Your Company?s Directors are pleased to present the Fifth Annual Report of the Company together with the Audited Financial Statements of the Company for the Financial Year ended March 31, 2017.
FINANCIAL PERFORMANCE & STATE OF AFFAIRS OF THE COMPANY
Standalone Financial Performance : Statement of Profit and Loss
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Earnings/ (Loss) before Interest, Tax, Depreciation and Amortisation | | |
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Earnings/ (Loss) before Depreciation and Tax | | |
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Earnings/ (Loss) before Tax | | |
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Your Company reported a revenue from operations of
Rs.
103.30 Crore in the Financial Year 2016-17 ("year under review"), recording a steady growth of 5.40% over Financial Year 2015-16 ("previous year").
Earnings/ (Loss) before Interest, Tax, Depreciation and Amortisation were recorded at
Rs.
91.37 Crore, which showed decline by 1.61% over previous year.
Finance costs stood at Rs.159.16 Crore which was a steady increase as compared with the previous year, with average borrowing cost at 7.34% versus 6.80% for the previous year.
Consolidated Financial Statements
In terms of Section 129 of the Companies Act, 2013 ("
Act"
)
, your Company has consolidated its Financial Statements alongwith its Associate Company i.e. Aditya Birla Retail Limited.
The Consolidated Financial Statements form part of this Annual Report and a statement containing the salient features of the Financial Statements of the Associate Company, in the prescribed Form AOC - 1, is annexed as
Annexure I
to this report.
Further, they shall be placed before the ensuing Fifth Annual General Meeting of the Company along with the Standalone Financial Statements of the Company.
(
Rs.
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Net Fixed Assets (Including Capital Work In Progress) | | |
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In view of the loss for the year under review, no amount is proposed to be transferred to reserves and your Directors have not recommended payment of any dividend for the year under review
During the year under review, approval of the Members was obtained by way of a Special Resolution at the Extra Ordinary General Meeting of the Company, to raise funds by issuance of Non-Convertible Debentures for an amount of upto
Rs.
1,250 Crore in one or more tranches, on private placement basis, within the overall borrowing limits of the Company as approved by the Members from time to time ("issuance of NCDs"), in order to continue to avail greater financial flexibility and optimal financing structure.
Further, pursuant to the said approval, during the year under review, your Company issued,
a)575 (Five Hundred and Seventy Five) Listed, Unsecured, Rated, Redeemable, Zero Coupon Non-Convertible Debentures of Rs.1,00,00,000 each (Rupees One Crore each) aggregating to Rs.5,75,00,00,000 (Rupees Five Hundred and Seventy Five crores) on March 10, 2017; and
b)675 (Six Hundred and Seventy Five) Listed, Unsecured, Rated, Redeemable, Zero Coupon Non-Convertible Debentures of Rs.1,00,00,000 each (Rupees One Crore each) aggregating to Rs.675,00,00,000 (Rupees Six Hundred And Seventy Five Crores) on April 5, 2017.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions of Sections 134(3) (c) and 134(5) of the Act, the Directors, to the best of their knowledge and ability, 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)they have 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)they have taken proper, due and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities in your Company;
d)they have prepared the annual accounts on a going concern basis;
e)they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
f)they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
OTHER DISCLOSURES UNDER THE ACT AND RULES MADE THEREUNDER AND OTHER APPLICABLE LAWS, REGULATIONS ETC.
Details of Directors and Key Managerial Personnel ("KMPs") who were appointed or have resigned during the year
A. Directors
During the year under review, Mr. Vijay Kothari, an Independent Director, ceased to be a Director of the Company due to his untimely and sad demise on November 5, 2016. We place our deep appreciation for the valuable services rendered by Mr. Kothari, during his tenure as an Independent Director of the Company.
Also, with a view to broaden the Board and pursuant to the provisions of the Act, during the year under review, Mr. Ramswarup Jalan (DIN: 02345928) was appointed as an Additional Independent Director of your Company for a period of 5 (five) consecutive years w.e.f. May 2, 2017, subject to the approval of the Members. Business with respect to his appointment is one of the agenda items of the ensuing Fifth Annual General Meeting of the Company.
Further, in accordance with the provisions of the Act and the Articles of Association of the Company, members of the Company approved re-appointment of Mr. S. Visvanathan (DIN: 02312556), Non-Executive Director, being liable to retire by rotation, at the Fourth Annual General Meeting of the Company held on September 30, 2016.
In accordance with the provisions of the Act and the Articles of Association of the Company, Ms. Pinky Mehta, Non-Executive Director of the Company, retires by rotation at the ensuing Fifth Annual General Meeting and being eligible offers herself for re-appointment. Business of her re-appointment is one of the agendas of the ensuing Fifth Annual General Meeting of the Company.
Further, the list of the present Directors and Key Managerial Personnel forms part of this Annual Report.
B. Key Managerial Personnel ("KMP")
During the period under the review, Mr. Sameer Patel resigned as the Chief Financial Officer of the Company w.e.f. September 9, 2016. Consequently, Mr. Umesh Kamdar was appointed as the Chief Financial Officer of the Company w.e.f. September 20, 2016.
Further, Ms. Divyata Raval also resigned from the post Company Secretary and Manager of the Company w.e.f. April 21, 2017. Accordingly, Mr. Hardik Bhuta was appointed as the Company Secretary and Manager of the Company w.e.f. May 29, 2017.
The aforesaid appointments were based on the recommendation of the Nomination and Remuneration Committee of the Board ("NRC").
Company's policy on appointment of Directors and KMPs and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of section 178 of the Act
Board has, on recommendation of the Nomination and Remuneration Committee of the Board ("NRC"), adopted a Nomination Policy, which
inter alia
enumerates the Company?s policy on appointment of Directors and KMPs. The said policy is annexed as
Annexure II
to this report.
Further, the Board has, also on recommendation of NRC, adopted a policy entailing Executive Remuneration Philosophy, which covers remuneration philosophy covering the Directors, KMPs and employees included in Senior Management of the Company. The said policy is annexed as
Annexure III
to this report.
Number of Meetings of Board
During the year under review, the Board of your Company met four times, on following occasions:
The intervening gap between the two meetings was well within the limits as prescribed under the provisions of the Act.
Manner of formal evaluation by the Board of its own performance and that of its Committees and individual Directors
Pursuant to the provisions of the Act, the Board is required to evaluate its own performance and that of its committees and individual Directors ("Evaluation").
To enable such evaluation, an evaluation framework has been adopted by all the companies of the Aditya Birla Group, which is devised with a view to provide a more structured approach for the evaluation and which lays down overall guidelines and processes to be adopted for the evaluation of performance. The NRC and the Board have, vide their respective resolution dated May 28, 2015, approved the said Evaluation Framework.
The evaluation framework for assessing the performance of Directors of your Company comprises of their contribution at the meeting(s), strategic perspective or inputs regarding the growth and performance of your Company, among others.
Pursuant to the provisions of the Act, the Directors have carried out the annual performance evaluation of the Board, Independent Directors, Non-Executive Directors and the Committees of the Board. The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Individual Directors, the Board as a whole and its Committees with the Company.
Statement on declaration given by Independent Directors under Sub-Section (6) of Section 149 of the Act
All the Independent Directors of the Company have given their respective declarations stating that they meet the criteria of Independence as provided in Section 149(6) of the Act.
Composition of the Committees of the Board:
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| -Mr. Vijay Agarwal , Non-Executive Director |
-Mr. Ramswarup Jalan, Non-Executive Director* |
-Ms. Pinky Mehta, Non-Executive Director |
-Mr. S. Visvanathan, Non-Executive Director |
Nomination Remuneration Committee | -Mr. Vijay Agarwal, Non-Executive Director |
-Mr. Ramswarup Jalan, Non-Executive Director * |
-Mr. S. Visvanathan, Non-Executive Director |
* The above composition of the Committees of the Board is as on the date of signing of this report and Mr. Jalan was appointed as a Member of the above Committees w.e.f. May 2, 2017.
Extract of Annual Return
As required under the provisions of Sections 92(3) & 134(3)(a) of the Act and the Companies (Management and Administration) Rules, 2014, an Extract of the Annual Return in Form MGT-9, is annexed as
Annexure IV
to this report.
Explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made (i) by the Statutory Auditor in his report; and (ii) by the Secretarial Auditor in his secretarial audit report
M/s. S. S. Rathi & Co, Chartered Accountants [ICAI Registration Number 108726W], were appointed as Statutory Auditors of the Company at the Fourth Annual General Meeting of the Company held on September 30, 2016, to hold office for a period of 2 (two) consecutive years i.e. until the conclusion of the Sixth Annual General Meeting of the Company, subject to the ratification of their appointment by Members at every Annual General Meeting.
Report given by the Statutory Auditors on the Financial Statements of the Company is disclosed as part of the "inancial Statements".
There has been no qualification, reservation, adverse remark or disclaimer given by the Statutory Auditors in their Report for the year under review.
The Notes to the Financial Statements are self-explanatory and do not call for any further comments.
M/s. Dilip Bharadiya & Associates, Practising Company Secretaries, were appointed as Secretarial Auditor of your Company, to conduct Secretarial Audit for the year under review, pursuant to the provisions of Section 204 of the Act.
There has been no qualification, reservation, adverse remark or disclaimer given by the Secretarial Auditor in his Report for the year under review. The Secretarial Audit Report given by the Secretarial Auditor of the Company is annexed as
Annexure V
to this report.
Particulars of loans and investments under Section 186
Particulars of the loans and investments under Section 186 of the Act have been disclosed in the notes to the Financial Statements of the Company for the year under review and are self-explanatory.
Particulars of contracts or arrangements with related parties referred to in sub-section (1) of Section 188 in the prescribed form
All contract(s)/ arrangement(s)/ transaction(s) entered into by your Company with its related parties, during the year under review, were
-in "o
rdinary course of business"
of the Company; and
-on "
an arm's length basis"
;
not "
material"
as per the provisions of Section 188(1) of the Act read with Companies (Meetings of Board and its Powers) Rules, 2014.
Accordingly, Form AOC-2, prescribed under the provisions of Section 134(3)(h) of the Act and Rule 8 of the Companies (Accounts) Rules, 2014, for disclosure of details of Related Party Transactions, which are "not at arm's length basis" and also which are "material and at arm's length basis", is not provided as an Annexure of the Directors? Report. However, details of all the Related Party Transactions entered into during the year under review and as on March 31, 2017, are disclosed in notes to the Financial Statements of the Company for the year under review.
However, all Related Party Transactions entered into during the year under review were approved by the Audit Committee and Board, from time to time and the same are disclosed as part of the Financial Statements of your Company for the year under review, as per the applicable provisions of the Act.
Also, pursuant to the provisions of the Act, the Board has, on recommendation of its Audit Committee, adopted a Policy on Related Party Transactions.
Details relating to deposits
During the year under review, the Company has not accepted any fixed deposits from the public which falls under the ambit of Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014.
Thus, as on March 31, 2017, there were no deposits which were unpaid or unclaimed and/ or due for repayment.
Names of companies which have become or ceased to be its Subsidiaries, joint ventures or associate companies during the year
During the year, no Company became/ ceased to be a Subsidiary/ Joint Venture/ Associate of the Company.
At the end of the year under review i.e. on March 31, 2017 and also as on the date of this report, your Company had only one Associate Company viz. Aditya Birla Retail Limited.
Details in respect of adequacy of internal financial controls with reference to the Financial Statements
Company has established a system of internal controls and business processes, comprising of policies and procedures, with regards to efficiency of operations, financial reporting and compliance with applicable laws and regulations etc. commensurate with its size and nature of the business. Regular checks are undertaken to ensure that systems and processes are followed effectively and systems and procedures are periodically reviewed to keep pace with the growing size and complexity of your Company?s operations. Company also has a well-defined process for an on-going management reporting and periodic review of operations to ensure effective decision-making. During the year under review, proper internal financial controls were in place and the financial controls were adequate and were operating effectively.
Details with respect to development and implementation of a Risk Management Policy
Considering the susceptibility of the Company to the inherent business risks, the Board has, in compliance with the provisions of the Act, adopted a Risk Management Policy to:
-
develop and implement Risk Management procedure/ plan including identification therein of elements of risk, if any, which may threaten the existence of the Company;
-enable the Company to proactively manage the uncertainty, changes in the internal & external environment to limit negative impacts; and
-capitalize on opportunities along with minimization of identifiable risks.
In terms of the Risk Management Policy and as per the provisions of the Act, Audit Committee of the Board has the overall responsibility for monitoring and reviewing the Risk Management Plan and associated practices of your Company.
Details of establishment of Vigil Mechanism
The Board has, on recommendation of its Audit Committee, adopted a Vigil Mechanism Policy thereby enumerating the Vigil/ Whistle Blower mechanism, for Directors and employees of your Company, to report concerns about unethical behaviour, actual or suspected fraud and to voice genuine concerns or grievances about unprofessional conduct without fear of reprisal. Adequate safeguards are provided against victimization to those who avail of the mechanism and direct access to the Chairperson of the Audit Committee is provided to them.
Corporate Social Responsibility
Considering the turnover, net worth and profitability of the Company, the provisions of Section 135 of the Act and the rules made thereunder, are not applicable to the Company.
Conservation of energy, technology absorption, foreign exchange earnings and outgo
Your Company consciously makes all efforts to conserve energy across its operations. However, since the company is not having any manufacturing activity, your Directors have nothing material to report on Conservation of Energy and Technology Absorption as required under Section 134(3)(m) of the Act.
During the year under review:
-
Foreign exchange earnings for the year ended on March 31, 2017: NIL
-Foreign exchange outgo for the year ended on March 31, 2017: NIL.
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
No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status operations of your Company in future.
PARTICULARS OF EMPLOYEES AS PER SECTION 197(12) & RULE 5 OF THE COMPANIES (APPOINTMENT & REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014
-During the year, there was no change in the nature of business of your Company.
-There was no revision in the Financial Statements for the Financial Year, other than as necessitated in terms of the provisions of the Act, if any.
-Your Company has not issued any shares with differential voting rights.
-Your Company has not issued any Sweat Equity Shares.
-No Material changes and commitments have occurred between the end of the Financial Year of the Company to which the Financial Statements relate and the date of the report affecting the financial position of the Company.
We place on record our sincere appreciation for the continued support which your Company has received from its customers, suppliers, investors, promoters, bankers and group companies.
| | For and on behalf of the Board of Directors |
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Date: May 29, 2017 Form AOC-1 (Pursuant to first proviso to sub-section (3) of section 129 of the Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014) Statement containing salient features of the financial statement of subsidiaries or associate companies or joint ventures Part "A": Subsidiaries As on March 31, 2017, there is no subsidiary of the company. Part "B": Associates and Joint Ventures Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures Name of Associates/ Joint Ventures | Aditya Birla Retail Limited (Associate Company) | 1. | Latest Audited Balance Sheet Date | March 31, 2017 | 2. | Date on which the Associate was associated | March 1, 2013 | 3. | Shares of Associate/Joint Ventures held by the company on the year end | | Number | 9,56,75,000 | Amount of Investment in Associates/ Joint Venture | Rs. 95,67,50,000 | Extent of Holding % | 32.12% | 4. | Description of how there is significant influence | As per the explanation to Section 2(6) of the Companies Act 2013: "significant influence" means control of at least twenty per cent of total share capital, or of business decisions under an agreement. The Company holds 32.12% of the total share capital in Aditya Birla Retail Limited. | 5. | Reason why the associate/joint venture is not consolidated | NA | 6. | Net worth attributable to shareholding as per latest audited Balance Sheet | Rs. (2,03,006.47) | 7. | Profit/Loss for the year | | (i) Considered in Consolidation | - | (ii) Not Considered in Consolidation | Rs. (64,413.78) |
Note : As on March 31, 2017, there is no Joint Venture of the company with any other Company. | For and on behalf of the Board of Directors | | Mr. S. Visvanathan Non-Executive Director DIN : 02312556 | Ms. Pinky Mehta Non-Executive Director DIN : 00020429 | | Mr. Umesh Kamdar Chief Financial Officer | Mr. Hardik Bhuta Company Secretary and Manager | Place: Mumbai Date: May 29, 2017 | |
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