GK. Consultants Ltd BOARD'S REPORT Dear Members, The Board of your Company is delighted in presenting its 27thReport. The Report is being presented along with the Audited Financial Statements for the Financial Year ended March 31, 2015. NBFC Registration Your Company is a Non Banking Financial Company registered with RBI vide Certificate of Registration No. B- 14 - 00143 dated 12.09.2001. The Company is regular in making compliances of various rules and regulations made by RBI for NBFCs. Company's Performance During the Financial Year (FY) Net Revenue from operations of your Company increased by 5.73%, from Rs. 2,740 lacs in FY 2013-14 to Rs. 2,897 lacs in FY 2014-15. Profit before tax (PBT) has shown a significant increase of 42% from Rs. 19 lacs in FY 2013-14 to Rs. 27 lacs in FY 2014-15. Your Company's Profit after tax (PAT) has also increased by 44% from Rs. 13 lacs in FY 2013-14 to Rs. 19 lacs in FY 2014-15 under review. A detailed discussion on the business performance and future outlook has been given in 'Management Discussion and Analysis' (MDA). Consolidated Financial Statement In accordance with the Act and Accounting Standard (AS) - 21 on Consolidated Financial Statements read with AS - 23 on Accounting for Investments in Associates the audited Consolidated Financial Statements are not applicable to your Company hence no information is being provided. Change in nature of Business During the year under review, there was no change in the nature of Business. Performance of Subsidiary, Associate and Joint Venture Companies Your Company do not have any Subsidiaries, Joint Venture and Associates Companies. Accordingly, No information is provided in respect of changes therein. Material Subsidiaries The Board of your Company in its meeting approved the policy for determining Material Subsidiaries. At present the Company does not have any subsidiary including Material Subsidiary. The Policy on Material Subsidiary has been displayed at the website of the Company, www.gkconsultantsltd.com , under the heading "Investor". Directors During the Financial Year ended March 31, 2015, your Company had appointed the following as the Key Managerial Personnels ("KMPs") of the Company with effect from September 30, 2014: 1. Mr. Vijay Kumar Sinha - Managing Director 2. Mr. Ashok Kumar Das - CFO 3. Ms. ShilpaVerma - Company Secretary Ms. Divya Malini Gupta was appointed as an Executive Director on the Board of the Company w.e.f. September 30, 2014. Mrs. Gupta has 26 years of rich experience in the field of Secretarial, Financing and Administration. Her induction would provide immense benefit to the Company in the years to come. During the year under review, Mr. Ashok Ramsingh Hans, had shown his unwillingness to continue as Director of the Company due to his pre-occupation. The Board places on record its appreciation for the valuable service rendered by Mr. Hans during his tenure as Director on the Board of the Company. Further the following Directors were appointed as Independent Directors on the Board pursuant to the provisions of Section 149 and other applicable provisions of the Act and Rules thereto : 1. Mr. Brij Mohan Sharma - Non Executive & Independent Director 2. Mr. Piyush Prakash - Non Executive & Independent Director 3. Ms. Preety Tosh - Non Executive & Independent Director In terms of the Articles of Association of the Company and the applicable provisions of the Act, the office of Mr. Subodh Gupta, Director would be liable to determination by retirement of Director by rotation at this Annual General Meeting. The Board has recommended his re-appointment. Declaration of Independence u/s 149(6) The Board has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under sub-section (6) of Section 149 of the Act, and in the opinion of the Board they fulfil the conditions specified in the Act and the Rules made thereunder and are Independent of the management. Board Meetings During FY 2014-15, the Board met 17 (seventeen) times on April 11, 2014; May 1, 2014; May 10, 2014; July 14, 2014; July 23, 2014; July 31, 2014; August 30, 2014 and September 30, 2014; October 7, 2014; October 14, 2014; October 20, 2014; October 22, 2014 and October 30, 2014; January 14, 2015; February 2, 2015; February 10, 2015 and March 31, 2015. For details, please Refer Report on Corporate Governance on Page No 24 of the Financial Year 2014-15. Annual Evaluation - Board and its Committees The Nomination and Remuneration ("NR") Committee has laid down proper criteria and procedure to evaluate and scrutinize performance of the Chairman, each Director (including Executive, Non-Executive and Independent Directors), of the Board as a whole and its Committee. As per laid down procedure, the Independent Directors held a separate meeting to review the performance of the Chairman of the Company after taking into account the views of Executive and Non-Executive Directors. The Independent Directors also reviewed performance of every Executive and Non-Executive Director of the Board. The performance evaluation of each Independent Director was done by the entire Board (except the Independent Directors being evaluated). The performance of each committee has been evaluated by its members and found to be highly satisfactory. On the basis of this exercise, the NR Committee and the Board, after recognising the important contribution being made by each Independent Director has decided that all Independent Directors should continue to be on the Board. Familiarisation programme for Independent Directors During FY 2014-15, the Board including all Independent Directors were explained about their roles, rights and responsibilities in the Company through detailed presentations on the changes in backdrop of the Companies Act, 2013 and Listing Agreement. The presentations/ deliberations were carried out through internal resources. The Board including all Independent Directors was provided with relevant documents, reports and internal policies to enable them to familiarise with the Company's procedures and practices from time to time besides regular briefing by the members of the Management Team. The Familiarisation programme for Independent Directors has been displayed at the website of the Company, www.gkconsultantsltd.com , under the heading "Investor". Remuneration Policy Your Company has set up a Nomination and Remuneration ('NR') Committee pursuant to Section 178 of the Act which has formulated a Policy for Directors' Appointment and remuneration for Directors, KMP and other employees. They have also developed the criteria for determining qualifications, positive attributes and Independence of a Director including making Payments to Non-Executive Directors, if any. Pursuant to the provisions of Section 197(12) of the Act read with Rules made thereof, Remuneration details of the Employees, KMPs and Directors along with the details of the Ratio of the Remuneration of each Director to the Median Employee's Remuneration forms Part of the Report and are Attached as Annexure - I. Directors' Responsibility Statement Your Directors make the following statement in terms of Section 134(3)(c) & (5) of the Act, which is to the best of their knowledge and belief and according to the information and explanations obtained by them: a. that in the preparation of the Annual Accounts for the Financial Year ended March 31, 2015, the applicable Accounting Standards have been followed along with proper explanation relating to Material Departures; b. that Appropriate Accounting Policies have been Selected and applied consistently and Judgments and Estimates that are reasonable and Prudent have been made so as to give a true and fair view of the State of Affairs as at March 31, 2015 and of the Profit of your Company for the Financial Year ended March 31, 2015; c. that Proper and Sufficient care has been taken for the Maintenance of adequate accounting Records in accordance with the Provisions of the Act, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities; d. that the Annual Accounts for the Financial Year ended March 31, 2015 have been prepared on a going concern basis; e. that the Directors have laid down Internal Financial Controls which were followed by the Company and that such Internal Financial Controls are adequate and were operating effectively; and f. that 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. Corporate Governance At G.K. Consultants, it is our firm belief that the essence of Corporate Governance lies in the phrase 'Your Company'. It is 'Your' Company because it belongs to you - the shareholders. The Chairman and Directors are 'Your' fiduciaries and trustees. Their objective is to take the business forward in such a way that it maximises 'Your' long-term value. The Company believes that the Code of Corporate Governance is an excellent tool to secure the Corporate Excellence in the country. Hence the company is in full Compliance with the Norms and disclosures that have to be made on Corporate Governance as per the Requirements of Clause 49 of the Listing Agreement. The Board has also evolved and adopted a Code of Conduct based on the principles of Good Corporate Governance and best management practices being followed. The Code is available on the website of your Company www.gkconsultantsltd.com . A Report on Corporate Governance along with the Auditors' Certificate on its compliance is annexed hereto as Annexure - II. Management Discussion and Analysis Report A detailed chapter on 'Management Discussion and Analysis' (MDA), pursuant to Clause 49 of the Listing Agreement, is annexed hereto as Annexure - III and forms part of this Annual Report. Transfer to General Reserve As the entire profit has been transferred to the Statement of Profit and Loss, accordingly no sum is being transferred to the General Reserve of the Company for the Financial Year under review. Contingent Provision on Standard Assets Your company has created a general provision of Rs. 73,546.83 at 0.25% of the outstanding standard assets as per notification no. RBI/2010-11/370 dated 17th January 2011 issued by RBI for all NBFCs. Dividend To conserve funds for undertaking future activities, your Board has decided to not to recommend any Dividend for the Financial Year under review. Transfer to Investor Education and Protection Fund (IEPF) During the year under review, as there was no amount due to transfer in IEPF, accordingly no amount has been transferred to IEPF. Deposits During the year under review, the Company did not accept any deposit from public accordingly no information is required to be appended to this Report in terms of Non Banking Financial Companies (Reserve Bank) Directions, 1977. Material Changes and Commitments No material changes and commitments affecting the financial position of your Company have occurred between April 1, 2015 and the date of signing of this Report. Loans, Guarantees and Investments Details of Loans and Investments covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements. However during the FY 2014-15 your Company has not provided any guarantee pursuant to provisions of Section 186 of the Act. Related Party Transactions All related party transactions pursuant to Section 188(1) of the Act that were entered into during the Financial Year were on an arm's length basis and in the ordinary course of business. There were no materially significant related party transactions made by your Company with its Promoters, Directors, Key Managerial Personnels or other designated persons which might have a potential conflict with the interest of the Company at large. As there was no matter requiring approval of the Board, therefore no detail required to be provided in Form AOC-2. Your Company has developed Standard Operating Procedures for the purpose of identification of Related Party Transactions and monitoring on a regular basis. Related party transactions, if any were disclosed to the Board on a regular basis as per AS- 18. The policy on Related Party Transactions as approved by the Board has been displayed at the website of the Company, www.gkconsultantsltd.com , under the heading "Investor". None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company except as already disclosed in the audited Financial Statements as per AS-18. Risk Management System Your Company follows a Comprehensive System of Risk Management and has adopted a procedure for Risk Assessment and its Minimisation. It ensures that all the Risks are timely defined and mitigated in accordance with the Risk Management Process, including identification of elements of risk which might threaten the existence of the Company. During FY 2014-15, your Company has also constituted a Risk Management Committee which intensely monitors the Risk Management Process in the Company and the same is periodically reviewed by the Board. Vigil Mechanism/ Whistle Blower Policy Your Company has in place a well formulated Vigil Mechanism/ Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. The Policy enables the Employees, Directors and other stakeholders to raise their concern. There was no incident when the access to the Audit Committee was denied to any employees with respect to Vigil Mechanism. The Vigil Mechanism/ Whistle Blower Policy has been displayed at the website of the Company, www.gkconsultantsltd.com , under the heading "Investor". Audit Committee The Audit Committee of your Company comprises of the following Directors: 1. Mr. Piyush Prakash - Chairman 2. Mr. Subodh Gupta - Member 3. Ms. Preety Tosh - Member The details of Audit Committee and its terms of reference etc. have been given in the Corporate Governance Report annexed to this Report. During the Year under review there was no such recommendation of the Audit Committee which was not accepted by the Board. Auditors M/s. Umesh Amita & Co, Chartered Accountants, (FR No. 007238C), Agra, Statutory Auditors were appointed for 3 (three) Financial Years upto FY 2016-17 and in view of the provisions of the Act, their appointment needs to be ratified annually. Your Company has received an eligibility letter from the auditors to the effect that the ratification of their appointment, would be in accordance with the provision of Sections 139 and 141 of the Act. The Board recommends the ratification of their appointment. Secretarial Audit Pursuant to the Provisions of Section 204 of the Act and Rules made thereof, your Company has appointed M/s. Anshul Singla & Associates, CP No 9165, ACS: 25695, Company Secretaries to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for the Financial Year ended March 31, 2015 is annexed herewith as Annexure - IV. Auditors' Report The observations of Auditors in their Report, read with the relevant notes to accounts are self-explanatory and therefore do not require further explanation pursuant to Section 134(3)(f)(i). The Secretarial Audit Report for FY 2014-15 also does not bear any adverse comments or observations that require any explanation pursuant to Section 134(3)(f)(ii). Internal Control Systems Your Company has a proper and adequate system of internal controls. This ensures that all assets are safeguarded and protected against loss from unauthorised use or disposition and those transactions are authorised, recorded and reported correctly. An extensive programme of internal audits and management reviews supplements the process of internal control. Properly documented policies, guidelines and procedures are laid down for this purpose. The Internal Control System has been designed to ensure that the financial and other records are reliable for preparing financial and other statements and for maintaining accountability of assets. To strengthen the internal control system in providing finance to parties, your Company has got itself registered with CIBIL. Your Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed. Insider Trading Code In compliance with the SEBI regulation on prevention of insider trading, your Company had instituted a Comprehensive Code of Conduct for Regulating, Monitoring and Reporting of Trading by Insiders. The said Code has laid down guidelines, which advised them on procedures to be followed and disclosures to be made, while dealing with shares of the Company and cautioned them on consequences of non-compliances. Further your Company has put in place a Code of Practices and Procedures of Fair Disclosures of Unpublished Price Sensitive Information. Both the aforesaid Codes are in lines with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015. Business Responsibility Report Your Company is not required to prepare any Business Responsibility Report (BRR), hence the same is not provided along with this Report. Listing The shares of your Company are presently listed on Bombay Stock Exchange Limited (BSE), Ahmedabad Stock Exchange (ASE) and Calcutta Stock Exchange Limited (CSE) except the Delhi Stock Exchange Limited (DSE) due to withdrawal of recognition granted by SEBI to DSE. The Company confirms that it has paid the Annual Listing Fees for the year 2015-16. Personnel Your Directors place on record their appreciation for the significant contribution made by all employees, who through their competence, dedication, hard work, co-operation and support have enabled the Company to perform on a continual basis. Particulars of Employees The statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is not applicable to the Company because no employee is drawing salary more than the limit of Rs 60 lacs as prescribed in the said Rule. Extract of Annual Return The details forming part of the extract of the Annual Return pursuant to Sections 92(2) and 134(3)(a) of the Act and Rules made thereof in form MGT 9 is annexed herewith as Annexure - V. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo The information on conservation of energy, technology absorption and foreign exchange earnings and outgo, is as under: A. Conservation of Energy The Company uses energy for its office equipment such as computers, lighting and utilities at its work premises. As an ongoing process the following measures are undertaken to conserve energy: a) Implementation of viable energy saving proposals. b) Awareness and training sessions, at regular intervals, to concerned operational personnel on opportunities of energy conservation and their benefits. B. Technology Absorption Your Company, being an Investment Company and engaged in financing business, does not have any activity relating to technology absorption and export of materials, goods or services. C. Foreign Exchange Earnings and Outgo During the Financial year under consideration, there are no Earnings and Outgo of Foreign Exchange. Statutory Disclosures Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review: 1. Issue of equity shares with differential rights as to dividend, voting or otherwise; 2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme; 3. The Managing Director of the Company has not received any remuneration or commission from any of its subsidiaries, as the company does not have any subsidiary; and 4. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (SHWWA) Your Directors, further state that during the year under review, there were no cases filed, pursuant to the SHWWA and Rules made thereof. Acknowledgement It is our strong belief that caring for our business constituents has ensured our success in the past and will do so in future. Your Directors acknowledge with sincere gratitude the co-operation and assistance extended by the Government authorities, Banks and Vendors. The Board also takes this opportunity to express its deep gratitude for the continued co-operation and support received from its valued shareholders. For and on behalf of the Board Vijay Kumar Sinha Managing Director DIN: 01089578 Piyush Prakash Non- Executive & Independent Director DIN: 02014796 New Delhi May 20, 2015 |