The directors present the 72nd Annual Report of Kirloskar Electric CompanyLimited (hereinafter referred as "the Company" or "KECL") along withthe audited financial statement for the financial year ended March 31 2019. Theconsolidated performance of the Company and its subsidiaries has been referred to whereverrequired.
Review of performance and state of Company's affairs:
During the year under report your Company achieved a total turnover of 35660 Lakhs(previous year 39454 Lakhs). The operations have resulted in net loss of 6732 Lakhs(previous year net loss was 7569 Lakhs).
The financial highlights are as follows:
(Rs in Lakhs)
| ||Standalone ||Consolidated |
|PARTICULARS ||2018-19 ||2017-18 ||2018-19 ||2017-18 |
|Revenue from operations ||29442 ||37913 ||29461 ||37925 |
|Other income (net) ||6217 ||1541 ||6217 ||670 |
|Total Income ||35660 ||39454 ||35678 ||38595 |
|Total Expense ||37522 ||47136 ||38819 ||47310 |
|Profit / Loss before tax ||(1862) ||(7683) ||(2794) ||(8715) |
|Tax Expense ||- ||- ||- ||- |
|Profit /Loss after tax ||(1862) ||(7683) ||(2794) ||(8715) |
|Total other comprehensive income ||(4870) ||114 ||(4870) ||114 |
|Total comprehensive income for the period ||(6732) ||(7569) ||(7664) ||(8600) |
Note: The above figures are extracted from the audited standalone and consolidatedfinancial statements as per Indian Accounting Standards (Ind AS)
In view of the losses your directors do not recommend any dividend for the year
The Company has not transferred any amount to the general reserve account during theperiod under review.
Transfer to Investor Education and Protection Fund:
As required under the Investor Education and Protection Fund Authority (AccountingAudit Transfer and Refund) Rules 2016 ("IEPF Rules") during the year 2018-19a matured deposit including the interest amount for the financial year 2010-11 of 50312/-(Rupees Fifty Thousand Three Hundred And Twelve Only) was transferred to the InvestorEducation and Protection Fund ("IEPF").
Subsidiaries associate companies & joint ventures:
The Company has six wholly owned subsidiaries and one associate Company.
Reports on the performance and financial position of each of the subsidiary andassociate companies have been provided in Form AOC-1 appended to thisreport.
|SL.No. ||Particulars ||in Lakhs |
|1. ||Accepted / renewed during the year ||Nil |
|2. ||Remained unpaid or unclaimed at the end of the year. ||52.30 |
|3. ||Whether there has been any default in repayment of deposits or payment of interest 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 ||N/A |
|4. ||Details of deposits which are not in compliance with the requirements of Chapter V of the Act ||Nil |
Directors and Key Managerial Personnel:
In accordance with the provisions of section 152 of the Companies Act 2013 andArticles of Association of the Company Mrs. Meena Kirloskar (DIN: 00286774) aNon-executive Director being longest in the office shall retire by rotation and beingeligible has offered herself for reappointment seeking members' approval has been setforth in the notice of the 72nd Annual General Meeting of the Company.
Mr. Shyamanta Bardoloi (DIN: 01720375) non executive non independent director of theCompany has resigned from the directorship due to ill health with effect from the closeof office hours on February 13 2019.
Due to personal reasons Mr. Anand Balaramacharya Hunnur (DIN: 06650798) ManagingDirector of the Company has decided to step-down from the office as Managing Director ofthe Company and resigned from the position of Managing Director with effect from the closeof office hours on May 31 2019.
Mr. Ganesh Krishnamurthy (DIN: 05160176) nominee of Life Insurance Corporation ofIndia has resigned from the directorship due to personal reason with effect from theclose of office hours on July 11 2019.
The following Independent Director's term will be ending at September 30 2019 and theyare eligible for reappointment for a second consecutive five year term; (1). Mr.Satyanarayan Agarwal (DIN: 00111187) (2). Mr. Kamlesh Suresh Gandhi (DIN: 00004969) (3).Mr. Sarosh Jehangir Ghandy (DIN: 00031237) (4). Mr. Mahendra Vellore Padmanaban (DIN:00033270) (5). Mr. Anil Kumar Bhandari (DIN: 00031194) Based on the recommendation of theNomination and Remuneration Committee the Board of Directors of the Company has accordedits approval at the meeting held on August 14 2019 and the approval of the members of theCompany is sought for the reappointment of above said Independent Directors for thesecond consecutive term of 5 (five) consecutive years and continuation of such appointmentfor 5 years even after attaining the age of 75 years or who has attained the age of 75years.
In terms of the provisions of Section 149(7) of the Companies Act 2013 the Companyhas received declarations from all the independent directors stating that they continue tomeet the criteria of independence as provided under the provisions of Section 149(6) ofthe Companies Act 2013.
Evaluation of Directors Committees and the Board:
The evaluation process has been explained in the Corporate Governance Report whichforms 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 financial year 2018-19. Thecomposition of Committee and others details are contained in the Corporate GovernanceReport which forms part of the annual report. The Nomination and remuneration policy andrisk management policy has been appended to this report as Annexure- I and Annexure-II respectively.
Corporate Social Responsibility:
In terms of section 135 of the Companies Act 2013 the Company has constituted CSRCommittee and the CSR Policy of the Company (which can be accessed at the followingURL:http://www.kirloskarelectric.com/investors/investors-information/ policies.htmlwherein the Company is required to spend two percent of the average net profits of theCompany 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 2019.
Vigil mechanism for Directors and Employees:
The Company has adopted a Whistle Blower Policy establishing vigil mechanism toprovide a formal procedural course to the directors and employees to report their concernsabout any poor or unacceptable practices or any event of misconduct or violation ofCompany's code of conduct. The purpose of this policy is to provide a framework to securewhistle blowing incidents and 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.kirloskarelectric.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 at workplace andcommitted to provide a healthy environment to each and every employee of the Company. TheCompany has in place Policy on sexual harassment Redressal.
In terms of section 22 of the Sexual Harassment of Women at workplace (PreventionProhibition and Redressal) Act 2013 read with Sexual Harassment of Women at Work Place(Prevention Prohibition and Redressal) Rules 2013 we report as follows for the yearended on March 31 2019:
|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 programme(s) conducted in the year ||4 |
|5 ||Nature of action by employer or District office if any ||Nil |
The information required under Section 197(12) of the Companies Act 2013 read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is disclosed in the Form No. MGT 9.
Particulars of employees:
In terms of the provisions of Section 197 (12) of the Companies Act 2013 read withrules 5(2) & 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as amended the names and other particulars of specified employeesare set out in annexure to the Board's report. Having regard to provisions of Section136(1) of the Companies Act 2013 the annual report excluding the aforesaid informationis being sent to the members of the company. The said information is available forinspection on all working days during business hours at the registerd office of thecompany. Any member interested in obtaining such information may write to the CompanySecretary and the same will be furnished on request.
Particulars of loans guarantee investments and securities:
There were no loans and advance guarantee or investment made by the Company during theyear under report.
Particulars of loans advances investments as required under the listing regulations:
The details of related party disclosures with respect to loans advances investment atthe year end and maximum outstanding amount thereof during the year as required (underpart A of Schedule V of the Listing Regulations) have been provided in the notes to thefinancial statement of Company.
Your directors draw attention of the members to note no. 17 & 37(12) of thestandalone financial statements which sets out the details of loan and advance guaranteeor investment.
Particulars of contracts or arrangements with related parties:
The particulars of every contract or arrangements entered into by the Company withrelated parties referred to in subsection (1) of section 188 of the Companies Act 2013including certain arms length transactions under third proviso thereto are disclosed inForm No. AOC -2 appended hereto.
All related party transactions that were entered into during the financial year were onan arm's length basis and in the ordinary course of business and were in compliance withthe applicable provisions of the Companies Act 2013 (the Act') and SEBI (ListingObligations and Disclosures Requirements) Regulations 2015 and the provisions of Section188 of the Companies Act 2013 are not attracted.
There were no materially significant Related Party Transactions made by the Companyduring the year that would have required Shareholder approval as per provision ofCompanies 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 Committee for approval.Prior Omnibus approval of the Audit Committee is obtained for the transactions which areof foreseen and repetitive nature. The transactions entered into pursuant to the omnibusapproval so granted along with a statement giving details of all related partytransactions is placed before the Audit Committee from time to time.
The Policy on Related Party Transaction is available on the Company's website(URL:http://www.kirloskarelectric.com/images/pdf/investor/policies/Policy-on-related-party-transactions.pdf
Your directors draw attention of the members to note no. 37(12) to the standalonefinancials statement which sets out the related party disclosures
As at March 31 2019 the paid up share capital of your Company stood at 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 and hence no informationas 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 financial year underreview and hence no information as per provisions of Section 54(1)(d) of the Act read withRule 8(13) of the Companies (Share Capital and Debenture) Rules 2014 has been furnished.
Disclosure under section 62(1)(b) of the companies act 2013:
The Company has not issued any equity shares under Employees Stock Option Scheme duringthe financial year under review as per provisions of Section 62(1)(b) of the Act read withRule 12(9) of the Companies (Share Capital and Debenture) Rules 2014 and hence noinformation has been furnished.
Disclosure under section 67(3) of the companies act 2013:
During the financial year under review there were no instances of non-exercising ofvoting rights in respect of shares purchased directly by employees under a scheme pursuantto Section 67(3) of the Act read with Rule 16(4) of Companies (Share Capital andDebentures) Rules 2014 and hence no information has been furnished.
The Board confirms the compliance with applicable Secretarial Standards i.e. SS-1 andSS-2 relating to meeting of the Board of Directors and General meeting respectively havebeen 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 from the conclusion ofthe 70th Annual General Meeting until the conclusion of the 72nd AnnualGeneral Meeting and are the retiring auditors. In terms of the provisions of Section 139of the Companies Act 2013 the auditors are eligible for reappointment and based on therecommendation of the Audit Committee the Board proposes to appoint M/s. Ashok KumarPrabhashankar & Co. chartered accountants as auditors of the Company to hold officefrom the conclusion of 72nd Annual General Meeting until the conclusion of 77thAnnual General Meeting of the Company subject to approval of the members of the Company.
M/s. Sundar and Associates (AF no. 1172) Chartered Accountants Malaysia werereappointed as the auditors for conducting audit of sales office at Kuala Lumpur and tohold the office from the conclusion of 71st Annual General Meeting until theconclusion of 72nd Annual General Meeting of the Company. Based on therecommendation of the Audit Committee the Board of Directors of the Company has proposedto appoint M/s. Sundar and Associates (AF no. 1172) Chartered Accountants Malaysia asauditors for conducting audit of sales office at Kuala Lumpur and to hold the office fromthe conclusion of 72nd Annual General Meeting until the conclusion of 73rdAnnual General Meeting of the Company subject to the approval of the members of theCompany.
The Company has appointed M/s. B K Ramadhyani Co. LLP as its internal auditors for2018-19.
M/s. Rao Murthy and Associates cost accountants were appointed as cost auditors ofthe Company for the financial year ended March 31 2019. The Board of Directors of yourCompany has fixed 450000/- (Rupees Four Lakhs Fifty Thousand only) as audit fees whichrequires ratification by the members of the Company in terms of the applicable provisionsof the Companies Act 2013. Accordingly a resolution seeking members' approval has beenset forth in the notice of the 72nd Annual General 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 of cost records andhas maintained the cost records as specified by the Central Government under section148(1) of the Companies Act 2013.
Mr. Karthick V (ACS no. 11910 / COP no. 4680) practicing Company secretary wasappointed as secretarial auditor of the Company for the financial year 2018-19 to conductsecretarial audit in terms of the provisions of Section 204 of the Companies Act 2013.The audit report is enclosed as Form No. MR - 3.
Explanations or comments on auditors' qualifications / adverse remarks / emphasis onmatters:
The comments / observations of the auditors are self-explanatory and Company'sexplanation thereto has been given in the relevant notes to accounts.
According to the provisions of Section 134(3)(a) read with Section 92(3) of theCompanies Act 2013 the details forming part of the extract of the Annual Return in FormMGT-9 as required under Section 92 of the Act which forms an integral part of this Reportand is also available on the Company's websitehttps://kirloskarelectric.com/investors/investors-information/ financial.html
Director's Responsibility Statement:
We the Directors of your Company confirm to the best of our knowledge and abilitythat-
(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed and there are no material departures;
(b) we have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profit/ loss of the Company for that period;
(c) we have taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany 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 the Company andsuch internal financial controls are adequate and operating effectively.
(f) we have devised proper systems to ensure compliance with the provisions ofall applicable laws to the Company and that such systems were adequate and operatingeffectively.
Your Company's corporate governance report for the financial year 2018-19 is appendedto this annual report. A certificate on the status of compliance on corporate governanceis also appended and forms part of this annual report.
Material Changes affecting the Company:
There have been no material changes and commitments affecting the financial positionsof the Company between the end of the financial year and date of this report. There hasbeen no change in the nature of business of the Company.
No fraud has been reported by auditors to the Audit Committee of the Board.
Neither the Executive Chairman and nor the Managing Director of the Company or any KeyManagerial Personnel receive any remuneration or commission from any of its subsidiaries.
Significant and Material orders passed by the Regulators or Courts:
There were no significant and material orders passed against the Company by theregulators or courts or tribunals during financial year 2018-19 impacting the goingconcern status and Company's operations.
Conservation of energy technology absorption and foreign exchange earnings and outgo:
The relevant data pertaining to conservation of energy technology absorption and otherdetails are given in the Annexure - III which forms part of this report.
Management Discussion and Analysis:
Management discussion and analysis is appended hereto as Annexure IV andforms part of this report. Details in respect of adequacy of internal financial controlswith reference to the financial statement:
Internal Financial Controls:
The Company has a robust system of internal financial control which is in operation.The internal financial controls have been documented digitized and embedded in the day today affairs of the business process of the Company. The effectiveness of the internalfinancial 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 sincere appreciation forthe continued support and confidence received from the Company's bankers customerssuppliers depositors and the shareholders.
The Company considers its employees as its most valuable asset. Employees at all levelshave put in their best to the services of the Company and the Board puts on record thesincere appreciation of their dedication and loyalty.
| ||For and on behalf of the Board of Directors |
| ||Kirloskar Electric Company Limited |
| ||Vijay R Kirloskar |
|Place: Bangalore ||Executive Chairman |
|Date: August 14 2019 ||DIN: 00031253 |