FOR THE YEAR ENDED MARCH 31 2020
Your Directors have pleasure in presenting their Eleventh Annual Report on the businessand operations of the Company together with Audited Statement of Accounts for the yearended March 31 2020.
FINANCIAL PERFORMANCE :
| || ||(Rs. in Mln.s) |
|Particulars ||Year ended ||Year ended |
| ||March 31 2020 ||March 31 2019 |
|Total Income ||718.603 ||505.464 |
|Total Expenditure ||67.478 ||45.457 |
|Exceptional items ||35.806 ||(4.196) |
|Profit before taxation ||615.319 ||464.203 |
|Tax Expenses ||30.208 ||31.528 |
|Profit after Tax ||585.111 ||432.675 |
|Balance of Profit/(Loss) from previous year ||3317.499 ||2971.359 |
|Balance available for appropriation ||3902.610 ||3404.034 |
|Appropriations : || || |
|Transfer to Reserve Fund in terms of Section 45-IC of || || |
|the Reserve Bank of India Act 1934 ||(117.022) ||(86.535) |
|Balance carried to Balance Sheet ||3784.815 ||3317.499 |
KEY FINANCIAL RATIOS
Details of changes in key financial ratios including significant changes i.e. change of25% or more as compared to the immediately previous financial year along with detailedexplanations:
|Particulars ||FY 2019-20 ||FY 2018-19 ||Explanation for significant change |
|Debtor Turnover ||N.A. ||N.A. ||N.A. |
|Inventory Turnover ||N.A. ||N.A. ||N.A. |
|Interest Coverage Ratio ||NIL ||NIL ||N.A. |
|Current Ratio ||547.63 ||987.56 ||N.A. |
|Debt Equity Ratio ||NIL ||NIL ||N.A. |
|Operating Profit Margin (%) ||90.61 ||91.01 ||N.A. |
|Net profit Margin (%) ||81.42 ||85.60 ||N.A. |
Details of any change in Return on Net Worth as compared to the immediately previousfinancial year:
|Particulars || |
| ||2019-20 ||2018-19 ||2019-20 ||2018-19 |
|Return on Net Worth (%) ||6.23 ||3.19 ||8.43 ||6.16 |
Return on net worth is computed as net profit by average net worth. The details forchange if any in return on net worth are explained in relevant sections above.
The paid-up Equity Share Capital as on 31st March 2020 stood at Rs.188.338Mln. During the year under review the Company has not issued shares with differentialvoting rights nor has granted any stock options or sweat equity. As on 31stMarch 2020 none of the Directors of the Company hold instruments convertible into equityshares of the Company.
Your Directors do not recommend any dividend on the equity shares for the year endedMarch 31 2020.
MANAGEMENT DISCUSSION AND ANALYSIS
The main object of the Company is to make strategic investments in the Kalyani GroupCompanies. The Company is a Non Deposit taking Core Investment Company as defined in theCore Investment Companies (Reserve Bank) Directions 2011. Since the Company is not aSystemically Important Non Deposit taking Core Investment Company it is not required toobtain Certificate of Registration under Sec. 45-IA of the Reserve Bank of India Act1934.
The outbreak of COVID-19 turned into global pandemic in March 2020 and held the worldat its standstill. Consequent lockdown announced across India resulted in temporaryclosure of offices of the Company in line with the government/ local authorities'directions.
Your Company as a part of its safety policies ensured that its employees are workingfrom home. As the restrictions were eased out your Company while closely monitoring thesituation and following safety guideline reopened its offices.
During the Financial Year under review your Company earned total income of Rs.718.603Mln. (previous year Rs.505.464 Mln.). The net profit after tax is Rs.585.111 Mln.(previous year Rs.432.675 Mln.).
OPERATIONS OF THE COMPANY
The main operations of the Company are that of investments and majority of theinvestments of the Company are in the nature of strategic investments in Kalyani GroupCompanies. The investment pattern of the Company also complies with the requirement forthe Company continuing to qualify as a Non Deposit taking Core Investment Company. Themain source of income for the Company is in the form of dividends as declared by thesecompanies.
As on March 31 2020 the Company had 2 Key Managerial Personnel on deputationincluding the CEO / CFO & Company Secretary.
CONCERNS AND THREATS
3 Fluctuations in the securities market and global economic scenario may pose a riskof devaluation of the investments made by the Company.
3 Main source of income for the Company is dividend from the Kalyani Group Companies.
3 The risks and concerns associated with the businesses / operations of these investeecompanies which may impact the performance of these companies could result in variationin dividends declared by these companies.
3 Non recovery of principal of the amounts lent and interest thereon.
PROSPECTS FOR THE CURRENT YEAR
The current economic slowdown and COVID-19 pandemic in India and globally has posed newchallenges to the Company. The Company is taking all efforts to mitigate these challenges.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has adequate internal control systems to ensure operational efficiency andaccuracy in financial reporting and compliance of various laws and regulations.
The internal control system is supported by the internal audit process. The internalaudit is conducted by an Independent Chartered Accountant. The Audit Committee of theBoard reviews the Internal Audit process and the adequacy and effectiveness of internalaudit and controls periodically.
SAFETY HEALTH AND ENVIRONMENT
The Company ensures safety of all its employees working at different places.
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 lawsand regulations. Actual results might differ materially from those either expressed orimplied.
SUBSIDIARY COMPANIES JOINT VENTURES & ASSOCIATES
The Company does not have any subsidiary company as on March 31 2020. The informationof joint ventures and associates is given in the annual accounts for the year ended March31 2020 enclosed and forming part of the Annual Report.
PARTICULARS OF INFORMATION FORMING PART OF THE BOARD'S REPORT PURSUANT TO SECTION 134OF THE COMPANIES ACT 2013 RULE 8 OF THE COMPANIES (ACCOUNTS) RULES 2014 AND RULE
5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2 0 14
The details are given in 'Annexure I'
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of Annual Return in Form MGT - 9 is annexedherewith as 'Annexure II' to this Report.
NUMBER OF MEETINGS OF THE BOARD
During the year under review seven Board Meetings were convened and held. The detailsof which are given in the Corporate Governance Report. The intervening gap between theMeetings was within the period prescribed under the Companies Act 2013 and the SecuritiesExchange Board of India (Listing Obligations & Disclosure Requirements) Regulations2015 hereinafter called "Regulations 2015".
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirements of Section 134(5) of the Companies Act 2013 in respectof Directors' Responsibility Statement your Directors' state that:
a) in the preparation of the Annual Financial Statements for the year ended March 312020 the applicable accounting standards have been followed along with the properexplanation relating to material departures;
b) accounting policies as mentioned in Notes to the Financial Statements have beenselected and applied consistently.
Further judgements and estimates have been made that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company as at March 31 2020and of the profit of the Company 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.
A STATEMENT ON DECLARATION GIVEN BY 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 Regulations2015 and also confirmed that they have complied with the Code of Independent Directorsprescribed in Schedule IV of The Companies Act 2013.
The Company has laid down a Code for the Board of Directors and Senior Management ofthe Company. The said Code is available on the website of the Company viz.www.bfilpune.com
All the Board Members and Senior Management Personnel of the Company have affirmedcompliance with the Code of Conduct.
COMPANY'S POLICY ON DIRECTORS' AND KMP'S APPOINTMENT AND REMUNERATION
Director's appointment and remuneration is done as per the policy for selection andappointment of Directors Key Managerial Personnel and Senior Management Personnel andtheir remuneration. The policy is appended as 'Annexure III' to this Report
ACCOUNTS AND AUDIT
a . Statutory Auditors
M/s. P. G. Bhagwat Chartered Accountants Pune (FRN.101118W) are the auditors of theCompany and will continue the audit for Financial year 2020-21.
b. Secretarial Audit
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 appointedM/s. SVD & Associates Company Secretaries (Membership No. FCS 1321 CP No. 965) toundertake the Secretarial Audit of the Company for the year 2019-20. The Report of theSecretarial Audit is annexed herewith as 'Annexure IV' and the Secretarial ComplianceReport as 'Annexure V' to this Report.
c. Consolidated Accounts
The Consolidated Accounts for the year ended 31st March 2020 are enclosed.Further a statement containing the salient features of the financial statements ofassociate companies and joint ventures in the prescribed Form AOC-1 is appended as'Annexure VII' which forms part of this Report.
The Company will make the said financial statements and related detailed informationavailable upon the request by any Member of the Company. These financial statements willalso be kept open for inspection by any Member at the Registered Office of the Company.Pursuant to the provisions of Section 136 of the Companies Act 2013 the financialstatements of the Company consolidated financial statements along with relevant documentsare available on the website of the Company.
EXPLANATION ON COMMENTS ON STATUTORY AUDITORS' AND SECRETARIAL AUDITORS' REPORTS
There are no qualifications reservations or adverse remarks or disclaimers made byM/s. P. G. Bhagwat Statutory Auditors in their Audit Report. M/s. SVD & AssociatesPracticing Company Secretary in their Secretarial Audit Report have made certainqualifications. The auditors qualifications and Boards explanation thereto are summarizedas under:
|Auditors Qualifications ||Boards' explanation |
|Secretarial Audit - || |
|I. The Company has not attached form AOC-1 to the Director's Report as prescribed by the first proviso to Sub-section 3 of Section 129 of the Act read with Rule 5 Companies (Accounts) Rules 2014. ||All the information contained in form AOC1 was given in the Directors' Report and annual accounts. |
|II. The Company has spent Rs. 5000000/- towards educational initiative being a CSR spend during the year. The Company has paid an advance of Rs.735000/- for health care expenses being balance CSR spend which got completed in April - May 2020. ||The Company had planned for certain additional CSR activities in the month of March 2020 and had paid advance for the same before 31/03/2020. However due to Covid-19 the CSR activities could not be completed before 31/03/2020. The CSR activity was completed and amounts were fully expended in April - May 2020. |
|a. The Disclosure of Related party Transactions for the half year ended 30th September 2019 was submitted to the stock Exchanges beyond the time period prescribed under Sub-regulation 9 of Regulation 23 of LODR. ||The delay was accidental |
|b. The Audited Consolidated Financial statements for the quarter and year ended on 31st March 2019 were submitted to the Stock Exchanges beyond the time period prescribed under Regulation 33 of LODR. ||The finalization and limited review of accounts by some of the associates / joint ventures got delayed due to some unavoidable circumstances leading to delay in publishing the consolidated results by the Company. |
|c. The Consolidated Financial Results along with the limited review report for the quarter ended on 31st December 2019 were submitted to the Stock Exchanges beyond the time period prescribed under Regulation 33 of LODR. ||The finalization and limited review of accounts by some of the associates / joint ventures got delayed due to some unavoidable circumstances leading to delay in publishing the consolidated results by the Company. |
|d. The Copy of the Annual Report for the year ended 31st March 2019 required to be submitted to the stock exchange during the period under review in terms of Regulation 34 of LODR was submitted beyond the time prescribed under the said Regulation . ||The delay was due to connectivity issues faced during the period. |
|III.SEBI Circular No. CIR/CFD/CMD-1/142/2018 dated 20.11.2018 requires that if any listed entity does not submit its financial results in accordance with the timelines specified in Regulation 33 of LODR the listed entity shall disclose detailed reasons for such delay to the stock exchanges within one working day of the due date of submission for the results. ||The reasons for delay was due to delay in finalization of quarterly results by some of the associates and Joint ventures. This fact was mentioned as a footnote in the standalone financial results. |
| ||The Company will henceforth give this information by way of a separate communication |
|However the Company has not submitted the reasons for delay in submission of consolidated financial results for the quarter and year ended 31st March 2019 and for the quarter ended 31st December 2019. || |
PARTICULARS OF LOANS GUARANTEES OR INVESTMENT UNDER SECTION 186
During the year the Company has invested Rs.120 Mln (net) in preference shares of twocompanies. The closing balances of investments which would be covered under Section 186 ofthe Companies Act 2013 are disclosed in the Schedule of Non-Current Investments in theFinancial Statements. The details of loans and guarantees if any are in the financialstatement of 2019-20.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SUBSECTION(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 contracts or arrangementsentered into by the Company with Related Parties have been done at arm's length and are inthe ordinary course of business. Hence no particulars are being provided in Form AOC - 2.Related Party Disclosures as per IND AS - 24 have been provided in Note No. 31 to theFinancial Statements.
STATE OF COMPANY'S AFFAIRS
Discussion on state of Company's affairs has been covered in the Management Discussionand Analysis.
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.
MATERIAL CHANGES AND COMMITMENTS BETWEEN THE DATE OF THE BALANCE SHEET AND THE DATE OFREPORT
There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the Financial Year of the Company towhich the Financial Statements relate and the date of the report except as disclosedelsewhere in this report.
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 technologyabsorption as required under Section 134 (3) (m) of the Companies Act 2013 read withRules thereunder.
B. Foreign exchange earnings and outgo
|Sr. No. ||Particulars ||Amount in $ |
|i ||Foreign Exchange earned in terms of actual inflows during the year ||Nil |
|ii ||Foreign Exchange outgo during the year in terms of actual outflows ||Nil |
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.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has constituted a Corporate Social Responsibility (CSR) Committee inaccordance with Section 135 of the Companies Act 2013. The details of the CSR Policy andinitiatives taken by the Company towards CSR during the year are annexed as 'Annexure VI'to this Report.
Pursuant to provisions of the Companies Act 2013 Rules thereunder and 'Regulations2015' the Board has carried out evaluation of its own performance and that of itsCommittees and individual Directors. Interested Directors did not participate for theirevaluation.
PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES ASSOCIATES AND JOINTVENTURE COMPANIES:
The information is given at the relevant places in the Financial Statements.
CHANGE IN THE NATURE OF BUSINESS IF ANY
There has been no change in the nature of business during the Financial Year underreview.
DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNEDDURING THE YEAR
Directors appointed during the year
|Name of Director ||Designation ||Term of appointment |
|Mr. A. B. Kalyani ||Director ||Re-appointed with effect from September 25 2019 subject to retirement by rotation. |
|Mr. S. G. Joglekar ||Independent Director ||Appointed in Annual General Meeting held on September 25 2019 w.e.f. April 1 2019. |
|Mr. B. S. Mitkari ||Non Independent ||Appointed in Annual General Meeting held on |
| ||Director ||September 25 2019 w.e.f. April 1 2019 subject to retirement by rotation. |
|Mr. M. U. Takale ||Independent Director ||Appointed in Annual General Meeting held on September 25 2019 w.e.f. September 16 2019. |
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under subsection (6) of Section 149 of the Companies Act 2013 and 'Regulations 2015'. The Companyhas received declarations from all Directors confirming that they are not disqualified /debarred from being appointed / reappointed as Director.
Employees designated as Key Managerial Personnel (KMP) during the year
Directors' and KMP's resigned during the year
None of the Directors and KMPs resigned during the year ended March 31 2020.
Directors proposed to be appointed / re-appointed at the ensuing Annual General Meeting
1) Mr. A. B. Kalyani (DIN : 00089430) retires by rotation at the ensuing Annual GeneralMeeting and being eligible offers himself for re-appointment.
2) Ms. A. A. Sathe (DIN : 06925030) whose term as an Independent Director expires on 18thSeptember 2020 is proposed to be re-appointed for a further term of five years. Aresolution to consider and approve her appointment is included in the Notice of 11thAnnual General Meeting
The brief resumes and other details relating to Directors who are proposed to bere-appointed as required to be disclosed under 'Regulations 2015' form part of the Notesand Statement setting out material facts annexed to the Notice of the Annual GeneralMeeting.
NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINT VENTURESOR ASSOCIATE COMPANIES DURING THE YEAR
DETAILS OF DEPOSITS WHICH ARE NOT IN COMPLIANCE WITH THE REQUIREMENTS OF CHAPTER V OFTHE COMPANIES ACT 2013
None. The Company has not accepted Public Deposits under Chapter V of the CompaniesAct 2013.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
The Company has neither received nor is aware of any such order from Regulators Courtsor Tribunals during the year.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS
The Company has suitable internal control system comprising of proper checks andbalances policies and procedures. This includes code of conduct whistle blower policyMIS and internal audit mechanism.
The Audit Committee along with Management review the internal audit and internalcontrols on a regular basis.
COMPOSITION OF AUDIT COMMITTEE
The composition of the Audit Committee has been mentioned in the Corporate GovernanceReport annexed to this Report.
The Company has formulated and implemented the Whistle Blower Policy / Vigil Mechanism.This has provided a mechanism for directors and employees of the Company and other personsdealing with the Company to report to the Chairman of the Audit Committee; any instance ofunethical behavior actual or suspected fraud or violation of the Company's code ofconduct. The aforesaid policy has also been uploaded on the Company's website.
A Cash Flow Statement for the year ended March 31 2020 is attached to the BalanceSheet.
A report on the Corporate Governance along with the certificate of compliance from theAuditors forms part of the Annual Report.
OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
In terms of provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 the Company has formulated a Policy to preventSexual Harassment of Women at Workplace. During the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013
1 . Statutory Auditors
At the Ninth Annual General Meeting held on 1st September 2018 M/s. P. G.Bhagwat Chartered Accountants (Firm Registration No.101118W) were appointed as StatutoryAuditors of the Company to hold office till the conclusion of 14th AnnualGeneral Meeting.
2 . Secretarial Audit
Pursuant to the provisions of Pursuant to the provisions of Section 204 of theCompanies Act 2013 and the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 the Company has appointed M/s. SVD & Associates PracticingCompany Secretaries to undertake the Secretarial Audit of the Company for the year2019-20. The Secretarial Audit Report is annexed herewith as 'Annexure IV'.
M/s. SVD & Associates Practicing Company Secretaries has also submittedSecretarial Compliance Report as laid down in SEBI Circular CIR/CFD/CMD1/27/2019 dated 8thFebruary 2019 and has also confirmed that the Company has complied with of all applicableSEBI Regulations and circulars / guidelines issued thereunder for the Financial Year2019-20 subject to the observations given therein.
3 . SECRETARIAL STANDARDS
During the year under review the Company has complied with Secretarial Standardsissued by The Institute of Company Secretaries of India and approved by the CentralGovernment under Section 118(10) of the Companies Act 2013 to the extent applicable.
4 . CERTIFICATE FROM PRACTICING COMPANY SECRETARY:
The Company has received a certificate from Mr. Sunny Warghade Company Secretaryconfirming that none of the Directors on the Board of the Company have been debarred ordisqualified by MCA or SEBI or any such statutory authority from being appointed /continuing as Director and the same is appended as 'Annexure VIII' to the Directors'Report.
Your Directors wish to place on record their appreciation for the contribution madeand support provided to the Company by the shareholders employees and bankers during theyear under the report.
For and on behalf of the Board of Directors
| ||B.B. Hattarki ||M.U. Takale |
|Place : Pune ||Director ||Director |
|Date : 28th July 2020 ||DIN:00145710 ||DIN:01291287 |