The Members of KABSONS INDUSTRIES LIMITED
Your Directors have pleasure in presenting the Twenty Sixth Annual Report of theCompany together with the Audited Accounts for the year ended 31 March 2018.
|Financial Results: || ||(Rs.in Lakhs) |
| ||Year Ended 31.03.2018 ||Year Ended 31.03.2017 |
|1 Sales Other Income & Exceptional items ||797.69 ||791.36 |
|2 Profit before Interest and Depreciation ||129.96 ||415.68 |
|3 Finance costs ||7.10 ||6.09 |
|4 Depreciation ||14.58 ||10.10 |
|5 Profit after Financial Costs and Depreciation ||108.28 ||399.49 |
Discussion on Financial Performance:
During the year under consideration the Company's has generated profit of Rs.129.96Lakhs before Finance costs and depreciation as against a profit of Rs. 415.68 Lakhs duringthe previous year which includes lease income and lease income is the major source ofrevenue to the Company. Your Directors are hopeful of better performance with increasedrevenue in the next year.
The Company has been focusing on Lease income and as per demand of a new factory shedat our Aurangabad premises by existing Licensee it is decided to construct a new factoryshed which will also improve the revenues to the Company in the last quarter of thecurrent year.
Since the launching of our LPG Cylinders in Domestic and Commercial Gas segment at ourPalej (Gujarat) bottling plant from August-2016 through Distributor network the Company'sturnover has been significantly increased and our Company continues for making efforts togive bottling assistance to third party at this plant being the biggest plant amongothers and hope to get bottling contract from them during the current year underconsideration.
Liquefied Petroleum Gas (LPG) Industry Overview
Most of the LPG volume is handled by PSU's for domestic supplies. The Government ofIndia stopped passing on the monthly subsidy to the Customers who's total income is Rs.10Lakhs or more based on the data available with the Govt. and in addition to this the OilMarketing Companies is increasing the LPG price of the Cylinders depending on the Importprice of the LPG periodically.
All the Plants of our Company continue to be operational either by our own or thirdparty bottling are on leasing out. In view of this the financial results for the year aremore encouraging when compare to that of previous year and would be still better for thecoming years from 2018-19 onwards.
The Following is the Financial Performance of your Company:
|(Rs.in Lakhs) || || || |
| ||2017-2018 ||2016-2017 ||Inc/(Dec) |
| || ||% || |
|INCOME || || || |
|Sales ||579.33 ||262.89 ||120.37 |
|Other Income ||213.48 ||164.23 ||29.99 |
|Exceptional item ||4.88 ||364.24 ||(98.66) |
|Total ||797.69 ||791.36 ||0.80 |
|Operational Expenses ||543.66 ||235.32 ||(131.03) |
|Staff cost ||54.84 ||51.22 ||(7.07) |
|Finance costs ||7.10 ||6.09 ||(16.58) |
|Other Expenses ||69.23 ||89.14 ||22.33 |
|Depreciation ||14.58 ||10.10 ||(44.36) |
|Total: ||689.41 ||391.87 ||(75.93) |
|Profit ||108.28 ||399.49 ||(72.89) |
Material changes and commitments if any affecting the financial position of the Companyoccurred between the end of the financial year to which this Financial Statements relateand the date of the report
There have been no material changes and commitments affecting the financial positionof the Company which occurred during between the end of the financial year to which thefinancial statements relate and the date of this report.
Details of significant and material orders passed by the regulators/ courts/ tribunalsimpacting the going concern status and the Company's operations in future.
There are no significant material orders passed by the Regulators/ Courts which wouldimpact the going concern status of the Company and its future operations.
Authorized Share Capital
During the year under review there was no change in authorized share capital of theCompany. Authorized share capital of the company as on March 31 2018 wasRs.180000000/- comprising of 18000000 equity shares of Rs.10/- each.
Paid-up Share Capital
During the year under review there was no change in paid up share capital of theCompany. Paid up share capital of the company as on March 31 2018 was Rs.174630000/-comprising of 17463000 equity shares of Rs.10/- each.
Buy Back of Securities : The Company has not bought back any of its securitiesduring the year under review.
Sweat Equity : The Company has not issued any Sweat Equity Shares during the yearunder review.
Bonus Shares : The Company has not issued any bonus shares during the year underreview.
Employees Stock Option : The Company has not provided any Stock Option Scheme tothe employees.
Dividend : Your Directors have not recommended any dividend on Equity Shares forthe year under review.
Transfers to Reserves: Your Board of Directors does not appropriate any amount tobe transferred to General Reserves during the year under review.
Deposits : During the year under review your Company has not accepted any depositswithin the meaning of Section 73 of the Companies Act 2013 read with rules made thereunder.
Particulars of Contracts & Arrangements with Related Parties : All transactionsentered by the Company with Related Parties were in the Ordinary course of Business andare at Arm's Length pricing basis. The Audit Committee granted approvals for thetransactions and the same were reviewed by the Committee and the Board of Directors.
There were no materially significant transactions with Related Parties during thefinancial year 2017-18 which were in conflict with the interest of the Company. Thedetails of contracts and arrangements with related parties as referred to in Section188(1) of the Companies Act 2013 were given asAnnexure - I to the Board'sReport in form No: AOC-2 pursuant to Section 134 (3)(h) of the Act read with Rule 8(2) ofthe Companies (Accounts) Rules 2014.
Related party Transactions: The details of the Related Party Transactions arefurnished in Note 34.5.5 of the Notes on the Financial Statements attached to this Report.All the related party transactions have been on an arm's length basis.
Particulars of Loans Guarantees or Investments
Pursuant to section 186 of Companies Act 2013 and Schedule V of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 the Company neither has directly or indirectly given any loan to its Directors norextended any guarantee or provided any security in connection with any loan taken by them.Further the Company has neither given any inter-corporate loan / advance nor made anyinvestments in other companies during the financial year 2017-18.
Number of Board Meetings held
The Board of Directors duly met 5 times during the financial year from 1 April 2017 to31 March 2018 the details of which are given in the Corporate Governance Report. Themaximum interval between any two meetings did not exceed 120 days as prescribed in theCompanies Act 2013 and Secretarial Standard -1.
Directors and Key Managerial Personnel
In terms of Section 152 of the Companies Act 2013 Mr. Rajiv Kabra Executive Directorwould retire by rotation at the forthcoming AGM and is eligible for re-appointment. Mr.Rajiv Kabra has offered himself for re-appointment.
Based on the confirmations received from Directors none of the Directors aredisqualified from appointment under Section 164 of the Companies Act 2013.
Declaration by Independent Directors
The Independent Directors of the Company have submitted their declarations as requiredunder Section 149(7) of the Companies Act 2013 stating that they meet the criteria ofindependence as per sub-section (6) of Section 149 of the Act.
Familiarization programme for Independent Directors
The Company proactively keeps its Directors informed of the activities of the Companyits management and operations and provides an overall industry perspective as well asissues being faced by the industry.
Independent Directors' Meeting
The Independent Directors met on 12.02.2018 without the attendance of Non-IndependentDirectors and members of the Management. The Independent Directors reviewed theperformance of Non-Independent Directors and the Board as a whole; the performance of theChairman of the Company taking into account the views of Executive Director andNon-Executive Directors and assessed the quality quantity and timeliness of flow ofinformation between the Company Management and the Board that is necessary for the Boardto effectively and reasonably perform their duties.
The Board adopted a formal mechanism for evaluating its performance as well as that ofits Committees and individual Directors including the Chairman of the Board. The exercisewas carried out through a structured evaluation process covering various aspects of theBoard functioning such as composition of the Board & committees experience &competencies performance of specific duties & obligations contribution at themeetings and otherwise independent judgment governance issues etc.
Directors Responsibility Statement as required under Section 134(5) of the CompaniesAct 2013:
Pursuant to the provisions of Section 134(5) of the Companies Act 2013 the Board ofDirectors states that: a) In the preparation of the annual accounts the applicableaccounting standards have been followed along with proper explanation relating to materialdepartures; b) They 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 profit and loss for that period; c) They have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; d) They have prepared the annual accounts on a going concern basis;e) They have laid down internal financial controls to be followed by the Company and thatsuch internal financial controls are adequate and were operating effectively and f) Theyhave devised proper systems to ensure compliance with the provisions of all applicablelaws and that such systems were adequate and operating effectively.
Nomination and Remuneration policy
In compliance to the provisions of Section 178 of the Companies Act 2013 andRegulation 19 of the SEBI (LODR) Regulations 2015 entered into with the Stock Exchangesthe Nomination and Remuneration Committee has recommended to the Board a Nomination andRemuneration policy with respect to appointment / nomination and remuneration payable forthe Directors Key Managerial Personnel and senior level employees of the Company. Thesaid policy has been adopted by the Board and the same will form part of the Annual Reportas Annexure - II to the Board's Report.
M/s. K S Rao &Associates Chartered Accountants (Firm Registration No.003109S)were appointed as Statutory Auditors of your Company to hold office from the conclusion ofthe 25 AGM held in the year 2017until the conclusion of the 30 AGM to be held in the year2022. The requirement to place the matter relating to appointment of Auditors forratification by members at every Annual General Meeting is done away with videNotification dated May 7 2018 issued by the Ministry of Corporate Affairs New Delhi.Accordingly no resolution is proposed for ratification of appointment of Auditors whowere appointed in the Annual General Meeting held on 29 September 2017.
Qualification by Statutory Auditor
Information & Explanation in respect of Qualification / Reservation or Adverseremarks contained in Independent Auditors Report under Paras: Basis for Qualified opinionEmphasis of Matter and Other Matters:
A) In view of very limited strength of employees presently working with the Companythe requirements of Ind AS-19 Employee Benefits in respect of gratuity could not becomplied with. However provision for gratuity as required under Payment of Gratuity Acthas been provided for.
B) Interest for the year Rs. 613849/- on deposits of distributors/dealers has notbeen provided in view of company's adverse financial position and will be negotiated forwaiver resulting to over statement of profit by that amount and understatement of currentliabilities by Rs.10955419/-.
This report form part of the Annual Report.
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board of Directors has appointedM/s. B S S & Associates Practicing Company Secretaries for conducting SecretarialAudit of the Company for the financial year 2017-2018. The Secretarial Audit Report isannexed herewith as Annexure - III.
Qualification by Secretarial Auditor
The Secretarial Auditor's Report does not contain any qualifications reservation oradverse remarks during the year review.
In pursuance of Section 138 of the Companies Act 2013 read with rules made thereunder the Board has appointed Mr. M Krishna Murthy CFO of the Company as InternalAuditors of the Company to carry out internal auditing of books of accounts periodically.
Internal financial control and its adequacy
The Board of your Company has laid down internal financial controls which comply withthe provisions of the Companies Act 2013 and Listing Regulations with Stock Exchange andthat such internal financial controls are adequate and operating effectively. Your Companyhas adopted policies and procedures for ensuring the orderly and efficient conduct of itsbusiness including adherence to the Company's policies the safeguarding of its assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial disclosures.
INDIAN ACCOUNTING STANDARDS (IND-AS)
Your Company has adopted Indian Accounting Standards (Ind AS) with effect from April 12017 pursuant to the Companies (Indian Accounting Standard) Rules 2015 as notified by theMinistry of Corporate Affairs on February 16 2015. Accordingly your Company has preparedfinancial results on standalone basis as per Ind-AS for the first three quarters of the FY2017-18 on and from the period ending March 31 2018 the formats for Unaudited/Auditedquarterly financial results i.e. Statement of Profit and Loss and the Unaudited/AuditedHalf-Yearly Balance Sheet are to be submitted to the stock exchanges shall be as per theformats for revised Balance Sheet and Statement of Profit and Loss as prescribed inSchedule III to the Companies Act 2013.
Vigil Mechanism / Whistle Blower Policy
Pursuant to Section 177(9) of the Companies Act 2013 read with Rule 7 of the Companies(Meetings of Board and its Powers) Rules 2014 and Regulation 22 of the SEBI (LODR)Regulations 2015 the Board has adopted Whistle Blower Policy. This policy aims forconducting the affairs in a fair and transparent manner by adopting highest standards ofprofessionalism honesty integrity and ethical behavior.
A mechanism has been established for employees to report concerns about unethicalbehavior actual or suspected fraud or violation of Code of Conduct and Ethics. The policyalso provided adequate safeguards against the victimization of employees who avail of themechanism and allows direct access to the Chairman of the Audit Committee in exceptionalcases.
Your Company hereby affirms that during the year no Director / employee have beendenied access to the Chairman of the Audit Committee and that no complaints were received.
Management Discussion and Analysis
In terms of the provisions of Regulation 34 of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 the ManagementDiscussion and Analysis given below discusses the key issues concerning the business andcarried on by the Company.
Management of Risks
There is considerable pressure to keep up the realization from the services in view ofhighly competitive market.
The Composition of the Audit Committee is provided in the Corporate Governance Reportforming part of this report. All the recommendations made by the Audit Committee wereaccepted by the Board.
The Risk Management Committee duly constituted by the Board had formulated a RiskManagement Policy for dealing with different kinds of risks attributable to the operationsof the Company. Risk Management Policy of the Company outlines different kinds of risksand risk mitigating measures to be adopted by the Board. The Company has adequate internalcontrol systems and procedures to combat the risk. The Risk Management procedure will bereviewed periodically by the Audit Committee and the Board.
Corporate Social Responsibility (CSR) Initiatives:
Section 135 of the Companies Act 2013 provides the threshold limit for applicabilityof the CSR to a Company ie. (a) networth of the Company to be Rs.500 crore or more; or (b)turnover of the company to be Rs. 1000 crore or more; or (c) net profit of the company tobe Rs. 5 crore or more. As the Company does not fall under any of the threshold limitsgiven above the provisions of section 135 are not applicable to the Company.
Extract of Annual Return
As required by Section 92(3) of the Act read with Rule 12(1) of the Companies(Management and Administration) Rules 2014 extract of the Annual Return in Form MGT-9 isavailable on the Company's website at http://www.kabsonsindustrieslimited.com/shareholders information.
Information on Conservation of Energy Technology Absorption & Foreign ExchangeEarnings and outgo
Pursuant to the provisions of Section 134 (3) (m) of the Companies Act 2013 read withRule 3 of Companies (Accounts) Rules 2014 these particulars are not relevant to theCompany's operations and hence not furnished the same.
Company's Policy on Prohibition Prevention and Redressal of Sexual Harassment of Womenat Workplace
The Company prohibits any form of sexual harassment and any such incidence isimmediately investigated and appropriate action taken in the matter against the offendingemployee(s) based on the nature and the seriousness of the offence. The Company has apolicy on Prohibition Prevention and Redressal of Sexual Harassment of Women at Workplace(the Policy) and matters connected therewith or incidental thereto covering all theaspects as contained under the "The Sexual Harassment of Women at Workplace(Prohibition Prevention and Redressal) Act 2013" notified by the Government ofIndia vide Gazette Notification dated 24th April 2013. There was no case of sexualharassment reported during the year under review.
Remuneration ratio of the Directors / Key Managerial Personnel (KMP) / Employees:
The information required under Section 197 of the Companies Act 2013 read with rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are provided in separate annexure forming part of this Report as Annexure IV.
The Company is committed to good corporate governance in line with the SEBI (LODR)Regulations 2015 and Provisions Rules and Regulations of the Companies Act 2013. TheCompany is in compliance with the provisions on corporate governance specified in the SEBI(LODR) Regulations 2015 with BSE. A certificate of compliance from Mr. Sompally Srikantha practicing Company Secretary and the report on Corporate Governance form part of thisDirectors' Report as Annexure V.
Disclosures as per the SEBI (LODR) Regulations 2015.
Cash flow statement
In due compliance of the SEBI (LODR) Regulations 2015 and in accordance with therequirements prescribed by SEBI the cash flow statement is prepared and is appended tothis Annual Report.
Company's equity shares are presently listed in the Stock exchanges of Mumbai (BSE)and other 2 stock exchanges at Ahmedabad and Kolkata. There is an outstanding Listing Feeof Rs.30025/- and Rs.173170/- to Ahmedabad Stock Exchange Ltd and The Calcutta StockAssociation Ltd respectively. The company has paid the listing fee BSE for the financialyear 2018-19.
We seek to promote and follow the highest level of ethical standards in all ourbusiness transactions guided by our value system. The SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 mandated the formulation of certain policiesfor all listed companies. The policies are reviewed periodically by the Board and updatedbased on need and new compliance requirement.
I) Whistleblower Policy (Policy on vigil mechanism)
The Company has adopted the whistleblower mechanism for directors and employees toreport concerns about unethical behavior actual or suspected fraud or violation of theCompany's code of conduct and ethics. There has been no change to the Whistleblower Policyadopted by the Company.
ii) Policy for Determining Materiality for Disclosures
This policy applies to disclosures of material events affecting Kabsons. This policy isin addition to the Company's corporate policy statement on investor relations which dealswith the dissemination of unpublished price-sensitive information.
iii) Policy on Document Retention
The policy deals with the retention and preservation of corporate records of theCompany.
Share transfer agency
The Company has appointed M/s XL Softech Systems Ltd #3 Sagar Society Road No.2Banjarahills Hyderabad - 500034 as its share transfer agency for handling both physicaland electronic transfers.
Code of conduct: The Company has adopted Code of Conduct for the Board and for theSenior level employees of the Company and they are complying with the said code. Adeclaration by the Executive Director to this effect is furnished in Annexure - VI tothe Board's Report.
Awards and recognition :
The Company has not received any award during the Financial Year.
The Directors wish to place on record their gratitude to shareholders and thank thecustomers vendors franchisees bankers Department of Explosives and their OfficialsCentral Excise Pollution Control Boards and Commercial Tax Departments of respectiveStates host of other State and Central Government Departments Security Exchange Board ofIndia and Stock Exchanges at Mumbai Ahmedabad and Kolkata and others for their continuedsupport to the Company's growth. The Directors also wish to place on record theirappreciation for the contribution made by the employees at all levels for theirsincerity hard work solidarity and dedicated support to the Company.
| ||By Order of the Board of Directors |
| ||For Kabsons Industries Limited |
|Place: Hyderabad || |
|Date: 11.08.2018 ||Rajiv Kabra |
| ||Executive Director |