Your directors hereunder submit their 46 Annual Report together withthe audited accounts for the year ended March 31 2022 (the year).
|Performance Highlights ||2021-22 ||2020-21 |
| || |
(Rupees in Lakhs)
|Revenue from Operations ||319 ||254 |
|Other Operating income || || |
|Other income ||259 ||153 |
|Total Turnover ||578 ||407 |
|Gross profit/(Loss) (i.e. Profit/(Loss) before interest tax and depreciation) ||231 ||106 |
|Cash profit/(Loss) (i.e. Profit / (Loss) before depreciation and tax) ||72 ||(64) |
|Profit/(Loss) before exceptional Item and tax ||43 ||(94) |
|Exceptional Item: || || |
|Profit/(Loss) after exceptional Item (before tax) PBT ||43 ||(94) |
|Tax Expense: || || |
|Current Tax Current year ||15 || |
|- MAT credit utilised || || |
|Deferred tax || || |
|Profit/(Loss) after exceptional Item and tax PAT ||28 ||(94) |
|Earnings per share - basic and diluted Rs. ||0.71 ||(2.43) |
In view of the loss incurred during the year no dividend isrecommended by your Board of Directors for the financial year 2021-22.
The aggregate of current year profit of Rs. 27.52 lakhs is added to thenegative retaining earnings as at the beginning of the year of (Rs. 3813.19 lakhs) and thenegative retained earnings as at the end of the year is (Rs. 3785.67 lakhs).
Financial Performance with respect to Operational Performance:
During the financial year 2021-22 the Company has earned lease incomeof Rs. 180 lakhs. Further the Company has carried trading of yarn and earned revenue ofRs. 318.76 lakhs. With the approval earlier obtained from the shareholders through specialresolution passed through postal ballot on 19.12.2016 and approval given by the Board ofDirectors at their meeting held on 28.06.2021 out of the total 30.4475 acres of windmillland situated at Pazhavoor village Tirunelveli district the Company had sold 23.9418acres of land for a total sale consideration of Rs. 74.98 lakhs and had also received saleadvance amount of Rs. 62.77 lakhs for remaining portion of land measuring 2.701 acresduring the financial year 2021-22. By sale of windmill land asset the Company has earnedprofit of Rs. 76.40 lakhs. The sale proceeds were utilised for discharging the liabilitiesof the Company.
The total turnover of the Company during the FY 2021-22 is Rs. 577.70lakhs as against the previous year turnover of Rs. 406.60 lakhs. The Company has incurredprofit before tax of Rs. 42.52 lakhs and profit after tax of Rs 27.52 lakhs in thefinancial year 2021-22 as against the previous year loss of Rs. 93.59 lakhs.
MANAGEMENT DISCUSSION AND ANALYSIS
(a) Industry structure and developments and future outlook:
During the financial year 2021-22 the Company continued to lease outits immovable property and earned lease rental income. The Company carried out yarntrading business and generated revenue during the financial year 2021-22. However theCompany has incurred cash loss (except the profit on sale of assets of Rs. 76.40 lakhs)and generated negative cash flows and there has been an erosion of networth. The qualityof goods produced hitherto by company has generated goodwill and brand image. The Board ofDirectors hope to continue to use these advantages by continuing trading business.
(b) Strategies and Future plans
The quality of goods produced hitherto by company has generatedgoodwill and brand image. The Board of Directors hope to continue to use these advantagesby continuing trading business. The Company is exploring all the possibilities to revivein the near future.
(d) Risks and Concerns
Your Company has devised risk management policy which involvesidentification of the business risks as well as the financial risks its evaluationmonitoring reporting and mitigation measures. The Audit Committee and Board of Directorsof the Company periodically review the risk management policy of the Company so thatmanagement controls the risk through properly defined network. Head of Departments areresponsible for implementation of the risk management system as may be applicable to theirrespective areas of functioning and report to the Board and the Audit Committee. Thedetails of risk management mechanism and key risks faced by the Company are enumerated inthe risk management policy. Risk management policy is uploaded in the company's websitewww.kandagirimills.com.
(e) Internal control systems
The Company has in place a well established internal controlprocedures. Necessary checks and balances have been instituted for timely correction withan effective internal audit system.
(f) Human resources management
Employees are your company's most valuable resource. Your Companycontinues to create a favourable environment at work place.
The company also recognises the importance of training and consequentlydeputes its work force to training and development. The fact that the relationship withthe employees continued to be cordial is testimony to the company's ability to retain highquality workforce.
(g) Environmental Protection Health and Safety (EHS)
EHS continues to receive the highest priority in all operational andfunctional areas at all locations of your Company. Systematic process safety analysisaudits periodic safety inspections are carried out by expert agencies and suitablecontrol measures adopted for ensuring safe operations at the site. Various processes asrequired for Pollution Control and Environmental Protection are strictly adhered to.
(h) Corporate Social Responsibility
The CSR provisions became inapplicable to the Company and accordinglythe CSR Committee was dissolved by the Board with effect from 18.06.2020. There is no CSRobligation for the Company for the FY 2021-22 in accordance with the provisions of section135 of the Companies Act 2013. Accordingly requirement of CSR disclosure in requiredformat is not applicable for the Company
( .i.) Change in Key ratios
Details of significant changes on following ratios (i.e. changes if 25% or more as compared to immediately previous financial year
| ||FY 2021-22 ||FY 2020-21 ||change ||change % |
|a. Debtors turnover ratio ||65 ||299 ||(234) ||(78.26) |
|b. Inventory turnover ratio || ||58 ||(58) ||(100) |
|c. Interest coverage ratio ||1.28 ||0.62 ||0.66 ||106.45 |
|d. Current ratio ||0.01 ||0.20 ||(0.19) ||(86.50) |
|e. Debt equity ratio ||(0.533) ||(0.531) ||(0.002) ||(0.38) |
|f. Operating profit margin % ||63.36 ||30.12 ||33.24 ||110.36 |
|g. Net profit margin % ||8.63 ||(36.83) ||45.46 ||123.43 |
|h. Return on net worth % ||(1.02) ||(3.42) ||2.40 ||70.18 |
The Company continued to let its immoveable property of land andbuilding for lease and had regular lease income. The Company carried out yarn tradingbusiness and generated revenue during the financial year 2021-22. Eventhough the Companyhas incurred cash loss the profit on sale of assets of Rs. 76.40 lakhs has resulted inoverall profit for the Company. Because of these reasons there had been significantchanges in the key ratios as compared to previous year.
Annual Return in the prescribed Form MGT-7 has been placed in theCompany's website www.kandagirimills.com
Number of Board Meetings
Four Board Meetings were held during the year under review and the gapbetween two meetings did not exceed one hundred and twenty days. The said meetings wereheld on June 28 2021 August 13 2021 November 13 2021 and February 14 2022. Thenecessary quorum was present for all the meetings.
Establishment of Vigil Mechanism
The Company has established a vigil mechanism for Directors andemployees to report their genuine concerns. The policy has been uploaded on the Company'sweb site under the web link: http://www.kandagirimills.com/investors/ksml2014-wbp.pdf
Declaration by Independent Directors
Independent directors of the Company have submitted a declaration thateach of them meets the criteria of independence as provided in Sub-Section (6) of Section149 of the Act. Further there has been no change in the circumstances which may affecttheir status as Independent director during the year.
Compliance with Secretarial Standards
The Company has adhered compliance on applicable Secretarial Standards.
Secretarial Audit Report
Company has appointed M/s B. K. Sundaram & Associates PractisingCompany Secretaries as Secretarial Auditors to conduct Secretarial Audit particularlywith reference to compliance with Companies Act 2013 and relevant SEBI Regulations forthe financial year 2021-22. The report of the Secretarial Audit for the financial year2021-22 in FORM MR-3 is annexed to this report and forms part of this report.
Audit Committee as on 31 March 2022 comprises of three members viz.CA S. Elangovan Independent Director as Chairman CS S. Gnanashekaran IndependentDirector and Dr. A. Sarayu Non-Executive Director as Members. Further during this yearall the recommendations of the Audit Committee have been accepted by the Board.
Policy of Directors Appointment and Remuneration
Company's policy on Directors' appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a directorand other matters provided under section 178(3) of the Act are covered under Nominationand Remuneration Policy and it is available in the web-link of the Companyhttp://www.kandagirimills.com/investors/ksml2015-nrp.pdf. Further information aboutelements of remuneration package of individual directors is provided in the Annual Returnin prescribed form MGT-7 uploaded in the Company's website www.kandagirimills.com.
Independent Auditors' Report
The Independent Auditors report contains qualified opinion with respectto to 'Material uncertainty related to going concern' the explanation is provided asfollows:
The Company continued to lease out its immoveable property and earnedlease rental income. The quality of goods produced hitherto by company has generatedgoodwill and brand image. The Board of Directors hope to continue to use these advantagesby continuing yarn trading business and the promoters have given assurance of infusion offunds as and when deemed necessary. Considering the above the Board of Directors deem itfit to continue adoption of Going Concern Concept in preparation of the financialstatements although the Statutory auditors have qualified their opinion with respect tothe same.
The Auditors of the Company have not reported any fraud as specifiedunder section 143(12) of the Companies Act 2013.
Particulars of Employees
The information required under section 197 of the Act and rules madethere-under in respect of employees of as shown below:
(a) Employed throughout the year and in receipt of remunerationaggregating to Rs.10200000 or more - Nil
(b) Employed for part of the year and in receipt of remuneration ofRs.850000 or more per month - Nil
Note : Remuneration includes salary and value of perquisites and natureof employment is contractual.
Statistical Disclosures pursuant to Rule 5 of Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 with subsequent amendments theretois annexed with this report and forms part of this report.
Related Party Transactions
Transactions entered with related parties have been explained in FormAOC -2 annexed with this report and forms part of this report. Further Policy on dealingwith Related Party Transactions has been uploaded on the Company's website under the weblink: http://www.kandagirimills.com/investors/ksml2014-rptp.pdf
In accordance with the provisions of Companies Act 2013 and SEBI(LODR) Regulations 2015 read with "Guidelines on Board Evaluation issued by SEBIvide its Circular dt. January 5 2017 In the separate meeting of the Independentdirectors performance of non-independent directors performance of the board as a wholeand performance of the Chairman was evaluated taking into account the views of executivedirectors and non-executive directors.
The same was discussed and noted by the Board at the next Board Meetingfollowed the meeting of the Independent directors. Further Board carried out an annualevaluation of its own performance Board committees and individual directors pursuant tothe provisions of Companies Act 2013 and SEBI (LODR) Regulations 2015 read with"Guidelines on Board Evaluation issued by SEBI vide its Circular dt. January 5 2017
The performance of the Board was evaluated by the Board after seekinginputs from all the directors on the basis of criteria such as the Board Composition andstructure effectiveness of the Board processes information and functioning etc. Theperformance of the Committees was evaluated by the Board after seeking inputs from theCommittee members on the basis of the criteria such as the composition of committeeseffectiveness of committee meetings etc. The Independent Directors were evaluated withoutthe presence of the director getting evaluated.
None of the Independent Directors have been proposed for reappointmentthis year.
Exemptions from certain regulations of SEBI (LODR) Regulations 2015
Since the Company's paid-up capital is less than Rupees Ten crores andnetworth is less than rupees twenty five crores the regulations 17 to 27 clauses (b) to(i) and (t) of sub-regulation (2) of regulation 46 and para C D and E of Schedule V ofSEBI (LODR) Regulations 2015 are not applicable to the Company. Accordingly report onCorporate Governance Report is not provided.
The following are the details of deposits (accepted from the shareholders) coveredunder Chapter V of the Act
.i. Deposits at the beginning of the year on 01 April 2021: Rs. 9.00 lakhs
ii. Deposits Accepted from shareholders during the year (2021-22): NIL
iii. Deposits repaid during the year (2021-22): Rs. 9.00 lakhs
iv. Deposits outstanding at the end of the financial year on 31 March 2022: NIL
v. Remained unpaid or unclaimed as at the end of the year : NIL
vi. Any default in repayment of deposits or payment of interest thereon during theyear: NIL
Company has duly complied with the provisions of section 73 of the Companies Act 2013read with relevant rules with respect to fixed deposits.
The following are the details of deposits accepted from the Directors :
.i. Deposits at the beginning of the year on 01 April 2021: Rs. 1441.57 lakhs
ii. Deposits accepted from Directors during the year (2021-22): NIL
iii. Deposits repaid during the year (2021-22): NIL
iv. Deposits outstanding at the end of the financial year on 31 March 2022: Rs.1441.57lakhs
v. Remained unpaid or unclaimed as at the end of the year : NIL
vi. Any default in repayment of deposits or payment of interest thereon during theyear: NIL
Cost Audit Report
The turnover of the Company for the FY 2020-21 is Rs. 4.07 crore which is below Rs. 35crore and accordingly the company will not come under the purview of both maintenance ofcost records and audit of cost records for the FY 2021-22.
At the 43 AGM of the Company held on 11.08.2019 Independent DirectorSri. S. Gnanasekharan was reappointed for five consecutive years from 11.08.2019 to10.08.2024.
At the 44 AGM of the Company held on 23.09.2020 with the approval ofshareholders Dr. A. Sarayu was appointed as Non-Executive Director of the Company liableto retire by rotation and CA S. Elangovan was appointed as Non-Executive IndependentDirector of the Company to hold office upto the conclusion of 48 AGM of the Company.
Non-Executive Director Dr. A. Sarayu retires by rotation at thisensuing (46 ) Annual General Meeting of the Company and being eligible offers herself forreappointment. The resolution has been placed in the notice for member's approval.
On the recommendation of Nomination and Remuneration committee Boardhas appointed Sri S. Devarajan as an Additional Director (Non-Executive) of the Companywith effect from 06-05-2022 to hold office upto this ensuing 46 AGM of the Company.Further on the recommendation of Nomination and Remuneration committee Board hasrecommended for appointment of Sri S. Devarajan as a Non-Executive Director of theCompany liable to retire by rotation and has placed the resolution in the notice of theensuing 46 AGM of the Company for member's approval
Company's Code of Conduct applicable to the board has been adopted bythe board and all directors of the company have confirmed compliance with the Code ofConduct.
Sri R. Selvarajan was reappointed as Managing Director of the Companyat the 45 AGM of the Company held on 25.09.2021 for a period of three years (from01.10.2021 to 30.09.2024).
Key Managerial Personnel
MD and CFO didn't receive any remuneration during the financial year2021-22
At the 42 Annual General Meeting held on 11.08.2018 M/s R.Sundararajan & Associates Chartered Accountants were reappointed as statutoryAuditors of the Company from the financial year 2018-2019 to 2021-2022. The term of theStatutory Auditors M/s R. Sundararajan & Associates Chartered Accountants expires atthe conclusion of this ensuing 46 AGM of the Company.
CA Krishnen & Associates Chartered Accountants have expressedtheir eligibility and willingness to get appointed as Statutory Auditors of the Company atthe ensuing 46 Annual General Meeting of the Company for conduct of Statutory Audit of theCompany for five consecutive years from the financial year 2022-23 to financial year2026-27. On the recommendation of the Audit Committee Board has recommended for theirappointment and has placed the resolution in the notice of the ensuing 46 AGM of theCompany for member's approval.
Particulars of Loans Guarantees or Investments under Section 186 ofthe Companies Act 2013
Details of loans guarantees and investments covered under theprovisions of Section 186 of the Companies Act 2013 are given in the note 41 of the notesto the Standalone financial statements.
Disclosure as per Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013
The Company has zero tolerance for sexual harassment at workplace andhas adopted a policy on prevention prohibition and redressal of sexual harassment atworkplace in line with the provisions of Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the rules framed thereunder. TheCompany has set up a Committee for addressing issues related to women and during thefinancial year 2021-22 there were no complaints received on sexual harassment.
Performance of Associate Company
Your Company has an associate M/s SPMM Healthcare Services PrivateLimited within the meaning specified under Section 2 (6) of Companies Act 2013. M/s SPMMHealthcare services private Limited has recorded a total revenue of Rs. 659.86 lakhsduring the year 2021-22 as against Rs. 399.83 lakhs in the previous year and profit aftertax of Rs. 126.71 lakhs during the year 2021-22 as against Rs. 9.54 lakhs in the previousyear. A separate statement containing the salient features of the financial statement ofthe associate in FORM AOC -1 has also been annexed with this report as per therequirements of provisions of section 129 of the Companies Act 2013 and forms part ofthis report.
Significant and Material Orders passed by the Courts or Tribunalsimpacting the Company : NIL
Material Changes and Commitments during the year if any occurredbetween the end of the year and the date of this report
There were no material changes and commitments between the end of theperiod under review and the date of this report which could have an impact on theCompany's operation in the future or its status as a "going concern".
Conservation of energy technology absorption Research and developmentand foreign exchange earnings and outgo : NIL
l There is no proceeding pending under the Insolvency and Bankruptcy Code 2016.
l There was no instance of onetime settlement with any Bank or Financial Institution.
Annexures to this Report
The following are the annexures to this report
1. Director's Responsibility Statement in Annexure 1
2. Statement containing salient features of the financial statement of associatecompany (Form AOC 1) in Annexure 2
3. Form AOC 2 in Annexure 3
4. Secretarial Audit Report (Form MR-3) in Annexure 4
5. Particulars of Remuneration in Annexure 5
6. CEO/CFO Certification in Annexure 6
Statements in the Directors' report and the Management discussion andanalysis describing the Company's objectives expectations or predictions may be forwardlooking within the meaning of applicable securities laws and regulations. Actual resultsmight differ materially from those either expressed or implied in the statement. Importantfactors that could influence the Company's operations include global and domestic economicconditions government regulations tax laws economic developments within the country andother related factors such as litigation and industrial relations.
Directors of your Company record their sincere appreciation of thededication and commitment of all employees. Your directors thank the ManagementShareholders Customers Suppliers Bankers and other stakeholders for their continuedsupport during the year. The directors of your company thank Central/State Governments andother government agencies for their support and look forward to their continued support infuture.
| ||For and on behalf of the Board |
|Salem ||S. Gnanashekaran |
|May 30 2022 ||Chairman |
| ||(DIN : 06796817) |