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Kalyani Commercials Ltd.

BSE: 538403 Sector: Others
NSE: KALYANI ISIN Code: INE610E01010
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Kalyani Commercials Ltd. (KALYANI) - Director Report

Company director report

The Members

Kalyani Commercials Limited

The Board of Directors hereby presents its 31st Directors' Report onbusiness and operations of the Company along with Audited Financial Statements for thefinancial year ended 31st March 2016.

1. BACKGROUND

The Company is a Non Deposit Accepting Non Banking Finance Company ("NBFC")holding a Certificate of Registration (14.00928) from the Reserve Bank of India("RBI").

2. STATE OF COMPANY'S AFFAIR

With the expected positive momentum in the Indian economy the Company is focused ongrowth and achieving profitability along with a renewed commitment to enhance quality andcustomer service and to reduce costs. Innovations investment and positive modificationsare expected in the near future boosting the Company's revenues. Together with forwardlooking strategy the Company is also focusing extensively on expanding the business andoperational improvements through various strategic projects for operational excellence andcost cutting initiatives.

3. FINANCIAL HIGHLIGHTS

During the year under review the revenue reported was Rs. 536.23 Crores as compared toRs. 319.39 Crores in previous year; the ultimate increase in revenue of 67.89%. Profitbefore tax for the current year is Rs. 0.91 Crores as compared to Rs. 0.68 Crores inprevious year the ultimate change in PBT of 33.82%. Profit after tax for the current yearis Rs 0.62 Crores as compared to Rs. 0.48 Crore in the previous year the ultimate changein PAT of 29.16%.

4. SUMMARY OF FINANCIAL RESULTS

The Company's financial results are as under:

(Rs. In crores)
Particulars

For the year ended

31st March 2016 31st March 2015
Total Revenue (I) 536.23 319.39
Total Expenses (II) 535.32 318.70
Profit Before Tax & Extraordinary Item 0.91 0.68
Tax Expenses
- Current Tax 0.30 0.28
- Deferred Tax Liability (Net) (0.02) (0.09)
- Income Tax Earlier Year 0.006 0.009
Profit After Tax 0.62 0.48
Profit/(Loss) transferred to Balance Sheet 0.62 0.48
Earning Per Share 6.21 4.83

5. RESERVE FUND

The Board has transferred profit after tax of Rs. 0.62 crore to Reserves for thefinancial year ended as on 31st March 2016 as compared to Rs. 0.48 crore inprevious year.

6. APPOINTMENT OF REGISTRAR AND SHARE TRANSFER AGENT

Pursuant to provisions of Regulation 7 of SEBI (Listing obligations and DisclosureRequirements) Regulations 2015 the Company has appointed Skyline Financial Services Pvt.Ltd. as the Registrar & Share Transfer Agent of the Company in place of Link In TimeIndia Private Limited to carry out the activities of registry and transfer of EquityShares of the Company w.e.f. 27th January 2016.

7. APPLICATION FOR DIRECT LISTING AT NATIONAL STOCK EXCHANGE

During the Year the Company has applied for Direct Listing of its 1000000 equityshares of Rs. 10 each to National Stock Exchange (NSE) on 10th March 2016. Theapplication is under process.

The Company foresees to get the Listing Approval from the exchange in near future.

8. DIVIDEND

In view of the planned business growth your Directors deem it proper to preserve theresources of the Company for its activities and therefore do not propose any dividend forthe Financial Year ended 31st March 2016.

9. BUSINESS RISK MANAGEMENT

Risk Management is an integral part of the Company's business strategy. The RiskManagement oversight structure includes Committees of the Board and Senior ManagementCommittees. The Audit Committee of the Board reviews compliance with risk policiesmonitors risk tolerance limits reviews and analyzes risk exposure related to specificissues and provides oversight of risk across the organization. The Audit Committeenurtures a healthy and independent risk management function to inculcate a strong riskmanagement culture in the Company.

As part of the Risk Management framework the management of Credit Risk Market RiskOperational Risk and Fraud Risk are placed under the Head-Risk to ensure Integrated RiskManagement for various Risks.

10. INTERNAL CONTROL SYSTEMS

The Company's internal control system is designed to ensure operational efficiencyprotection and conservation of resources accuracy and promptness in financial reportingand compliance with laws and regulations. The internal control system is supported by aninternal audit process for reviewing the adequacy and efficacy of the Company's internalcontrols including its systems and processes and compliance with regulations andprocedures.

Further pursuant to Section 138 of the Companies Act 2013 and the Companies(Accounts) Rules 2014 Internal Auditor of the Company Ms. Pratibha Jain of M/s. R.L.Vijayveergiya & Co. Chartered Accountants is performing all the duties as requiredto be performed by Internal Auditor under the Companies Act 2013 and submit its report toAudit Committee of the Board from time to time.

11. VIGIL MECHANISM / WHISTLE BLOWER POLICY

Pursuant to Section 177 of the Companies Act 2013 every listed Company shallestablish a Whistle Blower policy/Vigil Mechanism for the Directors and Employees toreport genuine concerns or grievances about unethical behavior actual or suspected fraudor violation of the Company's Code of Conduct or Ethics Policy. The Company has adopted aCode of Conduct for Directors and Senior Management Executives ("the Code")which lays down the principles and standards that should govern the actions of the Companyand its employees. Any actual or potential violation of the Code howsoever insignificantor perceived as such would be a matter of serious concern for the Company. To review thematters relating to fraud risk including corrective and remedial actions as regardspeople and processes the Company has formed a vigil mechanism policy which is in directcontrol of the Audit Committee of the Company.

12. HUMAN RESOURCES

The Company recognizes people as its most valuable asset and it has built an opentransparent and meritocratic culture to nurture this asset. The Company has kept a sharpfocus on Employee Engagement. The Company's Human Resources is commensurate with the sizenature and operations of the Company.

13. DEPOSITS FROM PUBLIC

The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet.

14. DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP) APPOINTED / RESIGNED DURINGTHE YEAR

During the Year under review the following changes occurred in the position ofDirectors/KMPs of the Company.

LIST OF DIRECTORS AS ON 31st MARCH 2016:

S. No. Name Designation Date of Appointment Change
1. Shankar Lal Agarwal Managing Director 13-Sep-01 -
2. Sourabh Agarwal Whole-time Director 29-Aug-11 Proposed to be reappointed as Executive Director retire by rotation in the ensuring AGM
3. Manushree Agarwal Director 18-Jun-13 -
4. Nitesh Gupta Director 29-Aug-11 -
5. Alok Kumar Gupta Director 29-Sep-08 -
6. Mukesh Joshi Director 30-Sep-13 -

LIST OF KEY MANAGERIAL PERSONNEL (KMP) AS ON 31st MARCH 2016:

S. No. Name Designation Date of Appointment Change
1. Shankar Lal Agarwal Managing Director 13-Sep-01 -
2. Sourabh Agarwal Chief Financial Officer 31-Mar-15 -
3. Vikramjit Singh* Company Secretary & Compliance Officer 07-Mar-16

* Ms. Arti Verma resigned from the post of Company Secretary w.e.f. 07thMarch 2016. The Board appreciates the efforts and works done by her during her tenure. Wewish all the best for her successful career. The Company further appointed Mr. VikramjitSingh as the Company Secretary and Compliance Officer on 07th March 2016 whocurrently holds the post of Company Secretary of the Company.

15. BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations& Disclosure Requirements) Regulation 2015 a structured questionnaire was preparedafter taking into consideration of the various aspects of the Board & its Committeesexecution and performance of specific roles duties obligations and governance. Theperformance evaluation of Committees Executive Directors Non-Executive Directors andIndependent Directors was completed. The Performance evaluation of the ChairmanNon-Executive Directors & Board as a whole was carried out by the IndependentDirectors. The Board of Directors expressed their satisfaction with the evaluationprocess.

Directors of the Company has carried their own performance evaluation too known as"Self Assessment"

16. MEETINGS HELD DURING THE F.Y. 2015-2016

The agenda and Notice of the Meetings is prepared and circulated in advance to theDirectors. During the year under review 12 (Twelve) Board Meetings 4 (Four) AuditCommittee Meetings 4 (Four) Shareholder's Grievance Committee Meetings 2 (Two)Nomination and Remuneration Committee and 1 (One) Independent Directors Meeting wereconvened and held. The intervening gap between the Meetings was within the periodprescribed under the Companies Act 2013.

17. COMPOSITION OF COMMITTEES OF THE BOARD AS ON 31st March 2016:

a) AUDIT COMMITTEE:

The composition of audit committee of the Company is as follow:

S. No. Name of Member Designation Category
1. Mukesh Joshi Chairman Non- Executive & Independent
2. Nitesh Gupta Member Non- Executive
3. Alok Kumar Gupta Member Non- Executive & Independent

The Board has accepted all the recommendations proposed by audit committee during thefinancial year.

b) NOMINATION AND REMUNERATION COMMITTEE:

S. No. Name of Member Designation Category
1. Mukesh Joshi Chairman Non- Executive & Independent
2. Nitesh Gupta Member Non- Executive
3. Alok Kumar Gupta Member Non- Executive & Independent

c) SHAREHOLDER'S GRIEVANCE COMMITTEE:

S. No. Name of Member Designation Category
1. Alok Kumar Gupta Chairman Non- Executive & Independent
2. Shankar Lal Agarwal Member Executive
3. Nitesh Gupta Member Non-Executive

d) FINANCE & INVESTMENT COMMITTEE:

S. No. Name of Member Designation Category
1. Mukesh Joshi Chairman Non- Executive & Independent
2. Alok Kumar Gupta Member Non- Executive & Independent
3. Nitesh Gupta Member Non-Executive

18. PARTICULARS OF EMPLOYEES

The information as per Section 197 read with Rule 5(1) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 is as under:

(i). The ratio of remuneration of each director to the median remuneration of theemployees of the employees of the Company for the financial year 2015-16:

S. No. Directors Ratio to median remuneration
1 Mr. Shankar Lal Agarwal NIL
2 Mr. Sourabh Agarwal 5.82
3 Mr. Alok Kumar Gupta NIL
4 Mr. Nitesh Gupta NIL
5 Mrs. Manushree Agarwal NIL
6 Mr. Mukesh Joshi NIL

(ii) . There has been no percentage increase in the remuneration of any Director ChiefFinancial

Officer Chief Executive Officer and Company Secretary in the financial year 2015-16.

(iii) . There has been 1.9% increase in the median remuneration of employees in thefinancial year

2015-16.

(iv) . As of 31st March 2016 the total no of permanent employees on therolls of the Company: 161

(v) . Average percentage increase in salary of the Company's employees was 4%. Thetotal remuneration to employees for the Financial Year 2015-16 was Rs. 20649378/- ascompared to Rs. 20717523/- in the Financial Year 2014-15.

(vi) . The Company affirms that remuneration given is as per the remuneration policy ofthe Company.

However as per the provisions of Section 136 of the Act the Report and Accounts arebeing sent to all the members excluding the information on particulars of employees whichis available for inspection by the members at the Registered Office of the Company duringbusiness hours on working days of the Company up to the date of the ensuing Annual GeneralMeeting.

19. DISCLOSURE UNDER RULE 5 (2) & (3) OF THE COMPANIES (APPOINTMENT ANDREMUNERATION) RULES 2014

No directors/employees of the Company was in receipt of amount exceeding a salary of Rs850000/- per month or Rs. 10200000/- per annum or more when employed for whole of theyear under the provisions of Rule 5 (2) & (3) of The Companies (Appointment AndRemuneration) Rules 2014.

20. PARTICULARS OF CONTRACT OR ARRANGEMENT WITH RELATED PARTIES U/S 188(1)

The particulars of every contract or arrangements entered into by the Company withrelated parties referred to in sub-section (1) of section 188 of the Companies Act 2013including certain arms length transactions under third proviso thereto shall be disclosedin Form No. AOC -2 ("Annexure A").

21. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIESACT 2013.

Pursuant to Section 186(11) of the Companies Act 2013 disclosure under Section 134(3)(g) of the Companies Act 2013 is not applicable on the Company.

22. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There were no such orders passed against the company during the year.

23. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

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 this annual report.

24. CHANGE IN THE NATURE OF BUSINESS

There has been no change in nature of business during the financial year under review.

25. STATUTORY AUDITORS

Pursuant to the provisions of Section 139 of the Act and the rules framed there underM/s M.C. Bhandari & Co. Chartered Accountants were appointed as statutory auditorsof the Company from the conclusion of the annual general meeting (AGM) of the Company heldon September 30 2014 till the conclusion of the AGM to be held in the year 2017 subjectto ratification of their appointment at every AGM. The Board of Directors has sought forratification of appointment from the members of the Company.

26. STATUTORY AUDITORS' REPORT

The observation made by the Auditors are self - explanatory and do not require anyfurther clarifications. The Statutory Auditors have not reported any incident of fraud tothe Audit Committee of the Company in the year under review.

27. SECRETARIAL AUDIT

M/s. Grover Ahuja & Associates Practicing Company Secretary were appointed toconduct the secretarial audit of the Company for the Financial Year 2015-16 as requiredunder Section 204 of the Companies Act 2013 and rules made there under. The SecretarialAudit Report for the Financial Year 2015-16 forms part of the Annual Report as Annexure Bto the Board's Report. The Secretarial Audit Report does not contain any qualificationreservation or adverse remark.

28. SECRETARIAL AUDITORS' REPORT

The Secretarial Auditor remarks are self-explanatory and do not require anyclarification from the Board except the following:

Remark 1: The Company did not provide E-voting facility to its members for theExtra-Ordinary General Meeting held on 1st December 2015 which is requiredunder Section 108 of Companies Act 2013.

Board Clarification: The management inadvertently bypassed the required compliance. TheBoard assures that the Company will comply with all the rules and provisions of theCompanies Act 2013 in future.

Remark 2: The Company is not required to enter into Uniform Listing Agreement as theSecurities of the Company are Listed on Delhi Stock Exchange which has been derecognizedwith effect from 19 November 2014.

Board Clarification: As per SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 every listed entity need to enter into Uniform Listing Agreement withthe Recognized Stock Exchange on which shares of the Company are listed. However DelhiStock exchange has been derecognised w.e.f. 19 November 2014 due which Company is notable to execute and comply with the said requirement.

Remark 3: The Company has made delayed submission of periodic results for one quarteras required under Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.

Board Clarification: The management inadvertently bypassed the required compliance. TheBoard assures that the Company will comply with all the rules and provisions of theCompanies Act 2013 in future.

Remark 4: The Company has not obtained Statutory Auditors Certificate for FinancialYear 2014-15 and not complied with the Statutory Reserve & provisioning requirementsas required under para 15 of Non-Systemically Important Non-Banking Financial (Non-DepositAccepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2015.

Board Clarification: As there was no NBFI activity during the reporting period thecertificate as required under para 15 of Non-Systemically Important Non-Banking Financial(Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions2015 from statutory auditor was not obtained for the FY 2015-16. The Management isconcerned about the NBFC compliances in true letter and spirit and hereby ensures that itwill comply with the required provisions as and when required from time to time.

29. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of Annual Return in form MGT-9 as requiredunder Section 92 of the Companies Act 2013 is included in this report as Annexure C andforms integral part of this report.

30. REPORT UNDER THE PREVENTION OF SEXUAL HARASSMENT ACT 2013

The Board confirms that no complaints/ cases has been filed / pending with the Companyunder the Prevention of Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 during the financial year 2015-16.

31. DETAILS OF SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES

The Company does not have any subsidiaries associates and joint venture companies.Hence the disclosure of particulars with respect to information related to performanceand financial position of the Subsidiaries joint ventures or associate Companies subjectto rule 8(1) and 8(5)(iv) of Companies (Accounts) Rules 2014 is not applicable.

32. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The disclosures as per Rule 9 of Companies (Corporate Social Responsibility Policy)Rules 2014 is not applicable as Company is not covered under the criteria mentioned inSection 135(1) of Companies Act 2013.

33. CORPORATE GOVERNANCE

Disclosure related to corporate governance during the financial year under Regulations17 18 19 20 21 22 23 24 25 26 27 of the SEBI (Listing Regulations and DisclosureObligations Requirements) Regulations 2015 are not applicable to the Company.

34. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

In view of the nature of the activities carried out by the Company Section 134(3) (m)of the Companies Act 2013 read with the Companies (Accounts) Rules 2014 relating toconversation of energy and technology absorption are not applicable to the Company.During the year under review the Company had no earnings and expenditure in foreignexchange.

35. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 (3)(c ) of the Companies Act 2013 and subject to disclosuresin the Annual accounts your Directors' state as under:

a.) that in the preparation of the annual accounts for the year ended March 31 2016the applicable accounting standards have been followed along with proper explanationrelating to material departures;

b) that the directors have selected such accounting policies and applied themconsistently and made judgement and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year ended March 31 2016 and of the profit and loss of the Company for thatperiod;

c) that the directors have taken proper and sufficient care has been taken for themaintenance of

adequate accounting records in accordance with the provisions of the Companies Act2013 for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

d) that the directors have prepared the annual accounts on a going concern basis;

e) that the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively;

f) that the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws were in place and that such systems were adequate andoperating effectively.

36. ACKNOWLEDGMENT AND APPRECIATION

The Directors gratefully acknowledge all stakeholders of the Company viz. financialinstitutions Government Authorities customers members dealers vendors banks andother business partners for the excellent support received from them during the year. TheDirectors place on record their sincere appreciation to all employees executives staffand workers of the Company for their unstinted commitment and continued contribution tothe Company.

By the order of the Board
For Kalyani Commercials Limited
Sd/- Sd/-
Sourabh Agarwal Shankar Lal Agarwal
(Whole Time Director) (Managing Director)
DIN:02168346 DIN: 01341113
Address: AE-166 Address: AE-166 Shalimar Bagh
Shalimar Bagh New Delhi- 110088 New Delhi- 110088
Date: 08.08.2016
Place: New Delhi