Your Directors have pleasure in presenting their Seventh Annual Report on the businessand operations of the Company together with Audited Statement of Accounts for the yearended 31st March 2016.
FINANCIAL PERFORMANCE :
(Rs. in Million)
|Particulars ||Year ended 31st March 2016 ||Year ended 31st March 2015 |
|Total Income ||249.90 ||207.31 |
|Total Expenditure ||26.93 ||16.76 |
|Profit before taxation ||222.97 ||190.56 |
|Provision for tax (including Deferred Tax) ||7.65 ||3.05 |
|Net Profit ||215.32 ||187.51 |
|Balance of Profit/(Loss) from previous year ||3409.24 ||3259.24 |
|Add Profit for the year ||215.32 ||187.51 |
|Balance available for appropriation ||3624.56 ||3446.75 |
|Appropriations : || || |
|Transfer to Reserve Fund in terms of Section 45-IC of the Reserve Bank of India Act 1934 ||43.06 ||37.50 |
|Balance carried to Balance Sheet ||3581.50 ||3409.24 |
The paid-up Equity Share Capital as on 31st March 2016 stood at Rs.188.33Million. During the year under review the Company has not issued shares with differentialvoting rights nor has granted any stock options or sweat equity. As on 31stMarch 2016 none of the Directors of the Company hold instruments convertible into equityshares of the Company.
Your Directors do not recommend any dividend on the equity shares for the year endedMarch 31 2016.
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 Rs.24.99Crores (previous years Rs.20.73 Crores). The net profit after tax is Rs.21.53 Crores(previous years Rs.18.75 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 2016 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 Company does not have any subsidiary company as on 31st March 2016.
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
The details are given in 'Annexure I'
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of Annual Return in Form MGT - 9 is annexedherewith as 'Annexure II' 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 SecuritiesExchange Board of India (Listing Obligations & Disclosure Requirements) Regulations2015 hereinafter called "Regulations 2015".
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 31stMarch 2016 the applicable accounting standards have been followed along with the properexplanation relating to material departures;
b) accounting policies as mentioned in Note - 3 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 2016 and of the profit of the Company for the yearended on that date;
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 Regulations2015.
COMPANY'S POLICY ON DIRECTORS' AND KMP'S APPOINTMENT AND REMUNERATION
Director's appointment and remuneration is done as per the policy for selection andappointment of Directors Key Managerial Personnel and Senior Management Personnel andtheir remuneration. The policy is appended as 'Annexure III' to this Report
ACCOUNTS AND AUDIT
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) till theconclusion 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 IV' to this Report.
c. CONSOLIDATED ACCOUNTS
The Consolidated Accounts for the year ended 31st March 2016 are enclosed.
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 |
|Secretarial Audit - || |
|a. The Company has not expended any amount for Corporate Social Responsibility activities as per Section 135 of the Act for the Financial 2015-16 ||The Company has identified the areas and the projects for spending the amounts allocated for CSR activities for Financial 2015-16. The Company has spent on CSR activities amounts due for FY 2014-15. |
|b. The Board appointed Mr. Amit Kalyani as the Chairman of the Company on 22nd July 2015 however the Company could not yet file/upload Form DIR-12 for the said change in designation due to technical error at MCA Website for uploading the said Form DIR-12. ||This is due to technical problems solely attributable to MCA site. The Company made all efforts to file DIR-12 referred herein. |
PARTICULARS OF LOANS GUARANTEES OR INVESTMENT UNDER SECTION 186
During the year the Company has invested Rs.37 Crores (net) in preference shares of aCompany. 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 loans of Rs.5.50 Cr. (net).
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. 4.24 to theStandalone Financial 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 V'to this Report.
Pursuant to provisions of the Companies Act 2013 Rules thereunder and 'Regulations2015' the Board has carried out evaluation of its own performance and that of itsCommittees and individual Directors.
PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES ASSOCIATES AND JOINTVENTURE COMPANIES:
The information is given at the relevant places in the Financial Statements.
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 |
|Ms. A.A. Sathe * ||Independent Director ||Five consecutive years commencing from September 19 2015 up to September 18 2020 |
|Mr. A. B. Kalyani ||Director ||Re-appointed with effect from September 19 2015 subject to retirement by rotation |
*Appointed as Independent Director in accordance with Section 149 of Companies Act2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015.
Employees designated as Key Managerial Personnel (KMP) during the year
Directors and KMP's resigned during the year
None of the KMPs resigned during the year ended 31st March 2016. Mr. B. N.Kalyani Chairman of the Board resigned on 12th May 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 reappointment.
The brief resumes and other details relating to Director who is proposed to bere-appointed as required to be disclosed under Regulations 2015 form part of the Notesand Statement setting out material facts annexed to the Notice of the Annual GeneralMeeting.
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 include code of conduct whistle blower policyMIS and internal audit mechanism.
The Audit Committee along with Management reviews 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.
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 2016 is attached to theBalance Sheet.
A report on the Corporate Governance along with the certificate of compliance from theAuditors forms part of the Annual Report.
OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
In terms of provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 the Company has formulated a Policy to preventSexual Harassment of Women at Workplace. During the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013
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 ||M. U. Takale |
| ||Director ||Director |
|Pune: 20th August 2016 ||DIN:00145710 ||DIN:01291287 |
ANNEXURE I TO THE DIRECTORS' REPORT
INFORMATION FORMING PART OF THE DIRECTORS' REPORT PURSUANT TO RULE 5 OF THE COMPANIES(APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014
|Sr. No. ||Particulars ||Name of Director ||Ratio |
|I. ||The ratio of remuneration of each director to the median remuneration of the employees of the Company for the financial year ||N.A. as no remuneration except sitting fee is paid to any Director |
|II. ||The percentage increase in remuneration of each director Chief Financial Officer Chief Executive Officer Company Secretary or Manager if any in the financial year ||Name of Director / KMP ||Percentage +/(-) in the remuneration |
| || ||Mr. J. G. Patwardhan * - ||NIL |
| || ||CEO & CFO || |
| || ||Mr. S.R. Kshirsagar * - ||NIL |
| || ||Company Secretary || |
|III. ||The percentage increase in the median remuneration of employees in the financial year ||NIL || |
|IV. ||The number of permanent employees on the rolls of Company ||NIL || |
|V. ||Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification there of and point out if there are any exceptional circumstances for increase in the managerial remuneration ||NIL || |
| || ||NIL || |
|VI. ||Affirmation || |
The Board affirms that the remuneration is as per the Nomination and Remuneration policy of the Company.
|VII. ||Statement showing the names of the top ten employees interms of remuneration drawn and the names of every employee who - ||No employee falls in this category. || |
| ||(i) if employed throughout the financial year was in receipt of remuneration for that year which in the aggregate was not less than One Crore Two Lakhs Rupees; || || |
| ||(ii) if employed for a part of the financial year was in receipt of remuneration for any part of that year at a rate which in the aggregate was not less than Eight Lakhs Fifty Thousand Rupees per month; || || |
| ||(iii) if employed throughout the financial year or part thereof was in receipt of remuneration in that year which in the aggregate or as the case may be at a rate which in the aggregate is in excess of that drawn by the Managing Director or Whole-time Director or Manager and holds by himself or along with his spouse and dependent children not less than two percent of the equity shares of the Company. || || |
* on deputation
| ||For and on behalf of ||the Board of Directors |
| ||B.B. Hattarki ||M. U. Takale |
| ||Director ||Director |
|Pune: 20th August 2016 ||DIN:00145710 ||DIN:01291287 |