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KGN Industries Ltd.

BSE: 531612 Sector: Others
NSE: N.A. ISIN Code: INE196C01022
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OPEN 1.62
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VOLUME 2000
52-Week high 2.76
52-Week low 1.56
P/E
Mkt Cap.(Rs cr) 36
Buy Price 1.56
Buy Qty 400.00
Sell Price 1.62
Sell Qty 100.00
OPEN 1.62
CLOSE 1.59
VOLUME 2000
52-Week high 2.76
52-Week low 1.56
P/E
Mkt Cap.(Rs cr) 36
Buy Price 1.56
Buy Qty 400.00
Sell Price 1.62
Sell Qty 100.00

KGN Industries Ltd. (KGNINDUSTRIES) - Director Report

Company director report

To

The members

Your Directors have the pleasure in presenting the 22nd Annual Reporttogether with the Audited Statement of Accounts for the year ending on 31stMarch 2016.

Financial Results:

(Amt. in Rupees)

Particulars

Financial Year ended

Standalone

Consolidated

2015-16 2014 - 2015 2015-16 2014 - 2015
Revenue from operations 5437900 6555345 5456935 6555345
Other Income - 2552868 - 2072501
Total revenue 5437900 9108213 5456935 8627846
Expenditure
Employee benefits expenses 381988 1342564 381988 1342564
Other expenses 2764537 4924447 2775925 6587591
Total expenses 4882164 7903246 4893170 7930155
Profit before tax 555736 1204967 563765 697691
Tax expense :
current Tax 186675 249704 188925 251772
Deferred Tax - 67760 - 67760
Excess provision of income tax - - - -513967
Net profit for the year 369061 887503 374840 892126

APPROPRIATIONS:

The Opening Balance of Surplus of Profit and Loss shown under the head Reserves andSurplus was Rs. 46139681/-. During the year under the review the profit of Rs.369061/-. was also added. The Closing Balance of Surplus of the Profit and Loss shownunder the head Reserves and Surplus was Rs. 46508742/-

OPERATIONS:

During the year under the review there was a decrease in total income of 40.30% incomparison to the previous year. The total expenses have decreased by 38.23 % and the netprofit after tax has decreased by 58.42%.

DIVIDEND:

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. BabulalJethalal Hirani (DIN: 02362983) retires by rotation at the ensuing Annual General Meetingand being eligible offers himself for re-appointment. Your directors recommend hisreappointment.

ii. Cessation:

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. Arifbhai Ismailbhai Memon Managing Director

2. Mr. Jignesh Babulal Hirani Chief Financial Officer

DETAILS OF HOLDING / SUBSIDARY COMPANIES / JOINT VENTURES / ASSOCIATE COMPANIES:

Your Company has One wholly owned Subsidiary Company i.e. KGN PROJECTS 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.

DEPOSITS:

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 order 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.

ENVIRONMENTAL PROTECTION:

Your Company is not engaged in any type of manufacturing activities. It is notgenerating any type of pollution. Hence Pollution Control regulations and norms are notapplicable to Company.

PERSONNEL:

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

VIGIL MECHANISM:

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.

AUDIT COMMITTEE:

The Audit Committee of the Board of Directors of the Company was re-constituted andpresently consists of three Directors viz. Mr. Ajazahmed Abulgani Ansari Ms. JankiVaghela and Mr. Aftabahmed Kadri.

Mr. Ajazahmed Abulgani Ansari is the Chairman 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 exchange as amended from time to time. The Statutory Auditor Internal Auditorand Chief Finance Officer usually attend the Meeting of the Audit Committee.

AUDITORS:

i. Statutory Auditor 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 AUDITOR

M/s. A.Y. Pathan & Associates Chartered Accountant 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 AUDITOR 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 AUDITREPORT:

There are no qualifications or adverse remarks in the Auditor’s Report.Explanation on qualification adverse remark made in Secretarial Audit Report is as under.

Qualification/ Adverse Remark Explanation
The Company is yet to appoint the Company Secretary as specified under the provisions of Section 203 under the Companies Act 2013. The Company was not able to get a fit and proper candidate at remuneration commensurate with the size of the Company. The Company did make sufficient attempts to appoint full time Company Secretary however was unable to find / appoint any suitable candidate. However the company is in process to appoint a full time Company Secretary.
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 form and the compliance of the same will be made soon. However Board assures that it will be complied with now onwards.

LISTING:

The shares of the company are listed at BSE Limited. Listing fees of BSE Limited ispaid for the year 2015 - 2016.

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. 25 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 2016.

INVESTMENT IN UNQUOTED SHARES:

The Company has made investment in unquoted shares. i.e. 99994 Shares in KGN ProjectsLimited.

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. Babulal J. Hirani (Chaiman) 4 4
Mr. Arifbhai Memon 4 3
Mr. Jignesh Hirani 4 4
Mr. Aftab Ahmed 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:

Board:

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.

Individual Directors:

(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 nonindependent directors was providing good business and people leadership.

SEXUAL HARASSMENT:

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.

POLICIES:

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.kgnindustries.com.

APPRECIATION:

Your Directors wish to convey their thanks to all the bankers suppliers customers andother persons for their continued support to the company.

For and on behalf of the Directors of the KGN INDUSTIRES LIMITED
Date: Mumbai
Place: 13th August 2016 BABULAL JETHALAL HIRANI
CHAIRMAN
DIN: 02362983