Your Directors are pleased to present the 72nd Annual Report of the Company alongwiththe Audited Financial Statements for the year ended 31st March 2019. The FinancialResults for the year are shown below :-
| || || || ||( in Lakhs) |
|Particulars ||Consolidated ||Standalone |
| ||2018-19 ||2017-18 ||2018-19 ||2017-18 |
|Total Income ||2517.99 ||3055.02 ||4852.34 ||4847.08 |
|Less: Total expenses ||2266.19 ||496.52 ||2253.66 ||451.77 |
|Less: Exceptional Items ||- ||262.80 ||- ||- |
|Profit before tax ||251.80 ||2295.70 ||2598.68 ||4395.31 |
|Add / (Less): Tax expense ||(740.82) ||285.74 ||(740.79) ||284.96 |
|Profit after tax ||992.62 ||2009.96 ||3339.47 ||4110.35 |
|Add: Share in profit of associate company || || || || |
|Net profit after tax and share in profit of associate company ||22137.00 ||11387.00 ||- ||- |
|Profit for the year ||23129.62 ||13396.96 ||3339.47 ||4110.35 |
|Add / (Less): Actuarial gain on defined benefit plan (gratuity) Net of Income Tax ||(0.77) ||0.77 ||(0.77) ||0.77 |
|Realised gain on equity share ||10625.86 ||- ||10625.86 ||- |
|Less: Current tax on realised gain ||2290.00 ||- ||2290.00 ||- |
|Less: Other Adjustment relating to OCI ||285.00 ||283.00 ||- ||- |
|Add: Balance brought forward from previous year ||31385.12 ||21371.30 ||22105.16 ||21094.95 |
|Balance Available ||62564.83 ||34486.03 ||33779.72 ||25206.07 |
|Appropriations || || || || |
|Dividend paid ||1977.19 ||1977.18 ||1977.19 ||1977.18 |
|Additional tax on dividend paid ||406.42 ||402.47 ||406.42 ||402.47 |
|Transfer to Reserve u/s. 45-1C of ||2335.07 ||721.26 ||2335.07 ||721.26 |
|Reserve Bank of India Act 1934 || || || || |
|Closing Balance of retained earnings ||57846.15 ||31385.12 ||29061.04 ||22105.16 |
INDIAN ACCOUNTING STANDARDS (IND AS)
The Ministry of Corporate Affairs vide its notification dated 16.02.2015 notified theCompanies (Indian Accounting Standard) Rules 2015 applicable to certain classes ofcompanies. In pursuance to the said notification read with the Companies (IndianAccounting Standard) (Amendment) Rules 2016 Ind AS became applicable to your Companywith effect from 1st April 2018. Accordingly the Standalone and Consolidated FinancialStatements for the year ended 31st March 2019 have been prepared in accordance with IndAS and consequently the Financial Statements for the previous year have been restated toconform to the provisions of the Ind AS.
CHANGE IN THE NATURE OF BUSINESS IF ANY
During the year under review there has been no change in the nature of business of theCompany.
During the year under review there has been no change in the Share Capital of theCompany.
The Board of Directors has recommended a dividend of 25/- (Rupees Twenty Five only) perequity share of 10/- each equivalent to 250 % ( Two hundred fifty percent) on the paid upequity share capital of the Company for the year ended 31st March 2019 as against 25/-(Rupees Twenty Five only) per equity share equivalent to 250 % ( Two hundred fiftypercent) paid in the previous year on the equity shares of 10/- each. The dividend will bepaid when approved by the shareholders in accordance with law. The dividend will be freeof tax in the hands of the shareholders. The Company will have to pay dividenddistribution tax at the rate of 15 % plus applicable surcharge and education cessaggregating to about 20.555 % of the dividend amount so distributed.
TRANSFER TO RESERVES
Your Directors do not propose to transfer any amount to the General Reserves for thefinancial year ended 31st March 2019.
Sad demise of Shri B. K. Birla - Chairman Emeritus of the Company
It is a matter of profound grief and sorrow that our respected Shri B. K. BirlaChairman Emeritus of the Company left for heavenly abode on 3rd July 2019. Late ShriBirla was an industrialist of great repute a philanthropist an avid educationist and atrue karmayogi for whom work was worship. The Company has lost an inspiring leader and avisionary and our country has also lost an entrepreneur and a philanthropist. He was notonly one of the foremost pioneers of India's industrialization but such was hismultifaceted personality and so were his contributions in various spheres of life that hewas an Institution by himself and became a legend in his own life time.
Late Shri B. K. Birla who was appointed as a Director on the Company's Board in 1986stepped down as Director of the Company with effect from 1st April 2019 and the Board ofDirectors of the Company in recognition of late Shri Birla's great contribution to theCompany appointed him as the "Chairman Emeritus" with effect from 1st April2019.
The Board of Directors of the Company express their deep condolences and pay tribute tolate Shri B. K. Birla a great visionary leader.
Appointment of Smt. Rajashree Birla as Chairperson of the Company
Smt. Rajashree Birla on the recommendations of the Nomination and RemunerationCommittee have been appointed as the Non- Executive Chairperson of the Company with effectfrom 1st April 2019 for a period of three years.
Changes in Directorate
Shri Kumar Mangalam Birla resigned from the Directorship of the Company with effectfrom 7th August 2018. The Board appreciated and placed on record the valuable servicesable guidance and support provided by Shri Birla during his tenure as a Director of theCompany.
Smt. Surbhi Singhi ceased to be a Director of the Company with effect from 14thNovember 2018 pursuant to the provisions of Section 167 (1)(b) of the Companies Act2013. The Board appreciated and placed on record the valuable services rendered by Smt.Singhi during her tenure as a Director of the Company.
Shri A. V. Jalan (DIN: 01455782) will be retiring at the ensuing 72nd Annual GeneralMeeting of the Company and being eligible offers himself for being re-elected.
Shri D. K. Mantri (DIN: 00075664) will complete his first term of appointment on 28thAugust 2019 as an Independent Director. He has been re-appointed on the recommendation ofthe Nomination and Remuneration Committee for another term of five consecutive years bythe Board with effect from 29th August 2019 subject to the approval of the shareholdersby Special Resolution at the ensuing Annual General Meeting. Details of the proposal forthe re-appointment of Shri Mantri as an Independent Director of the Company are mentionedin the Notice convening the 72nd Annual General Meeting of the Company alongwith theExplanatory Statement as required under Section 102 of the Companies Act 2013. Theaforesaid appointment is appropriate and in the best interest of the Company.
On the recommendations of the Nomination and Remuneration Committee the Board ofDirectors have appointed Shri Giriraj Maheswari (DIN:00796252) and Shri Yazdi P. Dandiwala(DIN: 01055000) on 17th April 2019 and Smt. Vanita Bhargava (DIN: 07156852) on 10th July2019 as the Additional Independent Directors of the Company. Shri Maheswari ShriDandiwala and Smt. Bhargava hold office up to the date of the ensuing Annual GeneralMeeting of the Company and are eligible for appointment at the said Annual General Meetingof the Company. Details of the proposal for the appointment of Shri Maheswari ShriDandiwala and Smt. Bhargava as Independent Directors of the Company are mentioned in theNotice convening the 72nd Annual General Meeting of the Company along with the ExplanatoryStatement as required under Section 102 of the Companies Act 2013. The aforesaidappointments are appropriate and in the best interest of the Company.
The Nomination and Remuneration Policy of the Company empowers the Nomination andRemuneration Committee to formulate a process for evaluating the performance of IndividualDirectors Committees of the Board and the Board as a whole.
The Nomination and Remuneration Committee of the Company also evaluated the performanceof all the individual Directors on various parameters such as level of participation ofthe Directors preparing themselves well in advance to take active participation at themeeting(s) level of knowledge and expertise etc.
All the Independent Directors of the Company also had a separate meeting on 31stDecember 2018 to review the performance and evaluation of Non- Independent Directors andthe Board as a whole.
The Board after taking into consideration the evaluation as done by the Nomination andRemuneration Committee and by the Independent Directors carried out an annual evaluationof its own performance and that of its Committees and individual Directors. The overalloutcome of such evaluation is that the Board its Committees and individual Directors haveperformed effectively and satisfactorily.
DECLARATION BY INDEPENDENT DIRECTORS
Your Company has received declarations from all the Independent Directors confirmingthat they meet the criteria of independence as prescribed under the provisions of the Actread with the Schedules and Rules issued thereunder as well as clause (b) ofsub-regulation (1) of Regulation 16 of the Listing Regulations (including any statutorymodification(s) or re-enactment(s) thereof for the time being in force). In terms ofRegulation 25(8) of the Listing Regulations the Independent Directors have confirmed thatthey are not aware of any circumstance or situation which exist or may be reasonablyanticipated that could impair or impact their ability to discharge their duties with anobjective independent judgment and wihout any external influence.
CODE OF CONDUCT
All the Board Members and Key Management Personnel of the Company have affirmedcompliance with the Code of Conduct applicable to the Board Members and Employees of theCompany for the year 2018-19 and a declaration in this regard has been made by the ChiefExecutive Officer which forms a part of this Report as an Annexure.
BOARD AND COMMITTEE MEETINGS
The details of number and dates of Board Meetings and Committee Meetings includingattendance of
Directors for the year 2018-19 is given in the attached Corporate Governance Report.The intervening gap between the meetings was within the period prescribed under theCompanies Act 2013
DIRECTORS' RESPONSIBILITY STATEMENT
In compliance with the provisions of Section 134 of the Companies Act 2013 theDirectors to the best of their knowledge and belief confirm that
(i) in the preparation of the Annual Accounts the applicable Accounting Standards havebeen followed along with proper explanation relating to material departures;
(ii) the Directors had selected such Accounting Policies and applied them consistentlyand made judgements 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 as on31st March 2019 and of the Profit of the Company for that period;
(iii) the Directors had taken proper and sufficient care to the best of their knowledgeand ability for the maintenance of adequate accounting and other records in accordancewith the provisions of the aforesaid Act for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities;
(iv) the Directors had prepared the annual accounts on a going concern basis;
(v) the Directors had laid down Internal Financial Controls to be followed by theCompany and that such Internal Financial Controls are adequate and are operatingeffectively; and
(vi) the Directors had devised proper system to ensure compliance with the provisionsof all applicable laws and that such system is adequate and operating effectively.
MATERIAL CHANGES AND COMMITMENTS AFTER THE BALANCE SHEET DATE
There are no material changes and commitments affecting the financial position of thecompany which have occurred between the end of the financial year of the Company to whichthe financial statements relate and the date of this report.
SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS/COURTS/ TRIBUNALS
There were no significant material orders passed by the Regulators/Courts/Tribunalsimpacting the going concern status of the Company and its future operations.
INTERNAL FINANCIAL CONTROL
The Company believes that a strong internal control framework is an important pillar ofCorporate Governance. The Company has in place adequate internal financial control systemwhich ensures orderly and efficient conduct of its business safeguarding of its assetsand accuracy and completeness of accounting records timely preparation of reliablefinancial information and various regulatory and statutory compliances.
As required by Regulation 17 (8) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the CEO and CFO certificate for the financial year 2018-19has been submitted to the Board and a copy thereof is contained in the Annual Report.
LISTING OF EQUITY SHARES
The Equity shares of your Company are listed with The National Stock Exchange of IndiaLimited and BSE Limited.
EXTRACT OF ANNUAL RETURN
An extract of the Annual Return as on 31st March 2019 is attached as Annexure - A inthe prescribed form MGT- 9 in accordance with Section 92(3) of the Companies Act 2013read with the Companies (Management and Administration) Rules 2014 which forms part ofthis Report.
KEY MANAGERIAL PERSONNEL
Pursuant to Section 203 of the Companies Act 2013 the Key Managerial Personnel of theCompany are Shri R. P. Pansari Chief Executive Officer Shri N. K. Baheti ChiefFinancial Officer and Shri R. S. Kashyap Company Secretary.
Remuneration and other details of the Key Managerial Personnel for the year ended 31stMarch 2019 are mentioned in the Extract of the Annual Return which is attached asAnnexure - A and forms part of this Report.
TRANSACTIONS WITH RELATED PARTIES
None of the transactions with Related Parties falls under the scope of Section 188 (1)of the Companies Act 2013 for the year ended 31st March 2019. However the NILdisclosure in prescribed form AOC-2 as on 31st March 2019 is attached and the same formspart of this Report.
The Company has in place a system of Corporate Governance. A separate Report onCorporate Governance is attached as a part of this Annual Report of the Company. Acertificate from Statutory Auditors of the Company regarding compliance of CorporateGovernance is annexed to the Report on Corporate Governance.
The composition and terms of reference of the Audit Committee have been furnished inthe Corporate Governance Report forming part of this Annual Report. The Company Secretaryis acting as the Secretary of the Committee. The Chief Executive Officer and the ChiefFinancial Officer are permanent invitees to the Audit Committee Meetings to giveclarifications on accounts and related issues. The Board has accepted all therecommendations as and when forwarded by the Audit Committee. The Company has in place avigil mechanism viz. Whistle Blower Policy the details of which are available on theCompany's website www.pilaniinvestment.com.
Other details relating to number of meetings dates of such meetings and the attendanceof each member etc. have been given separately in the attached Corporate GovernanceReport.
NOMINATION AND REMUNERATION COMMITTEE
The composition and terms of reference of the Nomination and Remuneration Committeehave been furnished in the Corporate Governance Report forming part of this Annual Report.The Company Secretary is acting as the Secretary of this Committee. The Committee haddevised a policy named as "Nomination and Remuneration Policy" which has beenduly approved by the Board and a copy of the same is available on the Company's websitewww.pilaniinvestment.com and is also attached as Annexure - B hereto and forms part ofthis Report.
Other details relating to number of meetings dates of such meetings and attendance ofeach member etc. have been given separately in the attached Corporate Governance Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The composition and terms of reference of the Corporate Social Responsibility Committee(CSR Committee) have been given in the Corporate Governance Report forming part of thisAnnual Report. The said Committee has devised a policy named as "Corporate SocialResponsibility Policy" which has been duly approved by the Board and a copy of thesame is available on the Company's website www.pilaniinvestment.com and is also attachedas Annexure - C hereto and forms a part of this report.
Other details relating to number of meetings dates of such meetings and attendance ofeach member etc.have been given separately in the attached Corporate Governance Report.
During the year your Company had contributed 7 Lakhs to various Trusts/Institutionsworking in the areas which are in consonance with the CSR policy of the Company.
The details of CSR expenditure in prescribed form are annexed as Annexure - D and formspart of this report.
SUBSIDIARIES / ASSOCIATE COMPANIES
The Company has two Subsidiaries and one Associate as on 31st March 2019. Pursuant tothe provisions of Section129 (3) of the Companies Act 2013 a statement containingsalient features of the financial statements of the Company's Subsidiaries/Associate inForm AOC -1 is attached with this Report.
The Company has is place a proper and efficient Risk Assessment and Management Policywhich identifies evaluates and mitigates the potential business risks.
In compliance with the provisions of Section 204 of the Companies Act 2013 aSecretarial Audit was conducted for the financial year 2018-19 by the Secretarial AuditorM/s. K. C. Dhanuka & Company Practicing Company Secretary. The Secretarial Auditor'sReport is attached as Annexure - E and forms part of this Report.
M/s Vidyarthi & Sons Chartered Accountants (ICAI Firm Registration No: 000112C)were appointed as the Statutory Auditors of the Company for a term of 5 years at the 70thAnnual General Meeting (AGM) from the conclusion of the said meeting until the conclusionof the 75th AGM (subject to ratification of their appointment by the members at every AGM)at a remuneration to be fixed by the Board of Directors.
The Companies Act 2013 and the Companies (Audit and Auditors) Rules 2014 have sincebeen amended vide Notification dated 7th May 2018 of the Ministry of Corporate Affairsand the requirement of ratification of appointment of Statutory Auditors by the members atevery AGM has been done away with. Accordingly no ratification of appointment of M/sVidyarthi & Sons Chartered Accountants as the Statutory Auditors of the Company bythe members is being sought at the ensuing AGM.
During the year the Statutory Auditors have confirmed that they satisfy theindependence criteria required under the Companies Act. 2013 and Code of Ethics issued bythe Institute of Chartered Accountants of India.
AUDITORS' REPORT / SECRETARIAL AUDITORS' REPORT
The observations made in the Auditors' Report / Secretarial Auditors' Report areself-explanatory and therefore do not call for any further explanation under Section 134(3)(f)(i) of the Companies Act 2013.
Information required under Section 197 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as amendedare as per Annexure - F attached hereto and which forms part of this Report.
The Company has not accepted / accessed any public deposit during the year. Hence noinformation is required to be appended to this report in terms of Non-Banking FinancialCompanies Acceptance of Public Deposits (Reserve Bank) Directions 1998.
LOANS GUARANTEES AND INVESTMENTS
The Company has not given loans directly or indirectly to any person or other bodycorporate or given any guarantee or provided any security in connection with a loan to anyother body corporate or person during the year under review.
CONSOLIDATED FINANCIAL STATEMENTS
As stipulated by Regulation 33 of the Listing Regulations the Consolidated FinancialStatements have been prepared by the company in accordance with the applicable AccountingStandards. The audited Consolidated Financial Statements together with Auditors' Reportform part of this Annual Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO
The Company has no manufacturing activity and therefore the disclosure of particularsas required to be appended under Section 134(3)(m) read with Rule 8(3) of the Companies(Accounts) Rules 2014 in so far as it relates to the Conservation of the Energy andTechnology Absorption is not applicable.
No particulars with regard to Foreign Exchange Earnings and Outgo are required as theCompany has no such transactions.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORK PLACE
During the year under review the Company has not received any complaint under theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
During the year under review unpaid / unclaimed dividend for the Financial Year2010-2011 has been transferred to the Investor Education and Protection Fund in compliancewith the provisions of Section 124 and 125 of the Companies Act 2013. In compliance withthese provisions read with the Investor Education and Protection Fund Authority(Accounting Audit Transfer and Refund) Rules 2016 your Company also transferred 528equity shares to the Demat Account of the IEPF Authority in respect of which dividend hadremained unpaid / unclaimed for a consecutive period of 7 years.
The Board of Directors would like to express their sincere appreciation for theassistance and cooperation received from the Financial Institutions Banks GovernmentAuthorities and members during the year under review. The Board of Directors also wish toplace on record their deep appreciation for the committed services rendered by theemployees of your Company.
For and on behalf of the Board of Directors
|Rajashree Birla ||Giriraj Maheswari ||Yazdi P. Dandiwala |
|Chairperson ||Director ||Director |
|(DIN: 00022995) ||(DIN: 00796252) ||(DIN: 01055000) |
August 14 2019