The Board of Directors of your Company are pleased to present the 39th Annual Reporttogether with the Audited Statement of Accounts of Kalyani Forge Limited ("theCompany") for the year ended March 312018.
The summarized standalone results of your Company are given below.
|Particulars || |
Financial Year ended Standalone
| ||31/03/2018 ||31/03/2017 |
|Total income from operations (net) ||26536.00 ||25212.00 |
|Profit/(loss) before Interest Depreciation & Tax (EBITDA) ||2789.00 ||1919.00 |
|Finance Charges ||634.00 ||378.00 |
|Depreciation ||1295.00 ||1041.00 |
|Tax Expenses ||263.00 ||172.00 |
|Net Profit/(Loss) After Tax ||656.00 ||348.00 |
|Balance of Profit from Previous Year ||8202.00 ||7747.00 |
|Profit available for Appropriation ||8810.77 ||8202.00 |
|Less - Transfer to General Reserves ||- ||- |
|Less -Dividend paid ||109.14 ||- |
|Less - Tax on above Dividend ||22.22 ||- |
|Surplus retained in Profit & Loss Account ||8679.41 ||8202.00 |
*previous year figures have been regrouped/realigned as per IND-AS requirements.
Summary of Operations:
During the year the net revenue from operations of your Company for FY 17-18 stood toRs 26536 Lakhs against Rs. 25212 Lakhs for the FY 16-17 your Company's Profit after taxstood at Rs. 656 Lakhs as against profit of Rs 348 Lakhs last Year. Your company hassuccessfully transformed its accounting and reporting to Ind-AS regime.
Change in the nature of business if any:
There is no change in the nature of the business of the Company during the year.
The Company has not transferred any amount to General Reserves for the year underreview.
Your Directors are pleased to recommend for approval of members a dividend of Rs. 3.50per equity share (35%) at the face value of Rs 10/- per share for the Year ended 31stMarch 2018
During the year the Company has not issued/allotted equity or preference shares. As on31st March 2018 the issued subscribed and paid up share capital of yourCompany is at Rs. 36380000/- comprising 36 38000 equity shares of Rs.10/- each.
Your Company has not accepted any deposits from public Therefore details relating todeposits covered under Chapter V of the Companies Act 2013 are not applicable to theCompany.
Extract of Annual Return:
Pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of the Companies(Management and Administration) Rules 2014 extract of annual return is Annexed asAnnexure 1.
Transfer of Amounts to investor Education and Protection Fund:
Your Company has transferred funds lying unpaid or unclaimed for a period of sevenyears to Investor Education and Protection Fund (IEPF).
Pursuant to the provisions of the Investor Education Protection Fund (Uploading ofinformation regarding unpaid and unclaimed amounts lying with companies) Rules 2012 theCompany has already filed the necessary form and uploaded the details of unpaid andunclaimed amounts lying with the Company as on the date of last AGM (i.e. July 25 2017)with the Ministry of Corporate Affairs.
Details of Board meetings:
During the year five meetings of Board of Directors were held details of which aregiven below:
|Date of the meeting ||No. of directors attended the meeting |
|May 23 2017 ||5 |
|August 10 2017 ||5 |
|November 17 2017 ||5 |
|February 13 2018 ||5 |
Committees of Board:
The composition of the Committees of the Board of Directors has been detailed in theCorporate Governance annexure to this report.
Declaration by Independent directors:
Mr. Pradeep Nadkarni Mr. Abhijit Sen & Mr. Vishwas Chitrao are IndependentDirectors on the Board of your Company. In the opinion of the Board and as confirmed bythese Directors they fulfil the conditions specified in section 149 of the Companies Act2013 and the Rules made thereunder about their status as Independent Directors of theCompany.
Directors and Key Managerial Personnel:
Mr. Gaurishankar N Kalyani Non-Executive Director and Mr. Viraj Gaurishankar KalyaniExecutive Director retires by rotation at the forthcoming Annual General Meeting and beingeligible offers themselves for reappointment.
Mr. Chandranil Belvalkar resigned from the post of Company Secretary during the yearand Mr. Nilesh Vitekar was appointed on February 13 2018.
Formal Annual Evaluation:
SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 mandatesthat the Board shall monitor and review the Board evaluation framework. Also theCompanies Act 2013 states that a formal annual evaluation needs to be made by the Boardof its own performance and that of its Committees and individual Directors. In additionSchedule IV of the Companies Act 2013 states that the performance evaluation ofIndependent Directors shall be done by the entire Board of Directors excluding theDirector being evaluated.
In pursuance of above the Company has devised a Policy for performance evaluation ofIndependent Directors Board Committees and other individual Directors which includescriteria for performance evaluation of the Non-Executive Directors and Executive Director.
The Company commenced with the review of the best practices prevalent in the industryand evaluation of Board members. On the basis of review and the Policy for performanceevaluation of Independent Directors Board Committees and other individual Directors aprocess of evaluation was followed by the Board for its own performance and that of itsCommittees and individual Directors.
At a Separate meeting of Independent Directors held on 31 st March 2018 performanceevaluation of Chairperson Non- Independent Directors and the Board of Directors wascarried out by Independent Directors which has also reviewed the adequacy of the flow ofinformation between the Company Management and Board.
The detailed programme for familiarisation of Independent Directors with the Companytheir roles rights and responsibilities in the Company nature of business AOP businessmodel of the Company etc. was undertaken by the Company.
Company's policy on appointment and remuneration:
The policies relating to selection of Directors and determining Directors independenceand Remuneration Policy for Directors Key Managerial Personnel and other employees isattached herewith and marked as Annexure 2.
Highlights on Company's policy on Sexual Harassment:
As per "SEXUAL HARASSMENT OF WOMAN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013" the highlights of the policy adopted by the company isattached herewith marked as Annexure 3.
Holding and Subsidiaries:
During the period under review the Company does not have any holding or Subsidiarycompany.
Statutory Auditors their Report and Notes to Financial Statements:
The Company in its Annual General Meeting held on August 2 2016 appointed M/s. K.S.Aiyar & Co. Chartered Accountants as Statutory Auditors of the Company for a period offive years with effect from the conclusion of 37th Annual General Meeting of the Companyheld on August 2 2016.
Pursuant to the provisions of Section 139 of the Companies Act 2013 read with Rule3(7) of the Companies (Audit and Auditors) Rules 2014 the appointment of StatutoryAuditors shall be placed for ratification at every Annual General Meeting.
Accordingly a letter is received from M/s K.S. Aiyar & Co. Chartered Accountantsconfirming that appointment if made shall be as per eligibility required under Section 141of the Companies Act 2013 read with the Companies (Audit and Auditors) Rules 2014.
Your Directors seek ratification from the members for the appointment of M/s K.S. Aiyar& Co. Chartered Accountants as the Statutory Auditors of your Company from theconclusion of the ensuing Annual General Meeting till the conclusion of the 40th AnnualGeneral Meeting of the Company.
Internal financial controls:
The internal financial controls with reference to the Financial Statements arecommensurate with the size and nature of business of the Company.
As per the Cost Audit Orders Cost Audit is applicable to the Company's forgingbusiness for the FY 2018-19.
In view of the same and in terms of the provisions of Section 148 and all otherapplicable provisions of the Companies Act 2013 read with the Companies (Audit andAuditors) Rules 2014 M/s. R. A Chincholkar & Co Cost Accountants have beenappointed as Cost Auditors to conduct the audit of cost records of your company for thefinancial year 2018-19. The remuneration proposed to be paid to them requires ratificationof the shareholders of the Company. In view of this your ratification for payment ofremuneration to Cost Auditors is being sought at the ensuing Annual General Meeting.
In terms of Section 204 of the Companies Act 2013 and Rules made thereunder M/s. HR& Associates Practicing Company Secretaries have been appointed as SecretarialAuditors of the Company. The report of the Secretarial Auditors is enclosed as Annexure4 to this report. The Directors have noted the qualifications in Secretarial AuditReport. As there was frequent attrition in the officers/employees of the Company due towhich compliance mechanism was disturbed however necessary steps have been taken toensure the required compliances.
Your Company treats its "human resources" as one of its most importantassets.
Your Company continuously invests in attraction retention and development of talent onan ongoing basis. A number of programs that provide focused people attention are currentlyunderway. Your Company's thrust is on the promotion of talent internally through jobrotation and job enlargement.
Related Party Transactions:
All contracts/ arrangement/ transactions entered by the Company during the FinancialYear with related party were in the ordinary course of business and on arm's length basis.Such transaction forms part of the notes to the financial statements provided in theAnnual Report.
During the year the Company had not entered into any contract / arrangement /transaction with related parties which could be considered material in accordance with thepolicy of the Company on materiality of related party transactions which is available onthe Company's Website: www.kalyaniforge.co.in.
The summary of related party transaction in Form AOC-2 is enclosed as annexure 5.
Risk Management Policy:
In terms of the requirement of the Companies Act 2013 the Company has developed andimplemented the Risk Management Policy and the Audit Committee of the Board reviews thesame periodically. The detailed Risk Management Policy is available on Company's website.Highlights of the same are enclosed in annexure 6.
Management Discussion and analysis:
Management Discussion and Analysis comprising an overview of the financial resultsoperations / performance and the future prospects of the Company form part of this AnnualReport.
Corporate Social responsibility (CSR):
The Company has adopted the CSR policy pursuant to Sec 135 of the Companies Act 2013.For the Financial Year 2017-18 the overall CSR commitment was Rs. 371307/- out of whichit has spent Rs. 300000/- and is in discussion with several projects to spend remainingamount. The disclosures as per Rule 9 of Companies (Corporate Social ResponsibilityPolicy) Rules 2014 is enclosed as Annexure 7.
Highlights of Corporate Social Responsibility Policy:
The Company proposes to undertake CSR projects and programmes in respect of theactivities stated below with a preference to implement these projects and programme in theareas in which it operates:
Eradicating hunger poverty and malnutrition promoting health care includingpreventive health care and sanitation and making available safe drinking water;
Promoting education including special education and employment enhancingvocation skills especially among children women elderly and the differently abled andlivelihood enhancement projects.
Promoting gender equality empowering women setting-up homes and hostels forwomen and orphans; setting up old age homes day care centres and such other facilitiesfor senior citizens and measures for reducing inequalities faced by socially andeconomically backward groups.
Ensuring environmental sustainability ecological balance protection of floraand fauna animal welfare agroforestry conservation of natural resources and maintainingquality of soil air and water.
Protection of national heritage art and culture including restoration ofbuildings and sites historical importance and works of art; setting-up public librariespromotion and development of traditional arts and handicrafts.
Measures for the benefit of armed forces veterans war widows and theirdependents.
Training to promote rural sports nationally recognised sports ParalympicsSports and Olympic Sports.
Contribution to the Prime Minister's National Relief Fund or any other fund setup by the Central Government or the State Governments for socio-economic development andrelief and funds for the welfare of the Scheduled Castes the Scheduled Tribes otherbackward classes minorities and women.
Contributions or funds provided to technology incubators located within academicinstitutions which are approved by the Central Government.
Rural development Projects.
Particulars of Employees:
Pursuant to the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 statement of particulars of employees is annexed as Annexure 8.
Details of establishment of vigil mechanism for directors and employees:
The details of establishment of vigil mechanism for directors and employees to reportgenuine concerns are to be disclosed.
Highlights of Whistle Blower Policy are enclosed in annexure 9.
Corporate Governance Certificate
The Compliance certificate from the Auditors regarding compliance of conditions ofcorporate governance as stipulated in SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is annexed with the report.
Details of conservation of energy technology absorption foreign exchange earnings andoutgo
The Company in its continuous endeavour to conserve energy has adopted variousinnovative measures to reduce waste and to achieve optimum utilization of energy resultinginto good earning of Power Factor incentive from MSEB and in turn resulting into reductionof power cost.
(a) Conservation of energy
|(i) the steps taken or impact on conservation of energy ||The Company in its continuous endeavour to conserve energy has adopted various innovative measures to reduce waste and to achieve optimum utilization of energy resulting into good earning of Power Factor incentive from MSEB and in turn resulting into reduction of power cost. |
|(ii) the steps taken by the company for utilizing alternate sources of energy |
|(iii) the capital investment on energy conservation equipments ||- |
(b) Technology absorption
|(i) the efforts made towards technology Absorption || |
|(ii) the benefits derived like product improvement cost reduction product development or import substitution || Productivity improvement in both forged and machined components together with competitive quality. |
Process technology improvements to achieve competitive advantage in the business.
Successful commercial scale up of forged and machined parts.
Capability building for attracting new customers.
|(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)- |
(a) the details of technology imported
(b) the year of import;
(c) whether the technology been fully Absorbed
(d) if not fully absorbed areas where absorption has not taken place and the reasons thereof
|(iv) the expenditure incurred on Research and Development ||(salaries Rs. 64.24 lakhs + consumables Rs.261.79+ capital expenditure Rs. 180 lakhs) |
Total energy consumption and energy consumption per unit of production as per Form - Aof the Annexure to the Rules is as given below:
|Sr. No. Description ||2017-18 ||2016-17 |
|1) POWER AND FUEL CONSUMPTION || || |
|I) Electricity || || |
|a) Purchased Units (KWH) ||26535664 ||24187484 |
|Total Amount (In. Rs) ||230105164 ||200082381 |
|Rate/Unit (Rs) ||8.67 ||8.27 |
|b) Own Generation || || |
|i) Through Diesel Generator ||204212 ||106840 |
|ii) Through Steam Generator (KWH) || || |
|II) Coal || || |
|III) Fuel Oil (FO + CBFS) || || |
|Quantity (Ltrs.) || || |
|Total Amount ( In Rs.) ||32362092 ||27458857 |
|Average Rate /Litre (Rs.)- FO+CBFS ||33.08 ||28.07 |
|2) CONSUMPTION PER UNIT OF PRODUCTION || || |
|Product : high quality closed tolerance die forgings || || |
|Unit : M.T ||15647 ||15523 |
|Electricity (KWH) ||1570.4 ||1558.2 |
|Fuel Oil (KL/TON) ||0.06 ||0.06 |
|Coal ||NIL ||NIL |
(c) Research & Development (R&D):
i) Specific Areas of Research & Development-
Development of new products both in the area of Forging as well as Machined componentsfor Domestic & Export.
1) During the year 2017-18 Company made significant achievements in the area ofproduct Development. The Company developed variety of products as per the specificrequirements of the customers such as Knuckle Arm Turbo Charger Ring Under Carriage andSteering Parts.
2) New Design Die Holders & Base Bolsters for accommodating Square & RoundParts
3) Die Locks introduced for Warm and hot forging components to reduce die setup timeand to improve forging quality.
4) Introduced W303 Die material for Tulip Warm Forging Dies to improve die life - byVAVE Approach.
5) The Company has spent Rs. 506.03 Lakhs during the Financial Year 2017-18 on Researchand Development activities.
ii) Future Plan of Action:
1) Research & Development in Single Minute Exchange of Dies (SMED) project.
2) Focused development of variety of warm and cold forging and machined premiumcomponents.
3) Planning to commence activities in bigger size forgings.
4) Optimization of input material to improve maximum forging yield ratio.
5) Introduce spline rolling technology for tulips.
(d) Foreign exchange earnings and Outgo:
During the year the total foreign exchange used was Rs. 40110847/- and the totalforeign exchange earned Rs. 193348626/- .
(e) Technology Absorption Adaptation and innovation:
Through In-house Research and Development Company is focusing on developing TurboChargers Under Carriage and Near Net Shape Warm forged bell (Outer Race).
Directors' responsibility Statement:
Pursuant to the requirement clause (c) of sub-section (3) of Section 134 of theCompanies Act 2013 your Directors confirm that:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the Directors had 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 at the end of the financial year and ofthe profit and loss of the Company for that period;
(c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis; and
(e) the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Your Directors place on record their appreciation for employees at all levels who havecontributed to the growth and performance of your Company.
Your Directors also thank the clients vendors bankers shareholders and advisers ofthe Company for their continued support. Your Directors also thank the Central and StateGovernments and other statutory authorities for their continued support.
| ||For and on behalf of the Board |
|Place: Pune ||Rohini G. Kalyani |
|Date: 12th May 2018 ||Chairperson & Managing Director |
| ||DIN: 00519565 |