Shri Kalyan Holdings Ltd.
|BSE: 532083||Sector: Financials|
|NSE: N.A.||ISIN Code: INE079N01019|
|BSE LIVE 11:18 | 19 Apr||Stock Is Not Traded.|
|NSE 05:30 | 01 Jan||Stock Is Not Traded.|
|BSE: 532083||Sector: Financials|
|NSE: N.A.||ISIN Code: INE079N01019|
|BSE LIVE 11:18 | 19 Apr||Stock Is Not Traded.|
|NSE 05:30 | 01 Jan||Stock Is Not Traded.|
Shri Kalyan Holdings Limited
Your Directors are pleased to present their 24th Annual Report together withthe Audited Annual Financial Statements of the Company for the financial year ended March31 2016.
1. FINANCIAL HIGHLIGHTS:
Previous year figures have been re-grouped and rearranged wherever considerednecessary.
2. OPERATIONS AND COMPANYS AFFAIRS:
The net receipt from operations during the year under review were Rs. 45502726/- asagainst Rs. 5137598/- in the previous year. The net profit before tax is Rs. 1500929/-as against loss of Rs. 7699972/- in the previous year and the net profit after priorperiod tax adjustments is Rs. 1611020/- as against loss of Rs. 7536772/- in theprevious year. The Company is mainly engaged in the business of Non Banking FinancingActivities. The business operations of the company during the year under review weresatisfactory as compared to previous year.
Following the conservation approach to retain the profit your directors did notrecommend payment of any dividend for the financial year 2015-16.
4. CAPITAL STRUCTURE
During the FY 2015-16 there was no change in capital structure of the Company and paidup share capital of the Company stands at Rs. 99877500/- (Rupees Nine Crore NinetyEight Lakh Seventy Seven Thousand and Five Hundred).
5. NUMBER OF MEETINGS OF BOARD OF DIRECTORS
During the financial year 2015-16 the Board of Directors of the Company met 04 (four)times on 28th May 2015 12th August 2015 06th November 2015 and 11th February 2016.
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") and thelisting agreements entered into by the company with the Stock Exchanges. The interveninggap between any two meetings was within the period prescribed by the Companies Act 2013and the Listing Regulations.
6. DECLARATION OF INDEPENDENCE BY INDEPENDENT DIRECTORS
All the Independent Non-Executive Directors of the company viz. Mr. Devandra 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:
Retire by rotation:
In accordance with the provisions of Section 152(6) of the Companies Act 2013 and theCompanys Articles of Association Mr. Rajendra Kumar Jain (DIN: 00168151) Chairmancum Whole Time Director of the Company will retire by rotation at the ensuing AnnualGeneral Meeting of the Company and being eligible has offered himself for reappointment.
Appointment /Re-appointment of Executive Directors:
Mr. Bhupendra Kumar Jain (DIN: 00168215) is the Managing Director of the Company. Hiscurrent tenure as Managing Director of the Company would complete on 31.12.2017.Therefore pursuant to the recommendation of the Nomination and Remuneration CommitteeMr. Bhupendra Kumar Jain is re-appointed by the Board of Directors as the ManagingDirector on 28.05.2016 subject to the approval of the shareholders at the ensuing AGMfor a further period of three years with effect from 01.09.2016 to 31.08.2019. So theBoard recommends his re-appointment for the consideration by the Members of the Company.
Mr. Rajendra Kumar Jain (DIN: 00168151) is the Chairman cum Whole-Time Directorof the Company. His current tenure as Whole-Time Director of the Company would complete on31.12.2017. Therefore pursuant to the recommendation of the Nomination and RemunerationCommittee Mr. Rajendra Kumar Jain is re-appointed by the Board of Directors as the Whole-time Director on 28.05.2016 subject to the approval of the shareholders at the ensuingAGM for a further period of three years with effect from 01.09.2016 to 31.08.2019. Sothe Board recommends his re-appointment for the consideration by the Members of theCompany.
Mr. Jinendra Kumar Jain (DIN: 00168251) is the Whole-Time Executive Director ofthe Company. His current tenure as Whole-Time Director of the Company would complete on31.12.2017. Therefore pursuant to the recommendation of the Nomination and RemunerationCommittee Mr. Jinendra Kumar Jain is re-appointed by the Board of Directors as theWhole-time Director on 28.05.2016 subject to the approval of the shareholders at theensuing AGM for a further period of three years with effect from 01.09.2016 to31.08.2019. So the Board recommends his re-appointment for the consideration by theMembers of the Company.
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.322204/- in reserve fund i.e aggregating of 20% of its net profit during theFinancial Year 2015-16.
The Company has also transferred Rs. 240612/- to special reserve fund as provisionfor standard assets i.e. 0.25% of the outstanding standard assets in accordance with theprovisioning norms of RBI i.e. for the financial year 2015-16.
9. NOMINATION & REMUNERATION POLICY:
The Company follows a policy on Nomination and Remuneration of Directors Keymanagerial Personnel and Senior Management Employees as required under sub-section (3) ofSection 178 of the Companies Act 2013. 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 KMPs is as per the terms laid out in theNomination and Remuneration Policy of the Company.
10. Prevention of Insider Trading code
The Company has adopted an Insider Trading Policy to regulate monitor and reporttrading by insiders under the Securities and Exchange Board of India (Prohibition ofInsider Trading) Regulations 2015. This policy also includes practices and procedures forfair disclosure of unpublished price-sensitive information initial and continualdisclosure. The policy is available on our weblink www.shrikalyan.com/comp/cfd.pdf.
M/s Banshi Jain & Associates Chartered Accountants Mumbai (Firm RegistrationNumber: 100990W) were appointed as Statutory Auditors of the company at the 22ndAnnual General Meeting held on 31.07.2014 to hold the office till the conclusion of AnnualGeneral Meeting to be held in the Financial Year 2017-18. In terms of the first proviso toSection 139 of the Companies Act 2013 the appointment of the auditors shall be placedfor the ratification at every Annual General Meeting. Accordingly the appointment of M/sBanshi Jain & Associates Chartered Accountants Mumbai as Statutory Auditors of thecompany is placed for ratification by the shareholders.
The Company has received consent letter from M/s. Banshi Jain & AssociatesChartered Accountants Mumbai to the effect that their appointment if made would bewithin the prescribed limits under Section 139 of the Companies Act 2013 and that theyare not disqualified for appointment within the meaning of Section 141 of the said Act.
The Financial Statements and Auditors Report thereon for the financial year ended31st March 2016 doesnt contain any qualification reservation or adverseremark(s).
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board hadappointed M/s V. M. & Associates Company Secretaries in Practice Jaipur (FRN:P1984RJ039200) as Secretarial Auditor of the Company to carry out the secretarial audit ofthe company for the F.Y. 2015-16. The Secretarial Audit Report is annexed herewith as AnnexureII. There is no qualification reservation or adverse remark(s) in the SecretarialAudit Report.
The Board has also re-appointed M/s V. M. & Associates Company Secretaries inPractice Jaipur as Secretarial Auditor of the Company for the F.Y. 2016-17.
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 as Internal Auditor of the Company to carry outthe internal audit of the company for the F.Y. 2015-16.
The Board has also re-appointed M/s Shah Surendra & Associates CharteredAccountants Jaipur as Internal Auditor of the Company for the F.Y. 2016-17.
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 the Companies Act 2013 and ListingRegulations your Company has formulated a Policy on Related Party Transactions which isalso available on Companys 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.
All Related Party Transactions are placed before the Audit Committee for review andapproval. The transactions entered during the year were in Ordinary Course of the Businessand on Arms Length basis. No Material Related Party Transactions i.e. transactionsexceeding ten percent of the annual consolidated turnover as per the last auditedfinancial statements were entered during the year by your Company except in the ordinarycourse of business. Accordingly the disclosure of Related Party Transactions as requiredunder Regulation 23(8) of Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 and Section 134(3)(h) of the Companies Act2013 in Form AOC-2 is not applicable.
14. SPECIAL BUSINESS
With the applicability of the Companies Act 2013 most of the provisions in theArticles of the company are not in consonance with the extant rules and regulationtherefore the board deems fit and proper to adopt new set of Articles of Association ofthe Company.
Mr. Bhupendra Kumar Jain (DIN: 00168215) Managing Director of the Company whose termexpires on 31.12.2016 is proposed to be reappointed on the board of the Company for afurther period of 3 years w.e.f. 01.09.2016.
Mr. Rajendra Kumar Jain (DIN: 00168151) Chairman and Whole-time Director of theCompany whose term expires on 31.12.2016 is proposed to be reappointed on the board ofthe Company for a further period of 3 years w.e.f. 01.09.2016.
Mr. Jinendra Kumar Jain (DIN: 00168251) Whole-time Director of the Company whose termexpires on 31.12.2016 is proposed to be reappointed on the board of the Company for afurther period of 3 years w.e.f. 01.09.2016.
Details pertaining to the same are chalked in the notice of 24th AnnualGeneral Meeting.
15. 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 2016.
16. 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 RELATE 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 reportlike settlement of tax liabilities operation of patent rights depression in market valueof investments institution of cases by or against the company sale or purchase ofcapital assets or destruction of any assets etc. which affecting the financial positionof the company.
17. EXTRACT OF THE ANNUAL RETURN
The extract of the Annual Return in form MGT-9 as on the financial year ended on 31stMarch 2016 is annexed herewith as Annexure III.
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 Companys financial condition. The short term/immediate impactof changes in interest rates are on the Companys Net Interest Income (NII). On alonger term changes in interest rates impact the cash flows on the assets liabilitiesand off-balance sheet items giving rise to a risk to the net worth of the Company arisingout of all repricing mismatches and other interest rate sensitive positions.
19. EVALUATION OF PERFORMANCE OF BOARD/ COMMITTEES/ KMPS/ INDIVIDUAL DIRECTORS:
Pursuant to the provisions of the Companies Act 2013 a separate exercise was carriedout to evaluate the performance of individual Directors including the Chairman of theBoard who were evaluated on parameters such as their presence leadership level ofengagement and contribution and independence of judgment thereby safeguarding the interestof the Company. The performance evaluation of the Independent Directors was carried out bythe entire Board. The performance evaluation of the Chairman and the Non-IndependentDirectors and the Board of Directors as a whole was carried out by the IndependentDirectors. The board also carried out annual performance evaluation of the working of itsAudit Nomination and Remuneration as well as stakeholder relationship committee. TheDirectors expressed their satisfaction with the evaluation process.
20. 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.
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent temporarytrainees) are covered under this policy.
During the financial year under review the Company has not received any complaints ofsexual harassment from any of the women employees of the Company.
21. FIXED DEPOSITS
The Company has not invited accepted or renewed deposits from public within themeaning of Section 73 of the Companies Act 2013 read with The Companies (Acceptance ofDeposits) Rules 2014 during the year under review.
22. PARTICULARS REGARDING CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNINGS AND OUTGO:
The details of conservation of energy technology absorption foreign exchange earningsand 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.
23. COMPOSITION OF AUDIT COMMITTEE
The Audit Committee comprises of three Directors two of whom are Non-ExecutiveIndependent Directors. The Chairman of the Audit Committee possesses knowledge bycorporate finance accounts and company law.
The constitution of the Audit Committee of Directors is as under:
Terms of Reference of the audit Committee inter alia include the following:
a) The recommendation for appointment remuneration and terms of appointment ofauditors of the company;
b) Review and monitor the auditors independence and performance andeffectiveness of audit process;
c) Examination of the financial statement and the auditors report thereon;
d) Approval or any subsequent modification of transactions of the company with relatedparties;
e) Scrutiny of inter-corporate loans and investments;
f) Valuation of undertakings or assets of the company wherever it is necessary;
g) Evaluation of internal financial controls and risk management systems;
h) Monitoring the end use of funds raised through public offers and related matters.
i) The role of Audit Committee shall inter alia include the roles as prescribed inRegulation 18 of the Listing Regulations.
24. 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 2016- 17 has been duly paid.
25. 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.
This vigil mechanism of the Company is overseen by the Audit Committee and providesadequate safeguard against victimization of employees and directors who avail of the vigilmechanism and also provide direct access to the Chairperson of the Audit Committee inexceptional circumstance and no employee and director have denied the access provided tothe chairman of audit committee.
26. 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 NetWorth not exceeding Rs.25 crore as on the last day of the previous financial year;
b. Listed Entity 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 2015-16.
27. REMUNERATION RELATED DETAILS
a. Disclosures pertaining to remuneration and other details as required under section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 and Companies (Appointment andRemuneration of Managerial Personnel) Amendment Rules 2016 are annexed to this report asAnnexure IV.
b. None of the employees of the company was in receipt of the remuneration exceedingthe limits prescribed u/s 197 (12) read with rule 5(2) of The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 and Companies (Appointment andRemuneration of Managerial Personnel) Amendment Rules 2016 during the year under review.
28. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors of theCompany hereby state and confirm that:
in the preparation of the annual accounts the applicable accounting standardsread with requirements set out under Schedule III to the Act have been followed and thereare no material departures from the same;
the directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit or loss of the Company for that period;
the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
the directors have prepared the annual accounts on a going concern basis;
the directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively and;
the directors have devised proper systems to ensure compliances with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
29. MANAGEMENT DISCUSSIONS AND ANALYSIS
The Managements 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
The Non-Banking Finance Companies (NBFCs) saw moderation in rate of asset growthrising delinquencies resulting in higher provisioning thereby impacting profitability.However comfortable capitalisation levels and conservative liquidity managementcontinues to provide comfort to the credit profile of well run NBFCs in spite of theimpact 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 Indias population and are emerging as strong intermediaries in theretail finance space. Going forward one should expect NBFCs to further strengthen theirpresence in retail finance and grow at a reasonably healthy pace.
THREATS RISKS & CONCERNS
Growth of the Companys asset book quality of assets and ability to raise fundsdepend significantly on the economy. Unfavorable events in the Indian economy can affectconsumer sentiment and in turn impact consumer decision to purchase financial products.Competition from a broad range of financial services providers unstable politicalenvironment and changes in Government policy/regulatory framework could impact theCompanys operations.
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. 1611020/- as compare to loss incurred by the Company during the previousyear. 97.92% income out of total income was earned through financing activity of theCompany.
The markets will continue to grow and mature leading to differentiation of products andservices. Each financial intermediary will have to find its niche in order to add value toconsumers. The Company 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 respect of providing financial andoperational information complying with applicable statutes safeguarding of assets of theCompany and ensuring compliance with corporate policies. The Audit Committee reviewsadherence to internal control systems and internal audit reports.
Your company is a BSE listed Non Banking Financial Company (NBFC). The Companystotal Revenue from Operations during the year is Rs.45502726/- and the net profit aftertax is Rs. 1611020/- as against Rs. 5137598/- and loss of Rs.7536772/- respectivelyin the previous year.
The Company always considers its human resources as a valuable asset and is committedtowards their development for continuous growth. The Company provides a fair and equitablework environment 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 thirteenpermanent employees as on 31st March 2016.
The Board of Directors acknowledges with appreciation the invaluable support providedby the Companys stakeholders auditors advisors and business partners all itscustomers for their patronage. Your board of directors records with sincere appreciationthe valuable contribution made by employees at all levels and looks forward to theircontinued commitment to achieve further growth and take up more challenges that theCompany has set for the future.