The Members of KABSONS INDUSTRIES LIMITED
Your Directors have pleasure in presenting the 30th Annual Report of theCompany together with the Audited Financial Statements for the year ended 31stMarch 2022.
|FINANCIAL RESULTS: || ||(Rs.in Lakhs) |
| ||Financial Year 2021-2022 ||Financial Year 2020-2021 |
|Revenue from operations ||1135.18 ||599.88 |
|Other Income ||61.31 ||75.37 |
|Total Revenue ||1196.49 ||675.24 |
|Total Expenses ||1040.19 ||577.00 |
|Profit before Finance Cost Depreciation & exceptional items ||208.17 ||137.87 |
|Finance Cost ||4.84 ||7.09 |
|Depreciation ||47.03 ||32.53 |
|Exceptional items ||3.83 ||12.61 |
|Profit/ (Loss) before Tax ||160.13 ||110.86 |
|Tax Expenses (Earlier year Tax Paid) ||0.05 ||0.02 |
|Profit after Tax ||160.08 ||110.84 |
|Basic & Diluted Earnings per share of Rs.10/- each ||0.92 ||0.63 |
Discussion on Financial Performance:
Operations and Business Performance:
During the year under consideration the Company has generated a profit of Rs.208.17Lacs before finance costs depreciation and exceptional items as against a profit ofRs. 137.87Lacs during the previous year which includes lease income and lease income isthe major source of revenue to the Company. Your Directors are trying every opportunityfor improving the performance with increased revenue in the next year.
The Company has been focusing on Lease income and as per demand a new factory shed atour Aurangabad premises is constructed which also improved the revenues for the year tothe company. The company also started during this year Bottling at our Ranchi plant forone of the parallel marketers which also improved the revenues.
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 312022 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 312022 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 securities during the year under review.
The Company has not issued any Sweat Equity Shares during the year under review.
The Company has not issued any bonus shares during the year under review.
Employees Stock Option
The Company has not provided any Stock Option Scheme to the employees.
Your Directors have not recommended any dividend on Equity Shares for the year underreview.
Transfers to Reserves
Your Board of Directors does not appropriate any amount to be transferred to GeneralReserves during the year under review.
During the year under review your Company has not accepted any deposits within themeaning of Section 73 of the Companies Act 2013 read with rules made there under.
Particulars of Contracts & Arrangements with Related Parties
All transactions entered by the Company with Related Parties were in the Ordinarycourse of Business and are at Arm's Length pricing basis. The Audit Committee grantedapprovals for the transactions and the same were reviewed by the Committee and the Boardof Directors.
There were no materially significant transactions with Related Parties during thefinancial year 2021-2022 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 as Annexure -1 to the Board's Report in formNo: AOC-2 pursuant to Section 134 (3)(h) of the Act read with Rule 8(2) of the Companies(Accounts) Rules 2014.
Related party Transactions:
The details of the Related Party Transactions are furnished in Note 34.3.5 of the Noteson the Financial Statements attached to this Report. All the related party transactionshave been on an arm's length basis. Particulars of Loans Guarantees or Investments
Your Company has not given any Loans / Guarantees and not made any Investments duringthe FY 2021-22 as specified under the provisions of Section 186 of the Companies Act2013 read with Companies (Meetings of Board and its Powers) Rules 2014.
Number of Board Meetings held
The Board of Directors duly met 4 times during the financial year from 1stApril 2021 to 31st March 2022 the details of which are given in theCorporate Governance Report. The maximum interval between any two meetings did not exceed120 days as prescribed in the Companies Act 2013 and Secretarial Standard -1. KeyManagerial Personnel
During the year under review the following were the Key Managerial Personnel' ofthe Company:
Sri. Rajiv Kabra - Managing Director
Sri. Krishna Murthy Motamarri - Chief Financial Officer; and
Sri. Nagaraju Musinam - Company Secretary and Compliance Officer
The Company is well supported by the knowledge and experience of its Directors andExecutives. In terms of Section 152 of the Companies Act 2013 and Articles of Associationof the Company Ms. Riha Kabra Non Executive Director of the Company is liable to retireby rotation and being eligible has offered herself for reappointment.
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 12.02.2022 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 Managing Director and assessedthe quality quantity and timeliness of flow of information between the Company Managementand the Board that is necessary for the Board to effectively and reasonably perform theirduties. Board Evaluation:
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 applicable accounting standards havebeen followed along with proper explanation relating to material departures;
b) 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 profitand loss for that period;
c) They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) 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 andthat such internal financial controls are adequate and were operating effectively and
f) They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
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.
Policy on Directors' Appointment and Remuneration and Other Details
The Company's policy on directors' appointment and remuneration and other mattersprovided in Section 178 (3) of the Companies Act 2013 have been disclosed in thecorporate governance report. Under Section 178 (3) of the Companies Act 2013 theNomination and Remuneration Committee of the board has adopted a policy for nominationremuneration and other related matters for directors and senior management personnel. Agist of the policy is available in the Corporate Governance Report.
Under Section 139(2) of the Companies Act 2013 and the Rules made thereunder it ismandatory to rotate the statutory auditors on completion of two terms of five consecutiveyears and each such term would require approval of the shareholders. In line with therequirements of the Companies Act 2013 Statutory Auditor M/s. K S Rao & Co.Chartered Accountants (Firm Registration No.003109S) were appointed as Statutory Auditorof the Company at the 25th AGM held on September 29 2017 to hold office from theconclusion of the said meeting till the conclusion of the 30th AGM to be heldin theyear 2022. The term of office of M/s. K. S. Rao & Co. Chartered Accountants(Firm Registration No.003109S) as Statutory Auditors of the Company will conclude fromthe close of the forthcoming AGM of the Company.
The Board of Directors of the Company based on the recommendation of the auditcommittee at its meeting held on August 112022 reappointed M/s. K. S. Rao & Co.Chartered Accountants (Firm Registration No.003109S) as the Statutory Auditor of theCompany to hold office for a second term of five consecutive years from the conclusion ofthe 30th AGM till the conclusion of the 35th AGM to be held in the year 2027and will be placed for the approval of the shareholders at the ensuing AGM.
During the year the statutory auditors have confirmed that they satisfy theindependence criteria required under the Companies Act 2013
The Board recommends their reappointment to the shareholders.The notice convening the30th AGM to be held on September 23 2022 sets out the details.
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:
1 The company has not adopted and complied with requirements of IND AS 19Employee Benefits' in respect of the gratuity liability which constitute a departurefrom the Indian Accounting Standards.
2 In the financial statements which states that the Company has not provided for theinterest expense amounting to Rs.612049/- for the year and Rs.12793366/- for earlieryears against the Trade Deposits received from the Dealers/ Distributors. Consequentlythe same has resulted in overstatement of profit for the year by Rs.612049/-overstatement of the balance in the retained earnings in other equity by Rs13405415/- and understatement of Current Liabilities by Rs. 13405415/-
Management View: 1) In view of very limited strength of employees presently workingwith the Company the requirements of AS-19 Employee Benefits in respect of gratuity couldnot be complied with. However provision for gratuity as required under Payment ofGratuity Act has been provided for. 2) Interest for the year Rs. 612049/- on deposits ofDealers/Distributors has not been provided in view of Company's adverse financial positionand will be negotiated for waiver resulting to overstatement of profit by that amount andunderstatement of Current liabilities by Rs.13405415.
Details in respect of frauds reported by Auditors under Section 143 (12) other thanthose which are reportable to the Central Government.
There were no frauds reported by the Statutory Auditors under sub-section 12 of Section143 of the Companies Act 2013 along with Rules made there under.'
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 2021-2022. The Secretarial Audit Report isannexed herewith as Annexure - II.
Qualification by Secretarial Auditor
The Secretarial Auditor's Report does not contain any qualifications reservation oradverse remarks during the year under review.
The company has devised proper systems to ensure compliance with the provisions of allapplicable Secretarial Standards issued by the Institute of Company Secretaries of Indiaand that such systems are adequate and operating effectively.
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.
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
Management Discussion and Analysis Report for the year under review as stipulatedunder SEBI Listing Regulations is annexed herewith as Annexure III which forms part ofthis report.
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 thecompany to be Rs. 5 crore or more. As the Company does not fall under any of the thresholdlimits given above the provisions of section 135 are not applicable to the Company.
Pursuant to Section 92(3) and Section 134(3)(a) of the Companies Act 2013 the AnnualReturn in eform MGT 7 is placed at the company website at https:// www.kabsons.co.in
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 24thApril 2013.
There was no case of sexual harassment 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 BSS & AssociatesCompany Secretaries and the report on Corporate Governance form part of this Directors'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 Fee of Rs.40025/- and Rs.181922/- to Ahmedabad StockExchange Ltd and The Calcutta Stock Association Ltd respectively.
The company has paid the listing fee BSE for the financial year 2021-22.
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 the Senior levelemployees of the Company and they are complying with the said code. A declaration by theManaging Director to this effect is furnished in Annexure - VIto the 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.
| ||For and on behalf of the Board of Directors of |
| ||Kabsons Industries Limited |
| ||Sd/- |
| ||Rajiv Kabra |
|Place : Hyderabad ||Chairman & Managing Director |
|Date : 11.08.2022 ||DIN :00038605 |