Kamadgiri Fashion Ltd.
|BSE: 514322||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE535C01013|
|BSE 00:00 | 24 Sep||41.15||
|NSE 05:30 | 01 Jan||Kamadgiri Fashion Ltd|
Kamadgiri Fashion Ltd. (KAMADGIRIFASH) - Director Report
Company director report
Your Directors are pleased to present the 33rd (Thirty-Third) AnnualReport on the business and operation of the Company together with the Audited FinancialStatements for the financial year ended on March 31 2020.
(Rs in Lakhs)
Financial year 2019-20 has been a challenging year for the Company.During the year under review the Company has achieved a turnover of Rs. 29303.99 Lakhsas compared to Rs. 31909.14 Lakhs in the previous year. The Loss after tax for thefinancial year 2019-20 was Rs. 395.68 Lakhs as compared to Profit after tax of Rs. 471.18Lakhs during the previous year.
IMPACT OF COVID19
The operations of the Company have been impacted by the
COVID-19 pandemic during the last quarter of the financial year 2019-20and the impact of the same is prolonging in the financial year 2020-21 too. The Companyhad temporary closed all office(s) manufacturing unit(s) and warehouse(s) to prevent& control spread of pandemic and as per the guidelines of respective governments fromtime to time. The Company facilitated work from home for select teams/end users throughsecured remote access. The Company has prioritized cash conservation cost reductions tomaintain adequate liquidity with minimal borrowings. The Company is in the business ofmanufacturing of fabrics and readymade apparels which is a discretionary consumptionproduct. The Company expects that demand for products of the is Company expected to startgrowing gradually on opening up of economic activity and would improve with increase inconsumer confidence activity in phases as indicated by the authorities and a gradualreturn of normalcy over the next few months. As the situation is unprecedented theCompany is closely monitoring the situation as it evolves in the future while the lockdownis gradually lifting
Considering the losses in Company's financial results during the yearunder review the Board of Directors ('the Board') have not proposed any dividendfor the year.
The Company has not accepted any deposit from public during the yearunder review.
TRANSFER TO GENERAL RESERVE
During the year under review the Board has decided not to transfer anyamount to General Reserve.
CORPORATE GOVERNANCE REPORT
As per Regulation 34(3) read with Schedule V of Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015 (ListingRegulations) a separate report on Corporate Governance is enclosed as a part ofthis Annual Report. A Certificate from Auditors of your Company regarding compliance ofconditions of Corporate Governance as stipulated in Regulation 17(7) read with Part A ofSchedule II of the Listing Regulations is also enclosed along with the CorporateGovernance Report.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis as required under Regulation 34 readwith Schedule V of the Listing Regulations forms part of this Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Our expectation is for resumption of economic
Pursuant to the requirements of Section 134(5) of the Companies Act2013 (the Act') with respect to Directors' ResponsibilityStatement it is hereby confirmed that:
i. in the preparation of the annual accounts for the financial yearended March 31 2020 the applicable accounting standards have been followed along withproper explanation relating to material departures 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 2020and of the loss of the Company for that period;
iii. the Directors 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;
iv. the Directors have prepared the annual accounts for the financialyear ended March 31 2020 on a going concern basis;
v. the Directors have laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively;
vi. the Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review Mr. Rahul Mehta and Mr. SanjeevMaheshwari the Independent Directors of the Company were reappointed at the AnnualGeneral Meeting ('AGM') of the Company held on September 24 2019 to hold officefor a further term of 5 (five) consecutive years.
Ms. Bindu Shah Independent Director of the Company was appointed atthe AGM of the Company held on September 25 2015 to hold office for a term of 5 (five)consecutive years up September 24 2020 in line with the provisions of Section 149 andother applicable provisions of the Act including the rules made thereunder and theerstwhile Listing Agreement. Based on the recommendation of the Nomination andRemuneration Committee and performance evaluation carried out by the Board it is proposedthat she be re-appointed as Independent Directors for a second term of 5 (five)consecutive years to hold office up September 24 2025 subject to the approval of theMembers of the Company at the ensuing AGM.
In terms of Section 152 of the Act Mr. Tilak Goenka retires byrotation at the ensuing AGM and being eligible offers himself for re-appointment.TheCompany has received declarations from all its Independent Directors confirming that theymeet the criteria of independence as prescribed under Section 149(6) of the Act andRegulation 16(1)(b) of the Listing Regulations.
Additional information on appointment/re-appointment of Directors asrequired under Regulation 26(4) and 36(3) of the Listing Regulations is given in theNotice convening the ensuing AGM.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Company's policy on Directors' appointment andremuneration and other matters provided in Section 178(3) of the Act has been disclosedin the Corporate Governance Report which forms part of this Annual Report.
NUMBER OF BOARD MEETINGS
The Board met 4 (Four) times during the year under review. The detailsof Board Meetings and the attendance of the Directors are provided in the CorporateGovernance Report which forms part of this Annual Report.
PERFORMANCE EVALUATION OF THE BOARD
Pursuant to the provisions of the Act and Regulation 17(10) andRegulation 25(4) of the Listing Regulations the Board has carried out an annualevaluation of performance of its own the Committees thereof and the Directorsindividually. At the meeting of the Board all the relevant factors that are material forevaluating the performance of the Committees and of the Board were discussed in detail.
A separate exercise was carried out to evaluate the performance ofindividual Directors including the Chairman of the Board who were evaluated on parameterssuch as level of engagement and contribution independence of judgment safeguarding theinterest of the Company and its minority shareholders etc. The performance evaluation ofthe Independent Directors was carried out by the entire Board except the IndependentDirector being evaluated.
The performancee valuation of the Chairman and Non-IndependentDirectors was carried out by the Independent Directors.
COMMITTEES OF THE BOARD Audit Committee
During the year under review the Audit Committee of the Companycomprised of 3 (three) Independent Directors viz. Mr. Sanjeev Maheshwari Mr. Rahul Mehtaand Ms. Bindu Shah. Mr. Sanjeev Maheshwari is the Chairman of the Audit Committee. Thereare no instances where the Board did not accept the recommendations of the AuditCommittee. The terms of reference powers and roles of the Committee are disclosed in theCorporate Governance Report which forms part of this Annual Report.
Other Committees to
Details of other Committees of the Board along with their terms ofreference composition and meeting(s) held during the year are provided in the CorporateGovernance Report which forms part of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR')STATEMENT
Pursuant to the provisions of Section 135 of the Act read with theCompanies (Corporate Social Responsibility Policy) Rules 2014 your Company as part ofits CSR initiatives has undertaken projects/programs in accordance with the CSR Policy.The details of the CSR activities are given as Annexure A forming part of thisReport.
AUDITORS AND AUDITORS' REPORT Statutory Auditors
M/s. Haribhakti & Co. LLP ('Haribhakti') CharteredAccountants (Firm Registration No. 103523W) were appointed as Statutory Auditors at the22nd AGM held on September 29 2010 and thereafter at every AGM till September 26 2014 inaccordance with Section 224 of the erstwhile Companies Act 1956.
Consequent to enactment of the Act Haribhakti were appointed as theStatutory Auditors of the Company at the 27th AGM held on September 26 2014 for a periodof 5 consecutive years in accordance with Section 139 of the Act read with the rules madethereunder.
Since Haribhakti would be completing their term of 10 years as theStatutory Auditors of the Company they are required to mandatorily retire at the ensuingAGM as per Section 139 of the Act.
Pursuant to the recommendation of the Audit Committee the Board of theCompany have recommended the appointment of M/s. DMKH & Co. Chartered Accountants(Firm Registration No. 116886W) as Statutory Auditors of the Company for a period of five(5) consecutive years from the conclusion of the 33rd AGM till the conclusion of 38th AGMof the Company to be held in the year 2025 subject to the approval of shareholders of theCompany at the ensuing AGM.
In this regard M/s. DMKH & Co. Chartered Accountants havesubmitted their written consent that they are eligible and qualified to be appointed asStatutory Auditors of the Company in terms of Section 139 of the Act and also satisfy thecriteria provided in Section 141 of the Act.
The Company has appointed M/s. HS Associates Company Secretaries toconduct Secretarial Audit of the Company for the financial year 2019-20 in terms ofprovisions of Section 204 of the Act. The Secretarial Audit Report for the year endedMarch 31 2020 is annexed to this report as Annexure B. There is no observation orcomment which requires your attention.
As per the requirement of Central Government pursuant to Section 148 ofthe Act read with the Companies (Cost Records and Audit) Rules 2014 as amended from timeto time your Company has been carrying out Cost Audit of cost records relating to Textileproducts every year.
The Board on the recommendation of Audit Committee has appointed Ms.Ketki D. Visariya Cost Accountant as Cost Auditor to audit the accounts of the Companyfor the financial year 2020-21 at a remuneration of Rs. 0 .90 Lakh plus applicable taxesand reimbursement of out of pocket expenses. As required under the Act a resolutionseeking ratification of members for the payment of remuneration to Cost Auditor forms partof the Notice convening the AGM. The Cost Audit report for the financial year 2018-19 wasfiled the Ministry of Corporate Affairs.
REPORTING OF FRAUDS BY AUDITORS
During the year under review the Auditors have not reported anyinstances of frauds committed in the Company by its Officers or Employees to the AuditCommittee under Section 143(12) of the Companies Act 2013.
POLICIES & DISCLOSURE REQUIREMENTS
Details of programme for familiarisation of Independent Directors withthe Company is available on the website of the Company at the following linkhttps://www.kflindia.com/policies-and-codes/ . Policy on dealing with related partytransactions is available on the website of the Company at the following link https://www.kflindia. com/policies-and-codes/ .
Policy for determining Materiality of Events of the Company isavailable on the website of the Company at the following linkhttps://www.kflindia.com/policies-and-codes/ .
The code of conduct for Directors and senior management of the Companyis available on website of the Company at the following linkhttps://www.kflindia.com/policies-and-codes/ .
The Company has formulated and disseminated a Whistle Blower Policy toprovide vigil mechanism for employees and Directors of the Company to report genuineconcerns that could have serious impact on the operations and performance of the businessof the Company. This Policy is in compliance with the provisions of Section 177(9) of theAct and Regulation 4(2)(d)(iv) of the Listing Regulations. Policy on Whistle Blower isavailable on website of the Company at the following link https://www.kflindia.com/policies-and-codes/.
The outbreak of COVID-19 pandemic globally and in India is causingsignificant disturbance and slowdown of economic activity. The pandemic has significantlyimpacted the operations of the Company it's revenue and profitability. With the gradualopening up of the lockdown the Company expects there would be gradual reversal of impactand improvement in the business of the Company.
During the year under review the Company has complied with SecretarialStandards on meetings of the Board ("SS-1") and on General Meetings("SS-2") issued by the Institute of Company Secretaries of India in terms ofSection 118(10) of the Act.
EXTRACT OF ANNUAL RETURN
In terms of provisions of Section 92(3) of the Act an extract ofAnnual Return in prescribed format is annexed to this Report as Annexure C. Thecopy of the draft Annual Return is also available on the Company's website at thefollowing link https:// www.kflindia.com/annual-return/ .
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the year under review all transactions entered by the Companywith related parties as defined under the Act and Regulation 23 of the ListingRegulations 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 Company.
Disclosure of transactions with related parties as required under theIndian Accounting Standard (IND AS-24) has been made in the notes forming part of thefinancial statements. Accordingly the disclosure of related party transactions asrequired under Section 134(3)(h) of the Act in Form AOC-2 is not applicable to yourCompany.
PARTICULARS OF LOANS GRANTED GUARANTEE PROVIDED AND INVESTMENTS MADEPURSUANT TO THE PROVISIONS OF SECTION 186 OF THE ACT
The Company has not granted any loans not provided any Guarantee andnot made any Investments which are covered under the provision of Section 186 of the Act.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
There were no significant and material orders passed by the Regulatorsor Courts or Tribunals during the year.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION & FOREIGN EXCHANGEEARNINGS AND OUTGO AND EXPORT INITIATIVE
Information pursuant to Section 134(3)(m) of the Act read with Rule8(3) of Companies (Accounts) Rules 2014 is given as Annexure D. The Company beingfocusing in Indian market it has not taken any export initiative.
PARTICULARS OF REMUNERATION TO MANAGERIAL PERSONNEL
Disclosure as required under Section 197(12) of the Act read with 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 AnnexureE is annexed to this Report.
A statement containing the particulars as required under Rule 5(2) and5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are provided in this Annual Report.
In accordance with the provisions of the second proviso to Section136(1) of the Act the Annual Report excluding the aforesaid information is being sent tothe Members of the Company. The said information is available on the Company'swebsite www. kflindia.com .
RISK MANAGEMENT POLICY AND INTERNAL ADEQUACY
The Company has in place a mechanism to identify assess monitor andmitigate various risks to key business objectives. Major risks identified by thebusinesses and functions are systematically addressed through mitigating actions on acontinuing basis. The Company's internal control systems are commensurate with thenature of its business and the size and complexity of its operations. These are routinelytested by Statutory as well as Internal Auditors. Significant audit observations andfollow up actions thereon are reported to the Audit Committee.
The Board has adopted policies and procedures for ensuring the orderlyand efficient conduct of the business including adherence to the Company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial disclosures.
The Audit Committee actively reviews the adequacy and effectiveness ofthe internal control systems and suggests improvements to strengthen the same. The Companyhas a robust Management Information System which is an integral part of the controlmechanism.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
Your Company has always believed in providing a safe and harassmentfree workplace for every individual working in Company's premises through variousinterventions and practices. The Company always endeavours to create and provide anenvironment that is free from discrimination and harassment including sexual harassment.During the year under review there were no cases to the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013.
TRANSFER OF UNCLAIMED/UNPAID AMOUNTS TO THE INVESTOR EDUCATION ANDPROTECTION FUND (IEPF)
Pursuant to Sections 124 and 125 of the Act read with the InvestorEducation and Protection Fund Authority (Accounting Audit Transfer and Refund) Rules2016 ("IEPF Rules") dividend if not claimed for a consecutive period of7 (Seven) years from the date of transfer to Unpaid Dividend Account of the Company areliable to be transferred to the IEPF.
The following table provides the due dates for the transfer ofoutstanding unpaid/unclaimed dividend by the Company as on March 31 2020:
During the year under review 4452 shares and Rs. 21400 weretransferred to IEPF.
EQUITY SHARES IN THE SUSPENSE ACCOUNT
During the year under review and in accordance with the requirement ofRegulation 34(3) and Part F of Schedule V to the Listing Regulations there were no sharestransferred to suspense account.
The Board wishes to place on record their sincere appreciation to allthe bankers customers employees at all levels and stakeholders for the continued supportand patronage during the year under review.