Your Directors have pleasure in presenting the 26th Annual Report of the Company alongwith Audited Accounts for the Financial Year ended 31st March 2016.
The summarized results of your Company are given in the table below:
(Rs. in Lacs)
| ||Year Ended 31st March 2016 ||Year Ended 31st March 2015 |
|Gross Revenue ||16077 ||14872 |
|Other Income ||20 ||383 |
|Total Revenue ||16097 ||15255 |
|Less: Total Expenditure ||15021 ||14349 |
|Gross Profit (before Depreciation & Finance Cost) ||1076 ||906 |
|Less: Depreciation ||185 ||145 |
|: Finance Cost ||401 ||321 |
|Profit Before Extraordinary Item ||490 ||440 |
|Less: Extraordinary item || || |
|Profit Before Tax (PBT) ||490 ||440 |
|Less: Provision for Income Tax ||140 ||141 |
|: Deferred Tax ||47 ||(2) |
|Profit After Tax(PAT) ||303 ||301 |
|Balance B/F ||181 ||136 |
|Balance available for appropriation ||484 ||437 |
|Less : Dividend & Dividend Tax ||46 ||46 |
|Less : Transfer to General Reserve ||240 ||200 |
|Less : Adjustment relating to fixed Assets ||0 ||10 |
|Balance transfer to Balance Sheet ||198 ||181 |
SUMMARY OF OPERATIONS
During the year under review the gross revenue from operation had a substantialincrease over that of the last year (from Rs. 148.72 Crores to Rs. 160.77 Crores). Grossprofit for the F.Y 2015-16 Rs. 10.76 Crores as against Rs. 9.06 Crores in the F.Y.2014-15.For the Financial year 2015-16 PAT stood at Rs. 3.03 Crores vis-a-vis Rs. 3.01 Crores inthe previous year.
Industrial Safety Handgloves:
The Company's main segment of operation is production of Industrial safety hand glovesfor the export market. This segment accounted for 78% of the Company's total turnover.There was significant increase in the generation of revenue in comparison the previousyear. Though the demand for industrial safety hand gloves in the international marketremained restricted due to persistent depressionary climate engulfing the global economyfor the last couple of years your company had met its target by exploring new avenues.
As against the same the safety regulations for industrial operations across the worldare being enforced more and more rigidly resulting in increase of demands for thecompany's products in the international market. It is more so when there is a positiveindication for global economy endeavour into return back to its normal tracks.
During the F.Y 2015-16 the performance of windmills at Dhule in Maharashtra remainedsatisfactory and it generated 18 lacs kwh units of wind energy during the year as against17lacs kwh units in previous year. The revenue generated by the windmills for the F.Y2015-16 was Rs. 86 Lacs as compared to Rs. 79 Lacs in the previous year. It may also benoted that the Loan Liability for installation of the windmills having been liquidated infull during the F.Y2015-16 henceforth the entire revenue generated by the windmills willbe added to the profit without affecting of any finance cost on capital investment.
Unlike the primary segment of Company's operation in the manufacture of IndustrialSafety Hand Gloves which concentrates on export markets only this segment is engagedexclusively for production of baby garments to cater the domestic market. This unit hadrecorded a significant progress in the revenue. The company have further undertaken aprogramme of widening its area of operation to enter into rapidly growing Fashion Industryof the upcoming Indian Market the Company foresees a potential for multiplying itsrevenue generation in the near future.
NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE SUBSIDIARIES JOINT VENTURES ORASSOCIATE COMPANIES DURING THE YEAR
During the financial year ended 31st March 2016 no entity became or ceased to be thesubsidiary joint venture or associate of the Company.
Your Directors are pleased to recommend Dividend of Rs. 1.50 per equity share of Rs. 10each for the Financial Year 2015-16. i.e. 15% on the paid up equity share capital of thecompany. The proposed dividend subject to approval of Shareholders in the ensuing AnnualGeneral Meeting of the Company would result in appropriation of Rs. 46 lacs (includingCorporate Dividend Tax of Rs. 8 lacs) out of the net profits of the Company. The dividendwould be payable to all Shareholders whose names appear in the Register of Members as onthe Record Date i.e. from the close of business hours of 22nd September 2016. The Registerof Members and Share Transfer books shall remain closed from 23rd September 2016 to 26thSeptember 2016 (both days inclusive).
Your Company proposes to transfer a sum of Rs. 240 lacs to the General Reserve andcarry forward a balance Rs. 198 lacs in the Profit and Loss Account.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of Section 125 of the Companies Act 2013 your Company hastransferred Rs. 119850/- during the year 2015-16 to the Investor Education andProtection Fund. This amount was lying unclaimed/ unpaid with the Company for a period ofseven years after declaration of Dividend for the financial year 2007-08.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial statements relateand the date of this Report.
CHANGE IN NATURE OF BUSINESS IF ANY
During the F.Y 2015-16 there has been no change in the nature of business of theCompany.
CAPITAL / FINANCE
During the year the Company did not issue/allot any Shares/Securities.
As on 31st March 2016 the paid up share capital of your Company stood at Rs.25200000 comprising 2520000 Equity shares of Rs. 10 each fully paid.
The company proposes to raise further capital to the tune of Rs. 12.50 crores (RupeesTwelve Crore Fifty lacs) by issue and allotment of further equity shares on Right basisduring the current year with a view to augment its Working Capital needs and repayment ofoutstanding unsecured loans as well as financing the company's expansion projects .
DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL INCLUDING THOSE WHO WERE APPOINTED ORHAVE RESIGNED DURING THE YEAR
Mr. Shri Krishan Saraf (DIN: 00128999) was re-appointed as Managing Director of theCompany for three years with effect from 1st April 2015.
Mr. Deo Kishan Saraf (DIN: 00128804) the Whole Time Director and CFO is proposed to beappointed for a term of 3(three) years pursuant to section 196 of the Companies Act 2013in terms of draft agreement approved by Board subject to approval of the members in thefollowing Annual General Meeting.
Mrs.Trishna Patodia Pereira (DIN - 03501546) was appointed as a Non-ExecutiveIndependent Director with effect from 1st June 2015.
Mr. Mukul Banerjee (DIN- 07527632) has been appointed as Non- Executive IndependentDirector of the Company with effect from 30th May 2016 for a term of five years subject toapproval of the Shareholders at the ensuing Annual General Meeting by the Board ofDirectors of the Company at its meeting held on 30th May 2016.
The Company has received a notice under section 160(1) of the Companies Act 2013 alongwith a security deposit proposing candidature of Mrs. Rashi Saraf (DIN- 07152647) forappointment as a Non-Executive Non-Independent Rotational Director.
Mrs. Kusum Saraf (DIN-01503955) who was appointed as Non-Executive Non-IndependentAdditional Director ceased to be the Director of the Company with effect from 21stSeptember 2015.
Miss Shruti Poddar was appointed as the Company Secretary and Compliance Officer of theCompany with effect from 01.02.2016. Before that Mr. Mithun Paul had been appointed as theCompany Secretary and Compliance Officer of the Company for a very short period from01.06.2015 to 31.08.2015 after Miss. Deepa Singh having resigned with effect from31.05.2015.
As per the disclosure received from the Directors none of the Directors aredisqualified from being appointed as Directors as specified in Section 164(2) of theCompanies Act 2013.
The Independent Directors have furnished required declaration as provided in Section149(7) of the Companies Act 2013 regarding their independence.
KEY MANAGERIAL PERSONNEL
In compliance with the provisions of Section 203 of the Companies Act 2013 theCompany formally appointed the following persons as Key Managerial Personnel of theCompany:
1. Mr. Shri Krishan Saraf - Managing Director
2. Mr. Deo Kishan Saraf - Whole-time Director & CFO
3. Miss. Shruti Poddar - Company Secretary
FORMAL ANNUAL EVALUATION
As the ultimate responsibility for sound governance and prudential management of acompany lies with its Board it is imperative that the Board remains continuallyenergized proactive and effective. An important way to achieve this is through anobjective stock taking by the Board of its own performance. In accordance with theframework approved by the Nomination and Remuneration Committee the Board of Directorsin its Meeting held on 28th March 2016 undertook the evaluation of its own performanceits Committees and all the individual Directors. The review concluded by affirming thatthe Board as a whole as well as all of its Members individually of the Committees of theBoard continued to display commitment to good governance ensuring a constant improvementof processes and procedures. It was further acknowledged that every individual Member andCommittee of the Board contribute his best in the overall growth of the organisation.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
During the financial year 2015-2016 the Board of Directors of the Company met 9(Nine) times on 30th May 2015 15th July 2015 14th August 2015 14th November 20158th December 2015 17th December 2015 27th January 2016 11th February 2016 and 28thMarch 2016. Further a separate Meeting of the Independent Directors of the Company wasalso held on 28th March 2016 where as the prescribed items enumerated under Schedule IVto the Companies Act 2013 and clause 25 of the Listing Regulations were discussed.
EXTRACT OF THE ANNUAL RETURN
The extract of the Annual Return in Form No. MGT 9 forms part of the Board's Report andis annexed herewith as
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) of the Companies Act 2013 the Directors to the best oftheir knowledge hereby state and confirm that:
a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit of the company for that period;
c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
d) the directors had prepared the annual accounts on a going concern basis;
e) the internal financial controls to be followed by the company were laid down andsuch internal financial controls were adequate and were operating effectively; and
f) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
1. STATUTORY AUDITORS
At the Annual General Meeting (AGM) held on 9th September 2014 M/s. R. K. Bajaj &Co. Chartered Accountants (Firm Regn. No. 314140E) had been appointed as the StatutoryAuditors of the Company for a period of Three (3) years. Ratification of the appointmentof Statutory Auditors is being sought from the members of the Company at the ensuing AGM.
Further the report of the Statutory Auditors when read with Notes and Schedules asannexed are self-explanatory and therefore do not call for any further comments.
2. COST AUDITORS
In view of the provisions of Section 148 and all other applicable provisions of theCompanies Act 2013 read with the Companies (Audit and Auditors) Rules 2014 theprovisions of Cost Audit is not applicable on the products of the Company for the FY2015-16.
3. SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act 2013 read withcorresponding Rules framed thereunder M/s Rekha Goenka & Associates CompanySecretaries were appointed as the Secretarial Auditors of the Company to carry out thesecretarial audit for the year ending 31st March 2016.
SECRETARIAL AUDIT REPORT
A Secretarial Audit Report given by the Secretarial Auditors is annexed with thisReport as ANNEXURE- II. There are no qualifications reservations or adverseremarks made by Secretarial Auditors in their Report.
The Company has not accepted any deposits from the public during the year as definedunder Section 73 of the Companies Act 2013. Deposit outstanding as on 31st March 2016including unclaimed deposit was Nil.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS
The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weakness in the design or operation was observed.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
During the financial year ended 31st March 2016 no Loan or Guarantees u/s 186 of theCompanies Act 2013 was made or provided by the Company. The particulars of investmentsmade by the Company under Section 186 forms part of the Notes to the financial statementsprovided in this Annual Report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
Subject to any disclosure in the financial section thereof the Company has not enteredinto any contract or arrangement with related parties referred to in Sub-section (1) ofSection 188 of the Companies Act 2013.
The total number of employees of the Company as on 31st March 2016 was 165.
Your Company believes that employees are the most valuable assets of an organizationand the optimum utilization of the skillknowledge and attitude they possess areinstrumental to the growth of the organization.
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsunder the Sexual Harassment of Women at Workplace (Prohibition Prevention and Redressal)Act 2013. No complaint has been received during the year under review.
The Audit Committee of the Board of Directors of the Company comprises 3 (Three)Members namely Mr. S. K. Ghosh Mrs. Trishna Patodia Pereira and Mr. D. K. Sarafmajority of them being Independent Directors except Mr. D.K Saraf who is aNon-Independent -Executive Director. Mr. S. K. Ghosh an Independent Director is theChairperson of the Audit Committee. The Board accepted the recommendations of the AuditCommittee whenever made by the Committee during the year.
DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES
The Company's Whistle Blower Policy encourages Directors and employees to bring to theCompany's attention instances of unethical behaviour actual or suspected incidents offraud or violation of the Acknit Code of Conduct that could adversely impact the Company'soperations business performance and / or reputation. The Policy provides that the Companyinvestigates such incidents when reported in an impartial manner and takes appropriateaction to ensure that the requisite standards of professional and ethical conduct arealways upheld. It is the Company's Policy to ensure that no employee is victimised orharassed for bringing such incidents to the attention of the Company. The practice of theWhistle Blower Policy is overseen by the Audit Committee of the Board and no employee hasbeen denied access to the Committee. The Whistleblower Policy is available on theCompany's corporate websitehttp://www.acknitindia.com/corporate-policies/whistle-blower-policy-acknit.pdf.
NOMINATION AND REMUNERATION COMMITTEE
The Nomination & Remuneration Committee comprises 3 (three) Non-ExecutiveIndependent Directors namely Mr. S. K. Ghosh (Chairperson) Mrs. Trishna Patodia Pereira(Member) and Mr. Mukul Banerjee (Member).
Mr. Mukul Banerjee has been appointed as member of the Committee with effect from 30thMay 2016.
The Company's Remuneration Policy is available on the Company's websitehttp://www.acknitindia.com/corporate-policies/nomination-and-remunertion-policy.pdf.
The details of terms of reference of the Nomination and Remuneration Committee numberand dates of the meetings held attendance of the Directors and remuneration paid to allthe Directors during the year ended 31st March 2016 are given separately in the attachedCorporate Governance Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company is not covered under the purview of Section 135 of Companies Act 2013hence CSR provisions are not applicable.
Your Company upholds the standards of governance and is compliant with the CorporateGovernance provisions as stipulated under SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 in both letter and spirit. The Company's core values ofhonesty and transparency have since its inception been followed in every line of decisionmaking.
The Corporate Governance Report giving the details as required under Paragraph C ofSchedule V of Securities and Exchange Board of India (Listing Obligations & DisclosureRequirements) Regulations 2015 is attached as Annexure III and forms part of thisReport. The Corporate Governance Certificate for the year ended on 31st March 2016 issuedby M/s Rekha Goenka & Associates Practising Company Secretary Kolkata is alsoattached as Annexure IV and forms part of this Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In terms of Regulation 34(2) read with Paragraph B of Schedule V of Securities andExchange Board of India (Listing Obligations & Disclosure Requirements) Regulations2015 Management Discussion and Analysis Report is attached as Annexure V and formspart of this Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining to conservation of energy technology absorption foreignexchange earnings and outgo as required under Section 134(3)(m) of the Companies Act 2013read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished in Annexure VIand forms part of this Report.
PARTICULARS OF EMPLOYEES
The information on particulars of employees as required under Section 197(12) of theAct read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is annexed as Annexure VII.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
There was no significant and material order passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.
ICRA Ltd. vide their rating report of March 2016 has upgraded the following ratings ofyour Company's financial instruments:
|Instrument ||Rating action (March 2016) |
|Cash credit ||[ICRA]BBB- (Stable) upgraded |
|Term loan ||[ICRA]BBB- (Stable) upgraded |
|Bank guarantee ||[ICRA]BBB- (Stable) upgraded |
|Non-Fund Based Limits ||[ICRA]A3+ upgraded |
LISTING OF SHARES
The shares of the Company are listed on the Calcutta Stock Exchange Ltd (CSE) and BSELimited (BSE). Subsequent to the notification of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 during the year the Company has entered into"Uniform Listing Agreement" with both the Stock Exchanges where its securitiesare listed namely CSE and BSE Limited in order to carry out a novation of the erstwhileListing Agreement.The listing fee for the year 2016-17 has already been paid to the creditof BSE and rectified bill has been demanded from CSE for processing the payment.
MANAGING DIRECTOR'S CERTIFICATE
Managing Director's Certificate under Regulation 34(3) read with Paragraph D ofSchedule V of Securities and Exchange Board of India(Listing Obligations and DisclosureRequirements) Regulations 2015 on compliance of Code of Conducts annexed as AnnexureVIII.
The Board places on record its appreciation for the continued co-operation and supportextended to the Company by customers vendors regulators banks financial institutionsrating agencies stock exchanges depositories auditors legal advisors consultantsbusiness associates and all the employees with whose help co-operation and hard work theCompany is able to achieve the results. The Board deeply acknowledges the trust andconfidence placed by the consumers of the Company and all its shareholders.
For and on behalf of the Board of Directors
For Acknit Industries Limited
|Shri Krishan Saraf ||Deo Kishan Saraf |
|Managing Director ||Whole-time Director & CFO |
|DIN-00128999 ||DIN-00128804 |
|Place: Kolkata || |
|Date: 30th May 2016 || |