KANANI INDUSTRIES LIMITED
Your Directors have pleasure in presenting their 35th Annual Report on theStandalone and Consolidated Audited Statement of Accounts of Kanani Industries Limited["the Company"] for the Financial Year ended March 31 2018.
The summarized financial performance of the Company for the FY 2017-18 and FY 2016-17is given below:
( in Lacs)
|Particulars ||Standalone ||Consolidated |
| ||2016-2017 ||2017-2018 ||2016-2017 ||2017-2018 |
|Revenue from operations ||7924.02 ||7872.47 ||38559.63 ||44257.01 |
|Other Income ||141.47 ||226.40 ||141.47 ||226.40 |
|Total Revenue ||8065.48 ||8098.87 ||38701.10 ||44483.41 |
|Total Expenses ||8015.69 ||8050.42 ||38606.83 ||44416.02 |
|Profit/(Loss) before exceptional and || || || || |
|extraordinary items and tax ||49.79 ||48.45 ||94.27 ||67.39 |
|Exceptional Items || || || || |
|Extraordinary Items || || || || |
|Net Profit Before Tax ||49.79 ||48.45 ||94.27 ||67.39 |
|Provision for Tax || || || || |
|- Current Tax ||9.50 ||9.25 ||13.57 ||16.98 |
|- Deferred Tax (Liability)/Assets || || || || |
|- Excess/(short) provision for earlier years || ||0.12 || ||0.12 |
|Net Profit After Tax ||40.29 ||39.08 ||80.70 ||50.29 |
|Profit/(Loss) from Discontinued operations || || || || |
|Tax Expense of Discontinued operations || || || || |
|Profit/(Loss) from Discontinued operations (after tax) || || || || |
|Profit/(Loss) for the period ||40.29 ||39.08 ||80.70 ||50.29 |
|Other Comprehensive Income || || || || |
|- Items that will not be reclassified to profit or loss || || || || |
|- Income tax relating to items that will not be reclassified to profit or loss || || || || |
|- Items that will be reclassified to profit or loss || || || || |
|- Income tax relating to items that will be reclassified || || || || |
|to profit or loss || || || || |
|Total Comprehensive income for the period (Comprising Profit (Loss) and Other || || || || |
|Comprehensive Income for the period) ||40.29 ||39.08 ||80.70 ||50.29 |
|Earnings per equity share (for continuing operation): || || || || |
| Basic (In Rs) ||0.04 ||0.04 ||0.08 ||0.05 |
| Diluted (In Rs) ||0.04 ||0.04 ||0.08 ||0.05 |
REVIEW OF OPERATIONS
During the year under review the Standalone total Income was 8065.48 lakhs asagainst 8098.87 lakhs for the corresponding previous year.
Total Comprehensive income for the period was 40.29 lakhs as against 39.08lakhs in the corresponding previous yearConsolidated:
During the year under review the consolidated total Income was 38701.10 lakhs asagainst 44483.41 lakhs for the corresponding previous year.
Total Comprehensive consolidated income for the period was 80.70 lakhs asagainst Net 50.29 lakhs in the corresponding previous year
STATE OF AFFAIRS AND FUTURE OUTLOOK
The Jewellery business will continue its growth path through various initiativesincluding launching of new collections & Designs increasing share of studdedjewellery and achieving design leadership. Overall the year 2018-19 will be a year wherethe Company would drive for strong and profitable growth in all its consumer businesses.
In order to conserve the resources for the further growth of the Company yourDirectors think fit not to recommend any dividend for the year under review.
TRANSFER TO RESERVES
The Board of Directors has decided to retain the entire amount of profits in the profitand loss account.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis as required in terms of the Listing Regulationsis annexed to the report as Annexure I and is incorporated herein by reference andforms an integral part of this report.
The Paid-up Equity Share Capital of the Company as on 31st March 2018 is98934000/- comprising of 98934000 shares of 1/- each. During the year under reviewthe Company has not issued any securities.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
At the 34th Annual General Meeting held on September 28 2017 Mr. HarshilKanani was re-appointed as the Director of the Company liable to retire by rotation.
In accordance with section 152(6) of the Companies Act 2013 and in terms of Articlesof Association of the Company Mr. Premjibhai Kanani (DIN: 01567443) Director of theCompany retires by rotation and being eligible; offers himself for reappointment at theforthcoming 35th Annual General Meeting. The Board recommends the saidreappointment for shareholders' approval.
On the recommendations of the Nomination and Remuneration Committee the Boardappointed Mr. Tejas Choksi (DIN:02778185) and Mr. Kautilbhai Patel (DIN:02261506) as anAdditional (Independent) Directors of the Company with effect from August 13 2018 inpursuant to section 161 of the Companies Act 2013 read with Articles of Association ofthe Company and they will hold office upto ensuring Annual General Meeting.
The resolution for confirming the appointment of Mr. Tejas Choksi and Mr. KautilbhaiPatel as an Independent Directors forms part of the Notice convening the 35thAnnual General Meeting (AGM') scheduled to be held on September 29 2018. We seekyour support and hope you will enthusiastically vote in confirming their appointment tothe Board.
Further Mr. Devendrakumar Kikani Independent Director of the Company has tenderedhis resignation from office of directorship of the Company w.e.f. August 10 2018.
All the directors of the Company have confirmed that they satisfy the fit and propercriteria as prescribed under the applicable regulations and that they are not disqualifiedfrom being appointed as directors in terms of Section 164(2) of the Companies Act 2013.
Further Pursuant to Section 203 of the Companies Act 2013 the Key ManagerialPersonnel of the Company are:
|Sr. No Name of KMP ||Designation |
|1. Mr. Premjibhai Kanani ||Whole-time Director & Chairman |
|2. Mr. Harshil Kanani ||Managing Director |
|3. Mr. Darshak Pandya ||Chief Financial Officer |
|4. Mr. Mehul Kundariya ||Company Secretary and Compliance Officer |
During the year there has been no change in the Key Managerial Personnel.
DECLARATION BY INDEPENDENT DIRECTORS
The Independent Director(s) have submitted their disclosure to the Board that theyfulfill all the requirements as to qualify for their appointment as Independent Directorunder the provisions of section 149 of the Companies Act 2013 as well as Regulation 17 ofthe Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015.
Dates for Board Meetings are well decided in advance and communicated to the Board andthe intervening gap between the meetings was within the period prescribed under theCompanies Act 2013 and the Listing Agreement. The information as required underRegulation 17(7) read with Schedule II Part A of the LODR is made available to the Board.The agenda and explanatory notes are sent to the Board in advance. The Board periodicallyreviews compliance reports of all laws applicable to the Company. The Board meets at leastonce a quarter to review the quarterly financial results and other items on the agenda andalso on the occasion of the Annual General Meeting (AGM') of the Shareholders.Additional meetings are held when necessary.
Further Committees of the Board usually meet on the same day of formal Board Meetingor whenever the need arises for transacting business. The recommendations of theCommittees are placed before the Board for necessary approval and noting.
During the year 05 (Five) Board Meetings were held during the year ended 31stMarch 2018 the dates which are 27th May 2017 21st August 201704th September 2017 12th December 2017 and 14thFebruary 2018. The gap between any two Board meetings during this period did not exceedone hundred and twenty days.
Attendance details of Directors for the year ended March 31 2018 are given below:
|Name of the Directors ||Category ||No. of Board Meetings attend |
|Mr. Premjibhai Kanani ||Chairman Whole-time Director ||05 |
|Mr. Harshil Kanani ||Managing Director ||05 |
|*Mr. Devendrakumar Kikani ||Independent Director ||05 |
|Mr. Ami Dhaval Jariwala ||Independent Director ||05 |
* Resigned from directorship of the Company w.e.f. 10th August 2018.
DISCUSSIONS WITH INDEPENDENT DIRECTORS
The Board's policy is to regularly have separate meetings with Independent Directorsto update them on all business related issues new initiatives and changes in the industryspecific market scenario. At such meetings the Executive Directors and other Members ofthe Management make presentations on relevant issues.
The policy for Familiarisation Programme for Independent Directors is available on ourwebsite www.kananiindustries.com.
Pursuant to the provisions of the Companies Act 2013 and the Listing Agreement/ SEBI(LODR) Regulations 2015 the Board has carried out an annual performance evaluation ofits own performance the directors individually as well as the evaluation of the workingof its Committees. The Directors expressed satisfaction with the evaluation process.
COMPOSITION OF AUDIT COMMITTEE
Your Company has formed an Audit Committee as per the Companies Act 2013 andSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015. All members of the Audit Committee possess strong knowledge ofaccounting and financial management.
The primary objective of the Audit Committee is to monitor and provide an effectivesupervision of the Management's financial reporting process to ensure accurate and timelydisclosures with the highest levels of transparency integrity and quality of financialreporting. The Committee oversees the work carried out in the financial reporting processby the Management the statutory auditor and notes the processes and safeguards employedby each of them.
The Committee met 4 (Four) times during the year the details of which are given in theCorporate Governance Report along with composition of the Committee and their attendance.
COMPOSITION OF NOMINATION & REMUNERATION COMMITTEE
Your Company has formed a Nomination & Remuneration Committee to lay down norms fordetermination of remuneration of the executive as well as non-executive directors andexecutives at all levels of the Company. The Nomination & Remuneration committee hasbeen assigned to approve and settle the remuneration package with optimum blending ofmonetary and non-monetary outlay.
The Committee met 4 (Four) times during the year the details of which are given in theCorporate Governance Report along with composition of the Committee and their attendance.
NOMINATION AND REMUNERATION POLICY
The Board of Directors has framed a policy which lays down a framework in relation toremuneration of Directors. This policy also lays down criteria for selection andappointment of Board Members. The Board of Directors is authorized to decide Remunerationto Executive Directors. The Remuneration structure comprises of Salary and Perquisites.Salary is paid to Executive Directors within the Salary grade approved by the Members. TheNomination & Remuneration committee has been assigned to approve and settle theremuneration package with optimum blending of monetary and non-monetary outlay.
In terms of requirements prescribed under Section 178(3) of the Companies Act 2013the Nomination and Remuneration Policy inter-alia providing the terms for appointment andpayment of remuneration to Directors and Key Managerial Personnel.
During the year there have been no changes to the Policy. The same is annexed to thisreport as Annexure II and is available on our website www.kananiindustries.com.
Details of remuneration paid to Directors and Key Managerial Personnel are given in theCorporate Governance Report along with shareholding in a Company.
COMPOSITION OF STAKEHOLDERS RELATIONSHIP COMMITTEE
Your Board has constituted a Stakeholders Relationship Committee to specifically lookinto the mechanism of redressal of grievances of shareholders etc. The Committee reviewsShareholder's / Investor's complaints like non-receipt of Annual Report physicaltransfer/ transmission/transposition split/ consolidation of share certificates issue ofduplicate share certificates etc. This Committee is also empowered to consider andresolve the grievance of other stakeholders of the Company including security holders.
The Committee met 04 (Four) times during the year the details of which are given inthe Corporate Governance Report along with composition of the Committee and theirattendance.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) & 134(5) of the Companies Act 2013 the Board ofDirectors of the Company hereby confirm that:
(a) In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
(b) the directors 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 of the company for that period;
(c) the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors have prepared the annual accounts on a going concern basis; and
(e) the directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
(f) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The information required pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Amendment Rules 2016 in respect ofemployees of the Company is enclosed as Annexure III and forms part of thisReport.
Further as per the provisions specified in Chapter XIII of Companies (Appointment& Remuneration of Managerial Personnel) Amendment Rules 2016 none of the employees ofthe Company are in receipt of remuneration exceeding Rs. 10200000/- per annum ifemployed for whole of the year or Rs. 850000/- per month if employed for part of theyear.
Further the names of top ten employees in terms of remuneration drawn are disclosed inAnnexure IV and forms part of this Report.
EXTRACT OF ANNUAL RETURN:
The details forming part of the Extract of the Annual Return in Form MGT-9 as requiredunder Section 92 of the Companies Act 2013 is included in this Report as Annexure Vand forms part of this Report.
DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES
The Statement AOC-1 pursuant to the provisions of Section 129 (3) of the Companies Act2013 read with Rule 5 of the Companies (Accounts) Rules 2014 regarding Subsidiary Companyis enclosed as Annexure VI and forms part of this Report.
STATUTORY AUDITORS' AND AUDITORS' REPORT
At the 33rd Annual General Meeting held on 26th September 2016M/s. Deepak Mehta & Associates Chartered Accountants were appointed as StatutoryAuditors of the Company to hold office till the conclusion of the Annual General Meetingto be held in financial year 2021.
Further members of the Company at the Annual General Meeting (AGM') held onSeptember 28 2017 ratify the appointment of M/s. Deepak Mehta & AssociatesChartered Accountants as the statutory auditors of the Company for financial year2017-18.
In terms of the provisions relating to statutory auditors forming part of the CompaniesAmendment Act 2017 notified on May 7 2018 ratification of appointment of StatutoryAuditors at every AGM is no more a legal requirement. However pursuant to OrdinaryResolution passed at the 33rd AGM appointment shall subject to ratification atevery annual general meeting.
Hence the Notice convening the ensuing 35th AGM contained a resolution onratification of appointment of Statutory Auditors. Further M/s. Deepak Mehta &Associates Chartered Accountants has confirmed that they are eligible to continue asStatutory Auditors of the Company to audit the books of accounts of the Company for theFinancial Year ending March 31 2019 and they will continue to be the Statutory Auditorsof the Company for Financial Year ending March 31 2021.
Auditors Report as issued by M/s. Deepak Mehta & Associates Chartered AccountantsAuditors of the Company is self explanatory and need not call for any explanation by yourBoard.
In terms of Section 204 of the Act and Rules made there under M/s. Deep Shukla &Associates Practicing Company Secretaries have been appointed Secretarial Auditors ofthe Company. The Secretarial Audit Report is enclosed as Annexure VII to thisreport.
INTERNAL AUDIT & CONTROLS
The Company has in place adequate internal financial controls with reference to thefinancial statement. The Audit Committee of the Board periodically reviews the internalcontrol systems with the management Internal Auditors and Statutory Auditors. Significantinternal audit findings are discussed and follow-ups are taken thereon.
Further M/s. Gosar Associates Chartered Accountants M.No.045010 were appointed asInternal Auditors of the Company pursuant to section 138 of the Companies Act 2013.
EMPLOYEES' STOCK OPTION PLAN
The Company has not provided stock options to any employee.
In pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013a Vigil Mechanism for directors and employees to report genuine concerns has beenestablished. The Vigil Mechanism Policy has been uploaded on the website of the Company atwww.kananiindustries.com. The employees of the Company are made aware of the said policyat the time of joining the Company.
RISK MANAGEMENT POLICY
The Company has laid down the procedure to inform the Board about the risk assessmentand minimization procedures. These procedures are reviewed by the Board annually to ensurethat there is timely identification and assessment of risks measures to mitigate themand mechanisms for their proper and timely monitoring and reporting.
The Company does not fall under the ambit of top 100 listed entities determined on thebasis of market capitalisation as at the end of the immediately preceding financial year.Hence compliance under Regulation 21 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is not applicable.
CORPORATE GOVERNANCE REPORT
We ensure that we evolve and follow the corporate governance guidelines and bestpractices sincerely not only to boost long-term shareholder value but also to respectminority rights. We consider it our inherent responsibility to disclose timely andaccurate information regarding our operations and performance as well as the leadershipand governance of the Company.
Pursuant to the Listing Regulations the Corporate Governance Report along with theCertificate from a Practicing Chartered Accountants regarding compliance of conditions ofCorporate Governance is annexed as Annexure VIII and forms part of this Report.
The Company has neither accepted nor renewed any fixed deposits during the year underreview under Section 76 of the Companies Act 2013. There are no unclaimed depositsunclaimed / unpaid interest refunds due to the deposit holders or to be deposited to theInvestor Education and Protection Fund as on March 31 2018.
However during the financial year the Company has borrowed money(ies) from Directorsof the Company in pursuant to Rule 2(c)(viii) of the Companies (Acceptance of Deposits)Rules 2014 amended from time to time and said amount is not being given out of fundsacquired by him/them by borrowing or accepting loans or deposits from others.
LOANS & GUARANTEES
During the year under review the Company has not provided any loan guaranteesecurity or made any investment covered under the provisions of Section 186 of theCompanies Act 2013 to any person or other body corporate.
The properties/assets of the Company are adequately insured.
RELATED PARTY TRANSACTIONS
As no related party transaction was entered into by the Company with PromotersDirectors Key Managerial Personnel or other designated persons pursuant the provisions ofSection 188(1) of the Companies Act 2013 during the financial year 2017-18 theparticulars as required in form AOC-2 have not been furnished.
CONSERVATION OF ENERGY RESEARCH AND DEVELOPMENT TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE
The details of conservation of energy technology absorption foreign exchange earningsand outgo are as follows:
(a) Conservation of Energy:
Even though its operations are not energy-intensive significant measures are taken toreduce energy consumption by using energy-efficient equipment. The Company regularlyreviews power consumption patterns across all locations and implement requisiteimprovements/changes in the process in order to optimize energy / power consumption andthereby achieve cost savings. Energy costs comprise a very small part of the Company'stotal cost of operations. However as a part of the Company's conservation of energyprogramme the management has appealed to all the employees / workers to conserve energy.
(b) Absorption of Technology:
I. The efforts made towards technology absorption:
The Company values innovation and applies it to every facet of its business. Thisdrives development of distinctive new products ever improving quality standards and moreefficient processes.
The Company has augmented its revenues and per unit price realization by deployinginnovative marketing strategies and offering exciting new products. The depth of designingcapabilities was the core to our success over the years.
The Company uses the service of in-house designers as well as those of free-lancers indeveloping product designs as per the emerging market trends. The Company uses innovationin design as well as in technology to develop new products.
II. Benefits derived as a result of the above efforts:
As a result of the above the following benefits have been achieved:
a) Better efficiency in operations
b) Reduced dependence on external sources for technology for developing new productsand upgrading existing products c) Expansion of product range and cost reduction d)Greater precision e) Retention of existing customers and expansion of customer base f)Lower inventory stocks resulting in low carrying costs.
III. The Company has not imported any technology during the year under review;
IV. The Company has not expended any expenditure towards Research and Developmentduring the year under review.
(c) Foreign Exchange Earnings and Outgo:
(Amount in )
|Particulars ||FY 2017-2018 ||FY 2016-2017 |
|C.I.F. Value of Imports ||783374713 ||844491497 |
|F.O.B. Value of Exports ||792401700 ||787246776 |
TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of the Companies Act 2013 read with The Investor Educationand Protection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 asamended (Rules') the dividends unclaimed for a consecutive period of seven yearsfrom the date of transfer to the Unpaid Dividend Account of the Company are liable to betransferred to IEPF. Further the shares (excluding the disputed cases having specificorders of the Court Tribunal or any Statutory Authority restraining such transfer)pertaining to which dividend remains unclaimed for a period of continuous seven years fromthe date of transfer of the dividend to the unpaid dividend account are also mandatorilyrequired to be transferred to the IEPF established by the Central Government. Accordinglythe Company has transferred unclaimed dividend eligible to IEPF authority within statutorytimelines.
Any person whose unclaimed dividend and shares pertaining thereto matured depositsmatured debentures application money due for refund or interest thereon sale proceedsof fractional shares redemption proceeds of preference shares amongst others has beentransferred to the IEPF Fund can claim their due amount from the IEPF Authority by makingan electronic application in e-form IEPF-5. Upon submitting a duly completed formShareholders are required to take a print of the same and send physical copy duly signedalong with requisite documents as specified in the form to the attention of the NodalOfficer at the Registered Office of the Company. The e-form can be downloaded from thewebsite of Ministry of Corporate Affairs www.iepf.gov.in.
Shareholders are requested to get in touch with the RTA for encashing the unclaimeddividend/interest/principal amount if any standing to the credit of their account.
CORPORATE SOCIAL RESPONSIBILITY
The Company is committed to discharging its social responsibility as a good corporatecitizen.
The Board of Directors has framed a policy which lays down a framework in relation toCorporate Social Responsibility of the Company. This policy also lays down to lay downguidelines for the company to make CSR a key business process for sustainable developmentfor the Society. The details of this policy are explained by way of Annexure IX.
During the year under review the Company has not expended any amount towards CSRactivities as the same is not applicable to the Company pursuant to section 135 of theCompanies Act 2013.
As per the Cost Audit Orders and in terms of the provisions of Section 148 and allother applicable provisions of the Companies Act 2013 read with the Companies (Audit andAuditors) Rules 2014 Cost Audit is not applicable to our Company.
OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
In order to prevent sexual harassment of women at work place a new act The SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 hasbeen notified on 9th December 2013. Under the said Act every company isrequired to set up an Internal Complaints Committee to look into complaints relating tosexual harassment at work place of any women employee.
The Company has adopted a policy for prevention of Sexual Harassment of Women atworkplace and has set up Committee for implementation of said policy. During the yearCompany has not received any complaint of harassment.
The Company has in place proper systems to ensure compliance with the provisions of theapplicable secretarial standards issued by The Institute of Company Secretaries of Indiaand such systems are adequate and operating effectively.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
There are no significant and material orders passed by the Regulators / Courts /Tribunals which would impact the going concern status of the Company and its futureoperations.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:
There have been no material changes and commitments affecting the financial positionof the Company which have occurred between the end of the financial year of the company towhich the financial statements relate and the date of the report.
The Directors would like to thank all shareholders customers bankers suppliers andeverybody else with whose help cooperation and hard work the Company is able to achievethe results. The Directors would also like to place on record their appreciation of thededicated efforts put in by the employees of the Company.
| ||For and On behalf of the Board of Directors |
| ||PREMJIBHAI KANANI |
|Place: Mumbai ||CHAIRMAN WHOLE-TIME DIRECTOR |
|Date: 13-08-2018 ||DIN : 01567443 |