Your Directors hereby present their 34th Annual Report along with Audited FinancialStatements for the year ended March 31 2018.
First year of implementation of Indian Accounting Standards (Ind AS):
This is the first year of implementation of the Indian Accounting Standards (Ind AS).The Financial Statements for the year ended March 31 2018 have been prepared inaccordance with the Indian Accounting Standards (Ind AS) noti ed under section 133 of theCompanies Act 2013 read with Companies (Accounts) Rules 2014. The Financial Statementsfor the year ended March 31 2017 have been restated in accordance with Ind AS forcomparative information.
|FINANCIAL RESULTS || ||(Rs in Lakhs) |
|Particulars ||Year Ended March 31 2018 ||Year Ended March 31 2017 |
|Revenue from Operations || || |
|Gross ||61783.37 ||48322.45 |
|Net of Excise Duty ||60164.24 ||42712.63 |
|Other Income ||565.80 ||360.48 |
|Profit before Finance Costs & Depreciation and amortisation expense ||4685.05 ||2292.13 |
|Finance Costs ||204.02 ||216.73 |
|Profit before Depreciation and amortisation expense ||4481.03 ||2075.40 |
|Depreciation and amortisation expense ||622.30 ||305.73 |
|Profit before Tax ||3858.73 ||1769.67 |
|Tax expenses - Current Tax ||1170.00 ||382.00 |
|- Deferred Tax ||224.69 ||147.36 |
| ||1394.69 ||529.36 |
|Profit after Tax ||2464.04 ||1240.31 |
|Balance brought forward ||732.23 ||(490.57) |
|Other Comprehensive Income ||(33.41) ||(17.51) |
|Surplus carried forward ||3162.86 ||732.23 |
Your Company reported a top-line growth of 27.86% over the Previous Year. The GrossRevenue from operations stood at Rs 61783.37 lakhs compared with Rs 48322.45 lakhs inthe Previous Year. The Operating Profit before tax stood at Rs 3858.73 lakhs as againstRs 1769.67 lakhs in the Previous Year. The Net Profit for the year stood at Rs 2464.04lakhs against Rs 1240.31 lakhs reported in the Previous Year.
The company continues to retain and reinforce its market leadership in modi edthermoplastics with a pan India network of operations having plants and warehousessituated in auto hubs and industrial belts.
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 and Analysis Report.
In view of the setting up of Global Scale Manufacturing and Contemporary Design andDevelopment Center at Chakan Pune it is necessary to conserve and optimise use ofresources for the same. Hence your Directors have not recommended any dividend for thefinancial year ended March 31 2018.
As on March 31 2018 the reserves and surplus stood at Rs 29318.27 Lakhs as comparedto Rs 23364.23 Lakhs as on March 31 2017.
RIGHTS ISSUE OF EQUITY SHARES
As the Members are aware that the Rights Issue got opened on March 27 2017 and closedon April 10 2017. The Company had issued 1999893 equity shares of face value Rs 10/-each for cash at issue price of Rs 750/- per equity share including share premium of Rs740/- per equity share in the ratio of 18 equity shares for every 91 equity shares heldaggregating to Rs 14999.20 Lakhs to the existing Shareholders of the Company.
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 2018 was Rs 132.55 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
The Company has completed the land contouring and appropriate levelling and nalizedContractor for Civil Electrical Fire Fighting HVAC Water System for construction ofFactory Building at Chakan Industrial Area Phase- 2 MIDC Village Vasuli - Shinde Tal -Khed Dist - Pune India and the civil construction work is under process for setting up agreen eld manufacturing location which would also house a State of Art "Technical andProduct Development" Centre to meet the growing needs of the Company.
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 scope and authority of the Internal Audit function isdefined in the Internal Audit Manual. To maintain its objectivity and independence theInternal Audit function reports to the Chairman of the Audit Committee of the Board and tothe Managing Director.
The Internal Audit Department monitors and evaluates the ef cacy and adequacy ofinternal control 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 processflowners undertake corrective action in their respective areas andthereby strengthen the controls. Signi cant audit observations and recommendations alongwith corrective actions thereon are presented to the Audit Committee of the Board.
COPORATE 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 Report on CSR activities as required under theCompanies (Corporate Social Responsibility Policy) Rules 2014 is annexed as Annexure Iand forms an integral part of this Report.
ENVIRONMENT HEALTH AND SAFETY
The facilities of the Company renewed their ISO 14001 and OHSAS 18001 certi cation.
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 the Company has formulated and implemented a policy onprevention of sexual harassment at the workplace with a mechanism of lodging complaints.The Company has not received any complaint under this policy during the 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 ef ciency.
A. Rotation of Director
Your Director Mr. N.K.Ramaswamy retire by rotation and being eligible offers himselffor re-appointment.
B. Declaration by an Independent Director(s)
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 read with SEBI(LODR) Regulations 2015.
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
The details of the number of Meetings of the Board held during the Financial Year 201718 forms part of the Corporate Governance Report.
COMMITTEES OF THE BOARD
The details of the various Committees of the Board i.e. Audit Committee Nomination andRemuneration Committee Stakeholder Relationship Committee Corporate SocialResponsibility Committee and Rights Issue Committee held during the Financial Year 2017 18are provided in the Corporate Governance Report.
Pursuant to the provisions of the Companies Act 2013 and SEBI (LODR) Regulations2015 the Board has carried out performance evaluation of itsflown performance thedirectors individually as well as the evaluation of the working of its Audit Nomination& Remuneration and other Committees as required. The manner in which the evaluationhas been carried out has been explained in the Corporate 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.
DIRECTORS' RESPONSIBILITY STATEMENT
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 Section 134(3)(c) of the Companies Act 2013:
(i) that in the preparation of the Annual Accounts for the year ended 31st March 2018the 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 2018 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 POLICY AND VIGIL MECHANISM
In pursuant to the provisions of the Companies Act 2013 a Whistle Blower Policy andVigil Mechanism for Directors and Employees to report genuine concerns has beenestablished. 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 Company hasformulated and adopted a Code for Prevention of Insider Trading and the same has beenuploaded on the website of the Company.
M/s. P.G.BHAGWAT Chartered Accountants (Firm Registration Number 101118W) wereappointed as Statutory Auditors of your Company at the Annual General Meeting held on 25thSeptember 2017 for a term of five consecutive years to hold office from the conclusion ofthe 33rd Annual General
Meeting till the conclusion of the 38th Annual General Meeting of the Company. Theirappointment as the Statutory Auditors will be rati ed at the ensuing Annual GeneralMeeting pursuant to the provisions of Section 139 of the Companies Act 2013 and Rulesmade thereunder. Accordingly the necessary resolution is being placed before theshareholders for their approval.
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 CP No. 8675 of M/s.Vaishnav Associates to undertake the Secretarial Audit ofthe Company. 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 appointedMr.K.Suryanarayanan Cost Accountant (Registration Number 102347) as Cost Auditor to auditthe cost accounts of the Company for the financial year 2018-19. 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 rati cation.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT-9 is annexedherewith as Annexure IV.
BUSINESS RISK MANAGEMENT
Business risk evaluation and management is an ongoing process within the Company. TheAssessment is periodically examined by the Board.
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 this Report.
The particulars of employees are not applicable since there are no employees drawingremuneration more than Rs 9600000/- per annum (full year) or Rs 800000/- p.m. (part ofthe year).
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. Details of dividends remaining unclaimed as on31.03.2018 are as under :
|Year ||Date of declaration ||No. of Shareholders ||Total Unclaimed Dividend (Rs) ||Due date for transfer to IEPF Account |
|2010 - 2011 ||29.09.2011 ||729 ||60868.80 ||05.11.2018 |
|2011 2012 to 2016 - 2017 ||No Dividend declared || ||N.A. || |
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 theCerti cate from the Auditor of the Company regarding compliance with the requirements ofCorporate Governance as stipulated under various regulations of the SEBI (ListingObligations and disclosure requirements) Regulations 2015.
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 con dence.
| ||For and on behalf of the Board of Directors || |
| ||BO JINGEN ||N.K. RAMASWAMY |
| ||Managing Director ||Director |
|Place ||: Chennai || |
|Date ||: 28th May 2018 || |