Kotak Mahindra Prime Limited ANNUAL REPORT #KonaKonaKotak

Transcription

1 Kotak Mahindra Prime Limited ANNUAL REPORT #KonaKonaKotak

2 DIRECTORS REPORT To the Members of KOTAK MAHINDRA PRIME LIMITED The Directors present their Nineteenth Annual Report together with audited accounts of your Company for the year ended 31st March FINANCIAL RESULTS Year ended 31st March 2015 ` in Lakhs Year ended 31st March 2014 Gross Income 264, , Profit before Depreciation and Tax 77, , Depreciation Profit before Tax 77, , Provision for Tax 26, , Profit after Tax 50, , Balance of Profit from previous years 173, , Amount available for appropriation 223, , Appropriations: Proposed Dividend on Preference Shares Proposed / Interim Dividend on Equity Shares Corporate Dividend Tax Special Reserve u/s 45IC of the RBI Act, , , Surplus carried forward to the Balance Sheet 213, , INTERNAL FINANCIAL CONTROLS The Board confirms that there are internal controls in place with reference to the Financial Statements and that such controls are adequate and operating effectively. DIVIDEND The Directors recommend Dividend on Equity ` 0.60 per equity share (Previous Year: ` 0.60 per equity share). Dividend recommended on Redeemable, Non- Cumulative Non-Convertible Preference Shares is ` 1 per share (Previous Year: ` 1 per share). DEBENTURES Pursuant to various circulars issued by the Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI) from time to time, the Company continues to issue debentures on private placement basis and list mostly all debentures issued, on the Bombay Stock Exchange Limited under Information Memorandums issued by the Company from time to time. The Company has appointed IDBI Trusteeship Services Limited, Asian Building, Ground Floor, 17 R.Kamani Marg, Ballard Estate, Mumbai as Debenture Trustees to the issues. CAPITAL ADEQUACY The Capital to Risk Assets Ratio (CRAR) of your Company as on 31st March 2015 was at 18.35%. CREDIT RATING The Company s long-term borrowings had been upgraded during the year from AA+ (with Stable Outlook) to AAA (with Stable Outlook) by CRISIL and ICRA. Further the Company availed long-term borrowings ratings from India Ratings & Research (A Fitch Group Company) & CARE which have been assigned AAA (with Stable Outlook). The Company s Tier II Subordinated Debts are dual rated by CRISIL and ICRA, with a rating of AAA (with Stable Outlook). 1

3 The Company s short-term borrowing program rated by CRISIL continued to enjoy the highest rating of A1+. Standard & Poor s has assigned the issuer credit rating of BBB- (with Stable Outlook) to the Company in July The assessment of your Company s risk profile by the rating agencies strengthens the confidence placed by a large pool of investors in your Company. AAA indicates highest degree of safety regarding timely servicing of financial obligations and carries a very low credit risk. FINANCE Your Company continues to be a Non- Deposit Accepting Asset Financing company. It has well diversified and large pool of lenders comprising of Public Sector Banks, Private and MNC Banks, Mutual Funds, Insurance Companies, Pension Funds, Financial Institutions, Foreign Institutional Investors (FII) and Corporates. Your Company introduced new investors during the year and continued to borrow through instruments like Debentures (NCDs), Commercial papers, etc. Further Asset Liability Management continues to be focus of your Company. During the financial year the growth and growth expectations in the economy gained momentum with GDP growth expected to be at about 7.5%. With RBI s GDP growth(y-o-y) projected at 7.8% for FY 2016, India will be a bright spot in the global economy. During the year, liquidity in the system was maintained in deficit mode, though largely in a comfort zone with the help of RBI s new Liquidity Framework. The RBI adjusted policy rates downwards by cumulative 50bps (repo - reverse repo rates) during the year to 7.5% - 6.5% respectively. Going forward, RBI is expected to stay focused on ensuring that the economy dis-inflates gradually, with CPI inflation targeted at 6 per cent by January 2016 as per the new Monetary Policy Framework Agreement between the RBI and the Government of India signed in February Global growth is likely to slowly firm up through 2015 and 2016, supported by stronger recovery in the developed economies, anticipation of continued relatively soft energy prices and monetary policy stances turning highly accommodative in other developed and several emerging market economies providing policy stimulus to address their respective growth concerns. Global financial markets have been boosted by postponement of US Fed rate hike, which is anticipated later this year. Downside risks mainly emanate from the slowdown in China, geopolitical risks surrounding oil and commodity price movements and disorderly behaviour by currency markets on account of US Fed rate hike and potential Greece exit from Euro zone. Your Company with its strong risk management philosophy and practices is well geared to meet the challenges of a dynamic interest rate and liquidity environment. MANAGEMENT DISCUSSION AND ANALYSIS Company Business Your Company is primarily into car finance, engaged in financing of retail customers of passenger cars and multi-utility vehicles and inventory and term funding to car dealers. Your Company finances new and used cars under retail loan, hire purchase and lease contracts. The main streams of income for your Company are retail income, dealer finance income and fee based income. Your Company also receives income from loans against securities, securitization / assignment transactions, purchase of non- performing assets, personal loans, corporate loans and developer funding. The major expenses for your Company are interest expense, business sourcing expense and cost of running operations. During the Financial Year , your Company s retail vehicle disbursements were at ` 730,459 lakhs as against ` 633,489 lakhs in the previous year. During the year under review, gross advances stood at ` 1,977,049 lakhs as against ` 1,799,884 lakhs in the previous year. Your Company continued to focus on cost control and credit losses, while improving its positioning in the car finance market by scaling up the business. As detailed in the Financial Results section above, Gross Income of your Company increased from ` 252, lakhs in to ` 264, lakhs in Profit before Tax was at ` 77, lakhs in as compared to ` 75, lakhs in , an increase of 3%. The credit loss ratio of your Company was at 0.43% in a very challenging year. There have been certain instances of frauds involving an aggregate amount of ` lakhs, also reported in annexure to auditors report. The said instances are inherent in the nature of business of the Company and adequate provision in respect thereof has been made in the accounts for the year. Segment wise performance The Company has identified segments as Vehicle Financing, Other Lending activities and Treasury and Investments. 2 ANNUAL REPORT

4 Vehicle Finance includes Retail and Wholesale trade finance and the segment result is Profit before tax of ` 42, lakhs. Other Lending activities include financing against securities, securitization, debenture investment / lending in commercial real estate and other loan / fee based services and the segment result is Profit before tax of ` 32, lakhs. Treasury and Investment activities include proprietary trading in shares and the segment result is Profit before tax of ` 1, lakhs. Industry Scenario The passenger car market in India saw a growth of 3.2% for the Financial Year as compared to a de-growth of 5.9% for Total unit sales of cars and MUV s crossed lakh units in financial year Prospects Passenger car sales are likely to grow in the range of 5-6%. Your Company has, carved out a niche for itself in the car-financing segment focusing on distribution and relationship management across manufacturers, dealers, channel partners and customers. Fee based income is an important initiative of your Company. Dedicated infrastructure is in place to give a further impetus to the growth of fee based income with a twin objective of offering value added services to customers and leveraging the large existing customer database to generate further fee based income. Customer knowledge, easy accessibility through its wide network of branches and a firm commitment to deliver superior customer service are key drivers for your Company s performance. Internal Controls The Internal Control department of Kotak Mahindra Bank Limited regularly conducts a review to assess the financial and operating controls at various locations of your Company including Head Office functions and at branches. Reports of the audits conducted by the Internal Control department are presented to the Audit Committee. Representatives of the statutory auditors are permanent invitees to the Audit Committee. Human Resources The Company is professionally managed with key management personnel having relatively long tenure with the Company. Your Company follows a policy of building strong teams of talented professionals. Your Company encourages and facilitates long term careers with your Company through carefully designated management development programs and performance management systems. The total number of on roll employees was seven hundred forty eight at end of March 31, Information Technology Your Company uses ORACLE as its Financial system and the operating system CORE which is owned and managed by Kotak Mahindra Bank Limited and is used for its retail assets division since The CORE system has the latest technology platform and also has capacity to scale based on business requirements. The modular nature of the system supports efficiency in operations coupled with strong systems and operational controls. The system is robust to cater to efficient customer service and support marketing initiatives at reasonable cost. Cautionary Note Certain statements in the Management Discussion and Analysis section may be forward-looking and are stated as may be required by applicable laws and regulations. Many factors may affect the actual results, which could be different from what the Directors envisage in terms of future performance and outlook. Your Company does not undertake to update these statements. DIRECTORS & KEY MANAGERIAL PERSONNEL Directors retiring by rotation Ms. Shanti Ekambaram, Director, retires by rotation at the Nineteenth Annual General Meeting and being eligible, has offered herself for re-appointment. Directors resigned during the year Mr. K.V.S. Manian, Mr. Mohan Shenoi, Mr. Jaimin Bhatt, Mr. Arvind Kathpalia and Mr. Sumit Bali resigned as Directors of the Company with effect from 30th March Your Directors place on record their appreciation for the valuable advice and guidance rendered by them during their tenure as a Director. 3

5 Independent Directors appointed during the year Prof. S. Mahendra Dev (DIN: ) and Mr. Chandrashekhar Sathe (DIN: ) were appointed as Independent Directors of the Company pursuant to Section 149 of the Companies Act, 2013, for a five year term upto 29th March The Company had received declarations from the directors that they met the criteria of independence as prescribed under Section 149(6) of the Companies Act, Prof. S. Mahendra Dev, PhD from the Delhi School of Economics, aged 57 years is currently Director and Vice Chancellor, Indira Gandhi Institute of Development Research (IGIDR), Mumbai, India. He was Chairman of the Commission for Agricultural Costs and Prices (CACP), Govt. of India, Delhi. He was Director, Centre for Economic and Social Studies, Hyderabad for 9 years during 1999 to He has done his Post-doctoral research at Yale University and was faculty member at the Indira Gandhi Institute of Development Research, Mumbai for 11 years. He has been a member of several government committees including the Prime Minister s Task Force on Employment and Rangarajan Commission on Financial Inclusion. He has received honors for eminence in public service. He is the Chairman of the Committee on Terms of Trade on agriculture constituted by the Ministry of agriculture, Govt. of India. He is also member of the Expert Panel on poverty estimates chaired by Dr. C. Rangarajan. He is a member of National Statistical Commission at the rank of Secretary to Government of India. He is on the Board of Trustees of International Food Policy Research Institute (IFPRI), Washington D.C. Mr. Chandrashekhar Sathe, B. Tech. (Chemical Engineering) from IIT, Mumbai, aged 64 years, has over 35 years experience in the banking and financial sector. Mr. Sathe has worked with Bank of Nova Scotia, Kotak Mahindra Bank Ltd. and Bank of Maharashtra and has wide ranging experience in Banking, Finance, Administration, Credit, Foreign Exchange and Money Markets. Mr. Sathe is a widely consulted expert on Foreign Exchange and Money Markets in India and is a frequent contributor to financial newspapers, magazines and TV News channels. Key Managerial Personnels (KMPs) Mr. Harish Shah was appointed as Chief Financial Officer with effect from 23rd April In terms of the provisions of Section 203 of the Companies Act, 2013, at the meeting of the Board of Directors of the Company held on 23rd April 2014, the appointment of the existing Chief Executive Officer of the Company, Mr. Vyomesh Kapasi, and Mr. Harish Shah, Chief Financial Officer and Company Secretary as Key Managerial Personnel of your Company was confirmed and approved. Appointment & Remuneration of Directors and KMPs The Nomination and Remuneration Committee recommends to the Board the appointment of Directors. The Committee considers the qualifications, fit & proper status, positive attributes as per the suitability of the role and independent status as may be required of the candidate before such appointment. The Board has adopted a Remuneration Policy for the Whole-time Directors, Chief Executive Officer and other employees of the Company. The Policy is in line with the Compensation Policy of Kotak Mahindra Bank Ltd., its holding company, which is based on the Guidelines issued by Reserve Bank of India. The salient features of the Remuneration Policy are as follows: goals. and achievement of targets with overall linkage to Company budgets and business objectives. The main form of incentive compensation includes Cash, Deferred Cash/Incentive Plan and Stock Appreciation Rights. objective of retaining the employee. category of employee classification. 4 ANNUAL REPORT

6 The Independent Directors of the Company receive remuneration only by way of sitting fees for attending meetings of the Board or Committees thereof. Remuneration to the KMPs i.e Chief Executive Officer, Chief Financial Officer and Company Secretary, is in line with the Remuneration Policy of the Company. Number of Board Meetings During the year, 34 meetings of the Board of Directors were held. Declaration from Independent Directors The Board has received declarations from the Independent Directors as per the requirement of Section 149(7) of the Companies Act, 2013 and the Board is satisfied that the Independent Directors meet the criteria of independence as mentioned in Section 149(6) of the Companies Act, Disclosures pursuant to Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 Sr. Disclosure Requirement No. 1 Ratio of the remuneration of each director to the median remuneration of the employees for the financial year 2 Percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year 3 Percentage increase in the median remuneration of employees in the financial year 4 Number of permanent employees on the rolls of Company at the end of the year 5 Explanation on the relationship between average increase in remuneration and Company performance 6 Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company 7 Variations in the market capitalisation of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase or decrease in the market quotations of the shares of the Company in comparison to the rate at which the company came out with the last public offer Disclosure Details Not Applicable to the Company. There are no whole-time directors. None of the Directors of the Company except Independent Directors receive remuneration by way of sitting fees for attending meetings of the Board/Committees thereof. KMP Title % increase in remuneration % increase in remuneration excluding SARs Mr. Vyomesh Kapasi CEO 26.18% 12.10% Mr. Harish Shah CFO & CS 22.41% 9.39% 11.04% considering employees who were in employment for the whole of FY and FY Recommendation for increase in remuneration is based on the following factors: For employees who were in employment for the whole of FY and FY 14-15, average increase in remuneration for FY14-15 is 12.79% and 10.05% excluding SARs For FY , KMPs were paid approximately 0.29% in aggregate of the Profit Before Tax of the Company. Not applicable to the Company since it is a debt listed company. 5

7 Sr. No. Disclosure Requirement 8 Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration 9 Comparison of each remuneration of the Key Managerial Personnel against the performance of the Company 10 Key parameters for any variable component of remuneration availed by the directors 11 Ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year 12 Affirmation that the remuneration is as per the remuneration policy of the Company Note: Disclosure Details For employees other than managerial personnel who were in employment for the whole of FY and FY the average increase is 12.16% and 10.00% excluding SARs. Average increase for managerial personnel is 24.59% and 10.96% excluding SARs Directors/KMP Title Remuneration FY %PBT Mr. Vyomesh Kapasi CEO 0.17% Mr. Harish Shah CFO & CS 0.12% Not Applicable Not Applicable The Company is in compliance with its Remuneration Policy Remuneration includes Fixed pay + Variable paid during the year + perquisite value as calculated under the Income Tax Act, Remuneration does not include value of Stock Options. Stock Appreciation Rights (SARs) are awarded as variable pay. These are settled in cash and are linked to the average market price of the Kotak Mahindra Bank s stock on specified value dates. Cash paid out during the year is included for the purposes of remuneration. COMMITTEES (a) AUDIT COMMITTEE In terms of the requirement of Section 177 of the Companies Act, 2013, the Audit Committee was re-constituted by the Board with effect from 30th March 2015 and presently consists of Mr. Dipak Gupta, Prof. S. Mahendra Dev and Mr. Chandrashekhar Sathe. The quorum comprises of any two members. During the financial year ended 31st March 2015, 7 meetings of the Committee were held. The First Tier Audit Committee was re-constituted with effect from 30th March 2015 and currently comprises of Mr. Narayan S.A., Mr. Vyomesh Kapasi and Mr. Harish Shah. The Committee screens the matters entrusted to the Audit Committee and also the routine matters such as overseeing the programme of inspections and compliance of inspection reports. (b) NOMINATION & REMUNERATION COMMITTEE Pursuant to the provisions of Section 178 of the Companies Act, 2013, the Board at its meeting held on 26th March 2015 granted its consent to merge the existing Nomination Committee and Remuneration Committee into one Committee i.e. Nomination & Remuneration Committee comprising of Mr. Narayan S.A., Prof. S. Mahendra Dev and Mr. Chandrashekhar Sathe. During the year, 2 meetings of the Nomination Committee and 1 meeting of the Remuneration Committee were held. (c) COMMITTEE OF THE BOARD OF DIRECTORS The Committee of the Board of Directors was re-constituted by the Board with effect from 30th March 2015 and presently consists of Mr. Dipak Gupta, Mr. Narayan S.A. and Ms. Shanti Ekambaram. The quorum comprises of any two members. The Committee looks into the routine transactions of Company which inter alia include authorizing opening, operation & closure of bank accounts of the Company, authorizing officials 6 ANNUAL REPORT

8 of the Company to execute various documents/agreements, issuing power of attorney for representing the Company in various Courts of Law and before various Statutory Authorities and borrowing of money within the delegated limit. During the financial year ended 31st March 2015, 26 meetings of the Committee were held. (d) RISK MANAGEMENT COMMITTEE The Company has a two level structure for the Risk Management Committee. The Tier I level Committee was re-constituted during the year and presently consists of three members, namely Mr. Vyomesh Kapasi, Mr. Shahrukh Todiwala and Mr. Harish Shah. The quorum comprises of any two members. During the year, 4 meetings of the Tier I level Committee were held. The Tier II level (supervisory level) Committee was re-constituted by the Board with effect from 30th March 2015 and presently consists of Mr. Dipak Gupta, Mr. Narayan S.A. and Mr. Chandrashekhar Sathe. The quorum comprises of any two members. During the year, 4 meetings of the Tier II level Committee were held. (e) ASSET LIABILITY COMMITTEE (ALCO) The ALCO was re-constituted during the year and presently consists of Mr. Narayan S.A., Mr. Vyomesh Kapasi and Mr. Jason Dalgado. The quorum comprises of any two members. Members of ALCO meet every month to discuss various issues for the effective management of the assets and liabilities of the Company. During the year, 12 meetings of the Committee were held. (f) CORPORATE SOCIAL RESPONSIBILITY COMMITTEE In terms of the requirement of Section 135 of the Companies Act, 2013, the Company has constituted a Corporate Social Responsibility Committee with effect from 30th March 2015 to monitor, review, approve CSR initiatives and expenditure and make recommendations to the Board on CSR policy and related matters. The Committee comprises of Mr. Narayan S.A., Mr. Dipak Gupta and Mr. Chandrashekhar Sathe, with any two members forming the quorum. (g) CREDIT COMMITTEE The Company has a two level structure for the Credit Committee. The Credit Committee of the management was re-constituted by the Board and presently consists of Mr. Narayan S.A., Mr. Vyomesh Kapasi and Mr. Shahrukh Todiwala. The quorum comprises of any two members. The Committee scrutinizes and approves credit proposals up to such limit as specified in the Approval Authorities from time to time. During the year, 54 meetings of the Committee were held. The Credit Committee (Board) was constituted by the Board with effect from 30th March 2015 and consists of Mr. Dipak Gupta, Mr. Narayan S.A., and Ms. Shanti Ekambaram. The quorum comprises of any two members. The Committee scrutinizes and approves credit proposals above such limit as specified in the Approval Authorities from time to time. RELATED PARTY TRANSACTIONS There are no material transactions / arrangements / contracts entered into by the Company with its related party. All Related Party Transactions that were entered into during the financial year were on arm s length basis and were in the ordinary course of business. All Related Party Transactions as required under Accounting Standards AS18 are reported in Notes to Accounts under clause no.27.4 The Company s Policy on dealing with Related Party Transactions is available on the Company s website PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Pursuant to Section 186 of the Companies Act, 2013 read with Rule 11 of Companies (Meetings of Board and its Powers) Rules, 2014, the Company being a Non-Banking Financial Company registered with Reserve Bank of India, is exempt from the provisions of Section 186 of the Companies Act, WHISTLE BLOWER POLICY & VIGIL MECHANISM Your Company has also put in place the Whistle Blower Policy to raise concerns internally and to disclose information, which the individual believes shows malpractice, serious irregularities, fraud, unethical business conduct, abuse or wrong doing or violation of any Indian law. The Whistle Blower Policy is also put up on the Company s website 7

9 CORPORATE SOCIAL RESPONSIBILITY The Corporate Social Responsibility Committee comprises of Mr. Narayan S.A., Mr. Dipak Gupta and Mr. Chandrashekhar Sathe. The Company s CSR program is associated with the CSR initiatives of Kotak Mahindra Bank Limited (KMBL), its holding Company. Pursuant thereto, the CSR policy implementation focus areas of the Company are:- a. Promoting Education - Primary Focus Area b. Enhancing vocational skills and livelihood projects c. Promoting preventive healthcare and sanitation d. Reducing inequalities faced by socially and economically backward groups e. Environmental Sustainability f. Contribution to the Prime Minister s National Relief Fund. Pursuant to provisions of Section 135 of the Companies Act, 2013, the Company has incurred an expenditure on / contributed to ` 116 lakhs, during the financial year ended on 31st March The Company is working closely with KMBL, its holding company, in building its CSR capabilities on a sustainable basis and is committed to gradually increase its CSR spend in the coming years. Pursuant to Section 135(4)(a) of the Companies Act, 2013 read with Rule 9 of the Companies (Accounts) Rules, 2014, details of the CSR Policy of the Company is disclosed in the specified format as annexure to this Report. The Corporate Social Responsibility Policy is also put up on the Company s website RISK MANAGEMENT POLICY Your Company manages risk, based on Risk Management framework, governance structure and policies which lays down guidelines in identifying, assessing and managing risks. Further, to facilitate better enterprise wise risk management, a Risk management committee (RMC) has been constituted. This RMC meetings are conducted on quarterly basis and is responsible for review of risk management practices covering credit risk, operations risk, liquidity risk, market risk and other risks including capital adequacy with a view to align the same to the risk strategy & risk appetite of the company. Your Company has qualified Credit officers at all major locations who appraise and approve retail car finance proposals that are generated at branches and representative offices. Credit officers have pre-approved limits for each location, beyond which the proposal is forwarded to Head office, Risk Management for senior management approval. Your Company uses various tools like field investigations, credit score card, CIBIL score, asset tenure matrix to ensure high quality portfolio. Your Company maintains stringent policies and procedures to ensure controls over various functions of Head office & Branches. There are periodic independent reviews and monitoring of operating controls as defined in the company s operating manual. AUDITORS The Company s auditors Messrs. Deloitte Haskins & Sells LLP, Chartered Accountants, retire at the Nineteenth Annual General Meeting. Messrs. Deloitte Haskins & Sells LLP, Chartered Accountants, have consented to act as Auditors of the Company and are eligible for reappointment. SECRETARIAL AUDITOR Pursuant to Section 204 of the Companies Act, 2013, your Company has appointed Ms. Rupal D. Jhaveri, a Company Secretary in Practice, as its Secretarial Auditor. The Secretarial Audit Report for the financial year ended 31st March 2015 is annexed to this Report. EMPLOYEES The employee strength of your Company was seven hundred forty eight (748) as of 31st March Four employees employed throughout the year and two employees employed for part of the year were in receipt of remuneration of ` 60 lacs or more per annum. As required by the Sexual Harrasment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, the Company has formulated a Policy on Sexual Harrassment of Women at Workplace (Prevention, Prohibition & Redressal). No such instances were reported during the year. 8 ANNUAL REPORT

10 In accordance with the provisions of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees are set out in the annexure to the Directors Report. In terms of the Proviso to Section 136(1) of the Companies Act, 2013, the Directors Report is being sent excluding the aforesaid annexure. The annexure is available for inspection at the Registered Office of your Company during the business hours on working days. DEPOSIT The Company did not accept any deposits from the public during the year. Also, there are no deposits due and outstanding as on 31st March CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The provisions pertaining to the Conservation of Energy and Technology Absorption are not applicable to your Company. During the year, the Company had foreign exchange inflow of ` NIL (Previous Year: Nil) while the outgo of foreign exchange was ` 0.62 lakhs (Previous Year: ` lakhs). DIRECTORS RESPONSIBILITY STATEMENT The Directors, based on the representations received from the management, confirm in pursuance of Section 134(5) of the Companies Act, 2013 that: i) the Company has, in the preparation of the annual accounts, followed the applicable accounting standards along with proper explanations relating to material departures, if any; ii) iii) iv) the Directors 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 as at 31st March 2015 and of the profit of the Company for the financial year ended 31st March 2015; the Directors have taken proper 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; the Directors have prepared the annual accounts on a going concern basis; v) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. ANNEXURES Following statements/documents/reports are set out as Annexures to the Directors Report: (a) Extract of Annual Return under Section 134(3)(a) of the Companies Act, 2013 read with Rule 12(1) of Companies (Management & Administration) Rules, (Annexure A). (b) Secretarial Audit Report pursuant to Section 204 of the Companies Act, (Annexure B) (c) Report on CSR activities pursuant to the provisions of Section 135(4)(a) of the Companies Act, 2013, read with Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 (Annexure C) ACKNOWLEDGMENTS The Directors thank the shareholders, dealers and their staff for the strong support that they have continued to extend to your Company. The Board also takes this opportunity to place on record its appreciation of the outstanding performance and dedication of your Company s employees at all levels, without whose commitment, the achievement of results as indicated above could not have been possible. The Board also acknowledges the faith reposed in the Company by the Company s lending institutions. Mumbai, 24th April 2015 For and on behalf of the Board of Directors Uday Kotak Chairman 9