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Kapston Facilities Management Ltd.

BSE: 535064 Sector: Others
NSE: KAPSTON ISIN Code: INE542Z01010
BSE 05:30 | 01 Jan Kapston Facilities Management Ltd
NSE 05:30 | 01 Jan Kapston Facilities Management Ltd

Kapston Facilities Management Ltd. (KAPSTON) - Director Report

Company director report

Dear Shareholders

Your directors have pleasure in presenting their 10th Annual Report onthe business and operations of the company

together with the audited financial statements for the year ended 31stMarch 2018

1. Financial Highlights

The Company's operations during the year ended March 312018 aresummarized in the table below

( Tin Lakhs)

Particulars

Standalone

2017-18

2016-17

Revenue form Operation

11102.84

9063.08

EBIDTA

1117.40

718.28

Less: Financial Cost

259.23

156.57

Less: Depreciation

120.63

110.73

Pro t before prior period items

737.53

450.96

Prior period items

10.28

--

Pro t before tax

747.82

450.96

Less: Current Tax

181.82

175.37

Add: Deferred Tax Asset

35.49

13.04

Pro t Available for appropriations/Loss

601.50

288.63

Basic Earnings per Share

7.96

3.83

Diluted Earnings per share

7.96

3.83

Paid up share capital (face value of INR 10 each)

869.49

139.68

Reserves and Surpluses

1749.35

908.72

2. State of A airs/ Company's Performance

Your Directors wish to present the details of Business operations doneduring the year under review:

The Company's Revenue from operation for FY 2018 is Rs.11102.84 lakhswas higher by Rs.2039.76 lakhs over the last year. The Company has achieved EBIDTA(including other income) of Rs. 1117.40 Lakhs during the financial year 2018 as againstthat of EBIDTA of Rs. 718.28 lakhs for the previous financial year 2017. The profit beforetax for the financial year under review Rs. 747.82 lakhs as against Rs. 450.96 lakhs forthe previous financial year 2017.Pro t after tax was positively impacted by the taxbenefits availed under Section 80JJAA of the Income Tax Act1961 and deferred taxbenefits.

Your Directors express their satisfaction on the overall financialperformance and the progress made on di erent

areas by the Company during the year under review.

3. Initial Public officer ing and Utilization of IPO Proceeds

During the year under review the Company has completed an InitialPublic o ering (“IPO”) of its share consisting of a fresh o er of 1152000equity shares of Rs.10 each at a premium of Rs.82 per share and an o er for sale of1152000 equity shares of Rs.10 at a premium of Rs.82 per share by selling shareholders.

The equity shares of the Company were listed on National Stock Exchange(Emerge) platform for SME listing effective from April 4 2018

The proceeds of the IPO have been utilized in the below manner:(T in Lakhs)

Particulars

Projected Utilization of funds as per prospectus

Actual Utilization f funds as on th 12 July 2018

1 Part finance working capital requirements

660.75

660.75

2 Part Repayment of Unsecured Loans

200.00

200.00

3 Meet General Corporate Purposes

99.09

99.09

4 Meet issue Expenses

100.00

100.00

Total

1059.84

1059.84

4. Dividend

Your Directors would like to use the profits earned for the purposeof enhancing business and hence do not propose any dividend for the financial year underreview 2017-18.

5. Transfer to reserves

No amount has been transferred to reserves and the profit for theyear has been retained in the profit and loss account.

6. Transfer of unclaimed dividend to investor education andprotection fund

The provision of Section 125 of Companies Act2013 is not applicable asthe Company did not declare any dividend.

7. Share Capital

As on March 31 2018 the authorized share capital of the Company is90000000 divided into 9000000 equity shares of Rs.10 each

During the year under review the Company has allotted :

a. 279367 Equity Shares of T10 each pursuant to bonus issue as onAugust 052017. b. 5866707 Equity Shares of T10 each pursuant to bonus issue as onFebruary 222018. c. 1152000 Equity Shares of T10 each pursuant to an initial public oering of the Company as on March 28 2018.

As on March 312018 the paid-up share capital of the Company stood asRs. 86949090 consisting of 8694909

equity shares of T10 each.

8. Particulars of loans guarantees and investments

During the year under review your Company has not made any investmentgiven any loan or guarantee falling within the meaning of section 186 of the CompaniesAct2013 and the rules made thereunder.

9. Public deposits

During the financial year under review your company has not acceptedany deposits falling within the meaning of Section 73 of Companies Act 2013 read with theCompanies (Acceptance of Deposits) Rules2014.

10. Particulars of contracts or arrangements with related party

During the financial year under review all transactions with therelated parties are in compliance with the provisions of section 188 of Companies Act2013 and the details have been disclosed in the Financial Statements as required by theapplicable accounting standards.

11. Risk Management

Risk management is the process of identi cation assessment andprioritization of risks followed by coordinated orts to minimize monitor andmitigate/control the probability and/or impact of unfortunate events to maximize therealization of opportunities. The company has initiated a process of preparing acomprehensive risk assessment and minimization procedure. These procedures are meant toensure that executive management controls risk through means of a properly definedframework. The major risks are being identified by the company and its mitigationprocess/measures being formulated in areas of operations recruitment financial processesand reporting human resources and statutory compliance.

12. Management discussion and analysis

The Management Discussion and Analysis Report for the year under reviewas stipulated in SEBI Listing Regulations is presented in a separate section forming partof this Annual Report.

13. Conservation of energy technology absorption foreign exchangeearnings and outgo

The company being in the service industry does not have any powergeneration units and did not produce/generate any renewable or conventional power. Thecompany does not have any foreign exchange earnings and outgo.

14. Material changes and commitment a ecting financial position of thecompany from the end of the financial year till the date of the report

There is no material changes and commitment a ecting financial positionof the Company for the financial year 2017-18.

15. Disclosure under sexual harassment of women at workplace(prevention prohibition and redressal) Act2013

The company is committed to provide a safe and conducive workenvironment to its employees and has adopted a policy on prevention prohibition andredressal of sexual harassment at workplace in line with the provision of the sexualharassment of women at workplace (prevention prohibition and redressal) Act2013 and therules made thereunder.

During the year under review no complaints were reported as on date.

1 6. Committees of the board

The Board has three committees the audit committee the nomination andremuneration committee the stakeholder's relationship committee which are constituted asper the provisions of the Companies Act2013 the details of the above-mentionedcommittees are as follows:

Audit Committee
Name of the Member Position
1 Naveen Nandigam Chairman
2 Vanitha Nagulavari Member
3 Radha Krishna Pinnamaneni Member

Nomination and Remuneration Committee

Name of the Member Position
1 Vanitha Nagulavari Chairman
2 Kanti Kiran Doddapaneni Member
3 Naveen Nandigam Member

Stakeholders' relationship committee

Name of the Member Position
1 Radha Krishna Pinnamaneni Chairman
2 Srikanth Kodali Member

17. Meeting of the board of directors

During the financial year ended on 31 March 2018 Eighteen (18) boardmeeting held on 2 June 2017

20 July 2017 05 August 2017 2 August 2017 27 October 2017 11November 2017 25 November 2017 18

December 2017 27 December 2017 11 January 2018 12 January 2018 29January 2018

8 February 2018 21 February 2018 22 February 2018 5 March2018 14March 2018 28 March2018

18. Details of directors or key managerial personnel who were appointedor have resigned during the financial year 2017-18

On 29th January 2018 Srikanth Kodali was appointed as ManagingDirector and Kanti Kiran Doddapaneni was appointed as whole-time director.

The following directors and key managerial personnel were appointedduring the year under review

Date of appointment

DIN /PAN

Name Designation
11 January 2018

07420023

Kanti Kiran Doddapaneni Director
22 February 2018

02096757

Chereddi Ramachandra Naidu Independent Director
22 February 2018

02726620

Naveen Nandigam ndependent Director
22 February 2018

AIOPP9761H

Brendon Thomas Pereira CFO
12 January 2018

BIJPG6881R

AmreenGulnaaz Company Secretary

In the board meeting held on 22 February2018 Radha KrishnaPinnamaneni was re-designated as non-executive director of the company.

In the board meeting held on 30 May2018 Kanti Kiran Doddapaneni wasre-designated as non-executive director of the company.

Mr. Chereddi Ramachandra Naidu was appointed as an Independent Directoris re-designated as a Director pursuant to Section 152of the Companies Act 2013and wasappointed as an Executive Chairman with ect from 30 August2018 subject to the approval ofShareholders in the ensuing AGM.

Mrs. N Vanitha who meets the criteria for independence as provided insection 149(6) of the Act was appointed by the

Board of Directors subject to the approval of Shareholders in theensuing AGM for a term of 5 years with ect from 30 August2018.

In accordance with the provisions of Section 152 of the Companies Act2013 and the Articles of Associations of the Company Mr. Radha Krishna PinnamaneniDirector retire by rotation at the ensuing Annual General Meeting (AGM) and beingeligible o er himself for reappointment.

A brief pro le of the director seeking reappointment and appointmentform part of the notice of the ensuing Annual General Meeting.

19. Declaration by the Independent Directors :

During the year under review the independent directors of the companyhave submitted their disclosures to the Board that they fulfill all the requirements asstipulated in Section 149(6) of the Companies Act 2013 so as to qualify themselves to beappointed as Independent Directors under the provisions of the Companies Act 2013 and therelevant rules.

20. Directors Responsibility Statement

Pursuant to Section 134(5) of the Companies Act 2013 the Board ofDirectors to the best of their Knowledge and ability con rm that: i. In preparation ofthe annual accounts the applicable accounting standards had been followed along withproper explanation relating to material departures; ii. The directors have selected suchaccounting policies and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of a airs ofthe company at the end of the financial year and of the profit and loss of the company forthat period. iii. The directors have taken proper and sufficient care for the maintenanceof adequate accounting records in accordance with the provisions of this Act forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities. iv. The directors have prepared the annual accounts on a going concern;

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 have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.

Based on the framework of internal financial controls and compliancesystems established and maintained by the company work performed by the statutory andexternal consultants and the reviews performed by management and the relevant boardcommittees including the audit committee the board is of the opinion that the Company'sinternal financial controls were adequate and effective during the financial year 2017-18.

21. Insider Trading Regulations

Based on the requirements under SEBI (Prohibition of Insider Trading)Regulations 1992 as amended from time to time the code of conduct for prohibition ofinsider trading as approved by the board is implemented by the company. The company alsoadopts the concept of trading window closure to prevent its directors officersdesignated employees their relatives and other employees from trading in the securitiesof the company at the time when there is unpublished price sensitive information. Theboard has appointed Ms. Amreen Gulnaaz Company Secretary as the Compliance Officer underthe code.

22. Extract of Annual Return

In accordance with Section 134(3)(a) of the Companies Act 2013 anextract of the annual return of the Company for the financial year ended March 312018 isenclosed as Annexure I.

The extract of the annual return of the company is also hosted on thecompany's website at

https://www.kapstonfm.com/investors.html.

23. Statutory auditors

As per the provisions of Section 139 of the Companies Act2013 theterm of o ce of M/S NSVR and Associates LLP

Chartered Accountants as Statutory Auditors (who was appointed at theextra ordinary general meeting held on

29 January2018) will conclude at the close of the forthcoming AGM ofthe company.

The board of directors places on records their appreciation for theservices rendered by M/S NSVR and Associates LLP

Chartered Accountants based on the recommendation of audit committeesubject to the approval of shareholders the

board approved the appointment of M/S NSVR and Associates LLPChartered Accountants (Firm Registration No.0008801S/S200060) Hyderabad as StatutoryAuditor of the Company in their meeting held on 30 August2018till till the conclusion of14 Annual General Meeting subject to approval of the shareholders.

Members' attention is drawn to a Resolution proposing the appointmentof M/S NSVR and associates LLP Chartered Accountants as Statutory Auditors of the Companywhich is included at Item No 3 of the Notice convening the Annual General Meeting.TheCompany has received a certi cate from the Statutory Auditors to the ect that theirappointment

would be in accordance with the provisions of Section 141 of theCompanies Act 2013.

24. Auditors' ReporKapst t on

The Auditors' Report for scal 2018 does not contain any quali cationsreservations or adverse remarks. The Auditors'

Report is enclosed with the financial statements in this Annual Report.

25. Internal Financial Control

Your board has adopted the policies and procedures for ensuring theorderly and cient conduct of its business including adherence to the company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of accounting records and the timely preparation of reliablefinancial disclosures. Your directors express their satisfaction and states that thecompany is having the adequate internal finance control system to the size of itsoperation.

26. Details of significant and material orders passed by the regulatorsor courts or tribunals impacting the going concern status and company's operations infuture During the year under review there were no significant and material orderspassed by the regulators or courts or tribunals impacting the going concern status andcompany`s operations in future.

27. Whistle blower policy

The company has established a vigil mechanism for reporting concernsthrough the whistle blower policy of the company. The policy provides for a framework andprocess for the employees and directors to report genuine concerns or grievances aboutillegal and unethical behaviour. The whistle blower policy is available on the website ofthe Company (www.kapstonfm.com)

28. Particulars of employees

The information required under section 197 of the CompaniesAct2013 read with rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is presented in a separate section forming part of this annualreport.

29. Corporate Social Responsibility

The provisions of section 135 of the Companies Act2013 are notapplicable to the Company during the Financial year under review (i.e FY 2017-18) however the Company has voluntarily participated in Swachh Bharat Abhiyan in associationwith various corporates in and around the city of Hyderabad and have also arranged variousBlood donation camps for the benefit of society at large.We hope to serve the localcommunities by taking up good projects as a part of our Corporate Social Responsibility.

30. Green initiatives

The Company sends the Annual Report to its members in electronic formwhose email addresses are registered the company/depository participants(s). For memberswho have not registered email addresses physical copies are sent in the permitted mode.

In case of any change in your email address you are requested toplease inform the same to your Depository (in case you hold the shares in dematerializedform) or to the Company/RTA (in case you hold the shares in physical form).

31. Acknowledgement

Your Directors place on record their gratitude to the CentralGovernment various State Governments and Company's Bankers and Advisors for the valuableadvice guidance assistance cooperation and encouragement they have extended to theCompany from time to time. The Directors also take this opportunity to thank the company'scustomers suppliers and shareholders for their consistent support to the Company.

We place on record our appreciation for the contribution made by ouremployees at all levels. Our consistent growth was made possible by their hard worksolidarity cooperation and support.

For and on behalf of the Board

Srikanth Kodali

Managing Director

(DIN 02464623)

Kanti Kiran Doddapaneni

Director (DIN 07420023)

Place: Hyderabad Date: 30.08.2018