Kavita Fabrics Limited
The Directors are pleased to present the 11th Annual Report on the businessand operations of the Company and the accounts for the Financial Year ended March 312016.
1. FINANCIAL SUMMARY OR HIGHLIGHTS / PERFORMANCE OF THE COMPANY:
|Particulars ||Current Year Ending March 2016 ||Previous Year Ending March 2015 |
| ||Rs. ||Rs. |
|Total Income ||85579532 ||111219164 |
|Less: Expenditure ||82773645 ||107613159 |
|Profit/(Loss) before Interest Depreciation & Tax ||2805887 ||3606005 |
|Less : Interest ||472024 ||938244 |
|Depreciation ||1153561 ||1374121 |
|Profit/(Loss) before Tax ||1180302 ||1293640 |
|Profit/(Loss) after Tax ||901286 ||971103 |
2. BRIEF DESCRIPTION OF THE COMPANY'S OPERATIONS DURING THE YEAR / STATE OF COMPANY'SAFFAIR
During the current period your Company has shown a decrease in revenue to the extentof 23.05% from Rs. 11.12 Crores during FY 2014-15 to Rs.8.56 Crores during FY 2015-16. PAThas shown a decrease of 7 % from Rs. 9.71 Lakhs during FY 2014-15 to Rs. 9.01 Lakhs duringFY 2015-16.
3. FINANCIAL YEAR
This report of Directors along with its Annexure Management Discussion and AnalysisCorporate Governance Report Financial Statements along with their Notes are prepared forthe period April 01 2015 to March 31 2016 (a period of 12 months). Pursuant to theprovisions of Section 2(41) of the Companies Act 2013 a financial year' inrelation to the Company means the period ending on the 31st day of March every year inrespect whereof financial statement of the Company is made. Your Company is in compliancewith the provisions of the Companies Act 2013.
4. DIVIDENDS AND RESERVES
The Company has decided to sustain the growth in line with the long term growthobjectives of the Company by retaining the profits and utilizing the same foropportunities in hand.
5. SHARE CAPITAL
During the period April 01 2015 to March 31 2016 during the year under review theCompany has not issued shares with differential voting rights nor has granted any stockoptions or sweat equity and there is no change in the Issued Subscribed and paid up shareCapital of Company. The Share Capital
Audit as per the directives of the Securities and Exchange Board of India (SEBI) isbeing conducted by Practicing Company Secretaries. The paid up Share Capital of theCompany stands at Rs. 104187060/- (Rupees Ten Crores Forty One Lakh Eighty SevenThousand and Sixty Only).
6. DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the Section 152 Companies Act 2013 read withapplicable Rules if any Ms. Sarika Chandak retires by rotation at the ensuing AnnualGeneral Meeting and being eligible offers herself for re-appointment.
Mr. Shailesh Chandak is the Chief Financial Officer of the Company and Mr. HarishChandak is the Managing Director of the Company.
Based on the confirmations received from Directors none of the Directors aredisqualified from appointment under Section 164 of the Companies Act 2013.
7. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the Directors' Responsibility Statement referred to in clause (c) ofsub-section (3) of Section 134(3) (c) of the Companies Act 2013 the Board of Directorsof the Company state that
a) In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation and there are no material departures from thesame;
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 viz.March 31 2016 and of the profit and loss 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; and
e) The Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively 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.
8. PUBLIC DEPOSITS
The Company has neither invited nor accepted any public deposits during the periodunder review.
9. CORPORATE SOCIAL RESPOSIBILITY :
The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as provisions of Section 135 of the Companies Act 2013 are not applicable tothe Company.
10. NUMBER OF MEETINGS OF BOARD OF DIRECTORS:
During the Financial Year 2015-16 the Board of Directors of the Company met on thefollowing dates:
13th April 2016 15th April 2016 10th May 2015 15thMay 2015 2nd July 2015 24th August 2015 31st August2015 11th November 2015 7th December 2015 13 February 2016 31stMarch 2016
Frequency and quorum at these meetings were in conformity with the provisions of theCompanies Act 2013 and the SEBI (Listing Obligations and Disclosure Requirements) 2015entered into by the company with the Stock Exchanges. All the Board members and the seniormanagement personnel have affirmed compliance with the Code of Conduct during the yearended on 31st March 2016.
11. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in the form MGT - 9 asrequired under Section 92 of the Companies Act 2013 is annexed as Annexure I and formsan integral part of this Report.
12. PARTICULAR OF EMPLOYEES AND RELATED DISCLOSURES
Particulars of employees as required u/s 134 of the Companies Act 2013 are not annexedsince there are no employees drawing remuneration of more than Rs. 6000000/- per annumduring the year under review if employed for full year or more than Rs. 500000/- permonth if employed for part of the year.
Further the information required pursuant to Section 197 of the Companies Act 2013(the Act) read with Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 in respect of employees of the Company will be provided uponrequest. In terms of Section 136 of the Act the Report and Accounts are being sent to theMembers and others entitled thereto excluding the information on employees' particularswhich is available for inspection by the Members at the Registered Office of the Companyduring business hours on working days of the Company up to the date of the ensuing AnnualGeneral Meeting. If any Member is interested in obtaining a copy thereof such Member maywrite to the Compliance Officer in this regard.
13. DECLARATION OF INDEPENDENCE BY INDEPENDENT DIRECTORS
All the Independent Non-Executive Directors of the Company viz. Mr. Govindlal SabooMr. Nitin Maheshwari and Mr. Kishan Kumar Sarda have submitted the declaration ofindependence as required pursuant to Section 149 (7) of the Companies Act 2013 statingthat they meet the criteria of independence as laid down under Section 149(6) of theCompanies Act 2013 and Regulation 16 (1) (b) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. The Independent Directors have also confirmed that theyhave complied with the Company's Code of Conduct.
14. AUDIT COMMITTEE
The composition of Audit Committee is as follows:
|Name of Directors ||Designation in Committee ||Nature of Directorship |
|Mr. Nitin Maheshwari ||Chairman ||Non-Executive and Independent |
|Mr. Kishan Kumar Sarda ||Member ||Non-Executive and Independent |
|Mr. Shailesh Chandak ||Member ||Executive Director |
During the Financial Year 2015-16 Audit Committee met 4 times on 10th May2015 31stAugust 2015 11th November 2015 and 13thFebruary 2016. All the recommendations made by the audit committee were accepted by theBoard.
Frequency and quorum at these meetings were in conformity with the provisions of theCompanies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 entered into by the company with the Stock Exchanges.
15. NOMINATION AND REMUNERATION COMMITTEE
The Company follows a policy on "Nomination and Remuneration of Directors Keymanagerial Personnel and Senior Management". The policy is approved by the Nomination& Remuneration Committee and the Board. More details on the same are given in AnnexureII.
16. CONTRACTS AND ARRANGEMENT WITH RELATED PARTY
The Company had entered into related party transactions. Form AOC 2 as required underthe Companies Act 2013 for related party transaction is annexed as Annexure III tothe Directors Report.
17. STATUTORY AUDITORS
M/s. Sanjay Maheshwari & Associates Chartered Accountants who are the StatutoryAuditors of the Company hold office up to the forthcoming Annual General Meeting andexpressed their unwillingness to continue as Statutory Auditors' of the Company. M/s. R TJain & Co. Chartered Accountants (Firm Registration No. 103961W) has consented toact the Auditors' o the Company are recommended for appointment for a period of fiveyears to carry out the audit the accounts of the Company beginning from the financial year2016-17.
As required in terms of the provisions of section 139 of the Companies Act 2013 theCompany has obtained written confirmation from M/s. R T Jain & Co.; that theirappointment if made would be in conformity with the limits specified in the saidSection.
18. SECRETARIAL AUDITORS
The Board of Directors have appointed M/s R. M Mimani & Associates as SecretarialAuditors to conduct Secretarial Audit for the Financial Year 2015-16.
The Secretarial Audit Report issued by M/s R. M Mimani & Associates CompanySecretaries in Practice is self explanatory and does not call for further comments. TheSecretarial Audit Report and Management reply on Qualifications stated in the saidSecretarial Report forms a part of Directors Report as Annexure IV.
19. BUSINESS RISK MANAGEMENT
The Company has a robust Business Risk Management (BRM) framework to identify evaluatebusiness risks and opportunities. This framework seeks to create transparency minimizeadverse impact on the business objectives and enhance the Company's competitive advantage.The business risk framework defines the risk management approach across the enterprise atvarious levels including documentation and reporting. The framework has different riskmodels which help in identifying risks trend exposure and potential impact analysis at aCompany level as also separately for business.
20. PARTICULARS REGARDING CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNINGS AND OUTGO
(A) Conservation of Energy
Your Company is continuously taking initiatives to ensure the optimum utilization ofenergy available in day to day operations. Your Company uses energy efficient lightingdevices light fittings to save energy capacitor bank / devices to maintain power factorwhich are environment and power efficient.
(B) Technology Absorption
Your Company is doing its business by ensuring optimum utilization of its availableresources. Your Company has not taken any research & development activity so far.
(C) Foreign Exchange Earnings and Outgo: The Company has not incurred in foreigncurrency during the financial year 2015-16.
21. INTERNAL FINANCIALS CONTROLS
The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weaknesses were observed.
22. BOARD EVALUATION
Pursuant to the provisions of the Companies Act 2013 and SEBI (LODR) Regulations2015 the Board has carried out an annual performance evaluation of its own performancethe Directors individually as well as the evaluation of the working of its AuditCompliance Committee Nomination and Remuneration Committee and Stakeholders RelationCommittee.
23. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION.PROHIBITION AND REDRESSAL) ACT 2013
The Company has always believed in providing a safe and harassment free workplace forevery individual through various interventions and practices.
The Company always endeavors to create and provide an environment that is free fromdiscrimination and harassment including sexual harassment. The Company has in place anAnti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment ofWomen at the Workplace (Prevention Prohibition &Redressal) Act 2013. InternalComplaints Committee (ICC) has been set up to redress complaints received regarding sexualharassment. All employees (permanent contractual temporary trainees) are covered underthis policy
The following is a summary of sexual harassment complaints received and disposed offduring the year 2015-16 :
Number of complaints received: NIL
Number of complaints disposed off: NIL
24. MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review as stipulated underSEBI (LODR) Regulations 2015 is presented in a separate section forming part of thisAnnual Report for the year ended 31st March 2016.
25. CORPORATE GOVERNANCE
The Company is committed to maintain high standards of corporate governance and adhereto corporate governance requirement set out by SEBI. The report of corporate governance asstipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015forms an integral part of the report. The Compliance certificate from the auditors orpracticing Company Secretaries regarding compliance of conditions of corporate governanceas stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015shall be annexed with the report.
26. AUDITORS' REPORT
The Auditors' Report does not contain any qualification. Notes to Accounts and Auditorsremarks in their report are self-explanatory and do not call for any further comments.
27. VIGIL MECHANISM AND WHISTLE BLOWER POLICY
The Vigil Mechanism of the Company which also incorporates a whistle blower policy interms of the Listing Agreement includes an Ethics & Compliance Task Force comprisingsenior executives of the Company. Protected disclosures can be made by a whistle blowerthrough an e-mail or dedicated telephone line or a letter to the Task Force or to theChairman of the Audit Committee. The Vigil Mechanism / Whistle Blower Policy has beenuploaded on the Company's Website i.e www.kavitafabrics.com
28. PARTICULARS OF LOANS GIVEN OR INVESTMENTS MADE
Particulars of loans given investments made along with the purpose for which the loanor guarantee or security is proposed to be utilized by the recipient are provided in thefinancial statement . (Please refer the standalone financial statement).
29. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY THE COMPANY
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to Financial Statements.
30. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND
Your Company did not have any funds lying unpaid or unclaimed for a period of sevenyears. Therefore there were no funds which were required to be transferred to InvestorEducation and Protection Fund (IEPF).
31. LISTING WITH STOCK EXCHANGES
The Company is listed on Main Board of BSE Limited. The Company confirms that it haspaid the Annual Listing Fees for the year 2016-2017 to BSE Limited where the Company'sShares are listed.
32. HUMAN RESOURCES
Your Company treats its "human resources" as one of its most importantassets. Your Company continuously invest in attraction retention and development oftalent on an ongoing basis. A number of programs that provide focused people attention arecurrently underway. Your Company thrust is on the promotion of talent internally throughjob rotation and job enlargement.
33. CODE OF CONDUCT
The Board has laid down a Code of Conduct for all Board members and senior managementpersonnel of the Company which is available on website of the company i.e.www.kavitafabrics.com. The Company has obtained confirmations for the compliance with thesaid code from all its Board members and senior management personnel for the year endedMarch 31 2016.
34. CAUTIONARY STATEMENT
Statements in this Report Management Discussion and Analysis Corporate GovernanceNotice to the Shareholders or elsewhere in this Annual Report describing the Company'sobjectives projections estimates and expectations may constitute forward lookingstatement' within the meaning of applicable laws and regulations. Actual results mightdiffer materially from those either expressed or implied in the statement depending on theMarket conditions and circumstances.
The Directors wish to thank and deeply acknowledge the co-operation assistance andsupport extended by the Regulatory Authorities Company's Bankers Customers Shareholdersand other business constituents during the year under review.
The Directors also wish to place on record their appreciation for all roundco-operation and contribution made by employees at all levels.
| ||By Order of the Board of Directors |
| ||Sd/- ||Sd/- |
|Date: September 04 2016 ||Harish Chandak ||Shailesh Chandak |
|Place: Surat ||(Managing Director) ||(Executive Director) |