Your Directors hereby present their 35thAnnual Report along with Audited FinancialStatements for the year ended March 31 2019.
( Rs in Lakhs)
|Particulars ||Year Ended March 31 2019 ||Year Ended March 31 2018 |
|Revenue from Operations || || |
|Gross ||70152.45 ||61783.37 |
|Net of Excise Duty ||70152.45 ||60164.24 |
|Other Income ||437.69 ||565.80 |
|Profit before Finance Costs Depreciation and || || |
|Amortisation Expense & Tax Expenses ||3930.40 ||4685.05 |
|Finance Costs ||207.24 ||204.02 |
|Profit before Depreciation and || || |
|Amortisation Expense & Tax Expenses ||3723.16 ||4481.03 |
|Depreciation and Amortisation Expense ||800.80 ||622.30 |
|Profit before Tax Expenses ||2922.36 ||3858.73 |
|Tax expenses - Current Tax ||1090.00 ||1170.00 |
|- Deferred Tax ||(73.15) ||224.69 |
| ||1016.85 ||1394.69 |
|Profit after Tax Expenses ||1905.51 ||2464.04 |
|Balance brought forward ||3162.86 ||732.23 |
|Other Comprehensive Income ||14.43 ||(33.41) |
|Surplus carried forward ||5082.80 ||3162.86 |
Your Company reported a top-line growth of 16.60% over the Previous Year. The NetRevenue from operations stood at Rs 70152.45 Lakhs compared with Rs 60164.24 Lakhs inthe Previous Year. The Operating Profit before tax stood at Rs 2922.36 Lakhs as againstRs 3858.73 Lakhs in the Previous Year. The Net Profit for the year stood at Rs 1905.51Lakhs against Rs 2464.04 Lakhs reported in the Previous Year. The company continues toretain and reinforce its market leadership in modified thermoplastics with a pan Indianetwork of operations having plants and warehouses situated in auto hubs and industrialbelts.
There are no material changes or commitments affecting the financial position of theCompany which have occurred between the end of the financial year and the date of thisReport.
Detailed analysis of the State of the Company's affairs and performance during the yearis provided in Annexure to this report under Management's Discussion andAnalysis Report.
The Board of Directors of your Company after considering and keeping in view ofsetting up of Global Scale Manufacturing and Development Center at Chakan in Pune hasdecided that it would be prudent not to recommend any dividend for the year under review.
As on March 31 2019 the reserves and surplus stood at Rs 31238.20 Lakhs as comparedto Rs 29318.27 Lakhs as on March 31 2018. Your Directors do not propose to transfer anyamount to the reserves.
The paid up equity capital of the Company stood at Rs 1211.05 Lakhs. The Company hasnot issued shares with differential voting rights nor granted stock options nor sweatequity.
Cash and cash equivalents as at March 31 2019 was Rs 5310.25 Lakhs. The companycontinues to focus on judicious management of its working capital receivablesinventories and other working capital parameters were kept under strict check throughcontinuous monitoring.
STATUS OF NEW MANUFACTURING FACILITY
We furnish below the progress at the new Manufacturing Facility at Chakan IndustrialArea Phase- 2 MIDC Village Vasuli - Shinde Tal - Khed Dist - Pune India forsetting up a green field manufacturing location which would also house a State of Art"Technical and Product Development" Centre to meet the growing needs of theCompany.
All Foundation and Basement Grid slab are in the finishing stage Ground floor andColumn work are in progress.
Civil work nearly to complete Roofing Carpentry Plumbing & Painting work are inprogress Underground water tank construction finished with hydro testing and MachineInstallation work started.
Civil work is in progress PEB fabrication work completed Installation work of rafterpurlin wall cladding and roofing sheet started and also Internal Brick Painting workstarted.
Infra Utility work
Road Soling work Rainwater harvesting pit work External Plumbing Compound wall workare all in progress.
Your Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Company has not given any loans or guarantees nor has made any Investments coveredunder the provisions of Section 186 of the Companies Act 2013.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The Company has appointed independent professional auditfirm to carry out internal audit at all its locations. The scope of its Internal Auditprogram is laid down by the Audit committee of the Board of Auditors. To maintain itsobjectivity and independence the Internal Audit function reports to the Chairman of theAudit Committee of the Board and to the Managing Director.
The Internal Audit team monitors and evaluates the efficacy and adequacy of internalcontrol system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company. Based on the report of internalaudit function process owners undertake corrective action in their respective areas andthereby strengthen the controls. Significant audit observations and recommendations alongwith corrective actions thereon are presented to the Audit Committee of the Board ofDirectors.
REPORTING OF FRAUDS
There was no instance of fraud during the year under review which required theStatutory Auditors to report to the Audit Committee and / or Board under Section 143(12)of Act and Rules framed thereunder.
CORPORATE SOCIAL RESPONSIBILITY
As a part of its initiative under the "Corporate Social Responsibility" (CSR)drive the Company has undertaken projects which are in accordance with the Companies Act2013 and the Company's CSR policy. The Company is considering various proposals forundertaking projects primarily focused on health care skill development sports trainingeducation rural development infrastructure development and projects directly benefittingthe weaker sections of the society and elderly citizens for its ongoing CSR initiatives.
The company looks forward to meeting the budgeted expenditure by contributing in thevarious CSR activities mentioned above and strives to achieve the CSR goals throughcommitted and structured projects and events. Though some projects have been financedsome are in the implementation stage to meet the CSR objectives of the Company.
The Report on CSR activities as required under the Companies (Corporate SocialResponsibility Policy) Rules 2014 is annexed as Annexure I and forms an integralpart of this Report.
ENVIRONMENT HEALTH AND SAFETY
The facilities of the Company renewed their ISO and OHSAS certification.
Your Company's policy require the conduct of all operations in such a manner so as toensure safety of all concerned compliance of statutory and industrial requirements forenvironment protection and conservation of natural resources to the extent possible.
As required by the Sexual Harassment of Women at Workplace (Prevention Prohibition& Redressal) Act 2013 and the Rules made thereunder the Company has formulated andimplemented a policy on prevention of sexual harassment at the workplace with a mechanismof lodging complaints. The Company has not received any compliant under this policy duringthe year under review.
Industrial relations remained cordial during the year.
Various HR initiatives are continuously taken to align the HR policies to the growingrequirements of the business. Reviews training and tools are being provided for thepersonnel to improve overall efficiency.
A. Changes in Directors
Mr.N.K.Ramaswamy Whole-time Director designated as Chief Executive Officer hasresigned as Director from the Board of the Company due to personal reasons with effectfrom October 15 2018. The Board wishes to place on record its appreciation of thevaluable service rendered by him during his tenure in the Company.
The Board of Directors on the recommendation of the Nomination and RemunerationCommittee appointed Mr.D.Balaji (DIN 0008256342) as an Additional Director of the Companywith effect from October 29 2018 subject to approval of the Shareholders at the ensuingAnnual General Meeting. The Board also appointed him as Whole-time Director of the Companydesignated as Executive Director consented to retire by rotation for a period of threeyears with effect from October 29 2018. The Board recommends for the approval of theMembers in the 35thAGM of your Company the appointment of Mr.D.Balaji.
B. Rotation of Director
Your Director Mr.Bo Jingen (DIN 06617986) retire by rotation and being eligibleoffers himself for re-appointment. The Directors recommend Mr.Bo Jingen forre-appointment.
C. Reappointment of Independent Director
Pursuant to the provisions of the Companies Act 2013 ("Act") theshareholders in the 30th AGM of your Company held on 25th July 2014 appointed Mr.N.Subramanian ((DIN : 03602858) as an Independent Non-Executive Director to hold officefor five consecutive years for a term up to 15th May 2019. Mr. N.Subramanian is eligiblefor re-appointment as an Independent Non Executive Director for a second term of fiveconsecutive years and have given his consent for re-appointment.
Pursuant to the provisions of the Act based on the recommendation of the Nominationand Remuneration Committee the Board considers that his continued association would be ofimmense benefit to the Company and it is desirable to continue his services and recommendsfor the approval of the Members through a Special Resolution in the 35th AGM of yourCompany the re-appointment of Mr. N.Subramanian as an Independent Non-Executive Directorfor second term of five consecutive years from 16th May 2019 upto 15th May 2024.
D. Declaration by an Independent Director(s)
The Independent Directors of your Company have given a declaration confirming that theymeet the criteria of independence as prescribed both under the Act and the ListingRegulations and the same is complied with Code of Conduct as per Schedule IV to theAct.
None of the Directors are disqualified from being appointed as or holding office asDirector as stipulated under Section 164 of theAct.
FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS
All Independent Directors inducted into the Board are familiarized with theOrganisation. The details of such program are provided in Corporate Governance Report.
NUMBER OF MEETINGS OF THE BOARD
During the year four Board Meetings were convened and held on 28th May 2018 10thAugust 2018 29th October 2018 and 29th January 2019 and details of the same are givenin the Corporate Governance Report which forms part of this Report.
COMMITTEES OF THE BOARD
The details of the various Committees of the Board i.e. Audit Committee Nomination andRemuneration Committee Stakeholder Relationship Committee and Corporate SocialResponsibility Committee held during the Financial Year 2018 19 are provided in theCorporate Governance Report.
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations the Board has carried out performance evaluation ofits own performance the directors individually as well as the evaluation of the workingof its Audit Nomination & Remuneration and other Committees as required. Theperformance evaluation of the Chairman of the Board and Managing Director / Board /Executive / Non Independent / Independent Directors was carried out. In the evaluation ofthe Directors the Directors being evaluated had not participated and the Board evaluationprocess was completed. The Directors expressed their satisfaction with the evaluationprocess. The manner in which the evaluation has been carried out has been explained in theCorporate Governance Report.
NOMINATION AND REMUNERATION POLICY
The Board of Directors has framed a policy which lays down a framework in relation toremuneration of Directors Key Managerial Personnel and Senior Management of the Company.This policy also lays down criteria for selection and appointment of Board Members. Thedetails of this policy are explained in the Corporate Governance Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators/Courts that wouldimpact the going concern status of the Company and its future operations.
To the best of knowledge and belief and according to the information and explanationsobtained by them your Directors make the following statement in terms of Section134(3)(c) of the Companies Act 2013:
(i) that in the preparation of the Annual Accounts for the year ended 31st March 2019the applicable accounting standards had been followed along with proper explanationrelating to material departures;
(ii) the directors had selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2019 and of the profitand loss of the Company for the year ended on that date;
(iii) that the directors has taken proper and sufficient care for the maintenance ofadequate 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;
(iv) the annual accounts had been prepared on a "going concern" basis.
(v) that the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
(vi) that the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such system were adequate and operatingeffectively.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of business. The Policy has beenuploaded on the website of the Company viz. www.kingfaindia.com. Form AOC-2 is annexedherewith as Annexure - II and forms an integral part of this report.
The Company does not have subsidiary.
CODE OF CONDUCT
Commitment to ethical professional conduct is a must for every employee includingBoard Members and Senior Management personnel of the Company. The Code is intended toserve as a basis for ethical decision-making in conduct of professional work. The Code ofConduct has been uploaded on the website of the Company viz. www.kingfaindia.com. ADeclaration regarding Compliance by Board Members and Senior Management Personnel is givenat the end of this report.
WHISTLE BLOWER POLICYAND VIGIL MECHANISM
In pursuant to the provisions of the Companies Act and Listing Regulations a WhistleBlower Policy and Vigil Mechanism for Directors and Employees to report genuine concernshas been established. The Policy has been uploaded on the website of the Company.
PREVENTION OF INSIDER TRADING
Pursuant to SEBI (Prohibition of Insider Trading) Regulations 2015 (The PITRegulations) the Company has formulated and adopted a Code for Prevention of InsiderTrading and the same has been uploaded on the website of the Company.
The Company's Statutory Auditors M/s. P.G.BHAGWAT Chartered Accountants (FirmRegistration Number 101118W) were appointed as Statutory Auditors of your Company at theAnnual General Meeting held on 25th September 2017 for a term of five consecutive yearsto hold office from the conclusion of the 33rd Annual General Meeting till the conclusionof the 38th Annual General Meeting of the Company. Their appointment was subject toratification by members at every subsequent Annual General Meeting held after the AGM heldon 25th September 2017.
Pursuant to the amendments made to Section 139 of the Companies Act 2013 by theCompanies (Amendment) Act 2017 effective from May 07 2018 the requirement of seekingratification of the members for the appointment of Statutory Auditors has been withdrawnfrom the Statute.
In view of the above ratification of members for continuance of their appointment atthis Annual General Meeting is not being sought.
There is no audit qualification for the year under review.
As per the provisions of the Companies Act 2013 the Report given by the Auditors onthe financial statements of the Company is part of the Annual Report.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethereunder the Company had appointed Ms. Shaswati Vaishnav Practicing Company SecretaryACS 11392 PCS 8675 of M/s.Vaishnav Associates to undertake the Secretarial Audit of theCompany. The Secretarial Audit Report is included as Annexure III and forms anintegral part of this Report. There is no secretarial audit qualification for the yearunder review.
Mr.K. Suryanarayanan Cost Accountant (Registration Number 102347) carried out the costaudit during the year under review.
In compliance with the provisions of Section 148 of the Companies Act 2013 the Boardof Directors on the recommendation of Audit Committee have appointed Mr.K.Suryanarayanan Cost Accountant (Registration Number 102347) as Cost Auditor to audit thecost accounts of the Company for the financial year 2019-20. As required under theCompanies Act 2013 a resolution seeking member's approval for the remuneration payableto the Cost Auditor forms part of the Notice convening the Annual General Meeting fortheir ratification.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT-9 is annexedherewith as Annexure-IV which forms an integral part of this Report and is also availableon the Company's website viz. www.kingfaindia.com
BUSINESS RISK MANAGEMENT
Business risk evaluation and management is an ongoing process within the Company. TheAssessment is periodically examined by the Board. The requirement of mandatoryconstitution of Risk Management Committee currently is not applicable to the Company underthe Listing Regulations.
The information on Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo pursuant to Section 134(3)(m) of the Companies Act 2013 read with theRule 8(3) of the Companies (Accounts) Rules 2014 is given in Annexure V to thisReport.
The particulars of employees are not applicable since there are no employees drawingremuneration more than Rs 10200000/-per annum (full year) or Rs 850000/- p.m. (partof the year). The Top ten employees are Mr. Bo Jingen Mr. Wu Xiaohui Mr. D.Balaji Mr.Xie Dongming Mr. Nirnoy Sur Mr. R Jeevanandam Mr. B. Saravanan Mr. S Shanmugasundaram Mr. Harshad Panat and Mr. Sanny Rathi.
All the dividends of the earlier years which have remained unclaimed have since beentransferred to the Investor Education and Protection Fund at the expiry of the specifiedperiod(s) as required under Companies Act.
|Year ||Date of declaration ||No. of Shareholders ||Total Unclaimed Dividend (`) ||Due date for transfer to IEPF Account |
|2011 2012 to 2017 - 2018 ||No Dividend declared || ||N.A. || |
Transfer of Equity Shares to IEPF Demat Account
During the year under review pursuant to Section 124 (6) ofAct and the Rules &Circulars notified thereunder 58767 Shares on which dividend was unclaimed/unpaid forseven years have been transferred to a demat account of the Investor Education andProtection Fund Authority (IEPF) Authority. Of the above 53526 Shares in the physicalform and 5241 Shares in dematerialised form. The details of the nodal officer can beaccessed at www.kingfaindia.com. Shares which are transferred to the Demat Account ofIEPFA can be claimed back by the shareholders from IEPFA by following the procedureprescribed under the rules. This complies with applicable SS1 Standards.
CORPORATE GOVERNANCE AND MANAGEMENT'S DISCUSSION & ANALYSIS REPORTS
The Corporate Governance and Management's Discussion & Analysis Report which forman integral part of this Report are set out as separate Annexures together with theCertificate from the Auditors of the Company regarding compliance with the requirements ofCorporate Governance and Certificate of Non Disqualification of Directors as stipulatedunder various regulations of the SEBI (Listing Obligations and Disclosure Requirements)Regulations.
Your Directors wish to record their appreciation of the continued support andco-operation from your Company's customers vendors bankers and all other stakeholders.Your Company will continue to build and maintain strong links with its business partners.
The Directors sincerely appreciate the high degree of professionalism commitment anddedication displayed by employees at all levels. The Directors also place on record theirgratitude to the Members for their continued support and confidence.
For and on behalf of the Board of Directors
|BO JINGEN ||D. BALAJI |
|Managing Director ||Executive Director |
|Place : Chennai || |
|Date : 28th May 2019 || |