Your Directors have the pleasure in presenting the 23rd Annual Reporttogether with the Audited Statement of Accounts for the year ending on 31stMarch 2017.
| || |
(Amt. in Rupees)
|Particulars || |
Financial Year ended
| || |
| ||2016-17 ||2015-16 ||2016-17 ||2015-16 |
|Revenue from operations ||5064834 ||5437900 ||5075814 ||5456935 |
|Other Income ||312182 ||- ||312182 ||- |
|Total revenue ||5377016 ||5437900 ||5387996 ||5456935 |
|Expenditure || || || || |
|Employee benefits expenses ||822956 ||381988 ||822956 ||381988 |
|Other expenses ||2263847 ||2764537 ||2266665 ||2775925 |
|Total expenses ||4776469 ||4882164 ||4779287 ||4893170 |
|Profit before tax ||600547 ||555736 ||608709 ||563765 |
|Tax expense : || || || || |
|Current Tax ||184923 ||186675 ||187444 ||188925 |
|Deferred Tax ||- ||- ||- ||- |
|Excess provision of income tax ||- ||- ||- ||- |
|Net profit for the year ||415624 ||369061 ||421265 ||374840 |
The Opening Balance of Surplus of Profit and Loss shown under the head Reserves andSurplus was Rs. 46508742. During the year under the review the profit of Rs. 415624/-was also added. The Closing Balance of Surplus of the Profit and Loss shown under the headReserves and Surplus was Rs. 46924366/-
During the year under the review there was a decrease in total income of 1.12% incomparison to the previous year. The total expenses have decreased by 2.16% and the netprofit after tax has increased by 11.20%.
As Company has inadequate Profit your directors do not propose any dividend for thecurrent year to conserve the resources.
DETAILS OF DIRECTORS/KEY MANAGERIAL PERSONNEL APPOINTED/RESIGNED:
i. Retirement by Rotation:
Pursuant to the provisions of Section 152(6) of the Companies Act 2013 Mr. Arif Memon(DIN: 00209693) retires by rotation at the ensuing Annual General Meeting and beingeligible offers himself for re-appointment. Your directors recommend his re-appointment.
During the year under review Mr. Jignesh Babulal Hirani has resigned from the officeof Directorship of the Company and from the post of the Chief Financial Officer w.e. from20th October 2016 due to personal reasons.
iii. Appointment of Additional/Independent Women Director:
Mr. Ismail Memon and Mr. Mohsin Ismailbhai Memon were appointed as Additional NonExecutive Directors by the Board of Directors at their meeting held on 27th October 2016to hold office until the ensuing Annual General Meeting.
Further Mr. Narendra Chaturbhai Tundiya and Ms. Sakina Aiyyaz Pimpalnerwala were alsoappointed as Additional Non-executive Directors of the Company at their meeting held on19th October 2016 hold office until the ensuing Annual General Meeting.
The Board of Directors of the Company on the recommendation of Nomination andRemuneration Committee and Audit Committee appointed Mr. Narendra Chaturbhai Tundiya asChief Financial Officer of the Company w.e.f. 19th October 2016.
iv. Key Managerial Personnel:
The following persons are designated as Key Managerial Personnel:
1. Mr. Arifbhai Ismailbhai Memon Managing Director
2. Mr. Narendra Chaturbhai Tundiya Chief Financial Officer
DETAILS OF HOLDING/SUBSIDIARY COMPANIES/JOINT VENTURES/ASSOCIATE COMPANIES:
Your Company has One wholly owned Subsidiary Company i.e. KGN PROJECTS LIMITED.
In terms of the Provisions contained in Section 129 (3) of the Companies Act 2013Read with rule 5 of the Companies (Accounts) Rules 2014 a report on the performance andthe financial of each of the subsidiaries is provided as Annexure A i. e AOC - 1'to this Report.
The Company has not invited/accepted any deposit other than the exempted deposit asprescribed under the provision of the Companies Act 2013 and the rules framed thereunder as amended from time to time. Hence there are no particulars to report about thedeposit falling under Rule 8 (5) (v) and (vi) of Companies (Accounts) Rules 2014.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS:
During the year under review there were no significant and material orders passed byany Regulators or Court or Tribunals which may have impact on the going concern status.Neither there are any order passed which may have impact on the Company's operation infuture.
The Company has shifted its registered office "23 Vaswani Mansion 4th FloorDinshaw Vaccha Road Opp. K.C. College Churchgate Mumbai MH 400020" to "B-15Hirnen Shopping Centre co. Op. Hsg. Society Limited Near City Centre S.V Road Goregaon(West) Mumbai-400062" in its board meeting held on 13th August 2016".
INTERNAL FINANCIAL CONTROLS:
Your Company has well laid out policies on financial reporting adherence to Managementpolicies and also on promoting compliance of ethical and well defined standards. Moreoverthe management team regularly meets to monitor goals and results and scrutinizes reasonsfor deviations in order to take necessary corrective steps. The Audit Committee whichmeets at regular intervals also reviews the internal control systems with the Managementand the internal auditors. All audit observations and follow up actions are discussed withthe Management as also the Statutory Auditors and the Audit Committee reviews themregularly.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
Pursuant to Rule 8 (3) of Companies (Accounts) Rules 2014 the Board of Directorshereby declares that there are no particulars to report for the Conservation of Energy& Technology Absorption. There is no foreign exchange earnings and outgo during theyear under the review.
Your Company is not engaged in any type of manufacturing activities. It is notgenerating any type of pollution. Hence Pollution Control regulations and norms are notapplicable to Company.
There was no employee drawing remuneration requiring disclosure under the Rule 5 (2) ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
DISCLOSURE UNDER SECTION 197(12) AND RULE 5(1) OF THE COMPANIES (APPOINTMENT ANDREMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014
There was no employee drawing remuneration requiring disclosure under section 197(12)and Rule 5 (1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules2014. Required details are annexed to this Report as Annexure B.
Pursuant to Section 177(9) of the Companies Act 2013 the company has a Whistle BlowerPolicy to deal with any instance of fraud and mismanagement. The employees of the companyare free to report violations of any laws rules regulations and concerns about unethicalconduct to the Audit Committee under this policy. The policy ensures that strictconfidentiality is maintained whilst dealing with concerns and also that no discriminationwith any person for a genuinely raised concern.
The Audit Committee of the Board of Directors of the Company was re-constituted andpresently consists of three Directors viz. Mr. Ajazahmed Abulgani Ansari Ms. JankiVaghela and Mr. Aftabahmed Kadri.
Mr. Ajazahmed Abulgani Ansari is the Chairman of the Audit Committee.
During the Year under review total four Meetings of the Board of Directors of theCompany were held.
The Composition and the Terms of Reference of the Audit Committee is as mentioned inthe provisions of Section 177 of the Companies Act 2013 and SEBI Listing Regulations withthe Stock exchange as amended from time to time. The Statutory Auditor Internal Auditorand Chief Finance Officer usually attend the Meeting of the Audit Committee.
i. Statutory Auditor and their Report
Under Section 139 of the Companies Act 2013 and Rules made thereunder it is mandatoryto rotate the Statutory Auditors on completion of the maximum term permitted under thesaid Section. The audit committee of the Company has proposed the Board of Directors ofthe Company have recommended the appointment of M/s. Maak & Associates CharteredAccountants Ahmedabad (Firm Registration No. 135024W) as the Statutory Auditors of theCompany. M/s. Maak & Associates will hold the office from 23rd Annual General Meetingtill the conclusion of next Annual General Meeting of the Company to be held in the year2018 subject to the approval of Shareholders of the Company. The first year of audit willbe of the Financial Statement for the year ended 31st March 2018 which will include theaudit of quarterly financial statement for the year. In this regard the Company hasreceived a Certificate from the said Auditor to the effect that if their appointment willbe made it would be in accordance with the provisions of Section 141 of Companies Act2013.
The observations made in their report and dealt with in the notes forming part of theAccounts at appropriate places are self-explanatory
The observations made in their report and dealt with in the notes forming part of theAccounts at appropriate places are self-explanatory.
ii. INTERNAL AUDITOR
M/s. Ismail Lakhani & Associates Chartered Accountant are Internal Auditors ofthe Company. The Audit Committee of the Board of Directors in consultation with theInternal Auditors formulates the scope functioning periodicity and methodology forconducting the internal audit.
iii. SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT
The Board of Directors of the Company has in compliance with the provisions of Section304(1) of the Companies Act 2013 and rules made in this behalf appointed Mr. Jatin H.Kapadia Practicing Company Secretary to carry out Secretarial Audit of the Company forthe financial year 2016-17. The Report of the Secretarial Auditor is annexed to thisReport as Annexure C which is self explanatory and gives complete information.
EXPLANATION TO THE QUALIFICATIONS IN AUDITOR'S REPORT AND SECRETARIAL AUDIT REPORT:
There are no qualifications or adverse remarks in the Auditor's Report. Explanation onqualification adverse remark made in Secretarial Audit Report is as under.
|Qualification/ Adverse Remark ||Explanation : |
|Certain forms are yet to be filed by the Company with the Registrar of Company as specified under the Companies Act 2013. ||The company is in process of filing the requisite forms and the compliance of the same will be made soon. However Board assures that it will be complied with now onwards. |
|Advertisement Notices are not available for Audit. ||Due to reshuffling of Secretarial Department the files are misplaced hence do not able to shown. |
|The present Auditor does not possess peer reviewed certificate ||Due to financial inability the Board may not able to appointed Auditors having peer reviewed Certificate. Further New incoming Auditors has peer reviewed Certificate. |
|The Company has not pay Listing Fees ||The Company is in the process of payment of li sting fees |
DIRECTORS RESPONSIBILITY STATEMENT:
As required under the provisions of Section 134 of the Act your Directors report 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 profits 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 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.
(e) The Directors have laid down internal financial controls as required by Explanationto Section 134(5)(e) of the Act to be followed by the Company and such internal financialcontrols are adequate and are operating effectively.
(f) The Directors have devised proper systems to ensure compliance with the provisionsof applicable laws and such systems are adequate and operating effectively.
RELATED PARTY TRANSACTIONS:
During the year under review the Company has entered into the transactions with therelated parties the details of each are provided in point No. 27 under the head notes onFinancial Statements.
PARTICULARS OF LOANS/GUARANTEES/INVESTMENT:
The Particulars of loans guarantee or investment made under Section 186 of theCompanies Act 2013 are furnished in the Notes to the Financial Statements for the yearended 31st March 2017.
INVESTMENT IN UNQUOTED SHARES:
The Company has made investment in unquoted shares. i.e. 99994 Shares and 2925000Shares in KGN Projects Limited and Shares in Asian Logistics Limited respectively.
RISK MANAGEMENT POLICY:
The Company has a structured risk management policy. The Risk management process isdesigned to safeguard the organization from various risks through adequate and timelyactions. It is designed to anticipate evaluate and mitigate risks in order to minimizeits impact on the business. The potential risks are inventorised and integrated with themanagement process such that they receive the necessary consideration during decisionmaking.
STATEMENT OF INDEPENDENT DIRECTORS:
The following Directors are independent in terms of Section 149(6) of the Act:
(a) Mr. Ajazahmed Ansari
(b) Mr. Aftabahmed Kadri
(c) Ms. Janki Ranjitsingh Vaghela
The Company has received requisite declarations/ confirmations from all the aboveDirectors confirming their independence.
MANAGEMENT DISCUSSIONS & ANALYSIS REPORT:
Management Discussion & Analysis report for the year under review as stipulatedunder Regulation 34(2)(e) of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 is annexed as Annexure - D heretoand forms part of this Report.
CORPORATE GOVERNANCE REPORT:
Your Directors adhere to the requirements set out in Regulation 34(3) read withSchedule V of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015. Report on Corporate Governance as stipulatedin the SEBI LODR Regulations is annexed as Annexure-E hereto and forms part of thisReport along with Certificate from the Statutory Auditors M/s. Kirit & CompanyChartered Accountants confirming compliance of conditions of Corporate Governance.
EXTRACT OF THE ANNUAL RETURN:
Pursuant to provision of Section 92 and 134 and other applicable provision of theCompanies Act 2013 and of Rule 12 (1) of Companies (Management and Administration) Rules2014 the extract of the annual return in form MGT 9 for the Financial Year ended on 31stMarch 2017 is annexed as Annexure--F to this Report.
NUMBER OF BOARD MEETINGS:
Regular meetings of the Board are held to discuss and decide on various businesspolicies strategies and other businesses. The schedule of the Board/Committee meetings tobe held in the forthcoming financial year is being circulated to the Directors in advanceto enable them to plan their schedule for effective participation in the meetings.
Total 6 Board Meetings were held during the Financial Year 2016-17 on 30th May 201613th August 2016 19th October 2016 27th October 2016 10th November 2016 and 13thFebruary 2017 and the gap between two meetings did not exceed one hundred and twentydays. The details of attendance of Directors at the Board Meetings are as under:
CORPORATE SOCIAL RESPONSIBILITY:
The Provision of Section 135 of the Companies Act 2013 regarding Corporate SocialResponsibility is not applicable to the company.
ANNUAL PERFORMANCE EVALUATION:
In compliance with the provisions of the Act and voluntarily SEBI Listing Regulationsthe performance evaluation was carried out as under:
In accordance with the criteria suggested by The Nomination and Remuneration Committeethe Board of Directors evaluated the performance of the Board having regard to variouscriteria such as Board composition Board processes Board dynamics etc. The IndependentDirectors at their separate meetings also evaluated the performance of the Board as awhole based on various criteria. The Board and the Independent Directors were of theunanimous view that performance of the Board of Directors as a whole was satisfactory.
Committees of the Board:
The performance of the Audit Committee the Nomination and Remuneration Committee andStakeholders Relationship Committee was evaluated by the Board having regard to variouscriteria such as committee composition committee processes committee dynamics etc. TheBoard was of the unanimous view that all the committees were performing their functionssatisfactorily and according to the mandate prescribed by the Board under the regulatoryrequirements including the provisions of the Act the Rules framed there under and SEBIListing Regulations.
(a) Independent Directors:
In accordance with the criteria suggested by The Nomination and Remuneration Committeethe performance of each independent director was evaluated by the entire Board ofDirectors (excluding the director being evaluated) on various parameters like engagementleadership analysis decision making communication governance and interest ofstakeholders. The Board was of the unanimous view that each independent director was areputed professional and brought his/her rich experience to the deliberations of theBoard. The Board also appreciated the contribution made by all the independent directorsin guiding the management in achieving higher growth and concluded that continuance ofeach independent director on the Board will be in the interest of the Company.
(b) Non-Independent Directors:
The performance of each of the non-independent directors (including the chairperson)was evaluated by the Independent Directors at their separate meeting. Further theirperformance was also evaluated by the Board of Directors. The various criteria consideredfor the purpose of evaluation included leadership engagement transparency analysisdecision making functional knowledge governance and interest of stakeholders. TheIndependent Directors and the Board were of the unanimous view that each of thenonindependent directors was providing good business and people leadership.
The Company has an Internal Complaint Committee as required under Section 4 of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013and the Rules made there under. During the year under review no complaints were reported.
The Company has adopted the following policies pursuant to the provisions of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 during the year underreview and the same uploaded on Company's website:
a. Policy on preservation of the Documents
b. Policy on criteria for determining Materiality of Events
c. Whistle Blower Policy
d. Policy on dealing with related party transactions
e. Policy for determining material subsidiaries
The details of the above mentioned policies are provided in the website of the Companyi.e. www.kgnindustries.com.
Your Directors wish to convey their thanks to all the bankers suppliers customers andother persons for their continued support to the company.
| ||For and on behalf of the Directors of the |
| ||KGN INDUSTIRES LIMITED |
| ||BABULAL JETHALAL HIRANI |
|Date : 14th August 2017 ||DIRECTOR |
|Place : Mumbai ||DIN:02362983 |