Your Directors are pleased to present the Twenty-Ninth Annual Report on the businessand operation of the Company together with the Audited Financial Statements for the yearended 31st March 2016.
|FINANCIAL HIGHLIGHTS || ||(Rs. in Lakh) |
|Particulars ||Financial Year 2015-16 ||Financial Year 2014-15 |
|Turnover ||30058.05 ||25966.75 |
|Other Income ||4.02 ||2.20 |
|Profit before tax ||320.20 ||356.26 |
|Less: Provision for current tax ||(164.78) ||(107.59) |
|Less: Net deferred tax liability / (asset) ||(34.72) ||31.44 |
|Profit for the year ||190.14 ||217.23 |
|Add: Balance brought forward ||1091.04 ||1016.16 |
|Profit available for appropriation ||1281.18 ||1193.34 |
|Appropriation: || || |
|Transferred to General Reserve ||9.51 ||10.86 |
|Proposed dividend ||81.60 ||75.97 |
|Tax on proposed dividend ||16.61 ||15.47 |
|Balance carried forward ||1173.46 ||1091.04 |
During the year under review the Company has achieved a turnover of Rs. 30058.05 lakhas compared to Rs. 25966.75 lakh in the previous year. Accordingly there was a toplinegrowth of 15.90%. The Profit after tax for the financial year 2015-16 was Rs. 190.14 lakhas compared to Rs. 217.23 lakh during the previous year. There was decline in the Profitafter tax due to higher cost of production comprising of increased cost of labour costjob charges material cost and power tariffs.
The Company has been working on various measures to reduce cost and increase theefficiency.
The Company is identifying its core strength of weaving manufacturing "value formoney" fabrics/garments and marketing same through its distribution network as wellas organized retail market. Further the Company is also concentrating on brandmanufacturing contract which gives lesser margin but at the same time releases marketingpressure. The Company continues to innovate and improve upon its production process toincrease its operational efficiency at optimum cost.
The Management is expecting these initiatives to result in better profitability incoming years.
ISSUE OF SECURITIES
During the year under review the Company has issued and allotted 375000Equity shares of Rs. 10/- each at a premium of Rs. 52/- per share aggregating Rs. 232.50lakh and 429505 Compulsorily Convertible Debentures ("CCDs") of Rs. 10/- eachat a premium of Rs. 52/- per CCD aggregating Rs. 266.29 lakh convertible on 01st April2016. Through these preferential issues of securities the Company has raised Rs. 498.79lakh in aggregate from non-promoter group.
During the year paid up Equity share capital of the Company has been increased fromRs. 506.49 lakh to Rs. 543.89 lakh consequent to issue of 375000 new shares onpreferential basis.
On 01st April 2016 paid up Equity share capital of the Company further increased toRs. 586.93 lakh on conversion of 429505 CCDs.
Your Directors are pleased to recommend a dividend of Rs. 1.50/- (i.e. 15%) per equityshare on the equity capital of the Company for the year under review.
The said dividend shall be subject to the approval of the members at the ensuing annualgeneral meeting.
The Company has not accepted any deposit from the public during the financial yearunder review
During the year under review the Company has transferred Rs. 9.51 lakh to generalreserves.
CORPORATE GOVERNANCE REPORT
As per Regulation 34(3) read with Schedule V of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a separate report on Corporate Governance isenclosed as a part of this Annual Report.certificatefrom Auditors of your Companyregarding compliance of conditions of Corporate Governance as stipulated in Regulation17(7) read with Part A of Schedule II of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is also enclosed along with the Corporate GovernanceReport.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis is presented as a separate section forming part ofthis Annual Report.
The process of Familiarisation program for Independent Directors is posted on websiteof the Company at the link http://kflindia.com/wp-content/uploads/2015/08/KFL-ID-Familiarization.pdf.
Accordingly the Company provides as part of Board Meeting insight on various businessprocesst hrough specific discussion on business review. As part of familiriasation programthe Company has spent about two hours during the year in various Board Meetings onbusiness review and update.
Policy on dealing with related party transactions is available on the website of theCompany at the link http://kflindia.com/wp-content/uploads/2015/08/KFL-RPT-Policy.pdf
The Company has formulated and disseminated a Whistle Blower Policy to provide vigilmechanism for employees and Directors of the Company to report genuine concerns that couldhave serious impact on the operations and performance of the business of the Company. ThisPolicy is in compliance with the provisions of Section 177(9) of the Companies Act 2013and Regulation 4(d)(iv) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. Establishment of Vigil Mechanism is available on the website of theCompany at the link http://kflindia.com/wp-content/uploads/2015/08/KFL-Vigil-Mechanism.pdf
NUMBER OF BOARD MEETINGS
The Board of Directors met 5 (Five) times during the financial year 2015-16. Thedetails of Board meetings and the attendance of the Directors are provided in theCorporate Governance Report which forms part of this Annual Report.
DECLARATION BY INDEPENDENT DIRECTORS:
The Company has received necessary declarations from all the Independent Directorsunder Section 149(7) of the Act stating that they meet the criteria of independence laiddown in Section 149(6) of the Companies Act 2013.
PERFORMANCE EVALUATION OF BOARD
Pursuant to the provisions of the Companies Act 2013 and Regulation 17(10) andRegulation 25(4) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Board has carried out an annual evaluation of performance of itsown the Committees thereof and the Directors individually. At the meeting of the Boardall the relevant factors that are material for evaluating the performance of theCommittees and of the Board were discussed in detail.
A separate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board who were evaluated on parameters such as level ofengagement and contribution independence of judgment safeguarding the interest of theCompany and its minority shareholders etc. The performance evaluation of the IndependentDirectors was carried out by the entire Board except the Independent Director beingevaluated.
The performance evaluation of the Chairman and Non-Independent Directors was carriedout by the Independent Directors.
POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
The Companys policy on Directors appointment and remuneration and othermatters provided in Section 178(3) of the Companies Act 2013 has been disclosed in theCorporate Governance Report which forms part of the Annual Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In terms of Section 152 of the Companies Act 2013 Mr. Lalit Genka retires by rotationat the ensuing Annual General Meeting and being eligible offers himself forre-appointment.
Mr. Siddhant Singh was appointed as Company Secretary with effect from 01st September2015.
Additional information on appointment/reappointment of Directors as required underRegulation 36 of SEBI (Listing Obligations and Disclosure Requirements)
Regulations 2015 is given in the Notice convening the ensuing Annual General Meeting.
COMMITTEES OF THE BOARD OF DIRECTORS
During the year review the Audit Committee of the Company comprised of threeIndependent Directors viz. Mr. Sanjeev Maheshwari Mr. Rahul Mehta and Ms. Bindu Shah.Mr. Sanjeev Maheshwari is the Chairman of the Audit Committee. There are no instanceswhere the Board did not accept the recommendations of the Audit Committee. The terms ofreference powers and roles of the Committee are disclosed in the Corporate GovernanceReport which forms part of the Annual Report.
Details of all the Committees of the Board of the Company along with their terms ofreference composition and meetings held during the year are provided in the CorporateGovernance Report which forms part of this Annual Report.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirements of Section 134(5) of the Companies Act 2013 with respectto Directors Responsibility Statement it is hereby confirmed that:
i. in the preparation of the annual accounts for the financial year ended 31st March2016 the applicable accounting standards have been along with proper explanation relatingto material departures if any;
ii. the Directors have 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 as at 31st March 2016 and of the profitof the Company for that period;
iii. the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv. the Directors have prepared the annual accounts for the financial year ended 31stMarch 2016 on a going concern basis;
v. the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are were operating effectively;
vi. the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
AUDITORS AND AUDITORS REPORT
At the Annual General Meeting of the Company held on 26th September 2014 M/sHaribhakti & Co. LLP Chartered Accountants Mumbai was appointed as statutoryauditors of the Company to hold office till the conclusion of the 32nd Annual GeneralMeeting. In terms of the first proviso to Section 139 of the Companies Act 2013 theappointment of the auditors shall be placed for ratification at every Annual GeneralMeeting.
Accordingly the appointment of M/s. Haribhakti & Co. LLP Chartered AccountantsMumbai as statutory auditors of the Company placed before for ratification by theshareholders.
The Auditors Report does not contain any disqualification reservation or adversemark.
The Company has appointed M/s. H. S. Associates Company Secretaries to conductSecretarial Audit of the Company for the financial year 2015-16 in terms of provisions ofSection 204 of the Companies Act 2013. The Secretarial Auditor Report for the year ended31st March 2016 is annexed to this report as Annexure A. There is no observationor comment which requires your attention.
As per the requirement of Central Government pursuant to Section 148 of the CompaniesAct 2013 read with the Companies (Cost Records and Audit)
Rules 2014 as amended from time to time your Company has been carrying out Cost Auditof cost records relating to Textile products every year. The Board of Directors on therecommendation of Audit Committee has appointed Ms. Ketki D. Visariya Cost Accountantas Cost Auditor to audit the accounts of the Company for the financial year 2016-17 at aremuneration ofRs. 90000/- plus service tax as applicable and reimbursement of out ofpocket expenses. As required under the Companies Act 2013 a resolution seekingratification of members part of the Notice convening the Annual General Meeting.
The Cost Audit report for the financial year 2014-15 was filed with the Ministry ofCorporate Affairs.
EXTRACT OF ANNUAL RETURN
In terms of provisions of Section 92 (3) of the Companies Act 2013 an extract ofAnnual Return in prescribed format is annexed to this Report as
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the year under review all transactions entered into by the Company with relatedparties as defined under the Companies Act 2013 and Regulation 23 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 were in the ordinary course ofbusiness and on an arms length basis.
There were no materially significant transactions with the related parties during thefinancial year which were in conflict withthe interest of the Company. Disclosure oftransactions with related parties as required under the Accounting Standard (AS-18) hasbeen made in the notes forming part of the financial statements. Accordingly thedisclosure of related party transactions as required under Section 134(3)(h) of theCompanies Act 2013 in Form AOC-2 is not applicable to your Company.
PARTICULARS OF LOANS GRANTED GUARANTEE PROVIDED AND INVESTMENTS MADE PURSUANT TO THEPROVISIONS OF SECTION 186 OF THE COMPANIES ACT 2013
The Company has not granted any loans not provided any Guarantee and not made anyInvestments which are covered under the provision of Section 186 of the Companies Act2013.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGOAND EXPORT INITIATIVE
Information pursuant to Section 134(3)(m) of the Companies Act 2013 read with Rule8(3) of Companies (Accounts) Rules 2014 is given as Annexure C.
The Company being focusing in Indian market it has not taken any export initiative.
PARTICULARS OF EMPLOYEES
In terms of provisions of Companies Act 2013 and disclosure as required under Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014framed there under the names and other particulars of employees are provided under AnnexureD which is annexed to this Report.
Addition to the above a statement containing the particulars as required under Rule5(2) and (3) of the Companies (Appointment and Remuneration of managerial Personnel)Rules 2014 is given as Annexure E.
RISK MANAGEMENT POLICY AND INTERNAL ADEQUACY
The Company has in place a mechanism to identify assess monitor and mitigate variousrisks to key business objectives. Major risks identifiedby the businesses and functionsare systematically addressed through mitigating actions on a continuing basis. TheCompanys internal control systems are commensurate with the nature of its businessand the size and complexity of its operations. These are routinely tested Statutory aswell as Internal Auditors. Significant audit observations and follow up actions thereonare reported to the Audit Committee.
The Board has adopted policies and procedures for ensuring the orderly and efficientconduct of the business including adherence to the Companys policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial disclosures.
The Audit Committee of the Board of Directors actively review the adequacy andeffectiveness of the internal control systems and suggests improvements to strengthen thesame. The Company has a robust Management Information System which is an integral part ofthe control mechanism.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
Your Company has always believed in providing a safe and harassment free workplace forevery individual working in Companys premises through various interventions andpractices. The Company always endeavours to create and provide an environment that is freefrom discrimination and harassment including sexual harassment.
During the year under review there were no cases filed pursuant to the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
The Board wishes to place on record their sincere appreciation to all the bankerscustomers employees at all levels and stakeholders for the continued support andpatronage during the year under review.
| ||By Order of the Board |
| ||For Kamadgiri Fashion Limited |
|Place: Mumbai ||Pradip Kumar Goenka |
|Date: 30th May 2016 ||Chairman & Managing Director |