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Kalyani Forge

BSE: 513509|NSE: KALYANIFRG|ISIN: INE314G01014|SECTOR: Castings & Forgings
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Directors Report Year End : Mar '18    Mar 17

Dear Shareholders,

The Board of Directors of your Company are pleased to present the 39th Annual Report together with the Audited Statement of Accounts of Kalyani Forge limited (“the Company”) for the year ended March 31, 2018.

Financial Performance:

The summarized standalone results of your Company are given below.

Rs. in lakhs

Particulars

Financial year ended Standalone

31/03/2018

31/03/2017

Total income from operations (net)

26,536.00

25,212.00

Profit/(loss) before Interest, Depreciation & Tax (EBITDA)

2,789.00

1919.00

Finance Charges

634.00

378.00

Depreciation

1,295.00

1,041.00

Tax Expenses

263.00

172.00

Net Profit/(Loss) After Tax

656.00

348.00

Balance of Profit from Previous Year

8,202.00

7,747.00

Profit available for Appropriation

8,810.77

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 to Rs 26,536 Lakhs against Rs. 25,212 Lakhs for the FY 16-17, your Company’s Profit after tax stood at Rs. 656 Lakhs as against profit of Rs 348 Lakhs last Year. Your company has successfully 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.

Reserves:

The Company has not transferred any amount to General Reserves for the year under review.

Dividend:

Your Directors are pleased to recommend for approval of members a dividend of Rs. 3.50 per equity share (35%) at the face value of Rs 10/- per share for the Year ended 31st March, 2018

Capital/ Finance:

During the year, the Company has not issued/allotted equity or preference shares. As on 31st March, 2018 the issued, subscribed and paid up share capital of your Company is at Rs. 36,380,000/-, comprising 36, 38,000 equity shares of Rs.10/- each.

Fixed Deposits:

Your Company has not accepted any deposits from public, Therefore, details relating to deposits covered under Chapter V of the Companies Act, 2013 are not applicable to the Company.

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 as Annexure 1.

Transfer of Amounts to Investor Education and Protection Fund:

Your Company has transferred funds lying unpaid or unclaimed for a period of seven years to Investor Education and Protection Fund (IEPF).

Pursuant to the provisions of the Investor Education Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has already filed the necessary form and uploaded the details of unpaid and unclaimed 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 are given 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 the Corporate Governance annexure to this report.

Declaration by Independent directors:

Mr. Pradeep Nadkarni, Mr. Abhijit Sen & Mr. Vishwas Chitrao are Independent Directors on the Board of your Company. In the opinion of the Board and as confirmed by these Directors, they fulfil the conditions specified in section 149 of the Companies Act, 2013 and the Rules made thereunder about their status as Independent Directors of the Company.

Directors and Key Managerial Personnel:

Mr. Gaurishankar N Kalyani, Non-Executive Director and Mr. Viraj Gaurishankar Kalyani, Executive Director retires by rotation at the forthcoming Annual General Meeting and being eligible, offers themselves for reappointment.

Mr. Chandranil Belvalkar resigned from the post of Company Secretary during the year and Mr. Nilesh Vitekar was appointed on February 13, 2018.

Formal Annual Evaluation:

SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 mandates that the Board shall monitor and review the Board evaluation framework. Also, the Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its Committees and individual Directors. In addition, Schedule IV of the Companies Act, 2013 states that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the Director being evaluated.

In pursuance of above, the Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which includes criteria for performance evaluation of the Non-Executive Directors and Executive Director.

The Company commenced with the review of the best practices prevalent in the industry and evaluation of Board members. On the basis of review and the Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors, a process of evaluation was followed by the Board for its own performance and that of its Committees and individual Directors.

At a Separate meeting of Independent Directors held on 31 st March 2018, performance evaluation of Chairperson, Non- Independent Directors, and the Board of Directors was carried out by Independent Directors which has also reviewed the adequacy of the flow of information between the Company Management and Board.

The detailed programme for familiarisation of Independent Directors with the Company, their roles, rights and responsibilities in the Company, nature of business, AOP, business model 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 independence and Remuneration Policy for Directors, Key Managerial Personnel and other employees is attached herewith and marked as Annexure 2.

Highlights on Company’s policy on Sexual Harassment:

As per “SEXUAL HARASSMENT OF WOMAN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013”, the highlights of the policy adopted by the company is attached herewith marked as Annexure 3.

Holding and Subsidiaries:

During the period under review the Company does not have any holding or Subsidiary company.

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 of five years with effect from the conclusion of 37th Annual General Meeting of the Company held on August 2, 2016.

Pursuant to the provisions of Section 139 of the Companies Act, 2013 read with Rule 3(7) of the Companies (Audit and Auditors) Rules, 2014 the appointment of Statutory Auditors shall be placed for ratification at every Annual General Meeting.

Accordingly a letter is received from M/s K.S. Aiyar & Co. Chartered Accountants confirming that appointment if made shall be as per eligibility required under Section 141 of 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 the conclusion of the ensuing Annual General Meeting till the conclusion of the 40th Annual General Meeting of the Company.

Internal financial controls:

The internal financial controls with reference to the Financial Statements are commensurate with the size and nature of business of the Company.

Cost Audit:

As per the Cost Audit Orders, Cost Audit is applicable to the Company’s forging business for the FY 2018-19.

In view of the same and in terms of the provisions of Section 148 and all other applicable provisions of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, M/s. R. A Chincholkar & Co, Cost Accountants have been appointed as Cost Auditors to conduct the audit of cost records of your company for the financial year 2018-19. The remuneration proposed to be paid to them requires ratification of the shareholders of the Company. In view of this, your ratification for payment of remuneration to Cost Auditors is being sought at the ensuing Annual General Meeting.

Secretarial Audit:

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 Secretarial Auditors of the Company. The report of the Secretarial Auditors is enclosed as annexure 4 to this report. The Directors have noted the qualifications in Secretarial Audit Report. As there was frequent attrition in the officers/employees of the Company due to which compliance mechanism was disturbed, however necessary steps have been taken to ensure the required compliances.

Human Resources:

Your Company treats its “human resources” as one of its most important assets.

Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway. Your Company’s thrust is on the promotion of talent internally through job rotation and job enlargement.

Related Party Transactions:

All contracts/ arrangement/ transactions entered by the Company during the Financial Year 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 the Annual 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 the policy of the Company on materiality of related party transactions which is available on the 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 and implemented the Risk Management Policy and the Audit Committee of the Board reviews the same 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 results, operations / performance and the future prospects of the Company form part of this Annual Report.

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. 3,71,307/- out of which it has spent Rs. 3,00,000/- and is in discussion with several projects to spend remaining amount. The disclosures as per Rule 9 of Companies (Corporate Social Responsibility Policy) 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 the activities stated below with a preference to implement these projects and programme in the areas in which it operates:

- Eradicating hunger, poverty and malnutrition, promoting health care including preventive health care and sanitation and making available safe drinking water;

- Promoting education including special education and employment enhancing vocation skills especially among children, women, elderly and the differently abled and livelihood enhancement projects.

- Promoting gender equality, empowering women, setting-up homes and hostels for women and orphans; setting up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups.

- Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintaining quality of soil, air and water.

- Protection of national heritage, art and culture including restoration of buildings and sites historical importance and works of art; setting-up public libraries, promotion and development of traditional arts and handicrafts.

- Measures for the benefit of armed forces veterans, war widows and their dependents.

- Training to promote rural sports, nationally recognised sports, Paralympics Sports and Olympic Sports.

- Contribution to the Prime Minister’s National Relief Fund or any other fund set up by the Central Government or the State Governments for socio-economic development and relief and funds for the welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women.

- Contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Government.

- Rural development Projects.

Particulars of Employees:

Pursuant to the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, 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 report genuine 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 of corporate governance as stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is annexed with the report.

Details of conservation of energy, technology absorption, foreign exchange earnings and outgo

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.

(a) Conservation of energy

(b) Technology absorption

Total energy consumption and energy consumption per unit of production as per Form - A of the Annexure to the Rules is as given below:

(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 components for Domestic & Export.

1) During the year 2017-18, Company made significant achievements in the area of product Development. The Company developed variety of products as per the specific requirements of the customers such as Knuckle Arm, Turbo Charger Ring, Under Carriage and Steering Parts.

2) New Design Die Holders & Base Bolsters for accommodating Square & Round Parts

3) Die Locks introduced for Warm and hot forging components to reduce die setup time and to improve forging quality.

4) Introduced W303 Die material for Tulip Warm Forging Dies to improve die life - by VAVE Approach.

5) The Company has spent Rs. 506.03 Lakhs during the Financial Year 2017-18 on Research and 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 premium components.

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. 4,01,10,847/- and the total foreign exchange earned Rs. 19,33,48,626/- .

(e) Technology absorption, adaptation and Innovation:

Through In-house Research and Development Company is focusing on developing Turbo Chargers, 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 the Companies Act, 2013, your Directors confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the Company for that period;

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 the Company and that such internal financial controls are adequate and were operating effectively.

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Acknowledgement:

Your Directors place on record their appreciation for employees at all levels, who have contributed to the growth and performance of your Company.

Your Directors also thank the clients, vendors, bankers, shareholders and advisers of the Company for their continued support. Your Directors also thank the Central and State Governments, 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

Source : Dion Global Solutions Limited
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