and Management Discussion & Analysis
TO THE MEMBERS
The Directors have pleasure in presenting the 69th Annual Report togetherwith the Audited Financial Statements of the Company for the year ended 31stMarch 2016.
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. 2297.86 lacs for the year recording anincrease of 11.74% over the previous year. The Company (being a Core Investment Company)holds significant investments in Group Companies which are engaged in diversifiedindustrial segments.
Fiscal 2015-16 witnessed an unusual volatility in the international economicenvironment. Fortunately India stood out on the back of economic stability. Itsmacro economic outlook was founded on the Central Government emphasis on achieving fiscalconsolidation and lowering inflation. As a result the Indian economy recorded a slightlyhigher GDP growth of 7.6%. There was an upturn especially in the manufacturing sectorwhich had a positive impact on the capital markets.
The economic growth in the coming year is expected to be higher which augurs well forthe Indian industry.
This should have a positive impact on the working of the investee companies and thecapital market leading to better valuations.
The Directors have recommended the Interim Dividend of Rs. 10/- per share (100%) paidby the Company during the financial year ended 31 st March 2016 as Final Dividend forthe financial year 2015-16.
The amount available for appropriation including surplus from previous year is Rs.4546.78 lacs. The Directors propose this to be appropriated as under:
|Transfer to Reserves (As per RBI guidelines) ||Rs. 459.57 Lacs |
|Interim Dividend ||Rs. 868.36 Lacs |
|Surplus carried to Balance Sheet ||Rs. 3218.85 Lacs |
|Total ||Rs. 4546.78 Lacs |
EXTRACT OF ANNUAL RETURN
An extract of the Annual Return as on 31st March 2016 in the prescribed form MGT-9 isattached 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 2016 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 withthe applicable provisions of the Companies Act 2013 and the Listing Agreement.
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
Your Directors express their profound grief and sorrow on the sad demise of Shri OmPrakash Khaitan Director of the Company on 6th December 2015. He had joinedthe Company as an Independent Director in the year 2009. Shri Khaitan was a Memberof International Bar Association London and a renowned solicitor and an advocate in thefields of commercial corporate industrial disputes & labour maritime insurancelaws foreign collaborations etc. Your Directors pay their respectful homage and tributeto Shri O. P. Khaitan and highly valued his contribution in Board deliberations withcommitment and sincerity in the best interest of various stakeholders.
Shri Sanjay Kumar Khaitan was appointed as an Independent Director of the Company witheffect from
25th January 2016 for a term of five consecutive years subject to approval of themembers at the ensuing AGM.
Shri Khaitan has given declaration about his independence pursuant to Section 149 ofthe Companies Act 2013. The Company has also received requisite Notice from a Member ofthe Company proposing the name of Shri Sanjay Kumar Khaitan for appointment asDirector at the ensuing AGM. The Board of Directors recommends his appointment asaforesaid.
Dr. Raghupati Singhania retires by rotation and being eligible offers himself forre-appointment at the ensuing AGM.
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 Consolidated Financial Statements is presented in a separate section in thisAnnual Report. Please refer AOC-1 annexed to the Financial Statements in the AnnualReport.
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 yourCompanys With the coming into effect of the Companies Act 2013 JK Lakshmi CementLtd. 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. and PSVEnergy Pvt. Ltd. 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 year2016-17 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 asSecretarial Auditor to carry out Secretarial Audit of the Company for the financial year2015-16. The Report given by him for the said financial is annexed to this Report asAnnexure 2. The Secretarial Audit Report does not contain any qualification reservationor adverse remark.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
During the financial year under review there were no significant or Courts orTribunals which would impact the going concern status of the Company and its futureoperations.
PARTICULARS OF REMUNERATION
Information in accordance with the provisions of Section 197 of the Companies Act 2013read with Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isannexed to this Report. However as per the provisions of Section 136 of the said Act theReport and Accounts are being sent to all the Members of the Company and others entitledthereto excluding the aforesaid information. Any Member interested in obtaining suchparticulars may write to the Company Secretary at the Registered Office of the availablefor inspection at the Registered Office of the 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 Companys 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.
CORPORATE GOVERNANCE - including details pertaining to Board Meetings Nominationand Remuneration Policy Performance Evaluation Risk Management Audit Committee andVigil Mechanism.
Your Company re-affirmsits 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 AuditorsCertificate 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 five 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 performance evaluation ofDirectors.
(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 theCompanys 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 Companys 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 ||: Rs. 34.52 Lacs |
Your Directors wish to place on record and acknowledge their appreciation for thecontinued support and co-operation received from the various GovernmentAuthorities Lending Institutions and the esteemed Shareholders of the Company. TheDirectors also record their appreciation for the total dedication of the employees.
On behalf of the Board
BHARAT HARI SINGHANIA
Date: 30th May 2016