Your Directors have pleasure in presenting the 32nd Operational Annual Report of theCompany along with the Audited Financial Statements of the company for the year ended 31stMarch 2016.
The revenue from operations continued to grow at a healthy rate and has now touched agure of Rs.372 crores which on year-to-year basis has increased by 20% and comparing tothe performance of orders book the growth is nearly 50%. This growth is better than theaverage growth in the business sector. The gist of financial performance is enumerated ashereunder:
|Financial year ||2011-12 ||2012-13 ||2013-14 ||2014-15 ||2015-16 |
|Amount (Rs. In lakhs) ||24433.11 ||25722.21 ||25398.53 ||30852.05 ||37226.97 |
|Results || |
(Rs. In Lakhs)
|Particulars ||Year ended 31st March |
| ||2016 ||2015 |
|Profit before nance cost depreciation exceptional items and tax ||3780.90 ||2755.08 |
|Less: Finance Cost ||3460.00 ||2371.84 |
|Profit/Loss before deprecation exceptional items and tax ||320.90 ||383.24 |
|Less: Depreciation ||208.68 ||180.30 |
|Profit/ Loss before exceptional items and tax ||112.22 ||202.94 |
|Add: Amount transferred from Profit & Loss A/c ||5477.21 ||- |
|Less: Exceptional items ||5477.21 ||1621.05 |
|Profit/ (Loss) before tax ||112.22 ||(1418.11) |
|Less: Tax expenses/ (income) ||25.76 ||(445.03) |
|Profit/ (Loss) after taxation ||86.46 ||(973.08) |
Your Company has earned a Profit though insigni cant yet same is an indicator that theprogress of the Company is in the right direction and the coming years should be better.
As on 31st March 2016 your Company has an executable order backlog of Rs. 1500 croreswith an identi ed order pipeline of another Rs. 500 crores. This will ensure betterrevenue generation which in turn will improve the Profitability of the operations. TheCompany has signi cant orders extending almost entire country covering all facets ofrailway constructions.
MANAGEMENT DISCUSSION AND ANALYSIS
The year 2015-16 will be considered a watershed in the history of Kalindee due to awardof single largest signaling and telecommunication contract in Indian railway sector. Thecontract awarded to a consortium of Hitachi Mitsui and Texmaco has Kalindee as aspecialized sub-contractor for the erection & commissioning activity. The execution ofthis contract will propel Kalindee into the front-line of major EPC players in the railwaysector. This is also likely to open further growth opportunities not only in India butalso in other global markets.
The Management Discussion and Analysis Report and Report on Corporate Governance asrequired under the Listing Regulations forms part of the Annual Report.
Your Company has started pursuing overseas opportunities. Speci c businessopportunities have been identi ed in countries like Saudi Arabia Kuwait QatarBangladesh Sri Lanka and Thailand. The proposed investment by Indian Government inChabahar Port Iran will also present signi cant business opportunities.
Technology tie-ups with various world leaders will further strengthen the Company'sposition in both existing as well as emerging markets.
Your Company is successfully running operations on a company - wide ERP system which isensuring process of ef cient and timely data management which in turn has enabledeffective decision making.
IT based systems covering HR & Administrative functions have also improved employeemanagement. The company is now intending to set up own IT infrastructure to host variousIT functions.
Indian economy has now become the fastest growing economy in the world and the railwaysystems are at the fore - front of all these growth. This re ects that the GDP willcontinue to grow @ 8+%. Signi cant initiatives in speeding up various railway projects iscreating a new paradigm in award of contracts. It is expected that Zonal Railways willlook for awarding large value contract on a turn-key EPC basis rather than the presentsystem of small to medium range item based contracts. Such a system will substantiallyincrease the customer base for your Company and thus afford more opportunities Additionalinvestment envisaged in port - connectivity Konkan Railway Metro Projects in both B& C tier Cities will also present signi cant business opportunities.
We have been constantly adding quality man-power in line with various contractualrequirements. A performance based reward system was implemented in the previous year.Brief training programme on developing soft skills was provided to 150 executives over thefinancial year. Selected candidates were also sponsored for various knowledge and skillbased development programmes.
Your Board is not in a position to recommend dividend for the financial year underreview in view of non-availability of suitable Profits from current years operations. Themove will help your Company to consolidate the financial position of the Company.
As envisaged in the Business Scenario and implementation of the initiative which areunderway the company expect higher orders in domestic market and signi cant orders ininternational market.
HOLDING SUBSIDIARY AND ASSOCIATE COMPANY
Texmaco Rail & Engineering Limited is the holding company of your Company. YourCompany do not have any Subsidiary and /or Associate Company.
During the year the Company has not accepted any Deposits under the Companies Act2013. There are no unclaimed deposits as on March 31 2016.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
During the year your Company has not given any guarantee loans or provided anysecurity hence there is nothing required to be furnished on this count.
AUDIT COMMITTEE AND AUDITORS
The composition and other nuances of the Audit Committee is provided in the Report onCorporate Governance as attached to the Directors' Report and should be read as integralpart of the Annual Report.
The Company's Statutory Auditors M/s.S S Kothari Mehta and Co. Chartered Accountants(ICAI Firm Registration No. 000756N) New Delhi requires resolution for rati cation ofappointment in view of their appointment being carried out by members at the AGM for yearended 31.03.2014 which was effected for a period of 5 years as required pursuant toapplicable provisions.
The said rm being eligible and expressing willingness for continuing as such theirappointment by way of rati cation is proposed for consideration and approval as such bymembers in ensuing AGM.
Your Board is in receipt of certi cate from the Statutory Auditors to the effect thatthey are eligible for continuing as Statutory Auditors under the applicable provisions ofthe Companies Act 2013 and the Companies (Audit and Auditors) Rules 2014 as amendedtime to time.
Pursuant to the provisions of Section 204 of the Companies Act and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 your Board hadappointed M/s. Jatin Gupta & Associates New Delhi a rm of Company Secretaries inPractice to undertake the Secretarial Audit of the Company for the year ended 31st March2016. The Secretarial Audit Report is attached as Annexure A.
The Statutory Auditors' Report and the Secretarial Auditor' Report for the financialyear ended 31st March 2016 do not contain any quali cation reservation adverse remarkor disclaimer. Your Board will decide for Secretarial Audit for ensuing year in time tocome including name of Secretarial Auditors.
DIRECTORS' RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the Internal Statutory andSecretarial Auditors including audit of the internal financial controls over financialreporting by the Statutory Auditors and the reviews performed by Management and therelevant Board Committees including the Audit Committee your Board is of the opinionthat the Company's internal financial controls were adequate and effective during thefinancial year 2015-16.
Pursuant to the requirements under Section 134 (3) (c) and 134 (5) of the CompaniesAct 2013 your Board hereby con rm that:
(i) in the preparation of the annual accounts for the year ended 31st March 2016 theapplicable accounting standards read with requirements set out under Schedule III to theCompanies Act 2013 have been followed and there are no material departures from thesame;
(ii) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2016 and of the Profitof the Company for the year ended as on that date;
(iii) the Directors have taken proper and suf cient care for maintenance of adequateaccounting records in accordance with provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(iv) the Directors have prepared the annual accounts of the Company on a "goingconcern" basis;
(v) the Directors have laid down internal financial controls to be followed by theCompany and the such internal financial controls are considered adequate and are operatingeffectively; and
(vi) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that systems are considered adequate and operating effectively.
CORPORATE SOCIAL RESPONSIBILITY
Your Company has ended the last FY in losses hence the only criteria applicable toCompany is constitution of CSR Committee and CSR Policy spending is not supported by thefinancials of your Company. Despite this your company understands its responsibility andhas indulged in various CSR initiatives performed at 16 'Adventz' level. Keeping in viewof the fact that 80% of its employees are located in remote project sites individualproject teams are engaged in implementing various CSR projects like
a) Water conservations
b) Solar energy utilization
c) Using LED lights
d) Training local resources in relevant skill developments
The company thus endeavors to add signi cant value to the society and the environmentat its work places.
The Committee has formulated the CSR policy pursuant to Section 135 and Schedule VII ofthe Companies Act 2013 read with the Companies (Corporate Social Responsibility Policy)Rules 2014 and your Board has adopted same as its CSR policy.
Your Board has strived hard each time to support the locals and environment includingora and fauna in its endeavor. The other relevant disclosures required in terms ofapplicable provisions are enumerated as hereunder:
The CSR and Sustainability Committee presently comprises of three directors one ofwhom Mr. Shanti Narain Independent Director is Chairman of the Committee.
The names of the members of the CSR and Sustainability Committee including itsChairman are provided under the section 'Board of Directors and Committees' in the Reportand Accounts.
Meetings and Attendance
Details of CSR Committee Meetings during the financial year
Despite no allocable surplus one meeting of CSR Committee was convened on 4thFebruary 2016. The CSR policy stands uploaded on the companys website:www.kalindee.net & Annual Report on CSR is enclosed as Annexure B.
RELATED PARTY TRANSACTION:
All Related Party Transactions are placed before the Audit Committee for approval.Prior omnibus approval of the Audit Committee is obtained for the transactions which arerepetitive in nature. A statement of all Related Party Transactions is placed before theAudit Committee for its review specifying the nature value and terms and conditions ofthe transactions.
Your Company has adopted a Related Party Transactions Policy. The Policy as approvedby the Board is uploaded on the Company's website
Details of the transactions with Related Parties are provided in the accompanyingfinancial statements.
INTERNAL FINANCIAL CONTROLS AND RISK MANAGEMENT
Your Company has proper and adequate system of internal controls. This ensures that alltransactions are authorised recorded and reported correctly and assets are safeguardedand protected against loss from unauthorized use or disposition. In addition there areoperational controls and fraud risk controls covering the entire spectrum of internalfinancial controls. The system is commensurate with the size and nature of operations ofthe Company.
Your Company also has in place a Risk Management Policy pursuant to Section 134 of theAct. This Risk Management framework enables identi cation and evaluation of business risksand opportunities seeks to create transparency minimize adverse impact on businessobjectives and enhance the Company's competitive advantage. It also describes the riskmanagement approach across the enterprise at various levels.
Major risks identi ed by business and functions are systematically addressed throughmitigation actions on a periodic basis. Existing control measures are evaluated againstthe relevant Key Performance Indicators.
The Company has laid down procedures to inform the Audit Committee as well as the Boardabout risk assessment and management procedures and status. These procedures areperiodically reviewed to ensure that the executive management monitors and controls risks.The Internal Audit team is responsible for coordinating with various heads of Departmentswith respect to risk identi cation assessment analysis and mitigation. The major risksforming part of the Enterprise Risk Management process are linked to the audit universeand are also covered as part of the annual risk based audit plan.
Your Board periodically reviews the risks and suggests steps to be taken to control andmitigate the same through a properly de ned framework.
The Board of Directors (the Board) an apex body formed by the shareholders serve andprotect the overall interests of stakeholders; provides and evaluates the strategicdirections of the Company; formulates and reviews management policies and ensure theireffectiveness.
The Board represents an optimum mix of professionalism knowledge and experience. As on31st March 2016 the total strength of the Board was 11 (Eleven) directors. No directorsare member of more than ten committees or chairman of more than ve committee across in allcompanies in which they are directors. The Company has bene ted from the professionalexpertise of the Independent Directors.
Your Board con rms that company has Nomination and Remuneration Committee (N & RCommittee) in its place yet considering no director on Board of your Company drawing anyremuneration there was no need to hold a separate meeting of said committee except whenMr. Mohan Kumar Mysore Subbanna was appointed as Executive Director as on 4th February2016 whereupon said Committee duly met considered and approved said appointment by way ofrecommendation to Board. The policy on directors' appointment and remuneration existswhich include entire gamut of coverage as prescribed pursuant to Section 178 of theCompanies Act 2013 i.e. criteria for determining quali cations positive attributesindependence of a director and other matters provided under sub-section (3) of section178.
Appointment Resignation and Retirement of Directors
Furthermore Mr. Sandeep Fuller and Mr. Varun Bharthuar Directors are liable to retireby rotation at the Annual General Meeting and being eligible offer themselves for re -appointment. Your directors recommend their re - appointment at the ensuing Annual GeneralMeeting in the overall interest of the Company.
Also Mr. Mohan Kumar Mysore Subbanna COO of the Company was appointed as AdditionalDirector on 04.02.2016 consequent upon intent of Texmaco Rail & Engineering Limited toappoint him as Director on the Board. On account of applicability of provisions of Section160 & 161 of the Companies Act 2013 the tenure of person acting as additionaldirector shall come to an end on the date of ensuing AGM. Accordingly his candidature hasbeen considered as Special Business in notice convening AGM for FY ended 31.03.2016.
The brief resume of Directors retiring by rotation and seeking re - appointment alongwith director whose candidature is been considered in ensuing AGM is appended in thenotice for calling Annual General Meeting.
Your directors recommend their re - appointment and candidature at ensuing AnnualGeneral Meeting in the overall interest of the Company.
During the year Mr. Vikram Singhal resigned as a Non - Executive and Non - IndependentDirector of the Company. The Board would like to place on record its appreciation for thecontribution made by Mr. Singhal while he was on the Board.
Mr. Prakash Chandra Kejriwal was appointed as CFO of the Company in view of resignationby erstwhile CFO i.e. Mr. Vikas Jain. There has been no other change in key managerialpersonal during the year.
Declaration by Independent Directors
All Independent Directors of the Company have given declarations that they meet thecriteria of independence as laid down under Section 149 (6) of the Act and Regulation 16(1) (b) of the Listing Regulations. In the opinion of the Board they ful ll theconditions of independence as speci ed in the Act and the Rules made there under and areindependent of the management.
The Company has adopted Governance Guidelines on Board Effectiveness. The GovernanceGuidelines cover aspects related to composition and role of the Board Directors Boarddiversity and de nition of independence Director's term retirement age and Committeesof the Board. It also covers aspects relating to nomination appointment induction anddevelopment of Directors Directors remuneration Code of Conduct Board EffectivenessReview and Mandates of Board Committees.
Annual Evaluation of Board Performance and Performance of its Committees and Directors:
Pursuant to the applicable provisions of the Act and the Listing Regulations the Boardhas carried out an annual evaluation of its own performance performance of the Directorsas well as the evaluation of the working of its Committees.
The Nomination and Remuneration Committee has de ned the evaluation criteria procedureand time schedule for the performance Evaluation process for the Board its Committees andDirectors. The Board's functioning was evaluated on various aspects including inter aliadegree of ful llment of key responsibilities Board structure and compositionestablishment and delineation of responsibilities to various Committees effectiveness ofBoard processes information and functioning.
Directors were evaluated on aspects such as attendance and contribution at Board/Committee Meetings and guidance/support to the management outside Board / CommitteeMeetings. Areas on which the Committees of the Board were assessed included degree of fulllment of key responsibilities adequacy of Committee composition and effectiveness ofmeetings.
The performance evaluation of the Independent Directors was carried out by the entireBoard excluding the Director being evaluated. The performance evaluation of the NonIndependent Directors was carried out by Independent Directors who also reviewed theperformance of the Board as a whole. The Nomination and Remuneration Committee alsoreviewed the performance of the Board its Committees and of the Directors.
The Company has adopted a Remuneration Policy for the Directors Key ManagerialPersonnel and other employees pursuant to the provisions of the Act and the ListingRegulations. The Remuneration Policy is attached as Annexure C.
Signi cant & Material Orders Passed by the Regulators
During the year no signi cant and material orders has been passed by the regulators orcourts or tribunals impacting the going concern status and company's operations in future.Hence there is nothing to be stated on this count.
Particulars of Employees and related disclosures
The information required under Section 197 (12) of the Act read with Rule 5 of TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is attachedas Annexure D.
The information required under Rule 5 (2) and (3) of The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is provided in the Annexure forming partof the Report.
None of the employees listed in the said Annexure is related to any Director of theCompany.
Policy on Prevention Prohibition and Reddressal of Sexual Harassment at Workplace
The Company has zero tolerance for sexual harassment at workplace and has adopted aPolicy on Prevention Prohibition and Reddressal of Sexual Harassment at the Workplace inline with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Reddressal) Act 2013 and the Rules there under. The Policy aims toprovide protection to employees at the workplace and prevent and redress complaints ofsexual harassment and for matters connected or incidental thereto with the objective ofproviding a safe working environment where employees feel secure. The Company has alsoconstituted an Internal Complaints Committee known as the Prevention of Sexual Harassment(POSH) Committee to inquire into complaints of sexual harassment and recommendappropriate action.
The Company has not received any complaint of sexual harassment during the financialyear 2015-16.
No disclosure or reporting is required in respect of the following items as there wereno transaction on these items during the year under review:
1. Details relating to deposit and unclaimed deposits or interest thereon.
2. Issue of equity shares with differential rights as to dividend or voting.
3. Issue of shares (including sweat equity shares) and Employee Stock Option Scheme ofthe Company under any scheme.
4. No signi cant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern and Company's operation in future.
The Company has adopted a Whistle Blower Policy to provide a formal mechanism to theDirectors and Employees to report their concerns about unethical behavior actual orsuspected fraud or violation of the Company's Code of Conduct or ethics policy. The Policyprovides for adequate safeguards against victimization of employees who avail of themechanism and also provides for direct access to the chairperson of the Audit Committee.It is af rmed that no personnel of the Company has been denied access to the AuditCommittee. The Policy on Vigil Mechanism and Whistle Blower Policy may be accessed on theCompany's website atwww.kalindee.net
CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION
Information relating to Conservation of Energy Technology Absorption Foreign ExchangeEarnings and Outgo required to be made pursuant to section 134(3) (m) of the CompaniesAct 2013 read with rule 8 of the Companies (Accounts) Rules 2014 is given in AnnexureE and forms part of this report.
ABSTRACT OF ANNUAL RETURN:
Pursuant to Section 92(3) of the Companies Act 2013 and Rule 12(1) of the Companies(Management and Administration) Rules 2014 the extract of the Annual Return in FormMGT-9 is annexed here with as
CHANGES IN SHARE CAPITAL
The Company has not issued any Equity Shares during the year under review. During theyear under review the Company has neither issued shares in general and nor withdifferential voting rights or granted stock options or sweat equity and does not have anyscheme to fund its employees to purchase the shares of the Company. As on 31st March2016 none of the Directors of the Company hold convertible instruments.
TAKE NOTE OF CORPORATE GOVERNANCE REPORT
The Corporate Governance report as certi ed by M/s. S.S. Kothari Mehta & Co.Chartered Accountants New Delhi being the Statutory Auditors of the Company is alsoenclosed and should be read as part and parcel of present Annual Report includingmanagement report on Corporate Governance Management Discussion and Analysis Report.
A separate section on Corporate Governance is attached as a separate Annexure and formsa part of this report.
A certi cate from Chartered Accountants regarding compliance of the conditions ofCorporate Governance as stipulated under LODR with stock exchanges is attached as aseparate Annexure and forms a part of this report.
A certi cate from the Managing Director that all board members and senior managementpersonnel have af rmed compliance with the code of conduct for the year ended March 312016 is attached as a separate Annexure and forms a part of this report.
CEO / CFO certi cate is attached as a separate Annexure and forms a part of thisreport.
EMPHASIS OF MATTER
Statutory auditors had drawn attention of Board to note no. 3 of their report that theCompany has withdrawn Rs. 5477.21 lacs from balance of statement of Profit & loss.There is no speci c accounting treatment prescribed in the Accounting Standards and theCompanies Act 2013 but the Company has transferred the amount based on an expert opinionobtained. However the Statutory Auditors report is not quali ed in respect of thismatter.
Accordingly the Board approved the below stated reply for the Emphasis of matter givenby the auditors:
Post the takeover of Company by Texmaco it has brought in Standard and prudentaccounting and business practices in the system to have better control over the financialsof the Company. As a part of such standard and prudent process the Company has initiatedthe process of balance con rmations and account reconciliation of all trade receivableseven without insistence of auditors in the regard.
The Company has reconciled majority of its trade receivables / loans and advances.Pursuant to such reconciliation the company has made a provision for doubtful debts ofRs. 5477.21 lacs in statement of Profit & loss for the year ended 31stMarch 2016.Considering these trade receivables / loans and advances as past due an equivalent amounthas been transferred from surplus in statement of Profit & loss of the earlier years.This transfer to the statement of Profit and loss is based on an expert opinion obtainedby the Company. As the aforesaid accounting adjustments pertain to past due it has beendisclosed as an exceptional item.
In commitment to keep in line with the Green Initiative and going beyond it to createnew green initiatives electronic copies of the notice of the AGM are sent to all memberswhose email addresses are registered with the Company/Depository Participant(s). Formembers who have not registered their e-mail addresses physical copies are sent throughthe permitted mode.
FOREIGN EXCHANGE EARNINGS AND OUTGO
a) Activities relating to exports initiatives taken to increase exports developmentof new export markets for products and services: Continued drive is being made to developnew export markets in the eld of Railway EPC.
b) Total foreign exchange used and earned: Used: Rs. 1.66 Lacs Earned: Rs. NIL Lacs
Scheme of Amalgamation
Your company is undergoing amalgamation process which entails your Company to getmerged with Texmaco Rail & Engineering Limited (Texmaco). The merger scheme ofKalindee with Texmaco has been approved by the Hon'ble High Court Calcutta vide its orderdated 26th February 2016. The approval of the Hon'ble High Court Delhi where theKalindee's Registered Of ce is located is still awaited.
Cash Flow Analysis
As stipulated the financial statements were prepared by the Company in accordance withapplicable Accounting Standards issued by the Institute of Chartered Accountants of Indiaand the same together with the Auditors Report thereof form part of the Annual Report.
Dematerialisation of Equity Shares
Your company is in agreement with CDSL & NSDL for dematerialization and Company'sISIN Number is INE178D01010. The company has already appointed M/s MCS Share TransferAgent Ltd. as its Registrar and Share Transfer Agent for handling requests related todemat as well as for physical transfer of equity shares and other related issues of theCompany.
Your directors wish to place on record their appreciation for the continued support ofthe customers financial institutions and suppliers. Your directors also wish to recordthe appreciation for the valuable contribution made by employees at all levels and thecontinued support of your collaborators.
On behalf of the Board of Directors We would like to convey to our Hon'ble membersthat over the years your deep and abiding trust and invaluable support has enabled us tocontinuously improve our performance despite extremely challenging time in the recent pastwhere in sourcing raw materials / components at competitive prices have become an arduoustask and further hope they will continue to give their support in full spirit in the yearto come.
| ||For and on behalf of the Board || |
| ||Sd/- ||Sd/- |
|Date: 23.07.2016 ||Hemant Kumar ||Sandeep Fuller |
|Place: Gurgoan ||Director ||Managing Director |