To the Members of
A. K. Capital Services Limited
The Directors of your Company presents the 24th Annual Report of the Company togetherwith the annual audited consolidated and standalone financial statements for the FinancialYear ended March 31 2017.
A summary of the financial performance of the Company both on consolidated andstandalone basis for the Financial Year 2016-17 as compared to the previous financialyear is given below:
|Consolidated financial highlights of A. K. Capital Services Limited ||(Rs. in Crore except per share data) |
|Particulars ||2016-17 ||2015-16 |
|Total income ||338.94 ||245.62 |
|Total expenditure ||249.72 ||186.15 |
|Prot bef ore tax ||89.22 ||59.47 |
|Provision for tax ||31.40 ||17.60 |
|Prot after tax ||57.82 ||41.87 |
|Less: Share of minority interest ||0.39 ||0.29 |
|Prot f or the year ||57.43 ||41.58 |
|Add: Surplus brought forward from previous year ||305.53 ||275.05 |
|Less: Transfer of pre-acquisition prot ||0.07 ||0.09 |
|Prot a vailable for appropriation ||362.89 ||316.54 |
|Less: Appropriations || || |
|Transfer to general reserves ||- ||1.90 |
|Transfer to special reserves ||6.22 ||4.34 |
|Proposed dividend # ||- ||3.96 |
|Dividend distribution tax ||- ||0.81 |
|Surplus carried to the Balance Sheet ||356.67 ||305.53 |
|Earnings per equity share (face value Rs. 10/- per share) || || |
|Basic (Rs.) ||87.01 ||63.00 |
|Diluted (Rs.) ||87.01 ||63.00 |
Standalone financial highlights of A. K. Capital Services Limited
| ||( Rs. in Crore except per share data) |
|Particulars ||2016-17 ||2015-16 |
|Total income ||96.27 ||71.97 |
|Total expenditure ||60.04 ||44.69 |
|Prot before tax ||36.23 ||27.28 |
|Provision for tax ||11.86 ||8.71 |
|Prot after tax ||24.37 ||18.57 |
|Add: Surplus brought forward from previous year ||233.78 ||221.88 |
|Prot a vailable for appropriation ||258.15 ||240.45 |
|Less: Appropriations || || |
|Transfer to general reserves ||- ||1.90 |
|Proposed dividend # ||- ||3.96 |
|Dividend distribution tax ||- ||0.81 |
|Surplus carried to the balance sheet ||258.15 ||233.78 |
|Earnings per equity share (face value Rs. 10/- per share) || || |
|Basic (Rs.) ||36.93 ||28.14 |
|Diluted (Rs.) ||36.93 ||28.14 |
# during the previous year the Company had made a provision for the proposed dividenddeclared by the Board of Directors as per the requirements of Pre revised AccountingStandard 4- Contingencies and events occurring after the balance sheet date (AS 4).However the said requirement has been amended vide MCA notication G.S.R. 364 (E) datedMarch 30 2016 issued by the Ministry of Corporate Affairs consequently no provision hasbeen made in respect of aforesaid dividend proposed by the Board of Directors for the yearended March 31 2017.
FINANCIAL PERFORMANCE AND STATE OF AFFAIRS OFTHE COMPANY
The consolidated turnover of your Company stood at Rs. 338.94 Crores for the FinancialYear ended March 31 2017 as against Rs. 245.62 Crores for the previous year. Theconsolidated prot before tax is Rs. 89.22 Crores for the current year as against Rs. 59.47Crores in the previous year. After making provision for tax the consolidated net prot ofyour Company is Rs. 57.82 Crores as against Rs. 41.87 Crores in the previous year.
On standalone basis your Company earned gross income of Rs. 96.27 Crores during theyear under review as against Rs. 71.97 Crores reported in the previous year. The protbefore tax is Rs. 36.23 Crores as against the Rs. 27.28 Crores during the previous year.After making provision for tax the net prot of your Company is Rs. 24.37 Crores asagainst the net prot of Rs.18.57 Crores in the previous year.
The Board at its Meeting held on May 20 2017 has recommended a nal dividend @ 60%i.e. Rs. 6/- per equity share (on the face value of Rs. 10/- per equity share) on6600000 equity shares for the Financial Year 2016-17. The amount of dividend on equityshares and tax thereon aggregates to Rs. 4.77 Crore.
The payment of the nal dividend is subject to the approval of the members at theensuing Annual General Meeting (AGM) and shall be paid to those members whose names appearin the Register of Members as on Friday August 18 2017. The Register of Members andShare Transfer Books will remain closed from Saturday August 19 2017 to Thursday August24 2017 (both days inclusive). The Annual General Meeting of the Company is scheduled tobe held on Saturday September 16 2017.
ABRIDGED FINANCIAL STATEMENTS
In terms of the provisions of Section 136 of the Companies Act 2013 abridgedfinancial statements as at March 31 2017 and the Auditors Report on the abridgedfinancial statement forms part of the Annual Report. Full version of the Annual Report ofthe Company will be available on the Companys website: www.akcapindia.com and will also bemade available to the members of the Company on request.
During the year under review the Company has not transferred any amount to the GeneralReserves.
On consolidated basis your Company posted consolidated revenue of Rs. 338.94 Croresand a consolidated prot after tax (after minority interest) of Rs. 57.43 Crores.
As on March 31 2017 your Company has the following subsidiary companies:
Sr. No. Name of the subsidiaries
1. A. K. Stockmart Private Limited
2. A. K. Capital Corporation Private Limited
3. A. K. Wealth Management Private Limited
4. A. K. Capital (Singapore) Pte. Ltd.
5. A. K. Capital Finance Private Limited
During the year under review A. K. Capital Finance Private Limited (AKCFPL) materialsubsidiary of the Company has issued and allotted 23500 Secured Rated ListedRedeemable Non-Convertible Debentures of face value of Rs. 1 lakh each aggregating to Rs.235 Crores on private placement basis. The said debentures are listed on BSE Limited.Pursuant to the listing of said debentures AKCFPL is now categorized as listed entity asper Listing Regulations 2015.
The Consolidated Financial Statements has been prepared under the historical costconvention on accrual basis and in accordance with the Generally Accepted AccountingPrinciples (GAAP) in compliance with the provisions of the Companies Act 2013 (the Act)including the Accounting Standards specied under Section 133 of the Act read with Rule 7of the Companies (Accounts) Rules 2014 and forms part of this Annual Report.
In terms of Section 129(3) of the Act read with Rule 5 of Companies (Accounts) Rules2014 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 aStatement containing salient features of financial statements of subsidiaries in FormAOC-1 as prescribed in the Companies (Accounts) Rules 2014 forms a part and is annexed tothe Annual Report.
The financial statements of the subsidiary companies have been placed on the website ofthe Company www.akcapindia.com. Any member interested in obtaining a copy of financialstatement of the subsidiaries may write to the Company Secretary at the Registered Ofceof the Company. These documents will also be available for inspection till the date of AGMduring the business hours at the Registered Ofce of the Company.
There was no change in the number of subsidiaries or associate companies during theyear.
In accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the Company has two material subsidiaries namely A. K. Capital Finance PrivateLimited & A. K. Stockmart Private Limited.
The Policy for determining the material subsidiaries has been formulated and adopted bythe Board. The Policy may be accessed on the Companys website at link:http://www.akcapindia.com/WebSiteDocuments/Policy%20for%20Determining%20Material%20Subsidiary.pdf
DIRECTORS AND KEY MANAGERIAL PERSONNEL
As on March 31 2017 the Board of Directors (Board) of your Company comprised of sixDirectors of which two are Executive Directors one Woman Director who is a Non-ExecutiveNon-Independent Director and three are Non-Executive Independent Directors. The Chairmanof the Company is Non-Executive Independent Director and 50% of the Board comprises ofIndependent Directors. The composition of the Board is in consonance with SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and in accordance with theapplicable provisions of the Companies Act 2013 as amended from time to time.
In accordance with the Articles of Association of the Company and the provisions of theSection 152 of the Companies Act 2013 Mr. A. K. Mittal (DIN: 00698377) though appointedas Managing Director for a x ed term of 5 years with effect from April 1 2015 willretire by rotation at the ensuing Annual General Meeting and being eligible offershimself for re-appointment to enable compliance by the Company with the provisions ofSection 152 of the Companies Act 2013. The details of Mr. A. K. Mittal are stated in thenotice of the 24th Annual General Meeting of the Company.
Key Managerial Personnel
The following persons are the Key Managerial Personnels (KMPs) of the Company as perthe provisions of Section 203 of the Companies Act 2013 (the Act) as on March 31 2017:-
|Mr. A. K. Mittal ||Managing Director |
|Mr. Deepak Mittal ||Whole-time Director |
|Mr. Mahesh Bhootra ||Chief Financial Ofcer |
|Mr. Tejas Dawda ||Company Secretary |
Mr. Tejas Dawda (ACS No: A27660) has been appointed as the Company Secretary of theCompany with effect from November 7 2016 in place of Ms. Kanchan Singh Mehta who resignedon the same day. Further in terms of provisions of Section 203 of Companies Act 2013read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 Mr. Tejas Dawda has also been designated as Key Managerial Personnel of the Company.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received necessary declarations from all Independent Directors of theCompany conr ming that they meet the criteria of Independence prescribed both underSection 149 of the Companies Act 2013 and the requirement of SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015.
The Board has framed Performance Evaluation Policy (the Policy) for evaluating theperformance of the Board as a whole Chairman Managing Director Whole-time DirectorIndependent Directors Non-Executive Director KMPs and its Committees. Based on the samethe performance was evaluated for the Financial Year ended March 31 2017. The Directorsexpressed their satisfaction with the evaluation process and its results.
Accordingly a process of evaluation was followed by the Board for its own performanceand that of its Committees and individual directors and also the necessary evaluation wascarried out by Nomination and Remuneration Committee and Independent Directors at theirrespective meetings held for the said purpose.
A meeting of the Independent Directors was held during the year under review.
NOMINATION AND REMUNERATION POLICY
The Board on the recommendation of the Nomination and Remuneration Committee framed aNomination and Remuneration Policy (NRC Policy). The NRC Policy is attached as Annexure- 1 to this Report. The details of the Nomination and Remuneration Committee arestated in the Report on Corporate Governance.
The Board of Directors has constituted four Mandatory Committees viz.
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders Relationship Committee
4. Corporate Social Responsibility Committee
Details of all the Mandatory Committees along with their composition terms ofreference and meetings held during the year are provided in Repor t on CorporateGovernance forming part of the Annual Report.
In addition to the above referred mandatory Committees the Board also constituted thefollowing major Committees of the Board and delegated powers and responsibilities withrespect to specic purposes:
1. Banking and Investment Committee
2. Management Committee
3. Infrastructure Committee
Details of all the Non-Mandatory Committees along with their composition and terms ofreference are provided in Repor t on Corporate Governance forming part of the AnnualReport.
NUMBER OF MEETINGS OFTHE BOARD
During the year under review the Board met four times. The details of the BoardMeetings and the attendance of the Directors at the meetings are provided in the CorporateGovernance Report which forms part of this Annual Report.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134 of the Companies Act 2013 with respectto Directors Responsibility Statement it is hereby conr med that:
1. in preparation of the annual financial statements for the Financial Year 2016-17the applicable accounting standards have been followed;
2. the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2017 and of the prot ofthe Company for the FinancialYear 2016-17 ended on that date;
3. the Directors have taken proper and sufcient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
4. the Directors have prepared the annual accounts on a going concern basis;
5. the Directors have laid down proper internal financial controls to be followed bythe Company and that such financial controls are adequate and are operating effectively;
6. the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that the systems are adequate and are operating effectively.
CORPORATE SOCIAL RESPONSIBILITY
In accordance with the provisions of Section 135 of the Companies Act 2013 the Boardof Directors of the Company has constituted the Corporate Social Responsibility Committee(CSR Committee) and the CSR Committee has formulated and recommended to the Board aCorporate Social Responsibility Policy (CSR Policy) indicating the activities to beundertaken by the Company which has been approved by the Board.
The CSR Policy may be accessed on the Companys website at the link:http://www.akcapindia.com/WebSiteDocuments/CSR_Policy.pdf
The details of CSR Policy of the Company and CSR activities undertaken by the Companyis attached as Annexure - 2 and forms an integral part of this Report.
WHISTLEBLOWER POLICY ANDVIGIL MECHANISM
Pursuant to Section 177 of the Companies Act 2013 the rules made thereunder and theSEBI Regulations the Company has a Whistle Blower Policy ('Vigil Mechanism') in place forreporting genuine concerns over happening of instances of any irregularity unethicalpractice and/or misconduct involving the directors employees and stakeholders. The Policymay be accessed on the Companys website at the link:www.akcapindia.com/WebSiteDocuments/Whistle%20Blower%20Policy%20and%20Establishment%20of%20Vigil%20Mechanism.pdf.There was no instance of such reporting received during the year.
POLICY FOR PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT OFWOMENATWORKPLACE
In accordance with the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 the Company has adopted a Policy on Prevention Prohibition andRedressal of Sexual Harassment of Women at Workplace. During the Financial Year 2016-17 nocase in the nature of sexual harassment were reported at any work place of the Company.
MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE REPORT
The Management Discussion and Analysis for the Financial Year 2016-17 and the report ofthe Directors on Corporate Governance as required under SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 are given in separate sections forming part ofthe Annual Report.
A certicate from the Statutory Auditors of the Company M/s. Suresh Surana &Associates LLP Chartered Accountants (Firm Registration No. 121750W/W-100010) conr mingcompliance with the conditions of Corporate Governance stipulated under SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 is annexed to the Report onCorporate Governance.
INTERNAL FINANCIAL CONTROLS
The Internal Financial Controls with reference to financial statements as designed andimplemented by the Company are adequate.
RISK MANAGEMENT AND INTERNAL CONTROLS
The Company has a well-dened r isk management framework and maintains adequate internalcontrol systems. The Risk Management and Internal Control System thereof are discussed indetail in the Management Discussion and Analysis report that forms part of the AnnualReport.
Pursuant to Section 139(2) of the Companies Act 2013(the Act) read with Companies(Audit and Auditors) Rules 2014 an audit r m can hold ofce as statutory auditors for twoterms of v e consecutive years each i.e. for a maximum period of ten years. They can bere-appointed after a cooling period of v e years thereafter. While computing the period often years the period for which the statutory auditors would have held ofce before thecommencement of the Act i.e. before April 1 2014 is also to be taken into account.
M/s. Suresh Surana & Associates LLP Chartered Accountants (Firm Registration No.121750W/W-100010) has been acting as the Statutory auditors of the Company for more thanten years and to comply with the provisions of the Act a new auditor must be appointed intheir place to act as Statutory Auditors after the conclusion of 24th Annual GeneralMeeting. The Board of Directors at their meeting held on July 29 2017 has recommendedthe appointment of M/s. PYS & Co. LLP (Firm Registration No. 012388S/S200048)Chartered Accountants Mumbai as the Statutory Auditors of the Company to hold ofce fromthe conclusion of the ensuing Annual General Meeting until the conclusion of 29th AnnualGeneral Meeting subject to ratication by the members at every subsequent Annual GeneralMeeting.
The Company has received a conr mation from M/s. PYS & Co. LLP that theirappointment if made at the 24th Annual General Meeting will be in accordance withSections 139 and 141 of the Act and Rules made thereunder.
COMMENTS ON AUDITORS REPORT
There is no qualication reservation adverse remark or disclaimer made by theStatutory Auditors in their Audit report. The Statutory Auditors have not reported anyincident of fraud to the Audit Committee of the Company during the FinancialYear 2016-17.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the rules madethereunder the Company has appointed M/s. Aashish Bhatt & Associates (C.P. No: 2956)Practicing Company Secretary to conduct the Secretarial Audit of the Company for FinancialYear 2016-17. The Secretarial Audit Report is appended as Annexure - 3 to thisReport. There is no qualication reservation or adverse remark or disclaimer made by theSecretarial Auditor in their report.
During the FinancialYear 2016-17 your Company did not invite or accept any publicdeposits.
PARTICULARS OF LOANS GUARANTEE AND INVESTMENTS BYTHE COMPANY
Particulars of Loans Guarantees and Investments covered under the provisions ofSection 186 of the Companies Act 2013 are given in Notes to the Financial Statements.
All the Related Party Transactions that were entered into during the FinancialYear wereon arms length basis and were in ordinary course of business. Transactions with relatedparties entered into in the normal course of businesses are periodically placed before theAudit Committee of the Board for its approval. Prior omnibus approval of the AuditCommittee is obtained for the transactions which are foreseen or repetitive in nature.
Pursuant to Section 134(3)(h) read with Rule 8(2) of the Companies (Accounts) Rules2014 material related party transaction to be reported under Section 188(1) of theCompanies Act 2013 in form AOC-2 are enclosed as Annexure - 4 to the BoardReport.
All Related Party Transactions as required under Accounting Standards AS-18 arereported in note no. 30 of Notes to the consolidated financial statements and note no. 30of Notes to the Standalone financial statements of your Company.
In accordance with the provisions of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company has formulated a Policy on Materiality andDealing with Related Party Transactions. It can be accessed on the Company website at thelink:
MATERIAL CHANGES AND COMMITMENTS AFFECTINGTHE FINANCIAL POSITION OFTHE COMPANY
The following material changes have occurred between the end of the Financial Year ofthe Company to which the financial statements relate and the date of this report.
1. A. K. Capital Finance Private Limited material subsidiary company has issued andallotted 10500 Secured Rated Listed Redeemable Non-Convertible Debentures (NCDs) of facevalue of Rs. 1 lakh each aggregating to Rs. 105 crores on private placement basis andsubsequently the said NCDs are listed on BSE Limited.
2. A. K. Capital Finance Private Limited a material subsidiary of the Company hasincorporated its subsidiary in the name of Family Home Finance Private Limited on June 292017 to carry on the business of Housing Finance and matters incidental thereto.
3. The Company has obtained approval to act as an Investment Advisers pursuant to SEBI(Investment Advisers) Regulations 2013 w.e.f. May 16 2017 from Securities and ExchangeBoard of India.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS AND COURTS
There has been no signicant and material order passed by the Regulators or Courts orTribunals impacting the going concern status and Companys operation in future during theFinancialYear 2016-17.
CONSERVATION OF ENERGYTECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The operations of the Company are not energy intensive. However adequate measures forconservation of energy usage of alternate sources of energy and investments for energyconservation wherever required have been taken. The Company makes all efforts towardsconservation of energy protection of environment and ensuring safety.
The Company has not absorbed any technology.
Your Company has no foreign exchange earnings during the Financial Year 2016-17. Theinformation on foreign exchange outgo is furnished in the Notes to the FinancialStatements under note no. 28 which forms part of this Annual Report.
TRANSFER OF SHARES AND AMOUNTS PERTAINING TO UNPAID/UNCLAIMED DIVIDEND TO INVESTOREDUCATION AND PROTECTION FUND
Pursuant to Investor Education and Protection Fund Authority (Accounting AuditTransfer and Refund) Rules 2016 the shares of the shareholders in respect of whom thedividend is unpaid/ unclaimed for seven consecutive years are required to be transferredto the Investor Education and Protection Fund (IEPF) after giving an opportunity toshareholders to claim the said unpaid/unclaimed dividend.
Accordingly the Company had issued the reminder letters to such shareholders to claimthe dividend and has also published the notice to such effect in the newspaper in Englishand Regional Language and accordingly informed them that in the event of failure to claimsaid dividend the unpaid/unclaimed dividend alongwith shares pertaining tounpaid/unclaimed dividend would be transferred to IEPF.
Pursuant to the provisions of Sections 124 and 125 of the Companies Act 2013 relevantamounts which remained unpaid or unclaimed for a period of 7 consecutive years have beentransferred by the Company to the Investor Education and Protection Fund. Pursuant to theprovisions of IEPF the Company has uploaded the details of unpaid/ unclaimed amountslying with the Company as on September 17 2016 (date of last Annual General Meeting) onthe website of the Company (www.akcapindia.com) as also on the Ministry of CorporateAffairs website.
COMPLIANCEWITH SECRETARIAL STANDARD
The Company has complied with Secretarial Standards issued by Institute of CompanySecretaries of India on Board Meetings and Annual General Meeting.
EXTRACT OF ANNUAL RETURN
Pursuant to the requirements under Sections 92(3) and 134(3) of the Companies Act2013 read with Rule 12 of Companies (Management and Administration) Rules 2014 anextract of Annual Return in prescribed Form MGT - 9 is given in the Annual Report as Annexure5.
Statements in the Directors Reports and the Management Discussion and Analysisdescribing the Companys objectives expectations or predictions may be forward lookingwithin the meaning of applicable securities laws and regulations. Actual results maydiffer materially from those expressed in the statement.
PARTICULARS OF EMPLOYEES
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided in the Annual Report and isattached as Annexure - 6 and forms an integral part of this Report.
In terms of the provisions of Section 197(12) of the Companies Act 2013 read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is available for inspection by the Members at the Registered Ofceof the Company between 2.00 p.m. to 4.00 p.m. on any working day (Monday to Friday) uptothe date of 24th Annual General Meeting of the Company. Any Member who is interested inobtaining such information may write to the Company Secretary and the same will befurnished on such request.
Your Directors would like to place on record their gratitude for the valuable guidanceand support received from the Depository Participants Government Authorities RegulatorsStock Exchanges Bankers of the Company Auditors of the Company Other Statutory Bodies.Your Directors would also like to take this opportunity to express their gratitude to theMembers of the Company for their trust and support. The Board also wishes to thank theemployees of the Company and its subsidiaries at all levels for the dedicated servicesrendered by them.Your Directors look forward to your continuing support.
|On behalf of the Board of Directors || |
|A. K. Mittal ||Deepak Mittal |
|Managing Director ||Whole-time Director |
|(DIN: 00698377) ||(DIN: 00043685) |
|Place: Mumbai || |
|Date: July 29 2017 || |