The Members Kiri Industries Limited
Your Directors have pleasure in presenting their 19th Annual Report togetherwith Audited Accounts of the Company for the financial year ended on March 31 2017.
* Standalone Performance:
The highlights of Company's financial performance for the year ended March 31 2017are as under:
| || ||(Rs. In Crore) |
|Particulars ||2016-17 ||2015-16 |
|Total Revenue ||966.83 ||896.65 |
|Earning Before Finance Cost Depreciation Tax and Prior period adjustments ||129.87 ||90.44 |
|Less: Finance Cost ||8.02 ||67.15 |
|Depreciation ||22.34 ||20.38 |
|Prior Period adjustments ||0.31 ||0.22 |
|Earning before taxation and extra ordinary items ||99.21 ||2.71 |
|Add: Extra Ordinary Items ||(0.1) ||4.70 |
|Earning Before Taxation ||99.11 ||7.41 |
|Add: Deferred Tax(asset)/(liability) ||(3.88) ||1.66 |
|Earnings After Tax ||95.23 ||9.07 |
* Highlights of Operations
During the year under review the revenues of the Company increased by 8%. The Companyhas reported turnover of Rs. 966.83 Crore for the financial year 2017 as compared to Rs.896.65 Crore for the financial year 2016. The volumes of the company increased during thecurrent fiscal year especially volumes in Dyestuff increased by 25% Intermediates by 18%and basic chemicals by 7% as compared to FY 2015-16.
Earning before Finance Cost Depreciation Tax and Prior period adjustments:
During the year under review earning before Finance cost Depreciation Tax and priorperiod adjustment is increased by 44% from Rs. 90.44 Crore to Rs. 129.87 Crore which ismainly on account of reduction in cost of material consumed and administrative expenses ascompared to the previous financial year. During the current fiscal year Exports of thecompany increased by 56.72 % as compared to previous year.
During the year under review the total expenses of the company reduced by around 3%.Total expenses reduced from Rs. 893.94 Crore to Rs. 867.62 Crore as compared to previousfinancial year. One of the key factor for reduction of expenses has been the reduction inFinance Cost since the debt of the company has reduced substantially. The finance costhas been reduced by around 88% from Rs. 67.15 Crore to Rs.8.02 Crore.
Earnings After Tax:
During the year under review the Company has triggered a remarkable millstone toachieve historical earning after tax (EAT) of Rs. 95.23 Crore as compared to Rs. 9.07Crore of the previous financial year ended March 31 2016. EAT increase 10 times ascompared to previous financial year due to the increase in Revenue and sharp reduction infinance cost on account of repayment of outstanding debt during the financial year 2017.
Highlights of Consolidated Performance
The highlights of Company's consolidated financial performance for the year endedMarch 31 2017 are as under:
| || ||(Rs. In Crore) |
|Particulars ||2016-17 ||2015-16 |
|Total Revenue ||1127.75 ||1042.75 |
|Earnings Before Finance Cost Depreciation Tax and Prior period adjustments ||161.77 ||125.70 |
|Less: Finance Cost ||8.82 ||73.81 |
|Depreciation ||29.27 ||26.86 |
|Prior Period adjustments ||0.31 ||0.22 |
|Earnings before taxation and extra ordinary items ||123.37 ||24.81 |
|Add: Extra Ordinary Items ||(0.1) ||4.70 |
|Earnings Before Taxation ||123.27 ||29.51 |
|Less: Current Tax ||8.37 ||5.50 |
|Short Provision of Tax for earlier years ||- ||0.27 |
|Deferred Tax ||3.83 ||(1.93) |
|Mat Credit Entitlement ||0.84 ||- |
|Earnings After Tax ||110.23 ||25.67 |
|Add: Share of Profit from Associate ||156.12 ||170.04 |
|Earnings After Tax for the year ||266.35 ||195.71 |
Highlights of Operations
During the year under review the total revenue increased by 8% to Rs. 1127.75 Crorefrom Rs. 1042.75 Crore as compared to the previous financial year ended March 31 2016 dueto increase in volume of products of the Company and positive continuous support from Dyeand basic chemical business and positive contribution from its subsidiary and jointventure Company.
Earnings before Finance Cost Depreciation Tax and Prior period adjustments:
During the year under review the Earnings before Finance Costs Depreciation Tax andprior period adjustments are increased by 29% to Rs. 161.77 Crore from Rs. 125.70 Crore ascompared to the previous financial year. The revenue increase on account of increase involumes of the Company supported by increase in earnings of the Group.
During the year under review the total expenditure marginally decreased to Rs. 1004.39Crore as compared to Rs. 1017.93 Crore of the previous financial year. The reason fordecrease in total expenses is mainly due to sharp reduction in finance cost of theCompany.
Earnings After Tax:
During the year under review there is significant increase in earnings after tax (EAT)increased to Rs. 110.23 Crore as compared to Rs. 25.67 Crore of previous financial yearended March 31 2016. Increase in EAT is mainly on account of increase in total revenueand reduction of finance cost.
Transfer to Reserves
Appropriations to general reserve for the financial year ended March 31 2017 as perstandalone and consolidated financial statements are as under:
| || ||(Rs. In Crore) |
|Particulars ||Standalone ||Consolidated |
|Net profit for the year ||95.24 ||266.35 |
|Balance of Reserve at the beginning of the year ||130.23 ||598.23 |
|Transfer to General Reserve ||- ||- |
|Balance of Reserve at the end of the year ||241.71 ||880.82 |
Implementation of Dividend Distribution Policy:
Pursuant to regulation 43A of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") the Board of Directors has approved Dividend Distribution Policy attheir meeting held on January 28 2017. The policy includes various parameters andprocedural requirements for declaration of dividend and utilization of retained earningsetc. The policy is available on the website of the Company i.e. www.kiriindustries.com.
Dividend on Cumulative Redeemable Preference Shares:
Your Directors has recommend dividend @ 0.15% on 4333500 Cumulative RedeemablePreference Shares (Preference Shares) of Rs. 10.00 each for the year ended March 31 2017.The aggregate amount of the dividend on 4333500 Preference Shares is Rs. 78235/-including dividend distribution tax amounting to Rs. 13233/-.
Dividend on Equity Shares:
Your directors are unable to declare any dividend on the equity shares of the Companypursuant to the proviso under section 123(1) of the Companies Act 2013 as the carriedover previous losses are not set off against the profit of the current financial year.Accordingly the profit realized during the current financial year are proposed to beutilized to meet envisaged capital expenditure and repayment of outstanding debts of theCompany.
Transfer of Unclaimed Dividend to Investor Education and Protection Fund:
During the year 2016-17 unclaimed dividend for financial year 2008-09 of Rs. 7913/-was transferred to the Investor Education and Protection Fund (IEPF) as required underthe Investor Education and Protection Fund Authority (Accounting Audit Transfer andRefund) Rules 2016.
* Subsidiaries and Consolidated Financial Statements
The Company had prepared Consolidated Financial Statements in accordance with theGenerally Accepted Accounting Principles (GAAP). The Company has also presented financialstatements as per Schedule III of the Companies Act 2013. Except where otherwise statedthe accounting policies are consistently applied.
The Board reviewed the affairs of the Company's subsidiaries during the year at regularintervals. In accordance with section 129(3) of the Companies Act 2013 the Company hasprepared Consolidated Financial Statements of the Company and its subsidiary/Associatesand Joint Venture which form part of this Annual Report. A statement containing salientfeatures of the financial statements of the subsidiary companies in Form AOC-1 is providedas Annexure A which forms part of the Directors Report of the Company.
In accordance with third proviso to Section 136 of the Companies Act 2013 the AnnualReport of your Company containing inter alia the audited standalone and consolidatedfinancial statements as well as separate audited financial statements of subsidiary/Associates and Joint Venture Company have also been placed on the website of the Company.
* Listing Fees
The Equity Shares of your Company are listed and actively traded on the BSE Limited(BSE) and the National Stock Exchange of India Limited (NSE). The Company had paid AnnualListing fees to both the stock exchanges for the Financial Year 2017-18 within thestipulated time.
During the year under review there is no change in composition of Board of Directorsof the Company.
Mr. Manish Kiri Managing Director of the Company retires at the ensuing AnnualGeneral Meeting (AGM) and being eligible offers himself for re-appointment. A briefprofile of Mr. Manish Kiri as required under Regulation 36(3) of the SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 is annexed to the Notice ofAGM of the Company.
Declaration of Independent Directors
During the year under review all the Independent Directors have given theirdeclarations stating that they meet the criteria of independence as prescribed underSection 149(6) of the Companies Act 2013 and SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015. In the opinion of the Board they fulfill the conditionsof independence as specified in the Companies Act 2013 and Rules made thereunder.
Board Meetings as well as separate Meeting of Independent Directors:
During the year the Board met 6 (Six) times on April 08 2016 May 30 2016 August12 2016 October 04 2016 November 12 2016 and January 28 2017. The intervening gapbetween any two meetings was within the period prescribed by the Companies Act 2013.
Pursuant to the requirements of Schedule IV to the Companies Act 2013 and the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 a separate Meeting ofthe Independent Directors of the Company was held on March 30 2017.
The members of the Company at their 16th Annual General Meeting (AGM) heldon September 26 2014 has re-appointed M/s V. D. Shukla & Co. Chartered AccountantsStatutory auditors of the Company for conducting Audit of the Company to hold office fromconclusion of 16th AGM till the conclusion of 19th AGM of theCompany to be held in the year 2017 (subject to ratification of their appointment andremuneration by the members at every AGM).
The shareholders of the Company at their 18th AGM held on September 23 2016has ratified his reappointment for the period upto the conclusion of 19th AGMto be held in the year 2017. Due to expiration of present terms of existing auditors theCompany has required to appoint new statutory auditors in place of the existing Auditors.
Therefore on recommendation of the Audit Committee the Board of Directors at theirmeeting held on August 25 2017 has appointed M/s. Pramodkumar Dad & Associates (FirmRegistration No. 115869W) as Statutory Auditors for conducting statutory audit of booksof accounts of the Company for the period of 5 years from conclusion of 19thAGM till conclusion of 24th AGM to be held in year 2022 subject to theapproval of shareholders of the company at their 19th AGM.
M/s Pramodkumar Dad & Associates Chartered Accountants have given certificateunder section 141 of the Companies Act 2013 and confirmed their eligibility to the effectthat their appointment if made would be within the limits prescribed under the Act andthat they are not disqualified for appointment. The Board recommends their appointment asstatutory auditors of the Company.
Notes to the financial statements referred to in the Auditors' Report issued by M/s. V.D. Shukla & Co Chartered Accountants are self-explanatory and do not call for anyfurther comments and explanations. The Auditors' Report does not contain anyqualification reservation or adverse remark.
The Audit Committee of the Company at their meeting held on May 25 2017 hasrecommended to the Board of Directors for appointment and fixing of remuneration of M/s.V. H. Savaliya & Associates Cost Accountants for audit of cost records of theCompany for the financial year 2017-18. The Board of Directors of the Company at theirmeeting held on May 25 2017 has appointed M/s. V. H. Savaliya & Associates as CostAuditors subject to ratification by the members of the Company at the ensuing AnnualGeneral Meeting.
The Cost Audit Report for the financial year 2015-16 issued by M/s. V. H. Savaliya& Associates Cost Accountants as prescribed under Cost Audit Rules was filed withthe Ministry of Corporate Affairs on 3rd September 2016. The Cost Auditors'Report for the financial year 2015-16 did not contain any qualification reservation oradverse remark.
* Secretarial Auditors:
In compliance of the provision of section 204 of the Companies Act 2013 otherapplicable provisions of the Act the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 and other applicable rules framed there under (subjectto modification or reenactment thereof from time to time) the Board of Directors at theirmeeting held on August 12 2016 has appointed M/s Kashyap R. Mehta & AssociatesPracticing Company Secretary Ahmedabad as Secretarial Auditor for conducting SecretarialAudit of the Company for the year 2016-17. The secretarial audit report is attachedherewith as "Annexure - B".
Certain remarks in the secretarial audit report do not have material impact onfinancial performance of the Company. The views of the Management on each such remark aregiven hereunder:
1. Ownership of an agricultural land intended for industrial purpose will betransferred in the name of the company upon receiving necessary approval for conversioninto non agriculture land.
The land is acquired for future expansion of the Company. Since a Company cannot holdagriculture land it is initially acquired in the name of Chairman of the Company and thesame would be transferred in the name of the Company after its conversion into non-agriculture land.
2. During the year under review the Company redeemed the outstanding debentures inconsonance with its settlement agreement through internal accruals without depositing/maintaining the requisite amount in eligible instruments as specified under Rule 18(7)(c)of The Companies (Share Capital and Debentures) Rules 2014.
The Company had executed a settlement agreement with the sole debenture holder forredemption of outstanding principal amount and interest thereon. The company's cash flowwere adequate to meet settlement obligations and the entire outstanding principal amountof non-convertible debentures has been repaid out of internal accruals well before duedate of payment. As on March 31 2017 there are no outstanding debentures on books of theCompany.
3. In respect of preferential issue of Equity Warrants during the year under reviewthe company deposited the funds in its regular current bank account and did not filestatement of deviation(s) or variation(s) with the Stock Exchanges as there was nodeviation or variation in respect of the proposed utilization of funds and actualutilization of funds.
As per objects of the issue warrants proceeds were to be used for repayment of debtsand capital expenditure. The proposed allotte was ready to pay the entire warrant amountupfront and the company wanted to urgently repay its settled debts. Therefore theapplication money was received in regular account and since there is no deviation inutilisation of funds quations of submission of statement of deviation did not arise.
* Details in respect of frauds reported by Auditors other than those which arereportable to the Central Government:
The Statutory Auditors Cost Auditors or Secretarial Auditors of the Company have notreported any frauds to the Audit Committee or to the Board of Directors as prescribedunder Section 143(12) of the Companies Act 2013 including rules made thereunder.
* Governance Through Management process:
Your Company has adopted process for receiving and redressing complaints from employeesand Directors as per the provisions of Section 177 of the Companies Act 2013 ("theAct") and Regulation 22 of the Listing Regulations.
Your Company is committed to adhere to the highest standards of ethical moral andlegal conduct of business operations. To maintain these standards your company encouragesits employees who have concerns about suspected misconduct to come forward and expressthese concerns without fear of punishment or unfair treatment. A Vigil (Whistle Blower)mechanism provides a channel to the employees and Directors to report to the managementconcerns about unethical behavior actual or suspected fraud or violation of the codes ofconduct or policy. The vigil mechanism shall provide adequate safeguards againstvictimization of person(s) who use such mechanism and make provision for direct access tothe Chairman of the Audit Committee or in exceptional case to the director nominated bythe Audit Committee. As per provisions of Section 177 of the Act the whistle blowerpolicy (vigil mechanism) is available on the website of the company i.e. www.kiriindustries.com.
Related Party Transactions:
Your Company has adopted the practice of undertaking related party transactions only inthe ordinary and normal course of business and at arm's length basis as part of itsphilosophy of adhering to highest ethical business standards transparency andaccountability. In line with the provisions of the Companies Act 2013 and the ListingRegulations the Board has approved a policy on related party transactions. An abridgedpolicy on related party transactions is available on the website of the Company i.e. www.kiriindustries.com.
All contracts / arrangements / transactions entered by the Company during the financialyear 2016-17 with related parties were in the ordinary course of business and on an arm'slength basis. Therefore disclosure in form AOC-2 as per provisions of section 188 of theCompanies Act is not required and hence not annexed with this report.
Website Content Archival Policy
Your Company has also implemented website content archival policy in accordance withRegulation 30 SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 todeals with the retention and archival of corporate records of the company after completionof five years from the date of disclosure or event the same is also available on thewebsite of the Company i.e. www.kiriindustries.com .
Policy on Preservation of Documents:
Your Company has implemented Policy on preservation of documents as per therequirements under regulation 9 of the Listing Regulations. The Board has formulated andapproved a policy to ensure that all the statutory documents / records are preserved incompliance with respective laws to ensure that the same are available in good order and toprevent from being altered damaged or destroyed and also readily available as and whenrequired by the Company. The said policy is available on the website of the Company i.e. www.kiriindustries.com.
Material Subsidiaries Policy:
Your Company has also implemented Material Subsidiary Policy as per the requirementsunder regulation 16 of the Listing Regulations for determining the material subsidiariesand material non-listed Indian subsidiaries of the Company and to provide the governanceframework for them. The said policy available on the website of the Company i.e. www.kiriindustries.com.
Code of Conduct :
In terms of provisions of SEBI (LODR) Regulations 2015 the Board of Directors of theCompany has laid down a Code of Conduct for all Board Members and Senior ManagementPersonnel of the Company. The Code is intended to serve as a basis for ethicaldecision-making in conduct of professional work. The Code of Conduct direct eachindividual in the organization must know and respect existing laws accept and provideappropriate professional views and be honest in his conduct and observe corporatediscipline. The duties of Directors including Independent Director as laid down in theCompanies Act 2013 also forms part of the Code of Conduct. The said Code of Conduct hasbeen posted on the website of the Company. i.e. www.kiriindustries.com .
The Board Members and Senior Management Personnel of the Company have affirmedcompliance with the Code. The Chairman & Managing Director of the Company has given adeclaration to the Company that all the Board Members and Senior Management Personnel ofthe Company have affirmed compliance with the Code.
Code for Prevention of Insider Trading:
The Company has adopted a Code of Conduct to regulate monitor and report trading byinsiders under the SEBI (Prohibition of Insider Trading) Regulations 2015. This Code ofConduct also includes code for practices and procedures for fair disclosure of unpublishedprice sensitive information. It is available on the website of the Company i.e. www.kiriindustries.com.
Mechanism for Prevention of Sexual Harassment of Women at Workplace under(Prevention Prohibition and Redressal) Act 2013:
The Company has implemented policy to provide protection against sexual harassment ofwomen at work place and for the prevention and Redressal of complaints of sexualharassment and for matters connected therewith or incidental thereto. The said policy isavailable on the website of the Company i.e. www.kiriindustries.com .
Your Directors declared and confirm that during the year under review there is nocase filed under Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
* Public Deposits:
During the year under review the Company has not accepted any deposits from publicwithin the meaning of provisions of Section 73 of the Companies Act 2013 and otherapplicable provisions of the Act the Companies (Acceptance of Deposits by Companies)Rules 2014 and other applicable rules framed there under (subject to modification orre-enactment thereof from time to time).
* Changes In Capital Structure:
Allotment of Equity Shares:
During the year under review the Board of Directors of the Company at their meetingheld on April 08 2016 has allotted 1294000 Equity Shares upon conversion of warrantsissued on preferential basis to Mrs. Anupama Kiri Promoter Group of Company. Thereforeissued and paid up equity share capital has been increased from Rs. 26.55 Crore to Rs.27.84 Crore.
The Board of Directors of the Company at their meeting held on October 4 2016 havegiven approval for allotment of 3500000 Warrants convertible into Equity Shares at anissue price of Rs. 363 per Warrant includes premium of Rs. 353 per Warrant to M/sEquinaire Chemtech LLP - Promoter Group on preferential basis in accordance with SEBI(Issue of Capital and Disclosure Requirements) Regulations 2009. The said issue wasapproved by the members of the Company at its 18th Annual General Meeting heldon September 23 2016. The Company has also received the in-principle approvals from bothStock Exchanges.
During the year under review the Company has not issued shares with differentialvoting rights and sweat equity shares. Redemption of Non Convertible Debentures (NCDs):
During the year under review the Company has redeemed entire outstanding 335Non-Convertible Debentures ("NCDs") along with interest.
* Employee Stock Option Scheme
Brief Details of Options Granted:
Nomination and Remuneration Committee of the Company inter alia administers andmonitors the Company's employees' stock option scheme (ESOP Scheme) in accordance with theapplicable SEBI Regulations and has granted total 875000 options in financial year2015-16. Further remaining 125000 options were granted to the eligible employees onApril 8 2016.
During the year ended March 31 2017 there has been no material change in the Company'sexisting ESOP Scheme and the said scheme is in compliance with the applicable SEBIRegulations.
In compliance with the provisions of Companies Act 2013 as well as SEBI Regulationsnecessary disclosure as on March 31 2017 is mentioned herein below:.
|Whether the scheme is in terms of SEBI (SBEB) Regulations 2014 (if applicable) ||The Company has implemented the Kiri ESOP Scheme in year 2014 in accordance with the SEBI (ESOS and ESOP) Guidelines 1999. |
|Total number of shares covered by these options ||1000000 Shares covered under this ESOP Scheme. |
|Pricing formula ||Rs. 35/- per equity share. |
|Options granted ||During the year 125000 options granted to the eligible employees. |
|Time within which option may be exercised ||Options granted to the eligible employees shall be exercised 20% every year. |
|Options Vested ||875000 |
|Options exercised ||During the year total 175000 options were exercised by the eligible employees of the Company. |
|The total Number of Shares arising as a result of exercised of option ||During the year total 175000 options were exercised by the eligible employees of the Company therefore total 175000 equity shares transferred by Kiri ESOP Trust to such employees who has exercised their options. |
|Options lapsed ||Nil |
|The exercised Price ||Rs. 35/- per equity share. |
|Variation of terms of options ||No variations made in the terms of the options granted under Kiri Employee Stock Option Scheme - 2014. |
|Money realized by exercised of options ||Total Rs. 0.61 Crore were realised on account of exercise of options. |
|Brief details of significant terms || |
|Subsequent changes or cancellation or exercise of such options ||No Changes is made for cancelation or exercise of such options. |
|Diluted earnings per share pursuant to issue of equity shares on exercise of options ||Since the Company has already issued equity shares to Kiri ESOP Trust on August 7 2015therefore there is no further effect on earnings per share of the company pursuant to exercise of options. |
|Total number of options in force ||825000 |
|Employee wise details of options granted || |
|i) Key Managerial Personnel ||Total 1000000 options were granted to the eligible employees under Kiri ESOP Scheme. |
|ii) any other employee who receives a grant of options in any one year of option amounting to five percent or more of options granted during that year ||Nil |
|(iii) identified employees who were granted option during any one year equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant ||Nil |
The following is the information for Kiri ESOP Scheme upto the date of this report:
|Total No of Options Granted || |
Total No of Options Vested
Total No of Options exercised
|No. of Options ||Date ||No. of Options ||Date ||No. of Options ||Date |
|875000 ||April 07 2015 ||875000 ||April 08 2016 ||175000 ||May 12 2016 |
|125000 ||April 08 2016 ||125000 ||May 25 2017 ||25000 ||June 07 and June 08 2017 |
|- ||- ||- ||- ||175000 ||June 07 and June 08 2017 |
|Total Options already exercised || || || ||375000 || |
|Total ESOPs in force || || || ||625000 || |
The Company has received a certificate from the statutory auditors that the scheme hasbeen implemented in accordance with the SEBI Regulations and the resolutions passed by theshareholders. The certificate would be placed at the AGM for inspection by the members.
The disclosures pursuant to regulation 14 of the SEBI (Share Based Employee Benefits)Regulations 2014 read with SEBI circular (Ref. No: CIR/CFD/POLICY CELL/2/2015 dated June16 2015 on ESOP disclosures for the financial year 2016-17 is available on website of theCompany i.e. www.kiriindustries.com .
* Directors Responsibility Statement:
Pursuant to the provisions of Section 134 (5) of the Companies Act 2013 with respectto Directors' Responsibility Statement
it is hereby confirmed that:
a) in the preparation of the annual accounts for the year ended March 31 2017 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;
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 and ofthe profit 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 the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors had prepared the annual accounts for the year ended March 31 2017 ona 'going concern' basis;
e) they have laid down internal financial controls to be followed by the Company andsuch internal financial controls are adequate and operating effectively;
f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
* Composition of Committees:
Currently the board has Five Committees: Audit Committee Nomination and RemunerationCommittee Corporate Social
Responsibility Committee Stakeholders Relationship Committee and Risk ManagementCommittee.
As required under section 177 (8) of the Companies Act 2013 and SEBI (LODR)Regulations 2015 the composition of the
Audit Committee is mentioned herein below:
|Name of Member ||Designation |
|Mr. Keyoor Bakshi ||Chairman to the Committee |
|Mr. Manish Kiri ||Member |
|Mr. Mukesh Desai ||Member |
|Mrs. Veena Padia ||Member |
A detailed note on the composition of the board and other committees is provided in thecorporate governance report which is forming part of this annual report.
* Corporate Social Responsibility:
Your Company has always been committed to the cause of social service and hasrepeatedly channelized its resources and activities which positively affects the societysocially ethically and also environmentally. Your Company has taken up various CorporateSocial Responsibility ("CSR") initiatives and enhanced value in the society.
In compliance with the provisions of Section 135 of the Companies Act 2013 yourCompany has constituted a Corporate Social Responsibility (CSR) Committee. Your Companyhas formulated CSR Policy which encompasses its philosophy and guides its sustainedefforts for undertaking and supporting socially useful programs for the welfare &sustainable development of the society.
In compliance of Section 135 of the Companies Act 2013 the Company in every financialyear at least 2% of average net profit of last three years has been utilized towards CSRactivities. Our Company has incurred loss in two financial year i.e. 2013-14 2014-15 andgenerated profit in F.Y. 2015-16 and therefore the net profit calculated by the Companyin accordance with Section 198 of the Act is not triggering the criteria for mandatorycontribution for CSR. However the Company has taken
up various CSR initiatives for enhancing the value of society. The brief outline forcontributions undertaken by the Company on CSR activities during the year are set out in AnnexureC of this report. For other details regarding the CSR Committee please refer to thecorporate governance report.
The CSR policy is available on the website of the Company i.e. www.kiriindustries.com.
* Nomination and Remuneration Policy of Directors Key Managerial Personnel and OtherEmployees
As prescribed under section 178 of the Companies Act 2013 ("the Act") yourCompany has adopted Nomination and Remuneration policy of Directors appointment andremuneration including criteria for determining qualifications positive attributesindependence of a Director and the same is available on the website of the Company i.e. www.kiriindustries.com. The relevant information as per Regulation 19 of the SEBI (LODR) Regulations 2015is available in the Corporate Governance report.
* Manner of Evaluation of Board Its Committees and Individual Directors:
In line with the corporate governance practice of the Company annual performanceevaluation was conducted for all Board Members as well as the working of the Board and itsCommittees. This evaluation was led by the Chairman of the Board Nomination andRemuneration Committee with specific focus on the performance and effective functioning ofthe Board.
The Board evaluation framework has been designed in compliance with the requirementsunder the Companies Act 2013 and the Listing Regulations and in consonance with guidancenote on Board Evaluation issued by SEBI recently. The Board evaluation was conductedthrough structured questionnaire having qualitative parameters and feedback based onratings evaluation of the Board based on criteria such as composition and role of theBoard Board communication and relationships functioning of Board Committees review ofperformance and compensation to executive directors etc.
Evaluation of Directors was based on criteria such as participation and contribution inBoard and Committee meetings representation of shareholder interest and enhancingshareholder value experience and expertise to provide feedback and guidance to topmanagement on business strategy governance and risk understanding of the organization'sstrategy risk and environment etc. The outcome of the Board evaluation for financialyear 2016-17 was took on records by the Nomination and Remuneration Committee on March 302017. The evaluation of the performance of the Board as whole individual directors(including independent directors and Chairperson) and various Committees of the Board wasnoted by board at their meeting held on May 25 2017. The Directors expressed theirsatisfactions with the evaluation process.
* Familiarisation Programme:
The Company has undertaken various steps to make the Independent Directors completeunderstanding about the Company. The Managing Director or Chairman of the Company givesinformation about general business of the Company in every board meeting. The details ofsuch familiarization programmes have been disclosed on the Company's website i.e. www.kiriindustries.com.
* Particulars of Loans given Investments made Guarantees given and Securitiesprovided:
Particulars of loans given investments made guarantees given and securities providedalong with the purpose for which the loan or guarantee or security is proposed to beutilized by the recipient are provided in notes to the financial statement of the Companyfor the year ended March 31 2017.
* Extract of Annual Return:
In accordance with Section 134(3)(a) of the Companies Act 2013 an extract of theannual return is annexed to this report as "Annexure D".
* Conservation of energy research and development technology absorptions and foreignexchange earnings and outgo:
The relevant information on conservation of energy technology absorption foreignexchange earnings & outgo as required to be disclosed in term of Section 134(3)(m) ofthe Companies Act 2013 together with the Companies (Accounts of Companies) Rules 2014 isannexed to this report as "Annexure E".
* Risk Management:
The board of directors of the Company has formed a risk management committee to frameimplement and monitor the risk management plan for the Company. The committee isresponsible for reviewing the risk management plan and ensuring its effectiveness. Theaudit committee has additional oversight in the area of financial risks and controls.Major risks identified by the businesses and functions are systematically addressedthrough mitigating actions on a continuing basis.
The Risk Management policy of the Company is available on website of the Company www.kiriindustries.com.
* Particulars of Employees:
A Statement pursuant to section 197 read with Rule 5 of Companies (Appointment &Remuneration of Managerial Personnel) Rules 2014 have been attached hereto as "AnnexureF".
* Corporate Governance & Management Discussion and Analysis Report:
As prescribed under Regulation 34 (3) read with Schedule V of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 a separate section oncorporate governance practices implemented by the Company along with the ComplianceCertificate from the Statutory Auditors regarding compliance of conditions of corporategovernance as stipulated in SEBI (LODR) Regulations 2015 is attached to this Annualreport.
The Management Discussion and Analysis Report on the Industry and business operationsof the Company as required under SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is provided in a separate section and forms an integral part of thisReport.
* Significant and Material orders passed by the Regulators or Courts:
There are no significant and material orders passed by the Regulators/Courts that willimpact the going concern status of the Company and its future business operations of theCompany.
* Material Changes:
There have been no material changes in nature of business and commitments affecting thefinancial position of the Company since the close of financial year i.e. March 31 2017.
* Disclosure under Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013:
Your Directors declared and confirm that during the year under review no case filedunder Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013.
Your Directors places on record their appreciation for the continued co-operation andsupport extended to the Company by its customers the vendors the regulators governmentagencies stock exchanges depositories registrar and transfer agent auditors legaladvisors consultants business associates and other stakeholders. Your directors alsoplace on record appreciation of the contribution made by the employees at all levelswhose hard work co-operation and support helped us to face all challenges and deliverresults.
| ||For and on behalf of Board of Directors |
|Date : August 25 2017 ||Pravin Kiri |
|Place : Ahmedabad ||Chairman |