Shri Kalyan Holdings Ltd.
|BSE: 532083||Sector: Financials|
|NSE: N.A.||ISIN Code: INE079N01019|
|BSE 11:18 | 19 Apr||Shri Kalyan Holdings Ltd|
|NSE 05:30 | 01 Jan||Shri Kalyan Holdings Ltd|
|BSE: 532083||Sector: Financials|
|NSE: N.A.||ISIN Code: INE079N01019|
|BSE 11:18 | 19 Apr||Shri Kalyan Holdings Ltd|
|NSE 05:30 | 01 Jan||Shri Kalyan Holdings Ltd|
Shri Kalyan Holdings Limited
The Board of Directors of Shri Kalyan Holdings Limited with immense pleasure presentstheir 25th report on the business and operations of the Company for thefinancial year 2016-17. This report is being presented along with the Audited FinancialStatements for the year.
1. FINANCIAL HIGHLIGHTS:
The Company's Financial Performance for the Year ended 31st March 2017 issummarized below:
Previous year figures have been re-grouped and rearranged wherever considerednecessary.
2. OPERATIONS AND COMPANY'S AFFAIRS:
The net receipt from operations during the year under review were Rs. 79959333/- asagainst Rs. 45502726/- in the previous year. The net profit before tax is Rs.5392326/- as against profit of Rs. 1500929/- in the previous year and the net profitafter tax is Rs. 5442226/- as against profit of Rs. 1611020/- in the previous year.
The Company is mainly engaged in the business of Non Banking Financing Activities andmaintained a close focus on increasing revenue. The Company has been regular in servicingall its debt obligations. The business operations of the company during the year underreview were satisfactory as compared to previous year.
The Board of directors has decided not to recommend any dividend for the financial yearunder review i.e. 2016-17 following the conservation approach to retain the profit.
4. SHARE CAPITAL
During the FY 2016-17 there was no change in capital structure of the Company and paidup share capital of the Company stood at Rs. 99877500/- (Rupees Nine Crore Ninety EightLakhs Seventy Seven Thousand and Five Hundred).
5. NUMBER OF MEETINGS OF BOARD OF DIRECTORS
During the financial year 2016-17 the Board of Directors of the Company met 06 (Six)times on 28th May 2016 12th August 2016 11thNovember 2016 10th January 2017 10th February 2017 and 29thMarch 2017.
Frequency and quorum at these meetings were in conformity with the provisions of theCompanies Act 2013 and the Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 ("Listing Regulations"). Theintervening gap between any two meetings was within the period prescribed by the CompaniesAct 2013 Secretarial Standard-1 and the Listing Regulations.
6. DECLARATION OF INDEPENDENCE BY INDEPENDENT DIRECTORS
All the Independent Non-Executive Directors of the company viz. Mr. Devendra KumarPatni Mr. Virat Dewan and Mrs. Priyanka Patni have submitted the declaration ofindependence as required pursuant to Section 149(7) of the Companies Act 2013 and thestating that they meet the criteria of independence as laid down under Section 149(6) ofthe Companies Act 2013.
7. DIRECTORS AND KEY MANAGERIAL PERSONNEL Directors i) In accordance withthe provisions of Section 152(6) of the Companies Act 2013 and the Company's Articles ofAssociation Mr. Jinendra Kumar Jain (DIN: 00168251) Whole-Time Director of the Companyis liable to retire by rotation at the ensuing Annual General Meeting and being eligiblehas offered himself for re-appointment. ii) Mr. Rajendra Kumar Jain (DIN: 00168151) wasre-appointed as Chairman cum Whole-Time Director of the Company at 24th AnnualGeneral Meeting held on 21st September 2016 for a period of three years w.e.f.01st September 2016 to 31st August 2019. iii) Mr. Bhupendra Kumar Jain (DIN:00168251) was re-appointed as Managing Director of the Company at 24th AnnualGeneral Meeting held on 21st September 2016 for a period of three years w.e.f.01st September 2016 to 31st August 2019. iv) Mr. Jinendra Kumar Jain (DIN:00168251) was re-appointed as Whole-Time Director at 24th Annual GeneralMeeting held on 21st September 2016 for a period of three years w.e.f. 01stSeptember 2016 to 31st August 2019. v) Mr. Virat Dewan (DIN: 00155356)Independent Director of the Company has resigned from the directorship w.e.f. 11thAugust2017.
vi) Mr. Gaurav Srivastava (DIN: 07637558) is proposed to be appointed as an IndependentDirector at the ensuing AGM for a term of 5 (five) consecutive years commencing from 27thSeptember 2017. His appointment as an Independent Director of the Company is placedbefore the members for consideration and approval.
Key Managerial Personnel: i) Ms. Komal Gandhi Company Secretary & ComplianceOfficer resigned w.e.f. 21st March 2017. ii) Ms. Nandani Patidar was appointed as CompanySecretary & Compliance Officer of the Company w.e.f. 29th March 2017.
8. TRANSFER TO RESERVES
Since the Company is a Non-Banking Finance Company registered with Reserve Bank ofIndia (RBI) therefore as per section 45IC of RBI Act 1934 the Company has transferredRs. 1088445/- in reserve fund i.e. aggregating of 20% of its net profit during theFinancial Year 2016-17.
The Company has also transferred Rs. 389652/- to special reserve fund as provision forstandard assets i.e. 0.25% of the outstanding standard assets in accordance with theprovisioning norms of RBI i.e. for the financial year 2016-17.
The Company has not proposed any amount to be transferred to Reserves as anappropriation of profits.
9. NOMINATION & REMUNERATION POLICY:
In accordance with the provisions of section 178 of the Companies Act 2013 theCompany has Nomination and Remuneration Policy in place for Directors Key managerialPersonnel and Senior Management Employees. The said policy is available on our weblinkwww.shrikalyan.com/comp/Remuneration%20Policy.pdf and also annexed with this report as"Annexure I".
There has been no change in the policy since the last financial year. We affirm thatthe remuneration paid to the directors and KMP's is as per the terms laid out in theNomination and Remuneration Policy of the Company.
10. PREVENTION OF INSIDER TRADING CODE
Pursuant to the provisions of the Securities and Exchange Board of India (Prohibitionof Insider Trading) Regulations 2015 the Board has formulated and implemented a Code ofConduct to regulate monitor and report trading by insiders and Code of Practices andProcedures for fair disclosure of Unpublished Price Sensitive Information. The same isavailable on the Company's website i.e. www.shrikalyan.com/comp/cfd.pdf.
11. AUDITORS AND AUDIT REPORTS
The Company had appointed M/s Banshi Jain & Associates Chartered AccountantsMumbai (Firm Registration Number: 100990W) as Statutory Auditors of the Company at 22ndAnnual General Meeting held on 31st July 2014 for a period of three yearssubject to the ratification at every AGM. Their term of appointment expires at theconclusion of the ensuing Annual General Meeting.
Further in accordance with the provisions of Section 139 of the Companies Act 2013read with rules made there under it is compulsorily required to rotate the StatutoryAuditors who have held the office for ten years or more. In view of above requirementsBanshi Jain & Associates Chartered Accountants Mumbai would not be eligible to bereappointed as Statutory Auditor of the Company and accordingly the Board of Directorspursuant to recommendations of the Audit Committee has recommended the appointment ofM/s Jigna Sheth & Associates Chartered Accountants (FRN: 134922W) as StatutoryAuditor to the Shareholders for a period of five years from the conclusion of 25thAnnual General Meeting (AGM) till the conclusion of 30th AGM subject to yearlyratification by the members at every AGM. The Company received a certificate from M/sJigna Sheth & Associates Chartered Accountants to the effect that their appointmentif made would be within the prescribed limits under Section 139 of the Companies Act2013 and that they are not disqualified for appointment within the meaning of Section 141of the Companies Act 2013. Necessary resolution regarding the appointment of StatutoryAuditors for the approval of the members of the Company has been taken in the noticeconvening 25th AGM of the Company. The Auditors' Report for the financial year2016-17 doesn't contain any reservation qualification or adverse remark. Informationreferred in Auditors' Report are self-explanatory and do not call for any furthercomments.
Pursuant to the provisions of Section 204 of the Companies Act 2013 read with Rule 9 ofThe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theBoard had appointed M/s V. M. & Associates Company Secretaries in Practice Jaipur(FRN: P1984RJ039200) as Secretarial Auditor of the Company to conduct the secretarialaudit of the company for the financial year 2016-17.
The Secretarial Audit Report in form MR-3 issued by M/s V. M. & Associates CompanySecretaries in Practice for the financial year 2016-17 is annexed herewith as AnnexureII and it is self explanatory and does not contain any qualification reservation oradverse remark(s) in the report.
The Board has re-appointed M/s V. M. & Associates Company Secretaries in PracticeJaipur as Secretarial Auditor of the Company to carry out secretarial audit for theFinancial Year 2017-18.
Pursuant to the provisions of Section 138 of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014 the Board had appointed M/s Shah Surendra &Associates Chartered Accountants Jaipur (FRN: 004666C) as Internal Auditor of theCompany to carry out the Internal Audit of the company for the F.Y. 2016-17.
The Board has re-appointed M/s Shah Surendra & Associates Chartered AccountantsJaipur as Internal Auditor of the Company for the F.Y. 2017-18.
12. LOANS GUARANTEES OR INVESTMENTS BY THE COMPANY
Pursuant to Section 186(11) of the Companies Act 2013 loans made guarantees given orsecurities provided or acquisition of securities by a Non Banking Finance company in theordinary course of its business are exempted from disclosure in the Annual Report.
13. RELATED PARTY TRANSACTIONS
In line with the requirements of Section 188 of the Companies Act 2013 and ListingRegulations your Company has formulated a Policy on Related Party Transactions which isalso available on company's weblink at www.shrikalyan.com/comp/Policy%20on%20Related%20party%20policy_2015.pdf. The Policy intends to ensure that properreporting; approval and disclosure processes are in place for all transactions between theCompany and Related Parties.
The particulars of contracts or arrangements with related parties referred to insection 188(1) and applicable rules of the Companies Act 2013 in Form AOC-2 is providedas Annexure III to this Annual Report.
14. CODE OF CONDUCT
The Board has laid down a Code of Conduct for all Board members and senior managementpersonnel of the Company which is available on weblink of the company i.e.www.shrikalyan.com/code-of-conduct.html. All the Board members and the senior managementpersonnel have affirmed compliance with the Code of Conduct during the year ended on 31stMarch 2017.
15. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATES AND THE DATE OF THE REPORT
The information required under Section 134 of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014 relating to Material Changes And Commitments there wereno such material changes and commitments occurred subsequent to the close of the financialyear of the Company to which the financial statements relates and the date of the reportaffecting the financial position of the company.
16. EXTRACT OF THE ANNUAL RETURN
As required by Section 92(3) of the Companies Act 2013 and the Rules framed thereunder the extract of the Annual Return in Form MGT 9 for the financial year ended on 31stMarch 2017 is attached herewith as Annexure IV.
17. INTERNAL FINANCIAL CONTROLS
The Board has adopted policies and procedures for ensuring the orderly and efficientconduct of its business including the adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial disclosures.
18. RISK MANAGEMENT
The Company has developed and implemented a risk management policy which encompassespractices relating to identification assessment monitoring and mitigation of variousrisks to key business objectives. The Risk management framework of the Company seeks tominimize adverse impact of risks on our key business objectives and enables the Company toleverage market opportunities effectively.
The various key risks to key business objectives are as follows:
Liquidity Risk: It is the risk that the Company will be unable to meet itsfinancial commitment to a Bank/Financial Institution in any location any currency at anypoint in time. Liquidity risk can manifest in three different dimensions for the Company.
Funding Risk: To replace net outflows due to unanticipated outflow.
Time Risk: To compensate for non-receipt of expected inflows of funds.
Call Risk: Due to crystallization of contingent liabilities or inability toundertake profitable business opportunities when desirable.
Interest Rate Risk: It is the risk where changes in market interest rates mightadversely affect the Company's financial condition. The short term/immediate impact ofchanges in interest rates are on the Company's Net Interest Income (NII). On a longerterm changes in interest rates impact the cash flows on the assets liabilities andoff-balance sheet items giving rise to a risk to the net worth of the Company arising outof all repricing mismatches and other interest rate sensitive positions.
19. POSTAL BALLOT:
During the year under review the Company conducted a Postal Ballot pursuant to theprovisions of Section 110 of the Companies Act 2013 read with the Companies (Managementand Administration) Rules 2014 to alter Clause III (A) of the Objects clause of theMemorandum of Association of the Company by way of addition of objects through specialresolution. A snapshot of the voting results of the postal ballots is as follows:
Item No. 1: Special Resolution for amendment of Clause III of the Memorandum ofAssociation of the Company
Details of voting pattern:
CS Manoj Maheshwari FCS: 3355 Practising Company Secretary Jaipur was appointed asthe Scrutinizer to conduct the Postal Ballot process in a fair and transparent manner inaccordance with the applicable provisions of the Companies Act 2013.
Procedure for Postal Ballot:
Pursuant to the provisions of Sections 108 and 110 and other applicable provisions ofthe Companies Act 2013 read with the rules made thereunder and regulation 44 of the SEBI(LODR) Regulations 2015 the Company provided e-voting facility to all its members inaddition to the physical ballots. For this purpose the Company engaged the services ofCDSL. Postal ballot notices forms and self-addressed business reply envelopes were sentto the shareholders who had not registered their e-mail IDs with the Company/Depositoriesand also by email to those shareholders whose e-mail IDs were registered with the Company/Depositories. The Company also published a notice in the newspaper declaring the detailsof completion of dispatch and other requirements as mandated under the provisions of theAct and Rules framed thereunder. Upon completion of scrutiny of the postal ballot formsand votes cast through e-voting in a fair and transparent manner the scrutinizer i.e. CSManoj Maheshwari submitted his report to the Chairman. The results of the postal ballotwere displayed on the Company's website www.shrikalyan.com and on CDSL's website besidesbeing communicated to the Stock Exchanges.
20. FORMAL ANNUAL EVALUATION
Pursuant to the provisions of the Companies Act 2013 the Board of Directors hascarried out an annual evaluation of its own performance committees independent directorsand other individual directors. The performance of the Board was evaluated by the board onthe basis of criteria as provided to all the directors which were duly filled in.
The performance of the committees was evaluated by the Board after seeking inputs fromthe committee members on the basis of criteria such as the composition of committeesmanner of conducting the meetings value additions made by the members of the committeeseffectiveness of committee meetings etc. The Board and the Nomination and RemunerationCommittee reviewed the performance of individual directors on the basis of criteria suchas the contribution of the individual director to the Board and committee meetings likeattendance of the directors in the meetings their contribution & inputsqualification and expertise etc.
21. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The Company has always believed in providing a safe and harassment free workplace forevery individual through various interventions and practices. The Company always endeavorsto create and provide an environment that is free from discrimination and harassmentincluding sexual harassment.
In accordance with Sexual Harassment of Women at Work place (Prevention Prohibitionand Redressal) Act 2013 and the rules framed there under the Company has formed anAnti-Sexual Harassment Policy. Internal Complaints Committee (ICC) has been set up toredress complaints received regarding sexual harassment. All employees (permanenttemporary trainees) are covered under this policy.
The following is summary of sexual harassment complaints received and disposed offduring the year 2016-17.
Number of complaints received: NIL
Number of complaints disposed off: NIL
22. FIXED DEPOSITS
The Company has not invited accepted or renewed deposits from public within the ambitof Section 73 of the Companies Act 2013 read with The Companies (Acceptance of Deposits)Rules 2014 during the year under review.
23. PARTICULARS REGARDING CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNINGS AND OUTGO:
The requirements under Section 134(3) (m) of the Companies Act 2013 read with Rule8(3) of the Companies (Accounts) Rules 2014 the details of conservation of energytechnology absorption foreign exchange earnings and outgo are as follows:
(a) Conservation of energy:
(c) Foreign exchange earnings and Outgo
Foreign exchange earnings and outgo is reported to be Nil during the financial yearunder review.
24. COMPOSITION OF AUDIT COMMITTEE
In accordance with the provisions of Section 177 of the Companies Act 2013 the AuditCommittee comprises of three Directors two of whom are Independent Directors. The memberof the Audit Committee possesses knowledge by corporate finance accounts and company law.
The constitution of the Audit Committee of Directors is as under:
*Mr. Virat Dewan ceased to be member of the Audit Committee w.e.f. 11thAugust 2017
Terms of Reference of the audit Committee inter alia include the following: a) Therecommendation for appointment remuneration and terms of appointment of auditors of thecompany; b) Review and monitor the auditor's independence performance and effectivenessof audit process; c) Examination of the financial statement and the auditor's reportthereon; d) Approval or any subsequent modification of transactions of the company withrelated parties; e) Scrutiny of inter-corporate loans and investments; f) Valuation ofundertakings or assets of the company wherever it is necessary; g) Evaluation of internalfinancial controls and risk management systems; h) Monitoring the end use of funds raisedthrough public offers and related matters. i) The role of Audit Committee shall inter aliainclude the roles as prescribed in Regulation 18 of the Listing Regulations.
25. UNIFORM LISTING AGREEMENT
The Company has entered into a uniform Listing Agreement with BSE Ltd on 08thDecember 2015 as per the requirement of Listing Regulations.
The equity shares of the company are listed with the BSE Ltd. under Scrip Code: 532083and the listing fee for the year 2017-18 has been duly paid.
26. ESTABLISHMENT OF VIGIL MECHANISM
As per Section 177 of the Companies Act 2013 a Vigil Mechanism has been establishedin order to ensure that the activities of the Company and its employees are conducted in afair and transparent manner by adoption of highest standards of professionalism honestyintegrity and ethical behavior. The Vigil Mechanism Policy has been uploaded on thewebsite of the Company and the Weblink iswww.shrikalyan.com/comp/Vigil%20mechanism_SKHL.pdf.
Company has established a vigil mechanism for Directors and employees to reportconcerns and unethical behavior actual or suspected fraud or violation of code of conductand ethics. It also provides for adequate safeguards against the victimization of personswho use such mechanism and make provision for direct access to the chairperson of theAudit Committee in exceptional cases.
During the year no whistle blower event was reported and mechanism is functioningwell. No personnel has been denied access to the Audit Committee.
27. CORPORATE GOVERNANCE REPORT
As per Regulation 15(2) of the Listing Regulation the compliance with the CorporateGovernance provisions shall not apply in respect of the following class of companies: a.Listed Entity having paid up equity share capital not exceeding Rs.10 crore and Net Worthnot exceeding Rs.25 crore as on the last day of the previous financial year; b. ListedEntity which has listed its specified securities on the SME Exchange.
Since our Company falls in the ambit of aforesaid exemption (a); hence compliance withthe provisions of Corporate Governance shall not apply to the Company and it also does notform part of the Annual Report for the Financial Year 2016-17.
28. PARTICULARS OF EMPLOYEES/PERSONNEL a. Disclosures pertaining to remunerationand other details as required under section 197(12) of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 and Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules2016 are annexed to this report as Annexure V. b. The statement containingparticulars of employees as required under rule 5(2) and rule 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed to thisreport as Annexure VI:
29. DIRECTORS' RESPONSIBILITY STATEMENT
As required by Section 134(3)of the Companies Act 2013 the Board of Directors of theCompany hereby state and confirm that: a) in the preparation of the annual accounts forthe year ended 31st March 2017 the applicable accounting standards had beenfollowed and there are no material departures; b) the directors had selected suchaccounting policies and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company at 31st March 2017 and of the profit or loss of the Company forthat period; c) the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;d) the directors have prepared the annual accounts on a going concern basis; e) thedirectors have laid down internal financial controls to be followed by the company andthat such internal financial controls are adequate and were operating effectively and; f)the directors have devised proper systems to ensure compliances with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
30. MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT
The Management's Discussion and Analysis Report for the year under review asstipulated under Regulation 34(2)(e) of the Listing Regulations is given below:
INDUSTRY STRUCTURE AND DEVELOPMENTS
Non-banking finance companies (NBFCs) form an integral part of the Indian financialsystem. The financial services industry is highly interrelated to overall economic growthand has been a large driver of this growth. The Non-Banking Finance Companies (NBFCs) sawmoderation in rate of asset growth rising delinquencies resulting in higher provisioningthereby impacting profitability. However comfortable capitalisation levels andconservative liquidity management continues to provide comfort to the credit profile ofwell run NBFCs in spite of the impact on profitability.
The revised regulatory framework released in November 2014 by the RBI focuses onstrengthening the structural profile of the NBFC sector. These changes have to beimplemented in a phased manner by March 31 2018.
NBFCs continue to play a critical role in making financial Services accessible to awider set of India's population and are emerging as strong intermediaries in the retailfinance space. Going forward one should expect NBFCs to further strengthen their presencein retail finance and grow at a reasonably healthy pace.
THREATS RISKS & CONCERNS
Growth of the Company's asset book quality of assets and ability to raise funds dependsignificantly on the economy. Unfavorable events in the Indian economy can affect consumersentiment and in turn impact consumer decision to purchase financial products. Competitionfrom a broad range of financial services providers unstable political environment andchanges in Government policy/regulatory framework could impact the Company'soperations.With the emergence of Small Finance Banks the landscape is set to get morecompetitive.
The Company is also dealing in shares & Stock trading which is unforeseen in termsof the performance of the industries economic scenario.
Your Company is exposed to several market risks like credit risk liquidity risk andinterest rate risk. The volatility of the capital markets in which your Company operatesis also a major cause of concern to the Company.
SEGMENT WISE OR PRODUCT WISE PERFORMANCE
The Company is engaged primarily in the business of financing and also engaged in thebusiness of Investment & Trading of Securities.
The Company is radically growing its financing business activities and earned a netprofit of Rs. 5442226/- as compare to net profit of Rs.1611020/- during the previousyear. 95.38% income out of total income was earned through financing activity of theCompany.
The Outlook of the Company for the year ahead is to diversify risk. The markets willcontinue to grow and mature leading to differentiation of products and services. Eachfinancial intermediary will have to find its niche in order to add value to consumers. TheCompany is cautiously optimistic in its outlook for the year 2016-17.
INTERNAL CONTROL SYSTEMS:
The Company has put in place an adequate system of internal control commensurate withits size and nature of business. These systems provide a reasonable assurance in respectof providing financial and operational information complying with applicable statutessafeguarding of assets of the Company and ensuring compliance with corporate policies. TheAudit Committee reviews adherence to internal control systems and internal audit reports.
Your company is a BSE listed Non Banking Financial Company (NBFC). The Company's totalRevenue from Operations during the year is Rs. 79959333/- and the net profit after taxis Rs. 5442226/- as against Rs. 45502726/- and Profit of Rs. 1611020/- respectivelyin the previous year.
The Company recognizes people as its most valuable asset and has built an open andtransparent culture to nurture this asset. The Company is committed to strive towards fullengagement of all its employees to ensure safe working conditions and safe behaviour aswell as take care of their health. The Company provides a fair and equitable workenvironment to all its employees. The Company is continuously working to create andnurture an atmosphere which is highly motivated and result oriented. The employeerelations have continued to be harmonious throughout the year. The Company has ninepermanent employees as on 31st March 2017.
The Board of Directors places on record its deep sense of appreciation to employees atall levels or their hard work dedication and commitment. The Board also thank all theshareholders investors vendors service providers bankers and all other stakeholdersfor their continued and consistent support to the Company during the year.
Your Directors would like to make a special mention of the support extended by thevarious Departments of Government of India the State Governments the Tax Authoritiesthe Ministry of Commerce Reserve Bank of India Ministry of Corporate Affairs Ministryof Finance Securities and Exchange Board of India Stock Exchanges and othergovernmental/ semi-governmental bodies and look forward to their continued support in allfuture endeavours.
ANNEXURE TO THE BOARD'S REPORT
NOMINATION AND REMUNERATION POLICY OF THE COMPANY
In pursuance of the Company's policy to consider human resources as its invaluableassets to pay equitable remuneration to all Directors Key Managerial Personnel (KMP) andemployees of the Company to harmonize the aspirations of human resources consistent withthe goals of the Company and in terms of the provisions of the Companies Act 2013 and the*listing regulation as amended from time to time.
The Board of Directors of Shri Kalyan Holdings Ltd. ("the Company")re-constituted the "Nomination Committee" as "Nomination and RemunerationCommittee" at the Meeting held on May 28 2014 with immediate effect consisting ofthree (3) Non-Executive Directors of which all are Independent Directors. The policy onnomination and remuneration of Directors Key Managerial Personnel and Senior Managementhas been formulated by the Committee and approved by the Board of Directors. Objective andpurpose of the Policy:
The Nomination and Remuneration Committee and this Policy shall be in compliance withSection 178 of the Companies Act 2013 read along with the applicable rules thereto and**Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 (hereinafter referred as Listing Regulations). The Key Objectives of the Committeewould be: I. To guide the Board and lay down criteria in relation to appointment andremoval of Directors Key Managerial Personnel and Senior Management.
II. To evaluate the performance of the members of the Board and provide necessaryreport to the Board for further evaluation of the Board.
III. To recommend to the Board on Remuneration payable to the Directors Key ManagerialPersonnel and Senior Management. IV. To provide to Key Managerial Personnel and SeniorManagement reward linked directly to their effort performance dedication and achievementrelating to the Company's operations.
V. To retain motivate and promote talent and to ensure long term sustainability oftalented managerial persons and create competitive advantage.
VI. To devise a policy on Board diversity
VII. To develop a succession plan for the Board and to regularly review the plan.
The Nomination and Remuneration Policy has been formulated in order to bring aboutobjectivity in determining the remuneration package while striking a balance between theinterest of the Company and the shareholders.
In the context of the aforesaid criteria the following policy has been formulated bythe Nomination and Remuneration Committee and adopted by the Board of Directors at itsmeeting held on 28th May 2014.
*Substituted for Listing Agreement' by amending the policy by the Board ofDirectors at its meeting on 06.11.2015 which will be effective from December 1 2015.
** Substituted for clause 49 under the listing agreement' by amending the policyby the Board of Directors at its meeting on 06.11.2015 which will be effective fromDecember 1 2015.
I. "Act" means the Companies Act 2013 and Rules framed there under asamended from time to time. II. "Board" means Board of Directors of theCompany.
III. "Directors" mean the Directors of the Company.
IV. "Key Managerial Personnel" (KMP) means:
Chief Executive Officer or the Managing Director or the Manager;
Chief Financial Officer;
Company Secretary; and
Such other officer as may be prescribed under the Act.
V. "Senior Management" means personnel of the company who are members ofits core management team excluding the Board of Directors and KMPs comprising of allmembers of management one level below the Executive Directors including Functional Heads.
CONSTITUTION OF THE NOMINATION AND REMUNERATION COMMITTEE:
The Board has changed the nomenclature of Remuneration Committee by renaming it asNomination and Remuneration Committee on 28th May 2014. The Nomination and RemunerationCommittee comprises of following Directors:
The Board has the power to reconstitute the Committee consistent with the Company'spolicy and applicable statutory requirement.
The Policy is applicable to:
Directors (Executive and Non Executive)
Key Managerial Personnel
Senior Management Personnel
ROLE OF COMMITTEE:
The Committee shall:
Formulate the criteria for determining qualifications positive attributes andindependence of a director.
Identify persons who are qualified to become Director and persons who may beappointed in Key Managerial and Senior Management positions in accordance with thecriteria laid down in this policy.
Recommend to the Board appointment and removal of Director KMP and SeniorManagement Personnel.
??Appointment criteria and qualifications:
The Committee shall identify and ascertain the integrity qualificationexpertise and experience of the person for appointment as Director KMP or at SeniorManagement level and recommend to the Board his / her appointment. Criteria foridentifying persons who are qualified to be appointed as a Directors / KMP /SeniorManagement Personnel of the Company:
Section 164 of the Companies Act 2013 states disqualifications for appointment of anyperson to become Director of any Company. Any person who in the opinion of the Board isnot disqualified to become a Director and in the opinion of the Board possesses theability integrity and relevant expertise and experience can be appointed as Director ofthe Company.
b) Independent Directors
For appointing any person as an Independent Director he/she should possessqualifications as mentioned in Rule 5 of The Companies (Appointment and Qualification ofDirectors) Rules 2014
c) Senior Management Personnel and KMP
The Company has an hierarchy structure displaying positions of Senior Managementincluding KMP and other positions with the minimum qualifications and experiencerequirements for each positions which commensurate with the size of its business and thenature and complexity of its operations. Any new recruit in the Company is to match therequirements prescribed in the hierarchy structure of the Company.
A person should possess adequate qualification expertise and experience for theposition he / she is considered for appointment. The Committee has discretion to decidewhether qualification expertise and experience possessed by a person is sufficient /satisfactory for the concerned position.
The Company shall not appoint or continue the employment of any person asWhole-time Director who has attained the age of seventy years. Provided that the term ofthe person holding this position may be extended beyond the age of seventy years with theapproval of shareholders by passing a special resolution based on the explanatorystatement annexed to the notice for such motion indicating the justification for extensionof appointment beyond seventy years.
??Term / Tenure a) Managing Director/Whole-time Director:
The Company shall appoint or re-appoint any person as its Executive ChairmanManaging Director or Executive Director for a term not exceeding five years at a time. Nore-appointment shall be made earlier than one year before the expiry of term. b)Independent Director:
The maximum tenure of Independent Directors shall be in accordance with theCompanies Act 2013 and clarifications/ circulars issued by the Ministry of CorporateAffairs in this regard from time to time
At the time of appointment of Independent Director it should be ensured thatnumber of Boards on which such Independent Director serves is restricted to seven listedcompanies as an Independent Director and three listed companies as an Independent Directorin case such person is serving as a Whole-time Director of a listed company or such othernumber as may be prescribed under the Act.
The Committee shall carry out evaluation of performance of every Director KMPand Senior Management Personnel at regular interval (yearly)
a. Criteria for evaluating Non-executive Board members:
Section 149 of the Companies Act 2013 read with Schedule IV of the said Act statesthat the Independent Directors shall at its separate meeting review performance of non-independent directors and the Board as a whole and the performance evaluation ofIndependent Directors shall be done by the entire Board of Directors excluding theDirector being evaluated.
b. Criteria for evaluating performance of Key Managerial Personnel and SeniorManagement Personnel
Criteria for evaluating performance of KMP and Senior Management Personnel shall be asper the HR Guideline on Performance Management System and Development Plan of the Company.
Due to reasons for any disqualification mentioned in the Act or under any otherapplicable Act rules and regulations thereunder the Committee may recommend to theBoard with reasons recorded in writing removal of a Director KMP or Senior ManagementPersonnel subject to the provisions and compliance of the said Act rules and regulations.
The Director KMP and Senior Management Personnel shall retire as per theapplicable provisions of the Act and the prevailing policy of the Company. The Board willhave the discretion to retain the Director KMP Senior Management Personnel in the sameposition/ remuneration or otherwise even after attaining the retirement age for thebenefit of the Company.
REMUNERATION FOR THE WHOLE-TIME DIRECTOR KMP AND SENIOR MANAGEMENT PERSONNEL
The remuneration to the Whole-time Director KMP and Senior Management Personnelwill be determined by the Committee and recommended to the Board for approval. Theremuneration / compensation / commission etc. shall be subject to the prior/post approvalof the shareholders of the Company and Central Government wherever required.
The remuneration and commission to be paid to the Whole-time Director shall bein accordance with the percentage / slabs / conditions laid down in the Articles ofAssociation of the Company and as per the provisions of the Act.
In view of the present financial position of the Company no Director is entitledto receive remuneration by way of fees for attending meetings of Board or Committeethereof. Provided Board is empowered to fix the sitting fees for the Directors howeverthe amount of such fees shall not exceed Rs. One lakh per meeting of the Board orCommittee or such amount as may be prescribed by the Central Government from time to time.
Commission may be paid within the monetary limit approved by shareholderssubject to the limit not exceeding 1% of the profits of the Company computed as per theprovisions of Section 197 the Companies Act 2013.
An Independent Director shall not be entitled to any stock option of theCompany.
MEMBERSHIP FREQUENCY OF MEETINGS
Chairperson of the Committee shall be an Independent Director.
The Committee shall consist of a minimum 3 non-executive directors all of thembeing independent.
Membership of the Committee shall be disclosed in the Annual Report.
Term of the Committee shall be continued unless terminated by the Board ofDirectors.
The meeting of the Committee shall be held at such regular intervals as may berequired.
The Company Secretary of the Company shall act as Secretary of the Committee.
MINUTES OF COMMITTEE MEETING
Proceedings of all meetings must be minutised and signed by the Chairman of theCommittee at the subsequent meeting. Minutes of the Committee meetings will be tabled atthe subsequent Board and Committee meeting.
COMMUNICATION OF THIS POLICY
For all Directors a copy of this Policy shall be handed over within one monthfrom the date of approval by the Board. This Policy shall also be posted on the web-siteof the Company and in the Annual Report of the Company.
Any change in the Policy shall on recommendation of Nominations andRemuneration Committee be approved by the Board of Directors of the Company. The Board ofDirectors shall have the right to withdraw and / or amend any part of this Policy or theentire Policy at any time as it deems fit or from time to time and the decision of theBoard in this respect shall be final and binding.
Particulars of contracts/arrangements made with related parties
Form No. AOC-2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014 as on March 31 2017)
This Form pertains to the disclosure of particulars of contracts/arrangements enteredinto by the Company with related parties referred to in Sub-section (1) of Section 188 ofthe Companies Act 2013 including certain arm's length transactions under third provisothereto.
1. Details of contracts or arrangements or transactions not at arm's lengthbasis
There were no contracts or arrangements or transactions entered into during the yearended March 31 2017 which were not at arm's length basis.
2. Details of material contracts or arrangement or transactions at arm's lengthbasis
The details of material contracts or arrangement or transactions at arm's length basisfor the year ended March 31 2017 are as follows: (a) Name(s) of the related party andnature of relationship: Mrs. Prem Lata Jain who is Mother of Mr. Rajendra Kumar JainChairman cum Whole-Time Director Mr. Bhupendra Kumar Jain Managing Director and Mr.Jinendra Kumar Jain Whole-Time Director.
(b) Nature of contracts/arrangements/transactions: Leasing of property under section188 (1) (c) (c) Duration of the contracts/arrangements/transactions: 9 years (w.e.f.09.03.2015)
(d) Salient terms of the contracts or arrangements or transactions including the valueif any: The company has taken ground floor of property situated at B-19 Lal Bahadur Nagar(East) Behind Kesar Kothi J.L.N. Marg Jaipur-302017 on lease for corporate officew.e.f. 09.03.2015 for a period of 9 years at Rs. 180000/- (Rupees One Lakh EightyThousand Only) per annum subject to increment of 15% after every 3 years.
(e) Date(s) of approval by the Board if any: 28.05.2015
(f) Amount paid as advances if any: Six month security amount of Rs. 90000/-
DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT 2013 READ WITH RULE 5(1) OF THECOMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014
Pursuant to Section 197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and Companies(Appointment and Remuneration of Managerial Personnel) Amendment Rules 2016 and thestatistical analysis of the remuneration paid to Directors and Key Managerial Personnel(KMP) as against the other employees of the company and with respect to the performance ofthe company (PAT) is given below:
1. The ratio of the remuneration of each director to the median remuneration of theEmployees of the Company for the financial year 2016-17 : No remuneration is withdrawn bythe directors during the F.Y. 2016-17 due to the accumulated losses suffered by theCompany during the past years.
2. The percentage increase in remuneration of each director Chief Financial OfficerCompany Secretary in the financial year 2016-17: No remuneration is paid to the directorduring the F.Y. 2016-17 due to the accumulated losses suffered by the Company during thepast years whereas there was increase in the remuneration of the Chief Financial OfficerCompany Secretary during the year.
Increase in the remuneration of the Chief Financial Officer and Company Secretary is asfollows:
*Ms. Komal Gandhi resigned w.e.f. 21.03.2017
**Ms. Nandani Patidar was appointed w.e.f. 29.03.2017
3. The percentage increase in the median remuneration of employees in the financialyear 2016-17: Median remuneration of comparable employees has increased by 54.35% in thefinancial year 2016-17.
4. The number of permanent employees on the rolls of company: 7 employees as on31.03.2017.
5. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration-Average %increase in the salary of comparable employees other than Managerial Personnel: - 55.48%Average % increase in the Salary of the Key Managerial Personnel:-NIL
The average % increases in salaries of the comparable employees other than themanagerial personnel is as per the general industry standards.
6. It is hereby affirmed that the remuneration is as per the remuneration policy of thecompany.
The statement containing particulars of employees as required under rule 5(2) and rule5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is given below:
*Ms. Komal Gandhi Company Secretary & Compliance Officer resigned w.e.f. 21stMarch 2017.
**Ms. Nandani Patidar Assistant Company Secretary of the Company was appointed asCompany Secretary and Compliance Officer of the Company w.e.f. 29th March2017.