DIRECTORS' REPORT To, The Members, Your Directors have pleasure in presenting their Sixth Annual Report on the business and operations of the Company together with Audited Statement of Accounts for the year ended 31st March, 2015. DIVIDEND : Your Directors do not recommend any dividend on the equity shares for the year ended 31st March, 2015. MANAGEMENT DISCUSSION AND ANALYSIS The main object of the Company is to make strategic investments in the Kalyani Group Companies. The Company is a Non Deposit taking Core Investment Company, as defined in the Core Investment Companies (Reserve Bank) Directions, 2011. Since the Company is not a Systemically Important Non Deposit taking Core Investment Company, it is not required to obtain Certificate of Registration under Sec. 45-IA of the Reserve Bank of India Act, 1934. COMPANY PERFORMANCE During the Financial Year under review, your Company earned total income of 20.73 Crores (previous years 22.92 Crores). The net profit after tax is 18.75 Crores (previous years 19.95 Crores). OPERATIONS OF THE COMPANY The main operations of the Company are that of investments and majority of the investments of the Company are in the nature of strategic investments in Kalyani Group Companies. The investment pattern of the Company also complies with the requirement for the Company continuing to qualify as a Non Deposit taking Core Investment Company. The main source of income for the Company is in the form of dividends as declared by these companies. HUMAN RESOURCES As on 31st March 2015, the Company has 2 employees, including the CEO / CFO. CONCERNS AND THREATS • Fluctuations in the securities market and global economic scenario, may pose a risk of devaluation of the investments made by the Company. • Main source of income for the Company is dividend from the Kalyani Group Companies. • The risks and concerns associated with the businesses / operations of these investee companies, which may impact the performance of these companies, could result in variation in dividends declared by these companies. • Non recovery of principal of the amounts lent and interest thereon. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has adequate internal control systems to ensure operational efficiency and accuracy in financial reporting and compliance of various laws and regulations. The internal control system is supported by the internal audit process. The internal audit is conducted in house. The Audit Committee of the Board reviews the Internal Audit process and the adequacy and effectiveness of internal audit and controls periodically. CAUTIONARY STATEMENT Statements in this Report, particularly those which relate to Management Discussion and Analysis, describing the Company's objectives, projections, estimates and expectations may constitute "forward looking statements" within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied. LISTING FEES The annual listing fees for the year under review have been paid to the Stock Exchanges, where your Company's shares are listed. SUBSIDIARY COMPANIES The Company does not have any subsidiary company as on 31st March, 2015. PARTICULARS OF INFORMATION FORMING PART OF THE BOARD'S REPORT PURSUANT TO SECTION 134 OF THE COMPANIES ACT, 2013, RULE 8 OF THE COMPANIES (ACCOUNTS) RULES, 2014 AND RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014 EXTRACT OF ANNUAL RETURN The details forming part of the extract of Annual Return in Form MGT - 9 is annexed herewith as 'Annexure I' to this Report. NUMBER OF MEETINGS OF THE BOARD During the year under review, six Board Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and the Listing Agreement. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirements of Section 134(5) of the Companies Act, 2013, in respect of Directors' Responsibility Statement, your Directors' state that: a) in the preparation of the Annual Financial Statements for the year ended 31st March, 2015, the applicable accounting standards have been followed along with the proper explanation relating to material departures; b) accounting policies as mentioned in Note - 2 to the Financial Statements have been selected and applied consistently. Further judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015 and of the profit of the Company for the year ended on that date; c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) the Annual Financial Statements have been prepared on a going concern basis; e) proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; and f) proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. A STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION The Board had on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management Personnel and their remuneration. The policy is appended as 'Annexure II' to this Report. AUDITORS a. Statutory Auditors The Board of Directors has recommended ratification of re-appointment of Mr. Prashant V. Deo, Chartered Accountant, Pune (Membership Number 041609), as Statutory Auditors of the Company from the conclusion of ensuing Annual General Meeting (AGM) to be held on 19th September, 2015 till the conclusion of next Annual General Meeting. b. Secretarial Audit Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. SVD & Associates, Company Secretaries, (Membership No. FCS 1321 CP No. 965), to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith as 'Annexure III' to this Report. EXPLANATION ON COMMENTS ON STATUTORY AUDITORS' AND SECRETARIAL AUDITORS' REPORTS There are no qualifications, reservations or adverse remarks or disclaimers made by Mr. Prashant V. Deo, Statutory Auditors, in his Audit Report. M/s. SVD & Associates, Practicing Company Secretary, in their Secretarial Audit Report have made certain qualifications. The auditors qualifications and Boards explanation thereto are summarized as under: Auditors Qualifications: The Company has not filed Form MGT14 as required u/s 179 of the Companies Act, 2013 for the board resolutions as mentioned below: A) Disclosure of interest by Directors as required u/s 184 (1) of the Companies Act, 2013. B) Approval of Board's Report and Corporate Governance Report C) Appointment of Internal Auditor as required u/s 138 of the Companies Act, 2013 Boards' explanation :Company has initiated the process for filing of application of condonation of delay for the same. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT UNDER SECTION 186 During the year, the Company has not invested any funds in equity capital of any company. The closing balances of investments which would be covered under Section 186 of the Companies Act, 2013, are disclosed in the Schedule of Non-Current Investments in the Financial Statements. The company has granted short term and long term loans of Rs. 9.28 Cr. (net) and issued corporate guarantees of Rs. 76 Cr. (net) during the year. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SUBSECTION (1) OF SECTION 188 OF THE COMPANIES ACT, 2013 Pursuant to the provisions of Section 134 of the Companies Act, 2013, read with Rule 8 (2) of the Companies (Accounts) Rules, 2014, the particulars of contracts or arrangements entered into by the Company with Related Parties have been done at arm's length and are in the ordinary course of business. Hence, no particulars are being provided in Form AOC - 2. Related Party disclosures as per AS -18 have been provided in Note no. 3.25 to the Financial Statements. STATE OF COMPANY'S AFFAIRS Discussion on state of Company's affairs has been covered in the Management Discussion and Analysis. AMOUNTS PROPOSED TO BE CARRIED TO RESERVES Particulars of the amounts proposed to be carried to reserves have been covered as part of the financial performance of the Company. MATERIAL CHANGES AND COMMITMENTS BETWEEN THE DATE OF THE BALANCE SHEET AND THE DATE OF REPORT There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the Financial Year of the Company to which the Financial Statements relate and the date of the report, except as disclosed elsewhere in this report. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO A. Conservation of Energy and Technology Absorption The Company has no particulars to report regarding conservation of energy, technology absorption as required under Section 134 (3) (m) of the Companies Act, 2013, read with Rules thereunder. RISK MANAGEMENT POLICY The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified are systematically addressed through mitigating actions on a continuing basis. These are discussed at the meetings of the Audit Committee and the Board of Directors of the Company. CORPORATE SOCIAL RESPONSIBILITY (CSR) The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013. The details of the CSR Policy and initiatives taken by the Company towards CSR during the year are annexed as 'Annexure IV' to this Report. BOARD EVALUATION Pursuant to provisions of the Companies Act, 2013, Rules thereunder and Clause 49 of Listing Agreement, the Board has carried out evaluation of its own performance and that of its Committees and individual Directors. PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES: This information is not required to be given since the Company is not required to prepare consolidated accounts for the year ended 31st March, 2015. CHANGE IN THE NATURE OF BUSINESS, IF ANY There has been no change in the nature of business during the Financial Year under review. Directors and KMP's resigned during the year Non of the directors or KMPs resigned during the year ended 31st March, 2015. Directors proposed to be re-appointed at the ensuing Annual General Meeting Mr. A.B. Kalyani retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Ms. A.A. Sathe was appointed as Additional Director on 31st March, 2015. Her term of office expires at the end of the ensuing Annual General Meeting. A proposal for her appointment of Independent Director is placed for the approval of members at the ensuing Annual General Meeting. The brief resumes and other details relating to Directors who are proposed to be re-appointed, as required to be disclosed under Clause 49 of the Listing Agreement, form part of the Notes and Statement setting out material factsannexed to the Notice of the Annual General Meeting. NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR None. DETAILS OF DEPOSITS WHICH ARE NOT IN COMPLIANCE WITH THE REQUIREMENTS OF CHAPTER V OF THE COMPANIES ACT, 2013 None. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE The Company has neither received nor is aware of any such order from Regulators, Courts or Tribunals during the year. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS The Company has suitable internal control system comprising of proper checks and balances, policies and procedures. This includes code of conduct, whistle blower policy, MIS and internal audit mechanism. The Audit Committee along with Management review the internal audit and internal controls on a regular basis. COMPOSITION OF AUDIT COMMITTEE The composition of the Audit Committee has been mentioned in the Corporate Governance Report annexed to this Report. INFORMATION FORMING PART OF THE DIRECTORS' REPORT PURSUANT TO RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014 The relevant information pursuant to Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed at 'Annexure V' to this Report. PARTICULARS OF EMPLOYEES The particulars of employees pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. During the year, no employee was in receipt of remuneration in excess of the limits prescribed under Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, requiring disclosures prescribed thereunder, in this report. VIGIL MECHANISM The Company has formulated and implemented the Whistle Blower Policy / Vigil Mechanism. This has provided a mechanism for directors and employees of the Company and other persons dealing with the Company to report to the Chairman of the Audit Committee; any instance of unethical behaviour, actual or suspected fraud or violation of the Company's code of conduct. The aforesaid policy has also been uploaded on the Company's website. CASH FLOW A Cash Flow Statement for the year ended 31st March 2015 is attached to the Balance Sheet. CORPORATE GOVERNANCE A report on the Corporate Governance, along with the certificate of compliance from the Auditors, forms part of the Annual Report. ACKNOWLEDGMENTS Your Directors wish to place on record, their appreciation for the contribution made and support provided to the Company by the shareholders, employees and bankers, during the year under the report. For and on behalf of the Board of Directors B.B. Hattarki Director DIN:00145710 A.B. Kalyani Director DIN:00089430 Pune: 22nd July, 2015 |