BOARDS' REPORT Dear Member, BFL Developers Limited Your directors are pleased to present the 21st Annual Report of your Company together with the Annual Financial Statements for the Financial Year 2015-16 PERFORMANCE REVIEW The net receipts from operations during the year under review were Rs. 94,03,866/-as against Rs. 30,48,934/- in the previous year. The profit/ (Loss) after-tax is Rs. 2,21,818/-as against Rs. 2,11,062/- in the previous year. DIVIDEND Following the conservative approach to retain profits, your Directors did not recommend payment of any dividend for the Financial Year 2015-16. TRANSFER TO RESERVES: As per requirement of RBI regulations, the Company has transferred the amounts to various reserves during Financial Year ended March 31,2016 as given in the notes of profit and loss account. NUMBER OF MEETINGS OF BOARD OF DIRECTORS The Meetings of the Board are held at the Registered Office of the Company at 1, Tara Nagar, Ajmer Road, Jaipur 302 006. During the year under review, 4 (Four) Board Meetings were held on 16.05.2015, 07.08.2015, 03.11.2015 and 21.01.2016. All the Board members and the senior management personnel have affirmed compliance with the Code of Conduct during the year ended on 3lst March, 2016. DECLARATION OF INDEPENDENCE BY DIRECTORS The Independent Non-Executive Directors of the Company, viz. Mr. Mahendra Kumar Dugar, Mr. Puneet Kumar Gupta and Mr. Surendra Mehta have affirmed that they continue to meet all the requirements specified under sub-section (6) of section 149 of Companies Act, 2013 in respect of their position as an "Independent Director" of BFL Developers Limited. MANAGEMENTAND BOARDOF DIRECTORS Mr. Surendra Mehta was appointed as an Additional Director on the Board of the company w.e.f. 18.11.2014, and pursuant to the approval of the members at the 20thAnnual General Meeting held on July 18,2015 his appointment was regularized as Independent Non Executive Director on the terms and conditions as mentioned in the resolution in the Notice for the 20th AGM. Mr. Mahendra Kumar Baid, Managing Director of the Company who superior is liable to retire by rotation pursuant to the provisions of the Companies Act, 2013 retires by rotation in the ensuing AGM and being eligible, offers himself for reappointment. AUDITORS • Statutory Auditors M/s. Khilnani & Associates, Chartered Accountants (Firm Registration No. 005776C), Jaipur were appointed as Statutory Auditors to hold office till the conclusion of the 25th Annua I General Meeting of Company subject to ratification from the members of the Company every year. Ratification of their appointment for the financial year 2016-17 is sought in the ensuing AGM. The company has received consent from M/s. Khilnani & Associates, Chartered Accountants to the effect that their appointment, if made, would be within the prescribed limits under Section 139 of the Companies Act, 2013 and that they are not disqualified for appointment within the meaning of Section 141 of the said Act. Accordingly, the Board of Directors has recommended the ratification of appointment as Statutory Auditors. The Financial Statements and the Auditor's Report for the financial year ended 31st March, 2016 are self-explanatory and do not call for any further comments. • Secretarial Auditor As per Section 204 of Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, every Listed Company is required to appoint Secretarial Auditor to carry out Secretarial Audit of the Company. In consonance with the requirements of Section 204 of the Companies Act, 2013and rules made there under, M/s V. M. & Associates, Company Secretaries in Practice, Jaipur, was appointed to conduct the secretarial audit of the Company for the financial year 2015-16. A Secretarial Audit Report issued by M/s V. M. & Associates, Company Secretaries in Practice, in respect of the secretarial audit of the Company for the financial year ended 31st March, 2016, is given in Annexure I to this Report The Secretarial Audit report for the financial year ended 31st March, 2016is self explanatory and does not call for any further comments. The Board has re-appointed M/s V. M. & Associates, Company Secretaries in Practice, Jaipur as Secretarial Auditor of the Company to carry out secretarial audit of the Company for the financial year 2016-17. • Internal Auditor Pursuant to Section 138 of Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014, every Listed Company is required to appoint an Internal Auditor or a firm of Internal Auditors to carry out Internal Audit of the Company. In consonance with the aforementioned, M/s ShivShanker Khandelwal Co., Chartered Accountants, Jaipur was appointed to conduct the Internal Audit of the Company for the financial year 2015-16. The Board has re-appointed M/s Shiv Shanker Khandelwal & Co., Chartered Accountants, Jaipur as the Internal Auditor of the Company for the financial year 2016 -17. LOANS, GUARANTEES AND INVESTMENTS IN SECURITIES BY THE COMPANY Pursuant to Section 186(11) of the Companies Act, 2013 loans made, guarantees given or securities provided or acquisition of securities by a Non Banking FinancialCompany in the ordinary course of its business are exempted from disclosure in the Annual Report. RELATED PARTY TRANSACTIONS All the related party transactions that were entered during the financial year are done on arm's length basis. The Board of Directors entered in related party transaction with Baid Leasing and Finance Company Ltd. involving rendering of services in the ordinary course of business on arms length basis for the financial year 2015-16 to the tune of Rs. 10 lacs approx, ratification for which is sought for in the ensuing AGM and for approval for the financial year 2016-17 for an aggregate amount of Rs. 25 Lacs is sought. Relevant Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 is given in Annexure II to this Report. SPECIAL BUSINESS AND POSTAL BALLOT The Board forfeited 13,59,300 party paid up equity shares on June 20, 2003, which are now being reissued on a preferential basis in the ensuing AGM, details pertaining to the same are chalked out in the notice of 21st AGM and the explanatory statement annexed to the notice. With the applicability of Companies Act, 2013, most of the provisions in the articles of the company are not in consonance with the extant rules and regulation, therefore the Board deem it fit and proper to adopt new set of Articles of Association of the Company, details pertaining to the same are chalked out in the notice of 21st AGM. During the year under review the Company obtained the consent of the shareholders by passing Special Resolution through Postal Ballot for the following matters: to borrow money u/s 180(1} (c) of the Companies Act, 2013 up to a sum of Rs.25O,OO,00,000 (Rs. Two Hundred and Fifty Crores only}; and • to create charge or mortgage, sell/ lease or otherwise dispose off the whole or substantially the whole of the undertaking(s) and /orasset(s), present and future of the Company u/s 180 (l}(a), to secure borrowings upto a sum of Rs.250,00,00,000 (Rs. Two Hundred and Fifty Crores only). RISK MANAGEMENT The Company has developed and implemented a risk management policy which encompasses practices relating to identification, assessment monitoring and mitigation of various risks to key business objectives. The Risk management framework of the Company seeks to minimize adverse impact of risks on our key business objectives and enables the Company to leverage market opportunities effectively The various key risks to key business objectives are as follows; Liquidity Risk: It is the risk that the Company will be unable to meet its financial commitment to a Bank/ Financial Institution in any location, any currency at any point in time. Liquidity risk can manifest in three different dimensions for the Company. Funding Risk: To replace net outflows due to unanticipated outflows. Time Risk: To compensate for non receipt of expected inflows of funds. Call Risk: Due to crystallization of contingent liabilities or inability to undertake profitable business opportunities when desirable. Interest Rate Risk: It is the risk where changes in market interest rates might adversely affect the Company's financial condition. The short term/immediate impact of changes in interest rates are on the Company's Net Interest Income (Nil). On a longer term, changes in interest rates impact the cash flows on the assets, liabilities and off-balance sheet items, giving rise to a risk to the net worth of the Company arising out of all repricing mismatches and other interest rate sensitive positions. NOMINATION AND REMUNERATION POLICY This Nomination and Remuneration Policy (the "Policy") applies to the Board of Directors (the "Board"), Key Managerial Personnel (the "KMP") and the Senior Management Personnel of BFL Developers Limited (the "Company"). "Key Managerial Personnel" (KMP) means— (i) the Chief Executive Officer or the Managing Director or the Manager (ii) the Company Secretary; (iii) the Whole-time Director: (iv) the Chief Financial Officer; and (v) such other officer as may be prescribed; The term "Senior Management Personnel" means to include all members other than the Directors and KMPs of the Company, who are members of management one level below the Executive Directors. This Policy is in compliance with Section 178 of the Companies Act, 2013 read along with the applicable rules thereto and applicable clauses of SEBI LODR and includes formal evaluation framework of the Board. 1. Purpose The primary objective of the Policy is to provide a framework and set standards for the nomination, remuneration and evaluation of the Directors, Key Managerial Personnel and officials comprising the senior management. The Company aims to achieve a balance of merit, experience and skills amongst its Directors, Key Managerial Personnel and Senior Management. 2. Accountabilities 2.1 The Board is ultimately responsible for the appointment of Directors and Key Managerial Personnel. 2.2 The Board has delegated responsibility for assessing and selecting the candidates for the role of Directors, Key Managerial Personnel and the Senior Management of the Company to the Nomination and Remuneration Committee which makes recommendations & nominations to the Board. 3. Nomination and Remuneration Committee The Nomination and Remuneration Committee is responsible for: 3.1 reviewing the structure, size and composition (including the skills, knowledge and experience) of the Board at least annually and making recommendations on any proposed changes to the Board to complement the Company's corporate strategy, with the objective to diversify the Board; 3.2 identifying individuals suitably qualified to be appointed as the KMPs or in the senior management of the Company; 3.3 recommending to the Board on the selection of individuals nominated for Directorship; 3.4 making recommendations to the Board on the remuneration payable to the Directors / KMPs/Senior Officials sp appointed /reappointed; 3.5 assessing the independence of independent directors; 3.6 such other key issues/matters as maybe referred by the Board or as may be necessary in view of the SEBI LODR and provision of the Companies Act 2013 and Rules there under. 3.7 to make recommendations to the Board concerning any matters relating to the continuation in office of any Director at any time including the suspension or termination of service of an Executive Director as an employee of the Company subject to the provision of the law and their service contract; 3.8 ensure that level and composition of remuneration is reasonable and sufficient, relationship of remuneration to performance is clear and meets appropriate performance benchmarks; 3.9 to devise a policy on Board diversity; 3.10 to develop a succession plan for the Board and to regularly review the plan; The Nomination and Remuneration Committee comprises of the following: a) The Committee shall consist of a minimum 3 non-executive directors, at least one-half of them being independent. b) Minimum two (2) members shall constitutes quorum for the Committee meeting. c) Membership of the Committee shall be disclosed in the Annual Report. d) Term of the Committee shall be continued unless terminated by the Board of Directors. CHAIRMAN a) Chairman of the Committee shall bean Independent Director. b) Chairperson of the Company may be appointed as a member of the Committee but shall not be a Chairman of the Committee. c) In the absence of the Chairman, the members of the Committee present at the meeting shall choose one amongst them to act as Chairman. d) Chairman of the Nomination and Remuneration Committee meeting could be present atthe Annual General Meeting or may nominate some other member to answer the shareholders' queries. COMMITTEE MEMBERS'INTERESTS a) A member of the Committee is not entitled to be present when his or her own remuneration is discussed at a meeting or when his or her performance is being evaluated. b) The Committee may invite such executives, as it considers appropriate, to be present atthe meetings of the Committee. a) Matters arising for determination at Committee meetings shall be decided by a majority of votes of Members present and voting and any such decision shall for all purposes be deemed a decision of the Committee. b) In the case of equality of votes, the Chairman of the meeting will have a casting vote. 4. Appointment of Directors/KMPs/Senior Officials 4.1 Enhancing the competencies of the Board and attracting as well as retaining talented employees for role of KM P/ a level below KMP are the basis for the Nomination and Remuneration Committee to select a candidate for appointment to the Board. When recommending a candidate for appointment, the Nomination and Remuneration Committee has regard to: -assessing the appointee against a range of criteria which includes but not be limited to qualifications, skills, regional and industry experience, background and other qualities required to operate successfully in the position, with due regard for the benefits from diversifying the Board; -the extent to which the appointee is likely to contribute to the overall effectiveness of the Board, work constructively with the existing directors and enhance the efficiencies of the Company; -the skills and experience that the appointee brings to the role of KMP/Senior Official and how an appointee will enhance the skill sets and experience of the Board as a whole; - the nature of existing positions held by the appointee including directorships or other relationships and the impact they may have on the appointee's ability to exercise independent judgment; 4.2 Personal specifications: - Degree holder in relevant disciplines; - Experience of management in a diverse organization; - Excellent interpersonal, communication and representational skills; - Demonstrable leadership skills; - Commitment to high standards of ethics, personal integrity and probity; -Commitment to the promotion of equal opportunities, community cohesion and health and safety in the workplace; - Having continuous professional development to refresh knowledge and skills. 5. Letters of Appointment Each Director/KMP/Senior Officials is required to sign the letter of appointment with the Company containing the terms of appointment and the role assigned in the Company. Remuneration of Directors, Key Managerial Personnel and Senior Management The guiding principle is that the level and composition of remuneration shall be reasonable and sufficient to attract, retain and motivate Directors, Key Management Personnel and other senior officials. The Directors, Key Management Personnel and other senior official's salary shall be based & determined on the individual person's responsibilities and performance and in accordance with the limits as prescribed statutorily, if any. The Nominations & Remuneration Committee determines individual remuneration packages for Directors, KMPs and Senior Officials of the Company taking into account factors it deems relevant, Including but not limited to market, business performance and practices in comparable companies, having due regard to financial and commercial health of the Company as well as prevailing laws and government/other guidelines. The Committee consults with the Chairman of the Board as it deems appropriate. Remuneration of the Chairman is recommended by the Committee to the Board of the Company. (i) Remuneration: a) Base Compensation (fixed salaries) Must be competitive and reflective of the individual's role, responsibility and experience In relation to performance of day-to-day activities, usually reviewed on an annual basis; (includes salary, allowances and other statutory/non-statutory benefits which are normal part of remuneration package in line with market practices). b) Variable salary: The Committee may in its discretion structure any portion of remuneration to link rewards to corporate and individual performance, fulfillment of specified improvement targets or the attainment of certain financial or other objectives set by the Board. The amount payable is determined by the Committee, based on performance against pre-determined financial and non-financial metrics. (ii) Statutory Requirements: Section 197(5) provides for remuneration byway of a fee to a director for attending meetings of the Board of Directors and Committee meetings or for any other purpose as may be decided by the Board. Section 197{1) of the Companies Act, 2013 provides for the total managerial remuneration payable by the Company to its directors, including managing director and whole time director, and its manage in respect of any financial year shall not exceed eleven percent of the net profits of the Company computed in the manner laid down in Section 198 in the manner as prescribed under the Act. The Company with the approval of the Shareholders and Central Government may authorize the payment of remuneration exceeding eleven percent of the net profits of the company, subject to the provisions of Schedule V The Company may with the approval of the shareholders authorize the payment of remuneration up to five percent of the net profits of the Company to its anyone Managing Director/Whole Time Director/Manager and ten percent in case of more than one such official. The Company may pay remuneration to its directors, other than Managing Director and Whole Time Director up to one percent of the net profits of the Company, if there is a managing director or whole time director or manager and three percent of the net profits in any other case. The net profits for the purpose of the above remuneration shall be computed in the manner referred to in Section 198 of the Companies Act, 2013. 6.1 The Independent Directors shall not be entitled to any stock option and may receive remuneration by way of fee for attending meetings of the Board or Committee thereof or for any other purpose as may be decided by the Board. The sitting fee to the Independent Directors shall not be less than the sitting fee payable to other directors. 6.2 The remuneration payable to the Directors shall be as per the Company's policy and shall be valued as per the Income Tax Rules. 6.3 The remuneration payable to the Key Managerial Personnel and the Senior Management shall be as may be decided by the Board having regard to their experience, leadership abilities, initiative taking abilities and knowledge base. FORMAL ANNUAL EVALUATION The evaluation/assessment of the Directors, KMPs and the senior officials of the Company is to be conducted on an annual basis and to satisfy the requirements of the Companies Act, 2013. The following criteria assist in determining how effective the performances of the Directors/KMPs/ Senior officials have been: • Leadership & stewardship abilities; • Contributing to clearly define corporate objectives & plans; • Communication of expectations & concerns clearly with subordinates; • obtain adequate, relevant & timely information from external sources; • review& approval achievement of strategic and operational plans, objectives, budgets; • regular monitoring of corporate results against projections; • identify, monitor & mitigate significant corporate risks; • assess policies, structures & procedures; • direct, monitor & evaluate KMPs, senior officials; • review management's succession plan; • effective meetings; • assuring appropriate board size, composition, independence, structure; • clearly defining roles & monitoring activities of committees; • review of corporation's ethical conduct. Evaluation on the aforesaid parameters was conducted by the Independent Directors for each of the Executive/Non-independent Directors in a separate meeting of the Independent Directors. The Board evaluated/assessed each of the Directors along with its own performance and that of the committees on the aforesaid parameters. ASSOCIATE COMPANIES During the year under review, there was no associate Company. FIXEDDEPOSITS The Company has invited or accepted any fixed deposit from the public during the year under review. INTERNAL FINANCIAL CONTROL SYSTEMS The Company has put in place inadequate system of internal control commensurate with its size and nature of business. These systems provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes, safeguarding of assets of the Company and ensuring compliance with corporate policies. The Audit Committee reviews adherence to internal control systems and internal audit reports. COMPOSITION OF AUDIT COMMITTEE The Audit Committee comprises of 3 (three) Non-executive Slndependent Director and as on March 31, 2016 was chaired by Mr. Mahendra Kumar Dugar. TERMS OF REFERENCE OF AUDIT COMMITTEE: The terms of reference of the Audit Committee inter alia include the following: • the recommendation for appointment, remuneration and terms of appointment of auditors of the Company; • review and monitor the auditor's independence and performance, and effectiveness of audit process; • examination of the financial statement and the auditor's report • approval or any subsequent modification of transactions of the Company with related parties; • scrutiny of inter-corporate loans and investments; • valuation of undertakings or assets of the Company, wherever it is necessary; • evaluation of internal financial controls and risk management systems; • monitoring the end "use of funds raised through pub ic offers and related matters. VIGIL MECHANISM In May, 2014, the Board adopted and implemented the vigil mechanism/whistleblower policy that adopts global best practices. We have established a vigil mechanism for Directors and employees to report concerns and unethical behavior, actual or suspected fraud or violation of our code of conduct and ethics. It also provides for adequate safeguards against the victimization of persons who use such mechanism and make provision for direct access to the chairperson of the Audit Committee in exceptional cases. The functioning of the vigil mechanism is reviewed by the Audit Committee from time to time. Further no personnel has been denied access to the audit committee as per Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015 ("SEBI LODR") CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The operations of your company are not energy intensive. Furthermore, the Company, being a non-banking finance company (NBFCJ, does not have any manufacturing activity, The directors, therefore, have nothing to report on 'conservation of energy and technology absorption'. However, the Company is taking initiatives for conservation of energy The particulars relating to foreign exchange earnings and outgo are NIL. DIRECTORS'RESPONSIBILITY STATEMENT Pursuant to sub section 3 (c) of Section 134 of the Companies Act, 2013, the Board of Directors of the Company hereby state and confirm that: i. in the preparation of the annual accounts for the year ended March 31,2016, the applicable accounting standards have been followed and there are no material departures from the same; ii. the directors 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 and loss of the company for that period; iii. the directors have 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; iv. the directors have prepared the annual accounts on agoing concern basis; v. the directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and; vi. the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 Your Com pa ny has always believed in providing a safe and harassment free workplace for every individual working in its premises through various interventions and practices. The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment. The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee(ICC) hasbeenset up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) ore covered underthis policy. The following is a summary of sexual harassment complaints received and disposed off during the year 2015-16 • Number of complaints received: NIL • Number of complaints disposed off: NIL EXTRACT OF THE ANNUAL RETURN Relevant extract of annual return inform no. MGT-9 as on the financial year ended on March 31,2016 is given in Annexure III to this Report. EMPLOYEE REMUNERATION (A) None of the employees of the company was in receipt of the remuneration exceeding the limits prescribed u/s 197(12) read with rule 5, sub-rule 2 of The Companies (Appointment and Remuneration of Managerial Personnel) of the Companies Act, 2013 during the year under review. (B) The ratio of the remuneration of each director to the median employee's remuneration and other details in terms of sub-section 12 of Section 197 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 IV. MANAGEMENT DISCUSSIONS ANALYSIS REPORT Management Discussion & Analysis report pursuant to SEBI LODR forms part of the Annual Report for the Financial Year 2015-16, which is presented elsewhere. CORPORATE GOVERNANCE REPORT As per the SEBI LODR, compliance with the provisions of regulation 17 through 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46andparaC,DandEof Schedule V is not mandatory for the time being, in respect of the following class of companies: a. Companies having paid up equity share capital not exceeding Rs.10 crore and Net Worth not exceeding Rs.25 crore, as on the last day of the previous financial year; b. the listed entity which has listed its specified securities on the SME Exchange; As such our Company falls in the ambit of aforesaid exemption (a); consequently Corporate Governance Report does not forms part of the Annual Report for the Financial Year 2015-16. LISTINGOFSECURITIES Ahmadabad Stock Exchange Ltd. is in the process of de-recognition. Further, the Company has been granted listing with BSE Ltd under the Direct Listing norms vide its approval dated February 17,2016. ACKNOWLEDGEMENTS Your Board acknowledges with appreciation, the invaluable support provided by the Company's stakeholders, auditors, advisors and business partners, all its customers for their patronage. Your Board records with sincere appreciation the valuable contribution made by employees at all levels and looks forward to their continued commitment to achieve further growth and take up more challenges that the Company has set for the future. FOR AND ON BEHALF OF THE BOARD Sd/- SOBHAG DEVI BAID (Director) DIN:00019831 MAHENDRA KUMAR BAID (Managing Director) DIN:00009828 PLACE: JAIPUR DATE: 14.05.2016 |