Your Directors are pleased to present the Thirty-First Annual Report on the businessand operation of the Company together with the Audited Financial Statements for the yearended March 31 2018.
|FINANCIAL HIGHLIGHTS || ||(Rs in Lakhs) |
|Particulars ||2017-18 ||2016-17 |
|Income from Operations ||33152.52 ||30482.91 |
|Other Income ||148.39 ||45.64 |
|Profit before tax ||1062.03 ||414.19 |
|Less: Provision for current tax ||417 ||220.00 |
|Less: Net deferred tax liability ||(6.28) ||(87.35) |
|Profit after tax ||651.31 ||281.54 |
|Other Comprehensive Income ||7.74 ||(16.25) |
|Earning per share of Rs 10/- each || || |
|Basic (in Rs ) ||11.10 ||4.80 |
|Diluted (in Rs ) ||11.10 ||4.80 |
Pursuant to the notification issued by the Ministry of Corporate
Affairs on February 16 2015 and under the Companies (Indian Accounting Standards)Rules 2015 and other accounting principles generally accepted in India the Company hasadopted Indian Accounting Standards (Ind AS) on April 1 2017 with the transition date asApril 1 2016. The Financial Statements for the year under review and previous year havebeen prepared in accordance with the recognised and measurement principles stated therein.Considering the effect given in the financial statements of the previous years as per theprovisions of Ind AS 101 with respect to "First-time Adoption of Indian AccountingStandards".
During the year under review the Company has achieved a turnover of Rs 33152.52 Lakhsas compared to Rs 30482.91 Lakhs in the previous year. Accordingly there was a top linegrowth of
8.76%. The Profit after tax forthefinancialyear 2017-18 was Rs 651.31 lakhs as comparedto Rs 281.54 lakhs during the previous year.
The Company would continue its focus in increasing efficiency through modernisation andadoption innovative management methods in every division of the Company. The Company'sfinished fabrics division which supplies fabrics to readymade branded manufacturers isexpected to perform better considering the improved consumer sentiments. The Companyproposes to launch "RISQUE" Men's Casual Shirt Brand targeted for onlinemarket and distribution network. This would enable the Company to create better margin insame capacities. Also the brand will be positioned to enter new areas and segments offashion. The Company proposes to enter into Women's Wear segment wherein it will usefabric manufacturing capacity of the Company to offer innovative fabrics for women'sgarments and use these fabrics to create garment samplings eventually to create women'swear brand in long run.
Your Directors are pleased to recommend a dividend of Rs 2/- (i.e. 20%) per equityshare on the equity capital of the Company for the year under review. The said dividendshall be subject to the approval of the members at the ensuing annual general meeting.
The Company has not accepted any deposit from the public during the financial yearunder review.
During the year under review the Company has not transferred any profit to generalreserves.
CORPORATE GOVERNANCE REPORT
As per Regulation 34(3) read with schedule V of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (Listing Regulations) a separatereport on Corporate Governance is enclosed as a part of this Annual CertificatefromReport. A
Auditors of your Company regarding compliance of conditions of Corporate Governance asstipulated in Regulation 17(7) read with Part A of Schedule II of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 is also enclosed along with theCorporate Governance Report.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis is as required under Regulation 34 read withSchedule V of the Listing regulations forms part of this Annual Report.
Details of programmes for familiarization of Independent Directors with the Company areavailable on the website of the Company at the folllowing linkhttp://kflindia.com/wp-content/uploads/2017/09/ PD-3.pdf .
Policy on dealing with related party transactions is available on the website of theCompany at the following link http://kflindia.com/wp-content/uploads/2017/09/PD-1.pdf .
Policy for archival of documents of the Company is available on the website of theCompany at the following link http://kflindia.com/wp-content/uploads/2018/04/Archival-Policy.pdf .
PolicyfordeterminingMaterialityofEventsoftheCompanyisavailable on the website of theCompany at following the link http://kflindia.com/wp-content/uploads/2018/05/WebsiteRegulation-305_2018-19_ KFL.pdf.
The Company has formulated and disseminated a Whistle Blower Policy to provide vigilmechanism for employees and Directors of the Company to report genuine concerns that couldhave serious impact on the operations and performance of the business of the Company. ThisPolicy is in compliance with the provisions of Section 177(9) of the Companies Act 2013and Regulation 4(2)(d) (iv) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. Policy on Whistle Blower is available on the website of the Company atthe following link http://kflindia.com/ wp-content/uploads/2017/09/PD-2.pdf .
NUMBER OF BOARD MEETINGS
The Board of Directors met 4 (Four) times during the financial year
2017-18. The details of Board meetings and the attendance of the Directors are providedin the Corporate Governance Report which forms part of this Annual Report.
DECLARATION BY INDEPENDENT DIRECTORS:
The Company has received necessary declarations from all the Independent Directorsunder Section 149(7) of the Act stating that they meet the criteria of independence laiddown in Section 149(6) of the Companies Act 2013.
PERFORMANCE EVALUATION OF BOARD
Pursuant to the provisions of the Companies Act 2013 and Regulation 17(10) andRegulation 25(4) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Board has carried out an annual evaluation of performance of itsown the Committees thereof and the Directors individually. At the meeting of the Boardall the relevant factors that are material for evaluating the performance of theCommittees and of the Board were discussed in detail. A separate exercise was carried outto evaluate the performance of individual Directors including the Chairman of the Boardwho were evaluated on parameters such as level of engagement and contributionindependence of judgment safeguarding the interest of the Company and its minorityshareholders etc. The performance evaluation of the Independent Directors was carried outby the entire Board except the Independent Director being evaluated.
The performance evaluation of the Chairman and Non-Independent Directors was carriedout by the Independent Directors.
The Company's policy on Directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Companies Act 2013 has been disclosed in the CorporateGovernance Report which forms part of the Annual Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In terms of Section 152 of the Companies Act 2013 Mr. Pradip Kumar Goenka retires byrotation at the ensuing Annual General Meeting and being eligible offers himself forre-appointment. Additional information on appointment/re-appointment of Directors asrequired under Regulation 36 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is given in the Notice convening the ensuing Annual General Meeting.
During the year Mr. Siddanth Singh ceased to be a Key Managerial Personnel of theCompany with effect from December 5 2017. Subsequent to the year under review Mr. LalitGoenka ceased to be a Director of the Company with effect from May 26 2018 and Mr. GauravK. Soni was appointed as Company Secretary (Key Managerial Personnel) with effect from May26 2018.
COMMITTEES OF THE BOARD OF DIRECTORS AUDIT COMMITTEE
During the year in review the Audit Committee of the Company comprised of threeIndependent Directors viz. Mr. Sanjeev Maheshwari Mr. Rahul Mehta and Ms. Bindu Shah.Mr. Sanjeev Maheshwari is the Chairman of the Audit Committee. There are no instanceswhere the Board did not accept the recommendations of the Audit Committee. The terms ofreference powers and roles of the Committee are disclosed in the Corporate GovernanceReport which forms part of the Annual Report.
Details of all the Committees of the Board of the Company along with their terms ofreference composition and meetings held during the year are provided in the CorporateGovernance Report which forms part of this Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirements of Section 134(5) of the Companies Act 2013 with respectto Directors' Responsibility Statement it is hereby confirmed that: i. in the preparationof the annual accounts for the financial year ended March 31 2018 the applicableaccounting standards have been followed along with proper explanation relating to materialdepartures if any; ii. the Directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company as at March 31
2018 and of the profit of the Company for that period; iii. the Directors have takenproper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act 2013 for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities; iv. theDirectors have prepared the annual accounts for the financial year ended March 31 2018on a going concern basis; v. the Directors have laid down internal financial controls tobe followed by the Company and that such internal financial controls are adequate and wereoperating effectively; vi. the Directors had devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems were adequate andoperating effectively.
AUDITORS AND AUDITORS' REPORT Statutory Auditors
At the Annual General Meeting of the Company held on September 26 2014 M/s.Haribhakti & Co. LLP Chartered Accountants Mumbai was appointed as statutoryauditors of the Company to hold office till the conclusion of the 32nd Annual GeneralMeeting. The Auditors' Report does not contain any disqualification reservation oradverse mark.
The Company has appointed M/s. H. S. Associates Company Secretaries to conductSecretarial Audit of the Company for the financial year 2017-18 in terms of provisions ofSection 204 of the
Companies Act 2013. The Secretarial Auditor Report for the year ended March 31 2018is annexed to this report as Annexure A. There is no observation or comment whichrequires your attention.
As per the requirement of Central Government pursuant to Section 148 of the CompaniesAct 2013 read with the Companies (Cost Records and Audit) Rules 2014 as amended fromtime to time your Company has been carrying out Cost Audit of cost records relating toTextile products every year.
The Board of Directors on the recommendation of Audit Committee has appointed Ms.Ketki D. Visariya Cost Accountant as Cost
Auditor to audit the accounts of the Company for the financial year
2018-19 at a remuneration of Rs 0.90 Lakh plus Goods and Service tax as applicable andreimbursement of out of pocket expenses. As required under the Companies Act 2013 aresolution seeking ratification of members' for the payment of remuneration to Cost
Auditor forms part of the Notice convening the Annual audit observations GeneralMeeting.
The Cost Audit report for the financial year 2016-17 was filed with the Ministry ofCorporate Affairs.
EXTRACT OF ANNUAL RETURN
In terms of provisions of Section 92(3) of the Companies Act 2013 an extract ofAnnual Return in prescribed format is annexed to this Report as Annexure B.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the year under review all transactions entered into by the
Company with related parties as defined under the Companies
Act 2013 and Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 were in the ordinary course of business and on an arm's length basis.There were no materially significant transactions with the related parties during thefinancial year which were in conflict with the interest of the
Disclosure of transactions with related parties as required under the Indian AccountingStandard (IND AS-24) has been made in the notes forming part of the financial statements.Accordingly the disclosure of related party transactions as required under section134(3)(h) of the Companies Act 2013 in Form AOC-2 is not applicable to your Company.
PARTICULARS OF LOANS GRANTED GUARANTEE PROVIDED AND INVESTMENTS MADE PURSUANT TO THEPROVISIONS OF SECTION 186 OF THE COMPANIES ACT 2013
The Company has not granted any loans not provided any Guarantee and not made anyInvestments which are covered under the provision of Section 186 of the Companies Act2013.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION
& FOREIGN EXCHANGE EARNINGS AND OUTGO AND EXPORT INITIATIVE
Information pursuant to Section 134(3)(m) of the Companies Act 2013 read with Rule8(3) of Companies (Accounts) Rules 2014 is given as Annexure C. The Company beingfocusing in Indian market it has not taken any export initiative.
PARTICULARS OF REMUNERATION TO MANAGERIAL PERSONNEL
In terms of provisions of the Companies Act 2013 and disclosure as required under rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014framed there under the names and other particulars of employees are provided under AnnexureD which is annexed to this Report.
A statement containing the particulars as required under rule 5(2) and (3) of theCompanies (Appointment and Remuneration of managerial Personnel) Rules 2014 is notrequired to be given as per the Notification issued by Ministry of Corporate Affairs dated
June 30 2016.
RISK MANAGEMENT POLICY AND INTERNAL ADEQUACY
The Company has in place a mechanism to identify assess monitor and mitigate variousrisks to key business objectives. Major risks identified by the businesses and functionsare systematically addressed through mitigating actions on a continuing basis. TheCompany's internal control systems are commensurate with the nature of its business andthe size and complexity of its operations. These are routinely tested by Statutory as wellas Internal Auditors.
Significant and follow up actions thereon are reported to the Audit Committee.
The Board has adopted policies and procedures for ensuring the orderly and efficientconduct of the business including adherence to the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialdisclosures.
The Audit Committee of the Board of Directors actively review the adequacy andeffectiveness of the internal control systems and suggests improvements to strengthen thesame. The Company has a robust Management Information System which is an integral part ofthe control mechanism.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
Your Company has always believed in providing a safe and harassment free workplace forevery individual working in Company's premises through various interventions andpractices. The Company always endeavours to create and provide an environment that is freefrom discrimination and harassment including sexual harassment.
During the year under review there were no cases filed to the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013.
The Board wishes to place on record their sincere appreciation to all the bankerscustomers employees at all levels and stakeholders for the continued support andpatronage during the year under review.
| ||For Kamadgiri Fashion Limited |
|Place: Mumbai ||Pradip Kumar Goenka |
|Date: May 26 2018 ||Chairman & Managing Director |