Kanel Industries Ltd.
|BSE: 500236||Sector: Industrials|
|NSE: KANELOIL||ISIN Code: INE252C01015|
|BSE LIVE 14:42 | 22 May||Stock Is Not Traded.|
|NSE 05:30 | 01 Jan||Stock Is Not Traded.|
|BSE: 500236||Sector: Industrials|
|NSE: KANELOIL||ISIN Code: INE252C01015|
|BSE LIVE 14:42 | 22 May||Stock Is Not Traded.|
|NSE 05:30 | 01 Jan||Stock Is Not Traded.|
Your Directors are pleased to submit herewith their report together with the auditedstatement of accounts for the 23rd financial year ended 31st March 2015.
[Amount in Rs.]
SHARE CAPITAL STRUCTURE :
During the year under review there were no changes in the Authorized IssuedSubscribed and Paid up Share Capital Structure of the Company.
As our company incurred heavy losses during the year under review and due to theaccumulated losses our directors regret for their inability to declare dividend to themembers.
TRANSFER OF UNPAID / UNCLAIMED DIVIDEND :
Your company's all the 4 previous years i.e. dividends declared in year 1995 19961997 and 1998 are due for transfer thereof to investors' education and protection fund asper the provision of the section 205c of the companies act 1956. However due to hugeaccumulated losses since the company could not meet its liabilities towards its bankers intime the bankers are not co operating and so company will make representation of thisfact to Registrar of the companies Securities and exchange board of India. At the highestauthorities of bankers Reserve bank of India. In this situation the audit of theunclaimed unpaid dividend accounts could not be conducted and completed.
The company had received more than 2000 investor complaints for nonpayment of dividendor not revalidation of the dividend warrants of the investors. However due to non cooperation of the bankers the company could not resolve such complaints. Even thecompany's efforts to surrender of the original dividend warrants and in lieu of suchdividend warrants requests for issue of demand draft in favor of investor concerned arenot accepted by the bankers. In view of the above stated reasons the company could notmake compliance with the provision of section 205c of the companies act 1956.Companyhowever has almost solved most of the complaints related to non receipt of dividendwarrants.
BUY BACK OF EQUITY SHARES :
The Company had not made any Buy Back of it's paid up equity shares during the year2014-15. Hence no specific disclosure is required to be made in this report.
YEAR UNDER REVIEW :
During the year under review the Company has made net loss of Rs. 2417777/- (PreviousYear's loss of Rs. 2181552/ -) from business. The Company has earned total income Rs226911605.00 (Previous year's income was 86506206.00) and the Total expense is Rs.229329382.00 (Previous year's expense is Rs. 88687758.00)
DETAILS OF LOANS GUARANTEES AND INVESTMENTS U/S 186 OF THE COMPANIES ACT 2013 :
During the year under review the Company has not made any inter corporate loansinvestments given any corporate guarantee to any other body corporate subsidiaryassociate or any other company. However the Company had in earlier years provided Longterm Loans and Advances of Rs. 2817428. The Company has taken Secured Loan from AdaniEnterprise Limited. The same is not yet registered with the ROC.
During the year under review your company has neither invited nor accepted any publicdeposit as defined under Section 73 to 76 of the Companies Act 2013.
DEMATERIALISATION OF SECURITIES :
Your Company's Equity shares are admitted in the System of Dematerialization by boththe Depositories namely NSDL and CDSL. The Company has signed tripartite Agreement throughRegistrar and Share Transfer Agent System Support Service. The Investors are advised totake advantage of timely dematerialization of their securities. The ISIN allotted to yourCompany is INE 248C01013.Total Share dematerialized up to 31st March 2015 were 12218176which constitute 66.36% of total capital. Your Directors request all the shareholders todematerialize their shareholding in the company as early as possible.
COMPLIANCE WITH THE STOCK EXCHANGE LISTING AGREEMENT :
The company is regular in making timely compliance of all the applicable clauses of theListing Agreement from time to time whether it is event based compliance or time boundcompliance of monthly quarterly half yearly or yearly compliances. Your Company hasalready paid Annual Listing fees of the Bombay stock exchange Limited for and up to thefinancial year 2015-16. The same is pending for Ahmedabad Stock Exchange. The Trading inequity shares of the Company is active on the Bombay Stock Exchange Limited and the sameis not suspended for penal reasons by BSE during the year. The Trading platform of theAhmedabad Stock Exchange Limited Jaipur Stock Exchange Limited and Culcutta StockExchange Limited has been suspended/ cancelled by SEBI hence no trading is recorded. Thehighest lowest average prices recorded on the Bombay Stock Exchange on every month ofthe financial year 2014-15 including the volume in shares traded is separately given inother information para of Corporate Governance report attached here to. During the yearyour company has neither issued any shares or stock options or ESOPs or other employeebenefits.
MANAGEMENT'S DISCUSSION AND ANALYSIS :
Management's discussion and perceptions on existing business future outlook of theindustry future expansion and diversification plans of the Company and future course ofaction for the development of the Company are fully explained in a separate para inCorporate Governance Report.
Mr. Vinodchandra K. Pandya shall retire by rotation at the ensuing Annual GeneralMeeting as per provisions of Law. He eligible for reappointment and have offeredthemselves for directorship of the company. Your directors recommend for theirreappointment.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet with the criteria of independence as prescribed both undersub-section (6) of Section 149 of the Companies Act 2013 and under Clause 49 of theListing Agreement with the Stock Exchanges. Members are requested to refer to the Noticeof the Annual General Meeting and the Explanatory Statement for details of thequalifications and experience of the Directors and the period of their appointment. TheBoard recommends the passing of the Resolutions at Item Nos. 5 to 9 of the Annual GeneralMeeting Notice.
MANAGING DIRECTOR :
Mr. Dhiren K Thakkar is the Managing Director of the Company. Because of the Company'sbad financial position as well as it is a loss making one he is not taking any managerialRemuneration.
FORMATION OF AUDIT COMMITTEE IN COMPLIANCE TO SECTION 177 OF THE COMPANIES ACT 2013AND CLAUSE 49 OF THE LISTING AGREEMENT ON CORPORATE GOVERNANCE :
In Compliance with the provisions of Section 177 of the Companies Act 2013 your companyhas formed an Audit Committee within the Organization consisting of 3 independentdirectors. An Internal Auditors have been appointed as Advisors in their professionalcapacity on this committee. The area of operations and functional responsibilities
assigned to the committee are as per the guidelines provided in Clause 49 of theListing Agreement for implementation of code of corporate governance. The Committee meetsat least once in a quarter and gives its report of each meeting to the Board for itsapproval record and information purposes. The detail of powers responsibilities andsystem of functioning of this committee is given in report on Corporate Governance formingpart of this report.
STATUTORY INFORMATION :
The Information required to be disclosed in the report of the Board of Directors as perthe provisions of Section 134 of the Companies Act 2013 and the Companies Rules regardingthe conservation of energy technology absorption foreign exchange earnings and outgo isnot applicable to the Company. As Company is not manufacturing any product or providingany services.
MATERIAL CHANGES :
Except the information given in this report no material changes have taken place aftercompletion of the financial year up to the date of this report which may have substantialeffect on business and finances of the company.
There are no employees of the company who were in receipt of the remuneration ofRs.6000000/- annually in the Aggregate if employed for the year and in receipt of theMonthly remuneration of Rs. 500000/- in the aggregate if employed for a part of the yearunder review. Hence the information required under being not applicable and hence notgiven in this report.
DISCLOUSER AS PER COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL)RULE 2014 :
i) The ratio of the remuneration of each director to the median remuneration of theemployees of the company for the financial year :
ii) The percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year :
No remuneration is increased during the year for any of the Key Managerial PersonnelCFO CEO CS or Manager.
iii) The percentage increase in the median remuneration of employees in the financialyear :
During the year there was increase of Rs. 8500/- (03.75%) in remuneration of anyemployees during the financial year.
iv) The number of permanent employees on the rolls of company; 1 (One)*
*-However there are several other employees who are contractual and not permanent.
v) The explanation on the relationship between average increase in remuneration andcompany performance :
There is increase of 3.75% in the average Remuneration of the employees whereasCompany is still a loss making one. So there is no any direct relationship between theaverage increase in remuneration and company's performance.
vi) Comparison of the remuneration of the Key managerial personnel against theperformance of the company;
The KMP i.e. Managing Director is not paid any managerial Remuneration. Hence hisremuneration is not comparable inter company intra company or inter industry as a whole.
vii) Variations in the market capitalization of the company price earnings ratio as atthe closing date of the current financial year and previous financial year and percentageincrease over decrease in the market quotations of the shares of the company in comparisonto the rate at which the company came out with the last public offer in case of listedcompanies and in case of unlisted companies the variations in the net worth of thecompany as at the close of the current financial year and previous financial year;
viii) Average percentile increase made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration;
NOT APPLICABLE as there is increase of 03.75% in Remuneration of any employees of thecompany. But the Managerial Personnel of the Company are not paid any ManagerialRemuneration.
ix) Comparison of the each remuneration of the key managerial personnel against theperformance of the company; Not Comparable.
x) The key parameters for any variable component of remuneration availed by thedirectors; NOT APPLICABLE.
xi) The ratio of the remuneration of the highest paid director to the of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year; and No employee is receiving remuneration in excess or higher than theremuneration of Director or Key Managerial Personnel.
xii) Affirmation that the remuneration is as per the remuneration policy of thecompany.
All remuneration of the Employees and directors are decided by Nomination &Remuneration Committee and by the Board of Directors within the organization.
DIRECTORS' RESPONSIBILITY STATEMENT :
Pursuant to the provision contained in Section 134(5) of the Companies Act 2013(Corresponding Section 217(2AA) of the Companies Act 1956) the Directors of your Companyconfirm:
A. That in the preparation of the annual accounts as far as possible and except theAccounting Standards which are mentioned by the Auditors in their Report and the Notes tothe Accounts separately the applicable accounting standards has been followed and nomaterial departure has been made from the same;
B. That they have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affair of the Company at the end of the financial year and of theprofit or loss of the Company for that period;
C. That they have 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 for preventing and detecting fraud and other irregularities;
D. That they have prepared the annual accounts on a going concern basis.
E. The Directors in the case of Listed Company had laid down internal financialcontrols to be followed by the company and that such internal financial controls areadequate and were operative effectively.
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.
DECLARATION AS TO INDEPENDENT DIRECTORS : (Pursuant to Provisions of section 149(6) OFthe Companies
All the Independent Directors of the Company do hereby declare that:
(1) All the Independent Directors of the Company are neither Managing Director nor aWhole Time Director nor a Manager or a Nominee Director.
(2) All the Independent Directors in the opinion of the Board are persons of integrityand possesses relevant expertise and experience.
(3) Who are or were not a Promoter of the Company or its Holding or subsidiary orassociate company.
(4) Who are or were not related to promoters or directors in the company its holdingsubsidiary or associate company.
(5) Who has or had no pecuniary relationship with the company its holding subsidiaryor associate company or their promoters or directors during the two immediately precedingfinancial years or during the current financial year.
(6) None of whose relatives has or had pecuniary relationship or transaction with thecompany its holding subsidiary or associate company or their promoters or directorsamounting to two per cent or more of its gross turnover or total income or fifty lacsrupees or such higher amount as may be prescribed whichever is lower during the twoimmediately preceding financial years or during the current financial year
(7) Who neither himself nor any of his relatives
(a) Holds or has held the position of a key managerial personnel or is or has beenemployee of the company or its holding subsidiary or associate company in any of threefinancial years immediately preceding the financial year in which i\he is proposed to beappointed.
(b) Is or has been an employee or proprietor or a partner in any of the threefinancial years immediately preceding the financial years in which he is proposed to beappointed of
(i) A firm of auditors or company secretaries in practice or cost auditors of thecompany or its holding subsidiary or associate company; OR
(ii) Any legal or a consulting firm that has or had any transaction with the companyits holding subsidiary or associate company amounting to ten per cent or more of thegross turnover of such firm;
(iii) Holds together with his relatives two per cent or more of the total voting powerof the company; OR
(iv) Is a Chief Executive or director by whatever name called or any non-profitorganization that receives twenty five per cent or more of its receipts from the Companyany of its promoters directors or its holding subsidiary or associate company or thatholds two per cent or more of the total voting power of the company; OR
(v) Who possesses such other qualifications as may be prescribed.
DECLARATION BY BOARD AS PER REQUIREMENT OF SECTION 178 :
In compliance with Section 178 (1) as also in compliance with Clause 49 of the ListingAgreement the Board of Directors does hereby declare that:
a. The Company has proper constitution of the Board of Directors including independentdirectors in proportion as per requirement of clause 49 of the Listing Agreement. Howeverthe Company is still in process for appointing a suitable person as woman director asrequired under Section 149 of the Companies Act 2013 as well as the CEO and CompanySecretary in Job.
b. The Company has constituted Nomination and Remuneration Committee StakeholdersRelationship Committee Audit Committee as per requirements of the Clause 49 of theListing Agreement and provisions of the Companies Act 2013.
c. The Company has the policy for selection and appointment of independent directorswho are persons of reputation in the society have adequate educational qualificationsufficient business experience and have integrity & loyalty towards their duties.
d. The Company does not pay any managerial remuneration to its Managing Directors andDirectors because of Company's weak financial position.
e. The Independent Directors are not paid any sitting fee for attending Board and othercommittee meetings as decided by the Board from time to time.
f. The Company is not paying any commission on net profits to any directors.
STATUTORY AUDITORS :
Shah Dinesh Dahyalal & Associates Present Statutory Auditors of the company havegiven their letter of consent and confirmation under section 139 the Companies Act 2013for reappointment as Statutory Auditors of the Company.
The Board has now proposed to appoint the Statutory Auditors for a period of 1 year asper requirements of section 139 (1) of the Companies Act 2013 read with Companies (Auditand Auditors) Rules 2014. Necessary Resolution for their appointment as the StatutoryAuditors and fixing their remuneration is proposed to be passed at the Annual GeneralMeeting.
Internal Auditors :
The company is in process of appointing an independent Chartered Accountant to act asan Internal Auditor as per suggestion of auditors in order to strengthen the internalcontrol system for the Company.
SECREATARIAL AUDITOR :
The Company has appointed M/s. KAMLESH SHAH & SHAH CO. as the secretarial auditorfor the financial year 2014-15. They have given their report in the prescribed form MR-3which is annexed to this report as an ANNEXURE.
OBSERVATION OF THE SECRETARIAL AUDITOR :
The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non- Executives Directors and Independent Directors except the womandirector. The Company has still not appointed CFO and a Whole-time Company Secretary. Thecompany is in process of finding of suitable woman director CFO and Wholetime CompanySecretary in Job looking at the financial status of the Company.
AUDITORS OBSERVATION :
The notes to the accounts of the company are self explanatory. However andclarification from the board of directors on the specific observation made by the Auditorsin their report are as under
1) NON CLARIFICATION ON LOAN FROM ADANI ENTERPRISES LIMITED :
The Company has taken secured/mortgage loan from Adani Enterprises Limited of Rs. 5Crore in earlier year. However the Charge has not registered with the ROC.
2) NON FILLING OF INCOME TAX RETURN FROM F.Y. 2008-09 ONWARDS :
The Companies accounts are not yet Tax Audited. Thus the Company has not filled theIncome Tax Return of the Company. The Company will as soon as possible get its AccountsTax Audited and fill Income Tax Return.
3) NON DEDUCTION OF TDS :
The Company has huge accumulated losses and expenses. Due to bad financial position aswell as being sick unit the Company does not have sufficient funds for the TDS deduction.Now the Company started earning from the Naroda unit. So now Company is in the process ofgrowing up. Now all the provisions will be followed by the Company.
4) BANK STATEMENT OF NO LIEN ACCOUNT :
Company had deposited Rs. 89.30 lacs as per BIFR directive in the No Lien A/C with the4 consortium Banks. This amount was meant for rehabilitation of the Company. However inspite of the numerous communications by auditors of the Company with the Banks forproviding stake of money deposited along with statements the Banks have not responded. Inabsence of the response from bank the Company has been helpless and unable to reconcilethese no lien accounts.
5) OPERATIONS OF NARODA PLANT :
The Company has just restarted its Naroda Unit. The majority of Financial and Operatingindicators are negative because the Company has just restarted the Naroda unit. TheCompany is working hard for making it profitable. Because of huge accumulated losses withthe passing of some years Company will start making profits.
6) NON COMPLIANCE OF THE ACCOUNTING STANDARD 28 :
The physical verification was not done by the Auditor at the Naroda unit. The Machineryat Naroda Unit is still operative for the Manufacturing process. The Company used the samefor the Manufacturing so that Company doesn't have to bear the high cost of Machinery.
7) NON COMPLIANCE WITH THE ACCOUNTING STANDARD FOR TAXATION AS 22 :
As per Accounting Standard 22 the company is required to create Deferred Tax Liability/ Assets each year. However the management is of the opinion that due to huge accumulatedlosses and until the formal plan for revival / rehabilitation is sanctioned it is notconsidered prudent polity to create Deferred Tax liabilities / Assets.
8) TRANSFER OF UNPAID / UNCLAIMED DIVIDEND TO INVESTORS' EDUCATION AND PROTECTIONFUNDS:
This has been fully explained separately in this report elsewhere under relevant Para.
9) NON PROVISION OF SALES TAX LIABILITIES :
The company has made a review application for assessment order under the Sales Tax act.The company is hopeful of remedial favorable assessment orders. Once the liabilities arecrystallized it will make necessary arrangement for its payment and make necessaryprovision in the books of account.
Your Directors take this opportunity to acknowledge the trust reposed in your companyby its Shareholders Bankers and clients. Your Directors also keenly appreciate thededication & commitment of all our employees without which the continuing progress ofthe company would not have been possible.