TO THE MEMBERS
We are pleased to present the 20th Annual Report together with the Audited Standaloneand Consolidated Accounts of your
Company for the financial year ended March 31 2016.
1. Financial Performance Summary
The highlights of the financial results of the Company on a standalone and consolidatedbasis are as follows:
| || ||(Rs. in Crores) |
| ||Standalone ||Consolidated |
| ||Year ended March 31 2016 ||Year ended March 312015 ||Year ended March 31 2016 ||Year ended March 31 2015 |
|Income from Operations ||111.56 ||112.01 ||119.65 ||119.08 |
|Other Income ||6.83 ||6.71 ||8.00 ||7.38 |
|Total Income ||118.38 ||118.72 ||127.65 ||126.46 |
|Profit before Interest Depreciation and Taxation ||12.02 ||14.50 ||14.32 ||13.51 |
|Less : Interest ||6.35 ||1.98 ||6.35 ||1.98 |
|Profit before Depreciation and Taxation ||5.66 ||12.51 ||7.97 ||11.53 |
|Less : Depreciation ||3.78 ||5.72 ||3.96 ||5.93 |
|Profit / (Loss) Before Taxation ||1.88 ||6.79 ||4.01 ||5.61 |
|Current Tax ||0.68 ||- ||1.05 ||- |
|MAT Credit ||- ||- ||(0.36) ||- |
|Less : Excess Provision for Tax Written back ||- ||(0.29) ||- ||(0.29) |
|Profit / (Loss) After Tax ||1.20 ||7.08 ||3.33 ||5.90 |
|Profit / (Loss) brought forward from previous year ||(26.86) ||(25.53) ||(31.24) ||(28.70) |
|Less: Depreciation written off as per Schedule II ||- ||8.41 ||- ||8.43 |
|Balance carried to Balance Sheet ||(25.67) ||(26.86) ||(27.91) ||(31.24) |
2. Business Performance
The Company on a Standalone basis has achieved total income of Rs.118.38 crores ascompared to Rs.118.72 crores during the previous year. The Income from Operations duringthe year was also stable at Rs. 111.56 crores as compared to Rs. 112.01 crores during theprevious year. The Company has posted a Net Profit of Rs. 1.20 crores during the yearended March 31 2016.
On a Consolidated basis the Company's Income from Operations was stable at Rs.127.65crores as compared to Rs.126.45 crores in the previous year. The Company has posted aConsolidated Net Profit of Rs. 3.33 crores during the year ended March 31 2016.
The Reserves & Surplus of the Company as on March 31 2016 stood at Rs. 21.63crores. No amount is proposed to be transferred to Reserves during the year.
In order to conserve cash for Company's operations your Directors do not recommend anydividend for the year under review.
5. Share Capital
The Authorised Share Capital of the Company is Rs.25 crore. The Issued Subscribed andPaid-up Capital of the Company was Rs.15.54 crores as on March 31 2016 consisting of55400000 Equity shares of Re.1/- each and 1000000 8% Redeemable Non-ConvertibleNon-Cumulative Preference shares of Rs.100/- each.
6. Credit Rating
During the year CRISIL has re-affirmed A1+ rating for the short term debt programme.
7. Public Deposits
During the year the Company has not accepted or renewed any deposit from the public ascovered under Section 73 of the Companies Act 2013 and the Companies (Acceptance ofDeposits) Rules 2014.
8. Corporate Governance
Your Company is committed to maintaining the highest standards of Corporate Governanceand adhering to the Corporate Governance requirements set out by Securities and ExchangeBoard of India (SEBI). During the year under review the Company was in compliance withthe provisions of Clause 49 of the Listing Agreement with the Stock Exchanges as amendedby SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 pertaining tothe Corporate Governance compliances.
The Report on Corporate Governance as stipulated under Chapter IV of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 forms part of the AnnualReport. The Practising Company Secretary's Certificate confirming compliance with ChapterIV of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is given inAnnexure I and the same forms part of the Directors' Report.
9. Management Discussion and Analysis
In terms of Chapter IV of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Management Discussion and Analysis Report on the operations of theCompany is provided as a separate section and forms part of the Annual Report.
The Company has a wholly owned subsidiary viz. Aditya Birla Commodities Broking Limited("ABCBL") which is engaged in the business of commodity broking.
During the year ABCBL has posted total Income of Rs. 9.27 crores as compared toRs.7.75 crores during previous year growth of 19.6%. The subsidiary has posted a Netprofit of Rs. 2.13 crores as compared to a net loss of Rs.1.18 crores in the previousyear.
The Policy for determining material subsidiaries may be accessed on the Company'swebsite at http://www.adityabirlamoney.com/about-us/investor.
The audited financial statements of the Company's subsidiaries and related informationhave been placed on the website of the Company viz. www.adityabirlamoney.com. Any Memberwho is interested in obtaining a copy of audited financial statements of the Company'ssubsidiaries may write to the Company Secretary at the Registered Office of the Company.
The Consolidated Financial Statements prepared pursuant to Section 129(3) of theCompanies Act 2013 read with the Companies (Accounts) Rules 2014 Regulation 33 of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and in accordancewith the Accounting Standards prescribed by the Institute of Chartered Accountants ofIndia forms part of the Annual Report. The statement containing the salient features ofthe financial statements of the Company's subsidiary is set out in Annexure II to thisreport.
11. Significant and Material Orders Passed by the Regulators or Courts
During the year no significant and material orders were passed by the regulators orcourts or tribunals impacting the going concern status of the Company.
12. Internal Financial Control and their Adequacy
The Company has put in place adequate internal control systems commensurate with thesize of its operations. The internal control systems comprising of policies andprocedures are designed to ensure orderly and efficient conduct of its businessincluding adherence to Company's policies safeguarding its assets prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information.
The Company has the required internal financial controls in place as prescribed underthe Companies Act 2013.
13. Particulars of Loans Guarantees or Investments
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 read with Companies (Meetings of Board and its Powers)Rules 2014 are given in the notes to the financial statements.
14. Risk Management Policy
The Company has a robust Risk Management Policy in place which includes identifying theelements of risk in the opinion of the Board that may threaten the existence of theCompany. The Company has a Risk Governance Committee to evaluate the significant riskexposure of the Company & assessing Management's action to mitigate the exposure intimely manner and approving the implementation of the Enterprise Risk Management Frameworkfor the Company. During the year the Risk Governance Committee met on March 16 2016 andhad discussions on various risk areas and mitigations initiated by the Company.
15. Corporate Social Responsibility
In terms of the provisions Section 135 of the Act read with Companies (Corporate SocialResponsibility Policy) Rules 2014 the Board of Directors of the Company has constituteda Corporate Social Responsibility ("CSR") Committee which is chaired byMr.G.Vijayaraghavan. The other members of the Committee are Mr. Gopi Krishna Tulsian andMs. Pinky A Mehta Directors of the Company.
The Company also has in place a CSR Policy and the same is available on the website ofthe Company at www.adityabirlamoney.com. A detailed report is attached as Annexure VIforming part of this report.
16. Related Party Transactions
During the financial year the Company has entered into related party transactionswhich were on an arm's length basis and in the ordinary course of business. All relatedparty transactions have been approved by the Audit Committee of the Board of Directors ofthe Company and the same are being reviewed by it on a periodic basis.
The Board has formulated a Related Party Transactions Policy for the purpose ofidentification and monitoring of such transactions and the same is posted on the Company'swebsite viz.www.adityabirlamoney.com.
Details of Related Party Transaction for the year 2015-16 are mentioned in Note No.30of Notes to Financial Statement for the FY 2015-16 and the material transaction is statedin Form AOC-2 enclosed as Annexure V.
17. Cost Audit
The provisions of Cost audit as prescribed under Section 148 of the Companies Act 2013are not applicable to the Company.
18. Conservation of Energy Technology Absorption and Foreign Exchange Earnings andOutgo
The information relating to the Conservation of Energy and Technology Absorptionrequired under Rule 8(3)(A) and 8(3)(B) of Companies (Accounts) Rules 2014 are notapplicable to the Company due to the very nature of the industry in which it operates.During the year under review there were no foreign exchange earnings (Previous Year -Nil) and outgo (Previous Year - Nil) respectively.
Changes in Board Constitution -
Mr. Sudhakar Ramasubramanian the Managing Director of the Company resigned from theBoard as a Director and Managing Director of the Company with effect from April 30 2016due to his movement to another role within the Aditya Birla Group. The Board places onrecord its deep appreciation for the services rendered by him during his tenure as theManaging Director.
Subject to the approval of the shareholders the Board has on recommendation of theNomination and Remuneration Committee appointed Mr. Tushar Shah (DIN: 07504267) as anAdditional Director of the Company with effect from May 06 2016. In accordance withSection 161 of the Companies Act 2013 Mr. Tushar Shah holds office upto the date of theensuing Annual General Meeting of the Company and is eligible to be appointed as theDirector of the Company.
The Company has received a notice from M/s. Aditya Birla Financial Services Limitedshareholder along with the requisite deposit signifying his candidature for appointment asthe Director at the ensuing Annual General Meeting. The resolution seeking Mr. TusharShah's appointment has been included in the Notice of the Annual General Meeting togetherwith his brief details.
Mr. Shriram Jagetiya retires from office by rotation and being eligible has offeredhimself for reappointment. The Directors recommend the said re-appointment. Items seekingyour approval on the above re-appointment are included in the Notice convening the AnnualGeneral Meeting. Brief resumes of the Directors seeking appointments / reappointments formpart of the Notice of the ensuing Annual General Meeting.
The Board of Directors of the Company met 4 (four) times during the year i.e. on May04 2015 July 23 2015 October 28 2015 and January 27 2016.
Composition of the Audit Committee -
The Board has constituted the Audit Committee which comprises of Mr. Sudhir Rao(Chairman) Mr. G.Vijayaraghavan and Mr. Shriram Jagetiya as the members. Other details ofthe Audit Committee are listed in the Corporate Governance Report. The Audit Committee met4 times during the year under review.
Independent Director's confirmation -
The Independent Directors on the Company's Board have given their respectivedeclarations that they meet the criteria of Independence as provided in Section 149(6) ofthe Act and Chapter IV of SEBI (Listing Obligations and Disclosure Requirements) 2015.
Annual Evaluation -
The evaluation framework for assessing the performance of Directors of your Companycomprises of contributions at the meetings strategic perspective or inputs regarding thegrowth and performance of your Company among others. Pursuant to the provisions of theAct and the Listing Regulations the Directors have carried out the annual performanceevaluation of the Board Independent Directors Non-executive Directors ExecutiveDirectors Committees and the Chairman of the Board. The manner of evaluation is providedin the Corporate Governance Report. The details of programme for familiarisation ofIndependent Directors of your Company are available on your Company's website viz.www.adityabirlamoney.com.
Key Managerial Personnel
During the year under review Mr. Srinivas Subudhi resigned from the office of ChiefFinancial Officer of the Company with effect from March 31 2016. The Board has appointedMs. Sumathy Ravichandran as the Chief Financial Officer effective May 06 2016.
Consequent to the resignation of Mr. Sudhakar Ramasubramanian as the Managing Directorof the Company the Board has on recommendation of the Nomination and RemunerationCommittee appointed Mr. Murali Krishnan L R as the Manager of the Company with effectfrom May 06 2016 subject to approval by the Shareholder of the Company and further theboard requested the Shareholders of the company to approve the same in the ensuing AGM.
Policy on Remuneration to Directors Key Managerial Personnel
The Nomination and Remuneration Committee has formulated the policy on remuneration forthe Directors Key Managerial Personnel which is appended herewith as Annexure VII andalso posted on the website www.adityabirlamoney.com.
20. Disclosure Pursuant to Section 62(1)(B) of the Companies Act 2013 Read with Rule12 of Companies (Share Capital and Debentures) Rules 2014 & Securities Exchange Boardof India (Share Based Employee Benefits) Regulations 2014
The Company had formulated the ABML Employee Stock Option Scheme 2014 (ABML ESOP Scheme2014) with the approval of the shareholders at the Annual General Meeting dated September09 2014.
|Nature of Disclosure ||Particulars |
|Options granted on December 02 2014 ||2509341 |
|Options outstanding as on April 01 2015 ||2448901 |
|Options vested during the year ||25% of the options granted |
|Options exercised as on March 31 2016 ||Nil |
|Total number of shares arising as a result of exercise of options ||Nil |
|Options lapsed ||469781 (due to resignation of employees) |
|Exercise Price ||Rs.34.25/- per option |
|Variation of terms of options ||Nil |
|Money realised by exercise of options ||Nil |
|Options outstanding as on March 31 2016 ||1979120 |
Employee-wise details of options granted
| ||No. of options granted ||No. of options outstanding |
|(i) Key Managerial Personnel || || |
|Mr.Sudhakar Ramasubramanian Managing Director ||329670 ||329670 |
|Mr.Srinivas Subudhi Chief Financial Officer ||Nil ||Nil |
|Mr.Vikashh K Agarwal Company Secretary ||32967 ||32967 |
|(ii) Any other employee who received a grant in any one year of option amounting to 5% or more of options granted during that year ||(i) Mr. Saurabh Shukla - Head - Broking and Retail Business - 225275 |
| ||(ii) Mr. Mohit Saxena - Senior Vice President - Products BD and Worksite Marketing - 157692 |
|(iii) Identified employees who were granted option during any one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant ||Nil |
The Company has complied with and shall comply with the applicable provisions under theCompanies Act 2013 the SEBI (Share Based Employee Benefits) Regulations 2014 and theAccounting Standards. The Disclosures prescribed in Regulation 14 of SEBI (Share BasedEmployee Benefits) Regulations 2014 has been posted on the Company's website at the linkhttp://www.adityabirlamoney.com/about-us/investor.
A certificate received from the Statutory Auditors on the implementation of theCompany's Employees Stock Option Scheme 2014 will be placed at the ensuing Annual GeneralMeeting for inspection by the Members.
21. Internal Audit Framework
The Company has in place a robust internal audit framework to monitor the efficacy ofinternal controls with the purpose of providing to the Audit Committee and the Board ofDirectors an independent objective and reasonable assurance on the adequacy andeffectiveness of the organisation's risk management control and governance processes.
The framework is commensurate with the nature of the business and the size of itsoperations. Internal auditing of the Company involves the utilisation of a systematicmethodology for analysing business processes or organisational problems and recommendingsolutions to add value and improve the processes. The audit approach verifies compliancewith the regulatory operational and system related procedures and controls.
As per the provisions of Section 138 of the Companies Act 2013 M/s PKF Sridhar &Santhanam Chartered Accountants have been appointed as the Internal Auditors by the Boardof Directors of the Company. The audit scope and plans are approved by the Board everyyear.
Internal Audit Process followed by the Company is as follows:
Establish and communicate the scope and objectives of audit to the management
Develop an understanding of the business area under review.
Identify control procedures used to ensure each key transaction type is properlycontrolled and monitored.
Develop and execute a risk-based sampling and testing approach to determinewhether the key controls are operating as intended.
Report the key audit findings and recommendations made by the auditors to theBoard of Directors of the Company
Monitor the implementation of audit recommendations and ensure periodicreporting to the Board of Directors of the Company
Audit findings are used as a key input in the risk management process and allthe key risks of the Company are mapped to the audit processes to ensure a risk- basedaudit approach.
The internal audit activity is monitored on an ongoing basis
22. Particulars of Employees
In accordance with the provisions of Section 197(12) of the Act read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the names and otherparticulars of employees are to be set out in the Directors' Report as an addendumthereto. However having regard to the provisions of Section 136(1) of the Act the AnnualReport excluding the aforesaid information about the employees is being sent to theMembers of the Company. The said information is available for inspection at the RegisteredOffice of the Company during the working hours. Any Member interested in obtaining suchparticulars may write to the Company Secretary at the Registered Office of the Company andthe same will be furnished on request.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are appended as Annexure to the Boards' Report asAnnexure III.
23. Vigil Mechanism / Whistle Blower Policy
In compliance with the provisions of Section 177(10) of the Companies Act 2013 andChapter IV of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015the Company has in place a vigil mechanism wherein the directors and employees to reporttheir concerns about unethical behaviour and actual or suspected fraud or violation ofthe Company's Code of Conduct to the Value Standards Committee. The Company Secretary ofthe Company acts as the Secretary to the Values Standard Committee. On a quarterly basisan update on the issues reported under this policy is placed before the Audit Committee ofthe Board of Directors for its review and perusal. The vigil mechanism Policy is postedon the Company's website at www.adityabirlamoney.com.
24. Disclosure Under the Sexual Harassment at Workplace (Prevention Prohibition andRedressal) Act 2013.
The Company has implemented a policy for prevention of Sexual Harassment in line withthe requirements of the Sexual Harassment at Workplace (Prevention Prohibition andRedressal) Act 2013. An Internal Complaints Committee (ICC) presided by a senior levelwoman employee has been set up to redress complaints received on sexual harassment. Allemployees (including permanent contractual temporary trainees) are covered under thispolicy.
During the year under review the Company has not received any complaint under theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
|No. of complaints received ||: None |
|No. of complaints disposed off ||: Not Applicable |
25. Extract of Annual Return
In terms of the provisions of Section 92 (3) of the Companies Act 2013 read with theCompanies (Management and Administration) Rules 2014 an extract of the Annual Return forthe financial year March 31 2016 in Form MGT-9 is given in Annexure IV to this report.
26. Directors Responsibility Statement
The audited accounts for the year under review are in conformity with the requirementsof the Act and the Accounting Standards. The financial statements reflect fairly the formand substance of transactions carried out during the year under review and reasonablypresents the Company's financial condition and results of operations.
Pursuant to Section 134(5) of the Companies Act 2013 your Directors confirm that tothe best of their knowledge and belief:
(i) in the preparation of the annual accounts the applicable standards have beenfollowed along with proper explanation relating to material departures if any;
(ii) appropriate accounting policies have been selected and applied consistently andsuch judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at March 31 2016 and of the profit of theCompany for the year ended on that date;
(iii) proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(iv) the attached Statement of Accounts for the period ended March 31 2016 have beenprepared on a "going concern basis";
(v) proper internal financial controls were in place and that the financial controlswere adequate and were operating efficiently.
(vi) proper systems are in place to ensure compliance of all laws applicable to theCompany and that such systems were adequate and operating efficiently;
27. Statutory Auditors and Their Report
M/s. S.R. Batliboi & Co. LLP (Registration No.301003E/E300005) CharteredAccountants Mumbai were appointed in the 19th Annual General Meeting as the StatutoryAuditors of the Company for a period of five years to hold office upto the conclusion ofthe Twenty Fourth Annual General Meeting. As required by the provisions of the CompaniesAct 2013 their appointment should be ratified by the Members at every AGM. Accordinglyrequisite resolution forms part of the notice convening AGM for ratification appointmentof Auditor.
The observations if any made by the Auditors of the Company in their report read withrelevant notes to the Accounts are self-explanatory and therefore do not call for anyfurther comments. The observations reported under Emphasis of Matter by the Auditors ofthe Company in their report with relevant notes to the Accounts are self-explanatory anddo not call for any further explanation / comments.
28. Secretarial Auditors
In terms of the provision of the Section 204 of the Act read with Companies(Appointment and Remuneration of Managerial Personnel) Rules2014 the Board has appointedM/s. BNP & Associates Company Secretaries Mumbai as the Secretarial Auditor forconducting a Secretarial Audit of the Company for the financial year ended March 31 2016.
The report of the Secretarial Auditors is attached as Annexure VIII. The SecretarialAudit Report does not contain any qualification reservation or adverse remark.
Your Directors take this opportunity to express their sincere appreciation for theexcellent support and co-operation extended by the shareholders customers bankers andother business associates. Your Directors gratefully acknowledge the ongoing cooperationand support provided by Central and State Governments and all Regulatory bodies. YourDirectors place on record their deep appreciation for the exemplary contribution made bythe employees of the Company at all levels. Their dedicated efforts and enthusiasm havebeen pivotal to your Company's growth.
| ||For and on behalf of the Board of Directors || |
|Date : May 06 2016 ||Gopi Krishna Tulsian ||Shriram Jagetiya |
|Place : Chennai ||Director ||Director |
| ||DIN : 00017786 ||DIN : 01638250 |