KCD Industries India Limited
(formerly known as Ruchia Industries India Limited)
Your Directors are pleased to present their 35th Annual Report togetherwith the Audited Financial Statements for the financial year ended on 31stMarch 2020 and the Auditor's Report thereon.
1. FINANCIAL PERFORMANCE OF THE COMPANY (STANDALONE):
|Particulars ||31st March 2020 (in Rs.) ||31st March 2019 (in Rs.) |
|Total Income ||14295753 ||1568760 |
|Less: Expenditure ||12860918 ||740280 |
|Profit Before Tax for the Year ||1434835 ||828480 |
|Less: Tax Expenses ||365781 ||131131 |
|Profit After Tax for the Year ||1069054 ||697349 |
2. RESULT OF OPERATIONS& STATE OF COMPANY S AFFAIR:
Financial Year 2019-20 has been a challenging year with weakening macro-economicconditions slowing market growths and finally COVID-19 outbreak and containment measurestowards the end of the year. Against this challenging backdrop we have deliveredcompetitive and profitable growth. We have grown competitively overall in the segments inwhich we operate in financial year 2019-20.
During the year under review the Company has registered Total Income of Rs.14295753/- as against Rs. 1568760/- during FY 2018-19 and profit of Rs. 1069054/-against Rs. 697349/- in FY 2018-19. There has been no change in the Business of thecompany during the financial year ended on 31stMarch 2020.
Impact of CoVID-19:
During the last quarter of the year under review the incidence of CoVID-19 developedinto a global pandemic. The directors have assessed the impact of CoVID-19 on the businessof the Company and there are significant adverse impact on business revenue and changes ason balance sheet date. The company continues to handle its business operations althoughoperations of the Company have been disrupted due to the current lockdown conditions inmost part of the country.
Due to the worldwide uncertainty caused by CoVID-19 and its potential to impact thecompany the company has put in place mitigation plans to minimize the adverse impact onboth revenue and profitability. There are no material changes or commitments affecting thefinancial position of the Company between the end of the financial year and the date ofthe report.
The Board of Directors has not recommended any dividend for the financial year ended on31st March 2020 as the Board have considered it financially prudent in thelong-term interest of the company so as to re-invest the profits into the business of thecompany and to build its strong reserve base and assure the growth of the Company in longrun.
4. TRANSFER TO RESERVES:
The Board does not propose to make transfer to reserves for the year 2019 20 andinstead intends to retain the net profit in the Profit & Loss Account for the yearended 31st March 2020.
5. SHARE CAPITAL:
Authorised Share Capital:
The Authorised share capital of the Company as at 31st March 2020 is Rs.25000000/- divided into 5000000/- Equity shares of Rs. 5/- each.
Issued & Subscribed Share Capital:
The Issued & Subscribed Capital of the Company as at 31st March 31 2020is Rs. 10000000/- divided into 2000000/- Equity Shares of Rs. 5/- each.
6. MATERIAL CHANGES AND COMMITMENTS DURING THE YEAR: Shifting of registeredOffice:
During the year under review the Company had shifted its Registered Office from"126 Damji Shamji Estate LBS Marg Vikhroli (West) Mumbai 400 083" to"501 5th Floor Ruby Crescent Business Boulevard Ashok Chakravati RoadKandivali (East) Mumbai 400 101" post approval of Board on 11thJune2019.
Name change of the Company:
During the year under review name of the Company has been change from "RuchikaIndustries India Limited" to "KCD Industries India Limited" as a rebrandingstrategy. Ministry of Corporate affairs approved name change of the company wide itsapproval dated 4th October 2019. While BSE Limited approved name changeapplication on 7th October 2019.
Proposed Preferential Allotment:
The Company has proposed raising of funds through Preferential Allotment/ PrivatePlacement up to Rs. 53875000/- (Rupees Five Crores Thirty Eight Lakhs Seventy FiveThousand only) by issue of 2500000 (Twenty Five lakhs) Convertible Equity Warrants inaccordance with the Securities and Exchange Board of India (Issue of Capital andDisclosure Requirements) Regulations 2018.
In this regard the Company has obtained approval of its members by passing specialresolution on 14th January 2020 and received approval of In-principalapplication made to BSE Limited on 12th March 2020. However due to lock downenforced by the Central and State Government because of CoVID-19 breakout thesubscription and Allotment of 2500000 (Twenty Five lakhs) Convertible Equity Warrantcould not be completed within the prescribed time limit.
7. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE ENDOF THE FINANCIAL YEAR AND DATE OF REPORT:
There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the financial year and the date ofthis Report.
The Company has not accepted any deposits from the public and as such no amount onaccount of principal or interest on deposits from public was outstanding as on the date ofthe balance sheet for the Financial Year 2019 2020.
9. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE U/S 186 OF THE COMPANIESACT 2013: The particulars of loans guarantees and investments have been disclosed inthe financial statements which also form part of this report.
10. CORPORATE SOCIAL RESPONSIBILITY:
The Company has not developed and implemented any Corporate Social ResponsibilityInitiatives as per the provisions of section 135(1) of the Companies Act 2013 read withCompanies (Corporate Social Responsibility Policy) Rules 2014 as the aforesaid provisionsare not applicable to the Company.
11. CONSERVATION OF ENERGY RESEARCH AND DEVELOPMENT TECHNOLOGY ABSORPTION FOREIGNEXCHANGE EARNINGS AND OUTGO:
The particulars as prescribed under sub-section (3)(m) of section 134 of the CompaniesAct 2014 read with Rule 8(3) of Companies (Accounts) Rules 2014 are annexed herewith at"Annexure Ih.
12. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:
The details with respect to the internal control systems and internal Audit has beenbriefed in Management Discussion and Analysis Report which is annexed herewith as "AnnexureII".
13. INDEPENDENT DIRECTOR S DECLARATION:
The Company has received necessary declaration from each Independent Director underSection 149(7) of the Companies Act 2013 that he / she meets the criteria ofIndependence as laid down in Section 149(6) of the Companies Act 2013.
14. COMPANY S POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS:
Your Company has been following well laid down policy on appointment and remunerationof Directors KMP and Senior Management Personnel. The appointments of Directors are madepursuant to the recommendation of Nomination and Remuneration Committee. The remunerationof Executive Directors comprises of Basic Salary and Perquisites and follows applicablerequirements of the Companies Act 2013. Approval of shareholders and the CentralGovernment if so required for payment of remuneration to Executive Directors is soughtfrom time to time. A brief of the Policy on appointment and remuneration of Directors KMPand Senior Management is uploaded on the Company s website at www.kcdindustries.com. TheCompany s Remuneration Policy for Directors Key Managerial Personnel and SeniorManagement is enclosed as AnnexureIII to this Report.
15. BOARD EVALUATION:
In terms of provisions of Companies Act 2013 read with rules issued there under andSEBI (LODR) Regulations 2015 the Board of Directors on recommendation of the Nominationand Remuneration Committee have evaluated the effectiveness of the Board/Director s forthe Financial Year 2019 2020.
The performance and functioning of the board was evaluated by the board after seekinginputs from all the directors on the basis of the criteria such as the board compositionand structure effectiveness of board processes information and functioning etc.
The Committees of the Board were assessed after seeking inputs from the committeemembers on the basis of the criteria such as the composition of committees effectivenessof committee meetings etc.
The Board and the Nomination and Remuneration Committee reviewed the performance of theindividual Directors on the basis of the criteria such as the contribution of theindividual Director to the Board and Committee Meetings like preparedness on the issues tobe discussed meaningful and constructive contribution and inputs in meetings etc. Inaddition the Chairman was also evaluated on the key aspects of his role.
In a separate meeting of Independent Directors performance of Non-IndependentDirectors performance of the Board as a whole and performance of the Chairman wasevaluated taking into account the views of Executive Directors and Non-ExecutiveDirectors. The same was discussed in the Board Meeting that followed the Meeting of theIndependent Directors at which the performance of the Board its Committees andindividual Directors was also discussed. Performance evaluation of Independent Directorswas done by the entire Board excluding the Independent Director being evaluated.
16. DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:
|Sr. Name of the Director No and KMP ||Designation ||Date of Appointment ||Date of Resignation |
|1. Mrs. Kavita Iyer ||Chairman and Managing Director ||11th June 2019 ||- |
|2. Mr. Sanjay Patkar ||Executive Director ||8th April 2019 ||- |
|3. Mr. Virendra Panchal ||Additional Non-executive Director ||15th October 2019 ||- |
|4. Mrs. Minal Panchal ||Independent Director ||8th April 2019 ||- |
|5. Mr. Pratik Popat ||Independent Director ||8th April 2019 ||- |
|6. Mr. Manish Patel ||Independent Director ||16th August 2019 ||- |
|7. Mr. Rajni Shah ||Independent Director ||8th June 2015 ||8th April 2019 |
|8. Mr. Satish Phoolchand Rajbhar ||Independent Director ||8th June 2015 ||15 th April 2019 |
|9. Mrs. Zakhana Gandhi ||Non-executive Director ||5th May 2011 ||15 th October 2019 |
|10. Mr. Govind Chaubey ||Executive Director ||15th February 2019 ||25 th October 2019 |
|11. Mr. Arun Kuttan ||Chief Financial Officer ||11th June 2019 ||- |
|12. Mr. Rajiv Darji ||Chief Executive Officer ||11th June 2019 ||- |
|13. Mrs. Deepika Undhad ||Company Secretary &Compliance Officer ||11th June 2019 ||- |
17. CHANGES IN DIRECTORS AND KMPs: Directors:
Mr. Virendra Panchal (DIN: 08345182) on recommendation of the Nomination &Remuneration Committee was appointed by the Board as an Additional Non-executive Directoron 15th October 2019 and subject to the approval of the Members in theensuing Annual General Meeting would continue as a Non-executive Director of the Company.
Retirement by Rotation:
In accordance with the provisions of Section 152 of the Companies Act 2013 Mr. SanjayPatkar (DIN: 08349171) will retire by rotation at the AGM and being eligible has offeredhimself for reappointment. Your Board has recommended his re-appointment.
Key Managerial Personnel:
There is no change in Key Managerial Personnel during the year under review.
18. NUMBER OF MEETINGS OF THE BOARD:
During the year the Board met 14 (Fourteen) times to deliberate on various matters.The Meetings were held on 8th April 2019 15th April 2019 10thMay 2019 24th May 2019 11th June 2019 13th August2019 16th August 2019 15th October 2019 25thOctober 2019 14th November 2019 19th December 2019 10thJanuary 2020 11th January 2020 18th March 2020 . The maximuminterval between any two meetings did not exceed 120 days.
19. INDEPENDENT DIRECTORS MEETING:
During the year under review Independent Directors met on 11thJanuary2020 inter-alia to discuss:
a) Evaluation of the performance of Non-Independent Directors and the Board as whole.
b) Evaluation of the performance of the Chairman of the Company taking into accountthe views of the Executive and Non- executive Directors.
c) Evaluation of the quality quantity content and timeless of flow of informationbetween the management and the Board.
20. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:
Particulars of contracts or arrangements with related parties referred to in section188(1) of the Companies Act 2013 read with Rule 8(2) of Companies (Accounts) Rules 2014in prescribed Form AOC 2 is annexed herewith at "Annexure IV".
21. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES:
The Company does not have any Subsidiary Joint Venture or Associate Company. Henceprovisions of section 129(3) of the Companies Act 2013 relating to preparation ofconsolidated financial statements are not applicable.
22. VIGIL MECHANISM / WHISTLE BLOWER POLICY:
As per the provisions of Companies Act 2013 every Listed Company shall establish avigil mechanism (similar to Whistle Blower mechanism). In pursuance of the provisions ofsection 177(9) & (10) of the Companies Act 2013 the Company has adopted the WhistleBlower Mechanism for Directors and Employees to report on concerns about unethicalbehaviour actual or suspected fraud or violation of the Company s Code of Conduct andEthics. There has been no change to the Whistleblower Policy adopted by the Companyduring Financial Year 2020.
23. CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING:
The Company has adopted a Code of Conduct for Prevention of Insider Trading under theSEBI (Prohibition of Insider Trading) Regulations 2015. The Code lays down guidelines forprocedures to be followed and disclosures to be made by insiders while trading in thesecurities of the Company. The Company has also adopted a Code of Corporate DisclosurePractices for ensuring timely and adequate disclosure of Unpublished Price SensitiveInformation by the Company to enable the investor community to take informed investmentdecisions with regards to the Company s shares.
The policy is uploaded on the Company s website and can be viewed atwww.kcdindustries.com
24. PARTICULARS OF EMPLOYEES U/S 197(12) OF THE COMPANIES ACT 2013:
The Information & Statement of Particulars of employees pursuant to Section 197 ofthe Companies Act 2013 and Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is annexed as gAnnexure Vh.
25. DISCLOSURES WITH RESPECT TO DEMAT SUSPENSE ACCOUNT/UNCLAIMED SUSPENSE ACCOUNT:
|Sr. No. Particulars ||Details |
|1. Aggregate number of shareholders whose shares are lying in demat suspense account at the beginning of the year ||1 |
|2. Outstanding shares lying in demat suspense account at the beginning of the year ||212440 |
|3. Number of shareholders who approached the company for transfer of shares from suspense account during the year ||9 |
|4. Number of shareholders to whom shares were transferred from suspense account during the year ||3200 |
|5. Aggregate number of shareholders whose share are lying in demat suspense account at the end of the year ||1 |
|6. Outstanding shares lying in demat suspense account at the end of the year ||209240 |
Note: The voting rights on these shares shall remain frozen till the rightful ownerof claims the shares. such shares
26. DIRECTORS RESPONSIBILITY STATEMENT:
In terms of section 134(5) of the Companies Act 2013 your Directors state that: -
(a) In the preparation of the annual accounts the applicable accounting standards havebeen followed;
(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 the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;
(d) The Directors have prepared the annual accounts on a going concern basis.
(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 system to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
27. COMMITTEES OF THE BOARD:
The Company has duly constituted the Committees required under the Companies Act 2013read with applicable rules made there under and the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. The Committees of the Board formed are asunder:
i. Audit Committee;
ii. Stakeholders Relationship Committee;
iii. Nomination and Remuneration Committee.
The details with respect to the composition powers roles terms of referenceMeetings of all the relevant committees are provided in the report on corporate governanceof the Company which forms part of this Annual Report.
28. CORPORATE GOVERNANCE:
As per Regulation 15 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Corporate Governance provisions are not applicable to your Company.However the Company thinks that it a good practice to follow the governance to increasethe stakeholders trust and provide you with a separate Report on Corporate Governance. Thesaid report forms part of this Annual Report and also contains certain disclosuresrequired under the Companies Act 2013.
29. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR
COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY S
OPERATIONS IN FUTURE:
During the period under review no material orders have been passed by the regulatorsor courts or tribunals impacting the going concern status and company s operation infuture.
30. AUDITORS & AUDITORS REPORT: Statutory Auditors:
Pursuant to the provisions of section 139 of the Companies Act 2013 and rules framethere under M/s. Kapish Jain & Associates Chartered Accountants (FRN: 022743N) wereappointed as a Statutory Auditors of the Company from the conclusion of Annual GeneralMeeting held on 10th September 2019 for the period of five year. M/s KapishJain & Associates resigned from their office on 14th October 2019 due todisagreement on Remuneration.
To fill the casual vacancy arise due to resignation of M/s. Kapish Jain &Associates the Board of Directors at their meeting held on 15th October 2019appointed T D K & Co. Chartered Accountants (FRN: 109804W). Further members of theCompany at their Extra Ordinary General Meeting held on 14th January 2020passed resolution for their appointment for FY 2019 20.
It is proposed to appoint M/s S.N. & Co. (FRN: 128887W) Chartered Accountants asthe Statutory Auditors of the Company for a period of five years beginning from theconclusion of this annual General Meeting. M/s S.N. & Co. has confirmed theireligibility under Section 141 of the Companies Act 2013 and the Rules framed there underfor appointment as Auditors of the Company. A resolution for appointment of StatutoryAuditors forms part of the Notice of the AGM.
The notes on accounts referred to in the Auditors Report are self-explanatory andtherefore don t call for any further comments by the Board of directors.
There are no qualifications or adverse remarks in the Auditors Report which require anyclarification or explanation.
In terms of Section 204 of the Act and Rules made there under M/s. N K M &Associates Practicing Company Secretaries (CP No. 20414) were appointed as a SecretarialAuditors for the Financial Year 2019 20. The Secretarial Audit Report for the FinancialYear ended on 31st March 2020 is annexed herewith marked as "AnnexureVIh to this Report.
Pursuant to provisions of section 138 of the Companies Act 2013 M/s. Ajay Sharma& Associates Chartered Accountants (FRN: 137003W) was appointed as an InternalAuditor of the Company for the Financial Year 2019 20. To maintain their objectivity andindependence the Internal Auditor reports to the Chairman of the Audit Committee.
The Internal Auditor monitors and evaluates the efficiency and adequacy of internalcontrol systems of your Company its compliance with accounting procedures and policies ofyour Company. Based on the report of Internal Audit the management undertakes correctiveaction and thereby strengthens controls.
31. REPORTING OF FRAUDS BY AUDITOR:
During the year under review the Statutory Auditor and the Secretarial Auditor havenot reported any instances of frauds committed by the Company by its officers or employeesto the audit committee under section 143(12) of the Companies Act 2013 details of whichneeds to be mentioned in the Annual Report.
32. 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 annexed herewith marked as "AnnexureVII to this Report.
33. MANAGEMENTS DISCUSSION AND ANALYSIS:
In terms of the provisions of Regulation 34 of the Securities and Exchange Board ofIndia (Listing
Obligations and Disclosure Requirements) Regulations 2015 the Management s discussionand analysis is set out in this Annual Report & marked as Annexure II.
34. RISK MANAGEMENT POLICY:
Risk Management is the process of identification assessment and prioritization ofrisks followed by coordinated efforts to minimize monitor and mitigate/control theprobability and/or impact of unfortunate events or to maximize the realization ofopportunities. The Company has laid down a comprehensive Risk Assessment and MinimizationProcedure which is reviewed by the Board from time to time. These procedures are reviewedto ensure that executive management controls risk through means of a properly definedframework. The major risks have been identified by the Company and its mitigationprocess/measures have been formulated in the areas such as business project executionevent financial human environment and statutory compliance.
35. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND:
There are no amounts due and outstanding to be credited to Investor Education andProtection Fund as on 31st March 2020.
36. INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTIONPROHIBITION & REDRESSAL) ACT 2013:
Your Company has a policy and framework for employees to report sexual harassment casesat workplace and the process ensures complete anonymity and confidentiality ofinformation. No complaints of sexual harassment were raised in the financial year 2019 -2020.
Your Directors place on record their deep appreciation to employees at all levels fortheir hard work dedication and commitment. The enthusiasm and unstinting efforts of theemployees have enabled the Company to remain as industry leaders.
The Board places on record its appreciation for the support and co operation yourCompany has been receiving from its business partners and others associated with theCompany. It will be the Company's endeavour to build and nurture strong links with thetrade based on mutuality of benefits respect for and co-operation with each otherconsistent with consumer interests. The Directors also take this opportunity to thank allInvestors Clients Vendors Banks Government and Regulatory Authorities for theircontinued support.
By Order of the Board of Directors For KCD Industries India Limited
(formerly known as Ruchika Industries India Limited)
Date: 16th November 2020
Chairman & Managing Director