Your Directors have pleasure in presenting the Thirtieth Annual Report of K-LIFESTYLE& INDUSTRIES LTD along with the Audited Statements of Accounts for the Financial Yearended 31st March 2017.
|PARTICULARS ||2016-2017 ||2015-2016 |
| ||(Rs. in Lacs) ||(Rs. in Lacs) |
|Revenue from operations ||5846.78 ||10542.55 |
|Finance Cost ||3586.00 ||3491.21 |
|Depreciation and Amortization Expenses ||2679.80 ||2679.80 |
|Profit before Exceptional and Extraordinary Items and Tax ||(5914.61) ||(6020.19) |
|Exceptional Items & Extraordinary Items ||- ||- |
|Profit/Loss before Tax ||(5914.61) ||(6020.19) |
|Provision for Tax ||- ||- |
|Deferred Tax Assets ||298.51 ||202.99 |
|Profit/Loss after Tax ||(5616.10) ||(5817.20) |
During the year under review the performance of the Company was affected on- accountof heavy burden of Finance Cost and Depreciation.
During the year the Revenue from operations of Company has reduced to Rs. 5846.78Lacs as against Rs. 10542.55 Lacs in respect of the previous Financial Year ended 31stMarch 2016. The Company has incurred Net Loss of Rs. 5616.10 Lacs as against Net Loss ofRs. 5817.20 Lacs in the previous financial year ended 31st March 2016.However there is no cash loss during the year the loss is due to heavy burden of FinanceCost and Depreciation.
The Company has incurred Substantial losses due to markets resulting in poor sales.
In view of Loss of the Current year your Directors are unable to recommend anydividend on the equity shares for the year under review.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
All the Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149 (6) of the Act and Clause 17 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 ("SEBI ListingRegulations") entered into with the Stock Exchanges. In the opinion of the Boardthey fulfill the conditions of independence as specified in the Act and the Rules madethere under and are independent of the management. Further the Composition is given inthe Corporate Governance Report.
The Composition of the Audit Committee is as given in the Corporate Governance Report.
NOMINATION & REMUNERATION COMMITTEE:
The Nomination and Remuneration Committee has defined the evaluation criteriaprocedure and time schedule for the Performance Evaluation process for the Board itsCommittees and Directors which is given in the Report.
ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITS COMMITTEES AND OFDIRECTORS:
Pursuant to the provisions of the Companies Act 2013 and Regulation 17 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 ("SEBI ListingRegulations") the Board has carried out an annual evaluation of its own performanceperformance of the Directors as well as the evaluation of the working of its Committees.
The Board's functioning was evaluated on various aspects including inter alia degreeof fulfillment of key responsibilities Board structure and composition establishment anddelineation of responsibilities to various Committees effectiveness of Board processesinformation and functioning.
Areas on which the Committees of the Board were assessed included degree of fulfillmentof key responsibilities adequacy of Committee composition and effectiveness of meetings.
The performance evaluation of the Independent Directors was carried out by the entireBoard excluding the Director being evaluated. The performance evaluation of the Chairmanand the Non Independent Directors was carried out by the Independent Directors who alsoreviewed the performance of the Board as a whole.
Directors were evaluated on aspects such as attendance and contribution at Board/Committee Meetings and guidance / support to the management outside Board / CommitteeMeetings. In addition the Chairman was also evaluated on key aspects of his roleincluding setting the strategic agenda of the Board encouraging active engagement by allBoard members and motivating and providing guidance to the Managing Director.
The Nomination and Remuneration Committee also reviewed the performance of the Boardits Committees and of the Directors. The Chairman of the Board provided feedback to theDirectors on an individual basis as appropriate. Significant learning and action pointswith respect to the evaluation were presented to the Board.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
The Directors are happy to state that the relations between the Company and itsEmployee remained cordial throughout the year. The Directors acknowledge and express theirappreciation for the contributions made by the employees at all levels. Focused attentionwas given for knowledge updating and application of new technologies available to reducecosts and to meet the business challenges.
None of the employees drew remuneration of Rs. 10200000/- or more per annum/ Rs.850000/- or more per month during the year. This information is furnished as requiredunder Section 197(12) of the Companies Act 2013 read with Rules 5(2) and 5(3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided in the "AnnexureC" forming part of the Annual Report.
Having regard to the provisions of Section 136(1) of the Companies Act 2013 theAnnual Report excluding the aforesaid information is being sent to the members of theCompany. The said information is available for inspection at the Registered Office of theCompany during working hours and any member interested in obtaining such information maywrite to the Company Secretary and the same will be furnished without any fee and free ofcost.
REPORT ON CORPORATE GOVERNANCE:
Your Company is fully compliant with the Corporate Governance guidelines as laid outin Chapter IV of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. All the Directors (and also the members of the Senior Management) have affirmedinwriting their compliance with and adherence to the Code of Conduct adopted by the Company.The details of the Code of Conduct are furnished in the Corporate Governance Report ispart of this Report. The Managing Director has given a required under Chapter IV of theSEBI (Listing Obligations and Disclosure certificate Requirements) Regulations 2015("SEBI Listing Regulations").
M/s. A. F. Khasgiwala Practicing Chartered Accountants Statutory Auditors of theCompany have examined the requirements of Corporate Governance with reference to ChapterIV of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015("SEBI Listing Regulations") and have certified the compliance as requiredunder Chapter IV of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 ("SEBI Listing Regulations"). The Certificate in this regardis attached to this Report.
The Managing Director / Chief Financial Officer (CEO/CFO) certification as requiredunder Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 of the Listing Regulations is attached to this Report.
EXTRACT OF ANNUAL RETURN:
Pursuant to Section 92 (3) of the Act and Rule 12 (1) of The Companies (Management andAdministration) Rules 2014 the extract of Annual Return in form MGT-9 is annexed as "AnnexureA".
BOARD AND COMMITTEE MEETINGS:
A calendar of Board and Committee Meetings to be held during the year was circulated inadvance to the Directors. 4 (Four) Board Meetings were convened and held during the year.
The Board has constituted an Audit Committee with Mr. Pravin Kumar Parekh as ChairmanMr. Narayan Ghumatkar and Mr. Jaiprakash Mishra as the Members. During the year MrDeepak Mathur has been resigned from the Board and there have not been any instancesduring the year when recommendations of the Audit Committee were not accepted by theBoard.
Details of the composition of the Board and its Committees and of the Meetings held andattendance of the Directors at such Meetings are provided in the Corporate GovernanceReport which is part of this Directors' Report.
The Company has also constituted various other Committees viz. Nomination &Remuneration Committee Stakeholder Relationship Committee and Management & FinanceCommittee.
The intervening gap between the Meetings was within the period prescribed under the Actand the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
DIRECTORS' RESPONSIBILITY STATEMENT:
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the Internal Statutory Costand Secretarial Auditors and the reviews performed by Management and the relevant BoardCommittees including the Audit Committee the Board is of the opinion that the Company'sinternal financial controls were adequate and effective during the financial year 2016-17.
Accordingly pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act 2013the Board of Directors to the best of their knowledge and ability confirm that:
(i) in the preparation of the annual accounts the applicable accounting standards havebeen followed and that there are no material departures;
(ii) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit of the Company for that period;
(iii) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(iv) they have prepared the annual accounts on a going concern basis;
(v) they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and are operating effectively;
(vi) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:
All transactions entered by the Company with Related Parties were in the OrdinaryCourse of Business and at Arm's Length pricing basis. There were no materially significanttransactions with Related Parties during the financial year 2016-17 which were in conflictwith the interest of the Company.
The Company has also adopted Related Party Transaction Policy as required under ChapterIV of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
The Board has approved the policy on Related Party Transactions and MaterialSubsidiary. The policies have been uploaded on the Company's website under the web link:http:// k-lifestyleind.com/wp/related-party-transactions/ Particulars of contracts orarrangements with related parties referred to in Section 188(1) of the Companies Act2013 in the prescribed Form AOC-2 is appended as "Annexure B" to theBoard's report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of loans guarantees and investments covered under the provisions of Section186 of the Companies Act 2013 are given in Notes to the financial statements.
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Company familiarizes its Independent Directors with the Company their rolesrights responsibilities in the company nature of the industry in which the companyoperates business model of the company etc. through various programmers.
The details of such familiarization programmed shall be disclosed on the Company'swebsite at the following web link: http:// k-lifestyleind.com/wp.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICHHAVE OCCURRED BETWEEN MARCH 31 2017 AND 11TH AUGUST 2017:
There were no material changes and commitments affecting the financialposition of theCompany between the end of financial year (March 31 2017) and the date of the Report 11thAugust 2017.
CONSERVATION OF ENERGY:
a) Company ensures that the manufacturing operations are conducted in the mannerwhereby optimum utilisation and maximum possible savings of energy is achieved.
b) No specific investment has been made in reduction in energy consumption.
c) As the impact of measures taken for conservation and optimum utilisation of energyare not quantitative its impact on cost cannot be stated accurately.
d) Since the Company does not fall under the list of industries which should furnishthis information in Form A annexed to the aforesaid Rules the question of furnishing thesame does not arise.
Company's products are manufactured by using in-house know how and no outsidetechnology is being used for manufacturing activities. Therefore no technology absorptionis required. The Company constantly strives for maintenance and improvement in quality ofits products and entire Research & Development activities are directed to achieve theaforesaid goal.
FOREIGN EXCHANGE EARNINGS AND OUT-GO:
During the period under review there was no foreign exchange earnings or out flow.
The Remuneration policy of the Company comprising the appointment and remuneration ofthe Directors Key Managerial Personnel and Senior Executives of the Company includingcriteria for determining qualifications positive attributes independence of a Directorand other related matters has been provided in the Corporate Governance Report which formsa part of this Report.
The Company has adopted a Risk Management Policy in accordance with the provisions ofthe Act and Chapter IV of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. It establishes various levels of accountability and overview within theCompany while vesting identified managers with responsibility for each significant risk.
The Internal Audit Department facilitates the execution of Risk Management Practices inthe Company in the areas of risk identification assessment monitoring mitigation andreporting. Through this programme each Function and Unit addresses opportunities andrisks through a comprehensive approach aligned to the Company's objectives. The Companyhas laid down procedures to inform the Audit Committee as well as the Board of Directorsabout risk assessment and management procedures and status.
VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The Company has adopted a Whistle Blower Policy to provide a formal mechanism to theDirectors and employees to report their concerns about unethical behaviour actual orsuspected fraud or violation of the Company's Code of Conduct or ethics policy.
The Policy provides for adequate safeguards against victimization of employees whoavail of the mechanism and also provides for direct access to the Chairman of the AuditCommittee. It is affirmed that no personnel of the Company has been denied access to theAudit Committee.
POLICY ON PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE:
The Company has zero tolerance for sexual harassment at workplace and has adopted aPolicy on Prevention Prohibition and Redressal of Sexual Harassment at the Workplace inline with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules there under. The Policy aims to provideprotection to employees at the workplace and prevent and redress complaints of sexualharassment and for matters connected or incidental thereto with the objective ofproviding a safe working environment where employees feel secure. The Company has notreceived any complaint of sexual harassment during the financial year 2016-17.
SAFETY HEALTH AND ENVIRONMENT:
Sustained and meticulous efforts continue to be exercised by the Company at all plantsof the Company towards greener production and environment conservation. The Companyperseveres in its efforts to indoctrinate safe and environmentally accountable behavior inevery employee as well as vendors by rigid compulsory annual training and refreshercourses as well as frequent awareness programme. Mock drills of emergency preparednessare regularly conducted at all the plants showing Company's commitment towards safety notonly of its own men and plants but also of the society at large.
Safety records at all plants showed considerable improvement and accident statisticsshowed downward trend. This was made possible by strict adherence to laid down proceduresand following of international guidelines. Involvement of workers in all safety mattershas been encouraged by their participation in shop floor safety meetings. To achieve thegoals environment protection systems and processes are well in place. To meet thechallenge of environment protection in a proactive manner unavoidable wastes are dealtwith in the most efficient and scientific way.
The health of employees and the environment in and around the Plant area have beengiven due care and attention. The Company continued to comply with the prescribedindustrial safety environment protection and pollution control regulation at itsproduction plant through periodic checks of the system involved and constant monitoringto meet the standards set by the pollution control authorities etc.
All the mills of the Company are eco-friendly and do not generate any harmfuleffluents. They have facilities for captive power generation as a stand-by arrangement tomeet any contingency. Safety devices have been installed wherever necessary although boththe spinning and knitting activities are known to be quite safe and free from usualhazards of water and air pollution.
INDUSTRIAL REALATIONS & HUMAN RESOURCES MANAGEMENT:
The Company is of firm belief that good Human Resource Management would ensure successthrough high performance. HR strategy and plans of the Company are deeply embedded withthe organizational goals. In order to enhance the manpower productivity the goal is set toincrease the production capacity of the various plants and rationalize the manpowerthrough scientific study. All the operational goals of the top management emanate from thebusiness plan. The goals of MD are shared with his subordinates who in turn share theirgoal with their respective subordinates and so on. Regular visits by HR team are beingmade to all the plants to meet the employees and also interaction meetings are conductedto get their feedback based on which HR policies are improved continuously. The processhas resulted in better employee relationship.
The Company lays due emphasis on all round development of its human resource. Hencetraining of the employees is aimed at systematic development of knowledge skillsaptitude and team work. Training is designed for the development of personal skillsnecessary for the performance of the present job and to prepare them for future growth.Individual development is given top priority to groom high caliber manpower.
The Company has not invited/received any Fixed Deposits from the Public during the yearunder report.
The properties / assets of your Company are adequately insured.
ACCOUNTS & ACCOUNTING STANDARDS:
The company adhers to the Accounting Standards as prescribed under Section 133 of theCompanies Act 2013 and Rule 7 of the Companies (Accounts) Rules 2014 in the preparationof its Financial Statements and also to the guidelines prescribes by RBI.
M/s. A. F. Khasgiwala & Co. Chartered Accountants (Membership No. 006491 FirmRegistration No. 105114W) have been Auditors of the Company for the past years and havecompleted ten years. Their term as auditors is upto the conclusion of the forthcomingAnnual General Meeting. In accordance with the provisions of Section 139 of the Act M/s.Rishi Sekhri & Associates Chartered Accountants (Membership No. 126656 & FirmRegistration No.128216W) be and is hereby appointed as Auditors of the Company in place ofthe retiring auditors M/s/ A. F. Khasgiwala & Co. Chartered Accountants (MembershipNo. 006491 Firm Registration No. 105114W) to hold office from the conclusion of thisAnnual General Meeting till the conclusion of the Thirty Fifth Annual General Meeting ofthe Company to be held in the year 2022 subject to ratification of such appointment bythe Members at every subsequent Annual General Meeting if so required under the Act.
M/s Pradip Damania Cost Accountants have been conducting Cost Audit for the Companyfor the past several years the company re- appoint M/s Pradip Damania Cost Accountantsto conduct the Cost Audit of the company for the year ending 31st March 2018.Pursuant to the provisions of section 148 of the Act read with the Companies (Audit andAuditors) Rules 2014 members are requested to consider ratification of the remunerationpayable to M/s Pradip Damania.
Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board of Directors of the Companyhad appointed M/s. Ajay Goyal & Associates a firm of Company Secretaries in Practiceto undertake the Secretarial Audit of the Company for the year ended 31stMarch 2017. The Secretarial Audit Report is annexed as "Annexure D".
The Auditors' Report and the Secretarial Audit Report for the financialyearended31qualification st March2017donotcontainany reservation adverse remark or disclaimer.
Pursuant to the provisions of Section 138 of the Companies Act 2013 the Board ofDirectors of the Company had appointed Internal Auditor of the Company for the financialyear 2016-17 and Company carries out an Internal Audit on quarterly basis.
The Directors have pleasure in recording their appreciation of the assistanceco-operation and support extended to your Company by the shareholders all GovernmentAuthorities Financial Institutions Banks Consultants Solicitors and Customers.
| ||For and Behalf of the Board of Directors |
| ||Sd/- |
|Place: Mumbai ||Jaiprakash Mishra |
|Date: 11th August 2017 ||Managing Director |
| ||DIN: 07190590 |