Your Directors have pleasure in presenting their Sixth Annual Report on the businessand operations of the Company together with Audited Statement of Accounts for the yearended 31st March 2015.
FINANCIAL PERFORMANCE :
(Rs. in Million)
|Particulars ||Year ended 31st March 2015 ||Year ended 31st March 2014 |
|Total Income ||207.31 ||229.16 |
|Total Expenditure ||16.76 ||24.77 |
|Profit before taxation ||190.56 ||214.25 |
|Provision for tax (including Deferred Tax) ||3.05 ||14.79 |
|Net Profit ||187.51 ||199.46 |
|Balance of Profit/(Loss) from previous year ||3259.24 ||3099.67 |
|Add Profit for the year ||187.51 ||199.46 |
|Balance available for appropriation ||3446.75 ||3299.13 |
|Appropriations : || || |
|Transfer to Reserve Fund in terms of Section 45-IC of the Reserve Bank of India Act 1934 ||37.50 ||39.89 |
|Balance carried to Balance Sheet ||3409.24 ||3259.24 |
Your Directors do not recommend any dividend on the equity shares for the year ended31st March 2015.
MANAGEMENT DISCUSSION AND ANALYSIS
The main object of the Company is to make strategic investments in the Kalyani GroupCompanies. The Company is a Non Deposit taking Core Investment Company as defined in theCore Investment Companies (Reserve Bank) Directions 2011. Since the Company is not aSystemically Important Non Deposit taking Core Investment Company it is not required toobtain Certificate of Registration under Sec. 45-IA of the Reserve Bank of India Act1934.
During the Financial Year under review your Company earned total income of 20.73Crores (previous years 22.92 Crores). The net profit after tax is 18.75 Crores (previousyears 19.95 Crores).
OPERATIONS OF THE COMPANY
The main operations of the Company are that of investments and majority of theinvestments of the Company are in the nature of strategic investments in Kalyani GroupCompanies. The investment pattern of the Company also complies with the requirement forthe Company continuing to qualify as a Non Deposit taking Core Investment Company. Themain source of income for the Company is in the form of dividends as declared by thesecompanies.
As on 31st March 2015 the Company has 2 employees including the CEO / CFO.
CONCERNS AND THREATS
Fluctuations in the securities market and global economic scenario may pose arisk of devaluation of the investments made by the Company.
Main source of income for the Company is dividend from the Kalyani GroupCompanies.
The risks and concerns associated with the businesses / operations of theseinvestee companies which may impact the performance of these companies could result invariation in dividends declared by these companies.
Non recovery of principal of the amounts lent and interest thereon.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has adequate internal control systems to ensure operational efficiency andaccuracy in financial reporting and compliance of various laws and regulations.
The internal control system is supported by the internal audit process. The internalaudit is conducted in house. The Audit Committee of the Board reviews the Internal Auditprocess and the adequacy and effectiveness of internal audit and controls periodically.
Statements in this Report particularly those which relate to Management Discussion andAnalysis describing the Company's objectives projections estimates and expectations mayconstitute "forward looking statements" within the meaning of applicable lawsand regulations. Actual results might differ materially from those either expressed orimplied.
The annual listing fees for the year under review have been paid to the StockExchanges where your Company's shares are listed.
The Company does not have any subsidiary company as on 31st March 2015.
PARTICULARS OF INFORMATION FORMING PART OF THE BOARD'S REPORT PURSUANT TO SECTION 134OF THE COMPANIES ACT 2013 RULE 8 OF THE COMPANIES (ACCOUNTS) RULES 2014 AND RULE 5 OFTHE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of Annual Return in Form MGT - 9 is annexedherewith as 'Annexure I' to this Report.
NUMBER OF MEETINGS OF THE BOARD
During the year under review six Board Meetings were convened and held. The details ofwhich are given in the Corporate Governance Report. The intervening gap between theMeetings was within the period prescribed under the Companies Act 2013 and the ListingAgreement.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirements of Section 134(5) of the Companies Act 2013 in respectof Directors' Responsibility Statement your Directors' state that:
a) in the preparation of the Annual Financial Statements for the year ended 31st March2015 the applicable accounting standards have been followed along with the properexplanation relating to material departures;
b) accounting policies as mentioned in Note - 2 to the Financial Statements have beenselected and applied consistently. Further judgments and estimates have been made that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at 31st March 2015 and of the profit of the Company for the year ended on thatdate;
c) proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) the Annual Financial Statements have been prepared on a going concern basis;
e) proper internal financial controls were in place and that the financial controlswere adequate and were operating effectively; and
f) proper systems to ensure compliance with the provisions of all applicable laws werein place and were adequate and operating effectively.
A STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Clause 49 ofthe Listing Agreement.
COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Board had on the recommendation of the Nomination and Remuneration Committee frameda policy for selection and appointment of Directors Key Managerial Personnel and SeniorManagement Personnel and their remuneration. The policy is appended as 'Annexure II' tothis Report.
a . Statutory Auditors
The Board of Directors has recommended ratification of re-appointment of Mr. PrashantV. Deo Chartered Accountant Pune (Membership Number 041609) as Statutory Auditors ofthe Company from the conclusion of ensuing Annual General Meeting (AGM) to be held on 19thSeptember 2015 till the conclusion of next Annual General Meeting.
b. Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. SVD & Associates Company Secretaries (Membership No. FCS 1321 CP No.965) to undertake the Secretarial Audit of the Company. The Report of the SecretarialAudit is annexed herewith as 'Annexure III' to this Report.
EXPLANATION ON COMMENTS ON STATUTORY AUDITORS' AND SECRETARIAL AUDITORS' REPORTS
There are no qualifications reservations or adverse remarks or disclaimers made by Mr.Prashant V. Deo Statutory Auditors in his Audit Report. M/s. SVD & AssociatesPracticing Company Secretary in their Secretarial Audit Report have made certainqualifications. The auditors qualifications and Boards explanation thereto are summarizedas under:
|Auditors Qualifications ||Boards' explanation |
|The Company has not filed Form MGT14 as required u/s 179 of the Companies Act 2013 for the board resolutions as mentioned below: ||Company has initiated the process for filing of application of condonation of delay for the same. |
|A) Disclosure of interest by Directors as required || |
|u/s 184 (1) of the Companies Act 2013. || |
|B) Approval of Board's Report and || |
|Corporate Governance Report || |
|C) Appointment of Internal Auditor as required || |
|u/s 138 of the Companies Act 2013 || |
PARTICULARS OF LOANS GUARANTEES OR INVESTMENT UNDER SECTION 186
During the year the Company has not invested any funds in equity capital of anycompany. The closing balances of investments which would be covered under Section 186 ofthe Companies Act 2013 are disclosed in the Schedule of Non-Current Investments in theFinancial Statements. The company has granted short term and long term loans of Rs. 9.28Cr. (net) and issued corporate guarantees of Rs. 76 Cr. (net) during the year.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SUBSECTION(1) OF SECTION 188 OF THE COMPANIES ACT 2013
Pursuant to the provisions of Section 134 of the Companies Act 2013 read with Rule 8(2) of the Companies (Accounts) Rules 2014 the particulars of contracts or arrangementsentered into by the Company with Related Parties have been done at arm's length and are inthe ordinary course of business. Hence no particulars are being provided in Form AOC - 2.Related Party disclosures as per AS -18 have been provided in Note no. 3.25 to theFinancial Statements.
STATE OF COMPANY'S AFFAIRS
Discussion on state of Company's affairs has been covered in the Management Discussionand Analysis.
AMOUNTS PROPOSED TO BE CARRIED TO RESERVES
Particulars of the amounts proposed to be carried to reserves have been covered as partof the financial performance of the Company.
MATERIAL CHANGES AND COMMITMENTS BETWEEN THE DATE OF THE BALANCE SHEET AND THE DATE OFREPORT
There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the Financial Year of the Company towhich the Financial Statements relate and the date of the report except as disclosedelsewhere in this report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
A . Conservation of Energy and Technology Absorption
The Company has no particulars to report regarding conservation of energy technologyabsorption as required under Section 134 (3) (m) of the Companies Act 2013 read withRules thereunder.
B. Foreign exchange earnings and outgo
|Sr. No. ||Particulars ||Amount in $ |
|i ||Foreign Exchange earned in terms of actual inflows during the year ||Nil |
|ii ||Foreign Exchange outgo during the year in terms of actual outflows ||Nil |
RISK MANAGEMENT POLICY
The Company has in place a mechanism to identify assess monitor and mitigate variousrisks to key business objectives. Major risks identified are systematically addressedthrough mitigating actions on a continuing basis. These are discussed at the meetings ofthe Audit Committee and the Board of Directors of the Company.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has constituted a Corporate Social Responsibility (CSR) Committee inaccordance with Section 135 of the Companies Act 2013. The details of the CSR Policy andinitiatives taken by the Company towards CSR during the year are annexed as 'Annexure IV'to this Report.
Pursuant to provisions of the Companies Act 2013 Rules thereunder and Clause 49 ofListing Agreement the Board has carried out evaluation of its own performance and that ofits Committees and individual Directors.
PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES ASSOCIATES AND JOINTVENTURE COMPANIES:
This information is not required to be given since the Company is not required toprepare consolidated accounts for the year ended 31st March 2015.
CHANGE IN THE NATURE OF BUSINESS IF ANY
There has been no change in the nature of business during the Financial Year underreview.
DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNEDDURING THE YEAR
Directors appointed during the year
|Name of Director ||Designation ||Term of appointment |
|Mr. B.B. Hattarki * ||Independent Director ||Five consecutive years commencing from 16th September 2014 up to 15th September 2019 |
|Mr. M.U. Takale * ||Independent Director ||Five consecutive years commencing from 16th September 2014 up to 15th September 2019 |
|Ms. A.A. Sathe ||Additional Director ||Upto the ensuing Annual General Meeting |
|Mr. B.N. Kalyani ||Director ||Re-appointed with effect from 16th September 2014 subject to retirement by rotation |
*Appointed as Independent Directors in accordance with Section 149 of Companies Act2013 and Clause 49 of the Listing Agreement.
Employees designated as Key Managerial Personnel (KMP) during the year
|Name of the KMP ||Designation |
|Mr. J.G. Patwardhan ||CEO & CFO |
|Mr. S.R. Kshirsagar ||Company Secretary |
Directors and KMP's resigned during the year
Non of the directors or KMPs resigned during the year ended 31st March 2015.
Directors proposed to be re-appointed at the ensuing Annual General Meeting
Mr. A.B. Kalyani retires by rotation at the ensuing Annual General Meeting and beingeligible offers himself for re-appointment.
Ms. A.A. Sathe was appointed as Additional Director on 31st March 2015. Her term ofoffice expires at the end of the ensuing Annual General Meeting. A proposal for herappointment of Independent Director is placed for the approval of members at the ensuingAnnual General Meeting.
The brief resumes and other details relating to Directors who are proposed to bere-appointed as required to be disclosed under Clause 49 of the Listing Agreement formpart of the Notes and Statement setting out material facts annexed to the Notice of theAnnual General Meeting.
NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINT VENTURESOR ASSOCIATE COMPANIES DURING THE YEAR
DETAILS OF DEPOSITS WHICH ARE NOT IN COMPLIANCE WITH THE REQUIREMENTS OF CHAPTER V OFTHE COMPANIES ACT 2013
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
The Company has neither received nor is aware of any such order from Regulators Courtsor Tribunals during the year.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS
The Company has suitable internal control system comprising of proper checks andbalances policies and procedures. This includes code of conduct whistle blower policyMIS and internal audit mechanism.
The Audit Committee along with Management review the internal audit and internalcontrols on a regular basis.
COMPOSITION OF AUDIT COMMITTEE
The composition of the Audit Committee has been mentioned in the Corporate GovernanceReport annexed to this Report.
INFORMATION FORMING PART OF THE DIRECTORS' REPORT PURSUANT TO RULE 5 OF THE COMPANIES(APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014
The relevant information pursuant to Rule 5 (1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed at 'Annexure V' to thisReport.
PARTICULARS OF EMPLOYEES
The particulars of employees pursuant to Section 197 of the Companies Act 2013 readwith Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014.
During the year no employee was in receipt of remuneration in excess of the limitsprescribed under Rule 5 (2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 requiring disclosures prescribed thereunder in this report.
The Company has formulated and implemented the Whistle Blower Policy / Vigil Mechanism.This has provided a mechanism for directors and employees of the Company and other personsdealing with the Company to report to the Chairman of the Audit Committee; any instance ofunethical behaviour actual or suspected fraud or violation of the Company's code ofconduct. The aforesaid policy has also been uploaded on the Company's website.
A Cash Flow Statement for the year ended 31st March 2015 is attached to the BalanceSheet.
A report on the Corporate Governance along with the certificate of compliance from theAuditors forms part of the Annual Report.
Your Directors wish to place on record their appreciation for the contribution madeand support provided to the Company by the shareholders employees and bankers during theyear under the report.
| || ||For and on behalf of the Board of Directors |
| ||B.B. Hattarki ||A.B. Kalyani |
| ||Director ||Director |
|Pune: 22nd July 2015 ||DIN:00145710 ||DIN:00089430 |