Your Directors hereby present their32nd Annual Report along with AuditedFinancial Statements for the year ended March 312016.
(Rs in Lacs)
|Particulars ||Year Ended March 312016 ||Year Ended March 312015 |
|Revenue from Operations || || |
|Gross ||35599.51 ||24680.58 |
|Net of Excise Duty ||31416.81 ||21879.24 |
|Other Income ||89.34 ||12.65 |
|Profit before Finance Costs & Depreciation and amortisation expense ||2753.29 ||658.16 |
|Finance Costs ||720.98 ||812.33 |
|Profit / (Loss) before Depreciation and amortisation expense ||2032.31 ||(154.17) |
|Depreciation and amortisation expense ||293.93 ||314.18 |
|Profit / (Loss) before Tax ||1738.38 ||(468.35) |
|Tax expenses - Current Tax ||201.11 ||- |
|- Deferred Tax ||457.32 ||(164.14) |
| ||658.43 ||(164.14) |
|Profit / (Loss) after Tax ||1079.95 ||(304.21) |
|Balance brought forward ||(1570.53) ||(1247.75) |
|Depreciation adjustment as per || || |
|Companies Act 2013 ||- ||(18.57) |
|Deficit carried forward ||(490.58) ||(1570.53) |
Operating Revenues grew by 43% over the previous year whilst the volumes growth of 50%was achieved. Sales of Engineering plastics compounds produced was effected for the firstfull year.
The benign commodity prices during the year helped in keeping a check on the rawmaterial input prices.
The Agency agreement with M/s.TOSAF Compounds Ltd. Israel for the distribution ofMasterbatches compounds was mutually terminated at the end of the first quarter of thefiscal year.
Detailed analysis of the Companys performance during the year is provided inAnnexure to this report under Managements Discussion and Analysis Report.
Though the operations for the year have generated a profit in view of the carryoverloss of the earlier years in the Profit and Loss account your Directors regret that theyare unable to recommend any dividend on the Equity Share Capital for the year underreview.
RIGHTS ISSUE OF EQUITY SHARES
During the year the Company had issued 3703364 equity shares of face value T 10/-each for cash at issue price of Rs 270/- per equity share including share premium of Rs260/- per equity share in the ratio of 578 equity shares for every 1000 equity shares heldaggregating to T 9999.08 Lacs to the existing Shareholders of the Company.
The Company sought and obtained approval from its Members to vary / enlarge the termsof offer made for rights issue relating only to the Object of the issue and Utilisation ofproceeds.
The amount received under the Rights Issue have been utilised for the above revisedpurposes.
Consequent to the Rights Issue of Equity Shares the paid up equity capital as on March312016 stood at Rs 1011.06 lacs. The Company has not issued shares with differentialvoting rights norgranted stock options nor sweat equity.
The company made a reference to BIFR consequent to erosion of more than fifty percentof its peak networth in 2014. Post completion of the Right Issue of Rs 9999.08 Lacs by theCompany in October 2015 and the improved financial results achieved the company haverecouped the above losses and the same has been informed to BIFRon 26th February 2016.
NAME CHANGE OF THE COMPANY
The Company changed its name from Hydro S & S Industries Limited to Kingfa Science& Technology (India) Limited. The Company obtained fresh Certificate of Incorporationfrom Registrar of Companies Chennai for the change of name of the company. It alsoreceived consent from BSE Limited pursuant to Change in Name of the Company and change inScrip ID as KINGFA. The depositories NSDL and CDSL have also changed the name of theScrip to Kingfa Science & Technology (India) Limited. The process of name change withthe statutory authorities is on and will be completed shortly.
The Company received Rs 47.41 lacs as subsidy under the Industrial Promotion Scheme ofthe Government of Maharashtra for its investment in Jejuri during the year and the sameis credited in the Books under Capital Reserve.
NEW MANUFACTURING FACILITY
The Company is in the process of setting up a green field manufacturing location nearPune which will be capable of housing the capacity expansion in the medium term future.The location would also house a State of Art "Technical and Product DevelopmentCentre" to meet the growing needs of the Company.
Your Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Company has not given any loans or guarantees nor has made any Investments coveredunder the provisions of Section 186 of the Companies Act 2013.
INTERNAL CONTROL SYSTEMS AND THEIRADEQUACY
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit function isdefined in the Internal Audit Manual. To maintain its objectivity and independence theInternal Audit function reports to the Chairman of the Audit Committee of the Board and tothe Chairman and Managing Director.
The Internal Audit Department monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliance with operating systems accounting
procedures and policies at all locations of the Company. Based on the report ofinternal audit function process owners undertake corrective action in their respectiveareas and thereby strengthen the controls. Significant audit observations andrecommendations along with corrective actions thereon are presented to the Audit Committeeof the Board.
CORPORATE SOCIAL RESPONSIBILITY
The Company has constituted a Corporate Social Responsibility Committee and framed itsPolicy. The Policy has been uploaded on the website of the Company.
ENVIRONMENT HEALTH AND SAFETY
The facilities of the Company renewed their ISO 14001 and OHSAS18001 certification.
Your Companys policy require the conduct of all operations in such a manner so asto ensure safety of all concerned compliance of statutory and industrial requirements forenvironment protection and conservation of natural resources to the extent possible.
Industrial relations remained cordial during the year.
Various HR initiatives are continuously taken to align the HR policies to the growingrequirements of the business. Reviews training and tools are being provided for thepersonnel to improve overall efficiency.
Mr.Dilip Dinkar Kulkarni was appointed as an Independent Director by the Members at theAnnual General Meeting held on 28th September 2015.
Mr.N.K.Ramaswamy was appointed as a Whole-time Director designated as Chief ExecutiveOfficer with effect from 13th November 2015 and approved by the Members through PostalBallot whose results were declared on 1st February 2016.
Mr.Nie Delin has resigned as Director from the Board with effect from 13th November2015 due to his other occupations. The Board wishes to place on record its appreciation ofthe valuable service rendered by him during his tenure in the Company.
Your Director Mr.Bo Jingen retire by rotation and being eligible offers himself forre-appointment.
Both Mr.Bo Jingen Managing Director and Mr.Wu Xiaohui Whole-time Director beingnon-residents an application was made for their appointment to the Central Government andapproval was received.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and underRegulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015.
NUMBER OF MEETINGS OF THE BOARD
The details of the number of Meetings of the Board held during the Financial Year 2015- 16 forms part of the Corporate Governance Report.
COMMITTEES OF THE BOARD
During the year the various Committees of the Board i.e. Audit Committee Nominationand Remuneration Committee and Stakeholder Relationship Committee were reconstituted andCorporate Social Responsibility Committee was constituted. The details of terms ofreference of these committees has been given in the Corporate Governance Report.
To the best of knowledge and belief and according to the information and explanationsobtained by them your Directors make the following statement in terms of Section134(3)(c) of the Companies Act 2013:
(i) that in the preparation of the Annual Accounts for the year ended 31 st March2016 the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;
(ii) and applied them consistently and made judgements and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at March 312016 and of the profit or loss of the Company for the year ended onthat date;
(iii) that the Directors has 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 annual accounts have been prepared on a "going concern" basis.
(v) that 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
(vi) that the Directors had devised proper system to ensure compliance with theprovisions of all applicable laws and that such system were adequate and operatingeffectively.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onarms length basis and were in the ordinary course of business. The Policy has beenuploaded on the website of the Company.
The Company does not have subsidiary.
WHISTLE BLOWER POLICY AND VIGIL MECHANISM
In pursuant to the provisions of the Companies Act 2013 a Whistle Blower Policy andVigil Mechanism for Directors and Employees to report genuine concerns has beenestablished. The Policy has been uploaded on the website of the Company.
PREVENTION OF INSIDER TRADING
In January 2015 SEBI notified the SEBI (Prohibition of Insider Trading) Regulations2015 which came into effect from May 152015. Pursuant thereto the Company has formulatedand adopted a new Code for Prevention of Insider Trading and the same has been uploaded onthe website of the Company.
M/s. P. Srinivasan and Co. Chartered Accountants Chennai Statutory Auditors retireat the close of this Annual General Meeting and are eligible for reappointment. TheCompany has received confirmation regarding their consent and eligibility under sections139 and 141 of the Companies Act 2013 read with Companies (Accounts) Rules 2014 forappointment as the auditors of the company.
The Auditors have also confirmed that they hold valid certificate issued by the PeerReview Board of the Institute of Chartered Accountants of India.
The Audit Committee and the Board of Directors have recommended the appointment of theAuditors for the financial year 2016-17. The necessary resolution is being placed beforethe shareholders for their approval.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethereunder the Company had appointed M/s.Lakshmmi Subramanian & AssociatesPractising Company Secretaries to undertake the Secretarial Audit of the Company. TheSecretarial Audit Report is included as ANNEXURE -1 and forms an integral part of thisReport. The observations made in the report are self explanatory.
In compliance with the provisions of Section 148 of the Companies Act 2013 the Boardof Directors of the Company had appointed Mr.K.Suryanarayanan Cost Accountant as CostAuditor of the company to conduct audit of cost records made and maintained by thecompany.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT-9 is annexedherewith as ANNEXURE - II.
BUSINESS RISK MANAGEMENT
Business risk evaluation and management is an ongoing process within the Company. TheAssessment is periodically examined by the Board.
The information on Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo pursuant to Section 134(3)(m) of the Companies Act 2013 read with theRule 8(3) of the Companies (Accounts) Rules 2014 is given in ANN EXU RE -111 to thisReport.
The particulars of employees are not applicable since there are no employees drawingremuneration more than Rs 6000000/- per annum (full year) orRs 500000/- p.m. (part ofthe year).
All the dividends of the earlier years which have remained unclaimed have since beentransferred to the Investor Education and Protection Fund at the expiry of the specifiedperiod(s) as required under Companies Act. Details of dividends remaining unclaimed as on31.03.2016 are as under:
|Year ||Date of declaration ||No. of Shareholders ||Total Unclaimed Dividend (7) ||Due date for transfer to IEPF Account |
|2008- 2009 to 2009- 2010 ||No Dividend declared || ||N.A. || |
|2010-2011 ||29.09.2011 ||729 ||60868.80 ||05.11.2018 |
|2011 -2012 to 2014-2015 ||No Dividend declared || ||N.A. || |
CORPORATE GOVERNANCE AND MANAGEMENTS DISCUSSION & ANALYSIS REPORTS
The Corporate Governance and Managements Discussion & Analysis Report whichform an integral part of this Report are set out as separate Annexures together with theCertificate from the Auditors of the Company regarding compliance with the requirements ofCorporate Governance as stipulated under various regulations of the SEBI (ListingObligations and disclosure requirements) Regulations 2015.
Your Directors wish to record their appreciation of the continued support andco-operation from your Companys customers vendors bankers and all otherstakeholders. Your Company will continue to build and maintain strong links with itsbusiness partners.
The Directors sincerely appreciate the high degree of professionalism commitment anddedication displayed by employees at all levels. The Directors also place on record theirgratitude to the Members for their continued support and confidence.
|For and on behalf of the Board of Directors || |
| ||BOJINGEN |
|Chairman ||and Managing Director |
|Place: Chennai || |
|Date : 30th May 2016 || |