Your Directors have the pleasure in presenting the 22nd Annual Reporttogether with the Audited Statement of Accounts for the year ending on 31stMarch 2016.
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(Amt. in Rupees)
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Financial Year ended
|Particulars || |
| ||2015 - 2016 ||2014 - 2015 ||2015 - 2016 ||2014 - 2015 |
|Revenue from operations ||9138620 ||170219441 ||9138620 ||170266841 |
|Other Income ||882067 ||6242542 ||1120173 ||7461448 |
|T otal revenue ||10020687 ||176461983 ||10258793 ||177728289 |
|Expenditure || || || || |
|Employee benefits expenses ||257446 ||668486 ||314036 ||1631554 |
|Other expenses ||9130155 ||174566430 ||9205921 ||174791157 |
|Total expenses ||9387601 ||175234916 ||9519957 ||176422711 |
|Profit before tax ||633086 ||1227067 ||738836 ||1305578 |
|Tax expense : || || || || |
|current Tax ||192500 ||235014 ||225176 ||259273 |
|Provision for Income Tax ||- ||-3471702 ||- ||-3471702 |
|Net profit for the year ||440586 ||4463755 ||513660 ||4518007 |
The Opening Balance of Surplus of Profit and Loss shown under the head Reserves andSurplus was Rs. 49503873/-. During the year under the review the profit of Rs.440585/- was also added. The Closing Balance of Surplus of the Profit and Loss shownunder the head Reserves and Surplus was Rs 49944458/-.
During the year under the review there was decrease in total income of 94.32 % incomparison to the previous year. The total expenses have decreased by 94.64 % and the netprofit after tax has decreased by 90.13 %.
As Company has inadequate Profit your directors do not propose any dividend for thecurrent year to conserve the resources.
DETAILS OF DIRECTORS/KEY MANAGERIAL PERSONNEL APPOINTED/RESIGNED:
i. Retirement by Rotation:
Pursuant to the provisions of Section 152(6) of the Companies Act 2013 Mr. IsmailMemon (DIN: 00209507) retires by rotation at the ensuing Annual General Meeting and beingeligible offers himself for re-appointment. Your directors recommend his re-appointment.
There is no cessation of any director during the year.
iii. Appointment of Additional/Independent Women Director:
There is no appointment of any director during the year under review.
iv. Key Managerial Personnel:
The following persons are designated as Key Managerial Personnel:
1. Mr. Babulal Hirani Managing Director
2. Mr. Mohsin Ismailbhai Memon Chief Financial Officer
3. Ms. Sakina Aiyyaz Pimpalnerwala Company Secretary
DETAILS OF HOLDING/SUBSIDARY COMPANIES/JOINT VENTURES/ASSOCIATE COMPANIES:
Your Company has Four wholly owned Subsidiary Companies i.e. KGN Bio Tech LimitedKGN Green Limited KGN Proteins Limited KGN Oil & Gas Private Limited.
In terms of the Provisions contained in Section 129 (3) of the Companies Act 2013Read with rule 5 of the Companies (Accounts) Rules 2014 a report on the performance andthe financial of each of the subsidiaries is provided as Annexure A i.e AOC-1'to this Report.
The Company has not invited/ accepted any deposit other than the exempted deposit asprescribed under the provision of the Companies Act 2013 and the rules framed thereunder as amended from time to time. Hence there are no particulars to report about thedeposit falling under Rule 8 (5) (v) and (vi) of Companies (Accounts) Rules 2014.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS:
During the year under review there were no significant and material orderspassed by any Regulators or Court or Tribunals which may have impact on the going concernstatus. Neither there are any orders passed which may have impact on the Company'soperation in future.
The Company has shifted its registered office "23 Vaswani Mansion 4th FloorDinshaw Vaccha Road Opp. K.C. College Churchgate Mumbai MH 400020 " to "B- 15Hirnen Shopping Centre co. op. hsg. Society Limited Near City Centre S.V Road Goregaon(West) Mumbai - 400062" in its board meeting held on 13th August2016"
INTERNAL FINANCIAL CONTROLS:
Your Company has well laid out policies on financial reporting adherence to Managementpolicies and also on promoting compliance of ethical and well defined standards. Moreoverthe management team regularly meets to monitor goals and results and scrutinizes reasonsfor deviations in order to take necessary corrective steps. The Audit Committee whichmeets at regular intervals also reviews the internal control systems with the Managementand the internal auditors. All audit observations and follow up actions are discussed withthe Management as also the Statutory Auditors and the Audit Committee reviews themregularly.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION. FOREIGN EXCHANGE EARNINGS AND OUTGO:
Pursuant to Rule 8 (3) of Companies (Accounts) Rules 2014 the Board of Directorshereby declares that there are no particulars to report for the Conservation of Energy& Technology Absorption. There is no foreign exchange earnings and outgo during theyear under the review.
Your Company is engaged in the manufacturing activities for which Company has takenapproval of Gujarat Pollution Control Board and the directors inform with regret thatthere were no manufacturing activities during the financial year 2015-16.
There was no employee drawing remuneration requiring disclosure under the Rule 5 (2) ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
DISCLOSURE UNDER SECTION 197(12) AND RULE 5(1) OF THE COMPANIES (APPOINTMENT ANDREMUNERATION OF MANAGERIAL PERSONNEL) RULES. 2014
There was no employee drawing remuneration requiring disclosure under section 197(12)and Rule 5 (1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules2014. Required details are annexed to this Report as Annexure B.
Pursuant to Section 177(9) of the Companies Act 2013 the company has a Whistle BlowerPolicy to deal with any instance of fraud and mismanagement. The employees of the companyare free to report violations of any laws rules regulations and concerns about unethicalconduct to the Audit Committee under this policy. The policy ensures that strictconfidentiality is maintained whilst dealing with concerns and also that no discriminationwith any person for a genuinely raised concern.
The Audit Committee of the Board of Directors of the Company presently consists ofthree Directors viz. Mr. Aftabahmed Kadri Mr.Ajazahmed Ansari and Ms.Janki Vaghela. Allmembers of the Audit Committee are non-executive Directors. Mr. Aftabahmed Kadri is theChairman of the Audit Committee.
During the Year under review total four Meetings of the Board of Directors of theCompany were held.
The Composition and the Terms of Reference of the Audit Committee is as mentioned inthe provisions of Section 177 of the Companies Act 2013 and SEBI Listing Regulations withthe Stock exchanges as amended from time to time. The Statutory Auditor Internal Auditorand Chief Finance Officer usually attend the Meeting of the Audit Committee. The CompanySecretary of the Company Ms. Sakina Aiyyaz Pimpalnerwala acts as Secretary of theCommittee.
i. STATUTORY AUDITORS AND THEIR REPORT
In the last AGM held on 29th September 2015 M/s. Kirit & CompanyChartered Accountants (having Registration No. 132282W) have been appointed as StatutoryAuditors of the Company for a period of 2 (Two) years. Ratification of appointment ofStatutory Auditors is being sought from the members of the Company at the ensuing AGM.They have confirmed their eligibility and willingness to accept office if re-appointed.
The observations made in their report and dealt with in the notes forming part of theAccounts at appropriate places are self-explanatory.
ii. INTERNAL AUDITORS
M/s. A.Y. Pathan & Associates Chartered Accountants are Internal Auditors of theCompany. The Audit Committee of the Board of Directors in consultation with the InternalAuditors formulate the scope functioning periodicity and methodology for conducting theinternal audit.
iii. SECRETARIAL AUDITORS AND SECRETARIAL AUDIT REPORT
The Board of Directors of the Company has in compliance with the provisions of Section304(1) of the Companies Act 2013 and rules made in this behalf appointed Jatin H.Kapadia Practising Company Secretary to carry out Secretarial Audit of the Company forthe financial year 2015-16. The Report of the Secretarial Auditor is annexed to thisReport as Annexure C which is self explanatory and gives complete information.
EXPLANATION TO THE QUALIFICATIONS IN AUDITOR'S REPORT AND SECRETARIAL AUDIT REPORT:
There are no qualifications or adverse remarks in the Auditor's Report. Explanation onqualification adverse remark made in Secretarial Audit Report is as under.
|Qualification/ Adverse Remark ||Explanation |
|Certain forms are yet to be filed by the Company with the Registrar of Company as specified under the Companies Act 2013. ||The company is in process of filing the requisite forms and the compliance of the same will be made soon. |
| ||However Board assures that it will be complied with now onwards. |
The shares of the company are listed at BSE Limited and Metropolitan Stock Exchange ofIndia Limited. Listing fees of BSE Limited is paid for the year 2015-2016 and the Companyis in process to pay the listing of Metropolitan Stock Exchange of India Limited.
DIRECTORS RESPONSIBITLY STATEMENT:
As required under the provisions of Section 134 of the Act your Directors report that:
(a) In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures.
(b) 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 at the end of the financial year and ofthe profits of the Company for that period.
(c) The Directors 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) The Directors have prepared the annual accounts on a going concern basis.
(e) The Directors have laid down internal financial controls as required by Explanationto Section 134(5)(e) of the Act to be followed by the Company and such internal financialcontrols are adequate and are operating effectively.
(f) The Directors have devised proper systems to ensure compliance with the provisionsof applicable laws and such systems are adequate and operating effectively.
RELATED PARTY TRANSACTIONS:
During the year under review the Company has entered into the transactions with therelated parties the details of each are provided in point No. 26 under the head notes onFinancial Statements.
PARTICULARS OF LOANS/GUARANTEES/INVESTMENT:
The Particulars of loans guarantee or investment made under Section 186 of theCompanies Act 2013 are furnished in the Notes to the Financial Statements for the yearended 31st March 2015.
INVESTMENT IN UNQUOTED SHARES:
The Company has made investment in unquoted shares which is as under:
|1. KGN Bio- Tech Ltd ||50000 Shares |
|2. KGN Green Ltd ||50000 Shares |
|3. KGN Oil & Gas Pvt. Ltd ||10000 Shares |
|4. KGN Proteins Ltd ||50000 Shares |
RISK MANAGEMENT POLICY:
The Company has a structured risk management policy. The Risk management process isdesigned to safeguard the organisation from various risks through adequate and timelyactions. It is designed to anticipate evaluate and mitigate risks in order to minimizeits impact on the business. The potential risks are inventorised and integrated with themanagement process such that they receive the necessary consideration during decisionmaking.
STATEMENT OF INDEPENDENT DIRECTORS:
The following Directors are independent in terms of Section 149(6) of the Act:
(a) Mr. Ajazahmed Ansari
(b) Mr. Aftabahmed Kadri
(c) Ms. Janki Ranjitsingh Vaghela
The Company has received requisite declarations/ confirmations from all the aboveDirectors confirming their independence.
EXTRACT OF THE ANNUAL RETURN:
Pursuant to provision of Section 92 and 134 and other applicable provision of theCompanies Act 2013 and of Rule 12 (1) of Companies (Management and Administration) Rules2014 the extract of the annual return in form MGT 9 for the Financial Year ended on 31stMarch 2016 is annexed as Annexure D to this Report.
NUMBER OF BOARD MEETINGS:
Total 4 Board Meetings were held during the Financial Year 2015-16 on 30thMay 2015 14th August 2015 9th November 2015 and 13thFebruary 2016 and the gap between two meetings did not exceed one hundred and twentydays. The details of attendance of Directors at the Board Meetings are as under:
|Name of Director || |
Number of Board Meetings held and attended FY 2015-16
|Held during the tenure ||Attended |
|Mr. Ismail Memon (Chairman) ||4 ||2 |
|Mr. Babulal J. Hirani ||4 ||4 |
|Mr. Mohsin Ismail Memon ||4 ||4 |
|Mr. Aftabahmed Kadri ||4 ||3 |
|Mr. Ajazahmed Ansari ||4 ||3 |
|Mrs. Janki Ranjitsingh Vaghela ||4 ||3 |
CORPORATE SOCIAL RESPONSIBILITY:
The Provision of Section 135 of the Companies Act 2013 regarding Corporate SocialResponsibility is not applicable to the company.
ANNUAL PERFORMANCE EVALUATION:
In compliance with the provisions of the Act and voluntarily SEBI Listing Regulationsthe performance evaluation was carried out as under:
In accordance with the criteria suggested by The Nomination and Remuneration Committeethe Board of Directors evaluated the performance of the Board having regard to variouscriteria such as Board composition Board processes Board dynamics etc. The IndependentDirectors at their separate meetings also evaluated the performance of the Board as awhole based on various criteria. The Board and the Independent Directors were of theunanimous view that performance of the Board of Directors as a whole was satisfactory.
Committees of the Board:
The performance of the Audit Committee the Nomination and Remuneration Committee andStakeholders Relationship Committee was evaluated by the Board having regard to variouscriteria such as committee composition committee processes committee dynamics etc. TheBoard was of the unanimous view that all the committees were performing their functionssatisfactorily and according to the mandate prescribed by the Board under the regulatoryrequirements including the provisions of the Act the Rules framed thereunder and SEBIListing Regulations.
(a) Independent Directors: In accordance with the criteria suggested by The Nominationand Remuneration Committee the performance of each independent director was evaluated bythe entire Board of Directors (excluding the director being evaluated) on variousparameters like engagement leadership analysis decision making communicationgovernance and interest of stakeholders. The Board was of the unanimous view that eachindependent director was a reputed professional and brought his/her rich experience to thedeliberations of the Board. The Board also appreciated the contribution made by all theindependent directors in guiding the management in achieving higher growth and concludedthat continuance of each independent director on the Board will be in the interest of theCompany.
(b) Non-Independent Directors: The performance of each of the non-independent directors(including the chair person) was evaluated by the Independent Directors at their separatemeeting. Further their performance was also evaluated by the Board of Directors. Thevarious criteria considered for the purpose of evaluation included leadership engagementtransparency analysis decision making functional knowledge governance and interest ofstakeholders. The Independent Directors and the Board were of the unanimous view that eachof the non-independent directors was providing good business and people leadership.
The Company has an Internal Complaint Committee as required under Section 4 of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013and the Rules made thereunder. During the year under review no complaints were reported.
The Company has adopted the following policies pursuant to the provisions of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 during the year underreview:
a. Policy on preservation of the Documents
b. Policy on criteria for determining Materiality of Events
c. Whistle Blower Policy
d. Policy on dealing with related party transactions
e. Policy for determining material subsidiaries
The details of the above mentioned policies are provided in the website of the Companyi.e. www.kgnenterprises.com .
Your Directors wish to convey their thanks to all the bankers suppliers customersshareholders and other persons for their continued support to the company.
| ||For and on behalf of Board of Directors of |
| ||KGN ENTERPRISES LIMITED |
|Date: Mumbai || |
|Place: 13.08.2016 ||ISMAIL MEMON |
| ||CHIRMAN |
| ||DIN: 00209507 |