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Kiri Industries Ltd.

BSE: 532967 Sector: Industrials
BSE 00:00 | 14 Jun 508.20 -5.75






NSE 00:00 | 14 Jun 507.20 -5.75






OPEN 505.35
52-Week high 684.00
52-Week low 372.00
P/E 13.27
Mkt Cap.(Rs cr) 1,593
Buy Price 505.20
Buy Qty 20.00
Sell Price 508.20
Sell Qty 71.00
OPEN 505.35
CLOSE 513.95
52-Week high 684.00
52-Week low 372.00
P/E 13.27
Mkt Cap.(Rs cr) 1,593
Buy Price 505.20
Buy Qty 20.00
Sell Price 508.20
Sell Qty 71.00

Kiri Industries Ltd. (KIRIINDUS) - Director Report

Company director report


The Members

Kiri Industries Limited

Your Directors have pleasure in presenting their 20th Annual Report togetherwith Audited Accounts of the Company for the financial year ended on March 312018.

• Standalone Performance:

The highlights of Company's financial performance for the year ended March 312018 areas under:

(Rs. In Crore)
Particulars 2017-18 2016-17
Total Revenue 904.59 1035.52
Earning Before Finance Cost Depreciation and Tax 133.41 129.57
Less: Finance Cost 1.65 8.03
Depreciation 25.05 22.18
Earning before taxation 106.71 99.36
Less: Current Tax 22.77 -
Deferred Tax 4.17 5.14
Add: Other Comprehensive Income 0.69 (0.65)
Add: Adjustment of excess tax provision (22.77) -
Earnings After Tax 102.60 94.15

• Highlights of Operations

• Total Revenue:

During the year under review the revenues of the Company decreased by 13.00%. TheCompany has reported turnover of Rs. 904.59 Crore for the financial year 2018 as comparedto Rs. 1035.52 Crore financial year 2017. The major reason for reduction in the revenueshas been due to unavoidable shut down of certain plant(s) for certain modifications forenduring product mix and repairs and maintenance required to manufacture certain otherproducts.

• Earning before Interest Depreciation and Tax (EBIDTA):

During the year under review Earning(s) before Interest Depreciation and Tax hasincreased by 3% from Rs.129.57 Crore to Rs.133.41 Crore. The increase in EBIDTA is mainlyon account of increase in gross margins which have increased by around 6% as compared toprevious year.

• Total Expense:

During the financial year 2018 the company has achieved a reduction in total expenseof around 15% a reduction of Rs.138.28 Crore from Rs.936.16 Crore to Rs.797.88 Crore ascompared to previous financial year. Finance cost reduced by 80% from Rs.8.03 Crore toRs.1.65 Crore on account of reduction of debts of the Company.

• Earnings After Tax:

During the financial year 2018 earning after tax (EAT) has increased by around 9%.Earning after Tax (EAT) is increased to Rs.102.60 Crore as compared to Rs. 94.15 Crore ofthe previous financial year ended March 31 2017. Improvement in gross margins by around6% and reduction in finance cost are the two major factors for increase in EAT of theCompany.

• Highlights of Consolidated Performance

The highlights of Company's consolidated financial performance for the year endedMarch 312018 are as under:

(Rs. In Crore)
Particulars 2017-18 2016-17
Total Revenue 1136.76 1200.73
Earning Before Finance Cost Depreciation and Tax 182.52 161.43
Less: Finance Cost 3.48 9.11
Depreciation 34.07 29.10
Earning Before Taxation 144.97 123.20
Less: Current Tax 37.62 8.36
Deferred Tax 3.45 4.49
Add: Adjustment of excess tax provision (22.77) 0.84
Earnings After Tax 126.67 109.51
Add: Other Comprehensive Income 0.72 (0.19)
Add: Share of Profit from Associate 231.35 156.11
Earnings After Tax for the year 358.09 265.60

• Highlights of Operations

• Total Revenue:

During the year under review the total revenue reduced by 5% to Rs.1136.76 Crore fromRs.1200.73 Crore as compared to the previous financial year ended March 31 2017. Theconsolidated revenues have decreased mainly on account of reduction in prices of key dyesintermediates and due to unavoidable shut down of certain plant(s) for certainmodifications for enduring product mix and repairs and maintenance required to manufacturecertain other products.

• Earnings before Interest Depreciation and Tax (EBIDTA):

During the year under review improvement in gross margins and control over operationalcosts as compared to previous year have enhanced Earnings before Interest Depreciationand Tax by 13% to Rs.182.52 Crore from Rs.161.43 Crore.

• Finance Cost:

During the year under review the Finance Costs has substantially reduced by around 62%amounting to Rs.3.48 Crore from Rs.9.11 Crore as compared to the previous financial yearon account of reduction of high cost debt of the parent company.

• Total Expense:

During the year under review the consolidated total expenditure has decreased by 8% toRs.991.79 Crore as compared to Rs.1077.53 Crore of the previous financial year. Thereduction in operational costs and finance cost have been provided instrumental inreduction of total consolidated expenditure.

• Earnings After Tax:

During the year under review the earnings after tax before share of profit fromassociates & OCI is increased to Rs.126.67 Crore as compared to Rs.109.51 Crore ofprevious financial year ended March 31 2017. Consolidated EAT has been increasedsubstantially by 16% as compared to previous financial year.

• Transfer to Reserves

Appropriations to general reserve for the financial year ended March 312018 as perstandalone and consolidated financial statements are as under:

(Rs. In Crore)
Particulars Standalone Consolidated
Net profit for the year 102.60 358.09
Balance of Reserve at the beginning of the year 228.89 867.25
Transfer to General Reserve - -
Balance of Reserve at the end of the year 416.09 1309.88

• Dividend

Dividend on Cumulative Redeemable Preference Shares:

Your Directors have recommended dividend @ 0.15% on 4333500 Cumulative RedeemablePreference Shares (Preference Shares) of Rs.10.00 each for the year ended March 31 2018.The aggregate amount of the dividend on 4333500 Preference Shares is Rs. 78235/-including dividend distribution tax amounting to Rs. 13233/-.

Dividend on Equity Shares:

Your directors are unable to declare any dividend on the equity shares of the Companypursuant to the proviso under section 123(1) of the Companies Act 2013 as the carriedover previous losses are not set off against the profit of the current financial year.Accordingly the profit realized during the current financial year are proposed to beutilized to meet envisaged capital expenditure and repayment of outstanding debts of theCompany.

Transfer of Unclaimed Dividend to Investor Education and Protection Fund:

During the year 2017-18 unclaimed dividend for financial year 2009-10 of Rs. 81266/-was transferred to the Investor Education and Protection Fund (IEPF) as required underthe Investor Education and Protection Fund Authority (Accounting Audit Transfer andRefund) Rules 2016.

• Subsidiaries and Consolidated Financial Statements

The Company had prepared Consolidated Financial Statements in accordance with theIndian Accounting Standards (Ind AS). The Company has also presented financial statementsas per Schedule III to the Companies Act 2013. Except where otherwise stated theaccounting policies are consistently applied.

The Board reviewed the affairs of the Company's subsidiaries during the year at regularintervals. In accordance with section 129(3) of the Companies Act 2013 the Company hasprepared Consolidated Financial Statements of the Company and its subsidiary/Associatesand Joint Venture which form part of this Annual Report. A statement containing salientfeatures of the financial statements of the subsidiary / joint venture / associatecompanies in Form AOC-1 is provided as Annexure A which forms part of theDirectors Report of the Company.

In accordance with third proviso to Section 136 of the Companies Act 2013 the AnnualReport of your Company contains inter alia the audited standalone and consolidatedfinancial statements.

• Listing Fees

The Equity Shares of your Company are listed and actively traded on the BSE Limited(BSE) and the National Stock Exchange of India Limited (NSE). The Company had paid AnnualListing fees to both the stock exchanges for the Financial Year 2018-19 within thestipulated time.

• Directors

During the year under review there is no change in composition of Board of Directorsof the Company.

Mr. Pravin Kiri Whole Time Director of the Company retires at the ensuing AnnualGeneral Meeting (AGM) and being eligible offers himself for re-appointment. A briefprofile of Mr. Pravin Kiri as required under Regulation 36(3) of the SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 is annexed to the Notice ofAGM of the Company.

• Declaration of Independent Directors

During the year under review all the Independent Directors have given theirdeclarations stating that they meet the criteria of independence as prescribed underSection 149(6) of the Companies Act 2013 and SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015. In opinion of the Board they fulfill the conditions ofindependence as specified in the Companies Act 2013 and Rules made thereunder.

• Board Meetings as well as separate Meeting of Independent Directors:

During the year the Board met 5 (Five) times on May 25 2017 August 25 2017September 21 2017 November 27 2017 and February 13 2018. The intervening gap betweenany two meetings was within the period prescribed by the Companies Act 2013.

Pursuant to the requirements of Schedule IV to the Companies Act 2013 and the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 a separate Meeting ofthe Independent Directors of the Company was held on March 30 2018.

• Statutory Auditors:

M/s. Pramodkumar Dad & Associates Chartered Accountants were appointed asStatutory Auditors of the Company at the 19th Annual General Meeting of theCompany for a term of 5 (Five) consecutive years and they shall hold the office upto 24thAnnual General Meeting of the Company to be held in year 2022. They have confirmed thatthey are not disqualified for continuing as Auditors of the Company.

The Notes on financial statements referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation adverse remark or disclaimer.

• Cost Auditors:

The Audit Committee of the Company at their meeting held on May 25 2017 hasrecommended to the Board of Directors for appointment and fixing of remuneration of M/s.V. H. Savaliya & Associates Cost Accountants for audit of cost records of theCompany for the financial year 2017-18. The Board of Directors of the Company at theirmeeting held on May 25 2017 has appointed M/s. V. H. Savaliya & Associates as CostAuditors of the Company.

The Cost Audit Report for the financial year 2017-18 issued by M/s. V. H. Savaliya& Associates Cost Accountants does not contain any qualification reservation oradverse remark.

• Secretarial Auditors:

I n compliance of the provision of section 204 of the Companies Act 2013 otherapplicable provisions of the Companies Act 2013 the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 and other applicable rules framed thereunder (subject to modification or re-enactment thereof from time to time) the Board ofDirectors at their meeting held on August 25 2017 has appointed M/s Kashyap R. Mehta& Associates Practicing Company Secretary Ahmedabad as Secretarial Auditor forconducting Secretarial Audit of the Company for the year 2017-18. The secretarial auditreport is attached herewith as "Annexure - B".

Certain remarks in the secretarial audit report do not have material impact onfinancial performance of the Company. The views of the Management on each such remark aregiven hereunder:

1. Ownership of an agricultural land intended for industrial purpose will betransferred in the name of the company upon receiving necessary approval for conversioninto non agriculture land.

The land is acquired for future expansion of the Company. Since a Company cannot holdagriculture land it is initially acquired in the name of Chairman of the Company and thesame would be transferred in the name of the Company after its conversion intononagriculture land.

2. During the year under review the Company has received a show cause notice fromSecurities and Exchange Board of India ("SEBI") dated August 04 2017 regardingdelayed disclosure to BSE and nondisclosure to NSE under Regulation 13(6) of SEBI(Prohibition of Insider Trading) Regulations 1992 in respect of acquisition of 1948968shares by Ms. Anupama M. Kiri Promoter on 19th December 2014. Based on our analysis ofdocuments provided by the Company for audit we observe that while the Company had madedisclosure to both the exchanges there was a delay of one (1) day in respect of makingsuch a disclosure. The Company made a settlement application dated December 18 2017 toSEBI and a subsequent offer dated May 30 2018 proposing to pay Rs. 288682 towardssettlement terms and offered to undertake to comply with direction(s) which may be issuedby SEBI. The matter is under consideration at the relevant forum at SEBI.

There was delay of 1 day in disclosure under Regulation 13(6) of SEBI (Prohibition ofInsider Trading) Regulations 1992 in respect of acquisition of 1948968 shares by Ms.Anupama M. Kiri Promoter on 19th December 2014 to buy mental piece the company do notwant to fight with regulators hence filed settlement application with SEBI and the matterwants to settle by payment of Rs. 288682 towards consent fees.

3. The Company has filed all due ECB-2 returns for the financial year under review inrespect of FCCB with some delays for certain months. Revision of drawdown dates for FCCBhas been intimated directly in the relevant ECB-2 returns.

There was some delay in filing of ECB-2 returns for reporting under Foreign ExchangeManagement Act 1999 and ECB guideline with respect to reporting of Foreign CurrencyConvertible Bonds ("FCCBs") which do not have material impact on financialperformance of the Company.

• Details in respect of frauds reported by Auditors other than those which arereportable to the Central Government:

During the year under review the Statutory Auditors Cost Auditors or SecretarialAuditors of the Company have not reported any frauds to the Audit Committee or to theBoard of Directors as prescribed under Section 143(12) of the Companies Act 2013 andrules made thereunder.

• Vigil Mechanism process:

As per the provisions of Section 177 of the Companies Act 2013 ("the Act")and Regulation 22 of the Listing Regulations the Company has devised a vigil mechanismnamed Whistle Blower Policy for escalating system of ethical concerns etc and to deal withinstances of fraud and mismanagement if any. The details of the Whistle Blower Policy areavailable on the website of the Company at

• Related Party Transactions:

During the year under review all the related party transactions are entered on arm'slength basis in the ordinary course of business and are in compliance with the applicableprovisions of the Companies Act 2013 and the SEBI (LODR) Regulations 2015. There are nomaterially significant related party transactions made by the Company with PromotersDirectors or Key Managerial Personnel etc. which may have potential conflict with theinterest of the Company at large or which requires the approval of the shareholders.Therefore no transactions are being reported in Form AOC-2 in terms of Section 134 of theAct read with Rule 8 of the Companies (Accounts) Rules 2014. The details of thetransactions with Related Party are provided in the Company's audited financial statementsin accordance with the Accounting Standards.

All Related Party Transactions are placed before the Audit Committee and the Board inevery quarter. Omnibus approval is obtained for the transactions which are forecasted andare repetitive in nature. An abridged policy on related party transactions is available onthe website of the Company i.e.

• Material Subsidiaries Policy:

Your Company has also implemented Material Subsidiary Policy as per the requirementsunder regulation 16 of the Listing Regulations for determining the material subsidiariesand material non-listed Indian subsidiaries of the Company and to provide the governanceframework for them. The said policy available on the website of the Company

• Code of Conduct for Directors and Senior Managerial Persons:

In terms of provisions of SEBI (LODR) Regulations 2015 the Board of Directors of theCompany have laid down a Code of Conduct for all Board Members and Senior ManagementPersonnel of the Company. The Board Members and Senior Management Personnel of the Companyhave affirmed compliance with the Code. The Managing Director of the Company has given adeclaration to the Company that all the Board Members and Senior Management Personnel ofthe Company have affirmed compliance with the Code. The said Code of Conduct has beenavailable on the website of the Company at

• Code for Prevention of Insider Trading:

The Company has adopted a Code of Conduct for Prevention of Insider Trading approvedby the Board of Directors inter alia prohibits trading in securities of the Company byDirectors and employees while in possession of unpublished price sensitive information inrelation to the Company. The said code is available on the website of the Company

• Prevention of Sexual Harassment at Workplaces:

The Company has zero tolerance for sexual harassment at workplace and has adopted aPolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules made thereunder. The said policy isavailable on the website of the Company at The Company has anInternal Complaint Committees in compliance with the above mentioned Act and Rules. Duringthe financial year 2017-18 no complaint in this regard was received by the Company.

• Public Deposits:

During the year under review the Company has not accepted any deposits from publicwithin the meaning of provisions of Section 73 of the Companies Act 2013 and otherapplicable provisions of the Act the Companies (Acceptance of Deposits by Companies)Rules 2014 and other applicable rules framed there under (subject to modification orre-enactment thereof from time to time).

• Changes In Capital Structure:

Allotment of Equity Shares:

During the year under review the Board of Directors of the Company at their meetingheld on November 27 2017 has allotted 2400000 Equity Shares upon conversion of warrantsissued on preferential basis to Equinaire Chemtech LLP Promoter Group of Company.Therefore issued and paid up equity share capital has been increased from Rs.27.84 Croreto Rs.30.24 Crore.

During the year under review the Company has not issued shares with differentialvoting rights and sweat equity shares.

• Employee Stock Option Scheme

In order to motivate incentivize and reward employees your Company has institutedemployee stock options plan. The Board of Directors and Nomination and RemunerationCommittee administers this plan. The stock option plan is in compliance with Securitiesand Exchange Board of India (Share Based Employee Benefits) Regulations 2014("Employee Benefits Regulations") and there have been no material changes tothis plan during the financial year. Disclosures on ESOP plan details of options grantedshares transferred to employee through Kiri Employee Stock Option Trust ("ESOPTrust") upon exercise etc. as required under the Employee Benefits Regulations readwith Securities and Exchange Board of India circular no. CIR/CFD/POLICY CELL/2/2015 datedJune 16 2015 are available on the Company's website at

No employee was issued stock option during the year equal to or exceeding 1% of theissued capital of the Company at the time of grant. Kiri Employee Stock Option Trust is anESOP Trust set up by your Company pursuant to approval by the shareholders at their AnnualGeneral Meeting held on 26th September 2014 the ESOP Trust is authorized to transfershares from the Trust account to employees on exercise of vested options.

The Company has received a certificate from the statutory auditors of the Company thatthe scheme has been implemented in accordance with the SEBI Regulations and theresolutions passed by the shareholders. The certificate would be placed at the ensuing AGMfor inspection by the members.

• Directors Responsibility Statement:

Pursuant to the provisions of Section 134 (5) of the Companies Act 2013 with respectto Directors' Responsibility Statement it is hereby confirmed that:

a) in the preparation of the annual accounts for the year ended March 31 2018 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;

b) the Directors had 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 profit of the Company for that period;

c) the Directors had 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 had prepared the annual accounts for the year ended March 312018 on a'going concern' basis;

e) they have laid down internal financial controls to be followed by the Company andsuch internal financial controls are adequate and operating effectively;

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

• Composition of Committees:

Currently the board has Five Committees: Audit Committee Nomination and RemunerationCommittee Corporate Social Responsibility Committee Stakeholders Relationship Committeeand Risk Management Committee.

• Audit Committee

As required under section 177 (8) of the Companies Act 2013 and SEBI (LODR)Regulations 2015 the composition of the Audit Committee is mentioned herein below:

Name of Members Designation
Mr. Keyoor Bakshi Chairman to the Committee
Mr. Manish Kiri Member
Mr. Mukesh Desai Member
Mrs. Veena Padia Member

During the year all the recommendations made by the Audit Committee were accepted bythe Board. A detailed note on the composition of the board and other committees isprovided in the corporate governance report which is forming part of this annual report.

• Corporate Social Responsibility:

Pursuant to Section 135 of Companies Act 2013 the Company has constituted CorporateSocial Responsibility Committee (CSR Committee) comprising of following members:

Name of Members Designation
Mrs. Veena Padia Chairman to the Committee
Mr. Pravin Kiri Member
Mr. Manish Kiri Member
Mr. Mukesh Desai Member

Your Company has always been committed to the cause of social service and hasrepeatedly channelized its resources and activities which positively affects the societysocially ethically and also environmentally. Your Company has taken up various CorporateSocial Responsibility ("CSR") initiatives and enhanced value in the society.

Your Company has formulated CSR Policy which encompasses its philosophy and guides itssustained efforts for undertaking and supporting socially useful programs for the welfare& sustainable development of the society.

In compliance of Section 135 of the Companies Act 2013 the Company shall in everyfinancial year utilize at least 2% of average net profit of last three years towards CSRactivities. The Annual Report on CSR containing particulars as specified under Rule 8 ofCompanies (Corporate Social Responsibility) Rules 2014 is set out in Annexure C ofthis report. For other details regarding the CSR Committee please refer to the corporategovernance report.

The CSR policy is available on the website of the Company i.e.

• Nomination and Remuneration Policy for Directors Key Managerial Personnel andOther Employees

As prescribed under section 178 of the Companies Act 2013 ("the Act") yourCompany has adopted Nomination and Remuneration policy of Directors appointment andremuneration including criteria for determining qualifications positive attributesindependence of a Director and the same is available on the website of the Company The relevant information as per Regulation 19 of the SEBI (LODR)Regulations 2015 is available in the Corporate Governance report.

• Board Evaluation:

The Nomination and Remuneration Committee and the Board of Directors of the Company hadlaid down the process and criteria for annual performance evaluation of the Board itsCommittees and individual Directors. The Board of Directors have carried out an evaluationof its own performance its Committees and that of its individual Directors in compliancewith the provisions of the Act and Listing Regulations.

The evaluation process covered aspects such as Board structure and compositionfrequency of Board Meetings participation in the long term strategic planningcontribution to and monitoring of corporate governance practices and the fulfilment ofDirectors' obligation and fiduciary responsibilities including but not limited to activeparticipation at the Board and Committee meetings. The Board at its meeting reviewed theperformance of the Board as a whole its Committees and individual Directors taking intoaccount feedback of the Nomination and Remuneration Committee and the IndependentDirectors which included the evaluation of the Chairman and Non- Independent Directors ofthe Company.

• Familiarisation Programme for Directors:

The Company believes that a Board which is adequately informed/familiarised with theCompany and its affairs can contribute significantly to effectively discharge itsfiduciary duty as director of the company and that fulfils stakeholders' aspirations andsocietal expectations. In this regard the Directors of the Company are updated on changes/ developments in the domestic / global industry scenario in the sector which affect thebusiness of the Company to enable them to take well informed and timely decisions. Thedetails of such familiarization programmes have been disclosed on the Company's websitei.e.

• Details of Loans Investments Guarantees:

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are provided in the notes to the Financial Statements ofthe Company for the year ended March 312018.

• Extract of annual return:

I n accordance with Section 134(3)(a) of the Companies Act 2013 an extract of theannual return is annexed to this report as "Annexure D". The said annualreturn is also available on website of the Company i.e.

• Conservation of energy research and development technology absorptions andforeign exchange earnings and outgo:

The relevant information on conservation of energy technology absorption foreignexchange earnings & outgo as required to be disclosed in term of Section 134(3)(m) ofthe Companies Act 2013 together with the Companies (Accounts of Companies) Rules 2014 isannexed to this report as "Annexure E".

• Risk Management:

The Company has a Risk Management framework in place to identify assess monitor andmitigate various risks to the business. This framework seeks to minimize adverse impact onthe business objectives and enhance the Company's competitive advantage. The frameworkalso defines the risk management approach across the company at various levels. RiskManagement Committee reviews the process of risk management. The details of the Committeeand its terms of reference are provided in the Corporate Governance Report forming part ofthe Board's Report. The Risk Management policy of the Company is available on website ofthe Company www.

• Internal Control Systems and their Adequacy:

The Company has an Internal Control System commensurate with the size and nature ofits business operations. The Company has appointed an external audit firm for internalaudit of the Company. The Internal Auditor reviews the adequacy of internal control systemin the Company its compliance with operating systems and laid down policies andprocedures. Based on the report of internal auditor the account department undertakecorrective actions in their respective areas and thereby strengthen the controls.Significant audit observations and corrective actions thereon are presented to the AuditCommittee on quarterly basis.

• Particulars of Employees:

A Statement pursuant to section 197 of the Companies Act 2013 read with Rule 5 ofCompanies (Appointment & remuneration of Managerial Personnel) Rules 2014 have beenattached hereto as "Annexure F".

• Human Resouce Development:

The Company believes that Human Resources play a vital role in achieving its corporategoal. Hence the Company continues to invest on hiring the best talent from otherindustries developing and retaining the available talent to ensure a sustainable talentsupply within the organization. The Company provides various opportunities to theemployees to develop their skills to take up higher responsibilities in the organization.

• Corporate Governance & Management Discussion and Analysis Report:

As prescribed under Regulation 34 (3) read with Schedule V of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 a separate section oncorporate governance practices implemented by the Company along with the ComplianceCertificate from the Statutory Auditors regarding compliance of conditions of corporategovernance as stipulated in SEBI (LODR) Regulations 2015 is attached to this Annualreport.

The Management Discussion and Analysis Report on the Industry and business operationsof the Company as required under SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is provided in a separate section and forms an integral part of thisReport.

• Significant and Material orders passed by the Regulators or Courts:

During the financial year under review no significant or material orders were passedby the Regulatory/ Statutory Authorities or the Courts which would impact the goingconcern status of the Company and its future operations.

• Material Changes:

During the year under review there has been no material changes and commitmentsaffecting the financial position of the Company.

• Updates on court case in Singapore:

The Company is holding 37.57% stake in DyStar Global Holdings (Singapore) Pte. Ltd.("DyStar"). On certain issues which are detailed below the Company feltaggrieved and hence has filed Minority oppression suit in June 2015 in Singapore HighCourt against Senda International Capital Limited ("Senda" /Majority Shareholderin DyStar) DyStar and nominated directors by Senda on DyStar Board for certain minorityoppression acts by Senda and their nominated directors on Board of DyStar. The Company hasfiled suit because of below mentioned major oppressive acts by Senda:

• Legitimate expectation of Kiri under Share Subscription and ShareholdersAgreement ("SSSA") with regard to DyStar be Board Managed Company Senda alonecan not control board of DyStar.

• Related Party Transactions with Longsheng related entities that only benefit tothem at expenses of DyStar.

• Payment of Special Incentives of US$ 2 million to Mr. Ruan Weixiang Chairman ofDyStar Board without approval of DyStar Board and without commercial justification.

• Exploitation of DyStar Patent.

• Payment of Fees to Longsheng for alleged service provided by Longsheng withoutapproval of Board of DyStar.

• Denying Kiri for Dividend which is only benefit to Kiri for its investment inDyStar.

• Exclude Kiri's Directors from Management of DyStar by instructing DyStarManagement not to provide information to Kiri.

• Payment of Special Incentive and Bonus to DyStar Management.

• DyStar's purchases from Kiri has stopped despite Kiri being a preferred supplierunder the SSSA.

• Blocked proposed sale of Kiri's stake in DyStartothe State General Reserve Fund("SGRF") by Senda.

• The refusal to carry outan IPO for DyStar.

Later on the said suit has been Transfer to Singapore International Commercial Court(SICC) as Suit No 4 of 2017.

DyStar has filed suit no. 3 of 2017 and Senda had raised following issue in theircounter claim:

• The Company Mr. Manish Kiri Mr. Pravin Kiri have breached their contractualobligation under SSSA with regard to compete with DyStar Solicit customers of DyStardisclosure of Confidential Information of DyStar.

• Mr. Manish Kiri and Mr. Amit Mukherjee (Kiri's Nominated Directors on DyStarBoard) have breached their fiduciary duties as Directors of DyStar and their harassing anddisruptive conduct is harmful to the DyStar.

• Claim against Kiri for payment of Euro 1.7 Milllions for Process TechnologyDevelopment fees and SG$ 443813 for audit costs.

The Singapore International Commercial Court (SICC) has released its judgment on July3 2018 in the legal suit filed by the Company and also for the legal suit filed by DyStarfor payment of certain outstanding amounts and breaches of agreed non-compete provisions.

The Singapore Court has found Senda committed numerous acts of minority oppressionagainst the Company and has ordered a buy-out of KIL's 37.57% stake in DyStar. The Courthas further ordered that the losses caused to DyStar by Senda's oppressive acts be writtenback into DyStar's value determining fair value of the Company's share.

A significant proportion of DyStar's claims in its legal suit for amounts outstandingand non-compete provisions and Senda's counterclaims in legal suit filed by the Companywere dismissed. The Court only awarded judgment for DyStar against the Company in respectof the sums of EUR 1.7 million and S$443813 (comprising monies due and owing in respectof Process Technology

Development fees and audit costs respectively) and damages to be assessed for abreach of non-complete clause in the Share Subscription and Shareholders Agreement("SSSA") executed by the Parties. The court has dismissed all the claims andcounterclaims against Mr. Pravin Kiri Mr. Manish Kiri Mr. Amitava Mukherjee (theCompany's nominated director on DyStar Board).

The Court has ordered parties to attend a case management conference for the fixing oftimelines for further submissions on matters relating to the valuation of Company's stakein DyStar. The case management conference fixed on August 16 2018 for the followingmatters:

• Whether the valuation of Kiri's shareholding should be undertaken by (A) thecourt (B) a valuer appointed by the court or the parties or (C) some other method and(if so) what method;

• Whether a discount should be factored into the valuation of Kiri's shareholdinggiven that Kiri is a minority shareholder;

• Flow (if at all) the court's rulings allowing part of DyStar's claims in Suit 3and Senda's counterclaims in Suit 4 may affect the valuation of Kiri's shareholding;

• Any other questions relevant to the valuation of Kiri's shareholding; and

• Theappropriateorderforcosts.

Further on August 1 2018 and August 3 2018 Senda and DyStar have respectivelypreferred an appeal before the Court of Appeals Singapore.

• Acknowledgement:

The Board takes this opportunity to sincerely thank all its stakeholders namelyshareholders customers suppliers/ contractors bankers employees Government agencieslocal authorities for their un-stinted support and co-operation during the year.

For and on behalf of Board of Directors
Date : August 10 2018 Pravin Kiri
Place : Ahmedabad Chairman