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Khaitan Electricals Ltd.

BSE: 504269 Sector: Consumer
NSE: KHAITANELE ISIN Code: INE761A01019
BSE 00:00 | 09 Sep Khaitan Electricals Ltd
NSE 05:30 | 01 Jan Khaitan Electricals Ltd
OPEN 7.49
PREVIOUS CLOSE 7.49
VOLUME 5
52-Week high 7.49
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 9
Buy Price 0.00
Buy Qty 0.00
Sell Price 7.49
Sell Qty 4995.00
OPEN 7.49
CLOSE 7.49
VOLUME 5
52-Week high 7.49
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 9
Buy Price 0.00
Buy Qty 0.00
Sell Price 7.49
Sell Qty 4995.00

Khaitan Electricals Ltd. (KHAITANELE) - Director Report

Company director report

To the members

Your Directors hereby present their 42nd Annual Report of the Company along with theStatements of Accounts for the year ended 31st March 2018.

FINANCIAL RESULTS

Particulars 2017-2018 2016-2017
(Rs in Lacs) (Rs in Lacs)
Revenue from Operations 3899.94 7964.05
Gross Profit/(Loss) for the year (4410.81) (29672.97)
Less : Depreciation 169.13 198.43
Profit/(Loss) before Tax & Exceptional item (4579.94) (29871.40)
Less: Exceptional item - -
Profit after Exceptional item (4579.94) (29871.40)
Add: Provision for Income-tax
For current year- Current Tax - -
Deferred Tax - -
MAT Credit Entitlement - -
For earlier years- Income Tax - 6.51
Profit/(Loss) after Tax (4579.94) (29877.91)
Earnings per share (in Rs.) (39.83) (259.81)

CORPORATE OVERVIEW

The Company had an track record of

Profitability and was paying dividend consistently. But since 2014–15 onwards theCompany has incurred loss and in the financial year 2017-18 the turnover further declinedfrom 79.64 Crores to 39.00 Crores. Due to lower turnover by value and volume the companyincurred loss of Rs. 45.80 Crores (Before considering other comprehensive income) duringthe year. The reasons for non performance of the company and incurrence of such high losswas mainly due to high cost of overhead per unit due to lower volume inadequate internalAccruals tough competition in Domestic and International Market and sluggish economicconditions so recovery from Debtors remains poor. The Promoter(s) have been extendingtheir financial and technical support to the Company. Despite the relentless efforts andcontinued support from all stakeholders especially the Promoter(s) the changes inexternal environment and continued sub - optimal performance has resulted in continuouslosses.

FINANCIAL REVIEW

The year 2017-18 was a tough year and the Company witnessed a sharp drop in Turnoverand Margins. Due to de-growth in business volumes overheads and finance cost could not beabsorbed which affected the bottom line. The Net Sales for the year was Rs. 38.99 Croresagainst Rs. 79.64 Crores in the previous year. The Company incurred a Loss before Tax ofRs. 45.79 Crores as against a Loss of Rs. 297.71 Crores during the Previous Year.

OTHER INCOME

Other income consists of interest received Profit export incentives rent receiptclaims received etc.

FINANCIAL EXPENSES

Financial expenses as per Financials for the year were to Rs. 13.38 Crores as againstRs. 54.16 Crores in the Previous Year. The company has not provided for Bank Interest fromthe month of July 2017 since the bank accounts have been declared NPA by the banks. Hadthis interest been provided then there would have been an increase in the loss amountingto Rs. 4041.50 lakhs

DEPRECIATION

Depreciation was at Rs. 1.69 Crores compared to Rs. 1.98 Crores in the previous year.

EARNING PER SHARE

Earnings Per Share (EPS) stood at Rs.(39.83) compared to EPS of Rs. (259.81) in theprevious year.

SHARE CAPITAL AND NET WORTH

The paid up Equity Share Capital of the company as on March 31 2018 was Rs. 11.50Crores and paid up Non-Convertible Redeemable Preference share Capital stood of Rs.5.00Crores. During the year under review there were no changes in the share capital of thecompany. The net worth of the Company has reduced to Rs. (392.56) Crores as compared toRs. (347.80) Crores in the previous year.

EROSION OF NET WORTH

The company’s net worth has been fully eroded. However the Management believesthat the company if funded with sufficient working capital will be able to generatesufficient resources to be able to continue as a going concern. The financial statementshave been prepared under the going concern assumption and hence no adjustments are made tothe carrying value of assets and liabilities.

HUMAN RESOURCES

The Company employed good human resources practices. The Company is enjoying good andcongenial industrial relations at all of its plants. As on 31st March 2018 the totalpermanent employees were 91.

SAFETY ENVIRONMENT AND POLLUTION CONTROL

The Company continuously works on high safety standards and a clean environment freefrom pollution. The manufacturing process does not generate effluents.

CURRENT OUTLOOK

The present market scenario does not appear to be very encouraging. Though the Companyis making all out efforts to regain its growth trend with major thrust on consolidation ofproduct mix reduction in cost and containing of overheads and interest the Company isquite concerned about the outlook for the Current Year.

RISKS AND CONCERNS

The Indian economy achieved GDP growth of 7.7% in FY’17-18 compared to 7.1 % inFY’16-17. It is expected that the Indian economy will continue to grow at 7% to 8%.Manufacturing sectors continued to languish.

Wild currency fluctuations affect metal prices and may cause pressure on margins. Nothreat is witnessed from imports. Though the Company is realigning its products tomitigate the impact of rising cost the steep rise in input cost is a major cause ofconcern. to Due to grave shortage in working capital the company is in no position toutilize more than 15% of the installed capacity of its manufacturing facility thoughthere is an active demand in the market. With no sign of improvement in overall economicscenario and company’s internal situations and stability in input cost the companylooks forward to year 2018-19 with caution.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company remains committed to maintain its internal control system and procedures toprovide reasonable assurances for efficient conduct of business and security of itsassets. The Company has an elaborate budgetary control system and actual performance isconsistently monitored by the Management. The Company has a well authority levels andinternal guidelines and rules. Your company has adequate internal control systems inplace commensurate with the size scale and complexity of the operations. The Company hasalready carried out an audit on internal financial control by third party. The StatutoryAuditors have also commented on the internal financial control on financial Reporting intheir report.

DEPOSITS

The Company had not accepted / renewed any Deposit during the year under review andthere was no outstanding Deposit.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of section 125 of the Companies Act 2013 dividends whichremained unpaid or unclaimed for a period of 7 years have been transferred by the companyto the Investor Education and Protection Fund.

DIRECTORS

All Independent directors have given declaration that they meet the criteria ofindependence as laid down under section 149(6) of the Companies Act 2013 and Regulation16 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

Mr. Sunil K. Khaitan Chairman-cum-Managing Director of the Company retire by rotationand being eligible offers himself for reappointment. The Directors recommend hisappointment at the forthcoming Annual general Meeting. Mrs. Sujata Chatterjee (DIN:00245656) was appointed as an additional director by the board of directors of the Companyw-e-f 25.04.2018. She is B.A. (Hons.) and M.A. She has nearly a decade of experience inFinancial Management and Administration. The Directors recommend her appointment asIndependent Director at the forthcoming Annual general Meeting for a period upto up to24th April 2023. Mr. Gairik Banerjee was appointed as independent additional directorwith effect from 09.06.2017. His appointment was confirmed in the Annual dated 28.09.2017.Mr. Gairik Banerjee is M.com Llb. MBA and ABD. He has good experience in Management andis also Director in several other companies. The details of the Director being recommendedfor appointment are contained in the accompanied Notice of the forthcoming Annual GeneralMeeting. Mr. Sajjan Dabriwal Non - Executive Independent Director resigned from the Boardw.e.f 23.10.2017.

Mr. V. K. Rungta Non-Executive Independent Director resigned from the Board w.e.f12.05.2017.

Mr. Shiv Kumar Bajaj Non-Executive Independent Director resigned from the Board w.e.f20.03.2018. As a consequence the number of Board of Directors has been reduced to two (2)directors. Mrs. Sujata Chatterjee was appointed as Non-Executive Independent AdditionalWoman Director w.e.f 25.04.2018 to fill the vacancy caused.

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS UNDER SECTION 186

Particulars of loans given investments made guarantees given and securities providedare provided in the Financial Statement.

LOAN TO DIRECTORS

During the year the Company has not advanced any loan nor given any guarantee norprovided any security in connection with any loan made to any of its Director/s or to anyother person in whom the Director is interested as mentioned in Section 185 of theCompanies Act 2013 read with Rule 10 of the Companies (Meetings of Board and its Powers)Rules 2014.

CHANGE IN KEY MANAGERIAL Meeting PERSONNAL

There has been no change in Key Managerial Personnel during the year.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS material ordersThere are no significant passed by the Regulators / Courts which would impact the goingconcern status of the Company and its future operations.

CORPORATE GOVERNANCE

Pursuant to Regulation 27 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 Corporate Governance Report Chairman and Managing Director’sdeclaration regarding compliance to code of conduct and Auditors’ Certificateregarding compliance to conditions of Corporate Governance are made a part of the AnnualReport.

AUDITORS REPORT: REPLY TO QUALIFICATION IN AUDITORS REPORT

The Board has duly examined the Statutory Auditor’s report to accounts. The replyof the management in regard to the qualifications in the auditor’s report is asfollows.

a) Regarding auditor preparation of accounts ongoing concern basis the Managementbelieves that the Company will be able to generate sufficient resources to be able tocontinue as a going concern. Accordingly these financial statements have been preparedunder the going concern assumption and that no adjustments are required to the carryingvalue of assets and liabilities.

b) Regarding auditor qualification on balance due to / from creditors parties to whomadvances have been given and certain debtors which are subject to confirmations themanagement is however of the view that no materials adjustment will be required to bemade on receipt of confirmations of the parties.

c) Regarding auditor qualification provision for Bank Interest from the month of July2017 since all the bank accounts has been declared NPA by the banks. As such themanagement has decided that it is prudent and conservative to not provide for suchinterest payable till such time they are settled.

d) Regarding auditor qualification non for provision of interest to a party defaultingin repayment of dues and interest the management has decided that it is prudent andconservative to not provide for such interest receivable till such time they are settled.

The necessary clarifications wherever necessary have been included in the Notes toAccounts section of the Annual Report.

STATUTORY AUDITORS

The appointment of Statutory Auditors of the company M/s Bidasaria & AssociatesChartered Accountants (FRN 315101E) shall continue till the conclusion of the 46th AnnualGeneral Meeting of the Company.

COST AUDITORS

M/s. Prasad & Company was appointed as Cost Auditors to do the audit for thefinancial year ended 31st March 2018.

Due to sad demise of one of the partners the said firm was dissolved before completionof audit. on Thereafter SPK Associates Cost Accountants Kolkata were appointed by theBoard of Directors as Cost Auditors to do the Cost Audit for the financial year ending31st March 2018 and 31st March 2019.

NUMBER OF BOARD MEETINGS HELD

The Board of Directors met 4 times during the financial year 2017-18. The dates onwhich the meetings were held are as follows: June 9th 2017 (The original Board meetingscheduled to be held on 29th May 2017 first adjourned to 5th June 2017 was adjourned dueto want of quorum) August 17th 2017 (The original Board meeting scheduled to be held on10th August 2017 was adjourned due to want of quorum) November 8th 2017 and February12th 2018.

PERFORMANCE EVALUATION

Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a separate exercise was carried out toevaluate the performance of individual Directors including the Chairman of the Board whowere evaluated on parameters such as level of engagement and contribution and independenceof judgment thereby safeguarding the interest of the Company. The performance evaluationof the Independent Directors was carried out by the entire Board. The performanceevaluation of the Chairman and the Non Independent Directors was carried out by theIndependent Directors. The board also carried out annual performance evaluation of theworking of its Audit Nomination and Remuneration as well as stakeholder relationshipcommittee. The Directors expressed their satisfaction with the evaluation process.

DETAILS IN RESPECT OF FRAUD

During the Financial Year 2017-18 the Auditors have not reported any Fraud asprescribed under Section 143(12) of the Act.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act 2013 Directors of your Company herebystate and confirm that:

a) in the preparation of the annual Financial Statements for the year ended 31st March2018 the applicable accounting standards have been followed along with proper explanationrelating to material departures;

b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company at the end of the financialyear and of the loss ofthe company for the same period;

c) the directors have taken proper and sufficient care for the maintenance ofon nonadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the company and for preventing and detecting fraud andother irregularities;

d) they have prepared the annual accounts on a going concern basis;

e) they for have laid down proper internal financial that are adequate and wereoperating effectively.

f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and these are adequate and are operating effectively.

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