The Board of Directors present the 38th Annual Report together with theAudited Statement of Accounts of Kalyani Forge Limited ("the Company")for the year ended March 312017.
The summarized standalone results of your Company are given in the table below.
| || ||Rs. in Lakhs |
|Particulars || |
Financial Year ended Standalone
| ||31/03/2017 ||31/03/2016 |
|Total income from operations (net) ||22684.00 ||23093.00 |
|Profit/(loss) before Interest Depreciation & Tax (EBITDA) ||1980.00 ||1816.00 |
|Finance Charges ||269.00 ||445.00 |
|Depreciation ||1041.00 ||1167.00 |
|Tax Expenses ||215.00 ||94.00 |
|Net Profit/(Loss) After Tax ||455.00 ||110.00 |
|Balance of Profit from Previous Year ||7747.00 ||7725.00 |
|Profit available for Appropriation ||8202.00 ||7835.00 |
|Less - Transfer to General Reserves ||- ||- |
|Less - Proposed Dividend on Equity Capital ||109.14 ||72.76 |
|Less - Tax on above Dividend ||22.22 ||14.81 |
|Surplus retained in Profit & Loss Account ||8070.64 ||7747.00 |
*previous year figures have been regrouped/rearranged wherever necessary.
Summary of Operations:
During the year the net revenue from operations of your Company decreased by Rs. 409Lakhs from Rs. 23093 Lakhs for the FY 15-16 to Rs. 22684 Lakhs for the FY 16-17. YourCompany's Profit after tax stood at Rs. 455 Lakhs as against profit of Rs. 110 Lakhs lastyear.
Change in the nature of business if any:
There is no change in the nature of the business of the Company during the year.
The Company has not transferred any amount to General Reserves for the year underreview.
Your Directors are pleased to recommend for approval of members a dividend of Rs.3.00per Equity Share (30%) at the face value of Rs 10/- each for the Year ended 31stMarch 2017 absorbing Rs. 131.36 Lakhs including Dividend Distribution Tax.
During the year the Company has not issued/allotted equity or preference shares. As on31st March 2017 the issued subscribed and paid up share capital of yourCompany is at Rs. 36380000/- comprising 36 38000 Equity shares of Rs.10/- each.
Your Company has not accepted any deposits from public. Therefore details relating todeposits covered under Chapter V of the Companies Act 2013 are not applicable to theCompany.
Extract 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 extract of annual return is Annexed as Annexure1.
Transfer of Amounts to Investor Education and Protection Fund:
Your Company has transferred funds lying unpaid or unclaimed for a period of sevenyears to Investor Education and Protection Fund (IEPF)
Pursuant to the provisions of the Investor Education Protection Fund (Uploading ofinformation regarding unpaid and unclaimed amounts lying with companies) Rules 2012 theCompany has already filed the necessary form and uploaded the details of unpaid andunclaimed amounts lying with the Company as on the date of last AGM (i.e. August 22016) with the Ministry of Corporate Affairs.
Details of Board meetings:
During the year five meetings of Board of Directors were held details of which aregiven below:
|Date of the Meeting ||No. of Directors attended the Meeting |
|April 16 2016 ||5 |
|May 27 2016 ||6 |
|August 3 2016 ||5 |
|November 112016 ||6 |
|January 312017 ||5 |
Committees of Board:
The composition of the Committees of the Board of Directors has been detailed in the"Corporate Governance Report" annexed to this report.
Declaration by Independent directors:
Mr. Pradeep Nadkarni Mr. Abhijit Sen & Mr. Vishwas Chitrao are IndependentDirectors on the Board of your Company. In the opinion of the Board and as confirmed bythese Directors they fulfil the conditions specified in section 149 of the Companies Act2013 and the Rules made thereunder regarding their status as Independent Directors of theCompany.
Directors and Key Managerial Personnel:
Mrs. Rohini G. Kalyani Director retires by rotation at the forthcoming Annual GeneralMeeting and being eligible offers herself for re-appointment.
Mr. Abhijit Sen was appointed as an additional Independent Director on February 022016 subsequently his appointment was regularised as an Independent Director in theAnnual General Meeting held on 2nd August 2016 for the term of five years.
Mr. Vishwas Chitrao was appointed as an additional Independent Director on April 162016 subsequently subsequently his appointment was regularised as an Independent Directorin the Annual General Meeting held on 2nd August 2016 for the term of fiveyears
Mr. Ravi Dugar resigned from the post of Company Secretary effective from September 232016 and Mr. Chandranil Belvalkar was appointed on October 26 2016 as Company Secretaryand Compliance Officer.
Formal Annual Evaluation:
SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 mandatesthat the Board shall monitor and review the Board evaluation framework. Also theCompanies Act 2013 states that a formal annual evaluation needs to be made by the Boardof its own performance and that of its Committees and individual Directors. In additionSchedule IV to the Companies Act 2013 states that the performance evaluation ofIndependent Directors shall be done by the entire Board of Directors excluding theDirector being evaluated.
In pursuance of above the Company has devised a policy for performance evaluation ofIndependent Directors Board Committees and other individual Directors which includescriteria for performance evaluation of the NonExecutive Directors and Executive Directors.
The Company commenced with the review of the best practices prevalent in the industryand evaluation of Board members. On the basis of review and the policy for performanceevaluation of Independent Directors Board Committees and other individual Directors aprocess of evaluation was followed by the Board for its own performance and that of itsCommittees and individual Directors.
At a Separate meeting of Independent Directors held on 31st March 2017performance evaluation of Chairperson Non- Independent Directors and the Board ofDirectors was carried out by Independent Directors which has also reviewed the adequacy ofthe flow of information between the Company Management and Board .
The detailed programme for familiarisation of Independent Directors with the Companytheir roles rights and responsibilities in the Company nature of business AOP businessmodel of the Company etc. was undertaken by the Company.
Company's policy on appointment and remuneration:
The policies relating to selection of Directors and determining Directors independenceand Remuneration Policy for Directors Key Managerial Personnel and other employees isattached herewith enclosed as Annexure 2.
Highlights on Company's policy on Sexual Harassment:
As per "SEXUAL HARASSMENT OF WOMAN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013" the highlights of the policy adopted by the company isenclosed herewith as Annexure 3.
Holding and Subsidiaries:
During the period under review the Company does not have any holding or subsidiarycompany.
Statutory Auditors their Report and Notes to Financial Statements:
The Company in its Annual General Meeting held on August 2 2016 appointed M/s K.S.Aiyar & Co. Chartered Accountants as Statutory Auditor of the Company for a period offive years with effect from the conclusion of 37th Annual General Meeting ofthe Company held on August 2 2016.
Pursuant to the provisions of Section 139 of the Companies Act 2013 read with Rule3(7) of the Companies (Audit and Auditors) Rules 2014 the appointment of StatutoryAuditors shall be placed for ratification at every Annual General Meeting.
Accordingly a letter is received from M/s K.S. Aiyar & Co. Chartered Accountantsconfirming that appointment if made shall be as per eligibility required under Section 141of the Companies Act 2013 read with the Companies (Audit and Auditors) Rules 2014.
Your Directors seek ratification from the members for the appointment of M/s K.S. Aiyar& Co. Chartered Accountants as the Statutory Auditors of your Company from theconclusion of the ensuing Annual General Meeting till the conclusion of the 39thAnnual General Meeting of the Company.
Internal financial controls:
The internal financial controls with reference to the Financial Statements arecommensurate with the size and nature of business of the Company.
As per the Cost Audit Order Cost Audit is applicable to the Company's forging businessfor the FY 2017-18.
In view of the same and in terms of the provisions of Section 148 and all otherapplicable provisions of the Companies Act 2013 read with the Companies (Audit andAuditors) Rules 2014 M/s. R. A Chincholkar & Co Cost Accountants have beenappointed as Cost Auditors to conduct the audit of cost records of your company for thefinancial year 2017-18. The resolution for remuneration proposed to be paid to themrequires ratification of the shareholders of the Company. In view of this yourratification for payment of remuneration to Cost Auditors is being sought at the ensuingAnnual General Meeting.
In terms of Section 204 of the Companies Act 2013 and Rules made thereunder M/s HR& Associates Practising Company Secretaries have been appointed Secretarial Auditorsof the Company. The report of the Secretarial Auditors is enclosed as Annexure 4 tothis report. The Directors have noted the qualifications in Secretarial Audit Report. Asthere was frequent attrition in the officers/employees of the Company due to whichCompliance mechanism was disturbed however necessary steps have been taken to ensure therequired compliances.
Your Company treats its "human resources" as one of its most importantassets. Your Company continuously invests in attraction retention and development oftalent on an ongoing basis. A number of programs that provide focused people attention arecurrently underway. Your Company's thrust is on the promotion of talent internally throughjob rotation and job enlargement.
Related Party Transactions:
All contracts/ arrangement/ transactions entered by the Company during the FinancialYear with related party were in the ordinary course of business and on arm's length basis.Such transaction forms part of the notes to the financial statements provided in theAnnual Report.
During the year the Company had not entered into any contract/arrangement/transactionwith related parties which could be considered material in accordance with the policy ofthe Company on materiality of related party transactions which is available on theCompany's Website: www.kalyaniforge.co.in.
The summary of related party transaction is enclosed as Annexure 5.
Risk Management Policy:
In terms of the requirement of the Companies Act 2013 the Company has developed andimplemented the Risk Management Policy and the Audit Committee of the Board reviews thesame periodically. The detailed Risk Management Policy is available on Company's website.Highlights of the same are enclosed as Annexure 6.
Particulars of Loans Guarantees or investments under section 186 :
During the year under review the Company has not given any loan or guarantee or madeinvestments covered under section 186 of the Companies Act 2013
Management Discussion and Analysis:
Management Discussion and Analysis comprising an overview of the financial resultsoperations/performance and the future prospects of the Company form part of this AnnualReport.
Corporate Social Responsibility (CSR):
The Company has adopted the CSR policy pursuant to Sec 135 of the Companies Act 2013.The disclosures as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules2014 is enclosed as Annexure 7.
Highlights of Corporate Social Responsibility Policy:
The Company proposes to undertake CSR projects and programmes in respect of theactivities stated below with a preference to implement these projects and programme in theareas in which it operates:
- Eradicating hunger poverty and malnutrition promoting health care includingpreventive health care and sanitation and making available safe drinking water;
- Promoting education including special education and employment enhancing vocationskills especially among children women elderly and the differently abled and livelihoodenhancement projects.
- Promoting gender equality empowering women setting-up homes and hostels for womenand orphans; setting up old age homes day care centres and such other facilities forsenior citizens and measures for reducing inequalities faced by socially and economicallybackward groups.
- Ensuring environmental sustainability ecological balance protection of flora andfauna animal welfare agroforestry conservation of natural resources and maintainingquality of soil air and water.
- Protection of national heritage art and culture including restoration of buildingsand sites historical importance and works of art; setting-up public libraries promotionand development of traditional arts and handicrafts.
- Measures for the benefit of armed forces veterans war widows and their dependents.
- Training to promote rural sports nationally recognised sports Paralympics Sportsand Olympic Sports.
- Contribution to the Prime Minister's National Relief Fund or any other fund set up bythe Central Government or the State Governments for socio-economic development and reliefand funds for the welfare of the Scheduled Castes the Scheduled Tribes other backwardclasses minorities and women.
- Contributions or funds provided to technology incubators located within academicinstitutions which are approved by the Central Government.
- Rural development Projects.
Particulars of Employees:
Pursuant to the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 statement of particulars of employees is annexed as Annexure 8.
Details of establishment of vigil mechanism for directors and employees:
The details of establishment of vigil mechanism for directors and employees to reportgenuine concerns are to be disclosed.
Highlights of Whistle Blower Policy are enclosed as an Annexure 9.
Corporate Governance Certificate:
The Compliance certificate from the Auditors regarding compliance of conditions ofcorporate governance as stipulated in SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is annexed with the report.
Details of conservation of energy technology absorption foreign exchange earnings andoutgo
(a) Conservation of energy
|(i) the steps taken or impact on conservation of energy ||The Company in its continuous endeavor to conserve energy has adopted various innovative measures to |
|(ii) the steps taken by the company for utilizing alternate sources of energy ||reduce waste and to achieve optimum utilization of energy resulting into good earning of Power Factor incentive from MSEB and in turn resulting into reduction of power cost. |
|(iii) the capital investment on energy conservation equipments ||- |
|(b) Technology absorption || |
|(i) the efforts made towards technology absorption ||- |
|(ii) the benefits derived like product improvement cost reduction product development or import substitution || Productivity improvement in both forged and machined components together with competitive quality. |
| || Process technology improvements to achieve competitive advantage in the business. |
| || Successful commercial scale up of forged and machined parts. |
| || Capability building for attracting new customers. |
|(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)- || |
|(a) the details of technology imported || |
|(b) the year of import; ||- |
|(c) whether the technology been fully absorbed || |
|(d) if not fully absorbed areas where absorption has not taken place and the reasons thereof || |
|(iv) the expenditure incurred on Research and Development ||Expenditure amount Rs. 584.81 Lakhs |
Total energy consumption and energy consumption per unit of production is as givenbelow:
|Sr. No. ||Description ||2016-17 ||2015-16 ||2014-15 |
|1) ||POWER AND FUEL CONSUMPTION || || || |
|I) ||Electricity || || || |
| ||a) Purchased Units (KWH) ||24187484 ||23749492 ||21390241 |
| ||Total Amount (In. Rs) ||200082381 ||179534612 ||153315307 |
| ||Rate/Unit (Rs) ||8.27 ||7.55 ||7.17 |
| ||b) Own Generation || || || |
| ||i) Through Diesel Generator ||106840 ||100409 ||100409 |
| ||ii) Through Steam Generator (KWH) ||0 ||0 ||0 |
|II) ||Coal ||0 ||0 ||0 |
|III) ||Fuel Oil (FO + CBFS) || || || |
| ||Quantity (Ltrs.) ||1174005 ||1054730 ||971605 |
| ||Total Amount ( In Rs.) ||36069000 ||27822080 ||51979209 |
| ||Average Rate /Litre (Rs.)- FO+CBFS ||30.72 ||26.70 ||40.07 |
|2) ||CONSUMPTION PER UNIT OF PRODUCTION || || || |
| ||Product : high quality closed tolerance die forgings || || || |
| ||Unit : M.T. ||15566 ||15526 ||15159 |
| ||Electricity (KWH) ||1560 ||1518.2 ||1141.05 |
| ||Fuel Oil (KL/TON) ||0.075 ||0.07 ||0.08 |
| ||Coal ||NIL ||NIL ||NIL |
(c) Research & Development (R&D):
I) Specific Areas of Research & Development:
Development of new products both in the area of Forging as well as Machined componentsfor Domestic & Export.
1) During the year 2016-17 Company made significant achievements in the area ofproduct Development. The Company developed variety of products as per the specificrequirements of the customers such as Machined Inner and Outer Hubs Machined Arm FrontSuspension LH and RH Inner and Outer Chain Links Machined Male and Female Tulips FlangeShafts Machined Pulley 5 Grooves Fracture Connecting Rod Assembly Flanges MachinedNozzle Rings etc.
2) Introduced and established Induction Hardening technology for Inner and outer Hubs.
3) Die Locks introduced for Warm and hot forging components to reduce die setup timeand to improve forging quality.
4) Introduced W303 Die material for Tulip Warm Forging Dies to improve die life - byVAVE Approach.
On the above said research & development activity the Company has spent Rs. 584.81Lakhs during the year.
II) Future Plan of Action:
1) Research & Development in Single Minute Exchange of Dies (SMED) project.
2) Focused development of variety of Warm and Cold forging and machined premiumcomponents.
3) Planning to commence activities in bigger size forgings.
4) W360 Die Material Selection for Increasing the Life of small Con Rod Forging Dies -by VAVE Approach.
5) Research & Development on die weld over lays for increasing die life of complexprofile parts.
6) Optimization of input material to improve maximum forging yield ratio.
7) Introduce Spline rolling technology for Tulips.
The Company has budgeted Rs. 600 Lakhs for the above activity during the next financialyear.
(d) Foreign exchange earnings and Outgo:
During the year the total foreign exchange used was Rs. 1215 Lakhs and the totalforeign exchange earned was Rs. 1979 Lakhs
(e) Technology Absorption Adaptation and Innovation:
Through In-house Research and Development activities Company has developed Outer raceforgings for Driveline assemblies with internal tracks by Warm and cold forging method.With the help of fracture split technology the Company is now moving towards adoption oftechnology for critical automotive connecting rods for the overseas markets.
Directors' Responsibility Statement
Pursuant to the requirement clause (c) of sub-section (3) of Section 134 of theCompanies Act 2013 your Directors confirm that:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis; and
(e) 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) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Your Directors place on record their appreciation for employees at all levels who havecontributed to the growth and performance of your Company.
Your Directors also thank the clients vendors bankers shareholders and advisers ofthe Company for their continued support. Your Directors also thank the Central and StateGovernments and other statutory authorities for their continued support.
| ||For and on behalf of the Board |
| ||Rohini G. Kalyani |
|Place : Pune ||Chairperson & Managing Director |
|Date : 23/05/2017 ||(DIN : 00519565) |