Directors' Report for Financial Year 2016-17
To The Members
The Directors have pleasure in presenting this Annual Report with the Audited AnnualAccounts of the Company for the year ended 31 March 2017.
|I. FINANCIAL PERFORMANCE (STANDALONE): || || |
| || ||(Rs. in Lakhs) |
|Particulars ||2016-17 ||2015-16 |
|Total Income ||4796.60 ||7669.93 |
|Total Expenditure ||1050.27 ||832.11 |
|Profit before exceptional items and taxation ||3746.33 ||6837.82 |
|Profit before taxation ||3746.33 ||6837.82 |
|Provision for tax (including Deferred Tax) ||863.92 ||812.81 |
|Net Profit ||2882.41 ||6025.01 |
|Balance of Profit / (Loss) from previous year ||39867.24 ||36000.59 |
|Surplus available for appropriation ||42749.65 ||42025.60 |
|APPROPRIATIONS: || || |
|Your Directors propose to appropriate the available surplus as follows: || || |
|Particulars || || |
|Interim Dividend ||Nil ||1941.73 |
|Taxon Interim Dividend ||Nil ||216.63 |
|Balance carried to Balance Sheet ||42749.65 ||39867.24 |
Your Directors recommend 200% dividend i.e. f 20 per equity share of f 10 each(Previous year interim dividend 200% i.e. f 20 per equity share of Rs. 10 each) for theFinancial Year ended 31 March 2017.
III. CLASSIFICATION OFTHECOMPANYASACORE INVESTMENT COMPANY (CIC):
The Company is classified as a Core Investment Company (CIC) and exempt fromregistration with the Reserve Bank of India (RBI).
IV. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
A. OPERATIONS OF THE COMPANY:
The Company has seven windmills in Maharashtra with total installed capacity of 5.6Megawatt (MW). The windmills are located at Tirade Village Tal. Akole Dist. Ahmednagar.The windmills have generated net wind energy of 49.05 Lakh units of electricity in theyear under review as against 89.93 Lakh units of electricity in the previous year showingdecrease of 54% over the previous year.
During the year under review generation of units from the windmills has gone down dueto various reasons viz. major break down of one Wind Energy Generator (WEGs) during theperiod of 7 months non-availability of timely maintenance due to internal issues of WindWorld India Limited (WWIL) service providers unfavorable weather conditions andagitation by local people against operation of windmills.
The Company is required to apply for Open Access Permission to Maharashtra StateElectricity Distribution Company Limited (MSEDCL) every Financial Year. Currently theCompany has the necessary Open Access Permission and is selling the wind power unitsgenerated to a third party consumer.
All the seven windmills are registered with the National Load Despatch Centre (NLDC)andare eligible for the Renewable Energy Certificates (RECs). During the year the Companyhas sold 5120 RECs as against 3243 RECs in the previous year. This has resulted inrevenue of Rs. 77 Lakhs (previous year Rs. 49 Lakhs) during the year. The Company ishaving 10537 RECs units as on 31 March 2017 (previous year 9593 units).
The Company owns lands and buildings thereon and apartments and offices in PuneBangalore New Delhi and Jaipur. The Company has granted most of these lands and buildingsand offices on leave and license basis to group and other companies.
During the year under review your Company made investments of Rs. 26.48 Lakhs inequity shares of Kirloskar Ferrous Industries Limited (KFIL). Pursuant to the saidinvestment the Company's holding in KFIL has increased to 51.45% as on 31 March 2017from 51.43% as on 31 March 2016. During the year under review the Company has investedRs. 1 Lakh in S.L. KirloskarCSRFoundation.The Company has thereafter transferred 200equity shares of Rs. 10 each in the share capital of S.L. Kirloskar CSR Foundation. As aresult the holding of the Company in S.L. Kirloskar CSR Foundation is reduced to 19.60%from 20% as on 31 March 2017.
B. COMPANY PERFORMANCE:
During the year under review your Company earned an income of Rs. 4797 Lakhs(previous year Rs. 7670 Lakhs). The fall in income in the year under review is on accountof most of the companies in which your Company holds shares have not declared anydividend in the year under review. In the previous year these companies had declareddividend twice.
In the year under review the Company received dividend of Rs. 713 Lakhs declared bythe investee companies for the Financial Year2016-17.
The Profit Before Tax is at Rs. 3746 Lakhs (previous year Rs. 6838 Lakhs) afterproviding for depreciation of Rs. 100 Lakhs (previous year Rs. 89 Lakhs).
C. HUMAN RESOURCES:
As on 31 March 2017 the Company has 8 employees on its roll including the ExecutiveDirector.
D. EMPLOYEE STOCK OPTION PLAN:
Human resource is the key resource for the continuous growth and development of acompany. The Company strongly believes that an equity component in the compensation goes along way in aligning the objectives of an individual with those of the organisation.
To enable the employees present and future to share the wealth that they help tocreate for the organisation over a certain period of time the Board of Directors in itsmeeting held on 4 July 2017 considered and approved to introduce and implement"Kirloskar Industries Limited - Employee Stock Option Plan 2017" (KILESOP2017)in accordance with the provisions of the Securities and Exchange Board of India (ShareBased Employee Benefits) Regulations 2014 (SEBISBEB Regulations) subject to theapproval of the members.
Details of the proposal for the KIL ESOP 2017 are mentioned in the Statement settingout material facts annexed to the Notice of the ensuing Annual General Meeting.
E. CONCERNS AND THREATS:
Following are the identified risk/ concerns and threats for the operations of theCompany:
Natural calamities like cyclones earthquake and fire or act of God damage thewindmills.
Agitation by the local people against the operation of windmills.
Frequent and erratic changes in the Open Access Rules and Regulations andadministrative delay in issuing Open Access Permission.
Underutilisation by customer of units generated specially due to non-working invarious Time Zones.
Major maintenance due to failure of important components of the windmills.
Disturbances and failure in the Maharashtra State Electricity DistributionCompany Limited (MSEDCL) grid.
Non-availability of timely maintenance by service provider adversely affectingthe operations of the windmills.
Wind energy generation is largely dependent on natural factors such as velocity ofwind continuity of the flow etc. and are unpredictable and beyond control. The businessis also largely impacted adversely by frequent and erratic changes made by the MSEDCL inthe open access policies.
The market for Renewable Energy Certificates (RECs) continues to be sluggish; thistrend is expected to continue in the current Financial Year. Consequently there is a riskof RECs getting lapsed. Further the Central Electricity Regulatory Commission vide itsorder dated 30 March 2017 reduced the realisable rate of RECs from f 1500/unit to f1000/unit. Considering the same the Company is evaluating the proposal of selling greenenergy i.e. without availing RECs benefits.
G. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has adequate internal control systems to ensure operational efficiencyaccuracy and promptness in financial reporting and compliance ofvarious laws andregulations.
The internal control system is supported by the internal audit process. An InternalAuditor has been appointed for this purpose. The Audit Committee of the Board reviews theInternal Audit Report and the adequacy and effectiveness of internal controlsperiodically.
H. CAUTIONARY STATEMENT:
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 laws andregulations. Actual results may differ materially from those either expressed orimplied.
I. SEBI REGULATIONS AND LISTING FEES:
The annual listing fees for the year under review have been paid to BSE Limited andNational Stock Exchange of India Limited where your Company's shares are listed.
J. SUBSIDIARY COMPANY AND CONSOLIDATED FINANCIAL STATEMENTS:
As on 31 March 2017 the Company has one subsidiary i.e. Kirloskar Ferrous IndustriesLimited (KFIL).
The Board presents Audited Consolidated Financial Statements incorporating the dulyAudited Financial Statements of KFIL and as prepared in compliance with the Company'sAccounting Standard 21 as per the Company's (Accounting Standards) Amendment Rules 2016notified by the Ministry of Corporate Affairs (MCA) and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (the Regulations).
Pursuant to Rule 5 of the Companies (Accounts) Rules 2014 the Statement containingthe salient feature of the Financial Statement of a Company's subsidiary and associatecompanies under the first proviso to Sub-section (3) of Section 129 of the Companies Act2013 (the Act) in Form AOC - 1 is required to be enclosed to the Financial Statements.
The Consolidated Financial Statements prepared as per the applicable provisions andduly audited by the Statutory Auditors are presented elsewhere in this Annual Reportalong with Form AOC-1.
Further the Company undertakes that the Annual Accounts of the Subsidiary Company andthe related detailed information shall be made available to the shareholders on demand atany point of time. The Annual Accounts of the Subsidiary Company shall also be kept openfor inspection by any shareholder at the Registered Office of the Company.
BRIEF HIGHLIGHTS OF BUSINESSES OF SUBSIDIARY COMPANY:
KIRLOSKAR FERROUS INDUSTRIES LIMITED (KFIL):
KFIL is in the business of manufacturing of iron castings and has its manufacturingfacilities at Bevinahalli Village in Karnataka and Solapurin Maharashtra.
The Board of Directors of KFIL has recommended a dividend of Rs. 1.75 (35%) per equityshare (Previous year interim dividend 25% i.e. Rs. 1.25 per equity share of Rs. 5 each)for the Financial Year ended 31 March 2017.
KFILachieved net sales of Rs. 113370 Lakhs (previous year Rs. 111390 Lakhs).
Profit Before Tax (PBT) for the year under review stood at Rs. 12146 Lakhs ascompared to Rs. 8522 Lakhs of previous year. Also Profit After Tax (PAT) for the yearunder review stood at Rs. 9057 Lakhs as compared to Rs. 5773 Lakhs of the previousyear.
KFIL sold 253495 MT of Pig Iron valued at Rs. 58891 Lakhs during the Financial Year2016-17 as compared to 289485 MT of Pig Iron valued at Rs. 62312 Lakhs in the previousyear.
KFILsold 65892 MT castings aggregating to Rs. 51912 Lakhs during Financial Year2016-17 as compared to 56661 MT castings aggregating to Rs. 46067 Lakhs in the previousyear.
KFIL participated in the auction of mines but the mines have been won by othercompanies a price which was not economical to KFIL.
Government has informed that the Financial Year 2017-18 would bean important year forthe mining industry as there are around 300 mineral blocks to be leased (of whichKarnataka alone has about 100 odd leases). These mines would be auctioned in differentstates during the Financial Year 2017-18. KFIL will pursue in its efforts to acquire ironore mines from the e-auction.
Iron ore mining is slowly opening up and presently 29 mines have been allowed formining 33 million tons per annum. As demand is higher than the actual mining iron oreprices in Hospet sector are still higher.
During the year under review KFIL repaid entire outstanding amount of long term loans.Also KFIL has been able to reduce considerably the financing cost of working capitalfacilities by availing facilities at a very competitive rate.
KFIL has undertaken the following projects during the year under review:
1) Commenced the civil work for machine shop at Koppal Plant and is expected to becompleted in first half of Financial Year 2017-18. Simultaneously KFIL is working ongetting the orders for machined castings from its customers and also on procuring machinesfor machining of castings. Machine shop will be commissioned progressively in a phasedmanner based on the order position. The completion of machine shop will facilitate anincrease in business by bringing more value added items for KFIL.
2) Installation of fettling facilities for superior casting finish at Solapur Plant.
3) Upgradation of Mini Blast Furnace I resulting in lower coke consumption andincreasing the production capacity of pig iron.
4) Commenced Railway siding project and the civil work has been completed. The projectis expected to be completed in Financial Year 2017-18. Completion of this project willfacilitate inward movement of raw materials and outward movement of pig iron resulting inreduction in cost of transportation and handling losses.
V. PARTICULARS OF INFORMATION FORMING PART OF THE BOARDS' REPORT PURSUANT TO SECTION134
OF 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:
1. EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in Form MGT-9 are annexedas 'Annexure I'to this Report.
During the year under review six Board Meetings were convened and held the details ofwhich form part of Report on Corporate Governance. The intervening gap between theMeetings was within the period prescribed underthe Companies Act 2013.
3. DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to provisions of Section 134 (5) of the Companies Act 2013 in respect ofDirectors' Responsibility Statement your Directors state that:
a) in the preparation of the Annual Financial Statements for the year ended 31 March2017 the applicable accounting standards had been followed and there were no materialdepartures;
b) accounting policies as mentioned in Note 2 of the Notes forming part of theFinancial Statements have been selected and applied consistently. Further judgments andestimates have been made that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company asat31 March 2017 and of the Profit of theCompany for the year ended 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.
4. ASTATEMENT ON DECLARATION GIVEN BYTHE 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 Regulation16 (1)(b)ofthe Regulations.
5. COMPANY'S POLICY ON DIRECTORS'APPOINTMENT AND REMUNERATION:
The Board has on the recommendation of the Nomination and Remuneration Committeeadopted a policy for selection and appointment of Directors Key Managerial Personnel(KMP) and Senior Management Personnel and their remuneration. The Nomination andRemuneration Policy is annexed as 'Annexure II' to this Report.
a. Statutory Auditors:
G. D. Apte & Co. Chartered Accountants (Firm Registration Number 100515W) Punehave been reappointed as the Statutory Auditors of the Company to hold the office forasecond term of five years from the conclusion of the Annual General Meeting (AGM) held on11 August 2016 till the conclusion of the AGM of the Company to be held in the year2021 subject to the ratification of the appointment by the members at every AGM.
The requisite eligibility certificate as per Sections 139 and 141 of the Companies Act2013 has been received by the Company.
b. Cost Auditors:
Pursuant to the Companies (Cost Records and Audit) Rules 2014 dated 31 December 2014the Company was neither required to maintain cost records relating to Electricity Industry(Windmills) for the Financial Year 2016-17 in Form (CRA-1) nor was it required to get therecords audited.
c. Secretarial Auditors:
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 hadappointed Mr. Mahesh J. Risbud Practicing Company Secretary (FCS 810 CP 185) to undertakethe Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed as 'AnnexureIII' to this Report.
7. EXPLANATION OR COMMENTS OF STATUTORY AUDITORS AND SECRETARIALAUDITORS:
There are no qualifications reservations or adverse remarks of G. D. Apte & Co.Statutory Auditors in their Audit Report and of Mr. Mahesh J. Risbud Practicing CompanySecretary in his Secretarial Audit Report for the year ended 31 March 2017.
8. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIESACT 2013:
Your Company has not granted any loan or guarantee.
During the year under review the Company has invested f 1 Lakh in S.L. Kirloskar CSRFoundation. The Company has thereafter transferred 200 equity shares of Rs. 10 each in theshare capital of S.L. Kirloskar CSR Foundation. As a result the holding of the Company inS.L. Kirloskar CSR Foundation is reduced to 19.60% from 20% as on 31 March 2017.
During the year under review your Company made investments of Rs. 26.48 Lakhs inequity shares of Kirloskar Ferrous Industries Limited (KFIL).
9. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO INSUB-SECTION (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 all contracts orarrangements entered into by the Company with Related Parties have been done at arm'slength and are in the ordinary course of business. Hence no particulars are beingprovided in Form AOC-2. Related Party disclosures as per the Accounting Standard 18 havebeen provided in Note 33 to the Financial Statements.
10. STATE OF COMPANY'S AFFAIRS:
Discussion on state of Company's affairs has been covered in the Management Discussionand Analysis Report.
11. 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.
12. MATERIAL CHANGES AND COMMITMENTS BETWEEN THE DATE OF THE BALANCE SHEET AND THE DATEOF REPORT:
There have been no material changes and commitments affecting the financial positionof the Company which have occurred between the end of the Financial Year of the Company towhich the Financial Statements relate and the date of this Report.
13. 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 andtechnology absorption as required under Section 134 (3) (m) of the Companies Act 2013read with Rules thereunder.
B. Foreign exchange earnings and outgo: NIL
14. 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.
15. CORPORATE SOCIAL RESPONSIBILITY:
The Company has constituted a Corporate Social Responsibility (CSR) Committee inaccordance with Section 135 of the Companies Act 2013. The details about CSR Policy andinitiatives taken by the Company during the year is annexed as 'Annexure IV' tothis Report.
16. BOARD EVALUATION:
Pursuant to the provisions of the Companies Act 2013 and Regulation 17 (10) of theRegulations the Board has carried out performance evaluation of its own performance andthat of its committees and individual Directors.
17. PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES ASSOCIATES ANDJOINT VENTURE COMPANIES:
|Name and Registered Office of the Subsidiary Company ||% Holding ||Particulars ||Amount ( Rs. in Lakhs) |
|Kirloskar Ferrous Industries ||51.45 ||Total Income ||113926 |
|Limited 13 Laxmanrao Kirloskar Road Khadki Pune411 003 || ||Total Expenditure ||100414 |
| || ||Profit before exceptional items and taxation ||12146 |
| || ||Profit before taxation ||12146 |
| || ||Provision for tax (including Deferred Tax) ||3089 |
| || ||Net Profit ||9057 |
| || ||Balance of Profit / (Loss) from previous year ||18954 |
| || ||Less: Interim Dividend ||- |
| || ||Less: Dividend Distribution Tax on Interim Dividend ||- |
| || ||Less: Transfer to General Reserve ||500 |
| || ||Balance carried to Balance Sheet ||27511 |
|Name and Registered Office of the Associate Company ||% Holding ||Particulars ||Amount ( Rs. in Lakhs) |
|# Kirloskar Brothers Limited ||23.91 ||Total Income ||184128 |
|Udyog Bhavan Tilak Road Pune 411 030 || ||Total Expenditure ||178799 |
| || ||Profit before exceptional items finance cost and taxation ||5329 |
| || ||Finance Cost ||... |
| || ||Profit before taxation ||5329 |
| || ||Provision for tax (including Deferred Tax) ||2029 |
| || ||Net Profit ||3300 |
| || ||Other Comprehensive Income ||(114.50) |
| || ||Balance of Profit / (Loss) from previous year ||16966 |
| || ||Less: Interim Dividend ||... |
| || ||Less : Dividend Distribution Tax || |
| || ||Balance carried to Balance Sheet ||20151 |
# The Company does not have significant influence on Kirloskar Brothers Limited (KBL)as it does not participate in the management and / or financial decisions of KBL. As suchKBL is not an Associate Company of the Company under the Accounting Standard 18 and assuch its financials are not included in the Consolidated Financial Statements of theCompany. Hence the aforesaid information is obtained from the Annual Report of KBL forthe financial year ended 31 March 2017 uploaded on the website of KBL.
|Name and Registered Office of the Associate Company ||## Kothrud Power Equipment Limited 13/A Karve Road Kothrud Pune 411 038 |
|% Holding ||50 |
Note: The Consolidated Financial Statements do not include the financials ofKothrud Power Equipment Limited. Refer Note 32 of the Consolidated Financial Statements ofthe Company for the Financial Year 2016-17. In view of this the financial information asrequired hereinabove is not given.
## Kothrud Power Equipment Limited has been struck off from the Register of Companiesand consequently ceased to be an Associate Company with effect from 20 January 2017.
18. CHANGE IN THE NATURE OF BUSINESS IF ANY:
During the Financial Year under review there has been no change in the nature ofbusiness.
19. DETAILS OF APPOINTMENT AND RESIGNATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Directors appointed / re-appointed during the year
|Name of Director ||Designation ||Terms of appointment |
|Mahesh Chhabria* ||Independent Director** ||Five consecutive years commencing from 11 August 2016 up to 10 August 2021. |
|Sunil Shah Singh ||Additional Independent Director ||Co-opted as an Additional Independent Director w.e.f. 19October2016. |
|AnilAlawani*** ||Director ||Re-appointed with effect from 11 August 2016 subject to retirement by rotation. |
|Aditi Chirmule ||Executive Director ||The Board of Directors in its meeting held on 18 January 2017 re-appointed Ms. Aditi Chirmule as the Executive Director of the Company for a period of 5 years with effect from 25 January 2017 subject to the approval of the members in the ensuing Annual General Meeting. Details of the proposal for re-appointment of Ms. Aditi Chirmule are mentioned in the Statement setting out material facts annexed to the Notice of the ensuing Annual General Meeting. |
* Mr. Mahesh Chhabria was co-opted as an Additional Independent Director with effectfrom 24 May 2016 and appointed in the Annual General Meeting held on 11 August 2016.
** The Board of Directors of the Company in its meeting held on 4 July 2017 appointedMr. Mahesh Chhabria as the Managing Director of the Company for a term of five (5) yearswith effect from 4 July 2017.
*** Mr. AnilAlawani retired by rotation and was re-appointed in the Annual GeneralMeeting held on 11 August 2016.
Key Managerial Personnel (KMP) appointed during the year
During the year under review Ms. Aditi Chirmule Executive Director of the Companyhas been re-appointed as Key Managerial Personnel of the Company.
20. DIRECTORS AND KEY MANAGERIAL PERSONNEL RESIGNED DURINGTHE YEAR2016-17:
During the year under review Mr. Shrikrishna Inamdarand Mrs. Priyamvada RanadeIndependent Directors of the Company tendered their resignations from the office ofDirector of the Company with effect from 8 June 2016 and 15 February 2017 respectively.
Mr. Vijay Bajhal completed his term on 1 September 2016 and consequently ceased to bea Director of the Company with effect from 2 September 2016.
The Company expresses its appreciation for the assistance and guidance provided bythese Directors during their tenure as Directors of the Company.
21. DIRECTORS PROPOSED TO BE APPOINTED / RE-APPOINTED AT THE ENSUING ANNUAL GENERALMEETING:
Mr. Atul Kirloskar who retires by rotation at the ensuing Annual General Meeting andbeing eligible offers himself for re-appointment.
The Board of Directors of the Company in its meeting held on 4 July 2017appointed Mr. Mahesh Chhabria as the Managing Director of the Company for a term of five(5) years with effect from 4 July 2017. Consequently he ceased to bean IndependentDirector of the Company. A proposal for his appointment as the Managing Director andremuneration payable to him is being placed before the members for their approval at theensuing Annual General Meeting.
The Board of Directors of the Company in its meeting held on 18 January 2017 hasre-appointed Ms. Aditi Chirmule as the Executive Director of the Company fora furtherperiod of five (5) consecutive years with effect from 25 January 2017. A proposal for herre-appointment as the Executive Director and remuneration payable to her is being placedbefore the members for their approval at the ensuing Annual General Meeting.
In accordance with the provisions of Section 161 of the Companies Act 2013 read withthe Articles of Association of the Company the Board of Directors of the Company in itsmeeting held on 19 October 2016 and 11 May 2017 co-opted Mr. Sunil Shah Singh and Mr. D.Sivanandhan respectively as Additional Independent Directors as recommended by theNomination and Remuneration Committee. Further the Board of Directors of the Company inits meeting held on 4 July 2017 co-opted Mr. Vinesh Kumar Jairath and Mr. Ashit Parekhas Additional Independent Directors as recommended by the Nomination and RemunerationCommittee.
These newly co-opted Directors hold office up to the date of the ensuing Annual GeneralMeeting of the Company. The Company has received requisite notices under Section 160 ofthe Companies Act 2013 in writing from a member signifying their intention to proposeMr. Sunil Shah Singh Mr. D. Sivanandhan Mr. Vinesh Kumar Jairath and Mr. Ashit Parekh ascandidates for the office of Directors at the ensuing Annual General Meeting. All of themare eligible for appointment.
The Company has also received the requisite disclosure / declaration from Mr. SunilShah Singh Mr. D. Sivanandhan Mr. Vinesh Kumar Jairath and Mr. Ashit Parekh underSection 149 and other applicable provisions of the Companies Act 2013.
The brief resumes and other details relating to the Directors who are proposed to beappointed / re-appointed as required to be disclosed under Regulation 36 (3) of theRegulations forms part of the Statement setting out material facts annexed to the Noticeof the Annual General Meeting.
The resolutions seeking approval of members for the appointment of these Directors havebeen incorporated in the notice of the forthcoming Annual General Meeting of the Company.
22. NAMES OF THE COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINTVENTURES ORASSOCIATE COMPANIES DURING THE YEAR:
During the year under review Kothrud Power Equipment Limited has been struck off fromthe Register of Companies and consequently ceased to be an Associate Company with effectfrom 20 January 2017.
23. DETAILS RELATING TO DEPOSITS COVERED UNDERCHAPTER VOF THE COMPANIES ACT 2013:
24. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BYTHE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:
To the best of our knowledge the Company has not received any such orders from theRegulators Courts or Tribunals during the year which may impact the Going Concern Statusor the Company's operation in future.
25. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THEFINANCIAL STATEMENTS:
The Company has developed a strong two-tier internal control framework comprisingentity level controls and process level controls. The entity level controls of the Companyinclude elements such as defined Code of Conduct Whistle Blower Policy / Vigil Mechanismrigorous management review and MIS and strong internal audit mechanism. The process levelcontrols have been ensured by implementing appropriate checks and balances to ensureadherence to Company policies and procedures efficiency in operations and also reduce therisk of frauds.
Regular management oversight and rigorous periodic testing of internal controls makesthe internal controls environment strong at the Company. The Audit Committee along withthe Management oversees results of the internal audit and reviews implementation on aregular basis.
26. COMPOSITION OF AUDIT COMMITTEE:
The composition of the Audit Committee has been reported in the Report on CorporateGovernance annexed to this Report.
VI. INFORMATION FORMING PART OF THE DIRECTORS' REPORT PURSUANT TO RULE 5 OF THECOMPANIES (APPOINTMENT AND REMUENRATION OF MANAGERIAL PERSONNEL) RULES 2014:
The relevant information pursuant to Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed as 'Annexure V' tothis Report.
VII. VIGIL MECHANISM:
The Company has a Whistle Blower Policy/Vigil Mechanism (''the Policy") to dealwith instances of fraud unethical behavior etc. The Policy provides a mechanism fordirectors and employees of the Company and other persons dealing with the Company toreport genuine concerns including but not limited to unethical behavior actual orsuspected fraud or violation of the Company's Code of Conduct for Board of Directors andSenior Management or ethics policy or any other instance to the Chairman of the AuditCommittee of the Board of Directors of the Company. The Policy is placed on the Company'swebsite viz. www.kil.net.in .
VIII. PREVENTION OF SEXUAL HARASSMENT POLICY:
The Company has in place a Policy for Prevention of Sexual Harassment at work place.This would inter alia provide a mechanism for the resolution settlements orprosecution of acts or instances of sexual harassment at work place and to ensure that allemployees are treated with respect and dignity. There were no complaints / cases filed /pending with the Company during the year.
IX. CASH FLOW:
A Cash Flow Statement for the year ended 31 March 2017 is attached to the BalanceSheet as a part of the Financial Statements.
X. CORPORATE GOVERNANCE:
In terms of Regulation 34 of the Regulations a Report on the Corporate Governancealong with Compliance Certificate issued by the Statutory Auditors of the Company isattached and forms part of the Annual Report.
Your Directors would like to place on record their appreciation of the contributionmade and support provided to the Company by the shareholders employees and bankersduring the year under report.
|For and on behalf of the Board of Directors || |
| ||ATULKIRLOSKAR |
| ||CHAIRMAN |
|Pune:4 July 2017 ||DIN 00007387 |