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Directors Report of Pilani Investment and Industries Corporation Ltd.

Mar 31, 2015

Dear Shareholders,

We have pleasure in presenting the 68th Annual Report of the Company along with the Audited Statements of Accounts for the year ended 31st March, 2015. The Financial Results for the year are shown below :-

FINANCIAL RESULTS (Amount in Rs,'000)

2014-2015 2013-2014

Profit from operations, Dividend, Interest and Rent Income 4,43,593 6,39,441

Less: Depreciation 1,346 1,579

Profit before tax 4,42,247 6,37,862

Less: Provision for taxation 31,000 38,197

Add : MAT credit entitlement 12,493 --

Profit after taxation 4,24,190 5,99,665

Add: Balance brought down 17,38,375 16,89,966

Profit available for appropriation 21,62,565 22,89,631

Appropriations :

Special Reserve 84,838 1,19,935

Proposed Dividend 1,97,719 1,97,719

Corporate Dividend Tax 40,251 33,602

General Reserve 1,00,000 2,00,000

Balance carried forward 17,39,757 17,38,375

21,62,565 22,89,631

The profitability of the Company for the year under review appears less, the reason being less dividend received in the current year. International Markets were not favorable and disappointments on macro front locally were the major factors affecting the capital markets. In order to control high inflation, RBI has continued tighter monetary policies resulting in higher interest rates on the borrowings by the various Companies affecting their margins. The economy has grown by about 5% in 2014-2015 and RBI has pegged the GDP growth for the current fiscal year at the same level.

There is no change in the nature of the business of the Company. There were no significant orders passed by regulators neither there were any material changes and commitments effecting the financial position of the company.

DIRECTORS' REPORT

The company has in place an internal control system which ensures proper recording of financial information and various regulatory and statutory compliances. The Company has in place a proper and efficient Risk Assessment and Minimization Programme.

DIVIDEND

The Board of Directors has recommended a dividend of Rs. 25/- (Rupees Twenty Five only) per equity share of Rs. 10/- each equivalent to 250% (two hundred fifty percent) on the paid up equity share capital of the Company for the year ended 31st March, 2015 as against Rs. 25/- (Rupees Twenty Five only) equivalent to 250% (two hundred fifty percent) paid in the previous year on the equity shares of T 10/- each. The dividend will be paid when declared by the shareholders in accordance with law. The dividend will be free of tax in the hands of the shareholders. The Company will have to pay dividend distribution tax at the rate of 15% plus applicable surcharge and education cess, aggregating about 20.358% on the dividend amount so distributed.

DIRECTORS

During the year Shri P. K. Khaitan, Non Executive Independent Director of the Company had resigned with effect from 29th May, 2014 to comply with the provisions of Section 165 of the Companies Act 2013.

The Board of Directors at their meeting held on 13th August, 2014 appointed Smt. Sucharita Basu De as an Additional Director and Independent Non-Executive Director of the Company with effect from 13th August, 2014. Smt. Sucharita Basu De holds office upto the date of the forthcoming Annual General Meeting and is eligible for appointment. Details of the proposal for the appointment of Smt. Sucharita Basu De as an Independent Director are mentioned in the Explanatory Statement under Section 102 of the Companies Act, 2013 of the Notice of the 68th Annual General Meeting of the Company. Her appointment is appropriate and in the best interest of the Company.

Shri Kumar Mangalam Birla will be retiring at the ensuing Annual General Meeting and being eligible, offers himself for being re-elected.

All the Independent Directors of the Company had a separate meeting on 30th December 2014 to review the performance of the Executive Director and also carried out the collective evaluation of the Board. Further the Board evaluated the performance of the Executive Director, Independent Directors Committees of the Board and of its own. The overall outcome from the evaluation was that the Board and its Independent Directors have performed effectively.

The Independent Directors of the Company have confirmed and declared that they are not disqualified to act as an Independent Director pursuant to the provisions of section 149 of the Companies Act, 2013 and the Board is also of the opinion that the Independent Directors fulfill all the conditions specified in the Companies Act, 2013 making them eligible to act as an Independent Director.

All directors including Independent Directors and Key Managerial Personnel of the Company have confirmed compliance with the Code of Conduct applicable to the Directors and employees of the

DIRECTORS' REPORT

company and the declaration in this regard is made by the Executive Director which forms a part of this report as an Annexure.

The details of numbers and dates of Board Meetings and Committee Meetings including attendance of Directors is given in the attached Corporate Governance Report.

DIRECTORS' RESPONSIBILITY STATEMENT

In compliance with the provisions of Section 134 of the Companies Act, 2013, the Directors to the best of their knowledge and belief confirm that –

(i) in the preparation of the Annual Accounts, the applicable accounting standards have been followed Along with proper explanation relating to material departures;

(ii) the Directors have selected such accounting policies as mentioned in Note 2.1 of the Notes to Financial Statements 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 as on 31st March, 2015 and the Profit or Loss of the Company for the financial year ended on that date;

(iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the aforesaid Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts have been prepared 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 are operating effectively; and

(vi) there is a proper system to ensure compliance with the provisions with all applicable laws and that such systems are adequate and operating effectively.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return is attached as Annexure - A in the prescribed form MGT - 9, which forms part of this report.

KEY MANAGERIAL PERSONNEL

In compliance of section of 203 of the Companies Act, 2013 Shri N. K. Baheti had been appointed as the Chief Financial Officer of the Company with effect from 29th January 2015.

Remuneration and other details of the key managerial personnel for the year ended 31st March 2015 are mentioned in the Extract of the Annual Return which is attached as Annexure - A and forms a 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. Information on transactions with Related Parties are given in prescribed form DIRECTORS' REPORT — (Contd.) AOC - 2 and the same forms part of this report.

AUDIT COMMITTEE

The Audit Committee of the Company comprises of Shri D. K. Mantri, Shri K. K. Daga, Shri A. V. Jalan and Smt. Sucharita Basu De as members. The Company Secretary is acting as the Secretary of the Committee. The Executive Director and the Chief Financial Officer are permanent invitees to the meeting to give clarification on accounts related issues. The Board had accepted all the recommendations as and when forwarded by the Audit Committee. The Company has in place a vigil mechanism viz. Whistle Blower Policy the details of which are available on the Company's website www.pilaniinvestment.com.

The details of terms of reference of the Audit Committee and other details relating to number of meetings and dates on which held including the attendance of each member are given separately in the attached Corporate Governance Report.

NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee of the Board comprises of Shri D. K. Mantri, Shri K. K. Daga and Shri A.V. Jalan. The Company Secretary is acting as the Secretary of the Committee. The said Committee had devised a policy named as Nomination and Remuneration Policy which has been approved by the Board and a copy of the same is available on the Company's website www.pilaniinvestment.com. and is attached as Annexure - B and forms part of this Report.

The details of terms of reference of the Nomination and Remuneration Committee and other details relating to number of meetings and dates on which held including the attendance of each member are given separately in the attached Corporate Governance Report.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Corporate Social Responsibility Committee (CSR Committee) of the Board comprises of Shri B. K. Birla, Shri D. K. Mantri and Shri R. A. Makharia. The said Committee had devised a policy named as Corporate Social Responsibility Policy which has been approved by the Board and a copy of the same is available on the Company's website www.pilaniinvestment.com. and is attached as Annexure - C and forms part of this Report.

The details of terms of reference of the Corporate Social Responsibility Committee and other details relating to number of meetings and dates on which held including the attendance of each member are given separately in the attached Corporate Governance Report.

During the year your Company had contributed Rs.109.00 lacs to various Trusts/Institutions working in the areas which is strictly in consonance with the CSR policy of the Company. The details of CSR expenditure in prescribed form is annexed as Annexure-D and forms part of this Report.

SECRETARIAL AUDIT

In compliance with the provisions of Section 204 of the Companies Act, 2013, a Secretarial Audit was conducted during the year by the Secretarial Auditor M/s. K. C. Dhanuka & Company, Practicing Company Secretary. The Secretarial Auditor's Report is attached as Annexure-E and forms part of this report. There are no qualifications/observations/remarks made by the Secretarial Auditor in his report.

CORPORATE GOVERNANCE

The Company has in place a system of Corporate Governance. A separate Report on Corporate Governance is enclosed as a part of this Annual Report of the Company. A certificate from Auditors of the Company regarding compliance of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed to the Report on Corporate Governance.

SUBSIDIARY COMPANY

The Audited Accounts and Directors' Report of the subsidiaries are annexed hereto.

AUDITORS

S.R. Batliboi & Co. LLP, the Statutory Auditors of the Company had been reappointed as the Statutory Auditors of the Company for period of three years at the 67th Annual General Meeting held on 29th August 2014. At the ensuing Annual General Meeting the appointment of the Statutory Auditors will be ratified.

AUDITORS REPORT

The observations made in the Auditors Report are self explanatory and, therefore, do not call for any further explanation under Section 134(3)(f)(i) of the Companies Act, 2013.

EMPLOYEES

Information required under Section 197 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure - F and forms part of this report.

DEPOSITS

The Company has not accepted any public deposit during the year. Hence, no information is required to be appended to this report in terms of Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998.

CONSOLIDATED FINANCIAL STATEMENT

The Consolidated Financial Statements have not been prepared by the Company due to non-availability of accounts of one of the Associate Companies.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO

The Company has no manufacturing activity and therefore, the disclosure of particulars as 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 and Technology Absorption is not applicable

Particulars with regard to Foreign Exchange earnings and outgo - The Company has no such transactions.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

During the year under review, unpaid/unclaimed dividend for the Financial Year 2006-2007 has been transferred to the Investor Education and Protection Fund.

APPRECIATION

Your Directors place on record their deep appreciation for the committed services rendered by the employees of your Company.

For and on behalf of the Board of Directors

Kolkata R. A. MAKHARIA B. K. BIRLA D. K. MANTRI

May 27, 2015 Executive Director Director Director


Mar 31, 2014

Dear Shareholders,

We have pleasure in presenting the 67th Annual Report of the Company along with the Audited Statements of Accounts for the year ended 31st March, 2014. The Financial Results for the year are shown below :-

FINANCIAL RESULTS (Amount in Rs ''000) 2013-2014 2012-2013

Profit from operations, Dividend,

Interest and Rent Income 6,39,441 5,70,789

Profit on sale of shares - 13,70,118

Less: Depreciation 1,579 248

Profit before tax 6,37,862 19,40,659

Less: Provision for taxation 38,197 3,51,300

Profit after taxation 5,99,665 15,89,359

Add: Balance brought down 16,89,966 8,09,800

Profit available for appropriation 22,89,631 23,99,159

Appropriations :

Special Reserve 1,19,935 3,17,872

Proposed Dividend 1,97,719 1,97,719

Corporate Dividend Tax 33,602 33,602

General Reserve 2,00,000 1,60,000

Balance carried forward 17,38,375 16,89,966

22,89,631 23,99,159

The profitability of the Company for the year under review appears less, the reason being the profit on the sale of shares in the previous year and dividend not received on it in the current year. International Markets were not favourable and disappointments on macro front locally were the major factors affecting the capital markets. In order to control high inflation, RBI has continued tighter monetary policies resulting in higher interest rates on the borrowings by the various Companies affecting their margins. The economy has grown by about 5% in 2013-2014 and RBI has pegged the GDP growth for the current fiscal year at the same level.

DIRECTORS'' REPORT — (Contd.)

This report has been prepared on the basis of the legal requirements under the Companies Act, 1956. As per General Circular no. 08/2014 issued by the Ministry of Corporate Affiars (MCA) dated 04-04- 2014, the provisions of the Companies Act, 2013 will become applicable for all disclosures required under the Act for the year 2014-15 and subsequent years.

DIVIDEND

The Board of Directors has recommended a dividend of Rs. 25/- (Rupees Twenty Five only) per equity share of Rs. 10/- each equivalent to 250% (two hundred fifty percent) on the paid up equity share capital of the Company for the year ended 31st March, 2014 as against Rs. 25/- (Rupees Twenty Five only) equivalent to 250% (two hundred fifty percent) paid in the previous year on the equity shares of T 10/- each. The dividend will be paid when declared by the shareholders in accordance with law. The dividend will be free of tax in the hands of the shareholders. The Company will have to pay dividend distribution tax at the rate of 15% plus applicable surcharge and education cess, aggregating about 16.995% on the dividend amount so distributed.

CORPORATE SOCIAL RESPONSIBILITY

During the year, your directors have constituted the Corporate Social Responsibility Committee (CSR Committee) comprising of Shri B. K. Birla, Shri D. K. Mantri and Shri R. A. Makharia.

The said committee has been entrusted with the responsibility of formulating and recommending to the Board, Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the company, monitoring and implementation of the framework of the CSR Policy and recommending the amount to be spent on CSR activities.

DIRECTORS

In view of the provisions of the Companies Act, 2013 read with provisions of the Listing Agreement, 1/3 of the Directors on the board are required to be Independent Directors.

Independent Directors are not to be considered for the purpose of determining the directors liable to retire by rotation. Three of the existing directors viz. Shri P. K. Khaitan, Shri D. K. Mantri and Shri K. K. Daga are Independent Directors. Shri R. A. Makharia is the Executive Director, not liable to retire by rotation. 1/3 of the remaining directors are liable to retire by rotation. Accordingly, Shri A. V. Jalan will be retiring at the ensuing Annual General Meeting and being eligible, offers himself for being re-elected. So far as the above three Independent Directors are concerned at the ensuing Annual General Meeting of the company, they would be appointed as the Independent Directors of the Company for a term of 5 consecutive years commencing from the date of the said meeting.

DIRECTORS'' RESPONSIBILITY STATEMENT

In compliance with Section 217(2AA) of the Companies Act, 1956, the Directors to the best of their knowledge and belief confirm that –

(i) in the preparation of the Annual Accounts, the applicable accounting standards have been followed alongwith proper explanation relating to material departures;

(ii) the Directors have selected such accounting policies as mentioned in Note 2.1 of the Notes to Financial Statements and applied them consistently and made judgements 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 as on 31st March, 2014 and the Profit or Loss of the Company for the financial year ended on that date;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the aforesaid Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts have been prepared on a going concern basis.

CORPORATE GOVERNANCE

The Company has in place a system of Corporate Governance. A separate Report on Corporate Governance is enclosed as a part of this Annual Report of the Company. A certificate from Auditors of the Company regarding compliance of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed to the Report on Corporate Governance.

SUBSIDIARY COMPANY

The Audited Accounts and Directors'' Report of the subsidiary are annexed hereto.

AUDITORS

S.R. Batliboi & Co. LLP, Chartered Accountants (Firm Registration Number : 301003E) the Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for reappointment. Under the Companies Act, 2013 the Company''s Statutory Auditors have compulsorily to retire by rotation after a fixed period. M/s. S. R. Batliboi & Co.LLP who have been the Company''s Auditors for over 10 years are also due to retire but there is cooling off period of three years inclusive of 2014-2015. Hence M/s. S. R. Batliboi & Co.LLP are proposed to be reappointed for three years from the year 2014-2015 to be ratified every year and accordingly a resolution for their re-appointment will be placed before the Annual General Meeting for consideration by the share holders.

AUDITORS REPORT

The observations made in the Auditors Report are self explanatory and, therefore, do not call for any further explanation under Section 217(3) of the Companies Act, 1956.

EMPLOYEES

Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, are not applicable as no employee was in receipt of such remuneration as provided under the said Section.

DEPOSITS

The Company has not accepted any public deposit during the year. Hence, no information is required to be appended to this report in terms of Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

During the year under review, unpaid/unclaimed dividend for the financial year 2005-2006 has been transferred to the Investor Education and Protection Fund.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO

The Company has no manufacturing activity and therefore, the disclosure of particulars as required to be appended under Section 217(1)(a) of the Companies Act, 1956, in so far as it relates to the Conservation of the Energy and Technology Absorption is not applicable. Particulars with regard to Foreign Exchange Earnings and Outgo - The Company has no such transactions.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements have been prepared by the Company in accordance with the requirements of Accounting Standard-21 issued by the Institute of Chartered Accountants of India and as stipulated by Clause 32 of the Listing Agreement with the Stock Exchanges with which the Shares of the Company are listed. The audited Consolidated Financial Statements form part of the Annual Report.

APPRECIATION

Your Directors place on record their deep appreciation for the committed services rendered by the employees of your Company.

For and on behalf of the Board of Directors

Kolkata R. A. MAKHARIA B. K. BIRLA May 27, 2014 Executive Director Director


Mar 31, 2013

TO THE SHAREHOLDERS

Dear Shareholders,

The have pleasure in presenting the Annual Report of the Company along with the Audited Statements of Accounts for the year ended 31st March, 2013. The Financial Results for the year are shown below :-

FINANCIAL RESULTS (Amount in ''000)

2012-2013 2011-2012

Profit from operations, Dividend, Interest and Rent Income 19,40,907 4,36,958

Less: Depreciation 248 151

Profit before tax 19,40,659 4,36,807

Less: Provision for taxation 3,51,300 9,233

Profit after taxation 15,89,359 4,27,574

Add: Balance brought down 8,09,800 7,57,535

Profit available for appropriation 23,99,159 11,85,109

Appropriations :

Special Reserve 3,17,872 85,515

Proposed Dividend 1,97,719 1,97,719

Corporate Dividend Tax 33,602 32,075

General Reserve 1,60,000 60,000

Balance carried forward 16,89,966 8,09,800

23,99,159 11,85,109

The profitability of the Company for the year under review has increased substantially mainly due to profit on sale of shares of a company and more dividend income from Mutual Funds. News from Overseas Markets mostly fuelled by debt crisis in Europe and disappointments on macro front locally were the major factors for the capital markets affected. In order to control high inflation, RBI has continued tighter monetary policies resulting in higher interest rates on the borrowings by various companies affecting their margins. The economy has grown by 5.5% in 2012-2013 and RBI has pegged GDP growth rate for the current fiscal year at 6.5%.

DIVIDEND

The Board of Directors has recommended a dividend of 25/- (Rupees Twenty Five only) per equity share of 10/- each equivalent to 250% (two hundred fifty percent) on the paid up equity share capital of the Company for the year ended 31st March, 2013 as against 25/- (Rupees Twenty Five only) equivalent to 250% (two hundred fifty percent) paid in the previous year on the equity shares of 10/ - each. The dividend will be paid when declared by the shareholders in accordance with law. The dividend will be free of tax in the hands of the shareholders. The Company will have to pay dividend distribution tax at the rate of 15% plus applicable surcharge and education cess, aggregating about 16.995% on the dividend amount so distributed.

DIRECTORS

Shri Basant Kumar Birla and Shri Pradip Kumar Khaitan, Directors of the Company retire from the office by rotation at the forthcoming Annual General Meeting but being eligible offer themselves for re- election.

DIRECTORS'' RESPONSIBILITY STATEMENT

In compliance with Section 217(2AA) of the Companies Act, 1956, the Directors to the best of their knowledge and belief confirm that –

(i) in the preparation of the Annual Accounts, the applicable accounting standards have been followed alongwith proper explanation relating to material departures;

(ii) the Directors have selected such accounting policies as mentioned in Note 2.1 of the annual accounts and applied them consistently and made judgements 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 as on 31st March, 2013 and the Profit or Loss of the Company for the financial year ended on that date;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the aforesaid Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts have been prepared on a going concern basis.

CORPORATE GOVERNANCE

The Company has in place a system of Corporate Governance. A separate Report on Corporate Governance is enclosed as a part of this Annual Report of the Company. A certificate from Auditors of the Company regarding compliance of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed to the Report on Corporate Governance.

SUBSIDIARY COMPANY

The Audited Accounts and Directors'' Report of the subsidiary are annexed hereto.

During the year the Company has made an application to Reserve Bank of India for converting itself into a Core Investment Company (CIC) and for this, one more wholly owned subsidiary was incorporated namely PIC Realcon Limited and transferred certain investments in the non group companies to PIC Realcon Limited to qualify itself as CIC.

AUDITORS

S.R. Batliboi & Co. LLP, the Statutory Auditors of the Company, retire, and being eligible, offer themselves for reappointment.

AUDITORS REPORT

The observations made in the Auditors Report are self explanatory and, therefore, do not call for any further explanation under Section 217(3) of the Companies Act, 1956.

EMPLOYEES

Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, are not applicable as no employee was in receipt of such remuneration as provided under the said Section.

DEPOSITS

The Company has not accepted any public deposit during the year. Hence, no information is required to be appended to this report in terms of Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO

The Company has no manufacturing activity and therefore, the disclosure of particulars as required to be appended under Section 217(1)(a) of the Companies Act, 1956, in so far as it relates to the Conservation of the Energy and Technology Absorption is not applicable. Particulars with regard to Foreign Exchange Earnings and Outgo appear in Note 27 to the accounts and forming part of this Report.

CONSOLIDATED FINANCIAL STATEMENT

The Consolidated Financial Statements have been prepared by the Company in accordance with the requirements of Accounting Standard-21 issued by the Institute of Chartered Accountants of India and as stipulated by Clause 32 of the Listing Agreement with the Stock Exchanges with which the Shares of the Company are listed. The audited Consolidated Financial Statements form part of the Annual Report.

APPRECIATION

Your Directors place on record their deep appreciation for the committed services rendered by the employees of your Company.

For and on behalf of the Board of Directors

Kolkata R. A. MAKHARIA P. K. KHAITAN

May 28, 2013 Executive Director Director


Mar 31, 2012

The have pleasure in presenting the Annual Report of the Company along with the Audited Statements of Accounts for the year ended 31st March, 2012. The Financial Results for the year are shown below

FINANCIAL RESULTS (Amount in Rs.'000)

2011-2012 2010-2011

Profit from operations, Dividend,

Interest and Rent Income 4,36,958 4,46,728

Less: Depreciation 151 158

Profit before tax 4,36,807 4,46,570

Less: Provision for taxation 9,233 5,000

Less: Deferred taxation - 2,416

Profit after taxation 4,27,574 4,39,154

Add: Balance brought down 7,57,535 6,86,075

Profit available for appropriation 11,85,109 11,25,229 Appropriations:

Special Reserve 85,515 87,900

Proposed Dividend 1,97,719 1,97,719

Corporate Dividend Tax 32,075 32,075

General Reserve 60,000 50,000

Balance carried forward 8,09,800 7,57,535

11,85,109 11,25,229

The profitability of the Company during the year under review appears less mainly due to receipt of lesser dividend from few Companies and provision for diminution in the value of units of some schemes of the Mutual Funds. News from Overseas Markets mostly fuelled by debt crisis in Europe and disappointments on macro front locally were the major factors for the capital markets to fall. In order to control high inflation, RBI has continued tighter monetary policies resulting in higher interest rates on the borrowings by various companies affecting their margins. The economy has grown by 6.9% in 2011-2012 and RBI has pegged GDP growth rate for the current fiscal year at 7.3%.

DIVIDEND

The Board of Directors has recommended a dividend of Rs. 25/- (Rupees Twenty Five only) per share of Rs.10/- each equivalent to 250% (two hundred fifty percent) on the paid up equity share capital of the Company for the year ended 31st March, 2012 as against Rs.25/- (Rupees Twenty Five only) equivalent to 250% (two hundred fifty percent) paid in the previous year on the equity shares of Rs. 10/- each. The dividend will be paid when declared by the shareholders in accordance with law. The dividend will be free of tax in the hands of the shareholders. The Company will have to pay dividend distribution tax at the rate of 15% plus applicable surcharge and education cess, aggregating about 16.2225% on the dividend amount so distributed.

DIRECTORS

Shri Kumar Mangalam Birla and Shri K. K. Daga, Directors of the Company retire from the office by rotation at the forthcoming Annual General Meeting but being eligible offer themselves for re-election.

DIRECTORS' RESPONSIBILITY STATEMENT

In compliance with Section 217(2AA) of the Companies Act, 1956, the Directors to the best of their knowledge and belief confirm that

(i) in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) the Directors have selected such accounting policies as mentioned in Note 2.1 of the annual accounts 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 as on 31st March, 2012 and the Profit or Loss of the Company for the financial year ended on that date;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the aforesaid Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts have been prepared on a going concern basis.

CORPORATE GOVERNANCE

The Company has in place a system of Corporate Governance. A separate Report on Corporate Governance is enclosed as a part of this Annual Report of the Company. A certificate from Auditors of the Company regarding compliance of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed to the Report on Corporate Governance.

SUBSIDIARY COMPANY

The Audited Accounts and Directors' Report of the subsidiary are annexed hereto.

AUDITORS

S.R. Batliboi & Co., the Auditors of the Company, retire, and being eligible, offer themselves for reappointment.

AUDITORS REPORT

The observations made in the Auditors Report are self explanatory and, therefore, do not call for any further explanation under Section 217(3) of the Companies Act, 1956.

EMPLOYEES

Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, are not applicable as no employee was in receipt of such remuneration as provided under the said Section.

DEPOSITS

The Company has not accepted any public deposit during the year. Hence, no information is required to be appended to this report in terms of Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING ANDOUTGO

The Company has no manufacturing activity and therefore, the disclosure of particulars as required to be appended under Section 217(1)(a) of the Companies Act, 1956, in so far as it relates to the Conservation of the Energy and Technology Absorption is not applicable. Particulars with regard to Foreign Exchange Earnings and Outgo appear in Note 29 to the accounts and forming part of this Report.

CONSOLIDATED FINANCIAL STATEMENT

The Consolidated Financial Statements have been prepared by the Company in accordance with the requirements of Accounting Standard-21 issued by the Institute of Chartered Accountants of India and as stipulated by Clause 32 of the Listing Agreement with the Stock Exchanges with which the Shares of the Company are listed. The Audited Consolidated Financial Statements form part of the Annual Report.

APPRECIATION

Your Directors place on record their deep appreciation for the committed services rendered by the employees of your Company.

For and on behalf of the Board of Directors

Kolkata R. A. MAKHARIA B. K. BIRLA

30th May, 2012 Executive Director Director

 
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