The directors present the 71st Annual Report of KirloskarElectric Company Limited (hereinafter referred as "the company" or"KECL") along with the audited financial statement for the financial year endedMarch 31 2018. The consolidated performance of the company and its subsidiaries has beenreferred to wherever required.
Review of performance and state of company's affairs:
During the year under report your company achieved a turnover of39454/- lakhs (previous year 65276/- lakhs). The operations have resulted in net loss of7569/- lakhs (previous year net loss was 1196/- lakhs).
The financial highlights are as follows;
| ||Standalone ||Consolidated |
|PARTICULARS ||2017-18 ||2016-17 ||2017-18 ||2016-17 |
|Revenue from operations ||37913 ||62612 ||37925 ||62614 |
|Other income (net) ||1541 ||2664 ||670 ||1660 |
|Total Income ||39454 ||65276 ||38595 ||64274 |
|Total Expense ||47137 ||68021 ||47309 ||69509 |
|Profit / (Loss) before tax ||(7683) ||(2745) ||(8714) ||5235 |
|Tax Expense ||- ||(7) ||- ||(3) |
|Profit / (Loss) after tax ||(7683) ||(2738) ||(8714) ||5232 |
|Other comprehensive income (Net) ||114 ||1542 ||114 ||1542 |
|Total comprehensive income / (Loss) for the period ||(7569) ||(1196) ||(8600) ||3690 |
Note: The above figures are extracted from the audited standalone andconsolidated financial statements as per Indian Accounting Standards (Ind AS)
In view of the losses your directors do not recommend any dividend forthe year.
The company has not transferred any amount to the general reserveaccount during the period under review.
Abridged Annual Report:
In terms of the provisions of regulation 36 of Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015 andSection 136 of the Companies Act 2013 the Board of directors has decided to circulatethe abridged annual report containing the salient features of the Balance Sheet andStatement of Profit and Loss account to the shareholders for the financial year ended onMarch 31 2018. Full version of the annual report will be available on company'swebsite www.kirloskar-electric.com and will also be made available to investors uponrequest.
|SL. No. Particulars ||Amount in Lakhs |
|1. Accepted during the year ||Nil |
|2. Remained unpaid or unclaimed at the end of the year. ||622.9 |
|3. Whether there has been any default in repayment of deposits or payment of interest ||N/A |
|thereon during the year and if so number of such cases and the total amount involved || |
| At the beginning of the year || |
| Maximum during the year || |
| At the end of the year || |
|4. Details of deposits which are not in compliance with the requirements || |
|of Chapter V of the Act ||Nil |
Subsidiaries associate companies & joint ventures:
The company has six wholly owned subsidiaries and one associatecompany.
Reports on the performance and financial position of each of thesubsidiary and associate companies have been provided in Form AOC-1 appendedto this report.
Directors and Key Managerial Personnel
Mr. Vijay R Kirloskar (DIN: 00031253) has been reappointed as ExecutiveChairman of the company effective from August 12 2017 for a period of three (3) years.
Mr. Anand B Hunnur (DIN: 06650798) has been appointed as ManagingDirector of the company effective from May 26 2017 for a period of three (3) years.
Mr. Vinayak N Bapat (DIN: 06936639) has resigned from the position ofManaging Director due to personal reason and has ceased to be Managing Director effectivefrom August 11 2017.
In accordance with the provisions of section 152 of the Companies Act2013 and Articles of Association of the company Mrs. Meena Kirloskar (DIN: 00286774)Non-executive Director being longest in the office shall retire by rotation and beingeligible offer herself for re-appointment seeking members' approval and the same hasbeen set forth in the notice of the 71st annual general meeting of the company.
Mr. Soumendra Kumar Mahapatra has resigned from the position of chieffinancial officer due to personal reason and has ceased to be chief financial officereffective from August 12 2017.
Mr. Sanjeev Kumar S has been appointed as the chief financial officerof the company effective from August 10 2017. Mr. Chinmoy Patnaik has resigned from theposition of Associate Vice President Legal & Company Secretary due to personalreason and has ceased to be Associate Vice President Legal & Company Secretaryeffective from October 31 2017.
Ms. K S Swapna Latha has been appointed as Sr. General Manager - Legal& Company Secretary of the company effective from February 12 2018.
In terms of the provisions of Section 149 (7) of the Companies Act2013 the company has received declarations from all the independent directors statingthat they continue to meet the criteria of independence as provided under the provisionsof Section 149 (6) of the Companies Act 2013.
Evaluation of Directors Committees and the Board:
The evaluation process has been explained in the Corporate GovernanceReport which forms part of the annual report.
Number of meetings of the Board of directors and its committees:
Six meetings of the Board of directors were held during the financialyear 2017-18. The composition of Committee and others details are contained in theCorporate Governance Report which forms part of the annual report. The Nomination andremuneration policy and risk management policy has been appended to this report asAnnexure I and Annexure II respectively.
The information required under Section 197(12) of the Companies Act2013 read with Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is disclosed in the Form MGT 9.
Particulars of employees:
In terms of the provisions of Section 197(12) of the Companies Act2013 the names and other particulars of specified employees are set out in annexure to theBoard's report. Having regard to provisions of Section 136(1) of the Companies Act2013 the annual report excluding the aforesaid information is being sent to the membersof the company. The said information is avaible for inspection on all working days duringbusiness hours at the registered office of the company. Any member interested in obtainingsuch information may write to Company Secretary and the same will be furnished on request.
Corporate Social Responsibility:
In pursuance of the provisions of the Companies Act 2013 and CSRPolicy of the company it is required to spend two percent of the average net profits ofthe company for the three immediately preceding financial years. The company has incurredheavy losses in preceding three financial years and the average net profits for threefinancial years is in negative thus the company was not required to spend any money forthe CSR activities during the financial year ending March 31 2018.
Vigil mechanism for Directors and Employees:
The company has adopted a Whistle Blower Policy establishing vigilmechanism to provide a formal mechanism to the directors and employees to report theirconcerns about any poor or unacceptable practices or any event of misconduct or violationof company's code of conduct. The purpose of this policy is to provide a framework tosecure whistle blowing. It is to protect the employees who are willing to raise concernsabout serious irregularities within the company. The policy provides for adequatesafeguards against victimization of employees who avail of the mechanism and also providesfor direct access to the Chairman of the Audit Committee. It is affirmed that no personnelof the company has been denied access to the Audit Committee. The policy of VigilMechanism is available on the company's website(URL:http://www.kirloskar-electric.com/images/pdf/investor/policies/Whistle-Blower-Policy.pdf
Prevention of Sexual Harassment at Workplace:
Your company has zero tolerance policy in case of sexual harassment atworkplace and committed to provide a healthy environment to each and every employee of thecompany. The company has in place Policy on sexual harassment Redressal'. Interms of section 22 of the Sexual Harassment of Women at workplace (Prevention Prohibitionand Redressal) Act 2013 read with Sexual Harassment of Women at Work Place (PreventionProhibition and Redressal) Rules 2013 we report as follows for the year ended on March31 2018;
|Sl. No Particulars ||Status |
|1 No of complaints received in the year ||Nil |
|2 No of complaints disposed off in the year ||Nil |
|3 Cases pending for more than 90 days ||Nil |
|4 No of workshops and awareness programmes conducted in the year ||5 |
|5 Nature of action by employer or District office if any ||Nil |
Particulars of loans guarantee investments and securities:
There was no loan and advance guarantee or investment made by thecompany during the year under report.
Particulars of loans advances investments as required under thelisting regulations:
The details of related party disclosures with respect loans advanceinvestment at the year end and maximum outstanding amount thereof during the year asrequired under (part A of Schedule V of the Listing Regulations have been provided in thenotes to the financial statement of company.
Your directors draw attention of the members to note no. 7 & 37(9)of the standalone financial statements which sets out the details of loan and advanceguarantee or investment.
Particulars of contracts or arrangements with related parties:
The particulars of every contract or arrangements entered into by thecompany with related parties referred to in subsection (1) of section 188 of the CompaniesAct 2013 including certain arms length transactions under third proviso thereto aredisclosed in Form No. AOC -2 appended hereto.
All related party transactions that were entered into during thefinancial year were on an arm's length basis in the ordinary course of business andwere in compliance with the applicable provisions of the Companies Act 2013 (theAct') and SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015and the provisions of Section 188 of the Companies Act 2013 are not attracted.
There were no materially significant related party transactions made bythe company during the year that would have required Shareholder approval as per provisionof Companies Act 2013 read with applicable rules and Regulation 23 of SEBI (ListingObligations and Disclosures Requirements) Regulations 2015.
All related party transactions are placed before the Audit Committeefor approval. Prior omnibus approval of the Audit Committee is obtained for thetransactions which are of foreseen and repetitive nature. The transactions entered intopursuant to the omnibus approval so granted along with a statement giving details of allrelated party transactions is placed before the Audit Committee from time to time.
The Policy on Related Party Transaction is available on thecompany's website (URL: http://www.kirloskar-electric.com/images/pdf/investor/policies/Policy-on-related-party-transactions.pdf Your directors drawattention of the members to note no. 37(13) to the standalone financials statement whichsets out the related party disclosures.
As at March 31 2018 the paid up share capital of your company stoodat 664140710/- divided into 66414071 Equity Shares of 10/- each.
Disclosure under section 43(a)(ii) of the Companies Act 2013:
The company has not issued any shares with differential rights andhence no information as per provisions of Section 43(a)(ii) of the Act read with Rule 4(4)of the Companies (Share Capital and Debenture) Rules 2014 has been furnished.
Disclosure under section 54(1)(d) of the Companies Act 2013:
The company has not issued any sweat equity shares during the financialyear under review and hence no information as per provisions of Section 54(1)(d) of theAct read with Rule 8(13) of the Companies (Share Capital and Debenture) Rules 2014 hasbeen furnished.
Disclosure under section 62(1)(b) of the Companies Act 2013:
The company has not issued any equity shares under Employees StockOption Scheme during the financial year under review and hence no information as perprovisions of Section 62(1)(b) of the Act read with Rule 12(9) of the Companies (ShareCapital and Debenture) Rules 2014 has been furnished shares purchased directly byemployees under a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) ofCompanies (Share Capital and Debentures) Rules 2014 and hence no information has beenfurnished.
Disclosure under section 67(3) of the Companies Act 2013:
During the financial year under review there were no instances ofnon-exercising of voting rights in respect of shares purchased directly by employees undera scheme pursuant to Section 67(3) of the Act read with Rule 16(4) of Companies (ShareCapital and Debentures) Rules 2014 and hence no information has been furnished.
The Board confirms the compliance with applicable Secretarial Standardsi.e. SS-1 and SS-2 relating to meeting of the Board of directors and General meetingrespectively have been duly followed by the company.
M/s. Ashok Kumar Prabhashankar & Co. Chartered Accountants(Registration no. AAD-7041) were appointed as auditors of the company to hold office fromthe conclusion of the 70th annual general meeting until the conclusion of the72nd annual general meeting. The proposed appointment is as per section 139 and142 of the Companies Act 2013. Subsequent to amendment of Companies (Amendment) Act 2017the company is not required to ratify their appointment.
The company has appointed M/s. B K Ramadhyani Co. LLP as its internalauditors for 2017-18.
M/s. Rao Murthy and Associates Cost Accountants were appointed ascost auditors of the company for the financial year ended March 31 2018. The Board ofdirectors of your company has fixed Rs. 350000/- (Rupees three lakhs fifty thousand only)as audit fees which requires ratification by the members of the company in terms of theapplicable provisions of the Companies Act 2013. Accordingly a resolution seekingmembers' approval has been set forth in the notice of the 71st annualgeneral meeting of the company.
Disclosure under section 148(1) of the Companies Act 2013:
During the period under review the company has conducted the audit ofcost records and maintained the cost records as specified by the Central Government undersection 148(1) of the Companies Act 2013.
M/s. Swaroop Ravishankar & Associates Company Secretaries wereappointed as secretarial auditors for the financial year 2017-18 to conduct secretarialaudit in terms of the provisions of Section 204 of the Companies Act 2013. The auditreport is enclosed as Form MR - 3.
Explanations or comments on auditors' qualifications / adverseremarks / emphasis on matters:
The comments / observations of the auditors are self-explanatory andcompany's explanation thereto has been given in the relevant notes to accounts.
Extract of annual return:
According to the provisions of Section 92(3) of the Companies Act2013 an extract of the annual return is appended hereto as Form MGT-9 which formspart of this report.
Director's Responsibility Statement:
We the directors of your company confirm to the best of ourknowledge and ability that-
(a) in the preparation of the annual accounts the applicableaccounting standards have been followed and there are no material departures;
(b) we 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 of the company for that period;
(c) we have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;
(d) we have prepared the annual accounts on a going concern basis;
(e) we have laid down internal financial controls to be followed by thecompany and such internal financial controls are adequate and operating effectively.
(f) we have devised proper systems to ensure compliance with theprovisions of all applicable laws to the company and that such systems were adequate andoperating effectively
Your company's corporate governance report for the financial year2017-18 is appended to this annual report. A certificate on the status of compliance oncorporate governance is also appended and forms part of this annual report.
Material changes affecting the company:
There have been no material changes and commitments affecting thefinancial positions of the company between the end of the financial year and date of thisreport. There has been no change in the nature of business of the company. No fraud hasbeen reported by auditors to the Audit Committee of the Board.
Neither the Chairman and nor the Managing Director of the companyreceive any remuneration or commission form any of its subsidiaries.
Significant and material orders passed by the Regulators or Courts
There were no significant and material orders passed against thecompany by the regulators or courts or tribunals during financial year 2017-18 impactingthe going concern status and company's operations in future.
Conservation of energy technology absorption and foreign exchangeearnings and outgo
The relevant data pertaining to conservation of energy technologyabsorption and other details are given in the Annexure - III which forms part ofthis report.
Management Discussion and Analysis:
Management discussion and analysis is appended hereto as Annexure IV and forms part of this report.
Details in respect of adequacy of internal financial controls withreference to the financial statement:
Internal Financial Controls:
The company has a robust system of internal financial control which isin operation. The internal financial controls have been documented digitized and embeddedin the day to day affairs of the business process of the company. The effectiveness of theinternal financial controls are obtained through management reviews at regular intervalsassessments monitoring by the functional experts as well as auditing of the internalcontrol systems by the internal auditors during the course of their audits. We believethat these systems provide better assurance that our internal financial control systemsare well designed and are operating effectively.
The Board of directors takes the opportunity to express its sincereappreciation for the continued support and confidence received from the company'sbankers customers suppliers depositors and the shareholders.
The company considers its employees as its most valuable asset.Employees at all levels have put in their best to the services of the company and theBoard puts on record the sincere appreciation of their dedication and loyalty.
| ||For and on behalf of the Board of directors |
| ||Kirloskar Electric Company Limited |
| ||Vijay R Kirloskar |
|Place: Hubli ||Executive Chairman |
|Date: 08-08-2018 ||DIN : 00031253 |