Kailash Auto Finance Ltd.
|BSE: 511357||Sector: Financials|
|NSE: N.A.||ISIN Code: INE410O01022|
|BSE 00:00 | 04 Mar||Kailash Auto Finance Ltd|
|NSE 05:30 | 01 Jan||Kailash Auto Finance Ltd|
|BSE: 511357||Sector: Financials|
|NSE: N.A.||ISIN Code: INE410O01022|
|BSE 00:00 | 04 Mar||Kailash Auto Finance Ltd|
|NSE 05:30 | 01 Jan||Kailash Auto Finance Ltd|
TO THE MEMBERS
KAILASH AUTO FINANCE LIMITED
Your Directors are pleased to present the Thirty Fourth (34th) Annual Report togetherwith the Audited Accounts of your Company for the Financial Year ended March 31 2019. Thesummarised financial performance of your Company is as follows:
(Rs. in Lakhs)
Some of the key highlights of your Company's performance during the year under revieware:
The profit before tax stood at Rs. 4.92 Lakhs against a profit of Rs. 6.03 Lakhsin the last year.
The net profit after tax stood at Rs. 5.87 Lakhs against a profit of Rs. 4.45Lakhs in the last year.
The financial statements of the Company have been prepared in accordance with thegenerally accepted accounting principles in India (Indian GAAP). The Company has preparedthese financial statements to comply in all material aspects with the accounting standardsnotified under Section 133 of the Companies Act 2013 read together with paragraph 7 ofthe Companies (Accounts) Rules 2014. The Financial Statements are prepared under thehistorical cost convention on an accrual basis. The accounting policies adopted in thepreparation of financial statements are consistent with those of previous year.
Your Company discloses standalone unaudited financial results on a quarterly basiswhich are subject to limited review and standalone audited financial results on an annualbasis.
Your Company has complied with all the norms prescribed by the Reserve Bank of India(RBI) including the Fair practices Anti Money Laundering and Know Your Customer (KYC)guidelines.
Your Directors has not recommended any Dividend for the Financial Year 2018-19.
AMOUNTS PROPOSED TO CARRY TO THE RESERVES
The Company has transferred 20% of its net profit to special reserve account during theyear under review.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THEFINANCIAL YEAR AND DATE OF REPORT
There have been no material changes and commitments affecting the financial positionof the company which have occurred between the end of the financial year of the company towhich the financial year relate and the date of this report.
SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS
There are no significant material orders passed by the Regulators or Courts orTribunals impacting the going concern status of your Company and its operations in future.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your Company's internal financial control ensures that all assets of the Company areproperly safeguarded and protected proper prevention and detection of frauds and errorsand all transactions are authorized recorded and reported appropriately. Your Company hasan adequate system of internal financial controls commensurate with its size and scale ofoperations procedures and policies ensuring orderly and efficient conduct of itsbusiness including adherence to the Company's policies safeguarding of its assetsprevention and detection of frauds and errors accuracy and completeness of accountingrecords and timely preparation of reliable financial information.
Your Company's vision mission and core values have laid the foundation for internalcontrols. On the administrative controls side your Company has a proper reportingstructure oversight committees and rigorous performance appraisal system to ensure checksand balances. On the financial controls side your Company has in place segregation ofduties and reporting mechanism to deter and detect misstatements in financial reporting.
Your Company's Internal Control System is commensurate with the nature of its businessand the size and complexity of its operations and ensures compliance with policies andprocedures. The Internal Control Systems are being constantly updated with new/revisedstandard operating procedures.
Further in accordance with the latest legislation your Company's Internal FinancialControls (IFC) have been reviewed and actions have been taken to strengthen financialreporting and overall risk management procedures.
Your Company has a dedicated and independent Internal Audit team reporting directly tothe Audit Committee of the Board. The Directors have laid down internal financial controlsto be followed by the Company and such policies and procedures have been adopted by theCompany for ensuring the orderly and efficient conduct of its business includingadherence to Company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting record andthe timely preparation of reliable financial information. The purpose scope authorityand responsibility of the Internal Audit team are approved by the Audit Committee.Internal Audit team influences and facilitates improvements in the control environment byconstantly evaluating the risk management and internal control systems.
Furthermore the Audit Committee of your Company evaluates and reviews the adequacy andeffectiveness of the internal control systems and suggests improvements. Significantdeviations are brought to the notice of the Audit Committee and corrective measures arerecommended for implementation. Based on the internal audit report process ownersundertake corrective action in their respective areas. All these measures help inmaintaining a healthy internal control environment.
The Company has a Code of Business Conduct for all employees and a clearly articulatedand internalized delegation of financial authority. These authority levels areperiodically reviewed by management and modifications if any are submitted to the AuditCommittee and Board for approval. The Company also takes prompt action on any violationsof the Code of Business Conduct by its employees.
A CEO/CFO Certificate signed by the CFO of the Company confirms the existence andeffectiveness of internal controls and reiterates their responsibilities to reportdeficiencies to the Audit Committee. The Audit Committee also reviews the Risk managementframework periodically and ensures it is updated and relevant. During the year underreview the Internal Financial Control Audit was carried out by the Statutory Auditorsthe Report of which is forming part of this Annual Report.
Being a non-deposit taking NBFC your Company has not accepted any deposits from thepublic/ members under Section 73 of the Companies Act 2013 read with Companies(Acceptance of Deposits) Rules 2014 during the year and within the meaning of theprovisions of the Non-Banking Financial Companies Acceptance of Public Deposits (ReserveBank) Directions 2016.
i. STATUTORY AUDITORS
In terms of the provisions of Section 139 of the Companies Act 2013 read withprovisions of the Companies (Audit and Auditors) Rules 2014 as amended M/s SDA &Associates Chartered Accountants (FRN: 120759W) Mumbai was appointed as the Auditors ofthe Company for a consecutive period of 5 (Five) years from the conclusion of the 32ndAnnual General Meeting held in the year 2017 until conclusion of the 37thAnnual General Meeting scheduled to be held in the year 2022.
The Members may note that consequent to the changes made in the Companies Act 2013 andthe Companies (Audit and Auditors) Rules 2014 by the Ministry of Corporate Affairs (MCA)vide notification dated May 7 2018 the proviso to Section 139(1) of the Companies Act2013 read with explanation to sub-rule 7 of Rule 3 of the Companies (Audit and Auditors)Rules 2014 the requirement of ratification of appointment of Auditors by the Members atevery AGM has been done away with. Therefore the Company is not seeking any ratificationof appointment of M/s SDA &
Associates Chartered Accountants as the Statutory Auditors of the Company by themembers at the ensuing Annual General Meeting.
Your Company has received a Certificate from M/s SDA & Associates CharteredAccountants confirming their eligibility to continue as Auditors of the Company in termsof provisions of Section 141 of the Companies Act 2013 and the rules made thereunder.They have also confirmed that they hold a valid certificate issued by the Peer ReviewBoard of the ICAI as required under the provisions of Regulation 33 of ListingRegulations.
ii. SECRETARIAL AUDITOR
In terms of Section 204 of the Companies Act 2013 read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hadappointed Ms. Kavita Raju Joshi Practicing Company Secretary as the Secretarial Auditorto conduct an audit of the Secretarial Records of the Company.
The Secretarial Audit Report for the financial year ended March 31 2019 is annexedherewith as [Annexure-A] to this report.
QUALIFICATION RESERVATION OR ADVERSE REMARK IN THE AUDITOR'S REPORTS AND SECRETARIALAUDIT REPORT
There is no qualification reservation or adverse remark made by the Auditors in theirReports to the Financial Statements or by the Secretarial Auditors in their SecretarialAudit Report for the Financial Year ended March 31 2019.
DETAILS OF SUBSIDIARY/ JOINT VENTURES/ASSOCIATE COMPANIES
The Company does not have any subsidiary/joint ventures/associate companies.
The Authorised Share Capital of the Company stands at Rs. 750000000/- divided into10000000 (One Crore) Equity Shares of Rs. 10/- each; 600000000 (Sixty Crores) EquityShares of Re. 1/- each and 500000 (Five Lakhs) Preference Shares of Rs. 100/- each. Atpresent the Issued Subscribed and Paid Up Share Capital of your Company is Rs.587060083/- divided into 587060083 Equity Shares of Re. 1/- each fully paid-up.
PROMOTERS' GROUP SHAREHOLDING
As on March 31 2019 the total shareholding of the Promoters' Group of your Company is0.10 % and none of the Promoter/Promoters' Group shareholding is under pledge. Further incompliance with the Regulation 31(2) of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 the entire shareholding ofpromoter(s) and promoter group is in dematerialised form.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return is prepared in Form MGT-9 as per the provisions of theCompanies Act 2013 and Rule 12 of the Companies (Management and Administration) Rules2014 and the same is annexed as [Annexure-B] and forms an integral part of this Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
a) Particulars of Conservation of Energy Technology Absorption
The Provisions of Section 134(m) of the Act relating to conservation of energy andtechnology absorption do not apply to this Company as the Company has not carried out anymanufacturing activities.
b) Foreign Exchange Earnings and Outgo
During the year under review there was no foreign exchange outgo nor was any foreignexchange earned.
DIRECTOR'S & KEY MANAGERIAL PERSONNEL
Your Company has a duly constituted Board of Directors which is in compliance with therequirements of the Companies Act 2013 schedules thereto and rules framed there underand also in terms of the provisions of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 and provisions of the Articlesof Association of the Company.
a) Declaration by Independent Directors
All the Independent Directors have given a declaration that they meet the criteria ofIndependence as laid down under Section 149(6) of the Companies Act 2013 read with therules made there under and Regulation 16(1)(b) of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirement) Regulations 2015.
b) Familiarisation Programme undertaken for Independent Directors
The Independent Directors are familiarised with the Company their roles rightsresponsibilities in the Company nature of the industry in which the Company operatesbusiness model of the Company etc. On appointment the Independent Director is issued aLetter of Appointment setting out in detail the terms of appointment dutiesresponsibilities and expected time commitments. The Director is also explained in detailthe various compliances required from him/her as a Director under the various provisionsof the Companies Act 2013 Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirement) Regulations 2015. The details of familiarisation programmeare available on the website of the Company viz. www.kailfin.com .
c) Non-Independent Director
In accordance with the provisions of Section 152 of the Companies Act 2013 Mr. DeepakKunjbihari Dave (DIN: 06776698) Director is liable to retire by rotation and beingeligible offers himself for re-appointment. The Board recommends his appointment with aview to avail his valuable advices and wise counsel.
A brief profile of the above Director seeking re-appointment required under Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 will be provided in the Notice calling Annual General Meeting of theCompany.
None of the Directors of the Company are disqualified for being appointed as Directorsas specified in Section 164 (2) of the Companies Act 2013 and rule 14(1) of the Companies(Appointment and Qualification of Directors) Rules 2014.
d) Changes in Directorship/Key Managerial Personnel during the year
Mr. Praveen Paliwal (DIN: 06878483) & Mr. Shivsagar Mahanguram Kanojia (DIN:06908833) were appointed as Directors of the Company by the Board at their meeting held onAugust 14 2018.
Ms. Shafali Temani Qualified Company Secretary was appointed as the Whole TimeSecretary of the Company with effect from February 11 2019.
Ms. Vanita Mansukh Parmar (DIN: 05345249) resigned from the Directorship of the Companywith effect from August 14 2018. Mr. Dipan Patel Jesingbhai (DIN: 05359769) resigned fromthe directorship of the Company with effect from December 31 2018. Ms. Runel Saxenaresigned from the post of Whole Time Secretary of the Company with effect from February11 2019. The Board places on record its sincere appreciation and gratitude for theassistance and guidance provided by them during their association with the Company.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
A total of Seven (7) Meetings of the Board of Directors of your Company were heldduring the year under review. The maximum interval between two meetings did not exceed 120days as prescribed in the Companies Act 2013 and in the Securities and Exchange Boardof India (Listing Obligations and Disclosure Requirements) Regulations 2015. Details ofall Board/Committee Meetings are given in the Corporate Governance Report.
COMMITTEES OF THE BOARD
The Company has constituted/re-constituted various Board level committees in accordancewith the requirements of Companies Act 2013. Details of all the Committees along withcomposition and meetings held during the year under review are provided in the CorporateGovernance Report.
The composition and terms of reference of the Audit Committee has been furnished in theCorporate Governance Report. There have been no instances where the Board has not acceptedthe recommendations of the Audit Committee.
NOMINATION AND REMUNERATION COMMITTEE
The composition and terms of reference of the Nomination and Remuneration Committee hasbeen furnished in the Corporate Governance Report.
STAKEHOLDERS RELATIONSHIP COMMITTEE
The composition and terms of reference of the Stakeholders Relationship Committee hasbeen furnished in the Corporate Governance Report.
DIRECTORS APPOINTMENT & REMUNERATION POLICY
The Board of Directors has framed a policy which lays down a framework in relation toremuneration of Directors Key Managerial Personnel and Senior Management of the Company.This policy also lays down criteria for selection and appointment of Board Members. Thedetails of this policy are explained and annexed as [Annexure- C] and forms an integralpart of this Report.
WHISTLE BLOWER POLICY/VIGIL MECHANISM
Your Company has formulated a codified Whistle Blower Policy incorporating theprovisions relating to Vigil Mechanism in terms of Section 177 of the Companies Act 2013and Regulation 22 of Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 in order to encourage Directors and Employeesof your Company to escalate to the level of the Audit Committee any issue of concernsimpacting and compromising with the interest of your Company and its stakeholders in anyway. Your Company is committed to adhere to highest possible standards of ethical moraland legal business conduct and to open communication and to provide necessary safeguardsfor protection of employees from reprisals or victimisation for whistle blowing in goodfaith. The said Policy is available on your Company's website www.kailfin.com.
PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
Your Company is committed to provide and promote a safe healthy and congenialatmosphere irrespective of gender caste creed or social class of the employees. YourCompany in its endeavour to provide a safe and healthy work environment for all itsemployees has developed a policy to ensure zero tolerance towards verbal physicalpsychological conduct of a sexual nature by any employee or stakeholder that directly orindirectly harasses disrupts or interferes with another employee's work performance orcreates an intimidating offensive or hostile environment such that each employee canrealize his / her maximum potential.
Your Company has put in place a 'Policy on Prevention of Sexual Harassment' as per TheSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.The Policy is meant to sensitize the employees about their fundamental right to have safeand healthy environment at workplace. As per the Policy any employee may report his / hercomplaint to the Audit Committee and to the Board of Directors of the Company. The saidPolicy is available on your Company's website www.kailfin.com.
Your Company affirms that during the year under review adequate access was provided tocomplainant if any who wished to register a complaint under the policy.
During the year your Company has not received any complaint on sexual harassment.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
Your Company is exempted from the applicability of the provisions of Section 186 of theCompanies Act 2013 read with Rule 11 of the Companies (Meetings of Board and its Powers)Rules 2014 as your Company is a Non- Banking Finance Company registered with Reserve Bankof India.
RELATED PARTY TRANSACTIONS
During the financial year ended March 31 2019 all transactions with the RelatedParties as defined under the Companies Act 2013 read with Rules framed thereunder were inthe 'ordinary course of business' and 'at arm's length' basis. Your Company does not havea 'Material Subsidiary' as defined under Regulation 16(1)(c) of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015. Your Board shall formulate a Policy to determine Material Subsidiary as and whenconsidered appropriate in the future.
Your Company has formulated a Policy on Related Party Transactions and the said Policyhas been uploaded on the website of the Company at www.kailfin.com.
During the year under review your Company did not enter into any Related PartyTransactions which require prior approval of the Members. All Related Party Transactionsof your Company had prior approval of the Audit Committee and the Board of Directors asrequired under the Listing Regulations. Subsequently the Audit Committee and the Boardhave reviewed the Related Party Transactions on a quarterly basis. During the year underreview there has been no materially significant Related Party Transactions havingpotential conflict with the interest of the Company.
Since all Related Party Transactions entered into by your Company were in the ordinarycourse of business and also on an arm's length basis therefore details required to beprovided in the prescribed Form AOC - 2 is not applicable to the Company. Necessarydisclosures have been made in the Notes to the Financial Statements for the year endedMarch 31 2019.
DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL ANDEMPLOYEES:
A statement containing the details of the Remuneration of Directors Key ManagerialPersonnel (KMP) and Employees as required under Section 197(12) of the Companies Act 2013read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 is given as [Annexure-D] forming part of this Report.
The Company has no employee drawing a remuneration of Rs. 6000000/- (Rupees SixtyLakhs) per annum or part thereof in terms of the provisions of Section 197(12) of theCompanies Act 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014.
CORPORATE GOVERNANCE REPORT
Your Company has always practised sound corporate governance and takes necessaryactions at appropriate times for enhancing and meeting stakeholders' expectations whilecontinuing to comply with the mandatory provisions of Corporate Governance.
As per Regulation 34(3) read with Schedule V of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 a separatesection on corporate governance practices followed by the Company together with acertificate confirming compliance is given as [Annexure-E] and forms an integral part ofthis Report.
MANAGEMENT DISCUSSION & ANALYSIS
The Management Discussion and Analysis Report on the operations of the Company asrequired under Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 is provided in a separate section as [Annexure-F] andforms an integral part of this Report.
Risk management is embedded in your Company's operating framework. Your Companybelieves that managing risks helps in maximizing returns. The Company's approach toaddressing business risks is comprehensive and includes periodic review of such risks anda framework for mitigating controls and reporting mechanism of such risks. The RiskManagement framework is reviewed periodically by the Board and the Audit Committee. TheAudit Committee is responsible for reviewing the risk management plan and ensuring itseffectiveness. The major risks identified by the businesses and functions aresystematically addressed through mitigating actions on a continual basis.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 (including any statutorymodification(s) or re-enactment(s) for the time being in force) the Directors of yourCompany confirm that:
i. in the preparation of the Annual Accounts for the financial year ended March 312019 the applicable Accounting Standards and Schedule III of the Companies Act 2013(including any statutory modification(s) or re-enactment(s) for the time being in force)have been followed and there are no material departures from the same;
ii. the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2019 and of the profit& loss of the Company for the Financial Year March 31 2019;
iii. the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013(including any statutory modification(s) or re-enactment(s) for the time being in force)for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv. the annual accounts have been prepared on a 'going concern' basis;
v. proper internal financial controls laid down by the Directors were followed by yourCompany and that such internal financial controls are adequate and operating effectively;and
vi. proper systems to ensure compliance with the provisions of all applicable laws werein place and that such systems were adequate and operating effectively.
Your Directors wish to place on record their appreciation for the contribution made bythe employees at all levels but for whose hard work and support your Company'sachievements would not have been possible. Your Directors also wish to thank itscustomers dealers agents suppliers investors and bankers for their continued supportand faith reposed in the Company.