THE REGULATORS OR COURTS, IF ANY
No significant and material orders were passed by the Regulators, Courts or Tribunals impacting the going concern status and Company's operations in future.
30. EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of Section 92 and 134 of the Companies Act, 2013 read with the allied Rules, the Annual Return of the Company for Financial Year ended March 31, 2023 will be available on the website of the company i.e. www.rrfcl.com.
31. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
REFERRED TO IN SECTION 188(1) OF THE COMPANIES ACT, 2013.
All related party transactions that were entered during the financial year were in the ordinary course of business and were on arms length basis. There were no material related party transactions entered by the Company with Directors, KMPs or other persons which may have a potential conflict with the interest of the Company.
All related party transactions, wherever applicable, are placed before the Audit Committee. The quarterly disclosures of transactions with related parties are made to the Audit Committee.
The policy on materiality of Related Party Transactions and also on dealing with Related Party Transactions as approved by the Audit Committee and the Board of Directors is uploaded on the website of the Company In compliance with Section 134(3) of the Companies Act, 2013, particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 are enclosed, in the Form AOC-2, as a part of this report (Annexure-3)
32. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Particular in respect of Conservation of Energy, Technology absorption, Foreign Exchange earnings and outgo under Section 134(3) (m) of the Companies Act, 2013, read with rule 8(3) of the Companies (Accounts) Rules, 2014 is given as per Annexure-4 of this report.
33. DISCLOSURES UNDER SECTION 197 OF THE COMPANIES ACT, 2013 AND RULE 5 OF
THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014.
In accordance with the provisions of Section 197(12) of the Companies Act, 2013 and Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees are set out in the annexure to the Directors Report and forms part of this report. The ratio of the remuneration of each director to the median employees remuneration and other details in terms of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming part of this report as (Annexure-5).
34. FIXED DEPOSITS
The Company has not accepted any public deposits during FY 2022-23 within the meaning of Section 73 of the Companies Act, 2013 and the rules made there under.
35. AUDITORS
a) STATUTORY AUDITORS
M/s G.C. Agarwal & Associates, Chartered Accountants, Delhi (FRN: 017851N) was appointed as Chartered Accountants with approval of shareholders in 31st Annual General Meeting held on 2018 till the conclusion of AGM going to be held in 2023. Further, Board on the recommendation of audit committee, recommend the re-appointment of M/s G.C. Agarwal & Associates, Chartered Accountants, Delhi (FRN: 017851N) for 2nd term for the period of 5 years i.e. upto the conclusion of 41st Annual General Meeting to be held in 2028, to the shareholders for their approval.
There is no qualification, reservations or adverse remark in Statutory Auditor's report. The observations of Statutory Auditor in their Report read with relevant notes to Accounts are self-explanatory and therefore, do not require any further explanation.
b) SECRETARIAL AUDITORS
Pursuant to Section 204 of the Companies Act, 2013, the Company had appointedMr. Sudhir Arya, Practicing Company Secretaries, New Delhi as its Secretarial Auditor to conduct the Secretarial Audit of the Company for FY 2022-2023. The Report of Secretarial Auditor (Form MR-3) for the FY 2022-2023 is annexed to the report as (Annexure-6).
Secretarial Audit Report of Material Subsidiary (ies) of the company is enclosed herewith in (Annexure-6).
36. AUDITOR'S REPORT AND SECRETARIAL AUDIT REPORT
The statutory auditor's report and the secretarial audit report do not contain any qualifications, reservations, or adverse remarks or disclaimer. Secretarial audit report is attached to this report.
37. INSTANCES OF FRAUD, IF ANY REPORTED BY THE AUDITORS
There have been no instances of any fraud reported by the Statutory Auditors under Section 143(12) of the Act.
38. MANAGEMENT DISCUSSION AND ANALYSIS
A separate report on Management Discussion and Analysis relating to business and economic environment surrounding your company is enclosed as a part of the Annual Report.
39. PREVENTION OF SEXUAL HARASSMENTPREVENTION OF SEXUAL HARASSMENT
Your Company has framed ‘Anti Sexual Harassment Policy' at workplace and has constituted an Internal Complaints Committee (ICC) as per the requirement of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed thereunder. No complaints with allegations of any sexual harassment were reported during the year under review.
40. CORPORATE GOVERNANCE
Your Company is committed to achieve the highest standards of Corporate Governance and adheres to the Corporate Governance requirements set by the Regulators/ applicable laws. Our focus on corporate governance, where investor and public confidence in companies is no longer based strictly on financial performance or products and services but on a company's structure, its Board of Directors, its policies and guidelines, its culture and the behavior of not only its officers and directors, but also all of its employees.
Our approach is proactive, starting with our Leadership Team. It is also deeply ingrained in our corporate culture, guiding how we work and how we do business. We apply and adhere to the rules-not just those required by government, but also those we impose on ourselves to meet the highest possible standards.
We continually discuss bylaws and governance practices, changing our policies when necessary and pointing out areas where we need to improve our performance. We also compare our practices to the criteria used by outside organizations to evaluate corporate performance.
A separate section on Corporate Governance standards followed by the Company, as stipulated under regulation 34(3) and 53(f) read with schedule V of Securities and Exchange Board of India (Listing obligations and Disclosure Requirements) Regulations, 2015 is enclosed as an Annexure to this report. The report on Corporate Governance also contains certain disclosures required under the Companies Act, 2013.
A certificate from G.C. Agarwal & Associates, Chartered Accountants regarding compliance with the conditions of Corporate Governance as stipulated under schedule V of Securities and Exchange Board of India (Listing obligations and Disclosure Requirements) Regulations, 2015 is attached to the Corporate Governance Report.
41. OTHER STATUTORY DISCLOSURES
During the year under review, there were no transaction requiring disclosure or reporting in respect of matters relating to:
a) Details relating to deposits covered under Chapter V of the Act. The Company had no outstanding, unpaid or unclaimed public deposits during the FY 2023;
b) Maintenance of cost records under sub-section (1) of Section 148 of the Act is not applicable to the Company;
c) Issue of equity shares with differential rights as to dividend, voting or otherwise;
d) Issue of Sweat Equity shares;
e) Any remuneration or commission to the Wholetime Director of the Company from the subsidiaries of the Company;
f) No significant and material orders passed by the Regulators/Courts/Tribunals which impact the going concern status and Company's operations in future;
g) No change in the nature of the business of the Company;
h) No application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016; and
i) No instance of any one-time settlement with any Banks or Financial Institutions. There have been no material changes and commitment, affecting the financial position of the Company which occurred between the end of the financial year 2022-23 till the date of this Report, other than those already mentioned in this Report.
42. Details relating to deposits covered under Chapter V of the Act. The Company had no outstanding, unpaid or unclaimed public deposits during the FY 2022-23;
43. COMPLIANCE WITH SECRETARIAL STANDARDS
During the year under review, the Company has duly complied with the applicable provisions of the Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by The Institute of Company Secretaries of India (ICSI).
44. DISCLOSURE REQUIREMENTS
As per SEBI Listing Regulations, the Corporate Governance Report with the Auditors' Certificate thereon, and the Management Discussion and Analysis are attached, which forms part of this report. The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.
CAUTIONARY NOTE
Certain statements in the Management Discussion and Analysis section may be forward-looking and are stated as required by applicable laws and regulations. Many factors may affect the actual results, which would be different from what the Directors envisage in terms of the future performance and outlook. Investors are cautioned that this discussion contains forward looking statement that involve risks and uncertainties including, but not limited to, risks inherent in the Company's growth strategy, dependence on certain businesses, dependence on availability of qualified and trained manpower and other factors discussed. The discussion and analysis should be read in conjunction with the Company's financial statements and notes on accounts.
APPRECIATION
The Directors thank the Company's employees, customers, vendors, investors, and academic partners for their continuous support. The Directors also thank the Government of India, governments of various states in India, and concerned government departments and agencies for their co-operation. Directors appreciate and value the contribution made by every member of the RR family.