The board of directors (board') have great pleasure in presenting the company's thirtieth(30th) annual report on the business and operations of the company together with thestandalone and consolidated audited financial statements for the financial year endedmarch 31 2019.
1. Financial summary/ highlights:
The company's financial performance for the financial year ended march 31 2019 issummarised below:
(` in lakhs)
|Particulars ||Standalone ||Consolidated |
| ||2018-19 ||2017-18 ||2018-19 ||2017-18 |
|Revenue from operations ||49030.00 ||47360.00 ||53368.20 ||55929.55 |
|Add:- other income ||123.64 ||534.08 ||123.64 ||534.08 |
|Total income ||49153.64 ||47894.08 ||53491.84 ||56463.63 |
|Total expenses ||50728.54 ||48259.41 ||55061.89 ||56783.91 |
|Profit/ (loss) (pbt) beforetax ||(1574.90) ||(365.33) ||(1570.04) ||(320.28) |
|Less:- tax expense ||(603.03) ||(376.91) ||(601.56) ||(363.00) |
|Profit/ (loss) for the year (pat) ||(971.87) ||11.58 ||(968.48) ||42.70 |
|Others comprehensive income/ (loss) ||10.53 ||4.58 ||10.53 ||4.58 |
|Total comprehensive income/ (loss) ||(961.34) ||16.16 ||(957.95) ||47.28 |
Note: the above revenue from operation is net of excise duty and goods and service taxcollected on behalf of government.
2. Indian accounting standards:
Pursuant to notification issued by ministry of corporate affairs dated february 162015 notifying the companies (indian accounting standards) rules 2015 the company hasadopted indian accounting standards (ind-as) with effect from april 1 2017.
3. Financial performance:
On a consolidated basis the total revenue for financial year 2018-19 at `53491.84 lakhs was lower by 5.26% over the previous year ` 56463.63 lakhs in financialyear 2017-18. Total earning after tax for financial year 2018-19 is in loss of ` 968.48lakhs against the profit of previous year of ` 42.70 lakhs in financial year 2017-18.
On standalone basis the total revenue of the company increased to ` 49153.64 lakhsfor financial year 2018-19 against ` 47894.08 lakhs in previous financial year 2017-18.Your company reported total loss after tax was ` 971.87 lakhs for financial year 2018-19against the profit of ` 11.58 lakhs in financial year 2017-18.
In order to increase further sales in the near future the company is planning to adoptvarious strategies and programmes which will boost the demand for the company's products.The company is of the view to focus on magnifying innovations in the market place throughbrilliant execution and on building markets of the future or what we call as marketdevelopment' and thereby enhancing stakeholders value.
4. Transfer to reserve:
During the year under review the company has not transferred any amount to thereserve.
During the year under review your directors have not recommended any dividend.
6. Share capital:
Issued subscribed and paid up equity share capital of the company ` 338630650/-divided in to 33863065 equity shares of face value of ` 10/- each.
During the year under review the company has neither issued any shares withdifferential voting rights nor granted any stock options or sweat equity and does not haveany scheme to fund its employees to purchase the shares of the company.
7. Consolidated financial statements:
The consolidated financial statements of the company are prepared in accordance withthe relevant indian accounting standards issued by the institute of chartered accountantsof india and forms as an integral part of this report.
During the year under review the company has not accepted any deposits within themeaning of section 73 and section 76 of the companies act 2013 read with companies(acceptance of deposits) rules 2014.
9. Material changes and commitments affecting the financial position between the end offinancial year and date of report and change in nature of business of the company:
The board of directors of the company at its meeting held on july 01 2019 approvedconsolidation of operations into the parent plant of the company situated at mahagaonmaharashtra to achieve operational efficiencies and consequently board of directors alsoapproved selling of certain business assets which also includes non-core and surplusassets of the company situated at tumkur mahagaon and indore. The proceeds of such salewill be fully utilised to repay the term loan debt attached to this property. Thistransaction will result in saving in interest costs of ` 260 lakhs and operational costsof ` 420 lakhs approximately on an annualised basis.
10. Details in respect of fraud reported by auditors:
Pursuant to provisions of section 143 (12) of the companies act 2013 there were nofrauds reported by the auditors of the company during the year under review to the auditcommittee or the board of directors as such there is nothing to report under section 134(3) (ca) of the companies act 2013.
11. Director's responsibility statement:
Pursuant to section 134(5) of the companies act 2013 the board of directors make thefollowing statements to the best of their knowledge and ability:
A. That in the preparation of the annual financial statements the applicableaccounting standards have been followed along with proper explanation and that no materialdepartures have been made from the same;
B. That such accounting policies as mentioned in notes to the financial statements havebeen selected and applied consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of thecompany as at march 31 2019 and of the profit and loss of the company for the year endedon that date;
C. That the directors have 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; d. That the annual financial statements have been prepared on agoing concern basis; e. That the directors had laid down proper internal financialcontrols to be followed by the company and such internal financial controls are adequateand operating effectively; and f. That the directors had devised proper systems to ensurecompliance with the provisions of all applicable laws and that such systems were adequateand operating effectively.
12. Board of directors & key managerial personnel:
In accordance with the provisions of section 152 of the companies act 2013 and that ofarticles of association of the company mr. Rishav aggarwal (din: 05155607) whole-timedirector of the company being longest in the office shall retire by rotation at ensuing30th annual general meeting of the company and being eligible has offered himself forre-appointment.
Appointments and cessations of directors & key managerial personnels are as under:
Mrs. Urvashi dharadhar (din:08279196) was appointed by the board of directors of thecompany at its meeting held on november 14 2018 as an additional director (non-executive-independent director) with effect from november 14 2018 to hold office upto the date ofensuing annual general meeting of the company. The company has received a notice inwriting from a member of the company under section 160 of the companies act 2013proposing her candidature for the office of independent director of the company for a termof 5 (five) years w.e.f. November 14 2018. The tenure of mr. Sanjeev aggarwal(din:00064076) chairman & managing director of the company expired on march 312019. The board of directors at its meeting held on february 14 2019 on recommendationof nomination and remuneration committee has approved the re-appointment of mr. Sanjeevaggarwal for further period of 3 years with effect from april 01 2019 and the boardfurther recommended the same to the shareholders for their approval in ensuing 30th annualgeneral meeting of the company. His re-appointment and remuneration is in terms of thesection 196 197 198 200 and 203 read with schedule v of the companies act 2013. Thedetailed terms and conditions including remuneration have been mentioned in the noticeconvening 30th annual general meeting of the company. Mr. Dharak a. Mehta was appointed asthe company secretary & compliance officer of the company with effect from august 102018. Being company secretary of the company he has also been designated as key managerialpersonnel of the company under section 203 of the companies act 2013 and nodal officer ofthe company pursuant to investor education and protection fund (accounting audittransfer and refund) rules 2016.
Mrs. Snehal pawar company secretary
& compliance officer of the company has been resigned from the service of thecompany with effect from april 18 2018. Consequently she has also been ceased to act asthe key managerial personnel of the company.
Mrs. Anjana motwani (din: 02650184) ceased to be independent director with effect fromaugust 10 2018.
Mr. Amit sudhakar chief financial officer of the company has been resigned from theservice of the company with effect from may 20 2019. Consequently he has also been ceasedto act as the key managerial personnel of the company.
Pursuant to requirements of the section 203 of the companies act 2013 the board ofdirectors noted that mr. Sanjeev aggarwal (din: 00064076) chairman & managingdirector mr. Rishav aggarwal (din: 05155607) whole-time director and mr. Dharak a.Mehta company secretary & compliance officer of the company are the key managerialpersonnel of the company as on the date of this report.
Brief profile of the directors proposed to be appointed/ re-appointed as required underregulation 36(3) of the sebi (listing obligations and disclosure requirements)regulations 2015 and secretarial standard ii on general meetings (ss-2) issued by theinstitute of company secretaries of india (icsi) are provided in the notice of 30th agmof the company.
13. Declaration by independent directors:
All independent directors of the company have submitted a declaration and confirmedthat they meet the criteria of independence as mentioned under the provisions ofsub-section (6) of section 149 of the companies act 2013 and regulation 16 of sebi(listing obligations and disclosure requirements) regulations 2015.
14. Nomination and remuneration policy:
Pursuant to the provisions of section 178 of the act and regulation 19 of sebi (listingobligations & disclosure requirements) regulations 2015 and on the recommendation ofthe nomination & remuneration committee the board has adopted the nomination
& remuneration policy for selection and appointment of directors senior managementincluding key managerial personnel (kmp) and their remuneration. The details ofremuneration policy are stated in the corporate governance report. The details of thispolicy have been posted on the website of the company viz.Http://www.kisangroup.com/investorrelations/ code-policies.php.
15. Board evaluation:
Pursuant to the applicable provisions of the companies act 2013 and sebi (listingobligations and disclosure requirements) regulations 2015 the board has carried out anannual evaluation of its own performance board committees and individual directors andchairperson. The evaluation process inter alia considers attendance of directors at boardand committee meetings acquaintance with business communicating inter se board memberseffective participation domain knowledge compliance with code of conduct vision andstrategy etc. which is in compliance with applicable laws regulations and guidelines.The chairman of the respective board committees shared the report on evaluation with therespective committee members. The performance of each committee was evaluated by theboard based on the report of evaluation received from respective board committees.
The performance evaluation of the independent directors was also carried out by theentire board excluding the director being evaluated. The performance evaluation of thechairman and the non independent directors was carried out by the independent directors attheir respective meeting held on february 14 2019.
The board of directors expressed their satisfaction with the evaluation process.
16. Policy on directors' appointment and remuneration and other details:
Pursuant to provision of section 178(3) of the companies act 2013 the policy forappointment and selection of director and their remuneration including criteria fordetermining qualification positive attributes independence of director and other mattersare adopted by the board of directors of the company.
17. Number of meetings of the board:
Four (4) meetings of the board were held during the financial year 2018-19. For detailsof the meetings of the board and attendance of directors kindly refer to the corporategovernance report which is part of this report.
18. Number of meetings of the audit committee:
Four (4) meetings of the audit committee were held during the financial year 2018-19.For
Details of the meetings and members of the audit committee kindly refer to thecorporate governance report which forms part of this report. All recommendations of theaudit committee have been accepted by the board.
A) statutory auditors:
M/s. Adv & associates chartered accountants mumbai (firm registration no.128045w) were appointed as the statutory auditors in 27th annual general meeting(agm') to hold office from the conclusion of 27th agm for a term of consecutive fiveyears till conclusion of 32nd agm (subject to ratification of the appointment by themembers at every agm).
Mca vide circular dated may 7 2018 omitted the requirement of ratification of term ofstatutory auditor every year. However the auditors have confirmed their eligibilitylimits as prescribed in the companies act 2013 and that they are not disqualified forsuch appointment.
The notes on financial statements referred to in the auditors' report areself-explanatory and there is no audit qualification reservation or adverse remark forthe year under review.
B) cost auditors:
In terms of section 148 of the companies act 2013 read with rule 8 of the companies(accounts) rules 2014 it is stated that the cost accounts and records are made andmaintained by the company as specified by the central government under sub-section (1) ofsection 148 of the companies act 2013. Pursuant to the provisions of section 148 of thecompanies act 2013 read with the companies (cost records and audit) rules 2014 yourcompany is required to appoint cost auditor for the audit of cost records of the company.
A certificate from m/s. Bhanwarlal gurjar & co. cost accountants has been receivedto the effect that their appointment as cost auditor of the company if made would be inaccordance with the limits specified under section 141 of the act and rules framedthereunder.
The board on recommendation of audit committee has approved the appointment andremuneration of m/s. Bhanwarlal gurjar & co. cost accountants (frn: 101540) as thecost auditor to audit of cost accounting records of the company for the financial year2019-20 at their meeting held on may 21 2019.
In accordance with the provisions of section 148 of the companies act 2013 read withthe companies (audit and auditors) rules 2014 since the remuneration payable to the costauditors is required to be ratified by the shareholders; the board recommends the same forapproval of shareholders at the ensuing agm.
During the financial year 2018-19 the cost auditor had not reported any matter u/s143(12) of the act therefore no detail is required to be disclosed u/s 134(3) (ca) of theact.
C) secretarial auditors:
Pursuant to the provisions of section 204 of the companies act 2013 and the companies(appointment and remuneration of managerial personnel) rules 2014 on recommendation ofaudit committee the board of directors at their meeting held on may 21 2019 hadappointed m/s. Avs & associates company secretaries in practice navi mumbaito conduct secretarial audit for the financial year 2019-20.
The report on secretarial audit for the financial year 2018-19 issued by m/s. Avs& associates company secretaries in form mr-3 forms integral part of this report as annexure-d
The observations given by secretarial auditor in their report for the financial yearended march 31 2019 are self explanatory except the following:
|Sr. Observations ||Reply to the observations |
|1. As on march 31 2019 minor share- holding i.e. (0.06%) of one member of promoter group was not in demateri- alized form pursuant to regulation 31 of the sebi (lodr) regulations 2015. ||With reference to the observations made by the secretarial auditors in their report the company wishes to state that the said member of the pro- moter group of the company was under process of dematerializing her total shareholding in the com- pany. However as on date of the report hundred percent (100%) of shareholding of promoter(s) and promoter group is in dematerialized form. |
D) internal auditors:
Pursuant to the provisions of section 138 of the companies act 2013 and rules madethereunder (including any amendment(s) modification(s) or re-enactment(s) thereof for thetime being in force) the board of directors of the company on recommendation of auditcommittee at their meeting held on may 21 2019 have appointed m/s. Cas & co.chartered accountants as internal auditors of the company for the financial year 2019-20to conduct internal audit of the company.
20. Internal financial control system and their adequacy:
The company has in place internal financial control system commensurate with sizescale and complexity of its operations to ensure proper recording of financial andoperational information & compliance of various internal controls statutorycompliances and other regulatory compliances. During the year under review no material orserious observation has been received from the internal auditors of the company forinefficiency or inadequacy of such controls.
M/s. Cas & co. (earlier known as k.m tulsian & associates) internal auditors'comprising of professional chartered accountants monitor & evaluate the efficacy ofinternal financial control system in the company its compliance with operating systemaccounting procedures & policies at all the locations of the company. Based on theirreport of internal audit function corrective actions in the respective area areundertaken & controls are strengthened. Significant audit observations andrecommendations along with corrective action suggested thereon are presented to the auditcommittee of the board. The company is periodically following all the applicable indianaccounting standards for properly maintaining the books of account and reporting financialstatements.
21. Particulars of loans guarantees or investments by the company:
Details of loans guarantees and investments under the provisions of section 186 of thecompanies act 2013 read with the companies (meetings of board and its powers) rules2014 as on march 31 2019 are set out in notes to the standalone financial statements ofthe company provided in this annual report.
22. Vigil mechanism/ whistle blower policy:
The company has established and adopted vigil mechanism and the policy (whistle blowerpolicy) thereof for directors and employees of the company in accordance with theprovisions of companies act 2013 as well as regulation 22 of sebi (listing obligationsand disclosure requirements) regulations 2015. During the year under review no personnelof the company approached the audit committee on any issue falling under the said policy.The vigil mechanism policy is available on the website of the company viz.Http://www.kisangroup.com/ investorrelations/code-policies.php
23. Particulars of contracts or arrangements made with related parties:
All transactions entered into by the company with related parties were in the ordinarycourse of the business and at arm's length basis and are in accordance with the provisionsof the companies act 2013 rules made thereunder & regulation 23 of sebi (listingobligations and disclosure requirements) regulations 2015. The company has obtainedapproval of the audit committee for entering into transactions with related parties. Astatement of all related party transactions are placed before the audit committee and asalso before the board approval for its review on a quarterly basis specifying thenature value and terms and conditions of the transactions.
During the year under review the company has not entered into any contracts/arrangements/ transactions with related parties which qualify as material in accordancewith the policy of the company on materiality of related party transactions. Accordinglythe disclosure of related party transactions as required under section 134(3)(h) of thecompanies act 2013 in form aoc-2 is not applicable. The details of the related partytransactions as per indian accounting standards (ind as) are set out in note no. 40 of thestandalone financial statements of the company and the policy on related partytransaction as formulated by the board is available on the company's website athttp://www.kisangroup.com/investorrelations/ code-policies.php
24. Extract of annual return:
As provided under section 92(3) of the companies act 2013 read with companies(management and administration) rules 2014 the details forming part of the extract ofannual return prescribed in the form mgt-9 is given in annexure - e andforms an integral part of this report. The same also available on the website of thecompany at http://www.kisangroup.com/pdf/investor%20relations/general-meeting/2018-19/annual%20 report.pdf
25. Investor education and protection fund (iepf):
Pursuant to the provision of the companies act 2013 and rules made thereunder allunpaid or unclaimed dividends are required to be transferred by the company to the iepfauthority as established by the government of india after completion of seven years.Accordingly the company has transferred the unclaimed and unpaid dividend of ` 180791/-for the financial year 2010-11 to the iepf authority.
Further pursuant to the provision of section 124 of the companies act 2013 read withthe rule 6 of the investor education and protection fund authority (accounting audittransfer and refund) rules 2016 as amended from time to time (iepf rules) shares of thecompany in respect of which dividend entitlements have remained unclaimed and unpaid forseven consecutive years or more are required to be transferred by the company to thedemat account of the iepf authority within period of 30 days of such shares becoming dueto be so transferred. Communication was sent by the company to the concerned members whohad not claimed their dividend for seven consecutive years or more providing them anopportunity to claim such dividend. Accordingly the company has transferred the 20738equity shares on november 28 2018 to the iepf authority for the financial year 2010-11.
26. Energy conservation technology absorption and foreign exchange earnings and outgo:
The information related to conservation of energy technology absorption foreignexchange earnings and outgo as required under section 134 (3)(m) of the companies act2013 read with rule 8(3) of the companies (accounts) rules 2014 is annexed herewith as annexure-fto this report.
27. Statement concerning development andimplementationofrisk management policy of thecompany:
As per provisions of the companies act 2013 and as part of good corporate governancethe company has laid down the procedures to inform to the board about the risk assessmentand minimization procedures and the board shall be responsible for framing implementingand monitoring the risk management plan and policy for the company. The main objective isto ensure sustainable business growth with stability and to promote a pro-active approachin reporting evaluating and resolving risks associated with the business.
The audit committee and the board of directors periodically review the various riskassociates with business of the company. Such review includes risk identificationevaluation and mitigation of the risk.
Kml tradelinks private limited is a wholly owned subsidiary of your company. During theyear the board of directors (the board') reviewed the affairs of the subsidiary. Inaccordance with section 129(3) of the act the company has prepared consolidated financialstatements of the company and its subsidiary which form part of the annual report.
Pursuant to section 129(3) of the companies act 2013 read with rule 5 of the companies(accounts) rules 2014 a statement containing salient features of the financialstatements of subsidiaries/ associates companies/ joint ventures is given in formaoc-i' and forms an integral part of this report as annexure- a.
In accordance with section 136 of the companies act 2013 the audited financialstatements including the consolidated financial statements and related information of thecompany and audited accounts of its subsidiary are available on website of thecompany at http://www.kisangroup.com/investorrelations/ financialresults.php
29. Material subsidiary:
The board of directors of the company had adopted a policy for determining materialsubsidiary in line with the sebi (listing obligations & disclosure requirements)regulations 2015. The policy is posted on the company's website at:http://www.kisangroup. Com/investorrelations/code-policies.php
Presently there is no material subsidiary company of the company for the financialyear 2018-19 pursuant to provision of the sebi (listing obligations and disclosurerequirements) regulations 2015.
30. Details of policy developed and implemented by the company on its corporate socialresponsibility initiatives:
As the provisions of corporate social responsibility under section 135 of the companiesact 2013 are not applicable to the company and thus the company has not developed orimplemented any corporate social responsibility initiatives as on date.
31. Management's discussion and analysis report:
Management's discussion and analysis report on the operations of the company for theyear under review is provided in a separate section and forms an integral part of thisreport as
32. Particulars of remuneration to directors and employees:
Pursuant to provisions of section 197(12) of the companies act 2013 read with rule 5of the companies (appointment and remuneration of managerial personnel) rules 2014 theparticulars of remuneration to the directors and employees of the company and the detailsof the ratio of remuneration of each director to the median employee's remuneration isannexed herewith as annexure- b to this report.
33. Significant and material orders passed by the regulators or courts:
During the year under review no significant or material orders were passed by theregulators or courts or tribunals which would impact the company's existence goingconcern status and future operations of the company.
34. Corporate governance report:
Pursuant to regulation 34 read with schedule v of sebi (listing obligations &disclosure requirements) regulations 2015 a separate report on corporate governancepractices followed by the company together with a certificate from the company'ssecretarial auditors confirming compliance of conditions of corporate governance forms anintegral part of this report.
35. Compliance with secretarial standards:
The institute of company secretaries of india a statutory body has issued secretarialstandards on various aspects of corporate law and practices. The company has devisedproper system to ensure compliance with the provisions of all applicable secretarialstandards issued by the institute of company secretaries of india and that such systemsare adequate and operating effectively.
36. Prevention of sexual harassment at workplace:
The company strongly believes in zero tolerance towards sexual harassment at theworkplace and is committed to provide a healthy environment to each and every employee ofthe company. Your company has framed and adopted a policy in line with provision of thesexual harassment of women at workplace (prevention prohibition and redressal) act 2013and rules made thereunder. All employees (permanent contractual temporary trainees) arecover under the said policy.
The company has also constituted an internal complaints committee (icc) in all thedevelopment centres of the company across
Overview reports statements
India to consider and resolve all sexual harassment complaints reported by women. Theconstitution of the icc is as per the sexual harassment of women at workplace (preventionprohibition and redressal) act 2013 and the committee also includes external members withrelevant experience. Half of the total members of the icc are women.
There were no complaints received and pending during the f.y 2018-19.
The directors take this opportunity to express its gratitude and record its sincereappreciation towards its clients vendors investors financial institutions bankersbusiness associates and the government and other regulatory authorities for theircontinued support cooperation and professionalism during the year. The directors of thecompany thank all stakeholders for their valuable sustained support and encouragementtowards the conduct of the proficient operation of the company and look forward to theircontinued support in the future. The directors would like to place on record theirgratitude to all the employees who have continued their support during the year. Ourconsistent growth was made possible by their hard work solidarity cooperation andsupport.
|For and on behalf of the board of directors |
|Kisan mouldings limited |
|Sanjeev a. Aggarwal |
|Chairman & managing director |
|(din: 00064076) |
|Date: august 14 2019 |
|Place: mumbai |