TO THE MEMBERS
The Directors have pleasure in presenting the 70th Annual Report togetherwith the Audited Financial Statements of the Company for the year ended 31stMarch 2017.
CORE INVESTMENT COMPANY
The Company is a Core Investment Company-Non Deposit Taking-Systemically Important(CIC-ND-SI) registered with the Reserve Bank of India (RBI) and has been complying withall the conditions prescribed by RBI.
OPERATIONS & OUTLOOK
The Company achieved Profit after Tax of Rs.2303.69 lacs for the year as againstRs.2297.86 lacs in the previous year. The Company (being a core investment company)holds significant investments in group companies which are engaged in diversifiedindustrial segments.
Fiscal 2016-17 was marked by developments both on the domestic and internationalenvironments namely Brexit political changes in advanced economies growingprotectionism and Central Government policy actions on Goods & Service Tax andDemonetization initiatives. India continues to remain one of the fastest growing economiesin the world and is expected to register a growth of over 7% in the current year.
Various reform measures undertaken by the Central Government and the projected increasein global growth is expected to give an impetus to the Indian Economy in the long run.This should have a positive impact on the working of the investee companies and thecapital market leading to better valuations.
Your Directors are pleased to recommend a dividend of Rs.10/- per share (100%) for thefinancial year ended 31st March 2017. The total dividend outgo would beRs.8.68 Crores.
The Registered Office of the Company has been shifted from NCT of Delhi to 7 CouncilHouse Street Kolkata in the State of West Bengal w.e.f. 7th June 2017.
The amount available for appropriation including surplus from previous year isRs.5522.54 lacs. The Directors propose this to be appropriated as under:
|Transfer to Reserves (As per RBI guidelines) ||Rs. 460.74 Lacs |
|Surplus carried to Balance Sheet ||Rs. 5061.80 Lacs |
|Total ||Rs. 5522.54 Lacs |
EXTRACT OF ANNUAL RETURN
An extract of the Annual Return as on 31st March 2017 in the prescribedform MGT-9 is attached as Annexure-1 to this Report and forms part of it.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
The Company being a Core Investment Company registered with the Reserve Bank of IndiaSection 186 of the Companies Act 2013 is not applicable to it. The particulars of loansguarantees and investments are given in the financial statements.
RELATED PARTY TRANSACTIONS
During the financial year ended 31st March 2017 all the contracts orarrangements or transactions entered into by the Company with the Related Parties were inthe ordinary course of business and on arms' length basis and were in compliance with theapplicable provisions of the Companies Act 2013 and the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
Further the Company has not entered into any contract or arrangement or transactionwith the related parties which could be considered material in accordance with the policyof the Company on materiality of the Related Party Transactions. In view of the abovedisclosure in Form AOC-2 is not applicable.
The Related Party Transactions Policy as approved by the Board is available on thewebsite of the Company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Shri Ashok Kumar Kinra retires by rotation and being eligible offers himself forre-appointment at the ensuing Annual General Meeting.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements have been prepared by the Company in accordancewith the applicable Accounting Standards. The Audited Consolidated Financial Statementstogether with Auditors' Report form part of the Annual Report.
A report on the performance and financial position of each of the subsidiaries andassociates included in the Consolidated Financial Statements is presented in a separatesection in this Annual Report. Please refer AOC-1 annexed to the Financial Statements inthe Annual Report.
Pursuant to the provisions of Section 136 of the Act the financial statements of theCompany Consolidated Financial Statements alongwith relevant documents and separateaudited accounts in respect of subsidiaries are available on the website of the Company.
During the financial year under review no company has become or ceased to be yourCompany's subsidiary. With the coming into effect of the Companies Act 2013 JK LakshmiCement Ltd. JK Tyre & Industries Ltd. JK Paper Ltd. JK Agri Genetics Ltd. UmangDairies Ltd. Pranav Investment (M.P.) Company Ltd. Dwarkesh Energy Ltd. GlobalStrategic Technologies Ltd. Deepti Electronics & Electro-Optics Pvt. Ltd. PSV EnergyPvt. Ltd. J.K. Risk Managers & Insurance Brokers Ltd. and CliniRx Research PrivateLtd. have become associates of the Company.
The Company is a registered Non-Banking Finance Company and does not accept publicdeposits and as required by the Reserve Bank of India (RBI) the Board of Directors havealso passed necessary resolution not to accept public deposits during the financial year2017-18 without prior approval of RBI.
(a) Statutory Auditors and their Report
M/s Lodha & Co. Chartered Accountants have been appointed as Auditors of theCompany to hold the office from the conclusion of the 67th Annual GeneralMeeting until the conclusion of the 72nd Annual General Meeting subject toratification of the appointment by the Members at the respective Annual General Meetings.Accordingly being eligible matter relating to the appointment of the Auditors will beplaced for ratification by members at the forthcoming Annual General Meeting. Theobservations of the Auditors in their report on Accounts and the Financial Statementsread with the relevant notes are self explanatory.
(b) Secretarial Auditor and Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Companies Act 2013 the Board ofDirectors appointed Shri Namo Narain Agarwal Company Secretary in Practice as SecretarialAuditor to carry out Secretarial Audit of the Company for the financial year 2016-17. TheReport given by him for the said financial year in the prescribed format is annexed tothis Report as Annexure 2. The Secretarial Audit Report does not contain anyqualification reservation or adverse remark.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
During the financial year under review there were no significant and material orderspassed by the Regulators or Courts or Tribunals which would impact the going concernstatus of the Company and its future operations.
PARTICULARS OF REMUNERATION
Disclosure of the ratio of the remuneration of each Director to the median employee'sremuneration and other requisite details pursuant to section 197 (12) of the CompaniesAct 2013 ("Act") read with Rule 5 (1) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 as amended is annexed to this Report asAnnexure-3. Further particulars of Employees pursuant to Rule 5(2) & (3) of the aboveRules forms part of this Report. However as per the provisions of Section 136 of thesaid Act the Report and Accounts are being sent to all the Members of the Company andothers entitled thereto excluding the aforesaid information. Any Member interested inobtaining such particulars may write to the Company Secretary at the Registered Office ofthe Company. The said information is available for inspection at the Registered Office ofthe Company during working hours.
INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with reference tofinancial statements and no material reportable weakness was observed in the system.Further the Company has in place adequate internal financial controls commensurate withthe size and nature of its operations. The Company also has robust Budgetary ControlSystem and Management Information System (MIS) which is the backbone of the Company forensuring that your Company's assets and interests are safeguarded.
DIRECTORS' RESPONSIBILITY STATEMENT
As required under Section 134(3)(c) of the Companies Act 2013 your Directors statethat:-
(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
(b) the accounting policies have been selected and applied consistently and judgmentsand estimates made are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company at the end of the financial year and of the profit andloss of the Company for that period;
(c) proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the said Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(d) the annual accounts have been prepared on a going concern basis;
(e) the internal financial controls to be followed by the Company have been laid downand that such internal financial controls are adequate and were operating effectively; and
(f) the proper systems to ensure compliance with the provisions of all applicable lawshave been devised and that such systems were adequate and operating effectively.
Your Company re-affirms its commitment to the highest standards of corporate governancepractices. Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 a Management Discussion and Analysis Corporate Governance Report and Auditors'Certificate regarding compliance of conditions of Corporate Governance are made a part ofthis Report.
The Corporate Governance Report which forms part of this Report also covers thefollowing:
(a) Particulars of the four Board Meetings held during the financial year under review.
(b) Policy on Nomination and Remuneration of Directors Key Managerial Personnel andSenior Management including inter alia the criteria for performanceevaluation of Directors.
(c) The manner in which formal annual evaluation has been made by the Board of its ownperformance and that of its Committees and individual Directors.
(d) The details with respect to composition of Audit Committee and establishment ofVigil Mechanism.
(e) Details regarding Risk Management.
RISK AND CONCERNS
The Company is mainly exposed to capital market risks in the form of change in value ofits investments. The Company is also exposed to the fluctuations of economy and industrycycles.
The statement in this Management Discussion and Analysis Report describing theCompany's outlook projections estimates expectations may be "Forward-lookingStatements" within the meaning of applicable securities laws or regulations. Actualresults could differ materially from those expressed or implied.
CORPORATE SOCIAL RESPONSIBILITY
The requirement of Corporate Social Responsibility (CSR) in terms of Section 135 of theCompanies Act 2013 and the rules made thereunder is not applicable to the Company sincethe Company's main source of income is dividend from CSR compliant companies.
CONSERVATION OF ENERGY ETC.
As required under Section 134(3)(m) read with the Companies (Accounts) Rules 2014 therequirement of furnishing particulars of energy conservation technology absorption etc.is not applicable to the Company. Further particulars of Foreign Exchange Earning andOutgo are as under:-
|i) Foreign Exchange earned : ||NIL |
|ii) Foreign Exchange Outgo : ||NIL |
Your Directors wish to place on record and acknowledge their appreciation for thecontinued support and co-operation received from the various Government AuthoritiesLending Institutions and the esteemed shareholders of the Company. The Directors alsorecord their appreciation for the total dedication of the employees.
| ||On behalf of the Board |
| ||BHARAT HARI SINGHANIA |
|New Delhi ||Chairman |
|Date: 8th June 2017 || |
With a view to avoid duplication between the Directors' Report and ManagementDiscussion and Analysis a Combined Report has been presented.