The Directors are pleased to present the 40th Annual Reporton the business and operations of Khadim India Limited ("the Company") togetherwith the Audited Financial Statements for the financial year ended March 312021.
The Financial Highlights are set out below:
In Rs. million
|Particulars ||Consolidated ||Standalone |
| ||2020-21 ||2019-20 ||2020-21 ||2019-20 |
|Revenue from Operations ||6261.78 ||7718.68 ||6261.78 ||7718.68 |
|Other Income ||180.79 ||66.71 ||180.79 ||66.71 |
|Total Income ||6442.57 ||7785.39 ||6442.57 ||7785.39 |
|Less: Expenditure ||6227.95 ||7414.06 ||6227.66 ||7413.52 |
|Profit before Depreciation Interest and Tax ||214.62 ||371.33 ||214.91 ||371.87 |
|Depreciation ||392.40 ||419.36 ||392.40 ||419.36 |
|Interest ||253.75 ||292.79 ||253.75 ||292.79 |
|Profit / Loss before tax ||(431.53) ||(340.82) ||(431.24) ||(340.28) |
|Provision for Taxation || || || || |
|- Current and deferred Tax ||(102.09) ||(28.13) ||(102.09) ||(28.13) |
|Profit / Loss for the year after tax ||(329.44) ||(312.69) ||(329.15) ||(312.15) |
In view of the losses incurred by the Company during the financial year2020-21 the Board of Directors of the Company are unable to recommend dividend on equityshares.
No amount has been transferred to the General Reserve for the financialyear ended March 312021.
The outbreak of Covid-19 Pandemic has affected economies worldwidemaking the fiscal year 2020-21 arduous. The market demand and supply for retail sectorhave been badly affected due to delay in availability of vaccines and increased instancesof variants and infections. The Company's manufacturing and sales operations were hitsubstantially due to the nation-wide stringent lockdown imposed by the Government of Indiafrom the end of March 2020 to mid of May 2021 which brought the economic activities to astandstill resulting adverse impact on revenue growth and profitability of the Company inthe first quarter of FY 2021.
With the gradual lifting of the lockdown the Company restarted itsoperations in a phased manner by prioritizing the safety and security of employeescustomers and other stakeholders. The office manufacturing facilities retail stores andwarehouses pan India are being sanitized at regular intervals All safety protocols oftemperature sensing wearing of safety gears (masks face shields etc.) socialdistancing sanitizing and washing hands are being adhered to very stringently. Howeverthe production of finished footwear was less due to shortage in supply of raw material.The restriction in movement have led to depression in market and decrease in manpowerrequirement which further resulted in idling of work force.
In order to emerge out as a strong organization the Company hasundertaken various proactive cost-optimisation measures including temporary reduction ofsalaries of Whole-time Directors and all level of employees rent negotiations /reductions consolidation of activities and closure of loss making retails storesreduction in marketing and advertisement activities etc. The Company also increased itsconcentration on online sales and encouraged "Go Cashless" drive for onlinepayment. The Company also shifted its focus towards omni-channel technologies and digitalcommunication via Whatsapp Instagram facebook etc. for frequent interaction with thecustomers.
The primary objective of the Company is to ensure the safety andwell-being of our employees at all levels. In response to health crisis the Company hasadopted various Covid practices and safety protocols for the purpose of smooth functioningof its operations. Online training programs were conducted to guide employees to adhere toCovid protocols. Vaccination arrangements have also been made for ensuring safety ofemployees.
Even though the Covid-19 Pandemic is into existence the economicactivities have started recovering with the gradual relaxation in mobility restrictions.The Company is closely monitoring the market trend and behavior and continuouslyleveraging the opportunities to increase penetration in the domestic market.
Operations and State of Company's Affairs
The revenue generated from operations for the financial year 2020-21stood at H 6261.78 million which was decreased by 18.88% from the financial year 2019-20.The loss after tax for the year was H 329.15 million in comparison to loss after tax of H312.15 million for the last financial year.
The details of Company's affairs has been included in the ManagementDiscussion and Analysis Report forming part of this report.
The details in regard to Internal Financial Control and its adequacyare included in the Management Discussion & Analysis Report which is a part of thisReport.
Employee Stock Option Plan
There has been no material change in the Employee Stock Option Plan2017 ("ESOP 2017") during the year under report. Disclosures with respect toESOP 2017 as required under regulation 14 of the Securities and Exchange Board of India(Share Based Employee Benefits) Regulations 2014 are available in the Notes to theFinancial Statements. A certificate from M/s. Deloitte Haskins & Sells StatutoryAuditors of the Company with respect to the implementation of the Company's ESOP 2017would be available for inspection by the shareholders during the Annual General Meeting. Acopy of the same will also be available for inspection at the registered office of theCompany.
Approval of the members by way of a Special Resolution had beenobtained on May 07 2021 (vide Postal Ballot Notice dated March 25 2021) for KhadimEmployee Stock Option Plan 2021 ("ESOP 2021").
The authorized Share Capital of your Company is ^ 600000000/-divided into 60000000 Equity Shares of face value of ^ 10/- each.
The issued subscribed and paid up Share Capital of your Company is H179696140/- divided into 17969614 Equity Shares of face value of H 10/- each.
Change(s) in the nature of the business
There has been no change(s) of business of the Company or in the natureof business carried on by the Company during the financial year under review.
Material changes and commitments if any affecting the financialposition of the Company which have occurred between the end of the financial year to whichthe financial statements relate and the date of the report
No material changes and commitments affecting the financial position ofthe Company have occurred between the end of the financial year of the Company to whichthe financial statements relate and the date on which this Report has been signed.
Significant and material orders passed by the regulators / courts /tribunals impacting the going concern status and the Company's operations in future
During the year under review no significant and material orders havebeen passed by the regulators / courts / tribunals that may impact the going concernstatus and the operations of the Company in future.
During the year under review no Corporate Insolvency Resolutionapplication was made or proceeding was initiated by / against the Company under theprovisions of the Insolvency and Bankruptcy Code 2016 (as amended). Further noapplication or proceeding by / against the Company under the provisions of the Insolvencyand Bankruptcy Code 2016 (as amended) is pending as on March 312021.
Subsidiaries joint ventures and associate companies
The Company has incorporated a wholly owned subsidiary in Bangladesh inthe name of Khadim Shoe Bangladesh Limited which is registered with the Registrar ofJoint Stock Companies and Firms Bangladesh on September 05 2019. There are no associateor joint venture companies within the meaning of Section 2(6) of the Companies Act 2013.
Pursuant to the provisions of Section 129(3) of the Act a statementcontaining the salient features of financial statements of the Company's subsidiary inForm No. AOC-1 is attached to the financial statements of the Company.
Further pursuant to the provisions of Section 136 of the Act thefinancial statements of the Company consolidated financial statements along with relevantdocuments and separate audited financial statements in respect of subsidiaries areavailable on the website of the Company www.khadims.com at the linkhttps://www.khadims.com/subsidiary-financial-khadim.
The Company has not accepted any deposit from public within the meaningof Section 73 of the Companies Act 2013 read with Companies (Acceptance of Deposits)Rules 2014 and as such no unclaimed / unpaid matured deposits or interest thereon was dueas on March 312021.
Corporate Social Responsibility
The Company seeks to operate its business in a sustainable manner whichwould benefit the Society at large in alignment with the interest of its stakeholders andby giving preference to local areas around its business operations. In accordance with theprovisions of Section 135 of the Companies Act 2013 your Company has duly constituted aCSR Committee and the Company's policy on CSR is available on the Company's websitewww.khadims.com.
Pursuant to the provisions of Section 135 of the Companies Act 2013read with Schedule VII thereof and the Companies (Corporate Social Responsibility Policy)Rules 2014 the Company has undertaken CSR activities during the year under review inthe field of Protection of Flora & Fauna and Promotion of health care includingpreventive health care. The Annual Report on CSR activities for the financial year endedMarch 31 2021 along with the composition of CSR Committee is marked as Annexure - I andforms part of this Report.
Risk Management Policy
The Company's Risk Management Policy recognizes that risk is anintegral part of any business and the Company is committed to manage the risk in aproactive and efficient manner.
Vigil Mechanism / Whistle Blower Policy
The Company has a Vigil Mechanism / Whistle Blower policy and it hasestablished adequate vigil mechanism for its employees and directors to report concernabout unethical practice. No person has been denied access to the Chairman of the Auditcommittee. The latest Vigil Mechanism / Whistle Blower Policy is available athttps://www.khadims.com/ policy-on-vigil-mechanism/.
Directors and Key Managerial Personnel
Your Company's Board is duly constituted in compliance with therequirement of the Companies Act 2013 and the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 (Listing Regulations).
The Independent Directors have confirmed that they meet the criteria ofIndependence as required under sub section 7 of Section 149 of the Companies Act 2013 andRegulation 25(8) of the Listing Regulations.
The Board was also of the opinion that Independent Directors meet thecriteria of independence under sub section 6 of Section 149 of the Act and Regulation16(1)(b) of the Listing Regulations.
There has been no change in the circumstances affecting their status asindependent directors of the Company.
All the Independent Directors have registered themselves pursuant tothe Notification of Companies (Creation and Maintenance of databank of IndependentDirectors) Rules 2019.
The members of the Company at its 39th Annual GeneralMeeting held on September 23 2020 had approved the appointment of Mr. Rittick Roy Burman(DIN: 08537366) as Director liable to retire by rotation and also as Wholetime Director(Whole-time Key Managerial Personnel) of the Company for a period of 3 (three) years witheffect from November 08 2019.
Mr. Siddhartha Roy Burman (DIN: 00043715) Chairman & ManagingDirector of the Company retires by rotation at the ensuing Annual General Meeting andbeing eligible offered himself for re-appointment. The brief profile of Mr. Roy Burmanand other relevant information under Regulation 36 of the Listing Regulations andSecretarial Standard on General Meetings with respect to remuneration to Director has beenprovided in the Notice convening Annual General Meeting.
Prof. (Dr.) Surabhi Banerjee Independent Director was appointed by theMembers at the 36th Annual General Meeting held on September 16 2017 for aterm of 5 (Five) consecutive years from May 25 2017 till May 24 2022. The said tenurewill expire due to efflux of time. The Board vide its Meeting held on June 17 2021 hadapproved the re-appointment of Prof. (Dr.) Surabhi Banerjee for a second term of 5 (Five)consecutive years commencing from May 25 2022 to May 24 2027 subject to the approvalof the members at the ensuing Annual General Meeting. The brief profile of Prof. (Dr.)Surabhi Banerjee and other relevant information under Regulation 36 of the ListingRegulations and Secretarial Standard on General Meetings with respect to Director seekingre-appoinment have been provided in the Notice convening Annual General Meeting.
Pursuant to the provisions of Section 203 of the Companies Act 2013the Key Managerial Personnel of the Company as on March 31 2021 are:
Pursuant to the provisions of Section 203 of the Act the KeyManagerial Personnel of the Company as on March 312021 are:
a) Mr. Siddhartha Roy Burman Chairman & Managing Director;
b) Mr. Rittick Roy Burman Whole-time Director;
c) Ms. Namrata Ashok Chotrani Chief Executive Officer;
d) Mr. Indrajit Chaudhuri Chief Financial Officer; and
e) Mr. Abhijit Dan Company Secretary & Head- Legal
Familiarisation Programme for Independent Directors
The Company has put in place an Induction and Familiarisation Programmefor Independent Directors of the Company. The details of such Familiarization Programmeare mentioned in the Report on Corporate Governance which forms part of this AnnualReport and the same is available at the linkhttps://www.khadims.com/familiarization-programme- independent-director/.
Separate Meeting of Independent Directors
In terms of requirements of Schedule IV of the Companies Act 2013 andthe Listing Regulations the meetings of Independent Directors were separately held onJune 30 2020 and February 10 2021 during the year under report.
Company's Policy on Appointment and Remuneration of Directors
The Company has been following a policy namely "Nomination andRemuneration Policy" with respect to appointment and remuneration of Directors KeyManagerial Personnel (KMP) and Senior Management Personnel. The appointment of DirectorsKMP and Senior Management Personnel is subject to the recommendation of the Nomination andRemuneration Committee (NRC). Based on the recommendation of the NRC the remuneration ofExecutive Director comprises of Basic Salary Perquisites Allowances and Commission inaccordance with the provisions of the Companies Act 2013. The remuneration ofNon-Executive Directors comprises of sitting fees and commission in accordance with theprovisions of Companies Act 2013.
Nomination and Remuneration Policy
The Nomination and Remuneration Policy of the Company is in conformitywith the requirement of Section 178 (3) of the Companies Act 2013 and ListingRegulations. The objectives and key features of this Policy are:
Formulation of the criteria for determining qualificationspositive attributes and independence of the Directors Key Managerial Personnel and SeniorManagement Personnel;
Devising a policy on Board diversity;
Identifying persons who are qualified to become Directors andpersons who may be appointed in Key Managerial and Senior Management positions inaccordance with the criteria laid down in this policy;
Directors' induction and continued updation as and when requiredof their roles responsibilities and liabilities;
Formulation of criteria for performance evaluation of the Boardits Committees and Directors including Independent Directors / Non-Executive Directors;
Aligning the remuneration of Executive Directors Key ManagerialPersonnel and Senior Management Personnel with the Company's financial positionindustrial trends remuneration paid by peer companies etc.; and
Recommend to the Board all the remuneration in whatever formpayable to the Senior Management.
The guiding principles of the Policy are:
The level and composition of remuneration is reasonable andsufficient to attract retain and motivate Directors of the quality required to run theCompany successfully;
Relationship of remuneration to performance is clear and meetsappropriate performance benchmarks; and
Remuneration to Directors Key Managerial Personnel and SeniorManagement involves a balance between fixed and incentive pay reflecting short and longterm performance objectives appropriate to the working of the Company and its goals.
The aforesaid Nomination and Remuneration Policy has been uploaded onthe website of your Company www.khadims.com and is available at the link:https://www.khadims.com/policy-on-nomination-remuneration-committee/
Meetings of the Board
During the year six meetings of the Board were held. The details ofmeetings of the Board held during the financial year 2020-21 have been provided in theCorporate Governance Report which forms part of the Report.
The details pertaining to the composition of the Audit Committee areincluded in the Corporate Governance Report which is a part of this Report.
Extract of Annual Return
In accordance with Section 92(3) and 134(3)(a) of the Companies Act2013 read with the Companies (Management and Administration) Rules 2014 the AnnualReturn as on March 31 2021 is available on the Company's website www.khadims.com.
Particulars of contracts and arrangement with Related Parties
All transactions entered by the Company with Related Parties during thefinancial year 2020-21 as defined under Section 2(76) of the Companies Act 2013 read withthe Companies (Specification of Definitions Details) Rules 2014 were in the OrdinaryCourse of Business and at Arm's Length pricing basis. There were no materially significanttransactions with Related Parties during the financial year 2020-21 which were inconflict with the interest of the Company. Suitable disclosures as required under IndAS-24 have been made in the Notes to the financial statements.
Accordingly the disclosure in Form AOC-2 pursuant to section134(3)(h) of the Companies Act 2013 read with Rule 8(2) of the Companies (Accounts)Rules 2014 is not required. The policy on Related Party Transactions can be accessed onthe website of the Company www.khadims.com.
The Company has devised adequate systems to ensure compliance with theapplicable Secretarial Standards issued by the Institute of Company Secretaries of Indiaand such systems are operating effectively.
Directors' Responsibility Statement
Pursuant to Section 134(5) of the Companies Act 2013 ("theAct") your Directors to the best of their knowledge and ability confirm that:
a) in the preparation of the annual accounts for the financial yearended March 312021 the applicable accounting standards had been followed along withproper explanation relating to material departures if any;
b) the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at March 312021 andof the Loss of the Company for the year ended on that date;
c) the Directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
d) the Directors had prepared the annual accounts on a going concernbasis;
e) proper internal financial controls are followed by the Company andthat such financial controls are adequate and are operating effectively; and
f) the Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively during the financial year ended March 312021.
Reporting of Fraud by Auditors
During the year under review the Statutory Auditors and SecretarialAuditor have not reported any incident of fraud committed in your Company by its Officersor Employees to the Audit Committee and / or to the Board under Section143(12) of theCompanies Act 2013 details of which needs to be mentioned in this Report.
Statutory Auditors' Report
The Report by M/s. Deloitte Haskins & Sells (Firm Registration No.302009E Chartered Accountants) for the financial year 2020-21 on the Annual Accounts ofthe Company forms part of the Annual Report of the Company. The Auditors' Report does notcontain any qualification reservation or adverse remark or disclaimer.
M/s. Deloitte Haskins & Sells (Firm Registration No. 302009EChartered Accountants) were re-appointed by the members of the Company at the 37thAnnual General Meeting as Statutory Auditors of the Company for a second term of 5 (Five)consecutive years commencing from the conclusion of the Annual General Meeting held onSeptember 06 2018 till the conclusion of the 42nd Annual General Meeting to beheld in the year 2023.
Pursuant to the provisions of Section 204 of the Companies Act 2013read with Rules made thereunder the Company had re- appointed Mr. Binod Kumar Gupta(Membership No. A12965 C.P. No. 3242) of M/s. BKG & Company Company Secretaries toconduct the Secretarial Audit for the financial year 2021-22.
The Secretarial Audit Report for the financial year ended March 312021 is annexed herewith and marked as Annexure - II to this report.
The Secretarial Audit Report does not contain any qualificationreservation or adverse remark or disclaimer.
Although the Company is not coming under the purview of compulsory costaudit as per the Companies Act 2013 your Company has continued with the services of theCost Auditors for the financial year 2020-21.
Disclosure as required under Rule 8(5) (xii) of the Companies(Accounts) Rules 2014
The disclosure as per Rule 8(5) (xii) of the Companies (Accounts)Rules 2014 as amended is not applicable to the Company.
Particulars of Loans Investments and Guarantees
During the financial year 2020-21 the Company has not made anyinvestment has not given any loans has not provided any guarantees has not provided anysecurity in connection with any loan has not acquired securities by way of subscriptionpurchase or otherwise in excess of the thresholds provided in Section 186 of the CompaniesAct 2013.
Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo
The information on conservation of energy Technology Absorption andForeign Exchange Earnings and Outgo stipulated under Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 are given inAnnexure-III forming part of this Report.
Managerial Remuneration Particulars of Employees and relateddisclosure
Details of remuneration as required under Section 197(12) of theCompanies Act 2013 read with Rule 5(1) and Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are annexed as Annexure-IV and Vrespectively.
Disclosures under the Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013
Your Company firmly believes in providing a safe supportive andharassment free workplace for each and every individual working for the Company throughvarious interventions and practices and has zero tolerance for sexual harassment atworkplace. It is the continuous endeavor of the management of the Company to create andprovide an environment to all its employees that is free from discrimination andharassment including sexual harassment. The Company has adopted a policy on Prevention ofSexual Harassment at Workplace. An Internal Complaint Committee (ICC) with requisitenumber of representatives has been set up to redress complaints relating to sexualharassment if any. The Policy is gender neutral. All employees (permanent contractualtemporary trainees) are covered under this Policy.
The Policy under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and rules framed there under isavailable in the website of the Company at www.khadims.com. No complaints relating to thesexual harassment has been received during the year under report.
Annual Performance Evaluation of the Directors
In terms of the provisions of the Companies Act 2013 read with Rulesissued there under and the Listing Regulations based on the criteria such as number ofBoard and Committee meetings attended during the year contributions to the decisionmaking and relevant expertise to the Board etc. the Board of Directors has carried outthe annual performance evaluation of the entire Board Committees and all the Directorsbased on the criteria laid down by the Nomination and Remuneration Committee.
In a separate meeting of Independent Directors performance ofNon-Independent Directors the Chairman of the Company and the Board as a whole wasevaluated.
A Report on Corporate Governance along with a Certificate from theStatutory Auditors confirming of corporate governance requirements as stipulated underListing Regulations is enclosed as Annexure - VI and forms part of this Annual Report. Thesaid report also contains a certificate from a Practising Company Secretary confirmingthat none of the Board of Directors of the Company has been debarred or disqualified frombeing appointed or continuing as Director of the Company as prescribed under ListingRegulations.
Management Discussion and Analysis Report
Management Discussion and Analysis Report for the financial year underreview as stipulated under Regulation 34 of the Listing Regulations is presented in aseparate section forming a part of this Report.
Statements in the Annual Report including those which relate toManagement Discussion and Analysis describing the Company's objectives projectionsestimates and expectations may constitute 'forward looking statements' within the meaningof applicable laws and regulations. Although the expectations are based on reasonableassumptions the actual results might differ.
Your Directors would like to express their sincere appreciation andgratitude for the assistance and cooperation received from the financial institutionbanks merchant bankers legal consultants registrar government authorities customersand vendors during the year under review.
Your Directors also acknowledge the continued support received frominvestors and shareholders and the confidence reposed by them.
Your Directors grieve for the life lost due to Covid-Pandemic and placeon record their immense appreciation for the contribution and committed service by theexecutives staffs and workers of the Company.