TO THE MEMBERS
KAILASH AUTO FINANCE LIMITED
Your Directors are pleased to present the Thirty Second (32nd) Annual Report togetherwith the Audited Accounts of your Company for the Financial Year ended March 31 2017. Thesummarised financial performance of your Company is as follows: (Rs. in Lakhs)
|Particulars ||Year ended March 31 2017 ||Year ended March 31 2016 |
|Total Income ||328.04 ||3375.08 |
|Total Expenditure ||343.81 ||3369.85 |
|Profit/ (Loss) before Taxation ||(15.77) ||5.23 |
|Tax Expense ||(0.12) ||1.62 |
|Provision for Standard Assets ||- ||0.25 |
|Profit/ (Loss) for the period ||(15.64) ||3.36 |
|Brought forward from previous year ||(200.93) ||(204.29) |
|Surplus/(Deficit) carried to Balance Sheet ||(216.58) ||(200.93) |
The Company has incurred a loss of Rs. 15.77 Lakhs during the year 2016-17 as comparedto a profit of Rs. 5.23 Lakhs before tax in the previous year 2015-16.
Due to loss your Directors has not recommended any Dividend for the Financial Year2016-17.
AMOUNTS PROPOSED TO CARRY TO THE RESERVES
The Company has not transferred any amount to reserve account during the year underreview.
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
The Companys Internal Control Systems are commensurate with the nature size andcomplexity of its business and ensure proper safeguarding of assets maintaining properaccounting record and providing reliable financial information.
The Directors have laid down internal financial controls to be followed by the Companyand such policies and procedures have been adopted by the Company for ensuring the orderlyand efficient conduct of its business including adherence to Companys policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting record and the timely preparation of reliablefinancial information.
An external independent firm carries out the internal audit of the Company operationsand reports its findings to the Audit Committee on a regular basis. Internal Risk andControl function also evaluates organisational risk along with controls required formitigating those risks. Internal Audit provides assurance on functioning and quality ofinternal controls along with adequacy and effectiveness through periodic reporting.
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.
The Audit Committee reviews the effectiveness of the internal control system and alsoinvites senior management personnel to provide updates on operating effectiveness andcontrols from time to time. A CEO/CFO Certificate signed by the Director of the Companyconfirms the existence and effectiveness of internal controls and reiterates theirresponsibilities to report deficiencies to the Audit Committee. The Audit Committee alsoreviews the Risk management framework periodically and ensures it is updated and relevant.During the year under review the Internal Financial Control Audit was carried out by theStatutory Auditors the 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 (Acceptanceof Deposits) Rules 2014 during the year and within the meaning of the provisions of theNon-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions1998.
AUDITORS i. STATUTORY AUDITORS
Pursuant to the provisions of Section 139 of the Companies Act 2013 and Rules framedthere under the term of Mr. Anil Agrawal Chartered
Accountants as the Statutory Auditors of the Company will conclude from the close ofthe ensuing Annual General Meeting of the Company.
The Board places on record its appreciation to the services rendered by Mr. AnilAgrawal as the Statutory Auditors of the Company.
Subject to the approval of the Members the Board of Directors of the Company hasrecommended the appointment of M/s SDA & Associates Chartered Accountants (FirmRegistration No. 120759W) as the Statutory Auditors of the Company pursuant to Section139 of the Companies Act 2013.
Accordingly the Board recommends the resolution in relation to appointment ofStatutory Auditors for the approval by the shareholders of the Company. There is no auditqualification for the year under review. 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 2017 is annexedherewith as [Annexure-A] to this report.
DETAILS OF SUBSIDIARY/ JOINT VENTURES/ASSOCIATE COMPANIES
The Company does not have any subsidiary/joint ventures/associate companies.
The Authorised Share Capital of your Company stands at Rs. 750000000/-. At presentthe 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.
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 thisReport.
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.
DIRECTORS & 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. DipanPatel Jesingbhai (DIN: 05359769) 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. Murali Manohar Sarda resigned from the post of Whole Time Secretary and ComplianceOfficer of the Company with effect from November 14 2016. The Board places on record itsappreciation and gratitude for the assistance and guidance provided by him during histenure as the Secretary of the Company.
Ms. Runel Saxena was appointed as Whole Time Secretary and Compliance Officer of theCompany with effect from March 31 2017.
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 anintegral part of this Report.
WHISTLE BLOWER POLICY/VIGIL MECHANISM
The Board has adopted a Whistle Blower Policy to maintain highest standards ofprofessionalism honesty integrity ethical behaviour and to provide a vigil mechanismfor Directors/Employees to voice concern in a responsible and effective manner regardingunethical matters involving serious malpractice abuse or wrongdoing within theorganisation. The Company affirms that during the year no personnel have been deniedaccess to the Audit Committee. The said policy may also be referred to at the website ofthe Company viz www.kailfin.com.
PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company as an organization is committed to provide a healthy environment to allemployees and thus does not tolerate any discrimination and/or harassment in any form. TheCompany has in place a Prevention of Sexual Harassment Policy in line with therequirements of the Sexual Harassment of Women at work place (Prevention Prohibition andRedressal) Act 2013.
The following is a summary of sexual harassments complaints received and disposed offduring the financial year ended March 31 2017:
No. of Complaints received : NIL
No. of Complaints disposed off : Not Applicable
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
The Company has complied with Section 186 of the Companies Act 2013 and Rules framedthere under.
The Company has not given any guarantee or provided security during the year underreview.
RELATED PARTY TRANSACTIONS
A Related Party Policy has been devised by the Board of Directors for determining themateriality of transactions with related parties and dealings with them. The said Policymay be referred to at the website of the Company viz. www.kailfin.com.
There are no contracts or arrangements entered into by the Company during the yearunder review with Related Parties referred to in Section 188(1) of the Companies Act2013. There are no materially significant related party transactions made by the Companywith promoters directors key managerial personnel or other designated person which mayhave a potential conflict with the interest of the Company at large.
Necessary disclosures required under the Accounting Standards (AS-18) have been made inthe Notes to Financial Statements.
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
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 integralpart of this 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]and forms an integral part of this Report.
Risk management is embedded in your Companys operating framework. Your Companybelieves that managing risks helps in maximizing returns. The Companys 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 yearended March 31 2017 the applicable Accounting Standards and Schedule III of theCompanies Act 2013 (including any statutory modification(s) or re-enactment(s) for thetime being in force) have been followed and there are no material departures from thesame; ii. 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 as at March 31 2017 and of the profit & loss of the Company for theFinancial Year March 31 2017; iii. the Directors have taken proper and sufficient carefor the maintenance of adequate accounting records in accordance with the provisions ofthe Companies Act 2013 (including any statutory modification(s) or re-enactment(s) forthe time being in force) for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; iv. the annual accounts have been prepared on agoing concern basis; v. proper internal financial controls laid down by theDirectors were followed by your Company and that such internal financial controls areadequate and operating effectively; and vi. proper systems to ensure compliance with theprovisions of all applicable laws were in place and that such systems were adequate andoperating effectively.
Your Directors wish to place on record their appreciation for the contribution made bythe employees at all levels. Your Directors also wish to thank its customers dealersagents suppliers investors and bankers for their continued support and faith reposed inthe Company.
| ||For & on behalf of the Board |
| ||Dipan Patel Jesingbhai |
|Place: Mumbai ||Chairman and Director |
|Date: May 30 2017 ||DIN: 05359769 |