The Members of KABSONS INDUSTRIES LIMITED
Your Directors hereby present the 24th Annual Report and Accounts of the Company forthe year ended 31st March 2016.
| ||Year Ended 31.03.2016 ||Year Ended 31.03.2015 |
|1) Sales Other Income & Exceptional items ||167.29 ||215.32 |
|2) Profit before Depreciation ||(128) ||48.16 |
|3) Depreciation ||9.53 ||10.16 |
|4) (Loss) Profit after Financial Charges and Depreciation ||(10.81) ||38.00 |
DISCUSSION ON FINANCIAL PERFORMANCE:
During the year under consideration the Company has incurred a loss of Rs.1.28 Lakhsbefore interest and depreciation as against profit of Rs.48.16 Lakhs during the previousyear which includes lease income and lease income is the major source of revenue to theCompany. Your Directors are hopeful of better performance with increased revenue in thenext year.
The Company has been focusing on Lease incomes so as to utilize the existing assets.There exists a mismatch of capacity in terms of availability in certain markets and demandin other markets. Consequently there are very few plants where the servicing operationsare viable for the operations of the Company. This situation is not going to change toomuch in the near future.
LIQUEFIED PETROLEUM GAS (LPG) INDUSTRY OVERVIEW
Most of the LPG volume is handled by PSU's for domestic supplies. With such large scalepenetration on the part of the PSU's at a price substantially lower than market priceeffect the prospects of the private sector operating in the same segment and the PSU'sstarted limiting the supply of cylinders to 12 numbers in a year to consumers.
Your Company is concentrating on third party Bottling opportunities wherever possiblein the palce of leasingout to have assets of the Company are maintained properly.
The Following is the Financial Performance of your Company:
| ||2015-16 ||2014-15 ||Inc/(Dec) % |
|INCOME: || || || |
|Sales ||58.64 ||90.38 ||(35.12) |
|Other Income ||136.13 ||124.94 ||8.96 |
|Total : ||194.77 ||215.32 ||(9.54) |
|Expenditure: || || || |
|Manufacturing Expenses ||55.54 ||81.00 ||31.43 |
|Staff Cost ||42.39 ||37.63 ||(12.65) |
|Other Expenses ||70.65 ||48.53 ||(45.58) |
|Exceptional item ||27.48 ||- ||(100) |
|Depreciation ||9.53 ||10.16 ||6.20 |
|Total : ||205.59 ||177.32 ||(15.94) |
|(Loss)/Profit ||(10.82) ||38.00 ||(128.47) |
Material changes and commitments if any affecting the financial position of the Companyoccurred between the end of the financial year to which this Financial Statements relateand the date of the report
There have been no material changes and commitments affecting the financial positionof the Company which occurred during between the end of the financial year to which thefinancial statements relate and the date of this report.
Details of significant and material orders passed by the regulators/ courts/ tribunalsimpacting the going concern status and the Companys operations in future
There are no significant material orders passed by the Regulators/ Courts which wouldimpact the going concern status of the Company and its future operations.
Authorized Share Capital
During the year under review there was no change in authorized share capital of theCompany. Authorized share capital of the company as on March 31 2016 was Rs.180000000comprising of 18000000 equity shares of Rs.10.00 each.
Paid-up Share Capital
During the year under review there was no change in paid up share capital of theCompany. Paid up share capital of the company as on March 31 2016 was Rs.174630000comprising of 17463000 equity shares of Rs.10 each.
Buy Back of Securities
The Company has not bought back any of its securities during the year under review.
The Company has not issued any Sweat Equity Shares during the year under review.
The Company has not issued any bonus shares during the year under review.
Employees Stock Option
The Company has not provided any Stock Option Scheme to the employees.
Your Directors have not recommended any dividend on Equity Shares for the year underreview.
Transfers to Reserves
Your Board of Directors does not appropriate any amount to be transferred to GeneralReserves during the year under review.
During the year under review your Company has not accepted any fixed deposits withinthe meaning of Section 73 of the Companies Act 2013 read with rules made there under.
Particulars of Contracts & Arrangements with Related Parties
All transactions entered by the Company with Related Parties were in the Ordinarycourse of Business and are at Arm's Length pricing basis. The Audit Committee grantedapprovals for the transactions and the same were reviewed by the Committee and the Boardof Directors.
There were no materially significant transactions with Related Parties during thefinancial year 2015-16 which were in conflict with the interest of the Company. Thedetails of contracts and arrangements with related parties as referred to in Section188(1) of the Companies Act 2013 were given as Annexure -1 to the Board's Report in formNo: AOC-2 pursuant to Section 134 (3)(h) of the Act read with Rule 8(2) of the Companies(Accounts) Rules 2014.
Related party Transactions:
The details of the Related Party Transactions are furnished in Note 25.2 of the Noteson the Financial Statements attached to this Report.
All the related party transactions have been on an arm's length basis.
Particulars of Loans Guarantees or Investments
Pursuant to section 186 of Companies Act 2013 and Schedule V of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 ("Listing Regulations")the Company neither has directly or indirectlygiven any loan to its Directors nor extended any guarantee or provided any security inconnection with any loan taken by them. Further the Company has neither given anyintercorporate loan / advance nor made any investments in other companies during thefinancial year 2015-16. Number of Board Meetings held
The Board of Directors duly met 4 times during the financial year from 1st April 2015to 31st March 2016 the details of which are given in the Corporate Governance Report.The maximum interval between any two meetings did not exceed 120 days as prescribed inthe Companies Act 2013 and Secretarial Standard -1. Directors and Key ManagerialPersonnel
In terms of Section 152 of the Companies Act 2013 Mr. Rajiv Kabra Executive Directorwould retire by rotation at the forthcoming AGM and is eligible for re-appointment. Mr.Rajiv Kabra has offered himself for re-appointment.
Based on the confirmations received from Directors none of the Directors aredisqualified from appointment under Section 164 of the Companies Act 2013.
There was no other appointment or cessation of appointment of key managerial personnelduring the financial year. In the Board Meeting held on April 09 2016 the Companyappointed Mr. Rakhal Panigrahi as Company Secretary cum Compliance Officer of the companywith effective from April 09 2016.
Declaration by Independent Directors
The Independent Directors of the Company have submitted their declarations as requiredunder Section 149(7) of the Companies Act 2013 stating that they meet the criteria ofindependence as per sub-section (6) of Section 149 of the Act.
Familiarization programme for Independent Directors
The Company proactively keeps its Directors informed of the activities of the Companyits management and operations and provides an overall industry perspective as well asissues being faced by the industry. Independent Directors Meeting
The Independent Directors met on 12.02.2016 without the attendance of Non-IndependentDirectors and members of the Management. The Independent Directors reviewed theperformance of Non-Independent Directors and the Board as a whole; the performance of theChairman of the Company taking into account the views of Executive Director andNon-Executive Directors and assessed the quality quantity and timeliness of flow ofinformation between the Company Management and the Board that is necessary for the Boardto effectively and reasonably perform their duties.
The Board adopted a formal mechanism for evaluating its performance as well as that ofits Committees and individual Directors including the Chairman of the Board. The exercisewas carried out through a structured evaluation process covering various aspects of theBoard functioning such as composition of the Board & committees experience &competencies performance of specific duties & obligations contribution at themeetings and otherwise independent judgment governance issues etc.
Directors Responsibility Statement as required under Section 134(5) of the CompaniesAct 2013:
Pursuant to the provisions of Section 134(5) of the Companies Act 2013 the Board ofDirectors states that:
(a) In the preparation of annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
(b) 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 fair viewof the state of affairs of the Company at the end of the financial year and of the profitand loss for that period;
(c) 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;
(d) They have prepared the annual accounts on a going concern basis;
(e) They have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively and
(f) They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
Nomination and Remuneration policy
In compliance to the provisions of Section 178 of the Companies Act 2013 andRegulation 19 of the Listing Regulation entered into with the Stock Exchanges theNomination and Remuneration Committee has recommended to the Board a Nomination andRemuneration policy with respect to appointment / nomination and remuneration payable forthe Directors Key Managerial Personnel and senior level employees of the Company. Thesaid policy has been adopted by the Board and the same will form part of the Annual Reportas Annexure - II to the Board's Report.
At the Annual General Meeting held on September 30 2014 M/s. Brahmayya & CoChartered Accountants (Firm Reg. No: 000513S) were appointed as Statutory Auditors of theCompany to hold office for a period of three years i.e. till the conclusion of the AnnualGeneral Meeting to be held in the calendar year 2017. In terms of the first proviso toSection 139 of the Companies Act 2013 the appointment of the auditors shall be placed forratification at every Annual General Meeting. Accordingly the said appointment of M/s.Brahmayya & Co Chartered Accountants as statutory auditors of the Company is placedfor ratification by the Shareholders. In this regard the Company has received acertificate from the auditors to the effect that if their appointment is ratified itwould be in accordance with the provisions of Section 141 of the Act. The Auditors havealso confirmed that they hold a valid certificate issued by the Peer Review Board of theInstitute of Chartered Accountants of India.
Qualification by Statutory Auditor
Information & Explanation in respect of Qualification / Reservation or Adverseremarks contained in Independent Auditors Report under Paras: Basis for Qualified opinionEmphasis of Matter and Other Matters:
A) In view of very limited strength of employees presently working with the Companythe requirements of AS-15 Employee Benefits in respect of gratuity could not be compliedwith. However provision for gratuity as required under Payment of Gratuity Act has beenprovided for.
B) Inspite of continues erosion of networth position of excess of current liabilitiesover current assets and uncertainty associated with operations of the company theAccounts of the Company are prepared on going concern basis.
C) Interest for the year Rs. 633691/- on deposits of distributors/dealers has notbeen provided in view of company's adverse financial position and will be negotiated forwaiver resulting to understatement of Loss by that amount and understatement of currentliabilities by Rs.9707879/-
D) The company could not get confirmation of balances in respect of Trade Receivablesand Trade Payables other than due from/to related parties as most of them are very old andpresently no transactions are being taken place with them.
This report form part of the Annual Report.
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board of Directors has appointedM/s. B S S & Associates Practicing Company Secretaries for conducting SecretarialAudit of the Company for the financial year 2015-2016. The Secretarial Audit Report isannexed herewith as Annexure - III.
Qualification by Secretarial Auditor
The Secretarial Auditor's Report does not contain any qualifications reservation oradverse remarks except non compliance of Section 203 of the Companies Act 2013 andRegulation 6 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 in respect of appointment of Company Secretary as Key Managerial Person.
In complying with the provisions of Section 203 of the Companies Act 2013 regardingappointment of Company Secretary your company had been in the process of identifying asuitable person and accordingly has appointed Mr. Rakhal Panigrahi as Company Secretarycum Compliance Officer of the company effective 09th April 2016.
In pursuance of Section 138 of the Companies Act 2013 read with rules made thereunder the Board has appointed Mr. M Krishna Murthy CFO of the Company as InternalAuditors of the Company to carry out internal auditing of books of accounts periodically.
Internal financial control and its adequacy
The Board of your Company has laid down internal financial controls which comply withthe provisions of the Companies Act 2013 and Listing Regulation with Stock Exchange andthat such internal financial controls are adequate and operating effectively. Your Companyhas adopted policies and procedures for ensuring the orderly and efficient conduct of itsbusiness including adherence to the Company's policies the safeguarding of its assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial disclosures.
Vigil Mechanism / Whistle Blower Policy
Pursuant to Section 177(9) of the Companies Act 2013 read with Rule 7 of the Companies(Meetings of Board and its Powers) Rules 2014 and Regulation 22 of the ListingRegulation the Board has adopted Whistle Blower Policy. This policy aims for conductingthe affairs in a fair and transparent manner by adopting highest standards ofprofessionalism honesty integrity and ethical behavior.
A mechanism has been established for employees to report concerns about unethicalbehavior actual or suspected fraud or violation of Code of Conduct and Ethics. The policyalso provided adequate safeguards against the victimization of employees who avail of themechanism and allows direct access to the Chairman of the Audit Committee in exceptionalcases.
Your Company hereby affirms that during the year no Director / employee have beendenied access to the Chairman of the Audit Committee and that no complaints were received.
Management Discussion and Analysis
In terms of the provisions of Regulation 34 of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 the ManagementDiscussion and Analysis given below discusses the key issues concerning the business andcarried on by the Company.
Management of Risks
There is considerable pressure to keep up the realization from the services in view ofhighly competitive market.
The Composition of the Audit Committee is provided in the Corporate Governance Reportforming part of this report. All the recommendations made by the Audit Committee wereaccepted by the Board.
The Risk Management Committee duly constituted by the Board had formulated a RiskManagement Policy for dealing with different kinds of risks attributable to the operationsof the Company. Risk Management Policy of the Company outlines different kinds of risksand risk mitigating measures to be adopted by the Board. The Company has adequate internalcontrol systems and procedures to combat the risk. The Risk Management procedure will bereviewed periodically by the Audit Committee and the Board.
Corporate Social Responsibility (CSR) Initiatives:
Section 135 of the Companies Act 2013 provides the threshold limit for applicabilityof the CSR to a Company ie. (a) networth of the Company to be Rs. 500 crore or more; or(b) turnover of the company to be Rs. 1000 crore or more; or (c) net profit of thecompany to be Rs. 5 crore or more. As the Company does not fall under any of the thresholdlimits given above the provisions of section 135 are not applicable to the Company.Extract of Annual Return
In accordance with the provisions of Section 134(3(a) of the Companies Act 2013 anextract of the Annual Return in Form MGT-9 is appended as Annexure - IV to the Board'sReport.
Information on Conservation of Energy Technology Absorption & Foreign ExchangeEarnings and outgo
Pursuant to the provisions of Section 134 (3) (m) of the Companies Act 2013 read withRule 3 of Companies (Accounts) Rules 2014 the relevant information pertaining toconservation of energy technology absorption foreign exchange earnings and outgo isappended hereto as Annexure - V and forms part of the Board's Report. CompanysPolicy on Prohibition Prevention and Redressal of Sexual Harassment of Women at Workplace
The Company prohibits any form of sexual harassment and any such incidence isimmediately investigated and appropriate action taken in the matter against the offendingemployee(s) based on the nature and the seriousness of the offence. The Company has apolicy on Prohibition Prevention and Redressal of Sexual Harassment of Women at Workplace(the Policy) and matters connected therewith or incidental thereto covering all theaspects as contained under the "The Sexual Harassment of Women at Workplace(Prohibition Prevention and Redressal) Act 2013" notified by the Government ofIndia vide Gazette Notification dated 24thApril 2013.
There was no case of sexual harassment reported during the year under review.
Remuneration ratio of the Directors / Key Managerial Personnel (KMP) / Employees:
The information required under Section 197 of the Companies Act 2013 read with rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are provided in separate annexure forming part of this Report as Annexure - VI.
The Company is committed to good corporate governance in line with the ListingAgreement and Provisions Rules and Regulations of the Companies Act 2013. The Company isin compliance with the provisions on corporate governance specified in the ListingAgreement with BSE. A certificate of compliance from Mr. Sompally Srikanth a practicingCompany Secretary and the report on Corporate Governance form part of this Directors'Report as Annexure - VII.
Disclosures as per the Listing Agreement Listing Regulation & SEBI RegulationsCash flow statement
In due compliance of the listing agreements and in accordance with the requirementsprescribed by SEBI the cash flow statement is prepared and is appended to this AnnualReport.
Company's equity shares are presently listed in the Stock exchanges of Mumbai (BSE)and other 2 stock exchanges at Ahmedabad and Kolkata.
There is an outstanding Listing Fee of Rs.11400/- and Rs.156872/- to Ahmedabad StockExchange Ltd and The Calcutta Stock Association Ltd respectively.
The Securities and Exchange Board of India (SEBI) on September 2 2015 issued SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 with the aim toconsolidate and streamline the provisions of the Listing Agreement for different segmentsof capital markets to ensure better enforceability. The said regulations were effective1st December 2015. Accordingly all listed entities were required to enter into theListing Agreement within six months from the effective date. The Company entered intoListing Agreement with BSE Limited during February 2016.
We seek to promote and follow the highest level of ethical standards in all ourbusiness transactions guided by our value system. The SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 mandated the formulation of certain policiesfor all listed companies. The policies are reviewed periodically by the Board and updatedbased on need and new compliance requirement.
i) Whistleblower Policy (Policy on vigil mechanism)
The Company has adopted the whistleblower mechanism for directors and employees toreport concerns about unethical behavior actual or suspected fraud or violation of theCompany's code of conduct and ethics. There has been no change to the Whistleblower Policyadopted by the Company during fiscal 2016.
ii) Policy for Determining Materiality for Disclosures
This policy applies to disclosures of material events affecting Kabsons. This policy isin addition to the Company's corporate policy statement on investor relations which dealswith the dissemination of unpublished price- sensitive information.
iii) Policy on Document Retention
The policy deals with the retention and preservation of corporate records of theCompany.
Share transfer agency
The Company has appointed M/s XL Softech Systems Ltd #3 Sagar Society Road No.2Banjarahills Hyderabad - 500034 as its share transfer agency for handling both physicaland electronic transfers.
Code of conduct
The Company has adopted Code of Conduct for the Board and for the Senior levelemployees of the Company and they are complying with the said code. A declaration by theExecutive Director to this effect is furnished in Annexure - VIII to the Board's Report.
Awards and recognition
The Company has not received any award during the Financial Year.
The Directors wish to place on record their gratitude to shareholders and thank thecustomers vendors franchisees bankers Department of Explosives and their OfficialsCentral Excise Pollution Control Boards and Commercial Tax Departments of respectiveStates host of other State and Central Government Departments Security Exchange Board ofIndia and Stock Exchanges at Mumbai Ahmedabad and Kolkata and others for their continuedsupport to the Company's growth. The Directors also wish to place on record theirappreciation for the contribution made by the employees at all levels for theirsincerity hard work solidarity and dedicated support to the Company.
| ||By Order of the Board |
| ||For Kabsons Industries Limited |
| ||Sd/- |
|Place : Hyderabad ||Rajiv Kabra |
|Date : 28-07-2016 ||Executive Director |
ANNEXURE TO DIRECTORS REPORT ANNEXURE- I
Disclosure of Particulars of Contracts / Arrangements entered into by the Company
Form No. AOC-2
(Pursuant to section 134(3)(h) of the Companies Act 2013 and Rule 8(2) of the Companies(Accounts) Rules 2014)
Disclosure of particulars of contracts/arrangements entered into by the Company withrelated parties as referred to in sub-section (1) of section 188 of the Companies Act2013:
1. There are no contracts / arrangements entered into by the Company with relatedparties which are not at arms length basis.
2. There are no material contracts / arrangements entered into by the Company withrelated parties which are not at arms length basis.
3. There were no materially pecuniary relationships or transactions of thenon-executive directors vis-avis the Company.
4. Details of non-material contracts/arrangements entered into by the Company withrelated parties are as under.
|Sl. No. ||Name of the related party and nature of relationship ||Nature of contracts/ arrangements ||Duration of contracts / arrangements ||Salient terms of contracts or arrangements including the value; if any ||Date of approval by the Board ||Justification for entering into contract/ arrangements |
|1. ||Ideal Engineers Hyderabad Pvt. Limited Hyd. Directors of above Company are relatives of Executive Director ||Availing of Services: LPG Bottling & Storage ||3 years w.e.f. 01.04.2014 ||Re 1/- per kg. for bottled LPG into Cylinders and Annual Fixed Charges Rs. 50000/- plus Service Tax ||14.08.2014 ||Company doesn't have any Bottling plant at Hyd. Hence the contract is entered into at arms length Contract at prevailing market rates |
ANNEXURE - II
NOMINATION AND REMUNERATION POLICY
The Company's policy on the appointment and remuneration of Directors and keymanagerial personnel provides a framework for payment of suitable remuneration to theDirectors Key Managerial Personnel (KMP) and senior level employees of the Company and toharmonize the aspirations of human resources consistent with the goals of the Company.
The nomination and remuneration policy provided herewith is in line with therequirements of Section 178(4) of the Companies Act read with rules made there under andClause 49(1V)(B)(4) of the Listing Agreement entered into with the Stock Exchanges.
Objective and purpose of the policy The objectives and purpose of this policy are
To formulate the criteria for determining qualifications positive attributesand independence of a Director.
To formulate remuneration principles for the Directors key managerial personneland other senior level employees of the Company.
The Board has constituted the nomination and remuneration committee of the Board onAugust 14 2014. This is in line with the requirements of Companies Act 2013 (theAct') and the listing agreement entered in to with Stock Exchanges.
The Board has authority to reconstitute this committee from time to time.
Policy in respect of appointment of Directors their remuneration etc
Criteria for qualification positive attributes of independence of Directors:
1. The total composition of the Board should consist of a mix of expertise andexperience in the following fields:
Finance & Accounts.
Technology Research and Development.
Corporate & Business Laws.
Public Relations and Corporate Communications.
HRD and Leadership.
Other disciplines related to the Company's business.
2. The type of persons to be identified for appointments as Directors would depend onthe skill-sets already available in the existing Board. The effort would always be toensure that the overall expertise and skill-sets available at the Board level is as broadbased as possible.
3. The following additional factors shall also be taken into account while recommendingindividuals for appointment as independent directors.
The other directorships held by the proposed appointee the ability for devotingadequate time and the willingness of the proposed appointee to participate in the Boardand Committee meetings.
The composite age profile of the Board of Directors as a whole. The effort willbe to strike an appropriate balance of youth and experience.
Present and potential conflict of interest of the proposed appointee in thevarious issues that may be coming up before the Board.
Personal characteristics being in line with the Company's values such asintegrity honesty and transparency.
The Policy relating to appointment of executive directors is to
Provide adequate opportunity for career advancement of the executives alreadyworking in the company; Simultaneously attract talent from outside for direct recruitmentas Executive Directors at the Board level.
The Remuneration Policy of the Company is to design the compensation packages which aresufficient to attract retain and motivate the person to put in his best performance andfeel that the compensation paid to him is commensurate with his talent experience andexpertise.
Due care will be taken to ensure a remuneration package which is comparable to the payand employment conditions with peers within the organization as well as the contemporarylevels of compensation in the industry.
Increments and career advancement will be directly linked to the performance of theparticular individual. Measurable performance indicators shall be designed and intimatedto the employees to ensure objectivity and transparency in the performance evaluation.
Remuneration of Executive Directors and Key Managerial Personnel
The Nomination and Remuneration Committee shall consider the following criteria whilefixing the remuneration of the Executive Director (Whole-time Directors) Key ManagerialPersonnel and other employees:
Industry Bench Marks.
Performance of the Company compared to the performance of the industry.
Performance of the individual and his track record.
Initiatives taken and leadership qualities exhibited.
Remuneration of Non-executive Directors
Non executive Directors will be paid a Sitting Fee as may be decided by the Boardwithin the ceilings prescribed under the Act.
Policy relating to Remuneration of Directors etc
The Remuneration Policy of the Company for the Directors key managerial personal andother employees is to design the compensation packages which are sufficient to attractretain and motivate the person to put in his best performance and feel that thecompensation paid to him in commensurate with his talent experience and expertise.
However your Executive Director Mr.Rajiv Kabra is not drawing any salary.