To the Members of
KMF Builders and Developers Limited
Your Directors have pleasure in presenting the 22* Annual Report together with theaudited statement of accounts for the financial year ended 3 1s* March 2017
1. FINANCIAL RESULTS
|PARTICULARS ||(Fig in Rs.) ||(Fig in Rs.) |
| ||2016-17 ||2015-2016 |
|Income ||23760370.56 ||56273512 |
|Expenses ||18728446.87 ||49489598 |
|Profit [before financial charges depreciation and tax) ||5031923 ||6783913 |
|Net Finance Expense/(Income) ||(1481.27) ||53553 |
|Depreciation and amortization Expenses ||1292435 ||1195766 |
|Profit before tax ||3740969 ||5534594 |
|Tax Expense ||1321898 ||1526123 |
|Net Profit for the year ||2419071.96 ||4008471 |
2. FUTURE OUTLOOK
The sector witnessed a visible temporary slowdown since the announcement of thegovernment demonetization policy. Real estate development is on high and it is attractingthe focus of the industry towards construction. Our running projects are ResidentialApartments "Gokul Dham" at Mathura and "Purab Manor" at Bangalore.Yours Directors are quite hopeful for the success of both the projects as well and willearn excellent earning out of it.
Your Directors do not recommend any dividend for the Financial Year 2016-2017.
4. TRANSFER TO RESERVES
The Company has not transferred any amount to the Reserves for the Financial Year2016-2017.
5. TRANSFER OF UNPAID AND UNCLAIMED AMOUNT TO IEPF
Pursuant to the provisions of Section 124(5) ofthe Companies Act 2013 dividend andRefund of Share application Money due for refund which remains unpaid or unclaimed for aperiod of seven years from the date of its transfer to unpaid dividend/ unclaimed accountis required to be transferred by the Company to Investor Education and Protection Fund(IEPF) established by the Central Government under the provisions of Section 125 of theCompanies Act 2013. During the year no amount was due for transfer to IEPF.
6. CHANGES IN THE NATURE OF BUSINESS
There has been no change in the nature of the business of the Company during theFinancial Year 2016-2017.
7. MATERIAL CHANGES AND COMMITMENTS
There were no material changes and commitments that occurred subsequent to the end ofthe financial year till the date of this report which affects the financial position ofthe Company.
8. CHANGE IN SHARE CAPITAL
There is no change in share capital structure of the Company during the financial Year2016-2017.
9. HUMAN RESOURCES DEVELOPMENT
The Company has continuously adopted structures that help attract best external talentand promote internal talent to higher roles and responsibilities. KMF's people centricfocus providing an open work environment fostering continuous improvement and developmenthelped several employees realize their career aspirations during the year.
Company's Health and Safety Policy commits to provide a healthy and safe workenvironment to all employees. The Company's progressive workforce policies and benefitsvarious employee engagement And welfare initiatives have addressed stress managementpromoted work life balance.
10. SUBSIDIARY COMPANIES
The Company does not have any Subsidiary Company.
11. CORPORATE GOVERNANCE REPORT
The Company is committed to observe good corporate governance practices. The report onCorporate Governance for the financial year ended March 31 2017 as per regulation 34(3)read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 forms a part of this Annual Report. The requisite Certificate from theStatutory Auditors of the Company confirming compliance with the conditions of CorporateGovernance is annexed to this Report.
12. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis forms a part of this annual report and is annexed tothis report.
13. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 134(5) the Act and based on the representationsreceived from the management the directors hereby confirm that:
i. In the preparation of the annual accounts for the financial year 2016-17 theapplicable accounting standards have been followed and there are no material departures;
ii. They have selected such accounting policies and applied them consistently and madejudgments_and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitof the Company for the financial year;
iii. They have taken proper and sufficient care to the best of their knowledge andability for the maintenance of adequate accounting records in accordance with theprovisions of the Act They Confirm that there are adequate systems and controls forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
iv. They have prepared the annual accounts on a going concern basis;
v. They have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and operating properly and
vi. They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
14. AUDITORS STATUTORY AUDITORS
Pursuant to Section 139 of the Act and the Rules made thereunder it is mandatory torotate the statutory auditors on completion of two terms of five consecutive years. Therules also lay down the transitional period that can be served by the existing auditorsdepending on the number of consecutive years for which an audit firm has been functioningas auditor in the same company. The incumbent auditors M/s B Sreenivasa & Co.Chartered Accountants (Firm Registration No. 009287S) have served the Company for over 10years before the Act was notified and will be completing the maximum number oftransitional period (three years) at the ensuring 22nd AGM.
The audit committee of the Company has proposed and on August 14 2017 the Board hasrecommended the appointment M/s C S Nagendra & Co. Firm of Chartered Accountants (FRN009486S) as the statutory auditors of the Company. M/s C S Nagendra & Co will holdoffice for a period of five years consecutive years from the conclusion of the 22nd AnnualGeneral Meeting of the Company till the conclusion of the 27th Annual General Meeting tobe held in 2022. The first year of audit will be financial statements for the year endingMarch 2018 which will include the audit of the quarterly financial statements for theyear.
Pursuant to provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. Deepak Sadhu a firm of Company Secretaries in practice to undertake theSecretarial Audit of the Company. The Secretarial Audit Report ofthe Company for theFinancial Year 2016-17is annexed to this Report.
The Company has appointed Mrs. Poonam Sharma wife of Mr. Atul Sharma as InternalAuditor of the Company for the Financial Year 2016-2017.
15. AUDITOR'S AND SECRETARIAL AUDITOR'S REPORT
There are no disqualifications reservations or adverse remarks or disclaimers in theAuditors and Secretarial Auditors Report.
16. BOARD'S RESPONSE ON THE REMARKS MADE BY STATUTORY AUDITORS AND SECRETARIAL AUDITORS
There were no qualifications reservations and adverse remarks made by the statutoryauditors in their Audit Report and by the Company Secretary in practice in theirSecretarial Audit report.
17. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
The particulars as prescribed under Rule 8(3) of the Companies (Accounts) Rules 2014are set out in an Annexure-1 to this Report.
18. EXTRACT OF ANNUAL RETURN
The extract of Annual Return as provided under Sub-Section (3) of Section 92 of theCompanies Act 2013 (the "Act") is enclosed at Annexure-2 in the prescribed formMGT-9 and forms part of this Report.
19. DEPOSIT FROM PUBLIC
The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet.
20. DETAILS OF DIRECTORS OR KMPS APPOINTMENT OR RESIGNATION DURING THE YEAR
Mr. Aniruddh Singh was appointed as an Additional Director in the capacity ofIndependent Director in the meeting of Board of Directors of the Company effective from27'* February 2017 and who shall hold office only upto the date of ensuing Annual GeneralMeeting and is eligible for appointment as Director.
Mr. Pradeep Kumar Malik was appointed as Whole-time Director in the meeting of Board ofDirectors of the Company effective from 01s1 April 2017 for a period of oneyear and his appointment is subject to the approval of shareholders.
Ms. Priyanka Behl was appointed as Company Secretary & Compliance Officer in themeeting of Board of Director ofthe effective company from 12" September 2016.
The Board recommends their appointments and accordingly resolutions seeking approval ofthe members for their appointment have been included in the Notice of forthcoming AnnualGeneral Meeting of the Company.
During the year Mrs. Megha Bata give her resignation from the post of CompanySecretary w.e.f 1st September2016 and Mr. Ravinder Kumar Sharma Director resigned fromthe Board ofthe Company effective from 01st December 2016.
Mr. Kavita Chadha Director retires by rotation and being eligible has offeredherself for re-appointment The Board recommends the same for your approval.
The brief resume of the Directors seeking appointment/reappointment in the forthcomingAnnual General Meeting in Pursuance of Regulation 36(3] of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 is annexed to the Annual General MeetingNotice.
21. DECLARATION BY INDEPENDENT DIRECTORS
The Company has received the necessary declaration from each Independent Director inaccordance with Section 149(7] of the Companies Act 2013 that he/she met the criteria ofindependence as laid out in sub-section (6) of Section 149 of the Companies Act 2013 andthe Regulation 16(1)(B] of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
22. BOARD DIVERSITY
A diverse Board enables efficient functioning through differences in perspective andskill and also fosters differentiated thought processes at the back of varied industrialand management expertise gender knowledge and geographical background. The Boardrecognises the importance of a diverse composition and has adopted a Board DiversityPolicy which sets out the approach to diversity.
23. BOARD EVALUATION
The performance evaluation of the Board its Committees and individual directors wasconducted and the same was based on questionnaire and feedback from all the Directors onthe Board as a whole Committees and self-evaluation. Directors who were designated heldseparate discussions with each of the Directors of the Company and obtained their feedbackon overall Board effectiveness as well as each of the other Directors.
Based on the questionnaire and feedback the performance of every director wasevaluated in the meeting of the Nomination and Remuneration Committee (NRC).
A separate meeting of the independent directors ("Annual ID meeting") wasconvened which reviewed the performance of the Board (as a whole) the non-independentdirectors and the Chairman. Post the Annual ID meeting the collective feedback of each ofthe Independent Directors was discussed by the Chairman of the NRC with the Board'sChairman covering performance of the Board as a whole; performance of the non-independentdirectors and performance of the Board Chairman.
Some of the key criteria for performance evaluation are as follows - Performanceevaluation of Directors:
Attendance at Board or Committee meetings
Contribution at Board or Committee meetings
Guidance/support to management outside Board/Committee meetings Performanceevaluation of Board and Committees:
Degree of fulfilment of key responsibilities
Board Structure and composition
Effectiveness of Board Processes information and functioning
Board culture and dynamics
Quality of relationship between Board and Management
Efficacy of communication with external stakeholders
24. MEETINGS OF THE BOARD
A calendar of Meetings is prepared and circulated in advance to the Directors. TheBoard met seven times during the financial year the details of which are given in theCorporate Governance Report which is annexed and forms a part of this report. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015.
25. COMPOSITION OF AUDIT COMMITTEE
The Audit Committee of the Company comprises of Independent and Executive members. Mr.Ravinder Kumar Sharma gives his resignation w.e.f 01.12.2016 the current members of thecommittee are Mr. Shyam Sunder Mittra Chairman Mr. Chirag Salaria Mr. Aniruddh Singh andMr. Pradeep Kumar MalikThe Board has accepted all recommendations made by the AuditCommittee during the year.
The composition and other relevant details of other board level committees i.e.Nomination and Remuneration Committee and Stakeholders Relationship Committee aredisclosed separately in the Corporate Governance Report which is annexed to and forms apart of this Report.
26. CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT
The Directors and members of Senior Management have affirmed compliance with the Codeof Conduct for Directors and Senior Management of the Company. A declaration to thiseffect has been signed by Mr. Gorve Chadha Managing Director and forms part of the AnnualReport.
27. PREVENTION OF INSIDER TRADING
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and designated employees of theCompany. The Code requires pre-clearance for dealing in the Company's shares and prohibitsthe purchase or sale of Company shares by the Directors and the designated employees whilein possession of unpublished price sensitive information in relation to the Company andduring the period when the Trading Window is closed. The Board is responsible forimplementation of the Code.
All Board Directors and the designated employees have confirmed compliance with theCode.
28. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
The details of loans guarantees and investments covered under the provisions ofSection 186 of the Companies Act 2013 are given in the notes to the financial statement.
29. TRANSACTIONS WITH RELATED PARTIES
All contracts/arrangements/transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis. Thus the provisions of Section 188(1) ofthe Companies Act 2013 are notapplicable. During the year the Company has not entered into anycontract/arrangement/transaction of material nature with any of the related parties whichare in conflict with the interest of the Company. Related party disclosures are given inthe notes to the financial statement.
30. SIGNIFICANT AND MATERIAL ORDERS BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTINGTHE COMPANY'S GOING CONCERN STATUS AND OPERATIONS IN FUTURE
During the period under review no significant and material orders passed by theregulators or courts or tribunals impacting the going concern status and Company'soperations in the future.
31. ADEQUACY OF INTERNAL FINANCIAL CONTROL
The Company had laid down guidelines policies procedures and structure to enableimplementation of appropriate internal financial controls across the Company. Thesecontrol processes enable and ensure the orderly and efficient conduct of company'sbusiness including safeguarding of assets prevention and detection of frauds and errorsthe accuracy and completeness of the accounting records and timely preparation &disclosure of financial statements.
There are control processes both on manual and IT applications wherein thetransactions were approved and recorded. Review and control mechanisms are built in toensure that such control systems are adequate and operating effectively.
32. RISK MANAGEMENT
The Risk Management is overseen by the Audit Committee of the Company on a continuousbasis. The Committee oversees Company's process and policies for determining risktolerance and review management's measurement and comparison of overall risk tolerance toestablished levels. Major risks identified by the businesses and functions aresystematically addressed through mitigating actions on a continuous basis. For detailsplease refer to the Management Discussion and Analysis report which form part of the BoardReport.
33. FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS
The Company has practice of conducting familiarization program of the independentdirectors as detailed in the Corporate Governance Report which forms part of the AnnualReport
34. DISCLOSURE ON THE NOMINATION AND REMUNERATION POLICY OF THE COMPANY PURSUANT TOSECTION 134(3) (e) AND SECTION 178 (3)
The policy of the Company on Director's appointment and remuneration includingcriteria for determining qualifications independence and other matters as provided undersubsection (3) of Section 178 of the Companies Act 2013 forms part of this Annual Report.
35. VIGIL MECHANISM
The Company has established a vigil mechanism for Directors and employees to reporttheir genuine concerns. For details please refer to the Corporate Governance Reportattached to this Report
36. DISCLOSURE UNDER SECTION 22 OF THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
The Company's policy on prevention of sexual harassment of women provides for theprotection of women employees at the workplace and for prevention and redressal of suchcomplaints. There were no complaints pending for the redressal at the beginning of theyear and no complaints received during the financial year.
37. PARTICULARS OF EMPLOYEES
The information required under the provisions of Rules 5(2) & 5(3) of the Companies(Appointment & Remuneration of Managerial Personnel) Rules 2014 are not applicable tothe Company as there was no Personnel who was in receipt of remuneration aggregating toRs. 6000000/- per annum if employed throughout the financial year and Rs. 500000/- permonth if employed for a part of financial year.
38. PARTICULARS OF REMUNERATION
The information required under Section 197(12) of the Act and the Rules madethere-under in respect of employees of the Company is follows:-
(a) ratio of the remuneration of each director to the median remuneration of theemployees of the company for the financial year;
|s. No ||Name ||Designation ||CTC ||(Amount in Rs.) Median Employee salary ||Ratio |
|1. ||Gorve Chadha ||Managing Director ||225000 ||252500 ||0.89:1 |
|2. ||Pradeep Kumar Malik ||Whole Time Director ||385000 ||252500 ||1.52:1 |
(b) the percentage increase in remuneration of each Director Chief Executive OfficerChief Financial Officer Company Secretary or Manager if any in the financial year;-.
There is 12% average increase in the remuneration of Company Secretary.
(c) the percentage increase in the median remuneration of employees in the financialyear -
There was average increase in the median remuneration of employees in the financialyear.
(d) the number of permanent employees on the rolls of company:
There were 9 permanent employees on the rolls of Company as on March 312017
(e) the explanation on the relationship between average increase in remuneration andcompany performance;-
There is average increase (12%) in the remuneration of employees in the last financialyear.
(f) comparison of the remuneration of the Key Managerial Personnel against theperformance of the company;
|Remuneration of Key Managerial Personnel (KMP) during financial year 2016-2017 (aggregated) ||890000 |
|Revenue from operations ||23760370.56 |
|Remuneration (as % of revenue) ||3.74% |
|Profit before tax (PBT) ||3740969.96 |
|Remuneration (as % of PBT) ||23.79% |
(g) variations in the market capitalisation of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year and percentageincrease over decrease in the market quotations of the shares of the Company in comparisonto the rate at which the Company came out with the last public offer in case of listedcompanies and in case of unlisted companies the variations in the net worth of theCompany as at the close of the current financial year and previous financial year; -
|Particulars ||Unit ||As at 31st Mar 17 ||As at 31st Mar 16 ||Variation |
|Closing rate of share at BSE ||Rs. ||4.78 ||3.53 ||26.15% |
|EPS [Consolidated] ||Rs. ||0.20 ||.33 ||0.39 |
|Market Capitalization ||Rs. ||58229960 ||43002460 ||15227500 |
(h) average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration -
There is average increase in salaries of employees in 2016-2017. There is 12%percentage increase in the salary of Company secretary in the managerial remuneration forthe financial year.
(i) Comparison of each remuneration of the Key Managerial Personnel against theperformance of the Company
|Particulars ||Managing Director ||Chief Financial Officer ||Company Secretary |
|Remuneration ||300000 ||385000 ||280000 |
|Revenue ||23760370.56 ||23760370.56 ||23760370.56 |
|Remuneration (as % of revenue) ||12 ||1.62 ||1.17 |
|Profits before tax (PBT) ||3740969.96 ||3740969.96 ||3740969.96 |
|Remuneration (as % of PBT) ||8.01 ||10.29 ||7.4 |
(j) The key parameters for any variable component of remuneration availed by thedirectors;
There is no variable component in the remuneration availed by the Directors.
(k) The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year;
The Chief Financial Officer is the highest paid Director. No employee receivedremuneration higher than the Chief Financial Officer.
(l) Affirmation that the remuneration is as per the remuneration policy of the Company
It is hereby affirmed that the remuneration paid during the Financial Year ended 31stMarch 2017 is as per the Remuneration Policy of the Company.
39. PECUNIARY RELATIONSHIP OR TRANSACTIONS OF NON-EXECUTIVE DIRECTORS
During the year the Non-Executive Directors of the Company had no pecuniaryrelationship or transactions with the Company.
The Equity shares of your company were listed at Bombay Stock Exchange Limited andDelhi Stock Exchange Limited. However the Delhi Stock Exchange Limited has beende-recognized as a Stock Exchange during the year so presently the Company is listed onBombay Stock Exchange Limited only. The Company has paid listing fees to the Bombay StockExchange for the year 2017-2018.
41. STATUTORY DISCLOSURES
None of the Directors of your Company are disqualified as per provisions of Section164(2) of the Companies Act 2013. Your Directors have made necessary disclosures asrequired under various provisions of the Companies Act 2013 and SEBI (LODR) Regulations2015.
The Directors wish to convey their appreciation to business associates for theirsupport and contribution during the year. The Directors would also like to thank theemployees shareholders customers suppliers alliance partners and bankers for thecontinued support given by them to the Company and their confidence reposed in themanagement
| ||By order of the Board of Directors |
|Place: Bangalore ||Gorve Chadha |
|Dated: 14.08.2017 ||[Chairman & Managing Director) |
| ||DIN: 06407884 |
| ||Add: - 1008 Vikram Tower |
| ||Rajendera Place Delhi-110008 |
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars as prescribed under Rule 8(3) of the Companies (Accounts) Rules 2014are as follows:
A. CONSERVATION OF ENERGY
Your Company being a real estate company Form A for Conservation of Energy is notapplicable to it.
B. TECHNOLOGY ABSORPTION
No such activity has taken place during the year under review.
|C. FOREIGN EXCHANGE EARNING & OUTGO ||Fig in Rs. |
|Total foreign exchange earnings ||NIL |
|Total foreign exchange outgo ||NIL |
The Company is not involved in any type of activity hazardous to environment and doesnot discharge any trade effluents (solid liquid or gaseous) causing pollution.